PURCHASE AGREEMENT
THIS AGREEMENT made as of August 13, 1999,
BETWEEN: Xxxxxx Xxxxx Xxxxxxxxx (also d.b.a. The Internet Connection) with an office
at 0000 Xxxxxxx Xx. Xxxxxxxxx, Xxxxxxx Xxxxxxxx, XXXXXX, X0X 4Y4("Macdonald")
AND- Xxxxxxxxxxxx.xxx, Inc., a Washington State corporation with address 0000 -
000xx Xxxxxx X.X., Xxxxxxx, XX 00000, X.X.X. (the "Company")
WHEREAS:
X. Xxxxxxxxx is the owner of the registration (the "Registrations") for the domain
names the "xxxxxxxxxxxx.xxx" and "xxxx-xxxxxxxx.xxx" (the "Domain Names") registered with
Network Solutions, Inc. ("Internic") in the name of "The Internet Connection" as registrant.
B. Filmindustry wishes to acquire from Macdonald the Registrations and Macdonald
wishes to sell and transfer to the Company the Registrations subject to the terms and conditions
as set out herein.
NOW THEREFORE, in consideration of the premises, covenants, payments and assignments
contained herein, and other good and valuable consideration the receipt and sufficiency of which
is hereby acknowledged, the parties agree as follows:
1. TRANSFER OF REGISTRATIONS
1.1 Registrations - Macdonald hereby transfers to the Company subject to the terms
and conditions contained in this agreement, and the Company hereby purchases and accepts from
Macdonald subject to such terms and conditions, Xxxxxxxxx'x interest in the Registrations.
1.2 Transfer Agreements - Concurrent with the execution of this agreement,
Macdonald will execute and deliver to the Company Registrant Name Change Agreements in
respect of the Registrations in the forms attached hereto as Schedule A (the "Change
Agreements"). Macdonald will cooperate and assist with the reasonable requests of the
Company or Internic to complete the transfer of the Registrations to the Company.
1.3 Representations & Warranties - Macdonald hereby represents and warrants to
the Company, as of the date of this agreement, as follows:
(a) Macdonald at times carries on business under the name "The Internet Connection"
and confirms that Macdonald is the legal entity behind that business name;
(b) The Internet Connection is the registrant of the Domain Names as recorded on the
WHOIS database; and
(c) all amounts due and owing to Internic in respect of the Registrations have been
paid.
2. ESCROW
2.1 Escrow Documents - The Company has delivered or will deliver to Xxxxxx
Xxxxx (the "Escrow Holder") the following documents which shall be held by the Escrow
Holder in escrow subject to the terms and conditions of this section 2:
(a) fully executed and notarized Registrant Name Change Agreements in respect of
the Registrations (the "Escrow Change Agreements") transferring registrations
of the domain names "xxxxxxxxxxxx.xxx" and "xxxx-xxxxxxxx.xxx" from the
Company to Macdonald in the forms attached as Schedule B to this agreement.
(b) signed Assignment in the form attached as Schedule C to this agreement (the
"Escrow Assignment") transferring ownership of all registered and unregistered
trade-marks for the Domain Names or for words, symbols or combination thereof
containing, or confusingly similar to, the Domain Names (collectively, the
"Marks") together with all goodwill attaching to the Marks, from the Company to
Macdonald in the form attached as Schedule C to this agreement.
(together the "Escrow Documents").
2.2 Triggering Event - The Escrow Holder shall hold the Escrow Documents in
escrow and, subject to section 3.5(a), shall not release them except as follows:
(a) If Macdonald delivers to the Escrow Holder a statutory declaration sworn by him
stating that the Company has: (i) become insolvent; or (ii) had appointed a
receiver or a trustee in bankruptcy; or (iii) ceased to use the Domain Names in its
business for a period of 30 consecutive days (each a "Triggering Event"), then
upon receipt of the statutory declaration the Escrow Holder shall forthwith deliver
to Macdonald the Escrow Documents and to the Company a notice in writing (the
"Escrow Notice") informing the Company that the Escrow Holder has delivered
to Macdonald the Escrow Documents.
(b) At any time after the anniversary date of this agreement, if a Triggering Event has
not occurred, or if a Triggering Event has occurred but Macdonald has not
submitted a statutory declaration to the Escrow Holder pursuant to section 2.2(a),
the Company may at its option choose to collapse the escrow upon making
payment to Macdonald in the amount of $10,000 (the "Option Fee"). Upon
receiving written confirmation from Macdonald of the Company having paid the
Option Fee, the Escrow Holder will deliver the Escrow Documents to the
Company. Upon collapse of the escrow pursuant to this section 2.2(b), the
Security Interest granted in section 3 of this agreement shall be of no further force
or effect.
2.3 Update - Upon request by Macdonald, the Company will sign and deliver to the
Escrow Holder replacements of the Escrow Documents from time to time as appropriate to
maintain current the Escrow Documents and otherwise to fully and effectively implement the
transfer of the Registrations for the Domain Names and the Marks to Macdonald on the
occurrence of a Triggering Event. The replacement Escrow Documents shall be held by the
Escrow Holder in escrow subject to the terms and conditions of this section 2.
2.4 Notice - Any notice or instrument required or permitted to be given pursuant to
this agreement, including notices pursuant to section 2.2, shall be deemed to have been well and
sufficiently given if delivered by courier or by fax to the address or fax number of the party to
whom it is given as set out on page one of this agreement, or to any other address or fax number
as the other party may from time to time give notice in writing, and any such notice shall be
deemed to have been given and received on the date of delivery. Any notice or instrument given
to the Escrow Holder shall be addressed to the attention of Key-Xxxx Xxxx at Xxxxxx Xxxxx
0000 Xxxxxxxxxx Xxxxxx 000 Xxxxxxx Xx. X.X. Xxx 00000 Xxxxxxxxx, X.X. Xxxxxx X0X 0X0,
Fax: (000) 000-0000.
2.5 Substitute Escrow Holder - If the Escrow Holder fails or refuses to act under this
agreement, Macdonald may appoint a substitute escrow holder provided that the escrow holder is
a lawyer or law firm in good standing in British Columbia or licensed to carry on a trust or
banking business in Canada or is otherwise agreeable to Macdonald.
2.6 Indemnity of Escrow Holder - The Company and Macdonald do hereby
respectively release, acquit and forever discharge the Escrow Holder from and against any and all
claims, demands, accountings and proceedings whatsoever in any manner relating to this
agreement for any action taken by the Escrow Holder as escrow holder of the Escrow Documents
under the terms of this agreement. The Company and Macdonald shall indemnify and save
harmless the Escrow Holder of and from all other claims, demands, damage, loss or expense
arising out of the performance of its duties hereunder.
2.7 Responsibility - The Escrow Holder in its capacity as Escrow Holder will be
deemed to have no notice or knowledge of the contents of the Escrow Documents delivered
under this agreement and shall have no responsibility in respect of loss of the Escrow Documents
except the duty to exercise reasonable care in the safekeeping of the Escrow Documents. The
Escrow Holder may act under or pursuant to this agreement on the advice of counsel but shall not
be responsible for acting or failing to act on the advice of counsel.
2.8 Consent - The Company will have no right to license, transfer, assign, pledge,
grant a security interest in or otherwise dispose of or encumber the Registrations for the Domain
Names or any of the Marks unless it has obtained the prior written consent of Macdonald, which
consent may be withheld with or without reason. Without limiting the generality of the
foregoing, Macdonald may impose as a condition of his consent hereunder a requirement that
new documents substantially in conformity with the Escrow Documents be executed and
deposited with the Escrow Holder by the transferee, and the Company hereby acknowledges that
such precondition for consent by Macdonald is in the circumstances commercially reasonable
and further that the limitations imposed on the Company's ownership and control of the
Registrations is acceptable to the Company.
3. SECURITY INTEREST
3.1 Grant of Security Interest - The Company, as continuing security for its
performance of the escrow obligations under this agreement, grants to Macdonald a security
interest (the "Security Interest") in the following:
(i) the Registrations for the Domain Name; and
(ii) all rights, titles and interests in the Marks, together with all of the goodwill
attaching to the Marks, and any licenses permitting use of the Marks (the
'Trade-xxxx Rights").
3.2 Obligations Secured - The Security Interest constitutes and will constitute
continuing security for the obligations of the Company to abide by the terms of the escrow
provisions under section 2 of this agreement and return the Registrations for the Domain Names
and ownership of the Trade-xxxx Rights to Macdonald in the event that a Triggering Event has
occurred (collectively the "Obligations").
3.3 Company's Covenants - The Company covenants with Macdonald as follows:
(a) the Company will pay all fees necessary in order to renew or maintain the
Registrations of the Domain Names and defend vigorously any challenge to the
validity of the Registrations;
(b) the Company will carry on and conduct its business in a proper and efficient
manner to protect and preserve the Trade-xxxx Rights, including maintaining
proper control over licensees such that the goodwill attaching to the Marks is not
depreciated or diluted; and
(c) the Company will pay all fees necessary in order to renew or maintain any
registrations for the Marks.
Notwithstanding section 3.3(b) above, the Company may but shall not be obligated to commence
legal proceedings against third party infringers of the Trade-marks. If the Company has failed to
commence legal proceedings against a third party infringer 15 days after Macdonald has given
the Company written notice of such infringement, Macdonald will be entitled to take steps to
pursue the infringer, including commencing legal proceedings against the infringer, and the
Company will cooperate and assist Macdonald in all such proceedings at its own expense.
3.4 Default - The Company shall be in default under this agreement upon the
occurrence of any of the following events (each an "Event of Default"):
(a) the Company fails to honour or perform any of the material terms set out in this
agreement;
(b) a circumstance arises whereby Macdonald is unable to obtain control of the
Domain Names or the Trade-xxxx Rights after the occurrence of a Triggering
Event;
(c) after a Triggering Event has occurred, the Company has either directly or
indirectly interfered with the transfer of the Registrations for the Domain Names
or transfer of the Trade-xxxx Rights, including without limitation, challenging the
validity or enforceability of any of the Escrow Documents; or
(d) the Company has purported to license, transfer, assign, pledge, grant a security
interest in or otherwise dispose of or encumber the Registrations for the Domain
Names or the Marks contrary to section 2.7 of this agreement.
3.5 Remedies on Default - Upon the occurrence of an Event of Default, all of the
Obligations shall become immediately due without notice to the Company, and Macdonald may,
at his option, proceed to exercise any or all of the rights and remedies contained herein or
otherwise afforded by law, in equity or otherwise. Without restricting the generality of the
foregoing, Macdonald may upon any Event of Default:
(a) immediately and without notice to the Company, deliver to the Escrow Holder a
statutory declaration that an Event of Default has occurred, then, upon such
receipt of the statutory declaration the Escrow Holder shall forthwith deliver to
Macdonald the Escrow Documents;
(b) take immediate steps to execute, register, record, perfect and otherwise give full
effect to the Escrow Documents, in Xxxxxxxxx'x sole and unfettered discretion,
which the Company hereby acknowledges is commercially reasonable;
(c) take all other steps as may in his sole and absolute discretion consider appropriate
to preserve his rights in the Registrations for the Domain Names and the
Trade-xxxx Rights.
3.6 Limitation of Liability - After a Triggering Event has occurred, Macdonald shall
not be liable by reason of taking possession of any of the Escrow Documents, to account for
anything or be liable for any loss on realization or any act or omission for which a secured party
in possession might be liable.
3.7 Cumulative Remedies and Statutory Waivers - The rights, remedies and
powers conferred by the escrow provisions (section 2) and the security provisions (section 3) of
this agreement, are in addition to, and shall be concurrent with and without prejudice to and not
in substitution for, any other rights, remedies or powers Macdonald may have under this
agreement, or any agreements made pursuant hereto, at law, equity, or under any statute.
Further, to the extent permitted by the law, the Company waives all of the rights, benefits, and
protection given by the provisions of any existing or future statute which imposes limitations on
the rights remedies or powers of Macdonald or upon the methods of realization of the Security
Interest.
3.8 Assurance upon realization of Security Interest - The Company shall execute,
acknowledge and deliver or cause to be executed, acknowledged or delivered all further
assignments, agreements and assurances as Macdonald may reasonably require to give effect to
this sections and for the better granting, transferring, assigning, assuring, confirming or
perfecting the security interests hereby created and the priority accorded to them by law or under
this agreement.
3.9 Notices and Financing Statements - The Company acknowledges that
Macdonald may file financing statements in respect of the Registrations for the Domain Names
or the Marks or any application or registration for the Marks or other notices as appropriate with
domain name registrars or databases and trade-xxxx offices as appropriate.
4. FURTHER COVENANTS OF THE COMPANY
41 Release by the Company - The Company hereby releases and discharges
Macdonald and the Escrow Holder from every claim of every nature which may arise or be
caused to the Company or any person claiming through or under the Company by reason or as a
result of anything done by Macdonald or the Escrow Holder, or any successor or assign claiming
through or under the Company under the provisions of this agreement.
42 Costs - The Company will reimburse Macdonald on demand for all interest,
commissions, costs of realization and other costs and expenses (including the full amount of all
legal fees and expenses paid by Macdonald) incurred by Macdonald in connection with the
registration of the Domain Names or any registration in connection with the Security Interest, the
preparation, execution, perfection, protection, enforcement of and advice with respect to this
agreement, the protection or enforcement of the rights, remedies and powers of Macdonald, and
the inspection of, and investigation of title to, the Security Interest.
4.3 Non-interference - Upon the occurrence of a Triggering Event or an Event of
Default, the Company shall at all times refrain from opposing, challenging or otherwise
interfering, either directly or indirectly, with the use, registration licensing or other disposition by
Macdonald of the Marks, the Registrations for Domain Names or any other word and/or designs
containing the element "xxxxxxxxxxxx.xxx" or "xxxx-xxxxxxxx.xxx".
44 Further Assurances - The Company shall execute all further documents and
instruments and do all further and other things as may be necessary or desirable to implement
and carry out the terms of this agreement, including without limitation, the correction and
transfer to Macdonald of the Registrations for the Domain Names or a confusingly similar
domain name, or the Marks.
4.5 Indemnity - The Company shall indemnify, protect and hold harmless
Macdonald from any loss, damage or costs suffered or incurred by Macdonald as a result of any
representation or warranty made herein being untrue in any respect or the failure by the Company
to carry out its covenants under this agreement.
5. GENERAL
5.1 Entire Agreement - This agreement and all agreements and assignments
referenced herein constitute the entire agreement between the parties with respect to transfer,
escrow and security in respect of the Registrations for the Domain Names and the Marks and
cancel and supersede all prior understandings and agreements, whether written or oral, between
the parties.
5.2 Enurement - This agreement shall enure to the benefit and be binding upon
Macdonald, and his heirs, executors and administrators and personal representatives, and the
Company and its successors and permitted assigns.
5.3 Governing Law - This agreement will be governed by and construed in
accordance with the laws of the Province of British Columbia and the laws of Canada applicable
therein. Each party hereby irrevocably attorns to the exclusive jurisdiction of the courts of the
Province of British Columbia in Vancouver.
5.4 Acknowledgement, Severability and Time - The Company hereby
acknowledges receiving a copy of this agreement, and that any provision of this agreement
prohibited by law or otherwise ineffective shall be ineffective only to the extent of that
prohibition or ineffectiveness and shall be severable without invalidating or otherwise affecting
the remaining provisions hereof. The Company further acknowledges that time shall in all
aspects be of the essence in this agreement and no exception or variation of this agreement or any
obligation under this agreement shall operate as a waiver of this provision.
5.5 Representation - The Company hereby acknowledges and agrees that
notwithstanding this Agreement and the obligations of the Escrow Holder hereunder, the Escrow
Holder may continue to act for Macdonald and/or Xxxxxxxxx Xxxxxx & Associates Ltd. ("MHA")
on any matter, including without limitation, any matter, dispute or proceeding between
Macdonald or MHA and the Company, provided that the Escrow Holder continues to comply
with this Agreement if at the relevant time it still holds the Escrow Documents.
IN WITNESS WHEREOF, the parties hereto have executed this agreement on the dates noted
below to be effective as of the date first above written.
"C Bradstock"
Signature of Witness "Xxxxxx Xxxxxxxxx"
Xxxxxx Xxxxx Xxxxxxxxx
XXXXXX XXXXXXXXX
Print Name of Witness
0000-0000 X. XXXXXXX XX. VAN.
Print Address of Witness
OCTOBER 1, 1999
Date Xxxxxxxxxxxx.xxx, Inc.
By: "Xxxxxx Xxxxxxxxx"
Signature of Authorized Signatory
XXXXXX XXXXXXXXX – PRESIDENT
Print Name and Title of Authorized Signatory
Escrow Provisions Acknowledge and Agreed to this 1st day of
October , 1999:
Xxxxxx Downs
By: "Key-Xxxx Xxxx"
