Form 1023 (Appendix 19)


This Loanout Agreement (this "Agreement") is made and entered into as of this 1st day of January, 1999, by and between the UNIVERSITY OF SOUTHERN CALIFORNIA, a California nonprofit public benefit corporation ("USC"), and the INTERNET CORPORATION FOR ASSIGNED NAMES AND NUMBERS, a California nonprofit public benefit corporation ("ICANN").

1. LOANOUT. ICANN hereby engages USC to furnish, and USC hereby agrees to furnish to ICANN, the services of those two employees listed on Schedule A on a full-time basis ("Full-time Employees") and those two employees listed on Schedule B on a part-time basis ("Part-time Employees") (collectively, the "Employees") to carry out the function of ICANN, on the basis of the terms and conditions set forth in this Agreement, provided, however, that termination of any Employee's employment with USC for any reason shall terminate USC's obligation to furnish such Employee's services to ICANN under this Agreement.

1.1 Part-time Employees. USC will furnish the Part-time Employees to ICANN for such periods of time as are reasonably necessary from time to time to assist in carrying out the function of ICANN, as mutually agreed from time to time between the parties.

1.2 Conflict of Interest. The Employees will be required to abide by USC's conflict of interest policies in the identification and management of actual and potential conflicts in the relationship between USC and ICANN.

1.3 Additional Personnel. USC will not provide ICANN with any additional personnel under this Agreement. All new personnel required by ICANN after the date of this Agreement will be employed as ICANN employees from the outset.

1.4 Transition to ICANN Employment. USC and ICANN will encourage the Full-Time Employees to transfer their respective employment relationships from USC to ICANN.

1.5 Supervision and Direction. ICANN will be responsible for all discretionary decision-making and all technical oversight and supervision of the Employees. USC will have no right or responsibility to direct or supervise the Employees.

2. COMPENSATION. As full and complete compensation for the services rendered by the Employees, ICANN agrees to pay USC all fully loaded costs for the Employees, including all salaries and benefits; provided that such costs for the Part-Time Employees shall be prorated between USC and ICANN on the basis of the respective percentages of full-time employment devoted to each respective entity. ICANN shall pay USC for such costs no later than thirty (30) days following ICANN's receipt of USC's invoice therefor. All payments made under this Section 2 shall be paid in US dollars by check drawn on a US bank, and checks shall be made payable to the "University of Southern California."


3.1 Indemnification by ICANN. ICANN shall indemnify and hold USC harmless from and against any and all loss, damage, deficiency, cost, expense, liability or judgment incurred or suffered by USC, including without limitation interest, penalties and reasonable attorneys' fees; from or arising out of the actions of the Employees while under the supervision and direction of ICANN.

3.2 Procedure. USC shall give prompt written notice to ICANN in the event it obtains knowledge of any claim or event which could give rise to a claim by USC against ICANN pursuant to such indemnity, stating the nature and basis of such claim or event and the amount thereof, and ICANN shall have the obligation to defend against each such claim, , provided, however, that the failure to so notify shall not relieve ICANN of its responsibilities hereunder except to the extent ICANN has been prejudiced in a material respect. During the course of any third-party claim or proceeding defended against by ICANN, ICANN shall keep USC fully informed with regard to such claim or proceeding, use all reasonable efforts to defend such claim or proceeding and present any reasonable defense and employ any reasonable tactic suggested by USC, its counsel or its accountants. USC shall have the right to be represented at any such claim or proceeding by legal counsel and accountants of its choosing. ICANN shall have the right at any time, without the consent of USC, to settle or compromise any claim or proceeding by any third party, provided, however, that no settlement or compromise which would have any effect upon the assets, operations, reputation or goodwill of USC shall be made without the prior written consent of USC. ICANN and USC agree to use their respective best efforts to cooperate with each other in connection with the defense of any claim or proceeding contemplated by this Section.

3.3 Insurance. ICANN shall, throughout the term of this Agreement, obtain and maintain at its own cost and expense from a Best's rated A, class 10 or better insurance company and which is licensed to do business in the state of California, liability insurance, including general comprehensive liability, property, professional liability and directors and officers liability in amounts satisfactory to USC. ICANN shall name USC as an additional insured under its policies of general and professional liability insurance for so long as this Agreement continues and such policies shall preclude termination of coverage without thirty (30) days' prior written notice to USC. ICANN shall from time to time upon request by USC furnish USC with certificates of insurance evidencing such insurance.


4.1 Term. The term of this Agreement shall commence as of execution and shall continue for a period of one year after execution. Thereafter, the term of this Agreement shall extend automatically for successive renewal periods of one year unless either party delivers written notice to the other party at least ninety (90) days prior to the last day of the current renewal period.

4.2 Termination. This Agreement may be terminated at any time as follows:

(a) By mutual agreement in writing of the parties hereto;

(b) By USC, if ICANN shall fail, neglect or refuse to fulfill its obligations under Section 2 hereof for a period of ten (10) or more days after receipt of notice thereof; or

(c) By USC, if ICANN shall fail, neglect or refuse to fulfill any of its obligations other than under Section 2 hereof for a period of thirty (30) or more days after receipt of notice thereof.

4.3 Effect of Termination. If this Agreement is terminated for any reason under Section 4.2, the parties shall have no further obligations hereunder after the effective date of termination, other than under Sections 3.1 and 3.2 hereof, which shall fully survive termination for any reason; provided that such termination shall have no effect upon the obligations of either party accrued as of the effective date of termination.

4.4 Termination of Employee's Services by ICANN. ICANN may terminate USC's obligation to furnish the services of any Employee hereunder upon thirty (30) days' prior written notice to USC. After the date of such termination, the person terminated under this Section 4.4 shall no longer be deemed an Employee for purposes of this Agreement.


5.1 Severability. If any term or provision of this Agreement is for any reason held to be invalid, such invalidity shall not affect any other term or provision, and this Agreement shall be interpreted as if such term or provision had never been contained in this Agreement.

5.2 Waiver. No waiver of any of the terms of this Agreement shall be valid unless in writing and signed by both parties. Failure by either party to enforce any rights under this Agreement shall not be construed as a waiver of such rights, and a waiver by either party of a default in one or more instances shall not be construed as a continuing waiver or as a waiver in other instances.

5.3 Assignment. Without the prior written consent of USC, ICANN shall not directly or indirectly assign, transfer, convey or encumber any of its rights under this Agreement. Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the respective successors and assigns of USC and ICANN. USC shall have the absolute, unfettered right to transfer this Agreement and its rights and obligations hereunder to any third party upon notice to ICANN.

5.4 Governing Law. This Agreement shall be construed in accordance with and all disputes hereunder shall be governed by the laws of the State of California.

5.5 Controversy. All controversies, claims, and disputes arising in connection with this Agreement shall be settled by mutual consultation between the parties in good faith as promptly as possible, but failing an amicable settlement shall be settled finally by arbitration in accordance with the provisions of this Section 5.5. Such arbitration shall be conducted in Los Angeles, California, in accordance with the Commercial Arbitration Rules of the American Arbitration Association ("AAA").

(a) Exclusivity. The parties hereto hereby agree that the arbitration procedure provided for herein shall be the sole and exclusive method of resolving any and all of the aforesaid controversies, claims, or disputes.

(b) Decision by Arbitrator. The parties shall each submit a list of ten (10) proposed arbitrators to the other party hereto within thirty (30) days after receipt of notice of arbitration of any dispute hereunder. Thereafter the parties shall have an additional thirty (30) days in which to agree upon a single arbitrator to conduct the arbitration, taken from the lists so submitted. If the selected arbitrator is otherwise unavailable or if the parties cannot agree upon an arbitrator, one will be selected by the AAA. The arbitrator so selected shall make a final decision and award according to the terms and provisions of this Agreement and applicable law. Said decision shall set forth findings of fact and conclusions of law upon which the award is based. The arbitrator may select counsel to provide advice in preparation of such findings and conclusions, and on any point of law arising in the course of arbitration. Judgment upon the award may be entered in any court which has the jurisdiction over such matter in accordance with the provisions of Section 5.5(d) hereof.

(c) Costs and Expenses. The costs and expenses of the arbitration, including without limitation attorneys' fees, shall be borne by the parties in the manner determined by the arbitrator.

(d) Judicial Action. Legal action for (i) entry of judgment upon any arbitration award or (ii) adjudication of any controversy, claim or dispute arising from a breach or alleged breach of Section 5.5(a), (b) or (c) hereof may be heard or tried only in courts of the State of California for the County of Los Angeles or the Federal District Court for the Central District of California. Each of the parties hereto hereby waives any defense of lack of in personam jurisdiction of said courts and agrees that service of process in such action may be made upon each of them by mailing it certified or registered mail to the party being served at the address provided for in Secion 5.7 hereof. Both parties hereby submit to the jurisdiction of the court so designated, to the exclusion of any other courts which might have had jurisdiction apart form this Section 5.5, and agree that the prevailing party shall be entitled to recover from the non-prevailing party reasonable expenses, including without limitation attorney's fees.

5.6 Headings. The headings herein are for reference purposes only and shall not constitute a part hereof or be deemed to limit or expand the scope of any provision of this Agreement.

5.7 Notice. All notices to be given under this Agreement (which shall be in writing) shall be given at the respective addresses of the parties as set fourth above their respective signatures to this Agreement, unless notification of a change of address is given in writing. Any notice required by this Agreement shall be deemed to have been properly reveived when delivered in person or when mailed by registered or certified first class mail, return receipt requested, or by Federal Express to the address as given herein, or such addresses as may be designated from time to time during this term of this Agreement.

5.8 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.

5.9 Entire Agreement. This Agreement fully supersedes any and all prior agreements or understandings between the parties hereto or any of their respective affiliates with respect to the subject matter hereof, and no change in, modification of or addition, amendment or supplement to this Agreement shall be valid unless set forth in writing and signed and dated by both parties hereto subsequent to the execution of this Agreement.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in duplicate by their duly authorized representatives and to become effective as of the day and year first above written.


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