Exhibit 10.10
August 19, 2002
Board of Directors
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Rotech Healthcare Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇
Dear ▇▇. ▇▇▇▇▇▇:
This letter confirms and sets forth the terms and conditions of the
engagement between ▇▇▇▇▇▇▇ & Marsal, Inc. ("A&M") and Rotech Healthcare
Inc. (the "Company"), including the scope of the services to be
performed and the basis of compensation for those services. Upon
execution of this letter by each of the parties below and receipt of
the retainer described below, this letter will constitute an agreement
between the Company and A&M.
1. Description of Services
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a. Officers. In connection with this engagement, A&M shall make available
to the Company:
(i) ▇▇▇ ▇▇▇▇▇▇▇ to serve as Interim President and Co-Chief Executive
Officer (the "Officer").
(ii) upon the mutual agreement, in advance, of A&M and the Board of
Directors of the Company (the "Board"), such additional personnel
as are necessary to assist in the performance of the duties set
forth in clause 1.b below (the "Additional Consultants").
b. Duties.
i. The Officer shall, together with the chairman, be responsible for
the day-to-day management of the Company's operations;
ii. The Officer shall perform a financial review of the Company,
including but not limited to a review and assessment of financial
information that will be provided by the Company to its
stakeholders, including without limitation its short and
long-term projected cash flows;
iii. The Officer shall assist in the identification of operations
improvement opportunities;
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iv. The Officer shall serve as the principal contact with the
Company's capital markets;
v. The Officer shall perform such other services as requested or
directed by the Board; and
vi. The Officer shall devote such time and efforts as are reasonably
necessary to adequately perform his duties hereunder.
c. Reporting. The Officer shall report to the Company's Board of
Directors.
d. Employment by A&M. The Officer and any Additional Consultants will
continue to be employed by A&M and while rendering services to the
Company and will continue to work with other personnel at A&M in
connection with other unrelated matters, which will not unduly
interfere with services pursuant to this engagement. With respect to
the Company, the Officer and any Additional Consultants shall operate
under the direction of the Board and A&M shall have no liability to
the Company for any acts or omissions of such individuals.
e. Projections; Reliance; Limitation of Duties. The services to be
rendered by the Officer and any Additional Consultants may include the
preparation of projections and other forward-looking statements, and
numerous factors can affect the actual results of the Company's
operations, which may materially and adversely differ from those
projections and other forward-looking statements. In addition, the
Officer will be relying on information provided by other members of
the Company's management in the preparation of those projections and
other forward-looking statements.
2. Compensation
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a. A&M will be paid by the Company for the services of the Officer as
follows: for the month of August 2002, $50,000 and for each month
beginning September 2002, $100,000/per month. In addition, A&M
employees serving as Additional Consultants shall be paid at the
following hourly billing rates:
i. Director $325-425
ii. Associate $250-325
iii.Analyst $100-250
Such rates shall be subject to adjustment annually at such time as A&M
adjusts its rates generally.
b. In addition, A&M will be reimbursed by the Company for the reasonable
out-of-pocket expenses of the Officer and any Additional Consultants
incurred in connection with this assignment, such as travel, lodging,
duplication, computer research, messenger and telephone charges. In
addition, A&M shall be reimbursed by the Company for the reasonable
fees and expenses of its counsel incurred in connection with the
preparation, negotiation and enforcement of this Agreement. All fees
and expenses due to A&M will be billed on a monthly basis and shall be
due promptly following presentation of invoice.
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c. The Company shall promptly remit to A&M a retainer in the amount of
$100,000, which shall be credited against any amounts due at the
termination of this engagement and returned upon the satisfaction of
all obligations hereunder.
d. The Company shall pay to A&M additional bonus compensation as follows:
i. $100,000 upon the Officer having been engaged for three months
from the effective date; and
ii. an amount to be agreed upon by the Officer and the Board upon the
Officer having been engaged for four months from the effective
date.
3. Term
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The engagement will commence as of the date hereof and may be terminated by
either party without cause by giving 30 days' written notice to the other
party. In the event of any such termination, any fees and expenses due to
A&M shall be remitted promptly (including fees and expenses that accrued
prior to but were invoiced subsequent to such termination). The Company may
immediately terminate A&M's services hereunder at any time for Cause by
giving written notice to A&M. Upon any such termination, the Company shall
be relieved of all of its payment obligations under this Agreement, except
for the payment of fees and expenses through the effective date of
termination (including fees, bonus compensation and expenses that accrued
prior to but were invoiced subsequent to such termination) and its
obligations under paragraph 8. For purposes of this Agreement, "Cause"
shall mean if (i) the Officer is convicted of, admits guilt in a written
document filed with a court of competent jurisdiction to, or enters a plea
of nolo contendere to, an allegation of fraud, embezzlement,
misappropriation or any felony; (ii) the Officer willfully disobeys a
lawful direction of the Board; or (iii) a material breach of any of A&M's
or the Officer as material obligations under this Agreement which is not
cured within 30 days of the Company's written notice thereof to A&M
describing in reasonable detail the nature of the alleged breach. For
purposes of this Agreement, termination for "Good Reason" shall mean either
its resignation caused by a breach by the Company of any of its material
obligations under this Agreement that is not cured within 30 days of A&M
having given written notice of such breach to the Company describing in
reasonable detail the nature of the alleged breach.
4. No Audit, Duty to Update.
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It is understood that the Officer, and any Additional Consultants are not
being requested to perform an audit, review or compilation, or any other
type of financial statement reporting engagement that is subject to the
rules of the AICPA, SEC or other state or national professional or
regulatory body. They are entitled to rely on the accuracy and validity of
the data disclosed to them or supplied to them by employees and
representatives of the Company. The Officer and A&M are under no obligation
to update data submitted to them or review any other areas unless
specifically requested by the Board to do so.
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5. No Third Party Beneficiary.
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The Company acknowledges that all advice (written or oral) given by A&M to
the Company in connection with this engagement is intended solely for the
benefit and use of the Company (limited to its Board and management) in
considering the matters to which this engagement relates. The Company
agrees that no such advice shall be used for any other purpose or
reproduced, disseminated, quoted or referred to at any time in any manner
or for any purpose other than accomplishing the tasks referred to herein
without A&M's prior approval (which shall not be unreasonably withheld),
except as required by law.
6. Conflicts.
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A&M is not currently aware of any relationship that would create a conflict
of interest with the Company or those parties-in-interest of which you have
made us aware. Because A&M is a consulting firm that serves clients on an
international basis in numerous cases, both in and out of court, it is
possible that A&M may have rendered services to or have business
associations with other entities or people which had or have or may have
relationships with the Company, including creditors of the Company. In the
event you accept the terms of this engagement, A&M will not represent, and
A&M has not represented, the interests of any such entities or people in
connection with this matter.
7. Confidentiality / Non-Solicitation.
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The Officer, any Additional Consultants and A&M shall keep as confidential
all non-public information received from the Company in conjunction with
this engagement, except (i) as requested by the Company or its legal
counsel; (ii) as required by legal proceedings or (iii) as reasonably
required in the performance of this engagement. All obligations as to
non-disclosure shall cease as to any part of such information to the extent
that such information is or becomes public other than as a result of a
breach of this provision. Except as specifically provided for in this
letter, the Company agrees not to solicit, recruit or hire any employees of
A&M effective from the date of this Agreement and continuing for a period
of two years subsequent to the termination of this engagement. Should the
Company extend offers of employment to any A&M employee and should such an
offer be accepted, A&M will be entitled to a fee based upon such
individual's hourly rates multiplied by an assumed annual billing of 2,000
hours. This fee would be payable at the time of the individual's acceptance
of employment from the Company.
8. Indemnification.
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The Company shall indemnify the Officer and all Additional Consultants to
the same extent as the most favorable indemnification it extends to its
officers or directors, whether under the Company's bylaws, its certificate
of incorporation, by contract or otherwise, and no reduction or termination
in any of the benefits provided under any such indemnities shall affect the
benefits provided to the Officer or Additional Consultant. The Officer
shall be covered as an officer under the Company's existing director and
officer liability insurance policy and the
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Company shall such to name A&M or an additional ensured thereunder. The
Company shall also maintain any such insurance coverage for the Officer and
A&M for a period of not less than two years following the date of the
termination of such officer's services hereunder. The provisions of this
section 8 are in the nature of contractual obligations and no change in
applicable law or the Company's charter, bylaws or other organizational
documents or policies shall affect the Officer's rights hereunder. The
attached indemnity provisions are incorporated herein and the termination
of this agreement or the engagement shall not affect those provisions,
which shall survive termination.
9. Miscellaneous.
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This Agreement shall (together with the attached indemnity provisions) be:
(a) governed and construed in accordance with the laws of the State of New
York, regardless of the laws that might otherwise govern under applicable
principles of conflict of laws thereof; (b) incorporates the entire
understanding of the parties with respect to the subject matter thereof;
and (c) may not be amended or modified except in writing executed by each
of the signatories hereto. The Company and A&M agree to waive trial by jury
in any action, proceeding or counterclaim brought by or on behalf of the
parties hereto with respect to any matter relating to or arising out of the
performance or non-performance of the Company or A&M hereunder.
If the foregoing is acceptable to you, kindly sign the enclosed copy to
acknowledge your agreement with its terms.
Very truly yours,
▇▇▇▇▇▇▇ & Marsal, Inc.
By: ______________________
▇▇▇ ▇▇▇▇▇▇▇
Director
Accepted and Agreed:
Rotech Healthcare, Inc.
By: ______________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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