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 Sub-Advisory Agreement between BlackRock
Advisors, LLC and QMS Capital Management LP with respect to the
Fund
[PAGE BREAK]
SUB-ADVISORY AGREEMENT
THIS SUB-ADVISORY AGREEMENT (the "Agreement") is made as of
July 23, 2014 by and between BLACKROCK ADVISORS, LLC, a Delaware
limited liability company (the "Adviser"), and QMS Capital
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
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 applicable to the Sub-Adviser and, as
an agent for the Fund, to cause the Fund to comply with
the terms and conditions of such Trading Agreements
applicable to the transactions executed by the Sub-
Adviser 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
applicable to the Sub-Adviser so identified in such
writing and, as an agent for the Fund, to cause the Fund
to comply with such terms and provisions applicable to
transactions executed by the Sub-Adviser. 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.
(d) The Adviser is responsible for acting upon, or
refraining 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 Trust's policies on proxy
voting. The Sub-Adviser will provide, when reasonably
requested by the Adviser, information it has on a
particular issuer held in the Managed Portion to assist
the Adviser in the voting of a proxy.
(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) (a) the asset diversification tests under
Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Internal Revenue Code") (such tests
applicable with respect to the Managed Portion only)
and, (b) the requirement not to cause the Managed
Portion to recognize non-qualifying income, as defined
by Subchapter M of the Internal Revenue Code, as a
result of assets acquired or traded by Sub-Adviser
(collectively, (a) and (b), the "Subchapter M
Requirements"); (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;
(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 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.
(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, 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 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 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 and
other financial instruments 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
and other financial instruments 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 and other financial instruments 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 fair and 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 (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 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
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, 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, Sub-Adviser
will reimburse 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 the Subchapter M Requirements, 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.
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 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;
(v) Xxxxxxx Xxxxxx, Managing Principal (CIO) or Xxxx Xxxxx,
Managing Principal (Head of BD) 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 Sub-Adviser; (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 that
becomes untrue in any material respect; (x) any change in the
Sub-Adviser's financial condition which could impact 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 best efforts to monitor the
occurrence of any such event or circumstance; (xii) any
Counterparty communicates to Sub-Adviser (in any manner
whatsoever) (A) 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) 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. The Trust, on behalf of
the Fund, and the Adviser both specifically acknowledge that
the Sub-Adviser has not made and does not make any guarantee
of profits or of protections against loss. The Adviser
represents that the Fund is a "Qualified Eligible Person," as
that term is defined in Rule 4.7 of the CEA. The Adviser and
the Fund consent to the Sub-Adviser's treating the Fund as an
exempt account for purposes of the CEA and the rules and
regulations promulgated thereunder.
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, the Fund's auditors, the Fund or any
representative of the Fund (including, without limitation,
the Fund's Chief Compliance Officer), the Adviser, or any
governmental agency or other instrumentality having
regulatory authority over the Adviser or the Fund.
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, 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, 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, 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 000
Xxxxx Xxxx Xx., Xxxxx 000, Xxxxxx, XX 00000, Attention:
General 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.
19. Confidentiality.
(a) Subject to the provisions of paragraph (c) of this
Section 19, the following shall be treated as confidential
("Confidential Information"): (i) any information or
recommendations supplied by the Sub-Adviser in connection
with the performance of its obligations and duties hereunder,
including without limitation portfolio holdings, financial
information or other information relating to the Sub-Adviser;
and (ii) any records and other information relative to the
Trust, the Fund(s) and the Adviser which the Sub-Adviser
receives or has access to in connection with the performance
of its obligations and duties hereunder, including without
limitation, prior, present or potential shareholders and
clients, the list of Fund portfolio securities, instruments,
assets and liabilities of the Fund and any Trading
Agreements, or excerpts thereof. Except as may be required
by applicable law or rule or as requested by regulatory
authorities, Confidential Information may be disclosed to or
used only as necessary to carry out the purposes of this
Agreement (including, without limitation, the disclosure of
Confidential Information to, or the use of the same by, the
Fund's custodian and fund accountant agent and other service
providers supporting the operation of the Fund, the Fund's
auditors, legal advisors to any party, and such other persons
as the Fund and the Adviser may designate in connection with
the operation and management of the Fund). 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 to the detriment of the
Fund, provided, however, that this sentence shall not
prohibit or limit the Sub-Adviser from managing accounts for
other clients using the same or a substantially similar
investment strategy as that employed for the Fund, subject to
the Sub-Adviser's fiduciary obligations to 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.
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.
[PAGE BREAK]
PURSUANT TO AN EXEMPTION FROM THE COMMODITY FUTURES TRADING
COMMISSION IN CONNECTION WITH ACCOUNTS OF QUALIFIED ELIGIBLE
PERSONS, THIS AGREEMENT IS NOT REQUIRED TO BE, AND HAS NOT BEEN,
FILED WITH THE COMMISSION. THE COMMODITY FUTURES TRADING
COMMISSION DOES NOT PASS UPON THE MERITS OF PARTICIPATING IN A
TRADING PROGRAM OR UPON THE ADEQUACY OR ACCURACY OF COMMODITY
TRADING ADVISOR DISCLOSURE. CONSEQUENTLY, THE COMMODITY FUTURES
TRADING COMMISSION HAS NOT REVIEWED OR APPROVED THE TRADING
ADVISOR'S TRADING PROGRAM OR THIS AGREEMENT.
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 Xxxxxxxxx
Name: Xxxx Xxxxxxxxx
Title: Managing Director
QMS Capital Management LP
By: QMS Capital Advisors LLC, its general partner
By: Xxxxxxx Xxxxxxxx
Name: Xxxxxxx Xxxxxxxx
Title: General Counsel
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
QMS Capital 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 substantially the
same investment strategies as 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 or any of its affiliates agrees to a "most
favored nations" clause with such other investment company
registered under the 1940 Act, then the Sub-Adviser shall
promptly notify the Adviser of the foregoing in reasonable
detail and shall, if requested by the Adviser, agree to a most
favored nations clause with the Fund that is substantially
similar to the most favored nations clause that the Sub-Adviser
agreed to with the other investment company registered under the
1940 Act.
