Memorandum of Understanding

This Memorandum OF Understanding ("MOU"), is entered into effective this September 28, 2000 ("Effective Date") by and between Novell, Inc., a Delaware corporation with principal offices at 122 East 1700 South, Provo, Utah 84606 (hereinafter referred to as "Novell") and Tucows, Inc., a Delaware corporation with principal offices at 535 Fifth Avenue, 17th Floor, New York, NY 10017 (hereinafter referred to as "Tucows"), for the purpose of setting forth the mutual intent of Novell and Tucows regarding a proposed agreement to be negotiated between them. Specifically, the parties desire to enter a relationship regarding the development and provision of systems infrastructure and support services by Tucows of a .dir top level domain name to be sponsored to ICANN by Novell, and the parties intend to submit a suitable proposal to ICANN to that end ("TLD Proposal"). In order to facilitate the negotiation process, the parties wish to set forth in this MOU their mutual intent regarding! a proposed comprehensive agreement or set of agreements.

1. Term Sheet. In order to facilitate further discussions, the parties have set forth in the Term Sheet attached hereto as Exhibit "A" certain statements regarding their current intentions with respect to elements of the Comprehensive Agreement.the TLD Proposal. The parties intend to be and will be bound to proceed with provision and acceptance of the Services, and as defined in the Term,any other matters contemplated by or related to the Term Sheet or the TLD Proposal, only upon final execution and delivery of the Agreement.a definitive written agreement ("Comprehensive Agreement"). Paragraphs 2 through 7 hereof (the "Binding Commitments") are binding upon the parties.

2. Costs and Expense of Negotiation. Each party shall bear its own costs and expenses with regard to all negotiations and activities relating to the subject of this MOU.

3. Protection of Information. To the extent that the parties desire to exchange confidential information pursuant to the negotiations contemplated hereby, the parties agree to execute and deliver to one another confidential disclosure agreement as may be reasonably required to protect the trade secrets and other proprietary rights of the parties ("CDA"). Thereafter, all materials exchanged or created in the course of negotiations shall be treated pursuant to and in accordance with the terms and conditions of the CDA. During the term of this MOU, the parties agree to use reasonable efforts to avoid public disclosure of either the fact or the substance of their negotiations except to the extent this MOU is necessarily included in the TLD Proposal filed by the parties with ICANN. No press release or public announcement shall be made concerning those negotiations without the prior approval of both parties, except as may be otherwise required by law in the opinion of counsel. If! negotiations result in a Comprehensive Agreement, the Comprehensive Agreement may contain further terms and conditions respecting confidentiality.

4. Limitation of Liability. Neither party shall make a claim against, or be liable to, the other party or its affiliates or agents for any damages, including (without limitation) lost profits or injury to business reputation, resulting from the continuation or abandonment of negotiations.

5.Term. This MOU shall be effective as of the Effective Date and shall continue until either party gives written notice of its intention to abandon further negotiations, or until superseded upon full execution of a Comprehensive Agreement. The provisions of the Binding Commitments shall survive the termination of this MOU in accordance with their terms. For example, the provisions of any CDA shall survive termination of this MOU in accordance with the termination provisions set forth therein (and subject to the survival provisions set forth therein).

6.Governing Law. It is mutually understood and agreed that this Agreement shall be understood and interpreted in all respects according to the law of the Sate of Utah,California, without regard for its laws governing conflicts of law. Furthermore, it is understood that this Agreement shall be treated as though it were executed in Utah County, Utah. San Jose, California.

7. Entire Agreement. This MOU represents the entire agreement between the parties. All agreement drafts, "term sheets," memoranda and other communications respecting the proposed arrangements, prepared or exchanged in the course of negotiations, even if signed by one or both parties, shall be considered only preliminary and shall have no legal effect unless subsequently incorporated into a Comprehensive Agreement.

If the above adequately sets forth your current intent respecting the scope of our negotiations and your agreement with respect to the Binding Commitments, please so indicate by signing below and returning to us one signed copy of this MOU.

Novell, Inc.

 

Signature:

Name:

Title:

Date:

Tucows, Inc.

 

Signature:

Name:

Title:

Date:

 

 

Exhibit A

1. ICANN Proposal. Tucows shall be responsible for the Registry Operatorís Proposal and the Registry Operatorís Fitness Disclosure, both of which shall accompany the remaining documentation and payments to be prepared and submitted by Novell in association with the application for the .dir gTLD.

2. The Services. The "Services" are systems infrastructure, software and support services that are designed for operation of the registry as a top level domain name.

3. Service Levels. Tucows will deliver the Services in a manner that, at a minimum, meets the minimum service expectations as set forth in the Registry Operatorís Proposal and the Registry Operatorís Fitness Disclosure Document.

4. Ownership. Neither party intends that the Comprehensive Agreement will change the ownership of any technology used in furtherance of the TLD Proposal.

5. Authorization. Under or by means of the Comprehensive Agreement, Tucows will receive authorization necessary under the TLD registry agreement with ICANN for the provision of the Services. Novell shall be responsible for all marketing and development efforts.

6. Redundancy and Security. Tucows shall ensure that the Services are provided from secure facilities. Tucows further agrees that in the event of the failure or corruption of those facilities, an alternative system shall be available to provide the Services.

7. Financial Obligations. At present, the parties expect that registrars will be charged a feeof $6.00 for each domain year registration in the .dir registry. Of this sum, Tucows shall receive $3.50retain a portion for each domain year registered in the .dir registry in consideration for the execution of its responsibilities hereunder..

8. Deconversion. In the event that Novell seeks to terminate the Agreement and designates an alternative company to perform the Services, Tucows shall continue to provide the Services and work with Novell in good faith to allow for a smooth transition. Notwithstanding the foregoing, the parties acknowledge that TucowsíNovell and Tucows will include appropriate terms in the Comprehensive obligations hereunder shall be predicated upon agreement by the parties as to the appropriate professional fees to be paid to Tucows in consideration for its services in association with any deconversion activity.Agreement under which Tucows would perform such transition services.

9. Indemnification. Tucows will indemnify Novell against claims resulting from (i) the failure of Tucows to meet the required Service levels and (ii) for claims resulting from Tucowsí negligence in developing and provision of the Services. The parties shall include such other indemnities as may be appropriate in the Agreement.