Teamworks PEO

 Terms of Service

 

In consideration of the mutual covenants and agreements contained herein, and the following General Terms and Conditions (collectively, the “Agreement”), TEAMWORKS, with its principal mailing address located at 4626 N 300 W Suite 100, Provo, UT 84604 (Designated hereafter as either “TEAMWORKS” or “PEO”), has agreed to provide certain personnel staffing and employment management services to(“Client”) which has engaged to provide such services. The definition of TEAMWORKS as “PEO” shall govern sections 2, 5.9, and 5.19.

1. Scope of Agreement. The services provided pursuant to this Agreement shall apply only to the Covered Employees. As used in this Agreement, the term Covered Employees shall refer solely to those Client employees occupying the job positions listed in the attached Rate Sheet for whom Client has timely submitted new hire paperwork and for whom TEAMWORKS has acknowledged acceptance in writing. No worker shall be a Covered Employee, nor should any person begin work at the job site, until TEAMWORKS has approved the new hire paperwork and accepted such worker as a Covered Employee.

2. Status of the Parties. It is the Parties’ intent that each of them at all times, and with respect to all services covered by this Agreement, function as and remain an independent contractor, and not an employee or officer of the other. Neither party shall represent to third parties that either party is an employee, officer, or agent of the other.

3. Term. Unless terminated pursuant to the terms of the Agreement, the term of this Agreement shall be for one (1) year. Thereafter, unless terminated, this Agreement will automatically renew for successive one-year terms.

 

4. TEAMWORKS Responsibilities.

TEAMWORKS shall provide the following services with respect to the Covered Employees:

4.1 Compliance with Law. TEAMWORKS shall perform its obligations under this Agreement in compliance with all Federal and State laws and regulations governing Professional Employer Organizations.

4.2 Employee Benefits. As requested by Client, TEAMWORKS shall provide employee benefits through TEAMWORKS sponsored plans and administer said plans in compliance with applicable laws and regulations. The plan documents for said plans control eligibility for benefits and the extent of benefits provided. TEAMWORKS hereby discloses to Client, and Client understands, that the broker of record for the TEAMWORKS plans is TEAMWORKS Insurance, and that there is common ownership between TEAMWORKS and Teamworks Insurance. Client understands that it is not required to: (i) use Teamworks Insurance as its broker regarding any Teamworks plan or client benefit plans; or (ii) participate in a TEAMWORKS plan, client benefit plan, or any other benefit plan as a condition of this Agreement. Client may choose its own benefit plans and/or broker. By executing this Agreement and agreeing to participate in a TEAMWORKS' plan, Client hereby waives any and all rights to seek relief against TEAMWORKS and Teamworks Insurance, or their respective shareholders, owners, directors, officers, and employees, relating to the payment of fees by Teamworks Insurance to TEAMWORKS.

4.3 Employment Practices. To the extent requested by Client, TEAMWORKS shall advise Client regarding lawful employment practices in regard to interviewing, hiring, orienting, terminating, supervising, promoting, evaluating, compensating, disciplining, documenting, testing, training, and otherwise dealing with the Covered Employees. Such advice shall be provided as requested to designated management employees only. Client shall not regard TEAMWORKS' advice as legal advice, nor shall TEAMWORKS provide legal advice to Client.

4.4 Handbooks. TEAMWORKS shall provide the Covered Employees with written materials (the “Employee Handbook”) containing policies and procedures applicable to the Covered Employees. TEAMWORKS shall also provide supervisory materials (the “Supervisor Handbook”) to Covered Employees explaining supervisor responsibilities. TEAMWORKS Employee Handbooks supersede any client handbooks and policies with respect to TEAMWORKS' rights and obligations vis-à-vis the Covered Employees.

4.5 Payroll Administration. TEAMWORKS shall process payroll payments in accordance with the applicable laws and regulations based upon timely and accurately reported payroll data provided by Client.

4.6 Payroll Taxes. TEAMWORKS will withhold, report and remit Federal, State, and local payroll taxes on behalf of Covered Employees. TEAMWORKS shall prepare and submit tax reporting forms required by law or regulation with respect to such compensation and benefits, including but not limited to Forms W-2 (Wage and Tax Statement); W-4 (Covered Employee’s Withholding Allowable Certificate); 

 

4.7 Unemployment Compensation. TEAMWORKS shall administer unemployment compensation claims, including opposing unemployment claims when appropriate. In those states in which TEAMWORKS uses Client’s employer account for purposes of reporting and remitting unemployment taxes, Client agrees to cooperate with TEAMWORKS and will provide all requested forms, signatures, powers of attorney, reports, documents, and current and historical data.

4.8 Workers’ Compensation . Client acknowledges that TEAMWORKS is not a workers’ compensation insurance provider, carrier, or broker, and that as such TEAMWORKS may not be subject to certain laws and regulations governing same.

5. Client Responsibilities. Client shall be responsible for the following:

5.1 Payment Requirements. Client agrees to timely, and in advance, remit payment to TEAMWORKS for the payment of all payroll payments, payroll taxes, and any other amounts that TEAMWORKS is required to make on behalf of Client pursuant to this Agreement.

5.2 Workers’ Compensation . Client shall provide workers’ compensation insurance coverage for the Covered Employees and administer claims under said coverage.

5.3 At-Will Employment. Client understands that the TEAMWORKS is not bound by any contract between Client and a Covered Employee requiring cause for termination of employment. Upon termination of this Agreement for any reason, or upon Client's failure either to provide payroll data as required herein or to timely pay as required herein, all Covered Employees shall automatically revert to sole employment by Client retroactive to the last date TEAMWORKS was paid by Client for TEAMWORKS’ services. 

5.4 Workers' Compensation Classification Code Assignment and Changes in Job Status. Client is solely responsible for the accuracy of the workers' compensation classification code assignment. Client shall notify TEAMWORKS immediately of any change that may affect the workers’ compensation status of any Co-Employee, including but not limited to any change in job duties or job locations. Any workers' compensation audit bills resulting from incorrect classification code assignment or changes in job status will be the client's responsibility.

5.5 Client Benefit Plans. Client shall be responsible for administering and complying with laws and regulations applicable to benefit plans maintained by Client.

5.6 Confidential Information. Client agrees that all non-public information disclosed in the performance of the obligations and the exercise of rights set forth in this Agreement is “Confidential Information” and is proprietary to TEAMWORKS. Client shall maintain in confidence all Confidential Information disclosed pursuant to this Agreement and shall not use, duplicate, publish, or otherwise disclose any Confidential information to any third party without the advance written consent of TEAMWORKS.

5.7 Control of Client Business. Client shall have exclusive responsibility for control of Client’s Business. For purposes of this Agreement, “Client’s Business” shall mean all aspects of Client’s business other than those elements of the employment relationship with the Covered Employees expressly assumed by TEAMWORKS under this Agreement. Any action taken in connection with Client’s Business shall be deemed taken by or on behalf of the Client, and not by TEAMWORKS. Neither this Agreement, nor the fact that one or more persons authorized to act on behalf of Client may be Covered Employees hereunder, shall be deemed to grant to TEAMWORKS any right or authority, or place upon TEAMWORKS any duty or responsibility, to make any decision regarding Client’s Business.

5.8 Cooperation With PEO. Client shall respond in a timely and accurate fashion to requests from TEAMWORKS for records and data necessary for TEAMWORKS to perform its services. Upon receipt Client shall immediately send TEAMWORKS copies of demands, notices, claims, summons and other legal papers related to the Covered Employees. Client shall cooperate with TEAMWORKS in the investigation, remediation, settlement, and defense of legal claims related to the Covered Employees.

5.9 Discipline of Covered Employees. Both Client and TEAMWORKS shall have authority to discipline and terminate Covered Employees. Each party shall give the other party prior verbal or written notice of the proposed discipline of any Covered Employee, except that if immediate action is necessary to protect personnel or property, either party may discipline any Covered Employee without prior notice. In such event, the disciplining party shall give the other party written notice of the action taken within a reasonable time following such action. The right of both parties to discipline any Covered Employee shall be subject to any legal or contractual restriction on discipline applicable to such Covered Employee and to such Covered Employee’s rights to notice, hearing, and other procedures as may be required by law or regulation or as may be provided in the Employee Handbook or the Supervisor Handbook. Each party shall indemnify the other from any loss, cost, claim, or expense resulting from disciplinary action taken without the consent of such other party.

5.10 Downsizing Notices. Client shall provide all notices required by WARN (defined below). Client will also provide PEO with no less than sixty-two (62) days’ notice of any layoff or plant closing that may immediately or in the future require the provision of notice under WARN.

5.11 Employment Documentation. Client shall cooperate with TEAMWORKS to assure receipt by TEAMWORKS of all properly completed documentation necessary to process payroll for the Covered Employees, including, but not limited to form W-4, form 1-9, and such additional documentation as TEAMWORKS may require. Client shall assure that TEAMWORKS has received properly completed documentation with respect to each new worker to be covered by this Agreement prior to placement of such person at a worksite. 

5.12 Employment Legal Compliance. Client shall comply with Federal, State and local laws governing employment, including but not limited to the Civil Rights Acts of 1866, 1964 (including Title VII), and 1991, the Age Discrimination in Employment Act, the Americans with Disabilities Act (ADA), the Family and Medical Leave Act (FMLA), the Fair Labor Standards Act (FLSA), the Worker Adjustment and Retraining Notification Act (WARN), the National Labor Relations Act (NLRA) the Equal Pay Act, the Vietnam Era Veteran’s Readjustment Assistance Act, the Fair Credit Reporting Act (FCRA), the Employee Polygraph Protection Act, the Immigration Reform and Control Act (IRCA), the Older Workers Benefits Protection Act (OWBPA), the Occupational Health and Safety Act (OSHA), the Uniformed Services Employment and Reemployment Rights Act (USERRA), and all other state (including any and all states within the United States) and federal laws governing the employment relationship, including but not limited to, such laws governing discrimination in the workplace (collectively, the “State and Federal Employment Laws”).

5.13 Exclusive Employment Relationship. Without the written consent of TEAMWORKS, neither Client nor any affiliate of Client shall pay compensation directly to any Covered Employee or directly employ and compensate any worker outside of those covered by TEAMWORKS. In the event of a breach of the prohibitions contained in this Section, then, with respect to such employment, Client shall (i) have sole and absolute responsibility as employer and shall perform all employer obligations, including provision of workers’ compensation insurance, withholding, payment of employment taxes, and compliance with all laws and regulations governing the relationship of employers and employees, (ii) bear all risk resulting from failure to perform any such obligations, and (iii) indemnify TEAMWORKS against any loss, cost, claims or expense arising as a result of such employment or by operation of law as a result of failure of Client to perform any obligation.

5.14 FMLA Compliance. Client is responsible for obligations and costs associated with compliance with the FMLA and similar state and local laws, including but not limited to the cost of reinstating or finding replacement employment and the cost of continuing benefits during FMLA leave. Client agrees that it is the primary employer and that it will be the successor employer upon termination of this Agreement for purposes of FMLA compliance.

5.15 Government Contracts. Client is responsible for complying with requirements pertaining to government contracts pursuant to federal, state, county or local laws, regulations, and ordinances, including but not limited to compliance with Executive Order 11246, the Walsh-Healey Public Contracts Act, the Davis Bacon Act, and the Service Contract Act of 1965.

5.16 Hiring and Evaluation of Covered Employees. Client shall have sole responsibility for the pre-hiring evaluation of Covered Employees. No person shall be hired without the joint concurrence of both Client and TEAMWORKS, and no person shall be deemed a Covered Employee until accepted by TEAMWORKS as a Covered Employee. Either party may, at its option, conduct such testing, interviews, and background investigation and other review of the suitability of any Covered Employee as it may deem appropriate prior to employment; provided, that any such testing, interviews, and investigations shall be conducted in compliance with all applicable laws, rules, and regulations, and provided further that each party shall advise the other party in writing and in advance of any testing, interviewing and investigations which such party intends to conduct. TEAMWORKS shall have no obligation or liability to Client with respect to the suitability of any Covered Employee for his or her job responsibilities.

5.17 Non-Employment Legal Compliance. Client shall have responsibility for complying with all laws governing the Client’s business, including but not limited to required filings, licensing, taxes, fidelity bonding, insurance, facilities/building codes and regulations, and environmental compliance. If any worksite employee is required to be licensed, registered or certified under any federal, state, or municipal law or regulation, or to act under the supervision of such a licensed, registered or certified person or entity in performing the employee services, then any such worksite employee shall be deemed to be an employee of Client for such licensure purposes. Client shall be solely responsible for verifying such licensure and/or providing the required supervision.

5.18 Notice of Claims. Client shall promptly advise TEAMWORKS of all Covered Employee complaints, claims, filings and requests related to the employment of Covered Employees, and shall promptly provide to TEAMWORKS complete and accurate information regarding such matters. Client shall promptly advise TEAMWORKS of unsatisfactory job performance of any Covered Employee, and of any claims of discrimination, sexual harassment, or other improper conduct of a Covered Employee.

5.19 Other Taxes and Fees. Other than payroll withholding related taxes, Client shall have responsibility for paying and reporting

all taxes and governmental fees (including environmental fees required by the Utah Health and Safety Code).

5.20 Paid Perquisites. Client shall have responsibility for administering, funding, and accurately determining eligibility for paid perquisites, including but not limited to vacation, sick leave, other paid time off, profit sharing, deferred compensation, bonuses, severance payments, stock options/grants/warrants, commissions, and other incentive payments. Although said payments should be made through TEAMWORKS’ payroll in order to ensure proper reporting and remittance of taxes, TEAMWORKS takes no responsibility for the administration or funding of said paid perquisites payments.

5.21 Payroll Data. Client shall timely and accurately provide the data necessary for TEAMWORKS to process payroll for the Covered Employees, including but not limited to hours worked, rates of pay, and exempt / non-exempt status. Client shall maintain records of actual time worked and records of mandated breaks by the Covered Employees. In order to ensure accurate calculation of fees and proper withholding and reporting of taxes, Client agrees not to pay any wages or salaries directly to any Covered Employee without informing TEAMWORKS in writing of such payment. On or before noon of the Report Day, Client shall provide TEAMWORKS with a time report and all other information necessary to compute the Gross Employee Payments (defined below) for the prior Pay Period for all nonexempt Covered Employees and salary information for all exempt Covered Employees. Failure of Client to provide accurate and timely reports may result in increased costs to Client, delay in payroll processing and distribution, and termination of direct deposit arrangements for Covered Employees.

5.22 Payment Requirements. All funds due and payable to TEAMWORKS are payable by check, wire transfer, ACH or certified funds, as specified on Exhibit _A, of service order and entitled “Payment Method and Financial Guaranty.” Client shall make all payments to TEAMWORKS prior to TEAMWORKS' issuance of payroll checks each pay period and shall be deemed earned by TEAMWORKS on the day after each pay period ends. A late payment charge of two percent (2%) will be added to all accounts not paid when due. Checks returned unpaid from Client’s bank will be subject to the late payment charge described above, plus any additional costs incurred by TEAMWORKS. An unpaid balance will also be subject to a periodic charge of two percent (2%) per calendar month, or such maximum lesser interest amount if set by applicable law at a lower amount, until paid in full. TEAMWORKS reserves the right to at any time terminate this Agreement if full payment is not made when due.

5.23 Protection of Covered Employee Rights. Client shall notify TEAMWORKS immediately of any action, event or circumstance which has resulted in or may result in a claim of employment discrimination or sexual harassment, improper denial of workers’ compensation or employee benefits, or other violation of the rights of any Covered Employee under any law or regulation governing the relationship of employers and employees.

5.24 Workplace Safety. Client shall at its sole cost and expense comply with all federal, state and local health and safety laws, regulations, ordinances, directives and rules relating to workplace safety, including the provision of appropriate and required personal protective equipment. TEAMWORKS shall have the right to inspect, without notice to Client, Client’s workplace, including, but not limited to, any job sites at which the Covered Employee work. TEAMWORKS may make such directives or recommendations regarding safety from time to time, however, it is Client’s sole obligation to assure workplace safety.

5.25 ACA COMPLIANCE. Client is responsible for obligations and costs associated with compliance with the Affordable Care Act (ACA) and similar state and local laws, including but not limited to the cost of IRS penalties for non-compliance and employer insurance contributions. Client agrees that it is the primary employer, solely responsible for compliance with the law.

6. Service Fee. For services to be rendered under this Agreement, TEAMWORKS shall be entitled to a set-up fee and a service fee as set forth in the “Rate Sheet “, attached hereto as Schedule II (“Service Fee”). The fees set forth in the Rate Sheet are subject to

adjustment by TEAMWORKS from time to time, based on changes in local, state and federal employment law, changes in insurance requirements or costs, changes in costs directly attributable to Client or the co-employees assigned to Client, or changes in Client’s payroll. For example, as to unemployment insurance (UI) rates, TEAMWORKS may increase its service fee in response to any increase in UI taxes (including but not limited to any increase in wage base, rate, or any special assessment and including any retroactive increase) which must be paid during the term of this Agreement or which applies to the time period during which this Agreement was in effect. Upon written notification to Client from TEAMWORKS of a fee adjustment, Client shall have the right to terminate this Agreement by giving notice of termination to TEAMWORKS within fourteen (14) days of Client’s receipt of the notice of fee increase and after payment of all funds owed to TEAMWORKS by Client.

6.1 Optional Benefits Payments. For each Pay Period, Client shall also pay to TEAMWORKS an amount (the “Benefits Payment”)

equal to TEAMWORKS’ costs during such Pay Period of optional benefits selected by Client and provided with respect to each Covered Employee, such as health insurance, dental insurance, life insurance, disability insurance, matching 401(k) contributions, or other benefits.

6.2 Interest on Payments in Default. If Client fails to pay the Service Fee or the Benefits Payment for any Pay Period, or any other amount payable by Client to TEAMWORKS under this Agreement, on or before fifteen (15) days following the applicable due date,

TEAMWORKS may, at its option, collect interest on the past due amounts and/or terminate this Agreement pursuant to Section 17. Any such interest shall be in addition to any Late Payment Fee. The rate of interest on such past due amounts shall be a rate equal to the greater of published by the Wall Street Journal, in effect from time to time during the period in which such amount remains due and unpaid. Client shall pay any accrued interest within ten (10) days following demand for payment. The imposition of interest on late payments shall not extend the due date of any such payment. The Late Payment Fee is calculated as three percent (3%) of the total Service Fee, as defined in Section 6, and becomes due upon any failed transfer of funds, regardless of payment method, so long as the failure is not a direct result of a TEAMWORKS error or omission. TEAMWORKS requires the Service Fee to be paid two (2) business days before delivery of payroll. TEAMWORKS furthermore requires all funds to be either (1) ACH deposited (Teamworks-initiated); (2) deposited via reverse wire transfer (Teamworks-initiated); or (3) deposited via wire transfer (Client-initiated) directly into TEAMWORKS’ payroll account being administered by its designated bank. The method of payment will be determined by TEAMWORKS in its sole discretion and TEAMWORKS will provide all necessary bank account information during the client intake process, prior to the processing of Client’s first payroll under this Agreement. TEAMWORKS does not accept checks as payment for services of any kind.

7. Payment Procedures. TEAMWORKS shall make payment to each Covered Employee on each Payday using available funds provided by Client pursuant to Section 5.1. In the event that Client fails to remit sufficient funds to cover payroll and other payments, TEAMWORKS, shall have no obligation to make such payroll payments. The Payday shall be the same day of each Pay Period as the First Payday. Any change in the Payday shall require TEAMWORKS' prior consent one pay cycle prior to such change. TEAMWORKS may, if TEAMWORKS determines in its sole discretion that Client is a credit risk, require Client to tender payment for the charges set forth in an Exhibit for each Covered Employee, on the first business day prior to each payroll period in an amount equal to the estimated for the current payroll period. The estimated amount for the current payroll period will be the amount equal to the amount invoiced to and paid by the Client for the immediately preceding payroll unless TEAMWORKS, in its sole discretion, contacts the Client with a different amount. TEAMWORKS shall earn the amount concurrently with the accrual of the services TEAMWORKS provides to Client. Upon receiving an invoice from TEAMWORKS, Client shall immediately pay for any additional amount for that payroll period. Any overpayment can be used by the Client to offset the estimated amount due on the subsequent payroll period. If the Client does not make the payment on the first business day prior to each payroll period as required by this paragraph, TEAMWORKS may, at its option, declare the Client to be in default and immediately terminate this Agreement.

 

8. Indemnity.

8.1 Client hereby agrees to indemnify and hold TEAMWORKS harmless from and against any and all claims, demands, damages (including liquidated, punitive and compensatory), injuries, deaths, actions and causes of actions, costs and expenses (including attorney's fees and expenses at all levels of proceedings), losses and liabilities of whatever nature (including liability to third parties), and all other consequences of any sort, whether known or unknown, without limit and without regard to the cause or causes thereof or the negligence of TEAMWORKS, arising from Client’s material breach of this Agreement, the products or services provided by Client, the actions or inactions of any Covered Employee, the supervision and employment of Covered Employees and termination thereof, compliance with wages and hours rules in the workplace (including meal and rest breaks, minimum wage, and overtime), the actions of any agent or worker employed by Client, or of any other individual, including without limitation, any violation of any local, state and/or federal law, regulation, ordinance, directive or rule whatsoever, and the State and Federal Employment Laws.

8.2 TEAMWORKS, except to the extent Client assumes liability under the Agreement, hereby agrees to indemnify and hold Client harmless from and against any and all claims, demands, damages (including liquidated, punitive and compensatory), injuries, deaths, actions and causes of actions, costs and expenses (including attorney's fees and expenses at all levels of proceedings), losses and liabilities arising from TEAMWORKS' gross negligence in the performance of duties expressly required by the terms of this Agreement. TEAMWORKS' indemnification obligation includes the obligation to indemnify Client in the event payroll taxes, workers’ compensation premiums or state unemployment payments are not paid timely and accurately. Such obligation is contingent upon Client providing TEAMWORKS with timely and accurate information, as well as payment by Client to TEAMWORKS of the required fees under this Agreement.

8.3 Client and TEAMWORKS expressly agree that the indemnification provisions of the Agreement shall not be limited to claims, expenses or liabilities for which one of them is solely liable, but shall also apply to claims, expenses and liabilities for which Client and TEAMWORKS are jointly or concurrently liable. In such event, if either of them advances funds in connection with a claim, expense or liability in excess of its pro rata share, such party shall be entitled to recover from the other party the difference between such party’s share and the actual amount paid. The indemnification provisions of the Agreement shall survive termination of the Agreement.

9. Representations and Warranties.

Client represents and warrants as follows:

9.1 Client’s Obligations to Covered Employees . (i) All compensation of the Covered Employees accrued prior to the Effective Date and for which Client or any third party is responsible and obligated has been paid in full; (ii) neither Client, nor to the knowledge of Client, any third party who provides or has provided employee leasing services or personnel staffing services to Client, has any employment contract, written or verbal, with any Covered Employee; (iii) there are no separate contracts, agreements or other arrangements existing with respect to the Covered Employees as a group or any of them which would bind or obligate TEAMWORKS, except as expressly set forth herein; (iv) Client shall notify TEAMWORKS of the principal location of the workplace of each Covered Employee and each location where such Covered Employee performs services for Client, and of any changes in such locations; and (v) all pension, profit-sharing, or other employee benefit plans existing at the Effective Date are current and in compliance with applicable law, and execution of this Agreement shall not be deemed a breach under the terms of those plans.

 

9.2 Information. As of the Effective Date, and throughout the term of this Agreement, all information provided by the Client in contemplation of this Agreement or pursuant hereto, including but not limited to financial statements, employee lists, job descriptions and classifications, compensation, benefits, and time reports is and shall be true and correct. No material adverse change has occurred in the financial condition of the Client or any guarantor of Client’s obligations under this Agreement since the date upon which any financial statements of Client or such guarantor were provided to TEAMWORKS.

9.3 No Litigation. Except as previously disclosed to TEAMWORKS in writing, there is no action, suit, proceeding or investigation pending, or, to the knowledge of Client, threatened against Client, related to the Covered Employees or the Client’s employer/employee relationship with the Covered Employees or which may result in a material adverse change in the financial condition of Client or of any guarantor of Client’s obligations under this Agreement. Client will advise TEAMWORKS promptly upon the inception of any such action, suit, proceeding, investigation or threat thereof.

9.4 Compliance with Applicable Law. Client has not violated any applicable statute or regulation in any respect, which would adversely affect the Covered Employees or Client’s employment relationship with the Covered Employees. Client is and shall remain in compliance with all statutes, regulations, and executive orders respecting Covered Employees and employment practices. Client acknowledges that certain requirements applicable to employers under various federal and state statutes, rules, and regulations, including but not limited to the Family Medical Leave Act, Americans with Disabilities Act, Worker Adjustment and Retraining Notification Act, Title VII of the Civil Rights Act of 1964, and Age Discrimination Employment Act, are based on the status of the employer, and that Client’s status under one or more of such statutes, rules, and regulations may change as a result of entering into the co-employment relationship described in this Agreement.

10. Personal Guaranty. A designated, individual representative of Client shall execute a personal guaranty in substantially the same form as set forth in Exhibit A, warranting all of the obligations, financial or otherwise, of Client hereunder and promising to faithfully perform each and every such obligation in a timely manner in the event of Client’s failure to perform hereunder.

11. Access to Workplace and Business Records. TEAMWORKS shall be entitled to review all business operations of Client and to audit all books and records of Client to assure compliance by Client with its obligations under this Agreement. Client shall provide TEAMWORKS or its designee’s access, at any reasonable time during customary business hours, to the business premises, books, and records of Client to assure such compliance.

12. Insurance. Client shall maintain, at all times and at its own cost, the following insurance coverages with an A.M. Best “A” rated

or better carrier:

(i) comprehensive general liability (including, but not limited to bodily injury, premises, operations, contractual liability, product and completed operation liability, with broad form endorsements, personal injury and advertising liability);

(ii) automobile liability, including non-owned and hired autos (to the extent any Covered Employees will be assigned to positions requiring them to drive for Client); and

(iii) professional liability insurance, if appropriate, including but not limited to malpractice or errors and omissions coverage and in compliance with any regulation mandating such coverage; and

(iv) statutory workers’ compensation insurance coverage for all Covered Employees.

Each of such policies shall have as a minimum a limit of liability not less than $1,000,000 or as required by the state in the case of workers’ compensation insurance coverage. Client shall have TEAMWORKS listed as an additional insured on all such policies. By the Effective Date of this Agreement, Client shall furnish TEAMWORKS with Certificates of Insurance as evidence of coverage. Each of such policies shall be on an "occurrence" basis. However, in the event that any "occurrence” policy is not available, Client

shall maintain an equivalent "claims made" policy until the expiration of all statutes of limitation applicable to any claim which could arise under this Agreement or by virtue of the services provided by the Covered Employees.

13. Existing Insurance. Unless otherwise specifically agreed in writing by TEAMWORKS, Client shall maintain in full force and

effect at all times during the term of this Agreement, all insurance required under this Agreement and all property, fire and liability insurance existing as of the Effective Date. Client further agrees to cause TEAMWORKS to be named as an additional insured with respect to each such policy of insurance.

14. Fidelity Bonds. Client shall advise TEAMWORKS of any Covered Employee with access to cash or fidelity bonds other property of Client or of any third-party property within the control of Client. TEAMWORKS may, at its option, require Client to obtain a fidelity bond naming Client and TEAMWORKS as insured with respect to each such Covered Employee. TEAMWORKS shall have no obligation with respect to or liability as a result of embezzlement, fraud, defalcation or misappropriation of any of such property by any Covered Employee, and Client indemnifies TEAMWORKS against loss, cost, claim, or expense arising from any such action.

 

15. Authorization. The execution, delivery, and performance of this Agreement have been duly authorized by all necessary actions of Client and of its officers, directors, partners, owners, and managers, as applicable. This Agreement shall be valid and enforceable only upon signature by an authorized person of TEAMWORKS. Any individual signing this Agreement on behalf of Client represents and warrants that she or he has full authority to do so.

16. Subcontractors. TEAMWORKS shall have no obligation to provide workers’ compensation insurance for employees of subcontractors engaged by Client. Client shall not, directly or indirectly, engage or hire any subcontractor that does not have workers’ compensation insurance coverage with respect to its employees. Client shall obtain a certificate evidencing workers’ compensation insurance coverage with respect to the employees of any subcontractor engaged by Client, or shall provide workers’ compensation insurance coverage with respect to the employees of any such subcontractor.

17. Default. In the event of default by Client in performance of any obligation under this Agreement, TEAMWORKS may, at its option and at Client’s expense, (i) take such action as may be necessary to cure any such default, (ii) impose an additional charge or fee to compensate TEAMWORKS for any costs, expense, or inconvenience resulting from such default, (iii) offset against any security deposit held by TEAMWORKS any amount due TEAMWORKS hereunder, (iv) terminate this Agreement as provided in section 17, and (v) exercise any other remedy available at law, including but not limited to enforcement of any obligation of Client to indemnify TEAMWORKS under this Agreement. Client acknowledges that the exclusive employment relationship described in Section 5.12 and Client’s obligations to perform its obligations there under are fundamental to TEAMWORKS' expectations under this Agreement, that a breach of such obligations may result in substantial confusion, uncertainty, and claims regarding relative rights and obligations by and among TEAMWORKS, Client, and others, and that if TEAMWORKS terminates this Agreement due to any such breach it would be difficult to determine TEAMWORKS' damages. Accordingly, if this Agreement is terminated by TEAMWORKS prior to the then effective termination date as the result of a breach by Client of such obligations, TEAMWORKS shall be entitled to recover, as liquidated damages, an amount equal to $500.00 per Covered Employee, in lieu of other remedies available to it under this Section 16.

19. Termination.

19.1 Term of Agreement. TEAMWORKS may terminate this Agreement by providing Client Written notice of such termination no less than (30) days prior to the effective date of the termination. After the initial first year term of this Agreement, Client may terminate this Agreement by providing TEAMWORKS notice of such termination no less than thirty (30) days prior to the effective date of the termination.

19.2 Immediate Termination. TEAMWORKS may terminate this Agreement immediately without prior written notice upon Client’s doing, as determined by TEAMWORKS is TEAMWORKS' sole discretion, any one of the following:

(i) failure to pay any amount due to TEAMWORKS hereunder when due. In the event that Client is in default of this agreement due to its failure to pay invoice and/or all amounts due TEAMWORKS, TEAMWORKS at its election reserves the right terminate

this agreement retroactive to the beginning of Client’s pay cycle for which Client is in default. Termination of the Agreement shall not relieve Client of any and all obligations set forth in this Agreement. TEAMWORKS will no longer be deemed a co-employer with Client and therefore will not have any additional obligations under this Agreement with respect to Client and Client’s employees;

(ii) failure to comply with any directive of TEAMWORKS, when such directive is made to comply with (a) a federal, state or local governmental body, department or agency, or (b) a directive by an insurance carrier providing coverage to TEAMWORKS and/or its

employees;

Agreement;

(iii) making a direct payment of taxable wages by Client to any Covered Employee for services contemplated by this

(iv) performing any act that usurps any legal or contractual right or obligation of TEAMWORKS as an employer of a

Covered Employee;

(v) the threat of, or actual, filing by or against Client for bankruptcy, reorganization or appointment of a receiver,

supervisor, assignee, or liquidator over its assets or property;

and/or

(vi) a money judgment against Client which remains unsatisfied for more than thirty (30) days and has not been appealed;

(vii) TEAMWORKS determines, in its sole discretion, that Client is a credit risk.

19.3 Interest. In addition to any other amounts that TEAMWORKS is or may be entitled to, TEAMWORKS is also entitled to collect interest from Client at the maximum rate permitted under the law on any unpaid invoice or partial amounts not paid when due.

19.4 Replacement Coverage. In the event that this Agreement is terminated, Client agrees to immediately secure replacement health insurance coverage for the benefit of the employees who continue their employment with Client. If Client does not secure replacement health insurance coverage for employees previously covered by TEAMWORKS' health insurance, or should there be any delay in securing such coverage thereby creating a COBRA event for one or more employees, Client agrees to pay TEAMWORKS an administrative service fee of $500 per employee for each month the employee is insured by TEAMWORKS' continuing coverage under COBRA.

19.5 Obligations of the Parties. Upon termination of this Agreement, regardless of how occurring, (i) Client shall pay to TEAMWORKS the Service Fee and Benefits Payments with respect to service by Covered Employees during the term of this Agreement, (ii) TEAMWORKS shall pay Covered Employees, make payments to third parties in respect to Covered Employees, and complete its accounting and reporting duties with respect to Covered Employees’ service during the term of this Agreement, (iii) Client shall indemnify and hold TEAMWORKS harmless from any loss, cost, claim, or expense, resulting from termination of TEAMWORKS' relationship with Covered Employees as a result of the termination by Client of this Agreement (except to the extent any such claim, cost, expense, or other loss is the result of action by TEAMWORKS which is contrary to the provisions of this Agreement or applicable law or regulations), including, but not limited to any such loss, cost, claim, or expense resulting from the occurrence of a qualifying event under I.R.C. § 4980B with respect to any Covered Employee and any obligation to compensate any employee any Covered Employee with respect to any period prior to or during which this Agreement was in force for unpaid vacation and sick leave, and (iv) each of the parties shall do all things necessary or requisite to conclude the business relationship and comply with Covered Employee and employer payment and reporting obligations. Following termination of this Agreement, TEAMWORKS shall have no further obligations hereunder except as specifically described in this Agreement. Upon termination of this Agreement by Client prior to completion of the initial first year term, regardless of the reason for termination, Client shall pay to TEAMWORKS an amount equal to the projected administrative fee component of the Service Fee that would have been charged pursuant to Section 6 had Client not terminated the Agreement during the first-year term.

20. General.

20.1 Waiver of Covenant, Condition, or Remedy. The waiver of performance of any covenant, condition or promise shall not

invalidate this Agreement, nor shall it be considered a waiver of any other covenant, condition or promise. The exercise of any remedy provided in this Agreement shall not be a waiver of any consistent remedy provided by law, and the provisions in this Agreement for any remedy shall not exclude other consistent remedies unless they are expressly excluded.

20.2 Interpretation of Agreement. This Agreement shall be construed in accordance with the laws of the State of Utah.

20.3 Headings. Captions and organization are for convenience and shall not be used in construing meaning.

20.4 Time is of the Essence. Time is of the essence in this Agreement.

20.5 Severability. Each provision contained in the agreement shall be independent and separate from all other provisions contained herein. If any provision of this Agreement, or any amendment thereof, should be invalidated, the remaining provisions shall remain in full force and effect.

20.6 Entire Agreement. Any proposal, bid, offer, or other prior discussion or communication regarding the subject matter of this Agreement is preliminary in nature, is superseded by this Agreement, and is intended solely for the purpose of discussion and evaluation. This Agreement constitutes the entire agreement between the parties. No other agreement, statement or promise, or modification or amendment of this Agreement shall be binding unless in writing and signed by both parties to this Agreement. Client acknowledges that it has not been induced to enter into this Agreement by any representation or warranty not set forth in this Agreement, including but not limited to any statement made by any marketing agent of TEAMWORKS. Client acknowledges that TEAMWORKS has made no representation concerning whether TEAMWORKS' services will improve the performance of Client's business.

20.7 Attorney’s Fees . In any action or proceeding to enforce any of the provisions of this Agreement, the prevailing party shall, in addition to all of the rights and remedies of the law, be entitled to recover the costs and expenses of any such litigation, including reasonable attorney's fees and costs.

20.8 Successors. The rights and obligations contained in this Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors.

20.9 Assignment. This Agreement shall not be assigned by Client to another party without the written consent of TEAMWORKS, which consent shall not be unreasonably withheld. TEAMWORKS may assign this Agreement without any consent or notice to Client.

20.10 Amendments. This Agreement can be amended or modified only by written agreement between the parties.

20.11 Notices. All notices and demands shall be given in writing by mail or by facsimile transmission confirmed by mail posted within 24 hours of the transmission. All facsimile transmissions shall be made between 8:00 A.M. and 5:00 P.M Mountain Standard Time, Monday through Friday except on banking holidays in the State of Utah. All notices, demands, and confirmations by mail shall be made by certified mail, postage prepaid, return receipt requested. Notice shall be considered given and effective when mailed, or when transmitted, as applicable. Unless otherwise advised in writing by the other party, each party shall transmit notices and demands to the addresses listed on the service order.

20.12 No Partnership or Joint Venture. Nothing herein contained shall be deemed to create a joint venture or partnership between Client and TEAMWORKS.

20.13 Waiver of Subrogation. The parties each hereby waive any claim which it or anyone claiming by through, or under it, by subrogation or otherwise, might now or hereafter have against the other party on account of any loss or damage which is insured against, to the extent that such loss or damage is recovered under policies of insurance required to be provided hereunder. Each party agrees to immediately give each insurance carrier providing any such policy written notice of the terms of the mutual waiver described above, and to have said insurance policies properly endorsed to reflect such waiver. Each party shall cause its insurance carrier to provide written evidence of said waiver.

20.14 No Construction Against Drafter. TEAMWORKS has prepared this Agreement and provided it to Client for Client’s review. Client has either retained counsel or had the opportunity to do so to review this Agreement. With respect to any dispute concerning the meaning of this Agreement, this Agreement shall be interpreted as a whole with reference to its relevant provisions and in accordance with its fair meaning, and no part of this Agreement shall be construed against TEAMWORKS on the basis that TEAMWORKS drafted it. This Agreement shall be viewed as if prepared jointly by TEAMWORKS and Client.

20.15 Governing Law/Venue. This Agreement shall be governed by the laws of the State of Utah, without giving effect to any choice or conflict of law provision or rule (whether in the State of Utah or any other jurisdiction) that would cause the application of the laws of any jurisdictions other than the State of Utah. If legal action is commenced by any of the parties hereto with respect to the subject matter hereof, the parties hereto agree that the jurisdiction and venue of such action shall be in the state or federal Utah court of competent jurisdiction located in Utah County, Utah. The parties hereto hereby accept Utah’s jurisdiction and agree to accept service of process as if they were personally present and served within such jurisdiction.

20.16 Counterparts and Fax Signatures. This Agreement, any document or instrument entered into, given, or made pursuant to this Agreement or authorized hereby, and any amendment or supplement thereto may be executed in two or more counterparts, and, when so executed, will have the same force and effect as though all signatures appeared on a single document. Any Party may deliver its signature to this Agreement by facsimile and that signature shall be treated as an original for all purposes. Any signature page of this Agreement or of such an amendment, supplement, document, or instrument may be detached from any counterpart without impairing the legal effect of any signatures thereon, and may be attached to another counterpart identical in form thereto but having attached to it one or more additional signature pages.

20.17 Binding Effect. The following provisions shall survive the termination of this Agreement: Section 8 (Indemnity) and Section5.7 (Duty to Cooperate).

20.18 False or Omitted Information. Any false statement or omission with regard to any information supplied by Client to TEAMWORKS in anticipation of Client's contracting with TEAMWORKS or at any other time shall be deemed a material breach of

this Agreement and TEAMWORKS, at its option, may terminate this Agreement and seek appropriate relief.

20.19 Responsibility for Legal Rights. Client acknowledges and agrees that TEAMWORKS is not engaged in the practice of law or the provision of legal services, and that Client alone is completely and independently responsible for its own legal rights and obligations.

20.20 Force Majeure. If TEAMWORKS is prevented from complying, either totally or in part, with any of the terms or provisions of this Agreement by reason of fire, flood, storm, strike, lockout or other labor trouble, any law, order, proclamation, regulation, ordinance, demand or requirement of any governmental authority, riot, war, rebellion or other causes beyond the reasonable control of TEAMWORKS or other acts of God, then upon written notice to Client, the affected provisions and/or other requirements of this Agreement shall be suspended during the period of such disability and TEAMWORKS shall have no liability to Client or its affiliates (or any other party) in connection therewith. TEAMWORKS shall make all reasonable efforts to remove such disability as soon as reasonably practicable. The actual effective date of this Agreement is the actual first day of the of the first payroll period of the Client where TEAMWORKS processes payroll for the Covered Employees as defined in the Agreement and Client pays, timely and in full, any/all invoices for related services. (the “Effective Date”) This Agreement shall not be in effect nor will TEAMWORKS be responsible for any payroll, related tax computation or payment, general services or duties as described in this Agreement until the Effective Date is confirmed by both Client and TEAMWORKS and that conditions described above are fully met.