FDP Series, Inc.
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FDP BlackRock Janus Growth 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 Janus Capital
Management LLC.
EXHIBIT 77Q1(E)
Execution Version
SUBADVISORY AGREEMENT
BETWEEN
BLACKROCK ADVISORS, LLC
AND
JANUS CAPITAL MANAGEMENT LLC
This Subadvisory Agreement (the "Agreement") is entered into as of May 30, 2017
by and between BlackRock Advisors, LLC, a limited liability company duly
organized and existing under the laws of the State of Delaware (the "Adviser"),
and Janus Capital Management LLC, a limited liability company duly organized
and existing under the laws of the State of Delaware (the "Subadviser").
WHEREAS, the Adviser and FDP Series, Inc., an open-end management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act") and organized as a corporation under the laws of the State of
Maryland (the "Corporation"), have entered into an Investment Advisory and
Management Agreement dated September 29, 2006 (the "Investment Advisory
Agreement");
WHEREAS, pursuant to the Investment Advisory Agreement, the Adviser has
agreed to provide investment management and advisory services to FDP Series,
Inc. which consists of multiple series, including FDP BlackRock Janus Growth
Fund (formerly, the ▇▇▇▇▇▇▇ Growth FDP Fund) (the "Fund");
WHEREAS, the Investment Advisory Agreement authorizes the Adviser to, from
time to time, in its sole discretion to the extent permitted by applicable law,
appoint one or more subadvisers to perform investment advisory services with
respect to the Fund;
WHEREAS, the Corporation's Board of Directors (the "Board"), including a
majority of those directors who are not parties to the Investment Advisory
Agreement, or "interested persons" of any party to the Investment Advisory
Agreement, has duly consented to and approved the engagement of the Subadviser
to furnish investment information, services and advice to assist the Adviser in
carrying out its responsibilities under the Investment Advisory Agreement; and
WHEREAS, the Adviser desires to retain the Subadviser to render investment
advisory services to the Adviser and the Fund in the manner and on the terms
set out in this Agreement, and the Subadviser desires to provide such services.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
out in this Agreement, the Adviser and the Subadviser agree as follows:
1. Investment Description; Appointment
(a) Investment Description. The Fund will invest and reinvest its assets in
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accordance with the investment objective(s), policies and limitations
specified in the prospectus and statement of additional information (the
"Prospectus") filed with the Securities and Exchange Commission (the "SEC")
as part of the Corporation's Registration Statement on Form N-1A, as it may
be periodically amended or supplemented from time to time (the "Registration
Statement"). The Adviser agrees to provide copies of all amendments and
supplements to the current Prospectus, and copies of any procedures adopted
by the Board that are applicable to the Fund and any amendments to those
procedures (the "Board Procedures"), to the Subadviser on an on-going basis.
In addition, the Adviser will furnish the Subadviser with a copy of (a) the
Corporation's Charter and By-Laws, as each may be amended form time to time
(the "Governing Documents"), (b) any financial statement or report prepared
for the Fund with respect to the Fund by a registered independent public
accounting firm, and (c) any financial statements or reports made by the
Fund to shareholders or to any state or federal regulatory agency.
(b) Appointment of Subadviser. The Adviser hereby engages the services of
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the Subadviser in connection with the investment and reinvestment of the
Fund's assets. Pursuant to this Agreement and subject to the oversight and
supervision by the Adviser and the Board, the Subadviser will manage the
investment and reinvestment of the Fund's assets. Subject to the terms and
conditions of this Agreement, the Subadviser hereby accepts the engagement
by the Adviser in the foregoing capacity and agrees, at the Subadviser's own
expense, to render the services set out in this Agreement and to provide the
office space, furnishings, equipment, and personnel required by the
Subadviser to perform these services on the terms and for the compensation
provided in this Agreement. Except as specified in this Agreement, the
Subadviser agrees that it will not delegate any obligation assumed pursuant
to this Agreement to any third party without first obtaining the written
consent of both the Fund and the Adviser.
2. Services as Subadviser
Subject to the supervision, direction and approval of the Adviser and the
Board, the Subadviser will conduct a continual program of investment,
evaluation, sale, and reinvestment of the Fund's assets. The Subadviser shall:
(a) obtain and evaluate pertinent economic, financial, and other information
affecting the economy generally and certain investment assets as such
information relates to securities or other financial instruments that are
purchased for or considered for purchase by the Fund; (b) make investment
decisions for the Fund; (c) place purchase and sale orders for portfolio
transactions on behalf of the Fund and shall provide standing instructions to
the Fund's custodian to automatically invest any uninvested cash assets in cash
equivalent investments available to the custodian on a daily basis, unless the
Adviser requests in writing that the Subadviser manage the uninvested cash;
(d) provide reasonable assistance to the Adviser with respect to the pricing of
Fund securities at such time and in such manner as the Adviser and Subadviser
will mutually agree upon from time to time; (e) execute account documentation,
agreements, contracts and other documents as may be requested by brokers,
dealers, counterparties and other persons in connection with the Subadviser's
management of the assets of the Fund (in such respect, and only for this
limited purpose, the Subadviser will act as the Adviser's and the Fund's agent
and attorney-in-fact); and (f) employ professional portfolio managers and
securities analysts who provide research services to the Fund. Notwithstanding
Section 2(d) above, the Adviser acknowledges that the Fund's designated pricing
agent, and not
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the Subadviser, is responsible for providing valuation of the assets in the
Fund, and any additional information provided by the Subadviser shall be
supplemental information to assist the Fund and its pricing agent to meet the
Fund's fair valuation obligations. The Subadviser will in general take such
action as is appropriate to effectively manage the Fund's investment practices.
In addition:
i. The Subadviser will furnish the Adviser routinely with daily information
concerning portfolio transactions and other reports as agreed upon from
time to time concerning transactions and performance of the Fund, in
such form and frequency as may be mutually agreed upon from time to
time. The Subadviser agrees to review the Fund, discuss the management
of the Fund with, and provide such access to its personnel and
operations as may be reasonably requested by the Adviser and/or the
Board from time to time in connection with its provision of services to
the Fund.
ii.The Subadviser will maintain and preserve the records specified in
Section 15 of this Agreement and any other records related to the Fund's
transactions or its management of the Fund as are required of a
subadviser under any applicable state or federal securities law or
regulation including: the 1940 Act, the Securities Exchange Act of 1934,
as amended (the "1934 Act"), and the Investment Advisers Act of 1940, as
amended (the "Advisers Act"). The Adviser and the Fund will maintain and
preserve all other books and records for the Fund as required under such
rules. Subject to the confidentiality provisions herein, the Subadviser
will furnish to the Adviser all information relating to the Subadviser's
services under this Agreement reasonably requested by the Adviser within
a reasonable period of time after the Adviser makes such request.
iii.The Subadviser will comply with all applicable Board Procedures that are
provided to the Subadviser by the Adviser or the Fund. The Subadviser
shall notify the Adviser promptly upon detection of any breach of the
1940 Act, Subchapter M of the Internal Revenue Code, Board Procedures,
the Registration Statement, of any known violation of any other
applicable law or regulation relating to the Fund and of any error in
connection with its management of the Fund, including trade errors. The
Subadviser shall also notify the Adviser promptly upon detection of any
material violations of the Subadviser's own compliance policies and
procedures that relate to (1) its management of the Fund, or (2) its
activities as investment adviser generally to the extent such violation
could be considered material to the Fund. Notwithstanding Sections 4 and
17, the Subadviser will reimburse the Fund for costs incurred arising
out of or resulting from any such violation or error.
iv.The Subadviser will maintain a written code of ethics (the "Code of
Ethics") that it reasonably believes complies with the requirements of
Rule 17j-1 under the 1940 Act, a copy of which will be provided to the
Adviser and the Fund, including any amendments thereto, and will
institute and enforce procedures reasonably necessary to prevent Access
Persons (as defined in Rule 17j-1) from violating its Code of Ethics.
The Subadviser will follow such Code of Ethics in performing its
services under this Agreement. Further, the Subadviser represents that
it has policies and procedures regarding the detection and prevention of
the misuse of material, nonpublic information by the Subadviser and its
employees as required by the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and Securities Fraud
Enforcement Act of 1988, a copy of which policies and procedures it will
provide to the Adviser and the Fund upon any reasonable request.
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The Subadviser shall assure that all reporting required of a subadviser
under the 1934 Act in connection with portfolio securities of the Fund,
shall be made in a timely manner.
v. The Subadviser will manage the investment and reinvestment of the assets
of the Fund in a manner consistent with the Fund's investment objectives
and policies as stated in the Prospectus. The Subadviser also will
manage the investments of the Fund in a manner consistent with any and
all applicable investment restrictions (including diversification
requirements) contained in the 1940 Act and the rules and regulations
under the 1940 Act, any SEC no-action letter or order applicable to the
Fund, the Governing Documents, and any applicable law or regulation,
including the gross income and diversification requirements set forth in
Section 851(b)(2) and 851(b)(3) of the Internal Revenue Code of 1986, as
amended (the "Code"). The Adviser will provide Subadviser with copies of
any such SEC no-action letter or order. The Adviser shall perform
quarterly and annual tax compliance tests with respect to the Fund's
compliance with the diversification requirements of Subchapter M of the
Code, and promptly furnish reports of such tests to the Subadviser after
each quarter end to ensure that the Fund is in compliance with the Code.
The Subadviser shall take prompt action in response to any notification
from the Adviser of any potential non-compliance with either the
Adviser's internal guidelines or the diversification requirements of the
Code to ensure that the Fund complies with such Code diversification
requirements.
vi.The Subadviser agrees to perform its duties hereunder in compliance with
the Fund's policies and procedures adopted pursuant to Rule 38a-1 of the
1940 Act and the Subadviser's duties and obligations under Rule 206(4)-7
of the Advisers Act, including providing the Chief Compliance Officer
and/or board of directors of FDP Series, Inc. with such information,
reports and certifications as they may reasonably request.
vii.The Subadviser shall, in a prudent and diligent manner, vote proxies
relating to the Fund's portfolio securities in the best interests of the
Fund and its shareholders in connection with any matters submitted to a
vote of shareholders in compliance with Subadviser's proxy voting
policies and procedures. The Subadviser will provide the Adviser with a
report of all proxy votes made on behalf of the Fund in a timely matter
so as to permit the Adviser to timely comply with the reporting
requirements under the 1940 Act. The Subadviser shall be responsible for
exercising any other applicable rights of security holders in corporate
actions or otherwise, except the Subadviser shall have no responsibility
for class action elections related to the Fund's securities. The
Subadviser will promptly forward to the Adviser any class action
materials it receives.
viii.The Subadviser shall not acquire on behalf of the Fund 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
Subadviser shall be deemed to have sole investment discretion with
respect to all securities held in the Fund. If any investments made by
the Subadviser on behalf of the Fund are required
5
to be disclosed in any other reports to be filed by the Subadviser with
any governmental or self-regulatory agency or organization or exchange
(other than reports required under Section 13 of the 1934 Act), the
Subadviser shall provide the Adviser with prompt written notice thereof,
setting forth in reasonable detail the nature of the report and the
investments of the Fund to be reported.
3. Information and Reports
(a) The Subadviser will keep the Fund and the Adviser promptly informed of
developments relating to its duties as subadviser of which the Subadviser
has, or should have, knowledge that would materially affect the Fund,
including but not limited to any changes in the portfolio manager or
managers assigned to the Fund's account and any changes to the ownership of
the Subadviser. In this regard, the Subadviser will provide the Fund, the
Adviser, and their respective officers with such periodic reports concerning
the obligations the Subadviser has assumed under this Agreement as the Fund
and the Adviser may from time to time reasonably request. Additionally,
prior to each Board meeting, as the Adviser shall reasonably request, the
Subadviser will provide the Adviser and the Board with reports regarding the
Subadviser's management of the Fund during the most recently completed
quarter, to include written certifications that the Subadviser's management
of the Fund is in compliance with the Fund's investment objectives and
practices, the 1940 Act and applicable rules and regulations under the 1940
Act, and (subject to Section 2(v) above) the diversification requirements of
Subchapter M of the Code (subject to Section 2(v) above), and otherwise in
such form as may be mutually agreed upon by the Subadviser and the Adviser.
The Subadviser also will certify quarterly to the Fund and the Adviser that
it has adopted procedures reasonably necessary to prevent Access Persons
from violating its Code of Ethics, and will report any material changes in
its Code of Ethics. Annually, the Subadviser will furnish a written report,
which complies with the requirements of Rule 17j-1 and Rule 38a-1,
concerning the Subadviser's Code of Ethics and compliance program,
respectively, to the Fund and the Adviser. The Subadviser also will notify
and forward promptly to the Fund and the Adviser any communications or
information it may receive with respect to claims against or involving the
Fund or corporate actions relating to the Fund. It shall be the sole
responsibility of the Fund, Adviser, or custodian (and not of the
Subadviser) to process and file any claim forms relating to any litigation
by or on behalf of the Fund.
(b) Each party to this Agreement agrees to provide promptly to the other
party a list, to the best of the Adviser's or the Subadviser's respective
knowledge, of each affiliated person of the Adviser or the Subadviser, as
the case may be, specifically identifying those affiliated persons that are
either (a) publicly traded companies; (b) broker-dealers or underwriters; or
(c) investment advisers. Each of the Adviser and the Subadviser agrees
promptly to update such list whenever the Adviser or the Subadviser becomes
aware of any change that should be made to such list.
(c) The Subadviser also will provide the Adviser and/or the Board with any
information reasonably requested regarding its management of the Fund
required for any shareholder report, Registration Statement, or Prospectus
supplement to be filed by FDP Series, Inc. with the SEC or in connection
with a meeting of the Board. The Subadviser will promptly inform the Fund
and the Adviser if any information in the Prospectus or SAI relating to the
Subadviser or its duties and obligations under this Agreement is (or will
become) inaccurate or incomplete.
6
(d) The Subadviser represents that it has procured and will maintain
directors and officers/errors and omissions liability insurance coverage for
itself and its subsidiaries in such reasonable amount as the Subadviser
deems prudent and a joint insured fidelity bond that meets the requirements
of Rule 17g-1 of the 1940 Act, and from insurance providers that are in the
business of regularly providing insurance coverage to investment advisers.
In no event shall the Subadviser's errors and omissions insurance coverage
be less than $10 million or the Subadviser's fidelity insurance coverage be
less than $10 million. The Subadviser shall provide prior written notice to
the Adviser (i) of any material changes in its insurance policies or
insurance coverage; or (ii) if any claims will be made on its insurance
policies that are material and require public disclosure. Furthermore, it
shall upon request provide to the Adviser any information the Adviser may
reasonably require concerning the amount of or scope of such insurance.
4. Standard of Care
The Subadviser will act in good faith and use reasonable care and in a manner
consistent with applicable federal and state laws and regulations in rendering
the services it agrees to provide under this Agreement.
5. Subadviser's Duties Regarding Fund Transactions
(a) Placement of Orders. (i)The Subadviser will take all actions that it
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considers necessary to implement the investment policies of the Fund, and,
in particular, to place all orders for the purchase or sale of securities or
other investments for the Fund with brokers or dealers the Subadviser, in
its sole discretion, selects. In connection with the selection of brokers or
dealers and the placement of purchase and sale orders, the Subadviser is
directed at all times to seek to obtain best execution pursuant to
Subadviser's best execution policy, subject to provisions (b), (c) and
(d) of this Section 5. Subadviser shall provide the Adviser with a copy of
Subadviser's best execution policy at least annually, and shall promptly
provide Adviser with any material changes to the policy. (ii) The Subadviser
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 Fund. The Subadviser 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.
(b) Selection of Brokers and Dealers. Subject to the requirements of
--------------------------------
Section 28(e) of the 1934 Act, in the selection of brokers and dealers to
execute portfolio transactions, the Subadviser is permitted to consider not
only the available prices and rates of brokerage commissions/spreads, but
also other relevant factors, which could include, without limitation: the
execution capabilities of the brokers and dealers; the research and other
services provided by the brokers and dealers that the Subadviser believes
will enhance its general portfolio management capabilities; the size of the
transaction; the difficulty of execution; the operational facilities of
these brokers and dealers; the risk to a broker or dealer of positioning
7
a block of securities; and the overall quality of brokerage and research
services provided by the brokers and dealers. In connection with the
foregoing, the Subadviser may pay those brokers and dealers who provide
brokerage and research services to the Subadviser a higher commission than
that charged by other brokers and dealers if the Subadviser determines in
good faith that the amount of the commission is reasonable in relation to
the value of the brokerage and research services provided by the broker or
dealer in terms of either the particular transaction or in terms of the
Subadviser's overall responsibilities with respect to the Fund and to any
other client accounts or portfolios that the Subadviser advises. The
execution of such transactions pursuant to this section 5(b) would not be
considered to represent an unlawful breach of any duty created by this
Agreement or otherwise.
(c) Soft Dollar Arrangements. Pursuant to the authorization that has been
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granted by the Fund pursuant to which the Subadviser may maintain "soft
dollar" arrangements with respect to the Fund, the Subadviser will, on an
ongoing basis, but not less often than annually, identify and provide a
written description to the Board and the Adviser of all "soft dollar"
arrangements that the Subadviser maintains with respect to the Fund or with
brokers or dealers that execute transactions for the Fund, and of all
research and other services provided to the Subadviser by a broker or dealer
(whether prepared by such broker or dealer or by a third party) as a result,
in whole or in part, of the direction of Fund transactions to the broker or
dealer. If the Subadviser in its sole discretion ever decides to terminate
soft dollar arrangements for similar client accounts, then thereafter, the
Subadviser will promptly inform the Fund of such decision and, upon the
Fund's reasonable written request, the Subadviser will, to the extent
reasonably practicable, terminate within a reasonable time any "soft dollar"
arrangements it has established with respect to the Fund.
(d) Aggregated Transactions. The Subadviser acknowledges and agrees that,
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subject to the 1940 Act and the Advisers Act and consistent with its
fiduciary duties to the Fund and with its internal policies and procedures
regarding fairly and equitably allocating investment opportunities among its
clients, the Subadviser is authorized and permitted in its discretion to
aggregate or bunch orders for the Fund with similar orders for other
Subadviser clients, and/or to execute single or bunched orders as "block"
transactions, which may be subject to different trading or regulatory
treatment than those applicable to smaller "non-block" transactions, and
where applicable, to allocate such bunched or block orders among accounts
following execution.
6. Compensation
For its services, the Adviser pays the Subadviser at the end of each calendar
month a fee based upon the average daily value of the net assets of the Fund at
the annual rate of 0.40% of the Fund's average daily net assets on the first
$200 million of the average daily value of the net assets of the Fund and 0.35%
thereafter, commencing on the day following effectiveness hereof. For purposes
of this calculation, average daily net assets are determined by the Fund at the
end of each month on the basis of the average net assets of the Fund for each
day during the month. The Subadviser will have no right to obtain compensation
directly from the Fund for services provided under this Agreement and agrees to
look solely to the Adviser for payment of fees due. The fee for the period from
the Effective Date (defined below) of the Agreement to the end of the month
during which the Effective Date occurs will be prorated according to the
proportion that such period bears to the full monthly period. Upon any
termination of this Agreement before the end of a month, the fee for such part
of that month will be prorated according to the proportion that such period
bears to the full monthly period and will be payable upon the date of
termination of this
8
Agreement. For the purpose of determining fees payable to the Subadviser, the
value of the Fund's net assets will be computed at the times and in the manner
specified in the Prospectus, and on days on which the net assets are not so
determined, the net asset value computation to be used will be as determined on
the immediately preceding day on which the net assets were determined.
7. Expenses
The Subadviser will bear all expenses (excluding expenses to be borne by the
Fund as described in the following sentence) in connection with the performance
of its services under this Agreement. The Fund will bear certain other expenses
to be incurred in its operation, including, but not limited to, (i) interest
and taxes; (ii) brokerage commissions and other costs in connection with the
purchase or sale of securities and other investment instruments; (iii) fees and
expenses of the Fund's directors who are not "interested persons" of the Fund;
(iv) legal and audit expenses; (v) custodian, registrar and transfer agent fees
and expenses; (vi) fees and expenses related to the registration and
qualification of the Fund and the Fund's shares for distribution under state
and federal securities laws; (vii) expenses of printing and mailing reports and
notices and proxy material to shareholders of the Fund; (viii) all other
expenses incidental to holding meetings of the Fund's shareholders, including
proxy solicitations therefor; (ix) insurance premiums for fidelity bond and
other coverage; (x) investment management fees; (xi) expenses of typesetting
for printing prospectuses and statements of additional information and
supplements to these documents; (xii) expenses of printing and mailing
prospectuses and supplements thereto; and (xiii) such non-recurring or
extraordinary expenses as may arise, including those relating to actions, suits
or proceedings to which the Fund is a party or in which the Fund has a claim
and legal obligations that the Fund may have to indemnify the Fund's directors,
officers and/or employees or agents with respect to these actions, suits or
proceedings.
8. Services to Other Companies or Accounts
The Adviser understands that the Subadviser and its affiliates now act, will
continue to act and may act in the future as investment manager or adviser to
fiduciary and other managed accounts, and as an investment manager or adviser
to other investment companies, including any offshore entities or private
accounts. The Adviser has no objection to the Subadviser and its affiliates so
acting, provided, that, whenever the Fund and one or more other investment
companies or accounts managed or advised by the Subadviser and its affiliates
have available funds for investment, investments suitable and appropriate for
each will be allocated in accordance with a formula reasonably believed to be
equitable to each such company and account. The Adviser represents that the
Fund recognizes that in some cases this procedure may adversely affect the size
of the position obtainable for the Fund and/or the price obtained for the
purchase or sale of securities by the Fund. The Adviser represents that the
Fund also understands that the persons employed by the Subadviser to assist in
the performance of the Subadviser's duties under this Agreement may not devote
their full time to such service, and that nothing contained in this Agreement
will be deemed to limit or restrict the right of the Subadviser to engage in
and devote time and attention to other businesses or to render services of
whatever kind or nature. This Agreement will not in any way limit or restrict
the Subadviser or any of its directors, officers, employees, or agents from
buying, selling or trading any securities or other investment instruments for
its or their own account or for the account of others for whom it or they may
be acting, provided that such activities will not adversely affect or otherwise
impair the performance by the Subadviser of its duties and obligations under
this Agreement.
9. Affiliated Brokers
9
The Subadviser or any of its affiliates may act as broker in connection with
the purchase or sale of securities or other investments for the Fund, subject
to: (a) the requirement that the Subadviser seek to obtain best execution
within the policy guidelines determined by the Board and set out in the Fund's
current prospectus; (b) the provisions of the 1940 Act and the Advisers Act;
(c) the provisions of the 1934 Act, including, but not limited to,
Section 11(a) thereof; and (d) other provisions of applicable law. These
brokerage services are not within the scope of the duties of the Subadviser
under this Agreement. Subject to the requirements of applicable law and any
procedures adopted by the Board, the Subadviser or its affiliates may receive
brokerage commissions, fees or other remuneration from the Fund for these
services in addition to the Subadviser's fees for services under this Agreement.
10.Custody
The Subadviser will not take custody of or receive physical possession or
physical control of cash, securities, or other investments of the Fund.
11.Term of Agreement; Termination of Agreement; Amendment of Agreement
(a) Term. This Agreement is effective as of the date first written above,
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provided that this Agreement shall not take effect unless it has first been
approved by the vote of a majority of those Directors of the Corporation 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. A vote by a majority of the Fund's outstanding voting securities
(within the meaning of the ▇▇▇▇ ▇▇▇) is not required as 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. Unless
sooner terminated as provided herein, this Agreement shall continue in
effect for one year 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 Directors of the Corporation 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
Fund's shareholders fail to approve this Agreement as provided herein, the
Subadviser 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.
(b) Termination. Notwithstanding paragraph 11(a), this Agreement may be
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terminated at any time, without the payment of any penalty, by a 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 Subadviser; (ii) immediately upon material breach by the Subadviser of
any of the representations, warranties and agreements set forth in this
Agreement; or (iii) immediately if, in the reasonable judgment of the
Adviser, the Subadviser becomes unable to discharge its duties and
obligations under this Agreement, including without limitation,
circumstances such as financial insolvency of the Subadviser. The Subadviser
may terminate this Agreement at any time, without the payment of any
penalty, on 90 days written notice to
10
Adviser and the Corporation. This Agreement will terminate automatically in
the event of its assignment or upon termination of the Investment Advisory
Agreement, as it relates to the Fund.
(c) Amendment. This Agreement may be materially amended by the parties only
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if the amendment is specifically approved by: (i) a majority of those
directors who are not parties to this Agreement or "interested persons" of
any party cast in person at a meeting called for the purpose of voting on
the Agreement's approval; and (ii) if required by applicable law, the vote
of a majority of outstanding shares of the Fund (except in the case of
clause (ii), pursuant to the terms and conditions of the SEC order
permitting it to modify the Agreement without such vote).
12.Representations and Covenants of the Adviser
The Adviser represents and covenants to the Subadviser as follows:
a. It is duly organized and validly existing under the laws of the State
of Delaware with the power to own and possess its assets and carry on
its business as the business is now being conducted.
b. The execution, delivery and performance by the Adviser of this
Agreement are within the Adviser's powers and have been duly
authorized by all necessary actions and by the Board of the Fund, and
no action by or in respect of, or filing with, any governmental body,
agency or official is required on the part of the Adviser for the
execution, delivery and performance of this Agreement by the parties
to this Agreement, and the execution, delivery and performance of
this Agreement by the parties to this Agreement does not contravene
or constitute a default under (i) any provision of applicable law,
rule or regulation, (ii) the Adviser's governing instruments, or
(iii) any agreement, judgment, injunction, order, decree or other
instruments binding upon the Adviser.
c. It is not prohibited by the 1940 Act or the Advisers Act from
performing the services contemplated by this Agreement.
d. It has met, and will continue to seek to meet for the duration of
this Agreement, any other applicable federal or state requirements,
or the applicable requirements of any regulatory or industry
self-regulatory agency, necessary to be met by the Adviser in order
to perform the services contemplated by this Agreement.
e. It (i) is registered with the SEC as an investment adviser under the
Advisers Act, (ii) is registered and licensed as an investment
adviser under the laws of all jurisdictions in which its activities
require it to be so licensed, and (iii) will promptly notify the
Subadviser of the occurrence of any event that would disqualify the
Adviser from serving as an investment adviser to an investment
company pursuant to Section 9(a) of the 1940 Act.
f. It acknowledges that it has received a copy of the Subadviser's Form
ADV prior to or at the time of the execution of this Agreement and
has delivered a copy of the same to the Fund.
11
g. The Fund is, or will be prior to commencing operations, registered as
an open-end management investment company under the 1940 Act and the
Fund's shares are (or will be prior to commencing operations)
registered under the Securities Act of 1933 and under any applicable
state securities laws.
13.Representations and Covenants of the Subadviser
The Subadviser represents and covenants to the Adviser as follows:
a. It is duly organized and validly existing under the laws of the State
of Delaware with the power to own and possess its assets and carry on
its business as this business is now being conducted.
b. The execution, delivery and performance by the Subadviser of this
Agreement are within the Subadviser's powers and have been duly
authorized by all necessary action on the part of its board of
directors, and no action by or in respect of, or filing with, any
governmental body, agency or official is required on the part of the
Subadviser for the execution, delivery and performance of this
Agreement by the parties to this Agreement, and the execution,
delivery and performance of this Agreement by the parties to this
Agreement does not contravene or constitute a default under (i) any
provision of applicable law, rule or regulation, (ii) the
Subadviser's governing instruments, or (iii) any agreement, judgment,
injunction, order, decree or other instruments binding upon the
Subadviser.
c. It is not prohibited by the 1940 Act or the Advisers Act from
performing the services contemplated by this Agreement.
d. It has met, and will continue to seek to meet for the duration of
this Agreement, any other applicable federal or state requirements,
or the applicable requirements of any regulatory or industry
self-regulatory agency, necessary to be met in order to perform the
services contemplated by this Agreement.
e. It is registered with the SEC as an investment adviser under the
Advisers Act, is registered or licensed as an investment adviser
under the laws of jurisdictions in which its activities require it to
be so registered or licensed, and will promptly notify the Adviser
and the Fund of the occurrence of any event that would disqualify it
from serving as an investment adviser to an investment company
pursuant to Section 9(a) of the 1940 Act.
f. It has provided the Adviser with a copy of its Form ADV, which as of
the date of this Agreement is its Form ADV as most recently filed
with the SEC, and will, (i) promptly after making any material
amendment to Part 2A or 2B of its Form ADV, furnish a copy of such
amendments to the Adviser , and (ii) at least annually, within 120
days after the Subadviser's fiscal year end and without charge,
furnish the Adviser with a copy of any amendment to Part 2A of the
Subadviser's Form ADV reflecting material changes, if any, made since
the last annual updating amendment, as required by the Advisers Act.
The information contained in the Subadviser's Form ADV is accurate
and complete in all material respects and does not omit to state any
material fact necessary in order to make the statements made, in
light of the circumstances under which they were made, not misleading.
12
g. It will carry out its responsibilities under this Agreement in
compliance with (i) federal and state law, including securities law,
governing its activities; (ii) the Fund's investment objective(s),
policies, and restrictions, as set out in the Prospectus and SAI, as
amended from time to time; and (iii) any policies or directives as
the Board may from time to time establish or issue and communicate to
the Subadviser in writing. The Fund or the Adviser will promptly
notify the Subadviser in writing of changes to (ii) or (iii) above.
h. It is not to the best of its knowledge the subject of any proceeding,
investigation or inquiry brought by the SEC, the Financial Industry
Regulatory Authority (or any other self-regulatory organization) or
any other federal or state regulator with respect to the types of
services for which it is being appointed herein or which could have a
material impact on its ability to fully perform any of the services
to be rendered hereunder.
14.Cooperation with Regulatory Authorities or Other Actions
The parties to this Agreement each agree to cooperate in a reasonable manner
with each other in the event that any of them should become involved in a
legal, administrative, judicial or regulatory action, claim, or suit as a
result of performing its obligations under this Agreement.
15.Records.
(a) Maintenance of Records. The Subadviser hereby undertakes and agrees to
----------------------
maintain, in the form and for the period required by Rule 31a-2 under the
1940 Act, all records relating to the Fund's investments that are required
to be maintained by the Fund pursuant to the 1940 Act with respect to the
Subadviser's duties and obligations under this Agreement for the Fund (the
"Fund's Books and Records"). The Adviser acknowledges that the Subadviser is
not the compliance agent for the Fund or for the Adviser, and is responsible
for maintaining the Fund's Books and Records only with respect to the
Subadviser's duties and obligations to the Fund under this Agreement.
(b) Ownership of Records. The Subadviser agrees that the Fund's Books and
--------------------
Records are the Fund's property and further agrees to surrender promptly to
the Fund or the Adviser the Fund's Books and Records upon the request of the
Fund or the Adviser; provided, however, that the Subadviser may retain
copies of the records at its own cost. The Fund's Books and Records will be
made available, within two (2) business days of a written request, to the
Fund's accountants or auditors during regular business hours at the
Subadviser's offices. The Fund, the Adviser or their respective authorized
representatives will have the right to copy any records in the Subadviser's
possession that pertain to the Fund. These books, records, information, or
reports will be made available to properly authorized government
representatives consistent with state and federal law and/or regulations. In
the event of the termination of this Agreement, the Fund's Books and Records
will be returned to the Fund or the Adviser. The Subadviser agrees that any
policies and procedures it has established for managing the investment and
reinvestment of the Fund's assets, including, but not limited to, all
policies and procedures designed to ensure compliance with federal and state
regulations governing the adviser/client relationship and management of the
investment and reinvestment of the Fund's assets, will be made available for
inspection by the Fund, the Adviser or their respective authorized
representatives upon reasonable written request within not more than two
(2) business days.
13
16.Confidentiality
(a) Non-Disclosure by Subadviser. The Subadviser agrees that the Subadviser
----------------------------
will treat as proprietary and confidential any information obtained in
connection with its duties hereunder, including all records and information
pertaining to the Fund or the Adviser and will not disclose or use any
records or confidential information obtained pursuant to this Agreement in
any manner whatsoever, except as authorized in this Agreement or
specifically by the Adviser or the Fund, or if this disclosure or use is
required by federal or state regulatory authorities or by a court, or is
required in connection with the performance by the Subadviser of its duties
and obligations to the Fund under this Agreement.
(b) Nondisclosure by Adviser. The Adviser agrees that the Adviser will treat
------------------------
as proprietary and confidential any information obtained in connection with
its duties hereunder, including all records and information pertaining to
the Subadviser and will not disclose or use any records or confidential
information obtained pursuant to this Agreement or any other agreement
between the Adviser and the Subadviser in any manner whatsoever, except as
authorized in this Agreement or specifically by the Subadviser, or if this
disclosure or use is required by federal or state regulatory authorities or
by a court, or is required in connection with the performance by the Adviser
of its duties and obligations to the Fund under this Agreement.
(c) Nondisclosure Exceptions. Paragraphs (a) and (b) above shall not apply
------------------------
to information that (i) is already publicly available; (ii) 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; (iii) is
independently developed by either party without reference to the information
required by this Agreement to be treated confidentially; and/or (iv) is used
by either party in order to enforce any of its rights, claims or defenses
under, or as otherwise contemplated in, this Agreement. In addition, the
Subadviser may disclose the investment performance of the Fund; provided
that the disclosure does not reveal the identity of the Adviser or the Fund.
The Subadviser may also disclose that the Adviser and the Fund are the
Subadviser's clients, provided that the disclosure does not reveal the
investment performance or the composition of the Fund.
17.Limitation of Liability; Indemnification
(a) Limitation of Liability. Except as provided in this Agreement and as may
-----------------------
otherwise be provided by the 1940 Act or other federal securities laws, the
Adviser and its respective officers, directors, employees, agents,
representatives or persons controlled by them (collectively, the "Related
Parties") on the one hand, and the Subadviser and the Subadviser's Related
Parties on the other hand, will not be liable to each other, the Fund or any
shareholder of the Fund for any error of judgment, mistake of law, or any
loss arising out of any investment or other act or omission in the course
of, connected with, or arising out of any services to be rendered under this
Agreement, except that the Adviser, the Subadviser and any respective
Related Party will be so liable by reason of conduct that constitutes
willful misfeasance, bad faith, or gross negligence in the performance of
its duties or by reason of reckless disregard of its obligations and duties
under this Agreement. The Subadviser will not be liable to the Adviser, the
Fund or any shareholder of the Fund for the actions or omissions of any
third party service provider selected by the Adviser to whom the Adviser
delegates authority to act on behalf of the Fund. The Adviser acknowledges
that the Subadviser does not
14
warrant that the investment performance of the Fund will match the
performance of any index or other benchmark, such as any other account
managed by Subadviser.
(b) Subadviser Indemnity to the Adviser. The Subadviser agrees to indemnify
-----------------------------------
and defend the Adviser, the Adviser's Related Parties, or any affiliate of
the Adviser or such affiliate's respective Related Parties, for any loss,
liability, cost, damage, or expenses (including reasonable investigation and
defense costs and reasonable attorney's fees and costs) arising out of any
claim, demand, action, suit, or proceeding arising out of (i) the
Subadviser's conduct that constitutes willful misfeasance, bad faith, or
gross negligence in the performance of its duties or by reason of reckless
disregard of its obligations and duties under this Agreement, or (ii) any
actual or alleged material misstatement or omission in the Registration
Statement with respect to the Fund, any proxy statement, or communication to
current or prospective investors in the Fund arising from disclosure about
the Subadviser or the Fund provided to the Adviser or the Fund by the
Subadviser.
(c) Adviser Indemnity to Subadviser. The Adviser agrees to indemnify and
-------------------------------
defend the Subadviser, the Subadviser's Related Parties, or any affiliate of
the Subadviser or such affiliate's respective Related Parties, for any loss,
liability, cost, damage, or expenses (including reasonable investigation and
defense costs and reasonable attorney's fees and costs) arising out of any
claim, demand, action, suit, or proceeding arising out of (i) the Adviser's
conduct that constitutes willful misfeasance, bad faith, or gross negligence
in the performance of its duties or by reason of reckless disregard of its
obligations and duties under this Agreement, or (ii) any actual or alleged
material misstatement or omission in the Registration Statement with respect
to the Fund, any proxy statement, or other communication to current or
prospective investors in the Fund (other than a misstatement or omission
arising from disclosure about the Subadviser or the Fund provided to the
Adviser or the Fund by the Subadviser).
(d) Indemnification Procedures. Promptly after receipt of notice of the
--------------------------
commencement of any action by a party seeking to be indemnified under this
Section 17 (the "Indemnified Party"), the Indemnified Party will, if a claim
in respect thereof is to be made against a party against whom
indemnification is sought under this Section 17 (the "Indemnifying Party"),
notify the Indemnifying Party in writing of the commencement thereof;
provided, however, that the omission to notify the Indemnifying Party will
not relieve the Indemnifying Party from any liability which it may have to
any Indemnified Party otherwise than under the provisions of this Agreement,
and will relieve it from liability under this Agreement only to the extent
that such omission results in the forfeiture by the Indemnifying Party of
rights or defenses with respect to such action. In any action or proceeding,
following provision of proper notice by the Indemnified Party of the
existence of such action, the Indemnifying Party will be entitled to
participate in any such action and, to the extent that it will wish,
participate jointly with any other Indemnifying Party similarly notified, to
assume the defense thereof, with counsel of its choice (unless any conflict
of interest requires the appointment of separate counsel), and after notice
from the Indemnifying Party to such Indemnified Party of its election to
assume the defense of the action, the Indemnifying Party will not be liable
to such Indemnified Party under this Agreement for any legal expense of the
other counsel subsequently incurred without the Indemnifying Party's
consent. The Indemnified Party will cooperate in the defense or settlement
of claims so assumed. The Indemnifying Party will not be liable under this
Agreement for the settlement by the Indemnified Party for any claim or
demand unless the Indemnifying Party has previously approved the settlement
in writing or it has been notified of such claim or demand and has failed to
provide a defense in accordance
15
with the provisions hereof. In the event that any proceeding involving the
Indemnifying Party will be commenced by the Indemnified Party in connection
with the Agreement, or the transactions contemplated under this Agreement,
and such proceeding will be finally determined by a court of competent
jurisdiction in favor of the Indemnifying Party, the Indemnified Party will
be liable to the Indemnifying Party for any reasonable attorney's fees and
direct costs relating to such proceedings. The indemnifications provided in
this Section 17 will survive the termination of this Agreement.
18.Survival
Sections 6, 12, 14, 15, 16, 17, 19 and 20, shall survive the termination of
this Agreement.
19.Use of BlackRock Names
The Subadviser acknowledges and agrees that the names "BlackRock" and BlackRock
Advisors, LLC, and abbreviations or logos associated with those names, are the
valuable property of the Adviser and its affiliates; that the Corporation, has
the right to use such names, abbreviations and logos; and that the Subadviser
shall use the names "BlackRock," BlackRock Advisors, LLC, and associated
abbreviations and logos, only in connection with the Subadviser's performance
of its duties hereunder. Further, in any communication with the public and in
any marketing communications of any sort, the Subadviser 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.
20.Use of Subadviser Name
The Adviser and the Corporation are authorized to publish and distribute
information regarding the provision of sub-investment advisory services by the
Subadviser pursuant to this Agreement or as required by federal securities
laws. The Adviser and the Corporation may use the name of the Subadviser, or
any trade name, trademark, trade device, service ▇▇▇▇, symbol or logo of the
Subadviser, in advertising, publicity or otherwise in connection with the
provision of sub-investment advisory services by the Subadviser pursuant to
this Agreement, without the prior written consent of the Subadviser, provided
such use will be consistent with and/or in a form substantially similar in all
material respects to materials previously provided to the Subadviser; provided,
that the Adviser may use the name of the Subadviser, or any trade name,
trademark, trade device, service ▇▇▇▇, symbol or logo of the Subadviser in
connection with any materials filed with the SEC or Fund fact sheets produced
by Adviser without the prior written consent of Subadviser. Such use may not be
sublicensed or assigned. The Adviser and the Corporation shall follow any use
guidelines and requirements reasonably imposed by the Subadviser and upon
termination of this Agreement, the Adviser and the Corporation must promptly
cease use of any trade name, trademark, trade device, service ▇▇▇▇, symbol or
logo of the Subadviser, except as required by law or regulation. In addition,
the Adviser may distribute information regarding the provision of
sub-investment advisory services by the Subadviser to the Board without the
prior written consent of the Subadviser.
21.Limitation on Consultation
In accordance with Rule 17a-10 under the 1940 Act and any other applicable law,
the Subadviser will not consult with any other subadviser to the Fund or any
subadviser to any other portfolio of the Fund or to any other investment
company or investment company series for which the Adviser
16
serves as investment adviser concerning transactions for the Fund in securities
or other assets, except to the extent necessary to ensure the Fund's compliance
with the requirements of Rule 12d3-1(a) and (b) under the 1940 Act.
22.Governing Law
This Agreement will be governed by, construed under and interpreted and
enforced in accordance with the laws of the State of New York, without regard
to principles of conflicts of laws.
23.Severability
If any provision of this Agreement will be held or made invalid by a court
decision, statute, rule, or otherwise, the remainder of this Agreement will not
be affected thereby.
24.Definitions
The terms "assignment," "affiliated person," and "interested person," when used
in this Agreement, will have the respective meanings specified in Section 2(a)
of the 1940 Act. The term "majority of the outstanding shares" means the lesser
of (a) sixty-seven percent (67%) or more of the shares present at a meeting if
more than fifty percent (50%) of these shares are present or represented by
proxy, or (b) more than fifty percent (50%) of the outstanding shares.
25.Counterparts
This Agreement may be executed in one or more counterparts, each of which will
be deemed an original, and all of such counterparts together will constitute
one and the same instrument.
17
IN WITNESS WHEREOF, the parties to this Agreement have executed and
delivered this Agreement as of the date first above written.
BlackRock Advisors, LLC Janus Capital Management LLC
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇
---------------------------------- ---------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇▇
Title: Managing Director Title: Senior Vice President
18