Exhibit - h2
Delaware CharterGuarantee & Trust Company
and
Emerald Research Corporation
Delaware Charter Guarantee & Trust Company, conducting business as Trustar
Retirement Services ("Delaware Charter") and Emerald Research Corp. ("Emerald")
(each a "Party" or collectively "Parties"), have as of the 28th day of July,
2003, entered into the following agreement ("Agreement").
Whereas Delaware Charter has agreed to provide directed trustee and related
recordkeeping services for Emerald Customers ("Customers") who desire to esta-
xxxxx self-directed investment investment accounts at Emerald or an affiliate
or agent for use in the Delaware Charter 401 (a) qualified plans (individual
401(k), profit sharing, money purchase pension), individual retirement ac-
counts, 403(b)(7) custodial accounts and education savings accounts (collectiv-
xxx the "Tax-Advantaged Savings Accounts").
Whereas Emerald Research Corp. has agreed to provide account information for
mutual Customers of Delaware Charter and Emerald.
Now Therefore, in consideration of the promises and mutual covenants herein-
after contained, the Parties agree as follows:
1. Delaware Charter Obligations:
Delaware Charter agrees to provide the following services with respect to
Tax-Advantaged Savings Accounts established by Customers (each an "Account" and
collectively the "Accounts"):
(a) Provide recordkeeping services for the Tax-Advantaged Savings Accounts
under which Accounts have been established using IRS-approved retirement
plans and trust/custodial documents offered by Delaware Charter, and
maintain such plans and documents in compliance with applicable federal
laws and regulations.
(b) Provide Delaware Charter Tax-Advantaged Savings Account forms and mater-
ials to Emerald and Customers.
(c) Maintain customer data, including beneficiary designation, as provided
by Emerald.
(d) Provide internet account access for operational contacts at Emerald and
their correspondents.
(e) Provide a toll-free customer service phone line for operational contacts,
brokers, and Customers during normal business hours.
(f) Provide annual required minimum distribution notices and, upon request,
calculations for Customers age 70&1/2 and older.
(g) Remit and report to appropriate agencies tax withholding as withheld and
forwarded by Emerald to Delaware Charter. This reporting is done under
Delaware Charter's taxpayer ID as directed trustee.
(h) Prepare and provide necessary IRS forms 1099 and 5498 as required.
(i) Provide privacy Notice as shown in Exhibit A to Emerald for distribution
to Customers on an annual basis.
(j) Additional obligations as shown in Addendum One and Two.
Limitation on Delaware Charter Liability:
In providing directed trustee and recordkeeping services, or otherwise acting
under this Agreement, Delaware Charter will not become the named fiduciary or
administrator of the Accounts, nor shall these services make Delaware Charter a
fiduciary with regard to the Accounts. The Parties agree that the directed
trustee and recordkeeping services that Delaware Charter provides are minister-
ial in nature. Furthermore, it is understood that Delaware Charter's perform-
ance under this Agreement is heavily dependent on information provided to
Delaware Charter by Emerald or its delegate or customers. Delaware Charter will
not be responsible for any improper performance of, or failure to perform,
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any service set out in this Agreement that is due, in whole or in part, to re-
ceipt of no, or incorrect, data necessary to the performance of that service by
Delaware Charter. This section shall survive the termination of this Agreement.
2. Emerald Obligations:
Emerald agrees to and shall provide the folowing serives, documents, and in-
formation, with respect to Accounts established by Customers.
(a) Provide the investment services requested by the Customer for his or her
Account including, but not limited to, processing contributions and loan
payments (if applicable) to the Customer's Account.
(b) Provide Delaware Charter with timely, complete and accurate Account
information necessary to properly establish and maintain the Account on
Delaware Charter's records, including contributions, distributions, and
market value. Data will be provided in a transmission process and data
format acceptable to Delaware Charter.
Accounts should be established at Delaware Charter at the time of fund-
ing. If an account is opened without being funded and Delaware Charter is
notified to close the account within twelve (12) months, no
fees will be applied to the account. If the account is open for more than
twelve (12) months, annual and closing fees as shown in Exibit B will be
charged.
(c) Process and maintain all Account paperwork and correspondence and make
such documents accessible to Delaware Charter upon reasonable advance
notice to Emerald.
(d) Promptly pay fees due Delaware Charter as shown in Exibit B plus any
fees, taxes, and expenses levied by outside firms necessary to administer
the trust or trust assets. To the extent Emerald fails to pay the fees
specified, Delaware Charter will (i) authorize and instruct Emerald to,
and Emerald shall, liquidate Account assets in order to pay the fees and
(ii) deduct outstanding fees from the proceeds of such liquidated
Account. Such authorization and instruction are consistent with, and al-
lowed by, the Self Directed Individual Retirment Account Trust, the Emp-
xxxxx Sponsored Plan Trust, the 403(b)(7) Custodial Agreement, or the
Disclosure Statement for Educational Savings Accounts adopted by the cus-
tomer. Delaware Charter will provide Emerald with ten (10) business days
notice in advance of any authorization and instruction to liquidate Ac-
count assets to allow Emerald the opportunity to pay all fees due to
Delaware Charter.
(e) Withhold federal and state taxes from distributions and report and wire
such monies to Delware Charter for submission to the Internal Revenue
Service and state tax authorities. Reporting will include a breakdown of
taxable amounts per Account and will be done promptly so as to allow
Delaware Charter to report and submit them to the appropriate federal and
state taxing authorities within the time period required by law. With-
holdings are pursuant to Customer instructions to Delaware Charter or to
Emerald acting under the Letter of Authorization as shown in Exibit C.
(f) Prepare and provide Customers with periodic statements of assets and
activity in their respective Accounts, including a statement showing the
value of each Account as of December 31 of each calendar year, which
shall be sent by Emerald to Customers no later than January 31 of the
immediately succeeding calendar year.
(g) Additional obligations as shown in Addendum One and Two.
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3. Indemnification by Delaware Charter
Emerald will not be held responsible and Delaware Charter will indemnify and
hold Emerald and its officers, directors, employees, former employees, affili-
ates and agents harmless from and against any and all losses, damages, costs,
charges, counsel fees, payments, expenses and liability arising out of or xxxxx-
butable to any act or omission of Delaware Charter regarding its obligations
under this Agreement or the failure of Delaware Charter to comply with the terms
of the Agreement. Delaware Charter will not indemnify Emerald for Emerald's neg-
ligent acts or intentional misconduct.
4. Indemnification by Emerald
Delaware Charter will not be held responsible and Emerald will indemnify and
hold Delaware Charter and its 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 act or omission of Emerald regarding its obligations under
this Agreement or the failure of Emerald to comply with the terms of this Agree-
ment. Emerald will not indemnify Delaware Charter for Delaware Charter's negli-
gent acts or intentional misconduct.
5. 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 informa-
tion 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.
6. Confidentiality
Each Party acknowledges that, in connection with the performance of this Agree-
ment or otherwise in the course of its dealings with the other Party, it may re-
ceive 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 Information"). Confidential
Information may include, but it not limited to, personal, financial, 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
use or for the use of any third party. 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 pur-
pose. Without limiting any of the foregoing, each Party agrees to take at least
such precautions 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 resonably necessary to protect the security of the
other Party's Confidential Information. Each Party further agrees that upon re-
quest of the other Party it will return to that Party all tangible items con-
taining any of that Party's Confidential Information, including all copies, ab-
stractions and compilations thereof, without retaining any copies of the items
required to be returned. The obligations of this paragraph extend to the employ-
ees, agents, affiliates and contractors of each Party, and each Party shall in-
form such persons of their obligations hereunder.
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7. Governing Law
This agreement shall be governed by, and provisions shall be construed in ac-
cordance with, the laws of the State of Delaware.
8. Terms and Conditions of the Agreement
This Agreement shall have a non-cancelable inital term of one (1) year beginning
on July 1, 2003. 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. The obligations of each Party to the Customers
are independent of the other Party's and may not run coterminously 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, assignment or sale for
or by any creditor or goverment agency, then the other Party may terminate this
Agreement by giving at least thirty (30) days written notice of such termination
and designating a date upon which such termination shall be effective.
9. Amendment
This Agreement may be amended, modified or assigned only by an instrument in
writing signed by duly officers of Trustar and Emerald. Notwithstanding the
foregoing, the Fee Schedule as outlined in Exibit B may be modified by Trustar
but in no circumstance during the first year of this agreement and then only
with at least sixty (60) days advance notice.
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10. Miscellaneous
This Agreement, including all Exibits attached hereto, constitutes the entire
agreement between the Parties and supercedes any prior written or oral
agreement with respect to the subject matter of this agreement. Delaware
Charter reserves the right to update the Agreement with respect to products
and services offered by issuing Addendums to Emerald.
11. Notices
All notices hereunder shall be in writing, by delivery in person, by
facsimile, by registered or certified mail or by overnight delivery
(postage prepaid, return receipt requested) to the respective Parties as
follows:
If to Emerald:
Emerald Research Corp.
0000 Xxxxxxx 00
Xxxxx, XX 00000
Attention: Xx. Xxxxx Xxxxxx
If to Delaware Charter:
Delaware Charter Guarantee & Trust Company
0000 Xxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: Trust Services
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day
first written above.
Emerald Research Corp.
By: /s/ Xxxxx X. Xxxxxx
---------------
Name: Xxxxx X. Xxxxxx
Title: President
Date: 7/28/03
Delaware Charter Guarantee & Trust Company, conducting business as
Trustar Retirement Services
By: /s/ Xxxxx Judge
-----------
Name: Xxxxx X. Judge
Title: Senior Vice President, Partnership Services
Date: 8/08/03
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Addendum One
Individual 401(k) Additional Obligations
1. Delaware Charter Obligations:
Delaware Charter agrees to provide the following additional services
with respect to Individual 401(k) Accounts established by Customers:
(a) Provide authorization to Emerald for distributions to plan
sponsors as needed or required.
(b) Test plan for compliance with IRC Section 402(g) and Section
415 limit.
(c) Prepare annual Form 5500 EZ and a Summary Annual Report, if
needed.
2. Emerald Obligations:
Emerald agrees to provide the following services with respect to
Individual 401(k) Accounts established by Customers:
(a) Provide Delaware Charter, at least monthly, with information
on deposits to the account with a breakdown of
contribution/payment information by the following types:
i. Salary deferrals
ii. Catch-up deferrals
iii. Employer profit sharing
iv. Rollover
V. Loan payments
(b) Provide Delaware Charter, at least monthly, with information
on withdrawals from the account.
(c) Submit loan applications to Delaware Charter for authorization
prior to disbursement.
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Addendum Two
403(b)(7) Additional Obligations
Reference to trustee and related services shall also be construed as custodial
services for 403(b)(7) Accounts.
1. Delaware Charter Obligations:
Delaware Charter agrees to provide the following services with respect
to Individual 403(b)(7) Accounts established by Customers:
(a) Act as Custodian for individual 403(b)(7) Accounts under which the
Accounts have been established using Custodial Agreements provided
by Delaware Charter, and maintain such Agreements in compliance with
applicable federal laws and regulations.
Delaware Charter WILL NOT allow loans, direct employer contributions,
or provide other administrative services including calculation of
contributions, determine employee eligibility, or determining
eligibility of transferred accounts.
2. Emerald Obligations:
Emerald agrees to provide the following services with respect to
Individual 403(b)(7) Accounts established by Customers:
(a) Assure that investments in the Accounts are restricted to mutual
funds that can be valued on the statements of Emerald.
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