Exhibit 10.2
EXHIBIT B
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF
ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND, AMONG
OTHER RESTRICTIONS, HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE OFFERED,
SOLD, OR OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED, OR
HYPOTHECATED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT, OR AN EXEMPTION FROM REGISTRATION, UNDER SUCH ACT
___________ GP Warrants
GP STRATEGIES CORPORATION
WARRANT CERTIFICATE
This warrant certificate ("GP Warrant Certificate") certifies that, for
value received, [PURCHASER] or registered assigns (the "Holder") is the owner of
the number of warrants ("GP Warrants") specified above, each of which entitles
the Holder to subscribe for and purchase, at any time during the Exercise Period
(as hereinafter defined), one fully paid and non-assessable share of Common
Stock, $.01 par value ("GP Common Stock"), of GP Strategies Corporation, a
Delaware corporation ("GP"), at an initial purchase price of $8.00 per share of
GP Common Stock, subject to adjustment as hereinafter provided.
1. Issue; Exercise Price; Agent
1.1 The GP Warrants evidenced hereby are part of the issue of 937,500 GP
Warrants pursuant to the Note and Warrant Purchase Agreement (the "Purchase
Agreement"), dated August 8, 2003, among GP, its wholly-owned subsidiaries
National Patent Development Corporation, a Delaware corporation ("NPDC"), and
MXL Industries, Inc., a Delaware corporation, the purchasers named therein, and
Gabelli Funds, LLC, as agent (the "Agent"), relating to the issue of the GP
Warrants and GP's 6% Conditional Subordinated Notes due 2008 (the "Notes").
1.2 Each GP Warrant entitles the Holder to subscribe for and purchase one share
of GP Common Stock at an initial purchase price of $8.00 per share, subject to
adjustment as hereinafter provided (the "Exercise Price"). The Exercise Price
and number of shares of GP Common Stock issuable upon exercise of each GP
Warrant (the "GP Warrant Shares") are subject to adjustment as provided below.
1.3 Each Holder, by accepting this GP Warrant Certificate, appoints and
authorizes the Agent as the agent of the Holder, to take such action as agent on
its behalf and to exercise such powers as are delegated to the Agent by the
terms of the Purchase Agreement. Without limiting the foregoing, each Holder
acknowledges that the GP Warrants may be amended by action of the Agent, with
the consent of holders of a majority of the then-outstanding GP Warrants, and
that all Holders of GP Warrants will be bound by any such amendment.
2. Exercise; Expiration Date
2.1 The GP Warrants are exercisable, at the option of the Holder, at any time
after the Closing Date (as defined in the Purchase Agreement) (the "Original
Issue Date") and on or before the Expiration Date (the "Exercise Period"), upon
surrender of this GP Warrant Certificate to GP together with a duly completed
notice of exercise, in the form attached hereto as Exhibit A (the "Notice of
Exercise"), and payment, in the manner provided below, of an amount equal to the
Exercise Price multiplied by the number of GP Warrants to be exercised. Such
delivery shall be made at GP's office at 777 Westchester Avenue, Fourth Floor,
White Plains, New York 10604, or such other place as may be designated by GP by
notice to the Holder. The "Exercise Date" shall mean the date on which such
Notice of Exercise and payment are delivered to GP.
2.2 The "Expiration Date" shall mean 5:00 p.m. New York time on the fifth
anniversary of the Original Issue Date or, if such date is not a Business Day,
then 5:00 p.m. New York time the next following Business Day. "Business Day"
shall mean any date which in the State of New York is not a holiday or a day on
which banks are authorized to close.
2.3 The Exercise Price for any GP Warrants shall be paid by delivery to GP,
together with the Notice of Exercise, of (a) a certified or cashier's check or
checks, in lawful money of the United States of America, (b) Notes, duly
endorsed, in an integral multiple of $1,000 principal amount, valued as provided
below, or (c) combination of the foregoing, all at the option of the Holder. The
amount of the Exercise Price paid by delivery of any Notes (the "Note Payment
Amount") shall be equal to the principal amount thereof plus any accrued and
unpaid interest thereon to the Exercise Date, except that, if the Exercise Date
is after a record date for payment of interest on the Notes but prior to the
payment date thereof, the interest payable on such payment date on the Notes so
delivered shall not be included in the Note Payment Amount and shall be paid on
such payment date in accordance with the terms of the Notes. If the Note Payment
Amount of the Notes delivered by the Holder exceeds the Exercise Price for the
GP Warrants being exercised, the greatest amount of Notes in an integral
multiple of $1,000 with a Note Payment Amount not greater than such aggregate
Exercise Price shall be deemed to have been delivered, and GP shall execute and
deliver a new Note for the remaining principal amount of such Notes.
2.4 Upon each exercise of the Holder's rights to purchase GP Warrant Shares, the
Holder shall be deemed to be the holder of record of the GP Warrant Shares
issuable upon such exercise, notwithstanding that the transfer books of GP shall
then be closed or certificates representing such GP Warrant Shares shall not
then have been actually delivered to the Holder. As soon as practicable, but no
later than five Business Days, after each such exercise, GP shall issue and
deliver to the Holder a certificate or certificates for the GP Warrant Shares
issuable upon such exercise, registered in the name of the Holder. In the case
of exercise of less than all the GP Warrants represented by this GP Warrant
Certificate, GP shall cancel this GP Warrant Certificate upon the surrender
hereof and shall execute and deliver to the Holder a new GP Warrant Certificate
for the balance of such GP Warrants.
2.5 The issuance of any GP Warrant Shares or other securities upon the exercise
of GP Warrants and the delivery of certificates or other instruments
representing such securities shall be made without charge to the Holder for any
tax or other charge in respect of such issuance. GP shall not, however, be
required to pay any tax which may be payable in respect of any transfer involved
in the issue and delivery of any certificate in a name other than that of the
Holder and GP shall not be required to issue or deliver any such certificate
unless and until the person or persons requesting the issue thereof shall have
paid to GP the amount of such tax or shall have established to the satisfaction
of GP that such tax has been paid.
2.6 No fractional shares of GP Common Stock will be issued in connection with
any exercise hereof of GP Warrants, but, in lieu of such fractional shares, GP
shall make a cash payment therefor in an amount equal to the product of the
applicable fraction and the Current Market Price (as defined below) as of the
Exercise Date.
3. Registration and Transfer
3.1 GP shall maintain a register (the "Register") for the registration and
transfer of the GP Warrants and the registration and transfer of GP Warrant
Shares.
3.2 Prior to due presentment for registration of transfer of this GP Warrant
Certificate, or the GP Warrant Shares issued upon exercise of the GP Warrants
evidenced hereby, GP may deem and treat the registered Holder thereof on the
Register as the absolute owner thereof. GP shall be entitled to treat the
registered holder of any GP Warrant on the Register as the owner in fact thereof
for all purposes and shall not be bound to recognize any equitable or other
claim to or interest in such GP Warrant on the part of any other person, and
shall not be liable for any registration or transfer of GP Warrants which are
registered or to be registered in the name of a fiduciary or the nominee of a
fiduciary unless made with the actual knowledge that a fiduciary or nominee is
committing a breach of trust in requesting such registration or transfer, or
with the knowledge of such facts that its participation therein amounts to bad
faith. In all cases of transfer by an attorney, executor, administrator,
guardian, or other legal representative, duly authenticated evidence of his or
its authority shall be produced.
3.3 Neither the GP Warrants evidenced hereby nor the GP Warrant Shares issuable
upon exercise hereof have been registered under the Securities Act of 1933, as
amended (the "Securities Act"). The Holders are entitled to the benefits of the
Registration Rights Agreement, dated _____________, 2003 (the "Registration
Rights Agreement"), made by GP in favor of the Holders. The Registration Rights
Agreement provides, among other things, for certain restrictions on the
disposition of the GP Warrants and the GP Warrant Shares, and each Holder, by
acceptance of a GP Warrant Certificate, accepts the restrictions and other
provisions of the Registration Rights Agreement. Without limiting the foregoing:
(a) No Holder may make any disposition of GP Warrants unless such
disposition is (i) to an investment company registered under
the Investment Company Act of 1940, as amended, which is
advised by Gabelli Funds, LLC, (ii) of all of the GP Warrants
held by such Holder, (iii) to one or more transferees each of
whom, after giving effect to such disposition, will hold at
least 50,000 GP Warrants, or (iv) required to enable such
Holder to comply with any legal or regulatory restrictions.
(b) In addition, no Holder shall make any disposition of any GP Warrants or
GP Warrant Shares unless:
(i) (A) each transferee is an accredited investor, as such term is
defined in Regulation D promulgated under the Securities Act, and has
indicated in the Form of Assignment attached hereto as Exhibit B (the "Form
of Assignment") the basis on which such transferee is an accredited
investor, (B) each transferee has agreed in writing to be bound by the
terms of this GP Warrant Certificate, the Registration Rights Agreement,
and the Purchase Agreement, including, without limitation, the provisions
thereof with respect to the Agent and the obligations as a Security Holder
(as defined in the Purchase Agreement) under the Purchase Agreement, (C)
such Holder shall have notified GP of the proposed disposition, and (D)
such Holder shall have furnished GP with an opinion of counsel (which
opinion may be delivered by in-house counsel of Holder) in the form set
forth as Exhibit C, or otherwise reasonably satisfactory to GP, that such
disposition will not require registration of the securities to be disposed
of under the Securities Act, provided that no such opinion shall be
required if such transfer is pursuant to (I) Rule 144(k) promulgated under
the Securities Act or (II) Rule 144A promulgated under the Securities Act;
or
(ii) in the case of a disposition of GP Warrant Shares, such
disposition is pursuant to and in compliance with Rule 144 promulgated
under the Securities Act, provided that GP may require that such Holder
shall have furnished GP with an opinion of counsel (which opinion may be
delivered by in-house counsel of Holder) in the form set forth as Exhibit
C, or otherwise reasonably satisfactory to GP, that such disposition is in
accordance with such Rule, provided that no such opinion shall be required
if such transfer is pursuant to Rule 144(k) promulgated under the
Securities Act; or
(iii) in the case of a disposition of GP Warrant Shares, there is then
in effect a registration statement under the Securities Act covering such
proposed disposition and such disposition is made in accordance with such
registration statement.
The execution and delivery of the Form of Assignment by the transferor and
transferee indicating the satisfaction of the requirements of Sections
3.3(a), (b)(i)(A), (b)(i)(B), (b)(i)(C), and, if applicable, (b)(i)(D)(I)
or (b)(i)(D)(II) shall be sufficient to satisfy such requirements with
respect to the transfer of GP Warrants (except (other than with respect to
Section 3(b)(i)(D)(II)) to the extent GP has notified the Holder promptly
after receipt of such Form of Assignment that to GP's knowledge such
requirements are not met, specifying in such notice the reason GP believes
such requirements are not met).
3.4 Each GP Warrant Certificate, and each certificate representing GP Warrant
Shares, shall be stamped or otherwise imprinted with a legend substantially
similar to the following (in addition to any legend required under other
applicable securities laws):
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF ARE
SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND, AMONG OTHER
RESTRICTIONS, HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE OFFERED, SOLD, OR
OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED, OR HYPOTHECATED EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT, OR AN EXEMPTION FROM
REGISTRATION, UNDER SUCH ACT
3.5 GP shall register in the Register any permitted transfer of a GP
Warrant Certificate, upon surrender of same to GP with a written instrument of
transfer, in the form attached as Exhibit B, duly executed by the registered
Holder or by a duly authorized attorney thereof and (unless being transferred to
GP) by the transferee or by a duly authorized attorney thereof together with
such other documents as may be required for such transfer as provided above.
Upon any such registration of transfer, new GP Warrant Certificate(s) shall be
issued to the transferee(s) and the surrendered GP Warrant Certificate shall be
canceled by GP. A GP Warrant Certificate may also be exchanged, at the option of
the Holder, for new GP Warrant Certificates representing in the aggregate the
number of GP Warrants evidenced by the GP Warrant Certificate surrendered.
3.6 Upon receipt by GP of reasonable evidence of the ownership of and the
loss, theft, destruction, or mutilation of any GP Warrant Certificate and, in
the case of loss, theft, or destruction, of indemnity reasonably satisfactory to
GP, or, in the case of mutilation, upon surrender and cancellation of the
mutilated GP Warrant Certificate, GP shall execute and deliver in lieu thereof a
new GP Warrant Certificate representing an equal number of GP Warrants.
3.7 Upon any transfer of GP Warrants or GP Warrant Shares pursuant to
Section 3.3(b)(i), the transferee shall be entitled to all of the benefits
enjoyed by the transferor under the Purchase Agreement and the Registration
Rights Agreement, and the transferor shall be relieved of any obligations under
the Purchase Agreement arising after the date of such transfer.
4. Stock Fully Paid; Reservation of Shares; Covenants
4.1 GP covenants that it will at all times reserve and keep available out
of its authorized GP Common Stock, solely for the purpose of issue upon exercise
of the GP Warrants, such number of GP Warrant Shares as shall then be issuable
upon the exercise of all outstanding GP Warrants.
4.2 GP covenants that all GP Warrant Shares issued upon exercise of the GP
Warrants shall be duly and validly issued and, upon payment for such shares as
set forth herein, fully paid and non-assessable and free from all taxes, liens,
and charges with respect to the issue thereof, and that upon issuance such
shares shall be listed on each national securities exchange, if any, on which
the other shares of outstanding GP Common Stock of GP are then listed.
4.3 GP shall not by any action, including, without limitation, amending its
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities, or any other
action, avoid or seek to avoid the observance or performance of any of the terms
of this GP Warrant Certificate, but will at all times in good faith assist in
the carrying out of all such terms and in the taking of all such actions as may
be necessary or appropriate to protect the rights of the Holder hereof against
impairment.
4.4 In case GP shall at any time (a) declare a stock dividend upon the GP
Class B Stock payable in shares of GP Class B Stock or (b) make any distribution
upon the GP Class B Stock payable in shares of GP Class B Stock or (c) subdivide
the outstanding shares of GP Class B Stock into a greater number of shares or
(d) combine the outstanding shares of GP Class B Stock into a smaller number of
shares, then and in any of such events GP shall make, declare, or effect a
similar but ratable stock dividend or distribution or subdivision or combination
of the shares of GP Common Stock but payable in shares of GP Common Stock.
5. Adjustment of Exercise Price and Number of GP Warrant Shares
5.1 The number of GP Warrant Shares or other securities or assets issuable
upon the exercise of each GP Warrant and the Exercise Price shall be subject to
adjustment from time to time upon the happening of certain events as follows:
(a) Recapitalization, Reorganization, Reclassification, Consolidation,
Merger, or Sale.
(i) If GP, at any time after August 8, 2003 and prior to the Expiration
Date or such earlier date that no GP Warrants are outstanding (the
"Adjustment Period"), shall do any of the following (each a "Triggering
Event"):
(A) consolidate with or merge into any other Person and GP shall
not be the continuing or surviving corporation of such consolidation
or merger;
(B) permit any other Person to consolidate with or merge into GP
and GP shall be the continuing or surviving Person but, in connection
with such consolidation or merger, any capital stock of GP shall be
changed into or exchanged for securities of any other Person or cash
or any other property (excluding issuance by GP of its capital stock
in a merger or consolidation so long as the outstanding capital stock
of GP is not changed or exchanged);
(C) transfer all or substantially all of its properties or assets
to any other Person;
(D) effect a capital reorganization or reclassification of its
capital stock; or
(E) enter into any other transaction similar to any of the
foregoing (provided that a Triggering Event shall not include a
consolidation or merger to which any subsidiary of GP is a party so
long as GP is not also a party to such consolidation or merger), then,
and in the case of each such Triggering Event, proper provision shall
be made so that, upon the basis and the terms and in the manner
provided in this GP Warrant Certificate, the Holder of the GP Warrants
represented by this GP Warrant Certificate shall be entitled
(F) upon the exercise hereof at any time after the consummation of
such Triggering Event, with respect to any GP Warrants which are not
exercised prior to such Triggering Event, or are not redeemed in
connection with such Triggering Event, to receive at the Exercise
Price in effect at the time immediately prior to the consummation of
such Triggering Event, the securities, cash, and property to which
such Holder would have been entitled upon the consummation of such
Triggering Event if such Holder had exercised such GP Warrants
immediately prior thereto, subject to adjustments and increases
(subsequent to such corporate action) as nearly equivalent as possible
to the adjustments and increases provided for in this Section 5, or
(G) to sell such GP Warrants (or, at such Holder's election, a
portion thereof) to the Person continuing after or surviving such
Triggering Event, or to GP (if GP is the continuing or surviving
Person), at a sales price payable in cash or Marketable Securities or
a combination thereof (as determined by such Person or GP, as the case
may be) equal to (I) the sum of the amount of cash and the fair market
value (as determined in the good faith judgment of the Board of
Directors of GP) of the property and/or securities to which a holder
of the number of shares of GP Common Stock which would otherwise have
been delivered upon the exercise of such GP Warrants (or the portion
thereof so sold) would have been entitled upon the effective date or
closing of any such Triggering Event less (II) an amount equal to the
aggregate Exercise Price in effect immediately prior to such
Triggering Event applicable to all of such GP Warrants (or the portion
thereof so sold).
(ii) Notwithstanding anything contained in this GP Warrant
Certificate to the contrary, GP will not effect any Triggering Event
unless, prior to the consummation thereof, (A) each Person (other than
GP) which may be required to deliver any securities, cash, or property
upon the exercise of GP Warrants, as provided herein, or otherwise
under this GP Warrant Certificate, shall assume, by written instrument
delivered to, and reasonably satisfactory to, the Holder, (I) the
obligations of GP under this GP Warrant Certificate (and, if GP shall
survive the consummation of such Triggering Event, such assumption
shall be in addition to, and shall not release GP from, any continuing
obligations of GP under this GP Warrant Certificate) and (II) the
obligation to deliver to such Holder such shares of securities, cash,
or property as, in accordance with the provisions of Section 5.1(a)(i),
such Holder shall be entitled to receive, and (B) such Person shall
have delivered to such Holder an opinion of counsel for such Person
(which may be in-house counsel), which counsel shall be reasonably
satisfactory to such Holder, stating that this GP Warrant Certificate
shall thereafter continue in full force and effect and the terms hereof
(including, without limitation, all of the provisions of this Section
5.1(a)) shall be applicable to the securities, cash, or property which
such Person may be required to deliver upon any exercise of the GP
Warrants or the exercise of any rights provided in this GP Warrant
Certificate.
(b) Subdivision or Combination of Shares. If GP, at any time during the
Adjustment Period, shall subdivide or combine any shares of GP Common Stock, (i)
in case of subdivision of shares, the number of GP Warrant Shares issuable upon
exercise of each GP Warrant immediately prior to such subdivision shall be
proportionately increased (as at the effective date of such subdivision or, if
GP shall take a record of the holders of the GP Common Stock for the purpose of
so subdividing, as at the applicable record date, whichever is earlier) to
reflect the increase in the total number of shares of GP Common Stock
outstanding as a result of such subdivision, or (ii) in the case of a
combination of shares, the number of GP Warrant Shares issuable upon exercise of
each GP Warrant immediately prior to such subdivision shall be proportionately
reduced (as at the effective date of such combination or, if GP shall take a
record of the holders of the GP Common Stock for the purpose of so combining, as
at the applicable record date, whichever is earlier) to reflect the reduction in
the total number of shares of GP Common Stock outstanding as a result of such
combination.
(c) Stock Dividends. If GP, at any time during the Adjustment Period, shall
pay a dividend in, or make any other distribution to its stockholders (without
consideration therefor) of, shares of GP Common Stock, the number of GP Warrant
Shares issuable upon exercise of each GP Warrant shall be adjusted, as at the
date GP shall take a record of the holders of GP's capital stock for the purpose
of receiving such dividend or other distribution (or, if no such record is
taken, as at the date of such payment or other distribution), such that each GP
Warrant shall thereafter evidence the right to purchase a number of GP Warrant
Shares determined by multiplying the number of GP Warrant Shares issuable upon
the exercise of each GP Warrant in effect immediately prior to such record date
(or if no such record is taken, then immediately prior to such payment or other
distribution) by a fraction, (i) the numerator of which shall be the total
number of shares of GP Common Stock outstanding immediately after such dividend
or distribution (plus, in the event that GP paid cash for fractional shares, the
number of additional shares which would have been outstanding had GP issued
fractional shares in connection with said dividends) and (ii) the denominator of
which shall be the total number of shares of GP Common Stock outstanding
immediately prior to such dividend or distribution.
(d) Spin Off. Upon completion of the Spin-Off (as defined in the Purchase
Agreement), the Exercise Price shall be adjusted by multiplying the Exercise
Price in effect immediately prior to the Spin-Off by a fraction, (i) the
numerator of which is the Current Market Price immediately after the Spin-Off
and (ii) the denominator of which is the sum of (A) the Current Market Price
immediately after the Spin-Off and (B) the product obtained by multiplying the
NPDC Market Price (as defined below) by the number of shares of Class A Common
Stock (or other security) of NPDC issuable in the Spin-Off to the holder of one
share of GP Common Stock.
(e) Other Distributions. If GP, at any time during the Adjustment Period,
shall distribute to all holders of GP Common Stock, or all holders of GP Common
Stock shall otherwise become entitled to receive, shares of capital stock of GP
(other than dividends or distributions on the GP Common Stock referred to in
Section 5.1(c)), evidences of its indebtedness, cash, assets (other than
dividends or distributions payable in shares of GP Common Stock, and other than
as referred to in Section 5.1(d)), rights, options, or warrants providing the
right to subscribe for or purchase any shares of GP's capital stock or evidences
of its indebtedness, or securities convertible into or exchangeable for shares
of GP Common Stock, the Exercise Price shall be adjusted by multiplying the
Exercise Price in effect immediately prior to such event by a fraction, (i) the
numerator of which shall be the Current Market Price on the record date for the
determination of shareholders entitled to receive such distribution, less the
fair market value (as determined in good faith by the Board of Directors of GP)
of the portion of the shares of GP's capital stock other than GP Common Stock,
evidences of indebtedness, assets, or such rights, options, warrants, or
convertible securities, or the amount of such cash, distributable with respect
to each share of GP Common Stock, and (ii) the denominator of which shall be the
Current Market Price on such record date. Such adjustment shall be made whenever
any such distribution is made, and shall become effective retroactively as of
the record date for the determination of shareholders entitled to receive such
distribution.
(f) Adjustment of Shares. Upon each adjustment of the Exercise Price as a
result of Section 5.1(e), each GP Warrant shall thereafter evidence the right to
purchase, at the Exercise Price as adjusted as provided therein, a number of GP
Warrant Shares equal to the product obtained by multiplying (i) the number of
shares issuable upon exercise of one GP Warrant prior to such adjustment by (ii)
a fraction, the numerator of which is the Exercise Price in effect immediately
prior to such adjustment and the denominator of which is the Exercise Price in
effect immediately after such adjustment. No such adjustment of the number of GP
Warrant Shares deliverable on exercise of the GP Warrants shall be made in
connection with the adjustment of the Exercise Price provided for in Section
5.1(d).
(g) Adjustment of Exercise Price. All calculations under this Section 5.1
shall be made to the nearest cent or to the nearest one-ten thousandth of a
share, as the case may be; provided, however that, no adjustment in the Exercise
Price shall be required if such adjustment is less than $.01; and provided,
further, that any adjustments which by reason of this Section 5.1(g) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment.
(h) Changes to GP Warrant Certificate. Anything in this Section 5.1 to the
contrary notwithstanding, GP shall be entitled, but shall not be required, to
make such changes in the number of GP Warrant Shares issuable upon the exercise
of each GP Warrant, or in the Exercise Price, in addition to those required by
this Section 5.1, as GP in its discretion shall determine to be advisable so
that any dividend or distribution in shares of GP Common Stock, subdivision,
reclassification, or combination of shares of GP Common Stock, issuance of
rights, warrants, or options to purchase GP Common Stock, or distribution of
shares of stock other than GP Common Stock, cash, evidences of indebtedness or
assets, or convertible or exchangeable securities made by GP to the holders of
the GP Common Stock shall not result in any tax to the holders of the GP Common
Stock or securities convertible into GP Common Stock.
(i) Other Action Affecting GP Common Stock. If, during the Adjustment
Period, GP shall take any action affecting the GP Common Stock, other than an
action described in any of Sections 5.1(a) through (e), inclusive, and the
failure to make any adjustment would not fairly protect the purchase rights
represented by this GP Warrant Certificate in accordance with the essential
intent and principle of this Section 5.1, then the number of GP Warrant Shares
issuable upon exercise of each GP Warrant and the Exercise Price, as applicable,
shall be adjusted in such manner and at such time as the Board of Directors of
GP may in good faith determine to be equitable in the circumstances.
5.2 Notice of Adjustments. Whenever the Exercise Price or the number of GP
Warrant Shares issuable upon the exercise of each GP Warrant is adjusted as
provided in this Section 5 hereof (for purposes of this Section 5.2, each an
"adjustment"), GP shall cause its Chief Financial Officer to prepare and execute
a certificate setting forth, in reasonable detail, the event requiring the
adjustment, the amount of the adjustment, the method by which such adjustment
was calculated (including a description of the basis on which the Board made any
determination hereunder), and the Exercise Price or the number of GP Warrant
Shares issuable upon the exercise of each GP Warrant after giving effect to such
adjustment, and shall cause copies of such certificate to be delivered to the
Holder at the address of the Holder shown on the Register, promptly after each
adjustment. Any dispute between GP and the Holder with respect to the matters
set forth in such certificate may at the option of the Holder be submitted to
the independent accounting firm then regularly engaged by GP, which firm shall
be requested to deliver a written opinion as to such matters to GP and the
Holder within 30 days after submission to it of such dispute. Such opinion shall
be final and binding on the parties hereto. The fees and expenses of such
accounting firm shall be paid by GP.
5.3 If, at any time after the Original Issue Date and prior to the end of
the Adjustment Period, GP shall:
(a) pay any dividend or make any distribution on the GP Common Stock;
(b) issue any rights, warrants, or other securities to all holders of GP
Common Stock entitling them to purchase any additional shares of GP Common Stock
or any other rights, warrants, or other securities;
(c) effect any reclassification or change of the outstanding GP Common
Stock, or any consolidation, merger, sale, lease, or conveyance of property
described in Section 5.1; or
(d) effect any liquidation, dissolution, or winding-up of GP;
then, and in any one or more of such cases, GP shall mail written notice thereof
to the Holder at the Holder's address as it shall appear in the Register, mailed
at least 10 days prior to (i) the date as of which the holders of record of
shares of GP Common Stock to be entitled to receive any such dividend,
distribution, rights, warrants, or other securities are to be determined or (ii)
the date on which any such reclassification, change, consolidation, merger,
sale, lease, conveyance of property, liquidation, dissolution, or winding-up is
expected to become effective.
5.4 The form of GP Warrant Certificate need not be changed because of any
change in the Exercise Price or the number of GP Warrant Shares or other
securities or assets issuable upon the exercise of a GP Warrant, and GP Warrant
Certificates issued before or after such change may state the same Exercise
Price, the same number of GP Warrants, and the same number of GP Warrant Shares
issuable upon exercise of GP Warrants as are stated in the GP Warrant
Certificates theretofore issued. GP may, however, at any time, in its sole
discretion, make any change in the form of GP Warrant Certificate that it may
deem appropriate in view of any such change and that does not affect the
substance thereof, and any GP Warrant Certificates thereafter issued or
countersigned, whether in exchange or substitution for an outstanding GP Warrant
Certificate or otherwise, may be in the form as so changed.
5.5 In any case in which this Section 5 shall require that an adjustment in
the Exercise Price be made effective as of a record date for or other date
relating to a specified event, and in the case of an adjustment under Section
5.1(d), GP may elect to defer, until the occurrence of such event or, in the
case of the Spin-Off, the determination of the adjusted Exercise Price, issuing
to the Holder, if the Holder exercised GP Warrants after such record or other
date, the shares of GP Common Stock, if any, issuable upon such exercise over
and above the number of GP Warrant Shares, if any, issuable upon such exercise
on the basis of the Exercise Price in effect prior to such adjustment; provided,
however, that GP shall deliver to the Holder a due bill or other appropriate
instrument evidencing the Holder's right to receive such additional shares.
6. Definitions
6.1 For purpose of this GP Warrant Certificate, the following terms have
the following meanings:
"Current Market Price" on any date shall mean the average of the daily
closing prices of the GP Common Stock for the 20 consecutive trading days
immediately preceding the date in question, except that, for purposes of Section
5.1(d) only, the "Current Market Price" shall mean the average of the daily
closing prices of the GP Common Stock over the 20 consecutive trading days
commencing on the record date for the Spin-Off. The "NPDC Market Price" shall
mean the average of the daily closing prices of the Class A Common Stock of NPDC
(or any other security issued in the Spin-Off to the holder of one share of GP
Common Stock) over the 20 consecutive trading days commencing on the record date
for the Spin-Off. The closing price of the GP Common Stock or Class A Common
Stock of NPDC (or any other security issued in the Spin-Off to the holder of one
share of GP Common Stock) for each day shall be the last reported sales price
regular way of such stock or, if no such reported sale of such stock takes place
on such day, the closing bid price regular way of such stock, in either case on
the principal national securities exchange (including, for purposes hereof,
Nasdaq) on which the GP Common Stock or Class A Common Stock of NPDC (or any
other security issued in the Spin-Off to the holder of one share of GP Common
Stock), respectively, is listed or admitted to trading or, if such stock is not
listed or admitted to trading on any national securities exchange, the highest
reported closing bid price for such stock as furnished by the Nasdaq or a
similar organization if Nasdaq is no longer reporting such information. If on
any such date the GP Common Stock or Class A Common Stock of NPDC (or any other
security issued in the Spin-Off to the holder of one share of GP Common Stock),
as the case may be, is not listed or admitted to trading on any United States
national securities exchange and is not quoted by Nasdaq or any similar
organization, the fair value of a share of such stock on such date, as
determined in good faith by the Board of Directors of GP, whose determination
shall be conclusive absent manifest error, shall be used.
"Person" means an individual, a corporation, a partnership, a trust, a
limited liability company, an unincorporated organization, or a government
organization or an agency or political subdivision thereof.
"Marketable Securities" means securities of a class which are registered
under the Securities Act, whether or not such securities are actually registered
under the Securities Act, so long as such securities may be registered under the
Securities Act pursuant to currently exercisable demand registration rights.
7. Miscellaneous
7.1 The Holder of any GP Warrant shall not have, solely on account of such
status, any rights of a stockholder of GP, either at law or in equity, or to any
notice of meetings of stockholders or of any other proceedings of GP, except as
provided in this GP Warrant Certificate.
7.2 This GP Warrant Certificate shall be governed by and construed in
accordance with the laws of the State of New York.
7.3 GP stipulates that the remedies at law of the Holder in the event of
any default or threatened default by GP in the performance of or compliance with
any of the terms of this GP Warrant Certificate are not and will not be adequate
and that, to the fullest extent permitted by law, such terms may be specifically
enforced by a decree for the specific performance of any agreement contained
herein or by an injunction against a violation of any of the terms hereof or
otherwise. Time is of the essence in this GP Warrant Certificate.
7.4 This GP Warrant Certificate, the GP Warrants, and all other rights
evidenced hereby shall inure to the benefit of and be binding upon the permitted
successors and assigns of GP, the Holder, and (to the extent provided herein)
the holders of GP Warrant Shares issued pursuant hereto, and shall be
enforceable by any such Holder or holder of GP Warrant Shares.
7.5 If, in any action before any court or agency legally empowered to
enforce any provision contained herein, any provision hereof is found to be
unenforceable, then such provision shall be deemed modified to the extent
necessary to make it enforceable by such court or agency. If any such provision
is not enforceable as set forth in the preceding sentence, the unenforceability
of such provision shall not affect the other provisions of this GP Warrant
Certificate, but this GP Warrant Certificate shall be construed as if such
unenforceable provision had never been contained herein.
7.6 The headings of the Sections of this GP Warrant Certificate are for
convenience of reference only and shall not, for any purpose, be deemed a part
of this GP Warrant Certificate.
IN WITNESS WHEREOF, GP has caused this GP Warrant Certificate to be
duly executed by its officers thereunto duly authorized and its corporate seal
to be affixed hereon, as of this ______ day of ______, 200_.
GP STRATEGIES CORPORATION
By: __________________________________
Name:
Title:
Attest:
- ---------------------------------
Name:
Title: