EXHIBIT 10.7
October 1, 1997
PRIVATE AND CONFIDENTIAL
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Xx. Xxxxxxxx X. Xxxxxxxx, President & CEO
DA Consulting Group, Inc.
Suite 3700
0000 Xxx Xxxxxx Xxxx
Xxxxxxx, XX 00000
Dear Nick:
Based on my recent discussions with you, I am pleased to propose this agreement
for DA Consulting Group, Inc. ("the Company") to retain me as its strategic
financial advisor.
1. Services to be Rendered The services that I will render to the Company
will include but not be limited to, the following:
a. stay current on the status of the Company, including assets,
financial condition and its prospects, with the assistance of
your management team;
b. assist in identifying, qualifying and contacting (subject to
prior approval) potential acquisition or merger partners;
c. advise and assist the Company with respect to structuring the
proposed acquisitions; and
d. work with the Company in the negotiations to ensure appropriate
valuation and proper fit with the Company's objectives; this
will include advising the Company regarding the strategy and
tactics to be used during the process;
f. help the Company prepare for its forthcoming initial public
offering;
g. work with the Company to help make select investments, including
potential acquisitions of (or mergers with) companies and
products.
000 XXXXXXXX XXXX . XXXXXXX XXXXXX, XX . 19437-0006
TEL:000.000.0000 . FAX: 000.000.0000
DA - page 2
2. Fees As compensation for my advisory and transaction services, the fees
shall be:
a. retainer of $5,000 per month, plus reimbursement, on a monthly
basis, of reasonable out-of-pocket expenses;
b. for acquisitions/mergers completed, a transaction success fee
("Success Fee") equal to 5% of the initial $5 million and 1% of
the total valuation above $5 million for each transaction
successfully completed payable in cash on the Closing Date of
the transaction. The total valuation would include all cash,
equity securities, contingent payments, non-compete agreements,
all debt assumed, acquired, retired or defeased and the face
value of any debt securities issued in such a transaction. 100%
of the retainer fees paid from June 1, 1997 (the July invoice)
and not previously credited, will be credited towards the
Success Fees;
c. if the transaction includes contingent payments, the Company and
I shall mutually attempt to agree on the net present value of
such payments. If the Company and I cannot agree on the net
present value, then I shall receive the contingent Success Fees
as they occur;
d. in the event the Company enters into a transaction with a firm
that I have contacted on behalf of the Company within 12 months
after the termination of this agreement, the Company will pay me
the Success Fee.
3. Term of Agreement This Agreement shall commence, subject to necessary
approvals, as of October 1, 1997 and shall continue in effect until
December 31, 1998 and thereafter until terminated by either the Company
or me. Termination shall become effective 30 days after written notice
of termination is received by the other party, subject to those
provisions of this Agreement which have application subsequent to the
termination of this Agreement.
4. Indemnity The Company agrees to indemnify and hold me, and any
affiliated companies, and their respective officers, directors,
controlling persons and employees and any persons retained in connection
with the proposed transactions (whether or not consummated), harmless
from and against all claims, (including any legal or other expenses
incurred in connection with investigating or defending against any such
loss, claim, damage or liability or any action in respect thereof),
related to or arising out of our activities. Notwithstanding the
foregoing, the Company shall not be liable for indemnity under this
agreement in respect of any loss, claim, damage, liability or expense
arising from my willful misconduct or gross negligence in performing the
services described above. This provision shall survive any termination
of my engagement as well as the consummation or abandonment of any
transaction.
DA - page 3
5. MISCELLANEOUS This is the entire agreement of the parties and may not
be amended or modified except in a writing signed by all parties, and shall be
governed by and construed in accordance with the laws of the Commonwealth of
Pennsylvania. This agreement shall be binding upon the parties and their
respective successors and assigns.
Nick, I look forward to the continuation of our successful relationship. If the
foregoing correctly sets forth your understanding, please so indicate by signing
and returning to me the enclosed copy of this letter.
Sincerely,
/s/ Dick
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Xxxxxxx X. Xxxxxxxx, Xx.
DA Consulting Group, Inc.
BY: /s/ Xxxxxxxx X. Xxxxxxxx Date: 27th October 1997
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Xxxxxxxx X. Xxxxxxxx, President.
