The Sponsoring Organization's contribution to ICANN shall be the sum of:
1. Fixed Annual Contribution. The fixed annual contribution shall be an amount established by the ICANN Board of Directors, in conformity with the ICANN bylaws and articles of incorporation, not to exceed the maximum fixed annual contribution described in item 4 below.
2. Variable Annual Contribution. The variable annual contribution shall be in an amount calculated according to a formula and method established from time to time by the ICANN Board of Directors, in conformity with the ICANN bylaws and articles of incorporation. The formula and method shall allocate the total of all variable annual fees and contributions among all TLDs sponsored or operated under a sponsorship or registry agreement with ICANN (whether the fee or contribution is collected at the registry or registrar level) based on the relative size of the registries for those TLDs. It shall be permissible for the formula and method so established (a) to measure the size of a TLD's registry by the number of names under administration within the TLD by the registry's operator, (b) to deem the number of domain names under administration within the Registry TLD to be the number of Registered Names, (c) to provide for a deduction in computing a sponsor's or operator's variable annual fee or contribution of some or all of that sponsor's or operator's fixed annual component. It shall also be permissible for the formula and method to consider accreditation fees collected from registrars as a credit applied to the variable annual fee or contribution for the TLD to which the fees pertain. Groups of registries for two or more TLDs (whether or not under agreement) may, with the agreement of their sponsors or operators and ICANN, agree to allocate the variable fees and contributions collected from them in a manner not based on the relative size of the registries within the group, provided that the combined variable fees and contributions collected for all TLDs within the group is based on the combined size of the registries in the group.
3. Payment Schedule. The Sponsoring Organization shall pay the fixed and variable annual contributions in one or more installments, as reasonably established for each year by ICANN. These payments shall be made in a timely manner throughout the Term of this Agreement and notwithstanding the pendency of any dispute between the Sponsoring Organization and ICANN. The Sponsoring Organization shall pay interest on payments not timely made at the rate of 1% per month or, if less, the maximum rate permitted by California law.
4. Contribution Caps. The maximum
fixed annual contribution shall be US$5,000 per year until and including
30 June 2002; shall automatically increase by 15% on July 1 of each year
beginning in 2002; and may be increased by a greater amount in the manner
provided by Section 5.1. The sum of the fixed and variable
annual fees contributions due to be paid in any year ending on any 30
June during or within one year after the Term of this Agreement by all
TLD sponsors and registry operators having registry or sponsorship agreements
with ICANN shall not exceed the total annual fee cap described in the
following sentence. The total annual fee cap shall be US$5,500,000 for
the fiscal year ending 30 June 2002; shall increase by 15% each fiscal
year thereafter; and may be increased by a greater amount in the manner
provided by Section 5.1.
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