SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS
FILED PURSUANT TO RULE 13d-1(a) AND AMENDMENTS
THERETO FILED PURSUANT TO RULE 13d-2(a)
(AMENDMENT NO. )1
OPEN PLAN SYSTEMS, INC.
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(Name of Issuer)
COMMON STOCK, NO PAR VALUE
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(Title of Class of Securities)
683709 10 9
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(CUSIP Number)
W. SYDNOR SETTLE, GREAT LAKES CAPITAL, LLC
310 SOUTH STREET, MORRISTOWN, NEW JERSEY 07960 (973) 267-1088
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(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
JUNE 17, 1998
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition that is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box [_].
Note: Schedules filed in paper format shall include a signed original
and five copies of the schedule, including all exhibits. See Rule 13d-7(b) for
other parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 13 Pages)
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1 The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934, as amended (the "Act"), or otherwise subject to the liabilities of
that section of the Act but shall be subject to all other provisions of the Act
(however, see the Notes).
<PAGE>
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CUSIP No. 683709 10 9 SCHEDULE 13D Page 2 of 13 Pages
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1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Great Lakes Capital, LLC
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [_]
(b) [_]
Not Applicable
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) or 2(e)
[_]
Not Applicable
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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NUMBER OF 7 SOLE VOTING POWER
SHARES 800,000
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8 SHARED VOTING POWER
BENEFICIALLY
-0-
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OWNED BY EACH 9 SOLE DISPOSITIVE POWER
REPORTING 800,000
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10 SHARED DISPOSITIVE POWER
PERSON WITH
-0-
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
800,000
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[_]
Not Applicable
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
15.2%
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14 TYPE OF REPORTING PERSON*
OO (limited liability company)
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
Item 1. Security and Issuer
This Schedule 13D relates to the common stock, no par value ("Common
Stock"), of Open Plan Systems, Inc., a Virginia corporation (the
"Issuer"). The address of the principal executive offices of the Issuer
is 4299 Carolina Avenue, Building C, Richmond, Virginia 23222.
Item 2. Identity and Background
Great Lakes Capital, LLC
Great Lakes Capital, LLC ("Great Lakes") is a limited liability company
organized in June 1998 under the laws of the State of Delaware. The
members of Great Lakes are W. Sydnor Settle ("Settle"), who also serves
as a manager and as the Chairman and President of Great Lakes, Thomas
H. Corson ("Corson"), who also serves as a manager and as Vice
President of Great Lakes, William F. Crabtree ("Crabtree"), John L.
Hobey ("Hobey"), Charles B. Kaufmann, III, who also serves as Secretary
of Great Lakes, and Thomas J. McGrath ("McGrath"), who also serves as a
manager and as the Treasurer of Great Lakes. Great Lakes was formed
specifically for the purpose of investing in and holding securities of
the Issuer. The address of its principal office is 310 South Street,
Morristown, New Jersey 07960. During the past five years, Great Lakes
has not been convicted in any criminal proceeding, excluding traffic
violations or similar misdemeanors, nor has Great Lakes been a party to
a civil proceeding of a judicial or administrative body of competent
jurisdiction or been subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any violation
with respect to such laws.
The business and affairs of Great Lakes is managed by its managers, who
are Settle, Corson and McGrath. The information set forth below in this
Item 2 and in Items 3 through 6 below with respect to Settle, Corson
and McGrath is disclosed in this Schedule 13D due to each such
individual's role as a manager of Great Lakes.
W. Sydnor Settle
(A) W. Sydnor Settle.
Page 3 of 13 Pages
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(B) The business address of Settle is 310 South Street,
Morristown, New Jersey 07960.
(C) Settle is a private investor whose business address is
disclosed in paragraph (B) above. Settle is also a director of
the Issuer. Settle was a partner of the New York-based law
firm, Simpson Thacher & Bartlett, from 1969 to 1990, when he
retired to become of counsel.
(D) During the past five years, Settle has not been convicted in a
criminal proceeding, excluding traffic violations or similar
misdemeanors.
(E) During the past five years, Settle has not been a party to a
civil proceeding of a judicial or administrative body of
competent jurisdiction and has not been subject to a judgment,
decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to
such laws.
(F) Settle is a citizen of the U.S.A.
Thomas H. Corson
(A) Thomas H. Corson.
(B) The business address of Corson is 600 Skyview Drive, P.O. Box
504, Middlebury, Indiana 46540.
(C) Corson is a private investor whose business address is
disclosed in paragraph (B) above. Corson was the co-founder
of, and currently serves as Chairman Emeritus and a director
of, Coachmen Industries, Inc. (NYSE), a leading manufacturer
of recreational vehicles and modular homes.
(D) During the past five years, Corson has not been convicted in a
criminal proceeding, excluding traffic violations or similar
misdemeanors.
(E) During the past five years, Corson has not been a party to a
civil proceeding of a judicial or administrative body of
competent jurisdiction and has not been subject to a judgment,
decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to
such laws.
(F) Corson is a citizen of the U.S.A.
Page 4 of 13 Pages
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Thomas J. McGrath
(A) Thomas J. McGrath.
(B) The business address of McGrath is c/o Simpson Thacher &
Bartlett, 425 Lexington Avenue, New York, New York 10017.
(C) McGrath is a private investor whose business address is
disclosed in paragraph (B) above. McGrath was a partner of the
New York-based law firm, Simpson Thacher & Bartlett, from 1970
to 1995.
(D) During the past five years, McGrath has not been convicted in
a criminal proceeding, excluding traffic violations or similar
misdemeanors.
(E) During the past five years, McGrath has not been a party to a
civil proceeding of a judicial or administrative body of
competent jurisdiction and has not been subject to a judgment,
decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to
such laws.
(F) McGrath is a citizen of the U.S.A.
Item 3. Source and Amount of Funds and Other Consideration
The source and amount of funds or other consideration used, or to be
used, by each of Great Lakes, Settle, Corson and McGrath in acquiring
beneficial ownership of shares of Common Stock is set forth below.
Great Lakes Capital, LLC
On June 17, 1998, the Issuer and Great Lakes entered into a Management
and Consulting Agreement (the "Consulting Agreement"), a copy of which
is attached to this Schedule 13D as Exhibit A and is incorporated by
reference into this Schedule 13D. Under the Consulting Agreement, Great
Lakes has agreed to provide certain management and consulting services
to the Issuer for an 18-month period, including making available to the
Issuer two of its members, Hobey and Crabtree, to serve as Chief
Executive Officer and Chief Financial Officer, respectively, of the
Issuer. In connection with the execution of the Consulting Agreement,
Hobey and Crabtree each entered into a written employment agreement
with the Issuer for a term of 18 months commencing on June 17, 1998
(each an "Employment Agreement"). The Issuer also appointed Hobey and
Settle to its Board of Directors.
Page 5 of 13 Pages
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In connection with the execution of the Consulting Agreement, Great
Lakes acquired 200,000 shares of Common Stock directly from the Issuer
at a purchase price of $2.175 per share. The funds used to acquire such
shares were funds contributed to Great Lakes by its members.
In consideration for the services under the Consulting Agreement, Great
Lakes acquired an option to purchase up to 600,000 shares of the Common
Stock (the "Option"), pursuant to a Nonqualified Stock Option
Agreement, dated as of June 17, 1998, between the Issuer and Great
Lakes (the "Stock Option Agreement"). A copy of the Stock Option
Agreement is attached to this Schedule 13D as Exhibit B and is
incorporated by reference into this Schedule 13D.
Under the Stock Option Agreement, the Option is immediately exercisable
by Great Lakes, and the option price per share is as follows:
Number of Shares Exercise Price
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150,000 $3.00
150,000 $4.50
150,000 $6.00
150,000 $7.50
Except as described below, the Option shall expire on June 30, 2003. If
at any time prior to December 17, 1998, (i) OPS terminates Hobey's
employment as Chief Executive Officer of OPS for Proper Cause (as
defined in Hobey's Employment Agreement), (ii) OPS terminates Hobey's
employment as Chief Executive Officer of OPS due to death or disability
(in accordance with the Hobey's Employment Agreement) or (iii) Hobey
voluntarily resigns as Chief Executive Officer of OPS (any of the
following, a "Termination Event"), the Option shall expire immediately.
If between December 17, 1998 and June 17, 1998, a Termination Event
shall occur, the Option shall expire one year following such
Termination Event.
W. Sydnor Settle
In addition to the shares of Common Stock and the Option held by Great
Lakes described above, Settle has acquired 3,000 shares of Common Stock
for approximately $7,750 in personal funds.
Thomas H. Corson
Except for the shares of Common Stock and the Option held by Great
Lakes described above, Corson does not beneficially own any shares of
Common Stock.
Page 6 of 13 Pages
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Thomas J. McGrath
Except for the shares of Common Stock and the Option held by Great
Lakes described above, McGrath does not beneficially own any shares of
Common Stock.
Other
In addition to the shares of Common Stock and the Option held by Great
Lakes described above, Hobey has acquired 5,000 shares of Common Stock
for approximately $14,563 in personal funds. Also, in connection with
his Employment Agreement, Hobey was granted an option to purchase
25,000 shares of Common Stock at the option price of $2.44 per share
pursuant to the Issuer's 1996 Incentive Stock Plan. This option is
immediately exercisable and expires on June 30, 2003.
In addition to the shares of Common Stock and the Option held by Great
Lakes described above, Crabtree has acquired 3,000 shares of Common
Stock for approximately $9,000 in personal funds. Also, in connection
with his Employment Agreement, Crabtree was granted an option to
purchase 12,500 shares of Common Stock at the option price of $2.44 per
share pursuant to the Issuer's 1996 Incentive Stock Plan. This option
is immediately exercisable and expires on June 30, 2003.
Item 4. Purpose of Transaction
The primary purpose for the acquisition by Great Lakes of shares of
Common Stock and the Option, as described in Item 3 above, as well as
the acquisition by Settle, Hobey and Crabtree of their respective
shares of Common Stock and stock options (as the case may be) also
described in Item 3 above, is for investment. Moreover, the business of
Great Lakes, as stated in its operating agreement, is limited to
investing in the securities of the Issuer and the management of such
investments.
Great Lakes and its members intend to continue to evaluate the Issuer
and its business prospects and to take such actions as they shall deem
necessary and appropriate in their sole discretion to maximize the
economic value of their investment in the securities of the Issuer,
including further acquisitions and/or dispositions of shares of Common
Stock at any time, subject, however, to certain restrictions contained
in a Voting and Standstill Agreement, dated as of June 17, 1998, by and
between the Issuer, Great Lakes and, for the limited purposes set forth
therein, Great Lakes Capital, Inc., a Delaware corporation (the
"Standstill Agreement"). A copy of the Standstill Agreement is attached
to this Schedule 13D as Exhibit C and is incorporated by reference into
this Schedule 13D.
Page 7 of 13 Pages
<PAGE>
Among other restrictions in the Standstill Agreement, Great Lakes and
its affiliates may not (without the consent of the Issuer) acquire
shares of Common Stock if, following such acquisition, Great Lakes and
its affiliates beneficially own greater than 21.0% of the issued and
outstanding shares of Common Stock. This restriction, however, does not
apply to shares of Common Stock or other securities granted pursuant to
any benefit plan of the Issuer, such as the options to acquire 25,000
shares and 12,500 shares of Common Stock granted to Hobey and Crabtree,
respectively.
Except as described above, there are no plans or proposals that Great
Lakes, Settle, Corson or McGrath may have that relate to or would
result in:
(A) An extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Issuer or any of
its subsidiaries;
(B) A sale or transfer of a material amount of assets of the
Issuer or of any of its subsidiaries;
(C) Any change in the present board of directors or management of
the Issuer, including any plans or proposals to change the
number or term of directors or to fill any existing vacancies
on the board;
(D) Any material change in the present capitalization or dividend
policy of the Issuer;
(E) Any other material change in the Issuer's business or
corporate structure;
(F) Changes in the Issuer's charter, bylaws or instruments
corresponding thereto or other actions which may impede the
acquisition of control of the Issuer by any person;
(G) Causing a class of securities of the Issuer to be delisted
from a national securities exchange or to cease to be
authorized to be quoted in an inter-dealer quotation system of
a registered national securities association;
(H) A class of equity securities of the Issuer becoming eligible
for termination of registration pursuant to Section 12(g)(4)
of the Securities Exchange Act of 1934, as amended; or
(I) Any action similar to any of those enumerated above.
Subject to the provisions of the Standstill Agreement, Great Lakes and
its members may, at any time or from time to time, review or reconsider
their position with respect to the Issuer and formulate plans with
respect to matters referred to in this Item 4.
Page 8 of 13 Pages
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Item 5. Interest in Securities of the Issuer
Great Lakes Capital, LLC
(A) The aggregate number and percentage of Common Stock
beneficially owned by Great Lakes are 800,000 Shares and 15.2%
of the issued and outstanding shares of Common Stock,
respectively.
(B) With respect to 200,000 shares of Common Stock identified
pursuant to paragraph (A) above, Great Lakes has the sole
power to vote or to direct the vote and the sole power to
dispose or to direct the disposition of such shares of Common
Stock. With respect to the remaining 600,000 shares of Common
Stock identified pursuant to paragraph (A) above, Great Lakes
will have the sole power to vote or to direct the vote and the
sole power to dispose or to direct the disposition of such
shares of Common Stock upon the exercise of the Option.
(C) On June 17, 1998, the Issuer and Great Lakes entered into the
Consulting Agreement. In connection with the execution of the
Consulting Agreement, Great Lakes acquired 200,000 shares of
Common Stock directly from the Issuer at a purchase price of
$2.175 per share. In addition, in consideration for the
services provided under the Consulting Agreement, Great Lakes
acquired the Option. Such acquisitions are described in
further detail in Item 3 above.
(D) Not applicable.
(E) Not applicable.
W. Sydnor Settle
(A) The aggregate number and percentage of Common Stock
beneficially owned by Settle are 3,000 Shares and less than
one percent of the issued and outstanding shares of Common
Stock, respectively.
(B) Settle has the sole power to vote or to direct the vote and
the sole power to dispose or to direct the disposition of all
shares identified pursuant to paragraph (A) above.
(C) Settle has not effected any transactions in the Common Stock
during the past 60 days.
(D) Not applicable.
Page 9 of 13 Pages
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(E) Not applicable.
Thomas H. Corson
(A) Except for the shares of Common Stock and the Option held by
Great Lakes described in Item 3 above, Corson does not
beneficially own any shares of Common Stock.
(B) Not applicable.
(C) Not applicable.
(D) Not applicable.
(E) Not applicable.
Thomas J. McGrath
(A) Except for the shares of Common Stock and the Option held by
Great Lakes described in Item 3 above, McGrath does not
beneficially own any shares of Common Stock.
(B) Not applicable.
(C) Not applicable.
(D) Not applicable.
(E) Not applicable.
Other
The aggregate amount of Common Stock beneficially owned by Great Lakes
and by its members totals 848,500 shares of Common Stock, or
approximately 16.0% of the Common Stock on a fully diluted basis,
consisting of the 200,000 shares of Common Stock and the Option to
acquire up to 600,000 shares of Common Stock as described in Item 3
above, plus the 3,000 shares of Common Stock held by Settle as
described in Item 3 above, plus the 5,000 shares of Common Stock and
the option to acquire 25,000 shares of Common Stock held by Hobey as
described in Item 3 above, and plus the 3,000 shares of Common Stock
and the option to acquire 12,500 shares of Common Stock held by
Crabtree as described in Item 3 above.
Page 10 of 13 Pages
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Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer
Management and Consulting Agreement
On June 17, 1998, the Issuer and Great Lakes entered into the
Consulting Agreement. The Consulting Agreement is described in further
detail in Item 3 above.
Voting and Standstill Agreement
On June 17, 1998, the Issuer, Great Lakes and, for the limited purposes
set forth therein, Great Lakes Capital, Inc. entered into the
Standstill Agreement. In addition to the description of the Standstill
Agreement set forth in Item 4 above, the Issuer, pursuant to the terms
of the Standstill Agreement, has appointed Hobey and Settle to Class I
(current term expiring 2001) of the Board of Directors and has agreed
to nominate and recommend Hobey and Settle for election at the next
annual meeting of shareholders as Class I directors unless the
Consulting Agreement has been terminated prior to such annual meeting.
Upon the termination of Hobey's employment and/or the termination of
the Consulting Agreement, however, such terms as a director are subject
to certain requirements for the resignation of Hobey and/or Settle from
the Board of Directors. Pursuant to the terms of the Standstill
Agreement, Great Lakes and Great Lakes Capital, Inc. have also agreed
to take such actions as may be required so that the Common Stock
beneficially owned and entitled to be voted by Great Lakes, Great Lakes
Capital, Inc. and their affiliates are voted as follows: (i) with
respect to the nominees to the Board of Directors of the Issuer, in
accordance with the recommendation of the Board; and (ii) with respect
to any "election contest" initiated by any person in connection with a
tender offer, in the same proportion as the total votes cast by or on
behalf of all of the Issuer's shareholders (other than Great Lakes,
Great Lakes Capital, Inc. and their affiliates).
Stock Option Agreement
On June 17, 1998, the Issuer and Great Lakes entered into the Stock
Option Agreement relative to the grant of the Option to acquire up to
600,000 shares of Common Stock. The Stock Option Agreement is described
in further detail in Item 3 above.
Registration Rights Agreement
On June 17, 1998, the Issuer and Great Lakes entered into a
Registration Rights Agreement (the "Registration Rights Agreement"). A
copy of the Registration Rights Agreement is attached to this Schedule
13D as Exhibit D and is incorporated by reference into this Schedule
13D. Pursuant to the Registration
Page 11 of 13 Pages
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Rights Agreement, following the expiration of the Consulting Agreement,
Great Lakes has the right, subject to certain terms and conditions, to
request that the Issuer effect the registration of the 200,000 shares
of Common Stock purchased by Great Lakes pursuant to the Consulting
Agreement, the shares that may be acquired upon the exercise of the
Option, and any shares of Common Stock that Great Lakes and its
affiliates acquire after June 17, 1998, subject to the 21.0% ownership
restriction set forth in the Standstill Agreement described above in
Item 4 (collectively, the "Great Lakes Shares"). Such request must be
made prior to June 17, 2003, and the Issuer shall not be required to
effect more than one registration of the Great Lakes Shares. In
addition, in the event that the Issuer files a registration statement
relating to a public offering of its Common Stock by or through
underwriters for the Issuer's own account, the Issuer shall, at Great
Lakes' request and subject to certain terms and conditions, use its
best efforts to include among the securities covered by such
registration statement the number of Great Lakes Shares that Great
Lakes shall have requested to be so included.
Item 7. Material to be Filed as Exhibits
See the Exhibit Index attached to this Schedule 13D.
Page 12 of 13 Pages
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SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement on this Schedule 13D is
true, complete and correct.
GREAT LAKES CAPITAL, LLC
Date: June 29, 1998 By: /s/ W. Sydnor Settle
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W. Sydnor Settle
Manager
Attention: Intentional misstatements or omissions of fact constitute Federal
criminal violations (see 18 U.S.C. 1001).
<PAGE>
EXHIBIT INDEX
Exhibit Description
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A Management and Consulting Agreement, dated as of June
17, 1998, between Open Plan Systems, Inc. and Great
Lakes Capital, LLC.
B Nonqualified Stock Option Agreement, dated as of June
17, 1998, between Open Plan Systems, Inc. and Great
Lakes Capital, LLC.
C Voting and Standstill Agreement, dated as of June 17,
1998, between Open Plan Systems, Inc., Great Lakes
Capital, LLC and, for the limited purposes set forth
therein, Great Lakes Capital, Inc.
D Registration Rights Agreement, dated as of June 17,
1998, between Open Plan Systems, Inc. and Great Lakes
Capital, LLC.
<PAGE>
Exhibit A
MANAGEMENT AND CONSULTING AGREEMENT
THIS MANAGEMENT AND CONSULTING AGREEMENT (this "Agreement") is made as
of June 17, 1998, by and between OPEN PLAN SYSTEMS, INC., a Virginia corporation
("OPS"), and GREAT LAKES CAPITAL, LLC, a Delaware limited liability company
("LLC").
WITNESSETH:
WHEREAS, John L. Hobey ("Hobey") and William F. Crabtree ("Crabtree")
are members of LLC; and
WHEREAS, LLC will make Hobey and Crabtree available to OPS to serve as
full-time employees of OPS, and OPS desires to employ Hobey and Crabtree, in the
capacities of Chief Executive Officer and Chief Financial Officer, respectively;
and
WHEREAS, OPS and LLC desire to enter into a management and consulting
relationship on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are acknowledged, the parties hereby agree as follows:
1. Management and Consulting Services.
(a) Chief Executive Officer. LLC will make Hobey
available to OPS to serve as a full-time employee of OPS in the capacity of
OPS's Chief Executive Officer ("CEO"), and OPS will elect Hobey as CEO of OPS.
Hobey will enter into an employment agreement with OPS, substantially in the
form attached hereto as Exhibit A (the "Employment Agreement"), the provisions
of which shall include an 18-month term, an annual base salary of $160,000.00,
eligibility for cash bonuses at the discretion of the Board of Directors of OPS,
and the grant of nonqualified stock options of up to 25,000 shares of OPS's
common stock, without par value ("Common Stock"), pursuant to the terms and
conditions of a nonqualified stock option agreement with OPS, substantially in
the form attached hereto as Exhibit B (the "Stock Option Agreement"). At the end
of the term of this Agreement, OPS and Hobey may negotiate with each other
directly regarding a continued employment relationship.
(b) Chief Financial Officer. LLC will make Crabtree
available to OPS to serve as a full-time employee of OPS in the capacity of
OPS's Chief Financial Officer ("CFO"), and OPS will elect Crabtree as CFO of
OPS. Crabtree will enter into an Employment Agreement, the provisions of which
shall include an 18-month term, an annual base salary of $120,000.00,
eligibility for cash bonuses at the discretion of the Board of Directors of OPS,
and
<PAGE>
the grant of nonqualified stock options of up to 12,500 shares of Common Stock,
pursuant to the terms and conditions of a Stock Option Agreement. At the end of
the term of this Agreement, OPS and Crabtree may negotiate with each other
directly regarding a continued employment relationship.
(c) Additional Consulting Services. In addition to making
Hobey and Crabtree available to serve as employees of OPS, LLC will make
available to OPS for consultation on an as needed basis the services of members
of LLC (the "Consultants"), including specifically, and without limitation, W.
Sydnor Settle ("Settle"). Each of the Consultants will provide his or her
personal services in the form of consulting services (the "Services") as
reasonably requested by OPS, which Services of all Consultants shall not, in the
aggregate, exceed ten (10) hours per month..
(d) Performance of Services.
(i) During the term of this Agreement, LLC will,
to the best of its ability, impart knowledge, information, ideas, suggestions
and advice to OPS in furtherance of and relating to the Services as reasonably
requested by OPS, and OPS and its Affiliates (as defined in Section 9(c) below)
will have the right to make use of the same in their business at any time
without additional consideration to LLC or its Consultants, employees or agents,
other than that specifically stated herein. All reports, statistics, drawings,
documents, computer programs (including source codes) or other property prepared
by LLC and/or its Consultants, employees or agents in the course of performing
the Services will be the property of OPS and may be used and reproduced by OPS
for any purpose whatsoever; provided that all methods of analysis that are the
property of LLC and are used by LLC to prepare such reports, statistics,
drawings, documents or computer programs (including source codes) shall remain
the property of LLC, even if such methods are developed specifically with regard
to providing the Services.
(ii) During the term of this Agreement, LLC will
be available to perform the Services at such times and at such locations as OPS
and LLC may from time to time agree.
(iii) During the term of this Agreement, OPS will
reimburse LLC for all reasonable and customary expenses incurred in the
performance of Services that are requested by the Chairman of the Board of
Directors of OPS.
2. Term. The term of this Agreement will be for a period of
eighteen (18) months, beginning on June 17, 1998; provided, however, that:
(a) if (1) OPS terminates the employment of Hobey for
Proper Cause (as defined in his Employment Agreement), (2) OPS terminates the
employment of Hobey due to death or disability (in accordance with his
Employment Agreement), or (3) Hobey voluntarily resigns as an employee of OPS,
then (i) OPS may select Hobey's replacement without consulting LLC or
terminating this Agreement or (ii) OPS may, in its sole discretion, terminate
this Agreement with three (3) days prior written notice to LLC; or
-2-
<PAGE>
(b) if OPS terminates the employment of Hobey without
Proper Cause and LLC is unable to provide a replacement for Hobey, who in OPS's
sole discretion is acceptable to OPS, within five (5) days after such
termination, then (i) OPS may select Hobey's replacement without consulting LLC
or terminating this Agreement, or (ii) either OPS or LLC may, in its sole
discretion, terminate this Agreement with three (3) days prior written notice to
the other party.
3. Consulting Consideration. In consideration for LLC making
Hobey and Crabtree available to serve as OPS's CEO and CFO, respectively, and
the agreement of LLC to perform the Services, OPS will deliver to LLC the
following consideration:
(a) Options. OPS will grant to LLC nonqualified stock
options for 600,000 shares of Common Stock, pursuant to a nonqualified stock
option agreement substantially in the form attached hereto as Exhibit C (the
"LLC Stock Option Agreement").
(b) Cash Payment. OPS will pay and deliver to LLC for
expense reimbursement, by wire transfer, or by certified or bank check, the
amount of $22,500.00.
(c) Board Membership. In accordance with the terms and
conditions of the Voting and Standstill Agreement (as defined in Section 4(d)
below), OPS will take such action as may be necessary to increase the size of
the OPS Board of Directors to ten (10) directors, to elect Hobey and Settle to
Class I directorships (current term expiring in 2001) and to nominate and
recommend Hobey and Settle for election at the 1999 annual meeting of
shareholders as Class I directors. The parties hereby acknowledge that, for
their services as directors of OPS, Hobey will not receive any compensation and
Settle will receive the same compensation as other nonemployee directors.
4. Additional Agreements.
(a) Sale and Purchase of New Shares. OPS will sell and
deliver to LLC 200,000 newly issued shares of Common Stock (the "Shares") for
the purchase price of $2.175 per share, or an aggregate purchase price of
$435,000.00.
(b) Registration Rights Agreement. OPS will enter into a
Registration Rights Agreement with LLC, substantially in the form attached
hereto as Exhibit D.
(c) Listing Application. OPS will, at its expense, take
such steps as shall be necessary and advisable to effect the listing on The
Nasdaq National Market of the Shares issued to LLC, and to reserve for listing
on The Nasdaq National Market the shares of Common Stock that may be issued to
LLC upon exercise of the options contained in the LLC Stock Option Agreement.
(d) Voting and Standstill Agreement. OPS, LLC and Great
Lakes Capital, Inc., a Delaware corporation ("GLC"), will enter into a Voting
and Standstill Agreement, substantially in the form attached hereto as Exhibit E
(the "Voting and Standstill Agreement").
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5. Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place on June 17, 1998 (the "Closing
Date"), at 11:00 a.m. (eastern time), at the offices of Williams, Mullen,
Christian & Dobbins, 1021 East Cary Street, Suite 1600, Richmond, Virginia
23219, or such other date, time and place as the parties hereto may agree.
6. Independent Contractor.
(a) LLC's relationship to OPS shall be that of an
independent contractor retained on a consulting basis. LLC will at all times
retain control over the performance of the Services and shall remain free from
direction by OPS. Nothing in this Agreement, including the employment
relationships set forth in Sections 1(a) and 1(b) above, shall be construed as
creating any type of agency relationship, including, without limitation, that of
employer and employee, between OPS and LLC.
(b) LLC represents and warrants that, except as otherwise
specifically stated in writing, all of the persons so assigned to perform the
Services for OPS under this Agreement (including but not limited to Settle)
shall be its employees or agents and not employees of OPS. LLC will file all
required returns and reports, withhold and/or pay all required federal, state
and local wage or employment-related taxes, including but not limited to income
taxes, social security taxes, unemployment taxes and taxes measured by gross
income or gross receipts, with respect to the amounts paid to LLC, or any such
employees in connection with the performance of the Services; provided that it
is acknowledged and agreed that LLC shall not be responsible for the employment
relationships described in Sections 1(a) and (b) above.
(c) LLC will reimburse OPS for any wage,
employment-related or other tax not so withheld and/or remitted in accordance
with Section 6(b) above and for any costs and expenses, including reasonable
attorney's fees, penalties and interest, which OPS may incur by reason of LLC's
failure to comply with its obligations set forth in Section 6(b) above.
(d) LLC shall not use the name of OPS or any of its
Affiliates in any advertising, promotion or sales of any materials or services
without OPS's prior written concurrence.
7. Representations and Warranties of OPS. OPS represents,
warrants and covenants to LLC as follows:
(a) Valid Existence, Good Standing and Power. OPS is a
corporation duly organized, validly existing and in good standing under the laws
of the Commonwealth of Virginia, and is in good standing as a foreign
corporation in each jurisdiction in which the failure to qualify as a foreign
corporation could have, in the aggregate, an adverse effect in a material
respect on OPS's business, property or financial condition. OPS has all
requisite corporate power and authority to own, lease and operate its
properties, and to carry on its business as such business is now being
conducted, and to enter into this Agreement and perform its respective
obligations hereunder.
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(b) OPS Stock. The authorized capital stock of OPS
consists of 50,000,000 shares of Common Stock, and 5,000,000 shares of preferred
stock, without par value. Of such shares, on the Closing Date, approximately
4,472,000 shares of Common Stock, and no shares of OPS preferred stock, have
been issued and are outstanding. The outstanding shares of OPS capital stock
have been validly issued and are fully paid and nonassessable, and are free of
any preemptive rights, whether statutory or otherwise. There are no outstanding
or authorized subscriptions, options, warrants, calls or rights obligating OPS
to issue any additional shares of capital stock, except for options granted
under OPS's 1996 Stock Incentive Plan, OPS's 1996 Stock Option Plan for
Non-Employee Directors and the LLC Stock Option Agreement. There are no limits
or restrictions of any kind on the voting of the Common Stock.
(c) Stock to be Issued to LLC. The Shares of Common Stock
to be issued to LLC are duly authorized and, when issued pursuant to this
Agreement, will be validly issued, fully paid, nonassessable, and free of any
preemptive rights, whether statutory or otherwise.
(d) Authorization and Validity of Agreements. The
execution, delivery and performance by OPS of this Agreement and all related
documents contemplated hereby, and the consummation of the transactions
contemplated hereby and thereby, have been duly authorized by all necessary
corporate action. No shareholder approval is required. This Agreement and all
related documents to which OPS is a party have been duly executed and delivered
by OPS, and upon their execution and delivery as provided herein and therein,
will be legal and valid obligations of OPS, enforceable against it in accordance
with the terms of the respective document, except as may be limited by
applicable bankruptcy, insolvency or similar laws affecting creditors' rights
generally, and subject to general principles of equity (whether in law or in
equity) and public policy applicable to securities law.
(e) No Approvals or Notices Required; No Conflict with
Instruments. The execution, delivery and performance by OPS of this Agreement
and all related documents contemplated hereby, and the consummation by it of the
transactions contemplated hereby and thereby: (1) will not violate (with or
without the giving of notice or lapse of time or both) any judgment, ruling,
order, writ, injunction, statute, rule or regulation applicable to OPS; (2) will
not require any consent, approval, filing or notice under any provision of law
applicable to OPS; (3) will not (i) require any consent, approval or notice;
(ii) conflict with, result in the breach of any provision of, result in the
termination of, or constitute a default (or an event that, with notice or lapse
of time or both, would constitute a default); or (iii) result in the
acceleration of (or give any person the right to accelerate) the performance of
any obligation of OPS under any indenture, mortgage, deed of trust, lease,
licensing agreement, contract, instrument or other agreement to which OPS is a
party or by which the assets or properties of any of them are bound or
encumbered; and (4) will not result in the creation of a lien upon any
properties, assets or business of OPS pursuant to the articles of incorporation
or bylaws of OPS or any indenture, mortgage, deed of trust, lease, licensing
agreement, contract, instrument or other agreement to which OPS is a party or by
which the assets or properties of any of them are bound or encumbered.
(f) Legal Proceedings. Except as described in Schedule
7(f) to this Agreement, (1) there is no pending legal, administrative,
governmental or other claim, action,
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suit, or proceeding or governmental investigation to which OPS is a party or
relating to any of its properties or rights or otherwise affecting OPS; and (2)
there is no threatened legal, administrative, governmental or other claim,
action, suit, or proceeding or governmental investigation, or any basis for such
claim, action, suit, proceeding or investigation against or relating to OPS or
any of its respective properties or rights or which would affect OPS, which, if
adversely determined, would have, either singly or in the aggregate, a material
adverse effect on the financial condition, properties, good will, results of
operations or business of OPS taken as a whole. OPS is not in violation of any
term of any judgment, ruling, writ, decree, injunction or order outstanding
against it.
(g) OPS SEC Documents. OPS has filed all reports,
schedules, statements and other documents required to be filed by it with the
Securities and Exchange Commission under Sections 13(a) and 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), since May 30,
1996, the date upon which it became subject to the reporting requirements of the
Exchange Act (collectively, the "OPS SEC Documents"). Each of the OPS SEC
Documents complies as to form in all material respects with the applicable
requirements of the Exchange Act and the rules and regulations promulgated
thereunder and, as of their respective filing dates, does not contain any untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(h) Affiliated Transaction. The transactions contemplated
by this Agreement have been approved, prior to the date hereof, by a majority of
OPS's "disinterested directors" (as defined in Article 14 of the Virginia Stock
Corporation Act, as amended, in effect on the date of this Agreement (the
"Virginia Act")), within the meaning of Section 13.1-727(B)(1)(iv) of Article 14
of the Virginia Act.
(i) No Brokers. Neither OPS nor any of its officers,
directors or employees acting on behalf of OPS, has employed any broker,
investment banker or finder or incurred any liability for any brokerage fees,
commissions or finders' fees in connection with the transactions contemplated
hereby.
(j) Full Disclosure. The representations and warranties
made by OPS to LLC in this Agreement do not contain any untrue statement of a
material fact, or omit to state a material fact which would be necessary to make
the statements contained herein, in light of the circumstances in which they
were made, not misleading.
8. Representations and Warranties of LLC. LLC represent, warrant
and covenant to OPS as follows:
(a) Valid Existence, Good Standing and Power. LLC is a
limited liability company duly formed, validly existing and in good standing
under the laws of the State of Delaware, and is in good standing as a foreign
limited liability company in each jurisdiction in which the failure to qualify
as a foreign limited liability company could have, in the aggregate, an adverse
effect in a material respect on LLC's business, property or financial condition.
LLC
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has all requisite power and authority to own, lease and operate its properties,
and to carry on its business as such business is now being conducted.
(b) Authorization and Validity of Agreements. The
execution, delivery and performance by LLC of this Agreement and the related
documents contemplated hereby to which LLC is a party, and the consummation of
the transactions contemplated hereby and thereby, have been duly authorized by
all necessary action. This Agreement and the related documents contemplated
hereby to which LLC is a party have been duly executed and delivered by LLC, and
upon its execution and delivery as provided herein and therein, will be legal
and valid obligations of LLC, enforceable against it in accordance with the
terms of the respective documents, except as may be limited by applicable
bankruptcy, insolvency or similar laws affecting creditors' rights generally,
and subject to general principles of equity (whether in law or in equity) and
public policy applicable to securities law.
(c) No Approvals or Notices Required; No Conflict with
Instruments. The execution, delivery and performance by LLC of this Agreement
and all related documents to which LLC is a party, and the consummation of the
transactions contemplated hereby and thereby: (1) will not violate (with or
without the giving of notice or lapse of time or both) any judgment, ruling,
order, writ, injunction, statute, rule or regulation applicable to LLC; (2) will
not require any consent, approval, filing or notice under any provision of law
applicable to LLC; (3) will not (i) require any consent, approval or notice;
(ii) conflict with, result in the breach of any provision of, result in the
termination of, or constitute a default (or an event that, with notice or lapse
of time or both, would constitute a default); or (iii) result in the
acceleration of (or give any person the right to accelerate) the performance of
any obligation of LLC under any indenture, mortgage, deed of trust, lease,
licensing agreement, contract, instrument or other agreement to which LLC is a
party or by which the assets or properties of any of them are bound or
encumbered; and (4) will not result in the creation of a lien upon any
properties, assets or business of LLC pursuant to the respective certificate of
organization, operating agreement, charter or bylaws of LLC, or any indenture,
mortgage, deed of trust, lease, licensing agreement, contract, instrument or
other agreement to which LLC is a party or by which its assets or properties are
bound or encumbered.
(d) Legal Proceedings. There is no: (1) pending legal,
administrative, governmental or other claim, action, suit, or proceeding or
governmental investigation to which LLC is a party or relating to any of its
properties or rights or otherwise affecting LLC; and (2) threatened legal,
administrative, governmental or other claim, action, suit, or proceeding or
governmental investigation, or any basis for such claim, action, suit,
proceeding or investigation against or relating to LLC or any of its respective
properties or rights or which would affect LLC, which, if adversely determined,
would have, either singly or in the aggregate, a material adverse effect on the
financial condition, properties, good will, results of operations or business of
LLC taken as a whole. LLC is not in violation of any term of any judgment,
ruling, writ, decree, injunction or order outstanding against it.
(e) Certain Securities Laws Matters. LLC is acquiring the
Shares of Common Stock for its own account, without a view to the resale,
transfer or distribution thereof, and not for the account of others. LLC agrees
not to resell or otherwise dispose of all or any such stock,
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except as permitted by federal and state securities laws in the opinion of legal
counsel reasonably acceptable to OPS, including, without limitation, any and all
applicable provisions of this Agreement and any regulations under the Securities
Act of 1933, as amended (the "Securities Act"). LLC fully understands and agrees
that it must bear the economic risk of the investment in the Shares for an
indefinite period of time. LLC further understands that this stock has not been
registered under any federal or state securities laws, and may not be assigned
unless it is first registered or the transaction is exempt from registration
under federal or applicable state securities laws. LLC understands and agrees
that transfer of such shares will be restricted in their resale and that each
certificate evidencing the shares will bear the following legend, or one
substantially similar thereto:
The shares of stock represented by this certificate
have not been registered under the Securities Act of
1933, as amended (the "Act"), and no transfer, sale,
assignment, pledge, hypothecation or other
disposition of the shares represented by this
certificate may be made except (A) pursuant to the
effective registration statement under the Act and
any applicable state securities laws or (B) pursuant
to an exemption from the provisions of Section 5 of
the Act, and the rules and regulations in effect
thereunder, and state securities laws.
(f) Accredited Investors. Settle, Hobey, Crabtree, Thomas
H. Corson, Thomas J. McGrath and Charles B. Kaufmann III are the only members of
LLC, and each of these individuals is an "accredited investor" within the
meaning of Rule 501 of Regulation D under the Securities Act.
(g) No Brokers. Neither LLC nor any of its members,
managers or employees acting on behalf of LLC has employed any broker,
investment banker or finder or incurred any liability for any brokerage fees,
commissions or finders' fees in connection with the transactions contemplated
hereby.
(h) Full Disclosure. The representations and warranties
made by LLC to OPS in this Agreement do not contain any untrue statement of a
material fact, or omit to state a material fact which would be necessary to make
the statements contained herein, in light of the circumstances in which they
were made, not misleading.
9. Covenants. In exchange for OPS's utilization of LLC's services
and other good and valuable consideration, the receipt and sufficiency of which
LLC and its Affiliates hereby acknowledge, LLC agrees, and shall use its best
efforts to cause its Affiliates to agree, to enter into the covenants set forth
below in this Section 9.
(a) Confidentiality. For purposes of this Agreement,
"Confidential Information" shall mean any information of a proprietary or
confidential nature and trade secrets of OPS and its Affiliates (as defined in
Section 9(c) below) relating to the business of OPS and its Affiliates that have
not previously been publicly released by duly authorized representatives of OPS.
LLC and its Affiliates agree to regard and preserve as confidential all
Confidential
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Information pertaining to OPS's business that has been or may be obtained by LLC
or any of its Affiliates in the course of its involvement with OPS. Neither LLC
nor any of its Affiliates will, without prior written authority from OPS to do
so, use for its personal benefit or its personal purposes, unrelated to the
business of OPS, nor disclose to others, either during the term of this
Agreement or for five (5) years thereafter, except as required by the conditions
of its engagement hereunder, any Confidential Information of OPS. This provision
shall not apply after the Confidential Information has been voluntarily
disclosed to the public by a duly authorized representative of OPS,
independently developed and disclosed by others, or otherwise enters the public
domain through lawful means.
(b) Removal Of Documents Or Objects. LLC and its
Affiliates agree not to remove from the premises of OPS, except as a consultant
to OPS in pursuit of the business of OPS or any of its Affiliates, or except as
specifically permitted in writing by OPS, any document or object containing or
reflecting any Confidential Information of OPS or its Affiliates. LLC and its
Affiliates recognize that all documents or material containing Confidential
Information developed by it or by someone else in the course of employment by
OPS are the exclusive property of OPS; provided that the methods of analysis
that are the property of LLC and are used by LLC to prepare such documents or
material containing Confidential Information in the course of performing the
Services shall remain the property of LLC.
(c) Nonpiracy Covenants.
(1) For the purpose of this Agreement, the
following terms shall have the following meanings:
(i) "OPS Customers" shall be limited to
those customers of OPS or its Affiliates for whom OPS or its Affiliates are
rendering services as of the date of termination of LLC's engagement hereunder;
(ii) "Affiliates" shall have the meaning
ascribed to such term in Rule 12b-2 under the Exchange Act as in effect on the
date of this Agreement;
(iii) "Prohibited Services" shall mean
services in the new and remanufactured office furniture industry performed by
OPS or its Affiliates, their agents or employees in any other business engaged
in by OPS or its Affiliates on the date of termination of LLC's engagement
hereunder;
(iv) "Prospective Customers" shall be
limited to those parties known by LLC or any of its Affiliates to have been
solicited for business within any Prohibited Services within the twelve
(12)-month period preceding the date of termination of LLC's engagement
hereunder, and with or from whom, within the twelve (12)-month period preceding
the date of termination of LLC's engagement hereunder, someone acting on behalf
of OPS or its Affiliates either had met for the purpose of offering any
Prohibited Services or had received a written response to an earlier
solicitation to provide any Prohibited Services;
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(v) "Restricted Period" shall mean the
period of five (5) years immediately following the date of termination of LLC's
engagement hereunder.
(2) LLC and its Affiliates recognize that over a
period of years OPS has developed, at considerable expense, relationships with,
and knowledge about, Customers and Prospective Customers which constitute a
major part of the value of OPS. During the course of its engagement by OPS, LLC
and its Affiliates will either have substantial contact with, or obtain
substantial knowledge about, these Customers and Prospective Customers. In order
to protect the value of OPS's business, LLC and its Affiliates covenant and
agree that, in the event of the termination of LLC's engagement hereunder,
neither LLC nor any of its Affiliates will, directly or indirectly, for its own
account or for the account of any other person or entity, as an owner,
stockholder, partner, agent, broker, consultant or other participant during the
Restricted Period:
(i) solicit a Customer for the purpose
of providing Prohibited Services to such Customer;
(ii) accept an invitation from a
Customer for the purpose of providing Prohibited Services to such Customer;
(iii) solicit a Prospective Customer for
the purpose of providing Prohibited Services to such Prospective Customer; and
(iv) accept an invitation from a
Prospective Customer for the purpose of providing Prohibited Services to such
Prospective Customer.
Subsections (i), (ii), (iii), and (iv) are separate and divisible
covenants; if for any reason any one covenant is held to be illegal, invalid or
unenforceable, in whole or in part, the remaining covenants shall remain valid
and enforceable and shall not be affected thereby. Further, the periods and
scope of the restrictions set forth in any such subsection shall be reduced by
the minimum amount necessary to reform such subsection to the maximum level of
enforcement permitted to OPS by the law governing this Agreement. Additionally,
LLC and its Affiliates agree that no separate geographic limitation is needed
for the foregoing nonpiracy covenants as such are not a prohibition on LLC's
involvement in the new and remanufactured office furniture industry and are
already limited to only those entities which are included within the definition
of "Customer" and "Prospective Customer."
(d) Nonraiding of Employees.
[Language to be mutually agreed upon by the parties to this Agreement
and to be included in an amendment to this Schedule 13D]
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(e) Remedies Upon Breach of Agreement. Notwithstanding
the provisions of Section 12 below, if LLC or any of its Affiliates materially
breaches any provision of Section 9 of this Agreement and fails to cure any such
material breach within five (5) days after written notice of said material
breach is received from OPS, OPS reserves the right to avail itself of any
reasonable remedy available to it at law or in equity. LLC and its Affiliates
acknowledge and agree that OPS shall be entitled to injunctive relief against
LLC or any of its Affiliates for any material violation by LLC or any of its
Affiliates of Sections 9(a), (b), (c) or (d) of this Agreement that LLC or any
of its Affiliates fails to cure within five (5) days after receipt of written
notice from OPS. LLC and its Affiliates agree that the foregoing remedies shall
be cumulative and not exclusive, shall not be waived by any partial exercise or
nonexercise thereof and shall be in addition to any other remedies available to
OPS at law or in equity.
(f) Tolling of Restrictive Covenants During Violation. If
a material breach by LLC or any of its Affiliates of any of the restrictive
covenants of this Agreement occurs, LLC and its Affiliates agree that the
restrictive period of each such covenant so materially violated shall be
extended by a period of time equal to the period of such material violation by
LLC or any of its Affiliates. It is the intent of the parties regarding this
Section 9 that the running of the restricted period of a restrictive covenant
shall be tolled during any period of material violation of such covenant so that
OPS shall get the full and reasonable protection for which it contracted and so
that neither LLC nor any of its Affiliates may profit by its material breach.
10. Transferability of Options. To the extent requested by LLC
after the Closing, but prior to the expiration of the exercise periods of the
options granted to LLC pursuant to the LLC Stock Option Agreement, OPS will use
its prudent efforts to effect, following the expiration or termination of the
Consulting Agreement, the transferability of such options to members of LLC
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or their immediate family members, LLC's Affiliates, or such other mutually
agreed upon parties in a manner that is in the best interests of both OPS and
LLC.
11. LLC Approval of Press Releases. OPS will obtain the prior
approval of Settle, or such other person as LLC may from time to time designate,
before issuing or releasing any press releases or other public disclosures that
contain references to LLC or the Services; provided that, if time is of the
essence with respect to any such press release or other public disclosure, and
Settle or the LLC designee is not reasonably available for the review and
approval of such document, OPS may release such press release or other public
disclosure as long as OPS can provide to LLC evidence of its attempts to obtain
the approval required under this Section 11.
12. Indemnification; Survival.
(a) LLC Indemnification. LLC agrees to defend, indemnify
and hold OPS and its Affiliates, and their respective directors, officers and
employees ("OPS Indemnitees"), harmless from and against any and all
liabilities, actions, suits, claims, proceedings, costs, losses, damages,
judgments, amounts paid in settlement in accordance with Section 12(c) below and
reasonable expenses (including but not limited to reasonable attorney's fees and
disbursements), suffered or incurred by OPS or OPS Indemnitees for injury of any
kind to persons or damage to property resulting from or arising out of or in
connection with (1) any inaccuracy in or breach, violation or nonobservance of
the representations, warranties, covenants or agreements contained in this
Agreement, or (2) any activities or Services carried out under this Agreement
that result from the gross negligence or willful misconduct of the Consultants,
or other employees or agents of LLC; provided that LLC shall not be responsible
for the acts of Hobey and Crabtree in their capacities as employees of OPS or of
Hobey and Settle in their capacities as directors of OPS.
(b) OPS Indemnification. OPS agrees to defend, indemnify
and hold LLC, and its respective managers, members and employees ("LLC
Indemnitees"), harmless from and against any and all liabilities, actions,
suits, claims, proceedings, costs, losses, damages, judgments, amounts paid in
settlement in accordance with Section 12(c) below and reasonable expenses
(including but not limited to reasonable attorney's fees and disbursements),
suffered or incurred by LLC or LLC Indemnitees for injury of any kind to persons
or damage to property resulting from or arising out of or in connection with (1)
any inaccuracy in or breach, violation or nonobservance of the representations,
warranties, covenants or agreements contained in this Agreement, or (2) any
activities or Services carried out under this Agreement that do not result from
the gross negligence or willful misconduct of the Consultants, or other
employees or agents of LLC.
(c) Notice of Indemnifiable Loss. Each indemnified party
(the "Indemnified Party") shall provide written notice to the indemnifying party
(the "Indemnifying Party") of any claim with respect to which it seeks
indemnification promptly after the discovery by the Indemnified Party of any
matters giving rise to a claim for indemnification, provided that the failure of
the Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligation under this Section 12, except if and to the
extent the Indemnifying Party has been materially prejudiced thereby. Provided
that the Indemnifying Party has agreed to indemnify the Indemnified Party with
respect to the noticed claim, the
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Indemnified Party shall have the control of all litigation for which indemnity
is available pursuant to this Section 12. The Indemnifying Party shall not,
without the Indemnified Party's prior written consent, which shall not be
unreasonably withheld, settle or compromise any action, suit, claim or
proceeding to which an Indemnified Party is a party or consent to entry of any
judgment in respect thereof. The Indemnifying Party further agrees that it will
not, without the Indemnified Party's prior written consent, settle or compromise
any claim or proceeding in respect of which indemnification may be sought
hereunder unless such settlement or compromise includes unconditional release of
the Indemnified Party from all liability arising out of such action, suit, claim
or proceeding.
(d) Survival. The respective representations and
warranties, covenants and indemnities of the parties hereto, including those
made in or resulting from any certificates, instruments or other documents
delivered pursuant to this Agreement, shall survive the Closing under this
Agreement and, with respect to representations and warranties, covenants and
indemnities of LLC, LLC's termination of Services to OPS.
13. No Rescission. Notwithstanding anything to the contrary in
this Agreement, OPS shall not possess as a remedy for a breach of this Agreement
or of any of the agreements contemplated herein any right of rescission or
termination with respect to the Shares or the options granted pursuant to the
LLC Stock Option Agreement, except that such options shall be subject to
termination to the extent expressly set forth in the LLC Stock Option Agreement.
14. Miscellaneous.
(a) Notices. Any notices or other communications required
or permitted hereunder shall be sufficiently given if in writing (including
telecopy or similar teletransmission), addressed as follows:
If to OPS,
to it at: Open Plan Systems, Inc.
4299 Carolina Avenue
Building C
Richmond, Virginia 23222
Telecopier: (804) 228-5656
Attention: Anthony F. Markel
With a copy to: Williams Mullen Christian & Dobbins
1021 East Cary Street, 16th Floor
Richmond, Virginia 23219
Telecopier: (804) 783-6507
Attention: Theodore L. Chandler, Jr., Esquire
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If to LLC,
to it at: Great Lakes Capital, LLC
310 South Street
Morristown, New Jersey 07960
Telecopier: (973) 539-7909
Attention: W. Sydnor Settle
With a copy to: Dykema Gossett PLLC
400 Renaissance Center
Detroit, Michigan 48243-1668
Telecopier: (313) 568-6915
Attention: Fredrick M. Miller, Esquire
Unless otherwise specified herein, such notices or other communications shall be
deemed received (a) in the case of any notice or communication sent other than
by mail, on the date actually delivered to such address (evidenced, in the case
of delivery by overnight courier, by confirmation of delivery from the overnight
courier service making such delivery, and in the case of a telecopy, by receipt
of a transmission confirmation form or the addressee's confirmation of receipt),
or (b) in the case of any notice or communication sent by mail, three business
days after being sent, if sent by registered or certified mail, with first-class
postage prepaid. Each of the parties hereto shall be entitled to specify a
different address by giving notice as aforesaid to each of the other parties
hereto.
(b) Entire Agreement; Amendment. This Agreement shall
supersede any and all existing agreements between LLC or any of its Affiliates
and OPS or any of its Affiliates. This Agreement contains the entire agreement
and understanding of the parties with respect to the subject matter hereof and
there are no agreements, undertakings or understandings, whether oral or
written, that are not fully set forth herein. Notwithstanding the foregoing, the
Confidentiality Letter Agreement between GLC and OPS, dated March 27, 1998,
shall continue in full force and effect. No provision of this Agreement shall be
amended, modified, waived or discharged except as agreed to in writing by LLC
and OPS.
(c) Waiver. The failure of a party to insist upon strict
adherence to any term of this Agreement on any occasion shall not be considered
a waiver thereof or deprive that party of the right thereafter to insist upon
strict adherence to that term or any other term of this Agreement.
(d) Assignment. This Agreement shall be binding upon and
inure to the benefit of LLC, and with respect to the amounts set forth in
Section 4, its distributees, successors and assigns, and OPS and its permitted
assigns. Neither this Agreement nor any of the rights of the parties hereunder
may be transferred to or assigned by either party hereto. Any assignment or
transfer of this Agreement in violation of this Section 14(d) shall be void.
(e) Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the Commonwealth of Virginia
applicable to agreements made in that state.
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<PAGE>
(f) Consent to Jurisdiction. Each party to this
Agreement, by its execution hereof, (i) hereby irrevocably submits, and agrees
to cause each of its Affiliates to submit, to the jurisdiction of the federal
courts located in the City of Richmond, Virginia, and in the event that such
federal courts shall not have subject matter jurisdiction over the relevant
proceeding, then of the state courts located in the City of Richmond, Virginia,
for the purpose of any action arising out of or based upon this Agreement or
relating to the subject matter hereof or the transactions contemplated hereby,
(ii) hereby waives, and agrees to cause each of its Affiliates to waive, to the
extent not prohibited by applicable law, and agrees not to assert, and agrees
not to allow any of its Affiliates to assert, by way of motion, as a defense or
otherwise, in any such action, any claim that it is not subject personally to
the jurisdiction of the above-named courts, that its property is exempt or
immune from attachment or execution, that any such proceeding brought in one of
the above-named courts is improper, or that this Agreement or the subject matter
hereof may not be enforced in or by such court and (iii) hereby agrees not to
commence or to permit any of its Affiliates to commence any action arising out
of or based upon this Agreement or relating to the subject matter hereof other
than before one of the above-named courts nor to make any motion or take any
other action seeking or intending to cause the transfer or removal of any such
action to any court other than one of the above-named courts whether on the
grounds of inconvenient forum or otherwise. Each party hereby consents to
service of process in any such proceeding in any manner permitted by Virginia
law, as the case may be, and agrees that service of process by registered or
certified mail, return receipt requested, at its address specified pursuant to
Section 14(a) above is reasonably calculated to give actual notice.
Notwithstanding anything contained in this Section 14(f) to the contrary with
respect to the parties' forum selection, if an action is filed against a party
to this Agreement, including its Affiliates, by a person who or which is not a
party to this Agreement, an Affiliate of a party to this Agreement, or an
assignee thereof (a "Third Party Action"), in a forum other than the federal
district court or a state court located in the City of Richmond, Virginia, and
such Third Party Action is based upon, arises from, or implicates rights,
obligations or liabilities existing under this Agreement or acts or omissions
pursuant to this Agreement, then the party to this Agreement, including its
Affiliates, joined as a defendant in such Third Party Action shall have the
right to file cross-claims or third-party claims in the Third Party Action
against the other party to this Agreement, including its Affiliates, and even if
not a defendant therein, to intervene in such Third Party Action with or without
also filing cross-claims or third-party claims against the other party to this
Agreement, including its Affiliates.
(g) Headings. Section headings are used herein for
convenience of reference only and shall not affect the meaning of any provision
of this Agreement.
(h) Severability. LLC agrees that if any provision of
this Agreement, or any portion thereof, shall be adjudged by any court of
competent jurisdiction to be invalid or unenforceable for any reason, such
determination shall be confined to the operation of the provision at issue and
shall not affect or invalidate any other provision of this Agreement and such
court shall be empowered to substitute, to the extent enforceable, provisions
similar thereto or other provisions so as to provide to OPS to the fullest
extent permitted by applicable law the benefits intended by such provisions.
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<PAGE>
(i) Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one instrument. Each counterpart may consist
of a number of copies each signed by less than all, but together signed by all,
the parties hereto.
[SIGNATURES ON THE NEXT PAGE]
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<PAGE>
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
executed as of the date first written above.
OPEN PLAN SYSTEMS, INC.
By: /s/ Anthony F. Markel
----------------------------------
Anthony F. Markel,
Chairman of the Board
GREAT LAKES CAPITAL, LLC
By: /s/ W. Sydnor Settle
----------------------------------
W. Sydnor Settle,
Manager
<PAGE>
Exhibit B
OPEN PLAN SYSTEMS, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT dated as of June 17, 1998, between Open Plan Systems,
Inc., a Virginia corporation (the "Company"), and Great Lakes Capital, LLC, a
Delaware limited liability company ("Optionee"), is made pursuant and subject to
the provisions of that certain Management and Consulting Agreement, dated June
17, 1998, by and between the Company and Optionee (the "Consulting Agreement").
All terms used herein that are defined in the Consulting Agreement shall have
the same meaning given them in the Consulting Agreement.
1. Grant of Option. Pursuant to the terms of the Consulting
Agreement, the Company hereby grants to Optionee, subject to the terms and
conditions herein set forth, the right and option to purchase from the Company
all or any part of an aggregate of Six Hundred Thousand (600,000) shares of the
Common Stock, without par value, of the Company (the "Common Stock") at an
option price per share as follows:
Number of Strike
Shares Price
--------- ------
150,000 $3.00
150,000 $4.50
150,000 $6.00
150,000 $7.50
Such option is to be exercisable as hereinafter provided.
2. Terms and Conditions. This option is subject to the following
terms and conditions:
(a) Expiration Date. The Expiration Date of this option
is June 30, 2003.
(b) Exercise of Option. This option is immediately
exercisable by Optionee, in whole or in part, as of the date hereof. A partial
exercise of this option shall not affect Optionee's right to exercise
subsequently this option with respect to the remaining shares that are
exercisable, subject to the conditions of this Agreement.
(c) Method of Exercising and Payment for Shares. This
option may be exercised only by written notice delivered to the attention of the
Company's Secretary at the Company's principal office in Richmond, Virginia. The
written notice shall specify the number of shares being acquired pursuant to the
exercise of the option when such option is being exercised in part in accordance
with subparagraph 2(b) hereof. The exercise date shall be the date upon which
such notice is received by the Company. Such notice shall be accompanied by
payment of the option price in full for each share either in cash in United
States Dollars, or by the surrender of shares of Common Stock, or by cash
equivalent acceptable to the Company or any combination thereof having an
aggregate fair market value equal to the total option price for all the shares
being purchased.
(d) Nontransferability. This option is nontransferable.
<PAGE>
3. Fractional Shares. Fractional shares shall not be issuable
hereunder.
4. Investment Representation. Optionee agrees that, unless such
shares shall previously have been registered under the Securities Act of 1933,
as amended, (a) any shares purchased hereunder will be purchased for investment
and not with a view to distribution or resale, and (b) until such registration,
certificates representing such shares may bear an appropriate legend to assure
compliance with such Act. This investment representation shall terminate when
such shares have been registered under the Securities Act of 1933, as amended.
Optionee understands and agrees that transfer of such shares will be restricted
in their resale and that each certificate evidencing the shares will bear the
following legend, or one substantially similar thereto:
The shares of stock represented by this certificate have not
been registered under the Securities Act of 1933, as amended
(the "Act"), and no transfer, sale, assignment, pledge,
hypothecation or other disposition of the shares represented
by this certificate may be made except (A) pursuant to the
effective registration statement under the Act and any
applicable state securities laws or (B) pursuant to an
exemption from the provisions of Section 5 of the Act, and the
rules and regulations in effect thereunder, and state
securities laws.
5. Change in Capital Structure. Subject to any required action by
the shareholders of the Company, the number of shares of Common Stock covered by
this option, and the price per share thereof, shall be proportionately adjusted
and its terms shall be adjusted, to reflect (i) any increase or decrease in the
number of issued and outstanding shares of Common Stock resulting from any stock
dividend (but only on, or payable in, Common Stock), stock split, subdivision,
combination, reclassification or recapitalization, (ii) the issuance of rights,
options, warrants or other securities exercisable for or convertible into Common
Stock having an exercise or conversion price below the fair market value of the
Common Stock on the date of such issuance, (iii) any change in the number of
such shares outstanding resulting from the issuance of Common Stock for cash or
property or labor or services by the Company, if the amount of cash, or, if
other than cash consideration is received, the value of such other consideration
(as determined in good faith by the Company's Board of Directors) is less than
the fair market value of the Common Stock on the date of such issuance, or (iv)
any spin-off, spin-out, split-up, split-off or other distribution of assets to
shareholders.
In the event of a change in the Common Stock of the Company as
presently constituted, which is limited to a change of all of its authorized
shares with par value or without par value, the shares resulting from any such
change shall be deemed to be the Common Stock.
The grant of this option shall not affect in any way the right or power
of the Company to make adjustments, reclassifications, reorganizations or
changes of its capital or business structure or to merge or to consolidate or to
dissolve, liquidate or sell, or transfer all or any part of its business or
assets.
6. Sale of the Company. In the event that the Company enters into
an agreement prior to the Expiration Date of this option whereby the Company
shall be acquired by merger, share exchange or consolidation, or shall sell
substantially all of its assets, the Board of Directors of the Company shall use
its reasonable best efforts to see that this option is converted into an option
to purchase the acquiring company's stock upon consummation of such transaction.
In the
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<PAGE>
event this option is not converted into an option for the purchase of shares in
the acquiring company, then any unexercised portion of this option at such time
shall be deemed to have a value equal to the price computed by using the
Black-Scholes option pricing model using as inputs each option's expiration date
and strike price, a price for the Common Stock of the Company equal to the
acquisition price per share and an assumed volatility rate of 45%. The Company
shall pay to Optionee such value on the date of consummation of such
transaction.
7. Continued Employment of C.E.O. If at any time prior to
December 17, 1998, John L. Hobey ("Hobey") voluntarily terminates his employment
with the Company as its Chief Executive Officer for any reason, or is terminated
by the Company for (i) "Proper Cause" (as that term is defined in that certain
Employment Agreement, dated June 17, 1998, between Hobey and the Company (the
"Hobey Employment Agreement")) or (ii) death or disability (in accordance with
the Hobey Employment Agreement), any unexercised portion of this option shall be
immediately forfeited by the Optionee and shall be immediately null and void and
without effect. If after December 17, 1998, but prior to June 17, 1999, Hobey's
employment with the Company as its Chief Executive Officer is voluntarily
terminated by him for any reason, or at any time is terminated by the Company
for (x) "Proper Cause" (as that term is defined in the Hobey Employment
Agreement) or (y) death or disability (in accordance with the Hobey Employment
Agreement), then any unexercised portion of this option must be exercised within
one (1) year from the date on which Hobey's employment with the Company as its
Chief Executive Officer ceases, or this option will be forfeited by the Optionee
and shall be immediately null and void and without effect. If, after June 17,
1999, Hobey's employment with the Company as its Chief Executive Officer is
terminated for any reason (including voluntary resignation), there shall be no
effect on this option and this option shall continue in accordance with its
terms.
8. Notices. Any notices or other communications required or
permitted hereunder shall be sufficiently given if in writing (including
telecopy or similar teletransmission), addressed as follows:
(A) If to the Company, to it at the following address:
4299 Carolina Avenue
Building C
Richmond, Virginia 23222
Telecopier: (804) 228-5656
Attn: Chairman of the Board
with a copy to:
Williams Mullen Christian & Dobbins
1021 East Cary Street, 16th Floor
Richmond, Virginia 23219
Telecopier: (804) 783-6507
Attention: Theodore L. Chandler, Jr., Esquire
(B) If to the Optionee, to it at the following address:
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<PAGE>
Great Lakes Capital, LLC
310 South Street
Morristown, New Jersey 07960
Telecopier: (973) 539-7909
Attention: W. Sydnor Settle
with a copy to:
Dykema, Gossett P.C.
400 Renaissance Center
Detroit, Michigan 48243-1668
Telecopier: (313) 568-6915
Attention: Fredrick M. Miller, Esquire
Unless otherwise specified herein, such notices or other communications shall be
deemed received (a) in the case of any notice or communication sent other than
by mail, on the date actually delivered to such address (evidenced, in the case
of delivery by overnight courier, by confirmation of delivery from the overnight
courier service making such delivery, and in the case of a telecopy, by receipt
of a transmission confirmation form or the addressee's confirmation of receipt),
or (b) in the case of any notice or communication sent by mail, three Business
Days after being sent, if sent by registered or certified mail, with first-class
postage prepaid. Each of the parties hereto shall be entitled to specify a
different address by giving notice as aforesaid to each of the other parties
hereto.
9. Amendments. This Agreement may not be amended, changed,
supplemented, waived or otherwise modified or terminated except by an instrument
in writing signed by the Company and Optionee.
10. Successors and Assigns. Except as otherwise provided herein,
this Agreement shall be binding upon and shall inure to the benefit of and be
enforceable by the parties and their respective successors and assigns,
including without limitation in the case of any corporate party hereto any
corporate successor by merger or otherwise; provided that no party may assign
this Agreement without the other party's prior written consent.
11. Entire Agreement. This Agreement embodies the entire agreement
and understanding among the parties relating to the subject matter hereof and
supersedes all prior agreements and understandings relating to such subject
matter.
12. Consent to Jurisdiction. Each party to this Agreement, by its
execution hereof, (i) hereby irrevocably submits, and agrees to cause each of
its Affiliates to submit, to the jurisdiction of the federal courts located in
the City of Richmond, Virginia, and in the event that such federal courts shall
not have subject matter jurisdiction over the relevant proceeding, then of the
state courts located in the City of Richmond, Virginia, for the purpose of any
action arising out of or based upon this Agreement or relating to the subject
matter hereof or the transactions contemplated hereby, (ii) hereby waives, and
agrees to cause each of its Affiliates to waive, to the extent not prohibited by
applicable law, and agrees not to assert, and agrees not to allow any of its
Affiliates to assert, by way of motion, as a defense or otherwise, in any such
action, any claim that it is not subject personally to the jurisdiction of the
above-named courts, that its property is exempt or immune from attachment or
execution, that any such proceeding brought in
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<PAGE>
one of the above-named courts is improper, or that this Agreement or the subject
matter hereof may not be enforced in or by such court and (iii) hereby agrees
not to commence or to permit any of its Affiliates to commence any action
arising out of or based upon this Agreement or relating to the subject matter
hereof other than before one of the above-named courts nor to make any motion or
take any other action seeking or intending to cause the transfer or removal of
any such action to any court other than one of the above-named courts whether on
the grounds of inconvenient forum or otherwise. Each party hereby consents to
service of process in any such proceeding in any manner permitted by Virginia
law, as the case may be, and agrees that service of process by registered or
certified mail, return receipt requested, is reasonably calculated to give
actual notice. Notwithstanding anything contained in this paragraph 12 to the
contrary with respect to the parties' forum selection, if an action is filed
against a party to this Agreement, including its Affiliates, by a person who or
which is not a party to this Agreement, an Affiliate of a party to this
Agreement, or an assignee thereof (a "Third Party Action"), in a forum other
than the federal district court or a state court located in the City of
Richmond, Virginia, and such Third Party Action is based upon, arises from, or
implicates rights, obligations or liabilities existing under this Agreement or
acts or omissions pursuant to this Agreement, then the party to this Agreement,
including its Affiliates, joined as a defendant in such Third Party Action shall
have the right to file cross-claims or third-party claims in the Third Party
Action against the other party to this Agreement, including its Affiliates, and
even if not a defendant therein, to intervene in such Third Party Action with or
without also filing cross-claims or third-party claims against the other party
to this Agreement, including its Affiliates.
13. Governing Law. This Agreement shall be governed by and
construed in accordance with the domestic substantive law of the Commonwealth of
Virginia, without giving effect to any choice or conflict of law provision or
rule that would cause the application of the law of any other jurisdiction.
14. Name, Captions. The name assigned to this Agreement and the
section captions used herein are for convenience of reference only and shall not
affect the interpretation or construction hereof.
15. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one instrument. Each counterpart may consist of a
number of copies each signed by less than all, but together signed by all, the
parties hereto.
[SIGNATURES ON NEXT PAGE]
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<PAGE>
IN WITNESS WHEREOF, the Company and Optionee have caused this Agreement
to be signed by duly authorized officers and managers, respectively, as of the
date first above written.
GREAT LAKES CAPITAL, LLC OPEN PLAN SYSTEMS, INC.
By: /s/ W. Sydnor Settle By: /s/ Anthony F. Markel
----------------------------- ---------------------------------
W. Sydnor Settle Anthony F. Markel
Manager Chairman of the Board
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<PAGE>
Exhibit C
VOTING AND STANDSTILL AGREEMENT
THIS VOTING AND STANDSTILL AGREEMENT (the "Agreement"), dated as of
June 17, 1998, is made between OPEN PLAN SYSTEMS, INC., a Virginia corporation
("OPS"), GREAT LAKES CAPITAL, LLC, a Delaware limited liability company ("LLC"),
and GREAT LAKES CAPITAL, INC., a Delaware corporation ("GLC").
W I T N E S S E T H:
WHEREAS, OPS and LLC have entered into a Management and Consulting
Agreement, dated as of June 17, 1998 (the "Consulting Agreement"), under which
LLC and agreed to provide certain management and consulting services; and
WHEREAS, pursuant to the Consulting Agreement, LLC has acquired (i)
200,000 shares of the Common Stock, without par value, of OPS ("Common Stock")
and (ii) an option to purchase 600,000 shares of Common Stock, and, as a result,
beneficially owns as of the date hereof approximately 15.2% of the issued and
outstanding shares of Common Stock on a diluted basis; and
WHEREAS, OPS, LLC and GLC desire to establish in this Agreement certain
conditions of LLC's and GLC's relationship with OPS.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and in the Consulting Agreement, OPS, LLC and GLC hereby agree
as follows:
ARTICLE I
Definitions; Representations and Warranties
Section 1.1. Definitions. For purposes of this Agreement, the
following terms have the following meanings:
(a) "Additional Shares" shall mean shares of Common Stock that LLC
and its Affiliates may acquire following the date of the Consulting Agreement on
the open market, in privately negotiated transactions and/or directly from OPS
so that LLC and its Affiliates would beneficially own no greater than 21.0% of
the issued and outstanding shares of Common Stock on a fully diluted basis;
provided that shares of Common Stock that LLC and its Affiliates may acquire
pursuant to OPS's 1996 Stock Incentive Plan and 1996 Stock Option Plan for
Non-Employee Directors shall not be deemed to be Additional Shares.
(b) "Adjusted Outstanding Shares" shall mean, at any time and with
respect to the determination of (i) the LLC Ownership Percentage as it relates
to LLC and its Affiliates, (ii) the Standstill Percentage as it relates to LLC
and its Affiliates, and (iii) any other percentage of the beneficial ownership
of Common Stock as it relates to a Person or Group, the total number of
<PAGE>
shares of Common Stock then issued and outstanding together with the total
number of shares of Common Stock not then issued and outstanding that would be
outstanding if (x) all then existing shares of convertible preferred stock had
been converted into shares of Common Stock and (y) all then existing warrants
and options exercisable into shares of Common Stock had been exercised (other
than underwriters' overallotment options and stock options granted under benefit
plans of OPS or any of its Affiliates), but excluding any rights that may be
exercisable under any Rights Agreement that may be adopted by OPS.
(c) "Affiliate" shall have the meaning ascribed to such term in
Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), as in effect on the date of this Agreement, and shall include, with
respect to a determination of the Affiliates of LLC, any Affiliate of GLC.
(d) "Beneficial ownership," "beneficial owner" and "beneficially
own" shall have the meanings ascribed to such terms in Rule 13d-3 under the
Exchange Act as in effect on the date of this Agreement; provided that LLC and
each of its Affiliates and any Person or Group shall be deemed to be the
beneficial owners of any shares of Common Stock that LLC or such Affiliate,
Person and/or Group, as the case may be, has the right to acquire within one
year pursuant to any agreement, arrangement or understanding or upon the
exercise of conversion or exchange rights, warrants, options or otherwise.
(e) "Common Stock" shall have the meaning set forth in the
recitals to this Agreement.
(f) "Consulting Agreement" shall have the meaning set forth in the
recitals to this Agreement.
(g) "Continuing Directors" shall mean the members of the Board of
Directors of OPS immediately prior to the closing of the transactions
contemplated by the Consulting Agreement and any future members of the Board of
Directors nominated by the Board of Directors; provided, however, that no LLC
Director shall constitute a Continuing Director or be counted in determining the
presence of a quorum of Continuing Directors.
(h) "Control" shall mean, with respect to a Person or a Group, (i)
beneficial ownership by such Person or Group of securities that entitle it to
exercise in the aggregate more than fifty percent (50%) of the votes in any
election of directors or other governing body of the entity in question; or (ii)
possession by such Person or Group of the power, directly or indirectly, (x) to
elect a majority of the board of directors (or equivalent governing body) of the
entity in question or (y) in case of a non-corporate entity, to manage or govern
the business, operations or investments of any such non-corporate entity.
(i) "Group" shall have the meaning comprehended by Section
13(d)(3) of the Exchange Act as in effect on the date of this Agreement.
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(j) "Hobey Termination" shall mean (i) the termination by OPS of
the employment of John L. Hobey ("Hobey") as Chief Executive Officer of OPS for
Proper Cause (as defined in the Employment Agreement, effective June 17, 1998,
by and between John L. Hobey and OPS (the "Employment Agreement")), (ii) the
termination by OPS of Hobey as Chief Executive Officer of OPS due to death or
disability (in accordance with the Employment Agreement) or (iii) the voluntary
resignation of Hobey as Chief Executive Officer of OPS, whichever is the first
to occur.
(k) "LLC Directors" shall mean Hobey and W. Sydnor Settle
("Settle"), each of whom OPS has agreed to appoint to the OPS Board of Directors
pursuant to the Consulting Agreement.
(l) "LLC Ownership Percentage" shall mean, at any time, the
percentage of the Adjusted Outstanding Shares that is beneficially owned in the
aggregate by LLC and its Affiliates.
(m) "LLC Shares" shall mean collectively (i) the 200,000 shares of
Common Stock owned by LLC, (ii) the 600,000 shares of Common Stock that LLC has
the option to acquire pursuant to the terms of the Stock Option Agreement, (iii)
the 3,000 shares of Common Stock owned by Settle, (iv) the 5,000 shares of
Common Stock owned by Hobey, (v) the 25,000 shares of Common Stock that Hobey
has the option to acquire pursuant to the terms of an Employee Nonqualified
Stock Option Agreement, dated as of June 17, 1998, between OPS and Hobey, (vi)
the 3,000 shares of Common Stock owned by William F. Crabtree ("Crabtree"),
(vii) the 12,500 shares of Common Stock that Crabtree has the option to acquire
pursuant to the terms of an Employee Nonqualified Stock Option Agreement, dated
as of June 17, 1998, between OPS and Crabtree, (viii) the Additional Shares and
(ix) such additional shares of Common Stock that OPS may issue with respect to
such shares pursuant to any stock splits, stock dividends, recapitalizations,
restructurings, reclassifications or similar transactions.
(n) "Person" shall have the meaning set forth in Section 3(a)(9)
of the Exchange Act as in effect on the date of this Agreement.
(o) "Registration Rights Agreement" shall mean the Registration
Rights Agreement, dated June 17, 1998, executed by OPS and LLC in connection
with the Consulting Agreement.
(p) "Standstill Percentage" shall mean, at any time, not more than
21.0% of the Adjusted Outstanding Shares.
(q) "Stock Option Agreement" shall mean the Nonqualified Stock
Option Agreement, dated June 17, 1998, executed by OPS and LLC in connection
with the Consulting Agreement.
(r) "Transfer" shall mean sell, transfer, assign, pledge,
hypothecate, give away or in any manner dispose of any Common Stock.
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Section 1.2. Representations and Warranties of LLC. LLC
represents and warrants to OPS as follows:
(a) LLC is a limited liability company duly formed, validly
existing and in good standing under the laws of the State of Delaware.
(b) Except for the LLC Shares, neither LLC nor any of its
Affiliates beneficially owns any Common Stock or any options, warrants or rights
of any nature (including conversion and exchange rights) to acquire beneficial
ownership of any Common Stock.
(c) LLC has full legal right, power and authority to enter into
and perform this Agreement, and the execution and delivery of this Agreement by
LLC have been duly authorized by all necessary action on behalf of LLC. This
Agreement is enforceable against LLC.
(d) The execution, delivery and performance of this Agreement by
LLC does not and will not conflict with or constitute a violation of or default
under the Charter or Operating Agreement (or comparable documents) of LLC, or
any statute, law, regulation, order or decree applicable to LLC, or any
contract, commitment, agreement, arrangement or restriction of any kind to which
LLC is a party or by which LLC is bound, other than such violations as would not
prevent or materially delay the performance by LLC of its obligations hereunder
or otherwise subject OPS to any claim or liability.
Section 1.3. Representations and Warranties of GLC. GLC
represents and warrants to OPS as follows:
(a) GLC is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware.
(b) GLC has full legal right, power and authority to enter into
and perform this Agreement, and the execution and delivery of this Agreement by
GLC have been duly authorized by all necessary corporate action on behalf of
GLC. This Agreement is enforceable against GLC.
(d) The execution, delivery and performance of this Agreement by
GLC does not and will not conflict with or constitute a violation of or default
under the Charter or Bylaws (or comparable documents) of GLC, or any statute,
law, regulation, order or decree applicable to GLC, or any contract, commitment,
agreement, arrangement or restriction of any kind to which GLC is a party or by
which GLC is bound, other than such violations as would not prevent or
materially delay the performance by GLC of its obligations hereunder or
otherwise subject OPS to any claim or liability.
Section 1.4. Representations and Warranties of OPS. OPS hereby
represents and warrants to LLC and GLC as follows:
(a) OPS is a corporation duly organized, validly existing and in
good standing under the laws of the Commonwealth of Virginia.
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<PAGE>
(b) OPS has full legal right, power and authority to enter into
and perform this Agreement, and the execution and delivery of this Agreement by
OPS have been duly authorized by all necessary corporate action on behalf of
OPS. This Agreement is enforceable against OPS.
(c) The execution, delivery and performance of this Agreement by
OPS does not and will not conflict with or constitute a violation of or default
under the Charter or Bylaws of OPS, or any statute, law, regulation, order or
decree applicable to OPS, or any contract, commitment, agreement, arrangement or
restriction of any kind to which OPS is a party or by which OPS is bound, other
than such violations as would not prevent or materially delay the performance by
OPS of its obligations hereunder or otherwise subject LLC to any claim or
liability.
ARTICLE II
Board Representation
Section 2.1. Election of LLC Directors. On the date of this
Agreement, OPS will (i) take such action as may be necessary to increase the
size of the OPS Board of Directors (the "Board of Directors") to ten (10)
directors, and (ii) upon receipt from each LLC Director of an executed letter
agreement regarding resignation in the form attached to this Agreement as
Exhibit A, fill the two (2) vacancies created thereby with the LLC Directors in
accordance with the applicable provisions of the Charter and Bylaws of OPS. OPS
will appoint each LLC Director to Class I (current term expiring in 2001) and
agrees to nominate and recommend each LLC Director not subject to resignation
pursuant to Section 2.3 below for election at the next annual meeting of OPS's
shareholders following such appointments as Class I directors; provided that, if
any such LLC Director is not elected by the shareholders of OPS, OPS shall have
no further obligations under this Section 2.1; and provided further that OPS
shall be under no obligation to appoint or recommend for election any LLC
Director to the Board of Directors unless and until it has received from such
LLC Director an executed letter agreement regarding resignation in the form
attached to this Agreement as Exhibit A.
Section 2.2. Continuing Board Representation. Until the
termination or expiration of the Consulting Agreement, OPS agrees that it will
not take or recommend to its shareholders any action that would (i) cause the
Board of Directors to consist of greater than ten (10) directors; provided that
if a LLC Director resigns from the Board of Directors, OPS shall have the right
to reduce the size of the Board of Directors to eliminate the vacancy or to fill
the vacancy thereby created with a nominee approved by the Continuing Directors,
or (ii) result in any amendment to the Bylaws of OPS in effect on the date
hereof that would impose any qualifications on the eligibility of directors of
OPS to serve on any committee of the Board of Directors, except as may be
required by the then-current rules and regulations of the Nasdaq National Market
(the "Nasdaq Rules"), the rules and regulations under the Internal Revenue Code
of 1986, as amended, relating to the qualification of employee stock benefit
plans and the deductibility of compensation paid to executive officers, the
rules and regulations under Section 16(b) of the Exchange Act, including Rule
16b-3 thereunder or any successor rule, and OPS's Bylaws.
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Section 2.3. Required Resignations.
(a) Upon the earlier of the Hobey Termination and the expiration
of the Consulting Agreement, LLC shall, if requested by OPS, require Hobey to
resign immediately from the Board of Directors.
(b) In the event that the Hobey Termination occurs on or before
December 17, 1998, LLC shall, if requested by OPS, require Settle to resign
immediately from the Board of Directors.
(c) If LLC does not cause the resignation of a LLC Director as
required by this Section 2.3, OPS may seek such resignation or, in the
alternative, the Continuing Directors may seek the removal of the LLC Directors
that are subject to such resignation. Upon any shareholder vote relating to the
removal of a LLC Director for failure to resign pursuant to this Section 2.3,
LLC and its Affiliates shall (i) attend any meeting either in person or by proxy
and (ii) vote in favor of such removal. At such time as a LLC Director becomes
subject to resignation pursuant to this Section 2.3, OPS may amend its Bylaws or
take such other action as it deems appropriate to reduce the number of directors
constituting the Board of Directors proportionately or fill the vacancy caused
by such resignation with its own nominee in accordance with the applicable
provisions of the Charter and Bylaws of OPS.
Section 2.4. Charter and Bylaws. The obligations of OPS set
forth in this Article II shall be subject to compliance with the applicable
provisions of the Charter and Bylaws of OPS.
Section 2.5. No Voting Trust. This Agreement does not create or
constitute, and shall not be construed as creating or constituting, a voting
trust agreement under the Virginia Stock Corporation Act or any other applicable
corporation law.
Section 2.6. No Duty to Serve; Reduction of Board Representation.
Nothing contained in this Article II shall be construed as requiring any LLC
Director to serve in office if such LLC Director elects to resign. In the event
of any vacancy created by the death, resignation or removal of a LLC Director,
OPS may amend its Bylaws or take such other action as it deems appropriate to
reduce the number of directors constituting the Board of Directors
proportionately or fill the vacancy caused by such resignation with its own
nominee in accordance with the applicable provisions of the Charter and Bylaws
of OPS.
ARTICLE III
Standstill Restrictions; Voting Matters
Section 3.1. Standstill Restrictions.
(a) During the term of this Agreement, unless approved in advance
by a resolution adopted by a majority of the Continuing Directors or otherwise
permitted under this Agreement,
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LLC and GLC covenant and agree that they shall not, and shall not permit any of
their Affiliates to, either individually or as part of a Group, directly or
indirectly:
(i) acquire (other than acquisitions (x) pursuant to or
contemplated by the Consulting Agreement, including without limitation the
exercise of options under the Stock Option Agreement, or (y) resulting from
corporate action taken by the Board of Directors with respect to any pro rata
distribution of shares of Common Stock in connection with any stock split, stock
dividend, recapitalization, reclassification or similar transaction), propose to
acquire (or publicly announce or otherwise disclose an intention to propose to
acquire), offer to acquire, or agree to acquire any Common Stock if the effect
of such acquisition would cause the LLC Ownership Percentage to exceed the
Standstill Percentage (other than as a result of any stock purchases or
repurchases by OPS); provided that this Section 3.1(a)(i) shall not apply to any
acquisition (a) of options, Common Stock, warrants, rights or other securities
convertible or exchangeable into Common Stock granted to any person, including
without limitation the LLC Directors, pursuant to any benefit plan of OPS or any
of its Affiliates or the exercise of any such option, warrant or right or
conversion or exchange of any convertible or exchangeable security or (b) upon
the exercise by LLC or its Affiliates of rights pursuant to any Rights Agreement
that may be adopted by OPS, provided that all of the shares of Common Stock so
acquired upon the exercise of the rights shall be subject to all of the terms of
this Agreement;
(ii) propose (or publicly announce or otherwise disclose
an intention to propose), solicit, offer, seek to effect, negotiate with or
provide any confidential information relating to OPS or its business to any
other Person with respect to, any tender or exchange offer, merger,
consolidation, share exchange, business combination, restructuring,
recapitalization or similar transaction involving OPS;
(iii) make, or in any way participate in, any
"solicitation" of "proxies" to vote (as such terms are defined in Rule 14a-1
under the Exchange Act), solicit any consent or communicate with or seek to
advise or influence any person or entity with respect to the voting of any
Common Stock or become a "participant" in any "election contest" (as such terms
are defined or used in Rule 14a-11 under the Exchange Act) with respect to OPS;
provided that nothing in this Section 3.1(a)(iii) shall apply to any deemed
solicitation of proxies by the LLC Directors that may result from such LLC
Directors' position or status as a director of OPS at the time of any general
solicitation of proxies by the management of OPS;
(iv) form, participate in or join any Person or Group
(other than a Group comprised of the six members of LLC and its Affiliates as of
the date of this Agreement) with respect to any Common Stock, or otherwise act
in concert with any third Person for the purpose of (x) acquiring any Common
Stock or (y) holding or disposing of Common Stock for any purpose prohibited by
this Section 3.1(a);
(v) deposit any Common Stock into a voting trust or
subject any Common Stock to any arrangement or agreement with respect to the
voting thereof;
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(vi) initiate, propose or otherwise solicit shareholders
for the approval of any shareholder proposal with respect to OPS as described in
Rule 14a-8 under the Exchange Act, or induce or attempt to induce any other
Person to initiate, propose or otherwise solicit any such shareholder proposal;
(vii) except as specifically provided in Article II of this
Agreement, seek election to or seek to place a representative on the Board of
Directors, or seek the removal of any member of the Board of Directors (other
than a LLC Director);
(viii) call or seek to have called any meeting of the
shareholders of OPS for any purpose;
(ix) except through the LLC Directors, take any other
action to seek to control, disrupt or influence the management or policies of
OPS;
(x) agree to do any of the foregoing.
(b) LLC and GLC agree that they will notify OPS promptly if any
inquiries or proposals are received by, any information is exchanged with
respect to, or any negotiations or discussions are initiated or continued by or
with, LLC, GLC or any of their Affiliates regarding any matter described in
Section 3.1(a) above. LLC and OPS shall mutually agree upon an appropriate
response to be made to any such proposals received by LLC, GLC or any of their
Affiliates.
(c) Nothing contained in this Article III shall be deemed to
restrict the manner in which the LLC Directors may participate in deliberations
or discussions of the Board of Directors or individual consultations with the
Chairman of the Board or any other members of the Board of Directors or the
manner in which the LLC Directors may vote on matters brought for consideration
before the Board of Directors, so long as such actions do not otherwise violate
any provision of Section 3.1(a) above.
(d) With respect to any acquisition of, proposal to acquire, offer
to acquire, or agreement to acquire any Common Stock by LLC and its Affiliates
not otherwise prohibited by Section 3.1(a) above, OPS and LLC agree to take such
actions as may be deemed necessary or advisable (including without limitation
the acquisition of Common Stock directly from OPS) consistent with the prudent
discharge of their fiduciary duties to their shareholders and members,
respectively, so that the provisions of the Control Shares Acquisition Statute,
as set forth in Article 14.1 of the Virginia Stock Corporation Act, as amended,
in effect on the date of this Agreement, shall not apply to such acquisition,
proposal, offer or agreement.
Section 3.2. Voting Matters.
(a) During the term of this Agreement, LLC and GLC will take all
such action as may be required so that the Common Stock beneficially owned and
entitled to be voted by LLC, GLC and their Affiliates, as a Group, are voted or
caused to be voted (in person or by proxy):
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(i) with respect to the Continuing Director's nominees to
the Board of Directors, in accordance with the recommendation of the Board of
Directors, or a nominating or similar committee of the Board of Directors, if
any such committee exists and makes a recommendation;
(ii) with respect to any "election contest" (as such term
is defined or used in Rule 14a-11 under the Exchange Act as in effect on the
date of this Agreement) initiated by any Person in connection with any tender
offer, in the same proportion as the total votes cast by or on behalf of all
shareholders of OPS (other than LLC, GLC and their Affiliates) with respect to
such proxy contest;
(iii) with respect to all matters brought before OPS's
shareholders for a vote not otherwise provided for in this Section 3.2(a) or
Section 2.3 above, in accordance with the independent judgment of LLC, GLC and
their Affiliates, without regard to any request or recommendation of the Board
of Directors.
(b) LLC and its Affiliates who beneficially own any of the LLC
Shares shall be present, in person or by proxy, at all duly held meetings of
shareholders of OPS so that the Common Stock held by LLC and its Affiliates may
be counted for the purposes of determining the presence of a quorum at such
meetings.
ARTICLE IV
Transfers of LLC Shares
Section 4.1 Permitted Transfers. During the term of this
Agreement, LLC shall not, directly or indirectly, Transfer any of the LLC Shares
to any Person or Group without the prior written consent of OPS (which consent
shall not be unreasonably withheld), if, as a result of such Transfer, such
Person or Group would have beneficial ownership of Common Stock representing in
the aggregate more than 9.9% of the issued and outstanding shares of Common
Stock. Subject to the foregoing limitation, LLC may Transfer the LLC Shares
without the prior written consent of OPS in the following manner:
(a) to OPS or any Affiliate of OPS;
(b) pursuant to an effective registration statement under the
Securities Act as provided in the Registration Rights Agreement; provided that
the rights of LLC under this Agreement shall not transfer to any transferee(s)
of such LLC Shares;
(c) pursuant to Rule 144, Rule 144A, Regulation S or any other
applicable exemption from registration under the Securities Act; provided that
the rights of LLC under this Agreement shall not transfer to any transferee(s)
of such LLC Shares;
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(d) pursuant to a distribution (including any such distribution
pursuant to any liquidation or dissolution of LLC) by LLC to its members;
provided that the rights of LLC under this Agreement shall not transfer to any
distributee of such LLC Shares; provided further that, LLC shall not distribute
any of the LLC Shares to its members pursuant to this Section 4.2(d) or
otherwise unless LLC has obtained an agreement in writing by the distributee to
be bound by the terms and conditions of this Agreement;
(e) pursuant to a merger or consolidation of OPS or pursuant to a
plan of liquidation of OPS, which has been approved by the affirmative vote of a
majority of the members of the Board of Directors then in office; or
(f) pursuant to a tender offer or exchange offer that the Board of
Directors, by action taken by the affirmative vote of a majority of the members
of the Board of Directors then in office, has determined not to oppose.
Section 4.2 Transfers to Affiliates. In the event that any
Affiliate of LLC receives a distribution of any of the LLC Shares under Section
4.1 above, or otherwise becomes the beneficial owner of any of the LLC Shares,
LLC shall use its best efforts to cause such Affiliate to comply with all of the
provisions of this Agreement, including without limitation this Article IV.
Section 4.3 Confidential Information. In connection with any
permitted Transfer of the LLC Shares pursuant to this Article IV, neither LLC
nor its Affiliates shall disclose any confidential information relating to OPS
or its business to any Person except as required by applicable law, including
without limitation Section 10(b) of the Exchange Act and Rule 10b-5 thereunder,
but only to the extent that any required disclosure of such confidential
information has been preceded by notice to OPS of the expected disclosure of
such information and the execution of a confidentiality agreement by LLC (or its
Affiliates, as the case may be) and such Person in the form attached hereto as
Exhibit B. Such confidentiality agreement shall be promptly forwarded to OPS for
its execution, which execution by OPS may be subsequent to the disclosure
described in this proviso; provided that the failure of OPS to so execute such
confidentiality agreement shall in no way be construed to be a failure on the
part of LLC (or its Affiliates, as the case may be) to fulfill its obligations
under this paragraph or to limit or affect the validity of such confidentiality
agreement as between LLC (or its Affiliates, as the case may be) and such
Person.
ARTICLE V
Further Assurances
Each party shall execute and deliver such additional instruments and
other documents and shall take such further actions as may be necessary or
appropriate to effectuate, carry out and comply with all of its respective
obligations under this Agreement. If reasonably requested by OPS at any time
during the term of this Agreement, LLC agrees to execute a letter to OPS
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confirming the number of LLC Shares held, beneficially and of record, by LLC and
its Affiliates as of the latest practicable date.
ARTICLE VI
Termination
Unless earlier terminated by written agreement of the parties hereto,
this Agreement shall terminate five (5) years from the date of this Agreement.
Any termination of this Agreement as provided herein shall be without prejudice
to the rights of any party arising out of the breach by any other party of any
provisions of this Agreement that occurred prior to the termination.
ARTICLE VII
Miscellaneous
Section 7.1. Notices. Any notices or other communications
required or permitted hereunder shall be sufficiently given if in writing
(including telecopy or similar teletransmission), addressed as follows:
If to OPS,
to it at: Open Plan Systems, Inc.
4299 Carolina Avenue
Building C
Richmond, Virginia 23222
Telecopier: (804) 228-5656
Attention: Anthony F. Markel
With a copy to: Williams Mullen Christian & Dobbins
1021 East Cary Street, 16th Floor
Richmond, Virginia 23219
Telecopier: (804) 783-6507
Attention: Theodore L. Chandler, Jr., Esquire
If to LLC,
to it at: Great Lakes Capital, LLC
310 South Street
Morristown, New Jersey 07960
Telecopier: (973) 539-7909
Attention: W. Sydnor Settle
With a copy to: Dykema Gossett PLLC
400 Renaissance Center
Detroit, Michigan 48243-1668
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Telecopier: (313) 568-6915
Attention: Fredrick M. Miller, Esquire
If to GLC,
to it at: Great Lakes Capital, Inc.
310 South Street
Morristown, New Jersey 07960
Telecopier: (973) 539-7909
Attention: W. Sydnor Settle
With a copy to: Dykema Gossett PLLC
400 Renaissance Center
Detroit, Michigan 48243-1668
Telecopier: (313) 568-6915
Attention: Fredrick M. Miller, Esquire
Unless otherwise specified herein, such notices or other communications shall be
deemed received (a) in the case of any notice or communication sent other than
by mail, on the date actually delivered to such address (evidenced, in the case
of delivery by overnight courier, by confirmation of delivery from the overnight
courier service making such delivery, and in the case of a telecopy, by receipt
of a transmission confirmation form or the addressee's confirmation of receipt),
or (b) in the case of any notice or communication sent by mail, three business
days after being sent, if sent by registered or certified mail, with first-class
postage prepaid. Each of the parties hereto shall be entitled to specify a
different address by giving notice as aforesaid to each of the other parties
hereto.
Section 7.2. Amendments. This Agreement may not be amended,
changed, supplemented, waived or otherwise modified or terminated except by an
instrument in writing signed by LLC, GLC and OPS.
Section 7.3. Successors and Assigns. Except as otherwise provided
herein, this Agreement shall be binding upon and shall inure to the benefit of
and be enforceable by the parties and their respective successors and assigns,
including without limitation in the case of any corporate party hereto any
corporate successor by merger or otherwise; provided that no party may assign
this Agreement without the other party's prior written consent.
Section 7.4. Entire Agreement. This Agreement embodies the entire
agreement and understanding among the parties relating to the subject matter
hereof and supersedes all prior agreements and understandings relating to such
subject matter. There are no representations, warranties or covenants by the
parties hereto relating to such subject matter other than those expressly set
forth in this Agreement, the Consulting Agreement, the Registration Rights
Agreement and the Stock Option Agreement.
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Section 7.5. Specific Performance. The parties acknowledge that
money damages are not an adequate remedy for violations of this Agreement and
that any party may, in its sole discretion, apply to a court of competent
jurisdiction for specific performance or injunctive or such other relief as such
court may deem just and proper in order to enforce this Agreement or prevent any
violation hereof and, to the extent permitted by applicable law, each party
waives any objection to the imposition of such relief.
Section 7.6. Remedies Cumulative. All rights, powers and remedies
provided under this Agreement or otherwise available in respect hereof at law or
in equity shall be cumulative and not alternative, and the exercise or beginning
of the exercise of any thereof by any party shall not preclude the simultaneous
or later exercise of any other such right, power or remedy by such party.
Section 7.7. No Waiver. The failure of any party hereto to
exercise any right, power or remedy provided under this Agreement or otherwise
available in respect hereof at law or in equity, or to insist upon compliance by
any other party hereto with its obligations hereunder, and any custom or
practice of the parties at variance with the terms hereof, shall not constitute
a waiver by such party of its right to exercise any such or other right, power
or remedy or to demand such compliance.
Section 7.8. No Third Party Beneficiaries. This Agreement is not
intended to be for the benefit of and shall not be enforceable by any Person who
or which is not a party hereto.
Section 7.9. Consent to Jurisdiction. Each party to this
Agreement, by its execution hereof, (i) hereby irrevocably submits, and agrees
to cause each of its Affiliates to submit, to the jurisdiction of the federal
courts located in the City of Richmond, Virginia, and in the event that such
federal courts shall not have subject matter jurisdiction over the relevant
proceeding, then of the state courts located in the City of Richmond, Virginia,
for the purpose of any action arising out of or based upon this Agreement or
relating to the subject matter hereof or the transactions contemplated hereby,
(ii) hereby waives, and agrees to cause each of its Affiliates to waive, to the
extent not prohibited by applicable law, and agrees not to assert, and agrees
not to allow any of its Affiliates to assert, by way of motion, as a defense or
otherwise, in any such action, any claim that it is not subject personally to
the jurisdiction of the above-named courts, that its property is exempt or
immune from attachment or execution, that any such proceeding brought in one of
the above-named courts is improper, or that this Agreement or the subject matter
hereof may not be enforced in or by such court and (iii) hereby agrees not to
commence or to permit any of its Affiliates to commence any action arising out
of or based upon this Agreement or relating to the subject matter hereof other
than before one of the above-named courts nor to make any motion or take any
other action seeking or intending to cause the transfer or removal of any such
action to any court other than one of the above-named courts whether on the
grounds of inconvenient forum or otherwise. Each party hereby consents to
service of process in any such proceeding in any manner permitted by Virginia
law, as the case may be, and agrees that service of process by registered or
certified mail, return receipt requested, at its address specified pursuant to
Section 7.1 above is reasonably calculated to give actual notice.
Notwithstanding anything contained in this Section 7.9 to the contrary with
respect to the parties' forum selection,
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if an action is filed against a party to this Agreement, including its
Affiliates, by a person who or which is not a party to this Agreement, an
Affiliate of a party to this Agreement, or an assignee thereof (a "Third Party
Action"), in a forum other than the federal district court or a state court
located in the City of Richmond, Virginia, and such Third Party Action is based
upon, arises from, or implicates rights, obligations or liabilities existing
under this Agreement or acts or omissions pursuant to this Agreement, then the
party to this Agreement, including its Affiliates, joined as a defendant in such
Third Party Action shall have the right to file cross-claims or third-party
claims in the Third Party Action against the other party to this Agreement,
including its Affiliates, and even if not a defendant therein, to intervene in
such Third Party Action with or without also filing cross-claims or third-party
claims against the other party to this Agreement, including its Affiliates.
Section 7.10. Governing Law. This Agreement shall be governed by
and construed in accordance with the domestic substantive law of the
Commonwealth of Virginia, without giving effect to any choice or conflict of law
provision or rule that would cause the application of the law of any other
jurisdiction.
Section 7.11. Name, Captions. The name assigned to this Agreement
and the section captions used herein are for convenience of reference only and
shall not affect the interpretation or construction hereof.
Section 7.12. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one instrument. Each counterpart may consist
of a number of copies each signed by less than all, but together signed by all,
the parties hereto.
Section 7.13. Expenses. Each of the parties hereto shall bear their
own expenses incurred in connection with this Agreement and the transactions
contemplated hereby, except that in the event of a dispute concerning the terms
or enforcement of this Agreement, the prevailing party in any such dispute shall
be entitled to reimbursement of reasonable legal fees and disbursements from the
other party or parties to such dispute.
[SIGNATURES ON NEXT PAGE]
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IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have caused this Voting and Standstill Agreement to be executed, as of
the date first above written, by their respective officers thereunto duly
authorized.
OPEN PLAN SYSTEMS, INC.
By: /s/ Anthony F. Markel
------------------------------------
Anthony F. Markel
Chairman of the Board
GREAT LAKES CAPITAL, LLC
By: /s/ W. Sydnor Settle
------------------------------------
W. Sydnor Settle
Manager
GREAT LAKES CAPITAL, INC.
By: /s/ W. Sydnor Settle
------------------------------------
W. Sydnor Settle
Chairman
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Exhibit A
Form of Resignation Agreement
Open Plan Systems, Inc.
4299 Carolina Avenue
Building C
Richmond, Virginia 23222
Great Lakes Capital, LLC
310 South Street
Morristown, New Jersey 07960
Ladies and Gentlemen:
I hereby acknowledge that my position on the Board of Directors of Open
Plan Systems, Inc. ("OPS") is subject to the provisions of a Voting and
Standstill Agreement (the "Agreement"), dated June 17, 1998, between OPS, Great
Lakes Capital, LLC ("LLC") and Great Lakes Capital, Inc. Accordingly, I hereby
agree to resign immediately from such Board of Directors under the terms of
Article II of the Agreement in the event that LLC requests such resignation. I
understand that, if I do not resign immediately as requested pursuant to such
Article II, OPS may seek specific performance of this letter agreement through
court proceedings or otherwise may seek to remove me from office. I agree that
any failure to resign upon request pursuant to such Article II shall be deemed
to be "cause" for my removal from the Board of Directors pursuant to the Charter
and Bylaws of OPS.
Date: June ___, 1998
____________________________________
Name
Agreed to and Accepted:
Open Plan Systems, Inc.
By:___________________________
Anthony F. Markel
Chairman of the Board
<PAGE>
Exhibit B
Form of Confidentiality Agreement
________ __, 19__
CONFIDENTIAL
[Name]
[Address]
Re: Confidentiality Agreement
Ladies and Gentlemen:
In connection with the proposed sale or transfer of shares of the
Common Stock, without par value, of Open Plan Systems, Inc. (the "Company"), we
are prepared to make available to you certain confidential information relating
to the Company and its business (the "Confidential Information"). As a condition
to your being furnished the Confidential Information, you agree to comply with
the terms and conditions of this letter agreement (this "Agreement").
For the purposes of this Agreement, the term "Representatives" shall
mean your employees, agents and advisors and the directors, officers, employees
and agents of any of your advisors. The term "Third Party" shall be broadly
interpreted to include without limitation any corporation, company, group,
partnership, other entity or individual. The term "Confidential Information"
shall not include information that (i) was or becomes generally available to the
public other than as a result of a disclosure by you or your Representatives, or
(ii) was or becomes available to you on a non-confidential basis from a source
other than the Company or its advisors.
You hereby agree to treat the Confidential Information as confidential
and you shall not, and shall direct your Representatives not to, use in any way
or to disclose, directly or indirectly, the Confidential Information to any
Third Party without the written consent of the Company.
It is understood and agreed that money damages would not be a
sufficient remedy for any breach of this Agreement by you and that the Company
shall be entitled to specific performance and injunctive or other equitable
relief as a remedy for any such breach, and you further agree to waive any
requirement for the securing or posting of any bond in connection with such
remedy. Such remedy shall not be deemed to be the exclusive remedy for your
breach of this Agreement, but shall be in addition to all other remedies
available at law or equity to the Company.
<PAGE>
If you are in agreement with the foregoing, please so indicate by
signing and returning one copy of this Agreement, whereupon it will constitute
our agreement with respect to the subject matter hereof.
Very truly yours,
[Name]
Officer of [LLC or Affiliate]
CONFIRMED AND AGREED as of
the date first written
above:
[NAME]
By:_________________________________
Name:
Title:
OPEN PLAN SYSTEMS, INC.
By:_________________________________
Name:
Title:
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Exhibit D
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of June
17, 1998, is made between OPEN PLAN SYSTEMS, INC., a Virginia corporation
("OPS"), and GREAT LAKES CAPITAL, LLC, a Delaware limited liability company
("LLC").
W I T N E S S E T H:
WHEREAS, OPS and LLC have entered into a Management and Consulting
Agreement, dated as of June 17, 1998 (the "Consulting Agreement"), under which
LLC agreed to provide certain management and consulting services to OPS; and
WHEREAS, in consideration for such management and consulting services
to be provided by LLC under the Consulting Agreement, OPS has entered into a
Nonqualified Stock Option Agreement with LLC, dated as of June 17, 1998 (the
"Stock Option Agreement"), for the purchase by LLC of up to 600,000 shares (the
"Option Shares") of the Common Stock, without par value, of OPS (the "Common
Stock"); and
WHEREAS, in connection with the execution of the Consulting Agreement,
OPS has issued 200,000 shares of Common Stock to LLC upon payment of the
purchase price therefor as stated in the Consulting Agreement (the "Common
Shares"); and
WHEREAS, OPS has agreed to enter into this Agreement to provide certain
registration rights to LLC in order to facilitate the resale of the Option
Shares, the Common Shares and certain additional shares of Common Stock that LLC
and its Affiliates may acquire following the date of the Consulting Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and in the Consulting Agreement, OPS and LLC hereby agree as
follows:
ARTICLE I
Definitions
For purposes of this Agreement, the following terms have the following
meanings:
(a) "Additional Shares" shall mean shares of Common Stock that LLC
and its Affiliates may acquire following the date of the Consulting Agreement on
the open market, in privately negotiated transactions and/or directly from OPS
so that LLC and its Affiliates would beneficially own no greater than 21.0% of
the issued and outstanding shares of Common Stock on a fully diluted basis;
provided that shares of Common Stock that LLC and its Affiliates may acquire
pursuant to OPS's 1996 Stock Incentive Plan and 1996 Stock Option Plan for
Non-Employee Directors shall not be deemed to be Additional Shares.
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(b) "Affiliate" shall have the meaning ascribed to such term in
Rule 12b-2 under the Exchange Act as in effect on the date of this Agreement.
(c) "Blue Sky Filing" shall mean a filing made in connection with
the registration or qualification of the LLC Shares under a particular state's
securities or blue sky laws.
(d) "Common Shares" shall have the meaning set forth in the
recitals to this Agreement.
(e) "Common Stock" shall have the meaning set forth in the
recitals to this Agreement.
(f) "Consulting Agreement" shall have the meaning set forth in the
recitals to this Agreement.
(g) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
(h) "LLC Shares" shall mean collectively (i) the Common Shares,
(ii) the Option Shares, (iii) the Additional Shares and (iv) such additional
shares of Common Stock that OPS may issue with respect to such shares pursuant
to any stock splits, stock dividends, recapitalizations, restructurings,
reclassifications or similar transactions.
(i) "Nasdaq National Market" shall mean the National Market System
of The Nasdaq Stock Market, Inc.
(j) "Option Shares" shall have the meaning set forth in the
recitals to this Agreement.
(k) "Person" shall have the meaning ascribed to such term in
Section 3(a)(9) of the Exchange Act as in effect on the date of this Agreement.
(l) "Prospectus" shall mean the prospectus included in the
Registration Statement (including a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A under the Securities Act), as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the LLC Shares covered by such Registration
Statement, and all other amendments and supplements to such prospectus,
including post-effective amendments, and all material incorporated by reference
or deemed to be incorporated by reference in any such prospectus.
(m) "Registration Expenses" shall mean any and all out-of-pocket
expenses incident to OPS's performance of or compliance with this Agreement,
including, without limitation, (i) all registration and filing fees with the SEC
and the National Association of Securities Dealers, Inc., (ii) all fees and
expenses of complying with state securities or blue sky laws, (iii) all
printing, messenger and delivery expenses, (iv) all fees and expenses incurred
in connection with the listing of the LLC Shares on the Nasdaq National Market,
or any other exchange or automated
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interdealer quotation system as then applicable, (v) the fees and disbursements
of OPS's counsel and of its independent public accountants, and (vi) the fees
and expenses of any special experts retained by OPS in connection with the
requested registration; provided that such expenses shall not include (x) any
fees or disbursements of counsel to LLC or any underwriter and (y) any brokerage
commissions and fees, underwriting discounts and commissions, transfer taxes and
documentary stamp taxes, if any, relating to the sale or disposition of the LLC
Shares.
(n) "Registration Statement" shall mean the registration statement
of OPS under the Securities Act that covers the resale of the LLC Shares
pursuant to the terms of this Agreement, including the related Prospectus, all
amendments and supplements to such registration statement, including pre- and
post-effective amendments, all exhibits thereto and all material incorporated by
reference or deemed to be incorporated by reference in any such registration
statement.
(o) "SEC" shall mean the Securities and Exchange Commission.
(p) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(q) "Stock Option Agreement" shall have the meaning set forth in
the recitals to this Agreement.
ARTICLE II
Registration of Securities
Section 2.1. Securities Subject to this Agreement. The securities
entitled to the benefits of this Agreement are the LLC Shares. For the purposes
of this Agreement, one or more of the LLC Shares will no longer be subject to
this Agreement when and to the extent that (i) a Registration Statement covering
such LLC Shares has been declared effective under the Securities Act and such
LLC Shares have been sold pursuant to such effective Registration Statement,
(ii) such LLC Shares are distributed to the public pursuant to Rule 144 under
the Securities Act, (iii) such LLC Shares shall have been otherwise transferred
or disposed of, new certificates therefor not bearing a legend restricting
further transfer or disposition shall have been delivered by OPS and, at such
time, subsequent transfer or disposition of such securities shall not require
registration or qualification of such LLC Shares under the Securities Act or any
similar state law then in force, or (iv) such LLC Shares have ceased to be
outstanding.
Section 2.2. Registration Requirements.
(a) Following the expiration or termination of the Consulting
Agreement, LLC shall be entitled to request that OPS effect the registration of
the LLC Shares in accordance with this Section 2.2. Such request shall be made
prior to the date that is five years after the date of this Agreement and shall
be in writing to OPS at the address and in the manner determined in accordance
with Section 5.1 hereof. Such written request shall set forth the names and
addresses of LLC and any Affiliate of LLC that owns, either beneficially or of
record, any LLC Shares and the amount of LLC Shares to be sold by such holder.
The demand registration rights granted
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pursuant to this Section 2.2 may be exercised only by LLC on behalf of LLC and
its Affiliates, and OPS shall not be required to effect more than one
registration of the LLC Shares.
(b) If all of the terms and conditions relating to the demand
registration have been met by LLC and its Affiliates, including, but not limited
to, the affirmative obligation of LLC and its Affiliates pursuant to Section 2.4
hereof to provide correct and complete information regarding LLC and its
Affiliates, OPS agrees that it will use its best efforts to effect the
registration of the number of LLC Shares set forth in the written request from
LLC. Such registration shall be filed with the SEC as soon as practicable, but
not later than ninety (90) days after the receipt by OPS of the written request
under Section 2.2(a) above. In addition, OPS shall, as soon as practicable, list
on the Nasdaq National Market the Common Shares and reserve for listing, on a
when issued basis, the Option Shares issuable upon exercise of the options set
forth in the Stock Option Agreement.
(c) OPS shall use its best efforts to maintain the effectiveness
of the registration relating to the LLC Shares, and to maintain the listing of
such LLC Shares on the Nasdaq National Market or any exchange or automated
interdealer quotation system on which the Common Stock is then listed or quoted,
for the period from the effective date of the Registration Statement relating to
such LLC Shares to the date that is the earlier of (i) two years after the date
by which LLC has exercised all options set forth in the Stock Option Agreement
and (ii) seven years after the date of this Agreement.
Section 2.3 Piggy-Back Registration Rights.
(a) In the event that, prior to the expiration or termination of
the Consulting Agreement, OPS shall propose to file a registration statement
under the Securities Act relating to a public offering by or through one or more
underwriters of Common Stock for OPS's own account (other than pursuant to a
registration statement on Form S-4 or Form S-8 or any successor forms, or filed
in connection with an exchange offer or an offering of Common Stock solely to
existing shareholders or employees of OPS) and on a form and in a manner that
would permit the registration of the LLC Shares for sale to the public under the
Securities Act, OPS shall (i) give written notice to LLC of its intention to do
so and of the right of LLC and its Affiliates to have any or all of the LLC
Shares then held by LLC and its Affiliates included among the securities to be
covered by such registration statement and (ii) at the written request of LLC
given to OPS within 20 days after OPS provides such notice, use its best efforts
to include among the securities covered by such registration statement the
number of such LLC Shares that LLC and its Affiliates shall have requested be so
included (subject, however, to reduction in accordance with Section 2.3(b)
below).
(b) If the lead managing underwriter selected by OPS for an
underwritten offering pursuant to Section 2.3(a) above determines that marketing
factors require a limitation on the number of LLC Shares to be offered and sold
by LLC and its Affiliates in such offering, there shall be included in such
offering only that number of LLC Shares, if any, that such lead managing
underwriter reasonably and in good faith believes will not jeopardize the
success of the offering of all shares of Common Stock that OPS desires to sell
for its own account. In such
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event and provided that the lead managing underwriter has so notified OPS in
writing, the shares of Common Stock to be included in such offering shall
consist of (i) the securities that OPS proposes to sell, and (ii) the number, if
any, of LLC Shares requested to be included in such registration that, in the
opinion of such lead managing underwriter, can be sold without jeopardizing the
success of the offering of the shares of Common Stock that OPS desires to sell
for its own account.
(c) Nothing in this Section 2.3 shall create any liability on the
part of OPS to LLC if OPS for any reason should decide not to file a
registration statement proposed to be filed under Section 2.3(a) above or to
withdraw such registration statement subsequent to its filing, regardless of any
action whatsoever that LLC may have taken, whether as a result of the issuance
by OPS of any notice hereunder or otherwise.
(d) If any LLC Shares are to be included in any underwritten
offering pursuant to Section 2.3(a) above, LLC shall be a party to the
underwriting agreement between OPS and such underwriters, and LLC agrees to
comply with the terms and conditions that may be imposed on such offering by the
underwriters.
Section 2.4. Registration Procedures. In order to comply with the
requirements of Section 2.2 above, OPS will:
(a) prepare and file with the SEC a Registration Statement
covering the LLC Shares on any SEC form or forms for which OPS then qualifies
and that counsel for OPS shall deem appropriate, and which form shall be
available for the sale of the LLC Shares in accordance with the intended methods
of distribution thereof;
(b) prepare and file with the SEC pre- and post-effective
amendments to the Registration Statement and such amendments and supplements to
the Prospectus used in connection therewith as may be necessary to maintain the
effectiveness of such registration, or as may be required by the rules,
regulations or instructions applicable to the registration form utilized by OPS,
or by the Securities Act or the rules and regulations thereunder, necessary to
keep such Registration Statement effective, and cause the Prospectus as so
supplemented to be filed pursuant to Rule 424 under the Securities Act, and
otherwise comply with the provisions of the Securities Act with respect to the
disposition of the LLC Shares;
(c) furnish to LLC (or any Affiliate of LLC that owns, either
beneficially or of record, any LLC Shares), and the underwriters if any, such
number of copies of the Registration Statement and each pre- and post-effective
amendment thereto, any Prospectus or Prospectus supplement and each amendment
thereto and such other documents as LLC (or any Affiliate of LLC that owns,
either beneficially or of record, any LLC Shares), and the underwriters if any,
may reasonably request in order to facilitate the transfer or disposition of the
LLC Shares by LLC (or any Affiliate of LLC that owns, either beneficially or of
record, any LLC Shares);
(d) make such Blue Sky Filings to register or qualify the LLC
Shares under such state securities or blue sky laws of such jurisdictions as LLC
(or any Affiliate of LLC that owns, either
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beneficially or of record, any LLC Shares), and the underwriters if any, may
reasonably request, and do any and all other acts that may be reasonably
necessary or advisable to enable LLC to consummate the transfer or disposition
in such jurisdictions of the LLC Shares, except that OPS shall not for any such
purpose be required (i) to qualify generally to do business as a foreign
corporation in any jurisdiction where, but for the requirements of this Section
2.4(d), it would not be obligated to be so qualified, (ii) to subject itself to
taxation in any such jurisdiction, or (iii) to consent to general service of
process in any such jurisdiction;
(e) notify LLC, and the underwriters if any, at any time when a
Prospectus is required to be delivered under the Securities Act while the LLC
Shares are subject to this Agreement, of OPS's becoming aware that a Prospectus
included in a 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 the light of the circumstances under
which they were made, not misleading, and prepare and furnish to LLC, and the
underwriters if any, a reasonable number of copies of an amendment to such
Prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such LLC 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 the light of the circumstances under which
they were made, not misleading;
(f) promptly notify LLC, and the underwriters if any,
(1) when any Prospectus or Prospectus supplement or pre-
or post-effective amendment has been filed, and, with respect to the
Registration Statement or post-effective amendment, when such Registration
Statement or post-effective amendment has become effective;
(2) of any request by the SEC or any other applicable
regulatory authority for amendments or supplements to the Registration Statement
or Prospectus or for additional information;
(3) of the issuance by the SEC or any other applicable
regulatory authority of any stop order of which OPS or its counsel is aware or
should be aware suspending the effectiveness of the Registration Statement or
any order preventing the use of a related Prospectus, or the initiation or any
threats of any proceedings for such purpose; and
(4) of the receipt by OPS of any written notification of
the suspension of the registration or qualification of any of the LLC Shares for
sale in any jurisdiction, or the initiation or any threats of any proceeding for
such purpose;
(g) use its best efforts to comply with all applicable rules and
regulations of the SEC, and make available to its shareholders, as soon as
reasonably practicable, an earnings statement that shall satisfy the provisions
of Section 11(a) of the Securities Act, provided that OPS shall be deemed to
have complied with this Section 2.4(g) if it has complied with Rule 158 under
the Securities Act;
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(h) use its best efforts to provide a transfer agent and registrar
for the LLC Shares covered by the Registration Statement no later than the
effective date of such Registration Statement;
(i) if the LLC Shares are to be sold in an underwritten offering,
enter into a customary underwriting agreement and in connection therewith:
(1) make such representations and warranties to the
underwriters and to LLC and any Affiliate of LLC, to the extent that LLC and
such Affiliate(s) are selling shareholders, in form, substance and scope as are
customarily made by issuers to underwriters and selling shareholders in
comparable underwritten offerings;
(2) obtain opinions of counsel to OPS (in form, substance
and scope reasonably satisfactory to the managing underwriters), addressed to
the underwriters, and covering the matters customarily covered in opinions
requested in comparable underwritten offerings, including, if requested by LLC
or any Affiliate of LLC, a statement to the effect that such opinions may be
relied upon by LLC and such Affiliate(s) of LLC, to the extent that LLC and such
Affiliate(s) are selling shareholders;
(3) obtain "cold comfort" letters and bring-downs thereof
from OPS's independent certified public accountants addressed to the
underwriters and LLC, such letters to be in customary form and covering the
matters customarily covered in "cold comfort" letters by independent accountants
in comparable underwritten offerings;
(4) if requested, provide indemnification in accordance
with the provisions and procedures of Article IV of this Agreement to all
parties to be indemnified pursuant to such Article;
(5) deliver such documents and certificates as the
managing underwriters or LLC may reasonably request to evidence compliance with
Section 2.4(f) above and with any customary conditions contained in the
underwriting agreement; and
(6) make its officers and directors reasonably available
for "roadshows."
(j) cooperate with LLC, and the underwriters if any, to facilitate
the timely preparation and delivery of certificates (not bearing any restrictive
legends) representing the securities to be sold under the Registration
Statement, and enable such securities to be in such denominations and registered
in such names as LLC, or the underwriters if any, may request;
(k) if the managing underwriter or underwriters or LLC reasonably
request, incorporate in a Prospectus supplement or post-effective amendment
thereto such information as the managing underwriter or underwriters and LLC
agree should be included therein relating to OPS and its business and financial
condition and the plan of distribution with respect to such LLC Shares,
including, without limitation, information with respect to the number of LLC
Shares being sold to such underwriters, the purchase price being paid therefor
by such
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underwriters and with respect to any other terms of the underwritten offering of
the LLC Shares to be sold in such offering and make all required filings of such
Prospectus supplement or post-effective amendment as promptly as practicable
upon being notified of the matters to be incorporated in such Prospectus
supplement or post-effective amendment;
(l) provide LLC, any underwriter and any attorney, accountant or
other agent retained by LLC or underwriter (collectively, the "Inspectors") with
(i) the opportunity to participate in the preparation of the Registration
Statement, any Prospectus, and any amendment or supplement thereto and (ii)
reasonable access during normal business hours to appropriate officers of OPS
and its subsidiaries to ask questions and to obtain information that any such
Inspector may reasonably request and make available for inspection all financial
and other records, pertinent corporate documents and properties of any of OPS
and its subsidiaries and affiliates (collectively, the "Records"), as shall be
reasonably necessary to enable them to exercise their due diligence
responsibility; provided, however, that the Records that OPS determines, in good
faith, to be confidential and that it notifies the Inspectors in writing are
confidential shall not be disclosed to any Inspector unless such Inspector signs
or is otherwise bound by a confidentiality agreement reasonably satisfactory to
OPS; and
(m) in the event of the issuance of any stop order of which OPS or
its counsel is aware or should be 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 LLC
Shares for sale in any jurisdiction, OPS promptly will use its best efforts to
obtain its withdrawal.
LLC shall furnish to OPS in writing such information regarding LLC and
its Affiliates as is required to be disclosed pursuant to the Securities Act.
LLC agrees to notify OPS promptly of any inaccuracy or change in information
previously furnished by LLC to OPS or of the happening of any event in either
case as a result of which the Registration Statement, a Prospectus, or any
amendment or supplement thereto contains an untrue statement of a material fact
regarding LLC or omits to state a material fact regarding LLC required to be
stated therein or necessary to make the statements therein not misleading and to
furnish promptly to OPS any additional information required to correct and
update any previously furnished information or required so that such
Registration Statement, Prospectus, or amendment or supplement, shall not
contain, with respect to LLC, an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading.
LLC agrees that, upon receipt of any notice from OPS of the happening
of any event of the kind described in Sections 2.4(e) or (m) above, LLC will
forthwith discontinue the transfer or disposition of any LLC Shares pursuant to
the Prospectus relating to the Registration Statement covering such LLC Shares
until LLC's receipt of the copies of the amended or supplemented Prospectus
contemplated by Section 2.4(e) or the withdrawal of any order contemplated by
Section 2.4(m), and, if so directed by OPS, LLC will deliver to OPS all copies,
other than permanent file copies then in LLC's possession, of the Prospectus
covering such LLC Shares at the time of receipt of such notice. The period
during which any discontinuance under this paragraph is in effect is referred to
herein as a "Discontinuance Period."
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Section 2.4. Registration Expenses. OPS will pay all Registration
Expenses in connection with the registration of the LLC Shares pursuant to
Section 2.4 above, and LLC shall pay (x) any fees or disbursements of counsel to
LLC or any underwriter and (y) any brokerage commissions and fees, underwriting
discounts and commissions, transfer taxes and documentary stamp taxes, if any,
relating to the sale or disposition of the LLC Shares.
Section 2.5. Selection of Underwriters. In connection with any
underwritten offering pursuant to the Registration Statement filed pursuant to
Section 2.4 above, LLC shall have the right to select a lead managing
underwriter or underwriters to administer such offering, which lead managing
underwriter or underwriters shall be reasonably satisfactory to OPS; provided,
however, that OPS shall have the right to select a co-managing underwriter or
underwriters for such offering, which co-managing underwriter or underwriters
shall be reasonably satisfactory to LLC.
ARTICLE III
Holdback Period
If one or more underwritten public offerings of shares of Common Stock
(other than the LLC Shares) by OPS occur during the period of the effectiveness
of the registration relating to the LLC Shares under Section 2.2(c) above, then,
in connection with each such public offering, OPS may require LLC and its
Affiliates to refrain from, and LLC and its Affiliates will refrain from,
selling any of the LLC Shares for a period determined by OPS but not to exceed
ninety (90) days (each such period referred to as a "Holdback Period") so long
as OPS delivers written notice to LLC of OPS's requirement of a Holdback Period,
and the length of such Holdback Period, no less than three days prior to the
inception of the Holdback Period; provided that OPS may require LLC to refrain
from selling any of the LLC Shares during no more than three such Holdback
Periods; and provided further that OPS may require LLC to refrain from selling
any of the LLC Shares during no more than two Holdback Periods in any one
calendar year.
ARTICLE IV
Indemnification; Contribution
Section 4.1. Indemnification by OPS. OPS will, and hereby does
indemnify and hold harmless, to the fullest extent permitted by law, and,
subject to Section 4.3 below, defend LLC and LLC's members, managers, employees,
agents, representatives and each other Person, if any, who controls LLC within
the meaning of the Securities Act, against any and all losses, claims, damages,
liabilities and expenses, joint or several, to which they or any of them may
become subject under the Securities Act or any other statute or common law,
including any amount paid in settlement of any litigation, commenced or
threatened, and to reimburse them for any reasonable legal or other expenses
incurred by them in connection with investigating any claims and defending any
actions, insofar as any such losses, claims, damages, liabilities, expenses or
actions arise out of or are based upon (i) any untrue statement or alleged
untrue statement of a
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material fact contained in the Registration Statement or any pre- or
post-effective amendment thereto or in any Blue Sky Filing, or the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading or (ii) any untrue
statement or alleged untrue statement of a material fact contained in the
Prospectus or any amendment or supplement thereto, or the omission or alleged
omission to state therein a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the indemnification agreement
contained herein shall not apply to such losses, claims, damages, liabilities,
expenses or actions arising out of, or based upon, any such untrue statement or
alleged untrue statement, or any such omission or alleged omission, if such
statement or omission was made in reliance upon and in conformity with
information furnished in writing to OPS by LLC from time to time specifically
for use in the Registration Statement, the Prospectus or any such amendment or
supplement thereto or any Blue Sky Filing. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of LLC or
any other Person and shall survive the transfer of such securities by LLC.
Section 4.2. Indemnification by LLC. LLC will, and hereby does,
indemnify and hold harmless and, subject to Section 4.3 below, defend (in the
same manner and to the same extent as set forth in Section 4.1 above) OPS and
OPS's officers, directors, employees, agents, representatives and each other
Person, if any, who controls OPS within the meaning of the Securities Act, with
respect to any such untrue statement or alleged untrue statement in, or any such
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 OPS
by LLC from time to time specifically for use in the Registration Statement, the
Prospectus, and any such amendment or supplement thereto. Such indemnity shall
remain in full force and effect, regardless of any investigation made by or on
behalf of OPS or any such director, officer or any other Person and shall
survive the transfer of such securities by LLC.
Section 4.3. Notices of Claims. Promptly after receipt by an
indemnified party of notice of the commencement of any action or proceeding
involving a claim referred to in Sections 4.1 and 4.2 above, such indemnified
party will give, if a claim in respect thereof is to be made against an
indemnifying party, written notice to the latter of the commencement of such
action, provided that the failure of any indemnified party to give notice as
provided herein shall not relieve the indemnifying party of its obligations
under this Article IV, except to the extent that the indemnifying party is
actually prejudiced in any material respect by such failure to give notice. In
case any such action is brought against an indemnified party, the indemnifying
party shall be entitled to participate in and, unless in such indemnified
party's reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, to assume the defense
thereof, jointly with any other indemnifying party similarly notified to the
extent that it may wish, with counsel reasonably satisfactory to such
indemnified party, and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party for any legal
or other expenses subsequently incurred by the latter in connection with the
defense thereof other than reasonable costs of reasonable investigation. If the
indemnifying party advises
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an indemnified party that it will contest a claim for indemnification hereunder,
or fails, within thirty (30) days of receipt of any indemnification notice to
notify, in writing, such Person of its election to defend, settle or compromise,
at its sole cost and expense, any action, proceeding or claim (or discontinues
its defense at any time after it commences such defense), then the indemnified
party may, at its option, defend, settle or otherwise compromise or pay such
action or claim in each case at the indemnifying party's expense. In any event,
unless and until the indemnifying party elects in writing to assume and does so
assume the defense of any such claim, proceeding or action, the indemnified
party's reasonable costs and expenses arising out of the defense, settlement or
compromise of any such action, claim or proceeding shall be losses subject to
indemnification hereunder. The indemnified party shall cooperate fully with the
indemnifying party in connection with any negotiation or defense of any such
action or claim by the indemnifying party and shall furnish to the indemnifying
party all information reasonably available to the indemnified party that relates
to such action or claim. The indemnifying party shall keep the indemnified party
fully informed at all times as to the status of the defense or any settlement
negotiations with respect thereto. If the indemnifying party elects to defend
any such action or claim, then the indemnified party shall be entitled to
participate in such defense with counsel of its choice at its sole cost and
expense, except that the indemnifying party shall be liable for such reasonable
costs and expenses if, in such indemnified party's reasonable judgment, a
conflict of interest between such indemnified and indemnifying parties may exist
as described above. If the indemnifying party does not assume such defense, the
indemnified party shall keep the indemnifying party informed at all times as to
the status of the defense; provided, however, that the failure to keep the
indemnifying party so informed shall not affect the obligations of the
indemnifying party hereunder. No indemnifying party shall be liable for any
settlement of any action, claim or proceeding effected without its written
consent; provided, however, that the indemnifying party shall not unreasonably
withhold, delay or condition its consent. No indemnifying party shall, without
the consent of the indemnified party, consent to entry of any judgment or enter
into any settlement that does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a general
written release from all liability with respect to such claim or litigation.
Section 4.4. Indemnification Payments. The indemnification
required by this Article IV shall be made by periodic payments of the amount
thereof during the course of the investigation or defense as and when bills are
received or expense, loss, damage or liability is incurred, subject to the
receipt of such documentary support therefor as the indemnifying party may
reasonably request.
Section 4.5. Contribution. If the indemnification provided for in
this Article IV is unavailable to or insufficient to hold harmless a party
otherwise entitled to be indemnified thereunder in respect to any losses,
claims, damages and expenses (or actions, whether commenced or threatened, in
respect thereof) referred to therein, then OPS and LLC shall contribute to the
amount paid or payable by such party as a result of such losses, claims,
damages, liabilities, expenses or actions in such proportion as is appropriate
to reflect the relative fault of OPS and LLC in connection with the statements
or omissions that resulted in such losses, claims, damages, liabilities,
expenses or actions. The relative fault of OPS and LLC shall be determined by
reference to whether the untrue statement or alleged untrue statement of a
material
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fact or the omission or alleged omission to state a material fact relates to
information supplied by OPS or by LLC and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. OPS and LLC agree that it would not be just and equitable
if contributions pursuant to this Section 4.5 were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to above in this Section 4.5. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who is not
guilty of such fraudulent misrepresentation.
Section 4.6. Other Rights and Liabilities. The indemnity and
contribution agreements contained herein shall be in addition to (i) any cause
of action or similar right of the indemnified party against the indemnifying
party or others and (ii) any liabilities the indemnifying party may be subject
to pursuant to the law.
ARTICLE V
Miscellaneous
Section 5.1. Notices. Any notices or other communications required
or permitted hereunder shall be sufficiently given if in writing (including
telecopy or similar teletransmission), addressed as follows:
If to OPS,
to it at: Open Plan Systems, Inc.
4299 Carolina Avenue
Building C
Richmond, Virginia 23222
Telecopier: (804) 228-5656
Attention: Anthony F. Markel
With a copy to: Williams Mullen Christian & Dobbins
1021 East Cary Street, 16th Floor
Richmond, Virginia 23219
Telecopier: (804) 783-6507
Attention: Theodore L. Chandler, Jr., Esquire
If to LLC,
to it at: Great Lakes Capital, LLC
310 South Street
Morristown, New Jersey 07960
Telecopier: (973) 539-7909
Attention: W. Sydnor Settle
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With a copy to: Dykema Gossett PLLC
400 Renaissance Center
Detroit, Michigan 48243-1668
Telecopier: (313) 568-6915
Attention: Fredrick M. Miller, Esquire
Unless otherwise specified herein, such notices or other communications shall be
deemed received (a) in the case of any notice or communication sent other than
by mail, on the date actually delivered to such address (evidenced, in the case
of delivery by overnight courier, by confirmation of delivery from the overnight
courier service making such delivery, and in the case of a telecopy, by receipt
of a transmission confirmation form or the addressee's confirmation of receipt),
or (b) in the case of any notice or communication sent by mail, three business
days after being sent, if sent by registered or certified mail, with first-class
postage prepaid. Each of the parties hereto shall be entitled to specify a
different address by giving notice as aforesaid to each of the other parties
hereto.
Section 5.2. Amendments. This Agreement may not be amended,
changed, supplemented, waived or otherwise modified or terminated except by an
instrument in writing signed by LLC and by OPS.
Section 5.3. Successors and Assigns. Except as otherwise provided
herein, this Agreement shall be binding upon and shall inure to the benefit of
and be enforceable by the parties and their respective successors and assigns,
including without limitation in the case of any corporate party hereto any
corporate successor by merger or otherwise; provided that no party may assign
this Agreement without the other party's prior written consent.
Section 5.4. Entire Agreement. This Agreement embodies the entire
agreement and understanding among the parties relating to the subject matter
hereof and supersedes all prior agreements and understandings relating to such
subject matter. There are no representations, warranties or covenants by the
parties hereto relating to such subject matter other than those expressly set
forth in this Agreement, the Consulting Agreement and the Stock Option
Agreement.
Section 5.5. Specific Performance. The parties acknowledge that
money damages are not an adequate remedy for violations of this Agreement and
that any party may, in its sole discretion, apply to a court of competent
jurisdiction for specific performance or injunctive or such other relief as such
court may deem just and proper in order to enforce this Agreement or prevent any
violation hereof and, to the extent permitted by applicable law, each party
waives any objection to the imposition of such relief.
Section 5.6. Remedies Cumulative. All rights, powers and remedies
provided under this Agreement or otherwise available in respect hereof at law or
in equity shall be cumulative and not alternative, and the exercise or beginning
of the exercise of any thereof by any party shall
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not preclude the simultaneous or later exercise of any other such right, power
or remedy by such party.
Section 5.7. No Waiver. The failure of any party hereto to
exercise any right, power or remedy provided under this Agreement or otherwise
available in respect hereof at law or in equity, or to insist upon compliance by
any other party hereto with its obligations hereunder, and any custom or
practice of the parties at variance with the terms hereof, shall not constitute
a waiver by such party of its right to exercise any such or other right, power
or remedy or to demand such compliance.
Section 5.8. No Third Party Beneficiaries. Except as provided in
Article IV above, this Agreement is not intended to be for the benefit of and
shall not be enforceable by any Person who or which is not a party hereto.
Section 5.9. Consent to Jurisdiction. Each party to this
Agreement, by its execution hereof, (i) hereby irrevocably submits, and agrees
to cause each of its Affiliates to submit, to the jurisdiction of the federal
courts located in the City of Richmond, Virginia, and in the event that such
federal courts shall not have subject matter jurisdiction over the relevant
proceeding, then of the state courts located in the City of Richmond, Virginia,
for the purpose of any action arising out of or based upon this Agreement or
relating to the subject matter hereof or the transactions contemplated hereby,
(ii) hereby waives, and agrees to cause each of its Affiliates to waive, to the
extent not prohibited by applicable law, and agrees not to assert, and agrees
not to allow any of its Affiliates to assert, by way of motion, as a defense or
otherwise, in any such action, any claim that it is not subject personally to
the jurisdiction of the above-named courts, that its property is exempt or
immune from attachment or execution, that any such proceeding brought in one of
the above-named courts is improper, or that this Agreement or the subject matter
hereof may not be enforced in or by such court and (iii) hereby agrees not to
commence or to permit any of its Affiliates to commence any action arising out
of or based upon this Agreement or relating to the subject matter hereof other
than before one of the above-named courts nor to make any motion or take any
other action seeking or intending to cause the transfer or removal of any such
action to any court other than one of the above-named courts whether on the
grounds of inconvenient forum or otherwise. Each party hereby consents to
service of process in any such proceeding in any manner permitted by Virginia
law, as the case may be, and agrees that service of process by registered or
certified mail, return receipt requested, at its address specified pursuant to
Section 5.1 above is reasonably calculated to give actual notice.
Notwithstanding anything contained in this Section 5.9 to the contrary with
respect to the parties' forum selection, if an action is filed against a party
to this Agreement, including its Affiliates, by a person who or which is not a
party to this Agreement, an Affiliate of a party to this Agreement, or an
assignee thereof (a "Third Party Action"), in a forum other than the federal
district court or a state court located in the City of Richmond, Virginia, and
such Third Party Action is based upon, arises from, or implicates rights,
obligations or liabilities existing under this Agreement or acts or omissions
pursuant to this Agreement, then the party to this Agreement, including its
Affiliates, joined as a defendant in such Third Party Action shall have the
right to file cross-claims or third-party claims in the Third Party Action
against the other party to this Agreement, including its Affiliates, and even if
not a defendant therein, to intervene in such Third Party Action with
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or without also filing cross-claims or third-party claims against the other
party to this Agreement, including its Affiliates.
Section 5.10. Governing Law. This Agreement shall be governed by
and construed in accordance with the domestic substantive law of the
Commonwealth of Virginia, without giving effect to any choice or conflict of law
provision or rule that would cause the application of the law of any other
jurisdiction.
Section 5.11. Name, Captions. The name assigned to this Agreement
and the section captions used herein are for convenience of reference only and
shall not affect the interpretation or construction hereof.
Section 5.12. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one instrument. Each counterpart may consist
of a number of copies each signed by less than all, but together signed by all,
the parties hereto.
Section 5.13. Expenses. Each of the parties hereto shall bear their
own expenses incurred in connection with this Agreement and the transactions
contemplated hereby, except that in the event of a dispute concerning the terms
or enforcement of this Agreement, the prevailing party in any such dispute shall
be entitled to reimbursement of reasonable legal fees and disbursements from the
other party or parties to such dispute.
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IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have caused this Registration Rights Agreement to be executed, as of the
date first above written by their respective officers thereunto duly authorized.
OPEN PLAN SYSTEMS, INC.
By: /s/ Anthony F. Markel
--------------------------------------
Anthony F. Markel
Chairman of the Board
GREAT LAKES CAPITAL, LLC
By: /s/ W. Sydnor Settle
--------------------------------------
W. Sydnor Settle
Manager
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