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 PEAK6 Advisors LLC with respect to the Fund
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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 PEAK6 ADVISORS
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; 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.
The Sub-Adviser accepts that appointment and agrees to
render for the Managed Portion the services herein set
forth, for the compensation herein provided.
2. Duties as Sub-Adviser.
(a) Pursuant to this Agreement and subject to the
supervision and direction of the Trust's Board of
Trustees (the "Board") and direction and oversight of
the Adviser, the Sub-Adviser shall, with respect to the
Managed Portion, provide the Fund with investment
research, advice and supervision and furnish a
continuous investment program for and manage the
investment and reinvestment of the Managed Portion. In
this regard, the Sub-Adviser shall, with respect to the
Managed Portion, determine in its discretion the
securities, cash and other financial instruments to be
purchased, retained or sold for the Managed Portion
within the parameters of the investment objective,
policies, restrictions and guidelines applicable to the
Managed Portion as provided by the Adviser to the Sub-
Adviser, as amended in writing from time to time by the
Adviser (the "Investment Guidelines"), the provisions of
this Agreement, all applicable laws, rules and
regulations and the Fund's registration statement on
Form N-1A under the 1940 Act as amended from time to
time, or any successor form thereto (the "Registration
Statement").
(b) The Adviser will provide Sub-Adviser a list of
counterparties, brokerage firms or other financial
institutions (collectively, the "Counterparties") with
which the Managed Portion is permitted to engage in
transactions. The Adviser shall negotiate and finalize
on behalf of the Fund the terms of any account opening
documents, prime brokerage, futures and other related
agreements, any ISDA master agreement, master repurchase
agreement, master securities lending agreement or any
other master swap or over-the-counter trading
documentation, including any schedule or credit support
annex thereto, any related clearing agreements or
control agreements and any other agreement related to
the foregoing (collectively, "Trading Agreements").
With respect to each Trading Agreement, the Adviser will
either (i) provide a copy of the Trading Agreement to
the Sub-Adviser or (ii) identify certain terms and/or
provisions of the Trading Agreement in writing to Sub-
Adviser. In connection with its management of the
Managed Portion, (a) with respect to any Trading
Agreement provided to the Sub-Adviser, the Sub-Adviser
agrees to comply in all material respects with the terms
and conditions of such Trading Agreements applicable to
the Sub-Adviser and, as an agent for the Fund, to cause
the Fund to comply in all material respects with the
terms and conditions of such Trading Agreements
applicable to the transactions executed by the Sub-
Adviser and (b) with respect to any Trading Agreement
for which the Adviser has identified certain terms
and/or provisions in writing to Sub-Adviser, the Sub-
Adviser agrees to comply in all material respects with
the terms and provisions applicable to the Sub-Adviser
so identified in such writing and, as an agent for the
Fund, to cause the Fund to comply in all material
respects with such terms and provisions applicable to
transactions executed by the Sub-Adviser. Adviser may
amend or modify a Trading Agreement or such writing from
time to time by sending written notice thereof to Sub-
Adviser, and such amendment or modification shall become
effective on the fifth calendar day following delivery
thereof. Once the Trading Agreements have been
negotiated and executed by Adviser, subject to any other
written instructions of Adviser or the Trust, the Sub-
Adviser is hereby appointed Adviser's and the Trust's
agent and attorney-in-fact for the limited purposes of
executing such additional documentation, contracts,
instructions and other documents and carrying out such
duties as may be required under the Trading Agreements
in connection with the Sub-Adviser's management of the
Managed Portion (including, where applicable, confirming
transactions, executing transaction-related
documentation and causing the Fund to perform any
payment or delivery obligations required under any
Trading Agreement or transaction, including without
limitation, collateral or margin payments), provided
that (i) the Sub-Adviser's actions in executing such
documents and performing such duties shall comply with
applicable federal laws, the regulations thereunder, the
Sub-Adviser's duties and obligations under this
Agreement and the Trust's Governing Documents (as
defined below) and (ii) the Sub-Adviser shall not
execute any documentation pursuant to the foregoing
relating to the tax status or investor status of the
Fund without verifying such status with the Adviser.
(c) The Sub-Adviser is hereby appointed the Fund's
agent and attorney-in-fact, and shall have a duty
hereunder, to exercise in its discretion all rights and
perform all duties which may be exercisable in relation
to the Managed Portion, including without limitation the
right to tender, exchange, endorse, transfer, or deliver
any securities on behalf of the Fund, to participate in
or consent to any 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: (i), 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 and (ii) any class action with reference to such
securities. 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 asset diversification tests under Subchapter M
of the Internal Revenue Code of 1986, as amended (the
"Internal Revenue Code"), as set forth by the Adviser in
the Investment Guidelines, and will not cause, with
respect to the Managed Portion only, the portfolio to
recognize non-qualifying income, as defined by
Subchapter M of the Internal Revenue Code, as a result
of assets acquired or traded by Sub-Adviser; (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 applicable to Sub-Adviser or the Managed
Portion, including without limitation, the rules of any
self-regulatory organization; (v) as provided by the
Adviser, any 1940 Act exemptive order applicable to the
Fund and the Managed Portion; (vi) as provided by the
Adviser, the Trust's Declaration of Trust and By-Laws,
as each may be amended from time to time (the "Governing
Documents"); (vii) as provided by the Adviser, and, as
amended from time to time, 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, and, as amended from time
to time ("Adviser Procedures"). The Sub-Adviser shall
maintain compliance procedures and operational processes
for the Fund to reasonably ensure the Fund's compliance
with the foregoing and that the Sub-Adviser reasonably
believes are adequate to ensure its compliance with
applicable law. No supervisory activity undertaken by
the Adviser shall limit the Sub-Adviser's full
responsibility for any of the foregoing.
(f) The Sub-Adviser agrees that it will not consult with
any other known 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 known 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 1940 Act) 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) When placing such orders with a Counterparty or
Counterparties, the Sub-Adviser is directed at all times
to use reasonable efforts to obtain for the Managed
Portion the most favorable execution considering a
variety of circumstances in accordance with the
Adviser's and Sub-Adviser's policies. 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 Counterparties who may
execute brokerage transactions at a higher cost to the
Managed Portion than may result when allocating
brokerage to other brokers solely on the basis of
seeking the most favorable price. 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 provided in writing to the Sub-Adviser,
if any, the Sub-Adviser is authorized to consider such
brokerage and research 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
Counterparties, 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 Counterparties, 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
Counterparties 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
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 and shall provide any such
changes to Sub-Adviser in writing.
(c) The Sub-Adviser shall not acquire on behalf of the
Managed Portion any equity securities registered under
Section 12 of the 1934 Act with the purpose or effect,
at the time of such acquisition, of changing or
influencing control of the issuer of the securities or
in connection with or as a participant in any
transaction having such purpose or effect, including any
transaction subject to Rule 13d-3(b) promulgated under
the 1934 Act. For purposes of all applicable filing
requirements under the 1934 Act, including without
limitation Sections 13(d) and (g), and other laws, the
Sub-Adviser shall be deemed to have sole investment
discretion with respect to all securities held in the
Managed Portion. If any investments made by the Sub-
Adviser on behalf of the Managed Portion are required to
be disclosed in any other reports to be filed by the
Sub-Adviser with any governmental or self-regulatory
agency or organization or exchange, the Sub-Adviser
shall provide the Adviser with prompt written notice
thereof, setting forth in reasonable detail the nature
of the report and the investments of the Managed Portion
to be reported.
(d) The Fund may establish one or more wholly-owned
subsidiaries of the Fund through which it may conduct a
significant portion of its commodities investing
activities or for other investment purposes.
4. Compensation of the Sub-Adviser.
(a) For the services provided and the expenses assumed by
the Sub-Adviser pursuant to this Agreement, Adviser, not
the Fund, shall pay to the Sub-Adviser a fee, computed
daily and payable monthly, in arrears, at an annual rate of
the average daily net assets of the Managed Portion that
the Sub-Adviser manages (computed in the manner specified
in the Investment Advisory Agreement), in accordance with
the schedule attached hereto as Exhibit A.
(b) If this Agreement becomes effective or terminates
before the end of any month, the fee for the period from
the effective date to the end of the month or from the
beginning of such month to the date of termination, as the
case may be, shall be pro-rated according to the proportion
that such period bears to the full month in which such
effectiveness or termination occurs.
5. Expenses. The Sub-Adviser agrees, at its own expense, to
render the services set forth herein and to provide the
office space, furnishings, other office 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, but not limited to, interest
payable on Fund borrowings, which shall be deducted from the
Managed Portion. Subject to the foregoing, the Sub-Adviser
will pay all expenses incurred by it in connection with its
activities under this Agreement, including without
limitation, all costs associated with attending or otherwise
participating in regular or special meetings of the Board or
shareholders, or with the Adviser, as reasonably requested,
and additions or modifications to the Sub-Adviser's
operations necessary to perform its services hereunder in
compliance with this Agreement, the Investment Guidelines,
any other Board/Adviser Procedures and applicable law. The
Sub-Adviser shall be responsible for its proportionate share
(taking into account other Sub-Adviser and/or Adviser changes
also set forth therein) of the reasonable out-of-pocket costs
associated with any information statements and/or other
disclosure materials that are for the primary benefit of the
Sub-Adviser (including, but not limited to, the legal fees
associated with preparation, printing, filing and mailing
thereof, as well as any shareholder meeting and/or
solicitation costs, if applicable).
6. Delivery of Information, Reports and Certain
Notifications.
(a) The Adviser agrees to promptly 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 Managed Portion of the Fund.
(b) The Sub-Adviser shall report regularly on a timely
basis to the Adviser and to the Board, and, upon the
Advisor's request shall, make appropriate persons,
including portfolio managers, available for the purpose
of reviewing with representatives of the Adviser and the
Board the management of the Managed Portion, the
performance of the Managed Portion in relation to
standard industry indices (such indices to be selected
by the Adviser) and the Fund's own performance
benchmark, and general conditions affecting the
marketplace. The Sub-Adviser agrees to render to the
Adviser such other reasonable periodic and special
reports on a reasonable and 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 reasonable information and
assurances (including certifications and sub-
certifications) and with such reasonable 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 reasonable request from the
Adviser, 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, and provide comments on such drafts on a timely
basis.
(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. Conversely, the Adviser agrees to
provide and update promptly but no less frequently than
quarterly a list of affiliates of the Adviser.
(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.
7. Cooperation with the Fund, the Adviser and Other Service
Providers.
(a) The Sub-Adviser agrees to reasonably 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 (i) 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; (ii)
provide prompt responses to reasonable requests made by
such persons; and (iii) establish and maintain
appropriate and reasonable 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, including information related to any corporate
action relevant to the investments of the Managed
Portion. 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
reasonable form and at such reasonable 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.
(d) The Sub-Adviser shall furnish the Fund's custodian
and administrator with daily information as to executed
trades. The Sub-Adviser will use its best efforts to
provide the Custodian and administrator such information
by the close of business each day, but no later than
11:00 a.m. Central time the following business day. To
the extent applicable, the Sub-Adviser shall affirm and
confirm all trades with each executing broker and
Counterparty daily for non-listed or non-exchange traded
securities to ensure accurate trade settlement and
verify open positions (including cash). The Fund or its
designee may 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 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 reasonable assistance from the Sub-
Adviser or identifies for review by the Sub-Adviser.
This assistance includes (but is not limited to): (i)
designating and providing access to one or more
employees of the Sub-Adviser who are knowledgeable about
the security or other asset or liability, its issuer or
counterparty (as applicable), its financial condition,
trading and/or other relevant factors for valuation,
which employees shall be available for consultation when
the Board or a designated committee thereof convenes;
(ii) assisting the Board, Adviser, the custodian or the
administrator in obtaining bids and offers or quotes
from broker-dealers or market-makers with respect to
investments held in the Managed Portion, upon the
reasonable request of the Adviser, custodian or
administrator; (iii) upon the reasonable 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
reasonably 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 reasonable 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 provide
reasonable assistance to obtain valuations for
derivative instruments from Counterparties.
(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
reasonable 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 reasonable and
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 reasonably assist
the Fund and the Adviser in complying with the
provisions of the Xxxxxxxx-Xxxxx Act of 2002 and, upon
request, no more than quarterly, 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 reasonable
support to the Fund and the Adviser in preparing and
presenting the Fund's financial statements.
(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, at
the reasonable written request of the Adviser which has
been made within a reasonable period of time from such
notification by Sub-Adviser, 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
reasonably 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
reasonable 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. The correction of all such
errors, violations of law or operational errors
impacting the Fund must be corrected to the reasonable
satisfaction of the Adviser and the Fund, which will
include, subject to the limitation contained in Section
15(a), 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 reasonably
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
(including the 1940 Act and Subchapter M of the Internal
Revenue Code), Adviser Procedures, the Registration
Statement and of any known violation of any applicable law
or regulation, relating 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 could be considered material to the Managed
Portion.
(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 that are material to the Managed
Portion; 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
certain 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 in summary form of: (1) any material
changes to its compliance policies and procedures
pertaining to the Sub-Adviser's services to the Fund; (2)
any new material 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
material 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 Fund, the Adviser, or
the Fund's Chief Compliance Officer may make any reasonable
request for the provision of reasonable information or for
other reasonable cooperation from the Sub-Adviser with
respect to the Sub-Adviser's duties under this Agreement,
and the Sub-Adviser shall use its reasonable 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 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 the Sub-Adviser
shall certify to the Fund that (i) the Sub-Adviser has
complied with the requirements of Rule 17j-1 and Section
204A during the previous year and that there has been no
material violation of the Sub-Adviser's code of ethics
associated with the Managed Portion 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 reasonable notice
and reasonable 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 records relevant to the Sub-Adviser under Rule
17j-1(d)(1) in connection with the Managed Portion provided
that this shall not require the Sub-Adviser to provide
holding reports or transaction reports of any person filing
such reports under the code of ethics of the Sub-Adviser
(or similar documents detailing personal trades) unless
related to a material violation of the code of ethics.
(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
related to the Managed Portion at minimum operating levels
and can be implemented within 12 hours. 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 that materially affect the Managed
Portion under such plan.
9. Insurance. The Sub-Adviser shall be covered by 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 $3 million or the Sub-Adviser's fidelity insurance
coverage be less than $3 million. The Sub-Adviser shall
provide prior written notice to the Adviser (i) of any
material changes in its insurance policies or insurance
coverage; or (ii) if any material claims will be made on its
insurance policies. Furthermore, it shall upon request
provide to the Adviser any information it may reasonably
require concerning the amount of or scope of such insurance.
10. Status of the Sub-Adviser. The Sub-Adviser shall, for all
purposes herein provided, be deemed to be an independent
contractor and, except as expressly provided or authorized
herein, shall have no authority to act for or represent the
Fund in any way or otherwise be deemed an agent of the
Adviser or the Fund.
11. Services Not Exclusive. Nothing in this Agreement shall
limit or restrict the right of the Sub-Adviser or any
director, officer, affiliate or employee of the Sub-Adviser
to engage in any other business or to devote his or her time
and attention in part to the management or other aspects of
any other business, whether of a similar nature or a
dissimilar nature. The Adviser and Fund recognize that the
Sub-Adviser and its affiliates have investments of their own
and are acting as investment managers for others. The Sub-
Adviser may on occasion give advice or take action with
respect to other investment entities that it manages that
differs from or is the same as the advice given with respect
to the Fund so long as such advice or action is consistent
with its fiduciary duty to the Fund.
12. Representations and Warranties of the Sub-Adviser.
(a) The Sub-Adviser represents and warrants to the Adviser
that: (i) it is registered as an investment adviser under the
Advisers Act and is registered or licensed as an investment
adviser under the laws of all jurisdictions in which its
activities require it to be so registered or licensed; (ii)
it has reviewed the registration requirements of the CEA and
the National Futures Association ("NFA") relating to
commodity trading advisors and is either appropriately
registered with the CFTC and a member of the NFA or exempt or
excluded from CFTC registration requirements; (iii) it will
maintain each such registration, license or membership in
effect at all times during the term of this Agreement and
will obtain and maintain such additional governmental, self-
regulatory, exchange or other licenses, approvals and/or
memberships and file and maintain effective such other
registrations as may be required to enable the Sub-Adviser to
perform its obligations under this Agreement; (iv) it is duly
organized and validly existing, and is authorized to enter
into this Agreement and to perform its obligations hereunder
and this Agreement has been duly executed and delivered by
the Sub-Adviser; (v) this Agreement is enforceable against
the Sub-Adviser in accordance with its terms, subject as to
enforcement to bankruptcy, insolvency, reorganization,
arrangement, moratorium and other similar laws of general
applicability relating to or affecting creditors' rights and
to general equity principles; and (vi) neither the execution
or delivery of this Agreement by the Sub-Adviser nor its
performance of its obligations hereunder shall conflict with,
violate, breach or constitute a default under any term or
provision of its constituent or governing documents or any
indenture, mortgage, deed of trust, instrument, agreement or
other document to which the Sub-Adviser is a party or by
which it is bound or to which any of its assets are subject
or any applicable statute, law, rule, regulation, order or
other legal requirement applicable to the Sub-Adviser or any
of its assets.
(b) The Sub-Adviser shall promptly notify the Adviser and the
Trust in writing of the occurrence of any of the following
events: (i) any material breach of this Agreement by it; (ii)
any of the representations and warranties of the Sub-Adviser
contained herein becomes untrue in a material respect 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 will become
subject to any statutory disqualification pursuant to Section
9(b) of the 1940 Act or otherwise that prevents the Sub-
Adviser from serving as an investment adviser or performing
its duties pursuant to this Agreement; (iv) the Sub-Adviser
shall have been served or otherwise becomes aware of any
action, suit, proceeding, inquiry or investigation applicable
to it, at law or in equity, before or by any court, public
board or body, involving or in any way relevant to the
affairs of the Fund; (v) in the event that the Sub-Adviser's
portfolio manager for the Managed Portion (the "Key
Personnel") or Xxx Xxxxx is no longer active, or is proposed
to no longer be active, in the day-to-day management of
and/or trading decisions for the Managed Portion or, in the
case of Xxx Xxxxx, the day-to-day management of Sub-Adviser;
(vi) any change in any regulatory or licensing status or
other circumstances of the Key Personnel or Xxx Xxxxx that
would reasonably be expected to adversely affect the Managed
Portion; (vii) any proposed change in control of the Sub-
Adviser; (viii) any proposed assignment of this Agreement;
(ix) the Sub-Adviser becomes aware of any material fact
respecting or relating to the Sub-Adviser or the investment
strategies of the Managed Portion that is not contained in
the Registration Statement, as amended and supplemented from
time to time, regarding the Fund, or any amendment or
supplement thereto, but that is required to be disclosed
therein, and of any statement respecting or relating to the
Sub-Adviser, the Sub-Adviser's investment strategies or the
Managed Portion contained therein that becomes untrue in any
material respect; (x) any change in the Sub-Adviser's
financial condition which would 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 under
the minimum amount required under Section 9; (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
commercially reasonable efforts to monitor the occurrence of
any such event or circumstance; (xii) any Counterparty (A)
communicates to Sub-Adviser (in any manner whatsoever) that
such Counterparty will declare, might declare, or believes it
is entitled to declare, a default, event of default, or
termination event (or other similar event or circumstance,
however defined) or (B) makes any changes to (i) the fees,
rates, or other charges or (ii) the daily or aggregate
trading limits, margin requirements, eligible collateral
requirements, or other risk parameters applicable to the
Managed Portion, and in each case Sub-Adviser shall forward
to Adviser all correspondence received from such Counterparty
in connection therewith; and (xiii) any change in the Sub-
Adviser's status as a registered CTA or member of the NFA or,
if the Sub-Adviser is relying on an exemption or exclusion
from registration as a CTA, of any event that will make it
ineligible for such exemption or exclusion. The Sub-Adviser
further agrees to notify the Adviser and the Trust promptly
if any statement regarding the Sub-Adviser contained in the
Trust's Registration Statement with respect to the Fund, or
any amendment or supplement thereto, becomes untrue or
incomplete in any material respect.
(c) The Sub-Adviser represents and warrants that it has
delivered to the Fund 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
all material 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 and will remain 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; (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 been approved by the Board of Trustees of
the Trust to serve as the investment adviser to the Fund, (v)
it has the authority under the Investment Advisory Agreement
to appoint the Sub-Advisor, subject to the approval by the
Board of Trustees of the Trust, (vi) it has adopted and
implemented a written code of ethics complying with the
requirements of Rule 17j-1 under the 1940 Act (the "Code of
Ethics") and has provided the Trust with a copy of such Code
of Ethics and will provide copies of any future material
amendments thereto, and (vii) 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
prevent violations of federal securities laws by the manager,
its employees, officers.
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 reasonably 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 (as such policies and
procedures are provided by the Adviser), and to preserve such
records for the periods and in the manner required by that
Section, and those rules, regulations, legal provisions and
compliance policies and procedures. In compliance with the
requirements of Rule 31a-3 under the 1940 Act, any records
required to be maintained and preserved pursuant to the
provisions of Rule 31a-1 and Rule 31a-2 promulgated under the
1940 Act that are prepared or maintained by the Sub-Adviser
on behalf of the Fund are the property of the Fund and shall
be surrendered promptly to the Fund or the Adviser on
request.
(b) The Sub-Adviser agrees that all accounts, books and other
records maintained and preserved by it as required hereby
shall be subject at any time, and from time to time, to such
periodic, special and other examinations by the Securities
and Exchange Commission, the Fund's auditors, the Fund or any
representative of the Fund (including, without limitation,
the Fund's Chief Compliance Officer), the Adviser, or any
governmental agency or other instrumentality having
regulatory authority over the Adviser or the Fund.
15. Liability of Sub-Adviser.
a) The Sub-Adviser shall not be liable to the Trust, the
Fund, the Adviser or to any of their respective
affiliates, officers, agents or to any shareholder for
any action taken or omitted, error of judgment, mistake
of law or for any loss suffered by the Trust or Fund in
connection with the performance of this Agreement,
except for a loss resulting from a breach of fiduciary
duty with respect to the receipt of compensation for
services or a loss resulting from the Sub-Adviser's (i)
willful misfeasance, bad faith, gross negligence or
reckless disregard in the performance of its obligations
and duties hereunder, or (ii) material breach of this
Agreement.
b) In no event will the Sub-Adviser or its officers,
directors, managers, members, agents, representatives or
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 the
Adviser or any other sub-investment adviser to the Trust
or Fund, or for any acts of the Sub-Adviser which
directly result from written directions of the Adviser
or information provided in writing by the Adviser.
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 Sub-Adviser shall not be deemed by
virtue of this Agreement to have made any representation or
warranty that any level of investment performance will be
achieved.
16. Indemnification.
(a) Sub-Adviser will, subject to the limits set forth in
Section 15, to the extent permissible under applicable
law, indemnify and hold harmless Adviser and the Trust,
their affiliates, and their respective employees,
managers, members, officers, trustees, directors and
shareholders from and against all losses, claims,
damages, liabilities, costs and expenses (including,
without limitation, reasonable attorneys' and
accountants' fees and disbursements) arising out of this
Agreement except to the extent such claims arise out of:
(i) Adviser's willful misfeasance, bad faith, gross
negligence or reckless disregard in the performance of
its obligations and duties hereunder; or (ii) Adviser's
material breach of this Agreement;
(b) Adviser will to the extent permissible under applicable
law, indemnify and hold harmless Sub-Adviser, its
affiliates, and their respective employees, officers and
directors from and against all losses, claims, damages,
liabilities, costs and expenses (including, without
limitation, reasonable attorneys' and accountants' fees
and disbursements) ("Losses") arising out of this
Agreement (which shall include any Losses arising out of
any untrue statement of a material fact contained in the
Trust's or Fund's Prospectus and SAI, Registration
Statement, proxy materials, reports, advertisements,
sales literature, or other materials prepared by Adviser
or the omission of a material fact which was required to
be stated therein or necessary to make the statements
therein not misleading, unless such statement or omission
was made in reliance upon, and is consistent with, the
information furnished in writing to the Adviser or the
Trust by the Sub-Adviser specifically for use therein),
except to the extent such claims arise out of: (i) Sub-
Adviser's willful misfeasance, bad faith, gross
negligence or reckless disregard in the performance of
its obligations and duties hereunder; (ii) Sub-Adviser's
material breach of this Agreement; or (iii) 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,
in either case on not less than 45 days' prior written
notice to the Sub-Adviser. This Agreement may also be
terminated, without the payment of any penalty, by the
Adviser: (i) upon 60 days written notice to the Sub-
Adviser; (ii) immediately upon material breach by the Sub-
Adviser of any of the representations, warranties and
agreements set forth in this Agreement; or (iii)
immediately if, in the reasonable judgment of Adviser, the
Sub-Adviser becomes unable to discharge its duties and
obligations under this Agreement, including without
limitation, circumstances such as financial insolvency of
the Sub-Adviser. The Sub-Adviser may terminate this
Agreement at any time, without the payment of any penalty,
on 90 days written notice to Adviser and the Trust. This
Agreement will terminate automatically in the event of its
assignment or upon termination of the Investment Advisory
Agreement, as it relates to this Fund.
(d) In the event of termination for any reason, all records
of the Fund that are maintained by the Sub-Adviser in
accordance with the 1940 Act and Section 14 of this
Agreement shall promptly be returned to the Adviser or the
Trust, free from any claim or retention of rights in such
records by the Sub-Adviser, although the Sub-Adviser may,
at its expense, make and retain a copy of such records.
18. Notices. Unless otherwise provided in this Agreement
or otherwise agreed by the Adviser in writing, all notices
and other communications hereunder shall be in writing.
Notices and other writings delivered or mailed postage
prepaid to the Adviser and the Trust at BlackRock Advisors,
LLC, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000, Attention:
General Counsel-Mutual Funds, or to the Sub-Adviser at
PEAK6 Advisors LLC, 000 X. Xxxxxxx Xxxx., Xxxxx 000,
Xxxxxxx, XX 00000, Attention: COO and Chief Legal Officer,
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 other than to (i) its accountants,
lawyers, third party service providers (i.e., Axioma) with
whom Sub-Adviser has entered into a confidentiality agreement
with customary terms and conditions and (ii) 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 that the Adviser has directed the Sub-Adviser to
disclose such records or information in writing to, and will
not use such records or information for purposes other than
performance of its responsibilities and duties hereunder.
(b) The Sub-Adviser hereby authorizes the Fund and the
Adviser to use all related evaluation material, analyses and
information regarding the Sub-Adviser and the investment
program of the Fund, including information about portfolio
holdings and positions, in connection with (1) marketing the
Fund and the Adviser's services to the Trust, (2) providing
ongoing information to existing shareholders and (3)
providing any required regulatory disclosures.
(c) The confidentiality provisions of this Section 19 will
not apply to any information that either party hereto can
show: (a) is or subsequently becomes publicly available
without breach of any obligation owed to the other party; (b)
became known to either party from a source other than the
other party, and without a known breach of an obligation of
confidentiality owed to the other party; (c) is independently
developed by either party without reference to the
information required by this Agreement to be treated
confidentially; or (d) is used by either party in order to
enforce any of its rights, claims or defenses under, or as
otherwise contemplated in, this Agreement. Nothing in this
Section 19 will be deemed to prevent a party from disclosing
any information received hereunder pursuant to any applicable
law, rule or regulation or in response to a request from a
duly constituted regulatory, self-regulatory or other
judicial authority with appropriate jurisdiction over such
party.
20. Use of BlackRock Names.
The Sub-Adviser acknowledges and agrees that the names
"BlackRock Funds" and BlackRock Advisors, LLC, and
abbreviations or logos associated with those names, are the
valuable property of the Adviser and its affiliates; that the
Trust, has the right to use such names, abbreviations and
logos; and that the Sub-Adviser shall use the names
"BlackRock Funds," BlackRock Advisors, LLC, and associated
abbreviations and logos, only in connection with the Sub-
Adviser's performance of its duties hereunder. Further, in
any communication with the public and in any marketing
communications of any sort, the Sub-Adviser agrees to obtain
prior written approval from the Adviser before using or
referring to "BlackRock Funds" and the Adviser, or the Fund
or any abbreviations or logos associated with those names.
21. Use of Sub-Adviser Name. The Adviser and the Trust are
authorized to publish and distribute any information,
including but not limited to registration statements,
advertising or promotional material, regarding the provision
of sub-investment advisory services by the Sub-Adviser
pursuant to this Agreement and to use in advertising,
publicity or otherwise the name of the Sub-Adviser, or any
trade name, trademark, trade device, service mark, symbol or
logo of the Sub-Adviser, without the prior written consent
of the Sub-Adviser. Such use may not be sublicensed or
assigned. The Adviser and Trust shall follow any use
guidelines and requirements reasonably imposed by the Sub-
Advisor and upon termination of this Agreement, the Adviser
and the Trust must promptly cease use of the Mark, except as
required by law or regulation. In addition, the Adviser may
distribute information regarding the provision of sub-
investment advisory services by the Sub-Adviser to the Board
without the prior written consent of the Sub-Adviser. The
Adviser shall provide copies of such items to the Sub-Adviser
upon request within a reasonable time following such use,
publication or distribution.
22. Severability. If any provision of this Agreement shall be
held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be
affected thereby.
23. Amendments. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by the party against whom
enforcement of the change, waiver, discharge or termination
is sought. To the extent required by applicable law, no
amendment of this Agreement shall be effective until approved
(i) by a vote of a majority of the Independent Trustees, and
(ii) if the terms of this Agreement shall have changed, by a
vote of a majority of the Fund's outstanding voting
securities (except in the case of (ii), pursuant to the terms
and conditions of the SEC order permitting it to modify the
Agreement without such vote).
24. Third-Party Beneficiary. The Fund is an intended third-
party beneficiary under this Agreement and is entitled to
enforce this Agreement as if it were a party thereto.
25. Survival. Sections 4, 12, 13, 14, 15, 16, 17, 18, 20, 23,
24, 25, 26 and 29 shall survive the termination of this
Agreement.
26. Sub-Adviser Rights to Performance Record and Trade Data.
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 in a composite including performance of at
least one other sub-advisory relationship, provided that the
name of the Fund or the Trust is not specifically identified
without the prior written approval of the Adviser. Further,
the Sub-Adviser shall be entitled to retain and use the
portfolio holdings of the Managed Portion as are necessary to
support any such uses of the investment performance and track
record; provided, that (i) any disclosure of such portfolio
holdings information is made pursuant to and in compliance
with the Fund's Portfolio Information Distribution Guidelines
Policy and (ii) a non-disclosure agreement with customary
terms and conditions between the Sub-Adviser and any entity
to whom such portfolio holdings are disclosed is in place
restricting the disclosure thereof.
27. 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.
28. 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.
29. 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.
30. 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 xxxxxx
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
PEAK6 Advisors LLC
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Chief Operating 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
PEAK6 Advisors LLC
Fee (as a percentage of average daily net assets of the Managed
Portion):
Average Daily Net Assets Of The Managed Portion Not Exceeding
$100 million [ ] %
Average Daily Net Assets Of The Managed Portion In Excess of
$100 million [ ] %
If, at any time, (i) the Sub-Adviser or any of its affiliates
provides to any investment company registered under the 1940 Act
(but not including any such relationships in place as of
February 28, 2014) sub investment advisory services using
investment strategies substantially similar to those provided by
the Sub-Adviser to the Fund pursuant to this Agreement, (ii) the
value of the assets under management with respect to which the
Sub-Adviser provides such services to such other investment
company is comparable to or less than the value of the Managed
Portion, and (iii) the Sub-Adviser is compensated for providing
such services at a rate less than the rate set forth on this
Exhibit A (measured over the three months prior to Sub-Adviser
entering into such more favorable rate relationship on a net
asset value weighted basis), 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.
