March 25, 2004
BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC.
0000 Xxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Xx. Xxxxxx X. Xxxxx
Chief Executive Officer Chairman of the Board
Dear Xxx:
1. Retention. This letter agreement (the "Agreement") confirms that as
of March 25, 2004 (the "Effective Date"), BrightStar Information Technology
Group, Inc. (the "Company"), a Delaware corporation, has engaged Sheridan Road
Capital ("Sheridan Road") to act as exclusive financial advisor in connection
with any potential sale of the Company or any of its material assets through any
structure or form of divestiture transaction including, but not limited to, a
direct or indirect sale of Company stock or assets, or any merger,
consolidation, restructuring, transfer of securities or any similar or related
divestiture transaction authorized by the Company during the Term of the
Agreement (the "Transaction"). During the Term of the Agreement, the Company
agrees that it will not, directly or indirectly, effect a Transaction, or
otherwise contact or approach with respect thereto with any person or persons,
other than through Sheridan Road. "Term of the Agreement" shall mean the period
from Mach 25, 2004 through the date of termination of this Agreement.
2. Information on the Company. In connection with Sheridan Road's
activities hereunder, the Company will furnish Sheridan Road and its counsel
with all materials and information regarding the business and financial
condition of the Company which the Company believes is relevant or which
Sheridan Road at any time reasonably requests (all such information so furnished
being the "Information"). The Company recognizes and confirms that Sheridan
Road: (a) will use and rely solely on the Information and on information
available from generally recognized public sources in performing the services
contemplated by this Agreement without having independently verified the same;
(b) is authorized as the Company's exclusive financial advisor, to transmit to
any prospective purchaser of the Company a copy or copies of the Information and
other legal documentation necessary or advisable in connection with the
transactions contemplated hereby; (c) does not assume responsibility for the
accuracy or completeness of the Information or such other information; (d) will
not make an appraisal of any assets or liabilities of the Company; and (e)
retains the right to continue to perform due diligence on the Company during the
course of the engagement. Sheridan Road agrees to keep the Information
confidential so long as it is and remains non-public, unless disclosure is
required by law or requested by any governmental, regulatory or self regulatory
agency or body and Sheridan Road will not make use thereof, except in connection
with its services hereunder for the Company.
3. Use of Name. The Company agrees that any reference to Sheridan Road
in any release, communication, or other material is subject to Sheridan Road's
prior written approval, which may be given or withheld in its sole discretion.
If Xxxxxxxx Road resigns prior to the dissemination of any such release,
communication or material, no reference shall be made therein to Sheridan Road,
despite any prior written approval that may have been given therefor.
4. Use of Advice. During the term of this Agreement, Sheridan Road may
provide the Company with financial advice and assistance in connection with any
Transaction. No statements made or advice rendered by Sheridan Road in
connection with the services performed by Sheridan Road pursuant to this
Agreement will be quoted by, nor will any such statements or advice be referred
to, in any report, document, release or other communication, whether written or
oral, prepared, issued or transmitted by, the Company or any person or
corporation controlling, controlled by or under common control with, the Company
or any director, officer, employee, agent or representative or any such person,
without the prior written authorization of Sheridan Road, which may be given or
withheld in its sole discretion, except to the extent required by law (in which
case the appropriate party shall so advise Sheridan Road in writing prior to
such use and shall consult with Sheridan Road with respect to the form and
timing of disclosure).
5. Compensation. In payment for services rendered and to be rendered
hereunder by Sheridan Road, the Company agrees to pay to Sheridan Road as
follows:
(a) $7,500 (seven thousand five hundred dollars) payable
in advance on a monthly basis (the "Monthly Fee") for
a period of four months from the Effective Date (the
"Initial Period");
(b) During the Initial Period , the Company may terminate
this Agreement by written notice to Sheridan Road at
any time ("Early Termination Date") provided however;
1. The Company has paid Sheridan Road for its services
up and through the Early Termination Date, which
payment will be computed by dividing the Monthly Fee
by thirty (30) and multiplying the sum of the number
of days since the last Monthly Fee was received by
Sheridan Road;
2. If the Company has received in writing an indication
of interest, preliminary term sheet, or other term
sheet (the "Term Sheet") from a prospective buyer or
merger candidate, the Company agrees to extend the
Initial Period until the first to occur of a
financial closing of the Transaction, termination of
the Term Sheet (or any related agreement) or six
months from the date of the Term Sheet;
(c) Upon the financial closing of a Transaction which
commences or occurs during the Initial Period, as it
may be extended, or which closes within twelve months
from the termination of Sheridan Road's services
hereof, the Company shall pay Sheridan Road in cash
at the financial closing a fee (the "Success Fee")
equal to the sum of $100,000 in cash.
(d) In addition to the compensation to be paid to Sheridan Road as provided in
Sections 5(a), 5(b) and 5(c) hereof, without regard to whether any
Transaction is consummated or this Agreement expires or is terminated, the
Company shall pay to, or on behalf of, Sheridan Road, promptly as billed,
all reasonable out-of-pocket expenses incurred by Sheridan Road in
connection with its services to be rendered hereunder (including, without
limitation, the fees and disbursements of Sheridan Road's counsel, travel
and lodging expenses, word processing charges, messenger and duplicating
services, facsimile expenses and other customary expenditures). These
reimbursable expenditures are not to exceed $5,000. Expenditures in excess
of $1,000 shall be subject to the advance written approval of the Company.
(e) All fees payable to Sheridan Road pursuant to this
Section 5 shall be payable in cash via wire transfer
to an account designated by Sheridan Road.
6. Representations and Warranties. The Company represents and warrants
to Sheridan Road that (a) this Agreement has been duly authorized, executed and
delivered by the Company; and, assuming the due execution by Sheridan Road,
constitutes a legal, valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, and (b) the Information will
not, when delivered nor at any time prior to or at the closing of the
Transaction, contain any untrue statements of a material fact, or omit to state
a material fact necessary to make the statements therein in light of the
circumstances under which they were made not misleading. The Company shall
advise Sheridan Road promptly of the occurrence of any event or any other change
prior to the closing of the Transaction which results in the Information
containing any untrue statement of a material fact or omitting to state any
material fact necessary to make the statements contained therein, in light of
the circumstances under which they were made, not misleading.
7. Indemnity; Limitation of Liability. Since Sheridan Road will be acting on
behalf of the Company as set forth in this Agreement, and as an integral part of
the consideration of services to be rendered hereunder, the Company shall
indemnify Sheridan Road. The Company shall not and shall cause its affiliates
and their respective directors, officers, employees, managers, members and
agents not to, and shall use its reasonable best effort to cause its
shareholders not to initiate any action or proceeding against Sheridan Road in
connection with this engagement or the Transaction unless such action or
proceeding is based solely upon the bad faith, gross negligence or willful
misconduct of Sheridan Road or any of its affiliates.
8. Survival of Certain Provisions. The indemnity shall remain operative
and in full force and effect regardless of (a) any investigation made by or on
behalf of Sheridan Road, (b) completion on any Transaction, (c) the resignation
of Sheridan Road or any termination of Sheridan Road's services or (d) any
amendment, expiration, or termination of this Agreement, and shall be binding
upon, and shall inure to the benefit of, any successors, assigns, heirs and
personal representatives of the Company and Sheridan Road.
9. Conditions of Engagement. It is understood that the execution of
this Agreement shall not be deemed or construed as obligating Sheridan Road to
purchase or place any securities of the Company. Without limiting the foregoing,
Sheridan Road's services to be performed hereunder are subject to certain
conditions, including, among others, (i) satisfactory completion of due
diligence on the Company by Sheridan Road, (ii) market condition, and (iii) no
adverse change in the condition of the Company.
10. Notices. Notice given pursuant to any of the provisions of this
Agreement shall be in writing and shall be mailed or delivered (a) if to the
Company, at the address set forth above, Attention: Chief Executive Officer, and
(b) if to Sheridan Road, at the offices of Sheridan Road at 000 Xxxxx Xxxxxxxx
Xxxxxx, Xxxxx 0000, Xxxxxxx, XX 00000, Attention: Xxxxxx X. Xxxxxx, Managing
Partner.
11. Counterparts. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original, but all of
which shall constitute one and the same instrument.
12. Assignment. This Agreement may not be assigned by either party hereto
without the prior written consent of the other, to be given in the sole
discretion of the party from whom such consent is being requested. Any attempted
assignment of this Agreement made without such consent may be void, at the
option of the non-assigning party.
13. Third Party Beneficiaries. This Agreement has been and is made
solely for the benefit of the Company and Sheridan Road and their respective
successors, assigns, heirs and personal representatives, and no other person
shall acquire or have any right under or by virtue of this Agreement.
14. Construction and Choice of Law. This Agreement incorporates the
entire understanding of the parties and supercedes all previous agreements
whether written or oral relating to the subject matter hereof should they exist.
This Agreement and any issue arising out of or relating to the parties'
relationship hereunder shall be governed by, and construed in accordance with,
the laws of the State of Illinois, without regard to principles of conflicts of
law.
15. Jurisdiction and Venue. Each party hereto consents specifically to
the exclusive jurisdiction of the federal courts of the United States sitting in
Cook County, or if such federal court declines to exercise jurisdiction over any
action filed pursuant to this Agreement, any court to which an appeal may be
taken in connection with any action filed pursuant to this Agreement, for the
purposes if all legal proceedings arising out of or relating to this Agreement
and the parties agree not to commence any action, suit or proceeding relating
hereto except in such courts. In connection with the foregoing consent, each
party irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the court's exercise of personal
jurisdiction over each party to this Agreement or the laying of venue of any
such proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum. Each party
further irrevocably waives its right to a trial by jury and consents that
service of process may be effected in any manner permitted under the laws of the
State of Illinois.
16. Headings. The section headings in the Agreement have been inserted
as a matter of convenience of reference and are not part of this Agreement.
17. Press Announcments. At any time after the consummation or other
public announcement of the Transaction, Sheridan Road may place an announcement
in such newspapers and publications as it may choose, stating that Sheridan Road
has acted as exclusive financial advisor to the Company in connection with the
Transaction, and may use, from time to time, the Company's name and logo and a
brief description of the Transaction in publications and/or marketing materials
prepared and distributed by Sheridan Road.
18. Term. Except as provided herein, this Agreement shall run from the
Effective Date until terminated pursuant to Section 5 above (the "Term").
Please sign and return an original and one copy of this letter
to the undersigned to indicate your acceptance of the terms set forth
herein, whereupon this letter and your acceptance shall constitute a
binding agreement between the Company and Sheridan Road as of the date
first above written.
Sincerely,
SHERIDAN ROAD CAPITAL, LLC
By: ____________________________
Name:
Title:
Accepted and Agreed:
BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC.
By: ___________________________
Name:
Title:
