Effective January 1, 2004

We recognize your concerns about the privacy of your company and employee information. Because protecting your confidential information is very important to us, we have adopted the following policy regarding how the information you share with Pay-Net is used and maintained. This privacy policy applies to companies who are current and former clients of Pay-Net.

Pay-Net does not sell or share personal information with non-Pay-Net companies for the purpose of marketing their products or services to you.

Collection and Use of Personal Information. Pay-Net is made up of Pay-Net, a California Partnership, Payroll World Inc., and Pay-Net Insurance Services Inc. and their related companies, called affiliates, that work together to bring you payroll and insurance services and products. We collect only relevant client and employee information that we are either allowed or required by law to obtain for conducting our business, such as:

• Information we receive from you on your company, such as name, address, Federal and State Identification Numbers, bank account information and similar information. We use this information to perform our duties as your payroll or insurance provider.

• Information about your employees, such as name, address, Social Security Number, rates of pay, deductions, pay amounts, direct deposit information and similar information.  The information is used to process payroll transactions that you request.

Sharing of Information Within Pay-Net. All or a portion of information collected through our normal business operations may be shared among Pay-Net's affiliates.

Sharing of Information Outside of Pay-Net. As permitted by law, we may disclose some or all of the information described above with companies outside of Pay-Net to service your accounts, improve our services, provide products and services you have requested, and inform you about products or services of interest to you. Such companies may include:

• Companies that provide financial services, such as banks, other securities broker-dealers, and mutual fund and insurance companies.  This would include companies that facilitate your company’s direct deposit transactions, ACH transfer of billing and tax liabilities, ACH payments of tax liabilities, etc.

• Governmental taxing authorities such as the Internal Revenue Service and California’s Employment Development Department as such entities relate to payroll taxation regarding your company. Nonfinancial companies, such as companies that perform services on our behalf.

• Others such as independent contractors or technical-system consultants who program our software, government agencies and regulators, consumer reporting agencies, and other outside parties as permitted or required by applicable laws

Protecting the Confidentiality of Your Personal Information. All Pay-Net employees are instructed to use strict standards of care regarding the confidentiality of your nonpublic personal information as outlined in firm policies. Employees not adhering to our firm policies are subject to disciplinary action. We require outside companies and independent contractors to whom we provide client information for marketing, servicing or processing purposes to enter into confidentiality agreements that restrict the use of the information to those purposes. We maintain physical, electronic and procedural safeguards that comply with applicable laws to protect your nonpublic personal information.

If you have questions regarding Pay-Net’s Privacy Policy, please write to us.

Note: If we materially change our privacy policies or practices we will change this privacy policy statement in order to notify you of the changes.