EXHIBIT 10.60
Client Name: Surgical Safety Products FL Lic. #GL64*AR Lic #ELF009*TX Lic #402
SELECTIVE
-----------------
HR Solutions Agreement for Services
This Agreement between "Client" (named above) and Selective HR Solutions
("Selective HR") is entered into as of this 16 day of March 2001.
1. In consideration for payment of the Service Fee described in the Pricing
Addendum, Selective HR agrees to assume certain human resource
responsibilities by creating a co- employment relationship with the Client.
The allocation of responsibilities and liabilities associated with the
co-employment relationship are described in the terms ad conditions of this
Agreement.
2. Worksite Employees. Former employees of the Client become co-employees of
Selective HR and the Client as of the effective date shown on the Pricing
Addendum. These individuals are referred to in this Agreement as the
"Worksite Employees". Both the Client and Selective HR agree to cooperate
with the following concerning the Worksite Employees:
a. Selective HR agrees to furnish Client the Worksite Employees and
Client agrees to accept the Worksite Employees for all job functions
and workers' compensation code classifications set forth in the
Pricing Addendum.
b. The parties acknowledge that Selective HR is an Professional Employer
Organization (PEO), also referred to as an employee leasing company,
duly licensed in each state of its operations. Selective HR and Client
agree to the following conditions:
(i) Selective HR has a responsibility for the direction and control
over the Worksite Employees assigned to the Client's location.
The parties agree that the Client must retain sufficient control
necessary to conduct Client's business, discharge any fiduciary
responsibility that it may have, or comply with any applicable
licensing, regulatory or statutory requirement of Client.
Further, the Client retains full responsibility for its business,
products, and services.
(ii) Selective HR assumes responsibility for the payment of wages to
the Worksite Employees without regard to payments by Client to
Selective HR. Any wage payment to Worksite Employees in the event
of Client's
1
failure to meet their invoice obligations to Selective HR will be
paid at the applicable minimum wage (or the legally required
minimum salary or overtime pay).
(iii)Selective HR assumes responsibility for the payment of payroll
taxes from payroll on Worksite Employees. Selective HR
indemnifies and holds client harmless from direct out-of-pocket
expenses and costs to Client that may result from Selective HR's
failure to withhold and pay withheld taxes.
(iv) Selective HR retains authority to hire, terminate, discipline,
and reassign the Worksite Employees. However, Client also has the
right to accept or cancel the assignment of any Worksite
Employee.
(v) Selective HR has a responsibility for the direction and control
over management of safety, risk, and hazard control at the work
site or sites affecting the Worksite Employees, including;
1. Responsibility for performing safety inspections of Client
equipment and premises.
2. Responsibility for the promulgation and administration of
employment and safety policies.
3. Responsibility for the management and payment of workers'
compensation claims, claim filings, and related procedures.
(vi) Selective HR has given written notice of the relationship between
Selective HR and client to each Worksite Employee covered by this
Agreement.
(vii)Selective HR retains authority to resolve and decide Worksite
Employee grievances and disputes pursuant to Selective HR's
Dispute Resolution Procedure.
c. No person shall become a Worksite Employee, or issued a payroll check
until Client has furnished to Selective HR the following information
in writing and documents with respect to that person:
(i) Name, address, social security number.
(ii) Completed Employee Profile and Employment Information form.
(iii) W-4 withholding form.
(iv) Form I-9 (Immigration and Naturalization Service).
Selective HR's responsibility with respect to the processing of payroll
checks and furnishing other services shall be specifically conditioned on the
accuracy of the information
2
provided to Selective HR by the Client and the Worksite Employee, and the
Client's compliance with all of its obligations under this Agreement.
d. Selective HR will issue a payroll check to each Worksite Employee on
each payday as agreed between Selective HR and Client. If the Client
fails to make the required payment or deposit for the invoice amount,
Selective HR may exercise its right to immediately terminate the
Agreement pursuant to section 13(b). In that event, Selective HR shall
be responsible for the payment of wages as defined in Section 2b(ii)
above to Worksite Employees for any uncompensated pay period(s).
Selective HR's responsible for wage payment is limited to pay period
occurring prior to the Worksite Employees receiving notice of
termination. If Client is unable to satisfy the required payment,
Selective HR will begin collection proceedings against the Client for
any amounts paid by Selective HR due to Client's failure to pay.
e. Client agrees it will provide to Selective HR each pay period, records
of actual time worked by each employee and verify that all hours
worked by employees that are reported to Selective HR are accurate and
are in accordance with the requirements of the Fair Labor Standards
Act and other laws administered by the U.S. Department of Labor's Wage
and Hour Division and any applicable state law. These records
submitted to Selective HR shall become the basis for Selective HR to
issue all payroll checks. Selective HR shall not be responsible for
incorrect, improper or fraudulent records of hours worked.
f. If state, local or federal law requires an employee to possess or
maintain a special license or be supervised by a supervisor who is
required to possess or maintain a special license, Client will be
responsible for verifying such licensing or providing such required
supervision, unless Selective HR specifically agrees to a different
arrangement.
g. Client shall be responsible for the implementation and enforcement of
any work site procedures that exist for the purpose of preventing the
misappropriation, theft or embezzlement of Client's personal, real or
intellectual property.
3. Indemnification Issues. Client agrees to indemnify and hold harmless
Selective HR, its affiliated entities, shareholders, officers, directors,
agents and representatives (the "Selective HR Indemnified Parties") from
and against all claims, actions, costs and expenses (including legal fees
and expenses at all levels of proceedings), losses and liabilities of any
type (including liability to third parties), without limit, that may be
asserted or brought against Selective HR or any Selective HR Indemnified
Party that is related to this Agreement including but not limited to the
following:
a. Selective HR will not be liable or responsible for claims, penalties,
fines, judgements, court costs, or legal fees associated with the
Clients failure to follow
3
Selective HR employment policies and directives concerning employment
practices and job discrimination.
b. Selective HR has no responsibility or liability with respect to
Client's products and services produced by the Worksite Employees.
c. Selective HR will not be liable for Client's loss of business
goodwill, profits, future business or other consequential, special or
incidental damages to Client.
d. Selective HR will not be responsible for any claims or actions brought
by Worksite Employees or third parties resulting from a Worksite
Employees use of Client's machinery, facilities, equipment and/or
vehicles, other than claims covered by Selective HR's workers'
compensation carrier.
e. Selective HR is not engaged in the business rendered by the Worksite
Employees or by the Client.
Selective HR agrees to indemnify and hold harmless Client, its affiliated
entities, shareholders, officers, directors, agents and representatives from and
against all claims, actions, costs and expenses (including legal fees and
expenses at all levels of proceedings), losses and liabilities of any type
(including liability to third parties), without limit, arising out of the
negligent or willful failure of any non-Worksite Employee employed by Selective
HR at its corporate, or branch offices to comply with applicable workers'
compensation, withholding tax, or ERISA laws, rules and regulations, or where
any action is taken by Client in compliance with a written corporate Selective
HR policy, procedure, or directive which is illegal under any applicable local,
state or federal law. All indemnification's shall survive the termination of
this Agreement.
4. Worksite Employee Group Medical Benefits
a. Selective HR will provide group medical benefits to eligible Worksite
Employees. Selective HR determines eligibility pursuant to the
provisions of each applicable benefit plan offered. If for any reason
eligibility requirements are not met and/or maintained, Selective HR
has the right to modify this Agreement by striking this provision.
b. Client retains responsibility for all COBRA participants on any Client
sponsored group health plan.
c. The Worksite Employee who selects group medical benefits shall be
responsible to make such contributions to Selective HR via payroll
deduction. These deductions will be offset by any Client contribution
toward the Worksite Employees group medical benefit cost. The failure
to pay contributions when due will result in termination of coverage.
4
d. If a Worksite Employee is temporarily laid off (30 days or less),
group medical plan coverage shall continue during the layoff and the
requirement to pay contributions shall continue.
e. The cost of Group Medical Benefits is not included in the Selective HR
Service Fee noted on the Pricing Addendum. GroupMedical Benefits will
be invoiced each pay period based on Worksite Employee participation,
Client contribution, and plan selection.
5. Section 125 Cafeteria Plan. Selective HR will implement and maintain a
Section 125 Cafeteria Plan for all Worksite Employees. Employees have the
opportunity to purchase many of their benefits with pre-tax earnings.
6. 401(k) Plan Participation. Selective HR will make available to eligible
Worksite Employees a 401(k) Retirement Plan. Selective HR determines
eligibility pursuant to the plan provisions. An annual plan administration
fee per participant will apply.
7. Other Benefits. Selective HR will make available to all Worksite Employees
certain other benefits including but not limited to the following (in
addition to those services listed in other paragraphs of this Agreement).
Participation in these benefits is completely voluntary. Costs associated
with these benefits are not included in the Selective HR Service Fee. Cost
associated with these benefits will be collected through Worksite Employee
payroll deduction and/or through regular Client invoicing.
a. Disability Insurance Coverage. b. Dental Plan. c. Additional Vison Coverage
d. Life Insurance. e. Pre-paid Legal Service f. Supplemental Medical Plans.
8. Employment Practices Management.
a. Selective HR's service includes guidance regarding good management
techniques and compliance with various employment laws. For any
Worksite Employee covered by this Agreement, Selective HR will assist
the Client by providing guidance regarding the following laws:
(i) The Fair Labor Standards Act (FSLA) and/or comparable state and
local laws;
(ii) The Consolidated Omnibus Budget Reconciliation Act (COBRA)
(iii)The Immigration and Nationality Act and the Immigration Reform
and Control Act
(iv) The Consumer Credit Protection Act and/or comparable state or
local laws
5
(v) The Employee Retirement Income Security Act (ERISA) and other
laws covering employee benefit plans
(vi) The Family Medical Leave Act and similar state or local leave
laws
(vii)The National Labor Relations Act. The parties agree that the
Client is the employer that would be the party to any collective
bargaining agreement because the Client exercises control over
the primary employment conditions subject to a collective
bargaining agreement
(viii) Title VII of the Civil Rights Act, The Americans with
Disabilities Act (ADA). Selective HR is not responsible for any
cost associated with compliance of Title III of the ADA
pertaining to facility accessibility to the public or "reasonable
accommodation", The Age Discrimination in Employment Act (ADEA),
and any other applicable federal, state, or local employment
laws.
b. Selective HR will not accepts responsibility where the Client acts
independent of Selective HR's guidance or fails to make Selective HR
aware of any situation involving employment practices at the worksite.
Client understands that Selective HR's is not in the business of
providing legal services. The Client is independently responsible for
its own legal rights and obligations.
c. In addition, Selective HR will make available the following Human
Resources (HR) services:
(i) Wage and Hour compliance review and recommendations;
(ii) Unemployment claims management;
(iii) Worksite Employee Handbook review and recommendations;
(iv) Post-hire workers' compensation background check on each Worksite
Employee. Other H.R. Services deemed necessary by Selective HR or
requested by Client may involve an additional Selective HR
service fee, depending on the extent and complexity of the task.
The following could involve additional fees;
1. Selective HR's assistance in the creation of customized
Employee Handbook
2. Implementation of employment screening services, i.e.
criminal, credit, motor vehicle record, pre-employment
verification
3. Drug-Free Workplace policy development and management
4. Customized Compensation Programs
6
5. Supervisory/Management Training
9. Workers' Compensation Insurance. Selective HR shall provide workers'
compensation coverage for all Worksite Employees in such amounts as is
required by applicable law. Selective HR shall be responsible for the
management of workers' compensation claims, claims filing and related
procedures for any Worksite Employee that sustains a work- related injury.
This provision is subject to the following terms and conditions:
a. The Client agrees that during the terms of this Agreement they will
not employ anyone outside the co-employment arrangement without
Selective HR's knowledge, except for the independent contractors. If
Client hires a non-Worksite employee, the Clients agrees to obtain
workers' compensation coverage for that employee and name Selective HR
as a certificate holder. All Worksite Employees are assigned a
workers' compensation classification code based on their current job
function and a work-site designation(s). New or additional job
functions and/or work-sites must be submitted to Selective HR for
approval. Client assumes full responsibility for any workers'
compensation claim of any Worksite Employee working in a job function
or at a work-site not assigned by Selective HR.
b. If a Worksite Employee is injured, Client agrees to notify Selective
HR within twenty-four (24) hours to cooperate in conducting any
investigation following the accident, to provide transportation to a
medical facility and, if required due to medical restrictions, to
permit the Worksite Employee (where reasonably possible and permitted
by law) to work in a modified -duty capacity until such time as the
employee is no longer medically restricted from resuming duties
performed prior to the accident. Any fines or penalties incurred by
Selective HR as a result of Client's failure to report injuries will
passed on to Client.
10. Safe Work Environment. Client is responsible for maintaining a safe work
environment at all work sites and shall comply with all health and safety
laws, directives and rules and regulations. Selective HR shall assist and
provide guidance to Client in providing a safe work environment, subject to
the following conditions:
a. Client understands they are responsible for compliance with all
applicable laws, and regulation pertaining to such matters
b. Client is responsible for providing proper training and establish
committees in compliance with federal and state OSHA standards.
c. Selective HR shall provide assistance in performing safety inspections
of Client equipment and premises. Selective HR shall have the right to
inspect Client's premises at any reasonable time.
7
d. Client shall comply with all directives from Selective HR or any
governmental agency having jurisdiction over health, safety and work
environment matters. Client shall keep all required posters, notices,
and protective equipment available and in good working order.
11. Payment of Selective HR Invoice Amount
a. Each pay period, Selective HR will prepare an Invoice Amount that
generally consists of the Selective HR's Service Fee multiplied by the
gross payroll for that day period, and any other applicable fees. The
Invoice Amount is due and payable prior to payroll delivery.
b. Client shall pay for serviced rendered under this Agreement through
Automatic Clearing House (ACH) transfer or other method acceptable by
Selective HR Payment shall have been made only when Selective HR has
received final, irrevocable credit at its bank.
c. In the event funds in Client's account are insufficient to cover the
Invoice Amount, Client agrees to immediately (the same day) transfer
funds in the amount of the deficiency to Selective HR by wire
transfer, cashier's check or cash. Selective HR may immediately demand
that the guarantors, if any, make the payments.
d. Selective HR may, in its sole discretion, require Client to deposit
Selective HR Invoice Amount in advance of delivery of the payroll
checks. Selective HR may, in its sole discretion, require officers,
directors, and/or shareholders of Client to guarantee performance by
Client of its obligation under this Agreement. The failure of Client
to comply with such a request shall be deemed a material breach of the
Agreement.
e. Upon termination of the Agreement for any reason, if Selective HR
holds Client funds other than withheld amounts that must be paid to
the government, Selective HR may in its sole discretion deduct amounts
owed Selective HR by Client and return the remainder to Client on or
before sixty (60) days after termination of the Agreement without
interest.
f. The service fee is as set forth in the Pricing Addendum. The parties
agree and understand that the Service Fee calculation shown on the
Pricing Addendum may be adjusted for increases in statutory employment
taxes, a change in insurance cost, changed in Client's work force
(size, job functions, etc.) a change in Client's Worksite Employee
turnover rate, increase in severity or frequency of Worksite Employee
job related injuries, or change in payroll frequency or volume.
12. Liability Insurance. During the life of this Agreement, Client shall
maintain in full force
8
and affect comprehensive general liability (CGL) insurance with a minimum
combined single limit of three hundred thousand dollars ($300,000) covering
all work sites, activities, equipment and Worksite Employees. These CGL
insurance policies shall provide primary coverage for all claims. Selective
HR shall be given at least ten days advance written notice of cancellation.
Additionally, Client agrees to comply with the following:
a. If automobiles are owned by Client or used by Worksite Employees in
the course of performing their work, Client shall maintain vehicle
liability insurance that insures against liability for bodily injury
and property damage with a minimum combined single limit of five
hundred thousand dollars ($500,000). In states with "no-fault" laws,
PIP or equivalent coverage will be maintained. In the event a Worksite
Employee is involved in a covered accident, Client shall apply to its
own insurance carrier for primary coverage.
b. If Client provides a professional service, Client must carry adequate
professional malpractice insurance, as the nature of Client's business
requires, but no less than five hundred thousand dollars ($500,000).
If Client is not providing a professional service, Client shall
maintain general business liability insurance with a minimum coverage
amount of five hundred thousand dollars ($500,000).
c. Each party hereby waives any claim in its favor against the other
party by way of subrogation or otherwise for claims or losses covered
by such policies of insurance maintained by Client to the extent of
actual recovery from such policy of insurance.
13. Term of Agreement and Miscellaneous Provisions.
a. Term of Agreement. This Agreement shall start on the date it is
executed and shall remain in force and effect for a term on one (1)
year ("Initial Term"). Following the Initial Term, this Agreement
shall remain in full force an defect for successive monthly terms (the
"Extended Term") until the Agreement is terminated.
b. Either party upon thirty (30) days' written notice may terminate this
Agreement. Also, either party may terminate this Agreement immediately
in the event the other party commits a material breach of this
Agreement as provided in this Agreement.
c. Client acknowledges that it is essential to Selective HR's performance
under this Agreement that Selective HR have complete knowledge of any
government investigations or inquiry or private adversary action which
could in any manner impact upon the types of duties contemplated by
this Agreement. Client agrees to make complete and full disclosure of
any such administrative proceeding
9
(including, but not limited to EEOC, NLRB, OSHA or Wage and Hour
matters), investigation, lawsuit, or other adversary proceeding,
including those which are threatened as well as those not yet
asserted, in which Client has been involved during the last five (5)
years.
d. Time is of the essence in the performance of all acts required by this
Agreement.
e. The laws of the State of Florida shall govern this Agreement.
14. Material Breach. The following shall be deemed material breaches under the
terms of this Agreement as follows:
a. Failure to fund any accounts or to pay any amounts required under the
terms and conditions of this Agreement when due.
b. Client's failure to comply with any employment and/or safety
directives from Selective HR or government agencies.
c. Committing any act that affects Selective HR's rights as an employer
of the Worksite Employees.
d. Failure to maintain any insurance required under the terms of this
Agreement.
e. A change in the type of business conducted by Client, or where at any
time, Selective HR determines that a material adverse change has
occurred in the financial condition of Client, or that Client is
unable to pay its debts as they become due in the ordinary course of
business.
f. Client filing for insolvency, bankruptcy, or making assignments for
benefit of creditors.
g. Misrepresentation or inaccurate reporting of employee payroll hours is
cause for immediate termination of this contract.
15. Whole Agreement. This Agreement, together with the Pricing Addendum,
constitutes the entire Agreement between the parties. Any other agreement,
statement, or promise between the parties relating to the Agreement is
included.
16. Waiver. The failure of either party to this Agreement to require
performance by the other party, or fail to claim a breach of any provision
of this Agreement, will not be deemed a waiver of any subsequent breach or
affect the enforceablitiy of this Agreement or prejudice either party as
regards to any subsequent action.
17. Validity. In the event a dispute arises under this Agreement shall be held
to be invalid or
10
unenforceable, the balance of this Agreement shall remain in full effect.
18. Dispute Resolution. In the event a dispute arises under this Agreement, the
parties agree to attempt resolution by mediation in accordance with the
procedures of the Federal Mediation and Conciliation Service, or by a
procedure agreed to by both parties. Once mediation is elected, the parties
agree to allow a minimum of (60) days to resolve the dispute with
mediation. If mediation fails, either party may elect to arbitrate the
matter by serving written notice upon the other within fifteen (15) days
after the mediation. Arbitration will be in accordance with the Commercial
Arbitration Rules of the American Arbitration Association, pursuant to the
Florida Arbitration Code. The place of the arbitration shall be Bradenton,
Florida, or other mutually agreed upon location.
19. Attorney's Fees. In the event that any action or arbitration is brought by
either party hereto as a result of breach or default in any provision of
this Agreement, the prevailing party in such action shall be awarded
attorney's fees and costs incurred by such party in such action in addition
to any other relief to which the party may be entitled.
20. No Partnership or Agency. This Agreement does not create a partnership or
joint venture between Client an Selective HR, and no fiduciary duty shall
arise from the relationship created herein. In no event may Client act as
an agent or Selective HR unless specifically authorized to do so in
writing.
Selective HR and the Client execute this Agreement, in their respective
corporate name by a duly authorized officer as of the date first written above.
Diversified Operations III, Inc.:
D/B/A Selective HR Solutions ▇▇-▇▇▇▇▇▇▇ Client
Sign Name: /s/ ▇▇ ▇▇▇▇ Sign Name: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------- ------------------------------------
Date Signed: 3/16/01 Date Signed: 4-10-01
--------------------------------------- ------------------------------------
Print Name: ▇▇ ▇▇▇▇ Print Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------- ------------------------------------
Title: Title: President / CEO
--------------------------------------- ------------------------------------
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇., ▇▇▇▇▇▇▇: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------- ------------------------------------
11
Pricing Addendum
Client Name: Surgical Safety Products
Selective HR Invoice Amounts:
Silver Gold
Payroll Frequency: Weekly Option* Option*
Service Service Fee
WC Estimated Fee % Rate
Code EE's Payroll % Rate
FL - Clerical 8810 15 19,660 110.77% 110.87%
FL - Outside Sales 8742 3 3,205 110.20% 110.30%
FL - Physicans 8832 6 3,877 110.30% 110.40%
Client
Initial Date
X Silver Option: Standard Services Program /s/GMS
Gold Option: Extended Services Program
1. Selective HR's Service Fee percentage of gross payroll will decline as
co-employees reach designated payroll tax limits.
FEDERAL/STATE UNEMPLOYMENT OASDI
Florida 1.30% 6.20%
2. Selective HR's Service Fee percentage does not include the actual cost of
employee benefit programs selected.
3. Selective HR's Service Fee percentage does not include the fees associated
with the set- up and maintenance of the 40(k) Retirement Plan. See brochure
for fee description.
4. A New Employee Set-up fee of $ 10 will be invoiced for each new work-site
employee hired.
5. Additonal invoice or payroll deliveries will be charged a per location fee
of: $
6. One-time Setup Fee to collected at time of service agreement signing: $
7. Insufficient Funds Fee Per Occurrence: $100
12
Invoice Payment Method:
Selective HR will receive invoice payment via Automatic Clearing House (ACH)
transfer. To assure timely invoice payment and timely payroll delivery, client
agrees to notify Selective HR of all payroll hours, changes, or any invoice
adjustments by 10:00 AM, two (2) days prior to desired payroll delivery.
The above Invoice Rates are not binding until accepted, and initialed below by
an officer of Selective HR
Accepted by Client Initial: /s/ GMS Date:
Accepted by Selective HR Initial: /s/ illegible Date:
13
