Payroll Services Contract

PAYROLL SERVICES CONTRACT

This Payroll Services Contract (the "Agreement") is made effective as of between Client Name: with principal address , and Service Provider: , with principal address .

RECITALS

WHEREAS, Client is an employer that engages one or more employees and requires payroll processing, tax withholding, benefit deduction administration, and related services; and

WHEREAS, Provider is duly qualified and experienced in providing payroll processing and related administrative services and represents that it has the capacity and systems necessary to perform such services in compliance with applicable law; and

WHEREAS, the parties desire to set forth the terms and conditions under which Provider will perform payroll services for Client.

NOW, THEREFORE, in consideration of the mutual promises contained herein, the parties agree as follows:

1. SERVICES

Provider shall perform payroll processing services for Client including: calculation of wages, withholding of federal, state and local taxes, administration of garnishments and deductions, preparation and filing of payroll tax returns and reports, issuance of paychecks and direct deposits, preparation of year-end wage statements, and preparation of standard payroll reports (collectively, the "Services"). Provider shall perform the Services in accordance with generally accepted industry practices and applicable law.

Service commencement date: . Payroll frequency: . Payroll cutoff (submission) day: .

2. FEES AND PAYMENT

Client shall pay Provider the fees set forth in this Section. Fees consist of a base service fee and per-employee fees. Base monthly fee: $. Per employee per pay period fee: $.

Fees shall be invoiced and payable within days of invoice. Late payments shall accrue interest at a rate of .

3. CLIENT RESPONSIBILITIES

Client shall timely and accurately provide all payroll data required by Provider, including but not limited to employee names, addresses, Social Security numbers or other tax identification numbers, hire and termination dates, hours worked, pay rates, changes in withholding, benefit deductions, garnishment notices, and any other information necessary for payroll processing. Client acknowledges that Provider's ability to perform the Services depends on Client's timely cooperation.

4. PROVIDER OBLIGATIONS

Provider shall (a) process payroll in a timely manner in accordance with the schedule agreed by the parties; (b) prepare and file payroll tax returns and reports that Provider is expressly engaged to file; (c) maintain commercially reasonable security measures to protect Client data; and (d) provide routine payroll reports to Client. Provider warrants that it will perform the Services with the degree of skill and care generally exercised by reputable providers of similar services.

5. TAX FILINGS, PENALTIES AND LIABILITY

Provider will prepare and file payroll tax returns only for the jurisdictions and filings expressly agreed in writing. Client retains ultimate responsibility for the accuracy and timely submission of all payroll data. Client is responsible for any penalties, interest, or assessments resulting from Client's failure to provide accurate or timely information. If Provider negligently causes a filing error, Provider's liability shall be governed by the limitations set forth in this Agreement.

6. CONFIDENTIALITY

Each party acknowledges that it may receive Confidential Information of the other. "Confidential Information" means all nonpublic business, technical, employee and financial information disclosed by a party. Provider shall use Confidential Information solely to perform the Services and shall not disclose such information except to employees, subcontractors or professional advisors with a need to know and who are bound to protect the information. Confidential Information does not include information that is or becomes publicly available other than by breach of this Agreement or that is rightfully obtained by the receiving party from a third party.

7. DATA SECURITY AND BACKUP

Provider will maintain commercially reasonable administrative, physical, and technical safeguards to protect Client's electronic payroll data. Provider shall maintain routine backups of payroll data and shall restore data in accordance with Provider's disaster recovery procedures. Provider is not liable for data loss resulting from events beyond Provider's reasonable control provided Provider follows its routine backup procedures.

8. TERM AND TERMINATION

This Agreement shall commence on the effective date set forth above and shall continue for an initial term of , and thereafter shall renew automatically for successive terms of unless either party provides written notice of nonrenewal at least days prior to the end of the then-current term.

Either party may terminate this Agreement for material breach by the other party if the breaching party fails to cure such breach within days after receipt of written notice specifying the breach. Termination shall not relieve Client of its obligation to pay fees accrued through the effective date of termination.

9. TRANSITION ASSISTANCE

Upon termination, Provider shall, at Client's written request and subject to payment of any outstanding fees, provide reasonable transition assistance for a period of days to enable Client to transfer payroll responsibilities to a successor provider. Provider may charge a reasonable one-time transition fee of $.

10. WARRANTIES; DISCLAIMER

Provider warrants that the Services will be performed in a professional manner consistent with industry standards. EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH IN THIS SECTION, PROVIDER DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NONINFRINGEMENT.

11. LIMITATION OF LIABILITY

EXCEPT FOR LIABILITY ARISING FROM WILLFUL MISCONDUCT, GROSS NEGLIGENCE, OR A BREACH OF CONFIDENTIALITY OR DATA SECURITY OBLIGATIONS, IN NO EVENT SHALL EITHER PARTY'S AGGREGATE LIABILITY ARISING OUT OF OR RELATED TO THIS AGREEMENT EXCEED THE GREATER OF (A) AMOUNTS PAID BY CLIENT TO PROVIDER IN THE SIX (6) MONTHS PRECEDING THE EVENT GIVING RISE TO THE CLAIM OR (B) $.

12. INDEMNIFICATION

Client shall indemnify, defend and hold harmless Provider from and against any and all claims, liabilities, losses, damages, costs and expenses (including reasonable attorneys' fees) arising out of Client's breach of this Agreement, Client's failure to provide accurate payroll information, or Client's violation of applicable law. Provider shall indemnify and hold Client harmless from claims to the extent caused by Provider's gross negligence or willful misconduct in performing the Services.

13. INSURANCE

Provider shall maintain commercial general liability and professional liability insurance in amounts sufficient to cover its obligations under this Agreement. Upon reasonable request, Provider shall provide Client with written evidence of such insurance.

14. NOTICES

All notices required or permitted under this Agreement shall be in writing and delivered to the addresses set forth below or to such other address as a party may designate by notice. Notices shall be deemed given when delivered personally, one business day after delivery to a commercial overnight carrier, or three business days after deposit in certified mail, return receipt requested.

15. ASSIGNMENT AND SUBCONTRACTING

Neither party may assign this Agreement without the prior written consent of the other party, which consent shall not be unreasonably withheld; provided that Provider may assign or subcontract portions of the Services to third-party vendors provided Provider remains responsible for the performance of such subcontractors.

16. GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of the State of , without regard to its conflict of laws principles.

17. DISPUTE RESOLUTION

The parties shall first attempt in good faith to resolve any dispute arising out of or relating to this Agreement through negotiation between senior representatives. If negotiation fails, the dispute shall be submitted to binding arbitration administered in accordance with commercially reasonable arbitration rules selected by the parties. Judgment on the arbitration award may be entered in any court of competent jurisdiction.

18. ENTIRE AGREEMENT; AMENDMENT; SEVERABILITY

This Agreement constitutes the entire agreement between the parties with respect to its subject matter and supersedes all prior agreements and understandings. No amendment or modification of this Agreement shall be effective unless in writing and signed by both parties. If any provision of this Agreement is held invalid or unenforceable, the remaining provisions shall remain in full force and effect.

19. COUNTERPARTS; SIGNATURES

This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Electronic or facsimile signatures shall be deemed originals for all purposes.

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