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<p class="MsoNormal"><span style="font-size:12.0pt;mso-fareast-language:EN-US"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-size:12.0pt">Alan, while it is certainly an open question whether ICANN will take any action in response to the announced sale of PIR, it doesn’t appear to be debateable whether or not selling PIR would constitute a “change
of control” under the .Org Registry Agreement. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt">Pursuant to Section 2.9(b) of the .org Registry Agreement:<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-left:36.0pt"><span style="font-size:12.0pt">“For the purposes of this Agreement…</span><span style="font-size:12.0pt;font-family:"Cambria",serif;color:black">“control” (including the terms “controlled by” and “under common
control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a person or entity, whether through the ownership of securities, as trustee or executor, by serving as an employee or
a member of a board of directors or equivalent governing body, by contract, by credit arrangement or otherwise.”</span><span style="font-size:12.0pt"><o:p></o:p></span></p>
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<p class="MsoNormal"><span style="mso-fareast-language:EN-US"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman",serif;mso-fareast-language:EN-US">ISOC clearly stated in its Press Release that “</span><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:#0C1C2C;background:white">Ethos
Capital will acquire PIR and all of its assets from the Internet Society”, and obviously such a sale wherein Ethos would take over PIR is a change of control, as understood by both Section 2.9(b) and as this term is widely understood in business and in law.
For example, this is how the Corporate Finance Institute defines a change of control:<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:#0C1C2C;background:white"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-left:36.0pt"><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:black;background:white">“In finance, a Change of Control occurs when there is a material change in the ownership of a company. The exact
criteria that determine such a change can vary and are defined by law and through contractual agreements. A change of control clause is often included in <a href="https://corporatefinanceinstitute.com/resources/templates/financial-modeling/debt-schedule/"><span style="color:windowtext;text-decoration:none">creditor
pacts</span></a> and executive employment agreements to protect <a href="https://corporatefinanceinstitute.com/resources/knowledge/accounting/stockholders-equity-guide/"><span style="color:windowtext;text-decoration:none">investors</span></a> and managers
from major changes in how the company is run.” (see : </span><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><a href="https://corporatefinanceinstitute.com/resources/knowledge/deals/change-of-control/"><span style="color:windowtext">https://corporatefinanceinstitute.com/resources/knowledge/deals/change-of-control/</span></a>)
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:13.5pt;font-family:"Segoe UI",sans-serif;color:#676767;background:white"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:black;background:white">Indeed the change of control provision in the .Org Registry Agreement was ostensibly included precisely to provide ICANN with protection in
the event that ISOC purported to sell the .Org registry, i.e. a change of control. Section 7.5, as you pointed out below, specifically prohibits any assignment of the agreement, and deems any direct or indirect “change of control” to be an assignment. The
Agreement does however, only enable ICANN to “reasonably” withhold its approval. In the circumstances, it would be eminently reasonable to withhold approval, given the facts that; a) this sale was apparently unknown at the time of the recent renewal of the
Registry Agreement which inter alia, removed price caps and imposed URS despite it not being a Consensus Policy; and b) selling the .Org registry to a private capital company would appear to be contrary to the original intention in awarding the .Org registry,
home of nonprofits, to ISOC.</span><span style="font-size:12.0pt;font-family:"Times New Roman",serif;background:white"><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman",serif;background:white"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:black;background:white">Zak Muscovitch</span><span style="font-size:12.0pt;font-family:"Times New Roman",serif;background:white"><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:black;background:white">General Counsel, ICA</span><span style="font-size:12.0pt;font-family:"Times New Roman",serif;background:white"><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:black;background:white">InternetCommerce.org</span><span style="font-size:12.0pt;font-family:"Times New Roman",serif;background:white"><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman",serif;background:white"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:#0C1C2C;background:white"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:#0C1C2C;background:white"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:#0C1C2C;background:white"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:16.0pt;font-family:"Helvetica",sans-serif;color:#0C1C2C;background:white"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="mso-fareast-language:EN-US"><o:p> </o:p></span></p>
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<p class="MsoNormal"><b><span lang="EN-US">From:</span></b><span lang="EN-US"> CPWG <cpwg-bounces@icann.org>
<b>On Behalf Of </b>Alan Greenberg<br>
<b>Sent:</b> November-16-19 12:54 PM<br>
<b>To:</b> lists@christopherwilkinson.eu; cpwg@icann.org<br>
<b>Subject:</b> Re: [CPWG] [registration-issues-wg] [GTLD-WG] Fwd: ISOC sells PIR<o:p></o:p></span></p>
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<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">The delegation and agreement is with PIR, not ISOC, and PIR will continue to exist.
<br>
<br>
However, the contract includes: <span style="color:blue">7.5 Change of Control; Assignment and Subcontracting. Except as set forth in this Section 7.5, neither party may assign any of its rights and obligations under this Agreement without the prior written
approval of the other party, which approval will not be unreasonably withheld. For purposes of this Section 7.5, a direct or indirect change of control of Registry Operator or any subcontracting arrangement that relates to any Critical Function (as identified
in Section 6 of Specification 10) for the TLD (a ?Material Subcontracting Arrangement?) shall be deemed an assignment.<br>
<br>
</span>Perhaps selling the entire PIR corporation could be construed as an "indirect change of control". I personally doubt that ICANN would invoke such an interpretation. Certainly it has not in the past when TLD corporations were sold.<br>
<br>
Alan<br>
<br>
At 16/11/2019 12:14 PM, <a href="mailto:lists@christopherwilkinson.eu">lists@christopherwilkinson.eu</a> wrote:<br>
<br>
<br>
<o:p></o:p></p>
<blockquote style="margin-top:5.0pt;margin-bottom:5.0pt">
<p class="MsoNormal">I would also query whether the delegation of .org to ISOC gave rise to ownership with a right to sell.<o:p></o:p></p>
</blockquote>
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