INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT made as of the 24th day of May 2016 by and
between AdvisorShares Investments, LLC, a Delaware limited
liability company with its principal place of business at 0000
Xxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxx 00000 (the
"Adviser"), and AthenaInvest Advisors LLC, a Colorado limited
liability company with its principal place of business at 0000
Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxx Xxxxxxx, Xxxxxxxx 00000 (the
"Sub-Adviser").
WHEREAS, AdvisorShares Trust, a Delaware statutory trust
(the "Trust"), is registered as an open-end management
investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment
Advisory Agreement with the Trust dated June 2, 2009 (the
"Advisory Agreement"), pursuant to which the Adviser acts as
investment adviser to the series of the Trust set forth on
Schedule A attached hereto (each a "Fund" and, collectively, the
"Funds"), as such schedule may be amended by mutual agreement of
the parties hereto; and
WHEREAS, the Adviser and Sub-Adviser previously entered
into an Investment Sub-Advisory Agreement dated July 1, 2013,
pursuant to which the Adviser, with the approval of the Trust,
retained the Sub-Adviser to provide investment sub-advisory
services; and
WHEREAS, the previous agreement between the Adviser and the
Sub-Adviser terminated and the Adviser and the Sub-Adviser
desire to enter into this Agreement to continue the sub-advisory
arrangement as described herein;
NOW, THEREFORE, the parties hereto agree as follows:
1. Duties of the Sub-Adviser. Subject to the oversight and
supervision of the Adviser and the Trust's Board of
Trustees and consistent with its fiduciary duties to the
Funds, the Sub-Adviser shall manage all of the securities
and other assets of a Fund entrusted to it hereunder (the
"Assets"), including the purchase, retention and
disposition of the Assets, in accordance with the Fund's
investment objectives, policies and restrictions as stated
in the Fund's prospectus and statement of additional
information, as currently in effect and as amended or
supplemented from time to time (referred to collectively as
the "Prospectus"), and subject to the following:
(a) The Sub-Adviser shall, subject to subparagraph (b),
determine from time to time what Assets will be
purchased, retained or sold by the Fund, and what
portion of the Assets will be invested or held
uninvested in cash.
(b) In the performance of its duties and obligations under
this Agreement, the Sub-Adviser shall act in
conformity with the Trust's Declaration of Trust (as
defined herein) and the Prospectus and with the
instructions and directions of the Adviser and of the
Board of Trustees of the Trust and will conform to and
comply with the requirements of the 1940 Act, the
Internal Revenue Code of 1986, as amended (the
"Code"), and all other applicable federal and state
laws and regulations, as each is amended from time to
time.
(c) The Sub-Adviser shall determine the Assets to be
purchased or sold by the Fund as provided in
subparagraph (a) and will place orders with or through
such issuers, brokers or dealers to carry out the
policy with respect to brokerage set forth in the
Fund's Prospectus or as the Board of Trustees or the
Adviser may direct in writing from time to time, in
conformity with all federal securities laws. In
executing Fund transactions and selecting brokers or
dealers, the Sub-Adviser will use its best efforts to
seek, on behalf of the Fund the best overall terms
available. In assessing the best overall terms
available for any transaction, the Sub-Adviser shall
consider all factors that it deems relevant, including
the breadth of the market in the security, the price
of the security, the financial condition and execution
capability of the broker or dealer, and the
reasonableness of the commission, if any, both for the
specific transaction and on a continuing basis. In
evaluating the best overall terms available, and in
selecting the broker-dealer to execute a particular
transaction, the Sub-Adviser may also consider the
brokerage and research services provided (as those
terms are defined in Section 28(e) of the Securities
Exchange Act of 1934 (the "Exchange Act")).
Consistent with any guidelines established by the
Board of Trustees of the Trust and Section 28(e) of
the Exchange Act, the Sub-Adviser is authorized to pay
to a broker or dealer who provides such brokerage and
research services a commission for executing a
portfolio transaction for the Fund that is in excess
of the amount of commission another broker or dealer
would have charged for effecting that transaction if,
but only if, the Sub-Adviser determines in good faith
that such commission was reasonable in relation to the
value of the brokerage and research services provided
by such broker or dealer -- viewed in terms of that
particular transaction or in terms of the overall
responsibilities of the Sub-Adviser to its
discretionary clients, including the Fund. In
addition, the Sub-Adviser is authorized to allocate
purchase and sale orders for securities to brokers or
dealers (including brokers and dealers that are
affiliated with the Adviser, Sub-Adviser or the
Trust's principal underwriter) if the Sub-Adviser
believes that the quality of the transaction and the
commission are comparable to what they would be with
other qualified firms. In no instance, however, will
the Assets be purchased from or sold to the Adviser,
the Sub-Adviser, the Trust's principal underwriter, or
any affiliated person of either the Trust, the
Adviser, the Sub-Adviser or the principal underwriter,
acting as principal in the transaction, except to the
extent permitted by the Securities and Exchange
Commission ("SEC") and the 1940 Act.
(d) The Sub-Adviser shall maintain all books and records
with respect to transactions involving the Assets
required by subparagraphs (b)(1), (5), (6), (7), (9),
(10) and (11) and paragraph (f) of Rule 31a-1 under
the 1940 Act. The Sub-Adviser shall keep the books
and records relating to the Assets required to be
maintained by the Sub-Adviser under this Agreement and
shall timely furnish to the Adviser all information
relating to the Sub-Adviser's services under this
Agreement needed by the Adviser to keep the other
books and records of the Fund required by Rule 31a-1
under the 1940 Act. The Sub-Adviser agrees that all
records that it maintains on behalf of the Fund are
property of the Fund and the Sub-Adviser will
surrender promptly to the Fund any of such records
upon the Fund's request; provided, however, that the
Sub-Adviser may retain a copy of such records. In
addition, for the duration of this Agreement, the Sub-
Adviser shall preserve for the periods prescribed by
Rule 31a-2 under the 1940 Act any such records as are
required to be maintained by it pursuant to this
Agreement, and shall transfer said records to any
successor sub-adviser upon the termination of this
Agreement (or, if there is no successor sub-adviser,
to the Adviser).
(e) The Sub-Adviser shall provide the Fund's custodian on
each business day with information relating to all
transactions concerning the Assets and shall provide
the Adviser with such information upon request of the
Adviser.
(f) The Sub-Adviser shall promptly notify the Adviser of
any financial condition that is reasonably likely to
impair the Sub-Adviser's ability to fulfill its
commitment under this Agreement.
(g) The Sub-Adviser shall be responsible for reviewing
proxy solicitation materials or voting and handling
proxies in relation to the securities held as Assets
in the Fund.
(h) In performance of its duties and obligations under
this Agreement, the Sub-Adviser shall not consult with
any other sub-adviser to the Fund or a sub-adviser to
any other series of the Trust or portfolio that is
under common control with the Fund concerning the
Assets, except as permitted by the policies and
procedures of the Fund. The Sub-Adviser shall not
provide investment advice with respect to any assets
of the Fund other than the Assets. This limitation
will not prohibit the Sub-Adviser from consulting with
the Adviser.
(i) On occasions when the Sub-Adviser deems the purchase
or sale of a security to be in the best interest of
the Fund as well as other clients of the Sub-Adviser,
the Sub-Adviser may, to the extent permitted by
applicable law and regulations, aggregate the order
for securities to be sold or purchased. In such
event, the Sub-Adviser will allocate securities so
purchased or sold, as well as the expenses incurred in
the transaction, in a manner the Sub-Adviser
reasonably considers to be equitable and consistent
with its fiduciary obligations to the Fund and to such
other clients under the circumstances.
(j) The Sub-Adviser shall furnish to the Adviser or the
Board of Trustees such periodic and special reports,
balance sheets or financial information, and such
other information with regard to its affairs as the
Adviser or Board of Trustees may reasonably request.
Upon the request of the Adviser, the Sub-Adviser shall
also furnish to the Adviser any other information
relating to the Assets that is required to be filed by
the Adviser or the Trust with the SEC or sent to
shareholders under the 1940 Act (including the rules
adopted thereunder) or any exemptive or other relief
that the Adviser or the Trust obtains from the SEC.
(k) The Sub-Adviser shall furnish to the Adviser a monthly
portfolio manager commentary within ten (10) business
days of each month-end.
To the extent permitted by law, the services to be
furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's
partners, officers, employees or control affiliates;
provided, however, that the use of such mediums does not
relieve the Sub-Adviser from any obligation or duty under
this Agreement.
2. Duties of the Adviser. The Adviser shall continue to have
responsibility for all services to be provided to the Fund
pursuant to the Advisory Agreement and shall oversee and
review the Sub-Adviser's performance of its duties under
this Agreement; provided, however, that in connection with
its management of the Assets, nothing herein shall be
construed to relieve the Sub-Adviser of responsibility for
compliance with the Trust's Declaration of Trust (as
defined herein), the Prospectus, the instructions and
directions of the Board of Trustees of the Trust, the
requirements of the 1940 Act, the Code, and all other
applicable federal and state laws and regulations, as each
is amended from time to time.
3. Exclusivity of Exchange-Traded Fund Investment Management
Services. The investment management services provided by
the Sub-Adviser under this Agreement with respect to
managing the exchange-traded funds listed in Schedule A
("ETF") are to be deemed exclusive and the Sub-Adviser
shall not be free to render similar services to other ETFs
for a period of three (3) years following the date on which
the Sub-Adviser ceases to provide such services to the
Adviser and/or the Trust. The Adviser acknowledges that
the Sub-Adviser performs or in the future may perform
investment advisory services for various other exchange-
traded funds and other clients and, to the extent it is
consistent with applicable law and the Sub-Adviser's
fiduciary obligations, the Sub-Adviser may give advice and
take action with respect to any of those other funds and
clients that will differ from the advice given or the
timing or nature of action taken for the Fund.
4. Delivery of Documents. The Adviser has furnished the Sub-
Adviser with copies of each of the following documents:
(a) The Trust's Agreement and Declaration of Trust, as
filed with the Secretary of State of Delaware (such
Agreement and Declaration of Trust, as in effect on
the date of this Agreement and as amended from time to
time, herein called the "Declaration of Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on
the date of this Agreement and as amended from time to
time, are herein called the "By-Laws");
(c) Prospectus of the Fund;
(d) Resolutions of the Trust's Board of Trustees approving
the engagement of the Sub-Adviser as a sub-adviser to
the Fund;
(e) Resolutions, policies and procedures adopted by the
Trust's Board of Trustees with respect to the Assets
to the extent such resolutions, policies and
procedures may affect the duties of the Sub-Adviser
hereunder;
(f) A list of the Trust's principal underwriter and each
affiliated person of the Adviser, the Trust, or the
principal underwriter; and
(g) A list of each other investment sub-adviser to the
Fund.
The Adviser shall promptly furnish the Sub-Adviser with
copies of all amendments of or supplements to the
foregoing. Until so provided, the Sub-Adviser may continue
to rely on those documents previously provided. The
Adviser shall not, and shall not permit the Fund to use the
Sub-Adviser's name or make representations regarding the
Sub-Adviser or its affiliates without the prior written
consent of the Sub-Adviser, which consent shall not be
unreasonably withheld. Notwithstanding the foregoing, the
Sub-Adviser's approval is not required when the information
regarding the Sub-Adviser used by the Adviser or the Fund
is limited to information disclosed in materials provided
by the Sub-Adviser to the Adviser and the information is
used (a) as required by applicable law, rule, or
regulation, in the Prospectus or in Fund shareholder
reports or proxy statements; (b) in Adviser communications;
or (c) as may be otherwise specifically approved in writing
by the Sub-Adviser prior to use.
5. Compensation to the Sub-Adviser. For the services to be
provided by the Sub-Adviser pursuant to this Agreement, the
Adviser will pay the Sub-Adviser, and the Sub-Adviser
agrees to accept as full compensation therefor, a sub-
advisory fee at the rate specified in Schedule A, which is
attached hereto and made part of this Agreement. The fee
will be calculated based on the average daily value of the
Assets under the Sub-Adviser's management and will be paid
to the Sub-Adviser monthly. For the avoidance of doubt,
notwithstanding the fact that the Agreement has not been
terminated, no fee will be accrued under this Agreement
with respect to any day that the value of the Assets under
the Sub-Adviser's management equals zero. Except as may
otherwise be prohibited by law or regulation (including any
then current SEC staff interpretation), the Sub-Adviser
may, in its discretion and from time to time, waive a
portion of its fee.
Except for expenses assumed or agreed to be paid by the
Sub-Adviser pursuant hereto, the Sub-Adviser shall not be
liable for any costs or expenses of the Trust including,
without limitation, (a) interest and taxes, (b) brokerage
commissions and other costs in connection with the purchase
or sale of securities or other investment instruments with
respect to the Fund, (c) custodian and administrative fees;
and (d) accounting and legal expenses. The Sub-Adviser
will pay its own expenses incurred in furnishing the
services to be provided by it pursuant to this Agreement.
6. Indemnification. The Sub-Adviser shall indemnify and hold
harmless the Adviser from and against any and all claims,
losses, liabilities, or damages (including reasonable
attorney's fees and other related expenses) (collectively,
"Losses") arising from the Sub-Adviser's willful
misfeasance, bad faith, gross negligence, or reckless
disregard of its duties under this Agreement in the
performance of its obligations under this Agreement;
provided, however, that the Sub-Adviser's obligation under
this Paragraph 6 shall be reduced to the extent that the
claim against, or the loss, liability, or damage
experienced by the Adviser, is caused by or is otherwise
directly related to (i) any breach by the Adviser of its
representations or warranties made herein, (ii) any willful
misconduct, bad faith, reckless disregard or negligence of
the Adviser in the performance of any of its duties or
obligations hereunder, or (iii) any untrue statement of a
material fact contained in the Prospectus or SAI, proxy
materials, reports, advertisements, sales literature, or
other materials pertaining to the Fund(s) or the omission
to state therein a material fact known to the Adviser that
was required to be stated therein or necessary to make the
statements therein not misleading, if such statement or
omission was made in reliance upon information furnished to
the Sub-Adviser or the Trust, or the omission of such
information, by the Adviser for use therein.
The Adviser shall indemnify and hold harmless the Sub-
Adviser from and against any and all Losses arising from
the Adviser's willful misfeasance, bad faith, gross
negligence, or reckless disregard of its duties under this
Agreement in the performance of its obligations under this
Agreement; provided, however, that the Adviser's obligation
under this Paragraph 6 shall be reduced to the extent that
the claim against, or the loss, liability, or damage
experienced by the Sub-Adviser, is caused by or is
otherwise directly related to (i) any breach by the Sub-
Adviser of its representations or warranties made herein,
(ii) any willful misconduct, bad faith, reckless disregard
or negligence of the Sub-Adviser in the performance of any
of its duties or obligations hereunder, or (iii) any untrue
statement of a material fact contained in the Prospectus or
SAI, proxy materials, reports, advertisements, sales
literature, or other materials pertaining to the Fund(s) or
the omission to state therein a material fact known to the
Sub-Adviser that was required to be stated therein or
necessary to make the statements therein not misleading, if
such statement or omission was made in reliance upon
information furnished to the Adviser or the Trust, or the
omission of such information, by the Sub-Adviser for use
therein.
A party seeking indemnification hereunder (the "Indemnified
Party") will (i) provide prompt notice to the other of any
claim ("Claim") for which it intends to seek
indemnification, (ii) grant control of the defense and /or
settlement of the Claim to the other party, and (iii)
cooperate with the other party in the defense thereof. The
Indemnified Party will have the right at its own expense to
participate in the defense of any Claim, but will not have
the right to control the defense, consent to judgment or
agree to the settlement of any Claim without the written
consent of the other party. The party providing the
indemnification will not consent to the entry of any
judgment or enter any settlement which (i) does not
include, as an unconditional term, the release by the
claimant of all liabilities for Claims against the
Indemnified Party or (ii) which otherwise adversely affects
the rights of the Indemnified Party.
No party will be liable to another party for consequential
damages under any provision of this Agreement.
7. Trust and Sub-Advisor Shareholder Liability. The Sub-
Adviser is hereby expressly put on notice of the limitation
of shareholder liability as set forth in the Declaration of
Trust and agrees that obligations assumed by the Trust
pursuant to this Agreement will be limited in all cases to
the Trust and its assets, and if the liability relates to
one series, the obligations hereunder will be limited to
the respective assets of that series. The Sub-Adviser
further agrees that it will not seek satisfaction of any
such obligation from the shareholders or any individual
shareholder of a Fund, nor from the Trustees or any
individual Trustee of the Trust. Similarly, Advisor agrees
that liability for obligations assumed by Sub-Advisor
pursuant to this Agreement will be limited in all cases to
Sub-Advisor and its assets. Adviser further agrees that
neither it nor the Trust will seek satisfaction of any such
obligation from the shareholders or any director or officer
of Sub-Advisor.
8. Representations and Warranties of Sub-Adviser and Adviser.
(a) The Sub-Adviser represents and warrants to the
Adviser and the Funds as follows:
(i) The Sub-Adviser is registered as an
investment adviser under the Investment Advisers
Act of 1940, as amended (the "Advisers Act");
(ii) The Sub-Adviser will immediately notify the
Adviser of the occurrence of any event that would
disqualify the Sub-Adviser from serving as an
investment adviser of an investment company
pursuant to Section 9(a) of the 1940 Act;
(iii) The Sub-Adviser is fully authorized under
all applicable law to serve as Sub-Adviser to the
Funds and to perform the services described under
this Agreement;
(iv) The Sub-Adviser is [a (insert form of
business, e.g., limited liability company)] duly
organized and validly existing under the laws of
the state of [State] with the power to own and
possess its assets and carry on its business as
it is now being conducted;
(v) The execution, delivery, and performance by the
Sub-Adviser of this Agreement are within the Sub-
Adviser's powers and have been duly authorized by
all necessary action on the part of its members,
and no action by or in respect of, or filing
with, any governmental body, agency, or official
is required on the part of the Sub-Adviser for
the execution, delivery, and performance by the
Sub-Adviser of this Agreement, and the execution,
delivery and performance by the Sub-Adviser of
this Agreement do not contravene or constitute a
default under (i) any provision of applicable
law, rule, or regulation, (ii) the Sub-Adviser's
governing instruments, or (iii) any agreement,
judgment, injunction, order, decree, or other
instrument binding upon the Sub-Adviser;
(vi) This Agreement is a valid and binding agreement
of the Sub-Adviser;
(vii) The Form ADV of the Sub-Adviser previously
provided to the Adviser is a true and complete
copy of the form filed with the SEC and the
information contained therein is accurate and
complete in all material respects as of its
filing date, and does not omit any material fact
necessary to make the statements made, in light
of the circumstances under which they were made,
not misleading; and
(viii) The Sub-Adviser shall not divert any of the
Fund's portfolio securities transactions to a
broker or dealer in consideration of such broker
or dealer's promotion or sales of shares of the
Fund, any other series of the Trust, or any other
registered investment company.
(ix) The Sub-Adviser understands the unique
characteristics of the Fund as an actively
managed exchange-traded fund (i.e., a novel
investment vehicle in a limited market) and will
use its best efforts to educate the investing
public about the investment objectives and
investment strategies of the Fund in an effort to
expand the Fund's shareholder base. The Sub-
Advisor further understands that any
participation with other investment vehicles in
the Fund's limited marketplace may be construed
by the Adviser as detrimental to the Fund and
cause for termination.
(b) The Adviser represents and warrants to the Sub-
Adviser as follows:
(i) The Adviser is registered as an investment
adviser under the Advisers Act;
(ii) The Adviser will immediately notify the Sub-
Adviser of the occurrence of any event that would
disqualify the Adviser from serving as an
investment adviser of an investment company
pursuant to Section 9(a) of the 1940 Act;
(iii) The Adviser is fully authorized under all
applicable law to serve as Adviser to the Funds
and to perform the services described under this
Agreement;
(iv) The Adviser is a limited liability company duly
organized and validly existing under the laws of
the state of Delaware with the power to own and
possess its assets and carry on its business as
it is now being conducted;
(v) The execution, delivery, and performance by the
Adviser of this Agreement are within the
Adviser's powers and have been duly authorized by
all necessary action on the part of its members,
and no action by or in respect of, or filing
with, any governmental body, agency, or official
is required on the part of the Adviser for the
execution, delivery, and performance by the
Adviser of this Agreement, and the execution,
delivery, and performance by the Adviser of this
Agreement do not contravene or constitute a
default under (i) any provision of applicable
law, rule, or regulation, (ii) the Adviser's
governing instruments, or (iii) any agreement,
judgment, injunction, order, decree, or other
instrument binding upon the Adviser; and
(vi) This Agreement is a valid and binding
agreement of the Adviser.
9. Duration and Termination.
(a) Duration. This Agreement shall become effective upon
the date first above written, provided that this
Agreement shall not take effect with respect to the
Funds unless it has first been approved by a vote of a
majority of those Trustees of the Trust, 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. This Agreement
shall continue in effect for a period of two years
from the date hereof, subject thereafter to being
continued in force and effect from year to year if
specifically approved each year by the Board of
Trustees or by the vote of a majority of the Fund's
outstanding voting securities. In addition to the
foregoing, each renewal of this Agreement must be
approved by the vote of a majority of the Fund's
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. Prior to voting on the renewal of this
Agreement, the Board of Trustees of the Fund may
request and evaluate, and the Sub-Adviser shall
furnish, such information as may reasonably be
necessary to enable the Trust's Board of Trustees to
evaluate the terms of this Agreement.
(b) Termination. Notwithstanding whatever may be provided
herein to the contrary, this Agreement may be
terminated at any time, without payment of any
penalty:
(i) By vote of a majority of the Board of Trustees of
the Fund, or by vote of a majority of the
outstanding voting securities of the Fund, or by
the Adviser, in each case, upon sixty (60) days'
written notice to the Sub-Adviser;
(ii) By the Adviser upon breach by the Sub-Adviser of
any representation or warranty contained in
Paragraphs 8 and 10 hereof, if such breach has
not been cured within twenty (20) days of the
Sub-Adviser's receipt of written notice of such
breach;
(iii) By the Adviser immediately upon written
notice to the Sub-Adviser if the Sub-Adviser
becomes unable to discharge its duties and
obligations under this Agreement; or
(iv) By the Sub-Adviser upon one hundred twenty (120)
days' written notice to the Adviser and the Fund.
This Agreement shall terminate automatically and
immediately in the event of its assignment, or in the
event of a termination of the Advisory Agreement with
the Trust. As used in this Paragraph 9, the terms
"assignment" and "vote of a majority of the
outstanding voting securities" shall have the
respective meanings set forth in the 1940 Act and the
rules and regulations thereunder, subject to such
exceptions as may be granted by the SEC under the 1940
Act.
10. Compliance Program of the Sub-Adviser. The Sub-Adviser
hereby represents and warrants that:
(a) in accordance with Rule 206(4)-7 under the Advisers
Act, the Sub-Adviser has adopted and implemented and
will maintain written policies and procedures
reasonably designed to prevent violation by the Sub-
Adviser and its supervised persons (as such term is
defined in the Advisers Act) of the Advisers Act and
the rules the SEC has adopted under the Advisers Act;
and
(b) to the extent that the Sub-Adviser's activities or
services could affect the Fund, the Sub-Adviser has
adopted and implemented and will maintain written
policies and procedures that are reasonably designed
to prevent violation of the "federal securities laws"
(as such term is defined in Rule 38a-1 under the 0000
Xxx) by the Fund and the Sub-Adviser (the policies and
procedures referred to in this Paragraph 10(b), along
with the policies and procedures referred to in
Paragraph 10(a), are referred to herein as the Sub-
Adviser's "Compliance Program").
11. Confidentiality. Subject to the duty of the Adviser or
Sub-Adviser to comply with applicable law, including any
demand of any regulatory or taxing authority having
jurisdiction, the parties hereto shall treat as
confidential all non-public information pertaining to the
Fund and the actions of the Sub-Adviser and the Fund in
respect thereof. It is understood that any information or
recommendation supplied by the Sub-Adviser in connection
with the performance of its obligations hereunder
exclusively pertaining to the Fund is to be regarded as
confidential and for use only by the Adviser, the Fund, the
Board of Trustees, or such persons as the Adviser may
designate in connection with the Fund. It is also
understood that any information supplied to the Sub-Adviser
in connection with the performance of its obligations
hereunder, particularly, but not limited to, any list of
investments which, on a temporary basis, may not be bought
or sold for the Fund, is to be regarded as confidential and
for use only by the Sub-Adviser in connection with its
obligation to provide investment advice and other services
to the Fund. The parties acknowledge and agree that all
nonpublic personal information with regard to shareholders
in the Fund shall be deemed proprietary information of the
Adviser, and that the Sub-Advisor shall use that
information solely in the performance of its duties and
obligations under this Agreement and shall take reasonable
steps to safeguard the confidentiality of that information.
Further, the Sub-Adviser shall maintain and enforce
adequate security procedures with respect to all materials,
records, documents, and data relating to any of its
responsibilities pursuant to this Agreement, including all
means for the effecting of investment transactions.
12. Reporting of Compliance Matters.
(a) The Sub-Adviser shall promptly provide to the Trust's
Chief Compliance Officer ("CCO") the following
documents:
(i) reasonable access, at the Sub-Adviser's principal
office or such other place as may be mutually
agreed to by the parties, to all SEC examination
correspondences, including correspondences
regarding books and records examinations and
"sweep" examinations, issued during the term of
this Agreement, in which the SEC identified any
concerns, issues, or matters (such
correspondences are commonly referred to as
"deficiency letters") relating to any aspect of
the Sub-Adviser's investment advisory business
and the Sub-Adviser's responses thereto; provided
that the Sub-Adviser may redact from such
correspondences client specific confidential
information, material subject to the attorney-
client privilege, and material non-public
information, that the Sub-Adviser reasonably
determines should not be disclosed to the Trust's
CCO;
(ii) a report of any material violations of the Sub-
Adviser's Compliance Program or any "material
compliance matters" (as such term is defined in
Rule 38a-1 under the 0000 Xxx) that have occurred
with respect to the Sub-Adviser's Compliance
Program;
(iii) on a quarterly basis, a report of any
material changes to the policies and procedures
that compose the Sub-Adviser's Compliance
Program;
(iv) a copy of the Sub-Adviser's chief compliance
officer's report (or similar document(s) that
serve the same purpose) regarding his or her
annual review of the Sub-Adviser's Compliance
Program, as required by Rule 206(4)-7 under the
Advisers Act; and
(v) an annual (or more frequently as the Trust's CCO
may reasonably request) representation regarding
the Sub-Adviser's compliance with Paragraphs 8
and 10 of this Agreement.
(b) The Sub-Adviser shall also provide the Trust's CCO
with reasonable access, during normal business hours,
to the Sub-Adviser's facilities or personnel for the
purpose of conducting pre-arranged on-site compliance
related due diligence meetings with personnel of the
Sub-Adviser.
13. Use of Intellectual Property by the Sub-Adviser. The
Adviser grants to the Sub-Adviser a sublicense to use the
trademarks, service marks, logos, names, or any other
proprietary designations of the Adviser ("AdvisorShares
Marks") on a non-exclusive basis. The Sub-Adviser will
acquire no rights in the AdvisorShares Marks, and all
goodwill of the AdvisorShares Marks shall inure to and
remain with the Adviser. The Sub-Adviser agrees that
neither it, nor any of its affiliates, will knowingly in
any way refer directly or indirectly to its relationship
with the Trust, the Fund(s), the Adviser or any of their
respective affiliates or use AdvisorShares Marks in
offering, marketing or other promotional materials without
the prior express written consent of the Adviser, which
approval will not be unreasonably withheld or delayed,
except as required by rule, regulation or upon the request
of a governmental authority. Notwithstanding the forgoing,
the Sub-Adviser and its affiliates may, without obtaining
the Adviser's prior approval, refer directly or indirectly
to its relationship with the Trust, the Fund(s), the
Adviser or any of their respective affiliates and use
AdvisorShares Marks in offering, marketing or other
promotional materials provided that such materials were
previously approved by the Adviser and remain in
substantially the same form.
14. Use of Intellectual Property by the Adviser. The Sub-
Adviser grants to the Adviser a sublicense to use the
trademarks, service marks, logos, names, or any other
proprietary designations of the Sub-Adviser ("Sub-Adviser
Marks") on a non-exclusive basis. The Adviser will acquire
no rights in the Sub-Adviser Marks, and all goodwill of the
Sub-Adviser Marks shall inure to and remain with the Sub-
Adviser. Advisor acknowledges that in the performance of
services hereunder Sub-Advisor utilizes certain proprietary
information and methodology, including but not limited to
registered and pending patents, and Advisor receives and
Sub-Advisor grants no rights as to Sub-Advisor's
proprietary information and methodology.
15. Governing Law. This Agreement shall be governed by the
internal laws of the State of Delaware, without regard to
conflict of law principles; provided, however, that nothing
herein shall be construed as being inconsistent with the
1940 Act.
16. Interpretation and Severability. Where the effect of a
requirement of the 1940 Act or Advisers Act reflected in
any provision of this Agreement is altered by a rule,
regulation, or order of the SEC, whether of special or
general application, such provision shall be deemed to
incorporate the effect of such rule, regulation, or order.
Should any part of this Agreement be held invalid by a
court decision, statute, rule or otherwise, the remainder
of this Agreement shall not be affected thereby. This
Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective
successors.
17. Notice. Any notice, advice, or report to be given pursuant
to this Agreement shall be deemed sufficient if delivered
or mailed by registered, certified, or overnight mail,
postage prepaid, and addressed by the party giving notice
to the last address furnished by the other party:
To the Adviser at:
AdvisorShares Investments, LLC
0000 Xxxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Legal Department
AdvisorShares Investments, LLC
0000 X. Xxxxxxx Xxxxxxxxxx
Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxx Xxxxxx
To the Sub-Adviser at:
AthenaInvest Advisors LLC
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx Xxxxxxx, XX 00000
18. Mutual Non-Hire/Non-Solicitation. The Sub-Adviser hereby
agrees that so long as the Sub-Adviser provides services to
the Adviser or the Trust and for a period of one year
following the date on which the Sub-Adviser ceases to
provide services to the Adviser and/or the Trust, the Sub-
Adviser shall not, for any reason, directly or indirectly,
on its own behalf or on behalf of others, hire any person
employed by the Adviser who becomes known to Sub-Adviser in
connection with this Agreement or services rendered
pursuant to this Agreement, whether such person is a full-
time employee or whether such person's employment is
pursuant to a written agreement or is at-will. The Sub-
Adviser further agrees that, to the extent that the Sub-
Adviser breaches the covenant described in this paragraph,
the Adviser shall be entitled to pursue all appropriate
remedies in law or equity. Similarly, Adviser hereby
agrees that so long as the Sub-Adviser provides services to
the Adviser or the Trust and for a period of one year
following the date on which the Sub-Adviser ceases to
provide services to the Adviser and/or the Trust, the
Adviser shall not, for any reason, directly or indirectly,
on its own behalf or on behalf of others, hire any person
employed by the Sub-Adviser who becomes known to Adviser in
connection with this Agreement or services rendered
pursuant to this Agreement, whether such person is a full-
time employee or whether such person's employment is
pursuant to a written agreement or is at-will. The Adviser
further agrees that, to the extent that the Adviser
breaches the covenant described in this paragraph, the Sub-
Adviser shall be entitled to pursue all appropriate
remedies in law or equity.
19. Amendment of Agreement. This Agreement may be amended only
by written agreement of the Adviser and the Sub-Adviser and
only in accordance with the provisions of the 1940 Act and
the rules and regulations promulgated thereunder.
20. Entire Agreement. This Agreement embodies the entire
agreement and understanding between the parties hereto and
supersedes all prior agreements and understandings relating
to this Agreement's subject matter. This Agreement may be
executed in any number of counterparts, each of which shall
be deemed to be an original, but such counterparts shall,
together, constitute only one instrument.
In the event the terms of this Agreement are applicable to
more than one series of the Trust (for purposes of this
Paragraph 20, each a "Fund"), the Adviser is entering into
this Agreement with the Sub-Adviser on behalf of the
respective Funds severally and not jointly, with the
express intention that the provisions contained in each
numbered paragraph hereof shall be understood as applying
separately with respect to each Fund as if contained in
separate agreements between the Adviser and Sub-Adviser for
each such Fund. In the event that this Agreement is made
applicable to any additional Funds by way of a schedule
executed subsequent to the date first indicated above,
provisions of such schedule shall be deemed to be
incorporated into this Agreement as it relates to such Fund
so that, for example, the execution date for purposes of
Paragraph 9 of this Agreement with respect to such Fund
shall be the execution date of the relevant schedule.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their officers designated below as
of the day and year first written above.
AdvisorShares Investments, LLC
By:
/s/ Xxx Xxxxxx
Xxx Xxxxxx
Managing Director
AthenaInvest Advisors LLC
By:
/s/ C. Xxxxxx Xxxxxx
C. Xxxxxx Xxxxxx
Chief Executive Officer
Schedule A to the
Investment Sub-Advisory Agreement
Dated as of May 24, 2016
between AdvisorShares Investments, LLC
andAthenaInvest Advisors LLC
A. List of Funds.
AdvisorShares Athena High Dividend ETF
B. Sub-Advisory Fee.
In accordance with Paragraph 5 of the Agreement, the
Adviser shall pay the Sub-Adviser a fee for its services to
the AdvisorShares Athena High Dividend ETF calculated daily
at an annual rate of 0.40% based on the average daily net
assets of the Fund.
The Adviser may also receive fees from the Sub-Adviser to
the extent the Sub-Adviser is required to pay a penalty for
late payment of any reimbursement owed to the Adviser as
set forth in the Expense Limitation Agreement between the
Adviser and the Sub-Adviser.
Agreed and Accepted:
AdvisorShares Investments, LLC
By:
/s/ Xxx Xxxxxx
Xxx Xxxxxx
Managing Director
AthenaInvest Advisors LLC
By:
/s/ C. Xxxxxx Xxxxxx
C. Xxxxxx Xxxxxx
Chief Executive Officer
