Proposed Terms for a Contract

 

between

 

SRI International, Inc.

 

NeuStar, Inc.

 

and

 

Melbourne IT Limited

 

For the provision of

 

Registry Services in Relation to Top Level Domain Names


Proposed Terms for a

Contract for the Provision of Registry Services

in Relation to

Top Level Domain Names

 

These Proposed Terms for a Contract for the Provision of Registry Services in Relation to Top Level Domain Names ("Term Sheet") state the current status of the discussions as of September 30,  2000, and provide a framework for negotiating a definitive agreement between SRI International, Inc., 333 Ravenswood Avenue, Menlo Park California 94025 ("SRI"); NeuStar, Inc., 1120 Vermont Avenue NW, Suite 550, Washington DC 20005 ("NS"), and Melbourne IT Limited, Level 2, 120 King Street, Melbourne Victoria 3000 ("MIT").

 

1.                  Background

1.1              SRI is preparing, and intends to file a proposal ("Proposal") with ICANN for the award of an accreditation to act as Sponsor and registry for a restricted TLD in response to ICANN's invitation of 15 August 2000 ("Accreditation").

1.2              Representatives of SRI, NS and MIT have been discussing a proposed transaction under which NS and MIT would provide all or some of the registry functions necessary for purposes of the proposed registry business ("Proposed Transaction").  These functions are described in more detail in Appendix 1 to this Term Sheet ("Registry Functions").

2.                  Non Binding Intent

2.1              This Term Sheet summarizes the current status of the discussions and provides a framework for negotiating a definitive agreement between SRI, NS and MIT with respect to the Proposed Transaction (the "Agreement").

2.2              The provisions of this Term Sheet shall not be binding on SRI, NS and/or MIT, and shall not be deemed to create any legal rights or obligations between SRI, NS and MIT, except for Sections 2, 3, 4, 10, 12, and 14.  The provisions of this Term Sheet are only intended to facilitate negotiations and preparation of the Agreement, if any.

2.3              The parties shall use good faith reasonable efforts to negotiate the Agreement, with the intent to finalize and execute the Agreement as soon as practicable after SRI has been awarded the Accreditation.  However, SRI, NS and/or MIT may discontinue such negotiations at any time by written notice to the other for any reason whatsoever.

2.4              Although it is the intent of the parties that their negotiations initially proceed based on the Term Sheet, the terms contained in the Term Sheet are subject to change in the course of the planned negotiations.

2.5              Neither party shall have any liability whatsoever to the other parties for its discontinuance of the negotiations or its decision for any reason not to enter into the Agreement.

2.6              Any proposed Agreement shall be subject to all required corporate approvals of SRI, NS and MIT.

2.7              Upon execution of the Agreement, if any, the provisions of this Letter of Intent and all prior discussions shall be superseded by the Agreement.

2.8              Notwithstanding Sections 2.3 and 2.5 above, if the parties are unable to reach agreement and SRI wishes to use a third party to provide Registry Functions or any part of them, SRI shall give NS and MIT a Right of First Refusal to match the proposed terms offered by such third part(ies) as follows.  For the purpose of this section 2.8, "Decision Date" shall mean the earlier of (1) three (3) months from the day when ICANN announces the award of the TLDs and (2) fifteen (15) days prior to the date set by ICANN as the last day for the TLD's to have entered into a final agreement to provide registry functions.

(a)                If on or before the Decision Date, NS and MIT have a final written and executed agreement for the provision of registry functions with another TLD awarded by ICANN through its New TLD Application Process, SRI shall present to NS and MIT a written agreement that contains the firm offer of a third party, which SRI is prepared to accept.  NS and MIT shall have seven (7) days from the day on which SRI presents such proposed firm offer, to return a final proposal embodying equal or equivalent terms under which NS and MIT will perform the request Registry Functions ("the NSMIT Counter").  SRI shall review the NSMIT Counter, and agrees not to reject the NSMIT Counter unless SRI determines in good faith that the proposed terms of the NSMIT Counter are not at least equivalent to those in the third party proposal.  If SRI agrees to the terms of the NSMIT Counter, SRI shall execute such document.  If SRI, in its reasonable discretion has rejected the NSMIT Counter, or if SRI has not received any NSMIT Counter, by midnight on the seventh day after SRI has delivered the proposed agreement to NS and MIT, SRI shall have the right to enter into the agreement with the third party on such third party terms.

(b)               If on the Decision Date NS and MIT do not have a final written and executed agreement with another TLD for the provision of registry functions, then the procedure immediately above in subsection (a) shall apply, however, when NS and MIT have provided SRI with the NSMIT Counter as set forth in subsection (a), SRI shall have the right to have an independent third party ("Consultant") evaluate NS and MIT's financial fitness to fulfill their obligation to SRI under the proposed agreement before deciding whether or not to agree to the NSMIT Counter.  Such evaluation will include at least an analysis of (i) operating budget viability; (ii) adequacy of capital structure; and (iii) management strength; and (iv) the extent that registry function are a significant strategic component of NS and/or MIT's business.  To perform the evaluation, SRI shall identify the Consultant amongst investment bankers, or other entities, as SRI deems appropriate.  NS and MIT, in good faith, shall approve of such choice within twenty-four (24) hours; such approval not to be unreasonably withheld or delayed.  If NS and MIT reject the Consultant, SRI shall present an other Consultant who shall again be subject to NS and MIT's reasonable approval.  SRI, NS and MIT agree to exercise their best efforts, in good faith, to identify and agree on a Consultant promptly in order not to delay this process.  The Consultant, once approved, shall perform the evaluation within seven (7) days of the appointment.  If the Consultant determines that NS and MIT will not have sufficient financial fitness to perform their obligations under the proposed agreement, SRI shall be entitled to enter into the registry services agreement with other proposed vendor(s) on the same terms as described in the third party firm offer that was the subject of the Right of First Refusal.

3.                  Expenses.  Each party shall bear its own expenses including, without limitation, internal expenses and overhead costs, expenses of all attorneys, accountants, advisors, consultants and brokers retained by or representing them in connection with the negotiation and consummation of the Proposed Transaction, the preparation of the Proposal, or the negotiations with ICANN with respect to the Proposal or the Accreditation.  Any actions taken by any party in reliance on this Letter of Intent shall be at such party’s sole risk and expense.

4.                  Prior Arrangements

4.1              This Term Sheet replaces all prior contracts, understandings and arrangements among SRI and NS and MIT or either of them with regard to the subject matter of this Term Sheet, except that the Non Disclosure Agreement dated August 23, 2000 shall survive.

4.2              SRI and NS have previously entered into a Nondisclosure Agreement dated August 23, 2000.  NS has represented to SRI, and MIT has acknowledged and agreed that MIT is also bound by the terms of the Non Disclosure Agreement of August 23, 2000.  The terms of the August 23, 2000 Non Disclosure Agreement are deemed incorporated into this Term Sheet.  By executing this Term Sheet, and in consideration for its continued participation in the Proposal, MIT confirms its understanding that it is bound by the terms of such Non-Disclosure Agreement.

4.3              By way of clarification of the Non-Disclosure Agreement of August 23, 2000, the following "Proprietary Material" shall be deemed protected as the "Confidential Information of SRI and/or NS-MIT, as applicable" (SRI and NS/MIT each a "Disclosing Party" when providing information and a "Receiving Party" when receiving information) under the terms of the Non-Disclosure Agreement:

(a)                whether or not they are marked or identified as "proprietary" or "confidential" or "competition sensitive":

(i)                  Any and all information or data that the Disclosing Party communicates orally, visually, on paper, in written, electronic, digital or other tangible form or media; or that can be acquired through observation, inspection, review, or analysis of the Disclosing Party's property, material, documents, software, technology, written memoranda, drawings, specifications, schematics, flowcharts, graphic representations, photographs, notebook entries, software, samples, or facilities, concerning or relating to the Proposal, and the Disclosing Party's operations or strategies with respect to the subject matter of the Proposal, including, without limitation, business plan, financial plan, marketing plan, research and development plan, market information, financial information, projections, strategic information, pricing and any other information or material relating to the "dot.geo" or "geoweb" project, or the registry services related thereto, or to the subject matter of the Proposal; and

(ii)                Any and all document, description, abstract, summary, or other material (in paper, electronic, digital, video, or other tangible form or media) that contains, summarizes, analyzes or relates to the information or material described in subsection (i) above, and any and all copies, abstracts, extracts or summaries thereof; and

(b)               all information, documents and all other material that a Disclosing Party discloses to a Receiving Party (i) in paper, electronic, digital or other tangible form and marked "confidential" or "proprietary" or "competition sensitive", or (ii) orally or through visual observation and designated as confidential or proprietary at the time of disclosure.

4.4              Each of SRI, NS and MIT agrees not to disclose at any time to any third party, whether by way of press release, announcement or in any other manner, without the prior written consent of the other party, the existence, intent or terms of this Term Sheet, or the occurrence or content of any discussions, negotiations or investigations which have occurred or which may occur regarding the Proposed Transaction.  However, either party may at any time make any disclosures required by law upon prior written notice to the other party provided that the disclosing party first gives the other party assistance as reasonably requested in obtaining an order protecting the information from disclosure.  Notwithstanding the foregoing, this Term Sheet will be part of the Proposal filed on October 2, 2000 with ICANN; however, the Proposal will contain a request that ICANN keep the terms and content of this Term Sheet confidential, and do not post the portion of the Proposal containing this Term Sheet on the ICANN website, or in any other public forum.

5.                  Assignment

5.1              SRI, NS and/or MIT may assign their rights and obligations under this Term Sheet or the Agreement to a third party, subject to the prior written approval of the other parties to the Term Sheet or to the Agreement, as applicable, whichever is in effect; such approval not to be unreasonably withheld or delayed.

5.2              Upon assignment, the assigning party shall have no further obligations under the assigned Term Sheet or Agreement, as applicable, unless otherwise provided in writing.

6.                  Proposal

6.1              NS and MIT shall be responsible for completing those portions of the Proposal that pertain to Registry Functions, and as otherwise mutually agreed between the parties, by no later than September 30, 2000.

6.2              SRI shall complete, edit, revise and prepare the final draft of the Proposal to ICANN in its reasonable discretion.  SRI shall review with NS and MIT those portions of the Proposal that pertain to the Registry Functions before filing the Proposal with ICANN.

6.3              SRI will use reasonable efforts to permit representatives of NS and MIT to attend and speak at meetings held between SRI and ICANN in connection with the Proposal and/or Accreditation, when such meetings pertain to the Registry Functions to be performed as part of the .geo TLD.  If representatives of NS and/or MIT do not attend such meetings, SRI will use reasonable efforts to provide to NS and MIT summaries of the information obtained during such meetings.  To the extent practicable, SRI shall consult with NS and/or MIT in advance with respect to modifications to the Proposal requested or suggested by ICANN, if they may have an effect on the Registry Functions.

7.                  Registry Services

7.1              Initial Period.  NS and MIT will be the sole supplier of the agreed upon Registry Functions to SRI for the awarded TLD during the period beginning on the date on which SRI, NS and MIT execute the Agreement and ending upon the termination of the initial TLD award to SRI.

7.2              Extended Term.  Upon the expiration of the initial period, if SRI is granted an extension of the award, SRI agrees to retain NS and/or MIT to provide such services, and NS and/or MIT agree to provide such services on terms substantially similar to those of the Agreement.  However, if SRI receives competitive proposals for such registry functions from third parties, SRI shall grant NS and MIT a right of first refusal, to be exercised not later than within seven (7) days after SRI submits to NS and/or MIT a final and firm offer from the third party.  If NS and/or MIT has not agreed to provide the registry services on such other terms, within the seven (7) day period, SRI shall have the right to use such third party's services.

7.3              NS and MIT shall manage all data relating to any registration, registrant or other information that NS or MIT receives from third parties as part of performing the Registry Functions or the Agreement, and all reports, summaries, abstracts, compilations or aggregation of such data (collectively "Registry Data") in accordance with the terms of the Agreement, which shall include the then-current ICANN principles.

7.4              Upon termination of the Agreement, NS and MIT shall promptly provide to SRI a copy of all Registry Data and any other information or data that NS or MIT might have received as part of the Registry Functions, or as part of the performance of the Agreement, and shall promptly destroy any such data, information or material from its computers, networks, and those of its employees or contractors, if any have been allowed to received access to such data under the Agreement.

7.5              NS and/or MIT may offer services similar to the Registry Functions to other entities, provided that at all times, NS and MIT provide to SRI not less than the level of service (e.g. by way of example, performance, response time, security, back up, disaster recovery) as described in the Agreement.

7.6              Each of NS and MIT shall install security measures to ensure that the Registry Data and the related databases are segregated from and not accessible though any database of any other entity for which NS or MIT acts as registrar or registry, or is otherwise performing functions similar to the Registry Functions, and from any other entity to which NS and/or MIT provides any services whatsoever.

8.                  Price.  NS and MIT shall provide Registry Functions to SRI at the price and under the terms and conditions to be agreed upon in the Agreement.

9.                  Marketing

9.1              SRI will develop and engage in a marketing program appropriate for the awarded TLD.  SRI will keep NS and MIT informed of its planned marketing activities to allow NS and MIT to forecast their needs for computing, storage, and data processing capabilities.

9.2              Neither NS nor MIT shall be responsible for the marketing of any aspect of the awarded TLD, nor for financing any portion of such activities, unless otherwise agreed in the Agreement.

10.              Confidentiality

10.1          In addition to the obligations set forth in the Non Disclosure Agreement of August 23, 2000, each of NS and MIT shall keep strictly confidential all Registry Data, and all information, data or material that each receives in connection with the preparation of the Proposal and the performance of the Agreement for the Registry Functions (collectively "SRI Proprietary Material"), and SRI shall keep confidential all information, data, or material that it receives from NS and/or MIT in connection with the preparation of the Proposal and the performance of the Agreement for the Registry Functions (collectively NS and/or MIT Proprietary Material).  Each of NS and MIT shall protect the SRI Proprietary Material, and SRI shall protect the NS and/or MIT Proprietary Material by using at least the same degree of care to prevent unauthorized use, disclosure, dissemination, publication, duplication as it uses to protect its own most valuable confidential or proprietary information, but not less than a reasonable degree of care.

10.2          NS or MIT may disclose the Registry Data pursuant to statutory or regulatory authority or a court order, provided SRI is given prompt prior written notice of such requirement with sufficient time to oppose such disclosure, and the scope of such disclosure is limited to the extent possible.

10.3          Subject to the other terms of the Agreement, each of SRI on one hand, and NS and MIT on the other hand shall use the Proprietary Materials of the other solely for the express purpose of performing under the Agreement.

11.              Scope of Use.  The Registry Functions contemplated under this Agreement are solely for the purpose of supporting SRI in providing registration service for the .geo TLD, if awarded to SRI.  If SRI wishes to receive Registry Functions for other TLDs, the parties shall negotiate a separate agreement.

12.              Intellectual Property

12.1          For the purpose of this Term Sheet, the term "Intellectual Property Rights means:  (a) all US and/or foreign patents, or any division, continuation, reissue, or extension thereof, and any applications (including provisional applications) therefor; (b) all trade secrets, know-how, and trade secret rights arising under the common law, state law, federal law of the United States and/or laws of foreign countries; (c) all copyrights, literary property and author rights, and moral rights, whether or not copyrightable, and any registrations and applications for registration therefor; (d) all trademarks, service marks, trade names, trade dress, designs, logos, slogans, associated goodwill, whether registered or arising under the common law, state law, federal law of the United States and/or other laws of foreign countries, and all registrations and applications for registration thereof; (e) all contract and licensing rights under the foregoing; (f) all privacy, right of publicity, and similar rights; and (g) all other right other intellectual property and proprietary rights as may now exist and/or hereafter come into existence, and all renewals and extensions thereof, regardless of whether such rights arise under the laws of the United States or any other state, country or jurisdiction.

12.2          SRI will not acquire any patent, trademark, copyright, trade secret, or any other Intellectual Property Rights in the software, confidential information or know-how that NS and/or MIT develop or have developed at their cost and expenses as part of the performance of the Agreement or the provision of the Registry Functions, NS /MIT Proprietary material identified in Section 3.4 ["Prior Arrangements"], and NS and/or MIT material and data protected under the August 23, 2000 Non Disclosure Agreement.

12.3          As between SRI and NS/MIT, SRI shall own and retain all right, title and interest, including all Intellectual Property Rights in and to all Registry Data, all SRI material and data protected under the August 23, 2000 Non Disclosure Agreement, and all SRI Proprietary Material identified in Section 3.4 ["Prior Arrangements"] and all SRI Proprietary Material.

12.4          NS and / MIT shall not acquire any patent, trademark, copyright, trade secret, or any other intellectual Property Rights in any Registry Data, SRI material and data protected under the August 23, 2000 Non Disclosure Agreement, Proprietary Material identified in Section 3.4 ["Prior Arrangements"] and SRI Proprietary Material.

12.5          As between SRI and NS/MIT, NS and MIT shall own and retain all right, title and interest in, including all Intellectual Property Rights in and to their respective software, confidential information or know-how that NS and/or MIT develop or have developed at their cost and expenses as part of the performance of the Agreement or the provision of the Registry Functions, and all NS or MIT material and data protected under the August 23, 2000 Non Disclosure Agreement and all NS /MIT Proprietary Material.

12.6          In consideration for receiving access to confidential and competition sensitive materials from SRI, each of NS and MIT agrees that neither NS nor MIT shall, directly or indirectly, enter into a business (as an investor, partner or otherwise) substantially similar to those of the dot.geo (or GeoWeb) project outlined in the Proposal taken as a whole (a) for four (4) years from the date of this Term Sheet, if SRI is not awarded the Accreditation of the .geo TLD, or if NS and/or MIT does not enter into the Agreement with SRI; and (b) for so long as NS and/or MIT provide services to SRI, if SRI is awarded the Accreditation and enters into the Agreement with NS and/or MIT.  Nothing in this provision shall prevent NS or MIT from providing registry services to any third party.

13.              General Terms.  The Agreement shall contain, without limitation, general terms customary for these types of agreements, including appropriate confidentiality, warranty, indemnity, default and termination provisions, in form and substance mutually acceptable to the parties.


14.              Governing Law.  This Term Sheet and the Agreement shall be governed and construed under the laws of the State California, as they apply to contracts entered into, and performed in the State of California, by California residents.

IN WITNESS WHEREOF, the authorized representatives of the parties have executed this Term Sheet on September 30, 2000.

NEUSTAR, Inc.                        SRI International Inc.

 

 

 

 

 

Name:                            Name:                      

 

Title:                                 Title:                      

 

 

 

MELBOURNE IT Limited

 

 

 

 

 

Name:            

 

Title:              

 

 


APPENDIX 1

 

Registry Functions

 

and Minimum Levels of Services, Computing and Networking Capabilities