Exhibit 77Q1(e)
BlackRock Funds (the "Registrant"): BlackRock Multi-Manager
Alternative Strategies Fund (the "Fund")
77Q1(e):
Copies of any new or amended Registrant investment advisory
Contracts
Attached please find as an exhibit to Sub-Item 77Q1(e) of Form
N-SAR, a copy of the Form of Sub-Advisory Agreement between
BlackRock Advisors, LLC and Pine River Capital Management L.P.
with respect to the Fund
SUB-ADVISORY AGREEMENT
THIS SUB-ADVISORY AGREEMENT (the "Agreement") is made as of
November 30, 2015 by and between BLACKROCK ADVISORS, LLC, a
Delaware limited liability company (the "Adviser"), and PINE
RIVER CAPITAL MANAGEMENT L.P., a limited partnership organized
under the laws of the State of Delaware (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 EST 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"), provided that
no material changes to the Sub-Adviser's investment strategy
employed for the Managed Portion with respect to principal
asset class and market capitalization of securities in which
the strategy invests may be imposed without the Sub-Adviser's
consent, 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 Sub-Adviser shall have the authority and power-of-
attorney to select and enter into agreements with
Counterparties for the execution of the Managed Portion's
portfolio 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. This power-of-
attorney is a continuing power-of-attorney and shall remain
in full force and effect until the earlier of it being
revoked by the Adviser or the Fund in writing or this
Agreement terminating, but any such revocation shall not
affect any transaction initiated prior to receipt by the Sub-
Adviser of such notice.
(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) 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, provided that no
material changes to the Sub-Adviser's investment strategy
employed for the Managed Portion with respect to principal
asset class and market capitalization of securities in which
the strategy invests may be imposed without the Sub-Adviser's
consent ("Board/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 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 via e-mail
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, supervised persons 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, supervised persons 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 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 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 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
via e-mail 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 Section 13(d), (f) and (g). If any
investments made by the Sub-Adviser on behalf of the Managed
Portion are required to be disclosed in any other reports to
be filed by the Sub-Adviser with any governmental or self-
regulatory agency or organization or exchange, the Sub-
Adviser shall provide the Adviser with prompt written notice
thereof, setting forth in reasonable detail the nature of the
report and the investments of the Managed Portion to be
reported.
(d) The Fund may establish one or more wholly-owned
subsidiaries of the Fund through which it may conduct a
significant portion of its commodities investing activities
or for other investment purposes.
4. Compensation of the Sub-Adviser.
(a) For the services provided and the expenses assumed by the
Sub-Adviser pursuant to this Agreement, Adviser, not the
Fund, shall pay to the Sub-Adviser a fee, computed daily and
payable monthly, in arrears, at an annual rate of the average
daily net assets of the Managed Portion that the Sub-Adviser
manages (computed in the manner specified in the Investment
Advisory Agreement), in accordance with the schedule attached
hereto as Exhibit A.
(b) If this Agreement becomes effective or terminates before
the end of any month, the fee for the period from the
effective date to the end of the month or from the beginning
of such month to the date of termination, as the case may be,
shall be pro-rated according to the proportion that such
period bears to the full month in which such effectiveness or
termination occurs.
5. Expenses. The Sub-Adviser agrees, at its own expense, to
render the services set forth herein and to provide the
office space, furnishings, equipment and personnel required
by it to perform such services on the terms and for the
compensation provided in this Agreement. The Fund shall be
responsible for payment of brokerage commissions, transfer
fees, registration costs, transaction-related taxes and other
similar costs and transaction-related expenses and fees
arising out of transactions effected on behalf of the Fund
(including the cost of legal professionals engaged to advise
on any portfolio position in the Managed Portion; provided
that (i) Adviser has given prior written consent for the
engagement of such professionals, (ii) the Fund will pay no
more than its pro rata share of such costs (as determined
amongst all funds and accounts holding such securities at the
time the expenses are incurred that are managed by Sub-
Adviser or any affiliates), 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 reasonable costs
associated with all or the portion, as the case may be, of
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's investment strategy or the Sub-Adviser and
other documents containing factual information about the Sub-
Adviser or its investment strategy 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 containing factual information about the Sub-
Adviser or its investment 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 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 written explanation of the reason why it is not
required to deliver a disclosure document as an exempt
commodity trading advisor under CFTC Regulation 4.7(c) or
similar CFTC rule or regulation.
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 Board/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 or
supervised persons 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 or supervised persons 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 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 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 the error 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 breach of any of the Investment Guidelines,
Board/Adviser Procedures, the Registration Statement and of
any material violation of any applicable law or regulation,
which includes a violation of 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, the Sub-Adviser will notify the Adviser
if it receives a Xxxxx Notice (or the functional equivalent)
or an enforcement action from a regulatory or governmental
body or agency in respect of a material violation of the
securities laws or regulations.
(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 (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, supervised persons, officers, and agents ("Fund
Compliance Procedures"). The Sub-Adviser has and shall
provide 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 commercially reasonable efforts to promptly comply
with such request, including without limitation furnishing
the Managed Portion, 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 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 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, employee or supervised person
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 with respect to the Managed Portion require it to
be so registered or licensed; (ii) it is registered with the
CFTC as a "commodity trading advisor" and is a member of the
National Futures Association ("NFA"); (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) 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 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 action, suit, proceeding, or
investigation, at law or in equity, before or by any court,
public board or body, regarding the affairs of the Managed
Portion; (iv) Xxxxx Xxxxx, Xxxxx Xxxxxxxxx and Xxxx Xxxxxxxxx
of the Sub-Adviser (the "Key Personnel") are no longer
involved in the 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, any adverse
change in the position, function, regulatory or licensing
status of any such Key Person) which may adversely affect the
Managed Portion; (vi) any proposed change in control (as
defined in Section 2(a)(9) of the 0000 Xxx) of the Sub-
Adviser; (vii) any proposed assignment of this Agreement;
(viii) 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 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; (ix) 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; (x) Sub-Adviser becomes aware of any
event or circumstance that constitutes (or will be reasonably
likely to constitute with the passage of time) an event of
default, or termination event under any Trading Agreement for
the Managed Portion; and Sub-Adviser hereby agrees to use its
commercially reasonable efforts to monitor the occurrence of
any such event or circumstance; (xi) any Counterparty (A)
communicates to the 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 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 (xii) 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 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
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 (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, 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.
The Adviser represents and warrants that the Fund is a
"qualified eligible person" ("QEP") as defined in CFTC
Regulation 4.7, consents on behalf of the Fund to the Fund
being treated as an "exempt account" under CFTC Regulation
4.7 and agrees to promptly notify the Sub-Adviser if the Fund
ceases to be a QEP. The Adviser further represents and
warrants that it (i) is registered with the CFTC, as a
commodity pool operator ("CPO") with respect to the Fund, as
required under the CEA's and the CFTC's regulations, or is
exempt from such registration, and is a member of the NFA if
required to be a member thereof; and (ii) shall comply with
such other requirements of the CEA and CFTC regulations that
apply to Adviser as a CPO with respect to the Fund, or any
applicable CPO exemption with respect to the Fund;
(b) 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;; and (iii) 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. 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 subject to the express
provisions regarding confidentiality and the use of the
Managed Portion's track record contained herein, 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.
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 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.
(c) 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. The exculpation in this Section shall
survive the termination of this Agreement.
16. 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,
supervised persons, 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, supervised persons, 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.
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, provided, however, that subject to the express
provisions regarding confidentiality and the use of the
Managed Portion's track record contained herein, 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.
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 Pine River Capital
Management L.P., 000 Xxxxxxx Xxxxxxx, Xxxxxxxxxx, XX 00000,
Attention General Counsel, E-mail xxxxx@xxxx.xxx 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.
(b) Notwithstanding anything else to the contrary herein, the
Sub-Adviser shall retain a right to use the investment
performance and track record of the Managed Portion
(including in marketing materials) without restriction as to
confidentiality, provided that the name of the Fund or the
Trust is not specifically identified without the prior
written approval of the Adviser.
(c) 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.
(d) 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
confidential information provided by the other party; 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 directly
related to the Fund or the Managed Portion, 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 an SEC exemptive order permitting the Trust
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. No
other person or entity not a party to this Agreement shall be
deemed a third-party beneficiary of this Agreement.
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.
***Signature Page Follows***
[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 ANY
TRADING PROGRAM OR UPON THE ADEQUACY OR ACCURACY OF COMMODITY
TRADING ADVISOR DISCLOSURE. CONSEQUENTLY, THE COMMODITY FUTURES
TRADING COMMISSION HAS NOT REVIEWED OR APPROVED ANY TRADING
PROGRAM OF THE ADVISOR 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:
Name:
Xxxx Xxxxxxx
Title:
Managing Director
Pine River Capital Management L.P.
By:
Name:
Title:
ACKNOWLEDGEMENT:
The undersigned officer of the
Trust hereby executes this
Agreement on behalf of the Fund
as of the date first written
above. The Trust does not hereby
undertake, on behalf of the Fund
or otherwise, any obligation to
the Sub-Adviser.
BlackRock Funds,
on behalf of its series
BlackRock Multi-Manager Alternative Strategies Fund
By:
Name:
Xxxx Xxxxxxx
Title:
Chief Financial Officer and Assistant Treasurer
[PAGE BREAK]
Exhibit A
to
Sub-Advisory Agreement between
BlackRock Advisors, LLC and
Pine River Capital Management L.P.
Fee (as a percentage of average daily net assets of the Managed
Portion):
