BETWEEN

TO THE DEFENDANT:

A LEGAL PROCEEDING HAS BEEN COMMENCED AGAINST YOU by the Plaintiff.
The claim made against you is set out in the following pages.

IF YOU WISH TO DEFEND THIS PROCEEDING, you or a solicitor acting for you are required to prepare a statement of defence in FORM 171B prescribed by the Federal Court Rules, 1998, serve it on the plaintiff's solicitor or, where the plaintiff does not have a solicitor, serve it on the plaintiff, and file it, with proof of service, at a local office of this Court. WITHIN 30 DAYS after this statement of claim is served on you, if you are served within Canada.

If you are served in the United States of America, the period for serving and filing your statement of defence is 40 days. If you are served outside Canada and the United States of America, the period of serving and filing your statement of defence is sixty days.

Copies of the Federal Court Rules, 1998, information concerning local offices of the Court and other necessary information may be obtained on request to the Administrator of the Court at Ottawa (telephone 613-992-4238) or at any local office.

IF YOU FAIL TO DEFEND THIS PROCEEDING, judgement may be given against you in your absence and without further notice to you.

Date: June 24, 1999

Claim

1. The Plaintiff claims:

(a) a declaration that the Plaintiff is the owner of the trade-marks TORONTO.COM and TORONTO.COM ALL YOU NEED TO KNOW ABOUT T.O. & Design (the "trade-marks");
(b) a declaration that copyright subsists in the web site pages published by the Plaintiff and affiliated companies at www.toronto.com and that the Plaintiff is, and at all material times was, the owner of the copyright in such works;
(c) a declaration that the Defendants have passed off their wares, services, and business as the wares, services, and business of the Plaintiff contrary to Section 7 of the Trade-Marks Act;
(d) a declaration that the Defendants have infringed the Plaintiff's copyright in its www.toronto.com web site pages;
(e) an interlocutory and permanent injunction to restrain the Defendants by themselves, their servants, agents, work persons, representatives or those in privity with them from:
(i) using, displaying, advertising or authorizing others to use or display the trade-mark TORONTO2.COM and any other similar words, names, domain names or marks in a manner which is likely to cause confusion with the Plaintiff's Trade-marks;
(ii) doing any other act likely to have the effect of depreciating the goodwill attaching to the Plaintiff's Trademarks.
(iii) passing off its wares, services, or business as and for the wares, services, or business of the Plaintiff or otherwise directing public attention to its wares, services, or business in such a way as to cause or be likely to cause confusion between its wares, services, or business and the wares, services, or business of the Plaintiff;
(iv) copying, publishing, framing, linking, or otherwise infringing the Plaintiff's copyright in its www.toronto.com web site pages;
(f) an accounting of the Defendant's profits;
(g) damages for $500,000 for passing off and copyright infringement;
(h) exemplary and punitive damages;
(i) delivery up to the Plaintiff of all drawings, sketches, artwork, proofs, stationary, advertising material, wares, and other materials or things in the Defendants power, custody, or possession exhibiting the words TORONTO2.COM, or confusingly similar words, names or marks, or in the alternative, an Order that all such materials in the power, custody, or possession of the defendants, or under their control, be destroyed under oath or under the supervision of this Honourable Court;
(j) the costs of the Plaintiff in the action, including GST;
(k) pre-judgement and post-judgement interest; and
(l) such further and other relief as to this Honourable Court seems just.

3. The Plaintiff is engaged in the business of providing internet wares and services, including internet city guides and directories. At present, its primary business is the operation of three web sites-toronto.com, mississauga.com and yorkregion.com-all of which display city guides and directories.

4. The Defendants, Ritchie Sinclair and Garth Cole (the "Defendants") carry on business as Friendship Enterprises and have an office and place of business at 30 Hillsboro Avenue, Suite 1604, Toronto Ontario M5R 1S7. The Defendants are engaged in the business of providing internet wares and services, including an online guide and directory for the city of Toronto.

The Plaintiff's Rights

5. Since as early as December 31, 1997, the Plaintiff has carried on business under the trade name TORONTO.COM.

6. On December 4, 1997, the Plaintiff purchased all right, title and interest in the domain name TORONTO.COM. In April 1998, a registration for the domain name TORONTO.COM in the name of the Plaintiff was recorded with Network Solutions Inc.. Network Solutions, Inc. is an organization that allocates electronic addresses on the internet in the form of a Universal Resource Locator (URL).

7. Since at least as early as March 30, 1998, the Plaintiff has made known, used, displayed and advertised the Trade-marks TORONTO.COM and TORONTO.COM ALL YOU NEED TO KNOW ABOUT T.O. & Design in Canada association with an internet guide and directory (the "Wares") and internet services, namely web site design services, online advertising medium and new media consulting services; online publishing and dissemination of an internet city guide and directory (the "Services").

8. Since at least as early as March 30, 1998, the Plaintiff has operated a web site at www.toronto.com. At that web site, the Plaintiff displays and advertises a guide and directory for the city of Toronto which includes, among other things, information about local activities and services.

9. The Plaintiff extensively advertises its web site in association with its Trade-marks on newspaper boxes, and in printed newspapers, online newspapers, outdoor advertising, Yellow Pages ^TM directories and advertisements placed on Toronto Transit Commission premises, trains and buses.

10. The Plaintiff's web site at www. toronto.com has been, and continues to be, visited by many members of the public. Since March, 1998, this web site has had, on average, 96,000 page views per day.

11. By reason of this continued use, making known, and advertising of its Trade-marks and domain name, the Plaintiff has acquired a valuable reputation and goodwill in association with its Trade-marks in Canada.

12. Copyright subsists in the web site pages at www.toronto.com. That copyright is owned by the Plaintiff pursuant to the provisions of the Copyright Act, R. S. C. 1985 c. C-42, as amended. The web site pages are original literary and artistic works that were first published in Canada. The authors of the web site pages are employees and independent contractors of the Plaintiff. Web site pages created by the Plaintiff's employees were created by them in the normal course of their employment by the Plaintiff. The independent contractors have assigned to the Plaintiff all their copyrights and other rights, title and interest to the web pages they created.

13. The Plaintiff therefore has, inter alia, the exclusive right to reproduce the web site pages in any material form, and to authorize any such reproduction.

14. The Plaintiff has at all material times given public notice of its claim to copyright in these web pages. It has, at all material times, displayed a copyright notice at the bottom of its home page for the web site at www.toronto.com. The current notice states:

^Copyright 1997, 1998, 1999 toronto.com. All rights reserved. The textual, graphic, audio and audiovisual material in this site is protected by Canadian copyright law and international treaties. You may not copy, distribute, or use these materials except as necessary for your personal, non-commercial use. Any trademarks are the property of their respective owners.

Defendant's Passing Off

15. The Defendants registered the domain name "toronto2.com" with Network Solutions, Inc. on or about February 28, 1999.

16. In may, 1999, the Plaintiff became aware that the Defendants were proposing to operate and publicize a web site with the domain name www.toronto2.com. At that web site they were proposing to display, advertise, and offer a guide and directory for the city of Toronto in association with the mark TORONTO2.COM.

17. The wares and services displayed and offered by the Defendants at their website are identical to the Plaintiff's wares and services. In particular, the Defendants have offered and continue to offer an internet guide and directory for Toronto in association with TORONTO2.COM and/or other marks likely to be confused with TORONTO.COM. The Defendants have displayed and advertised the mark TORONTO2.COM and/or other confusingly similar marks on their web site www.toronto2.com.

18. From dates best known to the Defendants, but in any event since about May 3, 1999, the Defendants without license, permission, or consent of the Plaintiff, have passed off their wares, services and business by directing public attention to the wares, services, and business in such a way as to cause confusion or likely to cause confusion in Canada between their wares, services and business and the wares, services and business of the Plaintiff contrary to Section 7 of the Trade-marks Act, by using the mark TORONTO2.COM. The Defendants' use of the mark TORONTO2.COM has been and continues to be likely to lead to the mistaken belief or impression that the Defendants' wares, services and business are those of, or connected with or licensed, the Plaintiff. Such use and advertisement between the wares, services and business of the Defendants and those of the Plaintiff.

19. At all material times, the Defendants were aware of the Plaintiff's use in Canada of the mark TORONTO.COM, and the goodwill acquired by the Plaintiff in its mark. The Defendants have intentionally adopted the mark TORONTO2.COM in order to pass off their wares, services and business as those of the Plaintiff and to unlawfully profit from the goodwill acquired by the Plaintiff in association with its mark.

20. Further particulars of the dates and places of additional acts of passing off are known to the Defendants and are not known to the Plaintiff. The Plaintiff is not aware of the other ways in which the Defendants have used and advertised the mark TORONTO2.COM and other confusing marks or names, but the Defendants are aware of all such ways. The Plaintiff claims relief for all such passing off.

Defendant's Copyright Infringement

21. The Defendants have reproduced and authorized the reproduction of portions of the Plaintiff's web site at their own web site at www.toronto2.com and therefore have reproduced the Plaintiff's copyrighted work without the Plaintiff's prior knowledge, consent or permission.

22. The Defendants copied, "framed" and "linked" several web pages published by the Plaintiff and displayed them on their own web site at www.toronto2.com.

23. By reason of the Defendant's foregoing activities, the Plaintiff has suffered damage and the Defendants have made an unlawful profit. The Defendants have been unjustly enriched by virtue of their unlawful activities.

24. By letter dated May 31, 1999, the Plaintiff requested that the Defendants cease their passing off and infringing activities. To date, the Defendants have failed to comply with this request.

Irreparable Harm

25. Unless the Defendants are restrained by this Court, the Defendants will continue to pass off their wares, services and business as those of the Plaintiff and infringe the Plaintiff's copyright, thereby causing further serious and irreparable harm to the Plaintiff.

The Plaintiff proposes that this action be tried at Toronto.

June 23 1999