Hosting and revenue-share agreement

Hosting and revenue-share agreement

The Parties agree as follows:

1. 1Definitions and interpretation

   1. 1.1

      In this agreement:

      1. (a)“Agreed Costs” means the costs listed in Schedule 2 that may be deducted in calculating the Revenue Share Base, up to the cap stated there;
      2. (b)“Business Day” means a day other than a Saturday, Sunday or public holiday in [country];
      3. (c)“Commercial Operation Date” means, for each Phase, the earlier of the date the Equipment in that Phase is first used for Compute Services and the date [number] days after its Ready for Installation Date;
      4. (d)“Compute Services” means GPU compute and related services that Partner provides using the Equipment to its customers (“End Customers”) under its contracts with them (“Customer Contracts”);
      5. (e)“Contracted Power” means, for each Phase, the maximum IT power in kW that Host shall make available to the Equipment, as set out in Schedule 2;
      6. (f)“Equipment” means the GPU servers, storage, network and other equipment that Partner, or its financier or lessor, owns and installs in the Facility, as recorded in the asset register under clause 4.3;
      7. (g)“Facility” means the datacenter at [address], and “Hosting Area” means the [data hall / rows / cages] in it described in Schedule 1;
      8. (h)“Facility Service Levels” means the service levels in the service level schedule signed by the Parties and attached as Annex A (the “SLA Schedule”);
      9. (i)“Gross Revenue”, “Revenue Share Base” and “Host Share” have the meanings given in section 7, “Minimum Guaranteed Fee” in clause 8.1 and “Energy Costs” in clause 9.2;
      10. (j)“Monthly Report” means the report under clause 10.1 in the form of Schedule 3, and “Reporting Period” means each calendar month;
      11. (k)“Phase” means each stage of deployment in the ramp schedule in Schedule 2 (the “Ramp Schedule”), and “Ready for Installation Date” has the meaning given in clause 5.1; and
      12. (l)“Sanctions and Export Control Laws” means the sanctions and export, re-export and transfer controls of the European Union, its member states, the United Nations, [the United Kingdom], [the United States] and any other applicable jurisdiction.
   2. 1.2

      The Schedules and Annexes form part of this agreement. If there is a conflict, the clauses prevail, except that Schedule 2 prevails on amounts, percentages and dates.

2. 2The arrangement

   1. 2.1

      Host shall make the Hosting Area, power, cooling and connectivity available for the Equipment, and Partner shall install and operate the Equipment and sell Compute Services in its own name and for its own account. Host is not a party to any Customer Contract and owes End Customers nothing; Partner shall not represent otherwise or use Host’s name without approval.

   2. 2.2

      In return for its contributions, Host receives the Host Share, [the Hosting Fee,] [any Top-Up under section 8] and the Energy Costs payable under section 9.

   3. 2.3

      Nothing in this agreement creates a partnership, joint venture or agency, and neither Party may bind the other.

3. 3Contributions of the Parties

   1. 3.1

      Host shall provide the Hosting Area; the Contracted Power for each Phase with the redundancy in Schedule 1; cooling for it, [air] / [liquid, up to the agreed connection point]; access to carriers and cross-connects; physical security and fire protection; maintenance of the Facility; and remote hands under Schedule 1.

   2. 3.2

      Partner shall provide the Equipment and its installation, cabling and commissioning; the software, operation, monitoring, maintenance and spares for the Equipment; sales, contracting, billing, collection and support for End Customers; and the compliance measures in clause 6.5.

   3. 3.3

      Schedule 1 allocates responsibilities in detail; anything unallocated falls to the Party whose contribution it most closely concerns. Each Party bears the cost of its contributions, except Agreed Costs and Energy Costs. Partner and its contractors shall comply with the Facility’s site and safety rules.

4. 4Equipment and title

   1. 4.1

      Title to the Equipment remains at all times with Partner or its financier or lessor, and Host acquires no interest in it by its installation or attachment to the Facility or otherwise.

   2. 4.2

      Host shall not encumber the Equipment. Host acknowledges that the Equipment may be subject to a financier’s security and, at Partner’s request, shall sign a reasonable agreement with that financier (a “Financier Agreement”) allowing it to enter the Facility and remove the Equipment on enforcement, subject to the site rules and payment of Host’s charges for the period of access.

   3. 4.3

      Partner shall keep an asset register of the serial number, owner and location of each item of Equipment and attach it to each Monthly Report. Host shall not move, power down or open the Equipment except on Partner’s instructions, as Schedule 1 allows, or in an emergency, notifying Partner immediately.

   4. 4.4

      [Host has no right to retain the Equipment.] / [If undisputed amounts due to Host remain unpaid [number] days after notice, Host may refuse removal of the Equipment until paid, subject to any Financier Agreement.]

5. 5Installation, ramp and reserved capacity

   1. 5.1

      Host shall make the Hosting Area for each Phase ready, with Contracted Power and cooling commissioned, by its ready date in the Ramp Schedule and notify Partner; the date of that notice is the “Ready for Installation Date”. Partner may inspect within [five] Business Days and notify defects for Host to remedy.

   2. 5.2

      Partner shall install and commission the Equipment for each Phase and use reasonable endeavours to start Compute Services by its target Commercial Operation Date.

   3. 5.3

      Host shall reserve each Phase’s Contracted Power and space until its take-up date. If Partner has not installed Equipment for a Phase by then, Host may release that capacity on [30] days’ notice [unless Partner pays the reservation fee in Schedule 2].

   4. 5.4

      If a Phase is ready later than its ready date, its Commercial Operation Date and any Minimum Guaranteed Fee are deferred by the delay [and Host shall give the delay credits in Schedule 2]. If it is not ready by its readiness long-stop date, Partner may cancel that Phase by notice.

   5. 5.5

      [Before offering additional power in the Facility to a third party for GPU compute, Host shall offer it to Partner, who may accept within [30] days as a new Phase.]

6. 6Operations and service levels

   1. 6.1

      Host shall meet the Facility Service Levels. If it does not, Host shall give the service credits in the SLA Schedule by reducing the next payment due to it. Service credits are Partner’s sole financial remedy for failing the Facility Service Levels, without affecting Partner’s right to terminate for chronic failure under clause 16.5.

   2. 6.2

      Partner shall operate the Equipment in accordance with good industry practice, is solely responsible for its commitments to End Customers, and shall not promise them more on facility matters than the Facility Service Levels.

   3. 6.3

      Host shall give at least [ten] Business Days’ notice of planned maintenance that may affect the Equipment. The Parties shall follow the incident procedure in Schedule 1 and review operations [monthly]. Partner’s personnel may access the Hosting Area at all times under the site rules.

   4. 6.4

      Partner shall keep the Equipment’s load within the Contracted Power and the per-rack limits in Schedule 1. If it does not, Host may require a reduction within [number] hours and, if the excess continues, charge for it at the rate in Schedule 2 or limit the power to protect the Facility.

   5. 6.5

      Partner shall ensure that the Compute Services and their use comply with law, including Sanctions and Export Control Laws, and shall:

      1. (a)carry out appropriate due diligence on each End Customer;
      2. (b)include in Customer Contracts acceptable use terms at least as protective as Host’s policy [in Annex B], prohibiting cryptocurrency mining unless Host agrees; and
      3. (c)suspend any End Customer whose use Host reasonably shows creates a legal, security or reputational risk for Host.

7. 7Revenue share

   1. 7.1

      “Gross Revenue” means all amounts [invoiced] / [received] by Partner and its affiliates for Compute Services provided using the Equipment, excluding value added tax, after deducting credit notes, refunds and service credits actually given to End Customers.

   2. 7.2

      The “Revenue Share Base” for each Reporting Period is [Gross Revenue] / [Gross Revenue less Agreed Costs]. Agreed Costs must be actually incurred, documented, attributable to the Facility and within the cap in Schedule 2; overheads, financing, depreciation and sales commissions are excluded unless Schedule 2 says otherwise.

   3. 7.3

      Host is entitled to [number] per cent of the Revenue Share Base for each Reporting Period [or the tiered percentages in Schedule 2] (the “Host Share”), and Partner retains the rest.

   4. 7.4

      Where Partner sells Compute Services bundled with other products, or under a contract covering other facilities, it shall include in Gross Revenue a fair share of the price, based on GPU-hours delivered from the Equipment at the average price realised for comparable Compute Services, using a method disclosed to Host in advance.

   5. 7.5

      Services to Partner’s affiliates, Partner’s own use, and capacity given free or at a discount outside the ordinary course count towards Gross Revenue at [the average price realised from unrelated End Customers in the same Reporting Period] / [the list price].

   6. 7.6

      Partner alone sets the prices and terms on which it sells Compute Services. [Where Gross Revenue is based on amounts invoiced, amounts written off as uncollectable after [number] days are deducted in the period of write-off and added back if later collected.]

8. 8Minimum guaranteed fee

   1. 8.1

      For each [calendar quarter], if the Host Share [together with the Hosting Fee] is less than the minimum amount in Schedule 2 for that period (the “Minimum Guaranteed Fee”), Partner shall pay Host the difference (a “Top-Up”).

   2. 8.2

      The Minimum Guaranteed Fee for each Phase starts on its Commercial Operation Date and is reduced pro rata for any period in which Host fails to make that Phase’s Contracted Power available, unless caused by Partner.

   3. 8.3

      [Top-Ups are not recoverable.] / [If the Host Share exceeds the Minimum Guaranteed Fee in a later period of the same calendar year, Partner may deduct from the excess any Top-Ups paid earlier that year.]

   4. 8.4

      [In addition to the Host Share, Partner shall pay a fixed hosting fee of [amount] per kW of Contracted Power per month from each Phase’s Ready for Installation Date (the “Hosting Fee”).]

9. 9Energy

   1. 9.1

      Host shall measure the energy consumed by the Equipment with [calibrated / certified] sub-meters at [rack / distribution board] level and make the readings available to Partner [in real time / monthly].

   2. 9.2

      “Energy Costs” means the energy measured under clause 9.1, [multiplied by an overhead factor of [number]] / [plus a share of the Facility’s cooling and losses calculated under Schedule 2], at [Host’s actual cost per kWh, including network charges, energy taxes and certificates] / [the price per kWh in Schedule 2].

   3. 9.3

      [Partner shall pay the Energy Costs monthly in addition to the Host Share.] / [Energy Costs are an Agreed Cost.] / [Host bears the Energy Costs, and the Host Share reflects this.]

   4. 9.4

      Host shall evidence actual Energy Costs and pass on any rebate, [procure guarantees of origin for [number] per cent of the Equipment’s energy,] and not reduce power to the Equipment for a grid flexibility programme without Partner’s consent and agreed compensation.

10. 10Payment, reporting and audit

    1. 10.1

       Within [ten] Business Days after each Reporting Period, Partner shall deliver a Monthly Report in the form of Schedule 3, certified by a finance officer.

    2. 10.2

       Host shall invoice the Host Share, any Hosting Fee, any Top-Up and the Energy Costs based on the Monthly Report and its meter readings, and Partner shall pay within [number] days of invoice.

    3. 10.3

       Partner shall keep accurate records of Gross Revenue, Agreed Costs and Equipment use for [number] years.

    4. 10.4

       Once a year, on [20] Business Days’ notice, Host may have an independent accountant, bound by confidentiality, audit those records. The accountant shall report to both Parties only whether the Monthly Reports were correct and any difference, without disclosing End Customers’ names or prices. Partner shall pay any underpayment with interest under clause 10.6, and the audit cost if the underpayment exceeds [five] per cent.

    5. 10.5

       Partner may verify Host’s meters and Energy Cost calculations on reasonable notice. A meter inaccurate by more than [number] per cent shall be recalibrated and charges adjusted for up to [number] months back.

    6. 10.6

       Overdue amounts carry interest at [rate] per cent per year above [reference rate] / [the statutory rate for late commercial payments]. All amounts exclude value added tax, which is payable in addition.

    7. 10.7

       Partner shall provide [a guarantee from [parent company]] / [a bank guarantee of [amount]] securing its payment obligations, maintained for the term of this agreement and [number] months after.

11. 11Exclusivity

    1. 11.1

       During the exclusivity period in Schedule 2, Host shall not let any third party install GPU equipment in [the Facility] to sell GPU compute to others, except the existing customers listed in Schedule 2 and colocation customers using their own equipment for themselves.

    2. 11.2

       Host may end the exclusivity by notice if:

       1. (a)Partner has not started providing Compute Services from any Phase within [number] days after its target Commercial Operation Date;
       2. (b)average utilisation of the Equipment in the Monthly Reports is below [number] per cent for [number] consecutive Reporting Periods; or
       3. (c)an undisputed amount remains unpaid more than [number] days after notice.

12. 12End Customers and non-solicitation

    1. 12.1

       End Customers and Customer Contracts belong to Partner. Host’s contact with End Customers is limited to facility matters such as access and safety, and Host shall refer commercial enquiries to Partner.

    2. 12.2

       During the term of this agreement and for [12] months after, Host shall not solicit any End Customer identified to it under this agreement to buy GPU compute from the Facility other than through Partner.

    3. 12.3

       During the same period, Partner shall not solicit Host’s other customers in the Facility, identified to it through this agreement, to move elsewhere.

    4. 12.4

       Clauses 12.2 and 12.3 do not restrict untargeted marketing, responding to an unsolicited approach, or action under clause 17.4. Partner’s Customer Contracts shall allow it to move or end the Compute Services if this agreement ends, and impose nothing on Host.

13. 13Competition law

    1. 13.1

       The Parties may be competitors. Each shall share commercially sensitive information only as needed to perform this agreement, verify payments and operate the Facility.

    2. 13.2

       The Monthly Report shows revenue and usage only in aggregate. Individual End Customer prices are shown only to the accountant under clause 10.4, and Host shall not ask for Partner’s future pricing, bids or plans. Host shall keep information received under this agreement from staff who set prices for its own compute or colocation services.

    3. 13.3

       Each Party sets its prices independently, and nothing in this agreement requires or permits coordination of prices, customers or markets beyond sections 11 and 12.

14. 14Insurance and risk

    1. 14.1

       Partner shall insure the Equipment for its replacement value, and Host the Facility for its reinstatement value, and each shall hold third-party liability insurance of at least [amount] per event.

    2. 14.2

       Each Party shall provide evidence of insurance on request. [Each shall ask its insurers to waive recovery rights against the other as customary.]

    3. 14.3

       Risk of loss of or damage to the Equipment stays with Partner, except to the extent caused by Host’s negligence or breach, subject to section 15.

15. 15Liability

    1. 15.1

       Nothing in this agreement limits liability for death or personal injury caused by negligence, for fraud, or for anything else that cannot lawfully be limited.

    2. 15.2

       Subject to clause 15.1, neither Party is liable for indirect or consequential loss, or for loss of profit, revenue, business or goodwill. This does not limit amounts payable under sections 7 to 10.

    3. 15.3

       Subject to clauses 15.1 and 15.4, each Party’s total liability in each calendar year is limited to [amount] / [the greater of [amount] and [100] per cent of the amounts paid to Host in the previous twelve months].

    4. 15.4

       The limit in clause 15.3 does not apply to amounts payable under sections 7 to 10, the indemnity in clause 15.6, or breach of section 13 or 18. Negligent physical damage to the other’s property is subject to a separate limit of [amount] per event.

    5. 15.5

       Host is not liable for losses arising from Partner’s obligations to End Customers, except through service credits under clause 6.1 and for damage to the Equipment under clause 14.3.

    6. 15.6

       Partner shall indemnify Host against claims by End Customers and other third-party claims relating to the Compute Services or Equipment, except to the extent caused by Host’s negligence or wilful breach, provided Host notifies the claim promptly and lets Partner conduct the defence.

16. 16Term and termination

    1. 16.1

       This agreement starts on signing and continues for [number] years from the Commercial Operation Date of the first Phase (the “Initial Term”).

    2. 16.2

       [This agreement renews for successive periods of [number] years unless either Party gives [number] months’ notice before the end of the current term.] / [The Parties shall discuss renewal [number] months before the end of the Initial Term.]

    3. 16.3

       Either Party may terminate by notice if the other commits a material breach not remedied within [60] days of notice, fails to pay an undisputed amount within [30] days of a non-payment notice, or becomes insolvent or enters liquidation, administration or an arrangement with creditors.

    4. 16.4

       Host may terminate by notice if:

       1. (a)Partner has not started Compute Services from the first Phase by the Commercial Operation Date long-stop date in Schedule 2, for reasons not attributable to Host;
       2. (b)[where no Minimum Guaranteed Fee applies,] the Host Share is below [amount] in each of [number] consecutive quarters; or
       3. (c)Partner breaches clause 6.5 in a way that exposes Host to sanctions, penalties or criminal liability.
    5. 16.5

       Partner may terminate by notice if the first Phase is not ready by its readiness long-stop date, or if a chronic failure, as defined in the SLA Schedule, occurs.

    6. 16.6

       Either Party may terminate by notice if an event under clause 21.1 prevents the other from performing a material part of its obligations for over [90] consecutive days.

17. 17Exit

    1. 17.1

       On expiry or termination, an exit period of [number] months [or [number] days after termination for non-payment] (the “Exit Period”) begins, during which both Parties continue to perform. By its end, Partner shall remove the Equipment at its cost, coordinating with Host, and make good any damage caused.

    2. 17.2

       Equipment left after the Exit Period incurs a holding charge of [amount] per [rack] per month. If still there [30] days after Host’s notice to Partner and any financier under a Financier Agreement, Host may disconnect and store it at Partner’s risk and cost, but shall not sell or dispose of it except [by court order] / [under the procedure of the governing law].

    3. 17.3

       [Host may, by notice given at least [number] months before the end of the Initial Term or within [number] days after termination, buy all or part of the Equipment at [fair market value set by an independent valuer] / [the price in Schedule 2], free of security.]

    4. 17.4

       Partner shall notify End Customers and move or end their Compute Services; Host owes them nothing. [If Host terminates under clause 16.3 or 16.4 and buys Equipment under clause 17.3, Partner shall cooperate in transferring the affected Customer Contracts to Host or its nominee, subject to End Customers’ consent.]

    5. 17.5

       Partner shall erase End Customer data from the Equipment, including before any purchase under clause 17.3, and Host shall not access data on Equipment, including any held under clause 17.2.

    6. 17.6

       Partner shall deliver a final Monthly Report within [ten] Business Days after the Exit Period and all amounts shall be settled within [30] days after that; Host’s audit right continues for [number] months. Accrued rights are unaffected, and clauses 4.1, 4.2, 10.3 to 10.6 and 12.2 to 12.4, and sections 15, 17, 18, 20, 21 and 22, survive termination.

18. 18Confidentiality

    1. 18.1

       Subject to section 13, each Party shall keep confidential the terms of this agreement, the Monthly Reports and the other’s non-public business, technical, pricing and customer information, use it only to perform this agreement, and disclose it only to affiliates, advisers, financiers and insurers who need it and are bound by equivalent duties, or as required by law. This section continues for [three] years after this agreement ends.

19. 19Introduction through the platform

    1. 19.1

       The Parties acknowledge that they were introduced through AICapacity and that the terms of use of AICapacity that each of them has accepted continue to apply to any agreement between them arising from that introduction. AICapacity is not a party to this agreement and has no rights or obligations under it.

20. 20Personal data

    1. 20.1

       Each Party processes the business contact details of the other’s personnel as an independent controller, only to manage this agreement and in compliance with data protection law, including the General Data Protection Regulation (EU) 2016/679 (“GDPR”).

    2. 20.2

       Host processes visitor data, such as access records and camera recordings, as an independent controller under its own privacy notice, which Partner shall pass on to its personnel and to End Customers’ visitors.

    3. 20.3

       Host does not access data held on the Equipment. Before Host does any task involving processing personal data for Partner, the Parties shall agree terms meeting Article 28 GDPR. Partner is responsible for data protection compliance for data processed using the Equipment, including as processor for End Customers.

21. 21General

    1. 21.1

       Neither Party is liable for delay or failure caused by events beyond its reasonable control, such as natural disasters, war, epidemics or grid failure beyond the Facility’s backup capacity, if it notifies promptly and mitigates. This does not excuse payment, and late delivery by Partner’s suppliers is not such an event.

    2. 21.2

       This agreement is the entire agreement about its subject matter and supersedes any letter of intent. A variation must be written and signed by both Parties, and a delay in exercising a right is not a waiver. Neither Party may assign this agreement without the other’s consent, not to be unreasonably withheld, except that Partner may assign its rights to a financier by way of security.

    3. 21.3

       An invalid provision shall be replaced by the closest valid one, and the rest continues. Notices go by email to the addresses below, with a courier copy for breach or termination. Only the Parties, and a financier under a Financier Agreement, may enforce this agreement. It may be signed in counterparts and electronically.

22. 22Governing law and disputes

    1. 22.1

       This agreement and any dispute or claim arising out of or in connection with it are governed by the laws of [governing law].

    2. 22.2

       Any dispute arising out of or in connection with this agreement shall be finally resolved by [arbitration under the rules of [arbitral institution], with the seat of arbitration in [city] and the proceedings conducted in English / the courts of [country and city]]. [Disputes about the calculation of amounts payable may first be referred to an independent accountant acting as expert, whose decision binds the Parties except for manifest error.]