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 GLG Partners LP with respect to the
Fund
[PAGE BREAK]
SUB-ADVISORY AGREEMENT
THIS SUB-ADVISORY AGREEMENT (the "Agreement") is made as of
April 26, 2016 by and between BLACKROCK ADVISORS, LLC, a
Delaware limited liability company (the "Adviser"), and GLG
Partners LP, a United Kingdom 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; and
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 9:00 am (Eastern time) 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 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 in advance
and in writing by the Adviser to the Sub-Adviser, as
amended in writing from time to time by the Adviser and
acknowledged by the Sub-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 or supplemented 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 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. The duties to be
carried out by the Sub-Adviser pursuant to this power-
of-attorney shall be undertaken at the Fund's expense.
This power-of-attorney is a continuing power-of-attorney
and shall remain in full force and effect until revoked
by the Adviser or the Fund in writing, but any such
revocation shall not affect any transaction initiated
prior to receipt by the Sub-Adviser of such notice. Such
power-of-attorney shall be automatically revoked upon
the termination of this Agreement.
(d) The Sub-Adviser is responsible for and appointed to
act upon, or refrain from acting upon, all proxies
solicited by or with respect to the issuers of
securities in which the assets of the Managed Portion
are invested from time to time 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 Trust's Board of Trustees (the "Board"), and that it
will promptly provide (i) any material 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 Investment Advisers Act
of 1940, as amended (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 applicable self-regulatory organization; (v) any
1940 Act exemptive order applicable to the Fund and the
Managed Portion; (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 adopted by the Board of the Fund and/or
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 Sub-Adviser shall maintain compliance
procedures and operational processes for the Fund that
are reasonably designed 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 responsibility
for compliance with any of the foregoing.
Notwithstanding the above, the Adviser acknowledges that
in instances where compliance with applicable laws,
regulations, policies, procedures or guidelines is
dependent on the composition of the holdings of the
entire Fund, the Sub-Adviser is only responsible for
ensuring compliance in the Managed Portion.
(f) The Sub-Adviser agrees that it will not knowingly
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 knowingly deal with itself, or with
members of the Board or any principal underwriter of the
Fund, 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, and
acknowledged by, 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 of the Managed Portion
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 of the Managed Portion 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, as
permitted in accordance with the list of Counterparties
with which the Managed Portion is permitted to engage in
transactions, 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. 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 Section
11.6 of the Financial Conduct Authority's Conduct of
Business Handbook (the "FCA COB"), 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,
Section 11.6 of the FCA COB, and such other conditions
and limitations as may be established by the Adviser
from time to time and communicated to the Sub-Adviser in
writing, 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 seek 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, which changes
shall be communicated to the Sub-Adviser in writing and
to which Sub-Adviser shall be subject only upon actual
receipt of such notice.
(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), (f) 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 and shall have the authority to make any
filing required under Sections 13(d), (f) and (g). If
the Sub-Adviser is required to file any other report
specifically in regards to the Managed Portion 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, and
other similar costs and transaction-related expenses and fees
arising out of transactions effected on behalf of the Fund,
which shall be deducted from the Managed Portion. 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 reasonably 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 its
reasonable share of 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 1940 Act exemptive order applicable to the Fund and
the Managed Portion, any amendments or supplements to
any of the foregoing and such other information with
regard to the affairs of the Fund as the Sub-Adviser may
reasonably request.
(b) The Sub-Adviser shall, upon reasonable request,
report 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. Upon written request of the Adviser,
the Sub-Adviser shall review draft reports to
shareholders, registration statements, marketing
materials or amendments or supplements thereto or
portions thereof that directly 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 reasonable 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 containing
factual information about the Sub-Adviser or its
strategy.
(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.
(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, 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 Investment Guidelines and the Adviser
Procedures.
(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 taking reasonable measures to arrange for
access by the Fund or such designee to the files and
websites of the executing brokers and Counterparties
with respect to the Managed Portion. 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 promptly.
(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 reasonable 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 reasonable request of the
Board, Adviser, the custodian or the administrator,
providing recommendations for pricing and fair
valuations with respect to investments held in the
Managed Portion (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.
Additionally, the Sub-Adviser shall use reasonable
efforts to obtain portfolio prices for over-the-counter
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 Managed Portion, 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, a summary of those matters discussed in
the Sub-Adviser's annual review under Rule 206(4)-7
under the Advisers Act that materially impacted the Sub-
Adviser's management of the Managed Portion and an
annual due diligence questionnaire. 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 in all material
respects 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 provide necessary
assistance to 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 reasonably 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. For the avoidance of doubt, (i)
investment decisions and the processes used to make
investment decisions where such investment decisions
ultimately result in losses, and (ii), so long as no
fault of the Sub-Adviser, failures of the Fund's
Counterparties, custodian, administrator or other
service providers to timely and accurately execute their
respective functions with respect to the Managed
Portion, shall not constitute errors or trade errors
attributable to the Sub-Adviser; however, the Sub-
Adviser shall reasonably assist with the recovery of
losses related to these third party failures, at the
Fund's expense. 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 reasonable 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. Sub-Adviser
will reimburse the Fund for any error attributable to
the Sub-Adviser and any commissions arising therefrom,
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 upon
detection of any material breach of any of the Investment
Guidelines, Adviser Procedures, the Registration Statement
and of any material violation of any applicable law or
regulation, including the 1940 Act and Subchapter M of the
Internal Revenue Code, with respect to the Managed Portion.
The Sub-Adviser shall also notify the Adviser promptly upon
detection of any material 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 would be considered material to the Sub-
Adviser's ability to manage the Managed Portion. For the
avoidance of doubt, subject to applicable law, the Sub-
Adviser will notify the Adviser if it receives a Xxxxx
Notice (or the functional equivalent) or is the subject of
a final administrative, judicial or arbitral determination
or indictment by a regulatory or governmental body or
agency in respect of a material violation of the securities
laws or regulations which would be considered material to
the Sub-Adviser's ability to manage the Managed Portion.
(b) The Sub-Adviser represents and warrants that it has
adopted and implemented written policies and procedures, as
required by 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 access to
the Advisers Act Compliance Procedures. The Sub-Adviser
represents and warrants that the Advisers Act Compliance
Procedures incorporate policies and controls reasonably
designed to ensure compliance with the provision of the
1940 Act applicable to its activities hereunder with
respect to the Fund. The Sub-Adviser has and shall provide
access to its compliance policies and procedures pertaining
to the Sub-Adviser's services provided to the Managed
Portion 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 changes
that would be considered material 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
Managed Portion; 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 Managed Portion. 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 commercially reasonable efforts to promptly comply with
such request, including without limitation furnishing or
providing access to 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 is designed to comply 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 Chief
Compliance Officer of the Sub-Adviser shall certify to the
Fund that (i) the Sub-Adviser has complied in all material
respects with the requirements of Rule 17j-1 and Section
204A during the previous year and that to the Chief
Compliance Officer of the Sub-Adviser's knowledge there has
been no material 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 (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 form of 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 crime coverage 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 crime 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 that would have a material adverse effect
on the Managed Portion; or (ii) if any material claims will
be made on its insurance policies that would have a material
adverse effect on the Managed Portion. 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.
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, is authorized and regulated by the Financial
Conduct Authority of the United Kingdom and is registered or
licensed as an investment adviser under the laws of all
jurisdictions in which its activities with respect to the
Managed Portion 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, except to the extent such violation, breach or
default would not have a material adverse effect on the Sub-
Adviser's ability to fulfill its duties under this Agreement.
(b) Subject to applicable law, the Sub-Adviser shall promptly
notify the Adviser and the Trust in writing of the occurrence
of any of the following events: (i) any of the
representations and warranties of the Sub-Adviser contained
in this section becomes untrue in any material respect after
the execution of this Agreement; (ii) 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 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; (iii) the Sub-Adviser shall have
been served or notified of any material action, suit, or
proceeding, at law or in equity, before or by any court,
public board or body, regarding the affairs of the Managed
Portion; (iv) Xxxxx Xxxxx 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") is
no longer active, or is proposed to no longer be active, in
the day-to-day management of and/or trading decisions for the
Managed Portion; (v) 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; (vi) any proposed assignment of this
Agreement; (vii) 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
required to be disclosed, but 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, and of any material statement respecting the Sub-
Adviser, the Sub-Adviser's investment strategies or the
Managed Portion contained therein that becomes untrue in any
material respect; (viii) any change in the Sub-Adviser's
financial condition that would materially adversely impact
its abilities to perform its duties hereunder and of any
material reduction in the amount of coverage under the Sub-
Adviser's errors and omissions or professional liability
insurance coverage; (ix) Sub-Adviser becomes aware of any
event or circumstance that constitutes an event of default,
or termination event under any Trading Agreement with respect
to the Managed Portion, and Sub-Adviser hereby agrees to use
its commercially reasonable efforts to monitor the occurrence
of any such event or circumstance; (x) 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, an event of default, or termination
event 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 which would have a material adverse
impact on the Managed Portion, and in each case Sub-Adviser
shall forward to Adviser all correspondence received from
such Counterparty in connection therewith; and (xi) 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 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 thereof 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
its current Form ADV quarterly or upon reasonable request.
(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 legal
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.
(a) 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; (iv) it has adopted and implemented written policies
and procedures, as required by Rule 206(4)-7 under the
Advisers Act, which are reasonably designed to seek to
prevent violations of federal securities laws by the Adviser,
its employees, supervised persons, officers, and agents; (vi)
it is not prohibited by the 1940 Act or the Advisers Act from
performing the services contemplated by the Investment
Advisory Agreement it has entered into with the Trust and
will promptly notify the Sub-Adviser of the occurrence of any
event that is likely to disqualify the Adviser from serving
as an investment adviser to the Fund pursuant to Section 9(a)
of the 1940 Act or other applicable law, rule or regulation;
(vii) it will comply in all material respects with the 1940
Act, the Advisers Act and all other applicable laws and
regulations to which it may be subject, including, without
limitation, Subchapter M of the Internal Revenue Code; and
(viii) the Fund's Registration Statement does not contain an
untrue statement of a material fact or omits to state a
material fact necessary to make the statements contained
therein, in light of the circumstances under which they were
made, not misleading.
(b) Subject to applicable law, the Adviser shall promptly
notify the Sub-Adviser and the Trust in writing of the
occurrence of any of the following events: (i) any of the
representations and warranties of the Adviser contained in
this section becomes untrue in any material respect after the
execution of this Agreement; (ii) the Adviser shall have been
served or notified of any material action, suit, proceeding
or investigation, at law or in equity, before or by any
court, public board or body, that is material to the affairs
of the Fund; (iii) any change in control (as defined in
Section 2(a)(9) of the 0000 Xxx) of the Adviser; and (iv) any
change in the Adviser's status as a registered CPO with
respect to the Fund and as a member of the NFA or, if the
Adviser is relying on an exemption or exclusion from
registration as a CPO, of any event that will make it
ineligible for such exemption or exclusion.
14. Anti-Money Laundering Representation and Warranties. The
Adviser and/or the Trust represents, warrants and agrees
that:
(a) the Trust has implemented anti-money laundering policies
and procedures that are reasonably designed to comply with
the Bank Secrecy Act, as amended by the USA PATRIOT Act of
2001 and any other applicable anti-money laundering laws and
regulations.
(b) it has processes, procedures and systems reasonably
designed to ensure compliance with economic sanctions
programs administered by the Office of Foreign Assets Control
("OFAC"), including the list of specially designated
nationals and blocked persons administered by OFAC as such
list may be amended from time to time (commonly known as the
"SDN List"), and any other applicable sanctions programs.
15. 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, all
records relating to the Sub-Adviser's services under this
Agreement and the Managed Portion'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 Managed Portion are the property of the Fund
and shall be surrendered promptly to the Fund or the Adviser
on request provided, however, that the Adviser and the Fund
grant the Sub-Adviser a perpetual, worldwide, irrevocable,
nonexclusive license to use such records with respect to the
Managed Portion.
(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. The Sub-Adviser further agrees that it will
comply with reasonable requests for access from the Fund's
auditors, the Fund or any representative of the Fund
(including, without limitation, the Fund's Chief Compliance
Officer), and the Adviser to all accounts, books and other
records maintained and preserved by it as required hereby.
16. 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 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 liability 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. Nor will the Sub-Adviser or its affiliates
have any liability for any untrue statement or alleged untrue
statement of a material fact contained in the Registration
Statement, proxy materials, reports, advertisements, sales
literature or other materials pertaining to the Fund,
including any amendment thereof or any supplement thereto, or
the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statement therein not misleading, unless such a statement or
omission was made in reliance upon and in conformity with
written information furnished by the Sub-Adviser to the
Adviser or the Fund and not timely corrected or updated by
the Sub-Adviser prior to filing.
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.
17. Indemnification.
(a) Subject to the exculpation protections in Sections 15(a)
and (b) above, 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, managers, members, partners,
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) Sub-Adviser's willful misfeasance, bad faith,
gross negligence or reckless disregard in the performance of
its obligations and duties hereunder; or (ii) Sub-Adviser's
material breach of this Agreement.
18. 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 60 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 will
retain a worldwide, irrevocable, non-exclusive license to
use such records with respect to the Managed Portion.
19. 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 GLG
Partners LP, 0 Xxxxxx Xxxxxx, Xxxxxx, X0X 0XX, Xxxxxxx,
Attention: Senior Legal Counsel, 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.
20. Confidentiality.
(a) The Adviser shall not disclose or transmit information,
documentation or other written materials with respect to the
Sub-Adviser to any third party in any form that would enable
such third parties to reverse engineer the Sub-Adviser's
trading systems or the methodology utilized by such systems.
(b) 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). The Sub-Adviser shall not 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. Nothing in this Section or Agreement
shall prevent the use or publication by the Sub-Adviser of
the Sub-Adviser's performance information with respect to the
Managed Portion.
(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.
21. 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.
22. 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 or logo of the Sub-Adviser in
such form as approved by the Sub-Adviser prior to first use,
such approval not be unreasonably withheld. The Adviser
and/or Trust shall obtain the approval of the Sub-Adviser
prior to any subsequent use of the name or logo of the Sub-
Adviser which differs materially from that previously
approved. 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. In addition, the Adviser acknowledges and
agrees that it has no rights in or to the Sub-Adviser's name
beyond the limited use rights granted herein.
23. Electronic Delivery. The Adviser and Trust hereby agree
and provide their consent to have the Sub-Adviser
electronically deliver Account Communications. "Account
Communications" means all current and future account
statements; privacy statements; audited financial
information; this Agreement (including all supplements and
amendments hereto); the Sub-Adviser's Form ADV and updates
thereto; notices and other information, documents, data and
records regarding the Fund assets. By signing this Agreement,
the Adviser and the Trust consent to electronic delivery as
described in the preceding two sentences. It is the Adviser's
affirmative obligation to notify the Sub-Adviser in writing
if the Adviser's e-mail address changes. The Adviser may
revoke or restrict its consent to electronic delivery of
Account Communications at any time by notifying the Sub-
Adviser, in writing, of the Adviser's intention to do so.
Neither the Sub-Adviser nor its affiliates will be liable for
any interception of Account Communications. The Adviser
should note that no additional charge for electronic delivery
will be assessed, but the Adviser may incur charges from its
Internet service provider or other Internet access provider.
In addition, there are risks, such as systems outages, that
are associated with electronic delivery.
24. 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.
25. 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 an SEC exemptive order permitting the Trust
to modify the Agreement without such vote).
26. 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. No
other person or entity not a party to this Agreement shall be
deemed a third-party beneficiary of this Agreement.
27. Survival. Sections 4, 12, 13, 15, 16, 17, 18, 19, 21 and
26 shall survive the termination of this Agreement.
28. 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.
29. 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.
30. 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.
31. 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.
[PAGE BREAK]
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: /s/ Xxxx X. Xxxxxxx
Name: Xxxx Xxxxxxx
Title: Managing Director
GLG Partners LP
By: GLG Partners Limited, its general partner
By: /s/ Xxxx Xxxxxx /s/ Xxxxx Xxxxxxxx
Name: Xxxx Xxxxxx Xxxxx Xxxxxxxx
Title: Authorised Signatory Authorised Signatory
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: /s/ Xxxx X. Xxxxxxx
Name: Xxxx Xxxxxxx
Title: Chief Financial Officer and Assistant Treasurer
[PAGE BREAK]
Exhibit A
to
Sub-Advisory Agreement between
BlackRock Advisors, LLC and
GLG Partners, LP
Fee (as a percentage of average daily net assets of the Managed
Portion):
[ ]%
If, at any time, (i) the Sub-Adviser provides to any other
investment company registered under the 1940 Act investment
advisory services using investment strategies identical 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 equal 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, as soon as
reasonably practicable, 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.
