User License Agreement for IRS-Approved 401k Prototype Services

(Updated 1/1/2021)

401k plans and services provided by Pension Systems Corporation (hereinafter "401K PROVIDER") and its successors agrees to license an Internet-based version of its 401k software and related services, any updates or modifications it provides, and associated documentation (herein collectively referred to as the "Software") to you (hereinafter "LICENSEE") pursuant to the below terms and conditions. Do not order or use the Internet-based version of the Software until you have carefully read the following terms. By ordering or using the Internet-based version of the Software, you agree to be bound by the terms and conditions of this end user license agreement (the "Agreement").

Calendar Year License

401K PROVIDER hereby grants to LICENSEE a non-exclusive, non-transferable license to access, load and execute the Software on a computer under LICENSEE’S control for the duration of the calendar year, ending December 31st, in which LICENSEE pays the annual license fee for its services and Software. Unanticipated events caused by third-party financial intermediaries such as 401k asset custodians, self-directed brokerages, or mutual funds distributors, can force the shortening of the duration of this License. 401K PROVIDER is under no obligation to modify or pro- rate its fees when a shortened license is caused by third-party intermediaries.

License Restrictions for Internet-Based Software

401K PROVIDER will only permit LICENSEE Users to access the Internet-Based 401(k) Websites who has been identified by LICENSEE as authorized to access the sites or have been given passwords or other access information by LICENSEE. LICENSEE assumes all risks and liabilities for providing its third-party service vendors, including but not limited to accountants, financial advisors, payroll service providers, and others, with access to its 401(k) Website. LICENSEE assumes all risks and liabilities of providing third-party vendors with its login information and passwords to its 401(k) Website. LICENSEE Users shall (i) not attempt to gain access to the Software object code, (ii) not attempt to reverse engineer or decompile the Software, (iii) not allow any other party to access or use the functionality of the 401(k) Websites, and (iv) not disclose the structure, functionality or capabilities of the Software or 401(k) Websites to any other parties. 401K PROVIDER shall (i) maintain the computers on which the Internet-Based Software is loaded and all copies of the Software in secure and locked locations, (ii) only load the Software onto the hard disks and memory of computers which are protected from access by passwords, (iii) allow access to any copies of, or computers on which, the Software is stored only by persons who are, through their employment or other agreements with 401K PROVIDER, legally obligated to comply with the nondisclosure, access and use conditions of this Agreement, (iv) maintain a list of all employee and contractor personnel with access

to the Software and equipment, and (v) require all such employee and contractor personnel to sign a statement that he/she understands the nondisclosure, access and use requirements relating to the Software. LICENSEE shall not: (i) reverse engineer, decompile, disassemble, re-engineer, or otherwise translate any portion of the Software, (ii) rent, lease, sub- license, time share, lend or transfer the Software to a third party, (iii) allow direct access to the Software by anyone other than employees and contractors whose duties require such access, (iv) develop, or have developed on its behalf, software that is similar in functionality or features to the Software, (v) develop, market or sell any competitive or derivative product for LICENSEE’S own use or use by others (vi) distribute externally or to third parties, except Users, any communication that describes or compares the features, functions or performance characteristics of the Software, or (vii) allow any third party contractors to do any of (i) through (vi). LICENSEE shall not remove or alter any copyright notices or restrictive or ownership legends appearing on or in the Software. LICENSEE shall take all reasonable steps, both during and after the Term of this Agreement, to ensure that no unauthorized person accesses or uses the Software or 401(k) Websites.

Certified Plan Audits

401K PROVIDER does not perform or provide the LICENSEE with Certified Plan Audits. Mutual fund companies and/or the LICENSEE’S plan asset custodian shall provide LICENSEE with mutual fund statements that contain plan share prices, balances, dividends, short-term and long-term capital gains and losses and other detailed information deemed pertinent by the investment fund companies. 401K PROVIDER shall provide LICENSEE with a year-end summary of the plan's mutual fund holdings. If LICENSEE requires more specific mutual fund information, it is LICENSEE’S responsibility to extract the information from the account statements supplied by the fund companies and/or asset custodian.

Consultations Charges

401K PROVIDER reserves the right to charge LICENSEE for time spent in consultation, discussion, question answering or records review with LICENSEE’S accountants, consultants, attorneys or other professional service providers or with government officials in matters pertaining to the LICENSEE’S plan. LICENSEE shall furnish to 401K PROVIDER, on a timely basis, any and all information and data that 401K PROVIDER may request in order to perform its services hereunder, including but not limited to: employee census data, trust investment data, plan amendments and communications with any government agencies concerning the plan. 401K PROVIDER shall rely solely upon information so submitted. 401K PROVIDER shall not be responsible for any penalties or liabilities resultant from failure of LICENSEE to submit accurate information on a timely basis.

401K PROVIDER will act in all matters only upon the express direction of the Plan Administrator or the Trustees of the plan and will at no time exercise any discretion or independent authority with regard to the performance of the administrative services described herein, no such independent authority or discretionary rights having been granted to 401K PROVIDER by LICENSEE, the Plan Administrator or the Trustees of the plan under this or any other agreement. 401K PROVIDER shall act in a ministerial capacity only.

Reliance Upon Prototype Plan Documents

Upon termination or expiration of this Agreement LICENSEE may no longer rely upon or use 401K PROVIDER copyrighted and/or 401K PROVIDER-supplied Prototype Plan Documents. Upon termination or

expiration of this Agreement LICENSEE’S right to use 401K PROVIDER-supplied customized and standardized Documents is revoked. LICENSEE may continue to use its customized IRS-approved prototype plan documents under a subscription service, described in website www.401kprototype.com.

Reprocessing Charge for Supplemental Recordkeeping or Supplemental Services

Unanticipated events caused by third-party intermediaries and service providers such as investment custodians, mutual fund companies and brokerages, or actions by the LICENSEE that require 401k PROVIDER to make edits, roll-backs, calculations and reprocessing of the LICENSEE’S 401k database, are subject to a Reprocessing Charge. Reprocessing Charge is invoiced, in most cases, after the necessary corrections and reprocessing by 401k PROVIDER has been accomplished, because problems that require reprocessing are, in most cases, very time- sensitive, and need to be addressed quickly to prevent them from escalating.

Examples of events that can result in Reprocessing Charges include but are not limited to reprocessing LICENSEE’S previously submitted payroll or distribution information, and intermediaries’ actions including fund mergers, fund names and cusip changes, reclassification of fund shares, stock-splits, reverse stock splits, and other actions and/or transactions that require 401k PROVIDER to make critical and detailed changes to the LICENSEE’S 401k plan database. The standard Reprocessing Charge is invoiced at $200 per hour, with a 1-hour minimum charge.

Some third-party actions require 401k PROVIDER to liquidate some LICENSEE’S investments that, in 401K PROVIDER’S estimation, could, if not addressed promptly, result in serious accounting and/or recordkeeping problems for the LICENSEE, its plan participants, and its plan database.

When possible and deemed necessary, 401k PROVIDER will liquidate problematic investments to mitigate against escalating problems for the LICENSEE. The proceeds resulting from such liquidations will be transferred to LICENSEE’S custodial money market funds. LICENSEE shall fully indemnify and hold harmless 401K PLAN PROVIDER for taking such liquidation actions for the benefit of LICENSEE and its plan’s participants and database. Other actions taken by 401k PROVIDER herein not detailed or defined may be charged as Supplemental Services. Examples would include the costs associated with temporarily blocking access to 401k online services, and/or restoring 401k online services.

Supplemental Due Diligence Audit & Accounting Reports

401k PROVIDER offers a supplemental Due Diligence Audit & Accounting Pac to LICENSEES who require additional detailed information beyond the scope of reports provided in the standard plan product configuration. The Pac is a set of specially developed and formatted reports that provide the LICENSEE with a broad overview of plan transactions and asset holdings, on both the ‘participant level’ and the ‘plan level’.

Failure to Pay 401k PROVIDER Invoices

All invoices for 401k PROVIDER services are due and payable when received by LICENSEE unless otherwise specified. 401k PROVIDER reserves the right to demand payment of outstanding invoices by bank wire transfers only. 401k PROVIDER shall supply bank wire transfer information and instructions to the LICENSEE. otherwise specified in the invoice. 401k PROVIDER reserves the right to temporarily suspend

or withhold services, including access to its online services, until outstanding invoices are paid in full. If online service is suspended for nonpayment of outstanding invoice(s) there is an additional charge for service restoration. This service restoration charge, plus all outstanding invoices, must be paid in full via bank wire transfer. Bank wire transfer information and instructions shall be provided to LICENSEE by 401K PROVIDER.

Prototype Plan Documents

For the duration of this Agreement, 401K PROVIDER provides LICENSEE with copyrighted Prototype Plan Documents ("Documents") that 401K PROVIDER acquires from third-party sources and then customized for each LICENSEE. 401k PROVIDER claims U.S. Copyright status and protection for any customized version(s) of these Documents prepared by 401k PROVIDER for use by LICENSEE. LICENSEE agrees to only use and rely upon these customized and copyrighted Documents for the duration of its Agreement with 401k PROVIDER. Upon termination or expiration of this Agreement, LICENSEE may no longer rely upon or use 401K PROVIDER copyrighted and/or 401K PROVIDER-supplied Prototype Plan Documents. Upon termination or expiration of this Agreement LICENSEE’S right to use Prototype and customized Documents is revoked.

LICENSEE can continue using the customized Documents after expiration of this Agreement if LICENSEE enters into a new agreement with 401k PROVIDER under terms of service "401k Easy Docs" described in website www.401kprototype.com.

401k PROVIDER is a registered and IRS-approved Mass submitter of customized 401k Prototype Plan Documents (“Prototype Standardized Profit-Sharing Plan with CODA” IRS Determination Letter Serial Number K202645a). To comply with IRS rules and regulations for Mass Submitters, 401k PROVIDER is required to track the distribution, usage and disposition of all its customized Documents. This requirement places an obligation upon 401k PROVIDER to make reasonable efforts to track the possible usage of customized Documents by former LICENSEEs, after terminating 401K PROVIDER services.

LICENSEE agrees to cooperate with 401k PROVIDER in its obligation under IRS regulations by providing the following information to 401k PLAN PROVIDER within one (1) year of termination of 401k PROVIDER services.

If LICENSEE officially terminates its 401k plan by filing Form 5500-SF with the IRS during the calendar year following terminating 401K PROVIDER services, LICENSEE agrees to provide a copy of this filing to 401K PLAN PROVIDER.

If LICENSEE transfers the servicing of its 401k to a pension consultant, record-keeper or other third- party administrator during the calendar year following terminating 401K PROVIDER services, LICENSEE agrees to provide 401K PLAN PROVIDER with a copy of the IRS Determination Letter of the prototype plan documents used to replace 401K PROVIDER documents.

401k PROVIDER reserves the right to notify the IRS or other third parties, including publicly available online information and business review services, should the LICENSEE fail to pay past- due invoices, or provide the information necessary for 401k PROVIDER to fulfill its legal obligations as an IRS Mass Submitter.

401K PROVIDER does not warranty its customized Documents, or their adaptation to LICENSEE’S needs or requirements. 401K PROVIDER assumes no liability for the accuracy, completeness or applicability of these Documents, or their use, by LICENSEE. LICENSEE’S use of the Documents is solely at the discretion

of the LICENSEE, and at LICENSEE’S own risk. LICENSEE can, at its discretion, utilize prototype plan documents acquired from sources other than 401K PROVIDER.

LICENSEE is under no obligation to use 401K PROVIDER-supplied Documents. 401K PROVIDER, as policy, automatically adopts government-mandated amendments to the Documents. At its sole discretion 401K PROVIDER, may assist with a review Employer's existing Plan documents and consult Employer on the feasibility of restatement and administration of the Plan. 401K PROVIDER will prepare the documentation needed to establish or re- state the Plan and Trust Agreement for review by Employer's professional advisors, and update documents as required by regulation. 401K PROVIDER will prepare and update the Summary Plan Description as required by regulation.

Patents, Trademarks and Copyrights

The Software includes technology protected by US Patent Number 6041313, plus additional US Patents Pending. 401K PROVIDER claims copyright and trademark protection for all Software and copyright for all Publications and Videos. Should this Agreement be terminated for any reason, the right of LICENSEE to use 401K PROVIDER-supplied Software, Publications and Support shall be revoked. Unauthorized use of Software and/or Publications constitutes copyright infringement, subjecting violator(s) to both civil and criminal penalties under federal law.

Third-Party Communications

401k PROVIDER Communications with LICENSEE’S Third-Party Representatives.

401k PROVIDER is not obligated or required under terms and conditions of this Agreement to interact or communicate with Licenses’ designated third-party representatives or service providers directly or indirectly in writing, or directly or indirectly by phone, or directly or indirectly by joint conference calls that include the LICENSEE. Third-party representatives and third-party service providers includes (but are not limited to) the following: pension administrators, pension recordkeepers, investment custodians, attorneys, CPAs, accountants, financial advisors and brokers, payroll providers, software engineers, and all other third-party service providers the LICENSEE enlists in support of its plan. The LICENSEE and its internal administrative staff and employees are the exclusive and sole point of contact for 401k PROVIDER.

The 401k PROVIDER, at its sole discretion, reserves the right to interface and communicate with LICENSEE’S third-party service providers on a case-by-case basis. 401k Provider will provide an estimate for how much time telephone discussions and written communications will require, and provide such estimate to LICENSEE. The fee for discussions and written communications with LICENSEE’S third-party representative(s) shall be $500 per hour, with a two-hour minimum fee, payable in advance of interaction(s).

Warranties

For the duration of the current license term, 401K PROVIDER warrants to LICENSEE only that the Software shall perform consistent with the published specifications. 401K PROVIDER'S sole obligation and liability under this warranty shall be to correct any defects in the Software, in a reasonable time, to perform in accordance with the published specifications therefore. Any modifications, maintenance or other changes to the Software by the LICENSEE or its agents and employees shall void this warranty but not the

exclusions and waivers of warranties contained herein. 401K PROVIDER does not warrant that the Software will meet LICENSEE’S requirements or that its use will be uninterrupted or error-free. In the event that 401K PROVIDER fails to remedy defects in the Software, LICENSEE’S sole remedy shall be to receive a refund of the current year's license fees for the Software (not including any plan customization fee paid by LICENSEE). 401K PROVIDER warrants to LICENSEE that during the Term of this Agreement 401K PROVIDER will use diligent efforts to provide availability to licensed users of its Internet-Based Software.

LICENSEE of Internet-Based Software understands that website availability may be adversely affected by various conditions including, but not limited to, electrical interference, weather, acts of God or governmental authority, failure of equipment, and User error and the failure of other equipment, such as switches, routers and telecommunications devices not owned or controlled by 401K PROVIDER. LICENSEE of Internet-Based Software understands that periodic website service interruptions may be necessary to perform maintenance on third party networks and facilities, and that, therefore, 401K PROVIDER cannot guarantee the availability of the Internet- Based Software at all times and under all circumstances.

Disclaimer of Warranties

Except for the foregoing limited warranty, the Software is provided "AS IS." The entire risk as to the quality and performance of the Software is with LICENSEE. 401K PROVIDER, to the maximum extent permitted by applicable law, disclaims all other representations and warranties, express or implied, regarding the Software, including its fitness for a particular purpose, quality, accuracy, merchantability and non- infringement. 401K PROVIDER does not represent or warrant that the Software is free from bugs, errors or other program limitations.

401K PROVIDER has no control over LICENSEE’S use of the Software, and 401K PROVIDER does not and cannot warrant the performance or results that may be obtained by its use. 401K PROVIDER does not represent, warrant, or guarantee the accuracy and timeliness of the data or information contained in the Software and shall have no liability of any kind whatsoever to LICENSEE, or to any other party, on account of any inaccuracies in or unseemliness of the data or information. Nor does 401K PROVIDER have any obligations to LICENSEE to correct such data or information or any errors contained in the Software. Various information in the Software constantly changes, and the information may not be current or accurate. The Software should not be used without confirming research from other sources, obtaining up- to-date information, and separate analysis by the LICENSEE of his or her own particular investment or tax situation or record keeping application. The Software does not recommend or endorse any specific investment or any particular mutual fund, nor does the Software offer specific tax, legal or investment advice or strategies. 401K PROVIDER is not a financial advisor and should not be considered as such. LICENSEE is strongly advised to consult with a professional tax and/or investment advisor before establishing or investing on behalf of a 401(k) or any other retirement savings plan.

Neither this nor any other agreement shall relieve LICENSEE or other designated fiduciaries or other responsible persons providing services to the plan of any of the responsibilities or liabilities specified in

E.R.I.S.A. or the Internal Revenue Code of 1954, as amended from time to time. 401K PROVIDER shall not, at any time, under this Agreement or otherwise, act in any capacity that is or may be construed to be that of a fiduciary or investment counselor to LICENSEE’S plan. Nothing contained herein shall be construed so as to render 401K PROVIDER the Plan Administrator or Trustee.

Some states do not allow the exclusion of implied warranties, so the above exclusions may not apply to LICENSEE. In that event, any implied warranties are limited in duration to ten (10) days from the date of purchase of the Software. However, some states do not allow a limitation on how long an implied warranty lasts, so the above limitation may not apply to LICENSEE.

Limitation of Liability & Damages

IN NO EVENT SHALL 401K PROVIDER, ITS SUPPLIERS OR ITS DISTRIBUTORS BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGE, INCLUDING WITHOUT LIMITATION, LOSS OF DATA, LOST PROFITS OR COST OF COVER ARISING FROM THE USE OF THE SOFTWARE OR ANY DEFECT IN THE SOFTWARE, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY. THIS LIMITATION SHALL APPLY EVEN IF 401K PROVIDER, ITS SUPPLIERS OR ITS DISTRIBUTORS SHALL HAVE BEEN ADVISED OF THE POSSIBILITY OF ANY SUCH DAMAGE. IN PARTICULAR BUT WITHOUT LIMITATION, 401K PROVIDER, ITS SUPPLIERS AND ITS DISTRIBUTORS SHALL HAVE NO LIABILITY FOR THE LOSS OF ANY INFORMATION STORED IN OR USED WITH THE SOFTWARE.

THE MAXIMUM AGGREGATE LIABILITY OF 401K PROVIDER AND ITS SUPPLIERS FOR ANY CLAIM ARISING OUT OF USE OF THE SOFTWARE OR ANY DEFECT IN THE SOFTWARE, ON ANY AND ALL THEORIES OF LIABILITY, INCLUDING WITHOUT LIMITATION NEGLIGENCE BY 401K PROVIDER, SHALL IN ALL EVENTS BE LIMITED TO RETURN OF THE AMOUNTS ACTUALLY PAID AS THE CURRENT YEAR'S LICENSE FEES.

U.S. Government Restricted Rights

The Software is subject to the DOD FAR Supplement and is "commercial computer software." Use, duplication or disclosure of the Software is subject to the licensing restrictions set forth in this Agreement. The Software is subject to the Federal Acquisition Regulations as "restricted computer software" and its use, duplication and disclosure shall be subject to the restrictions in FAR 52.227- 14.

Miscellaneous

LICENSEE acknowledges that this Agreement is a complete statement of the agreement between LICENSEE and 401K PROVIDER, and that there are no other prior or contemporaneous understandings, promises, representations, or descriptions, regarding the Software. This Agreement does not limit any rights or remedies that 401K PROVIDER may have under trade secret, trademark, and copyright, patent or other related intellectual property laws. Representatives of 401K PROVIDER is not authorized to make modifications to this Agreement, or to make any additional representations, commitments or warranties binding on 401K PROVIDER. Accordingly, such additional statements are not binding on 401K PROVIDER and LICENSEE should not rely upon such statements. The 401k PROVIDER reserves the right to change the terms, fees, and product and service offerings described in this Agreement without prior notice to User. The validity and performance of this Agreement shall be governed by California law (without reference to choose of law principles) and all applicable Federal laws.

This Agreement is deemed entered into at Los Angeles, California, and shall be constructed as to its fair meaning and not strictly for or against either party. Any resolution of a dispute arising out of or in connection with this Agreement may only be resolved in Los Angeles, California.

Payment of Invoices

Invoices presented by 401k PROVIDER to a LICENSEE User for services, or pending services, are due and payable upon receipt. 401k PROVIDER retains the right under this Agreement to suspend services until outstanding invoices are paid in full. If services are suspended, 401k PROVIDER reserves the right to assess an additional Service Suspension & Restoration Charge of $500 for the restoration of suspended services. This Service Suspension & Restoration Charge, and any outstanding invoice charges must be paid in full by Bank Wire Transfer before suspended services are restored. PLAN PROVIDER reserves the right to require LICENSEE pay invoices by Bank Wire Transfer rather than accept payments by credit card or paper check drafts.

Late Payment Fee

401K PROVIDER reserves the right to charge a Late Payment Fee to LICENSEE for any past due amounts. The Late Payment Fee is 14%, calculated daily, of LICENSEE'S outstanding balance.

Effective Term of Agreement

This Agreement shall continue in effect for a period ending on the last day of the effective calendar year this Agreement was entered into. 401k PROVIDER reserves the right to change fees, terms, conditions, and product offerings. 401K PROVIDER reserves the right to adjust fees and suspend services without breaching or terminating this Agreement if LICENSEE fails to pay invoiced fees in accordance with this Agreement. 401K PROVIDER may terminate this Agreement if LICENSEE breaches this Agreement.

Promotion & Marketing

401K PROVIDER reserves the right to use LICENSEE’S business name, city and state in marketing literature and materials used in promoting 401K PROVIDER products and services.

Mediation & Arbitration

If a dispute (excluding copyright, patent, or trademark, or other intellectual rights infringement claims) arises from or relates to this Agreement or the breach thereof, and if the dispute cannot be settled through direct discussions, the parties agree to endeavor first to settle the dispute by mediation in Los Angeles, California, administered by the American Arbitration Association under its Commercial Mediation Rules before resorting to arbitration. Any unresolved controversy or claim (excluding copyright, patent, or trademark infringement claims) arising under this Agreement or its breach, including but not limited to any controversy concerning the meaning or interpretation of any provision of this Agreement or controversies arising from possible errors or omissions on the part of 401K PROVIDER or its agents or suppliers shall be decided by binding arbitration administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. The place of arbitration shall be Los Angeles, California. Any such

controversy or claim shall be arbitrated on an individual basis and shall not be consolidated in any arbitration with any claim or controversy of any other party.

Consistent with the expedited nature of arbitration, each party will, upon the written request of the other party, promptly provide the other with copies of documents relevant to the issues raised by any claim or counterclaim on which the producing party may rely in support of or in opposition to any claim or defense. Any dispute regarding discovery, or the relevance or scope thereof, shall be determined by the arbitrator(s), which determination shall be conclusive.

The arbitrator(s) shall not award consequential damages in any arbitration an award of exemplary or punitive damages. The arbitrator(s) may determine how the costs and expenses of the arbitration shall be allocated between the parties, but they shall not award attorneys' fees. The award shall be in writing, shall be signed by a majority of the arbitrators, and shall include a statement regarding the reasons for the disposition of any claim. Except as may be required by law, neither a party nor an arbitrator may disclose the existence, content, or results of any arbitration hereunder without the prior written consent of both parties.

Notices

Any notice required or permitted to be given by either party under this Agreement shall be in writing. Notices sent by mail shall be deemed effective three business days after deposit, postage prepaid, in the mail.

Assignment and Successors

This Agreement shall be binding and inure to the benefit of the parties hereto and their respective successors and assigns. Neither party shall assign any of its rights nor delegate any of its obligations under this Agreement to any third party without the express written consent of the other, provided that consent shall not be required in connection with the reorganization or merger of a party or the sale of such party's business or all or substantially all of its assets to a third party.

Force Majeure

Nonperformance of either party shall be excused to the extent that performance is rendered impossible by strike, fire, flood, governmental acts, orders or restrictions, failure of suppliers, or any other reason where failure to perform is beyond the control and not caused by the negligence of the non-performing party.

Waiver

The waiver by either party of a breach or right under this Agreement will not constitute a waiver of any other or subsequent breach or right.

Severability and Counterparts

If any provision of this Agreement is found to be invalid or unenforceable by a court of competent jurisdiction, such provision shall be severed from the remainder of this Agreement, which will remain in full force and effect. This Agreement may be signed in counterparts, which together constitute one instrument.

Back to top