EXHIBIT
10.9                                                                                                                                                  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


Rock
of Ages Canada Inc.


4,
Rock of Ages Street


Stanstead, Quebec


JOB 3E2




 




Dear
Sir:




 




ROYAL
BANK OF CANADA (the "Bank") hereby confirms the credit facilities
described below (the "Credit Facilities") subject to the terms and
conditions set forth below and in the attached Terms & Conditions and
Schedules (collectively the "Agreement") This Agreement supersedes and
cancels the existing agreement dated May 20, 2008 Any amount owing by the
Borrower to the Bank under such previous agreement is deemed to be a Borrowing
under this Agreement. Any and all security that has been delivered to the Bank and
is set forth as Security below, shall remain in full force and effect, is
expressly reserved by the Bank and shall apply in respect of all obligations of
the Borrower under the Credit Facilities. Unless otherwise provided, all dollar
amounts are in Canadian currency.




 




BORROWER




 




Rock
of Ages Canada Inc. (the "Borrower")




 




CREDIT
FACILITIES


 


Facility
(1):     $2,500,000 revolving demand
facility by way of:




 




           a)          RBP based loans ("RBP
Loans")




 




	
  Revolve in increments of:

  	
  $10,000

  	
  Minimum retained balance:

  	
  Not Applicable

  
	
  Revolved by:

  	
  Bank

  	
  Interest rate (per annum)

  	
  RBP + 0.50%

  





 




            b)         RBUSBR
Based 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%

  







































Rock of Ages Canada Inc.                           -2-                                                   October
26, 2009


_____________________________________________________________________________




 




            d)         Libor
based loans in US currency ("Libor Loans")




 




	
  Interest rate (per annum)

  	
  Libor + 1%

  





 




e)         Letters of Credit in Canadian currency or
US 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




The
Borrower may borrow, convert, repay and reborrow up to the amount of this
facility provided this facility is made available at the sole discretion of the
Bank and the Bank may cancel or restrict the availability of any unutilized
portion at any time and from time to time.




In
the event the aggregate Borrowings outstanding under this facility are in
excess of $500,000, the aggregate Borrowings outstanding under this facility
must not exceed at any time the aggregate of the following less Potential Prior
Ranking Claims (the "Borrowing Limit"):




a)   75% of
Good Canadian/US Accounts Receivable;


b)   90% of
Good 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 lesser
of 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




Notwithstanding
compliance with the covenants and all other terms and conditions of this
Agreement, and regardless of the maturities of any outstanding instruments or
contracts, Borrowings under this facility are repayable on demand.


General Account




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




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




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




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




































Rock of Ages Canada Inc.                           -3-                                                   October
26, 2009


_____________________________________________________________________________




Availability




 




The
Borrower may borrow up to the amount of this term facility provided this
facility is made available at the sole discretion of the Bank and the Bank may
cancel or restrict availability of any unutilized portion of this facility at
any 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




The
Credit Facilities are in addition to the following facilities (the "Other
Facilities"). The Other Facilities will be governed by this Agreement and
separate agreements between the Borrower and the Bank. In the event of a
conflict between this Agreement and any such separate agreement, the terms of
the separate agreement will govern.




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




b)   Foreign Exchange Forward Contracts outstanding
from time to time as governed by terms and conditions detailed in attached
Schedule "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




 




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


































Rock of Ages Canada Inc.                           -4-                                                   October
26, 2009


_____________________________________________________________________________






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




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




c)     
Security agreement (chattel
mortgage) signed by the Borrower constituting a first ranking security interest
on accounts receivable;




d)     
Movable Hypothec without delivery
in the amount of $4,000,000 signed by the Borrower constituting a second
ranking hypothec in the movable property of the Borrower described as the
universality of assets;




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




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




FINANCIAL COVENANTS




Without
affecting 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 or
other discretionary facility and while any availability exists under any
facility which is not a discretionary facility or any Borrowings remain
outstanding under any term facility, the Borrower covenants and agrees with the
Bank that the Borrower will:




a)   Maintain to be measured
as 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 of
not 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 including
reports described therein when borrowings outstanding under Facility (1) are in
excess of $500,000 substantially in the form of Schedule "G" signed on behalf
of the Borrower by any one of the Chief Executive Officer, the Vice-President
Finance, the Treasurer, the Comptroller, the Chief Accountant or any other
employee of the Borrower holding equivalent office, within 20 days of each
month end;




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




c)   quarterly in-house
financial statements for the Borrower, within 30 days of each fiscal quarter
end;




































Rock of Ages Canada Inc.                           -5-                                                   October
26, 2009


_____________________________________________________________________________




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





e)   such other financi










al and operating statements and reports as and when the Bank may reasonably
require.




CONDITIONS PRECEDENT




In
no event will the Credit Facilities or any part thereof be available unless the
Bank has received:




a)     
a duly executed copy of this
Agreement;




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




c)     
such financial and other
information or documents relating to the Borrower or any Guarantor if
applicable as the Bank may reasonably require;




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




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




Additionally;




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




GOVERNING LAW JURISDICTION


 


Province of Quebec.






 






 






 






 






 






 






 






 






 






 






 






 






 




































Rock of Ages Canada Inc.                           -6-                                                   October
26, 2009


_____________________________________________________________________________




ACCEPTANCE




This
Agreement is open for acceptance until December 1, 2009, after
which date it will be null and void, unless extended in writing by the Bank.




 




Royal Bank of Canada






 






 






By: /s/ Rosemarie Maide                      


     Rosemarie Maide, Account
Manager




 






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






 






 






 






ROCK OF AGES CANADA INC.


 


 


Per: /s/ Gabriel
Ouellet________________________


Name: Gabriel Ouellet


Title: Director of
Finance and Operations




 




 




Per:
________________________________________


Name:


Title:




 




I/We have the authority to bind
the Borrower.




 




md\attachments:


Terms and Conditions


Schedules:



§  Definitions



§  Calculation and Payment of Interest and Fees



§  Notice Requirements



§  Additional Borrowing Conditions



§  Borrowing Limit Certificate






 






 






 






 






 






 






 






 






 






 






 




































Rock of Ages Canada Inc.                           -7-                                                   October
26, 2009


_____________________________________________________________________________




 




TERMS AND CONDITIONS




The Bank is requested by the Borrower to make the
Credit Facilities available to the Borrower in the manner and at the rates and
times specified in this Agreement. Terms defined elsewhere in this Agreement
and not otherwise defined in the Terms and Conditions below or the Schedules
attached hereto have the meaning given to such terms as so defined. In
consideration of the Bank making the Credit Facilities available, the Borrower
agrees, 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 and
times specified in this Agreement and shall be paid in the currency of the
Borrowing. Unless the Bank otherwise agrees, any payment hereunder must be made
in money which is legal tender at the time of payment. In the case of a demand
facility of any kind, the Borrower shall repay all principal sums outstanding
under such facility upon demand including, without limitation, an amount equal
to the face amount of all LCs and BAs which are unmatured or unexpired, which
amount shall be held by the Bank as security for the Borrower's obligations to
the Bank in respect of such Borrowings. Where any Borrowings are repayable by
scheduled blended payments, such payments shall be applied, firstly, to
interest due, and the balance, if any, shall be applied to principal
outstanding. 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 bear
interest at the same rate, and will be payable on demand or on the date specified
herein, as the case may be Borrowings repayable by way of scheduled payments of
principal and interest shall be so repaid with any balance of such Borrowings
being due and payable as and when specified in this Agreement. The Borrower
shall ensure that the maturities of instruments or contracts selected by the
Borrower when making Borrowings will be such so as to enable the Borrower to
meet its repayment obligations.




PREPAYMENT




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




Where Borrowings are by way of FRT Loans, provided an
Event of Default shall not have occurred and be continuing, the Borrower may
prepay such Borrowings on a non-cumulative basis up to the percentage, as
selected by the Borrower for each FRT Loan, of the outstanding principal
balance on the day of prepayment, without fee or premium, once per year during
the 12 month period from each anniversary date of the Borrowing Prepayments
greater than the amounts provided for herein may be made only with the prior
written consent of the Bank and will be subject to a prepayment fee determined
by the Bank, in its sole discretion.




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




EVIDENCE
OF INDEBTEDNESS






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




































Rock of Ages Canada Inc.                           -8-                                                   October
26, 2009


_____________________________________________________________________________




Bank to automatically debit, by
mechanical, electronic or manual means, any bank account of the Borrower for all
amounts payable under this Agreement, including, but not limited to, the
repayment of principal and the payment of interest, fees and all charges for the
keeping of such bank accounts.




GENERAL
COVENANTS


Without
affecting 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 or
other discretionary facility, the Borrower covenants and agrees with the Bank
that the Borrower:




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




b)   will immediately advise the Bank
of 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 this
Agreement or any Security, or in the case of any term facility, an Event of
Default;




c)   will file all material tax returns
which are or will be required to be filed by it, pay or make provision for
payment of all material taxes (including interest and penalties) and Potential
Prior-Ranking Claims, which are or will become due and payable and provide
adequate reserves for the payment of any tax, the payment of which is being
contested;




d)   will give the Bank 30 days prior
notice in writing of any intended change in its ownership structure and it will
not make or facilitate any such changes without the prior written consent of
the Bank;




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




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




g)   will
deliver to the Bank such financial and other information as the Bank may
reasonably request from time to time, including, but not limited to, the
reports and other information set out under Reporting Requirements;




h)   will immediately advise the Bank
of any unfavourable change in its financial position which may adversely affect
its ability to pay or perform its obligations in accordance with the terms of
this Agreement;




i)    will keep its assets fully insured
against such perils and in such manner as would be customarily insured by
Persons 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, assume
or suffer to exist any mortgage, charge, lien, pledge, security interest or
other encumbrance affecting any of its properties, assets or other rights;




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




































Rock of Ages Canada Inc.                           -9-                                                   October
26, 2009


_____________________________________________________________________________




 




l)    will
not, without the prior written consent of the Bank, guarantee or otherwise
provide for, on a direct, indirect or contingent basis, the payment of any
monies or performance of any obligations by any other Person, except as may be
provided for herein;




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




n)  will permit the Bank or its
representatives, from time to time, to visit and inspect the Borrower's
premises, properties and assets and examine and obtain copies of the Borrower's
records or other information and discuss the Borrower's affairs with the
auditors, counsel and other professional advisers of the Borrower;




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




EXPENSES, ETC.


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




GENERAL INDEMNITY


The
Borrower 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 a
result of, in connection with or arising out of i) any Event of Default or
breach of any term or condition of this Agreement or any Security by the Borrower
or any Guarantor if applicable (whether or not constituting an Event of
Default), ii) the Bank acting upon instructions given or agreements made by
electronic transmission of any type, iii) the presence of Contaminants at, on
or under or the discharge or likely discharge of Contaminants from, any
properties now or previously used by the Borrower or any Guarantor and iv) the
breach of or non compliance with any Applicable Law by the Borrower or any
Guarantor.




AMENDMENTS AND WAIVERS


No
amendment or waiver of any provision of this Agreement will be effective unless
it is in writing, signed by the Borrower and the Bank. No failure or delay, on
the part of the Bank, in exercising any right or power hereunder or under any
Security shall operate as a waiver thereof. Any amendments requested by the
Borrower will require review and agreement by the Bank and its counsel. Costs
related to this review will be for the Borrower's account.


 


 


 




































Rock of Ages Canada Inc.                          -10-                                                  October
26, 2009


_____________________________________________________________________________




 




SUCCESSORS AND
ASSIGNS


 




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




 




GAAP


 


Unless
otherwise provided, all accounting terms used in this Agreement shall be
interpreted in accordance with Canadian Generally Accepted Accounting
Principles in effect from time to time, applied on a consistent basis from
period to period. Any change in accounting principles or the application of
accounting principles, including, without limitation, the use of differential
reporting (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 of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement and such invalid provision shall be deemed to be
severable.




 




GOVERNING LAW


 


This Agreement shall be construed in accordance with
and governed by the laws of the Province identified in the Governing Law
Jurisdiction section of this Agreement and the laws of Canada applicable
therein. The Borrower irrevocably submits to the non-exclusive jurisdiction of
the courts of such Province and acknowledges the competence of such courts and
irrevocably agrees to be bound by a judgment of any such court.




 




DEFAULT BY LAPSE OF TIME


 


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




 




SET-OFF


 






The Bank is authorized (but not obligated), at any
time 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 is
beneficially entitled (in any currency) at any branch or agency of the Bank in
or towards satisfaction of the indebtedness of the Borrower due to the Bank
under the Credit Facilities and the other obligations of the Borrower under
this Agreement. For that purpose, the Bank is irrevocably authorized to use all
or any part of any such credit balance to buy such other currencies as may be
necessary to effect such application.






 






 






 




































Rock of Ages Canada Inc.                          -11-                                                  October
26, 2009


_____________________________________________________________________________




 




NOTICES


 


Any notice or demand to be given by the Bank shall be
given in writing by way of a letter addressed to the Borrower If the letter is
sent 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 the
Borrower's business is open for normal business, and otherwise on the next such
day. If the letter is sent by ordinary mail to the address of the Borrower, it
shall be deemed received on the date falling five (5) days following the date
of the letter, unless the letter is hand-delivered to the Borrower, in which
case the letter shall be deemed to be received on the date of delivery. The
Borrower must advise the Bank at once about any changes in the Borrower's
address.




 




CONSENT OF DISCLOSURE


 


The Borrower hereby grants permission to any Person
having information in such Person's possession relating to any Potential
Prior-Ranking Claim, to release such information to the Bank (upon its written
request), solely for the purpose of assisting the Bank to evaluate the
financial condition of the Borrower.




 




NON-MERGER


 


The
provisions of this Agreement shall not merge with any Security provided to the
Bank, 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 or
Guarantor if applicable for any obligation under this Agreement, then the
liability of each such Person for such obligation is joint and several (in
Quebec, solidarily) with each other such Person.




 




LIFE AND DISABILITY INSURANCE


 


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




 




If there are any discrepancies between the insurance information
above, 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 taken
with your scheduled loan payments. In the case of blended payments of principal
and interest, as premiums fluctuate based on various factors such as, by way of
example, the age of the insured and changes to the insured loan balance, a part
of the premium payment may be deducted and taken from the scheduled blended
loan payment with the result that the amortization period may increase in the
case of any such loan to which this coverage applies. Refer to the Business
Loan Insurance Plan application (form 3460 Eng or 53460 Fr) for further
explanation and disclosure.






 






 






 






 




































Rock of Ages Canada Inc.                          -12-                                                  October
26, 2009


_____________________________________________________________________________




 




COUNTERPART EXECUTION


 


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




 




EMAIL AND FAX TRANSMISSION


 


The Bank is entitled to rely on any report or certificate provided
to the Bank by the Borrower or any Guarantor as applicable, by way of email or
fax transmission as though it were an originally signed document. The Bank is
further entitled to assume that any communication from the Borrower received by
email 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 a
corporation, it is duly incorporated, validly existing and duly registered or
qualified to carry on business in each jurisdiction in which its business or
assets are located;




 




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




 




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




 




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




 




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




 




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




 




LANGUAGE


 


The parties hereto have expressly requested that this Agreement
and all related documents, including notices, be drawn up in the English
language. Les parties ont expressement demande que la presente convention et
tous les documents y afferents, y compris les avis, soient rediges en langue
anglaise.






 






 






 






 




































Rock of Ages Canada Inc.                          -13-                                                  October
26, 2009


_____________________________________________________________________________




 




WHOLE AGREEMENT


 


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




 




EVENTS
OF DEFAULT


 


Without affecting or limiting the right of the Bank to
terminate or demand payment of, or to cancel or restrict availability of any
unutilized portion of, any demand or other discretionary facility, each of the
following shall constitute an "Event of Default" which shall entitle the
Bank, in its sole discretion, to cancel any Credit Facilities, demand immediate
repayment in full of any amounts outstanding under any term facility, together
with outstanding accrued interest and any other indebtedness under or with
respect to any term facility, and to realize on all or any portion of any
Security:




 




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




 




b)   failure of the Borrower, or any
Guarantor if applicable, to observe any covenant, condition or provision
contained in this Agreement or in any documentation relating hereto or to the
Security;




 




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




 




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




 




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




 




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




 




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




 




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






 






 






 




































Rock of Ages Canada Inc.                          -14-                                                  October
26, 2009


_____________________________________________________________________________




 




EXCHANGE RATE FLUCTUATIONS


 


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


 


INCREASED
COSTS


 


The Borrower shall reimburse the Bank for any
additional cost or reduction in income arising as a result of (i) the
imposition 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 imposition
of, or increase in, any reserve or other similar requirement, (iii) the
imposition of, or change in, any other condition affecting the Credit
Facilities imposed by any Applicable Law or the interpretation thereof.




 




JUDGEMENT CURRENCY




 




If for the purpose of obtaining judgement in any court
in any jurisdiction with respect to this Agreement, it is necessary to convert
into the currency of such jurisdiction (the "Judgement Currency") any
amount due hereunder in any currency other than the Judgement Currency, then
conversion shall be made at the rate of exchange prevailing on the Business Day
before 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 to
sell a similar amount of such currency in the Toronto foreign exchange market,
against the Judgement Currency, in accordance with normal banking procedures.




 




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




 




 




 




 




 




 




 




 




 




 




 




 




 




 




 




 




 



















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




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




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




 




"Bankers' Acceptance" or "BA" means a bill of exchange, including a
depository 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 which
have been accepted by the Bank;




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




"Business Day" means
a day, excluding Saturday, Sunday and any other day which shall be a legal
holiday 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" also
excludes any day which shall be a legal holiday or a day on which banking
institutions are closed in Toronto, Ontario or in the province where the
Borrower's accounts are maintained;




"Banking
Day" means a Business Day on which
dealings in US currency deposits may be carried on by and between leading Banks
in the London Interbank Market;




"Canadian/US
Accounts Receivable" means trade
accounts receivable of the Borrower owing by Persons whose chief operating
activities are located in the US or Canada;




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




 




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




 




"EBITDA" means,
for any fiscal period, net income from continuing operations (excluding
extraordinary gains or losses) plus, to the extent deducted in determining net
income, 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, where
the payment has been insured by Export Development Canada ("EDC"), and the Bank
has been provided with a duly executed Direction to Pay on EDC Form E-6 supported
by 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, 



















Schedule A


_____________________________________________________________________________________________




 




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




"Environmental
Laws" means all Applicable Laws
relating to the environment or occupational health and safety, or any
Environmental Activity;




"Equity" means
the total of share capital, (excluding preferred shares redeemable within one
year) contributed surplus and retained earnings plus Postponed Debt;




"Equivalent
Amount" means, with respect to an
amount of any currency, the amount of any other currency required to purchase
that amount of the first mentioned currency through the Bank in Toronto, in
accordance with normal banking procedures;




"Funded
Debt" means, at any time for the
fiscal period then ended, all obligations for borrowed money which bears
interest or to which interest is imputed plus, without duplication, all
obligations for the deferred payment of the purchase of property, all capital
lease obligations and all indebtedness secured by purchase money security
interests, but excluding Postponed Debt;




"Good
Canadian/US Accounts Receivable" means
Canadian/US Accounts Receivable excluding EDC Accounts Receivable and excluding
(i) the entire amount of accounts, any portion of which is outstanding more
than 120 days after billing date, provided that the under 120 day portion may
be included where the over 120 day portion is less than 15% of the amount of
accounts, 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 or
capable of ranking in priority to the Bank's security, (v) the amount of all
holdbacks, contra accounts or rights of set-off on the part of any account
debtor, or (vi) any accounts which the Bank has previously advised to be
ineligible;




"Good
EDC Accounts Receivable" means EDC
Accounts Receivable, excluding (i) the entire amount of accounts, any portion
of which is outstanding more than 120 days after billing date, provided that
the under 120 day portion may be included where the over 120 day portion is
less than 15% of the amount of accounts, 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 or capable of ranking in priority to the Bank's
security, (v) the amount of all holdbacks, contra accounts or rights of set-off
on the part of any account debtor, or (vi) any accounts which the Bank has
previously advised to be ineligible;




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




"Interest
Determination Date" means, with
respect to a Libor Loan, the date which is 2 Banking Days before the first day
of the Libor Interest Period applicable to such Libor Loan;




"Interest
Expense" means, for any fiscal
period, the aggregate cost of advances of credit outstanding during that period
including, without limitation, interest charges, capitalized interest, the
interest component of capital leases, fees payable in respect of letters of
credit and letters of guarantee and discounts incurred and fees payable in
respect of bankers' acceptances;




"Letter
of Credit" or "LC" means a
documentary credit issued by the Bank on behalf of the Borrower for the purpose
of paying suppliers of goods;



















 







Schedule A


_____________________________________________________________________________________________




 




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




"Libor
Interest Date" means with respect to
any Libor Loan, the last day of each Libor Interest Period and, if the Borrower
selects a Libor Interest Period for a period longer than 3 months, the Libor
Interest Date shall be the date falling every 3 months after the beginning of
such Libor Interest Period as well as the last day of such Libor Interest
Period;




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




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




"Permitted
Encumbrances" means, in respect of
the Borrower:




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




 




b)  Security granted in favour of the
Bank;




 




"Person"
includes an individual, a
partnership, a joint venture, a trust, an unincorporated organization, a
company, a corporation, an association, a government or any department or
agency thereof including Canada Revenue Agency, and any other incorporated or
unincorporated entity;




"Postponed
Debt" means indebtedness that is
fully postponed and subordinated, both as to principal and interest, on terms
satisfactory to the Bank, to the obligations owing to the Bank hereunder;




"Potential
Prior-Ranking Claims" means all
amounts owing or required to be paid, where the failure to pay any such amount
could give rise to a claim pursuant to any law, statute, regulation or
otherwise, which ranks or is capable of ranking in priority to the Security or
otherwise in priority to any claim by the Bank for repayment of any amounts
owing under this Agreement;




"RBP"
and "Royal Bank Prime" each
means the annual rate of interest announced by the Bank from time to time as
being a reference rate then in effect for determining interest rates on
commercial loans made in Canadian currency in Canada;



















Schedule A


_____________________________________________________________________________________________




 




"RBUSBR"
and "Royal Bank US Base Rate" each
means the annual rate of interest announced by the Bank from time to time as a
reference rate then in effect for determining interest rates on commercial
loans 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;




"Tangible
Net Worth" means the total of Equity
less intangibles, deferred charges, leasehold improvements, deferred tax
credits and unsecured advances to related parties. For the purpose hereof,
intangibles are assets lacking physical substance;




"Unencumbered
Inventory" means finished goods raw
materials raw materials and finished goods inventory of the Borrower which is
not subject to any security interest or other encumbrance or any other right or
claim which ranks or is capable of ranking in priority to the Bank's security
including, without limitation, rights of unpaid suppliers under the Bankruptcy
and Insolvency Act, Canada, to repossess inventory within 30 days after
delivery;




"US" means
United States of America.




 




 




 




 




 




 




 




 




 




 




 




 




 




 




 



















 









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


 


LIMIT
ON INTEREST


 


The
Borrower shall not be obligated to pay any interest, fees or costs under or in
connection with this Agreement in excess of what is permitted by Applicable
Law.




 




OVERDUE
PAYMENTS


 


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




 




EQUIVALENT
YEARLY RATES


 


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




 




TIME
AND PLACE OF PAYMENT


 


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




 




RBP
LOANS AND RBUSBR LOANS


 


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




 




LETTER
OF CREDIT FEES


 


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






 






 






 






 




































Schedule B


_____________________________________________________________________________________________




 




BANKERS ACCEPTANCES


 


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




 




LIBOR
LOANS


 


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




 




FRT
LOANS


 


The Borrower shall pay interest on each loan in
arrears at the applicable rate on such date as agreed upon between the Bank and
the Borrower Such interest will be calculated monthly and will accrue daily on
the 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 the
frequency indicated in the Fees section of this Agreement and will accrue daily
on the unutilized and uncancelled portion of the amount of the applicable
facility from and including the date of acceptance of this Agreement.






 






 






 






 






 






 






 






 






 






 






 






 






 






 






 






 






 






 






 






 






 






 






 






 






 






 












































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 the
Bank.




 




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 for
Libor 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

  














 

 

 

 

 

 

 

 






































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




 




ADDITIONAL
BORROWING CONDITIONS




BAs:




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




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




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




c)   notwithstanding any other
provision of this Agreement, the Borrower shall indemnify the Bank against any
loss, 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 term
facility must have a maturity on or before the Maturity Date of the term
facility, unless otherwise agreed by the Bank; and




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




LCs or LGs:




Borrowings
made by way of LCs or LGs will be subject to the following terms and
conditions:




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




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




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




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





e)  
if there is any inconsistency
at any time between the terms of this Agreement and the terms of the
application for LC or LG, the terms of the application for LC or LG shall
govern.




FRT Loans:


 


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




































Schedule D


_____________________________________________________________________________________________




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




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




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




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




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




Libor Loans:


 


Borrowings
made by way of Libor Loans will be subject to the following terms and
conditions:




 




a)   Libor
Loans shall be issued and mature on a Banking Day and shall be made in minimum
amounts of $500 000 in US currency for terms of not less than 30 days and not
more than 360 days,




 




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




 




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




 




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




 




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




 




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




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




i) 
adequate and fair means do not
exist for ascertaining the rate of interest on a Libor Loan,




ii) 
the making or the continuance of a
Libor Loan has become impracticable by reason of circumstances which materially
and adversely affect the London Interbank Market,



















Schedule D


_____________________________________________________________________________________________




iii)  deposits in US currency are not
available to the Bank in the London Interbank Market in sufficient amounts in
the ordinary course of business for the applicable Libor Interest Period to
make or maintain a Libor Loan during such Libor Interest Period, or




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




then
the Bank shall promptly notify the Borrower of such determination and the
Borrower shall, prior to the next Interest Determination Date, notify the Bank
as to the basis of Borrowing it has selected in substitution for such Libor
Loan If the Borrower does not so notify the Bank, such Libor Loan will
automatically be converted into an RBUSBR Loan on the expiry of the then
current Libor Interest Period.




FEF Contracts


"Foreign
Exchange Forward Contract" or "FEF
Contract" means a currency exchange transaction or agreement or any option
with respect to any such transaction now existing or hereafter entered into
between the Borrower and the Bank;




At
the Borrower's request, the Bank may agree to enter into FEF Contracts with the
Borrower from time to time The Borrower acknowledges that the Bank makes no
formal commitment herein to enter into any FEF Contract and the Bank may, at
any time and at all times, in its sole and absolute discretion, accept or reject
any request by the Borrower to enter into a FEF Contract If the Bank does enter
into a FEF Contract with the Borrower, it will do so subject to the following:




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




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




c)  in the event of demand for payment
under the Agreement of which this schedule forms a part, the Bank may terminate
all or any FEF Contracts. If the agreement governing any FEF Contract does not
contain provisions governing termination, any such termination shall be
effected in accordance with customary market practice. The Bank's determination
of amounts owing under any terminated FEF Contract shall be conclusive in the
absence of manifest error. The Bank shall apply any amount owing by the Bank to
the Borrower on termination of any FEF Contract against the Borrower's
obligations to the Bank under the Agreement and any amount owing to the Bank by
the Borrower on such termination shall be added to the Borrower's obligations
to the Bank under the Agreement and secured by the Security;




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




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



















Schedule D


_____________________________________________________________________________________________




 




f)   in
addition to any security which may be held at any time in respect of any FEF
Contract, upon request by the Bank from time to time, the Borrower will deliver
to the Bank such security as is acceptable to the Bank as continuing collateral
security for the Borrower's obligations to the Bank in respect of FEF
Contracts.