Letter of Credit Requirements

 

Appendix C — Letter of Credit Requirements

As security for Registrarís full and faithful performance of the terms, covenants, conditions and provisions of the Agreement by Registrar, including the payment of fees, and in compliance with the requirements of a Registry-Registrar Agreement, Registrar shall deliver to the Registry an irrevocable, transferable stand-by Letter of Credit running in favor of the Registry and satisfying the following terms (as reasonably determined by the Registry):

  1. The irrevocable, transferable stand-by Letter of Credit should be advised to the Registry, in U.S. Dollars and available for payment at the counters of the Registry Bank.

  2. The irrevocable, transferable stand-by Letter of Credit shall be issued by a bank approved by the Registry, in its sole and reasonable discretion, and in the initial amount determined by the parties.

  3. The irrevocable, transferable stand-by Letter of Credit or any substitute irrevocable, transferable stand-by Letter of Credit shall be maintained in full force and effect until the expiration of the 60-day period commencing on the expiration or termination of the term of the Agreement. The Letter of Credit shall be irrevocable for the term thereof and shall provide that it is automatically renewable for successive one-year periods without any action whatsoever on the part of the Registry; provided, however, that the issuing bank shall have the right not to renew the Letter of Credit upon written notice, given by certified mail, to the Registry not less than 60 days prior to the expiration of the then current term thereof (it being understood, however, that the privilege of the issuing bank not to renew the Letter of Credit shall not, in any event, diminish the obligation of Registrar to maintain an irrevocable, transferable stand-by Letter of Credit, or cash security deposit, with the Registry through the date which is 60 days after the expiration or termination of the term of the Agreement).

  4. The irrevocable, transferable stand-by Letter of Credit shall allow multiple draws, and shall allow the Registry to draw against the irrevocable, transferable stand-by Letter of Credit in the event of (a) a breach of any payment obligation under the Agreement as determined by the Registry and/or (b) upon receipt of any notice not to renew the irrevocable, transferable stand-by Letter of Credit. Upon any draw of the irrevocable, transferable stand-by Letter of Credit due to the issuing bankís notice not to renew, such funds so drawn shall be held by the Registry as a deposit, in accordance with the Registry-Registrar Agreement. The irrevocable, transferable stand-by Letter of Credit will allow the drawing thereof by presentation of (1) such irrevocable, transferable stand-by Letter of Credit and (2) a certificate signed by an officer or representative of the Registry certifying as to the occurrence of the event specified in (a) or (b) above, at the counters of the Registry Bank.

  5. The form and provisions of the irrevocable, transferable stand-by Letter of Credit shall be acceptable to the Registry, in its sole and reasonable discretion.

If, as a result of any draw of all or any part of the irrevocable, transferable stand-by Letter of Credit, the amount of the irrevocable, transferable stand-by Letter of Credit shall be less than the then required amount, Registrar shall promptly provide the Registry with additional letter(s) of credit, or a cash security deposit, in an amount equal to the deficiency, and no default of Registrar shall be deemed cured until such deficiency is restored.

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