1
* Confidential treatment has been requested with respect to certain information
contained in this document. Confidential portions have been omitted from the
public filing and have been filed separately with the Securities and Exchange
Commission.
EXHIBIT 10.09
EXECUTION COPY CONFIDENTIAL
MANAGED SERVICES AGREEMENT
This Managed Services Agreement ("Agreement") is entered into this 19th day of
August, 1999 by Niku Corporation, a Delaware corporation with its principal
place of business at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
("NIKU"), and USinternetworking, Inc., a Delaware corporation with its principal
place of business at ▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("USi"), (also
"Party" or "Parties").
NIKU owns business application software that USi wishes to install on its
servers and, through remote access, make available to USi customers. This
Agreement and the Attachments hereto set forth the terms and conditions on which
NIKU will grant, and USi will receive and use, licenses regarding such software.
1. DEFINITIONS.
1.1 "Affiliate" means, with respect to either Party, any entity at a time
Controlling, Controlled by, or under common Control with, such Party. The term
"Control," "Controlling" and "Controlled" as used in this Agreement means the
legal, beneficial or equitable ownership, directly or indirectly, of more than
50% of the aggregate of all equity interest in such entity.
1.2 "Customer" means the entity or person to which USi provides the Services
Offering on agreed terms not less restrictive than, and not inconsistent with
this Agreement.
1.3 "Designated Facility" means Licensee's business facility identified in
Attachment A, which may be changed only with the prior written consent of an
authorized Niku officer.
1.4 "Documentation" means the published product specifications for the Licensed
Products, user manuals and other materials which describe the Licensed Products
features and use, in written or machine readable form.
1.5 "Lead" means a qualified prospect for a Services Offering. "Qualified" means
that (a) the prospect has expressed interest in an outsourcing solution for the
Licensed Product; and (b) NIKU has determined the prospect's interest and
capabilities to be suitable for a Services Offering.
1.6 "Licensed Product" means the object code version of the Niku software
described in Attachment A, and including Niku's Third-Party Suppliers' software
incorporated therein. "Licensed Product" does not mean code, media, or
documentation of USi or any third-party element within USi's portion of a
Services Offering.
1
2
1.7 "Maintenance" means the NIKU maintenance and support specified in Attachment
D.
1.8 "Marketing and Demonstration Materials" means Licensed Product brochures,
technical specification sheets, product guides, demonstration presentations,
graphics, pictures, drawings, screen layouts, text, icons, descriptions and
other marketing sales literature provided by NIKU to USi.
1.9 "Services Offering" means the solution based on Licensed Product, delivered
and administered by USi over its network. It includes: (a) connectivity between
the dedicated Customer server(s) hosted by USi, and the Internet; (b)
application hosting and management at USi's data center; (c) application backup
and recovery services; (d) implementation and integration services; (e) billing
for combined business service; and (f) customer support help desk as set forth
in Attachment B. It is limited to remote access, and does not involve the
distribution of software to Customers.
1.10 "Software Updates" means software program updates (including cumulative
releases containing corrections to the Licensed Products), major and minor
enhancements, and the new system versions and releases generally made available
by NIKU to users of Licensed Products.
1.11 "Support Fee" means the fee paid by USi to NIKU for services specified in
Attachment C, and for Software Updates.
1.12 "Support Line" means such telephone, email, fax, mail, beeper and web
support, including research time provided by NIKU Support Line staff under
Attachment D.
2. LICENSE GRANT.
2.1 License Rights. NIKU grants to USi during the term of this Agreement a
limited, nonexclusive, nontransferable, worldwide, fee-bearing right:
(a) to install and use one (1) copy of each of the Licensed Products
on a server computer system in the Designated Facility for
purposes of providing the Service Offering to Customers;
(b) to make up to three (3) copies of the installed Licensed
Products for archival back-up or internal testing purposes; and,
(c) to use, store, transmit, display and sublicense the Licensed
Products and Documentation to End Users as part of the Service
Offering, provided,
2
3
however, that prior to granting any person or entity access to
the Licensed Products or Documentation, USi must enter into a
valid and enforceable agreement with such person or entity that
is consistent with and not less restrictive than NIKU's standard
end user license agreement ("End User License Agreement"), a
copy of which is attached as Attachment D.
2.2 Intellectual Property Rights:
2.2.1 USi acknowledges and agrees (a) that the Licensed Products and
Documentation, the ideas, methods of operation, processes,
know-how, aesthetic aspects, subsystems and modules included
therein, the graphical user interfaces for the Licensed
Products, and the look and feel of the Licensed Products and
Documentation are proprietary materials, some of which contain
valuable trade secrets; (b) that all title and intellectual
property rights - meaning copyrights, confidentiality rights,
trade secret rights, trademark rights, patent rights and other
intellectual property and proprietary rights - in the Licensed
Products and Documentation are owned exclusively by NIKU and its
third-party suppliers , subject only to the licenses granted
herein; and (c) USi will not take any action to jeopardize,
limit or interfere in any manner with NIKU's or its third-party
suppliers' ownership of or rights with respect to the Licensed
Product(s) and Documentation.
2.2.2 USi will take reasonable precautions (including the precautions
taken to protect its own confidential information) to prevent
unauthorized use or disclosure of the Licensed Products, any
source code provided to USi hereunder, and the results of any
performance or benchmark tests of any software included in such
Licensed Products.
2.2.3 Without the prior express written consent of NIKU, USi will not,
and will not grant any other person or entity the right to,
disassemble, decompile, decode, translate, modify, produce a
source listing, create derivative works or reverse engineer any
Licensed Products or Documentation. In the event any Derivative
Works is created hereunder, USi agrees that Niku will be the
sole owner of all Derivative Works (as such term is defined
below). Niku grants to USi, during the term of this Agreement, a
nonexclusive, royalty-free and nontransferable right and license
(with no right of sublicense) to use any Derivative Works solely
with the Licensed Product(s) and solely for USi's own internal
use and benefit. USi agrees that all use of any Derivative Works
will be in accordance with this Agreement. For the purposes of
this Agreement, "Derivative Works" means any inventions,
improvements, reports, drawings and other works of authorship,
improvements and/or modifications to the Licensed Product(s) or
Documentation, that USi and/or its agents may conceive, develop
or reduce to practice, alone or jointly with others,
3
4
whether or not they are eligible for patent, copyright,
trademark, trade secret or other legal protection.
To the extent that USi and/or its agents may acquire property
rights in any Derivative Works by operation of law, USi hereby
assigns to Niku, with full title guarantee, all of its rights in
the Derivative Works. At Niku's request and expense, USi will
assist and cooperate with Niku in all reasonable respects and
execute any documents and take further acts as reasonably
requested by Niku to acquire, transfer, maintain and enforce any
legal protection for the Derivative Works. USi hereby appoints
the officers of Niku as in existence from time to time as its
attorneys-in-fact to execute documents on its behalf for this
limited purpose.
2.2.4 USi will not obscure, remove or modify any notices or marking,
including without limitation, copyright, trademark or
confidentiality notices on the Licensed Product and
Documentation provided to USi by NIKU or its third-party
suppliers.
2.2.5 NIKU and its third-party suppliers retain rights in and to the
Licensed Products and Documentation not specifically granted to
USi hereunder, and any use of these items other than as
expressly permitted by this Agreement shall constitute a
material breach of this Agreement.
2.2.6 Where USi uses a multi-processor server, USi will maintain
accurate records of the number of CPUs used for the Licensed
Product(s) and provide such records to Niku on a quarterly basis
as set forth in Attachment A.
2.3 Prepaid Maintenance Customers: Where a potential Customer for a Services
Offering already lawfully has the right to use a Licensed Product for internal
use, and has prepaid maintenance, USi (a) may host such Licensed Product without
being obligated to pay NIKU a license fee; and (b) will assume the obligation to
perform Maintenance, in which case NIKU will credit USi with the amount of
prepaid Maintenance to be provided by USi. After expiration of the prepaid
Maintenance term for such Customer, USi will purchase Maintenance at the lower
of Customer's original rate, or the rate charged to USi under this Agreement.
3. USI RESPONSIBILITIES.
3.1 USi will create a Services Offering entitled "Professional Services
Automation powered by Niku."
3.2 USi will provide the Customer support specified in Attachment B.
4
5
3.3 USi will provide to NIKU the information and materials reasonably necessary
to allow NIKU to most effectively present the Services Offering concept to any
prospect.
3.4 USi will make no representations, warranties or promises, expressed or
implied, oral or written, to Customers with respect to any Licensed Product,
other than the written representations, warranties and promises made to USi by
NIKU in this Agreement.
3.5 Integration Services:
3.5.1 Through its Advanced Engineering organization, USi will conduct
performance tests of Services Offerings over varying concurrent
users and bandwidth levels. USi will share this information with
NIKU to assist NIKU in its optimization of the Licensed
Products.
3.5.2 Training and Certification. Within three (3) months after
execution of this Agreement, USi will create one NIKU Client
Care Team (i) composed of installation and help desk staff to
support Customers as further described in Attachment B, (ii)
trained in the Licensed Products, either directly by NIKU, or
through USi's internal training group, and (iii) to provide
Level One and Level Two support (as these are defined in Section
5.3, below) to Customers. USi will purchase training from NIKU
for internal team members at rates specified in Attachment A.
3.6 USi will staff its operations teams with vendor-certified network, database,
application, and hardware technical specialists, and will have application
expertise for Licensed Products available to all shifts, as needed in order to
provide Level One and Level Two support to Customers.
3.7 USi will train NIKU's sales force in the promotion of Services Offerings as
soon as reasonably possible after execution of this Agreement. USi will provide
reasonable value proposition/messaging/demonstration capabilities to the NIKU
sales force.
3.8 USi will exercise its rights in, and to enforce each End User License
Agreement as reasonably requested by NIKU or as otherwise necessary to protect
NIKU's rights hereunder. USi agrees to report to NIKU any violation of the End
User License Agreement and to reasonably cooperate with NIKU in any enforcement
actions taken by NIKU at NIKU's expense.
4. NIKU'S RESPONSIBILITIES.
5
6
4.1 On terms consistent with this Agreement, NIKU will deliver to USi Licensed
Products as they become available, and as set forth in Attachment A. Attachment
A may be modified only upon mutual agreement of the parties.
4.2 NIKU will provide Maintenance for Licensed Products to USi in accordance
with Attachment B.
4.3 Upon execution of this Agreement, NIKU will deliver to USi the current
Marketing and Demonstration Materials. Subject to the guidelines established by
NIKU, NIKU authorizes USi to place a notice on these materials, under NIKU's
guidelines, to indicate USi's authority to use, and provide access to, the
Licensed Products in accordance with the Services Offering.
4.4 During the term of this Agreement, NIKU will deliver to USi a reasonable
number of copies of the Licensed Product, not to exceed use by [***] seats, of
which [***] will be used for USi's internal testing and demonstration, and [***]
for training purposes at no additional charge. Where NIKU uses beta testing,
NIKU will invite USi to participate as a beta test site for new Licensed
Products.
4.5 NIKU will give USi written notice prior to withdrawing any commercially
available Licensed Product (including any version thereof) from marketing or
support of NIKU's customers, as soon after NIKU's decision to withdraw a
Licensed Product as reasonably possible.
4.6 Not later than fourteen (14) days after execution of this Agreement, and for
three (3) months thereafter, NIKU will make available, at rates specified in
Attachment A, one trained NIKU consultant to be on-site at USi to provide
knowledge transfer and engineering services in support of USi's drafting the
specifications, and testing the Services Offering.
4.7 NIKU will train USi's sales force in the Licensed Products as soon as
reasonably possible after execution of this Agreement. NIKU will provide
reasonable value proposition/messaging/demonstration capabilities to the USi
sales force.
4.8 In the process of qualifying a prospect, NIKU will make available to all
prospects such information about the Services Offering in a manner designed to
convert a prospect into a qualified lead and, ultimately, into a Customer.
5. CUSTOMER SUPPORT.
5.1 USi will provide technical and application response-line support to
Customers in accordance with Attachment B.
*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
6
7
5.2 Where necessary for implementation of a Services Offering, USi will purchase
from NIKU professional services at rates specified in Attachment A, and payable
by USi as delivered. The consultants designated to perform professional services
will be chosen on the basis of their availability and required expertise.
Notwithstanding NIKU's assistance in the implementation of a Services Offering,
USi will remain solely responsible for Customer implementations.
5.3 USi will provide Level One and Level Two Support to Customers. "Level One
Support" means initial contact with the Customer for questions regarding the
implementation of the Services Offering. "Level Two Support" means advising
Customer on application functionality and configuration, internetworking,
database configuration and maintenance, and hardware configuration and
maintenance.
5.4 NIKU will provide Level Three Support in accordance with definitions and
terms of the Service Level Agreement in Attachment C.
6. PRICING AND PAYMENT TERMS.
6.1 Fees payable by USi to NIKU will be calculated on a per-Customer basis in
accordance with Attachment A.
6.2 In accordance with the fees agreed in Attachment A, USi shall pay NIKU the
license fees, Maintenance fees, and services fees together with any applicable
sales or use tax or similar tax, excluding any taxes based on NIKU's net income,
payroll, or gross receipts.
7. MARKETING.
7.1 As additional consideration for the rights granted by NIKU to USi hereunder,
USi shall, at its own expense, actively promote and market Licensed Products to
potential Customers as part of the Services Offering. USi will produce, and
deliver to NIKU, marketing and demonstration materials describing and promoting
Services Offerings, and will assist NIKU in qualifying prospects. USi will use
Marketing and Demonstration Materials for purposes of marketing the Services
Offering.
7.2 USi and NIKU will participate in joint advertising opportunities
7.3 USi and NIKU each will designate marketing contacts.
7.4 The Parties will meet quarterly to assess market conditions, customer
satisfaction, and projections for training programs, business strategies,
revenue forecasts, and proposals
7
8
for the Services Offering. The Parties will also meet annually to review the
terms of the Agreement.
7.5 Sales Force Compensation: For Services Offering sales, NIKU will compensate
its sales force in the same manner and at the same rates as it compensates its
sales force for sales of licenses of the Licensed Products.
7.6 The Parties acknowledge that USi has an exclusive arrangement with Siebel
Systems for the outsourcing of Siebel's software for the automation of corporate
sales, marketing, and customer service functions ("Siebel ERM Software"). The
Parties agree that current Licensed Products do not compete with Siebel ERM
Software. In the event that the Parties deem future Licensed Products to compete
with Siebel ERM Software, the Parties will negotiate additional terms and
conditions for the purpose of resolving the conflict.
7.7 The Parties acknowledge and agree that this Agreement is non-exclusive.
8. DATA AND DOCUMENTS RESULTING FROM THE LICENSED PRODUCTS.
8.1 USi and its Customers are free to use any results, such as databases or
reports, created as a by-product from use of Licensed Products in accordance
with a Services Offering ("Results"). USi and/or the Customer will own the
Results, but not any portion of the Licensed Products.
9. WARRANTIES.
9.1 NIKU warrants that the Licensed Product, when properly installed and used,
will perform in substantial accordance with the Documentation for a period of
one (1) year from the date the Software is delivered to USi. If the Licensed
Product does not perform as warranted, NIKU will attempt to correct the Licensed
Product, or if a correction is not reasonably possible, to replace the Licensed
Product free of charge. If NIKU is unable to make the Licensed Product perform
as warranted, NIKU will terminate this Agreement and refund the license fee paid
by USi less any cumulative amortization or depreciation of that Licensed Product
by USi on its financial statements as of the date when NIKU terminates the
license for such Licensed Product. This warranty is made to and for the sole
benefit of USi, and will be enforceable against NIKU only if: (a) all
modifications, alterations or additions to the Licensed Product made by USi, if
any, have been made using tools or utilities included in the Licensed Product or
otherwise provided by Niku; and (b) USi has not made or caused to be made any
modifications, alterations, or additions to the Licensed Product that cause it
to deviate from the Documentation. NIKU will not be liable for any claimed
breach of this Warranty caused by the acts or omissions of USi or any third
party, with the exception of any Niku third-party supplier.
8
9
9.2 NIKU warrants that, during the Maintenance period, the Licensed Products
will be Year 2000 Compliant. "Year 2000 Compliant" means (to the extent that
other information technology, data, hardware or software used in combination
with the Licensed Products, properly exchanges date/time data with the Licensed
Products): (i) the Licensed Products, as delivered by NIKU, will accurately
process date/time data (including, without limitation, calculating, comparing
and sequencing) from, into and between the twentieth and twenty-first centuries,
and the years 1999 and 2000 and leap year calculations, in accordance with the
Documentation relating to those Licensed Products and in effect at the time the
support is provided; and (ii) the Licensed Products, as delivered by NIKU, will
accurately process date/time data (including, without limitation, calculating,
comparing and sequencing) on or after January 1, 2000 in the same manner, and
with the same functionality as the same release level of the Licensed Products
processes date/time data (including, without limitation, calculating, comparing
and sequencing) on or before December 31, 1999. During the Maintenance period,
NIKU will not modify the Documentation or the Licensed Products in any manner
that would cause the Licensed Products to not be Year 2000 Compliant. This
warranty does not apply if any other information technology, data, hardware or
software used in combination with the Licensed Products are not Year 2000
Compliant.
9.3 NIKU warrants that, for a period of ninety (90) days from the date NIKU
delivers the Licensed Products to USi, the media upon which the Licensed Product
is provided will be free of material defects ("Media Warranty"). The sole and
exclusive remedy for breach of the Media Warranty is replacement of the
defective media if any such defect is found within ninety (90) days after
delivery of the defective media.
9.4 EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, NEITHER USi NOR NIKU (OR ITS
THIRD-PART SUPPLIERS) MAKES OR RECEIVES ANY OTHER EXPRESSED OR IMPLIED
WARRANTIES OR REPRESENTATIONS OF ANY KIND WITH RESPECT TO THE LICENSED PRODUCTS
OR SERVICES PROVIDED UNDER THIS AGREEMENT, OR RENDERED UNDER A SERVICES
OFFERING, IN FACT OR IN LAW, INCLUDING, BUT NOT LIMITED TO, ANY EXPRESSED OR
IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, WHICH
ARE HEREBY EXPRESSLY DISCLAIMED.
9.5 The warranties, and remedies for their breach, in Sections 9.1, 9.2, and
9.3, above, and in NIKU's Product License Agreement for Licensed Products are
NIKU's sole and exclusive warranties and remedies to USi. USi will not pass to
Customers any warranty or remedy on behalf of NIKU.
9.6 Each Party warrants that its performance under this Agreement does not
materially conflict with its obligations under any other agreement.
9
10
10. CONFIDENTIALITY.
10.1 "Confidential Information" means information disclosed by NIKU or USi in
writing, orally or by inspection, which is identified as "Confidential" or
"Proprietary", or which, given the nature of the information or the
circumstances surrounding its disclosure, the Parties reasonably ought to
recognize as being confidential. Notwithstanding the foregoing, information, in
whatever form, disclosed by NIKU that relates to the features and/or
functionality of the Licensed Products and that is not publicly known is
"Confidential Information" whether or not so identified.
10.2 Each Party will treat as confidential all Confidential Information received
from the other Party, will use such Confidential Information only as expressly
permitted under this Agreement, will only disclose it to employees needing
access to it in order to fulfill the Party's obligations, and will not disclose
such Confidential Information to any third party without the disclosing Party's
prior written consent except as provided in Section 10.4 below.
10.3 Notwithstanding the above, the restrictions of this Section will not apply
to information that is (i) in the public domain through no breach of this
Agreement, (ii) obtained from third parties not subject to restrictions on
disclosure, (iii) independently developed without reference to Confidential
Information, or (iv) previously known to the recipient.
10.4 If either Party receives a subpoena or other validly issued administrative
or judicial demand requiring it to disclose Confidential Information of the
other Party, the recipient will promptly notify the discloser and tender to it
defense of such demand. Unless the demand will have been timely limited, quashed
or extended, the recipient will then be entitled to comply with such subpoena or
other process to the extent required by law.
10.5 Notwithstanding any provision in this Agreement to the contrary, in the
event of an actual or threatened breach of this Section 10, the Parties agree
that there would be no adequate remedy at law, and that the injured Party (or
the Party threatened to be injured) may be entitled to immediate injunctive and
other equitable relief, without bond and without the necessity of showing the
inadequacy of legal remedies.
11. INDEMNIFICATION BY USI.
11.1 USi, at its expense, will defend any suit or claim brought against NIKU,
and will indemnify NIKU against an award of damages and costs (including
reasonable attorneys' fees) against NIKU by a final court judgment based on a
claim that any Licensed Product infringes a U.S. or Canadian patent, worldwide
trade secret, or Berne Convention country
10
11
copyright to the extent such infringement results from modifications to any
Licensed Product made by USi, the marketing, distribution or use of the Licensed
Products in conjunction with the Services Offering or services or software not
supplied by NIKU, any warranty, condition or representation or indemnity granted
by USi for the Services Offering in addition to or in lieu of the warranties
described in this Agreement, or from USi's failure to use corrections or
enhancements delivered by NIKU to USi in order to rectify any infringement,
provided that NIKU (a) notifies USi in writing of the suit or claim within ten
(10) days after NIKU receives notice of it; (b) gives USi sole authority to
defend or settle the suit or claim; (c) gives USi all information in NIKU's
possession or control concerning the suit or claim; and (d) at its expense,
reasonably cooperates and assists USi with defense of the suit or claim.
11.2 Section 11.1, above, states USi's entire liability, and NIKU's sole remedy,
with respect to any infringement claim arising under that section.
12. INDEMNIFICATION BY NIKU.
12.1 NIKU, at its expense, will defend any suit or claim brought against USi,
and will indemnify USi against an award of damages and costs (including
reasonable attorneys' fees) against USi by a final court judgment based on a
claim that USi's marketing, distribution, or use of any Licensed Product
infringes a U.S. or Canadian patent, worldwide trade secret or Berne Convention
country copyright, provided that USi (a) notifies NIKU in writing of the suit or
claim within ten (10) days after USi receives notice of it; (b) gives NIKU sole
authority to defend or settle the suit or claim; (c) gives NIKU all information
in USi's possession or control concerning the suit or claim; and (d) at its
expense, reasonably cooperates and assists NIKU with defense of the suit or
claim.
12.2 If any Licensed Product becomes, or in NIKU's opinion is likely to become,
the subject of a suit or claim of infringement of a patent or copyright, NIKU
shall, at its option and expense, (a) obtain the right for USi to use the
Licensed Product; (b) replace or modify the Licensed Product so that it becomes
non-infringing, provided that the replacement or modification is of similar or
better quality or functionality; or (c) terminate (i) USi's license for the
infringing Licensed Product, and (ii) this Agreement to the extent that it
relates to the infringing Licensed Product. If NIKU terminates the license for
the infringing Licensed Product under this Section, USi will cease use of the
infringing product and return it to NIKU; and (d) NIKU will pay USi, as USi's
sole and exclusive remedy against NIKU (other than indemnification by NIKU under
Section 12.1 above) an amount equal to the License Fee paid under this Agreement
for the infringing Licensed Product, less any cumulative amortization or
depreciation of that Licensed Product by USi on its financial statements as of
the date when NIKU terminates the license for the infringing Licensed Product.
11
12
12.3 NIKU will not be liable to USi under this Section 12 if any suit or claim
of infringement is based on the use of the Licensed Product (a) in combination,
operation or use with any product not furnished or suggested in writing by NIKU;
(b) in a modified state not authorized by NIKU; (c) that is a superseded or
altered release of some or all of the Licensed Product or any modification
thereof including, but not limited to, USi's failure to use corrections, fixes
or enhancements made available by NIKU; or (d) in a manner other than for which
it was designed, provide that infringement would have been avoided without such
use of the Licensed Product. Nor will NIKU be liable to USi for any infringement
outside the United States.
12.4 Sections 12.1 - 12.3, above, state NIKU's entire liability, and USi's sole
remedy, with respect to any infringement claim arising under those sections.
13. LIMITATION ON LIABILITY.
13.1 Except for claims for breach of either Party's Intellectual Property Rights
and proprietary rights, and claims for indemnification under Sections 11 and 12,
the limit of each Party's and its suppliers' liability (whether in contract,
tort, negligence, strict liability in tort or by statute or otherwise) to the
other, or to any third party, concerning performance or non-performance under
this Agreement, or in any manner related to this Agreement, for any and all
claims will not in the aggregate exceed the monetary amounts paid or received
under this Agreement.
13.2 EXCEPT FOR CLAIMS FOR BREACH OF EITHER PARTY'S INTELLECTUAL PROPERTY RIGHTS
AND PROPRIETARY RIGHTS, AND CLAIMS FOR INDEMNIFICATION UNDER SECTIONS 11 AND 12,
IN NO EVENT WILL EITHER PARTY (OR NIKU'S THIRD-PART SUPPLIERS) BE LIABLE FOR
CONSEQUENTIAL, INDIRECT, SPECIAL, INCIDENTAL, OR PUNITIVE LOSS, DAMAGE OR
EXPENSES (INCLUDING LOST PROFITS OR SAVINGS), EVEN IF IT HAS BEEN ADVISED OF
THEIR POSSIBLE EXISTENCE.
13.3 The allocations of liability in this Section 13 represent the agreed and
bargained-for understanding of the Parties and each Party's compensation
reflects such allocations.
14. CHOICE OF LAW AND VENUE.
14.1 This Agreement will be governed by New York law without reference to that
State's conflicts of law principles.
14.2 INJUNCTIVE RELIEF: IN THE EVENT OF AN ACTUAL OR THREATENED BREACH BY EITHER
PARTY OF ANY TERM, RESTRICTION, COVENANT, OR CONDITION IN THIS AGREEMENT, THE
NON-BREACHING PARTY
12
13
(or its successors or assigns), will have, in addition to the right to damages,
the right to seek equitable relief in a court of competent jurisdiction, without
the requirement of bond, for the purpose of enjoining such actual or threatened
breach. The Party intending to seek equitable relief will notify the other Party
of the actual or threatened breach prior to the commencement of any such action.
15. TERM AND TERMINATION.
15.1 This Agreement will become effective upon execution by both Parties. The
initial term of this Agreement is three (3) years, but it may be terminated
thereafter by either Party on the anniversary date as provided by this Section
15.
15.1.1 After the initial three-year term, unless this Agreement is
automatically extended as provided below, (a) USi may not enter
into any new Services Offering Agreement; and (b) the Parties
will continue to abide by this Agreement to the extent
reasonably necessary to complete performance of any existing
Services Offering Agreement.
15.1.2 At the end of the initial three-year term, this Agreement will
extend automatically for one-year periods unless either Party,
on sixty (60) days' written notice to the other, terminates this
Agreement.
15.2 Either Party may terminate this Agreement immediately upon the public
announcement of the other Party's change of control, which is defined as a
change of more than fifty percent (50%) of ownership.
15.3 If either Party breaches any of its material obligations, the other Party
may terminate this Agreement by written notice specifying the breach. Such
notice will be effective sixty (60) days after its receipt, unless the Party
receiving the notice has cured the breach.
15.4 If Customer for a Services Offering wishes to obtain a license to retain a
right to use of a Licensed Product after termination of the Services Offering
Agreement, then USi will refer Customer to NIKU for negotiation of a separate
license agreement between Customer and NIKU, in which case NIKU will be entitled
to retain all revenues from such sale.
15.5 Subject to the provisions of this Section 15, upon termination USi shall
cease use of the Licensed Products and immediately return such Licensed Products
and any copies thereof to NIKU. Termination or expiration of this Agreement will
not release either party from its obligation to pay any fees accruing prior to
the date of such termination or expiration.
13
14
15.6 The provisions of Section 2.3, and 10 through 16 will survive termination
of this Agreement.
16. GENERAL.
16.1 Freedom to Set Customer Pricing and Terms and Conditions: Subject to the
terms of this Agreement, USi will have full freedom and flexibility in pricing
the Services Offering, and in establishing the terms and conditions under which
such services, including the Services Offering, are offered to Customers, except
that the term of any Services Offering Agreement shall not exceed five (5) years
without express written consent of NIKU.
16.2 Assignment of Personnel: Except as expressly agreed by USi and NIKU to the
contrary, nothing contained in this Agreement will limit or restrict the
assignment or reassignment of employees of USi and NIKU within their respective
organizations or that of their Affiliates.
16.3 Notices: Where one Party is required or permitted under this Agreement to
give notice to the other, the notice will be deemed given when delivered via
facsimile, by hand, or on the third business day after such notice is deposited
in the mail, registered or certified, return receipt requested, postage prepaid
and addressed as follows:
In the case of USi:
▇▇▇▇▇ ▇▇▇▇▇▇▇
USinternetworking, Inc.
Senior VP, Strategic Development
▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇ (fax)
with a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President & General Counsel
USinternetworking, Inc.
▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇ (fax)
In the case of NIKU:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇
▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: CEO
With a copy to:
Legal Department
Either Party may change its foregoing address by giving the other written notice
of the new address.
16.4 Independent Contractor: USi and NIKU are independent contractors with
respect to all performance rendered pursuant to this Agreement. The employees of
one Party will not be considered employees of the other for any purpose. Neither
Party will have the authority to bind or make commitments on behalf of the other
Party for any purpose. Each Party assumes full responsibility for its actions
and the actions of its personnel in rendering performance pursuant to this
Agreement, and for the supervision, daily direction and control, payment of
salary (including withholding of income taxes and social security), workers'
compensation, disability benefits and the like of its personnel.
16.5 Compliance with Laws and Regulations: Each Party will, at its own expense,
comply with any governmental law, statute, ordinance, administrative order, rule
or regulation relating to its duties, obligations and performance under this
Agreement and will procure all licenses and pay all fees and other charges
required.
16.6 Export of Technical Data: USi will not export, re-export or transmit,
directly or indirectly, any technical data or computer software received under
this Agreement except in full compliance with all applicable federal, state and
local laws, regulations and ordinances, including the Regulations of the U.S.
Departments of Commerce and/or State.
16.7 Force Majeure: Neither Party will be liable for failure to fulfill its
obligations under this Agreement, if such failure is caused by flood, extreme
weather, fire, or other natural calamity, acts of governmental agency, or other
cause beyond the reasonable control of such Party.
16.8 Trademarks and Advertising: Nothing in this Agreement confers upon either
Party any right to use the other Party's trademarks, tradenames or service marks
in connection with any product, service, promotion or publication, without the
prior written consent of the owner of such trademark, tradename, or service
▇▇▇▇.
16.10 Assignment: Neither Party may sell, transfer, assign, or subcontract any
right or obligation except as expressly provided by this Agreement, without the
prior written consent of the other Party, and any act in derogation of the
foregoing will be null and void; provided, however, that either Party may,
without the other's consent, assign its rights or
15
16
obligations under this Agreement to an Affiliate, or to a financier of its
choice solely for financing purposes.
16.11 Publicity: Upon the execution of this Agreement, or as soon as possible
thereafter, and upon prior written approval from the other Party, each Party
will make reasonable efforts to announce publicly the general nature and purpose
of the relationship created by this Agreement. Any announcement may be made
jointly and/or separately by mutual consent of the Parties.
16.12 Severability: If any provision of this Agreement is held by a court of
competent jurisdiction to be contrary to law, the remaining provisions of such
Agreement will remain in full force and effect.
16.13 Amendment; Waiver: No amendment to this Agreement will be effective unless
in writing and executed by an authorized representative of both NIKU and USi. No
waiver of any provision of this Agreement will be effective unless it is set
forth in a writing referring to the provision(s) waived and the instrument in
which such provision(s) is (are) contained, and is executed by an authorized
representative of the Party waiving its rights. No failure or delay by either
Party in exercising any right, power or remedy will operate as a waiver of any
such right, power or remedy.
16.14 Entire Agreement: The provisions of this Agreement constitute the entire
agreement between the Parties. They supersede all prior agreements, oral or
written, and all other communications relating to the subject matter of this
Agreement. Any terms contained in USi invoices, acknowledgments, shipping
instructions, or other forms that are inconsistent with or different from the
terms of this Agreement will be void and of no effect.
16.15 Headings: The Section headings in this Agreement are for convenience of
reference only, and are not intended to define or limit the terms or provisions
hereof.
16
17
By the signatures of their authorized representations, the Parties acknowledge
the validity of, and their consent to, each of the terms contained in this
Agreement.
FOR USINTERNETWORKING, INC. FOR NIKU CORPORATION
By By
-------------------------- ----------------------------
(Authorized Signature) (Authorized Signature)
VP General Counsel VP Global Sales and Services
-------------------------- ----------------------------
(Title) (Title)
8/19/99 8/19/99
-------------------------- ----------------------------
(Date) (Date)
17
18
ATTACHMENT A
DESIGNATED FACILITIES, LICENSED PRODUCTS, AND PRICING
1. Licensed Product Description: Niku for IT Consulting, Version 3.x
2. Designated Facilities:
▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
4th Floor, 1-15 Ariake, 3 Chrome; ▇▇▇▇-▇▇, ▇▇▇▇▇ ▇▇▇-▇▇▇▇, ▇▇▇▇▇
3. Reporting and Compliance. USi will maintain accurate records relating to
(a) the sublicensing of Licensed Product(s) to Customers; and (b)
internal licenses for USi. Such records will include, without
limitation, the number of Customers (where the Customer is an entity,
the number of individual users within the Customer), the number of
internal use users and the number of CPUs where the Licensed Product is
used. USi will provide such records to Niku within 10 days after the end
of each quarter, together with any applicable fees as set forth in
Section 4 below. Niku will have the right to inspect USi's records and
the Licensed Product at the Designated Facility as reasonably necessary
to verify that Licensee is in compliance with this Agreement. Niku will
provide Licensee with reasonable notice prior to any inspections. Niku
will be limited to conducting three (3) such inspections in any twelve
(12) month period, and will not unreasonably interfere with Licensee's
business operations. Niku will bear all costs and expenses associated
with the exercise of these rights, unless such inspection reveals that
Licensee is not in compliance with this Agreement, in which case,
Licensee agrees to pay Licensor the reasonable costs of such inspection
plus any additional license fees related to unauthorized use of the
Software.
4. License Fees: Niku is offering the Licensed Products to USi based on the
fees set forth below. License Fees will accrue in the applicable
quantity upon: (a) the first date of access to any Licensed Product by
any employee, contractor or consultant of USi; (b) authorization by USi
for any Customer to increase the quantity of users accessing the
Licensed Product; or (c) the earlier of: (1) the execution of the End
User License Agreement; or (2) the date a Customer or, if the Customer
is an entity, any individual user within the Customer, has access to the
Licensed Product. After the Effective Date, Licensee will pay Niku such
License Fees accrued during each quarter, together
19
with any support fees due during such quarter, by the tenth day after
the end of each calendar quarter. All payments for the License Fee will
be provided with the quarterly reports required under Section 3 of this
Attachment A. The following fees are effective through December 31,
1999. Niku will provide a new pricing schedule to USi by January 2,
2000. The following License Fees will apply after the [***] licenses
under the Software License Agreement, effective as of June 30, 1999,
between the parties has been drawn down:
Licensed Product fee*: $2,500
Niku Support Fee: 12%, or the
rate negotiated by end-user,
whichever is lower
* volume discounts will apply where appropriate
3. Services Fees: Consistent with the license fees above, fees from Niku's
Professional Services organization will be revised by January 2, 2000.
The following fees will be applicable for all engagements not currently
quoted with a Niku Statement of Work:
Role Rate
Niku Project Director $200/hr.
Niku Project Manager $180/hr.
Niku Technical Lead $150/hr.
Niku Consultant $130/hr.
4. Training Services and Fees: Niku will provide training to USi at Niku's
facilities for a rate of $2,500/day, for between five (5) and fifteen
(15) USi attendees. For training conducted offsite, USi will reimburse
Niku for reasonable expenses of Niku's training staff.
*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
20
ATTACHMENT B
CUSTOMER SUPPORT
USi will provide telephone, email, fax, and World Wide Web support to
Customers, including by way of example and not limitation, problem
identification, diagnosis, correction, usage concerns and resolution. USi will
provide telephone, email, fax, and World Wide Web support in accordance with the
following requirements which may be amended from time to time by agreement of
the Parties:
(a) USi will maintain an internal competency center or help desk to
provide a central point of contact for systems, network and operational support
through a telephone support line which will be open, at minimum, during normal
business hours;
(b) When a Customer reports a problem which USi reasonably concludes to
be due to a defect in the Licensed Product, USi will determine the level of
severity of the problem, such levels to be the same as or comparable to the
following ranges:
(i) [***]: a problem does not require [***], but needs [***] for
a [***] on how to use the [***] or [***], or the problem is in a [***];
(ii) [***]: a problem does not have an [***] on [***], but is
causing a [***] and a [***] is not [***]; and
(iii) [***]: the problem is that a [***] of the Licensed
Products is [***] and cannot be [***] and subject to [***] occurring so
frequently as to [***], and the problem is having a [***] on with no
available;
(c) For critical problems which USi requires further assistance in
resolving, the following provisions will apply: USi will immediately bring such
problems to the attention of NIKU and the Parties will cooperate with each other
to address and correct such critical problems in an efficient and timely manner
in accordance with NIKU and USi standard procedures for correcting problems.
Upon execution of this Agreement, NIKU and USi will share each Party's standard
procedures for correcting problems of all severity levels;
*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
21
ATTACHMENT C
NIKU SERVICE LEVEL AGREEMENT
The Parties agree that the terms of the Service Level Agreement will be
concluded, and incorporated into this Attachment C, not later than September 15,
1999