Exhibit 10
Termination of Merger Agreement
February 11, 2000
The parties to this agreement are VS&A Communications Partners III, L.P.,
a Delaware limited partnership ("Parent"), VS&A Communications Parallel Partners
III, L.P., a Delaware limited partnership ("Parallel Partners"), VS&A-GP,
L.L.C., a Delaware limited liability company wholly owned by Parent and Parallel
Partners (the "LLC"), VS&A-GP Acquisition, Inc., a Delaware corporation and a
wholly owned subsidiary of LLC (the "Sub"), and GP Strategies Corporation, a
Delaware corporation (the "Company").
Parent, the LLC, the Sub and the Company entered into a merger agreement
dated October 6, 1999 (the "Merger Agreement") that provides for the acquisition
of the Company by Parent through the merger of the Sub into the Company pursuant
to Section 251 of the Delaware General Corporation Law. Subsequently, Parent
informed the Company that it believes that the conditions to its obligation to
consummate the merger would not be fulfilled, and the Company thereafter
requested that Parent agree to the immediate termination of the Merger
Agreement. The parties have now agreed to terminate the Merger Agreement on the
terms set forth below.
Accordingly, it is agreed as follows:
1. Termination of Merger Agreement. The Merger Agreement is terminated by
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mutual consent of Parent and the Company pursuant to section 6.1(a) of
the Merger Agreement and all rights and obligations under the Merger
Agreement are discharged.
2. Issuance of Stock and Warrants to Parent and Parallel Partners. In
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order to induce Parent to agree to the immediate termination of the
Merger Agreement and to give the release provided for in section 3(b),
upon execution of this agreement, as partial reimbursement of the
expenses incurred by Parent in connection with the Merger Agreement,
(a) the Company is issuing to Parent, and is delivering to Parent a
stock certificate for, 78,806 fully paid and non-assessable shares of
the Company's Common Stock, par value $.01 per share ("Common Stock"),
(b) the Company is issuing and delivering to Parent a warrant, in the
form of Exhibit A to this agreement, to purchase 78,806 shares of the
Company's Common Stock, (c) the Company is issuing to Parallel
Partners, and is delivering to Parallel Partners a stock certificate
for, 4,527 fully paid and non-assessable shares of the Common Stock,
and (d) the Company is issuing and delivering to Parallel Partners a
warrant, in the form of Exhibit B to this agreement, to purchase 4,527
shares of the Company's Common Stock (the shares being issued to Parent
and Parallel Partners upon execution of this agreement being referred
to below as the "Shares," the warrants being issued to Parent and
Parallel Partners upon execution of this agreement being referred to
below as the "Warrants," the shares of Common Stock issuable upon
exercise of the Warrants being referred to below as the "Warrant
Shares," and the Shares, the Warrants, and the Warrant Shares being
referred to collectively as the "Securities"). The following
provisions shall apply with respect to the Securities:
1. until February 11, 2001, Parent and Parallel Partners shall not sell or
otherwise dispose of any of the Securities, except (i) with the Company's
prior written consent or (ii) upon conversion in any merger in which the
Company is not the surviving corporation or in connection with any other
corporate transaction that results in the disposition of more than a
majority of the Company's outstanding shares; provided that this
restriction shall cease to apply if ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇") and
Permitted Transferees sell or otherwise dispose of (other than to
Permitted Transferees or in connection with the acquisition of other
shares in the Company) more than 50% of the aggregate number of shares in
the Company that ▇▇▇▇▇▇▇ and Permitted Transferees then own and have the
right to acquire; "Permitted Transferees" shall mean any of (i) ▇▇▇▇▇▇▇,
(ii) any parent, child, descendant, or sibling of ▇▇▇▇▇▇▇, (iii) the
spouse of any of the foregoing, (iv) any trust established by ▇▇▇▇▇▇▇ or
any of the foregoing persons, or any trustee, custodian, fiduciary, or
foundation, which will hold the shares of the Company for charitable
purposes or for the benefit of ▇▇▇▇▇▇▇ or any of the persons described in
this Section 2(a) or any combination thereof, and (v) committees,
guardians, or other legal representatives of ▇▇▇▇▇▇▇ or of any of the
other persons described in this Section 2(a);
2. until February 11, 2001, with respect to all matters submitted for the
vote or written consent of the Company's stockholders, Parent and Parallel
Partners shall vote the Shares, the Warrant Shares, and any other shares
of capital stock of the Company that Parent or Parallel Partners has the
power to vote in accordance with the recommendations of the Company's
board of directors; and
3. the certificates for the Shares and any Warrant Shares issued before
February 11, 2001 shall bear the following legend: "The shares represented
by this certificate are subject to restrictions on transfer until February
11, 2001 as set forth in a Termination Agreement dated February 11, 2000
among VS&A Communications Partners III, L.P., VS&A Communications Parallel
Partners III, L.P., VS&A-GP, L.L.C., VS&A-GP Acquisition, Inc., and GP
Strategies Corporation."
At any time after February 11, 2001, upon Parent's or Parallel Partner's
request, the Company promptly shall exchange Parent's or Parallel Partner's
certificate or certificates for the Shares and the Warrant Shares for
certificates without the legend referred to in this paragraph.
3. Releases.
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1. The Company releases and discharges Parent, Parallel Partners, the LLC
and the Sub, and each of Parent's other subsidiaries and affiliates, and
their respective partners, members, officers, and directors (in their
individual capacities as well as in their capacities as such), from any
claim or cause of action of any kind, known or unknown, arising prior to
the date of this agreement, including, but not limited to, any claim or
cause of action arising under the Merger Agreement or under any agreement
or other document executed and delivered in connection with Merger
Agreement, but excluding any claim or cause of action arising under this
agreement.
2. Parent, Parallel Partners, the LLC and the Sub, and each of
them, releases and discharges the Company and its officers, directors,
employees and agents (in their individual capacities as well as in their
capacities as such), from any claim or cause of action of any kind, known
or unknown, arising prior to the date of this agreement, including, but
not limited to, any claim or cause of action arising under the Merger
Agreement or under any agreement or other document executed and delivered
in connection with the Merger Agreement, but excluding any claim or cause
of action arising under this agreement or the Warrants.
4. Representations and Warranties of the Company. The Company represents
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and warrants to Parent and Parallel Partners as follows:
1. The Company is a corporation duly organized, validly existing and in
good standing under the law of the jurisdiction of its incorporation or
organization and has all requisite corporate power and authority to own,
lease and operate its properties and to carry on its business as now being
conducted.
2. The Company has full corporate power and authority to execute and
deliver and to perform its obligations under this agreement and the
Warrants; the execution, delivery and performance by the Company of this
agreement and the Warrants have been duly authorized by the Company's
board of directors and no other corporate action on the part of the
Company is necessary to authorize the execution, delivery and performance
by the Company of its obligations under this agreement and the Warrants;
and this agreement and the Warrants have been duly executed and delivered
by the Company and, assuming due and valid authorization, execution and
delivery of this agreement by Parent, Parallel Partners, LLC and the Sub,
are legal, valid and binding obligations of the Company enforceable
against the Company in accordance with their respective terms. 1.
3. The execution, delivery and performance of this agreement and the
Warrants by the Company will not (i) conflict with or result in any breach
of any provision of the certificate of incorporation, the by-laws or
similar organizational documents of the Company, (ii) require any filing
with, or authorization, consent or approval of, any court, arbitral
tribunal, administrative agency or commission or other governmental or
other regulatory authority or agency, other than any required filings
under the securities laws and the rules of the New York Stock Exchange,
(iii) result in a material breach of any material agreement or other
obligation of the Company or any of its subsidiaries, or (iv) violate any
material order, writ, injunction, decree, statute, rule or regulation
applicable to the Company or any of its subsidiaries.
4. Upon issuance and delivery of the Shares pursuant to this agreement,
the Shares will be duly authorized, validly issued, fully paid and
non-assessable.
5. Upon issuance and delivery of Warrant Shares upon exercise of the Warrants
in accordance with their terms and the payment of the exercise price
therefor, such Warrant Shares will be duly authorized, validly issued,
fully paid and non-assessable.
6. The sale of the Shares pursuant to this agreement and of the Warrant
Shares upon exercise of the Warrants in accordance with their terms
constitute or will constitute exempted transactions under the registration
provisions of the Securities Act of 1933 (the "Act"), assuming the
accuracy of the representation in Section 6(a).
7. The Shares and Warrant Shares are or will be newly-issued shares and
not treasury shares.
5. Representations and Warranties of Parent and Parallel Partners. Parent
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and Parallel Partners represent and warrant to the Company as follows:
1. Each of Parent and Parallel Partners is a partnership, LLC is a limited
liability company, and Sub is a corporation duly organized, validly
existing and in good standing under the law of the jurisdiction of its
incorporation or organization.
2. The Parent, Parallel Partners, LLC and the Sub have full partnership,
partnership, limited liability company and corporate power, respectively,
to execute and deliver and to perform their obligations under this
agreement; all action on the part of Parent, Parallel Partners, the LLC
and the Sub necessary for the authorization, execution and delivery of
this agreement and the performance of all of their respective obligations
under this agreement has been taken, and assuming due execution and
delivery of this Agreement by the Company, this agreement constitutes the
valid and binding obligation of Parent, Parallel Partners, the LLC and the
Sub enforceable against them in accordance with its terms. 1.
3. The execution, delivery and performance of this agreement by the Parent,
Parallel Partners, LLC and the Sub will not (i) conflict with or result in
any breach of any provision of the certificate of incorporation, the
by-laws or similar organizational documents of any of them, (ii) require
any filing with, or authorization, consent or approval of, any court,
arbitral tribunal, administrative agency or commission or other
governmental or other regulatory authority or agency, other than any
required filings under the securities laws, (iii) result in a material
breach of any material agreement or other obligation of the Parent,
Parallel Partners, LLC and the Sub, or (iv) violate any material order,
writ, injunction, decree, statute, rule or regulation applicable to any of
them.
6. Securities Act Matters.
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1. Each of Parent and Parallel Partners represents and warrants to the
Company that the Securities will be acquired for investment and not with a
view to the sale or distribution of any of those shares in violation of
the Act. Each of Parent and Parallel Partners acknowledges that the
Company has no obligation, and does not intend, to register any of the
Securities under the Act except to the extent set forth in the Warrants.
2. The certificates for the Shares and Warrant Shares shall bear the
following legend:
"The shares represented by this certificate have not been registered under
the Securities Act of 1933 ("Act") and may not be transferred unless a
registration statement under the Act is in effect as to that transfer or,
in the opinion of counsel reasonably satisfactory to the Company,
registration under the Act is not necessary for that transfer to comply
with the Act."
7. Survival of Representations and Warranties; Indemnification.
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1. All representations, warranties and agreements of the Company contained in
this agreement shall survive (without limitation as to time) the execution
and delivery of this agreement and the consummation of the transactions
contemplated by this agreement notwithstanding any investigation at any
time by or on behalf of Parent or Parallel Partners. All representations,
warranties and agreements of Parent and Parallel Partners contained in
this agreement shall survive (without limitation as to time) the execution
and delivery of this agreement and the consummation of the transactions
contemplated by this agreement notwithstanding any investigation at any
time by or on behalf of the Company.
2. The Company shall indemnify and hold harmless Parent, Parallel Partners,
the LLC and the Sub from all loss, liability, damage, or expense
(including reasonable fees and expenses of counsel, whether involving a
third party or between the parties to this agreement) any of them may
suffer, sustain or become subject to as a result of any breach of any
warranty, covenant or other agreement of the Company contained in this
agreement or the Warrants, or any false representation by the Company in
this agreement or the Warrants. 1.
3. Parent and Parallel Partners shall indemnify and hold harmless the Company
from all loss, liability, damage, or expense (including reasonable fees
and expenses of counsel, whether involving a third party or between the
parties to this agreement) the Company may suffer, sustain or become
subject to as a result of any breach of any warranty, covenant or other
agreement of Parent or Parallel Partners contained in this agreement or
any false representation by Parent or Parallel Partners in this agreement.
4. If any action is brought by a third party against an indemnified party in
respect of which indemnity may be sought pursuant to Section 7(b) or (c),
such indemnified party shall promptly notify the indemnifying party in
writing of the institution of such action, and the indemnifying party
shall promptly assume the defense of such action, including the employment
of counsel reasonably satisfactory to such indemnified party and payment
of expenses. Such indemnified party shall have the right to employ its own
counsel in any such case, but the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (i) the employment of
such counsel shall have been authorized in writing by the indemnifying
party in connection with the defense of such action, (ii) the indemnifying
party shall not have promptly employed counsel reasonably satisfactory to
such indemnified party to have charge of the defense of such action, or
(iii) such indemnified party shall have been advised by counsel that there
may be one or more legal defenses available to it which are different from
or additional to those available to the indemnifying party and it would be
inappropriate for the same counsel to represent both parties due to actual
or potential differing interests between them, in any of which events such
fees and expenses shall be borne by the indemnifying party and the
indemnifying party shall not have the right to direct the defense of such
action on behalf of the indemnified party. Anything in this paragraph to
the contrary notwithstanding, the indemnifying party shall not be liable
for (i) the fees or expenses of more than one counsel in the aggregate for
all indemnified parties in any action or series of related actions or (ii)
any settlement of any action effected without its written consent.
8. Additional Agreements of the Parties.
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1. Upon execution of this agreement, the Company is delivering to Parent an
opinion of Duane, Morris & Heckscher LLP, counsel to the Company, in the
form attached hereto as Exhibit C, and Parent, the LLC, and the Sub are
delivering to the Company an opinion of Proskauer Rose LLP, counsel to
Parent, the LLC, and the Sub, in the form attached hereto as Exhibit D.
2. The parties hereto shall each bear its own legal and other fees and
expenses in connection with the negotiation, documentation and
consummation of the transactions contemplated in this agreement.
3. At the Company's request, at any time after December 31, 2001 (or, if on
December 31, 2001 (i) litigation is pending that arose out of the Merger
Agreement or this agreement or (ii) any other litigation is pending
against the Company or any of its officers or directors and Parent or any
of its affiliates is, or it may reasonably be foreseen will be, involved
in that litigation (either as a party, a witness or otherwise), at any
time after such later date that such litigation has been terminated),
Parent shall destroy, and shall cause its affiliates to destroy and
request that its advisors destroy, all Evaluation Material (as defined in
the confidentiality agreement dated May 17, 1999 between the Company and
Parent, as amended to date (the "Confidentiality Agreement")). Parent
shall give prompt notice to the Company when the Evaluation Material has
been destroyed.
9. Miscellaneous.
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1. This agreement shall be governed by and construed in accordance with the
law of the State of New York applicable to agreements made and to be
performed in New York.
2. This agreement and the Warrants contain a complete statement of all of the
terms of the arrangements among the parties with respect to their subject
matter, supersede any previous agreements and understandings between the
parties with respect to those matters, and cannot be changed or terminated
orally. Notwithstanding the foregoing or the destruction of the Evaluation
Material pursuant to Section 8(c) of this agreement, the provisions of the
Confidentiality Agreement shall remain in effect, except that (i) the
Parent shall be permitted, subject to Section 2(b) of this agreement and
Section 14 of the Confidentiality Agreement, to acquire shares of capital
stock of the Company and (ii) Section 8 of the Confidentiality Agreement
shall be deleted. Except as specifically set forth in this agreement,
there are no representations or warranties by any party in connection with
the transactions contemplated by this agreement.
3. Any party may waive compliance by another with any of the provisions of
this agreement. No waiver of any provision shall be construed as a waiver
of any other provision. Any waiver must be in writing and must be signed
by the party waiving any provision hereof.
4. The courts of the State of New York in New York County and the United
States District Court for the Southern District of New York shall have
jurisdiction over the parties with respect to any dispute or controversy
among them arising under or in connection with this agreement and, by
execution and delivery of this agreement, each of the parties to this
agreement submits to the jurisdiction of those courts, including, but not
limited to, the in personam and -- -------- subject matter jurisdiction of
those courts, waives any objection to such jurisdiction on the grounds of
venue or forum non ----- --- conveniens, the absence of in personam or
subject matter ---------- -- -------- jurisdiction and any similar
grounds, consents to service of process by mail (in accordance with
section 9(e) or any other manner permitted by law), and irrevocably agrees
to be bound by any judgment rendered thereby in connection with this
agreement, subject to any right to appeal. These consents to jurisdiction
shall not be deemed to confer rights on any person other than the parties
to this agreement.
5. All notices and other communications hereunder shall be in writing and
shall be deemed given if delivered personally, telecopied (which is
confirmed) or sent by an overnight courier service, such as Federal
Express, to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
if to Parent, Parallel Partners, LLC or the Sub, to:
VS&A Communications Partners III, L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
President
and
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
General Counsel
with a copy to:
Proskauer Rose LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
if to the Company, to:
GP Strategies Corporation
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
with a copy to:
Duane, Morris & Heckscher LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
6. The section headings of this agreement are for reference purposes
only and are to be given no effect in the construction or
interpretation of this agreement.
VS&A COMMUNICATIONS PARTNERS III, L.P.
By: VS&A Equities III, L.L.C., its general partner
By: __________________________________
S. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Managing Member
VS&A COMMUNICATIONS PARALLEL
PARTNERS III, L.P.
By: VS&A Equities III, L.L.C., its general partner
By: __________________________________
S. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Managing Member
VS&A-GP, L.L.C.
By: VS&A Communications Partners III, L.P.
By: VS&A Equities III, L.L.C., its general partner
By: ____________________________________
S. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Managing Member
VS&A-GP ACQUISITION, INC.
By: ___________________________________
S. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
GP STRATEGIES CORPORATION
By: ____________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President
