STOCK REDEMPTION AND SALE AGREEMENT
This Stock Redemption and Sale Agreement (this "Agreement") is made
effective as of the 31st day of August, 1999, by and between Open Plan Systems,
Inc., a Virginia corporation (the "Company") and those persons named as Buyers
in Exhibit A hereto (collectively, the "Buyers" and each a "Buyer").
RECITALS:
WHEREAS, Stan A. Fischer (the "Seller") desires to sell the 993,542 issued
and outstanding shares (the "Shares") of the common stock of the Company
beneficially held by him, and the Buyers desire to purchase, in the aggregate,
160,000 of such Shares; and
WHEREAS, certain persons (the "Direct Purchasers") have entered into a
certain Stock Purchase Agreement of even date herewith between the Seller, the
Company and such Direct Purchasers (the "Fischer Agreement"), whereby such
Direct Purchasers shall acquire some of the Shares from the Seller; and
WHEREAS, Great Lakes Capital, LLC ("LLC") and Great Lakes Capital, Inc.
("GLC"; LLC and GLC and their affiliates, including for the purposes hereof, the
Buyers, are sometimes collectively referred to herein as the "Great Lakes
Group"), beneficially hold approximately 891,000 shares of the Common Stock of
the Company, or approximately 16.66% of the total of such shares outstanding;
and
WHEREAS, the Buyers' entering into the Fischer Agreement and purchasing
160,000 Shares could cause the Great Lakes Group to trigger the provisions of
the Virginia Control Share Acquisitions statute, as set forth in Article 14.1 of
the Virginia Stock Corporation Act (the "Statute"), whereupon members of the
Great Lakes Group would not be entitled to voting rights with respect to certain
of the shares of Common Stock of the Company held by them; and
WHEREAS, the Company, GLC and LLC entered into a certain Voting and
Standstill Agreement (the "Great Lakes Agreement") dated as of June 17, 1998,
whereby, among other things, the parties agreed to certain limitations on the
beneficial ownership of the Common Stock of the Company by the Great Lakes
Group, which limitations are generally in excess of that level of beneficial
ownership which would trigger the Statute; and
WHEREAS, the Great Lakes Agreement, in Section 3.1(d), provides generally
that the Company will cooperate with the Great Lakes Group so that its members
may effect an acquisition of Common Stock of the Company, otherwise permitted
under the Great Lakes Agreement, from being subjected to the provisions of the
Statute; and
WHEREAS, members of the Great Lakes Group have requested that the Company,
pursuant to Section 3.1(d) of the Great Lakes Agreement, purchase 160,000 of the
Shares at a price of $2.50 per share, and immediately thereafter issue a like
number of shares of Common Stock to the Buyers for $2.50 per share (the
"Transaction"); and
WHEREAS, the Company, believing it to be in the best interests of the
Company and all of its shareholders to help facilitate the purchase of the
Shares from the Seller, has agreed to facilitate the Transaction; and
WHEREAS, the Company and the Buyers wish to enter into this Agreement to
effect the Transaction on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises hereinafter set
forth and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereby agree as follows:
ARTICLE I
SALE AND DELIVERY OF THE SHARES
1.1 Redemption of the Shares. Pursuant to the Fischer Agreement, the
Company shall purchase and redeem 160,000 Shares (which Shares are in addition
to, and separate and apart from, other Shares which the Company shall purchase
and redeem pursuant to the Fischer Agreement).
1.2 Purchase and Sale of the New Shares. Subject to the terms and
conditions of this Agreement, at the closing of the transactions contemplated by
this Agreement and the Fischer Agreement (the "Closing"), the Company agrees to
issue, sell and convey to each of the Buyers, and the Buyers severally agree to
purchase, acquire and accept from the Company, the number of shares of the
Company's Common Stock (the "New Shares") set forth opposite the name of each on
Exhibit A hereto.
1.3 Purchase Price; Escrow.
(a) The purchase price for each New Share shall be $2.50, and the aggregate
respective purchase price for the New Shares to be paid by each of the Buyers
(the "Purchase Price") is set forth opposite the name of each in Exhibit A. At
the Closing, each Buyer shall pay to the Company its respective Purchase Price
for the New Shares in immediately available funds. Such payments shall be
effected through Williams, Mullen, Clark & Dobbins ("WMCD"), counsel to the
Company, who shall serve as escrow agent. At least two (2) days prior to the
Closing, each Buyer shall provide to and deposit with WMCD available funds equal
to its respective Purchase Price for the New Shares. Such escrow deposits may be
effected by wire transfer as provided below:
ESCROW WIRE TRANSFER INSTRUCTIONS
Wire to: Wachovia Bank, Richmond, Va.
ABA No.: 051000253
Acct. No.: 7901181866
Acct. Name: Williams, Mullen, Clark & Dobbins General Trust Account
Contact Nathan Hatfield at 643-1991 X1339 to verify receipt of wire.
(b) The parties authorize WMCD to pay all such escrowed funds (the
"Escrowed Funds") to the Seller upon:
(i) WMCD having received in such escrow, including funds received from
the Direct Purchasers, a total of $2,483,855 (the total purchase price due
the Seller for the sale of the Shares pursuant to the Fischer Agreement) in
available funds;
(ii) Receipt by WMCD of certificates evidencing the 993,542 Shares,
along with duly executed stock powers providing for the transfer of the
Shares to the Direct Purchasers and the Company as provided in the Fischer
Agreement; and
(iii) WMCD having received no objection prior to the Closing from any
Buyer hereunder or any Direct Purchaser or the Company.
(c) The Company and each of the Buyers hereby expressly authorize the
manner of payment set forth in this Section 1.3. Without limiting the foregoing,
the parties agree that the payment of the Escrowed Funds to the Seller shall
constitute payment in full to the Company by the Buyers for the New Shares, as
fully and completely as if such funds had been paid directly to the Company.
(d) If the Closing for any reason does not occur on or before September 23,
1999, then WMCD shall promptly thereafter return all Escrowed Funds to the
respective Buyers having paid in such funds.
1.4 Delivery of Share Certificates. With fifteen (15) days following the
Closing, the Company shall deliver certificates representing the New Shares to
each Buyer in the amounts set forth on Exhibit A.
1.5 Closing Date and Time. The Closing shall take place on September 15,
1999 at 11:00 a.m. (Richmond, Virginia time) at the offices of WMCD, 1021 East
Cary Street, Richmond, Virginia 23219, or at such earlier date and time as may
be mutually agreed upon by the parties, which Closing shall take place
concurrently with the closing of the transactions provided for in the Fischer
Agreement (the day of the Closing is referred to herein as the "Closing Date").
1.6 Order of Transactions. The purchases of the New Shares by the Buyers
hereunder shall be deemed to occur concurrently with the transactions set forth
in the Fischer Agreement, including but not limited to the purchase and
redemption by the Company of certain Shares held by the Seller.
ARTICLE II
CERTAIN COVENANTS RELATING TO THE COMPANY
2.1 Registration of Shares.
(a) Following the Closing, the Company shall use its reasonable best
efforts to file as soon as practicable a registration statement (the
"Registration Statement") with the Securities and Exchange Commission (the
"SEC") under the Securities Act of 1933, as amended (the "Securities Act"), to
register the resale of the New Shares by the Buyers and to cause such
Registration Statement to become effective as soon as practicable after the
filing thereof with the SEC. The Company shall use its reasonable best efforts
to maintain the effectiveness of such Registration Statement for a period ending
on the earlier of (i) the second anniversary of the Closing Date, (ii) all of
the New Shares having been sold by the Buyers, or (iii) the New Shares having
ceased to be outstanding.
(b) The Company shall notify the Buyers at any time when a prospectus is
required to be delivered under the Securities Act with respect to one or more of
the New Shares, and of the Company's becoming aware that a prospectus included
in the Registration Statement, as then in effect, includes an untrue statement
of a material fact or omits to state a material fact necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading, and shall proceed as soon as practicable to prepare and
furnish to the Buyers a reasonable number of copies of an amendment to such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of the Shares, such prospectus shall not include an untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements therein, in light of the circumstances in which they were made,
not misleading.
(c) The Company shall notify the Buyers in the event of the issuance of any
stop order of which the Company or its counsel is aware suspending the
effectiveness of the Registration Statement or any order suspending or
preventing the use of any related prospectus or suspending the registration or
qualification of any New Shares for sale in any jurisdiction, and in such event
the Company shall use its reasonable best efforts to obtain the withdrawal of
any such order as soon as practicable.
(d) The Buyers agree that, upon receipt of any notice from the Company of
the happening of any event of the kind described in Sections 2.2(b) or (c)
above, the Buyers will forthwith discontinue the transfer or disposition of any
New Shares pursuant to the prospectus relating to the Registration Statement
covering such New Shares until the Buyers receive copies of the amended or
supplemented prospectus contemplated by Section 2.2(b) or the withdrawal of any
order contemplated by Section 2.2(c), and, if so directed by the Company, the
Buyers will deliver to the Company all copies, other than permanent file copies
then in the Buyers' possession, of the prospectus covering such New Shares at
the time of receipt of such notice.
(e) The Buyers, severally and not jointly, will, and hereby agree to,
indemnify and hold harmless and defend the Company and the Company's officers,
directors, employees, agents, representatives and each other person, if any, who
controls the Company within the meaning of the Securities Act, with respect to
any alleged untrue statement in, or any omission or alleged omission from, the
Registration Statement, any prospectus or any amendment or supplement thereto,
if such statement or omission was made in reliance upon and in conformity with
information furnished in writing to the Company by such Buyer from time to time
specifically for use in the Registration Statement, or the prospectus or any
such amendment or supplement thereto. Such indemnity shall survive the transfer
of the Shares by the Buyers.
2.2 One Registration Statement. The parties hereto agree that, for the
purposes of Section 2.1, the New Shares of the Buyers shall be aggregated with
the Shares purchased by the Direct Purchasers under the Fischer Agreement, all
such shares shall be subject to one and the same registration and all such
shares shall be treated as nearly identically as is practicable. Without
limiting the foregoing, the Buyers agree that they have no right hereunder to
require the Company to effect a registration of the New Shares which
registration is separate and apart from the registration by the Company of the
Shares under the Fischer Agreement, so long as the registration of such Shares
and the New Shares can be effected in the same registration.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to each of the Buyers, as of the date
of this Agreement and as of the Closing, as follows:
3.1 No Encumbrances on New Shares. At the Closing, upon payment of the
Purchase Price for the Shares, the Buyers shall receive good and marketable
title to the respective New Shares sold to each of them, free of any liens,
encumbrances, pledges, security interests, restrictive agreements, options,
rights of first refusal, transfers or restrictions, conditional sales
agreements, voting trust arrangements or claims of any nature whatsoever.
3.2 Authorization of New Shares. When issued at the Closing in exchange for
payment pursuant to this Agreement, the New Shares will be duly authorized and
validly issued, fully paid and nonassessable and not subject to any preemptive
or similar rights.
3.3 Recitals. The Recitals hereto, to the extent that they relate to the
Company, are true and correct in all material respects.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BUYERS
Each Buyer, severally and not jointly, represents and warrants, as of the
date of this Agreement and as of the Closing Date, as follows:
4.1 New Shares are Restricted until Registration. Each Buyer understands
that the New Shares to be purchased by him have been sold in reliance upon,
among other things, the representations made by him herein, and have not been
registered under the Securities Act or the securities laws of any state. Each
Buyer understands and agrees that the New Shares to be purchased by him, or any
portion thereof, will not be freely transferable and may not be resold,
transferred or assigned by him except (i) pursuant to the Registration Statement
during the effectiveness thereof and subject to the provisions of Article II
hereof, or (ii) upon the delivery to the Company of an opinion of legal counsel
for such Buyer stating that registration is not required under applicable
federal and state securities laws. Each Buyer agrees that a statement or legend
reflecting the foregoing limitations on the resale or transfer of the New
Shares, or any portion thereof, may appear on any certificate evidencing the
Shares; provided, however, that the Company consents to the removal of any such
legend upon the Registration Statement becoming effective and remaining
effective during the period described in the second sentence of Section 2.1(a).
4.2 No Distribution of the Shares. Each Buyer seeks to acquire the New
Shares for investment for his own account and beneficial interest (and not for
the account or interest of any other person or persons) and has no present
intention of dividing them with others or reselling, assigning or otherwise
distributing the New Shares to others.
4.3 Available Information. Each Buyer understands and agrees that:
(a) The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information
with the SEC and that:
(i) such reports, proxy statements and other information filed by
the Company are available to the Buyer and can be inspected and copied
at the public reference facilities maintained at the SEC at Room 1024,
450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549-1004,
and at various regional offices of the SEC;
(ii) copies of such materials can be obtained by the Buyer by
mail from the Public Reference Section of the SEC at 450 Fifth Street,
N.W., Judiciary Plaza, Washington, D.C. 20549-1004, at prescribed
rates; and
(iii) the SEC maintains a website (http://www-sec.gov) that
contains reports, proxy statements and other information regarding the
Company, which may be accessed by the Buyer.
(b) The Buyer acknowledges receipt of and has reviewed the copy of the
Company's report on Form 10-Q for the quarter ended June 30, 1999, which is
attached hereto as Exhibit B.
(c) The Buyer acknowledges receipt of, and has reviewed, the Company's
1998 Annual Report to Shareholders and Proxy Statement dated April 13,
1999, which have been provided to all shareholders of record.
(d) In determining whether or not to make an investment in the New
Shares, the Buyer has relied solely upon information set forth in the SEC
filings and other reports described above and independent investigations
made by him and his purchaser representative(s), if any.
(e) The Buyer and his purchaser representative(s), if any, have been
given ample opportunity to ask questions of and receive answers from
representatives of the Company concerning an investment in the New Shares
and to obtain additional information necessary to verify the accuracy of
the information set forth in the SEC filings and other reports set forth
above.
4.4 Accredited Investor. The Buyer is an "accredited investor" as such term
is defined under Rule 501 of the Securities Act because:
(a) The Buyer is a natural person whose individual net worth, or joint net
worth with that person's spouse, at the time of his purchase exceeds $1,000,000;
(b) The Buyer is a natural person who had an individual income in excess of
$200,000 in each of the two most recent years or joint income with that person's
spouse in excess of $300,000 in each of those years and has a reasonable
expectation of reaching the same level in the current year;
(c) The Buyer is a director or executive officer of the Company; or
(d) The Buyer is an entity in which all the equity owners are accredited
investors.
4.5 Sophisticated Investor.
(a) The Buyer, either alone or with a purchaser representative, has a
sufficient degree of sophistication to understand and evaluate the merits and
risks associated with an investment in the New Shares.
(b) The Buyer's overall commitment to investments which are not readily
marketable is not disproportionate to his net worth and his investment in the
New Shares will not cause such overall commitment to become excessive.
(c) The Buyer has adequate net worth and means for providing for any
current needs and contingencies such that he is able to sustain a complete loss
of his investment in the New Shares, and he has no need for liquidity in such
investment.
(d) The Buyer has evaluated the risks of investing in the New Shares.
(e) The Buyer has such knowledge and experience of financial and business
matters that he is capable of evaluating the merits and risks of an investment
in the New Shares.
4.6 Recitals. The Recitals hereto, to the extent that they relate to the
Great Lakes Group or such Buyer individually, are true and correct in all
material respects.
ARTICLE V
CONDITIONS TO CLOSING
5.1 Conditions to Obligations of Buyers. The obligations of the Buyers
under this Agreement are subject to the fulfillment, at the Closing, of the
following conditions precedent, compliance with which, or the occurrence of
which may be waived prior to the Closing in writing by all of the Buyers in
their sole discretion:
(a) The representations and warranties of the Company shall be true on and
as of the Closing Date as though such representations and warranties were made
on and as of such date.
(b) The Company shall have performed and complied with all terms,
conditions, covenants, obligations, agreements and restrictions required by this
Agreement to be performed or complied with by it prior to or at the Closing.
5.2 Conditions to Obligations of Company. The obligations of the Company
under this Agreement are subject to the fulfillment, at the Closing, of the
following conditions precedent, compliance with which, or the occurrence of
which may be waived prior to the Closing in writing by the Company in its sole
discretion:
(a) The representations and warranties of each of the Buyers shall be
true on and as of the Closing as though such representations and warranties
were made on and as of such date.
(b) Each Buyer shall have performed and complied with all terms,
conditions, covenants, obligations, agreements and restrictions required by
this Agreement to be performed or complied with by it prior to or at the
Closing.
(c) The Company shall have received at the Closing the Purchase Price
from each of the Buyers pursuant to the requirements of Section 1.3.
ARTICLE VI
EQUITABLE RELIEF
Each party understands and agrees that money damages alone would not be a
sufficient remedy for any breach of this Agreement by any other party and that
any party hereto shall be entitled to injunctive or equitable relief, as a
remedy for any such breach by another party. Such remedies shall not be deemed
to be exclusive remedies for a breach of this Agreement, but shall be in
addition to all other remedies available at law or in equity.
ARTICLE VII
GENERAL PROVISIONS
7.01 Further Assurances. Each of the parties shall, at any time and from
time to time after the Closing, upon the request of any other party hereto, and
without further consideration, do, execute, acknowledge and deliver, or cause to
be done, executed, acknowledged and delivered, any and all such further acts,
deeds, assignments, transfers, conveyances and assurances as may reasonably be
required by the requesting party to further evidence or effectuate the
transactions set forth or contemplated by this Agreement.
7.02 Survival of Representations and Warranties. The representations and
warranties contained in this Agreement shall survive the Closing for the full
period of the applicable statute of limitations with respect thereto, if any, or
otherwise indefinitely.
7.03 Governing Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the Commonwealth of Virginia applicable to contracts
made and to be wholly performed in such state.
7.04 Entire Agreement; Amendment. This Agreement, and the exhibits attached
hereto, constitute the entire agreement among the parties with respect to the
transactions contemplated hereby and supersede all prior agreements and
understandings. No amendment, modification or waiver of this Agreement shall be
valid unless in each instance such amendment, modification or waiver is in
writing or signed by the parties.
7.05 Notices. Any notice or other communication to be given hereunder by
any party to another shall be deemed to be received by the intended recipient
(a) when delivered personally, (b) the day following delivery to a nationally
recognized overnight courier service with proof of delivery, or (c) three days
after mailing by certified mail, postage prepaid with return receipt requested,
in each case addressed to the intended recipient as set forth below with
applicable postage or delivery fees prepaid or billing therefor arranged to the
sender:
If to the Buyers, to each of the Buyers at the addresses set forth on
Exhibit A hereto.
If to the Company, to: John L. Hobey
Chief Executive Officer
Open Plan Systems, Inc.
4299 Carolina Avenue, Building C
Richmond, Virginia 23222
with copies to: Theodore L. Chandler, Jr., Esquire
Williams, Mullen, Clark & Dobbins, P.C.
1021 East Cary Street
Richmond, Virginia 23219
7.06 Successors and Assigns. This Agreement shall bind and inure to the
benefit of the parties and their respective successors and assigns. None of the
parties may assign any provision of this Agreement without the prior written
consent of the other parties.
7.07 Interpretations. The headings to the sections of this Agreement are
for the convenience of reference only and do not form part of this Agreement and
shall not affect interpretations thereof. Unless the context indicates
otherwise, words in a singular number shall be deemed to include words in the
plural and vice versa, and words in one gender shall be deemed to include words
in other genders.
7.08 Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall, in the aggregate, be considered one and the
same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement effective as
of the date first written above.
[THIS SPACE INTENTIONALLY LEFT BLANK]
BUYERS:
/s/ Thomas H. Corson
Thomas H. Corson
/s/ William F. Crabtree
William F. Crabtree
/s/ John L. Hobey
John L. Hobey
/s/ Charles Kaufmann
Charles Kaufmann
/s/ W. Sydnor Settle
W. Sydnor Settle
THE COMPANY
OPEN PLAN SYSTEMS, INC.
By: /s/ Anthony F. Markel
Anthony F. Markel
Chairman of the Board
Exhibits:
Exhibit A - Buyers' Purchase Obligations
Exhibit B - Company's Form 10-Q for the quarter ended June 30, 1999
I:\WMCDLIB\BILLPIT\0554248.02
EXHIBIT A
Buyers' and Company's Purchase Obligations
- ------------------------------------------- -------------------------------------- --------------------------------------
Names and Addresses Number of Shares
Of to be
Buyers to be Purchased Purchase Price
- ------------------------------------------- -------------------------------------- --------------------------------------
Thomas H. Corson 50,000 $125,000
600 Sky View Drive
Middleburg, IN 46540
- ------------------------------------------- -------------------------------------- --------------------------------------
William F. Crabtree 4,000 10,000
Open Plan Systems, Inc.
4299 Carolina Avenue, Bldg. C
Richmond, VA 23222
- ------------------------------------------- -------------------------------------- --------------------------------------
John L. Hobey 50,000 125,000
Open Plan Systems, Inc.
4299 Carolina Avenue, Bldg. C
Richmond, VA 23222
- ------------------------------------------- -------------------------------------- --------------------------------------
Charles Kaufmann 6,000 15,000
Holland Kaufmann and Bartels
289 Greenwich Avenue
Greenwich, CT 06830
- ------------------------------------------- -------------------------------------- --------------------------------------
W. Sydnor Settle 50,000 125,000
Great Lakes Capital
310 South Street, 3rd Floor
Morristown, NJ 07960
- ------------------------------------------- -------------------------------------- --------------------------------------
Total 160,000 $400,000
- ------------------------------------------- -------------------------------------- --------------------------------------
EXHIBIT B
[The Issuer's Form 10-Q for the quarterly period ended June
30, 1999, previously filed with the Commission, has been
omitted.]