February 28, 2000
Xxxxxx.xxx, Inc.
#204-18702 Xxxxx Xxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxxxx
XXX 00000
Attention: Mr. Xxx Xxxxx, President
Re: FINANCIAL ADVISORY AGREEMENT
Dear Sir:
Further to our discussions, we understand that Xxxxxx.xxx ("Bidhit" or
the "Corporation") has expressed a desire in entering into a relationship
whereby it will seek forms of advertisements including but not limited to
contra-advertising from one or more of the newspapers of the Xxxxxxxxx group
of companies, which companies include, but are not limited to Xxxxxxxxx Inc.,
Xxxxxxxxx International Inc., Xxxxxxxxx International Publishing Inc. and
Xxxxxxxxx Canadian Publishing Holdings Inc. (collectively referred to as the
"Xxxxxxxxx Group") in exchange for common shares of the Corporation (the
"Share For Advertisement Exchange"). We further understand that the
Corporation is desirous of retaining a financial adviser in reviewing the
proposed Share For Advertisement Exchange. We are pleased to outline the
terms of an agreement pursuant to which Salman Partners Inc. ("Salman
Partners") and its US subsidiary Salman Partners (USA) Inc. will be engaged
by Bidhit to act as its financial advisor in respect of the services defined
below. Upon the Corporation's acceptance, this letter shall constitute the
financial advisory agreement (the "Financial Advisory Agreement") between
Bidhit and Salman Partners.
1. SERVICES. Subject to the terms and conditions set forth below,
Bidhit hereby agrees to exclusively retain Salman Partners to provide the
following advisory services:
(a) evaluate and determine the various options available to the
Corporation with respect to their desire in undertaking the Share For
Advertisement Exchange with the Xxxxxxxxx Group; and
(b) assist the Corporation in concluding a transaction whereby
the Corporation undertakes a Share For Advertisement Exchange with the
Xxxxxxxxx Group (hereinafter referred to as the "Transaction").
Xxxxxx.xxx, Inc.
February 28, 2000
Page 2
2. SALMAN PARTNERS FEES. In consideration for the services provided
hereunder, Bidhit agrees:
(a) whether or not the Transaction contemplated herein is
completed, to pay Salman Partners forty thousand (US$40,000) dollars and in
addition, to register in Salman Partners name twenty thousand (20,000) common
shares in the capital of Bidhit upon execution of this Financial Advisory
Agreement (together, the "Retainer Fee"); and
(b) upon successful closing of the Transaction, to pay Salman
Partners through its U.S. subsidiary Salman Partners (USA) Inc. a transaction
fee (the "Transaction Fee") equal to:
(i) six percent (6%) of the Transaction Value (as defined
below) payable in the form of common shares in the capital of Bidhit;
(ii) six percent (6%) of the Transaction Value (as defined
below) payable in the form of broker warrants in the capital of Bidhit; and
(iii) sixty thousand (US$60,000) dollars.
"Transaction Value" for purposes of this Financial Advisory Agreement
shall mean the total consideration expressed in dollars as a result of the
Transaction with the Xxxxxxxxx Group and shall include the aggregate value of
all cash, securities and other property paid for in connection with the
Transaction, including all indebtedness assumed. In the event that the
consideration received in the Transaction is paid in whole or in part in the
form of securities of other property, then, for purposes of calculating the
fee hereunder, the value of such securities or other property shall be fair
market value thereof on the day immediately preceding the consummation of the
Transaction; provided, however, that if such securities consist of securities
with an existing public trading market, the value thereof shall be determined
by the weighted average of the closing prices for such securities on the 20
trading days immediately preceding the consummation of the Transaction.
3. XXXXXXXXX GROUP FEES. In consideration for entering into the
Share For Advertisement Exchange, Bidhit shall issue and register in the name
of Xxxxxxxxx Group one million (1,000,000) common shares, and in addition, it
shall issue and register in the name of Ravelston Holdings Inc. one hundred
thousand (100,000) common shares. Six hundred thousand (600,000) of the one
million (1,000,000) common shares issued to Xxxxxxxxx Group would be paid in
contra advertising at $3.50 per share, based on Xxxxxxxxx Group's cost, one
hundred thousand (100,000) common shares to Xxxxxxxxx for $3.00, in cash, and
three hundred thousand (300,000) common shares for the non-exclusive use of
content "limited by any pre-existing Xxxxxxxxx agreements and approval from
Xxxxxxxxx itself and for the Chicago Sun Times private
Xxxxxx.xxx, Inc.
February 28, 2000
Page 3
program, to Bidhit at the deemed market price on NASDAQ at the time of
execution of this Financial Advisory Agreement.
4. EXPENSES. Whether or not a Transaction is completed, all
reasonable out-of-pocket expenses incurred by Salman Partners hereunder,
inclusive of telephone, facsimile, travel, legal counsel, word processing,
and third party expenses shall be borne by the Corporation (the
"Disbursement Fee"), subject to a maximum of $25,000 US, unless otherwise
agreed to by the Corporation.
5. INDEMNITY. In consideration of Salman Partners entering into this
Financial Advisory Agreement, the Corporation agrees to indemnify Salman
Partners in accordance with Schedule "A" attached hereto which Schedule forms
part of this Financial Advisory Agreement.
6. RIGHT OF FIRST REFUSAL. If Salman Partners is successful in
closing the Transaction, Bidhit shall grant to Salman Partners a right of
first refusal to act as co-underwriter, co-agent or co-financial advisor in
any initial public offering, whether pursuant to a prospectus, take-over bid
or business combination whether in Canada or the United States by the
Corporation, or any of its subsidiaries during a period ending thirty six
(36) months after termination of this Financial Advisory Agreement.
7. SUBSEQUENT TRANSACTION. The Corporation agrees that if a
Transaction occurs within one (1) year following termination of the
engagement hereunder involving the Xxxxxxxxx Group, the Transaction Fee will
become due and payable to Salman Partners at the time of the closing of that
Transaction.
8. SHARE FOR ADVERTISEMENT EXCHANGE TERMINATION. The Xxxxxxxxx Group
would have the right to revoke the Share for Advertisement Exchange anytime
within a twelve-month period commencing on the date of execution of this
Financial Advisory Agreement, if based on Xxxxxxxxx Groups sole discretion,
the performances of Bidhit's obligations under the share For Advertisement
Exchange are unsatisfactory.
9. FINANCIAL ADVISORY TERMINATION. This Financial Advisory Agreement
may be terminated at any time by the Corporation or by Salman Partners by
giving written notice of termination which notice will be effective 5 days
following receipt thereof, and otherwise will terminate immediate following
the closing of a Transaction. Notwithstanding the termination of this
Financial Advisory Agreement for any reason whatsoever, the provisions of
paragraphs 2 through 11 hereof, inclusive, shall survive such termination,
provided that, if this Financial Advisory Agreement is terminated by either
the Corporation or Salman Partners, the Disbursement Fees payable to Salman
Partners as of the date of termination shall be immediately payable to Salman
Partners.
Xxxxxx.xxx, Inc.
February 28, 2000
Page 4
10. PRESS RELEASE. Upon execution of this Financial Advisory
Agreement, Bidhit and the Xxxxxxxxx Group will jointly issue a press release
outlining the proposed transaction and naming Bidhit their exclusive Online
Auction service.
11. MISCELLANEOUS.
(a) This Financial Advisory Agreement shall be construed and
enforced in accordance with, the rights of the parties shall be governed by
the laws of the Province of British Columbia.
(b) Any dispute concerning any question of fact or law arising out
of the circumstances of this Financial Advisory Agreement shall be determined
by arbitration, pursuant to the ARBITRATION ACT (British Columbia).
(c) Should any provision of this Financial Advisory Agreement, in
whole or in part, be or become invalid, illegal or not capable of
performance, the validity or legality of the remaining provisions of this
Financial Advisory Agreement shall not thereby be affected; and in any such
case in lieu of the invalid, illegal or inoperative provision, this Financial
Advisory Agreement shall be applied or interpreted in a reasonable manner
which so far as is legally permissible comes as close as possible to the
application that the parties intend or would have intended according to the
sense and purpose of this Financial Advisory Agreement had they known of the
invalidity, illegality or inoperativeness at the time of the execution of
this Financial Advisory Agreement.
(d) Time shall be of the essence of this Financial Advisory
Agreement.
(e) This Financial Advisory Agreement may be executed in one or
more counterparts and/or by facsimile each of which when so executed shall
constitute an original and all of which together shall constitute one and the
same agreement.
If the foregoing is in accordance with your understanding and is agreed
to by yourself, please confirm your acceptance by signing the enclosed
duplicate of this letter and returning same to the undersigned as soon as
possible.
Yours very truly,
SALMAN PARTNERS Inc.
/s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx
President & CEO
Xxxxxx.xxx, Inc.
February 28, 2000
Page 5
Agreed to and accepted this 3rd day of
March 2000.
Xxxxxx.xxx, Inc.
/s/ Xxx Xxxxx
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Xxx Xxxxx, President
