1
EXHIBIT 99.13
SUBSCRIPTION AGREEMENT
2
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") is made and entered into this
_________ day of ______________, 19__, between __________________________, a
Washington corporation ("Fund"), and SAFECO Life Insurance Company, a Washington
corporation ("SAFECO Life"), which is a wholly-owned subsidiary of SAFECO
Corporation.
R E C I T A L S :
WHEREAS, The Fund is a recently organized corporation formed to engage in the
business of investing, reinvesting or trading securities, or in any other
business activity incidental to the business of an investment management
company, as such is defined in Section 4(3) of the Investment Company Act of
1940 ("1940 Act"), desires to raise $5,000,000 through the sale to SAFECO
Insurance of 500,000 shares of its Common Stock, par value $.10 per share
("Common Stock"), at a price of $10 per share, and plans, subsequent to the sale
of said shares under this Agreement, to register with the Securities and
Exchange Commission ("Commission") an indefinite number of shares of its Common
Stock for offering and sale under the Securities Act of 1933 ("1933 Act)'
WHEREAS, SAFECO Life is an affiliate of SAFECO Asset Management Company ("▇▇▇")
which has been selected by the Fund to serve as its investment adviser and is
familiar with the advisory activities, management and experience of ▇▇▇, has
received and reviewed the Registration Statement on Form N-1A that the Fund
intends to file with the Commission with respect to the registration of an
indefinite number of shares of its Common Stock and the registration of the Fund
as an investment company under the 1940 Act, has had an opportunity to ask
questions of, and receive answers from, the Fund and ▇▇▇ with respect to the
proposed activities of the Fund, and, upon the basis of the information
available to it, is willing to acquire from the Fund 500,000 of its shares of
Common Stock pursuant to the terms and conditions of this Agreement;
NOW, THEREFORE, in consideration of the mutual promises, covenants, and
warranties contained herein, the Fund and SAFECO Insurance agree as follows:
1. STOCK PURCHASE.
Subject to the terms and conditions of this Agreement, the Fund agrees to
sell to SAFECO Life, and SAFECO Life agrees to purchase from the Fund, 500,000
shares of the Fund's Common Stock ("Shares") at a purchase price of $10 per
share, for an aggregate consideration of $5,000,000.
Upon the execution of this Agreement by the parties and at the request of
the President of the Fund, SAFECO Life shall pay to the Fund $5,000,000 in coin
or currency of the United States of America which, at the time of payment, is
legal tender for the payment of public and private debts and the Fund shall
deliver, or cause to be delivered, to SAFECO Life a stock certificate
representing the Shares signed by duly authorized officers of the Fund and
countersigned by the Fund's transfer agent. It is hereby agreed that the stock
certificate shall bear a restrictive legend in substantially the form set forth
in paragraph 2 of this Agreement.
2. RESTRICTIONS UPON TRANSFER OF SHARES.
The Shares have not been registered by the Fund under the 1933 Act but are
being offered and will be sold to SAFECO Life pursuant to an exemption from the
registration requirements of that Act for transactions which do not involve a
public offering. The Fund does not plan, and is under no obligation to provide
for, any registration of the Shares in the future. SAFECO Life
3
hereby covenants that it will not sell, pledge, hypothecate or otherwise
transfer any of the Shares, or any interest therein, whether or not for
consideration, unless it has previously notified the Fund of the proposed
transfer and delivered to the Fund in legal opinion, in form and substance
satisfactory to the Fund and its counsel, that such transfer is not in violation
of the 1933 Act and applicable state securities laws. Furthermore, the parties
hereby agree, that in view of the restrictions upon transfer, that the stock
certificate representing the Shares shall bear a restrictive legend that is in
substantially the following form:
"The securities represented by the stock certificate have been acquired
pursuant to an investment representation on the part of the purchaser
thereof and shall not be sold, pledged, hypothecated, donated or otherwise
transferred, whether or not for consideration, by the purchaser except upon
the issuance to the corporation of a favorable opinion of its counsel to the
effect that any such transfer shall not be in violation of the Securities
Act of 1933, as amended, and applicable state securities laws."
3. WARRANTIES AND REPRESENTATIONS OF FUND.
The Fund hereby represents and warrants as follows:
(a) The Fund has been duly incorporated and is a validly existing
corporation in good standing under the laws of the State of Washington and has
the corporate power and authority to carry on its business as presently
conducted and to perform its obligations under this Agreement.
(b) The execution, delivery and performance by the Fund of this Agreement
have been duly authorized by all necessary corporate action on the part of the
Fund.
(c) The issuance and sale of the Shares pursuant to this Agreement have been
duly authorized by all necessary corporate action on the part of the Fund and
the Shares have been duly issued and shall, upon receipt of the purchase price
specified in paragraph 1 above, by fully paid and non-assessable and shall
constitute valid and legal binding obligations of the Fund entitled to the
benefits granted to the Fund's shareholders under its Articles of Incorporation
and Bylaws.
(d) Neither the issuance nor sale of the Shares, nor the consummation of any
of the transactions contemplated by this Agreement, will conflict with, result
in a breach of, or constitute a default under, the terms of the Articles of
Incorporation or Bylaws of the Fund, or any indenture, mortgage agreement,
instrument or undertaking to which the Fund is a party or is bound, or any other
or regulation applicable to the Fund of any court, regulatory body,
administrative agency or governmental body having jurisdiction over the Fund.
(e) No consent, approval, authorization or order of any court or
governmental agency or body is required for the issuance and sale of the Shares
or the consummation of the Transactions contemplated by this Agreement.
4. WARRANTIES AND REPRESENTATIONS OF SAFECO INSURANCE.
SAFECO Life hereby represents and warrants as follows:
(a) SAFECO Life has been duly incorporated and is a validly existing
corporation in good standing under the laws of the State of Washington with full
power and authority to own its property and conduct its business and to perform
its obligations under this Agreement.
4
(b) The execution, delivery and performance of this Agreement have been duly
authorized by all necessary corporate action on the part of SAFECO Life.
(c) Neither the execution, delivery, nor performance of this Agreement, nor
the acquisition of the Shares, will conflict with, result in a breach of, or
constitute a default under the terms of the Articles of Incorporation or Bylaws
of SAFECO Life or any indenture, mortgage agreement, instrument or undertaking
to which SAFECO is a party or bound, or any order or regulation applicable to
SAFECO Life of any court, regulatory body, administrative agency, or
governmental body having jurisdiction over SAFECO Life.
(d) No consent, approval, authorization or order of any court or
governmental agency or body is required by SAFECO Life for the acquisition of
the Shares pursuant to this Agreement, except such as has been obtained from the
Insurance Commissioner of the State of Washington.
(e) SAFECO Life is acquiring the Shares for its own account, for investment
purposes and not with a view to the subsequent offering, sale or distribution
thereof and SAFECO Life is not participating, directly or indirectly, in any
plan or scheme involving the resale or distribution of the Shares or any
interest therein.
(f) SAFECO Life has sufficient knowledge and experience in business matters
so as to enable it to evaluate the merits and risks of acquiring the Shares from
the Fund and has sufficient assets to bear the economic risk of losing part or
all of its investment in the Fund.
(g) SAFECO Life acknowledges that it has received and reviewed a copy of the
Registration Statement on Form N-1A that the Fund intends to file with the
Commission with respect to the registration of an indefinite number of shares of
its Common Stock under the 1933 Act and the registration of the Fund as an
investment company under the 1940 Act and that it has been afforded the
opportunity to ask questions of, and receive answers from, the Fund or ▇▇▇ with
respect to the proposed operations of the Fund.
5. TRANSFER AGENT INSTRUCTIONS.
It is hereby acknowledged by the parties that the Fund's transfer agent will
be instructed not to transfer the Shares to any third party unless it has
received a copy of the legal opinion required by paragraph 2 above and written
consent to such transfer from the Fund.
6. DIVIDEND RETENTION.
SAFECO Life agrees to permit the Fund to hold all dividends accrued and
payable to it until such time as the first dividends are paid by the Fund to any
other shareholder.
7. MISCELLANEOUS.
This Agreement embodies the entire agreement and understanding between the
Fund and SAFECO Life with respect to the sale of the Shares and supersedes any
prior written or oral agreement between the parties. This Agreement shall be
governed by and construed in accordance with the laws of the State of
Washington.
5
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized officers as of the date and year first above written.
_____________________________________
By
__________________________________
▇.▇. ▇▇▇▇▇▇▇
President
SAFECO LIFE INSURANCE COMPANY
By
__________________________________
▇.▇. ▇▇▇▇▇▇
Senior Vice President
STATE OF WASHINGTON )
) ss.
COUNTY OF K I N G )
On this day personally appeared before me ▇.▇. ▇▇▇▇▇▇▇, to me know to be the
President of _______________________________, the corporation that executed the
foregoing instrument, and acknowledged the same instrument to be the free and
voluntary act and deed of said corporation for the uses and purposes therein
mentioned, and on oath stated that he is authorized to execute the said
instrument, and that the seal affixed (if any) is the corporate seal of said
corporation.
WITNESS MY HAND AND OFFICIAL SEAL HERETO AFFIXED this ________ day of
____________, 1995.
__________________________________
Notary Public in and for the State
of
Washington, residing at
__________________________________.
