THIS AGREEMENT made as of the 3rd day of May, 1999.
BETWEEN:
XITE JEWELRY.COM INC., a corporation incorporated
pursuant to the laws of the Province of Ontario,
(hereinafter called the "Purchaser")
OF THE FIRST PART
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DG JEWELRY INC., a corporation incorporated
pursuant to the laws of the Province of Ontario,
(hereinafter called the "Vendor")
OF THE SECOND PART
WHEREAS Vendor wishes to sell, assign and transfer to Purchaser and
Purchaser wishes to purchase and acquire from Vendor all of Vendor's right,
title and interest in and to all of the third-party site sale and ancillary
agreements described on Schedule "A" hereto (the "Purchased Asset");
AND WHEREAS the Purchaser intends to incorporate a subsidiary
corporation pursuant to the laws of the state of Delaware under the name
Xitejewelry.com Inc. ("Xite Delaware");
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the
promises and the mutual covenants hereinafter contained, the parties hereto
covenant and agree as follows:
1. Purchaser hereby purchases and acquires the Purchased Asset from Vendor
and Vendor hereby sells and transfers the Purchased Asset to Purchaser
upon the terms herein set forth.
2. The Purchaser and the Vendor acknowledge and agree that the purchase
price (the "Purchase Price") for the Purchased Asset shall be One
Million and Eight Hundred Thousand Dollars ($1,800,000.00).
3. The Purchase Price for the Purchased Asset shall be paid and satisfied
by a demand promissory note (the "Promissory Note") issued by Purchaser
to Vendor in the amount of One Million and Eight Hundred Thousand
Dollars ($1,800,000.00). The Promissory Note shall not bear interest
and shall be payable on demand following the earlier of: (a) Ninety
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(90) days following the successful completion of an initial public
offering of approximately 2,200,000 common shares in Xite Delaware; and
(b) the 31st day of December, 2002.
4. Purchaser represents and warrants to the Vendor as follows:
(a) It has been duly incorporated under the laws of the Province
of Ontario and is a validly subsisting corporation;
(b) It has full authority to enter into and carry out the
provisions of this Agreement; and
(c) It is not a "non-Canadian" for the purposes of the Investment
Canada Act.
5. Vendor represents and warrants to the Purchaser as follows:
(a) It has been duly incorporated under the laws of the Province
of Ontario and is a validly subsisting corporation;
(b) It has full authority to enter into and carry out the
provisions of this Agreement;
(c) It has not previously assigned the Purchased Asset to any
other party or parties;
(d) It owns the Purchased Asset free and clear of all liens and
encumbrances, and Vendor has taken all necessary steps to
transfer the Purchased Asset to Purchaser in such manner as
may be reasonably required by Purchaser; and
(e) It is neither a "non-resident" for the purposes of the Act nor
a "non-Canadian" for the purposes of the Investment Canada
Act.
6. All representations, warranties and covenants contained in this
agreement shall survive the execution and delivery of this Agreement
and the completion of the transactions contemplated herein.
7. Each of the parties hereto shall from time to time execute and deliver
all such further documents and instruments and do all acts and things
as the other parties may reasonably require to effectively carry out or
better evidence or perfect the full intent and meaning of this
Agreement.
8. Time shall be of the essence of this Agreement.
9. This Agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns.
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10. This Agreement shall be governed by and construed in accordance with
the laws of the Province of Ontario.
11. No modification of or amendment to this agreement shall be valid and
binding unless set forth in writing duly executed by the parties
hereto.
12. All dollar amounts referred to in this Agreement are in American funds.
IN WITNESS WHEREOF the parties hereto have executed this agreement.
XITE JEWELRY.COM INC.
Per:_______________________________
Name: Daniel Berkovits
Title: President
I/we have authority to bind the Corporation.
DG JEWELRY INC.
Per:_______________________________
Name: Jack Berkovits
Title: President
I/we have authority to bind the Corporation.
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SCHEDULE "A"
THIRD-PARTY AGREEMENTS
1. Agreement between DG Jewelry Inc. and Ubid.com dated the 29th day of
March 1999.
2. Agreement between DG Jewelry Inc. and Bid.com, dated the 22nd day of
January, 1999.
3. Agreement between DG Jewelry Inc. and Dealdeal dated the 23rd day of
March, 1999.
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