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Exhibit 10.14
STOCK SUBSCRIPTION AGREEMENT
This Stock Subscription Agreement is dated as of June 27, 1997 and is by
and among ROCK OF AGES QUARRIES, INC., which on June 27, 1997 will, pursuant to
an amendment to its Articles of Incorporation made in connection with the merger
of its wholly owned subsidiary ROCK OF AGES CORPORATION into it, change its name
to ROCK OF AGES CORPORATION, a Vermont corporation (the "Buyer"), and XXXXXX
XXXX CHILDS, III, an individual residing in Elberton, Georgia (the
"Shareholder"), who is a shareholder of CHILDS & CHILDS GRANITE CO., INC., C&C
GRANITE COMPANY, INC. both Georgia corporations and of the Joint Venture
Companies (collectively, the "Childs Group").
RECITALS:
1. On the date of this agreement, the Buyer, the Shareholder and other
shareholders of the Childs Group (the "Shareholders") executed a Stock Purchase
Agreement (the "Stock Purchase Agreement") whereby (i) the Buyer has agreed to
purchase from the Shareholder and other shareholders, and the Shareholder and
such other shareholders have agreed to sell to the Buyer, all of their capital
stock in the Childs Group, and (ii) the Buyer has agreed to issue to
Shareholder, and Shareholder has agreed to accept from Buyer, certain shares of
Buyer's common stock (the "Common Stock" or the "Shares") as part of the
purchase price to be paid to Shareholder for his shares in the Childs Group.
2. The Buyer and the Shareholder intend that the issuance to Shareholder
of the Shares constitute a so-called "private placement" exempt from the
registration requirements of the Securities Act of 1933, as amended (the
"Securities Act") and a transaction exempt from the registration requirements of
the Georgia Securities Act of 1973 (the "Georgia Act") pursuant to Section
10-5-9(13) of the Georgia Act and, accordingly, the Buyer has requested that the
Shareholder, and the Shareholder has agreed to, enter into this agreement and to
make certain representations and covenants describing the Shareholder's access
to the Buyer's financial and other information reasonably necessary to the
Shareholder's ability to make an informed business decision whether to invest in
the Buyer and describing the Shareholder's subscription for the Common Stock and
willingness to hold the Common Stock for investment and not for resale.
3. Terms used herein and not defined herein shall have the meanings
ascribed to them in the Stock Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are acknowledged,
and intending to be legally bound, the Shareholder hereby agrees with the Buyer
as follows:
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1. Investment Representations of the Shareholder. The Shareholder hereby
represents and warrants to the Buyer as follows:
(a) The Shareholder has adequate financial means of providing for
the Shareholder's current business needs and possible business contingencies,
has no need for liquidity of this investment in the Buyer's Common Stock, and is
able to bear the economic risks of this investment to the possible extent of a
total loss of this investment. The Shareholder is an "accredited investor",
within the meaning of Rule 501(a) of Regulation D under the Securities Act, of
the category or categories set forth in clause (5) or clause (6) of such Rule.
(b) The Shareholder has been afforded the opportunity by Buyer to
ask questions and request information in order to acquire detailed knowledge and
information concerning the business affairs and operations of Buyer and its
direct or indirect subsidiaries, parent and affiliates and their financial
condition and prospects; and, as a result of such opportunity to ask questions
and review information and the Shareholder's business, the Shareholder is in a
position to weigh, and assess such knowledge and information in a meaningful
fashion.
(c) The Shareholder acknowledges that any business and financial
projections of Buyer that may have been provided by or on behalf of Buyer are
solely for purposes of describing Buyer's future business and financial goals
and are not intended to be, nor are they, representations or guaranties of
Buyer's future performance.
(d) The Shareholder understands that none of the Buyer's Common
Stock (including the Shares) have been registered under the Securities Act or
any state securities laws and that the Shares are offered in reliance on
exemptions for private offerings under the Securities Act and exemptions for
sales transactions under state laws. The Shareholder acknowledges that the
Shareholder is acquiring the Shares without being furnished any offering
literature or memorandum.
(e) The Shareholder is acquiring and purchasing the Shares solely
for investment for his own account and the Shares are not being purchased with a
view to or for the resale, distribution, subdivision, or fractionalization of
the Shares.
(f) The Shareholder acknowledges that Shareholder has received and
examined copies of the Buyer's Certificate of Incorporation, Articles and
Bylaws, all as amended to date, as well as minutes of all shareholder and
director meetings relevant to the Stock Purchase Agreement and the issuance of
Shares to the Shareholder pursuant to the Stock Purchase Agreement. The
Shareholder further acknowledges that Shareholder has been given full
opportunity to receive copies of or examine any and all other minutes of
shareholder and director meetings of the Buyer.
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(g) The Shareholder acknowledges that (A) there are substantial
restrictions on the transferability of the Shares, (B) the Shares will not be,
and investors in the Buyer have no rights to require that the Shares be,
registered under the Securities Act or any state securities laws, and (C) there
will be no public market for the Shares and, accordingly, the Shareholder may
have to hold the Shares indefinitely without the possibility of liquidating the
Shareholder's investment in the Buyer.
2. Representations as the Authority and Enforceability. The Shareholder
hereby represents to the Buyer as follows: this agreement constitutes the valid
and binding obligation of the Shareholder enforceable in accordance with its
terms. The Shareholder's execution and delivery of this agreement, and
compliance with the provisions of this agreement will not violate any provision
of law applicable to him and will not conflict with or result in any breach of
any of the terms, conditions, or provisions of, or constitute a default under,
any contractual obligations of Shareholder nor any court or other governmental
order applicable to the Shareholder.
3. Inspection Rights; Non-Marketability of Shares; Restrictions on
Transfer. The Shareholder acknowledges and agrees that:
(a) Inspection Rights. Prior to the date hereof, all documents,
information, records, and books pertaining to this investment have been, made
available for inspection by Shareholder, and the Shareholder's attorney and/or
accountant.
(b) Non-Marketability of Shares. No representations or promises have
been made concerning the marketability or value of the Shares. The Shareholder
agrees that because the Shares have not been registered under the Securities Act
or relevant state securities laws, they cannot be resold or transferred unless:
(i) they are subsequently registered under such laws or exemptions from
registration are available; and (ii) Buyer receives an opinion of counsel
satisfactory to it and its counsel that such transfer complies with Federal and
state securities laws. Neither Buyer nor any of its officers, directors, or
shareholders have represented to the Shareholder that the Shares will be
registered under the Securities Act or relevant state securities laws at any
time in the future or otherwise qualified for sale under applicable securities
laws. Buyer does not presently intend to make available to the public
information concerning itself so as to permit shareholders to use Rule 144 of
the Rules and Regulations under the Securities Act for transfer of the Shares.
(c) Restrictions on Transfer. Shareholder agrees to the following
restrictions on the transfer of the Shares, and in any other agreement between
Buyer and the Shareholder:
No transfer will be permitted: (A) which would violate any applicable law,
statute, or regulation, including, but not limited to, any Federal or
state securities laws; or (B) which would require registration under any
Federal or state securities laws.
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With respect to any proposed transfer, Buyer may, at its option, require an
opinion of counsel acceptable to it to the effect that any proposed transfer is
not prohibited under items (A) or (B), above.
(d) Legends on Certificates. Any stock certificates evidencing the
Shares shall bear the following legends:
The securities represented hereby have not been registered under the
Securities Act of 1933 (the "Act") or any state securities law and may not
be sold or transferred unless (i) a registration statement covering these
securities is effective under the Act or (ii) the transaction is exempt
from registration under the Act and any applicable state securities laws
and, if the corporation requests, an opinion satisfactory to the
corporation to such effect has been rendered to the corporation by counsel
satisfactory to the corporation.
THESE SECURITIES HAVE BEEN ISSUED OR SOLD IN RELIANCE ON PARAGRAPH (13) OF
CODE SECTION 10-5-9 OF THE "GEORGIA SECURITIES ACT OF 1973," AND MAY NOT
BE SOLD OR TRANSFERRED EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER SUCH
ACT OR PURSUANT TO AN EFFECTIVE REGISTRATION UNDER SUCH ACT.
The securities represented hereby are subject to restrictions on transfer
and may not be sold, exchanged, transferred, pledged, hypothecated, or
otherwise disposed of except in accordance with and subject to all the
terms and conditions of a certain Stock Subscription Agreement dated June
27, 1997, a copy of which the corporation will furnish to the holder upon
request and without charge.
Further restrictive legends may also be inscribed as in the opinion of counsel
are necessary to comply with Federal and state securities laws.
4. Lock-Up Agreement. In the event of an underwritten public offering of
Buyer's securities, the Shareholder (and any permitted transferee thereof),
whether or not any shares of capital stock of the Buyer owned by the Shareholder
(or any permitted transferee thereof) are included in such registration, hereby
agrees not to effect any public sale or distribution, including any sale
pursuant to Rule 144 under the Securities Act, of any equity securities of Buyer
(other than as part of such underwritten offering), without the consent of the
managing underwriter(s) for such offering (the "Managing Underwriter"), during a
period commencing on the effective date of such registration and ending 180
calendar days thereafter, or such lesser period as the Board of Directors of
Buyer and the Managing Underwriter shall determine is required to effect a
successful offering.
5. Miscellaneous.
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(a) Amendment. This agreement may not be amended, in whole or in
part, except by an instrument in writing signed by the Buyer and the
Shareholder. In the event of termination of the Stock Purchase Agreement
according to its terms, this agreement shall also terminate and the parties
shall have no further obligations to each other hereunder except for prior
breach hereof.
(b) Binding Effect. This agreement shall be binding on and for the
benefit of the parties hereto and their respective successors, heirs, personal
representatives and permitted assigns; provided, that the Shareholder shall not
be entitled to assign or delegate any of the Shareholder's rights or obligations
under this agreement without the prior written consent of Buyer.
(c) Counterparts. This agreement may be executed in one or more
counterpart copies, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.
(d) Entire Agreement. Any oral or written statements,
understandings, correspondence, or agreements previously made by any party with
respect to the subject matter of this agreement are superseded by this agreement
(including any Exhibits attached hereto and specifically referenced by this
agreement), which alone fully and completely expresses the parties' respective
obligations. This agreement is entered into by each party after opportunity for
investigation, and each party represents that such party is not relying upon any
statements, understandings, correspondence, or agreements not embodied in this
agreement and made by any other party or on any other party's behalf.
(e) Governing Law. This agreement shall be governed exclusively by
Vermont law.
(f) Notices. Any notice or other communication required or permitted
under this agreement shall be in writing and shall be deemed to have been duly
given (i) upon hand delivery, or (ii) on the third day following delivery to the
U.S. Postal Service as certified or registered mail, return receipt requested
and postage prepaid, or (iii) on the first day following delivery to a
nationally recognized United States overnight courier service, fees prepaid,
return receipt or other confirmation of delivery requested or (iv) when
telecopied or sent by facsimile transmission if an additional notice is also
given under (i), (ii) or (iii) above within three days thereafter. Any such
notice or communication shall be directed to a party at its address set forth
below or at such other address as may be designated by a party in a notice given
to all other parties hereto in accordance with the provisions of this Section.
Buyer: Rock of Ages Corporation
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn.: Xx. Xxxx X. Xxxxxxx,
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Chairman of the Board and
Chief Executive Officer
Shareholder: See Exhibit 1(a)
(g) Severability. Each term, condition, and provision of this
agreement shall be valid and enforced to the fullest extent permitted by law. If
there is any conflict between any term, condition, or provision of this
agreement and any statute, law, ordinance, order, rule, or regulation, the
latter shall prevail; provided, that any such conflicting term, condition, or
provision shall be curtailed and limited only to the extent necessary to bring
it within the legal requirements and the remainder of this agreement shall not
be affected thereby.
(h) Waiver. No waiver by any party of any breach or default by any
other party of any of such other party's obligations under this agreement shall
be deemed to be a waiver of any other breach or default of the same or any other
nature. No failure by any party on any one or more occasions to exercise any
right or remedy provided in this agreement shall preclude the exercise of such
right or remedy on any other occasion.
(i) Survival of Covenants and Representations. All covenants and
representations of the parties contained in this agreement shall survive the
execution and delivery of this agreement and the closing of the transactions
contemplated hereby.
IN WITNESS WHEREOF, the parties have executed this agreement all as of the
date first above-written.
Buyer:
Witness: ROCK OF AGES QUARRIES, INC.
------------------------------ By: /s/ Xxxx X. Xxxxxxx
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[Print Name] Xxxx X. Xxxxxxx, Chairman of the Board
President and Chief Executive Officer
------------------------------ /s/ Xxxxxx Xxxx Childs, III
------------------------------ ----------------------------------
[Print Name] Xxxxxx Xxxx Childs, III
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EXHIBIT 1-a
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Shareholder Name & Address
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Xxxxxx Xxxx Childs, III
000 Xxxxxxx
Xxxxxxxx, Xxxxxxx 00000
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