Envestnet Embedded Advisory, Inc. Investment Management Agreement

You (“Client”) and Envestnet Embedded Advisory, Inc., a Delaware corporation (“EEA”), agree to enter into this investment management agreement (“Agreement”) pursuant to which EEA will manage the assets in an account (“Account”) that Client will establish and maintain at DriveWealth, LLC (“DriveWealth”), a registered broker-dealer. This Agreement is effective as of the day the Account is funded and able to receive trading instructions from EEA (“Effective Date”). In consideration of the mutual covenants herein, Client and EEA agree as follows:

1.    Authority; Services

1.    Authority; Services

a.    Client appoints EEA to manage the securities and other assets in the Account (which securities and assets, together with any additions and/or transfers, are referred to as the “Assets”) on a discretionary basis with full power to direct, manage and change the Assets. In particular, Client grants EEA authority to: 

i.    Buy, sell, transfer, or otherwise trade the Assets in the Account, including, but not limited to, by instructing broker-dealers, issuers or others to effect the purchase, sale, tender, exchange, conversion, issuance or redemption of Assets or other transactions with respect to any Asset in the Account; 
ii.    Receive, among other things, statements, confirmations, prospectuses and other shareholder communications, corporate actions, and account notifications relating to the Assets and the Account; 
iii.    Make withdrawals or transfers from the Account for the sole purpose of deducting the investment advisory fees owed to EEA; and
iv.    Place all orders for the purchase, sale, tender, exchange, conversion, redemption or transfer of Assets with broker-dealers, transfer agents or other market intermediaries selected by EEA or directly with issuers or other parties.
v.    Manage the Assets in the Account in accordance with the Model Portfolio (defined below) selected by Client. 
vi.    Maintain and revise the Model Portfolios, add a new Model Portfolio and/or close any Model Portfolios.

b.    Client understands and agrees that EEA will manage the Assets under this Agreement in accordance with a model portfolio strategy designed and maintained by EEA (“Model Portfolio”) as described in EEA’s Form ADV Part 2A, Appendix 1 (“Brochure”).  Each Model Portfolio will consist of exchange traded funds (“ETFs”), stocks and cash that will be managed according to a target asset allocation. Client is responsible for selecting a Model Portfolio from a menu of Model Portfolios made available by EEA following Client’s completion of an on-line questionnaire. This questionnaire will collect information related to Client’s investment objective, including investment expertise, risk tolerance, time horizon, and other financial circumstances (collectively “Client Characteristics,” as such may be amended from time to time). Based on Client’s responses to the questions on the questionnaire, EEA will recommend a Model Portfolio. Client understands the questionnaire EEA uses only considers personal financial information that is relevant to the general financial goal of building wealth.  Client also understands that Client’s responses to the questionnaire are the sole basis by which Client is mapped to a Model Portfolio and that no other information about Client is considered by EEA in recommending a Model Portfolio to Client. Individual stocks will only be included if Client selects a theme, as described in more detail below.

c.    After Client selects a Model Portfolio and the Account is funded, EEA will begin to manage the Assets (including the amount of cash in the Account) in accordance with the Model Portfolio and any written restrictions Client requests that are agreed to by EEA (including prohibitions with respect to the purchase or sale of particular securities or types of securities). If EEA determines Client’s requested restrictions are unreasonable or inappropriate, EEA may reject the request. Client understands that EEA will assess and determine the reasonableness of Client’s requested restrictions in EEA’s sole discretion and that any such request will not be adhered to unless and until EEA notifies Client of EEA’s consent to such request.  Client acknowledges that the performance of the Account may be adversely affected by the implementation of requested investment restrictions. For example, once a restriction has been established, EEA will allocate the assets that would otherwise be invested in the restricted security across the remaining positions in a client’s Account. This will result in deviations from the Model Portfolio and the Account may not perform as expected.  For the avoidance of doubt, the restriction of a security cannot be applied to the underlying holdings in an ETF or other pooled investment vehicle, and EEA will not monitor the ETF or other pooled investment vehicle for compliance with a client’s restriction.

d.    In providing investment management services under this Agreement, EEA is entitled to rely on all of the financial and other information Client provides, without any duty to verify its accuracy or completeness.  Client agrees to immediately inform EEA via the Client Portal (as defined in Section 2 below) of any change in Client’s circumstances, including, but not limited to, any change to any of the Client Characteristics. 

e.    For the avoidance of doubt, Client cannot issue individual trading instructions to EEA or to DriveWealth to purchase and/or sell specific securities.

f.    EEA shall not have any duty or obligation to advise or take any action on behalf of Client in any legal proceedings, including bankruptcies or class actions, involving securities held in, or formerly held in, the Account, or involving the issuers of such securities.

g.    Notwithstanding anything in this Agreement to the contrary, EEA shall have no authority hereunder to take or have possession of any assets in the Account or to direct delivery of any securities or payment of any funds held in the Account to itself or to direct any disposition of such securities or funds, except to Client, as directed in writing by Client, pursuant to valid legal authority, or to pay EEA’s investment advisory fees. Client understands that EEA will facilitate a Client’s instruction to transfer funds between Client’s Account at DriveWealth and accounts established by Client at other financial institutions by sending such instructions via a technology platform supported by EEA and its affiliates.

h.    EEA enables clients to select themes that are used to tilt Client’s portfolio toward Client’s interests. Client understands and agrees the stock allocation of the recommended portfolio will be utilized to invest in companies that are relevant to a particular theme and that EEA does not make recommendations on whether an investment theme is suitable for a client. Thematic investing is optional and, if chosen, will not serve as the primary objective of an investment strategy. Client understands that EEA’s investment team does not manage the thematic stock allocation with any financial return expectations. The availability of themes is subject to change, and EEA may, in its sole discretion, remove a theme from the Program (as defined in Section 2 below). Client understands that by changing or removing a selected theme from Client Account, EEA will liquidate all positions related to the existing theme and purchase new positions related to the newly chosen theme or, in the case of removing a theme, allocate the proceeds to ETFs in the Model Portfolio. In doing so, positions may be sold for a loss or incur taxable gains.

i.    Client hereby authorizes DriveWealth to follow EEA’s trading instructions concerning Client’s Assets, as well as withdrawal or transfer instructions of EEA for the sole purpose of deducting the investment advisory fees owed to EEA.  This authorization continues in full force until this Agreement is terminated. DriveWealth and EEA have agreed in writing to the limitations of EEA’s authority, notwithstanding the provisions of Client’s custodial agreement with DriveWealth that may otherwise broaden EEA’s authority. Client understands and acknowledges this arrangement. 

2.    Digital Interaction and Delivery of Advisory Services

a.    Client understands and agrees that EEA’s investment advisory services are available only through a web-based application (the “App”) that is accessible within other applications and/or websites (such as mobile banking and consumer apps). EEA has embedded its digital investment advisory services into the mobile applications of independent third parties (each, an “Embedder”). Client understands and agrees that EEA’s digital investment advisory services are delivered solely through the App available on Embedder applications (or websites) or via e-mail. 

b.    Client understands and agrees to the limitations of EEA’s digital investment advisory services, including that EEA’s advisory services are not provided in person and that Client will not be able to meet with or call someone from EEA. Client agrees that interaction with EEA generally will be via a client portal available through the App (“Client Portal”), which includes the ability to chat with personnel of EEA. Client agrees to communicate with EEA through the App. In case Client is otherwise not able to communicate with EEA via the App, Client can communicate with EEA via e-mail, by sending e-mails to EmbeddedAdvisory@envestnet.com.  If Client’s relationship with Embedder terminates, then EEA will host the App itself and will provide Client with instructions on how to access the App.

c.    Client understands that the Program involves features that are automated and do not involve direct human interaction. This includes the recommendation of the Model Portfolio, which is based on Client’s responses to the questionnaire presented through the App. The Model Portfolio recommendations are determined by an algorithm that does not consider information apart from the data that is collected. Client also understands that Client’s investment time horizon and risk tolerance are the primary considerations for the algorithm in recommending a Model Portfolio.  Client acknowledges that once Client selects a Model Portfolio Client’s Assets will be managed in accordance with the Model Portfolio until Client notifies EEA of a change in Client’s financial situation or investment objective that results in a new recommendation or a different selection by Client. This means that EEA will not automatically adjust the way it manages Client’s assets based on changes to  Client Characteristics; provided, however, Client is responsible for communicating any such changes to Client Characteristics to EEA.  Client agrees that it is Client’s responsibility to promptly inform EEA of changes to Client’s Client Characteristics.

d.    Client understands that while Client’s answers to the questions in the questionnaire are mapped to a recommended Model Portfolio, the Model Portfolios are constructed, managed, maintained and updated by investment professionals of EEA. Client also understands that the Model Portfolios are managed based on the capital market assumptions of EEA. Client understands the assumptions and limitations of the capital market assumptions used to manage the Model Portfolios.

e.    Client also understands that EEA’s investment advisory services under this Agreement are discretionary, meaning that investment and trading decisions will be made solely by EEA on behalf of Client.  Client understands and agrees that EEA’s investment advisory services are not appropriate for Client if Client wishes to consider and approve each potential security purchase and sale before a trade is placed or if Client wishes to trade securities on a ‘self-directed’ basis.

3.    Representations and Warranties

a.    Client represents and warrants to EEA as follows:

i.    Client has the requisite legal capacity, authority, and power to execute, deliver and perform his or her obligations under this Agreement. This Agreement has been duly authorized, executed and delivered by Client and is the legal, valid, and binding agreement of Client, enforceable against Client in accordance with its terms. Client’s execution of this Agreement and the performance Client’s obligations hereunder do not conflict with or violate any obligations by which Client is bound, whether arising by contract, operation of law or otherwise. 
ii.    Client is the owner or co-owner of all cash and securities in the Account, and there are no restrictions on the pledge, hypothecation, transfer, sale or public distribution of such cash or securities. 
iii.    All financial and other information provided by Client in connection with this Agreement including, but not limited to, information Client provided on Account-related documents and the questionnaire, is true and correct and may be relied upon by EEA.
iv.    Client has access to the App, the Client Portal and e-mail and is willing and able to interact with EEA solely via electronic means.
v.    Client acknowledges that the EEA is subject to certain anti-money laundering and related provisions under applicable laws, rules and regulations and are otherwise prohibited from engaging in transactions with, or providing services to, certain foreign countries, territories, entities and individuals, including without limitation, specially designated nationals and blocked persons, specially designated narcotics traffickers and other parties subject to United States government or United Nations sanctions and embargo programs (collectively “AML Laws”). Accordingly, Client represents and warrants the following and shall promptly notify EEA if any of the following ceases to be true and accurate: (a) to the best of Client’s knowledge based upon appropriate diligence and investigation, none of the cash or property that Client has paid or will pay or deposit in connection with the Account has been or shall be derived from or related to any activity that is deemed criminal under United States law, nor will any of Client’s payments or deposits in connection with this Agreement directly or indirectly contravene United States federal, state, international or other laws or regulations, including without limitation any AML Laws and (b) no contribution or payment by, or on behalf of, Client shall cause EEA or DriveWealth to be in violation of any AML Laws. Client understands and agrees that if at any time it is discovered that any of the representations in this Section 3(a)(v) are untrue or inaccurate, or if otherwise required or permitted by applicable law or regulation related to money laundering and similar activities, EEA may undertake appropriate actions to ensure compliance with applicable law or regulation, including, but not limited to, freezing or forcing a withdrawal of the Client’s cash or assets in the Account. Client agrees that EEA or its designee will perform checks to detect and prevent money laundering. If a client is identified through any of these checks, EEA will take action as deemed necessary, which could include refusal to enter into an investment advisory relationship or termination of an existing investment advisory relationship.  Client understands and agrees that EEA may share information regarding the results of its AML Law related checks with DriveWealth or other broker-dealers.

b.    Client agrees to promptly inform EEA if any of the foregoing representations or warranties cease to be accurate for any reason. Client understands and acknowledges that the failure to so inform EEA may result losses to the Account. 
 
c.    Client agrees to indemnify, hold harmless, reimburse, and defend EEA from and against any and all claims (whether asserted against any of the foregoing or otherwise), losses, damages, liabilities, demands, obligations, and expenses, including, without limitation, settlement costs and any reasonable legal, accounting and other expenses (collectively, “Losses”) incurred for defending any actions brought or threatened in writing, resulting from any claim, demand, complaint, lawsuit, action, or proceeding by a third party relating to, based on, arising out of or in connection with the failure of any representation or warranty in this Section 3 to be accurate or the failure of Client to promptly inform EEA if any representation or warranty in this Section 3 ceases to be accurate for any reason. The federal securities laws impose liabilities under certain circumstances on persons who act in good faith, and therefore nothing herein shall in any way constitute a waiver or limitation of any rights, which the undersigned may have under any federal or state securities laws.

d.    Client is a resident of the United States.  If Client opens a joint Account, then each Account holder represents and warrants that he or she is a resident of the United States.

4.    Covenants

a.    Client agrees as follows:

i.    Client acknowledges that a Model Portfolio may include only a single ETF for an asset class within the Model Portfolio, with each ETF playing a necessary role in the overall investment strategy and, therefore, Client understands and acknowledges that Client cannot exclude certain ETFs selected as part of Model Portfolio.
ii.    Client will provide EEA with complete, current, and accurate information, including information about Client’s Client Characteristics, and will promptly update such information as Client’s circumstances change.
iii.    Client agrees to use EEA’s services and the App solely for Client’s personal, non-commercial use.
iv.    Client acknowledges that EEA may require documentation verifying Client’s identity and the source of funds used to make payment or deposit to the Account. Client hereby agrees to provide such documentation as may be requested by EEA. Furthermore, Client acknowledges and agrees that EEA may release confidential information regarding Client. to government authorities, if EEA, in its sole discretion, determines that releasing such information is in the best interest of EEA or is required by applicable law.
v.    If Client is entering into this Agreement with respect to a joint Account, Client understands and agrees that the representations, warranties and agreements made herein are made on behalf of all of the joint Account holders and further agrees that each Account holder (a) is a Client; (b) has the authority to act on behalf of the joint Account and that EEA is entitled to rely upon and may accept such instructions from any one Account holder and that EEA is not required or expected to seek confirmation, consent or instruction from any other Account holder; without limiting the foregoing, each Account holder agrees that in the event that one Account holder provides instructions to EEA, even if the instructions are to terminate the Agreement and disburse all funds from the Account to such Account holder, EEA may follow such instructions without the permission of the other Account holder and will have no liability to either Account holder; (c) is jointly and severally liable for performance of the terms of this Agreement; and (d) that in the case of death of any of the joint Account holders, interest in the entire Account shall vest in the surviving Account holder(s) under the same terms and conditions of this Agreement and the surviving Account holder(s) shall promptly provide EEA with written notice thereof and any documentation reasonably requested by EEA in its management of the Account.  Both account holders also agree that if the Account becomes the subject of a dispute between Account holders, and EEA becomes aware of the dispute, EEA may refuse to disburse or allow for the termination of this Agreement without the consent of both joint Account holders and EEA shall have no liability to either Account holder.
vi.    Client understands that the investment returns on Client’s Account will vary and that there is no guarantee of positive results.  Client further acknowledges that (i) it is aware that the securities transactions in Client’s Account may lose value and Client is financially capable of bearing such losses; (ii) it has significant additional resources beyond the assets being advised on by EEA; and (iii) it has not received any written or verbal guarantees or representations of performance.  Client further understands that there is no guarantee that Client’s investment objective will be achieved.  Nor is there any guarantee of the success of any investment decision, investment strategy, or Client’s Account.
vii.    Client understands that EEA provides a digital investment advisory service and that there are significant limits on the services provided by EEA under this Agreement and the way Client can communicate with EEA.
viii.    Client understands and agrees that the Account will be managed by EEA based on the Model Portfolio selected by Client. Client further understands that if any of the information Client provides to EEA is or becomes incomplete or inaccurate, then the Account may not achieve Client’s desired investment goal or the Model Portfolio may be inappropriate for Client.
ix.    Client acknowledges that EEA cannot adequately perform its services for Client unless Client diligently performs Client’s responsibilities under this Agreement.
x.    Client agrees to provide any information and/or documentation requested by EEA in furtherance of this Agreement and to ensure that all information provided to EEA is accurate and complete. Client is solely responsible for informing EEA of changes to any information previously provided to EEA and understands that EEA manages the Assets based on the information provided.  Client agrees that EEA has no responsibility for Client’s failure promptly to provide accurate information regarding Client, the Assets or the Account.  EEA may rely upon the information furnished to it by Client or a representative (such as an attorney, accountant or other professional) of Client. EEA is not required to verify any information received from Client (or a representative of Client) and is expressly authorized to rely upon any information received therefrom. 
xi.    Client acknowledges and understands that the services to be provided by EEA under this Agreement are limited to the discretionary investment management of the Assets via a digital investment advisory service and do not include (i) investment advisory services with regard to any other assets or (ii) financial planning, legal or tax advice, or any other services.
xii.    Client agrees to take all steps necessary to enable EEA to manage the Assets in the Account, including, but not limited to, promptly signing any forms required by DriveWealth to grant EEA trading authority over the Account.

b.    EEA shall not have any liability for Client’s failure to timely inform EEA of any material change in Client Characteristics that might affect the manner in which Client’s Assets should be invested, or to provide EEA with any information as EEA may reasonably request.  EEA shall be fully protected in acting upon any notice or other writing believed by it to be genuine and to be signed or presented by the proper person(s).  EEA shall not be under any duty to make any investigation or inquiry as to any statement contained in any such writing but may accept the same as conclusive evidence of the truth and accuracy of the statements therein contained.

c.    Client agrees to indemnify, hold harmless, reimburse, and defend EEA from and against any and all claims (whether asserted against any of the foregoing or otherwise), losses, damages, liabilities, demands, obligations, and expenses, including, without limitation, settlement costs and any reasonable legal, accounting and other expenses (collectively, “Losses”) incurred for defending any actions brought or threatened in writing, resulting from any claim, demand, complaint, lawsuit, action, or proceeding by a third party relating to, based on, arising out of or in connection with the failure of Client to perform any of the covenants in this Section 4. The federal securities laws impose liabilities under certain circumstances on persons who act in good faith, and therefore nothing herein shall in any way constitute a waiver or limitation of any rights, which the undersigned may have under any federal or state securities laws.

5.    Custody of Assets and Order Placement

a.    Client will appoint DriveWealth to execute securities transactions and serve as the custodian for the Account pursuant to a separate Customer Brokerage and Custody Agreement. Client understands that it is required to direct EEA to use DriveWealth to serve as the custodian and execute securities trades. Client understands that not all advisers require their clients to direct brokerage through a specified broker-dealer and that there are potential disadvantages in using a broker-dealer selected by an investment adviser.  In particular, Client may be subject to certain fees and charges that Client would not pay if Client were not required to use DriveWealth.  In addition, Client will not be able to shop around for another broker-dealer that could provide better pricing or execution services. Similarly, EEA will not be able to select other broker-dealers on the basis of price or any other attribute.  Client understands that, as a result, directing EEA to use DriveWealth to execute transactions for the Account may result in higher transaction costs and/or less favorable net prices on securities trades than would be the case if EEA were able to shop around and select broker-dealers to execute trades. Client also understands that DriveWealth provides certain trading and operational capabilities that are beneficial to Client and to EEA, such as the ability to buy and sell fractional shares of securities and that help EEA provide its investment advisory services.  

b.    At no time will EEA accept, maintain possession of, or have custodial responsibility for Client’s assets or securities. Client assets and securities will be delivered between Client and DriveWealth only.

c.    Client understands and agrees that EEA has sole discretion regarding the manner in which orders are placed for the purchase and sale of securities for Client’s Account. Client further understands and agrees that the prices of securities purchased and sold for the Account may be less favorable than the prices obtained for the same securities in similar transactions for other client accounts managed by EEA or by other investment advisers.
    
d.    Client understands and agrees that the Account’s composition and performance may be different for a variety of reasons from those of other client accounts managed by EEA. EEA shall not have any responsibility for obtaining for the Account the best prices or any particular commission rates.

e.    EEA has engaged the custodian to provide execution and clearing services to our clients based on several factors including, but not limited to, experience, pricing, financial strength, reputation, execution capabilities, quality of service, and ability to integrate with EEA’s digital program. The custodian also provides access to fractional share trading capabilities that allow EEA to lower the Account minimum requirement for its services and provide clients with access to portfolio diversification by investing smaller amounts across a wide range of holdings. EEA will periodically evaluate the execution performance of the custodian to determine whether its services remain suitable for the Program.

f.    Although each client Account is individually managed, EEA may purchase or sell the same securities for multiple clients at the same time on a discretionary basis. Client understands that in these instances, EEA may aggregate contemporaneous transactions in the same securities for clients. EEA aggregates trades at regular intervals throughout the day and considers all trades in a particular interval to be contemporaneous. When it does so, participating Accounts are allocated the resulting securities or proceeds on an average price basis and the associated transaction expenses are allocated on a pro-rata basis. Client agrees that while combining orders in this way often is, over time, advantageous to all participants, the average price resulting from any particular aggregated transaction could be less advantageous to Client than if Client had been the only participant in the transaction or had completed its transaction in the security before the other participants.

g.    Client understands that orders placed in the Client Account will either be for whole shares or fractional shares, depending on the circumstances (e.g. cost of the security, dollar amount traded). Fractional share orders will be executed by DriveWealth on a principal basis, who will execute the fractional share order against its principal facilitation account. Client understands and agrees that fractional shares are non-transferable and, in the event a client wishes to transfer Account assets to another financial institution, the fractional share positions may need to be sold for cash proceeds to be transferred instead, which may be a taxable event. In addition, any dividends payable to a fractional share position must be greater than $0.01 in order to be received.

h.    Client understands and agrees that all uninvested cash in Client Account will be invested in a cash sweep program made available by the custodian and selected by EEA. The current sweep program being utilized for the Account is described in EEA’s Brochure. Client understands that the cash sweep program may be changed by EEA without advanced notice to Client. A more detailed description of the cash sweep program and its features can be found in Client’s agreement with the custodian.

6.    Confidentiality

Except as required by law or requested by regulatory authorities, (a) EEA agrees to maintain in strict confidence all of Client’s non-public personal and financial information that Client furnishes to EEA, except for information that Client explicitly agrees to share publicly, and (b) Client agrees to maintain in strict confidence all investment advice and other non-public information that Client acquires in connection with the Account. Client agrees that Client shall not use investment recommendations or other confidential information Client receives from EEA for any commercial purpose, including, but not limited to, developing a service that competes with EEA’s services. Client acknowledges receipt of and consents to EEA’s Privacy Policy. Client understands, acknowledges, and agrees that Client can opt-out certain portions of the EEA Privacy Policy at any time; however, if Client does opt out, EEA may choose to terminate this Agreement. Client acknowledges that all information furnished by Client to EEA will be treated as confidential, but Client hereby consents to the disclosure of information about Client (i) with affiliates of EEA in connection with providing and/or enhancing the services provided to Client and (ii) with DriveWealth or other third parties in order to provide the services hereunder or to such parties as is otherwise required or permitted by applicable law.

7.    Program Fee

a.    EEA charges Client an annual “Program Fee” of 0.50% of the value of the assets in the Account for the investment advisory services provided by EEA and the brokerage, clearing, and custodial services provided by DriveWealth.  Such type of fee for investment advisory and brokerage, clearing and custodial services is known as a “wrap fee.” EEA will retain a proportional amount of the Program Fee for its services based on the agreement it has with DriveWealth. The costs of DriveWealth’s services provided in relation to EEA’s investment advisory services are negotiated by EEA and DriveWealth.

b.    Client agrees that the Program Fee will be automatically deducted from the cash balance held in Client’s Account and paid monthly in arrears based on an Account’s average assets under management over the course of each month. Typically, the Program Fee for a month is deducted around the 10th day of the following month. Program Fees are calculated using valuations obtained from DriveWealth. In the event there is insufficient cash to cover the fee deduction, EEA will sell securities held in Client’s Account to raise cash. The amount of the Program Fee will be calculated as a percentage of total assets, including cash, held in a client’s Account. If advisory services have been provided for less than one month, the Program Fee will be pro-rated based on the number of days Client’s Account was open during the month.

c.    Client understands that the Program Fee does not include management fees and other internal operating expenses charged by ETFs, mutual funds and other pooled investment vehicles held in Client’s Account. In addition to the Program Fee, Client will be responsible for any fees imposed by DriveWealth that are not for the brokerage, clearing, and custodial services paid for by the Program Fee. These fees include, but are not limited to, withdrawal and administrative request fees, transfer fees, and miscellaneous charges related returned checks, stop payment notices, requests for paper trade confirms and Account statements, requests for tax documents, fees or expenses for optional brokerage services or products, charges imposed by law, transfer taxes, margin interest, exchange or similar fees charged by third parties, and electronic fund, wire and other account transfer fees.

d.    Client understands that DriveWealth will also pass through certain regulatory fees that are charged on a per transaction basis. EEA is responsible for paying these charges, which creates a financial incentive for EEA to not trade in client Accounts.  Client consents to this conflict of interest.

e.    Client understands that the total cost of services paid for via the Program Fee may be more or less than the cost of purchasing investment advisory and brokerage, clearing, and custodial services separately. The relative cost of the Program depends on such factors such as the cost of the services provided separately, expected trading activity, commission rates, and value of the discretionary advisory services provided, which includes access to professional investment advice for selecting, monitoring, and periodic rebalancing of securities in Client’s Account.  Client also understands that the cost of EEA’s services (and the brokerage, clearing, and custodial services provided by DriveWealth) is more than what certain other investment advisers charge for such bundle of services.

f.    Client understands that EEA will compensate DriveWealth for its services. The fee to DriveWealth is tiered based on the total aggregated value of assets held in client accounts, and does not include cash. The rate for each tier decreases as total assets increase. The Program Fee, however, is not tiered and includes cash in its calculation. This creates an incentive for EEA to increase the amount of client assets it manages and the cash held in client accounts so that it retains a higher portion of the Program Fee.  Client also understands that EEA mitigates this conflict by following a policy that is designed to hold an estimated up to 5% cash level in client portfolios in order to cover fees and facilitate trading in an efficient manner. Client consents to this conflict of interest.

g.    EEA will promptly notify Client of any change in the Program Fee. An increase in the Program Fee will be effective for the Account starting in the next month that begins at least 30 days after EEA sends or posts such notice. Any reduction in the Program Fee will be effective for the Account starting in the next month following its reduction.

h.    If this Agreement is terminated on any date other than the last business day of the month, Client shall pay any outstanding aggregate daily fees for the period from the day immediately following the last day of the last calendar month for which Client has paid, through the effective date of such termination.  If, for any reason, there is insufficient cash available in the Account to cover the Program Fees at the time they are charged, EEA, in its sole discretion, may cause Securities in the Account to be liquidated to allow the Program Fee to be deducted from the Account.

i.    EEA reserves the right, in its sole discretion, to reduce or waive the Program Fee for certain client accounts for any period of time determined by EEA. In addition, Client agrees that EEA may waive its fees for the accounts of clients other than Client, without notice to Client and without waiving its fees for Client. In exercise of its sole and absolute discretion EEA may amend or terminate any reduction or waiver of the Program Fee. EEA will promptly notify Client of any increase or decrease in the reduction or waiver of the Program Fee. A change in the waiver or reduction of the Program Fee will be effective for the Account starting in the next month that begins at least 30 days after EEA sends or posts such notice.

8.    Minimum Account Size; Contributions 

a.    Client is required fund the Account with at least $500 in order to enter into an investment advisory relationship with EEA.  If Client takes a withdrawal from the Account that causes the Account balance to drop below $500, then EEA will terminate the investment advisory relationship with Client in accordance with Section 11 below and liquidate the Account holdings, deliver the proceeds of the liquidation to Client, and close the Account.

b.    Client understands that Client can fund the Account solely with cash and may not transfer securities into the Account. 

c.    Client understands that EEA manages Client Account on a discretionary basis, meaning trading decisions are made by EEA pursuant to the discretionary authority granted by Client. The decision to trade in the Account may result from a Client-related action, such as a request for a withdrawal or contribution. EEA will seek to process these types of requests the same day if they are received during market hours on a business day. However, the timing of orders will ultimately be subject to EEA’s trading policies and rebalancing methods. If cash flows result in allocations that deviate from the Model Portfolio target allocation, trades will be placed in Client’s Account to realign positions out of drift tolerance to raise cash or invest excess cash. Client understands that Client will be unable to place orders for particular securities or otherwise direct trading in the Account.

9.    Limitation of Liability and Indemnification

a.    To the extent permitted under applicable law, Client understands and agrees that EEA will not be liable to Client for any losses, expenses, damages, liabilities, charges and claims of any kind or nature whatsoever (including without limitation any legal expenses and costs and expenses relating to investigating or defending any demands, charges and claims) (collectively, “Losses”) incurred by Client with respect to the Account, except to the extent that such Losses are actual losses of Client that are the direct result of a breach of fiduciary duty by EEA. Without limitation, EEA shall not be liable for Losses resulting from or in any way arising out of (i) any action of Client or its agents, (ii) force majeure or other events beyond the control of EEA, including without limitation any failure, default or delay in performance resulting from computer or other electronic or equipment failure, unauthorized access, government restrictions, suspension of trading, war, strikes, failure of common carrier or utility systems, breakdown in communications systems (including, but not limited to, the Internet) not reasonably within the control of EEA, severe weather or other causes commonly known as “acts of god”, or (iii) general market conditions unrelated to a breach of fiduciary duty by EEA.

b.    Client shall reimburse, indemnify, defend and hold harmless EEA, its affiliates and their directors, officers, shareholders, employees and any person controlled by or controlling EEA from and against any and all Losses relating to this Agreement or the Account arising out of any misrepresentations or act or omissions or alleged act or omission on the part of Client, except if such Losses are the direct result of EEA’s breach of fiduciary duty in the performance of EEA’s duties.

c.    Notwithstanding anything in this Section 9 or otherwise in this Agreement to the contrary, nothing herein shall constitute a waiver or limitation of any rights that Client may have under any federal or state securities laws, which rights may arise even if EEA’s acts or failure to act hereunder does not constitute a breach of EEA’s fiduciary duties in the performance of EEA’s duties.

10.    Proxies and Corporate Actions

Client agrees that EEA will not vote proxies on behalf of Client or give advice to Client regarding the voting of proxies and that Client is responsible for voting proxies relating to securities held in the Account.  Client will receive proxy statements from DriveWealth.

Client acknowledges and agrees that EEA will be sent notifications for corporate actions unrelated to proxies. These corporate actions include, but are not limited to, tender offers, rights issues, and exchange offers. Client hereby authorizes EEA to provide instructions regarding these corporate actions on Client’s behalf. Unless otherwise requested by Client, EEA will not be obligated to provide information related to these notifications and instructions. 

11.    Termination; Withdrawals

a.    This Agreement may be terminated by either party with or without cause by providing notice to the other party, which notice shall be provided by Client to EEA via the Client Portal and by EEA to Client via e-mail to Client at the Client E-Mail Address.

b.    Client understands and agrees that upon termination of this Agreement for any reason EEA will promptly liquidate all holdings in the Account. Subject to Section 9 above, EEA shall not be liable to Client for any consequences of such liquidation, including any adverse tax consequences incurred. Client will receive the proceeds of the liquidated portion of the Account net of the Program Fee due.  Client is solely responsible for all taxes payable, all losses realized and any commissions or other transaction charges incurred in connection with any liquidation of securities that may occur in connection with termination of the Account.  Termination of this Agreement shall not affect the validity of any action previously taken under this Agreement or any liabilities or obligations incurred prior to termination. Accordingly, EEA may retain assets in Client’s Account sufficient to effect any open and unsettled transactions or pay any fees or charges owed.  

c.    The provisions of Sections 3(c), 4(b), 6, 9, 11(b), 13, 15, 16, 17, 19, 20, 21, 22, 23, and 24 shall survive termination of this Agreement.

d.    Client may withdraw all or part of the Account by notifying EEA at any time, provided that any partial withdrawals comply with the required Account minimum set forth in Section 8 above. 

12.    Account Statements

Client will receive account statements via electronic delivery from DriveWealth, which are the official records of the Account. EEA may also provide information about the Account from time to time.

13.    Independent Contractor

EEA is and will hereafter act as an independent contractor and not as an employee of Client, and nothing in this Agreement may be interpreted or construed to create any employment, partnership, joint venture or other relationship between EEA and Client. Client understands that EEA and DriveWealth are unaffiliated companies and EEA is not responsible for the acts or omissions of DriveWealth. 

14.    Assignment

This Agreement may not be assigned by EEA, within the meaning of the Investment Advisers Act of 1940, as amended (“Advisers Act”) without the prior consent of Client, which consent shall be deemed to have been given by Client if Client fails to deliver to EEA a written objection to such an assignment within thirty (30) days of notification thereof.  If no written objection is received within such time period, the proposed assignee will continue the advisory services of EEA. This Agreement may not be assigned in whole or in part by Client without first obtaining the express written consent of EEA, which consent shall not be unreasonably withheld.  Any assignment not complying with the terms of this paragraph shall be null and void.  In the event of a proper assignment, this Agreement shall inure to the benefit of and be binding upon each of the parties and their respective successors, assigns, heirs, executors, administrators, trustees, and legal representatives.

15.    Governing Law

This Agreement shall be governed exclusively by and construed and interpreted in accordance with the Advisers Act, the U.S. Federal Arbitration Act, federal arbitration law, and the laws of the State of Illinois, excluding its provisions on conflicts or choice of laws. Except as otherwise expressly set forth in Section 17 of this Agreement below, any legal action or proceeding arising under this Agreement shall be brought exclusively in courts located in Cook County, Illinois or federal court in Cook County, Illinois, and the parties hereby irrevocably consent to the personal jurisdiction and venue therein.

16.    Arbitration

Any dispute, claim or controversy arising out of or relating to the advisory services provided by EEA, this Agreement or the breach, termination, enforcement, interpretation, or validity thereof, including the determination of the scope or applicability of this Agreement to arbitrate (each a “Dispute”), shall be resolved solely by binding, individual arbitration rather than in court (including via a class, representative or consolidated action or proceeding). Client and EEA each further agree that the U.S. Federal Arbitration Act governs the interpretation and enforcement of this Agreement, and that each party is waiving the right to a trial by jury or to participate in a class action. This arbitration provision shall survive termination of this Agreement.

a.    Exceptions. As limited exceptions to mandatory arbitration as set forth in this Section, the parties each retain the right to seek injunctive or other equitable relief from a court to prevent (or enjoin) the infringement or misappropriation of intellectual property rights.

b.    Conducting Arbitration and Arbitration Rules. The arbitration will be conducted by the American Arbitration Association (“AAA”) under its Consumer Arbitration Rules (the “AAA Rules”) then in effect, except as modified by this Agreement. The AAA Rules are available at www.adr.org or by calling 1-800-778-7879. A party who wishes to start arbitration must submit a written Demand for Arbitration to AAA and give notice to the other party as specified in the AAA Rules. The AAA provides a form Demand for Arbitration at www.adr.org.

c.    If Client has a claim for U.S. $10,000 or less, Client may choose whether the arbitration will be conducted solely on the basis of documents submitted to the arbitrator, through a telephonic or video-conference hearing, or by an in-person hearing as established by the AAA Rules. If Client’s claim exceeds U.S. $10,000, the right to a hearing will be determined by the AAA Rules. Any arbitration hearings will take place in Chicago, Illinois, unless the parties both agree in writing to a different location. Client and EEA agree that the arbitrator shall have exclusive authority to decide all issues relating to the interpretation, applicability, enforceability, and scope of the terms of this Agreement.

d.    Arbitration Costs. Payment of all filing, administration and arbitrator fees will be governed by the AAA Rules.

e.    Effect of Changes on Arbitration. EEA reserves the right to modify this Section 16 at any time upon 30 days’ written notice to you. Any such modification shall be prospective and shall not affect previously filed claims. By continuing to use the investment advisory services provided by EEA, you agree to and accept all terms and conditions of any modifications.

f.    Class Action Waiver. Client AND EEA AGREE THAT EACH MAY BRING CLAIMS AGAINST THE OTHER ONLY IN ITS INDIVIDUAL CAPACITY, AND NOT AS A PLAINTIFF OR CLASS MEMBER IN ANY PURPORTED CLASS OR REPRESENTATIVE PROCEEDING. Further, if the Dispute is resolved through arbitration, the arbitrator may not consolidate another person's claims with Client’s claims and may not otherwise preside over any form of a representative or class proceeding. If any of the specific provisions within this Section are found to be unenforceable, the remainder of this Section shall not be affected thereby and, to this extent, the provisions of this Section shall be deemed to be severable. If there is a final judicial determination that any particular claim (or a request for particular relief) cannot be arbitrated in accordance with this Section, then only that claim (or only that request for relief) may be brought in court. All other claims (or requests for relief) remain subject to this Section.

17.    EEA and Client Communications

(a)    Client agrees to send (and EEA agrees to accept) all documents and communications from Client (or Client’s representative) including, but not limited to Client authorizations, directions, instructions, notifications, requests, as well as all other correspondence (collectively, “Communications”) via the Client Portal or to the following EEA e-mail address: EmbeddedAdvisory@envestnet.com.  EEA shall be fully protected in relying upon any such Communications.

(b)    Client agrees to accept (and EEA agrees to send) all Communications from EEA, including, but not limited to, all required regulatory notices and disclosures (including EEA’s Brochure, Form CRS and privacy policy), at Client’s e-mail address specified on the Client Portal (“Client E-Mail Address”).  Client agrees that EEA may rely upon and send Communications to such Client E-Mail Address provided by Client, until Client informs EEA to use a different Client E-Mail Address pursuant to the terms of this Agreement. EEA shall be deemed to have delivered a Communication to Client when such Communication is electronically delivered to the Client E-Mail Address (including upon delivery of an e-mail to the Client E-Mail address advising Client that a document is available, so long as such e-mail contains a link to the document or to a page where the document is located).

(c)    Client represents and warrants that Client has a device with access to the Internet, the ability to receive and open e-mail and corresponding electronic documents in pdf, word, http or plain text format, and the ability to read, retain and print any document received from EEA.  Client also represents and warrants that it has access to the App, including the Client Portal.

(d)    By executing this Agreement, Client releases and holds EEA harmless from, and agrees to defend and indemnify and hold EEA harmless against, any and all claims and/or damages of whatever kind resulting from EEA’s transmission and/or delivery of Communications to Client’s Client E-Mail Address, provided EEA has correctly addressed the transmission to Client. 

(e)    Any communication or notice required to be delivered or provided by one party to the other party hereunder will be deemed “in writing” if it is in writing sent as specified in this Section 17.  In connection with matters related to this Agreement and the services to be performed by the parties hereunder, each party agrees that (i) a signature, contract, or other record in electronic form will have the same legal effect, validity, and enforceability as a signature, contract, or other record in written or non-electronic form; and (ii) a contract formed by means of an electronic signature will have the same legal effect, validity, and enforceability as a contract formed by means of a written signature.  For example, when an individual authorized to act on behalf of a party clicks on an “I agree,” “I consent” or other similarly worded “button” or entry field with a mouse, keystroke, or another computer device and causes evidence of such agreement or consent to be transmitted electronically to the other party, such party will be deemed to have executed and delivered that agreement or consent.

(f)    Client understands and agrees that by entering into this Agreement, Client will be agreeing to do business with EEA solely on an electronic basis and that Client will receive online versions rather than paper copies of all documents relating to this Agreement.  Client agrees to use the App and Client Portal to communicate with EEA and request changes or transactions related to the advisory services provided under this Agreement. Client understands and agrees that it will not be able to make changes, interact with EEA or receive documents via paper.

(g)    Client understands and agrees that Client may incur charges from Internet service providers and local telephone or cable companies to access the Internet. These costs are Client’s responsibility.

18.    Client Acknowledgments

(a)    Client agrees to advise EEA of any event that may affect Client’s authority to execute, deliver, or perform under this Agreement or the validity of this Agreement.
(b)    Client has made an independent determination to enter into an investment advisory relationship with EEA based on Client’s financial situation, investment objectives, investment time horizon and risk tolerance.
(c)    Client understands that EEA is not making an account type recommendation and has decided that forming a discretionary investment advisory relationship instead of opening a self-directed brokerage account meets Client’s investment needs.
(d)    Client understands that EEA’s investment advisory services are designed for clients that have a long-term investment objective and that the withdrawal of assets from the Account may impair achievement of Client’s investment objective.
(e)    Client understands that the statements and confirmations provided by DriveWealth constitute the official record of the value of the Assets in the Account.
(f)    Client understands and agrees to abide by the terms of the End User License Agreement that is available on the App, as such may be amended time to time by EEA.  The End User License Agreement is hereby incorporated by reference into this Agreement.
(g)    Client understands and acknowledges the importance of reviewing the information provided in confirmations, Account statements, and any performance reports provided and agrees to immediately inform EEA of any errors.
(h)    Client acknowledges receiving and reading a copy of (i) EEA’s Brochure (ii) the “Brochure Supplement” covering members of the investment team and (iii) EEA’s Form CRS. Client understands the investment approach, related risk factors and the fees and costs associated with EEA’s investment advisory services.  Client also understands the conflicts of interest set forth in the Brochure and consents to such conflicts.
(i)    From time to time in the course of its investment advisory activities, EEA may come into possession of non-public material information about securities that cannot be divulged or acted on for other clients. Client agrees that if EEA obtains information about a security or its issuer that EEA may not lawfully use or disclose, EEA shall have no obligation to disclose the information to Client or use such information for Client’s benefit.
(j)    Client agrees that EEA may reject instructions from Client if, in EEA’s reasonable judgment, such instructions (i) are not consistent with the terms of this Agreement, or (ii) if implemented, would violate any applicable law, rule, or regulation.
(k)    Client understands and acknowledges that dividends and capital gains may be paid in cash or reinvested into the Client’s Account at EEA’s discretion.
(l)    Client acknowledges and understands that the services to be provided by EEA under this Agreement are limited to the discretionary investment management of the Assets and do not include (i) investment advisory services with regard to any other assets or (ii) financial planning, legal or tax advice, or any other services.
(m)    EEA does not guarantee that access to the Internet will be available while utilizing our services. As noted above, the App is available through various unaffiliated Embedder websites or applications. While this facilitates access to the App, the Embedder is not responsible for the App or any of EEA’s services, and any questions related to the App should be directed solely to EEA. Likewise, EEA is not responsible for the acts or omissions of Embedder.
(n)    Client will not be assigned to a financial professional for the management of their Account and will instead be provided with access to a team of representatives via the App’s chat function. Individuals on this team are available to answer questions but do not manage Client’s Account or otherwise provide investment advice.
(o)    Client understands that EEA’s investment advisory services are limited in scope and only appropriate for meeting a general goal of building long-term wealth and are not designed to achieve other goals. The Model Portfolios recommended by EEA consist solely of ETFs and stocks (and a target allocation of 5% to cash).

19.    Severability and Amendment

The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any and all other provisions hereof. Client agrees that EEA may amend this Agreement from time to time, which amendment(s) will become effective and applicable to Client thirty (30) days after being transmitted if Client continues to accept investment management services from EEA; such acceptance of investment advisory services shall constitute Client’s consent(s) to the amendment. No amendment shall be enforceable against EEA unless it is in writing and signed by an authorized person of EEA.

20.    Waiver or Modification of Condition or Obligation

EEA’s waiver or modification of any condition or obligation hereunder shall not be construed as a waiver or modification of any other condition or obligation, nor shall EEA’s waiver or modification granted on one occasion be construed as applying to any other occasion.

21.    Entire Agreement

This Agreement is the entire agreement of the parties regarding the subject matter hereof and supersedes all prior or contemporaneous written or oral negotiations, correspondence, agreements, and understandings (including without limitation any and all preexisting client account agreements, which are hereby cancelled). However, the parties may choose to enter into separate agreements between them regarding different subject matters.

22.    No Third-Party Beneficiaries

Neither party intends for this Agreement to benefit any third party not expressly named in this Agreement.

23.    Death, Disability, or Incompetency

Client’s death, disability or incompetency will not automatically terminate or change the terms of this Agreement. However, Client’s executor, guardian or attorney-in-fact may terminate this Agreement by giving written notice to EEA. In addition, Client recognizes that upon the death, disability or incompetency of Client, DriveWealth may not permit any further Account transactions until such time as any documentation required is provided to it.

24.    No Exclusivity

(a)    The investment advisory services of EEA provided hereunder are not exclusive, and EEA is free to render similar services to others so long as its services hereunder are not impaired thereby.  Persons engaged in performing EEA’s duties hereunder may not devote their full time to such services, and nothing hereunder shall be deemed to limit or restrict the right of EEA to engage in or devote time and attention to other businesses or to render services of whatever kind or nature. 

(b)    Client understands that EEA has investment responsibilities, renders investment advice to, and performs other investment advisory services for, other individuals (“Other Accounts”).  Client also acknowledges and agrees that EEA and its affiliates (and their respective partners, directors, officers, agents and employees) may buy, sell, or trade in any securities for their own respective accounts (“Affiliated Accounts”).  Client agrees that EEA and its affiliates may give advice or exercise investment responsibility and take such other actions with respect to Other Accounts and Affiliated Accounts that may differ from the advice given or the timing or nature of action taken with respect to Client’s Account.

(c)    Client also understands that Other Accounts and Affiliated Accounts may at any time, hold, acquire, increase, decrease, dispose of, or otherwise deal with positions in securities in which Client’s Account may have an interest from time to time, whether in transactions which involve Client’s Account or otherwise.  Client acknowledges and agrees that EEA has no obligation to purchase for Client’s Account a position in any security that Other Accounts or Affiliated Accounts may acquire, and that Client’s Account shall have no first refusal, co-investment or other rights in respect of any such investment.

25.    Section Headings  

Section headings are for convenience only and shall have no substantive effect.

26.    Counterparts  

This Agreement may be executed in any number of counterparts, each one of which shall be deemed to be an original.

 [Confirmation Suppression Election

By signing below, Client elects not to receive mailings of immediate transaction confirmations, and, instead, to receive all required confirmation information via quarterly statements.  Client understands that: (i) Client may rescind this election at any time, (ii) Client is not paying an additional or higher fee related to this election, and (iii) this election is not a condition to entering into or continuing an investment advisory relationship with EEA.  To make this election, please sign below.

Client Signature
X    Date
Joint Owner Signature
X    Date
]

[Standing Authorization

By signing below, Client hereby grants EEA the limited authority, upon Client’s instruction to EEA, to instruct DriveWealth to transfer assets from the Account to Client’s identically registered account(s) held at DriveWealth, if any, and Client authorizes DriveWealth to accept instructions from EEA regarding such transfers.  By signing below, Client also hereby grants EEA, upon instruction from Client, the limited authority to instruct DriveWealth to remit funds or securities in the Account to Client at Client’s address of record with DriveWealth, and Client also authorizes DriveWealth to accept instructions from EEA regarding such withdrawals.  This authorization does not authorize EEA to open an account on Client’s behalf or to designate or change Client’s address of record.

Client acknowledges that EEA will accept Client’s future instructions to transfer and/or withdraw funds from the Account according to the above authorization(s).  Client agrees to indemnify and hold harmless EEA, its affiliates, and their directors, officers, employees, and agents from and against all claims, actions, costs, and liabilities, including attorney fees, arising out of or relating to their reliance on this Standing Authorization.]

IMPORTANT NOTICE REGARDING ARBITRATION: BY AGREEING TO THIS INVESTMENT MANAGEMENT AGREEMENT, YOU ARE AGREEING TO RESOLVE ANY DISPUTE BETWEEN YOU AND EEA THROUGH BINDING, INDIVIDUAL AND PRIVATE ARBITRATION RATHER THAN IN COURT. PLEASE REVIEW SECTION 16 OF THIS AGREEMENT CAREFULLY FOR DETAILS REGARDING THE WAIVER OF YOUR RIGHT TO RESOLVE DISPUTES IN COURT IN FAVOR OF PRIVATE ARBITRATION.

 

SIGNATURES: (All account owners must sign exactly as the Account is titled).

Client Signature
X    Date
Joint Owner Signature
X    Date