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Exhibit 10.13
STOCK SUBSCRIPTION AGREEMENT
This Stock Subscription Agreement is dated as of July 30, 1997 and is by
and among ROCK OF AGES CORPORATION, a Vermont corporation (the "Buyer"), and
National Memorial Corporation, a Kentucky corporation with an address of 0000
Xxxxx Xxxxx, Xxxxxxxxxxxxx, Xxxxxxxx 00000 (the "Seller"), which is one of the
corporations which are members of the KMC Group.
RECITALS:
1. On the date of this agreement, the Buyer, the Seller and the other
members of the KMC Group (the "Sellers") executed a Asset Purchase Agreement
(the "Asset Purchase Agreement") whereby (a) the Buyer has agreed to purchase
from the Sellers, and the Sellers have agreed to sell to the Buyer substantially
all of their Assets, and (b) the Buyer has agreed to issue to Seller, and Seller
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
Seller for its portion of the Assets being sold to Buyer.
2. The Buyer and Seller intend that the issuance to Seller 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 offer and registration requirements of the
Securities Act of Kentucky, KRS Chapter 292 (the "Kentucky Act"), and,
accordingly, the Buyer has requested that the Seller, and the Seller has agreed
to, enter into this agreement and to make certain representations and covenants
describing the Seller's access to the Buyer's financial and other information
reasonably necessary to the Seller's ability to make an informed business
decision whether to invest in the Buyer and describing the Seller'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 Asset 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, Seller hereby agrees with the Buyer as
follows:
1. Investment Representations of the Seller. The Seller hereby represents
and warrants to the Buyer as follows:
(a) The Seller has adequate financial means of providing for the
Seller's current business needs and possible business contingencies, has no need
for liquidity of this
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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 Seller is an "accredited investor", within the meaning of Rule 501(a) of
Regulation D under the Securities Act.
(b) The Seller 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 Buyer's business, the Seller is in a position to
weigh, and assess such knowledge and information in a meaningful fashion.
(c) The Seller 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 Seller 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 Seller acknowledges that the Seller is
acquiring the Shares without being furnished any offering literature or
memorandum.
(e) The Seller is acquiring and purchasing the Shares solely for
investment for its 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 Seller acknowledges that Seller 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 Asset Purchase Agreement and the issuance of Shares to the
Shareholder pursuant to the Asset Purchase Agreement. The Seller further
acknowledges that Seller has been given full opportunity to receive copies of or
examine any and all other minutes of shareholder and director meetings of the
Buyer.
(g) The Seller 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 Seller may have to
hold the Shares indefinitely without the possibility of liquidating the Seller's
investment in the Buyer.
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2. Representations as the Authority and Enforceability. The Seller hereby
represents to the Buyer as follows: this agreement constitutes the valid and
binding obligation of the Seller enforceable in accordance with its terms. The
Seller's execution and delivery of this agreement, and compliance with the
provisions of this agreement will not violate any provision of law applicable to
it 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 Seller nor any court or other governmental order applicable to
the Seller.
3. Inspection Rights; Non-Marketability of Shares; Restrictions on
Transfer. The Seller 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 Seller and the Seller'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 Seller 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 Seller 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 its equity securities.
(c) Restrictions on Transfer. Seller agrees to the following
restrictions on the transfer of the Shares, and in any other agreement between
Buyer and the Seller:
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.
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
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(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.
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 Asset Purchase Agreement dated July 30,
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, Seller (and any permitted transferee thereof), whether or
not any shares of capital stock of the Buyer owned by the Seller (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.
(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 Seller. In
the event of termination of the Asset 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 Seller shall not be
entitled to assign or delegate any of the Seller'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.
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(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,
Chairman of the Board, President 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
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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 CORPORATION
-------------------------------- By: /s/ Xxxx X. Xxxxxxx
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[Print Name] Xxxx X. Xxxxxxx, Chairman of the Board,
President and Chief Executive Officer
SELLER:
NATIONAL MEMORIAL CORPORATION
-------------------------------- By: /s/ Xxx X. Xxxxx, Xx.
-------------------------------- --------------------------------
[Print Name] Xxx X. Xxxxx, Xx., President
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EXHIBIT 1-a
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Seller Name & Address
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National Memorial Corporation
0000 Xxxxx Xxxxx
Xxxxxxxxxxxxx, XX 00000
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