Exhibit 10.1

PROJECT DESIGN AND ADMINISTRATION AGREEMENT

This PROJECT DESIGN AND ADMINISTRATION AGREEMENT (“Agreement”) is entered into
as of the 3rd day of December, 2012 (“the Effective Date”) between Privileged
World Travel Club, Inc., a Delaware corporation, (“Privileged”), having offices
at 1 Blackfield Drive, Tiburon, California 94920, and MagNet Solutions Inc., a
California corporation (“MagNet”), having offices at 4132-A  Del Rey Ave.,
Marina Del Rey, CA 90292 .  Privileged and MagNet may each be referred to herein
as a “Party” and collectively as the “Parties.”

RECITALS

A.

Privileged is a leader in international travel solutions, including the
Privileged Travel Club.

B.

MagNet is a pioneer in the "direct to consumer" market for major global brands.

C.

Privileged and MagNet have entered into a non-binding Term Sheet relating to (a)
three initial projects relating to Privileged’s business of providing travel
services, including responsibilities with respect to these projects, (b) the
services to be provided by each of MagNet and Privileged, and (c) funding of the
projects.

D.

The Parties desire to enter into a definitive agreement relating to the
projects, the services to be provided, and the funding of the projects.

AGREEMENT

In consideration of the mutual promises herein set forth and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties hereto, intending to be legally bound hereby, agree as
follows:

1.  Projects.

1.1

The Parties agree to undertake three initial projects (collectively, the
“Projects”), which shall be as follows:

1.1.1

Project No. 1: Update and revise Privileged’s existing website or develop a new
website (the “Domestic Website”) for use in Privileged and MagNet working
together to generate online sign-ups for Privileged Travel Club, and to enable
Privileged to communicate with Club Members (for offerings, information, etc.).

1.1.2

Project No. 2:  Develop a website (the “International Website”) for use in
selling US tours to Chinese travelers in China. The Parties intend that these
will be a set of tours to a preselected set of US cities. It is anticipated by
the Parties that these travelers will have the option of choosing their hotel
and other amenities in their destination cities.  Finally, the Parties
anticipate that the flights shall be arranged by Privilege.

1.1.3

Project No. 3: Using the International Website, create a system for Chinese tour
travelers to travel from their homes to Beijing or Shanghai, for further travel
to the US, and to provide hotels and travel options to Chinese travelers by
connecting to China global distribution systems (“GDS”).

1.2

Tasks for Each Project

1.2.1

Project No 1 Tasks:

1.2.1.1

MagNet shall either integrate MagNet’s marketing tools into Privileged’s
existing website, or work with Privileged to develop a new website (in either
case, the “Domestic Website”) for use by Privileged in booking domestic travel,
offering Privileged Travel Club services, communicating with Privileged Travel
Club Members, and such other uses as determined by Privileged and communicated
to MagNet.

1.2.2

Project No. 2 Tasks:

1.2.2.1

MagNet shall create the International Website (initially in the Chinese
language) that describes the tours in Project No. 2.

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1.2.2.2

MagNet shall connect the International Website front end to a booking link to
Privileged Tours, which such link shall be arranged for by Privileged.

1.2.2.3

MagNet shall program or develop the International Website to enable it to assign
a unique Customer ID to each travel customer.

1.2.2.4

Privileged shall be responsible to enter into an arrangement with a global
distribution system for booking of these tours, as well as make any other
arrangements required in order to offer any travel related services offered by
Project No.1 to travel customers.      

1.2.3

Project No. 3 Tasks

1.2.3.1

MagNet shall program the International Website (initially in the Chinese
language) to enable Chinese travelers to book their Chinese travel portions
through China GDS systems.

1.2.2.2

MagNet shall program the International Website to enable the system to use same
Customer ID for Chinese segments of travel.

1.2.2.3

Privileged shall be responsible to contract with a global distribution system
for booking of these tours, as well as make any other arrangements required in
order to offer any travel related services offered by Project No.2 to travel
customers.

1.3

Project Administration.  The Parties agree to work together, as otherwise set
forth in this Agreement, to design and build the systems needed to develop the
Projects and deliver these services to Privileged’s Members, potential members,
and target markets.

1.4

 MagNet’s Services / Phases.

1.4.1

MagNet’s services shall be performed in phases, as follows:

1.4.1.1

Creative Design:  MagNet shall develop initial wire frames for the International
Website and the Domestic Website, in cooperation with Privileged.  MagNet will
then proceed in accordance with the Specifications, referred to hereinafter as
the “Work Specifications Document,” which will be mutually developed, a form of
which is attached hereto as Appendix A.

1.4.1.2

Build Out:  MagNet will build out the site skeleton for the International
Website and the Domestic Website, populating them with content to be provided by
Privileged and jointly-developed design elements. The deliverables produced
during this stage will also be included in the Work Specifications Document.

1.4.1.3

Development:  MagNet will design and develop the underlying site applications
for the International Website and the Domestic Website, including all forms,
administrative tools, database, administrator portal, and the content management
system. The deliverables produced during this stage will also be included in the
Work Specifications Document.

1.4.1.4

Testing, Training, Launch:  MagNet will perform functional testing to ensure the
desired functionality and operation of the system, resolve any remaining issues
and coordinate the launch of the site with the team at the website hosting
company.  The additional deliverables produced during this stage will also be
included in the Work Spec Document.

1.4.1.5

Support: The Parties anticipate that ongoing support for the websites will be
addressed under a separate Support Services / Service Level Agreement which
shall include MagNet’s standard hosting, support and maintenance terms.  

1.5

Project Funding.

1.5.1

Work Performed.

1.5.1.1

The three Projects listed above, and the services to be provided by MagNet in
connection therewith as set forth in Section 1.4 above and as delineated on the
Work Specifications Documents, will be performed at MagNet's cost (against the
Deposits).

1.5.1.2

MagNet will act as the Project Manager and will reasonably coordinate with the
Privileged team to ensure that the final deliverables meet the market needs that
Privileged has identified.

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1.5.1.3

MagNet programmers and project administrators will be billed to the project at a
rate of $75 per hour.

1.5.1.4

MagNet will provide Privileged with an itemized report of hours and tasks every
two weeks during the work on the three Projects.

1.5.1.5

MagNet and Privileged agree to meet on a reasonable basis to ensure that the
overall scope of work on each of the three Projects is being refined to meet the
market needs during the buildout of the International Website and the Domestic
Website.

1.5.2

Initial Payment.

1.5.2.1

Privileged agrees to make an initial payment to MagNet, within ten (10) Trading
Days (as defined below) of the date on which the SEC declares the Privileged’s
Registration Statement effective, of $40,000 (the “Initial Deposit”).

1.5.2.2

MagNet will commence work on all three Projects, in the order of priority listed
above unless all three may be worked on simultaneously, and will bill against
this Initial Deposit, until MagNet has incurred costs of $30,000 of the Initial
Deposit.

1.5.2.3

Within three days of being notified by MagNet that it has spent $30,000 of the
Initial Deposit with respect to work on the Projects, Privileged will provide an
additional $20,000 (for an aggregate of $60,000), if needed (the “Additional
Deposit”), towards additional work in connection with the Projects (the Initial
Deposit and the Additional Deposit shall sometimes be referred to cumulatively
herein as the “Deposits”). If, after MagNet has incurred costs in the amount of
$60,000, additional Project development work is required, the Parties agree to
determine how much additional funding will be required.  The Parties acknowledge
that the costs of developing the Projects are not known to either Party at the
time of execution of this Agreement.

1.5.3

Subsequent Payments.

1.5.3.1

If additional development work is still needed after the Initial Deposit and the
Additional Deposit have been spent, MagNet and Privileged agree to work together
to agree on any final additions or changes needed to complete each of the three
Projects, and Privileged will advance the necessary funds needed to complete all
tasks required in connection with the Projects.

1.6.

Payment of MagNet's Expenses.   MagNet’s third party, out-of-pocket, incidental
expenses shall be reimbursable to MagNet with respect to a Project, in
accordance with the terms set forth in the Work Specifications Document.  The
Parties agree that any incidental expenses (independently or in the aggregate)
in excess of $2,500 must be approved in writing by Privileged.  The Parties
further agree that any expenses incurred in the normal course of MagNet’s
business shall not require prior written approval unless such expenses shall
exceed, in the aggregate, $10,000.  Moreover, the Parties agree to work together
with respect to any mutually determined expenses (including but not limited to
such items as necessary travel or communications costs).

1.7.

Changes in Project Scope.   In the event that changes to any of the requirements
set forth in any Work Specifications Document are specifically requested by
Priveleged, in writing, MagNet will create a project change request (“Project
Change Request”) which reflects the relevant change information, including
change description, impact assessment on the Work Specifications Document terms,
and any associated cost to implement the change (if applicable).  The Project
Change Request will be submitted by MagNet to Priveleged, within five (5)
business days of receipt by MagNet of such written request, for review and
written approval.  All such approved changes will be incorporated into the
applicable Work Specifications Document and implemented by MagNet as soon as
commercially practical.

1.8.

Delays.   MagNet shall use all reasonable efforts to complete each Project on
schedule (as per the terms of the applicable Work Specifications Document).
However, at its option, MagNet can extend the due date for any deliverable (as
per the terms of the applicable Work Specifications Document) by giving verbal
or written notice to Priveleged. The total of all such extensions shall not
exceed thirty (30) days, unless otherwise agreed in writing by Priveleged and
MagNet.  Any delay or nonperformance of any provision of this Agreement caused
by conditions beyond the reasonable control of the performing Party shall not
constitute a breach of this Agreement, provided that the delayed Party has taken
reasonable measures to notify the other Party of the delay in writing. The
delayed Party's time for performance shall be deemed to be extended for a period
equal to the duration of the conditions beyond its control.  Conditions beyond a
Party's reasonable control include, but are not limited to, natural disasters,
acts of government after the date of the Agreement, power failure, fire, flood,
acts of God, labor disputes, riots, acts of war and epidemics. Failure of
Subcontractors and inability to obtain materials shall not be considered a
condition beyond a Party's reasonable control.

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2.  Revenue Sharing

2.1

In addition to the technology development funding described above in Section
1.5, the Parties agree to share in the revenues generated from the International
Website and the Domestic Website once the three Projects are completed and
operational.

2.1.1

MagNet shall share in the gross revenues generated in connection with all goods
and services purchased by the end user of the Project websites (“Gross
Revenues”), pursuant to the formulas set forth below (“MagNet Share”).  The
Parties agree and acknowledge that all gross revenues from the International
Website and the Domestic Website (consisting of commissions on travel and all
other revenues received by Privileged) shall be calculated on a monthly basis.

2.1.1.1

For Gross Revenues generated by the Project websites with respect to the booking
of travel, during any month up to $100,000, MagNet shall receive one percent
(1%) of such proceeds, payable by the 15th day of the following month.

2.1.1.2

For Gross Revenues generated by the Project websites with respect to the booking
of travel, received by Privileged during any month between $100,001 and
$500,000, MagNet shall receive two percent (2%) of such proceeds, payable by the
15th day of the following month.

2.1.1.3

For Gross Revenues generated by the Project websites with respect to the booking
of travel, received by Privileged during any month of $500,001 or more, MagNet
shall receive three percent (3%) of such proceeds, payable by the 15th day of
the following month.

2.1.1.4

From Gross Revenues generated by the Project websites with respect to the sale
of any other travel related services by Privileged (the “Gross Travel Services
Revenues”), Privileged shall deduct all expenses related to such Gross Travel
Services Revenues  to arrive at the Net Travel Services Revenues.  MagNet shall
be entitled to receive ten percent (10%) of the Net Travel Services Revenues for
each month, payable by the 15th day of the following month.

2.2.

Late Payments; Cure Period; Late Fees.    Payments by Privileged not made when
required, or within a fifteen-day cure period, shall be subject to late penalty
fees of one half of one percent (0.5%) per month from the due date until the
amount is paid.

2.3.

Audit Rights.   MagNet shall have the right to audit the books and records of
Privileged relating to the collection of revenues in connection with the MagNet
Share.  MagNet shall not so audit Privileged more than once per year, nor more
than once per accounting statement.  MagNet agrees that any such audit shall be
at MagNet’s expense, and the timing of any such audit will be coordinated with
and agreed upon by Privileged, which agreement shall not be withheld
unreasonably.

3.

Ownership of Intellectual Property.

3.1

Ownership / Exclusivity

3.1.1

The Parties understand, acknowledge, and agree that all documents, materials,
information and/or any other property of MagNet, including, but not limited to,
any computer software code created and/or developed by MagNet pursuant to this
Agreement for the three Projects, and incorporated into, made part of, or to be
used in conjunction with, the International Website or the Domestic Website or
both (“MagNet’s Work Products”) shall remain MagNet’s sole and exclusive
property.

3.1.3

The Parties further understand, acknowledge, and agree that any and all
documents, materials and/or other property owned by Privileged which is
incorporated by MagNet (or Privileged) into the International Website or the
Domestic Website, or both (“Privileged Property”) shall remain the exclusive
property of Privileged at all times, and MagNet shall have no rights whatsoever
in any of the Privileged Property.

3.1.5

All right, title and interest in and to MagNet’s Work Products (including the
ownership thereof), and any related and applicable copyrights, trade secret
rights, patents or patent applications shall be the sole and exclusive property
of MagNet.  Except to the extent of the rights expressly granted herein to
Privileged and any of its sub-licensees, neither Privileged nor any of its
sub-licensees shall acquire any right, title or interest in or to MagNet’s Work
Products .  

3.1.6

During the Term of this Agreement, Priveleged shall not utilize, or enter into
any agreement with any third party regarding, any services and/or technology
which reasonably compete with the services and/or technology reasonably
contemplated to be provided by MagNet hereunder.

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4.

Software as a Service; Service Agreement

4.1. Definitions. This Section 4 outlines the software as a service (“SaaS”) to
be provided by MagNet pursuant to this Agreement.  For purposes of this Section
4, the following definitions shall apply:

4.1.1

Application means the software and other material, which may include open-source
software, used by MagNet to access, configure, and provide the Services.

4.1.2

Commercial Use means use of the Service that results in or is intended to
produce commercial advantage, monetary compensation, or private benefit. MagNet
may, at its sole discretion, classify any use of the Service as Commercial Use.

4.1.3

Customer Data means any data in electronic form collected through the Service
from Privileged’s customers, members, clients, or other third parties, or
collected or accessible directly from Privileged.

4.1.4

Documentation means instructions and examples pertaining to appropriate
integration with and proper use of the Services, as MagNet may specify.

4.1.5

Intellectual Property Rights means all intellectual property rights, including
patents, trademarks, trade name, service mark, copyright, trade secrets,
know-how, process, technology, development tool, ideas, concepts, design right,
domain names, moral right, database right, methodology, algorithm and invention,
and any other proprietary information (whether registered, unregistered, pending
or applied for).

4.1.6

Non-Commercial Use means use of the Service that is not intended to produce and
does not result in commercial advantage, monetary compensation, or private
benefit. MagNet may, at its sole discretion, classify any use of the Service as
Non-Commercial Use.

4.1.7

Service means software-as-a-service provided by MagNet, including but not
limited to the MagNet platform (to the extent the use thereof is necessary for
the functioning of the Services provided by MagNet hereunder) , and associated
Documentation.

4.2. Service.

4.2.1

MagNet Obligations. MagNet hereby agrees, subject to and during the term of this
Agreement: (i) to provide the Service to Privileged in accordance with the
Agreement; (ii) to grant or procure a right for Privileged to access and use the
Application as a part of the Service only; (iii) to provide ongoing maintenance,
upgrades and enhancements to the Service, in accordance with the Support
Services / Service Level Agreement, or as otherwise agreed to, in writing, by
the Parties; (iv) to use all commercially reasonable efforts to prevent
unauthorized access to, or use of, the Service, and notify Privileged promptly
of any such unauthorized use which may affect Privileged.

4.2.2

Quality of Service.  MagNet hereby warrants that the Services will be performed
in a professional and workmanlike manner consistent with industry standards
reasonably applicable to such Services.  If a breach of this warranty has
occurred, and Privileged notifies MagNet in writing stating the specific nature
of the breach, then MagNet will be required to promptly correct any affected
Services in order to comply with the warranty.  

4.2.3

Privileged Obligations. Privileged hereby agrees, subject to and during the term
of this Agreement: (i) not to reverse-engineer the Application; (ii) to use an
appropriate integration method for the volume and/or nature of queries to the
Service; (iii) that it is solely responsible for all of its activities and for
the accuracy, integrity, legality, reliability, and appropriateness of all
Customer Data; (iv) to use all commercially reasonable efforts to prevent
unauthorized access to, or use of, the Service, and notify MagNet promptly of
any such unauthorized use; (v) to comply with all applicable laws in using the
Service, wherever such use occurs, and not use, or  require MagNet to use, any
Customer Data obtained via the Service for any unlawful purpose; and (vi), to
accurately represent Privileged’s use of the Service and data obtained from the
Service.

4.3. Access to the Service, Attribution and Usage Fees.

4.3.1

Privileged Member Accounts. Privileged Members will be required to create an
account and provide Privileged with valid contact and payment information prior
to receiving access to the Service.  Once a Privileged Member has created an
account with Privileged, Privileged will provide the Customer Data relating to
such Member to MagNet, and the Member shall have access to the Service.

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4.3.2

Privileged Travel Agent Accounts.  Additionally, Privileged may work with travel
agents and travel providers (collectively, the “Travel Agents”), initially in
China pursuant to a separate travel services agreement.  The Travel Agents will
be required to create an account and provide Privileged with valid contact and
payment information prior to receiving access to the Service.  Once a Travel
Agent has created an account with Privileged, Privileged will provide the
Customer Data relating to such Travel Agent to MagNet, and the Travel Agent
shall have access to the Service.

4.3.3

Data Preparation & Configuration. Privileged will ensure that: (i) Customer Data
is in proper format as specified by the Documentation; and (ii) no other
software, data or equipment having an adverse impact on the Service has been
introduced.

4.5.

Intellectual Property Rights.

4.5.1

MagNet Intellectual Property. MagNet and its third-party licensors (as
appropriate) shall retain all Intellectual Property Rights in the Service and
Usage Data. Except as expressly set forth herein, no MagNet Intellectual
Property Rights are granted to Privileged.

4.5.2

Privileged Intellectual Property. Privileged retains all Intellectual Property
Rights in Customer Data. Pursuant to this Agreement, Privileged to grants MagNet
a license (i) to use the Customer Data to the extent necessary for the
performance of the Services; (ii) to keep an archival copy subject to the
provisions of the relevant data protection regulations; and (iii) to create
Usage Data by collecting non-confidential elements of Customer Data, such as
dates, location codes, equipment types, carriers, and other data as determined
by MagNet and in conjunction with automatically generated data such as IP
address, time, and frequency of access.

4.5.3

Feedback Relating to Services. MagNet shall have a perpetual, royalty-free,
irrevocable, world-wide license to use and incorporate into the Services any
suggestions, ideas, modification requests, feedback or other recommendations
related to the Services provided by or on behalf of Privileged.

4.6.

Warranties.

4.6.1

Non-infringement Warranty. MagNet represents and warrants to the best of its
knowledge and belief that the Service, when properly used as contemplated
herein, will not infringe or misappropriate any third-party Intellectual
Property Rights. Upon being notified of such a claim, MagNet shall at its
option: (i) defend through litigation or obtain through negotiation the right of
Privileged to continue using the Service; (ii) rework the Service so as to make
it noninfringing while preserving the original functionality, or (iii) replace
the Service with functionally equivalent services. If none of the foregoing
alternatives provide an adequate remedy, Privileged may terminate all or any
part of this Agreement.

4.6.2

Limited Performance Warranty. MagNet represents and warrants that the Service
will be provided substantially in accordance with the applicable Documentation;
provided, that (i) the Service is implemented and operated in accordance with
all instructions supplied by MagNet; (ii) Privileged notifies MagNet of any
defect within ten (10) calendar days after the appearance thereof; and (iii)
Privileged has paid all amounts due hereunder and is not in default of any
provision of this Agreement.

5.

Support.   MagNet agrees to provide support to Privileged, as reasonably
required, relating to MagNet’s Work Products and the Services so that Privileged
may use MagNet’s Work Products and the Services as intended pursuant to this
Agreement.  The Parties will mutually agree on the compensation to be paid for
such support in connection with a separate Support Services / Service Level
Agreement.

 

6.

Materials / Trademarks.   Privileged shall make available to MagNet, at
Privileged’s expense, all of the materials as specifically set forth in a Work
Specifications Document, if any, and shall provide such materials in timely
manner in accordance with the terms set forth in any Work Specifications
Document.  Any delay by Privileged in providing such materials to MagNet may
have a material impact on MagNet’s delivery dates, contract price and warranty
provisions.  Privileged hereby grants to MagNet for the term of this Agreement a
non-exclusive, worldwide, royalty-free, license to use any of Privileged’s
trademarks directly in connection with any Project, in the development,
production, marketing, promotion, distribution, sales and commercialization of
each of the Projects.  

7.

Credit.   Privileged agrees to the inclusion of MagNet’s, reasonable, customary
and standard “powered by” credit, and the placement thereof, wherever a
Privileged credit or brand appears in each of the Projects.

8.

Confidentiality; Confidential Information.

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8.1

Each of Privileged and MagNet acknowledges that the Confidential Information
(defined below) of the other Party is the exclusive property of such Party and
that any publication or disclosure to third parties of the Confidential
Information, except as expressly authorized herein, may cause immediate and
irreparable harm to MagNet and/or Privileged respectively, which may be subject
to both injunctive and monetary relief.  Each Party shall take reasonable steps
to maintain the confidentiality of the Confidential Information of the other
Party and in no event shall either Party provide less than the amount of care
such Party uses to safeguard its own Confidential Information.

8.2

Neither Party shall, without prior written consent of the non-disclosing Party,
disclose, provide, or make available any of the non-disclosing Party’s
Confidential Information in any form to any persons, except to employees of the
disclosing Party whose access is necessary to enable the disclosing Party to
exercise its rights under this Agreement and as required by law.  In the event
that disclosure is required by law, the disclosing Party shall provide the
non-disclosing Party prompt written notice to permit the non-disclosing Party an
opportunity, if it so elects, to oppose the disclosure.

8.3

Each Party shall require any employee having such access to agree to maintain
the confidentiality of the non-disclosing Party’s Confidential Information.

8.4

Each Party shall require all sub-licensees, agents or employees having access to
the non-disclosing Party’s Confidential Information to agree to maintain the
confidentiality of the Confidential Information in accordance with the terms
herein and shall be liable for any breach related thereto.

8.5

In the event of a breach or threatened breach of this Section during the term
hereof and at any time thereafter, the non-breaching Party may be entitled to a
preliminary restraining order or injunction enjoining the breaching Party, the
breaching Party’s agents or employees and any other person or entity acting on
the breaching Party’s behalf or at the breaching Party’s direction or request or
with the breaching Party’s assistance or cooperation, from disclosing all or any
part of the non-breaching Party’s Confidential Information.  In addition to or
in lieu of the above, the non-breaching Party may pursue all other remedies
available to it for such breach or threatened breach, including the recovery of
damages.

8.6

Except for the copies of documents or materials representing (in any form)
MagNet’s Work Products reasonably required by Privileged to provide continuing
support to its customers of the International Website and the Domestic Website,
upon the termination of this Agreement, and except as commercially reasonably
necessary to enable Privileged to engage another service provider upon
termination of this Agreement, Privileged shall return to MagNet all copies of
any documents or materials representing MagNet’s Work Products and other
materials (including all copies) in its possession or control disclosing the
Confidential Information.  Furthermore, Privileged shall take such further steps
as may be reasonably required by MagNet to protect the Confidential Information.
 Similarly, upon termination of this Agreement, MagNet shall return to
Privileged all copies of any documents or materials representing Privileged
Property and other materials (including all copies) in its possession or control
disclosing the Confidential Information.  Furthermore, MagNet shall take such
further steps as may be reasonably required by Privileged to protect the
Confidential Information.

8.7

For purposes of this Agreement “Confidential Information” shall mean MagNet’s
Work Products (with respect to MagNet), any associated materials (with respect
to MagNet), codes, the Privileged Property (with respect to Privileged), any
associated materials (with respect to Privileged), and all other information,
documents, records or instruments exchanged or provided by either Party pursuant
to this Agreement.

9.  Confidentiality of Project Data.

9.1

Access, Use, and Legal Compulsion. Unless it receives Privileged’s prior written
consent, MagNet: (i) will not access or use data in electronic form collected
through the Services from Privileged’s customers or other third parties, or
collected or accessible directly from Privileged, (collectively, “Project Data”)
other than as necessary to facilitate the Services; and (ii) will not give any
third party access to Project Data. Notwithstanding the foregoing, MagNet may
disclose Project Data as required by applicable law or by proper legal or
governmental authority. MagNet will give Privileged prompt notice of any such
legal or governmental demand and reasonably cooperate with Privileged in any
effort to seek a protective order or otherwise to contest such required
disclosure, at Privileged’s expense.

9.2

Privileged’s Rights. Privileged possesses and retains all right, title, and
interest in and to Project Data, and MagNet’s use and possession thereof is
solely as Privileged’s agent. Privileged may access and copy any Project Data in
MagNet’s possession at any time, through the media of communication described on
the Work Specification Document.  MagNet will facilitate such access and copying
promptly after Privileged’s request.

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9.3

Retention and Deletion. MagNet will retain any Project Data in its possession
until Erased (as defined below) pursuant to this Subsection 9.3. MagNet will
Erase: (i) any or all copies of Project Data promptly after Privileged’s written
request; and (ii) all copies of Project Data no sooner than 5 business days
after termination of this Agreement and no later than 15 business days after
such termination. Notwithstanding the foregoing, Privileged may at any time
instruct MagNet to retain and not to Erase or otherwise delete Project Data,
provided Privileged may not require retention of Project Data for more than 180
business days after termination of this Agreement. Promptly after Erasure
pursuant to this Subsection 9.3, MagNet will certify such Erasure in writing to
Privileged. (“Erase” and “Erasure” refer to the destruction of data so that no
copy of the data remains or can be accessed or restored in any way.)

9.4

Technical & Physical Security. In its handling of Project Data, MagNet will
observe all applicable technical and physical security requirements, including
but not limited to PCI-DSS regulations or Payment Card Industry Data Security
Standard regulations, relating to e-commerce information.

9.5

Individuals’ Access. MagNet will not allow any of its employees to access
Project Data, except to the extent that an employee needs access in order to
facilitate the Services and executes a written agreement with MagNet agreeing to
comply with MagNet’s obligations set forth in this Section 9. MagNet will
perform a background check on any individual it gives access to Project Data.
Such background check will include, without limitation, a review of the
individual’s criminal history, if any. MagNet will not grant access to Project
Data if the background check or other information in MagNet’s possession would
lead a reasonable person to suspect that the individual has committed identity
theft or otherwise misused third party data or that the individual presents a
threat to the security of Project Data.

9.6

Compliance with Law and Policy. MagNet will comply with all applicable federal
and state laws and regulations governing the handling of Project Data.

9.7

Testing & Audits. Privileged may test MagNet’s Project Data management systems
four times per year, at Privileged’s sole cost and expense, including without
limitation via unannounced penetration tests, and MagNet will cooperate with
such tests as Privileged reasonably requests.

9.8

Leaks. MagNet will promptly notify Privileged of any actual or potential
exposure or misappropriation of Project Data (any “Leak”) that comes to MagNet’s
attention. MagNet will cooperate with Privileged and with law enforcement
authorities in investigating any such Leak, at MagNet’s expense. MagNet will
likewise cooperate with Privileged and with law enforcement agencies in any
effort to notify injured or potentially injured parties, and such cooperation
will be at MagNet’s expense, except to the extent that the Leak was caused by
Privileged. The remedies and obligations set forth in this Subsection 9.8 are in
addition to any others Privileged may have.

9.9

Injunction. MagNet agrees that violation of the provisions of this Section 9
could cause Privileged irreparable injury, for which monetary damages would not
provide adequate compensation, and that in addition to any other remedy,
Privileged will be entitled to seek injunctive relief against such breach or
threatened breach.

10.

MagNet’s Representations And Warranties

10.1

MagNet represents and warrants that, following acceptance of a Project by
Privileged, such Project will be free from material reproducible programming
errors and defects in workmanship and materials, and will substantially conform
to the specifications in the relevant Work Specifications Document when
maintained and operated in accordance with the Support Services / Service Level
Agreement.  If material reproducible programming errors are discovered during
the License Period, MagNet shall promptly remedy them at no additional expense
to Privileged.  This warranty to Privileged shall be null and void if Priveleged
is in default under this Agreement, or if the nonconformance is due to:

10.1.1

hardware failures due to defects, power problems, environmental problems or any
cause other than MagNet’s Work Products;

10.1.2

modification of MagNet’s Work Products, operating systems or computer hardware,
relating to the Project, by any party other than MagNet; or

10.1.3

misuse by, errors by, or negligence of, Privileged, its employees or agents in
connection with the operating of the Projects.

10.2

MagNet shall not be obligated to cure any defect unless MagNet becomes
reasonably aware, or  Priveleged notifies MagNet of the existence and nature of
such defect promptly upon discovery.

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10.3

Warranty of Title:  MagNet owns and has the right to license or convey title to
MagNet’s Work Products. MagNet will not grant any rights or licenses to any
intellectual property or technology that would conflict with MagNet's
obligations under this Agreement.

10.4

Warranty Against Disablement: MagNet expressly warrants that no portion of
MagNet’s Work Products contain or will contain any protection feature designed
to prevent its use. This includes, without limitation, any computer virus, worm,
software lock, drop dead device, Trojan-horse routine, trap door, time bomb or
any other codes or instructions that may be used to access, modify, delete,
damage or disable any of the Projects. MagNet further warrants that it will not
impair the operation of the Projects in any way other than by order of a court
of law.

10.5

Warranty of Compatibility: MagNet warrants that each of the Projects shall be
compatible with the hardware and software reasonably contemplated and
anticipated to be utilized in connection with a Project as set forth in the
applicable Work Specifications Document.

11.  Mutual Representations And Warranties.  Each Party hereby represents and
warrants:

11.1

Such Party is duly organized and validly existing under the laws of the
jurisdiction of its formation and registration, and has full company power and
authority to enter into this Agreement, to grant the rights granted herein, and
to carry out the provisions hereof;

11.2

This Agreement is a legal and valid obligation binding upon it and enforceable
in accordance with its terms;

11.3

The execution, delivery and performance of this Agreement by such Party does not
conflict with any agreement, instrument, or understanding, oral or written, to
which it is a Party or by which it may be bound, nor violate any law or
regulation of any court, governmental body or administrative or other agency
having jurisdiction over it.

11.4

Such Party will not, in the course of performing any of its obligations under
this Agreement infringe or misappropriate any intellectual property right or
other right of any person or entity; no deliverable or other material provided
by one Party to the other, whether in tangible or intangible form, will infringe
or misappropriate, any intellectual property right, or other right of any other
person or entity; and no deliverable or other material provided by one Party to
the other, whether in tangible or intangible form, will be subject to any
restriction, mortgage, lien, claim, pledge, security interest, or encumbrance
when delivered by one Party to the other.

12.   Intellectual Property Infringement Claims.

12.1

To the extent any material contributed by MagNet to a Project contains matter
proprietary to a third party, MagNet shall obtain a license from the owner
permitting the use of such matter and granting MagNet the right to sub-license
its use. MagNet will not knowingly infringe upon any existing patents of third
parties in the performance of services required by this Agreement, but MagNet
MAKES NO WARRANTY OF NON-INFRINGEMENT of any United States or foreign patent.  
If any third party brings a lawsuit or proceeding against Priveleged based upon
a claim that a Project breaches the third party's patent, copyright or trade
secrets rights, and it is determined that such infringement has occurred, MagNet
shall indemnify and hold Priveleged harmless against any loss, damage, expense
or cost, including reasonable attorney fees, arising from the claim.  This
indemnification obligation shall be effective only if:

12.1.1

The third party intellectual property rights involved were known to MagNet prior
to delivery of the Project;

12.1.2

Priveleged has made all payments required by this Agreement;

12.1.3

Priveleged has given prompt notice of the claim and permitted MagNet to defend;
and

12.1.4

The claim does not result from Priveleged’s modification of the Project.

12.2

To reduce or mitigate damages, MagNet may, at its own expense, replace the
infringing portion of the Project with a non-infringing product.

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13.

Events of Default.

13.1

By Privileged.   The occurrence of any one or more of the following events with
respect to Privileged shall constitute an event of default hereunder
(“Privileged Event of Default”):

13.1.1

If Privileged shall fail to pay any amount due hereunder within ten (10)
business days of the date the amount becomes due and payable;

13.1.2

Privileged shall become insolvent or shall make an assignment for the benefit of
creditors, or if any petition is filed by or against Privileged under any
provision of any state or federal law or statute alleging that Privileged is
insolvent or unable to pay its debts as they mature;

13.1.3

If an involuntary petition shall be filed against Privileged seeking bankruptcy
or reorganization, and such petition or complaint shall not have been dismissed
within sixty (60) days of the filing thereof; or an order, order for relief,
judgment or decree shall be entered by any court of competent jurisdiction or
other competent authority approving such a petition or complaint seeking
reorganization;

13.1.4

The failure of Privileged to have discharged within a period of twenty (20) days
after its commencement, any attachment, sequestration, or similar proceedings
against any of Privileged’s assets; and

13.1.5

Privileged’s material breach of any terms of this Agreement.

13.2

Upon the occurrence of a Privileged Event of Default, MagNet shall have the
following rights and remedies, provided MagNet gives written notice of such
Privileged Event of Default and such default is not corrected within twenty (20)
days after written notice, except as otherwise set forth herein:

13.2.1

MagNet may terminate this Agreement; and

13.2.2

MagNet may exercise any and all rights and remedies available to it under
applicable law.

13.3

By MagNet.  The occurrence of any one or more of the following events with
respect to MagNet shall constitute an event of default hereunder (“MagNet Event
of Default”):

13.3.1

Failure by MagNet to perform its duties and responsibilities pursuant to this
Agreement, following written notice by Privileged, including a ten (10) business
day cure period;

13.3.2

MagNet shall become insolvent or shall make an assignment for the benefit of
creditors, or if any petition is filed by or against MagNet under any provision
of any state or federal law or statute alleging that MagNet is insolvent or
unable to pay its debts as they mature;

13.3.3

If an involuntary petition shall be filed against MagNet seeking bankruptcy or
reorganization , and such petition or complaint shall not have been dismissed
within sixty (60) days of the filing thereof; or an order, order for relief,
judgment or decree shall be entered by any court of competent jurisdiction or
other competent authority approving such a petition or complaint seeking
reorganization;

13.3.4

The failure of MagNet to have discharged within a period of twenty (20) days
after its commencement, any attachment, sequestration, or similar proceedings
against any of MagNet’s assets; and

13.3.5

MagNet’s material breach of any terms of this Agreement.

13.4

Upon the occurrence of a MagNet Event of Default, Privileged shall have the
right to terminate this Agreement, provided Privileged gives written notice
thereof and such default is not corrected within twenty (20) days after written
notice, except as otherwise set forth herein.  In the event that Privileged
exercises its right to terminate this Agreement, Privileged shall have no
further obligation to share any revenues with MagNet pursuant to this Agreement.

14.

Termination; Mutual Obligations Upon Termination; Timing.  This Agreement will
remain in effect until the earlier to occur of: (i) December 31, 2015; (ii)
termination in accordance with Section 13; and (iii) written agreement both
parties.  In the event of termination of this Agreement:

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14.1

Any additional software developed by Privileged completely separate from
MagNet’s Work  Products shall remain the property of Privileged and Privileged
shall have the right to distribute this developed software in its possession as
of the effective date of such termination.

14.2

Except for the copies of documents or materials representing (in any form)
MagNet’s Work Products reasonably required by Privileged to provide continuing
support to its customers of the International Website and the Domestic Website,
Privileged shall return to MagNet all copies of any documents or materials
representing MagNet’s Work Products and other materials (including all copies)
in its possession or control disclosing the Confidential Information.
 Furthermore, Privileged shall take such further steps as may be reasonably
required by MagNet to protect the Confidential Information.  Similarly, MagNet
shall return to Privileged all copies of any documents or materials representing
Privileged Property and other materials (including all copies) in its possession
or control disclosing the Confidential Information.  Furthermore, MagNet shall
take such further steps as may be reasonably required by Privileged to protect
the Confidential Information.

14.3

Any termination of this Agreement, pursuant to the terms set forth in this
Agreement, related to a Project will not affect MagNet’s nor Priveleged’s rights
concerning any previous Project.  

14.4

The Parties mutually understand, acknowledge, and agree that in connection with
the Services to be provided by MagNet pursuant to this Agreement, the cessation
of providing Services by MagNet in connection with any termination of this
Agreement likely would have a material adverse impact on Privileged and its
business and operations.  Accordingly, the Parties hereby mutually acknowledge
and agree that absent any written agreement between the Parties, under no
circumstances shall any termination of this Agreement take effect prior to the
earlier of (a) six months following the notice of termination given by either
Party to the other Party, or (b) that date on which Privileged agrees that it
has engaged a substitute provider of services similar to the Services to be
provided by MagNet.  Additionally, MagNet agrees that it shall work with
Privileged and such other provider of services (identified by Privileged) during
the six-month period preceding termination of this Agreement to assist in the
transition to such other provider of services.

14.5

Section 14 shall survive any termination of this Agreement.

15.

Copyright.

15.1

Privileged shall not copy any part of MagNet’s Work Products except for backup
or archival purposes.

15.2

Privileged shall not permit any other person or entity to copy any of MagNet’s
Work Products.

15.3

Privileged shall include on all authorized copies made by it of MagNet’s Work
Products, all proprietary, copyright, trade secret and patent legends, in the
same form and location as any legend appearing on MagNet’s Work Products, or in
any other form and location reasonably specified by MagNet from time to time in
writing.

15.4

The inclusion of a copyright notice on any of the Licensed Software shall not
cause, or be construed to cause, it to be a published work.

15.5

Privileged shall maintain a record of, and provide a copy to, MagNet of the
number and location of all originals and copies of MagNet’s Work Products.
 MagNet shall not use such record to directly market or contact Privileged’s
customers, clients, or Members for the purpose of soliciting business or
feedback from such customers, clients, or Members.  Notwithstanding anything set
forth in this Agreement to the contrary,

16.

Limitation of MagNet's Liability to Privileged.

16.1

NEITHER MAGNET NOR ANY OF ITS SUPPLIERS SHALL BE LIABLE TO PRIVILEGED OR ITS
DISTRIBUTION PARTNERS (WHETHER UNDER CONTRACT, NEGLIGENCE, STRICT LIABILITY OR
ANY OTHER LEGAL OR EQUITABLE THEORY) FOR ANY SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES OR LOST PROFITS, EVEN IF MAGNET HAS BEEN MADE AWARE OF THE
POSSIBILITY OF SUCH DAMAGES. THE FOREGOING ALLOCATION OF RISK IS REFLECTED IN
THE PRIVILEGED FEE CHARGED UNDER THIS AGREEMENT.

16.2

MagNet's total liability under this Agreement for damages, costs and expenses,
regardless of cause or reason, shall not exceed the total amount of payments
made to MagNet by Priveleged under this Agreement.

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16.3

MagNet shall not be liable for any claim or demand made against Priveleged by
any third party except to the extent such claim or demand relates to copyright,
trade secret or other proprietary rights, and then only as provided in the
section of this Agreement entitled Intellectual Property Infringement Claims.

16.4

Priveleged shall indemnify MagNet against all claims, liabilities and costs,
including reasonable attorney fees, of defending any third party claim or suit
arising out of the use of the Projects  under this Agreement, other than for
infringement of intellectual property rights based on any material contained in
the Projects which were provided by MagNet hereunder, and which such material
was not provided to MagNet by Priveleged.  MagNet shall promptly notify
Priveleged in writing of any third party claim or suit and Priveleged shall have
the right to fully control the defense and any settlement of such claim or suit.

17.

Subcontractors.   Notwithstanding anything contained in this Agreement to the
contrary, MagNet shall have the unrestricted right to engage the services of any
subcontractors (“Subcontractors”) to fulfill any of MagNet’s obligations to
Priveleged hereunder.

18.

Relationships of The Parties.   Nothing contained herein shall be construed to
imply a joint venture, partnership or principal- agent relationship between the
parties, and neither Party shall have the right, power or authority to obligate
or bind the other in any manner whatsoever, except as otherwise agreed to in
writing. The parties do not contemplate a sharing of profits relating to the
services provided by each Party hereunder, so as to create a separate taxable
entity under Section 761 of the Internal Revenue Code of 1986, as amended, nor
co-ownership of a business or property so as to create a separate partnership
under the law of any jurisdiction, including, without limitation, California or
law.  Accordingly, for tax, property and liability purposes MagNet will provide
the MagNet services contemplated hereunder, and Priveleged will perform the
Priveleged services contemplated hereunder, each on a professional basis and as
an independent contractor of the other. Revenues and expenses relating to these
services shall be reported separately by the parties for tax purposes. During
the performance of the any of the services, MagNet's employees will not be
considered employees of Privelegeds, and vice versa, within the meaning or the
applications of any federal, state or local laws or regulations including, but
not limited to, laws or regulations covering unemployment insurance, old age
benefits, worker's compensation, industrial accident, labor or taxes of any
kind.  MagNet's personnel who are to perform the MagNet services hereunder shall
be under the employment, and ultimate control, management and supervision of
MagNet.  Priveleged personnel who are to perform the Privelegeds services
hereunder shall be under the employment, and ultimate control, management and
supervision of Privelegeds.  It is understood and agreed that Priveleged
employees shall not be considered MagNet's employees within the meaning or
application of MagNet’s employee fringe benefit programs for the purpose of
vacations, holidays, pension, group life insurance, accidental death, medical,
hospitalization, and surgical benefits, and vice versa.

19.

Notices.   All notices or other communications which are required to be given
hereunder shall be in writing and shall be sent to the address of the Party set
out in this Agreement or such other address as the Party may designate by notice
given in accordance with the provisions of this Section 19.  Any such notice may
be delivered personally, by certified mail, return receipt requested, email or
facsimile and shall be deemed to have been served if by hand when delivered, if
by mail on the second day after the mailing thereof, or if by email or
facsimile, upon confirmation of its receipt.

20.

Assignment.   Neither this Agreement nor any other rights hereunder shall be
assigned or otherwise transferred in any manner by either Party without the
prior written consent of the other Party.  Notwithstanding anything to the
contrary contained herein, both Party’s rights and obligations hereunder may be
assigned to: (i) any affiliate of such Party; and (ii) any third Party who
acquires substantially all the business of such Party to which this Agreement
relates, whether by merger, purchase of such Party’s stock or assets, or
otherwise, but only if such successor agrees in writing to be bound by all the
terms and conditions of this Agreement, which writing is provided to the other
Party hereto.  In no event shall this Agreement be assignable by either Party if
such assignment or transfer is to a competitor of the other Party.

 

21.   Non-Solicitation Of Employees.   Priveleged and MagNet each agree not to
knowingly hire or solicit the other’s employees, consultants or contractors,
during the Term of this Agreement and for a period of one year after termination
of this Agreement, without the other's prior written consent.  

22.

Entire Agreement.   This Agreement sets forth the entire agreement and
understanding between the Parties and supersedes and cancels all previous
negotiations, agreements (including, but not limited to, the non-binding term
sheet, dated September 18, 2012, entered into by the Parties), commitments, and
writings in respect of the subject matter hereof and there are no understandings
representations, conditions, warranties, expressed or implied, statutory or
otherwise made or assumed by the parties, other than those expressly contained
in this Agreement.  No Party shall be bound by any term, clause, provision or
conditions save as expressly provided herein or as duly set forth on or
subsequent to the Effective Date of this Agreement in writing signed by duly
authorized officers of the Parties.

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23.

Press Releases.   Neither Party may publicly release any information pertaining
to this Agreement, including by way of a press release, without the consent of
the other Party, except as required by law, government agency, or other legal
requirement.  The Parties expressly acknowledge that Privileged is a public
company and shall be required to disclose this Agreement in connection with its
filings with the U.S. Securities and Exchange Commission.

24.

Severability.   In the event of an enforceable decision or statutory directive
declaring invalid an essential part of this Agreement, without which this
Agreement would not have been entered into, this Agreement may, at the option of
either Party, be terminated upon giving written notice; provided, however, that
the parties must agree, in the exercise of reasonable business judgment, that
the decision or directive satisfies the terms of this provision and the parties
comply with its respective obligations up to and through the date of such
decision or directive.  Except as aforesaid, if any term, clause, provision, or
condition of this Agreement is similarly adjudged invalid for any reason
whatsoever, such invalidity shall not affect the validity or operation of any
other term, clause, provision or condition and such invalid term, clause,
provision or condition shall be deemed to have been deleted from this Agreement.

25.

Waiver.   No forbearance, delay or indulgence by either Party in enforcing the
provisions of this Agreement shall prejudice or restrict the rights of that
Party nor shall any waiver of its rights operate as a waiver of any subsequent
breach.  No right, power, or remedy herein conferred upon or reserved for either
Party is exclusive of any other right, power or remedy available to that Party
and each such right, power or remedy shall be cumulative.  No waiver by either
Party of its rights hereunder shall be valid unless it is in writing signed by
that Party.

26.

Governing Law.   This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California.  The prevailing Party in
any lawsuit brought under the terms of this Agreement shall be awarded
reasonable attorney’s fees and costs.

27.   Dispute.   In the event of any dispute between the parties which arises
under this Agreement, such dispute shall be settled by arbitration in accordance
with the rules for commercial arbitration of the American Arbitration
Association (or a similar organization) in effect at the time such arbitration
is initiated. A list of arbitrators shall be presented to the Claimant and
Respondent from which one will be chosen using the applicable rules. The hearing
shall be conducted in the City of Los Angeles, unless both parties consent to a
different location. The decision of the arbitrator shall be final and binding
upon all Parties.  The prevailing Party shall be awarded all of the filing fees
and related administrative costs. Administrative and other costs of enforcing an
arbitration award, including the costs of subpoenas, depositions, transcripts
and the like, witness fees, payment of reasonable attorney's fees, and similar
costs related to collecting an arbitrator's award, will be added to, and become
a part of, the amount due pursuant to this Agreement.   Any questions involving
contract interpretation shall be subject to the laws of California. An
arbitrator's decision may be entered in any jurisdiction in which the Party has
assets in order to collect any amounts due hereunder.

28.

Compliance With Laws.   The Parties shall comply with all applicable federal,
state and local laws, regulations including, but not limited to, U.S.
restrictions on the export, re-export, transfer, diversion or disclosure,
directly or indirectly, of any technology, product, services licensed or
purchased pursuant to this Agreement.

29.

Amendment.   No supplement, amendment or modification of this Agreement shall be
binding unless executed in writing by the Parties hereto.  

30.

Binding Agreement.   This Agreement shall be binding upon, and inure to the
benefit of, the Parties and their respective legal representatives, permitted
successors and permitted assigns as set forth herein.  

31.

Authority.   Each Party has the full right, power and authority to enter into
this Agreement and to consummate the transaction contemplated hereby.  Neither
the execution nor delivery of this Agreement nor the consummation of the
transaction contemplated hereby conflicts with, constitutes a breach, violation,
or termination of any provision of any agreement to which either Party is bound.

32.

Counterparts; Facsimile.   This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.  The Parties agree that a
facsimile signature shall constitute an original hereunder.

33.

Headings.   The section headings in this Agreement are for ease of reference
only and shall not affect the interpretation or construction of this Agreement.

[SIGNATURE PAGE FOLLOWS.]

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PRIVILEGED WORLD TRAVEL CLUB, INC.

MAGNET SOLUTIONS, INC.

Signature:  

/s/ Gregory Lykiardopoulos                

Signature:

/s/ Daniel Mapes                              

Print Name:  

Gregory Lykiardopoulos

Print Name:

Daniel Mapes

Title:

President,CEO, Chairman of the Board

Title:

President                                          

Date:

December 3, 2012                                           

Date:

November 30, 2012                                        

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