Filed by Pure Compliance



 




Exhibit 10.1




EXECUTION COPY




AMENDED AND RESTATED FINANCING AGREEMENT




THE CIT GROUP/BUSINESS CREDIT, INC.

(as Lender and as Agent)




And




ROCK OF AGES CORPORATION

(as Borrower)




CAROLINA QUARRIES, INC.

(as Borrower)




PENNSYLVANIA GRANITE CORP.

(as Borrower)




KEITH MONUMENT COMPANY LLC

(as Borrower)




ROCK OF AGES MEMORIALS, INC.

(as Borrower)




SIOUX FALLS MONUMENT CO.

(as Borrower)




Dated: as of October 24, 2007



 


 









 





TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	Page
	 
	 	 	 	 	 	 
	SECTION 1.
	 	Definitions	 	 	1	 
	 
	 	 	 	 	 	 
	SECTION 2.
	 	Conditions Precedent	 	 	15	 
	 
	 	 	 	 	 	 
	SECTION 3.
	 	Revolving Loans	 	 	18	 
	 
	 	 	 	 	 	 
	SECTION 4.
	 	Term Loans	 	 	22	 
	 
	 	 	 	 	 	 
	SECTION 5.
	 	Letters of Credit	 	 	24	 
	 
	 	 	 	 	 	 
	SECTION 6.
	 	Collateral	 	 	26	 
	 
	 	 	 	 	 	 
	SECTION 7.
	 	Representations, Warranties and Covenants	 	 	30	 
	 
	 	 	 	 	 	 
	SECTION 8.
	 	Interest, Fees and Expenses	 	 	39	 
	 
	 	 	 	 	 	 
	SECTION 9.
	 	Powers	 	 	42	 
	 
	 	 	 	 	 	 
	SECTION 10.
	 	Events of Default and Remedies	 	 	43	 
	 
	 	 	 	 	 	 
	SECTION 11.
	 	Termination	 	 	46	 
	 
	 	 	 	 	 	 
	SECTION 12.
	 	Agreement Between the Lenders	 	 	46	 
	 
	 	 	 	 	 	 
	SECTION 13.
	 	Agency	 	 	50	 
	 
	 	 	 	 	 	 
	SECTION 14.
	 	General Indemnity	 	 	53	 
	 
	 	 	 	 	 	 
	SECTION 15.
	 	Miscellaneous	 	 	53	 






SCHEDULES




	 	 	 	 	 
	Schedule I

	 	—
	 	Applicable Increments
	 
	 	 	 	 
	EXHIBITS
	 
	 	 	 	 
	Exhibit A

	 	—
	 	Form of Promissory Note
	Exhibit B

	 	—
	 	Form of Assignment and Transfer Agreement
	Exhibit C

	 	—
	 	Form of Borrowing Base Certificate






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THE CIT GROUP/BUSINESS CREDIT, INC., a New York corporation (hereinafter “CIT”), with offices
located at 11 West 42nd Street, New York, NY 10036, the other lenders that may, on or
subsequent to the date hereof, purchase from CIT or from another Lender a portion of CIT’s or such
other Lender’s rights and obligations under this Amended and Restated Financing Agreement (CIT and
such other lenders each sometimes referred to individually as a “Lender” and collectively as the
“Lenders”) and CIT as agent for the Lenders (the “Agent”), are pleased to confirm the terms and
conditions under which the Lenders shall make term loans and revolving loans, advances and other
financial accommodations to ROCK OF AGES CORPORATION (“ROA”), a Delaware corporation with a
principal place of business at 772 Granitville Road, Graniteville, Vermont 05654; CAROLINA
QUARRIES, INC. (“Carolina”), a Delaware corporation with a principal place of business at 805
Harris Granite Road, Salisbury, North Carolina 28146; PENNSYLVANIA GRANITE CORP. (“Pennsylvania”),
a Pennsylvania corporation with a principal place of business at 410 Trythall Road, Elverson,
Pennsylvania 19520; KEITH MONUMENT COMPANY LLC (“Keith”), a Delaware limited liability company with
a principal place of business at 1407 North Dixie Highway, Elizabethtown, Kentucky 42702; ROCK OF
AGES MEMORIALS, INC. (“Memorials”), a Delaware corporation with a principal place of business at
772 Graniteville Road, Graniteville, Vermont 05654; SIOUX FALLS MONUMENT CO. (“Sioux Falls”), a
South Dakota corporation with a principal place of business at 4901 W. 12th Street,
Sioux Falls, South Dakota 57106; and such other subsidiaries or affiliates of the foregoing as the
Lenders, by unanimous consent, permit to become a party hereto (ROA, Carolina, Pennsylvania, Keith,
Memorials, and Sioux Falls and such other permitted parties are hereinafter sometimes referred to
individually as a “Company” and collectively as the “Companies”).



BACKGROUND




The Companies and CIT, as a lender and as agent for the other lenders, entered into a
Financing Agreement, dated as of December 17, 1997 (as the same may have been amended, modified or
supplemented from time to time, the “Existing Financing Agreement”), and certain other documents in
connection therewith (together with the Existing Financing Agreement, the “Existing Financing
Documents”). In connection with the Existing Financing Agreement, the Agent and the “Lenders” (as
defined in the Existing Financing Agreement) have made available to the Companies a revolving
credit facility and term loans in the aggregate original principal amount of $50,000,000. By
execution of this Amended and Restated Financing Agreement, the Companies, the Agent and such
Lenders amend and restate the Existing Financing Agreement on the terms and conditions hereinafter
set forth.



IN CONSIDERATION of the mutual covenants and undertakings herein contained, the Companies, the
Agent and the Lenders hereby agree as follows:



SECTION 1. Definitions




Accounts shall mean all of each Company’s now existing and future “accounts” (as such
term is defined under Article 9 of the NY UCC) and shall include: (a) accounts receivable, (whether
or not specifically listed on schedules furnished to the Agent), and any and all instruments,
documents, contract rights, chattel paper, general intangibles, including, without limitation, all
accounts created by or arising from each Company’s sales of goods or rendition of



 


 









 






services to its customers, and all accounts arising from sales or rendition of services made
under any Company’s trade names or styles, or through any of a Company’s divisions; (b) unpaid
seller’s rights (including rescission, replevin, reclamation and stoppage in transit) relating to
the foregoing or arising therefrom; (c) rights to any goods represented by any of the foregoing,
including rights to returned or repossessed goods; (d) reserves and credit balances arising
hereunder; (e) guarantees or collateral for any of the foregoing; (f) insurance policies or rights
relating to any of the foregoing; and (g) cash and non-cash proceeds of any and all the foregoing.



Acquisition Term Loan Line of Credit shall mean the sum of $30,000,000, less the
aggregate outstanding principal amount of the Term Loans as of the date of any determination.



Anniversary Date shall mean October 23rd of every year after the date of
this Financing Agreement. For the avoidance of doubt, the first Anniversary Date shall be October
23, 2008, and the fifth Anniversary Date shall be October 23, 2012.



Applicable Fee Percentage shall mean on any date of determination (subject to
Paragraph 3 of Section 8 hereof), with respect to the Letter of Credit Guaranty Fee, the applicable
rate per annum set forth in the definition of Applicable Increment, under the applicable caption,
based on the Companies’ consolidated Funded Debt to Net Worth Ratio corresponding thereto as of the
last day of the fiscal quarter ended immediately prior to such date of determination.



Applicable Increment shall mean on any date of determination (subject to Paragraph 3
of Section 8 hereof), with respect to any Revolving Loan or the Term Loans bearing interest based
on the Chase Bank Rate or Libor or any Letter of Credit, the applicable rate per annum set forth on
Schedule I attached hereto under the applicable caption, based on the Companies’ consolidated
Funded Debt to Net Worth Ratio corresponding thereto as of the last day of the fiscal quarter ended
immediately prior to such date of determination.



Applicable Sublimit shall mean $4,000,000.00; provided, however, that
the amount of the Applicable Sublimit shall decrease automatically on December 31, 2007, and on the
last day of each fiscal quarter thereafter, in each case by the sum of $100,000, until the
Applicable Sublimit equals zero.



Assignment and Transfer Agreement shall mean the Assignment and Transfer Agreement in
the form of Exhibit B attached hereto.



Availability shall mean at any time the excess of the sum of (a) an amount equal to
Eligible Accounts Receivable multiplied by the percentage set forth in clause (a) of Paragraph 1 of
Section 3 of this Financing Agreement, plus (b) the lesser of (i) $10,000,000.00 or (ii) an
amount equal to the aggregate value of Eligible Inventory (determined at the lower of cost or
market value) multiplied by the percentage set forth in clause (b) of Paragraph 1 of Section 3 of
this Financing Agreement, plus (c) the lesser of (i) the Applicable Sublimit or (ii) an
amount equal to the aggregate value of Eligible Fixed Assets, over the sum of (x) the aggregate
outstanding amount of all Obligations (other than the Term Loans), plus (y) the
Availability Reserve. For purposes of clause (c) of this definition, the “value” of any Eligible
Fixed Assets
shall equal 80% of the net orderly liquidation value of such Eligible Fixed Assets, as set
forth in the most recent appraisals thereof, provided that if any such appraisal is not
then available, then as determined by the Agent in its reasonable business judgment.


 


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Availability Reserve shall mean at any time of determination, the then outstanding
amount of all Letters of Credit.



Borrowing Base shall have the meaning and shall be calculated in accordance with
Paragraph 1 of Section 3 of this Financing Agreement.



Borrowing Base Certificate shall mean a certificate in the form of Exhibit C attached
hereto.



Business Day shall mean any day on which all of the Agent, CIT and JP Morgan Chase
Bank are open for business in New York, New York.



Capital Expenditures shall mean to the extent capitalized in accordance with GAAP, any
expenditure for fixed assets (both tangible and intangible) including assets being constructed
(whether or not completed), leasehold improvements, capital leases under GAAP, installment
purchases of machinery and equipment, acquisitions of real estate and other similar expenditures
including without duplication (i) in the case of a purchase, the entire purchase price, whether or
not paid during the fiscal period in question, (ii) in the case of a capital lease, the capitalized
amount thereof (determined in accordance with GAAP) and (iii) without duplication, expenditures in
or from any construction-in-progress account of any of the Companies.



Capital Lease shall mean any lease of property (whether real, personal or mixed)
which, in conformity with GAAP, is accounted for as a capital lease or a Capital Expenditure on the
balance sheets of the Companies.



Change of Control shall mean, as of any date of determination, 51% or more of the
combined voting power of the then outstanding voting securities of ROA entitled to vote generally
in the election of directors of ROA is no longer owned, directly or indirectly, beneficially and of
record, individually or in the aggregate, by (i) Kurt M. Swenson (“Kurt”), (ii) Kevin Swenson
(“Kevin”), (iii) any member of the immediate family of Kurt or Kevin, or (iv) any trusts,
partnerships, corporations or limited liability companies in which Kurt or Kevin, individually or
collectively, shall at all times have the power to vote for or appoint a majority of the members of
the governing body of such trust, partnership, corporation or limited liability company.



Chase Bank Rate shall mean the rate of interest per annum announced by JP Morgan Chase
Bank from time to time as its prime rate in effect at its principal office in New York, New York.
(The prime rate is not intended to be the lowest rate of interest charged by JP Morgan Chase Bank
to its borrowers).



Chattel Paper shall have the meaning given to such term under Article 9 of the NY UCC.


 


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CIT’s System shall mean CIT’s StuckyNet or other internet-based loan accounting and
reporting system.



Closing Date shall mean October 23, 2007.



Collective Loan Account shall have the meaning given to such term in Paragraph 6 of
Section 3 of this Financing Agreement.



Collateral shall have the meaning given to such term in Paragraph 1 of Section 6 of
this Financing Agreement.



Collateral Documents shall mean all books, records, ledger cards, files,
correspondence, customer lists, blueprints, technical specifications, manuals, computer software,
computer printouts, tapes, disks and other electronic storage media and related data processing
software and similar items that at any time evidence or contain information relating to any of the
Collateral or are otherwise necessary or helpful in the collection thereof or realization
thereupon.



Collateral Management Fee shall mean the sum which shall be paid to the Agent, solely
for the benefit of the Agent, in accordance with Section 8 hereof to offset the expenses and costs
of the Agent in connection with record keeping, periodic examinations, inventory test counts,
retail location visits and analyzing and evaluating the Collateral.



Collateral Support shall mean all property (real or personal) assigned, hypothecated
or otherwise securing any Collateral and shall include any security agreement or other agreement
granting a lien or security interest in such real or personal property.



Commercial Tort Claims shall have the meaning given to such term under Article 9 of
the NY UCC.



Consolidated Balance Sheet shall mean a consolidated balance sheet for the Companies
and their consolidated subsidiaries eliminating all inter-company transactions and prepared in
accordance with GAAP.



Consolidating Balance Sheet shall mean a Consolidated Balance Sheet plus individual
balance sheets for the Companies and their subsidiaries showing all eliminations of inter-company
transactions and prepared in accordance with GAAP and including a balance sheet for each Company
exclusively.



Copyrights shall mean all present and hereafter acquired copyrights, copyright
registrations, recordings, applications, designs, styles, licenses, marks, prints and labels
bearing any of the foregoing, all reissues and renewals thereof, all licenses thereof, all other
general intangible, intellectual property and other rights pertaining to any of the foregoing,
together with the goodwill associated therewith, and all income, royalties and other Proceeds of
any of the foregoing.



Current Assets shall mean, whenever used throughout this Financing Agreement, those
assets of the Companies which, in accordance with GAAP, are classified as “current”.


 


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Current Liabilities shall mean, wherever used through out this Financing Agreement,
those liabilities of the Companies which, in accordance with GAAP, are classified as “current”,
provided, however, that notwithstanding GAAP, the Revolving Loans and the current portion of
Permitted Indebtedness shall be considered “current liabilities”.



Customarily Permitted Liens shall mean:



(a) liens of local or state authorities for franchise or other like taxes provided the
aggregate amounts of such liens shall not exceed $500,000.00 in the aggregate at any one time;



(b) statutory liens of landlords and liens of carriers, warehousemen, mechanics, materialmen
and other like liens imposed by law, created in the ordinary course of business and for amounts not
yet due (or which are being contested in good faith by appropriate proceedings or other appropriate
actions which are sufficient to prevent imminent foreclosure of such liens) and with respect to
which adequate reserves or other appropriate provisions are being maintained in accordance with
GAAP;



(c) deposits made (and the liens thereon) in the ordinary course of business (including,
without limitation, security deposits for leases, surety bonds and appeal bonds) in connection with
workers’ compensation, unemployment insurance and other types of social security benefits or to
secure the performance of tenders, bids, contracts (other than for the repayment or guarantee of
borrowed money or purchase money obligations), statutory obligations and other similar obligations
arising as a result of progress payments under government contracts; and



(d) easements (including, without limitation, reciprocal easement agreements and utility
agreements), encroachments, minor defects or irregularities in title, variation and other
restrictions, charges or encumbrances (whether or not recorded) affecting the Real Estate and which
are listed in Schedule B of the title insurance policies delivered to the Agent herewith.



Deposit Accounts shall mean all “deposit accounts” (as such term is defined under
Article 9 of the NY UCC) of each Company.



Default shall mean any event specified in Section 10 hereof, whether or not any
requirement for the giving of notice, the lapse of time, or both, or any other condition, event or
act, has been satisfied.



Default Rate of Interest shall mean a rate of interest per annum equal to the sum of:
(a) two and one-half percent (2.5%) plus (b) the Chase Bank Rate, which the Agent shall be
entitled to charge the Companies on all Obligations to the extent provided in Paragraph 2 of
Section 10 of this Financing Agreement.



Depository Accounts shall mean those accounts owned by the Agent and designated for
the deposit of proceeds of Collateral.


 


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Documentation Fees shall mean the Agent’s standard in-house legal counsel fees and
charges relating to any and all modifications, waivers, releases, amendments or additional
collateral with respect to this Financing Agreement, the Collateral and the Obligations.



Documents of Title shall mean all “documents” (as such term is defined under Article 9
of the NY UCC) and shall include all present and future warehouse receipts, bills of lading,
shipping documents, chattel paper, instruments and similar documents, all whether negotiable or not
and all goods and Inventory relating thereto and all cash and non-cash proceeds of the foregoing.



Dollars and $ shall mean dollars in lawful currency of the United States of
America.



Early Termination Date shall mean the date on which ROA terminates this Financing
Agreement or the Line of Credit which date is prior to the fifth Anniversary Date.



Early Termination Fee shall: (i) mean the fee the Agent, on behalf of the Lenders, is
entitled to charge the Companies in the event any of the Companies terminates the Line of Credit or
this Financing Agreement on a date prior to the fourth Anniversary Date; and (ii) be determined by
multiplying the Line of Credit by (x) one percent (1%) if such termination occurs on or prior to
the first Anniversary Date, and (y) one-half of one percent (0.50%) if such termination occurs
after the first Anniversary Date, but on or prior to the fourth Anniversary Date.



EBITDA shall mean, for any period, all earnings of the Companies before all interest,
depreciation, amortization of general intangibles, and tax obligations of the Companies for such
period, determined in accordance with GAAP.



Eligible Accounts Receivable shall mean the gross amount of each Company’s accounts
receivable that are subject to a valid, first-priority and fully perfected security interest in
favor of the Agent, on behalf of the Lenders, and that conform to the warranties contained herein
and at all times continue to be acceptable to the Agent in the exercise of its reasonable business
judgment, less, without duplication, the sum of (a) any returns, discounts, claims, credits and
allowances of any nature (whether issued, owing, granted or outstanding) and (b) reserves for: (i)
accounts receivable arising out of sales to the United States of America or to any agency,
department or division thereof; (ii) accounts receivable arising out of foreign sales other than
sales (x) secured by stand-by letters of credit (in form and substance satisfactory to the Agent)
issued or confirmed by, and payable at, banks having a place of business in the United States of
America and payable in Dollars, or (y) to customers residing in Canada provided such accounts
receivable otherwise comply with all of the other criteria for eligibility hereunder, are payable
in Dollars and do not exceed $500,000.00 in the aggregate at any one time; (iii) accounts
receivable that remain unpaid more than the greater (a) ninety (90) days from invoice date or (b)
sixty (60) days from due date but in no event more than one hundred eighty (180) days from invoice
date; (iv) accounts receivable with respect to which the related account debtors (a) are creditors
of a Company, (b) have or have asserted a right of setoff, have disputed their liability, or have
made any claim with respect to their obligations to pay such accounts receivable; (v) accounts
receivable arising out of sales to any subsidiary, or to any Company or to any company



 


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affiliated with a Company in any way; (vi) accounts receivable arising out of bill and hold
(deferred shipment) or consignment sales; (vii) accounts receivable arising out of sales to any
customer which is (a) insolvent, (b) the debtor in any bankruptcy, insolvency, arrangement,
reorganization, receivership or similar proceedings under any federal or state law, (c)
negotiating, or has called a meeting of its creditors for purposes of negotiating, a compromise of
its debts or (d) financially unacceptable to the Agent or has a credit rating unacceptable to the
Agent; (viii) all accounts receivable owing by any customer if fifty percent (50%) or more of
either (x) all outstanding invoices sent to such customer or (y) the aggregate dollar amount of all
outstanding invoices sent to such customer, are unpaid more than the greater of (a) ninety (90)
days from invoice date or (b) sixty (60) days from due date but in no event more than one hundred
eighty (180) days from invoice date; (ix) accounts receivable arising out of sales to any single
customer, to the extent that the aggregate amount of such accounts receivable exceeds ten percent
(10%) of the aggregate amount of Eligible Accounts Receivable; (x) accounts receivable arising out
of sales to the ten largest customers (ranked according to the amount of outstanding accounts
receivable), to the extent that the aggregate amount of such accounts receivable exceeds fifty
percent (50%) of the aggregate amount of Eligible Accounts Receivable; (xi) accounts receivable
arising out of sales to customers that have either been financed, in whole or in part, by any
Company or have been made pursuant to arrangements providing for the deferral of the payment of all
or a portion of the purchase price; (xii) any other reasons deemed necessary by the Agent in its
reasonable business judgment and which are customary either in the commercial finance industry or
in the lending practices of the Agent; and (xiii) an amount representing, historically, returns,
discounts, claims, credits and allowances.



Eligible Fixed Assets shall mean the gross amount of each Company’s Equipment and Real
Estate that is subject to a valid, first-priority and fully perfected security interest and lien in
favor of the Agent, for the benefit of the Lenders, and is not subject to any other lien or
encumbrances and that conforms to the warranties contained herein and at all times continues to be
acceptable to the Agent in the exercise of its reasonable business judgment, less any reserves
required by the Agent in its reasonable discretion for market value declines, environmental hazards
or any other reasons deemed necessary by the Agent in its reasonable business judgment and which
are customary either in the commercial finance industry or in the lending practices of the Agent.



Eligible Inventory shall mean the gross amount of each Company’s inventory that is
subject to a valid, first-priority and fully perfected security interest in favor of the Agent, on
behalf of the Lenders, and that conforms to the warranties contained herein and that at all times
continues to be acceptable to the Agent in the exercise of its reasonable business judgment,
including, without limitation, up to $1,000,000.00 of work-in-process, less all other
work-in-process, supplies (other than raw materials), goods not present in the United States of
America, goods returned or rejected by a Company’s customers other than goods that are undamaged
and resaleable in the normal course of business, goods to be returned to a Company’s suppliers,
goods in transit to third parties (other than a Company’s agents or warehouses), and goods in the
possession of warehousemen, bailees, third party processors or other third parties, unless such
warehousemen, bailees or third parties have executed waivers and acknowledgements of security
interests, in form and substance satisfactory to the Agent, and less any reserves required by the
Agent in its reasonable discretion for special order goods, customer deposits, market value
declines and bill and hold (deferred shipment) or consignment sales.


 


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Equipment shall mean all “equipment” (as such term is defined under Article 9 of the
NY UCC) and shall include all present and hereafter acquired machinery, equipment, furnishings and
fixtures, and all additions, substitutions and replacements thereof, wherever located, together
with all attachments, components, parts, equipment and accessories installed thereon or affixed
thereto and all proceeds of whatever sort.



ERISA shall mean the Employee Retirement Income Security Act or 1974, as amended from
time to time and the rules and regulations promulgated thereunder from time to time.



Event(s) of Default shall have the meaning provided for in Section 10 of this
Financing Agreement.



Excluded Investment Related Property shall mean, with respect to any entity organized
under the laws of any jurisdiction outside the United States, all of the issued and outstanding
shares of capital stock of (or other equity interests or profit interests in) any such entity.



Existing Phase I Reports shall mean, collectively, those certain Phase I Environmental
Site Assessment reports, dated on or about September 5, 2002, prepared by the firm of Clayton Group
Services and referenced in the letter dated October 17, 2002 from Jon Gregory to Neil Markowitz, a
copy of which is attached hereto as Annex I.



Financing Agreement shall mean this Amended and Restated Financing Agreement, dated as
of the Closing Date, together with any schedules, exhibits, supplements or annexes hereto, all as
may be renewed, amended, restated or supplemented from time to time.



Financing Documents shall mean this Financing Agreement, and all other documents,
instruments and agreements executed or delivered by any Company from time to time in connection
with the Existing Financing Agreement (unless any such document, instrument or agreement so
executed or delivered in connection with the Existing Financing Agreement has specifically been
terminated or superceded, or has expired, on or before the Closing Date) or this Financing
Agreement, all as may be renewed, amended, restated or supplemented from time to time.



Fixed Charge Coverage Ratio shall mean, for any relevant period, the ratio determined
by dividing (a) EBITDA for such period by (b) the sum of (i) all interest on Indebtedness of the
Companies, (ii) the amount of principal repaid on the Term Loans, (iii) capital expenditures of the
Companies, determined in accordance with GAAP, and (iv) all federal, state and local income tax of
the Companies, paid or due and payable.



Funded Debt shall mean, at any time of determination, Permitted Indebtedness of the
Companies other than the Indebtedness referred to in clauses (i) and (v) of the definition of such
Permitted Indebtedness.



Funded Debt to Net Worth Ratio shall mean, at any time of determination, the ratio
determined by dividing Funded Debt by Net Worth of the Companies, all as determined in accordance
with GAAP.


 


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GAAP shall mean generally accepted accounting principles in the United States of
America as in effect from time to time and for the period as to which such accounting principles
are to apply.



General Intangibles shall mean all “general intangibles” (as such term is defined
under Article 9 of the NY UCC) and shall include, without limitation, all present and future right,
title and interest in and to (i) all Trademarks, (ii) Patents, utility models, industrial models,
and designs, (iii) Copyrights, (iv) trade secrets, (v) licenses, permits and franchises, (vi) any
other forms of intellectual property, (vii) all customer lists, distribution agreements, supply
agreements, blueprints, indemnification rights and tax refunds, (viii) all monies and claims for
monies now or hereafter due and payable in connection with the foregoing, including, without
limitation, payments for infringement and royalties arising from any licensing agreement between
any Company and any licensee of any of such Company’s General Intangibles, and (i) all Proceeds of
any of the foregoing.



Indebtedness shall mean, without duplication, all liabilities, contingent or
otherwise, which are any of the following: (a) obligations in respect of money (borrowed or
otherwise) or for the deferred purchase price of property, services or assets, other than
Inventory, or (b) lease obligations which, in accordance with GAAP, have been, or which should be
capitalized.



Insurance shall, collectively, all insurance policies covering any or all of the
Collateral, any key man life insurance, and all proceeds of any of the foregoing, including,
without limitation, the Insurance Proceeds.



Insurance Proceeds shall mean proceeds or payments from an insurance carrier with
respect to any loss, casualty or damage to Collateral.



Instruments shall have the meaning given to such term under Article 9 of the NY UCC.



Interest Expense shall mean total interest obligations (paid or accrued) of the
Companies, determined in accordance with GAAP on a basis consistent with the latest audited
statements of the Companies.



Inventory shall mean all of each Company’s present and hereafter acquired merchandise,
Inventory and goods, and all additions, substitutions and replacements thereof, wherever located,
together with all goods and materials used or usable in manufacturing, processing, packaging or
shipping same; in all stages of production- from raw materials through work-in-process to finished
goods — and all proceeds thereof of whatever sort.



Investment Related Property shall mean (i) all “investment property” (as such term is
defined under Article 9 of the NY UCC), (ii) all “financial assets” (as such term is defined under
Article 8 of the NY UCC), and (iii) all certificates of deposit; provided, however,
that Investment Related Property shall not include any Excluded Investment Related Property.



Issuing Bank shall mean the bank issuing Letters of Credit for any Company.


 


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Letters of Credit shall mean all letters of credit issued with the assistance of the
Agent by the Issuing Bank for or on behalf of any Company.



Letter of Credit Guaranty shall mean the guaranty delivered by the Agent to the
Issuing Bank of a Company’s reimbursement obligation under the Issuing Bank’s reimbursement
agreement, application for letter of credit or other like document.



Letter of Credit Guaranty Fee shall mean the fee the Agent, on behalf of the Lenders,
may charge the Companies under Section 8 of this Financing Agreement for: (i) issuing the Letter of
Credit Guaranty or (ii) otherwise aiding in obtaining Letters of Credit.



Letter of Credit Rights shall have the meaning given to such term under Article 9 of
the NY UCC.



Leverage Ratio shall mean the ratio determined by dividing Total Liabilities by
Tangible Net Worth.



Libor shall mean, at any time of determination, and subject to availability, the
London Interbank Offered Rate paid in London by JP Morgan Chase Bank on one month, two month, three
month or six month dollar deposits and if such rates are not otherwise available, then those rates
as published, under “Money Rates”, in the New York City edition of the Wall Street Journal or if
there is no such publication or statement therein as to Libor, then in any publication used in the
New York City financial community.



Libor Loan shall mean any loan made pursuant to this Financing Agreement with respect
to which ROA has elected to use Libor for interest rate computations.



Libor Period shall mean the Libor for one month, two month, three month, or six month
dollar deposits, as selected by ROA.



Libor Processing Fee shall mean a fee in the amount of $500.00 payable on the
effective date of each Libor Loan and payable solely to the Agent for the account of the Agent for
processing such Libor Loan.



Line of Credit shall mean the commitment of the Lenders, acting through the Agent, to
make loans and advances pursuant to Section 3 of this Financing Agreement, to ROA for the benefit
of the Companies, in an aggregate amount equal to $20,000,000.00.



Line of Credit Fee shall: (a) mean the fee payable to the Agent, for the ratable
benefit of the Lenders, due on the last Business Day of each month for the Line of Credit, and (b)
be determined by multiplying the difference between (i) the sum of the Line of Credit and (ii) the
sum, for such month, of (x) the average daily balance of Revolving Loans, plus (y) the
average daily undrawn balance of Letters of Credit, by 0.25% for the number of days in such month.



Loan Facility Fee shall mean the fee payable to the Agent in accordance with, and
pursuant to, the provisions of Section 8 of this Financing Agreement.


 


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Material Adverse Change shall mean any material adverse change in the financial
condition, business, prospects, profits, operations, assets or Collateral of the Companies, taken
as a whole; provided, however, that no change resulting from or arising out of any
of the following, individually or collectively, shall be taken into account when determining
whether a Material Adverse Change has occurred or would be reasonably likely to occur:



(a) general economic conditions in the United States or any other country (or changes
therein), general conditions in the financial markets in the United States or any other country (or
changes therein), or general political conditions in the United States or any other country (or
changes therein);



(b) any precipitous decline in or precipitous deterioration of the general conditions in the
industries in which any Company conducts business;



(c) any conditions arising out of acts of terrorism, war or armed hostilities;



(d) any action taken by any Company that is required by this Agreement, or the failure by any
Company to take any action that is prohibited by this Agreement;



(e) any changes in applicable laws or in GAAP (or the interpretation thereof), other than any
such change which would be reasonably likely to have a disproportionate impact on the financial
condition, business, prospects, profits, operations, assets or Collateral of the Companies; or



(f) any changes in the price of ROA’s common stock or changes in the total trading volume of
ROA’s common stock.



Net Cash Proceeds shall mean, with respect to any property, the aggregate amount of
all proceeds, payable in cash, arising from the sale, transfer or other disposition of such
property, minus the usual and customary out-of-pocket costs and expenses payable by the
seller of such property, the principal amount of Indebtedness (other than Indebtedness outstanding
under this Financing Agreement) that is mandatorily payable by such seller upon the disposition of
such property, and the amount of taxes paid (or reasonably estimated to be payable) by such seller
in connection with such disposition.



Net Worth shall mean assets in excess of liabilities, and determined in accordance
with GAAP, on a consistent basis with the latest audited statements.



NY UCC shall mean the UCC as from time to time in effect in the State of New York.



Obligations shall mean all loans and advances made or to be made by the Agent, for the
account of the Lenders, to any Company or to others for a Company’s account; any and all
indebtedness and obligations which may at any time be owing by a Company in respect of, or incurred
in connection with, this Financing Agreement or any of the other Financing Documents (including all
Out-of-Pocket Expenses), howsoever arising, whether now in existence or incurred



 


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by a Company from time to time hereafter; whether secured by pledge, lien upon or security
interest in any of a Company’s assets or property or the assets or property of any other person,
firm, entity or corporation; whether such indebtedness is absolute or contingent, joint or several,
matured or unmatured, direct or indirect and whether a Company is liable for such indebtedness as
principal, surety, endorser, guarantor or otherwise. Obligations shall also include indebtedness
owing by any Company under this Financing Agreement or any of the other Financing Documents or
under any other agreement or arrangement now or hereafter entered into between a Company and the
Agent on behalf of the Lenders; indebtedness or obligations incurred by, or imposed on, the Agent
or any Lender as a result of environmental claims (other than as a result of the Agent’s actions or
omissions) arising out of any Company’s operations, premises or waste disposal practices or sites;
a Company’s liability to the Agent or any Lender as maker or endorser on any promissory note or
other instrument for the payment of money under this Financing Agreement; a Company’s liability to
the Agent, for the account of the Lenders, under any instrument of guaranty or indemnity, or
arising under any guaranty, endorsement or undertaking which the Agent, on behalf of the Lenders,
may make or issue to others for a Company’s account, including any accommodation extended with
respect to applications for Letters of Credit, the Agent’s acceptance of drafts or the Agent’s
endorsement of notes or other instruments for a Company’s account and benefit.



Operating Leases shall mean all leases of property (whether real, personal or mixed)
other than Capital Leases.



Out-of-Pocket Expenses shall mean all of the Agent’s present and future expenses
incurred in connection with this Financing Agreement and the other Financing Documents, whether
incurred heretofore or hereafter, which expenses shall include, without limitation, the cost of
lien searches (including tax lien and judgment searches), all costs and expenses incurred in
opening and maintaining bank accounts, depositing checks, receiving and transferring funds, and any
charges imposed on the Agent due to “insufficient funds” of deposited checks and the Agent’s
standard fee relating thereto, any amounts paid by the Agent, incurred by or charged to the Agent
by the Issuing Bank under the Letter of Credit Guaranty or a Company’s reimbursement agreement,
application for letter of credit or other like document which pertain either directly or indirectly
to such Letters of Credit, and the Agent’s standard fees relating to the Letters of Credit and any
drafts thereunder, local counsel fees, title insurance premiums, real estate survey costs, the
Georgia General Intangible Tax, fees and taxes relative to the filing of financing statements,
costs of preparing and recording mortgages/deeds of trust against the Real Estate and all expenses,
costs and fees set forth in Paragraph 3 of Section 10 of this Financing Agreement, all reasonable
costs, fees, expenses and disbursements of outside counsel hired by the Agent to consummate the
transactions contemplated by this Financing Agreement (including the documentation and negotiation
of this Financing Agreement, the other Financing Documents and all amendment, supplements and
restatements thereto or thereof), and to advise the Agent as to matters relating to the
transactions contemplated hereby, and, without duplication, all costs, fees and expenses incurred
by the Agent in connection with the administration, collection, liquidation, enforcement,
protection and defense of the Obligations, the Collateral and the Agent’s rights under this
Financing Agreement, including, without limitation, all reasonable costs, fees, expenses and
disbursements of outside counsel to the Agent incurred as a result of a workout, restructuring,
reorganization, liquidation, insolvency proceeding and in any appeals arising therefrom, whether
incurred before, during or after the
termination of this Financing Agreement or the commencement of any case with respect to any
Company or any subsidiary of any Company (as the case may be) under the United States Bankruptcy
Code or any similar statute.


 


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Participant shall have the meaning given to such term in Paragraph 5 of Section 12 of
this Financing Agreement.



Patents shall mean all present and hereafter acquired patents, patent applications,
registrations, all reissues and renewals thereof, all licenses thereof, all inventions and
improvements claimed thereunder, all general intangible, intellectual property and other rights of
any Company with respect thereto, and all income, royalties and other Proceeds of the foregoing.



Permitted Encumbrances shall mean: (i) liens expressly permitted, or consented to, by
the Agent; (ii) Purchase Money Liens; (iii) Customarily Permitted Liens; (iv) liens granted the
Agent by the Companies; (v) liens of judgment creditors provided such liens do not exceed, in the
aggregate, at any time, $250,000.00 (other than liens bonded or insured to the reasonable
satisfaction of the Agent); and (vi) liens for taxes not yet due and payable or which are being
diligently contested in good faith by a Company by appropriate proceedings and which liens are not
(x) other than with respect to the Real Estate, senior to the liens of the Agent or (y) for taxes
due the United States of America.



Permitted Indebtedness shall mean: (i) current Indebtedness maturing in less than one
year and incurred in the ordinary course of business for raw materials, supplies, equipment,
services, taxes or labor; (ii) the Indebtedness secured by the Purchase Money Liens; (iii)
Indebtedness of any Company which is subordinated to the prior payment and satisfaction of the
Obligations by means of a subordination agreement in form and substance satisfactory to the Agent;
(iv) Indebtedness arising under the Letters of Credit, this Financing Agreement and the other
Financing Documents; (v) deferred taxes and other expenses incurred in the ordinary course of
business; (vi) Indebtedness incurred by the Companies with the consent of the Required Lenders; and
(vii) other Indebtedness existing on the date of execution of this Financing Agreement and either
(x) listed in the most recent financial statements delivered to the Agent and the Lenders or (y)
otherwise disclosed to the Agent and the Lenders in writing; or (z) which is not material to the
financial condition of the Companies as a whole.



Prepayment Premium shall: (i) mean the amount due the Agent, for the benefit of the
Lenders, by the Companies upon a prepayment, solely as a result of the Companies’ termination of
this Financing Agreement or the Acquisition Term Loan Line of Credit on or prior to the fourth
Anniversary Date, and (ii) be computed by multiplying the amount so prepaid by (x) one percent (1%)
if such prepayment occurs on or prior to the first Anniversary Date, and (y) one-half of one
percent (0.50%) if such prepayment occurs after the first Anniversary Date, but on or prior to the
fourth Anniversary Date; provided, however, that no such Prepayment Premium shall
be payable in connection with a mandatory prepayment of any Term Loan made pursuant to Paragraph 4
of Section 6 of this Financing Agreement.



Proceeds shall mean all “proceeds” (as such term is defined under Article 9 of the NY
UCC), including, without limitation, all (i) payments or other proceeds from an insurance
carrier with respect to any loss, casualty or damage to any Collateral, and (ii) payments
received on account of any condemnation or other governmental taking of any Collateral


 


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Purchase Money Liens shall mean liens on any item of equipment acquired after the date
of this Financing Agreement provided that (i) each such lien shall attach only to the property to
be acquired, (ii) a description of the property so acquired is furnished to the Agent, (iii) the
debt incurred in connection with such acquisitions shall not exceed in the aggregate $1,000,000.00
in any fiscal year, and (iv) the debt so incurred is not under this Financing Agreement.



Real Estate shall mean any Company’s fee interest in real property which has been, or
will be, encumbered, mortgaged, pledged or assigned to the Agent or its designee.



Required Lenders shall mean Lenders holding at least sixty-six and two-thirds percent
(66-2/3%) of the outstanding loans, advances, extensions of credit and commitments to the Companies
contemplated hereunder.



Revolving Loans shall mean the loans and advances made, from time to time, to or for
the account of a Company, pursuant to Section 3 of this Financing Agreement.



Settlement Date shall mean the date (which may occur weekly, or more frequently, at
the discretion of the Agent, upon the occurrence of an Event of Default or a continuing decline or
increase of the Revolving Loans) on which the Agent and the Lenders shall settle amongst themselves
so that (x) the Agent shall not have, as Agent, any money at risk and (y) on such Settlement Date
the Lenders shall have a pro-rata outstanding amount of the Term Loans, Revolving Loans and Letters
of Credit, provided that each Settlement Date shall be a Business Day.



Supporting Obligations shall have the meaning given to such term under Article 9 of
the NY UCC.



Tangible Net Worth shall mean the amount set forth on the Consolidated Balance Sheet
of the Companies, prepared in accordance with GAAP, as total shareholders’ equity minus the sum of
(i) any assets representing amounts due from any stockholder of the Companies or any affiliate,
(ii) cash of the Companies, their subsidiaries or affiliates, the use of which is legally
restricted so that it is not available for payment of Indebtedness, and (iii) all items which
should properly be classified at such date as intangible assets under GAAP, including without
limitation, goodwill (whether representing the excess of cost over book value of assets or
otherwise), trademarks, tradenames, copyrights, franchises, licenses, deferred charges (including,
without limitation, unamortized debt discount and expense and organizational costs), and “soft
assets” such as amounts due from officers, employees, stockholders, affiliates or related parties.



Term Loans shall mean, individually and collectively, as applicable, (i) those term
loans made under the Existing Financing Agreement, the unpaid principal balances of which term
loans aggregate $19,186,439.00 as of the Closing Date, and (ii) those term loans made pursuant to
Section 4 of this Financing Agreement.


 


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Term Loan Promissory Note shall mean a promissory note, in the form of Exhibit A
attached hereto, delivered by ROA to the Agent to evidence each Term Loan pursuant to, and
repayable in accordance with, the provisions of Section 4 of this Financing Agreement.



Total Liabilities shall mean total liabilities of the Companies determined in
accordance with GAAP, on a basis consistent with the latest audited statements of the Companies.



Trademarks shall mean all present and hereafter acquired trademarks, trademark
registrations, recordings, applications, tradenames, trade styles, corporate names, business names,
service marks, logos and any other designs or sources of business identities, prints and labels (on
which any of the foregoing may appear), all reissues and renewals thereof, all licenses thereof,
all other general intangible, intellectual property and other rights pertaining to any of the
foregoing, together with the goodwill associated therewith, and all income, royalties and other
Proceeds of any of the foregoing.



UCC shall mean the Uniform Commercial Code as in effect from time to time in any
applicable jurisdiction.



Unfinanced Capital Expenditures shall mean Capital Expenditures other than those
Capital Expenditures financed by Indebtedness.



Working Capital shall mean Current Assets in excess of Current Liabilities.



SECTION 2. Conditions Precedent




The obligation of the Lenders, acting through the Agent, to make any loans hereunder on the
Closing Date is subject to the satisfaction of, or waiver of, immediately prior to, or concurrently
with, the making of such loans, the following conditions precedent:



(a) Lien Searches — The Agent shall have received tax, judgment and UCC searches
satisfactory to the Agent for all locations presently occupied or used by each Company.



(b) Casualty Insurance — ROA shall have delivered to the Agent evidence satisfactory
to the Agent that casualty insurance policies listing the Agent as loss payee or mortgagee, as the
case may be, are in full force and effect, all as set forth in Section 7, Paragraph 5 of this
Financing Agreement.



(c) Mortgages/Deeds of Trust — Each Company shall have executed and delivered to
either the Agent or a designee of the Agent or of a title insurance company acceptable to the Agent
such mortgages and deeds of trust as the Agent may reasonably require to obtain first liens on the
Real Estate.



(d) UCC Filings — All documents (including without limitation, UCC financing
statements) required to be filed in order to create, in favor of the Agent, for the benefit of the
Lenders, a first priority perfected security interest in the Collateral and any other assets
securing the Obligations (to the extent that such a security interest may be perfected by a



 


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filing under the UCC or applicable law) shall have been properly filed in each office in each
jurisdiction required in order to create in favor of the Agent a perfected lien on the Collateral
and such other assets. The Agent shall have received (i) acknowledgment copies of all such filings
(or, in lieu thereof, the Agent shall have received other evidence satisfactory to the Agent that
all such filings have been made) and (ii) evidence that all necessary filing fees, taxes and other
expenses related to such filings have been paid in full.



(e) Title Insurance Policies — The Agent shall have received, in respect of each
mortgage or deed of trust, a mortgagee’s title policy or marked-up unconditional binder for such
insurance consistent with title insurance policies previously delivered by either Royalty or ROA to
CIT. Each such policy shall (i) be in an amount satisfactory to the Agent; (ii) insure that the
mortgage or deed of trust insured thereby creates a valid first lien on the property covered by
such mortgage or deed of trust, free and clear of all defects and encumbrances except those
acceptable to the Agent; (iii) name the Agent as the insured thereunder; and (iv) contain such
endorsements and effective coverage as the Agent may reasonably request, including without
limitation the revolving line of credit endorsement. The Agent shall also have received evidence
that all premiums in respect of such policies have been paid and that all charges for mortgage
recording taxes, if any, shall have been paid.



(f) Surveys — The Agent and the title insurance company issuing each policy referred
to in the immediately preceding subparagraph shall have received copies of the currently existing
maps or plats of a perimeter or boundary of the site of each of the properties covered by the
mortgages or deeds of trust.



(g) Examination and Appraisal — The Agent shall have completed Collateral
examinations and received updated appraisals (prepared on a net orderly liquidation value basis),
the results of which shall be reasonably satisfactory in form and substance to the Agent, of the
Equipment of the Companies.



(h) Opinions — Counsel for the Companies shall have delivered to the Agent, for the
benefit of the Lenders, opinions satisfactory to the Agent opining, inter alia, that, subject to
the (i) filing, priority and remedies provisions of the UCC, (ii) the provisions of the Bankruptcy
Code, insolvency statutes or other like laws, (iii) the equity powers of a court of law and (iv)
such other matters as may be agreed upon with the Agent, all documents of the Companies are (x)
valid, binding and enforceable according to their terms, (y) are duly authorized and (z) do not
violate any terms, provisions, representations or covenants in the charter or by-laws of any
Company or, to the best knowledge of such counsel, of any loan agreement, mortgage, deed of trust,
note, security or pledge agreement or indenture to which any Company is a signatory or by which any
Company or its assets are bound.



(i) Pledge Agreement — ROA shall have confirmed in writing to the Agent the
continuing effectiveness and enforceability of that certain pledge and security agreement executed
by ROA in favor of the Agent in connection with the Existing Credit Agreement, pursuant to which
ROA shall have pledged to the Agent as additional collateral for the Obligations all of the issued
and outstanding capital stock of the Companies (other than ROA), the stock certificates in respect
of which shall have been previously delivered to, and on the Closing Date shall be in the
possession of, the Agent.


 


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(j) Additional Documents — Each Company shall have executed and delivered to the
Agent all loan documents necessary to consummate the lending arrangement contemplated herein,
including, without limitation, all Financing Documents.



(k) Post-Closing Letter Agreement — The Agent shall have received a duly executed
original of that certain post-closing letter agreement, dated as of the date hereof, among the
Agent and the Companies.



(l) Co-Lender Commitment — The Agent shall have received a written commitment from
Chittenden Trust Company to continue as a Lender, on terms and conditions acceptable to CIT in its
sole discretion.



(m) Opening Availability — The Agent shall have completed and be satisfied with an
updated examination and verification of the Accounts, Inventory and books and records of the
Companies, and such examination shall indicate that after giving effect to all loans, advances and
extensions of credit to be made on the Closing Date, the payment of all fees and expenses payable
to the Agent and the Lenders on the Closing Date, and making current all of the Companies’ trade
payables in accordance with its usual business practices, the opening Availability shall be not
less than $6,500,000.00.



(n) Financial and Availability Projections — The Companies shall have delivered to
the Agent, and the Agent shall be satisfied with, a projected balance sheet, projected income
statement and projected statement of cash flows, of the Companies and all subsidiaries, calculated
on a quarter-by-quarter basis, and Availability projections for the Companies, in each case for the
three-year period ending on or about December 31, 2010.



(o) Environmental Report — The Agent shall have received environmental audit reports
on (i) all of each Company’s fee interests, and (ii) each Company’s waste disposal practices. The
reports must (x) be satisfactory to the Agent and (y) not disclose or indicate any liability (real
or potential) stemming from a Company’s premises, its operations, its waste disposal practices or
waste disposal sites used by any Company.



(p) Board Resolutions — The Agent shall have received a copy of the consent of the
members or resolutions of the board of directors, as applicable, of each Company authorizing the
execution, delivery and performance of (i) this Financing Agreement and the other Financing
Documents, and (ii) any related agreements, in each case certified by the secretary, assistant
secretary or manager, as applicable, of each Company as of the date hereof, together with a
certificate of the secretary, assistant secretary or manager, as applicable, of each Company as to
the incumbency and signature of the officers of such Company executing this Financing Agreement and
any certificate or other documents to be delivered by it pursuant hereto, together with evidence of
the incumbency of such secretary, assistant secretary or manager, as applicable.



(q) Corporate Organization — The Agent shall have received a copy of the certificate
or articles of formation or incorporation of each Company, as applicable, certified by the
Secretary of State of the state of its formation and copies of each Company’s operating agreement
or by-laws, as applicable, as amended through the date hereof, certified by
the appropriate members, manager or officer of such Company. In addition, the Agent shall
have received evidence of each Company’s authorization to do business in each jurisdiction in which
it is conducting business.


 


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(r) Officer’s Certificate — The Agent shall have received an executed officer’s
certificate from each Company, satisfactory in form and substance to the Agent, certifying that (i)
the representations and warranties contained herein are true and correct in all material respects
on and as of the date hereof; (ii) such Company is in compliance with all of the terms and
provisions set forth herein; and (iii) no Default or Event of Default has occurred or would result
from the making of such loans.



(s) No Default or Material Adverse Change — No “Event of Default” (as defined under
the Existing Financing Agreement) shall have occurred and be continuing under the Existing
Financing Agreement, no Default or Event of Default shall have occurred and be continuing or would
result from the making of such loans and no Material Adverse Change shall have occurred since the
date of the last certified annual financial statements of the Companies.



(t) Legal Restraints/Litigation — At the date of execution of this Financing
Agreement, there shall be no (x) litigation, investigation or proceeding (judicial or
administrative) pending or threatened against any Company or its assets, by any agency, division or
department of any county, city, state or federal government, (y) injunction, writ or restraining
order restraining or prohibiting consummation of the financing arrangements contemplated under this
Financing Agreement or (z) suit, action, investigation or proceeding (judicial or administrative)
pending or threatened against any Company or its assets, which, in the opinion of the Agent, if
adversely determined could cause a Material Adverse Change.



(u) Disbursement Authorization — ROA shall have delivered to the Agent all
information necessary for the Agent to issue wire transfer instructions on behalf of the Companies
for the initial and subsequent loans and/or advances to be made under this Financing Agreement
including, but not limited to, disbursement authorizations in form acceptable to the Agent.



(v) Fees — The Agent shall have received all fees due and payable to the Agent and
the Lenders hereunder, including, without limitation, pursuant to Section 8 hereof.



Upon the execution of this Financing Agreement and the initial disbursement of loans
hereunder, all of the above Conditions Precedent shall have been deemed satisfied except as the
Companies, the Agent and the Lenders shall otherwise agree herein or in a separate writing.



SECTION 3. Revolving Loans




1. The Lenders, acting through the Agent, agree, subject to the terms and conditions of this
Financing Agreement from time to time, to make loans and advances to ROA, to and for the benefit of
the Companies, on a revolving basis (i.e., subject to the limitations set forth herein, the
Companies, through ROA, may borrow, repay and re-borrow Revolving Loans), in an aggregate principal
amount outstanding at any time not to exceed an amount equal to: (a)



 


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the lesser of (i) Availability or (ii) the Line of Credit, but subject to the Agent’s and the
Lenders’ (acting through the Agent) right to make overadvances. Such loans and advances shall be in
amounts up to: (a) seventy-five percent (75%) of the outstanding Eligible Accounts Receivable of
the Companies; plus (b) the lesser of (i) $10,000,000.00 or (ii) fifty percent (50%) of the
aggregate value of Eligible Inventory of the Companies, determined at the lower of cost or market
value; plus (c) the lesser of (i) the Applicable Sublimit or (ii) the aggregate value of
Eligible Fixed Assets of the Companies (the “Borrowing Base”). For purposes of clause (c) of the
preceding sentence, the “value” of any Eligible Fixed Assets shall be equal to 80% of the net
orderly liquidation value of such Eligible Fixed Assets. All requests for loans and advances must
be received by an officer of the Agent no later than 1:00 p.m., New York City time, on the Business
Day on which such loans and advances are required. The Companies hereby authorize the Agent to
make Revolving Loans to the Companies based upon a telephonic or e-mail request (or, if permitted
by CIT, based upon a request posted on CIT’s System) made by any officer or other employee of any
Company that the Companies have authorized in writing to request Revolving Loans hereunder, as
reflected by the Agent’s records. Each telephonic, e-mail or posted request by the Companies shall
be irrevocable, and the Companies agree to confirm any such request for a Revolving Loan in a
writing approved by the Agent and signed by such authorized officer or employee, within one (1)
Business Day of the Agent’s request for such confirmation. The Agent shall have the right to rely
on any telephonic, e-mail or posted request for a Revolving Loan made by anyone purporting to be an
officer or other employee of any Company that the Companies have authorized in writing to request
Revolving Loans hereunder, without further investigation. Should the Agent for any reason honor
requests for advances in excess of the limitations set forth herein, such advances shall be
considered “overadvances” and shall be made in the Agent’s sole discretion, subject to any
additional terms the Agent deems necessary. In the event that the sum of (i) the outstanding
balance of Revolving Loans and (ii) outstanding balance of Letters of Credit exceeds the lesser of
(x) the Borrowing Base or (y) the Line of Credit (any such excess, the “Excess”), such Excess shall
be due and payable to immediately upon demand.



2. In furtherance of the continuing assignment and security interest in each Company’s
Accounts, each Company will, upon the creation of Accounts, execute and deliver to the Agent in
such form and manner as the Agent may reasonably require, solely for the Agent’s convenience in
maintaining records of collateral, such confirmatory schedules of Accounts as the Agent may
reasonably request, and such other appropriate reports designating, identifying and describing the
Accounts as the Agent may reasonably require. In addition, upon the Agent’s request each Company
shall provide the Agent with copies of agreements with, or purchase orders from, such Company’s
customers, and copies of invoices to customers, proof of shipment or delivery and such other
documentation and information relating to said Accounts and other collateral as the Agent may
reasonably require. Failure to provide the Agent with any of the foregoing shall in no way affect,
diminish, modify or otherwise limit the security interests granted herein. Each Company hereby
authorizes the Agent to regard such Company’s printed name or rubber stamp signature on assignment
schedules or invoices as the equivalent of a manual signature by one of such Company’s authorized
officers or agents.


 


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3. Each Company hereby represents and warrants that: (i) each Account is based on an actual
and bona fide sale and delivery of goods or rendition of services to customers, made by a Company
in the ordinary course of its business; (ii) the goods and inventory being
sold and the Accounts created are the exclusive property of a Company and are not and shall
not be subject to any lien, consignment arrangement, encumbrance, security interest or financing
statement whatsoever, other than the Permitted Encumbrances; (iii) the invoices evidencing such
Accounts are in the name of the Company so selling the Inventory; (iv) and the customers of such
Company have accepted the goods or services, owe and are obligated to pay the full amounts stated
in the invoices according to their terms, without dispute, offset, defense, counterclaim or contra,
except for disputes and other matters arising in the ordinary course of business of which such
Company has advised the Agent pursuant to Paragraph 5 of this Section 3. Each Company confirms to
the Agent that any and all taxes or fees relating to its business, its sales, the Accounts or goods
relating thereto, are its sole responsibility and that same will be paid by such Company when due
and that none of said taxes or fees represent a lien on or claim against the Accounts. Each
Company also warrants and represents that it is a duly and validly existing corporation and is
qualified in all states where the failure to so qualify would have an adverse effect on the
business of such Company or the ability of such Company to enforce collection of Accounts due from
customers residing in that state. Each Company agrees to maintain such books and records regarding
Accounts as the Agent may reasonably require and agrees that its books and records will reflect the
Lenders’ (acting through the Agent) interest in the Accounts. All of the books and records of each
Company will be available to the Agent at normal business hours, including any records handled or
maintained for any Company by any other company or entity.



4. Each Company may and will enforce, collect and receive all amounts owing on the Accounts at
such Company’s expense; provided that such privilege shall terminate automatically upon the
institution by or against any Company of any proceeding under any bankruptcy or insolvency law or,
at the election of the Agent, upon the occurrence of any other Event of Default and until such
Event of Default is waived. Any checks, cash, notes or other instruments or property received by a
Company with respect to any Accounts shall be held by such Company in trust for the Lenders,
separate from such Company’s own property and funds, and immediately turned over to the Agent with
proper assignments or endorsements by deposit to the Depository Accounts in the Agent’s name
designated for such purposes. Notwithstanding anything herein contained to the contrary, if (x)
there is then no Default or Event of Default and (y) the outstanding Revolving Loans are less than
$12,500,000.00 and (z) Availability is at least $8,000,000.00 for five (5) or more consecutive
Business Days, then the Agent, at the request of ROA, will advise the banks holding the Depository
Accounts to remit all proceeds of Collateral to ROA. The Agent may immediately rescind these
instructions unilaterally (a) upon the occurrence of a Default or Event of Default, or (b) if the
outstanding Revolving Loans aggregate $12,500,000.00 or more, or (c) if Availability is less than
$8,000,000.00. All amounts received by the Agent in payment of Accounts will be credited to the
loan account upon the Agent’s receipt of “collected funds” at the Agent’s bank account in New York,
New York on the Business Day of receipt if received no later than 1:00 p.m. (New York City time) or
on the next succeeding Business Day if received after 1:00 p.m. (New York City time). No checks,
drafts or other instrument received by the Agent shall constitute final payment unless and until
such instruments have actually been collected.


 


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5. Each Company agrees to notify the Agent promptly of any matters materially affecting the
value, enforceability or collectibility of any material Account and of all material customer
disputes, offsets, defenses, counterclaims, returns, rejections and all reclaimed
or repossessed merchandise or goods. Each Company agrees to issue credit memoranda promptly
(with duplicates to the Agent upon request after the occurrence of an Event of Default) upon
accepting returns or granting allowances.



6. In order to utilize the collective borrowing powers of the Companies in the most efficient
and economical manner, and in order to facilitate the handling of the accounts of the Companies on
the Agent’s books, the Companies have requested the Agent, and the Agent has agreed, to handle the
accounts of all Companies on the Agent’s books on a combined basis, in accordance with the
following provisions: (i) in lieu of maintaining separate accounts on the Agent’s books in the name
of each of the Companies, the Agent shall maintain a single account under the name: Rock of Ages
Corporation (the “Collective Loan Account”); (ii) loans and advances made by the Agent to, or for,
any of the Companies will be charged to the Collective Loan account, along with all charges and
expenses under this Financing Agreement; (iii) the Collective Loan account will be credited with
all amounts received by the Agent from any of the Companies or from others for the account of any
Company including all amounts received by the Agent in accordance with the terms of Paragraph 4
hereof and as provided in this Financing Agreement; (iv) each month the Agent will render to ROA
for the benefit of the Companies one extract of the combined Collective Loan Account, which shall
be deemed to be an account stated as to each of the Companies and which will be deemed correct and
accepted by all of the Companies unless ROA has forwarded to the Agent a written statement of
exceptions within thirty (30) days after such extract, or any corrected extract; (v) its is
expressly understood and agreed by each of the Companies that the Agent shall have no obligation to
account separately to any of the Companies; (vi) requests for loans and advances may be made by any
of the Companies and the Agent is hereby authorized and directed to accept, honor and rely on such
instructions and requests, subject to the limitation and provisions set forth in this Financing
Agreement; (vii) it is expressly understood and agreed by each of the Companies that the Agent
shall have no responsibility to inquire into the correctness of the apportionment, allocation, or
disposition of(A) any loans and advances made to any of the Companies or (B) any of the Agent’s
expenses and charges relating thereto; (viii) all loans and advances are made for the collective
benefit of the Companies; (ix) the Companies jointly and severally unconditionally guarantee to the
Agent the prompt payment in full of (A) all loans and advances made and to be made to any of them
under this Financing Agreement, as well as (B) all other Obligations of the Companies hereunder;
(x) all Collateral assigned by any of the Companies and any other collateral security now or
hereafter given to the Agent by any of the Companies, shall secure all loans and advances made by
the Agent to, or for, any Company, and shall be deemed to be pledged as security for any and all
other Obligations of the Companies as set forth under this Financing Agreement, or any other
agreements between the Agent and any Company; and (xi) it is understood that the handling of the
account of the Companies in a combined fashion, as more fully set forth herein, is done solely as
an accommodation to the Companies and at their request, and that neither the Agent nor any Lender
shall incur liability to the Companies as a result of such combination. To induce the Agent and the
Lenders to do so, and in consideration thereof, each Company hereby agrees to indemnify the Agent
and each Lender and hold them harmless against any and all liability, expense, loss or claim of
damage or injury, except for any liability, injury, expense, loss or claim of damages arising by
reason of the Agent’s negligence or misconduct, made against the Agent by any Company or by any
third party whosoever, arising from or incurred by reason of (A) the Agent handling the accounts of
the Companies as herein provided, (B) the Agent relying on any instructions of any of the
Companies, or (C) any other



 


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reasonable action taken by the Agent in accordance with this Paragraph 6 of Section 3 of this
Financing Agreement. In no event shall prior recourse to any Accounts or other security granted to
or by any Company be a prerequisite to the Agent’s right to demand payment of any Obligation.
Further, it is understood that neither the Agent nor any Lender shall have any obligation
whatsoever to perform in any respect any Company’s contracts or obligations relating to the
Accounts. The foregoing request was made because the Companies are engaged in an integrated
operation that requires financing on a basis permitting the availability of credit from time to
time to each of the Companies as required by the continued successful operation of each Company and
the integrated operation. Each Company expects to derive benefit, directly or indirectly, from such
availability since the successful operation of each Company is dependent on the continued
successful performance of the functions of the integrated group.



SECTION 4. Term Loans




1. Within the Acquisition Term Loan Line of Credit and upon receipt of a Promissory Note from
the Companies in the amount of the requested Term Loan, the Lenders, acting through the Agent, will
extend to ROA a Term Loan, provided (a) there is then no outstanding Default and (b) all of the
conditions listed below are fulfilled to the sole but reasonable satisfaction of the Agent and the
Lenders. The conditions are as follows:



(a) Term Loan proceeds: (i) are to be used exclusively to pay for, or reimburse a Company for,
the acquisition by a Company of distributors of granite memorials, operators of granite quarries,
manufacturers, wholesalers and/or retailers of granite products, cemeteries, retails store
locations and acquisitions incidental to any of the foregoing; and (ii) will be disbursed
concurrent with, or immediately after, such acquisition; provided, however, that
ROA may combine several acquisitions into one (1) Term Loan; provided, further,
that the conditions set forth in clauses (b), (c), (e) and (f) below shall not apply to any
acquisition of an existing retail store location or opening of a new retail store location, in each
case for an amount less than $1,000,000.00;



(b) the Agent shall have received thirty (30) days prior written notice of ROA’s intention to
request a Term Loan;



(c) the Agent’s and the Lenders’ receipt of, and satisfaction with, a study or review of the
business to be acquired;



(d) the assets acquired with Term Loan proceeds shall be free and clear of all liens and
encumbrances (other than the Permitted Encumbrances) except as otherwise permitted by the Agent;



(e) the structure of the acquisition must be reasonably satisfactory to the Agent and the
Lenders;



(f) the Agent’s and the Lenders’ receipt of, and satisfaction with, appraisals and/or
environmental reviews;



(g) no more than two (2) Term Loans per calendar quarter;


 


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(h) no Term Loan may be less than $500,000.00;



(i) the Companies shall grant to the Agent, for the benefit of the Lenders, and Agent shall
have perfected, first and exclusive liens on, and security interests in, the assets so acquired,
subject only to the Permitted Encumbrances; and



(j) CIT, in its capacity as a Lender, shall have received from each Participant with which it
has entered into a participation arrangement in respect of a Term Loan such Participant’s consent
to the extension of, and its agreement to purchase a participation interest in, such requested Term
Loan.



2. The unpaid principal balance of the Term Loans shall amortize as follows: (a) in the case
of each Term Loan made after the Closing Date, in such principal installments and with such
frequency as may be mutually acceptable to the Agent and ROA; (b) in the case of those Term Loans
made under the Existing Financing Agreement which are outstanding on the Closing Date
(collectively, the “Outstanding Term Loan”), to the extent the aggregate unpaid principal balances
of the Outstanding Term Loan exceeds $17,500,000.00 as of the Closing Date, in twenty (20) equal
consecutive quarterly principal installments of $165,000.00 each, commencing on January 1, 2008 and
continuing on the first (1st) Business Day of each fiscal quarter thereafter, followed,
to the extent applicable by a final payment of all unpaid principal, interest and expenses on the
fifth Anniversary Date; and (c) in the case of the Outstanding Term Loan, to the extent the unpaid
principal balance thereof is equal to or less than $17,500,000.00, such principal balance shall not
amortize on any scheduled basis, and shall instead be payable in full on the fifth Anniversary
Date.



3. The Agent, in its reasonable discretion, may establish and maintain reserves with respect
to the Term Loans against the Acquisition Term Loan Line of Credit and/or the Line of Credit
(without duplication) for market value declines or environmental hazards.



4. In the event either this Financing Agreement or the Line of Credit is terminated by either
the Agent or ROA for any reason whatsoever, all Term Loans shall become due and payable on the
effective date of such termination notwithstanding any provision to the contrary in any Term Loan
Promissory Note or this Financing Agreement.



5. The Companies may prepay at any time, at their option, in whole or in part, any Term Loan,
provided that on each such prepayment, the Companies shall pay (i) accrued interest on the
principal so prepaid to the date of such prepayment and (ii) the Prepayment Premium, if any.



6. Each prepayment shall be applied to the then last maturing installments of principal of any
Term Loans designated by ROA and if not so designated, then as the Agent may elect.



7. The Companies hereby authorizes the Agent to charge the Collective Loan account with the
amount of all amounts due under this Section 4 as such amounts become due. Each Company confirms
that any charges which the Agent may so make to its account as herein provided will be made as an
accommodation to the Company and solely at the Agent’s discretion.


 


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8. Subject to the terms of Paragraph 4 of Section 6 of this Financing Agreement (a) if any
Company sells any Equipment or other tangible personal property (other than Inventory in the
ordinary course of business), such Company shall pay to the Agent, for the ratable benefit of the
Lenders, unless otherwise agreed by the Required Lenders, or as otherwise set forth in this
Financing Agreement, as and when received by such Company and as a mandatory prepayment of the then
outstanding Term Loans, until all Term Loans are indefeasibly paid in full, a sum equal to the Net
Cash Proceeds received by such Company from such sale, and (b) if any Company sells a division,
business unit or line of business, and such sale includes both tangible and intangible personal
property owned by such Company, such Company shall pay to the Agent, for the ratable benefit of the
Lenders, unless otherwise agreed by the Required Lenders, or as otherwise set forth in this
Financing Agreement, as and when received by such Company, all of the Net Cash Proceeds received by
such Company from such sale, of which that portion applicable to the fair market value of such
Company’s (i) Accounts and Inventory shall be applied against the then outstanding Revolving Loans
and (ii) Equipment and other tangible personal property (other than Inventory) shall be applied as
a mandatory prepayment of the then outstanding Term Loans, until all Term Loans are indefeasibly
paid in full.



SECTION 5. Letters of Credit




In order to assist the Companies in establishing or opening Letters of Credit with an Issuing
Bank to cover (i) the purchase of inventory or equipment or (ii) such other business purposes as a
Company may so elect, the Companies have requested the Lenders, acting through the Agent, to join
in the applications for such Letters of Credit, and/or guarantee payment or performance of such
Letters of Credit and any drafts or acceptances thereunder through the issuance of the Letters of
Credit Guaranty, thereby lending the Lenders’, acting through the Agent, credit to the Companies
and the Lenders, acting through the Agent, have agreed to do so. These arrangements shall be
handled by the Agent subject to the terms and conditions set forth below.



1. The amount, purpose and extent of the Letters of Credit and changes or modifications
thereof by the Companies and/or the Issuing Bank of the terms and conditions thereof shall in all
respects be subject to the prior approval of the Agent in the exercise of its reasonable discretion
provided however, that: (a) in no event may the aggregate amount of all such outstanding Letters of
Credit exceed, in the aggregate, at any one time $3,000,000.00, and (b) the Letter of Credit and
all documentation in connection therewith shall be in form and substance satisfactory to the
Companies, the Agent and the Issuing Bank.



2. The Agent shall have the right, without notice to any Company, to charge the Collective
Loan Account on the Agent’s books with the amount of any and all indebtedness, liability or
obligation of any kind incurred by the Agent or any Lender under the Letters of Credit Guaranty at
the earlier of (a) payment under the Letters of Credit Guaranty or (b) the occurrence of an Event
of Default. Any amount charged to the Collective Loan Account shall be deemed a Revolving Loan
hereunder and shall incur interest at the rate provided in Section 8, Paragraph 1 of this Financing
Agreement.


 


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3. Each Company unconditionally indemnifies the Agent and each Lender and holds the Agent and
each Lender harmless from any and all loss, claim or liability incurred by the Agent and each
Lender arising from any transactions or occurrences relating to Letters of Credit established or
opened for any Company, the collateral relating thereto and any drafts or acceptances thereunder,
and all Obligations thereunder, including any such loss or claim due to any action taken by any
Issuing Bank, other than for any such loss, claim or liability arising out of the negligence or
misconduct by the Agent and each Lender under the Letters of Credit Guaranty. Each Company further
agrees to hold the Agent and each Lender harmless from any errors or omission, negligence or
misconduct by the Issuing Bank. Each Company’s unconditional obligation to the Agent and each
Lender hereunder shall not be modified or diminished for any reason or in any manner whatsoever,
other than as a result of the Agent’s and each Lender’s negligence or misconduct. Each Company
agrees that any charges incurred by the Agent and each Lender by the Issuing Bank shall be
conclusive on the Agent and each Lender and may be charged to the Collective Loan Account.



4. Neither the Agent nor any Lender shall be responsible for: the existence, character,
quality, quantity, condition, packing, value or delivery of the goods purporting to be represented
by any documents; any difference or variation in the character, quality, quantity, condition,
packing, value or delivery of the goods from that expressed in the documents; the validity,
sufficiency or genuineness of any documents or of any endorsements thereon, even if such documents
should in fact prove to be in any or all respects invalid, insufficient, fraudulent or forged; the
time, place, manner or order in which shipment is made; partial or incomplete shipment, or failure
or omission to ship any or all of the goods referred to in the Letters of Credit or documents; any
deviation from instructions; delay, default, or fraud by the shipper and/or anyone else in
connection with the Collateral or the shipping thereof; or any breach of contract between the
shipper or vendors and any Company.



5. Each Company agrees that any action taken by the Agent or any Lender, if taken in good
faith, or any action taken by any Issuing Bank, under or in connection with the Letters of Credit,
the guarantees, the drafts or acceptances, or the Collateral, shall be binding on the Companies and
shall not put the Agent or any Lender in any resulting liability to the Companies. In furtherance
thereof, but subject to the provisions of Paragraph 6 below, the Agent shall have the full right
and authority to clear and resolve any questions of non-compliance of documents; to give any
instructions as to acceptance or rejection of any documents or goods; to execute any and all
steamship or airways guaranties (and applications therefore), indemnities or delivery orders; to
grant any extensions of the maturity of, time of payment for, or time of presentation of, any
drafts, acceptances, or documents; and to agree to any amendments, renewals, extensions,
modifications, changes or cancellations of any of the terms or conditions of any of the
applications, Letters of Credit, drafts or acceptances; all in the Agent’s sole name, and the
Issuing Bank shall be entitled to comply with and honor any and all such documents or instruments
executed by or received solely from the Agent, all without any notice to or any consent from any
Company.



6. Without the Agent’s express consent and endorsement in writing, each Company agrees: a) not
to execute any and all applications for steamship or airway guaranties, indemnities or delivery
orders; to grant any extensions of the maturity of, time of payment for, or time of presentation
of, any drafts, acceptances or documents; or to agree to any amendments,
renewals, extensions, modifications, changes or cancellations of any of the terms or
conditions of any of the applications, Letters of Credit, drafts or acceptances; and b) after the
occurrence of an Event of Default which is not waived by the Agent and/or the Required Lenders, not
to (i) clear and resolve any questions of non-compliance of documents, or (ii) give any
instructions as to acceptances or rejection of any documents or goods.


 


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7. Each Company agrees that any necessary import, export or other licenses or certificates for
the import or handling of the Collateral will have been promptly procured; all foreign and domestic
governmental laws and regulations in regard to the shipment and importation of the Collateral, or
the financing thereof will have been promptly and full complied with; and any certificates in that
regard that the Agent may at any time request will be promptly furnished. In this connection, each
Company warrants and represents that it has no knowledge that any shipments made under any such
Letters of Credit are not in accordance with the laws and regulations of the countries in which the
shipments originate and terminate, and are not prohibited by any such laws and regulations. The
Companies assume all risk, liability and responsibility for, and agree to pay and discharge, all
present and future local, state, federal or foreign taxes, duties, or levies. Any embargo,
restriction, laws, customs or regulations of any country, state, city, or other political
subdivision, where the Collateral is or may be located, or wherein payments are to be made, or
wherein drafts may be drawn, negotiated, accepted, or paid, shall be solely the risk, liability and
responsibility of the Companies.



8. Upon any payments made to the Issuing Bank under the Letter of Credit Guaranty, the Agent
shall acquire by subrogation, any rights, remedies, duties or obligations granted or undertaken by
any Company to the Issuing Bank in any application for Letters of Credit, any standing agreement
relating to Letters of Credit or otherwise, all of which shall be deemed to have been granted to
the Agent and apply in all respects to the Agent and shall be in addition to any rights, remedies,
duties or obligations contained herein.



SECTION 6. Collateral




1. As collateral security for the prompt and complete payment in full when due (whether at the
stated maturity, by acceleration or otherwise) of all loans and advances made and to be made to, or
for the benefit of, the Companies, from time to time by the Lenders, acting through the Agent,
pursuant hereto, as well as to secure the payment and performance of all of the other Obligations
of every Company, each Company hereby pledges and grants to the Agent, for the ratable benefit of
the Lenders, a security interest in and continuing lien on, all of such Company’s right, title and
interest in, to and under all personal property of such Company including, but not limited to the
following, in each case now owned or at any time hereafter acquired by such Company or in which
such Company now has or at any time in the future may acquire any right, title or interest,
wherever located (collectively, the “Collateral”). In addition, but without duplication, each
Company hereby acknowledges, confirms and reaffirms its prior grant to the Agent pursuant to the
Existing Financing Documents of a continuing security interest in all Collateral, which security
interest remains in full force and effect:



(a) all Goods, including all Equipment and Inventory;



(b) all Accounts;


 


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(c) all Documents of Title;



(d) all General Intangibles;



(e) all Chattel Paper;



(f) all Instruments;



(g) all Insurance;



(h) all Investment Related Property;



(i) all Letter of Credit Rights;



(j) all Deposit Accounts;



(k) all Commercial Tort Claims;



(l) all Collateral Documents, Collateral Support and Supporting Obligations relating to any of
the foregoing and all other books and records of such Company;



(m) the Real Estate; and



(n) all Proceeds, products, accessions, rents and profits of or in respect of any of the
foregoing.



2. The security interests granted hereunder shall extend and attach to:



(a) All Collateral which is presently in existence and which is owned by any Company or in
which any Company has any interest, whether held by a Company or others for its account, and, if
any Collateral is Equipment, whether a Company’s interest in such Equipment is as owner, finance
lessee or conditional vendee;



(b) All Equipment whether the same constitutes personal property or fixtures, including, but
without limiting the generality of the foregoing, all dies, jigs, tools, benches, tables,
accretions, component parts thereof and additions thereto, as well as all accessories, motors,
engines and auxiliary parts used in connection with or attached to the Equipment; and



(c) All Inventory and any portion thereof which may be returned, rejected, reclaimed or
repossessed by either the Agent or any Company from a Company’s customers, as well as to all
supplies, goods, incidentals, packaging materials, labels and any other items which contribute to
the finished goods or products manufactured or processed by any Company, or to the sale, promotion
or shipment thereof.



3. Each Company agrees to safeguard, protect and hold all Inventory for the account of the
Lenders, and make no disposition thereof except in the regular course of the business of such
Company as herein provided. Each Company will only sell Inventory to its customers in the ordinary
course of such Company’s business, on open account and on terms



 


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currently being extended by such Company to its customers, provided that all proceeds of all
sales (including cash, accounts receivable, checks, notes, instruments for the payment of money and
similar proceeds) are forthwith transferred, endorsed, and turned over and delivered to the Agent
in accordance with Paragraph 4 of Section 3 of this Financing Agreement. Cash sales or sales of
Inventory in which a lien upon, or security interest in, Inventory is retained by any Company shall
be made by such Company only with the approval of the Agent, and the proceeds of such sales or
sales of Inventory for cash shall not be commingled with such Company’s other property, but shall
be segregated, held by such Company in trust for the Agent, and shall be delivered immediately by
such Company to the Agent in the identical form received by such Company by deposit to the
Depository Accounts. Upon the sale, exchange, or other disposition of Inventory, as herein
provided, the security interest in any Company’s Inventory provided for herein shall, without break
in continuity and without further formality or act, continue in, and attach to, all proceeds,
including any instruments for the payment of money, accounts receivable, contract rights, documents
of title, shipping documents, chattel paper and all other cash and non-cash proceeds of such sale,
exchange or disposition. As to any such sale, exchange or other disposition, the Agent shall have
all of the rights of an unpaid seller, including stoppage in transit, replevin, rescission and
reclamation.



4. Each Company agrees at its own cost and expense to keep the Equipment in as good and
substantial repair and condition as the same is now or at the time the lien and security interest
granted herein shall attach thereto, reasonable wear and tear excepted, making any and all repairs
and replacements when and where necessary. Each Company also agrees to safeguard, protect and hold
all Equipment for the account of the Lenders, and make no disposition thereof unless such Company
first obtains the prior written approval of the Agent. Any sale, exchange or other disposition of
any Equipment shall only be made by a Company with the prior written approval of the Agent, and the
proceeds of any such sales shall not be commingled with such Company’s other property, but shall be
segregated, held by such Company in trust for the Agent, and shall be delivered immediately by such
Company to the Agent in the identical form received by such Company by deposit to the Depository
Accounts. All proceeds of any such sale of Equipment shall be applied first to the Term Loans
pursuant to Paragraph 8 of Section 4 of this Financing Agreement, and second to the outstanding
Obligations as the Agent shall determine in sole discretion. Upon the sale, exchange, or other
disposition of the Equipment, as herein provided, the security interest provided for herein shall,
without break in continuity and without further formality or act, continue in, and attach to, all
proceeds, including any instruments for the payment of money, accounts receivable, contract rights,
documents of title, shipping documents, chattel paper and all other cash and non-cash proceeds of
such sales, exchange or disposition. As to any such sale, exchange or other disposition, the Agent
shall have all of the rights of an unpaid seller, including stoppage in transit, replevin,
rescission and reclamation. Notwithstanding anything hereinabove contained to the contrary, the
Companies may sell, exchange or otherwise dispose of obsolete Equipment or Equipment no longer
needed in a Company’s operations, provided, however, that (a) the then book value of all such
Equipment so disposed of does not exceed $1,000,000.00 in the aggregate in any fiscal year and (b)
the proceeds of such sales or dispositions are delivered to the Agent in accordance with the
foregoing provisions of this Paragraph 4, except that a Company may retain and use such proceeds to
purchase forthwith replacement Equipment which such Company determines in its reasonable business
judgment to have a collateral value at least equal to the Equipment so
disposed of or sold, provided, however, that the aforesaid right shall automatically cease
upon the occurrence of an Event of Default which is not waived.


 


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5. The rights and security interests granted hereunder are to continue in full force and
effect, notwithstanding the termination of this Financing Agreement or the fact that the Collective
Loan Account maintained on the books of the Agent may from time to time be temporarily in a credit
position, until the final payment in full of all Obligations and the termination of this Financing
Agreement. Any delay or omission by the Agent to exercise any right hereunder, shall not be deemed
a waiver thereof, or be deemed a waiver of any other right, unless such waiver be in writing and
signed by the Agent and/or the Required Lenders, as the case may be. A waiver on any one occasion
shall not be construed as a bar to or waiver of any right or remedy on any future occasion.



6. To the extent that the Obligations are now or hereafter secured by any assets or property
other than the Collateral or by the guarantee, endorsement, assets or property of any other person,
then the Agent shall have the right in its sole discretion to determine which rights, security,
liens, security interests or remedies the Agent shall at any time pursue, foreclose upon,
relinquish, subordinate, modify or take any other action with respect to, without in any way
modifying or affecting any of them, or any of the Agent’s rights hereunder.



7. Any reserves or balances to the credit of any Company and any other property or assets of
any Company in the possession of the Agent or any Lender may be held as security for any
Obligations and applied in whole or partial satisfaction of such Obligations when due but shall be
returned to the applicable Company on request unless there is then an uncured Default or unwaived
Event of Default. The liens and security interests granted herein and any other lien or security
interest the Agent or any Lender may have in any other assets of any Company, shall secure payment
and performance of all now existing and future Obligations. The Agent may in its discretion charge
any or all of the Obligations to the Collective Loan Account of the Companies when due.



8. This Financing Agreement and the obligation of the Companies to perform all of their
covenants and obligations hereunder are further secured by a mortgage, deed of trust or assignment
on the Real Estate.



9. Each Company shall give to the Agent from time to time such mortgage, security interest, or
deed of trust (in form and substance satisfactory to the Agent) on the Real Estate or the assets
acquired with the proceeds of any Revolving Loan or Term Loan as the Agent shall require to obtain
a valid first lien thereon subject only to the Permitted Encumbrances.



10. Each Company shall give to the Agent, and/or shall cause the appropriate party to give to
the Agent, from time to time such pledge or security agreements with respect to the capital stock
of any subsidiary of a Company as the Agent shall require to obtain valid first liens thereon.


 


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11. Each Company possesses all General Intangibles and rights thereto necessary to conduct its
business as conducted as of the date hereof and such Company shall
maintain its rights in, and the value of, the foregoing in the ordinary course of its
business, including, without limitation, by making timely payment with respect to any applicable
licensed rights. Each Company shall deliver to the Agent, and/or shall cause the appropriate party
to deliver to the Agent, from time to time such pledge or security agreements with respect to
General Intangibles (now or hereafter acquired) of such Company as the Agent shall require to
obtain valid first priority perfected security interests therein. In furtherance of the foregoing,
each Company shall provide timely notice to the Agent of any additional Patents, Trademarks,
tradenames, service marks, Copyrights, brand names, trade names, logos and other trade designations
acquired or applied for subsequent to the date hereof and such Company shall execute such
documentation as the Agent may reasonably require to obtain and perfect its lien thereon. Each
Company hereby irrevocably grants to the Agent a royalty-free, non-exclusive license in such
Company’s General Intangibles, including tradenames, Trademarks, Copyrights, Patents, licenses, and
any other proprietary and intellectual property rights and any and all right, title and interest in
any of the foregoing, for the sole purpose, upon the occurrence of an Event of Default, of the
right to: (i) advertise for sale and sell or transfer any Inventory bearing any of such General
Intangibles, and (ii) make, assemble, prepare for sale or complete, or cause others to do so, any
applicable raw materials or Inventory bearing any of such General Intangibles, including use of the
Equipment and the Real Estate for the purpose of completing the manufacture of unfinished goods,
raw materials or work-in-process comprising Inventory, and apply the proceeds thereof to the
Obligations hereunder, all as further set forth in this Financing Agreement and irrespective of the
Agent’s lien and perfection in any General Intangibles.



12. Each Company represents and warrants to the Agent that as of the date hereof, to the best
of its knowledge after due inquiry, such Company holds no interest in any Commercial Tort Claim.
If such Company at any time holds or acquires a Commercial Tort Claim, such Company agrees to
promptly notify the Agent in writing of the details thereof, and in such writing such Obligor shall
grant to the Agent a security interest in such Commercial Tort Claim and in the proceeds thereof,
all upon the terms of this Financing Agreement.



SECTION 7. Representations, Warranties and Covenants




1. Each Company hereby warrants and represents and/or covenants that, on a consolidated basis:
(i) the fair value of the Companies’ assets exceeds the book value of the Companies’ liabilities;
(ii) the Companies are generally able to pay their debts as they become due and payable; and (iii)
the Companies do not have unreasonably small capital to carry on their businesses as they are
currently conducted absent extraordinary and unforeseen circumstances. Each Company further
warrants and represents that, except for the Permitted Encumbrances, the security interests granted
herein constitute and shall at all times constitute the first and only liens on the Collateral;
that, except for the Permitted Encumbrances, such Company is or will be at the time additional
Collateral is acquired by it, the absolute owner of the Collateral with full right to pledge, sell,
consign, transfer and create a security interest therein, free and clear of any and all claims or
liens in favor of others; that such Company will at its expense forever warrant and, at the Agent’s
request, defend the same from any and all claims and demands of any other person other than the
Permitted Encumbrances; that such Company will not grant, create or permit to exist, any lien upon
or security interest in the Collateral, or any proceeds thereof, in favor of any other person other
than the holders of the Permitted Encumbrances; and that the Equipment does not comprise a part of
the Inventory of such Company and that the Equipment is and will only be
used by such Company in its business and will not be held for sale or lease, or removed from
its premises, or otherwise disposed of by such Company without the prior written approval of the
Agent except as otherwise permitted in Paragraph 4 of Section 6 of this Financing Agreement.


 


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2. Pending Litigation. Each Company hereby represents and warrants that there exist
no actions, suits or proceedings of any kind by or against such Company, pending in any court or
before any arbitrator or governmental body, or to the best of such Company’s knowledge, threatened
against such Company, that, individually or in the aggregate, could reasonably be expected to cause
a Material Adverse Change.



3. Maintenance of Collateral Records; Inspection. Each Company agrees to maintain
books and records pertaining to the Collateral in such detail, form and scope as the Agent shall
reasonably require. Each Company agrees that the Agent or its agents may enter upon a Company’s
premises at any time during normal business hours, and from time to time, for the purpose of
inspecting the Collateral, and any and all records pertaining thereto. Each Company agrees to
afford the Agent prior written notice of any change in the location of any Collateral, other than
to locations, that as of the date hereof, are known to the Agent and at which the Agent has filed
financing statements and otherwise fully perfected its liens thereon. Each Company is also to
advise the Agent promptly, in sufficient detail, of any material adverse change relating to the
type, quantity or quality of the Collateral or on the security interests granted therein.



4. Collateral Reporting. Each Company agrees to execute and deliver to the Agent,
from time to time, solely for the Agent’s convenience in maintaining a record of the Collateral,
such written statements, and schedules as the Agent may reasonably require, designating,
identifying or describing the Collateral pledged hereunder. Any Company’s failure, however, to
promptly give such statements or schedules shall not affect, diminish, modify or otherwise limit
the Agent’s security interests in the Collateral.



5. Execution of Supplemental Instruments. Each Company agrees to comply with the
requirements of all state and federal laws in order to grant to the Agent, for the benefit of the
Lenders, valid and perfected first priority security interests in the Collateral, subject only to
the Permitted Encumbrances. The Agent is hereby authorized by each Company to file from time to
time any financing statements, continuations or amendments covering the Collateral without such
Company’s signature in accordance with the provisions of the UCC. Each Company hereby consents to
and ratifies the filing of any financing statements covering the Collateral by the Agent on or
prior to the date of this Financing Agreement. Each Company agrees to do whatever the Agent may
reasonably request, from time to time, by way of: (a) filing notices of liens, financing
statements, amendments, renewals and continuations thereof; (b) cooperating with the Agent’s agents
and employees; (c) keeping Collateral records; (d) transferring proceeds of the Collateral to the
Agent’s possession in accordance with the terms hereof; (e) obtaining waivers from landlords,
warehousemen, third party processors and mortgagees; and (f) performing such further acts as the
Agent may reasonably require in order to effect the purposes of this Financing Agreement.


 


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6. Insurance. (a) Each Company agrees to maintain insurance on the Real Estate,
Equipment and Inventory under such policies of insurance, with such insurance
companies, in such reasonable amounts and covering such insurable risks as are at all times
reasonably satisfactory to the Agent. All policies covering the Real Estate, Equipment and
Inventory are, subject to the rights of any holders of Permitted Encumbrances holding claims senior
to the Agent, to be made payable to the Agent, in case of loss, under a standard non-contributory
“mortgagee”, “lender” or “secured party” clause and are to contain such other provisions as the
Agent may require to fully protect the Agent’s interest in the Real Estate, Inventory and Equipment
and to any payments to be made under such policies. All original policies or true copies thereof
are to be delivered to the Agent, premium prepaid, with the loss payable endorsement in the Agent’s
favor, and shall provide for not less than thirty (30) days prior written notice to the Agent of
the exercise of any right of cancellation. At any Company’s request, or if the Companies fail to
maintain such insurance, the Agent may arrange for such insurance, but at the Companies’ expense
and without any responsibility on the Agent’s part for: obtaining the insurance, the solvency of
the insurance companies, the adequacy of the coverage, or the collection of claims. Upon the
occurrence of an Event of Default which is not waived, the Agent shall, subject to the rights of
any holders of Permitted Encumbrances holding claims senior to the Agent, have the sole right, in
the name of the Agent or any Company, to file claims under any insurance policies, to receive,
receipt and give acquittance for any payments that may be payable thereunder, and to execute any
and all endorsements, receipts, releases, assignments, reassignments or other documents that may be
necessary to effect the collection, compromise or settlement of any claims under any such insurance
policies.



(b) (i) In the event of any loss or damage by fire or other casualty, Insurance Proceeds
relating to Inventory shall first reduce the Revolving Loan and then the outstanding principal
balance of the Term Loans, in which case such Insurance Proceeds shall be applied to the then last
maturing installments of principal of such Term Loans as the Agent may elect.



(ii) In the event any part of the Real Estate or the Equipment is damaged by fire or other
casualty and the Insurance Proceeds for such damage or other casualty is less than or equal to
$100,000.00, the Agent shall promptly apply such Insurance Proceeds to reduce the outstanding
balances under the Revolving Loan.



(iii) As long as an Event of Default has not occurred (which is not waived), and the Insurance
Proceeds for damage or other casualty to any part of the Real Estate or the Equipment are in excess
of $100,000.00, the Companies may elect (by delivering written notice to the Agent) to replace,
repair or restore such party of the Real Estate or the Equipment to substantially the equivalent
condition prior to such fire or other casualty as set forth herein. If the Companies do not, or
cannot, elect to use the Insurance Proceeds as set forth above, the Agent may, subject to the
rights of any holders of Permitted Encumbrances holding claims senior to the Agent, apply the
Insurance Proceeds to the payment of the Obligations in such manner and in such order as the Agent
may reasonably elect.



(iv) If the Companies elect to use the Insurance Proceeds for the repair, replacement or
restoration of any part of the Real Estate or the Equipment, and there is then no Event of Default,
(i) Insurance Proceeds on any part of the Equipment and the Real Estate in excess of $100,000.00
will be applied to the reduction of the Revolving Loans and (ii) the Agent may set up a reserve
against Availability for an amount equal to the proceeds referred



 


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to in clause (i) hereof. The reserve will be reduced dollar-for-dollar upon receipt of
non-cancelable executed purchase orders, delivery receipts or contracts for the replacement, repair
or restoration such damaged part of the Real Estate or the Equipment and disbursements in
connection therewith. Prior to the commencement of any restoration, repair or replacement of any
part of the Real Estate, the Companies shall provide the Agent with a restoration plan and a total
budget therefor. If there are insufficient Insurance Proceeds to cover the cost of restoration as
so determined, the Companies shall be responsible for the amount of any such insufficiency, prior
to the commencement of restoration and shall demonstrate evidence of such before the reserve will
be reduced. Completion of restoration shall be evidenced by a final, unqualified certification of
the design architect employed, if any; an unconditional certificate of occupancy, if applicable;
such other certification as may be required by law; or if none of the above is applicable, a
written good faith determination of completion by the Companies (collectively, the “Completion”).
Upon the Completion, any remaining reserve as established hereunder will be automatically released.



7. Taxes. Each Company agrees to pay, when due, all taxes, assessments, claims and
other charges lawfully levied or assessed upon any Company or the Collateral unless such taxes are
being diligently contested in good faith by a Company by appropriate proceedings. Notwithstanding
the foregoing, if any lien shall be claimed thereunder (x) for taxes due the United States of
America or (y) which in the Agent’s opinion might create a valid obligation having priority over
the rights granted to the Agent herein, such lien shall not be a Permitted Encumbrance and the
Companies shall immediately pay such tax and remove the lien of record. If the Companies fail to do
so, then the Agent may pay such taxes, and the amount thereof shall be an Obligation secured hereby
and due on demand.



8. Compliance with Laws; Indemnification. Each Company: (a) agrees to comply with all
material acts, rules, regulations and orders of any legislative, administrative or judicial body or
official, which the failure to comply with would have a material and adverse impact on the
Collateral, or any material part thereof, or on the operation of a Company’s business; provided
that a Company may contest any acts, rules, regulations, orders and directions of such bodies or
officials in any reasonable manner which will not, in the Agent’s reasonable opinion, materially
and adversely effect the Agent’s rights or priority in the Collateral; (b) agrees to comply with
all environmental statutes, acts, rules, regulations or orders as presently existing or as adopted
or amended in the future, applicable to the ownership and/or use of its real property and operation
of its business, which the failure to comply with would have a material and adverse impact on the
Collateral, or any material part thereof, or on the operation of the business of such Company. Each
Company hereby indemnifies the Agent and each Lender and agrees to defend and hold the Agent and
each Lender harmless from and against any and all loss, damage, claim, liability, injury or expense
which the Agent or any Lender may sustain or incur in connection with: any claim or expense
asserted against the Agent or any Lender as a result of any environmental pollution, hazardous
material or environmental clean-up of any Company’s real property; or any claim or expense which
results from any Company’s operations (including, but not limited to, a Company’s off-site disposal
practices) and each Company further agrees that this indemnification shall survive termination of
this Financing Agreement as well as the payment of all Obligations or amounts payable hereunder;
and (c) shall not be deemed to have breached any provision of this Paragraph 8 if (i) the failure
to comply with the requirements of this Paragraph 8 resulted from good faith error or innocent
omission and (ii) a Company
promptly commences and diligently pursues a cure of such breach and such cure is eventually,
within a reasonable time frame based upon the circumstances and amount of work required, completed.


 


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9. Financial and Other Reporting. Until termination of this Financing Agreement and
the other Financing Documents and payment and satisfaction in full of all Obligations due
hereunder, each Company agrees that, unless the Agent, or the Required Lenders, as the case may be,
shall have otherwise consented in writing, ROA will, and if it does not do so, than any other
Company will, furnish to the Agent and each Lender: (a) as soon as available and no later than
ninety (90) days after the end of each fiscal year of the Companies (or, if later, the date on
which such financial statements are filed with the Securities and Exchange Commission), an audited
Consolidated Balance Sheet as at the close of such year, related audited consolidated statement of
profit and loss, cash flows, stockholders’ equity and reconciliation of surplus of the Companies
and all subsidiaries for such year and an unaudited statement of profit and loss for such year for
each operating division of the Companies (including, without limitation, the Quarrying Division,
the Manufacturing Division, the Retailing Division), setting forth in each case, in comparative
form, the figures for the previous fiscal year, audited by independent public accountants selected
by ROA and satisfactory to the Agent and in such form as is then required by the Securities and
Exchange Commission; (b) as soon as available and no later than sixty (60) days after the end of
each fiscal quarter (or, if later, the date on which such financial statements are filed with the
Securities and Exchange Commission), a Consolidated Balance Sheet as at the end of such. period,
and related consolidated statement of profit and loss, cash flows, stockholders’ equity and surplus
of the Companies and all subsidiaries for such period, and an unaudited statement of profit and
loss for such period for each operating division of the Companies (including, without limitation,
the Quarrying Division, the Manufacturing Division, the Retailing Division) setting forth in each
case, in comparative form, the figures for the corresponding period of the previous fiscal year,
certified by an authorized financial or accounting officer of ROA, along with a compliance
certificate satisfactory in form and substance to the Agent, certifying that (i) the
representations and warranties contained in this Financing Agreement are true and correct in all
material respects on and as of the date of such certificate as if made on such date, (ii) the
Companies are in compliance with all of the terms and provisions set forth in this Financing
Agreement; (c) within thirty (30) days after the end of each month, a Consolidated Balance Sheet as
at the end of such period, statement of profit and loss, cash flows, stockholders’ equity surplus
of the Companies and all subsidiaries for such period, and an unaudited statement of profit and
loss for such period for each operating division of the Companies (including, without limitation,
the Quarrying Division, the Manufacturing Division, the Retailing Division) setting forth in each
case, in comparative form, the figures for the corresponding period of the previous fiscal year,
certified by an authorized financial or accounting officer of ROA; (d) within thirty (30) days
after the end of each month, a Borrowing Base Certificate certifying the Companies’ Borrowing Base
as of the last day of such month, together with a report, in form and substance, and in such
detail, as shall be satisfactory to the Agent, of the amount and value by location and type of the
Inventory, the aging of the Companies’ Accounts, the concentration of each Companies’ customers,
and a work-up of each Company’s ineligible Accounts and Inventory, in each case, as of the end of
such month; (e) within sixty (60) days, after the end of each fiscal year, the Companies’
forecasted Consolidated Balance Sheet, and related consolidated statement operations, stockholders’
equity, cash flows and Availability (all prepared on a consistent basis with the



 


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Companies’ historical consolidated and consolidating financial statements) together with
appropriate supporting details and a statement of underlying assumptions, in each case for the
forthcoming fiscal year, prepared on a month-to-month basis; and (f) from time to time, such
further information regarding the operations, business affairs and financial condition of any
Company, any subsidiary of any Company, or any division of the Companies or such subsidiaries as
the Agent may reasonably request, including, without limitation, updated cash flow projections and
information regarding same retail store sales, each in form satisfactory to the Agent and the
management letter from the public accountants at fiscal year end. Each financial statement required
hereunder must be accompanied by an officer’s certificate, signed by the President, Vice President,
Controller, or Treasurer, pursuant to which any one such officer must certify that during the
particular accounting period: (i) there has been no Default or Event of Default under this
Financing Agreement, provided, however, that if any such officer has knowledge that
any such Default or Event of Default has occurred during such period, the existence of and a
detailed description of same shall be set forth in such officer’s certificate; and (ii) no Company
has received any notice of cancellation with respect to its property insurance policies. Each such
officer’s certificate shall also set forth reasonably detailed calculations of the Companies’
Availability as of the last day of the applicable accounting period, Fixed Charge Coverage Ratio,
Leverage Ratio and Capital Expenditures for the period then ended and set forth such other
information as will demonstrate the Companies’ compliance with Paragraphs 12, 13 and 14,
respectively, of Section 7.



10. Negative Covenants. Until termination of the Financing Agreement and payment and
satisfaction of all Obligations due hereunder, each Company agrees that, without the prior written
consent of the Agent or the Required Lenders, as the case may be, except as otherwise herein
provided, the Companies, or any one of them, will not:



(a) Mortgage, assign, pledge, transfer or otherwise permit any lien, charge, security
interest, encumbrance or judgment, (whether as a result of a purchase money or title retention
transaction, or other security interest, or otherwise) to exist on any of its assets or goods,
whether real, personal or mixed, whether now owned or hereafter acquired, except for the Permitted
Encumbrances;



(b) Incur or create any Indebtedness other than the Permitted Indebtedness;



(c) Borrow any money on the security of the Collateral from sources other than the Lenders
acting through the Agent;



(d) Sell, lease, assign, transfer or otherwise dispose of (i) Collateral, except as otherwise
specifically permitted by this Financing Agreement, or (ii) either all or substantially all of a
Company’s assets, which do not constitute Collateral;



(e) Merge, consolidate or otherwise alter or modify its corporate name, principal place of
business, structure or existence, or enter into or engage in any operation or activity materially
different from that presently being conducted by a Company, provided, however, that any Company, on
ten (10) Business Days prior notice to the Agent, may merge
with (i) any other Company or (ii) any subsidiary of a Company provided a Company is a
survivor of such merger;


 


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(f) Assume, guarantee, endorse, or otherwise become liable upon the obligations of any person,
firm, entity or corporation, except by the endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business;



(g) Declare or pay any cash dividend of any kind on, or purchase, acquire, redeem or retire,
for cash, any capital stock or equity interest, of any class whatsoever, whether now or hereafter
outstanding, except that: (i) any Company may declare and pay dividends on its capital
stock to ROA to facilitate payment of income taxes due as a result of the filing of a unitary or
consolidated tax return on which the income of such Company is included; (ii) with the prior
written consent of the Required Lenders, any Company may purchase, acquire, redeem or retire, for
cash, any capital stock of or equity interest in such Company, provided, that (1) the
aggregate amount of payments made by all of the Companies over the term of this Financing Agreement
pursuant to this clause (ii) shall not exceed $2,000,000.00, (2) Availability on the date of each
such payment and after giving effect thereto shall, in each case, be not less than $3,000,000.00
(for purposes hereof, Availability shall be calculated without including the amount referred to in
clause (c) of the definition of such term), (3) no Default or Event of Default shall have occurred
and be continuing immediately before or immediately after giving effect to any such payment, and
(4) such Company shall have given the Agent at least ten (10) days’ prior written notice of such
payment; and (iii) in addition to the dividends permitted to be paid under clause (i) above, any
Company may declare and pay cash dividends on its capital stock, provided, that (1) the
aggregate amount of dividends paid by all of the Companies pursuant to this clause (iii) shall not
exceed $185,000.00 in any fiscal quarter or $740,000.00 in any fiscal year (with no carry-over of
amounts from one quarter or one year to another), (2) Availability on the date of payment of each
such dividend and after giving effect thereto shall, in each case, be not less than $3,000,000.00
(for purposes hereof, Availability shall be calculated without including the amount referred to in
clause (c) of the definition of such term), (3) such Company shall have given the Agent at least
three (3) days’ prior written notice of such payment, and (4) no Default or Event of Default shall
have occurred and be continuing immediately before or immediately after giving effect to any such
dividend; or



(h) Make any advance or loan to, or any investment in, any firm, entity, person or corporation
provided, however, that (i) any Company may make an advance or loan to, or an investment in, any
other Company, and (ii) any Company may make an advance or loan to, or an investment in, any
affiliate or subsidiary of any Company provided the aggregate outstanding amount of all such loans,
investments and advances under this clause (ii) shall not exceed $2,500,000.00 in the aggregate at
any one time.



11. Maximum Operating Lease Obligations. Without the prior written consent of the
Required Lenders, or the Agent, as the case may be, the Companies, or any one of them, will not
enter into any Operating Lease if after giving effect thereto the aggregate obligations with
respect to Operating Leases of the Companies during any fiscal year would exceed $1,000,000.00.


 


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12. Minimum Fixed Charge Coverage Ratio. The Companies shall maintain a Fixed Charge
Coverage Ratio, on a consolidated basis, for each period set forth below of not less than the ratio
set forth below, opposite such period:



	 	 	 
	Period	 	Minimum Fixed Charge Coverage Ratio
	 
	 	 
	four (4) fiscal quarters ending on or
about December 31, 2007

	 	1.0 to 1.0
	 
	 	 
	four (4) fiscal quarters ending on or
about March 31, 2008

	 	1.0 to 1.0
	 
	 	 
	four (4) fiscal quarters ending on or
about June 30, 2008

	 	1.0 to 1.0
	 
	 	 
	four (4) fiscal quarters ending on or
about September 30, 2008

	 	1.0 to 1.0
	 
	 	 
	four (4) fiscal quarters ending on or
about December 31, 2008

	 	1.0 to 1.0
	 
	 	 
	four (4) fiscal quarters ending on or
about March 31, 2009, and each
consecutive period of four (4) fiscal
quarters ending thereafter

	 	1.1 to 1.00






13. Maximum Leverage Ratio. The Companies shall maintain at all times, on a
consolidated basis, a Leverage Ratio of not more than 2.0 to 1.0; provided,
however, that any change in Tangible Net Worth directly resulting from the Companies’
compliance with Financial Accounting Standards Board Statement No. 158 (“FASB 158”) shall be
disregarded for purposes of calculating the Leverage Ratio as of any date, provided,
further that solely for purposes of determining the compliance by the Companies with the
Leverage Ratio, the maximum amount of any reduction in Tangible Net Worth directly resulting from
the Companies’ compliance with FASB 158 shall be $6,000,000.00.



14. Maximum Capital Expenditures. The Companies shall not make or contract to make,
on a consolidated basis, Capital Expenditures in an aggregate amount in excess of: (a) during the
fiscal year ending on or about December 31, 2007, $3,000,000.00; and (b) during any fiscal year
ending thereafter, $3,000,000.00.



15. Environmental Matters. Each Company agrees to advise the Agent in writing of: (a)
all expenditures (actual or anticipated) in excess of $150,000.00 for (x) environmental clean-up,
(y) environmental compliance or (z) environmental testing and the impact of said expenses on the
Companies’ Working Capital; (b) any notices such Company receives from any local, state or federal
authority advising such Company of any material environmental liability (real or potential)
stemming from such Company’s operations, its premises, its waste disposal practices, or waste
disposal sites used by such Company; or (c) any environmental audit report conducted with respect
to any portion of the Real Estate which reveals a material liability (real or potential) stemming
from such Company’s operations, its premises, its waste disposal practices, or waste disposal sites
used by such Company; and to



 


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provide the Agent with copies of all such notices if so required. Each Company shall furnish
to the Agent not less than five (5) days prior to the acquisition by such Company of any Real
Estate a “Phase I” environmental audit report in form and substance satisfactory to the Agent with
respect to such Real Estate. In the event any environmental audit report(s) discloses or indicates
any material liability (real or potential) stemming from any Real Estate or any Company’s or prior
owners’ operations, waste disposal practices or waste disposal sites with respect to any Real
Estate, the Agent may deduct its good faith estimate of the amount of such liability from the
appraised value of such Real Estate, and in the event that the aggregate appraised value of all
Real Estate with respect to which the Agent is mortgagee is less than the aggregate amount of
outstanding Obligations arising from the Term Loans, then the Agent may request and the Companies
agree to grant and execute additional mortgages on Real Estate until the aggregate appraised value
of mortgaged Real Estate is equal to the aggregate amount of outstanding Obligations arising from
the Term Loans. Each Company hereby represents and warrants that (x) the applicable Companies have
complied with all remediation recommendations contained in, and have addressed in a reasonable
manner all other similar types of recommendations contained in the Existing Phase I Reports and (y)
to the best of each Company’s knowledge after due inquiry, no material adverse development or event
has occurred with respect to any real property, or any environmental condition applicable thereto,
covered by the Existing Phase I Reports, since the date of the Existing Phase I Reports.



16. Replacement Term Loan Promissory Note. Upon receipt of an affidavit of an officer
of the Agent as to the loss, theft, destruction or mutilation of a Term Loan Promissory Note or any
other security document which does not constitute a public record, and in the case of any such
loss, theft, destruction or mutilation, upon cancellation of such Term Loan Promissory Note or
other security document, the Companies will issue, in lieu thereof, a replacement note or other
security document in the same principal amount thereof and otherwise like tenor.



17. Inventory Appraisals. Upon the occurrence and during the continuance of an Event
of Default, each Company shall cause to be performed from time to time, at the Agent’s request, an
appraisal, in form and substance satisfactory to the Agent, of the net orderly liquidation value of
the Inventory, each such appraisal to be conducted by an appraiser acceptable to the Agent and at
the sole cost and expense of such Company. The Agent may cause to be performed from time to time,
at its sole cost and expense, an appraisal of the net orderly liquidation value of the Inventory,
so long as no Event of Default shall have occurred and is continuing.



18. Anti-Money Laundering and Terrorism Regulations. The Companies agree to comply
with all applicable anti-money laundering and terrorism laws, regulations and executive orders in
effect from time to time (including, without limitation, the USA Patriot Act (Pub. L. No. 107-56).
The Companies also agree to ensure that no person who owns a controlling interest in or otherwise
controls any Company is a person designated under Section 1(b), (c) or (d) of Executive Order No.
13224 (issued September 23, 2001) or any other similar Executive Order. The Companies acknowledge
that the Agent’s and the Lenders’ performance hereunder is subject to compliance with all such
laws, regulations and executive orders, and in furtherance of the foregoing, the Companies agree to
provide to the Agent all information about the Companies’ ownership, officers, directors, customers
and business structure as the Agent reasonably may require to comply with, such laws, regulations
and executive orders.


 


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19. ERISA. No Company has (i) engaged in any “prohibited transaction”, as defined in
ERISA, (ii) had any “accumulated funding deficiency”, as defined in ERISA, other than as previously
disclosed to the Agent in writing, (iii) incurred any “reportable event” as defined in ERISA, (iv)
terminated any “plan”, as defined in ERISA or (v) been engaged in any proceeding in which the
Pension Benefit Guaranty Corporation sought appointment, or was appointed, as trustee or
administrator of any “plan”, as defined in ERISA (“Plan”). Other than as previously disclosed to
the Agent in writing, the present value of all accumulated benefit obligations under each Plan
(based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87
(“SFAS 87”)) did not, as of the date of the most recent financial statements reflecting such
amounts, exceed the fair market value of the assets of such Plan by an amount which could
reasonably be expected to result in a Material Adverse Change, and the present value of all
accumulated benefit obligations of all underfunded Plans (based on the assumptions used for
purposes of SFAS 87) did not, as of the date of the most recent financial statements reflecting
such amounts, exceed the fair market value of the assets of all such underfunded Plans by an amount
which could reasonably be expected to result in a Material Adverse Change.



SECTION 8. Interest, Fees and Expenses.




1. Interest on the Revolving Loan shall be payable monthly as of the end of each month and
shall be an amount equal to a variable per annum rate equal to the Chase Bank Rate plus the
Applicable Increment, or, at ROA’s election, at a fixed per annum rate equal to Libor plus
the Applicable Increment. Interest shall be computed on a per annum basis on the average of the net
balances owing by the Companies at the close of each day during such month. In the event of any
change in said Chase Bank Rate, the rate hereunder shall change as of the first of the month
following any change. ROA may elect to use Libor as to any new or then outstanding Revolving Loans
provided (x) there is then no Default or unwaived Event of Default and (y) ROA has advised the
Agent of its election to use Libor and the Libor Period selected no later than three (3) Business
Days prior to the proposed borrowing or, in the case of a Libor election with respect to a then
outstanding Revolving Loan, three (3) Business Days prior to the conversion of any then outstanding
Revolving Loans to Libor Loans and (z) the election and Libor shall be effective, provided there is
then no Default or unwaived Event of Default, on the fourth (4th) Business Day following
said notice. The Libor elections must be for $1,000,000.00 or whole multiples thereof. No more than
four (4) Libor elections may be in effect at any one time. The Agent shall be entitled to charge
the Collective Loan Account (i) at the rate provided for herein when due until all Obligations have
been paid in full; (ii) the Libor Processing Fee on the effective date of the Libor Election. All
rates hereunder shall be calculated based on a 360 day year.



2. Interest on the Term Loans shall be payable monthly as of the end of each month and shall
be an amount equal to the Chase Bank Rate plus the Applicable Increment, or, at ROA’s
election, at a fixed per annum rate equal to Libor plus the Applicable Increment. Interest
shall be computed on a per annum basis on the average of the net balances owing by the Companies at
the close of each day during such month. In the event of any change in the Chase Bank Rate, the
rate hereunder shall change as of the first of the month following any such change. ROA may elect
to use Libor as to any portion of any of the Term Loans, provided (x) there is then no Default or
unwaived Event of Default and (y) ROA has advised the Agent of its



 


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election to use Libor and the Libor Period selected no later than three (3) Business Days
prior to the proposed borrowing or, in the case of a Libor election with respect to a then
outstanding Term Loan, three (3) Business Days prior to the conversion of the applicable portion of
any then outstanding Term Loans to a Libor Loan and (z) the election and Libor shall be effective,
provided there is then no Default or unwaived Event of Default, on the fourth (4th)
Business Day following such notice. The Libor elections must be for $1,000,000.00 or whole
multiples thereof. No more than an aggregate of four (4) Libor elections (whether under this
Paragraph 2 or Paragraph 1 above) may be in effect under this Financing Agreement at any one time.
The Agent shall be entitled to charge the Collective Loan Account (i) at the rate provided for
herein when due until all Obligations have been paid in full; (ii) the Libor Processing Fee on the
effective date of the Libor Election. All rates hereunder shall be calculated based on a 360 day
year.



3. At the end of each fiscal quarter ROA, and if ROA shall fail to do so, than a Company shall
deliver to the Agent and each Lender a copy of the Companies’ (i) Consolidated Balance Sheet for
the fiscal quarter then ended or (ii) if the fiscal year is then over, Consolidated Balance Sheet
for the fiscal year then ended. If the Companies had, on a consolidated basis, for the preceding
fiscal quarter, a Funded Debt to Net Worth Ratio that pursuant to Paragraph 1 above entitles the
Companies (but subject to the provisions of Paragraph 2 of Section 10 of this Financing Agreement),
with respect to interest charged on Revolving Loans and the Term Loans, to the lower spread over
the Chase Bank Rate and Libor, the reduction shall be effective provided there is no Default or
Event of Default then in existence on both (i) the date of delivery to the Agent of such
Consolidated Balance Sheet and (ii) the date of effectiveness of such lower spreads. The lower
spread over (x) the Chase Bank Rate shall be effective on the first day of the month following the
Agent’s receipt of the aforesaid Consolidated Balance Sheet; (y) Libor as to all loans which are
not Libor Loans shall be effective on the first day of the month following the Agent’s receipt of
the aforesaid Consolidated Balance Sheet; and (z) Libor as to all then Libor Loans shall be
effective on the day after the expiration of a Libor Period, and such lower spread over the Chase
Bank Rate and Libor shall be prospective only and shall not be retroactive. Failure to deliver,
within sixty (60) days of the end of a fiscal quarter or within one hundred twenty (120) days of
the end of a fiscal year, the aforesaid Consolidated Balance Sheet shall constitute a forfeiture by
the Companies of any right to a rate reduction for the next succeeding quarter and the Agent may
charge the highest spread permitted over Libor or the Chase Bank Rate, as applicable, in each case,
with respect to interest charged on Revolving Loans and the Term Loans.



4. The Companies shall pay to the Agent, for the account of the Lenders, such amount or
amounts as shall compensate the Lenders for any loss, costs or expense incurred by the Agent and/or
the Lenders as a result of: (i) any payment or prepayment on a date other than the last day of a
Libor Period for such Libor Loan, or (ii) any failure to borrow a Libor Loan on the date for such
borrowing specified in the relevant notice; such compensation to include, without limitation, an
amount equal to any loss or expense suffered by the Agent and/or the Lenders during the period from
the date of receipt of such payment or prepayment or the date of such failure to borrow to the last
day of such Libor Period if the rate of interest obtained by the Agent and/or the Lenders upon the
reemployment of an amount of funds equal to the amount of such payment, prepayment or failure to
borrow is less than the rate of interest applicable to such Libor Loan for such Libor Period. The
determination by the Agent and/or the Lenders of the
amount of any such loss or expense, when set forth in a written notice to the Companies,
containing the calculations thereof in reasonable detail, shall be conclusive, in the absence of
manifest error.


 


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5. The Companies shall pay the Agent, for the account of the Lenders, in consideration of the
Letter of Credit Guaranty Fee, payable on date of issuance of each Letter of Credit, in an amount
equal to (a) the Applicable Fee Percentage, multiplied by (b) the face amount of
such Letter of Credit.



6. Intentionally Omitted.



7. Any charges, fees, commissions, costs and expenses charged to the Agent for any Company’s
account by any Issuing Bank in connection with or arising out of Letters of Credit issued pursuant
to this Financing Agreement or out of transactions relating thereto will be charged to the
Collective Loan Account in full when charged to, or paid by, the Agent and when made by any such
Issuing Bank shall be conclusive on the Agent.



8. The Companies shall reimburse or pay the Agent, as the case may be, for (i) all
Out-of-Pocket Expenses of the Agent and (ii) any applicable Documentation Fee when charged to or
paid by the Agent.



9. Upon the last Business Day of each month, commencing with the month of October, 2007, the
Companies shall pay to the Agent, for the account of the Lenders, the Line of Credit Fee, which
shall be calculated based on a 360-day year.



10. To induce the Lenders to enter into this Financing Agreement and to consummate the
transactions contemplated to occur hereunder, the Companies shall pay to the Agent, for the account
of the Lenders, a Closing Fee equal to $75,000.00. Such Closing Fee shall be non-refundable when
paid, shall be deemed to be fully earned, and shall be due and payable in full on the Closing Date.



11. Upon the first Business Day of each month, the Companies shall pay to the Agent, solely
for the account of the Agent, a non-refundable Collateral Management Fee of $1,000.00, which fee
shall be fully earned on the first Business Day of each month.



12. At the end of each fiscal quarter, ROA and if ROA shall fail to do so than a Company shall
deliver to the Agent and each Lender a copy of the Companies’ (i) Consolidated Balance Sheet for
the fiscal quarter then ended or (ii) if the fiscal year is then over, Consolidated Balance Sheet
for the fiscal year then ended. If the Companies had, for the preceding fiscal quarters, a Funded
Debt to Net Worth Ratio such that pursuant to Paragraphs 5, 9 and 11 above, the Companies shall be
entitled to a Letter of Credit Guaranty Fee in accordance with the definition of Applicable Fee
Percentage, and such reduction shall be effective provided each of the following conditions are
met: (a) there is no Default or Event of Default then in existence on both (i) the date of delivery
to the Agent of such Consolidated Balance Sheet and (ii) the date of effectiveness of such lower
Letter of Credit Guaranty Fee and (b) the lower Letter of Credit Guaranty Fee shall be prospective
only and shall not be retroactive. Failure to deliver, within sixty (60) days of the end of a
fiscal quarter or within one hundred twenty (120) days of the end of a fiscal year, the aforesaid
Consolidated Balance Sheet shall constitute a forfeiture by
the Companies of any right to a reduction of the Letter of Credit Guarantee Fee for the next
succeeding quarter and the Agent may charge the highest fee permitted.


 


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13. The Companies shall pay the Agent’s standard charges for, and the fees and expenses of,
the Agent’s personnel for reviewing the books and records of the Companies, or any one or more of
them, and for verifying, testing, protecting, safeguarding, preserving or disposing of all or any
part of the Collateral provided, however, that the foregoing shall not be payable if the Companies
are paying a Collateral Management Fee. If the Companies are not paying a Collateral Management Fee
and there is then no Default or Event of Default, such fees and expenses shall not exceed $6,000.00
in any calendar year, provided, however, that whether or not the Companies are paying a Collateral
Management Fee, if there is a then Default or Event of Default then there shall be no dollar
limitation on the amount of such fees and expenses.



14. Each Company hereby authorizes the Agent to charge the Collective Loan Account with the
Agent with the amount of all payments due hereunder as such payments become due. Each Company
confirms that any charges which the Agent may so make to the Collective Loan Account as herein
provided will be made as an accommodation to the Companies and solely at the Agent’s discretion.



15. All agreements between the Companies and the Agent are hereby expressly limited so that in
no contingency or event whatsoever, whether by reason of acceleration of maturity of the
indebtedness evidenced hereby or otherwise, shall the amount paid or agreed to be paid to the Agent
for the use or the forbearance of the indebtedness evidenced hereby exceed the maximum permissible
under applicable law. As used herein, the term “applicable law” shall mean the law in effect as of
the date hereof, provided, however, that in the event there is a change in the law which results in
a higher permissible rate of interest, then each Term Loan Promissory Note shall be governed by
such new law as of its effective date. In this regard, it is expressly agreed that it is the intent
of the Companies and the Agent in the execution, delivery and acceptance of each Term Loan
Promissory Note to contract in strict compliance with the laws of the State of New York from time
to time in effect. If, under or from any circumstances whatsoever, fulfillment of any provision
hereof or of any of the Financing Documents at the time of performance of such provision shall be
due, shall involve transcending the limit of such validity prescribed by applicable law, then the
obligation to be fulfilled shall automatically be reduced to the limits of such validity, and if
under or from circumstances whatsoever the Agent should ever receive as interest an amount which
would exceed the highest lawful rate, such amount which would be excessive interest shall be
applied to the reduction of the principal balance evidenced hereby and not to the payment of
interest. This provision shall control every other provision of all agreements between the
Companies and the Agent.



SECTION 9. Powers.




Each Company hereby constitutes the Agent on behalf of the Lenders or any person or agent the
Agent may designate as its attorney-in-fact, at each Company’s cost and expense, to exercise all of
the following powers, which being coupled with an interest, shall be irrevocable until all of the
Obligations have been paid in full:


 


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(a) To receive, take, endorse, sign, assign and deliver, all in the name of the Agent or any
Company, any and all checks, notes, drafts, and other documents or instruments relating to the
Collateral;



(b) To receive, open and dispose of all mail addressed to any Company and to notify postal
authorities to change the address for delivery thereof to such address as the Agent may designate;



(c) To request from customers indebted on Accounts at any time, in the name of the Agent or
the applicable Company or that of the Agent’s designee, information concerning the amounts owing on
the Accounts;



(d) To transmit to customers indebted on Accounts notice of the Agent’s interest therein and
to notify customers indebted on Accounts to make payment directly to the Agent for the Collective
Loan Account; and



(e) To take or bring, in the name of the Agent or any Company, all steps, actions, suits or
proceedings deemed by the Agent necessary or desirable to enforce or effect collection of the
Accounts.



Notwithstanding anything hereinabove contained to the contrary, the powers set forth in (b),
(d) and (e) above may only be exercised after the occurrence of an Event of Default and until such
time as such Event of Default is waived.



SECTION 10. Events of Default and Remedies.




1. Notwithstanding anything hereinabove to the contrary, the Agent, acting for the Lenders,
may terminate this Financing Agreement immediately upon the occurrence of any of the following
(herein “Events of Default”):



(a) cessation of the business of a Company or the calling of a meeting of the creditors of any
Company for purposes of compromising the debts and obligations of any Company;



(b) the failure of any Company to generally meet debts as they mature;



(c) the commencement by any Company of any bankruptcy, insolvency, arrangement,
reorganization, receivership or similar proceedings under any federal or state law;



(d) the commencement against any Company of any bankruptcy, insolvency, arrangement,
reorganization, receivership or similar proceedings under any federal or state law;
provided, however, that such Default shall not constitute an Event of Default if
the proceeding, case, petition or arrangement is dismissed within sixty (60) days of such filing or
commencement;


 


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(e) material breach by any Company of any warranty, representation or covenant contained
herein (other than those referred to in subparagraph (f) below) or in any
other written agreement between the Agent and/or the Lenders and any Company, provided that
such Default by any Company of any of the warranties, representations or covenants referred in this
subparagraph (e) shall not be deemed to be an Event of Default unless and until such Default shall
remain unremedied to the Agent’s satisfaction for a period of thirty (30) days from the date of
such breach;



(f) breach by any Company of any warranty, representation or covenant of Section 3, Paragraphs
3 (other than the third sentence of Paragraph 3) and 4; Section 6, Paragraphs 3 and 4 (other than
the first sentence of Paragraph 4); Section 7, Paragraphs 1, 5, 6, and 9 through 15;



(g) failure of any Company to pay any of the Obligations within five (5) Business Days of the
due date thereof, provided that nothing contained herein shall prohibit the Agent from charging
such amounts to the Collective Loan Account on the due date thereof;



(h) the Companies, on a consolidated basis, sustain a net loss in any fiscal year as
determined in accordance with GAAP;



(i) any Company shall (i) engage in any “prohibited transaction”, as defined in ERISA, (ii)
have any “accumulated funding deficiency”, as defined in ERISA, (iii) incur any “reportable event”
as defined in ERISA, (iv) terminate any “plan”, as defined in ERISA or (v) be engaged in any
proceeding in which the Pension Benefit Guaranty Corporation shall seek appointment, or is
appointed, as trustee or administrator of any “plan”, as defined in ERISA, and with respect to this
subparagraph (i) such event or condition (x) remains uncured for a period of ninety (90) days from
date of occurrence and (y) could, in the reasonable opinion of the Agent, subject any Company to
any tax, penalty or other liability material to the business, operations or financial condition of
any Company;



(j) any Company shall become unable, admit in writing its inability or fail generally to pay
its debts as they become due; or



(k) a Change of Control shall occur absent prior written consent thereto by the Agent and the
Lenders.



2. Upon the occurrence of a Default or an Event of Default, at the option of the Agent, all
loans and advances provided for in Paragraph 1 of Section 3 of this Financing Agreement shall be
thereafter in the Agent’s sole discretion and the obligation of the Lenders, acting through the
Agent, to make revolving loans and/or open Letters of Credit shall cease unless such Default is
cured to the Agent’s satisfaction or such Event of Default is waived, and at the option of the
Agent, or at the direction of the Required Lenders, upon the occurrence of an Event of Default: (i)
all Obligations shall become immediately due and payable; (ii) the Agent may charge the Default
Rate of Interest on all then outstanding or thereafter incurred Obligations in lieu of the interest
provided for in Section 8 of this Financing Agreement provided (a) the Agent has given the
Companies written notice of the Event of Default, provided, however, that no notice is required if
the Event of Default is the event listed in Paragraph 1(c) or 1(d) of this Section 10 and (b) the
Companies have failed to cure the Event of Default within ten (10) days after (x) the Agent
deposited such notice in the United States mail or (y) the occurrence of the



 


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Event of Default listed in Paragraph 1(c) or 1(d) of this Section 10; and (iii) the Agent may
immediately terminate this Financing Agreement upon notice to ROA, provided, however, that no
notice of termination is required if the Event of Default is the event listed in Paragraph 1(c) or
1(d) of this Section 10. The exercise of any option is not exclusive of any other option which may
be exercised at any time by the Agent. A Default Rate of Interest shall cease as soon as the Event
of Default giving rise to the Default Rate of Interest is waived. In the event the Default Rate of
Interest is charged as a result of a breach or violation of Paragraphs 14 or 15 of Section 7 of
this Financing Agreement, the Default Rate of Interest shall cease as soon as the Companies
demonstrate on the next succeeding test date that they have not breached or violated the covenants
applicable for said test date and that there is not another outstanding Event of Default.



3. Immediately upon the occurrence of any Event of Default, the Agent may to the extent
permitted by law: (a) remove from any premises where same may be located any and all documents,
instruments, files and records, and any receptacles or cabinets containing same, relating to the
Accounts, or the Agent may use, at any Company’s expense, such of a Company’s personnel, supplies
or space at any Company’s places of business or otherwise, as may be necessary to properly
administer and control the Accounts or the handling of collections and realizations thereon; (b)
bring suit, in the name of any Company or the Agent, and generally shall have all other rights
respecting said Accounts, including without limitation the right to: accelerate or extend the time
of payment, settle, compromise, release in whole or in part any amounts owing on any Accounts and
issue credits in the name of the applicable Company or the Agent; (c) sell, assign and deliver the
Collateral and any returned, reclaimed or repossessed merchandise, with or without advertisement,
at public or private sale, for cash, on credit or otherwise, at the Agent’s sole option and
discretion, and the Agent may bid or become a purchaser at any such sale, free from any right of
redemption, which right is hereby expressly waived by the Companies; (d) foreclose the security
interests created herein by any available judicial procedure, or to take possession of any or all
of the Inventory and Equipment without judicial process, and to enter any premises where any
Inventory and Equipment may be located for the purpose of taking possession of or removing the same
and (e) exercise any other rights and remedies provided in law, in equity, by contract or
otherwise. The Agent shall have the right, without notice or advertisement, to sell, lease, or
otherwise dispose of all or any part of the Collateral whether in its then condition or after
further preparation or processing, in the name of any Company or the Agent, or in the name of such
other party as the Agent may designate, either at public or private sale or at any broker’s board,
in lots or in bulk, for cash or for credit, with or without warranties or representations, and upon
such other terms and conditions as the Agent in its sole discretion may deem advisable, and the
Agent shall have the right to purchase at any such sale. If any Inventory and Equipment shall
require rebuilding, repairing, maintenance or preparation, the Agent shall have the right, at its
option, to do such of the aforesaid as is necessary, for the purpose of putting the Inventory and
Equipment in such saleable form as the Agent shall deem appropriate. Each Company agrees, at the
request of the Agent, to assemble the Inventory and Equipment and to make it available to the Agent
at premises of any Company where then located and to make available to the Agent the premises and
facilities of any Company for the purpose of the Agent’s taking possession of, removing or putting
the Inventory located there and Equipment located there in saleable form. However, if notice of
intended disposition of any Collateral is required by law, it is agreed that ten (10) days notice
shall constitute reasonable notification and full compliance with the law. The Net Cash Proceeds
resulting from the Agent’s exercise of any of the foregoing rights, (after deducting all charges,



 


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costs and expenses, including reasonable attorneys’ fees) shall be applied by the Agent to the
payment of the Obligations, whether due or to become due, in such order as the Agent may elect, and
each Company shall remain liable to the Agent for any deficiencies, and the Agent in turn agrees to
remit to ROA or its successors or assigns, any surplus resulting therefrom. The enumeration of the
foregoing rights is not intended to be exhaustive and the exercise of any right shall not preclude
the exercise of any other rights, all of which shall be cumulative. The mortgage, deed of trust or
assignment on the Real Estate shall govern the rights and remedies of the Agent thereto.



SECTION 11. Termination.




Except as otherwise permitted herein, the Agent may, and shall at the request of the Required
Lenders, terminate this Financing Agreement and the Line of Credit only as of the fifth or any
subsequent Anniversary Date and then only by giving ROA at least sixty (60) days prior written
notice of termination. Notwithstanding the foregoing, the Agent may, and shall at the request of
the Required Lenders, terminate the Financing Agreement immediately upon the occurrence of an Event
of Default, provided, however, that if the Event of Default is an event listed in Paragraph 1(c) or
1(d) of Section 10 of this Financing Agreement, the Agent may regard the Financing Agreement as
terminated and notice to that effect is not required. This Financing Agreement, unless terminated
as herein provided, shall automatically continue from Anniversary Date to Anniversary Date.
Notwithstanding the foregoing, ROA may terminate this Financing Agreement and the Line of Credit at
any time upon sixty (60) days’ prior written notice to the Agent, provided that the Companies pay
to the Agent, for the account of the Lenders, immediately on demand, an Early Termination Fee and
the Prepayment Premium, if applicable, provided, however, that in the event CIT, or an affiliate or
subsidiary of CIT, ceases to be either a Lender or the Agent, ROA may, within sixty (60) days from
the date such cessation occurs, terminate this Financing Agreement and the Line of Credit upon
sixty (60) days prior notice to the Agent without payment of an Early Termination Fee and/or the
Prepayment Premium. All Obligations shall become due and payable as of any termination hereunder or
under Section 10 hereof and, pending a final accounting, the Agent may withhold any balances in the
Collective Loan Account (unless supplied with an indemnity satisfactory to the Agent) to cover all
of the Obligations, whether absolute or contingent. All of the Agent’s rights, liens and security
interests shall continue after any termination until all Obligations have been paid and satisfied
in full.



SECTION 12. Agreement Between the Lenders.




1. (a) The Agent, for the account of the Lenders, shall disburse all loans and advances to the
Companies and shall handle all collections of Collateral and repayment of Obligations. It is
understood that for purposes of advances to the Companies and for purposes of this Section 12 the
Agent is using the funds of the Agent.



(b) Unless the Agent shall have been notified in writing by any Lender prior to any advance to
one or more of the Companies that such Lender will not make the amount which would constitute its
share of the borrowing on such date available to the Agent, the Agent may assume that such Lender
shall make such amount available to the Agent on a Settlement Date and the Agent may, in reliance
upon such assumption, make available to one or more of the Companies a corresponding amount. A
certificate of the Agent submitted to any Lender with



 


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respect to any amount owing under this subsection shall be conclusive, absent manifest error.
If such Lender’s share of such borrowing is not in fact made available to the Agent by such Lender
on the Settlement Date, the Agent shall be entitled to recover such amount with interest thereon at
the highest rate per annum applicable to Revolving Loans hereunder, on demand, from the Companies
without prejudice to any rights which the Agent may have against such Lender hereunder. Nothing
contained in this subsection shall relieve any Lender which has failed to make available its
ratable portion of any borrowing hereunder from its obligation to do so in accordance with the
terms hereof. Nothing contained herein shall be deemed to obligate Agent to make available to any
Company the full amount of a requested advance when the Agent has any notice (written or otherwise)
that any of the Lenders will not advance its ratable portion thereof.



2. On the Settlement Date, the Agent and the Lenders shall each remit to the other, in
immediately available funds, all amounts necessary so as to ensure that, as of the Settlement Date,
the Lenders shall have their proportionate share of all outstanding Obligations.



3. The Agent shall forward to each Lender, at the end of each month, a copy of the account
statement rendered by the Agent to ROA.



4. The Agent shall, after receipt of any interest and fees earned under this Financing
Agreement, promptly remit to the Lenders: (a) their pro rata portion of all fees, provided,
however, that the Lenders (other than CIT in its role as Lender and as Agent) shall (x) not share
in the Collateral Management Fee or Documentation Fees and (y) receive their share of the Loan
Facility Fee in accordance with their respective agreements with the Agent; and (b) interest
computed at the applicable rate provided for in this Financing Agreement on all outstanding amounts
advanced by the Lenders on each Settlement Date, prior to adjustment, that are subsequent to the
last remittance by the Agent to the Lenders of the Companies interest.



5. (a) Each Company acknowledges that the Lenders, with the consent of the Agent and ROA,
which consent shall not be unreasonably withheld, may sell participations in the loans and
extensions of credit made and to be made hereunder (the “Participants”) for amounts not less than
$1,000,000.00 each. Each Company further acknowledges that in doing so, the Lenders may grant to
such Participants certain rights which would require the Participant’s consent to certain waivers,
amendments and other actions with respect to the provisions of this Financing Agreement, provided
that the consent of any such Participant shall not be required except for matters requiring the
consent of all Lenders hereunder as set forth in Section 13, Paragraph 10 hereof



(b) Each Company authorizes each Lender to disclose to any Participant or purchasing lender
(“Transferee”) and any prospective Transferee any and all financial information in such Lender’s
possession concerning the Companies and their affiliates which has been delivered to such Lender by
or on behalf of any Company pursuant to this Financing Agreement or which has been delivered to
such Lender by or on behalf of any Company in connection with such Lender’s credit evaluation of
the Companies and their affiliates prior to entering into this Financing Agreement.


 


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6. Each Company has made and will, from time to time, make available to the Agent and/or the
Lenders certain financial and other business information (the “Confidential
Information”) relating to its business. By their signatures hereto or to the Assignment and
Transfer Agreement, the Agent and each Lender agree to maintain the confidentiality of all
Confidential Information, and to disclose such information only (a) to officers, directors or
employees of such Agent or Lender and their legal or financial advisors, in each case to the extent
necessary to carry out this Financing Agreement and in the case of CIT, to any direct or indirect
subsidiary, affiliate or parent of The CIT Group/Business Credit Inc., and to JP Morgan Chase Bank
Corporation, (b) to any other Person to the extent the disclosure of such information to such
Person is required in connection with the examination of a Lender’s records by appropriate
authorities, pursuant to court order, subpoena or other legal process or otherwise as required by
law or regulation, and (c) to Transferees or potential Transferees. The Lenders, the Agent,
Transferees and potential Transferees shall not be required to maintain the confidentiality of any
portion of the Confidential Information which (a) is known by such Person or its agents, advisors
or representatives prior to disclosure or (b) becomes generally available to the public provided
that the disclosure of such Confidential Information does not violate a confidentiality agreement
of which the Transferees, potential Transferees, the Agent or the Lender, as the case may be, has
actual knowledge.



7. Each Company hereby agrees that each Lender is solely responsible for its portion of the
Line of Credit and that neither the Agent nor any Lender shall be responsible for, nor assume any
obligations for, the failure of any Lender to make available its portion of the Line of Credit.
Further, should any Lender refuse to make available its portion of the Line of Credit, then another
Lender may, but without obligation to do so, increase, unilaterally, its portion of the Line of
Credit in which event the Companies are so obligated to that other Lender.



8. In the event that the Agent, the Lenders or any one of them is sued or threatened with suit
by any Company, or by any receiver, trustee, creditor or any committee of creditors on account of
any preference, voidable transfer or lender liability issue, alleged to have occurred or been
received as a result of, or during the transactions contemplated under, this Financing Agreement,
then in such event any money paid in satisfaction or compromise of such suit, action, claim or
demand and any expenses, costs and attorneys’ fees paid or incurred in connection therewith,
whether by the Agent, the Lenders or any one of them, shall be shared proportionately by the
Lenders. In addition, any costs, expenses, fees or disbursements incurred by outside agencies or
attorneys retained by the Agent to effect collection or enforcement of any rights in the
Collateral, including enforcing, preserving or maintaining rights under this Financing Agreement
shall be shared proportionately between and among the Lenders to the extent not reimbursed by the
Companies or from the proceeds of Collateral. The provisions of this Paragraph 8 shall not apply to
any suits, actions, proceedings or claims that are unrelated, directly or indirectly, to this
Financing Agreement.



9. Each of the Lenders agrees with each other Lender that any money or assets of any Company
held or received by such Lender, no matter how or when received, shall be applied to the reduction
of the Obligations (to the extent permitted hereunder) after (x) the occurrence of an Event of
Default and (y) the election by the Required Lenders-to accelerate the Obligations. In addition,
each Company authorizes, and the Lenders shall have the right, without notice, upon any amount
becoming due and payable hereunder, to set-off and apply against any and all property held by, or
in the possession of, such Lender the Obligations due such Lenders.


 


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10. CIT shall have the right at any time to assign to one or more commercial banks, commercial
finance lenders or other financial institutions all or a portion of its rights and obligations
under this Financing Agreement (including, without limitation, its obligations under the Line of
Credit, the Revolving Loans, the Term Loans and its rights and obligations with respect to Letters
of Credit). The initial assignments by CIT shall be for amounts not less than $1,000,000.00 each.
Upon execution of an Assignment and Transfer Agreement, (i) the assignee thereunder shall be a
party hereto and, to the extent that rights and obligations hereunder have been assigned to it
pursuant to such assignment, have the rights and obligations of CIT as the case may be hereunder
and (ii) CIT shall, to the extent that rights and obligations hereunder have been assigned by it
pursuant to such assignment, relinquish its rights and be released from its obligations under this
Financing Agreement. Each Company shall, if necessary, execute any documents reasonably required to
effectuate the assignments. No other Lender may assign its interest, in whole or in part, in the
loans and advances and extensions of credit hereunder without (i) the prior written consent of the
Agent and the Agent will give reasonable and good faith consideration to the opinions of ROA as to
such prospective assignee; (ii) the payment to the Agent (solely for the Agent’s account) by the
current or prospective Lender of a $5,000.00 fee for processing the assignment; and (iii) if the
Transferee is a Foreign Lender (as defined in Paragraph 11 below) such Foreign Lender first
complies with the provisions of Paragraph 11 below. Additionally, no other Lender shall assign such
Lender’s interest in the loans and advances and extensions of credit hereunder (or any portion
thereof) unless the interest to be so assigned is not less than $5,000,000.00 or all of the such
Lender’s entire interest in the loans and advances and extensions of credit hereunder.



11. Any Lender organized under the laws of a jurisdiction outside of the United States (a
“Foreign Lender”) shall deliver to Agent and ROA (i) two valid, duly completed copies of IRS Form
1001 or 4224 or successor applicable form, as the case may be, and any other required form,
certifying in each case that such Foreign Lender is entitled to receive payments under this
Financing Agreement without deduction or withholding of any United States federal income taxes, or
(ii) if such Foreign Lender is not a “bank” within the meaning of Section 881(c) (3) (A) of the
Internal Revenue Code and cannot deliver either IRS Form 1001 or 4224 pursuant to clause (i) above,
(A) a duly completed certificate of non-withholding acceptable to ROA and the Agent in their
reasonable discretion (any such certificate, a “Tax Certificate”) and (B) two valid, duly completed
copies of IRS Form W-8 or successor applicable form, as the case may be, to establish an exemption
from United States backup withholding tax. Each such Foreign Lender shall also deliver to Agent and
ROA two further copies of said Form 1001 or 4224 or Form W-8 and a Tax Certificate, or successor
applicable forms, or other manner of required certification, as the case may be, on or before the
date that any such form expires or becomes obsolete or otherwise is required to be resubmitted as a
condition to obtaining an exemption from a required withholding of United States of America federal
income tax or after the occurrence of any event requiring a change in the most recent form
previously delivered by it to ROA and Agent, and such extensions or renewals thereof as may
reasonably be requested by ROA and Agent, certifying (x) in the case of a Form 1001 or 4224 that
such Foreign Lender is entitled to receive payments under this Financing Agreement without
deduction or withholding of any United States federal income taxes, or (y) in the case of a Form
W-8 and a Tax Certificate, establishing an exemption from United States backup withholding tax.


 


-49-









 





SECTION 13. Agency.




1. Each Lender hereby irrevocably designates and appoints CIT as the Agent for the Lenders
under this Financing Agreement and any ancillary loan documents and irrevocably authorizes CIT as
Agent for such Lender, to take such action on its behalf under the provisions of the Financing
Agreement and all ancillary documents and to exercise such powers and perform such duties as are
expressly delegated to the Agent by the terms of this Financing Agreement and all ancillary
documents together with such other powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary elsewhere in this Financing Agreement, the Agent shall not have any
duties or responsibilities, except those expressly set forth herein, or any fiduciary relationship
with any Lender and no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Financing Agreement and the ancillary documents or otherwise
exist against the Agent.



2. The Agent may execute any of its duties under this Financing Agreement and all ancillary
documents by or through agents or attorneys-in-fact and shall be entitled to the advice of counsel
concerning all matters pertaining to such duties.



3. Neither the Agent nor any of its officers, directors, employees, agents, or
attorneys-in-fact shall be (i) liable to any Lender for any action lawfully taken or omitted to be
taken by it or such person under or in connection with the Financing Agreement and all ancillary
documents (except for its or such person’s own negligence or willful misconduct), or (ii)
responsible in any manner to any of the Lenders for any recitals, statements, representations or
warranties made by any Company or any officer thereof contained in the Financing Agreement and all
ancillary documents or in any certificate, report, statement or other document referred to or
provided for in, or received by, the Agent under or in connection with the Financing Agreement and
all ancillary documents or for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of the Financing Agreement and all ancillary documents or for any failure of any
Company to perform its obligations thereunder. The Agent shall not be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, the Financing Agreement and all ancillary documents or to inspect
the properties, books or records of any Company.



4. The Agent shall be entitled to rely, and shall be fully protected in relying, upon any
note, writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram,
telecopy, telex or teletype message, statement, order or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the proper person or persons
and upon advice and statements of counsel (including, without limitation, counsel to ROA),
independent accountants and other experts selected by the Agent. The Agent shall be fully justified
in failing or refusing to take any action under this Financing Agreement and all ancillary
documents unless it shall first receive such advice or concurrence from all of the Lenders, or the
Required Lenders, as the case may be, as it deems appropriate or it shall first be indemnified to
its satisfaction by the Lenders against any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Financing Agreement and all ancillary
documents in accordance with a request from all of the Lenders, or the Required
Lenders, as the case may be, and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders.


 


-50-









 





5. The Agent shall not be deemed to have knowledge or notice of the occurrence of any Default
or Event of Default hereunder unless the Agent has received notice from a Lender or a Company
describing such Default or Event of Default. In the event that the Agent receives such a notice,
the Agent shall promptly give notice thereof to the Lenders. The Agent shall take such action with
respect to such Default or Event of Default as shall be reasonably directed by the Required
Lenders; provided that unless and until the Agent shall have received such direction, the Agent may
in the interim (but shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it shall deem advisable and in the best
interests of the Lenders.



6. Each Lender expressly acknowledges that neither the Agent nor any of its officers,
directors, employees, agents or attorneys-in-fact has made any representations or warranties to it
and that no act by the Agent hereinafter taken, including any review of the affairs of any Company,
shall be deemed to constitute any representation or warranty by the Agent to any Lender. Each
Lender represents to the Agent that it has, independently and without reliance upon the Agent or
any other Lender and based on such documents and information as it has deemed appropriate, made its
own appraisal of, and investigation into, the business, operations, property, financial and other
condition and creditworthiness of the Companies and made, its own decision to enter into this
Financing Agreement. Each Lender also represents that it will, independently and without reliance
upon the Agent or any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Financing Agreement and to make such investigation as it
deems necessary to inform itself as to the business, operations, property, financial and other
condition or creditworthiness of the Companies. The Agent, however, shall provide the Lenders with
copies of all financial statements, projections and business plans which come into the possession
of the Agent or any of its officers, employees, agents or attorneys-in-fact.



7. Each Lender agrees to indemnify the Agent, on a pro rata basis, in its capacity as such (to
the extent not reimbursed by any Company and without limiting the obligation of the Companies to do
so), from and against any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind whatsoever (including negligence on
the part of the Agent) which may at any time be imposed on, incurred by or asserted against the
Agent in anyway relating to, or arising out of, this Financing Agreement or any ancillary documents
or any documents contemplated by or referred to herein or the transactions contemplated hereby or
any action taken or omitted by the Agent under or in connection with any of the foregoing; provided
that no Lender shall be liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting
solely from the Agent’s gross negligence or willful misconduct. The agreements in this Paragraph 7
shall survive the payment of the Obligations.


 


-51-









 





8. CIT may make loans to, and generally engage in any kind of business with, any Company as
though CIT were not the Agent hereunder. With respect to its loans made
or renewed by it or loan obligations hereunder as a Lender, CIT shall have the same rights and
powers, duties and liabilities under this Financing Agreement as any Lender and may exercise the
same as though it was not the Agent and the terms “Lender” and “Lenders” shall include CIT in its
individual capacities.



9. The Agent may resign as Agent upon thirty (30) days’ notice to the Lenders and such
resignation shall be effective upon the appointment of a successor Agent. If the Agent shall resign
as Agent, then the Lenders shall appoint a successor agent for the Lenders whereupon such successor
agent shall succeed to the rights, powers and duties of the Agent and the term “Agent” shall mean
such successor agent effective upon its appointment, and the former Agent’s rights, powers and
duties as Agent shall be terminated, without any other or further act or deed on the part of such
former Agent or any of the parties to this Financing Agreement, provided, however, that the Lenders
shall: (a) notify ROA of the successor Agent and (b) request the consent of ROA to such successor
Agent, which consent shall not be unreasonably withheld. ROA shall be deemed to have consented to
the successor Agent if the Lenders do not receive from ROA, within ten (10) days of the Lenders’
notice to ROA, a written statement of ROA’s objection to the successor Agent. Should ROA not
consent and no acceptable successor Agent is agreed upon within thirty (30) days of the date ROA
advised the Lenders of its objection to the successor Agent, then the Lenders may appoint (without
ROA’s consent) another successor Agent. After any retiring Agent’s resignation hereunder as Agent
the provisions of this Section shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent.



10. Notwithstanding anything contained in this Financing Agreement to the contrary, CIT shall
not, without the prior written consent of all Lenders: (a) amend this Financing Agreement to (i)
increase the Line of Credit, (ii) reduce the interest rates, (iii) reduce or waive (1) any fees in
which the Lenders share hereunder or (2) the repayment of any Obligations due the Lenders, (iv)
extend the maturity of the Obligations or (v) alter or amend (A) this Paragraph 10, (B) the
definitions of Eligible Accounts Receivable, Eligible Inventory, Collateral or Required Lenders, or
the Agent’s criteria for determining compliance with such definitions of eligibility, or (C) the
rates of advance set forth in Paragraph 1 of Section 3 hereof; (b) release Collateral in bulk
without a corresponding reduction in the Obligations to the Lenders; or (c) intentionally make any
Revolving Loan or assist in opening any Letter of Credit hereunder if after giving effect thereto
the total of Revolving Loans and Letters of Credit hereunder would exceed one hundred ten percent
(110%) of the maximum amount available under Sections 3 and 4 hereof. In all other respects the
Agent is authorized to take such actions or fail to take such actions if the Agent, in its
reasonable discretion, deems such to be advisable and in the best interest of the Lenders,
including, but not limited to, the making of an overadvance or the termination of the Financing
Agreement upon the occurrence of an Event of Default unless it is specifically instructed to the
contrary by the Required Lenders.



11. Each Lender agrees that notwithstanding the provisions of Section 11 of this Financing
Agreement, any Lender may terminate this Financing Agreement or the Line of Credit only as of the
fifth or any subsequent Anniversary Date and then only by giving the Agent ninety (90) days prior
written notice thereof. Within thirty (30) days after receipt of any such termination notice, the
Agent shall, at its option, either (i) give notice of termination to ROA hereunder or (ii) purchase
such Lender’s share of the Obligations hereunder for the full amount thereof plus accrued interest
thereon.


 


-52-









 





SECTION 14. General Indemnity.




In addition to the Companies’ agreement to reimburse the Agent for Out-of-Pocket Expenses, but
without duplication, the Companies hereby agree to indemnify the Agent and its officers, directors,
employees, attorneys and agents (each, an “Indemnified Party”) from, and to defend and hold each
Indemnified Party harmless against, any and all losses, liabilities, obligations, claims, actions,
judgments, suits, damages, penalties, costs, fees, expenses (including reasonable attorney’s fees)
of any kind or nature which at any time may be imposed on, incurred by, or asserted against, any
Indemnified Party:



(a) as a result of the Agent’s exercise of (or failure to exercise) any of the Agent’s rights
and remedies hereunder, including, without limitation, (i) any sale or transfer of the Collateral,
(ii) the preservation, repair, maintenance, preparation for sale or securing of any Collateral, and
(iii) the defense of the Agent’s interests in the Collateral (including the defense of claims
brought by a Company, as a debtor-in-possession or otherwise, any secured or unsecured creditors of
a Company, or any trustee or receiver in bankruptcy);



(b) as a result of any environmental pollution, hazardous material or environmental clean-up
relating to the Real Estate, a Company’s operation and use of the Real Estate, and a Company’s
off-site disposal practices;



(c) arising from or relating to (i) the maintenance and operation of any Deposit Account, (ii)
any agreement or document relating to any Deposit Account to which any Indemnified Party is party
and (iii) any action taken (or failure to act) by any Indemnified Party with respect thereto;



(d) in connection with any regulatory investigation or proceeding by any regulatory authority
or agency having jurisdiction over a Company; and



(e) otherwise relating to or arising out of the transactions contemplated by this Financing
Agreement and the other Financing Documents, or any action taken (or failure to act) by any
Indemnified Party with respect thereto;



provided that an Indemnified Party’s conduct in connection with the any of the
foregoing matters does not constitute negligence in any material respect or willful misconduct, as
finally determined by a court of competent jurisdiction. This indemnification shall survive the
termination of this Financing Agreement and the payment and satisfaction of the Obligations. The
Agent may from time to time establish a reserve against Availability in connection with this
indemnity as the Agent may deem advisable in the exercise of its reasonable business judgment, and
upon termination of this Financing Agreement, the Agent may hold such reserves as cash reserves as
security for this indemnity.



SECTION 15. Miscellaneous.




1. Each Company hereby waives diligence, demand, presentment and protest and any notices
thereof as well as notice of nonpayment. No delay or omission of the Agent or any Lender to
exercise any right or remedy hereunder, whether before or after the happening of any Event of
Default, shall impair any such right or shall operate as a waiver thereof or as a
waiver of any such Event of Default. No single or partial exercise by the Agent or any Lender
of any right or remedy precludes any other or further exercise thereof, or precludes any other
right or remedy.


 


-53-









 





2. This Financing Agreement and the documents executed and delivered in connection therewith
constitute the entire agreement between the Companies, the Lenders and the Agent; supersedes any
prior agreements; can be changed only by a writing signed by the Companies, the Agent or the
Required Lenders, as applicable; and shall bind and benefit the parties thereto and their
respective successors and assigns.



3. In the event that any Lender shall have determined in the exercise of its reasonable
business judgement subsequent to the date of execution of this Financing Agreement that any
applicable law, rule, regulation or guideline regarding capital adequacy, or change therein, or any
change in the interpretation or administration thereof, or compliance by such Lender with any
request or directive regarding capital adequacy (whether or not having the force of law) of any
such authority, central bank or comparable agency, has or would have the effect of reducing the
rate of return on such Lender’s capital as a consequence of its obligations hereunder to a level
below that which such Lender could have achieved but for such adoption, change or compliance
(taking into consideration the Lender’s policies with respect to capital adequacy) by an amount
reasonably deemed by the Lender to be material, then, from time to time, ROA shall pay no later
than five (5) Business Days following demand to such Lender such additional amount or amounts as
will compensate such Lender for such reduction. In determining such amount or amounts, such Lender
may use any reasonable averaging or attribution methods. The protection of this Paragraph 3 shall
be available to such Lenders regardless of any possible contention of invalidity or inapplicability
with respect to the applicable law, regulation or condition. A certificate of any Lender setting
forth such amount or amounts as shall be necessary to compensate such Lender with respect to this
Paragraph 3 and the calculation thereof when delivered to ROA shall be conclusive absent manifest
error. Notwithstanding anything in this Paragraph 3 to the contrary, in the event any Lender has
exercised its rights pursuant to this Paragraph 3, and subsequent thereto determines that the
additional amounts paid exceeds the amount which such Lender actually required pursuant hereto, the
excess, if any, shall be returned to ROA by such Lender.



4. In the event that any applicable law, treaty or governmental regulation, or any change
therein or in the interpretation or application thereof, or compliance by any Lender with any
request or directive (whether or not having the force of law) from any central bank or other
financial, monetary or other authority, shall:



(a) subject any Lender to any tax of any kind whatsoever with respect to this Financing
Agreement or change the basis of taxation of payments of principal, fees, interest or any other
amount payable hereunder or under any other documents (except for changes in the rate of tax on the
overall net income of such Lender by the federal government or the jurisdiction in which it
maintains its principal office);



(b) impose, modify or hold applicable any reserve, special deposit, assessment or similar
requirement against assets held by, or deposits in or for the account of, advances or loans by, or
other credit extended by, any office of such Lender by reason of or in
respect to this Financing Agreement including (without limitation) pursuant to Regulation D of
the Board of Governors of the Federal Reserve System; or


 


-54-









 





(c) impose on such Lender any other condition with respect to this Financing Agreement or any
other document, and the result of any of the foregoing is to increase the cost to the Lender of
making, renewing or maintaining its loans hereunder by an amount that such Lender deems to be
material in the exercise of its reasonable business judgement or to reduce the amount of any
payment (whether of principal, interest or otherwise) in respect of any of the loans by an amount
that such Lender deems to be material in the exercise of its reasonable business judgement, then,
in any case ROA shall pay such Lender, within five (5) Business Days following its demand, such
additional cost or such reduction, as the case may be. The Lender shall certify the amount of such
additional cost or reduced amount to ROA and the calculation thereof and such certification shall
be conclusive absent manifest error. Notwithstanding anything in this subparagraph to the contrary,
in the event any Lender has exercised its rights pursuant to this subparagraph, and subsequent
thereto determines that the additional amounts paid exceeds the amount which the Lender actually
required pursuant hereto, the excess, if any, shall be returned to ROA by such Lender.



5. In no event shall any Company, upon demand for payment of any indebtedness relating hereto,
by acceleration of the maturity thereof, or otherwise, be obligated to pay interest and fees in
excess of the amount permitted by law. Regardless of any provision herein or in any agreement made
in connection herewith, neither the Agent nor the Lenders shall be entitled to receive, charge or
apply, as interest on any indebtedness relating hereto, any amount in excess of the maximum amount
of interest permissible under applicable law. If the Agent or any Lender ever receives, collects or
applies any such excess, it shall be deemed a partial repayment of principal and treated as such;
and if principal is paid in full, any remaining excess shall be refunded to ROA. This Paragraph 5
shall control every other provision hereof and of any other agreement made in connection herewith.



6. If any provision hereof or of any other agreement made in connection herewith is held to be
illegal or unenforceable, such provision shall be fully severable, and the remaining provisions of
the applicable agreement shall remain in full force and effect and shall not be affected by such
provision’s severance. Furthermore, in lieu of any such provision, there shall be added
automatically as a part of the applicable agreement a legal and enforceable provision as similar in
terms to the severed provision as may be possible.



7. The Companies, the Agent and the Lenders acknowledge that the financial covenants are based
on GAAP as in effect on the date of this Financing Agreement. Furthermore, with respect to the
financial covenants, financial statements and covenant compliance testing, notwithstanding any
changes in GAAP, are to be prepared, or tested, as the case may be, in accordance with GAAP as in
effect on the date of this Financing Agreement. Should subsequent changes in GAAP impose an undue
burden on the Companies to report and/or test in accordance with GAAP as in effect on the date
hereof, then the Agent and the Companies agree that they will reasonably, diligently and in good
faith attempt to renegotiate the aforesaid covenants, provided, however, that until such time as
the covenants are so amended, the Companies will report and/or test, as the case may be, in
accordance with GAAP as in effect on the date hereof.


 


-55-









 





8. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH COMPANY, EACH LENDER AND THE AGENT EACH
HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THE FINANCING DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREUNDER. EACH COMPANY HEREBY
IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO SERVICE OF PROCESS BY CERTIFIED OR
REGISTERED MAIL, RETURN RECEIPT REQUESTED. IN NO EVENT WILL THE AGENT OR ANY LENDER BE LIABLE FOR
LOST PROFITS OR OTHER SPECIAL OR CONSEQUENTIAL DAMAGES.



9. Except as otherwise herein provided, any notice or other communication required hereunder
shall be in writing (messages sent by e-mail or other electronic transmission (other than by
telecopier) shall not constitute a writing, however any signature on a document or other writing
that is transmitted by e-mail or telecopier shall constitute a valid signature for purposes
hereof), and shall be deemed to have been validly served, given or delivered when received by the
recipient if hand delivered, sent by commercial overnight courier or sent by facsimile, or three
(3) Business Days after deposit in the United States mail, with proper first class postage prepaid
and addressed to the party to be notified as follows:




	 	(a)	 	if to the Agent or CIT, at:







The CIT Group/Business Credit, Inc.

11 West 42nd Street

New York, New York 10036

Attn: Jeffrey Iervese

Facsimile No.: (212) 461-7760




with a copy to:




Blank Rome LLP

405 Lexington Avenue

New York, New York 10174

Attn: Robert B. Stein, Esq.

Facsimile No.: (917) 332-3750




	 	(b)	 	if to any Company at:







Rock of Ages Corporation

772 Granitville Road

Barre, Vermont 05654

Attn: Chief Executive Officer

Facsimile No.: (603) 225-4801



or to such other address as any party may designate for itself by like notice.



10. THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS FINANCING AGREEMENT AND THE OTHER
FINANCING DOCUMENTS SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK EXCEPT TO THE
EXTENT THAT ANY OTHER FINANCING DOCUMENT INCLUDES AN EXPRESS ELECTION TO BE GOVERNED BY THE
LAWS OF ANOTHER JURISDICTION.


 


-56-









 





11. Upon the date hereof, all of the terms and conditions set forth in the Existing Financing
Agreement (including, without limitation, representations and warranties, covenants, events of
default, terms of repayment, and interest and fees in respect thereof), as such terms exist
immediately prior to giving effect to this Financing Agreement, are amended and restated hereby;
provided, however, that obligations, liabilities and indebtedness of the Companies
existing under the Existing Financing Agreement (the “Existing Debt”) continue in full force and
effect and the liens and security interests securing payment and performance thereof are continuing
but shall now, in each case, be governed by the terms of this Financing Agreement and the other
Financing Documents. No novation of the Existing Debt shall be deemed to have occurred by virtue
of the amendment and restatement of the Existing Financing Agreement, and by its signature below,
each Company confirms that it continues to be indefeasibly jointly and severally liable for the
payment and performance when due of the Existing Debt. No action or inaction by the Agent of any
Lender prior to the date of this Financing Agreement shall be deemed to have established a course
of conduct between the parties hereto. All rights and obligations of the Companies, the Agent and
the Lenders shall be solely as set forth in this Financing Agreement and the other Financing
Documents. The Companies confirm that to the extent that any of the Existing Financing Documents
have not been amended or restated pursuant to the Financing Documents, they remain in full force
and effect and shall be deemed for all purposes to be Financing Documents as used herein.



(Signature Page Follows)



 


-57-









 





IN WITNESS WHEREOF, the parties hereto have caused this Financing Agreement to be executed and
delivered in New York, New York, by their proper and duly authorized officers as of the date set
forth above.



	 	 	 	 	 
	 	THE CIT GROUP/BUSINESS CREDIT, INC.,

as the Agent

 	 
	 	By:  	/s/ Jefferey Iervese
 	 
	 	 	Name:  	Jeffrey Iervese 	 
	 	 	Title:  	Assistant Vice President 	 
	 



	 	 	 	 	 
	 	THE CIT GROUP/BUSINESS CREDIT, INC.,

as a Lender

 	 
	 	By:  	/s/ Jeffrey Iervese
 	 
	 	 	Name:  	Jeffrey Iervese 	 
	 	 	Title:  	Assistant Vice President 	 
	 



	 	 	 	 	 
	 	CHITTENDEN TRUST COMPANY,

as a Lender

 	 
	 	By:  	/s/ Mark T. Wahl
 	 
	 	 	Name:  	Mark T. Wahl 	 
	 	 	Title:  	Vice President 	 
	 



	 	 	 	 	 
	 	ROCK OF AGES CORPORATION

CAROLINA QUARRIES, INC.

PENNSYLVANIA GRANITE CORP.

KEITH MONUMENT COMPANY LLC

ROCK OF AGES MEMORIALS, INC.

SIOUX FALLS MONUMENT CO.

 	 
	 	By:  	/s/ Kurt M. Swenson
 	 
	 	 	Name:  	Kurt M. Swenson 	 
	 	 	Title:  	Chairman and CEO 	 
	 



Signature Page to Amended and Restated Financing Agreement




 


 









 





SCHEDULE I




	 	 	 	 	 	 	 	 	 	 	 
	 	 	Applicable Increment	 	Applicable Increment	 	Applicable Increment	 	Applicable Increment	 	Applicable
	 	 	for Revolving Loans	 	for Revolving Loans	 	for a Term Loan bearing	 	for a Term Loan	 	Increment
	Funded Debt to	 	bearing interest based	 	bearing interest	 	interest based on the	 	bearing interest	 	for Letters of
	Net Worth Ratio	 	on the Chase Bank Rate	 	based on Libor	 	Chase Bank Rate	 	based on Libor	 	Credit
	 	 	 	 	 	 	 	 	 	 	 
	< 0.5 to 1.0
	 	-0.25%
	 	1.75%
	 	0.00%
	 	2.00%
	 	1.25%
	3 0.5 to 1.0 and < 1.0 to 1.0
	 	0.00%
	 	2.00%
	 	0.25%
	 	2.25%
	 	1.25%
	3 1.0 to 1.0 and < 1.5 to 1.0
	 	0.25%
	 	2.25%
	 	0.50%
	 	2.50%
	 	1.38%
	3 1.5 to 1.0
	 	0.50%
	 	2.50%
	 	0.75%
	 	2.75%
	 	1.50%





 


 









 





EXHIBIT A




TERM LOAN PROMISSORY NOTE




			
	 	 	 
	$                    
	 	October    , 2007






FOR VALUE RECEIVED, the undersigned, ROCK OF AGES CORPORATION, a Delaware corporation, CAROLINA
QUARRIES, INC., a Delaware corporation, PENNSYLVANIA GRANITE CORP., a Pennsylvania corporation,
KEITH MONUMENT COMPANY LLC, a limited liability company formed under the laws of the State of
Delaware, ROCK OF AGES MEMORIALS INC., a Delaware corporation and SIOUX FALLS MONUMENT CO., a South
Dakota corporation, and such other subsidiaries or affiliates of the foregoing as the Lenders, by
unanimous consent, permit to become parties to the Financing Agreement referred to below
(collectively, the “Companies”) jointly and severally promise to pay to the order of THE CIT
GROUP/BUSINESS CREDIT, INC. (the “Agent”) as Agent for itself and the other lenders that are, or
may be, pursuant to the terms of the Financing Agreement referred to below, lenders to the
Companies, at its office located at 11 West 42nd Street, New York, New York 10036, in
lawful money of the United States of America and in immediately available funds, the principal
amount of $                     which shall be due and payable in the amounts and on the dates set forth
in the Financing Agreement (as defined below).



Each Company further agrees to pay interest at said office, in like money, on the unpaid principal
amount owing hereunder from time to time from the date hereof on the date and at the rate specified
in Section 8 of the Financing Agreement.



If any payment on this Term Loan Promissory Note (this “Note”) becomes due and payable on a day
other than a Business Day, the maturity thereof shall be extended to the next succeeding Business
Day, and with respect to payments of principal, interest thereon shall be payable at the then
applicable rate during such I extension.



This Note evidences a Term Loan under, and is a Term Loan Promissory Note referred to in, that
certain Amended and Restated Financing Agreement, dated as of October    , 2007 (the “Financing
Agreement”) by and among the Companies, the Agent and the lenders that are now, or in the future, a
party thereto, and is subject to, and entitled to, all provisions and benefits thereof and is
subject to optional and mandatory prepayment, in whole or in part, as provided therein.



Upon the occurrence of any one or more of the Events of Default specified in the Financing
Agreement or upon termination of the Financing Agreement, all amounts then remaining unpaid on this
Note may become, or be declared to be, at the sole election of the Agent, or at the direction of
the Required Lenders, immediately due and payable as provided in the Financing Agreement.


 


A-1









 





	 	 	 	 	 
	 	ROCK OF AGES CORPORATION

CAROLINA QUARRIES, INC.

PENNSYLVANIA GRANITE CORP.

KEITH MONUMENT COMPANY LLC

ROCK OF AGES MEMORIALS, INC.

SIOUX FALLS MONUMENT CO.

 	 
	 	By:  	 	 
	 	 	Name:  	Kurt M. Swenson 	 
	 	 	Title:  	Chairman and CEO 	 
	 




 


A-2









 







EXHIBIT B




ASSIGNMENT AND TRANSFER AGREEMENT




Dated:                     , 20   





Reference is made to that certain Amended and Restated Financing Agreement, dated as of
October    , 2007 (as amended, supplemented, restated or otherwise modified from time to time, the
“Financing Agreement”), among ROCK OF AGES CORPORATION (“ROA”), a Delaware corporation, with a
principal place of business at 772 Graniteville Road, Graniteville, Vermont 05654, certain of its
subsidiaries and affiliates party thereto, and such other subsidiaries or affiliates of the
foregoing as the Lenders, by unanimous consent, permit to become parties to the Financing Agreement
(collectively, the “Companies”), the Lenders named therein, and The CIT Group/Business Credit,
Inc., as Agent for the Lenders (the “Agent”). Capitalized terms used herein and not otherwise
defined shall have the meanings assigned to such terms in the Financing Agreement. This Assignment
and Transfer Agreement, between the Assignor (as defined and set forth on Schedule I hereto and
made a part hereof) and the Assignee (as defined and set forth on Schedule 1 hereto and made a part
hereof) is dated as of the Effective Date (as set forth on Schedule 1 hereto and made a part
hereof).



12. The Assignor hereby irrevocably sells and assigns to the Assignee without recourse to the
Assignor, and the Assignee hereby irrevocably purchases and assumes from the Assignor without
recourse to the Assignor, as of the Effective Date, an undivided interest (the “Assigned Interest”)
in and to all the Assignor’s rights and obligations under the Financing Agreement respecting those,
and only those, financing facilities contained in the Financing Agreement as are set forth on
Schedule 1 (collectively, the “Assigned Facilities” and individually, an “Assigned Facility”), in a
principal amount for each Assigned Facility as set forth on Schedule 1.



13. The Assignor (i) makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in connection with the
Financing Agreement or any other instrument, document or agreement executed in conjunction
therewith (collectively the “Ancillary Documents”) or the execution, legality, validity,
enforceability, genuiness, sufficiency or value of the Financing Agreement, any Collateral
thereunder or any of the Ancillary Documents furnished pursuant thereto, other than that it is the
legal and beneficial owner of the interest being assigned by it hereunder and that such interest is
free and clear of any adverse claim and (ii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Companies or any guarantor or the
performance or observance by the Companies or any guarantor of any of their respective obligations
under the Financing Agreement or any of the Ancillary Documents furnished pursuant thereto.



14. The Assignee (i) represents and warrants that it is legally authorized to enter into this
Assignment and Transfer Agreement; (ii) confirms that it has received a copy of the Financing
Agreement, together with the copies of the most recent financial statements of the Companies, and
such other documents and information as it has deemed appropriate to make its own credit analysis;
(iii) agrees that it will, independently and without reliance upon the Agent,



 


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the Assignor or any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or not taking action
under the Financing Agreement; (iv) appoints and authorizes the Agent to take such action as agent
on its behalf and to exercise such powers under the Financing Agreement as are delegated to the
Agent by the terms thereof, together with such powers as are reasonably incidental thereto; (v)
agrees that it will be bound by the provisions of the Financing Agreement and will perform in
accordance with its terms all the obligations which by the terms of the Financing Agreement are
required to be performed by it as Lender; and (vi) if the Assignee is organized under the laws of a
jurisdiction outside the United States, attaches the forms prescribed by the Internal Revenue
Service of the United States certifying as to the Assignee’s exemption from United States
withholding taxes with respect to all payments to be made to the Assignee under the Financing
Agreement or such other documents as are necessary to indicate that all such payments are subject
to such tax at a rate reduced by an applicable tax treaty.



15. Following the execution of this Assignment and Transfer Agreement, such agreement will be
delivered to the Agent for acceptance by it and the Companies, effective as of the Effective Date.



16. Upon such acceptance, from and after the Effective Date, the Agent shall make all payments
in respect of the Assigned Interest (including payments of principal, interest, fees and other
amounts, except as otherwise provided in the Financing Agreement) to the Assignee, whether such
amounts have accrued prior to the Effective Date or accrue subsequent to the Effective Date. The
Assignor and Assignee shall make all appropriate adjustments in payments for periods prior to the
Effective Date made by the Agent or with respect to the making of this assignment directly between
themselves.



17. From and after the Effective Date, (i) the Assignee shall be a party to the Financing
Agreement and, to the extent provided in this Assignment and Transfer Agreement, have the rights
and obligations of a Lender thereunder, and (ii) the Assignor shall, to the extent provided in this
Assignment and Transfer Agreement, relinquish its rights and be released from its obligations under
the Financing Agreement.



18. THIS ASSIGNMENT AND TRANSFER AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.



IN WITNESS WHEREOF, the parties hereto have caused this Assignment and Acceptance to be
executed by their respective duly authorized officers on Schedule 1 hereto.


 


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Schedule 1 to Assignment and Transfer Agreement




	 	 	 	 	 
	Name of Assignor:

	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Name of Assignee:
	 	 	 	 
	 

	 	 	 	 






	 	 	 	 	 	 	 	 	 
	Effective Date of Assignment:

	 	 	 	, 20
	 	 	 	 
	 

	 	 
	 	 	 	 	 	 






	 	 	 	 	 
	 	 	 	 	Percentage Assigned of Each Facility
	 	 	 	 	(shown as a percentage of aggregate
	 	 	Principal Amount (or,	 	original principal amount (or, with
	 	 	with respect to Letters	 	respect to Letters of Credit, face
	Assigned Facilities	 	of Credit, face amount)	 	amount) of all Lenders)
	 
	 	 	 	 
	Term Loans

	 	$
 _____ 

	 	
 _____ 
%
	 
	 	 	 	 
	Revolving Loans

	 	$
 _____ 

	 	
 _____ 
%
	 
	 	 	 	 
	Letter of Credit
participation
interest

	 	$
 _____ 

	 	
 _____ 
%
	 
	 	 	 	 
	Total

	 	$
 _____ 

	 	
 _____ 
%
	 
	 	 	 	 
	Fees:
	 	 	 	 
	 
	 	 	 	 
	Rates:
	 	 	 	 





 


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Accepted:



	 	 	 	 	 	 	 
	THE CIT GROUP/BUSINESS CREDIT, INC.	 	 	 	 
	 	 	 	 	 
	as Agent	 	as Assignor
	 
	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 
	Name:

	 	 	 	Name:	 	 
	Title:

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	ROCK OF AGES CORPORATION	 	 	 	 
	 	 	 	 	 
	(a “Company”)	 	as Assignee
	 
	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 
	Name:

	 	 	 	Name:	 	 
	Title:

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	KEITH MONUMENT COMPANY LLC	 	PENNSYLVANIA GRANITE CORP.
	(a “Company”)	 	(a “Company”)
	 
	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 
	Name:

	 	 	 	Name:	 	 
	Title:

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	CAROLINA QUARRIES, INC.	 	ROCK OF AGES MEMORIALS, INC.
	(a “Company”)	 	(a “Company”)
	 
	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 
	Name:

	 	 	 	Name:	 	 
	Title:

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	SIOUX FALLS MONUMENT CO.	 	 	 	 
	(a “Company”)	 	 	 	 
	 
	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	Name:
	 	 	 	 	 	 
	Title:
	 	 	 	 	 	 







 


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EXHIBIT C




BORROWING BASE CERTIFICATE




(See Attached)




 


C-1









 







ANNEX I




(See Attached)