Insperity Payroll Services Online Service Agreement (Effective as of 05/16/2014)

Insperity Payroll Services Online Service Agreement (Effective as of 05/16/2014) This Online Service Agreement (the Agreement ), is between the Employer identified on the Delivery Order ( Employer ) and Insperity Payroll Services, L.L.C., ( Insperity Payroll Services ). Whereas the Employer desires Insperity Payroll Services to provide certain payroll services, payroll tax services and filings and other payroll related activities ( Services ) as an agent to the Employer subject to the terms and conditions of this Agreement. Employer s use of the Services and any Licensed Materials is subject to this Agreement and any applicable Delivery Order signed by the parties. The Services and all Licensed Materials are controlled, operated and administered by Insperity Payroll Services from its offices in the U.S., and by using or accessing the Services or any of the Licensed Materials Employer agrees to be bound by the laws of the United States and the terms of this Agreement. Insperity Payroll Services reserves the right to update and change, from time to time, this Agreement and all documents incorporated by reference. Customer may find the most recent version of this Agreement on the Insperity Payroll Services web site. In the event of any inconsistency between this Agreement and the Delivery Order, the Delivery Order shall control. This Agreement, together with any applicable Delivery Order, sets forth the entire agreement and understanding of the parties with respect to the subject matter hereof and supersedes all prior or contemporaneous discussions, agreements and understandings of every kind and nature between the parties. Neither party will be bound by any representation, warranty, covenant, term or condition other than as expressly set forth in this Agreement. Without limiting the foregoing: (a) requests for information, requests for proposal and responses thereto, sales collateral, and background information provided by either party to assist the other in evaluating their relationship are not contractual materials and are not binding; and (b) no purchase order from Employer relating to this Agreement shall be binding in any respect on Insperity Payroll Services. 1. Responsibilities A. Employer shall provide Insperity Payroll Services, at a minimum, each employee's name and address, social security number, amount of payment, date of payment, and identification of account into which the funds are deposited to pay the Employer s employees and all funds and fees required to make such payments. Employer is solely responsible for the accuracy of information provided by Employer. Employer will provide such employee information at least two business days prior to the payroll date. Failure to timely provide all required information may result in delayed remittance of wages, taxes, and garnishments, and an additional service or processing fee. B. Employer agrees to provide and assist Insperity Payroll Services in preparing historic data to successfully convert Employer and employee information to Insperity Payroll Services system. C. Employer shall execute any and all necessary forms and agreements, including IRS Forms 8655 and 2848, ACH Authorization and any other forms required by any federal, state, or local taxing authority in order for Insperity Payroll Services to represent Employer before such authorities or otherwise necessary in order to receive payroll and tax-filing services. D. Employer shall designate a commercial checking account ( Payroll Account ) and shall make available to Insperity Payroll Services sufficient and good funds within the applicable deadlines to satisfy Employer s tax and payroll obligations, including direct deposit of employee checks and/or checks drawn on the account of the Employer for the benefit of Employer s employees. Insperity Payroll Services may terminate this agreement and /or any one or all of the services should Employer not make available sufficient, good funds within the Rev 05-16-14 Page 1 of 8

deadlines established by Insperity Payroll Services. Upon notice of insufficient funds, Employer will become solely responsible for tax payments and further payments to employees and will become responsible for any penalties and interest charged by taxing authorities. E. Employer acknowledges that all services and tax filings and deposits are based upon information supplied by the Employer, including proof of federal, state, and local tax identification numbers, and applicable state unemployment rates. Further, Employer is responsible for the accuracy of all such information and the verification of payroll, payroll tax filings, and other related data. F. Employer is responsible, exclusively, for the consequences of any instructions or input that Employer may give to Insperity Payroll Services, or for Employer s failure to properly utilize the Insperity Payroll Services software. G. Employer is responsible for reviewing all paychecks, direct deposits, reports, and bank drafts prepared by Insperity Payroll Services for validity and accuracy according to the Employer s records. Employer agrees to notify Insperity Payroll Services immediately of any discrepancies. 2. Authorization and Power of Attorney A. Employer authorizes Insperity Payroll Services to: (a) initiate debit or credit entries to Employer s Payroll Account for the applicable charges related to the Services provided by Insperity Payroll Services; (b) send or transmit to the bank, a credit entry to the account of an employee to effect a payment from Employer to the employee; and/or (c) send or transmit a debit entry to the employee s account in order to effect a payment from the employee to Employer or cover any shortfall. This authority is to remain in full force and effect until Insperity Payroll Services has received written notification from Employer of its termination in such time and in such manner as to afford Insperity Payroll Services a reasonable opportunity to act on such notification. B. Employer hereby appoints Insperity Payroll Services as attorney in fact to represent it before and/or submit records to federal, state, and local taxing authorities and any insurance provider with respect to payrolls and taxes. Insperity Payroll Services will be the Reporting Agent, affirmed by the Employer's signature on the Deliver Order, over the tax accounts and taxing authorities. C. Each employee who elects to utilize electronic transfer of funds will provide Employer with a Direct Deposit Authorization Agreement. The Direct Deposit Authorization Agreement will authorize Employer to utilize Insperity Payroll Services to initiate paperless electronic transfers of sums due or payable at employee s bank where such account is maintained and to initiate paperless debits or corrective reversal entries for sums due to Employer or Insperity Payroll Services for erroneous or NSF transactions. The Employer shall retain the original or a copy of each authorization received from each employee for electronic direct deposit for two (2) years after termination or revocation of such authorization. 3. Confidentiality and Record Retention A. Employer s employee information is the confidential information of Employer. Insperity Payroll Services may disclose Employer information to its employees, affiliates, subsidiaries, agents, and contractors to: (i) perform or offer Services; (ii) offer additional products or services; (iii) perform analysis to determine Employer s qualification to receive future services; and (iv) collect amounts due. Insperity Payroll Services may also disclose Employer information (i) to its attorneys, accountants, and auditors; and (ii) pursuant to federal, state, or local law, regulation, court order, legal process, or governmental investigation. The obligations set forth in this section will not apply to any Employer information that: (i) Employer has agreed is free of any nondisclosure obligations; (ii) at the time of disclosure was free of any nondisclosure obligations; (iii) is independently developed by Insperity Payroll Services or that Insperity Payroll Services lawfully Rev 05-16-14 Page 2 of 8

received, free of any nondisclosure obligations, from a third party having the right to furnish such Employer information; or (iv) is or becomes available to the public without any breach of this Agreement or unauthorized disclosure. B. Insperity Payroll Services will retain Employer information as necessary to perform Services for Employer. This Agreement and the performance by Insperity Payroll Services of its Services hereunder, shall not relieve the Employer of any obligation imposed by law or contract regarding the maintenance of records or other matters nor from employing adequate credit accounting and review practices customarily followed by similar businesses. 4. Software License A. Licensed Materials means the Insperity Payroll Services software, as may be modified from time to time, and the associated Insperity Payroll Services then-designated user documentation. B. Subject to the other terms and conditions of this Agreement, Insperity Payroll Services grants Employer a limited, non-sublicensable, non-exclusive, non-transferable right and license, solely during the term of this Agreement, to access and use the Licensed Materials, and to permit and have authorized users access and use the Licensed Materials, but only in accordance with the Documentation and this Agreement; provided that, Employer s and its authorized user s access and use of the Licensed Materials shall be initiated in each instance only through the login page of the web site designated by Insperity Payroll Services. The Licensed Materials to which Employer is provided access (or which are furnished to Employer) under this Agreement are licensed, not sold, to Employer. No use of the Licensed Materials, other than expressly and unambiguously permitted by this Agreement, is permitted. C. For the avoidance of doubt upon any termination of this Agreement, all such licenses shall terminate and Employer and its authorized users shall have no further right to access or use any of the Licensed Materials. Additional effects of termination of this Agreement, and additional restrictions and limitations regarding the Licensed Materials, are set forth elsewhere in this Agreement. D. Employer shall not (and shall not allow any other person to): (i) reverse engineer, translate, decompile or disassemble any portion of the Licensed Materials (or any products or processes accessible through the web site), or otherwise discover or duplicate any content, data, technology, routines, computer software, algorithms, methods or underlying ideas or design or user interface techniques included in any of the Licensed Materials, or attempt to do any of the foregoing, except and only to the extent that this limitation is expressly prohibited by applicable law notwithstanding this limitation; (ii) rent, lease, license, sublicense, export, sell, resell, lend, commercialize, transfer, assign, distribute, grant a lien, encumbrance or option, or make available, to any third party, any of the Licensed Materials (or any of the intellectual property and proprietary rights therein) in any way, whether or not for payment or other consideration, or attempt to do any of the foregoing, except that Employer may permit authorized users to access and use the Licensed Materials as expressly authorized hereunder; (iii) without limiting in any way clause (ii) immediately preceding, use any of the Licensed Materials to provide, or to assist in or further the provision of, any remote processing, service bureau services or other commercial services to any third party; (iv) alter or modify in any way any of the Licensed Materials (including, without limitation, any source, object or other code thereof) or make any derivative work based in any way upon any of the Licensed Materials; (v) create Internet "links" to any of the Licensed Materials or the web site or "frame" or "mirror" any of the Licensed Materials on any server or wireless or Internet-based device; (vi) use any device, software or routine to interfere or attempt to interfere with the proper working of any of the Licensed Materials; (vii) take any action that imposes an unreasonable or disproportionately large load on the Licensed Materials infrastructure; (viii) use any data mining, robot, spider, crawler, cancelbot, Trojan horse, or any data gathering or extraction method or manual process in connection with use of any of the Licensed Materials; (ix) remove, alter, add to, or obscure any copyright, trade secret, or trademark notice or any user notice, warning, disclaimer, consent or advisory pertaining to or included in any of the Licensed Materials; (x) delete or revise any material posted by any other person or entity without their prior written consent or proper authority; (xi) post, transmit or store any content or information that is unlawful, fraudulent, threatening, abusive, libelous, defamatory, obscene or otherwise objectionable or harmful, or that infringes on Rev 05-16-14 Page 3 of 8

Insperity Payroll Services or any third party's intellectual property or other rights; (xii) post, transmit or store any personal or confidential information about individuals or entities without the authorization to do so; or (xiii) print out or otherwise copy or use any personally identifiable information about users for purposes other than as intended by this Agreement. 5. Insperity HR Support Center A. Employer may be given access to the Insperity HR Support Center as determined by Insperity Payroll Services. The HR Support Center is an outsourced human resource (HR) service delivered to Insperity Payroll Services and its affiliates for the benefit of Insperity Payroll Services and its affiliates clients. The service is accessible to authorized users of Employer through a combination of web site, email and phone communications. The HR Support Center may also include HR On-Demand services. These services are provided through a third party service provider, HRAnswerLink, Inc. In order to utilize the Insperity HR Support Center and On-Demand services as applicable, Employer and each user will be required to accept HRAnswerLink web siteterms of Use. Use of the Insperity HR Support Center will also indicate Employer s agreement with the Terms of Use, as amended from time to time. B. The Insperity HR Support Center provides general employment and human resources-related information. Nothing that appears on this site or in connection with the site should be relied upon or construed as legal advice from Insperity Payroll Services or HRAnswerLink, Inc. Use of the HR Support Center does not create an attorney-client relationship between Insperity Payroll Services or HRAnswerLink, Inc. as providers of the service and Employer or its authorized users that utilize the service. Employer should contact an attorney for legal advice concerning its specific employment and HR issues. C. The Insperity HR Support Center and its contents are for internal use of the Employer s business only. Additionally, Employer and its authorized users will not share usernames and passwords to access the service. D. Employer shall be responsible for the acts and omissions of each of its authorized users and each such act or omission shall be attributable to Employer as if done (or omitted to be done, in the case of an omission) directly by Employer. Further, Employer shall ensure that each of its authorized users shall at all times comply with the Terms of Use for the Insperity HR Support Center as well as the terms and conditions of this Agreement to the fullest extent that this Agreement applies to the authorized users. Subject to the foregoing sentence, any non-compliance with any provision of the Terms of Use for the Insperity HR Support Center or the terms and conditions of this Agreement by an authorized user shall constitute a breach of this Agreement. E. Employer releases Insperity Payroll Services and its affiliates from any claims or liabilities associated with Employer s or its authorized users use of the Insperity HR Support Center including any HR On-Demand services. 6. Warranty A. Based upon the information provided by Employer, Insperity Payroll Services will be responsible for initiating applicable payroll tax deposits, filings, and reconciliations. Insperity Payroll Services sole liability to Employer or any third party for claims is to furnish a correct report or data and to correct Employer s records or tax agency filings. Employer shall be responsible for any tax due and Insperity Payroll Services shall be responsible for any penalty levied due solely to Insperity Payroll Services error or omission. Employer understands that Insperity Payroll Services will not be responsible for penalties or interest due to missing, inaccurate, or incomplete information. Employer further understands that Insperity Payroll Services is not responsible for initiating tax deposits with respect to wages paid prior to its Service. B. Except as otherwise specifically stated in this Agreement, Insperity Payroll Services sole liability to Employer or any third party for claims arising out of errors or omissions in the Services provided or to be Rev 05-16-14 Page 4 of 8

provided by Insperity Payroll Services shall be to furnish a correct report, a correct paycheck, or the correct data as the case may be and to correct the Employer files, provided the Employer promptly advises the Insperity Payroll Services thereof. C. Employer agrees to remain solely responsible for any obligation imposed on Employer by law to maintain records regarding Employer s business or employees. D. Employer agrees to provide complete, accurate and timely information as necessary to the performance by Insperity Payroll Services of Services under this Agreement and to verify or correct such information as appropriate, on a timely basis. E. EXCEPT AS SPECIFICALLY PROVIDED HEREIN, THERE ARE NO WARRANTIES EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. 7. Limitation of Liability A. Other than as specifically set forth in this Agreement, Insperity Payroll Services will not be liable for any damage or loss (including, but not limited to, liabilities, costs, and expenses) to the Employer or its employees arising out of the acts or omissions of the Employer or its employees or any third parties, including, but not limited to, any courier service, the ACH, NACHA, or any other ACH organization, any Federal Reserve Bank, any receiving financial institution in which an employee maintains an account, any receiving depository institution, or any processor. Insperity Payroll Services shall not be liable for failure to provide the Services herein if due to causes or conditions beyond its control. In no event shall Insperity Payroll Services be liable for indirect, incidental, special, punitive, or consequential damages, loss of data, loss of profits or other economic loss even if Insperity Payroll Services has been advised of the possibility of such damages. In no event shall Insperity Payroll Services total liability pursuant to any claim arising out of or relating to this Agreement or the transactions covered hereby (whether in contract or in tort) exceed the dollar amount of the Service fees paid to Insperity Payroll Services by Employer in the previous twelve (12) months. B. Employer agrees that Insperity Payroll Services is not rendering legal, tax, accounting, or investment advice in connection with the Services to be performed, nor shall Insperity Payroll Services be deemed a fiduciary of Employer. Insperity Payroll Services shall in no way be considered the employer or co-employer of Employer s employees. Employer remains solely responsible for any and all employment related responsibilities including but not limited to the Fair Labor Standards Act, any applicable state, federal or local wage and hour laws, calculation and payment of any overtime pay, determination of hours worked by employees, determination of exemption from overtime requirements, determination of employee or contractor status and any other law related to employment and the payment of wages. Employer further agrees that Insperity Payroll Services is only responsible for the processing of wage garnishments to the extent that Employer has correctly and timely advised Insperity Payroll Services of such garnishments obligations. C. Employer acknowledges that the Services and Licensed Materials are a work in progress and maybe modified substantially during the term of this Agreement, provided that no such modifications will impair or materially reduce the use or functionality of the Services or Licensed Materials. 8. Indemnity A. Employer shall indemnify and hold Insperity Payroll Services harmless from all claims, liabilities, losses, costs and expenses (including attorney's fees) incurred by Insperity Payroll Services and caused by or arising out of (i) any breach by Employer of any provision of the Agreement or contained in any other agreement related hereto; (ii) any failure by Employer to comply with any provision of applicable federal or state laws, Rev 05-16-14 Page 5 of 8

regulations, rules or operating letters, including, but not limited to, The Electronic Fund Transfer Act, Regulation E promulgated thereunder, and all amendments thereto; (iii) alleged wage and hour violations, discrimination, or other employment policies, which may violate the law; (iv) any action taken by Insperity Payroll Services in reliance upon or pursuant to any instructions or specific request of Employer including, but not limited to, the reversal of any electronic direct deposit to an account of an employee maintained at a bank or other financial institution, or the disbursement of any sums which Insperity Payroll Services is authorized to withhold; or (v) any claims or liabilities associated with Employer s or its authorized users use of the Insperity HR Support Center including any HR On-Demand services. Notwithstanding subparagraph (iv) herein, Insperity Payroll Services shall have the right to refuse the reversal of any electronic direct deposit to the account of an employee. B. Insperity Payroll Services accepts both responsibility and liability for the timely payment and reporting of Employer payroll taxes but only based on information provided by Employer and only to the extent of funds made available by Employer. If solely on account of negligent error or omission on the part of Insperity Payroll Services with respect to timely payment from the fully funded Payroll Account, Employer incurs a penalty or interest charge, then Insperity Payroll Services will pay whatever penalties and interest that result from the error. 9. Service Fees and Payments A. Employer agrees to pay Insperity Payroll Services for Services rendered pursuant to the applicable Delivery Order and this Agreement. All invoices are due at time Service is rendered and are electronically transferred from Employer s Payroll Account at the same time as other funds are withdrawn. Insperity Payroll Services and Employer must mutually agree upon any other payment arrangements. If Insperity Payroll Services is unable to confirm receipt of funds when due, remittance of wages, garnishments, or taxes may be delayed. B. Employer shall pay all (or shall reimburse Insperity Payroll Services if Insperity Payroll Services pays any) taxes, customs, duties and assessments (exclusive of taxes based on the net income of Insperity Payroll Services), however designated, including, but not limited to, excise, sales and use taxes now or hereafter imposed under the authority of any federal, state, local or other taxing jurisdiction with respect to this Agreement or any of the Services or Licensed Materials provided hereunder and payment by Employer of these is in addition to the Service Fees shown in the Delivery Order. C. Employer shall be responsible for a monthly maintenance fee equal to the average monthly Service Fees should Employer not process payroll during that month. D. Employer agrees to reimburse Insperity Payroll Services for any and all expenses, including reasonable attorney fees in taking action to collect any amounts due to Insperity Payroll Services from Employer. E. Insperity Payroll Services may change fees or Services at any time by providing thirty (30) days advance notice to Employer. Employer s continued use of the Services thirty (30) days after such notice shall be deemed Employer s consent to such change. 10. Workers Compensation Pay-As-You-Go A. Employer may choose to participate in a workers compensation pay-as-you-go program or a similar premium payroll processing program ( Program ) offered through Insperity Payroll Services whereby Employer elects to pay periodic premiums for its workers compensation insurance based on its payroll processing schedule. Insperity Payroll Services shall furnish payroll information to the Employer s workers compensation insurance carrier and/or its broker upon receipt of either: (a) a copy of Employer s Program Rev 05-16-14 Page 6 of 8

agreement containing an authorization for Insperity Payroll Services to furnish payroll information to the workers compensation insurance carrier and/or its broker; or, (b) Employer s written authorization which authorizes Insperity Payroll Services to furnish payroll information to the workers compensation insurance carrier and/or its broker. B. Employer may terminate such written authorization by providing Insperity Payroll Services with a minimum of 10 days prior written notice of such termination. C. Employer indemnifies, defends and holds Insperity Payroll Services, its affiliates, its and their directors, officers and employees harmless against any and all claims, losses, damages or expenses incurred, including, but not limited to, reasonable attorneys fees, arising from or relating to the authorized furnishing of such payroll information in connection with Employer s participation in the Program. 11. Term and Termination A. Except as otherwise provided, either party may terminate the Agreement upon thirty (30) days prior written notice. B. Insperity Payroll Services may immediately terminate the Agreement if: (i) Employer becomes subject to receivership, bankruptcy, or is insolvent; (ii) Insperity Payroll Services, in its sole discretion, determines that a material adverse change has occurred in the financial condition of Employer; (iii) Employer fails to have sufficient funds in the Payroll Account; or (iv) Insperity Payroll Services determines, in its sole discretion, that any federal, state, or local legislation, regulatory action, or judicial decision adversely affects its interests under the Agreement, provided, however, the Employer's duty to maintain sufficient funds in its Payroll Account shall continue until Employer s employees and Insperity Payroll Services are paid in full for all payrolls run by Insperity Payroll Services. Insperity Payroll Services responsibility to perform Services under this Agreement will automatically terminate should Employer funds be insufficient or otherwise to cover the net payroll, related taxes, and Service fees. 11. Compliance with Law, Governing Law and Regulations A. Employer shall be solely responsible for compliance with all laws and governmental regulations affecting its business and for any use of Insperity Payroll Services Services to assist in complying with such laws and governmental regulations. Employer acknowledges that certain of the Services provided by Insperity Payroll Services may be subject to the NACHA Operating Rules & Guidelines; any applicable Office of Foreign Assets Control ( OFAC ) screening requirement, and/or Anti-Money Laundering and Anti-Terrorist Financing ( ML/ATF ) laws; and agrees to comply with and reasonably cooperate with Insperity Payroll Services in its compliance with the applicable NACHA rules, OFAC screening requirement, and ML/ATF laws with respect to the applicable Services. B. This Agreement shall be governed by and construed in accordance with internal laws of the state of Texas, without reference to choice of laws, rules or principles. Venue for any action related to this Agreement shall be exclusively in Harris County, Texas. C. Employer shall not assign this Agreement without the prior written consent of the Insperity Payroll Services. 12. Third Parties Unless otherwise set forth herein, under no circumstances shall Employer s employees be construed as third party beneficiaries hereof. Rev 05-16-14 Page 7 of 8

13. Notices All notices required under this Agreement shall be sent in writing, via certified overnight delivery, to Insperity Payroll Services, attention General Counsel, 19001 Crescent Springs Drive, Kingwood, Texas 77339. Notices to Employer may be communicated through the Insperity Payroll Services Software, emails or sent to the Employer s address then on record with Insperity Payroll Services. Rev 05-16-14 Page 8 of 8