N M ROTHSCHILD & SONS
21 October 1999
STRICTLY PRIVATE AND CONFIDENTIAL
InfoCast Corporation
0 Xxxxxxxx Xxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxx Xxxxx, CEO
A.T. Xxxxxxx, Co-Chairman
Gentlemen:
Engagement Letter
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Further to our discussions, this will confirm our understanding
pursuant to which NM Rothschild & Sons Canada Limited and NM Rothschild & Sons
(Washington) LLC (jointly "Rothschild") have been retained by InfoCast
Corporation ("InfoCast"), on a non-exclusive basis, to provide investment
banking and financial advisory services to InfoCast on matters relating to its
financial affairs and business activities. Xxxxxxxxxx will involve its offices
and personnel from London and New York as required in its judgement to carry out
this engagement and when a placement of securities of InfoCast is contemplated
(see Placement Fee overleaf) Xxxxxxxxxx will involve XXX XXXX Xxxxxxxxxx to
assist Xxxxxxxxx in the fundraising.
SERVICES TO BE PROVIDED
In rendering our advice, Xxxxxxxxxx will work closely with management
of InfoCast in understanding InfoCast's objectives and assist in analysing and
developing corporate and financial strategies and plans to implement such
objectives. Our investment banking and financial advisory services will relate
primarily to advice in respect of the matters referred to in Schedule A to this
agreement, as requested by senior management or the board of directors of
InfoCast.
FEES AND EXPENSES
WORK FEE
In consideration for its services, Xxxxxxxxxx shall be entitled to a
monthly work fee (the "WorkFee") of US$50,000 payable monthly in arrears to
Rothschild by InfoCast.
PERFORMANCE FEE
In the event a Transaction is implemented during the term of
Xxxxxxxxxx'x engagement, or within a period of one year after the termination of
Xxxxxxxxxx'x engagement hereunder on which Xxxxxxxxxx worked or with a party
identified by Xxxxxxxxxx during the term of this agreement, InfoCast agrees to
pay a further fee of 3% of the Value of the Transaction (the "Performance Fee")
to Xxxxxxxxxx in recognition of Xxxxxxxxxx'x contribution to the Transaction.
For the purposes of this engagement letter, "Transaction" shall mean any
acquisition, merger, alliance or business combination which involves InfoCast
and which shall be valued for purposes of this Performance Fee to include any
debt incurred or assumed by the purchaser or parties in the combination and any
shares issued or to be issued as part of the consideration for any possible
transaction.
In the event that a Performance Fee becomes payable by InfoCast to
Rothschild hereunder, no Work Fees previously paid or payable by InfoCast to
Rothschild hereunder shall be credited against or deducted from the Performance
Fee.
PLACEMENT FEE
In the event that there is a private placement or sale of securities of
InfoCast during the term of this engagement other than pursuant to a transaction
described under Performance Fee above, Xxxxxxxxxx, as the agent for the
offering, will be paid a commission on the total value of the proceeds raised
that is consistent with current industry norms. In the event that a Placement
Fee becomes payable by InfoCast to Rothschild hereunder, no Work Fees previously
paid or payable by InfoCast to Rothschild hereunder shall be credited against or
deducted from the Placement Fee.
EXPENSES
InfoCast agrees to reimburse Xxxxxxxxxx or to cause Xxxxxxxxxx to be
reimbursed promptly upon request made by Xxxxxxxxxx from time to time for
out-of-pocket expenses incurred by Xxxxxxxxxx and its affiliates in connection
with Xxxxxxxxxx'x engagement hereunder, including the reasonable fees and
expenses of Xxxxxxxxxx'x counsel and of any chartered accountants who, in either
case, may be retained only with the consent of InfoCast, Out-of- pocket
expenses, other than legal and accounting fees and expenses, shall not exceed
US$25,000 in the aggregate without the consent of InfoCast. The payments to be
made under this paragraph
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are in addition to any other payments to be made hereunder and the obligation to
make such payments shall survive any expiration or termination of Xxxxxxxxxx'x
retainer hereunder.
InfoCast also agrees to reimburse Rothschild for expenses incurred in
its due diligence of the company prior to this agreement being rendered
effective, such expenses not to exceed US$10,000.
EFFECTIVE DATE & TERMINATION
This Agreement shall commence as of the date Rothschild notifies
InfoCast of its completion of satisfactory due diligence. Thereafter, either
party may terminate this Agreement at any time, with or without cause, by giving
the other party 15 days written notice.
INDEMNITY
In addition to payment of the fees and reimbursements of out-of-pocket
expenses payable by InfoCast hereunder, InfoCast agrees to indemnify and hold
harmless Rothschild and its affiliates, and each of their respective
shareholders, officers, directors, employees and agents, to the full extent
lawful from and against any and all claims, damages, actions, losses or expenses
(or actions including shareholder actions in respect thereof) as suffered or
incurred (including all reasonable expenses and reasonable fees and
disbursements of counsel of each indemnified party and other reasonable
out-of-pocket expenses suffered or incurred in connection with any investigation
of and preparation for any such pending or threatened claims and actions and any
potential or actual litigation or regulatory investigations or hearings or other
proceedings arising therefrom) related to or arising out of or in connection
with Xxxxxxxxxx'x engagement hereunder or any services rendered by Xxxxxxxxx
hereunder, provided, however, there shall be excluded from such indemnification
any such claim, damage, action, loss or expense or portion thereof that results
from any action by Xxxxxxxxxx, other than an action undertaken at InfoCast's
request or with InfoCast's consent, that is found in a final judicial
determination to constitute bad faith, wilful misconduct or negligence on
Xxxxxxxxx'x part.
InfoCast agrees that it will not, without the prior written consent of
Xxxxxxxxxx, settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought by Xxxxxxxxxx or any other indemnified party
hereunder (whether or not Xxxxxxxxxx or any other indemnified party is an actual
or potential party to such claim, action, suit or proceeding) unless such
settlement, compromise or consent includes an unconditional release of
Xxxxxxxxxx and each other indemnified party hereunder from all liability arising
out of such claim, action, suit or proceeding without any admission of
negligence, wilful misconduct or bad faith by Xxxxxxxxxx or an indemnified
party.
InfoCast and Xxxxxxxxxx agree that if any indemnification sought by
Xxxxxxxxxx or any other indemnified party pursuant to this agreement is held by
a court to be unavailable for
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any reason other than the bad faith, wilful misconduct or negligence of
Xxxxxxxxxx or other indemnified party, as the case may be, InfoCast, on the one
hand, and Xxxxxxxxxx, on the other hand, will contribute to the losses, claims,
damages, liabilities and expenses for which such indemnification is held
unavailable in such proportion as is appropriate to reflect the relative
benefits to InfoCast, on the one hand, and Xxxxxxxxxx, on the other hand, in
connection with the subject matter for which Xxxxxxxxxx is engaged hereunder,
subject to the limitation that, in any event, Xxxxxxxxxx'x aggregate
contribution to all claims, damages, liabilities and expenses with respect to
which contribution is available hereunder from Rothschild will not exceed the
aggregate amount of fees paid by InfoCast to Rothschild pursuant to this
Agreement.
The foregoing rights of indemnity and contribution and agreements
relating thereto shall be in addition to any rights that Xxxxxxxxxx or any other
indemnified party may have at common law or otherwise. No investigation or
failure to investigate by Xxxxxxxxxx or any other indemnified party shall impair
the foregoing indemnification and contribution agreement or any rights
Rothschild or any other indemnified party may have.
Any expiration or termination of this agreement by any party will not
affect Xxxxxxxxxx'x rights or the rights of any other indemnified party at
common law or to receive indemnification or contribution.
ACCESS TO INFORMATION
InfoCast agrees to co-operate fully with Xxxxxxxxxx and to provide and
to make available to Rothschild, or cause to be provided to Rothschild, all such
information, data, advice, agreements and opinions (the "Information") as
Xxxxxxxxxx may reasonably request in relation to InfoCast and its subsidiaries
and affiliates, in order to perform Xxxxxxxxxx'x services hereunder. In
addition, InfoCast shall use its best efforts to ensure that Xxxxxxxxxx will
have reasonable access to the officers, directors, employees, auditors and other
advisors of InfoCast and its subsidiaries and affiliates as Rothschild
reasonably requires to complete our services hereunder.
InfoCast also agrees to ensure that Xxxxxxxxxx is fully informed, on a
timely basis, of any change of any material or significant element in any of the
Information or other factual material or representations previously furnished or
to be furnished to Rothschild hereunder or of any change in facts or
circumstances or new developments affecting or which might reasonably be
considered relevant to our engagement hereunder and which is known to InfoCast.
In performing our services hereunder, Xxxxxxxxxx shall be entitled to
rely upon and assume, without independent verification, the accuracy and
completeness of all information and data that is available from public sources
and of all information that has been furnished to Rothschild by or on behalf of
InfoCast and Xxxxxxxxxx shall have no obligation to verify the accuracy or
completeness of any such data and Information or to consider any appraisal of
any assets.
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CONFIDENTIALITY
InfoCast agrees that any reports, recommendations or advice furnished
or tendered by Xxxxxxxxxx to InfoCast in the context of this advisory assignment
are provided solely for the confidential use of InfoCast and may not be referred
to, reproduced or summarized in any public document, publication or
communication or provided by or on behalf of InfoCast to any other person
without Xxxxxxxxxx'x prior written consent which shall not be unreasonably
withheld, provided however InfoCast may make such disclosure as may be required
by law, any court or regulatory authority.
Xxxxxxxxxx agrees that it will keep all Information provided to it
hereunder in confidence, shall not use such Information for any purpose other
than to provide to services to InfoCast described in Schedule A hereto and shall
not disclose any information without the prior written consent of InfoCast,
except (i) the Information which has known to Xxxxxxxxxx on a non- confidential
basis prior to this agreement; (ii) Information which is at the time of the
disclosure to Xxxxxxxxxx in the public domain or comes thereafter into the
public domain other than through any breach of Rothschild of its confidentiality
obligations under this agreement; and (iii) to the extent required by applicable
law, or any court or regulatory authority, and will use such Information only in
the ordinary course of and solely for the purpose of performing its obligations
under this agreement. Xxxxxxxxxx shall provide such Information only to such of
its employees, directors and officers who are engaged in connection with the
assignment contemplated herein and have a need to know such Information.
Rothschild may provide Information to its affiliates and outside advisors
provided that it requires them to adhere to the same requirements as to use and
confidentiality. Xxxxxxxxxx shall be responsible for any breach of this
agreement by any of its employees, directors, officers, affiliates or outside
advisors. Upon the expiration of other termination of this agreement and upon
InfoCast's request, Xxxxxxxxxx shall promptly return all copies of Information
in its possession and known to it and shall use its best efforts to return or
cause to be returned all copies of Information known to it and in the possession
all copies of any analyses, computations, studies or other documents prepared by
or for Rothschild containing or reflecting any Information.
SUCCESSORS AND ASSIGNS
The contract shall enure solely to the benefit of and shall be binding
upon the parties hereto and their respective lawful heirs, executors,
administrators, successors and assigns.
ASSIGNMENT
This agreement shall not be assigned in whole or in part by Xxxxxxxxxx
without the prior written consent of InfoCast and any assignment made without
the consent is void and of no effect.
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TIME OF THE ESSENCE
Time of the essence of this agreement.
EXECUTION IN COUNTERPARTS
This Agreement may be executed in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which shall be deemed
to be an original, but all of which taken together shall constitute one and the
same agreement, and shall become effective when one or more counterparts has
been signed by each of the parties hereto and delivered to each of the other
parties hereto.
WAIVER, ETC.
The failure of any of the parties hereto to at any time to enforce any
of the provisions of this Agreement shall not be deemed or construed to be a
waiver of any such provision, nor to in any way affect the validity of this
Agreement or any provision hereof of the right to any of the parties hereto to
thereafter enforce each and every provision of this Agreement. No waiver of any
breach, non-compliance or non-fulfillment of any of the provisions of this
Agreement shall be effective unless set forth in a written instrument executed
by the party of parties against whom or which enforcement of such waiver is
sought, and no waiver of any such breach, non-compliance or non-fulfillment
shall be construed or deemed to be a waiver of any other of subsequent breach,
non-compliance or non-fulfillment.
ENTIRE AGREEMENT
This Agreement constitutes the entire agreement of the parties hereto
with respect to the subject matter hereof, and supersedes all prior agreements
and understandings of the parties, oral or written, with respect to the subject
matter hereof.
AMENDMENTS
This agreement may not be amended or modified except by a written
instrument executed by each of the parties hereto.
OTHER
InfoCast agrees that, except as required by applicable law, any
reference to Xxxxxxxxxx in any public document or communication including any
press release, prospectus, information circular or management proxy circular, is
subject to the prior approval of Rothschild.
InfoCast acknowledges that, in, the event a Transaction is implemented,
Rothschild may, at its option and cost; place a tombstone announcement of record
in such
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newspapers and periodicals at it may choose, stating it has acted in the
capacity set forth in this agreement.
If the foregoing correctly reflects the agreement between us, please
sign and return the enclosed copy of this letter whereupon it shall become a
binding agreement between us to be governed by and construed and enforced in
accordance with the laws of Ontario.
Yours very truly,
N M ROTHSCHILD & SONGS (WASHINGTON) LLC N M ROTHSCHILD & SONS CANADA LIMITED
By:______________________________ By:_________________________________
Xxxxxxx Xxxx Xxxxxx X.X. Xxxxxxxx
Managing Director Managing Director
Accepted and Agreed as of October 1, 1999
INFOCAST CORPORATION
By: _____________________________________
Name: Xxx Xxxxxxx
Title: President and CEO
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SCHEDULE A
INFOCAST CORPORATION
AREAS OF ENGAGEMENT OF ROTHSCHILD
FOR INVESTMENT BANKING AND FINANCIAL ADVICE
(a) financial advisory services in relation to possible acquisitions,
mergers, business combinations or strategic alliances involving
InfoCast.
(b) financial advisory services in relation to the possible acquisition of
or business combination with X. Xxxxxx, a private Houston based
company, or another acquisition target identified by InfoCast.
(c) assisting as agent in a fundraising for InfoCast of up to US$50-75
million, including preparation of a revised business plan and offering
memorandum.
(d) undertake other related tasks as specified from time to time by
InfoCast's senior management.
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