-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, S6Ll7HyO24ZRVTd5gY4oHcplo4ZW4PnIlOMPIvvony1RvQ4c97fh8o7MV8oJ/VJy pO00zecSNVJLJ+ephZoKgw== 0000070415-06-000004.txt : 20060125 0000070415-06-000004.hdr.sgml : 20060125 20060125112819 ACCESSION NUMBER: 0000070415-06-000004 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20050119 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Changes in Control of Registrant ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060125 DATE AS OF CHANGE: 20060125 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GP STRATEGIES CORP CENTRAL INDEX KEY: 0000070415 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-EDUCATIONAL SERVICES [8200] IRS NUMBER: 131926739 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-07234 FILM NUMBER: 06548463 BUSINESS ADDRESS: STREET 1: 777 WESTCHESTER AVENUE STREET 2: FOURTH FLOOR CITY: WHITE PLAINS STATE: NY ZIP: 10604 BUSINESS PHONE: 914-249-9700 MAIL ADDRESS: STREET 1: 777 WESTCHESTER AVENUE STREET 2: FOURTH FLOOR CITY: WHITE PLAINS STATE: NY ZIP: 10604 FORMER COMPANY: FORMER CONFORMED NAME: NATIONAL PATENT DEVELOPMENT CORP DATE OF NAME CHANGE: 19920703 8-K 1 gp8k12506.txt GP STRATEGIES FORM 8-K DATED JANUARY 25, 2006 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported) January 19, 2006 GP Strategies Corporation - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in Its Charter) Delaware - -------------------------------------------------------------------------------- (State or Other Jurisdiction of Incorporation) 1-7234 13-1926739 - -------------------------------------------------------------------------------- (Commission File Number) (IRS Employer Identification No.) 777 Westchester Avenue, White Plains, NY 10604 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) (914) 249-9700 - -------------------------------------------------------------------------------- (Registrant's Telephone Number, Including Area Code) - -------------------------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 40.13e-4(c)) Item 1.01 Entry into a Material Definitive Agreement. On January 19, 2006, GP Strategies Corporation (the "Company") entered into the following agreements, which collectively had the effect of restructuring the Company's capital stock and eliminating all outstanding shares of the Company's supervoting Class B Capital Stock, par value $0.01 per share ("Class B Stock"): (a) Stock Repurchase Agreement, by and between the Company and EGI-Fund (02-04) Investors, L.L.C., a Delaware limited liability company ("EGI") (the "EGI Agreement"); (b) Stock Repurchase Agreement, by and between the Company and Bedford Oak Partners, L.P., a Delaware limited partnership ("Bedford") (the "Bedford Agreement"); (c) Stock Exchange Agreement, by and between the Company and Jerome I. Feldman ("Feldman") (the "Feldman Agreement"); and (d) Stock Exchange Agreement, by and between the Company and Martin M. Pollak ("Pollak") (the "Pollak Agreement" and, together with the EGI Agreement, the Bedford Agreement and the Feldman Agreement, the "Agreements"). The repurchase transactions described in (a) and (b) above and the exchange transactions described in (c) and (d) above are collectively referred to as the "Transactions." The Transactions were negotiated and approved by a Special Committee of the Board of Directors (the "Board"). The Company consummated the Transactions on January 19, 2006. Under the EGI Agreement, the Company agreed to purchase from EGI (i) 1,090,000 shares of the Company's Common Stock, par value $0.01 per share ("Common Stock") for a price per share equal to $6.80; and (ii) 300,000 shares of Class B Stock for a price per share equal to $8.30. The aggregate purchase price paid by the Company to EGI was $9,902,000. The foregoing description of the EGI Agreement is qualified in its entirety by reference to the text of the EGI Agreement, which is attached hereto as Exhibit 10.1 and is incorporated herein by reference. Under the Bedford Agreement, the Company agreed to purchase from Bedford, (i) 1,031,500 shares of Common Stock for a price per share equal to $6.80; and (ii) 300,000 shares of Class B Stock for a price per share equal to $8.30. The aggregate purchase price paid by the Company to Bedford was $9,504,200. Harvey Eisen, Chairman of the Board, is deemed to have beneficial ownership of the shares owned by Bedford by virtue of his position as managing member of Bedford Oak Advisors, LLC, the investment manager of Bedford. The foregoing description of the Bedford Agreement is qualified in its entirety by reference to the text of the Bedford Agreement, which is attached hereto as Exhibit 10.2 and is incorporated herein by reference. Under the Feldman Agreement, Feldman agreed to exchange 568,750 shares of Class B Stock into Common Stock, at a rate of one share of Class B Stock for one share of Common Stock, for a price of $1.50 per share exchanged. The aggregate price for the shares exchanged paid by the Company to Feldman was $853,125. Pursuant to the Feldman Agreement, Feldman applied the entire amount of $853,125 toward repayment of indebtedness owed by him to the Company. Feldman is Chairman of the Executive Committee of the Company. The foregoing description of the Feldman Agreement is qualified in its entirety by reference to the text of the Feldman Agreement, which is attached hereto as Exhibit 10.3 and is incorporated herein by reference. 1 Under the Pollak Agreement, Pollak agreed to exchange 31,250 shares of Class B Stock into Common Stock, at a rate of one share of Class B Stock for one share of Common Stock, for a price of $1.50 per share exchanged. The aggregate price for the shares exchanged paid by the Company to Pollak was $46,875. The foregoing description of the Pollak Agreement is qualified in its entirety by reference to the text of the Pollak Agreement, which is attached hereto as Exhibit 10.4 and is incorporated herein by reference. Taken together, the Agreements resulted in the Company repurchasing 2,121,500 shares of its Common Stock, repurchasing 600,000 shares of its Class B Stock, and exchanging 600,000 shares of its Class B Stock into 600,000 shares of Common Stock, for an aggregate price of $20,306,200. In connection with the Agreements and the consummation of the Transactions, on January 19, 2006, General Physics Corporation, a Delaware corporation, SkillRight, Inc., a Delaware corporation, GSE Systems, Inc., a Delaware corporation, GSE Power Systems, Inc., a Delaware corporation, and MSHI, Inc., a Virginia corporation (collectively, the "Borrowers"), entered into the Fourth Amendment to Financing and Security Agreement (the "Bank Amendment") with Wachovia Bank, National Association (the "Lender"). Pursuant to the Bank Amendment, the Borrowers and the Lender agreed to amend certain terms of the underlying Financing and Security Agreement, dated August 13, 2003, as amended and modified, to, among other things, (a) permit the Borrowers to provide cash to the Company to fund the Transactions and repurchase up to $5 million of additional shares of Common Stock ("Public Buyback"); and (b) extend the revolving credit expiration date for General Physics Corporation and SkillRight, Inc. from August 12, 2006 to August 12, 2007. The foregoing description of the Bank Amendment is qualified in its entirety by reference to the text of the Bank Amendment, which is attached hereto as Exhibit 10.5 and is incorporated herein by reference. Item 5.01. Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers. Pursuant to the EGI agreement, on January 19, 2006, Matthew Zell (the designee of EGI) and Scott R. Peppet resigned from the Board. The Company expects to initiate an independent director search to fill the vacant seats. In addition, Marshall S. Geller has been appointed to the Company's Audit Committee. The Company will reconstitute its Board and committees as necessary to comply with rules promulgated by the Securities and Exchange Commission and the New York Stock Exchange. Item 8.01. Other Events. On January 19, 2006, the Company authorized the Public Buyback from time to time in the open market, subject to prevailing business and market conditions and other factors. In connection with eliminating all its outstanding shares of Class B Stock, the Company expects to seek stockholder approval to amend its Certificate of Incorporation to eliminate the authorized Class B Stock. 2 Item 9.01 Financial Statements and Exhibits (d) Exhibits. Exhibit Number Description of Exhibit 10.1 Stock Repurchase Agreement, dated January 19, 2006, by and between GP Strategies Corporation and EGI-Fund (02-04) Investors, L.L.C. 10.2 Stock Repurchase Agreement, dated January 19, 2006, by and between GP Strategies Corporation and Bedford Oak Partners, L.P. 10.3 Stock Exchange Agreement, dated January 19, 2006, by and between GP Strategies Corporation and Jerome I. Feldman. 10.4 Stock Exchange Agreement, dated January 19, 2006, by and between GP Strategies Corporation and Martin M. Pollak. 10.5 Fourth Amendment to Financing and Security Agreement, dated January 19, 2006, by General Physics Corporation, Skillright, Inc., GSE Systems, Inc., GSE Power Systems, Inc., MSHI, Inc., and Wachovia Bank, National Association. 3 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. GP Strategies Corporation Date: January 25, 2006 Andrea D. Kantor Executive Vice President and General Counsel EXHIBIT INDEX Exhibit Number Description of Exhibit 10.1 Stock Repurchase Agreement, dated January 19, 2006, by and between GP Strategies Corporation and EGI-Fund (02-04) Investors, L.L.C. 10.2 Stock Repurchase Agreement, dated January 19, 2006, by and between GP Strategies Corporation and Bedford Oak Partners, L.P. 10.3 Stock Exchange Agreement, dated January 19, 2006, by and between GP Strategies Corporation and Jerome I. Feldman. 10.4 Stock Exchange Agreement, dated January 19, 2006, by and between GP Strategies Corporation and Martin M. Pollak. 10.5 Fourth Amendment to Financing and Security Agreement, dated January 19, 2006, by General Physics Corporation, Skillright, Inc., GSE Systems, Inc., GSE Power Systems, Inc., MSHI, Inc., and Wachovia Bank, National Association. 4 EX-10 2 ex101.txt STOCK PURCHASE AGEEMENT BETWEEN THE REGISTRANT AND EGI-FUND INVESTORS, L.L.C. Exhibit 10.1 STOCK REPURCHASE AGREEMENT This STOCK REPURCHASE AGREEMENT (this "Agreement"), dated as of --------- January 19, 2006, by and between GP STRATEGIES CORPORATION, a Delaware corporation ("GPX"), and EGI-FUND (02-04) INVESTORS, L.L.C., a Delaware limited liability company ("EGI"). WHEREAS, EGI owns 1,090,000 shares of GPX's Common Stock, par value $0.01 per share ("Common Stock"), and 300,000 shares of GPX's Class B Capital Stock, par value $0.01 per share ("Class B Stock" and together with Common Stock, the "Shares"); 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 EGI and the other holders thereof; WHEREAS, GPX therefore approached EGI to determine whether EGI would sell the Class B Stock to GPX; WHEREAS, EGI expressed its willingness to sell the Class B Stock to GPX provided GPX also purchased from EGI all of the 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, Scott R. Peppet ("Peppet") and EGI's director designee Matthew Zell ("Zell"); WHEREAS, the Special Committee and EGI have negotiated on an arms-length basis for the sale and purchase of the Shares 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, EGI desires to sell to GPX, and GPX desires to purchase from EGI, all of the Shares upon the terms and conditions herein provided; NOW THEREFORE, in consideration of the foregoing and 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. Purchase of Shares. 1.1 Subject to the terms and conditions and in reliance upon the representations and warranties set forth herein, EGI agrees to sell to GPX, and GPX agrees to purchase from EGI, (a) the 1,090,000 shares of Common Stock owned by EGI for a price per share equal to $6.80; and (b) the 300,000 shares of Class B Stock 1 owned by EGI for a price per share equal to $8.30. The aggregate purchase price for the Shares to be paid by GPX to EGI shall be $9,902,000 ("Purchase Price"). Following the sale by EGI to GPX, EGI will no longer own any shares of Common Stock or Class B Stock. 1.2 The closing of the purchase and sale of the Shares (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, EGI shall deliver to GPX the certificate or certificates representing the Shares, accompanied by a stock power endorsed in blank. 1.4 At the Closing, GPX shall pay an amount equal to the Purchase Price, by wire transfer of immediately available funds, to an account of EGI previously furnished to GPX. 2. Representations and Warranties of EGI. EGI hereby represents and warrants to, and agrees with GPX, that: 2.1 Existence and Power. EGI has been duly organized and is validly existing and in good standing under the laws of the State of Delaware and has all requisite limited liability company power and authority to execute and deliver this Agreement and consummate the transactions and perform each of its obligations contemplated hereby. 2.2 Authority. The execution and delivery of this Agreement by EGI, the consummation by EGI of each of the transactions and the performance by EGI of each of its obligations contemplated hereby have been duly and properly authorized by all necessary action on the part of EGI. This Agreement has been duly executed and delivered by EGI and constitutes the valid and legally binding obligation of EGI, 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). 2.3 Ownership of the Shares. EGI is the record and beneficial owner of the Shares, and owns the Shares 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, free and clear of any lien and any such other limitation or restriction. 2.4 No Conflicts and Consents. The execution and delivery of this Agreement by EGI 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 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 2.5 Due Diligence; Access to Information. EGI has the knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the sale of the Shares. EGI has been afforded adequate opportunity (i) to perform due diligence and ask such questions as EGI 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 EGI deems necessary or appropriate to receive to form a decision on whether to sell the Shares and enter into this Agreement; and (iii) to investigate and appraise the fair market value of the Company and the Shares. 2.6 Independent Transaction. The decision by EGI to enter into this Agreement and to sell the Shares contemplated hereby has been made independent of the transactions described under subsections (a), (b) and (c) of Section 4.1 hereof. 3. Representations and Warranties of GPX. GPX hereby represents and warrants to, and agrees with EGI, 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). 4. Conditions to Closing. The respective obligations of GPX and EGI 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) Bedford Oak Partners, L.P. ("Bedford") shall have executed and delivered a Stock Repurchase Agreement, 3 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, at prices per share no greater than the prices per share specified in Section 1.1 hereof; (b) Jerome I. Feldman ("Feldman") 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 Feldman with respect to the exchange by Feldman of all his shares of Class B Stock at a rate of one share of Class B Stock for one share of 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. 4.2 Board of Directors Resignations. At the Closing, EGI shall cause to be delivered the resignations of Messrs. Peppet and Zell, each a member of the Board of Directors of GPX. The resignations of Messrs. Peppet and Zell shall be effective immediately upon delivery, but shall not affect in any way the rights and privileges of each existing through the Closing. 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 EGI, to: EGI-Fund (02-04) Investors, L.L.C. Two North Riverside Plaza, Suite 600 Chicago, Illinois 60606 Attn: Donald J. Liebentritt Fax: (312) 454-0335 With a copy to: Equity Group Investments, LLC Two North Riverside Plaza, Suite 600 Chicago, Illinois 60606 Attn: Joseph Paolucci, Esq. Fax: (312) 454-0335 4 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 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 GPX to purchase the Shares from EGI 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 EGI shall pay its 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 5 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. IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed by its duly authorized officer as of the date first written above. GP STRATEGIES CORPORATION Name: Andrea D. Kantor Title: Executive Vice President and General Counsel EGI-FUND (02-04) INVESTORS, L.L.C. Name: Donald J. Liebentritt Title: Vice President 6 EX-10 3 ex102.txt STOCK PURCHASE AGREEMENT BETWEEN THE REGISTRANT AND BEDFORD OAK PARTNERS, L.P. Exhibit 10.2 STOCK REPURCHASE AGREEMENT This STOCK REPURCHASE AGREEMENT (this "Agreement"), dated as of January 19, 2006, by and between GP STRATEGIES CORPORATION, a Delaware corporation ("GPX"), and BEDFORD OAK PARTNERS, L.P., a Delaware limited partnership ("Bedford"). WHEREAS, Bedford owns 2,131,500 shares of GPX's Common Stock, par value $0.01 per share ("Common Stock"), and 300,000 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 Bedford and the other holders thereof; WHEREAS, GPX therefore approached Bedford to determine whether Bedford would sell the Class B Stock to GPX; WHEREAS, Bedford expressed its willingness to sell the Class B Stock to GPX provided GPX also purchased from Bedford 1,031,500 shares of Common Stock owned by Bedford (together, the "Shares Sold"); WHEREAS, in connection with the Shares Sold, Bedford expressed its willingness to sell 750,000 shares of Common Stock owned by Bedford to funds affiliated with Pequot Capital Management, Inc. ("Pequot") for a price per share equal to $6.80 (the "Pequot Sale"); WHEREAS, in connection with the foregoing, a Special Committee of the GPX Board of Directors (the "Special Committee") was formed that excluded, among others, Harvey P. Eisen; WHEREAS, the Special Committee and Bedford have negotiated on an arms-length basis for the sale and purchase of the Shares Sold 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, Bedford desires to sell to GPX, and GPX desires to purchase from Bedford, all of the Shares Sold upon the terms and conditions herein provided; WHEREAS, concurrently with the execution and delivery of this Agreement, Bedford and Pequot are executing and delivering a Stock Purchase Agreement with respect to the Pequot Sale and the closing under such Stock Purchase Agreement will occur contemporaneously with the Closing (as defined below); 1 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. Purchase of Shares Sold. 1.1 Subject to the terms and conditions and in reliance upon the representations and warranties set forth herein, Bedford agrees to sell to GPX, and GPX agrees to purchase from Bedford, (a) the 1,031,500 shares of Common Stock owned by Bedford for a price per share equal to $6.80; and (b) the 300,000 shares of Class B Stock owned by Bedford for a price per share equal to $8.30. The aggregate purchase price for the Shares Sold to be paid by GPX to Bedford shall be $9,504,200 ("Purchase Price"). Following such sale by Bedford to GPX and the Pequot Sale, Bedford will own 350,000 shares of Common Stock and no shares of Class B Stock. 1.2 The closing of the purchase and sale of the Shares Sold (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, Bedford shall deliver to GPX the certificate or certificates representing the Shares Sold, accompanied by a stock power endorsed in blank. 1.4 At the Closing, GPX shall pay an amount equal to the Purchase Price, by wire transfer of immediately available funds, to an account of Bedford previously furnished to GPX. 2. Representations and Warranties of Bedford. Bedford hereby represents and warrants to, and agrees with GPX, that: 2.1 Existence and Power. Bedford has been duly organized and is validly existing and in good standing under the laws of the State of Delaware and has all requisite limited partnership power and authority to execute and deliver this Agreement and consummate the transactions and perform each of its obligations contemplated hereby. 2.2 Authority. The execution and delivery of this Agreement by Bedford, the consummation by Bedford of each of the transactions and the performance by Bedford of each of its obligations contemplated hereby have been duly and properly authorized by all necessary action on the part of Bedford. This Agreement has been duly executed and delivered by Bedford and constitutes the valid and legally binding obligation of Bedford, 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). 2.3 Ownership of the Shares Sold. Bedford is the record and beneficial owner of the Shares Sold, and owns the Shares Sold 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 Sold, free and clear of any lien and any such other limitation or restriction. 2 2.4 No Conflicts and Consents. The execution and delivery of this Agreement by Bedford 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 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. 2.5 Due Diligence; Access to Information. Bedford has the knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the sale of the Shares Sold. Bedford has been afforded adequate opportunity (i) to perform due diligence and ask such questions as Bedford 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 Bedford deems necessary or appropriate to receive to form a decision on whether to sell the Shares Sold and enter into this Agreement; and (iii) to investigate and appraise the fair market value of the Company and the Shares Sold. 2.6 Independent Transaction. The decision by Bedford to enter into this Agreement and to sell the Shares Sold contemplated hereby has been made independent of the transactions described under subsections (a), (b) and (c) of Section 4.1 hereof. 3. Representations and Warranties of GPX. GPX hereby represents and warrants to, and agrees with Bedford, 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 3 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). 4. Conditions to Closing. The respective obligations of GPX and Bedford 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, at prices per share no greater than the prices per share specified in Section 1.1 hereof; (b) Jerome I. Feldman ("Feldman") 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 Feldman with respect to the exchange by Feldman of all his shares of Class B Stock at a rate of one share of Class B Stock for one share of 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 Bedford, to: Bedford Oak Management, LLC 100 South Bedford Road Mt. Kisco, New York 10549 Attn: Harvey Eisen Fax: (914) 242-5798 With a copy to: 4 Willkie Farr & Gallagher LLP 787 Seventh Avenue New York, New York 10019 Attn: Daniel Schloendorn Fax: (212) 728-8111 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 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 GPX to purchase the Shares Sold from Bedford 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 Bedford shall pay its 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; provided that the foregoing shall not prohibit Bedford from disclosing the existence of this Agreement and the terms of the transactions contemplated hereby to its limited partners. 5 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. IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed by its duly authorized officer as of the date first written above. GP STRATEGIES CORPORATION Name: Andrea D. Kantor Title: Executive Vice President and General Counsel BEDFORD OAK PARTNERS, L.P. Name: Harvey P. Eisen Title: Managing Member 6 EX-10 4 ex103.txt STOCK EXCHANGE AGREEMENT BETWEEN THE REGISTRANT AND JEROME I. FELDMAN 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 1 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 2 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. 3 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] 4 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 5 EX-10 5 ex104.txt STOCK EXCHANGE AGREEMENT BETWEEN THE REGISTRANT AND MARTIN M. POLLAK Exhibit 10.4 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 MARTIN M. POLLAK ("Pollak"). WHEREAS, Pollak owns 165,819 shares of GPX's Common Stock, par value $0.01 per share ("Common Stock"), and 31,250 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 Pollak and the other holders thereof; WHEREAS, GPX therefore approached Pollak to determine whether Pollak 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, Pollak 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; WHEREAS, the Special Committee and Pollak 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, Pollak desires to exchange the Class B Stock, and GPX desires for Pollak 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 and warranties set forth herein, Pollak 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 of $1.50 per Share Exchanged ("Exchange Incentive"). The aggregate price for the Shares Exchanged to be paid by GPX to Pollak shall be $46,875 ("Exchange Incentive Payment"). Following the Exchange, Pollak will own 197,069 shares of Common Stock and no shares of Class B Stock. 1 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, Pollak 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 Pollak previously furnished to GPX and shall deliver to Pollak a certificate or certificates evidencing the New Shares. 2. Representations and Warranties of Pollak. Pollak hereby represents and warrants to, and agrees with GPX, that: 2.1 Authority. This Agreement has been duly executed and delivered by Pollak and constitutes the valid and legally binding obligation of Pollak, 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 Pollak and Jerome I. Feldman, Pollak 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 Pollak 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 Pollak. 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. Pollak has the knowledge, sophistication and experience in business and financial matters so as 2 to be capable of evaluating the merits and risks of the Exchange. Pollak has been afforded adequate opportunity (i) to perform due diligence and ask such questions as Pollak 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 Pollak 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 Pollak has deemed necessary in connection with the transactions contemplated in this Agreement. 2.5 Independent Transaction. The decision by Pollak 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. 3. Representations and Warranties of GPX. GPX hereby represents and warrants to, and agrees with Pollak, 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. 3 4. Conditions to Closing. The respective obligations of GPX and Pollak 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) Jerome I. Feldman ("Feldman") 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 Feldman with respect to the exchange by Feldman 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 Pollak, to: Martin M. Pollak 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 4 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 Pollak 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] 5 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 GeneralCounsel MARTIN M. POLLAK Martin M. Pollak 6 EX-10 6 ex105.txt FOURTH AMENDMENT TO FINANCING AND SECURITY AGREEMENT DATED JANUARY 19, 2006 Exhibit 10.5 FOURTH AMENDMENT TO FINANCING AND SECURITY AGREEMENT THIS FOURTH AMENDMENT TO FINANCING AND SECURITY AGREEMENT (this "Agreement") is made as of January 19th, 2006, by GENERAL PHYSICS CORPORATION, a corporation organized under the laws of the State of Delaware ("General Physics"), SKILLRIGHT, INC., a Delaware corporation ("Skillright"), GSE SYSTEMS, INC., a corporation organized under the laws of the State of Delaware ("GSE Systems"), GSE POWER SYSTEMS, INC., a Delaware corporation ("GSE Power") and MSHI, INC., a Virginia corporation ("MSHI"; GSE Systems, GSE Power and MSHI are hereinafter referred to collectively as "GSE") (General Physics, Skillright, GSE Systems, GSE Power and MSHI are hereinafter referred to individually as a "Borrower" and collectively as "Borrowers"), jointly and severally and WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association (the "Lender"). RECITALS A. Borrowers and Lender are parties to a Financing and Security Agreement dated August 13, 2003, as modified by a First Amendment to Financing and Security Agreement dated as of March 30, 2004, a Second Amendment to Financing and Security Agreement dated as of July 2, 2004 and a Third Amendment to Financing and Security Agreement dated as of July 30, 2004 (the same, as amended, modified, substituted, extended, and renewed from time to time, collectively, the "Financing Agreement"). B. Borrowers have requested that Lender extend the Revolving Credit Expiration Date and requested that Lender permit the use of proceeds of the Revolving Loan for the repurchase of issued and outstanding stock of GPX. C. Lender is willing to agree to Borrowers' request on the condition, among others, that this Agreement be executed by Borrowers. AGREEMENTS NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, receipt of which is hereby acknowledged, Borrowers and Lender agree as follows: 1. Borrowers and Lender agree that the Recitals above are a part of this Agreement. Unless otherwise expressly defined in this Agreement, terms defined in the Financing Agreement shall have the same meaning under this Agreement. 2. Borrowers and Lender agree that on the date hereof the aggregate outstanding principal balance under the Revolving Credit Note (subject to change for returned items and other adjustments made in the ordinary course of business) is $0 and under the GSE Note is $1,182,000. 3. Each Borrower represents and warrants to Lender as follows: (a) It is a corporation duly organized, and validly existing and in good standing under the laws of the State of its organization and is duly qualified to do business as a foreign corporation in good standing in every other state wherein the conduct of its business or the ownership of its property requires such qualification; (b) It has the power and authority to execute and deliver this Agreement and perform its obligations hereunder and has taken all necessary and appropriate action to authorize the execution, delivery and performance of this Agreement; (c) The Financing Agreement, as heretofore amended and as amended by this Agreement, and each of the other Financing Documents remains in full force and effect, and each constitutes the valid and legally binding obligation of such Borrower, enforceable in accordance with its terms; (d) All of its representations and warranties contained in the Financing Agreement and the other Financing Documents, as updated and modified by the Borrower's statements and certificates furnished to the Lender from time to time, are true and correct on and as of the date of its execution of this Agreement; and (e) Other than as described in a letter dated August 4, 2005 executed by Lender and acknowledged by each Borrower, no Event of Default and no event which, with notice, lapse of time or both would constitute an Event of Default, has occurred and is continuing under the Financing Agreement or the other Financing Documents which has not been waived in writing by Lender. 4. The Financing Agreement is hereby amended as follows: (a) Section 1.1 (Certain Defined Terms) is modified by deleting the following defined terms in their entirety and inserting the following in place thereof: "Permitted Uses" means (a) as to General Physics and Skillright, (i) an amount not to exceed $8,600,000 to be used to repurchase issued and outstanding stock of GPX, (ii) for general working capital purposes arising in the ordinary course of General Physics' business and Skillright's business and (iii) to support the issuance of Letters of Credit and (b) as to GSE, (i) for general working capital purposes arising in the ordinary course of GSE's business and (ii) to support the issuance of GSE Letters of Credit. "Revolving Credit Expiration Date" means August 12, 2007 as to the Borrowers other than GSE and August 12, 2006 as to GSE, unless otherwise extended for successive periods of one (1) year beyond the then existing maturity date commencing as of the first anniversary date of this Agreement, by Lender in the exercise of its sole and absolute discretion." (b) Section 7.1.13 (a) (Tangible Net Worth) is hereby deleted in its entirety and the following is inserted in its place: 2 "(a) Tangible Net Worth. Borrower will maintain, at all times, a Tangible Net Worth equal to but not less than the following: ------------------------------------------ ---------------------------------- Period Amount ------------------------------------------ ---------------------------------- ------------------------------------------ ---------------------------------- January 31, 2006 through December 30, 2006 $18,500,000 ------------------------------------------ ---------------------------------- ------------------------------------------ ---------------------------------- December 31, 2006 and thereafter Tangible Net Worth required hereunder as of January 31, 2006 plus 50% of net after tax income for the fiscal year then ending ------------------------------------------ ---------------------------------- As of each December 31 commencing December 31, 2006, the minimum Tangible Net Worth to be maintained for the succeeding 364 days, shall be the sum of (a) the Tangible Net Worth as of the preceding December 31 plus (b) fifty percent (50%) of net after tax income for the fiscal year then ending." 5. Lender acknowledges that General Physics desires to provide cash to GPX for the purpose of funding the repurchase by GPX of 1,390,000 shares of GPX stock currently owned by EGI-Fund Investors, L.L.C., 2,081,500 shares of GPX stock currently owned by Bedford Oak Partners, L.P., 600,000 shares of GPX stock currently owned by Jerome Feldman and Martin Pollak, severally, to be converted to common stock at a cash premium and additional shares of GPX stock currently owned by the public (collectively, the "Stock"). Lender hereby (a) consents to the use of up to $8,600,000 of proceeds of the Revolving Loan to complete the purchase of the Stock, (b) consents to the transfer of funds (including cash on hand) by General Physics to GPX by dividend, loan or other means for the purchase of the Stock (collectively, the "Transfer") and (c) waives any non-compliance with Section 7.3.4 (Purchase or Redemption of Securities, Dividend Restrictions) and Section 7.3.6 (Investments, Loans and Other Transactions) of the Financing Agreement as a result of the Transfer. This provision shall not be deemed to waive any other non-compliance under the Financing Agreement, whether or not the events, facts or circumstances giving rise to such non-compliance existed on or prior to the date hereof. 6. The agreements of the Lender under this Agreement are subject to the Borrowers' payment to Lender of an amendment fee in the amount of $10,000, time being of the essence. 7. Each Borrower hereby issues, ratifies and confirms the representations, warranties and covenants contained in the Financing Agreement, as amended hereby. Each Borrower agrees that this Agreement is not intended to and shall not cause a novation with respect to any or all of the Obligations. 8. Borrowers shall pay at the time this Agreement is executed and delivered all fees, commissions, costs, charges, taxes and other expenses incurred by Lender and its counsel in connection with this Agreement, including, but not limited to, reasonable fees and expenses of Lender's counsel and all recording fees, taxes and charges. 3 9. This Agreement may be executed in any number of duplicate originals or counterparts, each of such duplicate originals or counterparts shall be deemed to be an original and all taken together shall constitute but one and the same instrument. Each Borrower agrees that Lender may rely on a telecopy of any signature of Borrower. Lender agrees that each Borrower may rely on a telecopy of this Agreement executed by Lender. IN WITNESS WHEREOF, Borrowers and Lender have executed this Agreement under seal as of the date and year first written above. WITNESS OR ATTEST: GENERAL PHYSICS CORPORATION /s/ Scott N. Greenberg By: /s/ Sharon Esposito-Mayer (SEAL) - ------------------------- ------------------------------------ Name: Sharon Esposito-Mayer Title: Executive Vice President and CFO WITNESS OR ATTEST: GENERAL PHYSICS CORPORATION /s/ Scott N. Greenberg By: /s/ Sharon Esposito-Mayer (SEAL) - ------------------------- ------------------------------------ Name: Sharon Esposito-Mayer Title: Executive Vice President and CFO WITNESS OR ATTEST: GSE SYSTEMS, INC. /s/ Pamela Schlachter By: /s/ Jeffery G. Hough (SEAL) - ------------------------- ------------------------------------ Name: Jeffery G. Hough Title: Senior Vice President and CFO WITNESS OR ATTEST: GSE POWER SYSTEMS, INC. /s/ Pamela Schlachter By: /s/ Jeffery G. Hough (SEAL) - ------------------------- ------------------------------------ Name: Jeffery G. Hough Title: Senior Vice President and CFO WITNESS OR ATTEST: MSHI, INC. /s/ Pamela Schlachter By: /s/ Jeffery G. Hough (SEAL) - ------------------------- ------------------------------------ Name: Jeffery G. Hough Title: Senior Vice President and CFO WITNESS: WACHOVIA BANK, NATIONAL ASSOCIATION /s/ Dawn M. Cumming By: /s/ Lucy C. Campbell (SEAL) - ------------------------- ------------------------------------ Name: Lucy C. Campbell Title: Vice President 4 AGREEMENT OF GUARANTOR The undersigned is the "Guarantor" under a Guaranty of Payment Agreement, dated August 13, 2003 (as amended, modified, substituted, extended and renewed from time to time, the "Guaranty"), in favor of Lender. In order to induce Lender to enter into the foregoing Agreement, the undersigned (a) consents to the transactions contemplated by, and agreements made by Borrower under, the foregoing Agreement, and (b) ratifies, confirms and reissues the terms, conditions, promises, covenants, grants, assignments, security agreements, agreements, representations, warranties and provisions contained in the Guaranty. WITNESS signature and seal of the undersigned as of the date of the Agreement. WITNESS OR ATTEST: GP STRATEGIES CORPORATION /s/ Sharon Esposito-Mayer By: /s/ Scott N. Greenberg (SEAL) - ----------------------------------- ------------------------------------ Name: Scott N. Greenberg Title: CEO and President 5 -----END PRIVACY-ENHANCED MESSAGE-----