VP of Operations

OFFICER AGREEMENT



THIS AGREEMENT (the "Agreement") is executed this 15th day of December, 1998, by and between USinternetworking, Inc., a Delaware corporation USi') and Jeffery L. McKnight ("Officer"). The effective commencement of the Agreement shall be as of July 2, 1998 (the "Effective Date").



WITNESSETH:



WHEREAS, USi is engaged in the developmetrt of computing and communications services for commercial customers, and



WHEREAS, USi desires to employ Officer and Officer desires to be employed by USi in such capacity and under such terms and conditions as hereinafter set forth;



NOW, THEREFORE, in consideration of the mutual covenants and provisions made by the parties and intending to be legally bound, the parties agree as follows:



1. TERM.



USi agrees to employ Officer, and Officer hereby accepts such employment, on the terms and conditions set forth herein for a period of three (3) years as of the Effective Date subject to the termination provisions herewithin.



2. EMPLOYMENT AND DUTIES.



(a) Officer shall have the title of Executive Vice President of Operations and Client Services and shall have such duties that are commensurate and consistent with those with similar positions in the Internetwo rking industry, subject to the authority and direction of the Chief Executive Officer and the Board of Directors of USi.



(b) Officer shall, from the date of execution of this Agreement, devote all skills solely and exclusively to the business interest s and affairs of USi. Officer shall not be a partner, officer, director, stockholder, advisor, investor, creditor, or employee of any business competitive with USi's business without the written consent of USi, which consent may be withheld in USi's sole d iscretion, provided, however, that nothing contained herein shall be deemed to prevent Executive from investing his personal funds in the capital stock or other securities of any corporation whose stock or securities are publicly owned or are regularly tr aded on any public exchange, provided he does not own more than two percent (2%) thereof.



(c) Officer acknowledges and agrees that Officer owes a fiduciary duty of loyalty, fidelity, and allegiance to act at all times in the best interests of USi and t o do no act which would knowingly injure the business, interests, or reputation of USi or, to the best of his knowledge, any of its subsidiaries, affiliates or owners. In keeping with these duties, Officer shall make full disclosure to USi of all business opportunities pertaining to USi's business and shall not appropriate for Officer's own benefit any such business opportunities.



(d) Officer shall at all times comply with (i) all material applicable laws, rules and regulations related to Executives re sponsibilities assumed hereunder and known to Officer, and (ii) all material written corporate and business policies and procedures of USi whether generally applicable to







all of USi's officers or made specifically applicable to Officer as advised in advance by USi to Officer in writing but only to the extent such policies and procedures are not inconsistent with the other provisions of this Agreement.



(e) Officer shall not, from the date of execution of this Agreement, without the prior written approval of USi, which approval USi may withhold in its sole discretion, receive compensation or obtain any direct or indirect financial benefit for services rendered to any Per s on other than USi after the Effective Date. As used herein, the term "Person" shall include all natural persons, corporations, business trusts, associations, companies, partnerships, joint ventures and other entities and governments and agencies and polit ical subdivisions.



3. COMPENSATION.



(a) As compensation for Officer's services, USi hereby agrees to pay Officer, and Officer agrees to accept a base salary equal to $175,000 per year plus consideration for a bonus of $75,000 or greater based upon th e accomplishments of USi for the period ending December 31, 1998. The bonus payment, if any, shall be paid in April of 1999 after the review of USi's accomplishments by the Compensation Committee of the Board of Directors and will be reviewed annually by USi's Compensation Committee for adjustment.



(b) As further compensation and in consideration of Section 2, USi hereby grants to Officer a fully exercisable option to purchase all or any part of 3,000,000 shares of fully paid and non-assessable common stock of USi at a price per share of $0.33 without commission or other charge ("Option Grant"), subject to the terms and conditions of the USINTERNETWORKING, INC.'S 1998 Stock Option Plan ("Plan"), which is incorporated herein by this reference. Officer a cknowledges that the Company contemplates the sales of additional equity securities in the future that may dilute any potential ownership interest the Officer may obtain upon his exercise of all or any part of the Option Grant.



(c) Future compensation enhancements, changes, or modifications may be made by the Compensation Committee formed as a result of the first equity financing that occurred in the second quarter of 1998.



4. BENEFITS.



(a) Officer shall be entitled to medical, dental and life in surance, and offer such benefits provided by USi, pursuant to its general employment policies. Said benefits may be changed from time-to-time in USi's sole business discretion, but only to the extent that USi changes its general employment policies with r espect to such benefits .



(b) Officer shall be entitled to fifteen (15) paid vacation days per year. Unless USi consents in writing, Officer's vacation time shall not be carried over from one contract year to another and Officer shall not be compensate d for any unused vacation time.



(c) USi shall provide, at no cost to Officer, an additional life insurance policy on Officer's life with the beneficiary specified by Officer and the face amount of which shall be equal to twice the Officer's annual bas e salary as provided by this Agreement, less any group insurance provided pursuant to Section 4(a) above.







5. TERMINATION.



(a) USi shall have the right to terminate this Agreement for cause in the event Officer (i) is in violation of any provision of this Agreement; (ii) engages in any illegal or immoral practices or activates which can be reasonably be expected to be materially detrimental to the reputation of USi; (iii) manifests dishonesty, disloyalty, fraud, willful misconduct or material derel i ction in the discharge of his duties hereunder, or (iv) uses, possesses, sells, trades in, or delivers any illegal drug or controlled substance, during working hours or otherwise. In the event of a violation of any provision of this Agreement, the Board o f Directors will advise Officer in writing and allow a 60-day cure period for executive to remedy the violation prior to termination.



(b) Termination without cause shall cause a payment to Officer of the then base and pro-rated bonus times the remainin g number of months in this Agreement. If ...