Exhibit 10.31


 


GENSTAR CAPITAL, LLC


FOUR EMBARCADERO CENTER, SUITE 1900


SAN FRANCISCO, CA 94111


TELECOPY:  415-834-2383


 


August 18, 2006


 


OnCURE
Medical Corp.


610
Newport Drive, Suite 350


Newport
Beach, California 92660


 


Re:                               Advisory
Services Agreement (this “Agreement”)


 


Gentlemen:


 


This
letter serves to confirm our retention by OnCURE Medical Corp., a Delaware
corporation (the “Company” or “you”), to provide management,
consulting and financial services to the Company, as follows:


 


1.                                       Effectiveness;
Advisory Services.  This
Agreement shall become effective upon the Closing (as defined below).  The Company has retained Genstar Capital, LLC
(“Genstar” or “us”), and we hereby agree to accept such
retention, to provide to the Company, when and if called upon, with certain
management, business strategy, consulting and financial services of the type
customarily performed by us.


 


2.                                       Closing Fee.  In consideration of services provided by us
in connection with the consummation of the transactions contemplated in the
Agreement and Plan of Merger, dated as of July 5, 2006, by and among the
Company, OnCure Holdings, Inc, a Delaware corporation (“Holdings”),
OnCure Acquisition Sub, Inc., a Delaware corporation, and the subject
stockholders signatory thereto (the “Merger Agreement”) (the “Closing”),
the Company shall pay to us a fee equal to $5,000,000 concurrently with the
closing of the transactions contemplated in the Merger Agreement and shall
reimburse us for our expenses incurred in connection therewith pursuant to Section 3(b) below.


 


3.                                       Fees and
Expenses.


 


(a)                                  Fees.  In consideration for the services provided by
us hereunder, the Company shall pay to us a management fee of $1,500,000 per
annum (the “Management Fee”).  The
Management Fee shall be payable in quarterly installments in arrears on the
last day of each calendar quarter (i.e., the last
day of March, June, September and December of each such year).  Such quarterly payments shall be
(i) subject to withholding as required by applicable law and (ii) pro
rated for partial periods based on the actual number of days during such
calendar quarter that we were retained hereunder.


 


(b)                                 Expenses.  In addition to our Management Fee, we will
separately bill our reasonable expenses, including travel, legal, accounting
and other expert, auto, cell phone and entertainment expenses incurred in
connection with the transactions contemplated by 


 

















 


the
Merger Agreement and our service to the Company.  The Company agrees to reimburse us, upon
request (accompanied by reasonable supporting documentation) made from time to
time, for such expenses.


 


(c)                                  In the event a
Transaction (as defined below) is consummated, the Company agrees to pay us an
advisory fee equal to one and one-half percent (1.5%) of the Aggregate
Consideration (as defined below) in connection with the Transaction (the “Advisory
Fee”).  The Advisory Fee will be
fully earned on the date of closing of the Transaction and shall be payable by
the Company to Genstar in cash on the date of closing.


 


(d)                                 For purposes of
this Agreement, a “Transaction” shall mean (i) the consummation of
any transaction involving the direct or indirect acquisition by the Company
(whether in one or a series of transactions) of all or a substantial amount of
the assets or the capital stock or other equity interests of another entity, as
well as any merger, recapitalization, restructuring or liquidation of another
entity by its current owners, a third party or any combination thereof, or any
other form of disposition which results in the effective sale of the principal
business and operations of the entity by its current owners to the Company (a
transaction described in this clause (i), an “Acquisition”), or (ii) the
consummation of any transaction involving the direct or indirect disposition by
the Company (whether in one or a series of transactions) of all or a
substantial amount of its assets, equity interests or capital stock, as well as
any merger, recapitalization, restructuring or liquidation of the Company
(directly or indirectly) by its current owners, a third party or any
combination thereof, or any other form of disposition which results in the
effective sale of the principal business and operations of the Company by its
current owners to another entity (a transaction described in this clause (ii),
a “Disposition”), in the case of (i) and (ii) involving
Aggregate Consideration in excess of $10,000,000.


 


For purposes of this Agreement, “Aggregate Consideration” shall mean (i) in
connection with an Acquisition, the total fair market value (at the time of
closing) of all consideration (including cash and all debt remaining on the
acquired entity’s financial statements immediately prior to closing and other
indebtedness assumed by the Company in connection with such Acquisition) paid
or payable, or otherwise to be distributed, directly or indirectly, by the
Company at the closing in connection with such Acquisition, but excluding all
contingent consideration (including any earnouts or notes issued by the Company
in connection with such Acquisition) and (ii) in connection with a
Disposition, the total fair market value (at the time of closing) of all
consideration (including cash and all debt remaining on the Company’s financial
statements immediately prior to closing and other indebtedness assumed by the
purchaser in connection with such Disposition) paid or payable, or otherwise to
be distributed, directly or indirectly, to the Company or its stockholders at
the closing in connection with such Disposition, but excluding all 


 


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contingent
consideration (including any earnouts or notes issued by the purchaser in
connection with such Disposition).


 


4.                                       Term.  This Agreement shall continue in effect from
year to year unless amended or terminated in accordance with this
Agreement.  This Agreement shall
terminate automatically upon the completion of an underwritten public offering
of the common stock of the Company or Holdings pursuant to a registration
statement under the Securities Act of 1933, as amended, which has been declared
effective by the Securities and Exchange Commission.  This Agreement may be terminated, and payment
hereunder may be waived or reduced:  (a) by
the mutual consent of the parties hereto or (b) by us for any reason at
any time.  Termination of this Agreement
shall be without liability or continuing obligation to the Company or us,
except for any compensation earned and expenses incurred by us to the date of
termination and provided that Attachment A (and any other provisions
that by their nature continue to have effect following any such termination)
will remain operative regardless of any such termination.


 


5.                                       Subordination.  The payment of any amounts pursuant to this
Agreement, including any Advisory Fee, the Management Fee and any amounts owed
in respect of any indemnification obligations, shall be subject to the terms
and conditions of (a) the Subordination and Intercreditor Agreement by and
among Holdings, the Company, CDPQ Investments (U.S.) Inc. (“CDPQ”), Ares Capital Corporation (“Ares”),
Merrill Lynch Capital (“Merrill”) and the other parties thereto, (b) the
Subordination Agreement by and among Genstar, CDPQ, Ares and the subsidiaries of the Company party
thereto, (c) the Subordination Agreement by and among Genstar, Merrill,
the Company and the subsidiaries of the Company party thereto, in each case
dated as of the date hereof, and (d) all other subordination
agreements, intercreditor agreements, consent and similar agreements involving,
the Company and any of its subsidiaries, Holdings, Merrill or Ares and CDPQ and
any holder of indebtedness of the Company or any of its subsidiaries, whether
entered into on or prior to the date hereof or from time to time hereafter,
together with all modifications, amendments and restatements of any of the
foregoing, as the same may be amended, supplemented, restated or otherwise
modified from time to time in accordance with the terms thereof.


 


6.                                       Indemnification.  The Company agrees to indemnify us and
certain other Indemnified Persons (as defined therein) as provided on Attachment
A, which forms an integral part of this Agreement.


 


7.                                       Disclosure.  Any advice or opinions provided by us may not
be disclosed or referred to publicly or to any third party (other than the
Company’s legal, tax, financial or other advisors), except in accordance with
our prior written consent.


 


8.                                       Assignment.  We shall act as an independent contractor,
with duties solely to the Company.  The
provisions hereof shall inure to the benefit of and shall be binding upon the parties
hereto and their respective successors and assigns.  Nothing in this Agreement, expressed or
implied, is intended to confer on any person other than the parties hereto or
their respective 


 


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successors
and assigns, and, to the extent expressly set forth herein, the Indemnified
Persons, any rights or remedies under or by reason of this Agreement.  Without limiting the generality of the
foregoing, the parties acknowledge that nothing in this Agreement, expressed or
implied, is intended to confer on any present or future holders of any
securities of the Company or its subsidiaries or affiliates, or any present or
future creditor of the Company or its subsidiaries or affiliates, any rights or
remedies under or by reason of this Agreement or any performance hereunder.


 


9.                                       Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without regard
to principles of conflicts of law that would result in the application of any
law other than the law of the State of Delaware.  Jurisdiction and venue shall be exclusive to
the state and federal courts located in San Francisco, California and the
parties hereby consent to the jurisdiction of such courts.


 


10.                                 Severability.  If any term or provision of this Agreement or
the application thereof shall, in any jurisdiction and to any extent, be
invalid and unenforceable, such term or provision shall be ineffective, as to
such jurisdiction, solely to the extent of such invalidity or unenforceability
without rendering invalid or unenforceable any remaining terms or provisions
hereof or affecting the validity or enforceability of such term or provision in
any other jurisdiction.  To the extent
permitted by applicable law, the parties hereto waive any provision of law that
renders any term or provision of this Agreement invalid or unenforceable in any
respect.


 


11.                                 WAIVER.  EACH OF THE COMPANY AND US WAIVES ALL RIGHT
TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED UPON
CONTRACT, TORT OR OTHERWISE) RELATED TO OR ARISING OUT OF OUR RETENTION
PURSUANT TO, OR OUR PERFORMANCE OF THE SERVICES CONTEMPLATED BY THIS AGREEMENT.


 


12.                                 Amendment.  This Agreement may be amended, modified or
supplemented only by a written instrument executed by the Company and us,
except to the extent prohibited by any debt financing arrangement of the
Company, Holdings, or any of their respective subsidiaries, including but not
limited to the Second Amended and Restated Credit Agreement, dated as of August 18,
2006, among OnCure Acquisition Sub, Inc., the Company and all of its
direct and indirect subsidiaries, Merrill Lynch Capital and the financial
institutions from time to time party thereto, and Holdings, and the Note Purchase
Agreement, dated as of the date hereof, by and among the Company, Holdings,
CDPQ, Ares and the other parties thereto.  The section and other headings contained in
this Agreement are for reference purposes only and shall not affect the meaning
or interpretation of this Agreement. 
This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original and all of which together shall be
deemed to be one and the same instrument.


 


13.                                 No Third Party
Obligations.  Notwithstanding
any provision hereof, none of our obligations under this Agreement shall be an
obligation of our or our affiliates’ officers, 


 


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directors,
members, limited partners or general partners (or of any officer, director,
member, limited partner or general partner of any member, limited partner or
general partner of any of the foregoing entities).  Any such liability or obligation arising out
of this Agreement shall be limited to and satisfied only out of our assets.


 


[Signature Page Follows]


 


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If
the foregoing sets forth the understanding between us, please so indicate on
the enclosed signed copy of this letter in the space provided therefor and
return it to us, whereupon this letter shall constitute a binding agreement
among us.


 


 




	
   

  	
   

  	
  Sincerely,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GENSTAR
  CAPITAL, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/
  Robert J. Weltman

  
	
   

  	
   

  	
   

  	
  Name: 

  	
  Robert
  J. Weltman

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Managing
  Director

  






 


 


Agreed
to and Accepted as of the date first written above:


 




	
  OnCURE
  Medical Corp.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/
  Richard N. Zehner

  	
   

  	
   

  
	
   

  	
  Name: 

  	
  Richard
  N. Zehner

  	
   

  	
   

  
	
   

  	
  Its:

  	
  Chief
  Executive Officer

  	
   

  	
   

  






 


SIGNATURE PAGE TO


GENSTAR ADVISORY SERVICES AGREEMENT


 


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ATTACHMENT A


 


Terms of Indemnity


 


This
Attachment A is attached to and forms an integral part of that certain
letter dated August 18, 2006 from us, Genstar Capital, LLC, to you, OnCURE
Medical Corp. (the “Engagement Letter”).


 


In
consideration of our agreement to provide you with certain services as set
forth in the Engagement Letter, you agree to indemnify and hold harmless us and
our affiliates and our and their respective officers, directors, members,
limited partners, general partners, employees and agents and each other person,
if any, controlling us or any of our affiliates (each such person, including
ourselves, being an “Indemnified Person”) from and against any claim,
demand, liability, loss, damage (including consequential damages), injury,
settlement, award, fine, penalty, tax, deficiency, assessment, judgment and
remediation related to, or arising out of, our engagement by you pursuant to,
and our performance of services as contemplated by, the Engagement Letter and
you will reimburse each Indemnified Person for all costs, fees and expenses
(including reasonable fees and expenses of counsel) as they are incurred in
connection with investigating, preparing, pursuing or defending any action,
claim, suit, investigation or proceeding arising therefrom, whether or not
pending or threatened and whether or not any Indemnified Person is a
party.  You also agree that no
Indemnified Person shall have any liability (whether direct or indirect, in
contract or tort or otherwise) to you or your security holders or creditors
related to or arising out of our engagement pursuant to, and our performance of
services as contemplated by, the Engagement Letter, except for any such
liability for losses, claims, damages or liabilities incurred by you that are
finally judicially determined to have resulted from the bad faith or gross
negligence of such Indemnified Person.


 


You
will not, without our prior written consent, settle, compromise, consent to the
entry of judgment in or otherwise seek to terminate any action, claim, suit or
proceeding in respect of which indemnification or reimbursement may be sought
hereunder (whether or not any Indemnified Person is a party thereto) unless
such settlement, compromise, consent or termination includes a release of each
Indemnified Person from any liabilities arising out of such action, claim, suit
or proceeding.  No Indemnified Person
seeking indemnification, reimbursement or contribution under this agreement
will, without your prior written consent, settle, compromise, consent to the
entry of judgment in or otherwise seek to terminate any action, claim, suit,
investigation or proceeding referred to in the preceding paragraph.


 


If
the indemnification or reimbursement provided for in the second paragraph of
this Attachment A is judicially determined to be unavailable (other than
in accordance with the terms hereof) to an Indemnified Person, in respect of
any claim, demand, liability, loss, damage (including consequential damages),
injury, settlement, award, fine, penalty, tax, deficiency, assessment,
judgment, remediation, costs, and fees and expenses referred to herein, then,
in lieu of indemnifying or reimbursing such Indemnified Person hereunder, you
shall contribute to the amount paid or payable by such Indemnified Person as a
result of any such claim, demand, 


 


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liability,
loss, damage (including consequential damages), injury, settlement, award,
fine, penalty, tax, deficiency, assessment, judgment, remediation, costs, and
fees and expenses (i) in such proportion as is appropriate to reflect the
relative benefits to you, on the one hand, and us, on the other hand, of a
transaction with respect to which services are rendered under the Engagement
Letter (whether or not such transaction is consummated), or (ii) if (but
only if) the allocation provided by clause (i) above is not available, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in such clause (i) but also the relative fault of each of you
and us, as well as any other relevant equitable considerations, provided
however, in no event shall our aggregate contribution to the amount paid
or payable exceed the aggregate amount of fees actually received by us for the
specific transaction with respect to which the services in question under the
Engagement Letter are rendered.  For
purposes of this agreement, the relative benefits to us and you of such a
transaction shall be deemed to be in the same proportion as (a) the total
value paid or contemplated to be paid or received or contemplated to be
received or paid by you or your shareholders, as the case may be, in such
transaction(s) or services that are the subject of the Engagement Letter,
whether or not any such transaction is consummated, bears to (b) the
related fees paid or to be paid to us under the Engagement Letter.


 


The
indemnification and reimbursement contained herein in no way limits any other
indemnification or reimbursement to which we or our affiliates are entitled
pursuant to any other agreements.


 


The
provisions of this Attachment A shall apply to any services provided
under the Engagement Letter and any modifications thereof, and shall remain in
full force and effect regardless of any termination or the completion of our
services under the Engagement Letter.


 


Agreed
to and Accepted as of the date first written above:


 


OnCURE
Medical Corp.


 


 


	
  By: 

  	
  /s/
  Richard N. Zehner

  	
   

  
	
   

  	
  Name: 

  	
  Richard
  N. Zehner

  	
   

  
	
   

  	
  Its:

  	
  Chief
  Executive Officer

  	
   

  



 


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