Domain Lease Agreement
Domain
Lease
Agreement
Re:
▇▇▇.▇▇▇▇▇▇.▇▇▇ ▇▇▇.▇▇▇▇▇▇▇▇▇.▇▇▇ ▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇ ▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇
▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
This
agreement
dated
for reference May 1, 2005 is between Domain
Holdings Inc. (Lessor),
an
Alberta corporation with a business office at ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇; and
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ Inc. (Lessee),
a
Nevada corporation with a business office at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇,
▇▇▇ ▇▇▇▇▇.
Whereas
Lessor
owns Domain Names and has agreed to lease the right to sell Travel Products
on
the Domain Names to Lessee, in
consideration
of $1
and the following mutual promises, the parties agree that:
| 1. |
Definitions.
In
this agreement,
|
| a. |
“Domain
Names” means
▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ .
|
| b. |
“Effective
Date” means the day on which the parties have signed this
agreement.
|
| c. |
“Travel
Products” includes the travel related products that Lessee chooses to
advertise, market and sell through the Domain Names including but
not
limited to banners, text links, hotel bookings, flight bookings,
tour
bookings and travel insurance.
|
| d. |
“Net
Revenues” means the amount of gross revenues that Lessee generates from
all sources, including but not limited to the Domain Names, after
deducting:
|
| i. |
credits
for returns and normal trade discounts,
|
| ii. |
any
tax, except income tax, that Lessee is required to pay on the sale
of
Travel Products or to withhold from payments to
Lessor.
|
If
Lessee
chooses to use third parties to handle Travel Products other than Pay Per
Click
or Banner Advertising, Net Revenues are equal to gross revenue paid by the
consumer to the third party handling the sale and Lessor’s Royalty is a function
of the gross booking.
| e. |
“Annual
Royalty” means Percentage of annual Net Revenues of the Lessee, subject to
the terms set out in paragraph 5.
|
| f. |
“$”
means United States dollars unless otherwise
indicated.
|
| g. |
References
to time and business days, whether specific or general, are references
to
the time and business days in Vancouver, British Columbia,
CANADA.
|
| 2. |
Lease
of Right to Sell Travel Products at Domain Names.
Lessor will lease the right to sell Travel Products, at the Domain
Names,
to the Lessee on the terms set out in this agreement. The Lessee
acknowledges that travel products represent only one avenue of development
for the Domain Names and that any and all other avenues of development,
including but not limited to news, dating, music, classifieds etc.,
remain
the property of the Lessor. The Lessee further acknowledges that
the
development of additional business activities at the Domain Names
will
benefit the offering of Travel Products at the Domain Names. The
Lessor’s
right to develop additional business activities at the Domain Names
shall
not be impeded by the Lessee.
|
The
Lessor acknowledges that some additional business activities, including but
not
limited to, pornography for example, will be destructive to the Lessee’s travel
business activities. The Lessor agrees not to engage knowingly and willingly
in
additional business activities that damage or marginalize the Lessee’s travel
business activities. Notwithstanding the above, the Lessor’s right to develop
additional business activities at the Domain Names shall not be impeded by
the
Lessee.
EX
- 1 - 10.1
| 3. |
Development
of Domain Names.
Lessee must immediately begin to develop the Domain Names so that
it can
sell Travel Products as soon as practically possible. Lessee acknowledges
that this is a material term of this agreement and Lessee’s failure to
develop the Domain Names and sell Travel Products constitutes a default
under paragraph 15. Lessee is responsible for all costs of development
of
Travel Products on the Domain Names and will work with Lessor to
ensure
the Travel Products fit in to the overall look and feel the Lessor
chooses
at these Domain Names.
|
All
right, title and interest to any trademarks related to the Domain Names and
all
logos, copyrights and other marks associated with the Domain Names will remain
the property of the Lessor.
| 4. |
Term.
This agreement will stay in effect until December 31, 2010, unless
terminated by either party according to Paragraph
13.
|
| 5. |
Annual
Royalty.
|
| a. |
The
annual Royalty paid to Lessor will be based on the Net Revenues generated
during the calendar year by the Lessee as
follows:
|
5%:
On
portion up to $20 Million, &;
4%:
On
portion between $20 Million & $40 Million, &;
3%:
On
the portion between $40 Million & $60 Million, &;
2%:
On
the portion between $60 Million & $80 Million; &;
1%:
On
the portion over and above $80 Million.
| b. |
Lessee
will pay the Royalty in monthly instalments on the 30th day of the
month
following the month in which Lessee receives Net
Revenues.
|
| c. |
Lessee
will deliver with the Royalty payment a statement that sets out the
total
Net Revenues received, a list of items deducted to determine the
Net
Revenues, and the calculation of the
Royalty.
|
| d. |
If
Lessor objects to any Royalty statement, then Lessor must give Lessee
written notice within three months of the date of the Year-End Royalty
statement, otherwise the Royalty statement is deemed to be conclusive
and
binding on the Lessor. Lessor cannot make any claim against the statement
unless it makes the claim within the three month period following
the date
of the Year-End Royalty statement.
|
| e. |
Beginning
in the calendar year of
2006
the annual Royalty will be a minimum of $150,000. In the case that
the
minimum is not reached through the aggregate of monthly payments,
Lessee
will make up the difference by payment to Lessor on the 30th
of
January of the year following the annual Royalty in question.
|
| f. |
If
Lessee fails to make a Royalty payment within 30 days of the date
on which
it is due then Lessee is in default of this
agreement.
|
|
6.
|
Option
to Renew. The
Lessee will have the option to renew this agreement for an additional
period of 5 years, commencing January 1, 2011 and ending December
31,
2015, and in 5 year increments thereafter, with the following stipulation:
|
The
minimum Royalty payment referenced in 5 (d) will be adjusted to the average
of
annual Royalty payments generated in the previous 5 year term.
|
7.
|
Examination
of records.
Lessee will keep accurate books and records concerning all transactions
relating to this agreement for two years from the date on which
Lessor
receives the Royalty statements. Lessee will permit Lessor or Lessor’s
representative to examine them at Lessee’s business premises during
Lessee’s normal business hours if Lessor has given Lessee four days’
written notice that Lessor wants to examine
them.
|
EX
- 2 - 10.1
|
8.
|
Independent
audit.
If
Lessor discovers an error when it examines Lessee’s records as permitted
by paragraph 6, then Lessor may have the books and records audited
by
independent accountants qualified to perform audits and approved
by
Lessee. If the audit uncovers an underpayment of a Royalty and
restates
the amount of the Royalty, the Lessee immediately will pay the
amount of
the underpayment to Lessor. Lessor will pay the cost of the audit
unless
the underpayment equals or exceeds 5% of the restated Royalty,
in which
case Lessee will pay the cost of the audit. The decision of the
independent auditor is binding on the
parties.
|
9. Non-disclosure
and use of confidential information.
a. Lessor
will not disclose to others, personally use for its own benefit or the benefit
of third parties ,or otherwise appropriate or copy any of Lessee’s confidential
information except as required in connection with Lessor’s performance of its
obligations under this agreement unless Lessor can prove that it acquired
the
information either before its creation, development or disclosure by Lessee,
or
by other than unauthorised disclosure.
b. Confidential
information is any proprietary or confidential information that Lessor learns
from Lessee or from Lessor’s performance under this agreement about Lessee’s
business, including trade secrets; products, processes and services; business
plans, product development plans, marketing plans or internal business
procedures; confidential and proprietary information of Lessee’s customers; test
procedures and results; computer codes and hardware system information; customer
information and lists; accounting, marketing and merchandising reports and
other
information generated by Lessee’s operation of the Domain Names; Lessee’s
patents, trademarks or other intellectual property rights; and business methods
used or developed by or for Lessee.
▇. ▇▇▇▇▇▇
acknowledges that the confidential information is the exclusive property
of
Lessee, its customers, or third parties that have disclosed information to
Lessee in confidence.
▇. ▇▇▇▇▇▇
acknowledges that damages at law are an insufficient remedy if Lessor violates
the terms of this paragraph and that Lessee may apply for injunctive relief
in
any court of competent jurisdiction to restrain the breach or threatened
breach
of Lessor’s promises in this paragraph.
▇. ▇▇▇▇▇▇’▇
promises in this paragraph are an essential element of this agreement and
survive the termination of this agreement.
| 10. |
Good
faith.
The parties acknowledge that circumstances outside of their control
or
knowledge can affect their performance of this agreement. Each will
work
with the other in good faith to resolve any problems that arise in
these
circumstances.
|
| 11. |
Representations
and warranties.
|
| a. |
Lessor
represents and warrants that:
|
| i. |
It
is in good standing in Alberta and where it operates and has the
power to
make this agreement.
|
| ii. |
It
is authorised to make and perform this
agreement.
|
| iii. |
It
has not granted to any third party rights that could restrict or
in any
way limit the Lessee’s lawful use of the Domain
Names.
|
| iv. |
To
the best of its knowledge, it owns the rights that it has granted
to
Lessee under this agreement.
|
| v. |
It
owns the Domain Names free of any claim or potential claim by any
third
party.
|
| vi. |
The
Domain Names are validly registered in Lessor’s
name.
|
| b. |
Lessee
represents and warrants that:
|
| i. |
It
is in good standing in Nevada and where it operates and has the power
to
make this agreement.
|
| ii. |
It
is authorised to make and perform this
agreement.
|
| c. |
The
parties’ representations and warranties survive the Effective
Date.
|
EX
- 3 - 10.1
12. Indemnity.
a. Each
party indemnifies the other party and the other party’s directors, officers,
employees and agents from all claims, demands, losses, liabilities, and expenses
(including reasonable legal fees) arising out of the party’s breach of this
agreement.
b. Lessee
indemnifies and will defend Lessor, its directors, officers, employees and
agents and hold each of them harmless from all claims, demands, damages,
losses,
liabilities, suits and expenses, including reasonable legal fees arising
out of
or in connection with Lessee’s use of the Domain Names.
13. Default.
a. Lessee
is
in default if it does not make a payment or perform any other material
obligation that is required by this agreement and Lessor notifies Lessee
in
writing that it is in default. If Lessee has not cured the default by the
end of
thirty days from Lessee’s receipt of Lessor’s written notice, then Lessor may
terminate this agreement and all obligations hereunder.
▇. ▇▇▇▇▇▇
is
in default if it does not perform any material obligation that is required
by
this agreement and Lessee notifies Lessor in writing that it is in default,
and
Lessor has not cured the default by the end of thirty days from Lessor’s receipt
of Lessee’s written notice.
14. Termination.
a. Lessor
may terminate this agreement, without prejudice to any rights that it has
under
this agreement or otherwise, on written notice to Lessee if:
| i. |
Lessee
files for bankruptcy, a receiver or trustee of any of Lessee’s property is
appointed and the appointment is not vacated within sixty days of
the
appointment, or any order is made or resolution passed for the winding
up
of Lessee for any purpose other than the bona fide reconstruction
or
amalgamation of Lessee, and the order or resolution is not rescinded
within sixty days of the date of the order or resolution;
or
|
| ii. |
Lessee
breaches any of its representations and warranties or is in default
under
paragraph 12.
|
b. Termination
of this agreement under this paragraph by Lessor does not free Lessee from
it’s
Royalty payment or reporting requirements outlined in this
agreement.
c. Lessee
may terminate this agreement, without prejudice to any rights that it has
under
this agreement or otherwise, on written notice to Lessor if Lessor breaches
any
of its representations and warranties or is in default under paragraph
12.
15. Right
of First Refusal
In
the
event the Lessor undertakes to sell the Domain Names it will offer the Lessee
the right of first refusal to purchase the Domain Names at the same terms
as
those offered to any 3rd
party.
This right of first refusal will be valid for a period of 15 days following
the
Lessor’s written notification to the Lessee that it intends to sell the Domain
Names.
EX
- 4 - 10.1
| 16. |
General
provisions.
|
| a. |
Time
is of the essence of this agreement.
|
| b. |
If
either party must perform under this agreement on a day that is not
a
business day in Vancouver, British Columbia, then the party must
perform
on the next business day in Vancouver.
|
| c. |
Any
notice that must be given under this agreement must be in writing
and
delivered by hand to the address given for the party on page 1 or
transmitted by fax or email to the fax number or email address that
the
parties have given to each other. Notice is deemed to have been received
when it is delivered if it is delivered during normal business hours
and
on the next business day if it is delivered outside of normal business
hours.
|
| d. |
This
agreement is the entire agreement between the parties and its terms
may be
waived or amended only in writing.
|
| e. |
This
agreement does not create a partnership or joint venture or any other
kind
of business association between the parties and neither party has
the
power to bind the other in any way.
|
| f. |
Lessee
may not assign its interest in this agreement without Lessor’s written
consent.
|
| g. |
This
agreement is binding on the parties and upon their respective successors,
assigns and any purchasers of any or all of the Domain
Names.
|
| h. |
This
agreement must be construed in accordance with the laws of British
Columbia and litigated in the courts of British
Columbia.
|
| i. |
No
finding by a court of competent jurisdiction that any provision of
this
agreement is invalid, illegal, or otherwise unenforceable operates
to
impair or affect the remaining provisions which remain effective
and
enforceable.
|
| j. |
This
agreement may be signed in counterparts and delivered to the parties
by
fax.
|
The
parties’ signatures
below
are evidence of their agreement.
DOMAIN
HOLDINGS INC.
/s/
▇▇▇▇▇ ▇▇▇▇▇
___________________________________
Authorised
signatory: ▇▇▇▇▇ ▇▇▇▇▇, President
Date:
May
1, 2005
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
INC.
/s/
▇▇▇▇▇▇ Heal
____________________________________
Authorised
signatory: ▇▇▇▇▇▇ Heal, President
Date:
May
______, 2005
EX
- 5 - 10.1