Document:

fzmd-ex1050_323.htm

 

Exhibit10.50

Professional Employer Organization Client Service Agreement

This Professional Employer Organization (“PEO”) Client Service Agreement (the “Agreement”), dated as of January 1, 2017 (the “Effective Date”), is by and between AmBio Staffing, LLC, a Texas limited liability company, with offices located at 1565 North Central Expressway, Suite 300, Richardson, TX 75080 its successors and assigns (the “PEO Provider”) and Fuse Medical, Inc., a Delaware corporation, with offices located at 1300 Summit Avenue, Suite 670, Fort Worth, TX 76102 (the “Client”).

1. Relationship of the Parties; Services. The parties agree to enter into an arrangement for PEO Provider to provide human resources-related services to Client as a co-employer of Client’s employees. For purposes of providing services under this arrangement, PEO Provider is designated as the Administrative Employer and agrees that it is a co-employer for purposes of carrying out the responsibilities described in Section 2 of this Agreement (hereafter “Services”). Client is designated as the Worksite Employer and agrees that it is a co-employer for purposes of carrying out the responsibilities described in Section 3 of this Agreement. Client’s employees are referred to as Work Site Employees (WSEs) throughout this Agreement.

2. Rights and Responsibilities of PEO Provider.

2.1 PEO Provider assumes full responsibility, as the Administrative Employer of WSEs, for the duties described in this 
Section 2.

2.2 Payment of wages, as reported by Client, through PEO Provider’s payroll, including the following as applicable from which PEO Provider will make all required deductions and withholdings under applicable federal, state and local laws:

	
 
	
(a)
	
Salary or other Base Pay;

	
 
	
(b)
	
Commissions;

	
 
	
(c)
	
Bonuses;

	
 
	
(d)
	
Overtime pay;

	
 
	
(e)
	
Vacation pay;

	
 
	
(f)
	
Sick time pay;

	
 
	
(g)
	
Paid time off;

	
 
	
(h)
	
Paid leaves of absence; and

	
 
	
(i)
	
Severance.

2.3 Reporting and remitting payroll taxes, in compliance with all federal and state tax requirements on payroll wages paid under this Agreement.

2.4 Providing and administering health and welfare benefits through PEO Provider-sponsored plans, in compliance with applicable federal and state laws, and subject to eligibility requirements. These employee benefits are described on the attached Employee Benefits Addendum and include:

	
 
	
(a)
	
 Medical;

	
 
	
(b)
	
 Dental;

	
 
	
(c)
	
 Vision and

	
 
	
(d)
	
 Health Flexible Spending Accounts;

2.5 Compliance with requirements of the Affordable Care Act (ACA) (that is, the Patient Protection and Affordable Care Act (PPACA), as amended by the Health Care and Education Reconciliation Act of 2010 (HCERA)), as applicable.

2.6 Compliance with requirements of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), the Uniformed Services Employment and Reemployment Rights Act of 1994 and the Health Insurance Portability and Accountability Act of 1996 (HIPAA).

 

		
	
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2.7 Providing a Section 401(k) plan or other retirement plan if and when the Client requests.

2.8 Providing workers compensation insurance coverage that covers the WSEs, as well as processing and defending all workers compensation claims.

2.9 Processing and defending unemployment claims.

2.10 Aggregate Client employee-related policies for the purpose of developing the basis of an Employee Handbook, that comply with federal, state and local laws in all locations where Client has employees. PEO Provider agrees that it will ensure the Employee Handbook and all employee-related policies are timely updated and communicated, as necessary, due to changes in the law. If requested, PEO Provider agrees to make any stylistic changes to customize the Employee Handbook and employee-related policies to better reflect Client’s culture.

2.11 Training employees on compliance with workplace policies, including those that may be required by law.

2.12 Providing a worksite safety program, including training of WSEs.

2.13 PEO Provider shall coordinate the on-boarding of new WSEs, including execution of pre-employment screening, back-ground checks, reference checks, drug testing and ensure proper approval and authorization of any and all WSEs changes prior to execution as well as proper completion and filing and maintenance of all relevant WSEs personnel documentation.

2.14 PEO Provider shall maintain proper filing and maintenance of all relevant WSEs personnel documentation, employee-related records, as may be require federal and state laws.

2.15 PEO Provider will ensure benefit vendor invoices at all times properly reflect WSEs benefit selections and related payroll withholdings. Discrepancies will be identified and resolved in a timely manner.

2.16 Managing and tracking WSEs paid time-off, observed holidays and employee leaves of absence, ensuring compliance with Client policies.

2.17 PEO Provider and Client are jointly responsible for compliance with all applicable employment laws, including, but not limited to the following federal laws, and their state or local equivalents:

	
 
	
(a)
	
Title VII of the Civil Rights Act of 1964;

	
 
	
(b)
	
Americans with Disabilities Act, as amended;

	
 
	
(c)
	
Fair Labor Standards Act;

	
 
	
(d)
	
Family and Medical Leave Act;

	
 
	
(e)
	
Section 503 of the Rehabilitation Act;

	
 
	
(f)
	
Occupational Safety and Health Act of 1970 (OSHA); and

	
 
	
(g)
	
Immigration laws.

2.18 The Client shall be primarily responsible for recruiting, hiring, and firing workers and the PEO Provider shall support these Client efforts.

3. Rights and Responsibilities of Client.

3.1 Client agrees, as the Worksite Employer, to be responsible for the following duties described in this Section 3.

3.2 Client shall have primary responsibility for the day-to-day control and supervision of WSEs, as well as hiring, firing, disciplining or promoting WSEs.

3.3 Properly classify employees as exempt or non-exempt under applicable wage and hour laws.

 

		
	
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3.4 Maintain accurate records regarding time worked by WSEs and timely transmit compensation payment information to PEO Provider for each work pay-cycle on a bi-weekly basis including as applicable:

	
 
	
(a)
	
Wages, including whether salaried or hourly, and regular rate of pay;

	
 
	
(b)
	
Overtime;

	
 
	
(c)
	
Commissions;

	
 
	
(d)
	
Bonuses;

	
 
	
(e)
	
Vacation pay;

	
 
	
(f)
	
Sick pay;

	
 
	
(g)
	
Paid time off;

	
 
	
(h)
	
Paid leaves of absence; and

	
 
	
(i)
	
Severance payments.

3.5 Timely report to PEO Provider any changes in its workforce, such as employees hired or terminated, and any changes in salary, hour wages or other compensation, along with applicable authorizations and approvals.

3.6 Maintain licenses that may be required of any WSEs.

3.8 Provide a safe work environment, in compliance with OSHA, and timely reportany work-related injuries to PEO Provider.

4. Term. This Agreement shall commence as of the Effective Date and shall continue thereafter a period of two (2) years with subsequent one (1) year automatic renewal terms , unless sooner terminated pursuant to Section 6.

5. Fees; Payment Terms.

5.1 Service Fees. In consideration of the provision of the services by PEO Provider and the rights granted to Client under this Agreement, Client shall pay the fees set forth in Exhibit A. Fees will be reassessed quarterly, no earlier than March 31, 2017 based on then current cost trends and activity.

5.2 Payment Terms. PEO Provider shall issue invoices to Client, which shall be due and payable upon receipt after Client receives such invoice, except for any amounts disputed by Client in good faith. All payments hereunder shall be in US dollars and made by check or wire transfer.

6. Termination; Effect of Termination.

6.1 Either party, in its sole discretion, may terminate this Agreement, in whole or in part, at any time without cause, by providing ninety (90) days’ prior written notice to the other party. On the termination of this Agreement for any reason, the WSEs will remain employees of the Client as the initial employer.

6.2 Either party may terminate this Agreement, effective upon written notice to the other party (the “Defaulting Party”), if the Defaulting Party:

(a) (i) materially breaches this Agreement, and such breach is incapable of cure; or (ii) with respect to a material breach capable of cure, the Defaulting Party does not cure such breach within thirty (30) days after receipt of written notice of such breach.

(b) (i) becomes insolvent or admits its inability to pay its debts generally as they become due; (ii) becomes subject, voluntarily or involuntarily, to any proceeding under any domestic or foreign bankruptcy or insolvency law, which is not fully stayed within seven (7) business days or is not dismissed or vacated within Forty-five (45) days after filing; (iii) is dissolved or liquidated or takes any corporate action for such purpose; (iv) makes a general assignment for the benefit of creditors; or (v) has a receiver, trustee, custodian or similar agent appointed by order of any court of competent jurisdiction to take charge of or sell any material portion of its property or business.

6.3 The rights and obligations of the parties set forth in this Section 6.3 and Section 7, Section 8, Section 9, Section 11, Section 12, Section 13 and Section 14, and any right or obligation of the parties in this Agreement which, by its nature, will survive any such termination or expiration of this Agreement.

 

		
	
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7. Intellectual Property Rights; Ownership.

7.1 Client is, and shall be, the sole and exclusive owner of all right, title and interest in and to the materials provided by PEO Provider pursuant to its obligations under this Agreement (hereafter “Deliverables”), including all intellectual property rights therein. PEO Provider agrees, and will cause its employees (meaning those employees employed by PEO Provider to provide services under this Agreement, who are hereafter referred to as “PEO Provider Personnel”) to agree, that with respect to any Deliverables that may qualify as “work made for hire” as defined in 17 U.S.C. § 101, such Deliverables are hereby deemed a “work made for hire” for Client. To the extent that any of the Deliverables do not constitute a “work made for hire”, PEO Provider hereby irrevocably assigns, and shall cause PEO Provider Personnel to irrevocably assign to Client, in each case without additional consideration, all right, title and interest throughout all United States territories and to the Deliverables, including all intellectual property rights therein. PEO Provider shall cause PEO Provider Personnel to irrevocably waive, to the extent permitted by applicable law, any and all claims such employees may now or hereafter have in any jurisdiction with respect to the Deliverables.

7.2 Upon the reasonable request of Client, PEO Provider shall, and shall cause PEO Provider Personnel to, promptly take such further actions, including execution and delivery of all appropriate instruments of conveyance, as may be necessary to assist Client to prosecute, register, perfect or record its rights in or to any Deliverables.

8. Confidential Information.

8.1 Both parties may be given access to or acquire information which is proprietary or confidential to the other party and its affiliated companies, clients and customers. Any and all such information obtained by either party or the WSEs shall be deemed to be confidential and proprietary information. Both parties agree to hold such information in strict confidence and not to disclose such information to third parties or to use such information for any purposes whatsoever other than the providing of Services under this Agreement. Either party may request WSEs or employees of the PEO Provider responsible for providing Services to the Client to enter into confidentiality agreements.

9. Representations and Warranties.

9.1 Each party represents and warrants to the other party that:

	
 
	
(a)
	
it is duly organized, validly existing and in good standing as a corporation or other entity as represented herein under the laws and regulations of its jurisdiction of incorporation, organization or chartering;

	
 
	
(b)
	
it has the full right, power and authority to enter into this Agreement, to grant any rights and licenses granted hereunder and to perform its obligations hereunder;

	
 
	
(c)
	
the execution of this Agreement by its representative whose signature is set forth at the end hereof has been duly authorized by all necessary corporate action of the party; and

	
 
	
(d)
	
when executed and delivered by such party, this Agreement will constitute the legal, valid and binding obligation of such party, enforceable against such party in accordance with its terms.

9.2 PEO Provider represents and warrants to Client that:

	
 
	
(a)
	
it shall perform the Services using personnel of required skill, experience and qualifications and in a professional and workmanlike manner in accordance with generally recognized and commercially reasonable industry standards for similar services and shall devote adequate resources to meet its obligations under this Agreement;

	
 
	
(b)
	
it is a Licensed Professional Employer Organization by the Texas Department of Licensing and Regulation and will maintain in good standing at all times such license;

	
 
	
(c)
	
it is in compliance with, and shall perform the Services in compliance with, all applicable laws, including 
PEO-specific laws in states where WSEs are located;

9.3 EXCEPT FOR THE EXPRESS WARRANTIES IN THIS AGREEMENT, (A) EACH PARTY HEREBY DISCLAIMS ALL WARRANTIES, EITHER EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE UNDER THIS AGREEMENT, AND (B) PEO PROVIDER SPECIFICALLY DISCLAIMS ALL IMPLIED WARRANTIES OF MERCHANTABILITY, AND FITNESS FOR A PARTICULAR PURPOSE.

 

		
	
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10. Indemnification.

10.1 PEO Provider shall defend, indemnify and hold harmless Client and its officers, directors, employees, agents, successors and permitted assigns (each, a “Client Indemnitee”) from and against any and all claims, demands, damages (including liquidated, punitive and compensatory), actions in state or federal courts or before administrative agencies, losses and liabilities, costs and expenses (including attorneys’ fees) and monetary fines or penalties assessed by any administrative agency (hereafter “Actions”) arising out of or resulting from:

	
 
	
(a)
	
bodily injury, death of any person or damage to real or tangible, personal property resulting from the willful, fraudulent or negligent acts or omissions of PEO Provider or PEO Provider Personnel; and

	
 
	
(b)
	
PEO Provider’s breach of any representation, warranty or obligation of PEO Provider set forth in this Agreement, including PEO Provider’s failure to comply with all employment laws in connection with the Services provided by PEO Provider under this Agreement.

10.2 Client shall defend, indemnify and hold harmless PEO Provider and its officers, directors, employees, agents, successors and permitted assigns from and against any and all Actions arising out of or resulting from:

	
 
	
(a)
	
bodily injury, death of any person or damage to real or tangible, personal property resulting from the [grossly] negligent or willful acts or omissions of Client; and

	
 
	
(b)
	
Client’s breach of any representation, warranty or obligation of Client of this Agreement.

10.3 The party seeking indemnification hereunder shall promptly notify the indemnifying party in writing of any Action and cooperate with the indemnifying party at the indemnifying party’s sole cost and expense. The indemnifying party shall immediately take control of the defense and investigation of such Action and shall employ counsel of its choice to handle and defend the same, at the indemnifying party’s sole cost and expense. The indemnifying party shall not settle any Action in a manner that adversely affects the rights of the indemnified party without the indemnified party’s prior written consent, which shall not be unreasonably withheld or delayed. The indemnified party’s failure to perform any obligations under this Section 10.3 shall not relieve the indemnifying party of its obligations under this Section 10.3 except to the extent that the indemnifying party can demonstrate that it has been materially prejudiced as a result of such failure. The indemnified party may participate in and observe the proceedings at its own cost and expense.

11. Limitation of Liability.

11.1 EXCEPT AS OTHERWISE PROVIDED IN Section 11.3, IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER OR TO ANY THIRD PARTY FOR ANY LOSS OF USE, REVENUE OR PROFIT OR LOSS OF DATA OR FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, EXEMPLARY, SPECIAL OR PUNITIVE DAMAGES WHETHER ARISING OUT OF BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, REGARDLESS OF WHETHER SUCH DAMAGE WAS FORESEEABLE AND WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

11.2 EXCEPT AS OTHERWISE PROVIDED IN Section 11.3, IN NO EVENT WILL EITHER PARTY’S LIABILITY ARISING OUT OF OR RELATED TO THIS AGREEMENT, WHETHER ARISING OUT OF OR RELATED TO BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, EXCEED TWO (2) TIMES THE AGGREGATE AMOUNTS PAID OR PAYABLE TO PEO PROVIDER PURSUANT TO THIS AGREEMENT.

11.3 The exclusions and limitations in Section 11.1 and Section 11.2 shall not apply to:

	
 
	
(a)
	
damages or other liabilities arising out of or relating to a party’s failure to comply with its obligations under Section 7 (Intellectual Property Rights; Ownership);

	
 
	
(b)
	
damages or other liabilities arising out of or relating to a party’s failure to comply with its obligations under Section 8 (Confidential Information);

	
 
	
(c)
	
a party’s indemnification obligations under Section 10 (Indemnification);

	
 
	
(d)
	
damages or other liabilities arising out of or relating to a party’s gross negligence, willful misconduct or intentional acts;

	
 
	
(e)
	
death or bodily injury or damage to real or tangible personal property resulting from a party’s negligent acts or omissions;

 

		
	
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(f)
	
damages or liabilities to the extent covered by a party’s insurance; and

	
 
	
(g)
	
a party’s obligation to pay attorneys’ fees and court costs in accordance with Section 14.2.]]

12. Insurance.

12.1 At all times during the Term of this Agreement and for a period of three years thereafter, PEO Provider shall procure and maintain, at its sole cost and expense, at least the following types and amounts of insurance coverage:

	
 
	
(a)
	
Commercial General Liability with limits no less than $1,000,000.00 per occurrence and $2,000,000.00 in the aggregate, including bodily injury and property damage and products and completed operations, which policy will include contractual liability coverage insuring the activities of PEO Provider under this Agreement;

	
 
	
(b)
	
Worker’s Compensation with limits no less than the greater of (i) $1,000,000.00 or (ii) the minimum amount required by applicable law;

	
 
	
(c)
	
If and when applicable, ERISA fidelity bond covering the qualified retirement plan or any other employee benefit plan as required by Section 412 of the Employee Retirement Income Security Action of 1974 (ERISA) in an amount determined under DOL Reg. § 2580.412-11. The ERISA fidelity bond shall satisfy the requirements of ERISA Section 412 and the regulations;

	
 
	
(d)
	
Commercial Automobile Liability with limits no less than $1,000,000.00, combined single limit;

and

	
 
	
(e)
	
Errors and Omissions/Professional Liability with limits no less than $1,000,000.00 per occurrence and $2,000,000.00 in the aggregate.

12.2 Except for the ERISA fidelity bond required in Section 12.1(c), all insurance policies required pursuant to this Section 12 shall:

	
 
	
(a)
	
be issued by insurance companies reasonably acceptable to Client;

	
 
	
(b)
	
 provide that such insurance carriers give Client at least 30 days’ prior written notice of cancellation or non-renewal of policy coverage; provided that, prior to such cancellation, the PEO Provider shall have new insurance policies in place that meet the requirements of this Section 12;

	
 
	
(c)
	
waive any right of subrogation of the insurers against the Client.

	
 
	
(d)
	
provide that such insurance be primary insurance and any similar insurance in the name of and/or for the benefit of Client shall be excess and non-contributory; and

	
 
	
(e)
	
name Client and Client’s Affiliates, including, in each case, all successors and permitted assigns, as additional insureds.

12.3 Upon the written request of Client, PEO Provider shall provide Client with copies of the certificates of insurance and policy endorsements for all insurance coverage required by this Section 12, and shall not do anything to invalidate such insurance. This Section 12 shall not be construed in any manner as waiving, restricting or limiting the liability of either party for any obligations imposed under this Agreement (including but not limited to, any provisions requiring a party hereto to indemnify, defend and hold the other harmless under this Agreement).

13. Non-Solicitation.

13.1 During the Term of this Agreement and for a period of twenty-four (24) months thereafter, neither party shall, directly or indirectly, in any manner solicit or induce for employment any person who performed any work under this Agreement who is then in the employment of the other party. A general advertisement or notice of a job listing or opening or other similar general publication of a job search or availability to fill employment positions, including on the internet, shall not be construed as a solicitation or inducement for the purposes of this Section 13.1, and the hiring of any such employees or independent contractor who freely responds thereto shall not be a breach of this Section 13.1.

13.2 If either PEO Provider or Client breaches Section 13.1, the breaching party shall, on demand, pay to the non-breaching party a sum equal to two (2) year’s basic salary and the annual fee that was payable by the claiming party to that employee, worker or independent contractor plus the recruitment costs incurred by the non-breaching party in replacing such person.

 

		
	
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14. Notices.

14.1 All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next business day if sent after normal business hours of the recipient or (d) on the third (3rd) day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the addresses indicated below (or at such other address for a party as shall be specified in a notice given in accordance with this Section 14.1.

 

	
If to PEO Provider:
	
 
	
1565 North Central Expressway 

Suite 300

Richardson, TX 75080

	
 
	
 
	
 

	
 
	
 
	
Facsimile: 972.354.5568 

Attention:    Managing Member

	
 
	
 
	
 

	
If to Client:
	
 
	
1300 Summit Avenue 

Suite 670

Fort Worth, TX 76102

	
 
	
 
	
 

	
 
	
 
	
Facsimile: 817.887.2172 

Attention:    Chief Executive Officer

14.2 For purposes of this Agreement, (a) the words “include,” “includes” and “including” shall be deemed to be followed by the words “without limitation”; (b) the word “or” is not exclusive; and (c) the words “herein,” “hereof,” “hereby,” “hereto” and “hereunder” refer to this Agreement as a whole. Unless the context otherwise requires, references herein: (x) to Sections, Schedules, Exhibits and Statements of Work refer to the Sections of, and Schedules and Exhibits attached to this Agreement; (y) to an agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof and (z) to a statute means such statute as amended from time to time and includes any successor legislation thereto and any regulations promulgated thereunder. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted. The Schedules and Exhibits referred to herein shall be construed with, and as an integral part of, this Agreement to the same extent as if they were set forth verbatim herein.

14.3 This Agreement, together with all Schedules, Exhibits and any other documents incorporated herein by reference, constitutes the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter. In the event of any conflict between the terms and provisions of this Agreement and those of any Schedule or Exhibit, the following order of precedence shall govern: (a) first, this Agreement, exclusive of its Exhibits and Schedules; and (b) second, any Exhibits and Schedules to this Agreement.

14.4 Neither party may assign, transfer or delegate any or all of its rights or obligations under this Agreement, without the prior written consent of the other party, which consent shall not be unreasonably withheld or delayed. No assignment shall relieve the assigning party of any of its obligations hereunder. Any attempted assignment, transfer or other conveyance in violation of the foregoing shall be null and void. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns.

14.5 This Agreement is for the sole benefit of the parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever, under or by reason of this Agreement.

14.6 The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.

 

		
	
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14.7 This Agreement may only be amended, modified or supplemented by an agreement in writing signed by each party hereto. No waiver by any party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. Except as otherwise set forth in this Agreement, no failure to exercise, or delay in exercising, any rights, remedy, power or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

14.8 If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or unenforceable, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.

14.9 This Agreement shall be governed by and construed in accordance with the internal laws of the State of Texas without giving effect to any choice or conflict of law provision or rule or any other jurisdiction that would cause the application of Laws of any jurisdiction other than those of the State of Texas. Any legal suit, action or proceeding arising out of this Agreement or the Services provided hereunder be instituted in the federal courts of the United States or the courts of the State of Texas in each case located in the city of Richardson and County of Dallas, and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding. Service of process, summons, notice or other document by mail to such party’s address set forth herein shall be effective service of process for any suit, action or other proceeding brought in any such court.

14.10 Each party irrevocably and unconditionally waives any right it may have to a trial by jury in respect of any legal action arising out of or relating to this Agreement or the transactions contemplated hereby.

14.11 Each party acknowledges that a breach by a party of Section 7 (Intellectual Property Rights; Ownership) or Section 8 (Confidential Information) may cause the non-breaching party irreparable damages, for which an award of damages would not be adequate compensation and agrees that, in the event of such breach or threatened breach, the non-breaching party will be entitled to seek equitable relief, including a restraining order, injunctive relief, specific performance and any other relief that may be available from any court, in addition to any other remedy to which the non-breaching party may be entitled at law or in equity. Such remedies shall not be deemed to be exclusive but shall be in addition to all other remedies available at law or in equity, subject to any express exclusions or limitations in this Agreement to the contrary.

14.12 In the event that any action, suit, or other legal or administrative proceeding is instituted or commenced by either party hereto against the other party arising out of or related to this Agreement, the prevailing party shall be entitled to recover its attorneys’ fees and court costs from the non-prevailing party.

14.13 This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

 

		
	
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

 

	
 
	
AmBio Staffing, LLC

	
 
	
 

	
 
	
By
	
 
	
/s/ Bill McLaughlin

	
 
	
Name:
	
 
	
Bill McLaughlin

	
 
	
Title: 
	
 
	
Chief Financial Officer

	
 
	
 
	
 
	
 

	
 
	
Fuse Medical, Inc.

	
 
	
 

	
 
	
By
	
 
	
/s/ Christopher C. Reeg

	
 
	
Name:
	
 
	
Christopher C. Reeg

	
 
	
Title: 
	
 
	
Chief Executive Officer

 

EXHIBIT A

FEE SCHEDULE

EXHIBIT B

EMPLOYEE BENEFITS ADDENDUM

 

		
	
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Exhibit 10.2

 

WARRANT NO. _________

 

Dated: _________________

 

 

 

WARRANT

 

THESE SECURITIES AND THE SECURITIES ISSUABLE UPON THEIR EXERCISE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE TRANSFERRED UNLESS PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, A "NO-ACTION" LETTER FROM THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION (THE “COMMISSION” OR THE “SEC”) WITH RESPECT TO SUCH TRANSFER, A TRANSFER MEETING THE REQUIREMENTS OF RULE 144 OF THE COMMISSION, OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY SUCH TRANSFER IS EXEMPT FROM SUCH REGISTRATION.

 

 

Zero Gravity Solutions, Inc.

 

 

Zero Gravity Solutions, Inc., a corporation organized under the laws of the State of Nevada (the “Company”), hereby certifies that, for value received from ________________________, a [insert state of incorporation or state of residence] (the “Holder”), is entitled, subject to the terms set forth below, to purchase from the Company up to a total of [________] shares of the common stock (equal to one half of the amount of Units the Holder subscribed to under the Company’s offering of Units, of even date (the “Offering”)), $0.001 par value per share (the “Common Stock”), of the Company (the “Warrant Shares”), at an exercise price equal to six dollars ($6.00) per share (the “Exercise Price”). This Warrant may be exercised at any time after issuance through and including the Fifth (5th) anniversary of its original issuance as noted above (the “Expiration Date”), subject to the following terms and conditions:

 

1.     Registration of Warrant. The Company shall, from time to time and whenever requested by the Holder, register this Warrant in conformity with records to be maintained by the Company for such purpose (the “Warrant Register”) in the name of the Holder. The Company shall treat the registered Holder of this Warrant as the absolute owner hereof for any and all purposes, including the exercise hereof or any distribution to the Holder, and the Company shall not be affected by notice to the contrary.

 

1

 

 

2.     Registration of Transfers and Exchanges. 

 

(a)     The Company or the transfer agent shall enter or record the transfer of all or any portion of this Warrant in the Warrant Register, upon surrender of this Warrant to the Company at the office specified herein or pursuant to Section 11 hereof. Upon any such registration or transfer, a new warrant to purchase Common Stock, in substantially the form of this Warrant (any such new warrant hereinafter referred to as a “New Warrant”), evidencing the portion of this Warrant so transferred shall be issued to the transferee and a New Warrant evidencing the remaining portion of this Warrant not so transferred, if any, shall be issued to the Holder. The acceptance of the New Warrant by the transferee thereof shall be deemed the acceptance of such transferee of all of the rights and obligations of a holder of a Warrant.

 

(b)     This Warrant is exchangeable, upon the surrender hereof by the Holder to the office of the Company specified herein or pursuant to Section 3(b) hereof for one or more New Warrants, evidencing in the aggregate the right to purchase the number of Warrant Shares which may then be purchased hereunder. Any such New Warrant shall be dated as of the date of such exchange.

 

3.     Duration and Exercise of Warrants. 

 

(a)     This Warrant shall be exercisable by the registered Holder on any business day before 5:00 P.M., New York time, at any time and from time to time on or after the date hereof to and including the Expiration Date. At 5:00 P.M., New York time on the Expiration Date, the portion of this Warrant not exercised prior thereto shall be and become void and of no value. Prior to the Expiration Date, the Company may not call or otherwise redeem this Warrant without the prior written consent of the Holder, which consent shall be given or withheld at the sole and absolute discretion of the Holder.

 

(b)     Subject to Section 2(b), Section 6 and Section 10 hereof, upon: (x) surrender of this Warrant, together with the Form of Election to Purchase attached hereto duly completed and signed, to the Company at its address for notice set forth in Section 11 hereof; and (y) payment of the Exercise Price multiplied by the number of Warrant Shares that the Holder intends to purchase hereunder, in the manner provided hereunder, all as specified by the Holder in the Form of Election to Purchase, the Company shall promptly (but in no event later than ten (10) business days after the Date of Exercise (as defined below)) issue or cause to be issued and cause to be delivered to the Holder in such name(s) as the Holder may designate, a certificate for the Warrant Shares issuable upon such exercise and free of restrictive legends unless a registration statement covering the resale of the Warrant Shares and naming the Holder as a selling stockholder thereunder is not then effective or the Warrant Shares are not freely transferable without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act then the Warrant Shares will bear a Securities Act restrictive legend. Any person so designated by the Holder to receive Warrant Shares shall be deemed to have become holder of record of such Warrant Shares as of the Date of Exercise of this Warrant. A “Date of Exercise” means the date on which the Company shall have received (I) this Warrant (or any New Warrant, as applicable), together with the Form of Election to Purchase attached hereto (or attached to such New Warrant) appropriately completed and duly signed; and (II) payment of the Exercise Price for the number of Warrant Shares so indicated by the holder hereof to be purchased.

 

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(c)     This Warrant shall be exercisable in its entirety or, from time to time, for a portion of the number of Warrant Shares. If less than all of the Warrant Shares which may be purchased under this Warrant are exercised at any time, the Company shall issue or cause to be issued, at its expense, a New Warrant evidencing the right to purchase the remaining number of Warrant Shares for which no exercise has been evidenced by this Warrant.

 

4.     Piggyback Registration Rights. The Holder shall be granted certain Piggyback Registration Rights as more fully described in that certain Piggyback Registration Rights Agreement entered into in connection with the Offering.

 

5.     Payment of Taxes. Upon the exercise of this Warrant, the Company will pay all documentary stamp taxes attributable to the issuance of Warrant Shares; provided, however, that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the registration of any certificates for Warrant Shares or Warrants in a name other than that of the Holder. The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon exercise hereof.

 

6.     Replacement of Warrant. If this Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation hereof, or in lieu of and substitution for this Warrant, a New Warrant, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and indemnity, if requested, satisfactory to it. Applicants for a New Warrant under such circumstances shall comply with such other reasonable regulations and procedures and pay such other reasonable charges as the Company may prescribe.

 

7.     Reservation of Warrant Shares. The Company covenants that it will at all times reserve and keep available out of the aggregate of its authorized but unissued Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon exercise of this Warrant as herein provided, the number of Warrant Shares which are then issuable and deliverable upon the exercise of this entire Warrant, free from preemptive rights or any other actual contingent purchase rights of persons other than the Holder (taking into account the adjustments and restrictions of Section 8 hereof). The Company covenants that all Warrant Shares that shall be so issuable and deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance with the terms hereof, be duly and validly authorized, issued and fully paid and nonassessable. If the Company does not have a sufficient amount of Common Stock authorized to reserve for the Warrant Shares, it shall, as soon as reasonably practicable, use its best efforts to increase the number of its authorized shares such that the Company will have a sufficient amount of Common Stock authorized to reserve for the Warrant Shares.

 

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8.     Certain Adjustments. The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment from time to time as set forth in this Section 8. Upon each such adjustment of the Exercise Price pursuant to this Section 8, the Holder shall thereafter but prior to the Expiration Date be entitled to purchase, at the Exercise Price resulting from such adjustment, the number of Warrant Shares obtained by multiplying the Exercise Price in effect immediately prior to such adjustment by the number of Warrant Shares issuable upon exercise of this Warrant immediately prior to such adjustment and dividing the product thereof by the Exercise Price resulting from such adjustment. 

 

(a)     An adjustment shall be made, if the Company, at any time while this Warrant is outstanding (i) pays a stock dividend (except scheduled dividends paid on outstanding preferred stock as of the date hereof which contain a stated dividend rate) or otherwise make distribution(s) on shares of its Common Stock or on any other class of capital stock and not the Common Stock payable in shares of Common Stock; (ii) subdivides outstanding shares of Common Stock into a larger number of shares; or (iii) combines outstanding shares of Common Stock into a smaller number of shares. If either (i), (ii) or (iii) above occurs, the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding before such event and of which the denominator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding after such event. Any adjustment made pursuant to this Section shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision or combination, and shall apply to successive subdivisions and combinations.

 

(b)     In case of any reclassification of the Common Stock, any consolidation or merger of the Company with or into another entity, the sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange pursuant to which the Common Stock is converted into other securities, cash or property, then the Holder shall have the right thereafter to exercise this Warrant only into the shares of stock and other securities and property receivable upon or deemed to be held by holders of Common Stock following such reclassification, consolidation, merger, sale, transfer or share exchange, and the Holder shall be entitled upon such event to receive such amount of securities or property equal to the amount of Warrant Shares such Holder would have been entitled to had such Holder exercised this Warrant immediately prior to such reclassification, consolidation, merger, sale, transfer or share exchange. The terms of any such consolidation, merger, sale, transfer or share exchange shall include such terms so as to continue to give to the Holder the right to receive the securities or property set forth in this Section 8(b) upon any exercise following any such reclassification, consolidation, merger, sale, transfer or share exchange. 

 

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(c)     For the purposes of this Section 8, the following clauses shall also be applicable:

 

(i) Record Date. In case the Company shall take a record of the holders of its Common Stock for the purpose of entitling them (A) to receive a dividend or other distribution payable in Common Stock or in securities convertible or exchangeable into shares of Common Stock, or (B) to subscribe for or purchase Common Stock or securities convertible or exchangeable into shares of Common Stock, then such record date shall be deemed to be the date of the issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution or the date of the granting of such right of subscription or purchase, as the case may be.

 

(ii) Treasury Shares. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account of the Company, and the disposition of any such shares shall be considered an issue or sale of Common Stock.

 

(d)     All calculations under this Section 8 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be.

 

9.     Payment of Exercise Price. 

 

(a)     Cash Exercise. The Holder shall deliver to the Company at its principal offices, with the Election to Purchase form attached hereto, duly executed by the Holder and accompanied by payment in cash, wire transfer or by check, payable to the order of the Company, of the aggregate Exercise Price for the total aggregate number of Warrant Shares for which this Warrant is exercised.

 

(b)     Legend. Unless the Warrant Shares have been registered under the Securities Act, upon exercise of any of the Warrants and the issuance of any of the Warrant Shares, all certificates representing the Warrant Shares shall bear on the face thereof substantially the following legend:

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, OFFERED FOR SALE, ASSIGNED, TRANSFERRED OR OTHERWISE DISPOSED OF, UNLESS REGISTERED PURSUANT TO THE PROVISIONS OF THAT ACT OR UNLESS AN OPINION OF COUNSEL TO THE CORPORATION IS OBTAINED STATING THAT SUCH DISPOSITION IS IN COMPLIANCE WITH AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION.

 

 

10.     Fractional Shares. The Company shall not be required to issue or cause to be issued fractional Warrant Shares on the exercise of this Warrant. The number of full Warrant Shares which shall be issuable upon the exercise of this Warrant shall be computed on the basis of the aggregate number of Warrant Shares purchasable on exercise of this Warrant so presented. If any fraction of a Warrant Share would, except for the provisions of this Section 10, be issuable on the exercise of this Warrant, the Company shall pay an amount in cash equal to the Exercise Price multiplied by such fraction.

 

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11.     Notices. Any and all notices or other communications or deliveries hereunder shall be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Section prior to 5:00 p.m. New York time on a business day, (ii) the business day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Section later than 5:00 p.m. New York time on any date and earlier than 11:59 p.m. Boston time on such date, (iii) the business day following the date of mailing, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. The addresses for such communications shall be: 

 

If to the Company:      

 

Zero Gravity Solution, Inc. 

190 NW Spanish River Boulevard

Boca Raton, Florida 33431

 

If to the Holder:     

 

_______________________________

 

_______________________________

 

_______________________________

 

or if none listed above, to such Holder’s address as set forth in the register maintained by the Company.

 

12.     Warrant Agent. The Company shall serve as warrant agent under this Warrant. Upon thirty (30) days’ notice to the Holder, the Company may appoint a new warrant agent. Any corporation into which the Company or any new warrant agent may be merged or any corporation resulting from any consolidation to which the Company or any new warrant agent shall be a party or any corporation to which the Company or any new warrant agent transfers substantially all of its corporate trust or shareholders services business shall be a successor warrant agent under this Warrant without any further action. Any such successor warrant agent shall promptly cause notice of its succession as warrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder's last address as shown on the Warrant Register.

 

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13.     Miscellaneous.

 

(a)     This Warrant shall be binding on and inure to the benefit of the parties hereto. This Warrant may be amended only in writing signed by the Company and the Holder.

 

(b)     Nothing in this Warrant shall be construed to give to any person or corporation other than the Company and the Holder any legal or equitable right, remedy or cause under this Warrant. This Warrant shall inure to the sole and exclusive benefit of the Company and the Holder.

 

(c)     The headings herein are for convenience only, do not constitute a part of this Warrant and shall not be deemed to limit or affect any of the provisions hereof.

 

(d)     In case any one or more of the provisions of this Warrant shall be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby and the parties will attempt in good faith to agree upon a valid and enforceable provision which shall be a commercially reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Warrant.

 

(e)     The Company hereby represent and warrants to the Holder that: (i) it is voluntarily issuing this Warrant of its own freewill, (ii) it is not issuing this Warrant under economic duress, (iii) the terms of this Warrant are reasonable and fair to the Company, and (iv) the Company has had independent legal counsel of its own choosing review this Warrant, advise the Company with respect to this Warrant, and represent the Company in connection with its issuance of this Warrant. 

 

(f)     Any capitalized term used but not defined in this Warrant shall have the meaning ascribed to it in the Subscription Agreement.

 

(g)     This Warrant may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and, all of which taken together shall constitute one and the same Warrant. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile signature were the original thereof.

 

(h)     This Warrant and the obligations of the Company hereunder shall not be assignable by the Company.

 

(i)     Notwithstanding anything in this Warrant to the contrary, the parties hereto hereby acknowledge and agree to the following: (i) the Holder makes no representations or covenants that it will not engage in trading in the securities of the Company; (ii) the Company shall, by 8:30 a.m. New York Time on the trading day following the date hereof, file a current report on Form 8-K disclosing the material terms of the transactions contemplated hereby and in the other Transaction Documents; (iii) the Company has not and shall not provide material non-public information to the Holder unless prior thereto the Holder Party shall have executed a written agreement regarding the confidentiality and use of such information; and (iv) the Company understands and confirms that the Holder will be relying on the acknowledgements set forth in clauses (i) through (iii) above if the Holder effects any transactions in the securities of the Company. 

 

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14.     Disputes Under This Agreement.

 

This Agreement shall be construed and interpreted in accordance with the laws of the State of Nevada, without reference to such State’s conflicts of laws principles. Any legal suit, action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby shall be instituted exclusively in a court of competent jurisdiction located in the County of Palm Beach, Florida. The parties hereto hereby: (i) waives any objection which they may now have or hereafter have to the venue of any such suit, action or proceeding, and (ii) irrevocably consents to the courts of competent jurisdiction in the County of Palm Beach, Florida in any such suit, action or proceeding. The parties further agree to accept and acknowledge service of any and all process which may be served in any such suit, action or proceeding in a court of competent jurisdiction in the County of Palm Beach, Florida and agree that service of process upon a party mailed by certified mail to such party’s address shall be deemed in every respect effective service of process upon such party in any such suit, action or proceeding. 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

[Signature on Following Page]

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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its authorized officer as of the date first indicated above.

 

 

	
			 

				Zero Gravity Solutions, Inc. 	
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				
			 

				
			 

			
	
			 

				
			 

				Harvey Kaye	
			 

			
	
			 

				
			 

				Its: Chairman	
			 

			

 

9

 

 

EXHIBIT A

 

FORM OF ELECTION TO PURCHASE

 

Zero Gravity Solutions, Inc.

 

Re: Intention to Exercise Right to Purchase Shares of Common Stock Under the Warrant

 

Gentlemen:

 

In accordance with the Warrant enclosed with this Form of Election to Purchase, the undersigned hereby irrevocably elects to purchase _________________shares of Common Stock, $0.001 par value per share, of Zero Gravity Solutions, Inc. encloses herewith $________ in cash, certified or official bank check(s), which sum represents the aggregate Exercise Price for the number of shares of Common Stock to which this Form of Election to Purchase relates, together with any applicable taxes payable by the undersigned pursuant to the Warrant. Any capitalized terms used but not defined in this Form of Election to Purchase shall have the meaning ascribed to them in the accompanying Warrant.

 

The undersigned requests that certificates for the shares of Common Stock issuable upon this exercise be issued in the name of:

 

(Please insert SS# or FEIN #)

 

(Please print name and address)

 

If the number of shares of Common Stock issuable upon this exercise shall not be all of the shares of Common Stock which the undersigned is entitled to purchase in accordance with the enclosed Warrant, the undersigned requests that a New Warrant evidencing the right to purchase the shares of Common Stock not issuable pursuant to the exercise evidenced hereby be issued in the name of and delivered to:

 

(Please print name and address)

 

 

	
			 

				
			 

				
			 

			
	Dated: _____________, _____     	Name of Holder:	 
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				Signed:	
			 

				
			 

			
	
			 

				Print Name:	
			 

				
			 

			
	
			 

				
			Title:

				
			 

				
			 

			

          

(Signature must conform in all respects to name of Holder as specified on the face of the Warrant)

 

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