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SMALLCAPS ONLINE GROUP LLC
Corporate Finance o Venture Management o Communications
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April 7, 2000
Infocast Corporation
1 Richmond Street West
Suite 902
Toronto, Ontario M5H 3W4
Attention: James W. Leech
Title: President & CEO
Dear Sirs:
The purpose of this letter is to confirm the appointment of SmallCaps
Online Group LLC ("SmallCaps" or the "Advisor") upon the terms and conditions
set forth herein as financial consultant and advisor to Infocast Corporation
('the Company") in connection with the Company's general corporate financial
advisory and investor and media relations needs. In this connection, SmallCaps,
in its capacity as financial advisor, will assist the Company by undertaking
certain activities, to the extent that such activities are required by the
status of a project, including the following:
1) Meet with appropriate Company management to discuss and help
the Company formulate an appropriate strategy, familiarization
of product and technology, milestones, etc.;
2) At the request of Company, advise the Company with respect to
business development and technology licensing, including
appropriate structure of a proposed transaction and assist in
the negotiations;
3) At the request of the Company, advise the Company with respect
to mergers and acquisitions, including identification of
counterparties, approach strategy and structure, and assist in
the negotiations;
4) Advise the Company with respect to financing strategy,
including public and private equity and debt;
5) Advise the Company with respect to financial and trade media
relations, including development of presentation materials,
websites, press releases, introduction to and scheduling of
meetings with investment managers and brokers, and analysis of
ownership;
6) Assist in such other capacity as may be reasonably requested
by the Company to effect the foregoing.
1285 AVENUE OF THE AMERICAS, 35TH FLOOR, NEW YORK NEW YORK 10019
Telephone: 212-554-4158 Fax: 212-554-4058
www.SmallCapsOnline.comInfocast
Infocast Corporation
April 7, 2000
Page 2
It is the practice of SmallCaps to provide financial advice with
respect to corporate finance and investor and media relations partially on a
retainer basis. Our retainer for services to be rendered hereunder is $9,000 per
month, payable at the beginning of each month, and 200,000 five-year warrants
(with cashless exercise provisions) to purchase the Company's common stock at an
exercise price of $6.50 per share. The warrants will have "piggyback"
registration rights on the Company's next registration statement
In the event a corporate finance transaction contemplated in items 2)
or 3) above is completed with any party which SmallCaps, at the request of the
Company, identified, approached and negotiated with on behalf of the Company,
the Company will pay SmallCaps a success fee for its advisory services in
accordance with the following schedule:
Percentage-Fee-Applicable
Aggregate Value Level to Value Level (%)
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First $5 million 5.00%
From $5 million thru $10 million 3.75%
From $10 million and above 2.50%
In the event a corporate finance private placement transaction
contemplated in item 4) above is initiated by SmallCaps at the request of the
Company and completed with any party which SmallCaps identified, approached and
negotiated with on behalf of the Company, the Company will pay SmallCaps a
success fee of 7% (plus warrant coverage, at sale price of the common stock, of
10%) of the Aggregate Value of the transaction, Notwithstanding the above, in
the event that any party which SmallCaps identified, approached and negotiated
with on behalf of the Company participates in a private or public placement
transaction contemplated in paragraph 4) above, which placement is lead by
agents other than SmallCaps, the Company will pay SmallCaps its prorata share of
the placement fee paid to the placement agent syndicate on the transaction.
For the purposes of this letter, the term Aggregate Value shall mean
the total amount of cash and the fair market value of all other property paid or
payable, directly or indirectly, to the Company and its security holders. In
addition, Aggregate Value shall include the net amount of any debt and/or
contingent liability repaid or assumed by the purchaser from the Company, both
directly or indirectly.
For purposes of this letter, a "transaction" shall mean any transaction
or series or combination of transactions, other than in the ordinary course of
trade or business, whereby, directly or indirectly, a significant portion of the
capital stock of the Company or a significant portion of its respective assets
is transferred for consideration, including without limitation, a sale or
exchange of capital stock or assets, a lease of assets with or without a
purchase option, a merger or consolidation, a tender or exchange offer, a
leveraged buy-out, the formation of a joint venture, minority investment or
partnership, a licensing deal or any similar transaction.
In addition to any fees payable to SmallCaps under the terms of this
letter, the Company agrees to reimburse the Advisor, upon a monthly basis, for
its out-of-pocket expenses, which expenses will not exceed $1,000 per month
without the prior written consent of the Company.
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Infocast Corporation
April 7, 2000
Page 3
The Company agrees to indemnify SmallCaps and each of its respective
affiliates and their respective directors, officers, employees, agents and
controlling persons (each such person being an "Indemnified Party") from and
against any and all losses, claims, damages and liabilities, joint or several,
to which such Indemnified Party may become subject under any applicable federal
or state law, or otherwise, related to or arising out of any transaction
contemplated by this letter or the engagement of the Advisor pursuant to, and
the performance by the Advisor of the services contemplated by, this letter and
will reimburse any Indemnified Party for all expenses (including counsel fees
and expenses, whether incurred in connection with third party claims or direct
claims against the Company) as they are incurred in connection with the
investigation of, preparation for or defense of any pending or threatened claim
or any action or proceeding arising therefrom, whether or not such Indemnified
Party is a party. The Company will not be liable under the foregoing
indemnification provision to the extent that any loss, claim, damage, liability
or expense is found in a final judgment by a court of competent jurisdiction to
have resulted primarily from the Advisor's bad faith, willful misconduct or
negligence.
If a transaction is consummated by the Company with any party which the
Advisor identified, approached or negotiated with on behalf of the Company
within one year from the date of termination of this agreement, or any amendment
or extension thereto, the Company agrees to pay the Advisor a transaction fee
determined as provided in the foregoing paragraphs.
SmallCaps agrees that it will keep all proprietary and confidential
information owned by or concerning the Company, its products, business plans,
financial data, trade secrets, software, documents, specifications and other
affairs ("Information") provided to it hereunder in confidence, shall not use
such Information for any purpose other than to provide the services to the
Company described hereunder and shall not disclose any Information without the
prior written consent of the Company. SmallCaps shall be responsible for any
breach of this agreement by any of its employees, directors and officers. Upon
termination of this Agreement, SmallCaps shall promptly return all copies of
information in its possession.
The Advisor's engagement hereunder may be terminated by either the
Company or the Advisor after twelve months from the date hereof upon the first
day of any month upon thirty days written notice to that effect to the other
party, it being understood that the provisions relating to the confidentiality,
payment of fees, expenses and indemnification will survive any such termination.
This agreement shall be construed and interpreted in accordance with
the laws of the State of New York.
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Infocast Corporation
April 7, 2000
Page 4
If the foregoing is in accordance with your understanding, please
confirm acceptance by signing and returning to us the duplicate of this letter
attached herewith.
SMALLCAPS ONLINE GROUP LLC
By: /s/ Steven H. Rouhandeh
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Name: Steven H. Rouhandeh
Title: Chairman
INFOCAST CORPORATION
By: /s/ James W. Leech
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Name: James W. Leech
Title: President & CEO
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