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Shared Services Agreement

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Shared Services Agreement

This Agreement is made as of by and between Technology Solutions Company, a Delaware corporation ("TSC"), and eLoyalty Corporation, a Delaware corporation ("eLoyalty").

Dated as of 2000

RECITALS

TSC is planning to spin-off certain businesses by transferring those businesses to eLoyalty (or its subsidiaries) and distributing all of the stock of eLoyalty to the stockholders of TSC as a dividend.

As a consequence of the foregoing contemplated actions, eLoyalty will acquire business operations that have traditionally been supported by administrative functions that will remain with TSC after the spin-off.

SECTION 1. DEFINITIONS; RULES OF CONSTRUCTION.

1.1 Definitions. As used in this Agreement (including the Schedules hereto):

(i) "Action" shall mean any action, claim, suit, arbitration, inquiry, subpoena, discovery request, proceeding or investigation.

(ii) "Affiliate" shall mean any Person controlling, controlled by, or under direct or indirect common control with a Party.

(iii) "Agreement" means this Shared Services Agreement dated as of including all Schedules attached hereto.

(iv) "Arbitration Act" shall mean the United States Arbitration Act, 9 U.S.C. ss.ss. 1-14.

(v) "Change in Control" shall mean the acquisition by any individual, entity, group or Person of ownership of or more of the outstanding shares or voting securities.

(vi) "Cost" shall mean cost as determined by TSC.

(viii) "Fully Burdened Cost" shall mean all direct and indirect Costs including allocable overhead.

(ix) "Governmental Authority" shall mean any foreign, federal, state, local or other government, statutory or administrative authority.

(xv) "Term" shall mean the period of time provided in Section 2.

1.2 Other Terms. Terms defined in other Sections of this Agreement will have the meanings therein provided.

1.3 Rules of Construction.

SECTION 2. TERM.

The initial Term of this Agreement shall begin on the Effective Date and end at the end of the day on .

SECTION 3. PERFORMANCE OF SERVICES BY TSC.

3.1 General. From time to time, beginning on the Effective Date, TSC will provide Services to eLoyalty on an "as needed" basis.

3.2 Standard of Care. TSC will use commercially reasonable efforts in the performance of its obligations hereunder.

3.3 Service Modifications. TSC may reasonably supplement, modify, substitute or otherwise alter a Service from time to time.

3.4 Compliance with Law. In performing Services, TSC will comply in all material respects with all laws, rules and regulations.

3.5 Audit. Each of TSC and eLoyalty may audit the other with respect to the performance of Services and costs used to determine amounts payable.

SECTION 4. PROVISION OF ELOYALTY INFORMATION.

To enable TSC to provide the Services, eLoyalty will provide information and access to data as reasonably requested by TSC.

SECTION 5. FEES.

5.1 General. The aggregate Fully Burdened Costs for the Services set forth in Schedule 2 will be allocated on a Service-by-Service basis.

5.2 Sales Taxes. eLoyalty shall pay or reimburse TSC for applicable sales, use, excise, occupation, privilege, value-added, gross-receipts or similar taxes.

5.3 License Fees. If TSC requires consent to use intellectual property for Services, the amounts paid to the licensor shall be equitably allocated between the Parties.

5.4 Cap on Fees. Fees charged to eLoyalty under this Agreement shall not exceed 60% of the aggregate Fully Burdened Cost of all Services.

SECTION 6. INVOICING AND PAYMENT.

TSC will each month submit to eLoyalty for payment a statement of amounts due under this Agreement.

SECTION 7. INDEPENDENCE.

All employees and representatives of TSC providing Services to eLoyalty will be deemed employees or representatives of TSC and not of eLoyalty.

SECTION 8. NONEXCLUSIVITY.

Nothing in this Agreement shall prevent TSC from providing any Service to any other Person.

SECTION 9. CONFIDENTIALITY.

9.1 TSC Information. eLoyalty agrees to hold confidential information concerning TSC in confidence.

9.2 eLoyalty Information. TSC agrees to hold confidential information concerning eLoyalty in confidence.

9.3 Security. Each Party shall be responsible for preventing unauthorized remote access to data transferred or otherwise made available under this Agreement.

9.4 General. The obligations of confidentiality and non-disclosure shall not apply to data and information that the recipient can demonstrate is publicly available, independently developed, or otherwise exempt.

SECTION 10. TERMINATION.

10.1 Grounds for Termination. Each Party shall have the right to terminate this Agreement under specified conditions, including insolvency, dissolution, material default, transfer, or change in control.

10.2 Procedures on Termination. On any termination of this Agreement, TSC will cooperate with eLoyalty as reasonably necessary to avoid disruption.

10.3 Termination Costs. If eLoyalty elects to terminate any Service and such termination results in termination charges, eLoyalty will reimburse TSC therefor.

SECTION 11. LIMITATION OF LIABILITY AND REMEDY.

11.1 Damages. In no event shall either Party be liable for lost profits or consequential damages.

11.2 eLoyalty's Exclusive Remedies. eLoyalty's exclusive remedies against TSC shall be refunds, reperformance, indemnification, equitable relief, termination, and actual damages limited to fees paid.

11.3 TSC's Exclusive Remedies. TSC's exclusive remedies against eLoyalty shall be payment, suspension, indemnification, equitable relief, and termination.

SECTION 12. FORCE MAJEURE.

The obligations of either Party to perform under this Agreement shall be excused during periods of delay caused by matters beyond the control of the obligated Party.

SECTION 13. ASSIGNMENT.

13.1 Assignment with Consent. Neither Party may Transfer its interest in the Agreement without the prior written consent of the other Party.

13.2 Assignment in Event of Acquisition. Either Party may Transfer its rights and obligations to an acquiring entity that assumes all obligations hereunder.

SECTION 14. INDEMNIFICATION AND INSURANCE.

14.1 TSC's Obligation. TSC agrees to indemnify and hold eLoyalty and the eLoyalty Indemnified Parties harmless.

14.2 eLoyalty's Obligation. eLoyalty agrees to indemnify and hold TSC and the TSC Indemnified Parties harmless.

14.3 Third-Party Claims. If any third party makes a claim, the procedures for control and settlement of proceedings shall apply.

14.4 Insurance. Each Party is responsible for carrying any insurance desired by it in its sole discretion.

SECTION 15. DISPUTES.

15.1 Agreement to Arbitrate. The procedures for discussion, negotiation and arbitration shall apply to all disputes arising under this Agreement.

15.2 Escalation and Mediation. Each Party agrees to use reasonable efforts to resolve disputes and retain a mediator.

15.3 Procedures for Arbitration. Disputes may be resolved by binding arbitration after completion of mediation.

15.4 Arbitrator. If the amount in dispute is less than $500,000, the mediator shall serve as the sole arbitrator.

15.5 Hearings. Matters shall be presented to the arbitrator at a hearing by written submissions.

15.6 Discovery and Certain Other Matters. Limited document production may be requested, subject to the rules in this Section.

15.7 Certain Additional Matters. Arbitration awards shall be bare awards limited to a holding for or against a Party.

15.8 Law Governing Arbitration Procedures. The interpretation of Article 15 shall be governed by the Arbitration Act and other applicable federal law.

15.9 Choice of Forum. Any arbitration hereunder shall take place in Chicago, Illinois.

SECTION 16. MISCELLANEOUS PROVISIONS.

16.1 Notices. All notices, requests, claims, demands and other communications required or permitted hereunder shall be in writing.

16.2 Entire Agreement. This Agreement is the entire agreement between the Parties hereto with respect to the subject matter hereof.

16.3 Choice of Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Illinois.

16.4 Amendment; Waiver. No amendment or modification shall be binding unless reduced to writing and signed.

16.5 Severability. Any provision prohibited or unenforceable in any jurisdiction shall be ineffective to that extent only.

16.6 Relationship of the Parties. Neither Party constitutes the other as its agent, partner, joint venturer, or legal representative.

16.7 Survival. The rights and obligations of the Parties under certain Sections shall survive termination.

16.8 Counterparts. This Agreement may be executed in one or more counterparts.

16.9 Records Retention. Each Party will retain all information obtained or created in the course of performance hereunder in accordance with records retention guidelines.

16.10 Beneficiaries. This Agreement is solely for the benefit of the Parties hereto and their respective Affiliates, successors and permitted assigns.

NOTICES

If to TSC:

Technology Solutions Company

205 North Michigan Avenue

Suite 1500

Chicago, Illinois 60601

Attention: General Counsel

Telephone:

Facsimile:

If to eLoyalty:

eLoyalty Corporation

205 North Michigan Avenue

Suite 1500

Chicago, Illinois 60601

Attention: Chief Financial Officer

Telephone:

Facsimile:

SIGNATURES

TECHNOLOGY SOLUTIONS COMPANY

By:

Name:

Title:

ELOYALTY CORPORATION

By:

Name:

Title:

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What a Shared Services Agreement Is and When It’s Used

A Shared Services Agreement is a bilateral or multilateral contract that sets out the terms under which one organization provides administrative, technical, or operational services to another in exchange for fees, cost allocations, or reciprocal support. Typical services include finance, human resources, IT, procurement, and facilities management. The agreement defines scope of services, service levels, performance metrics, billing and invoicing procedures, cost-sharing formulas, governance mechanisms, term and termination rights, confidentiality, data protection, indemnities, and signature and execution procedures to create enforceable obligations between the parties.

Primary Benefits of Using a Shared Services Agreement

Using a Shared Services Agreement clarifies responsibilities, aligns cost allocation, reduces duplication, and sets measurable service levels and remedies. It protects parties through confidentiality, liability limits, and dispute resolution clauses, providing legal certainty for ongoing intercompany or interagency service arrangements.

Primary Benefits of Using a Shared Services Agreement

Who Typically Uses a Shared Services Agreement

Organizations use Shared Services Agreements when centralizing functions, assigning costs, or formalizing recurring services across entities.

  • Corporate groups consolidating HR, finance, or IT to reduce overhead and standardize processes.
  • Public agencies sharing specialized services to save costs and improve service continuity.
  • Third-party providers and outsourcing partners formalizing recurring services and SLAs.

The document suits corporate groups, public agencies, outsourcing partners, and affiliates that need clear billing, governance, and performance metrics.

Core Sections to Include in a Professional Agreement

Primary sections of a professional Shared Services Agreement cover scope, service levels, pricing, governance, liability, and change management and data protection.

Scope

Define services provided, specific deliverables, geographic and organizational boundaries, exclusions, frequency and reporting cadence. Clear scope prevents disputes and supports accurate cost allocation and SLA measurement.

Service Levels

Establish measurable SLAs, KPIs, reporting intervals, remedies for misses, and escalation paths. Include metrics, uptime targets, response times, and a process for SLA review and adjustment.

Pricing & Billing

Specify cost allocation methodology (fixed fee, cost-plus, chargeback), billing cycles, invoicing details, expense pass-throughs, tax treatment, and dispute resolution for billing discrepancies.

Governance

Create steering committees, roles and responsibilities, regular review meetings, change control procedures, and decision-making authority to manage service delivery and contract amendments.

Liability & Indemnities

Limit liability, define indemnification obligations, insurance requirements, and exclusions. Address data breaches, regulatory fines, and third-party claims with clear caps and notice requirements.

Change Management

Define a formal change request process, approval thresholds, impact assessments, cost reallocation rules, transition plans, and timelines to manage scope changes without service disruption.

Step-by-Step: Drafting, Approving, and Executing the Agreement

Follow these sequential steps to draft, review, approve, and execute a Shared Services Agreement correctly and efficiently.

  • 01
    Draft: Define scope, SLAs, pricing, governance, and term.
  • 02
    Review: Legal, finance, and operational stakeholders review terms.
  • 03
    Approve: Obtain internal approvals and budget sign-offs.
  • 04
    Execute: Sign by authorized parties and archive executed copy.

How to Configure an Online Execution Workflow

Configure an online workflow to route, authenticate, and store Shared Services Agreement documents securely.

Field Configuration
Signer Authentication Require email verification plus optional SMS code or corporate SSO for high assurance.
Document Fields Add signatures, initials, dates, and conditional fields for approvals.
Routing Order Set signer sequence, parallel steps, and automatic reminders on schedule.
Storage & Retention Store signed copies as PDF/A with retention tags and access controls.

Typical Electronic Execution and Distribution Flow

Typical routing and submission steps for executing and distributing a Shared Services Agreement electronically securely.

  • Upload: Upload the draft agreement and supporting exhibits to the eSignature platform.
  • Place Fields: Insert signature, initial, date, and optional conditional fields for approvers.
  • Authenticate: Choose email, SMS, or SSO authentication based on required assurance.
  • Send & Audit: Send to signers, capture timestamps, IPs, and generate the audit trail.

Platform and Format Requirements for Electronic Handling

Digital delivery and storage require compatible file formats, secure transport, and platform integrations for efficient Shared Services Agreement workflows.

  • Formats: PDF and Word DOCX supported.
  • Integrations: Salesforce, NetSuite, Google Workspace, Microsoft 365
  • Auth Methods: Email link, SMS code, SSO

Key Timing and Deadline Considerations

Key timing expectations during negotiation, implementation, billing, and renewal lifecycle for a Shared Services Agreement.

Negotiation Period:

Typical 30 to 90 day negotiation window, unless parties agree otherwise.

Implementation Start:

Begin within 30 days after execution, with transition plans active.

First Billing Cycle:

Invoice period usually monthly or quarterly as specified in agreement.

Annual Review:

Conduct SLA and pricing reviews annually or on agreed schedule.

Renewal Notice:

Provide 60 to 90 days written notice for nonrenewal or material changes.

Common Preparation Mistakes to Avoid

  • Vague scope that omits specific deliverables, frequency, or exclusions, leading to disputes and unplanned costs during implementation and service transitions.
  • Unclear cost allocation formulas or failure to reconcile actual costs, causing billing disputes, inaccurate chargebacks, and strained intercompany accounting records.
  • Missing governance structure or single point of contact for disputes and escalations, slowing issue resolution and SLA enforcement.
  • Ignoring data protection requirements or HIPAA considerations when sharing sensitive information, creating regulatory and liability exposure.

Principal Risks and Potential Consequences

Contract Breach: Damages, specific performance, or termination rights.
Billing Disputes: Withholding payments; accrual and audit costs.
Regulatory Fines: HIPAA or state privacy penalties possible.
Reputational Risk: Service outages damage stakeholder trust.
Tax Consequences: Incorrect allocations trigger IRS inquiries.
Operational Disruption: Service gaps, transition costs, lost productivity.

Legal Considerations and Best Practices

Legal considerations below summarize enforceability, signature requirements, and statutory exceptions under federal and state law for Shared Services Agreements.

Enforceability under ESIGN Act and UETA
Electronic signatures are generally enforceable under the ESIGN Act (15 U.S.C. ch. 96) and state UETA statutes. Ensure intent, consent, attribution, and retained records. Note statutory exceptions such as wills, certain court filings, and specified notices.
Consumer-Facing Disclosure Requirements
If the agreement is consumer-facing, provide the ESIGN consumer disclosure per 15 U.S.C. §7001(c): explain the right to paper, demonstrate access, and supply a means to withdraw consent to electronic records.
Notarization and Remote Notarization
Notarization and witness requirements vary by state; RON laws in many states require identity-proofing, audio-video recording, and retention. Confirm state notary commission rules before relying on electronic notarization.
Confirming Authority to Bind
Verify signatory authority through corporate resolutions, officer titles, or power of attorney. For public entities, follow procurement thresholds and delegation statutes to avoid invalid commitments.

eSignature Pricing and Feature Snapshot for Agreement Execution

Compare typical plan characteristics and pricing for eSignature providers often considered for executing Shared Services Agreements.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day trial Varies Varies Varies Varies
Bulk Send Yes Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No
Envelope Cap No cap 100 envelopes/user/year Varies Varies Varies

Essential Agreement Data to Collect

Parties' Legal Names: Full registered entity names required.
Service Description: Specific deliverables and exclusions listed.
Effective Date: Enter as MM/DD/YYYY date.
Pricing Details: Allocation method and billing terms.
Signatory Authority: Include title and binding authority.
Confidentiality Reference: Cite applicable NDA or clause.

Who Should Review and Sign

Corporate Counsel

General counsel or outside counsel typically reviews legal terms, drafts indemnities, confirms enforceability, and validates signatory authority. Counsel also advises on state-specific notarization and retention rules and approves any regulatory or privacy language such as HIPAA addenda.

Finance Officer

Chief financial officer or controller reviews cost allocation, audits, tax treatment, invoicing procedures, and internal chargeback mechanisms. Finance confirms accounting treatment, reconciliation processes, budget approvals, and whether intercompany billing triggers tax or transfer pricing considerations.

Illustrative Use Cases and Outcomes

Real-world examples illustrate how well-drafted Shared Services Agreements clarify responsibilities, reduce duplicated effort, and streamline billing across departments and related entities.

Optica Ventures

Optica Ventures centralized back-office billing under a Shared Services Agreement to standardize finance processes and reduce reconciliation time across portfolio companies.

  • Centralized invoicing and defined SLAs.
  • The agreement specified cost allocation formulas, monthly billing cycles, and a governance committee to resolve disputes. Clear scope and billing rules reduced accounting variance and improved predictability for each entity's cash flow and reporting obligations.

Martin Properties

A regional property manager used a Shared Services Agreement to consolidate property management, maintenance coordination, and tenant communications under a central operations team.

  • Enabled faster lease processing and tenant response.
  • Defined deliverables and performance metrics allowed the manager to allocate costs per property, implement bulk vendor contracts, and reduce administrative staff hours while preserving local decision rights.

FAQs and Troubleshooting for Shared Services Agreements

Frequently asked questions about preparing, executing, and storing a Shared Services Agreement, with practical troubleshooting and compliance notes.


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