OUTSOURCING AGREEMENT FOR ADMINISTRATIVE
SERVICES AND TECHNOLOGY DEVELOPMENT
______________________________________________
This Outsourcing Agreement for Administrative Services and Technology Development (the Agreement”), is effective as of [DATE] (the "Effective Date").
BETWEEN: [YOUR COMPANY NAME] (the "Service Provider"), a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at:
[YOUR COMPLETE ADDRESS]
AND: [CLIENT NAME] (the "Client"), a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at:
[COMPLETE ADDRESS]
RECITALS
WHEREAS, the Service Provider is in the business of development, supply and operation of
products and services relating to [DESCRIBE].
WHEREAS, the Client is in the business [DESCRIBE] and possesses the Intellectual Property rights to develop, market, and otherwise exploit [PRODUCTS/SERVICES] listed below and further described in the SCHEDULE A (the "Products"):
WHEREAS, the Client Website, [ADDRESS] (the "Client Website") is designed to sell the Products
here above mentioned.
WHEREAS, the Client desires to have access to and the use of certain assets of which Service
Provider is the owner or licensee.
WHEREAS, the Client also desires to engage Service Provider to perform certain technology
services including Web hosting and source code development services.
WHEREAS, in this Agreement, in exchange for services provided, Service Provider is transferred
the right to use the Client Website as its own Website in its efforts to resell Client’s Products. The
Client may also provide custom versions of the Client Website to other Distributors for use in their
own names ("Private Label").
WHEREAS, the Client is desirous of engaging the Service Provider and the Service Provider is willing to accept such engagement, to provide services hereunder describe to the Client in connection with the Product.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained,
the parties hereto, intending, to be legally bound, agree as follows:
The Client hereby engages Service Provider to provide the following services:
For services described in subsections 1.1 (i), 1.1 (iii) and 1.1 (vii) of this Section 1
(the "Administrative Services"), Service Provider shall be compensated based on the following
allocation of costs and expenses. Allocation of costs and expenses for Administrative Services
shall be determined by headcount as follows: Service Provider shall determine the ratio of
Service Provider employees working full-time on Administrative Services for Client to the
number of Service Provider full-time employees on its payroll, plus [%] of this ratio. Such ratio
shall be applied to Service Provider's total salary, benefits costs and other direct costs and
expenses for its employees to determine the pass-through cost to Client. The same headcount
ratio shall be applied to the cost of insurance provided under Section 1.1 (ii) to determine a
pass-through cost to Client. Additional compensation is as otherwise described in the sections
of this Agreement describing the services to be provided to Client.
Upon request by Client, Service Provider shall provide Client with its budget and estimate of
the costs anticipated to be incurred by Client in connection therewith for the calendar years.
Within [NUMBER] days prior to the commencement of each calendar year of the term of this
Agreement, Service Provider shall provide to Client for Client's approval a similar budget,
adjusted for the forthcoming year. Service Provider shall not be entitled to incur any expense
that is not set forth in such a budget without Client's consent, which shall not be unreasonably
withheld. Nothing in the budget shall be construed to limit Client's ability to require Service
Provider to provide services under Section 1.1 or limit the compensation to which Service
Provider shall be entitled for services rendered to Client that are not described in the budget.
The term "Client Code" refers to the programming and other intellectual property identified in
the SCHEDULE A. Solely in order to provide the services described in Section 1.1 (iv) and
1.1 (ix), Service Provider may retain a reasonable number of copies of the Client Code (in both
object code and source code forms) and all associated documentation which Service Provider
shall treat as Confidential Information of Client in accordance with this Agreement, and, upon
termination or expiration of this Agreement for any reason, Service Provider shall deliver to
Client any and all copies of such Client Code, and modifications and derivative works based
thereon, in whatever form or medium. Service Provider acknowledges and agrees that Client
shall be considered as owner and inventor of all copyrights, trade secrets, inventions,
proprietary rights and intellectual property contained in the Client Code. Service Provider
warrants that no other copies of the Client Code exist on the date hereof.
In the event that Service Provider at Client's request carries out any modifications of or
preparation of any derivative works based on the Client Code, Service Provider shall within
[NUMBER] days of such services deliver to Client updated source and object code, all
copies and documentation in connection therewith.
2.3 Derivative works of Client code
All derivative works based on the Client Code developed by Service Provider pursuant to
Section 1.1(ix) of this Agreement ("Derivative Client Code") shall be owned by Client. Such
ownership rights shall be confirmed in the written terms agreed upon by the parties for such
development or in any other agreement or document the Client reasonably requests Service
Provider to execute. Nothing herein shall entitle Service Provider to create any such derivative
works except pursuant to the provisions of a separate written agreement between the parties
pursuant to Section 1.1(ix) or otherwise.
2.4 License to Service Provider code
Service Provider shall grant Client a perpetual, world-wide, irrevocable non-exclusive license to
the object code and source code versions of certain [PRODUCT], technology and other rights
("Service Provider Code"). Client shall also be entitled to receive copies of the object code and
source code versions of future Service Provider Code developed by Service Provider. Service
Provider shall be the exclusive owner of the Service Provider Code.
2.5 Residual knowledge
The parties mutually acknowledge that during development of the Client Code and the
performance of services as provided in Section 1.1 (ix), Service Provider and its personnel
and agents have and may become acquainted with certain general ideas, concepts,
know-how, methods, techniques, processes, and skills pertaining to the Client Code
(the "Residual Knowledge"). Notwithstanding anything in this Agreement to the contrary, and
regardless of expiration or termination of this Agreement, Client hereby grants Service Provider
a perpetual, worldwide, non-cancelable, irrevocable, royalty free license to use the Residual
Knowledge in conducting its business, other than the Client Code or Client's Proprietary and
Confidential Information. Such license includes the right for Service Provider to use the
Residual Knowledge in providing services and/or creating and licensing programming,
technologies, and other materials for Service Provider's other clients and for Service Provider
itself and its subsidiaries and affiliates, and Client acknowledges and agrees that it shall not
assert against Service Provider, its personnel, or Service Provider's other clients any claim,
prohibition, or restraint from using such Residual Knowledge. ANY SUCH LICENSE IS
GRANTED "AS IS" AND "WITH ALL FAULTS." CLIENT HEREBY DISCLAIMS ANY AND ALL
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR OF
TITLE. CLIENT SHALL HAVE NO LIABILITY WHATSOEVER IN CONNECTION WITH THE
USE BY Service Provider OF SUCH RESIDUAL KNOWLEDGE AND Service
Provider SHALL FOREVER DEFEND, INDEMNIFY AND HOLD HARMLESS CLIENT IN
THE EVENT OF ANY CLAIM OR LOSS INCURRED BY CLIENT ARISING OUT OF USE BY
Service Provider OR ITS AFFILIATES, SUBSIDIARIES, LICENSEES OR ASSIGNEES
OF SUCH RESIDUAL KNOWLEDGE.
The term of this Agreement shall be [NUMBER] years from the date hereof, provided that the
term shall thereafter automatically renew from time to time for successive, additional one-year
terms unless either party shall provide the other party with a written notice of termination at least
[NUMBER] months prior to the termination date (including any termination date as a result of any
renewal period).
Service Provider shall bill the Client, on a monthly basis, a fee reflecting compensation due for
services rendered in the preceding month calculated as provided for in this Agreement. The bill
shall be due and payable within thirty days of receipt. The Client shall have full access to Service
Provider's records to the extent necessary to verify and audit Service Provider's billing procedures,
provided that the Client agrees to keep all such information confidential. The Client shall have the
right, at any time, to review and audit the bills, and in the event that the Client believes the bills
are not prepared by Service Provider in a reasonable and good faith manner, the Client may
request that the bill be independently reviewed and adjusted by an independent certified public
accountant reasonably acceptable to the Client and Service Provider. To the extent that any
investigation or audit reveals a discrepancy in Service Provider's favor in the amount of [%] or more
of amounts paid for the preceding month, Service Provider shall bear the cost of such audit or
investigation.
The Client desires to remain at all times a separate company. Toward that end, all business records,
reports and files prepared or maintained by Service Provider for the Client shall remain the sole and
exclusive property and records of the Client and the Client shall be entitled to their return at any time
upon request. Moreover, all of the Client's funds, accounts receivable or other property shall at all
times be clearly and distinctly maintained as the Client's separate and distinct property and shall
not be combined or commingled with the property of Service Provider. Moreover, Service Provider
shall have no authority hereunder to enter into contracts on behalf of, or otherwise legally bind, the
Client. Although Service Provider shall make recommendations to the Client hereunder, all decisions
whether to accept or reject the advice of Service Provider are up to the Client's total discretion.
The Client covenants and agrees that it will not directly or indirectly for the term of this
Agreement and for a period of two years following the termination of this Agreement:
Service Provider covenants and agrees that it will not directly or indirectly for the term of this
agreement and for a period of two years following the termination of this Agreement:
"Service Provider's Business" shall mean (i) the development, marketing, sale and operation
of Websites, (ii) the development, marketing, sale and operation of private label Websites.
"Client's Business" shall mean (i) the provision (including, but not limited to, development,
licensing and hosting) of business documents template [PRODUCT], or private label versions
thereof (ii) providing press release distribution services, or private label versions thereof.
The term "Competitor" means any person, entity, corporation, partnership, association, joint
venture or other organization that engages in or attempts to engage in the Service Provider
Business or Client Business, respectively.
The geographic scope of the covenant not to compete shall extend world-wide. The Client and
Service Provider each hereby acknowledges that the duration and scope of the covenants not to
compete contained in this section are reasonable.
The provisions of this Section 6 shall survive termination or expiration of this Agreement for any reason.
Subject to the License Agreement, the parties agree, both during the Term of this Agreement and for
a period of two years after termination of this Agreement, but in no event less than [NUMBER] years
from the Effective Date, to hold each other's Proprietary or Confidential Information in strict confidence.
The parties agree not to make each other's Proprietary or Confidential Information available in any
form to any third party or to use each other's Proprietary or Confidential Information for any purpose,
other than the implementation of and as specified in this Agreement and other than use by Client in
the Client Business. Each party agrees to take all reasonable steps to ensure that Proprietary or
Confidential Information of either party is not disclosed or distributed by its employees, agents or
consultants in violation of the provisions of this Agreement. Each party's Proprietary or Confidential
Information shall remain the sole and exclusive property of that party. Each party expressly agrees
to include, maintain, reproduce and perpetuate all notices or markings on all copies of all tangible
media comprising each party's Proprietary or Confidential Information in the manner in which such
notices or markings appear on such tangible media or in the manner in which either party may
reasonably request. The provisions of this Section 7 shall survive termination or expiration of this
Agreement for any reason. For the purposes of this section, "Proprietary or Confidential Information"
shall mean knowledge and information not generally known in the industry which provides a
competitive advantage, including, without limitation, technology, computer programs, research
and development programs, formulas, know-how, forecasts, sales and marketing methods,
financing sources, customer and mailing lists, customer usages and requirements, financial
information and all other confidential information, trade secrets and data. Proprietary or
Confidential Information includes, but is not limited to, the Client Code and the Service Provider
Code and all derivative works based thereon and all trade secrets related thereto. Client Code
and Service Provider Code derivative works shall be the Proprietary and Confidential Information
of its owner. Neither party shall have any obligation with respect to Proprietary or Confidential
Information which:
Each party acknowledges that the provisions and restrictions contained in Section 6 and 7 of this
Agreement are necessary to protect the legitimate continuing interests of Client and Service
Provider and that any breach or violation thereof may result in irreparable injury and damage to
the other party. Accordingly, each party hereby agrees that, in the event of such breach, the other
party may be entitled to seek equitable relief as granted by any appropriate judicial body.
The Client may terminate this Agreement immediately upon delivery of written notice to Service
Provider. In addition, the Client, from time to time, may expand or reduce the scope of services
provided by Service Provider. For example, as illustration, Client may determine that the number
of employees at Client has increased to the level where human resource management should
now be handled "in-house" rather than by Service Provider. The parties recognize that this will
be a flexible and evolving relationship. If Service Provider shall incur any expenses in
connection with and resulting from the Client's expansion, reduction, or termination of any
specific services or provision of technology hereunder, Client shall reimburse Service Provider
for such costs or expenses promptly upon receipt of an itemized account thereof.
Service Provider may terminate the agreement upon not less than [NUMBER] days written
notice in the event that the Client has failed to pay any outstanding invoice on the date due
or within [NUMBER] days thereafter.
The parties recognize that Service Provider currently owns more than a majority of the outstanding
common stock of the Client. It is the intention of the parties, and the parties hereto acknowledge and
agree, that any increase or decrease in Service Provider's ownership of the Client's common stock
shall have no effect on Service Provider's obligations hereunder, except as otherwise expressly
provided herein.
It is acknowledged and agreed that Service Provider's relationship with the Client is at all times
hereunder an independent contractor. The Client shall have no authority over Service Provider's
internal business affairs and decisions. Service Provider shall have no authority to act on behalf of,
or legally bind the Client, and Service Provider shall not hold itself out as having any such authority.
This Agreement shall not be construed as creating a partnership or joint venture.
Client shall indemnify and hold Service Provider harmless against any and all liabilities, losses,
damages, judgments, claims, causes of action, and costs (including attorneys’ fees and
disbursements) which Service Provider may hereafter incur, suffer, or be required to pay, defend,
settle, or satisfy as a result of third party claims against Service Provider based on or arising out of:
(i) representations or warranties made by Client to its Private Label customers or (ii) Client's failure
to comply with its obligations under Section 1.1 (v).
Neither party shall be in default of this Agreement or liable to the other party for any delay or
default in performance where occasioned by any cause of any kind or extent beyond its control,
including but not limited to, armed conflict or economic dislocation resulting there from;
embargoes; shortages or labor, raw materials, production facilities or transportation; labor
difficulties; civil disorders of any kind; action of any civil or military authorities (including
priorities and allocations); fires; floods; telecommunications failures; Internet slow-downs;
and accidents. The dates on which the obligations of a party are to be fulfilled shall be
extended for a period equal to the time lost by reason of any delay arising directly or
indirectly from:
Whenever possible, each provision of this Agreement will be interpreted in such a manner as
to be effective and valid under applicable law, but if any provision hereof is held by a court of
competent jurisdiction to be prohibited or invalid, such prohibition or invalidity shall not affect the
remaining provisions of this Agreement. In the event a court of competent jurisdiction shall
determine and hold that the covenants contained herein are invalid or unenforceable for any
reason, the parties hereby request that such court reform the provisions hereof in a manner to
cause the covenants contained herein to be enforceable as closely as possible to the way in
which originally written.
This Agreement may be executed in any number of counterparts, each of which, when so
executed, shall be deemed to be an original, and all of which shall together constitute but a
single instrument.
The parties hereby agree to execute such other documents and perform such other acts as
may be reasonably necessary or desirable to carry out the purposes of this Agreement.
Any and all notices provided for herein shall be in writing and shall be considered as properly
given if delivered to the party or sent by registered or certified mail, postage prepaid, to the
parties hereto at the addresses set out below opposite their names or such other address or
to the attention of such other person as the party shall have specified by prior written notice.
Any notice under this Agreement shall be deemed to have been given (a) if delivered in person,
when so delivered or refused; (b) if sent by facsimile or overnight courier, [NUMBER] business
days following transmission or delivery to courier (as the case may be; or (c) if by registered or
certified mail, [number] days following deposit in the Mail.
If to the Client:
ATTN. [NAME], [COMPANY NAME], [COMPLETE ADDRESS], [FAX NUMBER]
If to Service Provider:
ATTN. [NAME], [YOUR COMPANY NAME], [YOUR COMPLETE ADDRESS],
[YOUR FAX NUMBER]
This Agreement shall bind and inure to the benefit of the parties, and their respective successors,
heirs and assigns.
This Agreement and the obligations of the parties hereunder shall be interpreted, construed and
enforced be governed and construed by the laws of the state of [YOUR STATE/PROVINCE].
If either party brings suit or arbitration against the other to enforce the terms of this Agreement,
the prevailing party shall be entitled to recover all reasonable costs, including attorneys' fees,
from the other party as part of any judgment or award.
This Agreement shall not be assignable in whole or in part by Service Provider or Client without
the other party's prior written consent, and any attempted assignment without such consent shall
be void, provided that Client may assign this Agreement to any person acquiring all or substantially
all of its assets without obtaining such consent.
The provisions of this Agreement which by their terms survive the termination of this Agreement,
including Sections 6 and 7, or expressly require action subsequent to termination of this
Agreement shall survive the termination of this Agreement to the extent set forth in such
provisions.
IN WITNESS WHEREOF, the parties have executed this Agreement at [designate place of execution], with full knowledge of its content and significance and intending to be legally bound by the terms hereof the day and year first above written.
SERVICE PROVIDER CLIENT
Authorized Signature Authorized Signature
_______________________ ___________________________
Print Name and Title Print Name and Title
SCHEDULE A
THE PRODUCTS