SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
GP Strategies Corporation
(Name of Issuer)
Common Stock, par value $0.01 per share
(Title of Class of Securities)
36225V104
(CUSIP Number)
Jerome I. Feldman
c/o GP Strategies Corporation
9 West 57th Street, Suite 4170
New York, New York 10019
(212) 230-9508
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
Copy to:
Robert J. Hasday, Esq.
Duane, Morris & Heckscher LLP
380 Lexington Avenue
New York, New York 10168
(212) 692-1010
August 31, 1999
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of ss.ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box: [ ]
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See ss. 240.13d-7(b) for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
CUSIP NO. 36225V104
1) Names of Reporting Persons I.R.S. Identification Nos. of Above Persons
(entities only)
Jerome I. Feldman
----------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group (See instructions) (a) [ ]
(b) [X]
3) SEC Use Only
4) Source of Funds (See Instructions)
SC, PF, OO
5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d)
or 2(e) [ ]
6) Citizenship or Place of Organization
United States
7) Sole Voting Power
Number of 855,605 (But see Item 5)
Shares 8) Shared Voting Power
Beneficially
Owned by Each 0
Reporting Person With 9) Sole Dispositive Power
855,605 (But see Item 5)
10) Shared Dispositive Power
0
11) Aggregate Amount Beneficially Owned By Each
Reporting Person
855,605
12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See instructions) [X]
13) Percent of Class Represented by Amount in Row (11)
7.0%
14) Type of Reporting Person (See Instructions)
IN
<PAGE>
CUSIP NO. 36225V104
1) Names of Reporting Persons I.R.S. Identification Nos. of Above Persons
(entities only)
Scott N. Greenberg
2) Check the Appropriate Box if a Member of a Group (See instructions)
(a) [ ]
(b) [X]
3) SEC Use Only
4) Source of Funds (See Instructions)
SC, PF, OO
5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
6) Citizenship or Place of Organization
United States
Number of 7) Sole Voting Power
Shares
Beneficially 194,593 (But see Item 5)
Owned by Each 8) Shared Voting Power
Reporting Person With
0
9) Sole Dispositive Power
194,593 (But see Item 5)
10) Shared Dispositive Power
0
11) Aggregate Amount Beneficially Owned By Each
Reporting Person
194,593
12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See instructions) [ ]
13) Percent of Class Represented by Amount in Row (11)
1.7%
14) Type of Reporting Person (See Instructions)
IN
<PAGE>
CUSIP NO. 36225V104
1) Names of Reporting Persons I.R.S. Identification Nos. of Above Persons
(entities only)
John C. McAuliffe
2) Check the Appropriate Box if a Member of a Group (See instructions)
(a) [ ]
(b) [X]
3) SEC Use Only
4) Source of Funds (See Instructions)
OO
5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
6) Citizenship or Place of Organization
United States
Number of 7) Sole Voting Power
Shares
Beneficially 77,201 (But see Item 5)
Owned by Each
Reporting Person With 8) Shared Voting Power
0
9) Sole Dispositive Power
77,201 (But see Item 5)
10) Shared Dispositive Power
0
11) Aggregate Amount Beneficially Owned By Each
Reporting Person
77,201
12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See instructions) [ ]
13) Percent of Class Represented by Amount in Row (11)
0.7%
14) Type of Reporting Person (See Instructions)
IN
<PAGE>
1) Names of Reporting Persons I.R.S. Identification Nos. of Above Persons
(entities only)
John Moran
2) Check the Appropriate Box if a Member of a Group (See instructions)
(a) [ ]
(b) [X]
3) SEC Use Only
4) Source of Funds (See Instructions)
OO
5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
6) Citizenship or Place of Organization
United States
Number of 7) Sole Voting Power
Shares
Beneficially 46,880 (But see Item 5)
Owned by Each 8) Shared Voting Power
Reporting Person With
0
9) Sole Dispositive Power
46,880 (But see Item 5)
10) Shared Dispositive Power
0
11) Aggregate Amount Beneficially Owned By Each
Reporting Person
46,880
12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See instructions) [ ]
13) Percent of Class Represented by Amount in Row (11)
0.4%
14) Type of Reporting Person (See Instructions)
IN
<PAGE>
CUSIP NO. 36225V104
1) Names of Reporting Persons I.R.S. Identification Nos. of Above Persons
(entities only)
Douglas Sharp
2) Check the Appropriate Box if a Member of a Group (See instructions)
(a) [ ]
(b) [X]
3) SEC Use Only
4) Source of Funds (See Instructions)
OO
5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
6) Citizenship or Place of Organization
United States
Number of 7) Sole Voting Power
Shares
Beneficially 48,238 (But see Item 5)
Owned by Each 8) Shared Voting Power
Reporting Person With
0
9) Sole Dispositive Power
48,238 (But see Item 5)
10) Shared Dispositive Power
0
11) Aggregate Amount Beneficially Owned By Each
Reporting Person
48,238
12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See instructions) [ ]
13) Percent of Class Represented by Amount in Row (11)
0.4%
14) Type of Reporting Person (See Instructions)
IN
<PAGE>
Item 1. Security and Issuer
The class of equity securities to which this statement relates is the
common stock, par value $.01 per share (the "Common Stock"), of GP Strategies
Corporation, a Delaware corporation (the "Company"), which has its principal
executive offices at 9 West 57th Street, Suite 4170, New York, New York 10019.
Item 2. Identity and Background
This statement is filed by Jerome I. Feldman, Scott N. Greenberg,
John C. McAuliffe, John Moran, and Douglas Sharp (the "Filing Persons").
The business address of Messrs. Feldman and Greenberg is GP Strategies
Corporation, 9 West 57th Street, Suite 4170, New York, New York 10019. The
business address of Messrs. McAuliffe, Moran, and Sharp is General Physics
Corporation, 6700 Alexander Bell Drive, Columbia, Maryland 21046. The principal
occupation of Mr. Feldman is Chairman, President, and Chief Executive Officer of
the Company. The principal occupation of Mr. Greenberg is Executive Vice
President and Chief Financial Officer of the Company. The principal occupation
of Mr. McAuliffe is Senior Vice President of the Company and President of
General Physics Corporation ("General Physics"), a wholly-owned subsidiary of
the Company. The principal occupation of Mr. Moran is Executive Vice President
of Business Development of General Physics. The principal occupation of Mr.
Sharp is Executive Vice President and Chief Operations Officer of General
Physics. The principal business of the Company and General Physics is
performance improvement and training.
During the last five years, none of the Filing Persons has been (i)
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree, or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
Each of the Filing Persons is a citizen of the United States.
Item 3. Source and Amount of Funds or Other Consideration
<PAGE>
Mr. Feldman owns 3,360 shares of Common Stock, which were acquired in
exchange for certain options that he owned to purchase General Physics common
stock. He also owns 418,750 shares of Class B Capital Stock, par value $.01 per
share (the "Class B Stock"), of the Company. The Class B Stock is convertible at
any time into shares of Common Stock on a share for share basis at the option of
the holders thereof. Mr. Feldman acquired 31,250 shares of Class B Stock prior
to 1970. He acquired his remaining 387,500 shares of Class B Stock upon exercise
of options with an exercise price of $9 per share. The sources of funds for the
$3,487,500 aggregate purchase price for such option shares were loans from the
Company ($3,483,625), and personal funds ($3,875). Such loans bear interest at
the prime rate of Fleet Bank and are secured by the purchased Class B Stock. As
of August 31, 1999, the aggregate amount of indebtedness outstanding was
approximately $2,802,463 (including accrued interest).
Mr. Greenberg owns 13,718 shares of Common Stock, of which 1,650 were
acquired for $38,725 using personal funds, 2,500 were received as a bonus from
the Company, 5,000 were acquired upon exercise of options with an exercise price
of $9 per share, and 4,568 were acquired in exchange for certain options he
owned to purchase General Physics common stock. The sources of funds for the
$45,000 aggregate purchase price for such option shares was a loan from the
Company ($44,950) and personal funds ($50). Such loan bears interest at the
prime rate of Fleet Bank and is secured by the purchased Common Stock. As of
August 31, 1999, the aggregate amount of indebtedness outstanding was
approximately $49,793 (including accrued interest).
Mr. McAuliffe owns 10,570 shares of Common Stock, of which 900 were
acquired in exchange for General Physics common stock, 6,256 were in exchange
for certain options he owned to purchase General Physics common stock, and 3,759
were allocated to his account pursuant to the provisions of the General Physics
Corporation Profit Investment Plan (the "PIP").
Mr. Moran owns 2,451 shares of Common Stock, of which 2,159 were
acquired in exchange for certain options he owned to purchase General Physics
common stock and 292 were allocated to his account pursuant to the provisions of
the PIP.
Mr. Sharp owns 4,009 shares of Common Stock, of which 1,420 were
acquired in exchange for certain options he owned to purchase General Physics
common stock and 2,589 were allocated to his account pursuant to the provisions
of the PIP.
Item 4. Purpose of Transaction
Each of the Filing Persons acquired the securities of the Company he
owns for investment.
On August 31, 1999, VS&A Communications Partners III, L.P. ("VS&A"), an
equity investment fund that is affiliated with Veronis Suhler & Associates Inc.,
and each of the Filing Persons made an offer (the "Offer") to the Company to
acquire by merger (the "Merger") all of the outstanding Common Stock and Class B
Stock for minimum prices of $13.00 per share for the Common Stock and $14.625
per share for the Class B Stock, payable in cash upon consummation of the
Merger. The Offer is not conditioned upon financing.
Neither the Company nor VS&A will have any binding obligation with
respect to the proposed Merger until the execution of a definitive merger
agreement (the "Merger Agreement"), and the Offer is subject to the satisfactory
completion of due diligence. The Offer provides that it will be considered
withdrawn without further action if a definitive Merger Agreement has not been
executed and delivered prior to 5:00 p.m. Eastern Daylight Savings Time on
September 21, 1999.
<PAGE>
VS&A and each of the Filing Persons have entered into a Stockholders
Agreement, dated August 31, 1999 (the "Stockholders Agreement"), pursuant to
which each of the Filing Persons has agreed, among other things and subject to
certain exceptions, (i) solely in his capacity as a stockholder of the Company,
not to encourage, solicit, engage in, or initiate discussions or negotiations
with any third party concerning any merger, reorganization, share exchange,
tender offer, consolidation, or similar transaction involving, or any purchase
of 10% or more of the assets or any equity securities of, the Company or any of
its subsidiaries (an "Acquisition Proposal"), (ii) not to engage in any
discussion or negotiation with any third party with respect to any employment
arrangement related to an Acquisition Proposal by a third party, (iii) solely in
his capacity as a stockholder of the Company, to use his best efforts to cause
the consummation of the Merger, (iv) to exercise, prior to the record date to
vote on the Merger (and in the case of Messrs. McAuliffe, Moran, and Sharp, only
if the Company has received an Acquisition Proposal from a third party or a
third party has expressed its intention to make an Acquisition Proposal), all of
the then exercisable options he holds for the purchase of any shares of Common
Stock or Class B Stock, provided that he has received a loan from VS&A in an
amount equal the aggregate exercise price and any related tax liability, (v) to
vote all of his shares of Common Stock or Class B Stock in favor of the Merger
and against any Acquisition Proposal from a third party and any other action or
agreement that would impede, frustrate, prevent or nullify the Stockholders
Agreement or the transactions contemplated by the Stockholders Agreement or the
Merger Agreement, (vi) not to transfer, grant any proxy, power-of-attorney or
other authorization in or with respect to, deposit into a voting trust, or enter
into a voting agreement with respect to, any of his shares of Common Stock or
Class B Stock, and (vii) not to take any other action that would in any way
restrict, limit or interfere with the performance of his obligations under the
Stockholders Agreement or with the transactions contemplated by Stockholders
Agreement or the Merger Agreement. Each of the Filing Persons will also be a
member of the limited liability company being formed to effectuate the Merger
and will enter into an employment agreement with the Company effective upon
consummation of the Merger.
As a result of the Stockholders Agreement, each of the Filing Persons
may be deemed a member of a "group" for purposes of Section 13(d) under the
Securities Exchange Act of 1934, as amended (the "Act"), with VS&A and the other
Filing Persons. The filing of this Schedule 13D shall not be deemed an admission
by any of the Filing Persons that he is a member of such a group, and the Filing
Persons do not admit that they should be deemed to be such a group.
<PAGE>
Other than as described above, none of the Filing Persons has any
present plan or proposal which relates to or would result in: (i) the
acquisition by any person of additional securities of the Company, or the
disposition of securities of the Company; (ii) an extraordinary corporate
transaction, such as a merger, reorganization or liquidation, involving the
Company or any of its subsidiaries; (iii) a sale or transfer of a material
amount of assets of the Company or any of its subsidiaries; (iv) any change in
the present Board of Directors or management of the Company, including any plans
or proposals to change the number or term of directors or to fill any existing
vacancies on the Board; (v) any material change in the present capitalization or
dividend policy of the Company; (vi) any other material change in the Company's
business or corporate structure; (vii) changes in the Company's charter, by-laws
or instruments corresponding thereto or other actions which may impede the
acquisition of control of the Company by any person; (viii) causing a class of
securities of the Company to be delisted from a national securities exchange or
to cease to be authorized to be quoted in an inter-dealer quotation system of a
registered national securities association; (ix) a class of equity securities of
the Company becoming eligible for termination of registration pursuant to
Section 12(g)(4) of the Act; or (x) any action similar to any of those
enumerated above. Item 4 disclosure provisions regarding any plans or proposals
to make any changes in a company's investment policy for which a vote is
required by Section 13 of the Investment Company Act of 1940 are inapplicable.
Item 5. Interest in Securities of the Issuer
Mr. Feldman beneficially owns 855,605 shares of Common Stock,
representing 7.0% of the outstanding shares of Common Stock, consisting of (i)
3,360 shares of Common Stock held directly, (ii) 220,995 shares of Common Stock
issuable upon exercise of currently exercisable stock options, (iii) 418,750
shares of Common Stock issuable upon conversion of Class B Stock held directly,
and (iv) 212,500 shares of Common Stock issuable upon conversion of Class B
Stock issuable upon exercise of currently exercisable stock options. Mr.
Feldman's total does not include 1,173 shares of Common Stock held by members of
his family, of which he disclaims beneficial ownership.
Mr. Greenberg beneficially owns 194,593 shares of Common Stock,
representing 1.7% of the outstanding shares of Common Stock, consisting of (i)
13,718 shares of Common Stock held directly, (ii) 105,875 shares of Common Stock
issuable upon exercise of currently exercisable stock options, and (iii) 75,000
shares of Common Stock issuable upon conversion of Class B Stock issuable upon
exercise of currently exercisable stock options.
Mr. McAuliffe beneficially owns 77,201 shares of Common Stock,
representing 0.7% of the outstanding shares of Common Stock, consisting of (i)
7,156 shares of Common Stock held directly, (ii) 3,759 shares of Common Stock
allocated to his account pursuant to the provisions of the PIP, and (iii) 66,286
shares of Common Stock issuable upon exercise of currently exercisable stock
options.
Mr. Moran beneficially owns 46,880 shares of Common Stock, representing
0.4% of the outstanding shares of Common Stock, consisting of (i) 2,159 shares
of Common Stock held directly, (ii) 292 shares of Common Stock allocated to his
account pursuant to the provisions of the PIP, and (iii) 44,429 shares of Common
Stock issuable upon exercise of currently exercisable stock options.
Mr. Sharp beneficially owns 48,238 shares of Common Stock, representing
0.4% of the outstanding shares of Common Stock, consisting of (i) 1,420 shares
of Common Stock held directly, (ii) 2,589 shares of Common Stock allocated to
his account pursuant to the provisions of the PIP, and (iii) 44,229 shares of
Common Stock issuable upon exercise of currently exercisable stock options.
<PAGE>
The Filing Persons collectively beneficially own 1,222,517 shares
of Common Stock, representing 9.7% of the outstanding shares of Common Stock.
Information with respect to the beneficial ownership of shares of
Common Stock by VS&A is contained in a Schedule 13D (the "VS&A Schedule 13D")
being filed by VS&A on or about the date hereof, which information is hereby
incorporated by reference herein.
As a result of the Stockholders Agreement, VS&A may be deemed to have
shared power with each of the Filing Persons to vote and dispose of the shares
of Common Stock beneficially owned by each of the Filing Persons. The applicable
information required by Item 2 with respect to VS&A is contained in the VS&A
Schedule 13D, which information is hereby incorporated by reference herein. None
of the Filing Persons has purchased or sold any shares of Common Stock or
securities exercisable for or convertible into Common Stock during the past 60
days. No person other than the Filing Person has the right to receive or the
power to direct the receipt of dividends from, or the proceeds from the sale of,
any shares of Common Stock beneficially owned by such Filing Person.
Information with respect to each Filing Person is given solely by such
Filing Person, and no Filing Person is responsible for the accuracy or
completeness of information supplied by another Filing Person or in the VS&A
Schedule 13D.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer
The Stockholders Agreement is described in Items 4 and 5 above.
On December 29, 1998, the Company, Mr. Feldman, and Martin M. Pollak
entered into an agreement (the "Exchange Agreement") pursuant to which Mr.
Pollak granted certain rights of first refusal with respect to his Class B Stock
and options to purchase Class B Stock to Mr. Feldman and his family, and Mr.
Feldman granted certain tag-along rights with respect to his Class B Stock and
options to purchase Class B Stock to Mr. Pollak and his family. In addition, Mr.
Pollak agreed that, until May 31, 2004, during any period commencing on the date
any person or group commences or enters into, or publicly announces an intention
to commence or enter into, and ending on the date such person abandons, a tender
offer, proxy fight, or other transaction that may result in a change in control
of the Company, he will vote his shares of Common Stock and Class B Stock on any
matter in accordance with the recommendation of the Company's Board of
Directors.
<PAGE>
Except for the above, none of the Filing Persons is a party to any
contract, arrangement, understanding, or relationship (legal or otherwise) with
any person with respect to any securities of the Company, including but not
limited to any agreements concerning (i) transfer or voting of any securities of
the Company, (ii) finder's fees, (iii) joint ventures, (iv) loan or option
arrangements, (v) puts or calls, (vi) guarantees of profits, (vii) division of
profits or losses, or (viii) the giving or withholding of proxies.
Item 7. Material to be Filed as Exhibits
Exhibit 1. Joint Filing Agreement.
Exhibit 2. Form of note of Jerome I. Feldman and Scott N. Greenberg to GP
Strategies Corporation.
Exhibit 3. Form of pledge agreement of Jerome I. Feldman and Scott N.
Greenberg to GP Strategies Corporation.
Exhibit 4. Offer letter, dated August 31, 1999, to the Board of
Directors of GP Strategies Corporation from VS&A
Communications Partners III, L.P.
Exhibit 5. Stockholders Agreement, dated August 31, 1999, among VS&A
Communications Partners III, L.P., Jerome I. Feldman, Scott
N.Greenberg, John C. McAuliffe, John Moran, and Douglas Sharp.
Exhibit 6. Agreement, dated December 29, 1998, among GP Strategies
Corporation, Jerome I. Feldman, and Martin M. Pollak.
Incorporated by reference to Exhibit 10.11 of the Annual
Report on Form 10-K for the Fiscal Year Ended December 31,
1998 of GP Strategies Corporation.
Exhibit 7. Amendment, dated March 22, 1999, to the Agreement, dated
December 29, 1998, among GP Strategies Corporation, Jerome I.
Feldman, and Martin M. Pollak. Incorporated by reference to
Exhibit 10.12 of the Annual Report on Form 10-K for the Fiscal
Year Ended December 31, 1998 of GP Strategies Corporation.
<PAGE>
SIGNATURES AND POWER OF ATTORNEY
Each of the undersigned constitutes and appoints Jerome I. Feldman and
Scott N. Greenberg, and each of them, his true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign any and all amendments
to this Statement on Schedule 13D and to file the same, with all exhibits
thereto, and other documents in connection therewith (including, without
limitation, any joint filing agreements), with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
After reasonable inquiry and to the best of the knowledge and belief of
each person set forth below, each such person certifies that the information set
forth in this statement is true, complete and correct.
Signature Date
_____________________________________ September 10, 1999
Jerome I. Feldman
_____________________________________ September 10, 1999
Scott N. Greenberg
____________________________________ September 10, 1999
John McAuliffe
_____________________________________ September 10, 1999
John Moran
____________________________________ September 10, 1999
Douglas Sharp
<PAGE>
Exhibit 1
Joint Filing Agreement
In accordance with Rule 13d-1(f) under the Securities Exchange Act of
1934, as amended, each of the undersigned agrees to the joint filing on behalf
of each of them of a Statement on Schedule 13D (including amendments thereto)
with respect to the common stock, par value $.01 per share, of GP Strategies
Corporation, and further agrees that this Joint Filing Agreement be included as
an Exhibit to such joint filing.
Signature Date
_____________________________________ September 10, 1999
Jerome I. Feldman
_____________________________________ September 10, 1999
Scott N. Greenberg
____________________________________ September 10, 1999
John McAuliffe
_____________________________________ September 10, 1999
John Moran
____________________________________ September 10, 1999
Douglas Sharp
<PAGE>
Exhibit 2
Form of note of Jerome I. Feldman and Scott N. Greenberg
to GP Strategies Corporation
Promissory Note
$_____________ Original Issue Date: ______
New York, New York
_______________, with an address at c/o GP Strategies Corporation, 9
West 57th Street, Suite 4170, New York NY 10019 (the "Maker"), for value
received, hereby promises to pay to GP Strategies Corporation, with an address
at 9 West 57th Street, Suite 4170, New York NY 10019, or registered assigns (the
"Holder"), the principal amount of ______________ ($__________), together with
interest on the unpaid principal balance hereof at the Prime Rate (as
hereinafter defined), all as hereafter further provided.
1. Payments.
(a) All amounts of principal and interest on this Note shall be due and
payable on the earlier of (i) three months after the date on which the Maker
ceases to be an employee of GP Strategies Corporation ("GP") for any reason and
(ii) the first anniversary of the Original Issue Date.
(b) Interest on this Note shall accrue daily on the unpaid principal
balance from the most recent date to which interest has been paid or, if no
interest has been paid on this Note, from the Original Issue Date, to but
excluding the next date of payment. Interest shall accrue at the prime lending
rate announced by Fleet Bank, N.A. (or its successor) from time to time (the
"Prime Rate"). Notwithstanding the foregoing, in no event shall any interest to
be paid hereunder exceed the maximum rate permitted by law and, in any such
event, this Note shall automatically be deemed amended to permit interest
charges at an amount equal to, but no greater than, the maximum rate permitted
by law.
(c) The Maker may, at his option, prepay all or any part of the
principal of this Note, without payment of any premium or penalty. All payments
on this Note shall be applied first to accrued interest hereon and the balance
to the payment of principal hereof.
(d) Payments of principal and interest on this Note shall be made by
check sent to the Holder's address set forth above or to such other address as
the Holder may designate for such purpose from time to time by written notice to
the Maker, in such coin or currency of the United States of America as at the
time of payment shall be legal tender for the payment of public and private
debts.
<PAGE>
(e) The obligations to make the payments provided for in this Note are
absolute and unconditional and not subject to any defense, set-off,
counterclaim, rescission, recoupment or adjustment whatsoever. The Maker hereby
expressly waives demand and presentment for payment, notice of nonpayment,
notice of dishonor, protest, notice of protest, bringing of suit and diligence
in taking any action to collect any amount called for hereunder, and shall be
directly and primarily liable for the payment of all sums owing and to be owing
hereon, regardless of and without any notice, diligence, act or omission with
respect to the collection of any amount called for hereunder.
2. Security
This Note is secured by a pledge by the Maker of certain shares of
common stock of GP pursuant to a Pledge Agreement, dated the Original Issue
Date, between the Maker and GP, and is entitled to the benefits thereof.
3. Events of Default.
The occurrence of any of the following events shall constitute an event
of default (an "Event of Default"):
(a) A default in the payment of any installment of principal
or interest on this Note, when and as the same shall become due and
payable.
(b) The entry of a decree or order by a court having
jurisdiction adjudging the Maker a bankrupt or insolvent, or approving
a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Maker, under federal bankruptcy
law, as now or hereafter constituted, or any other applicable federal
or state bankruptcy, insolvency or other similar law, and the
continuance of any such decree or order unstayed and in effect for a
period of 60 days; or the commencement by the Maker of a voluntary case
under federal bankruptcy law, as now or hereafter constituted, or any
other applicable federal or state bankruptcy, insolvency, or other
similar law, or the consent by him to the institution of bankruptcy or
insolvency proceedings against him, or the filing by him of a petition
or answer or consent seeking reorganization or relief under federal
bankruptcy law or any other applicable federal or state law, or the
consent by him to the filing of such petition or to the appointment of
a receiver, liquidator, assignee, trustee, sequestrator or similar
official of the Maker or of any substantial part of his property, or
the making by him of an assignment for the benefit of creditors, or the
admission by him in writing of his inability to pay its debts generally
as they become due, or the taking of action by the Maker in furtherance
of any such action.
4. Remedies Upon Default.
(a) Upon the occurrence of an Event of Default, the principal amount
then outstanding of, and the accrued interest on, this Note shall automatically
become immediately due and payable without presentment, demand, protest or other
formalities of any kind, all of which are hereby expressly waived by the Maker.
<PAGE>
(b) The Holder may institute such actions or proceedings in law or
equity as it shall deem expedient for the protection of its rights and may
prosecute and enforce its claims against all assets of the Maker, and in
connection with any such action or proceeding shall be entitled to receive from
the Maker payment of the principal amount of this Note plus accrued interest to
the date of payment plus reasonable expenses of collection including, without
limitation, attorney's fees and expenses.
5. Miscellaneous.
(a) Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall be mailed by certified mail, return
receipt requested, or by Federal Express, Express Mail or similar overnight
delivery or courier service or delivered (in person or by telecopy, telex or
similar telecommunications equipment) against receipt to the party to whom it is
to be given, at the address set forth in the first paragraph hereof, or to such
other address as the party shall have furnished in writing in accordance with
the provisions of this Section 5(a). Notice to the estate of any party shall be
sufficient if addressed to the party as provided in this Section 5(a). Any
notice or other communication given by certified mail shall be deemed given at
the time of certification thereof, except for a notice changing a party's
address which shall be deemed given at the time of receipt thereof. Any notice
given by other means permitted by this Section 5(a) shall be deemed given at the
time of receipt thereof.
(b) Upon receipt of evidence reasonably satisfactory to the Maker of
the loss, theft, destruction or mutilation of this Note (and upon surrender of
this Note if mutilated), the Maker shall execute and deliver to the Holder a new
Note of like date, tenor and denomination.
(c) No course of dealing and no delay or omission on the part of the
Holder in exercising any right or remedy shall operate as a waiver thereof or
otherwise prejudice the Holder's rights, powers or remedies. No right, power or
remedy conferred by this Note upon the Holder shall be exclusive of any other
right, power or remedy referred to herein or now or hereafter available at law,
in equity, by statute or otherwise, and all such remedies may be exercised
singly or concurrently.
(d) This Note may be amended only by a written instrument executed by
the Maker and the Holder. Any amendment shall be endorsed upon this Note, and
all future Holders shall be bound thereby.
(e) This Note shall be governed by and construed in accordance with the
laws of the State of New York, without giving effect to conflict of laws.
<PAGE>
IN WITNESS WHEREOF, the Maker has caused this Note to be executed and
dated the day and year first above written.
By:
<PAGE>
Exhibit 3
Form of pledge agreement of Jerome I. Feldman and Scott N. Greenberg
to GP Strategies Corporation
PLEDGE AGREEMENT
This PLEDGE AGREEMENT is made and entered into as of ________ by
__________ (the "Pledgor") in favor of GP STRATEGIES CORPORATION ("GP" and,
together with any assignee of the Note hereafter referred to, the "Secured
Party").
WHEREAS, on the date hereof, GP is lending the Pledgor the amount of
$________, evidenced by a promissory note, dated the date hereof (the "Note");
WHEREAS, the Pledgor will use such funds to pay a portion of the
purchase price for _________ shares (the "Pledged Shares") of the _________
Stock of GP; and
WHEREAS, as a condition to the making of such loan, GP has required the
Pledgor to pledge the Pledged Shares as security for the indebtedness
represented by the Note;
NOW, THEREFORE, in consideration of the foregoing premises and to
induce the Lender to loan the amount referred to above, and for other good and
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the Pledgor hereby agrees with the Secured Party as follows:
Section 1. Pledge. As security for the payment and performance when due
(whether upon demand or otherwise) of the indebtedness represented by, and any
other amounts payable by Pledgor under or in connection with, the Note, the
Pledgor hereby pledges, assigns, transfers and grants to the Secured Party a
lien on and security lien in and to all of the right, title and interest of the
Pledgor in and to the following property, in each case whether now existing or
hereafter acquired (collectively, the "Pledged Collateral"):
(a) the Pledged Shares, including the certificates
representing the Pledged Shares and any interest of the Pledgor in the
entries on the books of any financial intermediary pertaining to the
Pledged Shares;
(b) all dividends, cash, options, warrants, rights,
instruments, distributions, returns of capital, income, profits and
other property, interests or proceeds from time to time received,
receivable or otherwise distributed to the Pledgor in respect of or in
exchange for any or all of the Pledged Shares (collectively,
"Distributions"); and
<PAGE>
(c) all proceeds (as defined under the Uniform Commercial Code
as in effect in any relevant jurisdiction (the "UCC") or under other
relevant law) of any and all of the foregoing.
Section 2. No Release. Nothing set forth in this Agreement shall
relieve the Pledgor from the performance of any term, covenant, condition or
agreement on the Pledgor's part to be performed or observed under or in respect
of any of the Pledged Collateral or from any liability to any individual,
corporation, partnership or other legal entity ("Persons") under or in respect
of any of the Pledged Collateral or shall impose any obligation on the Secured
Party to perform or observe any such term, covenant, condition or agreement on
the Pledgor's part to be so performed or observed or shall impose any liability
on the Secured Party for any act or omission on the part of the Pledgor relating
thereto or for any breach of any representation or warranty on the part of the
Pledgor contained in this Agreement or the Note or under or in respect of the
Pledged Collateral or made in connection herewith or therewith.
Section 3. Delivery of Pledged Collateral. All certificates, agreements
or instruments representing or evidencing the Pledged Collateral, to the extent
not previously delivered to the Secured Party, shall immediately upon receipt
thereof by the Pledgor be delivered to and held by or on behalf of the Secured
Party pursuant hereto. All Pledged Collateral shall be in suitable form for
transfer by delivery or shall be accompanied by duly executed instruments of
transfer or assignment in blank (with signatures appropriately guaranteed), all
in form and substance satisfactory to the Secured Party. The Secured Party shall
have the right, at any time upon the occurrence and during the continuance of an
Event of Default (as defined in the Note) and without notice to the Pledgor, to
endorse, assign or otherwise transfer to or to register in the name of the
Secured Party or any of its nominees any or all of the Pledged Collateral. In
addition, upon the occurrence and during the continuance of an Event of Default,
the Secured Party shall have the right at any time to exchange certificates
representing or evidencing Pledged Collateral for certificates of smaller or
larger denominations.
Section 4. Supplements, Further Assurances. The Pledgor agrees that at
any time and from time to time, at the sole cost and expense of the Pledgor, the
Pledgor shall promptly execute and deliver all further instruments and
documents, including, without limitation, supplemental or additional UCC-1
financing statements, and take all further action that may be necessary or that
the Secured Party may reasonably request, in order to perfect and protect the
pledge, security interest and lien granted or purported to be granted hereby or
to enable the Secured Party to exercise and enforce its rights and remedies
hereunder with respect to any Pledged Collateral.
Section 5. Representations and Warranties. The Pledgor represents and
warrants as follows:
<PAGE>
(a) No Liens. The Pledgor is, and at the time of any delivery
of any Pledged Collateral to the Secured Party pursuant to Section 3
will be, the sole legal and beneficial owner of the Pledged Collateral,
and all such Pledged Collateral is on the date hereof, and will be, so
owned by the Pledgor free and clear of any lien except for the lien
created by this Agreement.
(b) Authorization, Enforceability. The Pledgor has full
authority and legal right to pledge and grant a security interest
pursuant to this Agreement in all the Pledged Collateral, and this
Agreement constitutes the legal, valid and binding obligation of the
Pledgor, enforceable against the Pledgor in accordance with its terms.
(c) No Consents, etc. No consent of any party and no consent,
authorization, approval, or other action by, and no notice to or filing
with, any governmental authority or regulatory body or other Person is
required for (i) the pledge by the Pledgor of the Pledged Collateral
pursuant to this Agreement or the execution, delivery or performance of
this Agreement by the Pledgor, (ii) the exercise by the Secured Party
of the voting or other rights provided for in this Agreement, or (iii)
the exercise by the Secured Party of the remedies in respect of the
Pledged Collateral pursuant to this Agreement.
(d) Delivery of Pledged Collateral; Filings. The delivery to
the Secured Party of all certificates representing the Pledged Shares
creates a valid and perfected first priority security interest in all
of the Pledged Collateral securing the payment of the Secured
Obligations pursuant to the UCC in effect in each applicable
jurisdiction.
Section 6. Voting Rights; Distributions; etc. (a) So long as no
Event of Default shall have occurred and be continuing:
(i) The Pledgor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Pledged Shares or
any part thereof for any purpose not inconsistent with the terms or
purpose of this Agreement or the Note; provided, that the Pledgor shall
not exercise such rights in any manner which may have an adverse effect
on the value of the Pledged Collateral or the security intended to be
provided by this Agreement.
(ii) The Pledgor shall be entitled to receive and retain, and
to utilize free and clear of the lien of this Agreement, any and all
cash Distributions, provided, that any and all such Distributions other
than cash shall be, and shall be forthwith delivered to the Secured
Party to hold as, Pledged Collateral and shall, if received by the
Pledgor, be received in trust for the benefit of the Secured Party, be
segregated from the other property or funds of the Pledgor, and be
forthwith delivered to the Secured Party as Pledged Collateral in the
same form as so received (with any necessary endorsement).
<PAGE>
(iii) The Secured Party shall be deemed without further action
or formality to have granted to the Pledgor all necessary consents
relating to voting rights and shall, if necessary, upon written request
of the Pledgor and at the Pledgor's sole cost and expense, from time to
time execute and deliver (or cause to be executed and delivered) to the
Pledgor all such instruments as the Pledgor may reasonably request in
order to permit the Pledgor to exercise the voting and other rights
which it is entitled to exercise pursuant to Section 6(a)(i) hereof and
to receive the Distributions which it is authorized to receive and
retain pursuant to Section 6(a)(ii) hereof.
(b) Upon the occurrence and during the continuance of an Event of
Default:
(i) All rights of the Pledgor to exercise the voting and other
consensual rights it would otherwise be entitled to exercise pursuant
to Section 6(a)(i) hereof without any action or the giving of any
notice shall cease, and all such rights shall thereupon become vested
in the Secured Party, which shall thereupon have the sole right to
exercise such voting and other consensual rights.
(ii) Subject to Section 9(a) hereof, all rights of the Pledgor
to receive Distributions which it would otherwise be authorized to
receive and retain pursuant to Section 6(a)(ii) hereof shall cease and
all such rights shall thereupon become vested in the Secured Party,
which shall thereupon have the sole right to receive and hold as
Pledged Collateral such Distributions.
(c) The Pledgor shall, at the Pledgor's sole cost and expense, from
time to time execute and deliver to the Secured Party appropriate instruments as
the Secured Party may request in order to permit the Secured Party to exercise
the voting and other rights which it may be entitled to exercise pursuant to
Section 6(b)(i) hereof and to receive all Distributions which it may be entitled
to receive under Section 6(b)(ii) hereof.
(d) All Distributions which are received by the Pledgor contrary to the
provisions of Section 6(b)(ii) hereof shall be received in trust for the benefit
of the Secured Party, shall be segregated from other funds of the Pledgor and
shall immediately be paid over to the Secured Party as Pledged Collateral in the
same form as so received (with any necessary endorsement).
Section 7. Transfers and Other liens; Principal Office. The Pledgor
agrees that it shall not (a) sell, convey, assign or otherwise dispose of, or
grant any option, right or warrant with respect to, any of the Pledged
Collateral or (b) create or permit to exist any lien upon or with respect to any
Pledged Collateral other than the lien and security interest granted to the
Secured Party under this Agreement.
Section 8. Reasonable Care. The Secured Party shall be deemed to have
exercised reasonable care in the custody and preservation of the Pledged
Collateral in its possession if such Pledged Collateral is accorded treatment
substantially equivalent to that which the Secured Party, in its individual
capacity, accords its own property consisting of similar instruments or
interests, it being understood that the Secured Party shall not have
responsibility for (a) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relating to any
Pledged Collateral, whether or not the Secured Party has or is deemed to have
knowledge of such matters, or (b) taking any necessary steps to preserve rights
against any Person with respect to any Pledged Collateral.
<PAGE>
Section 9. Remedies Upon Event of Default; Decisions Relating to
Exercise of Remedies. (a) If an Event of Default shall occur and be continuing,
the Secured Party shall have the right, in addition to other rights and remedies
provided for herein or otherwise available to it to be exercised from time to
time, (i) to retain and apply the Distributions to the Secured Obligations as
provided in Section 10 hereof, and (ii) to exercise all the rights and remedies
of a secured party on default under the Uniform Commercial Code in effect in the
State of New York at that time, and the Secured Party may also in its sole
discretion, without notice except as specified below, sell the Pledged
Collateral or any part thereof in one or more parcels at public or private sale,
at any exchange, broker's board or at any of the Secured Party's offices or
elsewhere, for cash, on credit or for future delivery, and at such price or
prices and upon such other terms as the Secured Party may deem commercially
reasonable. The Secured Party or any of its affiliates may be the purchaser of
any or all of the Pledged Collateral at any such sale and shall be entitled, for
the purpose of bidding and making settlement or payment of the purchase price
for all or any portion of the Pledged Collateral sold at such sale, to use and
apply any of the Secured Obligations owed to such Person as a credit on account
of the purchase price of any Pledged Collateral payable by such Person at such
sale. Each purchaser at any such sale shall acquire the property sold absolutely
free from any claim or right on the part of the Pledgor, and the Pledgor hereby
waives (to the fullest extent permitted by law) all rights of redemption, stay
and/or appraisal which it now has or may at any time in the future have under
any rule of law or statute now existing or hereafter enacted. The Pledgor
acknowledges and agrees that, to the extent notice of sale shall be required by
law, five days notice to the Pledgor of the time and place of any public sale or
the time after which any private sale is to be made shall constitute reasonable
notification. The Secured Party shall not be obligated to make any sale of
Pledged Collateral regardless of notice of sale having been given. The Secured
Party may adjourn any public or private sale from time to time by announcement
at the time and place fixed therefor, and such sale may, without further notice,
be made at the time and place to which it was so adjourned. The Pledgor hereby
waives any claims against the Secured Party arising by reason of the fact that
the price at which any Pledged Collateral may have been sold at such a private
sale was less than the price which might have been obtained at a public sale,
even if the Secured Party accepts the first offer received and does not offer
such Pledged Collateral to more than one offeree.
<PAGE>
(b) The Pledgor acknowledges that, by reason of certain prohibitions
contained in the Securities Act of 1933, as amended (the "Securities Act"), and
applicable state securities laws, the Secured Party may be compelled, with
respect to any sale of all or any part of the Pledged Collateral, to limit
purchasers to Persons who will agree, among other things, to acquire the Pledged
Collateral for their own account, for investment and not with a view to the
distribution or resale thereof. The Pledgor further acknowledges that any such
private sales may be at prices and on terms less favorable to the Secured Party
than those obtainable through a public sale without such restrictions
(including, without limitation, a public offering made pursuant to a
registration statement under the Securities Act), and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner and that the Secured Party shall have
no obligation to engage in public sales and no obligation to delay the sale of
any Pledged Collateral for the period of time necessary to permit the issuer
thereof to register it for a form of public sale requiring registration under
the Securities Act or under applicable state securities laws, even if such
issuer would agree to do so.
(c) If the Secured Party determines to exercise its right to sell any
or all of the Pledged Collateral, upon written request, the Pledgor shall from
time to time furnish to the Secured Party all such information as the Secured
Party may request in order to determine the number of securities included in the
Pledged Collateral which may be sold by the Secured Party as exempt transactions
under the Securities Act and the rules of the Securities and Exchange Commission
thereunder, as the same are from time to time in effect.
(d) In addition to any of the other rights and remedies hereunder, the
Secured Party shall have the right to institute a proceeding seeking specific
performance in connection with any of the agreements or obligations hereunder.
Section 10. Application of Proceeds. All Distributions held from time
to time by the Secured Party and all cash proceeds received by the Secured Party
in respect of any sale of, collection from, or other realization upon all or any
part of the Pledged Collateral pursuant to the exercise by the Secured Party of
its remedies as a secured creditor as provided in Section 9 hereof shall be
applied, together with any other sums then held by the Secured Party pursuant to
this Agreement, promptly by the Secured Party as follows:
First, to the payment of all reasonable costs and expenses,
fees, commissions and taxes of such sale, collection or other
realization, including, without limitation, compensation to the Secured
Party and its agents and counsel, and all expenses, liabilities and
advances made or incurred by the Secured Party in connection therewith,
together with interest on each such amount at the Prime Rate (as
defined in the Note) from and after the date such amount is due, owing
or unpaid until paid in full; and
Second, to the payment of all other fees, expenses, principal
of and interest on the Note, other amounts owing to the Secured Party
under the Note, together with interest on each such amount at the Prime
Rate from and after the date such amount is due, owing or unpaid until
paid in full.
Section 11. Expenses. The Pledgor will upon demand pay to the Secured
Party the amount of any and all expenses, including the reasonable fees and
expenses of its counsel and, after the occurrence of an Event of Default, the
allocated costs of the Secured Party's internal counsel and the reasonable fees
and expenses of any experts and agents which the Secured Party may incur in
connection with (a) the collection of the Secured Obligations, (b) the
enforcement and administration of this Agreement, (c) the custody or
preservation of, or the sale of, collection from, or other realization upon, any
of the Pledged Collateral, (d) the exercise or enforcement of any of the rights
of the Secured Party hereunder or (e) the failure by the Pledgor to perform or
observe any of the provisions hereof. All amounts payable by the Pledgor under
this Section 11 shall be due upon demand and shall be part of the Secured
Obligations.
<PAGE>
Section 12. No Waiver; Cumulative Remedies. (a) No failure on the part
of the Secured Party to exercise, no course of dealing with respect to, and no
delay on the part of the Secured Party in exercising, any right, power or remedy
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right, power or remedy hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
The remedies herein provided are cumulative and are not exclusive of any
remedies provided by law.
(b) In the event the Secured Party shall have instituted any proceeding
to enforce any right, power or remedy under this instrument by foreclosure,
sale, entry or otherwise, and such proceeding shall have been discontinued or
abandoned for any reason or shall have been determined adversely to the Secured
Party, then and in every such case, the Pledgor, the Secured Party and each
holder of any of the Secured Obligations shall be restored to their respective
former positions and rights hereunder with respect to the Pledged Collateral,
and all rights, remedies and powers of the Secured Party shall continue as if no
such proceeding had been instituted.
Section 13. Secured Party May Perform; Secured Party Appointed
Attorney-in-Fact. If the Pledgor shall fail to do any act or thing that it has
covenanted to do hereunder or any warranty on the part of the Pledgor contained
herein shall be breached, the Secured Party may (but shall not be obligated to)
upon three business days notice to the Pledgor specifying the action to be
taken, do the same or cause it to be done or remedy any such breach, and may
expend funds for such purpose. Any and all amounts so expended by the Secured
Party shall be paid by the Pledgor promptly upon demand therefor, with interest
at the Prime Rate during the period from and including the date on which such
funds were so expended to the date of repayment. The Pledgor hereby appoints the
Secured Party its attorney-in-fact with an interest, with full authority in the
place and stead of the Pledgor and in the name of the Pledgor, or otherwise,
from time to time in the Secured Party's discretion to take any action and to
execute any instrument consistent with the terms of this Agreement and the Note
which the Secured Party may deem necessary or advisable to accomplish the
purposes of this Agreement. The foregoing grant of authority is a power of
attorney coupled with an interest and such appointment shall be irrevocable for
the term of this Agreement. The Pledgor hereby ratifies all that such attorney
shall lawfully do or cause to be done by virtue hereof.
<PAGE>
Section 14. Indemnity. (a) Indemnity. The Pledgor agrees to indemnify,
pay and hold harmless the Secured Party and the officers, directors, employees,
agents, and affiliates of the Secured Party (collectively, the "Indemnitees")
from and against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, and reasonable costs (including,
without limitation, settlement costs), expenses or disbursements of any kind or
nature whatsoever (including, without limitation, the reasonable fees and
disbursements of counsel for such Indemnities in connection with any
investigative, administrative or judicial proceeding commenced or threatened,
whether or not such Indemnitee shall be designated a party thereto), which may
be imposed on, incurred by, or asserted against that Indemnitee, in any manner
(i) relating to or arising out of this Agreement or the Note (including, without
limitation, any misrepresentation by the Pledgor in this Agreement or the Note)
or (ii) arising out of a subpoena or document production request against an
Indemnified Party from a legal proceeding relating to the Pledgor or affiliate
thereof whether or not the Indemnified Party is a party thereto or target
thereof (collectively, the "indemnified liabilities"); provided, that the
Pledgor shall have no obligation to an Indemnitee hereunder with respect to
indemnified liabilities if it has been determined by a final decision (after all
appeals and the expiration of time to appeal) by a court of competent
jurisdiction that such indemnified liability arose from the gross negligence or
willful misconduct of that Indemnitee. To the extent that the undertaking to
indemnify, pay and hold harmless set forth in the preceding sentence may be
unenforceable because it is violative of any law or public policy, the Pledgor
shall contribute the maximum portion which it is permitted to pay and satisfy
under applicable law, to the payment and satisfaction of all indemnified
liabilities incurred by the Indemnities or any of them.
(b) Reimbursement. Any amounts paid by any Indemnitee as to which such
Indemnitee has the right to reimbursement shall constitute Secured Obligations
secured by the Pledged Collateral.
Section 15. Modification in Writing. No amendment, modification,
supplement, termination or waiver of or to any provision of this Agreement, nor
consent to any departure by the Pledgor therefrom, shall be effective unless in
writing and signed by the Secured Party. Any amendment, modification or
supplement of or to any provision of this Agreement, any waiver of any provision
of this Agreement, and any consent to any departure by the Pledgor from the
terms of any provision of this Agreement, shall be effective only in the
specific instance and for the specific purpose for which made or given. Except
where notice is specifically required by this Agreement or the Note, no notice
to or demand on the Pledgor in any case shall entitle the Pledgor to any other
or further notice or demand in similar or other circumstances.
Section 16. Release. Upon the payment in full in cash of all Secured
Obligations, the Secured Party shall, upon the request and at the sole cost and
expense of the Pledgor, forthwith assign, transfer and deliver to the Pledgor,
against receipt and without recourse to or warranty by the Secured Party, such
of the Pledged Collateral of the Pledgor as may be in the possession of the
Secured Party and as shall not have been sold or otherwise applied pursuant to
the terms hereof, on the order of and at the sole cost and expense of the
Pledgor, and such proper instruments and/or agreements (including UCC
termination statements on Form UCC-3) as may be reasonably requested by the
Pledgor acknowledging the termination of this Agreement and/or the release of
such Pledged Collateral.
Section 17. Notices. Any notice or other communication herein
required or permitted to be given shall be given in the manner set forth in the
Note.
<PAGE>
Section 18. Continuing Security Interest; Assignment. This Agreement
shall create a continuing security interest in the Pledged Collateral and shall
(a) be binding upon the Pledgor, its successors and assigns, and (b) inure,
together with the rights and remedies of the Secured Party hereunder, to the
benefit of the Secured Party and its successors, transferees and assigns; no
other Persons (including, without limitation, any other creditor of the Pledgor)
shall have any interest herein or any right or benefit with respect hereto.
Section 19. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS, EXCEPT TO THE EXTENT
THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR PROPERTY ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK.
Section 20. Consent to Jurisdiction and Service of Process; Waiver of
Jury Trial.
(a) The Pledgor HEREBY IRREVOCABLY AND UNCONDITIONALLY:
(i) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHER LINE DOCUMENTS TO
WHICH IT IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT
IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK AND APPELLATE COURTS FROM
ANY THEREOF;
(ii) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE
BROUGHT IN SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY
SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN
INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(iii) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR
PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR
CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE
PREPAID, TO THE BORROWER AT ITS ADDRESS AS PROVIDED IN SECTION 17
HEREOF OR AT SUCH OTHER ADDRESS OF WHICH THE SECURED PARTY SHALL HAVE
BEEN NOTIFIED PURSUANT THERETO;
(iv) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO
EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL
LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION; AND
(v) WAIVES THE RIGHT TO ASSERT ANY SETOFF, COUNTERCLAIM OR
CROSS-CLAIM IN RESPECT OF, AND ALL STATUTES OF LIMITATIONS WHICH MAY BE
RELEVANT TO, SUCH ACTION OR PROCEEDING.
<PAGE>
(b) THE PLEDGOR AND THE SECURED PARTY EACH HEREBY WAIVE ANY RIGHT TO A
TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF THIS AGREEMENT, THE
NOTE, OR ANY OTHER AGREEMENTS OR TRANSACTIONS RELATED HERETO OR THERETO.
Section 21. Severability of Provisions. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 22. Execution in Counterparts. This Agreement and any
amendments, waivers, consents or supplements hereto may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original,
but all such counterparts together shall constitute one and the same agreement.
Section 23. Headings. The Section headings used in this Agreement
are for convenience of reference only and shall not affect the construction of
this Agreement.
Section 24. Obligations Absolute. All obligations of the Pledgor
hereunder shall be joint and several and absolute and unconditional irrespective
of:
(a) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of the Pledgor;
(b) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Secured Obligations, or any
other amendment or waiver of or any consent to any departure from the
Note or any other agreement or instrument relating thereto;
(c) any exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to any
departure from any guarantee, for all or any of the Secured
Obligations;
(d) any exercise or non-exercise, or any waiver of any right,
remedy, power or privilege under or in respect of this Agreement or
the Note except as specifically set forth in a waiver granted pursuant
to the provisions of Section 15 hereof; or
(e) any other circumstances which might otherwise constitute
a defense available to, or a discharge of, the Pledgor.
<PAGE>
Section 25. Survival of Provisions.All representations, warranties and
covenants of the Pledgor contained herein shall survive the execution and
delivery of this Agreement, and shall terminate only upon the full and
indefeasible payment in cash and performance of all of the Secured Obligations.
Section 26. Entire Agreement.THIS WRITTEN AGREEMENT, TOGETHER WITH THE
OTHER AGREEMENTS REFERRED TO HEREIN, REPRESENTS THE FINAL AGREEMENT BETWEEN THE
PARTIES WITH RESPECT TO THE MATTERS COVERED HEREBY AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS BY THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, the Pledgor has duly executed and delivered this
Agreement as of the date first above written.
By:
<PAGE>
Exhibit 4
August 31, 1999
The Board of Directors
GP Strategies Corporation
9 West 57th Street, Suite 4170
New York, NY 10019
Gentlemen:
We are pleased to confirm our proposal to acquire by merger all of the
outstanding Common Stock and Class B Capital Stock of GP Strategies Corporation
(the "Company") for minimum prices of $13.00 per share for the Common Stock and
$14.625 per share for the Class B Capital Stock, payable in cash upon
consummation of the merger. Our proposal is not conditioned upon financing and
we are prepared to proceed promptly to negotiate and conclude appropriate
documentation as contemplated by the accompanying draft of a proposed merger
agreement among the Company, VS&A Communications Partners III, L.P. ("VS&A"), a
newly-formed Delaware limited liability company of which VS&A is the sole
member (the "LLC"), and a newly-formed subsidiary of the LLC.
VS&A is a $1 billion equity investment fund that is affiliated with Veronis
Suhler & Associates Inc. and is permitted to invest up to 20% of its capital
(or $200 million) in any single portfolio company so that there is no question
about VS&A's financial ability to consummate the merger.
It is contemplated that Jerome Feldman, Scott Greenberg and John McAuliffe,
directors, officers and stockholders of the Company, and John Moran and Douglas
Sharp, stockholders of the Company and officers of a subsidiary of the Company,
will be members of the LLC and will enter into certain other arrangements with
the LLC, including those set forth in the stockholders agreement among each of
them and VS&A that previously has been approved by you for purposes of Section
203 of the Delaware General Corporation Law only. Pursuant to that agreement,
Messrs. Feldman, Greenberg, McAuliffe, Moran and Sharp have agreed, among other
things, solely in their capacities as stockholders of the Company, not to
encourage, solicit, engage in or initiate discussions with any third party
concerning any merger, tender offer or similar transaction involving, or any
purchase of 10% or more of the assets or any equity securities of, the Company
or any of its subsidiaries. Each of them also has agreed, pursuant to that
agreement, to vote all of the shares in the Company owned by him in favor of
the merger and, solely in his capacity as a stockholder of the Company, to use
his best efforts to cause the consummation of the transaction contemplated
by the proposed merger agreement.
<PAGE>
We are hopeful that the Company's board will find VS&A's proposal satisfactory
and will move expeditiously to negotiate and execute a merger agreement on the
terms and substantially in the form submitted with this letter. Of course,
neither the Company nor VS&A will have any binding obligation with respect to
the proposed merger until the execution of a definitive merger agreement. If,
however, a definitive merger agreement has not been executed and delivered
prior to 5:00 p.m. Eastern Daylight Savings Time on September 21, 1999, our
proposal will be considered withdrawn without further action on our part.
Our proposal is of course subject to the satisfactory completion of our
due diligence investigation of the Company.
We look forward to your prompt response to our proposal. We are prepared
to immediately commence negotiation of the proposed merger agreement.
The confidentiality agreement previously executed by VS&A shall remain in
effect.
Sincerely yours,
VS&A Communications Partners III, L.P.
By: VS&A Equities III, LLC, its general partner
By_______________________
Jeffrey T. Stevenson
President and Senior Managing Member
<PAGE>
Exhibit A
Agreement With Stockholders of GP Strategies Corporation
<PAGE>
Exhibit 5
Execution Copy
AGREEMENT WITH STOCKHOLDERS of GP STRATEGIES CORPORATION
August 31, 1999
The parties to this agreement are VS&A Communications Partners III,
L.P., a Delaware limited partnership ("VS&A"), and Jerome Feldman, Scott
Greenberg, John McAuliffe, John Moran and Douglas Sharp, who are stockholders of
GP Strategies Corporation (the "Company") and executive officers of the Company
or a subsidiary of the Company and are collectively referred to below as the
"Stockholders."
VS&A proposes to submit to the Company's board of directors, as soon
as practicable after execution of this agreement, an offer (the "Offer") to
acquire by merger all of the Company's outstanding Common Stock and Class B
Capital Stock. VS&A's offer will be accompanied by a proposed merger agreement
(the "Merger Agreement") among the Company, VS&A, a newly-formed Delaware
limited liability company of which VS&A is the sole member (the "LLC"), and a
newly-formed subsidiary of the LLC, pursuant to which the subsidiary of the LLC
would be merged (the "Merger") into the Company and the Company's stockholders
would be entitled to receive, upon consummation of the Merger, the minimum sums
of $13 a share for the Company's Common Stock and $14.625 a share for the
Company's Class B Capital Stock. A copy of the Offer and the proposed Merger
Agreement is attached to this agreement.
As a condition to submission of its offer and entering into the
Merger Agreement, VS&A has required that the Stockholders agree to the terms
of this agreement and, as an inducement to VS&A to submit its offer and enter
into the Merger Agreement and proceed with the merger contemplated
thereby, the Stockholders have agreed to the terms set forth below.
Capitalized terms used in this agreement and not otherwise defined shall have
the meanings given to them in the Merger Agreement.
It is therefore agreed as follows:
1. The Stockholders' Obligations Relating to the Merger.
<PAGE>
(a) No Solicitation, etc. Upon execution of this agreement, each of
the Stockholders immediately shall cease any any activities, discussions or
negotiations with other parties with respect to any Acquisition Proposal (as
defined below) or with respect to any arrangement between the Stockholder and
any third party that has made or is considering making any Acquisition
Proposal, and during the term of this agreement (as provided in section 5)
none of the Stockholders shall, directly or indirectly, (i) encourage, solicit,
or initiate discussions or negotiations with, or provide any information to,
anyone other than VS&A (and its affiliates or representatives) concerning any
Acquisition Proposal or any related arrangement or (ii) engage in any
discussion or negotiation with anyone other than VS&A (and its affiliates or
representatives) with respect to any Acquisition Proposal or with respect
to any related employment or other arrangement (including, but not limited
to, any "phantom equity," "equity rollover, " or other equity participation
arrangement). During the term of this agreement, each of the Stockholders
immediately shall communicate to VS&A in writing the terms of any inquiry or
proposal he receives, or any discussion that he has, with respect to any
Acquisition Proposal solely in his capacity as a stockholder (and not in
his capacity as a director or officer of the Company) and shall immediately
inform VS&A in writing of the identity of the party making such inquiry or
proposal or with whom he has such a discussion. As used in this agreement, the
term "Acquisition Proposal" means any proposal or offer with respect to a
merger, reorganization, share exchange, tender offer, consolidation or similar
transaction involving, or any purchase of 10% or more of the assets or any
equity securities of, the Company or any of its subsidiaries.
(b) Best Efforts. Subject to the terms and conditions of this
agreement, each of the Stockholders shall use his best efforts to cause the
consummation of the transactions contemplated by this agreement and the Merger
Agreement. Without limiting the generality of the foregoing, each of the
Stockholders shall use his best efforts to(i) cause the Company to negotiate in
good faith, and to execute and deliver, the Merger Agreement, (ii) cause the
Company to perform its obligations under the Merger Agreement, and (iii) cause
the fulfillment at the earliest practicable date of all of the conditions to
the obligations of the parties to consummate the Merger pursuant to the
Merger Agreement.
(c) Limitation on Stockholders' Obligations. Nothing in this agreement
shall limit or otherwise interfere with the Stockholders' actions as directors
or officers. Without limiting the generality of the foregoing, each of the
Stockholders may, in his capacity as a director of the Company, vote in the
manner determined by him in his sole discretion on any matter submitted to the
vote of directors.
<PAGE>
(d) Exercise of Options. Prior to the record date to be set forth in
the Merger Agreement for determining the holders of outstanding shares of the
Company's Common Stock, each of the Stockholders, provided that he has received
the loan described in the next sentence, shall exercise all of the then
exercisable options he holds for the purchase of any shares of either Common
Stock or Class B Capital Stock of the Company; provided however that, Messrs.
McAuliffe, Moran and Sharp shall not be required to exercise their options
unless prior to the record date the Company has received an Acquisition Proposal
from a third party or a third party has expressed its intention orally or in
writing to the Company or to any of its officers or directors, or in an SEC
filing, or otherwise, to make an Acquisition Proposal. Upon any exercise of an
option after the approval of the Merger by the special committee created by the
board of directors to evaluate the Merger, VS&A shall provide to the exercising
Stockholder a loan in the amount he requires to make payment of the purchase
price payable for the shares to be acquired upon exercise and of any related
tax liability; the loan shall be payable on June 30, 2009 (subject to
acceleration in the event that the Merger is not consummated, as provided
in the last sentence of this section 1(d)), shall bear interest (which shall
accrue and be payable only as provided below) at the rate of 7 % a year, and
shall be secured prior to the Merger by all of the shares of Common Stock
or Class B Capital Stock owned by the Stockholder (subject to any liens
existing on the date hereof) and after the Merger by all of the Stockholder's
membership interests in the LLC (as an "Investor Member" and as a "Management
Member"). Upon the consummation of the Merger, the loan by VS&A to the
Stockholders shall be acquired by the Company from VS&A and any previously
outstanding loan from the Company to any Stockholder shall be amended to be
on the same terms as, and consolidated into one loan with, the loan acquired by
the Company from VS&A. The loans shall be full recourse prior to the Merger,
but after the Merger the loans shall be recourse only to the Stockholders'
membership interests in the LLC. Upon any distribution by the LLC with respect
to the membership interests in the LLC, the distribution to each of the
Stockholders shall be applied to repay the loan to that Stockholder. In
addition, upon any sale by any of the Stockholders of any portion of the
membership interests held by him as an "Investor Member" of the LLC, to the
extent necessary, all or a portion of the proceeds (less the amount of
income taxes payable by him as a result of the sale) shall be applied to
repay the loan to the Stockholder so that after the sale and application of
the proceeds, the ratio of the then outstanding amount of the loan, including
accrued interest, to the fair market value of the membership interests then
pledged shall be the same as that ratio was on the date of consummation of the
merger. Any distribution or sale proceeds applied to repayment of any loan
pursuant to this provision shall be allocated first to accrued interest, then
to principal and then to any costs, fees and expenses related to the collection
of the loan. If for any reason the Merger is not consummated, any loan by VS&A
to a Stockholder hereunder shall be payable on the date that is 14 months
after the exercise of his options pursuant to this section 1(d).
(e) Voting Agreement. Each of the Stockholders shall, at any meeting
of the holders of the Company's Common Stock or in connection with any written
consent of the holders of the Company's Common Stock, vote (or cause to be
voted) all of the shares in the Company then owned of record by him or
which he otherwise has the right to vote (or direct the vote) (i) in favor of
the Merger, the approval of the terms of the Merger Agreement and each of the
other actions contemplated by the Merger Agreement and by this agreement,
and any actions required in furtherance of the Merger Agreement, and
(ii) against any Acquisition Proposal and against any other action or
agreement that would impede, frustrate, prevent or nullify this agreement
or the transactions contemplated by this agreement or the Merger Agreement.
None of the Stockholders shall be required to take any action in accordance
with this provision, however, to the extent that he shall have been advised
by counsel in writing that the taking of any such action would be
reasonably likely to violate the Stockholder's fiduciary duties to the
Company's stockholders under applicable law, but if the Company enters into
a definitive agreement with respect to a Superior Proposal, each of the
Stockholders shall use his best efforts to cause the Company to pay to VS&A the
Termination Fee. The terms "Superior Proposal" and "Termination Fee" are
defined in the Merger Agreement.
(f) Exchange of Shares for Shares of the LLC. Immediately prior to the
Merger, each of the Stockholders shall contribute to the LLC a portion
determined by the Stockholder of the shares of the Company's Common Stock and
Class B Capital Stock held of record or beneficially by him, including the
shares acquired upon exercise of options, but not less than the number of such
shares that represent 60% of the value of all of such shares, and each of the
Stockholders shall be entitled to receive in exchange for those shares a
membership interest in the LLC in the proportion that the value of the shares
contributed by that Stockholder (based on the price paid for shares of that
class upon consummation of the Merger) bears to the total equity of the LLC.
<PAGE>
(g) No Transfer of Shares or Inconsistent Arrangements. Except as
contemplated by this agreement or the Merger Agreement, none of the
Stockholders shall (i) transfer (which term shall include, without limitation,
any sale, gift, pledge or other disposition), or consent to any transfer of,
any or all of the shares in the Company (or any options to acquire shares)
held by him of record or beneficially on the date of this agreement or
hereafter acquired by him, other than by operation of law (conversion of
shares upon a merger resulting from a Superior Proposal or exercise of options
not being considered a violation of this covenant), (ii) enter into any
contract, option or other agreement or understanding with respect to any
transfer of any or all of those shares (or options) or any interest
therein, (iii) grant any proxy, power-of-attorney or other authorization
in or with respect to those shares, (iv) deposit any of those shares into
a voting trust or enter into a voting agreement or arrangement with respect to
any of those shares, or (v) take any other action that would in any way
restrict, limit or interfere with the performance of the Stockholder's
obligations under this agreement or with the transactions contemplated by this
agreement or the Merger Agreement. None of the Stockholders shall request that
the Company register the transfer (book-entry or otherwise) of any certificate
or uncertificated interest representing any of the shares in the Company that he
owns of record or beneficially, unless such transfer is made in
compliance with this agreement.
(h) Waiver of Appraisal Rights. Each of the Stockholders waives any
right of appraisal or right to dissent from the Merger.
(i) Further Assurances. Each of the Stockholders shall from time to
time, at VS&A's request and without further consideration, take such further
lawful action and execute and deliver such additional documents as may be
necessary or desirable to carry out the terms of this agreement and to
consummate, in the most expeditious manner practicable, the transactions
contemplated by this agreement and the Merger Agreement.
2. Authorization to Disclose. Each of the Stockholders authorizes
VS&A, the Company, and the LLC to publish and disclose in the documents relating
to the Merger, including the Proxy Statement (and all documents and schedules
filed with the SEC), his identity and ownership of the common stock, capital
stock and outstanding options of the Company and the nature of his commitments,
arrangements and understandings under this agreement.
3. Representations and Warranties of the Stockholder. Each of the
Stockholders represents and warrants to VS&A (as to himself) as follows:
<PAGE>
(a) Power; Binding Agreement. The Stockholder has the full right,
power and authority to enter into and perform all of his obligations under this
agreement; the execution, delivery and performance of this agreement by the
Stockholder will not violate any other agreement to which the Stockholder is a
party or by which the Stockholder is bound (including, but not limited to, any
voting agreement, proxy arrangement, pledge agreement, shareholders agreement
or voting trust) or violate any order, writ, injunction, decree, judgment,
statute, rule or regulation applicable to the Stockholder or any of his
properties or assets; and this agreement has been duly and validly executed
and delivered by the Stockholder and constitutes a legal, valid and binding
obligation of the Stockholder, enforceable against the Stockholder in
accordance with its terms. There is no beneficiary or holder of a voting
trust certificate or other interest of any trust of which the Stockholder
is a trustee whose consent is required for the execution and delivery of this
agreement or the consummation by the Stockholder of the transactions
contemplated by this agreement.
(b) No Approvals. Except for filings under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and any filings
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), no
filing with, and no permit, authorization, consent or approval of, any
governmental entity is required for the execution and delivery of this
agreement by the Stockholder and the consummation by the Stockholder of the
transactions contemplated by this agreement.
(c) Ownership of Shares. The Stockholder is the record and beneficial
owner of the number of Common and Class B shares of the Company and options
(whether or not presently exercisable) to purchase the number of Common or
Class B shares of the Company set forth opposite the Stockholder's name on
schedule 3(c) to this agreement, and those shares constitute all of the
shares of the Company's Common Stock and Class B Capital Stock owned of record
or beneficially by the Stockholder (or which the Stockholder is entitled to
purchase pursuant to the exercise of options). Except as set forth on
schedule 3(c), subject to applicable securities laws and the terms of this
agreement, the Stockholder has sole voting power and sole power to issue
instructions with respect to the matters set forth in section 1 of this
agreement, sole power of disposition, sole power of conversion, sole power to
demand appraisal rights, and sole power to agree to all of the matters set
forth in this agreement, in each case with respect to all of the shares in the
Company beneficially owned by him, with no limitations, qualifications or
restrictions on those rights.
(d) Title to Shares. Except as set forth on schedule 3(c), the shares
in the Company owned by the Stockholder of record or beneficially and all
options held by the Stockholder are now, and at all times prior to consummation
of the Merger will be, owned by the Stockholder, or by a nominee or custodian
for the benefit of the Stockholder, free and clear of all liens, claims and
encumbrances. All shares in the Company hereafter acquired by the Stockholder
upon exercise of options will at all times from the date of acquisition to the
date of consummation of the Merger be owned by the Stockholder, or by a nominee
or custodian for the benefit of the Stockholder, free and clear of any claims,
liens and encumbrances, except for the pledge of those shares as security for
the amount borrowed by the Stockholder to finance the purchase of those shares.
(e) Litigation. There is no litigation, proceeding or governmental
investigation pending or, to the best knowledge of the Stockholder, threatened,
or any order, injunction or decree outstanding, against the Company or the
Stockholder that would prevent or interfere with the consummation of the Merger
and the transactions contemplated by this agreement.
(f) No Finder's Fees. No broker, investment banker, or financial
advisor is entitled to any fee or commission in connection with the
transactions contemplated by this agreement based upon arrangements made by or
on behalf of the Stockholder.
<PAGE>
4. Representations and Warranties of VS&A. VS&A represents and
warrants to each of the Stockholders as follows:
(a) Power; Binding Agreement. VS&A has the partnership power and
authority to enter into and perform all of its obligations under this agreement
and the execution, delivery and performance of this agreement by VS&A has been
duly authorized by all necessary partnership action; the execution, delivery
and performance of this agreement by VS&A will not violate any other agreement
to which VS&A is a party or by which VS&A is bound or violate any order, writ,
injunction, decree, judgment, statute, rule or regulation applicable to VS&A or
any of its properties or assets; and this agreement has been duly and validly
executed and delivered by VS&A and constitutes a legal, valid and binding
agreement of VS&A, enforceable against it in accordance with its terms.
(b) No Approvals. Except for filings under the HSR Act and the
Exchange Act that may be required in connection with the Merger Agreement, no
filing with, and no permit, authorization, consent or approval of, any
governmental entity is necessary for the execution of this agreement by VS&A
and the consummation by VS&A of the transactions contemplated by this
agreement.
5. Term.
This agreement shall continue in effect until the earliest of (a)
consummation of the Merger pursuant to the Merger Agreement, (b) August 31,
2000 and (c) if the Offer has not been submitted to the Company's board of
directors by such date, September 1, 1999. If, however, at any time prior to
execution and delivery of the Merger Agreement VS&A determines not to
proceed with the transactions contemplated by the Offer at the prices set
forth in the Offer or at higher prices (notice of which shall be given by VS&A
to the Stockholders in good faith promptly after that determination), or
if after execution and delivery of the Merger Agreement either party
terminates the Merger Agreement and the Stockholders have not materially
breached any of their obligations under Sections 1 and 3 of this agreement,
this agreement shall thereupon terminate. The termination of this agreement
pursuant to this provision shall not relieve any party of liability for any
prior breach of its or his obligations under this agreement.
6. Investment Banking Fee; Advisory Services.
(a) Upon the consummation of the Merger, the LLC shall pay to
Veronis, Suhler & Associates Inc. or its affiliate ("VS&A, Inc."), for
investment banking services rendered to the LLC in connection with the
Merger, an investment banking fee in an amount equal to 1% of the sum of
(i) the aggregate amount payable for the Company's shares of Common Stock
and Class B Capital Stock pursuant to the Merger Agreement (assuming for this
purpose that all shares of the Common Stock and Class B Capital Stock
contributed to the LLC had been converted to cash on the Merger at the
respective prices set forth in the Merger Agreement) and (ii) the aggregate
amount of the Company's outstanding debt immediately prior to the Merger.
<PAGE>
(b) After consummation of the Merger, for so long as VS&A, Inc.
maintains a direct or indirect ownership interest in the Company, VS&A, Inc.
shall be retained by the Company to provide investment banking advisory
services for a fee at the rate of $200,000 a year; in addition, VS&A, Inc.
shall be the exclusive advisor to the Company with respect to acquisitions,
divestitures, private equity or debt issuances, mergers or consolidations
or similartransactions, or the sale of all or substantially all of the
Company's assets, whether in one or in a series of transactions or the
sale of any material assets, and VS&A, Inc. shall be entitled to its
customary fees for services in connection with each such transaction.
(c) The Stockholders shall have no personal obligation with respect to
the payment of fees to VS&A for the services described in this Section 6 or to
cause the Company to pay such fees.
7. Definitions.
(a) Shares. Any reference in this agreement to the shares owned of
record or beneficially by a Stockholder shall be deemed to include shares
hereafter acquired by the Stockholder upon any stock dividend or distribution
or any change in the Company's Common Stock or Class B Capital Stock by
reason of any split-up, recapitalization, combination, exchange of shares
or similar corporate action or upon the exercise of any options.
(b) Beneficial Ownership. For the purpose of this agreement,
beneficial ownership with respect to any shares means beneficial ownership as
determined pursuant to Rule 13d-3 under the Exchange Act, including pursuant to
any agreement, arrangement or understanding, whether or not in writing.
8. Miscellaneous.
(a) Reliance by VS&A. Each of the Stockholders acknowledges that he
understands that, in making its proposal to the Company and undertaking the
related expense, VS&A is relying upon the execution and performance by the
Stockholders of their respective obligations under this agreement.
(b) Entire Agreement; No Oral Change. This agreement contains a
complete statement of all of the arrangements among the parties with respect to
its subject matter, supersedes all prior agreements and understandings, written
and oral, among the parties with respect to that subject matter, and cannot be
changed or terminated except by an agreement in writing signed by all parties.
(c) Binding Agreement. This agreement and the obligations under this
agreement shall attach to the shares owned of record and beneficially by each
of the Stockholders and shall be binding upon any person or entity to which
legal or beneficial ownership of those shares shall pass, whether by operation
of law or otherwise, including, but not limited to, each of the
Stockholders' guardians, heirs, executors, administrators or successors. The
transferee of any shares shall remain liable for the performance of all
obligations of the transferor under this agreement.
<PAGE>
(d) Assignment. None of the parties may assign any of its or his
rights or delegate any of its or his duties under this agreement without the
prior written consent of the other parties.
(e) Notices. All notices and other communications hereunder shall be
in writing and shall be deemed given if delivered personally, telecopied (which
has been 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):
(i) if to VS&A, to:
VS&A Communications Partners III, L.P.
350 Park Avenue
New York, New York 10022
Att: Jeffrey T. Stevenson
President and
Jonathan D. Drucker, Esq.,
General Counsel
with a copy to:
Proskauer Rose LLP
1585 Broadway
New York, New York 10036
Att: Bertram A. Abrams, Esq.
(ii) if to the Stockholders, to:
Jerome Feldman
145 West Patent Road
Bedford Hills, NY 10507
with a copy to:
Rogers & Wells LLP
200 Park Avenue
New York, NY 10166-0153
Attn: L. Martin Gibbs, Esq.
Scott Greenberg
9 Eli Circle
Morganville, New Jersey 07751
John McAuliffe
4035 Log Trail Way
<PAGE>
Reistertown, Maryland 21136
John Moran
48 Longview Avenue
Randolph, New Jersey 07869
Douglas Sharp
4410 Lantern Drive
Titusville, Florida 32796
(f) Severability. Whenever possible, each provision or portion of any
provision of this agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision or portion of
any provision of this agreement is held to be invalid, illegal or unenforceable
in any respect under any applicable law or rule in any jurisdiction,
such invalidity, illegality or unenforceability will not affect any other
provision or portion of any provision in such jurisdiction, and this agreement
shall be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision or portion of any provision had
not been contained in this agreement.
(g) Specific Performance. Each of the Stockholders acknowledges that
the Company's business is of a special, unique and extraordinary character, and
that any default in the performance of his obligations under this agreement
could not be adequately compensated for by damages. Accordingly, if a
Stockholder defaults in the performance of his obligations under this
agreement, VS&A shall be entitled, in addition to any other remedies that it
may have, to enforcement of this agreement by a decree of specific performance
requiring the Stockholder to fulfill those obligations, without the
necessity of showing actual damages and without any bond or other security
being required.
(h) Remedies Cumulative. All rights, powers and remedies provided
under this agreement or otherwise available in respect of this agreement at law
or in equity shall be cumulative and not alternative, and the exercise of any
right, power or remedy by any party shall not preclude the simultaneous or
later exercise by that party of any other right, power or remedy.
(i) No Waiver. The failure of any party to exercise any right, power
or remedy provided under this agreement or otherwise available at law or in
equity, or to insist upon compliance by any other party with its obligations
under this agreement, and any custom or practice of the parties at variance
with the terms of this agreement, shall not constitute a waiver by that party
of its right to exercise any such right, power or remedy.
(j) No Third Party Beneficiaries.This agreement is not intended to be
for the benefit of, and shall not be enforceable by, any person or entity who
or which is not a party to this agreement.
<PAGE>
(k) Governing Law. This agreement shall be governed by and construed
in accordance with the laws of the State of Delaware applicable to agreements
made and to be performed in Delaware.
(l) Jurisdiction. The courts of the State of Delaware and the United
States District Court for the Southern District of New York shall have
jurisdiction over the partie 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
8(e)) or any other manner permitted by law, and irrevocably agrees to be bound
by any judgment rendered thereby in connection with this agreement. These
consents to jurisdiction shall not be deemed to confer rights on any person
other than the parties to this agreement.
(m) Headings. The headings in this agreement are for convenience of
reference only and are not intended to be part of or to affect the meaning or
interpretation of this agreement.
[END OF TEXT-SIGNATURE PAGES FOLLOW]
<PAGE>
VS&A COMMUNICATIONS PARTNERS III, L.P.
By: VS&A Equities III, LLC, its general partner
By:_____________________________
Jeffrey T. Stevenson, President and
Senior Managing Member
-------------------------------------
Jerome Feldman
-------------------------------------
Scott Greenberg
------------------------------------
John McAuliffe
-------------------------------------
John Moran
------------------------------------
Douglas Sharp
[Signature Page to Stockholders Agreement]
<PAGE>
Schedule 3(c)
<TABLE>
<CAPTION>
OPTION SHARES Total Common Total Class B
Class B Stock Stock
Stockholder Common Stock Stock (on a fully (on a fully
diluted basis) diluted basis)
Common Class B
<S> <C> <C> <C> <C> <C> <C>
Jerome Feldman
Scott Greenberg
John McAuliffe
John Moran
Douglas Sharp
</TABLE>
[See Attached]
