Exhibit 10.1

 

 

INVESTMENT ADVISORY AGREEMENT

 

THIS INVESTMENT ADVISORY AGREEMENT (this "Agreement") is dated as of December
31, 2013, between BlackRock Fund Advisors, a California corporation ("Advisor"),
and iShares® Delaware Trust Sponsor LLC, a Delaware limited liability company,
as sponsor (the “Sponsor”) of the iShares® S&P GSCI™ Commodity-Indexed Trust, a
Delaware statutory trust (the “Trust”). This Agreement novates and replaces the
Amended and Restated Investment Advisory Agreement, dated as of March 1, 2013,
between BlackRock Fund Advisors, BlackRock Asset Management International Inc.
(“BAMII”), and the iShares® S&P GSCI™ Commodity-Indexed Investing Pool (the
“Investing Pool”), to reflect the dissolution of the Investing Pool and the
assignment of BAMII’s role as sponsor of the Trust and manager of the Investing
Pool to the Sponsor.

 

1.

The Trust. The Trust is a commodity pool as defined in the Commodity Exchange
Act (the "CEA") and the applicable regulations of the Commodity Futures Trading
Commission (the "CFTC"). The Trust is operated by the Sponsor, a commodity pool
operator registered under the CEA. The Trust is not an investment company under
the Investment Company Act of 1940, as amended (the “Investment Company Act”),
and is not required to register under the Investment Company Act.

 

2.

Appointment. The Trust hereby appoints Advisor as commodity trading advisor for
such portion of the assets of the Trust, that may be deposited, from time to
time, in a separate account or accounts (collectively, the “Accounts”) to be
managed by Advisor under this Agreement, with full power to supervise and direct
the investment of the assets of the Accounts as set forth herein. Advisor hereby
accepts such appointment and agrees to render advisory services on the terms and
conditions set forth in this Agreement. Advisor shall be deemed to be an
independent contractor of the Trust and, except to the extent authorized herein,
shall have no authority to act for or represent the Trust as its agent.

 

3.

Delegation. The Trust acknowledges that Advisor may delegate various advisory
services with respect to the Accounts. In the event of any such delegation, such
party to whom Advisor delegates various advisory services shall be bound to the
terms of this Agreement to the same extent as Advisor. Advisor shall, at its
expense, employ or associate with itself such persons as Advisor believes
appropriate to assist it in performing its obligations under this Agreement.

 

4.

Investment Direction. Advisor will manage the Accounts in accordance with
Advisor's best judgment and consistent with the guidelines attached as Schedule
A (the "Investment Guidelines"), as they may be modified from time to time by
the written agreement of Advisor and the Sponsor on behalf of the Trust.

 

5.

Custodian and Clearing FCM. The Trust has appointed State Street Bank and Trust
Company, as custodian (the "Custodian"), and Goldman, Sachs & Co., as clearing
futures commission merchant (the "Clearing FCM"), for the Accounts. Advisor
shall not receive, and shall at no time be in possession of, the assets
comprising the Accounts.

 

 

 
 

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6.

Reporting. Advisor will submit to the Trust reports appraising the Accounts at
current market value as agreed between Advisor and the Sponsor. Advisor shall
advise the Trust, at such times as the Trust may specify, of such investments
made and the reasons for making a particular investment. Advisor will be
available at reasonable times by prior arrangement to discuss the management of
the Accounts with the Trust or its designee. Any written reports supplied by
Advisor to the Trust discussing the management of the Accounts are intended
solely for the benefit of the Trust, and the Trust agrees that it will not
disseminate such reports to any other party (other than the Trust's professional
advisors) without the prior consent of Advisor, except as may be required by
applicable law. Advisor will provide to the Sponsor any information concerning
the Advisor or its trading program that is necessary for the Sponsor to prepare
any disclosure document for investors in the Trust.

 

7.

Other Accounts. The Trust understands and acknowledges that Advisor performs
commodity trading advisory services for various persons other than the Trust.
The Trust acknowledges that Advisor may give advice and take action concerning
such persons that may be the same as, similar to or different from the advice
given, or the timing and nature of action taken, concerning the Accounts. Except
to the extent necessary to perform Advisor’s obligations under this Agreement,
nothing herein shall be deemed to limit or restrict the right of Advisor, or any
affiliate of Advisor or any employee of Advisor to engage in any other business
or to devote time and attention to the management or other aspects of any other
business, whether of a similar or dissimilar nature, or to render services of
any kind to any other corporation, firm, individual or association.

 

8.

Fees. The Sponsor shall pay Advisor a fee determined by Advisor and the Sponsor,
from time to time, for its services as Advisor hereunder.

 

9.

Representations. The Trust represents and warrants that: (a) it has been duly
organized and is validly existing under the law of the state of its
organization, (b) it is duly authorized to execute, deliver and perform this
Agreement and has taken all action necessary to authorize its execution,
delivery and performance, including the obtaining of any necessary governmental
consents, (c) the execution, delivery and performance of this Agreement,
including the Investment Guidelines, does not and will not conflict with or
violate any provision of law, rule, regulation, governing document of the Trust,
contract, deed of trust, or other instrument to which the Trust is a party or to
which any of the Trust’s property is subject, (d) this Agreement is a valid and
binding obligation enforceable against the Trust in accordance with its terms
(subject to applicable insolvency or similar laws affecting creditors’ rights
generally and subject, as to enforceability, to equitable principles of general
application), (e) the Account will be comprised of assets that are owned by the
Trust as principal, and will not be subject to either (i) the Employee
Retirement Income Security Act of 1974, as amended, or the Investment Company
Act, or (ii) any lien, security interest or other similar encumbrance (other
than in favor of the Custodian, the Clearing FCM or any relevant clearinghouse),
and (f) it is not insolvent or the subject of a proceeding seeking a judgment of
insolvency or bankruptcy. The Trust shall hold Advisor harmless from any
liabilities, damages or expenses, including attorney’s fees, incurred by Advisor
for any actions taken by Advisor acting in reasonable reliance upon such
representations.

 

 

 
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10.

CFTC Registration. Advisor represents and warrants that it is registered with
the CFTC as a commodity trading advisor.

 

11.

Liability. Advisor will be liable for losses to the Accounts that are the direct
result of Advisor’s bad faith, gross negligence, willful or reckless misconduct
or breach of the express terms of this Agreement. Except as set forth in the
foregoing sentence, neither Advisor nor its officers, employees or agents shall
be liable hereunder for any act or omission or for any error of judgment in
managing the Accounts. Advisor shall not be responsible for any special,
indirect or consequential damages, or any loss incurred by reason of any act or
omission of the Trust or any broker, dealer, futures commission merchant or
custodian used hereunder or any authorized representative of the foregoing.
Notwithstanding the foregoing, nothing herein shall in any way constitute a
waiver or limitation of any rights that the Trust may have under the federal
securities laws or other applicable law.

 

12.

Indemnification. Advisor and its shareholders, directors, officers, employees,
affiliates (as such term is defined in Rule 405 under the Securities Act of
1933, as amended) and subsidiaries (each, an “Advisor Indemnified Party”) shall
be indemnified from the Trust and held harmless against any loss, liability,
cost, expense or judgment (including the reasonable fees and expenses of
counsel) arising out of or in connection with the performance of its obligations
under this Agreement or any actions taken in accordance with the provisions of
this Agreement and incurred without (1) negligence, bad faith or willful
misconduct on the part of such Advisor Indemnified Party or (2) reckless
disregard on the part of such Advisor Indemnified Party of its obligations and
duties under this Agreement. Such indemnity shall include payment from the Trust
of the costs and expenses incurred by such Advisor Indemnified Party in
defending itself against any claim or liability in its capacity as the Advisor.
Any amounts payable to an Advisor Indemnified Party under this Section 12 may be
payable in advance.

 

13.

Tax Filings. Advisor will not be responsible for making any tax credit or
similar claim or any legal filing on the Trust’s behalf.

 

14.

Governing Law/Disputes. This Agreement is entered into in accordance with and
shall be governed by the laws of the State of California; provided, however,
that in the event that any law of the State of California shall require that the
laws of another state or jurisdiction be applied in any proceeding, such
California law shall be superseded by this paragraph, and the remaining laws of
the State of California shall nonetheless be applied in such proceeding. Each
party agrees that, in the event that any dispute arising from or relating to
this Agreement becomes subject to any judicial proceeding, such party waives any
right it may otherwise have to (a) seek punitive damages, or (b) request a jury
trial.

 

15.

Termination. This Agreement may be terminated at any time by either party upon
30 days' prior written notice to the other party. Any obligation or liability of
either party resulting from actions or inactions occurring prior to termination
shall not be affected by termination of this Agreement.

 

 

 
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16.

Assignment. Neither party shall assign this Agreement without the written
consent of the other party.

 

17.

Consent to Use of Name. The Trust agrees that Advisor may disclose the Trust’s
name to investment consultants or prospective accounts in connection with
marketing presentations by Advisor and as part of a representative account list.

 

18.

Notices. All notices and other communications under this Agreement shall be in
writing and shall be addressed to the parties as set forth below. Either party
may, by notice to the other, designate a different address or fax number. Any
notice or other communication given hereunder shall be deemed to have been given
upon receipt. Notices may be transmitted by hand, fax, courier, certified or
registered mail return-receipt-requested, U.S. mail postage prepaid, or other
reasonable form of delivery, unless a clause of this Agreement requires a
specific form of delivery. Any fax notice received after 5:00 p.m., California
time, on a business day shall be deemed to have been given on the succeeding
business day.

 

 

To the Trust:

To Advisor:

   

iShares® S&P GSCI™ Commodity-Indexed Trust

c/o iShares® Delaware Trust Sponsor LLC

400 Howard Street

San Francisco, CA 94105

Attention: Product Management Team
Facsimile: (415) 618-5097

BlackRock Fund Advisors

400 Howard Street

San Francisco, CA 94105.

Attn:

Fax:

 

Advisor shall comply with, and be entitled to act on, any instructions
reasonably believed to be from an authorized representative of the Trust.
Advisor and its employees and agents shall be fully protected from all liability
in acting upon such instructions, without being required to determine the
authenticity of the authorization or authority of the persons providing such
instructions.

 

19.

Severability. In the event any provision of this Agreement is adjudicated to be
void, illegal, invalid or unenforceable, the remaining terms and provisions of
this Agreement shall not be affected thereby, and each of such remaining terms
and provisions shall be valid and enforceable to the fullest extent permitted by
law, unless a party demonstrates by a preponderance of the evidence that the
invalidated provision was an essential economic term of this Agreement.

 

20.

Integration; Amendment. This Agreement together with any other written
agreements between the parties entered into concurrently with this Agreement
contain the entire agreement between the parties with respect to the
transactions contemplated hereby and supersede all previous oral or written
negotiations, commitments and understandings related thereto. This Agreement may
not be amended or modified in any respect, nor may any provision be waived,
without the written agreement of both parties. No waiver by one party of any
obligation of the other hereunder shall be considered a waiver of any other
obligation of such party.

 

 

 
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21.

Further Assurances. Each party hereto shall execute and deliver such other
documents or agreements as may be necessary or desirable for the implementation
of this Agreement and the consummation of the transactions contemplated hereby.

 

22.

Counterparts. This Agreement may be executed in one or more counterparts, each
of which shall be deemed to be an original and all of which taken together shall
be deemed to be one and the same instrument.

 

23.

Headings. The headings of paragraphs herein are included solely for convenience
and shall have no effect on the meaning of this Agreement.

 

[Signature Page Follows]

 

 
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IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the
date and year first above written.

 

 

"TRUST"

 

"ADVISOR"

     

iShares® S&P GSCI™ Commodity-Indexed

 

BlackRock Fund Advisors

Trust          

By: iShares® Delaware Trust Sponsor LLC, as sponsor

                                       

 

 

 
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SCHEDULE A

 

INVESTMENT GUIDELINES

 

A.

INVESTMENT OBJECTIVE

 

The investment objective of the Trust is to seek investment results that
correspond generally to the performance of the S&P GSCI™ Total Return Index (the
"Index"), before payment of expenses and liabilities.

 

B.

INVESTMENT STRATEGY

 

The Trust will seek to achieve its exposure to the Index by investing all of its
assets to establish positions in Index Futures and Collateral Assets. Applicable
margin requirements on the Trust's Index Future positions will be satisfied
through the transfer of Collateral Assets or the proceeds thereof. "Index
Futures" are futures contracts on the S&P GSCI™ Excess Return Index that are
listed on a "designated contract market," as defined in the CEA. "Collateral
Assets" are cash, U.S. Treasury securities or other short-term securities and
similar securities that are eligible as margin deposits for Index Futures under
the rules of the applicable designated contract market.

 

C.

RESTRICTIONS

 

The Advisor shall not engage in any activity designed to obtain a profit from,
or ameliorate losses caused by changes in the level of the Index or the S&P
GSCI™ Excess Return Index or the value of the Index Futures or the Collateral
Assets, including making use of any of the hedging techniques available to
professional commodity futures investors to attempt to reduce the risks of
losses resulting from commodity price decreases.

 

 

 

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