Exhibit 10.3
STOCK EXCHANGE AGREEMENT
This STOCK EXCHANGE AGREEMENT (this "Agreement"), dated as of
January 19, 2006, by and between GP STRATEGIES CORPORATION, a Delaware
corporation ("GPX"), and JEROME I. FELDMAN ("Feldman").
WHEREAS, Feldman beneficially owns 142,174 shares of GPX's Common
Stock, par value $0.01 per share ("Common Stock"), and 568,750 shares of GPX's
Class B Capital Stock, par value $0.01 per share ("Class B Stock");
WHEREAS, GPX believes it would be in the best interests of GPX and its
stockholders if GPX were to restructure its capital structure into only one
class of common stock by repurchasing and/or exchanging upon satisfactory terms
and conditions and thereby retiring all of the outstanding shares of Class B
Stock owned by Feldman and the other holders thereof;
WHEREAS, GPX therefore approached Feldman to determine whether Feldman
would exchange the Class B Stock into Common Stock, at a rate of one share of
Class B Stock for one share of Common Stock;
WHEREAS, Feldman expressed his willingness to exchange the Class B
Stock into Common Stock, at a rate of one share of Class B Stock for one share
of Common Stock;
WHEREAS, in connection with the foregoing, a Special Committee of the
GPX Board of Directors (the "Special Committee") was formed that excluded, among
others, Feldman;
WHEREAS, the Special Committee and Feldman have negotiated on an
arms-length basis for the exchange of Class B Stock upon the terms and
conditions herein provided, and the Special Committee has determined that such
terms and conditions are in the best interests of GPX and its stockholders;
WHEREAS, Feldman desires to exchange the Class B Stock, and GPX desires
for Feldman to exchange the Class B Stock, upon the terms and conditions herein
provided;
NOW THEREFORE, in consideration of the mutual covenants, conditions and
agreements set forth herein, and for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Exchange of Class B Stock.
1.1 Subject to the terms and conditions and in reliance upon the
representations, warranties and covenants set forth herein, Feldman agrees to
exchange ("Exchange") all his shares of Class B Stock ("Shares Exchanged"),
pursuant to the terms of the Class B Stock, into Common Stock, at a rate of one
share of Class B Stock for one share of Common Stock ("New Shares"), for a price
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of $1.50 per Share Exchanged ("Exchange Incentive"). The aggregate price for the
Shares Exchanged to be paid by GPX to Feldman shall be $853,125 ("Exchange
Incentive Payment"). Following the Exchange, Feldman will beneficially own
710,924 shares of Common Stock and no shares of Class B Stock.
1.2 The closing of the Exchange (the "Closing") shall be held at the
offices of Latham & Watkins LLP, 885 Third Avenue, New York, New York 10022, at
10:00 A.M., local time on the date hereof.
1.3 At the Closing, Feldman shall deliver to GPX the certificate or
certificates representing the Shares Exchanged, accompanied by a stock power
endorsed in blank.
1.4 At the Closing, GPX shall pay an amount equal to the Exchange
Incentive Payment, by wire transfer of immediately available funds or by check,
to an account of Feldman previously furnished to GPX and shall deliver to
Feldman a certificate or certificates evidencing the New Shares.
2. Representations, Warranties and Covenants of Feldman. Feldman hereby
represents, warrants and covenants, as the case may be, to, and agrees with GPX,
that:
2.1 Authority. This Agreement has been duly executed and delivered
by Feldman and constitutes the valid and legally binding obligation of Feldman,
enforceable against him in accordance with its terms, subject, as to
enforceability, to bankruptcy, insolvency, reorganization, moratorium and other
similar laws of general applicability relating to or affecting creditors' rights
and to general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law).
2.2 Ownership of the Shares Exchanged. Except as provided for under
the Agreement, dated as of December 29, 1999, between Feldman and Martin M.
Pollak, Feldman is the record and beneficial owner of the Shares Exchanged, and
owns the Shares Exchanged free and clear of any lien and any other limitation or
restriction, and will transfer and deliver to GPX at the Closing valid title to
the Shares Exchanged, free and clear of any lien and any such other limitation
or restriction.
2.3 No Conflicts and Consents. The execution and delivery of this
Agreement by Feldman and the consummation of each of the transactions and the
performance of each of the obligations contemplated hereby do not (a) conflict
with or violate (whether with or without notice or a lapse of time or both) any
agreement to which he is a party or any law or order applicable to him; or (b)
require any consent, approval, authorization or permit of, action by, filing
with or notification to, any Governmental Entity (other than any filing required
under Section 13(a) or (d), 14, 15(d) or 16(a) of the Securities Exchange Act of
1934, as amended), in each case in a manner that could reasonably be expected to
materially hinder or impair the completion of any of the transactions
contemplated hereby or have a material adverse effect on the business,
properties, condition (financial or otherwise) or liabilities of Feldman. In
this Agreement, "Governmental Entity" shall mean any court, administrative
agency, commission or other governmental authority or instrumentality, whether
domestic (federal, state or local) or foreign.
2.4 Due Diligence; Access to Information and Counsel. Feldman has
the knowledge, sophistication and experience in business and financial matters
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so as to be capable of evaluating the merits and risks of the Exchange. Feldman
has been afforded adequate opportunity (i) to perform due diligence and ask such
questions as Feldman has deemed necessary of, and to receive answers from,
representatives of the Company concerning the operations and prospects of the
Company; (ii) to obtain such additional information that the Company possesses
or can acquire that Feldman deems necessary or appropriate to receive to form a
decision on whether to exchange the Shares Exchanged and enter into this
Agreement; (iii) to investigate and appraise the fair market value of the
Company and the Shares Exchanged; and (iv) to consult with counsel as Feldman
has deemed necessary in connection with the transactions contemplated in this
Agreement.
2.5 Independent Transaction. The decision by Feldman to enter into
this Agreement and to consummate the Exchange contemplated hereby has been made
independent of the transactions described under subsections (a), (b) and (c) of
Section 4.1 hereof.
2.6 Repayment of Indebtedness. Immediately following the Exchange,
Feldman shall apply the entire amount of the Exchange Incentive Payment to repay
indebtedness owed by Feldman to GPX.
3. Representations and Warranties of GPX. GPX hereby represents and
warrants to, and agrees with Feldman, that:
3.1 Existence and Power. GPX has been duly incorporated and is
validly existing and in good standing under the laws of the State of Delaware
and has all requisite corporate power and authority to execute and deliver this
Agreement and consummate the transactions and perform each of its obligations
contemplated hereby.
3.2 Authority. The execution and delivery of this Agreement by GPX,
the consummation by GPX of each of the transactions and the performance by GPX
of each of its obligations contemplated hereby have been duly and properly
authorized by all necessary corporate action on the part of GPX. This Agreement
has been duly executed and delivered by GPX and constitutes the valid and
legally binding obligation of GPX, enforceable against it in accordance with its
terms, subject, as to enforceability, to bankruptcy, insolvency, reorganization,
moratorium and other similar laws of general applicability relating to or
affecting creditors' rights and to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
3.3 No Conflict or Consents. The execution and delivery of this
Agreement by GPX and the consummation of each of the transactions and the
performance of each of the obligations contemplated hereby do not (a) conflict
with or violate (whether with or without notice or a lapse of time or both) its
organizational documents or any agreement to which it is a party or any law or
order applicable to it; or (b) require any consent, approval, authorization or
permit of, action by, filing with or notification to, any Governmental Entity
(other than any filing required under Section 13(a) or (d), 14, 15(d) or 16(a)
of the Securities Exchange Act of 1934, as amended), in each case in a manner
that could reasonably be expected to materially hinder or impair the completion
of any of the transactions contemplated hereby or have a material adverse effect
on the business, properties, condition (financial or otherwise) or liabilities
of GPX.
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4. Conditions to Closing. The respective obligations of GPX and Feldman
hereunder are subject to the accuracy of the representations and warranties
contained herein, and to each of the following additional terms and conditions:
4.1 Concurrent Transactions. At the Closing, (a) EGI-Fund (02-04)
Investors, L.L.C. ("EGI") shall have executed and delivered a Stock Repurchase
Agreement, dated the date hereof and in form and substance satisfactory to GPX,
and GPX shall have received an original copy thereof, duly executed by EGI with
respect to the sale by EGI to GPX of all of EGI's shares of Common Stock and
Class B Stock; (b) Bedford Oak Partners, L.P. ("Bedford") shall have executed
and delivered a Stock Repurchase Agreement, dated the date hereof and in form
and substance satisfactory to GPX, and GPX shall have received an original copy
thereof, duly executed by Bedford with respect to the sale by Bedford to GPX of
all of Bedford's shares of Class B Stock and all but 1,100,000 shares of
Bedford's Common Stock; and (c) Martin M. Pollak ("Pollak") shall have executed
and delivered a Stock Exchange Agreement, dated the date hereof and in form and
substance satisfactory to GPX, and GPX shall have received an original copy
thereof, duly executed by Pollak with respect to the exchange by Pollak of all
his shares of Class B Stock at a rate of one share of Class B Stock for one
share of Common Stock. Taken together, this Agreement and the agreements
described in (a), (b) and (c) of this subsection shall have the effect of
eliminating all outstanding shares of Class B Stock.
5. Miscellaneous.
5.1 Notices. All notices, requests and other communications to any
party hereunder shall be in writing (including facsimile transmission) and shall
be given,
If to GPX, to: GP Strategies Corporation
777 Westchester Avenue
White Plains, New York 10604
Attn: Andrea Kantor, Executive Vice President
and General Counsel
Fax: (914) 249-9745
If to Feldman, to:
Jerome I. Feldman
c/o GP Strategies Corporation
777 Westchester Avenue
White Plains, New York 10604
Fax: (914) 249-9745
All such notices, requests and other communications shall be deemed received on
the date of receipt by the recipient thereof. By notice given in accordance with
this Section 5.1 to the other party, any party may change its/his address for
the receipt of notices under this Agreement.
5.2 Amendments and Waivers. Any provision of this Agreement may be
amended or waived if, but only if, such amendment or waiver is in writing and is
signed, in the case of an amendment, by each party to this Agreement, or in the
case of a waiver, by the party against whom the waiver is to be effective. No
failure or delay by any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.
5.3 Agreement to Cooperate; Further Assurances. Subject to the terms
and conditions of this Agreement, each of the parties shall use all reasonable
efforts to take, or cause to be taken, all action and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement, including providing information and using reasonable efforts to
obtain all necessary or appropriate waivers, consents and approvals, and
effecting all necessary registrations and filings. In case at any time after the
Closing any further action is necessary or desirable for the Exchange or
otherwise to carry out the purposes of this Agreement, the parties shall execute
such further documents and shall take such further action as shall be necessary
or desirable to effect such purchase and to otherwise carry out the purposes of
this Agreement, in each case to the extent not inconsistent with applicable law.
5.4 Expenses. Each of GPX and Feldman shall pay its/his own expenses
incurred in connection with the transactions contemplated hereby.
5.5 Successors and Assigns. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.
5.6 Governing Law. This Agreement shall be governed by and construed
in accordance with the law of the State of New York, without reference to its
conflict of laws principles.
5.7 Public Announcements. Each party agrees that, except as may be
required by applicable law or any listing agreement with any national securities
exchange, such party will not issue any press release or make any public
statement with respect to this Agreement or the transactions contemplated hereby
without obtaining the prior consent of the other party.
5.8 Section Headings. The captions and headings appearing at the
beginning of the various sections of this Agreement are for convenience of
reference only and shall not be given any effect whatsoever in the construction
or interpretation of this Agreement.
5.9 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Any party may execute
this Agreement by the delivery of a facsimile signature, which signature shall
have the same force and effect as an original signature. Any party that delivers
a facsimile signature shall promptly thereafter deliver an originally executed
signature to the other party; provided, however, that the failure to deliver an
original signature page shall not affect the validity of any signature delivered
by facsimile.
[Signature Page Follows]
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed as of the date first written above.
GP STRATEGIES CORPORATION
Name: Andrea D. Kantor
Title: Executive Vice President and General
Counsel
JEROME I. FELDMAN
Jerome I. Feldman
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