Exhibit (d.6)
INTERIM INVESTMENT ADVISORY AGREEMENT
INTERIM INVESTMENT ADVISORY AGREEMENT (the "Agreement") made as of this 1st
day of December, 2009 between BlackRock Fund Advisors, formerly known as
Barclays Global Fund Advisors, a corporation organized under the laws of the
State of California (the "Adviser"), and iShares Trust, a business trust
organized under the laws of the State of Delaware (the "Trust").
WHEREAS, the Adviser is engaged in the business of rendering investment
management services and is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended (the "Advisers Act");
WHEREAS, the Trust is an open-end management investment company and is
registered as such under the Investment Company Act of 1940, as amended (the
"1940 Act");
WHEREAS, the Trust is authorized to issue shares of beneficial interest in
separate series with each such series representing interests in a separate
portfolio of securities and other assets;
WHEREAS, the Trust offers shares representing interests in each of the
separate series listed on Schedule A attached hereto (each, a "Fund" and
collectively, the "Funds");
WHEREAS, the Adviser had previously served as the investment adviser to the
Funds pursuant to an Investment Advisory Agreement between the Trust, on behalf
of the Funds, and the Adviser (the "Current Advisory Agreement");
WHEREAS, the Adviser is a wholly-owned subsidiary of BlackRock
Institutional Trust Company, N.A., formerly known as Barclays Global Investors,
N.A. ("BGI"), which in turn was a majority-owned subsidiary of Barclays PLC
("Barclays");
WHEREAS, on June 16, 2009, Barclays announced that it had entered into an
agreement to sell its interest in BGI, the Adviser and certain affiliated
companies to BlackRock, Inc. (the "Transaction");
WHEREAS, the consummation of the Transaction resulted in the assignment of
the Current Advisory Agreement, which caused the automatic termination of such
agreement;
WHEREAS, to address the termination of the Current Advisory Agreement,
shareholder approval of a new Investment Advisory Agreement (the "New Advisory
Agreement") between the Trust, on behalf of the Funds, and the Adviser is being
sought;
WHEREAS, in the event that shareholder approval of the New Advisory
Agreement has not been obtained prior to the consummation of the Transaction for
any Fund, the Trust, on behalf of the Funds, desires to retain the Adviser to
act as investment adviser to such Funds, and to render investment advisory
services to the Funds in the manner and on the terms set out in this Agreement
for a maximum of 150 days following the consummation of the
Transaction, pending approval of the New Advisory Agreement by the shareholders
of each Fund; and
WHEREAS, the Adviser desires to provide such services on the terms and
conditions set forth in this Agreement;
NOW THEREFORE, the parties hereto hereby agree as follows:
1. APPOINTMENT OF ADVISER
The Trust, pending the consummation of the Transaction and the failure
by that time to obtain shareholder approval of the New Advisory Agreement
by any Fund, hereby appoints the Adviser to act as investment adviser for
any Fund that has not obtained shareholder approval for the period and on
terms set forth herein. The Adviser accepts such appointment and agrees to
render such services for the compensation set forth herein, as such
compensation may be limited by Rule 15a-4 under the 1940 Act and as
provided in this Agreement.
2. DUTIES OF THE ADVISER
The Adviser, at its own expense shall: (i) furnish continuously an
investment program for each Fund; (ii) manage the investment and
reinvestment of Fund assets; (iii) determine what investments shall be
purchased, held, sold or exchanged for each Fund and what portion, if any,
of the assets of each Fund shall be held uninvested; (iv) make changes on
behalf of the Trust in the investments for each Fund; (v) provide the Trust
with records concerning the Adviser's activities that the Trust is required
to maintain; and (vi) render reports to the Trust's officers and Board of
Trustees concerning the Adviser's discharge of the foregoing
responsibilities. In addition, the Adviser will arrange for other necessary
services, including custodial, transfer agency and administration. The
Adviser shall furnish to the Trust all office facilities, equipment,
services and executive and administrative personnel necessary for managing
the investment program of the Trust for each Fund. The Adviser may at its
expense employ others to provide all or any part of facilities and
personnel.
The Adviser shall discharge the foregoing responsibilities subject to
the control of the Board of Trustees of the Trust and in compliance with
such policies as the Trustees may from time to time establish, each Fund's
investment objective and policies, as set forth in the then current
prospectus and statement of additional information for such Fund contained
in the Trust's Registration Statement on Form N-1A, as such prospectus and
statement of additional information is amended or supplemented from time to
time, and applicable laws and regulations.
3. CERTAIN RECORDS AND REPORTS
Any records required to be maintained and preserved pursuant to the
provisions of Rule 31 a-l and Rule 31a-2 under the 1940 Act that are
prepared or maintained by the Adviser (or any sub-adviser) on behalf of the
Trust are the property of the Trust and will be surrendered promptly to the
Trust at its request (the "Records"). The Adviser agrees to preserve the
Records for the periods prescribed in Rule 31a-2 under the 1940 Act. The
Trust and the Adviser agree to furnish to each other, if applicable,
current prospectuses, proxy statements,
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reports to shareholders, certified copies of their financial statements,
and such other information with regard to their affairs as each may
reasonably request
4. ADVISORY FEES
(a) For the services to be provided by the Adviser hereunder with
respect to each Fund, the Trust shall pay to the Adviser a fee at the rate
set forth on Schedule A attached hereto, provided, and notwithstanding
anything herein to the contrary, the fees and other compensation paid to
the Adviser hereunder shall be no greater than the compensation the Adviser
would have received under the Current Advisory Agreement. The Adviser
agrees to pay all expenses incurred by the Trust except for interest,
taxes, brokerage expenses and other expenses connected with the execution
of portfolio transactions, extraordinary expenses, and distribution fees
and expenses paid by the Trust under any distribution plan adopted pursuant
to rule 12b-1 under the 1940 Act. Schedule A shall be amended from time to
time to reflect the termination of any Fund as a Fund hereunder. All fees
payable hereunder shall be accrued daily and paid as soon as practical
after the last day of each month, subject to the limitations set forth in
Section 4(c) below.
(b) In any case of commencement or termination of this Agreement with
respect to any Fund during any calendar quarter, the fee with respect to
such Fund for that quarter shall be reduced proportionately based upon the
number of calendar days during which it is in effect, and the fee shall be
computed upon the average daily net assets of such Fund for the days during
which it is in effect, subject to the limitations set forth in Section 4(c)
below.
(c) Notwithstanding any provision of Sections 4(a) and (b) or any
other provisions of this Agreement to the contrary, the Adviser hereby
acknowledges and agrees that for the term of this Agreement all
compensation earned by the Adviser under this Agreement will be held in an
interest-bearing escrow account (the "Escrow Account") with the Trust's
custodian, or such other bank as the Adviser and the Trust may agree,
pending the occurrence of one of the following events:
(1) A "majority of the outstanding voting securities" of a Fund
(as defined in the 0000 Xxx) approves the New Advisory Agreement with
the Adviser by the end of the 150 day maximum term of this Agreement
(the "Adviser Approval Event"); or
(2) A "majority of the outstanding voting securities" of a Fund
(as defined in the 0000 Xxx) does not approve the New Advisory
Agreement with the Adviser by the end of the 150 day maximum term of
this Agreement.
If the Adviser Approval Event occurs for any Fund, then the amount in
the Escrow Account (including any interest earned) for such Fund will be
paid to the Adviser. If the Adviser Approval Event does not occur for any
Fund, then upon termination of this Agreement, the Adviser will be promptly
paid, out of the Escrow Account for such non-approving Funds, the lesser of
(i) any costs incurred in performing this Agreement (plus any interest
earned on that amount while in escrow) for such Funds; and (ii) the total
amount in the Escrow Account (plus any interest earned) for such Funds. The
Adviser acknowledges its agreement with the compensation limitations
imposed by this Section 4(c) and hereby waives any and all claims at
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law or in equity to any amount of compensation more than is specifically
provided for in this Section 4(c).
5. PORTFOLIO TRANSACTIONS
In connection with the management of the investment and reinvestment
of Fund assets pursuant to this Agreement, the Adviser, acting by its own
officers, directors or employees, is authorized to select the brokers or
dealers (including brokers and dealers that are affiliated with the Adviser
or the Trust's principal underwriter) that will execute purchase and sale
transactions for the Trust. In executing portfolio transactions and
selecting brokers or dealers, if any, the Adviser will use its best efforts
to seek on behalf of a Fund the best overall terms available, as described
from time to time, in the Trust's Registration Statement. In assessing the
best overall terms available for any transaction, the Adviser shall
consider all factors it deems relevant, including the breadth of the market
in and the price of the security, the financial condition and execution
capability of the broker or dealer, and the reasonableness of the
commission, if any (for the specific transaction and on a continuing
basis). In evaluating the best overall terms available, and in selecting
the broker or dealer, if any, to execute a particular transaction, the
Adviser may also consider the brokerage and research services (as those
terms are defined in Section 28(e) of the 0000 Xxx) provided to any fund of
the Trust. The Adviser may pay to a broker or dealer who provides such
brokerage and research services a commission for executing a portfolio
transaction which is in excess of the amount of commission another broker
or dealer would have charged for effecting the transaction if, but only if,
the Adviser determines in good faith that such commission was reasonable in
relation to the value of the brokerage and research services provided. The
Trust acknowledges that any such research may be useful to the Adviser in
connection with other accounts managed by it. Brokerage transactions for
the Trust may be effected through affiliates of the Adviser if approved by
the Board of Trustees, subject to applicable rules and regulations. The
Adviser will promptly communicate to the officers and the Trustees of the
Trust such information relating to Fund transactions as they may reasonably
request.
6. LIABILITY OF ADVISER
Neither the Adviser nor its officers, directors, employees, agents,
affiliated persons or controlling persons or assigns shall be liable for
any error of judgment or mistake of law or for any loss suffered by the
Trust or its shareholders in connection with the matters to which this
Agreement relates; provided that no provision of this Agreement shall be
deemed to protect the Adviser against any liability to the Trust or its
shareholders resulting from any willful misfeasance, bad faith or gross
negligence in the performance of its duties or obligations hereunder, the
reckless disregard of its duties or obligations hereunder, or breach of its
fiduciary duty to the Trust, any Fund or its shareholders.
7. FORCE MAJEURE
Notwithstanding any other provision of this Agreement, the Adviser
shall not be liable for any loss suffered by the Trust or its shareholders
caused directly or indirectly by circumstances beyond the Adviser's
reasonable control including, without limitation, government restrictions,
exchange or market rulings, suspensions of trading, acts of civil or
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military authority, national emergencies, labor difficulties, fires,
earthquakes, floods or other catastrophes, acts of God, wars, riots or
failures of communication or power supply.
8. DURATION, TERMINATION AND AMENDMENT
a. DURATION. This Agreement shall become effective with respect to a
Fund on the first business day following the consummation of the
Transaction, if, by that date, shareholders of that Fund have not approved
the New Advisory Agreement, and, unless terminated in accordance with its
terms, will continue for a maximum of 150 days; provided, however, this
Agreement will terminate upon the execution of the New Advisory Agreement
after the Adviser Approval Event. For the avoidance of doubt, it is
acknowledged and agreed that if the Transaction is not consummated for any
reason, this Agreement will not go into effect and the Current Advisory
Agreement between the Trust, on behalf of the Funds, and the Adviser will
remain in effect, and any compensation owed by the Trust, on behalf of the
Funds, to the Adviser will be paid pursuant to the terms of the Current
Advisory Agreement.
b. AMENDMENT. Any amendment to this Agreement shall become effective
with respect to a Fund upon approval of the Adviser, and the Board of
Trustees of the Trust, including a majority of the Trustees of the Trust
who are not parties to this Agreement or "interested persons" (as defined
in the 0000 Xxx) of any such party, cast in person at a meeting called for
the purpose of voting on such approval and, if required under the 1940 Act,
a majority of the outstanding voting securities (as defined in the 0000
Xxx) of the Fund.
c. APPROVAL, AMENDMENT OR TERMINATION BY A FUND. Any approval,
amendment or termination of this Agreement with respect to a Fund will not
require the approval of any other Fund or the approval of a majority of the
outstanding voting securities of the Trust, unless such approval is
required by applicable law.
d. AUTOMATIC TERMINATION. This Agreement shall automatically and
immediately terminate in the event of its "assignment" (as defined in the
1940 Act).
e. TERMINATION. This Agreement may be terminated with respect to any
Fund at any time, without payment of any penalty, by vote of the Board of
Trustees of the Trust or by vote of a majority of the outstanding voting
securities (as defined in the 0000 Xxx) of that Fund, or by the Adviser, in
each case on ten (10) calendar days' prior written notice to the other
party; provided, that a shorter notice period shall be permitted for a Fund
in the event its shares are no longer listed on a national securities
exchange.
9. SERVICES NOT EXCLUSIVE
The services of the Adviser to the Trust hereunder are not to be
deemed exclusive, and the Adviser shall be free to render similar services
to others so long as its services hereunder are not impaired thereby. The
Adviser shall be deemed to be an independent contractor and shall, unless
otherwise expressly provided or authorized, have no authority to act for or
represent the Trust in any way or otherwise be deemed an agent of the
Trust.
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10. MISCELLANEOUS
a. NOTICE. Any notice under this Agreement shall be in writing,
addressed and delivered or mailed postage prepaid, to the other party at
such address as such other party may designate in writing for the receipt
of such notices.
b. SEVERABILITY. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder
shall not be thereby affected.
c. APPLICABLE LAW. This Agreement shall be construed in accordance
with and governed by the laws of the State of Delaware and the applicable
provisions of the 1940 Act. To the extent that the applicable laws of the
State of Delaware, or any of the provisions herein, conflict with the
applicable provisions of the 1940 Act, the latter shall control.
d. EXECUTION BY COUNTERPART. This Agreement may be executed in any
number of counterparts, all of which together shall constitute one
agreement.
e. SURVIVAL AFTER TERMINATION. The rights and obligations set forth in
Sections 5 and 7 shall survive the termination of this Agreement.
f. PERMISSIBLE INTERESTS. Trustees, officers, agents and shareholders
of the Trust are or may be interested in the Adviser (or any successor
thereof) as directors, partners, officers, agents, shareholders or
otherwise; directors, partners, officers, agents and shareholders of the
Adviser are or may be interested in the Trust as Trustees, officers,
agents, shareholders or otherwise; and the Adviser (or any successor
thereof) is or may be interested in the Trust as a shareholder or
otherwise.
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IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
executed as of the date first set forth above.
iSHARES TRUST
By: /s/ Xxxx Xxx
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Name: Xxxx Xxx
Title: Chief Financial Officer,
iShares, Trust
BLACKROCK FUND ADVISORS
By: /s/ Xxxxxxxx Xxxxx
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Name: Xxxxxxxx Xxxxx
Title: Managing Director
By: /s/ Xxxxxxx Xxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Managing Director
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SCHEDULE A
TO THE
INTERIM ADVISORY AGREEMENT DATED DECEMBER 1, 2009
BETWEEN
iSHARES TRUST
AND
BLACKROCK FUND ADVISORS
Pursuant to Section 4 of this Agreement, the Company, on behalf of the Funds,
shall pay the Adviser compensation at the following annual rates, subject to the
limitations set forth in Section 4(d) of the Agreement.
