EXHIBIT 10.26

 

AUTHORIZED RETAILER, SUPPLY, AND LICENSE AGREEMENT

 

This Authorized Retailer, Supply, and License Agreement ("Agreement") is made
this ____ day of January, 2008, by and among ROCK OF AGES CORPORATION, a
Delaware corporation with its principal office located at 560 Graniteville Road,
Graniteville, Vermont  05654 ("ROA" or "Supplier"); and PKDM HOLDINGS, INC., a
Kentucky corporation with its principal office located at 1407 N. Dixie Highway,
Elizabethtown, KY  42702,  (the "Parent"), North American Heritage Services,
Inc., a Delaware corporation with its principal office located at 1407 N. Dixie
Highway, Elizabethtown, KY  42702, ("NAHS"), KEITH MONUMENT COMPANY, LLC, a
Delaware limited liability company with its principal office located at 1407 N.
Dixie Highway, Elizabethtown, KY  42702, ("Keith"), and SIOUX FALLS MONUMENT
CO., INC. , a South Dakota corporation with its principal office located at 4901
West 12th Street, Sioux Falls, SD  57106 ("Sioux Falls") (Parent, NAHS, Keith,
and Sioux Falls, are collectively referred to herein as "Retailer").

 

RECITAL:

 

WHEREAS, Supplier and Parent have entered into a Stock Purchase Agreement dated
January 17, 2008 (the "Purchase Agreement") pursuant to which ROA has agreed to
sell, and Parent has agreed to purchase, all of the issued and outstanding
capital stock of ROA's wholly owned direct subsidiary, Rock of Ages Memorials,
Inc., now known as North American Heritage Services, Inc.;

 

WHEREAS, the Parent owns one hundred percent (100%) of the issued and
outstanding capital stock of NAHS and NAHS owns one hundred percent (100%) of
the issued and outstanding membership interests of Keith Monument Company, LLC
("Keith") and one hundred percent (100%) of the issued and outstanding capital
stock of Sioux Falls Monument Co., Inc. ("Sioux Falls" and, together with NAHS
and Keith, the "Retail Division");

 

WHEREAS, ROA designs, manufactures and sells granite memorials and monuments
(collectively, "Memorials") and granite mausoleums, columbaria, civic memorials,
niches, cemetery features and estate memorials (defined generally as memorials
with a retail price to the end consumer of ***) (collectively, "Mausoleums");

 

WHEREAS, pursuant to the Purchase Agreement and as a condition to closing
thereunder, Retailer has agreed to enter into a supply agreement with ROA for
its requirements for Memorials; and

 

WHEREAS, Rock of Ages and Retailer believe it is in their mutual interests for
Retailer to be appointed as an Authorized Retailer of ROA (a "Rock of Ages
Authorized Retailer"), for ROA to supply all of Retailer's requirements for Rock
of Ages® and other branded Memorials ("Branded Memorials" or "Branded Memorials
Products"), for ROA to supply all of Retailer's requirements for Mausoleums (as
limited in Section 3 below), and for ROA to grant Retailer a nonexclusive,
limited license to use ROA's tradenames, trademarks, copyrights and other
intellectual property during the term hereof, all upon the terms and conditions
hereinafter set forth.

 

 

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NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are herein acknowledged, the parties hereto agree as follows:

     

1.

Appointment.  ROA hereby appoints Retailer as a Rock of Ages Authorized Retailer
for the retail locations listed on Schedule 1 attached hereto, subject to the
terms and conditions provided herein.

     

2.

Term.  The initial term of this Agreement shall be for five (5) years ("Initial
Term"), commencing on the Closing Date (as that term is defined in the Purchase
Agreement).  This Agreement shall automatically renew for an additional five (5)
year term ("Renewal Term") unless either party provides written notice of its
intention not to renew the Agreement at least six (6) months prior to the
expiration of the Initial Term.

     

3.

Supply of Memorials - Retailer's Requirements.  During the Term (defined below)
and any renewal term hereof, Retailer shall purchase, and ROA shall supply, all
of Retailer's requirements for (i) Branded Memorials and (ii) Mausoleums. 
Retailer shall not purchase any branded Memorials from any supplier other than
ROA, unless ROA has given its prior written consent to such proposed purchase of
Memorials by Retailer from another supplier; provided that Retailer may continue
to sell Memorials under the brand name Golden Rule if Retailer, or ROA, does all
the sandblasting of said Golden Rule brand.  Notwithstanding the foregoing,
Retailer may purchase so-called "doghouse" style side by side or over/under
mausoleums fabricated of granite not quarried by Rock of Ages from other
suppliers.  No consent given under this Section shall constitute a waiver of the
requirements of this Section or a consent to any different or future
transaction.

     

4.

Pricing.

a.

Prices shall be ROA's wholesale prices as in effect from time to time, ***.  
All prices and terms are subject to change by ROA from time to time with thirty
(30) days prior written notice.  The *** wholesale pricing provided in this
section shall not be subject to change during the Initial Term hereof.

b.

Notwithstanding Section 4.a of this Agreement, pricing for any Mausoleums
supplied by ROA shall be negotiated on a case-by-case basis.

5.

Shipping.  Products purchased by Retailer pursuant to this Agreement will be
shipped, *** to the locations agreed upon by Retailer and ROA.

 

 

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6.

Territories and Exclusivity.

a.

Exclusive Territories.  Retailer acknowledges that its appointment as Rock of
Ages Authorized Retailer hereunder is made on a nonexclusive basis.  Retailer
further acknowledges that ROA has appointed other independent Authorized
Retailers throughout North America whose territories may currently overlap with
the Exclusive Territories described below.  ***  Nothing in this Agreement
prevents Retailer from making a sale to a customer outside the Exclusive
Territories, but ROA encourages its authorized retailers to refer customers
outside its Exclusive Territories to the Rock of Ages Authorized Retailer
responsible for that territory. ***.

       

b.

Exceptions for Mausoleums, Cemetery Features, Columbaria and Niches. 
Notwithstanding Section 6.a of this Agreement and subject to Section 6.c of this
Agreement, ROA may sell private mausoleums, columbaria, niches and cemetery
features in the Exclusive Territories directly to funeral directors, cemeteries,
memorial retailers or consumers.  ROA and the Retailer will (in accordance with
Section 6.c) communicate and cooperate with regard to such sales in the
Exclusive Territories so as to maximize the sales of ROA products in the
Exclusive Territories depending on market conditions in the Exclusive
Territories.

c.

Cooperation in Sale of Mausoleums, Cemetery Features, Columbaria and Niches. 
ROA and Retailer agree that ROA has and will continue to promote the sale of
private mausoleums, columbaria, niches and cemetery features (collectively the
products) in cemetery, funeral director and memorial retailer trade magazines
and at national and major regional cemetery and funeral home conventions. As a
result, ROA receives many direct calls  for these products from cemeteries,
funeral homes, memorial retailers and from consumers or their contractors,
architects or other representatives with respect to sales of private mausoleums.
With respect to sales leads for sales of these products to be set in the
Exclusive Territories originally initiated by Retailer to ROA, ROA agrees to
work solely in cooperation with Retailer to mutually close such sales. With
respect to sales leads for sales of private mausoleums to be set in the
Exclusive Territories initiated by persons or entities other than ROA *** ROA
agrees that prior to giving any price to the buyer it will contact Retailer to
provide knowledge of the project and background information. ROA and Retailer
agree that this notification is to avoid loss of the sale to ROA and/or
unintended embarrassment to either ROA or Retailer as a result of poor
communication between them.  ***

 

 

 

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7.

Minimum Purchase.  .  Retailer and ROA  expect Retailer to purchase a minimum
total of $3,500,000 (as adjusted in accordance with Section 9.b) of Branded
Memorial Products and unbranded Memorials per calendar year from ROA, excluding
any Mausoleums, ("Minimum Annual Purchase").  In the event that the Retailer
fails to meet the Minimum Annual Purchase requirement in any year, the Retailer
will, at its option, either add the shortfall to the Minimum Annual Purchase
requirement for the following year (hereinafter a "Shortfall Roll Over") or pay
to ROA an amount equal to the average gross profit ROA would have earned on the
shortfall based on the actual average gross margin percentage of profit ROA has
earned on sales to the Retailer (excluding Mausoleums) from the date of this
Agreement through the year in which the shortfall occurs , but in no case shall
the payment be computed at any gross margin percentage greater than ***). If
Retailer fails to make the Minimum Annual Purchase in a particular year and
elects to increase the Minimum Annual Purchase by a Shortfall Roll Over and then
fails in the following year to purchase the Minimum Annual Purchase plus the
added Shortfall Roll Over from the prior year, Retail may not elect to take an
additional Shortfall Rollover for that year without the prior written consent of
ROA.

 

8.

Promotional and Presentation Materials.  ROA agrees to make available to
Retailer though approved third party suppliers, or, alternatively, directly at
ROA's cost therefor plus shipping and a nominal handling charge, sales
presentation books, direct mail materials, display materials, and various other
advertising and sales materials for Rock of Ages® branded memorials (the
"Promotional Materials").

 

9.

Additional Locations and Sale of Retail Hubs

       

a.

Additional Locations.  If Retailer opens or acquires a new outlet (any new store
opened or retailer acquired by Retailer after the date hereof is referred to
herein as an additional retail location),  Retailer agrees that any additional
retail location shall not in any way be held out as a Rock of Ages Authorized
Retailer and shall not be included under the terms and provisions hereof, unless
Retailer has obtained the prior written consent of ROA in the form of an
amendment to this Agreement specifically including such additional retail
location in Schedule 1 and the applicable Exclusive Territories in Schedule 6 of
this Agreement.  ROA shall have the right in its sole discretion not to consent
to an additional retail location or to having additional retail locations
covered by this Agreement. If Retailer does not obtain such prior written
consent and nevertheless operates the additional retail location as a Rock of
Ages Authorized Retailer selling memorials provided by ROA, or bearing ROA seals
or trademarks, or being  otherwise held out as a Rock of Ages Authorized
Retailer, such action shall be a breach of this Agreement by Retailers.

 

 

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b.

Sale of Retail Hubs.  If the Retailer sells or permanently closes any retail
store that was operated by Retailer on the date of this Agreement without
opening a new store consented to by ROA, or maintaining an existing store,
within a *** radius of such closed or sold store, such sold or closed  store
will no longer be a Rock of Ages Authorized Retailer under this Agreement and
the Exclusive Territory set aside for such store will be eliminated.  The
Minimum Annual Purchase requirement described in Section 7 above will be
adjusted downward by an amount equal to the three year average annual purchases
(excluding Mausoleums) of such closed or sold store.  Such adjustment will be
effective immediately upon the sale of such store and will be applied pro rata
for the current year. Upon the request of either party, ROA and Retailer each
agree to sign an appropriate written amendment to this Agreement reflecting the
agreed modifications hereto resulting from the closure or sale of such store.

 

10.

Signage.  Retailer acknowledges that signs bearing the Rock of Ages trademark
and name are in place at all retail locations comprising the Retail Division. 
ROA acknowledges that each of the existing signs at retail locations of the
Retail Division are the property of the Retailer.  At any of Retailer's
locations where Rock of Ages® branded products are sold and signs are not in
place, ROA may, in its sole discretion, provide and install signage bearing the
Rock of Ages trademark and other information consistent with its plan to
strengthen the brand image of Rock of Ages. These signs remain the property of
ROA and will be removed by ROA on the termination of this Agreement.
Alternatively, Retailer will install signage acceptable to ROA, purchased from a
third party, at Retailer's expense, approved in writing by ROA prior to
purchase.  Retailer may have the option to pay for all or a part of such
materials through various ROA sponsored marketing programs, as in effect from
time to time, unless Retailer's discount for pricing purposes includes
allowances for such materials.   Notwithstanding the above, Retailer agrees that
if this Agreement is terminated, expires, or Retailer otherwise ceases to be an
Rock of Ages Authorized Retailer, all signage owned by Retailer and bearing the
Rock of Ages name and/or seal shall be removed or covered over to remove all
visible references to Rock of Ages and any Rock of Ages trademark, in accordance
with Sections 25 and 26 hereof.

 

11.

ROA Website.  ROA agrees to list the Retailer on its website, including a
profile of Retailer's locations, at no charge to Retailer. ROA further agrees to
use its commercially reasonable efforts to accommodate Retailer's reasonable
requests regarding search engines and links to assure customers in Retailer's
Exclusive Territory may access its web page profile.

 

 

 

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12.

Suggested List Prices.  It is the corporate policy of ROA to make available to
consumers a full range of memorial value options ranging from lower quality and
lower priced memorials with a limited warranty, to its highest quality,
perpetually warranted Signature and Sealmark Rock of Ages brand lines. As a part
of this program, ROA currently provides a range of branded product lines
representing good value, better value, and the best value, and a Signature line
of signed and numbered memorials as its top of the line brand. Through
independent market research and ongoing experience, ROA establishes pricing for
its Branded Memorial Products to attempt to match the price of each brand line,
including the differentials between brand lines, to the value the consumer
perceives he or she is receiving by buying good, better or best memorials. ROA
will provide such suggested list pricing to retailer in the form of the retail
price lists. ROA understands and agrees the Retailer has no obligation to
utilize such price lists and may re-sell the Memorial Products at any price
selected by Retailer.

 

13.

Business Facilities and Display Areas.  ROA expects the displays and business
facilities of its authorized retailers to be neat, clean and well maintained to
standards comparable to or better than other retailers of memorials in
Retailer's market area. ROA acknowledges that the current condition of
Retailer's current facilities meet such standards.  If requested by Retailer,
ROA will provide at no charge to Retailer suggested design and layout proposals
for the display area, exterior appearance and interior appearance to enhance the
facilities prepared by ROA personnel.

 

14.

Memorial Designs.  ROA has a very large library of memorials designs as well as
designers in its manufacturing operations. ROA will provide access to these
designs to Retailer. Retailer acknowledges and agrees that ROA owns the
copyright in such designs and that materials in the retail stores comprising the
Retail Division (or any other additional retail locations authorized hereunder)
and containing such designs, including design books, remain the property of
ROA.  Retailer agrees that it will not reproduce any such materials and will not
remove any copyright designation on such materials.  In the event this Agreement
is terminated, expires, or Retailer otherwise ceases to be a Rock of Ages
Authorized Retailer, they shall remove from design books in their possession any
materials showing ROA branded designs or ROA copyrighted material.  ROA will
also provide reasonable design services for Retailer for personalized memorials
for Retailer's customers at ROA's costs for design services, renderings and the
like.

 

15.

Sandblast, Lettering and Carving Quality Standards.  All Signature line
memorials will be carved and lettered only by ROA.

 

 

 

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16.

Warranty.  ROA warrants that any unbranded Memorials supplied to Retailer by ROA
that do not have an express written warranty to the ultimate consumer from ROA
will be manufactured in a workman like manner in accordance with the written
product specifications.  OTHER THAN THE WARRANTIES EXPRESSLY PROVIDED IN THIS
SECTION, AND THE FURTHER WARRANTY THAT THE PRODUCTS SHALL, AT THE TIME OF
DELIVERY, BE FREE FROM LIENS OR OTHER DEFECTS IN TITLE, ROA MAKES NO WARRANTIES
AND THE PRODUCTS ARE SOLD "AS IS" WITHOUT ANY WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE.  IN NO EVENT SHALL ROA BE LIABLE FOR (1) PROPERTY DAMAGE OR PERSONAL
INJURY UNLESS CAUSED BY THE GROSS NEGLIGENCE OR INTENTIONAL MISCONDUCT OF ROA OR
(2) INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES, OR FOR LOSS OF PROFITS,
ARISING OUT OF THE USE OF OR INABILITY TO USE BRANDED MEMORIAL PRODUCTS OR
UNBRANDED MEMORIALS WHETHER ON ACCOUNT OF TORT, CONTRACT OR OTHERWISE.

 

17.

Industry Relations.  Retailer and ROA will cooperate to develop close
relationships with local cemeteries and funeral directors. Retailer will advise
ROA of any act or practice by any cemetery in its territory that restricts the
consumer's freedom of choice or adversely impacts the Rock of Ages brand image.

 

18.

Best Efforts to Promote and Sell Brands.  During the term of this Agreement,
Retailer agrees to use its best efforts to promote vigorously the sale of ROA's
Branded Memorial Products; to carry at all times a sufficient inventory of
Branded Memorial Products to promote sales; to prominently display the Branded
Memorial Products in the manner requested by ROA; and to place orders with ROA
far enough in advance to prevent an inventory shortage.

 

19.

Timely Payments.  Retailer agrees to pay for all Memorial Products and
Promotional Materials promptly in accordance with ROA's terms of sale, as
established from time to time by ROA.  Failure to pay ROA on a timely basis will
result in termination of this Agreement by ROA.

 

 

 

 

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20.

Tradenames and Trademarks.

a.

Limited Nonexclusive License. 

ROA hereby grants to Retailer a limited, nontransferable, nonexclusive license
to use the tradenames and trademarks listed on Schedule 20 in connection with
its sale of Branded Memorial Products.  Retailer understands and agrees that the
trade name ROCK OF AGES and all of ROA's trademarks and tradenames are the
exclusive property of ROA and that all usage shall inure to the benefit of ROA,
and Retailer will not use the words "ROCK," "AGES," or "ROCK OF AGES" or any of
ROA's trademarks or tradenames, or any words or mark which is likely to be
similar to or confusing with ROA's trademarks and tradenames, either separately
or in combination with other words or in connection with Retailer's firm name,
corporation, or registered name, either during the term of this Agreement or
thereafter, except by virtue of and in accordance with the express written
consent of ROA; provided, however, the parties agree that the trademark or
tradename "Golden Rule" is the exclusive property of NAHS and that ROA has no
rights therein or claim thereon.  Retailer agrees to respect ROA's trademarks,
tradenames, copyrights, and patents on designs of monuments and markers,
processes, and machinery, and not to infringe in any way or become a party to
infringement by others, and will not perform any act contesting or impairing any
part of ROA's right, title and interest in ROA's trademarks and tradenames,
including any registrations thereof, during the term of this Agreement or any
time thereafter, and not to represent any other memorial product as a Branded
Memorial Product or an ROA product either during the life of this Agreement or
thereafter.  Retailer will likewise not use any of ROA's tradenames or
trademarks in any newspaper, magazine, or other printed materials, or in any
radio, television, electronic, world-wide web or other advertising or
promotional media of any kind in connection with prices below those published in
the then current Rock of Ages Retail Price Guide, rebates, cash discounts,
merchandise or service giveaways, or other promotion program or advertising
which in any way diminishes the reputation, quality, warranties, or markets for
the Branded Memorial Products. Nothing in the foregoing sentence is intended to
prohibit retailer from promoting such programs without using ROA's tradenames or
trademarks or from selling Branded Memorial Products at discounted prices. 
Retailer acknowledges that its rights hereunder to use ROA's tradenames,
trademarks, copyrights and other proprietary rights are limited and
non-exclusive and may only be exercised in accordance with this Agreement and
terminate on the expiration or termination of this Agreement.  Retailer agrees
that ROA has the exclusive right to use and license the use of ROA's tradenames
and trademarks, including but not limited to the Signature Rock of Ages seal,
the Sealmark Rock of Ages seal, the words "ROCK OF AGES", any ROA sub-brand, on
or in connection with memorials of every type, and in connection with the
advertising, sale or offering for sale of such Branded Memorial Products. 
Retailer agrees that after the termination or expiration of this Agreement, or
if Retailer otherwise ceases to be a Rock of Ages Authorized Retailer, the
license granted hereunder and its rights to use ROA tradenames, trademarks,
copyrights, patents or other proprietary rights shall immediately cease and
thereafter Retailer shall not use any  ROA tradenames, trademarks, copyrights,
patents or other proprietary rights in any manner whatsoever, including, but not
limited to, the use of ROA tradenames or trademarks on signs or other locations
at its business premises, or in connection with any memorial products, or in
connection with the advertising, sale, or offering for sale of any memorial
products, and more particularly, any seals similar to those of ROA or the words
ROCK OF AGES in any manner whatsoever.

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b.

Outreach Activities

ROA hereby acknowledges and agrees that Retailer may continue to enter into
so-called "Outreach" referral or sales agent agreements with funeral homes,
cemeteries or other entities or persons (the "Outreach Partner" or "Outreach
Partners") within the Exclusive Territories only.  Retailer shall use Outreach
agreements in form and substance reasonably satisfactory to ROA, which
agreements shall provide that the Outreach Partner shall have a limited,
nonexclusive sublicense to use the tradenames and trademarks listed on Schedule
20 in connection with its sale of Branded Memorial Products, or in connection
with the referral of customers to Retailer.  The agreements shall further
provide that the Outreach Partner understands and agrees that the trade name
ROCK OF AGES and all of ROA's trademarks and tradenames are the exclusive
property of ROA, and that the Outreach Partner will not use the words "ROCK,"
"AGES," or "ROCK OF AGES" or any of ROA's trademarks or tradenames either
separately or in combination with other words or in connection with the Outreach
Partner's firm name, corporation, or registered name, either during the term of
the applicable agreement or thereafter.  Retailer shall make reasonable efforts
to ensure that each Outreach Partner adhere to the terms of the license grant to
Retailer made herein, and Retailer shall provide a list of all Outreach Partners
and copies of all Outreach agreements to ROA not less than quarterly during the
Initial Term or Renewal Term, as the case may be.  Retailer shall take such
reasonable action as may be required by ROA to ensure that the Outreach Partners
are in compliance with the terms of their respective sublicenses and the
integrity and ownership of ROA's trademarks or tradenames are not compromised in
any way.

     

21.

Business Ethics.  Retailer agrees to make no statements in its advertising or
sales activity that are unfair, untrue in any material respect, or likely to
prove damaging to ROA.

     

22.

Termination

a.

Expiration.  This Agreement shall terminate upon the expiration of the Initial
Term or Renewal Term, as the case may be.

 

b.

Termination for Cause.

i.

Either party may terminate this Agreement for Cause.  For the purposes of this
Agreement, "Cause" shall include, without limitation, in the case of ROA or
Retailer, Retailer's or ROA's (as applicable) default in the performance of any
of its material obligations hereunder or under the Purchase Agreement, any
Commercial Lease Agreement between the parties; or, in the case of either party,
if either party shall, under any federal or state law relating to insolvency or
relief from debtors (a "Bankruptcy Law") commence a voluntary case or
proceeding, or consent to the entry of an order for relief against it in an
involuntary case, consent to the appointment of a trustee, receiver, assignee,
liquidator or similar official, make an assignment for the benefit of creditors
(each a "Bankruptcy Default"); or if either party is unable to pay its debts as
they become due. 

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ii.

The party purporting to terminate this Agreement shall give the other party
written notice of termination for Cause ("Termination Notice").  Termination
shall be effective (i) immediately upon delivery of Termination Notice to the
such party if the stated Cause is a payment default, (ii) immediately upon
delivery of a Termination Notice to the such party if the stated Cause is a
Bankruptcy Default, (iii) immediately upon delivery of a Notice of Termination
if the stated Cause is not curable, or (iv) if the stated Cause is curable, upon
the expiration of ten (10) days from the delivery of a Termination Notice if
such party has failed to cure the Cause for termination within such 10-day
period or, if cure requires more than ten (10) days, has failed to provide the
terminating party with an acceptable plan to cure the stated Cause within a
period which shall not exceed thirty (30) days.

iii.

Rights under this Section are in addition to, not exclusive of, such remedies as
are provided for under applicable law and in this Agreement.

       

c.

No Termination Without Cause.  Other than expiration of the Term pursuant to
Section 22.a and termination for Cause in accordance with Section 22.b, neither
party shall have the right to terminate this Agreement.

 

23.

Buy-Back of Branded Inventory.   In the event this Agreement is terminated for
any reason, ROA shall have the continuing option to purchase from Retailer all
or any portion of the Branded Memorial Products then in Retailer's possession. 
Retailer shall permit a representative of ROA to inspect and inventory all
Branded Memorial Products in Retailer's possession at any time after notice of
termination and for a period of one hundred eighty (180) days after the
effective date of termination. Within thirty (30) days after said inspection,
ROA will notify the Retailer in writing of whether or not it intends to exercise
its option. Prior to ROA's exercise of its option to purchase the Branded
Memorial Products from Retailer, Retailer may sell the Branded Memorial Products
in the ordinary course to consumers, but shall not in any way hold itself out as
a Rock of Ages Authorized Retailer.

 

24.

Purchase Price and Payment for Inventory.  In the event ROA exercises its option
to repurchase the Branded Memorial Products as provided above, it will pay
Retailer within thirty (30) days after exercising its option the same net price
paid by Retailer for the Branded Memorial Products (less the cost for ROA to
repair any damaged Branded Memorial Products) plus freight charges incurred by
Retailer in transporting the Branded Memorial Products from ROA's manufacturing
facility to Retailer's place of business, all as verified or re-verified by
ROA's representative. Retailer agrees to sell to ROA on said terms if ROA
exercises its option hereunder.  ROA will pay all freight charges of removing
the Branded Memorial Products from Retailer's place of business. Retailer hereby
agrees not to damage, deface or otherwise destroy the Branded Memorial Products
and further agrees that ROA and its agents shall have the right of access to the
Branded Memorial Products on Retailer's property for inspecting and removing the
Branded Memorial Products and Retailer will provide full cooperation and
assistance to facilitate their removal. In the event Retailer fails to permit
access or cooperate, Retailer shall be responsible for all costs and expenses,
including legal, fees, incurred by ROA to enforce this provision. Upon the
election by ROA to purchase any or all of Retailer's Branded Memorial Products
hereunder, Retailer shall not thereafter deliver, offer for sale, sell or
attempt to sell any Branded Memorial Products then in Retailer's inventory,
except in completion of any transaction consummated before ROA's election to
purchase the Branded Memorial Products or except as ROA shall agree to in
writing.

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25.

Removal or Painting of Signs.  Upon termination of this Agreement, ROA will
remove at its expense all signs owned and installed by it and Retailer will at
Retailer's expense remove, repaint or re-cover any and all signs or evidence of
its relationship with ROA owned or leased by Retailer, including any reference
to the name Rock of Ages or any of ROA's trademark and tradenames.

 

26.

Termination of Use of Names.  Upon termination or expiration of this Agreement
for any reason, or if Retailer otherwise ceases to be a Rock of Ages Authorized
Retailer, Retailer and its Outreach Partners will not thereafter display,
circulate, use or permit others to display, circulate or use on Retailer's
behalf, any advertising material of any kind or nature which refers to or
displays any ROCK OF AGES® product, the name of ROCK OF AGES®, or in any manner
or fashion makes references to ROA, its Branded Memorial Products, or any seal,
trademark or tradename of ROA.

 

27.

Acts of God.  ROA shall not be liable in damages for failure of performance of
any of the terms of this Agreement if that failure is due to lockouts, floods,
strikes, fire, act of God, inability to obtain labor, machinery, or material to
fulfill its obligation, or for any other cause over which it has no control.

 

28.

No Agency.  It is expressly understood that Retailer is not in any way
constituted the agent or legal representative of ROA for any purpose whatsoever.
Retailer is not granted any right or authority to create or assume any
obligation, expressed or implied, in the name of or on behalf of ROA, or to bind
ROA in any manner or thing whatsoever.

 

29.

No Wholesale Resale.  Except as provided in Section 20b hereof, Retailer
acknowledges and agrees that Branded Memorial Products purchased by Retailer are
intended for resale to retail customers only. Accordingly, Retailer shall not
sell Branded Memorial Products to any person or entity who intends to resell
such monuments, unless Retailer have obtained the prior written consent of ROA
authorizing the sale to that specific reseller.  Consent to a transaction shall
not constitute a waiver of the requirements of this Section and shall not
constitute consent to any future transaction.

 

30.

Non-Transferability.  This Agreement constitutes a personal contract, and
Retailer shall not transfer or assign any part or all of this Agreement without
the prior express written consent of ROA.  A change of majority ownership or
other change of majority economic or voting control of a Retailer which is a
corporation, partnership, limited liability company or other business entity
shall be considered an assignment.

 

31.

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, (iii) on the first day following delivery to a nationally
recognized United States overnight courier services for next business day
delivery with fee prepaid, or (iv) when telecopied or sent by facsimile
transmission if an additional notice is also given under (i), (ii) or (iii)
above within three (3) 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.

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FOR ROA:

 

            Mr. Kurt M. Swenson

            President and Chief Executive Officer

            Rock of Ages Corporation

            369 North State Street

            Concord, NH 03301

            Telephone: (603) 225-8397

            Telecopy:   (603) 225-4801

 

with a copy to (which shall not constitute notice):

 

McLane, Graf, Raulerson & Middleton, Professional Association
P.O. Box 326, 900 Elm Street
Manchester, NH  03105-0326
Attention:          Michael B. Tule, Esq.
Telephone:        (603) 625-6464
Facsimile:         (603) 625-5650
E-mail:              mtule@mclane.com

 

FOR THE RETAILER:

 

PKDM Holdings, Inc.
1407 North Dixie Highway
Elizabethtown, KY  42701
Attention:
Telephone:
Facsimile:

 

with a copy to (which shall not constitute notice):

 

J. David Smith, Jr., Esq.

Stoll Keenon Ogden PLLC

2000 PNC Plaza

500 West Jefferson Street

Louisville, KY 40202

           

 

 

 

 

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32.

Binding Nature.  This Agreement cancels and supersedes all existing Agreements
whether oral or in writing between ROA and Retailer and will be in force and
binding upon each of the parties from the date of this acceptance until canceled
by either party hereto upon written notice as provided for herein. This
Agreement may not be altered, amended, or modified nor any of its provisions
waived except by an Agreement in writing signed by Parent and ROA.

     

33.

No Solicitation of Employees.  During the Term, and for a period of three (3)
years after termination of this Agreement for any reason, neither party shall,
directly or indirectly, solicit or induce any employee of the other party to
leave employment for any reason whatsoever or hire any of such party's
employees, without the express written consent of such party.

     

34.

Arbitration & Governing Law.  Any dispute hereunder shall be settled by
arbitration before a single arbitrator under the Commercial Arbitration Rules of
the American Arbitration Association and judgment upon the award rendered by the
arbitrator may be entered in any court having jurisdiction thereof.  Arbitration
under this Section will take place (i) if initiated by ROA, in Louisville,
Kentucky or (ii) if initiated by the Retailer, in Manchester, New Hampshire. 
The cost of the arbitration shall be borne equally by the parties hereto, but
the arbitrator shall have no authority to award attorneys fees.  This Agreement
shall be governed by the laws of the State of Delaware, without regard to
conflict of laws principles. 

     

35.

Enforceability.  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 in any
statute, law, ordinance, 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.

     

36.

Survival.  This Section and Sections 20, 22, 23, 24, 25, 26, 29, 32, 31, 33, 34
and 35 of this Agreement shall survive the termination of this Agreement.

           

 

Signature page follows.

 

 

 

 

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IN WITNESS WHEREOF, the parties hereto have executed this agreement as of the
date first above written.

WITNESS

ROCK OF AGES CORPORATION

____________________________

By:_____________________________

Kurt M. Swenson, Chairman/CEO

RETAILER:

PKDM HOLDINGS, INC.

_____________________________

By:______________________________

Name/Title:

NORTH AMERICAN HERITAGE SERVICES, INC.,

f/k/a Rock of Ages Memorials, Inc.

_____________________________

By:______________________________

Name/Title:

Keith Monument Company, LLC

_____________________________

By:______________________________

Name/Title:

Sioux Falls Monument Co., LLC

_____________________________

By:______________________________

           

                       
                                                                       
                                                                       

Signature page to Authorized Retailer, Supply, and License Agreement.

 

 

 

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List of Schedules

Schedule 1

List of Retail Locations

Schedule 3

Permitted House Brands

Schedule 6

Maps

Schedule 8

Retail Hubs

Schedule 20

List of Licensed Tradenames and Trademarks

 

 

 

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