Exhibit 10.4
Agreement, dated as of May 3, 2002, between GP Strategies Corporation,
a Delaware corporation (the "Company"), having an address at ▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (the "Investor"), having an
address at ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
1. Subscription. The Investor is hereby purchasing from the Company 100,000
shares (the "Shares") of common stock, par value $.01 per share (the "Common
Stock"), of the Company for an aggregate purchase price (the "Purchase Price")
of $350,000.
2. Closing. The closing shall take place on May 3, 2002 at the office of
the Company located at ▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. Payment of
the Purchase Price is being made by electronic wire transfer in accordance with
the following instructions:
Account Name: GP Strategies Corporation
Bank Name: Fleet Bank
Bank Address:
ABA#:
Account #:
or by delivery of a bank check or certified check made payable to "GP Strategies
Corporation" against delivery to the Investor of a certificate representing the
Shares.
3. Disposition.
The Investor acknowledges and agrees that the Shares are not registered
under the Securities Act of 1933, as amended (the "Securities Act"), or any
foreign or state securities laws. The Investor agrees that the Shares will not
be sold, offered for sale, transferred, pledged, hypothecated, or otherwise
disposed of except in compliance with the Securities Act and applicable foreign
and state securities laws. The Investor has been advised that, except as set
forth in Section 5, the Company has no obligation, and does not intend, to cause
the Shares to be registered under the Securities Act or the securities law of
any other jurisdiction or to comply with the requirements for any exemption
under the Securities Act, including but not limited to those provided by Rule
144 and Rule 144A promulgated under the Securities Act, or under the securities
law of any other jurisdiction.
4. Restrictive Legends.
Each certificate evidencing Shares shall be stamped or otherwise imprinted
with a legend in substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR ANY STATE SECURITIES LAW. THESE
SECURITIES MAY NOT BE PLEDGED, HYPOTHECATED, SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
ANY EXEMPTION THEREFROM UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES
LAW."
(b) The legend set forth in Section 4(a) shall be removed and the Company
shall issue a certificate without such legend to the holder thereof upon the
earliest to occur of (i) a registration statement with respect to the sale of
such securities shall have become effective under the Securities Act and such
securities shall have been disposed of in accordance with such registration
statement, (ii) the securities shall have been sold to the public pursuant to
Rule 144 (or any successor provision) under the Securities Act, or (iii) such
securities may be sold by the holder without restriction or registration under
Rule 144(k) under the Securities Act (or any successor provision).
5. Registration of Shares.
(a) The Company shall, at its expense, (i) not later than September 30,
2002, file a registration statement on Form S-3 (the "Resale Registration
Statement") to register under the Securities Act the resale by the Investor of
the Shares, (ii) use its commercially reasonable efforts to cause the Resale
Registration Statement to become effective under the Securities Act on the
earliest possible date and to remain effective until two years from the date
hereof or such earlier date as the Investor owns no Shares, and (iii) after the
Resale Registration Statement is declared effective under the Securities Act,
furnish the Investor with such number of copies of the prospectus (the
"Prospectus") included in the Resale Registration Statement as the Investor may
reasonably request to facilitate the resale of the Shares.
(b) If at any time during the period that the Resale Registration Statement
is effective under the Securities Act an event (an "Event") shall have occurred
that has caused the Prospectus to contain an untrue statement of a material fact
or to omit to state any material fact required to be stated therein or necessary
to make the statements therein not misleading in light of the circumstances
under which they were made, the Company shall (i) give the Investor a notice
(the "No-Sell Notice") that an Event has occurred, (ii) promptly (or, if in the
reasonable judgment of the Company disclosure of the Event would be detrimental
to the Company, promptly after the earlier of (A) the date that disclosure of
the Event would not be detrimental to the Company and (B) 90 days after the date
of the No-Sell Notice) use its commercially reasonable efforts to cause the
Resale Registration Statement not to contain an untrue statement of a material
fact or to omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances under which they were made, and (iii) give the Investor a notice
(the "Sell Notice") when the Resale Registration Statement does not contain an
untrue statement of a material fact or to omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances under which they were made. The
Investor shall keep the existence and contents of any No-Sell Notice
confidential, and shall not sell any Shares pursuant to the Resale Registration
Statement after it has received a No-Sell Notice until it has received a
subsequent Sell Notice.
(c) In connection with the Resale Registration Statement, the Investor
shall furnish to the Company such information as the Company shall reasonably
request.
(d) To the extent permitted by law, the Company will indemnify and hold
harmless the Investor against any losses, claims, damages, expenses or
liabilities (collectively, "Losses") to which the Investor may become subject
under the Securities Act, the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), other federal or state law, or otherwise, insofar as such
Losses (or actions or proceedings, whether commenced or threatened, in respect
thereof), arise out of or are based upon any of the following statements or
omissions (each, a "Violation"): (i) any untrue statement or alleged untrue
statement of a material fact contained in the Resale Registration Statement,
including any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, or (ii) the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances in which they were
made, not misleading. Notwithstanding anything contained in this Agreement to
the contrary, the indemnity agreement contained above in this Section 5(d) shall
not apply (i) to amounts paid in settlement of any such Loss, action or
proceeding if such settlement is effected without the prior written consent of
the Company, which consent shall not be unreasonably withheld, or (ii) to any
such Loss, action or proceeding arising out of or based upon a Violation (A)
which occurs in reliance upon and in conformity with written information
furnished by the Investor expressly for use in connection with the Resale
Registration Statement or (B) contained in a preliminary prospectus but not in
the prospectus, as then amended or supplemented, if such prospectus was timely
made available by the Company pursuant to Section 5(a)(iii).
(e) To the extent permitted by law, the Investor will indemnify and hold
harmless, to the same extent and in the same manner set forth in Section 5(d),
the Company, each of its directors, each of its officers who have signed the
Resale Registration Statement, each person, if any, who controls the Company
within the meaning of the Securities Act or the Exchange Act, and any other
stockholder selling securities pursuant to the Resale Registration Statement
against any Losses, joint or several, to which any of them may become subject
under the Securities Act, the Exchange Act, other federal or state law, or
otherwise, insofar as such Losses (or actions or proceedings, whether commenced
or threatened, in respect thereof) arise out of or are based upon any Violation,
in each case to the extent (and only to the extent) that such Violation occurs
in reliance upon and in conformity with written information furnished by the
Investor expressly for use in connection with the Resale Registration Statement.
(f) Promptly after receipt by an indemnified party under this Section 5 of
notice of the commencement of any action or proceeding (including any
governmental action or proceeding), such indemnified party will, if a claim in
respect thereof is to be made against any indemnifying party under this Section
5, deliver to the indemnifying party a written notice of the commencement
thereof, and the indemnifying party shall have the right to participate in, and,
to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume control of the defense thereof
with counsel reasonably satisfactory to the indemnified party; provided,
however, that an indemnified party shall have the right to retain its own
counsel, with the fees and expenses to be paid by the indemnifying party, if, in
the reasonable opinion of counsel for the indemnifying party, representation of
such indemnified party by the counsel retained by the indemnifying party would
be inappropriate due to actual or potential differing interests between such
indemnified party and any other party represented by such counsel in such
proceeding. Notwithstanding anything to the contrary contained herein, the
Company shall not be required pay for more than one legal counsel for all
stockholders selling securities pursuant to the Resale Registration Statement,
such legal counsel to be selected by the selling stockholders holding a majority
in interest of the securities being sold. The failure to deliver written notice
to the indemnifying party within a reasonable time of the commencement of any
such action or proceeding shall relieve such indemnifying party of any liability
to the indemnified party under this Section 5 only to the extent such failure
has been prejudicial to its ability to defend such action, but the omission so
to deliver written notice to the indemnifying party will not relieve it of any
liability that it may have to any indemnified party otherwise than under this
Section 5.
(g) To the extent any indemnification by an indemnifying party is
prohibited or limited by law, the indemnifying party agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be liable
under this Section 5 to the extent permitted by law; provided, however, that (i)
no contribution shall be made under circumstances where the maker would not have
been liable for indemnification under the fault standards set forth in this
Section 5 and (ii) no seller of securities guilty of fraudulent
misrepresentation (within the meaning of Section 11 of the Securities Act) shall
be entitled to contribution from any seller of securities who was not guilty of
such fraudulent misrepresentation.
(h) The Company shall use its commercially reasonable efforts to register
and qualify Shares under such securities or blue sky laws of such jurisdictions
in the United States as the Investor reasonably requests; provided, however,
that the Company shall not be required in connection therewith or as a condition
thereto to (i) qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 5(h), (ii) subject itself
to general taxation in any such jurisdiction, (iii) file a general consent to
service of process in any such jurisdiction, (iv) provide any undertakings that
cause more than nominal expense or burden to the Company or (v) make any change
in its Certificate of Incorporation or by-laws, which in each case the Board
determines to be contrary to the best interests of the Company and its
stockholders.
6. Representations and Warranties of the Investor. To induce the Company to
accept the Investor's subscription, the Investor hereby represents and warrants
to the Company that:
(a) The Shares subscribed for hereby are being acquired by the Investor for
investment purposes only, for the account of the Investor and not with the view
to any resale or distribution thereof, and the Investor is not participating,
directly or indirectly, in a distribution of such Shares and will not take, or
cause to be taken, any action that would cause the Investor to be deemed an
"underwriter" of such Shares as defined in Section 2(11) of the Securities Act.
(b) The Investor has had access to all materials, books, records,
documents, and information relating to the Company, including (i) the Annual
Report on Form 10-K for the year ended December 31, 2001, as amended, and (ii)
the Proxy Statement dated April 30, 2001 (collectively, the "SEC Filings"), and
has been able to verify the accuracy of the information contained therein.
(c) The Investor acknowledges and understands that investment in the Shares
involves a high degree of risk, including the risks set forth in the SEC
Filings.
(d) The Investor has not entered into any agreement to pay commissions to
any persons with respect to the purchase of the Shares.
(e) The Investor is an "Accredited Investor" as that term is defined in
Section 501(a) of Regulation D promulgated under the Securities Act.
Specifically, the Investor is a natural person who had an individual income (not
including his spouse's income) in excess of $200,000 in 2000 and 2001 or joint
income with his spouse in excess of $300,000 in each of those years and has a
reasonable expectation of reaching such income level in 2002.
7. Representations and Warranties of the Company. To induce the Investor to
purchase the Shares, the Company hereby represents and warrants to the Investor
that:
(a) The Company is duly organized, validly existing, and in good standing
under the laws of the State of Delaware and has all requisite corporate power
and authority to carry on its business as now being conducted.
(b) Upon issuance of the Shares pursuant to this Agreement, the Shares will
be duly and validly issued, fully paid and non-assessable.
(c) The SEC Filings, when filed, did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated in therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
8. Waiver. Any waiver by either party of a breach of any provision of this
Agreement shall not operate as or be construed to be a waiver of any other
breach of such provision or of any breach of any other provision of this
Agreement. The failure of a party to insist upon strict adherence to any term of
this Agreement on one or more occasions shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement. Any waiver must be in writing.
9. Successors and Assigns. Neither party may assign its rights or delegate
its obligations under this Agreement without the prior written consent of the
other, except that the Investor may assign its rights under this Agreement to a
Permitted Transferee with respect to the Shares transferred to such Permitted
Transferee. As used herein, a Permitted Transferee shall mean a transferee of
the Shares that (i) controls, is under common control with, or is controlled by,
the Investor and (ii) prior to and as a condition precedent to becoming a
transferee of such Shares, executes an agreement, in form and substance
satisfactory to the Company, agreeing to be bound by the provisions of this
Agreement with respect to the transferred Shares as if such transferee were the
Investor hereunder.
10. Entire Agreement. This Agreement contains the entire agreement between
the parties with respect to the subject matter hereof and supersedes all prior
and contemporaneous arrangements or understandings with respect thereto.
11. Notices. All notices, consents, and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given when
delivered by hand or, if sent by Express Mail, Federal Express, or other express
delivery service, when received by the addressee, in each case to the address of
the party set forth above or to such other address as such party may designate
by notice in the manner provided in this Section 11.
12. Counterparts. This Agreement may be executed in counterparts, and each
such counterpart shall be deemed to be an original instrument, but both such
counterparts together shall constitute but one agreement.
13. Headings. The headings of the various sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed to be
part of this Agreement.
14. Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability. Such prohibition or
unenforceability in any one jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
15. Governing Law. This Agreement shall be governed by the internal laws of
the State of New York, without regard to the conflicts of law principles
thereof.
16. Jurisdiction. The parties hereto each (a) hereby irrevocably and
unconditionally submits to the exclusive jurisdiction of any court of the State
of New York or any federal court sitting in the State of New York for purposes
of any suit, action, or other proceeding arising out of this Agreement or the
subject matter hereof brought by the Company or the Investor and (b) hereby
waives and agrees not to assert, by way of motion, as a defense, or otherwise,
in any such suit, action, or proceeding, any claim it is not subject personally
to the jurisdiction of the above-named courts, that its property is exempt or
immune from attachment or execution, that the suit, action, or proceeding is
brought in an inconvenient forum, that the venue of the suit, action, or
proceeding is improper or that this Agreement or the subject matter hereof may
not be enforced in or by such court. The Company and the Investor each hereby
consents to service of process in the manner provided in Section 11.
17. Further Assurances. At any time and from time to time, each party
agrees, without further consideration, to take such actions and to execute and
deliver such documents as the other parties may reasonably request to effectuate
the purposes of this Agreement.
18. No Third Party Beneficiaries. This Agreement does not create, and shall
not be construed as creating, any rights enforceable by any person not a party
to this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
GP STRATEGIES CORPORATION
By:_________________________
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