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EXHIBIT 10.31
August 16, 1996
Physicians' Specialty Corp.
c/o Xxxx Xxxxxxxx & Company
0000 Xxxxxxxxx Xx.
Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxx
Gentlemen:
This letter, when executed by the parties hereto, will constitute an
agreement between Physicians, Specialty Corp. (the "Company") and Barington
Capital Group, L.P. ("Barington"), pursuant to which the Company agrees to
retain Barington and Barington agrees to be retained by the Company under the
terms and conditions set forth below:
1. The Company hereby exclusively retains Barington to perform
consulting services related to corporate finance and other financial services
matters, and Barington hereby accepts such retention. In this regard, subject
to the terms set forth below, Barington shall furnish to the Company advice and
recommendations with respect to the Company's initial public offering and such
other aspects of the business and affairs of the Company as the Company shall,
from time to time, reasonably request upon reasonable notice.
2. As compensation for the services described in paragraph 1
above, the Company shall (i) pay to Barington a fee of $300,000, of which
$35,000 has been received to date and (ii) sell to Barington (or its designated
affiliates) Common Stock purchase options (the "Consultants Options") covering
a number of shares equal to 10% of the total number of shares of Common Stock
sold in the Company's initial public offering (not including any Overallotment
Shares). The price of the Consultants Options shall be one mil $(0.001) per
option. Such options will expire five years after such date. The Consultants
Options will be exercisable at a price equal to 120% of the public offering
price and shall not be redeemable. Neither the Consultants Options nor the
underlying shares of Common Stock may be transferred, assigned or hypothecated
for a period of one year, except that they may be assigned, in whole or in
part, to any successor, officer or partner of Barington (or to officers or
partners of any such successor or partner). The Consultants Options may be
exercised as to all or a lesser number of underlying shares and will contain
provisions for one demand registration of the sale of the underlying shares of
Common Stock at the Company's expense and an additional demand registration at
the optionholder's expense for a period of five years after the closing of the
public offering, and "piggyback" registration rights for a period of seven
years after the closing of the public offering. The Consultants Option shall
further provide for adjustment in the number and price of such options to
prevent dilution. The compensation set forth above shall be payable upon, and
solely in the event that, the Company consummates an initial public offering
pursuant to which Barington acts as a co-manager. The Consultants Options
referred to above will be evidenced
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Physicians' Specialty Corp.
August 16, 1996
Page 2
by a warrant agreement containing terms set forth above and such other terms
and conditions as are customarily contained in warrants received by us from our
clients.
3. In addition, Barington shall hold itself ready to assist the
Company in evaluating and negotiating particular contracts or projects, if
requested to do so by the Company, upon reasonable notice, and will undertake
such evaluations and negotiations under prior written agreement as to additional
compensation to be paid by the Company to Barington with respect to such
evaluations and negotiations.
4. All obligations of Barington contained in paragraph 3 herein
shall be subject to Barington's reasonable availability for such performance,
in view of the nature of the requested service and the amount of notice
received. Barington shall devote such time and effort to the performance of
its duties hereunder as Barington shall determine is reasonably necessary for
such performance. Barington may look to such others for such factual
information, investment recommendations, economic advice and/or research, upon
which to base its advice to the Company hereunder as it shall deem appropriate.
The Company shall furnish to Barington all information relevant to the
performance by Barington of its obligations under this Agreement, or particular
projects as to which Barington is acting as advisor, which will permit
Barington to know all facts material to the advice to be rendered, and all
materials or information reasonably requested by Barington. In the event that
the Company fails or refuses to furnish any such material or information
requested by Barington, and thus prevents or impedes Barington's performance
hereunder, any inability of Barington to perform shall not be a breach of its
obligations hereunder.
5. Subject to paragraph 6, nothing contained in this Agreement
shall limit or restrict to right of Barington or of any partner, employee,
agent or representative of Barington, to be a partner, director, officer,
employee, agent or representative of, or to engage in, any other business,
whether or not of a similar nature to the Company's business, nor to limit or
restrict the right of Barington to render services of any kind to any other
corporation, firm, individual or association.
6. Barington will hold, and will we use its commercially
reasonable efforts to cause its officers, directors, employees, consultants,
advisors, and agents to hold, in confidence any confidential information which
the Company provides to Barington pursuant to this Agreement. Barington may
disclose such information to its officers, directors, employees, consultants,
advisors and agents, in connection with the services to be rendered as
contemplated by this Agreement, so long as such persons are informed by
Barington of the confidential nature of such information and are directed by
Barington to treat such information confidentially in accordance herewith.
Notwithstanding the foregoing, Barington shall not be required to maintain
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Physicians' Specialty Corp.
August 16, 1996
Page 3
confidentiality with respect to information (i) which is or becomes part of
public domain; (ii) of which Barington had independent knowledge prior to
disclosure to it by the Company; (iii) which comes into the possession of
Barington in the normal and routine course of its own business from and through
independent non-confidential sources; or (iv) which is required to be disclosed
by Barington by governmental requirements. If Barington is requested or
required (by oral questions, interrogatories, requests for information or
document subpoenas, civil investigative demands, or similar process) to
disclose any confidential information supplied to it by the Company, or the
existence of other negotiations in the course of its dealings with the Company
or its representatives, Barington shall, unless prohibited by law, promptly
notify the Company of such request(s) so that the Company may seek an
appropriate protective order.
7. This Agreement may not be transferred, assigned or delegated
by any of the parties hereto without the written consent of to other party
hereto.
8. The failure or neglect of the parties hereto to insist, in any
one or more instances, upon the strict performance of any of the terms or
conditions of this Agreement, or their waiver of strict performance of any of
the terms or conditions of this Agreement, shall not be construed as a waiver
or relinquishment in the future of such term or condition, but the same shall
continue in full force and effect.
9. This Agreement may not be terminated by the Company. This
Agreement may be terminated by Barington at any time upon 30 days' written
notice, without liability or continuing obligation to you or to us (except for
any compensation earned by us up to the date of termination, including
compensation to be paid subsequent to such termination), except as set forth in
this paragraph 9. Neither termination nor completion of this assignment shall
affect the provision of paragraph 2 hereof or the Indemnification Provisions
which are incorporated herein, which shall remain operative and in full force
and effect.
10. Any notice hereunder shall be sent to the Company and to
Barington at their respective addresses set forth above. Any notice shall be
given by hand delivery, facsimile transmission or overnight delivery or courier
service, against receipt therefor, and shall be deemed to have been given when
received. Either party may designate any other address to which notice shall
be given, by giving written notice to the other of such change of address in
the manner herein provided.
11. This Agreement has been made in the State of New York and
shall be construed and governed in accordance with the laws thereof without
giving effect to principles governing conflicts of law.
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Physicians' Specialty Corp.
August 16, 1996
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12. This Agreement contains the entire agreement between the
parties, may not be altered or modified, except in writing and signed by the
party to be charged thereby, and supersedes any and all previous agreements
between the parties relating to the subject matter hereof.
13. This Agreement shall be binding upon the parties hereto and
their respective heirs, administrators, successors and permitted assigns.
If you are in agreement with the foregoing, please execute two copies
of this letter in the space provided below and return them to the undersigned.
Yours truly,
BARINGTON CAPITAL GROUP, L.P.
By: LNA CAPITAL CORP.
General Partner
By: /s/ Xxxx Xxxxxx
________________________________
Xxxx Xxxxxx
Executive Vice President
ACCEPTED AND AGREED
TO AS OF THE DATE FIRST
ABOVE WRITTEN:
PHYSICIANS' SPECIALTY CORP.
By: /s/ Xxxxxx X. Xxxxxxxx
____________________________
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BARINGTON CAPITAL GROUP, L.P.
--------------------------------------------------------------------------------
000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (212) 974-5700
January 27, 1997
Physicians' Specialty Corp.
c/o Xxxx Xxxxxxxx & Company
0000 Xxxxxxxxx Xx.
Xxxxxxx, XX 00000
Gentlemen:
Reference is hereby made to the letter dated August 16, 1996 (the
"Consulting Agreement") entered into between Physicians' Specialty Corp.
("PSC") and Barington Capital Group, L.P. ("Barington"), and the letter dated
December 17, 1996 (the "Engagement Letter"), pursuant to which PSC engaged
Barington to act as lead or co-managing underwriter of an initial public
offering for PSC. The parties hereto agree to amend the Consulting Agreement
and the Engagement Letter as follows:
Clause (i) of the first sentence of Paragraph 2 of the Consulting
Agreement is hereby amended by deleting the amount "$300,000" and by inserting
in lieu thereof the amount "$487,000."
Paragraph 2 of the Consulting Agreement is hereby amended by adding in
the fifth sentence after the words "except that they may be assigned, in whole
or in part, to" the words "to any NASD member who acts as a co-manager of the
Company's initial public offering or", and by adding after the words "officer
or partner of Barington" the words "or any such NASD member."
PSC hereby acknowledges that subclause (ii) of the last sentence of
Paragraph 1(b) of the Engagement Letter may be amended to a lower percentage as
Barington, in its sole discretion, may negotiate with any Co-Manager.
Paragraph 5 of the Engagement Letter is hereby amended by deleting the
year "1995" located in the second sentence therein and substituting in lieu
thereof the year "1996."
Paragraph 11 of the Engagement Letter is hereby amended by deleting
such paragraph and leaving it blank.
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Physicians' Specialty Corp.
January 27, 1997
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In addition to the amendment set forth above, PSC hereby acknowledges
that SouthCoast Capital Corporation will act as lead manager of the Offering
and shall be included within the definition of Co-Managers for all purposes of
the Engagement Letter and shall be entitles to all the rights thereunder as if
it were an original signatory thereto.
Except as specifically set forth herein, the Consulting Agreement and
the Engagement Letter shall remain in full force and effect.
If you are in agreement with the foregoing, please execute and return
a copy of this letter to the undersigned.
Yours truly,
BARINGTON CAPITAL GROUP, L.P.
By: LNA CAPITAL CORP.
General Partner
By: /s/ Xxxx Xxxxxx
________________________________
Name:
Title:
ACCEPTED AND AGREED
TO AS OF THE DATE FIRST
ABOVE WRITTEN:
PHYSICIANS' SPECIALTY CORP.
By: /s/ Xxxxxx X. Xxxxxxxx
____________________________
Name:
Title:
