Exhibit 77Q1(e)
BlackRock Funds (the "Registrant"): BlackRock Multi-Manager
Alternative Strategies Fund (the "Fund")
77Q1(e):
Copies of any new or amended Registrant investment advisory
contracts
Attached please find as an exhibit to Sub-Item 77Q1(e) of Form
N-SAR, a copy of the Form of Sub-Advisory Agreement between
BlackRock Advisors, LLC and Marathon Asset Management, LP with
respect to the Fund
SUB-ADVISORY AGREEMENT
THIS SUB-ADVISORY AGREEMENT (the "Agreement") is made as of
January 19, 2016 by and between BLACKROCK ADVISORS, LLC, a
Delaware limited liability company (the "Adviser"), and MARATHON
ASSET MANAGEMENT, LP, a Delaware limited partnership (the "Sub-
Adviser").
WHEREAS, BlackRock Funds, a Massachusetts business 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, pursuant to an Investment Advisory Agreement (the
"Investment Advisory Agreement") by and between the Trust and
the Adviser, the Trust has appointed the Adviser to furnish
investment advisory and other services to the Trust on behalf of
BlackRock Multi-Manager Alternative Strategies Fund, a series of
the Trust (the "Fund"); and
WHEREAS, the Investment Advisory Agreement authorizes the
Adviser to retain one or more sub-advisers to furnish certain
investment advisory services to the Adviser and the Fund; and
WHEREAS, subject to the terms and provisions of this
Agreement, the Adviser desires to retain the Sub-Adviser to
furnish sub-investment advisory services on behalf of the Fund
or a designated portion of the assets of the Fund;
WHEREAS, the Sub-Adviser is willing to furnish such services
in accordance with the terms and provisions of this Agreement;
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein, the sufficiency of which is hereby
acknowledged, the Adviser and the Sub-Adviser hereby agree as
follows:
1. Appointment of the Sub-Adviser. The Adviser hereby
appoints the Sub-Adviser as an investment sub-adviser
with respect to the Fund for the period and on the terms
set forth in this Agreement. The Adviser may, in its
sole discretion, allocate all, only a portion or none of
the Fund's assets to the Sub-Adviser for management. The
Sub-Adviser will be responsible for the investment of
only the assets which the Adviser allocates to the Sub-
Adviser for management under this Agreement, plus all
investments, reinvestments and proceeds of the sale
thereof, including, without limitation, all interest,
dividends and appreciation on investments, less
depreciation thereof and withdrawals by the Adviser
therefrom (the "Managed Portion"). The Adviser shall
have the right at any time to increase or decrease the
allocation of the Managed Portion to the Sub-Adviser if
the Adviser deems such increase or decrease appropriate,
and shall provide notice via email to the Sub-Adviser
prior to or during the trading hours on the day of any
such increase or decrease. The Sub-Adviser accepts that
appointment and agrees to render for the Managed Portion
the services herein set forth, for the compensation
herein provided.
2. Duties as Sub-Adviser.
(a) Pursuant to this Agreement and subject to the
supervision and direction of the Trust's Board of
Trustees (the "Board") and direction and oversight of
the Adviser, the Sub-Adviser shall, with respect to the
Managed Portion, provide the Fund with investment
research, advice and supervision and furnish a
continuous investment program for and manage the
investment and reinvestment of the Managed Portion. In
this regard, the Sub-Adviser shall, with respect to the
Managed Portion, determine in its discretion the
securities, cash and other financial instruments to be
purchased, retained or sold for the Managed Portion
within the parameters of the investment objective,
policies, restrictions and guidelines applicable to the
Managed Portion as provided by the Adviser to the Sub-
Adviser, as amended in writing from time to time by the
Adviser (the "Investment Guidelines"), the provisions of
this Agreement, all applicable laws, rules and
regulations and the Fund's registration statement on
Form N-1A under the 1940 Act as amended from time to
time, or any successor form thereto (the "Registration
Statement").
(b) The Adviser will provide Sub-Adviser a list of
counterparties, brokerage firms or other financial
institutions (collectively, the "Counterparties") with
which the Managed Portion is permitted to engage in
transactions. The Adviser shall negotiate and finalize
on behalf of the Fund the terms of any account opening
documents, prime brokerage, futures and other related
agreements, any ISDA master agreement, master repurchase
agreement, master securities lending agreement or any
other master swap or over-the-counter trading
documentation, including any schedule or credit support
annex thereto, any related clearing agreements or
control agreements and any other agreement related to
the foregoing (collectively, "Trading Agreements").
With respect to each Trading Agreement, the Adviser will
either (i) provide a copy of the Trading Agreement to
the Sub-Adviser or (ii) identify certain terms and/or
provisions of the Trading Agreement in writing to Sub-
Adviser. In connection with its management of the
Managed Portion, (a) with respect to any Trading
Agreement provided to the Sub-Adviser, the Sub-Adviser
agrees to comply with the terms and conditions of such
Trading Agreements and (b) with respect to any Trading
Agreement for which the Adviser has identified certain
terms and/or provisions in writing to Sub-Adviser, the
Sub-Adviser agrees to comply with the terms and
provisions so identified in such writing. Adviser may
amend or modify a Trading Agreement or such writing from
time to time by sending written notice thereof to Sub-
Adviser, and such amendment or modification shall become
effective on the fifth calendar day following delivery
thereof. Once the Trading Agreements have been
negotiated and executed by Adviser, subject to any other
written instructions of Adviser or the Trust, the Sub-
Adviser is hereby appointed Adviser's and the Trust's
agent and attorney-in-fact for the limited purposes of
executing such additional documentation, contracts,
instructions and other documents and carrying out such
duties as may be required under the Trading Agreements
in connection with the Sub-Adviser's management of the
Managed Portion (including, where applicable, confirming
transactions, executing transaction-related
documentation and causing the Fund to perform any
payment or delivery obligations required under any
Trading Agreement or transaction, including without
limitation, collateral or margin payments), provided
that (i) the Sub-Adviser's actions in executing such
documents and performing such duties shall comply with
applicable federal laws, the regulations thereunder, the
Sub-Adviser's duties and obligations under this
Agreement and the Trust's Governing Documents (as
defined below) and (ii) the Sub-Adviser shall not
execute any documentation pursuant to the foregoing
relating to the tax status or investor status of the
Fund without verifying such status with the Adviser.
(c) The Sub-Adviser is hereby appointed the Fund's
agent and attorney-in-fact, and shall have a duty
hereunder, to exercise in its discretion all rights and
perform all duties which may be exercisable in relation
to the Managed Portion, including without limitation the
right to vote (or in its discretion, abstain from
voting), tender, exchange, endorse, transfer, or deliver
any securities on behalf of the Fund, to participate in
or consent to any class action, distribution, bankruptcy
proceeding, plan of reorganization, creditors committee,
merger, combination, consolidation, liquidation,
underwriting, or similar plan with reference to such
securities; and to execute and bind the Fund in waivers,
consents and covenants related thereto. For the
avoidance of doubt, the Sub-Adviser has sole and full
discretion to vote (or abstain from voting) any
securities in the Managed Portion and neither the Fund
nor the Adviser will, directly or indirectly, attempt to
influence the Sub-Adviser's voting decisions. Further,
to the extent the Adviser is affiliated with a bank
holding company, the Adviser will not provide
instruction to the Sub-Adviser on how to vote securities
of any U.S. bank holding company (as that term is
defined in the Bank Holding Company Act of 1956, as
amended).
(d) The Sub-Adviser shall act upon all proxies solicited
by or with respect to the issuers of securities in which
the assets of the Managed Portion may be invested in
accordance with the Sub-Adviser's proxy voting policies
and procedures, as presented to the Fund, and in a
manner that the Sub-Adviser reasonably believes best
serves the interests of the Fund's shareholders and that
complies with applicable law. The Sub-Adviser represents
and covenants that it has adopted written proxy voting
policies and procedures as required under Rule 206(4)-6
of the Investment Advisers Act of 1940, as amended
("Advisers Act"), a copy of which has been provided to
the Fund and the Board, and that it will promptly
provide (i) any updates of such policies and procedures
to the Fund and the Board, (ii) its voting records with
respect to the Managed Portion to the Fund or the Fund's
proxy voting service, in a format determined by the
Adviser as the Fund may direct (and in any event before
July 15 of each year), so that the Fund may meet its
annual disclosure requirement pursuant to Rule 30b1-4
under the 1940 Act, (iii) reports to the Adviser and/or
the Board, as the Fund may direct, in instances where
the Sub-Adviser votes counter to its proxy voting
policies and (iv) a summary of its proxy voting policies
and procedures for including in the Trust's Registration
Statement, if requested. The Sub-Adviser shall be
responsible for responding to any class action claim
with respect to any investment(s) made with the Managed
Portion and shall notify promptly the Fund of any such
claims.
(e) The Sub-Adviser shall discharge its
responsibilities hereunder subject to the supervision of
the Adviser, the Board and the officers of the Trust and
in compliance with (i) except as set forth in the
Investment Guidelines, the 1940 Act and the Advisers Act
and the rules and regulations adopted under each from
time to time; (ii) the requirements of Subchapter M of
the Internal Revenue Code of 1986, as amended (the
"Internal Revenue Code") applicable to regulated
investment companies (as defined in the Internal Revenue
Code); (iii) the Commodity Exchange Act, as amended (the
"CEA"), and the rules and regulations adopted thereunder
from time to time; (iv) all other applicable federal and
state laws and regulations, including without
limitation, the rules of any self-regulatory
organization; (v) any 1940 Act exemptive order
applicable to the Fund and the Managed Portion, which
the Advisor has provided in writing to the Sub-Advisor;
(vi) the Trust's Declaration of Trust and By-Laws, as
each may be amended from time to time (the "Governing
Documents"); (vii) the objectives, policies and
limitations for the Fund set forth in the Registration
Statement; and (viii) the Investment Guidelines and such
other guidelines, policies and procedures implemented by
the Adviser with respect to the Fund or to the Sub-
Adviser's activities under this Agreement and provided
to the Sub-Adviser in writing ("Adviser Procedures").
The Adviser shall ensure that, at all times, the
Governing Documents, the objectives, policies and
limitations for the Fund set forth in the Registration
Statement and Adviser Procedures do not conflict with
the statutes, regulations, rules and orders referred to
in clauses (i) through (v) above. The Sub-Adviser shall
maintain compliance procedures and operational processes
for the Fund to ensure the Fund's compliance with the
foregoing and that the Sub-Adviser reasonably believes
are adequate to ensure its compliance with applicable
law. No supervisory activity undertaken by the Adviser
shall limit the Sub-Adviser's full responsibility for
any of the foregoing except to the extent the Sub-
Adviser acts as directed by the Adviser, the Board, or
any officer of the Trust.
(f) The Sub-Adviser agrees that it will not consult with
any other sub-investment adviser for the Fund or the
Trust or any other fund under common control with the
Trust, concerning transactions for the Managed Portion
in securities or other assets, except that such
consultations are permitted between the current and
successor sub-investment advisers of the Fund in order
to effect an orderly transition of sub-advisory duties
so long as such consultations are not transactions
prohibited by Section 17(a) of the 1940 Act.
(g) On behalf of the Fund, the Adviser hereby authorizes
any entity or person associated with the Sub-Adviser
which is a member of a national securities exchange to
effect any transaction on the exchange for the account
of the Fund which is permitted by Section 11(a) of the
Exchange Act and Rule 11a2-2(T) thereunder, and on
behalf of the Fund, the Adviser hereby consents to the
retention of compensation for such transactions in
accordance with Rule 11a2-2(T)(a)(2)(iv).
Notwithstanding the foregoing, the Sub-Adviser agrees
that it will not deal with itself, or with members of
the Board or any principal underwriter of the Fund, in
each case as previously identified to the Sub-Adviser in
writing, as principals or agents in making purchases or
sales of securities or other property for the account of
the Fund, nor will the Sub-Adviser purchase any
securities from an underwriting or selling group in
which the Sub-Adviser or its affiliates is
participating, or arrange for purchases and sales of
securities between the Fund and another account advised
by the Sub-Adviser or its affiliates, except in each
case as permitted by the 1940 Act and in accordance with
such policies and procedures as may be adopted by the
Fund from time to time and disclosed to the Sub-Adviser,
and will comply with all other provisions of the
Governing Documents and the Fund's then-current
Registration Statement relative to the Sub-Adviser and
its directors, officers and employees.
3. Fund Transactions.
(a) In connection with purchases and sales of
portfolio securities and other instruments for the
account of the Fund, neither the Sub-Adviser nor its
affiliated persons (as defined in the 0000 Xxx) or
any of their respective partners, officers or
employees shall act as principal, except as otherwise
permitted by the 1940 Act. The Sub-Adviser or its
agents shall arrange for the placing of orders for
the purchase and sale of portfolio securities and
other financial instruments for the Fund's account
either directly with the issuer or with any
Counterparty, provided that the Sub-Adviser complies
with Section 2(b) with respect to each such
Counterparty.
(b) In the selection of such brokers or dealers and the
placing of such orders, the Sub-Adviser is directed at
all times to seek to obtain for the Managed Portion the
most favorable execution and net price available, and
may take into account such factors as price (including
the applicable brokerage commission or dealer spread),
size of order, difficulty of execution, and operational
facilities of the brokerage firm and the brokerage
firm's risk and skill in positioning blocks of
securities. It is also understood that it may be
desirable for the Managed Portion that the Sub-Adviser
have access to supplemental investment and market
research and security and economic analyses that are
consistent with Section 28(e) of the Securities Exchange
Act of 1934, as amended (the "1934 Act"), and are
provided by brokers who may execute brokerage
transactions at a higher cost to the Managed Portion
than may result when allocating brokerage to other
brokers on the basis of seeking the most favorable price
and efficient execution. Therefore, subject to
compliance with the safe harbor provided by Section
28(e) of the 1934 Act and such other conditions and
limitations as may be established by the Adviser from
time to time, if any, the Sub-Adviser is authorized to
consider such services provided to the Managed Portion
and other accounts over which the Sub-Adviser or any of
its affiliates exercises investment discretion and to
place orders for the purchase and sale of securities for
the Managed Portion with such brokers, if the Sub-
Adviser determines in good faith that the amount of
commissions for executing such portfolio transactions is
reasonable in relation to the value of the brokerage and
research services provided by such brokers, subject to
review by the Adviser and the Board from time to time
with respect to the extent and continuation of this
practice. It is understood that the services provided by
such brokers may be useful to the Sub-Adviser in
connection with its services to other clients. The Sub-
Adviser may, on occasions when it deems the purchase or
sale of a security to be in the best interests of the
Managed Portion as well as its other clients, aggregate,
to the extent permitted by applicable laws, rules and
regulations, the securities to be sold or purchased in
order to obtain the best net price and the most
favorable execution. In such event, allocation of the
securities so purchased or sold, as well as the expenses
incurred in the transaction, shall be made by the Sub-
Adviser in the manner it considers to be the most
equitable and consistent with its obligations to the
Managed Portion and to such other clients. The Board may
from time to time adopt policies and procedures that
modify and/or restrict the Sub-Adviser's authority
regarding the execution of the Managed Portion's
portfolio transactions provided herein.
(c) The Sub-Adviser shall not acquire on behalf of the
Managed Portion any equity securities registered under
Section 12 of the 1934 Act with the purpose or effect,
at the time of such acquisition, of changing or
influencing control of the issuer of the securities or
in connection with or as a participant in any
transaction having such purpose or effect, including any
transaction subject to Rule 13d-3(b) promulgated under
the 1934 Act. For purposes of all applicable filing
requirements under the 1934 Act, including without
limitation Sections 13(d) and (g), and other laws, the
Sub-Adviser shall be deemed to have sole investment
discretion with respect to all securities held in the
Managed Portion. If any investments made by the Sub-
Adviser on behalf of the Managed Portion are required to
be disclosed in any other reports to be filed by the
Sub-Adviser with any governmental or self-regulatory
agency or organization or exchange, the Sub-Adviser
shall provide the Adviser with prompt written notice
thereof, setting forth in reasonable detail the nature
of the report and the investments of the Managed Portion
to be reported.
(d) The Fund may establish one or more wholly-owned
subsidiaries of the Fund through which it may conduct a
significant portion of its commodities investing
activities or for other investment purposes.
4. Compensation of the Sub-Adviser.
(a) For the services provided and the expenses assumed
by the Sub-Adviser pursuant to this Agreement, Adviser,
not the Fund, shall pay to the Sub-Adviser a fee,
computed daily and payable monthly, in arrears, at an
annual rate of the average daily net assets of the
Managed Portion that the Sub-Adviser manages (computed
in the manner specified in the Investment Advisory
Agreement), in accordance with the schedule attached
hereto as Exhibit A.
(b) If this Agreement becomes effective or terminates
before the end of any month, the fee for the period from
the effective date to the end of the month or from the
beginning of such month to the date of termination, as
the case may be, shall be pro-rated according to the
proportion that such period bears to the full month in
which such effectiveness or termination occurs.
5. Expenses. The Sub-Adviser agrees, at its own expense, to
render the services set forth herein and to provide the
office space, furnishings, equipment and personnel required
by it to perform such services on the terms and for the
compensation provided in this Agreement. The Fund shall be
responsible for payment of brokerage commissions, transfer
fees, registration costs, transaction-related taxes, the
Fund's pro rata portion of transaction-related legal costs
and other similar costs and transaction-related expenses and
fees arising out of transactions effected on behalf of the
Fund. Subject to the foregoing, the Sub-Adviser will pay all
expenses incurred by it in connection with its activities
under this Agreement, including without limitation, all costs
associated with attending or otherwise participating in
regular or special meetings of the Board or shareholders, or
with the Adviser, as requested, and additions or
modifications to the Sub-Adviser's operations necessary to
perform its services hereunder in compliance with this
Agreement, the Investment Guidelines, any other Board/Adviser
Procedures and applicable law. The Sub-Adviser shall be
responsible for all costs associated with any information
statements and/or other disclosure materials that are for the
primary benefit of the Sub-Adviser (including, but not
limited to, the legal fees associated with preparation,
printing, filing and mailing thereof, as well as any
shareholder meeting and/or solicitation costs, if
applicable).
6. Delivery of Information, Reports and Certain
Notifications.
(a) The Adviser agrees to furnish to the Sub-Adviser
current prospectuses, statements of additional
information, proxy statements, reports to shareholders,
financial statements, Declaration of Trust and By-Laws,
any amendments or supplements to any of the foregoing or
to any of the Investment Guidelines or Adviser
Procedures and such other information with regard to the
affairs of the Fund as the Sub-Adviser may reasonably
request.
(b) The Sub-Adviser shall report regularly on a timely
basis to the Adviser and to the Board and shall make
appropriate persons, including portfolio managers,
available for the purpose of reviewing with
representatives of the Adviser and the Board on a
regular basis at reasonable times the management of the
Managed Portion, the performance of the Managed Portion
in relation to standard industry indices and the Fund's
own performance benchmark, and general conditions
affecting the marketplace. The Sub-Adviser agrees to
render to the Adviser such other periodic and special
reports on a timely basis regarding its activities under
this Agreement as the Adviser may reasonably request.
(c) The Sub-Adviser shall provide the Adviser, the Fund
or the Board with such information and assurances
(including certifications and sub-certifications) and
with such assistance as the Adviser, the Fund or the
Board may reasonably request from time to time in order
to assist it in complying with applicable laws, rules,
regulations and exemptive orders, including requirements
in connection with the Adviser's, the Sub-Adviser's or
the Board's fulfillment of its responsibilities under
Section 15(c) of the 1940 Act and the preparation and/or
filing of periodic and other reports and filings
required to maintain the registration and qualification
of the Fund, or to meet other regulatory or tax
requirements applicable to the Fund, under federal and
state securities, commodities and tax laws and other
applicable laws. The Sub-Adviser shall review draft
reports to shareholders, registration statements,
marketing materials or amendments or supplements thereto
or portions thereof that relate to the Managed Portion
or the Sub-Adviser and other documents provided to the
Sub-Adviser, provide comments on such drafts on a timely
basis, and provide certifications or sub-certifications
on a timely basis as to the accuracy of the information
provided by the Sub-Adviser and/or contained in such
reports or other documents.
(d) The Sub-Adviser agrees to provide and update
promptly but no less frequently than quarterly a list of
all the affiliates of the Sub-Adviser, and to promptly
notify the Adviser and the Fund of any change of control
of those affiliates.
(e) If required by the CEA or the rules and regulations
thereunder promulgated by the Commodity Futures Trading
Commission ("CFTC"), the Sub-Adviser will provide the
Fund with a copy of its most recent CFTC disclosure
document or a written explanation of the reason why it
is not required to deliver such a disclosure document.
(f) The Sub-Adviser agrees to provide any and all
material composite performance information, records and
supporting documentation about accounts the Sub-Adviser
manages, if appropriate and permissible pursuant to the
documentation governing accounts managed by the Sub-
Adviser, which are relevant to the Managed Portion and
that have investment objectives, policies, and
strategies substantially similar to those employed by
the Sub-Adviser in managing the Managed Portion that may
be reasonably necessary, under applicable laws, to allow
the Fund or its agent to present information concerning
the Sub-Adviser's prior performance in the Registration
Statement of the Fund and any permissible reports and
materials prepared by the Fund or its agent.
7. Cooperation with the Fund, the Adviser and Other Service
Providers.
(a) The Sub-Adviser agrees to cooperate with and provide
reasonable assistance to the Adviser, the Fund, the
Fund's custodian, accounting agent, administrator,
pricing agents, independent auditors and all other
agents, representatives and service providers of the
Fund and the Adviser, and to provide the foregoing
persons such information with respect to the Managed
Portion as they may reasonably request from time to time
in the performance of their obligations; provide prompt
responses to reasonable requests made by such persons;
and establish and maintain appropriate operational
programs, procedures and interfaces with such persons so
as to promote the efficient exchange of information and
compliance with applicable laws, rules and regulations,
and the guidelines, policies and procedures adopted or
implemented with respect to the Fund and/or the Sub-
Adviser.
(b) The Fund's assets (including the Managed Portion)
shall be held by a custodian appointed by the Fund
pursuant to a separate custody agreement; the Sub-
Adviser and its affiliates shall at no time have custody
or physical control of any assets or cash of the Fund.
The Sub-Adviser shall advise the Fund's custodian and
accounting agent on a prompt basis of each purchase and
sale of a portfolio security or other financial
instrument specifying the name of the issuer or
Counterparty, the description, terms and amount of
shares or principal amount of the security or other
financial instrument purchased or sold, the market
price, commission and gross or net price, trade date,
settlement date and identity of the effecting broker or
dealer and such other information as may reasonably be
required. The Sub-Adviser shall arrange for the
transmission to the Fund's custodian, Adviser and
accounting agent on a daily basis such confirmation,
trade tickets, and other documents and information as
may be reasonably necessary to enable the custodian,
Adviser and accounting agent to perform their
administrative, recordkeeping and other responsibilities
with respect to the Fund.
(c) Without limiting the generality of the foregoing and
in furtherance thereof, the Sub-Adviser shall report to
the Fund's custodian and accounting agent all trades and
positions in the Managed Portion daily (in such form and
at such times as specified by the Fund's custodian and
accounting agent), including any trade it has entered
into for which it has not received confirmation, and
shall also request each executing broker and
Counterparty to deliver its own such transaction and
position reporting, and any information related to any
corporate action relevant to the investments of the
Managed Portion (in such form and at such times as
specified by the Fund's custodian and accounting agent).
(d) The Sub-Adviser shall reconcile all trades with each
executing broker and Counterparty daily to ensure
accurate trade settlement and verify open positions
(including cash). The Fund or its designee may also
conduct a reconciliation of trades as reported from
executing brokers and Counterparties and the Sub-Adviser
shall cooperate with the Fund or such designee in order
to effect such reconciliation, including without
limitation by arranging for access by the Fund or such
designee to the files and websites of the executing
brokers and Counterparties. In addition, the Sub-Adviser
shall promptly review each holdings reconciliation
report that it receives from the Fund's custodian and
accounting agent and/or the Adviser, as appropriate, and
shall work to resolve all open reconciliation items,
including trade breaks, contained in such report
immediately.
(e) The Sub-Adviser shall provide reasonable assistance
to the Board, the Adviser, the custodian or
administrator for the Fund in determining or confirming,
consistent with the Board/Adviser Procedures and the
Registration Statement, the value of any portfolio
securities or other assets or liabilities of the Managed
Portion for which the Adviser, custodian or
administrator seeks assistance from the Sub-Adviser or
identifies for review by the Sub-Adviser. This
assistance includes (but is not limited to): (i)
designating and providing access to one or more
employees of the Sub-Adviser who are knowledgeable about
the security or other asset or liability, its issuer or
counterparty (as applicable), its financial condition,
trading and/or other relevant factors for valuation,
which employees shall be available for consultation when
the Board or a designated committee thereof convenes;
(ii) assisting the Board, Adviser, the custodian or the
administrator in obtaining bids and offers or quotes
from broker-dealers or market-makers with respect to
investments held in the Managed Portion, upon the
reasonable request of the Adviser, custodian or
administrator; (iii) upon the request of the Board,
Adviser, the custodian or the administrator, providing
recommendations for pricing and fair valuations
(including the methodology and rationale used in making
such recommendation and such other relevant information
as may be requested); and (iv) maintaining adequate
records and written backup information with respect to
the investments valuation assistance provided hereunder,
and providing such information to the Board, Adviser or
the Fund upon request, with such records being deemed
Fund records. The Sub-Adviser shall promptly notify the
Adviser if, for any reason, the Sub-Adviser believes
that the price of any security or other investment in
the Managed Portion may not accurately reflect the value
thereof. In addition, the Sub-Adviser shall provide to
the Adviser, on a timely basis after the end of each
month but no later than 5 days after the end of each
such month, a report listing all securities and other
instruments in the Managed Portion for which the Sub-
Adviser has made its own valuation determinations or has
obtained valuation determinations made by others, which
report shall include for each security or instrument the
date on which a value was determined, the value
determined, the source of the valuation, and the
methodology and rationale used in making such
determination. Additionally, the Sub-Adviser shall be
responsible for obtaining valuations for derivative
instruments from Counterparties and for providing that
information (and any valuation determinations made by
the Sub-Adviser) to the Adviser for its consideration on
the monthly reports required under this Section 7(e).
(f) From time to time as the Board or the Adviser may
reasonably request, the Sub-Adviser shall furnish to the
Adviser, the Board and the officers of the Trust reports
on portfolio transactions and reports on issuers of
securities and other financial instruments,
Counterparties and underlying reference terms of Trading
Agreements and any other relevant information regarding
any positions held in the portfolio, all in such detail
as the Trust or the Adviser may reasonably request,
including but not limited to, quarterly reports
documenting the Sub-Adviser's compliance with Sections
10(f), 12(d)(3), 17(a) and 17(e) of the 1940 Act, and
the rules thereunder, in its management of the assets in
the Managed Portion, quarterly compliance checklists
developed for the Managed Portion by the Adviser,
quarterly and annual certifications under Rule 38a-1
under the 1940 Act and under Rule 206(4)-7 under the
Advisers Act, annual reports under Rule 206(4)-7 under
the Advisers Act and an annual due diligence
questionnaire and, to the extent available, any external
third party audit reports, including pursuant to
Statement on Standards for Attestation Engagements
(SSAE) No. 16. Without limiting the foregoing, the Sub-
Adviser agrees that it shall certify to the Fund on a
timely basis after the end of each calendar quarter that
it has complied with all of the Investment Guidelines,
all applicable laws and regulations and other conditions
and agreements contained herein during the prior
calendar quarter.
(g) In addition, the Sub-Adviser shall assist the Fund
and the Adviser in complying with the provisions of the
Xxxxxxxx-Xxxxx Act of 2002 and shall provide
certifications in the form reasonably requested by the
Fund relating to the Sub-Adviser's services under this
Agreement. The Sub-Adviser shall provide necessary
support to the Fund and the Adviser in preparing and
presenting the Fund's financial statements, and in doing
so shall be responsible for applying appropriate
accounting and financial reporting principles and
maintaining policies and internal controls and
procedures, including internal controls over financial
reporting, designed to assure compliance with generally
accepted accounting principles (GAAP) and applicable
laws and regulations.
(h) The Sub-Adviser shall further notify the Adviser
promptly upon detection of any error in connection with
its management of the Fund, including but not limited to
any trade errors. In the event of an error, the Sub-
Adviser shall provide a memorandum to the Adviser that
sufficiently describes any such error and the action to
be taken to prevent future occurrences of such error or,
alternatively, a statement that the Sub-Adviser has
reviewed the relevant controls, and has determined those
controls are reasonably designed to prevent additional
errors in the future (and, to the extent relevant, that
such controls are reasonably designed to prevent
violations of the federal securities laws), and as such
no further action is required. Further, the Sub-Adviser
shall provide access to the Adviser and the Fund, or
their agents, to all documents and information related
to any error, its analysis and correction, and the
correction of all errors impacting the Fund must be
corrected to the satisfaction of the Adviser and the
Fund, notwithstanding Sections 15 and 16, which may
entail the Sub-Adviser reimbursing the Fund for costs
incurred arising out of or resulting from the error, if
any.
(i) Each party to this Agreement agrees to cooperate
with each other party and with all appropriate
governmental authorities having the requisite
jurisdiction (including, but not limited to, the
Securities and Exchange Commission, CFTC and state
regulators) in connection with any investigation or
inquiry relating to this Agreement or the Fund.
8. Compliance.
(a) The Sub-Adviser shall notify the Adviser promptly
(and, in any event, within 24 hours) upon detection of any
breach of any of the Investment Guidelines, Adviser
Procedures, the Registration Statement and of any violation
of any applicable law or regulation, including the 1940 Act
and Subchapter M of the Internal Revenue Code, relating to
the Managed Portion. The Sub-Adviser shall also notify the
Adviser promptly upon detection of any violations of the
Sub-Adviser's own compliance policies and procedures that
relate to (1) its management of the Managed Portion, or (2)
its activities as investment adviser generally to the
extent such violation could be considered material to the
Sub-Adviser's advisory clients. In addition, the Sub-
Adviser shall promptly provide the Adviser a memorandum of
the type described in Section 7(h).
(b) The Sub-Adviser represents and warrants that it has
adopted and implemented written policies and procedures, as
required by: (i) Rule 206(4)-7 under the Advisers Act that
are reasonably designed to prevent violations of the
Advisers Act and the rules thereunder by the Sub-Adviser
and its supervised persons ("Advisers Act Compliance
Procedures"), and the Adviser and the Trust have been
provided a copy of a summary of the Advisers Act
Compliance Procedures and will be provided with any future
amendments thereto; and (ii) Rule 38a-1 under the 1940 Act,
with respect to the Sub-Adviser and the Managed Portion,
that are reasonably designed to prevent violations of the
Federal Securities Laws, as defined in Rule 38a-1, by the
Sub-Adviser, its employees, officers, and agents ("Fund
Compliance Procedures"), and the Adviser and the Trust have
been provided a copy of a summary of the Fund Compliance
Procedures and will be provided with any future amendments
thereto. The Sub-Adviser has and shall provide its
compliance policies and procedures pertaining to the Sub-
Adviser's services provided to the Fund under this
Agreement to the Fund's Chief Compliance Officer to permit
the Fund's Chief Compliance Officer to conduct review and
oversight of such policies and procedures in accordance
with Rule 38a-1 under the 1940 Act and shall promptly
notify the Adviser of: (1) any material changes to its
compliance policies and procedures; (2) any new policies
and procedures that the Sub-Adviser adopts pursuant to Rule
206(4)-7 under the Advisers Act or otherwise as they
pertain to activities performed for or on behalf of the
Fund; and (3) the retirement of any policies and procedures
previously adopted by the Sub-Adviser pursuant to Rule
206(4)-7 under the Advisers Act or otherwise as they
pertained to activities performed for or on behalf of the
Fund. The Sub-Adviser shall also prepare and provide to the
Adviser and the Board summaries of its compliance policies
and procedures that reflect the objective and key controls
of each corresponding policy. The Fund, the Adviser, or the
Fund's Chief Compliance Officer may make any reasonable
request for the provision of information or for other
cooperation from the Sub-Adviser with respect to the Sub-
Adviser's duties under this Agreement, and the Sub-Adviser
shall use its best efforts to promptly comply with such
request, including without limitation furnishing the Fund,
the Adviser, or the Fund's Chief Compliance Officer with
such documents, reports, data and other information as the
Fund may reasonably request regarding transactions on
behalf of the Fund, the Sub-Adviser's performance hereunder
or compliance with the terms hereof, and participating in
such meetings (and on-site visits among representatives of
the Fund and the Sub-Adviser) as the Fund may reasonably
request. The Sub-Adviser agrees to maintain and implement
a compliance program that complies with the requirements of
Rule 206(4)-7 under the Advisers Act.
(c) The Sub-Adviser represents and warrants that it has
adopted a written code of ethics complying with the
requirements of Rule 17j-1 under the 1940 Act and
Section 204A of the Advisers Act and has provided the
Fund with a copy of the code of ethics and evidence of
its adoption, and will promptly notify the Sub-Adviser
of any material changes to (including policies added to
or deleted from) its code of ethics. Within thirty (30)
days of the end of the last calendar quarter of each
year while this Agreement is in effect or upon the
written request of the Fund, the Adviser, or the Fund's
Chief Compliance Officer, the president or a vice
president or general partner or managing member or the
equivalent of the Sub-Adviser shall certify to the Fund
that (i) the Sub-Adviser has complied with the
requirements of Rule 17j-1 and Section 204A during the
previous year and that there has been no violation of
the Sub-Adviser's code of ethics or, if such a violation
has occurred, that appropriate action was taken in
response to such violation and Sub-Adviser has provided
a written report to the Adviser regarding the violation
and (ii) the Sub-Adviser has adopted procedures
reasonably designed to prevent Access Persons from
violating the code of ethics. Upon the written request
of the Fund, the Adviser, or the Fund's Chief Compliance
Officer, the Sub-Adviser shall permit the Fund, the
Adviser, and their employees or agents to examine the
reports required to be made to the Sub-Adviser by Rule
17j-1(d)(1).
(d) The Sub-Adviser has established and will keep in
effect a "disaster recovery" preparedness plan that sets
forth procedures for recovery of critical business
functions at minimum operating levels and can be
implemented within a 6 hour time period. The Sub-Adviser
shall notify the Adviser, as soon as practicable by
telephone, electronic mail or such other method of
prompt communication as may be available under the
circumstances, of the occurrence of any event requiring
the Sub-Adviser to implement any procedures under such
plan.
9. Insurance. The Sub-Adviser shall maintain errors and
omissions insurance coverage and fidelity insurance coverage,
each in such amounts as agreed upon from time to time by the
Adviser and the Sub-Adviser, and from insurance providers
that are in the business of regularly providing insurance
coverage to investment advisers. In no event shall the Sub-
Adviser's errors and omissions insurance coverage be less
than $1 million or the Sub-Adviser's fidelity insurance
coverage be less than $1 million. The Sub-Adviser shall
provide prior written notice to the Adviser (i) of any
material changes in its insurance policies or insurance
coverage; or (ii) if any material claims will be made on its
insurance policies. Furthermore, it shall upon request
provide to the Adviser any information it may reasonably
require concerning the amount of or scope of such insurance.
10. Status of the Sub-Adviser. The Sub-Adviser shall, for all
purposes herein provided, be deemed to be an independent
contractor and, except as expressly provided or authorized
herein, shall have no authority to act for or represent the
Fund in any way or otherwise be deemed an agent of the
Adviser or the Fund.
11. Services Not Exclusive. Nothing in this Agreement shall
limit or restrict the right of the Sub-Adviser or any
director, officer, affiliate or employee of the Sub-Adviser
to engage in any other business or to devote his or her time
and attention in part to the management or other aspects of
any other business, whether of a similar nature or a
dissimilar nature. The Adviser and the Trust understand that
the Sub-Adviser may give advice and take action with respect
to any of its other clients or for its own account which may
differ from the timing or nature of action taken by the Sub-
Adviser with respect to the Fund. Nothing in this Agreement
imposes upon the Sub-Adviser any obligation to purchase or
sell or to recommend for purchase or sale, with respect to
the Fund, any security or other instrument which the Sub-
Adviser or its partners, officers, employees or affiliates
may purchase or sell for its or their own account(s) or for
the account of any other client.
12. Representations and Warranties of the Sub-Adviser.
(a) The Sub-Adviser represents and warrants to the Adviser
that: (i) it is registered as an investment adviser under the
Advisers Act and is registered or licensed as an investment
adviser under the laws of all jurisdictions in which its
activities require it to be so registered or licensed; (ii)
it has reviewed the registration requirements of the CEA and
the National Futures Association ("NFA") relating to
commodity trading advisors and is either appropriately
registered with the CFTC and a member of the NFA or exempt or
excluded from CFTC registration requirements; (iii) it will
maintain each such registration, license or membership in
effect at all times during the term of this Agreement and
will obtain and maintain such additional governmental, self-
regulatory, exchange or other licenses, approvals and/or
memberships and file and maintain effective such other
registrations as may be required to enable the Sub-Adviser to
perform its obligations under this Agreement; (iv) it is duly
organized and validly existing, and is authorized to enter
into this Agreement and to perform its obligations hereunder
and this Agreement has been duly executed and delivered by
the Sub-Adviser; (v) this Agreement is enforceable against
the Sub-Adviser in accordance with its terms, subject as to
enforcement to bankruptcy, insolvency, reorganization,
arrangement, moratorium and other similar laws of general
applicability relating to or affecting creditors' rights and
to general equity principles; and (vi) neither the execution
or delivery of this Agreement by the Sub-Adviser nor its
performance of its obligations hereunder shall conflict with,
violate, breach or constitute a default under any term or
provision of its constituent or governing documents or any
indenture, mortgage, deed of trust, instrument, agreement or
other document to which the Sub-Adviser is a party or by
which it is bound or to which any of its assets are subject
or any applicable statute, law, rule, regulation, order or
other legal requirement applicable to the Sub-Adviser or any
of its assets.
(b) The Sub-Adviser shall promptly notify the Adviser and the
Trust in writing of the occurrence of any of the following
events: (i) any breach of this Agreement; (ii) any of the
representations and warranties of the Sub-Adviser contained
herein becomes untrue after the execution of this Agreement;
(iii) 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 or other applicable
law, rule or regulation or if the Sub-Adviser becomes aware that
it is or likely may become subject to any statutory
disqualification pursuant to Section 9(b) of the 1940 Act or
otherwise that prevents the Sub-Adviser from serving as an
investment adviser or performing its duties pursuant to this
Agreement; (iv) the Sub-Adviser shall have been served or
otherwise becomes aware of any action, suit, proceeding, inquiry
(other than routine regulatory inquiries or examinations or so-
called sweep examinations) or investigation applicable to it, at
law or in equity, before or by any court, public board or body,
involving or in any way relevant to the affairs of the Fund such
relevance to be determined by the Sub-Adviser in consultation
with its outside counsel as necessary; (v) Xxxxxx Xxxxxxxxxx,
Xxxxx Xxxxx, or Xxxxx Xxxxxxx of the Sub-Adviser (together with
such other persons as the Adviser and the Sub-Adviser may agree
in writing from time to time, the "Key Personnel") are no longer
active, or are proposed to no longer be active, in the day-to-
day management of and/or trading decisions for the Managed
Portion; (vi) any change in any of the Key Personnel and/or any
change concerning any of the Key Personnel (including, without
limitation, any change in the location of any such person or any
adverse change in the position, function, regulatory or
licensing status or other circumstances of any such person)
which may adversely affect the Managed Portion; (vii) any
proposed change in control of the SubAdviser; (viii) any
proposed assignment of this Agreement; (ix) the Sub-Adviser
becomes aware of any material fact respecting or relating to the
Sub-Adviser or the investment strategies of the Managed Portion
that is not contained in the Registration Statement, as amended
and supplemented from time to time, regarding the Fund, or any
amendment or supplement thereto, but that is, required to be
disclosed therein, and of any statement respecting or relating
to the Sub-Adviser, the Sub-Adviser's investment strategies or
the Managed Portion contained therein thatbecomes untrue in any
material respect; (x) any change in the Sub-Adviser's financial
condition which could reasonably be expected to adversely affect
its abilities to perform its duties hereunder and of any
reduction in the amount of coverage under the Sub-Adviser's
errors and omissions or professional liability insurance
coverage; (xi) Sub-Adviser becomes aware of any event or
circumstance that could reasonably constitute (or will
constitute with the passage of time) a default, event of
default, or termination event (or other similar event or
circumstance, however defined) under any Trading Agreement or
otherwise with respect to the Managed Portion, and Sub-Adviser
hereby agrees to use its reasonable best efforts to monitor the
occurrence of any such event or circumstance; (xii) any
Counterparty (A) communicates to Sub-Adviser (in any manner
whatsoever) that such Counterparty will declare, might declare,
or believes it is entitled to declare, a default, event of
default, or termination event (or other similar event or
circumstance, however defined) or (B) makes any changes to (i)
the fees, rates, or other charges or (ii) the daily or aggregate
trading limits, margin requirements, eligible collateral
requirements, or other risk parameters applicable to the Managed
Portion, and in each case Sub-Adviser shall forward to Adviser
all correspondence received from such Counterparty in connection
therewith; and (xiii) any change in the Sub-Adviser's status as
a registered CTA or member of the NFA or, if the Sub-Adviser is
relying on an exemption or exclusion from registration as a CTA,
of any event that will make it ineligible for such exemption or
exclusion. The Sub-Adviser further agrees to notify the Adviser
and the Trust promptly if any statement regarding the Sub-
Adviser contained in the Trust's Registration Statement with
respect to the Fund, or any amendment or supplement thereto,
becomes untrue or incomplete in any material respect.
(c) The Sub-Adviser represents and warrants that it has
delivered to the Fund at least 48 hours prior to the
execution of this Agreement a copy of the Sub-Adviser's
current Form ADV (Parts 1 and 2) and all information in such
document is complete and accurate in all material respects as
of the date hereof and is in conformity in all material
respects with applicable securities laws, rules and
regulations. The Sub-Adviser hereby covenants and agrees
promptly to deliver to the Fund all amendments to its Form
ADV.
(d) The Sub-Adviser acknowledges and agrees that it has not
received legal or regulatory advice from the Fund, the
Adviser or any of their respective employees or
representatives, and is not entitled to rely on any
statements or omissions by such employees or representatives
regarding applicable law or regulation in satisfying its
obligations hereunder, including its obligation to comply
with all applicable laws and regulations.
13. Representations and Warranties of the Adviser. The
Adviser represents and warrants to the Sub-Adviser that: (i)
it is registered as an investment adviser under the Advisers
Act and is registered or licensed as an investment adviser
under the laws of all jurisdictions in which its activities
require it to be so registered or licensed, (ii) it is duly
organized and validly existing, and is authorized to enter
into this Agreement and to perform its obligations hereunder;
and (iii) neither the execution or delivery of this Agreement
by the Adviser nor its performance of its obligations
hereunder shall conflict with, violate, breach or constitute
a default under any term or provision of its constituent or
governing documents or any indenture, mortgage, deed of
trust, instrument, agreement or other document to which the
Adviser is a party or by which it is bound or to which any of
its assets are subject or any applicable statute, law, rule,
regulation, order or other legal requirement applicable to
the Adviser or any of its assets.
14. Certain Records.
(a) The Sub-Adviser agrees to maintain, in the form and for
the period required by Rule 31a-2 under the 1940 Act or such
longer period as the Adviser or Fund may direct, all records
relating to the Sub-Adviser's services under this Agreement
and the Fund's investments made by the Sub-Adviser as are
required by Section 31 of the 1940 Act, and rules and
regulations thereunder, and by other applicable legal
provisions, including the Advisers Act, the 1934 Act, the
CEA, and rules and regulations thereunder, and the Fund's
compliance policies and procedures, and to preserve such
records for the periods and in the manner required by that
Section, and those rules, regulations, legal provisions and
compliance policies and procedures. In compliance with the
requirements of Rule 31a-3 under the 1940 Act, any records
required to be maintained and preserved pursuant to the
provisions of Rule 31a-1 and Rule 31a-2 promulgated under the
1940 Act that are prepared or maintained by the Sub-Adviser
on behalf of the Fund are the property of the Fund and shall
be surrendered promptly to the Fund or the Adviser on
request.
(b) The Sub-Adviser agrees that all accounts, books and other
records maintained and preserved by it as required hereby
shall be subject at any time, and from time to time, to such
periodic, special and other examinations by the Securities
and Exchange Commission, or any governmental agency or other
instrumentality having regulatory authority over the Adviser
or the Fund and, upon reasonable request, the Fund's
auditors, the Fund or any representative of the Fund
(including, without limitation, the Fund's Chief Compliance
Officer), and the Adviser.
15. Liability of Sub-Adviser.
(a) The Sub-Adviser shall not be liable to the Trust, the
Fund, the Adviser or to any of their respective affiliates or
to any shareholder for any error of judgment, mistake of law
or for any loss suffered by the Fund in connection with the
performance of this Agreement, except for a loss resulting
from a breach of fiduciary duty with respect to the receipt
of compensation for services or a loss resulting from the
Sub-Adviser's (i) willful misfeasance, bad faith, gross
negligence or reckless disregard in the performance of its
obligations and duties hereunder, or (ii) material breach of
this Agreement.
(b) In no event will the Sub-Adviser or its affiliates have
any responsibility for any other fund of the Trust, for any
portion of the Fund not managed by the Sub-Adviser or for the
acts or omissions of any other sub-investment adviser to the
Trust or Fund.
Nothing in this Section 15 shall be deemed a limitation or
waiver of any obligation or duty that may not by law be
limited or waived.
16. Indemnification.
(a) Sub-Adviser will, to the extent permissible under
applicable law, indemnify and hold harmless Adviser and
the Trust, their affiliates, and their respective
employees, managers, members, officers, trustees,
directors and shareholders from and against all losses,
claims, damages, liabilities, costs and expenses
(including, without limitation, reasonable attorneys' and
accountants' fees and disbursements) arising out of this
Agreement except to the extent such claims arise out of:
(i) Adviser's willful misfeasance, bad faith, gross
negligence or reckless disregard in the performance of
its obligations and duties hereunder; or (ii) Adviser's
material breach of this Agreement;
(b) Adviser will, to the extent permissible under applicable
law, indemnify and hold harmless Sub-Adviser, its
affiliates, and their respective employees, officers and
directors from and against all losses, claims, damages,
liabilities, costs and expenses (including, without
limitation, reasonable attorneys' and accountants' fees
and disbursements) arising out of this Agreement, except
to the extent such claims arise out of: (i) Sub-Adviser's
willful misfeasance, bad faith, gross negligence or
reckless disregard in the performance of its obligations
and duties hereunder; (ii) Sub-Adviser's material breach
of this Agreement; or (iii) Sub-Adviser's breach of
fiduciary duty with respect to the receipt of
compensation for services.
17. Duration and Termination.
(a) This Agreement is effective as of the date first
written above, provided that this Agreement shall not take
effect unless it has first been approved (i) by the 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, and (ii) by vote of a majority
of the Fund's outstanding voting securities (within the
meaning of the 1940 Act), unless the Adviser has authority
to enter into this Agreement pursuant to exemptive relief
from the SEC without a vote of the Fund's outstanding
voting securities.
(b)Unless sooner terminated as provided herein, this
Agreement shall continue in effect for two years from its
date of execution. Thereafter, if not terminated, this
Agreement shall continue automatically for successive
periods of twelve months each, provided that such
continuance is specifically approved at least annually (i)
by the 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, and (ii) by either
the vote of (A) the Board or (B) a majority of the
outstanding voting securities of the Fund (within the
meaning of the 1940 Act); provided further, that if the
shareholders fail to approve the Agreement as provided
herein, the Sub-Adviser may continue to serve hereunder in
the manner and to the extent permitted by the 1940 Act and
the rules and regulations thereunder. The foregoing
requirement that continuance of this Agreement be
"specifically approved at least annually" shall be
construed in a manner consistent with the 1940 Act and the
rules and regulations thereunder.
(c) Notwithstanding the foregoing, this Agreement may be
terminated at any time, without the payment of any penalty,
by vote of a majority of the Board or by a vote of a
majority of the outstanding voting securities of the Fund.
This Agreement may also be terminated, without the payment
of any penalty, by the Adviser: (i) upon 60 days written
notice to the Sub-Adviser; (ii) immediately upon material
breach by the Sub-Adviser of any of the representations,
warranties and agreements set forth in this Agreement; or
(iii) immediately if, in the reasonable judgment of
Adviser, the Sub-Adviser becomes unable to discharge its
duties and obligations under this Agreement, including
without limitation, circumstances such as financial
insolvency of the Sub-Adviser. The Sub-Adviser may
terminate this Agreement at any time, without the payment
of any penalty, on 90 days written notice to Adviser and
the Trust. This Agreement will terminate automatically in
the event of its assignment or upon termination of the
Investment Advisory Agreement, as it relates to this Fund.
(d) In the event of termination for any reason, all records
of the Fund that are maintained by the Sub-Adviser in
accordance with the 1940 Act and Section 14 of this
Agreement shall promptly be returned to the Adviser or the
Trust, free from any claim or retention of rights in such
records by the Sub-Adviser, although the Sub-Adviser may,
at its expense, make and retain a copy of such records.
18. Notices. Unless otherwise provided in this Agreement
or otherwise agreed by the Adviser in writing, all notices
and other communications hereunder shall be in writing.
Notices and other writings delivered or mailed postage
prepaid to the Adviser and the Trust at BlackRock Advisors,
LLC, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000, Attention:
General Counsel-Mutual Funds, or to the Sub-Adviser at
Marathon Asset Management, LP, One Bryant Park, 38th fl, Xxx
Xxxx, XX 00000, Attention: Xxxxxx Xxxxxxxxxx, or to such
other address as the Adviser or the Sub-Adviser may
hereafter specify by written notice to the most recent
address specified by the other party, shall be deemed to
have been properly delivered or given hereunder to the
respective addressee when delivered by hand or facsimile
or five days after mailed by certified mail, post-paid, by
return receipt requested to the other party at the
principal office of such party.
19. Confidentiality.
(a) The Sub-Adviser shall treat all records and other
information relative to the Trust, the Fund and the Adviser
and their prior, present or potential shareholders and
clients, including the list of portfolio securities,
instruments and assets and liabilities of the Fund, and any
Trading Agreements, or excerpts thereof, which it shall
receive or have access to in the performance of its duties
confidentially and as proprietary information of the Trust
and the Adviser. The Sub-Adviser shall not disclose such
records or information to any third party or use such records
or information for any purpose other than performance of its
responsibilities and duties hereunder (except after prior
notification to and approval in writing by the Trust and the
Adviser). Neither the Adviser nor the Sub-Adviser shall use
its knowledge of non-public information regarding the Fund's
portfolio as a basis to place or recommend any securities or
other transactions for its own benefit or the benefit of
others or to the detriment of the Fund.
(b) The Sub-Adviser hereby authorizes the Fund and the
Adviser to use all related evaluation material, analyses and
information regarding the Sub-Adviser and the investment
program of the Fund, including information about portfolio
holdings and positions, in connection with (1) marketing the
Fund and the Adviser's services to the Trust, (2) providing
ongoing information to existing shareholders and (3)
providing any required regulatory disclosures.
(c) The confidentiality provisions of this Section 19 will
not apply to any information that either party hereto can
show: (a) is or subsequently becomes publicly available
without breach of any obligation owed to the other party; (b)
became known to either party from a source other than the
other party, and without breach of an obligation of
confidentiality owed to the other party; (c) is independently
developed by either party without reference to the
information required by this Agreement to be treated
confidentially; or (d) is used by either party in order to
enforce any of its rights, claims or defenses under, or as
otherwise contemplated in, this Agreement. Nothing in this
Section 19 will be deemed to prevent a party from disclosing
any information received hereunder pursuant to any applicable
law, rule or regulation or in response to a request from a
duly constituted regulatory, self-regulatory or other
judicial authority with appropriate jurisdiction over such
party.
20. Use of BlackRock Names.
The Sub-Adviser acknowledges and agrees that the names
"BlackRock Funds" and BlackRock Advisors, LLC, and
abbreviations or logos associated with those names, are the
valuable property of the Adviser and its affiliates; that the
Trust, has the right to use such names, abbreviations and
logos; and that the Sub-Adviser shall use the names
"BlackRock Funds," BlackRock Advisors, LLC, and associated
abbreviations and logos, only in connection with the Sub-
Adviser's performance of its duties hereunder. Further, in
any communication with the public and in any marketing
communications of any sort, the Sub-Adviser agrees to obtain
prior written approval from the Adviser before using or
referring to "BlackRock Funds" and the Adviser, or the Fund
or any abbreviations or logos associated with those names.
21. Use of Sub-Adviser Name. The Adviser and the Trust are
authorized to publish and distribute any information,
including but not limited to registration statements,
advertising or promotional material, regarding the provision
of sub-investment advisory services by the Sub-Adviser
pursuant to this Agreement and to use in advertising,
publicity or otherwise the name of the Sub-Adviser, or any
trade name, trademark, trade device, service xxxx, symbol or
logo of the Sub-Adviser, without the prior written consent
of the Sub-Adviser. In addition, the Adviser may distribute
information regarding the provision of sub-investment
advisory services by the Sub-Adviser to the Board without the
prior written consent of the Sub-Adviser. The Adviser shall
provide copies of such items to the Sub-Adviser upon request
within a reasonable time following such use, publication or
distribution.
22. Severability. If any provision of this Agreement shall be
held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be
affected thereby.
23. Amendments. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by the party against whom
enforcement of the change, waiver, discharge or termination
is sought. To the extent required by applicable law, no
amendment of this Agreement shall be effective until approved
(i) by a vote of a majority of the Independent Trustees, and
(ii) if the terms of this Agreement shall have changed, by a
vote of a majority of the Fund's outstanding voting
securities (except in the case of (ii), pursuant to the terms
and conditions of the SEC order permitting it to modify the
Agreement without such vote).
24. Third-Party Beneficiary. The Fund is an intended third-
party beneficiary under this Agreement and is entitled to
enforce this Agreement as if it were a party thereto.
25. Survival. Sections 4, 12, 13, 14, 15, 16, 17, 18, 20 and
24 shall survive the termination of this Agreement.
26. Captions. The captions of this Agreement are included for
convenience only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or
effect.
27. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same
instrument.
28. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of Delaware, and in
accordance with the applicable provisions of the 1940 Act and
the rules and regulations thereunder. To the extent that the
applicable laws of the State of Delaware or any provisions
herein conflict with the applicable provisions of the 1940
Act, the latter shall control.
[remainder of page intentionally blank]
[PAGE BREAK]
29. Series of BlackRock Funds.
"BlackRock Funds" and "Trustees" refer respectively to the
trust created by the Trustees, as trustees but not individually
or personally, acting from time to time under a Declaration of
Trust dated December 22, 1988, as amended, which is hereby
referred to and a copy of which is on file at the office of the
State of Secretary of the Commonwealth of Massachusetts and at
the principal office of the Fund. The obligations of "BlackRock
Funds" entered into in the name or on behalf thereof by any of
the Trustees, officer, representatives or agents are made not
individually, but in such capacities, and are not binding upon
any of the Trustees, shareholders, officers, representatives or
agents of the Fund personally, but bind only the Trust Property
(as defined in the Declaration of Trust), and all persons
dealing with any class of shares of the Fund must look solely to
the Trust Property belonging to such class for the enforcement
of any claims against the Fund.
IN WITNESS WHEREOF, the parties hereto have caused their
respective duly authorized officers to execute this Agreement as
of the day and year first written above.
BlackRock Advisors, LLC
By:
Name:
Xxxx Xxxxxxxxx
Title:
Managing Director
Marathon Asset Management, LP
By:
Name:
Title:
ACKNOWLEDGEMENT:
The undersigned officer of the
Trust hereby executes this
Agreement on behalf of the Fund
as of the date first written
above. The Trust does not hereby
undertake, on behalf of the Fund
or otherwise, any obligation to
the Sub-Adviser.
BlackRock Funds,
on behalf of its series
BlackRock Multi-Manager Alternative Strategies Fund
By:
Name:
Xxxx Xxxxxxx
Title:
Chief Financial Officer and Assistant Treasurer
[PAGE BREAK]
Exhibit A
to
Sub-Advisory Agreement between
BlackRock Advisors, LLC and
Marathon Asset Management, LP
Fee (as a percentage of average daily net assets of the Managed
Portion):
If, at any time, (i) the Sub-Adviser or any of its affiliates
provides to any other investment company registered under the
1940 Act investment advisory services using investment
strategies substantially similar to those provided by the Sub-
Adviser to the Fund pursuant to this Agreement, (ii) the value
of the assets under management with respect to which the Sub-
Adviser provides such services to such other investment company
is comparable to or less than the value of the Managed Portion,
and (iii) the Sub-Adviser is compensated for providing such
services at a rate less than the rate set forth on this Exhibit
A, then the Sub-Adviser shall promptly notify the Adviser of the
foregoing in reasonable detail and, as of the date of such
notice, the rate set forth on this Exhibit A shall immediately
and without requirement of further action be deemed amended to
reflect a rate equal to the lower rate at which the Sub-Adviser
is compensated by such other investment company.
