Document:

name-ex101_166.htm

 

Exhibit 10.1

 

Confidential treatment has been requested for portions of this exhibit.  The copy filed herewith omits the information subject to the confidentiality request.  Omissions are designated as [*****].  A complete version of this exhibit has been filed separately with the Securities and Exchange Commission. 

 

GOOGLE SERVICES AGREEMENT

	
COMPANY INFORMATION

 

	
COMPANY: Rightside Group, Ltd.

	
 
	
Business Contact:
	
Legal Contact:
	
Technical Contact:

	
Name:
	
Matt Delgado
	
Rick Danis
	
Jason Silverstein

	
Title:
	
SVP, Operations
	
General Counsel
	
VP, Product & Engineering

	
Address, City, State,

Postal Code:
	
5808 Lake Washington Blvd. NE, Suite 300

Kirkland, WA 98033
	
5808 Lake Washington Blvd. NE, Suite 300

Kirkland, WA 98033
	
5808 Lake Washington Blvd. NE, Suite 300

Kirkland, WA 98033

	
Phone:
	
425-298-2626
	
425-298-2663
	
425-298-2242

	
Email:
	
matt@rightside.co
	
rick@rightside.co
	
jason@rightside.co

 

	
TERM

 

	
TERM: Starting on August 1, 2016 (“Effective Date”) and continuing through July 31, 2018 (inclusive)

 

	
ADVERTISING SERVICES

 

	
☒ADSENSE FOR DOMAINS (“AFD”)
	
AFD Revenue Share Percentage
	
AFD Deduction Percentage

	
Sites approved for AFD: See Section 1.31 (Sites) below
	
See Exhibit A
	
[*****]%

 

	
☒AFD WITH ADSENSE FOR SEARCH (“AFD/AFS”)
	
AFD/AFS Revenue Share Percentage
	
AFD/AFS Deduction Percentage

	
Sites approved for AFD/AFS: See Section 1.31 (Sites) below
	
See Exhibit A
	
[*****]%

 

1

***** Confidential material redacted and filed separately with the Securities and Exchange Commission.

 

 

	
CURRENCY

 

	
☐AUD
	
☐JPY

	
☐CAD
	
☐KRW

	
☐EUR
	
☒USD

	
☐GBP
	
☐Other

 

2

***** Confidential material redacted and filed separately with the Securities and Exchange Commission.

 

This Google Services Agreement (“Agreement”) is entered into by Google Inc. (“Google”) and the company listed on the cover page of this Agreement (“Company”) and is effective as of the Effective Date.

1.Definitions.  In this Agreement:

1.1.“Ad” means an individual advertisement provided through the applicable Advertising Service.

1.2.“Ad Deduction” means, for each of the Advertising Services, for any period during the Term, the Deduction Percentage (listed on the front pages of this Agreement) of Ad Revenues.

1.3.“Ad Revenues” means, for any period during the Term, revenues that are recognized by Google in connection with Company’s use of the applicable Advertising Service and attributed to Ads in that period. Notwithstanding the forgoing, if advertisers buy Ads at a fixed or aggregated price, then Ad Revenues for those Ads will be calculated as if such advertisers had paid the final price for the provision of the Ad in accordance with the definition above.

1.4.“Ad Set” means a set of one or more Ads.

1.5.“Advertising Services” means the advertising services selected on the front pages of this Agreement.

1.6.“AFD Guidelines” means the guidelines applicable to AFD and AFD/AFS as provided by Google to Company from time to time.

1.7.“Affiliate” means any entity that directly or indirectly controls, is controlled by or is under common control with, a party.

1.8.“Authorized Name” means (1) a Parked Domain (a) registered by Company, (b) for which Company controls and administers to which Domain Name System server (“DNS Server”) that Parked Domain points and (c) [*****] (2) a Third Party Domain or (3) a Leased Domain.

1.9.“Brand Features” means each party’s trade names, trademarks, logos and other distinctive brand features.

1.10.“Click Tracking” means click tracking or other click monitoring of Ads or Ad Sets on the Sites by Company.

1.11.“Company Content” means any content served to End Users that is not provided by Google.

1.12.“Confidential Information” means information that one party (or an Affiliate) discloses to the other party under this Agreement, and that is marked as confidential or would normally be considered confidential information under the circumstances. It does not include information that the recipient already knew, that becomes public through no fault of the recipient, that was independently developed by the recipient, or that was lawfully given to the recipient by a third party.

1.13.“Desktop AFD/AFS Ads” means AFD/AFS Ads displayed in response to Search Queries submitted by End Users not using Mobile Devices or Tablet Devices.

1.14.“EEA End User” means an End User who, based on IP address data available to Google, is located within the European Economic Area.

1.15.“EEA Query” means a Search Query submitted by an EEA End User.

1.16.“End Users” means individual human end users of a Site.

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1.17.“Intellectual Property Rights” means all copyrights, moral rights, patent rights, trademarks, rights in or relating to Confidential Information and any other intellectual property or similar rights (registered or unregistered) throughout the world.

1.18.“Leased Domain” means a Parked Domain (a) registered by a third party where that third party has an agreement with Company to permit Company to implement and maintain the Services on that Parked Domain [*****] (“Lease Agreement”), (b) for which the Company controls and administers to which DNS Server that Parked Domain points, and (c) [*****].

1.19.“Leased Domain Payment” means a payment to a Third Party Domain Registrant under a Lease Agreement where the payment terms are agreed to before the Lease Agreement begins [*****].

1.20.“Mobile Devices” means mobile devices, as determined by Google in its sole discretion consistent with the mobile device definitions used by Google for advertiser reporting, pricing, and feature serving.

1.21.“Mobile AFD/AFS Ads” means AFD/AFS Ads displayed in response to Search Queries submitted by End Users using Mobile Devices.

1.22.“Net Ad Revenues” means, for each of the Advertising Services, for any period during the Term, Ad Revenues for that period minus the Ad Deduction (if any) for that period.

1.23.“Parked Domain” means a domain that is (a) primarily used to serve advertisements targeted by the domain name or related links and (b) commonly referred to as a parked domain.

1.24.“Pre-Existing Agreement” means an agreement entered into by Company and a third party prior to the Effective Date that [*****].

1.25.“Request” means a request from Company or an End User (as applicable) to Google for an Ad Set.

1.26.“Results” means Ad Sets or Ads.

1.27.“Results Page” means any Site page that contains any Results.

1.28.“Search Box” means a search box (or other means approved by Google) for the purpose of sending search queries to Google as part of a Request.

1.29.“Search Query” means (a) a text query entered and submitted into a Search Box on the Site, or (b) a click on a text link on the Site that is identified as a search query where the text link is reasonably related to the subject matter area indicated by the Site URL, or (c) a URL that is an Authorized Name submitted by an End User through the address bar of an Internet browser.

1.30.“Services” means the Advertising Services (as applicable).

1.31.“Site(s)” means Authorized Names. For purposes of clarity, in the event Company develops a bona fide content site, then such bona fide content site will no longer be deemed a “Site” under this Agreement.

1.32.“Tablet Devices” means tablet devices, as determined by Google in its sole discretion consistent with the tablet device definitions used by Google for advertiser reporting, pricing, and feature serving.

1.33.“Tablet AFD/AFS Ads” means AFD/AFS Ads displayed in response to Search Queries submitted by End Users using Tablet Devices.

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1.34.“Third Party Domain” means a Parked Domain (a) registered by a third party where that third party has an agreement with Company to permit Company to implement and maintain the Services on that Parked Domain, (b) for which that third party controls and administers to which DNS Server that Parked Domain points, and (c) [*****].

1.35.“Third Party Domain Registrant” means the third party registrant of a Leased Domain or Third Party Domain (as appropriate).

2.Launch, Implementation and Maintenance of Services.

2.1.Launch. The parties will each use reasonable efforts to launch the Services into live use within 30 days from the Effective Date. Company will not launch any new implementation of the Services [*****], until Google has approved such new implementations in writing, [*****].

2.2.Implementation and Maintenance.

(a)For the remainder of the Term, Google will make available and Company will implement and maintain each of the Services on each of the Sites, except as provided in the AFD Guidelines. For clarity, Company may not implement the Services on a property that is not a Site.

(b)Company will ensure that Company:

(i)is the technical and editorial decision maker in relation to each page, including Results Pages, on which the Services are implemented; and

(ii)has control over the way in which the Services are implemented on each of those pages.

(c)Company will ensure that the Services are implemented and maintained in accordance with:

(i)the AFD Guidelines; and

(ii)Google technical protocols (if any) and any other technical requirements and specifications applicable to the Services that are provided to Company by Google from time to time.

(d)Company will ensure that (i) every Search Query generates a Request, (ii) every Request is generated by a Search Query and (iii) every Request contains the Search Query that generated that Request.

(e)Google will, upon receiving a Request sent in compliance with this Agreement, provide an Ad Set when available. Company will then display the Ad Set on the applicable Site.

(f)Company will ensure that at all times during the applicable Term, Company:

(i)has a clearly labeled and easily accessible privacy policy in place relating to the Site(s); and

(ii)provides the End User with clear and comprehensive information about cookies and other information stored or accessed on the End User’s device in connection with the Services, including information about End Users’ options for cookie management.

(g)Company will use commercially reasonable efforts to ensure that an End User gives consent to the storing and accessing of cookies and other information on the End User’s device in connection with the Services where such consent is required by law.

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2.3.Accessing the Services. Notwithstanding anything to the contrary in this Agreement, Company will not, and will not allow any third party to (a) directly or indirectly access the Services through any application, plug-in, helper, component or other executable code that runs on an End User’s device; or (b) access the Services obtained as a result of such End Users downloading any application, plug-in, helper, component or other executable code.

3.Policy and Compliance Obligations.

3.1.Policy Obligations. Company will not, [*****] allow any third party to:

(a)modify, obscure or prevent the display of all, or any part of, any Results;

(b)edit, filter, truncate, append terms to or otherwise modify any Search Query;

(c)display any Results in pop-ups, pop-unders, exit windows, expanding buttons, animation or other similar methods;

(d)interfere with the display of or frame any Results Page or any page accessed by clicking on any Results;

(e)display any content between any Results and any page accessed by clicking on those Results or place any interstitial content immediately before any Results Page containing any Results;

(f)enter into any type of arrangement with a third party where either party receives a financial benefit in connection with the Results or Ad revenue [*****], except that Company may make Leased Domain Payments and except that Company may provide a financial benefit to a Third Party Domain Registrant regarding Results appearing on Third Party Domain(s) of that Third Party Domain Registrant so long as the Third Party Domain Registrant does not share any of this financial benefit with another party or enter into any type of arrangement with another party where that party receives a financial benefit regarding Results. For the avoidance of doubt, nothing in this Section 3.1(f) is intended to prevent Company from displaying third party ads on a Results Page;

(g)directly or indirectly, (i) offer incentives to End Users to generate impressions, Requests or clicks on Results, (ii) fraudulently generate impressions, Requests or clicks on Results or (iii) modify impressions, Requests or clicks on Results;

(h)“crawl”, “spider”, index or in any non-transitory manner store or cache information obtained from the Services (including Results);

(i)display on any Site, any content that violates or encourages conduct that would violate the AFD Guidelines, Google technical protocols and any other technical requirements and specifications applicable to the Services that are provided to Company by Google from time to time.

(j)allow Company Content on any page on a Site to lead to another Parked Domain or search portal;

(k)[*****] implement the Services on any URL that violates a third party trademark; or

(l)use [*****].

6

***** Confidential material redacted and filed separately with the Securities and Exchange Commission.

 

3.2.Compliance Obligations. Company will not [*****] allow any use of or access to the Services through any Site that is not in compliance with the terms of this Agreement. Company will use commercially reasonable efforts to monitor for any such access or use and will, if any such access or use is detected, take all reasonable steps requested by Google to disable this access or use. If Company is not in compliance with this Agreement at any time, Google may with notice to Company, suspend provision of all (or any part of) the applicable Services until Company implements adequate corrective modifications as reasonably required and determined by Google.

4.Conflicting Services. Except for EEA Queries, [*****] that is the same as or substantially similar [*****].

5.Leased Domains. Company may display Ads on Leased Domains (this display, the “Leased Domain Relationship”) only in accordance with the Google technical protocols, the AFD Guidelines and the terms of this Agreement. Company is responsible for any use of, or access to, the Service(s), including Ads, by any Leased Domain or Third Party Domain Registrant. If the conduct of a Leased Domain or Third Party Domain Registrant would be a breach of this Agreement had the conduct been performed by Company, this Leased Domain or Third Party Domain Registrant conduct (as appropriate) will be treated as Company’s breach of this Agreement.

6.Third Party Hosting. Company may display Ads on Third Party Domains (this display, the “Third Party Hosting Relationship”) only in accordance with the Google technical protocols, the AFD Guidelines and the terms of this Agreement.  Company is responsible for any use of, or access to, the Service(s), including Ads, by any Third Party Domain or Third Party Domain Registrant.  If the conduct of a Third Party Domain or Third Party Domain Registrant would be a breach of this Agreement had the conduct been performed by Company, this Third Party Domain or Third Party Domain Registrant conduct (as appropriate) will be treated as Company’s breach of this Agreement.

7.Changes and Modifications.

7.1.By Google. If Google modifies the AFD Guidelines or the Google technical protocols and the modification requires action by Company, Company will take the necessary action [*****].

7.2.By Company.

(a)Company will provide Google with [*****] notice of any [*****] that could reasonably be expected to affect the delivery or display of any [*****].

(b)If a fault in Company’s implementation of the Services (or any part of them) could cause or is causing an interruption or degradation of the Services (or any of them), Company will use commercially reasonable efforts to make the required fixes or changes [*****].

7.3.Site List Changes.

(a)If requested by Google in writing, Company will provide Google with a current listing of all Sites that have implemented the Services. If applicable, the listing of Sites will be segmented as specified by Google.

(b)If Company launches or removes the Services on or from a Leased Domain, Company will provide [*****] notice, including the URL of each Leased Domain to be launched or removed.

(c)If there is a change in control of any Site [*****], unless the entire Agreement is assigned to the third party controlling the Site in compliance with Section 16.3 (Assignment) below, from the date of that change in control of the Site, that Site will be treated as removed from this Agreement.  Company will ensure that from that date, the Services are no longer implemented on that Site.

8.Intellectual Property. Except to the extent expressly stated otherwise in this Agreement, neither party will acquire any right, title or interest in any Intellectual Property Rights belonging to the other party, or to the other party’s licensors.

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***** Confidential material redacted and filed separately with the Securities and Exchange Commission.

 

9.Brand Features. Google may include Company’s Brand Features in customer lists. Google will provide Company with a sample of this usage if requested by Company. [*****].

10.Payment.

10.1.Google Payments.

(a)For each applicable Advertising Service, Google will pay Company an amount equal to the Revenue Share Percentage (listed on the front pages of this Agreement) of [*****]. This payment will be made in the month following the calendar month in which the applicable Ads were displayed.

(b)Google’s payments for Advertising Services under this Agreement will be based on Google’s accounting [*****].

10.2.All Payments.

(a)As between Google and Company, Google is responsible for all taxes (if any) associated with the transactions between Google and advertisers in connection with Ads displayed on the Sites. Company is responsible for all taxes (if any) associated with the Services, other than taxes based on Google’s net income. All payments to Company from Google in relation to the Services will be treated as inclusive of tax (if applicable) and will not be adjusted. If Google is obligated to withhold any taxes from its payments to Company, Google will notify Company of this and will make the payments net of the withheld amounts. Google will provide Company with original or certified copies of tax payments (or other sufficient evidence of tax payments) if any of these payments are made by Google.

(b)All payments due to Google or to Company will be in the currency specified in this Agreement and made by electronic transfer to the account notified to the paying party by the other party for that purpose, and the party receiving payment will be responsible for any bank charges assessed by the recipient’s bank.

(c)In addition to other rights and remedies Google may have, Google may [*****].

10.3.Accounting. Upon written request during the Term and no more than once a year, Google will make available to Company, the latest available SSAE 16 (or similar report with comparable data) from a reputable, independent certified public accounting firm covering the key controls and validation mechanisms in place to meet the revenue reporting and payment obligations under this Agreement.

11.Warranties; Disclaimers.

11.1.Warranties. Each party warrants that (a) it has full power and authority to enter into this Agreement; and (b) entering into or performing under this Agreement will not violate any agreement it has with a third party.

11.2.Disclaimers. Except as expressly provided for in this Agreement and to the maximum extent permitted by applicable law, NEITHER PARTY MAKES ANY WARRANTY OF ANY KIND, WHETHER IMPLIED, STATUTORY, OR OTHERWISE AND DISCLAIMS, WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR USE, AND  NONINFRINGEMENT.

12.Indemnification.

12.1.By Company. Company will indemnify, defend, and hold harmless Google from and against all liabilities, damages, and costs (including settlement costs) arising out of [*****].

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***** Confidential material redacted and filed separately with the Securities and Exchange Commission.

 

12.2.By Google.

(a)Google will indemnify, defend, and hold harmless Company from and against all liabilities, damages, and costs (including settlement costs) arising out of a [*****].

(b)For purposes of clarity, Google will not have any obligations or liability under this Section 12 (Indemnification) to the extent arising from [*****].

12.3.General. The party seeking indemnification will promptly notify the other party of the claim and cooperate with the other party in defending the claim. The indemnifying party has full control and authority over the defense, except that any settlement requiring the party seeking indemnification to admit liability or to pay any money will require that party’s prior written consent, such consent not to be unreasonably withheld or delayed. The other party may join in the defense with its own counsel at its own expense. [*****].

13.Limitation of Liability.

13.1.Limitation.

(a)NEITHER PARTY WILL BE LIABLE UNDER THIS AGREEMENT FOR LOST REVENUES OR INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL, EXEMPLARY, OR PUNITIVE DAMAGES, EVEN IF THE PARTY KNEW OR SHOULD HAVE KNOWN THAT SUCH DAMAGES WERE POSSIBLE AND EVEN IF DIRECT DAMAGES DO NOT SATISFY A REMEDY.

(b)NEITHER PARTY WILL BE LIABLE UNDER THIS AGREEMENT FOR [*****].

13.2.Exceptions to Limitations. These limitations of liability do not apply to Company’s breach of Section 4 (Conflicting Services), breaches of confidentiality obligations contained in this Agreement, [*****], or indemnification obligations contained in this Agreement.

14.Confidentiality; Publicity.

14.1.Confidentiality. The recipient of any Confidential Information will not disclose that Confidential Information, except to Affiliates, employees, agents or professional advisors who need to know it and who have agreed in writing (or in the case of professional advisors are otherwise bound) to keep it confidential. The recipient will ensure that those people and entities use Confidential Information only to exercise rights and fulfill obligations under this Agreement, while using reasonable care to keep the Confidential Information confidential. The recipient may also disclose Confidential Information when required by law after giving reasonable notice to the discloser, if permitted by law.

14.2.[*****].

14.3.Publicity. Neither party may make any public statement regarding this Agreement without the other’s written approval.

15.Term and Termination.

15.1.Term. The term of this Agreement is the Term stated on the front pages of this Agreement, unless earlier terminated as provided in this Agreement.

15.2.Termination.

(a)Either party may terminate this Agreement with notice if the other party is in material breach of this Agreement:

(i)where the breach is incapable of remedy;

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(ii)where the breach is capable of remedy and the party in breach fails to remedy that breach within 30 days after receiving notice from the other party; or

(iii)more than twice even if the previous breaches were remedied.

(b)Google may in its sole discretion [*****], Google will make commercially reasonable efforts to provide Company with prior written notice. Company may [*****].

(c)Google may in its sole discretion terminate all or any part of this Agreement upon [*****] notice to Company.

(d)Google reserves the right to suspend or terminate Company’s use of any Services that are alleged or reasonably believed by Google to infringe or violate a third party right. If any suspension of a Service under this subsection 15.2(d) continues for [*****], Company may immediately terminate this Agreement upon notice to Google.

(e)Google may terminate this Agreement, or the provision of any Service, immediately with notice if pornographic content that is illegal under U.S. law is displayed on any Site.

(f)Upon the expiration or termination of this Agreement for any reason:

(i)all rights and licenses granted by each party will cease immediately;

(ii)if requested, each party will use commercially reasonable efforts to promptly return to the other party, or destroy and certify the destruction of, all Confidential Information disclosed to it by the other party; and

(iii)any continued use of the Services will be subject to Google’s then standard terms and conditions available at www.google.com/adsense/localized-terms, provided that Google will not be obligated to provide the Services (including Results) to Company or make any payments with respect to Company’s continued use of the Services following expiration or termination.

16.Miscellaneous.

16.1.Compliance with Laws. Each party will comply with all applicable laws, rules, and regulations in fulfilling its obligations under this Agreement.

16.2.Notices. All notices of termination or breach must be in writing and addressed to the attention of the other party’s Legal Department and primary point of contact. The email address for notices being sent to Google’s Legal Department is legal-notices@google.com. All other notices must be in English, in writing and addressed to the other party’s primary contact.  Notice will be treated as given on receipt, as verified by written or automated receipt or electronic log (as applicable).

16.3.Assignment. Neither party may assign any part of this Agreement without the written consent of the other, except to an Affiliate where (a) the assignee has agreed in writing to be bound by the terms of this Agreement; (b) the assigning party remains liable for obligations under the Agreement if the assignee defaults on them; and (c) the assigning party has notified the other party of the assignment. Any other attempt to assign is void.

16.4.Change of Control. Upon the earlier of (a) entering into an agreement providing for a change of control (for example, through a stock purchase or sale, merger, asset sale, liquidation or other similar form of corporate transaction), (b) the board of directors of a party recommending its shareholders approve a change of control, or (c) the occurrence of a change of control (each, a “Change of Control Event”), the party experiencing the Change of Control Event will provide notice to the other party promptly, but no later than 3 days, after the occurrence of the Change of Control Event. The other party may terminate this Agreement by sending notice to the party experiencing the Change of Control Event and the termination will be effective upon the earlier of delivery of the termination notice or 3 days after the occurrence of the Change of Control Event.  For purposes of clarity, a 

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Change of Control Event includes: (a) the sale of all or substantially all of the assets of a party to another person or entity (other than to a subsidiary of such party); (b) any merger or consolidation of a party into or with another corporation or entity in which holders of the capital stock of such party immediately prior to the consummation of the transaction hold, directly or indirectly, immediately following the consummation of the transaction, less than 50% of the capital stock in the surviving entity in such transaction; or (c) any other acquisition [*****] by a third party not an Affiliate of the acquired party or its stockholders (or group of third parties (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended) not an Affiliate of such party or its stockholders) of a majority of such party’s outstanding voting power.

16.5.Governing Law.  ALL CLAIMS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE SERVICES WILL BE GOVERNED BY CALIFORNIA LAW, EXCLUDING CALIFORNIA’S CONFLICT OF LAW RULES, AND WILL BE LITIGATED EXCLUSIVELY IN THE FEDERAL OR STATE COURTS OF SANTA CLARA COUNTY, CALIFORNIA, USA. THE PARTIES CONSENT TO PERSONAL JURISDICTION IN THOSE COURTS.

16.6.Equitable Relief. Nothing in this Agreement will limit either party’s ability to seek equitable relief.

16.7.Entire Agreement; Amendments. This Agreement sets out all terms agreed between the parties and supersedes all other agreements between the parties relating to its subject matter. In entering into this Agreement, neither party has relied on, and neither party will have any right or remedy based on, any statement, representation or warranty (whether made negligently or innocently), except those expressly set out in this Agreement. Any amendment must be in writing, signed (including by electronic signature) by both parties, and expressly state that it is amending this Agreement.

16.8.No Waiver. Neither party will be treated as having waived any rights by not exercising (or delaying the exercise of) any rights under this Agreement.

16.9.Severability. If any term (or part of a term) of this Agreement is invalid, illegal or unenforceable, the rest of the Agreement will remain in effect.

16.10.Survival. The following sections of this Agreement will survive any expiration or termination of this Agreement: 8 (Intellectual Property), 12 (Indemnification), 13 (Limitation of Liability), 14 (Confidentiality; Publicity) and 16 (Miscellaneous).

16.11.No Agency. This Agreement does not create an agency, partnership, or joint venture between the parties.

16.12.No Third Party Beneficiaries. This Agreement does not confer any benefits on any third party unless it expressly states that it does.

16.13.Force Majeure. Neither party will be liable for failure or delay in performance to the extent caused by circumstances beyond its reasonable control.

16.14.Counterparts. The parties may execute this Agreement in counterparts, including facsimile, PDF or other electronic copies, which taken together will constitute one instrument.

Signed:

 

	
Google
	
 
	
Company

	
By:
	
/s/ Philipp Schindler
	
 
	
By:
	
/s/ Taryn Naidu

	
Print Name:
	
Phillip Schindler
	
 
	
Print Name:  
	
Taryn Naidu

	
Title:
	
Authorized Signatory
	
 
	
Title:
	
CEO

	
Date:
	
August 22, 2016
	
 
	
Date:
	
August 22, 2016

 

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EXHIBIT A

 

Revenue Share Percentage

 

[*****]

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Exhibit 10.2

AMENDMENT NO. 3

to

CREDIT AGREEMENT

(CORRECTED)

 

THIS AMENDMENT NO. 3 to Credit Agreement (this “Amendment”), dated as of March 30, 2016, is entered into by and among Rightside Group, Ltd., a Delaware corporation (“Borrower Parent”), Rightside Operating Co., a Delaware corporation (“Opco”), Enom, Incorporated, a Nevada corporation (“eNom,” and together with Borrower Parent and Opco, the “U.S. Borrowers”), DMIH Limited, a limited liability company organized under the laws of Ireland (“DMIH”), United TLD Holdco Ltd., an exempted company limited by shares incorporated under the laws of the Cayman Islands (“United”), Rightside Domains Europe Limited, a limited liability company organized under the laws of Ireland (“Domains,” and together with DMIH and United, the “Non-U.S. Borrowers”), and Silicon Valley Bank (“SVB”), as Lender (in such capacity, the “Lender”). Each of the U.S. Borrowers and the Non-U.S. Borrowers is a “Borrower,” and collectively, they are the “Borrowers.”  Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Credit Agreement.

PRELIMINARY STATEMENTS

Whereas, the Borrowers and the Lender are parties to that certain Credit Agreement, dated as of August 1, 2014 (as amended, restated, or otherwise modified from time to time, the “Credit Agreement”). 

Whereas, the Lender, Obsidian Agency Services, Inc., (“Obsidian”), as collateral agent for the Fund Lenders (as defined in the Subordination Agreement described hereafter), and Rightside Group, Ltd., as agent for Borrower (“Borrower Parent”) are parties to that certain Subordination and Intercreditor Agreement, dated as of August 6, 2014 (as amended, restated, or otherwise modified from time to time, the “Subordination Agreement”).

Whereas, the Borrower has requested certain modifications to the Credit Agreement related to the covenants therein, and to make a one-time payment to Term Loan Lenders.

Whereas, the Borrowers and the Lender have agreed to amend the Credit Agreement and to permit such one-time payment on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the premises set forth above and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

Section 1.Amendments to the Credit Agreement.

	
 
	
A.
	
Section 7.1 (Financial Condition Covenants) is hereby amended in its entirety and restated as follows:  

 

 

“7.1 Financial Condition Covenants.

 

(a) Consolidated Net Leverage Ratio. Permit the Consolidated Net Leverage Ratio as at the last day of any fiscal quarter of the Borrower Parent ending with any day set forth below to exceed the ratio set forth below opposite such day:

 

	
Quarter Ending
	
Consolidated Net Leverage Ratio

	
Closing Date through June 30, 2015
	
3.50:1.00

	
September 30, 2015 through June 30, 2016
	
3.00:1.00

	
September 30, 2016 through June 30, 2017
	
2.50:1.00

	
September 30, 2017 and thereafter
	
2.00:1.00

 

(b) Minimum Liquidity Ratio.  Permit the Minimum Liquidity Ratio as of the last day of each month to be less than 1.50:1.00.

(c) Minimum Consolidated EBITDA.  Permit the Minimum Consolidated EBITDA, measured on a trailing 12-month basis, as of the effective date of this Amendment through the end of the fiscal quarter of the Borrower ending September 30, 2016 to be at least $2,500,000, and at least $6,000,000 for the end of each fiscal quarter of the Borrower thereafter.”

	
 
	
B.
	
Section 1.1 (Defined Terms).  

(a)The definition of “Consolidated Fixed Charge Coverage Ratio” contained in Section 1.1 of the Credit Agreement is hereby deleted.

(b)The definition of “Consolidated Senior Leverage Ratio” contained in Section 1.1 of the Credit Agreement is hereby deleted.

(c)The definition of “Minimum Liquidity” contained in Section 1.1 of the Credit Agreement is hereby deleted.

(d)The definition of “Minimum Liquidity Ratio” is added to Section 1.1 of the Credit Agreement in the proper alphabetical order as follows:

““Minimum Liquidity Ratio” means, unrestricted cash and Cash Equivalents plus Unused Availability plus net accounts receivable divided by Senior Debt outstanding.”

2

 

(e)The definitions of “Senior Debt” and “Unused Availability” are added to Section 1.1 of the Credit Agreement in the proper alphabetical order as follows:

“”Senior Debt” means the aggregate indebtedness of the Borrowers and their Subsidiaries, calculated on a consolidated basis as of the determination date in accordance with GAAP, consisting of Indebtedness for borrowed money, or represented by bonds, debentures, notes or the like, and including undrawn or unreimbursed amounts under Letters of Credit, but excluding Subordinated Indebtedness.”

 

““Unused Availability” means, the difference between (i) the Revolving Commitment (as reduced from time to time), and (ii) the sum of (A) the closing balance of the Revolving Loans outstanding at such time, (B) the aggregate undrawn amount of all Letters of Credit outstanding as such time, and (C) the aggregate amount of all L/C Disbursements that have not yet been reimbursed or converted into Revolving Loans at such time.”

	
 
	
C.
	
Exhibit B (Compliance Certificate) to the Credit Agreement is amended in its entirety as set forth in Exhibit A attached hereto.

Section 2.Consent to Distribution for pre-payment of Term Loan.  Pursuant to Section 2.1 of the Subordination Agreement, Lender hereby consents to a one-time $10,000,000 Distribution to the Term Loan for partial pre-payment of the Term Loan.  

Section 3.Covenants, Representations, and Warranties of the Borrowers.

(a)Each of the Borrowers represents and warrants as to itself that, after giving effect to this Amendment, its representations and warranties set forth in the Credit Agreement (as amended hereby) and the other Loan Documents are true and correct as of the date hereof, as though made on and as of such date (except to the extent such representations and warranties relate solely to an earlier date and then as of such earlier date).

(b)Each of the Borrowers represents and warrants as to itself that (i) this Amendment constitutes the legal, valid, and binding obligation of such party, enforceable against such party in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the enforcement of creditors’ rights generally and general principles of equity; and (ii) upon the effectiveness of this Amendment, no event shall have occurred and be continuing which constitutes a Default or an Event of Default.

Section 4.Reference to and Effect on the Credit Agreement.

(a)Upon the effectiveness of this Amendment, each reference in the Credit Agreement to “this Agreement,” “hereunder,” “hereof,” “herein,” “hereby,” or words of like import shall mean and be a reference to the Credit Agreement as amended by this Amendment, and each reference to the Credit Agreement in any other document, instrument, or agreement executed or delivered in connection with the Credit Agreement shall mean and be a reference to the Credit Agreement as amended by this Amendment.

3

 

(b)Except as specifically amended hereby, the Credit Agreement and each other Loan Document shall remain in full force and effect and are hereby ratified and confirmed.

(c)The execution, delivery, and effectiveness of this Amendment shall not operate as a waiver of any right, power, or remedy of the Lender under the Credit Agreement or any of the other Loan Documents, nor constitute a waiver of any provision contained therein, except as specifically set forth herein.

Section 5.Expenses. The Borrowers agree to pay to Lender (a) all reasonable expenses, including without limitation attorney fees, incurred by the Lender in connection with the preparation, execution, and enforcement of this Amendment; and (b) a $25,000.00 amendment fee, which is fully earned and non-refundable on the date hereof.

Section 6.GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA, WITHOUT GIVING EFFECT TO CONFLICTS OF LAW PRINCIPLES.

Section 7.Counterparts. This Amendment may be executed in any number of separate counterparts, each of which shall be deemed an original. All of such counterparts taken together shall constitute one and the same instrument. Delivery of an executed signature page to this Amendment by electronic mail or facsimile shall be effective as physical delivery.

Section 8.Headings. Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose.

Section 9.Integration. This Amendment contains the entire understanding of the parties hereto with regard to the subject matter contained herein. This Amendment supersedes all prior or contemporaneous negotiations, promises, covenants, agreements, and representations with respect to the matters referred to in this Amendment, all of which have become merged and finally integrated into this Amendment. Each of the parties hereto understands that in the event of any subsequent litigation, controversy or dispute concerning any of the terms, conditions, or provisions of this Amendment, no party shall be entitled to offer or introduce into evidence any oral promises or oral agreements between the parties relating to the subject matter of this Amendment not included or referred to herein and not reflected by a writing included or referred to herein.

[Remainder of page intentionally blank]

 

4

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered by their respective duly authorized signatories, as of the date first above written.

 

	
 
	
 
	
U.S. BORROWERS

	
 
	
 
	
 
	
 

	
 
	
 
	
RIGHTSIDE GROUP, LTD.

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
By:
	
/s/ Tracy Knox

	
 
	
 
	
Name:
	
Tracy Knox

	
 
	
 
	
Title:
	
CFO

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
RIGHTSIDE OPERATING CO.

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
By:
	
/s/ Tracy Knox

	
 
	
 
	
Name:
	
Tracy Knox

	
 
	
 
	
Title:
	
CFO

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
ENOM, INCORPORATED

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
By:
	
/s/ Tracy Knox

	
 
	
 
	
Name:
	
Tracy Knox

	
 
	
 
	
Title:
	
CFO

 

 

 

Signature Page to 

Amendment No. 3 to Credit Agreement

 

	
 
	
 
	
NON-U.S. BORROWERS

	
 
	
 
	
 
	
 

	
 
	
 
	
UNITED TLD HOLDCO LTD.

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
By:
	
/s/ Rick Danis

	
 
	
 
	
Name:
	
Rick Danis

	
 
	
 
	
Title:
	
Director

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
DMIH LIMITED

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
By:
	
/s/ Rick Danis

	
 
	
 
	
Name:
	
Rick Danis

	
 
	
 
	
Title:
	
Director

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
RIGHTSIDE DOMAINS EUROPE LIMITED

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
By:
	
/s/ Rick Danis

	
 
	
 
	
Name:
	
Rick Danis

	
 
	
 
	
Title:
	
Director

 

Signature Page to 

Amendment No. 3 to Credit Agreement

 

 

	
 
	
 
	
LENDER:

	
 
	
 
	
 
	
 

	
 
	
 
	
SILICON VALLEY BANK

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
By:
	
/s/ Jayson Davis

	
 
	
 
	
Name:
	
Jayson Davis

	
 
	
 
	
Title:
	
Director

 

 

 

Signature Page to 

Amendment No. 3 to Credit Agreement

 

EXHIBIT A

 

FORM OF COMPLIANCE CERTIFICATE

RIGHTSIDE GROUP, LTD.

Date:  ___________ ____, 20____

This Compliance Certificate is delivered pursuant to Section 6.2(b)(ii) of that certain Credit Agreement, dated as of August 1, 2014, by and among Rightside Group, Ltd., a Delaware corporation (“Borrower Parent”), Rightside Operating Co., a Delaware corporation (“Opco”), eNom, Incorporated, a Nevada corporation (“eNom” and with Borrower Parent and Opco, the “U.S. Borrowers”), DMIH Limited, a limited liability company organized under the laws of Ireland (“DMIH”), United TLD Holdco Ltd., an exempted company limited by shares incorporated under the laws of the Cayman Islands (“United”), Rightside Domains Europe Limited, a limited liability company organized under the laws of Ireland (“Domains” and with DMIH and United, the “Non-U.S. Borrowers”) (the U.S. Borrowers and the Non-U.S. Borrowers are collectively referred to as “Borrowers” and each individually, a “Borrower”), and Silicon Valley Bank (“SVB”), as Lender (in such capacity, “Lender”) (as amended, restated, amended and restated, supplemented, restructured or otherwise modified from time to time, the “Credit Agreement”).  Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

1.I am the duly elected (or appointed), qualified and acting [Insert title of applicable Responsible Officer] of Borrower Parent.

2.I have reviewed and am familiar with the contents of this Compliance Certificate.

3.I have reviewed the terms of the Credit Agreement and the other Loan Documents and have made, or caused to be made under my supervision, a review in reasonable detail of the transactions and condition of Borrower Parent and its Subsidiaries during the accounting period covered by the financial statements attached hereto as Attachment 1 (the “Financial Statements”).  Such review did not disclose, and I have no knowledge of the existence as of the date of this Compliance Certificate, of any condition or event which constitutes a Default or an Event of Default[, except as specified below].

 

	
 
	
 

	
 
	
 

	
 
	
 
	
 

 

4.Attached hereto as Attachment 2 are the computations showing compliance with the covenants set forth in Section 7.1 of the Credit Agreement and the U.S. Revolving Loan Sublimit for the referenced period.

5.The amount of Permitted gTLD Investments made during the most recent fiscal quarter is $___________, and the aggregate of all Permitted gTLD Investments made since the Closing Date is $______________.  

Exhibit A-1

 

6.[To the extent not previously disclosed to Lender, a description of any change in the jurisdiction of organization of any Loan Party is attached hereto as Attachment [3].]

7.[To the extent not previously disclosed to Lender, a list of any registered Intellectual Property issued to or acquired by any Loan Party since [the Closing Date][the date of the most recent report delivered] is attached hereto as Attachment [4].]

8.[To the extent not previously disclosed to Lender, a list of Subsidiaries created or acquired, since [the Closing Date][the date of the most recent report delivered] is attached hereto as Attachment [5].]

[Remainder of page intentionally left blank; signature page follows]

Exhibit A-2

 

IN WITNESS WHEREOF, I have executed this Compliance Certificate as of the date first written above.

 

	
 
	
 
	
RIGHTSIDE GROUP, LTD.

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
By:
	
 

	
 
	
 
	
Name:
	
 

	
 
	
 
	
Title:
	
 

 

Exhibit A-3

 

Attachment 1
to Compliance Certificate

[Attach Financial Statements]

 

Exhibit A-4

 

 

Attachment 2
to Compliance Certificate

The information described herein is as of [____________], [____] (the “Statement Date”), and pertains to the Subject Period defined below, as applicable.

1

	
I.
	
Section 7.1(a) — Consolidated Net Leverage Ratio
	
 

	
 
	
A.
	
Consolidated Funded Indebtedness as of the Statement Date 
	
$__________

	
 
	
B.
	
Obligations under Letters of Credit as of the Statement Date
	
$__________

	
 
	
C.
	
Excess Cash
	
$__________

	
 
	
 
	
1.
	
Aggregate amount of unrestricted cash and Cash Equivalents held at such time by the Borrower Parent and its Subsidiaries
	
$__________

	
 
	
 
	
2.
	
Aggregate amount of the then outstanding Revolving Loans
	
$__________

	
 
	
 
	
3.
	
Excess Cash (excess, if any, of the sum of Lines I.B.1 less I.B.2 less $15,000,000)
	
$__________

	
 
	
D.
	
Consolidated Net  Leverage Ratio (ratio of Lines (I.A plus I.B less I.C) to III.A.21):
	
_____ to 1.00

 

	
Maximum permitted:

 
	
 

	
 
	
Consolidated Net 

Leverage Ratio

	
On or before 

June 30, 2015
	
3.50:1.00

	
September 30, 2015 

through June 30, 2016
	
3.00:1.00

	
September 30, 2016 

through June 30, 2017
	
2.50:1.00

	
September 30, 2017 

and thereafter
	
2.00:1.00

 

	
 
	
Covenant compliance:           Yes  ☐           No  ☐
	
 

	
	 

	
1 
	
 NTD: Financial Definitions and tests to be conformed to final definitions and tests in the Credit Agreement.

Exhibit A-5

 

	
 
	
 
	
 

	
II.
	
Section 7.1(b) — Minimum Liquidity Ratio
	
 

	
 
	
A.
	
Aggregate amount of unrestricted cash and Cash Equivalents held at such time by the Borrower Parent and its Subsidiaries: 
	
$__________

	
 
	
B.
	
Unused Availability:
	
$__________

	
 
	
 
	
1.
	
Total Revolving Commitment in effect at such time
	
$__________

	
 
	
 
	
2.
	
Aggregate undrawn amount of all outstanding Letters of Credit at such time
	
$__________

	
 
	
 
	
3.
	
Aggregate amount of all L/C Disbursements that have not yet been reimbursed or converted into Revolving Loans at such time
	
$__________

	
 
	
 
	
4.
	
The closing balance of the Revolving Loans outstanding at such time
	
$__________

	
 
	
 
	
5.
	
Available Revolving Commitment as of such date (the sum of Line II.B.1 minus Lines II.B.2 through II.B.4)
	
$__________

	
 
	
C.
	
Net Accounts Receivable
	
$__________

	
 
	
D.
	
Senior Debt outstanding
	
$__________

	
 
	
E.
	
Liquidity Ratio (sum of Line II.A plus II.B plus II.C divided by Line II.D):
	
$__________

	
 
	
 
	
Minimum Required
	
1.50:1.00

	
 
	
 
	
Covenant compliance:Yes  ☐          No  ☐
	
 

	
 
	
 
	
 
	
 

	
III.
	
Minimum Consolidated EBITDA
	
 

	
 
	
A.
	
Consolidated EBITDA for the Subject Period:
	
 

	
 
	
 
	
(“Subject Period” means the four fiscal quarter period ending on the Statement Date)
	
 

	
 
	
 
	
With respect to the Borrower Parent and its Domestic Subsidiaries only:
	
 

Exhibit A-6

 

	
 
	
 
	
1.
	
Consolidated Net Income
	
$__________

	
 
	
 
	
2.
	
Consolidated Interest Expense: 2
	
$__________

	
 
	
 
	
3.
	
Provision for income taxes:
	
$__________

	
 
	
 
	
4.
	
Depreciation expenses:
	
$__________

	
 
	
 
	
5.
	
Amortization expenses:
	
$__________

	
 
	
 
	
6.
	
Any non-cash impairment or loss of goodwill or other intangibles required to be taken pursuant to GAAP:
	
$__________

	
 
	
 
	
7.
	
Losses related to the voluntary withdrawal or other loss of an application for gTLD rights:
	
$__________

	
 
	
 
	
8.
	
Any losses during such period related to foreign currency exchanges, conversions and/or contracts:
	
$__________

	
 
	
 
	
9.
	
One-time, non-recurring charges, costs and expenses not in excess of $3,500,000 incurred during the Subject Period in connection with the Spin-Out Transaction, the closing of the Facility, the closing of the Term Loan and other acquisition or disposition transactions:
	
$__________

	
 
	
 
	
10.
	
Start-up costs and expenses incurred in connection with Borrowers’ initiative regarding Permitted gTLD Investments not in excess of $11,000,000 in the aggregate through September 30, 2014):
	
$__________

	
 
	
 
	
11.
	
Any expenses associated with the early extinguishment of Indebtedness
	
$__________

 

	
 
	
 
	
12.
	
Any extraordinary loss in accordance with GAAP
	
$__________

	
 
	
 
	
13.
	
Any other non-cash charges or expenses for such period that do not represent a cash item for such period or any future period
	
$__________

	
 
	
 
	
14.
	
Any increase in deferred revenue:
	
$__________

	
 
	
 
	
15.
	
Any decrease in deferred registration costs:
	
$__________

	
	 

	
2 
	
 For Lines III.A.2 through III.A.15, include only to the extent deducted in the calculation of Consolidated Net Income in Line III.A.1.

Exhibit A-7

 

	
 
	
 
	
16.
	
Any gains related to foreign currency exchanges, conversions and/or contracts: 3
	
$__________

	
 
	
 
	
17.
	
Gains related to the voluntary withdrawal of an application for gTLD rights:
	
$__________

	
 
	
 
	
18.
	
Any non-recurring or unusual item of gain:
	
$__________

	
 
	
 
	
19.
	
Any decrease in deferred revenue:
	
$__________

	
 
	
 
	
20.
	
Any increase in deferred registration costs:
	
$__________

	
 
	
 
	
21.
	
Consolidated EBITDA (the sum of, without duplication, Lines III.A.1 through III.A.15 minus (III.A.16 through III.A.20))4:
	
$__________

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
Minimum Required
	
 
	
 

	
 
	
 
	
Each fiscal quarter from the present through the fiscal quarter ending September 30, 2016
	
$2,500,000
	
 

	
 
	
 
	
Each fiscal quarter after September 30, 2016
	
$6,000,000
	
 

 

 

 

	
	 

	
3 
	
 For Lines III.A.16 through III.A.20, include only to the extent included in the calculation of Consolidated Net Income in Line III.A.1.

	
4 
	
 Consolidated EBITDA shall be calculated on a Pro Forma Basis with respect to any period for which a Permitted Disposition or an acquisition that is a Permitted gTLD Investment has occurred.

Exhibit A-8

 

Attachment [3][4][5]

to Compliance Certificate

[Attach [description of change in jurisdiction of organization][list of registered Intellectual Property issued to or acquired by a Loan Party][list of Subsidiaries created or acquired]

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