Service Agreement
Trustar Retirement Services & Xxxxxx Capital Management LLC
This Service Agreement ("Agreement") is made and effective beginning on this
August day of 4 2005 by and between Xxxxxx Capital Management LLC ("you",
"your") and Delaware Charter Guarantee & Trust Company, conducting business as
Trustar Retirement Services ("we", "us", "our"). You and we are the "Patries"
to this Agreement. Each of the Parties may be referred to separately as a
"Party".
By signing this page, the Parties agree to all the terms of this Agreement and
to be bound by any and all parts of it as if the Parties had signed at the end.
Capitalized terms used in this Agreement will have the meanings listed in the
"Glossary" in Article I below.
Each of the Parties represents and warrants that it has the authority to enter
into this Agreement and will be bound by it. Each individual signing this Agree-
ment represents and warrants that she or he has, individually or together with
any other persons signing this Agreement on behalf of the same Party, the au-
thority to sign this Agreement and make it binding on the Parties.
This Agreement establishes the entire understanding of the Parties on the
matters covered in the Agreement and supersedes and cancels any and all prior
agreements, understandings, or representations between the Parties, whether
written or oral, relating to these matters. We reserve the right to update this
Agreement with respect to products and services offered by issuing Addendums to
this Agreement as necessary.
Xxxxxx Capital Management LLC Delaware Charter Guarantee &
Trust Company conducting busi-
ness as Trustar Retirement
Services
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxx Judge
___________________ ________________
Title: President Title: Snr Vice-President
Date: August 4, 2005 Date: August 9, 2005
Article II-SERVICES
We provide Services to you and your customers. These Services are listed on the
Fee Schedules included in Artive V of this Agreement.
We rely on you and your Customers to give us the information that we need to
provide the Services. Your cooperation and the cooperation of your Customers are
important to our acting timely and accurately. We will not be obligated to per-
form any Services if we do not receive timely , accurate, and complete informa-
tion. Please note that not all Services will be available to all Tax-Advantaged
Savings Accounts.
Article III-General Provisions
3.1 Engagement and Deposits
Engagement. You engage us to provide the Services. We accept that engagement.
Making Deposits. You will arrange for contributions from Customers to be made.
We will not do so. We have no obligation to collect any contributions. We are
not required to inquire about the payment or amount of any contribution.
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3.2 Our Obligations
We will provide Services for your Customers who establish self-directed invest-
ment accounts with you, including your affiliates or agents, to fund their Tax-
Advantaged Savings Accounts. These Services include:
(a) Maintaining our IRS-approved retirement plans and trust/custodial docu-
ments in compliance with applicable federal laws and regulations.
(b) Providing Tax-Advantaged Savings Account forms and materials for you and
and your Customers.
(c) Maintaining Customer data, including beneficiary designations, as pro-
vided by you.
(d) Providing Internet account access for operational contacts and your
correspondent firms as requested by you.
(e) Providing a toll-free customer service telephone line for operational
contacts, brokers and Customers during normal business hours.
(f) Sending annual required minimum distribution notices to and, upon request
, calculating require minimum distribution amounts for, Customers age 70
1/2 and older.
(g) Remitting and reporting to appropriate agencies, under our taxpayor
identification number as directed trustee tax, tax withholding as with-
held and forwarded by you to us.
(h) Preparing IRS Forms 1099 and 5498 as required.
(i) Mailing the Privacy Notice as shown in Exhibit A to this Agreement to
Customers on an annual basis.
3.3 Limitations on Our Liability
In providing Services, or otherwise acting under this Agreement, we will not
become the named fiduciary or administator of the Tax-Advantaged Savings
Accounts, nor shall these Services make us a fiduciary with regards to the Tax-
Advantaged Saving Accounts. The Parties agree that we are only a directed tru-
stee and and that the Services we provide are ministerial in nature.
Our Duties and performance under this Agreement do not give us knowledge of any
underlying fault or problem with regard to the Tax-Advantaged Savings Accounts
or any Tax-Advantaged Savings Accounts Investments.
Furthermore, it is understood that our performance under this Agreement is
heavily dependent on information provided to us by you or your delegate or
customers. We will not be responsible for any improper performance of, or fail-
ure to perform, any service set out in this Agreement that is due, in whole or
in part, to receipt of no, or incorrect, data necessary to the performance of
that Service by us.
This section shall survive the termination of this Agreement.
3.4 Your Obligations:
You agree to, and shall provide the following services, documents, and informa-
tion, with respect to the Tax-Advantaged Savings Accounts established by your
Customers:
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(a) Act as a custodian for all assets held by your firm in your Customers'
Savings Accounts.
(b) Provide us with a copy of all disclosure material sent to our mutual
customers. Such material shall include, but is not limited to, the amount
of fees charged for the customer's Trustar Tax Advantaged Savings Account
and how such fees will be collected.
(c) Provide the investment services requested by your Customer for his or her
Tax Advantaged Savings Account including, but not limited to, processing
contributions and loan payments (if applicable) to the Customer's Tax-
Advantaged Savings Account.
(d) Provide us with timely, comlete and accurate information necessary to
properly establish and maintain the Tax-Advantaged Savings Account on our
records, including contributions, distributions, and fair market value of
assets.
(e) Unless we agree to alternative arrangements, provide us daily with
account information and a quarter reconciliation file of all Tax-Advan-
taged Savings Account Information from your records. We will compare it
against our account records for consistency and accuracy. We will notify
you of errors to be corrected. You must provide data to us by using a
transmission process and data format that is compatible with our record-
keeping systems and acceptable to us.
You will notify us immediately when you establish a Tax-Advantaged
Savings Account so that we can build records for it. Tax-Advantaged Sa-
vings Accounts must be funded when they are established. If a Tax-Advan-
taged savings Account is opened without being funded and we receive No-
xxxx from you and we are asked to close it within six (6) months of its
establishment, no Closing Fees will be applied to it. If the Tax-Advan
taged Savings Account is open for more than six (6) months, we will xxxx
all applicable Fees, including Closing Fees, as listed in the appropriate
Fee Schedules directly to you.
(f) Process and maintain all documents, information and correspondence for
the Tax-Advantaged Savings Accounts, including, but not limited to,
applications, beneficiary designations, and the name of the individual
responsible for Education Savings Accounts. You will make such documents
available to us upon our Notice to you.
(g) In the event of a bulk closing and transfer of Tax-Advantaged Savings
Accounts to a Successor, you must pay us all applicable Fees, inlcuding
Bulk Closing Fees, as listed in the Fee Schedules in Article V of this
Agreement before such Transfer can take place. A separate Transfer
Agreement will be prepared upon a Bulk Closing or a Transfer.
(h) To the extent a Customer fails to pay our fees, we will authorize and
direct you to, and you shall, liquidate Tax-Advantaged Savings Account
assets (i) to pay the Fees and (ii) to deduct any other outstanding Fees
that are due us from the proceeds of such liquidation. Our authoriza-
tion and direction to you are consistent with, provided for, and allowed
by, the Trust Agreements, Custodial Agreements, Disclosure Statements,
or other relevant documents that are adopted by the Customer.
(i) Withhold federal and state taxes from distributions and report and wire
such monies within three (3) business days to us for submission to the
IRS and state tax authorities. Reporting will include a breakdown of
tax-withholdings per Tax-Advantaged Savings Accounts and will be done
promptly so as to allow us to report and submit them to the appropriate
federal and state taxing authorities within the time period required by
law. Withholdings are pursuant to your Customer's instructions to us or
to you, acting on our behalf under the Letter of Authorization shown in
Exhibit B of this Agreement. 3
(j) Prepare and provide your Customers with periodic statements of assets
and activity in their respective Tax-Advantaged Savings Accounts, inclu-
ding an annual statement showing the fair value of each Tax-Advantaged
Savings Account as of December 31 of each calendar year. For IRAs to
which no reportable contributions were made for the year, you shall in-
clude a legend on the annual fair market value statements designating
which information on the statement is being furnished to the IRS. You
shall sennd the annual fair market value statement to the customers,
with an electronic file to us containing fair market details, no later
than January 31 of the following calendar year. Should you fail to pro-
vide the requred periodic statements of assets and activity or the annual
fair market value statements to your Custoemrs or to us in a timely
manner, we may, at our option, hire outside independent appraisers to
value the fair market value of your Customers' accounts and we will
invoice you for any and all expenses that we incur in this endeavor, in-
cluding our time.
(k) Provide annual certification to us that you have appropriate procedures
in place and are verifying, on our behalf, the indentity of your Custom-
ers as required by, and in compliance with all the provisions of section
326 of the USA PATRIOT Act. You shall effect such annual certification by
completing and sending Exhibit C of this Agreement to us no later than
December 31 of the year preeding the year of the certification. If you do
not return the certification, Trustar will undertake the responsibility
and may change the additional cost to you.
(l) Xxxxxx Capital Management LLC agrees to provide the following services
with respect to 403(b)7 accounts established by Customers: Assure that
investments in the accounts are restricted to mutual funds that can be
valued on the statements of Xxxxxx Capital Management LLC.
(m) Xxxxxx Capital Management LLC agrees to provide the following services
with respect to Individual 401(k) accounts established by Customers:
i. Unless we agree to alternative arrangements, provide us daily with
Account Access files on deposits to the plan and a breakdown of
contributions/payments information by the following types:
* Salary deferrals
* Catch-up deferrals
* Employer profit sharing contributions
* Rollover amounts
* Loan payments
ii. Unless we agree to alternative arrangements, provide us daily with
Account Access files on withdrawals from the plan.
iii. Submit loan apllications to us for authorization prior to disburse-
ment.
(n) Provide a list of authorized signers for your firm. the people on this
list will be authorized to sign on behalf of your firm concerning daily
operation issues with Trustar. Such issues include but are not limited to
signing the statement of responsiblity, making changes to customized
documents (if applicalbe), requesting marketing, training and other ser-
vices for which a fee may be assessed, and signing the annual CIP
certification.
3.5 Our Indemnification to You
You will not be held responsible and we will indemnify and hold you and your
officers, directors, employees, former employees, affiliates and agents harmless
from and against any and all losses, damages, costs, charges, counsel fees, pay-
ments, expenses and liability arising out of or attributable to any or omissions
regarding our obligations under this Agreement or our failure to comply with
the terms of the Agreement. We will not indemnify you for your negligent acts or
intentional misconduct. 4
3.6 Your Indemnification to Us
We will not be held responsible and you will indemnify and hold us and our
officers, directors, employees, former employees, affiliates and agents harmless
from and against any and all losses or damages, costs, charges, counsel fees,
payments, expenses and liability arising out of or attributable to any of your
acts or omissions regarding your obligations under this Agreement or the failure
of to comply with the terms of this Agreement. You will not indemnify us for our
negligent acts or intentional misconduct.
3.7 Proprietary Information
Each party agrees to protect and treat proprietary information of the other
Party as confidential, and not disclose proprietary information to third
parties or to use such proprietary information for any purposes whatsoever
other than to perform its respective obligations under this Agreement. Each
Party will advise its employees, agents, and representatives with access
to proprietary information of the other Party of the obligation to preserve
the confidentiality of proprietary information and each Party will not cause
or permit other persons or entities access to proprietary information of the
other Party without such other Party's prior written consent.
Each Party agrees to comply with all applicable privacy and data protection
laws and regulations which are or which may in the future be applicable to
customer information, uncluding the Xxxxx-Xxxxx-Xxxxx Act (p.L. 106-102)(15
U.S.C. &6801 et seq.).
3.8 Confidentiality
Each Party acknowledges that, in connection with the performance of this
Agreement or otherwise in the course of its dealings with the other Party,
it may receive or learn confidential, business, trade secret, proprietary
or other like information concerning the other Party or third parties to whom
the other Party has an obligation of confidentiality ("Confidential Informa-
tion"). Confidential Information may include, but is not limited to, person-
al and/or health information about Customers who have applied for or
purchased financial products or financial services from either Party. Each
Party agrees that it will not disclose to any third party, either orally or
in writing, any Confidential Information of the other Party without the prior
written consent of the other Party, and that it will not appropriate any
Confidential Information for its own or for the use of any third party,
except to the extent, if any, to which a party may be compelled by law to
make such a disclosure, in which event the party obliged to disclose shall
notify the other party of the compulsion to disclose at the earliest moment
possible so that the party having the direct duty of care with respect to the
Confidential Information or the person or entity that is the subject of the
Confidential Information may take action to quash or otherwise avoid or limit
the disclosure. Confidential Information that is provided by one Party to the
other shall be used by the recipient only for the purpose for which it was
provided, and access to it shall be restricted to individuals who require the
information (or access to the information) to further that purpose. Without
limiting any of the foregoing, each Party agrees to take at least such pre-
cautions to protect the other Party's Confidential Information as it takes to
protect its own Confidential Information, and in any event shall take all
precautions that are reasonably necessary to protect the security of the
other Party's Confidential Information. Each Party further agrees that upon
request of the other Party it will return to that Party all tangible items
containing any of that Party's Confidential Information, including all copies
, abstractions and compilations thereof, without retaining any copies of the
items required to be returned. The obligations of this paragraph extend to
the employees, agents, affiliates and contractors of each Party, and each
Party shall inform such persons of their obligations hereunder.
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3.9 Governing Law
This Agreement shall be governed by, and provisions shall be construed in
accordance with, the laws of the State of Delaware.
3.10 Duration and termination of Agreement
Duration of Agreement: This Agreement shall have a non-cancelable intial term
of one (1) year beginning on August 1,2005. It is fully binding on the Parties.
It will also extend to their respective successors and assigns. This Agreement
shall automatically renew for additional one year periods. This Agreement can
be terminated by either Party with at least ninety (90) days written notice
after fulfilling the one-year initial term requirement. The obligations of each
Party to the Customers are independent of the other Party's and may not run
conterminously with this Agreement or with the other Party's contract(s) with
the customer.
In the event of any material breach of this Agreement by one Party, the
other Party may (reserving cumulatively all other remedies and rights under
this Agreement and at law and in equity) terminate this Agreement by giving
at least thirty (30) days' written notice to the breaching Party, provided,
however, that any such termination shall not be effective if the Party in
breach has cured such breach prior to expiration of said thirty (30) day
notice period.
In the event a Party initiates or becomes the subject of any proceeding
under any federal or state bankruptcy or insolvency law, makes an assignment
for the benefit of its creditors, becomes insolvent, or if any substantial
part of such Party's property becomes subject to any levy, seizure, assign-
ment or sale for or by any creditor or governmental agency, the the other
Party may terminate this Agreement by giving at least xxxxxx (30) days'
written notice of such termination and designating a date upon which such
termination shall be effective.
The period between the Notice of and the date for, termination of this Agree-
ment will be referred to as the "termination period" below.
Effect of termination. During the termination period, we will:
* Accept Notices regarding Transfers to the Successors, except for the last
five days of the termination period,
* Accept Notices regarding the allocation of deposits except for the last 10
days of the period,
* Accept Notices regarding Transfers between Investments except for the last 10
days of the period,
* Cease to accept Notices regarding Transfers between Tax-Advantaged Savings
Accounts when it is not possible for the Investments described in such
Notices, due to their operations or issues of timing or other restrictions of
the documents governing such Investments, to be liquidated prior to the end
of the termination period.
Final confirmation will be made available with regard to all Tax-Advantaged
Savings Accounts as of the end of the termination period. We will not be obli-
gated to make any further reports regarding any of these Tax-Advantaged Savings
Accounts.
Cooperation. The Parties agree to cooperate in all actions regarding the ter-
mination of this Agreement. The actions required to terminate this Agreement
are to be completed as soon as possible. This cooperation will include the
continued provision of information and reports between the Parties that is re-
sonably needed to affect the transfer of dtat and Investments necessary to end
this Agreement and allow the Successor to perform its duties.
This paragraph will survive the termination of this Agreement.
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3.11 Miscellaneous
Assignment - Assets. We understand that none of the Investments are to be
subject to any kind of anticipation, alienation, sale, transfer, assignment,
pledge, charge, or encumbrance. We will act accordingly in providing the
Services. Neither this nor anything in this Agreement may be interrupted
as impairing our ability to collect fees.
Assignment _ Rights. Neither this Agreement, nor any right, title, interest, or
performance with regard to this agreement may be alienated, assigned, anti-
cipated, in any manner, without the express written agreement of both Parties
We may, however, assign our rights, duties, and obligations under this Agreement
to an affiliate without anyone's agreement. We will provide notice of any such
assignment to you.
Amendment. This Agreement may be amended,modified, or assigned only by an
instrument in writing signed by duly authorized officers of both Parties. Not-
withstanding the foregoing, the Fee Schedules in Article V may be modified by
us but in no circumstances during the first year of this Agreement and then
only with at least (60) days advanced Notice.
Waiver. It is understood and agreed that no failure or delay to exercise, nor
any single or partial exercise of, any right, power, or privilege given or
arising under this Agreement will operate as a waiver of future rights to exer-
cise any such right, power, or privilege.
Force Majeure. We will incur no liability to you or any Customers and will not
be responsible for delivery or non-delivery or error in transmission of reports
or notices that is caused by third parties. We will also not be responsible for
any delay in performance, of any obligation hereunder and for any loss to the
extent that such delay in performance, or non-performance of such loss is due
to forces beyond our reasonable control including delays, errors, or interrup-
tions caused by third parties, any industrial, judicial, government, civil or
military action, acts of terrorism, insurrection, or revolution, nuclear fusion,
fission, or radiation, failure or fluctuation in electrical power, heat,light,
air conditioning, or telecommunications equipment,or act of God.
This paragraph shall survive the termination of this Agreement.
Notices: All written notices shall be delivered to the respective Parties as
follows:
If to Potkul Capital:
Xxxxxx Capital Management LLC.
0000 Xxxx Xx 0xx Xxx.
Xxxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxx
If to Delaware Charter:
Delaware Charter Guarantee & Trust Company
0000 Xxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: Business Development
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