ll documentation, training manuals, and supplemental computer hardware. ATFC will train USER to facilitate the use of the computer program. Said computer program is designed for "front office" operations in the temporary staffing business, including payroll processing and client billing.

• H. "Wages" means the salaries or wages earned by USER's temporary personnel employees for work performed for Customers.

II. Basic Agreement.

• A. Services. USER agrees to exclusively utilize ATFC for certain processing services, including billing to clients, and payroll for USER's temporary personnel employees based on the information provided by USER which will be entered into the required Software by USER. Provided USER is not in default hereunder and under the Franchise Agreement, ATFC agrees to render the services set indicated below for USER's Business in the manner specified in this Processing Agreement ("Services").
• 1. Paychecks. ATFC will prepare weekly, the payroll run for each temporary personnel employee utilized by a Customer, from USER's account, based on the Wages reported by USER after deducting and withholding thereof an amount equal to all income, social security and other taxes, disability payments and other deductions (except worker's compensation insurance premiums) which may be required by applicable law to be deducted and withheld, as directed by USER. The use of Pay Cards is highly recommended where allowed by law. However, payroll checks may be either printed in USER'S office (on a printer approved by ATFC), or in ATFC's office and sent overnight to USER at USER's expense. In order for ATFC to provide this service, USER must submit timecards, or related reporting, to ATFC weekly no later than noon on Wednesday based on the prior week. These timecards will then be matched up with each invoice by USER, saved electronically in a location designated by ATFC for future reference, and included with the invoice which will be sent to the Customer, if applicable. Failure to timely provide all invoices and timecards will result in a fine of $1,000 for the first violation, $2,500 for the second violation, and $5,000 for the third and each subsequent violation. Postage will be at the expense of USER.
• 1. Direct Payroll Costs. ATFC will prepare, on behalf of USER with respect to the Wages paid pursuant to this Processing Agreement, all Direct Payroll Costs, from USER's account which payments shall be made directly to the entities entitled to the receipt thereof, including any penalties due to late filing or error in calculating tax due, except to the extent attributable to any action or inaction of ATFC.
• 1. Garnishment or Wage Withholding. ATFC will provide a report of any amounts required in relation to a garnishment or wage withholding on any temporary personnel employee utilized by USER (or any administrative personnel if USER has chosen to have ATFC provide payroll services to them); USER shall be responsible for entering any such garnishments into the software program before payroll is processed. Further, USER will be responsible to make the required payments to the proper authority as required in the withholding order.
• 1. Payroll Taxes and Reports. USER will execute IRS Form 2848 to grant ATFC the authority to file state and federal payroll taxes on USER's behalf. ATFC will prepare payroll tax deposits and quarterly tax reports for all federal and state jurisdictions on behalf of USER. ATFC will also file the payroll tax deposits and quarterly tax reports on behalf of USER with the appropriate taxing authority.

Source: Item 23 — RECEIPT (FDD pages 34–161)