AGREEMENT OF SALE
BETWEEN
XXXXX X XXXXXXX D.B.A. PRO DATA
A SOLE PROPRIETORSHIP SITUATED AT
000 XXXXXXXXXXX XXXXX 0,
XXXXXXX XXXXX, XX 00000
WHO IS THE SELLER AND HEREAFTER IS NAMED PRO DATA.
AND
DATON PAY USA INC.
A CALIFORNIA CORPORATION SITUATED AT
0000 XXXXXXXXXXX XXXXX,
XXXXX XXX, XX 00000
WHO IS THE BUYER AND HEREAFTER IS NAMED PAY USA.
CONTENTS:
A GENERAL TERMS AND DEFINITIONS
B PAYMENT TERMS
C CONVERSION
D CLIENT OWNERSHIP
E MISCELLANEOUS
F WARRANTIES OF THE SELLER & BUYER
G RESTRAINT OF TRADE
H DISPUTE RESOLUTION
A: GENERAL TERMS AND DEFINITIONS:
1. PRO DATA IS A PAYROLL PROCESSING SERVICE SOLELY OWNED BY XXXXX X XXXXXXX.
2. PAY USA IS A PAYROLL PROCESSING SERVICE OWNED BY COMPUTER OUTSOURCING
SERVICES, INC.
3. PRO DATA WISHES TO SELL AND PAY USA WISHES TO PURCHASE THE PAYROLL
PROCESSING CLIENT BASE OF PRO DATA.
4. THE PAYROLL PROCESSING CLIENT BASE THAT IS FOR SALE IS LISTED IN DETAIL IN
ATTACHMENT 1. ATTACHMENT 1 REPPRESENTS THE COMPLETE PAYROLL PROCESSING CLIENT
BASE OF PRO DATA.
5. EACH CLIENT LISTED ON THE CLIENT BASE IS TO BE CONSIDERED AN INDIVIDUAL
COMPONENT FOR THE PURPOSE OF COMPUTING THE PURCHASE PRICE, ESTABLISHING THE
CONVERSION DATE, THE PRICE CALCULATION PERIOD AND THE PAYOFF DATE.
6. THE EFFECTIVE DATE OF THIS AGREEMENT IS AUGUST 19, 1996.
7. GROSS REVENUE SHALL MEAN THE TOTAL AMOUNT BILLED FOR PAYROLL PROCESSING
SERVICES EXCLUDING THE FOLLOWING FEES; SET-UP FEES, FEES FOR SALE OF SUPPLIES,
QUARTERLY RETURN PREPARATION FEES, CUSTOM PROGRAMMING FEES, SALES TAX AND ANY
COLLECTION FEES. DELIVERY FEES ARE SPECIFICALLY INCLUDED IN GROSS REVENUE.
8. CONVERSION DATE SHALL MEAN THE DATE AN INDIVIDUAL CLIENT BEGINS PAYROLL
PROCESSING SERVICES WITH PAY USA.
9. PRICE CALCULATION PERIOD SHALL MEAN THE PERIOD AN INDIVIDUAL CLIENT PROCESSES
ITS PAYROLL WITH PAY USA. FOR EACH CONVERTED CLIENT THE PRICE CALCULATION PERIOD
STARTS ON THE CONVERSION DATE. THE PRICE CALCULATION PERIOD ENDS SIX MONTHS
FOLLOWING THE CONVERSION DATE.
10. THE FINAL PURCHASE PRICE IS SET AT 200% OF THE ACTUAL GROSS REVENUE OF PAY
USA DURING THE PRICE CALCULATION PERIOD FOR EACH CLIENT LISTED IN ATTACHMENT 1.
11. THE FINAL CONVERSION DATE IS THE CONVERSION DATE OF THE LAST CLIENT LISTED
IN ATTACHMENT 1 THAT BEGINS PROCESSING ITS PAYROLL WITH PAY USA. BOTH PRO DATA
AND PAY USA WILL PUT FORTH THEIR BEST EFFORT TO ENSURE THE FINAL CONVERSION DATE
OCCURS NO LATER THAN OCTOBER 31, 1996.
12. DURING THE PRICE CALCULATION PERIOD OF EACH CLIENT, PAY USA GUARANTEES TO
XXXX THE CLIENTS LISTED IN ATTACHMENT 1 THAT CONVERT, AT A RATE EQUAL TO OR
GREATER THAN THE AMOUNT PRO DATA WOULD HAVE CHARGED FOR THE EQUIVALENT
PROCESSING SERVICES. PAY USA WILL CHARGE ITS CUSTOMARY CHARGES FOR ANY
ADDITIONAL SERVICES PROVIDED BY PAY USA THAT PRO DATA DID NOT PROVIDE ITS
CLIENTS. THE MAJOR EXAMPLES OF SUCH ADDITIONAL SERVICES ARE FULL TAX FILING AND
DIRECT DEPOSIT.
B: PAYMENT TERMS:
13. THE PAYMENT TERMS IN BRIEF ARE AS FOLLOWS;
a) A DOWN PAYMENT ON THE DATE OF SIGNING THE AGREEMENT - 8/19/96
b) A SECOND PAYMENT PAYABLE 3 MONTHS AFTER THE FINAL CONVERSION DATE.
c) A FINAL PAYMENT PAYABLE 6 MONTHS AFTER THE FINAL CONVERSION DATE.
14. THE DOWN PAYMENT
THE DOWN PAYMENT IS CALCULATED AT 50% (FIFTY PERCENT) OF PRO DATA'S ACTUAL
BILLING FOR THE QUARTER ENDED JUNE 30, 1996 ANNUALIZED FOR THE CLIENTS LISTED IN
ATTACHMENT 1.
15. THE DOWN PAYMENT IS DUE AND PAYABLE BY PAY USA TO PRO DATA ON THE DATE OF
SIGNING THIS AGREEMENT; AUGUST 19, 1996.
16. PRO DATA'S ACTUAL BILLING FOR THE QUARTER ENDED 6/30/96 IS LISTED IN DETAIL
IN ATTACHMENT 1 AND TOTALS $36411.58. ANNUALIZED THIS AMOUNTS TO $139310.72.
50% OF $139310.72 AMOUNTS TO $69655.36. $69655.36 IS ROUNDED UP TO $70000.00
WHICH IS AGREED TO BE THE AMOUNT OF THE DOWN PAYMENT.
17. THE AMOUNT PRO DATA RECEIVES FOR THE DOWN PAYMENT ($70000.00) MAY BE
INVESTED BY PRO DATA IN ANY LOW RISK LIQUID INVESTMENT OF PRO DATA'S CHOICE.
SUCH INVESTMENT SHALL BE A CERTIFICATE OF DEPOSIT IN OUR JOINT NAMES. ALL
INCOME EARNED OR ACCRUED ON THE INVESTMENT(S) SHALL BE FOR PRO DATA'S SOLE
BENEFIT.
18. UPON THE OCCURRENCE OF THE CONVERSION DATE OF THE 40TH CLIENT LISTED IN
ATTACHMENT 1, THE DEPOSIT IN 17 ABOVE WILL BECOME SOLELY PRO DATA'S PROPERTY.
19. THE SECOND PAYMENT
THE SECOND PAYMENT IS BASED ON 90% OF PAY USA'S ACTUAL GROSS REVENUE FOR THE
CLIENTS LISTED IN ATTACHMENT 1. THE AMOUNT IS CALCULATED FOR EACH CLIENT LISTED
IN ATTACHMENT 1 INDIVIDUALLY USING EACH INDIVIDUAL CONVERTED CLIENT'S FIRST 3
MONTH PRICE CALCULATION PERIOD. THE TOTAL GROSS REVENUE FOR EACH CONVERTED
CLIENT IS ANNUALIZED (MULTIPLIED BY 4) AND THE GRAND TOTAL IS MULTIPLIED BY 90
(NINETY) PERCENT.
20. THE AMOUNT CALCULATED IN 19 ABOVE IS REDUCED BY THE $70000.00 DOWN PAYMENT.
THE NET AMOUNT IS DUE AND PAYABLE TO PRO DATA WITHIN 5 BUSINESS DAYS FOLLOWING
THE 3 MONTH PERIOD AFTER THE FINAL CONVERSION DATE.
21. PAY USA WILL PROVIDE PRO DATA A DETAILED SCHEDULE TO SUPPORT THE CALCULATION
OF THE SECOND PAYMENT. THIS SCHEDULE WILL AS A MINIMUM CONTAIN THE FOLLOWING
DETAIL.
CLIENT NAME AND FREQUENCY.
CLIENT CONVERSION DATE.
INDIVIDUAL CLIENT BILLING DETAIL FOR THE 3 MONTH PERIOD.
THE BILLING DETAIL WILL SHOW EACH PROCESSING DATE AND CHARGE.
DETAILS OF EXCLUDED CHARGES BY INDIVIDUAL CLIENT BY DATE.
ANNUALIZED CALCULATION.
22. THE FINAL PAYMENT
THE FINAL PAYMENT IS BASED ON 100% OF PAY USA'S ACTUAL GROSS REVENUE. THE FINAL
PURCHASE PRICE IS CALCULATED FOR EACH CLIENT LISTED IN ATTACHMENT 1 INDIVIDUALLY
USING EACH INDIVIDUAL CONVERTED CLIENT'S FIRST 6 MONTH PRICE CALCULATION PERIOD.
THE TOTAL GROSS REVENUE FOR EACH CONVERTED CLIENT IS ANNUALIZED (MULTIPLIED BY
2).
23. THE AMOUNT CALCULATED IN 22 ABOVE IS REDUCED BY THE $70000.00 DOWN PAYMENT
AND THE AMOUNT OF THE SECOND PAYMENT. THE NET FINAL PAYMENT AMOUNT IS DUE AND
PAYABLE TO (OR FROM) PRO DATA WITHIN 5 BUSINESS DAYS FOLLOWING THE 6 MONTH
PERIOD AFTER THE FINAL CONVERSION DATE.
24. PAY USA WILL PROVIDE PRO DATA A DETAILED SCHEDULE TO SUPPORT THE CALCULATION
OF THE FINAL PAYMENT. THIS SCHEDULE WILL AS A MINIMUM CONTAIN THE FOLLOWING
DETAIL.
CLIENT NAME AND FREQUENCY.
CLIENT CONVERSION DATE.
INDIVIDUAL CLIENT BILLING DETAIL FOR THE 6 MONTH PERIOD.
THE BILLING DETAIL WILL SHOW EACH PROCESSING DATE AND CHARGE.
DETAILS OF EXCLUDED CHARGES BY EACH CLIENT BY DATE.
ANNUALIZED CALCULATION.
25. NO PAYMENT WILL BE MADE FOR ANY CLIENT LISTED IN ATTACHMENT 1 THAT CONVERTS
TO PAY USA AND PRIOR TO THE EXPIRATION OF THAT INDIVIDUAL CLIENT'S SIX MONTH
PRICE CALCULATION PERIOD PERMANENTLY CANCELS PAY USA'S SERVICES.
26. CLIENTS WHO CONVERT TO PAY USA AND TEMPORARILY SUSPEND PROCESSING SERVICES
OF PAY USA PRIOR TO THE EXPIRATION OF THAT CLIENT'S SIX MONTH PRICE CALCULATION
PERIOD (BUT DO NOT CANCEL SUCH SERVICES) WILL BE PAID FOR BASED ON THE ACTUAL
(REDUCED) AMOUNT OF BILLING DURING THAT CLIENT'S SIX MONTH CALCULATION PERIOD,
ANNUALIZED.
27. THE SCHEDULES REFERRED TO IN 21 AND 24 MAY BE AUDITED BY PRO DATA AND THE
COST OF ANY SUCH AUDIT SHALL BE FOR PRO DATA'S ACCOUNT. PAY USA SHALL PROVIDE
SUPPORTING DOCUMENTATION REQUESTED BY PRO DATA. IF NO SUCH REQUEST IS RECEIVED
FROM PRO DATA BY PAY USA WITHIN 10 BUSINESS DAYS FOLLOWING PRO DATA'S RECEIPT OF
PAYMENT FROM PAY USA, IT WILL BE ASSUMED PRO DATA HAS WAIVED ITS RIGHT TO AUDIT
THE PAYMENT SCHEDULES AND THE PAYMENT MADE WILL BE DEEMED FINAL AND ACCEPTED BY
PRO DATA.
28. IF ANY OF THE PAYMENTS ABOVE ARE PAID LATE, A PENALTY OF 10% OF THE LATE
PAYMENT WILL BECOME DUE AND PAYABLE TO PRO DATA.
29a) IF, DUE TO THE FAULT OF PAY USA, THE FINAL CONVERSION DATE WOULD OCCUR
LATER THAN OCTOBER 31, 1996, THEN OCTOBER 31, 1996 WILL BE DEEMED THE FINAL
CONVERSION DATE. ANY CLIENTS CONVERTED AFTER OCTOBER 31, 1996 WILL HAVE THEIR
PRICE CALCULATION PERIOD PRORATED (REDUCED) ACCORDINGLY. FOR THE PURPOSE OF
COMPUTING THE SECOND PAYMENT AND FINAL PAYMENT SUCH CLIENTS WILL BE ANNUALIZED
BASED ON THEIR PRORATED PRICE CALCULATION PERIOD. THIS PRORATED PRICE
CALCULATION WILL PRODUCE AN ANNUALIZED AMOUNT NO LESS THAN WOULD HAVE BEEN
DERIVED HAD A FULL PRICE CALCULATION PERIOD BEEN USED.
29b) IN ORDER TO FURTHER CLARIFY 29a THE FOLLOWING EXAMPLE IS GIVEN: IF A
CLIENT CONVERTED ON NOVEMBER 30, 1996, THE PRICE CALCULATION PERIOD WOULD BE
PRO-RATED TO TWO (2) MONTHS FOR THE PURPOSE OF COMPUTING THE SECOND PAYMENT AND
FIVE (5) MONTHS FOR THE PURPOSE OF COMPUTING THE FINAL PAYMENT. FOR THE SECOND
PAYMENT, THE ANNUALIZED CALCULATION WOULD BE CALCULATED AS FOLLOWS. GROSS
REVENUE FOR THE TWO (2) MONTH PERIOD MULTIPLIED BY 6. FOR THE FINAL PAYMENT,
THE ANNUALIZED CALCULATION WOULD BE CALCULATED AS FOLLOWS: GROSS REVENUE FOR
THE FIVE (5) MONTH PERIOD DIVIDED BY FIVE (5) AND MULTIPLIED BY 12.
30. THE PURPOSE OF 29 ABOVE IS TO ENSURE THAT THE SECOND PAYMENT IS DUE AND
PAYABLE NO LATER THAN 5 BUSINESS DAYS AFTER JANUARY 31, 1997 AND THAT THE FINAL
PAYMENT IS DUE AND PAYABLE NO LATER THAN 5 BUSINESS DAYS AFTER APRIL 30, 1997.
C: CONVERSION
31. THE CONVERSION OF THE INDIVIDUAL CLIENTS WILL START NO LATER THAN AUGUST 26,
1996 AND IS PLANNED TO END NO LATER THAN OCTOBER 31, 1996.
32. PRO DATA AND PAY USA WILL WORK TOGETHER TO PROVIDE A SMOOTH AND ACCURATE
CONVERSION FROM PRO DATA'S PROCESSING TO PAY USA'S. THE COSTS INCURRED BY BOTH
PRO DATA AND PAY USA IN CONNECTION WITH THEIR OBLIGATIONS REGARDING THE
CONVERSION SHALL BE INCURRED AT THEIR OWN EXPENSE. BOTH PRO DATA AND PAY USA
WILL PERFORM THEIR NORMAL CONTROLS AND CHECKING PROCEDURES TO VERIFY THE
ACCURACY OF THE CONVERSION.
33. PAY USA AND PRO DATA WILL WORK TOGETHER TO TRANSFER THE INDIVIDUAL EMPLOYEE
DATA ELECTRONICALLY. PRO DATA WILL PROVIDE PAY USA WITH THE EMPLOYEE DATA IN
ASCII FORMAT AND PAY USA WILL CONVERT SUCH DATA INTO A FORMAT REQUIRED BY ITS
SYSTEMS.
34. PRO DATA WILL PROVIDE PAY USA WITH A SCHEDULE OF THE PLANNED CLIENT
CONVERSION DATES. THE SCHEDULE WILL SHOW THE CLIENT NAME; PROCESSING FREQUENCY;
CONTACT NAME; TARGET CONVERSION DATE AND OTHER PERTINENT CLIENT DETAIL TO HELP
INFORM PAY USA OF THE NATURE AND SPECIFIC REQUIREMENTS OF EACH INDIVIDUAL
CLIENT.
35. PRO DATA AND PAY USA AGREE ON THE FOLLOWING APPROACH TO ENSURE THE MAXIMUM
CLIENT CONVERSION RATE:
35a ) PRO DATA WILL SEND TO EACH OF ITS CLIENTS A LETTER EXPLAINING THAT PAY USA
HAS PURCHASED PRO DATA'S CLIENT BASE AND THAT PAY USA WILL BEGIN CONVERTING THE
CLIENT TO PAY USA. THE LETTER WILL LIST THE ADVANTAGES OF THE CONVERSION, THE
REASON FOR THE SALE AND WILL URGE THE CLIENTS TO CONVERT AND TAKE ADVANTAGE OF
PAY USA'S ADDITIONAL SERVICES. THIS CLIENT NOTIFICATION LETTER AS WELL AS A PAY
USA NEW CLIENT PACKAGE WILL BE INCLUDED WITH THE DELIVERY OF THE PROJECTED FINAL
PAYROLL OF THAT CLIENT. A SAMPLE LETTER IS INCLUDED WITH THIS AGREEMENT AND IS
LABELED ATTACHMENT 2 AND NO CHANGE WILL BE MADE TO THE CLIENT NOTIFICATION
LETTER WITHOUT PAY USA'S PRIOR CONSENT.
35b) PRO DATA WILL NOTIFY PAY USA EACH DAY AS TO WHICH CLIENTS IT HAS SENT THE
LETTER AND PACKAGE TO. PAY USA WILL CONTACT THE CLIENT THE DAY FOLLOWING
RECEIPT OF THE FINAL PAYROLL FROM PRO DATA AND INTRODUCE PAY USA.
35c) PRO DATA WILL PROMPTLY SUPPLY TO PAY USA IN ELECTRONIC AND PAPER FORMAT
THE NECESSARY DATA TO ENABLE PAY USA TO ACCURATELY CONVERT THE CLIENT AND TO
BEGIN PROCESSING SERVICES FOR THE CLIENT. SUCH DATA WILL AS A MINIMUM ENABLE
PAY USA TO CAPTURE THE CLIENT'S YEAR TO DATE EARNING AND DEDUCTION DATA IN
DETAIL BY EMPLOYEE; THE CLIENT'S EMPLOYEE MASTER FILE DATA; THE CLIENT COMPANY
DATA AND ANY OTHER PERTINENT DATA THAT PRO DATA AND PAY USA DEEM IMPORTANT.
35d) PRO DATA WILL ASSIST PAY USA IN SELLING AND PROMOTING ADDITIONAL SERVICES
OF PAY USA'S TO THE CLIENTS LISTED IN ATTACHMENT 1 THAT CONVERT TO PAY USA.
36. PRO DATA WILL CONTINUE TO PROVIDE PAYROLL PROCESSING SERVICES TO THE CLIENTS
WHO HAVE NOT YET CONVERTED TO PAY USA. ALL COSTS AND INCOME IN RELATION TO THE
PERFORMANCE OF SUCH SERVICES ARE FOR THE SOLE ACCOUNT OF PRO DATA.
37. CLIENTS WHO DO NOT CONVERT TO PAY USA MAY CONTINUE TO RECEIVE PAYROLL
PROCESSING SERVICES FROM PRO DATA. PRO DATA WILL ALSO HAVE THE RIGHT TO SELL
SUCH NON-CONVERTING CLIENTS ELSEWHERE SUBJECT TO THE PROVISO THAT THE SALE OF
SUCH NON-CONVERTING CLIENTS MUST BE COMPLETED PRIOR TO DECEMBER 31, 1996 AND
SUBJECT FURTHER TO THE PENALTY CLAUSE IN 38 BELOW.
38. PRO DATA WILL BE ASSESSED A SURCHARGE PAYABLE TO PAY USA OF 10% OF THE
ANNUALIZED REVENUE ON ATTACHMENT 1 OF NON-CONVERTING CLIENTS REFERRED TO IN 37
ABOVE. HOWEVER THIS SURCHARGE SHALL NOT BE ASSESSED IF 80% (BASED ON ANNUALIZED
REVENUE) OF THE CLIENTS LISTED ON ATTACHMENT 1 ACTUALLY CONVERT. NO PENALTY
WILL BE PAYABLE IF THE NON-CONVERTING CLIENTS ARE NOT SOLD ELSEWHERE BY PRO
DATA.
39. CLIENTS WHO PAY USA CANNOT CONVERT OR WHO PAY USA DOES NOT WANT TO CONVERT,
FOR WHATEVER REASON, MAY CONTINUE TO RECEIVE PAYROLL PROCESSING SERVICES FROM
PRO DATA AND PRO DATA SHALL HAVE THE RIGHT TO SELL SUCH CLIENTS ELSEWHERE. SUCH
SALES MUST BE COMPLETED PRIOR TO DECEMBER 31, 1996.
NO PENALTY WILL BE PAYABLE ON SUCH SALES.
D: CLIENT OWNERSHIP
40. OWNERSHIP OF THE INDIVIDUAL CLIENTS WILL PASS FROM PRO DATA TO PAY USA ON
THE DATE PAY USA FIRST PROCESSES THAT CLIENT'S PAYROLL.
E: MISCELLANEOUS
41. PAY USA WILL PREPARE, FOR CONVERTED CLIENTS, AT NO CHARGE QUARTERLY RETURNS
AND 1996 ANNUAL TRANSMITTALS AND W2'S FOR EACH CLIENT LISTED IN ATTACHMENT 1
THAT CONVERTS TO PAY USA. PAY USA MAY AT IT'S OPTION CHARGE FOR QUARTERLY
RETURNS FOR STATES OTHER THAN CALIFORNIA IN CONFORMITY WITH PRO DATA'S PRIOR
BILLING PRACTICES FOR OUT OF STATE RETURNS.
42. NO CONVERSION CHARGES WILL BE BILLED BY PAY USA FOR CONVERTING THE CLIENTS
LISTED IN ATTACHMENT 1 FROM PRO DATA TO PAY USA.
43. NO OTHER ASSETS OF PRO DATA ARE INCLUDED IN THIS AGREEMENT OF SALE.
SPECIFICALLY EXCLUDED ARE THE ACCOUNTS RECEIVABLE OF PRO DATA; THE BOOKKEEPING
SERVICES PROVIDED BY PRO DATA; ANY SUPPLIES OR DEPRECIABLE ASSETS OF PRO DATA
AND THE TAXABLE SALES SERVICES OF PRO DATA. PRO DATA AGREES TO INDEMNIFY AND
HOLD HARMLESS PAY USA FROM ANY CLAIMS ARISING OUT OF OR RELATED TO PRO DATA'S
BUSINESS PRIOR TO THE DATE OF THIS AGREEMENT.
44. PAY USA ASSUMES NO LIABILITIES OR OBLIGATIONS OF PRO DATA.
45. THIS AGREEMENT CONTAINS ALL OF THE ITEMS ON WHICH PRO DATA AND PAY USA HAVE
AGREED. NO OTHER ORAL OR WRITTEN REPRESENTATIONS, UNDERSTANDINGS OR WARRANTIES
EXIST EXCEPT AS SPECIFICALLY WRITTEN IN THIS AGREEMENT. ANY MODIFICATION TO
THIS AGREEMENT SHALL BE IN WRITING.
46. EXCEPT AS SPECIFICALLY MENTIONED IN THIS AGREEMENT, PRO DATA AND PAY USA
WILL BEAR THEIR OWN RESPECTIVE COSTS IN CONNECTION WITH THIS AGREEMENT AND IN
RESPECT TO FULFILLING THEIR OBLIGATIONS OF THIS AGREEMENT.
F: WARRANTIES OF THE SELLER AND BUYER
WARRANTIES OF PRO DATA:
ALL INFORMATION CONTAINED IN ATTACHMENT 1 IS TRUE, ACCURATE AND COMPLETE
AS OF AUGUST 19, 1996.
ALL OF THE CLIENTS THAT HAVE CANCELED OR TERMINATED FROM PRO DATA'S
SERVICE ARE NOTED AS SUCH IN ATTACHMENT 1 AND NO AMOUNT IS INCLUDED FOR
SUCH CLIENTS IN THE ANNUALIZED TOTAL OF $139310.72
PRO DATA IS A PROPERLY FORMED SOLE PROPRIETORSHIP, VALIDLY OPERATING
UNDER THE LAWS OF THE STATE OF CALIFORNIA.
XXXXX X XXXXXXX AS THE SOLE OWNER OF PRO DATA HAS THE POWER AND
AUTHORITY TO EXECUTE AND PERFORM ALL OF PRO DATA'S OBLIGATIONS SET OUT
IN THIS AGREEMENT.
WARRANTIES OF PAY USA:
PAY USA IS A PROPERLY FORMED AND ORGANIZED CORPORATION, VALIDLY
OPERATING UNDER THE LAWS OF THE STATE OF CALIFORNIA AND THAT ANTON DONDE
IS THE DULY ELECTED PRESIDENT OF PAY USA.
ANTON DONDE AS THE PRESIDENT OF PAY USA HAS THE POWER AND AUTHORITY TO
EXECUTE AND PERFORM ALL OF PAY USA'S OBLIGATIONS SET OUT IN THIS
AGREEMENT.
G: RESTRAINT OF TRADE
FOR THE PERIOD JANUARY 1, 1997 THROUGH DECEMBER 31, 1999, NEITHER PRO DATA NOR
XXXXX XXXXXXX MAY:
DIRECTLY OR INDIRECTLY PROVIDE PAYROLL SERVICES TO ANY COMPANY, ANYWHERE
THAT PAYUSA CURRENTLY DOES BUSINESS
SOLICIT OR REFER ANY CLIENT INCLUDED IN ATTACHMENT 1 TO ANY OTHER
PAYROLL PROCESSING SERVICE
H: DISPUTE RESOLUTION
ALL CLAIMS, DISPUTES AND OTHER MATTERS IN CONTROVERSY ("DISPUTE") ARISING
DIRECTLY OR INDIRECTLY OUT OF OR RELATED TO THIS AGREEMENT, OR THE BREACH
THEREOF, WHETHER CONTRACTUAL OR NONCONTRACTUAL, AND WHETHER DURING THE TERM OR
AFTER THE TERMINATION OF THIS AGREEMENT, SHALL BE RESOLVED EXCLUSIVELY ACCORDING
TO THE PROCEDURES SET FORTH BELOW.
MEDIATION. NEITHER PARTY SHALL COMMENCE AN ARBITRATION PROCEEDING
UNLESS SUCH PARTY SHALL FIRST GIVE A WRITTEN NOTICE (A "DISPUTE NOTICE")
TO THE OTHER PARTY SETTING FORTH THE NATURE OF THE DISPUTE. THE PARTIES
SHALL ATTEMPT IN GOOD FAITH TO RESOLVE THE DISPUTE BY MEDIATION UNDER
THE AMERICAN ARBITRATION ASSOCIATION COMMERCIAL MEDIATION RULES IN
EFFECT ON THE DATE OF THE DISPUTE NOTICE. IF THE PARTIES CANNOT AGREE
ON THE SELECTION OF A MEDIATOR WITHIN 20 DAYS AFTER DELIVERY OF THE
DISPUTE NOTICE, THE MEDIATOR WILL BE SELECTED BY THE AMERICAN
ARBITRATION ASSOCIATION. IF THE DISPUTE HAS NOT BEEN RESOLVED BY
MEDIATION WITHIN 60 DAYS AFTER DELIVERY OF THE DISPUTE NOTICE, THEN THE
DISPUTE SHALL BE DETERMINED BY ARBITRATION IN ACCORDANCE WITH THE
PROVISIONS SET FORTH BELOW.
ARBITRATION. ANY DISPUTE THAT IS NOT SETTLED BY MEDIATION AS PROVIDED
ABOVE SHALL BE RESOLVED BY ARBITRATION BEFORE A SINGLE ARBITRATOR
APPOINTED BY THE AMERICAN ARBITRATION ASSOCIATION OR ITS SUCCESSOR IN
ORANGE COUNTY, CALIFORNIA. THE DETERMINATION OF THE ARBITRATOR SHALL BE
FINAL AND ABSOLUTE. THE ARBITRATOR SHALL BE GOVERNED BY THE DULY
PROMULGATED RULES AND REGULATIONS OF THE AMERICAN ARBITRATION
ASSOCIATION OR ITS SUCCESSOR THEN IN EFFECT, AND THE PERTINENT
PROVISIONS OF THE LAWS OF THE STATE OF CALIFORNIA RELATING TO
ARBITRATION. THE DECISION OF THE ARBITRATOR MAY BE ENTERED AS A FINAL
JUDGMENT IN ANY COURT OF THE STATE OF CALIFORNIA OR ELSEWHERE. THE
ARBITRATOR SHALL HAVE NO POWER OR AUTHORITY TO AWARD PUNITIVE DAMAGES.
PRE-ARBITRATION DISCOVERY SHALL BE LIMITED TO ONE DEPOSITION PER PARTY
NOT EXCEEDING EIGHT HOURS EACH. THE ARBITRATOR SHALL BE FREE TO AWARD
ATTORNEYS' FEES TO THE PREVAILING PARTY.
PRO DATA PAY USA
BY: /s/ Xxxxx X. Xxxxxxx BY: /s/ Anton Donde
DATE: August 19, 1996 DATE: August 19, 1996
