Makara InvestmentAdvisory Agreement
THIS INVESTMENT ADVISORY AGREEMENT (this “Advisory Agreement”) is effective as of the date of execution between Argonaut Asset Management LLC dba Makara, a corporation organized under the laws of Delaware (the “Adviser” or “Makara”), and you, the individual or institutional investor (the “Client” and together with the Adviser, the “Parties”) named on the Online Customer Assessment (the “Customer Assessment”). On March 2, 2022, Adviser was acquired by Betterment Holdings, Inc. (“Betterment”), and is a wholly-owned subsidiary of Betterment.
In consideration of the mutual covenants contained in this Advisory Agreement, the Parties agree as follows:
The Client appoints the Adviser as investment adviser to manage the assets placed by the Client in the Client's (the “Account”) at the Custodian (as defined below), and the Adviser accepts such appointment.
The Account will consist of fiat and cryptocurrency assets (“Crypto Assets”) that the Client, from time-to-time, places under the investment management of the Adviser and Crypto Assets and fiat assets (together, “Assets”) that become part of the Account as a result of any transactions or trades described below. The Client represents that it is and will be the owner of all assets it places or will place in the Account.
The Adviser is an investment adviser registered with the Securities and Exchange Commission (the “SEC”) that maintains a crypto asset investment platform (the “Platform”) that allows Clients investment exposure to Baskets (the “Baskets”) of Crypto Assets that are managed by the Adviser to reflect different investment themes, as described in https://makara.com/baskets (the “Basket Descriptions”).
The Baskets each include a range of Crypto Assets that (a) are supported by one or more custodians retained by the Adviser and (b) the Adviser has a reasonable basis to believe are freely tradable. The Adviser may rely on legal representations of the issuer of the Crypto Asset in making this determination and will have no liability to Clients for this determination. Adviser has retained Gemini Trust Company, LLC (the “Custodian”) a New York state registered trust company. By entering into this Advisory Agreement, Client agrees that Client has received and accepted the Gemini User Agreement (available at https://www.gemini.com/legal/user-agreement#section-welcome-to-gemini) which is a legal agreement between Client and Custodian, and may impose important limitations on the circumstances and degree of the Custodian's liability. Client agrees to be bound by the terms and conditions of the Gemini User Agreement in their entirely.
The Adviser provides investment advisory services exclusively through an interactive web platform and mobile application.
As a part of account creation, Clients must provide the Adviser information about their total investable assets, risk tolerance for their investment, and investment. Clients may then choose one or more model portfolios (“Baskets”) based on their investment preferences and adjust allocations of their Baskets. Makara does not recommend specific baskets but provides Clients with information about the baskets to inform their decision-making. Once Clients select their Baskets, Clients may re-allocate their Accounts at will through a portion of the platform dedicated to the Client's Account (the “Dashboard”). Clients can also indicate to the Adviser any particular Crypto Assets that should not be traded in their accounts. Clients invest directly in the Crypto Assets that make up each Basket. Clients may also re-allocate their Accounts at any time.
The Adviser will deem allocations to a Crypto Asset as a request from the Client for the Adviser to buy or sell Crypto Assets to reach and maintain the requested allocation over time.Rebalancing
As the value of a Client's investments fluctuate, the Crypto Assets in their chosen Baskets may diverge from originally assigned investments. The Adviser will automatically rebalance the Baskets in accordance with each Basket's predetermined schedule, as described on the Platform. A programmatic rebalance may result in the addition of one or more Crypto Assets, the removal of one or more Crypto Assets, or changes to the relative holdings of each Crypto Assets within a Basket. Clients may not opt-out of a programmed rebalance. The Adviser will undertake to notify clients of any additions or deletions of Crypto Assets from a Basket. Clients may withdraw their allocation from any Basket or Crypto Assets if they do not wish to hold the rebalanced Basket and reallocate to other Crypto Assets. In this situation the client's Account holdings could diverge significantly from the rebalanced Baskets over time. The Adviser manages Client Accounts and the Baskets using proprietary software owned and operated by the Adviser. Rebalances are executed programmatically using the Adviser's software.Account Maintenance and Trade Execution
The Adviser's proprietary algorithm also uses system-generated checks to monitor for inconsistencies and red flags in trading. Whenever the Adviser places a trade, the system compares the price at execution to prices listed on other exchanges to confirm whether there is any significant price disparity and/or whether there is unusual trading activity (e.g. unusually high trade volume). Makara's proprietary algorithm also uses system-generated checks to monitor for inconsistencies and red flags in trading.
The Adviser reserves the right to delay execution of trades in the event that unusual activity is detected in order to determine the validity of the trade or allocation request. If such situation arises, the Adviser will attempt to provide notice to the Client of the reason for the delay. The Adviser will not delay or attempt to delay any trades based on any opinion or estimation regarding the profitability, market price predictions or projected outcome of the trade.
Once the Client opts to invest through one or more Baskets, the Adviser will trade on behalf of the Client on a discretionary basis. This means that the Adviser will invest and rebalance the Crypto Assets in the Account on a periodic basis in accordance with the specifications within each Basket Description, subject to any restrictions on the Crypto Assets purchased that the Client may impose on its Account.
By agreeing to the terms of this Advisory Agreement, the Client grants the Adviser a limited power of attorney to exercise any and all power and discretion to trade the fiat and Crypto Assets in the Client's Account in accordance with each Basket's Basket Description and subject to any additional instructions or restrictions provided by the Client.
The Client may view their allocations across Baskets and specific investments held within each Basket at any time through a personalized Dashboard on the Platform. Clients can log into their Dashboard to monitor their investments in real time and change their Basket allocations as desired. The account portal also provides access to the Platform's research materials in relation to each Basket.
The Adviser communicates with Clients only through the Platform. Staff of the Adviser are available for consultation with Clients about their accounts and management, but in no case will the Adviser or its staff provide any investment advice to a Client outside the Platform. Any communication provided outside day-to-day Basket management must occur through the client's account portal on the Platform. Clients can also direct questions about their accounts, the Baskets, and their investments to a 24/7 automated chat function (the “Chat”). The Chat will answer questions or direct Clients to explanatory or educational materials on the platform.
The Client must have a minimum investment of US $50 in its Account to open an Account; Clients must then maintain an account minimum of $25 (the “Minimum Investment Amount”). If the Client's Account drops below the Minimum Investment Amount, Clients will not be able to place trades and can only liquidate or add funds to their Accounts.
The Adviser may alter, suspend or terminate the Minimum Investment Amount in the future at its discretion.
Due to the limitations of the Custodian, the Client will not be able to receive the benefits of the governance or voting protocols of the Crypto Assets they hold in their Account. The Client retains the same right to exercise any voting rights associated with a Crypto Asset as any other customers of the Custodian. The Custodian's infrastructure does not support this capability and makes no promise of doing so in the future. The Adviser will not accept any authority to exercise any rights associated with a Crypto Asset.
Clients may not benefit from any airdrops, staking, lending or other functionalities that may be available to other customers of the Custodian or to investors that hold the Crypto Assets directly.
The Client may withdraw cash at any time, subject to maintaining the $25 Minimum Investment Amount. If the Client wishes to withdraw Crypto Assets, the Client must terminate their Account and may be required to transfer the assets to another account with the Custodian. The Client may make any withdrawal requests through the Dashboard. The Client's withdrawal request will typically be processed within 3 days, subject to the Custodian's ability to process the request within that time period.
The Client will receive a written confirmation of each transaction in its Account. These confirmations, and all other documents required by law to be provided to the Client, will be provided through the Dashboard.
On a quarterly basis, the Adviser will provide the Client account statements containing a description of all activity in the client's Account during the preceding period, including all transactions made on behalf of the account, all contributions and withdrawals made by the client, all fees and expenses charged to the account, and the value of the account at the beginning and the end of the period.
On a quarterly basis, the Adviser will also prompt the Client to reverify the information on the Client's financial situation and investment objectives and make any updates to the Client's restrictions on the management of the Account through the Dashboard.
On an annual basis, the Adviser will contact the Client in order to update the information on the Client's financial situation and investment objectives and any restrictions on the management of the Account. Any such changes will be made through the Dashboard.
The Client may proceed directly against any issuer of a Crypto Asset held in the Client's Account without joining any other person involved in the Adviser's investment program. No Client is obligated to join any person involved in the operation of the program, or any other Client of the Adviser, as a condition precedent to initiating such proceeding.
The Adviser will not take any action or render any advice on behalf of the Client with respect to Crypto Assets and securities that are formerly, presently or in the future held in the Account, or the issuers thereof, which were, are or become the subject of any legal proceedings (including without limitation, bankruptcy and shareholder class action lawsuits and any claims arising therefrom).
Crypto Assets are purchased through third-party exchanges. The Adviser will select and recommend any brokers, exchanges, or custodians based on a number of factors, including, but not limited to, ease of administration, quality of execution, commission rates, and pre-existing agreements. The Adviser generally seeks to minimize the total price (taking into account applicable exchange fees) for each transaction. In certain cases, the Adviser may have little or no choice as to which exchange to execute a transaction on, because a Crypto Asset is only available for trading on one or a small number of exchanges. This could lead to higher costs associated with purchases or sales of Crypto Assets. Clients will pay fees to the Custodian for trading and custody of Crypto Assets, which will be charged directly to Client's Account at the Custodian.
The Adviser may aggregate trading for Clients' Accounts through an omnibus account. This means that in the period immediately before and after a trade, Assets may be held in a pooled account held by the Adviser for this purpose. At all times, the Adviser tracks which Assets belong to specific Clients. No Assets attributable to a Client's Account will leave the Adviser's account with the Custodian until the Assets it is being traded for have entered the account. Aggregate orders will be allocated to Client accounts in a systematic and pro rata manner with no Account receiving preference over any other.
The Adviser will hold Client Assets with the Custodian, in an Account opened by the Adviser for the benefit of each Client. As noted above, Assets may be moved to an omnibus account immediately prior to trading.
Clients will use Plaid to transfer fiat currency from their bank to the Account. Clients may deposit Crypto Assets from their individual wallets as well and are solely responsible for any such deposits using instructions provided during the onboarding process.
The Custodian will directly send the Client quarterly Account statements. For each set of account statements received, the Client should compare the account statements from the Custodian with those from the Adviser.
The identity of each Custodian where Client Assets are held, and the Custodian's contact information are available through the Platform.
The Dashboard will provide estimated values of Crypto Assets currently held in the Account. The pricing will be pulled directly from the Gemini exchange. There is no guarantee that these prices will always be up to date or that they will reflect the true value of the Crypto Assets. The Adviser will not independently verify the accuracy of the prices on the individual exchanges.
In general, although the Adviser intends to provide accurate and timely information on the Platform, the Platform may not always be entirely accurate, complete or current and may also include technical inaccuracies or typographical errors.
In an effort to continue to provide as complete and accurate information as possible, information may be changed or updated from time to time without notice, including without limitation information regarding the Adviser's policies, products and services.
Links to third-party materials (including without limitation websites) may be provided as a convenience but are not controlled by the Adviser. The Client acknowledges and agrees that the Adviser is not responsible for any aspect of the information, content, or services contained in any third-party materials or on any third-party sites accessible on or linked to by the Platform.
For the Adviser's advisory services to the Client, the Client agrees to pay the Adviser fees and to bear the expenses set forth in, and each as computed in accordance with the current fee schedule (available under “Platform Costs” here: https://help.makara.com), which is incorporated by reference and made a part of this Advisory Agreement. The Adviser's fees may change. If so, the Adviser will notify Clients of the change through the Dashboard.
In addition to the Adviser's fees, Client will bear expenses associated with custody and trading (up to 0.35%) charged by the Custodian, which are charged to Client's Account.
The Adviser reserves the right to refuse to process, or to cancel or reverse, any purchases or sales of Crypto Assets in its sole discretion, even after funds have been deposited in the Account: (a) if the Adviser suspects the transaction involves (or has a high risk of involvement in) money laundering, terrorist financing, fraud, or any other type of financial crime; (b) in response to a subpoena, court order, or other government order; or (c) if the Adviser reasonably suspects that the transaction is erroneous or related to prohibited business activities. In such instances, the Adviser may reverse the transaction and is under no obligation to allow the Client to reinstate a purchase or sale order at the same price or on the same terms as the cancelled transaction.
- (i)This Advisory Agreement has been duly authorized, executed and delivered by the Adviser and constitutes the Adviser's legal, valid and binding obligation;
- (ii)The Adviser is registered under the U.S. Investment Advisers Act of 1940 (the “Advisers Act”) as an investment adviser;
- (iii)The Adviser's execution, delivery and performance of this Advisory Agreement does not violate or conflict with any agreement or obligation to which the Adviser is a party or by which the Adviser or its property is bound, whether arising by contract, operation of law or otherwise, unless such conflict has been otherwise disclosed by the Adviser to the Client; and
- (iv)The foregoing representations and warranties shall be continuing during such term of this Advisory Agreement, and if at any time during such term any event occurs which would make any of the foregoing representations and warranties untrue or inaccurate in any material respect, the Adviser will promptly notify the Client of such event and of any resulting untruths or inaccuracies.
- (a)The Client, whether natural person or corporate entity, represents, warrants, and agrees that as of the date of this Advisory Agreement and throughout the term of this Advisory Agreement:
- (i)The Client's execution, delivery and performance of this Advisory Agreement does not violate or conflict with any agreement or obligation to which the Client is a party or by which the Client or its property is bound, whether arising by contract, operation of law or otherwise;
- (ii)No governmental authorization, approvals, consents or filings are required in connection with the execution, delivery or performance of this Advisory Agreement by the Client;
- (iii)The Client is responsible for independently examining and understanding the tax, legal and accounting consequences related to the Client's Account;
- (iv)The Client is a U.S. person or entity;
- (v)Amounts contributed by the Client to the Account were not and are not directly or indirectly derived from activities that may contravene U.S. federal, state or international laws and regulations, including, without limitation, anti-money laundering (“AML”) laws and regulations, such as the U.S. Money Laundering Control Act of 1986 (i.e., 18 U.S.C. §§1956 and 1957), and the laws, regulations and Executive Orders administered by the Office of Foreign Assets Control (“OFAC”) of the U.S. Department of the Treasury (“OFAC Sanctions Programs”) (collectively,“AML/OFAC Laws”);
- (A)The Client represents and warrants that the funds for the Client's investment were not directly or indirectly derived from illegal activities, including any activities that would violate U.S. federal or state laws or any laws and regulations of other countries;
- (B)The Client further represents and warrants to the Adviser that the proceeds from the Account will not be used to finance any activities that may contravene any applicable laws and regulations, including AML/OFAC Laws;
- (C)The Client acknowledges that U.S. federal law, regulations and executive orders administered by OFAC may prohibit the Adviser or its affiliates from, among other things, engaging in transactions with, and providing services to, persons on the list of specially designated nationals and blocked persons and persons, foreign countries and territories that are the subject of U.S. sanctions administered by OFAC (collectively, the “OFAC Maintained Sanctions”);
- (D)The Client acknowledges that the Adviser prohibits the investment of funds by any persons or entities that are (I) the subject of OFAC Maintained Sanctions, (II) owned or controlled by any individual or entity that is the subject of OFAC Maintained Sanctions, (III) acting, directly or indirectly, in contravention of any applicable laws and regulations, including anti-money laundering regulations or conventions, or on behalf of persons or entities subject to an OFAC Maintained Sanction, (IV) acting, directly or indirectly, for a senior foreign political figure, any member of a senior foreign political figure's immediate family or any close associate of a senior foreign political figure, unless the Adviser, after being specifically notified by the Client in writing that it is such a person, conducts further due diligence, and determines that such investment shall be permitted, or (V) acting, directly or indirectly, for a foreign shell bank (such persons or entities in clauses (I)–(V) are collectively referred to as“Prohibited Persons”);
- (E)The Client represents and warrants that he, she or it is not, and is not acting directly or indirectly on behalf of, a Prohibited Person;
- (F)The Client acknowledges and agrees that the Adviser, in complying with anti-money laundering statutes, regulations and goals, may file suspicious activity reports (“SARs”) or any other information with governmental and law enforcement agencies that identify transactions and activities that such Adviser or their agents reasonably determine to be suspicious, or is otherwise required by law, and hereby absolves and holds harmless such persons or entities for such actions and disclosures;
- (G)The Client acknowledges that the Adviser is prohibited by law from disclosing to third parties, including the Client, any filing or the substance of any SARs;
- (i)The Client acknowledges that the Adviser may review Client account activity at any time should the Adviser reasonably believe a risk assessment is warranted, and that such review may require the Client to furnish the Advisor with additional identification or financial documents; such reviews may occur following Adviser identification of potential illicit Client account activity or inquiries by law enforcement, including National Security Letters which are administrative subpoenas issued by the United States government for national security purposes;
- (H)None of (I) the Client, (II) any person or entity controlling, controlled by or under common control with the Client, (III) any person or entity having a beneficial interest in the Client or (IV) any person or entity for whom the Client is acting as agent, trustee, representative, intermediary or nominee or in any similar capacity in connection with the Account, is a person or entity named on any available lists of known or suspected terrorists, terrorist organizations or of other sanctioned persons issued by the United States government and the government(s) of any jurisdiction(s) in which the Client is doing business, including the list of Specially Designated Nationals and Blocked Persons administered by OFAC, as such list may be amended from time to time, or a person or entity with whom a U.S. person is prohibited from dealing under the laws or regulations of the United States, including the OFAC Sanctions Programs;
- (I)None of (I) the Client, (II) any person or entity controlling, controlled by or under common control with the Client, (III) any person or entity having a beneficial interest in the Client or (IV) any person or entity for whom the Client is acting as agent, trustee, representative, intermediary or nominee or in any similar capacity in connection with the Account, has been designated by the Secretary of the Treasury under Section 311 of the USA PATRIOT Act as warranting special measures due to money-laundering concerns, or any person or entity that resides or has a place of business in, or is organized under the laws of, a country or territory that has been designated by the Financial Action Task Force on Money Laundering (“FATF”) as being a non-cooperative jurisdiction (any such country or territory, a“Non-Cooperative Jurisdiction”);
- (J)None of (I) the Client, (II) any person or entity controlling, controlled by or under common control with the Client, (III) any person or entity having a beneficial interest in the Client or (IV) any person or entity for whom the Client is acting as agent, trustee, representative, intermediary or nominee or in any similar capacity in connection with the Account, is a current or former “senior foreign political figure”or “politically exposed person,” or an immediate family member or close associate of such an individual;
- (K)The Client represents and warrants that it is not a“prohibited foreign shell bank,” nor does it receive deposits from, make payments on behalf of, or handle other financial transactions related to“prohibited foreign shell banks”; and
- (L)The Client (I) acknowledges that the Adviser may require further identification or documentation of the Client in order to comply with applicable laws and regulations, including AML/OFAC Laws, and (II) agrees to provide promptly such further identification or documentation upon request by the Adviser.
- (i)The Client understands that the representations, warranties, agreements, undertakings and acknowledgments made by the Client in this Advisory Agreement will be relied upon by the Adviser for its compliance with various securities and other laws;
- (ii)The Client certifies that either (A) the Client is not required to be registered as a futures commission merchant, introducing broker, commodity pool operator, commodity trading advisor or leveraged transaction merchant and that the Client is not an investment pool required to be operated by a registered commodity pool operator or (B) if the Client is required to be registered as a futures commission merchant, introducing broker, commodity pool operator, commodity trading advisor or leveraged transaction merchant or is an investment pool required to be operated by a registered commodity pool operator, the Client is in compliance with such requirements;
- (iii)The Client agrees that the compensation terms of this Advisory Agreement represent an “arms-length” arrangement and the Client is satisfied that it has received adequate disclosure from the Adviser to enable it to understand and evaluate the compensation and other terms of this Advisory Agreement and the associated risks;
- (iv)The Client understands and agrees that he, she or it is prohibited from investing and will not invest on the Platform through an individual retirement account or if the Client is (A) an employee benefit plan that is subject to the fiduciary responsibility standards and prohibited transaction restrictions of ERISA, (B) any plan to which Section 4975 of the U.S. Internal Revenue Code of 1986 (the “Code”) applies, (C) a private investment fund or other entity whose assets are treated as “plan assets” for purposes of ERISA and Section 4975 of the Code or (D) an insurance company, whose general account assets are treated as “plan assets” for purposes of ERISA and Section 4975 of the Code;
- (v)The Client understands that (A) the Adviser and its affiliates are not responsible for any content provided about a Crypto Asset from any third party, including without limitation and any service providers or other third parties, even if that information is distributed to the Client on behalf of a third party by the Adviser, and (B) neither the Adviser nor any of its affiliates is liable for any type of loss or damage associated with information provided by a third party;
- (vi)Neither the Adviser nor any affiliate independently verifies information regarding the Crypto Assets;
- (vii)The Client (A) acknowledges that the Adviser's decision to take certain actions, including limiting access to, suspending, or closing a Client's Account, may be based on confidential criteria that are essential to the Adviser's risk management and security protocols, and (B) agrees that the Adviser is under no obligation to disclose the details of its risk management and security procedures to the Client; and
- (viii)All information provided by the Client is current, true, correct and complete and may be relied upon by the Adviser and its affiliates in evaluating investor eligibility and determining whether to accept a particular client. The foregoing representations and warranties shall be continuing during the term of this Advisory Agreement, and if at any time during such term any event occurs which would make any of the foregoing representations and warranties untrue or inaccurate in any material respect, the Client promptly will notify the Adviser in writing of such event and of any resulting untruths or inaccuracies within 30 days of said event or change.
- (b)Where the Client is a corporate entity, said Client further represents, warrants, and agrees that as of the date of this Advisory Agreement and throughout the term of this Advisory Agreement:
- (i)The Client's retention of the Adviser as adviser with respect to the Account is authorized by the Client's governing documents, as applicable, and the Client will deliver to the Adviser evidence of such authority and compliance with its governing documents (if any) as the Adviser may reasonably request;
- (ii)This Advisory Agreement has been duly authorized by all appropriate action of the Client and when executed and delivered will be a legal, valid and binding agreement of the Client, enforceable against the Client in accordance with its terms, and the Client will deliver to the Adviser such evidence of such authority as the Adviser may reasonably require, whether by way of a certified resolution or otherwise;
- (iii)The Client (A) has conducted thorough due diligence with respect to all of its beneficial owners, (B) has established the identities of all beneficial owners and the source of each of the beneficial owner's funds and (C) will retain evidence of any such identities, any such source of funds and any such due diligence relating to its beneficial owners and, if the Client is an entity that is acting as an agent or nominee, the Client has adopted anti-money laundering procedures;
- (iv)The Client will notify the Adviser, in writing, of any termination, winding up, liquidation, substantial contraction, merger or consolidation of the Client; and
- (v)The person executing this Advisory Agreement on behalf of a corporate entity Client has been and is duly authorized by all appropriate action of the Client to execute the Advisory Agreement on the Client's behalf, and when executed and delivered will be a legal, valid and binding agreement of the Client, enforceable against the Client in accordance with its terms.
- (c)The Client shall have full responsibility for payment of all taxes due on capital or income held or collected for the Account.
- (d)The Client understands that to the fullest extent permitted by law, any notices, disclosures, forms, privacy statements, reports or other communications (collectively,“Communications”), including annual, quarterly and other updates and tax documents, may be delivered through electronic means, such as through the Dashboard or by email, by the Adviser, any of its affiliates or any of its third-party service providers, including without limitation the Custodian, without any charge by the Adviser to the Client. The Client hereby consents to electronic delivery as described in the preceding sentence.
- (i)This consent will be effective immediately and will remain in effect unless and until the Client revokes it. The Client understands that the Client's revocation of this consent will constitute a request to cancel the Client's Account and as such will be subject to Section 24 of this Advisory Agreement. The Client acknowledges and agrees that the Adviser reserves the right to terminate the Client's access to the Platform and Dashboard, if the Client withdraws its consent to electronic delivery. Any additional Communications will be sent by mail to the mailing address provided by the Client in the Customer Assessment or as subsequently updated.
- (ii)All email notifications of Communications will be sent to the email address provided by the Client in the Customer Assessment or as subsequently updated. The Client is responsible for maintaining a valid email address and software and hardware to receive, read and send email. The Client agrees to provide the Adviser with a current email address and promptly notify the Adviser of any changes to his or her email address in her, his or its Account on the Dashboard. By establishing the Client's Account and accessing the Dashboard, the Client indicates to the Adviser that she, he or it has the capability to access the Communications. Regardless of whether the Client receives an email from the Adviser, the Client agrees to check the Dashboard regularly for up-to-date information and to avoid missing time-sensitive information.
- (iii)In so consenting, the Client acknowledges that email messages are not secure and may contain computer viruses or other defects, may not be accurately replicated on other systems or may be intercepted, deleted or interfered with, with or without the knowledge of the sender or the intended recipient. The Client also acknowledges that an email from the Adviser, any of its affiliates or any of its third-party service providers, including without limitation the Custodian, may be accessed by recipients other than the Client, may be interfered with, may contain computer viruses or other defects and may not be successfully replicated on other systems. The Adviser is not responsible for computer viruses or related problems associated with the Client's use of the Platform, the Dashboard, email or any other online system.
- (e)The Client agrees to provide the Adviser, any of its affiliates or any of its third-party service providers, including without limitation the Custodian, with such further information, authorizations and documentation as the Adviser may require from time to time to carry out its obligations under this Advisory Agreement or to avoid violations of any provisions of any applicable laws, and shall notify the Adviser promptly in writing of any change in the information so furnished.
- (f)The Client acknowledges receipt of the Adviser's Part 2A of Form ADV, which is provided here:https://files.adviserinfo.sec.gov/IAPD/Content/Common/crd_iapd_Brochure.aspx?BRCHR_VRSN_ID=780602(the “Brochure”) prior to entering into this Advisory Agreement.
- (g)The Client is solely responsible for reading and understanding the information provided to the Client in any and all relevant documents provided to the Client regarding its investments made through the Account based on the services provided by the Adviser under this Advisory Agreement, and for reading and understanding the Adviser's Brochure (including without limitation all risk disclosure and conflicts of interest set forth in the Brochure or otherwise provided here:https://files.adviserinfo.sec.gov/IAPD/Content/Common/crd_iapd_Brochure.aspx?BRCHR_VRSN_ID=780602).
- (h)The Client acknowledges that the Adviser is not responsible for securities law compliance of Crypto Asset issuers, Crypto Asset exchanges, Custodians or any other third party.
- (i)The Client acknowledges that the Adviser is not aware of what other holdings the Client has and therefore cannot and does not provide any advice with respect to diversification of investments.
- (j)The Client acknowledges that the Crypto Assets available for investment on the Platform are in many cases not registered securities and consequently information regarding the Crypto Assets may be limited.
- (k)The Client acknowledges that Client is responsible for making Client's own basket selections and allocations.
- (l)The Client acknowledges receipt of the Adviser's Client Privacy Notice, which is available here: https://makaradigital.com/legal/privacy and is incorporated by reference and made a part of this Advisory Agreement.
- (m)The Client acknowledges that Cryptocurrency is not legal tender and is not backed by the government. Cryptocurrency, (including but not limited to bitcoin and ethereum, and stablecoins such as USDC), is not subject to Federal Deposit Insurance Corporation (“FDIC”) or Securities Investor Protection Corporation protections (“SIPC”).
- (n)The Client attests that any information the Client provides to Makara in connection with the services contemplated by this Advisory Agreement, is current, accurate, truthful, and complete.
- (o)The Client understands that the Client is responsible for all acts and omissions relating to the use of the Service, including all information the Client provides to Makara through the Platform while logged in under the Client's Username and Password, and any information provided to Makara through the email address associated with the Client's Makara Account. The Client understands and agrees that it is the Client's responsibility to maintain the confidentiality of the Client's Password, to store the Client's password in a secure manner, and not to share the Client's Password with any other individual. The Client agrees to log into the Client's Account regularly, to monitor for unauthorized access, and to notify Makara immediately in writing if the Client becomes aware of any unauthorized use of Client's Username and Password. Makara will not be liable to the Client or to any other person for any claim with respect to orders Makara places on behalf of the Client based on any information provided without the Client's authorization through the Platform or the email address associated with Client's Account.
- (a)None of the Adviser, its affiliates, respective members, stockholders, partners, directors, officers, employees and legal representatives (e.g., executors, guardians and trustees) of any of them (including persons formerly serving in such capacities) (together, the“Indemnified Parties”) shall be liable for any expenses, losses, damages, liabilities, demands, charges or claims of any kind or nature whatsoever (collectively, “Losses”) relating to the Account or this Advisory Agreement, except to the extent that such Losses are actual Losses of the Client that are the direct result of an act or omission taken or omitted by the Adviser during the term of this Advisory Agreement which constitutes negligence, malfeasance, or violation of applicable law with respect to the Adviser's obligations under this Advisory Agreement. Federal and state 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 Client may have under federal or state securities laws. In addition, it is possible that Client or Makara itself may experience computer equipment failure, loss of internet access, viruses, or other events that may impair access to Makara's software based advisory service. Makara and its representatives are not responsible to any Client for Losses unless caused by Makara breaching its fiduciary duty.
- (b)The Adviser gives no warranty as to the performance or profitability of its recommendations and directed investments, nor any guarantee that the investment objectives, expectations or targets described in this Advisory Agreement will be achieved, including, without limitation, any risk control, risk management or return objectives, expectations or targets. The Account may suffer loss of principal, and returns, if any, may fluctuate. The value of Account investments may be affected by a variety of factors, including, but not limited to, economic and political developments, government regulations, judicial interpretations, interest rates and issuer-specific events, market conditions, sector positioning and other factors.
- (c)The Indemnified Parties shall not be responsible for any Losses incurred in the event of the termination and transfer of the Account in accordance with Section 24. In addition, the Indemnified Parties shall not be liable for any consequential, indirect, special or punitive damages.
- (d)The Client agrees to indemnify and hold harmless the Adviser, any partner, officer, employee, agent, affiliate or subsidiary of any of them, and each other person, if any, who controls, is controlled by, or is under common control with, any of the foregoing, within the meaning of Section 15 of the Securities Act, and their respective officers, directors, partners, members, shareholders, owners, employees and agents against any and all losses, liabilities, claims, damages and expenses whatsoever (including all expenses incurred in investigating, preparing or defending against any claim whatsoever) arising out of or based upon (i) any false representation or warranty made by the Client, or breach or failure by the Client to comply with any covenant or agreement made by the Client, in this Agreement or in any other document furnished by the Client to any of the foregoing in connection with this transaction or future transactions, or (ii) any action for securities law violations instituted by the Client that is finally resolved by judgment against the Client.
- (e)The Client also agrees to indemnify each Indemnified Party for any and all costs, fees and expenses (including legal fees and disbursements) in connection with any damages resulting from the Client misrepresentation or misstatement contained herein, or the assertion of the Client's lack of proper authorization from the beneficial owner to enter into, or perform the obligations under, this Advisory Agreement.
- (f)The Client agrees to indemnify and hold harmless each Indemnified Party from and against any tax, interest, additions to tax, penalties, attorneys' and accountants' fees and disbursements, together with interest on the foregoing amounts at a rate determined by the applicable Indemnified Party computed from the date of payment through the date of reimbursement, arising from the failure to withhold and pay over to the U.S. Internal Revenue Service or the taxing authority of any other jurisdiction any amounts computed, as required by applicable law, with respect to the income or gains allocated to or amounts distributed to the Client with respect to Crypto Assets.
- (g)If, for any reason (other than the negligence, malfeasance or violation of applicable law of the person that would otherwise be indemnified), the foregoing indemnification is unavailable to, or is insufficient to hold such Indemnified Party harmless, then the Client shall contribute to the amount paid or payable by the Indemnified Party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect not only the relative benefits received by the Client on the one hand and the Indemnified Parties on the other but also the relative fault of the Client and the Indemnified Parties as well as any relevant equitable considerations.
- (h)The reimbursement, indemnity and contribution obligations of the Client under this Section 17 shall be in addition to any liability that the Client may otherwise have, and shall be binding upon and inure to the benefit of any successors, assigns, heirs and personal representatives of the Indemnified Parties.
- (i)Notwithstanding the foregoing, nothing contained in this Agreement or any other document shall constitute a waiver by a Client of any of his, her or its legal rights under applicable U.S. federal securities laws or any other laws whose applicability is not permitted to be contractually waived.
- (j)The Indemnified Parties will be entitled to rely upon, and will not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by them to be genuine and to have been signed or sent by the proper person. The Indemnified Parties may rely upon any statement believed by them in good faith to be made by the proper person and will not incur any liability for relying on any such statement. The Indemnified Parties may consult with legal counsel, auditors and other experts selected by them in good faith and will not be liable for any action taken or not taken by them in good faith in accordance with the advice of any such legal counsel, auditors or experts.
- (a) Binding Arbitration. Except for any disputes, claims, suits, actions, causes of action, demands or proceedings (collectively, “Disputes”) in which either party seeks injunctive or other equitable relief for the alleged unlawful use of intellectual property, including, without limitation, copyrights, trademarks, trade names, logos, trade secrets or patents, the Client and the Adviser (i) waive the Client's and the Adviser's respective rights to have any and all Disputes arising from or related to the terms of this Advisory Agreement (the“Terms”) resolved in a court, and (ii) waive the Client's and the Adviser's respective rights to a jury trial. Instead, the Client and the Adviser will arbitrate Disputes through binding arbitration (which is the referral of a Dispute to one or more persons charged with reviewing the Dispute and making a final and binding determination to resolve it instead of having the Dispute decided by a judge or jury in court).
- (b) No Class Arbitrations, Class Actions, or Representative Actions.Any Dispute arising out of or related to the Terms is personal to the Client and the Adviser and will be resolved solely through individual arbitration and will not be brought as a class arbitration, class action or any other type of representative proceeding. There will be no class arbitration or arbitration in which an individual attempts to resolve a Dispute as a representative of another individual or group of individuals. Further, a Dispute cannot be brought as a class or other type of representative action, whether within or outside of arbitration, or on behalf of any other individual or group of individuals.
- (c) Federal Arbitration Act. The Terms affect interstate commerce and the enforceability of this Section 18 will be both substantively and procedurally governed by and construed and enforced in accordance with the federal arbitration act, 9 U.S.C. § 1 et seq. (the “FAA”), to the maximum extent permitted by applicable law.
- (d) Notice. Each party will notify the other party in writing of any Dispute within thirty (30) days of the date it arises, so that the parties can attempt in good faith to resolve the Dispute informally. Notice to the Adviser shall be sent by email to the Adviser at ADVQuestions@makara.digital. Notice to the Client shall be sent by email to the then-current email address in the Client's Account. The Client's notice must include (i) the Client's name, postal address, email address, and telephone number, (ii) a description in reasonable detail of the nature or basis of the Dispute, and (iii) the specific relief that the Client is seeking. If the Client and the Adviser cannot agree how to resolve the Dispute within thirty (30) days after the date notice is received by the applicable party, then either the Client or the Adviser may, as appropriate and in accordance with this Section 18, commence an arbitration proceeding or, to the extent specifically provided for in Section 18(a), file a claim in court.
- (e) Process. Any arbitration will occur in Washington. Arbitration will be conducted confidentially by a single arbitrator in accordance with the rules of the Judicial Arbitration and Mediation Services (“JAMS”), which are hereby incorporated by reference. The state and federal courts located in King County, Washington will have exclusive jurisdiction over any appeals and the enforcement of an arbitration award.
- (f) Authority of Arbitrator. As limited by the FAA, the Terms and the applicable JAMS rules, the arbitrator will have (i) the exclusive authority and jurisdiction to make all procedural and substantive decisions regarding a Dispute, including the determination of whether a Dispute is arbitrable, and (ii) the authority to grant any remedy that would otherwise be available in court; provided, however, that the arbitrator does not have the authority to conduct a class arbitration or a representative action, which is prohibited by the Terms. The arbitrator may only conduct an individual arbitration and may not consolidate more than one individual's claims, preside over any type of class or representative proceeding or preside over any proceeding involving more than one individual.
- (g) Rules of JAMS. The rules of JAMS and additional information about JAMS are available on the JAMS website. By agreeing to be bound by the Terms, the Client either (i) acknowledges and agrees that the Client has read and understands the rules of JAMS, or (ii) waives its opportunity to read the rules of JAMS and any claim that the rules of JAMS are unfair or should not apply for any reason.
- (h) Severability of Dispute Resolution and Arbitration Provisions.If any term, clause or provision of this section is held invalid or unenforceable, it will be so held to the minimum extent required by law, and all other terms, clauses and provisions of this Section 18 will remain valid and enforceable. Further, the waivers set forth in Section 18(b) are severable from the other provisions of the Terms and will remain valid and enforceable, except as prohibited by applicable law.
The Adviser may rely and act on any instruction, direction or communication given by the person executing this Advisory Agreement (“Authorized Person”), unless the Adviser has received written notice to the contrary from the Authorized Person. To the extent deemed necessary by the Adviser in order to carry out Client instructions with respect to a specified investment transaction, the Adviser is authorized by the Client to effect transactions in the Client's Account. This authorization is solely for the limited purpose of effecting particularized transactions for which the Client has provided a specific directive through the Client's Dashboard and does not constitute a blanket authorization.
The Adviser shall maintain records as required by and in accordance with the Advisers Act.
By entering into this agreement on or after March 2, 2022, Client acknowledges and understands that Makara is a wholly-owned subsidiary of Betterment. Except as assigned to Betterment, no other assignment (as such term is defined under the Advisers Act) of this Advisory Agreement may be made by either Party to the Advisory Agreement except with the written consent of the other Party; provided, however, that the Adviser may, without the consent of the other Party, assign this Advisory Agreement to any affiliate including affiliates of Betterment (other than any assignment that constitutes an “assignment” for purposes of Section 205(a)(2) of the Advisers Act). Any consent that is required from the Client under this provision may be presumed provided if the Client does not respond to written notice of an assignment within twenty (20) days of the Adviser providing such notice, provided that the Client retains the right to terminate this Advisory Agreement within forty-five (45) days after such notice without cost. The Adviser shall notify the Client of a change of its ownership that results in a change of control for purposes of the Advisers Act within ten (10) days of any such change.
- (a)The Client acknowledges that confidential information and advice furnished by the Adviser to the Client is the exclusive and proprietary intellectual property of the Adviser which (i) shall be treated as confidential by the Client, (ii) shall not be used by the Client as the basis for effecting transactions in any accounts other than the Account, which is held by the Custodian, (iii) shall not be used by the Client for any purpose other than analysis of the Adviser's performance by the Client or by the Client's auditors, lawyers, accountants, or investment advisers (collectively, “Advisers”), and (iv) shall not be disclosed, directly or indirectly, to third parties except with the prior written consent of the Adviser. Upon the Adviser's written request, the Client shall return confidential or proprietary information of the Adviser in its possession to the Adviser. The Client agrees to cause its partners, members, shareholders, directors, officers, employees, representatives, and advisors (collectively, “Representatives”) to comply with such restrictions. The Client agrees that money damages would not be a sufficient remedy for any breach of this Section 22 by Client or its Representatives and that the Adviser shall be entitled to seek equitable relief, including injunction and specific performance, in the event of any such breach, in addition to all other remedies available to the Adviser at law or in equity.
- (b)Notwithstanding the foregoing, confidential information may be disclosed if (i) requested by or through a judicial, administrative, governmental or self-regulatory organization process, investigation, inquiry or proceeding, or as otherwise required by law (and to the extent not prohibit by applicable law, the disclosing party shall promptly inform the other party of such disclosure), or (ii) required in order for a Party to carry out its responsibilities hereunder. Notwithstanding anything to the contrary in this Advisory Agreement, the Client and the Adviser (and each Representative of the Client and the Adviser) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the transactions contemplated by this Advisory Agreement and all materials of any kind (including opinions or other tax analyses) that are provided to the Client or the Adviser relating to such tax treatment and tax structure, it being understood that “tax treatment” and “tax structure” do not include the parties to a transaction.
- (a)The Adviser and its affiliates and their partners, members, managing directors, directors, officers and employees (“Personnel”) may have multiple advisory, transactional and financial and other interests in securities, instruments and companies that may be purchased, sold or held by the Adviser for the Account. The Adviser may act as adviser to clients in financial advisory, asset management and other capacities in advisory or other assignments of all types including, without limitation, those related to instruments that may be purchased, sold or held in the Account. At times, these activities may cause Personnel of the Adviser to give advice to clients that may cause these clients to take actions adverse to the interests of the Client. The Adviser and Personnel may act in a proprietary capacity with long or short positions, in instruments of all types, including those that the Account may purchase, sell, or hold. Such activities could affect the prices and availability of the securities and instruments that the Adviser advises the Client to buy or sell for the Account, which could adversely impact the performance of the Account. Personnel may serve as directors of companies the securities or Crypto Assets of which the Account may purchase, sell or hold. The Adviser and Personnel may give advice or take action with respect to the Adviser's Clients or proprietary accounts that may differ from the advice given or action taken with respect to the Adviser's Account, and may effect transactions for such Clients or proprietary accounts at prices or rates that may be more or less favorable than those for the Account. Affiliates of the Adviser may provide technology and other services to companies issuing instruments that may be purchased, sold or held in the Account.
- (b)The Client understands that the ability of the Adviser to effect and/or recommend transactions may be restricted by applicable regulatory requirements in the United States or elsewhere or internal policies designed to comply with such requirements.
- (c)The Adviser will be under no obligation to make available any research or analysis prior to its public dissemination. Furthermore, the Adviser shall have no obligation to recommend for purchase or sale by Accounts any security or Crypto Asset that the Adviser or Personnel may purchase for themselves or for any other Clients. The Adviser and Personnel shall have no obligation to seek to obtain any material non-public (“inside”) information about any issuer of securities, and will not effect transactions for Accounts on the basis of any inside information as may come into their possession, and will not trade for their Accounts or any third party's account using any inside information obtained regarding the Client's proposed investment activities.
- (d)Additional information on the subjects described in this Section 23 may be found in Part 2A of the Adviser's Form ADV.
- (a)This Agreement shall continue in full force and effect until it is terminated by Client through the Platform or at any time by Adviser, or such other times as the Parties may mutually agree. For the avoidance of doubt, either Party may terminate this Advisory Agreement effective immediately upon written notice in the event that the other Party is in material breach of any provision of this Advisory Agreement. The Adviser may terminate the Advisory Agreement or suspend the Advisory Agreement at any time if necessary for compliance with the law, if service providers such as the Custodian, are unable to support the Client's Account, or if the Client conducts any actions designed to circumvent the Adviser's processes or controls.
- (b)The Client may cancel its Account through the Client's Dashboard. The Client will not be charged for canceling its Account, although the Client will be required to pay any outstanding amounts owed to the Adviser in accordance with the current fee schedule (available here: https://help.makaradigital.com). The Client authorizes the Adviser to cancel or suspend any pending transaction at the time of cancellation. The Client is responsible for withdrawing all balances in the Account.
- (c)Except as prohibited by applicable law, the Adviser may terminate this Advisory Agreement in the following manner. If the Adviser suspends or closes a Client's Account, or terminates the Client's use of the Platform for any reason, the Adviser will provide the Client with notice of the Adviser's actions unless a court order or other legal process prohibits the Adviser from providing the Client with such notice. Following notification of termination, if Client directs Makara to close their Account and provides Makara with external bank account information, Makara will liquidate Crypto Assets held in the Client's Account into fiat currency (together, with the balance of fiat currency already held in the Account, “Account Proceeds”) and direct Account Proceeds to the external bank account. Alternatively, following notice of termination, Client can direct Makara to transition their Account at the Custodian to a self-directed account in Client's name at the Custodian where the Crypto Assets will be maintained in-kind. Unless Makara receives a direction from Client to (i) direct Account Proceeds to an external bank account or (ii) transition the Account to a self-directed account, and if Client has a cash account, Cash Reserve, at Makara's affiliate, Betterment LLC, as of the termination date, Makara will transfer Client's Account Proceeds to their Cash Reserve account. Following 30 days of notice of such termination, if no Client direction has been received and Client does not have a Cash Reserve account, Client's Account will be transitioned to a self-directed account in Client's name at the Custodian where the Crypto Assets will be maintained in-kind. On and after the termination date, Makara will no longer manage the Account. The Client acknowledges that it will normally take a number of business days for a Client to receive Account Proceeds from the Client's terminated Account.
- (d)The Sections describing Fees; Expenses (with respect to periods prior to the effective date of the termination), Limitations of Liability; Indemnification, Instructions, Confidential Information, Duration and Termination, Notices, Governing Law and Submission to Jurisdictionshall survive the termination of this Advisory Agreement.
Notices hereunder shall be in writing and shall be deemed given if delivered in person or by any other method which results in evidence of receipt, including registered mail, electronic delivery, facsimile transmission, or overnight delivery service, to the Parties at the following addresses (including email addresses), or at such other addresses as a Party may specify by notice in accordance with this Section 25:
If to the Adviser at:Argonaut Asset Management Inc
dba Makara Digital Corporation
with copy to
Betterment Holdings Inc.
27 West 23rd Street, 6th Floor
New York, New York 10010
If to the Client, as indicated in the Customer Assessment.
This Advisory Agreement, including the Exhibits hereto, states the entire agreement of the Parties with respect to management of the Account and supersedes all previous agreements and undertakings pertaining to the subject matter hereof and may only be subsequently amended or supplemented by a writing signed by the Parties. If any provision or any part of a provision of this Advisory Agreement shall be found to be void or unenforceable, it shall not affect the remaining part, which shall remain in full force and effect. For all purposes of this Advisory Agreement, the Adviser shall be an independent contractor and not an employee or agent of the Client; nor shall anything in this Advisory Agreement be construed as making the Client a partner or co-venturer with the Adviser or any of its affiliates or other accounts or clients of the Adviser or its affiliates. The headings of the Sections of this Advisory Agreement are for convenience of reference only and are not to be considered in construing the terms and provisions of this Advisory Agreement. References to “Section” in this Advisory Agreement shall be deemed to refer to the indicated Section of this Advisory Agreement, unless the context clearly indicates otherwise.
This Advisory Agreement may be amended by the Adviser from time to time. The Adviser will provide notice of any amendments to the Client through the Dashboard, and the Client's subsequent use of the Platform will constitute the Client's agreement to such amendment.
This Advisory Agreement shall become effective on the day and year on which the Adviser accepts the Client and commences its advisory activities, as contemplated under the Advisory Agreement on such date.
Client understands that this Advisory Agreement will be deemed to have been made in the State of New York. To the extent not inconsistent with Federal law, this Advisory Agreement shall be governed by and construed in accordance with the laws of New York, and in compliance with the Investment Advisers Act of 1940, as amended. The federal and state 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 rights which Client may have under federal and state securities laws.
Each of the Parties submits to the non-exclusive jurisdiction of the federal and state courts located in New York County, New York, and each waives any right of immunity to (i) the jurisdiction of any such court, (ii) relief by way of injunction, (iii) attachment of assets (whether before or after judgment), or (iv) execution or enforcement of a judgment of any such courts in a proceeding in the courts of any other jurisdiction.
- A “senior foreign political figure” includes: (a) a current or former senior official in the executive, legislative, administrative, military or judicial branches of a non-U.S. government (whether elected or not), a current or former senior official of a major non-U.S. political party, or a current or former senior executive of a non-U.S. government-owned commercial enterprise; (b) a corporation, business, or other entity that has been formed by, or for the benefit of, any such individual; (c) an immediate family member of any such individual; or (d) a person who is widely and publicly known (or is actually known) to be a close associate of such individual. For purposes of this definition, a"senior official" or"senior executive" means an individual with substantial authority over policy, operations, or the use of government-owned resources, and"immediate family member" means a spouse, parents, siblings, children and spouse's parents or siblings.
- A "politically exposed person" is a term used for individuals who are or have been entrusted with prominent public functions in a foreign country, for example, Heads of State or of government, senior politicians, senior government, judicial or military officials, senior executives of state-owned corporations, important political party officials.
- A "prohibited foreign shell bank" is a foreign bank that does not have a physical presence in any country, and is not a“regulated affiliate,” i.e., (i) an affiliate of a depository institution, credit union, or foreign bank that maintains a physical presence in the United States or a foreign country, as applicable, and (ii) subject to supervision by a banking authority in the country regulating the affiliated depository institution, credit union, or foreign bank.