INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of May 31, 2007 between BLACKROCK
FUNDS II, a Massachusetts business trust (the "Fund"), and
BLACKROCK ADVISORS, LLC, a Delaware limited liability company
(the "Adviser").
WHEREAS, the Fund is registered as an open-end,
management investment company under the Investment Company Act
of 1940, as amended ("1940 Act"); and
WHEREAS, the Fund desires to retain Adviser to furnish
investment advisory services to the Fund and Adviser is willing
to so furnish such services;
NOW THEREFORE, in consideration of the premises and
mutual covenants herein contained, it is agreed between the
parties hereto as follows:
1. Appointment.
a. The Fund hereby appoints Adviser to act as
investment adviser to the Fund's Portfolios listed on Appendix A
attached hereto (the "Portfolios") for the period and on the
terms set forth in this Agreement. Adviser accepts such
appointment and agrees to furnish the services herein set forth
for the compensation herein provided.
b. In the event that the Fund establishes one
or more portfolios other than the Portfolios named on Appendix A
with respect to which it desires to retain Adviser to act as
investment adviser hereunder, the Fund shall notify Adviser in
writing. If Adviser is willing to render such services under
this Agreement, it shall notify the Fund in writing whereupon,
subject to such approval as may be required pursuant to
Paragraph 10 hereof, such portfolio shall become a "Portfolio"
hereunder and shall be subject to the provisions of this
Agreement to the same extent as the Portfolios named on Appendix
A except to the extent that said provisions (including those
relating to the compensation payable by the Fund to Adviser) are
modified with respect to such portfolio in writing by the Fund
and Adviser at the time.
2. Sub-Advisers. Adviser may from time to time, in
its sole discretion to the extent permitted by applicable law,
appoint one or more sub-advisers, including, without limitation,
affiliates of Adviser, to perform investment advisory services
with respect to the Portfolios; provided, however, that the
compensation of such person or persons shall be paid by Adviser
and that Adviser shall be as fully responsible to the Fund for
the acts and omissions of any sub-adviser as it is for its own
acts and omissions. Adviser may terminate any or all sub-
advisers in its sole discretion at any time to the extent
permitted by applicable law.
3. Delivery of Documents. The Fund has furnished
Adviser with copies, properly certified or authenticated, of
each of the following:
a. Resolutions of the Fund's Board of Trustees
authorizing the appointment of Adviser as the
Portfolios' adviser and approving this Agreement;
b. The Fund's Declaration of Trust as filed
with the State Secretary of the Commonwealth of
Massachusetts and the Boston City Clerk on April 27,
2007;
c. The Fund's Code of Regulations;
d. The Fund's Notification of Registration on
Form N-8A under the 1940 Act as filed with the
Securities and Exchange Commission ("SEC") on May 2,
2007;
e. The Fund's Registration Statement on Form N-
1A under the Securities Act of 1933 and the 1940 Act,
as filed with the SEC on May 2, 2007, and all
amendments thereto (the "Registration Statement"); and
f. The Fund's most recent prospectuses for the
Portfolios (such prospectuses together with the
related statements of additional information, as
currently in effect and all amendments and supplements
thereto, are herein called "Prospectuses").
The Fund will furnish Adviser from time to time with
copies, properly certified or authenticated, of all amendments
of or supplements to the foregoing, if any.
4. Services. Subject to the supervision of the
Fund's Board of Trustees, Adviser will (either directly or
through the sub-advisers employed by it in accordance with
Section 2 hereof) (i) act as investment adviser for and
supervise and manage the investment and reinvestment of the
Portfolios' assets and (ii) provide a continuous investment
program for each of the Portfolios, including investment
research and management with respect to all securities,
investments, cash and cash equivalents in the Portfolios and may
vote, exercise consents and exercise all other rights
appertaining to such securities and other assets on behalf of
the Portfolios. Adviser will (either directly or through the
sub-advisers employed by it in accordance with Paragraph 2
hereof) determine from time to time what securities and other
investments will be purchased, retained or sold by the
Portfolios and will place the daily orders for the purchase or
sale of securities. Adviser will provide the services rendered
by it under this Agreement in accordance with each Portfolio's
investment objective, policies and restrictions as stated in
such Portfolio's Registration Statement and the resolutions of
the Fund's Board of Trustees. Adviser further agrees that it:
a. will comply with (i) the provisions of the
1940 Act and the Investment Advisers Act of 1940, as
amended and all applicable rules and regulations of
the SEC, (ii) any other applicable provision of law
and (iii) the provisions of this Agreement, the
Declaration of Trust and the Code of Regulations of
the Fund as such are amended from time to time;
b. will place orders either directly with the
issuer or with any broker or dealer. Subject to the
other provisions of this paragraph, in placing orders
with brokers and dealers, Adviser will attempt to
obtain the best price and the most favorable execution
of its orders. In placing orders, Adviser will
consider the experience and skill of the firm's
securities traders as well as the firm's financial
responsibility and administrative efficiency.
Consistent with this obligation, Adviser may, subject
to the approval of the Fund's Board of Trustees,
select brokers on the basis of the research,
statistical and pricing services they provide to a
Portfolio and other clients of Adviser or a sub-
adviser. Information and research received from such
brokers will be in addition to, and not in lieu of,
the services required to be performed by Adviser
hereunder. A commission paid to such brokers may be
higher than that which another qualified broker would
have charged for effecting the same transaction,
provided that Adviser determines in good faith that
such commission is reasonable in terms of either the
transaction or the overall responsibility of Adviser
and sub-advisers to the Portfolios and their other
clients and that the total commissions paid by each
Portfolio will be reasonable in relation to the
benefits to such Portfolio over the long-term. In no
instance, however, will a Portfolio's securities be
purchased from or sold to Adviser, the sub-advisers,
the Fund's distributor or any affiliated person
thereof, except to the extent permitted by the SEC or
by applicable law. Subject to the foregoing and the
provisions of the 1940 Act, the Securities Exchange
Act of 1934, as amended, and other applicable
provisions of law, Adviser may select brokers and
dealers with which it or the Fund is affiliated;
c. will maintain books and records with respect
to each Portfolio's securities transactions and will
furnish the Fund's Board of Trustees such periodic and
special reports as the Board may request;
d. will maintain a policy and practice of
conducting its investment advisory services hereunder
independently of the commercial banking operations of
its affiliates. When Adviser makes investment
recommendations for a Portfolio, its investment
advisory personnel will not inquire or take into
consideration whether the issuer of securities
proposed for purchase or sale for the Portfolio's
account are customers of the commercial departments of
its affiliates. In dealing with commercial customers
of its affiliates, Adviser and the sub-advisers will
not inquire or take into consideration whether
securities of those customers are held by the Fund;
and
e. will treat confidentially and as proprietary
information of the Fund all records and other
information relative to the Fund, any of the
Portfolio's and the Fund's prior, current or potential
shareholders, and will not use such records, and
information for any purpose other than performance of
its responsibilities and duties hereunder, except
after prior notification to and approval in writing by
the Fund, which approval shall not be unreasonably
withheld and may not be withheld where Adviser may be
exposed to civil or criminal contempt proceedings for
failure to comply, when requested to divulge such
information by duly constituted authorities, or when
so requested by the Fund.
5. Services Not Exclusive. Adviser's services
hereunder are not deemed to be exclusive, and Adviser shall be
free to render similar services to others so long as its
services under this Agreement are not impaired thereby.
6. Books and Records. In compliance with the
requirements of Rule 31a-3 under the 1940 Act, Adviser hereby
agrees that all records which it maintains for each Portfolio
are the property of the Fund and further agrees to surrender
promptly to the Fund any such records upon the Fund's request.
Adviser further agrees to preserve for the periods prescribed by
Rule 31a-2 under the 1940 Act the records required to be
maintained by Rule 31a-1 under the 1940 Act.
7. Expenses. During the term of this Agreement,
Adviser will bear all costs and expenses of its employees and
any overhead incurred in connection with its duties hereunder
and shall bear the costs of any salaries or trustees fees of any
officers or trustees of the Fund who are affiliated persons (as
defined in the 0000 Xxx) of Adviser; provided that the Board of
Trustees of the Fund may approve reimbursement to Adviser of the
pro rata portion of the salaries, bonuses, health insurance,
retirement benefits and all similar employment costs for the
time spent on Fund operations (including, without limitation,
compliance matters) (other than the provision of investment
advice required to be provided hereunder) of all personnel
employed by Adviser who devote substantial time to Fund
operations or the operations of other investment companies
advised by Adviser.
8. Compensation.
a. For the services provided and the expenses
assumed pursuant to this Agreement, the Fund will pay Adviser
and Adviser will accept as full compensation therefor a fee,
computed daily and payable monthly, at the annual rates set
forth on Appendix A attached hereto. Such fee as is
attributable to each Portfolio shall be a separate charge to
such Portfolio and shall be the several (and neither joint nor
joint and several) obligation of such Portfolio. For any period
less than a month during which this Agreement is in effect, the
fee shall be prorated according to the proportion which such
period bears to a full month of 28, 29, 30 or 31 days, as the
case may be.
b. If in any fiscal year the aggregate expenses
of one or more Portfolios (as defined under the securities
regulations of any state having jurisdiction over the Fund)
exceed the expense limitations of any such state, Adviser will
bear its share of the amount of such excess in proportion to the
aggregate fees otherwise payable to it hereunder and to the
Fund's co-administrators under their administration agreements
with the Fund. The obligation of Adviser to reimburse the Fund
under this Paragraph 8(b) is limited in any fiscal year to the
amount of its fees otherwise payable hereunder attributable to
the Portfolios for such fiscal year, provided; however, that
notwithstanding the foregoing, Adviser shall reimburse the Fund
for the full amount of its share of any such excess expenses
regardless of the amount of fees otherwise payable to it during
such fiscal year to the extent that the securities regulations
of any state having jurisdiction over the Fund so require. Such
expense reimbursement, if any, will be estimated, reconciled and
paid on a monthly basis.
c. For purposes of the fee rates set forth on
Appendix A, the net assets of the Portfolios shall be calculated
pursuant to the procedures adopted by resolutions of the Fund's
Board of Trustees for calculating the value of the Fund's assets
or delegating such calculations to third parties.
9. Limitation of Liability. Adviser shall not be
liable for any error of judgment or mistake of law or for any
loss suffered by the Fund in connection with the performance of
this Agreement, except a loss resulting from a breach of
fiduciary duty with respect to the receipt of compensation for
services or a loss resulting from willful misfeasance, bad faith
or gross negligence on its part in the performance of its duties
or from reckless disregard by it of its obligations or duties
under this Agreement.
10. Duration and Termination. This Agreement will
become effective as of the date hereof with respect to each
Portfolio listed on Appendix A and, with respect to any
additional Portfolio, on the date of receipt by the Fund of
notice from Adviser in accordance with Section 1(b) hereof that
Adviser is willing to serve as investment adviser with respect
to such Portfolio, provided that this Agreement (as supplemented
by the terms specified in any notice and agreement pursuant to
Section 1(b) hereof) shall have been approved in accordance with
the requirements of the 1940 Act, and, unless sooner terminated
as provided herein, shall continue in effect with respect to
each such Portfolio until March 31, 2009. Thereafter, if not
terminated, this Agreement shall continue in effect with respect
to the particular Portfolio for successive annual periods ending
on March 31, provided such continuance is specifically approved
at least annually (a) by vote of a majority of those members of
the Fund's Board of Trustees who are not interested persons of
any party to this Agreement, cast in person at a meeting called
for the purpose of voting on such approval, and (b) by the
Fund's Board of Trustees or by vote of a majority of the
outstanding voting securities of such Portfolio.
Notwithstanding the foregoing, this Agreement may be terminated
with respect to any Portfolio at any time, without the payment
of any penalty, by the Fund (by vote of the Fund's Board of
Trustees or by vote of a majority of the outstanding voting
securities of the Portfolio), or by Adviser on sixty days'
written notice. This Agreement will immediately terminate in
the event of its assignment. (As used in this Agreement, the
terms "majority of the outstanding voting securities,"
"interested persons" and "assignment" shall have the same
meanings as such terms in the 1940 Act.)
11. Notices. Any notice under this Agreement shall
be in writing to the other party at such address as the other
party may designate from time to time for the receipt of such
notice and shall be deemed to be received on the earlier of the
date actually received or on the fourth day after the postmark
if such notice is mailed first class postage prepaid.
12. Amendment of this Agreement. 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 which enforcement of the change, waiver, discharge or
termination is sought. Any amendment of this Agreement shall be
subject to the 1940 Act.
13. Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of
Delaware for contracts to be performed entirely therein without
reference to choice of law principles thereof and in accordance
with the applicable provisions of the 1940 Act.
14. Use of the Name BlackRock. Adviser has
consented to the use by the Fund of the name or identifying word
"BlackRock" in the name of the Fund and the Portfolios. Such
consent is conditioned upon the employment of Adviser as the
investment adviser to the Portfolios. The name or identifying
word "BlackRock" may be used from time to time in other
connections and for other purposes by Adviser and any of its
affiliates. Adviser may require the Fund to cease using
"BlackRock" in the name of the Fund and the Portfolios if the
Fund (or any Portfolio) ceases to employ, for any reason,
Adviser, any successor thereto or any affiliate thereof as
investment adviser of the Portfolios.
15. Release. "BlackRock Funds II" and "Trustees of
BlackRock Funds II" refer respectively to the trust created and
the Trustees, as trustees but not individually or personally,
acting from time to time under a Declaration of Trust dated
April 26, 2007, which is hereby referred to and a copy of which
is on file at the office of the State Secretary of the
Commonwealth of Massachusetts and at the principal office of the
Fund. The obligations of "BlackRock Funds II" entered into in
the name or on behalf thereof by any of the Trustees, officers,
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.
16. Miscellaneous. The captions in this Agreement
are included for convenience of reference only and in no way
define or delimit any of the provisions hereof or otherwise
affect their construction or effect. 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. This Agreement shall be binding
on, and shall inure to the benefit of, the parties hereto and
their respective successors.
17. Counterparts. This Agreement may be executed in
counterparts by the parties hereto, each of which shall
constitute an original counterpart, and all of which, together,
shall constitute one Agreement.
IN WITNESS WHEREOF, the parties hereto have caused
this instrument to be executed by their officers designated
below as of the day and year first above written.
BLACKROCK FUNDS II
By:__________________________
Name:
Title:
BLACKROCK ADVISORS, LLC
By:__________________________
Name:
Title:
[PAGE BREAK]
Appendix A
Portfolios and Fees
The information will be in the following order:
Portfolio
Advisory Fee (as a percentage of average daily net assets)
Enhanced Income Portfolio 0.400%
Low Duration Bond Portfolio
First $1 billion 0.500%
$1 billion - $2 billion 0.450%
$2 billion - $3 billion 0.425%
Over $3 billion 0.400%
Intermediate Government Bond Portfolio
First $1 billion 0.500%
$1 billion - $2 billion 0.450%
$2 billion - $3 billion 0.425%
Over $3 billion 0.400%
Intermediate Bond Portfolio II
First $1 billion 0.500%
$1 billion - $2 billion 0.450%
$2 billion - $3 billion 0.425%
Over $3 billion 0.400%
Total Return Portfolio II
First $1 billion 0.500%
$1 billion - $2 billion 0.450%
$2 billion - $3 billion 0.425%
Over $3 billion 0.400%
Total Return Portfolio
First $1 billion 0.500%
$1 billion - $2 billion 0.450%
$2 billion - $3 billion 0.425%
Over $3 billion 0.400%
Government Income Portfolio
First $1 billion 0.500%
$1 billion - $2 billion 0.450%
$2 billion - $3 billion 0.425%
Over $3 billion 0.400%
Inflation Protected Bond Portfolio
First $1 billion 0.400%
$1 billion - $2 billion 0.375%
$2 billion - $3 billion 0.350%
Over $3 billion 0.325%
GNMA Portfolio
First $1 billion 0.550%
$1 billion - $2 billion 0.500%
$2 billion - $3 billion 0.475%
Over $3 billion 0.450%
Managed Income Portfolio
First $1 billion 0.500%
$1 billion - $2 billion 0.450%
$2 billion - $3 billion 0.425%
Over $3 billion 0.400%
International Bond Portfolio
First $1 billion 0.550%
$1 billion - $2 billion 0.500%
$2 billion - $3 billion 0.475%
Over $3 billion 0.450%
High Yield Bond Portfolio
First $1 billion 0.500%
$1 billion - $2 billion 0.450%
$2 billion - $3 billion 0.425%
Over $3 billion 0.400%
AMT-Free Municipal Bond Portfolio
First $1 billion 0.500%
$1 billion - $2 billion 0.450%
$2 billion - $3 billion 0.425%
Over $3 billion 0.400%
Delaware Municipal Bond Portfolio
First $1 billion 0.550%
$1 billion - $2 billion 0.500%
$2 billion - $3 billion 0.475%
Over $3 billion 0.450%
Ohio Municipal Bond Portfolio
First $1 billion 0.500%
$1 billion - $2 billion 0.450%
$2 billion - $3 billion 0.425%
Over $3 billion 0.400%
Kentucky Municipal Bond Portfolio
First $1 billion 0.550%
$1 billion - $2 billion 0.500%
$2 billion - $3 billion 0.475%
Over $3 billion 0.450%
Long Duration Bond Portfolio
First $1 billion 0.500%
$1 billion - $2 billion 0.450%
$2 billion - $3 billion 0.425%
Over $3 billion 0.400%
Conservative Prepared Portfolio. 0
Moderate Prepared Portfolio 0
Growth Prepared Portfolio 0
Aggressive Growth Prepared Portfolio...............0
Prepared Portfolio 2010.Prepared Portfolio 2015....0
Prepared Portfolio 2020 0
Prepared Portfolio 2025 0
Prepared Portfolio 2030 0
Prepared Portfolio 2035 0
Prepared Portfolio 2040 0
Prepared Portfolio 2045 0
Prepared Portfolio 2050 0
A-3
