FORM OF INVESTMENT SUB-ADVISORY AGREEMENT
FORM
OF
AGREEMENT
made as of this ___ day of ____________, 2010 by and between AdvisorShares
Investments, LLC, a Delaware limited liability company with its principal place
of business at 0 Xxxxxxxx Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx XX, 00000 (the
“Adviser”) and Emerald Rock Advisors, LLC, a Washington limited liability
company with its principal place of business at 000 X Xxxx, 0xx Xxxxx, Xxxxxxx,
XX 00000 (the “Sub-Adviser”).
WITNESSETH
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 dated June 2,
2009 (the “Advisory
Agreement”) with the Trust, 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, with the approval of the Trust, desires to retain the Sub-Adviser
to provide investment advisory services to the Adviser in connection with the
management of the Fund, and the Sub-Adviser is willing to render such investment
advisory services.
NOW,
THEREFORE, the parties hereto agree as follows:
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1.
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Duties of the
Sub-Adviser. Subject to supervision by the Adviser and
the Trust’s Board of Trustees, the Sub-Adviser shall manage all of the
securities and other assets of the 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:
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(a)
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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.
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(b)
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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.
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(c)
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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
persons, 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 which 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, Sub-Adviser, the Trust’s principal
underwriter, or any affiliated person of either the Trust, 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.
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(d)
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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).
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(e)
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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.
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(f)
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The
investment management services provided by the Sub-Adviser under this
Agreement with respect to managing an exchange-traded fund is not to be
deemed exclusive and the Sub-Adviser shall be free to render similar
services to others. The Adviser acknowledges that the
Sub-Adviser performs investment advisory services for various 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 clients which may differ
from the advice given or the timing or nature of action taken for the
Fund.
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(g)
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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.
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(h)
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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.
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(i)
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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 a 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 to any assets of the Fund other than the
Assets.
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(j)
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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.
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(k)
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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.
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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.
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2.
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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.
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3.
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Delivery of
Documents. The Adviser has furnished the Sub-Adviser
with copies of each of the following
documents:
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(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
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(g) A
list of each other investment sub-adviser to the Fund.
The
Adviser shall promptly furnish the Sub-Adviser from time to time 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 Sub-Adviser or its
affiliates without prior written consent of Sub-Adviser, such consent not to 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 of
the Fund 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.
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4.
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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 B 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.
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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.
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5.
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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) however arising from or in
connection with the performance of the Sub-Adviser’s obligations under
this Agreement; provided, however, that the Sub-Adviser’s obligation under
this Paragraph 5 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 the Adviser’s own willful misfeasance,
bad faith or gross negligence, or to the reckless disregard of its duties
under this Agreement.
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The
Adviser shall indemnify and hold harmless the Sub-Adviser from and against
any and all claims, losses, liabilities or damages (including reasonable
attorney’s fees and other related expenses) however arising from or in
connection with the performance of the Sub-Adviser’s obligations under
this Agreement; provided, however, that the Adviser’s obligation under
this Paragraph 5 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 the Sub-Adviser’s own willful
misfeasance, bad faith or gross negligence, or to the reckless disregard
of its duties under this Agreement.
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6.
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Representations and Warranties
of Sub-Adviser. The Sub-Adviser represents andwarrants to the
Adviser and the Funds as follows:
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(a)
The
Sub-Adviser is registered as an investment adviser under the Investment Advisers
Act of 1940, as amended (the “Advisers Act”);
(b)
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;
(c)
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;
(d)
The
Sub-Adviser is a limited liability company duly organized and validly existing
under the laws of the state of Washington with the power to own
and possess its assets and carry on its business as it is now being
conducted;
(e)
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;
(f)
This
Agreement is a valid and binding agreement of the
Sub-Adviser;
(g)
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 to state any material fact necessary in order to make the statements
made, in light of the circumstances under which they were made, not
misleading;
(h)
The
Sub-Adviser shall not divert any 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.
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7.
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Duration
and Termination.
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(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 Fund’s Board 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 6 and 8 hereof, which shall not have 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 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 7, 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.
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8.
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Compliance Program of the
Sub-Adviser. The Sub-Adviser hereby represents and
warrants that:
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(a)
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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
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(b)
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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 8(b), along with the
policies and procedures referred to in Paragraph 8(a), are referred to
herein as the Sub-Adviser’s “Compliance
Program”).
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9.
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Use Of
Names. The Trust and the Adviser shall have the right to
use the name “Emerald Rock” in connection with the management and
operation of the Funds, and subject to the terms set forth in Section 12
of this Agreement, the Sub-Adviser has the right to use the name
“AdvisorShares”. The Sub-Adviser is not aware of any threatened
or existing actions, claims, litigation or proceedings that would
adversely affect or prejudice the rights of the Adviser or the Trust to
use the name “Emerald Rock.”
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10.
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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 is to be regarded as
confidential and for use only by the Adviser, the Fund 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.
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11.
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Reporting of Compliance
Matters.
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(a)
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The
Sub-Adviser shall promptly provide to the Trust’s Chief Compliance Officer
(“CCO”) the following documents:
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(i)
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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;
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(ii)
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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;
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(iii)
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on
a quarterly basis, a report of any material changes to the policies and
procedures that compose the Sub-Adviser’s Compliance
Program;
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(iv)
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a
copy of the Sub-Adviser’s chief compliance officer’s report (or similar
document(s) which 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
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(v)
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an
annual (or more frequently as the Trust’s CCO may reasonably request)
representation regarding the Sub-Adviser’s compliance with Paragraphs 6
and 7 of this Agreement.
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(b)
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The
Sub-Adviser shall also provide the Trust’s CCO with reasonable access,
during normal business hours, to the Sub-Adviser’s facilities for the
purpose of conducting pre-arranged on-site compliance related due
diligence meetings with personnel of the
Sub-Adviser.
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12.
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The Name
“AdvisorShares”. The Adviser grants to the Sub-Adviser a
sublicense to use the name “AdvisorShares” (the “Name”). The
foregoing authorization by the Adviser to the Sub-Adviser to use the
Name is not exclusive of the right of the Adviser itself to use, or
to authorize others to use, the Name; the Sub-Adviser acknowledges and
agrees that, as between the Sub-Adviser and the Adviser, the Adviser has
the right to use, or authorize others to use, the Name. The
Sub-Adviser shall (1) only use the Name in a manner consistent with uses
approved by the Adviser; (2) use its best efforts to maintain the quality
of the services offered using the Name; and (3) adhere to such other
specific quality control standards as the Adviser may from time to time
promulgate. Notwithstanding the foregoing, neither the
Sub-Adviser nor any affiliate or agent of it shall make reference to or
use the Name or any of Adviser’s respective affiliates or clients names
without the prior approval of Adviser, which approval shall not be
unreasonably withheld or delayed. The Sub-Adviser hereby agrees
to make all reasonable efforts to cause any affiliate or agent of the
Sub-Adviser to satisfy the foregoing
obligation.
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13.
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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.
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14.
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Severability. 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.
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15.
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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 addressed by the party giving notice to
the other party at the last address furnished by the other
party:
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To
the Adviser at:
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AdvisorShares
Investments, LLC
0
Xxxxxxxx Xxxxx Xxxxxx
Xxxxx
000
Xxxxxxxx,
XX 00000
Attention: Legal
Department
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To
the Trust’s CCO at:
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AdvisorShares
Investments, LLC
0000
X. Xxxxxxx Xxxxxxxxxx
Xxxxx
000
Xxxxxx,
XX 00000
Attention: Xxx
Xxxxxx
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To
the Sub-Adviser at:
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Emerald
Rock Advisors, LLC
000
X Xxxx, 0xx Xxxxx
Xxxxxxx,
XX 00000
Attention:
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16.
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Non-Hire/Non-Solicitation. The
parties hereby agree 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 the
Trust, neither party shall, for any reason, directly or indirectly, on its
own behalf or on behalf of others, hire any person employed by the other
party who becomes known to such party in connection with this Agreement or
services rendered pursuant to this Agreement, whether or not such person
is a full-time employee or whether or not any person’s employment is
pursuant to a written agreement or is at-will. The parties
further agree that, to the extent that a party breaches the covenant
described in this paragraph, the other party shall be entitled to pursue
all appropriate remedies in law or
equity.
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17.
|
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.
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18.
|
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
portfolio of the Trust (for purposes of this Paragraph 18, 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 7 of this Agreement with respect to such Fund shall be the
execution date of the relevant
Schedule.
|
19. Miscellaneous.
|
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(a)
|
A
copy of the Certificate of Trust is on file with the Secretary of State of
Delaware, and notice is hereby given that the obligations of this
instrument are not binding upon any of the Trustees, officers or
shareholders of the Fund or the
Trust.
|
|
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(b)
|
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.
|
11
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
|
Emerald
Rock Advisors, LLC
|
|
|
By:
|
By:
|
|
|
Name:
|
Name:
|
|
|
Title:
|
Title:
|
|
12
Schedule
A
to
the
Sub-Advisory
Agreement
between
AdvisorShares
Investments, LLC
and
Emerald
Rock Advisors, LLC
As
of _________ ___, 2010
Emerald
Rock Low-Priced Focused Growth ETF
Emerald
Rock Dividend Growth ETF
Agreed
and Accepted:
|
AdvisorShares
Investments, LLC
|
Emerald
Rock Advisors, LLC
|
|
|
By:
|
By:
|
|
|
Name:
|
Name:
|
|
|
Title:
|
Title:
|
|
13
Schedule
B
to
the
Sub-Advisory
Agreement
between
AdvisorShares
Investments, LLC
and
Emerald
Rock Advisors, LLC
As
of _________ __, 2010
A. Sub-Advisory
Fee. Pursuant to Paragraph 4, the Adviser shall pay the
Sub-Adviser compensation at an annual rate as follows:
The fees for each Fund, each a series
of AdvisorShares Trust shall be calculated based on average daily net assets of
the Fund, at the following annual rates:
|
Emerald
Rock Low-Priced Focused Growth ETF
|
[0.40 | ]% | ||
|
Emerald
Rock Dividend Growth ETF
|
[0.40 | ]% |
Agreed
and Accepted:
|
AdvisorShares
Investments, LLC
|
Emerald
Rock Advisors, LLC
|
|
|
By:
|
By:
|
|
|
Name:
|
Name:
|
|
|
Title:
|
Title:
|
|
14
