Exhibit 10.2
Board of Directors
GP Strategies Corporation
May 3, 2002
Page 2
[LETTERHEAD OF EQUITY GROUP INVESTMENTS, L.L.C.]
May 3, 2002
Board of Directors
GP Strategies Corporation
9 West 57th Street
New York, NY 10019
Attention: Jerome I. Feldman
Chief Executive Officer
Ladies and Gentlemen:
This letter will confirm our understanding of the basis on which Equity
Group Investments, L.L.C. ("EGI") will provide, on a non-exclusive basis,
certain advisory services to GP Strategies Corporation (together with its
affiliates and subsidiaries, the "Company") in connection with potential (i)
financings by the Company, whether by issuance of debt, equity or hybrid
securities or the incurrence of debt by the Company or otherwise, and (ii)
business acquisitions by the Company, whether by purchase of capital stock or
other assets or by merger, joint venture or otherwise (all of the transactions
referred to in clause (i) and (ii), collectively, "Qualifying Transactions").
1. Services. To the extent requested by the Company and deemed
appropriate by EGI, EGI shall assist the Company in developing, identifying and
evaluating Qualifying Transactions, assist the Company in evaluating and
responding to inquiries and proposals that may be received by the Company
regarding potential Qualifying Transactions, assist the Company in negotiations
in respect of Qualifying Transactions and consult with and assist counsel and
accountants in the structuring and executing Qualifying Transactions.
2. Transaction Fee. In consideration of our services as described
herein, the Company agrees to pay EGI, at the closing of any Qualifying
Transaction in respect of which EGI has provided material services as
contemplated by this letter, a transaction fee in cash in the amount of 1% of
the Aggregate Consideration (as hereinafter defined) in the Qualifying
Transaction. "Aggregate Consideration" means (i) with respect to financings, the
aggregate gross proceeds thereof, and (ii) with respect to business
acquisitions, the sum of the value of all cash, securities (whether debt or
equity) and other property paid or payable or otherwise to be distributed
(including, without limitation, by exchange of securities) by the Company to the
selling party or its equity owners, plus the amount of indebtedness, preferred
stock or similar items assumed or remaining outstanding, in connection
therewith.
3. Reimbursement of Expenses. In addition to the fee described above
and whether or not any proposed Qualifying Transaction is consummated, the
Company agrees to periodically reimburse EGI, upon request: (i) EGI's reasonable
travel and other out-of-pocket expenses, provided, however, that in the event
such expenses exceed $5,000 in the aggregate with respect to any single proposed
Qualifying Transaction, EGI shall first obtain the Company's consent before
incurring additional reimbursable expenses, and (ii) provided the Company's
prior consent to the engagement of such professionals with respect to any
particular proposed Qualifying Transaction is obtained, all reasonable fees and
disbursements of accountants and other professionals, incurred from and after
the date hereof in connection with EGI's services under this letter. The Company
agrees that, in lieu of reimbursing EGI for such expenses, EGI may forward to
the Company invoices for the same, and the Company shall promptly pay such
invoices directly to the payee.
4. Indemnification; No Liability. In consideration of our services as
described herein, the Company agrees to indemnify and hold harmless EGI, its
direct and indirect affiliates and each of their respective directors, officers,
agents, employees, representatives, shareholders, partners, members and other
affiliated persons (each of the foregoing an "Indemnified Party) against any and
all losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) relating to or arising out of EGI's provision of services hereunder and
will reimburse each Indemnified Party for reasonable attorneys', accountants',
investigators', and experts' fees and expenses and other out-of-pocket fees and
expenses incurred in connection with investigating or defending any such loss,
claim, damage, liability, action or proceeding, whether or not in connection
with pending or threatened litigation in which any Indemnified Party is a party;
provided, however, that (a) the indemnity and hold harmless provision contained
in this paragraph 4 shall not apply to amounts paid in settlement of any claim
if such settlement is effected by an Indemnified Party without the consent of
the Company and (b) the Company will not be liable in any such case for losses,
claims, damages, liabilities or expenses that a court of competent jurisdiction
shall have determined in a final unappealable judgment to have arisen primarily
from the gross negligence, bad faith or willful misconduct of any Indemnified
Party. In addition, neither EGI nor any other Indemnified Party shall have any
liability (whether direct or indirect, in contract, tort or otherwise) related
to or arising from EGI's provision of services hereunder, except for liability
for losses, claims, damages and expenses that a court of competent jurisdiction
shall have determined in a final unappealable judgment to have arisen primarily
from the gross negligence, bad faith or willful misconduct of any Indemnified
Party. The Company expressly acknowledges and agrees that each Indemnified Party
is an intended third party beneficiary of this paragraph 4, and that each
Indemnified Party shall have the right individually to enforce the terms and
provisions of this paragraph 4.
Promptly after receipt by any Indemnified Party of notice of the
commencement of any action, such Indemnified Party will, if a claim in respect
thereof is to be made against the Company under this paragraph 4, deliver to the
Company a written notice of the commencement thereof and the Company shall have
the right to participate in and, to the extent the Company so desires, to assume
the defense thereof with counsel selected by the Company; provided, however,
that the Indemnified Parties shall have the right to retain one separate counsel
as a group, with the reasonable fees and expenses of such counsel to be paid by
the Company, if representation of the Indemnified Parties by the counsel
retained by the Company would be inappropriate due to actual or potential
differing interests between the Indemnified Parties and any other party
represented by such counsel in such proceeding. The failure to deliver written
notice to the Company promptly after receipt by any Indemnified Party of notice
of the commencement of any action, if prejudicial to the Company's ability to
defend such action, shall relieve the Company of any liability to the
Indemnified Parties related to such action under this paragraph 4, but only to
the extent the Company is prejudiced thereby.
5. This letter agreement (a) shall be governed by, and construed in
accordance with, the laws of the State of Delaware without regard to the
principles of conflicts of law, (b) contains the complete and entire
understanding and agreement of EGI and the Company with respect to the specific
subject matter hereof, and supersedes all unperformed prior understandings,
conditions and agreements, oral or written, express or implied, respecting EGI's
provision of services in connection with any contemplated Qualifying Transaction
and the other subject matter specifically addressed herein, and (c) may be
amended or modified in a writing duly executed by both of the parties hereto and
not by any course of conduct, course of dealing or purported oral amendment or
modification. The waiver by either party of a breach of any provision of this
letter agreement by the other party shall not operate or be construed as a
waiver of any subsequent breach of that provision or any other provision hereof.
6. Neither EGI nor the Company may assign or delegate its rights or
obligations under this letter agreement without the express written consent of
the other party hereto, except that (a) EGI may assign any and all of its rights
under this letter agreement to receive payment of fees and reimbursement of
EGI's expenses as provided in this letter agreement and (b) the Company's rights
and obligations hereunder may be assigned and delegated by operation of law
pursuant to any merger, reorganization or similar business combination. This
letter agreement and all the obligations and benefits hereunder shall be binding
upon and shall inure to the successors and permitted assigns of the parties.
7. Either party may terminate this letter agreement upon 30 days' prior
written notice to the other. No such termination shall affect (a) the Company's
obligation to pay the compensation set forth in paragraph 2 with respect to any
Qualifying Transaction in respect of which EGI has provided material services as
contemplated by this letter prior to such notice or (b) the Company's
obligations under paragraphs 3 and 4.
If the foregoing accurately sets forth our understanding, please so
signify by signing and returning to us the enclosed duplicate hereof.
Very truly yours,
EQUITY GROUP INVESTMENTS, L.L.C.
By: __________________________
Its:
Accepted and agreed
to as of the date first
above written:
GP STRATEGIES CORPORATION
By: _____________________
Its:
10328757