** EXHIBIT10.9                                                                                                                                                  Royal Bank of Canada**

Business Banking Centre

1 Place Ville-Marie, M-1

Montreal, Quebec H3C 3B5

**Private and Confidential**

 

October 26, 2009

 

Mr. Donald Labonte

President

**Rockof Ages Canada Inc.**

4,Rock of Ages Street

Stanstead, Quebec

JOB 3E2

 

DearSir:

 

ROYALBANK OF CANADA (the **"Bank")**hereby confirms the credit facilitiesdescribed below (the **"Credit Facilities")**subject to the terms andconditions set forth below and in the attached Terms & Conditions andSchedules (collectively the **"Agreement")**This Agreement supersedes andcancels the existing agreement dated May 20, 2008 Any amount owing by theBorrower to the Bank under such previous agreement is deemed to be a Borrowingunder this Agreement. Any and all security that has been delivered to the Bank andis set forth as Security below, shall remain in full force and effect, isexpressly reserved by the Bank and shall apply in respect of all obligations ofthe Borrower under the Credit Facilities. Unless otherwise provided, all dollaramounts are in Canadian currency.

 

**BORROWER**

 

Rockof Ages Canada Inc. (the **"Borrower")**

 

**CREDITFACILITIES**

** **

**Facility(1):    **$2,500,000 revolving demandfacility by way of:

 

           a)          RBP based loans **("RBPLoans")**

 

| Revolve in increments of: | $10,000 | Minimum retained balance: | Not Applicable |
|---------------------------|---------|---------------------------|----------------|
| Revolved by:              | Bank    | Interest rate (per annum) | RBP + 0.50%    |

 

            b)         RBUSBRBased loans in US currency **("RBUSBR Loans")**

 

| Revolve in increments of: | $10,000 | Minimum retained balance: | Not Applicable |
|---------------------------|---------|---------------------------|----------------|
| Revolved by:              | Bank    | Interest rate (per annum) | RBUSBR + 0.50% |

 

            c)         Bankers'Acceptances **("BAs")**

 

| Acceptance fee (per annum): | 3% |
|-----------------------------|----|

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Rock of Ages Canada Inc.                           -2-                                                   October26, 2009

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            d)         Liborbased loans in US currency **("Libor Loans")**

 

| Interest rate (per annum) | Libor + 1% |
|---------------------------|------------|

 

e)         Letters of Credit in Canadian currency orUS currency maximum $750,000 **("LCS")**

 

| Fees to be advised on a  transaction-by-transaction basis.  Fees and drawings to be charged to  Borrower's accounts. |
|---------------------------------------------------------------------------------------------------------------------------|

**Availability**

TheBorrower may borrow, convert, repay and reborrow up to the amount of thisfacility provided this facility is made available at the sole discretion of theBank and the Bank may cancel or restrict the availability of any unutilizedportion at any time and from time to time.

Inthe event the aggregate Borrowings outstanding under this facility are inexcess of $500,000, the aggregate Borrowings outstanding under this facilitymust not exceed at any time the aggregate of the following less Potential PriorRanking Claims (the **"Borrowing Limit"):**

a)   **75%**ofGood Canadian/US Accounts Receivable;

b)   **90%**ofGood EDC Accounts Receivable;

c)   to a maximum of **$1,550,000**increasing to **$1,880,000**for the months of January to April of each year, **50%**of the lesserof cost or net realizable value of Unencumbered Inventory and **25%**of the work in progress valued at lesser of cost or net realizable value.

**Repayment**

Notwithstandingcompliance with the covenants and all other terms and conditions of thisAgreement, and regardless of the maturities of any outstanding instruments orcontracts, Borrowings under this facility are repayable on demand.

**General Account**

TheBorrower shall establish current accounts with the Bank in each of Canadiancurrency and US currency (each a **"General Account")**for the conduct ofthe Borrower's day-to-day banking business. The Borrower authorizes the Bankdaily or otherwise as and when determined by the Bank, to ascertain the balanceof each General Account and:

a)   if such position is a debitbalance the Bank may, subject to the revolving increment amount and minimumretained balance specified in this Agreement, make available a Borrowing by wayof RBP Loans, or RBUSBR Loans as applicable, under this facility;

b)   if such position is a creditbalance, where the facility is indicated to be Bank revolved, the Bank may,subject to the revolving increment amount and minimum retained balancespecified in this Agreement, apply the amount of such credit balance or anypart as a repayment of any Borrowings outstanding by way of RBP Loans, orRBUSBR Loans as applicable, under this facility.

Facility (2):     $4,000,000non-revolving term facility by way of Fixed Rate Term Loans **("FRT Loans")**Interestrate (per annum) to be determined

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Rock of Ages Canada Inc.                           -3-                                                   October26, 2009

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**Availability**

 

TheBorrower may borrow up to the amount of this term facility provided thisfacility is made available at the sole discretion of the Bank and the Bank maycancel or restrict availability of any unutilized portion of this facility atany time from time to time.

**Repayment**

| Payment Amount:                                       | To be determined at  drawdown | Payment Frequency:               | Monthly               |
|-------------------------------------------------------|-------------------------------|----------------------------------|-----------------------|
| Payment Type:                                         | Blended                       | First payment date:              | 30 days from drawdown |
| Repayable in full on:                                 | As selected by the Borrower   | Remaining Amortization  (months) | 72                    |
| Amount eligible for  prepayment of FRT Loan:  0% |

**OTHER FACILITIES**

TheCredit Facilities are in addition to the following facilities (the **"OtherFacilities").**The Other Facilities will be governed by this Agreement andseparate agreements between the Borrower and the Bank. In the event of aconflict between this Agreement and any such separate agreement, the terms ofthe separate agreement will govern.

a)   VISA Business to a maximum amount of $75,000;

b)   Foreign Exchange Forward Contracts outstandingfrom time to time as governed by terms and conditions detailed in attachedSchedule "D".

**FEES:**

| **One Time Fees:**

Payable upon acceptance of  this Agreement or as agreed upon between the Borrower and the Bank.

Negotiation Fee:  $10,000 | **Monthly Fees:**

Payable in arrears on the  same day of each month.

Monthly  Management Fee (margined):  $100 in Canadian currency and $100 in US currency  when the aggregate Borrowings outstanding under the facility (1) are in  excess of $500,000

Standby Fees:

Standby fee of 0.15% on  unutilized portion of Facility (1) |
|-----------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**SECURITY**

 

Securityfor the Borrowings and all other obligations of the Borrower to the Bank(collectively, the **"Security"**), shall include:

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Rock of Ages Canada Inc.                           -4-                                                   October26, 2009

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a)     Assignment under section 427 ofthe *Bank Act*(Canada) constituting a first charge on raw materials,goods in process and finished products of the Borrower;

b)     Movable Hypothec without deliveryin the amount of $4,000,000 signed by the Borrower constituting a first rankinghypothec in the movable property of the Borrower described as all present andfuture debt and claims and all present and future assets;

c)     Security agreement (chattelmortgage) signed by the Borrower constituting a first ranking security intereston accounts receivable;

d)     Movable Hypothec without deliveryin the amount of $4,000,000 signed by the Borrower constituting a secondranking hypothec in the movable property of the Borrower described as theuniversality of assets;

e)     Immovable hypothec in the amountof $4,000,000 signed by the Borrower constituting a first ranking security onthe lands and improvements located at 4, Rock of Ages, Stanstead, Quebec, 225,Beaudoin Road, Stanstead, Quebec, 279, Montee des Carrieres, Guenette, Quebecand 315, De Cedarville Road, Ogden, Quebec;

f)      Subordination of Claims signed byRock of Ages Corporation and supported by a directors' resolution.

**FINANCIAL COVENANTS**

Withoutaffecting or limiting the right of the Bank to terminate or demand payment of,or cancel or restrict availability of any unutilized portion of any demand orother discretionary facility and while any availability exists under anyfacility which is not a discretionary facility or any Borrowings remainoutstanding under any term facility, the Borrower covenants and agrees with theBank that the Borrower will:

a)   Maintain to be measuredas at the end of each fiscal year:

i     Tangible Net Worth of at least$4,500,000 at December 31, 2009;

ii.   a Debt Service Coverage ratio ofnot less than 1.20 : 1 ending December 31, 2009.

**REPORTING REQUIREMENTS**

The Borrower will provide the following to the Bank:

a)   monthly Borrowing Limit Certificate includingreports described therein when borrowings outstanding under Facility (1) are inexcess of $500,000 substantially in the form of Schedule "G" signed on behalfof the Borrower by any one of the Chief Executive Officer, the Vice-PresidentFinance, the Treasurer, the Comptroller, the Chief Accountant or any otheremployee of the Borrower holding equivalent office, within 20 days of eachmonth end;

b)   annual auditedfinancial statements for the Borrower, within 120 days of each fiscal year end;

c)   quarterly in-housefinancial statements for the Borrower, within 30 days of each fiscal quarterend;

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Rock of Ages Canada Inc.                           -5-                                                   October26, 2009

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d)   annual forecasted balance sheet and income andcash flow statements for the Borrower, basis for the next following fiscalyear, within 120 days of each fiscal year end;

e)   such other financi

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al and operating statements and reports as and when the Bank may reasonablyrequire.

**CONDITIONS PRECEDENT**

Inno event will the Credit Facilities or any part thereof be available unless theBank has received:

a)     a duly executed copy of thisAgreement;

b)     the Security provided for herein,registered, as required, to the satisfaction of the Bank;

c)     such financial and otherinformation or documents relating to the Borrower or any Guarantor ifapplicable as the Bank may reasonably require;

d)     a short form environmentalquestionnaire completed by the Borrower in respect of the property located at315, Cedarville Road, Ogden, Quebec, and for the property located at 279,Montee Des Carrieres, Guenette, Quebec, and containing findings acceptable tothe Bank; and

e)     such other authorizations,approvals, opinions and documentation as the Bank may reasonably require.

Additionally;

f)      all documentation to be receivedby the Bank shall be in form and substance satisfactory to the Bank

**GOVERNING LAW JURISDICTION**

** **

Province of Quebec.

 

 

 

 

 

 

 

 

 

 

 

 

 

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Rock of Ages Canada Inc.                           -6-                                                   October26, 2009

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**ACCEPTANCE**

ThisAgreement is open for acceptance until **December 1,****2009,**afterwhich date it will be null and void, unless extended in writing by the Bank.

 

Royal Bank of Canada

 

 

By: /s/ Rosemarie Maide                      

     Rosemarie Maide, AccountManager

 

We acknowledge andaccept the terms and conditions of this Agreement on this 28th day of December, 2009

 

 

 

**ROCK OF AGES CANADA INC.**

** **

** **

Per: /s/ GabrielOuellet________________________

Name: Gabriel Ouellet

Title: Director ofFinance and Operations

 

 

Per:________________________________________

Name:

Title:

 

I/We have the authority to bindthe Borrower.

 

md\attachments:

Terms and Conditions

Schedules:

§  Definitions

§  Calculation and Payment of Interest and Fees

§  Notice Requirements

§  Additional Borrowing Conditions

§  Borrowing Limit Certificate

 

 

 

 

 

 

 

 

 

 

 

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Rock of Ages Canada Inc.                           -7-                                                   October26, 2009

_____________________________________________________________________________

 

**TERMS AND CONDITIONS**

The Bank is requested by the Borrower to make theCredit Facilities available to the Borrower in the manner and at the rates andtimes specified in this Agreement. Terms defined elsewhere in this Agreementand not otherwise defined in the Terms and Conditions below or the Schedulesattached hereto have the meaning given to such terms as so defined. Inconsideration of the Bank making the Credit Facilities available, the Borroweragrees, with the Bank as follows:

**REPAYMENT**

Amounts outstanding under the Credit Facilities,together with interest, shall become due in the manner and at the rates andtimes specified in this Agreement and shall be paid in the currency of theBorrowing. Unless the Bank otherwise agrees, any payment hereunder must be madein money which is legal tender at the time of payment. In the case of a demandfacility of any kind, the Borrower shall repay all principal sums outstandingunder such facility upon demand including, without limitation, an amount equalto the face amount of all LCs and BAs which are unmatured or unexpired, whichamount shall be held by the Bank as security for the Borrower's obligations tothe Bank in respect of such Borrowings. Where any Borrowings are repayable byscheduled blended payments, such payments shall be applied, firstly, tointerest due, and the balance, if any, shall be applied to principaloutstanding. If any such payment is insufficient to pay all interest then due,the unpaid balance of such interest will be added to such Borrowing, will bearinterest at the same rate, and will be payable on demand or on the date specifiedherein, as the case may be Borrowings repayable by way of scheduled payments ofprincipal and interest shall be so repaid with any balance of such Borrowingsbeing due and payable as and when specified in this Agreement. The Borrowershall ensure that the maturities of instruments or contracts selected by theBorrower when making Borrowings will be such so as to enable the Borrower tomeet its repayment obligations.

**PREPAYMENT**

Where Borrowings are by way of RBP Loans or RBUSBRLoans, the Borrower may prepay such Borrowings in whole or in part without feeor premium.

Where Borrowings are by way of FRT Loans, provided anEvent of Default shall not have occurred and be continuing, the Borrower mayprepay such Borrowings on a non-cumulative basis up to the percentage, asselected by the Borrower for each FRT Loan, of the outstanding principalbalance on the day of prepayment, without fee or premium, once per year duringthe 12 month period from each anniversary date of the Borrowing Prepaymentsgreater than the amounts provided for herein may be made only with the priorwritten consent of the Bank and will be subject to a prepayment fee determinedby the Bank, in its sole discretion.

The prepayment of any Borrowings under a term facilityand/or any term loan will be made in the reverse order of maturity.

**EVIDENCEOF INDEBTEDNESS**

TheBank shall maintain accounts and records (the **"Accounts")**evidencing the Borrowings made available to the Borrower by the Bank under thisAgreement The Bank shall record the principal amount of such Borrowings, thepayment of principal and interest on account of the Borrowings, and all otheramounts becoming due to the Bank under this Agreement. The Accounts constitute,in the absence of manifest error, conclusive evidence of the indebtedness of theBorrower to the Bank pursuant to this Agreement. The Borrower authorizes anddirects the

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Rock of Ages Canada Inc.                           -8-                                                   October26, 2009

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Bank to automatically debit, bymechanical, electronic or manual means, any bank account of the Borrower for allamounts payable under this Agreement, including, but not limited to, therepayment of principal and the payment of interest, fees and all charges for thekeeping of such bank accounts.

**GENERALCOVENANTS**

Withoutaffecting or limiting the right of the Bank to terminate or demand payment of,or cancel or restrict availability of any unutilized portion of, any demand orother discretionary facility, the Borrower covenants and agrees with the Bankthat the Borrower:

a)    will pay all sums of money whendue under the terms of this Agreement;

b)   will immediately advise the Bankof any event which constitutes or which, with notice, lapse of time or both,would constitute a breach of any covenant or other term or condition of thisAgreement or any Security, or in the case of any term facility, an Event ofDefault;

c)   will file all material tax returnswhich are or will be required to be filed by it, pay or make provision forpayment of all material taxes (including interest and penalties) and PotentialPrior-Ranking Claims, which are or will become due and payable and provideadequate reserves for the payment of any tax, the payment of which is beingcontested;

d)   will give the Bank 30 days priornotice in writing of any intended change in its ownership structure and it willnot make or facilitate any such changes without the prior written consent ofthe Bank;

e)   will comply with all ApplicableLaws, including, without limitation, all Environmental Laws;

f)   will immediately advise the Bankof any action requests or violation notices received concerning the Borrowerand hold the Bank harmless from and against any losses, costs or expenses whichthe Bank may suffer or incur for any environment related liabilities existentnow or in the future with respect to the Borrower;

g)   willdeliver to the Bank such financial and other information as the Bank mayreasonably request from time to time, including, but not limited to, thereports and other information set out under Reporting Requirements;

h)   will immediately advise the Bankof any unfavourable change in its financial position which may adversely affectits ability to pay or perform its obligations in accordance with the terms ofthis Agreement;

i)    will keep its assets fully insuredagainst such perils and in such manner as would be customarily insured byPersons carrying on a similar business or owning similar assets;

j)    except for Permitted Encumbrances,will not, without the prior written consent of the Bank, grant, create, assumeor suffer to exist any mortgage, charge, lien, pledge, security interest orother encumbrance affecting any of its properties, assets or other rights;

k)   will not, without the priorwritten consent of the Bank, sell, transfer, convey, lease or otherwise disposeof any of its properties or assets other than in the ordinary course ofbusiness and on commercially reasonable terms;

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Rock of Ages Canada Inc.                           -9-                                                   October26, 2009

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l)    willnot, without the prior written consent of the Bank, guarantee or otherwiseprovide for, on a direct, indirect or contingent basis, the payment of anymonies or performance of any obligations by any other Person, except as may beprovided for herein;

m)  will not, without the priorwritten consent of the Bank, merge, amalgamate, or otherwise enter into anyother form of business combination with any other Person;

n)  will permit the Bank or itsrepresentatives, from time to time, to visit and inspect the Borrower'spremises, properties and assets and examine and obtain copies of the Borrower'srecords or other information and discuss the Borrower's affairs with theauditors, counsel and other professional advisers of the Borrower;

o)   will not use the proceeds of any Credit Facilityfor the benefit or on behalf of any Person other than the Borrower.

**EXPENSES, ETC.**

TheBorrower agrees to pay the Bank all fees, as stipulated in this Agreement. TheBorrower also agrees to pay all fees (including legal fees), costs and expensesincurred by the Bank in connection with preparation, negotiation anddocumentation of this Agreement and any Security and the operation, enforcementor termination of this Agreement and the Security. The Borrower shall indemnifyand hold the Bank harmless against any loss, cost or expense incurred by theBank if any facility under the Credit Facilities is repaid or prepaid otherthan on its Maturity Date. The determination by the Bank of such loss, cost orexpense shall be conclusive and binding for all purposes and shall include,without limitation, any loss incurred by the Bank in liquidating or redeployingdeposits acquired to make or maintain any facility.

**GENERAL INDEMNITY**

TheBorrower hereby agrees to indemnify and hold the Bank and its directors,officers, employees and agents harmless from and against any and all claims,suits, actions, demands, debts, damages, costs, losses, obligations,judgements, charges, expenses and liabilities of any nature which are suffered,incurred or sustained by, imposed on or asserted against any such Person as aresult of, in connection with or arising out of i) any Event of Default orbreach of any term or condition of this Agreement or any Security by the Borroweror any Guarantor if applicable (whether or not constituting an Event ofDefault), ii) the Bank acting upon instructions given or agreements made byelectronic transmission of any type, iii) the presence of Contaminants at, onor under or the discharge or likely discharge of Contaminants from, anyproperties now or previously used by the Borrower or any Guarantor and iv) thebreach of or non compliance with any Applicable Law by the Borrower or anyGuarantor.

**AMENDMENTS AND WAIVERS**

Noamendment or waiver of any provision of this Agreement will be effective unlessit is in writing, signed by the Borrower and the Bank. No failure or delay, onthe part of the Bank, in exercising any right or power hereunder or under anySecurity shall operate as a waiver thereof. Any amendments requested by theBorrower will require review and agreement by the Bank and its counsel. Costsrelated to this review will be for the Borrower's account.

 

 

 

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Rock of Ages Canada Inc.                          -10-                                                  October26, 2009

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**SUCCESSORS ANDASSIGNS**

 

This Agreement shall extend to and be binding upon theparties hereto and their respective heirs, executors, administrators,successors and permitted assigns. The Borrower shall not be entitled to assignor transfer any rights or obligations hereunder, without the consent in writingof the Bank The Bank may assign or transfer all or any part of its rights andobligations under this Agreement to any Person. The Bank may disclose topotential or actual assignees or transferees confidential information regardingthe Borrower and any Guarantor if applicable, (including, any such informationprovided by the Borrower, and any Guarantor if applicable, to the Bank) andshall not be liable for any such disclosure.

 

**GAAP**

** **

Unlessotherwise provided, all accounting terms used in this Agreement shall beinterpreted in accordance with Canadian Generally Accepted AccountingPrinciples in effect from time to time, applied on a consistent basis fromperiod to period. Any change in accounting principles or the application ofaccounting principles, including, without limitation, the use of differentialreporting (or any changes to the selection of differential reporting options)is only permitted with the prior written consent of the Bank.

 

**SEVERABILITY**

** **

The invalidity or unenforceability of any provision ofthis Agreement shall not affect the validity or enforceability of any otherprovision of this Agreement and such invalid provision shall be deemed to beseverable.

 

**GOVERNING LAW**

** **

This Agreement shall be construed in accordance withand governed by the laws of the Province identified in the Governing LawJurisdiction section of this Agreement and the laws of Canada applicabletherein. The Borrower irrevocably submits to the non-exclusive jurisdiction ofthe courts of such Province and acknowledges the competence of such courts andirrevocably agrees to be bound by a judgment of any such court.

 

**DEFAULT BY LAPSE OF TIME**

** **

Themere lapse of time fixed for performing an obligation shall have the effect ofputting the Borrower, or a Guarantor if applicable, in default thereof.

 

**SET-OFF**

 

The Bank is authorized (but not obligated), at anytime and without notice, to apply any credit balance (whether or not then due)in any account in the name of the Borrower, or to which the Borrower isbeneficially entitled (in any currency) at any branch or agency of the Bank inor towards satisfaction of the indebtedness of the Borrower due to the Bankunder the Credit Facilities and the other obligations of the Borrower underthis Agreement. For that purpose, the Bank is irrevocably authorized to use allor any part of any such credit balance to buy such other currencies as may benecessary to effect such application.

 

 

 

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Rock of Ages Canada Inc.                          -11-                                                  October26, 2009

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**NOTICES**

** **

Any notice or demand to be given by the Bank shall begiven in writing by way of a letter addressed to the Borrower If the letter issent by telecopier, it shall be deemed received on the date of transmission,provided such transmission is sent prior to 5:00 p.m. on a day on which theBorrower's business is open for normal business, and otherwise on the next suchday. If the letter is sent by ordinary mail to the address of the Borrower, itshall be deemed received on the date falling five (5) days following the dateof the letter, unless the letter is hand-delivered to the Borrower, in whichcase the letter shall be deemed to be received on the date of delivery. TheBorrower must advise the Bank at once about any changes in the Borrower'saddress.

 

**CONSENT OF DISCLOSURE**

** **

The Borrower hereby grants permission to any Personhaving information in such Person's possession relating to any PotentialPrior-Ranking Claim, to release such information to the Bank (upon its writtenrequest), solely for the purpose of assisting the Bank to evaluate thefinancial condition of the Borrower.

 

**NON-MERGER**

** **

Theprovisions of this Agreement shall not merge with any Security provided to theBank, but shall continue in full force for the benefit of the parties hereto.

 

**JOINT AND SEVERAL**

** **

Where more than one Person is liable as Borrower orGuarantor if applicable for any obligation under this Agreement, then theliability of each such Person for such obligation is joint and several (inQuebec, solidarily) with each other such Person.

 

**LIFE AND DISABILITY INSURANCE**

** **

TheBorrower acknowledges that the Bank has offered it insurance on the Borrowingsunder Business Loan Insurance Plan Policy 51000 ("Policy") issued by Sun LifeAssurance Company of Canada to the Bank and the Borrower hereby waives thisoffer or acknowledges it is ineligible for this offer and acknowledges thatBorrowings are not insured under the Policy as at the date of acceptance ofthis Agreement.

 

If there are any discrepancies between the insurance informationabove, and the Business Loan Insurance Plan documents regarding the Borrowings,the Business Loan Insurance Plan documents govern.

 

Business Loan Insurance Plan premiums, if applicable, are takenwith your scheduled loan payments. In the case of blended payments of principaland interest, as premiums fluctuate based on various factors such as, by way ofexample, the age of the insured and changes to the insured loan balance, a partof the premium payment may be deducted and taken from the scheduled blendedloan payment with the result that the amortization period may increase in thecase of any such loan to which this coverage applies. Refer to the BusinessLoan Insurance Plan application (form 3460 Eng or 53460 Fr) for furtherexplanation and disclosure.

 

 

 

 

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Rock of Ages Canada Inc.                          -12-                                                  October26, 2009

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**COUNTERPART EXECUTION**

** **

This Agreement may be executed in anynumber of counterparts and by different parties in separate counterparts, eachof which when so executed shall be deemed to be an original and all of whichtaken together constitute one and the same instrument.

 

**EMAIL AND FAX TRANSMISSION**

** **

The Bank is entitled to rely on any report or certificate providedto the Bank by the Borrower or any Guarantor as applicable, by way of email orfax transmission as though it were an originally signed document. The Bank isfurther entitled to assume that any communication from the Borrower received byemail or fax transmission is a reliable communication from the Borrower.

 

**REPRESENTATIONS AND WARRANTIES**

** **

The Borrower, represents and warrants to the Bank that:

 

a)    if it is acorporation, it is duly incorporated, validly existing and duly registered orqualified to carry on business in each jurisdiction in which its business orassets are located;

 

b)   the execution,delivery and performance by it of this Agreement have been duly authorized byall necessary actions and do not violate its constating documents or anyApplicable Laws or agreements to which it is subject or by which it is bound;

 

c)   no event has occurredwhich constitutes, or which, with notice, lapse of time, or both, wouldconstitute, an Event of Default or a breach of any covenant or other term orcondition of this Agreement or any Security;

 

d)  there is no claim,action, prosecution or other proceeding of any kind pending or threatenedagainst it or any of its assets or properties before any court oradministrative agency which relates to any non-compliance with anyEnvironmental Laws which, if adversely determined, might have a materialadverse effect upon its financial condition or operations or its ability toperform its obligations under this Agreement or any Security, and there are nocircumstances of which it is aware which might give rise to any such proceedingwhich it has not fully disclosed to the Bank; and

 

e)   it has good andmarketable title to all of its properties and assets, free and clear of anyencumbrances, other than as may be provided for herein.

 

Representationsand warranties are deemed to be repeated as at the time of each Borrowing.

 

**LANGUAGE**

** **

The parties hereto have expressly requested that this Agreementand all related documents, including notices, be drawn up in the Englishlanguage. Les parties ont expressement demande que la presente convention ettous les documents y afferents, y compris les avis, soient rediges en langueanglaise.

 

 

 

 

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Rock of Ages Canada Inc.                          -13-                                                  October26, 2009

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**WHOLE AGREEMENT**

** **

This Agreement and any documents orinstruments referred to in, or delivered pursuant to, or in connection with,this Agreement constitute the whole and entire agreement between the Borrowerand the Bank with respect to the Credit Facilities.

 

**EVENTSOF DEFAULT**

** **

Without affecting or limiting the right of the Bank toterminate or demand payment of, or to cancel or restrict availability of anyunutilized portion of, any demand or other discretionary facility, each of thefollowing shall constitute an **"Event of Default"**which shall entitle theBank, in its sole discretion, to cancel any Credit Facilities, demand immediaterepayment in full of any amounts outstanding under any term facility, togetherwith outstanding accrued interest and any other indebtedness under or withrespect to any term facility, and to realize on all or any portion of anySecurity:

 

a)   failure of the Borrower to pay anyprincipal, interest or other amount when due pursuant to this Agreement;

 

b)   failure of the Borrower, or anyGuarantor if applicable, to observe any covenant, condition or provisioncontained in this Agreement or in any documentation relating hereto or to theSecurity;

 

c)   the Borrower, or any Guarantor ifapplicable, is unable to pay its debts as such debts become due, or is, or isadjudged or declared to be, or admits to being, bankrupt or insolvent;

 

d)   if any proceeding is taken toeffect a compromise or arrangement with the creditors of the Borrower, or anyGuarantor if applicable, or to have the Borrower, or any Guarantor ifapplicable, declared bankrupt or wound up, or to have a receiver appointed forany part of the assets or operations of the Borrower, or any Guarantor ifapplicable, or if any encumbrancer takes possession of any part thereof;

 

e)   if in the opinion of the Bankthere is a material adverse change in the financial condition, ownership oroperation of the Borrower, or any Guarantor if applicable;

 

f)    if any representation or warrantymade by the Borrower, or any Guarantor if applicable, under this Agreement orin any other document relating hereto or under any Security shall be false inany material respect; or

 

g)   if the Borrower, or any Guarantorif applicable, defaults in the payment of any other indebtedness, whether owingto the Bank or to any other Person, or defaults in the performance orobservance of any agreement in respect of such indebtedness where, as a resultof such default, the maturity of such indebtedness is or may be accelerated

 

Should the Bank demand immediate repayment in full ofany amounts outstanding under any term facility due to an Event of Default, theBorrower shall immediately repay all principal sums outstanding under suchfacility and all other obligations in connection with any such term facilityincluding, without limitation, an amount equal to the face amount of all LCsand BAs which are unmatured or unexpired, which amount shall be held by theBank as security for the Borrower's obligations to the Bank in respect of suchBorrowings.

 

 

 

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Rock of Ages Canada Inc.                          -14-                                                  October26, 2009

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**EXCHANGE RATE FLUCTUATIONS**

** **

If, for any reason, the amount ofBorrowings outstanding under any facility, when converted to the EquivalentAmount in Canadian currency, exceeds the amount available under such facility,the Borrower shall immediately repay such excess or shall secure such excess tothe satisfaction of the Bank.

** **

**INCREASEDCOSTS**

** **

The Borrower shall reimburse the Bank for anyadditional cost or reduction in income arising as a result of (i) theimposition of, or increase in, taxes on payments due to the Bank hereunder(other than taxes on the overall net income of the Bank), (ii) the impositionof, or increase in, any reserve or other similar requirement, (iii) theimposition of, or change in, any other condition affecting the CreditFacilities imposed by any Applicable Law or the interpretation thereof.

 

**JUDGEMENT CURRENCY**

 

If for the purpose of obtaining judgement in any courtin any jurisdiction with respect to this Agreement, it is necessary to convertinto the currency of such jurisdiction (the **"Judgement Currency")**anyamount due hereunder in any currency other than the Judgement Currency, thenconversion shall be made at the rate of exchange prevailing on the Business Daybefore the day on which judgement is given. For this purpose "rate of exchange"means the rate at which the Bank would, on the relevant date, be prepared tosell a similar amount of such currency in the Toronto foreign exchange market,against the Judgement Currency, in accordance with normal banking procedures.

 

Inthe event that there is a change in the rate of exchange prevailing between theBusiness Day before the day on which judgement is given and the date of paymentof the amount due, the Borrower will, on the date of payment, pay suchadditional amounts as may be necessary to ensure that the amount paid on suchdate is the amount in the Judgement Currency which, when converted at the rateof exchange prevailing on the date of payment, is the amount then due underthis Agreement in such other currency together with interest at RBP andexpenses (including legal fees on a solicitor and client basis). Any additionalamount due from the Borrower under this section will be due as a separate debtand shall not be affected by judgement being obtained for any other sums dueunder or in respect of this Agreement.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Schedule A

_____________________________________________________________________________________________

Schedule"A" to the Agreement dated October 26, 2009, between Rock of Ages Canada Inc.,as Borrower, and Royal Bank of Canada, as the Bank.

**DEFINITIONS**

Forthe purpose of this Agreement, the following terms and phrases shall have thefollowing meanings:

**"Applicable Laws"**means, with respect to any Person, property, transaction or event, allpresent or future applicable laws, statutes, regulations, rules, orders, codes,treaties, conventions, judgements, awards, determinations and decrees of anygovernmental, regulatory, fiscal or monetary body or court of competentjurisdiction in any applicable jurisdiction;

 

**"Bankers' Acceptance"**or **"BA"**means a bill of exchange, including adepository bill issued in accordance with the Depository Bills and Notes Act(Canada), drawn on the Bank by, and payable to the order of, the Borrower whichhave been accepted by the Bank;

**"Borrowing"**means each use of a Credit Facilityand all such usages outstanding at any time are "Borrowings";

**"Business Day"**meansa day, excluding Saturday, Sunday and any other day which shall be a legalholiday or a day on which banking institutions are closed throughout Canada,and when used in connection with a BA or Libor Loan, a "Business Day" alsoexcludes any day which shall be a legal holiday or a day on which bankinginstitutions are closed in Toronto, Ontario or in the province where theBorrower's accounts are maintained;

**"BankingDay"**means a Business Day on whichdealings in US currency deposits may be carried on by and between leading Banksin the London Interbank Market;

**"Canadian/USAccounts Receivable"**means tradeaccounts receivable of the Borrower owing by Persons whose chief operatingactivities are located in the US or Canada;

**"Contaminant"**includes,without limitation, any pollutant, dangerous substance, liquid waste,industrial waste, hazardous material, hazardous substance or contaminantincluding any of the foregoing as defined in any Environmental Law;

 

**"Debt Service Coverage"**means, for any fiscal period, the ratio of EBITDA tothe total of Interest Expense and scheduled principal payments (made and/or tobe made within the fiscal period being reviewed) in respect of Funded Debt;

 

**"EBITDA"**means,for any fiscal period, net income from continuing operations (excludingextraordinary gains or losses) plus, to the extent deducted in determining netincome, Interest Expense and income taxes accrued during, and depreciation,depletion and amortization expenses deducted for, the period;

 

**"EDC Accounts Receivable"**means trade accounts receivable of the Borrower, wherethe payment has been insured by Export Development Canada ("EDC"), and the Bankhas been provided with a duly executed Direction to Pay on EDC Form **E-6**supportedby a copy of the applicable insurance policy and any renewals thereof;

 

**"Environmental Activity"**means any activity, event or circumstance in respect of a Contaminant,including, without limitation, its storage, use, holding, collection, purchase,accumulation, assessment, generation, manufacture, 

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Schedule A

_____________________________________________________________________________________________

 

construction, processing, treatment,stabilization, disposition, handling or transportation, or its Release into thenatural environment, including movement through or in the air, soil, surfacewater or groundwater;

**"EnvironmentalLaws"**means all Applicable Lawsrelating to the environment or occupational health and safety, or anyEnvironmental Activity;

**"Equity"**meansthe total of share capital, (excluding preferred shares redeemable within oneyear) contributed surplus and retained earnings plus Postponed Debt;

**"EquivalentAmount"**means, with respect to anamount of any currency, the amount of any other currency required to purchasethat amount of the first mentioned currency through the Bank in Toronto, inaccordance with normal banking procedures;

**"FundedDebt"**means, at any time for thefiscal period then ended, all obligations for borrowed money which bearsinterest or to which interest is imputed plus, without duplication, allobligations for the deferred payment of the purchase of property, all capitallease obligations and all indebtedness secured by purchase money securityinterests, but excluding Postponed Debt;

**"GoodCanadian/US Accounts Receivable"**meansCanadian/US Accounts Receivable excluding EDC Accounts Receivable and excluding(i) the entire amount of accounts, any portion of which is outstanding morethan 120 days after billing date, provided that the under 120 day portion maybe included where the over 120 day portion is less than 15% of the amount ofaccounts, or where the Bank has designated such portion as nevertheless good](ii) all amounts due from any affiliate, (iii) bad or doubtful accounts, (iv)accounts subject to any security interest or other encumbrance ranking orcapable of ranking in priority to the Bank's security, (v) the amount of allholdbacks, contra accounts or rights of set-off on the part of any accountdebtor, or (vi) any accounts which the Bank has previously advised to beineligible;

**"GoodEDC Accounts Receivable"**means EDCAccounts Receivable, excluding (i) the entire amount of accounts, any portionof which is outstanding more than 120 days after billing date, provided thatthe under 120 day portion may be included where the over 120 day portion isless than 15% of the amount of accounts, or where the Bank has designated suchportion as nevertheless good, (ii) all amounts due from any affiliate, (iii)bad or doubtful accounts, (iv) accounts subject to any security interest orother encumbrance ranking or capable of ranking in priority to the Bank'ssecurity, (v) the amount of all holdbacks, contra accounts or rights of set-offon the part of any account debtor, or (vi) any accounts which the Bank haspreviously advised to be ineligible;

**"Guarantor"**means any Person who has guaranteedthe obligations of the Borrower under this Agreement;

**"InterestDetermination Date"**means, withrespect to a Libor Loan, the date which is 2 Banking Days before the first dayof the Libor Interest Period applicable to such Libor Loan;

**"InterestExpense"**means, for any fiscalperiod, the aggregate cost of advances of credit outstanding during that periodincluding, without limitation, interest charges, capitalized interest, theinterest component of capital leases, fees payable in respect of letters ofcredit and letters of guarantee and discounts incurred and fees payable inrespect of bankers' acceptances;

**"Letterof Credit"**or "LC" means adocumentary credit issued by the Bank on behalf of the Borrower for the purposeof paying suppliers of goods;

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Schedule A

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**"Libor"**means, with respect to each LiborInterest Period applicable to a Libor Loan, the annual rate of interest(rounded upwards, if necessary, to the nearest whole multiple of one sixteenthof one percent (1/16th%)), at which the Bank, in accordance with its normalpractice, would be prepared to offer deposits to leading banks in the LondonInterbank Market for delivery on the first day of each of such Libor InterestPeriod, for a period equal to each such Libor Interest Period, such depositsbeing in US currency of comparable amounts to be outstanding during such LiborInterest Period, at or about 10:00 am. (Toronto time) on the InterestDetermination Date;

**"LiborInterest Date"**means with respect toany Libor Loan, the last day of each Libor Interest Period and, if the Borrowerselects a Libor Interest Period for a period longer than 3 months, the LiborInterest Date shall be the date falling every 3 months after the beginning ofsuch Libor Interest Period as well as the last day of such Libor InterestPeriod;

**"Libor Interest Period"**means, with respect to any Libor Loan, the initialperiod (subject to availability) of approximately 1 month (or longer wholemultiples of 1 month to and including 6 months as selected by the Borrower andnotified to the Bank by written notice) or such shorter or longer period as theBank in its sole discretion shall make available commencing on the date onwhich such Libor Loan is made or another method of Borrowing is converted to aLibor Loan, as the case may be, and thereafter, while such Libor Loan isoutstanding, each successive period (subject to availability) of 1 month (orlonger whole multiples of 1 month to and including 6 months, as selected by theBorrower and notified to the Bank by written notice) commencing on the last dayof the immediately preceding Libor Interest Period;

**"Maturity Date"**means the date on which a facility is due and payable in full;

**"PermittedEncumbrances"**means, in respect ofthe Borrower:

a)   liens arising by operation of lawfor amounts not yet due or delinquent, minor encumbrances on real property suchas easements and rights of way which do not materially detract from the valueof such property, and security given to municipalities and similar publicauthorities when required by such authorities in connection with the operationsof the Borrower in the ordinary course of business; and

 

b)  Security granted in favour of theBank;

 

**"Person"**includes an individual, apartnership, a joint venture, a trust, an unincorporated organization, acompany, a corporation, an association, a government or any department oragency thereof including Canada Revenue Agency, and any other incorporated orunincorporated entity;

**"PostponedDebt"**means indebtedness that isfully postponed and subordinated, both as to principal and interest, on termssatisfactory to the Bank, to the obligations owing to the Bank hereunder;

**"PotentialPrior-Ranking Claims"**means allamounts owing or required to be paid, where the failure to pay any such amountcould give rise to a claim pursuant to any law, statute, regulation orotherwise, which ranks or is capable of ranking in priority to the Security orotherwise in priority to any claim by the Bank for repayment of any amountsowing under this Agreement;

**"RBP"**and **"Royal Bank Prime"**eachmeans the annual rate of interest announced by the Bank from time to time asbeing a reference rate then in effect for determining interest rates oncommercial loans made in Canadian currency in Canada;

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Schedule A

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**"RBUSBR"and "Royal Bank US Base Rate"**eachmeans the annual rate of interest announced by the Bank from time to time as areference rate then in effect for determining interest rates on commercialloans made in US currency in Canada;

 

**"Release"**includes discharge, spray, inject,inoculate, abandon, deposit, spill, leak, seep, pour, emit, empty, throw, dump,place and exhaust, and when used as a noun has a similar meaning;

**"TangibleNet Worth"**means the total of Equityless intangibles, deferred charges, leasehold improvements, deferred taxcredits and unsecured advances to related parties. For the purpose hereof,intangibles are assets lacking physical substance;

**"UnencumberedInventory"**means finished goods rawmaterials raw materials and finished goods inventory of the Borrower which isnot subject to any security interest or other encumbrance or any other right orclaim which ranks or is capable of ranking in priority to the Bank's securityincluding, without limitation, rights of unpaid suppliers under the *Bankruptcyand Insolvency Act,*Canada, to repossess inventory within 30 days afterdelivery;

**"US"**meansUnited States of America.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Schedule B

_____________________________________________________________________________________________

 

Schedule"B" to the Agreement dated October 26, 2009, between Rock of Ages Canada Inc.,as Borrower, and Royal Bank of Canada, as the Bank

 

**CALCULATION AND PAYMENT OF INTEREST AND FEES**

** **

**LIMITON INTEREST**

** **

TheBorrower shall not be obligated to pay any interest, fees or costs under or inconnection with this Agreement in excess of what is permitted by ApplicableLaw.

 

**OVERDUEPAYMENTS**

** **

Any amount that is not paid when due hereunder shall,unless interest is otherwise payable in respect thereof in accordance with theterms of this Agreement or the instrument or contract governing same, bearinterest until paid at the rate of RBP plus 5% per annum or, in the case of anamount in US currency if applicable, RBUSBR plus 5% per annum. Such interest onoverdue amounts shall be computed daily, compounded monthly and shall bepayable both before and after any or all of default, maturity date, demand andjudgement.

 

**EQUIVALENTYEARLY RATES**

** **

The annual rates of interest or fees to which therates calculated in accordance with this Agreement are equivalent, are therates so calculated multiplied by the actual number of days in the calendaryear in which such calculation is made and divided by 365 or, in the case ofLibor Loans if applicable, divided by 360.

 

**TIMEAND PLACE OF PAYMENT**

** **

Amounts payable by the Borrower hereunder shall bepaid at such place as the Bank may advise from time to time in the applicablecurrency. Amounts due on a day other than a Business Day shall be deemed to bedue on the Business Day next following such day. Interest and fees payableunder this Agreement are payable both before and after any or all of default,maturity date, demand and judgement.

 

**RBPLOANS AND RBUSBR LOANS**

** **

The Borrower shall pay interest on each RBP Loan andRBUSBR Loan, monthly in arrears, on the 21st day of each month or such otherday as may be agreed to between the Borrower and the Bank. Such interest willbe calculated monthly and will accrue daily on the basis of the actual numberof days elapsed and a year of 365 days and shall be paid in the currency of theapplicable Borrowing.

 

**LETTEROF CREDIT FEES**

** **

The Borrower shall pay a LC fee on the date ofissuance of any LC calculated on the face amount of the LC issued, based uponthe number of days in the term and a year of 365 days. If applicable, fees forLCs issued in US currency shall be paid in US currency and fees for LCs issuedin any other approved currency shall be paid in Canadian currency.

 

 

 

 

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Schedule B

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**BANKERS ACCEPTANCES**

** **

The Borrower shall pay an acceptance fee in advance onthe date of issue of each BA at the applicable rate provided for in thisAgreement Acceptance fees shall be calculated on the face amount of the BAissued and based upon the number of days in the term thereof and a year of 365days.

 

**LIBORLOANS**

** **

The Borrower shall pay interest on each Libor Loan, oneach Libor Interest Date, calculated in arrears. Such interest will accruedaily and shall be calculated on the basis of the actual number of days elapsedduring the applicable Libor Interest Period divided by 360.

 

**FRTLOANS**

** **

The Borrower shall pay interest on each loan inarrears at the applicable rate on such date as agreed upon between the Bank andthe Borrower Such interest will be calculated monthly and will accrue daily onthe basis of the actual number of days elapsed and a year of **365 days**.

** **

**STANDBY FEES**

The fee will be calculated in arrears, paid as per thefrequency indicated in the Fees section of this Agreement and will accrue dailyon the unutilized and uncancelled portion of the amount of the applicablefacility from and including the date of acceptance of this Agreement.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Schedule C

_____________________________________________________________________________________________

 

Schedule "C" to the Agreement dated October 26, 2009,between Rock of Ages Canada Inc., as Borrower, and Royal Bank of Canada, as theBank.

 

**NOTICE REQUIREMENTS**

 

**Notice Requirements for BAs****:**

** **

| **Amount**                                                  | **Prior  Notice**                                                                                                                                 |
|-------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------|
| Up to but not including  $50,000,000

$50,000,000  and over | By  10:00 a.m. Eastern Standard Time on the day of Borrowing

By  12.00 a.m. Eastern Standard Time, 1 Business Day prior to the day of  Borrowing |

 

 

**Notice Requirements forLibor Loans:**

** **

| **Amount**                                                                                                                    | **Prior  Notice**

!fit                                                                                                                                               |
|-------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Under $10,000,000 in US  currency and up to 1 year rollovers

$10,000,000 and over in US  currency and up to 1 year rollovers | By 10:00 a.m. Eastern  Standard Time on the Interest Determination Date

By 12:00 a.m. Eastern  Standard Time, 1 Banking Day prior to the Interest Determination Date |

 

 

 

 

 

 

 

 

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Schedule D

_____________________________________________________________________________________________

 

Schedule"D" to the Agreement dated October 26, 2009, between Rock of Ages Canada Inc..,as Borrower, and Royal Bank of Canada, as the Bank

 

**ADDITIONALBORROWING CONDITIONS**

**BAs:**

Borrowingsmade by way of BAs will be subject to the following terms and conditions:

a)   BAs shall be issued and mature ona Business Day and shall be issued in minimum face amounts of $500,000 or suchlarger amount as is a whole multiple of $1,000 for terms of not less than 30and not more than 365 days;

b)   the Bank may, in its solediscretion, refuse to accept the Borrower's drafts or limit the amount of anyBA issue at any time;

c)   notwithstanding any otherprovision of this Agreement, the Borrower shall indemnify the Bank against anyloss, cost or expense incurred by the Bank if any BA is repaid, prepaid,converted or cancelled other than on the maturity date of such BA;

d)   any BA issued under a termfacility must have a maturity on or before the Maturity Date of the termfacility, unless otherwise agreed by the Bank; and

e)   prior to the issue of any BA theBorrower shall execute the Bank's standard form of undertaking and agreement inrespect of BAs. If there is any inconsistency at any time between the terms ofthis Agreement and the terms of the Bank's standard form of undertaking andagreement, the terms of this Agreement shall govern.

**LCs or LGs:**

Borrowingsmade by way of LCs or LGs will be subject to the following terms andconditions:

a)   each LC and LG shall expire on aBusiness Day and shall have a term of not more than 365 days;

b)   at least 2 Business Days prior tothe issue of an LC or LG, the Borrower shall execute a duly authorizedapplication with respect to such LC or LG and each LC and LG shall be governedby the terms and conditions of the relevant application for such contract;

c)   an LC or LG may not be revokedprior to its expiry date unless the consent of the beneficiary of the LC or LGhas been obtained;

d)   any LC or LG issued under a termfacility must have an expiry date on or before the Maturity Date of the termfacility, unless otherwise agreed by the Bank; and

e) ** **if there is any inconsistencyat any time between the terms of this Agreement and the terms of theapplication for LC or LG, the terms of the application for LC or LG shallgovern.

**FRT Loans:**

 

Borrowingsmade by way of FRT Loans will be subject to the following terms and conditions:

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Schedule D

_____________________________________________________________________________________________

a)   the Borrower shall select anamount eligible for prepayment of 10% or 0% for each new FRT Loan prior to theadvance of such FRT Loan;

b)   each FRT Loan shall be in anamount not less than $10,000; (in Canadian Currency);

c)   each FRT Loan shall have a term asoutlined in the applicable repayment section of each corresponding creditfacility, provided that the maturity date of any FRT Loan issued under any termfacility shall not extend beyond the Maturity Date of the term facility;

d)   each FRT Loan shall have a minimumterm of 1 year; and

e)    FRT Loans may not be used tofinance working capital requirements.

**Libor Loans:**

** **

Borrowingsmade by way of Libor Loans will be subject to the following terms andconditions:

 

a)   LiborLoans shall be issued and mature on a Banking Day and shall be made in minimumamounts of $500 000 in US currency for terms of not less than 30 days and notmore than 360 days,

 

b)   ifthe Borrower fails to select and to notify the Bank of the Libor InterestPeriod applicable to any Libor Loan, the Borrower shall be deemed to haveselected a 3 month Libor Interest Period;

 

c)   ifthe Bank so requests, the Borrower shall enter into a Hedge Contract to hedgethe principal and interest of each Libor Loan against the risk of currency andexchange rate fluctuations. "Hedge Contract" means any rate swap, rate cap,rate floor, rate collar, currency exchange transaction, forward rate agreementor other exchange, hedging or rate protection transaction, or any combinationof such transactions or agreements or any option with respect to any suchtransaction now existing or hereafter entered into between the Borrower and theBank;

 

d)   theBorrower shall indemnify and hold the Bank harmless against any loss, cost or expense(including without limitation, any loss incurred by the Bank in liquidating orredeploying deposits acquired to fund or maintain any Libor Loan) incurred bythe Bank as a result of:

 

i) repayments, prepayments,conversions, rollovers or cancellations of a Libor Loan other than on the lastday of the Libor Interest Period applicable to such Libor Loan, or

 

ii) failure to draw down a Libor Loanon the first day of the Libor Interest Period selected by the Borrower, and

 e)   if the Bank determines, which determinationis final, conclusive and binding upon the Borrower, that:

i) adequate and fair means do notexist for ascertaining the rate of interest on a Libor Loan,

ii) the making or the continuance of aLibor Loan has become impracticable by reason of circumstances which materiallyand adversely affect the London Interbank Market,

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Schedule D

_____________________________________________________________________________________________

iii)  deposits in US currency are notavailable to the Bank in the London Interbank Market in sufficient amounts inthe ordinary course of business for the applicable Libor Interest Period tomake or maintain a Libor Loan during such Libor Interest Period, or

iv)  the cost to the Bank of making ormaintaining a Libor Loan does not accurately reflect the effective cost to theBank thereof or the costs to the Bank are increased or the income receivable bythe Bank is reduced in respect of a Libor Loan,

thenthe Bank shall promptly notify the Borrower of such determination and theBorrower shall, prior to the next Interest Determination Date, notify the Bankas to the basis of Borrowing it has selected in substitution for such LiborLoan If the Borrower does not so notify the Bank, such Libor Loan willautomatically be converted into an RBUSBR Loan on the expiry of the thencurrent Libor Interest Period.

**FEF Contracts**

**"ForeignExchange Forward Contract"**or **"FEFContract"**means a currency exchange transaction or agreement or any optionwith respect to any such transaction now existing or hereafter entered intobetween the Borrower and the Bank;

Atthe Borrower's request, the Bank may agree to enter into FEF Contracts with theBorrower from time to time The Borrower acknowledges that the Bank makes noformal commitment herein to enter into any FEF Contract and the Bank may, atany time and at all times, in its sole and absolute discretion, accept or rejectany request by the Borrower to enter into a FEF Contract If the Bank does enterinto a FEF Contract with the Borrower, it will do so subject to the following:

a)   the Borrower shall promptly issueor countersign and return a confirmation or acknowledgement of the terms ofeach such FEF Contract as required by the Bank;

b) the Borrower shall, if required bythe Bank, promptly enter into a Foreign Exchange and Options Master Agreementor such other agreement in form and substance satisfactory to the Bank to governthe FEF Contract(s);

c)  in the event of demand for paymentunder the Agreement of which this schedule forms a part, the Bank may terminateall or any FEF Contracts. If the agreement governing any FEF Contract does notcontain provisions governing termination, any such termination shall beeffected in accordance with customary market practice. The Bank's determinationof amounts owing under any terminated FEF Contract shall be conclusive in theabsence of manifest error. The Bank shall apply any amount owing by the Bank tothe Borrower on termination of any FEF Contract against the Borrower'sobligations to the Bank under the Agreement and any amount owing to the Bank bythe Borrower on such termination shall be added to the Borrower's obligationsto the Bank under the Agreement and secured by the Security;

d) the Borrower shall pay allrequired fees in connection with any FEF Contracts and indemnify and hold theBank harmless against any loss, cost or expense incurred by the Bank inrelation to any FEF Contract;

e)  any rights of the Bank herein inrespect of any FEF Contract are in addition to and not in limitation of orsubstitution for any rights of the Bank under any agreement governing such FEFContract. In the event that there is any inconsistency at any time between theterms hereof and any agreement governing such FEF Contract, the terms of suchagreement shall prevail; and

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Schedule D

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f)   inaddition to any security which may be held at any time in respect of any FEFContract, upon request by the Bank from time to time, the Borrower will deliverto the Bank such security as is acceptable to the Bank as continuing collateralsecurity for the Borrower's obligations to the Bank in respect of FEFContracts.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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