Document:

ES Filed by Filing Services Canada Inc. 403-717-3898

AIRCRAFT USE AND CHARTER AGREEMENT

THIS AIRCRAFT USE AND CHARTER AGREEMENT (this “Agreement”) is made as of January 6th, 2010,

BETWEEN:

	
(1)      		
NXT ENERGY SOLUTIONS INC., a corporation incorporated under the laws of the Province of Alberta having its
offices located at 1400, 505 – 3rd Street S.W., Calgary, Alberta (“Charterer”);
and	
	 
	
(2)      		
AIR PARTNERS CORP., a corporation incorporated under the laws of the Province of Alberta having its offices
located at 660 Palmer Road N.E., Calgary, Alberta (“Carrier”).	
	 

	
WHEREAS:

	
(A)      		
Carrier shall be authorized to operate both domestic and international charter commercial air services using Cessna Citation 560 aircraft, including , without limitation, the Cessna Citation
560 aircraft with Canadian registration marks C-FEPG, C-FKBC and C-GOOB	
	 
	 	
(collectively or individually, as the context may require, the “Aircraft”);	
	 
	
(B)      		
Carrier has substantial expertise in the aviation industry and specifically in the business of operating business aircraft and holds all required licenses and approvals, including , without
limitation, from Transport Canada Aviation (“TCA”), for all air carrier operations with the
Aircraft; and	
	 
	
(C)      		
Charterer desires to enter into a use and term charter agreement with Carrier for the purpose of chartering the Aircraft to perform survey work domestically and internationally,	
	 

NOW THEREFORE, in consideration of the mutual covenants contained herein, the parties agree as
follows:

	
1.      		
VOLUME CHARTER AGREEMENT	
	 
	 	
Carrier agrees to provide the Aircraft, with crew, and Charterer hereby agrees to charter the Aircraft, with crew, for the Term (as defined in Section 11 hereof), subject to the terms and
conditions contained herein. Carrier agrees to provide the services and to perform the work on the Aircraft set out herein for the charter rates and fees described herein in return for the volume charter guarantee given by Charterer.	
	 
	
2.      		
AIR SERVICES AND WORK ON AIRCRAFT	
	 
	
2.1      		
Availability; Services.	
	 

Subject to the payment of the charter rate, fees and additional costs set out in Schedule B and Schedule C, Carrier shall arrange and/or provide, in respect of flights to be operated under
this Agreement, all personnel, services and facilities normally associated with similar flights, including, without limitation, such personnel, services and facilities necessary to ensure the safety, security, efficiency, comfort and cleanliness of,
and the competence of the crew and other persons providing services relating to, the Aircraft and the charter flights.

 

 

 

 

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2.2      		
Maintenance Scheduling.	
	 
	 	
Carrier shall keep Charterer advised, on a reasonable and regular basis, as to the scheduled maintenance requirements for the Aircraft and any other matters affecting the scheduling of the
Aircraft.	
	 
	
2.3      		
Flight Scheduling.	
	 
	 	
Charterer shall provide Carrier with reasonable notice as to its proposed charter flights in order that Carrier can make all necessary arrangements to meet charter flight requirements of
Charterer. Subject to the second sentence of Section 2.5 hereof, the Aircraft shall be available for use by Charterer and its affiliates, and shall be reserved in advance by Charterer and its affiliates, in the same manner as it is made available
to, and reservations are accepted by Carrier from, third parties. Carrier and Charterer shall consult to establish mutually acceptable booking arrangements. Notwithstanding the foregoing, the Carrier and Charterer agree that Charterer shall have the
right to reserve an Aircraft for charter flights by providing at least four (4) weeks advance notice, provided that Carrier cannot guarantee the use of any specific Aircraft and will assign at its sole discretion a similar aircraft that is
appropriately equipped and suitable for Charterer’s mission requirements, which requirements are specifically listed and agreed to in	
	 
	 	
Schedule A hereto.	
	 
	
2.4      		
Replacement Charters.	
	 
	 	
In the event that the Aircraft are temporarily not available for use by Charterer, Carrier shall, using all reasonable efforts, make or cause to be made available by charter or sub- charter,
another aircraft that is appropriately equipped reasonably acceptable to Charterer and upon charter terms and conditions reasonably acceptable to Carrier and Charterer. In the event that the Aircraft are permanently not available for charter, this
Agreement shall terminate in accordance with the provisions of Sections 12.1 and 12.2 hereof, provided that the effective date of termination shall be the date on which the Aircraft are permanently not available for charter.	
	 
	
2.5      		
Non-Exclusive Use.	
	 
	 	
Charterer acknowledges that Charterer will not have exclusive use of the Aircraft during the Term and, in particular, that Carrier will actively market the Aircraft for third party charters
for the public carriage of passengers (“Third Party Charters”).	
	 

	
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Notwithstanding the foregoing, the Carrier and Charterer agree that in the case of any potential bookings for Third Party Charters in respect of any Aircraft for a duration of two (2) weeks
or more, Carrier shall notify Charterer of such potential bookings and Charterer must advise Carrier within 24 hours of such notice by fax or e-mail if it wishes to use such Aircraft during that period, failing which Carrier may proceed to book such
Third Party Charters.

	
3.      		
CHARTER TARIFFS	
	 
	 	
The parties agree that the charter tariffs published by Carrier with the Canadian Transportation Agency (the “Charter Tariffs”) are hereby incorporated into and shall form a part of this Agreement and all terms and conditions set out therein shall be deemed to form
part of this Agreement. In the event of any conflict between the terms and conditions of this Agreement and those of the Charter Tariffs, the provisions of this Agreement shall govern.	
	 
	
4.      		
BASE OF AIRCRAFT	
	 
	 	
The Aircraft shall be based and hangared at the facilities of Carrier at Calgary International Airport. Carrier shall locate the Aircraft in the same area as the other business aircraft
operated by Carrier at such facilities.	
	 
	
5.      		
FLIGHT AND MAINTENANCE CREW	
	 
	
5.1      		
Personnel.	
	 
	 	
Carrier shall provide and assign experienced and qualified pilots reasonably acceptable to Charterer to operate the Aircraft. Carrier will also provide qualified maintenance personnel
(either employed or a contracted third party) to maintain the Aircraft. Each assigned crew member shall be acceptable to Charterer, acting reasonably, and trained on the Aircraft and each crew member shall hold and maintain all licences as may be
required by TCA and the insurers of the Aircraft.	
	 
	
5.2      		
Qualified Pilot.	
	 
	 	
The term “qualified pilot” refers to
a person who meets the following minimum requirements:	
	 
	 	
(i)      		
holds a valid Canadian or U.S. Airline Transport Pilot Licence (provided that a pilot hired as first officer only need only hold a valid Canadian Commercial Pilot Licence), as validated by
TCA, with appropriate category, class and type ratings for the Aircraft;	
	 
	 	
(ii)      		
holds a current medical certificate in accordance with the requirements of the Personnel Licensing Handbook published by TCA;	
	 

	
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(iii)      		
holds a flight radiotelephone operators licence or permit acceptable to TCA;	
	 
	
(iv)      		
has satisfactorily completed an approved ground and flight training course for the Aircraft; and	
	 
	
(v)      		
is approved as a qualified pilot by the insurer providing hull and liability insurance on the Aircraft.	
	 

	
5.3      		
Dispatch; Administration.	
	 
	 	
Carrier shall provide, without additional cost to Charterer, such personnel as may be necessary to perform all duties concerning domestic dispatch and administrative matters relating to the
operation of the Aircraft.	
	 
	
5.4      		
Crew Training.	
	 
	 	
Carrier shall implement a system of periodic training to ensure that flight crew and the maintenance engineers assigned to the Aircraft, meet or exceed the applicable standards for flight
proficiency, safety of flights, the operating authority issued to Carrier and general operating knowledge of the Aircraft.	
	 
	
5.5      		
Employees of Carrier.	
	 
	 	
Carrier shall retain all assigned crew members as its employees. It is specifically acknowledged that such crew members shall not in any way be deemed to be employees of
Charterer.	
	 
	 	
Carrier shall have sole responsibility:	
	 
	 	
(i)      		
to pay all personnel wages and benefits;	
	 
	 	
(ii)      		
to make all proper payroll deductions, including income tax and social benefit deductions, required under federal and provincial laws to be made from the compensation paid to such
personnel;	
	 
	 	
(iii)      		
to pay all payroll and employment taxes required to be made with respect to the wages and benefits paid to such personnel; and	
	 
	 	
(iv)      		
to make all payments to the appropriate governmental agency or authority required by law to be made by the employer of such personnel.	
	 
	
6.      		
OPERATIONS	
	 
	
6.1      		
Maintenance; Flight Operations.	
	 
	 	
Carrier shall at all times keep, maintain and operate the Aircraft in a fully operating,
serviceable and airworthy condition with a valid Certificate of Airworthiness in conformity with any applicable limitations, restrictions or recommendations which may, from time to time, be
made by the manufacturer of the Aircraft and in conformity with all applicable insurance policies and all applicable laws, orders, rules, regulations and directives of TCA or all other applicable laws, orders, rules, regulations and directives of
other government departments or aviation authorities, domestic or foreign, having jurisdiction over the Aircraft or its operations, relating to the use, operation, maintenance and storage of the Aircraft. In particular, without limitation, Carrier
shall:	
	 

	
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(a)      		
monitor the Aircraft’s compliance with all modifications, repairs and inspections required by all applicable airworthiness directives, alert service bulletins or wires, and recommended
service bulletins issued during the Term;	
	 
	
(b)      		
undertake all maintenance services, inspections, modifications and repairs pursuant to its current TCA Approved Maintenance Organization License No. 76- 97 and shall supervise the
performance of all required maintenance, inspections, modifications and repairs and arrange for their scheduling without compromising safety and in accordance with all applicable laws, rules, regulations, standards and policies of TCA, so as to
optimize the economic and otherwise beneficial use of the Aircraft in bookings by Charterer and its affiliates and third party charter customers;	
	 
	
(c)      		
perform aircraft maintenance management, including being responsible for the airworthiness and maintenance of the Aircraft;	
	 
	
(d)      		
ensure that Aircraft log books, data, records, reports and subscriptions are updated and current;	
	 
	
(e)      		
refrain from operating the Aircraft beyond the geographical limits as defined in the policies of insurance for the Aircraft or using, maintaining or storing the Aircraft in violation of any
of the provisions of applicable insurance policies;	
	 
	
(f)      		
operate the Aircraft or cause it to be operated using properly surfaced runways of a nature, strength and length adequate for the safe operation of the Aircraft;	
	 
	
(g)      		
operate, maintain and insure the Aircraft in strict compliance with all terms and conditions hereof and as required by law;	
	 
	
(h)      		
ensure that all applicable licenses, approvals and operating certificates will be maintained in full force and effect throughout the Term; and	
	 
	
(i)      		
ensure compliance with all applicable security regulations and requirements.	
	 

6.2 Grooming.

Carrier shall groom and clean the Aircraft after every flight, including providing
commissary control and stocking, overall interior tidying, vacuuming of carpets, washing the windows and windshields, cleaning the lavatories, and periodic exterior washing.

 

 

 

	
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7.      		
CHARTER FEES	
	 
	
7.1      		
Volume Charter Guarantee.	
	 
	 	
For the purposes of this Agreement “North American Operations” shall mean charter flights within or between Canada and the United States and “International Operations” shall mean operations other than North American Operations. Charterer will commit to and guarantee a minimum of 100 charter flight hours (“Flying Hours”) for either North American Operations or International Operations during the Term. Notwithstanding the
foregoing, Charterer shall be able to charter the Aircraft for any amount of time beyond	
	 
	 	
100      		
Flying Hours subject to Aircraft availability and Carrier agrees to make reasonable	
	 
	 	
best efforts to make such Aircraft available when required by Charterer. When scheduling any charter flight in accordance with Section 2.3 hereof, Charterer shall confirm the duration of the
proposed North American Operations or International Operations and shall guarantee Carrier in advance, as mutually agreed between the parties, a minimum amount of Flying Hours, whether those Flying Hours are used by Charterer or not. Charterer
agrees that Carrier shall be its exclusive provider of charter flights during the Term in accordance with the terms and conditions of this Agreement, unless Carrier is unable to provide Charterer with an Aircraft when required.	
	 
	
7.2      		
Charter Rates.	
	 
	 	
Charterer agrees to pay Carrier, for the commercial use of the Aircraft during the Term, the following amounts:	
	 
	 	
(a) North American Operations: The charter rate, fees and additional costs set out in	
	 
	 	 	
Schedule B hereto; and	
	 
	 	
(b) International Operations: The charter rate, fees and additional costs set out in	
	 
	 	 	
Schedule C hereto.	
	 
	
7.2      		
Option to Renew.	
	 
	 	
Charterer shall have an option (exercisable not later than 60 days prior to the end of the Term) to renew the Term for an additional one year period on the same terms and conditions except
for the charter rates which shall be adjusted as set forth in this Section below. Thereafter, the Term is subject to renewal between Carrier and Charterer, acting reasonably, upon mutual agreement and revised charter rates. The revised charter rates
for all renewal periods shall be based on prevailing market rates.	
	 
	
7.3      		
Accounts.	
	 
	 	
Carrier agrees to keep or cause to be kept, proper accounts of all labour and material
costs and other applicable fixed and variable expenses incurred by Carrier in the performance of its obligations under this Agreement and make such accounts available to Charterer or its
agents upon reasonable notice for audit and verification purposes. All costs and expenses are to be detailed and shown as directly attributable to the applicable Aircraft.	
	 

	
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8.      		
PAYMENT TERMS	
	 
	
8.1      		
Invoices; Currency.	
	 
	 	
Unless otherwise specifically set forth herein, all invoices rendered hereunder by Carrier to Charterer shall be submitted by no later than the 15th day of the month following the month in
which the applicable work was performed and services were provided. Such invoices shall be payable net fifteen (15) days. All currency amounts expressed herein are in Canadian dollars unless the contrary is expressly stated and, unless otherwise
agreed in writing by Charterer and Carrier, all invoices from Carrier to Charterer shall be expressed in Canadian dollars and shall be payable in Canadian dollars.	
	 
	
8.2      		
Taxes.	
	 
	 	
All fees and expenses referenced herein exclude any provision for any sales, use, goods and services, value added or other similar taxes (“Taxes”). Charterer shall be responsible for the payment of any Taxes and any related penalties and interest which
may be levied, assessed, or imposed on Charterer or Carrier or otherwise by any governmental authority or agency as a result of or in connection with this Agreement. Nothing in this Section shall be deemed to obligate Charterer to pay any income or
capital taxes imposed against Carrier on or measured by the net income of Carrier.	
	 
	
8.3      		
Overdue Accounts.	
	 
	 	
Charterer shall pay interest monthly on all amounts payable hereunder which are overdue at a rate equal to 1% per month (or 12% per annum), which interest shall be payable from the due date
until the actual receipt thereof.	
	 
	
9.      		
INDEMNIFICATION	
	 
	 	
Each party shall defend, indemnify and hold harmless the other, its directors, officers, employees, agents, and their corporate parents and their respective subsidiaries and affiliates and
their respective directors, officers, agents and employees (“Indemnified Parties”), except to
the extent due to the gross negligence or wilful misconduct of such Indemnified Parties, from and against any and all losses, damages, liabilities, and costs, including but not limited to legal fees and legal costs, arising from damage or
destruction to the Aircraft, or claims arising from damage or destruction of property or injury or death of persons which are in any manner whatsoever related to the default in performance of this Agreement by the defaulting party and to which
either any insurance does not apply or the proceeds from such insurance do not fully compensate the other

party for such losses, damages, liabilities and costs. Notwithstanding anything in this Agreement to the contrary, neither party shall be liable for special, incidental or consequential
damages including, but not limited to, loss of use, revenue, profit or business opportunities, even if the other party has been advised, knew or should have known of the possibility of such damages. The provisions of this Section 9 shall survive any
termination of this Agreement.	
	 

 

 

 

 

	
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10.      		
INSURANCE	
	 
	 	
Carrier represents and warrants that:	
	 
	 	
(a)      		
subject to this Agreement, it has insured the Aircraft strictly in accordance with all applicable laws;	
	 
	 	
(b)      		
it has sufficient hull insurance for the value of the applicable Aircraft;	
	 
	 	
(c)      		
it carries combined single-limit policies of aircraft liability insurance, public liability insurance and property damage insurance in the amount of not less than Fifty Million Dollars
($50,000,000) per occurrence;	
	 
	 	
(d)      		
Charterer and any persons designated by Charterer are named as additional insureds on all such policies; and	
	 
	 	
(e)      		
it shall supervise compliance with all insurance policies.	
	 
	
11.      		
TERM	
	 
	 	
This Agreement shall commence on the date of this Agreement, and shall continue for a period of one (1) year.	
	 
	
12.      		
TERMINATION; DEFAULT AND REMEDIES	
	 
	
12.1      		
Termination for Convenience.	
	 
	 	
After the initial one (1) year Term, upon 60 days’ written notice to the other party, Charterer or Carrier may terminate this Agreement for its convenience without obligation or
liability of any nature except as provided herein or, in the case of termination by Charterer, to pay Carrier for the portion of the work or services performed prior to the effective date of termination.	
	 
	
12.2      		
Accounting.	
	 
	 	
Within 30 days’ of the effective date of the termination, representatives of Carrier shall make a full accounting of all costs to Charterer and any outstanding amounts shall be settled
between the parties.	
	 
     

  

	
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12.3      		
Events of Default.	
	 
	 	
The occurrence or happening of any one or more of the following events shall constitute an “Event of
Default”:	
	 
	 	
(a)      		
if any payment hereunder is not made when due and remains owing five business days after notice that such payment has not been made is given to the defaulting party;	
	 
	 	
(b)      		
if either party shall fail to perform or observe any covenant, condition or agreement to be performed or observed by it hereunder, other than to make payments, and such failure shall
continue unremedied for 10 days after the giving of notice thereof by the non-defaulting party;	
	 
	 	
(c)      		
if either party shall make any assignment for the general benefit of creditors or is adjudged insolvent or bankrupt, or if any proposal is made or petition filed by either party under any
law for the extension of time for payment, composition or compromise of the liabilities of either party, or if any resolution is passed for, or judgment or order is given by any court of competent jurisdiction ordering the winding-up or other
liquidation of either party, or if a petition or other application is made for a receiving order or the winding-up of either party, or if any execution, sequestration or any other similar process of any court of competent jurisdiction becomes and
remains enforceable against, or if a distress or analogous process is levied upon, the property of either party, or on any part thereof, or if any receiver, administrator or manager of the property, assets or undertaking of either party is appointed
pursuant to the terms of any security agreement or similar instrument;	
	 
	 	
(d)      		
if all of the Aircraft are lost or substantially damaged and, as a result thereof, are declared a total or constructive loss;	
	 
	 	
(e)      		
if all of the Aircraft are seized under legal process, are confiscated, sequestered or attached or if distress is levied thereon; or	
	 
	 	
(f)      		
except as otherwise provided hereunder, if either party ceases or threatens to cease to carry on business.	
	 
	
12.4      		
Remedies.	
	 
	 	
Upon the occurrence of an Event of Default, the non-defaulting party may, at its option, declare this Agreement to be in default and may terminate this Agreement, without prejudice to any
other remedies such party may have pursuant to applicable law.	
	 
	
13.      		
DELAYS	
	 
	 	
Neither party shall be responsible for any delay in performance hereunder due to or
arising out of acts of God or public enemy, civil war, insurrection, riot, fire, flood, explosion, earthquake, accident, epidemic, quarantine, restriction, any act of government,
governmental priority allocation, equipment failures, delays in transit or delivery, strike or labour dispute causing cessation, slow down or interruption of any relevant work relating to the Aircraft, or any other cause or matter beyond the
reasonable control of the non-performing party.	
	 

	
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14.      		
MISCELLANEOUS	
	 
	
14.1      		
Potential Sale of Aircraft.	
	 
	 	
Carrier will make best efforts to advise Charterer of any potential sale or discussions of any contemplated sale of the Aircraft, Charterer acknowledging that Carrier is the operator and not
the owner of the Aircraft.	
	 
	
14.2      		
Previous Charges.	
	 
	 	
Previously conducted demonstration flight costs paid by Charterer to Carrier will be refunded in the amount of $9,387.71 as invoiced by Carrier on February 2, 2009.	
	 
	
14.3      		
Health Safety Environment Compliance.	
	 
	 	
Carrier agrees to abide by any HSE (Health Safety Environment) rules that are required by Charterer, Charterer customers and the governing bodies within the country of operations unless in
violation of airworthiness standards or any other regulations governing the use and operation of the aircraft.	
	 
	
14.4      		
Time.	
	 
	 	
Time is of the essence of this Agreement.	
	 
	
14.5      		
Entire Agreement.	
	 
	 	
This Agreement is the sole agreement between the parties concerning the subject matter hereof and it supersedes any prior agreements made between the parties hereto relative to such subject
matter. There have been with respect thereto no representations, warranties, promises, guarantees or agreements, oral or written, express or implied, except as set forth herein. This Agreement may not be amended except in writing by both parties and
shall be binding upon and enure to the benefit of the parties hereto, and their respective successors and permitted assigns.	
	 
	
14.6      		
Further Acts.	
	 
	 	
Charterer and Carrier shall from time to time do and perform such other and further acts and execute and deliver any and all such other and further instruments as may be required by law or
reasonably requested by either of the parties hereto in order thereby to carry out
and give effect to the intent and purposes of this Agreement.	
	 

	
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14.7      		
Post-Termination.	
	 
	 	
Notwithstanding any other conditions contained herein, it is hereby agreed that the provisions hereof shall survive the expiration or termination of this Agreement to the extent required
thereby for their full observation and performance.	
	 
	
14.8      		
Waivers.	
	 
	 	
No waiver of any breach of any provision herein shall constitute the waiver of any subsequent breach of such provision or any other provision herein.	
	 
	
14.9      		
Severability.	
	 
	 	
Any provision of this Agreement that is unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.	
	 
	
14.10      		
Assignment.	
	 
	 	
This Agreement may only be assigned by either party hereto with the written consent of the other party.	
	 
	
14.11      		
Governing Law.	
	 
	 	
This Agreement shall be governed by and construed in accordance with the laws of Alberta and the laws of Canada applicable therein.	
	 
	
14.12      		
Notices.	
	 
	 	
Notices given hereunder shall be in writing and shall be deemed to have been adequately given when received by the party to whom such notice is being given. Notices shall be
addressed:	
	 

	if to Carrier:

		Air Partners Corp. 660 Palmer Road N.E. Calgary, Alberta T2E 7R3

Attention: Vik Saini, Managing Director Fax: (403) 275-3978 E-mail: vsaini@airpartners.ca

	
	
 
	
	if to Charterer:

		NXT Energy Solutions Inc.

	

	 	
1400, 505 – 3rd Street S.W.

Calgary, Alberta

T2P 3E6

Attention: Andrew Steedman, VP Operations

Fax: (403) 264-6442

E-mail: asteedman@nxtenergy.com

	
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or to such other address as either party hereto shall from time to time designate in writing to the other party. Any notice so given shall be deemed to have been received upon delivery or
upon the day of the transmission of any facsimile, as the case may be. Any party to this Agreement may change its address for the purposes of this Section by giving notice of such change in accordance with the provisions of this Section.

14.13 Execution.

This Agreement has been executed by the parties hereto as of the date first written above.

	
[SIGNATURE PAGE FOLLOWS]

	
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NXT ENERGY SOLUTIONS INC.

	
AIR PARTNERS CORP.

	
By: 
		
 		
/s/ Andrew Steedman 
		
 		
By: 
		
 		
/s/ Vik Saini 
	
	
 
		
 		
Andrew Steedman 
		
 		
 
		
 		
Vik Saini 
	
	
 
		
 		
VP Operations 
		
 		
 
		
 		
Managing Director 
	

	
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Schedule A

CHARTERER MISSION REQUIREMENTS

To be agreed upon in writing by Carrier and Charterer for and in advance of each North American Operation or International Operation.

 

 

 

 

 

 

 

 

 

	
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Schedule B

	
NORTH AMERICAN OPERATIONS

(All Rates and Costs in Canadian $)

For North American Operations, Charterer shall be charged the following charter rate and additional costs:

	
(a)      		
Charter Rate: $3,170 for each Flying Hour (excluding fuel and other additional costs) plus applicable taxes;	
	 
	
(b)      		
Additional Costs: Fuel, NAV Canada fees, hangarage when the Aircraft is stored outside Calgary, terminal/ground handling/parking fees, de-icing charges, landing fees, airport charges and all
other miscellaneous charges not included in the above charter rates, all incurred while the Aircraft is on charter to Charterer, are extra and subject to additional charge to Charterer plus all applicable taxes;	
	 
	
(c)      		
Cancellations; Delays; Modifications: In the event any charter flights scheduled by Charterer with Carrier are cancelled, delayed or modified by Charterer, Charterer agrees to pay any costs
incurred or payable by Carrier as a result of such cancellation, delay or modification, including but not limited to the costs listed in paragraph (b) above; and	
	 
	
(d)      		
Whether North American Operations shall be performed are subject to approval of the chief pilot, director of flight operations and all accountable executives of Carrier. If during any North
American Operations any of the chief pilot, director of flight operations or all accountable executives of Carrier are of the opinion, in their sole discretion, that such North American Operations are unsafe or puts at risk the security of the
flight crew/engineer and the Aircraft, the Carrier may abort or terminate such North American Operations at anytime and, in such circumstances, will discuss (but Carrier cannot guarantee) alternate arrangements with Charterer to rectify the safety
or security issue.	
	 

	
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Schedule C

	
INTERNATIONAL OPERATIONS

(All Rates and Costs in Canadian $)

For International Operations, Charterer shall be charged the following charter rate and additional costs:

	
(a)      		
Charter Rate: $3,351 for each Flying Hour (excluding fuel and other additional costs) plus applicable taxes;	
	 
	
(b)      		
Additional Costs: Fuel, NAV Canada fees or international equivalents, hangarage when the Aircraft is stored outside Calgary, terminal/ground handling/parking fees, de-icing charges, landing
fees, airport charges, maintenance engineer ($600/day), additional crew and maintenance per diems, international flight planning costs, commercial airline tickets for flight crew and engineer on agreed rotations, security for flight
crew/engineer and the Aircraft, transportation for flight crew/engineer, international shipping/freight costs for parts/tools, any additional insurance required, compliance with Section 14.4 hereof and all other miscellaneous charges not included in
the above charter rates, all incurred while the Aircraft is on charter to Charterer, are extra and subject to additional charge to Charterer plus all applicable taxes;	
	 
	
(c)      		
Cancellations; Delays; Modifications: In the event any charter flights scheduled by Charterer with Carrier are cancelled, delayed or modified by Charterer, Charterer agrees to pay any costs
incurred or payable by Carrier as a result of such cancellation, delay or modification, including but not limited to the costs listed in paragraph (b) above;	
	 
	
(d)      		
Any required modifications or alternations to the Aircraft to permit Carrier to operate internationally (other than in Canada or the United States) shall be paid by Charterer in advance of
any such work being commenced;	
	 
	
(e)      		
Whether International Operations shall be performed are subject to approval of the chief pilot, director of flight operations and all accountable executives of Carrier. If during any
International Operations any of the chief pilot, director of flight operations or all accountable executives of Carrier are of the opinion, in their sole discretion, that such International Operations no longer meet with the approval of the Carrier,
are unsafe or puts at risk the security of the flight crew/engineer and the Aircraft, the Carrier may abort or terminate such International Operations at anytime and, in such circumstances, will discuss (but Carrier cannot guarantee) alternate
arrangements with Charterer to rectify the safety or security issue; and	
	 
	
(f)      		
Any International Operations that require Carrier to incur any other additional or extraordinary costs, including, without limitation, any additional costs listed in paragraph (b) above,
will only be performed if Charterer agrees to pay such additional costs in advance of such International Operations and Carrier approves such International Operations in accordance with paragraph (e) above.	
	 

 

 

 

 

 

 

	
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EXECUTION VERSIONES Filed by Filing Services Canada Inc. 403-717-3898

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  
  			NXT Energy Solutions Inc.
	
February 22, 2011

      	Suite 1400, 505 – 3rd St. SW
	20 Toronto Street, Suite
        530

      	Calgary, AB T2P 3E6
	
        Toronto, ON, M5C 2B8
	Phone: (403) 264-7020
	
phone: 416-815-0700

      	Fax: (403) 264-7168
	
fax: 416-815-0080

      	
		Strategic Communications and
		Consulting Services Proposal

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In this document, we will outline all the services and contractual terms and provisions that will govern Equicom’s proposed relationship with NXT Energy Solutions Inc.     

1.0

About The Equicom Group Inc.

The Equicom Group Inc. (“Equicom” or “EGI”), a wholly-owned subsidiary of TMX Group Inc., is Canada’s leading provider of investor relations (“IR”) and strategic corporate communications. We have been working with Canadian public issuers to build their profiles within the investment community since 1996. 

Headquartered in Toronto, and with offices in Montreal, Calgary and San Diego, Equicom’s core competency is the development and execution of tailored, strategic investor communication programs. Our proven approach is straightforward — by thoroughly understanding our clients’ businesses and by leveraging our expertise and knowledge of “the street”, we help our clients to effectively communicate their key messages, manage expectations and raise their profiles within the investment community. 

Equicom’s team of more than 50 professionals provides strategic communications services to more than 120 public companies. Our extensive client base includes micro to large cap issuers from a diverse cross-section of businesses listed on the TSX, the TSX Venture Exchange, NASDAQ, NYSE, AMEX, and AIM.

2.0

Understanding of the Requirements

NXT Energy Solutions Inc. (“NXT” or “the Company”) is a publicly traded (TSXV: NXT) international airborne geophysical service company based in Calgary.  The Company provides airborne detection solutions to support hydrocarbon exploration enabling clients to focus exploration decisions onto areas with the greatest potential. 

NXT's proprietary airborne Stress Field Detection ("SFD(R)") survey system provides a unique survey method that remotely identifies potential traps and reservoirs. SFD(R) is environmentally friendly and unaffected by ground security issues or difficult terrain and is effective both onshore and offshore. SFD(R) is the registered trademark of NXT Energy Solutions Inc.

A strategic communication plan is required to manage investor expectations and to effectively convey and increase the general awareness of the Company’s business prospects and strong growth opportunities. It is critical that NXT clearly articulate its corporate milestones and long-term business strategy. Successful execution of its milestones will assist the Company in its efforts to establish credibility in the eyes of the investment community. Strong management credibility can result in a higher valuation relative to peers as the investment community attributes greater value to the likelihood of strategic growth initiatives being successfully implemented.

In addition to effectively managing investor expectations, NXT must also demonstrate transparency and best practices in corporate disclosure. To achieve these goals, and to encourage additional investors to follow the NXT story, it is vital that the Company maintain an active and professionally managed investor relations program.

Equicom recommends a program that begins with the immediate task of auditing and adjusting NXT’s communications tools, to ensure a consistent and compelling market message populates the Company’s materials. Equicom would then introduce NXT to targeted contacts in the investment community – research analysts, fund managers, retail brokers, and corporate finance professionals. In the context of a longer-term IR strategy, Equicom will work with management to develop and identify key objectives for NXT’s program and tactics for achieving those
objectives.  

 

 

 

 

 

 

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 The program outlined in this proposal will aim to deliver an effective, well-crafted message and will then seek to build awareness and understanding of that message. 

In conjunction with the execution of its IR strategy, senior management must focus on the ongoing management of the business and delivering on the corporate objectives established in its market message. The investor relations programs developed by Equicom have been constructed to relieve senior management of many of the burdens associated with being a public company. 

As Equicom believes that an effective investor relations program is best implemented in the context of an ongoing relationship between the provider of IR services and the client company, we propose a retainer-based relationship. In this document, we outline all the services that are included in such a relationship.

 

 

 

 

 

 

 

 

 

 

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3.0

Summary of Proposed Equicom Services

Project-Based Services:

• Messaging Workshop

• Development of Investor Presentation

• Development of Investor Fact Sheet

Ongoing Services:

Services to be provided over the course of any 12-month period in conjunction with IR strategy:

Strategic:

• Define communication objectives

• Market messaging

• Ongoing capital markets NXT

• Interaction with investment community

Proactive:

• Coordinate investor presentations

 – Quarterly roadshows

 – Retail broker relations

• Provide market feedback

• U.S. Roadshows (optional)

  – 6-8 meetings per day

– 2 days of meetings per quarter

Action Items/Deliverables:

• IR strategy

• Draft, edit, or advise on material news releases

• Manage all corporate regulatory filings (SEDAR/EDGAR)

• Content for investor presentations

• Content for corporate fact sheet

• IR webpage audit

• Organize, script, and rehearse conference calls

• Consult on financial reporting materials

• Content for investor packages

• Maintain and update databases

• Disseminate news releases

• Provide support for AGM

• Coordinate basic media relations – news event driven

• Respond to shareholder inquiries

 

 

 

 

 

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4.0

Equicom’s Role – Project-based Services 

4.1    

MESSAGING WORKSHOP

A market message forms the basis of any IR strategy. Once properly defined, the market message is used in a consistent manner in a variety of tools (i.e. press releases, fact sheets, presentations and in the media) to convey an accurate and compelling story. Together with management, Equicom will define a market message that clearly identifies NXT’s market position and potential. In conjunction with management, Equicom will clearly articulate expected milestones for the next twelve-month period. Executed properly, this approach will aid in building management credibility with “the street”.

4.2 

DEVELOPMENT OF INVESTOR PRESENTATION 

Equicom will develop the storyboard, text and graphics for the presentation based on discussions with NXT’s senior management.  By pairing the strategic writing of our account executives with the award-winning design work of our creative services team, Equicom will produce a customized presentation that is concise, impactful and matches your corporate identity. Equicom focuses on high impact and high retention messaging with an emphasis on delivering the right Information that is rapidly transferred with high recall. We want your presentation to be memorable and excite potential investors. 

The presentation will not only serve as the key method to introduce investors and analysts to the new NXT story in a 1-on-1 setting, but will also reside on the Company’s website for all interested investors to understand the new strategic direction of the Company.  

4.3 

DEVELOPMENT OF CORPORATE FACT SHEET

Equicom will also design a one-page (double-sided) corporate fact sheet that clearly sets out your company’s key business and investment drivers. These short documents are extremely useful in assisting professional investors with limited time in making an initial assessment on your company. This document will also be posted to your website and made available in PDF format.

5.0

Equicom’s Role – Ongoing Services

THE DESIGN AND DIRECTION OF AN IR STRATEGY

Critical to the success of Equicom’s investor relations programs are the unique IR strategies that are customized to meet each client’s capital markets objectives. Equicom will build on the strengths of NXT’s existing communications program, supplementing the Company’s efforts to date. Working closely with management, Equicom will develop a comprehensive strategy that will provide direction for the execution of an annual IR program. This program will have clearly defined objectives and tactics that will allow both parties to measure the continued success of the plan. The final strategy will include a detailed calendar so that management understands their expected time commitment necessary for the execution of the IR program. As part of the program Equicom will: 

 

 

 

 

 

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5.1

PROVIDE ONGOING CAPITAL MARKETS NXT

The Equicom team has vast experience dealing with obstacles and providing NXT as it relates to communications with the investment community. As a result, Equicom is available as a strategic resource to NXT management on an ongoing basis for any capital market situation, including: 

·

Setting milestones

·

Managing expectations

·

Issues with guidance

·

M&A and crisis communications

·

Investor targeting 

·

Financing Strategies

·

The generation and maintenance of analyst coverage

5.2

IR MATERIALS AND CONTENT

5.2.1

News Releases:

Equicom will draft, edit or advise on all material news releases as required. As an Equicom client, NXT will, unless otherwise agreed upon, disseminate all news releases via the Equicom Disclosure Network (“EDN”), an Equicom/CNW Group partnership, which provides Equicom clients with significant discounts on newswire services (see Appendix ‘A’).

5.2.1.1

SEDAR/EDGAR
Filings:

Equicom will seamlessly handle all routine SEDAR and EDGAR filings. This service is provided at discounted rates through the Equicom/CNW Group partnership (see Appendix ‘A’).

5.2.2

Investor
Presentations:

Equicom will provide content for the Company’s electronic (PowerPoint) investor presentation. Textual changes to reflect updates and material changes will be added to the presentation as warranted by corporate developments.

5.2.3

Fact Sheet:

Equicom will provide content for the Company’s corporate fact sheet and update it quarterly. 

5.2.4

Website Content:

Equicom will conduct an audit of Company’s website to ensure best practice and will, on an ongoing basis, consult on its content to ensure the investor information is accurate and comprehensive. 

5.2.5

Conference Calls:

When required, Equicom will, on a timely basis, organize conference calls on behalf of NXT. A script will be provided for all conference calls, including quarterly/annual results and special announcements. Equicom will assist with all preparation including rehearsal, if necessary, and potential questions from the investment community. 

5.2.6

Annual/Quarterly Reports:

Equicom will be available to consult on the design and content of all financial reporting materials. Full annual report design services are available from Equicom at additional cost and are described in section 9.3 of this proposal.

5.2.7

Investor Package:

Equicom will consult on the contents of a comprehensive investor package and disseminate copies to interested investors upon request.

 

 

 

 

 

 

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5.3

COORDINATE INVESTOR PRESENTATIONS

In an effort to increase the Company’s exposure, Equicom will develop a presentation strategy and, subject to market conditions, will organize meetings with members of the professional investment community (i.e. Analysts, Institutions, Brokers, and Corporate Finance). Together with management, Equicom will identify three specific days each quarter to execute a formal roadshow. In this manner, the CEO and CFO are able to make the most efficient use of their time and provide frequent and ready access to the professional investment community. 

Equicom will update NXT’s database following introductions and will actively seek to build out the contact list. 

5.4

U.S. ROADSHOWS (optional)

The United States is the world’s largest financial market and an important source of capital for Canadian issuers.  Building on a leadership position in the Canadian investor relations field, Equicom regularly targets the U.S. investment community for clients, targeting buy- and sell-side audiences across the country. Equicom has a U.S. office and through this optional offering, Equicom will build out 2 roadshow days per quarter focusing on the markets of New York, Boston, Chicago, San Francisco, Los Angeles, Houston, and Dallas. 

5.5

RETAIL BROKER RELATIONS

Equicom’s broker relations unit serves to support Equicom’s investor relations services through increased communications with the retail brokerage community. Through this service, Equicom is in contact with more than 6,000 brokers across the country and provides these professionals with objective information on Equicom clients while utilizing this same channel to receive important feedback on how Equicom clients are perceived by the investment community.

Additional components of this service include the booking of roadshows and ‘On the Radar’, a TSX Group and Equicom co-branded program hosting monthly retail broker luncheons in Canada’s major financial centers. 

‘On the Radar’ is available to Equicom clients at a discounted rate and is described more fully in section 9.1 of this proposal.

5.6

PROVIDE MARKET FEEDBACK

It is important that the Management and Board of Company continue to receive investment community feedback to better understand the perceptions and expectations of existing and potential investors. Equicom is in constant contact with the investment community and will provide regular feedback regarding market perceptions, expectations, frequent questions and concerns. This feedback will then be used to augment elements of the IR program to ensure that its key objectives are being achieved in the most effective manner possible.

5.7

ANNUAL GENERAL MEETING (AGM)

Equicom will provide planning and logistical support for all elements of the AGM, including location selection, rehearsal of key speakers if required, presentation scripting, and potential questions from the investment community. Equicom will also consult on and develop content for NXT’s AGM Investor Presentation.

 

 

 

 

 

 

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5.8

COORDINATE BASIC MEDIA RELATIONS 

Equicom will assist in arranging financial media interviews where appropriate and as news dictates. Equicom has strong relationships with all major national media outlets, including the National Post, the Globe and Mail, BNN (formerly ROBtv), CTV Business Newsnet, CBC Newsworld, Canadian Press, Reuters, and Bloomberg. In addition, relationships have been established with French and English media outlets in the province of Quebec. Equicom will organize and/or coordinate any events that support the overall objectives of the IR program.

Comprehensive media monitoring is available from Equicom at additional cost and is described in section 8.2 of this proposal.

5.9

SOCIAL MEDIA 

Equicom will make a recommendation to NXT on incorporating different social tools into its investor communication practices.  This might include the use of blogs, Twitter, YouTube, Slideshare, etc. Equicom is in a position to manage the execution of a social media program if needed.  

5.10

RESPOND TO SHAREHOLDER INQUIRIES

Equicom can field shareholder inquiries by phone and e-mail. This service will provide shareholders with a professional, patient, and well-informed individual that can answer questions quickly and effectively. In addition, Equicom’s personnel are experienced in working with the levels of inquiry that come from professional investors and are therefore comfortable in responding to questions of a complex, strategic, and financial nature.

5.11

OTHER SERVICES

Equicom will assume the administrative duties of a company’s IR department. As such, we will dramatically reduce the burden of being a public company by (see Appendix ‘A’):

• disseminating press releases; and

• maintaining and updating dissemination databases.

 

 

 

 

 

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6.0

Process

Equicom will allocate an account manager to NXT who will be responsible for the daily management of the relationship with Equicom. This account manager will be your central contact at Equicom and will be generally responsible for ensuring objectives are achieved. To ensure maximum efficiency, NXT shall also designate a representative from whom Equicom shall obtain information, directives and guidance. 

Equicom will regularly report to the management of NXT outlining Equicom’s activities, market feedback, upcoming events, recommendations, and adjustments to the program.

Throughout the term of the contract, Equicom will require regular updating from management regarding the activities of the corporation, merger and acquisition intentions, strategic alliance initiatives, the marketplace, product and service offerings, and similar emerging matters. This will ensure Equicom is continuing to manage reasonable expectations as well as disseminating accurate information.

7.0

Compensation and Conditions

In consideration for Equicom’s provision of services, the Company shall compensate Equicom, as follows:

Project-Based Services:

  

Messaging and material
development:

 

$10,000 + H.S.T

Payment Schedule: 

50 % due upon initiation of this agreement.

50 % due completion of deliverables

Ongoing IR Services:

Annual Work Fee:

 

$72,000 + G.S.T.

Payable in monthly installments of:

 

$6,000 + G.S.T.

in advance, on the first day of every calendar month onwards

(This represents the maximum provision of 35 hours of service per month. Any time expended in excess of 35 hours will be billed at our corporate blended rate of $250 per hour).

NOTE: The annual work fee shall increase by 5% at each year’s anniversary date.

U.S. Roadshow Offering (optional):

Monthly work fee:

$2,500 + G.S.T. 

in advance, on the first day of every calendar month

A full description of the goods and services included and excluded from the Work Fee are included in Appendix ‘B’ to this proposal.

Special projects such as the graphic design and printing of disclosure materials (quarterly/annual reports, investor folders and similar materials) investor packages and new media services are described in section 8.0 below and quoted on a project basis.

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8.0

Service Contract

Equicom would be pleased to enter into and be bound by a service contract with the Company on the terms and conditions outlined herein, including in the foregoing proposal (hereinafter referred to as the “Proposal”) as well as in Appendices ‘A’ and ‘B’ and sections 1 through 22 of Schedule ‘A’ hereto (hereinafter referred to, collectively, together with the Proposal as the “Agreement”). To signify your agreement and acceptance of the Agreement and all of the terms and conditions thereof, please sign in the space provided below and return it via email to
cdavies@equicomgroup.com or via facsimile to 416-815-7127 – attention Cameron Davies, whereupon the Agreement will take effect and be legally binding upon and enforceable against each of Equicom and the Company. 

DATED at Toronto this 22nd day of February, 2011.

□ We would like to utilize EDN (discounted newswire service)

THE EQUICOM GROUP INC.

Per:

/s/ David Feick

Name/Title: 

Agreed and accepted by NXT Energy Solutions Inc. this 26 day of May, 2011.

NXT ENERGY SOLUTIONS INC.

Per:

/s/ George Liszicasz

Name/Title: CEO

 

 

 

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9.0

Additional Services

The Equicom Group also provides a suite of services that complement our core IR retainer. Equicom would be pleased to provide detailed descriptions and quotes for these project-based and ongoing services.

9.1

ON THE RADAR

‘On the Radar’ is an Equicom and TSX Group co-branded program that hosts monthly retail broker luncheons in the financial districts of Toronto, Montreal, Calgary, and Vancouver. In this setting, public companies are given the opportunity to present their growth and business strategies to a wide audience in the professional investment community in an efficient and captive environment. As part of this program presenting companies are provided full feedback documents. In addition, an audio recording and a copy of the presentation slides are posted on the TSX website and are made available to the issuer.

Equicom clients are provided the opportunity to present at these forums at the discounted rate of $5,000 per event. 

9.2

MEDIA MONITORING 

Equicom provides media monitoring services covering worldwide news content available online. More than 50,000 news producing sources globally are accessed daily and news articles are delivered by email in a summary format that is easy to access, view and archive.

Virtually all news available online is searched by our service. The advantage of online monitoring is the speed of acquisition of the content so that breaking news can be delivered as it happens.

Reports can be provided on a daily, weekly or monthly basis. Included in the media content are global newswires such as Dow Jones, Reuters, Associated Press, along with Canadian Press and other PR newswires such as CNW.

Equicom also offers broadcast monitoring services for Canada, the United States, and internationally if required.

9.3

MARKETING SERVICES

Turnkey marketing, design and printing services for a complete range of print and visual materials, including annual reports, brochures, investor presentations, signage, and corporate logos are available:

Annual Reports – Equicom has a full service turnkey design studio which effectively marries strong strategic messaging with visual support. The annual report team believes in making every report precise and memorable. Their work has been recognized with a number of industry awards. Annual report design projects are quoted on a project basis.

9.4

NEW MEDIA SERVICES

Website design and development
– Equicom takes a user-centric approach to the design and development of corporate websites. We apply best practice methodology to ensure that the planning, design implementation and development of the site accurately represents the company and addresses the communication needs of your core audiences. The most critical element of any web site is its navigation structure, and the key to achieving strong navigation is through single-click, point-to-point navigation. This enables the user to access any page from any other page on the website in one click.

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We establish the communication objectives of the site and tailor the navigation to the core user groups. This ensures a well-organized site, with prioritized content, logical layouts and relevant links, all of which increases the “stickiness” of relations with core user groups.  

Page designs with clean and effective layouts will aid communication and increase traffic to the site. The effective use of sub navigation, sidebar menus and relational content will provide meaningful subject matter and elevate the user experience.

Internet Broadcasting
– Equicom offers a comprehensive suite of Internet broadcasting services that bring the impact and effectiveness of a live presentation to the rigid requirements of continuous disclosure. Equicom can broadcast conference calls, material announcements and corporate presentations over the Internet—as they happen to a wide audience of shareholders, investment professionals, and other interested parties. In addition, these events can be archived for repeated viewing. All Internet broadcasting services are available on a turnkey basis, meaning Equicom will take care of the message
and the medium.

9.5

CORPORATE SECRETARIAL SERVICES 

Equicom provides support for Board of Directors’ matters, guidance through the securities regulatory framework, and the management of many other governance services such as:

• Corporate Secretarial Support

• Stock Option Administration

• Corporate Governance Guidance

• SEDI and Other Regulatory Filings

• Whistleblower Hotline Guidance

 

 

 

 

 

 

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Appendix ‘A’

News Dissemination and Communications Services

News Dissemination Services:

Equicom shall provide news release distribution in Canada and, if needed, the United States and globally. Through a partnership with CNW Group (“CNW”), Equicom has developed the Equicom Disclosure Network (“EDN”). The EDN is a customized news distribution channel that exceeds all regulatory requirements for news dissemination and is designed specifically to elevate the profile of Canadian public issuers both within the media and financial community, including a profile on CNX Marketlink. The Company may elect to utilize CNW’s “Canadian Disclosure Network” for news dissemination.

SEDAR/EDGAR Filing:

Equicom shall provide SEDAR and EDGAR filing services for all documents produced by Equicom as well as such other documents that the Company may direct.

Conference Calls and Webcasting:

Equicom shall organize and provide all technical services related to the conference calls announcing quarterly/annual results and material events. Equicom shall also provide audio Webcasting services of each such call. Additional Webcasting options and solutions are available upon request.

Pricing and billing for all News Dissemination and Communications Services shall be in accordance with the pricing schedule included with this
Addendum. 

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14

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Terms of Payment:

All Newswire and Communications Services shall be billed immediately and all outstanding amounts shall be due and payable upon receipt.

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Appendix ‘B’

1. 

 Consumables and services included in the Work Fee

• All services described in Schedule ‘A’ of this Agreement

• Telephone and long distance charges;

• Basic postage;

• Basic photocopying;

• Basic faxes;

• E-mail broadcast;

• Office supplies.

All taxes that may be associated with the above noted consumables and services shall be included in the Work Fee.

2. 

Disbursements and expenses incurred by EGI on behalf of the Company and not included in the Work Fee. All such expenses are charged-back to the Company at EGI’s cost.

• EGI staff travel, accommodations and meals/per diem while traveling on behalf of the Company.

3. 

Disbursements and expenses incurred by EGI on behalf of the Company and not included in the Work Fee. All such expenses are charged-back to the Company as incurred and subject to a 10% administration fee.

• All expenses incurred on behalf of the Company and not mentioned in paragraph 2 of this Appendix —specifically, expenses that EGI must carry on behalf of the Company. Without limitation these include:

• Any outside professional services;

• Printing and large volume photocopying;

• Media buys and similar purchases;

• Facility rentals and related costs;

• Mass mailing using the Canadian Post office or other means;

• Couriers;

• Client staff travel.

All expenses outside of the Work Fee will only be incurred after Client approval has been received. 

For expenses over $1,000, EGI may pre-invoice. 

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Schedule ‘A’

1.

This Agreement is to be effective as of the date signed by both parties unless another date is specifically noted herein and agreed to by both parties, for a period of one (1) year (the “Term”), renewable automatically for successive one (1) year periods unless otherwise terminated by either Party in accordance with this Agreement.

2.

The Company hereby engages EGI as its exclusive provider of investor relations (IR) services, as more fully described in the Strategic Communications and Consulting Services Proposal (the “Proposal’) or as otherwise agreed in writing between the Parties from time to time (collectively, the “Services”) and EGI hereby agrees to be the provider of such Services to the Company during the Term of this Agreement. 

3.

In consideration for the Services provided by EGI hereunder, the Company agrees to compensate EGI in accordance with the terms set out in the Proposal under the heading, “Compensation and Conditions”. Interest on all such compensation that is due shall be charged at the rate of 1.5% per month.

4.

As further consideration, the Company undertakes and agrees not to recruit, hire or employ in any capacity any of the principals or employees of EGI or any associated business organization or companies of such individuals or business organization or companies where such individuals may become employed, for the duration of this Agreement, and for a further 18 months after termination of this Agreement, without the prior written consent of EGI. 

5.

During the Term of this Agreement, EGI will devote such time, attention and abilities to the business of the Company as EGI may consider necessary for the proper discharge of its duties in performing the Services. In the delivery of Services, EGI will comply with applicable laws.

6.

Customer may terminate this Agreement at any time by providing ninety (90) days prior written notice of termination of this Agreement (a “Notice Period”), and EGI may terminate this Agreement at any time by providing thirty (30) days prior written notice of termination of this Agreement (also, a “Notice Period”).  During the Notice Period, all obligations specified in this Agreement shall remain in full force and effect.  Upon termination, this Agreement shall be null and void and of no further force and effect, subject to the obligations described in sections 3, 4, 8, 11, 12 and 13 of this Schedule ‘A’ which shall survive termination. 

7.

EGI will comply with all written directions of the management of the Company and the Company’s Board of Directors. 

8.

"EGI agrees to hold in confidence and not to use or disclose to any other persons (except for disclosure to its affiliates for the purposes of providing auxiliary services to EGI and persons retained by EGI in performing the Services, for which EGI will be responsible) any properly designated confidential or proprietary information of the Company disclosed to EGI unless and until required in order to perform the Services hereunder. EGI shall not be liable for disclosure of information upon the occurrence of one or more of the following events:

(a) 

the information or any portion thereof is or becomes publicly available, other than through a breach of this Agreement;

(b) 

the information or any portion thereof is subsequently lawfully obtained by EGI from a third party having the right to disseminate such Confidential Information without restriction on disclosure;

(c) 

the information or any portion thereof was known to EGI prior to its disclosure by the Company as shown by documentation kept in the ordinary course of business sufficient to establish such knowledge;

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(d) 

the Company has provided its prior written consent for such disclosure; 

(e)

information or any portion thereof that is independently developed by EGI without use of Company’s confidential or proprietary information; and

(f)

the information is required to be disclosed by law, regulation or legal process.

EGI’s obligations of confidence in respect of such information shall survive for a period of three (3) years following termination. 

9.

EGI is a wholly owned subsidiary of the TMX Group Inc., which operates, among other things, two national equity exchanges, TSX Venture Exchange and Toronto Stock Exchange.  Notwithstanding this ownership of EGI by TMX Group Inc., the Company, as a client of EGI, will not receive any preferential treatment from such exchanges. 

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The Company represents and warrants, and assumes responsibility for the accuracy, completeness, and timeliness of all information and disclosure events or materials produced by the Company and used by EGI in or for the Services, and further represents and warrants that the information and materials collected by and/or provided by the Company and used by EGI in accordance with this Agreement are in compliance with all applicable laws, including but not limited to The Personal Information Protection and Electronic Document Act.  Forthwith after becoming aware that information provided by the Company to EGI is not true or correct in any way, the Company shall inform EGI and take steps with EGI to remedy same. The Company warrants that it shall act in a good faith and in a timely and reasonable manner.  EGI shall not be responsible for disclosure errors or omissions. 

11.

EGI will not be liable to the Company for any indirect, consequential, punitive or special damages, loss of profits or loss of opportunity in connection with the Services.  Furthermore, EGI has no liability for the failure of the Company to comply with exchange rules, requirements or policies or securities or corporate law obligations (including those relating to timely or continuous disclosure), nor for the adequacy, accuracy or timeliness of any statement made in any document issued or oral communication made by or on behalf of the Company or its directors, officers, employees or agents.  Notwithstanding any other provisions of this Agreement, it is the responsibility of the Company to ensure that it has complied with applicable securities and corporate laws and exchange rules, requirements and policies.  

12.

The Company hereby agrees to indemnify and hold EGI, its directors, officers, employees, agents, and affiliates harmless from and against any and all claims, demands, liabilities, judgements, losses and expenses, including legal fees and expenses, brought against or involving EGI that relate to or arise out of EGI’s performance of the Services hereunder whether indirect, consequential, punitive or special losses damages or loss of profits.

13.

Notwithstanding any other provisions in this Agreement, EGI’s total cumulative liability to the Company under this Agreement will be limited to direct damages incurred by the Company, and such liability will not exceed the aggregate amount the Company has paid EGI under this Agreement during the twelve (12) months preceding the date on which the cause of action arose.  The foregoing limitation of liability will apply regardless of the form of the action, whether in contract or tort (including negligence) or otherwise. 

14.

This Agreement shall be binding upon the Parties hereto and their respective successors and permitted assigns.

15.

The Parties will execute and deliver all such further documents and instruments and do all acts and things as may be reasonably required to carry out the full intent and meaning of this Agreement.

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16.

Words importing the single number only will include the plural and vice versa and words importing the masculine gender shall include the feminine and neuter genders and words importing persons shall include firms and corporations and vice versa.

17.

This Agreement may be executed in several parts in the same form and such parts as so executed shall together form one original Agreement and such parts, if more than one, shall be read together and construed as if all the signing Parties hereto had executed one copy of this Agreement. This Agreement may be transmitted by facsimile and the reproduction of signatures by facsimile will be treated as binding as if originals and each Party hereto undertakes to provide the other Party with a copy of the Agreement bearing original signatures forthwith upon demand.

18.

Except as expressly provided in this Agreement, the Parties acknowledge and agree that each Party shall be free to enter into any contractual, business or other relationship with any other party in respect of any commercial activity. This Agreement is entered into by separate legal entities and neither is the agent or employee of the other for any purpose whatsoever. The Parties do not intend to create a partnership, joint venture or similar relationship by virtue of this Agreement. Except as provided herein, neither Party shall have the right to bind the other to any agreement with a third party or to incur any obligation or liability on behalf of the other.

19.

This Agreement shall be governed by and construed in accordance with the laws of the Province of Ontario and treated in all respects as a contract made in the Province of Ontario.

20.

Any notice required to be given hereunder shall be deemed to have been properly given if delivered or sent by facsimile (together with confirmation of receipt) as follows:

To EGI:

At the address and facsimile number first noted above

To NXT Energy Solutions Inc.:

At the address and facsimile number first noted above

Any such notice shall be deemed to have been given and received on the same business day it was delivered or sent by facsimile so long as it was received between the business hours of 9:00
AM  and 4:00 PM  EST, and if delivered during other hours or days, on the first business day following the date on which it was sent. Any Party may change its address for service from time to time by notice given in accordance with the foregoing.

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This Agreement together constitutes the entire understanding between the Parties in relation to the matters dealt with herein and supersedes all previous covenants and representations made by either Party, whether oral or written.

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The parties acknowledge that they have expressly required that this Agreement and all schedules, documents and notices relating thereto be drafted in the English language.  Les parties aux présentes déclarent qu’elles ont expressément exigé que la présente convention et tous les annexes, documents ou avis qui y sont afférents soient rédigés en langue anglaise.

Initials:

___________

NXT Energy Solutions Inc. 

___________

Equicom Group

20

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