How does Hire Quest deliver its services to Management Recruiters franchisees?

greement, Franchisee is ultimately responsible for obligations related to payroll, taxes and invoicing or such other economic considerations which generate during day-to-day business practices; and

WHEREAS, Franchisee may utilize Hire Quest's proprietary Direct Deposit system/software and Hire Quest may facilitate use of Payroll Solutions Cards; and

WHEREAS, Hire Quest funds the Direct Deposit system and Payroll Solutions Cards;

THEREFORE, the following Agreement is entered into by Franchisee and Hire Quest in exchange for good and valuable consideration, including mutual reciprocal promises, receipt of which is expressly acknowledged by the parties, and for other mutual promises as set forth in the Franchise Agreement.

AGREEMENT TERMS

1. Payroll Funding Agreement:

a. During the term of the Franchise Agreement, Hire Quest will provide Franchisee and certain members of Franchisee's internal staff access to proprietary software which Franchisee shall utilize to convey confidential information and figures to Hire Quest ("Proprietary Software"). Such information shall be utilized by Hire Quest for processing payroll, taxes, liens, garnishments, invoices and other economic obligations for the benefit of Franchisee. The information entered into the Proprietary Software by Franchisee shall be reviewed by Franchisee prior to submission. Franchisee warrants that such information will be accurate and complete. Hire Quest, shall not be held responsible for funding economic obligations (including taxes, payroll, liens, garnishments or other monies) which are entered into the Proprietary Software incorrectly by

Franchisee or its agent(s). Hire Quest may, at its election, choose not to fund any tax, payroll, lien, garnishment or economic obligation which it perceives, in its sole discretion, to be entered incorrectly by Franchisee; or which, in fact, is inaccurate, incomplete or wrong.

• b. Should Hire Quest overpay, overfund or disperse monies on Franchisee's behalf because of inaccurate information received from Franchisee or Franchisee's employees, Franchisee expressly agrees to refund, reimburse and make whole, Hire Quest for the monies which were dispersed.
• c. Franchisee expressly acknowledges that Hire Quest is not responsible for payment of workers, government institutions or third parties beyond the actual hours worked by an employee or for taxes, garnishments, liens or other figures derived therefrom. Franchisee expressly agrees that accurate data entry is essential to the orderly operation of business and any failure on the part of Franchisee or Franchisee's employees, agents, representatives or workers is Franchisee's responsibility. If Hire Quest is required to reimburse a third-party due to inaccurate, incomplete or wrong information entered by Franchisee, Franchisee shall indemnify, defend, reimburse and hold harmless Hire Quest for the full amount of any such reimbursement.
• 1. Direct Deposit Obligations: During the term of the Franchise Agreement, Hire Quest may provide direct deposit services for payment of Franchisee's workers/employees ("Direct Deposit Services"). Franchisee may elect to utilize Hire Quest's Direct Deposit Services. Given the likely total volume of direct deposits required by Franchisee, and the banking expenses, labor and administrative costs associated therewith, Hire Quest shall charge a minimum monthly fee of $25.00; assessable at the beginning of each month ("Direct Deposit Service Fee."). Franchisee agrees to pay and/or allow the Direct Deposit Service Fee to be deducted from any payments or disbursements by Hire Quest to Franchisee should Franchisee utilize Direct Deposit Services.

3. Pay Card Obligations:

a. During the term of the Franchise Agreement, Hire Quest may facilitate electronic payroll card services ("Pay Card Services"). These Pay Card Services will be facilitated by Hire Quest in

association with third party independent contractors. Franchisee may elect to utilize Pay Card Services. Franchisee is ultimately liable for any payment of workers/employees on Pay Cards and for obligations arising in relation thereto. However, to indemnify Hire Quest from potential or temporary losses, and in exchange for providing Pay Card Services, Franchisee shall issue a good faith, indemnity deposit to Hire Quest ("Indemnity Deposit"). The Indemnity Deposit shall amount to the average of one day's payroll for the branch, during the first quarter of the calendar year in which Pay Card Services are being provided. If a branch has no payroll for the first quarter of the calendar year (e.g. a new Franchisee), then the Indemnity Deposit shall be based on the next full quarter of the calendar year in which payroll occurred but, in no event, shall the deposit amount be less than $500. The Indemnity Deposit shall be issued to Hire Quest before Pay Card Services are provided. If Pay Card Services are provided prior to receipt of the deposit, Hire Quest may discontinue the services until the Indemnity Deposit is issued.

• b.

Source: Item 23 — RECEIPTS (FDD pages 67–327)