10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30,2014

OR

◻ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File: Number 001‑36262

Rightside Group, Ltd.

(Exact name of registrant as specified in its charter)

Delaware	32‑0415537
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)
5808 Lake Washington Blvd. NE, Suite 300 Kirkland, WA 98033
(Address of principal executive offices)

(425) 298-2500

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒     No  ◻

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ☒    No  ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	◻	Accelerated filer	◻
Non-accelerated filer	☒ (Do not check if a smaller reporting company)	Smaller reporting company	◻

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ◻    No  ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

The number of shares of registrant’s common stock outstanding as of November 10, 2014 was18,492,644.

RIGHTSIDE GROUP, LTD.

QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 2014

TABLE OF CONTENTS

		PAGE
Part 1. - Financial Information		1
Item 1.	Financial Statements (Unaudited)	1
	Balance Sheets	1
	Statements of Operations	2
	Statements of Comprehensive Income (Loss)	3
	Statement of Equity	4
	Statements of Cash Flows	5
	Notes to Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	35
Item 4.	Controls and Procedures	35
Part II.  Other Information		36
Item 1.	Legal Proceedings	36
Item1A.	Risk Factors	36
Item 6.	Exhibits and Financial Statement Schedules	65
SIGNATURES		68
EXHIBIT INDEX		69

PART 1.  FINANCIAL INFORMATION

Item 1.  Financial Statements (Unaudited)

Rightside Group, Ltd.

Balance Sheets

(In thousands, except per share amounts)

(Unaudited)

		September 30,		December 31,
		2014		2013
Assets
Current assets
Cash and cash equivalents	$	50,887	$	66,833
Accounts receivable		19,378		9,176
Prepaid expenses and other current assets		6,006		4,395
Deferred registration costs		73,491		66,273
Total current assets		149,762		146,677
Deferred registration costs		14,309		12,514
Property and equipment, net		11,213		14,456
Intangible assets, net		22,049		15,268
Goodwill		103,042		103,042
Deferred tax assets		8,076		6,314
gTLD deposits		25,765		21,252
Other assets		4,731		1,998
Total assets	$	338,947	$	321,521
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable	$	7,723	$	7,585
Accrued expenses and other current liabilities		20,482		18,787
Debt		1,125		-
Deferred tax liabilities		26,642		24,157
Deferred revenue		92,486		80,999
Total current liabilities		148,458		131,528
Deferred revenue, less current portion		18,760		16,544
Debt, less current portion		24,573		-
Other liabilities		1,052		693
Total liabilities		192,843		148,765
Commitments and contingencies (Note 8)
Stockholders' equity
Common stock, $0.0001 par value per share
Authorized shares: 100,000 and 0
Shares issued and outstanding:18,487 and 0		2
Preferred stock, $0.0001 par value per share
Authorized shares: 20,000 and 0
Shares issued and outstanding:0 and 0		-
Additional paid-in capital		140,426
Accumulated other comprehensive income		-		577
Retained earnings		5,676
Parent company investment		-		172,179
Total stockholders' equity		146,104		172,756
Total liabilities and stockholders' equity	$	338,947	$	321,521

The accompanying notes are an integral part of these financial statements.

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Rightside Group, Ltd.

Statements of Operations

(In thousands, except per share amounts)

(Unaudited)

		Three months ended				Nine months ended
		September 30,				September 30,
		2014		2013		2014		2013
Revenue	$	48,774	$	45,506	$	140,015	$	139,620
Service costs (exclusive of amortization of intangible assets shown separately below)		41,550		37,232		119,612		108,661
Sales and marketing		2,239		2,426		7,210		7,790
Product development		2,667		2,620		9,592		7,865
General and administrative		5,690		6,590		17,869		18,639
Amortization of intangible assets		1,931		1,877		5,530		6,093
Gain on other assets, net		(8,558)		(1,336)		(14,303)		(2,565)
Interest expense		701		-		701		-
Other expense (income), net		65		25		(1,232)		44
Income (loss) before income taxes		2,489		(3,928)		(4,964)		(6,907)
Income tax benefit		(1,608)		(1,366)		(1,650)		(1,930)
Net income (loss)	$	4,097	$	(2,562)	$	(3,314)	$	(4,977)
Net income (loss) per share attributable to common stockholders
Basic	$	0.22	$	(0.14)	$	(0.18)	$	(0.27)
Diluted	$	0.22	$	(0.14)	$	(0.18)	$	(0.27)
Weighted average shares used in computing net income (loss) per share
Basic		18,444		18,413		18,424		18,413
Diluted		18,488		18,413		18,424		18,413

The accompanying notes are an integral part of these financial statements.

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Rightside Group, Ltd.

Statements of ComprehensiveIncome (Loss)

(In thousands)

(Unaudited)

		Three months ended				Nine months ended
		September 30,				September 30,
		2014		2013		2014		2013
Net income (loss)	$	4,097	$	(2,562)	$	(3,314)	$	(4,977)
Other comprehensive income (loss):
Realized gain on available-for-sale securities, net of tax expense of $329		-		-		(577)		-
Comprehensive income (loss)	$	4,097	$	(2,562)	$	(3,891)	$	(4,977)

The accompanying notes are an integral part of these financial statements.

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Rightside Group, Ltd.

Statement of Stockholders’ Equity

(In thousands)

(Unaudited)

	Parent company		Common stock			Additional paid-in		Retained		Accumulated other Comprehensive
	investment		Shares		Amount	capital		earnings		income (loss)		Total
Balances at December 31, 2013	$	172,179	-	$	-	$		$		$	577	$	172,756
Realized gain on available-for-sale securities, net of tax		-									(577)		(577)
Net loss prior to spin-off		(8,990)											(8,990)
Net decrease in parent company investment		(28,045)									-		(28,045)
Capitalization at spin-off		(135,144)	18,413		2		135,142						-
Balances as of August 1, 2014	$	-	18,413	$	2	$	135,142	$	-	$	-	$	135,144
Stock option exercises and vesting of restricted stock units			74		-		44						44
Stock warrants issued							4,441						4,441
Stock-based compensation							799						799
Net income after spin-off									5,676		-		5,676
Balances at September 30, 2014	$	-	18,487	$	2	$	140,426	$	5,676	$	-	$	146,104

The accompanying notes are an integral part of these financial statements.

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Rightside Group, Ltd.

Statements of Cash Flows

(In thousands)

(Unaudited)

		Nine months ended
		September 30,
		2014		2013
Cash flows from operating activities
Net loss	$	(3,314)	$	(4,977)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization		11,560		11,054
Amortization of discount and issuance costs on debt		241		-
Deferred income taxes		(1,670)		(1,936)
Stock-based compensation		4,427		7,271
Gain on gTLD application withdrawals, net		(14,303)		(2,565)
Gain on sale of marketable securities		(1,362)		-
Other		(342)		(760)
Change in operating assets and liabilities:
Accounts receivable, net		(914)		1,093
Prepaid expenses and other current assets		(1,267)		(869)
Deferred registration costs		(9,013)		(8,414)
Deposits with registries		(13)		(400)
Other long-term assets		(1,830)		(1,606)
Accounts payable		(715)		1,759
Accrued expenses and other liabilities		2,852		(1,305)
Deferred revenue		13,702		10,196
Net cash (used in) provided by operating activities		(1,961)		8,541
Cash flows from investing activities
Purchases of property and equipment		(3,632)		(8,149)
Purchases of intangible assets		(1,609)		(2,111)
Payments and deposits for gTLD applications		(19,450)		(405)
Proceeds from gTLD withdrawals, net		10,339		2,876
Change in restricted cash		(345)		-
Proceeds from sale of marketable securities		1,362		-
Other		341		784
Net cash used in investing activities		(12,994)		(7,005)
Cash flows from financing activities
Principal payments on capital lease obligations		(101)		(163)
Proceeds from debt		30,000		-
Proceeds from stock option exercises		44		-
Issuance costs related to debt financings		(3,050)		-
Net (decrease) increase in parent company investment		(27,884)		16,770
Net cash (used in) provided by financing activities		(991)		16,607
Change in cash and cash equivalents		(15,946)		18,143
Cash and cash equivalents, beginning of period		66,833		40,593
Cash and cash equivalents, end of period	$	50,887	$	58,736
Supplemental disclosure of cash flows:
Warrants issued in connection with debt	$	4,441	$	-
Cash paid for interest		432		-

The accompanying notes are an integral part of these financial statements.

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Rightside Group, Ltd.

Notes to Financial Statements (Unaudited)

1.  Company Background, Separation from Demand Media and Basis of Presentation

In February 2013, Demand Media, Inc. (“Demand Media”) announced that its board of directors authorized Demand Media to pursue the separation of its business into two distinct publicly traded entities: a new company named Rightside Group, Ltd. (“Rightside,” the “Company,” “our,” “we,” or “us”) focused on domain name services, and Demand Media, a digital media company. On August 1, 2014, Demand Media consummated a tax free distribution of all of the outstanding shares of our common stock on a pro rata basis to Demand Media stockholders (the “separation” or the “spin‑off”) as of the record date. After the spin‑off, we began operating as an independent, publicly traded company.

We were incorporated on July 11, 2013, as a direct, wholly owned subsidiary of Demand Media, a New York Stock Exchange (“NYSE”) listed company that, prior to the spin-off, was a diversified digital media and domain name services company. Prior to our separation from Demand Media on August 1, 2014, Demand Media owned all of the outstanding shares of our capital stock. We have one class of common stock issued and outstanding, and no preferred stock outstanding. In connection with the spin‑off, Demand Media contributed or transferred certain of the subsidiaries and assets relating to Demand Media’s domain name services business to us, and we or our subsidiaries assumed all of the liabilities relating to Demand Media’s domain name services business.

We provide domain name registration and related value‑added service subscriptions to third parties through our wholly owned subsidiaries, eNom, Incorporated (“eNom”) and Name.com. We are also a significant participant in the substantial expansion of the number of available generic Top Level Domains (“gTLDs”) by the Internet Corporation for Assigned Names and Numbers(“ICANN”), with the first gTLDs delegated in October 2013 (the “New gTLD Program”). As part of the New gTLD Program, our domain name services business entered into its first registry operator agreements with ICANN, becoming an accredited registry for new gTLDs, and eNom and Name.com also entered into contracts necessary to participate in the New gTLD Program. We began to provide back‑end domain name registry and related services for gTLDs owned by third‑party domain name registries and we have operations for our own gTLDs.

Separation from Demand Media

Immediately prior to the separation, the authorized shares of Rightside capital stock were increased from 1,000 shares to 120.0 million shares, divided into the following classes: 100.0 million shares of common stock, par value $0.0001 per share, and 20.0 million shares of preferred stock, par value $0.0001 per share. The 1,000shares of Rightside common stock, par value $0.0001 per share, that were previously issued and outstanding were automatically reclassified as and became 18.4 million shares of common stock, par value $0.0001 per share. The separation was effected by Demand Media through a tax-free dividend involving the distribution of all Rightside common stock held by Demand Media to Demand Media’s stockholders on August 1, 2014.

Upon effectiveness of the separation, holders of Demand Media common stock received one share of Rightside common stock for every five shares of Demand Media common stock they held on the record date. Following completion of the separation, Rightside became an independent, publicly traded company on the NASDAQ Global Select Market using the symbol: “NAME.”

As part of the separation, we entered into various agreements with Demand Media which provide for the allocation between Rightside and Demand Media of certain assets, liabilities, and obligations, and govern the relationship between Rightside and Demand Media after the separation. The agreements became effective as of August 1, 2014, and include the following: Separation and Distribution Agreement, Transition Services Agreement, Employee Matters Agreement and Tax Matters Agreement.

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Basis of Presentation

After the separation on August 1, 2014, our financial statements are presented on a consolidated basis, as we became a separate consolidated group. Our balance sheet, statement of operations, statement of stockholders’ equity and statement of cash flows include the accounts of Rightside and our wholly-owned subsidiaries.  These consolidated financial statements reflect our financial position, results of operations, statement of comprehensive income (loss), equity and cash flows as a separate company and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Prior to the separation on August 1, 2014, our financial statements were prepared on a condensed combined basis and presented as carve-out financial statements, as we were not a separate consolidated group.  Our financial statements were derived from the financial statements and accounting records of Demand Media. 

We have prepared the accompanying unaudited financial statements in accordance with GAAP for interim financial reporting. All intercompany accounts and transactions were eliminated in consolidation. In our opinion, we have included all adjustments necessary for a fair presentation. These adjustments consist of normal recurring items. We will refer to condensed combined and condensed consolidated financial statements as “financial statements,” “balance sheets,” “statement of operations,” “statement of cash flow” and “statement of stockholders’ equity” herein.

Prior to the separation on August 1, 2014, our financial statements assume the allocation to us of certain Demand Media corporate expenses relating to Rightside (refer to Note 13—Transactions with Related Parties and Parent Company Investment for further information). The accounting for income taxes is computed for our company on a separate tax return basis (refer to Note 9—Income Taxes for further information).

All significant intercompany accounts and transactions, other than those with Demand Media, have been eliminated in preparing the financial statements. All transactions between us and Demand Media have been included in these financial statements and are deemed to be settled. The total net effect of the settlement of these transactions is reflected in the statements of cash flow as a financing activity and in the combined balance sheets as “Parent company investment.” Parent company investment in the balance sheets represents Demand Media’s historical investment in our company, the net effect of cost allocations from transactions with Demand Media and our accumulated earnings.

Prior to the separation on August 1, 2014, the financial statements included expense allocations for certain: (1) corporate functions historically provided by Demand Media, including, but not limited to, finance, legal, information technology, human resources, communications, compliance, and other shared services; (2) employee benefits and incentives; and (3)stock‑based compensation.

These expenses have been allocated to us on a direct basis when identifiable, with the remainder allocated on a pro rata basis calculated as a percentage of our revenue, headcount or expenses to Demand Media’s consolidated results. We consider the basis on which these expenses were allocated to be a reasonable reflection of the utilization of services provided to or the benefit received by us during the periods presented. The allocations do not, however, reflect the expense that we would have incurred as an independent company for the periods presented. Actual costs that may have been incurred if we had been a stand‑alone company would depend on a number of factors, including, but not limited to, the chosen organizational structure, the costs of being a stand‑alone publicly traded company, what functions were outsourced or performed by employees and strategic decisions made in areas such as information technology and infrastructure. Following our separation from Demand Media, we will perform these functions using our own resources and purchased services. For an interim period, however, some of these functions will continue to be provided by Demand Media under a transition services agreement, which are planned to extend for a period up to 18 months. Costs incurred by Demand Media to complete the spin‑off were not allocated to us.

We have prepared the unaudited interim financial statements on the same basis as the audited financial statements and have included all adjustments, which include only normal recurring adjustments, necessary for the fair statement of our statement of financial position, results of operations, and cash flows. The results for the three and nine months ended September 30, 2014, are not necessarily indicative of the results expected for the full year. The balance sheet as of December 31, 2013, has been derived from our audited combined financial statements for the year ended

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December 31, 2013, included in our Form 10 as filed with the Securities and Exchange Commission (“SEC”) on July 14, 2014.

The interim unaudited financial statements have been prepared in accordancewith GAAP. They do not include all of the information and footnotes required by GAAP for complete financial statements. Therefore, these financial statements should be read in conjunction with our audited combined financial statements and notes thereto included in our Form 10 as filedwith the SEC on July 14, 2014.

2.  Summary of Significant Accounting Policies

Refer to our audited combined financial statements included in our Form 10 as filed with the SEC on July 14, 2014, for a complete discussion of all significant accounting policies.

Recently Adopted Accounting Guidance

In February 2013, the FASB issued ASU 2013-2, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income (ASU 2013-2), to improve the reporting of reclassifications out of accumulated other comprehensive income. ASU 2013-2 requires presentation, either on the face of the financial statements or in the notes, of amounts reclassified out of accumulated other comprehensive income by component and by net income line item. ASU 2013-2 is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2012. We adopted ASU 2013-2 in the first quarter of fiscal 2014. The adoption of ASU 2013-2 did not have a significant impact on our financial statements, but did require additional disclosures.

Recent Accounting Guidance Not Yet Adopted

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (ASU 2014-09). ASU 2014-09 outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The new model will require revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. The amendments in ASU 2014-09 are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period and early adoption is not permitted. The standard can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. We are currently assessing the impact that this updated standard will have on our financial statements and footnote disclosures.

In June 2014, the FASB issued ASU 2014-12, Compensation - Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide that a Performance Target Could be Achieved after the Requisite Service Period (ASU 2014-12), which requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant date fair value of the award. This update further clarifies that compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. We do not anticipate that the adoption of this standard will have a material impact on our financial statements.

In August 2014, the FASB issued ASU 2014-15 related to going concern. The new guidance explicitly requires that management assess an entity's ability to continue as a going concern and may require additional detailed disclosures. ASU 2014-15 is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted. We do not anticipate that the adoption of this standard will have a material impact on our financial statements.

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3.  Property and Equipment

Property and equipment consisted of the following (in thousands):

		September 30,		December 31,
		2014		2013
Computers and other related equipment	$	15,772	$	19,180
Purchased and internally developed software		19,266		19,546
Furniture and fixtures		906		775
Leasehold improvements		1,329		1,278
Property and equipment, gross		37,273		40,779
Less accumulated depreciation		(26,060)		(26,323)
Property and equipment, net	$	11,213	$	14,456

Depreciation and software amortization expense, including the acceleration of depreciation, as a result of the shortening of the estimated useful lives for certain assets of $0.8 million in the first quarter of 2014, is shown by classification below (in thousands):

		Three months ended				Nine months ended
		September 30,				September 30,
		2014		2013		2014		2013
Service costs	$	1,236	$	1,341	$	4,435	$	3,984
Sales and marketing		8		23		43		76
Product development		28		41		110		133
General and administrative		417		284		1,442		768
Total depreciation and amortization	$	1,689	$	1,689	$	6,030	$	4,961

4.  Intangible Assets

Intangible assets consisted of the following (in thousands):

	September 30, 2014
	Gross
	carrying		Accumulated
	amount		amortization		Net
Owned website names	$	17,204	$	(11,271)	$	5,933
Customer relationships		20,842		(17,938)		2,904
Technology		7,954		(7,907)		47
Non-compete agreements		207		(71)		136
Trade names		5,468		(2,086)		3,382
gTLDs		10,129		(482)		9,647
	$	61,804	$	(39,755)	$	22,049

-9-

	December 31, 2013
	Gross
	carrying		Accumulated
	amount		amortization		Net
Owned website names	$	18,580	$	(11,534)	$	7,046
Customer relationships		20,976		(17,119)		3,857
Technology		7,990		(7,896)		94
Non-compete agreements		207		(42)		165
Trade names		5,468		(1,743)		3,725
gTLDs		381		-		381
	$	53,602	$	(38,334)	$	15,268

Identifiable finite‑lived intangible assets are amortized on a straight‑line basis over their estimated useful lives commencing on the date that the asset is available for its intended use.

Amortization expense by classification is shown below (in thousands):

	Three months ended				Nine months ended
	September 30,				September 30,
	2014		2013		2014		2013
Service costs	$	1,498	$	1,337	$	4,221	$	3,955
Sales and marketing		323		466		924		1,922
Product development		5		5		14		14
General and administrative		105		69		371		202
Total amortization	$	1,931	$	1,877	$	5,530	$	6,093

Estimated future amortization expense related to intangible assets held at September 30, 2014 (in thousands):

Years Ending December 31,		Amount
2014 (October 1, 2014, to December 31, 2014)	$	1,883
2015		5,162
2016		3,380
2017		2,052
2018		1,897
Thereafter		7,675
Total	$	22,049

5.  Other Assets

Other long‑term assets and gTLD deposits consisted of the following (in thousands):

	September 30,		December 31,
	2014		2013
Deposits for gTLD applications	$	25,765	$	21,252
Other		4,731		1,998
Other assets	$	30,496	$	23,250

We paid $19.5 million during the nine months ended September 30, 2014, and $3.9 million during the year ended December 31, 2013, for certain gTLD applications under the New gTLD Program. Payments for gTLD applications represent amounts paid directly to ICANN or third parties in the pursuit of gTLD operator rights, the

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majority of which was paid to Donuts Inc. as described in Note 8— Commitments and Contingencies. These deposits would be applied to the purchase of the gTLD if we are awarded the gTLD operator rights or these deposits may be returned to us if we withdraw our interest in the gTLD application.

The net gain related to the withdrawals of our interest in certain gTLD applications was $8.6 million for the three months ended September 30, 2014, and $14.3 million for the nine months ended September 30, 2014. The net gain related to the withdrawals of our interest in certain gTLD applications was $1.3 million for the three months ended September 30, 2013, and $2.6 million for the nine month periods ended September 30, 2013. We recorded these gains in gain on other assets, net on the statements of operations.

Other assets include $1.2 million as of September 30, 2014, and $0.9 million as of December 31, 2013, of restricted cash comprising a collateralized letter of credit connected with the SVB Credit Facility. Subsequent to September 30, 2014, the restriction was released and we reclassified the $1.2 million to cash and cash equivalents. .  

6.  Other Balance Sheet Items

Accounts receivable consisted of the following (in thousands):

	September 30,		December 31,
	2014		2013
Accounts receivable—trade	$	6,377	$	5,515
gTLD deposit receivable		9,080		-
Receivables from registries		3,921		3,661
Accounts receivable	$	19,378	$	9,176

Based on the nature of our business transactions, we do not have an allowance for uncollectible receivables.

Accrued expenses and other current liabilities consisted of the following (in thousands):

	September 30,		December 31,
	2014		2013
Customer deposits	$	8,116	$	7,065
Accrued payroll and related items		2,980		3,052
Commissions payable		2,189		2,209
Domain owners’ royalties payable		1,262		1,193
Other		5,935		5,268
Accrued expenses and other current liabilities	$	20,482	$	18,787

7.  Debt

Silicon Valley Bank Credit Facility

In August 2014, we entered into a $30.0 million revolving credit facility (“SVB Credit Facility”) with Silicon Valley Bank (“SVB”). Under this facility we may repay and reborrow until the maturity date in August 2017. The SVB Credit Facility includes a letter of credit sub-limit of up to $15.0 million. 

The SVB Credit Facility provides us with the option to select the annual interest rate on borrowings in an amount equal to: (1) a base rate determined by reference to the highest of: (a) the prime rate; (b) 0.50% per annum above the federal funds effective rate; and (c) the Eurodollar base rate for an interest period of one month plus 1.00%, plus a margin ranging from 1.00% to 1.50%, depending on our consolidated senior leverage ratio (as determined under the SVB Credit Facility), or (2) a Eurodollar base rate determined by reference to LIBOR for the interest period equivalent to such

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borrowing adjusted for certain reserve requirements, plus a margin ranging from 2.00% to 2.50%, depending on our consolidated senior leverage ratio (as determined under the SVB Credit Facility).

We pay fees on the portion of the facility that is not drawn.  The unused fee is payable to SVB in arrears on a quarterly basis in an amount equal to 0.250% multiplied by the daily amount by which the aggregate commitments exceed the sum of the outstanding amount of loans and the outstanding amount of letter of credit obligations.

The SVB Credit Facility allows SVB to require mandatory prepayments of outstanding borrowings from amounts otherwise required to prepay term loans under the Tennenbaum Credit Facility.

The SVB Credit Facility contains customary representations and warranties, events of default and affirmative and negative covenants. This facility has financial covenants, including a requirement that we maintain a minimum consolidated fixed charge coverage ratio, a maximum consolidated senior leverage ratio, a maximum consolidated net leverage ratio, and minimum liquidity.  As of September 30, 2014, we were in compliance with the covenants under the SVB Credit Facility.

We incurred $0.5 million in fees to establish this facility that we have capitalized on our balance sheet as deferred financing costs, which we will amortize on a straight-line basis into interest expense over the term of the SVB Credit Facility. As of September 30, 2014, we had letters of credit with a face amount of $11.0 million that were issued under the SVB Credit Facility.  We have made no other borrowings under this facility.

Tennenbaum Credit Facility

In August 2014, we entered into a $30.0 million term loan credit facility with certain funds managed by Tennenbaum Capital Partners LLC (the “Tennenbaum Credit Facility”). Under this facility, interest is based on a rate per year equal to LIBOR plus 8.75%. Interest on the term loans is payable quarterly, beginning September 30, 2014. Quarterly principal payments of $375,000 on the term loan begin March 31, 2015. Once repaid, the term loans may not be reborrowed. All amounts outstanding under the facility are due and payable in full on the maturity date in August 2019. We may prepay any principal amount outstanding on the term loan plus a premium of 4.00% (if prepaid in the first year), 2.50% (second year), 1.00% (third year), and 0.00% thereafter, plus customary “breakage” costs with respect to LIBOR loans.

Under this facility we are subject to mandatory prepayments from 50% of excess cash flow, which is paid on the first of the following to occur:  (1) maturity, termination or refinancing of the SVB Credit Facility or the acceleration and termination of the SVB Credit Facility, or (2) from the excess cash flow as of December 31, 2014, and each subsequent fiscal year thereafter.  In addition, mandatory prepayments, to the extent not used to prepay loans and cash collateralize letters of credit and permanently reduce the commitments under the SVB Credit Facility, are required from certain asset sales and insurance and condemnation events, subject to customary reinvestment rights. Mandatory prepayments are also required from the issuances of certain indebtedness. These mandatory prepayments are subject to a prepayment premium that is the same as for voluntary prepayments.

The Tennenbaum Credit Facility contains financial covenants and customary representations and warranties, events of default and affirmative and negative covenants. As of September 30, 2014, we were in compliance with the covenants under the Tennenbaum Credit Facility.

In connection with the Tennenbaum Credit Facility, we issued warrants to purchase up to an aggregate of 997,710 shares of common stock. The warrants have an exercise price of $15.05 per share and will be exercisable in accordance with their terms at any time on or after February 6, 2015, through August 6, 2019. The warrants contain a “cashless exercise” feature that allows the warrant holders to exercise such warrants by surrendering a number of shares underlying the portion of the warrant being exercised with a fair market value equal to the aggregate exercise price payable to us.

We estimated the fair value of the warrants by using the Black-Scholes Option Pricing Method ("Black-Scholes"). Under the Black-Scholes approach our key assumptions included the following: stock price of $14.49, strike

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price of $15.05, volatility of 42.44%, risk-free rate of 1.67%, dividend yield of 0% and 5 year term. We used the resulting fair value to allocate the proceeds from the Tennenbaum Credit Facility between liability and equity.

Since the warrants are classified as equity, we allocated the proceeds from the debt and warrants using the relative fair value method.  Under this method we allocated $4.4 million to the warrants which we recorded to equity, with the remaining portion assigned to the liability component.  The excess of the principal amount of the credit facility over its carrying value of $25.6 million represents a note discount that we will amortize to interest expense over the term of the Tennenbaum Credit Facility.

We incurred $3.2 million in fees to establish the Tennenbaum Credit Facility that we have capitalized on our balance sheet as deferred financing costs, which we will amortize on an effective interest method into interest expense over the term of the SVB Credit Facility.

We estimated the fair value of the Tennenbaum Credit Facility using a discounted cash flow model with Level 3 inputs.  Under this approach, we estimated the fair value to approximate its carrying value of $25.7 million as of September 30, 2014.

The following table presents our debt outstanding on the Tennenbaum Credit Facility (in thousands):

	September 30, 2014
Principal	30,000
Unamortized note discount	(4,302)
Carrying value	25,698

The following table presents the interest expense on the Tennenbaum Credit Facility (in thousands):

	Three months ended						Nine months ended
	September 30,						September 30,
	2014			2013			2014			2013
Contractual interest expense	$	424		$	-		$	424		$	-
Amortization of issuance costs		100			-			100			-
Amortization of note discount		138			-			138			-
Total	$	662		$	-		$	662		$	-
Effective interest rate		16.4	%		-	%		16.4	%		-

8.  Commitments and Contingencies

Leases

We conduct our operations utilizing leased office facilities in various locations and lease certain equipment under non‑cancelable operating and capital leases. Our leases expire between August 2015 and April 2019. In February 2014, we executed the First Amendment to Lease to obtain additional space for our headquarters in Kirkland, Washington and to extend the lease to April 2019. 

Letters of Credit

We have issued letters of credit totaling $11.0 million under our SVB Credit Facility as of September 30, 2014.

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Credit Facilities

In August 2014, we entered into the $30.0 million Tennenbaum Credit Facility, which matures in August 2019. The principal amount of the term loans is scheduled to be repaid in quarterly installments of $375,000 beginning March 31, 2015. Once repaid, term loans may not be reborrowed. All amounts outstanding under the facility are due and payable in full on the maturity date in August 2019.

Litigation

From time to time, we are party to various litigation matters incidental to the conduct of our business. There is no pending or threatened legal proceeding to which we are a party that, in our belief, is likely to have a material adverse effect on our future financial results.

Taxes

From time to time, various federal, state and other jurisdictional tax authorities undertake review of us and our filings. In evaluating the exposure associated with various tax filing positions, we accrue charges for possible exposures. We believe any adjustments that may ultimately be required as a result of any of these reviews will not be material to our financial statements.

Domain Name Agreement

On April 1, 2011, we entered into an agreement with a customer to provide domain name registration services and manage certain domain names owned and operated by the customer (the “Domain Agreement”). In December 2013, we amended the Domain Agreement (as amended, the “Amended Domain Agreement”). The term of the Amended Domain Agreement expires on December 31, 2014, but will automatically renew for an additional one‑year period unless terminated by either party. Pursuant to the Amended Domain Agreement, we are committed to purchase approximately $0.2 million of expired domain names every calendar quarter over the remaining term of the agreement.

Donuts Agreement

As part of our initiative to pursue the acquisition of gTLD operator rights, we have entered into a gTLD acquisition agreement (“gTLD Agreement”) with Donuts Inc. (“Donuts”). The gTLD Agreement provides us with rights to acquire the operating and economic rights to certain gTLDs. These rights are shared equally with Donuts and are associated with specific gTLDs (“Covered gTLDs”) for which Donuts is the applicant under the New gTLD Program. We have the right, but not the obligation, to make further deposits with Donuts in the pursuit of acquisitions of Covered gTLDs, for example as part of the ICANN auction process. The operating and economic rights for each Covered gTLD will be determined through a process whereby we and Donuts each select gTLDs from the pool of Covered gTLDs, with the number of selections available to each party based upon the proportion of the total acquisition price of all Covered gTLDs that they funded. Gains on sale of our interest in Covered gTLDs will be recognized when realized, while losses will be recognized when deemed probable. Separately, we entered into an agreement to provide certain back‑end registry services for gTLD operator rights owned by Donuts for a period of five years commencing from the launch of Donut’s first gTLD. Outside of the collaboration, we are not an investor in Donuts nor involved in any joint venture with Donuts or its affiliates.

Indemnifications Arrangements

In the normal course of business, we have made certain indemnities, commitments and guarantees under which we may be required to make payments in relation to certain transactions. Those indemnities include intellectual property indemnities to our customers, indemnities to our directors and officers to the maximum extent permitted under the laws of the State of Delaware and indemnities related to our lease agreements. In addition, our advertiser and distribution partner agreements contain certain indemnification provisions, which are generally consistent with those prevalent in our industry. We have not incurred significant obligations under indemnification provisions historically and do not expect to

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incur significant obligations in the future. Accordingly, we have not recorded any liability for these indemnities, commitments and guarantees in the balance sheets.

9.  Income Taxes

Our effective tax rate differs from the statutory rate primarily as a result of state taxes and nondeductible stock option expenses. The effective tax rate was (64.6%) for the three months ended September 30, 2014, and 33.2% for the nine months ended September 30, 2014, compared to 34.8% for the three months ended September 30, 2013, and 27.9% for the nine months ended September 30, 2013.

We recorded an income tax benefit of $1.6 million during the three months ended September 30, 2014, compared to an income tax benefit of $1.4 million during the same period in 2013. The increase was primarily due to increased book losses from our domestic operations during the period, which were not offset by books gains in our international operations.  

We recorded an income tax benefit of $1.6 million during the nine months ended September 30, 2014, compared to an income tax benefit of $1.9 million during the same period in 2013, representing a decreased benefit of $0.3 million. The decreased benefit was primarily due to the reversal of deferred tax assets as a result of cancelled stock options in the 2014 periods as compared to the 2013 periods.

We are subject to the accounting guidance for uncertain income tax positions. We believe that our income tax positions and deductions will be sustained on audit and do not anticipate any adjustments that will result in a material adverse effect on our financial condition, results of operations, or cash flow.

Our policy for recording interest and penalties associated with audits and uncertain tax positions is to record such items as a component of income tax expense, and amounts recognized to date are insignificant. No uncertain income tax positions were recorded during the three or nine months ended September 30, 2014 or 2013, and we do not expect our uncertain tax position to change materially during the next 12 months. We file a U.S. federal and many state tax returns as well as tax returns in multiple foreign jurisdictions. All tax years since our incorporation remain subject to examination by the Internal Revenue Service and various state authorities.

10.  Employee Benefit Plan

We have a defined contribution plan under Section 401(k) of the Internal Revenue Code (the “401(k) Plan”) covering all our full‑time employees who meet certain eligibility requirements. Eligible employees may defer up to 90% of their pre‑tax eligible compensation, up to the annual maximum allowed by the Internal Revenue Service. Effective January 1, 2013, we began matching a portion of the employee contributions under the 401(k) Plan up to a defined maximum. Our contributions to the 401(k) Plan were $0.2 million, and $0.1 millionfor the three months ended September 30, 2014 and 2013, and $0.5 million and $0.4 million for the nine months ended September 30, 2014 and 2013.

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11.  Stock‑based Compensation

Our stock-based award plan grants restricted stock, stock options, stock bonuses, stock appreciation rights, and restricted stock units (“RSUs”).

On August 1, 2014, as part of the spin-off and the resulting conversion of equity awards, we had 1.1 million RSUs and options outstanding. Stock option holders received one Rightside stock option for every five Demand Media stock options.  Holders of RSUs received 1.71 Rightside RSUs for every five Demand Media RSUs.

In August 2014, we granted 0.4 million RSUs related to new employee, executive and board of director grants. The stock-based award information presented in this note has been updated to reflect the conversion of equity awards that occurred on August 1, 2014.

As of September 30, 2014, we had 2.6 million shares of common stock reserved for future grants under our equity plan.  Our stock-based awards generally vest over four years and are subject to the employee’s continued employment with us.  We also estimate forfeiture rates at the time of grants and revise the estimates in subsequent periods if actual forfeitures differ from our estimates. We record share-based compensation net of estimated forfeitures.

The following table summarizes the stock‑based compensation expense related to stock‑based awards that has been included in the following line items within the statements of operations for each of the periods presented (in thousands):

	Three months ended				Nine months ended
	September 30,				September 30,
		2014		2013		2014		2013
Service costs	$	90	$	117	$	272	$	341
Sales and marketing		149		421		992		1,253
Product development		202		389		781		869
General and administrative		715		1,577		2,381		4,808
Total stock-based compensation expense	$	1,156	$	2,504	$	4,426	$	7,271

The following table presents our stock option activity for the nine months ended September 30, 2014, recast to reflect the conversion of five Demand Media stock options to one Rightside stock option on August 1, 2014 (in thousands, except for per share amounts and contractual term):

	Shares		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding as of December 31, 2013		335	$	15.42		-	$	167
Exercised		(6)		7.88		-
Outstanding as of September 30, 2014		329		15.55		4.56		157
Exercisable as of September 30, 2014		329		15.55		4.56		157

The following table presents a summary of restricted stock unit award activity for the nine months ended September 30, 2014, recast to reflect the conversion of five Demand Media RSUs to 1.71 Rightside RSUs (in thousands, except for per share amounts):

	Shares		Weighted Average Share Value
Outstanding as of December 31, 2013		679	$	24.54
Granted		537		12.77
Vested		(106)		23.68
Cancelled		(48)		20.56
Outstanding as of September 30, 2014		1,062		18.82

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As of September 30, 2014, we had $8.7 million of unrecognized stock-based compensation, net of estimated forfeitures, which is expected to be recognized over a weighted average period of 2.9 years.

12.  Business Segments

We operate in one operating segment. Our chief operating decision maker (“CODM”) manages our operations on a combined basis for purposes of evaluating financial performance and allocating resources. The CODM reviews separate revenue information for our domain name services and aftermarket services. All other financial information is reviewed by the CODM on a combined basis. Our operations are located in the United States, Ireland, Canada, Australia and Cayman Islands. Revenue generated outside of the United States is not material for any of the periods presented.

Revenue derived from our Domain name services and Aftermarket and other service offering is as follows (in thousands):

	Three months ended				Nine months ended
	September 30,				September 30,
	2014		2013		2014		2013
Domain name services	$	41,332	$	36,034	$	118,432	$	104,366
Aftermarket and other		7,442		9,472		21,583		35,254
Total revenue	$	48,774	$	45,506	$	140,015	$	139,620

13.  Transactions with Related Parties and Parent Company Investment

Prior to the separation on August 1, 2014, our financial statements included direct costs of Rightside incurred by Demand Media on our behalf and an allocation of certain general corporate costs incurred by Demand Media. Direct costs include finance, legal, human resources, technology development, and other services and have been determined based on a direct basis when identifiable, with the remainder allocated on a pro rata basis calculated as a percentage of our revenue, headcount or expenses to Demand Media’s consolidated results. General corporate costs include, but are not limited to, executive oversight, accounting, internal audit, treasury, tax, and legal. The allocations of general corporate costs are based primarily on estimated time incurred and/or activities associated with us. Management believes the allocations of corporate costs from Demand Media are reasonable. Costs incurred by Demand Media to complete the spin‑off have not been allocated to us. However, the financial statements may not include all of the costs that would have been incurred had we been a stand‑alone company during the periods presented and may not reflect our financial position, results of operations and cash flows had we been a stand‑alone company during the periods presented.

Prior to the separation on August 1, 2014, we recorded the following costs incurred and allocated by Demand Media in our statements of operations as follows (in thousands):

	Three months ended				Nine months ended
	September 30,				September 30,
	2014		2013		2014		2013
Service costs	$	899	$	2,822	$	6,231	$	8,125
Sales and marketing		80		527		1,499		1,654
Product development		180		446		2,280		1,161
General and administration		1,758		5,189		11,500		15,079
Total allocated expenses	$	2,917	$	8,984	$	21,510	$	26,019

The table above includes allocated stock‑based compensation of $0.1 million and $1.4 million for the three months ended September 30, 2014 and 2013, and $0.8 million and $4.4 million for the nine months ended September 30, 2014 and 2013, for the employees of Demand Media whose cost of services was partially allocated to us.

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The table below presents the activity that comprises the decrease in parent company investment for the nine months ended September 30, 2014 (in thousands):

		Nine months ended
		September 30, 2014
Cash transfer to Demand Media, net	$	45,735
Stock based compensation from equity awards		(809)
Allocated expenses, assets and liabilities, net		(16,881)
Net decrease in parent company investment	$	28,045

14.  Fair Value of Financial Instruments

Fair value represents the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. We measure our financial assets and liabilities in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value.

· Level 1—valuations for assets and liabilities traded in active exchange markets, or interest in open‑end mutual funds that allow a company to sell its ownership interest back at net asset value on a daily basis. Valuations are obtained from readily available pricing sources for market transactions involving identical assets, liabilities or funds.

· Level 2—valuations for assets and liabilities traded in less active dealer, or broker markets, such as quoted prices for similar assets or liabilities or quoted prices in markets that are not active. Level 2 includes U.S. Treasury, U.S. government and agency debt securities, and certain corporate obligations. Valuations are usually obtained from third‑party pricing services for identical or comparable assets or liabilities.

· Level 3—valuations for assets and liabilities that are derived from other valuation methodologies, such as option pricing models, discounted cash flow models and similar techniques, and not based on market exchange, dealer, or broker traded transactions. Level 3 valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets or liabilities.

In determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and consider counterparty credit risk in our assessment of fair value.

We chose not to elect the fair value option for our financial assets and liabilities that had not been previously carried at fair value. Therefore, material financial assets and liabilities not carried at fair value, such as trade accounts receivable, trade payables and debt, are reported at their carrying values.

The carrying amounts of our financial instruments, including cash and cash equivalents, accounts receivable, receivables from domain name registries, registry deposits, restricted cash, accounts payable, debt, accrued liabilities and customer deposits approximate fair value because of their short maturities. Our investments in marketable securities are recorded at fair value. Certain assets, including equity investments, investments held at cost, goodwill and intangible assets are also subject to measurement at fair value on a nonrecurring basis, if they are deemed to be impaired as the result of an impairment review.

The cost of marketable securities sold is based upon the specific identification method and any realized gains or losses on the sale of investments are reflected as a component of other income or expense. For the year ended December 31, 2013, unrealized gain on marketable securities was $0.9 million. During the first quarter 2013, we sold all of our marketable securities, resulting in a reclassification of $0.9 million of unrealized gain on marketable securities

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from accumulated other comprehensive income to other (expense)income, net. The sale of our marketable securities resulted in total realized gains of $1.4 million, which are included in other income (expense), net.

15. Earnings (loss) per share

Basic and diluted earnings (loss) per share were calculated using the following (in thousands, except per share amounts):

	Three months ended				Nine months ended
	September 30,				September 30,
	2014		2013		2014		2013
Net income (loss)	$	4,097	$	(2,562)	$	(3,314)	$	(4,977)
Weighted average number of shares outstanding:
Basic		18,444		18,413		18,424		18,413
Dilutive effect of stock-based equity awards		44		0		0		0
Dilutive effect of warrants		0		0		0		0
Diluted		18,488		18,413		18,424		18,413
Net income (loss) per share attributable to common stockholders
Basic	$	0.22	$	(0.14)	$	(0.18)	$	(0.27)
Diluted	$	0.22	$	(0.14)	$	(0.18)	$	(0.27)

On August 1, 2014, the 1,000 shares of Rightside common stock, par value $0.0001 per share, issued and outstanding immediately prior to the separation from Demand Media, Inc. were automatically reclassified as and became 18.4 million shares of common stock, par value $0.0001 per share. Basic and diluted earnings per share and the weighted average number of shares outstanding were retrospectively updated to reflect thesetransactions.

16. Subsequent Events

Namecheap Senior Unsecured Promissory Note Receivable

In October 2014, we entered into an agreement with Namecheap, Inc. (“Namecheap”), whereby Namecheap issued a Senior Unsecured Promissory Note (the “Note”) to us for $2.5 million that accrues interest at a rate determined in part by reference to the six-month LIBOR rate. Namecheap may use the proceeds from the Note for general corporate purposes. Once the Note has been repaid by Namecheap, no portion of the Note may be reborrowed.

The Note matures on December 31, 2014, and may be extended by Namecheap up to one additional year for a maturity date through December 31, 2015, if certain conditions are met. The Note is unsecured, but we shall have a first priority lien if Namecheap proposes to raise new secured debt in excess of an agreed minimum amount. The Note is guaranteed on a senior basis by each domestic subsidiary of Namecheap.

gTLD Application Withdrawal Gain

During October 2014 we recorded a gain on other assets of $7 million due to payments received in exchange for the withdrawals of our interest in certain gTLD applications.

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

As used herein, “Rightside,” the “Company,” “our,” “we,” or “us” and similar terms include Rightside Group, Ltd. and its subsidiaries, unless the context indicates otherwise. “Rightside” and our other trademarks appearing in this report are our property. This report contains additional trade names and trademarks of other companies. We do not intend our use or display of other companies’ trade names or trademarks to imply an endorsement

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or sponsorship of us by such companies, or any relationship with any of these companies.  Throughout this Management’s Discussion and Analysis, where we provide discussion of the three and nine months ended September 30, 2014, compared to the same periods in 2013, we refer to the prior period as “2013”. 

We were incorporated as a Delaware corporation on July 11, 2013. Prior to our spin-off from Demand Media, Inc. on August 1, 2014, we did not have any material assets or liabilities, nor did we engage in any business or other activities. Our domestic operations have historically been conducted primarily through eNom, Incorporated and its subsidiaries. The following discussion describes our financial condition and results of operations as though we were a separate company as of the dates and for the periods presented, and includes the businesses, assets, and liabilities that comprise Rightside following the spin-off. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited interim condensed combined financial statements and related notes included elsewhere in this report.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our future results of operations and financial position, business strategy and plans, in particular with regard to gTLDs, our objectives for future operations, the effect of the spin-off, and competition and changes to the governing rules in the domain name services industry are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “predict,” “plan” and similar expressions are intended to identify forward-looking statements. You should not rely upon forward-looking statements as guarantees of future performance. We have based these forward-looking statements largely on our estimates of our financial results and our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in the section entitled “Risk Factors” in Part II. Item 1A of this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. We undertake no obligation to revise or update any forward-looking statements for any reason after the date of this Quarterly Report on Form 10-Q, except as required by law.

Separation from Demand Media

Prior to August 1, 2014, Rightside was a wholly owned subsidiary of Demand Media, Inc. (“Demand Media”). In February 2013, Demand Media announced that its board of directors authorized Demand Media to pursue the separation of its business into two distinct publicly traded companies: Rightside Group, Ltd., focused on domain name services, and Demand Media, Inc., a digital media company. In January 2014, we received a private letter ruling from the Internal Revenue Service (“IRS”) confirming that the separation and the distribution of shares of Rightside common stock qualifies as a transaction that is tax-free for U.S. federal income tax purposes. On July 15, 2014, Demand Media announced that the SEC had declared the Rightside Registration Statement on Form 10 effective and that the board of directors of Demand Media had approved the separation of Rightside from Demand Media in the form of a tax-free dividend involving the distribution of all outstanding shares of Rightside common stock to holders of Demand Media common stock on August 1, 2014. Immediately prior to the separation, the authorized shares of Rightside capital stock were increased from 1,000 shares to 120.0 million shares, divided into the following classes: 100.0 million shares of common stock, par value $0.0001 per share, and 20.0 million shares of preferred stock, par value $0.0001 per share. The 1,000 shares of Rightside common stock, par value $0.0001 per share, that were previously issued and outstanding were automatically reclassified as and became 18.4 million shares of common stock, par value $0.0001 per share. Upon the separation, holders of Demand Media common stock received one share of Rightside common stock for every five shares

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of Demand Media common stock held on the record date. Following completion of the separation, Rightside became an independent, publicly traded company on the NASDAQ Global Select Market using the symbol: “NAME.”

Overview

We are a leading provider of domain name services that enable businesses and consumers to find, establish, and maintain their digital address—the starting point for connecting with their online audience. Millions of digital destinations and thousands of resellers rely upon our comprehensive platform for the discovery, registration, usage and monetization of domain names. As a result, we are a leader in the multi‑billion dollar domain name services industry, with a complete suite of services that our customers use as the foundation to build their entire online presence.

We are one of the world’s largest registrars, offering domain name registration and other related services to resellers and directly to domain name registrants. Through our eNom brand, we provide infrastructure services that enable a network of more than 20,000 active resellers to offer domain name registration services to their customers. Further, through our retail brands, including Name.com, we directly offer domain name registration services to more than 275,000 customers. As of September 30, 2014, we had more than 16 million domain names under management. In addition to domain name registration and related services, we have developed proprietary tools and services that identify and acquire, as well as monetize and sell, domain names, both for our own portfolio of names as well as for our customers’ domain names.

We are also positioned to become a leading domain name registry through our participation in the New gTLD Program (as defined below under the section entitled “Opportunities, Challenges and Risks”). To capitalize on this opportunity, we have made significant organizational and technical investments required to operate a domain name registry. To date, we have launched into the marketplace 31 gTLDs, including,  .Rocks, .Immobilien, .Attorney and.Ninja.  We currently have an interest in active applications or registry operator agreements for approximately 75 new gTLDs. The combination of our existing registrar business and our new registry business will make us one of the largest providers of end‑to‑end domain name services in the world and uniquely positions us to capitalize on the New gTLD Program.

We are a Delaware corporation headquartered in Kirkland, Washington. We generate the substantial majority of our revenue through domain name registration subscriptions and related value‑added services. We also generate revenue from advertising on, and from the sale of domain names that are registered to our customers or ourselves.

Our revenue was $140.0 million and $139.6 million for the nine months ended September 30, 2014 and 2013. 

Key Business Metrics

We review a number of business metrics, including the following key metrics, to evaluate our business, measure the performance of our business model, identify trends impacting our business, determine resource allocations, formulate financial projections and make strategic business decisions. We believe the following measures are the primary indicators of our performance:

· domain: We define a domain as an individual domain name paid for by a third-party customer where the domain name is managed through our registrar service offering and for which we have recognized revenue. 

· average revenue per domain: We calculate average revenue per domain by dividing domain name services revenue for a period by the average number of domain names registered on our registrar platform in that period. The average number of domain names is the simple average of the number of domain names at the beginning and end of the period. The average revenue per domain name for partial year periods is annualized. 

· renewal rate:  We define the renewal rate as the percentage of domain names on our registrar platform that are renewed after expiration of their original term.

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The following table sets forth performance highlights of key business metrics for the periods presented (in millions, except for per domain and percentage data):

	Three months ended								Nine months ended
	September 30,						%		September 30,						%
	2014			2013			Change		2014			2013			Change
End of period domains		15.8			14.4		9.0	%		15.8			14.4		9.0	%
Average revenue per domain	$	10.56		$	10.12		4.3	%	$	10.32		$	9.94		5.5	%
Renewal rate		72.5	%		69.5	%				73.0	%		69.1	%

Opportunities, Challenges and Risks

Substantially all of our revenue is derived from domain name registrations and related value‑added service subscriptions from our wholesale and retail customers of our registrar platform. Growth in our revenue is dependent upon our ability to attract wholesale and retail customers to our registrar platform, to sustain those recurring revenue relationships by maintaining consistent domain name registration and value‑added service renewal rates and to grow those relationships through competitive pricing on domain name registrations, differentiated value‑added services, customer service offerings, and best‑in‑class reseller integration tools. Over the past few years our revenue growth has been driven by the addition of reseller customers with large volumes of domain names as well as the acquisition of Name.com, a leading retail registrar. Certain of these large customers account for a significant portion of our revenue, and from time to time, we enter into multi‑year agreements with those customers. For example, our top three customers account for 25% of our consolidated revenue for the nine months ended September 30, 2014. We also generate advertising revenue through our monetization platform for websites or domain names that we or our customers own. The revenue associated with these websites has recently experienced flat to declining trends due to lower traffic and advertising yields in the marketplace, which we expect to continue.

Going forward, we are diversifying our service offerings and expect to be a leading platform for offering new gTLDs, which we believe will help us attract new wholesale and retail customers as well as grow domain name registration volumes with existing customers.

The Internet Corporation for Assigned Names and Numbers (“ICANN”) has approved a framework for the significant expansion of the number of gTLDs, which ICANN began delegating in the fourth quarter of 2013 (the “New gTLD Program”). We believe that such expansion could result in an increase in the number of domain names registered on our platform. In addition to wholesale and retail customer growth opportunities in our existing registrar business, the New gTLD Program provides us with new revenue opportunities, such as the opportunity to provide the technical infrastructure for new gTLD registries operated by third parties. We also began generating cash sales as the exclusive registry operator for our portfolio of new gTLDs in the first quarter of 2014.

We incurred approximately $8.4 million of expenses related to the New gTLD Program for the year ended December 31, 2013, and $6.6 million for the nine months ended September 30, 2014. We paid $3.9 million during the year ended December 31, 2013, and $18.2 million during the year ended December 31, 2012, for certain gTLD applications under the New gTLD Program. Payments for gTLD applications represent amounts paid directly to ICANN and third parties in the pursuit of certain exclusive gTLD operator rights. We capitalized payments made for gTLD applications that are determined to embody a probable economic benefit, and such capitalized payments are included in other long‑term assets and intangible assets. As part of the New gTLD Program, we have received partial cash refunds for certain gTLD applications and to the extent we elect to sell or dispose of certain gTLD applications throughout the process, we will continue to incur gains or losses on amounts invested. Gains on the sale of our interest in gTLDs are recognized when realized, while losses are recognized when deemed probable. Upon the delegation of operator rights for each gTLD by ICANN, which commenced in December 2013, gTLD application fees are reclassified as finite‑lived intangible assets and amortized on a straight‑line basis over their estimated useful life. We expense as incurred other costs incurred as part of this gTLD initiative and not directly attributable to the acquisition of gTLD operator rights.

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Our service costs, the largest component of our operating expenses, can vary from period to period, particularly as a percentage of revenue. As a result of our recent growth having largely been driven by reseller customers with large volumes of domain names but from which we realize lower margins and a decreasing mix of the higher margin Aftermarket revenue, service costs as a percentage of revenue increased in 2014 compared to 2013.

Historically, our marketing expense has reflected our wholesale registrar’s ability to leverage the existing marketing and customer relationships of its reseller base. We expect marketing investments to grow as we promote our Name.com retail registrar and New gTLD Program. Marketing activity will primarily flow through our sales and marketing expense line item, although to the extent that our registry offers performance incentive rebates or other business incentives to our partners, those incentives will be recognized as a reduction to revenue.

We believe that these factors, together with costs associated with our preparation for new gTLDs, which became available for registration in the fourth quarter of 2013, will compress our operating margin in the short term as we increase our investment in new business initiatives to support future growth. However, over the long term, we expect our overall operating margins to increase as the registry business becomes a larger contributor to our overall revenue mix, as registry‑related revenue streams are expected to have higher margins over the long term than our existing registrar business.

Basis of Presentation

The businesses included within Rightside have historically operated as part of Demand Media and not as a separate stand‑alone entity. Prior to the separation on August 1, 2014, our financial statements have been prepared on a “carve‑out” basis from the consolidated financial statements of Demand Media to represent our financial position and operating results as if we had existed on a stand‑alone basis during the periods presented. Our financial statements have been derived from the consolidated financial statements and accounting records of Demand Media using the historical results of operations and historical basis of attributed assets and liabilities of Rightside’s business. These historical financial statements reflect our financial position, results of operations and cash flows in conformity with generally accepted accounting principles (“GAAP”). Our financial statements include certain assets, liabilities, revenue and expenses of Demand Media, which were allocated for certain functions, including general corporate expenses related to finance, legal, information technology, human resources, shared services, insurance, employee benefits and incentives, and stock‑based compensation. These attributed assets, liabilities, revenue and expenses have been allocated to us on the basis of direct usage when identifiable, and for resources indirectly used by us, allocations were based on relative headcount, revenue, or other methodology, to reflect estimated usage by the Rightside business. Management considers the allocation methodology and results to be reasonable for all periods presented. However, these allocations may not be indicative of the actual results that we would have incurred as an independent public company or of the results expected to occur in the future. As such, the financial statements included herein may not necessarily reflect our results of operations, financial position or cash flows in the future or what our results of operations, financial position or cash flows would have been had we been an independent company during the periods presented.

Revenue

Our revenue is principally comprised of registration fees charged to businesses and consumers in connection with new, renewed and transferred domain name registrations. In addition, our registrar also generates revenue from the sale of other value‑added services that are designed to help our customers easily build, enhance and protect their domain names, including security services, email accounts and web hosting, and the performance of services for registries. Finally, we generate advertising and domain name sales revenue as part of our aftermarket service offering. We generate this aftermarket revenue on domain names that we own, as well as by providing these services to third parties. Our revenue varies based upon the number of domain names registered or utilizing our aftermarket service offerings, the rates we charge our customers, our ability to sell value‑added services, our ability to sell domain names from our portfolio, and the monetization we are able to achieve through our aftermarket service offerings. Performance incentive rebates and certain other business incentives are recognized as a reduction in revenue. We primarily market our wholesale registration services under our eNom brand, and our retail registration services under our Name.com brand.

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We began recognizing insignificant revenue from our gTLD Initiative in the fourth quarter of 2013 and began generating cash sales from the portfolio of new gTLDs we exclusively operate in the first quarter of 2014. The amount as well as the timing of revenue is uncertain and is dependent upon the timing and number of our back‑end registry customers’ launches of gTLDs, the outcome of our negotiations or auctions to acquire the operating rights for gTLD applications contested with other participants, the demand and level of user adoption of new gTLDs and the continued progress of the New gTLD Program. To the extent that our registry will offer performance incentive rebates or certain other business incentives to our partners, those incentives will be recognized as a reduction to revenue.

Costs and Expenses

Our costs and expenses consist of the following:

Service Costs

Service costs primarily consist of fees paid to registries and ICANN associated with domain name registrations, revenue‑sharing expenses, Internet connection and co‑location charges and other platform expenses including depreciation of the systems and hardware used to build and operate our services, and personnel costs related to customer service and information technology. Our service costs are dependent on a number of factors, including the volume of domain name registrations, value‑added services supported by our registrar service and the revenue share agreements we have with our domain name customers utilizing our monetization platform. In the near term, we expect higher overall registration costs as a percentage of revenue due to the recent growth in higher‑volume, lower‑margin customers as well as a mix shift of revenue toward lower‑margin domain name services revenue relative to aftermarket revenue.

Sales and Marketing

Sales and marketing expenses consist primarily of sales and marketing personnel costs, sales support, advertising, marketing and general promotional expenditures. We currently anticipate that our sales and marketing expenses will continue to increase in the near term as a percent of revenue as we continue to support our sales efforts and invest in the growth of our business including our gTLD Initiative.

Product Development

Product development expenses consist primarily of expenses incurred in software engineering and product development and related personnel costs. Fluctuations in our product development expenses are generally the result of hiring personnel to support and develop our platform, including the costs to develop our future service offerings. We currently anticipate that our product development expenses will increase, but remain relatively flat as a percentage of revenue as we continue to hire more product development personnel and further develop our products and offerings to support the growth of our business, including our gTLD Initiative.

General and Administrative

General and administrative expenses consist primarily of personnel costs from our executive, legal, finance, human resources and information technology organizations and facilities‑related expenditures, as well as third party professional fees, and insurance expenses. Professional fees are largely comprised of outside legal, audit and information technology consulting. In the near term, we expect our general and administrative expenses to remain relatively flat as a percentage of revenue as we start generating revenue from our registry operations.

Amortization of Intangibles

We capitalize the purchase price of certain identifiable intangible assets acquired in connection with business combinations and to acquire domain names, including initial registration costs. We amortize these costs on a straight‑line basis over the related expected useful lives of these assets, which have a useful life of 3‑20 years on a combined basis. We determine the appropriate useful life of intangible assets by performing an analysis of expected cash flows based on its historical experience of intangible assets of similar quality and value. We capitalize gTLD assets once they become

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available for their intended use and amortize them on a straight‑line basis over the remaining contractual period of the registry operator agreement, which is approximately 10 years. We expect intangible amortization expense to increase in the near term as we recognize expenses related to the gTLDs as they are launched into the market.

Stock‑based Compensation

Our costs and expenses include stock‑based compensation, which is comprised of costs associated with stock options and restricted stock units issued to employees and directors. We record the fair value of these equity‑based awards and expense their cost ratably over related vesting periods.

Gain on Other Assets, Net

Gain on other assets, net represents the gains on withdrawals of our interest in certain gTLD applications.We expect our gains and losses will vary depending upon potential gains or losses resulting from our gTLD applications as well as movements in underlying currency exchange rates, which could become more significant as we continue to expand internationally

Interest Expense

Interest expense consists primarily of interest expense on our credit facilities.

Other Income (Expense), Net

Other income (expense), net, consists primarily of realized gains related to the sale of marketable securities, transaction gains and losses on foreign currency‑denominated assets and liabilities and interest income.

.

Provision for Income Taxes

We are subject to income taxes principally in the United States, and certain other countries where we have a legal presence, including Ireland, Canada, Cayman Islands and Australia. We anticipate that as we expand our operations outside the United States, we will become subject to taxation based on the foreign statutory rates, and our effective tax rate could fluctuate accordingly.

Income taxes are computed using the asset and liability method, under which deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. We recognize the effect on deferred taxes of a change in tax rates on income in the period that includes the enactment date.

Results of Operations

The following tables set forth our results of operations for the periods presented (in thousands). The period‑to‑period comparison of financial results is not necessarily indicative of future results.

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	Three months ended				Nine months ended
	September 30,				September 30,
	2014		2013		2014		2013
Revenue	$	48,774	$	45,506	$	140,015	$	139,620
Service costs (exclusive of amortization of intangible assets shown separately below)		41,550		37,232		119,612		108,661
Sales and marketing		2,239		2,426		7,210		7,790
Product development		2,667		2,620		9,592		7,865
General and administrative		5,690		6,590		17,869		18,639
Amortization of intangible assets		1,931		1,877		5,530		6,093
Gain on other assets, net		(8,558)		(1,336)		(14,303)		(2,565)
Interest expense		701		-		701		-
Other expense (income), net		65		25		(1,232)		44
Income (loss) before income taxes		2,489		(3,928)		(4,964)		(6,907)
Income tax benefit		(1,608)		(1,366)		(1,650)		(1,930)
Net income (loss)	$	4,097	$	(2,562)	$	(3,314)	$	(4,977)

Depreciation expense included in the above line items (in thousands):

	Three months ended				Nine months ended
	September 30,				September 30,
	2014		2013		2014		2013
Service costs	$	1,236	$	1,341	$	4,435	$	3,984
Sales and marketing		8		23		43		76
Product development		28		41		110		133
General and administrative		417		284		1,442		768
Total depreciation and amortization	$	1,689	$	1,689	$	6,030	$	4,961

Stock‑based compensation expense included in the above line items (in thousands):

	Three months ended				Nine months ended
	September 30,				September 30,
	2014		2013		2014		2013
Service costs	$	90	$	117	$	272	$	341
Sales and marketing		149		421		992		1,253
Product development		202		389		781		869
General and administrative		715		1,577		2,381		4,808
Total stock-based compensation expense	$	1,156	$	2,504	$	4,426	$	7,271

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As a percentage of revenue:

	Three months ended				Nine months ended
	September 30,				September 30,
	2014		2013		2014		2013
Revenue	100	%	100	%	100	%	100	%
Service costs (exclusive of amortization of intangible assets shown separately below)	85		82		85		78
Sales and marketing	5		5		5		6
Product development	5		6		7		6
General and administrative	12		15		13		13
Amortization of intangible assets	4		4		4		4
Gain on other assets, net	(17)		(3)		(10)		(2)
Interest expense	1		-		-		-
Other expense (income), net	-		-		(1)		-
Income (loss) before income taxes	5		(9)		(3)		(5)
Income tax benefit	(3)		(3)		(1)		(1)
Net income (loss)	8	%	(6)	%	(2)	%	(4)	%

Revenue

Revenue by service line was as follows (in thousands, except percentage data):

	Three months ended						Nine months ended
	September 30,				Change		September 30,				Change
	2014		2013		%		2014		2013		%
Domain name services	$	41,332	$	36,034	15	%	$	118,432	$	104,366	13	%
Aftermarket and other		7,442		9,472	(21)	%		21,583		35,254	(39)	%
Total revenue	$	48,774	$	45,506	7	%	$	140,015	$	139,620	0	%

Domain Name Services

Domain name services revenue for the three months ended September 30, 2014, increased by $5.3 million, or 15%, to $41.3 million compared to $36.0 million in 2013. Excluding the acquisition-related benefit associated with Name.com, organic revenue growth was 10.5%. This growth was primarily due to an increase in domain name registrations associated with the continued onboarding of eNom wholesale partners as well as revenue generated from registrations of new gTLD domain names.  

Domain name services revenue for the nine months ended September 30, 2014, increased by $14.0 million, or 13%, to $118.4 million compared to $104.4 million in 2013. Excluding the acquisition-related benefit associated with Name.com, organic revenue growth was 7%. This growth was primarily due to an increase in domain name registrations associated with the continued onboarding of eNom wholesale partners.

Aftermarket and Other

Aftermarket and other revenue for the three months ended September 30, 2014, decreased by $2.0 million, or 21%, to $7.4 million compared to $9.5 million in 2013. The decrease was primarily due to a $2.6 million decline in domain sales, which decreased from $4.8 million to $2.2 million, driven by lower sales of domain names in our portfolio.

Aftermarket and other revenue for the nine months ended September 30, 2014, decreased by $13.7 million, or 39%, to $21.6 million compared to $35.3 million in 2013. The decrease was primarily due to a $7.4 million decline in domain sales, which decreased from $14.2 million to $6.8 million, primarily from lower sales of domain names in our portfolio.

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Additionally, our decision to eliminate low quality advertising traffic drove a $3.5 million decrease in advertising revenue while lower advertising yields, as experienced across the industry resulted in a $2.8 million decrease in advertising revenue. Advertising yields have dropped across the industry primarily due to third party advertising providers’ reduction in partner revenue shares and their lowered cost per click rates for domain parking ads.

Cost and Expenses

Costs and expenses were as follows (in thousands, except percentage data):

	Three months ended						Nine months ended
	September 30,				Change		September 30,				Change
	2014		2013		%		2014		2013		%
Service costs (exclusive of amortization of intangible assets shown separately below)	$	41,550	$	37,232	12	%	$	119,612	$	108,661	10	%
Sales and marketing		2,239		2,426	(8)	%		7,210		7,790	(7)	%
Product development		2,667		2,620	2	%		9,592		7,865	22	%
General and administrative		5,690		6,590	(14)	%		17,869		18,639	(4)	%
Amortization of intangible assets		1,931		1,877	3	%		5,530		6,093	(9)	%
Gain on other assets, net		(8,558)		(1,336)	541	%		(14,303)		(2,565)	458	%
Interest expense		701		-	N/A			701		-	N/A
Other expense (income), net		65		25	160	%		(1,232)		44	(2,900)	%
Income tax benefit		(1,608)		(1,366)	18	%		(1,650)		(1,930)	(15)	%

Service Costs

Service costs for the three months ended September 30, 2014, increased by $4.4 million, or 12%, to $41.6 million compared to $37.2 million in 2013. The increase was primarily due to a $4.9 million increase in domain name registration costs associated with our growth in registered domain names and related revenue, $0.5 million of additional network infrastructure support costs incurred to operate the new registry platform, partially offset by a decrease of $0.6 million in revenue sharing costs paid to our domain name monetization customers and a $0.4 million decrease in other service costs.

Service costs for the nine months ended September 30, 2014, increased by $10.9 million, or 10%, to $119.6 million compared to $108.7 million in 2013.The increase was primarily due to $13.2 million in domain name registration costs associated with our growth in registered domain names and related revenue, $1.7 million in network infrastructure support costs incurred to operate the new registry platform and $0.2 million in personnel costs, offset by a decrease of $3.9 million in revenue sharing costs paid to our domain name monetization customers.

Sales and Marketing

Sales and marketing expenses for the three months ended September 30, 2014, decreased by $0.2 million, or 8%, to $2.2 million compared to $2.4 million in 2013. The decrease was primarily due to a $0.3 million decrease in stock compensation expense due to a reduced allocation from Demand Media, $0.1 million in lower commissions as a result of reduced domain name sales, and $0.1 million less in payroll expenses, offset by an increase of $0.3 million for new marketing campaigns.

Sales and marketing expenses for the nine months ended September 30, 2014, decreased by $0.6 million, or 7%, to $7.2 million compared to $7.8 million in 2013. The decrease was primarily due to $0.4 million of lower commissions as a result of reduced domain name sales, a $0.4 million reduction in payroll expenses, a $0.3 million decrease in stock compensation expense due to a reduced allocation from Demand Media, and a $0.2 million decrease in infrastructure costs, , partially offset by an increase of $0.7 million for new marketing campaigns.

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Product Development

Product development expense for the three months ended September 30, 2014, increased by $0.1 million, or 2%, to $2.7 million compared to $2.6 million in 2013. The increase was primarily due to a $0.3 million increase in personnel costs to support and develop our domain name services and registry platforms, partially offset by a decrease of $0.2 million in stock compensation expense due to a reduced allocation from Demand Media.

Product development expense for the nine months ended September 30, 2014, increased by $1.7 million, or 22%, to $9.6 million compared to $7.9 million in 2013. The increase was primarily due to a $2.2 million increase in personnel costs to support and develop our domain name services and registry platforms, partially offset by a decrease of $0.3 million in infrastructure costs and $0.1 million in stock compensation expense.

General and Administrative

General and administrative expenses for the three months ended September 30, 2014, decreased by $0.9 million, or 14%, to $5.7 million compared to $6.6 million in 2013. The decrease was primarily due to a $0.9 million decrease in stock compensation expense due to a reduced allocation from Demand Media.

General and administrative expenses for the nine months ended September 30, 2014, decreased by $0.7 million, or 4%, to $17.9 million compared to $18.6 million in 2013. The decrease was primarily due to a $2.4 million decrease in stock compensation costs due to a reduced allocation from Demand Media and a decrease of $0.3 million in facility costs, partially offset by an increase of $0.9 million in payroll and related expenses related to an increase in corporate headcount associated with becoming a separate public entity, a $0.4 million increase in depreciation expense, and a $0.2 million increase in professional services and consulting fees..

Amortization of Intangible Assets

Amortization of intangible assets expense for the three months ended September 30, 2014 and 2013 was $1.9 million.

Amortization of intangible assets expense for the nine months ended September 30, 2014, decreased by $0.6 million, or 9%, to $5.5 million compared to $6.1 million in 2013. The decrease was primarily due to $1.0 million from intangible assets acquired in business acquisitions in prior years being fully amortized, offset by an increase of $0.5 million to amortization of gTLDs.

Gain on Other Assets, Net

Gain on other assets, net for the three months ended September 30, 2014 and 2013, was $8.6 million and $1.3 million due to payments received in exchange for the withdrawals of our interest in certain gTLD applications.

Gain on other assets, net for the nine months ended September 30, 2014 and 2013, was $14.3 million and $2.6 million due to payments received in exchange for the withdrawals of our interest in certain gTLD applications.

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Interest Expense

Interest expense for the three months and nine months ended September 30, 2014, consisted of interest expense on the Tennenbaum Credit Facility and SVB Credit Facility. We did not have any interest expense in 2013.

Other (Income) Expense, Net

Other (income) expense, net for the three months ended September 30, 2014, was flat compared to 2013.

Other income, net for the nine months ended September 30, 2014, was $1.2 million compared to zero in 2013. Other income, net in 2014 was primarily due to a $1.4 million gain on sale of marketable securities during first quarter 2014.

Income Tax Benefit

Income tax benefit for the three months ended September 30, 2014, was $1.6 million, compared to $1.4 million in2013. The increase was primarily due to increased book losses from our domestic operations during the period, which were not offset by books gains in our international operations.

Income tax benefit for the nine months ended September 30, 2014, was $1.6 million compared to $1.9 million in 2013. This was primarily due to the reversal of a deferred tax asset as a result of cancelled stock options.

Liquidity and Capital Resources

Historically, we have principally financed our operations from net cash provided by our operating activities. Our cash flows from operating activities are significantly affected by our cash based investments in operations, including working capital, and corporate infrastructure to support our ability to generate revenue and conduct operations through cost of services, product development, sales and marketing and general and administrative activities. Cash used in investing activities has historically been, and is expected to be, significantly impacted by our ongoing investments in our platform, company infrastructure, equipment for our domain name services and, more recently, our investments in gTLD applications. Our capital expenditures and investments in gTLDs have to date been funded by both cash flow from operations and investment from our former parent, Demand Media, as well as proceeds from our credit facilities.

As of September 30, 2014, our principal sources of liquidity were our cash and cash equivalents in the amount of $50.9 million. As part of our separation from Demand Media, cash and cash equivalents were allocated between the two companies, resulting in Rightside receiving cash of $26.1 million as of August 1, 2014, and Demand Media assuming all of the existing outstanding debt at the separation date. Subsequent to the separation, we entered into credit facilities designed to increase our liquidity and financial flexibility to pursue our strategic objectives, including the acquisition of additional gTLDs.

Credit Facilities

Silicon Valley Bank Credit Facility

In August 2014, we entered into a $30.0 million revolving credit facility (“SVB Credit Facility”) with Silicon Valley Bank (“SVB”). Under this facility we may repay and reborrow until the maturity date in August 2017. The SVB Credit Facility includes a letter of credit sub-limit of up to $15.0 million. 

The SVB Credit Facility provides us with the option to select the annual interest rate on borrowings in an amount equal to: (1) a base rate determined by reference to the highest of: (a) the prime rate; (b) 0.50% per annum above the federal funds effective rate; and (c) the Eurodollar base rate for an interest period of one month plus 1.00%, plus a margin ranging from 1.00% to 1.50%, depending on our consolidated senior leverage ratio (as determined under the SVB Credit Facility), or (2) a Eurodollar base rate determined by reference to LIBOR for the interest period equivalent to such

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borrowing adjusted for certain reserve requirements, plus a margin ranging from 2.00% to 2.50%, depending on our consolidated senior leverage ratio (as determined under the SVB Credit Facility).

We pay fees on the portion of the facility that is not drawn.  The unused fee is payable to SVB in arrears on a quarterly basis in an amount equal to 0.250% multiplied by the daily amount by which the aggregate commitments exceed the sum of the outstanding amount of loans and the outstanding amount of letter of credit obligations.

The SVB Credit Facility allows SVB to require mandatory prepayments of outstanding borrowings from amounts otherwise required to prepay term loans under the Tennenbaum Credit Facility.

The SVB Credit Facility contains customary representations and warranties, events of default and affirmative and negative covenants. This facility has financial covenants, including a requirement that we maintain a minimum consolidated fixed charge coverage ratio, a maximum consolidated senior leverage ratio, a maximum consolidated net leverage ratio, and minimum liquidity.  As of September 30, 2014, we were in compliance with the covenants under the SVB Credit Facility.

We incurred $0.5 million in fees to establish this facility that we have capitalized on our balance sheet as deferred financing costs, which we will amortize on a straight-line basis into interest expense over the term of the SVB Credit Facility. As of September 30, 2014, we had letters of credit with a face amount of $11.0 million that were issued under the SVB Credit Facility.  We have made no other borrowings under this facility.

Tennenbaum Credit Facility

In August 2014, we entered into a $30.0 million term loan credit facility with Tennenbaum Capital Partners LLC (the “Tennenbaum Credit Facility”). Under this facility interest is based on a rate per year equal to LIBOR plus 8.75%. Interest on the term loans is payable quarterly, beginning September 30, 2014. Quarterly principal payments of $375,000 on the term loan begin March 31, 2015. Once repaid, the term loans may not be reborrowed. All amounts outstanding under the facility are due and payable in full on the maturity date in August 2019. We may prepay any principal amount outstanding on the term loan plus a premium of 4.00% (if prepaid in the first year), 2.50% (second year), 1.00% (third year), and 0.00% thereafter, plus customary “breakage” costs with respect to LIBOR loans.

Under this facility we are subject to mandatory prepayments from 50% of excess cash flow, which is based on the first of the following to occur:  (1) maturity, termination or refinancing of the SVB Credit Facility or the acceleration and termination of the SVB Credit Facility, or (2) from the excess cash flow as of December 31, 2014, and each subsequent fiscal year thereafter.  In addition, mandatory prepayments, to the extent not used to prepay loans and cash collateralize letters of credit and permanently reduce the commitments under the SVB Credit Facility, are required from certain asset sales and insurance and condemnation events, subject to customary reinvestment rights. Mandatory prepayments are also required from the issuances of certain indebtedness. These mandatory prepayments are subject to a prepayment premium that is the same as for voluntary prepayments.

The Tennenbaum Credit Facility contains financial covenants and customary representations and warranties, events of default and affirmative and negative covenants. As of September 30, 2014, we were in compliance with the covenants under the Tennenbaum Credit Facility.

In connection with the Tennenbaum Credit Facility, we issued warrants to purchase up to an aggregate of 997,710 shares of common stock. The warrants have an exercise price of $15.05 per share and will be exercisable in accordance with their terms at any time on or after February 6, 2015, through August 6, 2019. The warrants contain a “cashless exercise” feature that allows the warrant holders to exercise such warrants by surrendering a number of shares underlying the portion of the warrant being exercised with a fair market value equal to the aggregate exercise price payable to us.

We estimated the fair value of the warrants by using the Black-Scholes Option Pricing Method ("Black-Scholes"). Under the Black-Scholes approach our key assumptions included the following:  Stock price of $14.49, strike

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price of $15,05, volatility of 42.44%, risk-free rate of 1.67%, dividend yield of 0% and 5 year term. We used the resulting fair value to allocate the proceeds from the Tennenbaum Credit Facility between liability and equity.

Since the warrants are classified as equity, we allocated the proceeds from the debt and warrants using the relative fair value method.  Under this method we allocated $4.4 million to the warrants which we recorded to equity, with the remaining portion assigned to the liability component.  The excess of the principal amount of the credit facility over its carrying value of $25.6 million represents a note discount that we will amortize to interest expense over the term of the Tennenbaum credit facility.

We believe this capital structure is appropriate for this stage of the Company and is sufficient to grow the business while pursuing our strategic objectives. However, we are participating in a dynamic and emerging environment, and will continuously evaluate our position relative to the opportunities available in the marketplace. We believe that our future cash from operations, together with our ability to access sources of financing, including debt and equity, will provide sufficient resources to fund both short term and long term operating requirements, capital expenditures, acquisitions and new business development activities for at least the next 12 months.

Historical Cash Flow Trends

The following table sets forth our major sources and (uses) of cash for each period as set forth below (in thousands):

	Nine months ended
	September 30,
	2014		2013
Net cash (used in) provided by operating activities	$	(1,961)	$	8,541
Net cash used in investing activities		(12,994)		(7,005)
Net cash (used in) provided by financing activities		(991)		16,607

Cash Flows from Operating Activities

Net cash used in our operating activities was $2.0 million in 2014, compared to net cash inflows of $8.5 million in 2013. Our net loss in 2014 was $3.3 million, which included a gain on the withdrawal of gTLD applications of $14.3 million, a gain on the sale of marketable securities of $1.4 million, non‑cash charges of $14.3 million for depreciation, amortization, deferred tax benefit and stock‑based compensation. Our net loss in 2013 was $5.0 million, which included a gain on the withdrawal of gTLD applications of $2.6 million and non-cash charges of $12.2 million for depreciation, amortization and stock‑based compensation.

Cash Flows from Investing Activities

Net cash used in investing activities in 2014, increased $6.0 million, or 85%, to $13.0 million compared to $7.0 million net cash used in investing activities in 2013. The increase of cash used in investing activities was primarily due to payments and deposits of $19.5 million related to gTLD applications, an increase in restricted cash of $0.3 million, and a decrease in cash flows from other investing activities of $0.3 million.  These cash uses were partially offset by an increase in proceeds from gTLD application withdrawals of $7.4million, $1.4 million from the sale of marketable securities, fewer investments in property and equipment of $4.5 million, and a $0.5 million reductionin intangible asset investments.

Cash Flows from Financing Activities

Changes in net cash from financing activities in 2014, includes $30.0 million from our Tennenbaum Credit Facility. In addition, all periods presented include transfers to and from our former parent, Demand Media. Parent company investment in the balance sheets represents Demand Media’s historical investment in us, the net effect of cost allocations from transactions with Demand Media and our accumulated earnings.

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Off‑Balance Sheet Arrangements

As ofSeptember 30, 2014, we were not a party to any off‑balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our financial condition, revenue or expenses, results of operations, liquidity or capital resources other than those contractual obligations disclosed in the section entitled “Liquidity and Capital Resources.”

Contractual Obligations and Commitments

The following table summarizes our outstanding contractual obligations and commercial commitments as of September 30, 2014 (in thousands):

Years Ending December 31,	Debt		Lease Commitments		Purchase Obligations
2014 (October 1, 2014, to December 31, 2014)	$	706	$	340	$	234
2015		4,271		1,325		-
2016		4,132		1,238		-
2017		3,973		1,200		-
2018		3,807		1,100		-
Thereafter		25,281		356		-
Total	$	42,170	$	5,559	$	234

Debt

In August 2014, we entered into the $30.0 million SVB Credit Facility. Under this facility we may repay and reborrow until the maturity date in August 2017. The SVB Credit Facility includes a letter of credit sub-limit of up to $15.0 million. 

In August 2014, we entered into the $30.0 million Tennenbaum Credit Facility, which matures in August 2019.The principal amount of the term loans is scheduled to be repaid in quarterly installments of $375,000 beginning March 31, 2015. Once repaid, term loans may not be reborrowed. All amounts outstanding under the facility are due and payable in full on the maturity date in August 2019.

Lease Commitments

We conduct our operations utilizing leased office facilities in various locations and lease certain equipment under non‑cancelable operating and capital leases. Our leases expire between August 2015 and April 2019. In February 2014, we executed the First Amendment to Lease to obtain additional space for our headquarters in Kirkland, Washington and to extend the lease to April 2019. 

Purchase Obligations

We have future minimum purchase obligations under arrangements with third parties that are enforceable and legally binding. Future purchase obligations are related to services to support operations and are based on contracted commitments.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based upon our financial statements which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities and related disclosure of contingent assets and liabilities, revenue and expenses at the date of the financial statements. Generally, we base our estimates on historical experience and on various other assumptions in accordance with GAAP that we believe to be reasonable under the circumstances. Actual results may differ from these estimates.

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Critical accounting policies and estimates are those that we consider the most important to the portrayal of our financial condition and results of operations because they require our most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Our critical accounting policies and estimates include those related to:

· revenue recognition;

· domain name services;

· aftermarket and other;

· accounts receivable;

· goodwill;

· capitalization and useful lives associated with our intangible assets, including internal software;

· recoverability of long-lived assets;

· income taxes; and

· stock-based compensation.

There have been no material changes in our critical accounting policies and estimates in the preparation of our financial statements during the three and nine months ended September 30, 2014, compared to those disclosed in our Form 10 as filed with the SEC on July 14, 2014.

Recently Adopted Accounting Guidance

In February 2013, the FASB issued ASU 2013-2, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income (ASU 2013-2), to improve the reporting of reclassifications out of accumulated other comprehensive income. ASU 2013-2 requires presentation, either on the face of the financial statements or in the notes, of amounts reclassified out of accumulated other comprehensive income by component and by net income line item. ASU 2013-2 is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2012. We adopted ASU 2013-2 in the first quarter of fiscal 2014. The adoption of ASU 2013-2 did not have a significant impact on ourcondensed combined financial statements, but did require additional disclosures.

Recent Accounting Guidance Not Yet Adopted

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (ASU 2014-09). ASU 2014-09 outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The new model will require revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. The amendments in ASU 2014-09 are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period and early adoption is not permitted. The standard can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. We are currently assessing the impact that this updated standard will have on our financial statements and footnote disclosures.

In June 2014, the FASB issued ASU 2014-12, Compensation - Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide that a Performance Target Could be Achieved after the Requisite Service Period (ASU 2014-12), which requires that a performance target that affects vesting, and that could be

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achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant date fair value of the award. This update further clarifies that compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. We do not anticipate that the adoption of this standard will have a material impact on our financial statements.

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

We are exposed to market risks in the ordinary course of our business. These risks primarily include foreign exchange and concentration of credit risk. To reduce and manage these risks, we assess the financial condition of our large registrar resellers and other large customers when we enter into or amend agreements with them and we limit credit risk by collecting in advance when possible and setting and adjusting credit limits where we deem appropriate. In addition, our recent investment strategy has been to invest in high credit quality financial instruments, which are highly liquid, are readily convertible into cash and that mature within three months from the date of purchase.

Foreign Currency Exchange Risk

While relatively small, we have operations outside of the United States. We have foreign currency risks related to a relatively small percentage of our expenses being denominated in currencies other than the U.S. dollar, principally in the Euro. We do not believe movements in the foreign currencies in which we transact will significantly affect future net earnings or losses. However, as our international operations grow, our risks associated with fluctuation in currency rates will become greater, and we intend to continue to assess our approach to managing this risk.

Concentrations of Credit Risk

As of September 30, 2014, our cash and cash equivalents were maintained primarily with one major U.S. financial institution and one foreign bank. We also maintained cash balances with three Internet payment processors. Deposits with these institutions at times exceed the federally insured limits, which potentially subject us to concentration of credit risk. Historically, we have not experienced any losses related to these balances and believe that there is minimal risk of expected future losses. However, there can be no assurance that there will not be losses on these deposits.

Item 4.Controls and Procedures

(a) Evaluation of disclosure controls and procedures. Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, have evaluated our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) prior to the filing of this quarterly report. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that, as of the end of the period covered by this quarterly report, our disclosure controls and procedures were, in design and operation, effective.

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PART II.  OTHER INFORMATION

Item 1.Legal Proceedings

There is no pending or threatened legal proceeding to which we are a party that, in our belief, is reasonably likely to have a material adverse effect on our business, financial results and existing or future operations.

Item 1A.  Risk Factors

You should carefully consider the following risk factors, in addition to the other information contained in this report, including the section of this report captioned “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and related notes. If any of the events described in the following risk factors and the risks described elsewhere in this report occurs, our business, operating results and financial condition could be seriously harmed. This report on Form 10-Q also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of factors that are described below and elsewhere in this report.

Risks Relating to Our Businesses

We have applied to become a registry operator for new gTLDs pursuant to ICANN’s application submission and approval process. We may not be successful in acquiring the right to operate some of the new gTLDs for which we have applied, and therefore may not be able to grow our business as rapidly as we have planned and may lose some of our investments made in connection with the New gTLD Program.

We have applied through ICANN’s New gTLD Program to operate registries for a number of new gTLDs on a stand‑alone basis. We have also acquired rights to certain gTLDs and intend to acquire rights in additional gTLDs, either directly or through strategic relationships, including with Donuts, a third‑party new gTLD applicant. We invested or made refundable deposits in the amount of $19.5 million associated with  gTLD applications during the nine months ended September 30, 2014 and since 2012, we have made total capital investments or made refundable deposits in the amount of $41.6million associated with certain gTLD applications under the New gTLD Program. We may choose to invest significant additional funds in this complex process.

We are in competition with other third‑party applicants for many of the new gTLDs for which we have applied or in which we have rights through our agreement with Donuts. There are multiple steps in the ICANN approval process. When more than one party applies for a gTLD, the parties are typically required to enter into negotiations or participate in an auction to win the registry rights. We may be outbid or otherwise be unsuccessful in acquiring gTLDs in these negotiations or auctions. We could also face lawsuits or other opposition to our gTLD applications or any award of gTLD operator rights.

If we are unsuccessful in being delegated an adequate number of new gTLDs, we may have a lower than expected return on our investment, and our future growth, financial condition and results of operations would be adversely affected.

ICANN’s New gTLD Program may be modified, limited or delayed in unforeseen ways that could adversely affect our business.

The launch of the New gTLD Program has been and continues to be subject to numerous and substantial delays, and may be subject to additional delays. ICANN is subject to many influences, both internally and externally, including existing registries, new gTLD applicants, registrars, governmental authorities, law enforcement agencies and trade associations. ICANN may be exposed to potential legal challenges from new gTLD applicants as well as entities opposed to the introduction of new gTLDs, which could cause delays in the process. In addition, the introduction of a large number of new gTLDs poses technical challenges for ICANN;ICANN’s management of such technical challenges could also create opposition to new gTLDs. Any delays in the New gTLD Program may impact the timing of revenue associated with our gTLD registry initiative, and therefore adversely affect our margins and results of operations.

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As a new gTLD registry, we are subject to ICANN’s registry operator agreement and governing policies, which may change to our detriment.

We are required to enter into a registry operator agreement with ICANN (each, a “New gTLD Registry Agreement”) for each new gTLD registry that we operate. To date, we have 33 New gTLD Registry Agreements. All new gTLDs for which we are the registry operator have been delegated to us and inserted into the Root Zone.

We face risks arising from our New gTLD Registry Agreements with ICANN, including the following:

· ICANN could adopt or promote policies, procedures or programs that in each case are inconsistent with our current or future plans, or that affect our competitive position. For example, each of the New gTLD Registry Agreements contains guidelines for the operation of vertically integrated enterprises operating both a registrar and a registry. If ICANN were to materially change those guidelines or prohibit such vertical integration, such a change would have a material adverse effect on our future growth, business and results of operations;

· under certain circumstances, ICANN could terminate one or more of our New gTLD Registry Agreements; and

· ICANN has the right to increase the fees due from the registry operator under the New gTLD Registry Agreements. The increase in these fees with respect to any gTLDs for which we act as the registry either must be included in the prices we charge to registrars or absorbed by us. If we absorb such cost increases or if increased prices to registrars act as a deterrent to registration, our profits may be adversely impacted.

We have limited experience operating a gTLD registry and providing back‑end infrastructure services to new or existing registries. If we are unsuccessful in operating a gTLD registry or providing back‑end infrastructure services, our business, future growth, financial condition and results of operations would be adversely affected.

In addition to pursuing the right to operate our own gTLD registries, a subsidiary of ours provides technical back‑end infrastructure services for new gTLD operator rights acquired by Donuts (collectively, our “gTLD Initiative”). We have limited experience as an operator of domain name registries for gTLD strings and limited experience providing technical back‑end infrastructure services to registries. We may not be successful in implementing the businesses associated with our gTLD Initiative. If we are unsuccessful in implementing our gTLD Initiative, we may lose some of our current and future investment in our gTLD Initiative and the return on investment in our gTLD Initiative may not meet our current expectations justifying such investment. The loss of some of our investment or lower than expected return on investment in our gTLD Initiative could adversely affect our future growth, financial condition and results of operations.

We face significant competition to our registry services business and we may not be able to develop or maintain significant market share.

Prior to the launch of the New gTLD Program, there were over 20 gTLD registries and over 290 ccTLD registries. We face competition in the domain name services registry space from other established and more experienced operators in these service offerings, including other gTLD and ccTLD registries, as well as new entrants into the domain name services industry, some of which have greater financial, marketing and other resources. In particular, we face direct competition with other new gTLD registries offering gTLDs in similar verticals to our offerings. For example, we may offer the ability to register .Dentist domain names, while a competitor may offer the ability to register .Dental domain names.

Other registries with more experience or with greater resources may launch marketing campaigns for new or existing TLDs, which result in registrars or their resellers giving other TLDs greater prominence on their websites,advertising or marketing materials. In addition, such registries could offer aggressive price discounts on the gTLDs they offer or bundle gTLDs as a loss leader with other services. If we are unable to match or beat such marketing and pricing initiatives, or are otherwise unable to successfully compete with other registries, we may not be able to develop, maintain

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and grow significant market share for our new gTLD offerings, and our business, financial condition and results of operation would be adversely affected.

If we are unsuccessful in marketing and selling our gTLDs or there is insufficient consumer demand for our gTLDs, our future business and results of operations would be materially adversely affected.

Our registry services business, which will derive most of its revenue from registration fees for domain names, is expected to generate a significant portion of our revenue and margin in the future. The new gTLDs we have started to offer to the market are primarily untested and it is unclear what the ultimate market size or demand is or will be for these new offerings. There can be no guarantees that consumers will demand or accept new gTLDs in general or our new gTLDs in particular.

Our registry services business is substantially dependent upon third‑parties to market and distribute our gTLDs and we would be adversely affected if these relationships are terminated or diminished.

A large portion of our gTLD sales are made through third‑party channels, including resellers currently on our platform and third‑party registrars. Our distribution partners also offer our competitors’ gTLDs. The extent to which our third‑party distribution partners sell our gTLDs is partly a function of pricing, terms and special marketing promotions offered by us and our competitors. Our agreements with our third‑party distribution partners are generally nonexclusive and may be terminated by them or by us without cause. Our business would be adversely affected if such distribution partners chose not to offer our gTLDs in the future or chose to sell or offer greater amounts of competitive gTLDs relative to the amount of our gTLDs they sell or offer.

If our registrar customers do not renew their domain name registrations or if they transfer their existing registrations to our competitors and we fail to replace their business, our business would be adversely affected.

Our success depends in large part on our registrar customers’ renewals of their domain name registrations. Our customer renewal rate for expiring domain name registrations was approximately 72.5% and 72.9% in the three and nine months ended September 30, 2014, respectively, and 69.5% and 69.1% in the three and nine months ended September 30, 2013, respectively. If we are unable to maintain our overall renewal rates for domain name registrations or if any decrease in our renewal rates, including due to transfers, is not offset by increases in new customer growth rates, our customer base and our revenue would likely decrease. This would also reduce the number of domain name registration customers to whom we could market our other higher margin services, which could further harm our revenue and profitability, drive up our customer acquisition costs and negatively impact our operating results. Any significant decline in renewals of domain name registrations not offset by new domain name registrations would likely have an adverse effect on our business, financial condition and results of operations.

Our registrar business is dependent on third‑party resellers, including a small number of resellers that account for a significant portion of our domain names under management. Our failure to maintain or strengthen our relationships with resellers, particularly those servicing a large percentage of our domain name registration customers, would have a material adverse effect on our business.

As a registrar with a wholesale component, we provide domain name registration services and offer value‑added services through a network of more than 20,000 active resellers, comprised of small businesses, large e‑commerce websites, Internet service providers and web‑hosting companies, as well as through companies using our hosted back‑end registrar platform. These resellers, in turn, contract directly with domain name registrants to deliver these services. Maintaining and deepening relationships with our resellers is an important part of our growth strategy, as strong third‑party distribution arrangements enhance our ability to market our products and to increase our domain names under management, revenue and profitability.

Total revenue earned from resellers was $87.9 million, or 63% of total revenue, for the nine months endedSeptember 30, 2014, and was $82.3 million, or 59% of total revenue, for the comparable prior year period. As of September 30, 2014, our three largest resellers accounted for 36% of our total domain names under management, and our largest reseller, Namecheap, Inc., represented 24% of total domain names under management. In addition, Namecheap

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accounted for 16% and 13% of our total revenue for the nine months ended September 30, 2014 and the comparable prior year period. The term of our current reseller agreement with Namecheap expires in December2014, but will automatically renew for an additional one‑year period unless terminated by either party. There can be no assurance that our established reseller distribution relationships will continue, as our resellers may cease to operate or otherwise terminate their relationship with us. Any reduction in access to third‑party reseller distributors, particularly those servicing a large percentage of our domain name registration customers, would have a material adverse effect on our ability to market our products and to generate revenue.

Governmental and regulatory policies or claims concerning the domain name registration system, and industry reactions to those policies or claims, may cause instability in the industry and negatively impact our business.

ICANN is a private sector, not‑for‑profit corporation formed in 1998 for the express purpose of managing a number of Internet infrastructure related tasks previously performed directly by the U.S. Department of Commerce, including managing the domain name registration system (“DNS”). ICANN has been the subject of scrutiny by the public and by the United States and other governments around the world with many of those governments becoming increasingly interested in ICANN’s role in Internet governance. For example, the U.S. Congress held hearings to evaluate ICANN’s selection process for new TLDs and its plans to transition the Internet Assigned Numbers Authority (“IANA”) functions from coordination by the U.S. Department of Commerce to a multi‑stakeholder body. In addition, ICANN faces significant questions regarding its efficacy as a private sector entity. ICANN may continue to evolve both its long‑term structure and mission to address perceived shortcomings such as a lack of accountability to the public and a failure to maintain a strong, effective multi‑stakeholder Internet governance institution.

As a key participant in the DNS, we continue to face the following risks:

· the U.S. or any other government may seek to influence ICANN’s role in overseeing the DNS and the coordination of the IANA functions;

· the Internet community, the U.S. or other governments may (i) refuse to recognize ICANN’s authority or support its policies, (ii) attempt to exert pressure on ICANN to implement policies favorable to certain national interests, or (iii) enact laws that conflict with ICANN’s policies, each of which could create challenges for companies dependent on smooth operation of the domain name registration system;

· some of ICANN’s policies and practices, and the policies and practices adopted by registries and registrars, could be found to conflict with the laws of one or more jurisdictions;

· the terms of the Registrar Accreditation Agreement (the “RAA”), under which we are accredited as a registrar, could change in ways that are disadvantageous to us or under certain circumstances could be terminated by ICANN preventing us from operating our registrar service, or ICANN could adopt unilateral changes to the RAA that are unfavorable to us, that are inconsistent with our current or future plans, or that affect our competitive position;

· international regulatory or governing bodies, such as the International Telecommunications Union or the European Union, may gain increased influence over the management and regulation of the DNS, leading to increased regulation in areas such as data security, taxation, intellectual property rights and privacy;

· ICANN or any third‑party registries may implement contract or policy changes that would impact our ability to run our current business practices throughout the various stages of the life cycle of a domain name;

· legal, regulatory or other challenges could be brought, including challenges to the agreements governing our relationship with ICANN, or to the legal authority underlying the roles and actions of the U.S. Department of Commerce, ICANN or us;

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· the U.S. Congress or other legislative bodies in the United States could take action that is unfavorable to us or that influences customers to move their business from our services to those located outside the United States; and

· ICANN could fail to maintain its role in managing the Root Zone and IANA functions, potentially resulting in hindrances to the DNS.

Additionally, some governments and governmental authorities outside the United States have in the past disagreed, and may in the future disagree, with the actions, policies or programs of ICANN, the U.S. government and registries relating to the DNS. The Affirmation of Commitments established several multi‑party review panels and contemplates a greater involvement by foreign governments and governmental authorities in the oversight and review of ICANN. These periodic review panels may recommend changes to ICANN that are unfavorable to our business.

The occurrence of any of these events could create instability in the domain name registration system and may make it difficult for us to introduce new services in our registrar and registry services business. These events could also disrupt or suspend portions of our domain name registration solution and subject us to additional restrictions on how the registrar and registry services businesses are conducted, which would result in reduced revenue.

We may not be able to maintain our strategic relationships with third parties.

Some of our business is conducted through NameJet, a joint venture with Web.com. In addition, we have formed strategic alliances with certain business partners, such as Donuts. We cooperate with Donuts to acquire gTLD registry operator rights and have contracted to provide Donuts with registry back‑end infrastructure services. In addition, the gTLD application and acquisition process requires us to rely upon or negotiate and collaborate with independent third parties, including Donuts.

There can be no assurance that these strategic partners will continue their relationships with us in the future or that we will be able to pursue our stated strategies with respect to these arrangements. Furthermore, our partners may (i) have economic or business interests or goals that are inconsistent with ours; (ii) take actions contrary to our policies or objectives; (iii) undergo a change of control; (iv) experience financial and other difficulties; or (v) be unable or unwilling to fulfill their obligations under our agreements, which may affect our financial conditions or results of operations.

In addition, we have or intend to enter into agreements with service providers or distribution partners who may partner with us in one area of our business and compete with us in other areas of our business. There can be no assurance that we will be successful in establishing or maintaining these relationships or that these relationships will be successful.

We face significant competition to our registrar service offering, which we expect will continue to intensify. We may not be able to maintain or improve our competitive position or market share.

We face significant competition from existing registrars and from new registrars that continue to enter the market. ICANN currently has approximately 1,100 registrars to register domain names in one or more of the gTLDs that it oversees. There are relatively few barriers to entry in this market, so as this market continues to develop we expect the number of competitors to increase. The continued entry into the domain name registration market by competitive registrars and unaccredited entities that act as resellers for registrars, and the rapid growth of some competitive registrars and resellers that have entered the market, may make it difficult for us to maintain our current market share.

The market for domain name registration and other related value‑added web‑based services is highly competitive and rapidly evolving. We expect competition to increase from existing competitors, as well as from new market entrants. These competitors include, among others, domain name registrars, website design firms, website hosting companies, Internet service providers, Internet portals and search engine companies, and include companies such as GoDaddy, Web.com, Microsoft,  Yahoo!, Google and Amazon. Some of these competitors have traditionally offered more robust value‑added services than we have, and some have greater resources, more brand recognition and consumer awareness, greater international scope and larger bases of existing customers than we do. As a result, we may not be able to compete successfully against them in future periods.

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In addition, these and other large competitors, in an attempt to gain market share, may offer aggressive price discounts on the services they offer. These pricing pressures may require us to match these discounts in order to remain competitive, which would reduce our margins, or cause us to lose customers who decide to purchase the discounted service offerings of our competitors. In light of these factors, it may become increasingly difficult for us to compete successfully.

The relevant domain name registry and the ICANN regulatory body impose a charge upon each registrar for the administration of each domain name registration. If these fees increase, it could have a significant impact upon our operating results.

Each registry typically imposes a fee in association with the registration of each domain name. For example, VeriSign, the registry for .Net, presently charges a $6.18 fee for each .Net registration and ICANN currently charges fees totaling $0.93 for each .Net domain name registered. The fee charged by VeriSign for each .Net registration increased from $5.11 to $5.62 in July 2013 and increased again to $6.18 in February 2014. We have no control over these agencies and cannot predict when they may increase their respective fees. Per the extended registry agreement between ICANN and VeriSign that was approved by the U.S. Department of Commerce on July 1, 2011, VeriSign will continue as the exclusive registry for the .Net gTLD through June 30, 2017. The terms of the extension set a maximum price, with certain exceptions, for registry services for each calendar year beginning January 1, 2012, which may not exceed the highest price charged during the preceding year, multiplied by 1.10. In addition, pricing of new gTLDs is generally not set or controlled by ICANN, which could result in aggressive price increases on any particularly successful new gTLDs. The increase in these fees with respect to any gTLDs for which we do not act as the registry either must be included in the prices we charge to our service providers, imposed as a surcharge or absorbed by us. Our profits may be adversely impacted if we absorb such cost increases or if surcharges deter registration.

Our failure to register, maintain, secure, transfer or renew the domain names that we process on behalf of our customers or to provide our other services to our customers without interruption could subject us to additional expenses, claims of loss or negative publicity that have a material adverse effect on our business.

Clerical errors and system and process failures made by us may result in inaccurate and incomplete information in our database of domain names and in our failure to properly register or to maintain, secure, transfer or renew the registration of domain names that we process on behalf of our customers. In addition, any errors of this type might result in the interruption of our other services. Failure to properly register or to maintain, secure, transfer or renew the registration of our customers’ domain names or to provide our other services without interruption, even if we are not at fault, may result in our incurring significant expenses and may subject us to claims of loss or to negative publicity, which could harm our business, revenue, financial condition and results of operations.

We could face liability, or our corporate image might be impaired, as a result of the activities of our customers or the content of their websites.

Our role as a registry and as a registrar of domain names and a provider of website hosting and other value‑added services may subject us to potential liability for illegal activities by domain name registrants on their websites. For example, eNom has been named in lawsuits in which a customer registered a domain name through eNom and published content that was allegedly defamatory to another business whose name is similar to the domain name. Other allegations of liability have been made based on domain name registrants’ alleged violations of copyrights or trademarks of third parties. In each of these cases, plaintiffs may argue that we are responsible because we benefited from or participated in the infringing conduct. In addition, we may be embroiled in complaints and lawsuits which, even if ultimately resolved in our favor, add to our costs of doing business and may divert management’s time and attention.

We provide an automated service that enables a user to register a domain name and publish its content on a website hosted on that domain name. Our registrars do not monitor or review, nor do our registrar agreements with ICANN require that we monitor or review, the appropriateness of the domain names registered by domain name registrants or the content of registrant websites, and we have no control over the activities in which our domain name registrants engage. While we have policies in place to terminate domain name registrations or to take other appropriate action if presented with a court order, governmental injunction or evidence of illegal conduct from law enforcement or a

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trusted industry partner, we have in the past been publicly criticized for not being more proactive in certain areas, such as policing online pharmacies acting in violation of U.S. law by consumer watchdogs, and we may encounter similar criticism in the future. This criticism could harm our reputation. Conversely, were we to terminate a domain name registration in the absence of legal compulsion or clear evidence of illegal conduct from a legitimate source, we could be criticized for prematurely and improperly terminating a domain name registered by a customer. In addition, despite the policies we have in place to terminate domain name registrations or to take other appropriate actions, customers could nonetheless engage in prohibited activities.

Finally, existing bodies of law, including the criminal laws of various states, may be deemed to apply or new statutes or regulations may be adopted in the future impacting domain name registrants or their websites, any of which could expose us to further liability and increase our costs of doing business.

We may face liability or become involved in disputes over registration of domain names and control over websites.

As a domain name registrar, we regularly become involved in disputes over registration of domain names and we may become involved in similar disputes with our registry services business. Most of these disputes arise as a result of a third party registering a domain name that is identical or similar to another party’s trademark or the name of a living person. These disputes are typically resolved through the Uniform Domain‑Name Dispute‑Resolution Policy (the “UDRP”), ICANN’s administrative process for domain name dispute resolution, or less frequently through litigation under the Anticybersquatting Consumer Protection Act (“ACPA”) or under general theories of trademark infringement or dilution. Therefore, we may face an increased volume of domain name registration disputes in the future as the overall number of registered domain names increases.

Domain name registrars also face potential tort law liability for their role in wrongful transfers of domain names. The safeguards and procedures we have adopted may not be successful in insulating us against liability from such claims in the future. In addition, we face potential liability for other forms of “domain name hijacking,” including misappropriation by third parties of our network of customer domain names and attempts by third parties to operate websites on these domain names or to extort the customer whose domain name and website were misappropriated. Furthermore, our risk of incurring liability for a security breach on a customer website would increase if the security breach were to occur following our sale to a customer of a Secure Socket Layer (“SSL”) certificate that proved ineffectual in preventing the security breach. Finally, we are exposed to potential liability as a result of our private domain name registration service, wherein we become the domain name registrant, on a proxy basis, on behalf of our customers. While we have a policy of providing the underlying Whois information and reserve the right to cancel privacy services on domain names giving rise to domain name disputes, including when we receive reasonable evidence of an actionable harm, the safeguards we have in place may not be sufficient to avoid liability in the future, which could increase our costs of doing business.

As the number of available domain names with commercial value in existing TLDs diminishes over time, our domain name registration revenue and our overall business could be adversely impacted.

As the number of domain name registrations increases and the number of available domain names with commercial value in existing TLDs diminishes over time and if it is perceived that the more desirable domain names are generally unavailable (and new gTLDs are not seen as a viable alternative), fewer Internet users may register domain names with us. If this occurs, our domain name registration revenue and our overall business could be adversely affected.

Changes in Internet user behavior, either as a result of evolving technologies or user practices, may impact the demand for domain names.

Currently, Internet users often navigate to a website either by directly typing its domain name into a web browser or through the use of a search engine. If (i) web browser or Internet search technologies were to change significantly; (ii) Internet search engines were to change the value of their algorithms on the use of a domain name for finding a website; (iii) Internet users’ preferences or practices were to shift away from direct navigation; (iv) Internet users were to significantly increase the use of web and mobile device applications to locate and access content; or

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(v) Internet users were to increasingly use third level domains or alternate identifiers, such as social networking and microblogging sites, in each case the demand for domain names could decrease.

We may experience unforeseen liabilities in connection with our acquisitions of Internet domain names or arising out of domain names included in our portfolio of domain names that are monetized via advertising, which could negatively impact our financial results.

Certain of our acquisitions involve the acquisition of a large portfolio of previously registered domain names. Furthermore, we have separately acquired, and may acquire in the future, additional previously registered domain names. In some cases, these acquired names may have trademark significance that is not readily apparent to us or is not identified by us in the bulk purchasing process. As a result we may face demands by third‑party trademark owners asserting infringement or dilution of their rights and seeking transfer of acquired domain names under the UDRP or actions under the ACPA. The potential violation of third‑party intellectual property rights and potential causes of action under consumer protection laws may subject us to unforeseen liabilities including injunctions and judgments for money damages.

We depend upon the quality of traffic to our portfolio of domain names and the domain names of third parties to provide value to online advertisers who advertise on those domain names, and any failure in our quality control could have a material adverse effect on the value of such domain names to our third‑ party advertisement distribution providers and online advertisers and thereby adversely affect our revenue.

We use technology and processes to monitor the quality of, and to identify any anomalous metrics associated with, the Internet traffic that we deliver to online advertisers and to our network of customer domain names. These metrics may be indicative of low quality clicks such as non‑human processes, including robots, spiders or other software, the mechanical automation of clicking,  and other types of invalid clicks or click fraud. Even with such monitoring in place, there is a risk that a certain amount of low‑quality traffic, or traffic that is deemed to be invalid by online advertisers, will be delivered to such online advertisers. As a result, we may be required to credit future amounts owed to us by our advertisers. Furthermore, low‑quality or invalid traffic may be detrimental to our relationships with third‑party advertisement distribution providers and online advertisers, and could adversely affect our revenue.

If, due to new regulations or otherwise, we are unable to acquire, renew or sell domain names, we may not be able to maintain our domain name aftermarket and advertising business.

Maintaining our domain name aftermarket and advertising services business depends on our ability to acquire domain names from a variety of sources. These sources include previously registered domain names that are not renewed at the domain name registry by the current owner, private sales of domain names, participation in domain name auctions and registering new domain names identified by us. The acquisition and renewal of domain names generally are governed by regulatory bodies. These regulatory bodies could establish additional requirements for previously registered domain names or modify the requirements for holding domain names. Any changes in the way expired registrations of domain names are made available for acquisition could make it more difficult to acquire domain names. Similarly, increasing competition from other potential buyers could make it more difficult for us to acquire domain names on a cost‑effective basis. Any such adverse change in our ability to acquire high quality, previously registered domain names, as well as any increase in competition in the domain name reseller market, could have a material adverse effect on our ability to maintain our domain name aftermarket and advertising business, which could adversely affect our business, financial condition and results of operations. In addition, our failure to renew our domain name registrations or any increase in the cost of renewal could have a material adverse effect on our revenue and profitability.

Changes in the level of spending on online advertising and/or the way that online networks compensate owners of websites could impact the demand for domain names.

Many domain name registrants seek to generate revenue through advertising on their websites. Changes in the way these registrants are compensated (including changes in methodologies and metrics) by advertisers and advertisement placement networks, such as Google, Yahoo! and Bing, have, and may continue to, adversely affect the market for those domain names favored by such registrants.  These changeshave resulted in, and may continue to result

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in, a decrease in demand and/or the renewal rate for those domain names. For example, Google has in the past changed, and may in the future change, its search algorithm and pay‑per‑click advertising policies to provide less compensation for certain types of websites. This has made such websites less profitable, which has resulted in, and may continue to result in, fewer domain name registrations and renewals. In addition, as a result of the general economic environment, spending on online advertising and marketing may not increase as projected or may be reduced, which in turn, may result in a further decline in the demand for those domain names.

We face a number of operational challenges to our business, which may make it difficult to predict our future performance.

Our revenue and operating results could fail to meet expectations if we are unable to adequately address a number of operational challenges, some of which are outside of our control, including:

· a reduction in the number of domain names under management or in the rate at which this number grows, due to slow growth or market contraction, lower renewal rates or other factors;

· reductions in the percentage of our domain name registration customers who purchase additional services from us;

· changes in our pricing policies or those of our competitors, changes in domain name fees charged to us by Internet registries or ICANN, or other competitive pressures on our prices;

· our ability to identify, develop and successfully launch new products and services;

· the timing and success of new services and technology enhancements introduced by our competitors, which could impact both new customer growth and renewal rates;

· the entry of new competitors in our markets;

· our ability to keep our registrar and registry platforms and our domain name registration services operational at a reasonable cost and without service interruptions;

· increased product development expenses relating to the development of new services;

· the amount and timing of operating costs and capital expenditures related to the maintenance and expansion of our services, operations and infrastructure;

· our ability to identify acquisition targets and successfully integrate acquired businesses into our operations;

· our focus on long‑term goals over short‑term results;

· federal, state or foreign regulation or legislation affecting our business; and

· weakness or uncertainty in general economic or industry conditions.

It is possible that in one or more future quarters, due to any of the factors listed above, a combination of those factors or other reasons, our operating results may be below our expectations and the expectations of public market analysts and investors. Such an event could have a material adverse impact on the price of our shares.

Difficult economic and financial conditions could have a material adverse effect on us.

The financial results of our business are both directly and indirectly dependent upon economic conditions throughout the world, which in turn can be impacted by conditions in the global financial markets. Uncertainty about

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global economic conditions may lead businesses to postpone spending in response to tighter credit and reductions in income or asset values. Weak economic activity may lead government customers to cut back on services. Factors such as interest rates, availability of credit, inflation rates, changes in laws (including laws relating to taxation), trade barriers, currency exchange rates and controls, and national and international political circumstances (including wars, terrorist acts or security operations) could have a material adverse effect on our business and investments, which could reduce our revenue, profitability and value of our assets. These factors may also adversely affect the business, liquidity and financial condition of our customers. In addition, periods of poor economic conditions could increase our ongoing exposure to credit risks on our accounts receivable balances. This could have a material adverse effect on our business, financial condition and results of operations.

If we do not effectively manage our growth, our operating performance will suffer and we may lose customers.

Overall growth will place significant demands on our management and our operational and financial infrastructure. In particular, continued growth may make it more difficult for us to accomplish the following:

· successfully scale our technology and infrastructure to support a larger business;

· maintain our customer service standards;

· develop and improve our operational, financial and management controls and maintain adequate reporting systems and procedures;

· acquire and integrate businesses; and

· respond effectively to competition and potential negative effects of competition on profit margins.

In addition, our personnel, systems, procedures and controls may be inadequate to support our current and future operations. The improvements required to manage our growth will require us to make significant expenditures, expand, train and manage our employee base and allocate valuable management resources. If we fail to effectively manage our growth, our operating performance will suffer and we may lose our customers and key personnel.

We may undertake one or more acquisitions that could entail significant execution, integration and operational risks.

Our future growth may depend, in part, on acquisitions of complementary businesses, solutions or technologies rather than internal development. We may make acquisitions in the future to increase the scope of our business domestically and internationally. The identification of suitable acquisition candidates can be difficult, time‑consuming and costly, and we may not be able to successfully complete identified acquisitions. If we are unable to identify suitable future acquisition opportunities, reach agreement with such parties or obtain the financing necessary to make such acquisitions, we could lose market share to competitors who are able to make such acquisitions. This loss of market share could negatively impact our business, revenue and future growth.

Furthermore, even if we successfully complete an acquisition, we may be unable to successfully assimilate and integrate the websites, business, technologies, solutions, personnel or operations of the acquired company, particularly if key personnel of an acquired company decide not to work for us. In addition, we may incur indebtedness to complete an acquisition, which would increase our costs and impose operational limitations, or issue equity securities, which would

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dilute our stockholders’ ownership and could adversely affect the price of our common stock. We may also unknowingly inherit liabilities from future acquisitions that arise after the acquisition and are not adequately covered by indemnities.

We are bound by covenants contained in our credit facilities that may restrict our ability to pursue our business strategies, and the financing incurred under our credit facilities could adversely affect our liquidity and financial condition.

Our credit facilities require us to comply with various covenants that limit our ability, among other things, to:

· incur additional indebtedness;

· grant additional liens;

· make investments;

· complete mergers or acquisitions;

· dispose of assets;

· pay dividends, redeem or repurchase stock; and

· engage in transactions with our affiliates.

These restrictions could inhibit our ability to pursue our business strategies. In addition, our credit facilities include financial covenants.  The SVB Credit Facility requires us to maintain a minimum consolidated fixed charge coverage ratio, a maximum consolidated senior leverage ratio, a maximum consolidated net leverage ratio, and minimum liquidity. Our Tennenbaum Credit Facility requires us to maintain compliance with a maximum consolidated net leverage ratio and minimum liquidity. The Tennenbaum Credit Facility is also subject to certain mandatory prepayments from 50% of excess cash flow (as determined under the Tennenbaum Credit Facility), which will be paid on the first to occur of the maturity, termination or refinancing of the SVB Credit Facility or the acceleration and termination of the SVB Credit Facility, from excess cash flow determined for the period from the closing of the Tennenbaum Credit Facility to the end of the fiscal year ended as of the date 90 days prior to such date, and thereafter annually for excess cash flow determined for each subsequent fiscal year; from certain asset sales and insurance and condemnation events, to the extent not used to prepay loans and cash collateralize letters of credit and permanently reduce the commitments under the SVB Credit Facility, subject to customary reinvestment rights; and from the issuances of certain indebtedness.  Mandatory prepayments from asset sales and issuances of indebtedness are subject to a prepayment premium that is the same or for voluntary prepayments.  Our failure to comply with any covenants in our credit facilities, including any of the financial covenants, could result in an event of default. Our failure to meet our payment obligations under our credit facilities, including any principal and accrued interest payments, could also result in an event of default. Our ability to meet our payment obligations and to satisfy our financial covenants under our credit facilities depends upon our ability to generate cash flow. Our ability to generate cash flow, to some extent, is subject to general economic, financial, competitive, legislative and regulatory factors that are beyond our control. There is no assurance that our business will generate sufficient cash flow from operations in an amount sufficient to enable us to meet our payment obligations and financial covenants under our credit facilities. If we are not able to generate sufficient cash flow from operations to service our obligations under our credit facilities, we may need to refinance or restructure our credit facilities, sell assets,

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reduce or delay capital investments, or seek to raise additional capital. If we are unable to implement one or more of these alternatives, we may not be able to meet our payment obligations under our credit facilities.

If an event of default occurs, and such event of default is not cured or waived, our lender could:

· terminate its lending commitments;

· accelerate all outstanding obligations under the credit facility and demand that all outstanding obligations be due and payable immediately; and

· exercise its remedies as a secured creditor with respect to all of the collateral that is securing the outstanding obligations under our credit facilities.

If our lenders exercise their remedies under our credit facilities and accelerate all outstanding obligations under our credit facilities, our assets and cash flow may not be sufficient to fully repay all of our outstanding obligations under our credit facilities.

We may need additional funding to meet our obligations and to pursue our business strategy. Additional funding may not be available to us and our financial condition could therefore be adversely affected.

To the extent we do not generate sufficient cash from operations, we will need to raise additional funds through public or private debt or equity financings to meet our ongoing obligations and to execute our growth strategy, which may include the selective acquisition of additional new gTLDs, domain names and technologies as well as other domain name services providers. Adequate sources of capital funding may not be available when needed, or may not be available on favorable terms. If we raise additional funds by issuing equity or certain types of convertible debt securities, dilution to the holdings of our existing stockholders may result. If we raise debt financing, we will incur interest expense and the terms of such debt may be at unfavorable rates and could require the pledge of assets as security or subject us to financial and/or operating covenants that affect our ability to conduct our business. Any equity capital raising activities would be subject to the restrictions in the Tax Matters Agreement. See “Certain Relationships and Related Party Transactions—Agreements between Demand Media and Rightside Relating to the Separation—Tax Matters Agreement” and “The Spin‑Off—Material U.S. Federal Income Tax Consequences” in our Form 10 filed with the SEC on July 14, 2014 for additional information. If funding is insufficient at any time in the future, or we are unable to conduct capital raising activities as a result of restrictions in the Tax Matters Agreement, we will be required to delay, reduce the scope of, or eliminate material parts of the implementation of our business strategy, including potential additional acquisitions or internally developed business, and we may be unable to take advantage of business opportunities or respond to competitive pressures, any of which could harm our business, financial condition and results of operations.

If we do not continue to innovate and provide products and services that are useful to our customers, we may not remain competitive, and our revenue and operating results could suffer.

Our success depends on our ability to innovate and provide products and services useful to our customers in our registrar and registry service offerings. Our competitors are constantly developing innovations in domain name registration and related services, such as web hosting, email and website creation solutions. As a result, we must continue to invest significant resources in product development in order to maintain and enhance our existing products and services and introduce new products and services that deliver a sufficient return on investment and that our customers can easily and effectively use. If we are unable to provide quality products and services, we may lose customers, and our revenue and operating results would suffer.

We may have difficulty scaling and adapting our existing technology and network infrastructure to accommodate increased traffic and technology advances or changing business requirements, which could lead to the loss of consumers, and cause us to incur expenses to make architectural changes.

To be successful, our network infrastructure has to perform well and be reliable. The greater the user traffic and the greater the complexity of our products and services, the more computing power we will need. In the future, we may

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spend substantial amounts to purchase or lease data centers and equipment, upgrade our technology and network infrastructure to handle increased traffic on our owned and operated websites and roll out new products and services. This expansion could be expensive and complex and could result in inefficiencies or operational failures. If we do not implement this expansion successfully, or if we experience inefficiencies and operational failures during its implementation, the quality of our products and services and our customers’ experience could decline. This could damage our reputation and lead us to lose current and potential customers. The costs associated with these adjustments to our architecture could harm our operating results. Cost increases, failure to accommodate new technologies or changing business requirements could harm our business, revenue and financial condition.

If the security measures for our systems are breached, or if our products or services are subject to attacks that degrade or deny the ability of users and customers to maintain or access them, our reputation and businessmay be harmed and we may incur significant legal and financial exposure. 

Some of our systems, products and services, including through third-party service providers, store, process and transmit user, customers’, and our own information.  Therefore, the secure maintenance and transmission of customer information is an important element of our operations.Our information technology and other systems that maintain and transmit customer information, including location or personal information, or those of service providers, may be compromised by a malicious third-party penetration of our network security, or that of a third-party service provider, or impacted by advertent or inadvertent actions or inactions by our employees, or those of a third-party service provider.  Cyber-attacks, which include the use of malware, computer viruses and other means for disruption or unauthorized access, have increased in frequency, scope and potential harm in recent years.  While, to date, we have not been the subject of cyber-attacks or other cyber incidents which, individually or in the aggregate, have been material to our operations or financial condition, the preventive actions we take to reduce the risk of cyber incidents and protect our information technology and networks may be insufficient to repel a major cyber-attack in the future.  As a result, our users’ and customers’ information may be lost, disclosed, accessed, used, corrupted, destroyed or taken without their consent. 

In addition, we and our third-party service providers process and maintain our proprietary business information, employee information and data related to our business-to-business customers or suppliers. Our information technology and other systems that maintain and transmit this information, or those of service providers, may also be compromised by a malicious third-party penetration of our network security or that of a third-party service provider, or impacted by intentional or inadvertent actions or inactions by our employees or those of a third-party service provider. We also purchase equipment from third parties that could contain software defects, Trojan horses, malware, or other means by which third parties could access our network or the information stored or transmitted on such networks or equipment. As a result, our business information, employee information or customer or supplier data may be lost, disclosed, accessed, used, corrupted, destroyed or taken without consent.

The Federal Trade Commission expects companies like ours to comply with guidelines issued under the Federal Trade Commission Act that govern the collection, use and storage of consumer information, and establish principles relating to notice, consent, access and data integrity and security.  Several states have adopted legislation that requires businesses to implement and maintain reasonable security procedures and practices to protect sensitive personal information and to provide notice to consumers in the event of a security breach.  Any failure, or perceived failure, by us to comply with our posted privacy policies or with any data-related consent orders, Federal Trade Commission requirements or orders or other federal, state or international privacy or consumer protection-related laws, regulations or industry self-regulatory principles could result in claims, proceedings or actions against us by governmental entities or others or other liabilities, which could adversely affect our business.

Any major compromise of our data or network security, failure to prevent or mitigate the loss of our services or information and delays in detecting any such compromise or loss could disrupt our operations, impact our reputation and customers’ willingness to purchase our services and subject us to additional costs and liabilities, including litigation and regulatory investigations, which could be material.  A determination by the Federal Trade Commission that we did not maintain “reasonable security” for our customer and/or employee information could also impact our reputation and customers’ willingness to purchase our services and subject us to additional costs and liabilities, including litigation and regulatory investigations, which could be material. 

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We rely on technology infrastructure and a failure to update or maintain this technology infrastructure could adversely affect our business.

Significant portions of our products and services are dependent on technology infrastructure that was developed over multiple years. Updating and replacing our technology infrastructure may be challenging to implement and manage, may take time to test and deploy, may cause us to incur substantial costs and may cause us to suffer data loss or delays or interruptions in service. For example, we have suffered a number of server outages at our data center facilities, which resulted from certain failures that triggered data center wide outages and disrupted critical technology and infrastructure service capabilities. These events impacted service to some of our customers. As a result of these data center outages, we have developed initiatives to create automatic backup capacity at an alternate facility for our top revenue generating services to address similar scenarios in the future. However, there can be no assurance that our efforts to develop sufficient backup and redundant services will be successful or that we can prevent similar outages in the future. Delays or interruptions in our service may cause our consumers to become dissatisfied with our offerings and could adversely affect our business. Failure to update our technology infrastructure as new technologies become available may also put us in a weaker position relative to a number of our key competitors. Competitors with newer technology infrastructure may have greater flexibility and be in a position to respond more quickly to new opportunities, which may impact our competitive position in certain markets and adversely affect our business.

The interruption or failure of our information technology and communications systems, or those of third parties that we rely upon, could adversely affect our business, financial condition and results of operations.

The availability of our products and services depends on the continuing operation of our information technology and communications systems. Any damage to or failure of our systems, or those of third parties that we rely upon (e.g., co‑location providers for data servers, storage devices, or our registry DNS services provider for our registry and network access) could result in interruptions in our service, which could reduce our revenue and profits, and damage our brand. Our systems are also vulnerable to damage or interruption from natural disasters, power loss, telecommunications failures, computer viruses or other attempts to harm our systems. We have experienced a number of computer distributed denial of service attacks which have forced us to shut down certain of our websites, including eNom.com, and future denial of service attacks may cause all or portions of our websites to become unavailable. In addition, some of our data centers are located in areas with a high risk of major earthquakes. Our data centers are also subject to break‑ins, sabotage and intentional acts of vandalism, and to potential disruptions if the operators of these facilities have financial difficulties. Some of our systems are not fully redundant, and our disaster recovery planning is currently underdeveloped and does not account for all eventualities. The occurrence of a natural disaster, a decision to close a facility we are using without adequate notice for financial reasons or other unanticipated problems at our data centers could result in lengthy interruptions in our service.

Furthermore, third‑party service providers may experience an interruption in operations or cease operations for any reason. For example, Root Zone servers are administered and operated by a number of independent operators on a non‑regulated basis. Root Zone servers are name servers that contain authoritative data for the very top of the DNS hierarchy. These servers have the software and data needed to locate name servers that contain authoritative data for the TLDs. These Root Zone servers are critical to the functioning of the Internet. Consequently, our registry services business could be harmed if any of the independent operators fails to include or provide accessibility to the data that it maintains in the Root Zone servers that it controls, or if it or any of the third parties routing Internet communications presents inconsistent data for the TLDs or DNS generally. We may also be limited in our remedies against these providers in the event of a failure of service. We also rely on third‑party providers for components of our technology platform, such as hardware and software providers and registry DNS services provider for our registry. A failure or limitation of service or available capacity by any of these third‑party providers could adversely affect our business, financial condition and results of operations.

We depend on key personnel to operate our business, and if we are unable to retain our current personnel or hire additional personnel, our ability to develop and successfully market our business could be harmed.

We believe that our future success is highly dependent on the contributions of our executive officers as well as our ability to attract and retain highly skilled managerial, sales, technical, engineering and finance personnel. We do not

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maintain “key person” life insurance policies for any of our executive officers. Qualified individuals, including engineers, are in high demand, and we may incur significant costs to attract and retain them. All of our officers and other employees are at‑will employees, which means they may terminate their employment relationship with us at any time, and their knowledge of our business and industry would be extremely difficult to replace. If we are unable to attract and retain our executive officers and key employees, our business, operating results and financial condition will be harmed.

Volatility or lack of performance in our stock price may also affect our ability to attract employees and retain our key employees, due to the impact of our stock price on the value of our equity incentive awards. Employees may be more likely to leave us if the equity incentive awards they are granted significantly appreciate in value and create a perceived windfall. In addition, employees may be more inclined to leave us if the value of their equity incentive awards declines with our stock price and these awards fail to provide appropriate incentives.

If we are unable to obtain and maintain adequate insurance, our financial condition could be adversely affected in the event of uninsured or inadequately insured loss or damage. Our ability to effectively recruit and retain qualified officers and directors may also be adversely affected if we experience difficulty in maintaining adequate directors’ and officers’ liability insurance.

While we currently have insurance for our business and property, we may not be able to obtain and maintain insurance policies on terms affordable to us that would adequately insure our business and property against damage, loss or claims by third parties. To the extent our business or property suffers any damages, losses or claims by third parties that are not covered or adequately covered by insurance, our financial condition may be materially adversely affected.

We currently have directors’ and officers’ liability insurance. If we are unable to maintain sufficient insurance to cover liability claims made against our officers and directors, we may not be able to retain or recruit qualified officers and directors to manage our company, which could have a material adverse effect on our operations.

It may be difficult for us to retain or attract qualified officers and directors, which would adversely affect our business and our ability to maintain the listing of our common stock on Nasdaq.

We may be unable to attract and retain qualified officers, directors and members of board committees required to effectively manage our business as a result of changes in the rules and regulations which govern publicly held companies, including, but not limited to, certifications from executive officers and requirements for financial experts on boards of directors. The perceived increased personal risk associated with these changes may deter qualified individuals from accepting these roles. Further, applicable rules and regulations of the SEC and Nasdaq heighten the requirements for board or committee membership, particularly with respect to an individual’s independence from the corporation and level of experience in finance and accounting matters. We may have difficulty attracting and retaining directors with the requisite qualifications. If we are unable to attract and retain qualified officers and directors, our business and our ability to maintain the listing of our shares of common stock on Nasdaq would be adversely affected.

If we do not adequately protect our intellectual property rights, our competitive position and business may suffer.

Our intellectual property, consisting of trade secrets, trademarks, copyrights and patents, is, in the aggregate, important to our business. We rely on a combination of trade secret, trademark, copyright and patent laws in the United States and other jurisdictions together with confidentiality agreements and technical measures to protect our proprietary rights. We rely more heavily on trade secret protection than patent protection. To protect our trade secrets, we control access to our proprietary systems and technology and enter into confidentiality and invention assignment agreements with our employees and consultants and confidentiality agreements with other third parties. Effective trade secret, copyright, trademark and patent protection may not be available in all countries where we currently operate or in which we may operate in the future. We face risks related to our intellectual property including that:

· our intellectual property rights may not provide competitive advantages to us;

· our ability to assert our intellectual property rights against potential competitors or to settle current or future disputes may be limited by our agreements with third parties;

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· our intellectual property rights may not be enforced in jurisdictions where competition is intense or where legal protection is weak;

· any of the patents, trademarks, copyrights, trade secrets or other intellectual property rights that we presently employ in our business could lapse or be invalidated, circumvented, challenged or abandoned;

· competitors could design around our protected systems and technology; or

· we could lose the ability to assert our intellectual property rights against others.

Policing unauthorized use of our proprietary rights can be difficult and costly. In addition, it may be necessary to enforce or protect our intellectual property rights through litigation or to defend litigation brought against us, which could result in substantial costs and diversion of resources and management attention and could adversely affect our business, even if we are successful on the merits.

Third parties may sue us for intellectual property infringement or misappropriation, which, if successful, could require us to pay significant damages or curtail our offerings.

We cannot be certain that our internally developed or acquired systems and technologies do not and will not infringe the intellectual property rights of others. In addition, we license content, software and other intellectual property rights from third parties and may be subject to claims of infringement or misappropriation if such parties do not possess the necessary intellectual property rights to the products or services they license to us. We have in the past received threats from patent trolls. We may in the future be subject to legal proceedings and claims that we have infringed the patent or other intellectual property rights of a third party. These claims sometimes involve patent holding companies or other patent owners who have no relevant product revenue and against whom our own patents may provide little or no deterrence. In addition, third parties may in the future assert intellectual property infringement claims against our customers, which we have agreed in certain circumstances to indemnify and defend against such claims. Any intellectual property‑related infringement or misappropriation claims, whether or not meritorious, could result in costly litigation and could divert management resources and attention. Moreover, should we be found liable for infringement or misappropriation, we may be required to seek to enter into licensing agreements, which may not be available on acceptable terms or at all, pay substantial damages or limit or curtail our systems and technologies. Any successful lawsuit against us could also subject us to the invalidation of our proprietary rights. Moreover, we may need to redesign some of our systems and technologies to avoid future infringement liability. Any of the foregoing could prevent us from competing effectively and increase our costs.

The use of open source software in our products and services may expose us to additional risks and negatively affect our intellectual property rights.

Some of our products and services use or incorporate software that is subject to one or more open source licenses. Open source software is typically freely accessible, usable, and modifiable. Certain open source software licenses require a user who intends to distribute the open source software as a component of the user’s software to disclose publicly part or all of the source code to the user’s software. In addition, certain open source software licenses require the user of such software to make any derivative works of the open source code available to others on potentially unfavorable terms or at no cost.

The terms of many open source licenses have not been interpreted by U.S. or foreign courts. Accordingly, there is a risk that those licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to commercialize our products. In that event, we could be required to seek licenses from third parties in order to continue offering our products or services, to re-develop our products or services, to discontinue sales of our products or services, or to release our proprietary software code under the terms of an open source license, any of which could harm our business. Further, given the nature of open source software, it may be more likely that third parties might assert copyright and other intellectual property infringement claims against us based on our use of these open source software programs.

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While we monitor the use of all open source software in our products, solutions, processes, and technology and try to ensure that no open source software is used in such a way as to require us to disclose the source code to the related product or solution when we do not wish to do so, it is possible that such use may have inadvertently occurred in deploying our proprietary solutions. In addition, if a third-party software provider has incorporated certain types of open source software into software we license from such third party for our products and services without our knowledge, we could, under certain circumstances, be required to disclose the source code to our products and services. This could negatively affect our intellectual property position and our business, results of operations, and financial condition.

Adverse results of legal proceedings could have a material adverse effect on us.

We are subject to, and may in the future be subject to, a variety of legal proceedings and claims that arise out of the ordinary conduct of our business. Results of legal proceedings cannot be predicted with certainty. Irrespective of their merits, legal proceedings may be both lengthy and disruptive to our operations and may cause significant expenditure and diversion of management attention. We may be faced with significant monetary damages or injunctive relief against us that could have a material adverse effect on all or a portion of our business operations or a material adverse effect on our financial condition and results of operations.

Certain U.S. and foreign laws could subject us to claims or otherwise harm our business.

We are subject to a variety of laws in the United States and abroad that may subject us to claims or other remedies. Our failure to comply with applicable laws may subject us to additional liabilities, which could adversely affect our business, financial condition and results of operations. Laws and regulations that are particularly relevant to our business address:

· domain name registration;

· information security and privacy;

· pricing, fees and taxes; and

· intellectual property rights, including secondary liability for infringement by others.

Claims have been either threatened or filed against us under both U.S. and foreign laws for defamation, copyright infringement, patent infringement, privacy violations, cybersquatting and trademark infringement. In the future, claims may also be brought against us based on tort law liability and other theories based on our products and services.

Our business operations in countries outside the United States are subject to a number of U.S. federal laws and regulations, including restrictions imposed by the Foreign Corrupt Practices Act (“FCPA”), as well as trade sanctions administered by the Office of Foreign Assets Control (“OFAC”) and the U.S. Department of Commerce. The FCPA is intended to prohibit bribery of foreign officials or parties and requires public companies in the United States to keep books and records that accurately and fairly reflect those companies’ transactions. OFAC and the U.S. Department of Commerceadminister and enforce economic and trade sanctions based on U.S. foreign policy and national security goals against targeted foreign states, organizations and individuals.

If we fail to comply with these laws and regulations, we could be exposed to claims for damages, financial penalties, reputational harm, incarceration of our employees or restrictions on our operations, which could increase our costs of operations, reduce our profits or cause us to forgo opportunities that would otherwise support our growth.

Economic and other risks associated with international operations could impede our international expansion, which could limit our future growth.

We currently operate in the United States and through foreign subsidiaries in Dublin, Ireland; Ottawa, Canada; George Town, Grand Cayman; and Queensland, Australia and we may continue to expand into additional international

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markets. Our limited experience operating internationally exposes us to additional risks and operating costs. We cannot be certain that we will be successful in introducing or marketing our services internationally or that our services will gain market acceptance or that growth in commercial use of the Internet internationally will continue. There are risks inherent in conducting business in international markets, including the need to localize our products and services to foreign customers’ preferences and customs, difficulties in managing operations due to language barriers, distance, staffing and cultural differences, application of foreign laws and regulations, tariffs and other trade barriers, fluctuations in currency exchange rates, establishing management systems and infrastructures, reduced protection for intellectual property rights in some countries, changes in foreign political and economic conditions, and potentially adverse tax consequences. Our inability to expand and market our products and services internationally could have a negative effect on our business, revenue, financial condition and results of operations.

In addition, we expect that a substantial amount of our cash will be generated by our foreign subsidiaries and repatriation of that cash to the United States may be inefficient from a tax perspective. Any payment of distributions, loans or advances to us by our foreign subsidiaries could be subject to restrictions on, or taxation of, dividends or repatriation of earnings under applicable local law, monetary transfer restrictions and foreign currency exchange regulations in the jurisdictions in which our subsidiaries operate. These restrictions on our investment or repatriation of cash may have a negative effect on our business, revenue, financial condition and results of operations.

If we fail to comply with applicable credit card rules and regulations, we may incur additional fees, fines and ultimately the revocation of the right to accept credit card payments, which could have a material adverse effect on our business, financial condition and results of operations.

Many of our customers pay amounts owed to us using a credit card or debit card. For credit and debit card payments, we pay interchange and other fees, which may increase over time and raise our expenses and adversely affect our net income. We are also subject to payment card association operating rules, certification requirements and rules governing electronic funds transfers, which could change or be reinterpreted to make it difficult or impossible for us to comply. We believe we are compliant in all material respects with the Payment Card Industry Data Security Standard, which incorporates Visa’s Cardholder Information Security Program and MasterCard’s Site Data Protection standard. However, there is no guarantee that we will maintain such compliance or that compliance will prevent illegal or improper use of our payment system. If we fail to comply with these rules or requirements, we could be subject to fines and higher transaction fees and lose our ability to accept credit and debit card payments from our customers. A failure to adequately control fraudulent credit card transactions would result in significantly higher credit card‑related costs and could have a material adverse effect on our business, financial condition and results of operations.

Changes in state, federal or international taxation laws and regulations may adversely affect our business.

Due to the global nature of the Internet, it is possible that, although our services and the Internet transmissions related to them typically originate in California, Illinois, Nevada, Virginia, Washington and Ireland, governments of other states or foreign countries might attempt to regulate our transmissions or levy sales, income or other taxes relating to our activities. Tax authorities at the international, federal, state and local levels are currently reviewing the appropriate treatment of companies engaged in Internet commerce. New or revised international, federal, state or local tax regulations may subject our customers or us to additional sales, income and other taxes. We cannot predict the effect of current attempts to impose sales, income or other taxes on commerce over the Internet. New or revised taxes and, in particular, sales taxes, would likely increase the cost of doing business online and decrease the attractiveness of advertising and selling goods and services over the Internet. New taxes could also create significant increases in internal costs necessary to capture data, and collect and remit taxes. Any of these events could have an adverse effect on our business and results of operations and discourage the registration or renewal of domain names for e‑commerce.

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Risks Relating to the Spin‑Off

We may be unable to achieve some or all of the benefits that we expect to achieve as an independent, publicly traded company.

By separating from Demand Media, we may be more susceptible to securities market fluctuations and other adverse events than we would have otherwise encountered as part of Demand Media. In addition, we may not be able to achieve some or all of the benefits that we expect to achieve as an independent, publicly traded company in the time in which we expect to do so, if at all. For example, the process of operating as a newly independent, public company may distract our management team from focusing on our business and strategic priorities. If we do not realize the anticipated benefits from the spin‑off for any reason, our business may be adversely affected.

Our historical financial information may not be representative of the results we would have achieved as a stand‑alone public company during the periods presented and may not be a reliable indicator of our future results.

The historical financial data that we have included in this quarterly report may not necessarily reflect what our financial position, results of operations or cash flows would have been had we been an independent entity during the periods presented or those that we will achieve in the future. The costs and expenses reflected in our historical financial data include an allocation for certain corporate functions historically provided by Demand Media, including legal, information technology, financial systems, human resources, accounting and equity administration services, that may be different from the comparable expenses that we would have incurred had we operated as a stand‑alone company. Our historical financial data does not reflect changes that will occur in our cost structure and operations as a result of our transition to becoming a stand‑alone public company, including changes in our employee base, potential increased costs associated with reduced economies of scale and increased costs associated with SEC reporting and requirements. Accordingly, the historical financial data presented in this report should not be assumed to be indicative of what our financial condition or results of operations actually would have been as an independent, publicly traded company nor to be a reliable indicator of what our financial condition or results of operations actually may be in the future.

We will rely on Demand Media’s performance under various agreements and we and Demand Media will continue to be dependent on each other for certain support services for each respective business.

We entered into various agreements with Demand Media in connection with the separation, including a  Transition Services Agreement, Distribution Agreement, Tax Matters Agreement and Employee Matters Agreement. Our subsidiary, Rightside Operating Co.,  entered into an Intellectual Property Assignment and License Agreement with Demand Media in connection with the separation. These agreements govern our relationship with Demand Media subsequent to the separation. If Demand Media were to fail to fulfill its obligations under these agreements, we could suffer operational difficulties or significant losses.

If we are required to indemnify Demand Media for certain liabilities and related losses arising in connection with any of these agreements, or if Demand Media is required to indemnify us for certain liabilities and related losses arising in connection with any of these agreements and Demand Media does not fulfill its obligations to us, we may be subject to substantial liabilities, which could materially adversely affect our financial position.

Additionally, although Demand Media is contractually obligated to provide us with certain services during the term of the Transition Services Agreement, we cannot assure you that these services will be performed as efficiently or proficiently as they were prior to the separation. The Transition Services Agreement also contains provisions that may be more favorable than terms and provisions we might have obtained in arms‑length negotiations with unaffiliated third parties. When Demand Media ceases to provide services pursuant to the Transition Services Agreement, our costs of procuring those services from third parties may increase. In addition, we may not be able to replace these services in a timely manner or enter into appropriate third‑party agreements on terms and conditions, including cost, comparable to those under the Transition Services Agreement. To the extent that we require additional support from Demand Media not addressed in the Transition Services Agreement, we would need to negotiate the terms of receiving such support in future agreements. See “Certain Relationships and Related Party Transactions—Agreements between Demand Media and Rightside Relating to the Separation” in our Form 10 filed with the SEC on July 14, 2014.

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Our ability to operate our business effectively may suffer if we do not, quickly and effectively, establish our own financial, administrative, accounting and other support functions in order to operate as a separate, stand‑alone company, and we cannot assure you that the support services Demand Media has agreed to provide us will be sufficient for our needs.

Historically, we have relied on financial, administrative, accounting and other resources of Demand Media to support the operation of our business. In addition, given that our financial results reflect periods during which we were part of Demand Media, we will continue to rely on Demand Media to provide information that will be incorporated into our financial statements.  In conjunction with our separation from Demand Media, we have expanded and continue to expand our financial, administrative, accounting, and other support systems or contract with third parties to replace certain systems that were previously provided by Demand Media. We will also need to maintain our own credit and banking relationships and perform our own financial and operational functions. We cannot assure you that we will be able to successfully put in place the financial and operational systems and processes, as well as the managerial resources necessary to operate as a public company or that we will be able to be profitable doing so. Any failure or significant downtime in our own financial or administrative systems or in Demand Media’s financial or administrative systems during the transition period could impact our results or prevent us from performing other administrative services and financial reporting on a timely basis and could materially harm our business, financial condition and results of operations.  In addition, we do not exercise any control over Demand Media’s accounting staff.  If there is any delay in Demand Media providing us with information that will be incorporated in our financial statements, we may not be able to report our financial results on a timely basis.  If there are any inaccuracies in such information, our reported financial results may also be inaccurate. 

We are a smaller, less diversified company than Demand Media was prior to the distribution.

We  are a smaller, less diversified company focused on the domain name services business, which represents a narrower business focus than Demand Media prior to the separation. With greater concentration in the domain name services market, we may be more vulnerable to changing market conditions, which could materially and adversely affect our business, financial condition and results of operations. In addition, the diversification of revenue, costs, and cash flows will diminish. As a result, it is possible that our results of operations, cash flows, working capital and financing requirements may be subject to increased volatility and it may be difficult or more expensive for us to obtain financing.

We may have difficulty operating as an independent, publicly traded company.

As an independent, publicly traded company, we believe that our business will benefit from, among other things, direct access to equity capital and a tailored capital structure, allowing us to better focus our financial and operational resources on our specific business, allowing our management to design and implement corporate strategies and policies that are based primarily on the business characteristics and strategic decisions of our business, allowing us to more effectively respond to industry dynamics and allowing the creation of effective incentives for our management and employees that are more closely tied to our business performance. However, we may not be able to achieve some or all of the benefits that we believe we can achieve as an independent company in the time we currently expect, if at all. Because our business previously operated as part of Demand Media’s organizational structure, we may not be able to successfully implement the changes necessary to operate independently and may incur additional costs that could adversely affect our business.

As an independent, publicly traded company, we may not enjoy the same benefits that we did as part of Demand Media.

By separating from Demand Media, we may become more susceptible to market fluctuations and other adverse events than when we were part of the current Demand Media organizational structure. As part of Demand Media, we enjoyed certain benefits from Demand Media’s operating diversity and readily available capital to fund investments, as well as opportunities to pursue integrated strategies with Demand Media’s other businesses. As an independent, publicly traded company, we may not have similar diversity, available capital or integration opportunities and we may not have similar access to debt and equity capital markets. In addition, we shared economies of scope and scale with Demand Media with respect to certain costs and vendor relationships, and took advantage of Demand Media’s size and

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purchasing power in procuring certain products and services, such as insurance and healthcare benefits, and technology, such as computer software licenses. As a separate, independent entity, we may be unable to obtain these products, services and technologies at prices or on terms as favorable to us as those we obtained prior to the separation.

We may incur material costs and expenses as a result of our separation from Demand Media, which could adversely affect our profitability.

As a result of our separation from Demand Media, we may incur costs and expenses greater than those we currently incur. These increased costs and expenses may arise from various factors, including financial reporting, accounting and audit services, costs associated with complying with federal securities laws (including compliance with the Sarbanes‑Oxley Act), and legal and human resources related functions. Although Demand Media will continue to provide certain of these services to us under the Transition Services Agreement, this arrangement may not capture all the benefits our business has enjoyed as a result of being integrated with Demand Media. In addition, such services are for a limited period of time, and we will be required to establish the necessary infrastructure and systems to supply these services on an ongoing basis. We cannot assure you that these costs will not be material to our business.

Certain of the contracts remaining to be transferred or assigned from Demand Media or its affiliates to us or one of our affiliates in connection with the separation require the consent of a third party to such transfer or assignment. If such consent is not obtained, we may not be entitled to the benefit of such contracts in the future. In addition, we may need to enter into new contracts for services historically provided under contracts between the service provider and Demand Media.  We may not be able to obtain such services on the same terms in the future.

In connection with the separation, certain of our contracts with service providers and other third parties have been or will be transferred or assignedby Demand Media or its affiliates to us or one of our affiliates. However, transfer or assignment of some of these contracts requires the contractual counterparty’s consent. Similarly, in some circumstances, we are a joint beneficiary of contracts, and we will need to enter into a new agreement with the third party to replicate the contract or assign the portion of the contract related to our business. It is possible that some parties may use the requirement of consent to seek more favorable contractual terms from us or seek to terminate the contract. If (i) we are unable to obtain such consents on commercially reasonable and satisfactory terms; (ii) we enter into new agreements on significantly less favorable terms; or (iii) any contract is terminated, we may be unable to obtain the benefits, assets, and contractual commitments that are intended to be allocated to us as part of the separation. The failure to timely complete the assignment or transfer of existing contracts, or the negotiation of new arrangements, with any of our key suppliers, including those that are a single source or limited source suppliers, or a termination of any of those arrangements, could negatively impact our business, financial condition, results of operations, and cash flows.

Our ability to meet our capital needs may be harmed by the loss of financial support from Demand Media.

The loss of financial support from Demand Media could harm our ability to meet our capital needs. Immediately following the spin‑off our cash and cash equivalents balance were approximately $26 million, and we expect to obtain any funds needed in excess of the amounts generated by our operating activities through the debt and equity capital markets or bank financing, and not from Demand Media. However, given the smaller relative size of our company after the spin‑off as compared to Demand Media, we may incur higher debt servicing and other costs than we would have otherwise incurred as a part of Demand Media. Further, there can be no assurances that we will be able to obtain capital market financing or credit on favorable terms, or at all, in the future. If we are unable to generate sufficient cash from operations or obtain adequate financing on commercially reasonable terms, on a timely basis or at all, our ability to invest in our business or fund our business strategy may be limited and may materially and adversely affect our ability to compete effectively in our markets.

If the distribution were to fail to qualify as a tax-free transaction for U.S. federal income tax purposes, then the distribution could result in significant tax liabilities.

In January 2014, Demand Media received a private letter ruling from the IRS (the “Private Letter Ruling”) confirming that the separation and the distribution of shares of Rightside common stock qualifies as a transaction that is tax-free for U.S. federal income tax purposes and will not result in the recognition, for U.S. federal income tax purposes

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of income, gain or loss by Rightside or its stockholders.  The Private Letter Ruling, together with the opinion of Latham & Watkins LLP, tax counsel to Demand Media (the “Tax Opinion”), rely on certain facts, assumptions, and undertakings, and certain representations from Demand Media and us, regarding the past and future conduct of both respective businesses and other matters, and the Tax Opinion will rely on the Private Letter Ruling.  Notwithstanding the Private Letter Ruling and the Tax Opinion, the IRS could determine that the distribution should be treated as a taxable transaction if it determines that any of these facts, assumptions, representations, or undertakings are not correct, or that the distribution should be taxable for other reasons, including if the IRS were to agree with the conclusions in the Tax Opinion that are not covered by the Private Letter Ruling. 

If the distribution ultimately were to be determined to be taxable, Demand Media would be subject to tax as if it had sold our common stock in a taxable sale for its fair market value, and our initial public stockholders would be subject to tax as if they had received a taxable distribution equal to the fair market value of our common stock that was distributed to them.  Under the Tax Matters Agreement, we may be required to indemnify Demand Media against all or a portion of the taxes incurred by Demand Media and us in the event the separation were to fail to qualify for tax-free treatment under the Internal Revenue Code (the “Code”).  Further, even if we are not responsible for tax liabilities of Demand Media and its subsidiaries under the Tax Matters Agreement, we nonetheless could be liable under applicable tax law for such liabilities if Demand Media were to fail to pay them.  The amounts, if we are required to pay any liabilities under the circumstances set forth in the Tax Matters Agreement or pursuant to applicable tax law, may be significant. 

For more information regarding potential U.S. federal income tax consequences of the separation, see the section entitled “The Spin-Off – Material U.S. Federal Income Tax Consequences” in our Form 10 filed with the SEC on July 14, 2014.   

We have agreed to various restrictions to preserve the tax-free treatment of the transactions, which may reduce our strategic and operating flexibility.

To preserve the tax‑free treatment of the separation, and under the Tax Matters Agreement, we may not take any action that would jeopardize the favorable tax treatment of the distribution. The restrictions under the Tax Matters Agreement may limit our ability to pursue certain strategic transactions or engage in other transactions that might increase the value of our business for the two‑year period following the separation. For example, we might determine to continue to operate certain of our business operations for the foreseeable future even if a sale or discontinuance of such business might have otherwise been advantageous. Moreover, in light of the requirements of Section 355(e) of the Code, we might determine to forgo certain transactions, including share repurchases, stock issuances, certain asset dispositions or other strategic transactions for some period of time following the distribution. In addition, our indemnity obligation under the Tax Matters Agreement might discourage, delay or prevent a change of control transaction for some period of time following the distribution. For more information, see the sections entitled “Certain Relationships and Related Party Transactions—Agreements between Demand Media and Rightside Relating to the Separation—Tax Matters Agreement” and “The Spin‑Off—Material U.S. Federal Income Tax Consequences” in our Form 10 filed with the SEC on July 14, 2014.

We are subject to continuing contingent liabilities of Demand Media following the separation.

There are several significant areas where the liabilities of Demand Media may become our obligations. For example, under the Code and the related rules and regulations, each corporation that was a member of the Demand Media combined tax reporting group during any taxable period or portion of any taxable period ending on or before the effective time of the distribution is jointly and severally liable for the U.S. federal income tax liability of the entire Demand Media combined tax reporting group for such taxable period. In connection with the separation, we entered into a Tax Matters Agreement with Demand Media that allocates the responsibility for prior period taxes of the Demand Media combined tax reporting group between our company and Demand Media. For a more detailed description, see “Certain Relationships and Related Party Transactions—Agreements between Demand Media and Rightside Relating to the Separation—Tax Matters Agreement”  in our Form 10 filed with the SEC on July 14, 2014. If Demand Media were unable to pay any prior period taxes for which it is responsible, however, we could be required to pay the entire amount of such taxes, and such amounts could be significant. Other provisions of federal, state, local, or foreign law may

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establish similar liability for other matters, including laws governing tax‑qualified pension plans, as well as other contingent liabilities.

A number of our directors and officers and entities related to them continue to own a substantial amount of Demand Media common stock and options to purchase Demand Media stock, and we have overlapping board membership and management with Demand Media, which may lead to conflicting interests.

As a result of the spin‑off, some of our board members will also serve as executive officers and/or board members of Demand Media. Neither we nor Demand Media will have any ownership interest in the other. Our executive officers and members of our board of directors have fiduciary duties to our stockholders. Likewise, any such persons who serve in similar capacities at Demand Media have fiduciary duties to that company’s stockholders. Therefore, such persons may have conflicts of interest or the appearance of conflicts of interest with respect to matters involving or affecting more than one of the companies to which they owe fiduciary duties. In addition, a number of our directors and officers and entities related to them continue to own a substantial amount of Demand Media common stock and options to purchase Demand Media stock. The direct interests of our directors and officers and related entities in common stock of Demand Media could create, or appear to create, potential conflicts of interest with respect to matters involving both Demand Media and us that could have different implications for Demand Media than they do for us.

As a result of the foregoing, there may be the potential for a conflict of interest when we or Demand Media consider acquisitions and other corporate opportunities that may be suitable for each of them. In addition, potential conflicts of interest could arise in connection with the resolution of any dispute that may arise between Demand Media and us regarding the terms of the agreements governing the internal reorganization, the distribution and the ongoing relationship between the companies, including with respect to the indemnification of certain matters. From time to time, we may enter into transactions with Demand Media and/or its subsidiaries or other affiliates. There can be no assurance that the terms of any such transactions will be as favorable to us, Demand Media, or any of their subsidiaries or affiliates as would be the case where there is no overlapping officer or director or ownership of both companies. See “Certain Relationships and Related Party Transactions—Policies and Procedures for Related Party Transactions” in our Form 10 filed with the SEC on July 14, 2014 for a discussion of certain procedures we will institute to help ameliorate any such potential conflicts that may arise.

Our overlapping directors and executive officers with Demand Media may result in the diversion of corporate opportunities to and other conflicts with Demand Media and provisions in our amended and restated certificate of incorporation may provide us no remedy in that circumstance.

Our amended and restated certificate of incorporation acknowledges that our directors and officers may also be serving as directors, officers, employees or agents of Demand Media and its subsidiaries and that we may engage in business transactions with such entities. We will renounce our rights to business opportunities offered to overlapping officers and/or directors in which we or any of our subsidiaries could have an interest or expectancy (other than business opportunities that (i) are expressly presented or offered to an overlapping officer or director in his or her capacity as a director or officer of our company, and (ii) the overlapping officer or director believes we have, or could reasonably be expected to have, the resources necessary to exploit). In addition, our amended and restated certificate of incorporation provides that none of our directors or officers who is also serving as a director, officer, employee or agent of Demand Media and its subsidiaries will be liable to us or our stockholders for breach of any fiduciary duty that would otherwise exist by reason of the fact that any such individual directs a corporate opportunity to Demand Media or any of its subsidiaries instead of us, or does not refer or communicate information regarding such corporate opportunities to us. These provisions in our amended and restated certificate of incorporation also expressly validate certain contracts, agreements, assignments and transactions (and amendments, modifications or terminations thereof) between us and Demand Media or any of its subsidiaries and, to the fullest extent permitted by law, provide that the actions of the overlapping directors or officers in connection therewith are not breaches of fiduciary duties owed to us, any of our subsidiaries or our or their respective stockholders. See “Description of Our Capital Stock—Certain Corporate Opportunities and Conflicts” in the Form 10 we filed with the SEC on July 14, 2014.

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Potential indemnification obligations to Demand Media pursuant to the Distribution Agreement could materially and adversely affect our company.

Among other things, the Distribution Agreement provides for indemnification obligations designed to make our company financially responsible for substantially all liabilities that may exist relating to our business activities, whether incurred prior to or after the spin‑off. If we are required to indemnify Demand Media under the circumstances set forth in the Distribution Agreement, we may be subject to substantial liabilities.

The spin‑off may expose us to potential liabilities arising out of state and federal fraudulent conveyance laws and legal dividend requirements.

The distribution is subject to review under various state and federal fraudulent conveyance laws. Fraudulent conveyance laws generally provide that an entity engages in a constructive fraudulent conveyance when (i) the entity transfers assets and does not receive fair consideration or reasonably equivalent value in return; and (ii) the entity: (a) is insolvent at the time of the transfer or is rendered insolvent by the transfer; (b) has unreasonably small capital with which to carry on its business; or (c) intends to incur or believes it will incur debts beyond its ability to repay its debts as they mature. An unpaid creditor or an entity acting on behalf of a creditor (including without limitation a trustee or debtor‑in‑possession in a bankruptcy by us or Demand Media or any of our respective subsidiaries) may bring an action alleging that the distribution or any of the related transactions constituted a constructive fraudulent conveyance. If a court accepts these allegations, it could impose a number of remedies, including without limitation, voiding our claims against Demand Media, requiring our stockholders to return to Demand Media some or all of the shares of our common stock issued in the distribution, or providing Demand Media with a claim for money damages against us in an amount equal to the difference between the consideration received by Demand Media and our fair market value at the time of the distribution.

The measure of insolvency for purposes of the fraudulent conveyance laws will vary depending on which jurisdiction’s law is applied. Generally, an entity would be considered insolvent if (i) the present fair saleable value of its assets is less than the amount of its liabilities (including contingent liabilities); (ii) the present fair saleable value of its assets is less than its probable liabilities on its debts as such debts become absolute and matured; (iii) it cannot pay its debts and other liabilities (including contingent liabilities and other commitments) as they mature; or (iv) it has unreasonably small capital for the business in which it is engaged. We cannot assure you what standard a court would apply to determine insolvency or that a court would determine that we, Demand Media or any of our respective subsidiaries were solvent at the time of or after giving effect to the distribution.

The distribution of our common stock is also subject to review under state corporate distribution statutes. Under the General Corporation Law of the State of Delaware (the “DGCL”), a corporation may only pay dividends to its stockholders either (i) out of its surplus (net assets minus capital) or (ii) if there is no such surplus, out of its net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year. Although Demand Media intends to make the distribution of our common stock entirely from surplus, we cannot assure you that a court will not later determine that some or all of the distribution to Demand Media stockholders was unlawful.

Risks Relating to Owning Our Common Stock

An active, liquid and orderly market for our common stock may not develop or be sustained, and the trading price of our common stock is likely to be volatile.

Prior to the separation, there has been no public market for shares of our common stock. An active trading market for our common stock may not develop or be sustained, which could depress the market price of our common stock and could affect your ability to sell your shares. The trading price of our common stock following the distribution is likely to be highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control. In addition to the factors discussed in this “Risk Factors” section and elsewhere in this report, these factors include:

· actual or anticipated fluctuations in our quarterly financial condition and operating performance;

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· the operating and stock price performance of similar companies;

· a shift in our investor base;

· introduction of new services by us or our competitors;

· success or failure of our business strategy;

· our ability to obtain financing as needed;

· changes in accounting standards, policies, guidance, interpretations, or principles;

· the overall performance of the equity markets;

· the number of shares of our common stock publicly owned and available for trading;

· threatened or actual litigation or governmental investigations;

· changes in laws or regulations affecting our business, including tax legislation;

· announcements by us or our competitors of significant acquisitions or dispositions;

· any major change in our board of directors or management;

· changes in earnings estimates by securities analysts or our ability to meet earnings guidance;

· publication of research reports about us or our industry or changes in recommendations or withdrawal of research coverage by securities analysts;

· large volumes of sales of our shares of common stock by existing stockholders;

· investor perception of us and our industry; and

· general political and economic conditions, and other external factors.

In addition, the stock market in general, and the market for Internet‑related companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies. These fluctuations may be even more pronounced in the trading market for our stock shortly following the distribution. This may limit or prevent investors from readily selling their shares of common stock and may otherwise negatively affect the liquidity of our common stock. Securities class action litigation has often been instituted against companies following periods of volatility in the overall market and in the market price of a company’s securities. This litigation, if instituted against us, could result in very substantial costs, divert our management’s attention and resources, and harm our business, financial condition and results of operation.

Your percentage of ownership in us may be diluted in the future.

As with any publicly traded company, your percentage ownership in us may be diluted in the future because of equity issuances for acquisitions, capital market transactions or otherwise, including equity awards that we expect will be granted to our directors, officers and employees.

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We may issue preferred stock with terms that could dilute the voting power or reduce the value of our common stock.

While we have no specific plan to issue preferred stock, our amended and restated certificate of incorporation authorizes us to issue, without the approval of our stockholders, one or more series of preferred stock having such designation, powers, privileges, preferences, including preferences over our common stock respecting dividends and distributions, terms of redemption and relative participation, optional, or other rights, if any, of the shares of each such series of preferred stock and any qualifications, limitations or restrictions thereof, as our board of directors may determine. The terms of one or more series of preferred stock could dilute the voting power or reduce the value of our common stock. For example, the repurchase or redemption rights or liquidation preferences we could assign to holders of preferred stock could affect the residual value of the common stock. For a more detailed description, see “Description of Our Capital Stock—Preferred Stock”in the Form 10 we filed with the SEC on July 14, 2014.

The large number of shares eligible for public sale or subject to rights requiring us to register them for public sale could depress the market price of our common stock.

The shares of our common stock that Demand Media has distributed to its stockholders in the distribution generally may be sold immediately in the public market. Demand Media stockholders could sell our common stock received in the distribution if we do not fit their investment objectives, such as minimum market capitalization requirements or specific business sector focus requirements, or, in the case of index funds, if we are not part of the index in which they invest. The market price of our common stock could decline as a result of sales of a large number of shares of our common stock in the market after the distribution, and the perception that these sales could occur may also depress the market price of our common stock. A decline in the price of shares of our common stock might impede our ability to raise capital through the issuance of additional shares of our common stock or other equity securities.

We also may issue our shares of common stock from time to time as consideration for future acquisitions and investments. If any such acquisition or investment is significant, the number of shares that we may issue may in turn be significant. In addition, we may also grant registration rights covering those shares in connection with any such acquisitions and investments.

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.

The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business. Securities and industry analysts do not currently, and may never, publish research on us. If no securities or industry analysts commence coverage of us, the trading price for our stock would likely be negatively impacted. In the event securities or industry analysts initiate coverage, if one or more of the analysts who cover us downgrade our stock or publish inaccurate or unfavorable research about our business, our stock price would likely decline. If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, demand for our stock could decrease, which might cause our stock price and trading volume to decline.

For as long as we are an “Emerging Growth Company,” we are exempt from certain reporting requirements, including those relating to accounting standards and disclosure about our executive compensation, that apply to other public companies, and we cannot be certain if the reduced reporting requirements applicable to “Emerging Growth Companies” will make our common stock less attractive to investors.

In April 2012, President Obama signed into law the JOBS Act. The JOBS Act contains provisions that, among other things, relax certain reporting requirements for “Emerging Growth Companies,” including certain requirements relating to accounting standards and compensation disclosure. We are classified as an “Emerging Growth Company,” which is defined as a company with annual gross revenue of less than $1.0 billion, that has been a public reporting company for a period of less than five years, and that does not have a public float of $700.0 million or more in securities held by non‑affiliated holders. We will remain an “Emerging Growth Company” until the earliest to occur of:

· the last day of the fiscal year during which our total annual revenue equals or exceeds $1.0 billion (subject to adjustment for inflation),

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· the last day of the fiscal year in which we become a “large accelerated filer” under the Exchange Act, or

· the date on which we have, during the previous three‑year period, issued more than $1.0 billion in non‑convertible debt.

For as long as we are an “Emerging Growth Company,” which may be up to five full fiscal years, if we elect to take advantage of applicable JOBS Act provisions, unlike other public companies, we will not be required to (i) provide an auditor’s attestation report on management’s assessment of the effectiveness of our system of internal control over financial reporting pursuant to Section 404 of the Sarbanes‑Oxley Act, (ii) comply with any new or revised financial accounting standards applicable to public companies until such standards are also applicable to private companies under Section 102(b)(1) of the JOBS Act, (iii) comply with any new requirements adopted by the Public Company Accounting Oversight Board (the “PCAOB”), such as requiring mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer, (iv) comply with any new audit rules adopted by the PCAOB after April 5, 2012 unless the SEC determines otherwise, (v) provide certain disclosure regarding executive compensation required of larger public companies or (vi) hold nonbinding advisory votes on executive compensation and stockholder approval of any golden parachute payments not previously approved. We cannot predict if investors will find our common stock less attractive if we choose to rely on these exemptions. If some investors find our common stock less attractive as a result of any choices to reduce future disclosure, there may be a less active trading market for our common stock and our stock price may be adversely affected and more volatile.

As noted above, under the JOBS Act, “Emerging Growth Companies” can delay adopting new or revised accounting standards that have different effective dates for public and private companies until such time as those standards apply to private companies. We will not take advantage of such extended transition period, and as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for public companies. Our election not to take advantage of the extended transition period is irrevocable.

As a result of becoming a public company, we are obligated to develop and maintain proper and effective internal control over financial reporting and are subject to other requirements that will be burdensome and costly. We may not timely complete our analysis of our internal control over financial reporting, or these internal controls may be determined to be ineffective, which could adversely affect investor confidence in us and, as a result, the value of our common stock.

We have historically operated our business as part of a larger public company. Following consummation of the separation, we are required to file with the SEC annual, quarterly and current reports that are specified in Section 13 of the Exchange Act. We are also required to ensure that we have the ability to prepare financial statements that are fully compliant with all SEC reporting requirements on a timely basis. In addition, we will become subject to other reporting and corporate governance requirements, including the requirements of Nasdaq, and certain provisions of the Sarbanes‑Oxley Act and the regulations promulgated thereunder, which will impose significant compliance obligations upon us. As a public company, we are required to:

· prepare and distribute periodic public reports and other stockholder communications in compliance with our obligations under the federal securities laws and the Nasdaq Listing Rules;

· create or expand the roles and duties of our board of directors and committees of the board of directors;

· institute more comprehensive financial reporting and disclosure compliance functions;

· supplement our internal accounting and auditing function, including hiring additional staff with expertise in accounting and financial reporting for a public company;

· enhance and formalize closing procedures at the end of our accounting periods;

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· enhance our internal audit function;

· enhance our investor relations function;

· establish new internal policies, including those relating to disclosure controls and procedures; and

· involve and retain to a greater degree outside counsel and accountants in the activities listed above.

These changes will require a significant commitment of additional resources, particularly after we are no longer an “Emerging Growth Company.” We may not be successful in implementing these requirements and implementing them could adversely affect our business or results of operations. In addition, if we fail to implement the requirements with respect to our internal accounting and audit functions, our ability to report our results of operations on a timely and accurate basis could be impaired.

If we fail to implement and maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud, which could harm our brand and operating results.

Effective internal controls are necessary for us to provide reliable and accurate financial reports and effectively prevent fraud. We expect to devote significant resources and time to comply with the internal control over financial reporting requirements of the Sarbanes‑Oxley Act, including costs associated with auditing and legal fees and accounting and administrative staff. In addition, Section 404(a) under the Sarbanes‑Oxley Act requires that we assess the effectiveness of our controls over financial reporting. Our future compliance with the annual internal control report requirement will depend on the effectiveness of our financial reporting and data systems and controls across our operating subsidiaries. We expect these systems and controls to become increasingly complex to the extent that our business grows. To effectively manage this growth, we will need to continue to improve our operational, financial and management controls and our reporting systems and procedures. We cannot be certain that these measures will ensure that we design, implement and maintain adequate controls over our financial processes and reporting in the future. Any failure to implement required new or improved controls, or difficulties encountered in their implementation or operation, could harm our operating results, cause us to fail to meet our financial reporting obligations, or cause us to suffer adverse regulatory consequences or violate applicable stock exchange listing rules. Inadequate internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our stock and our access to capital.

Because we are an “Emerging Growth Company” under the JOBS Act, we will not be required to comply with Section 404(b) of the Sarbanes‑Oxley Act, which would require our independent auditors to issue an opinion on their audit of our internal control over financial reporting, until the later of the year following our first annual report required to be filed with the SEC and the date we are no longer an “Emerging Growth Company.” See “For as long as we are an “Emerging Growth Company,” we are exempt from certain reporting requirements, including those relating to accounting standards and disclosure about our executive compensation, that apply to other public companies, and we cannot be certain if the reduced reporting requirements applicable to “Emerging Growth Companies” will make our common stock less attractive to investors” above. If, once we are no longer an “Emerging Growth Company,” our independent registered public accounting firm cannot provide an unqualified attestation report on the effectiveness of our internal control over financial reporting, investor confidence and, in turn, the market price of our common stock, could decline.

Certain provisions in our charter documents and Delaware law could discourage takeover attempts and lead to management entrenchment and, therefore, may depress the trading price of our common stock.

Our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that could have the effect of delaying or preventing changes in control or changes in our management without the consent of our board of directors, including, among other things:

· a classified board of directors with three‑year staggered terms, which may delay the ability of stockholders to change the membership of a majority of our board of directors;

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· no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;

· the ability of our board of directors to determine to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;

· the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors;

· limitations on the removal of directors;

· a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders;

· the requirement that a special meeting of stockholders may be called only by the chairman of our board of directors, the Chief Executive Officer, the president (in absence of a Chief Executive Officer) or our board of directors, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors;

· the requirement for the affirmative vote of holders of at least 662/₃% of the voting power of all of the then outstanding shares of the voting stock, voting together as a single class, to amend the provisions of our amended and restated certificate of incorporation relating to the issuance of preferred stock and management of our business or our amended and restated bylaws, which may inhibit the ability of an acquiror from amending our certificate of incorporation or bylaws to facilitate a hostile acquisition;

· the ability of our board of directors, by majority vote, to amend the bylaws, which may allow our board of directors to take additional actions to prevent a hostile acquisition and inhibit the ability of an acquiror from amending the bylaws to facilitate a hostile acquisition; and

· advance notice procedures that stockholders must comply with in order to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquiror from conducting a solicitation of proxies to elect the acquiror’s own slate of directors or otherwise attempting to obtain control of us.

We believe these provisions protect our stockholders from coercive or harmful takeover tactics by requiring potential acquirers to negotiate with our board of directors and by providing our board of directors with adequate time to assess any acquisition proposal, and are not intended to make our company immune from takeovers. These provisions in our amended and restated certificate of incorporation and amended and restated bylaws may discourage, delay or prevent a transaction involving a change in control of the company that is in the best interest of our stockholders. Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our common stock if they are viewed as discouraging future takeover attempts.

We are also subject to certain anti‑takeover provisions under Delaware law. Under Delaware law, a corporation may not, in general, engage in a business combination with any holder of 15% or more of its capital stock unless the holder has held the stock for three years or, among other things, our board of directors has approved the transaction.

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We do not anticipate paying cash dividends, and accordingly, stockholders must rely on stock appreciation for any return on their investment.

We do not anticipate paying cash dividends in the future. As a result, only appreciation of the price of our common stock, which may never occur, will provide a return to stockholders. Investors seeking cash dividends should not invest in our common stock.

Our amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain litigation that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us.

Our amended and restated certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf; (ii) any action asserting a claim of breach of fiduciary duty owed by any of our directors, officers or other employees or our stockholders; (iii) any action asserting a claim arising pursuant to any provision of the DGCL or our amended and restated certificate of incorporation or amended and restated bylaws; or (iv) any action asserting a claim governed by the internal affairs doctrine. Our certificate of incorporation further provides that any person or entity purchasing or acquiring any interest in shares of our capital stock shall be deemed to have notice of and to have consented to the provisions described above. This forum selection provision in our amended and restated certificate of incorporation may limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us.

Item 6.  Exhibits and Financial Statement Schedules

(a) Exhibits

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Exhibit Number	Description
2.1	Separation and Distribution Agreement between Demand Media, Inc. and Rightside Group, Ltd., dated August 1, 2014 (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on August 4, 2014 (File No. 001-36262)).
3.1	Amended and Restated Certificate of Incorporation of the Company, dated July 31, 2014 (incorporated by reference to Exhibit 4.01 to the Company’s Registration Statement on Form S-8 filed on July 31, 2014 (File No. 001-36262)).
3.2	Amended and Restated Bylaws of the Company, dated July 31, 2014 (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed on August 4, 2014 (File No. 001-36262)).
4.1	Form of Warrant (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on August 7, 2014 (File No. 001-36262)).
4.2	Registration Rights Agreement between Rightside Group, Ltd. and the investors listed therein, dated as of August 6, 2014 (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on August 7, 2014 (File No. 001-36262)).
10.1	Transition Services Agreement between Rightside Group, Ltd., and Demand Media, Inc. dated August 1, 2014 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 4, 2014 (File No. 001-36262)).
10.2	Employee Matters Agreement between Demand Media, Inc. and Rightside Group, Ltd., dated August 1, 2014 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on August 4, 2014 (File No. 001-36262)).
10.3	Tax Matters Agreement between Demand Media, Inc. and Rightside Group, Ltd. dated August 1, 2014 (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on August 4, 2014 (File No. 001-36262)).
10.4	Intellectual Property Assignment and License Agreement between Demand Media, Inc. and Rightside Operating Co., dated July 30, 2014 (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on August 4, 2014 (File No. 001-36262)).
10.5	Credit Agreement between Rightside Group, Ltd., certain of its subsidiaries and Silicon Valley Bank, dated August 1, 2014 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 7, 2014 (File No. 001-36262)).
10.6	Amendment No. 1 to Credit Agreement between Rightside Group, Ltd., certain of its subsidiaries and Silicon Valley Bank, dated August 12, 2014 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 15, 2014 (File No. 001-36262)).
10.7	Guarantee and Collateral Agreement (U.S. Entities) between Rightside Group, Ltd., the other grantors listed therein and Silicon Valley Bank, dated August 1, 2014 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on August 7, 2014 (File No. 001-36262)).
10.8†	Unconditional Guarantee (Non-U.S. Entities) between certain subsidiaries of Rightside Group, Ltd. (the Guarantors as defined therein) and Silicon Valley Bank, dated August 1, 2014.

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Exhibit Number	Description
10.9†	Security Deed (Debenture) between DMIH Limited and Silicon Valley Bank, dated August 1, 2014.
10.10†	Security Deed (Debenture) between Rightside Domains Europe Limited and Silicon Valley Bank, dated August 1, 2014.
10.11†	Charge Over Shares in United TLD Holdco Ltd. between DMIH Limited and Silicon Valley Bank, dated August 1, 2014.
10.12	Credit Agreement between Rightside Group, Ltd., certain of its subsidiaries and Obsidian Agency Services, Inc., dated August 6, 2014 (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on August 7, 2014 (File No. 001-36262)).
10.13	Guarantee and Collateral Agreement (U.S. Entities) between Rightside Group, Ltd., the other grantors listed therein and Obsidian Agency Services, Inc., dated August 6, 2014 (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on August 7, 2014 (File No. 001-36262)).
10.14†	Unconditional Guarantee (Non-U.S. Entities) between certain subsidiaries of Rightside Group, Ltd. (the Guarantors as defined therein) and Obsidian Agency Services, Inc., dated August 6, 2014.
10.15†	Security Deed (Debenture) between DMIH Limited and Obsidian Agency Services, Inc., dated August 6, 2014.
10.16†	Security Deed (Debenture) between Rightside Domains Europe Limited and Obsidian Agency Services, Inc., dated August 6, 2014.
10.17†	Second Priority Charge Over Shares in United TLD Holdco Ltd. between DMIH Limited and Obsidian Agency Services, Inc., dated August 6, 2014.
10.18†#	Google Services Agreement between Rightside Group, Ltd. and Google Inc., effective as of August 1, 2014.
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a).
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a).
32.1*	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350.
32.2*	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

†Filed herewith.

#Certain provisions of this exhibit have been omitted pursuant to a request for confidential treatment.

*The Certifications attached as Exhibits 32.1 and 32.2 that accompany this Quarterly Report on Form 10-Q are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of Rightside Group, Ltd. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Form 10-Q, irrespective of any general incorporation language contained in such filing.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	RIGHTSIDE GROUP, LTD.
Date:  November 14, 2014	By	/s/ Taryn J. Naidu
		Taryn J. Naidu
		President and Chief Executive Officer
		(Principal Executive Officer)
Date:  November 14, 2014	By:	/s/ Tracy Knox
		Tracy Knox
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

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EXHIBIT INDEX

Exhibit Number	Description
2.1	Separation and Distribution Agreement between Demand Media, Inc. and Rightside Group, Ltd., dated August 1, 2014 (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on August 4, 2014 (File No. 001-36262)).
3.1	Amended and Restated Certificate of Incorporation of the Company, dated July 31, 2014 (incorporated by reference to Exhibit 4.01 to the Company’s Registration Statement on Form S-8 filed on July 31, 2014 (File No. 001-36262)).
3.2	Amended and Restated Bylaws of the Company, dated July 31, 2014 (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed on August 4, 2014 (File No. 001-36262)).
4.1	Form of Warrant (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on August 7, 2014 (File No. 001-36262)).
4.2	Registration Rights Agreement between Rightside Group, Ltd. and the investors listed therein, dated as of August 6, 2014 (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on August 7, 2014 (File No. 001-36262)).
10.1	Transition Services Agreement between Rightside Group, Ltd., and Demand Media, Inc. dated August 1, 2014 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 4, 2014 (File No. 001-36262)).
10.2	Employee Matters Agreement between Demand Media, Inc. and Rightside Group, Ltd., dated August 1, 2014 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on August 4, 2014 (File No. 001-36262)).
10.3	Tax Matters Agreement between Demand Media, Inc. and Rightside Group, Ltd. dated August 1, 2014 (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on August 4, 2014 (File No. 001-36262)).
10.4	Intellectual Property Assignment and License Agreement between Demand Media, Inc. and Rightside Operating Co., dated July 30, 2014 (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on August 4, 2014 (File No. 001-36262)).
10.5	Credit Agreement between Rightside Group, Ltd., certain of its subsidiaries and Silicon Valley Bank, dated August 1, 2014 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 7, 2014 (File No. 001-36262)).
10.6	Amendment No. 1 to Credit Agreement between Rightside Group, Ltd., certain of its subsidiaries and Silicon Valley Bank, dated August 12, 2014 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 15, 2014 (File No. 001-36262)).
10.7	Guarantee and Collateral Agreement (U.S. Entities) between Rightside Group, Ltd., the other grantors listed therein and Silicon Valley Bank, dated August 1, 2014 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on August 7, 2014 (File No. 001-36262)).
10.8†	Unconditional Guarantee (Non-U.S. Entities) between certain subsidiaries of Rightside Group, Ltd. (the Guarantors as defined therein) and Silicon Valley Bank, dated August 1, 2014.
10.9†	Security Deed (Debenture) between DMIH Limited and Silicon Valley Bank, dated August 1, 2014.
10.10†	Security Deed (Debenture) between Rightside Domains Europe Limited and Silicon Valley Bank, dated August 1, 2014.

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Exhibit Number	Description
10.11†	Charge Over Shares in United TLD Holdco Ltd. between DMIH Limited and Silicon Valley Bank, dated August 1, 2014.
10.12	Credit Agreement between Rightside Group, Ltd., certain of its subsidiaries and Obsidian Agency Services, Inc., dated August 6, 2014 (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on August 7, 2014 (File No. 001-36262)).
10.13	Guarantee and Collateral Agreement (U.S. Entities) between Rightside Group, Ltd., the other grantors listed therein and Obsidian Agency Services, Inc., dated August 6, 2014 (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on August 7, 2014 (File No. 001-36262)).
10.14†	Unconditional Guarantee (Non-U.S. Entities) between certain subsidiaries of Rightside Group, Ltd. (the Guarantors as defined therein) and Obsidian Agency Services, Inc., dated August 6, 2014.
10.15†	Security Deed (Debenture) between DMIH Limited and Obsidian Agency Services, Inc., dated August 6, 2014.
10.16†	Security Deed (Debenture) between Rightside Domains Europe Limited and Obsidian Agency Services, Inc., dated August 6, 2014.
10.17†	Second Priority Charge Over Shares in United TLD Holdco Ltd. between DMIH Limited and Obsidian Agency Services, Inc., dated August 6, 2014.
10.18†#	Google Services Agreement between Rightside Group, Ltd. and Google Inc., effective as of August 1, 2014.
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a).
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a).
32.1*	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350.
32.2*	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

†Filed herewith.

#Certain provisions of this exhibit have been omitted pursuant to a request for confidential treatment.

*The Certifications attached as Exhibits 32.1 and 32.2 that accompany this Quarterly Report on Form 10-Q are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of Rightside Group, Ltd. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Form 10-Q, irrespective of any general incorporation language contained in such filing.

-70-

EX-10.10

Exhibit 10.10

RIGHTSIDE DOMAINS EUROPE LIMITED

(as Grantor)

SILICON VALLEY BANK

(asSecurity Trustee for the Secured Parties)

SECURITY DEED

(DEBENTURE)

William Fry

Solicitors

Fitzwilton House

Wilton Place

Dublin 2

www.williamfry.ie

© William Fry 2014

020325.0010.CAH

CONTENTS

SECTION 1.0 – INTERPRETATION		4
1.1	Credit Agreement	4
1.2	Additional Definitions	4
1.3	Interpretation	4
1.4	Certificates	9
SECTION 2.0 - NATURE OF SECURITY AND COVENANT TO PAY		10
2.1	Nature of Security	10
2.2	Covenant to Pay	10
SECTION 3.0 - FIXED CHARGES, ASSIGNMENTS AND FLOATING CHARGE		10
3.1	Fixed Charges	10
3.2	Assignments	12
3.3	Non-assignable	13
3.4	Floating Charge	13
3.5	Crystallisation of Floating Charge	13
3.6	Excluded Assets	14
3.7	Negative Pledge	14
3.8	After Acquired Property	14
3.9	Validity of Charges	15
3.10	Continuing Obligations	15
3.11	Proviso for Redemption/Release/Reassignment	15
SECTION 4.0 - ENFORCEABILITY OF SECURITY		15
4.1	Events of Default	15
SECTION 5.0 - RIGHTS AND POWERS OF THE LENDER		16
5.1	Entry into Possession	16
5.2	Further Right of Possession	16
5.3	Power of Sale	17
5.4	Power of Leasing and Accepting Surrenders	17
5.5	Power to Conduct Business	17
5.6	Due Date for Statutory Purposes	18
5.7	Non-applicability of Sections 92 and 94 of the Act	18
5.8	Position of Third Parties	18
5.9	Receipt of Lender Good Discharge	18
5.10	Application of Monies	18
SECTION 6.0 - APPOINTMENT OF RECEIVER		18
6.1	Power of Appointment	18
6.2	Powers of Receiver to Borrow	21
6.3	Application of Monies by Receiver	21
6.4	Liability of the Lender and Receiver	21
6.5	Receiver Agent of the Grantor	21
6.6	Section 108 of the Act	2
SECTION 7.0 - CONTINUING SECURITY, ETC.		22
7.1	Continuing Security	22
7.2	Opening of New Accounts	22
7.3	Reinstatement	22
7.4	Waiver of Defences	23
7.5	Additional Security	24
SECTION 8.0 - SHARES		24
8.1	Covenants relating to Shares	24
8.2	Deposit of Title Documents	24
8.3	Changes to Rights	24
8.4	Calls	24
8.5	Other Obligations in respect of Shares	24
8.6	Voting and Dividend Rights	25
SECTION 9.0 - SECURITY ACCOUNTS		25
9.1	Covenants relating to Security Accounts	25
9.2	Security Accounts	25
9.3	Withdrawals	25
9.4	Notices of Charge	25
SECTION 10.0 - BOOK DEBT RECEIVABLES ACCOUNT		26
10.1	Covenants relating to Book Debt Receivables Account	26
10.2	Book Debt Receivables Account	26
10.3	Receipts	26
10.4	Withdrawals	26
10.5	Notices of Charge	26
10.6	Legal Assignment	27
SECTION 11.0 - RELEVANT CONTRACTS/INSURANCES		27
11.1	Covenants relating to Relevant Contracts and Insurances	27

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11.2	Preservation	27
11.3	Further Undertakings	27
11.4	Notices of Assignment	27
SECTION 12.0 - INTELLECTUAL PROPERTY		28
12.1	Covenants relating to Intellectual Property	28
12.2	Intellectual Property	28
SECTION 13.0 - GENERAL PROVISIONS		28
13.1	Assignment	28
13.2	Consolidation	28
13.3	Protection of Purchaser	28
13.4	No Waivers, Remedies Cumulative	29
13.5	Set-off	29
13.6	Preferential Claims	29
13.7	Power of Attorney	29
13.8	Waiver	29
13.9	Enforcement of Other Rights	30
13.10	Appropriations	30
13.11	Authority of the Lender	30
13.12	Duty; Obligations and Liabilities	30
13.13	Obligations and Liabilities with respect to Security Assets	31
13.14	Additional Powers	31
13.15	Notices	33
13.16	Non-Competition	34
13.17	Counterparts	34
13.18	Governing Law and Jurisdiction	34
SCHEDULE 1		36
	SCHEDULED PROPERTY	36
SCHEDULE 2		37
PART 1		37
	THE FIXTURES AND FITTINGS	37
PART 2		37
	THE RELEVANT CONTRACTS	37
PART 3		37
	THE LICENCES	37
PART 4		37
	THE SHARES	37
PART 5		37
	THE INTELLECTUAL PROPERTY	37
PART 6		37
	THE SECURITY ACCOUNTS	37
PART 7		37
	THE BOOK DEBT RECEIVABLE ACCOUNT	37
SCHEDULE 3		38
PART 1		38
	FORM OF LETTERS FOR SECURITY ACCOUNT	38
PART A		38
	NOTICE TO ACCOUNT BANK	38
PART B		40
	ACKNOWLEDGEMENT OF SECURITY ACCOUNT BANK	40
PART 2		41
	FORMS OF LETTER FOR CONTRACTS	41
PART A		41
	NOTICE TO COUNTERPARTY	41
PART B		42
	ACKNOWLEDGEMENT OF COUNTERPARTY	42
PART 3		43
PART A		43
	NOTICE OF ASSIGNMENT OF INSURANCES	43
PART B		45
	LETTER OF UNDERTAKING	45
PART 4		47
	FORM OF NOTICE TO AND ACKNOWLEDGEMENT FROM BANK OPERATING BOOK DEBT RECEIVABLES ACCOUNT	47

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THIS DEED is made onAugust 1, 2014

BETWEEN:

(1)RIGHTSIDE DOMAINS EUROPE LIMITED, a company incorporated in Ireland with registered number 499862 and having its registered office at Arthur Cox Building, Earlsfort Terrace, Dublin 2 (the “Grantor”); and

(2)SILICON VALLEY BANK, a Californian banking corporation having its principal place of business at 15260 Ventura Blvd, Suite 1800, Sherman Oaks, CA 91403, USA (as security trustee on behalf of each of the Secured Parties) (the “Lender”).

RECITALS

A.The Grantor has entered into the Credit Agreement with, amongst others, the Lender.

B.It is a condition of the Credit Agreement that the Grantor enter into this Deed in favour of the Lender as security trustee on behalf of the Secured Parties.

C.The Grantor and the Lender intend this document to have effect as a Deed.

D.The directors of the Grantor are satisfied that it is in the best interests of and for the corporate benefit of the Grantor to enter into this Deed.

THIS DEED WITNESSES as follows:

SECTION 1.0 - INTERPRETATION

1.1Credit Agreement

Capitalised terms used in this Deed shall have the same meaning in this Deed as in the Credit Agreement unless otherwise provided in this Deed.

1.2Additional Definitions

In this Deed (including the Recitals) the following expressions shall, unless the context otherwise requires, have the following meanings, namely:

1.2.1"Act", the Land and Conveyancing Law Reform Act 2009;

1.2.2"Account Bank",  such bank as shall be approved by the Lender;

1.2.3"Assigned Property", all assets and property assigned by this Deed and such expression shall include any part or parts of the Assigned Property;

1.2.4“Business”, the business associated with managing, marketing and operating registries with respect to any gTLDs delegated by ICANN, which are operated in accordance with any registry agreement;

1.2.5“Business Intellectual Property Rights”, Intellectual Property Rights owned, used or held exclusively or predominantly in, or in connection with, the Business;

1.2.6"Book Debt Receivables", all present and future book debts and other debts, rentals, sales proceeds, royalties, fees, revenues, value added tax and monetary claims and all other amounts at any time recoverable or receivable by, or due or owing to, the Grantor

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(whether actual or contingent and whether arising under contract or in any other manner whatsoever) together with:

(a)the benefit of all rights, guarantees, Lienand remedies relating to any of the foregoing (including without limitation, claims for damages and other remedies for non-payment of the same, all entitlements to interest, negotiable and non-negotiable instruments, indemnities, reservations of property rights, rights of tracing and unpaid vendor's liens and similar associated rights);

(b)all things in action which may give rise to a debt, revenue or claim and all other rights and remedies of whatever nature in respect of the same; and

(c)all proceeds of any of the foregoing;

1.2.7"Book Debt Receivables Account", the bank account(s) in the name of the Grantor as more particularly listed in Part 7 of Schedule 2 (Book Debts) and with the banks and bearing the account numbers set out therein, or any account or accounts replacing the same from time to time (in whatever currency) and the debt represented thereby;

1.2.8"Charged Property", all property and assets charged by this Deed, the Floating Charge Property and the Scheduled Property and such expression shall include any part or parts of the Charged Property;

1.2.9"Companies Acts",  the Companies Acts 1963 to 2013 and Parts 2 and 3 of the Investment Funds, Companies and Miscellaneous Provisions Act 2006, the Companies (Amendment) Act 2009 and the Companies (Miscellaneous Provisions) Act 2009, including all Acts of the Oireachtas and statutory instruments which are to be read as one with, or construed or read together as one with, such Acts and Parts 2 and 3 of the Investment Funds, Companies and Miscellaneous Provisions Act 2006, and every statutory modification or re-enactment thereof for the time being in force (or, where the context so admits or requires, any one or more of such Acts;

1.2.10"Credit Agreement",  the credit agreement dated on or about the date of this Deed between (1) Rightside Group, Limited, Rightside Operating Co and eNom, Inc. (as U.S. Borrowers), (2) DMIH Limited, United TLD HoldCo Ltd and Rightside Domains Europe Limited (as Non-U.S. Borrowers) and (3) the Lender;

1.2.11"Fixtures and Fittings", all present and future, fixed and moveable fixtures and fittings (including trade fixtures and fittings) and fixed plant, machinery, equipment, implements, motor vehicles and utensils from time to time on any freehold or leasehold property charged by or pursuant to this Deed or otherwise thereon or owned by the Grantor from time to time, including, but not limited to the fixtures, fittings, plant, machinery, equipment, implements, motor vehicles and utensils set out in Part 1 of Schedule 2  (Fixtures and Fittings);

1.2.12"Floating Charge Property", the property of the Grantor charged by way of floating charge pursuant to Clause 3.4 of this Deed;

1.2.13"Group", Rightside Group, Limited, its holding company and its subsidiaries (if any) and any subsidiary or subsidiaries of its holding company (if any) from time to time;

1.2.14“ICANN”, means the Internet Corporation for Assigned Names and Numbers;

1.2.15"Insurances", contracts and policies of insurance (including, for the avoidance of doubt, all cover notes), including but not limited to the contracts and policies, existing as at the

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date hereof and listed in Part 8 of Schedule 2  (Insurances) and such other contracts and policies which are taken out after the date of this Deed by or on behalf of the Grantor or (to the extent of such interest) in which the Grantor has an interest (and including, in each case, all key man policies) and all claims, proceeds and returns of premiums of each such contract and policy;

1.2.16"Intellectual Property", all copyrights, patents, trade marks, utility models, publication rights, registered designs, (including applications and rights to apply therefor and all renewals, modifications, extensions and derivations thereof), inventions, rights, service marks, rights in trade dress or get-up, trade and business names, domain names, domain name portfolios and top-level domain names, including domain name suffixes, also known as generic Top Level Domains, approved by ICANN, all Business Intellectual Property Rights,  confidential information and know-how, rights in computer software, database rights, topography rights,trade secrets, goodwill, Software and all other intellectual property rights of a similar nature in any part of the world and allfees, royalties and other rights and benefitsof every kind deriving from any of the above and which now or at any time hereafter belong to the Grantor including, but not limited to, those listed in Part 5 of Schedule 2  (Intellectual Property);

1.2.17"Intercompany Loans", all Indebtedness in respect of which one member of the Group is the creditor of another member of the Group;

1.2.18“Intercreditor Agreement”, a subordination and intercreditor agreement dated on or about the date hereof between (1) Obsidian Agency Services, Inc (as administrative agent for the Fund Lenders) (as defined therein), (2) Silicon Valley Bankand (3) Rightside Group Limited.

1.2.19"Licences", all licences now or from time to time hereafter held by or on behalfof the Grantor and all licences pertaining to the Scheduled Property, including but not limited to the licences specified in Part 3 of Schedule 2  (Licences), as the same may be amended, varied, extended, renewed or supplemented from time to time, including the benefit of any authorisation (statutory or otherwise) held in connection with the use of any of the Security Assets and the right to recover and receive compensation which may be payable to it in respect of any such authorisation and/or licence;

1.2.20"Receiver", any one or more receivers and/or manager appointed by the Lender in respect of the Grantor over all or any part of the Security Assets;

1.2.21"Related Rights", in relation to any Shares:

(a)all dividends, distributions, interest and other income paid or payable after the date hereof on all or any of the Shares;

(b)all stocks, shares, securities (and the dividends and interest thereon), rights, money or property accruing or offered at any time by way of redemption, bonus, preference, option rights or otherwise to or in respect of any of the Shares or in substitution or exchange for any of the Shares;

(c)all rights relating to any of the Shares which are deposited with or registered in the name of any depositary, custodian, nominee, clearing house or system, investment manager, chargee or other similar person or their nominee (including rights against any such person); and

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(d)all other rights attaching or relating to any of the Shares and all cash or other securities or investments in the future deriving from any of the Shares or such rights;

1.2.22"Relevant Contracts", each contract, agreement and instrument assigned or purported to be assigned pursuant to Clause 3.2.3(a) (as the same may be amended, restated, substituted, supplemented or otherwise modified or replaced), including, but not limited to those or contracts,agreements and instruments more particular details of which are set out in Part 2 of Schedule 2  (Relevant Contracts);

1.2.23"Rental Income", all rents, fees and other amounts payable or paid to or for the benefit of the Grantor pursuant to, or in contemplation of, any occupational lease;

1.2.24"Scheduled Property", all premises intended to be mortgaged, charged or assigned by this Deed listed at Schedule 1 hereto and such expressions shall include any part or parts of the Scheduled Property and any rights and appurtenances appertaining thereto;

1.2.25"Secured Obligations", all Obligations owing or incurred by the Non-U.S. Borrowers to the Secured Parties under the Loan Documents whether present or future, actual or contingent (and whether incurred solely or jointly, or jointly and severally, and whether as principal or surety or in some other capacity);

1.2.26"Security Accounts", the bank accounts in the name of the Grantor as more particularly listed in Part 6 of Schedule 2  (Security Accounts) and with the banks and bearing the account numbers set out therein, and any account or accounts replacing the same from time to time and the debt represented thereby;

1.2.27"Security Assets", all assets, undertakings, rights and property of the Grantor (both present and future), the subject of any security created pursuant to this Deed and includes for the avoidance of doubt, the Grantor's rights and interest in the Assigned Property, the Floating Charge Property and the Charged Property;

1.2.28"Security Period", the period beginning on the date of this Deed and ending on the date on which the Lender irrevocably confirms in writing that all the Secured Obligations have been unconditionally and irrevocably paid and discharged in full;

1.2.29"Shares", all shares specified in Part 4 of Schedule 2  (Shares) under the heading "Shares" and all other shares, stocks, debentures, bonds, warrants, coupons or other securities and investments and all other interests (including, but not limited to, loan capital), in each case together with all Related Rights, now or in the future owned from time to time by, or on behalf of the Grantor, in whatever form in every company, corporation, firm, entity or consortium wheresoever situate;

1.2.30"Software":

(a)all computer programs, including source code and object code versions;

(b)all data, databases and compilations of data, whether machine readable or otherwise; and

(c)all documentation, training materials and configurations related to any of the foregoing.

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1.3Interpretation

1.3.1Clause 1.3 of the Credit Agreement shall apply to this Deed unless otherwise provided in this Deed.

1.3.2In addition to Clause 1.3.1:

(a)an “amendment”, includes a supplement, amendment, novation, restatement or re-enactment and “amended” is to be construed accordingly;

(b)“assets”, includes present and future properties, revenues and rights of every description;

(c)an “authorisation”, includes an authorisation, consent, approval, resolution, licence, exemption, filing, registration or notarisation;

(d)“company”, includes a corporation or a body corporate;

(e)“dispose”, means to sell, transfer, grant, lease, lend, grant options over or otherwise dispose of and “disposal” is to be construed accordingly;

(f)"examiner", means an examiner appointed under the provisions of the Companies Acts 1963-2013;

(g)“Grantor”, means the Grantor, its successors and permitted assigns;

(h)a provision or matter “including” or which “includes” shall be construed without limitation to any events, circumstances, conditions, acts or matters listed or specified after those words;

(i)the “Lender”and “Secured Party”  shall mean the Lender and each Secured Party respectively, its and their successors, assigns, participants and novatees and this Deed shall be enforceable notwithstanding any change in the constitution of the Lender or any Secured Party or the absorption of the Lender or any Secured Party in or amalgamation with any other person or the acquisition of all or part of the undertaking of the Lenderor a Secured Party by any other person;

(j)a  “Loan Document”or any other document, agreement or instrument is a reference to that Loan Documentor other document, agreement or instrument as amended, restated, assigned, novated, varied, supplemented or replaced from time to time;

(k)a  “person”, includes any individual, company, government, state, agency, organisation, association, body, department, trust, partnership (whether or not having separate legal personality) or any other entity of any description;

(l)a  “regulation”, includes any regulation, rule, official directive, request or guideline (whether or not having the force of law but, if not having the force of law, being of a type with which any person to which it applies is accustomed to comply) of any governmental, inter-governmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation;

8

(m)“subsidiary” and “holding company”, means a subsidiary or a holding company as defined by Section 155 Companies Act, 1963 and “subsidiaries” and “holding companies” and cognate words shall be construed accordingly;

(n)the “winding up”, “dissolution” or “examinership” of a company shall be construed so as to include any equivalent or analogous proceedings under the law of the jurisdiction in which a company carries on business including, but not limited to, the seeking of liquidation, winding up, reorganisation, dissolution, examinership, administration, arrangements, adjustment, protection or relief of debtors.

(o)a provision of law is a reference to that provision as extended, applied, amended or re-enacted and includes any subordinate legislation;

(p)a Clause, a Subclause or a Schedule is a reference to a clause or subclause of, or a schedule to, this Deed; and

(q)words denoting the neuter shall include the masculine and feminine and vice versa.

1.3.3Unless the contrary intention appears, the index to and the headings in this Deed do not affect its interpretation.

1.3.4If the Lender considers that an amount paid by any Non-U.S. Borrower to the Lender under any Loan Agreement is capable of being avoided or otherwise set aside on the liquidation or examinership of the Grantor or otherwise, then such amount shall not be considered to have been irrevocably paid for the purposes hereof.

1.3.5Notwithstanding anything to the contrary in this Deed, the obligations, liabilities and undertakings under this Deed shall be deemed not to be undertaken or incurred to the extent that the same would:

(a)constitute unlawful financial assistance prohibited by Section 60 of the Companies Act 1963 (or any analogous provision of any other applicable law); or

(b)constitute a breach of Section 31 of the Companies Act 1990 (or any analogous provision of any other applicable law).

1.4Certificates

Any certificate or determination of the Lender as to any amounts owing under this Deed will be conclusive and binding on the Grantor, save in the case of manifest error.

9

SECTION 2.0 - NATURE OF SECURITY AND COVENANT TO PAY

2.1Nature of Security

2.1.1All the security created under this Deed:

(a)is created in favour of the Lenderas security trusteeon behalf of the Secured Parties;

(b)is created over all of the present and future assets of the Grantor save for the Excluded Assets; and

(c)is security for the payment of all the Secured Obligations.

2.1.2If the Grantor is prohibited from creating security over any of its assets (including for the avoidance of doubt, its rights under any document) without obtaining the consent of a third party:

(a)the Grantor must notify the Lender promptly upon it becoming aware of the same; and

(b)the fixed charge or assignment created by this Deed shall not take effect as regards the relevant asset until such consent is obtained, at which time that asset shall immediately become subject to such charge or assignment;

(c)if applicable, the security created by this Deed will secure all amounts which the Grantor may receive, or has received, under that document but exclude the document itself including, but not limited to, all damages, compensation, remuneration, profit, proceeds, rent or income derived therefrom; and

(d)unless the Lender otherwise requires, the Grantor must use its best endeavours to promptly obtain the consent of such third party to that asset being secured under this Deed.

2.2Covenant to Pay

The Grantor hereby unconditionally and irrevocably covenants with the Lenderas security trustee for the Secured Parties that it will pay, discharge or perform the Secured Obligations on the due date therefor.  Any amount not paid hereunder when due shall bear interest (after as well as before judgment and payable on demand) at the Default Rate from time to time (compounding on a monthly basis) from the due date until the date such amount is unconditionally and irrevocably paid and discharged in full.

SECTION 3.0 - FIXED CHARGES, ASSIGNMENTS AND FLOATING CHARGE

3.1Fixed Charges

Subject to Clauses 3.6 and 3.11, the Grantor, as legal and beneficial owner, as continuing security for the payment, performance and discharge of all of the Secured Obligations hereby charges in favour of the Lender as security trustee on behalf of the Secured Parties, by way of first fixed charge, all its present and future rights, title, interest and benefit in and to:

10

3.1.1all its estate, right, title and interest in any land, premises or buildings (including the Scheduled Property) now belonging to the Grantor (whether or not the legal title is vested in the Grantor or registered in the name of the Grantor) and all future estate, right, title and interest of the Grantor in such land, premises or buildings and in any other immovable property (in each case whether freehold or leasehold and whether or not registered) vested in or held by or on behalf of the Grantor from time to time and the proceeds of sale thereof together in all cases (to the extent the same are not already subject to an effective fixed security hereunder) all fixtures and fittings (including trade fixtures) and all fixed plant and machinery from time to time in or on such land, premises or buildings with the payment, performance and discharge of the Secured Obligations, and hereby assents to the registration of such charges as a burden on such freehold, leasehold and other immovable property (as applicable);

3.1.2the Licences;

3.1.3the Shares and all Related Rights;

3.1.4the Fixtures and Fittings;

3.1.5all of its rights in respect of any amount standing to the credit of any account (including without prejudice to the generality of the foregoing, the Security Accounts and the Book Debt Receivables Account) it has with any person and the debt represented by it;

3.1.6all Book Debt Receivables, all other moneys due and owing to the Grantor and the benefit of all rights, securities or guarantees of any nature enjoyed or held by it in relation to each of the same;

3.1.7all its Intellectual Property,provided that to the extent that a fixed charge is not created over any of the Intellectual Property by this Clause 3.1.7, the charge thereover purported to be effected by this clause shall operate as an absolute assignment of any and all damages, compensation, remuneration, profit, rent, royalty or income which the Grantor may now or at any time hereafter derive therefrom or be awarded or entitled to in any respect thereof;

3.1.8all of its beneficial interest, claim or entitlement in and to any pension fund and in and to any asset of any pension fund;

3.1.9all of its goodwill;

3.1.10all of the uncalled capital of the Grantor and all rights and claims to which the Grantor is now or may hereafter become entitled as a result of any calls made in relation thereto;

3.1.11all rights and claims to which the Grantor is now or may hereafter become entitled in relation to or in connection with the Security Assets, including those against any manufacturer, supplier, installer, builder, contractor, professional advisor, lessee or licensee and any guarantor or surety for the obligations of any such person and, to the extent that any of the Security Assets are now or at any time hereafter hired, leased or rented to any other person, the rights under the hiring, leasing or rental contract or agreement and any guarantee, indemnity or security for the performance of the obligation of such person and any other rights and benefits relating thereto; and

3.1.12all rights and benefits in respect of the Insurances and all claims and returns of premiums in respect thereof to the extent that they are not effectively assigned by Clause 3.3 below.

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3.2Assignments

Subject to Clause 3.6and Clause 3.11,the Grantor, as legal and beneficial owner as continuing security for the payment, performance and discharge of all of the Secured Obligations hereby assigns and agrees to assign absolutely to the Lenderas security trusteeon behalf of the Secured Parties by way of first fixed security, all its present and future right, title, interest and benefit in and to:

3.2.1(insofar as the same are capable of assignment) the benefit of:

(a)all rights of the Grantor to be paid or receive compensation under any statute by reason of any compulsory acquisition, requisition or other exercise of compulsory power in relation to the Scheduled Property or any part thereof or any refusal, withdrawal or modification of planning permission or approval relative thereto or any control or restriction imposed on or affecting the use of all or any part of the Scheduled Property and so that the production of this Deed to the local authority, government body or agency or other person liable to pay such compensation shall be a sufficient authority to such local authority, government body or agency or other person to pay the same to the Lender and the Lender shall have power to give good receipt therefor; and

(b)any covenant or undertaking for the making of roads and footpaths, laying down of sewers or the provision of all other usual services including street lighting and the payment of road charges or other private street improvement of the Scheduled Property and any indemnity against payment of such charges or expenses;

and hereby irrevocably appoints the Lender to be its attorney and in its name and on its behalf to:

(i)claim, assess, agree, recover any such compensation; and

(ii)exercise any such right or to give any such notice or counter-notice concerning the Scheduled Property as by or under any statute the Grantor may be entitled to exercise or give against or to any local or other competent or appropriate authority;

3.2.2(insofar as the same are capable of assignment) the Insurances and all proceeds in respect of the Insurances and all rights and benefits in respect of the Insurances (including all claims relating to the Insurances and all returns of premiums in respect thereof);  

3.2.3(insofar as the same are capable of assignment)  all of its rights and benefits (but not its obligations) in respect of:

(a)the Relevant Contracts (including all monies payable to the Grantor and all claims, awards and judgments in favour of or received or receivable by the Grantor under or in connection with any Relevant Contracts);

(b)alloccupational leases;

(c)all Rental Income;

(d)all guarantees of Rental Income contained in or relating to any occupational lease;

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(e)all letters of credit issued in its favour; and

(f)all bills of exchange and other negotiable instruments held by it; and

3.2.4all of its rights in respect of any Intercompany Loans to which it is a party.

3.3Non-assignable

To the extent that any such right, title and interest described in Clause 3.2.2 or 3.2.3is not assignable or capable of assignment:

3.3.1the assignment purported to be effected by Clause 3.2 shall operate as:

(a)in the case of the Insurances, an assignment of any and all present and future proceeds of the Insurances; and

(b)in the case of the Relevant Contracts, occupational leases, guarantees of Rental Income and letters of credit (as the case may be) an assignment of all present and future damages, compensation, remuneration, profit, rent, income or monies which the Grantor may derive therefrom or be awarded or entitled to in respect thereof; and

in each case as continuing security for the payment and performance of the Secured Obligations; and

3.3.2the Grantor shall hold the benefit of any such right, title and interest in trust for the Lender.

3.4Floating Charge

The Grantor, as beneficial owner, as continuing security for the payment, performance and discharge of the Secured Obligations, hereby charges in favour of the Lenderon behalf of the Secured Parties by way of first floating charge all of the Grantor’s stock-in-trade, inventory and raw materials together with the whole of the Grantor’s undertakings, property, assets and rights whatsoever and wheresoever both present and future, other than any assets for the time being effectively mortgaged or charged to the Lenderon behalf of the Secured Parties by way of mortgage or fixed charge or effectively assigned to the Lenderon behalf of the Secured Parties (whether at law or in equity) pursuant to Clause 3.1, 3.2 and 3.3 of this Deed or otherwise subject to an effective fixed security in favour of the Lender on behalf of the Secured Parties.

3.5Crystallisation of Floating Charge

3.5.1The Lender may at any time:

(a)on or after the occurrence of an Event of Default which is continuing; and

(b)if it shall appear to the Lender that all or a substantial part of the Floating Charge Property is in danger of being seized or sold under any form of distress or execution levied or threatened to be levied or to be otherwise in jeopardy;

by notice in writing to the Grantor convert the floating charge with immediate effect into a fixed charge with regard to any Floating Charge Property specified in the notice.

3.5.2Notwithstanding Clause 3.5.1 and without prejudice to any rule of law which may have a similar effect, the floating charge shall automatically be converted with immediate

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effect into a fixed charge as regards the Floating Charge Property and without notice from the Lender to the Grantor on:

(a)the Grantor ceasing to carrying on its business;

(b)the presentation of a petition for the compulsory winding up of the Grantor;

(c)the convening of a meeting for the passing of a resolution for the voluntary winding up of the Grantor;

(d)the appointment by any person of a receiver and/or manager to the Grantor or any of its assets;

(e)the presentation of a petition for the appointment of an examiner to the Grantor or any related company;

(f)the creation or attempted creation of any Lien over all or any part of the Floating Charge Property without the prior consent in writing of the Lender or the levying or attempted levying by any person of any distress, execution, sequestration or other process against any of the Floating Charge Property; or

(g)the issuance of a notice to the Grantor striking the Grantor off the register of companies.

3.6Excluded Assets

Notwithstanding Clauses 3.1 to 3.5 (inclusive), no Lien or security interest is hereby granted on any Excluded Assets and references in this Deed to Security Assets shall be deemed to exclude any Excluded Assets.

3.7Negative Pledge

3.7.1The Grantor shall not, save as otherwise permitted by the terms of the Loan Documents:

(a)create or permit to subsist any Lien on any Security Asset; or

(b)sell, transfer, licence, lease, grant any option over or otherwise dispose of any Security Asset or enter into any agreement to sell, transfer, licence, lease, grant any option over or otherwise dispose of any Security Asset.

3.7.2The Grantor, without prejudice to Clause 3.7.1(a) and (b) above but in addition to the restrictions in those sub-clauses, shall not sell, assign, charge, factor or discount or in any other manner deal with any of the Book Debt Receivables without the prior written consent of the Lender.

3.8After Acquired Property

If and whenever the Grantor shall acquire after the date of this Deed any freehold, leasehold or other immovable property it shall forthwith inform the Lender in writing of the acquisition and as soon as may be practicable if so required by the Lender deliver to the Lender the deeds and documents in its possession relating to the property so acquired and the Grantor shall, if required by the Lender, at the Grantor's own expense, execute, deliver, sign, and do all acts and deeds which shall be necessary to grant to the Lender a first fixed charge on such property in such form as the Lenderon behalf of the Secured Parties shall require as further security for all monies

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intended to be hereby secured.  Forthwith upon the acquisition of any land, the title to which is registered or required to be registered under the Registration of Title Act, 1964, the Grantor shall give notice to the Lender and shall furnish the Lender with such information regarding such land as the Lender may reasonably require and to produce the relevant land certificate to the Lender if required by the Lender to register a Lien as a burden against the Charged Property.

3.9Validity of Charges

The charges hereby created shall be and shall be deemed to be effective and shall have effect whether or not the principal monies and interest and all other sums intended to be hereby secured or any part thereof shall be advanced before or after or upon the date of the execution of these presents.

3.10Continuing Obligations

Notwithstanding any other provisions of this Deed:

3.10.1the Grantor shall remain liable under any contracts (including the Relevant Contracts), agreements and other documents included in the Security Assets (to the extent set forth therein) to perform all of its duties and obligations thereunder to the same extent as if this Deed had not been executed;

3.10.2the exercise by the Lender of any of the rights hereunder shall not release the Grantor from any of its duties or obligations under such contracts, agreements and other documents; and

3.10.3the Lender shall not have any obligation or liability under any such contracts, agreements or other documents included in the Security Assets by reason of this Deed, nor shall the Lender be obligated to perform any of the obligations or duties or to discharge any of the liabilities of the Grantor thereunder or to make any payment or any enquiry as to the nature or sufficiency of any payment received by it or the Grantor or to take any action to collect or enforce any such contract, agreement or other document.

3.11Proviso for Redemption/Release/Reassignment

Upon satisfaction in full of the Secured Obligations and subject to the Grantor ceasing to have any liability (whether actual or contingent) to the Lenderon behalf of the Secured Parties in respect of the Secured Obligations in accordance with the terms of this Deed and the Secured Parties ceasing to be under any commitment to advance any amounts to any Credit Partyand upon the payment of all costs, charges and expenses incurred by the Lender or any Receiver in relation to this Deed effected by operation of law or pursuant to any judgment, decree or act of the Grantor the security hereby constituted shall be automatically released and all rights to the Security Assets shall revert to the Grantor. The Lender will at any time thereafter at the request and cost of the Grantor(but subject to the rights and claims of any person having prior rights to the Security Assets or any of them)  execute and do all such deeds, acts and things that may be necessary to surrender, reassign, discharge or release the charges and assignments hereby created and reconvey or surrender to the Grantor or its assigns the Security Assets.

SECTION 4.0 - ENFORCEABILITY OF SECURITY

4.1Events of Default

The security hereby constituted shall immediately become enforceable and the floating charge hereby granted shall immediately crystallise and become a specific charge and all rights of the

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Grantor to deal for any purpose whatsoever with the Security Assets or any part thereof following the occurrence of an Event of Defaultwhich is continuing.

SECTION 5.0 - RIGHTS AND POWERS OF THE LENDER

5.1Entry into Possession

At any time after the security hereby constituted shall have become enforceable the Lender may, in its absolute discretion:

5.1.1enforce all or any part of the security in any manner it sees fit and the power of sale and other powers conferred on mortgagees by the Act shall apply to this Deed in each case as varied or extended by this Deed without the need to obtain the consent of the Grantor or an order for possession under Sections 97 or 98 of the Act; and/or

5.1.2without further notice or demand, enter into possession of the Security Assets (or any part thereof); and/or

5.1.3sell, call in, collect, convert into money or otherwise deal with the Security Assets (or any part thereof) with the power to sell any of the Security Assets either together as one lot or in parcels and either by public auction, tender or private contract and either for a sum on account and a charge for the balance with full power upon every such sale to make any special or other stipulation as to the title or evidence of commencement of title or otherwise which the Lender and/or any Receiver shall think proper and with full power to give an option to purchase all or any part of the Security Assets, buy in, rescind or vary any contract for the sale of the Security Assets or any part thereof and to resell the same without being responsible for any loss which may be occasioned thereby and with full power to compromise and effect compositions and for the purposes aforesaid or any of them to execute and do all such assurances and things as it shall think fit and any and all monies expended by the Lenderon behalf of the Secured Parties and/or any Receiver under this Section shall be deemed to be expenses properly incurred by the Lender and/or any Receiver.

PROVIDED THAT Section 99 of the Act shall not apply to this Deed and neither the Lender nor any Receiver shall be obliged to take any steps to sell or lease the Security Assets (or any part thereof) after going into possession of the Security Assets (or any part thereof) and the Lender and any Receiver shall have absolute discretion as to the time of exercise of the power of sale and the power of leasing and all other powers conferred on them by the Act or otherwise.  The rights of the Lender and any Receiver are without prejudice to and in addition to any right of possession (express or implied) to which the Lender and/or any Receiver is otherwise entitled (whether by virtue of this Deed, operation of law,  statute, contract or otherwise).

5.2Further Right of Possession

In addition to the powers hereunder given the Lender may enter into possession of and hold or appoint a Receiver to take possession of any part of the Security Assets which may at any time appear to it in danger of being taken under any process of law by any creditor of the Grantor or to be otherwise from any cause whatever in jeopardy and to any Receiver appointed under this Clause the provisions of Clause 6.1 shall apply mutatis mutandis and the Lender may at any time give up possession or withdraw the receivership.

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5.3Power of Sale

At any time after the security hereby constituted has become enforceable the power of sale and all other powers conferred on mortgagees by the Act shall be exercisable immediately without the need:

5.3.1for the occurrence of any of the events specified in sub-sections (a) to (c) of section 100(1) of the Act; or

5.3.2to give notice as specified in the final proviso to section 100(1) of the Act; or

5.3.3to obtain the consent of the Grantor or a court order authorising the exercise of the power of sale under sections 100(2) or (3) of the Act; or

5.3.4to give any notice to the Grantor under section 103(2) of the Act.

Section 94 of the Act shall not apply to any security constituted by this Deed or any enforcement of such security.

5.4Power of Leasing and Accepting Surrenders

The statutory powers of leasing conferred on the Lender and any Receiver are extended so as to authorise the Lender and any Receiver to lease, make agreements for leases, accept surrenders of leases and make agreements to accept surrenders of leases as it or he may think fit and without the need to comply with any provision of sections 112 to 114 of the Act.  Without prejudice to the generality of the foregoing, the Lender and any Receiver may exercise the statutory power to accept surrenders of leases conferred by the Act for any purpose that it or he thinks fit and not just for the purpose of granting new leases under section 112 of the Act and any new lease granted by the Lender or any Receiver following the acceptance of a surrender need not comply with the requirements of section 114(3) of the Act.

5.5Power to Conduct Business

At any time after the occurrence of an Event of Default which is continuing and until the whole of the Security Assets shall be sold, called in, collected or converted under the powers of conversion the Lender may if it shall think fit so to do, carry on the business of the Grantor in and with the Security Assets and may manage and conduct the same as it shall in its discretion think fit and for the purposes of the said business may employ such agents, managers, Receivers, accountants and servants upon such terms as to remuneration or otherwise as it shall think proper and may exercise all rights of voting conferred by any part of the Security Assets and otherwise deal with and exercise or permit to be exercised any powers or rights incidental to the ownership of any of the Security Assets on such terms and conditions and generally in such manner as it may deem expedient and generally may do or cause to be done all such acts and things and may enter into such arrangements respecting the Security Assets or any part thereof as it could do it if was absolutely entitled thereto and without being responsible for any loss or damage which may arise or be occasioned thereby. The Lender shall out of the profits and income of the Security Assets and the monies to be made by it in carrying on the said business pay and discharge the expenses incurred in and about the carrying on and management of the said business or in the exercise of any of the powers conferred by this Section or otherwise in respect of the Security Assets and all outgoings which it shall think fit to pay and shall pay and apply the residue of the said profits, income and monies in the same manner as hereinbefore provided with respect of the monies to arise from any sale, calling in, collection or conversion under the powers of conversion. 

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5.6Due Date for Statutory Purposes

For the purpose of all powers implied by statute (but not otherwise), the Secured Obligations are deemed to have become due on the date of this Deed.

5.7Non-applicability of Sections 92 and 94 of the Act

Section 92 of the Act shall not apply to this Deed.  Section 94 of the Act shall not apply to the security constituted by this Deed or any enforcement of such security.

5.8Position of Third Parties

No person (including a purchaser) dealing with the Lender or any Receiver or its or his attornies or agents will be concerned to enquire:

5.8.1whether any of the Secured Obligations have become payable or remain due; or

5.8.2whether due notice has been given to any person; or

5.8.3whether any power which the Lender or any Receiver is purporting to exercise has become exercisable or has been or is being properly exercised; or

5.8.4whether the Receiver is authorised to act; or

5.8.5how any money paid to the Lender as security trustee on behalf of the Secured Parties or to any Receiver is to be applied,

and all protections to purchasers contained in sections 105, 106 and 108(5) of the Act shall apply to any person (including a purchaser) dealing with the Lender or any Receiver in like manner as if the statutory powers of sale and appointing a receiver had not been varied or extended by this Deed.

5.9Receipt of LenderGood Discharge

Upon any sale, calling in, collection or conversion or other dealing under any of the provisions herein contained the receipt of the Lender or any Receiver for the purchase money of the Security Assets sold or for any other monies paid to it shall effectually discharge the purchaser or person paying the same therefrom and from being concerned to see to the application or the loss or misapplication thereof. 

5.10Application of Monies

Notwithstanding section 109 of the Act, the Lender shall hold the monies arising from any exercise of the powers of sale or conversion upon trust that it shall thereout in the first place pay or retain or provide for the payment or satisfaction of the costs and expenses and liabilities incurred in or about the execution of such powers or otherwise in relation to these presents and shall apply the residue of such monies in accordance with Clause 8.3 of the Credit Agreement. 

SECTION 6.0 - APPOINTMENT OF RECEIVER

6.1Power of Appointment

At any time after the occurrence of an Event of Default which is continuing (and so that no delay or waiver of the right to exercise the powers hereby conferred shall prejudice the future exercise of such powers) and without the need for the occurrence of any of the events specified in section

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108(1)(a) to (c) inclusive of the Act, the Lender may without further notice by writing under the hand of any director, general manager, assistant general manager or secretary for the time being of the Lender or any person authorised by any one of them in writing appoint a Receiver of the Security Assets or any part thereof and remove any Receiver so appointed and appoint another or others in his stead and/or appoint another person to act jointly with any such Receiver and the following provisions shall have effect:

6.1.1such appointment may be made either before or after the Lender shall have entered into or taken possession of the Security Assets or any part thereof;

6.1.2such Receiver shall have and be entitled to exercise all powers conferred by the Act, without the restrictions contained in the Act, in the same way as if the Receiver had been duly appointed under the Act and in addition, shall have the power on behalf of and at the cost of the Grantor to do or omit to do anything which the Grantor could do or omit to do in relation to the Security Assets or any part thereof and in particular but without limiting any powers hereinbefore referred to shall have power to do all or any of the following:  

(a)to enter upon, take possession of, collect and get in the Security Assets and for that purpose to take, defend or discontinue any proceedings or submit any matter to arbitration or mediation in the name of the Grantor;

(b)to re-let or let the Security Assets or any part thereof from time to time to such person or persons as he shall think fit for any term of years which he thinks right or on yearly monthly or weekly tenancies at the best rents which may be reasonably obtainable and to surrender or accept surrenders, grant licences or otherwise dispose of all or any of the Security Assets on such terms and conditions as he may think fit;

(c)to carry on, manage, develop, construct or diversify the business of the Grantor or any part thereof (or concur in so doing);

(d)to sell or concur in selling the Security Assets or any part thereof and to carry such sale into effect and by deed in the name and on behalf of the Grantor or otherwise convey the same to the purchaser thereof;

(e)to make any arrangement or compromise or enter into, vary or cancel any contracts which he shall think expedient in the interests of the Lender;  

(f)to make and effect all such repairs, improvements, structural and other alterations or extensions or demolitions or renewals of the Security Assets as he shall think fit and renew such of the plant, machinery and any other effects of the Grantor whatsoever as shall be worn out lost or otherwise become unserviceable without being responsible for loss or damage; and do anything else in connection with the Security Assets which the Receiver may think desirable for the purpose of making productive and increasing the letting or market value of the Security Assets or protecting the security hereby created; and

(g)to effect, maintain, renew, increase or vary such insurances as he shall, in his absolute discretion, think fit;

(h)to promote the formation of a subsidiary company and/or companies of the Grantor with a view to such subsidiary company and/or companies

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purchasing, leasing, licensing or otherwise acquiring interests in all or any of the assets of the Grantor;

(i)to make allowances to, and re-arrangements with, any lessee, tenants or other persons from whom any rents and profits may be receivable (including the granting of any licences and reviewing rent in accordance with the terms of and varying the provisions of any leases affecting the Security Assets);

(j)to redeem any prior encumbrance and to settle and prove the accounts of the encumbrancer and accounts so settled and proved shall be conclusive and binding on the Grantor and the money so paid shall be a receivership expenses;

(k)to settle, adjust, refer to arbitration, compromise and arrange any claims, accounts, disputes, questions and demands with or by any person who is or claims to be a creditor of the Grantor or relating in any way to the Security Assets or any part thereof and take, defend, continue and discontinue any proceedings relating to the Security Assets or any part thereof;

(l)to appoint, hire and employ and to remunerate managers, agents, servants, attendants, workmen and others on such terms and generally in such manner as he shall think fit in connection with any exercise by him of any of the within powers or otherwise for any purpose connected with the Security Assets or any part thereof and to discharge any person so appointed, hired or employed; and

(m)generally, to use (at his option) the name of the Grantor in the exercise of all or any of the powers hereby conferred and to do all such other acts and things as maybe considered to be incidental or conducive to any of the matters and powers aforesaid and which the Receiver may or can lawfully do as agent for the Grantor;

6.1.3unless otherwise directed by the Lender, such Receiver may also exercise all the powers and authority vested in the Lender by these presents and in particular all powers vested in the Lender by Section 5.0 hereof;

6.1.4the Lender may from time to time fix the remuneration of such Receiver and direct payment thereof out of the Charged Property but the Grantor alone shall be liable for such remuneration;

6.1.5the Lender may from time to time or at any time require such Receiver to give security for the due performance of his duties as such Receiver and may fix the nature and amount of security to be so given but the Lender shall not be bound in any case to require any such security;

6.1.6the Lender shall be in no way responsible for any misconduct or negligence on the part of such Receiver;

6.1.7subject as provided in Section 5.0 and herein the provisions of any relevant enactment conferring powers on a mortgagee or Receiver shall apply to and be deemed to be conferred upon any Receiver appointed hereunder as if such provisions and powers were incorporated herein. 

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6.2Powers of Receiver to Borrow

Subject as provided in this Section, any Receiver appointed under these presents may for the purpose of defraying his costs charges, losses or expenses (including his remuneration) which shall be incurred by him in the exercise of the powers, authorities and discretions vested in him and for all other purposes hereof or any of them, raise and borrow money on the security of the Security Assets or any part thereof either in priority to the security hereby constituted or otherwise and on such terms and conditions as he may think fit and no person lending any such money shall be concerned to enquire as to the propriety or purpose of the exercise of this power or to see to the application of any monies so raised or borrowed provided that no Receiver shall exercise this power without first obtaining the written consent of the Lender but the Lender shall incur no responsibility or liability to the Grantor or otherwise by reason of its giving or refusing such consent whether absolutely or subject to any limitation or condition.

6.3Application of Monies by Receiver

The net profits of carrying on the said business and/or the net proceeds of any sale by the Receiver shall subject to any prior ranking claims thereon, and notwithstanding section 109 of the Act, be applied by him as follows:

6.3.1firstly, in payment of all costs, charges and expenses of and incidental to the appointment of the Receiver and the exercise by him of all or any of the powers aforesaid including the remuneration of the Receiver and all outgoings properly paid by him; and

6.3.2secondly, in or towards payment in the manner provided in Clause [8.3] of the Credit Agreement,

PROVIDED THAT if the Receiver shall be of the opinion that the security may prove deficient payments may be made on account of unpaid principal monies before unpaid interest due under these presents but such alteration in the order of payment of principal monies and interest shall not prejudice the right of the Lender to receive the full amount to which it would have been entitled if the primary order of payment had been observed or any less amount which the sum ultimately realised may be sufficient to pay.

6.4Liability of the Lender and Receiver

TheLenderand any Receiver appointed by the Lender under this Deed shall not, in any circumstances, whetherby reason of the Lender or such Receiver entering into possession of the Security Assets or any part thereof or for any other reason whatsoever be liable to account as mortgagee in possession or on any basis whatsoever for anything except actual receipts or be liable for any loss arising from any realisation of the Security Assets or any part thereof or any default or omission in relation to the Security Assets or any exercise or non-exercise of any power, authority or discretion conferred on the Lender or any Receiver in relation to the Security Assets or any part thereof by or pursuant to this Deed or the Act.

6.5Receiver Agent of the Grantor

Any Receiver appointed hereunder shall be deemed to be the agent of the Grantor for all purposes and be in the same position as the Receiver duly appointed under the Act in connection with his powers and duties hereunder save so far as he shall be specifically authorised to engage the responsibility of the Lender or shall expressly undertake personal liability which he shall not be deemed to do by entering into any contract as or in which he is described as Receiver and the Grantor shall be solely responsible for all acts and defaults of the Receiver as agent for the Grantor and for such remuneration of the Receiver as the Lender shall consider reasonable and

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be liable under any contracts or engagements made or entered into by him and the Lender shall not in making the appointment or in consenting thereto incur any liability for any such acts or defaults or otherwise save in the case of fraud, gross negligence or wilful misconduct.

6.6Section 108 of the Act

The provisions of section 108 of the Act (with the exception of sub-sections 1(a) and (b) thereof and save so far as modified by the provisions hereof) shall apply to these presents and to any Receiver appointed by the Lender hereunder.  Section 108(7) of the Act shall not apply to the commission and/or remuneration of a Receiver appointed pursuant to this Deed.  A Receiver shall be entitled to remuneration at a rate to be fixed by agreement between such Receiver and the Lender (or failing such agreement to be fixed by the Lender).

SECTION 7.0 - CONTINUING SECURITY, ETC.

7.1Continuing Security

The security constituted by this Deed shall be  a continuing security which shall extend to all the Secured Obligations and shall not be considered as satisfied or discharged by any intermediate payment or settlement of all or any of the Secured Obligations and is in addition to and independent of and shall not prejudice, affect or merge with any other security which the Lender may hold at any time for any of the Secured Obligations and shall not be in any way prejudiced thereby or by the invalidity thereof.

7.2Opening of New Accounts

7.2.1If for any reason the security constituted hereby or pursuant hereto ceases to be a continuing security (other than by way of discharge of such security), the Lenderand any Secured Party may open a new account with or continue any existing account with the Grantor and the liability of the Grantor in respect of the Secured Obligations at the date of such cessation shall remain regardless of any payments in or out of any such account.

7.2.2At any time on receiving notice that the Grantor has created a Lien over any of the property or assets hereby charged the Lenderand any Secured Party may close the then current account of the Grantor (if any) and open a new account with the Grantor and no monies paid or carried to the credit of such new account shall be appropriated towards or have the effect of discharging any part of the amount owing on this security at the date of such notice. 

7.3Reinstatement

7.3.1Where any discharge (whether in respect of the obligations of the Grantor or any security for those obligations or otherwise) is made in whole or in part or any arrangement is made on the faith of any payment, security or other disposition which is avoided or must be restored on insolvency, liquidation or otherwise without limitation, the liability of the Grantor under this Deed shall continue as if the discharge or arrangement had not occurred. 

7.3.2The Lender may concede or compromise any claim that any payment, security or other disposition is liable to avoidance or restoration.

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7.4Waiver of Defences

7.4.1The liability of the Grantor hereunder will not be affected by any act, omission, circumstance, matter or thing which but for this provision would release or prejudice any of its obligations hereunder or prejudice or diminish such obligations in whole or in part, including without limitation, and whether or not known to the Grantor or any Secured Party:

(a)any time, indulgence or waiver granted to, or composition with, the Grantor or any other person; or

(b)the release of the Grantor or any other person under the terms of any composition or arrangement with any creditor of the Grantor; or

(c)the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect or take up or enforce any rights or remedies against, or any security over assets of, the Grantor or any other person or any non-presentment or non-observance of any formality or other requirement in respect of any instruments or any failure to realise the full value of any other security; or

(d)any legal limitation, disability, incapacity or lack of powers, authority or legal personality of or dissolution or change in the members or status of or other circumstance relating to, the Grantor or any other person; or

(e)any variation (however fundamental and whether or not involving any increase in the liability of the Grantor thereunder) or replacement of any Loan Document or any other document or security so that references to the Loan Documents or other documents or security in this Deed shall include each such variation or replacement; or

(f)any unenforceability, illegality, invalidity or frustration of any obligation of the Grantor or any other person under any Loan Document or any other document or security, or any failure of the Grantor to become bound by the terms of a Loan Document whether through any want of power or authority or otherwise; or

(g)any postponement, discharge, reduction, non-provability or other similar circumstance affecting any obligation of the Grantor under a Loan Document or any security granted therefor resulting from any insolvency, liquidation or dissolution proceedings or from any law, regulation or order, this Deed be construed as if there were no such circumstance,

to the intent that the Grantor's obligations under this Deed shall remain in full force, and this Deed shall be construed accordingly, as if there were no such circumstance, act, variation, limitation, omission, unenforceability, illegality, matter or thing.

The Lender shall not be concerned to see or investigate the powers or authorities of the Grantor or its officers or agents, and monies obtained or Secured Obligations incurred in purported exercise of such powers or authorities or by any person purporting to act on behalf of the Grantor shall be deemed to form a part of the Secured Obligations, and "Secured Obligations" shall be construed accordingly.

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7.5Additional Security

This Deed is in addition to and is not in any way prejudiced by any other security now or hereafter held by the Lender.

SECTION 8.0 - SHARES

8.1Covenants relating to Shares

The Grantor hereby covenants with the Lender as security trustee on behalf of the Secured Parties that in relation to the Shares it will at all times during the continuance of this security comply with the provisions set forth in the following Clauses of this Section, save to the extent otherwise permitted by the terms of the Credit Agreement.

8.2Deposit of Title Documents

The Grantor shall:

8.2.1immediately upon the date of this Deed, or if acquired after the date of this Deed, forthwith following the acquisition of same, deposit with the Lender, or as the Lender may direct, all certificates and other documents of title or evidence of ownership in relation to any of the Shares; and

8.2.2execute in blank and deliver to the Lender all share transfer forms and all other documents which may be requested by the Lender in order to enable the Lender or its nominees to be registered as the owner or otherwise obtain a legal title to any of the Shares.

8.3Changes to Rights

The Grantor shall not take or allow the taking of any action on its behalf in relation to any of the Shares which would (in the opinion of the Lender) prejudice the value of, or the ability of the Lender to realise, the security created in this Deed.

8.4Calls

The Grantor shall pay all calls or other payments due and payable in respect of any of the Shares and in the event of the Grantor failing to do so, the Lender may, but shall not be obliged to, pay the calls or other payments on behalf of the Grantor.  The Grantor must immediately on request reimburse the Lender for any payment made by the Lender in respect of the foregoing.

8.5Other Obligations in respect of Shares

8.5.1The Grantor shall promptly copy to the Lender and comply with all requests for information which is within its knowledge relating to any of the Shares.  If it fails to do so, the Lender may elect to provide such information as it may have on behalf of the Grantor.

8.5.2The Grantor shall comply with all other conditions and obligations assumed by it in respect of any of the Shares.

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8.6Voting and Dividend Rights

8.6.1Until the occurrence of an Event of Default which is continuing and upon the receipt of written notice from the Lender informing the Grantor otherwise:

(a)the Grantor may exercise the voting rights, powers and other rights in respect of the relevant Shares provided that such rights and powers must not be exercised in any manner which would prejudice the value of, or the ability of the Lender to realise, the security created by this Deed; and

(b)all dividends or other income paid or payable in relation to any investments shall be paid directly to the Grantor.

The Grantor shall indemnify the Lender against any loss or liability incurred by the Lender as a consequence of the Lender acting in respect of the Shares on the direction of the Grantor unless such loss or liability is caused by the negligence or wilful default of the Lender.

8.6.2Upon the occurrence of an Event of Defaultwhich is continuing and upon the receipt of written notice from the Lender informing the Grantor otherwise, the Lender may exercise (in the name of the Grantor and without any further consent or authority on the part of the relevantcompany) any voting rights and any powers or rights which may be exercised by the legal or beneficial owner of any Share, any person who is the holder of any investment.

SECTION 9.0 - SECURITY ACCOUNTS

9.1Covenants relating to Security Accounts

The Grantor hereby covenants with the Lender as security trustee on behalf of the Secured Parties that in relation to the Security Accounts it will at all times during the continuance of this security comply with the provisions set forth in the following Clauses of this Section9.0, save to the extent otherwise permitted by the Credit Agreement.

9.2Security Accounts

All Security Accounts must, unless the Lender otherwise agrees in writing, be maintained with an Account Bank.

9.3Withdrawals

9.3.1The Grantor shall not,following the occurrence of an Event of Default which is continuing, withdraw any moneys from a Security Account except with the prior consent of the Lender.

9.3.2Subject as provided in Clause 9.3.1, the Lender (or a Receiver) may withdraw amounts standing to the credit of a Security Account to meet an amount due and payable in accordance with the terms of the Loan Documents when it is due and payable.

9.4Notices of Charge

Upon execution and delivery of this Deed, theGrantor shall immediately:

9.4.1give notice to any relevant Account Bank substantially in the form of Part 1 of Schedule 3  (Form of Letters for Security Account); and

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9.4.2use its best endeavours to ensure that the Account Bank acknowledges the notice substantially in the form of Part 1 of Schedule 3  (Form of Letters for Security Account).

SECTION 10.0 - BOOK DEBT RECEIVABLES ACCOUNT

10.1Covenants relating to Book Debt Receivables Account

The Grantor hereby covenants with the Lender as security trustee on behalf of the Secured Parties that in relation to the Book Debt Receivables Account it will at all times during the continuance of this security comply with the provisions set forth in the following Clauses of this Section 10.0, save to the extent otherwise permitted by the Credit Agreement.

10.2Book Debt Receivables Account

The Book Debt Receivables Account must, unless the Lender otherwise agrees in writing, be maintained with an Account Bank.

10.3Receipts

The Grantor shall get in and realise its Book Debt Receivables in the ordinary course of its business and hold the proceeds of the getting in and realisation on trust for the Lender on behalf of the Secured Parties.

10.4Withdrawals

10.4.1The Grantor shall not, without the prior written consent of the Lender, withdraw any moneys from Book Debt Receivables Account.

10.4.2The Lender (or a Receiver) may withdraw amounts standing to the credit of a Book Debt Receivables Account to meet any Secured Obligation due and payable in accordance with the terms of theLoan Documents when it is due and payable.

10.5Notices of Charge

10.5.1Upon execution and delivery of this Deed, the Grantorshall immediately deliver to theAccount Bank with which the Book Debt Receivables Account is maintained, a notice to the Account Bank, and procure that the Account Bank has signed and delivered to the Lender, a letter, in each case substantially in the form of Part 4 of Schedule 3(Form of Notice to Account Bank operating Book Debts Receivables Accounts).

10.5.2Upon receipt of the acknowledgement in Clause  10.5.1 above from the Account Bank, the Lender will send a letter to that branch substantially in the form of Part 4 of Schedule 3  (Form of Letters for Book Debt Receivables Account).

10.5.3The Grantor shall:

(a)collect all Book Debt Receivables in the ordinary course of trading as agent for the Lender;

(b)immediately upon receipt pay all monies which it may receive in respect of the Book Debt Receivables into the Book Debt Receivables Account;

(c)pending such payment into a Book Debt Receivables Account hold all monies so received upon trust for the Lender.

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10.6Legal Assignment

The Grantor shall, if called upon to do so by the Lender, execute and deliver to the Lender a legal assignment of its then Book Debt Receivables and other debts on such terms as the Lender may require and give notice thereof to the debtors from whom the same are due owing or incurred and take any other steps as the Bank may require to perfect such legal assignment.

SECTION 11.0 - RELEVANT CONTRACTS/INSURANCES

11.1Covenants relating to Relevant Contracts and Insurances

The Grantor hereby covenants with the Lender as security trustee on behalf of the Secured Parties that in relation to the Relevant Contracts and Insurances it will at all times during the continuance of this security comply with the provisions set forth in the following Clauses of this Section.

11.2Preservation

The Grantor shall not, without the prior written consent of the Lender:

11.2.1amend or waive any term of, or terminate, any Relevant Contract to which it is a party; or

11.2.2take any action which might jeopardise the existence or enforceability of any such Relevant Contract.

11.3Further Undertakings

The Grantor hereby further undertakes with the Lender that it shall:

11.3.1duly and promptly perform its obligations, and diligently pursue its rights, under each Relevant Contract to which it is a party; and

11.3.2supply the Lender and any Receiver with copies of each Relevant Contract and any information and documentation relating to any Relevant Contract requested by the Lender or any Receiver.

11.4Notices of Assignment

Upon execution and delivery of this Deed, the Grantor shall immediately serve a notice of assignment:

11.4.1in relation to the Insurances, substantially in the form of Part 2 of Schedule 3  (Notice of Assignment of Insurances);

11.4.2in relation to the Relevant Contracts, substantially in the form set out in Part 2 of Schedule 3(Notice to Contract Party), on each counterparty to a Relevant Contract to which it is a party; and

11.4.3use its best endeavours to procure that each such party acknowledges that notice, substantially in the form of Part 3 of Schedule 3  (Letter of Undertaking) or Part 3 of Schedule 3  (Acknowledgement from Contract Party) as the case may be.

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SECTION 12.0 - INTELLECTUAL PROPERTY

12.1Covenants relating to Intellectual Property

The Grantor hereby covenants with the Lender as security trustee on behalf of the Secured Parties that in relation to the Intellectual Property it will at all times during the continuance of this security comply with the provisions set forth in the following Clauses of this Section.

12.2Intellectual Property

The Grantor shall:

12.2.1if it shall become aware of any infringement of its Intellectual Property, at once give the Lender all information in its possession with regard thereto and at its own cost commence and diligently prosecute and permit the Lender in the name, and at the cost of the Grantor, to commence and prosecute all proceedings which in the sole opinion of the Lender are necessary to prevent such infringement or to recover damages in respect thereof;

12.2.2not, without prior written consent of the Lender in relation to its Intellectual Property or any part thereof grant any exclusive registered user agreement or exclusive licence;

12.2.3lodge all notices, complete all filings and registrations and do all other acts as may be necessary to ensure that its Intellectual Property is valid and subsisting and remains vested in it and take all such actions and proceedings as are reasonably necessary to protect such Intellectual Property and if any or all such Intellectual Property shall at any time become void to lodge all notices and do all acts as may be necessary to restore such Intellectual Property to it and in particular to pay all fees as may be necessary for all of the above purposes before the same shall become due.

SECTION 13.0 - GENERAL PROVISIONS

13.1Assignment

The provisions of Clause 10.6 of the Credit Agreement shall apply to this Deed as though references to “this Agreement” were to “this Deed”.

13.2Consolidation

The statutory restrictions on the consolidation of mortgages shall not apply to this security.

13.3Protection of Purchaser

Where a conveyance is made in professed exercise of the power of sale applicable hereto the title of the purchaser (the "Purchaser") shall not be impeachable on the grounds that no case has arisen to authorise the sale or that due notice was not given or that the power was otherwise improperly exercised and the Purchaser shall not either before or on conveyance be concerned to see or inquire whether a case has arisen to authorise the sale or due notice has been given or the power is otherwise than properly or regularly exercised but this provision shall not prejudice a claim for damages against the person exercising the power or any person damnified by an unauthorised or improper or irregular exercise thereof.

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13.4No Waivers,  Remedies Cumulative

No failure on the part of the Lender (or any Secured Party) to exercise, nor any delay in exercising any right, remedy, power or privilege under this Deed or any Loan Document will operate as a waiver thereof, nor will any single or partial exercise of any such right, remedy, power or privilege preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges under this Deed are cumulative and not exclusive of any such right, remedy, power or privilege that may otherwise be available to the Lender or any Secured Party.

13.5Set-off

In addition to any other right of set-off to which the Lender(or any Secured Party) may at any time be entitled (whether by agreement, operation or law or otherwise), the Lender (or any Secured Party) may at any time after the occurrence and during the continuance of an Event of Default (both before and after any demand hereunder and without notice) set-off any liability of the Grantor to the Lender (or any Secured Party) (whether actual or contingent and whether or not then due and payable) against any credit balance on any account of the Grantor with the Lender(or any Secured Party) and may retain the whole or any part of such credit balance to meet the liability of the Grantor to the Lender (or any Secured Party).

13.6Preferential Claims

The Grantor shall procure that all debts and obligations to or in respect of persons employed by the Grantor which by law may have priority over the security hereby created shall be punctually duly paid and discharged. 

13.7Power of Attorney

13.7.1The Grantorby way of security irrevocably appoints the Lenderas security trustee on behalf of the Secured Parties (whether or not a Receiver has been appointed) and, also as a separate appointment, or any Receiver or Receivers appointed to be the attorney or attorneys of the Grantor for the Grantor and in the name and on behalf of the Grantor as its act and deed to execute, deliver and perfect all documents and do all things which the attorney may consider to be required or desirablefor:

(a)carrying out any obligation imposed on the Grantor by this Deed (including the execution and delivery of any deeds, charges, assignments or other security and any transfers of any of the Security Assets); and

(b)enabling the Lender and/or any Receiver to exercise, or delegate the exercise of, any of the rights, powers and authorities conferred on them by or pursuant to this Deed or by law (including the exercise of any right of a legal or beneficial owner of any of the Security Assets).

13.7.2The Grantor shall ratify and confirm all things done and all documents executed by any attorney in the exercise or purported exercise of any of his powers. 

13.7.3The Power of Attorney referred to in this Deed shall become enforceable following the occurrence of an Event of Default which shall be continuing.

13.8Waiver

A waiver by the Lender(or any Secured Party) of any breach of any of the terms provisions or conditions hereof or the acquiescence by the Lender (or any Secured Party) in any act (whether

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commission or omission) shall not constitute a general waiver of such term provision or condition or of any subsequent act contrary thereto.

13.9Enforcement of Other Rights

The Grantor waives any right it may have of first requiring the Lender (or any Secured Party) to proceed against or enforce any other rights or security the Lender (or any Secured Party) may have or benefit from before enforcing the security constituted hereby.

13.10Appropriations

Until all the Secured Obligations have been unconditionally and irrevocably paid and discharged in full, the Lender as security trustee on behalf of the Secured Parties may:

13.10.1refrain from applying or enforcing any other monies, security or rights held or received by it in respect of the Secured Obligations unless and until the amounts recovered by the Lender from the Grantor are sufficient to discharge in full all of the Secured Obligations PROVIDED THAT it holds any such other monies not applied in accordance with Clause 13.10.2 below or apply and enforce the same in such manner and order as it sees fit (whether against the Secured Obligations or otherwise) and the Grantor shall not be entitled to the benefit of the same; and

13.10.2hold in a suspense account any moneys received from the Grantor or on account of the Grantor's liability in respect of the Secured Obligations.  Amounts standing to the credit of any such suspense account shall bear interest at a rate considered by the Lender (acting reasonably) to be a fair market rate.

13.11Authority of the Lender

The Grantor acknowledges that the rights and responsibilities of the Lender under this Deed with respect to any action taken by the Lender or the exercise or non-exercise by the Lender of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Deed shall, as between the Lender and the other Secured Parties, be governed by the Credit Agreement and by such other agreements with respect thereto as may exist from time to time among them, but, as between the Lender and the Grantor, the Lender shall be conclusively presumed to be acting as agent for the Secured Parties with full and valid authority so to act or refrain from acting, and the Grantor shall not be under any obligation or entitlement to make any inquiry respecting such authority.

13.12Duty; Obligations and Liabilities

The Lender’s sole duty with respect to the custody, safekeeping and physical preservation of the Security Assets in its possession shall be to deal with them in the same manner as the Lender deals with similar property for its own account.  The powers conferred on the Lender hereunder are solely to protect the Lender’s interest in the Security Assets and shall not impose any duty upon the Lender to exercise any such powers.  The Lender shall be accountable only for amounts that it receives as a result of the exercise of such powers, and neither it nor any of its Affiliates shall be responsible to the Grantor for any act or failure to act hereunder, except for their own gross negligence or wilful misconduct as finally determined by a court of competent jurisdiction.  In addition, the Lender shall not be liable or responsible for any loss or damage to any Security Assets, or for any diminution in the value thereof, by reason of the act or omission of any warehousemen, carrier, forwarding agency, consignee or other bailee if such Person has been selected by the Lender in good faith.

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13.13Obligations and Liabilities with respect to Security Assets

No Secured Party and no Affiliates thereof shall be liable for failure to demand, collect or realise upon any Security Assets or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Security Assets upon the request of the Grantor or any other person or to take any other action whatsoever with regard to any Security Assets.  The powers conferred on the Lender hereunder shall not impose any duty upon any other Secured Party to exercise any such powers.  The other Secured Parties shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and neither they nor any of their respective officers, directors, employees or agents shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross negligence or wilful misconduct as finally determined by a court of competent jurisdiction.

13.14Additional Powers

13.14.1By way of supplement to the Trustee Act 1893 (as amended) it is expressly declared as follows:

(a)the Lender (as security trustee on behalf of the Secured Parties) may in relation to any of the provisions of this Deed act or rely upon the opinion or advice of or any information obtained from any lawyer, accountant, valuer, surveyor, broker, auctioneer or other expert commissioned by the Lender (as security trustee on behalf of the Secured Parties) and the Lender shall not be responsible for any loss occasioned by so acting or relying;

(b)the Lender (as security trustee on behalf of the Secured Parties) shall not be liable for acting on any opinion, advice or information purporting to be so conveyed although the same shall contain some error or shall not be authentic;

(c)the Lender (as security trustee on behalf of the Secured Parties) may refrain from doing anything which would or might in its opinion be contrary to any law of any jurisdiction or any directive or regulation of any agency of any state or which would or might otherwise render it liable to any person and may do anything which is, in its opinion, necessary to comply with any such law, directive or regulation;

(d)neither the Lender (as security trustee on behalf of the Secured Parties) nor any of its officers, employees or agents shall be liable for:

(i)the execution, genuineness, validity, enforceability or sufficiency of this Deed, any Loan Document or any other document in connection therewith; or

(ii)the collectability of amounts payable hereunder; or

(iii)the accuracy of any statement (whether written or not) made in or in connection with this Deed or other document in connection therewith;

(e)the Lender (as security trustee on behalf of the Secured Parties) and every attorney, agent or other person appointed by it under or in connection with this Deed shall be entitled to be indemnified out of amounts received by the Lender (as security trustee on behalf of the Secured Parties) under this Deed against all liabilities and expenses reasonably and properly incurred in the execution

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of any power, trust, authority or discretion in connection with this Deed and against all actions, proceedings, costs, claims and demands in respect of any matter or things done or omitted to be done in any way relating to this Deed unless the same result from the gross negligence or wilful default of the Lender (as security trustee on behalf of the Secured Parties) or any such attorney, agent or other person;

(f)all moneys which under the trusts contained in this Deed are received or held by the Lender (as security trustee on behalf of the Secured Parties) may be invested in the name of the Lender (as security trustee on behalf of the Secured Parties) or any nominee or under the control of the Lender (as security trustee on behalf of the Secured Parties) in any investment for the time being authorised by Irish law for the investment by a trustee of trust moneys or by placing the same on deposit in the name of the Lender (as security trustee on behalf of the Secured Parties) or any nominee or under the control of the Lender (as security trustee on behalf of the Secured Parties) at such bank or institution (including the Lender (as security trustee on behalf of the Secured Parties)) as the Lender subject to the terms hereof, the Lender may direct or in such currency as the Lender or, subject to the terms hereof, the Lender may direct and the Lender (as security trustee on behalf of the Secured Parties) may at any time vary or transfer any such investments for or into other such investments or convert any moneys so deposited into any other currency as the Lender or subject to the terms hereof, the Lender shall from time to time direct and shall not be responsible for any loss occasioned thereby, whether by depreciation in value, fluctuation in exchange rates or otherwise;

(g)the Lender (as security trustee on behalf of the Secured Parties) shall have full power to determine all questions and doubts arising in relation to the interpretation or application of any of the provisions of this Deed as it affects the Lender (as security trustee on behalf of the Secured Parties) and every such determination (whether made upon a question actually raised or implied in the acts or proceedings of the Lender (as security trustee on behalf of the Secured Parties)) shall be conclusive and shall bind the other parties hereto provided it is reasonable;

(h)the Lender (as security trustee on behalf of the Secured Parties) may in the conduct of the trusts hereof (otherwise than in relation to its right to make any declaration, determination or decision) instead of acting personally employ and pay an agent (whether being a lawyer or other person) to transact or concur in transacting any business and to do or concur in doing any acts required to be done by the Lender (as security trustee on behalf of the Secured Parties) (including the receipt and payment of money) and any such agent engaged in any profession or business shall be entitled to be paid all usual professional and other charges for business transacted and acts done by him or any partner or employee of his in connection with the trusts hereof; and

(i)any investment or any part or all of the Security Asset may, at the discretion of the Lender (as security trustee on behalf of the Secured Parties), be made or retained in the names of nominees.

13.14.2The Lender (as security trustee on behalf of the Secured Parties) may assume without enquiry (in the absence of knowledge by or an express notice to it to the contrary acquired or received by it in its capacity as Lender (as security trustee on behalf of the Secured Parties) hereunder) that each of the parties hereto is duly performing and observing all its obligations contained in this Deed.

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13.14.3The Lender (as security trustee on behalf of the Secured Parties) may, from time to time, be theLender (as security agent on behalf of the Secured Parties) or act in any other capacity in respect of a Loan Party and shall in such event be entitled, notwithstanding that it is also a Lender, to take or refrain from taking, any action which it would be entitled so to take if it was not the Lender (as security trustee on behalf of the Secured Parties) and shall not be precluded, by virtue of its position as the Lender (as security trustee on behalf of the Secured Parties), or in any other capacity, from exercising any of its discretions, powers and duties as Lender (as security trustee on behalf of the Secured Parties). The Lender (as security trustee on behalf of the Secured Parties) may enter into any financial or business contracts or any other transaction or arrangement with the Grantor or any other person and the Lender (as security trustee on behalf of the Secured Parties) shall be in no way accountable to the Grantor or any other person for any profits or benefits arising from any such contract or transaction.

13.14.4The powers, trusts, authorities and discretions conferred upon the Lender (as security trustee on behalf of the Secured Parties) by this Deed shall be in addition to any which may from time to time be vested in the Lender by the general law or otherwise.

13.14.5The Lender (as security trustee on behalf of the Secured Parties) shall have the power, in any circumstances, to appoint a new or additional trustee or trustees, being person(s) appointed by the Lender (as security trustee on behalf of the Secured Parties) at its sole discretion.  Any appointment of a new, additional trustee or trustees shall be in writing signed by or on behalf of the Lender (as security trustee on behalf of the Secured Parties).  These powers shall be in addition to the powers contained in the Trustee Act 1893 (as amended).

13.14.6The Lender may retire at any time and without being responsible for the costs occasioned by such retirement.  Prior to confirmation by the Lender that the Secured Obligations have been irrevocably discharged in full, the retirement of the Lender (as security trustee on behalf of the Secured Parties) shall not take effect until the appointment of a new Lender (as security trustee on behalf of the Secured Parties) (the “New Trustee”) has been made and accepted by the Lender and the new Trustee (as security trustee on behalf of the Secured Parties) shall have executed all deeds and documents as are necessary to effect such appointment and the transfer of the Lender’s rights and obligations under this Deed.

13.15Notices

13.15.1Any notice, demand or other communication required or permitted to be given or made under this Deed shall be addressed or sent as follows:

(a)if to the Lender to:

Address:	15260 Ventura Blvd., Suite 1800
	Shearman Oaks, CA 91403
Attention:	Vicky Regan
Fax No:	(818) 783-7984

(b)if to the Grantor, to:

Address: Arthur Cox Building

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	Earlsfort Centre
	Earlsfort Terrace
	Dublin 2
	Ireland
Attention:	David Ryan
Fax No:	+353 1 9012199

13.15.2Any notice, demand or other communication required or permitted to be given or made hereunder shall be validly given or made if delivered personally or if despatched by pre-paid letter post addressed as aforesaid or if sent by fax message to such fax number (if any) as may be specified as aforesaid and shall be deemed to be given or made:

(a)if delivered by hand - at the time of delivery; and

(b)if sent by post - two Business Days after the same shall have been posted.

13.16Non-Competition

13.16.1Until all the Secured Obligations have been unconditionally and irrevocably paid and discharged in full the Grantor shall not by virtue of any payment made, security realised or monies received or recovered under the Loan Documents or any security therefor for or on account of the liability of any third party:

(a)be subrogated to any rights, security or moneys held, received or receivable by the Lender or the Secured Parties (or any trustee or agent on their behalf) or be entitled to any right of contribution or indemnity; or

(b)claim, rank, prove or vote as a creditor of any other Loan Party or its estate in competition with the Lender (or any trustee or agent on its behalf); or

(c)receive, claim or have the benefit of any payment, distribution or security from or on account of any other Loan Party, or exercise any right of set-off as against any other Loan Party.

13.16.2The Grantor will hold in trust for and forthwith pay or transfer to the Lender any payment or distribution or benefit of security received by it contrary to the provision of this Clause 13.16.  If theGrantor exercises any right of set-off contrary to the above, it will forthwith pay an amount equal to the amount set off to the Lender.  

13.17Counterparts

This Deed may be executed in any number of counterparts and by the parties to this Deed on separate counterparts, each of which, when executed and delivered, shall constitute an original, but all the counterparts shall together constitute but one and the same instrument.

13.18Governing Law and Jurisdiction

13.18.1This Deed shall be governed by and construed in accordance with the laws of Ireland.

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13.18.2The Grantor hereby agrees for the exclusive benefit of the Lender that any legal action or proceeding (the "Proceedings") brought against it with respect to this Deed may be brought in the High Court in Ireland or such other competent Court of Ireland as the Lender may elect and the Grantor waives any objection to the Proceedings being taken in such courts whether on the grounds of venue or on the ground that the Proceedings have been brought in an inconvenient forum.  The Grantor undertakes to enter an unconditional appearance within 14 days after the completion of any service or process of any Proceedings.  The Grantor hereby consents to the service by post of any process issued in that jurisdiction.  Nothing herein shall affect the Lender's right to serve process in any other manner permitted by law.

13.18.3Nothing in this Clause shall limit the right of the Lender to take Proceedings to any other court or competent jurisdiction nor shall the taking of Proceedings in any or more jurisdictions preclude the taking of Proceedings in any other jurisdiction (whether concurrently or not).

IN WITNESS whereof the parties have executed and delivered this Deed on the date specified above.

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SCHEDULE  1

Scheduled Property

None at the date of this Deed.

36

SCHEDULE  2

PART 1

The Fixtures and Fittings

None at the date of this Deed.

PART 2

The Relevant Contracts

None at the date of this Deed.

PART 3

The Licences

None at the date of this Deed.

PART 4

The Shares

None at the date of this Deed.

PART 5

The Intellectual Property

None at the date of this Deed.

PART 6

The Security Accounts

None at the date of this Deed.

PART 7

The Book Debt Receivable Account

None at the date of this Deed.

PART  8

The Insurances

None at the date of this Deed.

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SCHEDULE3

PART 1

Form of Letters for Security Account

PART A

Notice to Account Bank

[On the letterhead of the Grantor]

To:[Account Bank]

[Date]

Dear Sirs

SecurityDeed dated [                      ] 2014(the "Security Deed")between (1) Rightside Domains Europe Limitedand (2)Silicon Valley Bank(acting as security trustee for the Secured Parties) (the “Lender”)

1.This letter constitutes notice to you that pursuant to the Security Deed we have charged (by way of a first fixed charge) in favour of the Lender all our right, title and interest in respect of any monies standing to the credit of the accounts maintained by us with you, more particular details of which are set out in the Schedule to this Notice (the "Accounts").

2.We irrevocably instruct and authorise you to:

2.1disclose to the Lender any information relating to any Account requested from you by the Lender;

2.2comply with the terms of any written notice or instruction relating to any Account received by you from the Lender;

2.3hold all sums standing to the credit of any Account to the order of the Lender; and

2.4pay or release any sum standing to the credit of any Account in accordance with the written instructions of the Lender.

3.We are not permitted to withdraw any amount from any Account without the prior written consent of the Lender.

4.We acknowledge that you may comply with the instructions in this letter without any further permission from us.

5.We enclose a copy of the SecurityDeed.

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6.The instructions in this letter may not be revoked or amended without the prior written consent of the Lender.

7.This letter is governed by Irish law.

8.Please confirm your agreement to the above by sending the attached acknowledgement to the Lenderat [                   ] with a copy to ourselves.

Yours faithfully

………………………………

(Authorised signatory)

RIGHTSIDE DOMAINS EUROPE LIMITED

Schedule

The Security Accounts

[Details]

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PART B

Acknowledgement of Security Account Bank

[On the letterhead of the Account Bank]

To:Silicon Valley Bank (as security trustee on behalf of the Secured Parties) (the “Lender”)

Copy:[Grantor]

[Date]

Dear Sirs

SecurityDeed dated [                      ] 2014(the "Security Deed")between (1) Rightside Domains Europe Limitedand (2) Silicon Valley Bank (as security trustee on behalf of the Secured Parties) (the “Lender”)

We confirm receipt from DMIH Limited (the "Grantor") of a notice (the "Notice") dated [                      ] 2014with respect to a charge under the terms of the Security Deed over all the right, title and interest of the Grantor to any amount standing to the credit of any of the Grantor's accounts with us (the "Accounts").

We confirm that we:

1.accept the instructions contained in the notice and agree to comply with the Notice;

2.have not received notice of the interest of any third party in any Account;

3.have neither claimed nor exercised, nor will claim or exercise, any security interest, set-off, counterclaim or other right in respect of any Account; and

4.will not permit any amount to be withdrawn from any Account without your prior written consent.

The Accounts maintained with us are:

[Specify accounts and account numbers]

This letter is governed by Irish law.

Yours faithfully

…………………………………

(Authorised signatory)

[Account Bank]

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PART 2

Forms of Letter for Contracts

PART A

Notice to Counterparty

To:[Contract party]

[Date]

Dear Sirs

SecurityDeed dated [                      ] 2014(the "Security Deed")between (1) Rightside Domains EuropeLimited and (2) Silicon Valley Bank(as security trustee on behalf of the Secured Parties)(the “Lender”)

1.This letter constitutes notice to you that under the SecurityDeed we have assigned by way of security to the Lenderall our right, title and interest in and to [insert details of Contracts or add a schedule of Contracts] (the "Contracts").

2.We confirm that:

2.1we will remain liable under the Contracts to perform all the obligations assumed by us under the Contracts; and

2.2none of theLender, its agents, any receiver or any other person will at any time be under any obligation or liability to you under or in respect of the Contracts.

3.We will also remain entitled to exercise all our rights, powers and discretions under the Contracts, and you should continue to give notices under the Contracts to us, unless and until you receive notice from the Lender to the contrary stating that the security has become enforceable.  In this event, all the rights, powers and discretions will be exercisable by, and notices must be given to, the Lender or as it directs.

4.Please note that we have agreed that we will not amend or waive any provision of or terminate the Contracts without the prior consent of the Lender.

5.This letter is governed by Irish law.

Please acknowledge receipt of this letter by sending the attached acknowledgement to the Lender at [                      ].

Yours faithfully

…………………………

(Authorised signatory)

RIGHTSIDE DOMAINS EUROPE LIMITED

41

PART B

Acknowledgement of Counterparty

To:Silicon Valley Bank

Copy:Rightside Domains Europe Limited

[Date]

Dear Sirs

We confirm receipt from Rightside Domains Europe Limited (the "Grantor") of a notice dated [                      ] (the "Notice") of an assignment on the terms of the SecurityDeed dated [                      ] 2014of all the Grantor's right, title and interest in and to [insert details of the Contracts] (the "Contracts").

We confirm that we will pay all sums due, and give notices, under the Contracts as directed in the Notice.

This letter is governed by Irish law.

Yours faithfully

……………………………..

(Authorised signatory)

[Counterparty]

42

PART 3

PART A

Notice of Assignment of Insurances

(for attachment by way of endorsement to the Insurance Policies)

To:[Insurer]

[Date]

We,  DMIH Limited hereby give notice that by a Security  Deed dated [               ], between (1)Rightside Domains Europe Limited and (2) Silicon Valley Bank(as security trustee on behalf of the Secured Parties)(the “Lender”), we have assigned to the Lenderthe policies of insurance more particular details of which are set out in the Schedule to this Notice (the "Policies") and all our interest (including the benefit of all money owing or to become owing to us in respect of the Policies together with all interest thereon).

We hereby irrevocably authorise and instruct you to issue a letter of undertaking, in the form attached, to the Lenderand to act on the instructions of the Lender in the manner provided in that letter without any further reference to or authorisation from us.

This letter shall be governed by Irish law.

Yours faithfully

…………………………

(Authorised signatory)

RIGHTSIDE DOMAINS EUROPE LIMITED

43

SCHEDULE

Policies

44

PART B

Letter of Undertaking

To:Silicon Valley Bank as security trustee on behalf of the Secured Parties (the “Lender”)

[Date]

Dear Sirs,

Letter of Undertaking

In accordance with an assignment of the insurance policies referred to in the Schedule to this letter (the "Policies") made by DMIHLimited (the "Grantor") we undertake:

1.to note your interest as loss payee on the Policies;

2.to disclose to you without any reference to or further authority from the Grantor such information relating to the Policies as you may at any time request;

3.not to release any of the Policies on request by the Grantor without your prior written consent;

4.following written notification from you of the occurrence of an Event of Default which is outstanding, to pay all claims payable under the policies of Insurance to you unless you otherwise agree in writing and save as obliged by law.

This letter shall be governed by Irish law.

Yours faithfully,

..............................
for and on behalf of

[Insurer]

45

SCHEDULE

Policies

46

PART 4

Form of notice to and acknowledgement from bank operating Book Debt Receivables Account

To:[insert name and address of Account Bank]

Dear Sirs

Re:	Account Holder: Rightside Domains Europe Limited (the "Grantor")
	Account No: (the "Book Debt Receivables Account")
	Account Branch: [insert branch address]

1.We give notice that, by a Security Deed dated 2014(the "Security Deed")between (1) the Grantor and (2) Silicon Valley Bank (the "Lender"),the Grantor has charged to the Lender all its present and future right, title and interest in and to:

1.1[the Book Debt Receivables, the Book Debt Receivables Account, all monies from time to time standing to the credit of the Book Debt Receivables Account and all additions to or renewals or replacements thereof (in whatever currency); and

1.2all monies standing to the credit of any other accounts from time to time maintained with you by the Grantor,]

(together the "Charged Accounts") and to all interest from time to time accrued or accruing on the Charged Accounts and all rights to repayment of any of the foregoing by you.

2.We advise you that, under the terms of the Security  Deed, we are not entitled to withdraw any monies from the Book Debt Receivables Accounts without first having obtained the prior written consent of the Lender.

3.We irrevocably authorise and instruct you from time to time:

3.1unless the Lender so authorises you, not to permit withdrawals from the Security Accounts;

3.2to hold all monies from time to time standing to the credit of the Charged Accounts to the order of the Lender;  

3.3to pay all or any part of the monies standing to the credit of the Charged Accounts to the Lender (or as it may direct) promptly following receipt of written instructions from the Lender to that effect; and

3.4to disclose to the Lender such information relating to the Grantor and the Charged Accounts as the Lender may from time to time request you to provide.

3.5[to pay all monies received by you for our account to (and only to) [specify account].]

4.We agree that you are not bound to enquire whether the right of the Lender to withdraw any monies from any Charged Account has arisen or be concerned with the propriety or regularity of

47

the exercise of that right or to be concerned with notice to the contrary or be concerned with or responsible for the application of any monies received by the Lender.

5.The provisions of this notice may only be revoked or amended with the prior written consent of the Lender. 

6.Please confirm by completing the enclosed copy of this notice and returning it to the Lender (with a copy to the Grantor) that:

6.1you agree to act in accordance with the provisions of this notice;

6.2you have not, at the date this notice is returned to the Lender, received notice of any assignment or charge of or claim to the monies standing to the credit of any of the Charged Accounts or the grant of any security or other interest over those monies in favour of any third party and you will notify the Lender promptly if you should do so in the future; and

6.3you do not now and will not in the future exercise any right to combine accounts or any rights of set-off or lien or any similar rights in relation to the monies standing to the credit of the Charged Accounts.

7.This notice (and any acknowledgement) shall be governed by and construed in accordance with the laws of Ireland.

Yours faithfully,

______________________________

for and on behalf of

RIGHTSIDE DOMAINS EUROPE LIMITED

Countersigned by

______________________________

for and on behalf of

[                      ]

48

[On Copy]

To:Silicon Valley Bank

as security trustee on behalf of the Secured Parties (the “Lender”)

[                      ]

Copy to:  Rightside Domains Europe Limited

We acknowledge receipt of the above notice. We confirm and agree:

(a)that the matters referred to in it do not conflict with the terms which apply to any Charged Account; and

(b)the matters set out in paragraphs 1 to 3 in the above notice.

_________________________

for and on behalf of

[Account Bank]

Dated: [                      ]

49

EXECUTION PAGE

Grantor

RIGHTSIDE DOMAINS EUROPE LIMITED:
GIVEN under the COMMON SEAL of RIGHTSIDE DOMAINS EUROPE LIMITED:	/s/ David Ryan
	Director
	Jacqui McGowan Smyth
	Director/Secretary For and on behalf of BRADWELL LIMITED

Security Trustee

Signed by and duly authorised on behalf of SILICON VALLEY BANK (as security trustee for the Secured Parties)	/s/ Ted Bell
	Authorised Signatory

WF-9453855.exv

50

EX-10.11

Exhibit 10.11

Dated this 1stday of August2014

BETWEEN

DMIH LIMITED

(as Chargor)

AND

SILICON VALLEY BANK

(as Lender)

CHARGE OVER SHARES IN

UNITED TLD HOLDCO LTD.

Conyers Dill & Pearman (Cayman) Limited

Attorneys at Law

Cayman Islands

NOTE:  This document will be subject to stamp duty in the Cayman Islands if executed in or brought into the Cayman Islands

TABLE OF CONTENTS

1	INTERPRETATION	3
2	CHARGOR’S REPRESENTATIONS AND WARRANTIES	6
3	CHARGOR’S COVENANTS	7
4	SECURITY	10
5	DEALINGS WITH CHARGED PROPERTY	11
6	PRESERVATION OF SECURITY	11
7	ENFORCEMENT OF SECURITY	13
8	RECEIVER	15
9	FURTHER ASSURANCES	16
10	INDEMNITIES	17
11	POWER OF ATTORNEY	18
12	EXPENSES	19
13	NOTICES	19
14	ASSIGNMENTS	21
15	RELEASE	21
16	CURRENCY	22
17	MISCELLANEOUS	22
18	LAW AND JURISDICTION	24

2

THIS CHARGE OVER SHARES is made on the 1stday of August 2014

BETWEEN:

(1) DMIH Limited a limited liability company incorporated under the laws of Ireland and having its registered office address atArthur Cox Building, Earslfort Centre,  Earlsfort Terrace,  Dublin 2, Co. Dublin, Ireland(the “Chargor”); and

AND:

(2) Silicon Valley Bank having its principal office address at 15260 Ventura Blvd., Suite 1800, Sherman Oaks, CA 91403,United States of America, as lender under the Credit Agreement (as defined below) (the “Lender”).

WHEREAS:

(A) By a credit agreement (the “Credit Agreement”) dated as of August 1, 2014 among Rightside Group, Ltd., Rightside Operating Co., and eNom, Inc. as the U.S. Borrowers, the Chargor, the Company (as defined below) and Rightside Domains Europe Limited as the Non-U.S. Borrowers and the Lender as Lender, the Lender has agreed to extend certain credit facilities to the Borrower, upon the terms and conditions specified in the Credit Agreement, in an aggregate amount not to exceed US$30,000,000, consisting of a revolving loan facility with a letter of credit sub-facility (in the aggregate available amount of US$15,000,000 as a sublimit of the revolving loan facility); and

(B) Pursuant to the Credit Agreement and, as security for the Non-U.S. Obligations (as defined below), the Chargor has agreed to charge, inter alia, its interest in all of the shares legally and beneficially owned by the Chargor in the Company.

NOW THIS CHARGE WITNESSES as follows:

1 INTERPRETATION

1.1 In this Charge, unless the context otherwise requires, the following words and expressions shall have the following meanings:

“Business Day”	has the meaning attributed to such term in the Credit Agreement;
“Charge”	means this share charge;

3

“Charged Property”	means all of the issued shares of the Company and all other shares in the Company from time to time legally or beneficially owned by the Chargor during the Security Period (together the “Charged Shares”) and all dividends or other distributions, interest and other moneys paid or payable after the date hereof in connection therewith and all interests in and all rights accruing at any time to or in respect of all or any of the Charged Sharesand all and any other property that may at any time be received or receivable by or otherwise distributed to the Chargor in respect of or in substitution for, or in addition to, or in exchange for, or on account of, any of the foregoing, including, without limitation, any shares or other securities resulting from the sub-division, consolidation, change, conversion or reclassification of any of the Charged Shares, or the reorganisation, merger or amalgamation of the Company with any other body corporate, or the occurrence of any event which results in the substitution or exchange of the Charged Shares;
“Company”	means United TLD Holdco Ltd., an exempted company incorporated with limited liability under the laws of the Cayman Islands (company registration number 266441), whose registered office address is at the offices of Maples Corporate Services Limited, Ugland House, South Church Street, George Town, PO Box 309, Grand Cayman KY1-1104, Cayman Islands;
“Discharge of Obligations” “Event of Default”	has the meaning set forth in the Credit Agreement, but for the purposes of this Charge refers only to the Non-U.S. Obligations;  has the meaning attributed to such term in the Credit Agreement;

4

“Non-U.S. Guarantee” “Non-U.S. Obligations”	means that certain unconditional Guarantee (Non-U.S. Entities) dated as of the date hereof by and among the Chargor, the Company, Rightside Domains Europe Limited and the other signatories added thereto from time to time in favour of the Lender; has the meaning set forth in the Non-U.S. Guarantee;
“Parties”	means the parties to this Charge collectively; “Party” means any one of them;
“Parties”	means the parties to this Charge collectively; “Party” means any one of them;
“Security Interest”	means any charge, mortgage, pledge, lien, security interest or other encumbrance, howsoever created or arising; and
“Security Period”	means the period commencing on the date of execution of this Charge and terminating upon discharge of the security created by this Charge by the release of this Charge by the Lender in accordance with Clause 15.

1.2 In this Charge unless the context otherwise requires:

(a) references to statutory provisions shall be construed as references to those provisions as amended or re-enacted or as their application is modified by other provisions from time to time and shall include references to any provisions of which they are re-enactments (whether with or without modification);

(b) references to clauses and schedules are references to clauses hereof and schedules hereto; references to sub-clauses or clauses are, unless otherwise stated, references to sub-clauses of the clauses hereof or clauses of the schedule in which the reference appears;

(c) references to the singular shall include the plural and vice versa and references to the masculine shall include the feminine and/or neuter and vice versa;

(d) references to persons shall include companies, partnerships, associations and bodies of persons, whether incorporated or unincorporated;

(e) references to assets include property, rights and assets of every description;

(f) references to any document are to be construed as references to such document as 5  

amended or supplemented from time to time including, without limitation any increase in the amount or change to the repayment period or other terms of the facilities provided under any Loan Document;

(g) an Event of Default is “continuing” if it has not been waived or cured pursuant to and in accordance with the provisions of the Credit Agreement; and

(h)capitalized terms used in this Charge but not otherwise defined shall bear the respective meanings given to them in the CreditAgreement.

2 CHARGOR’S REPRESENTATIONS AND WARRANTIES

2.1 The Chargor hereby represents and warrants to the Lender that:

(a) the authorised share capital of the Company is US$50,000 divided into 50,000shares with a par value of US$1.00 each;

(b) the issued share capital of the Company is US$1,000 divided into1,000 shares with a par value of US$1.00 each;

(c) all presently outstanding shares of the Company are duly authorized and validly issued, fully paid and non-assessable, and in each case such shares have been issued in full compliance with the requirements of all applicable securities laws and regulations and the constitutional documents of the Company;

(d) there are no outstanding options, warrants, rights (including conversion or pre-emptive rights and rights of first refusal) or other third party rights of any kind, proxy or shareholders agreement or agreements of any kind for the purchase or acquisition of the Company or any of its securities;

(e) the Chargor is a company duly organised, validly existing and in good standing under the laws of Ireland;

(f) the Chargor is the legal and beneficial owner of all of the Charged Property free from any Security Interest (other than those created by this Charge) and any options or rights of pre-emption;

(g) the Chargor has full power and authority (i) to be the legal and beneficial owner of the Charged Property, (ii) to execute and deliver this Charge and (iii) to comply with the provisions of, and perform all its obligations under, this Charge;

(h) this Charge constitutes the Chargor’s legal, valid and binding obligations enforceable against the Chargor in accordance with its terms except as such enforcement may be limited by any relevant bankruptcy, insolvency, administration or similar laws affecting creditors’ rights generally;

6

(i) the entry into and performance of this Charge by the Chargor and enforcement hereof by the Lender will not (i) contravene the terms of any agreement to which the Chargor is bound or to which the Charged Property is subject or the memorandum and articles of association of the Company; (ii) does not violate any law or regulation of any governmental or official authority; and (ii) is not contrary to any agreement, contract or other undertaking to which the Chargor is a party or which is binding upon the Chargor or any of its assets;

(j) all consents, licences, approvals and authorisations required in connection with the entry into, performance, validity and enforceability of this Charge have been obtained and are in full force and effect;

(k) there is no litigation pending or, to the knowledge of the Chargor, threatened in writing (whether or not the defence thereof or liabilities in respect thereof are covered by insurance) against or significantly affecting the Chargor, the Company or its shares;

(l) the Chargor is solvent, no steps have been taken or are being taken to appoint a receiver or manager to take over its assets or a liquidator to wind it up;and

(m) the foregoing representations and warranties are true and accurate as at the date hereof and will be true and correct throughout the continuance of this Charge with reference to the facts and circumstances subsisting from time to time.

3 CHARGOR’S COVENANTS

3.1 The Chargor hereby covenants with the Lender to pay all amounts, interest, expenses, claims, liabilities, losses, costs, duties, fees, charges or other moneys constituting the Non-U.S. Obligations at the times and in the manner specified in the Credit Agreement and/or any other relevant Loan Document.

3.2 The Chargor hereby covenants that:

(a) it will on the date hereof deliver to the Lender:

(i) the original share certificate(s), if any,and any other documents of title in relation to the Charged Shares;

(ii) a blank, signed and undated transfer in respect of the Charged Shares in the form set out in Schedule 1;

(iii) an executed and undated letter of resignation and related letter of authorisation from each director and each officer, if any,of the Company in the form set out in Schedule 2;

7

(iv) an irrevocable shareholder proxy signed by the Chargor in favour of the Lender in the form set out in Schedule 3;

(v) an undertaking signed by a director of the Company in the form set out in Schedule 4;  

(vi) a notice of charge over shares addressed by the Chargor to the Company in the form set out in Schedule 5 and acknowledged by the Company; and

(vii) a certified copy of the special resolution of the Company dated on or about the date hereofamending the restrictions on the transfer of shares in the articles of association of the Company in a  form acceptable to the Lender.

3.3 The Chargor hereby covenants that, until the Discharge of Obligations, it will forthwith:

(a) deliver to the Lender:

(i) all original share certificates, if any, and other documents of title relating to any shares in the Company acquired by the Chargor after the date of this Charge forthwith upon such acquisition;

(ii) blank, signed and undated transfer in respect of any shares in the Company acquired by the Chargor after the date of this Charge forthwith upon such acquisition; and

(iii) an executed and undated letter of resignation and related letter of authority for the Lender to date the same from each newly appointed director and officer of the Company forthwith upon such appointment;

(b) on demand of the Lender and at the expense of the Chargor, execute and deliver to the Lender or to such person or persons as the Lender may nominate such additional charge or charges of the Charged Property (or any part thereof) for the purpose of further securing discharge of all Non-U.S. Obligations, each such additional charge to be in such form as theLender may reasonably require; and

(c) on request of the Lender,  provide to the Lenderpromptly on receipt by the Chargor a copy of all notices, written consents, reports, accounts, circulars and other communications issued by the Company or by any third party in respect of the Charged Shares.

3.4 The Chargor covenants that it shall not, and shall ensue that the Company will not, without the prior consent in writing of the Lender:

(a) permit any person other than the Chargor, the Lender or any transferee nominated by the Lender on enforcement of this Charge to be the registered holder of any of 8  

the Charged Shares;

(b) assign, lease, license or grant any interest in the Charged Shares or agree to surrender or dispose of them (save as in accordance with this Charge or the Credit Agreement);

(c) permit any variation of the rights attaching to the Charged Shares, in a way which materially prejudices the value of the Charged Shares or otherwise jeopardises the security constituted by this Charge;

(d) take or permit any action which might result in an increase or reduction in the authorised or issued share capital of the Company, in a way which materially prejudices the value of the Charged Shares or otherwise jeopardises the security constituted by this Charge;

(e) exercise any voting or other rights in a way which may materially prejudice the value of the Charged Shares or otherwise materially jeopardise the security constituted by this Charge over them;

(f) effect or permit the Company to be continued to another jurisdiction outside of the Cayman Islands;

(g) effect or permit any scheme of arrangement, merger, consolidation, amalgamation or other reorganisation applicable to the Company;

(h) take any action or cause any action to be taken that shall submit the Company to any proceeding under any applicable law involving bankruptcy, insolvency, reorganization or other laws affecting the rights of creditors generally; or

(i) save in accordance with clauses  3.2(a)(vii) and  9.2,permit any amendment to the memorandum or articles of association of the Company, in a way which materially prejudices the value of the Charged Shares or otherwise jeopardises the security constituted by this Charge.

3.5 The Chargor hereby covenants that during the Security Period it will remain the legal and the beneficial owner of the Charged Property (subject only to the Security Interests hereby created and except as permitted under the Credit Agreement) and that it will notwithout the prior consent in writing of the Lender:

(a) create or suffer the creation of any Security Interest (other than that created by this Charge) on or in respect of the whole of any part of the Charged Property or any of its interest therein;

(b) sell, assign, transfer or otherwise dispose of any of its interest in the Charged Property; or

9

(c) permit the register of members of the Company to be maintained outside of the Cayman Islands.

3.6 The Chargor hereby further covenants that during the Security Period it shall procure that the Company shall not, without the prior consent in writing of the Lender and except as permitted under the Credit Agreement:

(a) create or permit to subsist any Security Interest upon the whole or any of its assets;

(b) register any transfer of the Charged Shares to any person (except to the Lender or its nominees pursuant to the provisions of this Charge);

(c) issue any replacement share certificates in respect of any of the Charged Shares;

(d) continue its existence under the laws of any jurisdiction other than the Cayman Islands;

(e) do anything which might prejudice its status as an exempted company;

(f) issue, allot or grant warrants or options with respect to any additional shares;

(g) exercise any rights of forfeiture over any of the Charged Shares; or

(h) purchase, redeem, otherwise acquire, cancel, sub-divide, amalgamate, merge, reclassify or otherwise restructure any of the Charged Property.

4SECURITY

4.1In consideration of the Lender making the Facility available to the Company and as a continuing security for the due and prompt payment, performance and discharge of the Non-U.S. Obligations, the Chargor as legal and beneficial owner hereby:

(a)charges in favour of the Lender by way of a first fixed charge the Charged Shares;

(b)charges in favor of the Lender by way of first fixed charge all benefits present and future, actual and contingent accruing in respect of the Charged Property and all the Chargor’s right, title and interest to and in the Charged Property (to the extent not effectively charged under Sub-Clause (a)); and

(c)assigns, and agrees to assign, absolutely by way of security in favour of the Lender all its rights, present and future, actual and contingent, relating to any of the Charged Property (to the extent not effectively charged under Sub-Clause (a)).

4.2The Chargor shall remain liable to perform all the obligations assumed by it in relation to the Charged Property and the Lender shall be under no obligation of any kind whatsoever in respect thereof or be under any liability whatsoever in the event of any failure by the

10

Chargor to perform its obligations in respect thereof.

4.3If the Lender at any time receives or is deemed to have received notice of any subsequent Security Interest affecting all or part of the Charged Property or any assignment of transfer of the Charged Property which is prohibited by the terms of this Charge, all payments thereafter by or on behalf of the Chargor to the Lendere shall be treated as having been credited to a new account of the Chargor and not as having been applied in reduction of the Non-U.S. Obligations as at the time when the Lender receives such notice.

5DEALINGS WITH CHARGED PROPERTY

5.1Unless and until an Event of Default has occurred and is continuing and the Lender shall have given written notice to the Chargor of the Lender’s intention to exercise its rights pursuant to Clause 7.1:

(a)the Chargor shall be entitled to exercise all voting and/or consensual powers pertaining to the Charged Property or any part thereof for all purposes not inconsistent with the terms of this Chargeand/or any other Loan Document;

(b)the Chargor shall be entitled to receive and retain any dividends, interest or other moneys or assets accruing on or in respect of the Charged Property or any part thereof;and

(i) the Chargor shall be entitled to receive all notices pertaining to the Charged Shares.

5.2The Chargor shall pay all calls, instalments or other payments, and shall discharge all other obligations, which may become due in respect of any of the Charged Property and upon the occurrence of an Event of Default which is continuing, the Lender may if it thinks fit make such payments or discharge such obligations on behalf of the Chargor.  Any sums so paid by the Lender in respect thereof shall be repayable on demand and pending such repayment shall constitute part of the Non-U.S. Obligations.

6PRESERVATION OF SECURITY

6.1It is hereby agreed and declared that:

(a)the Security Interest created by this Charge shall be held by the Lender as a continuing security for the payment and discharge of the Non-U.S. Obligations and the security so created shall not be satisfied by any intermediate payment or satisfaction of any part of the Non-U.S. Obligations;

(b)the Security Interest so created shall be in addition to and shall not in any way be prejudiced or affected by any Security Interest created pursuant to any other Loan Document;

11

(c)the Lender shall not be bound to enforce any other security before enforcing the security created by this Charge;

(d)no delay or omission on the part of the Lender in exercising any right, power or remedy under this Charge shall impair such right, power or remedy or be construed as a waiver thereof nor shall any single or partial exercise of any such right, power or remedy preclude any further exercise thereof or the exercise of any other right, power or remedy.  The rights, powers and remedies herein provided are cumulative and not exclusive of any rights, powers and remedies provided by law and may be exercised from time to time and as often as the Lender may deem expedient; and

(e)any waiver by the Lender of any terms of this Charge shall only be effective if given in writing and then only for the purpose and upon the terms for which it is given.

6.2The rights of the Lender under this Charge and the securityhereby constituted shall not be affected by any act, omission, matter or thing which, but for this provision, might operate to impair, affect or discharge such rights and security, in whole or in part, including without limitation, and whether or not known to or discoverable by the Company, the Chargor, the Lender or any other person:

(a) any time or waiver granted to or composition with the Company or any other person;

(b) the taking, variation, compromise, renewal or release of or refusal or neglect to perfect or enforce any rights, remedies or securities against the Company or any other person;

(c) any legal limitation, disability, incapacity or other circumstances relating to the Company or any other person;

(d) any amendment or supplement to any Loan Document or any other document or security;

(e) the dissolution, liquidation, merger, consolidation, reconstruction or reorganisation of the Company or any other person; or

(f) the unenforceability, invalidity or frustration of any obligations of the Company or any other person under any Loan Document or any other document or security.

6.3Until the Non-U.S. Obligations have been unconditionally and irrevocably satisfied and discharged in full to the satisfaction of the Lender, the Chargor shall not by virtue of any payment made hereunder on account of the Non-U.S. Obligations or by virtue of any enforcement by the Lender of its rights under, or the securityconstituted by, this Charge

12

or by virtue of any relationship between or transaction involving, the Chargor and the Company (whether such relationship or transaction shall constitute the Chargor a creditor of the Company, a guarantor of the obligations of the Company or a party subrogated to the rights of others against the Company or otherwise howsoever and whether or not such relationship or transaction shall be related to, or in connection with, the subject matter of this Charge):

(a) exercise any rights of subrogation in relation to any rights, security or moneys held or received or receivable by the Lender or any person;

(b) exercise any right of contribution from any co-surety liable in respect of such moneys and liabilities under any other guarantee, security or agreement;

(c) exercise any right of set-off or counterclaim against the Company or any such co-surety;

(d) receive, claim or have the benefit of any payment, distribution, security or indemnity from the Company or any such co-surety; or

(e) unless so directed by the Lender (when the Chargor will prove in accordance with such directions), claim as a creditor of the Company or any such co-surety in competition with the Lender.

6.4The Chargor shall hold in trust for the Lender and forthwith pay or transfer (as appropriate) to the Lender any such payment (including an amount equal to any such set-off), distribution (other than such dividend or distribution payments described in clause5.1(b))or benefit of such security, indemnity or claim in fact received by it.

6.5Until the Non-U.S. Obligations have been unconditionally and irrevocably satisfied and discharged in full to the satisfaction of the Lender, the Lender may at any time keep in a separate account or accounts (without liability to pay interest thereon) in the name of the Lender for as long as it may think fit, any moneys received, recovered or realised under this Charge or under any other guarantee, security or agreement relating in whole or in part to the Non-U.S. Obligations without being under any immediate obligation to apply the same or any part thereof in or towards the discharge of such amount, provided that the Lender shall be obliged to apply amounts standing to the credit of such account or accounts once the aggregate amount held by the Lender in any such account or accounts is sufficient to satisfy the outstanding amount of the Non-U.S. Obligations in full.

7ENFORCEMENT OF SECURITY

7.1Upon the occurrence and during the continuance of an Event of Default, the security hereby constituted shall become immediately enforceable and the Lender may, at any time, without notice to, or consultation with, or the consent of, the Chargor:

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(a) solely and exclusively exercise all voting and/or consensual powers pertaining to the Charged Property or any part thereof and may exercise such powers in such manner as the Lender may think fit; and/or

(b) remove the then existing directors and officers (with or without cause) by dating and presenting the undated, signed letters of resignation delivered pursuant to this Charge; and/or

(c) receive and retain all dividends, interest, distributions or other moneys or assets accruing on or in respect of the Charged Property or any part thereof, such dividends, interest, distributions or other moneys or assets to be held by the Lender, until applied in the manner described in clause 7.4, as additional security charged under and subject to the terms of this Charge and any such dividends, interest, distributions or other moneys or assets received by the Chargor after such time shall be held in trust by the Chargor for the Lender and paid or transferred to the Lender on demand; and/or

(d) sell, transfer, grant options over or otherwise dispose of the Charged Property or any part thereof at such place and in such manner and at such price or prices as the Lender may deem fit, and thereupon the Lender shall have the right to deliver, assign and transfer in accordance therewith the Charged Property so sold, transferred, granted options over or otherwise disposed of; and/or

(e) complete any undated blank share transfer forms of all or any part of the Charged Property by dating the same and/or inserting its name or the name of its nominee as transferee.

7.2The Lender shall not be obliged to make any enquiry as to the nature or sufficiency of any payment received by it under this Charge or to make any claim or to take any action to collect any moneys assigned by this Charge or to enforce any rights or benefits assigned to the Lender by this Charge or to which the Lender may at any time be entitled hereunder.

7.3Upon any sale of the Charged Property or any part thereof by the Lender the purchaser shall not be bound to see or enquire whether the Lender’s power of sale has become exercisable in the manner provided in this Charge and the sale shall be deemed to be within the power of the Lender, and the receipt of the Lender for the purchase money shall effectively discharge the purchaser who shall not be concerned with the manner of application of the proceeds of sale or be in any way answerable therefor.

7.4All moneys received by the Lender pursuant to this Charge shall be held by it upon trustand shall be applied in the manner provided for in Section 8.3 of the Credit Agreement.

7.5Neither the Lender nor its agents, managers, officers, employees, delegates or advisers

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shall be liable for any claim, demand, liability, loss, damage, cost or expense incurred or arising in connection with the exercise or purported exercise of any rights, powers and discretions hereunder in the absence of fraud ordishonesty and in no event shall the Chargee be liable for any consequential damages.

7.6The Lender shall not by reason of the taking of possession of the whole or any part of the Charged Property or any part thereof be liable to account as mortgagee-in-possession or for anything except actual receipts or be liable for any loss upon realisation or for any default or omission for which a mortgagee-in-possession might be liable.

7.7The Chargor authorises the Lender (but the Lender shall not be obliged to exercise such right) after the occurrence of an Event of Defaultwhich is continuing to set-off against the Non-U.S. Obligations any amount or other obligation (contingent or otherwise) owing by the Lender to the Chargor.

8RECEIVER

8.1At any time on and from the occurrence of an Event of Default which is continuing, the Lender may, without notice to the Chargor, appoint one or more persons to be a Receiver (the “Receiver”) in relation to the Charged Property.

8.2Where the Lender appoints two or more persons as Receiver, the Receivers may act jointly or independently.

8.3The Lender may remove any Receiver it appoints and appoint another person or other persons as Receiver or Receivers, either in the place of the person removed (or who has otherwise ceased to act) or to act jointly with a Receiver or Receivers.

8.4In addition to all other rights or powers vested in the Lender hereunder or by statute or otherwise, the Receiver may take such action in relation to the enforcement of this Charge to:

(a) take possession of, redeem,collect and get in all or any part of the Charged Property;

(b) raise or borrow money and grant security therefor over all or any part of the Charged Property;

(c) appoint an attorney or accountant or other professionally qualified person to assist him in the performance of his functions;

(d) do all acts and to execute in the name and on behalf of the Chargor any document or deed in respect of all or any part of the Charged Property;

(e) in the name of the Chargor or in his own name, bring, prosecute, enforce, defend 15  

and abandon applications, claims, disputes, actions, suits and proceedings in connection with all or any part of the Charged Property and to submit to arbitration, negotiate, compromise and settle any such applications, claims, disputes, actions, suits or proceedings;

(f) sell, call in, collect and convert to money the Charged Property or any of it at such place and in such manner and at such price or prices as he shall think fit;

(g) exercise any powers, discretion, voting or other rights or entitlements in relation to the Charged Property and generally to carry out any other action which he may in his sole discretion deem appropriate in relation to the enforcement of this Charge;

(h) make any arrangement or compromise which he shall think expedient; and

(i) do all such other acts and things as may be considered to be incidental or conducive to any of the matters or powers aforesaid and which the Receiver lawfully may or can do as agent for the Chargor.

8.5Every Receiver shall, so far as it concerns responsibility for his acts, be deemed to be an agent of the Chargor, which shall be solely responsible for his acts and defaults and for the payment of his remuneration and no Receiver shall at any time act as agent for the Lender.

8.6Every Receiver shall be entitled to remuneration for his services at a rate to be fixed by agreement between him and the Lender (or, failing such agreement, to be fixed by the Lender) appropriate to the work and responsibilities involved, upon the basis of current industry practice.

8.7To the fullest extent permissible under law, the Lender may exercise any right or power that the Receiver may exercise in relation to the enforcement of this Charge.

8.8The Lender shall have no liability or responsibility to the Chargor arising out of the exercise or non-exercise of the powers conferred on it by the above Clause.

8.9The appointment of a Receiver shall not preclude the Lender from making any subsequent appointment of a Receiver over all or any of the Charged Property over which a Receiver has not previously been appointed or has ceased to act.

9FURTHER ASSURANCES

9.1The Chargor shall execute and do all such assurances, acts and things as the Lender in its absolute discretion may require for:

(a) perfecting, protecting or ensuring the priority of the Security Interesthereby 16  

created (or intended to be created);

(b) preserving or protecting any of the rights of the Lender under this Charge;

(c) ensuring that the security constituted by this Charge and the covenants and obligations of the Chargor under this Charge shall inure to the benefit of any assignee of the Lender;

(d) facilitating the appropriation or realisation of the Charged Property or any part thereof; or

(e) exercising any power, authority or discretion vested in the Lender under this Charge,

in any such case forthwith upon demand by the Lender and at the expense of the Chargor.

9.2Without limitation to the generality of clause 9.1, the Chargor covenants with the Lender that it will on demand of the Lenderuse its best efforts toprocure any amendment to the memorandum and articles of association of the Company necessary or, in the opinion of the Lender(acting reasonably) desirable, in order to give effect to the terms of this Charge or any documents or transactions provided for herein.

9.3 The Chargor shall provide such assurances and do all acts and things the Receiver may in his absolute discretion require for the purpose of exercising the powers (or giving effect to the exercise of the powers) conferred on the Receiver hereunder and the Chargor hereby irrevocably appoints the Receiver to be the lawful attorney in fact of the Chargor to do any act or thing and to exercise all the powers of the Chargor for the purpose of exercising the powers (or giving effect to the exercise of the powers) conferred on the Receiver hereunder.

10INDEMNITIES

10.1The Chargor will indemnify and save harmless the Lender, the Receiver and each agent or attorney appointed under or pursuant to this Charge from and against any and all expenses, claims, liabilities, losses, taxes, costs, duties, fees and charges properly and reasonably suffered, incurred or made by the Lender, the Receiver or such agent or attorney:

(a) in the exercise or purported exercise of any rights, powers or discretions vested in them pursuant to this Charge or by law;

(b) in the preservation or enforcement of the Lender’s rights under this Charge or the priority thereof; or

(c) on the release of any part of the Charged Property from the security created by 17  

this Charge,

and the Lender, the Receiver or such agent or attorney may retain and pay all sums in respect of the same out of money received under the powers conferred by this Charge.  All amounts recoverable by the Lender, the Receiver or such agent or attorney or any of them shall be recoverable on a full indemnity basis.

10.2If, under any applicable law or regulation, and whether pursuant to a judgment being made or registered against the Chargor or the bankruptcy or liquidation of the Chargor or for any other reason any payment under or in connection with this Charge is made or falls to be satisfied in a currency (the “Payment Currency”) other than the currency in which such payment is due under or in connection with this Charge (the “Contractual Currency”), then to the extent that the amount of such payment actually received by the Lender when converted into the Contractual Currency at the rate of exchange, falls short of the amount due under or in connection with this Charge, the Chargor, as a separate and independent obligation, shall indemnify and hold harmless the Lender against the amount of such shortfall.  For the purposes of thisClause,  “rate of exchange” means the rate at which the Lender is able on or about the date of such payment to purchase the Contractual Currency with the Payment Currency and shall take into account any premium and other costs of exchange with respect thereto.

11POWER OF ATTORNEY

11.1The Chargor, by way of security and in order more fully to secure the performance of its obligations hereunder,  hereby irrevocably appoints the Lender, each director and officer of the Lender and the persons deriving title under it jointly and also severally to be its attorney:

(a) to execute and complete in favour of the Lender or its nominees or of any purchaser any documents which the Lender may from time to time require for perfecting its title to or for vesting any of the assets and property hereby charged or assigned in the Lender or its nominees or in any purchaser and to give effectual discharges for payments;

(b) to take and institute on non‑payment (if the Lender in its sole discretion so decides) all steps and proceedings in the name of the Chargor or of the Lender for the recovery of such moneys, property and assets hereby charged and to agree accounts;

(c) to act as the Chargor’s corporate representative (and/or to appoint any officer or nominee of the Lender for such purpose) to represent the Chargor at any general meeting of the members of the Company and to sign any resolution in writing of the members of the Company or to requisition or convene general meetings of the Company or to waive or consent to short notice of such in that capacity;

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(d) to make allowances and give time or other indulgence to any surety or other person liable;

(e) otherwise generally to act for it and in its name and on its behalf; and

(f) to sign, execute, seal and deliver and otherwise perfect and do any such legal assignments and other assurances, charges, authorities and documents over the moneys, property and assets hereby charged, and all such deeds, instruments, acts and things (including, without limitation, those referred to in clause 9) which may be required for the full exercise of all or any of the powers conferred or which may be deemed proper on or in connection with any of the purposes aforesaid,

provided that, unless and until the occurrence of an Event of Default which is continuing, the Lender may not exercise any powers pursuant to this appointment.

11.2The power hereby conferred shall be a general power of attorney and the Chargor hereby ratifies and confirms and agrees to ratify and confirm any instrument, act or thing which any such attorney may execute or do.  In relation to the power referred to herein, the exercise by the Lender of such power shall be conclusive evidence of its right to exercise the same.

12EXPENSES

12.1The Chargor shall pay to the Lender on demand all reasonable and documented costs, fees and expenses (including, but not limited to,reasonable legal fees and expenses) and taxes thereon incurred by the Lender or for which the Lender may become liable in connection with:

(a) the negotiation, preparation and execution of this Charge;

(b) the preserving or enforcing of, or attempting to preserve or enforce, any of its rights under this Charge or the priority hereof;

(c) any variation of, or amendment or supplement to, any of the terms of this Charge; and/or

(d) any consent or waiver required from the Lender in relation to this Charge,

and in any case referred to in sub-clause (c) and (d) regardless of whether the same is actually implemented, completed or granted, as the case may be.

12.2The Chargor shall pay promptly any stamp, documentary and other like duties and taxes to which this Charge may be subject or give rise and shall indemnify the Lender on demand against any and all liabilities with respect to or resulting from any delay or omission on the part of the Chargor to pay any such duties or taxes.

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13NOTICES

13.1Any notice required to be given hereunder shall be in writing in the English language and shall be served by sending the same by prepaid recorded post, facsimile or by delivering the same by hand to the address of the Party or Parties in question as set out below (or such other address as such Party or Parties shall notify the other Parties of in accordance with this Clause). Any notice sent by post as provided in this Clause shall be deemed to have been served five Business Days after despatch and any notice sent by facsimile as provided in this Clause shall be deemed to have been served at the time of despatch and in proving the service of the same it will be sufficient to prove in the case of a letter that such letter was properly stamped, addressed and placed in the post; and in the case of a facsimile that such facsimile was duly despatched to a current facsimile number of the addressee.

Chargor:

Name:DMIH Limited

Address:

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

United States of America

Attention:  Tracy Knox, Chief Financial Officer
Facsimile No.: 
Telephone No.: (425) 298-2336
E-Mail: tracy.knox@rightside.co

Lender:

Name:Silicon Valley Bank

Address:

15260 Ventura Blvd., Suite 1800
Sherman Oaks, CA 91403
United States of America

Attention:  Vicky Regan
Facsimile No.:  (818) 783-7984

Telephone No.: (818) 382-2617
E-Mail:vregan@svb.com,  

with a copy (not constituting notice) to:

Sidley Austin LLP

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1001 Page Mill Road, Bldg. 1
Palo Alto, CA 94304
Attention:  Pamela J. Martinson
Phone:  (650) 565-7044
Facsimile:  (650) 565-7100

E-Mail:  pmartinson@sidley.com

14ASSIGNMENTS

14.1This Charge and all non-contractual obligations arising out of or in connection with it shall be binding upon and shall inure to the benefit of the Chargor and the Lender and each of their respective successors and (subject as hereinafter provided) assigns and transferees and references in this Charge to any of them shall be construed accordingly.

14.2The Chargor may not assign or transfer all or any part of its rights and/or obligations under this Charge without the prior written consent of the Lender.

14.3The Lender mayassign or transfer all or any part of its rights or obligations under this Charge to any assignee or transferee and shall notify the Chargor promptly following any such assignment or transfer.

15RELEASE

15.1Upon the Lender being satisfied that the Non-U.S. Obligations have been unconditionally and irrevocably paid and discharged in full, and following a written request therefor from the Chargor, the Lender will, subject to being indemnified to its reasonable satisfaction for the costs and expenses incurred by the Lender in connection therewith, release the security constituted by this Charge.

15.2Any settlement or discharge under this Charge between the Lender and the Chargor shall be conditional upon no security or payment to the Lender by the Company or the Chargor or any other person being avoided or set-aside or ordered to be refunded or reduced by virtue of any provision or enactment relating to bankruptcy, insolvency, administration or liquidation for the time being in force and, if such condition is not satisfied, the Lender shall be entitled to recover from the Chargor on demand the value of such security or the amount of any such payment as if such settlement or discharge had not occurred.

15.3Any receipt, release or discharge of any Security Interest created by this Charge or of any liability arising under this Charge may be given by the Lender in accordance with the provisions of this Charge and shall not release or discharge the Chargor from any liability owed to the Lender for the same or any other monies which may exist independently of this Charge.  Where such receipt, release or discharge relates to only part of the Non-U.S. Obligations such receipt, release or discharge shall not prejudice or affect any other part of the Non-U.S. Obligations or any of the rights and remedies of the Lender under this Charge or any of the obligations of the Chargor under this Charge.

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15.4 The Lendershall, following the release of the Security Interest and discharge of the obligations of the Chargor under this Charge, provide written confirmation of such release and discharge to the Chargor.

15.4The security constituted by this Charge shall be continuing and shall not be considered as satisfied or discharged by any intermediate payment or settlement of the whole or any part of the Non-U.S. Obligations or any other matter or thing whatsoever and shall be binding until all the Non-U.S. Obligations have been unconditionally and irrevocably paid and discharged in full in accordance with the terms of this Charge.

15.5 This Charge is in addition to and shall not merge with or otherwise prejudice or affect any banker’s lien, right to combine and consolidate accounts, right of set-off or other contractual or other right or remedy, or any guarantee, lien, pledge, bill, note, charge or other security now or hereafter held by or available to the Lender.

16. CURRENCY

16.1 For the purpose of, or pending the discharge of, any of the Non-U.S. Obligations, the Lender may, in its sole discretion, convert any moneys received, recovered, or realised in any currency under this Charge (including the proceeds of any previous conversion under this Clause) from their existing currency or denomination into any other at such rate or rate of exchange and at such time as the Lender thinks fit.

16.2 No payment to the Lender (whether under any judgment of a court or otherwise) shall discharge the Non-U.S. Obligations in respect of which it was made unless and until the Lender shall have received payment in full in the currency in which such Non-U.S. Obligations were incurred and, to the extent that the amount of any such payment shall on actual conversion into such currency fall short of such Non-U.S. Obligations expressed in that currency, the Lender shall have a further separate cause of action against the Chargor and shall be entitled to enforce that cause of action and this Charge to recover the amount of the shortfall. 

17.MISCELLANEOUS

17.1The Lender, at any time and from time to time, may delegate by power of attorney or in any other manner to any person or persons all or any of the powers, authorities and discretions which are for the time being exercisable by the Lender under this Charge in relation to the Charged Property or any part thereof.  Any such delegation may be made upon such terms and be subject to such regulations as the Lender may think fit.  The Lender shall not be in any way liable or responsible to the Chargor for any loss or damage arising from any act, default, omission or misconduct on the part of any such delegate provided the Lender has acted reasonably in selecting such delegate.

17.2All sums payable by the Chargor under this Charge shall be paid without any set off,

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counterclaim, withholding or deduction whatsoever unless required by law in which event the Chargor will, simultaneously with making the relevant payment under this Charge,pay to the Lender such additional amount as will result in the receipt by the Lender of the full amount which would otherwise have been receivable and will supply the Lender promptly with evidence satisfactory to the Lender that the Chargor has accounted to the relevant authority for the sum withheld or deducted.

17.3No delay or omission on the part of the Lender in exercising any right or remedy under this Charge shall impair that right or remedy or operate as or be taken to be a waiver of it nor shall any single, partial or defective exercise of any such right or remedy preclude any other or further exercise under this Charge of that or any other right or remedy.

17.4The Lender’s rights, powers and remedies under this Charge are cumulative and are not, nor are they to be construed as, exclusive of any rights, powers or remedies provided by law or otherwise and may be exercised from time to time and as often as the Lender deems expedient.

17.5If at any time any one or more of the provisions of this Charge is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions of this Charge nor the legality, validity or enforceability of such provision under the law of any other jurisdiction shall be in any way affected or impaired as a result.

17.6Any statement, certificate or determination of the Lender as to the Non-U.S. Obligations or (without limitation) any other matter provided for in this Charge shall, in the absence of manifest error, be conclusive and binding on the Chargor.

17.7The Chargor shall at all times maintain an agent for service of process in the Cayman Islands.  Such agent shall be the Company, with an address of c/o the offices of Maples Corporate Services Limited, Ugland House, South Church Street, PO Box 309, Grand Cayman KY1-1104, Cayman Islands, and any writ, judgment or other notice of legal process shall be sufficiently served on the Chargor if delivered to such agent at its address set out above.  The Chargor undertakes not to revoke any authority of above agent and if, for any reason, such agent no longer serves as agent of the Chargor to receive service of process the Chargor shall promptly appoint another such agent and advise the Lender of the new agent’s name and address for service.

17.8The Chargor shall be deemed to be a principal debtor and the sole, original and independent obligor for the Non-U.S. Obligations and the Security Interest created by this Charge shall be deemed to be a principal security for the Non-U.S. Obligations.  The liability of the Chargor under this Charge shall not be discharged, impaired or otherwise affected by any circumstance, act, omission, matter or thing which but for this provision might operate to reduce, release, prejudice or otherwise exonerate the Chargor from its obligations under the Loan Documents in whole or in part, including without limitation

23

and whether or not known to the Chargor, the lender or any other person any variation (however fundamental and whether or not involving any increase in the liability of the Chargor or any other obligor thereunder) or replacement of any Loan Documents or any other document or security so that the Chargor’s obligations under this Charge remain in full force and effect and that this Charge shall be construed accordingly as if there were no such circumstance, act, omission, matter or thing.

17.9 This Charge, including its Schedules, contains the whole agreement between the Parties in respect of the subject matter of this Charge. 

17.10No variations of this Charge shall be effective unless made in writing and signed by each of the Parties.

17.11The headings in this Charge are inserted for convenience only and shall not affect the construction of this Charge.

17.12This Charge may be executed in counterparts each of which when executed and delivered shall constitute an original but all such counterparts together shall constitute one and the same instrument.

17.13If any of the clauses, sub-clauses, conditions, covenants or restrictions of this Charge or any deed or document emanating from it shall be found to be void but would be valid if some part thereof were deleted or modified, then such clause,sub-clause, condition, covenant or restriction shall apply with such deletion or modification as may be necessary to make it valid and effective.

17.14Sections 8 and 19(3) of the Electronic Transactions Law (2003 Revision) of the Cayman Islands shall not apply to this Charge.      

18LAW AND JURISDICTION

18.1This Charge shall be governed by and construed in accordance with the laws of the Cayman Islands and the Parties hereby irrevocably submit to the non-exclusive jurisdiction of the courts of the Cayman Islands, provided that nothing in this Clause shall affect the right of the Lender to serve process in any manner permitted by law or limit the right of the Lender to take proceedings with respect to this Charge against the Chargor in any jurisdiction nor shall the taking of proceedings with respect to this Charge in any jurisdiction preclude the Lender from taking proceedings with respect to this Charge in any other jurisdiction, whether concurrently or not.

IN WITNESS whereof the Parties have caused this Charge to be duly executed (as a Deed in the case of the Chargor) and delivered the day and year first before written.

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EXECUTED as a DEEDand DELIVERED)

by DMIH Limited, in the presence of:-)____/s/ Rick Danis

Witness  __/s/ Elizabeth Lee

Name     __Elizabeth Lee

EXECUTED and DELIVERED)

by Silicon Valley Bank)

)____/s/ Ted Bell

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SCHEDULE 1

SHARE TRANSFER FORM

The undersigned, DMIH Limited, (the “Transferor”) for value received, receipt and sufficiency of which is hereby acknowledged, hereby transfers to ______________________________, of ______________________________  (the “Transferee”), the _____ shares standing in its name in the company called United TLD Holdco Ltd. to hold the same unto the Transferee.

Signed by the Transferor

acting by:

_______________________

DMIH Limited

Dated this _________________

Signed by the Transferee

acting by:

_______________________

[Name]

Dated this ___________

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SCHEDULE 2

LETTER OF RESIGNATION

To:United TLD Holdco Ltd.

I, [Name of Director], hereby tender my resignation as a Director of United TLD Holdco Ltd. (“the Company”) with effect from the date hereof and confirm that I have no claims against the Company whether for compensation for loss of office, arrears of pay or otherwise.

____________________

[Name]

Director

Date:  _______________

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AUTHORITY TO DATE LETTER OF RESIGNATION

TO:Silicon Valley Bank (the “Lender”)

You are hereby authorisedto complete and date the letter of resignation I have deposited with you today in respect of my directorship of United TLD Holdco Ltd. by dating the same at any time after an Event of Default (as defined in the Share Charge entered into between DMIH Limited and the Lender dated[              ] 2014 (as the same may be amended from time to time))has occurred which is continuing.

____________________

[Name]

[Director]

Date:______________2014

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SCHEDULE 3

IRREVOCABLE PROXY

The undersigned,  DMIH Limited (the "Shareholder"), being the legal and beneficial owner of all of the issued shares of United TLD Holdco Ltd., a Cayman Islands exempted company (the "Company"), hereby appoints Silicon Valley Bank, as lender (the "Proxy Holder") the true and lawful attorney, proxy and representative and proxy of the Shareholder for and in the Shareholder's name, place and stead to attend all meetings of the shareholders of the Company and to vote at a meeting any and all shares in the Company at the time standing in the Shareholder's name and to exercise all consensual rights in respect of such shares (including without limitation giving or withholding written consents of shareholders and calling special general meetings of shareholders) upon the occurrence of an Event of Default (having the meaning assigned in the ShareCharge and entered into between the Shareholder and the Proxy Holder dated [     ] 2014 (the “Share Charge”)) which is continuing.

The Shareholder hereby affirms that this proxy is given pursuant to the Share Charge.  THIS PROXY IS COUPLED WITH AN INTEREST AND IS IRREVOCABLE.

The Shareholder hereby ratifies and confirms and undertakes to ratify and confirm all that the Proxy Holder may lawfully do or cause to be done by virtue hereof.

If at any time this proxy shall for any reason be ineffective or unenforceable or fail to provide the Lender with the rights or the control over the Shareholder's shares of the Company purported to be provided herein, the Shareholder shall execute a replacement instrument which provides the Lender with substantially the same control over the Company as contemplated herein.  This irrevocable proxy shall be governed by the laws of the Cayman Islands and the Shareholder irrevocably submits to the jurisdiction of the courts of the Cayman Islands in relation to the matters contained herein.

Executed and delivered as a deed this ______________2014

_______________

Director

For and on behalf of

DMIH Limited

In the presence of:

Witness  _____________________________

Name     _____________________________

Address _____________________________

SCHEDULE 4

UNDERTAKING

United TLD Holdco Ltd.

(the “Company”)

To:Silicon Valley Bank (the “Lender”)

_________________2014

Charge Over Shares

I confirm that we have been instructed byDMIH Limited (the “Chargor”) to make and have accordingly made an annotation of the existence of the charge over shares entered into between the Chargor and the Lender (the “Share Charge”) noting the existence of the security interests created in favour of Lender by the Share Charge in the register of members of the Company in the terms required by the Share Charge, a true copy of which is attached hereto.

The Company hereby irrevocably undertakes and covenants with the Lender:

(i) following the occurrence of an Event of Default which is continuing, to register all transfers of shares of the Company made pursuant to and in accordance with the terms of the Share Charge submitted to the Company for registration as soon as practical following submission;

(ii) not to register any transfer of the issued shares of the Company (other than pursuant to the Share Charge);

(iii) not to issue, redeem or repurchase any shares of the Company without the prior written consent of the Lender, in a way which materially prejudices the value of the Charged Shares or otherwise jeopardises the security constituted by the Share Charge;

(iv) not without the Lender’s prior written consent to change the registered office of the Company or the place at which (or the service provider by which) the register of members of the Company is maintained.

Additionally, the Company acknowledges and agrees to its appointment as agent for service of process in the Cayman Islands for the Chargor in accordance with clause 16.7 of the Share Charge.

Executed and delivered as a deed this ___________2014 for and on behalf of the Company

____________________

Director

In the presence of:

Witness  _____________________________

Name     _____________________________

Address _____________________________

SCHEDULE 5

NOTICE OF CHARGE OVER SHARES

To:United TLD Holdco Ltd. (the “Company”)

________________2014

Charge over Shares

We hereby notify you that pursuant to ashare charge dated [      ] 2014 betweenDMIH Limited (the “Chargor”) and Silicon Valley Bank, aslender (the “Lender”), the Chargor has granted a security interest over all of the shares in the Company registered in its name (the “Share Charge”) and, at any time after the Lender notifies you that an Event of Default (as defined in the Share Charge) has occurred and is continuing, you (and any service provider of the Company in possession of the register of members of the Company) are hereby authorised and instructed to take such steps to register the Lenderor its nominee as the registered holder of the shares pursuant to the Share Charge without further reference to ourselves.

Yours faithfully,

_______________

Director

For and on behalf of

DMIH Limited

In the presence of:

Witness  _____________________________

Name     _____________________________

Address _____________________________

EX-10.14

Exhibit 10.14

UNCONDITIONAL GUARANTEE

(Non-U.S. Entities)

This continuing UNCONDITIONAL GUARANTEE (Non-U.S. Entities) (“Guarantee”) is entered into as of August 6, 2014, by each of the signatories hereto (together with each Material Foreign Subsidiary of any Loan Party who accedes to this Guarantee as a guarantor after the date hereof pursuant to Section 5.12 of the Credit Agreement referred to below (each a “Guarantor” and, collectively, the “Guarantors”) in favor of Obsidian Agency Services, Inc.(in its capacity as collateral agent for the Secured Parties, hereinafter referred to as the “Collateral Agent”).

Recitals

A.Collateral Agent, RIGHTSIDE GROUP, LTD., a Delaware corporation (“U.S. Borrower”), UNITED TLD HOLDCO LTD., an exempted company limited by shares incorporated under the laws of the Cayman Islands (the “Cayman Borrower”), and the Lenders have entered into that certain Credit Agreement dated as of the date hereof (as amended, restated, or otherwise modified from time to time, the “Credit Agreement”), pursuant to which the Lenders has agreed, among other things, to make a term loan to the Cayman Borrower  (collectively, the “Cayman Term Loans”), subject to the terms and conditions set forth therein.  Capitalized terms used but not otherwise defined herein shall have the meanings given them in the Credit Agreement.

B.In consideration of the agreement of the Lenders to make the Cayman Term Loans to the Cayman Borrower under the Credit Agreement, each Guarantor is willing to guarantee the full payment and performance by the Cayman Loan Parties (other than the U.S. Loan Parties) of all of their obligations thereunder and under the other Loan Documents, all as further set forth herein.

Now, Therefore, to induce the Lenders to enter into the Credit Agreement and to make the Cayman Term Loans to the Cayman Borrower, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound, each Guarantor hereby represents, warrants, covenants and agrees as follows: 

Section 1.Guarantee.  

1.1Guarantee

(a) Each Guarantor hereby, jointly and severally, unconditionally and irrevocably, guarantees to the Secured Parties and their successors, indorsees, transferees and assigns, the prompt and complete payment and performance by each Cayman Loan Party(other than the U.S. Loan Parties) when due (whether at the stated maturity, by acceleration or otherwise) of the Obligations (as such term is defined in the Credit Agreement) of the Cayman Borrower(collectively, the “Cayman Obligations”).In furtherance of the foregoing, and without limiting the generality thereof, each Guarantor agrees as follows:

(i) each Guarantor’s liability hereunder shall be the immediate, direct, and primary obligation of such Guarantor and shall not be contingent upon any Secured Party’s exercise or enforcement of any remedy it or they may have against any Borrower, any other Guarantor, any other Person, or all or any portion of the Collateral; and

(ii) the Collateral Agent may enforce this guarantee notwithstanding the existence of any dispute between Collateral Agent or any other Secured Party and any Borrower or any other Guarantor with respect to the existence of any Event of Default.

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(b) Anything herein or in any other Loan Document to the contrary notwithstanding, the maximum liability of each Guarantor hereunder and under the other Loan Documents shall in no event exceed the amount which can be guaranteed by such Guarantor under applicable federal, state or other applicable laws relating to the insolvency of debtors (after giving effect to the right of contribution established in Section 1.2).

(c) Each Guarantor agrees that the Cayman Obligations may at any time and from time to time exceed the amount of the liability of such Guarantor hereunder without impairing the guarantee contained in this Section 1 or affecting the rights and remedies of the Secured Parties hereunder.

(d) The guarantee contained in this Section 1 shall remain in full force and effect until the satisfaction of the Cayman Obligations by the payment in full, in cash of the principal of and interest on or other liabilities relating to the Cayman Term Loan, all fees and all other expenses or amounts payable under any Loan Document in connection with the Cayman Term Loan (other than inchoate indemnification obligations, and any other obligations which pursuant to the terms of any Loan Document specifically survive repayment of the Loans for which no claim has been made) (the “Discharge of Obligations”).

(e) No payment made by any Borrower, any Guarantor, any other guarantor or any other Person or received or collected by Collateral Agent from any Borrower, any Guarantor, any other guarantor or any other Person by virtue of any action or proceeding or any setoff or appropriation or application at any time or from time to time in reduction of or in payment of the Cayman Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of any Guarantor hereunder which shall, notwithstanding any such payment (other than any payment made by such Guarantor in respect of the Cayman Obligations or any payment received or collected from such Guarantor in respect of the Cayman Obligations), remain liable for the Cayman Obligations up to the maximum liability of such Guarantor hereunder until the Discharge of Obligations.

1.2Right of Contribution.  If in connection with any payment made by any Guarantor hereunder any rights of contribution arise in favor of such Guarantor against one or more other Guarantors, such rights of contribution shall be subject to the terms and conditions of Section 1.3.  The provisions of this Section 1.2 shall in no respect limit the obligations and liabilities of any Guarantor to the Secured Parties, and each Guarantor shall remain liable to the Secured Parties for the full amount guaranteed by such Guarantor hereunder.

1.3No Subrogation.  Notwithstanding any payment made by any Guarantor hereunder or any setoff or application of funds of any Guarantor by the Secured Parties, no Guarantor shall be entitled to be subrogated to any of the rights of the Secured Parties against any Borrower or any other Guarantor or any Collateral or guarantee or right of offset held by Collateral Agent for the payment of the Cayman Obligations, nor shall any Guarantor seek or be entitled to seek any contribution or reimbursement from any Borrower or any other Guarantor in respect of payments made by such Guarantor hereunder, in each case, until the Discharge of Obligations.  If any amount shall be paid to any Guarantor on account of such subrogation rights at any time prior to the Discharge of Obligations, such amount shall be held by such Guarantor in trust for the Secured Parties, shall be segregated from other funds of such Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over to the Collateral Agent in the exact form received by such Guarantor (duly indorsed by such Guarantor to Collateral Agent, if required), to be applied, at any time at the Collateral Agent’s election, in such order as set forth in Article VII of the Credit Agreement irrespective of the occurrence or the continuance of any Event of Default.

1.4Amendments, etc. with respect to the Cayman Obligations.  Each Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against any Guarantor and without notice to or further assent by any Guarantor, any demand for payment of any of the Cayman Obligations made by the Secured Parties may be rescinded by the Secured Parties and any of the Cayman

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Obligations continued, and the Cayman Obligations, or the liability of any other Person upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by the Collateral Agent, and the Credit Agreement, the other Loan Documents, the Specified Swap Agreements and any other documents executed and delivered in connection therewith may be amended, modified, supplemented or terminated, in whole or in part, Collateral Agent may deem advisable from time to time, and any collateral security, guarantee or right of offset at any time held by Collateral Agent for the payment of the Cayman Obligations may be sold, exchanged, waived, surrendered or released.  The Secured Parties shall not have any obligation to protect, secure, perfect or insure any Lien at any time held by it as security for the Cayman Obligations or for the guarantee contained in this Section 1 or any property subject thereto.

1.5Guarantee Absolute and Unconditional; Guarantor Waivers; Guarantor Consents.  Each Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of the Cayman Obligations and notice of or proof of reliance by Collateral Agent upon the guarantee contained in this Section 1 or acceptance of the guarantee contained in this Section 1; the Cayman Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon the guarantee contained in this Section 1; and all dealings between any Borrower and any of the Guarantors on the one hand, and the Secured Parties, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon the guarantee contained in this Section 1.  Each Guarantor further waives:

(a) diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon any Borrower or any of the other Guarantors with respect to the Cayman Obligations;

(b) any right to require the Secured Parties to marshal assets in favor of any Borrower, such Guarantor, any other Guarantor or any other Person, to proceed against any Borrower, any other Guarantor or any other Person, to proceed against or exhaust any of the Collateral, to give notice of the terms, time and place of any public or private sale of personal property security constituting the Collateral or other collateral for the Cayman Obligations or to comply with any other provisions of Section 9611 of the UCC (or any equivalent provision of any other applicable law) or to pursue any other right, remedy, power or privilege of the Secured Parties whatsoever;

(c) the defense of the statute of limitations in any action hereunder or for the collection or performance of the Cayman Obligations;

(d) any defense based upon any Secured Party’s errors or omissions in the administration of the Cayman Obligations;

(e) any rights to setoffs and counterclaims;

(f) any defense based upon an election of remedies (including, if available, an election to proceed by nonjudicial foreclosure) which destroys or impairs the subrogation rights of such Guarantor or the right of such Guarantor to proceed against any Borrower or any other obligor of the Cayman Obligations for reimbursement;

(g) the benefit of California Civil Code Section 2815 permitting the revocation of this Guarantee as to future transactions and the benefit of California Civil Code Sections 2809, 2810, 2819, 2839, 2845, 2848, 2849, 2850, 2899 and 1432 with respect to certain suretyship defenses; and

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(h) without limiting the generality of the foregoing, to the fullest extent permitted by law, any defenses or benefits that may be derived from or afforded by applicable law that limit the liability of or exonerate guarantors or sureties, or which may conflict with the terms of this Guarantee.

Each Guarantor understands and agrees that the guarantee contained in this Section 1 shall be construed as a continuing, absolute and unconditional guarantee of payment without regard to (i) the validity or enforceability of the Credit Agreement or any other Loan Document, any of the Cayman Obligations or any other collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by Collateral Agent, (ii) any defense, setoff or counterclaim (other than a defense of payment or performance) which may at any time be available to or be asserted by any Borrower or any other Person against any Secured Party, (iii) any other circumstance whatsoever (with or without notice to or knowledge of any Borrower or such Guarantor) which constitutes, or might be construed to constitute, an equitable or legal discharge of any Borrower and the Guarantors for the Cayman Obligations, or of such Guarantor under the guarantee contained in this Section 1, in bankruptcy or in any other instance, (iv) any Insolvency Proceeding with respect to any Borrower, any Guarantor or any other Person, (v) any merger, acquisition, consolidation or change in structure of any Borrower, any Guarantor or any other Person, or any sale, lease, transfer or other disposition of any or all of the assets or Voting Stock of any Borrower, any Guarantor or any other Person, (vi) any assignment or other transfer, in whole or in part, of any Secured Party’s interests in and rights under this Guarantee or the other Loan Documents, including Collateral Agent’s and other Secured Parties’ right to receive payment of the Cayman Obligations, or any assignment or other transfer, in whole or in part, of any Secured Party’s interests in and to any of the Collateral, (vii) Collateral Agent’s vote, claim, distribution, election, acceptance, action or inaction in any Insolvency Proceeding related to any of the Cayman Obligations, and (viii) any other guarantee, whether by such Guarantor or any other Person, of all or any part of the Cayman Obligations or any other indebtedness, obligations or liabilities of any Guarantor to the Secured Parties.

When making any demand hereunder or otherwise pursuing its rights and remedies hereunder against any Guarantor, Collateral Agent may, but shall be under no obligation to make a similar demand on or otherwise pursue such rights and remedies as it may have against the applicable Borrower(s), any other Guarantor or any other Person or against any collateral security or guarantee for the Cayman Obligations or any right of offset with respect thereto.  Any failure by Collateral Agent to make any such demand, to pursue such other rights or remedies or to collect any payments from the applicable Borrower(s), any other Guarantor or any other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of any Borrower, any other Guarantor or any other Person or any such collateral security, guarantee or right of offset, shall not relieve any Guarantor of any obligation or liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of Collateral Agent against any Guarantor.  For the purposes hereof “demand” shall include the commencement and continuance of any legal proceedings.

Each Guarantor further unconditionally consents and agrees that, without notice to or further assent from any Guarantor:  (a) the principal amount of the Cayman Obligations may be increased or decreased and additional indebtedness or obligations of any Borrower or any other Persons under the Loan Documents may be incurred, by one or more amendments, modifications, renewals or extensions of any Loan Document or otherwise; (b) the time, manner, place or terms of any payment under any Loan Document may be extended or changed, including by an increase or decrease in the interest rate on any Cayman Obligation or any fee or other amount payable under such Loan Document, by an amendment, modification or renewal of any Loan Document or otherwise; (c) the time for any Borrower’s (or any other Loan Party’s) performance of or compliance with any term, covenant or agreement on its part to be performed or observed under any Loan Document may be extended, or such performance or compliance waived, or failure in or departure from such performance or compliance consented to, all in such manner and upon such terms as Collateral Agent may deem proper; (d) in addition to the Collateral, Collateral Agent may take and hold other security (legal or equitable) of any kind, at any time, as collateral for the Cayman Obligations, and

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may, from time to time, in whole or in part, exchange, sell, surrender, release, subordinate, modify, waive, rescind, compromise or extend such security and may permit or consent to any such action or the result of any such action, and may apply such security and direct the order or manner of sale thereof; (e) Collateral Agent may discharge or release, in whole or in part, any other Guarantor or any other Loan Party or other Person liable for the payment and performance of all or any part of the Cayman Obligations, and may permit or consent to any such action or any result of such action, and shall not be obligated to demand or enforce payment upon any of the Collateral, nor shall Collateral Agent be liable to any Guarantor for any failure to collect or enforce payment or performance of the Cayman Obligations from any Person or to realize upon the Collateral; and (f) Collateral Agent may request and accept other guaranties of the Cayman Obligations and any other indebtedness, obligations or liabilities of any Borrower or any other Loan Party to Collateral Agent and may, from time to time, in whole or in part, surrender, release, subordinate, modify, waive, rescind, compromise or extend any such guarantee and may permit or consent to any such action or the result of any such action; in each case of (a) through (f), as Collateral Agent may deem advisable, and without impairing, abridging, releasing or affecting this Guarantee.

Each Guarantor acknowledges that all or any portion of the Cayman Obligations may now or hereafter be secured by a Lien or Liens upon real property owned or leased by any Borrower or any Guarantor and evidenced by certain documents including, without limitation, deeds of trust and assignments of rents. Collateral Agent may, pursuant to the terms of said real property security documents and applicable law, foreclose under all or any portion of one or more of said Liens by means of judicial or nonjudicial sale or sales.  Each Guarantor agrees that the Secured Parties may exercise whatever rights and remedies it may have with respect to said real property security, all without affecting the liability of any Guarantor hereunder, except to the extent such Secured Party realizes payment by such action or proceeding.  No election to proceed in one form of action or against any party, or on any obligation shall constitute a waiver of any Secured Party’s right to proceed in any other form of action or against any Guarantor or any other Person, or diminish the liability of any Guarantor, or affect the right of any Secured Party to proceed against any Guarantor for any deficiency, except to the extent such Secured Party realizes payment by such action, notwithstanding the effect of such action upon any Guarantor’s rights of subrogation, reimbursement or indemnity, if any, against any Borrower, any other Guarantor or any other Person.  Without limiting the generality of the foregoing, each Guarantor expressly waives all rights, benefits and defenses, if any, applicable or available to such Guarantor under either California Code of Civil Procedure Sections 580a or 726, which provide, among other things, that the amount of any deficiency judgment which may be recovered following either a judicial or nonjudicial foreclosure sale is limited to the difference between the amount of any Indebtedness owed and the greater of the fair value of the security or the amount for which the security was actually sold.  Without limiting the generality of the foregoing, each Guarantor further expressly waives all rights, benefits and defenses, if any, applicable or available to such Guarantor under either California Code of Civil Procedure Sections 580b, providing that no deficiency may be recovered on a real property purchase money obligation, or 580d, providing that no deficiency may be recovered on a note secured by a deed of trust on real property if the real property is sold under a power of sale contained in the deed of trust.

1.6Reinstatement.  The guarantee contained in this Section 1 shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Cayman Obligations is rescinded or must otherwise be restored or returned by the Secured Parties upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of any Borrower or any Guarantor, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, any Borrower or any such Guarantor or any substantial part of its respective property, or otherwise, all as though such payments had not been made.

1.7Payments.  Each Guarantor hereby guarantees that payments hereunder will be paid to the Secured Parties without setoff or counterclaim in Dollars at the applicable Funding Office.

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Section 2.Representations and Warranties.

Each Guarantor hereby represents and warrants that:

(a)such Guarantor (i) with respect to the Guarantors as of the date of this Guaranteeis a limited liability company duly organized and validly existing under the laws of Ireland; (ii) is duly qualified to do business and, as applicable, is in good standing in every jurisdiction where the nature of its business requires it to be so qualified (except where the failure to so qualify would not have a material adverse effect on Guarantor’s condition, financial or otherwise, or on Guarantor’s ability to pay or perform the obligations hereunder); and (iii) has all requisite power and authority to execute and deliver this Guarantee and each Loan Document executed and delivered by Guarantor pursuant to the Credit Agreement or this Guarantee and to perform its obligations thereunder and hereunder.

(b)the execution, delivery and performance by such Guarantor of this Guarantee (i) are within such Guarantor’s powers and have been duly authorized by all necessary action; (ii) do not contravene such Guarantor’s constitutional documents or any law or any contractual restriction binding on or affecting such Guarantor or by which such Guarantor’s property may be affected; (iii) do not require any authorization or approval or other action by, or any notice to or filing with, any governmental authority or any other Person under any indenture, mortgage, deed of trust, lease, agreement or other instrument to which such Guarantor is a party or by which such Guarantor or any of its property is bound, except such as have been obtained or made; and (iv) do not result in the imposition or creation of any Lien upon any property of such Guarantor, other than the Lien created pursuant to the Credit Agreement or any other Loan Document. 

(c)this Guarantee is a valid and binding obligation of such Guarantor, enforceable against such Guarantor in accordance with its terms, except as the enforceability thereof may be subject to or limited by bankruptcy, insolvency, reorganization, arrangement, moratorium or other similar laws relating to or affecting the rights of creditors generally. 

(d)there is no action, suit or proceeding affecting such Guarantor pending or threatened before any court, arbitrator, or governmental authority, domestic or foreign, which may have a material adverse effect on the ability of such Guarantor to perform its obligations under this Guarantee. 

(e)such Guarantor’s obligations hereunder are not subject to any offset or defense against Collateral Agent, other Loan Party or any other guarantor of any kind.

(f)to ensure the legality, validity, enforceability or admissability into evidence of this Guarantee in each jurisdiction in which such Guarantor is organized and/or incorporated and any jurisdiction in which such Guarantor conducts business, it is not necessary that (i) this Guarantee be filed or recorded with any court or other authority in such jurisdiction, (ii) any other filings, notices, authorizations, approvals be obtained or other actions taken, or (iii) any stamp or similar tax be paid on or with respect to this Guarantee, or, if any of the foregoing actions are necessary, they have been or will be duly taken at the appropriate time.

(g)neither such Guarantor nor its property has any immunity from jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) under applicable law.

(h)the incurrence of such Guarantor’s obligations under this Guarantee will not cause such Guarantor to (i) become insolvent; (ii) be left with unreasonably small capital for any business or transaction in which such Guarantor is presently engaged or plans to be engaged; or (iii) be unable to pay its debts as such debts mature. 

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(i)the guaranteeing of the Cayman Obligations by the Irish Guarantors is not prohibited by the provisions of Section 31 of the Companies Act, 1990.

(j)the guaranteeing of the Cayman Obligations by the Irish Guarantors is not prohibited by the provisions of Section 60 of the Companies Act 1963.

(k)the guaranteeing of the Cayman Obligations by the Guarantors does not cause any guaranteeing limit binding on the Guarantors to be exceeded.

(l)all representations and warranties contained in this Guarantee shall be true at the time of Guarantor’s execution of this Guarantee, and shall continue to be true so long as this Guarantee remains in effect.  Each Guarantor expressly agrees that any misrepresentation or breach of any warranty whatsoever contained in this Guarantee shall be deemed material.

Section 3.Notices.  All notices, requests and demands to or upon Collateral Agent or any Guarantor hereunder shall be effected in the manner provided for in Section 9.01 of the Credit Agreement.

Section 4.Entire Agreement.  This Guarantee and the other Loan Documents represent the agreement of the Guarantors and Collateral Agent with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by Collateral Agent relative to the subject matter hereof and thereof not expressly set forth or referred to herein or in the other Loan Documents.

Section 5.Severability.  If any provision of this Guarantee is held to be unenforceable under applicable law for any reason, it shall be adjusted, if possible, rather than voided in order to achieve the intent of Guarantor and Collateral Agent to the extent possible.  In any event, all other provisions of this Guarantee shall be deemed valid and enforceable to the full extent possible under applicable law. 

Section 6.Subordination of Indebtedness.  Any indebtedness or other obligation of any Cayman Loan Party now or hereafter held by or owing to any Guarantor is hereby subordinated in time and right of payment to all obligations of each Cayman Loan Party to Collateral Agent and such indebtedness of a Cayman Loan Party to any Guarantor is assigned to Collateral Agent as security for this Guarantee, and if Collateral Agent so requests shall be collected, enforced and received by such Guarantor in trust for Collateral Agentand, if an Event of Default has occurred and is continuing, to be paid over to Collateral Agent on account of the Cayman Obligations, but without reducing or affecting in any manner the liability of such Guarantor under the other provisions of this Guarantee.  Any notes now or hereafter evidencing such indebtedness of a Cayman Loan Party to any Guarantor shall be marked with a legend that the same are subject to this Guarantee and shall be delivered to Collateral Agent.

Section 7.  Payment of Expenses.  Guarantor shall pay, promptly on demand, all reasonable and documented Expenses incurred by the Collateral Agent or the other Secured Parties in defending and/or enforcing this Guarantee.  For purposes hereof, “Expenses” shall mean costs and expenses (including reasonable fees and disbursements of any law firm or other external counsel and the allocated cost of internal legal services and all disbursements of internal counsel) for defending and/or enforcing this Guarantee (including those incurred in connection with appeals or proceedings by or against Guarantor under the United States Bankruptcy Code, or any other bankruptcy or insolvency law, including assignments for the benefit of creditors, compositions, extensions generally with its creditors, or proceedings seeking reorganization, arrangement, or other relief).

Section 8.GOVERNING LAW.  THIS GUARANTEE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK.

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Section 9.WAIVER OF JURY TRIAL.EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS GUARANTEE OR ANY OF THE OTHER LOAN DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS GUARANTEE AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.

Section 10.  Jurisdiction; Consent to Service of Process

. 

(a) Each party hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of any New York State court or Federal court of the United States of America, sitting in New York City, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Guarantee or the other Loan Documents, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court.  Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Guarantee shall affect any right that the Collateral Agent, the Administrative Agent or any Lender may otherwise have to bring any action or proceeding relating to this Guarantee or the other Loan Documents against any Guarantor or its properties in the courts of any jurisdiction.

(b) Each party hereto hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Guarantee or the other Loan Documents in any court located in the City of New York, Borough of Manhattan, or of the United States of America sitting in the Southern District of New York.  Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(c) Each party to this Guarantee irrevocably consents to service of process in the manner provided for notices in Section 7.01 of the Credit Agreement.  Nothing in this Guarantee or any other Loan Document will affect the right of any party to this Guarantee to serve process in any other manner permitted by law.

Section 10.  Additional Guarantors.  Each Subsidiary of a Guarantor that is required to become a party to this Guarantee pursuant to Section 5.12 of the Credit Agreement shall become a Guarantor for all purposes of this Guarantee upon execution and delivery by such Subsidiary of an Assumption Agreement in the form of Annex1 hereto.

[Signature Pages Follow]

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IN WITNESS WHEREOF, the parties hereto have caused this Guarantee to be executed as of the date first written above.

GUARANTORS:

DMIH LIMITED


By:/s/ Richard Danis
Name:  Richard Danis
Title:    Director

RIGHTSIDE DOMAINS EUROPE LIMITED


By:/s/ Richard Danis
Name:  Richard Danis
Title:    Director

[Signature Page to Unconditional Guarantee]

IN WITNESS WHEREOF, the parties hereto have caused this Guarantee to be executed as of the date first written above.

COLLATERAL AGENT:

OBSIDIAN AGENCY SERVICES, INC.

By:/s/ Howard Levkowitz
Name:  Howard Levkowitz
Title:    President

[Signature Page to Unconditional Guarantee]

ANNEX 1 To

UNCONDITIONAL GUARANTEE

(Non-U.S. Entities)

FORM OF
ASSUMPTION AGREEMENT

This ASSUMPTION AGREEMENT (the “Assumption Agreement”), dated as of [_______], 20__, is executed and delivered by [______________________________] (the “Additional Guarantor”), in favor of OBSIDIAN AGENCY SERVICES, INC, as collateral agentfor the Secured Parties (together with its permitted successors, in such capacity, the “Collateral Agent”) pursuant to that certain Credit Agreement, dated as of August 6, 2014 (as amended, amended and restated, supplemented, restructured or otherwise modified, renewed or replaced from time to time, the “Credit Agreement”), by and among RIGHTSIDE GROUP, LTD., a Delaware corporation (“U.S. Borrower”), UNITED TLD HOLDCO LTD., an exempted company limited by shares incorporated under the laws of the Cayman Islands (“Cayman Borrower”), the Lenders and Collateral Agent.  All capitalized terms not defined herein shall have the respective meanings ascribed to such terms in such Credit Agreement.

WITNESSETH:

WHEREAS, in connection with the Credit Agreement, the Cayman Loan Parties(other than the U.S. Loan Parties) and certain of their Affiliates (other than the Additional Guarantor) have entered into that certain Unconditional Guarantee (Non-U.S. Entities), dated as of August 6, 2014, in favor of Collateral Agentfor the benefit of the Secured Parties (the “Guarantee”);

WHEREAS, [____________] is required, pursuant to Section 5.12 of the Credit Agreement to cause the Additional Guarantor to become a party to the Guarantee in order to provide its guarantee of the Cayman Obligations as therein contemplated; and

WHEREAS, the Additional Guarantor has agreed to execute and deliver this Assumption Agreement in order to become a party to the Guarantee;

NOW, THEREFORE, IT IS AGREED:

1.Guarantee.  By executing and delivering this Assumption Agreement, the Additional Guarantor, as provided in Section 10 of the Guarantee, (a) hereby becomes a party to the Guarantee as a “Guarantor” thereunder with the same force and effect as if originally named therein as a Guarantor and, without limiting the generality of the foregoing, hereby expressly assumes all obligations and liabilities of a Guarantor thereunder.  The Additional Guarantor hereby represents and warrants that each of the representations and warranties contained in Section 2 of the Guarantee (x) that is qualified by materiality is true and correct, and (y) that is not qualified by materiality, is true and correct in all material respects, in each case, on and as the date hereof (after giving effect to this Assumption Agreement) as if made on and as of such date (except to the extent any such representation and warranty expressly relates to an earlier date, in which case such representation and warranty was true and correct in all material respects as of such earlier date).

2.Governing Law.THIS ASSUMPTION AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK.

Annex 1

3.Loan Document.  This Assumption Agreement shall constitute a Loan Document under the Credit Agreement.

Annex 1

IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to be duly executed and delivered as of the date first above written.

[ADDITIONAL GUARANTOR]



By:
Name: 
Title:   

Annex 1

EX-10.15

Exhibit 10.15

DMIH LIMITED

(as Grantor)

OBSIDIAN AGENCY SERVICES, INC.

(as Collateral Agent for the Secured Parties)

SECURITY DEED

(DEBENTURE)

William Fry

Solicitors

Fitzwilton House

Wilton Place

Dublin 2

www.williamfry.ie

© William Fry 2014

019068.0006.JCH

CONTENTS

SECTION 1.0 - INTERPRETATION	5
1.1     Credit Agreement	5
1.2     Additional Definitions	5
1.3     Interpretation	9
1.4     Certificates	10
1.5     Intercreditor Agreement	11
SECTION 2.0 - NATURE OF SECURITY AND COVENANT TO PAY	11
2.1     Nature of Security	11
2.2     Covenant to Pay	12
SECTION 3.0 - FIXED CHARGES, ASSIGNMENTS AND FLOATING CHARGE	12
3.1     Fixed Charges	12
3.2     Assignments	13
3.3     Non-assignable	14
3.4     Floating Charge	14
3.5     Crystallisation of Floating Charge	15
3.6     Negative Pledge	16
3.7     After Acquired Property	16
3.8     Validity of Charges	16
3.9     Continuing Obligations	16
3.10   Proviso for Redemption/Release/Reassignment	17
SECTION 4.0 - ENFORCEABILITY OF SECURITY	17
4.1     Events of Default	17
SECTION 5.0 - RIGHTS AND POWERS OF THE LENDER	17
5.1     Entry into Possession	17
5.2     Further Right of Possession	18
5.3     Power of Sale	18
5.4     Power of Leasing and Accepting Surrenders	18
5.5     Power to Conduct Business	18
5.6     Due Date for Statutory Purposes	19
5.7     Non-applicability of Sections 92 and 94 of the Act	19
5.8     Position of Third Parties	19
5.9     Receipt of Collateral Agent Good Discharge	19
5.10   Application of Monies	19
SECTION 6.0 - APPOINTMENT OF RECEIVER	20
6.1     Power of Appointment	20
6.2     Powers of Receiver to Borrow	22
6.3     Application of Monies by Receiver	22
6.4     Liability of the Collateral Agent and Receiver	22
6.5     Receiver Agent of the Grantor	22
6.6     Section 108 of the Act	23
SECTION 7.0 - CONTINUING SECURITY, ETC.	23
7.1     Continuing Security	23
7.2     Opening of New Accounts	23
7.3     Reinstatement	23
7.4     Waiver of Defences	23
7.5     Additional Security	24
SECTION 8.0 - SHARES	24
8.1     Covenants relating to Shares	24
8.2     Deposit of Title Documents	25
8.3     Changes to Rights	25
8.4     Calls	25
8.5     Other Obligations in respect of Shares	25
8.6     Voting and Dividend Rights	25
SECTION 9.0 - SECURITY ACCOUNTS	26
9.1     Covenants relating to Security Accounts	26
9.2     Security Accounts	26
9.3     Withdrawals	26
9.4     Notices of Charge	26
SECTION 10.0 - BOOK DEBT RECEIVABLES ACCOUNT	26
10.1     Covenants relating to Book Debt Receivables Account	26
10.2     Book Debt Receivables Account	26

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10.3     Receipts	26
10.4     Withdrawals	27
10.5     Notices of Charge	27
10.6     Legal Assignment	27
SECTION 11.0 - RELEVANT CONTRACTS/INSURANCES	27
11.1     Covenants relating to Relevant Contracts and Insurances	27
11.2     Preservation	27
11.3     Further Undertakings	28
11.4     Notices of Assignment	28
SECTION 12.0 - INTELLECTUAL PROPERTY	28
12.1     Covenants relating to Intellectual Property	28
12.2     Intellectual Property	28
SECTION 13.0 - GENERAL PROVISIONS	29
13.1     Assignment	29
13.2     Consolidation	29
13.3     Protection of Purchaser	29
13.4     No Waivers, Remedies Cumulative	29
13.5     Set-off	29
13.6     Preferential Claims	29
13.7     Power of Attorney	29
13.8     Waiver	30
13.9     Enforcement of Other Rights	30
13.10     Appropriations	30
13.11     Authority of the Collateral Agent	30
13.12     Duty; Obligations and Liabilities	31
13.13     Obligations and Liabilities with respect to Security Assets	31
13.14     Confirmation of Role of Collateral Agent and Additional Powers	31
13.15     Notices	31
13.16     Non-Competition	32
13.17     Counterparts	32
13.18     Governing Law and Jurisdiction	32
SCHEDULE 1	34
Scheduled Property	34
SCHEDULE 2	35
PART 1	35
The Fixtures and Fittings	35
PART 2	35
The Relevant Contracts	35
PART 3	35
The Licences	35
PART 4	35
The Shares	35
PART 5	35
The Intellectual Property	35
PART 6	35
The Security Accounts	35
PART 7	35
The Book Debt Receivable Account	35
SCHEDULE 3	36
PART 1	36
Form of Letters for Security Account	36
PART A	36
Notice to Account Bank	36
PART B	38
Acknowledgement of Security Account Bank	38

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PART 2	39
Forms of Letter for Contracts	39
PART A	39
Notice to Counterparty	39
PART B	40
Acknowledgement of Counterparty	40
PART 3	41
PART A	41
Notice of Assignment of Insurances	41
PART B	43
Letter of Undertaking	43
PART 4	45
Form of notice to and acknowledgement from bank operating Book Debt Receivables Account	45

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THIS DEED is made on August 6, 2014

BETWEEN:

(1)DMIH LIMITED, a company incorporated in Ireland with registered number 494291 and having its registered office at Arthur Cox Building, Earlsfort Terrace, Dublin 2 (the “Grantor”); and

(2)OBSIDIAN AGENCY SERVICES, INC. as collateral agent for the Secured Parties (the “Collateral Agent”).

RECITALS

A.Rightside Group, Ltd., the direct parent company of the Grantor, has entered into the Credit Agreement with, amongst others, the Lenders and the Collateral Agent.

B.It is a condition of the Credit Agreement that the Grantor enter into this Deed in favour of the Collateral Agent, for the benefit of the Collateral Agent and the benefit of the other Secured Parties.

C.The Grantor and the Collateral Agent intend this document to have effect as a Deed.

D.The Directors of the Grantor are satisfied that it is in the best interests of and for the corporate benefit of the Grantor to enter into this Deed.

E.The Collateral Agent enters into this Deed as collateral agent for the Lenders in accordance with the terms set out in the Credit Agreement and this Deed.

THIS DEED WITNESSES as follows:

SECTION 1.0 - Interpretation

1.1Credit Agreement

Capitalised terms used in this Deed shall have the same meaning in this Deed as in the Credit Agreement unless otherwise provided in this Deed.

1.2Additional Definitions

In this Deed (including the Recitals) the following expressions shall, unless the context otherwise requires, have the following meanings, namely:

1.2.1"Act", the Land and Conveyancing Law Reform Act 2009;

1.2.2"Account Bank", such bank as shall be approved by the Collateral Agent;

1.2.3"Assigned Property", all assets and property assigned by this Deed and such expression shall include any part or parts of the Assigned Property;

1.2.4"Book Debt Receivables", all present and future book debts and other debts, rentals, sales proceeds, royalties, fees, revenues, value added tax and monetary claims and all other amounts at any time recoverable or receivable by, or due or owing to, the Grantor (whether actual or contingent and whether arising under contract or in any other manner whatsoever) together with:

(a)the benefit of all rights, guarantees, Lien and remedies relating to any of the foregoing (including without limitation, claims for damages and other remedies for non-payment of the same, all entitlements to interest, negotiable and non-negotiable instruments, indemnities, reservations of

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property rights, rights of tracing and unpaid vendor's liens and similar associated rights);

(b)all things in action which may give rise to a debt, revenue or claim and all other rights and remedies of whatever nature in respect of the same; and

(c)all proceeds of any of the foregoing;

1.2.5"Book Debt Receivables Account", the bank account(s) in the name of the Grantor as more particularly listed in Part 7 of Schedule 2 (Book Debt Receivables Account) and with the banks and bearing the account numbers set out therein, or any account or accounts replacing the same from time to time (in whatever currency) and the debt represented thereby;

1.2.6“Business”, the business associated with managing, marketing and operating registries with respect to any gTLDs delegated by ICANN (including pursuant to the terms of the Business and Asset Transfer Agreement), which are operated in accordance with any registry agreement;

1.2.7“Business and Assets Transfer Agreement”, a business and asset transfer agreement dated 17 November 2012 between United TLD HoldCo Ltd. and the Grantor;

1.2.8“Business Intellectual Property Rights”, Intellectual Property Rights owned, used or held exclusively or predominantly in, or in connection with, the Business;

1.2.9"Charged Property", all property and assets charged by this Deed, the Floating Charge Property and the Scheduled Property and such expression shall include any part or parts of the Charged Property;

1.2.10"Companies Acts",  the Companies Acts 1963 to 2013 and Parts 2 and 3 of the Investment Funds, Companies and Miscellaneous Provisions Act 2006, the Companies (Amendment) Act 2009 and the Companies (Miscellaneous Provisions) Act 2009, including all Acts of the Oireachtas and statutory instruments which are to be read as one with, or construed or read together as one with, such Acts and Parts 2 and 3 of the Investment Funds, Companies and Miscellaneous Provisions Act 2006, and every statutory modification or re-enactment thereof for the time being in force (or, where the context so admits or requires, any one or more of such Acts;

1.2.11“Credit Agreement“, the credit agreement dated on or about the date of this Deed between (1) Rightside Group, Ltd. (as U.S. Borrower), (2)  United TLD HoldCo Limited (as Cayman Borrower, and, together with the U.S. Borrower, the “Borrowers”), the Lenders (as defined therein), and (3) the Collateral Agent (as administrative agent and collateral agent);

1.2.12  “DomainsShare Charge”, a security over shares deed dated on or about the date hereof between (1) DMIH Limited and (2) the Collateral Agent in respect of the shares in Rightside Domains Europe Limited;

1.2.13“First Security Deeds” means the security deed (debenture) and the security over shares deeds each dated 1 August between the Grantor and Silicon Valley Bank (as security trustee for the Secured Parties);

1.2.14"Fixtures and Fittings", all present and future, fixed and moveable fixtures and fittings (including trade fixtures and fittings) and fixed plant, machinery, equipment, implements, motor vehicles and utensils from time to time on any freehold or leasehold property charged by or pursuant to this Deed or otherwise thereon or owned by the Grantor from time to time, including, but not limited to the fixtures, fittings, plant, machinery, equipment, implements, motor vehicles and utensils set out in Part 1 of Schedule 2  (Fixtures and Fittings);

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1.2.15"Floating Charge Property", the property of the Grantor charged by way of floating charge pursuant to Clause 3.4 of this Deed;

1.2.16"Group", Rightside Group, Ltd., its holding company and its subsidiaries (if any) and any subsidiary or subsidiaries of its holding company (if any) from time to time;

1.2.17“ICANN”, means the Internet Corporation for Assigned Names and Numbers;

1.2.18"Insurances", contracts and policies of insurance (including, for the avoidance of doubt, all cover notes), including but not limited to the contracts and policies, existing as at the date hereof and listed in Part 8 of Schedule 2  (Insurances) and such other contracts and policies which are taken out after the date of this Deed by or on behalf of the Grantor or (to the extent of such interest) in which the Grantor has an interest (and including, in each case, all key man policies) and all claims, proceeds and returns of premiums of each such contract and policy;

1.2.19"Intellectual Property", all copyrights, patents, trade marks, utility models, publication rights, registered designs, (including applications and rights to apply therefor and all renewals, modifications, extensions and derivations thereof), inventions, rights, service marks, rights in trade dress or get-up, trade and business names, domain names, domain name portfolios and top-level domain names, including domain name suffixes, also known as generic Top Level Domains, approved by ICANN, all Business Intellectual Property Rights, all rights under the Business and Asset Transfer Agreement (including applications and rights to apply therefor and all renewals, modifications, extensions and derivations thereof), confidential information and know-how, rights in computer software, database rights, topography rights,trade secrets, goodwill, Software and all other intellectual property rights of a similar nature in any part of the world and all fees, royalties and other rights and benefits of every kind deriving from any of the above and which now or at any time hereafter belong to the Grantor including, but not limited to, those listed in Part 5 of Schedule 2  (Intellectual Property);

1.2.20"Intercompany Loans", all Indebtedness in respect of which one member of the Group is the creditor of another member of the Group including, without prejudice to the generality of the foregoing, the Loan Agreement;

1.2.21“Intercreditor Agreement”, a subordination and intercreditor agreement dated on or about the date hereof between (1) Obsidian Agency Services, Inc (as administrative agent for the Fund Lenders) (as defined therein), (2) Silicon Valley Bank and (3) Rightside Group, Ltd.;

1.2.22"Licences", all licences now or from time to time hereafter held by or on behalfof the Grantor and all licences pertaining to the Scheduled Property, including but not limited to the licences specified in Part 3 of Schedule 2  (Licences), as the same may be amended, varied, extended, renewed or supplemented from time to time, including the benefit of any authorisation (statutory or otherwise) held in connection with the use of any of the Security Assets and the right to recover and receive compensation which may be payable to it in respect of any such authorisation and/or licence;

1.2.23“Loan Agreement”, the InterCompany Loan Agreement dated 14 March 2012 (as amended) between the Grantor (as lender), and United TLD HoldCo Ltd. (as borrower), pursuant to which the Grantor agreed to lend up to USD$40,000,000 to United TLD HoldCo Ltd. under the terms and conditions set forth therein;

1.2.24"Receiver", any one or more receivers and/or manager appointed by the Collateral Agent in respect of the Grantor over all or any part of the Security Assets;

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1.2.25"Related Rights", in relation to any Shares:

(a)all dividends, distributions, interest and other income paid or payable after the date hereof on all or any of the Shares;

(b)all stocks, shares, securities (and the dividends and interest thereon), rights, money or property accruing or offered at any time by way of redemption, bonus, preference, option rights or otherwise to or in respect of any of the Shares or in substitution or exchange for any of the Shares;

(c)all rights relating to any of the Shares which are deposited with or registered in the name of any depositary, custodian, nominee, clearing house or system, investment manager, chargee or other similar person or their nominee (including rights against any such person); and

(d)all other rights attaching or relating to any of the Shares and all cash or other securities or investments in the future deriving from any of the Shares or such rights;

1.2.26"Relevant Contracts", each contract, agreement and instrument assigned or purported to be assigned pursuant to Clause 3.2.3(a) (as the same may be amended, restated, substituted, supplemented or otherwise modified or replaced), including, but not limited to those or contracts,agreements and instruments more particular details of which are set out in Part 2 of Schedule 2  (Relevant Contracts);

1.2.27"Rental Income", all rents, fees and other amounts payable or paid to or for the benefit of the Grantor pursuant to, or in contemplation of, any occupational lease;

1.2.28"Scheduled Property", all premises intended to be mortgaged, charged or assigned by this Deed listed at Schedule 1 hereto and such expressions shall include any part or parts of the Scheduled Property and any rights and appurtenances appertaining thereto;

1.2.29"Secured Obligations", all Obligations and all monies, obligations and liabilities at any time due, owing or incurred by the Loan Parties to the Collateral Agent under the Loan Documents whether present or future, actual or contingent (and whether incurred solely or jointly, or jointly and severally, and whether as principal or surety or in some other capacity);

1.2.30"Secured Parties" has the meaning attributed to such term in the Credit Agreement;

1.2.31"Security Accounts", the bank accounts in the name of the Grantor as more particularly listed in Part 6 of Schedule 2  (Security Accounts) and with the banks and bearing the account numbers set out therein, and any account or accounts replacing the same from time to time and the debt represented thereby;

1.2.32"Security Assets", all assets, undertakings, rights and property of the Grantor (both present and future), the subject of any security created pursuant to this Deed and includes for the avoidance of doubt, the Grantor's rights and interest in the Assigned Property, the Floating Charge Property and the Charged Property;

1.2.33"Security Period", the period beginning on the date of this Deed and ending on the date on which the Collateral Agent irrevocably confirms in writing that all the Secured Obligations have been unconditionally and irrevocably paid and discharged in full;

1.2.34"Shares", all shares specified in Part 4 of Schedule 2  (Shares) under the heading "Shares" and all other shares, stocks, debentures, bonds, warrants, coupons or other securities and investments and all other interests (including, but not limited to, loan capital), in each case together with all Related Rights, now or in the future owned from time to time by, or on behalf of the Grantor except for those shares which

8

are charged pursuant to the terms of the Domains Share Charge and the First Security Deeds, in whatever form in every company, corporation, firm, entity or consortium wheresoever situate;

1.2.35"Software":

(a)all computer programs, including source code and object code versions;

(b)all data, databases and compilations of data, whether machine readable or otherwise; and

(c)all documentation, training materials and configurations related to any of the foregoing.

1.3Interpretation

1.3.1Clause 1.3 of the Credit Agreement shall apply to this Deed unless otherwise provided in this Deed.

1.3.2In addition to Clause 1.3.1:

(a)an “amendment”, includes a supplement, amendment, novation, restatement or re-enactment and “amended” is to be construed accordingly;

(b)“assets”, includes present and future properties, revenues and rights of every description;

(c)an “authorisation”, includes an authorisation, consent, approval, resolution, licence, exemption, filing, registration or notarisation;

(d)the “Collateral Agent”, “Administrative Agent”, a “Lender” or a “Secured Party”  shall mean the Collateral Agent, Administrative Agent, any Lender or any Secured Party respectively and its successors, assigns, participants and novatees and this Deed shall be enforceable notwithstanding any change in the constitution of the Collateral Agent, Administrative Agent, any Lenderor any Secured Party or the absorption of the Collateral Agent, Administrative Agent, any Lenderor any Secured Party in or amalgamation with any other person or the acquisition of all or part of the undertaking of the Collateral Agent, Administrative Agent, a Lender or a Secured Party by any other person;

(e)“company”, includes a corporation or a body corporate;

(f)“dispose”, means to sell, transfer, grant, lease, lend, grant options over or otherwise dispose of and “disposal” is to be construed accordingly;

(g)"examiner", means an examiner appointed under the provisions of the Companies Acts 1963-2013;

(h)“Grantor” or “Loan Party”  means the Grantor, a Loan Party and its successors and permitted assigns;

(i)a provision or matter “including” or which “includes” shall be construed without limitation to any events, circumstances, conditions, acts or matters listed or specified after those words;

(j)a  “Loan Document”or any other document, agreement or instrument is a reference to that Loan Documentor other document, agreement or

9

instrument as amended, restated, assigned, novated, varied, supplemented or replaced from time to time;

(k)a  “person”, includes any individual, company, government, state, agency, organisation, association, body, department, trust, partnership (whether or not having separate legal personality) or any other entity of any description;

(l)a  “regulation”, includes any regulation, rule, official directive, request or guideline (whether or not having the force of law but, if not having the force of law, being of a type with which any person to which it applies is accustomed to comply) of any governmental, inter-governmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation;

(m)“subsidiary” and “holding company”, means a subsidiary or a holding company as defined by Section 155 Companies Act, 1963 and “subsidiaries” and “holding companies” and cognate words shall be construed accordingly;

(n)the “winding up”, “dissolution” or “examinership” of a company shall be construed so as to include any equivalent or analogous proceedings under the law of the jurisdiction in which a company carries on business including, but not limited to, the seeking of liquidation, winding up, reorganisation, dissolution, examinership, administration, arrangements, adjustment, protection or relief of debtors.

(o)a provision of law is a reference to that provision as extended, applied, amended or re-enacted and includes any subordinate legislation;

(p)a Clause, a Subclause or a Schedule is a reference to a clause or subclause of, or a schedule to, this Deed; and

(q)words denoting the neuter shall include the masculine and feminine and vice versa.

1.3.3Unless the contrary intention appears, the index to and the headings in this Deed do not affect its interpretation.

1.3.4If the Collateral Agent considers that an amount paid by any Loan Party to a Secured Party under any Loan Document is capable of being avoided or otherwise set aside on the liquidation or examinership of the Grantor or otherwise, then such amount shall not be considered to have been irrevocably paid for the purposes hereof.

1.3.5Notwithstanding anything to the contrary in this Deed, the obligations, liabilities and undertakings under this Deed shall be deemed not to be undertaken or incurred to the extent that the same would:

(a)constitute unlawful financial assistance prohibited by Section 60 of the Companies Act 1963 (or any analogous provision of any other applicable law); or

(b)constitute a breach of Section 31 of the Companies Act 1990 (or any analogous provision of any other applicable law).

1.4Certificates

Any certificate or determination of the Collateral Agent as to any amounts owing under this Deed will be conclusive and binding on the Grantor, save in the case of manifest error.

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1.5Intercreditor Agreement

1.5.1Notwithstanding anything to the contrary in this Deed or any other Loan Document, the Liens created and other rights granted by the Grantor to the Collateral Agent pursuant to this Deed and the exercise of any such rights or related remedies by the Collateral Agent are subject to the provisions of the Intercreditor Agreement.

1.5.2In the event of any conflict between the terms of the Intercreditor Agreement and the terms of this Deed the terms of the Intercreditor Agreement shall prevail. 

1.5.3Any reference in this Deed to a “first fixed charge”, a “first floating charge” or words of similar effect describing the Liens created pursuant to this Deed shall be understood to refer to such priority subject to the terms of the Intercreditor Agreement up to and until the release of the Liens over the Charged Portfolio by Silicon Valley Bank. 

1.5.4All representations, warranties, covenants and undertakings in this Deed are subject to the qualifications in this Clause 1.5.  Prior to the release of the Liens over the Charged Portfolio by Silicon Valley Bank the representations, warranties, covenants, undertakings and other requirements of this Deed relating to the delivery of documents of title for the Charged Property or relating to actions to vest control of the Charged Property in the Collateral Agent shall be deemed satisfied by the delivery of such documents of title and vesting of such control in Silicon Valley Bank (as bailee for the Secured Parties pursuant to the terms of the Intercreditor Deed).

SECTION 2.0 - nature of security and Covenant To Pay

2.1Nature of Security

2.1.1All the security created under this Deed:

(a)is created in favour of the Collateral Agent as collateral agent for the Secured Parties, for its benefit and the benefit of the other Secured Parties;

(b)is created over all of the present and future assets of the Grantor; and

(c)is security for the payment of all the Secured Obligations.

2.1.2If the Grantor is prohibited from creating security over any of its assets (including for the avoidance of doubt, its rights under any document) without obtaining the consent of a third party:

(a)the Grantor must notify the Collateral Agent promptly upon it becoming aware of the same; and

(b)the fixed charge or assignment created by this Deed shall not take effect as regards the relevant asset until such consent is obtained, at which time that asset shall immediately become subject to such charge or assignment;

(c)if applicable, the security created by this Deed will secure all amounts which the Grantor may receive, or has received, under that document but exclude the document itself including, but not limited to, all damages, compensation, remuneration, profit, proceeds, rent or income derived therefrom; and

(d)unless the Collateral Agent otherwise requires, the Grantor must use its best endeavours to promptly obtain the consent of such third party to that asset being secured under this Deed.

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2.2Covenant to Pay

The Grantor hereby unconditionally and irrevocably covenants with the Collateral Agentas collateral agent for the Secured Parties that it will pay, discharge or perform the Secured Obligations on the due date therefor.  Any amount not paid hereunder when due shall bear interest (after as well as before judgment and payable on demand) at the Default Rate from time to time (compounding on a monthly basis) from the due date until the date such amount is unconditionally and irrevocably paid and discharged in full.

SECTION 3.0 - Fixed Charges, Assignments and floating charge

3.1Fixed Charges

Subject to Clauses 3.6 and 3.11, the Grantor, as legal and beneficial owner, as continuing security for the payment, performance and discharge of all of the Secured Obligations hereby charges in favour of the Collateral Agent, as collateral agent for the Secured Parties, for its benefit and the benefit of the other Secured Parties, by way of first fixed charge, all its present and future rights, title, interest and benefit in and to:

3.1.1all its estate, right, title and interest in any land, premises or buildings (including the Scheduled Property) now belonging to the Grantor (whether or not the legal title is vested in the Grantor or registered in the name of the Grantor) and all future estate, right, title and interest of the Grantor in such land, premises or buildings and in any other immovable property (in each case whether freehold or leasehold and whether or not registered) vested in or held by or on behalf of the Grantor from time to time and the proceeds of sale thereof together in all cases (to the extent the same are not already subject to an effective fixed security hereunder) all fixtures and fittings (including trade fixtures) and all fixed plant and machinery from time to time in or on such land, premises or buildings with the payment, performance and discharge of the Secured Obligations, and hereby assents to the registration of such charges as a burden on such freehold, leasehold and other immovable property (as applicable);

3.1.2the Licences;

3.1.3the Shares and all Related Rights;

3.1.4the Fixtures and Fittings;

3.1.5all of its rights in respect of any amount standing to the credit of any account (including without prejudice to the generality of the foregoing, the Security Accounts and the Book Debt Receivables Account) it has with any person and the debt represented by it;

3.1.6all Book Debt Receivables, all other moneys due and owing to the Grantor and the benefit of all rights, securities or guarantees of any nature enjoyed or held by it in relation to each of the same;

3.1.7all its Intellectual Property, provided that to the extent that a fixed charge is not created over any of the Intellectual Property by this Clause 3.1.7, the charge thereover purported to be effected by this clause shall operate as an absolute assignment of any and all damages, compensation, remuneration, profit, rent, royalty or income which the Grantor may now or at any time hereafter derive therefrom or be awarded or entitled to in any respect thereof;

3.1.8all of its beneficial interest, claim or entitlement in and to any pension fund and in and to any asset of any pension fund;

3.1.9all of its goodwill;

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3.1.10all of the uncalled capital of the Grantor and all rights and claims to which the Grantor is now or may hereafter become entitled as a result of any calls made in relation thereto;

3.1.11all rights and claims to which the Grantor is now or may hereafter become entitled in relation to or in connection with the Security Assets, including those against any manufacturer, supplier, installer, builder, contractor, professional advisor, lessee or licensee and any guarantor or surety for the obligations of any such person and, to the extent that any of the Security Assets are now or at any time hereafter hired, leased or rented to any other person, the rights under the hiring, leasing or rental contract or agreement and any guarantee, indemnity or security for the performance of the obligation of such person and any other rights and benefits relating thereto; and

3.1.12all rights and benefits in respect of the Insurances and all claims and returns of premiums in respect thereof to the extent that they are not effectively assigned by Clause 3.3 below.

3.2Assignments

Subject to Clause 3.10,the Grantor, as legal and beneficial owner as continuing security for the payment, performance and discharge of all of the Secured Obligations hereby assigns and agrees to assign absolutely to the Collateral Agent as collateral agent for the Secured Parties by way of first fixed security, all its present and future right, title, interest and benefit in and to:

3.2.1(insofar as the same are capable of assignment) the benefit of:

(a)all rights of the Grantor to be paid or receive compensation under any statute by reason of any compulsory acquisition, requisition or other exercise of compulsory power in relation to the Scheduled Property or any part thereof or any refusal, withdrawal or modification of planning permission or approval relative thereto or any control or restriction imposed on or affecting the use of all or any part of the Scheduled Property and so that the production of this Deed to the local authority, government body or agency or other person liable to pay such compensation shall be a sufficient authority to such local authority, government body or agency or other person to pay the same to the Collateral Agent and the Collateral Agent shall have power to give good receipt therefor; and

(b)any covenant or undertaking for the making of roads and footpaths, laying down of sewers or the provision of all other usual services including street lighting and the payment of road charges or other private street improvement of the Scheduled Property and any indemnity against payment of such charges or expenses;

and hereby irrevocably appoints the Collateral Agent to be its attorney and in its name and on its behalf to:

(i)claim, assess, agree, recover any such compensation; and

(ii)exercise any such right or to give any such notice or counter-notice concerning the Scheduled Property as by or under any statute the Grantor may be entitled to exercise or give against or to any local or other competent or appropriate authority;

3.2.2(insofar as the same are capable of assignment) the Insurances and all proceeds in respect of the Insurances and all rights and benefits in respect of the Insurances (including all claims relating to the Insurances and all returns of premiums in respect thereof);  

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3.2.3(insofar as the same are capable of assignment)  all of its rights and benefits (but not its obligations) in respect of:

(a)the Relevant Contracts (including all monies payable to the Grantor and all claims, awards and judgments in favour of or received or receivable by the Grantor under or in connection with any Relevant Contracts);

(b)all occupational leases;

(c)all Rental Income;

(d)all guarantees of Rental Income contained in or relating to any occupational lease;

(e)all letters of credit issued in its favour; and

(f)all bills of exchange and other negotiable instruments held by it; and

3.2.4all of its rights in respect of any Intercompany Loans to which it is a party.

3.3Non-assignable

To the extent that any such right, title and interest described in Clause 3.2.2 or 3.2.3is not assignable or capable of assignment:

3.3.1the assignment purported to be effected by Clause 3.2 shall operate as:

(a)in the case of the Insurances, an assignment of any and all present and future proceeds of the Insurances; and

(b)in the case of the Relevant Contracts, occupational leases, guarantees of Rental Income and letters of credit (as the case may be) an assignment of all present and future damages, compensation, remuneration, profit, rent, income or monies which the Grantor may derive therefrom or be awarded or entitled to in respect thereof; and

in each case as continuing security for the payment and performance of the Secured Obligations; and

3.3.2the Grantor shall hold the benefit of any such right, title and interest in trust for the Collateral Agent.

3.4Floating Charge

The Grantor, as beneficial owner, as continuing security for the payment, performance and discharge of the Secured Obligations, hereby charges in favour of the Collateral Agent, for its benefit and the benefit of the other Secured Parties, by way of first floating charge all of the Grantor’s stock-in-trade, inventory and raw materials together with the whole of the Grantor’s undertakings, property, assets and rights whatsoever and wheresoever both present and future, other than any assets for the time being effectively mortgaged or charged to the Collateral on behalf of the Secured Parties by way of mortgage or fixed charge or effectively assigned to the Collateral Agent on behalf of the Secured Parties (whether at law or in equity) pursuant to Clause 3.1, 3.2 and 3.3 of this Deed or otherwise subject to an effective fixed security in favour of the Collateral Agent, for its benefit and the benefit of the other Secured Parties.

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3.5Crystallisation of Floating Charge

3.5.1The Collateral Agent may at any time:

(a)on or after the occurrence of an Event of Default which is continuing; and

(b)if it shall appear to the Collateral Agent that all or a substantial part of the Floating Charge Property is in danger of being seized or sold under any form of distress or execution levied or threatened to be levied or to be otherwise in jeopardy;

by notice in writing to the Grantor convert the floating charge with immediate effect into a fixed charge with regard to any Floating Charge Property specified in the notice.

3.5.2Notwithstanding Clause 3.5.1 and without prejudice to any rule of law which may have a similar effect, the floating charge shall automatically be converted with immediate effect into a fixed charge as regards the Floating Charge Property and without notice from the Collateral Agent to the Grantor or without any requirement for further or any action on the part of the Grantor or any other Secured Party on:

(a)the Grantor ceasing to carrying on its business;

(b)the presentation of a petition for the compulsory winding up of the Grantor;

(c)the convening of a meeting for the passing of a resolution for the voluntary winding up of the Grantor;

(d)the appointment by any person of a receiver and/or manager to the Grantor or any of its assets;

(e)the presentation of a petition for the appointment of an examiner to the Grantor or any related company;

(f)the creation or attempted creation of any Lien over all or any part of the Floating Charge Property without the prior consent in writing of the Collateral Agent or the levying or attempted levying by any person of any distress, execution, sequestration or other process against any of the Floating Charge Property; or

(g)the issuance of a notice to the Grantor striking the Grantor off the register of companies.

3.5.3The giving by the Collateral Agent of a notice under paragraph 3.5.1 above, or the occurrence of any event specified at paragraph 3.5.2 above, shall subject to the terms of the Intercreditor Agreementand the prior ranking conversion of any asset the subject of a floating charge in the First Security Deeds to a first fixed charge have the effect of converting any asset the subject of a floating charge under paragraph 3.4, into a first fixed charge in favour of the Collateral Agent, for its benefit and the benefit of the other Secured Parties, and thereupon the Collateral Agent shall immediately assume exclusive control of such assets, and the Grantor shall not be permitted to deal with such assets otherwise than with and subject to the prior written consent of the Collateral Agent. Where such assets include book debts of the Grantor, it shall not be permitted to release, exchange, settle, compromise, set-off, grant time or indulgence, or otherwise deal with such book debts and all monies received by it in respect of such book debts will be paid into a bank account of the Grantor and it shall not be permitted to make withdrawals or payments from any bank account without the prior written consent of the Collateral Agent.

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3.6Negative Pledge

3.6.1The Grantor shall not, save as otherwise permitted by the terms of the Loan Documents:

(a)create or permit to subsist any Lien on any Security Asset save for any Liens created under this Deed, the Domains Share Charge and the First Security Deeds; or

(b)sell, transfer, licence, lease, grant any option over or otherwise dispose of any Security Asset or enter into any agreement to sell, transfer, licence, lease, grant any option over or otherwise dispose of any Security Asset.

3.6.2The Grantor, without prejudice to Clause 3.6.1(a) and (b) above but in addition to the restrictions in those sub-clauses, shall not (save for any Liens created under this Deed and the First Security Deeds) sell, assign, charge, factor or discount or in any other manner deal with any of the Book Debt Receivables without the prior written consent of the Collateral Agent.

3.7After Acquired Property

If and whenever the Grantor shall acquire after the date of this Deed any freehold, leasehold or other immovable property it shall forthwith inform the Collateral Agent in writing of the acquisition and as soon as may be practicable if so required by the Collateral Agent deliver to the Collateral Agent the deeds and documents in its possession relating to the property so acquired and the Grantor shall, if required by the Collateral Agent, at the Grantor's own expense, execute, deliver, sign, and do all acts and deeds which shall be necessary to grant to the Collateral Agent a first fixed charge on such property in such form as the Collateral Agenton behalf of the Secured Parties shall require as further security for all monies intended to be hereby secured.  Forthwith upon the acquisition of any land, the title to which is registered or required to be registered under the Registration of Title Act, 1964, the Grantor shall give notice to the Collateral Agent and shall furnish the Collateral Agent with such information regarding such land as the Collateral Agent may reasonably require to register a Lien as a burden against the Charged Property.

3.8Validity of Charges

The charges hereby created shall be and shall be deemed to be effective and shall have effect whether or not the principal monies and interest and all other sums intended to be hereby secured or any part thereof shall be advanced before or after or upon the date of the execution of these presents.

3.9Continuing Obligations

Notwithstanding any other provisions of this Deed:

3.9.1the Grantor shall remain liable under any contracts (including the Relevant Contracts), agreements and other documents included in the Security Assets (to the extent set forth therein) to perform all of its duties and obligations thereunder to the same extent as if this Deed had not been executed;

3.9.2the exercise by the Collateral Agent of any of the rights hereunder shall not release the Grantor from any of its duties or obligations under such contracts, agreements and other documents; and

3.9.3the Collateral Agent shall not have any obligation or liability under any such contracts, agreements or other documents included in the Security Assets by reason of this Deed, nor shall the Collateral Agent be obligated to perform any of the obligations or duties or to discharge any of the liabilities of the Grantor thereunder or to make any payment or any enquiry as to the nature or sufficiency of any payment

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received by it or the Grantor or to take any action to collect or enforce any such contract, agreement or other document.

3.10Proviso for Redemption/Release/Reassignment

Upon satisfaction in full of the Secured Obligations and subject to the Grantor ceasing to have any liability (whether actual or contingent) to the Secured Parties in respect of the Secured Obligations in accordance with the terms of this Deed and the Lenders ceasing to be under any commitment to advance any amounts to any Borrower and upon the payment of all costs, charges and expenses incurred by the Collateral Agent or any Receiver in relation to this Deed effected by operation of law or pursuant to any judgment, decree or act of the Grantor the security hereby constituted shall be automatically released and all rights to the Security Assets shall revert to the Grantor.  The Collateral Agent will at any time thereafter at the request and cost of the Grantor(but subject to the rights and claims of any person having prior rights to the Security Assets or any of them) execute and do all such deeds, acts and things that may be necessary to surrender, reassign, discharge or release the charges and assignments hereby created and reconvey or surrender to the Grantor or its assigns the Security Assets.

SECTION 4.0 - ENFORCEABILITY OF SECURITY

4.1Events of Default

The security hereby constituted shall immediately become enforceable and the floating charge hereby granted shall immediately crystallise and become a specific charge and all rights of the Grantor to deal for any purpose whatsoever with the Security Assets or any part thereof following the occurrence of an Event of Default which is continuing.

SECTION 5.0 - RIGHTS AND POWERS OF THE LENDER

5.1Entry into Possession

At any time after the security hereby constituted shall have become enforceable the Collateral Agent may, in its absolute discretion:

5.1.1enforce all or any part of the security in any manner it sees fit and the power of sale and other powers conferred on mortgagees by the Act shall apply to this Deed in each case as varied or extended by this Deed without the need to obtain the consent of the Grantor or an order for possession under Sections 97 or 98 of the Act; and/or

5.1.2without further notice or demand, enter into possession of the Security Assets (or any part thereof); and/or

5.1.3sell, call in, collect, convert into money or otherwise deal with the Security Assets (or any part thereof) with the power to sell any of the Security Assets either together as one lot or in parcels and either by public auction, tender or private contract and either for a sum on account and a charge for the balance with full power upon every such sale to make any special or other stipulation as to the title or evidence of commencement of title or otherwise which the Collateral Agent and/or any Receiver shall think proper and with full power to give an option to purchase all or any part of the Security Assets, buy in, rescind or vary any contract for the sale of the Security Assets or any part thereof and to resell the same without being responsible for any loss which may be occasioned thereby and with full power to compromise and effect compositions and for the purposes aforesaid or any of them to execute and do all such assurances and things as it shall think fit and any and all monies expended by the Collateral Agentfor the Secured Parties and/or any Receiver under this Section shall be deemed to be expenses properly incurred by the Collateral Agent and/or any Receiver.

PROVIDED THAT Section 99 of the Act shall not apply to this Deed and neither the Collateral Agent nor any Receiver shall be obliged to take any steps to sell or lease the Security Assets

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(or any part thereof) after going into possession of the Security Assets (or any part thereof) and the Collateral Agent and any Receiver shall have absolute discretion as to the time of exercise of the power of sale and the power of leasing and all other powers conferred on them by the Act or otherwise.  The rights of the Collateral Agent and any Receiver are without prejudice to and in addition to any right of possession (express or implied) to which the Collateral Agent and/or any Receiver is otherwise entitled (whether by virtue of this Deed, operation of law,  statute, contract or otherwise).

5.2Further Right of Possession

In addition to the powers hereunder given the Collateral Agent may enter into possession of and hold or appoint a Receiver to take possession of any part of the Security Assets which may at any time appear to it in danger of being taken under any process of law by any creditor of the Grantor or to be otherwise from any cause whatever in jeopardy and to any Receiver appointed under this Clause the provisions of Clause 6.1 shall apply mutatis mutandis and the Collateral Agent may at any time give up possession or withdraw the receivership.

5.3Power of Sale

At any time after the security hereby constituted has become enforceable the power of sale and all other powers conferred on mortgagees by the Act shall be exercisable immediately without the need:

5.3.1for the occurrence of any of the events specified in sub-sections (a) to (c) of section 100(1) of the Act; or

5.3.2to give notice as specified in the final proviso to section 100(1) of the Act; or

5.3.3to obtain the consent of the Grantor or a court order authorising the exercise of the power of sale under sections 100(2) or (3) of the Act; or

5.3.4to give any notice to the Grantor under section 103(2) of the Act.

Section 94 of the Act shall not apply to any security constituted by this Deed or any enforcement of such security.

5.4Power of Leasing and Accepting Surrenders

The statutory powers of leasing conferred on the Collateral Agent and any Receiver are extended so as to authorise the Collateral Agent and any Receiver to lease, make agreements for leases, accept surrenders of leases and make agreements to accept surrenders of leases as it or he may think fit and without the need to comply with any provision of sections 112 to 114 of the Act.  Without prejudice to the generality of the foregoing, the Collateral Agent and any Receiver may exercise the statutory power to accept surrenders of leases conferred by the Act for any purpose that it or he thinks fit and not just for the purpose of granting new leases under section 112 of the Act and any new lease granted by the Collateral Agent or any Receiver following the acceptance of a surrender need not comply with the requirements of section 114(3) of the Act.

5.5Power to Conduct Business

At any time after the occurrence of an Event of Default which is continuing and until the whole of the Security Assets shall be sold, called in, collected or converted under the powers of conversion the Collateral Agent may if it shall think fit so to do, carry on the business of the Grantor in and with the Security Assets and may manage and conduct the same as it shall in its discretion think fit and for the purposes of the said business may employ such agents, managers, Receivers, accountants and servants upon such terms as to remuneration or otherwise as it shall think proper and may exercise all rights of voting conferred by any part of the Security Assets and otherwise deal with and exercise or permit to be exercised any powers or rights incidental to the ownership of any of the Security Assets on such terms and conditions

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and generally in such manner as it may deem expedient and generally may do or cause to be done all such acts and things and may enter into such arrangements respecting the Security Assets or any part thereof as it could do it if was absolutely entitled thereto and without being responsible for any loss or damage which may arise or be occasioned thereby. The Collateral Agent shall out of the profits and income of the Security Assets and the monies to be made by it in carrying on the said business pay and discharge the expenses incurred in and about the carrying on and management of the said business or in the exercise of any of the powers conferred by this Section or otherwise in respect of the Security Assets and all outgoings which it shall think fit to pay and shall pay and apply the residue of the said profits, income and monies in the same manner as hereinbefore provided with respect of the monies to arise from any sale, calling in, collection or conversion under the powers of conversion. 

5.6Due Date for Statutory Purposes

For the purpose of all powers implied by statute (but not otherwise), the Secured Obligations are deemed to have become due on the date of this Deed.

5.7Non-applicability of Sections 92 and 94 of the Act

Section 92 of the Act shall not apply to this Deed.  Section 94 of the Act shall not apply to the security constituted by this Deed or any enforcement of such security.

5.8Position of Third Parties

No person (including a purchaser) dealing with the Collateral Agent or any Receiver or its or his attornies or agents will be concerned to enquire:

5.8.1whether any of the Secured Obligations have become payable or remain due; or

5.8.2whether due notice has been given to any person; or

5.8.3whether any power which the Collateral Agent or any Receiver is purporting to exercise has become exercisable or has been or is being properly exercised; or

5.8.4whether the Receiver is authorised to act; or

5.8.5how any money paid to the Collateral Agent as collateral agent for the Secured Parties or to any Receiver is to be applied,

and all protections to purchasers contained in sections 105, 106 and 108(5) of the Act shall apply to any person (including a purchaser) dealing with the Collateral Agent or any Receiver in like manner as if the statutory powers of sale and appointing a receiver had not been varied or extended by this Deed.

5.9Receipt of Collateral Agent Good Discharge

Upon any sale, calling in, collection or conversion or other dealing under any of the provisions herein contained the receipt of the Collateral Agent or any Receiver for the purchase money of the Security Assets sold or for any other monies paid to it shall effectually discharge the purchaser or person paying the same therefrom and from being concerned to see to the application or the loss or misapplication thereof. 

5.10Application of Monies

Notwithstanding section 109 of the Act, the Collateral Agent shall hold the monies arising from any exercise of the powers of sale or conversion upon trust that it shall thereout in the first place pay or retain or provide for the payment or satisfaction of the costs and expenses and liabilities incurred in or about the execution of such powers or otherwise in relation to these presents and shall apply the residue of such monies in accordance with Clause 8.3 of the Credit Agreement. 

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SECTION 6.0 - APPOINTMENT OF RECEIVER

6.1Power of Appointment

At any time after the occurrence of an Event of Default which is continuing (and so that no delay or waiver of the right to exercise the powers hereby conferred shall prejudice the future exercise of such powers) and without the need for the occurrence of any of the events specified in section 108(1)(a) to (c) inclusive of the Act, the Collateral Agent may without further notice by writing under the hand of any director, general manager, assistant general manager or secretary for the time being of the Collateral Agent or any person authorised by any one of them in writing appoint a Receiver of the Security Assets or any part thereof and remove any Receiver so appointed and appoint another or others in his stead and/or appoint another person to act jointly with any such Receiver and the following provisions shall have effect:

6.1.1such appointment may be made either before or after the Collateral Agent shall have entered into or taken possession of the Security Assets or any part thereof;

6.1.2such Receiver shall have and be entitled to exercise all powers conferred by the Act, without the restrictions contained in the Act, in the same way as if the Receiver had been duly appointed under the Act and in addition, shall have the power on behalf of and at the cost of the Grantor to do or omit to do anything which the Grantor could do or omit to do in relation to the Security Assets or any part thereof and in particular but without limiting any powers hereinbefore referred to shall have power to do all or any of the following:  

(a)to enter upon, take possession of, collect and get in the Security Assets and for that purpose to take, defend or discontinue any proceedings or submit any matter to arbitration or mediation in the name of the Grantor;

(b)to re-let or let the Security Assets or any part thereof from time to time to such person or persons as he shall think fit for any term of years which he thinks right or on yearly monthly or weekly tenancies at the best rents which may be reasonably obtainable and to surrender or accept surrenders, grant licences or otherwise dispose of all or any of the Security Assets on such terms and conditions as he may think fit;

(c)to carry on, manage, develop, construct or diversify the business of the Grantor or any part thereof (or concur in so doing);

(d)to sell or concur in selling the Security Assets or any part thereof and to carry such sale into effect and by deed in the name and on behalf of the Grantor or otherwise convey the same to the purchaser thereof;

(e)to make any arrangement or compromise or enter into, vary or cancel any contracts which he shall think expedient in the interests of the Collateral Agent;  

(f)to make and effect all such repairs, improvements, structural and other alterations or extensions or demolitions or renewals of the Security Assets as he shall think fit and renew such of the plant, machinery and any other effects of the Grantor whatsoever as shall be worn out lost or otherwise become unserviceable without being responsible for loss or damage; and do anything else in connection with the Security Assets which the Receiver may think desirable for the purpose of making productive and increasing the letting or market value of the Security Assets or protecting the security hereby created; and

(g)to effect, maintain, renew, increase or vary such insurances as he shall, in his absolute discretion, think fit;

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(h)to promote the formation of a subsidiary company and/or companies of the Grantor with a view to such subsidiary company and/or companies purchasing, leasing, licensing or otherwise acquiring interests in all or any of the assets of the Grantor;

(i)to make allowances to, and re-arrangements with, any lessee, tenants or other persons from whom any rents and profits may be receivable (including the granting of any licences and reviewing rent in accordance with the terms of and varying the provisions of any leases affecting the Security Assets);

(j)to redeem any prior encumbrance and to settle and prove the accounts of the encumbrancer and accounts so settled and proved shall be conclusive and binding on the Grantor and the money so paid shall be a receivership expenses;

(k)to settle, adjust, refer to arbitration, compromise and arrange any claims, accounts, disputes, questions and demands with or by any person who is or claims to be a creditor of the Grantor or relating in any way to the Security Assets or any part thereof and take, defend, continue and discontinue any proceedings relating to the Security Assets or any part thereof;

(l)to appoint, hire and employ and to remunerate managers, agents, servants, attendants, workmen and others on such terms and generally in such manner as he shall think fit in connection with any exercise by him of any of the within powers or otherwise for any purpose connected with the Security Assets or any part thereof and to discharge any person so appointed, hired or employed; and

(m)generally, to use (at his option) the name of the Grantor in the exercise of all or any of the powers hereby conferred and to do all such other acts and things as maybe considered to be incidental or conducive to any of the matters and powers aforesaid and which the Receiver may or can lawfully do as agent for the Grantor;

6.1.3unless otherwise directed by the Collateral Agent, such Receiver may also exercise all the powers and authority vested in the Collateral Agent by these presents and in particular all powers vested in the Collateral Agent by Section 5.0 hereof;

6.1.4the Collateral Agent may from time to time fix the remuneration of such Receiver and direct payment thereof out of the Charged Property but the Grantor alone shall be liable for such remuneration;

6.1.5the Collateral Agent may from time to time or at any time require such Receiver to give security for the due performance of his duties as such Receiver and may fix the nature and amount of security to be so given but the Collateral Agent shall not be bound in any case to require any such security;

6.1.6the Collateral Agent shall be in no way responsible for any misconduct or negligence on the part of such Receiver;

6.1.7subject as provided in Section 5.0 and herein the provisions of any relevant enactment conferring powers on a mortgagee or Receiver shall apply to and be deemed to be conferred upon any Receiver appointed hereunder as if such provisions and powers were incorporated herein. 

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6.2Powers of Receiver to Borrow

Subject as provided in this Section, any Receiver appointed under these presents may for the purpose of defraying his costs charges, losses or expenses (including his remuneration) which shall be incurred by him in the exercise of the powers, authorities and discretions vested in him and for all other purposes hereof or any of them, raise and borrow money on the security of the Security Assets or any part thereof either in priority to the security hereby constituted or otherwise and on such terms and conditions as he may think fit and no person lending any such money shall be concerned to enquire as to the propriety or purpose of the exercise of this power or to see to the application of any monies so raised or borrowed provided that no Receiver shall exercise this power without first obtaining the written consent of the Collateral Agent but the Collateral Agent shall incur no responsibility or liability to the Grantor or otherwise by reason of its giving or refusing such consent whether absolutely or subject to any limitation or condition.

6.3Application of Monies by Receiver

The net profits of carrying on the said business and/or the net proceeds of any sale by the Receiver shall subject to any prior ranking claims thereon, and notwithstanding section 109 of the Act, be applied by him as follows:

6.3.1firstly, in payment of all costs, charges and expenses of and incidental to the appointment of the Receiver and the exercise by him of all or any of the powers aforesaid including the remuneration of the Receiver and all outgoings properly paid by him; and

6.3.2secondly, in or towards payment in the manner provided in Clause 8.3 of the Credit Agreement,

PROVIDED THAT if the Receiver shall be of the opinion that the security may prove deficient payments may be made on account of unpaid principal monies before unpaid interest due under these presents but such alteration in the order of payment of principal monies and interest shall not prejudice the right of the Collateral Agent to receive the full amount to which it would have been entitled if the primary order of payment had been observed or any less amount which the sum ultimately realised may be sufficient to pay.

6.4Liability of the Collateral Agent and Receiver

TheCollateral Agentand any Receiver appointed by the Collateral Agent under this Deed shall not, in any circumstances, whether by reason of the Collateral Agent or such Receiver entering into possession of the Security Assets or any part thereof or for any other reason whatsoever be liable to account as mortgagee in possession or on any basis whatsoever for anything except actual receipts or be liable for any loss arising from any realisation of the Security Assets or any part thereof or any default or omission in relation to the Security Assets or any exercise or non-exercise of any power, authority or discretion conferred on the Collateral Agent or any Receiver in relation to the Security Assets or any part thereof by or pursuant to this Deed or the Act.

6.5Receiver Agent of the Grantor

Any Receiver appointed hereunder shall be deemed to be the agent of the Grantor for all purposes and be in the same position as the Receiver duly appointed under the Act in connection with his powers and duties hereunder save so far as he shall be specifically authorised to engage the responsibility of the Collateral Agent or shall expressly undertake personal liability which he shall not be deemed to do by entering into any contract as or in which he is described as Receiver and the Grantor shall be solely responsible for all acts and defaults of the Receiver as agent for the Grantor and for such remuneration of the Receiver as the Collateral Agent shall consider reasonable and be liable under any contracts or engagements made or entered into by him and the Collateral Agent shall not in making the

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appointment or in consenting thereto incur any liability for any such acts or defaults or otherwise save in the case of fraud, gross negligence or wilful misconduct.

6.6Section 108 of the Act

The provisions of section 108 of the Act (with the exception of sub-sections 1(a) and (b) thereof and save so far as modified by the provisions hereof) shall apply to these presents and to any Receiver appointed by the Collateral Agent hereunder.  Section 108(7) of the Act shall not apply to the commission and/or remuneration of a Receiver appointed pursuant to this Deed.  A Receiver shall be entitled to remuneration at a rate to be fixed by agreement between such Receiver and the Collateral Agent (or failing such agreement to be fixed by the Collateral Agent).

SECTION 7.0 - Continuing Security, etc.

7.1Continuing Security

The security constituted by this Deed shall be  a continuing security which shall extend to all the Secured Obligations and shall not be considered as satisfied or discharged by any intermediate payment or settlement of all or any of the Secured Obligations and is in addition to and independent of and shall not prejudice, affect or merge with any other security which the Collateral Agent may hold at any time for any of the Secured Obligations and shall not be in any way prejudiced thereby or by the invalidity thereof.

7.2Opening of New Accounts

7.2.1If for any reason the security constituted hereby or pursuant hereto ceases to be a continuing security (other than by way of discharge of such security), any Secured Party may open a new account with or continue any existing account with the Grantor and the liability of the Grantor in respect of the Secured Obligations at the date of such cessation shall remain regardless of any payments in or out of any such account.

7.2.2At any time on receiving notice that the Grantor has created a Lien over any of the property or assets hereby charged the Collateral Agent and any Secured Party may close the then current account of the Grantor (if any) and open a new account with the Grantor and no monies paid or carried to the credit of such new account shall be appropriated towards or have the effect of discharging any part of the amount owing on this security at the date of such notice. 

7.3Reinstatement

7.3.1Where any discharge (whether in respect of the obligations of the Grantor or any security for those obligations or otherwise) is made in whole or in part or any arrangement is made on the faith of any payment, security or other disposition which is avoided or must be restored on insolvency, liquidation or otherwise without limitation, the liability of the Grantor under this Deed shall continue as if the discharge or arrangement had not occurred. 

7.3.2The Collateral Agent may concede or compromise any claim that any payment, security or other disposition is liable to avoidance or restoration.

7.4Waiver of Defences

7.4.1The liability of the Grantor hereunder will not be affected by any act, omission, circumstance, matter or thing which but for this provision would release or prejudice any of its obligations hereunder or prejudice or diminish such obligations in whole or in part, including without limitation, and whether or not known to the Grantor or any Secured Party:

23

(a)any time, indulgence or waiver granted to, or composition with, the Grantor or any other person; or

(b)the release of the Grantor or any other person under the terms of any composition or arrangement with any creditor of the Grantor; or

(c)the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect or take up or enforce any rights or remedies against, or any security over assets of, the Grantor or any other person or any non-presentment or non-observance of any formality or other requirement in respect of any instruments or any failure to realise the full value of any other security; or

(d)any legal limitation, disability, incapacity or lack of powers, authority or legal personality of or dissolution or change in the members or status of or other circumstance relating to, the Grantor or any other person; or

(e)any variation (however fundamental and whether or not involving any increase in the liability of the Grantor thereunder) or replacement of any Loan Document or any other document or security so that references to the Loan Documents or other documents or security in this Deed shall include each such variation or replacement; or

(f)any unenforceability, illegality, invalidity or frustration of any obligation of the Grantor or any other person under any Loan Document or any other document or security, or any failure of the Grantor to become bound by the terms of a Loan Document whether through any want of power or authority or otherwise; or

(g)any postponement, discharge, reduction, non-provability or other similar circumstance affecting any obligation of the Grantor under a Loan Document or any security granted therefor resulting from any insolvency, liquidation or dissolution proceedings or from any law, regulation or order, this Deed be construed as if there were no such circumstance,

to the intent that the Grantor's obligations under this Deed shall remain in full force, and this Deed shall be construed accordingly, as if there were no such circumstance, act, variation, limitation, omission, unenforceability, illegality, matter or thing.

The Collateral Agent shall not be concerned to see or investigate the powers or authorities of the Grantor or its officers or agents, and monies obtained or Secured Obligations incurred in purported exercise of such powers or authorities or by any person purporting to act on behalf of the Grantor shall be deemed to form a part of the Secured Obligations, and "Secured Obligations" shall be construed accordingly.

7.5Additional Security

This Deed is in addition to and is not in any way prejudiced by any other security now or hereafter held by the Collateral Agent.

SECTION 8.0 - shares

8.1Covenants relating to Shares

The Grantor hereby covenants with the Collateral Agent as collateral agent for the Secured Parties that in relation to the Shares it will at all times during the continuance of this security comply with the provisions set forth in the following Clauses of this Section, save to the extent otherwise permitted by the terms of the Credit Agreement.

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8.2Deposit of Title Documents

The Grantor shall:

8.2.1immediately upon the date of this Deed, or if acquired after the date of this Deed, forthwith following the acquisition of same, deposit with the Collateral Agent, or as the Collateral Agent may direct, all certificates and other documents of title or evidence of ownership in relation to any of the Shares; and

8.2.2execute in blank and deliver to the Collateral Agent all share transfer forms and all other documents which may be requested by the Collateral Agent in order to enable the Collateral Agent or its nominees to be registered as the owner or otherwise obtain a legal title to any of the Shares.

8.3Changes to Rights

The Grantor shall not take or allow the taking of any action on its behalf in relation to any of the Shares which would (in the opinion of the Collateral Agent) prejudice the value of, or the ability of the Collateral Agent to realise, the security created in this Deed.

8.4Calls

The Grantor shall pay all calls or other payments due and payable in respect of any of the Shares and in the event of the Grantor failing to do so, the Collateral Agent may, but shall not be obliged to, pay the calls or other payments on behalf of the Grantor.  The Grantor must immediately on request reimburse the Collateral Agent for any payment made by the Collateral Agent in respect of the foregoing.

8.5Other Obligations in respect of Shares

8.5.1The Grantor shall promptly copy to the Collateral Agent and comply with all requests for information which is within its knowledge relating to any of the Shares.  If it fails to do so, the Collateral Agent may elect to provide such information as it may have on behalf of the Grantor.

8.5.2The Grantor shall comply with all other conditions and obligations assumed by it in respect of any of the Shares.

8.6Voting and Dividend Rights

8.6.1Until the occurrence of an Event of Default which is continuing and upon the receipt of written notice from the Collateral Agent informing the Grantor otherwise:

(a)the Grantor may exercise the voting rights, powers and other rights in respect of the relevant Shares provided that such rights and powers must not be exercised in any manner which would prejudice the value of, or the ability of the Collateral Agent to realise, the security created by this Deed; and

(b)all dividends or other income paid or payable in relation to any investments shall be paid directly to the Grantor.

The Grantor shall indemnify the Collateral Agent against any loss or liability incurred by the Collateral Agent as a consequence of the Collateral Agent acting in respect of the Shares on the direction of the Grantor unless such loss or liability is caused by the negligence or wilful default of the Collateral Agent.

8.6.2Upon the occurrence of an Event of Defaultwhich is continuing and upon the receipt of written notice from the Collateral Agent informing the Grantor otherwise, the Collateral Agent may exercise (in the name of the Grantor and without any further

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consent or authority on the part of the relevantcompany) any voting rights and any powers or rights which may be exercised by the legal or beneficial owner of any Share, any person who is the holder of any investment.

SECTION 9.0 - security accounts

9.1Covenants relating to Security Accounts

The Grantor hereby covenants with the Collateral Agent as collateral agent for the Secured Parties that in relation to the Security Accounts it will at all times during the continuance of this security comply with the provisions set forth in the following Clauses of this Section 9.0, save to the extent otherwise permitted by the Credit Agreement.

9.2Security Accounts

All Security Accounts must, unless the Collateral Agent otherwise agrees in writing, be maintained with an Account Bank.

9.3Withdrawals

9.3.1The Grantor shall not,following the occurrence of an Event of Default which is continuing, withdraw any moneys from a Security Account except with the prior consent of the Collateral Agent.

9.3.2Subject as provided in Clause 9.3.1, the Collateral Agent (or a Receiver) may withdraw amounts standing to the credit of a Security Account to meet an amount due and payable in accordance with the terms of the Loan Documents when it is due and payable.

9.4Notices of Charge

Upon execution and delivery of this Deed, theGrantor shall immediately:

9.4.1give notice to any relevant Account Bank substantially in the form of Part 1 of Schedule 3 (Form of Letters for Security Account); and

9.4.2use its best endeavours to ensure that the Account Bank acknowledges the notice substantially in the form of Part 1 of Schedule 3  (Form of Letters for Security Account).

SECTION 10.0 - book debt receivables account

10.1Covenants relating to Book Debt Receivables Account

The Grantor hereby covenants with the Collateral Agent as collateral agent for the Secured Parties that in relation to the Book Debt Receivables Account it will at all times during the continuance of this security comply with the provisions set forth in the following Clauses of this Section 10.0, save to the extent otherwise permitted by the Credit Agreement.

10.2Book Debt Receivables Account

The Book Debt Receivables Account must, unless the Collateral Agent otherwise agrees in writing, be maintained with an Account Bank.

10.3Receipts

The Grantor shall get in and realise its Book Debt Receivables in the ordinary course of its business and hold the proceeds of the getting in and realisation on trust for the Collateral Agent for the Secured Parties

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10.4Withdrawals

10.4.1The Grantor shall not, without the prior written consent of the Collateral Agent, withdraw any moneys from Book Debt Receivables Account.

10.4.2The Collateral Agent (or a Receiver) may withdraw amounts standing to the credit of a Book Debt Receivables Account to meet any Secured Obligation due and payable in accordance with the terms of theLoan Documents when it is due and payable.

10.5Notices of Charge

10.5.1Upon execution and delivery of this Deed, the Grantorshall immediately deliver to the Account Bank with which the Book Debt Receivables Account is maintained, a notice to the Account Bank, and procure that the Account Bank has signed and delivered to the Collateral Agent, a letter, in each case substantially in the form of Part 4 of Schedule 3(Form of Notice to Account Bank operating Book Debts Receivables Accounts).

10.5.2Upon receipt of the acknowledgement in Clause  10.5.1 above from the Account Bank, the Collateral Agent will send a letter to that branch substantially in the form of Part 4 of Schedule 3  (Form of Letters for Book Debt Receivables Account).

10.5.3The Grantor shall:

(a)collect all Book Debt Receivables in the ordinary course of trading as agent for the Collateral Agent;

(b)immediately upon receipt pay all monies which it may receive in respect of the Book Debt Receivables into the Book Debt Receivables Account;

(c)pending such payment into a Book Debt Receivables Account hold all monies so received upon trust for the Collateral Agent.

10.6Legal Assignment

The Grantor shall, if called upon to do so by the Collateral Agent, execute and deliver to the Collateral Agent a legal assignment of its then Book Debt Receivables and other debts on such terms as the Collateral Agent may require and give notice thereof to the debtors from whom the same are due owing or incurred and take any other steps as the Collateral Agent may require to perfect such legal assignment.

SECTION 11.0 - Relevant Contracts/Insurances

11.1Covenants relating to Relevant Contracts and Insurances

The Grantor hereby covenants with the Collateral Agent as collateral agent for the Secured Parties that in relation to the Relevant Contracts and Insurances it will at all times during the continuance of this security comply with the provisions set forth in the following Clauses of this Section.

11.2Preservation

The Grantor shall not, without the prior written consent of the Collateral Agent:

11.2.1amend or waive any term of, or terminate, any Relevant Contract to which it is a party; or

11.2.2take any action which might jeopardise the existence or enforceability of any such Relevant Contract.

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11.3Further Undertakings

The Grantor hereby further undertakes with the Collateral Agent that it shall:

11.3.1duly and promptly perform its obligations, and diligently pursue its rights, under each Relevant Contract to which it is a party; and

11.3.2supply the Collateral Agent and any Receiver with copies of each Relevant Contract and any information and documentation relating to any Relevant Contract requested by the Collateral Agent or any Receiver.

11.4Notices of Assignment

Upon execution and delivery of this Deed, the Grantor shall immediately serve a notice of assignment:

11.4.1in relation to the Insurances, substantially in the form of Part 3 of Schedule 3 (Notice of Assignment of Insurances);

11.4.2in relation to the Relevant Contracts, substantially in the form set out in Part 2 of Schedule 3 (Notice to Contract Party), on each counterparty to a Relevant Contract to which it is a party; and

11.4.3use its best endeavours to procure that each such party acknowledges that notice, substantially in the form of Part 3 of Schedule 3 (Letter of Undertaking) or Part 2 of Schedule 3 (Acknowledgement from Contract Party) as the case may be.

SECTION 12.0 - intellectual property

12.1Covenants relating to Intellectual Property

The Grantor hereby covenants with the Collateral Agentas collateral agent for the Secured Parties that in relation to the Intellectual Property it will at all times during the continuance of this security comply with the provisions set forth in the following Clauses of this Section.

12.2Intellectual Property

The Grantor shall:

12.2.1if it shall become aware of any infringement of its Intellectual Property, at once give the Collateral Agent all information in its possession with regard thereto and at its own cost commence and diligently prosecute and permit the Collateral Agent in the name, and at the cost of the Grantor, to commence and prosecute all proceedings which in the sole opinion of the Collateral Agent are necessary to prevent such infringement or to recover damages in respect thereof;

12.2.2not, without prior written consent of the Collateral Agent in relation to its Intellectual Property or any part thereof grant any exclusive registered user agreement or exclusive licence;

12.2.3lodge all notices, complete all filings and registrations and do all other acts as may be necessary to ensure that its Intellectual Property is valid and subsisting and remains vested in it and take all such actions and proceedings as are reasonably necessary to protect such Intellectual Property and if any or all such Intellectual Property shall at any time become void to lodge all notices and do all acts as may be necessary to restore such Intellectual Property to it and in particular to pay all fees as may be necessary for all of the above purposes before the same shall become due.

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SECTION 13.0 - General provisions

13.1Assignment

13.1.1The Grantor may not assign, transfer or delegate any of its rights or obligations under this Deed without the prior written consent of the Collateral Agent.

13.1.2The Collateral Agent may assign, transfer or delegate any of its rights or obligations under this Deed without the prior written consent of or notice to the Grantor.

13.2Consolidation

The statutory restrictions on the consolidation of mortgages shall not apply to this security.

13.3Protection of Purchaser

Where a conveyance is made in professed exercise of the power of sale applicable hereto the title of the purchaser (the "Purchaser") shall not be impeachable on the grounds that no case has arisen to authorise the sale or that due notice was not given or that the power was otherwise improperly exercised and the Purchaser shall not either before or on conveyance be concerned to see or inquire whether a case has arisen to authorise the sale or due notice has been given or the power is otherwise than properly or regularly exercised but this provision shall not prejudice a claim for damages against the person exercising the power or any person damnified by an unauthorised or improper or irregular exercise thereof.

13.4No Waivers, Remedies Cumulative

No failure on the part of the Collateral Agent (or any Secured Party) to exercise, nor any delay in exercising any right, remedy, power or privilege under this Deed or any Loan Document will operate as a waiver thereof, nor will any single or partial exercise of any such right, remedy, power or privilege preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges under this Deed are cumulative and not exclusive of any such right, remedy, power or privilege that may otherwise be available to the Collateral Agent or any Secured Party.

13.5Set-off

In addition to any other right of set-off to which the Collateral Agent(or any Secured Party) may at any time be entitled (whether by agreement, operation or law or otherwise), the Collateral Agent (or any Secured Party) may at any time after the occurrence and during the continuance of an Event of Default (both before and after any demand hereunder and without notice) set-off any liability of the Grantor to the Collateral Agent (or any Secured Party) (whether actual or contingent and whether or not then due and payable) against any credit balance on any account of the Grantor with the Collateral Agent(or any Secured Party) and may retain the whole or any part of such credit balance to meet the liability of the Grantor to the Collateral Agent (or any Secured Party).

13.6Preferential Claims

The Grantor shall procure that all debts and obligations to or in respect of persons employed by the Grantor which by law may have priority over the security hereby created shall be punctually duly paid and discharged. 

13.7Power of Attorney

13.7.1The Grantorby way of security irrevocably appoints the Collateral Agentas collateral agent for the Secured Parties (whether or not a Receiver has been appointed) and, also as a separate appointment, or any Receiver or Receivers appointed to be the attorney or attorneys of the Grantor for the Grantor and in the name and on behalf

29

of the Grantor as its act and deed to execute, deliver and perfect all documents and do all things which the attorney may consider to be required or desirable for:

(a)carrying out any obligation imposed on the Grantor by this Deed (including the execution and delivery of any deeds, charges, assignments or other security and any transfers of any of the Security Assets); and

(b)enabling the Collateral Agent and/or any Receiver to exercise, or delegate the exercise of, any of the rights, powers and authorities conferred on them by or pursuant to this Deed or by law (including the exercise of any right of a legal or beneficial owner of any of the Security Assets).

13.7.2The Grantor shall ratify and confirm all things done and all documents executed by any attorney in the exercise or purported exercise of any of his powers. 

13.7.3The Power of Attorney referred to in this Deed shall become enforceable following the occurrence of an Event of Default which shall be continuing.

13.8Waiver

A waiver by the Collateral Agent(or any Secured Party) of any breach of any of the terms provisions or conditions hereof or the acquiescence by the Collateral Agent (or any Secured Party) in any act (whether commission or omission) shall not constitute a general waiver of such term provision or condition or of any subsequent act contrary thereto.

13.9Enforcement of Other Rights

The Grantor waives any right it may have of first requiring the Collateral Agent (or any Secured Party) to proceed against or enforce any other rights or security the Collateral Agent (or any Secured Party) may have or benefit from before enforcing the security constituted hereby.

13.10Appropriations

Until all the Secured Obligations have been unconditionally and irrevocably paid and discharged in full, the Collateral Agent as collateral agent for the Secured Parties may:

13.10.1refrain from applying or enforcing any other monies, security or rights held or received by it in respect of the Secured Obligations unless and until the amounts recovered by the Collateral Agent from the Grantor are sufficient to discharge in full all of the Secured Obligations PROVIDED THAT it holds any such other monies not applied in accordance with Clause 13.10.2 below or apply and enforce the same in such manner and order as it sees fit (whether against the Secured Obligations or otherwise) and the Grantor shall not be entitled to the benefit of the same; and

13.10.2hold in a suspense account any moneys received from the Grantor or on account of the Grantor's liability in respect of the Secured Obligations.  Amounts standing to the credit of any such suspense account shall bear interest at a rate considered by the Collateral Agent (acting reasonably) to be a fair market rate.

13.11Authority of the Collateral Agent

The Grantor acknowledges that the rights and responsibilities of the Collateral Agent under this Deed with respect to any action taken by the Collateral Agent or the exercise or non-exercise by the Collateral Agent of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Deed shall, as between the Collateral Agent and the other Secured Parties, be governed by the Credit Agreement and by such other agreements with respect thereto as may exist from time to time among them, but, as between the Collateral Agent and the Grantor, the Collateral Agent shall be conclusively presumed to be acting as collateral agent for the Secured Parties with full and valid authority

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so to act or refrain from acting, and the Grantor shall not be under any obligation or entitlement to make any inquiry respecting such authority.

13.12Duty; Obligations and Liabilities

The Collateral Agent’s sole duty with respect to the custody, safekeeping and physical preservation of the Security Assets in its possession shall be to deal with them in the same manner as the Collateral Agent deals with similar property for its own account.  The powers conferred on the Collateral Agent hereunder are solely to protect the Collateral Agent’s interest in the Security Assets and shall not impose any duty upon the Collateral Agent to exercise any such powers.  The Collateral Agent shall be accountable only for amounts that it receives as a result of the exercise of such powers, and neither it nor any of its Affiliates shall be responsible to the Grantor for any act or failure to act hereunder, except for their own gross negligence or wilful misconduct as finally determined by a court of competent jurisdiction.  In addition, the Collateral Agent shall not be liable or responsible for any loss or damage to any Security Assets, or for any diminution in the value thereof, by reason of the act or omission of any warehousemen, carrier, forwarding agency, consignee or other bailee if such Person has been selected by the Collateral Agent in good faith.

13.13Obligations and Liabilities with respect to Security Assets

No Secured Party and none of theirAffiliates thereof shall be liable for failure to demand, collect or realise upon any Security Assets or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Security Assets upon the request of the Grantor or any other person or to take any other action whatsoever with regard to any Security Assets.  The powers conferred on the Collateral Agent hereunder shall not impose any duty upon any Secured Party to exercise any such powers.  The Secured Parties shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and neither they nor any of their respective officers, directors, employees or agents shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross negligence or wilful misconduct as finally determined by a court of competent jurisdiction.

13.14Confirmation of Role of Collateral Agent and Additional Powers

The Collateral Agent confirms that it acts as collateral agent for the Secured Parties in respect of the Charged Property, in accordance with the terms and conditions of the Credit Agreement and this Deed, and in performing such role it shall have all of the other powers and rights granted to trustees pursuant to the Trustee Act 1893, as amended.

13.15Notices

Any notice, demand or other communication required or permitted to be given or made under this Deed shall be sent in the manner provided in Section 9.01 of the Credit Agreement and shall be addressed as follows:

(a)if to the Collateral Agent, to:

Address:	c/o Tennenbaum Capital Partners, LLC
	2951 28th Street
	Suite 1000
	Santa Monica
	California, 90405
Attention:	Asher Finci
Fax No.	(310) 889-4950

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with a copy to Proskauer Rose LLP at:
Address:	2049 Century Park East
	Suite 3200
	Los Angeles
	California, 90067
Attention:	Steven O. Weisse and Glen K. Lim
Fax No:	(310) 557-2193

(b)if to the Grantor, to:

Address:	Arthur Cox Building
	Earlsfort Centre
	Earlsfort Terrace
	Dublin 2
	Ireland
Attention:	David Ryan
Fax No.	+353 1 9012199

13.16Non-Competition

13.16.1Until all the Secured Obligations have been unconditionally and irrevocably paid and discharged in full the Grantor shall not by virtue of any payment made, security realised or monies received or recovered under the Loan Documents or any security therefor for or on account of the liability of any third party:

(a)be subrogated to any rights, security or moneys held, received or receivable by any Secured Party or any trustee or agent on their behalf) or be entitled to any right of contribution or indemnity; or

(b)claim, rank, prove or vote as a creditor of any other Loan Party or its estate in competition with the Collateral Agent (or any trustee or agent on its behalf); or

(c)receive, claim or have the benefit of any payment, distribution or security from or on account of any other Loan Party, or exercise any right of set-off as against any other Loan Party.

13.16.2The Grantor will hold in trust for and forthwith pay or transfer to the Collateral Agent any payment or distribution or benefit of security received by it contrary to the provision of this Clause 13.16.  If theGrantor exercises any right of set-off contrary to the above, it will forthwith pay an amount equal to the amount set off to the Collateral Agent.  

13.17Counterparts

This Deed may be executed in any number of counterparts and by the parties to this Deed on separate counterparts, each of which, when executed and delivered, shall constitute an original, but all the counterparts shall together constitute but one and the same instrument.

13.18Governing Law and Jurisdiction

13.18.1This Deed shall be governed by and construed in accordance with the laws of Ireland.

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13.18.2The Grantor hereby agrees for the exclusive benefit of the Collateral Agent that any legal action or proceeding (the "Proceedings") brought against it with respect to this Deed may be brought in the High Court in Ireland or such other competent Court of Ireland as the Collateral Agent may elect and the Grantor waives any objection to the Proceedings being taken in such courts whether on the grounds of venue or on the ground that the Proceedings have been brought in an inconvenient forum.  The Grantor undertakes to enter an unconditional appearance within 14 days after the completion of any service or process of any Proceedings.  The Grantor hereby consents to the service by post of any process issued in that jurisdiction.  Nothing herein shall affect the Collateral Agent's right to serve process in any other manner permitted by law.

13.18.3Nothing in this Clause shall limit the right of the Collateral Agent to take Proceedings to any other court or competent jurisdiction nor shall the taking of Proceedings in any or more jurisdictions preclude the taking of Proceedings in any other jurisdiction (whether concurrently or not).

IN WITNESS whereof the parties have executed and delivered this Deed on the date first specified above.

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SCHEDULE  1

Scheduled Property

None at the date of this Deed.

34

schedule  2

Part 1

The Fixtures and Fittings

None at the date of this Deed.

Part 2

The Relevant Contracts

1.The Business and Assets Transfer Agreement

2.The Loan Agreement

part 3

The Licences

None at the date of this Deed.

Part 4

The Shares

None at the date of this Deed.

Part 5

The Intellectual Property

None at the date of this Deed.

Part 6

The Security Accounts

None at the date of this Deed.

Part 7

The Book Debt Receivable Account

None at the date of this Deed.

PART  8

The Insurances

None at the date of this Deed.

35

schedule3

PART 1

Form of Letters for Security Account

Part A

Notice to Account Bank

[On the letterhead of the Grantor]

To:[Account Bank]

[Date]

Dear Sirs

Security Deed dated [                      ] 2014 (the "Security Deed")between (1) DMIH Limitedand (2) Obsidian Agency Services, Inc. (acting as collateral agent for the Secured Parties) (the “Collateral Agent”)

1.This letter constitutes notice to you that pursuant to the Security Deed we have charged (by way of a first fixed charge) in favour of the Collateral Agent, for its benefit and the benefit of the other Secured Parties, all our right, title and interest in respect of any monies standing to the credit of the accounts maintained by us with you, more particular details of which are set out in the Schedule to this Notice (the "Accounts").

2.We irrevocably instruct and authorise you to:

2.1disclose to the Collateral Agent any information relating to any Account requested from you by the Collateral Agent;

2.2comply with the terms of any written notice or instruction relating to any Account received by you from the Collateral Agent;

2.3hold all sums standing to the credit of any Account to the order of the Collateral Agent; and

2.4pay or release any sum standing to the credit of any Account in accordance with the written instructions of the Collateral Agent.

3.We are not permitted to withdraw any amount from any Account without the prior written consent of the Collateral Agent.

4.We acknowledge that you may comply with the instructions in this letter without any further permission from us.

5.We enclose a copy of the Security Deed.

6.The instructions in this letter may not be revoked or amended without the prior written consent of the Collateral Agent.

7.This letter is governed by Irish law.

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8.Please confirm your agreement to the above by sending the attached acknowledgement to the Collateral Agent at [                   ] with a copy to ourselves.

Yours faithfully

………………………………

(Authorised signatory)

DMIH Limited

Schedule

The Security Accounts

[Details]

37

Part B

Acknowledgement of Security Account Bank

[On the letterhead of the Account Bank]

To:Obsidian Agency Services, Inc. (acting as collateral agent for the Secured Parties)

Copy:[Grantor]

[Date]

Dear Sirs

Security Deed dated [                      ] 2014 (the "Security Deed")between (1) DMIH Limitedand (2) Obsidian Agency Services, Inc. (acting as collateral agent for the Secured Parties) (the “Collateral Agent”)

We confirm receipt from DMIH Limited (the "Grantor") of a notice (the "Notice") dated [                      ] 2014 with respect to a charge under the terms of the Security Deed over all the right, title and interest of the Grantor to any amount standing to the credit of any of the Grantor's accounts with us (the "Accounts").

We confirm that we:

9.accept the instructions contained in the notice and agree to comply with the Notice;

10.have not received notice of the interest of any third party in any Account;

11.have neither claimed nor exercised, nor will claim or exercise, any security interest, set-off, counterclaim or other right in respect of any Account; and

12.will not permit any amount to be withdrawn from any Account without your prior written consent.

The Accounts maintained with us are:

[Specify accounts and account numbers]

This letter is governed by Irish law.

Yours faithfully

…………………………………

(Authorised signatory)

[Account Bank]

38

Part 2

Forms of Letter for Contracts

Part A

Notice to Counterparty

To:[Contract party]

[Date]

Dear Sirs

Security Deed dated [                      ] 2014 (the "Security Deed") between (1) DMIH Limited and (2) Obsidian Agency Services, Inc. (acting as collateral agent for the Secured Parties) (the “Collateral Agent”)

13.This letter constitutes notice to you that under the Security Deed we have assigned by way of security to the Collateral Agent all our right, title and interest in and to [insert details of Contracts or add a schedule of Contracts] (the "Contracts").

14.We confirm that:

14.1we will remain liable under the Contracts to perform all the obligations assumed by us under the Contracts; and

14.2none of the Collateral Agent, its agents, any receiver or any other person will at any time be under any obligation or liability to you under or in respect of the Contracts.

15.We will also remain entitled to exercise all our rights, powers and discretions under the Contracts, and you should continue to give notices under the Contracts to us, unless and until you receive notice from the Collateral Agent to the contrary stating that the security has become enforceable.  In this event, all the rights, powers and discretions will be exercisable by, and notices must be given to, the Collateral Agent or as it directs.

16.Please note that we have agreed that we will not amend or waive any provision of or terminate the Contracts without the prior consent of the Collateral Agent.

17.This letter is governed by Irish law.

Please acknowledge receipt of this letter by sending the attached acknowledgement to the Collateral Agent at [                      ].

Yours faithfully

…………………………

(Authorised signatory)

DMIH LIMITED

39

Part B

Acknowledgement of Counterparty

To:Silicon Valley Bank

Copy:DMIH Limited

[Date]

Dear Sirs

We confirm receipt from DMIH Limited (the "Grantor") of a notice dated [                      ] (the "Notice") of an assignment on the terms of the Security Deed dated [                      ] 2014 of all the Grantor's right, title and interest in and to [insert details of the Contracts] (the "Contracts").

We confirm that we will pay all sums due, and give notices, under the Contracts as directed in the Notice.

This letter is governed by Irish law.

Yours faithfully

……………………………..

(Authorised signatory)

[Counterparty]

40

Part 3

Part A

Notice of Assignment of Insurances

(for attachment by way of endorsement to the Insurance Policies)

To:[Insurer]

[Date]

We, DMIH Limited hereby give notice that by a Security Deed dated [               ], between (1) DMIH Limited and (2) Obsidian Agency Services, Inc. (acting as collateral agent for the Secured Parties) (the “Collateral Agent”),we have assigned to the Collateral Agent the policies of insurance more particular details of which are set out in the Schedule to this Notice (the "Policies") and all our interest (including the benefit of all money owing or to become owing to us in respect of the Policies together with all interest thereon).

We hereby irrevocably authorise and instruct you to issue a letter of undertaking, in the form attached, to the Collateral Agentand to act on the instructions of the Collateral Agent in the manner provided in that letter without any further reference to or authorisation from us.

This letter shall be governed by Irish law.

Yours faithfully

…………………………

(Authorised signatory)

DMIH LIMITED

41

SCHEDULE

Policies

42

Part B

Letter of Undertaking

To:Obsidian Agency Services, Inc. (acting as collateral agent for the Secured Parties) (the “Collateral Agent”)

[Date]

Dear Sirs,

Letter of Undertaking

In accordance with an assignment of the insurance policies referred to in the Schedule to this letter (the "Policies") made by DMIHLimited (the "Grantor") we undertake:

18.to note your interest as loss payee on the Policies;

19.to disclose to you without any reference to or further authority from the Grantor such information relating to the Policies as you may at any time request;

20.not to release any of the Policies on request by the Grantor without your prior written consent;

21.following written notification from you of the occurrence of an Event of Default which is outstanding, to pay all claims payable under the policies of Insurance to you unless you otherwise agree in writing and save as obliged by law.

This letter shall be governed by Irish law.

Yours faithfully,

..............................
for and on behalf of

[Insurer]

43

SCHEDULE

Policies

44

part 4

Form of notice to and acknowledgement from bank operating Book Debt Receivables Account

To:[insert name and address of Account Bank]

Dear Sirs,

Re:	Account Holder:	DMIH Limited (the "Grantor")
	Account No:	(the "Book Debt Receivables Account")
	Account Branch: [insert branch address]

22.We give notice that, by a Security Deed dated 2014 (the "Security Deed")between (1) the Grantor and (2)Obsidian Agency Services, Inc. (acting as collateral agent for the Secured Parties)  (the "Collateral Agent"),the Grantor has charged to the Collateral Agent all its present and future right, title and interest in and to:

22.1[the Book Debt Receivables, the Book Debt Receivables Account, all monies from time to time standing to the credit of the Book Debt Receivables Account and all additions to or renewals or replacements thereof (in whatever currency); and

22.2all monies standing to the credit of any other accounts from time to time maintained with you by the Grantor,]

(together the "Charged Accounts") and to all interest from time to time accrued or accruing on the Charged Accounts and all rights to repayment of any of the foregoing by you.

23.We advise you that, under the terms of the Security Deed, we are not entitled to withdraw any monies from the Book Debt Receivables Accounts without first having obtained the prior written consent of the Collateral Agent.

24.We irrevocably authorise and instruct you from time to time:

24.1unless the Collateral Agent so authorises you, not to permit withdrawals from the Security Accounts;

24.2to hold all monies from time to time standing to the credit of the Charged Accounts to the order of the Collateral Agent;  

24.3to pay all or any part of the monies standing to the credit of the Charged Accounts to the Collateral Agent (or as it may direct) promptly following receipt of written instructions from the Collateral Agent to that effect; and

24.4to disclose to the Collateral Agent such information relating to the Grantor and the Charged Accounts as the Collateral Agent may from time to time request you to provide.

24.5[to pay all monies received by you for our account to (and only to) [specify account].]

25.We agree that you are not bound to enquire whether the right of the Collateral Agent to withdraw any monies from any Charged Account has arisen or be concerned with the propriety or regularity of the exercise of that right or to be concerned with notice to the contrary or be

45

concerned with or responsible for the application of any monies received by the Collateral Agent.

26.The provisions of this notice may only be revoked or amended with the prior written consent of the Collateral Agent. 

27.Please confirm by completing the enclosed copy of this notice and returning it to the Collateral Agent (with a copy to the Grantor) that:

27.1you agree to act in accordance with the provisions of this notice;

27.2you have not, at the date this notice is returned to the Collateral Agent, received notice of any assignment or charge of or claim to the monies standing to the credit of any of the Charged Accounts or the grant of any security or other interest over those monies in favour of any third party and you will notify the Collateral Agent promptly if you should do so in the future; and

27.3you do not now and will not in the future exercise any right to combine accounts or any rights of set-off or lien or any similar rights in relation to the monies standing to the credit of the Charged Accounts.

28.This notice (and any acknowledgement) shall be governed by and construed in accordance with the laws of Ireland.

Yours faithfully,

______________________________

for and on behalf of

DMIH LIMITED

Countersigned by

______________________________

for and on behalf of

[                      ]

46

[On Copy]

To:Obsidian Agency Services, Inc. (acting as collateral agent for the Secured Parties)

Copy to:  DMIH Limited

We acknowledge receipt of the above notice. We confirm and agree:

(a)that the matters referred to in it do not conflict with the terms which apply to any Charged Account; and

(b)the matters set out in paragraphs 1 to 3 in the above notice.

_________________________

for and on behalf of

[Account Bank]

Dated: [                      ]

47

EXECUTION PAGE

Grantor

LIMITED
GIVEN under the COMMON SEALof DMIH LIMITED and delivered as a deed:	/s/ Rick Danis
	Director
	David Panos
	Director/Secretary

Collateral Agent

as collateral agent for the Secured Parties:
SIGNEDANDDELIVERED as a deed by OBSIDIAN AGENCY SERVICES, INC. as collateral agent for the Secured Parties:
By:	/s/ Howard Levkowitz
Name:	Howard Levkowitz
Title:	President

48

EX-10.16

Exhibit 10.16

RIGHTSIDE DOMAINS EUROPE LIMITED

(as Grantor)

OBSIDIAN AGENCY SERVICES, INC.

(as Collateral Agent for the Secured Parties)

SECURITY DEED

(DEBENTURE)

William Fry

Solicitors

Fitzwilton House

Wilton Place

Dublin 2

www.williamfry.ie

© William Fry 2014

019068.0006.JCH

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CONTENTS

SECTION 1.0 - Interpretation	5
1.1    Credit Agreement	5
1.2    Additional Definitions	5
1.3    Interpretation	9
1.4    Certificates	10
1.5    Intercreditor Agreement	10
SECTION 2.0 - Nature of Security and Covenant To Pay	11
2.1    Nature of Security	11
2.2    Covenant to Pay	11
SECTION 3.0 - Fixed Charges, Assignments and Floating Charge	11
3.1    Fixed Charges	11
3.2    Assignments	13
3.3    Non-assignable	14
3.4    Floating Charge	14
3.5    Crystallisation of Floating Charge	14
3.6    Negative Pledge	15
3.7    After Acquired Property	15
3.8    Validity of Charges	16
3.9    Continuing Obligations	16
3.10  Proviso for Redemption/Release/Reassignment	16
SECTION 4.0 - ENFORCEABILITY OF SECURITY	16
4.1    Events of Default	16
SECTION 5.0 - RIGHTS AND POWERS OF THE LENDER	17
5.1    Entry into Possession	17
5.2    Further Right of Possession	17
5.3    Power of Sale	17
5.4    Power of Leasing and Accepting Surrenders	18
5.5    Power to Conduct Business	18
5.6    Due Date for Statutory Purposes	18
5.7    Non-applicability of Sections 92 and 94 of the Act	18
5.8    Position of Third Parties	19
5.9    Receipt of Collateral Agent Good Discharge	19
5.10 Application of Monies	19
SECTION 6.0 - APPOINTMENT OF RECEIVER	19
6.1    Power of Appointment	19
6.2    Powers of Receiver to Borrow	21
6.3    Application of Monies by Receiver	21
6.4    Liability of the Collateral Agent and Receiver	22
6.5    Receiver Agent of the Grantor	22
6.6    Section 108 of the Act	22
SECTION 7.0 - Continuing Security, etc.	22
7.1    Continuing Security	22
7.2    Opening of New Accounts	23
7.3    Reinstatement	23
7.4    Waiver of Defences	23
7.5    Additional Security	24

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SECTION 8.0 – Shares	24
8.1    Covenants Relating to Shares	24
8.2    Deposit of Title Documents	24
8.3    Changes to Rights	24
8.4    Calls	25
8.5    Other Obligations in respect of Shares	25
8.6    Voting and Dividend Rights	25
SECTION 9.0 - Security Accounts	25
9.1    Covenants Relating to Security Accounts	25
9.2    Security Accounts	25
9.3    Withdrawals	26
9.4    Notices of Charge	26
SECTION 10.0 - Book Debt Receivables Account	26
10.1    Covenants Relating to Book Debt Receivables Account	26
10.2    Book Debt Receivables Account	26
10.3    Receipts	26
10.4    Withdrawals	26
10.5    Notices of Charge	26
10.6    Legal Assignment	27
SECTION 11.0 - Relevant Contracts/Insurances	27
11.1    Covenants relating to Relevant Contracts and Insurances	27
11.2    Preservation	27
11.3    Further Undertakings	27
11.4    Notices of Assignment	27
SECTION 12.0 - Intellectual Property	28
12.1    Covenants Relating to Intellectual Property	28
12.2    Intellectual Property	28
SECTION 13.0 - General Provisions	28
13.1    Assignment	28
13.2    Consolidation	28
13.3    Protection of Purchaser	28
13.4    No Waivers, Remedies Cumulative	29
13.5    Set-off	29
13.6    Preferential Claims	29
13.7    Power of Attorney	29
13.8    Waiver	30
13.9    Enforcement of Other Rights	30
13.10  Appropriations	30
13.11  Authority of the Collateral Agent	30
13.12  Duty; Obligations and Liabilities	30
13.13  Obligations and Liabilities with Respect to Security Assets	31
13.14  Confirmation of Role of Collateral Agent and Additional Powers	31
13.15  Notices	31
13.16  Non-Competition	32
13.17  Counterparts	32
13.18  Governing Law and Jurisdiction	32
Scheduled Property	33
Schedule 2	34

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Part 1	34
The Fixtures and Fittings	34
Part 2	34
The Relevant Contracts	34
Part 3	34
The Licences	34
Part 4	34
The Shares	34
Part 5	34
The Intellectual Property	34
Part 6	34
The Security Accounts	34
Part 7	34
The Book Debt Receivable Account	34
SCHEDULE  3	35
PART 1	35
Form of Letters for Security Account	35
Part A	35
Notice to Account Bank	35
Part B	37
Acknowledgement of Security Account Bank	37
Part 2	38
Forms of Letter for Contracts	38
Part A	38
Notice to Counterparty	38
Part B	39
Acknowledgement of Counterparty	39
Part 3	40
Part A	40
Notice of Assignment of Insurances	40
Part B	42
Letter of Undertaking	42
Part 4	44
Form of Notice to and Acknowledgement From Bank Operating Book Debt Receivables Account	44

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THIS DEED is made onAugust 6, 2014

BETWEEN:

(1)RIGHTSIDE DOMAINS EUROPE LIMITED, a company incorporated in Ireland with registered number 499862 and having its registered office at Arthur Cox Building, Earlsfort Terrace, Dublin 2 (the “Grantor”); and

(2)OBSIDIAN AGENCY SERVICES, INC. as collateral agent for the Secured Parties (the “Collateral Agent”).

RECITALS

A.Rightside Group, Ltd., the direct parent company of the Grantor, has entered into the Credit Agreement with, amongst others, the Lenders and the Collateral Agent.

B.It is a condition of the Credit Agreement that the Grantor enter into this Deed in favour of the Collateral Agent, for the benefit of the Collateral Agent and the benefit of the other Secured Parties.

C.The Grantor and the Collateral Agent intend this document to have effect as a Deed.

D.The Directors of the Grantor are satisfied that it is in the best interests of and for the corporate benefit of the Grantor to enter into this Deed.

E.The Collateral Agent enters into this Deed as collateral agent for the Lenders in accordance with the terms set out in the Credit Agreement and this Deed.

THIS DEED WITNESSES as follows:

SECTION 1.0 - INTERPRETATION

1.1Credit Agreement

Capitalised terms used in this Deed shall have the same meaning in this Deed as in the Credit Agreement unless otherwise provided in this Deed.

1.2Additional Definitions

In this Deed (including the Recitals) the following expressions shall, unless the context otherwise requires, have the following meanings, namely:

1.2.1"Act", the Land and Conveyancing Law Reform Act 2009;

1.2.2"Account Bank",  such bank as shall be approved by the Collateral Agent;

1.2.3"Assigned Property", all assets and property assigned by this Deed and such expression shall include any part or parts of the Assigned Property;

1.2.4"Book Debt Receivables", all present and future book debts and other debts, rentals, sales proceeds, royalties, fees, revenues, value added tax and monetary claims and all other amounts at any time recoverable or receivable by, or due or owing to, the Grantor (whether actual or contingent and whether arising under contract or in any other manner whatsoever) together with:

(a)the benefit of all rights, guarantees, Lienand remedies relating to any of the foregoing (including without limitation, claims for damages and other remedies for non-payment of the same, all entitlements to interest,

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negotiable and non-negotiable instruments, indemnities, reservations of property rights, rights of tracing and unpaid vendor's liens and similar associated rights);

(b)all things in action which may give rise to a debt, revenue or claim and all other rights and remedies of whatever nature in respect of the same; and

(c)all proceeds of any of the foregoing;

1.2.5"Book Debt Receivables Account", the bank account(s) in the name of the Grantor as more particularly listed in Part 7 of Schedule 2 (Book Debt Receivables Account) and with the banks and bearing the account numbers set out therein, or any account or accounts replacing the same from time to time (in whatever currency) and the debt represented thereby;

1.2.6“Business”, the business associated with managing, marketing and operating registries with respect to any gTLDs delegated by ICANN, which are operated in accordance with any registry agreement;

1.2.7“Business Intellectual Property Rights”, Intellectual Property Rights owned, used or held exclusively or predominantly in, or in connection with, the Business;

1.2.8"Charged Property", all property and assets charged by this Deed, the Floating Charge Property and the Scheduled Property and such expression shall include any part or parts of the Charged Property;

1.2.9"Companies Acts",  the Companies Acts 1963 to 2013 and Parts 2 and 3 of the Investment Funds, Companies and Miscellaneous Provisions Act 2006, the Companies (Amendment) Act 2009 and the Companies (Miscellaneous Provisions) Act 2009, including all Acts of the Oireachtas and statutory instruments which are to be read as one with, or construed or read together as one with, such Acts and Parts 2 and 3 of the Investment Funds, Companies and Miscellaneous Provisions Act 2006, and every statutory modification or re-enactment thereof for the time being in force (or, where the context so admits or requires, any one or more of such Acts;

1.2.10“Credit Agreement“, the credit agreement dated on or about the date of this Deed between (1) Rightside Group, Ltd. (as U.S. Borrower), (2)  United TLD HoldCo Limited (as Cayman Borrower, and, together with the U.S. Borrower, the “Borrowers”), the Lenders (as defined therein), and (3)  the Collateral Agent (as administrative agent and collateral agent);

1.2.11“First Security Deed”, the security deed (debenture) dated 1 August between the Grantor and Silicon Valley Bank (as security trustee for the Secured Parties (as defined therein));

1.2.12"Fixtures and Fittings", all present and future, fixed and moveable fixtures and fittings (including trade fixtures and fittings) and fixed plant, machinery, equipment, implements, motor vehicles and utensils from time to time on any freehold or leasehold property charged by or pursuant to this Deed or otherwise thereon or owned by the Grantor from time to time, including, but not limited to the fixtures, fittings, plant, machinery, equipment, implements, motor vehicles and utensils set out in Part 1 of Schedule 2  (Fixtures and Fittings);

1.2.13"Floating Charge Property", the property of the Grantor charged by way of floating charge pursuant to Clause 3.4 of this Deed;

1.2.14"Group", Rightside Group, Ltd., its holding company and its subsidiaries (if any) and any subsidiary or subsidiaries of its holding company (if any) from time to time;

1.2.15“ICANN”, means the Internet Corporation for Assigned Names and Numbers;

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1.2.16"Insurances", contracts and policies of insurance (including, for the avoidance of doubt, all cover notes), including but not limited to the contracts and policies, existing as at the date hereof and listed in Part 8 of Schedule 2  (Insurances) and such other contracts and policies which are taken out after the date of this Deed by or on behalf of the Grantor or (to the extent of such interest) in which the Grantor has an interest (and including, in each case, all key man policies) and all claims, proceeds and returns of premiums of each such contract and policy;

1.2.17"Intellectual Property", all copyrights, patents, trade marks, utility models, publication rights, registered designs, (including applications and rights to apply therefor and all renewals, modifications, extensions and derivations thereof), inventions, rights, service marks, rights in trade dress or get-up, trade and business names, domain names, domain name portfolios and top-level domain names, including domain name suffixes, also known as generic Top Level Domains, approved by ICANN, all Business Intellectual Property Rights,  confidential information and know-how, rights in computer software, database rights, topography rights,trade secrets, goodwill, Software and all other intellectual property rights of a similar nature in any part of the world and allfees, royalties and other rights and benefitsof every kind deriving from any of the above and which now or at any time hereafter belong to the Grantor including, but not limited to, those listed in Part 5 of Schedule 2  (Intellectual Property);

1.2.18"Intercompany Loans", all Indebtedness in respect of which one member of the Group is the creditor of another member of the Group;

1.2.19“Intercreditor Agreement”, a subordination and intercreditor agreement dated on or about the date hereof between (1) Obsidian Agency Services, Inc (as administrative agent for the Fund Lenders) (as defined therein), (2) Silicon Valley Bank and (3) Rightside Group, Ltd.;

1.2.20"Licences", all licences now or from time to time hereafter held by or on behalfof the Grantor and all licences pertaining to the Scheduled Property, including but not limited to the licences specified in Part 3 of Schedule 2  (Licences), as the same may be amended, varied, extended, renewed or supplemented from time to time, including the benefit of any authorisation (statutory or otherwise) held in connection with the use of any of the Security Assets and the right to recover and receive compensation which may be payable to it in respect of any such authorisation and/or licence;

1.2.21"Receiver", any one or more receivers and/or manager appointed by the Collateral Agent in respect of the Grantor over all or any part of the Security Assets;

1.2.22"Related Rights", in relation to any Shares:

(a)all dividends, distributions, interest and other income paid or payable after the date hereof on all or any of the Shares;

(b)all stocks, shares, securities (and the dividends and interest thereon), rights, money or property accruing or offered at any time by way of redemption, bonus, preference, option rights or otherwise to or in respect of any of the Shares or in substitution or exchange for any of the Shares;

(c)all rights relating to any of the Shares which are deposited with or registered in the name of any depositary, custodian, nominee, clearing house or system, investment manager, chargee or other similar person or their nominee (including rights against any such person); and

(d)all other rights attaching or relating to any of the Shares and all cash or other securities or investments in the future deriving from any of the Shares or such rights;

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1.2.23"Relevant Contracts", each contract, agreement and instrument assigned or purported to be assigned pursuant to Clause 3.2.3(a) (as the same may be amended, restated, substituted, supplemented or otherwise modified or replaced), including, but not limited to those or contracts,agreements and instruments more particular details of which are set out in Part 2 of Schedule 2  (Relevant Contracts);

1.2.24"Rental Income", all rents, fees and other amounts payable or paid to or for the benefit of the Grantor pursuant to, or in contemplation of, any occupational lease;

1.2.25"Scheduled Property", all premises intended to be mortgaged, charged or assigned by this Deed listed at Schedule 1 hereto and such expressions shall include any part or parts of the Scheduled Property and any rights and appurtenances appertaining thereto;

1.2.26"Secured Obligations", all Obligations and all monies, obligations and liabilities at any time due, owing or incurred by the Loan Parties to the Collateral Agent under the Loan Documents whether present or future, actual or contingent (and whether incurred solely or jointly, or jointly and severally, and whether as principal or surety or in some other capacity);

1.2.27"Secured Parties" has the meaning attributed to such term in the Credit Agreement;

1.2.28"Security Accounts", the bank accounts in the name of the Grantor as more particularly listed in Part 6 of Schedule 2  (Security Accounts) and with the banks and bearing the account numbers set out therein, and any account or accounts replacing the same from time to time and the debt represented thereby;

1.2.29"Security Assets", all assets, undertakings, rights and property of the Grantor (both present and future), the subject of any security created pursuant to this Deed and includes for the avoidance of doubt, the Grantor's rights and interest in the Assigned Property, the Floating Charge Property and the Charged Property;

1.2.30"Security Period", the period beginning on the date of this Deed and ending on the date on which the Collateral Agent irrevocably confirms in writing that all the Secured Obligations have been unconditionally and irrevocably paid and discharged in full;

1.2.31"Shares", all shares specified in Part 4 of Schedule 2  (Shares) under the heading "Shares" and all other shares, stocks, debentures, bonds, warrants, coupons or other securities and investments and all other interests (including, but not limited to, loan capital), in each case together with all Related Rights, now or in the future owned from time to time by, or on behalf of the Grantor, in whatever form in every company, corporation, firm, entity or consortium wheresoever situate;

1.2.32"Software":

(a)all computer programs, including source code and object code versions;

(b)all data, databases and compilations of data, whether machine readable or otherwise; and

(c)all documentation, training materials and configurations related to any of the foregoing.

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1.3Interpretation

1.3.1Clause 1.3 of the Credit Agreement shall apply to this Deed unless otherwise provided in this Deed.

1.3.2In addition to Clause 1.3.1:

(a)an “amendment”, includes a supplement, amendment, novation, restatement or re-enactment and “amended” is to be construed accordingly;

(b)“assets”, includes present and future properties, revenues and rights of every description;

(c)an “authorisation”, includes an authorisation, consent, approval, resolution, licence, exemption, filing, registration or notarisation;

(d)the “Collateral Agent”, “Administrative Agent”, a “Lender” or a “Secured Party”  shall mean the Collateral Agent, Administrative Agent, any Lender or any Secured Party respectively and its successors, assigns, participants and novatees and this Deed shall be enforceable notwithstanding any change in the constitution of the Collateral Agent, Administrative Agent, any Lenderor any Secured Party or the absorption of the Collateral Agent, Administrative Agent, any Lenderor any Secured Party in or amalgamation with any other person or the acquisition of all or part of the undertaking of the Collateral Agent, Administrative Agent, a Lender or a Secured Party by any other person;

(e)“company”, includes a corporation or a body corporate;

(f)“dispose”, means to sell, transfer, grant, lease, lend, grant options over or otherwise dispose of and “disposal” is to be construed accordingly;

(g)"examiner", means an examiner appointed under the provisions of the Companies Acts 1963-2013;

(h)“Grantor” or “Loan Party”  means the Grantor, a Loan Party and its successors and permitted assigns;

(i)a provision or matter “including” or which “includes” shall be construed without limitation to any events, circumstances, conditions, acts or matters listed or specified after those words;

(j)a  “Loan Document”or any other document, agreement or instrument is a reference to that Loan Documentor other document, agreement or instrument as amended, restated, assigned, novated, varied, supplemented or replaced from time to time;

(k)a  “person”, includes any individual, company, government, state, agency, organisation, association, body, department, trust, partnership (whether or not having separate legal personality) or any other entity of any description;

(l)a  “regulation”, includes any regulation, rule, official directive, request or guideline (whether or not having the force of law but, if not having the force of law, being of a type with which any person to which it applies is accustomed to comply) of any governmental, inter-governmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation;

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(m)“subsidiary” and “holding company”, means a subsidiary or a holding company as defined by Section 155 Companies Act, 1963 and “subsidiaries” and “holding companies” and cognate words shall be construed accordingly;

(n)the “winding up”, “dissolution” or “examinership” of a company shall be construed so as to include any equivalent or analogous proceedings under the law of the jurisdiction in which a company carries on business including, but not limited to, the seeking of liquidation, winding up, reorganisation, dissolution, examinership, administration, arrangements, adjustment, protection or relief of debtors.

(o)a provision of law is a reference to that provision as extended, applied, amended or re-enacted and includes any subordinate legislation;

(p)a Clause, a Subclause or a Schedule is a reference to a clause or subclause of, or a schedule to, this Deed; and

(q)words denoting the neuter shall include the masculine and feminine and vice versa.

1.3.3Unless the contrary intention appears, the index to and the headings in this Deed do not affect its interpretation.

1.3.4If the Collateral Agent considers that an amount paid by any Loan Party to a Secured Party under any Loan Document is capable of being avoided or otherwise set aside on the liquidation or examinership of the Grantor or otherwise, then such amount shall not be considered to have been irrevocably paid for the purposes hereof.

1.3.5Notwithstanding anything to the contrary in this Deed, the obligations, liabilities and undertakings under this Deed shall be deemed not to be undertaken or incurred to the extent that the same would:

(a)constitute unlawful financial assistance prohibited by Section 60 of the Companies Act 1963 (or any analogous provision of any other applicable law); or

(b)constitute a breach of Section 31 of the Companies Act 1990 (or any analogous provision of any other applicable law).

1.4Certificates

Any certificate or determination of the Collateral Agent as to any amounts owing under this Deed will be conclusive and binding on the Grantor, save in the case of manifest error.

1.5Intercreditor Agreement

1.5.1Notwithstanding anything to the contrary in this Deed or any other Loan Document, the Liens created and other rights granted by the Grantor to the Collateral Agent pursuant to this Deed and the exercise of any such rights or related remedies by the Collateral Agent are subject to the provisions of the Intercreditor Agreement.

1.5.2In the event of any conflict between the terms of the Intercreditor Agreement and the terms of this Deed the terms of the Intercreditor Agreement shall prevail. 

1.5.3Any reference in this Deed to a “first fixed charge”, a “first floating charge” or words of similar effect describing the Liens created pursuant to this Deed shall be understood to refer to such priority subject to the terms of the Intercreditor Agreement up to and until the release of the Liens over the Charged Portfolio by Silicon Valley Bank. 

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1.5.4All representations, warranties, covenants and undertakings in this Deed are subject to the qualifications in this Clause 1.5.  Prior to the release of the Liens over the Charged Portfolio by Silicon Valley Bank the representations, warranties, covenants, undertakings and other requirements of this Deed relating to the delivery of documents of title for the Charged Property or relating to actions to vest control of the Charged Property in the Collateral Agent shall be deemed satisfied by the delivery of such documents of title and vesting of such control in Silicon Valley Bank (as bailee for the Secured Parties pursuant to the terms of the Intercreditor Deed).

SECTION 2.0 - NATURE OF SECURITY AND COVENANT TO PAY

2.1Nature of Security

2.1.1All the security created under this Deed:

(a)is created in favour of the Collateral Agentas collateral agentfor the Secured Parties, for its benefit and the benefit of the other Secured Parties;

(b)is created over all of the present and future assets of the Grantor;  and

(c)is security for the payment of all the Secured Obligations.

2.1.2If the Grantor is prohibited from creating security over any of its assets (including for the avoidance of doubt, its rights under any document) without obtaining the consent of a third party:

(a)the Grantor must notify the Collateral Agent promptly upon it becoming aware of the same; and

(b)the fixed charge or assignment created by this Deed shall not take effect as regards the relevant asset until such consent is obtained, at which time that asset shall immediately become subject to such charge or assignment;

(c)if applicable, the security created by this Deed will secure all amounts which the Grantor may receive, or has received, under that document but exclude the document itself including, but not limited to, all damages, compensation, remuneration, profit, proceeds, rent or income derived therefrom; and

(d)unless the Collateral Agent otherwise requires, the Grantor must use its best endeavours to promptly obtain the consent of such third party to that asset being secured under this Deed.

2.2Covenant to Pay

The Grantor hereby unconditionally and irrevocably covenants with the Collateral Agentas collateral agent for the Secured Partiesthat it will pay, discharge or perform the Secured Obligations on the due date therefor.  Any amount not paid hereunder when due shall bear interest (after as well as before judgment and payable on demand) at the Default Rate from time to time (compounding on a monthly basis) from the due date until the date such amount is unconditionally and irrevocably paid and discharged in full.

SECTION 3.0 - FIXED CHARGES, ASSIGNMENTS AND FLOATING CHARGE

3.1Fixed Charges

Subject to Clauses 3.6 and 3.11, the Grantor, as legal and beneficial owner, as continuing security for the payment, performance and discharge of all of the Secured Obligations hereby charges in favour of the Collateral Agent as collateral agent for the Secured Parties,  for its

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benefit and the benefit of the other Secured Parties, by way of first fixed charge, all its present and future rights, title, interest and benefit in and to:

3.1.1all its estate, right, title and interest in any land, premises or buildings (including the Scheduled Property) now belonging to the Grantor (whether or not the legal title is vested in the Grantor or registered in the name of the Grantor) and all future estate, right, title and interest of the Grantor in such land, premises or buildings and in any other immovable property (in each case whether freehold or leasehold and whether or not registered) vested in or held by or on behalf of the Grantor from time to time and the proceeds of sale thereof together in all cases (to the extent the same are not already subject to an effective fixed security hereunder) all fixtures and fittings (including trade fixtures) and all fixed plant and machinery from time to time in or on such land, premises or buildings with the payment, performance and discharge of the Secured Obligations, and hereby assents to the registration of such charges as a burden on such freehold, leasehold and other immovable property (as applicable);

3.1.2the Licences;

3.1.3the Shares and all Related Rights;

3.1.4the Fixtures and Fittings;

3.1.5all of its rights in respect of any amount standing to the credit of any account (including without prejudice to the generality of the foregoing, the Security Accounts and the Book Debt Receivables Account) it has with any person and the debt represented by it;

3.1.6all Book Debt Receivables, all other moneys due and owing to the Grantor and the benefit of all rights, securities or guarantees of any nature enjoyed or held by it in relation to each of the same;

3.1.7all its Intellectual Property,provided that to the extent that a fixed charge is not created over any of the Intellectual Property by this Clause 3.1.7, the charge thereover purported to be effected by this clause shall operate as an absolute assignment of any and all damages, compensation, remuneration, profit, rent, royalty or income which the Grantor may now or at any time hereafter derive therefrom or be awarded or entitled to in any respect thereof;

3.1.8all of its beneficial interest, claim or entitlement in and to any pension fund and in and to any asset of any pension fund;

3.1.9all of its goodwill;

3.1.10all of the uncalled capital of the Grantor and all rights and claims to which the Grantor is now or may hereafter become entitled as a result of any calls made in relation thereto;

3.1.11all rights and claims to which the Grantor is now or may hereafter become entitled in relation to or in connection with the Security Assets, including those against any manufacturer, supplier, installer, builder, contractor, professional advisor, lessee or licensee and any guarantor or surety for the obligations of any such person and, to the extent that any of the Security Assets are now or at any time hereafter hired, leased or rented to any other person, the rights under the hiring, leasing or rental contract or agreement and any guarantee, indemnity or security for the performance of the obligation of such person and any other rights and benefits relating thereto; and

3.1.12all rights and benefits in respect of the Insurances and all claims and returns of premiums in respect thereof to the extent that they are not effectively assigned by Clause 3.3 below.

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3.2Assignments

Subject to Clause 3.10,the Grantor, as legal and beneficial owner as continuing security for the payment, performance and discharge of all of the Secured Obligations hereby assigns and agrees to assign absolutely to the Collateral Agent as collateral agent for the Secured Partiesby way of first fixed security, all its present and future right, title, interest and benefit in and to:

3.2.1(insofar as the same are capable of assignment) the benefit of:

(a)all rights of the Grantor to be paid or receive compensation under any statute by reason of any compulsory acquisition, requisition or other exercise of compulsory power in relation to the Scheduled Property or any part thereof or any refusal, withdrawal or modification of planning permission or approval relative thereto or any control or restriction imposed on or affecting the use of all or any part of the Scheduled Property and so that the production of this Deed to the local authority, government body or agency or other person liable to pay such compensation shall be a sufficient authority to such local authority, government body or agency or other person to pay the same to the Collateral Agent and the Collateral Agent shall have power to give good receipt therefor; and

(b)any covenant or undertaking for the making of roads and footpaths, laying down of sewers or the provision of all other usual services including street lighting and the payment of road charges or other private street improvement of the Scheduled Property and any indemnity against payment of such charges or expenses;

and hereby irrevocably appoints the Collateral Agent to be its attorney and in its name and on its behalf to:

(i)claim, assess, agree, recover any such compensation; and

(ii)exercise any such right or to give any such notice or counter-notice concerning the Scheduled Property as by or under any statute the Grantor may be entitled to exercise or give against or to any local or other competent or appropriate authority;

3.2.2(insofar as the same are capable of assignment) the Insurances and all proceeds in respect of the Insurances and all rights and benefits in respect of the Insurances (including all claims relating to the Insurances and all returns of premiums in respect thereof);  

3.2.3(insofar as the same are capable of assignment)  all of its rights and benefits (but not its obligations) in respect of:

(a)the Relevant Contracts (including all monies payable to the Grantor and all claims, awards and judgments in favour of or received or receivable by the Grantor under or in connection with any Relevant Contracts);

(b)alloccupational leases;

(c)all Rental Income;

(d)all guarantees of Rental Income contained in or relating to any occupational lease;

(e)all letters of credit issued in its favour; and

(f)all bills of exchange and other negotiable instruments held by it; and

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3.2.4all of its rights in respect of any Intercompany Loans to which it is a party.

3.3Non-assignable

To the extent that any such right, title and interest described in Clause 3.2.2 or 3.2.3is not assignable or capable of assignment:

3.3.1the assignment purported to be effected by Clause 3.2 shall operate as:

(a)in the case of the Insurances, an assignment of any and all present and future proceeds of the Insurances; and

(b)in the case of the Relevant Contracts, occupational leases, guarantees of Rental Income and letters of credit (as the case may be) an assignment of all present and future damages, compensation, remuneration, profit, rent, income or monies which the Grantor may derive therefrom or be awarded or entitled to in respect thereof; and

in each case as continuing security for the payment and performance of the Secured Obligations; and

3.3.2the Grantor shall hold the benefit of any such right, title and interest in trust for the Collateral Agent.

3.4Floating Charge

The Grantor, as beneficial owner, as continuing security for the payment, performance and discharge of the Secured Obligations, hereby charges in favour of the Collateral Agent, for its benefit and the benefit of the other Secured Parties, by way of first floating charge all of the Grantor’s stock-in-trade, inventory and raw materials together with the whole of the Grantor’s undertakings, property, assets and rights whatsoever and wheresoever both present and future, other than any assets for the time being effectively mortgaged or charged to the Collateralon behalf of the Secured Partiesby way of mortgage or fixed charge or effectively assigned to the Collateral Agenton behalf of the Secured Parties(whether at law or in equity) pursuant to Clause 3.1, 3.2 and 3.3 of this Deed or otherwise subject to an effective fixed security in favour of the Collateral Agent, for its benefit and the benefit of the other Secured Parties.

3.5Crystallisation of Floating Charge

3.5.1The Collateral Agent may at any time:

(a)on or after the occurrence of an Event of Default which is continuing; and

(b)if it shall appear to the Collateral Agent that all or a substantial part of the Floating Charge Property is in danger of being seized or sold under any form of distress or execution levied or threatened to be levied or to be otherwise in jeopardy;

by notice in writing to the Grantor convert the floating charge with immediate effect into a fixed charge with regard to any Floating Charge Property specified in the notice.

3.5.2Notwithstanding Clause 3.5.1 and without prejudice to any rule of law which may have a similar effect, the floating charge shall automatically be converted with immediate effect into a fixed charge as regards the Floating Charge Property and without notice from the Collateral Agent to the Grantor or without any requirement for further or any action on the part of the Grantor or any other Secured Party on:

(a)the Grantor ceasing to carrying on its business;

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(b)the presentation of a petition for the compulsory winding up of the Grantor;

(c)the convening of a meeting for the passing of a resolution for the voluntary winding up of the Grantor;

(d)the appointment by any person of a receiver and/or manager to the Grantor or any of its assets;

(e)the presentation of a petition for the appointment of an examiner to the Grantor or any related company;

(f)the creation or attempted creation of any Lien over all or any part of the Floating Charge Property without the prior consent in writing of the Collateral Agent or the levying or attempted levying by any person of any distress, execution, sequestration or other process against any of the Floating Charge Property; or

(g)the issuance of a notice to the Grantor striking the Grantor off the register of companies.

3.5.3The giving by the Collateral Agent of a notice under paragraph 3.5.1 above, or the occurrence of any event specified at paragraph 3.5.2 above, shall subject to the terms of the Intercreditor Agreementand the prior ranking conversion of any asset the subject of a floating charge in the First Security Deed to a first fixed charge have the effect of converting any asset the subject of a floating charge under paragraph 3.4, into a first fixed charge in favour of the Collateral Agent, for its benefit and the benefit of the other Secured Parties, and thereupon the Collateral Agent shall immediately assume exclusive control of such assets, and the Grantor shall not be permitted to deal with such assets otherwise than with and subject to the prior written consent of the Collateral Agent. Where such assets include book debts of the Grantor, it shall not be permitted to release, exchange, settle, compromise, set-off, grant time or indulgence, or otherwise deal with such book debts and all monies received by it in respect of such book debts will be paid into a bank account of the Grantor and it shall not be permitted to make withdrawals or payments from any bank account without the prior written consent of the Collateral Agent.

3.6Negative Pledge

3.6.1The Grantor shall not, save as otherwise permitted by the terms of the Loan Documents:

(a)create or permit to subsist any Lien on any Security Asset save for any Liens created under this Deed and the First Security Deed; or

(b)sell, transfer, licence, lease, grant any option over or otherwise dispose of any Security Asset or enter into any agreement to sell, transfer, licence, lease, grant any option over or otherwise dispose of any Security Asset.

3.6.2The Grantor, without prejudice to Clause 3.6.1(a) and (b) above but in addition to the restrictions in those sub-clauses, shall not (save for any Liens created under this Deed and the First Security Deed)  sell, assign, charge, factor or discount or in any other manner deal with any of the Book Debt Receivables without the prior written consent of the Collateral Agent.

3.7After Acquired Property

If and whenever the Grantor shall acquire after the date of this Deed any freehold, leasehold or other immovable property it shall forthwith inform the Collateral Agent in writing of the acquisition and as soon as may be practicable if so required by the Collateral Agent deliver to the Collateral Agent the deeds and documents in its possession relating to the property so

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acquired and the Grantor shall, if required by the Collateral Agent, at the Grantor's own expense, execute, deliver, sign, and do all acts and deeds which shall be necessary to grant to the Collateral Agent a first fixed charge on such property in such form as the Collateral Agenton behalf of the Secured Partiesshall require as further security for all monies intended to be hereby secured.  Forthwith upon the acquisition of any land, the title to which is registered or required to be registered under the Registration of Title Act, 1964, the Grantor shall give notice to the Collateral Agent and shall furnish the Collateral Agent with such information regarding such land as the Collateral Agent may reasonably require to register a Lien as a burden against the Charged Property.

3.8Validity of Charges

The charges hereby created shall be and shall be deemed to be effective and shall have effect whether or not the principal monies and interest and all other sums intended to be hereby secured or any part thereof shall be advanced before or after or upon the date of the execution of these presents.

3.9Continuing Obligations

Notwithstanding any other provisions of this Deed:

3.9.1the Grantor shall remain liable under any contracts (including the Relevant Contracts), agreements and other documents included in the Security Assets (to the extent set forth therein) to perform all of its duties and obligations thereunder to the same extent as if this Deed had not been executed;

3.9.2the exercise by the Collateral Agent of any of the rights hereunder shall not release the Grantor from any of its duties or obligations under such contracts, agreements and other documents; and

3.9.3the Collateral Agent shall not have any obligation or liability under any such contracts, agreements or other documents included in the Security Assets by reason of this Deed, nor shall the Collateral Agent be obligated to perform any of the obligations or duties or to discharge any of the liabilities of the Grantor thereunder or to make any payment or any enquiry as to the nature or sufficiency of any payment received by it or the Grantor or to take any action to collect or enforce any such contract, agreement or other document.

3.10Proviso for Redemption/Release/Reassignment

Upon satisfaction in full of the Secured Obligations and subject to the Grantor ceasing to have any liability (whether actual or contingent) to the Secured Partiesin respect of the Secured Obligations in accordance with the terms of this Deed and the Lenders ceasing to be under any commitment to advance any amounts to any Borrowerand upon the payment of all costs, charges and expenses incurred by the Collateral Agent or any Receiver in relation to this Deed effected by operation of law or pursuant to any judgment, decree or act of the Grantor the security hereby constituted shall be automatically released and all rights to the Security Assets shall revert to the Grantor. The Collateral Agent will at any time thereafter at the request and cost of the Grantor(but subject to the rights and claims of any person having prior rights to the Security Assets or any of them)  execute and do all such deeds, acts and things that may be necessary to surrender, reassign, discharge or release the charges and assignments hereby created and reconvey or surrender to the Grantor or its assigns the Security Assets.

SECTION 4.0 - ENFORCEABILITY OF SECURITY

4.1Events of Default

The security hereby constituted shall immediately become enforceable and the floating charge hereby granted shall immediately crystallise and become a specific charge and all rights of the

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Grantor to deal for any purpose whatsoever with the Security Assets or any part thereof following the occurrence of an Event of Defaultwhich is continuing.

SECTION 5.0 - RIGHTS AND POWERS OF THE LENDER

5.1Entry into Possession

At any time after the security hereby constituted shall have become enforceable the Collateral Agent may, in its absolute discretion:

5.1.1enforce all or any part of the security in any manner it sees fit and the power of sale and other powers conferred on mortgagees by the Act shall apply to this Deed in each case as varied or extended by this Deed without the need to obtain the consent of the Grantor or an order for possession under Sections 97 or 98 of the Act; and/or

5.1.2without further notice or demand, enter into possession of the Security Assets (or any part thereof); and/or

5.1.3sell, call in, collect, convert into money or otherwise deal with the Security Assets (or any part thereof) with the power to sell any of the Security Assets either together as one lot or in parcels and either by public auction, tender or private contract and either for a sum on account and a charge for the balance with full power upon every such sale to make any special or other stipulation as to the title or evidence of commencement of title or otherwise which the Collateral Agent and/or any Receiver shall think proper and with full power to give an option to purchase all or any part of the Security Assets, buy in, rescind or vary any contract for the sale of the Security Assets or any part thereof and to resell the same without being responsible for any loss which may be occasioned thereby and with full power to compromise and effect compositions and for the purposes aforesaid or any of them to execute and do all such assurances and things as it shall think fit and any and all monies expended by the Collateral Agentfor the Secured Partiesand/or any Receiver under this Section shall be deemed to be expenses properly incurred by the Collateral Agent and/or any Receiver.

PROVIDED THAT Section 99 of the Act shall not apply to this Deed and neither the Collateral Agent nor any Receiver shall be obliged to take any steps to sell or lease the Security Assets (or any part thereof) after going into possession of the Security Assets (or any part thereof) and the Collateral Agent and any Receiver shall have absolute discretion as to the time of exercise of the power of sale and the power of leasing and all other powers conferred on them by the Act or otherwise.  The rights of the Collateral Agent and any Receiver are without prejudice to and in addition to any right of possession (express or implied) to which the Collateral Agent and/or any Receiver is otherwise entitled (whether by virtue of this Deed, operation of law,  statute, contract or otherwise).

5.2Further Right of Possession

In addition to the powers hereunder given the Collateral Agent may enter into possession of and hold or appoint a Receiver to take possession of any part of the Security Assets which may at any time appear to it in danger of being taken under any process of law by any creditor of the Grantor or to be otherwise from any cause whatever in jeopardy and to any Receiver appointed under this Clause the provisions of Clause 6.1 shall apply mutatis mutandis and the Collateral Agent may at any time give up possession or withdraw the receivership.

5.3Power of Sale

At any time after the security hereby constituted has become enforceable the power of sale and all other powers conferred on mortgagees by the Act shall be exercisable immediately without the need:

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5.3.1for the occurrence of any of the events specified in sub-sections (a) to (c) of section 100(1) of the Act; or

5.3.2to give notice as specified in the final proviso to section 100(1) of the Act; or

5.3.3to obtain the consent of the Grantor or a court order authorising the exercise of the power of sale under sections 100(2) or (3) of the Act; or

5.3.4to give any notice to the Grantor under section 103(2) of the Act.

Section 94 of the Act shall not apply to any security constituted by this Deed or any enforcement of such security.

5.4Power of Leasing and Accepting Surrenders

The statutory powers of leasing conferred on the Collateral Agent and any Receiver are extended so as to authorise the Collateral Agent and any Receiver to lease, make agreements for leases, accept surrenders of leases and make agreements to accept surrenders of leases as it or he may think fit and without the need to comply with any provision of sections 112 to 114 of the Act.  Without prejudice to the generality of the foregoing, the Collateral Agent and any Receiver may exercise the statutory power to accept surrenders of leases conferred by the Act for any purpose that it or he thinks fit and not just for the purpose of granting new leases under section 112 of the Act and any new lease granted by the Collateral Agent or any Receiver following the acceptance of a surrender need not comply with the requirements of section 114(3) of the Act.

5.5Power to Conduct Business

At any time after the occurrence of an Event of Default which is continuing and until the whole of the Security Assets shall be sold, called in, collected or converted under the powers of conversion the Collateral Agent may if it shall think fit so to do, carry on the business of the Grantor in and with the Security Assets and may manage and conduct the same as it shall in its discretion think fit and for the purposes of the said business may employ such agents, managers, Receivers, accountants and servants upon such terms as to remuneration or otherwise as it shall think proper and may exercise all rights of voting conferred by any part of the Security Assets and otherwise deal with and exercise or permit to be exercised any powers or rights incidental to the ownership of any of the Security Assets on such terms and conditions and generally in such manner as it may deem expedient and generally may do or cause to be done all such acts and things and may enter into such arrangements respecting the Security Assets or any part thereof as it could do it if was absolutely entitled thereto and without being responsible for any loss or damage which may arise or be occasioned thereby. The Collateral Agent shall out of the profits and income of the Security Assets and the monies to be made by it in carrying on the said business pay and discharge the expenses incurred in and about the carrying on and management of the said business or in the exercise of any of the powers conferred by this Section or otherwise in respect of the Security Assets and all outgoings which it shall think fit to pay and shall pay and apply the residue of the said profits, income and monies in the same manner as hereinbefore provided with respect of the monies to arise from any sale, calling in, collection or conversion under the powers of conversion. 

5.6Due Date for Statutory Purposes

For the purpose of all powers implied by statute (but not otherwise), the Secured Obligations are deemed to have become due on the date of this Deed.

5.7Non-applicability of Sections 92 and 94 of the Act

Section 92 of the Act shall not apply to this Deed.  Section 94 of the Act shall not apply to the security constituted by this Deed or any enforcement of such security.

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5.8Position of Third Parties

No person (including a purchaser) dealing with the Collateral Agent or any Receiver or its or his attornies or agents will be concerned to enquire:

5.8.1whether any of the Secured Obligations have become payable or remain due; or

5.8.2whether due notice has been given to any person; or

5.8.3whether any power which the Collateral Agent or any Receiver is purporting to exercise has become exercisable or has been or is being properly exercised; or

5.8.4whether the Receiver is authorised to act; or

5.8.5how any money paid to the Collateral Agent as collateral agent for the Secured Parties or to any Receiver is to be applied,

and all protections to purchasers contained in sections 105, 106 and 108(5) of the Act shall apply to any person (including a purchaser) dealing with the Collateral Agent or any Receiver in like manner as if the statutory powers of sale and appointing a receiver had not been varied or extended by this Deed.

5.9Receipt of Collateral AgentGood Discharge

Upon any sale, calling in, collection or conversion or other dealing under any of the provisions herein contained the receipt of the Collateral Agent or any Receiver for the purchase money of the Security Assets sold or for any other monies paid to it shall effectually discharge the purchaser or person paying the same therefrom and from being concerned to see to the application or the loss or misapplication thereof. 

5.10Application of Monies

Notwithstanding section 109 of the Act, the Collateral Agent shall hold the monies arising from any exercise of the powers of sale or conversion upon trust that it shall thereout in the first place pay or retain or provide for the payment or satisfaction of the costs and expenses and liabilities incurred in or about the execution of such powers or otherwise in relation to these presents and shall apply the residue of such monies in accordance with Clause 8.3 of the Credit Agreement. 

SECTION 6.0 - APPOINTMENT OF RECEIVER

6.1Power of Appointment

At any time after the occurrence of an Event of Default which is continuing (and so that no delay or waiver of the right to exercise the powers hereby conferred shall prejudice the future exercise of such powers) and without the need for the occurrence of any of the events specified in section 108(1)(a) to (c) inclusive of the Act, the Collateral Agent may without further notice by writing under the hand of any director, general manager, assistant general manager or secretary for the time being of the Collateral Agent or any person authorised by any one of them in writing appoint a Receiver of the Security Assets or any part thereof and remove any Receiver so appointed and appoint another or others in his stead and/or appoint another person to act jointly with any such Receiver and the following provisions shall have effect:

6.1.1such appointment may be made either before or after the Collateral Agent shall have entered into or taken possession of the Security Assets or any part thereof;

6.1.2such Receiver shall have and be entitled to exercise all powers conferred by the Act, without the restrictions contained in the Act, in the same way as if the Receiver had been duly appointed under the Act and in addition, shall have the power on behalf of and at the cost of the Grantor to do or omit to do anything which the Grantor could

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do or omit to do in relation to the Security Assets or any part thereof and in particular but without limiting any powers hereinbefore referred to shall have power to do all or any of the following:  

(a)to enter upon, take possession of, collect and get in the Security Assets and for that purpose to take, defend or discontinue any proceedings or submit any matter to arbitration or mediation in the name of the Grantor;

(b)to re-let or let the Security Assets or any part thereof from time to time to such person or persons as he shall think fit for any term of years which he thinks right or on yearly monthly or weekly tenancies at the best rents which may be reasonably obtainable and to surrender or accept surrenders, grant licences or otherwise dispose of all or any of the Security Assets on such terms and conditions as he may think fit;

(c)to carry on, manage, develop, construct or diversify the business of the Grantor or any part thereof (or concur in so doing);

(d)to sell or concur in selling the Security Assets or any part thereof and to carry such sale into effect and by deed in the name and on behalf of the Grantor or otherwise convey the same to the purchaser thereof;

(e)to make any arrangement or compromise or enter into, vary or cancel any contracts which he shall think expedient in the interests of the Collateral Agent;  

(f)to make and effect all such repairs, improvements, structural and other alterations or extensions or demolitions or renewals of the Security Assets as he shall think fit and renew such of the plant, machinery and any other effects of the Grantor whatsoever as shall be worn out lost or otherwise become unserviceable without being responsible for loss or damage; and do anything else in connection with the Security Assets which the Receiver may think desirable for the purpose of making productive and increasing the letting or market value of the Security Assets or protecting the security hereby created; and

(g)to effect, maintain, renew, increase or vary such insurances as he shall, in his absolute discretion, think fit;

(h)to promote the formation of a subsidiary company and/or companies of the Grantor with a view to such subsidiary company and/or companies purchasing, leasing, licensing or otherwise acquiring interests in all or any of the assets of the Grantor;

(i)to make allowances to, and re-arrangements with, any lessee, tenants or other persons from whom any rents and profits may be receivable (including the granting of any licences and reviewing rent in accordance with the terms of and varying the provisions of any leases affecting the Security Assets);

(j)to redeem any prior encumbrance and to settle and prove the accounts of the encumbrancer and accounts so settled and proved shall be conclusive and binding on the Grantor and the money so paid shall be a receivership expenses;

(k)to settle, adjust, refer to arbitration, compromise and arrange any claims, accounts, disputes, questions and demands with or by any person who is or claims to be a creditor of the Grantor or relating in any way to the Security Assets or any part thereof and take, defend, continue and

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discontinue any proceedings relating to the Security Assets or any part thereof;

(l)to appoint, hire and employ and to remunerate managers, agents, servants, attendants, workmen and others on such terms and generally in such manner as he shall think fit in connection with any exercise by him of any of the within powers or otherwise for any purpose connected with the Security Assets or any part thereof and to discharge any person so appointed, hired or employed; and

(m)generally, to use (at his option) the name of the Grantor in the exercise of all or any of the powers hereby conferred and to do all such other acts and things as maybe considered to be incidental or conducive to any of the matters and powers aforesaid and which the Receiver may or can lawfully do as agent for the Grantor;

6.1.3unless otherwise directed by the Collateral Agent, such Receiver may also exercise all the powers and authority vested in the Collateral Agent by these presents and in particular all powers vested in the Collateral Agent by Section 5.0 hereof;

6.1.4the Collateral Agent may from time to time fix the remuneration of such Receiver and direct payment thereof out of the Charged Property but the Grantor alone shall be liable for such remuneration;

6.1.5the Collateral Agent may from time to time or at any time require such Receiver to give security for the due performance of his duties as such Receiver and may fix the nature and amount of security to be so given but the Collateral Agent shall not be bound in any case to require any such security;

6.1.6the Collateral Agent shall be in no way responsible for any misconduct or negligence on the part of such Receiver;

6.1.7subject as provided in Section 5.0 and herein the provisions of any relevant enactment conferring powers on a mortgagee or Receiver shall apply to and be deemed to be conferred upon any Receiver appointed hereunder as if such provisions and powers were incorporated herein. 

6.2Powers of Receiver to Borrow

Subject as provided in this Section, any Receiver appointed under these presents may for the purpose of defraying his costs charges, losses or expenses (including his remuneration) which shall be incurred by him in the exercise of the powers, authorities and discretions vested in him and for all other purposes hereof or any of them, raise and borrow money on the security of the Security Assets or any part thereof either in priority to the security hereby constituted or otherwise and on such terms and conditions as he may think fit and no person lending any such money shall be concerned to enquire as to the propriety or purpose of the exercise of this power or to see to the application of any monies so raised or borrowed provided that no Receiver shall exercise this power without first obtaining the written consent of the Collateral Agent but the Collateral Agent shall incur no responsibility or liability to the Grantor or otherwise by reason of its giving or refusing such consent whether absolutely or subject to any limitation or condition.

6.3Application of Monies by Receiver

The net profits of carrying on the said business and/or the net proceeds of any sale by the Receiver shall subject to any prior ranking claims thereon, and notwithstanding section 109 of the Act, be applied by him as follows:

6.3.1firstly, in payment of all costs, charges and expenses of and incidental to the appointment of the Receiver and the exercise by him of all or any of the powers

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aforesaid including the remuneration of the Receiver and all outgoings properly paid by him; and

6.3.2secondly, in or towards payment in the manner provided in Clause 8.3 of the Credit Agreement,

PROVIDED THAT if the Receiver shall be of the opinion that the security may prove deficient payments may be made on account of unpaid principal monies before unpaid interest due under these presents but such alteration in the order of payment of principal monies and interest shall not prejudice the right of the Collateral Agent to receive the full amount to which it would have been entitled if the primary order of payment had been observed or any less amount which the sum ultimately realised may be sufficient to pay.

6.4Liability of the Collateral Agent and Receiver

TheCollateral Agentand any Receiver appointed by the Collateral Agent under this Deed shall not, in any circumstances, whetherby reason of the Collateral Agent or such Receiver entering into possession of the Security Assets or any part thereof or for any other reason whatsoever be liable to account as mortgagee in possession or on any basis whatsoever for anything except actual receipts or be liable for any loss arising from any realisation of the Security Assets or any part thereof or any default or omission in relation to the Security Assets or any exercise or non-exercise of any power, authority or discretion conferred on the Collateral Agent or any Receiver in relation to the Security Assets or any part thereof by or pursuant to this Deed or the Act.

6.5Receiver Agent of the Grantor

Any Receiver appointed hereunder shall be deemed to be the agent of the Grantor for all purposes and be in the same position as the Receiver duly appointed under the Act in connection with his powers and duties hereunder save so far as he shall be specifically authorised to engage the responsibility of the Collateral Agent or shall expressly undertake personal liability which he shall not be deemed to do by entering into any contract as or in which he is described as Receiver and the Grantor shall be solely responsible for all acts and defaults of the Receiver as agent for the Grantor and for such remuneration of the Receiver as the Collateral Agent shall consider reasonable and be liable under any contracts or engagements made or entered into by him and the Collateral Agent shall not in making the appointment or in consenting thereto incur any liability for any such acts or defaults or otherwise save in the case of fraud, gross negligence or wilful misconduct.

6.6Section 108 of the Act

The provisions of section 108 of the Act (with the exception of sub-sections 1(a) and (b) thereof and save so far as modified by the provisions hereof) shall apply to these presents and to any Receiver appointed by the Collateral Agent hereunder.  Section 108(7) of the Act shall not apply to the commission and/or remuneration of a Receiver appointed pursuant to this Deed.  A Receiver shall be entitled to remuneration at a rate to be fixed by agreement between such Receiver and the Collateral Agent (or failing such agreement to be fixed by the Collateral Agent).

SECTION 7.0 - CONTINUING SECURITY, ETC.

7.1Continuing Security

The security constituted by this Deed shall be  a continuing security which shall extend to all the Secured Obligations and shall not be considered as satisfied or discharged by any intermediate payment or settlement of all or any of the Secured Obligations and is in addition to and independent of and shall not prejudice, affect or merge with any other security which the Collateral Agent may hold at any time for any of the Secured Obligations and shall not be in any way prejudiced thereby or by the invalidity thereof.

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7.2Opening of New Accounts

7.2.1If for any reason the security constituted hereby or pursuant hereto ceases to be a continuing security (other than by way of discharge of such security), any Secured Party may open a new account with or continue any existing account with the Grantor and the liability of the Grantor in respect of the Secured Obligations at the date of such cessation shall remain regardless of any payments in or out of any such account.

7.2.2At any time on receiving notice that the Grantor has created a Lien over any of the property or assets hereby charged the Collateral Agent and any Secured Partymay close the then current account of the Grantor (if any) and open a new account with the Grantor and no monies paid or carried to the credit of such new account shall be appropriated towards or have the effect of discharging any part of the amount owing on this security at the date of such notice. 

7.3Reinstatement

7.3.1Where any discharge (whether in respect of the obligations of the Grantor or any security for those obligations or otherwise) is made in whole or in part or any arrangement is made on the faith of any payment, security or other disposition which is avoided or must be restored on insolvency, liquidation or otherwise without limitation, the liability of the Grantor under this Deed shall continue as if the discharge or arrangement had not occurred. 

7.3.2The Collateral Agent may concede or compromise any claim that any payment, security or other disposition is liable to avoidance or restoration.

7.4Waiver of Defences

7.4.1The liability of the Grantor hereunder will not be affected by any act, omission, circumstance, matter or thing which but for this provision would release or prejudice any of its obligations hereunder or prejudice or diminish such obligations in whole or in part, including without limitation, and whether or not known to the Grantor or any Secured Party:

(a)any time, indulgence or waiver granted to, or composition with, the Grantor or any other person; or

(b)the release of the Grantor or any other person under the terms of any composition or arrangement with any creditor of the Grantor; or

(c)the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect or take up or enforce any rights or remedies against, or any security over assets of, the Grantor or any other person or any non-presentment or non-observance of any formality or other requirement in respect of any instruments or any failure to realise the full value of any other security; or

(d)any legal limitation, disability, incapacity or lack of powers, authority or legal personality of or dissolution or change in the members or status of or other circumstance relating to, the Grantor or any other person; or

(e)any variation (however fundamental and whether or not involving any increase in the liability of the Grantor thereunder) or replacement of any Loan Document or any other document or security so that references to the Loan Documents or other documents or security in this Deed shall include each such variation or replacement; or

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(f)any unenforceability, illegality, invalidity or frustration of any obligation of the Grantor or any other person under any Loan Document or any other document or security, or any failure of the Grantor to become bound by the terms of a Loan Document whether through any want of power or authority or otherwise; or

(g)any postponement, discharge, reduction, non-provability or other similar circumstance affecting any obligation of the Grantor under a Loan Document or any security granted therefor resulting from any insolvency, liquidation or dissolution proceedings or from any law, regulation or order, this Deed be construed as if there were no such circumstance,

to the intent that the Grantor's obligations under this Deed shall remain in full force, and this Deed shall be construed accordingly, as if there were no such circumstance, act, variation, limitation, omission, unenforceability, illegality, matter or thing.

The Collateral Agent shall not be concerned to see or investigate the powers or authorities of the Grantor or its officers or agents, and monies obtained or Secured Obligations incurred in purported exercise of such powers or authorities or by any person purporting to act on behalf of the Grantor shall be deemed to form a part of the Secured Obligations, and "Secured Obligations" shall be construed accordingly.

7.5Additional Security

This Deed is in addition to and is not in any way prejudiced by any other security now or hereafter held by the Collateral Agent.

SECTION 8.0 - SHARES

8.1Covenants relating to Shares

The Grantor hereby covenants with the Collateral Agent as collateral agentfor the Secured Parties that in relation to the Shares it will at all times during the continuance of this security comply with the provisions set forth in the following Clauses of this Section, save to the extent otherwise permitted by the terms of the Credit Agreement.

8.2Deposit of Title Documents

The Grantor shall:

8.2.1immediately upon the date of this Deed, or if acquired after the date of this Deed, forthwith following the acquisition of same, deposit with the Collateral Agent, or as the Collateral Agent may direct, all certificates and other documents of title or evidence of ownership in relation to any of the Shares; and

8.2.2execute in blank and deliver to the Collateral Agent all share transfer forms and all other documents which may be requested by the Collateral Agent in order to enable the Collateral Agent or its nominees to be registered as the owner or otherwise obtain a legal title to any of the Shares.

8.3Changes to Rights

The Grantor shall not take or allow the taking of any action on its behalf in relation to any of the Shares which would (in the opinion of the Collateral Agent) prejudice the value of, or the ability of the Collateral Agent to realise, the security created in this Deed.

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8.4Calls

The Grantor shall pay all calls or other payments due and payable in respect of any of the Shares and in the event of the Grantor failing to do so, the Collateral Agent may, but shall not be obliged to, pay the calls or other payments on behalf of the Grantor.  The Grantor must immediately on request reimburse the Collateral Agent for any payment made by the Collateral Agent in respect of the foregoing.

8.5Other Obligations in respect of Shares

8.5.1The Grantor shall promptly copy to the Collateral Agent and comply with all requests for information which is within its knowledge relating to any of the Shares.  If it fails to do so, the Collateral Agent may elect to provide such information as it may have on behalf of the Grantor.

8.5.2The Grantor shall comply with all other conditions and obligations assumed by it in respect of any of the Shares.

8.6Voting and Dividend Rights

8.6.1Until the occurrence of an Event of Default which is continuing and upon the receipt of written notice from the Collateral Agent informing the Grantor otherwise:

(a)the Grantor may exercise the voting rights, powers and other rights in respect of the relevant Shares provided that such rights and powers must not be exercised in any manner which would prejudice the value of, or the ability of the Collateral Agent to realise, the security created by this Deed; and

(b)all dividends or other income paid or payable in relation to any investments shall be paid directly to the Grantor.

The Grantor shall indemnify the Collateral Agent against any loss or liability incurred by the Collateral Agent as a consequence of the Collateral Agent acting in respect of the Shares on the direction of the Grantor unless such loss or liability is caused by the negligence or wilful default of the Collateral Agent.

8.6.2Upon the occurrence of an Event of Defaultwhich is continuing and upon the receipt of written notice from the Collateral Agent informing the Grantor otherwise, the Collateral Agent may exercise (in the name of the Grantor and without any further consent or authority on the part of the relevantcompany) any voting rights and any powers or rights which may be exercised by the legal or beneficial owner of any Share, any person who is the holder of any investment.

SECTION 9.0 - SECURITY ACCOUNTS

9.1Covenants relating to Security Accounts

The Grantor hereby covenants with the Collateral Agent as collateral agent for theSecured Partiesthat in relation to the Security Accounts it will at all times during the continuance of this security comply with the provisions set forth in the following Clauses of this Section9.0, save to the extent otherwise permitted by the Credit Agreement.

9.2Security Accounts

All Security Accounts must, unless the Collateral Agent otherwise agrees in writing, be maintained with an Account Bank.

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9.3Withdrawals

9.3.1The Grantor shall not,following the occurrence of an Event of Default which is continuing, withdraw any moneys from a Security Account except with the prior consent of the Collateral Agent.

9.3.2Subject as provided in Clause 9.3.1, the Collateral Agent (or a Receiver) may withdraw amounts standing to the credit of a Security Account to meet an amount due and payable in accordance with the terms of the Loan Documents when it is due and payable.

9.4Notices of Charge

Upon execution and delivery of this Deed, theGrantor shall immediately:

9.4.1give notice to any relevant Account Bank substantially in the form of Part 1 of Schedule 3  (Form of Letters for Security Account); and

9.4.2use its best endeavours to ensure that the Account Bank acknowledges the notice substantially in the form of Part 1 of Schedule 3  (Form of Letters for Security Account).

SECTION 10.0 - BOOK DEBT RECEIVABLES ACCOUNT

10.1Covenants relating to Book Debt Receivables Account

The Grantor hereby covenants with the Collateral Agent as collateral agent for the Secured Partiesthat in relation to the Book Debt Receivables Account it will at all times during the continuance of this security comply with the provisions set forth in the following Clauses of this Section 10.0, save to the extent otherwise permitted by the Credit Agreement.

10.2Book Debt Receivables Account

The Book Debt Receivables Account must, unless the Collateral Agent otherwise agrees in writing, be maintained with an Account Bank.

10.3Receipts

The Grantor shall get in and realise its Book Debt Receivables in the ordinary course of its business and hold the proceeds of the getting in and realisation on trust for the Collateral Agentfor the Secured Parties

10.4Withdrawals

10.4.1The Grantor shall not, without the prior written consent of the Collateral Agent, withdraw any moneys from Book Debt Receivables Account.

10.4.2The Collateral Agent (or a Receiver) may withdraw amounts standing to the credit of a Book Debt Receivables Account to meet any Secured Obligation due and payable in accordance with the terms of theLoan Documents when it is due and payable.

10.5Notices of Charge

10.5.1Upon execution and delivery of this Deed, the Grantorshall immediately deliver to theAccount Bank with which the Book Debt Receivables Account is maintained, a notice to the Account Bank, and procure that the Account Bank has signed and delivered to the Collateral Agent, a letter, in each case substantially in the form of Part 4 of Schedule 3(Form of Notice to Account Bank operating Book Debts Receivables Accounts).

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10.5.2Upon receipt of the acknowledgement in Clause  10.5.1 above from the Account Bank, the Collateral Agent will send a letter to that branch substantially in the form of Part 4 of Schedule 3  (Form of Letters for Book Debt Receivables Account).

10.5.3The Grantor shall:

(a)collect all Book Debt Receivables in the ordinary course of trading as agent for the Collateral Agent;

(b)immediately upon receipt pay all monies which it may receive in respect of the Book Debt Receivables into the Book Debt Receivables Account;

(c)pending such payment into a Book Debt Receivables Account hold all monies so received upon trust for the Collateral Agent.

10.6Legal Assignment

The Grantor shall, if called upon to do so by the Collateral Agent, execute and deliver to the Collateral Agent a legal assignment of its then Book Debt Receivables and other debts on such terms as the Collateral Agent may require and give notice thereof to the debtors from whom the same are due owing or incurred and take any other steps as the Collateral Agent may require to perfect such legal assignment.

SECTION 11.0 - RELEVANT CONTRACTS/INSURANCES

11.1Covenants relating to Relevant Contracts and Insurances

The Grantor hereby covenants with the Collateral Agent as collateral agentfor the Secured Parties that in relation to the Relevant Contracts and Insurances it will at all times during the continuance of this security comply with the provisions set forth in the following Clauses of this Section.

11.2Preservation

The Grantor shall not, without the prior written consent of the Collateral Agent:

11.2.1amend or waive any term of, or terminate, any Relevant Contract to which it is a party; or

11.2.2take any action which might jeopardise the existence or enforceability of any such Relevant Contract.

11.3Further Undertakings

The Grantor hereby further undertakes with the Collateral Agent that it shall:

11.3.1duly and promptly perform its obligations, and diligently pursue its rights, under each Relevant Contract to which it is a party; and

11.3.2supply the Collateral Agent and any Receiver with copies of each Relevant Contract and any information and documentation relating to any Relevant Contract requested by the Collateral Agent or any Receiver.

11.4Notices of Assignment

Upon execution and delivery of this Deed, the Grantor shall immediately serve a notice of assignment:

11.4.1in relation to the Insurances, substantially in the form of Part 3 of Schedule 3  (Notice of Assignment of Insurances);

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11.4.2in relation to the Relevant Contracts, substantially in the form set out in Part 2 of Schedule 3  (Notice to Contract Party), on each counterparty to a Relevant Contract to which it is a party; and

11.4.3use its best endeavours to procure that each such party acknowledges that notice, substantially in the form of Part 3 of Schedule 3  (Letter of Undertaking) or Part 2 of Schedule 3  (Acknowledgement from Contract Party) as the case may be.

SECTION 12.0 - INTELLECTUAL PROPERTY

12.1Covenants relating to Intellectual Property

The Grantor hereby covenants with the Collateral Agentas collateral agent for the Secured Partiesthat in relation to the Intellectual Property it will at all times during the continuance of this security comply with the provisions set forth in the following Clauses of this Section.

12.2Intellectual Property

The Grantor shall:

12.2.1if it shall become aware of any infringement of its Intellectual Property, at once give the Collateral Agent all information in its possession with regard thereto and at its own cost commence and diligently prosecute and permit the Collateral Agent in the name, and at the cost of the Grantor, to commence and prosecute all proceedings which in the sole opinion of the Collateral Agent are necessary to prevent such infringement or to recover damages in respect thereof;

12.2.2not, without prior written consent of the Collateral Agent in relation to its Intellectual Property or any part thereof grant any exclusive registered user agreement or exclusive licence;

12.2.3lodge all notices, complete all filings and registrations and do all other acts as may be necessary to ensure that its Intellectual Property is valid and subsisting and remains vested in it and take all such actions and proceedings as are reasonably necessary to protect such Intellectual Property and if any or all such Intellectual Property shall at any time become void to lodge all notices and do all acts as may be necessary to restore such Intellectual Property to it and in particular to pay all fees as may be necessary for all of the above purposes before the same shall become due.

SECTION 13.0 - GENERAL PROVISIONS

13.1Assignment

13.1.1The Grantor may not assign, transfer or delegate any of its rights or obligations under this Deed without the prior written consent of the Collateral Agent.

13.1.2The Collateral Agent may assign, transfer or delegate any of its rights or obligations under this Deed without the prior written consent of or notice to the Grantor.

13.2Consolidation

The statutory restrictions on the consolidation of mortgages shall not apply to this security.

13.3Protection of Purchaser

Where a conveyance is made in professed exercise of the power of sale applicable hereto the title of the purchaser (the "Purchaser") shall not be impeachable on the grounds that no case has arisen to authorise the sale or that due notice was not given or that the power was otherwise improperly exercised and the Purchaser shall not either before or on conveyance

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be concerned to see or inquire whether a case has arisen to authorise the sale or due notice has been given or the power is otherwise than properly or regularly exercised but this provision shall not prejudice a claim for damages against the person exercising the power or any person damnified by an unauthorised or improper or irregular exercise thereof.

13.4No Waivers,  Remedies Cumulative

No failure on the part of the Collateral Agent (or any Secured Party) to exercise, nor any delay in exercising any right, remedy, power or privilege under this Deed or any Loan Document will operate as a waiver thereof, nor will any single or partial exercise of any such right, remedy, power or privilege preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges under this Deed are cumulative and not exclusive of any such right, remedy, power or privilege that may otherwise be available to the Collateral Agent or any Secured Party.

13.5Set-off

In addition to any other right of set-off to which the Collateral Agent(or any Secured Party)  may at any time be entitled (whether by agreement, operation or law or otherwise), the Collateral Agent (or any Secured Party) may at any time after the occurrence and during the continuance of an Event of Default (both before and after any demand hereunder and without notice) set-off any liability of the Grantor to the Collateral Agent (or any Secured Party) (whether actual or contingent and whether or not then due and payable) against any credit balance on any account of the Grantor with the Collateral Agent(or any Secured Party)  and may retain the whole or any part of such credit balance to meet the liability of the Grantor to the Collateral Agent (or any Secured Party).

13.6Preferential Claims

The Grantor shall procure that all debts and obligations to or in respect of persons employed by the Grantor which by law may have priority over the security hereby created shall be punctually duly paid and discharged. 

13.7Power of Attorney

13.7.1The Grantorby way of security irrevocably appoints the Collateral Agentas collateral agentfor the Secured Parties(whether or not a Receiver has been appointed) and, also as a separate appointment, or any Receiver or Receivers appointed to be the attorney or attorneys of the Grantor for the Grantor and in the name and on behalf of the Grantor as its act and deed to execute, deliver and perfect all documents and do all things which the attorney may consider to be required or desirablefor:

(a)carrying out any obligation imposed on the Grantor by this Deed (including the execution and delivery of any deeds, charges, assignments or other security and any transfers of any of the Security Assets); and

(b)enabling the Collateral Agent and/or any Receiver to exercise, or delegate the exercise of, any of the rights, powers and authorities conferred on them by or pursuant to this Deed or by law (including the exercise of any right of a legal or beneficial owner of any of the Security Assets).

13.7.2The Grantor shall ratify and confirm all things done and all documents executed by any attorney in the exercise or purported exercise of any of his powers. 

13.7.3The Power of Attorney referred to in this Deed shall become enforceable following the occurrence of an Event of Default which shall be continuing.

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13.8Waiver

A waiver by the Collateral Agent(or any Secured Party)  of any breach of any of the terms provisions or conditions hereof or the acquiescence by the Collateral Agent (or any Secured Party) in any act (whether commission or omission) shall not constitute a general waiver of such term provision or condition or of any subsequent act contrary thereto.

13.9Enforcement of Other Rights

The Grantor waives any right it may have of first requiring the Collateral Agent (or any Secured Party) to proceed against or enforce any other rights or security the Collateral Agent (or any Secured Party) may have or benefit from before enforcing the security constituted hereby.

13.10Appropriations

Until all the Secured Obligations have been unconditionally and irrevocably paid and discharged in full, the Collateral Agent as collateral agentfor the Secured Parties may:

13.10.1refrain from applying or enforcing any other monies, security or rights held or received by it in respect of the Secured Obligations unless and until the amounts recovered by the Collateral Agent from the Grantor are sufficient to discharge in full all of the Secured Obligations PROVIDED THAT it holds any such other monies not applied in accordance with Clause 13.10.2 below or apply and enforce the same in such manner and order as it sees fit (whether against the Secured Obligations or otherwise) and the Grantor shall not be entitled to the benefit of the same; and

13.10.2hold in a suspense account any moneys received from the Grantor or on account of the Grantor's liability in respect of the Secured Obligations.  Amounts standing to the credit of any such suspense account shall bear interest at a rate considered by the Collateral Agent (acting reasonably) to be a fair market rate.

13.11Authority of the Collateral Agent

The Grantor acknowledges that the rights and responsibilities of the Collateral Agent under this Deed with respect to any action taken by the Collateral Agent or the exercise or non-exercise by the Collateral Agent of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Deed shall, as between the Collateral Agent and the other Secured Parties, be governed by the Credit Agreement and by such other agreements with respect thereto as may exist from time to time among them, but, as between the Collateral Agent and the Grantor, the Collateral Agent shall be conclusively presumed to be acting as collateral agent for the Secured Parties with full and valid authority so to act or refrain from acting, and the Grantor shall not be under any obligation or entitlement to make any inquiry respecting such authority.

13.12Duty; Obligations and Liabilities

The Collateral Agent’s sole duty with respect to the custody, safekeeping and physical preservation of the Security Assets in its possession shall be to deal with them in the same manner as the Collateral Agent deals with similar property for its own account.  The powers conferred on the Collateral Agent hereunder are solely to protect the Collateral Agent’s interest in the Security Assets and shall not impose any duty upon the Collateral Agent to exercise any such powers.  The Collateral Agent shall be accountable only for amounts that it receives as a result of the exercise of such powers, and neither it nor any of its Affiliates shall be responsible to the Grantor for any act or failure to act hereunder, except for their own gross negligence or wilful misconduct as finally determined by a court of competent jurisdiction.  In addition, the Collateral Agent shall not be liable or responsible for any loss or damage to any Security Assets, or for any diminution in the value thereof, by reason of the act or omission of any warehousemen, carrier, forwarding agency, consignee or other bailee if such Person has been selected by the Collateral Agent in good faith.

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13.13Obligations and Liabilities with respect to Security Assets

No Secured Party and none of theirAffiliates thereof shall be liable for failure to demand, collect or realise upon any Security Assets or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Security Assets upon the request of the Grantor or any other person or to take any other action whatsoever with regard to any Security Assets.  The powers conferred on the Collateral Agent hereunder shall not impose any duty upon any Secured Party to exercise any such powers.  The Secured Parties shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and neither they nor any of their respective officers, directors, employees or agents shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross negligence or wilful misconduct as finally determined by a court of competent jurisdiction.

13.14Confirmation of Role of Collateral Agent and Additional Powers

The Collateral Agent confirms that it acts as collateral agent for the Secured Parties in respect of the Charged Property, in accordance with the terms and conditions of the Credit Agreement and this Deed, and in performing such role it shall have all of the other powers and rights granted to trustees pursuant to the Trustee Act 1893, as amended.

13.15Notices

Any notice, demand or other communication required or permitted to be given or made under this Deed shall be sent in the manner provided in Section 9.01 of the Credit Agreement and shall be addressed as follows:

(a)if to the Collateral Agent, to:

Address:c/o Tennenbaum Capital Partners, LLC

2951 28th Street

Suite 1000

Santa Monica

California, 90405

Attention:Asher Finci

Fax No.:(310) 889-4950

with a copy to Proskauer Rose LLP at:

Address:2049 Century Park East

Suite 3200

Los Angeles

California, 90067

Attention:Steven O. Weisse and Glen K. Lim

Fax No.:(310) 557-2193

(b)if to the Grantor, to:

Address:Arthur Cox Building

Earlsfort Centre

Earlsfort Terrace

Dublin 2

Ireland

Attention:David Ryan

Fax No.:+353 1 9012199

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13.16Non-Competition

13.16.1Until all the Secured Obligations have been unconditionally and irrevocably paid and discharged in full the Grantor shall not by virtue of any payment made, security realised or monies received or recovered under the Loan Documents or any security therefor for or on account of the liability of any third party:

(a)be subrogated to any rights, security or moneys held, received or receivable by any Secured Party or any trustee or agent on their behalf) or be entitled to any right of contribution or indemnity; or

(b)claim, rank, prove or vote as a creditor of any other Loan Party or its estate in competition with the Collateral Agent (or any trustee or agent on its behalf); or

(c)receive, claim or have the benefit of any payment, distribution or security from or on account of any other Loan Party, or exercise any right of set-off as against any other Loan Party.

13.16.2The Grantor will hold in trust for and forthwith pay or transfer to the Collateral Agent any payment or distribution or benefit of security received by it contrary to the provision of this Clause 13.16.  If theGrantor exercises any right of set-off contrary to the above, it will forthwith pay an amount equal to the amount set off to the Collateral Agent.  

13.17Counterparts

This Deed may be executed in any number of counterparts and by the parties to this Deed on separate counterparts, each of which, when executed and delivered, shall constitute an original, but all the counterparts shall together constitute but one and the same instrument.

13.18Governing Law and Jurisdiction

13.18.1This Deed shall be governed by and construed in accordance with the laws of Ireland.

13.18.2The Grantor hereby agrees for the exclusive benefit of the Collateral Agent that any legal action or proceeding (the "Proceedings") brought against it with respect to this Deed may be brought in the High Court in Ireland or such other competent Court of Ireland as the Collateral Agent may elect and the Grantor waives any objection to the Proceedings being taken in such courts whether on the grounds of venue or on the ground that the Proceedings have been brought in an inconvenient forum.  The Grantor undertakes to enter an unconditional appearance within 14 days after the completion of any service or process of any Proceedings.  The Grantor hereby consents to the service by post of any process issued in that jurisdiction.  Nothing herein shall affect the Collateral Agent's right to serve process in any other manner permitted by law.

13.18.3Nothing in this Clause shall limit the right of the Collateral Agent to take Proceedings to any other court or competent jurisdiction nor shall the taking of Proceedings in any or more jurisdictions preclude the taking of Proceedings in any other jurisdiction (whether concurrently or not).

IN WITNESS whereof the parties have executed and delivered this Deed on the date first specified above.

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SCHEDULE  1

Scheduled Property

None at the date of this Deed.

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SCHEDULE  2

PART 1

The Fixtures and Fittings

None at the date of this Deed.

PART 2

The Relevant Contracts

None at the date of this Deed

PART 3

The Licences

None at the date of this Deed.

PART 4

The Shares

None at the date of this Deed.

PART 5

The Intellectual Property

None at the date of this Deed.

PART 6

The Security Accounts

None at the date of this Deed.

PART 7

The Book Debt Receivable Account

None at the date of this Deed.

PART  8

The Insurances

None at the date of this Deed.

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SCHEDULE3

PART 1

Form of Letters for Security Account

PART A

Notice to Account Bank

[On the letterhead of the Grantor]

To:[Account Bank]

[Date]

Dear Sirs

SecurityDeed dated [                      ] 2014(the "Security Deed")between (1) Rightside Domains Europe Limitedand (2)Obsidian Agency Services, Inc.(acting as collateral agent for the Secured Parties) (the “Collateral Agent”)

1.This letter constitutes notice to you that pursuant to the Security Deed we have charged (by way of a first fixed charge) in favour of the Collateral Agent, for its benefit and the benefit of the other Secured Parties, all our right, title and interest in respect of any monies standing to the credit of the accounts maintained by us with you, more particular details of which are set out in the Schedule to this Notice (the "Accounts").

2.We irrevocably instruct and authorise you to:

2.1disclose to the Collateral Agent any information relating to any Account requested from you by the Collateral Agent;

2.2comply with the terms of any written notice or instruction relating to any Account received by you from the Collateral Agent;

2.3hold all sums standing to the credit of any Account to the order of the Collateral Agent; and

2.4pay or release any sum standing to the credit of any Account in accordance with the written instructions of the Collateral Agent.

3.We are not permitted to withdraw any amount from any Account without the prior written consent of the Collateral Agent.

4.We acknowledge that you may comply with the instructions in this letter without any further permission from us.

5.We enclose a copy of the SecurityDeed.

6.The instructions in this letter may not be revoked or amended without the prior written consent of the Collateral Agent.

7.This letter is governed by Irish law.

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8.Please confirm your agreement to the above by sending the attached acknowledgement to the Collateral Agentat [                   ] with a copy to ourselves.

Yours faithfully

………………………………

(Authorised signatory)

Rightside Domains EuropeLimited

Schedule

The Security Accounts

[Details]

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PART B

Acknowledgement of Security Account Bank

[On the letterhead of the Account Bank]

To:Obsidian Agency Services, Inc. (acting as collateral agent for the Secured Parties)

Copy:[Grantor]

[Date]

Dear Sirs

SecurityDeed dated [                      ] 2014(the "Security Deed")between (1) Rightside Domains Europe Limitedand (2) Obsidian Agency Services, Inc. (acting as collateral agent for the Secured Parties) (the “Collateral Agent”)

We confirm receipt from Rightside Domains EuropeLimited (the "Grantor") of a notice (the "Notice") dated [                      ] 2014with respect to a charge under the terms of the Security Deed over all the right, title and interest of the Grantor to any amount standing to the credit of any of the Grantor's accounts with us (the "Accounts").

We confirm that we:

1.accept the instructions contained in the notice and agree to comply with the Notice;

2.have not received notice of the interest of any third party in any Account;

3.have neither claimed nor exercised, nor will claim or exercise, any security interest, set-off, counterclaim or other right in respect of any Account; and

4.will not permit any amount to be withdrawn from any Account without your prior written consent.

The Accounts maintained with us are:

[Specify accounts and account numbers]

This letter is governed by Irish law.

Yours faithfully

…………………………………

(Authorised signatory)

[Account Bank]

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PART 2

Forms of Letter for Contracts

PART A

Notice to Counterparty

To:[Contract party]

[Date]

Dear Sirs

SecurityDeed dated [                      ] 2014(the "Security Deed")between (1) Rightside Domains EuropeLimited and (2) Obsidian Agency Services, Inc. (acting as collateral agent for the Secured Parties) (the “Collateral Agent”)

1.This letter constitutes notice to you that under the SecurityDeed we have assigned by way of security to the Collateral Agentall our right, title and interest in and to [insert details of Contracts or add a schedule of Contracts] (the "Contracts").

2.We confirm that:

2.1we will remain liable under the Contracts to perform all the obligations assumed by us under the Contracts; and

2.2none of theCollateral Agent, its agents, any receiver or any other person will at any time be under any obligation or liability to you under or in respect of the Contracts.

3.We will also remain entitled to exercise all our rights, powers and discretions under the Contracts, and you should continue to give notices under the Contracts to us, unless and until you receive notice from the Collateral Agent to the contrary stating that the security has become enforceable.  In this event, all the rights, powers and discretions will be exercisable by, and notices must be given to, the Collateral Agent or as it directs.

4.Please note that we have agreed that we will not amend or waive any provision of or terminate the Contracts without the prior consent of the Collateral Agent.

5.This letter is governed by Irish law.

Please acknowledge receipt of this letter by sending the attached acknowledgement to the Collateral Agent at [                      ].

Yours faithfully

…………………………

(Authorised signatory)

Rightside Domains EuropeLimited

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PART B

Acknowledgement of Counterparty

To:Silicon Valley Bank

Copy:Rightside Domains Europe Limited

[Date]

Dear Sirs

We confirm receipt from Rightside Domains Europe Limited (the "Grantor") of a notice dated [                      ] (the "Notice") of an assignment on the terms of the SecurityDeed dated [                      ] 2014of all the Grantor's right, title and interest in and to [insert details of the Contracts] (the "Contracts").

We confirm that we will pay all sums due, and give notices, under the Contracts as directed in the Notice.

This letter is governed by Irish law.

Yours faithfully

……………………………..

(Authorised signatory)

[Counterparty]

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PART 3

PART A

Notice of Assignment of Insurances

(for attachment by way of endorsement to the Insurance Policies)

To:[Insurer]

[Date]

We,  Rightside Domains Europe Limited hereby give notice that by a Security  Deed dated [               ], between (1)Rightside Domains Europe Limited and (2) Obsidian Agency Services, Inc. (acting as collateral agent for the Secured Parties) (the “Collateral Agent”),we have assigned to the Collateral Agentthe policies of insurance more particular details of which are set out in the Schedule to this Notice (the "Policies") and all our interest (including the benefit of all money owing or to become owing to us in respect of the Policies together with all interest thereon).

We hereby irrevocably authorise and instruct you to issue a letter of undertaking, in the form attached, to the Collateral Agentand to act on the instructions of the Collateral Agent in the manner provided in that letter without any further reference to or authorisation from us.

This letter shall be governed by Irish law.

Yours faithfully

…………………………

(Authorised signatory)

Rightside Domains EuropeLimited

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SCHEDULE

Policies

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PART B

Letter of Undertaking

To:Obsidian Agency Services, Inc. (acting as collateral agent for the Secured Parties) (the “Collateral Agent”)

[Date]

Dear Sirs,

Letter of Undertaking

In accordance with an assignment of the insurance policies referred to in the Schedule to this letter (the "Policies") made by Rightside Domains EuropeLimited (the "Grantor") we undertake:

1.to note your interest as loss payee on the Policies;

2.to disclose to you without any reference to or further authority from the Grantor such information relating to the Policies as you may at any time request;

3.not to release any of the Policies on request by the Grantor without your prior written consent;

4.following written notification from you of the occurrence of an Event of Default which is outstanding, to pay all claims payable under the policies of Insurance to you unless you otherwise agree in writing and save as obliged by law.

This letter shall be governed by Irish law.

Yours faithfully,

..............................
for and on behalf of

[Insurer]

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SCHEDULE

Policies

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PART 4

Form of notice to and acknowledgement from bank operating Book Debt Receivables Account

To:[insert name and address of Account Bank]

Dear Sirs,

Re:	Account Holder: Rightside Domains Europe Limited (the "Grantor")
	Account No: (the "Book Debt Receivables Account")
	Account Branch: [insert branch address]

1.We give notice that, by a Security Deed dated 2014(the "Security Deed")between (1) the Grantor and (2)Obsidian Agency Services, Inc. (acting as collateral agent for the Secured Parties)   (the "Collateral Agent"),the Grantor has charged to the Collateral Agent all its present and future right, title and interest in and to:

1.1[the Book Debt Receivables, the Book Debt Receivables Account, all monies from time to time standing to the credit of the Book Debt Receivables Account and all additions to or renewals or replacements thereof (in whatever currency); and

1.2all monies standing to the credit of any other accounts from time to time maintained with you by the Grantor,]

(together the "Charged Accounts") and to all interest from time to time accrued or accruing on the Charged Accounts and all rights to repayment of any of the foregoing by you.

2.We advise you that, under the terms of the Security  Deed, we are not entitled to withdraw any monies from the Book Debt Receivables Accounts without first having obtained the prior written consent of the Collateral Agent.

3.We irrevocably authorise and instruct you from time to time:

3.1unless the Collateral Agent so authorises you, not to permit withdrawals from the Security Accounts;

3.2to hold all monies from time to time standing to the credit of the Charged Accounts to the order of the Collateral Agent;  

3.3to pay all or any part of the monies standing to the credit of the Charged Accounts to the Collateral Agent (or as it may direct) promptly following receipt of written instructions from the Collateral Agent to that effect; and

3.4to disclose to the Collateral Agent such information relating to the Grantor and the Charged Accounts as the Collateral Agent may from time to time request you to provide.

3.5[to pay all monies received by you for our account to (and only to) [specify account].]

4.We agree that you are not bound to enquire whether the right of the Collateral Agent to withdraw any monies from any Charged Account has arisen or be concerned with the propriety or regularity of the exercise of that right or to be concerned with notice to the contrary or be

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concerned with or responsible for the application of any monies received by the Collateral Agent.

5.The provisions of this notice may only be revoked or amended with the prior written consent of the Collateral Agent. 

6.Please confirm by completing the enclosed copy of this notice and returning it to the Collateral Agent (with a copy to the Grantor) that:

6.1you agree to act in accordance with the provisions of this notice;

6.2you have not, at the date this notice is returned to the Collateral Agent, received notice of any assignment or charge of or claim to the monies standing to the credit of any of the Charged Accounts or the grant of any security or other interest over those monies in favour of any third party and you will notify the Collateral Agent promptly if you should do so in the future; and

6.3you do not now and will not in the future exercise any right to combine accounts or any rights of set-off or lien or any similar rights in relation to the monies standing to the credit of the Charged Accounts.

7.This notice (and any acknowledgement) shall be governed by and construed in accordance with the laws of Ireland.

Yours faithfully,

______________________________

for and on behalf of

Rightside Domains Europe Limited

Countersigned by

______________________________

for and on behalf of

[                      ]

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[On Copy]

To:Obsidian Agency Services, Inc. (acting as collateral agent for the Secured Parties)

[                      ]

Copy to:  Rightside Domains Europe Limited

We acknowledge receipt of the above notice. We confirm and agree:

(a)that the matters referred to in it do not conflict with the terms which apply to any Charged Account; and

(b)the matters set out in paragraphs 1 to 3 in the above notice.

_________________________

for and on behalf of

[Account Bank]

Dated: [                      ]

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EXECUTION PAGE

Grantor

GIVEN under the COMMON SEALof RIGHTSIDE DOMAINS EUROPE LIMITED and delivered as a deed:	/s/ David Ryan
	Director
	Jacqui McGowan Smyth
	Director/Secretary For and on behalf of BRADWELL LIMITED

Collateral Agent

collateral agent for the Secured Parties:

SIGNEDANDDELIVERED as a deed by

OBSIDIAN AGENCY SERVICES, INC. as collateral agent for the Secured Parties:

By:/s/ HowardLevkowitz

Name:HowardLevkowitz

Title:President

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EX-10.17

Exhibit 10.17

Dated this 6th day of August 2014

BETWEEN

DMIH LIMITED

(as Chargor)

AND

OBSIDIAN AGENCY SERVICES, INC.

(as Chargee)

SECOND PRIORITY CHARGE OVER SHARES IN

UNITED TLD HOLDCO LTD.

Conyers Dill & Pearman (Cayman) Limited

Attorneys at Law

Cayman Islands

NOTE:  This document will be subject to stamp duty in the Cayman Islands if executed in or brought into the Cayman Islands

TABLE OF CONTENTS

1	INTERPRETATION	4
2	FIRST PRIORITY CHARGE	6
3	CHARGOR’S REPRESENTATIONS AND WARRANTIES	6
4	CHARGOR’S COVENANTS	8
6	DEALINGS WITH CHARGED PROPERTY	12
7	PRESERVATION OF SECURITY	13
8	ENFORCEMENT OF SECURITY	15
9	RECEIVER	16
10	FURTHER ASSURANCES	18
11	INDEMNITIES	19
12	POWER OF ATTORNEY	20
13	EXPENSES	21
14	NOTICES	22
15	ASSIGNMENTS	23
16	RELEASE	23
17.	CURRENCY	24
18.	MISCELLANEOUS	24
19	LAW AND JURISDICTION	26

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THIS SECOND PRIORITY CHARGE OVER SHARES is made on the 6th day of August 2014

BETWEEN:

(1) DMIH Limited a limited liability company incorporated under the laws of Ireland and having its registered office address at Arthur Cox Building, Earlsfort Centre, Earlsfort Terrace, Dublin 2, Co. Dublin, Ireland(the “Chargor”); and

AND:

(2) Obsidian Agency Services, Inc.,  having its principal office address at 2951 28th Street, Suite 1000, Santa Monica, California 90405, United States of America, as collateral agent under the Credit Agreement (as defined below) (the “Chargee”).

WHEREAS:

(A) By a credit agreement (the “Credit Agreement”) dated as of August 6, 2014 among Rightside Group, Ltd. (the “U.S. Borrower”),  United TLD Holdco Ltd., an exempted company incorporated with limited liability under the laws of the Cayman Islands and a wholly owned subsidiary of the Chargor (the “Cayman Borrower”, and together with the U.S. Borrower, the “Borrowers”), the lenders party thereto (the “Lenders”) and the Chargee as administrative agent and collateral agent, the Chargee has agreed to extend certain term loans to the Borrowers, upon the terms and conditions specified in the Credit Agreement;

(B) Pursuant to the Credit Agreement and, as security for the Cayman Obligations (as defined below), the Chargor has agreed to grant the second priority Security Interests created by this Chargewhich, notwithstanding anything to the contrary herein, will automatically convert into a first priority Security Interest upon the discharge of the First Priority Charge (defined below);

(C) It is also noted that the Chargor is a party to certain credit facility arrangements granted by Silicon Valley Bank as Revolving Loan Lender (as defined in the Credit Agreement)  pursuant to the terms of the Revolving Loan Documents (as defined in the Credit Agreement);

(D) As security for the Chargor’s obligation to the Revolving Loan Lender under the Revolving Loan Documents, the Chargor has granted a first priority charge over shares (the “First Priority Charge”) dated 1 August 2014 over the Charged Property in favour of the Revolving Loan Lender; and

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(E) It is noted further that Chargee and the Revolving Loan Lender have entered into the Intercreditor Agreement (as defined in the Credit Agreement) to regulate the relationship between, inter alia, the First Priority Charge and this Charge.

NOW THIS CHARGE WITNESSES as follows:

1 INTERPRETATION

1.1 In this Charge, unless the context otherwise requires, the following words and expressions shall have the following meanings:

“Business Day”	has the meaning attributed to such term in the Credit Agreement;
“Cayman Obligations” “Charge”	has the meaning attributed to such term in the Credit Agreement; means this charge over shares;
“Charged Property”	means all of the issued shares of the Company and all other shares in the Company from time to time legally or beneficially owned by the Chargor during the Security Period (together the “Charged Shares”) and all dividends or other distributions, interest and other moneys paid or payable after the date hereof in connection therewith and all interests in and all rights accruing at any time to or in respect of all or any of the Charged Sharesand all and any other property that may at any time be received or receivable by or otherwise distributed to the Chargor in respect of or in substitution for, or in addition to, or in exchange for, or on account of, any of the foregoing, including, without limitation, any shares or other securities resulting from the sub-division, consolidation, change, conversion or reclassification of any of the Charged Shares, or the reorganisation, merger or amalgamation of the Company with any other body corporate, or the occurrence of any event which results in the substitution or exchange of the Charged Shares;

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“Company”	means United TLD Holdco Ltd., an exempted company incorporated with limited liability under the laws of the Cayman Islands (company registration number 266441), whose registered office address is at the offices of Maples Corporate Services Limited, Ugland House, South Church Street, George Town, PO Box 309, Grand Cayman KY1-1104, Cayman Islands;
“Event of Default”	has the meaning attributed to such term in the Credit Agreement;
“Parties”	means the parties to this Charge collectively; “Party” means any one of them;
“Secured Parties”	has the meaning attributed to such term in the Credit Agreement;
“Security Interest”	means any charge, mortgage, pledge, lien, security interest or other encumbrance, howsoever created or arising; and
“Security Period”	means the period commencing on the date of execution of this Charge and terminating upon discharge of the security created by this Charge by the release of this Charge by the Chargee in accordance with Clause 16.

1.2 In this Charge unless the context otherwise requires:

(a) references to statutory provisions shall be construed as references to those provisions as amended or re-enacted or as their application is modified by other provisions from time to time and shall include references to any provisions of which they are re-enactments (whether with or without modification);

(b) references to clauses and schedules are references to clauses hereof and schedules hereto; references to sub-clauses or clauses are, unless otherwise stated, references to sub-clauses of the clauses hereof or clauses of the schedule in which the reference appears;

(c) references to the singular shall include the plural and vice versa and references to the masculine shall include the feminine and/or neuter and vice versa;

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(d) references to persons shall include companies, partnerships, associations and bodies of persons, whether incorporated or unincorporated;

(e) references to assets include property, rights and assets of every description;

(f) references to any document are to be construed as references to such document as amended or supplemented from time to time including, without limitation any increase in the amount or change to the repayment period or other terms of the facilities provided under any Loan Document;

(g) an Event of Default is “continuing” if it has not been waived or cured pursuant to and in accordance with the provisions of the Credit Agreement; and

(h) capitalized terms used in this Charge but not otherwise defined shall bear the respective meanings given to them in the CreditAgreement.

2 FIRST PRIORITY CHARGE

2.1 Notwithstanding any other provision of this Charge, the rights of the Chargee hereunder shall in all respects be subject to and deferred in point of priority to the Security Interestsand all other rights granted in favour of theRevolving Loan Lender pursuant to the First Priority Charge and the terms of the Intercreditor Agreement and the Chargee shall have no rights to take any enforcement action under this Charge (including, without limitation, pursuant to Clauses 8 (Enforcement), 9 (Receiver) and 12 (Power of Attorney) until the First Priority Charge is discharged and released or, otherwise, in accordance with the Intercreditor Agreement. 

3 CHARGOR’S REPRESENTATIONS AND WARRANTIES

3.1 The Chargor hereby represents and warrants to the Chargee that:

(a) the authorised share capital of the Company is US$50,000 divided into 50,000shares with a par value of US$1.00 each;

(b) the issued share capital of the Company is US$1,000 divided into1,000 shares with a par value of US$1.00 each;

(c) all presently outstanding shares of the Company are duly authorized and validly issued, fully paid and non-assessable, and in each case such shares have been issued 6

in full compliance with the requirements of all applicable securities laws and regulations and the constitutional documents of the Company;

(d) there are no outstanding options, warrants, rights (including conversion or pre-emptive rights and rights of first refusal) or other third party rights of any kind, proxy or shareholders agreement or agreements of any kind for the purchase or acquisition of the Company or any of its securities;

(e) the Chargor is a company duly organised, validly existing and in good standing under the laws of Ireland;

(f) the Chargor is the legal and beneficial owner of all of the Charged Property free from any Security Interest (other than those created by this Charge and the First Priority Charge) and any options or rights of pre-emption;

(g) the Chargor has full power and authority (i) to be the legal and beneficial owner of the Charged Property, (ii) to execute and deliver this Charge and (iii) to comply with the provisions of, and perform all its obligations under, this Charge;

(h) this Charge constitutes the Chargor’s legal, valid and binding obligations enforceable against the Chargor in accordance with its terms except as such enforcement may be limited by any relevant bankruptcy, insolvency, administration or similar laws affecting creditors’ rights generally;

(i) the entry into and performance of this Charge by the Chargor and enforcement hereof by the Chargeewill not (i) contravene the terms of any agreement to which the Chargor is bound or to which the Charged Property is subject or the memorandum and articles of association of the Company; (ii) does not violate any law or regulation of any governmental or official authority; and (ii) is not contrary to any agreement, contract or other undertaking to which the Chargor is a party or which is binding upon the Chargor or any of its assets;

(j) all consents, licences, approvals and authorisations required in connection with the entry into, performance, validity and enforceability of this Charge have been obtained and are in full force and effect;

(k) there is no litigation pending or, to the knowledge of the Chargor, threatened in writing (whether or not the defence thereof or liabilities in respect thereof are covered by insurance) against or significantly affecting the Chargor, the Company or its shares;

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(l) the Chargor is solvent, no steps have been taken or are being taken to appoint a receiver or manager to take over its assets or a liquidator to wind it up;and

(m) the foregoing representations and warranties are true and accurate as at the date hereof and will be true and correct throughout the continuance of this Charge with reference to the facts and circumstances subsisting from time to time.

4 CHARGOR’S COVENANTS

4.1 The Chargor hereby covenants with the Chargee to pay all amounts, interest, expenses, claims, liabilities, losses, costs, duties, fees, charges or other moneys constituting the Cayman Obligations at the times and in the manner specified in the Credit Agreement and/or any other relevant Loan Document.

4.2 The Chargor hereby covenants that:

(a) subject to the First Priority Charge and the terms of the Intercreditor Agreement, it will on the date hereof deliver to the Chargee:

(i) the original share certificate(s), if any,and any other documents of title in relation to the Charged Shares;

(ii) a blank, signed and undated transfer in respect of the Charged Shares in the form set out in Schedule 1;

(iii) an executed and undated letter of resignation and related letter of authorisation from each director and each officer, if any,of the Company in the form set out in Schedule 2;

(iv) an irrevocable shareholder proxy signed by the Chargor in favour of the Chargee for its benefit and the benefit of the other Secured Parties in the form set out in Schedule 3;

(v) an undertaking signed by a director of the Company in the form set out in Schedule 4;  

(vi) a notice of charge over shares addressed by the Chargor to the Company in the form set out in Schedule 5 and acknowledged by the Company; and

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(vii) a certified copy of the special resolution of the Company dated31 July 2014amending the restrictions on the transfer of shares in the articles of association of the Company in a  form acceptable to the Chargee.

4.3 The Chargor hereby covenants that,  subject to the First Priority Charge and the terms of the Intercreditor Agreement, it will forthwith:

(a) deliver to the Chargee:

(i) all original share certificates, if any, and other documents of title relating to any shares in the Company acquired by the Chargor after the date of this Charge forthwith upon such acquisition;

(ii) blank, signed and undated transfer in respect of any shares in the Company acquired by the Chargor after the date of this Charge forthwith upon such acquisition; and

(iii) an executed and undated letter of resignation and related letter of authority for the Chargee to date the same from each newly appointed director and officer of the Company forthwith upon such appointment;

(b) on demand of the Chargee and at the expense of the Chargor, execute and deliver to the Chargee or to such person or persons as the Chargee may nominate such additional charge or charges of the Charged Property (or any part thereof) for the purpose of further securing discharge of all Cayman Obligations, each such additional charge to be in such form as theChargee may reasonably require; and

(c) on request of the Chargee,  provide to the Chargeepromptly on receipt by the Chargor a copy of all notices, written consents, reports, accounts, circulars and other communications issued by the Company or by any third party in respect of the Charged Shares.

4.4 The Chargor covenants that it shall not, and shall ensure that the Company will not, without the prior consent in writing of the Chargee:

(a) save pursuant to an enforcement of the First Priority Charge, permit any person other than the Chargor, the Chargee, the other Secured Parties or any transferee nominated by the Chargee on enforcement of this Charge to be the registered holder of any of the Charged Shares;

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(b) assign, lease, license or grant any interest in the Charged Shares or agree to surrender or dispose of them (save as in accordance with this Charge, the First Priority Chargeor the Credit Agreement);

(c) permit any variation of the rights attaching to the Charged Shares, in a way which materially prejudices the value of the Charged Shares or otherwise jeopardises the security constituted by this Charge;

(d) take or permit any action which might result in an increase or reduction in the authorised or issued share capital of the Company, in a way which materially prejudices the value of the Charged Shares or otherwise jeopardises the security constituted by this Charge;

(e) exercise any voting or other rights in a way which may materially prejudice the value of the Charged Shares or otherwise materially jeopardise the security constituted by this Charge over them;

(f) effect or permit the Company to be continued to another jurisdiction outside of the Cayman Islands;

(g) effect or permit any scheme of arrangement, merger, consolidation, amalgamation or other reorganisation applicable to the Company;

(h) take any action or cause any action to be taken that shall submit the Company to any proceeding under any applicable law involving bankruptcy, insolvency, reorganization or other laws affecting the rights of creditors generally; or

(i) save in accordance with clauses  4.2(a)(vii) and10.2,permit any amendment to the memorandum or articles of association of the Company, in a way which materially prejudices the value of the Charged Shares or otherwise jeopardises the security constituted by this Charge.

4.5 The Chargor hereby covenants that during the Security Period it will remain the legal and the beneficial owner of the Charged Property (subject only to the Security Interests hereby createdand pursuant to the First Priority Charge, and except as permitted under the Credit Agreement) and that it will notwithout the prior consent in writing of the Chargee:

(a) create or suffer the creation of any Security Interest (other than that created by this Charge and the First Priority Charge) on or in respect of the whole of any part of the Charged Property or any of its interest therein;

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(b) sell, assign, transfer or otherwise dispose of any of its interest in the Charged Property; or

(c) permit the register of members of the Company to be maintained outside of the Cayman Islands.

4.6 The Chargor hereby further covenants that during the Security Period it shall procure that the Company shall not, without the prior consent in writing of the Chargee and except as permitted under the Credit Agreement:

(a) create or permit to subsist any Security Interest upon the whole or any of its assets, except pursuant to the First Priority Charge;

(b) register any transfer of the Charged Shares to any person (except to the Chargee or its nominees pursuant to the provisions of this Charge); except pursuant to the First Priority Charge;

(c) issue any replacement share certificates in respect of any of the Charged Shares;

(d) continue its existence under the laws of any jurisdiction other than the Cayman Islands;

(e) do anything which might prejudice its status as an exempted company;

(f) issue, allot or grant warrants or options with respect to any additional shares;

(g) exercise any rights of forfeiture over any of the Charged Shares; or

(h) purchase, redeem, otherwise acquire, cancel, sub-divide, amalgamate, merge, reclassify or otherwise restructure any of the Charged Property.

5 SECURITY

5.1 In consideration of the Lenders making the Facility available to the Company and as a continuing security for the due and prompt payment, performance and discharge of the Cayman Obligations, the Chargor as legal and beneficial owner hereby:

(a) charges in favour of the Chargeefor its benefit and the benefit of the other Secured Parties by way of a second priority fixed charge the Charged Shares;

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(b) charges in favor of the Chargeefor its benefit and the benefit of the other Secured Parties by way of second priority fixed charge all benefits present and future, actual and contingent accruing in respect of the Charged Property and all the Chargor’s right, title and interest to and in the Charged Property (to the extent not effectively charged under Sub-Clause (a)); and

(c) assigns, and agrees to assign, absolutely by way of second priority security in favour of the Chargeefor its benefit and the benefit of the other Secured Parties all its rights, present and future, actual and contingent, relating to any of the Charged Property (to the extent not effectively charged under Sub-Clause (a)).

5.2 The Chargor shall remain liable to perform all the obligations assumed by it in relation to the Charged Property and the Chargee shall be under no obligation of any kind whatsoever in respect thereof or be under any liability whatsoever in the event of any failure by the Chargor to perform its obligations in respect thereof.

5.3 If the Chargee at any time receives or is deemed to have received notice of any subsequent Security Interest affecting all or part of the Charged Property or any assignment of transfer of the Charged Property which is prohibited by the terms of this Charge, all payments thereafter by or on behalf of the Chargor to the Chargeee  shall be treated as having been credited to a new account of the Chargor and not as having been applied in reduction of the Cayman Obligations as at the time when the Chargee receives such notice.

6 DEALINGS WITH CHARGED PROPERTY

6.1 Unless and until an Event of Default has occurred and is continuing and the Lender shall have given written notice to the Chargor of the Lender’s intention to exercise its rights pursuant to Clause 8.1:

(a) the Chargor shall be entitled to exercise all voting and/or consensual powers pertaining to the Charged Property or any part thereof for all purposes not inconsistent with the terms of this Chargeand/or any other Loan Document;

(b) the Chargor shall be entitled to receive and retain any dividends, interest or other moneys or assets accruing on or in respect of the Charged Property or any part thereof;and

(a) the Chargor shall be entitled to receive all notices pertaining to the Charged Shares.

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6.2 The Chargor shall pay all calls, instalments or other payments, and shall discharge all other obligations, which may become due in respect of any of the Charged Property and upon the occurrence of an Event of Default which is continuing, the Chargee may if it thinks fit make such payments or discharge such obligations on behalf of the Chargor.  Any sums so paid by the Chargee in respect thereof shall be repayable on demand and pending such repayment shall constitute part of the Cayman Obligations.

7 PRESERVATION OF SECURITY

7.1 It is hereby agreed and declared that:

(a) the Security Interest created by this Charge shall be held by the Chargee as a continuing security for the payment and discharge of the Cayman Obligations and the security so created shall not be satisfied by any intermediate payment or satisfaction of any part of the Cayman Obligations;

(b) the Security Interest so created shall be in addition to and shall not in any way be prejudiced or affected by any Security Interest created pursuant to any other Loan Document;

(c) the Chargee shall not be bound to enforce any other security before enforcing the security created by this Charge;

(d) no delay or omission on the part of the Chargee in exercising any right, power or remedy under this Charge shall impair such right, power or remedy or be construed as a waiver thereof nor shall any single or partial exercise of any such right, power or remedy preclude any further exercise thereof or the exercise of any other right, power or remedy.  The rights, powers and remedies herein provided are cumulative and not exclusive of any rights, powers and remedies provided by law and may be exercised from time to time and as often as the Chargee may deem expedient; and

(e) any waiver by the Chargee of any terms of this Charge shall only be effective if given in writing and then only for the purpose and upon the terms for which it is given.

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7.2 The rights of the Chargee under this Charge and the securityhereby constituted shall not be affected by any act, omission, matter or thing which, but for this provision, might operate to impair, affect or discharge such rights and security, in whole or in part, including without limitation, and whether or not known to or discoverable by the Company, the Chargor, the Chargee or any other person:

(a) any time or waiver granted to or composition with the Company or any other person;

(f) the taking, variation, compromise, renewal or release of or refusal or neglect to perfect or enforce any rights, remedies or securities against the Company or any other person;

(g) any legal limitation, disability, incapacity or other circumstances relating to the Company or any other person;

(h) any amendment or supplement to any Loan Document or any other document or security;

(i) the dissolution, liquidation, merger, consolidation, reconstruction or reorganisation of the Company or any other person; or

(j) the unenforceability, invalidity or frustration of any obligations of the Company or any other person under any Loan Document or any other document or security.

7.3 Until the Cayman Obligations have been unconditionally and irrevocably satisfied and discharged in full to the satisfaction of the Chargee, the Chargor shall not by virtue of any payment made hereunder on account of the Cayman Obligations or by virtue of any enforcement by the Chargeeor any other Secured Party of its rights under, or the securityconstituted by, this Charge or by virtue of any relationship between or transaction involving, the Chargor and the Company (whether such relationship or transaction shall constitute the Chargor a creditor of the Company, a guarantor of the obligations of the Company or a party subrogated to the rights of others against the Company or otherwise howsoever and whether or not such relationship or transaction shall be related to, or in connection with, the subject matter of this Charge):

(a) exercise any rights of subrogation in relation to any rights, security or moneys held or received or receivable by the Chargee or any person;

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(k) exercise any right of contribution from any co-surety liable in respect of such moneys and liabilities under any other guarantee, security or agreement;

(l) exercise any right of set-off or counterclaim against the Company or any such co-surety;

(m) receive, claim or have the benefit of any payment, distribution, security or indemnity from the Company or any such co-surety; or

(n) unless so directed by the Chargee (when the Chargor will prove in accordance with such directions), claim as a creditor of the Company or any such co-surety in competition with the Chargee.

7.4 The Chargor shall hold in trust for the Chargee and forthwith pay or transfer (as appropriate) to the Chargee any such payment (including an amount equal to any such set-off), distribution (other than such dividend or distribution payments described in clause5.1(b))or benefit of such security, indemnity or claim in fact received by it.

7.5 Until the Cayman Obligations have been unconditionally and irrevocably satisfied and discharged in full to the satisfaction of the Chargee, the Chargee may at any time keep in a separate account or accounts (without liability to pay interest thereon) in the name of the Chargee for as long as it may think fit, any moneys received, recovered or realised under this Charge or under any other guarantee, security or agreement relating in whole or in part to the Cayman Obligations without being under any immediate obligation to apply the same or any part thereof in or towards the discharge of such amount, provided that the Chargee shall be obliged to apply amounts standing to the credit of such account or accounts once the aggregate amount held by the Chargee in any such account or accounts is sufficient to satisfy the outstanding amount of the Cayman Obligations in full.

8 ENFORCEMENT OF SECURITY

8.1 Subject to the terms of the First Priority Charge and the Intercreditor Agreement, upon the occurrence and during the continuance of an Event of Default, the security hereby constituted shall become immediately enforceable and the Chargee may, at any time, without notice to, or consultation with, or the consent of, the Chargor:

(a) solely and exclusively exercise all voting and/or consensual powers pertaining to the Charged Property or any part thereof and may exercise such powers in such manner as the Chargee may think fit; and/or

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(o) remove the then existing directors and officers (with or without cause) by dating and presenting the undated, signed letters of resignation delivered pursuant to this Charge; and/or

(p) receive and retain all dividends, interest, distributions or other moneys or assets accruing on or in respect of the Charged Property or any part thereof, such dividends, interest, distributions or other moneys or assets to be held by the Chargee, until applied in the manner described in clause 8.4, as additional security charged under and subject to the terms of this Charge and any such dividends, interest, distributions or other moneys or assets received by the Chargor after such time shall be held in trust by the Chargor for the Chargee and paid or transferred to the Chargee on demand; and/or

(q) sell, transfer, grant options over or otherwise dispose of the Charged Property or any part thereof at such place and in such manner and at such price or prices as the Chargee may deem fit, and thereupon the Chargee shall have the right to deliver, assign and transfer in accordance therewith the Charged Property so sold, transferred, granted options over or otherwise disposed of; and/or

(r) complete any undated blank share transfer forms of all or any part of the Charged Property by dating the same and/or inserting its name or the name of its nominee as transferee.

8.6 The Chargee shall not be obliged to make any enquiry as to the nature or sufficiency of any payment received by it under this Charge or to make any claim or to take any action to collect any moneys assigned by this Charge or to enforce any rights or benefits assigned to the Chargee by this Charge or to which the Chargee may at any time be entitled hereunder.

8.7 Upon any sale of the Charged Property or any part thereof by the Chargee the purchaser shall not be bound to see or enquire whether the Chargee’s power of sale has become exercisable in the manner provided in this Charge and the sale shall be deemed to be within the power of the Chargee, and the receipt of the Chargee for the purchase money shall effectively discharge the purchaser who shall not be concerned with the manner of application of the proceeds of sale or be in any way answerable therefor.

8.8 All moneys received by the Chargee pursuant to this Charge shall be held by it upon trustand shall be applied in the manner provided for in Section 8.3 of the Credit Agreement.

8.9 Neither the Chargee, the other Secured Parties nor their respective agents, managers, officers, employees, delegates or advisers shall be liable for any claim, demand, liability, 16

loss, damage, cost or expense incurred or arising in connection with the exercise or purported exercise of any rights, powers and discretions hereunder in the absence of fraud ordishonesty and in no event shall the Chargee be liable for any consequential damages.

8.10 The Chargee shall not by reason of the taking of possession of the whole or any part of the Charged Property or any part thereof be liable to account as mortgagee-in-possession or for anything except actual receipts or be liable for any loss upon realisation or for any default or omission for which a mortgagee-in-possession might be liable.

8.11 The Chargor authorises the Chargee (but the Chargee shall not be obliged to exercise such right) after the occurrence of an Event of Defaultwhich is continuing to set-off against the Cayman Obligations any amount or other obligation (contingent or otherwise) owing by the Chargee to the Chargor.

9 RECEIVER

9.1 Subject to the terms of the First Priority Charge and the Intercreditor Agreement, at any time on and from the occurrence of an Event of Default which is continuing, the Chargee may, without notice to the Chargor, appoint one or more persons to be a Receiver (the “Receiver”) in relation to the Charged Property.

9.2 Where the Chargee appoints two or more persons as Receiver, the Receivers may act jointly or independently.

9.3 The Chargee may remove any Receiver it appoints and appoint another person or other persons as Receiver or Receivers, either in the place of the person removed (or who has otherwise ceased to act) or to act jointly with a Receiver or Receivers.

9.4 In addition to all other rights or powers vested in the Chargee hereunder or by statute or otherwise, the Receiver may take such action in relation to the enforcement of this Charge to:

(a) take possession of, redeem,collect and get in all or any part of the Charged Property;

(s) raise or borrow money and grant security therefor over all or any part of the Charged Property;

(t) appoint an attorney or accountant or other professionally qualified person to assist him in the performance of his functions;

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(u) do all acts and to execute in the name and on behalf of the Chargor any document or deed in respect of all or any part of the Charged Property;

(v) in the name of the Chargor or in his own name, bring, prosecute, enforce, defend and abandon applications, claims, disputes, actions, suits and proceedings in connection with all or any part of the Charged Property and to submit to arbitration, negotiate, compromise and settle any such applications, claims, disputes, actions, suits or proceedings;

(w) sell, call in, collect and convert to money the Charged Property or any of it at such place and in such manner and at such price or prices as he shall think fit;

(x) exercise any powers, discretion, voting or other rights or entitlements in relation to the Charged Property and generally to carry out any other action which he may in his sole discretion deem appropriate in relation to the enforcement of this Charge;

(y) make any arrangement or compromise which he shall think expedient; and

(z) do all such other acts and things as may be considered to be incidental or conducive to any of the matters or powers aforesaid and which the Receiver lawfully may or can do as agent for the Chargor.

9.5 Every Receiver shall, so far as it concerns responsibility for his acts, be deemed to be an agent of the Chargor, which shall be solely responsible for his acts and defaults and for the payment of his remuneration and no Receiver shall at any time act as agent for the Chargee.

9.6 Every Receiver shall be entitled to remuneration for his services at a rate to be fixed by agreement between him and the Chargee (or, failing such agreement, to be fixed by the Chargee) appropriate to the work and responsibilities involved, upon the basis of current industry practice.

9.7 To the fullest extent permissible under law, the Chargee may exercise any right or power that the Receiver may exercise in relation to the enforcement of this Charge.

9.8 The Chargee shall have no liability or responsibility to the Chargor arising out of the exercise or non-exercise of the powers conferred on it by the above Clause.

9.9 The appointment of a Receiver shall not preclude the Chargee from making any subsequent appointment of a Receiver over all or any of the Charged Property over which a Receiver has not previously been appointed or has ceased to act.

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10 FURTHER ASSURANCES

10.1 The Chargor shall execute and do all such assurances, acts and things as the Chargee in its absolute discretion may require for:

(a) perfecting, protecting or ensuring the priority of the Security Interesthereby created (or intended to be created);

(aa) preserving or protecting any of the rights of the Chargee under this Charge;

(bb) ensuring that the security constituted by this Charge and the covenants and obligations of the Chargor under this Charge shall inure to the benefit of any assignee of the Chargee;

(cc) facilitating the appropriation or realisation of the Charged Property or any part thereof; or

(dd) exercising any power, authority or discretion vested in the Chargee under this Charge,

in any such case forthwith upon demand by the Chargee and at the expense of the Chargor.

10.10 Without limitation to the generality of clause 10.1, the Chargor covenants with the Chargee that it will on demand of the Chargeeuse its best efforts toprocure any amendment to the memorandum and articles of association of the Company necessary or, in the opinion of the Chargee(acting reasonably) desirable, in order to give effect to the terms of this Charge or any documents or transactions provided for herein.

10.11 The Chargor shall provide such assurances and do all acts and things the Receiver may in his absolute discretion require for the purpose of exercising the powers (or giving effect to the exercise of the powers) conferred on the Receiver hereunder and the Chargor hereby irrevocably appoints the Receiver to be the lawful attorney in fact of the Chargor to do any act or thing and to exercise all the powers of the Chargor for the purpose of exercising the powers (or giving effect to the exercise of the powers) conferred on the Receiver hereunder.

11 INDEMNITIES

11.1 The Chargor will indemnify and save harmless the Chargee,  the other Secured Parties, the Receiver and each agent or attorney appointed under or pursuant to this Charge from and 19

against any and all expenses, claims, liabilities, losses, taxes, costs, duties, fees and charges properly and reasonably suffered, incurred or made by the Chargee,  the other Secured Parties, the Receiver or such agent or attorney:

(a) in the exercise or purported exercise of any rights, powers or discretions vested in them pursuant to this Charge or by law;

(ee) in the preservation or enforcement of the Chargee’s or any other Secured Party’s rights under this Charge or the priority thereof; or

(ff) on the release of any part of the Charged Property from the security created by this Charge,

and the Chargee,  the other Secured Parties, the Receiver or such agent or attorney may retain and pay all sums in respect of the same out of money received under the powers conferred by this Charge.  All amounts recoverable by the Chargee, the other Secured Parties, the Receiver or such agent or attorney or any of them shall be recoverable on a full indemnity basis.

11.12 If, under any applicable law or regulation, and whether pursuant to a judgment being made or registered against the Chargor or the bankruptcy or liquidation of the Chargor or for any other reason any payment under or in connection with this Charge is made or falls to be satisfied in a currency (the “Payment Currency”) other than the currency in which such payment is due under or in connection with this Charge (the “Contractual Currency”), then to the extent that the amount of such payment actually received by the Chargee when converted into the Contractual Currency at the rate of exchange, falls short of the amount due under or in connection with this Charge, the Chargor, as a separate and independent obligation, shall indemnify and hold harmless the Chargee against the amount of such shortfall.  For the purposes of thisClause,  “rate of exchange” means the rate at which the Chargee is able on or about the date of such payment to purchase the Contractual Currency with the Payment Currency and shall take into account any premium and other costs of exchange with respect thereto.

12 POWER OF ATTORNEY

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12.1 Subject to the terms of the First Priority Charge and the Intercreditor Agreement, the Chargor, by way of security and in order more fully to secure the performance of its obligations hereunder,  hereby irrevocably appoints the Chargee, each director and officer of the Chargee and the persons deriving title under it jointly and also severally to be its attorney:

(a) to execute and complete in favour of the Chargee or its nominees or of any purchaser any documents which the Chargee may from time to time require for perfecting its title to or for vesting any of the assets and property hereby charged or assigned in the Chargee or its nominees or in any purchaser and to give effectual discharges for payments;

(gg) to take and institute on non‑payment (if the Chargee in its sole discretion so decides) all steps and proceedings in the name of the Chargor or of the Chargee for the recovery of such moneys, property and assets hereby charged and to agree accounts;

(hh) to act as the Chargor’s corporate representative (and/or to appoint any officer or nominee of the Chargee for such purpose) to represent the Chargor at any general meeting of the members of the Company and to sign any resolution in writing of the members of the Company or to requisition or convene general meetings of the Company or to waive or consent to short notice of such in that capacity;

(ii) to make allowances and give time or other indulgence to any surety or other person liable;

(jj) otherwise generally to act for it and in its name and on its behalf; and

(kk) to sign, execute, seal and deliver and otherwise perfect and do any such legal assignments and other assurances, charges, authorities and documents over the moneys, property and assets hereby charged, and all such deeds, instruments, acts and things (including, without limitation, those referred to in clause 9) which may be required for the full exercise of all or any of the powers conferred or which may be deemed proper on or in connection with any of the purposes aforesaid,

provided that, unless and until the occurrence of an Event of Default which is continuing, the Chargee may not exercise any powers pursuant to this appointment.

12.13 The power hereby conferred shall be a general power of attorney and the Chargor hereby ratifies and confirms and agrees to ratify and confirm any instrument, act or thing which any such attorney may execute or do.  In relation to the power referred to herein, the 21

exercise by the Chargee of such power shall be conclusive evidence of its right to exercise the same.

13 EXPENSES

13.1 The Chargor shall pay to the Chargee on demand all reasonable and documented costs, fees and expenses (including, but not limited to,reasonable legal fees and expenses) and taxes thereon incurred by the Chargee or for which the Chargee may become liable in connection with:

(a) the negotiation, preparation and execution of this Charge;

(ll) the preserving or enforcing of, or attempting to preserve or enforce, any of its rights under this Charge or the priority hereof;

(mm) any variation of, or amendment or supplement to, any of the terms of this Charge; and/or

(nn) any consent or waiver required from the Chargee in relation to this Charge,

and in any case referred to in sub-clause (c) and (d) regardless of whether the same is actually implemented, completed or granted, as the case may be.

13.14 The Chargor shall pay promptly any stamp, documentary and other like duties and taxes to which this Charge may be subject or give rise and shall indemnify the Chargee on demand against any and all liabilities with respect to or resulting from any delay or omission on the part of the Chargor to pay any such duties or taxes.

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14 NOTICES

14.1Any notice required to be given hereunder shall be in writing in the English language and shall be served by sending the same by prepaid recorded post, facsimile or by delivering the same by hand to the address of the Party or Parties in question as set out below (or such other address as such Party or Parties shall notify the other Parties of in accordance with this Clause). Any notice sent by post as provided in this Clause shall be deemed to have been served five Business Days after despatch and any notice sent by facsimile as provided in this Clause shall be deemed to have been served at the time of despatch and in proving the service of the same it will be sufficient to prove in the case of a letter that such letter was properly stamped, addressed and placed in the post; and in the case of a facsimile that such facsimile was duly despatched to a current facsimile number of the addressee.

Chargor:
Name:	DMIH Limited
Address:	c/o Rightside Group, Ltd.
	5808 Lake Washington Blvd. NE. Suite 300
	Kirkland, WA 98033
	United States of America
Attention:	Tracy Knox, Chief Financial Officer
Telephone:	(425) 298 2336
E-mail:	tracy.knox@rightside.co
Chargee:
Name:	Obsidian Agency Services, Inc.
Address:	c/o Tennenbaum Capital Partners, LLC,
	2951 28th Street, Suite 1000,
	Santa Monica,
	California 90405,
	United States of America.
Attention:	Asher Finci
Fax No:	(310) 889-4950),
with a copy (which shall not constitute notice) to:
Address:	Proskauer Rose LLP,

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	2049 Century Park East, Suite 3200,
	Los Angeles,
	California 90067,
	United States of America.
Attention:	Steven O. Weise and Glen K. Lim
Fax:	Fax No. (310) 557-2193

15 ASSIGNMENTS

15.1 This Charge and all non-contractual obligations arising out of or in connection with it shall be binding upon and shall inure to the benefit of the Chargor and the Chargee and each of their respective successors and (subject as hereinafter provided) assigns and transferees and references in this Charge to any of them shall be construed accordingly.

15.2 The Chargor may not assign or transfer all or any part of its rights and/or obligations under this Charge without the prior written consent of the Chargee.

15.3 The Chargee mayassign or transfer all or any part of its rights or obligations under this Charge to any assignee or transferee and shall notify the Chargor promptly following any such assignment or transfer.

16 RELEASE

16.1 Upon the Chargee being satisfied that the Cayman Obligations have been unconditionally and irrevocably paid and discharged in full, and following a written request therefor from the Chargor, the Chargee will, subject to being indemnified to its reasonable satisfaction for the costs and expenses incurred by the Chargee in connection therewith, release the security constituted by this Charge.

16.2 Any settlement or discharge under this Charge between the Chargee and the Chargor shall be conditional upon no security or payment to the Chargee by the Company or the Chargor or any other person being avoided or set-aside or ordered to be refunded or reduced by virtue of any provision or enactment relating to bankruptcy, insolvency, administration or liquidation for the time being in force and, if such condition is not satisfied, the Chargee shall be entitled to recover from the Chargor on demand the value of such security or the amount of any such payment as if such settlement or discharge had not occurred.

16.3 Any receipt, release or discharge of any Security Interest created by this Charge or of any liability arising under this Charge may be given by the Chargeein accordance with the 24

provisions of this Charge and shall not release or discharge the Chargor from any liability owed to the Chargeefor the same or any other monies which may exist independently of this Charge.  Where such receipt, release or discharge relates to only part of the Cayman Obligations such receipt, release or discharge shall not prejudice or affect any other part of the Cayman Obligations or any of the rights and remedies of the Chargeeunder this Charge or any of the obligations of the Chargor under this Charge.

16.4 The Chargeeshall, following the release of the Security Interest and discharge of the obligations of the Chargor under this Charge, provide written confirmation of such release and discharge to the Chargor.

16.5 The security constituted by this Charge shall be continuing and shall not be considered as satisfied or discharged by any intermediate payment or settlement of the whole or any part of the Cayman Obligations or any other matter or thing whatsoever and shall be binding until all the Cayman Obligations have been unconditionally and irrevocably paid and discharged in full in accordance with the terms of this Charge.

16.6 This Charge is in addition to and shall not merge with or otherwise prejudice or affect any banker’s lien, right to combine and consolidate accounts, right of set-off or other contractual or other right or remedy, or any guarantee, lien, pledge, bill, note, charge or other security now or hereafter held by or available to the Chargee.

17 CURRENCY

17.1 For the purpose of, or pending the discharge of, any of the Cayman Obligations, the Chargee may, in its sole discretion, convert any moneys received, recovered, or realised in any currency under this Charge (including the proceeds of any previous conversion under this Clause) from their existing currency or denomination into any other at such rate or rate of exchange and at such time as the Chargee thinks fit.

17.2 No payment to the Chargee (whether under any judgment of a court or otherwise) shall discharge the Cayman Obligations in respect of which it was made unless and until the Chargee shall have received payment in full in the currency in which such Cayman Obligations were incurred and, to the extent that the amount of any such payment shall on actual conversion into such currency fall short of such Cayman Obligations expressed in that currency, the Chargee shall have a further separate cause of action against the Chargor and shall be entitled to enforce that cause of action and this Charge to recover the amount of the shortfall. 

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18 MISCELLANEOUS

18.1 The Chargee, at any time and from time to time, may delegate by power of attorney or in any other manner to any person or persons all or any of the powers, authorities and discretions which are for the time being exercisable by the Chargee under this Charge in relation to the Charged Property or any part thereof.  Any such delegation may be made upon such terms and be subject to such regulations as the Chargee may think fit.  The Chargee shall not be in any way liable or responsible to the Chargor for any loss or damage arising from any act, default, omission or misconduct on the part of any such delegate provided the Chargee has acted reasonably in selecting such delegate.

18.2 All sums payable by the Chargor under this Charge shall be paid without any set off, counterclaim, withholding or deduction whatsoever unless required by law in which event the Chargor will, simultaneously with making the relevant payment under this Charge,pay to the Chargee such additional amount as will result in the receipt by the Chargee of the full amount which would otherwise have been receivable and will supply the Chargee promptly with evidence satisfactory to the Chargee that the Chargor has accounted to the relevant authority for the sum withheld or deducted.

18.3 No delay or omission on the part of the Chargee in exercising any right or remedy under this Charge shall impair that right or remedy or operate as or be taken to be a waiver of it nor shall any single, partial or defective exercise of any such right or remedy preclude any other or further exercise under this Charge of that or any other right or remedy.

18.4 The Chargee’s rights, powers and remedies under this Charge are cumulative and are not, nor are they to be construed as, exclusive of any rights, powers or remedies provided by law or otherwise and may be exercised from time to time and as often as the Chargee deems expedient.

18.5 If at any time any one or more of the provisions of this Charge is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions of this Charge nor the legality, validity or enforceability of such provision under the law of any other jurisdiction shall be in any way affected or impaired as a result.

18.6 Any statement, certificate or determination of the Chargee as to the Cayman Obligations or (without limitation) any other matter provided for in this Charge shall, in the absence of manifest error, be conclusive and binding on the Chargor.

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18.7 The Chargor shall at all times maintain an agent for service of process in the Cayman Islands.  Such agent shall be the Company, with an address of c/o the offices of Maples Corporate Services Limited, Ugland House, South Church Street, PO Box 309, Grand Cayman KY1-1104, Cayman Islands, and any writ, judgment or other notice of legal process shall be sufficiently served on the Chargor if delivered to such agent at its address set out above.  The Chargor undertakes not to revoke any authority of above agent and if, for any reason, such agent no longer serves as agent of the Chargor to receive service of process the Chargor shall promptly appoint another such agent and advise the Chargee of the new agent’s name and address for service.

18.8 The Chargor shall be deemed to be a principal debtor and the sole, original and independent obligor for the Cayman Obligations and the Security Interest created by this Charge shall be deemed to be a principal security for the Cayman Obligations.  The liability of the Chargor under this Charge shall not be discharged, impaired or otherwise affected by any circumstance, act, omission, matter or thing which but for this provision might operate to reduce, release, prejudice or otherwise exonerate the Chargor from its obligations under the Loan Documents in whole or in part, including without limitation and whether or not known to the Chargor, the Chargee or any other person any variation (however fundamental and whether or not involving any increase in the liability of the Chargor or any other obligor thereunder) or replacement of any Loan Documents or any other document or security so that the Chargor’s obligations under this Charge remain in full force and effect and that this Charge shall be construed accordingly as if there were no such circumstance, act, omission, matter or thing.

18.9 This Charge, including its Schedules, contains the whole agreement between the Parties in respect of the subject matter of this Charge. 

18.10 No variations of this Charge shall be effective unless made in writing and signed by each of the Parties.

18.11 The headings in this Charge are inserted for convenience only and shall not affect the construction of this Charge.

18.12 This Charge may be executed in counterparts each of which when executed and delivered shall constitute an original but all such counterparts together shall constitute one and the same instrument.

18.13 If any of the clauses, sub-clauses, conditions, covenants or restrictions of this Charge or any deed or document emanating from it shall be found to be void but would be valid if some part thereof were deleted or modified, then such clause,sub-clause, condition, covenant or 27

restriction shall apply with such deletion or modification as may be necessary to make it valid and effective.

18.14 Sections 8 and 19(3) of the Electronic Transactions Law (2003 Revision) of the Cayman Islands shall not apply to this Charge.      

19 LAW AND JURISDICTION

19.1 This Charge shall be governed by and construed in accordance with the laws of the Cayman Islands and the Parties hereby irrevocably submit to the non-exclusive jurisdiction of the courts of the Cayman Islands, provided that nothing in this Clause shall affect the right of the Chargee to serve process in any manner permitted by law or limit the right of the Chargee to take proceedings with respect to this Charge against the Chargor in any jurisdiction nor shall the taking of proceedings with respect to this Charge in any jurisdiction preclude the Chargee from taking proceedings with respect to this Charge in any other jurisdiction, whether concurrently or not.

[Page left intentionally blank]

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IN WITNESS whereof the Parties have caused this Charge to be duly executed (as a Deed in the case of the Chargor) and delivered the day and year first before written.

EXECUTED as a DEEDand DELIVERED	)
by DMIH Limited, in the presence of:-	)	/s/ Rick Danis

Witness	/s/ Elizabeth Lee
Name	Elizabeth Lee

EXECUTED and DELIVERED	)
by Obsidian Agency Services, Inc.	)
	)	/s/ Howard Levkowitz

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SCHEDULE 1

SHARE TRANSFER FORM

The undersigned, DMIH Limited, (the “Transferor”) for value received, receipt and sufficiency of which is hereby acknowledged, hereby transfers to ______________________________, of ______________________________  (the “Transferee”), the _____ shares standing in its name in the company called United TLD Holdco Ltd. to hold the same unto the Transferee.

Signed by the Transferor

acting by:

_______________________

DMIH Limited

Dated this _________________

Signed by the Transferee

acting by:

_______________________

[Name]

Dated this ___________

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SCHEDULE 2

LETTER OF RESIGNATION

To:United TLD Holdco Ltd.

I, [Name of Director], hereby tender my resignation as a Director of United TLD Holdco Ltd. (“the Company”) with effect from the date hereof and confirm that I have no claims against the Company whether for compensation for loss of office, arrears of pay or otherwise.

____________________

[Name]

Director

Date:  _______________

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AUTHORITY TO DATE LETTER OF RESIGNATION

TO:Obsidian Agency Services, Inc. (the “Chargee”)

You are hereby authorisedto complete and date the letter of resignation I have deposited with you today in respect of my directorship of United TLD Holdco Ltd. by dating the same at any time after an Event of Default (as defined in the second priority charge over sharesentered into between DMIH Limited and the Chargee dated[              ] 2014 (as the same may be amended from time to time))has occurred which is continuing.

____________________

[Name]

[Director]

Date:______________2014

32

SCHEDULE 3

IRREVOCABLE PROXY

The undersigned,  DMIH Limited (the "Shareholder"), being the legal and beneficial owner of all of the issued shares of United TLD Holdco Ltd., a Cayman Islands exempted company (the "Company"), hereby appoints Obsidian Agency Services, Inc., as Chargee(the "Proxy Holder") the true and lawful attorney, proxy and representative and proxy of the Shareholder for and in the Shareholder's name, place and stead to attend all meetings of the shareholders of the Company and to vote at a meeting any and all shares in the Company at the time standing in the Shareholder's name and to exercise all consensual rights in respect of such shares (including without limitation giving or withholding written consents of shareholders and calling special general meetings of shareholders) upon the occurrence of an Event of Default (having the meaning assigned in the second priority charge over shares and entered into between the Shareholder and the Proxy Holder dated [     ] 2014 (the “Share Charge”)) which is continuing.

The Shareholder hereby affirms that this proxy is given pursuant to the Share Charge.  THIS PROXY IS COUPLED WITH AN INTEREST AND IS IRREVOCABLE.

The Shareholder hereby ratifies and confirms and undertakes to ratify and confirm all that the Proxy Holder may lawfully do or cause to be done by virtue hereof.

If at any time this proxy shall for any reason be ineffective or unenforceable or fail to provide the Chargee with the rights or the control over the Shareholder's shares of the Company purported to be provided herein, the Shareholder shall execute a replacement instrument which provides the Chargee with substantially the same control over the Company as contemplated herein.  This irrevocable proxy shall be governed by the laws of the Cayman Islands and the Shareholder irrevocably submits to the jurisdiction of the courts of the Cayman Islands in relation to the matters contained herein.

Executed and delivered as a deed this ______________2014

_______________

Director

For and on behalf of

DMIH Limited

In the presence of:

Witness  _____________________________

Name     _____________________________

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Address _____________________________

34

SCHEDULE 4

UNDERTAKING

United TLD Holdco Ltd.

(the “Company”)

To:Obsidian Agency Services, Inc. (the “Chargee”)

_________________2014

Charge Over Shares

I confirm that we have been instructed byDMIH Limited (the “Chargor”) to make and have accordingly made an annotation of the existence of the second priority charge over shares entered into between the Chargor and the Chargee (the “Share Charge”) noting the existence of the security interests created in favour of Chargee by the Share Charge in the register of members of the Company in the terms required by the Share Charge, a true copy of which is attached hereto.

The Company hereby irrevocably undertakes and covenants with the Chargee:

(i) following the occurrence of an Event of Default which is continuing, to register all transfers of shares of the Company made pursuant to and in accordance with the terms of the Share Charge submitted to the Company for registration as soon as practical following submission, subject to the terms of the First Priority Charge and the Intercreditor Agreement (each as defined in the Share Charge);

(ii) not to register any transfer of the issued shares of the Company (other than pursuant to the Share Charge), subject to the terms of the First Priority Charge and the Intercreditor Agreement;

(iii) not to issue, redeem or repurchase any shares of the Company without the prior written consent of the Chargee, in a way which materially prejudices the value of the Charged Shares or otherwise jeopardises the security constituted by the Share Charge; or

(iv) not without the Chargee’s prior written consent to change the registered office of the Company or the place at which (or the service provider by which) the register of members of the Company is maintained.

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Additionally, the Company acknowledges and agrees to its appointment as agent for service of process in the Cayman Islands for the Chargor in accordance with clause 18.7 of the Share Charge.

Executed and delivered as a deed this ___________2014 for and on behalf of the Company

____________________

Director

In the presence of:

Witness  _____________________________

Name     _____________________________

Address _____________________________

36

SCHEDULE 5

NOTICE OF CHARGE OVER SHARES

To:United TLD Holdco Ltd. (the “Company”)

________________2014

Charge over Shares

We hereby notify you that pursuant to asecond priority charge over sharesdated [      ] 2014 betweenDMIH Limited (the “Chargor”) and Obsidian Agency Services, Inc., asChargee (the “Chargee”), the Chargor has granted a security interest over all of the shares in the Company registered in its name (the “Share Charge”) and, at any time after the Chargee notifies you that an Event of Default (as defined in the Share Charge) has occurred and is continuing, you (and any service provider of the Company in possession of the register of members of the Company) are hereby authorised and instructed to take such steps to register the Chargeeor its nominee as the registered holder of the shares pursuant to the Share Charge without further reference to ourselves.

Yours faithfully,

_______________

Director

For and on behalf of

DMIH Limited

In the presence of:

Witness  _____________________________

Name     _____________________________

Address _____________________________

37

EX-10.18

Exhibit 10.18

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	Kevin Fink
Title:	SVP, Operations	General Counsel	SVP, Engineering
Address, City, State, Postal Code:	5808 Lake Washington Blvd. Kirkland, WA 90833	5808 Lake Washington Blvd. Kirkland, WA 90833	5808 Lake Washington Blvd. Kirkland, WA 90833
Phone:	425.298.2626	425.298.2663	425.298.2645
Email:	matt@rightside.co	rick@rightside.co	kevin.fink@rightside.co

TERM

TERM: Starting on August 1, 2014  (“Effective Date”) and continuing throughJuly 31, 2016 (inclusive)

☒ADSENSE FOR DOMAINS (“AFD”)	AFD Revenue Share Percentage	AFD Deduction Percentage
Sites approved for AFD: See Section 1.29 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 1.29 below	See Exhibit A	[*****]%

CURRENCY

☐AUD ☐ JPY ☐ CAD ☐ KRW ☐ EUR ☐ USD ☐ GBP ☐ Other

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

1

This Google Services Agreement (“Agreement”) is entered into by Google Inc. (“Google”) and Rightside Group, Ltd  (“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/AFSas 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. “CompanyContent” 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. “End Users” means individual human end users of a Site.

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

2

1.15. “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.

1.16. “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) [*****].

1.17. “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 [*****].

1.18. “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.

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

1.20. “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.

1.21. “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.

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

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

1.24. “Results” means Ad Sets or Ads.

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

1.26. “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.

1.27. “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.

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

1.29. “Site(s)” meansAuthorized 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.

1.30. “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.

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

3

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

1.32. “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) [*****].

1.33. “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 tolaunch 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

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

4

(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.

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, 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 orplace 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 Resultsor 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;

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

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

5

(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 [*****].

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.[*****] that is the same as or substantially similar in nature to [*****]

5. Leased Domains.Company may display AFD Ads and AFD/AFS Adson 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 AFD Ads and AFD/AFS 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 AFD Ads,  and AFD/AFS 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 [*****].

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

6

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.

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 [*****].

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

7

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 [*****].

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 [*****]. 

(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 [*****].

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

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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;

(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.Companymay[*****].

(c) 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(c) continues for [*****], Company may immediately terminate this Agreement upon notice to Google.

(d) 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.

(e) Google may, in itssole discretion, terminate all or any part of this Agreement upon [*****]notice to Company.

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

9

(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 asgiven on receipt, asverified 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 agreedin writing to be bound by the terms of this Agreement; (b) the assigning party remains liable for obligations under theAgreement 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 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  

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

10

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 orunenforceable, 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 Agreementdoes 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/ Nikesh Arora	By:	/s/ Taryn Naidu
Print Name:	Nikesh Arora	Print Name:	Taryn Naidu
Title:	President, Global Sales and Business Development	Title:	CEO and President
Date:	August 19, 2014	Date:	August 19, 2014

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

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EXHIBIT A

AFD and AFD/AFS Revenue Share

[*****]

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

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EX-10.8

Exhibit 10.8

UNCONDITIONAL GUARANTEE

(Non-U.S. Entities)

This continuing UNCONDITIONAL GUARANTEE (Non-U.S. Entities) (“Guarantee”) is entered into as of August 1, 2014, by each of the signatories hereto (together with each Material Foreign Subsidiary of any Loan Party who accedes to this Guarantee as a guarantor after the date hereof pursuant to Section 6.9 of the Credit Agreement referred to below (each a “Guarantor” and, collectively, the “Guarantors”) in favor of SILICON VALLEY BANK (“SVB”), as Lender (in its capacity as collateral agent for the Secured Parties, and together with the Secured Parties, hereinafter referred to as “Lender”).

Recitals

A.Lender, 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, the “Irish Guarantors” and each an “Irish Guarantor”, and the Irish Guarantors with United, the “Non-U.S. Borrowers” and each a “Non-U.S. Borrower”) (the U.S. Borrowers and the Non-U.S. Borrowers are collectively referred to as “Borrowers” and each individually, a “Borrower”) and the Non-U.S. Borrowers, have entered into that certain Credit Agreement dated as of the date hereof (as amended, restated, or otherwise modified from time to time, the “Credit Agreement”), pursuant to which Lender has agreed, among other things, to make certain advances of money and to extend certain financial accommodations to the Non-U.S. Borrowers (collectively, the “Loans”), subject to the terms and conditions set forth therein.  Capitalized terms used but not otherwise defined herein shall have the meanings given them in the Credit Agreement.

B.In consideration of the agreement of Lender to make the Loans to the Non-U.S. Borrowers under the Credit Agreement, each Guarantor is willing to guarantee the full payment and performance by the Non-U.S. Borrowers of all of their obligations thereunder and under the other Loan Documents, all as further set forth herein.

Now, Therefore, to induce Lender to enter into the Credit Agreement and to make the Loans to the Non-U.S. Borrowers, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound, each Guarantor hereby represents, warrants, covenants and agrees as follows: 

Section 1.Guarantee.  

1.1Guarantee

(a) Each Guarantor hereby, jointly and severally, unconditionally and irrevocably, guarantees to Lender and its successors, indorsees, transferees and assigns, the prompt and complete payment and performance by each Non-U.S. Borrower and the other Loan Parties when due (whether at the stated maturity, by acceleration or otherwise) of the Obligations (as such term is defined in the Credit Agreement) of each Non-U.S. Borrower, other than Excluded Swap Obligations (as defined in the Guarantee and Collateral Agreement) (collectively, the “Non-U.S. Obligations”).  For the avoidance of doubt, all references herein to “Discharge of Obligations” shall refer only to the Non-U.S. Obligations.  In furtherance of the foregoing, and without limiting the generality thereof, each Guarantor agrees as follows:

(i) each Guarantor’s liability hereunder shall be the immediate, direct, and primary obligation of such Guarantor and shall not be contingent upon Lender’s exercise or enforcement of any remedy it or they may have against any Borrower, any other Guarantor, any other Person, or all or any portion of the Collateral; and

(ii) Lender may enforce this guarantee notwithstanding the existence of any dispute between Lender and any Borrower or any other Guarantor with respect to the existence of any Event of Default.

(b) Anything herein or in any other Loan Document to the contrary notwithstanding, the maximum liability of each Guarantor hereunder and under the other Loan Documents shall in no event exceed the amount which can be guaranteed by such Guarantor under applicable federal, state or other applicable laws relating to the insolvency of debtors (after giving effect to the right of contribution established in Section 1.2).

(c) Each Guarantor agrees that the Non-U.S. Obligations may at any time and from time to time exceed the amount of the liability of such Guarantor hereunder without impairing the guarantee contained in this Section 1 or affecting the rights and remedies of Lender hereunder.

(d) The guarantee contained in this Section 1 shall remain in full force and effect until the Discharge of Obligations, notwithstanding that from time to time during the term of the Credit Agreement the outstanding amount of the Non-U.S. Obligations may be zero.

(e) No payment made by any Borrower, any Guarantor, any other guarantor or any other Person or received or collected by Lender from any Borrower, any Guarantor, any other guarantor or any other Person by virtue of any action or proceeding or any setoff or appropriation or application at any time or from time to time in reduction of or in payment of the Non-U.S. Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of any Guarantor hereunder which shall, notwithstanding any such payment (other than any payment made by such Guarantor in respect of the Non-U.S. Obligations or any payment received or collected from such Guarantor in respect of the Non-U.S. Obligations), remain liable for the Non-U.S. Obligations up to the maximum liability of such Guarantor hereunder until the Discharge of Obligations.

1.2Right of Contribution.  If in connection with any payment made by any Guarantor hereunder any rights of contribution arise in favor of such Guarantor against one or more other Guarantors, such rights of contribution shall be subject to the terms and conditions of Section 1.3.  The provisions of this Section 1.2 shall in no respect limit the obligations and liabilities of any Guarantor to Lender, and each Guarantor shall remain liable to Lender for the full amount guaranteed by such Guarantor hereunder.

1.3No Subrogation.  Notwithstanding any payment made by any Guarantor hereunder or any setoff or application of funds of any Guarantor by Lender, no Guarantor shall be entitled to be subrogated to any of the rights of Lender against any Borrower or any other Guarantor or any Collateral or guarantee or right of offset held by Lender for the payment of the Non-U.S. Obligations, nor shall any Guarantor seek or be entitled to seek any contribution or reimbursement from any Borrower or any other Guarantor in respect of payments made by such Guarantor hereunder, in each case, until the Discharge of Obligations.  If any amount shall be paid to any Guarantor on account of such subrogation rights at any time prior to the Discharge of Obligations, such amount shall be held by such Guarantor in trust for Lender, shall be segregated from other funds of such Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over to Lender in the exact form received by such Guarantor (duly indorsed by such Guarantor to Lender, if required), to be applied, at any time at Lender’s election, in such order as

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set forth in Section 8.3 of the Credit Agreement irrespective of the occurrence or the continuance of any Event of Default.

1.4Amendments, etc. with respect to the Non-U.S. Obligations.  Each Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against any Guarantor and without notice to or further assent by any Guarantor, any demand for payment of any of the Non-U.S. Obligations made by Lender may be rescinded by Lender and any of the Non-U.S. Obligations continued, and the Non-U.S. Obligations, or the liability of any other Person upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by Lender, and the Credit Agreement, the other Loan Documents, the Specified Swap Agreements and any other documents executed and delivered in connection therewith may be amended, modified, supplemented or terminated, in whole or in part, Lender may deem advisable from time to time, and any collateral security, guarantee or right of offset at any time held by Lender for the payment of the Non-U.S.  Obligations may be sold, exchanged, waived, surrendered or released.  Lender shall not have any obligation to protect, secure, perfect or insure any Lien at any time held by it as security for the Non-U.S. Obligations or for the guarantee contained in this Section 1 or any property subject thereto.

1.5Guarantee Absolute and Unconditional; Guarantor Waivers; Guarantor Consents.  Each Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of the Non-U.S. Obligations and notice of or proof of reliance by Lender upon the guarantee contained in this Section 1 or acceptance of the guarantee contained in this Section 1; the Non-U.S. Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon the guarantee contained in this Section 1; and all dealings between any Borrower and any of the Guarantors on the one hand, and Lender, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon the guarantee contained in this Section 1.  Each Guarantor further waives:

(a) diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon any Borrower or any of the other Guarantors with respect to the Non-U.S. Obligations;

(b) any right to require Lender to marshal assets in favor of any Borrower, such Guarantor, any other Guarantor or any other Person, to proceed against any Borrower, any other Guarantor or any other Person, to proceed against or exhaust any of the Collateral, to give notice of the terms, time and place of any public or private sale of personal property security constituting the Collateral or other collateral for the Non-U.S. Obligations or to comply with any other provisions of Section 9611 of the UCC (or any equivalent provision of any other applicable law) or to pursue any other right, remedy, power or privilege of Lender whatsoever;

(c) the defense of the statute of limitations in any action hereunder or for the collection or performance of the Non-U.S. Obligations;

(d) any defense based upon Lender’s errors or omissions in the administration of the Non-U.S. Obligations;

(e) any rights to setoffs and counterclaims;

(f) any defense based upon an election of remedies (including, if available, an election to proceed by nonjudicial foreclosure) which destroys or impairs the subrogation rights of such

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Guarantor or the right of such Guarantor to proceed against any Borrower or any other obligor of the Non-U.S. Obligations for reimbursement;

(g) the benefit of California Civil Code Section 2815 permitting the revocation of this Guarantee as to future transactions and the benefit of California Civil Code Sections 2809, 2810, 2819, 2839, 2845, 2848, 2849, 2850, 2899 and 1432 with respect to certain suretyship defenses; and

(h) without limiting the generality of the foregoing, to the fullest extent permitted by law, any defenses or benefits that may be derived from or afforded by applicable law that limit the liability of or exonerate guarantors or sureties, or which may conflict with the terms of this Guarantee.

Each Guarantor understands and agrees that the guarantee contained in this Section 1 shall be construed as a continuing, absolute and unconditional guarantee of payment without regard to (i) the validity or enforceability of the Credit Agreement or any other Loan Document, any of the Non-U.S. Obligations or any other collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by Lender, (ii) any defense, setoff or counterclaim (other than a defense of payment or performance) which may at any time be available to or be asserted by any Borrower or any other Person against Lender, (iii) any other circumstance whatsoever (with or without notice to or knowledge of any Borrower or such Guarantor) which constitutes, or might be construed to constitute, an equitable or legal discharge of any Borrower and the Guarantors for the Non-U.S. Obligations, or of such Guarantor under the guarantee contained in this Section 1, in bankruptcy or in any other instance, (iv) any Insolvency Proceeding with respect to any Borrower, any Guarantor or any other Person, (v) any merger, acquisition, consolidation or change in structure of any Borrower, any Guarantor or any other Person, or any sale, lease, transfer or other disposition of any or all of the assets or Voting Stock of any Borrower, any Guarantor or any other Person, (vi) any assignment or other transfer, in whole or in part, of Lender’s interests in and rights under this Guarantee or the other Loan Documents, including Lender’s right to receive payment of the Non-U.S. Obligations, or any assignment or other transfer, in whole or in part, of Lender’s interests in and to any of the Collateral, (vii) Lender’s vote, claim, distribution, election, acceptance, action or inaction in any Insolvency Proceeding related to any of the Non-U.S. Obligations, and (viii) any other guarantee, whether by such Guarantor or any other Person, of all or any part of the Non-U.S. Obligations or any other indebtedness, obligations or liabilities of any Guarantor to Lender.

When making any demand hereunder or otherwise pursuing its rights and remedies hereunder against any Guarantor, Lender may, but shall be under no obligation to make a similar demand on or otherwise pursue such rights and remedies as it may have against the applicable Borrower(s), any other Guarantor or any other Person or against any collateral security or guarantee for the Non-U.S. Obligations or any right of offset with respect thereto.  Any failure by Lender to make any such demand, to pursue such other rights or remedies or to collect any payments from the applicable Borrower(s), any other Guarantor or any other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of any Borrower, any other Guarantor or any other Person or any such collateral security, guarantee or right of offset, shall not relieve any Guarantor of any obligation or liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of Lender against any Guarantor.  For the purposes hereof “demand” shall include the commencement and continuance of any legal proceedings.

Each Guarantor further unconditionally consents and agrees that, without notice to or further assent from any Guarantor:  (a) the principal amount of the Non-U.S. Obligations may be increased or decreased and additional indebtedness or obligations of any Borrower or any other Persons under the Loan Documents may be incurred, by one or more amendments, modifications, renewals or extensions of any Loan Document or otherwise; (b) the time, manner, place or terms of any payment under any Loan Document may be extended or changed, including by an increase or decrease in the interest rate on any

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Non-U.S. Obligation or any fee or other amount payable under such Loan Document, by an amendment, modification or renewal of any Loan Document or otherwise; (c) the time for any Borrower’s (or any other Loan Party’s) performance of or compliance with any term, covenant or agreement on its part to be performed or observed under any Loan Document may be extended, or such performance or compliance waived, or failure in or departure from such performance or compliance consented to, all in such manner and upon such terms as Lender may deem proper; (d) in addition to the Collateral, Lender may take and hold other security (legal or equitable) of any kind, at any time, as collateral for the Non-U.S. Obligations, and may, from time to time, in whole or in part, exchange, sell, surrender, release, subordinate, modify, waive, rescind, compromise or extend such security and may permit or consent to any such action or the result of any such action, and may apply such security and direct the order or manner of sale thereof; (e) Lender may discharge or release, in whole or in part, any other Guarantor or any other Loan Party or other Person liable for the payment and performance of all or any part of the Non-U.S. Obligations, and may permit or consent to any such action or any result of such action, and shall not be obligated to demand or enforce payment upon any of the Collateral, nor shall Lender be liable to any Guarantor for any failure to collect or enforce payment or performance of the Non-U.S. Obligations from any Person or to realize upon the Collateral; and (f) Lender may request and accept other guaranties of the Non-U.S. Obligations and any other indebtedness, obligations or liabilities of any Borrower or any other Loan Party to Lender and may, from time to time, in whole or in part, surrender, release, subordinate, modify, waive, rescind, compromise or extend any such guarantee and may permit or consent to any such action or the result of any such action; in each case of (a) through (f), as Lender may deem advisable, and without impairing, abridging, releasing or affecting this Guarantee.

Each Guarantor acknowledges that all or any portion of the Non-U.S. Obligations may now or hereafter be secured by a Lien or Liens upon real property owned or leased by any Borrower or any Guarantor and evidenced by certain documents including, without limitation, deeds of trust and assignments of rents. Lender may, pursuant to the terms of said real property security documents and applicable law, foreclose under all or any portion of one or more of said Liens by means of judicial or nonjudicial sale or sales.  Each Guarantor agrees that Lender may exercise whatever rights and remedies it may have with respect to said real property security, all without affecting the liability of any Guarantor hereunder, except to the extent Lender realizes payment by such action or proceeding.  No election to proceed in one form of action or against any party, or on any obligation shall constitute a waiver of Lender’s right to proceed in any other form of action or against any Guarantor or any other Person, or diminish the liability of any Guarantor, or affect the right of Lender to proceed against any Guarantor for any deficiency, except to the extent Lender realizes payment by such action, notwithstanding the effect of such action upon any Guarantor’s rights of subrogation, reimbursement or indemnity, if any, against any Borrower, any other Guarantor or any other Person.  Without limiting the generality of the foregoing, each Guarantor expressly waives all rights, benefits and defenses, if any, applicable or available to such Guarantor under either California Code of Civil Procedure Sections 580a or 726, which provide, among other things, that the amount of any deficiency judgment which may be recovered following either a judicial or nonjudicial foreclosure sale is limited to the difference between the amount of any Indebtedness owed and the greater of the fair value of the security or the amount for which the security was actually sold.  Without limiting the generality of the foregoing, each Guarantor further expressly waives all rights, benefits and defenses, if any, applicable or available to such Guarantor under either California Code of Civil Procedure Sections 580b, providing that no deficiency may be recovered on a real property purchase money obligation, or 580d, providing that no deficiency may be recovered on a note secured by a deed of trust on real property if the real property is sold under a power of sale contained in the deed of trust.

1.6Reinstatement.  The guarantee contained in this Section 1 shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Non-U.S. Obligations is rescinded or must otherwise be restored or returned by Lender upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of any Borrower or any Guarantor, or

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upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, any Borrower or any such Guarantor or any substantial part of its respective property, or otherwise, all as though such payments had not been made.

1.7Payments.  Each Guarantor hereby guarantees that payments hereunder will be paid to Lender without setoff or counterclaim in Dollars at the applicable Funding Office.

Section 2.Representations and Warranties.

Each Guarantor hereby represents and warrants that:

(a)such Guarantor (i) (A) in the case of DMIH and Domains, is a limited liability company duly organized and validly existing under the laws of Ireland and (B) in the case of United, is a an exempted company limited by shares duly incorporated, validly existing and in good standing under the laws of the Cayman Islands; (ii) is duly qualified to do business and, as applicable, is in good standing in every jurisdiction where the nature of its business requires it to be so qualified (except where the failure to so qualify would not have a material adverse effect on Guarantor’s condition, financial or otherwise, or on Guarantor’s ability to pay or perform the obligations hereunder); and (iii) has all requisite power and authority to execute and deliver this Guarantee and each Loan Document executed and delivered by Guarantor pursuant to the Credit Agreement or this Guarantee and to perform its obligations thereunder and hereunder.

(b)the execution, delivery and performance by such Guarantor of this Guarantee (i) are within such Guarantor’s powers and have been duly authorized by all necessary action; (ii) do not contravene such Guarantor’s constitutional documents or any law or any contractual restriction binding on or affecting such Guarantor or by which such Guarantor’s property may be affected; (iii) do not require any authorization or approval or other action by, or any notice to or filing with, any governmental authority or any other Person under any indenture, mortgage, deed of trust, lease, agreement or other instrument to which such Guarantor is a party or by which such Guarantor or any of its property is bound, except such as have been obtained or made; and (iv) do not result in the imposition or creation of any Lien upon any property of such Guarantor, other than the Lien created pursuant to the Credit Agreement or any other Loan Document. 

(c)this Guarantee is a valid and binding obligation of such Guarantor, enforceable against such Guarantor in accordance with its terms, except as the enforceability thereof may be subject to or limited by bankruptcy, insolvency, reorganization, arrangement, moratorium or other similar laws relating to or affecting the rights of creditors generally. 

(d)there is no action, suit or proceeding affecting such Guarantor pending or threatened before any court, arbitrator, or governmental authority, domestic or foreign, which may have a material adverse effect on the ability of such Guarantor to perform its obligations under this Guarantee. 

(e)such Guarantor’s obligations hereunder are not subject to any offset or defense against Lender, other Loan Party or any other guarantor of any kind.

(f)to ensure the legality, validity, enforceability or admissability into evidence of this Guarantee in each jurisdiction in which such Guarantor is organized and/or incorporated and any jurisdiction in which such Guarantor conducts business, it is not necessary that (i) this Guarantee be filed or recorded with any court or other authority in such jurisdiction, (ii) any other filings, notices, authorizations, approvals be obtained or other actions taken, or (iii) any stamp or similar tax be paid on or with respect to this Guarantee, or, if any of the foregoing actions are necessary, they have been or will be duly taken at the appropriate time.

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(g)neither such Guarantor nor its property has any immunity from jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) under applicable law.

(h)the incurrence of such Guarantor’s obligations under this Guarantee will not cause such Guarantor to (i) become insolvent; (ii) be left with unreasonably small capital for any business or transaction in which such Guarantor is presently engaged or plans to be engaged; or (iii) be unable to pay its debts as such debts mature (and without prejudice to the foregoing, in relation to United, an inability to pay its debts shall also be determined in accordance with applicable Cayman Islands law). 

(i)the guaranteeing of the Non-US Obligations by the Irish Guarantors is not prohibited by the provisions of Section 31 of the Companies Act, 1990.

(j)the guaranteeing of the Non-US Obligations by the Irish Guarantors is not prohibited by the provisions of Section 60 of the Companies Act 1963.

(k)the guaranteeing of the Non-US Obligations by the Guarantors does not cause any guaranteeing limit binding on the Guarantors to be exceeded.

(l)all representations and warranties contained in this Guarantee shall be true at the time of Guarantor’s execution of this Guarantee, and shall continue to be true so long as this Guarantee remains in effect.  Each Guarantor expressly agrees that any misrepresentation or breach of any warranty whatsoever contained in this Guarantee shall be deemed material.

Section 3.Notices.  All notices, requests and demands to or upon Lender or any Guarantor hereunder shall be effected in the manner provided for in Section 10.2 of the Credit Agreement.

Section 4.Entire Agreement.  This Guarantee and the other Loan Documents represent the agreement of the Guarantors and Lender with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by Lender relative to the subject matter hereof and thereof not expressly set forth or referred to herein or in the other Loan Documents.

Section 5.Severability.  If any provision of this Guarantee is held to be unenforceable under applicable law for any reason, it shall be adjusted, if possible, rather than voided in order to achieve the intent of Guarantor and Lender to the extent possible.  In any event, all other provisions of this Guarantee shall be deemed valid and enforceable to the full extent possible under applicable law. 

Section 6.Subordination of Indebtedness.  Any indebtedness or other obligation of any Non-U.S. Borrower now or hereafter held by or owing to any Guarantor is hereby subordinated in time and right of payment to all obligations of each Non-U.S. Borrower to Lender and such indebtedness of a Non-U.S. Borrower to any Guarantor is assigned to Lender as security for this Guarantee, and if Lender so requests shall be collected, enforced and received by such Guarantor in trust for Lender and, if an Event of Default has occurred and is continuing, to be paid over to Lender on account of the Non-U.S. Obligations, but without reducing or affecting in any manner the liability of such Guarantor under the other provisions of this Guarantee.  Any notes now or hereafter evidencing such indebtedness of a Non-U.S. Borrower to any Guarantor shall be marked with a legend that the same are subject to this Guarantee and shall be delivered to Lender.

Section 7.  Payment of Expenses.  Guarantor shall pay, promptly on demand, all reasonable and documented Expenses incurred by Lender in defending and/or enforcing this Guarantee.  For purposes hereof, “Expenses” shall mean costs and expenses (including reasonable fees and disbursements of any

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law firm or other external counsel and the allocated cost of internal legal services and all disbursements of internal counsel) for defending and/or enforcing this Guarantee (including those incurred in connection with appeals or proceedings by or against Guarantor under the United States Bankruptcy Code, or any other bankruptcy or insolvency law, including assignments for the benefit of creditors, compositions, extensions generally with its creditors, or proceedings seeking reorganization, arrangement, or other relief).

Section 8.GOVERNING LAW.  THIS GUARANTEE AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS GUARANTEE 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.  THIS SECTION 8 SHALL SURVIVE THE DISCHARGE OF OBLIGATIONS.

Section 9.Submission to Jurisdiction; Waivers.  Each Guarantor hereto hereby irrevocably and unconditionally:

(a) submits to the exclusive jurisdiction of the State and Federal courts in the Northern District of the State of California; provided that nothing in this Guarantee shall be deemed to operate to preclude Lender or from bringing suit or taking other legal action in any other jurisdiction to realize on the Collateral or any other security for the Non-U.S. Obligations, or to enforce a judgment or other court order in favor of Lender.  Each Guarantor expressly submits and consents in advance to such jurisdiction in any action or suit commenced in any such court, and each Guarantor hereby waives any objection that it may have based upon lack of personal jurisdiction, improper venue, or forum non conveniens and hereby consents to the granting of such legal or equitable relief as is deemed appropriate by such court.  Each Guarantor hereby waives personal service of the summons, complaints, and other process issued in such action or suit and agrees that service of such summons, complaints, and other process may be made by registered or certified mail addressed to the applicable Guarantor at the address set forth in Section 10.2 of the Credit Agreement and that service so made shall be deemed completed upon the earlier to occur of the applicable Guarantor’s actual receipt thereof or three (3) days after deposit in the U.S. mails, proper postage prepaid; provided,  however, in the case of each of DMIH and Domains, each hereby irrevocably appoints Borrower Parent as its agent to accept service of all proceeds in the State of California on its behalf in relation to this Agreement and any such notices may be sent to Borrower Parent to the address set forth in Section 10.2 of the Credit Agreement.

(b) WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ITS RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS GUARANTEE, THE OTHER LOAN DOCUMENTS OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS.  THIS WAIVER IS A MATERIAL INDUCEMENT FOR THE PARTIES TO ENTER INTO THIS GUARANTEE.  EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL; AND

(c) AGREES, WITHOUT INTENDING IN ANY WAY TO LIMIT ITS AGREEMENT TO WAIVE ITS  RIGHT TO A TRIAL BY JURY, that if the above waiver of the right to a trial by jury is not enforceable, any and all disputes or controversies of any nature arising under the Loan Documents at any time shall be decided by a reference to a private judge, mutually selected by the applicable Guarantor and Lender (or, if they cannot agree, by the Presiding Judge in the Northern District of the State of California) appointed in accordance with California Code of Civil Procedure Section 638 (or pursuant to comparable provisions of federal law if the dispute falls within the exclusive jurisdiction of the federal courts), sitting without a jury, in the Northern District of the State of California; and each Guarantor hereby submits to the jurisdiction of such court.  The reference proceedings shall be conducted pursuant to and in accordance with the provisions of California Code of Civil Procedure §§

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638 through 645.1, inclusive.  The private judge shall have the power, among others, to grant provisional relief, including without limitation, entering temporary restraining orders, issuing preliminary and permanent injunctions and appointing receivers.  All such proceedings shall be closed to the public and confidential and all records relating thereto shall be permanently sealed.  If during the course of any dispute, a party desires to seek provisional relief, but a judge has not been appointed at that point pursuant to the judicial reference procedures, then such party may apply to the Northern District of the State of California for such relief.  The proceeding before the private judge shall be conducted in the same manner as it would be before a court under the rules of evidence applicable to judicial proceedings.  The applicable Guarantor shall be entitled to discovery which shall be conducted in the same manner as it would be before a court under the rules of discovery applicable to judicial proceedings.  The private judge shall oversee discovery and may enforce all discovery rules and orders applicable to judicial proceedings in the same manner as a trial court judge.  Each Guarantor agrees that the selected or appointed private judge shall have the power to decide all issues in the action or proceeding, whether of fact of law, and shall report a statement of decision thereon pursuant to the California Code of Civil Procedure § 644(a).  Nothing in this paragraph shall limit the right of Lender at any time to exercise self-help remedies, foreclose against collateral, or obtain provisional remedies.  The private judge shall also determine all issues relating to the applicability, interpretation and enforceability of this paragraph.

Section 10.  Additional Guarantors.  Each Subsidiary of a Guarantor that is required to become a party to this Guarantee pursuant to Section 6.9 of the Credit Agreement shall become a Guarantor for all purposes of this Guarantee upon execution and delivery by such Subsidiary of an Assumption Agreement in the form of Annex1 hereto.

[Signature Pages Follow]

9

IN WITNESS WHEREOF, the parties hereto have caused this Guarantee to be executed as of the date first written above.

GUARANTOR:

UNITED TLD HOLDCO LTD.


By:/s/ Taryn Naidu
Name:  Taryn Naidu
Title:    Director

[Signature Page to Unconditional Guarantee]

IN WITNESS WHEREOF, the parties hereto have caused this Guarantee to be executed as of the date first written above.

GUARANTOR: DMIH LIMITED GIVEN under the common seal of DMIH Limited and delivered as a deed	/s/ Richard Danis
	Signature
	Richard Danis
	Print Name
	/s/ Statton Hammock
	Signature
	Statton Hammock
	Print Name

[Signature Page to Unconditional Guarantee]

GUARANTOR: RIGHTSIDE DOMAINS EUROPE LIMITED GIVEN under the common seal of Rightside Domains Europe Limited and delivered as a deed	/s/ David Ryan
	Signature
	David Ryan
	Print Name
	/s/ John O'Donoghue
	Signature
	John O'Donoghue
	Print Name

IN WITNESS WHEREOF, the parties hereto have caused this Guarantee to be executed as of the date first written above.

[Signature Page to Unconditional Guarantee]

IN WITNESS WHEREOF, the parties hereto have caused this Guarantee to be executed as of the date first written above.

LENDER:

SILICON VALLEY BANK

By: /s/ Ted Bell

Name: Ted Bell

Title: Vice President

[Signature Page to Unconditional Guarantee]

ANNEX 1 To

UNCONDITIONAL GUARANTEE

(Non-U.S. Entities)

FORM OF
ASSUMPTION AGREEMENT

This ASSUMPTION AGREEMENT (the “Assumption Agreement”), dated as of [_______], 20__, is executed and delivered by [______________________________] (the “Additional Guarantor”), in favor of SILICON VALLEY BANK, as Lender (together with its permitted successors, in such capacity, the “Lender”) pursuant to that certain Credit Agreement, dated as of August 1, 2014 (as amended, amended and restated, supplemented, restructured or otherwise modified, renewed or replaced from time to time, the “Credit Agreement”), 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 Lender.  All capitalized terms not defined herein shall have the respective meanings ascribed to such terms in such Credit Agreement.

WITNESSETH:

WHEREAS, in connection with the Credit Agreement, the Non-U.S. Borrowers and certain of their Affiliates (other than the Additional Guarantor) have entered into that certain Unconditional Guarantee (Non-U.S. Entities), dated as of August 1, 2014, in favor of Lender (the “Guarantee”);

WHEREAS, [____________] is required, pursuant to Section 6.9 of the Credit Agreement to cause the Additional Guarantor to become a party to the Guarantee in order to provide its guarantee of the Non-U.S. Obligations as therein contemplated; and

WHEREAS, the Additional Guarantor has agreed to execute and deliver this Assumption Agreement in order to become a party to the Guarantee;

NOW, THEREFORE, IT IS AGREED:

1.Guarantee.  By executing and delivering this Assumption Agreement, the Additional Guarantor, as provided in Section 10 of the Guarantee, (a) hereby becomes a party to the Guarantee as a “Guarantor” thereunder with the same force and effect as if originally named therein as a Guarantor and, without limiting the generality of the foregoing, hereby expressly assumes all obligations and liabilities of a Guarantor thereunder.  The Additional Guarantor hereby represents and warrants that each of the representations and warranties contained in Section 2 of the Guarantee (x) that is qualified by materiality is true and correct, and (y) that is not qualified by materiality, is true and correct in all material respects, in each case, on and as the date hereof (after giving effect to this Assumption Agreement) as if made on and as of such date (except to the extent any such representation and warranty expressly relates to an earlier date, in which case such representation and warranty was true and correct in all material respects as of such earlier date).

Annex 1

2.Governing Law.  THIS ASSUMPTION 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.

3.Loan Document.  This Assumption Agreement shall constitute a Loan Document under the Credit Agreement.

Annex 1

IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to be duly executed and delivered as of the date first above written.

[ADDITIONAL GUARANTOR]



By:
Name: 
Title:   

Annex 1

EX-10.9

Exhibit 10.9

DMIH LIMITED

(as Grantor)

SILICON VALLEY BANK

(as Security Trustee for the Secured Parties)

SECURITY DEED

(DEBENTURE)

William Fry

Solicitors

Fitzwilton House

Wilton Place

Dublin 2

www.williamfry.ie

© William Fry 2014

021830.0010.EH/CAH

CONTENTS

SECTION 1.0 – INTERPRETATION		5
1.1	CREDIT AGREEMENT	5
1.2	ADDITIONAL DEFINITIONS	5
1.3	INTERPRETATION	9
1.4	CERTIFICATES	11
SECTION 2.0 - NATURE OF SECURITY AND COVENANT TO PAY		11
2.1	NATURE OF SECURITY	11
2.2	COVENANT TO PAY	11
SECTION 3.0 - FIXED CHARGES, ASSIGNMENTS AND FLOATING CHARGE		12
3.1	FIXED CHARGES	12
3.2	ASSIGNMENTS	13
3.3	NON-ASSIGNABLE	14
3.4	FLOATING CHARGE	14
3.5	CRYSTALLISATION OF FLOATING CHARGE	15
3.6	EXCLUDED ASSETS	15
3.7	NEGATIVE PLEDGE	15
3.8	AFTER ACQUIRED PROPERTY	16
3.9	VALIDITY OF CHARGES	16
3.10	CONTINUING OBLIGATIONS	16
3.11	PROVISO FOR REDEMPTION/RELEASE/REASSIGNMENT	16
SECTION 4.0 - ENFORCEABILITY OF SECURITY		17
4.1	EVENTS OF DEFAULT	17
SECTION 5.0 - RIGHTS AND POWERS OF THE LENDER		17
5.1	ENTRY INTO POSSESSION	17
5.2	FURTHER RIGHT OF POSSESSION	18
5.3	POWER OF SALE	18
5.4	POWER OF LEASING AND ACCEPTING SURRENDERS	18
5.5	POWER TO CONDUCT BUSINESS	18
5.6	DUE DATE FOR STATUTORY PURPOSES	19
5.7	NON-APPLICABILITY OF SECTIONS 92 AND 94 OF THE ACT	19
5.8	POSITION OF THIRD PARTIES	19
5.9	RECEIPT OF LENDER GOOD DISCHARGE	19
5.10	APPLICATION OF MONIES	19
SECTION 6.0 - APPOINTMENT OF RECEIVER		20
6.1	POWER OF APPOINTMENT	20
6.2	POWERS OF RECEIVER TO BORROW	22
6.3	APPLICATION OF MONIES BY RECEIVER	22
6.4	LIABILITY OF THE LENDER AND RECEIVER	22
6.5	RECEIVER AGENT OF THE GRANTOR	22
6.6	SECTION 108 OF THE ACT	23
SECTION 7.0 - CONTINUING SECURITY, ETC.		23
7.1	CONTINUING SECURITY	23
7.2	OPENING OF NEW ACCOUNTS	23
7.3	REINSTATEMENT	23
7.4	WAIVER OF DEFENCES	24
7.5	ADDITIONAL SECURITY	25
SECTION 8.0 – SHARES		25
8.1	COVENANTS RELATING TO SHARES	25
8.2	DEPOSIT OF TITLE DOCUMENTS	25
8.3	CHANGES TO RIGHTS	25

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8.4	CALLS	25
8.5	OTHER OBLIGATIONS IN RESPECT OF SHARES	25
8.6	VOTING AND DIVIDEND RIGHTS	24
SECTION 9.0 - SECURITY ACCOUNTS		26
9.1	COVENANTS RELATING TO SECURITY ACCOUNTS	26
9.2	SECURITY ACCOUNTS	26
9.3	WITHDRAWALS	26
9.4	NOTICES OF CHARGE	26
SECTION 10.0 - BOOK DEBT RECEIVABLES ACCOUNT		27
10.1	COVENANTS RELATING TO BOOK DEBT RECEIVABLES ACCOUNT	27
10.2	BOOK DEBT RECEIVABLES ACCOUNT	27
10.3	RECEIPTS	27
10.4	WITHDRAWALS	27
10.5	NOTICES OF CHARGE	27
10.6	LEGAL ASSIGNMENT	28
SECTION 11.0 - RELEVANT CONTRACTS/INSURANCES		28
11.1	COVENANTS RELATING TO RELEVANT CONTRACTS AND INSURANCES	28
11.2	PRESERVATION	28
11.3	FURTHER UNDERTAKINGS	28
11.4	NOTICES OF ASSIGNMENT	28
SECTION 12.0 - INTELLECTUAL PROPERTY		29
12.1	COVENANTS RELATING TO INTELLECTUAL PROPERTY	29
12.2	INTELLECTUAL PROPERTY	29
SECTION 13.0 - GENERAL PROVISIONS		29
13.1	ASSIGNMENT	29
13.2	CONSOLIDATION	29
13.3	PROTECTION OF PURCHASER	29
13.4	NO WAIVERS, REMEDIES CUMULATIVE	30
13.5	SET-OFF	30
13.6	PREFERENTIAL CLAIMS	30
13.7	POWER OF ATTORNEY	30
13.8	WAIVER	30
13.9	ENFORCEMENT OF OTHER RIGHTS	31
13.10	APPROPRIATIONS	31
13.11	AUTHORITY OF THE LENDER	31
13.12	DUTY; OBLIGATIONS AND LIABILITIES	31
13.13	OBLIGATIONS AND LIABILITIES WITH RESPECT TO SECURITY ASSETS	32
13.14	ADDITIONAL POWERS	32
13.15	NOTICES	34
13.16	NON-COMPETITION	35
13.17	COUNTERPARTS	35
13.18	GOVERNING LAW AND JURISDICTION	35

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SCHEDULE 1	34
SCHEDULED PROPERTY	34
SCHEDULE 2	35
PART 1	35
THE FIXTURES AND FITTINGS	35
PART 2	35
THE RELEVANT CONTRACTS	35
PART 3	35
THE LICENCES	35
PART 4	35
THE SHARES	35
PART 5	35
THE INTELLECTUAL PROPERTY	35
PART 6	35
THE SECURITY ACCOUNTS	35
PART 7	35
THE BOOK DEBT RECEIVABLE ACCOUNT	35
[SCHEDULE 3	36
PART 1	36
FORM OF LETTERS FOR SECURITY ACCOUNT	36
PART A	36
NOTICE TO ACCOUNT BANK	36
PART B	38
ACKNOWLEDGEMENT OF SECURITY ACCOUNT BANK	38
PART 2	39
FORMS OF LETTER FOR CONTRACTS	39
PART A	39
NOTICE TO COUNTERPARTY	39
PART B	40
ACKNOWLEDGEMENT OF COUNTERPARTY	40
PART 3	41
PART A	41
NOTICE OF ASSIGNMENT OF INSURANCES	41
PART B	43
LETTER OF UNDERTAKING	43
PART 4	45
FORM OF NOTICE TO AND ACKNOWLEDGEMENT FROM BANK OPERATING BOOK DEBT RECEIVABLES ACCOUNT	45

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THIS DEED is made on August 1, 2014

BETWEEN:

(1)DMIH LIMITED, a company incorporated in Ireland with registered number 494291 and having its registered office at Arthur Cox Building, Earlsfort Terrace, Dublin 2 (the “Grantor”); and

(2)SILICON VALLEY BANK, a Californian banking corporation having its principal place of business at 15260 Ventura Blvd, Suite 1800, Sherman Oaks, CA 91403, USA (as security trustee on behalf of each of the Secured Parties) (the “Lender”).

RECITALS

A.The Grantor has entered into the Credit Agreement with, amongst others, the Lender.

B.It is a condition of the Credit Agreement that the Grantor enter into this Deed in favour of the Lender as security trustee on behalf of the Secured Parties.

C.The Grantor and the Lender intend this document to have effect as a Deed.

D.The directors of the Grantor are satisfied that it is in the best interests of and for the corporate benefit of the Grantor to enter into this Deed.

THIS DEED WITNESSES as follows:

SECTION 1.0 - INTERPRETATION

1.1Credit Agreement

Capitalised terms used in this Deed shall have the same meaning in this Deed as in the Credit Agreement unless otherwise provided in this Deed.

1.2Additional Definitions

In this Deed (including the Recitals) the following expressions shall, unless the context otherwise requires, have the following meanings, namely:

1.2.1"Act", the Land and Conveyancing Law Reform Act 2009;

1.2.2"Account Bank", such bank as shall be approved by the Lender;

1.2.3"Assigned Property", all assets and property assigned by this Deed and such expression shall include any part or parts of the Assigned Property;

1.2.4“Business”, the business associated with managing, marketing and operating registries with respect to any gTLDs delegated by ICANN (including pursuant to the terms of the Business and Asset Transfer Agreement), which are operated in accordance with any registry agreement;

1.2.5“Business Intellectual Property Rights”, Intellectual Property Rights owned, used or held exclusively or predominantly in, or in connection with, the Business;

1.2.6"Book Debt Receivables", all present and future book debts and other debts, rentals, sales proceeds, royalties, fees, revenues, value added tax and monetary claims and all other amounts at any time recoverable or receivable by, or due or owing to, the Grantor

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(whether actual or contingent and whether arising under contract or in any other manner whatsoever) together with:

(a)the benefit of all rights, guarantees, Lien and remedies relating to any of the foregoing (including without limitation, claims for damages and other remedies for non-payment of the same, all entitlements to interest, negotiable and non-negotiable instruments, indemnities, reservations of property rights, rights of tracing and unpaid vendor's liens and similar associated rights);

(b)all things in action which may give rise to a debt, revenue or claim and all other rights and remedies of whatever nature in respect of the same; and

(c)all proceeds of any of the foregoing;

1.2.7"Book Debt Receivables Account", the bank account(s) in the name of the Grantor as more particularly listed in Part 7 of Schedule 2 (Book Debts) and with the banks and bearing the account numbers set out therein, or any account or accounts replacing the same from time to time (in whatever currency) and the debt represented thereby;

1.2.8“Business and Assets Transfer Agreement”, a business and asset transfer agreement dated 17 November 2012 between United TLD HoldCo Limited and the Grantor;

1.2.9"Charged Property", all property and assets charged by this Deed, the Floating Charge Property and the Scheduled Property and such expression shall include any part or parts of the Charged Property;

1.2.10"Companies Acts", the Companies Acts 1963 to 2013 and Parts 2 and 3 of the Investment Funds, Companies and Miscellaneous Provisions Act 2006, the Companies (Amendment) Act 2009 and the Companies (Miscellaneous Provisions) Act 2009, including all Acts of the Oireachtas and statutory instruments which are to be read as one with, or construed or read together as one with, such Acts and Parts 2 and 3 of the Investment Funds, Companies and Miscellaneous Provisions Act 2006, and every statutory modification or re-enactment thereof for the time being in force (or, where the context so admits or requires, any one or more of such Acts;

1.2.11"Credit Agreement", the credit agreement dated on or about the date of this Deed between (1) Rightside Group, Limited, Rightside Operating Co and eNom, Inc. (as U.S. Borrowers), (2) DMIH Limited, United TLD HoldCo Ltd and Rightside Domains Europe Limited (as Non-U.S. Borrowers) and (3) the Lender;

1.2.12“DomainsShare Charge”, a security over shares deed dated on or about the date hereof between (1) DMIH Limited and (2) the Lender (as security trustee on behalf of the Secured Parties) in respect of the shares in Rightside Domains Europe Limited;

1.2.13"Fixtures and Fittings", all present and future, fixed and moveable fixtures and fittings (including trade fixtures and fittings) and fixed plant, machinery, equipment, implements, motor vehicles and utensils from time to time on any freehold or leasehold property charged by or pursuant to this Deed or otherwise thereon or owned by the Grantor from time to time, including, but not limited to the fixtures, fittings, plant, machinery, equipment, implements, motor vehicles and utensils set out in Part 1 of Schedule 2  (Fixtures and Fittings);

1.2.14"Floating Charge Property", the property of the Grantor charged by way of floating charge pursuant to Clause 3.4 of this Deed;

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1.2.15"Group", Rightside Group, Limited, its holding company and its subsidiaries (if any) and any subsidiary or subsidiaries of its holding company (if any) from time to time;

1.2.16“ICANN”, means the Internet Corporation for Assigned Names and Numbers;

1.2.17"Insurances", contracts and policies of insurance (including, for the avoidance of doubt, all cover notes), including but not limited to the contracts and policies, existing as at the date hereof and listed in Part 8 of Schedule 2  (Insurances) and such other contracts and policies which are taken out after the date of this Deed by or on behalf of the Grantor or (to the extent of such interest) in which the Grantor has an interest (and including, in each case, all key man policies) and all claims, proceeds and returns of premiums of each such contract and policy;

1.2.18"Intellectual Property", all copyrights, patents, trade marks, utility models, publication rights, registered designs, (including applications and rights to apply therefor and all renewals, modifications, extensions and derivations thereof), inventions, rights, service marks, rights in trade dress or get-up, trade and business names, domain names, domain name portfolios and top-level domain names, including domain name suffixes, also known as generic Top Level Domains, approved by ICANN, all Business Intellectual Property Rights, all rights under the Business and Asset Transfer Agreement (including applications and rights to apply therefor and all renewals, modifications, extensions and derivations thereof), confidential information and know-how, rights in computer software, database rights, topography rights, trade secrets, goodwill, Software and all other intellectual property rights of a similar nature in any part of the world and all fees, royalties and other rights and benefits of every kind deriving from any of the above and which now or at any time hereafter belong to the Grantor including, but not limited to, those listed in Part 5 of Schedule 2  (Intellectual Property);

1.2.19"Intercompany Loans", all Indebtedness in respect of which one member of the Group is the creditor of another member of the Group including, without prejudice to the generality of the foregoing, the Loan Agreement;

1.2.20“Intercreditor Agreement”, a subordination and intercreditor agreement dated on or about the date hereof between (1) Obsidian Agency Services, Inc (as administrative agent for the Fund Lenders) (as defined therein), (2) Silicon Valley Bank and (3) Rightside Group Limited.

1.2.21"Licences", all licences now or from time to time hereafter held by or on behalf of the Grantor and all licences pertaining to the Scheduled Property, including but not limited to the licences specified in Part 3 of Schedule 2  (Licences), as the same may be amended, varied, extended, renewed or supplemented from time to time, including the benefit of any authorisation (statutory or otherwise) held in connection with the use of any of the Security Assets and the right to recover and receive compensation which may be payable to it in respect of any such authorisation and/or licence;

1.2.22“Loan Agreement”, the InterCompany Loan Agreement dated 14 March 2012 (as amended) between the Grantor (as lender), and United TLD HoldCo Limited (as borrower), pursuant to which the Grantor agreed to lend up to USD$40,000,000 to United TLD HoldCo Limited under the terms and conditions set forth therein;

1.2.23"Receiver", any one or more receivers and/or manager appointed by the Lender in respect of the Grantor over all or any part of the Security Assets;

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1.2.24"Related Rights", in relation to any Shares:

(a)all dividends, distributions, interest and other income paid or payable after the date hereof on all or any of the Shares;

(b)all stocks, shares, securities (and the dividends and interest thereon), rights, money or property accruing or offered at any time by way of redemption, bonus, preference, option rights or otherwise to or in respect of any of the Shares or in substitution or exchange for any of the Shares;

(c)all rights relating to any of the Shares which are deposited with or registered in the name of any depositary, custodian, nominee, clearing house or system, investment manager, chargee or other similar person or their nominee (including rights against any such person); and

(d)all other rights attaching or relating to any of the Shares and all cash or other securities or investments in the future deriving from any of the Shares or such rights;

1.2.25"Relevant Contracts", each contract, agreement and instrument assigned or purported to be assigned pursuant to Clause 3.2.3(a) (as the same may be amended, restated, substituted, supplemented or otherwise modified or replaced), including, but not limited to those or contracts, agreements and instruments more particular details of which are set out in Part 2 of Schedule 2  (Relevant Contracts);

1.2.26"Rental Income", all rents, fees and other amounts payable or paid to or for the benefit of the Grantor pursuant to, or in contemplation of, any occupational lease;

1.2.27"Scheduled Property", all premises intended to be mortgaged, charged or assigned by this Deed listed at Schedule 1 hereto and such expressions shall include any part or parts of the Scheduled Property and any rights and appurtenances appertaining thereto;

1.2.28“Second Domains Share Charge” a security over shares deed to be entered into between (1) DMIH Limited and (2) Obsidian Agency Service, Inc. in respect of the shares in Rightside Domains Europe Limited;

1.2.29"Secured Obligations", all Obligations owing or incurred by the Non-U.S. Borrowers to the Secured Parties under the Loan Documents whether present or future, actual or contingent (and whether incurred solely or jointly, or jointly and severally, and whether as principal or surety or in some other capacity);

1.2.30"Security Accounts", the bank accounts in the name of the Grantor as more particularly listed in Part 6 of Schedule 2  (Security Accounts) and with the banks and bearing the account numbers set out therein, and any account or accounts replacing the same from time to time and the debt represented thereby;

1.2.31"Security Assets", all assets, undertakings, rights and property of the Grantor (both present and future), the subject of any security created pursuant to this Deed and includes for the avoidance of doubt, the Grantor's rights and interest in the Assigned Property, the Floating Charge Property and the Charged Property;

1.2.32"Security Period", the period beginning on the date of this Deed and ending on the date on which the Lender irrevocably confirms in writing that all the Secured Obligations have been unconditionally and irrevocably paid and discharged in full;

8

1.2.33"Shares", all shares specified in Part 4 of Schedule 2  (Shares) under the heading "Shares" and all other shares, stocks, debentures, bonds, warrants, coupons or other securities and investments and all other interests (including, but not limited to, loan capital), in each case together with all Related Rights, now or in the future owned from time to time by, or on behalf of the Grantor except for those shares which are charged pursuant to the terms of the Domains Share Charge and the Second Domains Share Charge, in whatever form in every company, corporation, firm, entity or consortium wheresoever situate;

1.2.34"Software":

(a)all computer programs, including source code and object code versions;

(b)all data, databases and compilations of data, whether machine readable or otherwise; and

(c)all documentation, training materials and configurations related to any of the foregoing.

1.3Interpretation

1.3.1Clause 1.3 of the Credit Agreement shall apply to this Deed unless otherwise provided in this Deed.

1.3.2In addition to Clause 1.3.1:

(a)an “amendment”, includes a supplement, amendment, novation, restatement or re-enactment and “amended” is to be construed accordingly;

(b)“assets”, includes present and future properties, revenues and rights of every description;

(c)an “authorisation”, includes an authorisation, consent, approval, resolution, licence, exemption, filing, registration or notarisation;

(d)“company”, includes a corporation or a body corporate;

(e)“dispose”, means to sell, transfer, grant, lease, lend, grant options over or otherwise dispose of and “disposal” is to be construed accordingly;

(f)"examiner", means an examiner appointed under the provisions of the Companies Acts 1963-2013;

(g)“Grantor”, means the Grantor, its successors and permitted assigns;

(h)a provision or matter “including” or which “includes” shall be construed without limitation to any events, circumstances, conditions, acts or matters listed or specified after those words;

(i)the “Lender” and “Secured Party” shall mean the Lender and each Secured Party respectively, its and their successors, assigns, participants and novatees and this Deed shall be enforceable notwithstanding any change in the constitution of the Lender or any Secured Party or the absorption of the Lender or any Secured Party in or amalgamation with any other person or the

9

acquisition of all or part of the undertaking of the Lender or a Secured Party by any other person;

(j)a “Loan Document” or any other document, agreement or instrument is a reference to that Loan Document or other document, agreement or instrument as amended, restated, assigned, novated, varied, supplemented or replaced from time to time;

(k)a “person”, includes any individual, company, government, state, agency, organisation, association, body, department, trust, partnership (whether or not having separate legal personality) or any other entity of any description;

(l)a “regulation”, includes any regulation, rule, official directive, request or guideline (whether or not having the force of law but, if not having the force of law, being of a type with which any person to which it applies is accustomed to comply) of any governmental, inter-governmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation;

(m)“subsidiary” and “holding company”, means a subsidiary or a holding company as defined by Section 155 Companies Act, 1963 and “subsidiaries” and “holding companies” and cognate words shall be construed accordingly;

(n)the “winding up”, “dissolution” or “examinership” of a company shall be construed so as to include any equivalent or analogous proceedings under the law of the jurisdiction in which a company carries on business including, but not limited to, the seeking of liquidation, winding up, reorganisation, dissolution, examinership, administration, arrangements, adjustment, protection or relief of debtors.

(o)a provision of law is a reference to that provision as extended, applied, amended or re-enacted and includes any subordinate legislation;

(p)a Clause, a Subclause or a Schedule is a reference to a clause or subclause of, or a schedule to, this Deed; and

(q)words denoting the neuter shall include the masculine and feminine and vice versa.

1.3.3Unless the contrary intention appears, the index to and the headings in this Deed do not affect its interpretation.

1.3.4If the Lender considers that an amount paid by any Non-U.S. Borrower to the Lender under any Loan Agreement is capable of being avoided or otherwise set aside on the liquidation or examinership of the Grantor or otherwise, then such amount shall not be considered to have been irrevocably paid for the purposes hereof.

1.3.5Notwithstanding anything to the contrary in this Deed, the obligations, liabilities and undertakings under this Deed shall be deemed not to be undertaken or incurred to the extent that the same would:

(a)constitute unlawful financial assistance prohibited by Section 60 of the Companies Act 1963 (or any analogous provision of any other applicable law); or

10

(b)constitute a breach of Section 31 of the Companies Act 1990 (or any analogous provision of any other applicable law).

1.4Certificates

Any certificate or determination of the Lender as to any amounts owing under this Deed will be conclusive and binding on the Grantor, save in the case of manifest error.

SECTION 2.0 - NATURE OF SECURITY AND COVENANT TO PAY

2.1Nature of Security

2.1.1All the security created under this Deed:

(a)is created in favour of the Lender as security trustee on behalf of the Secured Parties;

(b)is created over all of the present and future assets of the Grantor save for the Excluded Assets; and

(c)is security for the payment of all the Secured Obligations.

2.1.2If the Grantor is prohibited from creating security over any of its assets (including for the avoidance of doubt, its rights under any document) without obtaining the consent of a third party:

(a)the Grantor must notify the Lender promptly upon it becoming aware of the same; and

(b)the fixed charge or assignment created by this Deed shall not take effect as regards the relevant asset until such consent is obtained, at which time that asset shall immediately become subject to such charge or assignment;

(c)if applicable, the security created by this Deed will secure all amounts which the Grantor may receive, or has received, under that document but exclude the document itself including, but not limited to, all damages, compensation, remuneration, profit, proceeds, rent or income derived therefrom; and

(d)unless the Lender otherwise requires, the Grantor must use its best endeavours to promptly obtain the consent of such third party to that asset being secured under this Deed.

2.2Covenant to Pay

The Grantor hereby unconditionally and irrevocably covenants with the Lender as security trustee for the Secured Parties that it will pay, discharge or perform the Secured Obligations on the due date therefor.  Any amount not paid hereunder when due shall bear interest (after as well as before judgment and payable on demand) at the Default Rate from time to time (compounding on a monthly basis) from the due date until the date such amount is unconditionally and irrevocably paid and discharged in full.

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SECTION 3.0 - FIXED CHARGES, ASSIGNMENTS AND FLOATING CHARGE

3.1Fixed Charges

Subject to Clauses 3.6 and 3.11, the Grantor, as legal and beneficial owner, as continuing security for the payment, performance and discharge of all of the Secured Obligations hereby charges in favour of the Lender as security trustee on behalf of the Secured Parties, by way of first fixed charge, all its present and future rights, title, interest and benefit in and to:

3.1.1all its estate, right, title and interest in any land, premises or buildings (including the Scheduled Property) now belonging to the Grantor (whether or not the legal title is vested in the Grantor or registered in the name of the Grantor) and all future estate, right, title and interest of the Grantor in such land, premises or buildings and in any other immovable property (in each case whether freehold or leasehold and whether or not registered) vested in or held by or on behalf of the Grantor from time to time and the proceeds of sale thereof together in all cases (to the extent the same are not already subject to an effective fixed security hereunder) all fixtures and fittings (including trade fixtures) and all fixed plant and machinery from time to time in or on such land, premises or buildings with the payment, performance and discharge of the Secured Obligations, and hereby assents to the registration of such charges as a burden on such freehold, leasehold and other immovable property (as applicable);

3.1.2the Licences;

3.1.3the Shares and all Related Rights;

3.1.4the Fixtures and Fittings;

3.1.5all of its rights in respect of any amount standing to the credit of any account (including without prejudice to the generality of the foregoing, the Security Accounts and the Book Debt Receivables Account) it has with any person and the debt represented by it;

3.1.6all Book Debt Receivables, all other moneys due and owing to the Grantor and the benefit of all rights, securities or guarantees of any nature enjoyed or held by it in relation to each of the same;

3.1.7all its Intellectual Property, provided that to the extent that a fixed charge is not created over any of the Intellectual Property by this Clause 3.1.7, the charge thereover purported to be effected by this clause shall operate as an absolute assignment of any and all damages, compensation, remuneration, profit, rent, royalty or income which the Grantor may now or at any time hereafter derive therefrom or be awarded or entitled to in any respect thereof;

3.1.8all of its beneficial interest, claim or entitlement in and to any pension fund and in and to any asset of any pension fund;

3.1.9all of its goodwill;

3.1.10all of the uncalled capital of the Grantor and all rights and claims to which the Grantor is now or may hereafter become entitled as a result of any calls made in relation thereto;

3.1.11all rights and claims to which the Grantor is now or may hereafter become entitled in relation to or in connection with the Security Assets, including those against any manufacturer, supplier, installer, builder, contractor, professional advisor, lessee or licensee and any guarantor or surety for the obligations of any such person and, to the

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extent that any of the Security Assets are now or at any time hereafter hired, leased or rented to any other person, the rights under the hiring, leasing or rental contract or agreement and any guarantee, indemnity or security for the performance of the obligation of such person and any other rights and benefits relating thereto; and

3.1.12all rights and benefits in respect of the Insurances and all claims and returns of premiums in respect thereof to the extent that they are not effectively assigned by Clause 3.3 below.

3.2Assignments

Subject to Clause 3.6 and Clause 3.11, the Grantor, as legal and beneficial owner as continuing security for the payment, performance and discharge of all of the Secured Obligations hereby assigns and agrees to assign absolutely to the Lender as security trustee on behalf of the Secured Parties by way of first fixed security, all its present and future right, title, interest and benefit in and to:

3.2.1(insofar as the same are capable of assignment) the benefit of:

(a)all rights of the Grantor to be paid or receive compensation under any statute by reason of any compulsory acquisition, requisition or other exercise of compulsory power in relation to the Scheduled Property or any part thereof or any refusal, withdrawal or modification of planning permission or approval relative thereto or any control or restriction imposed on or affecting the use of all or any part of the Scheduled Property and so that the production of this Deed to the local authority, government body or agency or other person liable to pay such compensation shall be a sufficient authority to such local authority, government body or agency or other person to pay the same to the Lender and the Lender shall have power to give good receipt therefor; and

(b)any covenant or undertaking for the making of roads and footpaths, laying down of sewers or the provision of all other usual services including street lighting and the payment of road charges or other private street improvement of the Scheduled Property and any indemnity against payment of such charges or expenses;

and hereby irrevocably appoints the Lender to be its attorney and in its name and on its behalf to:

(i)claim, assess, agree, recover any such compensation; and

(ii)exercise any such right or to give any such notice or counter-notice concerning the Scheduled Property as by or under any statute the Grantor may be entitled to exercise or give against or to any local or other competent or appropriate authority;

3.2.2(insofar as the same are capable of assignment) the Insurances and all proceeds in respect of the Insurances and all rights and benefits in respect of the Insurances (including all claims relating to the Insurances and all returns of premiums in respect thereof);

3.2.3(insofar as the same are capable of assignment) all of its rights and benefits (but not its obligations) in respect of:

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(a)the Relevant Contracts (including all monies payable to the Grantor and all claims, awards and judgments in favour of or received or receivable by the Grantor under or in connection with any Relevant Contracts);

(b)all occupational leases;

(c)all Rental Income;

(d)all guarantees of Rental Income contained in or relating to any occupational lease;

(e)all letters of credit issued in its favour; and

(f)all bills of exchange and other negotiable instruments held by it; and

3.2.4all of its rights in respect of any Intercompany Loans to which it is a party.

3.3Non-assignable

To the extent that any such right, title and interest described in Clause 3.2.2 or 3.2.3 is not assignable or capable of assignment:

3.3.1the assignment purported to be effected by Clause 3.2 shall operate as:

(a)in the case of the Insurances, an assignment of any and all present and future proceeds of the Insurances; and

(b)in the case of the Relevant Contracts, occupational leases, guarantees of Rental Income and letters of credit (as the case may be) an assignment of all present and future damages, compensation, remuneration, profit, rent, income or monies which the Grantor may derive therefrom or be awarded or entitled to in respect thereof; and

in each case as continuing security for the payment and performance of the Secured Obligations; and

3.3.2the Grantor shall hold the benefit of any such right, title and interest in trust for the Lender.

3.4Floating Charge

The Grantor, as beneficial owner, as continuing security for the payment, performance and discharge of the Secured Obligations, hereby charges in favour of the Lender on behalf of the Secured Parties by way of first floating charge all of the Grantor’s stock-in-trade, inventory and raw materials together with the whole of the Grantor’s undertakings, property, assets and rights whatsoever and wheresoever both present and future, other than any assets for the time being effectively mortgaged or charged to the Lender on behalf of the Secured Parties by way of mortgage or fixed charge or effectively assigned to the Lender on behalf of the Secured Parties (whether at law or in equity) pursuant to Clause 3.1, 3.2 and 3.3 of this Deed or otherwise subject to an effective fixed security in favour of the Lender on behalf of the Secured Parties.

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3.5Crystallisation of Floating Charge

3.5.1The Lender may at any time:

(a)on or after the occurrence of an Event of Default which is continuing; and

(b)if it shall appear to the Lender that all or a substantial part of the Floating Charge Property is in danger of being seized or sold under any form of distress or execution levied or threatened to be levied or to be otherwise in jeopardy;

by notice in writing to the Grantor convert the floating charge with immediate effect into a fixed charge with regard to any Floating Charge Property specified in the notice.

3.5.2Notwithstanding Clause 3.5.1 and without prejudice to any rule of law which may have a similar effect, the floating charge shall automatically be converted with immediate effect into a fixed charge as regards the Floating Charge Property and without notice from the Lender to the Grantor on:

(a)the Grantor ceasing to carrying on its business;

(b)the presentation of a petition for the compulsory winding up of the Grantor;

(c)the convening of a meeting for the passing of a resolution for the voluntary winding up of the Grantor;

(d)the appointment by any person of a receiver and/or manager to the Grantor or any of its assets;

(e)the presentation of a petition for the appointment of an examiner to the Grantor or any related company;

(f)the creation or attempted creation of any Lien over all or any part of the Floating Charge Property without the prior consent in writing of the Lender or the levying or attempted levying by any person of any distress, execution, sequestration or other process against any of the Floating Charge Property; or

(g)the issuance of a notice to the Grantor striking the Grantor off the register of companies.

3.6Excluded Assets

Notwithstanding Clauses 3.1 to 3.5 (inclusive), no Lien or security interest is hereby granted on any Excluded Assets and references in this Deed to Security Assets shall be deemed to exclude any Excluded Assets.

3.7Negative Pledge

3.7.1The Grantor shall not, save as otherwise permitted by the terms of the Loan Documents:

(a)create or permit to subsist any Lien on any Security Asset; or

(b)sell, transfer, licence, lease, grant any option over or otherwise dispose of any Security Asset or enter into any agreement to sell, transfer, licence, lease, grant any option over or otherwise dispose of any Security Asset.

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3.7.2The Grantor, without prejudice to Clause 3.7.1(a) and (b) above but in addition to the restrictions in those sub-clauses, shall not sell, assign, charge, factor or discount or in any other manner deal with any of the Book Debt Receivables without the prior written consent of the Lender.

3.8After Acquired Property

If and whenever the Grantor shall acquire after the date of this Deed any freehold, leasehold or other immovable property it shall forthwith inform the Lender in writing of the acquisition and as soon as may be practicable if so required by the Lender deliver to the Lender the deeds and documents in its possession relating to the property so acquired and the Grantor shall, if required by the Lender, at the Grantor's own expense, execute, deliver, sign, and do all acts and deeds which shall be necessary to grant to the Lender a first fixed charge on such property in such form as the Lender on behalf of the Secured Parties shall require as further security for all monies intended to be hereby secured.  Forthwith upon the acquisition of any land, the title to which is registered or required to be registered under the Registration of Title Act, 1964, the Grantor shall give notice to the Lender and shall furnish the Lender with such information regarding such land as the Lender may reasonably require and to produce the relevant land certificate to the Lender if required by the Lender to register a Lien as a burden against the Charged Property.

3.9Validity of Charges

The charges hereby created shall be and shall be deemed to be effective and shall have effect whether or not the principal monies and interest and all other sums intended to be hereby secured or any part thereof shall be advanced before or after or upon the date of the execution of these presents.

3.10Continuing Obligations

Notwithstanding any other provisions of this Deed:

3.10.1the Grantor shall remain liable under any contracts (including the Relevant Contracts), agreements and other documents included in the Security Assets (to the extent set forth therein) to perform all of its duties and obligations thereunder to the same extent as if this Deed had not been executed;

3.10.2the exercise by the Lender of any of the rights hereunder shall not release the Grantor from any of its duties or obligations under such contracts, agreements and other documents; and

3.10.3the Lender shall not have any obligation or liability under any such contracts, agreements or other documents included in the Security Assets by reason of this Deed, nor shall the Lender be obligated to perform any of the obligations or duties or to discharge any of the liabilities of the Grantor thereunder or to make any payment or any enquiry as to the nature or sufficiency of any payment received by it or the Grantor or to take any action to collect or enforce any such contract, agreement or other document.

3.11Proviso for Redemption/Release/Reassignment

Upon satisfaction in full of the Secured Obligations and subject to the Grantor ceasing to have any liability (whether actual or contingent) to the Lender on behalf of the Secured Parties in respect of the Secured Obligations in accordance with the terms of this Deed and the Secured Parties ceasing to be under any commitment to advance any amounts to any Credit Party and upon the payment of all costs, charges and expenses incurred by the Lender or any Receiver in relation to this Deed effected by operation of law or pursuant to any judgment, decree or act of

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the Grantor the security hereby constituted shall be automatically released and all rights to the Security Assets shall revert to the Grantor.  The Lender will at any time thereafter at the request and cost of the Grantor (but subject to the rights and claims of any person having prior rights to the Security Assets or any of them) execute and do all such deeds, acts and things that may be necessary to surrender, reassign, discharge or release the charges and assignments hereby created and reconvey or surrender to the Grantor or its assigns the Security Assets.

SECTION 4.0 - ENFORCEABILITY OF SECURITY

4.1Events of Default

The security hereby constituted shall immediately become enforceable and the floating charge hereby granted shall immediately crystallise and become a specific charge and all rights of the Grantor to deal for any purpose whatsoever with the Security Assets or any part thereof following the occurrence of an Event of Default which is continuing.

SECTION 5.0 - RIGHTS AND POWERS OF THE LENDER

5.1Entry into Possession

At any time after the security hereby constituted shall have become enforceable the Lender may, in its absolute discretion:

5.1.1enforce all or any part of the security in any manner it sees fit and the power of sale and other powers conferred on mortgagees by the Act shall apply to this Deed in each case as varied or extended by this Deed without the need to obtain the consent of the Grantor or an order for possession under Sections 97 or 98 of the Act; and/or

5.1.2without further notice or demand, enter into possession of the Security Assets (or any part thereof); and/or

5.1.3sell, call in, collect, convert into money or otherwise deal with the Security Assets (or any part thereof) with the power to sell any of the Security Assets either together as one lot or in parcels and either by public auction, tender or private contract and either for a sum on account and a charge for the balance with full power upon every such sale to make any special or other stipulation as to the title or evidence of commencement of title or otherwise which the Lender and/or any Receiver shall think proper and with full power to give an option to purchase all or any part of the Security Assets, buy in, rescind or vary any contract for the sale of the Security Assets or any part thereof and to resell the same without being responsible for any loss which may be occasioned thereby and with full power to compromise and effect compositions and for the purposes aforesaid or any of them to execute and do all such assurances and things as it shall think fit and any and all monies expended by the Lender on behalf of the Secured Parties and/or any Receiver under this Section shall be deemed to be expenses properly incurred by the Lender and/or any Receiver.

PROVIDED THAT Section 99 of the Act shall not apply to this Deed and neither the Lender nor any Receiver shall be obliged to take any steps to sell or lease the Security Assets (or any part thereof) after going into possession of the Security Assets (or any part thereof) and the Lender and any Receiver shall have absolute discretion as to the time of exercise of the power of sale and the power of leasing and all other powers conferred on them by the Act or otherwise.  The rights of the Lender and any Receiver are without prejudice to and in addition to any right of possession (express or implied) to which the Lender and/or any Receiver is otherwise entitled (whether by virtue of this Deed, operation of law, statute, contract or otherwise).

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5.2Further Right of Possession

In addition to the powers hereunder given the Lender may enter into possession of and hold or appoint a Receiver to take possession of any part of the Security Assets which may at any time appear to it in danger of being taken under any process of law by any creditor of the Grantor or to be otherwise from any cause whatever in jeopardy and to any Receiver appointed under this Clause the provisions of Clause 6.1 shall apply mutatis mutandis and the Lender may at any time give up possession or withdraw the receivership.

5.3Power of Sale

At any time after the security hereby constituted has become enforceable the power of sale and all other powers conferred on mortgagees by the Act shall be exercisable immediately without the need:

5.3.1for the occurrence of any of the events specified in sub-sections (a) to (c) of section 100(1) of the Act; or

5.3.2to give notice as specified in the final proviso to section 100(1) of the Act; or

5.3.3to obtain the consent of the Grantor or a court order authorising the exercise of the power of sale under sections 100(2) or (3) of the Act; or

5.3.4to give any notice to the Grantor under section 103(2) of the Act.

Section 94 of the Act shall not apply to any security constituted by this Deed or any enforcement of such security.

5.4Power of Leasing and Accepting Surrenders

The statutory powers of leasing conferred on the Lender and any Receiver are extended so as to authorise the Lender and any Receiver to lease, make agreements for leases, accept surrenders of leases and make agreements to accept surrenders of leases as it or he may think fit and without the need to comply with any provision of sections 112 to 114 of the Act.  Without prejudice to the generality of the foregoing, the Lender and any Receiver may exercise the statutory power to accept surrenders of leases conferred by the Act for any purpose that it or he thinks fit and not just for the purpose of granting new leases under section 112 of the Act and any new lease granted by the Lender or any Receiver following the acceptance of a surrender need not comply with the requirements of section 114(3) of the Act.

5.5Power to Conduct Business

At any time after the occurrence of an Event of Default which is continuing and until the whole of the Security Assets shall be sold, called in, collected or converted under the powers of conversion the Lender may if it shall think fit so to do, carry on the business of the Grantor in and with the Security Assets and may manage and conduct the same as it shall in its discretion think fit and for the purposes of the said business may employ such agents, managers, Receivers, accountants and servants upon such terms as to remuneration or otherwise as it shall think proper and may exercise all rights of voting conferred by any part of the Security Assets and otherwise deal with and exercise or permit to be exercised any powers or rights incidental to the ownership of any of the Security Assets on such terms and conditions and generally in such manner as it may deem expedient and generally may do or cause to be done all such acts and things and may enter into such arrangements respecting the Security Assets or any part thereof as it could do it if was absolutely entitled thereto and without being responsible for any loss or damage which may arise or be occasioned thereby. The Lender shall out of the profits and income of the Security

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Assets and the monies to be made by it in carrying on the said business pay and discharge the expenses incurred in and about the carrying on and management of the said business or in the exercise of any of the powers conferred by this Section or otherwise in respect of the Security Assets and all outgoings which it shall think fit to pay and shall pay and apply the residue of the said profits, income and monies in the same manner as hereinbefore provided with respect of the monies to arise from any sale, calling in, collection or conversion under the powers of conversion. 

5.6Due Date for Statutory Purposes

For the purpose of all powers implied by statute (but not otherwise), the Secured Obligations are deemed to have become due on the date of this Deed.

5.7Non-applicability of Sections 92 and 94 of the Act

Section 92 of the Act shall not apply to this Deed.  Section 94 of the Act shall not apply to the security constituted by this Deed or any enforcement of such security.

5.8Position of Third Parties

No person (including a purchaser) dealing with the Lender or any Receiver or its or his attornies or agents will be concerned to enquire:

5.8.1whether any of the Secured Obligations have become payable or remain due; or

5.8.2whether due notice has been given to any person; or

5.8.3whether any power which the Lender or any Receiver is purporting to exercise has become exercisable or has been or is being properly exercised; or

5.8.4whether the Receiver is authorised to act; or

5.8.5how any money paid to the Lender as security trustee on behalf of the Secured Parties or to any Receiver is to be applied,

and all protections to purchasers contained in sections 105, 106 and 108(5) of the Act shall apply to any person (including a purchaser) dealing with the Lender or any Receiver in like manner as if the statutory powers of sale and appointing a receiver had not been varied or extended by this Deed.

5.9Receipt of Lender Good Discharge

Upon any sale, calling in, collection or conversion or other dealing under any of the provisions herein contained the receipt of the Lender or any Receiver for the purchase money of the Security Assets sold or for any other monies paid to it shall effectually discharge the purchaser or person paying the same therefrom and from being concerned to see to the application or the loss or misapplication thereof. 

5.10Application of Monies

Notwithstanding section 109 of the Act, the Lender shall hold the monies arising from any exercise of the powers of sale or conversion upon trust that it shall thereout in the first place pay or retain or provide for the payment or satisfaction of the costs and expenses and liabilities incurred in or about the execution of such powers or otherwise in relation to these presents and shall apply the residue of such monies in accordance with Clause 8.3 of the Credit Agreement. 

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SECTION 6.0 - APPOINTMENT OF RECEIVER

6.1Power of Appointment

At any time after the occurrence of an Event of Default which is continuing (and so that no delay or waiver of the right to exercise the powers hereby conferred shall prejudice the future exercise of such powers) and without the need for the occurrence of any of the events specified in section 108(1)(a) to (c) inclusive of the Act, the Lender may without further notice by writing under the hand of any director, general manager, assistant general manager or secretary for the time being of the Lender or any person authorised by any one of them in writing appoint a Receiver of the Security Assets or any part thereof and remove any Receiver so appointed and appoint another or others in his stead and/or appoint another person to act jointly with any such Receiver and the following provisions shall have effect:

6.1.1such appointment may be made either before or after the Lender shall have entered into or taken possession of the Security Assets or any part thereof;

6.1.2such Receiver shall have and be entitled to exercise all powers conferred by the Act, without the restrictions contained in the Act, in the same way as if the Receiver had been duly appointed under the Act and in addition, shall have the power on behalf of and at the cost of the Grantor to do or omit to do anything which the Grantor could do or omit to do in relation to the Security Assets or any part thereof and in particular but without limiting any powers hereinbefore referred to shall have power to do all or any of the following:

(a)to enter upon, take possession of, collect and get in the Security Assets and for that purpose to take, defend or discontinue any proceedings or submit any matter to arbitration or mediation in the name of the Grantor;

(b)to re-let or let the Security Assets or any part thereof from time to time to such person or persons as he shall think fit for any term of years which he thinks right or on yearly monthly or weekly tenancies at the best rents which may be reasonably obtainable and to surrender or accept surrenders, grant licences or otherwise dispose of all or any of the Security Assets on such terms and conditions as he may think fit;

(c)to carry on, manage, develop, construct or diversify the business of the Grantor or any part thereof (or concur in so doing);

(d)to sell or concur in selling the Security Assets or any part thereof and to carry such sale into effect and by deed in the name and on behalf of the Grantor or otherwise convey the same to the purchaser thereof;

(e)to make any arrangement or compromise or enter into, vary or cancel any contracts which he shall think expedient in the interests of the Lender;

(f)to make and effect all such repairs, improvements, structural and other alterations or extensions or demolitions or renewals of the Security Assets as he shall think fit and renew such of the plant, machinery and any other effects of the Grantor whatsoever as shall be worn out lost or otherwise become unserviceable without being responsible for loss or damage; and do anything else in connection with the Security Assets which the Receiver may think desirable for the purpose of making productive and increasing the letting or market value of the Security Assets or protecting the security hereby created; and

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(g)to effect, maintain, renew, increase or vary such insurances as he shall, in his absolute discretion, think fit;

(h)to promote the formation of a subsidiary company and/or companies of the Grantor with a view to such subsidiary company and/or companies purchasing, leasing, licensing or otherwise acquiring interests in all or any of the assets of the Grantor;

(i)to make allowances to, and re-arrangements with, any lessee, tenants or other persons from whom any rents and profits may be receivable (including the granting of any licences and reviewing rent in accordance with the terms of and varying the provisions of any leases affecting the Security Assets);

(j)to redeem any prior encumbrance and to settle and prove the accounts of the encumbrancer and accounts so settled and proved shall be conclusive and binding on the Grantor and the money so paid shall be a receivership expenses;

(k)to settle, adjust, refer to arbitration, compromise and arrange any claims, accounts, disputes, questions and demands with or by any person who is or claims to be a creditor of the Grantor or relating in any way to the Security Assets or any part thereof and take, defend, continue and discontinue any proceedings relating to the Security Assets or any part thereof;

(l)to appoint, hire and employ and to remunerate managers, agents, servants, attendants, workmen and others on such terms and generally in such manner as he shall think fit in connection with any exercise by him of any of the within powers or otherwise for any purpose connected with the Security Assets or any part thereof and to discharge any person so appointed, hired or employed; and

(m)generally, to use (at his option) the name of the Grantor in the exercise of all or any of the powers hereby conferred and to do all such other acts and things as maybe considered to be incidental or conducive to any of the matters and powers aforesaid and which the Receiver may or can lawfully do as agent for the Grantor;

6.1.3unless otherwise directed by the Lender, such Receiver may also exercise all the powers and authority vested in the Lender by these presents and in particular all powers vested in the Lender by Section 5.0 hereof;

6.1.4the Lender may from time to time fix the remuneration of such Receiver and direct payment thereof out of the Charged Property but the Grantor alone shall be liable for such remuneration;

6.1.5the Lender may from time to time or at any time require such Receiver to give security for the due performance of his duties as such Receiver and may fix the nature and amount of security to be so given but the Lender shall not be bound in any case to require any such security;

6.1.6the Lender shall be in no way responsible for any misconduct or negligence on the part of such Receiver;

6.1.7subject as provided in Section 5.0 and herein the provisions of any relevant enactment conferring powers on a mortgagee or Receiver shall apply to and be deemed to be

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conferred upon any Receiver appointed hereunder as if such provisions and powers were incorporated herein. 

6.2Powers of Receiver to Borrow

Subject as provided in this Section, any Receiver appointed under these presents may for the purpose of defraying his costs charges, losses or expenses (including his remuneration) which shall be incurred by him in the exercise of the powers, authorities and discretions vested in him and for all other purposes hereof or any of them, raise and borrow money on the security of the Security Assets or any part thereof either in priority to the security hereby constituted or otherwise and on such terms and conditions as he may think fit and no person lending any such money shall be concerned to enquire as to the propriety or purpose of the exercise of this power or to see to the application of any monies so raised or borrowed provided that no Receiver shall exercise this power without first obtaining the written consent of the Lender but the Lender shall incur no responsibility or liability to the Grantor or otherwise by reason of its giving or refusing such consent whether absolutely or subject to any limitation or condition.

6.3Application of Monies by Receiver

The net profits of carrying on the said business and/or the net proceeds of any sale by the Receiver shall subject to any prior ranking claims thereon, and notwithstanding section 109 of the Act, be applied by him as follows:

6.3.1firstly, in payment of all costs, charges and expenses of and incidental to the appointment of the Receiver and the exercise by him of all or any of the powers aforesaid including the remuneration of the Receiver and all outgoings properly paid by him; and

6.3.2secondly, in or towards payment in the manner provided in Clause 8.3 of the Credit Agreement,

PROVIDED THAT if the Receiver shall be of the opinion that the security may prove deficient payments may be made on account of unpaid principal monies before unpaid interest due under these presents but such alteration in the order of payment of principal monies and interest shall not prejudice the right of the Lender to receive the full amount to which it would have been entitled if the primary order of payment had been observed or any less amount which the sum ultimately realised may be sufficient to pay.

6.4Liability of the Lender and Receiver

The Lender and any Receiver appointed by the Lender under this Deed shall not, in any circumstances, whether by reason of the Lender or such Receiver entering into possession of the Security Assets or any part thereof or for any other reason whatsoever be liable to account as mortgagee in possession or on any basis whatsoever for anything except actual receipts or be liable for any loss arising from any realisation of the Security Assets or any part thereof or any default or omission in relation to the Security Assets or any exercise or non-exercise of any power, authority or discretion conferred on the Lender or any Receiver in relation to the Security Assets or any part thereof by or pursuant to this Deed or the Act.

6.5Receiver Agent of the Grantor

Any Receiver appointed hereunder shall be deemed to be the agent of the Grantor for all purposes and be in the same position as the Receiver duly appointed under the Act in connection with his powers and duties hereunder save so far as he shall be specifically authorised to engage the responsibility of the Lender or shall expressly undertake personal liability which he shall not be

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deemed to do by entering into any contract as or in which he is described as Receiver and the Grantor shall be solely responsible for all acts and defaults of the Receiver as agent for the Grantor and for such remuneration of the Receiver as the Lender shall consider reasonable and be liable under any contracts or engagements made or entered into by him and the Lender shall not in making the appointment or in consenting thereto incur any liability for any such acts or defaults or otherwise save in the case of fraud, gross negligence or wilful misconduct.

6.6Section 108 of the Act

The provisions of section 108 of the Act (with the exception of sub-sections 1(a) and (b) thereof and save so far as modified by the provisions hereof) shall apply to these presents and to any Receiver appointed by the Lender hereunder.  Section 108(7) of the Act shall not apply to the commission and/or remuneration of a Receiver appointed pursuant to this Deed.  A Receiver shall be entitled to remuneration at a rate to be fixed by agreement between such Receiver and the Lender (or failing such agreement to be fixed by the Lender).

SECTION 7.0 - CONTINUING SECURITY, ETC.

7.1Continuing Security

The security constituted by this Deed shall be a continuing security which shall extend to all the Secured Obligations and shall not be considered as satisfied or discharged by any intermediate payment or settlement of all or any of the Secured Obligations and is in addition to and independent of and shall not prejudice, affect or merge with any other security which the Lender may hold at any time for any of the Secured Obligations and shall not be in any way prejudiced thereby or by the invalidity thereof.

7.2Opening of New Accounts

7.2.1If for any reason the security constituted hereby or pursuant hereto ceases to be a continuing security (other than by way of discharge of such security), the Lender and any Secured Party may open a new account with or continue any existing account with the Grantor and the liability of the Grantor in respect of the Secured Obligations at the date of such cessation shall remain regardless of any payments in or out of any such account.

7.2.2At any time on receiving notice that the Grantor has created a Lien over any of the property or assets hereby charged the Lender and any Secured Party may close the then current account of the Grantor (if any) and open a new account with the Grantor and no monies paid or carried to the credit of such new account shall be appropriated towards or have the effect of discharging any part of the amount owing on this security at the date of such notice. 

7.3Reinstatement

7.3.1Where any discharge (whether in respect of the obligations of the Grantor or any security for those obligations or otherwise) is made in whole or in part or any arrangement is made on the faith of any payment, security or other disposition which is avoided or must be restored on insolvency, liquidation or otherwise without limitation, the liability of the Grantor under this Deed shall continue as if the discharge or arrangement had not occurred. 

7.3.2The Lender may concede or compromise any claim that any payment, security or other disposition is liable to avoidance or restoration.

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7.4Waiver of Defences

7.4.1The liability of the Grantor hereunder will not be affected by any act, omission, circumstance, matter or thing which but for this provision would release or prejudice any of its obligations hereunder or prejudice or diminish such obligations in whole or in part, including without limitation, and whether or not known to the Grantor or any Secured Party:

(a)any time, indulgence or waiver granted to, or composition with, the Grantor or any other person; or

(b)the release of the Grantor or any other person under the terms of any composition or arrangement with any creditor of the Grantor; or

(c)the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect or take up or enforce any rights or remedies against, or any security over assets of, the Grantor or any other person or any non-presentment or non-observance of any formality or other requirement in respect of any instruments or any failure to realise the full value of any other security; or

(d)any legal limitation, disability, incapacity or lack of powers, authority or legal personality of or dissolution or change in the members or status of or other circumstance relating to, the Grantor or any other person; or

(e)any variation (however fundamental and whether or not involving any increase in the liability of the Grantor thereunder) or replacement of any Loan Document or any other document or security so that references to the Loan Documents or other documents or security in this Deed shall include each such variation or replacement; or

(f)any unenforceability, illegality, invalidity or frustration of any obligation of the Grantor or any other person under any Loan Document or any other document or security, or any failure of the Grantor to become bound by the terms of a Loan Document whether through any want of power or authority or otherwise; or

(g)any postponement, discharge, reduction, non-provability or other similar circumstance affecting any obligation of the Grantor under a Loan Document or any security granted therefor resulting from any insolvency, liquidation or dissolution proceedings or from any law, regulation or order, this Deed be construed as if there were no such circumstance,

to the intent that the Grantor's obligations under this Deed shall remain in full force, and this Deed shall be construed accordingly, as if there were no such circumstance, act, variation, limitation, omission, unenforceability, illegality, matter or thing.

The Lender shall not be concerned to see or investigate the powers or authorities of the Grantor or its officers or agents, and monies obtained or Secured Obligations incurred in purported exercise of such powers or authorities or by any person purporting to act on behalf of the Grantor shall be deemed to form a part of the Secured Obligations, and "Secured Obligations" shall be construed accordingly.

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7.5Additional Security

This Deed is in addition to and is not in any way prejudiced by any other security now or hereafter held by the Lender.

SECTION 8.0 - SHARES

8.1Covenants relating to Shares

The Grantor hereby covenants with the Lender as security trustee on behalf of the Secured Parties that in relation to the Shares it will at all times during the continuance of this security comply with the provisions set forth in the following Clauses of this Section, save to the extent otherwise permitted by the terms of the Credit Agreement.

8.2Deposit of Title Documents

The Grantor shall:

8.2.1immediately upon the date of this Deed, or if acquired after the date of this Deed, forthwith following the acquisition of same, deposit with the Lender, or as the Lender may direct, all certificates and other documents of title or evidence of ownership in relation to any of the Shares; and

8.2.2execute in blank and deliver to the Lender all share transfer forms and all other documents which may be requested by the Lender in order to enable the Lender or its nominees to be registered as the owner or otherwise obtain a legal title to any of the Shares.

8.3Changes to Rights

The Grantor shall not take or allow the taking of any action on its behalf in relation to any of the Shares which would (in the opinion of the Lender) prejudice the value of, or the ability of the Lender to realise, the security created in this Deed.

8.4Calls

The Grantor shall pay all calls or other payments due and payable in respect of any of the Shares and in the event of the Grantor failing to do so, the Lender may, but shall not be obliged to, pay the calls or other payments on behalf of the Grantor.  The Grantor must immediately on request reimburse the Lender for any payment made by the Lender in respect of the foregoing.

8.5Other Obligations in respect of Shares

8.5.1The Grantor shall promptly copy to the Lender and comply with all requests for information which is within its knowledge relating to any of the Shares.  If it fails to do so, the Lender may elect to provide such information as it may have on behalf of the Grantor.

8.5.2The Grantor shall comply with all other conditions and obligations assumed by it in respect of any of the Shares.

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8.6Voting and Dividend Rights

8.6.1Until the occurrence of an Event of Default which is continuing and upon the receipt of written notice from the Lender informing the Grantor otherwise:

(a)the Grantor may exercise the voting rights, powers and other rights in respect of the relevant Shares provided that such rights and powers must not be exercised in any manner which would prejudice the value of, or the ability of the Lender to realise, the security created by this Deed; and

(b)all dividends or other income paid or payable in relation to any investments shall be paid directly to the Grantor.

The Grantor shall indemnify the Lender against any loss or liability incurred by the Lender as a consequence of the Lender acting in respect of the Shares on the direction of the Grantor unless such loss or liability is caused by the negligence or wilful default of the Lender.

8.6.2Upon the occurrence of an Event of Default which is continuing and upon the receipt of written notice from the Lender informing the Grantor otherwise, the Lender may exercise (in the name of the Grantor and without any further consent or authority on the part of the relevant company) any voting rights and any powers or rights which may be exercised by the legal or beneficial owner of any Share, any person who is the holder of any investment.

SECTION 9.0 - SECURITY ACCOUNTS

9.1Covenants relating to Security Accounts

The Grantor hereby covenants with the Lender as security trustee on behalf of the Secured Parties that in relation to the Security Accounts it will at all times during the continuance of this security comply with the provisions set forth in the following Clauses of this Section 9.0, save to the extent otherwise permitted by the Credit Agreement.

9.2Security Accounts

All Security Accounts must, unless the Lender otherwise agrees in writing, be maintained with an Account Bank.

9.3Withdrawals

9.3.1The Grantor shall not, following the occurrence of an Event of Default which is continuing, withdraw any moneys from a Security Account except with the prior consent of the Lender.

9.3.2Subject as provided in Clause 9.3.1, the Lender (or a Receiver) may withdraw amounts standing to the credit of a Security Account to meet an amount due and payable in accordance with the terms of the Loan Documents when it is due and payable.

9.4Notices of Charge

Upon execution and delivery of this Deed, the Grantor shall immediately:

9.4.1give notice to any relevant Account Bank substantially in the form of Part 1 of Schedule 3  (Form of Letters for Security Account); and

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9.4.2use its best endeavours to ensure that the Account Bank acknowledges the notice substantially in the form of Part 1 of Schedule 3  (Form of Letters for Security Account).

SECTION 10.0 - BOOK DEBT RECEIVABLES ACCOUNT

10.1Covenants relating to Book Debt Receivables Account

The Grantor hereby covenants with the Lender as security trustee on behalf of the Secured Parties that in relation to the Book Debt Receivables Account it will at all times during the continuance of this security comply with the provisions set forth in the following Clauses of this Section 10.0, save to the extent otherwise permitted by the Credit Agreement.

10.2Book Debt Receivables Account

The Book Debt Receivables Account must, unless the Lender otherwise agrees in writing, be maintained with an Account Bank.

10.3Receipts

The Grantor shall get in and realise its Book Debt Receivables in the ordinary course of its business and hold the proceeds of the getting in and realisation on trust for the Lender on behalf of the Secured Parties.

10.4Withdrawals

10.4.1The Grantor shall not, without the prior written consent of the Lender, withdraw any moneys from Book Debt Receivables Account.

10.4.2The Lender (or a Receiver) may withdraw amounts standing to the credit of a Book Debt Receivables Account to meet any Secured Obligation due and payable in accordance with the terms of the Loan Documents when it is due and payable.

10.5Notices of Charge

10.5.1Upon execution and delivery of this Deed, the Grantor shall immediately deliver to the Account Bank with which the Book Debt Receivables Account is maintained, a notice to the Account Bank, and procure that the Account Bank has signed and delivered to the Lender, a letter, in each case substantially in the form of Part 4 of Schedule 3 (Form of Notice to Account Bank operating Book Debts Receivables Accounts).

10.5.2Upon receipt of the acknowledgement in Clause 10.5.1 above from the Account Bank, the Lender will send a letter to that branch substantially in the form of Part 4 of Schedule 3  (Form of Letters for Book Debt Receivables Account).

10.5.3The Grantor shall:

(a)collect all Book Debt Receivables in the ordinary course of trading as agent for the Lender;

(b)immediately upon receipt pay all monies which it may receive in respect of the Book Debt Receivables into the Book Debt Receivables Account;

(c)pending such payment into a Book Debt Receivables Account hold all monies so received upon trust for the Lender.

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10.6Legal Assignment

The Grantor shall, if called upon to do so by the Lender, execute and deliver to the Lender a legal assignment of its then Book Debt Receivables and other debts on such terms as the Lender may require and give notice thereof to the debtors from whom the same are due owing or incurred and take any other steps as the Bank may require to perfect such legal assignment.

SECTION 11.0 - RELEVANT CONTRACTS/INSURANCES

11.1Covenants relating to Relevant Contracts and Insurances

The Grantor hereby covenants with the Lender as security trustee on behalf of the Secured Parties that in relation to the Relevant Contracts and Insurances it will at all times during the continuance of this security comply with the provisions set forth in the following Clauses of this Section.

11.2Preservation

The Grantor shall not, without the prior written consent of the Lender:

11.2.1amend or waive any term of, or terminate, any Relevant Contract to which it is a party; or

11.2.2take any action which might jeopardise the existence or enforceability of any such Relevant Contract.

11.3Further Undertakings

The Grantor hereby further undertakes with the Lender that it shall:

11.3.1duly and promptly perform its obligations, and diligently pursue its rights, under each Relevant Contract to which it is a party; and

11.3.2supply the Lender and any Receiver with copies of each Relevant Contract and any information and documentation relating to any Relevant Contract requested by the Lender or any Receiver.

11.4Notices of Assignment

Upon execution and delivery of this Deed, the Grantor shall immediately serve a notice of assignment:

11.4.1in relation to the Insurances, substantially in the form of Part 2 of Schedule 3  (Notice of Assignment of Insurances);

11.4.2in relation to the Relevant Contracts, substantially in the form set out in Part 2 of Schedule 3 (Notice to Contract Party), on each counterparty to a Relevant Contract to which it is a party; and

11.4.3use its best endeavours to procure that each such party acknowledges that notice, substantially in the form of Part 3 of Schedule 3  (Letter of Undertaking) or Part 3 of Schedule 3  (Acknowledgement from Contract Party) as the case may be.

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SECTION 12.0 - INTELLECTUAL PROPERTY

12.1Covenants relating to Intellectual Property

The Grantor hereby covenants with the Lender as security trustee on behalf of the Secured Parties that in relation to the Intellectual Property it will at all times during the continuance of this security comply with the provisions set forth in the following Clauses of this Section.

12.2Intellectual Property

The Grantor shall:

12.2.1if it shall become aware of any infringement of its Intellectual Property, at once give the Lender all information in its possession with regard thereto and at its own cost commence and diligently prosecute and permit the Lender in the name, and at the cost of the Grantor, to commence and prosecute all proceedings which in the sole opinion of the Lender are necessary to prevent such infringement or to recover damages in respect thereof;

12.2.2not, without prior written consent of the Lender in relation to its Intellectual Property or any part thereof grant any exclusive registered user agreement or exclusive licence;

12.2.3lodge all notices, complete all filings and registrations and do all other acts as may be necessary to ensure that its Intellectual Property is valid and subsisting and remains vested in it and take all such actions and proceedings as are reasonably necessary to protect such Intellectual Property and if any or all such Intellectual Property shall at any time become void to lodge all notices and do all acts as may be necessary to restore such Intellectual Property to it and in particular to pay all fees as may be necessary for all of the above purposes before the same shall become due.

SECTION 13.0 - GENERAL PROVISIONS

13.1Assignment

The provisions of Clause 10.6 of the Credit Agreement shall apply to this Deed as though references to “this Agreement” were to “this Deed”.

13.2Consolidation

The statutory restrictions on the consolidation of mortgages shall not apply to this security.

13.3Protection of Purchaser

Where a conveyance is made in professed exercise of the power of sale applicable hereto the title of the purchaser (the "Purchaser") shall not be impeachable on the grounds that no case has arisen to authorise the sale or that due notice was not given or that the power was otherwise improperly exercised and the Purchaser shall not either before or on conveyance be concerned to see or inquire whether a case has arisen to authorise the sale or due notice has been given or the power is otherwise than properly or regularly exercised but this provision shall not prejudice a claim for damages against the person exercising the power or any person damnified by an unauthorised or improper or irregular exercise thereof.

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13.4No Waivers, Remedies Cumulative

No failure on the part of the Lender (or any Secured Party) to exercise, nor any delay in exercising any right, remedy, power or privilege under this Deed or any Loan Document will operate as a waiver thereof, nor will any single or partial exercise of any such right, remedy, power or privilege preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges under this Deed are cumulative and not exclusive of any such right, remedy, power or privilege that may otherwise be available to the Lender or any Secured Party.

13.5Set-off

In addition to any other right of set-off to which the Lender (or any Secured Party) may at any time be entitled (whether by agreement, operation or law or otherwise), the Lender (or any Secured Party) may at any time after the occurrence and during the continuance of an Event of Default (both before and after any demand hereunder and without notice) set-off any liability of the Grantor to the Lender (or any Secured Party) (whether actual or contingent and whether or not then due and payable) against any credit balance on any account of the Grantor with the Lender (or any Secured Party) and may retain the whole or any part of such credit balance to meet the liability of the Grantor to the Lender (or any Secured Party).

13.6Preferential Claims

The Grantor shall procure that all debts and obligations to or in respect of persons employed by the Grantor which by law may have priority over the security hereby created shall be punctually duly paid and discharged. 

13.7Power of Attorney

13.7.1The Grantor by way of security irrevocably appoints the Lender as security trustee on behalf of the Secured Parties (whether or not a Receiver has been appointed) and, also as a separate appointment, or any Receiver or Receivers appointed to be the attorney or attorneys of the Grantor for the Grantor and in the name and on behalf of the Grantor as its act and deed to execute, deliver and perfect all documents and do all things which the attorney may consider to be required or desirable for:

(a)carrying out any obligation imposed on the Grantor by this Deed (including the execution and delivery of any deeds, charges, assignments or other security and any transfers of any of the Security Assets); and

(b)enabling the Lender and/or any Receiver to exercise, or delegate the exercise of, any of the rights, powers and authorities conferred on them by or pursuant to this Deed or by law (including the exercise of any right of a legal or beneficial owner of any of the Security Assets).

13.7.2The Grantor shall ratify and confirm all things done and all documents executed by any attorney in the exercise or purported exercise of any of his powers. 

13.7.3The Power of Attorney referred to in this Deed shall become enforceable following the occurrence of an Event of Default which shall be continuing.

13.8Waiver

A waiver by the Lender (or any Secured Party) of any breach of any of the terms provisions or conditions hereof or the acquiescence by the Lender (or any Secured Party) in any act (whether

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commission or omission) shall not constitute a general waiver of such term provision or condition or of any subsequent act contrary thereto.

13.9Enforcement of Other Rights

The Grantor waives any right it may have of first requiring the Lender (or any Secured Party) to proceed against or enforce any other rights or security the Lender (or any Secured Party) may have or benefit from before enforcing the security constituted hereby.

13.10Appropriations

Until all the Secured Obligations have been unconditionally and irrevocably paid and discharged in full, the Lender as security trustee on behalf of the Secured Parties may:

13.10.1refrain from applying or enforcing any other monies, security or rights held or received by it in respect of the Secured Obligations unless and until the amounts recovered by the Lender from the Grantor are sufficient to discharge in full all of the Secured Obligations PROVIDED THAT it holds any such other monies not applied in accordance with Clause 13.10.2 below or apply and enforce the same in such manner and order as it sees fit (whether against the Secured Obligations or otherwise) and the Grantor shall not be entitled to the benefit of the same; and

13.10.2hold in a suspense account any moneys received from the Grantor or on account of the Grantor's liability in respect of the Secured Obligations.  Amounts standing to the credit of any such suspense account shall bear interest at a rate considered by the Lender (acting reasonably) to be a fair market rate.

13.11Authority of the Lender

The Grantor acknowledges that the rights and responsibilities of the Lender under this Deed with respect to any action taken by the Lender or the exercise or non-exercise by the Lender of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Deed shall, as between the Lender and the other Secured Parties, be governed by the Credit Agreement and by such other agreements with respect thereto as may exist from time to time among them, but, as between the Lender and the Grantor, the Lender shall be conclusively presumed to be acting as agent for the Secured Parties with full and valid authority so to act or refrain from acting, and the Grantor shall not be under any obligation or entitlement to make any inquiry respecting such authority.

13.12Duty; Obligations and Liabilities

The Lender’s sole duty with respect to the custody, safekeeping and physical preservation of the Security Assets in its possession shall be to deal with them in the same manner as the Lender deals with similar property for its own account.  The powers conferred on the Lender hereunder are solely to protect the Lender’s interest in the Security Assets and shall not impose any duty upon the Lender to exercise any such powers.  The Lender shall be accountable only for amounts that it receives as a result of the exercise of such powers, and neither it nor any of its Affiliates shall be responsible to the Grantor for any act or failure to act hereunder, except for their own gross negligence or wilful misconduct as finally determined by a court of competent jurisdiction.  In addition, the Lender shall not be liable or responsible for any loss or damage to any Security Assets, or for any diminution in the value thereof, by reason of the act or omission of any warehousemen, carrier, forwarding agency, consignee or other bailee if such Person has been selected by the Lender in good faith.

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13.13Obligations and Liabilities with respect to Security Assets

No Secured Party and no Affiliates thereof shall be liable for failure to demand, collect or realise upon any Security Assets or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Security Assets upon the request of the Grantor or any other person or to take any other action whatsoever with regard to any Security Assets.  The powers conferred on the Lender hereunder shall not impose any duty upon any other Secured Party to exercise any such powers.  The other Secured Parties shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and neither they nor any of their respective officers, directors, employees or agents shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross negligence or wilful misconduct as finally determined by a court of competent jurisdiction.

13.14Additional Powers

13.14.1By way of supplement to the Trustee Act 1893 (as amended) it is expressly declared as follows:

(a)the Lender (as security trustee on behalf of the Secured Parties) may in relation to any of the provisions of this Deed act or rely upon the opinion or advice of or any information obtained from any lawyer, accountant, valuer, surveyor, broker, auctioneer or other expert commissioned by the Lender (as security trustee on behalf of the Secured Parties) and the Lender shall not be responsible for any loss occasioned by so acting or relying;

(b)the Lender (as security trustee on behalf of the Secured Parties) shall not be liable for acting on any opinion, advice or information purporting to be so conveyed although the same shall contain some error or shall not be authentic;

(c)the Lender (as security trustee on behalf of the Secured Parties) may refrain from doing anything which would or might in its opinion be contrary to any law of any jurisdiction or any directive or regulation of any agency of any state or which would or might otherwise render it liable to any person and may do anything which is, in its opinion, necessary to comply with any such law, directive or regulation;

(d)neither the Lender (as security trustee on behalf of the Secured Parties) nor any of its officers, employees or agents shall be liable for:

(i)the execution, genuineness, validity, enforceability or sufficiency of this Deed, any Loan Document or any other document in connection therewith; or

(ii)the collectability of amounts payable hereunder; or

(iii)the accuracy of any statement (whether written or not) made in or in connection with this Deed or other document in connection therewith;

(e)the Lender (as security trustee on behalf of the Secured Parties) and every attorney, agent or other person appointed by it under or in connection with this Deed shall be entitled to be indemnified out of amounts received by the Lender (as security trustee on behalf of the Secured Parties) under this Deed against all liabilities and expenses reasonably and properly incurred in the execution

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of any power, trust, authority or discretion in connection with this Deed and against all actions, proceedings, costs, claims and demands in respect of any matter or things done or omitted to be done in any way relating to this Deed unless the same result from the gross negligence or wilful default of the Lender (as security trustee on behalf of the Secured Parties) or any such attorney, agent or other person;

(f)all moneys which under the trusts contained in this Deed are received or held by the Lender (as security trustee on behalf of the Secured Parties) may be invested in the name of the Lender (as security trustee on behalf of the Secured Parties) or any nominee or under the control of the Lender (as security trustee on behalf of the Secured Parties) in any investment for the time being authorised by Irish law for the investment by a trustee of trust moneys or by placing the same on deposit in the name of the Lender (as security trustee on behalf of the Secured Parties) or any nominee or under the control of the Lender (as security trustee on behalf of the Secured Parties) at such bank or institution (including the Lender (as security trustee on behalf of the Secured Parties)) as the Lender subject to the terms hereof, the Lender may direct or in such currency as the Lender or, subject to the terms hereof, the Lender may direct and the Lender (as security trustee on behalf of the Secured Parties) may at any time vary or transfer any such investments for or into other such investments or convert any moneys so deposited into any other currency as the Lender or subject to the terms hereof, the Lender shall from time to time direct and shall not be responsible for any loss occasioned thereby, whether by depreciation in value, fluctuation in exchange rates or otherwise;

(g)the Lender (as security trustee on behalf of the Secured Parties) shall have full power to determine all questions and doubts arising in relation to the interpretation or application of any of the provisions of this Deed as it affects the Lender (as security trustee on behalf of the Secured Parties) and every such determination (whether made upon a question actually raised or implied in the acts or proceedings of the Lender (as security trustee on behalf of the Secured Parties)) shall be conclusive and shall bind the other parties hereto provided it is reasonable;

(h)the Lender (as security trustee on behalf of the Secured Parties) may in the conduct of the trusts hereof (otherwise than in relation to its right to make any declaration, determination or decision) instead of acting personally employ and pay an agent (whether being a lawyer or other person) to transact or concur in transacting any business and to do or concur in doing any acts required to be done by the Lender (as security trustee on behalf of the Secured Parties) (including the receipt and payment of money) and any such agent engaged in any profession or business shall be entitled to be paid all usual professional and other charges for business transacted and acts done by him or any partner or employee of his in connection with the trusts hereof; and

(i)any investment or any part or all of the Security Asset may, at the discretion of the Lender (as security trustee on behalf of the Secured Parties), be made or retained in the names of nominees.

13.14.2The Lender (as security trustee on behalf of the Secured Parties) may assume without enquiry (in the absence of knowledge by or an express notice to it to the contrary acquired or received by it in its capacity as Lender (as security trustee on behalf of the Secured Parties) hereunder) that each of the parties hereto is duly performing and observing all its obligations contained in this Deed.

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13.14.3The Lender (as security trustee on behalf of the Secured Parties) may, from time to time, be the Lender (as security agent on behalf of the Secured Parties) or act in any other capacity in respect of a Loan Party and shall in such event be entitled, notwithstanding that it is also a Lender, to take or refrain from taking, any action which it would be entitled so to take if it was not the Lender (as security trustee on behalf of the Secured Parties) and shall not be precluded, by virtue of its position as the Lender (as security trustee on behalf of the Secured Parties), or in any other capacity, from exercising any of its discretions, powers and duties as Lender (as security trustee on behalf of the Secured Parties). The Lender (as security trustee on behalf of the Secured Parties) may enter into any financial or business contracts or any other transaction or arrangement with the Grantor or any other person and the Lender (as security trustee on behalf of the Secured Parties) shall be in no way accountable to the Grantor or any other person for any profits or benefits arising from any such contract or transaction.

13.14.4The powers, trusts, authorities and discretions conferred upon the Lender (as security trustee on behalf of the Secured Parties) by this Deed shall be in addition to any which may from time to time be vested in the Lender by the general law or otherwise.

13.14.5The Lender (as security trustee on behalf of the Secured Parties) shall have the power, in any circumstances, to appoint a new or additional trustee or trustees, being person(s) appointed by the Lender (as security trustee on behalf of the Secured Parties) at its sole discretion.  Any appointment of a new, additional trustee or trustees shall be in writing signed by or on behalf of the Lender (as security trustee on behalf of the Secured Parties).  These powers shall be in addition to the powers contained in the Trustee Act 1893 (as amended).

13.14.6The Lender may retire at any time and without being responsible for the costs occasioned by such retirement.  Prior to confirmation by the Lender that the Secured Obligations have been irrevocably discharged in full, the retirement of the Lender (as security trustee on behalf of the Secured Parties) shall not take effect until the appointment of a new Lender (as security trustee on behalf of the Secured Parties) (the “New Trustee”) has been made and accepted by the Lender and the new Trustee (as security trustee on behalf of the Secured Parties) shall have executed all deeds and documents as are necessary to effect such appointment and the transfer of the Lender’s rights and obligations under this Deed.

13.15Notices

13.15.1Any notice, demand or other communication required or permitted to be given or made under this Deed shall be addressed or sent as follows:

(a)if to the Lender to:

Address:15260 Ventura Blvd., Suite 1800
Shearman Oaks, CA 91403

Attention:Vicky Regan

Fax No.(818) 783-7984

(b)if to the Grantor, to:

Address:Arthur Cox Building
Earlsfort Centre
Earlsfort Terrace

34

Dublin 2
Ireland

Attention:David Ryan

Fax No.+353 1 9012199

13.15.2Any notice, demand or other communication required or permitted to be given or made hereunder shall be validly given or made if delivered personally or if despatched by pre-paid letter post addressed as aforesaid or if sent by fax message to such fax number (if any) as may be specified as aforesaid and shall be deemed to be given or made:

(a)if delivered by hand - at the time of delivery; and

(b)if sent by post - two Business Days after the same shall have been posted.

13.16Non-Competition

13.16.1Until all the Secured Obligations have been unconditionally and irrevocably paid and discharged in full the Grantor shall not by virtue of any payment made, security realised or monies received or recovered under the Loan Documents or any security therefor for or on account of the liability of any third party:

(a)be subrogated to any rights, security or moneys held, received or receivable by the Lender or the Secured Parties (or any trustee or agent on their behalf) or be entitled to any right of contribution or indemnity; or

(b)claim, rank, prove or vote as a creditor of any other Loan Party or its estate in competition with the Lender (or any trustee or agent on its behalf); or

(c)receive, claim or have the benefit of any payment, distribution or security from or on account of any other Loan Party, or exercise any right of set-off as against any other Loan Party.

13.16.2The Grantor will hold in trust for and forthwith pay or transfer to the Lender any payment or distribution or benefit of security received by it contrary to the provision of this Clause 13.16.  If the Grantor exercises any right of set-off contrary to the above, it will forthwith pay an amount equal to the amount set off to the Lender.

13.17Counterparts

This Deed may be executed in any number of counterparts and by the parties to this Deed on separate counterparts, each of which, when executed and delivered, shall constitute an original, but all the counterparts shall together constitute but one and the same instrument.

13.18Governing Law and Jurisdiction

13.18.1This Deed shall be governed by and construed in accordance with the laws of Ireland.

13.18.2The Grantor hereby agrees for the exclusive benefit of the Lender that any legal action or proceeding (the "Proceedings") brought against it with respect to this Deed may be brought in the High Court in Ireland or such other competent Court of Ireland as the Lender may elect and the Grantor waives any objection to the Proceedings being taken in such courts whether on the grounds of venue or on the ground that the Proceedings have been brought in an inconvenient forum.  The Grantor undertakes to enter an unconditional appearance within 14 days after the completion of any service or process of any Proceedings.  The Grantor hereby consents to the service by post of any process issued in that jurisdiction.  Nothing herein shall affect the Lender's right to serve process in any other manner permitted by law.

35

13.18.3Nothing in this Clause shall limit the right of the Lender to take Proceedings to any other court or competent jurisdiction nor shall the taking of Proceedings in any or more jurisdictions preclude the taking of Proceedings in any other jurisdiction (whether concurrently or not).

IN WITNESS whereof the parties have executed and delivered this Deed on the date specified above.

36

SCHEDULE  1

Scheduled Property

None at the date of this Deed.

37

schedule  2

Part 1

The Fixtures and Fittings

None at the date of this Deed.

Part 2

The Relevant Contracts

1.The Business and Assets Transfer Agreement

2.The Loan Agreement

part 3

The Licences

None at the date of this Deed.

Part 4

The Shares

None at the date of this Deed.

Part 5

The Intellectual Property

None at the date of this Deed.

Part 6

The Security Accounts

None at the date of this Deed.

Part 7

The Book Debt Receivable Account

None at the date of this Deed.

PART 8

The Insurances

None at the date of this Deed.

38

schedule  3

PART 1

Form of Letters for Security Account

Part A

Notice to Account Bank

[On the letterhead of the Grantor]

To:[Account Bank]

[Date]

Dear Sirs

Security Deed dated [                      ] 2014 (the "Security Deed") between (1) DMIH Limited and (2) Silicon Valley Bank (acting as security trustee for the Secured Parties) (the “Lender”)

1.This letter constitutes notice to you that pursuant to the Security Deed we have charged (by way of a first fixed charge) in favour of the Lender all our right, title and interest in respect of any monies standing to the credit of the accounts maintained by us with you, more particular details of which are set out in the Schedule to this Notice (the "Accounts").

2.We irrevocably instruct and authorise you to:

2.1disclose to the Lender any information relating to any Account requested from you by the Lender;

2.2comply with the terms of any written notice or instruction relating to any Account received by you from the Lender;

2.3hold all sums standing to the credit of any Account to the order of the Lender; and

2.4pay or release any sum standing to the credit of any Account in accordance with the written instructions of the Lender.

3.We are not permitted to withdraw any amount from any Account without the prior written consent of the Lender.

4.We acknowledge that you may comply with the instructions in this letter without any further permission from us.

5.We enclose a copy of the Security Deed.

6.The instructions in this letter may not be revoked or amended without the prior written consent of the Lender.

39

7.This letter is governed by Irish law.

8.Please confirm your agreement to the above by sending the attached acknowledgement to the Lender at [                   ] with a copy to ourselves.

Yours faithfully

………………………………

(Authorised signatory)

DMIH LIMITED

Schedule

The Security Accounts

[Details]

40

Part B

Acknowledgement of Security Account Bank

[On the letterhead of the Account Bank]

To:Silicon Valley Bank (as security trustee on behalf of the Secured Parties) (the “Lender”)

Copy:[Grantor]

[Date]

Dear Sirs

Security Deed dated [                      ] 2014 (the "Security Deed") between (1) DMIH Limited and (2) Silicon Valley Bank (as security trustee on behalf of the Secured Parties) (the “Lender”)

We confirm receipt from DMIH Limited (the "Grantor") of a notice (the "Notice") dated [                      ] 2014 with respect to a charge under the terms of the Security Deed over all the right, title and interest of the Grantor to any amount standing to the credit of any of the Grantor's accounts with us (the "Accounts").

We confirm that we:

1.accept the instructions contained in the notice and agree to comply with the Notice;

2.have not received notice of the interest of any third party in any Account;

3.have neither claimed nor exercised, nor will claim or exercise, any security interest, set-off, counterclaim or other right in respect of any Account; and

4.will not permit any amount to be withdrawn from any Account without your prior written consent.

The Accounts maintained with us are:

[Specify accounts and account numbers]

This letter is governed by Irish law.

Yours faithfully

…………………………………

(Authorised signatory)

[Account Bank]

41

Part 2

Forms of Letter for Contracts

Part A

Notice to Counterparty

To:[Contract party]

[Date]

Dear Sirs

Security Deed dated [                      ] 2014 (the "Security Deed") between (1) DMIH Limited and (2) Silicon Valley Bank (as security trustee on behalf of the Secured Parties) (the “Lender”)

1.This letter constitutes notice to you that under the Security Deed we have assigned by way of security to the Lender all our right, title and interest in and to [insert details of Contracts or add a schedule of Contracts] (the "Contracts").

2.We confirm that:

2.1we will remain liable under the Contracts to perform all the obligations assumed by us under the Contracts; and

2.2none of the Lender, its agents, any receiver or any other person will at any time be under any obligation or liability to you under or in respect of the Contracts.

3.We will also remain entitled to exercise all our rights, powers and discretions under the Contracts, and you should continue to give notices under the Contracts to us, unless and until you receive notice from the Lender to the contrary stating that the security has become enforceable.  In this event, all the rights, powers and discretions will be exercisable by, and notices must be given to, the Lender or as it directs.

4.Please note that we have agreed that we will not amend or waive any provision of or terminate the Contracts without the prior consent of the Lender.

5.This letter is governed by Irish law.

Please acknowledge receipt of this letter by sending the attached acknowledgement to the Lender at [                      ].

Yours faithfully

…………………………

(Authorised signatory)

DMIH LIMITED

42

Part B

Acknowledgement of Counterparty

To:Silicon Valley Bank

Copy:DMIH Limited

[Date]

Dear Sirs

We confirm receipt from DMIH Limited (the "Grantor") of a notice dated [                      ] (the "Notice") of an assignment on the terms of the Security Deed dated [                      ] 2014 of all the Grantor's right, title and interest in and to [insert details of the Contracts] (the "Contracts").

We confirm that we will pay all sums due, and give notices, under the Contracts as directed in the Notice.

This letter is governed by Irish law.

Yours faithfully

……………………………..

(Authorised signatory)

[Counterparty]

43

Part 3

Part A

Notice of Assignment of Insurances

(for attachment by way of endorsement to the Insurance Policies)

To:[Insurer]

[Date]

We, DMIH Limited hereby give notice that by a Security Deed dated [               ], between (1) DMIH Limited and (2) Silicon Valley Bank (as security trustee on behalf of the Secured Parties) (the “Lender”), we have assigned to the Lender the policies of insurance more particular details of which are set out in the Schedule to this Notice (the "Policies") and all our interest (including the benefit of all money owing or to become owing to us in respect of the Policies together with all interest thereon).

We hereby irrevocably authorise and instruct you to issue a letter of undertaking, in the form attached, to the Lender and to act on the instructions of the Lender in the manner provided in that letter without any further reference to or authorisation from us.

This letter shall be governed by Irish law.

Yours faithfully

…………………………

(Authorised signatory)

DMIH LIMITED

44

SCHEDULE

Policies

45

Part B

Letter of Undertaking

To:Silicon Valley Bank as security trustee on behalf of the Secured Parties (the “Lender”)

[Date]

Dear Sirs,

Letter of Undertaking

In accordance with an assignment of the insurance policies referred to in the Schedule to this letter (the "Policies") made by DMIH Limited (the "Grantor") we undertake:

1.to note your interest as loss payee on the Policies;

2.to disclose to you without any reference to or further authority from the Grantor such information relating to the Policies as you may at any time request;

3.not to release any of the Policies on request by the Grantor without your prior written consent;

4.following written notification from you of the occurrence of an Event of Default which is outstanding, to pay all claims payable under the policies of Insurance to you unless you otherwise agree in writing and save as obliged by law.

This letter shall be governed by Irish law.

Yours faithfully,

..............................
for and on behalf of

[Insurer]

46

SCHEDULE

Policies

47

part 4

Form of notice to and acknowledgement from bank operating Book Debt Receivables Account

To:[insert name and address of Account Bank]

Dear Sirs,

Re:	Account Holder: DMIH Limited (the "Grantor")
	Account No: (the "Book Debt Receivables Account")
	Account Branch: [insert branch address]

1.We give notice that, by a Security Deed dated 2014 (the "Security Deed") between (1) the Grantor and (2) Silicon Valley Bank (the "Lender"), the Grantor has charged to the Lender all its present and future right, title and interest in and to:

1.1[the Book Debt Receivables, the Book Debt Receivables Account, all monies from time to time standing to the credit of the Book Debt Receivables Account and all additions to or renewals or replacements thereof (in whatever currency); and

1.2all monies standing to the credit of any other accounts from time to time maintained with you by the Grantor,]

(together the "Charged Accounts") and to all interest from time to time accrued or accruing on the Charged Accounts and all rights to repayment of any of the foregoing by you.

2.We advise you that, under the terms of the Security Deed, we are not entitled to withdraw any monies from the Book Debt Receivables Accounts without first having obtained the prior written consent of the Lender.

3.We irrevocably authorise and instruct you from time to time:

3.1unless the Lender so authorises you, not to permit withdrawals from the Security Accounts;

3.2to hold all monies from time to time standing to the credit of the Charged Accounts to the order of the Lender;

3.3to pay all or any part of the monies standing to the credit of the Charged Accounts to the Lender (or as it may direct) promptly following receipt of written instructions from the Lender to that effect; and

3.4to disclose to the Lender such information relating to the Grantor and the Charged Accounts as the Lender may from time to time request you to provide.

3.5[to pay all monies received by you for our account to (and only to) [specify account].]

48

4.We agree that you are not bound to enquire whether the right of the Lender to withdraw any monies from any Charged Account has arisen or be concerned with the propriety or regularity of the exercise of that right or to be concerned with notice to the contrary or be concerned with or responsible for the application of any monies received by the Lender.

5.The provisions of this notice may only be revoked or amended with the prior written consent of the Lender. 

6.Please confirm by completing the enclosed copy of this notice and returning it to the Lender (with a copy to the Grantor) that:

6.1you agree to act in accordance with the provisions of this notice;

6.2you have not, at the date this notice is returned to the Lender, received notice of any assignment or charge of or claim to the monies standing to the credit of any of the Charged Accounts or the grant of any security or other interest over those monies in favour of any third party and you will notify the Lender promptly if you should do so in the future; and

6.3you do not now and will not in the future exercise any right to combine accounts or any rights of set-off or lien or any similar rights in relation to the monies standing to the credit of the Charged Accounts.

7.This notice (and any acknowledgement) shall be governed by and construed in accordance with the laws of Ireland.

Yours faithfully,

______________________________

for and on behalf of

DMIH LIMITED

Countersigned by

______________________________

for and on behalf of

[                      ]

49

[On Copy]

To:Silicon Valley Bank

as security trustee on behalf of the Secured Parties (the “Lender”)

[                      ]

Copy to:  DMIH Limited

We acknowledge receipt of the above notice. We confirm and agree:

(a)that the matters referred to in it do not conflict with the terms which apply to any Charged Account; and

(b)the matters set out in paragraphs 1 to 3 in the above notice.

_________________________

for and on behalf of

[Account Bank]

Dated: [                      ]

50

EXECUTION PAGE

Grantor

GIVEN under the COMMON SEAL of DMIH LIMITED:	/s/ Richard Danis
	Director
	Statton Hammock
	Director/Secretary

Security Trustee

Signed by and duly authorised on behalf of SILICON VALLEY BANK (as security trustee for the Secured Parties)	/s/ Ted Bell
	Authorised Signatory

WF-9364204.exv

51

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002

I, Taryn Naidu, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Rightside Group, Ltd.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures,  as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 14, 2014

/s/ Taryn Naidu

Taryn Naidu
Chief Executive Officer
(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002

I, Tracy Knox, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Rightside Group, Ltd.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 14, 2014

/s/ Tracy Knox
Tracy Knox
Chief Financial Officer
(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2014 of Rightside Group, Ltd. (the “Company”) as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Taryn Naidu, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 14, 2014

/s/ Taryn Naidu

Taryn Naidu

Chief Executive Officer

(Principal Executive Officer)

This certification accompanies the Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Rightside Group, Ltd. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing.

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2014 of Rightside Group, Ltd. (the “Company”) as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Tracy Knox, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 14, 2014

/s/ Tracy Knox

Tracy Knox

Chief Financial Officer

(Principal Financial Officer)

This certification accompanies the Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Rightside Group, Ltd. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing.

XML

Other Assets (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Deposits for gTLD applications	$ 25,765	$ 21,252
Other	4,731	1,998
Other Assets	$ 30,496	$ 23,250

XML

Earnings (loss) Per Share (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Aug. 01, 2014	Jul. 31, 2014	Dec. 31, 2013
Earnings Per Share [Abstract]
Net loss	$ 4,097	$ (2,562)	$ (3,314)	$ (4,977)
Weighted average number of shares outstanding
Weighted average shares outstanding, basic	18,444,000	18,413,000	18,424,000	18,413,000
Dilutive effect of stock based equity awards	44,000	0	0	0
Dilutive effect of warrants	0	0	0	0
Weighted average shares outstanding, diluted	18,488,000	18,413,000	18,424,000	18,413,000
Net income (loss) per share attributable to common
Basic (in earnings per share)	$ 0.22	$ (0.14)	$ (0.18)	$ (0.27)
Diluted (in earnings per share)	$ 0.22	$ (0.14)	$ (0.18)	$ (0.27)
Shares issued	18,487		18,487		18,400,000	1,000	18,487
Common stock par value (in dollars per share)	$ 0.0001		$ 0.0001		$ 0.0001	$ 0.0001	$ 0.0001
Shares outstanding	0		0		18,400,000	1,000	0

XML

Employee Benefit Plan (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Defined contribution plan
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Percent			90.00%
Demand Media 401k Plan
Defined contribution plan
Contributions	$ 0.2	$ 0.1	$ 0.5	$ 0.4

XML

Subsequent Events (Details) (USD $)	3 Months Ended		9 Months Ended		1 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Oct. 31, 2014 Subsequent Event	Oct. 31, 2014 Subsequent Event Namecheap
Subsequent events
Note receivable						$ 2,500,000
Note receivable term extension						1 year
Gain on gTLD application withdrawals, net	$ 8,558,000	$ 1,336,000	$ 14,303,000	$ 2,565,000	$ 7,000,000

XML

Commitments and Contingencies (Details) (USD $) In Millions, unless otherwise specified	1 Months Ended
	Dec. 31, 2013	Sep. 30, 2014
Domain Name Agreement
Other Commitments [Line Items]
Contract term	1 year
Quarterly purchase obligation		$ 0.2
Donuts Agreement
Other Commitments [Line Items]
Contract term	5 years

XML

Transactions with Related Parties and Parent Company Investment (Tables)

9 Months Ended

Sep. 30, 2014

Related Party Transactions [Abstract]

Schedule of costs incurred and allocated by Demand Media

Prior to the separation on August 1, 2014, we recorded the following costs incurred and allocated by Demand Media in our statements of operations as follows (in thousands):

	Three months ended				Nine months ended
	September 30,				September 30,
	2014		2013		2014		2013
Service costs	$	899	$	2,822	$	6,231	$	8,125
Sales and marketing		80		527		1,499		1,654
Product development		180		446		2,280		1,161
General and administration		1,758		5,189		11,500		15,079
Total allocated expenses	$	2,917	$	8,984	$	21,510	$	26,019

Schedule of parent company investment activity

The table below presents the activity that comprises the decrease in parent company investment for the nine months ended September 30, 2014 (in thousands):

		Nine months ended
		September 30, 2014
Cash transfer to Demand Media, net	$	45,735
Stock based compensation from equity awards		(809)
Allocated expenses, assets and liabilities, net		(16,881)
Net decrease in parent company investment	$	28,045

XML

Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2014

Accounting Policies [Abstract]

Recent Accounting Pronouncements

Recently Adopted Accounting Guidance

In February 2013, the FASB issued ASU 2013-2, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income (ASU 2013-2), to improve the reporting of reclassifications out of accumulated other comprehensive income. ASU 2013-2 requires presentation, either on the face of the financial statements or in the notes, of amounts reclassified out of accumulated other comprehensive income by component and by net income line item. ASU 2013-2 is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2012. We adopted ASU 2013-2 in the first quarter of fiscal 2014. The adoption of ASU 2013-2 did not have a significant impact on our financial statements, but did require additional disclosures.

Recent Accounting Guidance Not Yet Adopted

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (ASU 2014-09). ASU 2014-09 outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The new model will require revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. The amendments in ASU 2014-09 are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period and early adoption is not permitted. The standard can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. We are currently assessing the impact that this updated standard will have on our financial statements and footnote disclosures.

In June 2014, the FASB issued ASU 2014-12, Compensation - Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide that a Performance Target Could be Achieved after the Requisite Service Period (ASU 2014-12), which requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant date fair value of the award. This update further clarifies that compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. We do not anticipate that the adoption of this standard will have a material impact on our financial statements.

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Stock Based Compensation Expense (Details 2) (Equity Plan [Member], USD $) Share data in Thousands, except Per Share data, unless otherwise specified	9 Months Ended
	Sep. 30, 2014
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized [Abstract]
Unrecognized stock based compensation, net of forfeitures	$ 8,700,000
Nonvested awards period of recognition	2 years 10 months 24 days
Stock Option
Shares
Outstanding beginning balance	335
Exercised	(6)
Outstanding ending balance	329
Exercisable	329
Weighted Average Exercise Price
Weighted average exercise price outstanding beginning balance	$ 15.42
Weighted average exercise price exercised	$ 7.88
Weighted average exercise price outstanding ending balance	$ 15.55
Weighted average exercise price exercisable	$ 15.55
Additional Disclosures
Weighted average remaining contractual term outstanding	4 years 6 months 22 days
Weighted average remaining contractual term exercisable	4 years 6 months 22 days
Aggregate intrinsic value outstanding beginning of period	167,000
Aggregate intrinsic value outstanding end of period	157,000
Aggregate intrinsic value exercisable	$ 157,000
Restricted Stock Units (RSUs) [Member]
Non-option rollforward
Outstanding beginning balance	679
Granted	537
Vested	(106)
Cancelled	(48)
Outstanding ending balance	1,062
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Weighted average share value outstanding beginning balance	$ 24.54
Weighted average share value granted	$ 12.77
Weighted average share value vested and released	$ 23.68
Weighted average share value cancelled	$ 20.56
Weighted average share value outstanding ending balance	$ 18.82

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Other Balance Sheet Items (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Balance Sheet Related Disclosures [Abstract]
Customer deposits	$ 8,116	$ 7,065
Accrued payroll and related items	2,980	3,052
Commissions payable	2,189	2,209
Domain owners' royalties payable	1,262	1,193
Other	5,935	5,268
Accrued expenses and other current liabilities	$ 20,482	$ 18,787

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Intangible Assets (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	$ 61,804		$ 61,804		$ 53,602
Accumulated amortization	(39,755)		(39,755)		(38,334)
Total	22,049		22,049		15,268
Amortization of intangible assets	1,931	1,877	5,530	6,093
Owned website names
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	17,204		17,204		18,580
Accumulated amortization	(11,271)		(11,271)		(11,534)
Total	5,933		5,933		7,046
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	20,842		20,842		20,976
Accumulated amortization	(17,938)		(17,938)		(17,119)
Total	2,904		2,904		3,857
Technology
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	7,954		7,954		7,990
Accumulated amortization	(7,907)		(7,907)		(7,896)
Total	47		47		94
Noncompete agreements
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	207		207		207
Accumulated amortization	(71)		(71)		(42)
Total	136		136		165
Trade names
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	5,468		5,468		5,468
Accumulated amortization	(2,086)		(2,086)		(1,743)
Total	3,382		3,382		3,725
gTLD deposit receivable
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	10,129		10,129		381
Accumulated amortization	(482)		(482)
Total	9,647		9,647		381
Service costs
Finite-Lived Intangible Assets [Line Items]
Amortization of intangible assets	1,498	1,337	4,221	3,955
Sales and marketing
Finite-Lived Intangible Assets [Line Items]
Amortization of intangible assets	323	466	924	1,922
Product development
Finite-Lived Intangible Assets [Line Items]
Amortization of intangible assets	5	5	14	14
General and administrative
Finite-Lived Intangible Assets [Line Items]
Amortization of intangible assets	$ 105	$ 69	$ 371	$ 202

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Transactions with Related Parties and Parent Company Investment (Details) (USD $) In Thousands, unless otherwise specified	7 Months Ended	3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended
	Aug. 01, 2014	Sep. 30, 2014 Demand Media	Sep. 30, 2013 Demand Media	Sep. 30, 2014 Demand Media	Sep. 30, 2013 Demand Media	Sep. 30, 2014 Demand Media Service costs	Sep. 30, 2013 Demand Media Service costs	Sep. 30, 2014 Demand Media Service costs	Sep. 30, 2013 Demand Media Service costs	Sep. 30, 2014 Demand Media Sales and marketing	Sep. 30, 2013 Demand Media Sales and marketing	Sep. 30, 2014 Demand Media Sales and marketing	Sep. 30, 2013 Demand Media Sales and marketing	Sep. 30, 2014 Demand Media Product development	Sep. 30, 2013 Demand Media Product development	Sep. 30, 2014 Demand Media Product development	Sep. 30, 2013 Demand Media Product development	Sep. 30, 2014 Demand Media General and administrative	Sep. 30, 2013 Demand Media General and administrative	Sep. 30, 2014 Demand Media General and administrative	Sep. 30, 2013 Demand Media General and administrative
Related Party Transaction [Line Items]
Allocated expenses		$ 2,917	$ 8,984	$ 21,510	$ 26,019	$ 899	$ 2,822	$ 6,231	$ 8,125	$ 80	$ 527	$ 1,499	$ 1,654	$ 180	$ 446	$ 2,280	$ 1,161	$ 1,758	$ 5,189	$ 11,500	$ 15,079
Cash transfer to Demand Media, net				45,735
Allocated stock-based compensation expense		100	1,400	(809)	4,400
Allocated expenses, assets and liabilities not settled in cash, net.				(16,881)
Net decrease in parent company investment	$ (28,045)			$ 28,045

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Income Taxes (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Income Tax Disclosure [Abstract]
Effective Income Tax Rate Reconciliation, Percent	(64.60%)	34.80%	33.20%	27.90%
Income Tax Expense (Benefit)	$ (1,608,000)	$ (1,366,000)	$ (1,650,000)	$ (1,930,000)
Increase in income tax expense			(300,000)
Liability for uncertain tax positions	$ 0	$ 0	$ 0	$ 0

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Company Background and Basis of Presentation

9 Months Ended

Sep. 30, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

1.  Company Background, Separation from Demand Media and Basis of Presentation

In February 2013, Demand Media, Inc. (“Demand Media”) announced that its board of directors authorized Demand Media to pursue the separation of its business into two distinct publicly traded entities: a new company named Rightside Group, Ltd. (“Rightside,” the “Company,” “our,” “we,” or “us”) focused on domain name services, and Demand Media, a digital media company. On August 1, 2014, Demand Media consummated a tax free distribution of all of the outstanding shares of our common stock on a pro rata basis to Demand Media stockholders (the “separation” or the “spin‑off”) as of the record date. After the spin‑off, we began operating as an independent, publicly traded company.

We were incorporated on July 11, 2013, as a direct, wholly owned subsidiary of Demand Media, a New York Stock Exchange (“NYSE”) listed company that, prior to the spin-off, was a diversified digital media and domain name services company. Prior to our separation from Demand Media on August 1, 2014, Demand Media owned all of the outstanding shares of our capital stock. We have one class of common stock issued and outstanding, and no preferred stock outstanding. In connection with the spin‑off, Demand Media contributed or transferred certain of the subsidiaries and assets relating to Demand Media’s domain name services business to us, and we or our subsidiaries assumed all of the liabilities relating to Demand Media’s domain name services business.

We provide domain name registration and related value‑added service subscriptions to third parties through our wholly owned subsidiaries, eNom, Incorporated (“eNom”) and Name.com. We are also a significant participant in the substantial expansion of the number of available generic Top Level Domains (“gTLDs”) by the Internet Corporation for Assigned Names and Numbers(“ICANN”), with the first gTLDs delegated in October 2013 (the “New gTLD Program”). As part of the New gTLD Program, our domain name services business entered into its first registry operator agreements with ICANN, becoming an accredited registry for new gTLDs, and eNom and Name.com also entered into contracts necessary to participate in the New gTLD Program. We began to provide back‑end domain name registry and related services for gTLDs owned by third‑party domain name registries and we have operations for our own gTLDs.

Separation from Demand Media

Immediately prior to the separation, the authorized shares of Rightside capital stock were increased from 1,000 shares to 120.0 million shares, divided into the following classes: 100.0 million shares of common stock, par value $0.0001 per share, and 20.0 million shares of preferred stock, par value $0.0001 per share. The 1,000shares of Rightside common stock, par value $0.0001 per share, that were previously issued and outstanding were automatically reclassified as and became 18.4 million shares of common stock, par value $0.0001 per share. The separation was effected by Demand Media through a tax-free dividend involving the distribution of all Rightside common stock held by Demand Media to Demand Media’s stockholders on August 1, 2014.

Upon effectiveness of the separation, holders of Demand Media common stock received one share of Rightside common stock for every five shares of Demand Media common stock they held on the record date. Following completion of the separation, Rightside became an independent, publicly traded company on the NASDAQ Global Select Market using the symbol: “NAME.”

As part of the separation, we entered into various agreements with Demand Media which provide for the allocation between Rightside and Demand Media of certain assets, liabilities, and obligations, and govern the relationship between Rightside and Demand Media after the separation. The agreements became effective as of August 1, 2014, and include the following: Separation and Distribution Agreement, Transition Services Agreement, Employee Matters Agreement and Tax Matters Agreement.

Basis of Presentation

After the separation on August 1, 2014, our financial statements are presented on a consolidated basis, as we became a separate consolidated group. Our balance sheet, statement of operations, statement of stockholders’ equity and statement of cash flows include the accounts of Rightside and our wholly-owned subsidiaries.  These consolidated financial statements reflect our financial position, results of operations, statement of comprehensive income (loss), equity and cash flows as a separate company and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Prior to the separation on August 1, 2014, our financial statements were prepared on a condensed combined basis and presented as carve-out financial statements, as we were not a separate consolidated group.  Our financial statements were derived from the financial statements and accounting records of Demand Media. 

We have prepared the accompanying unaudited financial statements in accordance with GAAP for interim financial reporting. All intercompany accounts and transactions were eliminated in consolidation. In our opinion, we have included all adjustments necessary for a fair presentation. These adjustments consist of normal recurring items. We will refer to condensed combined and condensed consolidated financial statements as “financial statements,” “balance sheets,” “statement of operations,” “statement of cash flow” and “statement of stockholders’ equity” herein.

Prior to the separation on August 1, 2014, our financial statements assume the allocation to us of certain Demand Media corporate expenses relating to Rightside (refer to Note 13—Transactions with Related Parties and Parent Company Investment for further information). The accounting for income taxes is computed for our company on a separate tax return basis (refer to Note 9—Income Taxes for further information).

All significant intercompany accounts and transactions, other than those with Demand Media, have been eliminated in preparing the financial statements. All transactions between us and Demand Media have been included in these financial statements and are deemed to be settled. The total net effect of the settlement of these transactions is reflected in the statements of cash flow as a financing activity and in the combined balance sheets as “Parent company investment.” Parent company investment in the balance sheets represents Demand Media’s historical investment in our company, the net effect of cost allocations from transactions with Demand Media and our accumulated earnings.

Prior to the separation on August 1, 2014, the financial statements included expense allocations for certain: (1) corporate functions historically provided by Demand Media, including, but not limited to, finance, legal, information technology, human resources, communications, compliance, and other shared services; (2) employee benefits and incentives; and (3)stock‑based compensation.

These expenses have been allocated to us on a direct basis when identifiable, with the remainder allocated on a pro rata basis calculated as a percentage of our revenue, headcount or expenses to Demand Media’s consolidated results. We consider the basis on which these expenses were allocated to be a reasonable reflection of the utilization of services provided to or the benefit received by us during the periods presented. The allocations do not, however, reflect the expense that we would have incurred as an independent company for the periods presented. Actual costs that may have been incurred if we had been a stand‑alone company would depend on a number of factors, including, but not limited to, the chosen organizational structure, the costs of being a stand‑alone publicly traded company, what functions were outsourced or performed by employees and strategic decisions made in areas such as information technology and infrastructure. Following our separation from Demand Media, we will perform these functions using our own resources and purchased services. For an interim period, however, some of these functions will continue to be provided by Demand Media under a transition services agreement, which are planned to extend for a period up to 18 months. Costs incurred by Demand Media to complete the spin‑off were not allocated to us.

We have prepared the unaudited interim financial statements on the same basis as the audited financial statements and have included all adjustments, which include only normal recurring adjustments, necessary for the fair statement of our statement of financial position, results of operations, and cash flows. The results for the three and nine months ended September 30, 2014, are not necessarily indicative of the results expected for the full year. The balance sheet as of December 31, 2013, has been derived from our audited combined financial statements for the year ended December 31, 2013, included in our Form 10 as filed with the Securities and Exchange Commission (“SEC”) on July 14, 2014.

The interim unaudited financial statements have been prepared in accordancewith GAAP. They do not include all of the information and footnotes required by GAAP for complete financial statements. Therefore, these financial statements should be read in conjunction with our audited combined financial statements and notes thereto included in our Form 10 as filedwith the SEC on July 14, 2014.

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Debt (Details) (USD $)	1 Months Ended	9 Months Ended
	Aug. 31, 2014	Sep. 30, 2014
Letter of credit subfacility
Credit facilities disclosures
Letters of credit issued		$ 11,000,000
Silicon Valley Bank | Revolving credit facility
Credit facilities disclosures
Facility capacity	30,000,000
Unused borrowing capacity fee	0.250
Debt instrument fee	500,000
Silicon Valley Bank | Letter of credit subfacility
Credit facilities disclosures
Facility capacity	15,000,000
Letters of credit issued		11,000,000
Silicon Valley Bank | Federal Funds Effective Swap Rate | Revolving credit facility
Credit facilities disclosures
Margin	0.50%
Silicon Valley Bank | Eurodollar | Revolving credit facility
Credit facilities disclosures
Percentage added to interest rate	1.00%
Silicon Valley Bank | Eurodollar | Revolving credit facility | Minimum
Credit facilities disclosures
Margin	1.00%
Silicon Valley Bank | Eurodollar | Revolving credit facility | Maximum
Credit facilities disclosures
Margin	1.50%
Silicon Valley Bank | London Interbank Offered Rate (LIBOR) | Revolving credit facility | Minimum
Credit facilities disclosures
Margin	2.00%
Silicon Valley Bank | London Interbank Offered Rate (LIBOR) | Revolving credit facility | Maximum
Credit facilities disclosures
Margin	2.50%
Tennebaum | Term loan credit facility
Credit facilities disclosures
Term loan borrowing	30,000,000
Quarterly principal payment		$ 375,000
Beginning date for required repayments	Mar. 31, 2015
Percentage of excess cash flow used for mandatory prepayments	50.00%
Tennebaum | Term loan credit facility | Prepaid in year one
Credit facilities disclosures
Premium on prepayment		4.00%
Tennebaum | Term loan credit facility | Prepaid in year two
Credit facilities disclosures
Premium on prepayment		2.50%
Tennebaum | Term loan credit facility | Prepaid in year three
Credit facilities disclosures
Premium on prepayment		1.00%
Tennebaum | Term loan credit facility | Prepaid after year three
Credit facilities disclosures
Premium on prepayment		0.00%
Tennebaum | London Interbank Offered Rate (LIBOR) | Term loan credit facility
Credit facilities disclosures
Margin		8.75%

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Other Balance Sheet Items (Tables)

9 Months Ended

Sep. 30, 2014

Balance Sheet Related Disclosures [Abstract]

Schedule of accounts receivable

Accounts receivable consisted of the following (in thousands):

	September 30,		December 31,
	2014		2013
Accounts receivable—trade	$	6,377	$	5,515
gTLD deposit receivable		9,080		-
Receivables from registries		3,921		3,661
Accounts receivable	$	19,378	$	9,176

Tabular disclosure of the components of accrued and other current liabilities.

Based on the nature of our business transactions, we do not have an allowance for uncollectible receivables.

Accrued expenses and other current liabilities consisted of the following (in thousands):

	September 30,		December 31,
	2014		2013
Customer deposits	$	8,116	$	7,065
Accrued payroll and related items		2,980		3,052
Commissions payable		2,189		2,209
Domain owners’ royalties payable		1,262		1,193
Other		5,935		5,268
Accrued expenses and other current liabilities	$	20,482	$	18,787

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Other Assets (Tables)

9 Months Ended

Sep. 30, 2014

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Schedule of other assets

Other long‑term assets and gTLD deposits consisted of the following (in thousands):

	September 30,		December 31,
	2014		2013
Deposits for gTLD applications	$	25,765	$	21,252
Other		4,731		1,998
Other assets	$	30,496	$	23,250

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Debt (Details 2) (USD $)	2 Months Ended	3 Months Ended	9 Months Ended	1 Months Ended	3 Months Ended	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2014	Sep. 30, 2014	Aug. 31, 2014 Tennebaum Credit Facility warrants	Sep. 30, 2014 Tennebaum Credit Facility warrants	Sep. 30, 2014 Tennebaum Credit Facility warrants	Aug. 31, 2014 Tennebaum Credit Facility warrants Maximum	Sep. 30, 2014 Term loan credit facility Tennebaum Credit Facility warrants	Sep. 30, 2014 Tennebaum Level 3	Sep. 30, 2014 Tennebaum Term loan credit facility
Class of Warrant or Right [Line Items]
Warrants to purchase common stock (in shares)							997,710
Exercise price				$ 15.05
Stock warrants issued	$ 4,441,000		$ 4,441,000
Stock price				$ 14.49
Strike price				$ 15.05
Volatility				42.44%
Risk free rate				1.67%
Dividend yield				0.00%
Expected term				5 years
Warrant equity component				4,400,000
Note discount that will be amortized										4,302,000,000
Debt instrument fee								3,200,000
Long-term debt fair value									25,700,000
Principal										30,000,000,000
Unamortized note discount										(4,302,000,000)
Carrying value										25,698,000,000
Interest Expense [Abstract]
Contractual interest expense					424,000	424,000
Amortization of issuance costs					100,000	100,000
Accretion of note discount					138,000	138,000
Total		$ 701,000	$ 701,000		$ 662,000	$ 662,000
Effective interest rate					16.40%	16.40%

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Debt (Tables) (Term loan credit facility, Tennebaum)

9 Months Ended

Sep. 30, 2014

Term loan credit facility | Tennebaum

Schedule of debt outstanding

We estimated the fair value of the Tennenbaum Credit Facility using a discounted cash flow model with Level 3 inputs.  Under this approach, we estimated the fair value to approximate its carrying value of $25.7 million as of September 30, 2014.

The following table presents our debt outstanding on the Tennenbaum Credit Facility (in thousands):

	September 30, 2014
Principal	30,000
Unamortized note discount	(4,302)
Carrying value	25,698

Schedule Of Interest Expense

The following table presents the interest expense on the Tennenbaum Credit Facility (in thousands):

	Three months ended						Nine months ended
	September 30,						September 30,
	2014			2013			2014			2013
Contractual interest expense	$	424		$	-		$	424		$	-
Amortization of issuance costs		100			-			100			-
Amortization of note discount		138			-			138			-
Total	$	662		$	-		$	662		$	-
Effective interest rate		16.4	%		-	%		16.4	%		-

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Stock based Compensation Expense (Tables)

9 Months Ended

Sep. 30, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of stock-based compensation expense related to all employee and non-employee stock-based awards

The following table summarizes the stock‑based compensation expense related to stock‑based awards that has been included in the following line items within the statements of operations for each of the periods presented (in thousands):

	Three months ended				Nine months ended
	September 30,				September 30,
		2014		2013		2014		2013
Service costs	$	90	$	117	$	272	$	341
Sales and marketing		149		421		992		1,253
Product development		202		389		781		869
General and administrative		715		1,577		2,381		4,808
Total stock-based compensation expense	$	1,156	$	2,504	$	4,426	$	7,271

Schedule of stock options activity

The following table presents our stock option activity for the nine months ended September 30, 2014, recast to reflect the conversion of five Demand Media stock options to one Rightside stock option on August 1, 2014 (in thousands, except for per share amounts and contractual term):

	Shares		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding as of December 31, 2013		335	$	15.42		-	$	167
Exercised		(6)		7.88		-
Outstanding as of September 30, 2014		329		15.55		4.56		157
Exercisable as of September 30, 2014		329		15.55		4.56		157

Schedule of restricted stock unit awards activity

The following table presents a summary of restricted stock unit award activity for the nine months ended September 30, 2014, recast to reflect the conversion of five Demand Media RSUs to 1.71 Rightside RSUs (in thousands, except for per share amounts):

	Shares		Weighted Average Share Value
Outstanding as of December 31, 2013		679	$	24.54
Granted		537		12.77
Vested		(106)		23.68
Cancelled		(48)		20.56
Outstanding as of September 30, 2014		1,062		18.82

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Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Cash flows from operating activities
Net loss	$ (3,314)	$ (4,977)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization	11,560	11,054
Amortization of Debt Discount (Premium)	241
Deferred income taxes	(1,670)	(1,936)
Stock‑based compensation	4,427	7,271
Gain on gTLD application withdrawals, net	(14,303)	(2,565)
Gain on sale of marketable securities	(1,362)
Other	(342)	(760)
Change in operating assets and liabilities:
Accounts receivable, net	(914)	1,093
Prepaid expenses and other current assets	(1,267)	(869)
Deferred registration costs	(9,013)	(8,414)
Deposits with registries	(13)	(400)
Other long‑term assets	(1,830)	(1,606)
Accounts payable	(715)	1,759
Accrued expenses and other liabilities	2,852	(1,305)
Deferred revenue	13,702	10,196
Net cash (used in) provided by operating activities	(1,961)	8,541
Cash flows from investing activities
Purchases of property and equipment	(3,632)	(8,149)
Purchases of intangible assets	(1,609)	(2,111)
Payments and deposits for gTLD applications, net	(19,450)	(405)
Proceeds from gTLD withdrawals, net	10,339	2,876
Change in restricted cash	(345)
Proceeds from sale of marketable securities	1,362
Other	341	784
Net cash used in investing activities	(12,994)	(7,005)
Cash flows from financing activities
Principal payments on capital lease obligations	(101)	(163)
Proceeds from debt	30,000
Proceeds from stock options exercises	44
Issuance costs related to debt financings	(3,050)
Net (decrease) increase in parent company investment	(27,884)	16,770
Net cash (used in) provided by financing activities	(991)	16,607
Change in cash and cash equivalents	(15,946)	18,143
Cash and cash equivalents, beginning of period	66,833	40,593
Cash and cash equivalents, end of period	50,887	58,736
Supplemental Cash Flow Information [Abstract]
Warrants issued in connection with debt	4,441
Cash paid for interest	$ 432

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Business Segments (Tables)

9 Months Ended

Sep. 30, 2014

Segment Reporting [Abstract]

Schedule of revenue derived from segments

Revenue derived from our Domain name services and Aftermarket and other service offering is as follows (in thousands):

	Three months ended				Nine months ended
	September 30,				September 30,
	2014		2013		2014		2013
Domain name services	$	41,332	$	36,034	$	118,432	$	104,366
Aftermarket and other		7,442		9,472		21,583		35,254
Total revenue	$	48,774	$	45,506	$	140,015	$	139,620

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Other Assets (Details) (USD $)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013	Oct. 31, 2014
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Payments made for gTLD applications			$ 19,500,000		$ 3,900,000
Gain on gTLD application withdrawals, net	8,558,000	1,336,000	14,303,000	2,565,000
Restricted cash and cash equivalents	1,200,000		1,200,000		900,000
Restricted cash restriction released						$ 1,200,000

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Fair Value Of Financial Instruments (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended	9 Months Ended	12 Months Ended
	Mar. 31, 2013	Sep. 30, 2014	Dec. 31, 2013
Fair Value Disclosures [Abstract]
Unrealized gains on marketable securities			$ 0.9
Reclassification of unrealized gain on marketable securities	0.9
Total realized gain on sale of marketable securities		$ 1.4

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Balance Sheets (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Current assets
Cash and cash equivalents	$ 50,887	$ 66,833
Accounts receivable	19,378	9,176
Prepaid expenses and other current assets	6,006	4,395
Deferred registration costs	73,491	66,273
Total current assets	149,762	146,677
Deferred registration costs, less current portion	14,309	12,514
Property and equipment, net	11,213	14,456
Intangible assets, net	22,049	15,268
Goodwill	103,042	103,042
Deferred tax assets	8,076	6,314
Deposits for gTLD applications	25,765	21,252
Other assets	4,731	1,998
Total assets	338,947	321,521
Current liabilities
Accounts payable	7,723	7,585
Accrued expenses and other current liabilities	20,482	18,787
Debt	1,125
Deferred tax liabilities	26,642	24,157
Deferred revenue	92,486	80,999
Total current liabilities	148,458	131,528
Deferred revenue, less current portion	18,760	16,544
Credit facility	24,573
Other liabilities	1,052	693
Total liabilities	192,843	148,765
Commitments and contingencies (Note 7)
Stockholders' equity
Shares issued and outstanding: 18,487 and 0	2
Shares issued and outstanding: 0 and 0
Additional paid in capital	140,426
Accumulated other comprehensive income		577
Retained Earnings (Accumulated Deficit)	5,676
Parent company investment		172,179
Total stockholders' equity	146,104	172,756
Total liabilities and stockholders' equity	$ 338,947	$ 321,521

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Commitments and Contingencies (Details) (USD $)		0 Months Ended
	Sep. 30, 2014 Letter of credit subfacility	Aug. 06, 2014 Tennenbaum Capital Partners LLC Term loan	Aug. 06, 2014 Tennenbaum Capital Partners LLC Term loan
Leases and Letters of Credit
Letters of credit outstanding	$ 11,000,000
Debt instrument amount			30,000,000
Debt Instrument, Periodic Payment		$ 375,000

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Statements of Comprehensive Loss (Parenthetical) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014
Statement of Comprehensive Income [Abstract]
Tax expense of realized gain on available for sale securities	$ 329

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Company Background and Basis of Presentation (Details) (USD $)	0 Months Ended	9 Months Ended
	Aug. 01, 2014	Sep. 30, 2014 item	Aug. 01, 2014	Jul. 31, 2014	Dec. 31, 2013	Feb. 28, 2013 item
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of publicly traded entities after spin-off						2
Number of classes of common stock		1
Preferred stock, shares outstanding		0			0
Authorized capital stock (in shares)			120,000,000
Common stock shares authorized (in shares)		100,000	100,000,000		0
Common stock par value (in dollars per share)		$ 0.0001	$ 0.0001	$ 0.0001	$ 0.0001
Preferred stock authorized (in shares)		20,000	20,000,000		0
Preferred stock, par value (in dollars per share)		$ 0.0001	$ 0.0001	$ 0.0001	$ 0.0001
Shares issued		18,487	18,400,000	1,000	18,487
Shares outstanding		0	18,400,000	1,000	0
Separation conversion ratio - one share of Rightside common stock for every five shares of Demand Media	0.20
Duration of the transition services agreement		18 months

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Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2014

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

14.  Fair Value of Financial Instruments

Fair value represents the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. We measure our financial assets and liabilities in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value.

· Level 1—valuations for assets and liabilities traded in active exchange markets, or interest in open‑end mutual funds that allow a company to sell its ownership interest back at net asset value on a daily basis. Valuations are obtained from readily available pricing sources for market transactions involving identical assets, liabilities or funds.

· Level 2—valuations for assets and liabilities traded in less active dealer, or broker markets, such as quoted prices for similar assets or liabilities or quoted prices in markets that are not active. Level 2 includes U.S. Treasury, U.S. government and agency debt securities, and certain corporate obligations. Valuations are usually obtained from third‑party pricing services for identical or comparable assets or liabilities.

· Level 3—valuations for assets and liabilities that are derived from other valuation methodologies, such as option pricing models, discounted cash flow models and similar techniques, and not based on market exchange, dealer, or broker traded transactions. Level 3 valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets or liabilities.

In determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and consider counterparty credit risk in our assessment of fair value.

We chose not to elect the fair value option for our financial assets and liabilities that had not been previously carried at fair value. Therefore, material financial assets and liabilities not carried at fair value, such as trade accounts receivable, trade payables and debt, are reported at their carrying values.

The carrying amounts of our financial instruments, including cash and cash equivalents, accounts receivable, receivables from domain name registries, registry deposits, restricted cash, accounts payable, debt, accrued liabilities and customer deposits approximate fair value because of their short maturities. Our investments in marketable securities are recorded at fair value. Certain assets, including equity investments, investments held at cost, goodwill and intangible assets are also subject to measurement at fair value on a nonrecurring basis, if they are deemed to be impaired as the result of an impairment review.

The cost of marketable securities sold is based upon the specific identification method and any realized gains or losses on the sale of investments are reflected as a component of other income or expense. For the year ended December 31, 2013, unrealized gain on marketable securities was $0.9 million. During the first quarter 2013, we sold all of our marketable securities, resulting in a reclassification of $0.9 million of unrealized gain on marketable securities from accumulated other comprehensive income to other (expense)income, net. The sale of our marketable securities resulted in total realized gains of $1.4 million, which are included in other income (expense), net.

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Property and Equipment (Details) (USD $)	3 Months Ended			9 Months Ended
	Sep. 30, 2014	Mar. 31, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 37,273,000			$ 37,273,000		$ 40,779,000
Less accumulated depreciation	(26,060,000)			(26,060,000)		(26,323,000)
Property and equipment, net	11,213,000			11,213,000		14,456,000
Accelerated Depreciation included in the depreciation and software amortization expense		800,000
Depreciation and amortization	1,689,000		1,689,000	6,030,000	4,961,000
Service costs
Property, Plant and Equipment [Line Items]
Depreciation and amortization	1,236,000		1,341,000	4,435,000	3,984,000
Sales and marketing
Property, Plant and Equipment [Line Items]
Depreciation and amortization	8,000		23,000	43,000	76,000
Product development
Property, Plant and Equipment [Line Items]
Depreciation and amortization	28,000		41,000	110,000	133,000
General and administrative
Property, Plant and Equipment [Line Items]
Depreciation and amortization	417,000		284,000	1,442,000	768,000
Computers and other equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	15,772,000			15,772,000		19,180,000
Purchased and internally developed software
Property, Plant and Equipment [Line Items]
Property and equipment, gross	19,266,000			19,266,000		19,546,000
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Property and equipment, gross	906,000			906,000		775,000
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 1,329,000			$ 1,329,000		$ 1,278,000

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Subsequent Events

9 Months Ended

Sep. 30, 2014

Subsequent Events [Abstract]

Subsequent Events

16. Subsequent Events

Namecheap Senior Unsecured Promissory Note Receivable

In October 2014, we entered into an agreement with Namecheap, Inc. (“Namecheap”), whereby Namecheap issued a Senior Unsecured Promissory Note (the “Note”) to us for $2.5 million that accrues interest at a rate determined in part by reference to the six-month LIBOR rate. Namecheap may use the proceeds from the Note for general corporate purposes. Once the Note has been repaid by Namecheap, no portion of the Note may be reborrowed.

The Note matures on December 31, 2014, and may be extended by Namecheap up to one additional year for a maturity date through December 31, 2015, if certain conditions are met. The Note is unsecured, but we shall have a first priority lien if Namecheap proposes to raise new secured debt in excess of an agreed minimum amount. The Note is guaranteed on a senior basis by each domestic subsidiary of Namecheap.

gTLD Application Withdrawal Gain

During October 2014 we recorded a gain on other assets of $7 million due to payments received in exchange for the withdrawals of our interest in certain gTLD applications.

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Statement of Equity (USD $) In Thousands	Parent company investment	Common stock	Additional paid-in capital	Retained earnings	Accumulated other comprehensive income (loss)	Total
Balance at the beginning of the period at Dec. 31, 2013	$ 172,179				$ 577	$ 172,756
Realized gain on available for sale securities					(577)	(577)
Net loss prior to spin-off	(8,990)					(8,990)
Net decrease in parent company investment	(28,045)					(28,045)
Capitalization at spin-off	(135,144)	2	135,142
Capitalization at Spin-off (in shares)		18,413
Balance at the end of the period at Aug. 01, 2014		2	135,142			135,144
Balance at the end of the period (in shares) at Aug. 01, 2014		18,413
Stock option exercises and vesting of restricted stock units			44			44
Stock option exercises and vesting of restricted stock units (in shares)		74
Stock warrants issued			4,441			4,441
Stock-based compensation			799			799
Net income after spin-off				5,676		5,676
Balance at the end of the period at Sep. 30, 2014		$ 2	$ 140,426	$ 5,676		$ 146,104
Balance at the end of the period (in shares) at Sep. 30, 2014		18,487

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Balance Sheets (Parenthetical) (USD $)	Sep. 30, 2014	Dec. 31, 2013
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, authorized shares	100,000	0
Common stock, shares issued	18,487	18,487
Common stock, shares outstanding	0	0
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	20,000	0
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0

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Income Taxes

9 Months Ended

Sep. 30, 2014

Income Tax Disclosure [Abstract]

Income Taxes

9.  Income Taxes

Our effective tax rate differs from the statutory rate primarily as a result of state taxes and nondeductible stock option expenses. The effective tax rate was (64.6%) for the three months ended September 30, 2014, and 33.2% for the nine months ended September 30, 2014, compared to 34.8% for the three months ended September 30, 2013, and 27.9% for the nine months ended September 30, 2013.

We recorded an income tax benefit of $1.6 million during the three months ended September 30, 2014, compared to an income tax benefit of $1.4 million during the same period in 2013. The increase was primarily due to increased book losses from our domestic operations during the period, which were not offset by books gains in our international operations.  

We recorded an income tax benefit of $1.6 million during the nine months ended September 30, 2014, compared to an income tax benefit of $1.9million during the same period in 2013, representing a decreased benefit of $0.3 million. The decreased benefit was primarily due to the reversal of deferred tax assets as a result of cancelled stock options in the 2014 periods as compared to the 2013 periods.

We are subject to the accounting guidance for uncertain income tax positions. We believe that our income tax positions and deductions will be sustained on audit and do not anticipate any adjustments that will result in a material adverse effect on our financial condition, results of operations, or cash flow.

Our policy for recording interest and penalties associated with audits and uncertain tax positions is to record such items as a component of income tax expense, and amounts recognized to date are insignificant. No uncertain income tax positions were recorded during the three or nine months ended September 30, 2014 or 2013, and we do not expect our uncertain tax position to change materially during the next 12 months. We file a U.S. federal and many state tax returns as well as tax returns in multiple foreign jurisdictions. All tax years since our incorporation remain subject to examination by the Internal Revenue Service and various state authorities.

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Document and Entity Information	9 Months Ended
	Sep. 30, 2014	Nov. 10, 2014
Document And Entity Information Abstract
Entity Registrant Name	RIGHTSIDE GROUP, LTD.
Entity Central Index Key	0001589094
Document Type	10-Q
Document Period End Date	Sep. 30, 2014
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		18,492,644
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q3

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Employee Benefit Plan

9 Months Ended

Sep. 30, 2014

Compensation and Retirement Disclosure [Abstract]

Employee Benefit Plan

10.  Employee Benefit Plan

We have a defined contribution plan under Section 401(k) of the Internal Revenue Code (the “401(k) Plan”) covering all our full‑time employees who meet certain eligibility requirements. Eligible employees may defer up to 90% of their pre‑tax eligible compensation, up to the annual maximum allowed by the Internal Revenue Service. Effective January 1, 2013, we began matching a portion of the employee contributions under the 401(k) Plan up to a defined maximum. Our contributions to the 401(k) Plan were $0.2 million, and $0.1 millionfor the three months ended September 30, 2014 and 2013, and $0.5 million and $0.4 million for the nine months ended September 30, 2014 and 2013.

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Statements of Operations (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Income Statement [Abstract]
Revenue	$ 48,774	$ 45,506	$ 140,015	$ 139,620
Service costs (Exclusive of amortization of intangible assets shown separately below)	41,550	37,232	119,612	108,661
Sales and marketing	2,239	2,426	7,210	7,790
Product development	2,667	2,620	9,592	7,865
General and administrative	5,690	6,590	17,869	18,639
Amortization of intangible assets	1,931	1,877	5,530	6,093
Gain on other assets, net	(8,558)	(1,336)	(14,303)	(2,565)
Interest expense	701		701
Other expense (income), net	65	25	(1,232)	44
Income (loss) before income taxes	2,489	(3,928)	(4,964)	(6,907)
Income tax benefit	1,608	1,366	1,650	1,930
Net income (loss)	$ 4,097	$ (2,562)	$ (3,314)	$ (4,977)
Basic (in earnings per share)	$ 0.22	$ (0.14)	$ (0.18)	$ (0.27)
Diluted (in earnings per share)	$ 0.22	$ (0.14)	$ (0.18)	$ (0.27)
Weighted average shares outstanding, basic	18,444	18,413	18,424	18,413
Weighted average shares outstanding, diluted	18,488	18,413	18,424	18,413

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Intangible Assets

9 Months Ended

Sep. 30, 2014

Intangible Assets, Net (Excluding Goodwill) [Abstract]

Intangible Assets

4.  Intangible Assets

Intangible assets consisted of the following (in thousands):

	September 30, 2014
	Gross
	carrying		Accumulated
	amount		amortization		Net
Owned website names	$	17,204	$	(11,271)	$	5,933
Customer relationships		20,842		(17,938)		2,904
Technology		7,954		(7,907)		47
Non-compete agreements		207		(71)		136
Trade names		5,468		(2,086)		3,382
gTLDs		10,129		(482)		9,647
	$	61,804	$	(39,755)	$	22,049

	December 31, 2013
	Gross
	carrying		Accumulated
	amount		amortization		Net
Owned website names	$	18,580	$	(11,534)	$	7,046
Customer relationships		20,976		(17,119)		3,857
Technology		7,990		(7,896)		94
Non-compete agreements		207		(42)		165
Trade names		5,468		(1,743)		3,725
gTLDs		381		-		381
	$	53,602	$	(38,334)	$	15,268

Identifiable finite‑lived intangible assets are amortized on a straight‑line basis over their estimated useful lives commencing on the date that the asset is available for its intended use.

Amortization expense by classification is shown below (in thousands):

	Three months ended				Nine months ended
	September 30,				September 30,
	2014		2013		2014		2013
Service costs	$	1,498	$	1,337	$	4,221	$	3,955
Sales and marketing		323		466		924		1,922
Product development		5		5		14		14
General and administrative		105		69		371		202
Total amortization	$	1,931	$	1,877	$	5,530	$	6,093

Estimated future amortization expense related to intangible assets held at September 30, 2014 (in thousands):

Years Ending December 31,		Amount
2014 (October 1, 2014, to December 31, 2014)	$	1,883
2015		5,162
2016		3,380
2017		2,052
2018		1,897
Thereafter		7,675
Total	$	22,049

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Property and Equipment

9 Months Ended

Sep. 30, 2014

Property, Plant and Equipment [Abstract]

Property and Equipment

3.  Property and Equipment

Property and equipment consisted of the following (in thousands):

		September 30,		December 31,
		2014		2013
Computers and other related equipment	$	15,772	$	19,180
Purchased and internally developed software		19,266		19,546
Furniture and fixtures		906		775
Leasehold improvements		1,329		1,278
Property and equipment, gross		37,273		40,779
Less accumulated depreciation		(26,060)		(26,323)
Property and equipment, net	$	11,213	$	14,456

Depreciation and software amortization expense, including the acceleration of depreciation, as a result of the shortening of the estimated useful lives for certain assets of $0.8 million in the first quarter of 2014, is shown by classification below (in thousands):

		Three months ended				Nine months ended
		September 30,				September 30,
		2014		2013		2014		2013
Service costs	$	1,236	$	1,341	$	4,435	$	3,984
Sales and marketing		8		23		43		76
Product development		28		41		110		133
General and administrative		417		284		1,442		768
Total depreciation and amortization	$	1,689	$	1,689	$	6,030	$	4,961

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Earnings (loss) Per Share

9 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

Earnings (loss) per share

15. Earnings (loss) per share

Basic and diluted earnings (loss) per share were calculated using the following (in thousands, except per share amounts):

	Three months ended				Nine months ended
	September 30,				September 30,
	2014		2013		2014		2013
Net income (loss)	$	4,097	$	(2,562)	$	(3,314)	$	(4,977)
Weighted average number of shares outstanding:
Basic		18,444		18,413		18,424		18,413
Dilutive effect of stock-based equity awards		44		0		0		0
Dilutive effect of warrants		0		0		0		0
Diluted		18,488		18,413		18,424		18,413
Net income (loss) per share attributable to common stockholders
Basic	$	0.22	$	(0.14)	$	(0.18)	$	(0.27)
Diluted	$	0.22	$	(0.14)	$	(0.18)	$	(0.27)

On August 1, 2014, the 1,000 shares of Rightside common stock, par value $0.0001 per share, issued and outstanding immediately prior to the separation from Demand Media, Inc. were automatically reclassified as and became 18.4 million shares of common stock, par value $0.0001 per share. Basic and diluted earnings per share and the weighted average number of shares outstanding were retrospectively updated to reflect thesetransactions.

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Stock based Compensation Expense

9 Months Ended

Sep. 30, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock based Compensation Expense

11.  Stock‑based Compensation

Our stock-based award plan grants restricted stock, stock options, stock bonuses, stock appreciation rights, and restricted stock units (“RSUs”).

On August 1, 2014, as part of the spin-off and the resulting conversion of equity awards, we had 1.1 million RSUs and options outstanding. Stock option holders received one Rightside stock option for every five Demand Media stock options.  Holders of RSUs received 1.71 Rightside RSUs for every five Demand Media RSUs.

In August 2014, we granted 0.4 million RSUs related to new employee, executive and board of director grants. The stock-based award information presented in this note has been updated to reflect the conversion of equity awards that occurred on August 1, 2014.

As of September 30, 2014, we had 2.6 million shares of common stock reserved for future grants under our equity plan.  Our stock-based awards generally vest over four years and are subject to the employee’s continued employment with us.  We also estimate forfeiture rates at the time of grants and revise the estimates in subsequent periods if actual forfeitures differ from our estimates. We record share-based compensation net of estimated forfeitures.

The following table summarizes the stock‑based compensation expense related to stock‑based awards that has been included in the following line items within the statements of operations for each of the periods presented (in thousands):

	Three months ended				Nine months ended
	September 30,				September 30,
		2014		2013		2014		2013
Service costs	$	90	$	117	$	272	$	341
Sales and marketing		149		421		992		1,253
Product development		202		389		781		869
General and administrative		715		1,577		2,381		4,808
Total stock-based compensation expense	$	1,156	$	2,504	$	4,426	$	7,271

The following table presents our stock option activity for the nine months ended September 30, 2014, recast to reflect the conversion of five Demand Media stock options to one Rightside stock option on August 1, 2014 (in thousands, except for per share amounts and contractual term):

	Shares		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding as of December 31, 2013		335	$	15.42		-	$	167
Exercised		(6)		7.88		-
Outstanding as of September 30, 2014		329		15.55		4.56		157
Exercisable as of September 30, 2014		329		15.55		4.56		157

The following table presents a summary of restricted stock unit award activity for the nine months ended September 30, 2014, recast to reflect the conversion of five Demand Media RSUs to 1.71 Rightside RSUs (in thousands, except for per share amounts):

	Shares		Weighted Average Share Value
Outstanding as of December 31, 2013		679	$	24.54
Granted		537		12.77
Vested		(106)		23.68
Cancelled		(48)		20.56
Outstanding as of September 30, 2014		1,062		18.82

As of September 30, 2014, we had $8.7 million of unrecognized stock-based compensation, net of estimated forfeitures, which is expected to be recognized over a weighted average period of 2.9 years.

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Debt

9 Months Ended

Sep. 30, 2014

Line of Credit Facility [Abstract]

Debt

7.  Debt

Silicon Valley Bank Credit Facility

In August 2014, we entered into a $30.0 million revolving credit facility (“SVB Credit Facility”) with Silicon Valley Bank (“SVB”). Under this facility we may repay and reborrow until the maturity date in August 2017. The SVB Credit Facility includes a letter of credit sub-limit of up to $15.0 million. 

The SVB Credit Facility provides us with the option to select the annual interest rate on borrowings in an amount equal to: (1) a base rate determined by reference to the highest of: (a) the prime rate; (b) 0.50% per annum above the federal funds effective rate; and (c) the Eurodollar base rate for an interest period of one month plus 1.00%, plus a margin ranging from 1.00% to 1.50%, depending on our consolidated senior leverage ratio (as determined under the SVB Credit Facility), or (2) a Eurodollar base rate determined by reference to LIBOR for the interest period equivalent to such borrowing adjusted for certain reserve requirements, plus a margin ranging from 2.00% to 2.50%, depending on our consolidated senior leverage ratio (as determined under the SVB Credit Facility).

We pay fees on the portion of the facility that is not drawn.  The unused fee is payable to SVB in arrears on a quarterly basis in an amount equal to 0.250% multiplied by the daily amount by which the aggregate commitments exceed the sum of the outstanding amount of loans and the outstanding amount of letter of credit obligations.

The SVB Credit Facility allows SVB to require mandatory prepayments of outstanding borrowings from amounts otherwise required to prepay term loans under the Tennenbaum Credit Facility.

The SVB Credit Facility contains customary representations and warranties, events of default and affirmative and negative covenants. This facility has financial covenants, including a requirement that we maintain a minimum consolidated fixed charge coverage ratio, a maximum consolidated senior leverage ratio, a maximum consolidated net leverage ratio, and minimum liquidity.  As of September 30, 2014, we were in compliance with the covenants under the SVB Credit Facility.

We incurred $0.5 million in fees to establish this facility that we have capitalized on our balance sheet as deferred financing costs, which we will amortize on a straight-line basis into interest expense over the term of the SVB Credit Facility. As of September 30, 2014, we had letters of credit with a face amount of $11.0 million that were issued under the SVB Credit Facility.  We have made no other borrowings under this facility.

Tennenbaum Credit Facility

In August 2014, we entered into a $30.0 million term loan credit facility with certain funds managed by Tennenbaum Capital Partners LLC (the “Tennenbaum Credit Facility”). Under this facility, interest is based on a rate per year equal to LIBOR plus 8.75%. Interest on the term loans is payable quarterly, beginning September 30, 2014. Quarterly principal payments of $375,000 on the term loan begin March 31, 2015. Once repaid, the term loans may not be reborrowed. All amounts outstanding under the facility are due and payable in full on the maturity date in August 2019. We may prepay any principal amount outstanding on the term loan plus a premium of 4.00% (if prepaid in the first year), 2.50% (second year), 1.00% (third year), and 0.00% thereafter, plus customary “breakage” costs with respect to LIBOR loans.

Under this facility we are subject to mandatory prepayments from 50% of excess cash flow, which is paid on the first of the following to occur:  (1) maturity, termination or refinancing of the SVB Credit Facility or the acceleration and termination of the SVB Credit Facility, or (2) from the excess cash flow as of December 31, 2014, and each subsequent fiscal year thereafter.  In addition, mandatory prepayments, to the extent not used to prepay loans and cash collateralize letters of credit and permanently reduce the commitments under the SVB Credit Facility, are required from certain asset sales and insurance and condemnation events, subject to customary reinvestment rights. Mandatory prepayments are also required from the issuances of certain indebtedness. These mandatory prepayments are subject to a prepayment premium that is the same as for voluntary prepayments.

The Tennenbaum Credit Facility contains financial covenants and customary representations and warranties, events of default and affirmative and negative covenants. As of September 30, 2014, we were in compliance with the covenants under the Tennenbaum Credit Facility.

In connection with the Tennenbaum Credit Facility, we issued warrants to purchase up to an aggregate of 997,710 shares of common stock. The warrants have an exercise price of $15.05 per share and will be exercisable in accordance with their terms at any time on or after February 6, 2015, through August 6, 2019. The warrants contain a “cashless exercise” feature that allows the warrant holders to exercise such warrants by surrendering a number of shares underlying the portion of the warrant being exercised with a fair market value equal to the aggregate exercise price payable to us.

We estimated the fair value of the warrants by using the Black-Scholes Option Pricing Method ("Black-Scholes"). Under the Black-Scholes approach our key assumptions included the following: stock price of $14.49, strike price of $15.05, volatility of 42.44%, risk-free rate of 1.67%, dividend yield of 0% and 5 year term. We used the resulting fair value to allocate the proceeds from the Tennenbaum Credit Facility between liability and equity.

Since the warrants are classified as equity, we allocated the proceeds from the debt and warrants using the relative fair value method.  Under this method we allocated $4.4 million to the warrants which we recorded to equity, with the remaining portion assigned to the liability component.  The excess of the principal amount of the credit facility over its carrying value of $25.6 million represents a note discount that we will amortize to interest expense over the term of the Tennenbaum Credit Facility.

We incurred $3.2 million in fees to establish the Tennenbaum Credit Facility that we have capitalized on our balance sheet as deferred financing costs, which we will amortize on an effective interest method into interest expense over the term of the SVB Credit Facility.

We estimated the fair value of the Tennenbaum Credit Facility using a discounted cash flow model with Level 3 inputs.  Under this approach, we estimated the fair value to approximate its carrying value of $25.7 million as of September 30, 2014.

The following table presents our debt outstanding on the Tennenbaum Credit Facility (in thousands):

	September 30, 2014
Principal	30,000
Unamortized note discount	(4,302)
Carrying value	25,698

The following table presents the interest expense on the Tennenbaum Credit Facility (in thousands):

	Three months ended						Nine months ended
	September 30,						September 30,
	2014			2013			2014			2013
Contractual interest expense	$	424		$	-		$	424		$	-
Amortization of issuance costs		100			-			100			-
Amortization of note discount		138			-			138			-
Total	$	662		$	-		$	662		$	-
Effective interest rate		16.4	%		-	%		16.4	%		-

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Other Assets

9 Months Ended

Sep. 30, 2014

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Other Assets

5.  Other Assets

Other long‑term assets and gTLD deposits consisted of the following (in thousands):

	September 30,		December 31,
	2014		2013
Deposits for gTLD applications	$	25,765	$	21,252
Other		4,731		1,998
Other assets	$	30,496	$	23,250

We paid $19.5 million during the nine months ended September 30, 2014, and $3.9 million during the year ended December 31, 2013, for certain gTLD applications under the New gTLD Program. Payments for gTLD applications represent amounts paid directly to ICANN or third parties in the pursuit of gTLD operator rights, the majority of which was paid to Donuts Inc. as described in Note 8— Commitments and Contingencies. These deposits would be applied to the purchase of the gTLD if we are awarded the gTLD operator rights or these deposits may be returned to us if we withdraw our interest in the gTLD application.

The net gain related to the withdrawals of our interest in certain gTLD applications was $8.6 million for the three months ended September 30, 2014, and $14.3 million for the nine months ended September 30, 2014. The net gain related to the withdrawals of our interest in certain gTLD applications was $1.3 million for the three months ended September 30, 2013, and $2.6 million for the nine month periods ended September 30, 2013. We recorded these gains in gain on other assets, net on the statements of operations.

Other assets include $1.2 million as of September 30, 2014, and $0.9 million as of December 31, 2013, of restricted cash comprising a collateralized letter of credit connected with the SVB Credit Facility. Subsequent to September 30, 2014, the restriction was released and we reclassified the $1.2 million to cash and cash equivalents. .  

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Other Balance Sheet Items

9 Months Ended

Sep. 30, 2014

Balance Sheet Related Disclosures [Abstract]

Other Balance Sheet Items

6.  Other Balance Sheet Items

Accounts receivable consisted of the following (in thousands):

	September 30,		December 31,
	2014		2013
Accounts receivable—trade	$	6,377	$	5,515
gTLD deposit receivable		9,080		-
Receivables from registries		3,921		3,661
Accounts receivable	$	19,378	$	9,176

Based on the nature of our business transactions, we do not have an allowance for uncollectible receivables.

Accrued expenses and other current liabilities consisted of the following (in thousands):

	September 30,		December 31,
	2014		2013
Customer deposits	$	8,116	$	7,065
Accrued payroll and related items		2,980		3,052
Commissions payable		2,189		2,209
Domain owners’ royalties payable		1,262		1,193
Other		5,935		5,268
Accrued expenses and other current liabilities	$	20,482	$	18,787

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

8.  Commitments and Contingencies

Leases

We conduct our operations utilizing leased office facilities in various locations and lease certain equipment under non‑cancelable operating and capital leases. Our leases expire between August 2015 and April 2019. In February 2014, we executed the First Amendment to Lease to obtain additional space for our headquarters in Kirkland, Washington and to extend the lease to April 2019. 

Letters of Credit

We have issued letters of credit totaling $11.0 million under our SVB Credit Facility as of September 30, 2014.

Credit Facilities

In August 2014, we entered into the $30.0 million Tennenbaum Credit Facility, which matures in August 2019. The principal amount of the term loans is scheduled to be repaid in quarterly installments of $375,000 beginning March 31, 2015. Once repaid, term loans may not be reborrowed. All amounts outstanding under the facility are due and payable in full on the maturity date in August 2019.

Litigation

From time to time, we are party to various litigation matters incidental to the conduct of our business. There is no pending or threatened legal proceeding to which we are a party that, in our belief, is likely to have a material adverse effect on our future financial results.

Taxes

From time to time, various federal, state and other jurisdictional tax authorities undertake review of us and our filings. In evaluating the exposure associated with various tax filing positions, we accrue charges for possible exposures. We believe any adjustments that may ultimately be required as a result of any of these reviews will not be material to our financial statements.

Domain Name Agreement

On April 1, 2011, we entered into an agreement with a customer to provide domain name registration services and manage certain domain names owned and operated by the customer (the “Domain Agreement”). In December 2013, we amended the Domain Agreement (as amended, the “Amended Domain Agreement”). The term of the Amended Domain Agreement expires on December 31, 2014, but will automatically renew for an additional one‑year period unless terminated by either party. Pursuant to the Amended Domain Agreement, we are committed to purchase approximately $0.2 million of expired domain names every calendar quarter over the remaining term of the agreement.

Donuts Agreement

As part of our initiative to pursue the acquisition of gTLD operator rights, we have entered into a gTLD acquisition agreement (“gTLD Agreement”) with Donuts Inc. (“Donuts”). The gTLD Agreement provides us with rights to acquire the operating and economic rights to certain gTLDs. These rights are shared equally with Donuts and are associated with specific gTLDs (“Covered gTLDs”) for which Donuts is the applicant under the New gTLD Program. We have the right, but not the obligation, to make further deposits with Donuts in the pursuit of acquisitions of Covered gTLDs, for example as part of the ICANN auction process. The operating and economic rights for each Covered gTLD will be determined through a process whereby we and Donuts each select gTLDs from the pool of Covered gTLDs, with the number of selections available to each party based upon the proportion of the total acquisition price of all Covered gTLDs that they funded. Gains on sale of our interest in Covered gTLDs will be recognized when realized, while losses will be recognized when deemed probable. Separately, we entered into an agreement to provide certain back‑end registry services for gTLD operator rights owned by Donuts for a period of five years commencing from the launch of Donut’s first gTLD. Outside of the collaboration, we are not an investor in Donuts nor involved in any joint venture with Donuts or its affiliates.

Indemnifications Arrangements

In the normal course of business, we have made certain indemnities, commitments and guarantees under which we may be required to make payments in relation to certain transactions. Those indemnities include intellectual property indemnities to our customers, indemnities to our directors and officers to the maximum extent permitted under the laws of the State of Delaware and indemnities related to our lease agreements. In addition, our advertiser and distribution partner agreements contain certain indemnification provisions, which are generally consistent with those prevalent in our industry. We have not incurred significant obligations under indemnification provisions historically and do not expect to incur significant obligations in the future. Accordingly, we have not recorded any liability for these indemnities, commitments and guarantees in the balance sheets.

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Earnings (loss) Per Share (Tables)

9 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

Schedule of earnings (loss) per share

Basic and diluted earnings (loss) per share were calculated using the following (in thousands, except per share amounts):

	Three months ended				Nine months ended
	September 30,				September 30,
	2014		2013		2014		2013
Net income (loss)	$	4,097	$	(2,562)	$	(3,314)	$	(4,977)
Weighted average number of shares outstanding:
Basic		18,444		18,413		18,424		18,413
Dilutive effect of stock-based equity awards		44		0		0		0
Dilutive effect of warrants		0		0		0		0
Diluted		18,488		18,413		18,424		18,413
Net income (loss) per share attributable to common stockholders
Basic	$	0.22	$	(0.14)	$	(0.18)	$	(0.27)
Diluted	$	0.22	$	(0.14)	$	(0.18)	$	(0.27)

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Business Segments (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014 segment	Sep. 30, 2013
Business Segments
Number of Operating Segments			1
Total Revenue	$ 48,774	$ 45,506	$ 140,015	$ 139,620
Domain name services
Business Segments
Total Revenue	41,332	36,034	118,432	104,366
Aftermarket and other
Business Segments
Total Revenue	$ 7,442	$ 9,472	$ 21,583	$ 35,254

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Transactions with Related Parties and Parent Company Investment

9 Months Ended

Sep. 30, 2014

Related Party Transactions [Abstract]

Transactions with Related Parties and Parent Company Investment

13.  Transactions with Related Parties and Parent Company Investment

Prior to the separation on August 1, 2014, our financial statements included direct costs of Rightside incurred by Demand Media on our behalf and an allocation of certain general corporate costs incurred by Demand Media. Direct costs include finance, legal, human resources, technology development, and other services and have been determined based on a direct basis when identifiable, with the remainder allocated on a pro rata basis calculated as a percentage of our revenue, headcount or expenses to Demand Media’s consolidated results. General corporate costs include, but are not limited to, executive oversight, accounting, internal audit, treasury, tax, and legal. The allocations of general corporate costs are based primarily on estimated time incurred and/or activities associated with us. Management believes the allocations of corporate costs from Demand Media are reasonable. Costs incurred by Demand Media to complete the spin‑off have not been allocated to us. However, the financial statements may not include all of the costs that would have been incurred had we been a stand‑alone company during the periods presented and may not reflect our financial position, results of operations and cash flows had we been a stand‑alone company during the periods presented.

Prior to the separation on August 1, 2014, we recorded the following costs incurred and allocated by Demand Media in our statements of operations as follows (in thousands):

	Three months ended				Nine months ended
	September 30,				September 30,
	2014		2013		2014		2013
Service costs	$	899	$	2,822	$	6,231	$	8,125
Sales and marketing		80		527		1,499		1,654
Product development		180		446		2,280		1,161
General and administration		1,758		5,189		11,500		15,079
Total allocated expenses	$	2,917	$	8,984	$	21,510	$	26,019

The table above includes allocated stock‑based compensation of $0.1 million and $1.4 million for the three months ended September 30, 2014 and 2013, and $0.8 million and $4.4 million for the nine months ended September 30, 2014 and 2013, for the employees of Demand Media whose cost of services was partially allocated to us.

The table below presents the activity that comprises the decrease in parent company investment for the nine months ended September 30, 2014 (in thousands):

		Nine months ended
		September 30, 2014
Cash transfer to Demand Media, net	$	45,735
Stock based compensation from equity awards		(809)
Allocated expenses, assets and liabilities, net		(16,881)
Net decrease in parent company investment	$	28,045

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Property and Equipment (Tables)

9 Months Ended

Sep. 30, 2014

Property, Plant and Equipment [Abstract]

Schedule of property and equipment

Property and equipment consisted of the following (in thousands):

		September 30,		December 31,
		2014		2013
Computers and other related equipment	$	15,772	$	19,180
Purchased and internally developed software		19,266		19,546
Furniture and fixtures		906		775
Leasehold improvements		1,329		1,278
Property and equipment, gross		37,273		40,779
Less accumulated depreciation		(26,060)		(26,323)
Property and equipment, net	$	11,213	$	14,456

Depreciation expense and amortization expense by classification

Depreciation and software amortization expense, including the acceleration of depreciation, as a result of the shortening of the estimated useful lives for certain assets of $0.8 million in the first quarter of 2014, is shown by classification below (in thousands):

		Three months ended				Nine months ended
		September 30,				September 30,
		2014		2013		2014		2013
Service costs	$	1,236	$	1,341	$	4,435	$	3,984
Sales and marketing		8		23		43		76
Product development		28		41		110		133
General and administrative		417		284		1,442		768
Total depreciation and amortization	$	1,689	$	1,689	$	6,030	$	4,961

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Stock Based Compensation Expense (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended				0 Months Ended		1 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014 Service costs	Sep. 30, 2013 Service costs	Sep. 30, 2014 Service costs	Sep. 30, 2013 Service costs	Sep. 30, 2014 Sales and marketing	Sep. 30, 2013 Sales and marketing	Sep. 30, 2014 Sales and marketing	Sep. 30, 2013 Sales and marketing	Sep. 30, 2014 Product development	Sep. 30, 2013 Product development	Sep. 30, 2014 Product development	Sep. 30, 2013 Product development	Sep. 30, 2014 General and administrative	Sep. 30, 2013 General and administrative	Sep. 30, 2014 General and administrative	Sep. 30, 2013 General and administrative	Sep. 30, 2014 Equity Plan [Member]	Aug. 31, 2014 Equity Plan [Member]	Aug. 01, 2014 Equity Plan [Member] Stock Option	Aug. 01, 2014 Equity Plan [Member] Restricted stock units	Aug. 31, 2014 Equity Plan [Member] Restricted stock units
Stock-based Compensation Expense
Restricted stock units and options outstanding																						1,100,000
Option issued ratio																							0.2
RSU's issued ratio																								0.342
Granted																									400,000
Common stock reserved for future grants																					2,600,000
Shared based compensation vesting period																					4 years
Allocated Share-based Compensation Expense	$ 1,156	$ 2,504	$ 4,426	$ 7,271	$ 90	$ 117	$ 272	$ 341	$ 149	$ 421	$ 992	$ 1,253	$ 202	$ 389	$ 781	$ 869	$ 715	$ 1,577	$ 2,381	$ 4,808

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Other Balance Sheet Items (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Accounts receivable
Accounts receivable	$ 19,378	$ 9,176
Accounts receivable - trade
Accounts receivable
Accounts receivable	6,377	5,515
gTLD deposit receivable
Accounts receivable
Accounts receivable	9,080
Receivables from registries
Accounts receivable
Accounts receivable	$ 3,921	$ 3,661

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Statements of Comprehensive Income (Loss) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Statement of Comprehensive Income [Abstract]
Net loss	$ 4,097	$ (2,562)	$ (3,314)	$ (4,977)
Other comprehensive income (loss):
Realized gain on available for sale securities, net of tax expense of ($329)			(577)
Comprehensive income (loss)	$ 4,097	$ (2,562)	$ (3,891)	$ (4,977)

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2014

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2.  Summary of Significant Accounting Policies

Refer to our audited combined financial statements included in our Form 10 as filed with the SEC on July 14, 2014, for a complete discussion of all significant accounting policies.

Recently Adopted Accounting Guidance

In February 2013, the FASB issued ASU 2013-2, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income (ASU 2013-2), to improve the reporting of reclassifications out of accumulated other comprehensive income. ASU 2013-2 requires presentation, either on the face of the financial statements or in the notes, of amounts reclassified out of accumulated other comprehensive income by component and by net income line item. ASU 2013-2 is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2012. We adopted ASU 2013-2 in the first quarter of fiscal 2014. The adoption of ASU 2013-2 did not have a significant impact on our financial statements, but did require additional disclosures.

Recent Accounting Guidance Not Yet Adopted

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (ASU 2014-09). ASU 2014-09 outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The new model will require revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. The amendments in ASU 2014-09 are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period and early adoption is not permitted. The standard can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. We are currently assessing the impact that this updated standard will have on our financial statements and footnote disclosures.

In June 2014, the FASB issued ASU 2014-12, Compensation - Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide that a Performance Target Could be Achieved after the Requisite Service Period (ASU 2014-12), which requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant date fair value of the award. This update further clarifies that compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. We do not anticipate that the adoption of this standard will have a material impact on our financial statements.

In August 2014, the FASB issued ASU 2014-15 related to going concern. The new guidance explicitly requires that management assess an entity's ability to continue as a going concern and may require additional detailed disclosures. ASU 2014-15 is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted. We do not anticipate that the adoption of this standard will have a material impact on our financial statements.

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Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2014

Intangible Assets, Net (Excluding Goodwill) [Abstract]

Schedule of intangible assets

Intangible assets consisted of the following (in thousands):

	September 30, 2014
	Gross
	carrying		Accumulated
	amount		amortization		Net
Owned website names	$	17,204	$	(11,271)	$	5,933
Customer relationships		20,842		(17,938)		2,904
Technology		7,954		(7,907)		47
Non-compete agreements		207		(71)		136
Trade names		5,468		(2,086)		3,382
gTLDs		10,129		(482)		9,647
	$	61,804	$	(39,755)	$	22,049

	December 31, 2013
	Gross
	carrying		Accumulated
	amount		amortization		Net
Owned website names	$	18,580	$	(11,534)	$	7,046
Customer relationships		20,976		(17,119)		3,857
Technology		7,990		(7,896)		94
Non-compete agreements		207		(42)		165
Trade names		5,468		(1,743)		3,725
gTLDs		381		-		381
	$	53,602	$	(38,334)	$	15,268

Amortization expense by classification

Amortization expense by classification is shown below (in thousands):

	Three months ended				Nine months ended
	September 30,				September 30,
	2014		2013		2014		2013
Service costs	$	1,498	$	1,337	$	4,221	$	3,955
Sales and marketing		323		466		924		1,922
Product development		5		5		14		14
General and administrative		105		69		371		202
Total amortization	$	1,931	$	1,877	$	5,530	$	6,093

Estimated future amortization expense

Estimated future amortization expense related to intangible assets held at September 30, 2014 (in thousands):

Years Ending December 31,		Amount
2014 (October 1, 2014, to December 31, 2014)	$	1,883
2015		5,162
2016		3,380
2017		2,052
2018		1,897
Thereafter		7,675
Total	$	22,049

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Intangible Assets (Details 2) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Finite-Lived Intangible Assets, Net, Amortization Expense, Rolling Maturity [Abstract]
2014 (October 1, 2014 to December 31, 2014)	$ 1,883
2015	5,162
2016	3,380
2017	2,052
2018	1,897
Thereafter	7,675
Total	$ 22,049	$ 15,268

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Business Segments

9 Months Ended

Sep. 30, 2014

Segment Reporting [Abstract]

Business Segments

12.  Business Segments

We operate in one operating segment. Our chief operating decision maker (“CODM”) manages our operations on a combined basis for purposes of evaluating financial performance and allocating resources. The CODM reviews separate revenue information for our domain name services and aftermarket services. All other financial information is reviewed by the CODM on a combined basis. Our operations are located in the United States, Ireland, Canada, Australia and Cayman Islands. Revenue generated outside of the United States is not material for any of the periods presented.

Revenue derived from our Domain name services and Aftermarket and other service offering is as follows (in thousands):

	Three months ended				Nine months ended
	September 30,				September 30,
	2014		2013		2014		2013
Domain name services	$	41,332	$	36,034	$	118,432	$	104,366
Aftermarket and other		7,442		9,472		21,583		35,254
Total revenue	$	48,774	$	45,506	$	140,015	$	139,620