Exhibit 10.1
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is made October 21,
2003 by and between GP Strategies Corporation, a Delaware corporation
("Purchaser"), and ManTech International Corporation, a Delaware corporation
("Seller").
The parties agree as follows:
1. Purchase and Sale. Purchaser agrees to purchase from Seller, and
Seller agrees to sell to Purchaser, (a) 3,426,699 shares (the "GSE Shares") of
common stock of GSE Systems, Inc., a Delaware corporation ("GSE"), and (b) a
subordinated promissory note (the "GSE Note", together with the GSE Shares, the
"GSE Securities") of GSE payable to the order of Seller in the original
principal amount of $1,000,000, of which $650,000 shall be outstanding when it
is sold to Purchaser, for an aggregate purchase price (the "Purchase Price")
equal to the sum of $5,250,955.
2. Payment of Purchase Price.Purchaser shall pay the Purchase Price by
delivery at the Closing (as defined below) of a promissory note of Purchaser
substantially in the form attached as Exhibit A (the "GPX Note").
3. Purchaser's Representations. As a material inducement to Seller to
enter into and perform its obligations under this Agreement, Purchaser
represents and warrants to Seller as follows:
(a) Organization and Good Standing. Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of
the State of Delaware, and is duly qualified to do business and is in
good standing in each jurisdiction in which its ownership or use of its
assets requires such qualification.
(b) Authorization. The execution and delivery of this
Agreement and the GPX Note, and the performance of the transactions
contemplated hereby, (i) have been duly authorized and approved by all
necessary corporate action of Purchaser, including, but not limited to,
approval by the directors of Purchaser in accordance with Purchaser's
governing documents, and (ii) do not and will not (A) conflict with, or
violate any provision of, any law having applicability to Purchaser or
any of its assets or any provision of the certificate of incorporation
or bylaws of Purchaser, (B) subject to obtaining the consent of
Purchaser's lenders, conflict with, or result in any breach of, or
constitute a default under, any agreement to which Purchaser is a party
or by which it or any of its assets may be bound, or (C) subject to
obtaining the consent of Purchaser's lenders, result in or require the
creation, imposition or acceleration of any indebtedness, or of any
encumbrance of any nature upon, or with respect to, Purchaser or any of
its assets now owned.
(c) Binding Obligation. This Agreement, the GPX Note and each
document to be executed by Purchaser pursuant hereto constitute valid
and binding obligations of Purchaser, enforceable in accordance with
their terms, except to the extent that such enforcement may be limited
by applicable bankruptcy, reorganization, insolvency, moratorium or
other laws of general application relating to or affecting the
enforcement of creditors' rights as from time to time in effect.
(d) Finders or Brokers. Purchaser is not party to any
agreement with any agent, broker, investment banker or other third
party, or in any way obligated to any agent, broker, investment banker
or other third party, for any commissions or fees in connection with
the origin, negotiation, execution or performance of this Agreement or
any of the transactions contemplated herein.
(e) Investment Representations.
(i) Purchaser is aware of the business
affairs and financial condition of GSE and has acquired
sufficient information about GSE to reach an informed and
knowledgeable decision to acquire the GSE Securities.
Purchaser is purchasing the GSE Securities for investment and
for Purchaser's own account only and not with a view to, or
for resale in connection with, any "distribution" thereof
within the meaning of the Securities Act of 1933, as amended
("Securities Act").
(ii) Purchaser understands that the GSE
Shares have not been registered under the Securities Act and
are being sold to Purchaser in reliance upon the exemption
from such registration provided by Section 4(1) of the
Securities Act. Purchaser hereby confirms that it has been
informed that the GSE Shares are restricted securities under
the Securities Act and may not be resold or transferred unless
the GSE Shares are first registered under the Federal
securities laws and any applicable state securities law or an
exemption from such registration is available.
(iii) Purchaser further acknowledges and
understands that GSE is under no obligation to register under
the Securities Act the resale of the GSE Shares. Purchaser
understands that the certificate(s) evidencing the GSE Shares
will be imprinted with a legend substantially in the form as
set forth below which prohibits the transfer of the GSE Shares
unless the sale of such shares has been so registered or such
registration is not required in the opinion of counsel
satisfactory to the GSE.
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH,
THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION
MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE
SECURITIES ACT OF 1933."
4. Seller's Representations. As a material inducement to Purchaser to
enter into and perform its obligations under this Agreement, Seller represents
and warrants to Purchaser as follows:
(a) Organization and Good Standing. Seller is a corporation
duly organized, validly existing and in good standing under the laws of
the State of Delaware, and is duly qualified to do business and is in
good standing in each jurisdiction in which its ownership or use of its
assets requires such qualification.
(b) Authorization. The execution and delivery of this
Agreement and the performance of the transactions contemplated hereby
(i) have been duly authorized and approved by all necessary corporate
action of Seller, including, but not limited to, approval by the
directors of Seller in accordance with Seller's governing documents,
and (ii) do not and will not (A) conflict with, or violate any
provision of, any law having applicability to Seller or any of its
assets or any provision of the certificate of incorporation or bylaws
of Seller, (B) conflict with, or result in any breach of, or constitute
a default under, the GSE Note or any agreement to which Seller is a
party or by which it or any of its assets may be bound, or (C) result
in or require the creation, imposition or acceleration of any
indebtedness, or of any encumbrance of any nature upon, or with respect
to, Seller or any assets now owned.
(c) Title. Seller beneficially owns and has the unrestricted
right (other than as such right may be restricted by the Securities Act
or any applicable state securities laws) to transfer the GSE
Securities, subject to obtaining a lien release from Seller's lenders,
which shall be obtained at or prior to Closing, free and clear of all
liens, security interests, pledges, stockholder agreements, voting
trusts, claims, charges and other encumbrances (collectively, "Liens").
Upon completion of the Closing, Purchaser will be the legal and
beneficial owner of the GSE Shares and GSE Note, free and clear of all
Liens.
(d) Binding Obligation. This Agreement and each document to be
executed by Seller pursuant hereto constitute a valid and binding
obligation of Seller, enforceable in accordance with their terms except
to the extent that such enforcement may be limited by applicable
bankruptcy, reorganization, insolvency, moratorium or other laws of
general application relating to or affecting the enforcement of
creditors' rights as from time to time in effect.
(e) GSE Shares and GSE Note. Each of the GSE Shares is validly
authorized, validly issued, fully paid, and nonassessable, and has not
been issued and is not owned or held in violation of any preemptive
right of stockholders. The GSE Note constitutes, and after its transfer
to Purchaser will constitute, a valid and binding obligation of GSE,
enforceable in accordance with its terms, except to the extent that
such enforcement may be limited by (i) applicable bankruptcy,
reorganization, insolvency, moratorium or other laws of general
application relating to or affecting the enforcement of creditors'
rights as from time to time in effect, (ii) any GSE lender approvals or
requirements. The outstanding principal amount of the GSE Note
immediately after the Closing will be $650,000.
(f) Finders or Brokers. Seller is not party to any agreement
with any agent, broker, investment banker or other third party, or in
any way obligated to any agent, broker, investment banker or other
third party, for any commissions or fees in connection with the origin,
negotiation, execution or performance of this Agreement or any of the
transactions contemplated herein.
(g) Investment Representations.
(i) Seller is aware of the business affairs
and financial condition of Purchaser and has acquired
sufficient information about Purchaser to reach an informed
and knowledgeable decision to acquire the GPX Note. Seller is
purchasing the GPX Note for investment and for Seller's own
account only and not with a view to, or for resale in
connection with, any "distribution" thereof within the meaning
of the Securities Act of 1933, as amended ("Securities Act").
(ii) Seller understands that the GPX Note
has not been registered under the Securities Act and is being
sold to Seller in reliance upon the exemption from such
registration provided by Section 4(2) of the Securities Act.
Seller hereby confirms that it has been informed that the GPX
Note and the shares of common stock of Purchaser issuable upon
conversion of the GPX Note (the "GPX Shares") are restricted
securities under the Securities Act and may not be resold or
transferred unless the GPX Note and GPX Shares are first
registered under the Federal securities laws and any
applicable state securities laws or an exemption from such
registration is available.
(iii) Seller further acknowledges and
understands that Purchaser is under no obligation to register
under the Securities Act the resale of the GPX Note or, except
as set forth in the GPX Note, the GPX Shares. Seller
understands that the GPX Note and the certificate(s)
evidencing the GPX Shares will be imprinted with a legend
substantially in the form as set forth below which prohibits
the transfer of the GPX Note and the GPX Shares unless the
sale of such securities has been so registered or such
registration is not required in the reasonable opinion of
counsel reasonably satisfactory to the Purchaser.
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN
CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH
SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS
NOT REQUIRED UNDER THE SECURITIES ACT OF 1933."
5. Additional Covenants.
(a) At the Closing, Seller and Purchaser agree to enter into an
agreement substantially in the form set forth as Exhibit -------- B. -
(b) Except as required by law or stock exchange regulation, neither
Purchaser nor Seller may issue any public release announcing or describing the
transaction contemplated by this Agreement without the other's review and
approval of the release or announcement, provided, however, in no event shall
such approval be unreasonably withheld, delayed or conditioned.
(c) Seller agrees (and agrees to cause its affiliates) during the
three-year period commencing on the Closing Date (as hereinafter defined) not to
engage or have any interest, directly or indirectly, in the nuclear simulation
or related training business (a "Competing Business").
(d) Notwithstanding Section 5(c), Seller shall have the right to
acquire a company (the "Acquired Company") with a Competing Business, provided
that the revenues of the Competing Business constituted for the prior fiscal
year, and constitute (on an annualized basis)at the time of such acquisition,
less than the lesser of (i) 10% of the revenues of the Acquired Company and (ii)
$20,000,000. If Seller acquires or proposes to acquire such an Acquired Company,
the Purchaser shall have the one-time right and option to purchase the Competing
Business, either from Seller or in place of Seller, as long as Purchaser
provides Seller written notice thereof within thirty (30) days of Seller's
public announcement of its intent to purchase the Acquired Company. If Seller
does not receive notice from Purchaser of its option to purchase the Competing
Business within the 30-day notice period, then Purchaser's one-time option
hereunder expires and Seller may hold or dispose of the Competing Business in
its sole and absolute discretion. Purchaser further agrees that in the event it
exercises its one-time option to purchase the Competing Business, Purchaser
shall complete its purchase of the Competing Business within sixty (60) days of
its election to purchase. Notwithstanding the foregoing, in the reasonable
option of Seller, in the event the exercise of Purchaser's option to purchase
and/or the resulting completion of the sale of the Competing Business in any way
disrupts or delays Seller's purchase and/or closing of the Acquired Company,
upon written notice from Seller, Purchaser shall withdraw its option to purchase
the Competing Business until after Seller publicly announces its completion of
the purchase of the Acquired Company. Seller shall then have 30 days from the
Seller's public announcement of its completed purchase of the Acquired Company
to exercise its option to purchase.
(e) The acquisition by Purchaser of the Competing Business pursuant to
its option under Section 5(d) shall be on the same terms and conditions as
Seller's acquisition of the Acquired Company, provided, however, that the
purchase price of the Competing Business shall be equal to the product of (i)
the purchase price paid or to be paid by Seller for the Acquired Company
(including the Competing Business) and (ii) the percentage of the Acquired
Company's revenues for the prior fiscal year that was generated by the Competing
Business. Notwithstanding the foregoing, the purchase price shall also be
reasonably adjusted for balance sheet differences.
(f) Purchaser and Seller agree to execute and deliver or cause to be
executed and delivered such additional instruments or documents as the other
party hereto may reasonably request for the purpose of carrying out the intent
of this Agreement.
6. Conditions Precedent.
(a) The obligations of Seller hereunder shall be subject to Seller
having the right to convert the 39,000 shares of Series A Convertible Preferred
Stock of GSE owned by Seller into 2,511,915 shares of common stock of GSE.
(b) The obligations of Purchaser hereunder shall be subject to its
receipt of the consent of its lenders to the transaction contemplated hereby,
and the appointment by the Board of GSE of the additional nominees of Purchaser
constituting half of the total number of directors of GSE then in office.
(c) The obligations of Seller hereunder shall be subject to the
receipt of the consent of its lenders to the transaction contemplated hereby.
7. Closing.
(a) The closing of the transactions (the "Closing") contemplated under
this Agreement shall be held on the later to occur of (i) satisfaction of the
conditions precedent as set forth in Section 6 herein and (ii) October 21, 2003
(the "Closing Date"), at such time and place as the parties shall agree. (b) At
Closing, Seller shall deliver to Purchaser:
(i) stock certificates representing the GSE Shares, properly
endorsed for transfer to, or accompanied by a duly executed stock
power in favor of, Purchaser;
(ii) the GSE Note accompanied by duly executed assignment
documents, if applicable; and (iii) an executed copy of the
agreement substantially in the form set forth as Exhibit B.
(c) At Closing, Purchaser shall deliver to Seller: (i) the duly
executed GPX Note; and (ii) an executed copy of the agreement
substantially in the form set forth as Exhibit B.
(d) If the Closing shall not have occurred by November 15, 2003,
either party may terminate this Agreement by notice to the other. Upon any
termination of this Agreement pursuant to this Section 7(d), this Agreement
shall become wholly void and of no further force or effect and neither of the
parties shall have any liability or obligation to the other arising out of this
Agreement except for any liability arising from a party's breach of this
Agreement prior to such termination.
8. Indemnification.
(a) Seller covenants and agrees to indemnify and hold harmless Purchaser
and its directors, officers, employees and agents from and against all losses,
damages, costs and expenses (including, without limitation, reasonable
attorneys' fees) arising out of or relating to any claims incurred or sustained
by Purchaser on account of any breach of any representation, warranty, covenant,
or agreement of Seller contained in this Agreement.
(b) Purchaser covenants and agrees to indemnify and hold harmless Seller
and its directors, officers, employees and agents from and against all losses,
damages, costs and expenses (including, without limitation, reasonable
attorneys' fees) arising from or relating to any claims incurred or sustained by
Seller on account of any breach of any representation, warranty, covenant or
agreement of Purchaser contained in this Agreement.
9. Survival. The representations, warranties, covenants and agreements
in this Agreement together with the indemnification provisions related thereto
shall survive the Closing until all obligations under the GPX Note have been
satisfied in full by repayment and/or conversion into GPX Stock, at which time
they shall terminate and no claim shall thereafter be brought in respect of
them; provided, however, that (a) such termination shall not affect any claim
for breach of any representation or warranty if written notice thereof, in
reasonable detail, has been given to the breaching party prior to such
termination date (in such case, the survival period for the representation and
warranty shall continue until the claim is fully resolved) and (b) the
representations and warranties contained in Sections 4(c) and 4(e) together with
the indemnification provisions related thereto shall survive the Closing without
limitation and shall not terminate.
10. General Provisions.
(a) This Agreement shall be governed by the laws of the State of New York,
without giving effect to conflict of law provisions. This Agreement represents
the entire agreement between the parties with respect to the purchase of the GSE
Securities by Purchaser and may only be modified or amended in writing signed by
both parties.
(b) Any notice, demand or request required or permitted to be given by
either Seller or Purchaser pursuant to the terms of this Agreement shall be in
writing and shall be deemed given when delivered personally or via nationally
recognized overnight carrier at the address of the party set forth below or such
other address as either party may request by notifying the other party in
writing.
If to Purchaser, addressed to:
GP Strategies Corporation
777 Westchester Avenue
White Plains, NY 10604
Attention: General Counsel
If to Seller, addressed to:
ManTech International Corporation
12015 Lee Jackson Highway
Fairfax, Virginia 22033-3300
Attention: Office of General Counsel
(c) The rights and obligations of each party under this Agreement may only
be assigned with the prior written consent of the other and any purported
transfer otherwise shall be null and void. Notwithstanding anything stated
herein to the contrary, Purchaser agrees that all of Seller's right, title and
interest in and to this Agreement has been, or will be collaterally assigned to
its current and future lenders (currently Citizen's Bank of Pennsylvania, acting
in its capacity as the administrative agent for the lender parties) which are
parties to that certain Business Loan and Security Agreement dated December 17,
2001 (as the same has been and may be amended, modified, substituted or replaced
from time to time) and Purchaser will continue to be bound by all the terms and
provisions of this Agreement as it may relate to (or be enforced by) Seller's
lenders as successors and assigns hereunder.
(d) Either party's failure to enforce any provision or provisions of this
Agreement shall not in any way be construed as a waiver of any such provision or
provisions, nor prevent that party thereafter from enforcing each and every
other provision of this Agreement. The rights granted to both parties herein are
cumulative and the assertion of a remedy shall not constitute a waiver of either
party's right to assert all other legal remedies available to it under the
circumstances.
(e) Except as provided in Section 8, nothing herein contained will be
deemed to create any third party beneficiaries or confer any benefit or rights
on or to any person not a party hereto, and no person not a party hereto shall
be entitled to enforce any provisions hereof or exercise any rights hereto.
(f) Purchaser and Seller each acknowledges that it has had the opportunity
to obtain the advice of experienced counsel of its own choosing in connection
with the negotiation and execution of this Agreement and to confer with such
counsel with respect to all matters contained herein and that this Agreement,
and any related documents or agreements, will not be construed against any one
party merely because that party may have caused it to be prepared.
(g) This Agreement may be executed by facsimile signature and in multiple
counterparts, each to be an original and both of which taken together shall
constitute one and the same document.
(h) If any restriction contained in Section 5(c) shall be deemed to be
invalid, illegal, or unenforceable by reason of the extent, duration, or
geographical scope thereof, or otherwise, then the court making such
determination shall have the right to reduce such extent, duration, geographical
scope, or other provisions hereof, and in its reduced form such restriction
shall then be enforceable in the manner contemplated hereby. If any clause,
provision or section of this Agreement other than Section 5(c) shall be held
illegal or invalid by any court, the illegality or invalidity of such clause,
provision or section shall not affect the remainder of this Agreement which
shall be construed and enforced as if such illegal or invalid clause, provision
or section had not been contained in this Agreement. If any agreement or
obligation contained in this Agreement is held to be in violation of law, then
such agreement or obligation shall be deemed to be the agreement or obligation
of the respective party hereto only to the extent permitted by law.
(i) The descriptive headings of the several sections of this Agreement are
inserted for convenience only and shall not be deemed to affect the meaning or
construction of any of the provisions hereof.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first set forth above.
PURCHASER: SELLER:
GP Strategies Corporation ManTech International Corporation
By: /s/ Scott N. Greenberg By: /s/ John A. Moore, Jr.
Name: Scott N. Greenberg Name: John A. Moore, Jr.
Title: President and Chief Title: Executive Vice President
Financial Officer
Witness/Attest Witness/Attest
/s/ Andrea D. Kantor
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