<PAGE>

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

                                     - and -


                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.

                                      -3-

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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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