OPTION TO PURCHASE AGREEMENT
BETWEEN:
DIGITAL SERVANT CANADA CORPORATION
a Canada corporation
000 Xxxxxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx Xxxxxx X0X 0X0
(hereinafter referred to as the "Seller")
OF THE FIRST PART
AND
DIGITAL SERVANT CORPORATION
a Nevada corporation
000 Xxxxxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx Xxxxxx X0X 0X0
(hereinafter referred to as the "Purchaser")
OF THE SECOND PART
WHEREAS
THIS OPTION TO PURCHASE AGREEMENT is made by and between Digital
Servant Corporation, a Nevada corporation and referred to herein as "Purchaser",
Digital Servant Canada Corporation, a Canadian corporation, referred to herein
as the "Seller".
RECITALS
WHEREAS, the Seller is the developer and owner of the worldwide
manufacturing and distributing rights of the "Digital Servant" technology,
related tradenames and products, referred to herein as "Product", and
WHEREAS, the Seller desires to sell the Product to a publicly traded
corporation in the United States of America, which intends to trade its common
shares in the United States national Over-The-Counter market.
NOW, THEREFORE, in consideration of the mutual covenants herein, the
Purchaser and Seller agree as follows:
(1)
I. SALE OF PRODUCT
Upon the term and subject to the conditions set forth in this
Agreement, the Purchaser shall sell, assign, and deliver to Seller, and Seller
shall accept from Purchaser, $2,500,000 USD, payable at a rate of 10% down on or
before December 31, 2001, payable over a period of 60 months from the date of
purchase, with payments due quarterly carrying an interest rate of 8% per annum
on the unpaid balance. The first such quarterly payment is due on or before
March 31, 2002. This $2,500,000 USD in cash is paid for the Product in addition
to the 15,299,000 Common Stock already received by the Seller in exchange for
the Purchaser's License worldwide rights to the Product.
II. PURCHASE PRICE
In consideration for the sale of the shares set forth in Section I
above, Seller shall:
a. Sell and assign all rights and title regarding the Product to the
Purchaser upon the payment of 10% of the purchase cash price of $2,500,000 USD
or $250,000 USD, such rights being registered with the tradename office in the
appropriate countries.
b. Sell and assign all the technology, materials and literature
developed, information designs and market studies and tradename(s) developed by
the Seller with respect to the Product to the Purchaser.
c. Convey any and all assets associated with the Product and any and
all contracts and agreements relating to the Product to the Purchaser.
III. REPRESENTATIONS OF SELLER
Seller represents and warrants that:
a. It is the owner in good standing with all encumbrances paid on
the Property
b. It is authorized to enter into this Agreement.
c. It has obtained written authorization and/or has the legal right
to transfer the Property to Purchaser.
d. There is no existing or potential litigation against the Seller
which has been instituted by third parties.
e. All assets pursuant to this Agreement are free from any
encumbrances and liens.
IV. REPRESENTATIONS OF PURCHASER
Purchaser represents and warrants that:
(2)
a. It is a publicly held corporation in good standing, incorporated
in the State of Nevada, United States of America.
b. It is authorized to enter into this Agreement by resolution of
its board of directors.
V. INDEMNIFICATION
The Seller shall indemnify, hold harmless and defend the Purchaser
against any debts or obligations of Seller not specifically assumed by Purchaser
by virtue of this Agreement, which results from or arises out of business
operations of the Seller and which accrued prior to the date of this Agreement.
Specifically, the Seller is responsible for, and shall indemnify, hold harmless
and defend the Purchaser for any and all matters relating to Seller's
transactions.
The Purchaser shall be granted the full power and authority to take any
and all action with respect to such proceedings as are initiated in regard to
such debts and obligations, including not limited to the right to settle,
compromise and dispose of such matters as it deems proper. The Seller shall
indemnify, hold harmless and defend Purchaser against any and all loss,
liability and expense, including attorney's fees and costs, arising out of
obligations, liabilities and claims of Purchaser incurred by Seller after the
date of closing in violation of the Agreement.
VI EXPENSES
The Purchaser and Seller agree to bear their own legal and accounting
expenses, taxes and other costs in connection with the preparation and
consummation of this Agreement.
VII SURVIVAL OF WARRANTIES
The warranties, representations and agreements set forth herein shall
continue in full force and effect and shall survive the closing hereunder.
VIII ASSIGNMENT
This Agreement may not be assigned by either party until the entire
purchase amount is paid, without prior written consent of the other party, with
consent shall not be unreasonably withheld.
IX ATTORNEY'S FEES
In the even it is necessary for any one of the parties hereto to bring
any action to enforce any of the terms and covenants of this Agreement, it is
agreed that the prevailing party shall be entitled to recover its reasonable
attorney's fees and court costs.
X. GOVERNING LAW
(3)
This Agreement shall be governed and construed in accordance with the
laws of the State of Nevada.
XI NOTICES
Any notice to be given hereunder shall be given in writing and
delivered personally or by regular mail, as follows:
a. If to Seller, addressed to: 000 Xxxxxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0
b. If to Purchaser, addressed to: 000 Xxxxxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0
XII ENTIRE AGREEMENT
This Agreement contains the entire agreement between the parties with
respect to the transactions contemplated herein.
XIII BINDING AGREEMENT
This Agreement shall inure to the benefit of and be binding upon Seller
and Purchaser and their respective heirs, executors, administrators, successors
and assigns.
XIV COUNTERPARTS AND POWER OF ATTORNEYS
This Agreement may be executed in more than one counterpart each of
which shall be deemed an original, but all of which together shall constitute
one and the same agreement. This Agreement may be signed on behalf of the
binding parties by any legal Power of Attorney representing any one of the
parties. Any Power of Attorney in effect under this Agreement shall be attached
to this Agreement.
DATED on this 15th Day of September, 2000.
SELLER DIGITAL SERVANT CANADA CORPORATION
/s/ Xxxxxx Xxxxxx
-----------------------------------------
by Xxxxxx Xxxxxx, Vice-President
PURCHASER DIGITAL SERVANT CORPORATION
/s/ Xxxxx Xxxxxxxx
-------------------------------------------
by Xxxxx Xxxxxxxx, President
(4)
