Exhibit 4(b)
SUB-INVESTMENT ADVISORY AGREEMENT
AGREEMENT dated September 29, 2006, between BlackRock Advisors, LLC, a
Delaware limited liability corporation (the "Advisor"), and BlackRock
Institutional Management Corporation, a Delaware corporation (the
"Sub-Advisor").
WHEREAS, the Advisor has agreed to furnish investment advisory services to
the Xxxxxxx Xxxxx Ready Assets Trust, a Massachusetts business trust (the
"Trust"), an open-end management investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Advisor wishes to retain the Sub-Advisor to provide it with
certain sub-advisory services as described below in connection with Advisor's
advisory activities on behalf of the Trust;
WHEREAS, the advisory agreement between the Advisor and the Trust, dated
September 29, 2006 (such agreement or the most recent successor agreement
between such parties relating to advisory services to the Trust is referred to
herein as the "Advisory Agreement") contemplates that the Advisor may
sub-contract investment advisory services with respect to the Trust to a
sub-advisor pursuant to a sub-advisory agreement agreeable to the Trust and
approved in accordance with the provisions of the 1940 Act; and
WHEREAS, this Agreement has been approved in accordance with the
provisions of the 1940 Act, and the Sub-Advisor is willing to furnish such
services upon the terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the mutual premises and covenants
herein contained and other good and valuable consideration, the receipt of which
is hereby acknowledged, it is agreed by and between the parties hereto as
follows:
1. Appointment. The Advisor hereby appoints the Sub-Advisor to act as
sub-advisor with respect to the Trust and the Sub-Advisor accepts such
appointment and agrees to render the services herein set forth for the
compensation herein provided.
2. Services of the Sub-Advisor. Subject to the succeeding provisions of
this section, the oversight and supervision of the Advisor and the direction and
control of the Trustees, the Sub-Advisor will perform certain of the day-to-day
operations of the Trust, which may include one or more of the following
services, at the request of the Advisor: (a) acting as investment advisor for
and managing the investment and reinvestment of those assets of the Trust as the
Advisor may from time to time request and in connection therewith have complete
discretion in purchasing and selling such securities and other assets for the
Trust and in voting, exercising consents and exercising all other rights
appertaining to such securities and other assets on behalf of the Trust; (b)
arranging, subject to the provisions of paragraph 3 hereof, for the purchase and
sale of securities and other assets of the Trust; (c) providing investment
research and credit analysis concerning the Trust's investments, (d) assisting
the Advisor in determining what portion of the Trust's assets will be invested
in cash, cash equivalents and money market instruments, (e) placing orders for
all purchases and sales of such investments made for the
Trust, and (f) maintaining the books and records as are required to support
Trust investment operations. At the request of the Advisor, the Sub-Advisor will
also, subject to the oversight and supervision of the Advisor and the direction
and control of the Trust's Board of Trustees, provide to the Advisor or the
Trust any of the facilities and equipment and perform any of the services
described in Section 3 of the Advisory Agreement. In addition, the Sub-Advisor
will keep the Trust and the Advisor informed of developments materially
affecting the Trust and shall, on its own initiative, furnish to the Trust from
time to time whatever information the Sub-Advisor believes appropriate for this
purpose. The Sub-Advisor will periodically communicate to the Advisor, at such
times as the Advisor may direct, information concerning the purchase and sale of
securities for the Trust, including: (a) the name of the issuer, (b) the amount
of the purchase or sale, (c) the name of the broker or dealer, if any, through
which the purchase or sale is effected, (d) the CUSIP number of the instrument,
if any, and (e) such other information as the Advisor may reasonably require for
purposes of fulfilling its obligations to the Trust under the Advisory
Agreement. The Sub-Advisor will provide the services rendered by it under this
Agreement in accordance with the Trust's investment objectives, policies and
restrictions (as currently in effect and as they may be amended or supplemented
from time to time) as stated in the Trust's Prospectus and Statement of
Additional Information and the resolutions of the Trust's Board of Trustees.
3. Covenants. (a) In the performance of its duties under this Agreement,
the Sub-Advisor shall at all times conform to, and act in accordance with, any
requirements imposed by: (i) the provisions of the 1940 Act and the Investment
Advisers Act of 1940, as amended (the "Advisers Act") and all applicable Rules
and Regulations of the Securities and Exchange Commission (the "SEC"); (ii) any
other applicable provision of law; (iii) the provisions of the Declaration of
Trust and By-Laws of the Trust, as such documents are amended from time to time;
(iv) the investment objectives and policies of the Trust as set forth in the
Registration Statement on Form N-1A and/or the resolutions of the Board of
Trustees; and (v) any policies and determinations of the Board of the Trustees
of the Trust and
(b) In addition, the Sub-Advisor will:
(i) place orders either directly with the issuer or with any
broker or dealer. Subject to the other provisions of this paragraph,
in placing orders with brokers and dealers, the Sub-Advisor will
attempt to obtain the best price and the most favorable execution of
its orders. In placing orders, the Sub-Advisor will consider the
experience and skill of the firm's securities traders as well as the
firm's financial responsibility and administrative efficiency.
Consistent with this obligation, the Sub-Advisor may select brokers
on the basis of the research, statistical and pricing services they
provide to the Trust and other clients of the Advisor or the
Sub-Advisor. Information and research received from such brokers
will be in addition to, and not in lieu of, the services required to
be performed by the Sub-Advisor hereunder. A commission paid to such
brokers may be higher than that which another qualified broker would
have charged for effecting the same transaction, provided that the
Sub-Advisor determines in good faith that such commission is
reasonable in terms either of the transaction or the overall
responsibility of the Advisor and the Sub-Advisor to the Trust and
their other clients and that the total commissions paid by the Trust
will be reasonable in relation to the benefits to the Trust
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over the long-term. Subject to the foregoing and the provisions of
the 1940 Act, the Securities Exchange Act of 1934, as amended, and
other applicable provisions of law, the Sub-Advisor may select
brokers and dealers with which it or the Trust is affiliated;
(ii) maintain books and records with respect to the Trust's
securities transactions and will render to the Advisor and the
Trust's Board of Trustees such periodic and special reports as they
may request;
(iii) maintain a policy and practice of conducting its
investment advisory services hereunder independently of the
commercial banking operations of its affiliates. When the
Sub-Advisor makes investment recommendations for the Trust, its
investment advisory personnel will not inquire or take into
consideration whether the issuer of securities proposed for purchase
or sale for the Trust's account are customers of the commercial
department of its affiliates; and
(iv) treat confidentially and as proprietary information of
the Trust all records and other information relative to the Trust,
and the Trust's prior, current or potential shareholders, and will
not use such records and information for any purpose other than
performance of its responsibilities and duties hereunder, except
after prior notification to and approval in writing by the Trust,
which approval shall not be unreasonably withheld and may not be
withheld where the Sub-Advisor may be exposed to civil or criminal
contempt proceedings for failure to comply, when requested to
divulge such information by duly constituted authorities, or when so
requested by the Trust.
4. Services Not Exclusive. Nothing in this Agreement shall prevent the
Sub-Advisor or any officer, employee or other affiliate thereof from acting as
investment advisor for any other person, firm or corporation, or from engaging
in any other lawful activity, and shall not in any way limit or restrict the
Sub-Advisor or any of its officers, employees or agents from buying, selling or
trading any securities for its or their own accounts or for the accounts of
others for whom it or they may be acting; provided, however, that the
Sub-Advisor will undertake no activities which, in its judgment, will adversely
affect the performance of its obligations under this Agreement.
5. Books and Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Sub-Advisor hereby agrees that all records which it
maintains for the Trust are the property of the Trust and further agrees to
surrender promptly to the Trust any such records upon the Trust's request. The
Sub-Advisor further agrees to preserve for the periods prescribed by Rule 31a-2
under the 1940 Act the records required to be maintained by Rule 31a-1 under the
1940 Act (to the extent such books and records are not maintained by the
Advisor).
6. Expenses. During the term of this Agreement, the Sub-Advisor will bear
all costs and expenses of its employees and any overhead incurred by the
Sub-Advisor in connection with its duties hereunder; provided that the Board of
Trustees of the Trust may approve reimbursement to the Sub-Advisor of the
pro-rata portion of the salaries, bonuses, health insurance, retirement benefits
and all similar employment costs for the time spent on Trust operations
(including, without limitation, compliance matters) (other than the provision of
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investment advice and administrative services required to be provided hereunder)
of all personnel employed by the Sub-Advisor who devote substantial time to
Trust operations or the operations of other investment companies advised or
sub-advised by the Sub-Advisor.
7. Compensation.
(a) The Advisor agrees to pay to the Sub-Advisor and the Sub-Advisor
agrees to accept as full compensation for all services rendered by the
Sub-Advisor as such, a monthly fee in arrears at an annual rate equal to the
amount set forth in Schedule A hereto. For any period less than a month during
which this Agreement is in effect, the fee shall be prorated according to the
proportion which such period bears to a full month of 28, 29, 30 or 31 days, as
the case may be.
(b) For purposes of this Agreement, the net assets of the Trust
shall be calculated pursuant to the procedures adopted by resolutions of the
Trustees of the Trust for calculating the value of the Trust's assets or
delegating such calculations to third parties.
8. Indemnity.
(a) The Trust may, in the discretion of the Board of Trustees of the
Trust, indemnify the Sub-Advisor, and each of the Sub-Advisor's directors,
officers, employees, agents, associates and controlling persons and the
directors, partners, members, officers, employees and agents thereof (including
any individual who serves at the Sub-Advisor's request as director, officer,
partner, member, trustee or the like of another entity) (each such person being
an "Indemnitee") against any liabilities and expenses, including amounts paid in
satisfaction of judgments, in compromise or as fines and penalties, and counsel
fees (all as provided in accordance with applicable state law) reasonably
incurred by such Indemnitee in connection with the defense or disposition of any
action, suit or other proceeding, whether civil or criminal, before any court or
administrative or investigative body in which such Indemnitee may be or may have
been involved as a party or otherwise or with which such Indemnitee may be or
may have been threatened, while acting in any capacity set forth herein or
thereafter by reason of such Indemnitee having acted in any such capacity,
except with respect to any matter as to which such Indemnitee shall have been
adjudicated not to have acted in good faith in the reasonable belief that such
Indemnitee's action was in the best interest of the Trust and furthermore, in
the case of any criminal proceeding, so long as such Indemnitee had no
reasonable cause to believe that the conduct was unlawful; provided, however,
that (1) no Indemnitee shall be indemnified hereunder against any liability to
the Trust or its shareholders or any expense of such Indemnitee arising by
reason of (i) willful misfeasance, (ii) bad faith, (iii) gross negligence or
(iv) reckless disregard of the duties involved in the conduct of such
Indemnitee's position (the conduct referred to in such clauses (i) through (iv)
being sometimes referred to herein as "disabling conduct"), (2) as to any matter
disposed of by settlement or a compromise payment by such Indemnitee, pursuant
to a consent decree or otherwise, no indemnification either for said payment or
for any other expenses shall be provided unless there has been a determination
that such settlement or compromise is in the best interests of the Trust and
that such Indemnitee appears to have acted in good faith in the reasonable
belief that such Indemnitee's action was in the best interest of the Trust and
did not involve disabling conduct by such Indemnitee and (3) with respect to any
action, suit or other proceeding voluntarily prosecuted by any Indemnitee as
plaintiff,
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indemnification shall be mandatory only if the prosecution of such action, suit
or other proceeding by such Indemnitee was authorized by a majority of the full
Board of Trustees of the Trust.
(b) The Trust shall make advance payments in connection with the
expenses of defending any action with respect to which indemnification might be
sought hereunder if the Trust receives a written affirmation of the Indemnitee's
good faith belief that the standard of conduct necessary for indemnification has
been met and a written undertaking to reimburse the Trust unless it is
subsequently determined that such Indemnitee is entitled to such indemnification
and if the Trustees of the Trust determine that the facts then known to them
would not preclude indemnification. In addition, at least one of the following
conditions must be met: (A) the Indemnitee shall provide a security for such
Indemnitee's undertaking, (B) the Trust shall be insured against losses arising
by reason of any unlawful advance, or (C) a majority of a quorum consisting of
Trustees of the Trust who are neither "interested persons" of the Trust (as
defined in Section 2(a)(19) of the 0000 Xxx) nor parties to the proceeding
("Disinterested Non-Party Trustees") or an independent legal counsel in a
written opinion, shall determine, based on a review of readily available facts
(as opposed to a full trial-type inquiry), that there is reason to believe that
the Indemnitee ultimately will be found entitled to indemnification.
(c) All determinations with respect to the standards for
indemnification hereunder shall be made (1) by a final decision on the merits by
a court or other body before whom the proceeding was brought that such
Indemnitee is not liable by reason of disabling conduct, or (2) in the absence
of such a decision, by (i) a majority vote of a quorum of the Disinterested
Non-Party Trustees of the Trust, or (ii) if such a quorum is not obtainable or
even, if obtainable, if a majority vote of such quorum so directs, independent
legal counsel in a written opinion. All determinations that advance payments in
connection with the expense of defending any proceeding shall be authorized
shall be made in accordance with the immediately preceding clause (2) above.
The rights accruing to any Indemnitee under these provisions shall not
exclude any other right to which such Indemnitee may be lawfully entitled.
9. Limitation on Liability.
(a) The Sub-Advisor will not be liable for any error of judgment or
mistake of law or for any loss suffered by the Advisor or by the Fund in
connection with the performance of this Agreement, except a loss resulting from
a breach of fiduciary duty with respect to the receipt of compensation for
services or a loss resulting from willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or from reckless
disregard by it of its duties under this Agreement. As used in this Section
9(a), the term "Sub-Advisor" shall include any affiliates of the Sub-Advisor
performing services for the Fund contemplated hereby and partners, directors,
officers and employees of the Sub-Advisor and such affiliates.
(b) Notwithstanding anything to the contrary contained in this
Agreement, the parties hereto acknowledge and agree that, as provided in Section
5.1 of the Declaration of Trust, this Agreement is executed by the Trustees
and/or officers of the Fund, not individually but as
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such Trustees and/or officers of the Fund, and the obligations hereunder are not
binding upon any of the Trustees or Shareholders individually but bind only the
estate of the Fund.
10. Duration and Termination. This Agreement shall become effective as of
the date hereof and, unless sooner terminated with respect to the Trust as
provided herein, shall continue in effect for a period of two years. Thereafter,
if not terminated, this Agreement shall continue in effect with respect to the
Trust for successive periods of 12 months, provided such continuance is
specifically approved at least annually by both (a) the vote of a majority of
the Trust's Board of Trustees or a vote of a majority of the outstanding voting
securities of the Trust at the time outstanding and entitled to vote and (b) by
the vote of a majority of the Trustees, who are not parties to this Agreement or
interested persons (as such term is defined in the 0000 Xxx) of any such party,
cast in person at a meeting called for the purpose of voting on such approval.
Notwithstanding the foregoing, this Agreement may be terminated by the Trust or
the Advisor at any time, without the payment of any penalty, upon giving the
Sub-Advisor 60 days' notice (which notice may be waived by the Sub-Advisor),
provided that such termination by the Trust or the Advisor shall be directed or
approved by the vote of a majority of the Trustees of the Trust in office at the
time or by the vote of the holders of a majority of the voting securities of the
Trust at the time outstanding and entitled to vote, or by the Sub-Advisor on 60
days' written notice (which notice may be waived by the Trust and the Advisor),
and will terminate automatically upon any termination of the Advisory Agreement
between the Trust and the Advisor. This Agreement will also immediately
terminate in the event of its assignment. (As used in this Agreement, the terms
"majority of the outstanding voting securities," "interested person" and
"assignment" shall have the same meanings of such terms in the 1940 Act.)
11. Notices. Any notice under this Agreement shall be in writing to the
other party at such address as the other party may designate from time to time
for the receipt of such notice and shall be deemed to be received on the earlier
of the date actually received or on the fourth day after the postmark if such
notice is mailed first class postage prepaid.
12. Amendment of this Agreement. This Agreement may be amended by the
parties only if such amendment is specifically approved by the vote of the Board
of Trustees of the Trust, including a majority of those Trustees who are not
parties to this Agreement or interested persons of any such party cast in person
at a meeting called for the purpose of voting on such approval and, where
required by the 1940 Act, by a vote of a majority of the outstanding voting
securities of the Trust.
13. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding on, and shall inure to the
benefit of the parties hereto and their respective successors.
14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York for contracts to be performed
entirely therein without reference to choice of law principles thereof and in
accordance with the applicable provisions of the 1940 Act. To the extent that
the applicable laws of the State of New York, or
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any of the provisions, conflict with the applicable provisions of the 1940 Act,
the latter shall control.
15. Counterparts. This Agreement may be executed in counterparts by the
parties hereto, each of which shall constitute an original counterpart, and all
of which, together, shall constitute one Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their duly authorized officers designated below as of the day and
year first above written.
BLACKROCK ADVISORS, LLC
By:
---------------------------------
Name: Xxxxxx X. Xxxxx
Title: Managing Director
BLACKROCK INSTITUTIONAL MANAGEMENT CORPORATION
By:
---------------------------------
Name:
Title:
AGREED AND ACCEPTED
as of the date first set forth above
XXXXXXX XXXXX READY ASSETS TRUST
By:
------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
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Schedule A
Sub-Investment Advisory Fee
59% of the monthly advisory fee received by the Advisor from the Trust.
