ICANN Logo .XXX Registry Agreement
(31 March 2011)

SPONSORED TLD REGISTRY AGREEMENT

This SPONSORED TLD REGISTRY AGREEMENT (this "Agreement") is entered into as of 30 March 2011 by and between Internet Corporation for Assigned Names and Numbers, a California nonprofit public benefit corporation ("ICANN"), and ICM Registry LLC, a Delaware limited liability company ("Registry Operator").

ARTICLE I INTRODUCTION

Section 1.1 Effective Date. The Effective Date for purposes of this Agreement shall be the date on which the TLD (as defined below) is delegated within the Authoritative Root-Server System (as defined below) to nameservers designated by Registry Operator. ICANN shall promptly notify Registry Operator in writing of such delegation.

Section 1.2 Top-Level Domain. The Top-Level Domain to which this Agreement applies is .xxx (the "TLD").

Section 1.3 Designation as Registry Operator. Upon the Effective Date, until the Expiration Date as defined in Section 4.1 hereof, ICANN hereby designates Registry Operator as the sole registry operator for the sponsored TLD. ICANN hereby delegates to Registry Operator the authority to develop policies for the sponsored TLD consistent with the requirements of Section 3.1(g) of this Agreement and Appendix S.

ARTICLE II REPRESENTATIONS AND WARRANTIES

Section 2.1 Registry Operator's Representations and Warranties.

(a) Organization; Due Authorization and Execution. Registry Operator is a limited liability company, duly organized, validly existing and in good standing under the laws of Delaware, and Registry Operator has all requisite power and authority to enter into this Agreement. All corporate approvals and actions necessary for the entrance by Registry Operator into this Agreement have been obtained and this Agreement has been duly and validly executed and delivered by Registry Operator.

(b) Statements made During Application Process. The factual statements contained in Registry Operator's application for the TLD, or made by Registry Operator in negotiating this Agreement, were true and correct in all material respects at the time the application was submitted to ICANN and are true and correct in all material respects as of the date of this Agreement as set forth above.

Secion 2.2 ICANN's Representations and Warranties.

(a) Organization; Due Authorization and Execution. ICANN is a nonprofit public benefit corporation duly organized, validly existing and in good standing under the laws of California. ICANN has all requisite corporate power and authority to enter into this Agreement. All corporate approvals and actions necessary for the entrance by ICANN into this Agreement have been obtained and this Agreement has been duly and validly executed and delivered by ICANN

(b) Reasonable Best Efforts. As of the date of execution of this Agreement first set forth above, notwithstanding the fact that ICANN currently does not exercise exclusive authority over the constellation of DNS root-nameservers specified, from time to time, in the file <ftp://ftp.internic.net/domain/named.root>, as further described in ICP 3 (the "Authoritative Root-Server System"), ICANN agrees to work in good faith, using reasonable best efforts, to ensure that the TLD shall be delegated to Registry Operator.

ARTICLE III COVENANTS

Section 3.1 Covenants of Registry Operator. Registry Operator covenants and agrees with ICANN as follows:

(a) Preserve Security and Stability.

    (i) ICANN Temporary Specifications or Policies. Registry Operator shall comply with and implement all specifications or policies established by the ICANN Board of Directors on a temporary basis, if adopted by the ICANN Board of Directors by a vote of at least two-thirds of its members, so long as the ICANN Board of Directors reasonably determines that immediate temporary establishment of a specification or policy on the subject is necessary to maintain the Stability or Security (as defined in Section 3.1(d)(iv)(G)) of Registry Services or the DNS ("Temporary Specification or Policies"). Such proposed Temporary Specification or Policy shall be as narrowly tailored as feasible to achieve those objectives. In establishing any Temporary Specification or Policy under this provision, the ICANN Board of Directors shall state the period of time for which the Temporary Specification or Policy is temporarily adopted and shall immediately implement the policy development process set forth in ICANN's Bylaws with respect to Consensus Policies as described in Section 3.1(b) below. ICANN shall also issue an advisory statement containing a detailed explanation of its reasons for adopting the Temporary Specification or Policy and why the Board believes the specification or policy should receive the consensus support of Internet stakeholders. If the period of time for which the Temporary Specification or Policy is adopted exceeds 90 days, the ICANN Board shall reaffirm its temporary adoption every 90 days for a total period not to exceed one year, in order to maintain such Temporary Specification or Policy in effect until such time as it shall become a Consensus Policy as described in Section 3.1(b) below. If during such one-year period, the Temporary Specification or Policy does not become a Consensus Policy meeting the standard set forth in Section 3.1(b) below, Registry Operator shall no longer be required to comply with or implement such Temporary Specification or Policy.

(b) Consensus Policies.

    (i) At all times during the term of this Agreement and subject to the terms hereof, Registry Operator will fully comply with and implement all Consensus Policies as the same may be applicable to sponsored TLDs, found at http://www.icann.org/en/general/consensus-policies.htm, as of the Effective Date and as may in the future be developed and adopted in accordance with ICANN's Bylaws and as set forth below.

    (ii) "Consensus Policies" are those specifications or policies established (1) pursuant to the policy development procedure set forth in ICANN's Bylaws and due process, and (2) covering those topics listed in Section 3.1(b)(iv) below. The policy development process and procedure set forth in ICANN's Bylaws may be revised from time to time in accordance with ICANN's Bylaws, and any Consensus Policy that is adopted through such a revised process and covering those topics listed in Section 3.1(b)(iv) below shall be considered a Consensus Policy for purposes of this Agreement.

    (iii) For all purposes under this Agreement, the policies identified at http://www.icann.org/en/general/consensus-policies.htm as of the Effective Date and as may in the future be developed and adopted in accordance with ICANN's Bylaws shall be treated in the same manner and have the same effect as "Consensus Policies."

    (iv) Consensus Policies and the procedures by which they are developed shall be designed to produce, to the extent possible, a consensus of Internet stakeholders. Consensus Policies shall relate to one or more of the following: (1) issues for which uniform or coordinated resolution is reasonably necessary to facilitate interoperability, Security and/or Stability of the Internet or Domain Name System ("DNS"); (2) functional and performance specifications for the provision of Registry Services (as defined in Section 3.1(d)(iii) below); (3) Security and Stability of the registry database for the TLD; (4) registry policies reasonably necessary to implement Consensus Policies relating to registry operations or registrars; or (5) resolution of disputes regarding the registration of domain names (as opposed to the use of such domain names). Such categories of issues referred to in the preceding sentence shall include, without limitation:

    (A) Principles for allocation of registered names in the TLD (e.g., first-come, first-served, timely renewal, holding period after expiration);

    (B) Prohibitions on warehousing of or speculation in domain names by registries or registrars;

    (C) Reservation of registered names in the TLD that may not be registered initially or that may not be renewed due to reasons reasonably related to (i) avoidance of confusion among or misleading of users, (ii) intellectual property, or (iii) the technical management of the DNS or the Internet (e.g., establishment of reservations of names from registration);

    (D) Maintenance of and access to accurate and up-to-date information concerning domain name registrations;

    (E) Procedures to avoid disruptions of domain name registrations due to suspension or termination of operations by a registry operator or a registrar, including procedures for allocation of responsibility for serving registered domain names in a TLD affected by such a suspension or termination; and

    (F) Resolution of disputes regarding whether particular parties may register or maintain registration of particular domain names.

    (v) Registry Operator shall be afforded a reasonable period of time following notice of the establishment of a Consensus Policy or Temporary Specifications or Policies in which to comply with such policy or specification, taking into account any urgency involved.

    In the event of a conflict between Registry Services (as defined in Section 3.1(d)(iii) below), on the one hand, and Consensus Policies developed in accordance with this Section 3.1(b) or any Temporary Specifications or Policies established pursuant to Section 3.1(a)(i) above, on the other hand, the Consensus Polices or Temporary Specifications or Policies shall control, notwithstanding any other provisions contained within this Agreement.

(c) Handling of Registry Data.

(i) Data Escrow. Registry Operator shall establish at its expense a data escrow or mirror site policy for the Registry Data (as defined below) compiled by Registry Operator. "Registry Data", as used in this Agreement, shall mean the following: (1) data for domains sponsored by all registrars, consisting of domain name, server name for each nameserver, registrar id, updated date, creation date, expiration date, status information, and DNSSEC delegation signing ("DS") data (when Registry Operator implements DNSSEC); (2) data for nameservers sponsored by all registrars consisting of server name, each IP address, registrar id, updated date, creation date, expiration date, and status information; (3) data for registrars sponsoring registered domains and nameservers, consisting of registrar id, registrar address, registrar telephone number, registrar e-mail address, whois server, referral URL, updated date and the name, telephone number, and e-mail address of all the registrar's administrative, billing, and technical contacts; and (4) domain name registrant data collected by the Registry Operator from registrars as part of or following registration of a domain name. The escrow agent or mirror-site manager, and the obligations thereof, shall be mutually agreed upon by ICANN and Registry Operator on commercially reasonable standards that are technically and practically sufficient to allow a successor registry operator to assume management of the TLD. To this end, Registry Operator shall periodically deposit into escrow all Registry Data on a schedule (not more frequently than weekly for a complete set of Registry Data, and daily for incremental updates) and in an electronic format mutually approved from time to time by Registry Operator and ICANN, such approval not to be unreasonably withheld by either party. In addition, Registry Operator will deposit into escrow that data collected from registrars as part of offering Registry Services introduced after the Effective Date of this Agreement. The schedule, content, format, and procedure for escrow deposits shall be as reasonably established by ICANN from time to time, and as set forth in Appendix 1 hereto. Changes to the schedule, content, format, and procedure may be made only with the mutual written consent of ICANN and Registry Operator (which neither party shall unreasonably withhold) or through the establishment of a Consensus Policy as outlined in Section 3.1(b) above. The escrow shall be held under an agreement, substantially in the form of Appendix 2, as the same may be revised from time to time, among ICANN, Registry Operator, and the escrow agent.

(ii) Personal Data. Registry Operator shall notify registrars sponsoring registrations in the registry for the TLD of the purposes for which Personal Data (as defined below) submitted to Registry Operator by registrars, if any, is collected, the intended recipients (or categories of recipients) of such Personal Data, and the mechanism for access to and correction of such Personal Data. Registry Operator shall take reasonable steps to protect Personal Data from loss, misuse, unauthorized disclosure, alteration or destruction. Registry Operator shall not use or authorize the use of Personal Data in a way that is incompatible with the notice provided to registrars. "Personal Data" shall refer to all data about any identified or identifiable natural person.

(iii) Bulk Zone File Access. Registry Operator shall provide bulk access to the zone files for the registry for the TLD to ICANN on a reasonable basis in the manner specified by ICANN from time to time. Bulk access to the zone files shall be provided to third parties on the terms set forth in the TLD zone file access agreement reasonably established by ICANN, which initially shall be in the form attached as Appendix 3 hereto. Changes to the zone file access agreement may be made upon the mutual written consent of ICANN and Registry Operator (which consent neither party shall unreasonably withhold).

(iv) Monthly Reporting. Within 20 days following the end of each calendar month, Registry Operator shall prepare and deliver to ICANN a report providing such data and in the format specified in Appendix 4. ICANN may audit Registry Operator's books and records for the preceding 48 months relating to data contained in monthly reports from time to time upon no less than 10 days advance written notice, provided that such audits shall not exceed one per quarter. Any such audit shall be at ICANN's cost, unless the results of such audit shall demonstrate a material discrepancy or discrepancies in the data provided by Registry Operator. In the latter event, Registry Operator shall reimburse ICANN for all costs and expenses associated with such audit, which reimbursement shall be paid together with the next Registry-Level Fee payment due following the date of transmittal of the cost statement for such audit. For purposes of this section, a "material discrepancy or discrepancies" shall be a discrepancy or discrepancies that, in the singular or the aggregate, result in an understatement in excess of 5% of the fees owed to ICANN by Registry Operator under Section 7.2.

(v) Whois Service. Registry Operator shall provide such whois data as set forth in Appendix 5

(d) Registry Operations.

(i) Registration Restrictions.

(A) Registry Operator shall establish policies, in conformity with the charter included in Appendix S hereto (the "Charter"), for the naming conventions within the sponsored TLD and for requirements of registration, consistent with Section 3.1(g).

(B) Registry Operator shall establish procedures for the enforcement of applicable Charter restrictions on registration within the TLD as described in Appendix S, which Appendix shall also include the description of the sponsored community and the delegated authority with respect thereto.

(C) Registry Operator shall reserve, and not register any TLD strings (i) appearing on the list of reserved TLD strings attached as Appendix 6 hereto or (ii) located at http://data.iana.org/TLD/tlds-alpha-by-domain.txt for initial (i.e., other than renewal) registration at the second level within the TLD.

(ii) Functional and Performance Specifications. Functional and Performance Specifications for operation of the TLD shall be as set forth in Appendix 7 hereto, and shall address without limitation, minimum requirements for: DNS services; operation of the shared registration system; and nameserver operations. Registry Operator shall keep technical and operational records sufficient to evidence compliance with such specifications for at least one year, which records ICANN may audit from time to time upon no less than 10 days advance written notice, provided that such audits shall not exceed one per quarter. Any such audit shall be at ICANN's cost.

(iii) Registry Services. Registry Services are, for purposes of this Agreement, defined as the following: (a) those services listed on the product list contained in the Start-Up Plan set forth in Appendix S Part 4 hereto as of the date hereof; (b) those services that are operations of the registry critical to the following tasks: the receipt of data from registrars concerning registrations of domain names and name servers; provision to registrars of status information relating to the zone servers for the TLD; dissemination of TLD zone files; operation of the registry zone servers; and dissemination of contact and other information concerning domain name server registrations in the TLD as required by this Agreement; (c) other products or services that the Registry Operator is required to provide because of the establishment of a Consensus Policy (as defined in Section 3.1(b) above); (d) any other products or services that only a registry operator is capable of providing, by reason of its designation as the registry operator; and (e) material changes to any Registry Service within the scope of (a), (b),(c) or (d) above.

(iv) Process for Consideration of Proposed Registry Services. Registry Operator must notify ICANN prior to implementing any new Registry Service, or making any material modification to a Registry Service, in conformance with that procedure detailed at http://www.icann.org/en/registries/rsep/rsep.html (as such procedure maybe amended from time to time, the "RSEP"). Following such written notification by Registry Operator to ICANN that Registry Operator may make a change in a Registry Service within the scope of the preceding clause (iii), ICANN will follow the procedure detailed in the RSEP.

(e) Fees and Payments. Registry Operator shall pay the Registry-Level Fees to ICANN on a quarterly basis in accordance with Section 7.2 hereof.

(f) Cooperation. Registry Operator shall cooperate with ICANN in efforts to promote and facilitate the Security and Stability of the Internet and the DNS. To this end, Registry Operator shall provide such data and assistance related to these issues to ICANN as ICANN may reasonably request from time to time.

(g) General Obligations of Registry Operator to Sponsored Community. During the Term of this Agreement, Registry Operator shall, in developing or enforcing standards, policies, procedures, or practices with respect to the TLD:

(i) Publish such standards, policies, procedures, and practices so they are available to members of the sponsored TLD community;

(ii) Conduct its policy-development activities in a manner that reasonably provides opportunities for interested members of the sponsored TLD community to discuss and participate in the development of such standards, policies, procedures, or practices;

(iii) Maintain the representativeness of its policy-development and implementation process by establishing procedures that provide an opportunity for participation by a broad cross-section of the sponsored TLD community; and

(iv) Ensure, through published procedures, adequate opportunities for members of the sponsored TLD community to submit their views on and objections to the establishment or revision of standards, policies, procedures, and practices or the manner in which standards, policies, procedures, and practices are enforced.

(h) Certification. Every six months during the first year of the Term of this Agreement and annually thereafter, Registry Operator shall deliver to ICANN a certification executed by the chief executive officer of Registry Operator certifying as to Registry Operator's compliance in all material respects with the terms of this Agreement (including the Appendices hereto). Such certification shall be accompanied by a non-confidential summary of the nature and quantity of complaints received and processed by Registry Operator in the previous reporting period in form and substance reasonably acceptable to ICANN, based on the most recent audit conducted by the International Foundation for Online Responsibility ("IFFOR") Ombudsman pursuant to Registry Operator's Compliance Reporting System in effect on the date hereof. In connection with such audit, Registry Operator shall ensure that the IFFOR Ombudsman conducts such audits quarterly for the first year and thereafter annually during the Term of this Agreement and delivers its findings or results of such audit in writing to Registry Operator. Registry Operator shall not amend its Compliance Reporting System to provide for less frequent IFFOR Ombudsman audits without ICANN's written consent.

Section 3.2 Covenants of ICANN. ICANN covenants and agrees with Registry Operator as follows:

(a) Open and Transparent. Consistent with ICANN's expressed mission and core values as set forth in its Bylaws, ICANN shall operate in an open and transparent manner.

(b) Equitable Treatment. ICANN shall not apply standards, policies, procedures or practices arbitrarily, unjustifiably, or inequitably and shall not single out Registry Operator for disparate treatment unless justified by substantial and reasonable cause.

(c) TLD Zone Servers. Following the Effective Date, in the event and to the extent that ICANN is authorized to set policy with regard to the Authoritative Root-Server System, it will use commercially reasonable efforts to ensure that (i) the authoritative root will point to the TLD zone servers designated by Registry Operator for the Registry TLD throughout the Term of this Agreement; and (ii) any changes to the TLD zone server designation submitted to ICANN by Registry Operator will be implemented by ICANN within seven days of submission.

(d) Nameserver Changes. Registry Operator may request changes in the nameserver delegation for the Registry TLD. Any such request must be made in a format, and otherwise meet reasonable technical requirements, specified from time to time by ICANN. ICANN will use reasonable best efforts to have such requests implemented in the Authoritative Root-Server System within seven calendar days of the submission.

(e) Root-zone Information Publication. ICANN's publication of root-zone contact information for the Registry TLD will include Registry Operator and its administrative and technical contacts. Any request to modify the contact information for the Registry Operator must be made in the format reasonably specified from time to time by ICANN.

ARTICLE IV TERM OF AGREEMENT

Section 4.1 Term. The initial term of this Agreement shall expire ten years from the Effective Date (as such term may be extended pursuant to Section 4.2, the "Expiration Date"). Registry Operator agrees that upon the earlier of (i) termination of this Agreement by ICANN in accordance with Article VI below or (ii) the Expiration Date, it will cease to be the Registry Operator for the TLD, unless, with respect to termination under the foregoing clause (ii), Registry Operator and ICANN agree on terms for renewal of the Agreement as set forth in Section 4.2 below prior to the Expiration Date.

Section 4.2 Renewal. This Agreement shall be renewed upon the expiration of the term set forth in Section 4.1 above and each renewal term, unless: (i) an arbitrator or court has determined that Registry Operator has been in fundamental and material breach of Registry Operator's obligations set forth in Sections 3.1(a), (b), (d), (e) or (h); Section 5.2 or Section 7.2 and (ii) following the final decision of such arbitrator or court, Registry Operator has failed to comply within ten days with the decision of the arbitrator or court, or within such other time period as may be prescribed by the arbitrator or court, provided, however, that Registry Operator agrees that any renewal of this Agreement is conditioned on its negotiation of renewal terms reasonably acceptable to ICANN, taking into account the terms of existing registry agreements with respect to similarly situated TLDs.

Section 4.3 Changes. While this Agreement is in effect, the parties agree to engage in good faith negotiations at regular intervals (at least once every three calendar years following the Effective Date) regarding possible changes to the terms of the Agreement, including, without limitation, to Section 7.2 regarding fees and payments to ICANN.

Section 4.4 Failure to Perform in Good Faith. In the event Registry Operator shall have been repeatedly and willfully in fundamental and material breach of Registry Operator's obligations set forth in Sections 3.1(a), (b), (d), (e) or (h); Section 5.2 or Section 7.2, and arbitrators in accordance with Section 5.1(b) of this Agreement have found Registry Operator to have been repeatedly in fundamental and material breach of this Agreement, then ICANN may request the arbitrators award such punitive, exemplary, or other damages as they may believe appropriate under the circumstances.

Notwithstanding the foregoing, ICANN is not precluded from seeking any other remedy available to it under this Agreement including seeking any available remedy from an arbitrator.

ARTICLE V DISPUTE RESOLUTION

Section 5.1 Resolution of Disputes.

(a) Cooperative Engagement. In the event of a disagreement between Registry Operator and ICANN arising under or out of this Agreement, either party may by notice to the other invoke the dispute resolution provisions of this Article V; provided, however, that before either party may initiate mediation and/or arbitration as provided in Sections 5.1(b) and 5.1(d) below, ICANN and Registry Operator must attempt to resolve the dispute by cooperative engagement as set forth in this Section 5.1(a). If either party provides written notice to the other demanding cooperative engagement as set forth in this Section 5.1(a), then each party will, within seven calendar days after such written notice is deemed received in accordance with Section 8.6 hereof, designate a single executive officer as its representative under this Section 5.1(a) with full authority to act on such party's behalf to resolve the dispute. The designated representatives shall, within 2 business days after being designated, confer by telephone or in person to attempt to resolve the dispute. If they are not able to resolve the dispute during such telephone conference or meeting, they shall further meet in person (the "In-Person Meeting") within 7 calendar days of the initial telephone conference or meeting, at a location reasonably designated by ICANN, at which meeting the parties shall attempt to reach a definitive resolution. The time schedule and process set forth in this Section 5.1(a) may be modified with respect to any dispute, but only if both parties agree to a revised time schedule or process in writing in advance. Settlement communications within the scope of this paragraph shall be inadmissible in any arbitration or litigation between the parties.

(b) Mediation. In the event the parties do not resolve any dispute through cooperative engagement within 5 business days of the In-Person Meeting, either party may elect to submit the matter to mediation within 3 business days of the expiration of such 5 business day period by providing written notice to the other party. If either party provides such written notice to the other demanding mediation (a "Mediation Notice"), then each party shall use commercially reasonable efforts to commence such mediation within 5 business days of receipt of such notice. Each party shall ensure that an executive officer of such party with full authority to act on such party's behalf to resolve the dispute shall attend and participate in such mediation. The mediation shall be (i) conducted in the English language and shall occur in Los Angeles County, California, USA, pursuant to rules and procedures determined by the parties in good faith, (ii) conducted with a single mediator mutually acceptable to the parties and (iii) limited to 1 calendar day in duration. The time schedule and process set forth in this Section 5.1(b) may be modified with respect to any dispute, but only if both parties agree to a revised time schedule or process in writing in advance. Settlement communications within the scope of this paragraph shall be inadmissible in any arbitration or litigation between the parties.

(c) Sanctions. If after submitting a dispute to mediation pursuant to Section 5.1(b) the parties are unable to agree to a resolution of such dispute or such mediation has not occurred for any reason not solely within ICANN's control within 30 calendar days of delivery of a Mediation Notice, ICANN may impose reasonable operational and/or monetary sanctions on Registry Operator. If Registry Operator objects to any such sanctions, Registry Operator may submit the matter to arbitration pursuant to Section 5.1(d) and such sanctions shall not take effect until the final resolution of such arbitration.

(d) Arbitration. Disputes arising under or in connection with this Agreement, including requests for specific performance, shall be resolved through binding arbitration conducted as provided in this Section 5.1(d) pursuant to the rules of the International Court of Arbitration of the International Chamber of Commerce ("ICC"). The arbitration shall be conducted in the English language and shall occur in Los Angeles County, California, USA only following the failure to resolve the dispute pursuant to cooperative engagement discussions and, if elected by either party, mediation as set forth in Sections 5.1(a) and 5.1(b) above. There shall be three arbitrators: each party shall choose one arbitrator and, if the two arbitrators are not able to agree on a third arbitrator, the ICC shall choose the third. The prevailing party in the arbitration shall have the right to recover its costs and reasonable attorneys' fees, which the arbitrators shall include in their awards. Any party that seeks to confirm or vacate an arbitration award issued under this Section 5.1(b) may do so only pursuant to the applicable arbitration statutes. In any litigation involving ICANN concerning this Agreement, jurisdiction and exclusive venue for such litigation shall be in a court located in Los Angeles County, California, USA; however, the parties shall also have the right to enforce a judgment of such a court in any court of competent jurisdiction. For the purpose of aiding the arbitration and/or preserving the rights of the parties during the pendency of an arbitration, the parties shall have the right to seek a temporary stay or injunctive relief from the arbitration panel or a court, which shall not be a waiver of this agreement to arbitrate.

Section 5.2 Specific Performance. Registry Operator and ICANN agree that irreparable damage could occur if any of the provisions of this Agreement was not performed in accordance with its specific terms. Accordingly, the parties agree that they each shall be entitled to seek from the arbitrators specific performance of the terms of this Agreement (in addition to any other remedy to which each party is entitled).

Section 5.3 Limitation of Liability. ICANN's aggregate monetary liability for violations of this Agreement shall not exceed the amount of Registry-Level Fees paid by Registry Operator to ICANN within the preceding twelve-month period pursuant to Section 7.2 of this Agreement. Registry Operator's aggregate monetary liability to ICANN for violations of this Agreement shall be limited to an amount equal to the fees set forth in Section 7.2 below for the preceding 12 months or, in the case of Section 4.4, the monetary sanctions due and owing to ICANN under this Agreement. In no event shall either party be liable for special, indirect, incidental, punitive, exemplary, or consequential damages arising out of or in connection with this Agreement or the performance or nonperformance of obligations undertaken in this Agreement, except as provided pursuant to Section 4.4 of this Agreement. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, REGISTRY OPERATOR DOES NOT MAKE ANY WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE SERVICES RENDERED BY ITSELF, ITS SERVANTS, OR ITS AGENTS OR THE RESULTS OBTAINED FROM THEIR WORK, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF MERCHANTABILITY, NON-INFRINGEMENT, OR FITNESS FOR A PARTICULAR PURPOSE.

ARTICLE VI TERMINATION PROVISIONS

Section 6.1 Termination.

(a) Termination by ICANN. ICANN may terminate this Agreement if Registry Operator fails to cure any fundamental and material breach of Registry Operator's obligations set forth in Sections 3.1(a), (b), (d) or (e); Section 5.2 or Section 7.2 despite notice and a reasonable opportunity to cure in accordance with Section 6.3.

(b) Termination by Registry Operator. Registry Operator may terminate this Agreement and its designation as Registry Operator for the TLD pursuant to 120 days prior notice in writing to ICANN, and subject to compliance with Section 6.4 hereof.

Section 6.2 Bankruptcy. ICANN may, upon notice to Registry Operator, terminate this Agreement if (i) Registry Operator makes an assignment for the benefit of creditors or similar act, (ii) attachment, garnishment or similar proceedings are commenced against Registry Operator and not dismissed within 60 days, (iii) a trustee, receiver, liquidator or equivalent is appointed over Registry Operator or over any of its property, (iv) execution is levied upon any property of Registry Operator, (v) proceedings are instituted by or against Registry Operator under any bankruptcy, insolvency, reorganization or other laws relating to the relief of debtors and not dismissed within 60 days, or (vi) Registry Operator liquidates, dissolves or otherwise discontinues its operations or the operation of the TLD.

Section 6.3 Notice; Opportunity to Cure. This Agreement may be terminated in the circumstances described in Section 6.1(a) above only following written notice to Registry Operator and Registry Operator's failure to cure within 30 days after the conclusion of cooperative engagement pursuant to Section 5.1(a) above and, if elected by either party, mediation pursuant to Section 5.1(b) above or such other reasonably prescribed time period following receipt of notice hereunder, with Registry Operator being given a reasonable opportunity during that time to initiate arbitration under Section 5.1(b) to determine the appropriateness of termination under this Agreement. In the event Registry Operator initiates arbitration concerning the appropriateness of termination by ICANN, Registry Operator may at the same time request that the arbitration panel stay the termination until the arbitration decision is rendered, and that request shall have the effect of staying the termination until the decision or until the arbitration panel has granted an ICANN request for lifting of the stay.

Section 6.4 Transition of Registry upon Termination of Agreement. Upon any expiration of this agreement as provided in Section 4.2 or termination of this Agreement as provided in Sections 6.1 or 6.2, the parties agree to work cooperatively to facilitate and implement the transition of the registry for the TLD in accordance with this Section 6.4. Registry Operator agrees to provide ICANN or any successor registry authority that may be designated for the TLD with any Registry Data or other data regarding operations of the registry for the TLD necessary to maintain operations that may be reasonably requested by ICANN or such successor registry authority in addition to the Registry Data escrowed in accordance with Section 3.1(c)(i) hereof.

Section 6.5 Rights in Data. Registry Operator shall not be entitled to claim any intellectual property rights in Registry Data. In the event that Registry Data is released from escrow as set forth in Section 3.1(c)(i), rights, if any, held by Registry Operator in the data shall automatically be licensed on a non-exclusive, irrevocable, royalty-free, paid-up basis to ICANN or to a party designated in writing by ICANN, provided, however, that such release shall not effect a transfer of any intellectual property rights of Registry Operator other than (a) the Registry Data itself and (b) any intellectual property rights reasonably necessary for the transition and operation of the TLD pursuant to Section 6.4.

Section 6.6 No Reimbursement. Any and all expenditures, capital investments or other investments made by Registry Operator in connection with this Agreement shall be at Registry Operator's own risk and ICANN shall have no obligation to reimburse Registry Operator for any such expense, capital expenditure or investment. Registry Operator shall not be required to make any payments to a successor registry operator by reason of registry fees paid to Registry Operator prior to the effective date of (i) any termination or expiration of this Agreement or (ii) transition of the registry, unless any delay in transition of the registry to a successor operator shall be due to the actions of Registry Operator.

ARTICLE VII SPECIAL PROVISIONS

Section 7.1 Registry-Registrar Agreement.

(a) Access to Registry Services. Registry Operator shall make access to Registry Services, including the shared registration system, available to ICANN accredited registrars. The criteria for the selection of registrars shall be as set forth in Appendix S. Following execution of the Registry-Registrar Agreement between Registry Operator and the ICANN-accredited registrar, and subject to such registrar's compliance with the Registry-Registrar Agreement, Registry Operator shall provide operational access to Registry Services, including the shared registration system for the TLD. Such nondiscriminatory access to such registrars shall include without limitation the following:

    (i) All registrars (including any registrar affiliated with Registry Operator) can connect to the shared registration system gateway for the TLD via the Internet by utilizing the same maximum number of IP addresses and SSL certificate authentication;

    (ii) Registry Operator has made the current version of the registrar toolkit software accessible to all registrars and has made any updates available to all registrars on the same schedule;

    (iii) All registrars have the same level of access to customer support personnel via telephone, e-mail and Registry Operator's website;

    (iv) All registrars have the same level of access to registry resources to resolve registry/registrar or registrar/registrar disputes and technical and/or administrative customer service issues;

    (v) All registrars have the same level of access to data generated by Registry Operator to reconcile their registration activities from Registry Operator's Web and ftp servers;

    (vi) All registrars may perform basic automated registrar account management functions using the same registrar tool made available to all registrars by Registry Operator; and

    (vii) The shared registration system does not include, for purposes of providing discriminatory access, any algorithms or protocols that differentiate among registrars with respect to functionality, including database access, system priorities and overall performance.

Such Registry-Registrar Agreement may be revised by Registry Operator from time to time, provided however, that any such revisions must be approved in advance by ICANN.

(b) Registry Operator Shall Not Act as Own Registrar. Registry Operator shall not act as a registrar with respect to the TLD. This shall not preclude Registry Operator from registering names within the TLD to itself through a request made to an ICANN-accredited registrar.

(c) Restrictions on Acquisition of Ownership or Controlling Interest in Registrar. Registry Operator does not own, control, or possess an ownership interest in any ICANN accredited registrar. Registry Operator shall not acquire, directly or indirectly, control of, or a greater than fifteen percent ownership interest in, any ICANN-accredited registrar, without ICANN's prior approval in writing, which approval shall not be unreasonably withheld.

Section 7.2 Fees to be Paid to ICANN.

(a) Payment Schedule. Registry shall pay the Registry-Level Fees specified in Sections 7.2(b), (c), and (d) below, and Section 7.2(e), if applicable, by the 20th day following the end of each calendar quarter (i.e., on April 20, July 20, October 20 and January 20 for the calendar quarters ending March 31, June 30, September 30 and December 31) of the year to an account designated by ICANN. The first quarterly payment of the Minimum Registry-Level Fee shall be pro-rated from the Limited Launch Date until the end of the calendar quarter in which the Limited Launch occurs. The Fixed Registry-Level Fee shall commence as specified in paragraph (b) below.

(b) Fixed Registry-Level Fee. Commencing on the Effective Date, Registry Operator shall pay ICANN a quarterly Fixed Registry-Level Fee in an amount equal to US $2,500 for each calendar quarter. Such fee is subject to increase on October 1 of each year thereafter, in an amount established by ICANN's Board of Directors, but not to exceed a sum equal to 115% of the prior year's fee. Following the date of Limited Launch specified in paragraph (d) below, the Minimum Registry-Level Fees shall apply in lieu of the Fixed Registry-Level Fee.

(c) Registry-Level Transaction Fee. Commencing as of the Effective Date, Registry Operator shall pay ICANN a Registry-Level Transaction Fee in an amount equal to US$2.00 for each annual increment of an initial or renewal (including renewals associated with transfers from one ICANN-accredited registrar to another) domain name registration during the calendar quarter to which the Registry-Level Transaction Fee pertains. For purposes of this Section 7.2(c), a "domain name registration" shall include a domain name within the registry for the TLD, whether consisting of two or more (e.g., john.doe.name) levels, about which Registry Operator or an affiliate thereof maintains Registry Data on behalf of Registry Operator.

(d) Minimum Registry-Level Fees. The total Registry-Level Transaction Fees owed by Registry Operator under paragraph (c) above shall in no case be less than US $90,000 per rolling twelve month period, commencing as of the date on which Registry Operator actually first begins accepting registrations from ICANN Accredited Registrars (the "Limited Launch").

(e) Variable Registry-Level Fee. For fiscal quarters in which ICANN does not collect a variable accreditation fee from all registrars, upon receipt of reasonable notice in writing from ICANN of not less than 45 days, Registry Operator shall pay ICANN a Variable Registry-Level Fee. The fee will be calculated by ICANN, paid to ICANN by Registry Operator in accordance with the Payment Schedule in Section 7.2(a), and Registry Operator will invoice and collect the fees from the registrars who are party to a Registry-Registrar Agreement with Registry Operator. The fee will consist of two components; each component will be calculated by ICANN for each registrar:

(i) The transactional component of the Variable Registry-Level Fee shall be specified by ICANN in accordance with the budget adopted by the ICANN Board of Directors for each fiscal year but shall not exceed eighty percent (80%) of the registrar level transaction fee as established pursuant to the approved 2004-2005 ICANN Budget.

(ii) The per-registrar component of the Variable Registry-Level Fee shall be specified by ICANN in accordance with the budget adopted by the ICANN Board of Directors for each fiscal year, but the sum of the per-registrar fees calculated for all registrars shall not exceed the total Per-Registrar Variable funding established pursuant to the approved 2004-2005 ICANN Budget.

(f) Adjustments to Fees. Notwithstanding any of the fee limitations set forth in this Article VII, commencing upon the expiration of the first year of this Agreement, and upon the expiration of each year thereafter during the Term, the then current fees set forth in Section 7.2(b), (c), (d) and (e) may be adjusted, at ICANN's discretion, by a percentage equal to the percentage change, if any, in (i) the Consumer Price Index for All Urban Consumers, U.S. City Average (1982-1984 = 100) published by the United States Department of Labor, Bureau of Labor Statistics, or any successor index (the "CPI") for the month which is one (1) month prior to the commencement of the applicable year, over (ii) the CPI published for the month which is one (1) month prior to the commencement of the immediately prior year. In the event of any such increase, ICANN shall provide notice to Registry Operator specifying the amount of such adjustment. Any fee adjustment under this Section 7.2(f) shall be effective as of the first day of the year in which the above calculation is made.

(g) Interest on Late Payments. For any payments ten days or more overdue, Registry Operator shall pay interest on late payments at the rate of 1.5% per month or, if less, the maximum rate permitted by applicable law.

ARTICLE VIII MISCELLANEOUS

Section 8.1 Indemnification of ICANN. Registry Operator shall indemnify, defend, and hold harmless ICANN (including its directors, officers, employees, and agents) from and against any and all claims, damages, liabilities, costs, and expenses, including reasonable legal fees and expenses, arising out of or relating to: (a) the selection of Registry Operator to operate the registry for the TLD; (b) ICANN's reliance, in connection with its decision to delegate the TLD to Registry Operator or to enter into this Agreement, on information provided by Registry Operator in its application; (c) Registry Operator's establishment or operation of the registry for the TLD; (d) Registry Operator's provision of Registry Services; (e) collection or handling of Personal Data by Registry Operator; (f) any dispute concerning registration of a domain name within the domain of the TLD for the registry; and (g) duties and obligations of Registry Operator in operating the registry for the TLD; provided that, Registry Operator shall not be obligated to indemnify, defend, or hold harmless ICANN to the extent the claim, damage, liability, cost, or expense arose due to a breach by ICANN of any obligation contained in this Agreement. For avoidance of doubt, nothing in this Section 8.1 shall be deemed to require Registry Operator to reimburse or otherwise indemnify ICANN for the costs associated with the negotiation or execution of this Agreement, or with the monitoring or management of the parties' respective obligations under this Agreement. Further, this section shall not apply to any request for attorney's fees in connection with any litigation or arbitration between or among the parties.

Section 8.2 Indemnification Procedures. If any third-party claim is commenced that is indemnified under Section 8.1 above, notice thereof shall be given by ICANN as promptly as practicable. Registry Operator shall be entitled, if it so elects, in a notice promptly delivered to ICANN, to immediately take control of the defense and investigation of such claim and to employ and engage attorneys reasonably acceptable to the indemnified party to handle and defend the same, at the indemnifying party's sole cost and expense, provided that (a) in all events ICANN shall be entitled to control at its sole cost and expense the litigation of issues concerning the validity or interpretation of ICANN policies or conduct, and (b) in the event of an indemnified claim brought in connection with an Independent Review Panel (as such term is defined in the ICANN Bylaws), ICANN shall be entitled to control the defense of such claim using its attorneys at the reasonable cost and expense of Registry Operator. ICANN shall cooperate, at its own cost, in all reasonable respects with Registry Operator and its attorneys in the investigation, trial, and defense of any Registry Operator controlled claim and any appeal arising therefrom; provided, however, that the indemnified party may, at its own cost and expense, participate, through its attorneys or otherwise, in such investigation, trial and defense of such claim and any appeal arising therefrom. No settlement of a claim that involves a remedy affecting ICANN other than the payment of money in an amount that is indemnified shall be entered into without the consent of ICANN. If Registry Operator does not assume full control over the defense of a claim subject to such defense in accordance with this Section, Registry Operator may participate in such defense, at its sole cost and expense, and ICANN shall have the right to defend the claim in such manner as it may deem appropriate, at the cost and expense of Registry Operator. In the event ICANN elects to retain control over the defense of an indemnified claim as permitted in this Section 8.2, ICANN hereby agrees that it will keep Registry Operator, through its designated legal representative, reasonably apprised of the status and progress of its defense, and further agrees that it will not settle such claim in a manner that requires Registry Operator to pay monetary damages without the consent of Registry Operator (not to be unreasonably withheld). ICANN further acknowledges and agrees that it will work with Registry Operator in good faith to minimize Registry Operator's liability for indemnification of any indemnifiable claims brought in connection with an Independent Review Panel.

Section 8.3 No Offset. All payments due under this Agreement shall be made in a timely manner throughout the term of this Agreement and notwithstanding the pendency of any dispute (monetary or otherwise) between Registry Operator and ICANN.

Section 8.4 Use of ICANN Name and Logo. ICANN grants to Registry Operator a non-exclusive royalty-free license to state that it is designated by ICANN as the Registry Operator for the Registry TLD and to use the ICANN logo to signify that Registry Operator is an ICANN-designated registry authority. The licensed logo is specified by ICANN on its website at www.icann.org, and ICANN may change the logo specifications following reasonable advance notice in writing to Registry Operator of any such change. This license may not be assigned or sublicensed by Registry Operator.

Section 8.5 Assignment and Subcontracting. Any assignment of this Agreement shall be effective only upon written agreement by the assignee with the other party to assume the assigning party's obligations under this Agreement. Moreover, neither party may assign this Agreement without the prior written approval of the other party, which shall not be unreasonably withheld. Notwithstanding the foregoing, (i) ICANN may assign this Agreement in conjunction with a reorganization or re-incorporation of ICANN, to another nonprofit corporation organized for the same or substantially the same purposes, or (ii) Registry Operator may assign this Agreement in conjunction with a reorganization or re-incorporation into a legal entity organized for the same or substantially the same purposes, provided that such reorganization or re-incorporation does not constitute or result in a Change in Control Transaction (as defined in Part 7 of Appendix S to this Agreement). Registry Operator must provide notice to ICANN of any subcontracting arrangements, and any agreement to subcontract portions of the operations of the TLD must mandate compliance with all covenants, obligations and agreements by Registry Operator hereunder. Any subcontracting that results in the outsourced provision of relevant technical operations shall provide that the subcontracted entity become party to the data escrow agreement mandated by Section 3.1(c)(i) hereof.

Section 8.6 Amendments and Waivers. No amendment, supplement, or modification of this Agreement or any provision hereof shall be binding unless executed in writing by both parties. No waiver of any provision of this Agreement shall be binding unless evidenced by a writing signed by the party waiving compliance with such provision. No waiver of any of the provisions of this Agreement or failure to enforce any of the provisions hereof shall be deemed or shall constitute a waiver of any other provision hereof, nor shall any such waiver constitute a continuing waiver unless otherwise expressly provided.

Section 8.7 No Third-Party Beneficiaries. This Agreement shall not be construed to create any obligation by either ICANN or Registry Operator to any non-party to this Agreement, including any registrar or registered name holder.

Section 8.8 Notices, Designations, and Specifications. All notices to be given under or in relation to this Agreement shall be given either (i) in writing at the address of the appropriate party as set forth below or (ii) via facsimile or electronic mail as provided below, unless that party has given a notice of change of postal or email address, or facsimile number, as provided in this agreement. Any change in the contact information for notice below shall be given by the party within 30 days of such change. Any notice required by this Agreement shall be deemed to have been properly given (i) if in paper form, when delivered in person or via courier service with confirmation of receipt or (ii) if via facsimile or by electronic mail, upon confirmation of receipt by the recipient's facsimile machine or email server, provided that such notice via facsimile or electronic mail shall be followed by a copy sent by regular postal mail service within two (2) business days. Whenever this Agreement shall specify a URL address for certain information, Registry Operator shall be deemed to have been given notice of any such information when electronically posted at the designated URL. In the event other means of notice shall become practically achievable, such as notice via a secure website, the parties shall work together to implement such notice means under this Agreement.

If to ICANN, addressed to:

Internet Corporation for Assigned Names and Numbers
4676 Admiralty Way, Suite 330
Marina Del Rey, California 90292
Telephone: 1/310/823-9358
Facsimile: 1/310/823-8649
Attention: President and CEO
With a Required Copy to: General Counsel
Email: As specified from time to time.

If to Registry Operator, addressed to:

ICM Registry LLC
PO Box 30129
Palm Beach Gardens, Florida 33420
Attention: Stuart Lawley, CEO
Telephone: As specified from time to time
Facsimile: As specified from time to time
Email: stuart@icmregistry.com

With a Required Copy to:

J. Beckwith Burr
Wilmer Cutler Pickering Hale and Dorr LLP
1875 Pennsylvania Avenue NW
Washington, DC 20016

Telephone: 1/202/663-6000
Facsimiles: 1/202/663-6363
Email: beckwith.burr@wilmerhale.com

Section 8.9 Severability. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. If the final judgment of a court of competent jurisdiction declares that any term or provision hereof is invalid or unenforceable, the parties hereto agree that the court making such determination shall have the power to limit the term or provision, to delete specific words or phrases or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as so modified. In the event such court does not exercise the power granted to it in the prior sentence, the parties hereto agree to replace such invalid or unenforceable term or provision with a valid and enforceable term or provision that will achieve, to the extent possible, the purposes of such invalid or unenforceable term.

Section 8.10 Language. Notices, designations, determinations, and specifications made under this Agreement shall be in the English language.

Section 8.11 Counterparts. 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.

Section 8.12 Entire Agreement. This Agreement (including its Appendices, which form a part of it) constitutes the entire agreement of the parties hereto pertaining to the operation of the TLD and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, between the parties on that subject. In the event of a conflict between the provisions in the body of this Agreement and any provision in its Appendices, the provisions in the body of the Agreement shall control.

 

[signature page follows]

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized representatives.

INTERNET CORPORATION FOR ASSIGNED NAMES AND NUMBERS

By: _____________________________
John Jeffrey
General Counsel and Secretary

Date: [31 March 2011]

ICM Registry LLC

By: _____________________________
Stuart Lawley, President & CEO

Date: 30 March 2011