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 Independence Capital Asset Partners, LLC 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 INDEPENDENCE
CAPITAL ASSET PARTNERS, LLC, a Delaware limited liability
company (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.
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 in writing 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"). Any changes to such investment objective,
policies, restrictions, or guidelines shall be
implemented by the Sub-Adviser within a commercially
reasonable time period.
(b) The Adviser will provide Sub-Adviser a list of
counterparties, brokerage firms or other financial
institutions (collectively, the "Counterparties") with
which the Managed Portion is permitted to engage in
transactions. The Adviser shall negotiate and finalize
on behalf of the Fund the terms of any account opening
documents, prime brokerage, futures and other related
agreements, any ISDA master agreement, master repurchase
agreement, master securities lending agreement or any
other master swap or over-the-counter trading
documentation, including any schedule or credit support
annex thereto, any related clearing agreements or
control agreements and any other agreement related to
the foregoing (collectively, "Trading Agreements").
With respect to each Trading Agreement, the Adviser will
either (i) provide a copy of the Trading Agreement to
the Sub-Adviser or (ii) identify certain terms and/or
provisions of the Trading Agreement in writing to Sub-
Adviser. In connection with its management of the
Managed Portion, (a) with respect to any Trading
Agreement provided to the Sub-Adviser, the Sub-Adviser
agrees to comply with the terms and conditions of such
Trading Agreements and (b) with respect to any Trading
Agreement for which the Adviser has identified certain
terms and/or provisions in writing to Sub-Adviser, the
Sub-Adviser agrees to comply with the terms and
provisions so identified in such writing. Adviser may
amend or modify a Trading Agreement or such writing from
time to time by sending written notice thereof to Sub-
Adviser, and such amendment or modification shall become
effective on the fifth calendar day following delivery
thereof. Once the Trading Agreements have been
negotiated and executed by Adviser, subject to any other
written instructions of Adviser or the Trust, the Sub-
Adviser is hereby appointed Adviser's and the Trust's
agent and attorney-in-fact for the limited purposes of
executing such additional documentation, contracts,
instructions and other documents and carrying out such
duties as may be required under the Trading Agreements
in connection with the Sub-Adviser's management of the
Managed Portion (including, where applicable, confirming
transactions, executing transaction-related
documentation and causing the Fund to perform any
payment or delivery obligations required under any
Trading Agreement or transaction, including without
limitation, collateral or margin payments), provided
that (i) the Sub-Adviser's actions in executing such
documents and performing such duties shall comply with
applicable federal laws, the regulations thereunder, the
Sub-Adviser's duties and obligations under this
Agreement and the Trust's Governing Documents (as
defined below) and (ii) the Sub-Adviser shall not
execute any documentation pursuant to the foregoing
relating to the tax status or investor status of the
Fund without verifying such status with the Adviser.
(c) The Sub-Adviser is hereby appointed the Fund's
agent and attorney-in-fact, and shall have a duty
hereunder, to exercise in its discretion all rights and
perform all duties which may be exercisable in relation
to the Managed Portion, including without limitation the
right to tender, exchange, endorse, transfer, or deliver
any securities on behalf of the Fund, to participate in
or consent to any class action, distribution, bankruptcy
proceeding, plan of reorganization, creditors committee,
merger, combination, consolidation, liquidation,
underwriting, or similar plan with reference to such
securities; and to execute and bind the Fund in waivers,
consents and covenants related thereto.
(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 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. The Adviser will provide notice of any
changes to any of the above and provide the Sub-Adviser
with a commercially reasonable time to implement any
necessary changes.
(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 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, if any, the Sub-Adviser is authorized to
consider such services provided to the Managed Portion
and other accounts over which the Sub-Adviser or any of
its affiliates exercises investment discretion and to
place orders for the purchase and sale of securities for
the Managed Portion with such brokers, if the Sub-
Adviser determines in good faith that the amount of
commissions for executing such portfolio transactions is
reasonable in relation to the value of the brokerage and
research services provided by such brokers, subject to
review by the Adviser and the Board from time to time
with respect to the extent and continuation of this
practice. It is understood that the services provided by
such brokers may be useful to the Sub-Adviser in
connection with its services to other clients. The Sub-
Adviser may, on occasions when it deems the purchase or
sale of a security to be in the best interests of the
Managed Portion as well as its other clients, aggregate,
to the extent permitted by applicable laws, rules and
regulations, the securities to be sold or purchased in
order to obtain the best net price and the most
favorable execution. In such event, allocation of the
securities so purchased or sold, as well as the expenses
incurred in the transaction, shall be made by the Sub-
Adviser in the manner it considers to be the most
equitable and consistent with its obligations to the
Managed Portion and to such other clients. The Board may
from time to time adopt policies and procedures that
modify and/or restrict the Sub-Adviser's authority
regarding the execution of the Managed Portion's
portfolio transactions provided herein.
(c) The Sub-Adviser shall not acquire on behalf of the
Managed Portion any equity securities registered under
Section 12 of the 1934 Act with the purpose or effect,
at the time of such acquisition, of changing or
influencing control of the issuer of the securities or
in connection with or as a participant in any
transaction having such purpose or effect, including any
transaction subject to Rule 13d-3(b) promulgated under
the 1934 Act. For purposes of all applicable filing
requirements under the 1934 Act, including without
limitation Sections 13(d) and (g), and other laws, the
Sub-Adviser shall be deemed to have sole investment
discretion with respect to all securities held in the
Managed Portion. If any investments made by the Sub-
Adviser on behalf of the Managed Portion are required to
be publicly 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 by the
last day of the following month, 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 all of its expenses including but not limited
to: fees and expenses incurred in connection with the
issuance, registration and transfer of its shares; brokerage,
commissions, spreads, fees and other expenses connected with
the acquisition, holding and disposition of securities and
other investments including placement and similar fees in
connection with direct placements entered into on behalf of
the Fund; all expenses of transfer, receipt, safekeeping,
servicing and accounting for the cash, securities and other
property of the Trust for the benefit of the Fund, including
all fees and expenses of its custodian, shareholder services
agent and accounting services agent; all expenses incurred in
connection with borrowings including interest charges; costs
and expenses of pricing and calculating its daily net asset
value and of maintaining its books of account required under
the 1940 Act, provided that the Sub-Adviser shall bear all
expenses of maintaining its books of account required under
the 1940 Act; salaries and expenses of officers of the Fund
who are not members of, affiliated with or interested persons
of the Adviser including without limitation the Fund's Chief
Compliance Officer if determined appropriate by the Board,
and fees and expenses of members of the Board or members of
any advisory board or committee who are not members of,
affiliated with or interested persons of the Adviser or Sub-
Adviser; insurance premiums on property or personnel of the
Fund which inure to its benefit, including liability and
fidelity bond insurance, provided that the Sub-Adviser shall
pay all expenses incurred in connection with any insurance
maintained by Sub-Adviser whether pursuant to the terms
hereof or otherwise; and, except as otherwise set forth
herein, the cost of preparing and printing reports, proxy
statements, prospectuses and statements of additional
information of the Fund or other communications for
distribution to existing shareholders. 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). To the extent the Sub-
Adviser incurs any costs by assuming expenses which are an
obligation of the Fund as set forth herein, the Fund shall
promptly reimburse the Sub-Adviser for such costs and
expenses, except to the extent the Sub-Adviser has otherwise
agreed to bear such expenses.
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 as it relates to the Sub-
Adviser or the Managed Portion.
(d) The Sub-Adviser agrees to provide and update
promptly but no less frequently than quarterly a list of
all the affiliates (as defined in the 0000 Xxx) 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) If required by applicable law, 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 reasonably 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 reasonably 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, if applicable; (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 calendar 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 unavailable
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 in writing, 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 support to the
Fund and the Adviser in preparing and presenting the
Fund's financial statements, and in doing so shall apply
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, in connection with its
management of the Fund, further notify the Adviser
promptly upon detection of (i) any error that causes any
financial impact to the Fund, (ii) any violation of law
regardless of whether there is a financial impact to the
Fund or (iii) any operational error arising out of or
resulting from a significant breakdown in the Sub-
Adviser's processes or controls that causes or could
reasonably be expected to cause financial or
reputational exposure to the Adviser or the Fund, in
each case, including but not limited to any trade
errors. In the event of any such error, violation of
law or operational error, including any trade error, the
Sub-Adviser shall provide a memorandum to the Adviser
that sufficiently describes any such error, violation of
law or operational error and the action to be taken to
prevent future occurrences of such error, violation of
law or operational 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, violations of law
or operational 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 such error, violations of law or
operational error, its analysis and correction. Subject
to Section 15, the correction of all such errors,
violations of law or operational errors impacting the
Fund must be corrected to the satisfaction of the
Adviser and the Fund, which will include reimbursement
to the Fund of costs incurred due to the error,
violation of law or operational error, if any.
(i) Each party to this Agreement agrees to cooperate
with each other party and with all appropriate
governmental authorities having the requisite
jurisdiction (including, but not limited to, the
Securities and Exchange Commission, CFTC and state
regulators) in connection with any investigation or
inquiry relating to this Agreement or the Fund.
8. Compliance.
(a) The Sub-Adviser shall notify the Adviser promptly
(and, in any event, within 24 hours) upon detection of any
breach of any of the Investment Guidelines, Adviser
Procedures, the Registration Statement and of any violation
of any applicable law or regulation, including the 1940 Act
and Subchapter M of the Internal Revenue Code, relating to
the Managed Portion. The Sub-Adviser shall also notify the
Adviser promptly upon detection of any material violations
of (1) the Sub-Adviser's own compliance policies and
procedures that relate to its management of the Managed
Portion, or (2) its activities as investment adviser. 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 material
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 as such policies reflect the
activities performed for or on behalf of the Fund by Sub-
Adviser. 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 as it relates to the Managed
Portion of the Fund and Section 204A during the previous
year and that 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 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
reasonable 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 will make
reasonable efforts that such plan 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 applicable 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, to the extent permitted by law, 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, publicly-elected board or body, involving or
in any way relevant to the affairs of the Fund; (v) Xxx
Xxxxxxx, CEO and CIO or Xxxxx Xxxxxxx, Senior Analyst and Co-
Portfolio Manager, (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
imminent change in control of the Sub-Adviser; (viii) any
imminent 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 (A) communicates to Sub-Adviser (in any manner
whatsoever) that such Counterparty will declare, might
declare, or believes it is entitled to declare, a default,
event of default, or termination event (or other similar
event or circumstance, however defined) or (B) makes any
changes to (i) the fees, rates, or other charges or (ii) the
daily or aggregate trading limits, margin requirements,
eligible collateral requirements, or other risk parameters
applicable to the Managed Portion, and in each case Sub-
Adviser shall forward to Adviser all correspondence received
from such Counterparty in connection therewith; and (xiii)
any change in the Sub-Adviser's status as a registered CTA or
member of the NFA or, if the Sub-Adviser is relying on an
exemption or exclusion from registration as a CTA, of any
event that will make it ineligible for such exemption or
exclusion. The Sub-Adviser further agrees to notify the
Adviser and the Trust promptly if any statement regarding the
Sub-Adviser contained in the Trust's Registration Statement
with respect to the Fund, or any amendment or supplement
thereto, becomes untrue or incomplete in any material
respect. For the avoidance of doubt, the Sub-Adviser is not
obligated to notify the Adviser of adjustments to floating
interest rates charged by any Counterparty, so long as such
adjustments are made in the ordinary course to account for
fluctuations in current market interest rates, or otherwise
in accordance with the Trading Agreements.
(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 this Agreement has been duly executed and delivered by
the Adviser; (iii) this Agreement is enforceable against the
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 (iv) neither the execution
or delivery of this Agreement by the Adviser nor its
performance of its obligations hereunder shall conflict with,
violate, breach or constitute a default under any term or
provision of its constituent or governing documents or any
indenture, mortgage, deed of trust, instrument, agreement or
other document to which the Adviser is a party or by which it
is bound or to which any of its assets are subject or any
applicable statute, law, rule, regulation, order or other
legal requirement applicable to the Adviser or any of its
assets.
14. Certain Records.
(a) The Sub-Adviser agrees to maintain, in the form and for
the period required by Rule 31a-2 under the 1940 Act or such
longer period as the Adviser or Fund may direct, all records
relating to the Sub-Adviser's services under this Agreement
and the Fund's investments made by the Sub-Adviser as are
required by Section 31 of the 1940 Act, and rules and
regulations thereunder, and by other applicable legal
provisions, including the Advisers Act, the 1934 Act, the
CEA, and rules and regulations thereunder, and the Fund's
compliance policies and procedures, and to preserve such
records for the periods and in the manner required by that
Section, and those rules, regulations, legal provisions and
compliance policies and procedures. In compliance with the
requirements of Rule 31a-3 under the 1940 Act, any records
required to be maintained and preserved pursuant to the
provisions of Rule 31a-1 and Rule 31a-2 promulgated under the
1940 Act that are prepared or maintained by the Sub-Adviser
on behalf of the Fund are the property of the Fund and shall
be surrendered promptly to the Fund or the Adviser on
request.
(b) The Sub-Adviser agrees that all accounts, books and other
records maintained and preserved by it as required by this
Section 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 (as such term is defined in the
0000 Xxx) 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 xx0000
00xx Xxxxxx, Xxxxx 000, Xxxxxx, XX 00000, Attention: Xxxxx
Xxxxxxx, or to such other address as the Adviser or the
Sub-Adviser may hereafter specify by written notice to the
most recent address specified by the other party, shall be
deemed to have been properly delivered or given hereunder
to the respective addressee when delivered by hand or
facsimile or five days after mailed by certified mail,
post-paid, by return receipt requested to the other party
at the principal office of such party.
19. Confidentiality.
(a) The Sub-Adviser shall treat all records and other
information relative to the Trust, the Fund and the Adviser
and their prior, present or potential shareholders and
clients, including the list of portfolio securities,
instruments, assets and liabilities of the Fund, and any
Trading Agreements, or excerpts thereof, which it shall
receive or have access to in the performance of its duties
confidentially and as proprietary information of the Trust
and the Adviser. The Sub-Adviser shall not disclose such
records or information to any third party or use such records
or information for any purpose other than performance of its
responsibilities and duties hereunder (except after prior
notification to and approval in writing by the Trust and the
Adviser). The Sub-Adviser shall not use its knowledge of non-
public information regarding the Fund's portfolio as a basis
to place or recommend any securities or other transactions
for its own benefit or the benefit of others or to the
detriment of the Fund.
(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. The Sub-
Advisor will receive notice regarding such 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 (excluding disclosures required by
law or regulation), the Sub-Adviser agrees to obtain prior
written approval from the Adviser that shall not be
unreasonably withheld 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, which shall not be unreasonably withheld. 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, 5, 12, 13, 14, 15, 16, 17(d), 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]
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
Independence Capital Asset Partners, LLC
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Chief Operations Officer &
Chief Compliance Officer
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
Independence Capital Asset Partners, LLC
Fee (as a percentage of average daily net assets of the Managed
Portion):
[ ] %
If, at any time after the date of this Agreement, (i) the Sub-
Adviser or any of its affiliates enters into an investment
advisory or sub-advisory agreement pursuant to which Sub-Adviser
or its affiliates provides to any other investment company
registered under the 1940 Act investment advisory services using
investment strategies comparable to those provided by the Sub-
Adviser to the Fund pursuant to this Agreement, (ii) the value
of the assets under management with respect to which the Sub-
Adviser provides such services to such other investment company
is comparable to or less than the value of the Managed Portion,
and (iii) the Sub-Adviser is compensated for providing such
services at a rate less than the rate set forth on this Exhibit
A, then the Sub-Adviser shall promptly notify the Adviser of the
foregoing in reasonable detail and, as of the date of such
notice, the rate set forth on this Exhibit A shall immediately
and without requirement of further action be deemed amended to
reflect a rate equal to the lower rate at which the Sub-Adviser
is compensated by such other investment company.
