Common use of Section 13 Reporting Clause in Contracts

Section 13 Reporting. Betterment and Advisor agree that only Betterment will exercise “investment discretion” with respect to Accounts within the meaning of Section 13(f) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and that Betterment shall be responsible for filing any required reports pursuant to Section 13(f) and the rules thereunder. BETTERMENT LLC MTG LLC d/b/a Betterment Securities Advisor 1. Advisor agrees that it will not reproduce, transmit, sell, distribute, enable the distribution of, publish, broadcast, circulate, modify, disseminate or commercially exploit any Model Portfolio or derivative thereof, without the prior written consent of the applicable Model Portfolio Provider, and that the applicable Model Portfolio Provider shall have the right to enforce such restrictions. 2. Advisor acknowledges and understands that (i) investments made pursuant to Model Portfolio allocations may involve substantial risks and conflicts of interests and could result in the loss of all or a substantial portion of the assets invested pursuant to a Model Portfolio allocation, and (ii) the risks and conflicts associated with respect to each Model Portfolio are set forth in the offering documents in respect of the Products comprising the Model Portfolio and the Form ADV of the applicable Model Portfolio Provider. 3. Advisor acknowledges and agrees that (i) it, and not the Model Portfolio Provider, has responsibility for providing individualized investment advice and portfolio management services to its Clients and for implementing its discretion in respect of the Model Portfolios, (ii) it, and not the Model Portfolio Provider, is acting as adviser and fiduciary to each Client and (iii) it is not acting as an agent of the Model Portfolio Provider. 4. Advisor acknowledges and agrees that (i) it will not use the trademark of any Model Portfolio Provider in any manner unless expressly authorized to do so, including on any materials it makes available to Clients, (ii) it will not distribute unauthorized advertisements or materials describing any Model Portfolio Provider or its Model Portfolios and (iii) the applicable Model Portfolio Provider shall have the right to enforce such restrictions. 5. Advisor acknowledges that if Advisor selects a Model Portfolio for a Client, Advisor shall have limited or no ability to replace, remove, or alter the underlying Products which make up such Model Portfolio. 6. Advisor acknowledges that (i) the Model Portfolios will not be updated on a continuous basis and the information contained therein may be outdated and (ii) the absence of frequent updates may have an adverse impact on the usefulness of such Model Portfolios. 7. Advisor represents that, with respect to each Model Portfolio Provider, (i) no advice provided by such Model Portfolio Provider to Betterment or, indirectly, to any Advisor, has formed or will form a primary basis for any advice provided by Betterment or any Advisor to a Client, (ii) (1) it is independent of and unaffiliated with such Model Portfolio Provider and is (A) an investment adviser registered under the Investment Advisers Act of 1940 (the “Advisers Act”) or, if not so registered by reason of paragraph (1) of section 203A of the Advisers Act, is registered as an investment adviser under the laws of the state in which it maintains its principal office and place of business, or is an entity not required to register as an investment adviser pursuant to the Advisers Act, or (B) a fiduciary that holds, or has under management and control, total assets of at least $50 million; (2) it is capable of evaluating investment risks independently, both in general and with regard to the transactions contemplated by, and the Products described in, this Agreement, (3) such Model Portfolio Provider is not undertaking to provide impartial investment advice, or to give advice in a fiduciary capacity, in connection with the transactions contemplated by this Agreement or the Model Portfolios, (4) with respect to any Client subject to Title I of ERISA or Section 4975 of the Code, it is a fiduciary under ERISA and/or the Code with respect to the transactions contemplated by this Agreement, and is responsible for exercising independent judgment in evaluating such transactions and (5) it understands and has been fairly informed of the existence and nature of the financial interests of the Model Portfolio Provider in the transactions contemplated by this Agreement and the Model Portfolios. 8. Advisor acknowledges and agrees that to the extent permitted by law, neither the Advisor nor any Client shall have any recourse against the provider of any Model Portfolio in connection with the Adviser’s use of any Model Portfolio for their Clients’ accounts, other than in the event such losses result from the Model Portfolio Provider’s gross negligence or willful misconduct. 9. Advisor acknowledges that Model Portfolios are not available on all Betterment platforms, and as such Client may be required to liquidate Client’s Account with Betterment to the extent that such Client’s Account is allocated to a Model Portfolio and Client’s relationship with Advisor and/or Advisor’s relationship with Betterment, is terminated. 10. Advisor acknowledges and agrees that: (i) the availability of a Model Portfolio should not be construed as, and is not, a recommendation as to the advisability of utilizing such Model Portfolio; (ii) Advisor should conduct their own due diligence on the underlying Products; (iii) Advisor is aware that a Model Portfolio may include Products sponsored by the applicable Model Portfolio Provider or an affiliate thereof, and therefore such Model Portfolio Provider is subject to a potential conflict of interest in that it may be incentivized to include such affiliated Products in constructing such Model Portfolio; and