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Outsourcing Services Agreement

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Outsourcing Services Agreement Powered By Docstoc
					An Outsourcing Services Agreement is an agreement between a company that wants to
outsource services or functions of its processes to an independent service provider. An
outsourcing service agreement is used to spell out specifics such as the details of
services to be performed by the service provider, level of performance needed,
milestones and deliverables, payments and tax treatments, issues such as security,
confidential information and client data protection, conflict of interest, and other
regulatory and governmental compliances, and ownership of proprietary information.
This agreement contains standard terms and conditions, but additional language may
be added by the user. Use this agreement when a company wants to outsource work to
an independent service provider.
                    OUTSOURCING SERVICES AGREEMENT
        This Outsourcing Services Agreement (this “Agreement”) is hereby made and entered
into on this ______________ day of __________, 20___ (the “Effective Date”) by and between
_____________________ with its principal place of business at _________________ (“Client”)
and     _____________________       with   its    principal    place   of    business    at
____________________________ (“Outsourcer”) (each, a “Party,” and collectively, the
“Parties”).

            WHEREAS, Client desires to hire Outsourcer to perform outsourced services; and

         WHEREAS, Outsourcer desires to be hired by Client to perform such services
regarding [Insert a general description of the services to be performed] (the “Requested
Services”), as an independent contractor, pursuant to the terms and conditions set forth herein.

        NOW, THEREFORE, in consideration of the terms and conditions set forth below and
other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Parties agrees as follows:

I.       PURPOSE

1.1     Client has the need to outsource its Requested Services to a service provider that is
experienced and qualified to provide such Requested Services to Client. Therefore, Client agrees
to hire Outsourcer as an independent contractor to perform the Requested Services described in
the Statement of Work (“SOW”) attached hereto as Exhibit “A” and incorporated herein by
reference.

II.      TERM

2.1     The term of this Agreement (“Term”) shall commence on the Effective Date and continue
with full effect for __ (__) years unless terminated earlier pursuant to Section XVIII of this
Agreement. This Agreement will automatically be extended for ____ (__) additional term(s) of
_____ (__) year each unless one of Outsourcer or Client otherwise gives written notice to the
other at least ____ (___) days prior to the expiration of the Term or any subsequent term.

III.     SERVICES

3.1      As requested by Client during the Term of this Agreement, Outsourcer shall be
responsible for providing to Client the Requested Services and such additional change in SOW
that may be mutually agreed upon in writing by the Parties. The responsibilities of Client with
respect to the Requested Services are set forth in Exhibit “B” attached hereto and incorporated
by reference herein. If there is a conflict between this Agreement and any SOW, then: (a) unless
such SOW otherwise expressly provides that it is intended to modify the terms of this Agreement
or (b) except as otherwise set forth herein, the terms of this Agreement shall control. Each SOW
shall include a full and complete description of the Requested Services to be performed, the
Deliverables, documentation or other materials to be produced or provided to Client, the


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schedule for delivery and completion of each of the foregoing, the applicable fixed price or time
and materials charges, the payments (if any) due upon Client’s acceptance of Deliverables in
accordance with the terms of this Agreement, information on any individuals designated to
perform Requested Services or other work pursuant to the SOW, and such additional information
as the Parties agree upon. Outsourcer shall negotiate in good faith regarding any new SOW that
is requested by Client. For purposes of this Agreement, “Deliverables” shall mean, collectively:
(a) any material(s) that are described as “Deliverables” herein or in any SOW and (b) any other
material(s) prepared by or on behalf of Outsourcer in the course of performing the Requested
Services.

IV.      PERFORMANCE OF SERVICES

4.1     Outsourcer shall, to the best of its ability, render the Required Services in a timely and
professional manner consistent with industry standards, on or before the completion dates set
forth in the applicable SOW(s). The Parties shall cooperate in good faith to agree upon the terms
and conditions upon which Outsourcer may perform any additional services.

4.2     Outsourcer shall observe and make commercially reasonable efforts to comply with all
Client security procedures, rules, regulations, policies (as are provided in writing to Outsourcer),
working hours, and holiday schedules and will use reasonable efforts to minimize any disruption
to Client’s normal business operations. Outsourcer shall make commercially reasonable efforts
to comply with all Client’s information security policies, standards, and guidelines (as are
provided to Outsourcer in writing) while using Client’s systems, networks, and applications, and
when communicating with Client via email and/or over the Internet in the course of performing
the Requested Services and shall notify Client of any situation that will or is reasonably likely to
put Client systems, networks, or applications at risk.

4.3      Client may, from time to time during the Term of this Agreement, request (a) ongoing
additions or changes to the scope of the individual component tasks included in the Requested
Services and/or (b) new or additional ongoing services (collectively, a “Change in SOW”).
Within ___ (__) business days of receipt of such Change in SOW request from Client, if
Outsourcer elects to perform such request, Outsourcer shall provide Client with a written
response (a “Change Order”) detailing the tasks to be performed to accomplish the proposed
changes in scope and/or services set forth in the Change Request, as well as any changes in the
charges that may arise therefrom. Each Change Order shall be in a format substantially similar
to that of the Sample Change Order attached hereto as Exhibit “C.” Outsourcer shall use
reasonable efforts to accommodate each Change Request, at rates no greater than the applicable
rates, if any, set forth in the SOW to which such Change Request applies. Either party, in its sole
discretion, reserves the right to accept, modify, or reject any or all Change Orders or Change
Order requests received from the other party. No Change Order shall bind either party unless
and until both parties have accepted the terms and conditions of such Change Order in writing, in
which event the terms and conditions of such Change Order shall be deemed an amendment to
the applicable SOW.

4.4     The Requested Services shall be provided at Outsourcer’s principal place of business, as
stated above, or at a different location agreed upon by Client.



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4.5     In connection with the performance of the Requested Services, Outsourcer shall:
_________________________________________________ [Instruction: Describe any custom
or customized technology needed to be installed and used by Outsourcer in order to perform
the Requested Services, which latest versions have been used, what necessary approvals and
licenses have been obtained and have yet to obtained, and whether the cost of such technology
is to be borne entirely by one party or both]

4.6    The Parties agree to comply with all applicable federal and state laws and/or regulations
regarding the performance of the Requested Services, specifically, the __________________.
[Instruction: Describe any specific federal, state, or local laws, ordinances, or regulations that
Outsourcer must comply with and if applicable what technology has been adopted to comply
with those]

4.7     The Parties shall work together to identify the impact of any legislative enactments and
regulatory requirements that may relate to how Client uses, and Outsourcer delivers, the
Requested Services. Outsourcer shall be responsible for any fines and penalties arising from any
noncompliance by Outsourcer, its agents, or employees of any laws, ordinances, or regulations
relating to the delivery of the Requested Services, to the extent that such noncompliance was not
caused by Client. Client shall be responsible for any fines and penalties arising from any
noncompliance by Client of any laws, ordinances, or regulations relating to its receipt of the
Requested Services, to the extent that such noncompliance was not caused by Outsourcer, its
agents, or employees.

4.8    Outsourcer shall use commercially reasonable efforts to perform the Requested Services
regardless of changes in legislative enactments or regulatory requirements. If such changes
prevent Outsourcer from performing its obligations under this Agreement, Outsourcer shall
develop and, upon Client’s approval, implement a suitable workaround until such time as
Outsourcer can perform its obligations under this Agreement without such workaround. Upon
the implementation of a workaround, the Parties shall, if applicable, agree upon and implement
an equitable adjustment to the Fees.

V.       CLIENT RESPONSIBILITIES

        In addition to the specific obligations for which Client is responsible, a list of which is set
forth in Exhibit “B” attached hereto, Client shall also undertake the following obligations during
the Term of this Agreement.

5.1     Client shall appoint an individual (“Client Representative”) who, from the Effective Date,
shall serve as the primary Client Representative under this Agreement. Client Representative
shall: (a) have overall responsibility for managing and coordinating the performance of Client’s
obligations under this Agreement, (b) be authorized to act for and on behalf of Client with
respect to all matters relating to this Agreement, (c) define and communicate the Client’s
business priorities to Outsourcer, (d) make timely decisions impacting the Outsourcer’s ability to
perform under this Agreement; and (e) facilitate the implementation of this Agreement
throughout Client’s entire organization. Outsourcer may rely upon the representations and
agreements of Client Representative and consider same as lawfully binding upon Client;



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provided, however, that Client Representative shall not have the authority to enter into written
agreements to modify or supersede this Agreement.

VI.      SERVICE LEVELS

6.1     As of the Effective Date, Outsourcer shall perform the Requested Services in accordance
with generally accepted industry standards and with the specifications and representations made
in this Agreement, including the “Service Levels” set forth in Exhibit “D” attached hereto.

6.2      Adjustment of Service Levels

        Either Party to this Agreement may, at any time and upon notice to the other Party,
initiate negotiations to review and, upon agreement by the Client’s management, adjust any
Service Level that such Party, in good faith, believes is inappropriate at the time. Any decision
to adjust a Service Level must be approved by both Parties.

6.3      Problem Analysis

        Within ___ (__) days of receipt of a notice from Client with respect to Outsourcer’s
failure to provide the Requested Services in accordance with the Service Levels, Outsourcer
shall: (a) initiate a problem analysis to identify the cause of such failure, (b) provide Client with
a report detailing the cause of, and procedure for correcting, such failure, (c) develop a plan to
correct such failure, and (d) provide Client with assurance satisfactory to Client that such failure
will not recur after the correction procedure has been completed. Failure to cure a Service Level
deficiency within ____ (__) days of notice shall cause this Agreement to terminate.

6.4      Measurement and Monitoring Tools

        Outsourcer shall implement the necessary measurement and monitoring tools and
procedures required to measure and report Outsourcer’s performance of the Requested Services
against the applicable Service Levels. Such measurement and monitoring shall permit reporting
at a level of detail sufficient to verify compliance with the Service Levels and shall be subject to
audit by Client. Outsourcer shall provide Client and Client’s agents with reasonable amounts of
information and access to such tools and procedures upon request, for verification purposes.
Outsourcer shall measure and report its performance against the Service Levels each month, on
or before the _____ (___) business day of the following month. Measurements of availability
shall exclude scheduled downtime, delays in processing schedules requested by or caused by
Client, and unscheduled downtime to the extent attributable to Force Majeure Events, or the acts
or omissions of Client, its employees, agents, third-party contractors, and/or suppliers.
Outsourcer shall meet with Client Representative at least quarterly to review Outsourcer’s actual
performance against the Service Levels and shall recommend remedial actions to resolve
performance deficiencies.




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6.5      Continuous Improvement and Best Practices

        Outsourcer shall: (a) on a continuous basis, as part of its total quality management
process, identify, as appropriate, ways to improve the Service Levels and (b) identify and apply
proven techniques and tools from other installations within its operations that would benefit
Client either operationally or financially. Service Levels shall be adjusted by written agreement
of the Parties from time to time, but no less frequently than at the end of each anniversary of the
Effective Date, to be made higher or more stringent so as to reflect changes in technology,
competition, changes in Client’s business and environment, and/or other changes in
circumstances.

6.6      Temporary Suspension of Service Levels

          In the event, and to the extent, that Outsourcer fails to meet a specific Service Level as
a consequence of material errors or omissions of Client or its employees, contractors, or agents,
such Service Level will be temporarily suspended for such reasonable amount of time as is
necessary for Outsourcer to return to compliance, provided that Outsourcer shall use its best
efforts to return to compliance as soon as possible. Outsourcer shall take such reasonable
precautions as it deems necessary to prevent the recurrence of any such event.

VI.      OUTSOURCER’S PERSONNEL

7.1      Outsourcer Project Manager

        Outsourcer shall appoint an individual (the “Outsourcer Project Manager”) and designate
his/her backup, who, beginning on the Effective Date, shall serve as the primary Outsourcer
representative under this Agreement. Outsourcer’s appointment of any Outsourcer Project
Manager shall be subject to Client’s reasonable approval. The Outsourcer Project Manager shall:
(a) have overall responsibility for managing and coordinating the performance of Outsourcer’s
obligations under this Agreement and (b) be authorized to act for and on behalf of Outsourcer
with respect to all matters relating to this Agreement. Client may rely upon the representations
and agreements of the Outsourcer Project Manager and consider same to be lawfully binding on
the Outsourcer; provided, however, the Outsourcer Project Manager shall not have the authority
to enter into written agreements to modify or supersede this Agreement, except to the extent this
Agreement is modified by Change Orders executed by the Outsourcer Project Manager.

7.2      Subcontractors

        a.    Outsourcer shall have the right, at its sole discretion, to use subcontractors to
assist Outsourcer in performing work related to the Requested Services, subject, however, to
such subcontractor(s) entering into appropriate agreements requiring such subcontractor(s) to
adhere to the non-compete, non-solicit, confidentiality, and non-disclosure provisions of this
Agreement.




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       b.      Outsourcer shall be responsible for the work and activities of each of its
subcontractors, including each such subcontractor’s compliance with the terms of this
Agreement. Outsourcer shall be responsible for all payments to its subcontractors.

(ALTERNATIVELY: Outsourcer shall not subcontract or otherwise delegate the performance of
the Requested Services or its other obligations hereunder without Client’s prior written consent,
whether in a particular SOW or otherwise; provided that in the event Client so consents,
Outsourcer shall remain directly responsible and liable to Client for the work and activities of
each such subcontractor and for each such subcontractor’s compliance with this Agreement, as
well as for any payments required to be made to such subcontractors.)

[Add additional provisions about training of personnel, minimum proficiency levels required
of Outsourcer’s personnel etc. according to requirements]

VIII.       SECURITY OBLIGATIONS

8.1      At all times during the Term, Outsourcer shall be fully and solely responsible for
ensuring the integrity of Client’s Data and the security of the storage, processing, compilation, or
transmission of all Client’s Data and of all equipment, storage facilities, and transmission
facilities on which or through which Client’s Data is stored, processed, compiled, or transmitted,
including, but not limited to, the prevention and detection of Outsourcer employee fraud, abuse,
or other inappropriate use or access by any Outsourcer employee. In this respect, Outsourcer
shall perform, among other things, all the tasks and take all the measures described in Exhibit
“E” and shall take such other initiatives or measures as necessary and appropriate under the
circumstances.

IX.         CLIENT-RETAINED AUTHORITY AND OBLIGATIONS

9.1      Client Authority

          Client shall retain all decision-making authority with respect to the overall assessment
and direction of the Requested Services, introduction of projects and SOW, and modification or
discontinuance of SOW and projects. Outsourcer shall cooperate with Client and provide Client
with advice, information, and assistance in identifying and defining data management projects
outside the scope of the Requested Services and future requirements to meet Client’s business
objectives.

9.2      Access to Personnel and Information

          Client shall reasonably cooperate with Outsourcer in all matters relating to
Outsourcer’s performance of the Requested Services. Such cooperation shall include (but not be
limited to) reasonable access to Client’s administrative, technical, and other similar personnel as
reasonably required by Outsourcer in providing the Requested Services.




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X.       INTELLECTUAL PROPERTY RIGHTS

10.1     Outsourcer Intellectual Property

       a.      For purposes of this Agreement, “Outsourcer Intellectual Property” shall mean all
software or other intellectual property (including writings, discoveries, inventions, or other
materials covered by any rights of copyright, trademark, patent or any rights similar thereto,
whether registered, unregistered, or otherwise protectable as trade secret, proprietary, or
confidential information) owned or developed by, or otherwise proprietary to, Outsourcer.
Outsourcer Intellectual Property shall also include all programs, documentation, and the tangible
media on which such programs and documentation are recorded, as well as all reports,
technology, training materials, forms, specifications, and other intellectual property owned,
developed by, or proprietary to Outsourcer, for use in providing the Requested Services
hereunder or otherwise in its business.

         b.      All Outsourcer Intellectual Property is and will remain the property and
confidential information of Outsourcer or its third-party licensors, and Client shall have no right,
title, or interest therein except to the extent of such limited right to use such particular portions
thereof as are necessary to enable the Parties to perform their respective obligations hereunder or
except as may otherwise be provided in any separate license agreements. No use of Outsourcer
Intellectual Property or equipment containing Outsourcer Intellectual Property shall confer any
rights in such Outsourcer Intellectual Property upon Client.

10.2     Client Intellectual Property

        a.     For purposes of this Agreement, “Client Intellectual Property” shall mean all
software or other intellectual property (including any writings, discoveries, inventions or other
materials covered by any rights of copyright, trademark or patent or any rights similar thereto,
whether registered or unregistered, or otherwise protectable as trade secret, proprietary or
confidential information) owned or developed by, or otherwise proprietary to, Client. Client
Intellectual Property shall also include all programs and documentation therefore and the
tangible media on which such programs are recorded, as well as all reports, technology, training
materials, forms, specifications, and other intellectual property owned or developed by or
proprietary to Client.

        b.      All Client Intellectual Property is and will remain the property and confidential
information of Client or its third-party licensors, and Outsourcer shall have no right, title, or
interest therein except to the extent of such limited right to use such particular portions thereof as
is necessary to enable the Parties to perform their respective obligations hereunder or except as
may otherwise be provided in any separate license agreements. No use of Client Intellectual
Property or equipment containing Client Intellectual Property shall confer any rights in such
Client Intellectual Property upon Outsourcer.

        c.     Client shall be the sole and exclusive owner of all of the Work Product resulting
from the performance of the Requested Services, and of all copyright, patent, trademark, trade
secret, and other proprietary rights in such Work Product. Ownership of Work Product will



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inure to the benefit of Client from the date of creation, or of fixation in a tangible medium of
expression, as applicable, of such Work Product. Each copyrightable aspect of the Work Product
will be considered as though it was a “work made for hire” within the meaning of the Copyright
Act of 1976, as amended. If, and to the extent that, the Work Product, or any part thereof, is
found, as a matter of law, not to be a “work made for hire” within the meaning of the Copyright
Act of 1976, as amended, Outsourcer hereby assigns and agrees to assign to Client exclusively
all right, title, and interest in and to the Work Product, and all copies thereof, and the copyright,
patent, trademark, trade secret, and all other proprietary rights in the Work Product, without
further consideration, free from any claim, lien for balance due, or rights of retention thereto on
the part of Outsourcer. “Work Product” shall mean all Deliverables, notes, memoranda, works
of authorship, information, developments, ideas, concepts, designs, know-how, techniques,
software codes, etc. (OR Add customized information) created by Outsourcer for Client’s
benefit pursuant to this Agreement.

10.3     Rights and Licenses

          Outsourcer shall be responsible for obtaining from third parties all rights and licenses
required to perform the Requested Services. With respect to all technology used and to be used
by Outsourcer to perform the Requested Services hereunder, Outsourcer hereby grants and
agrees to grant to Client, or causes to be granted by the licensor thereof, without additional
charge, such licenses and sublicenses as may be necessary in order for Client and its authorized
representatives, to use, or receive the benefits of the use by Outsourcer, of such technology in
connection with the Requested Services. Further, Outsourcer shall exercise its best efforts to
obtain from third parties on behalf of Client, without additional charge, such licenses,
authorizations, or consents as may be necessary for Client and its authorized representatives to
use any technology necessary for Client (or its authorized representative) to continue to perform
the Requested Services for Client after the smooth transition handover of Requested Services
during termination.

10.4     Adverse Action

          Each of the Parties hereto covenants to perform its responsibilities under this
Agreement in a manner that does not infringe, or constitute an infringement or misappropriation
of, any patent, trade secret, copyright, or other intellectual property right of any third party, or a
violation of the other Party’s software license agreements or intellectual property rights disclosed
to or known by such Party.

XI.      DATA AND REPORTS

11.1     Ownership of Client Data

        All Client Data is, or will be, and shall remain the property of Client. Client Data shall
not, without Client’s written approval, be (a) used by Outsourcer or Outsourcer Agents other
than in connection with providing the Requested Services, (b) disclosed, sold, assigned, leased,
or otherwise provided to third parties by Outsourcer or Outsourcer Agents, or (c) commercially
exploited by or on behalf of Outsourcer or Outsourcer Agents.



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11.2     Client Information

        Client has full responsibility for providing correct and up-to-date information to
Outsourcer in connection with the performance by Outsourcer of the Requested Services.
Outsourcer shall have no responsibility or liability for any error, inadequacy, or omission that
results from untimely, inaccurate, or incomplete information, data, documents, or other records
delivered, supplied, or made available to Outsourcer by Client or at the direction or under the
authority of Client, except to the extent such liability is caused by Outsourcer’s failure to
perform Requested Services in accordance with the terms of this Agreement.

XII.     NON-SOLICITATION

12.1 Except as otherwise expressly provided in this Agreement or obtained with Outsourcer’s
prior written consent, during the Term and for ____ (___) years after termination or expiration of
this Agreement, Client agrees not to solicit or hire any of Outsourcer’s or its affiliates’ and
contractors’, partners, employees, and/or agents that become known to Client as a result of the
Requested Services provided under this Agreement. Except as otherwise expressly provided in
this Agreement or with Client’s prior written consent, during the Term of this Agreement and for
____ (___) years after termination or expiration of this Agreement, Outsourcer agrees not to
solicit or hire any of Client’s, or its affiliates’ and contractors’, partners, employees and agents
that become known to Outsourcer as a result of providing the Requested Services under this
Agreement. Notwithstanding the foregoing, either Party may at any time hire any contractor,
partner, employee, or agent of the other Party that responds to a general solicitation to the public.

XIII. NON-COMPETE

        Outsourcer will not, during the term of this Agreement, and for a period of ____ (___)
years following termination hereof: (a) directly or indirectly engage in any Competitive Business
(as defined below), whether such engagement shall be as an employer, officer, director, owner,
employee, partner, or any other capacity or (b) assist others in engaging in any Competitive
Business. As used in this section, “Competitive Business” shall mean a business providing
products or services similar to, or in competition with, those provided by Client during the Term
of this Agreement.
.
XIV. CONFIDENTIAL INFORMATION

14.1 During the Term of this Agreement and in the course of Outsourcer’s performance
hereunder, Outsourcer may receive or otherwise be exposed to Client confidential and
proprietary information relating to Client’s business practices, strategies, and technologies
(“Confidential Information”). Confidential Information includes, but is not limited to, Client’s
marketing and customer support strategies, Client’s financial information including sales, costs,
profits, and pricing methods, Client’s internal organization, employee lists, and customer lists,
and Client’s technology including designs, inventions, know-how, techniques, developments,
works of authorship, algorithms, systems, processes, methods, code, formulae, software
programs, discoveries, research and development efforts, manufacturing processes,
hardware/software design and maintenance tools, hardware/software product know-how and



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show-how, and all related notes, drawings, reports, specifications, logic diagrams, flow charts,
operating instructions, manuals, notebooks, data, memoranda, and other documentation, and all
derivatives, improvements, and enhancements to any of the above that were created or developed
by Outsourcer under this Agreement. The Parties agree that all Confidential Information will be
clearly marked as such by the disclosing Party upon delivery to the receiving Party, or, if
communicated orally, will be clearly identified as Confidential Information at the time of
communication and confirmed in writing as confidential within _____ (___) days thereafter.
(The above information must be customized according to the specific need)

14.2     Confidential Information shall not include:

       a.      Information that is or becomes generally available other than as a result of the
breach of this Agreement by either Party;

       b.      Information, the release of which is expressly authorized in writing by the Party
having the legal right to disclose such information;

        c.     Information that is already lawfully known to or independently developed by
either Party without the use of any Confidential Information disclosed hereunder; and

         d.        Information that is lawfully obtained from any third party.

14.3     Use of Confidential Information

       Outsourcer acknowledges that the Confidential Information is extremely valuable
property and of high importance to Client. Accordingly, Outsourcer agrees to segregate all
Confidential Information from information it has from other companies and agrees not to
reproduce any of the Confidential Information without Client’s prior written consent, not to use
the Confidential Information except in the performance of this Agreement, and not to divulge all
or any part of the Confidential Information in any form to any third party, either during or after
the Term of this Agreement.

14.4     Return of Confidential Information

       Upon termination or expiration of this Agreement, Outsourcer agrees to cease using and
to return to Client all whole and partial copies and derivatives of Client’s Confidential
Information, whether in Outsourcer’s possession or under Outsourcer’s direct or indirect control.

14.5     Non Disclosure

        Outsourcer shall, upon receipt of Confidential Information from Client both during the
Term of this Agreement and for a period of _____ (___) years following termination thereof (a)
keep secret and retain in strict confidence any Confidential Information received from Client, (b)
not disclose to any third party any Confidential Information received from Client for any reason
whatsoever, (c) not disclose any Confidential Information received from Client to Outsourcer’s
employees or associates, except on a need-to-know basis and only after instructing each such



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employee or associate not to disclose or otherwise make available any Confidential Information
to any third party and provided each such employee or associate is bound by appropriate
confidentiality agreements with Outsourcer, and (d) not make use of any Confidential
Information received from Client for its own purposes or for the benefit of any third party except
as authorized by this Agreement.

        The provisions of this section on “Confidential Information” shall survive the termination
of this Agreement.

XV.      CONTINUED PROVISION OF SERVICES

15.1     Business Continuity Plan

        Outsourcer agrees to establish, maintain, and implement, per the terms set forth herein, a
“Business Continuity Plan.” The Business Continuity Plan must be in place and delivered to
Client within ______ (__) calendar days after the Effective Date of this Agreement and on each
anniversary of the Effective Date thereafter and shall include, but not be limited to, the items
called for in Exhibit “F” entitled “Recovery” attached hereto, as applicable. If Client objects in
writing to any provision of such a Plan, Outsourcer shall respond in writing within ______ (__)
calendar days, explaining, among other matters Outsourcer wishes to include in its response, the
actions Outsourcer intends to take to cure Client’s objection.

15.2     Force Majeure

        a.     If and to the extent that either Party’s performance of any of its obligations
pursuant to this Agreement is prevented, hindered, or delayed by fire, flood, earthquake,
elements of nature or acts of God, acts of war, terrorism, riots, civil disorders, rebellions,
revolutions, third-party strikes, third-party lockouts or labor difficulties, or any other cause
beyond the reasonable control of such Party (each, a “Force Majeure Event”) and such non-
performance could not have been prevented by reasonable precautions, then the non-performing
Party shall be excused from any further performance of those obligations affected by the Force
Majeure Event for as long as such Force Majeure Event continues and such Party continues to
use its commercially reasonable efforts to recommence performance whenever and to whatever
extent possible without delay, including through the use of alternate sources, workaround plans,
or other means.

        b.     The Party whose performance is prevented, hindered, or delayed by a Force
Majeure Event (“the Notifying Party”) shall immediately notify the other Party by telephone (or
other means as may be available if telephonic communication is unavailable), to be confirmed in
writing within ___ (__) hours of the occurrence of the Force Majeure Event and describe in
reasonable detail the nature of the Force Majeure Event. Upon giving such notice, the Notifying
Party shall be excused from any further performance of those of its obligations affected by the
Force Majeure Event until normal performance can be recommenced.
        c.     The occurrence of a Force Majeure Event does not limit or otherwise affect
Outsourcer’s obligation to provide either normal disaster recovery procedures or any other
disaster recovery services described in section 15.1.



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15.3     Service Level Adjustment

       Upon the occurrence of a Force Majeure Event, Client acknowledges and agrees that the
Service Levels will need to be adjusted for a period of time to account for the Requested
Services affected by the Force Majeure Event. The Parties agree to negotiate in good faith to
determine a time frame and plan for lowering the Service Levels during the pendency of such
Force Majeure Event.

XVI. PAYMENT SCHEDULE AND INVOICES

16.1     Fees

        In consideration of the Requested Services, Client shall pay fees (“Fees”) to Outsourcer
in accordance with the Exhibit “G” attached hereto. Outsourcer shall issue an invoice to Client
on the last day of each month for the Fees then due. The Fees shall be due and payable to
Outsourcer by wire funds transfer or other means acceptable to Outsourcer, to an account
specified by Outsourcer, within ____ (__) days from the invoice date.

16. 2 Time of Payment

        Any sum due pursuant to this Agreement, for which payment is not otherwise specified,
shall be due and payable ____ (__) days after receipt by the Party who owes such invoice of
notice from the other Party in respect of such sum.

16.3     Detailed Invoices

         Outsourcer shall provide invoices with sufficient detail to justify the Fees.

16.4     Late Fees

       Any amount not paid within ____ (__) days after the date due pursuant to this
Agreement shall bear interest, at the maximum penalty rate permissible under law or ____
percent (__%) per month, whichever is higher, from the date such amount was due until the date
such amount is paid.

16.5      Expenses

       All expenses relating to the Requested Services are included in the Fees and shall not be
reimbursed by Client unless agreed to by Client in writing.



16.6     Proration

        All periodic fees or charges under this Agreement shall be computed on a calendar month
basis and shall be prorated on a per diem basis for any partial month.



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16.7     Disputed Amounts

        Client may, in good faith, dispute any invoice or any portion thereof and shall be required
to pay to Outsourcer only the undisputed amounts until the dispute is resolved to Client’s
satisfaction. The failure of Client to pay a disputed amount shall not constitute a breach or
material default by Client, provided that Outsourcer shall have been given notice of the subject
of the dispute.

16.8     Taxes

       a.      Client shall pay any applicable taxes that may be levied on the Requested
Services and performed by Outsourcer hereunder, including without limitation, sales, use, non-
resident, value-added, excise, and similar taxes, but excluding taxes levied or imposed upon the
income or business privileges of Outsourcer.

      b.      To the extent Outsourcer is required to collect and remit any Client tax,
Outsourcer shall invoice Client, as a separate line item, the amount of any such tax.

        c.      Client shall have the right to contest the validity and payment of any Client tax.
Outsourcer agrees to cooperate with Client in all such contests. In the event that Client elects to
contest the validity or payment of any Client tax, Client shall not be required to pay any such tax
until the contest is resolved. In no event shall Outsourcer be required to pay any Client tax and
Client shall remit to Outsourcer any such payment, as well as the payment of any fees, penalties,
or late charges related thereto that Outsourcer may be required to pay, as a result of any
determination in connection with any contest with taxing authorities. Client shall pay such
amount within ____ (__) days of receipt by Client of an invoice from Outsourcer. Client shall
not be responsible for any penalties or late charges assessed due to Outsourcer’s negligence.
Client reserves the right to intervene in any dispute with a taxing authority as to the taxability of
the Requested Services provided to Client pursuant to the Agreement.

XVII. AUDITS

17.1     Right to Audit

        Client reserves the rights to audit, inspect, and make copies or extracts of Outsourcer’s
records and processes associated with Outsourcer’s performance under this Agreement at any
time with ____ (__) days prior notice to Outsourcer. Any audit or inspection will occur during
Outsourcer’s normal business hours. Client’s right to audit, inspect, and make copies or extracts
of Outsourcer’s records and processes shall continue for a period of _____ (___) years following
the termination or expiration of this Agreement.

17.2     Audit Costs and Expenses

       If an audit reveals a discrepancy of ____ percent (__%)or more during the audited period,
then Outsourcer shall, in addition to correcting the discrepancy, also reimburse Client for all
costs of the audit, including without limitation and in addition to, the costs of any third-party



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auditors engaged by Client, the costs of Client’s internal employee auditors for actual working
time, and for travel during normal working hours

17.3     Records

        Outsourcer shall maintain books, records, documents, and other evidence pertaining to
costs, charges, fees, and other expenses incurred in connection with the Requested Services to
the extent and in such detail as will properly evidence all costs for labor, materials, equipment,
supplies, and work, and other costs and expenses of whatever nature for which reimbursement is
claimed under the provisions of this Agreement. Such records shall be retained for a period of
no less than ____ (__) years.

XVIII. EARLY TERMINATION

18.1     For Convenience

        Client shall have the right to terminate this Agreement upon ________(____) months
written notice to Outsourcer.

18.2     Change in Control of Outsourcer

        In the event of a change in ownership and/or management of Outsourcer, Client shall
have the right to terminate the Agreement upon ____ (__) day’s written notice to Outsourcer,
provided that Client shall have delivered such notice to Outsourcer not later than ________ (___)
months following the effective date of such change. Solely for purposes of the preceding
sentence, “ownership” shall mean the legal, beneficial, or equitable ownership, direct or indirect,
of more than fifty percent (50%) of the aggregate of all voting or equity interests in Outsourcer
and “change in management” shall mean any change in the legal, beneficial, or equitable
ownership, direct or indirect, such that management of Outsourcer is no longer with the same
entity as on the Effective Date.

18.3     Termination for Material Default

        This Agreement may be terminated by either Party, by written notice delivered to the
other Party, if the other Party commits a Material Default which remains uncured for
__________ (__) days. Termination shall be effective at 11:59 p.m. on the last day of any
applicable cure period. “Material Default” means: any material failure by Outsourcer to provide
the Requested Services in accordance with applicable Service Levels after stipulated cure period;
any failure to cure breach of sections 10, 12, 13, and 14 herein; the existence of any material
representation or warranty made in this Agreement by either Party that was materially false when
made; insolvency of a Party; and/or the general failure of a Party to pay its debts as they become
due. (Add more if any)




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18.4     Termination for Force Majeure Event

        If a delay or interruption of performance by a Party resulting from its experiencing a
Force Majeure Event exceeds ____ (__) days, then the other Party may terminate the Term,
effective at 11:59 p.m. on the intended date of termination, by delivering to the non-performing
Party written notice of termination specifying the date of termination.

18.5     Effect of Ending of Term

       The expiration or termination of the Term, though ending the obligation of Outsourcer to
provide the Requested Services, will not constitute a termination of the Agreement, which will
continue in effect until all other duties and obligations of the Parties have been performed,
discharged, or excused.

XIX. RELATIONSHIP BETWEEN CLIENT AND OUTSOURCER

19.1 Outsourcer is an independent contractor, not an agent or employee of Client, and is not
authorized to act on behalf of Client. While Client is entitled to provide Outsourcer with general
guidance to assist Outsourcer in completing the scope of work to Client’s satisfaction,
nevertheless Outsourcer is ultimately responsible for directing and controlling the performance
of the task comprising the SOW(s), in accordance with the terms and conditions of this
Agreement.

XX.      REPRESENTATIONS AND WARRANTIES

20.1     By Outsourcer

         Outsourcer represents, warrants, and covenants that:

      a.           Outsourcer has full and unrestricted power and authority to enter into this
Agreement.
         b.        None of the Deliverables infringe upon the proprietary rights of any third party;
and
      c.      The work prepared by Outsourcer does not contain any scandalous, libelous, or
unlawful matter.

20.2     By Client

         Client represents, warrants, and covenants that:

         a.        Client has full and unrestricted power and authority to enter into this Agreement;

       b.      Neither the materials provided by Client for use in connection with the Requested
Services nor the use thereof shall infringe upon the proprietary rights of any third party or violate




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any right of privacy of, or constitute a libel, slander or any unfair competition against any other
right of any person or entity; and

        c.      Any and all other obligations owed to third parties with respect to any activity
contemplated to be undertaken or actually undertaken by Client pursuant to this Agreement are
or will be fully satisfied by Client.

XXI. GENERAL

21.1     Governing Law; Consent to Personal Jurisdiction

        This Agreement will be governed by the laws of the State of ________. Outsourcer
hereby expressly consents to the personal jurisdiction of the state and federal courts located in
the State of _____________ for any lawsuit filed against Outsourcer by Client arising from or
relating to this Agreement. Neither the United Nations Convention on Contracts for the
International Sale of Goods No nor the conflict of law rules of any state or country shall apply to
this Agreement.

21.2      Dispute Resolution

        All disputes shall be finally resolved by arbitration in the State of ________________,
pursuant to the Rules of the American Arbitration Association (“AAA”). Arbitrators shall be
appointed in accordance with said Rules and any consistent provisions of the internal laws
(except conflict of law rules) of the State of _________. The arbitrators shall, at either Party’s
request, give a written opinion stating the factual basis and legal reasoning for the decision in the
English language. The arbitrators so appointed shall have the authority to determine all issues of
fact. The Parties, their representatives, other participants, and arbitrators shall hold the existence,
subject matter, and result of any such arbitration in confidence. Notwithstanding the foregoing,
either Party may, at its sole discretion, seek injunctive relief in any court of competent
jurisdiction (including, but not limited to, preliminary injunctive relief). The prevailing Party in
any legal proceeding brought by one Party against the other Party shall be entitled to recover its
legal expenses, including, but not limited to, the costs of any court or arbitration proceeding and
reasonable attorney fees.

21.3     Severability

        The invalidity or unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision.

21.4     Limitation of Liability [Optional]

        Except to the extent arising pursuant to section 21.6 below, a breach of sections 10, 12,
13, and 14, or in the event of willful misconduct by either Party, in no event shall either Party be
liable to the other Party for indirect, incidental, consequential, special, or exemplary damages
whatsoever, including without limitation, damages for loss of profits, business interruption, or
loss of or unauthorized access to information incurred by the other Party arising out of this



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Agreement (provided that this limitation shall not limit either Party’s obligation to indemnify the
other Party for third-party claims that include such damages), even if such Party has been
advised of the possibility of such damages.

21.5     Limitation of Damages [Optional]

         Except to the extent arising pursuant to section 21.6 below, a breach of sections 10, 12,
13, and 14, or in the event of willful misconduct by either Party, in no event will either Party’s
liability on any claim, loss, or liability arising out of or connected with this Agreement exceed
the amounts paid or to be paid to Outsourcer during the ____ (__) months immediately preceding
the event giving rise to such claim or action by Client.

21.6     Indemnity

        Each Party shall, at its own expense, indemnify and hold harmless, and at the other
Party’s request defend such other Party’s affiliates, subsidiaries, successors, and assigns (and its
officers, directors, employees, sublicensees, and agents) from and against any and all claims,
losses, liabilities, damages, settlements, expenses, and costs (including attorney fees and court
costs) (collectively, “Claim(s)”) that arise directly or indirectly out of or relate to: (a) any breach
(or claim or threat thereof that, if true, would be a breach) of this Agreement, including any
breach or alleged breach of any representation or warranty or (b) the gross negligence or willful
misconduct of a Party’s employees or agents.

21.7     Entire Agreement; Amendment

        This Agreement is the final, complete, and exclusive agreement of the Parties with
respect to the subject matter hereof and supersedes and merges all prior or contemporaneous
representations, discussions, proposals, negotiations, conditions, communications, and
agreements, whether written or oral, between the Parties relating to the subject matter hereof and
all past courses of dealing or industry custom. No modification of or amendment to this
Agreement shall be effective unless in writing and signed by each of the Parties.

21.8     Waiver

        The waiver by either Party of a breach of or default under any provision of this
Agreement shall not be effective unless in writing and shall not be construed as a waiver of any
subsequent breach of or default under the same or any other provision of this Agreement, nor
shall any delay or omission on the part of either Party to exercise or avail itself of any right or
remedy that it has or may have hereunder operate as a waiver of any right or remedy.

21.9     Successors and Assigns

        This Agreement shall be binding upon Outsourcer’s heirs, executors, administrators, and
other legal representatives and shall be for the benefit of Client, its successors, and its assigns.




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21.10 Notices

        All notices provided for in this Agreement shall be made in writing and shall be effective
when either served by hand delivery, electronic facsimile transmission, express overnight courier
service, or by registered or certified mail, return receipt requested, addressed to the Parties at
their respective addresses set forth below, or to such other address or addresses as either Party
may later specify by written notice to the other.

Notices to Client shall be sent to:

                   PERSONAL AND CONFIDENTIAL
                   Address:
                   Fax: (___) _________________
                   Email: ____________________
                   with a copy to:

                   Attorney:
                   Address:
                   Fax: (___) __________________
                   Email: _____________________

Notices to Outsourcer shall be sent to:

                   PERSONAL AND CONFIDENTIAL

                   Address:
                   Fax: (____) ________________
                   Email: ____________________
                   with a copy to:

                   Attorney:
                   Address:
                   Fax: (____) ________________
                   Email: ____________________

      IN WITNESS WHEREOF, the Parties hereto hereby execute this Outsourcing Service
Agreement as of the date first written above.



CLIENT                                                               OUTSOURCER
By:    ______________________                                        By:    ___________________
Name: _______________________                                        Name: ____________________
Title: _______________________                                       Title: ____________________




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                                                  EXHIBIT “A”
                                            STATEMENT OF WORK

        This Statement of Work (“SOW”), effective as of the ______ day of ______, 20__
______ (“SOW Date”) by and between ____________________ (“Outsourcer”) and
________________________ (for purposes of this SOW, “Client ”), is executed pursuant to and
as part of that certain Outsourcing Services Agreement by and between Client and Outsourcer
dated ____________ (the “Agreement”).

        The Parties hereto have entered into the Agreement for the provision of certain rights,
services, resources, and deliverables to Client by Outsourcer. The Agreement contemplates that
the Parties may enter into specific SOWs describing detailed terms and conditions applicable to
specific services, resources, and deliverables to be provided by Outsourcer.
.
        NOW, THEREFORE, for and in consideration of the foregoing and of the agreements of
the Parties set forth below, Client and Outsourcer agree as follows:

1. Requested Services: This shall include, but not limited to, the below:


2. Deliverables


3. Outsourcer Intellectual Property (if any):


4. Schedule and Milestones (If Any).



        IN WITNESS WHEREOF, the Parties have each caused this SOW to be signed and
delivered by their duly-authorized officers, all as of the date first set forth above.

Outsourcer                                                     Client

By:                                                            By:

Name:                                                          Name:

Title:                                                         Title:

Date:                                                          Date:




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                                                  EXHIBIT “B”
                                        CLIENT RESPONSIBILITIES

Outsourcer                                                     Client

By:                                                            By:

Name:                                                          Name:

Title:                                                         Title:

Date:                                                          Date:




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                                                  EXHIBIT “C”
                                          SAMPLE CHANGE ORDER

       This Change Order No. xxx (this “Change Order”), effective as of the ______ day of
______, 20__ (the “Effective Date”), is made pursuant to and as a part of that certain
Outsourcing Services Agreement, dated the ______ day of ______, 20__ by and between
________________________ and ____________________ (the “Agreement”), and the
Statement of Work thereto, dated the ______ day of ______, 20__ (the “SOW”).
       This Change Order is governed by the terms and conditions of the Agreement. Any
terms not otherwise defined herein shall have the meanings set forth in the Agreement. Except
to the extent otherwise expressly set forth in this Change Order, the terms of the SOW shall
remain in full force and effect. The Parties hereto acknowledge having read this Change Order
and agree to be bound by its terms.
       The modification(s) set forth below will impact the following terms of the SOW (please
check all that apply):
[   ] Services              [    ] Deliverables          [   ] Estimated completion date
[   ] Fees                  [    ] Schedule              [   ] Other: _______________ (please specify)

         Provide a detailed description of the proposed modification(s) and their impact on the
SOW:
[ADD DESCRIPTION OF CHANGES]
       IN WITNESS WHEREOF, the Parties hereto have each caused this Change Order to be
signed and delivered by their duly authorized officers, as of the Effective Date set forth above.
Outsourcer                                                     Client

By:                                                            By:

Name:                                                          Name:

Title:                                                         Title:

Date:                                                          Date:




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                                                  EXHIBIT “D”
                                                SERVICE LEVELS

Outsourcer                                                     Client

By:                                                            By:

Name:                                                          Name:

Title:                                                         Title:




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                                                  EXHIBIT “E”
                             OUTSOURCER’S SECURITY OBLIGATIONS




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                                                  EXHIBIT “F”
                                                     RECOVERY


Outsourcer                                                     Client

By:                                                            By:

Name:                                                          Name:

Title:                                                         Title:

Date:                                                          Date:




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                                                  EXHIBIT “G”
                                                          FEES

Outsourcer                                                     Client

By:                                                            By:

Name:                                                          Name:

Title:                                                         Title:

Date:                                                          Date:




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DOCUMENT INFO
Description: An Outsourcing Services Agreement is an agreement between a company that wants to outsource services or functions of its processes to an independent service provider. An outsourcing service agreement is used to spell out specifics such as the details of services to be performed by the service provider, level of performance needed, milestones and deliverables, payments and tax treatments, issues such as security, confidential information and client data protection, conflict of interest, and other regulatory and governmental compliances, and ownership of proprietary information. This agreement contains standard terms and conditions, but additional language may be added by the user. Use this agreement when a company wants to outsource work to an independent service provider.
This document is also part of a package Software Development Starter Kit 17 Documents Included