BlackRock Funds II (the "Registrant")
BlackRock Credit Strategies Income Fund (the "Fund")
77Q1(e):
Copies of any new or amended Registrant investment advisory
contracts
Attached please find as an exhibit to sub-item 77Q1(e) of Form
N-SAR, a copy of the Form of Sub-Advisory Agreement between
BlackRock Advisors, LLC and BlackRock (Singapore) Limited with
respect to the Fund.
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Exhibit 77Q1(e)
SUB-ADVISORY AGREEMENT
AGREEMENT dated as of , 2016, between
BlackRock Advisors, LLC, a Delaware limited liability company
("Adviser"), and BlackRock (Singapore) Limited, a company
incorporated under the laws of Singapore ("Sub-Adviser").
WHEREAS, Adviser has agreed to furnish investment advisory
services to BlackRock Credit Strategies Income Fund (formerly,
BlackRock Secured Credit Portfolio) (the "Portfolio") of
BlackRock Funds II, a Massachusetts business trust (the "Fund"),
which is an open-end, management investment company registered
under the Investment Company Act of 1940, as amended ("1940
Act");
WHEREAS, Adviser wishes to retain Sub-Adviser to provide
it with certain sub-advisory services as described below in
connection with Adviser's advisory activities on behalf of the
Portfolio;
WHEREAS, the investment advisory agreement between Adviser
and the Fund dated May 31, 2007, as amended from time to time
(such agreement or the most recent successor agreement between
such parties relating to advisory services to the Portfolio is
referred to herein as the "Advisory Agreement") contemplates
that Adviser may appoint a sub-advisor to perform investment
advisory services with respect to the Portfolio; and
WHEREAS, this Agreement has been approved in accordance
with the provisions of the 1940 Act, and Sub-Adviser is willing
to furnish such services upon the terms and conditions herein
set forth.
NOW, THEREFORE, in consideration of the premises and
mutual covenants herein contained and other good and valuable
consideration, the receipt of which is hereby acknowledged, it
is agreed between the parties hereto as follows:
1. Appointment. Adviser hereby appoints Sub-Adviser to act
as sub-advisor with respect to the Portfolio as provided in
Section 2 of the Advisory Agreement. Sub-Adviser accepts such
appointment and agrees to render the services herein set forth
for the compensation herein provided.
2. Services of Sub-Adviser. Subject to the succeeding
provisions of this section and the oversight and supervision of
Adviser and the Fund's Board of Trustees (the "Board of
Trustees"), Sub-Adviser will perform certain of the day-to-day
operations of the Portfolio which may include one or more of the
following services: (i) act as investment advisor for and manage
the investment and reinvestment of those assets of the Portfolio
as Adviser may from time to time request and in connection
therewith have complete discretion in purchasing and selling
such securities and other assets for the Portfolio and in
voting, exercising consents and exercising all other rights
appertaining to such securities and other assets on behalf of
the Portfolio; (ii) provide investment research and credit
analysis concerning the Portfolio's investments; (iii) assist in
determining what portion of the Portfolio's assets will be
invested in cash and cash equivalents and money market
instruments; (iv) place orders for all purchases and sales of
investments, other than short-term cash equivalents made for the
Portfolio; and (v) maintain the books and records as are
required to support Fund operations (in conjunction with record-
keeping and accounting functions performed by Adviser). At the
request of Adviser, Sub-Adviser will also, subject to the
oversight and supervision of Adviser and the Fund's Board of
Trustees, provide to Adviser or the Fund any of the facilities
and equipment and perform any of the services described in
Section 4 of the Advisory Agreement. In addition, Sub-Adviser
will keep the Fund and Adviser informed of developments
materially affecting the Portfolio and shall, on its own
initiative, furnish to the Fund from time to time whatever
information Sub-Adviser believes appropriate for this purpose.
Sub-Adviser will periodically communicate to Adviser, at such
times as Adviser may direct, information concerning the purchase
and sale of securities for the Portfolio, including (i) the name
of the issuer, (ii) the amount of the purchase or sale, (iii)
the name of the broker or dealer, if any, through which the
purchase or sale will be effected, (iv) the CUSIP number of the
instrument, if any, and (v) such other information as Adviser
may reasonably require for purposes of fulfilling its
obligations to the Fund under the Advisory Agreement. Sub-
Adviser will provide the services rendered by it under this
Agreement in accordance with the Portfolio's investment
objective, policies and restrictions as stated in the
Portfolio's prospectus and statement of additional information
(as currently in effect and as they may be amended or
supplemented from time to time), and the resolutions of the
Fund's Board of Trustees.
3. Other Sub-Adviser Covenants.
(a) In the performance of its duties under this
Agreement, the Sub-Adviser shall at all times conform to, and
act in accordance with, any requirements imposed by: (i) the
provisions of the 1940 Act and the Investment Advisers Act of
1940, as amended (the "Advisers Act") and all applicable Rules
and Regulations of the Securities and Exchange Commission (the
"SEC"); (ii) any other applicable provision of law; (iii) the
provisions of the Declaration of Trust and Amended and Restated
Code of Regulations of the Fund, as such documents are amended
from time to time; (iv) the investment objectives and policies
of the Portfolio as set forth in the Portfolio's Registration
Statement on Form N-1A and/or the resolutions of the Board of
Trustees; and (v) any policies and determinations of the Board
of Trustees of the Fund.
(b) Sub-Adviser further agrees that it:
(i) 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, Sub-Adviser will attempt to
obtain the best price and the most favorable
execution of orders. In placing orders, Sub-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, Sub-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 the Portfolio and other clients of Adviser
or 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
Sub-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 Sub-Adviser
determines in good faith that such commission is
reasonable in terms of either the transaction or the
overall responsibility of Adviser and Sub-Adviser to
the Portfolio and their other clients and that the
total commissions paid by the Portfolio will be
reasonable in relation to the benefits to the
Portfolio over the long-term. In no instance,
however, will the Portfolio's securities be purchased
from or sold to Adviser, Sub-Adviser, the Fund's
distributor or any affiliated person thereof, except
to the extent permitted by the SEC or by applicable
law. It is understood that Sub-Adviser may utilize
affiliates in connection with the placement of orders
with issuers and brokers or dealers, but such use of
affiliates shall not affect the responsibility of
Sub-Adviser to Adviser for such activities. 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, Sub-Adviser may
select brokers and dealers with which it or the Fund
is affiliated;
(ii) will maintain or cause Adviser to maintain
books and records with respect to the Portfolio's
securities transactions and will furnish Adviser and
the Fund's Board of Trustees such periodic and
special reports as they may request;
(iii) will maintain a policy and practice of
conducting its investment advisory services hereunder
independently of the commercial banking operations of
its affiliates. When Sub-Adviser makes investment
recommendations for the 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, Sub-Adviser will not
inquire or take into consideration whether securities
of those customers are held by the Fund; and
(iv) 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 Sub-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.
4. Services Not Exclusive. Nothing in this Agreement shall
prevent the Sub-Adviser or any officer, employee or other
affiliate thereof from acting as investment advisor for any
other person, firm or corporation, or from engaging in any other
lawful activity, and shall not in any way limit or restrict the
Sub-Adviser or any of its officers, employees or agents from
buying, selling or trading any securities for its or their own
accounts or for the accounts of others for whom it or they may
be acting; provided, however, that the Sub-Adviser will
undertake no activities which, in its judgment, will adversely
affect the performance of its obligations under this Agreement.
5. Books and Records. In compliance with the requirements
of Rule 31a-3 under the 1940 Act, Sub-Adviser hereby agrees that
all records which it maintains for the Portfolio are the
property of the Fund and further agrees to surrender promptly to
the Fund any such records upon the Fund's request. Sub-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 (to the extent such books and
records are not maintained by Adviser).
6. Expenses. During the term of this Agreement, Sub-
Adviser will bear all costs and expenses of its employees and
any overhead incurred by Sub-Adviser in connection with its
duties hereunder; provided that the Board of Trustees of the
Fund may approve reimbursement to Sub-Adviser of the pro rata
portion of the salaries, bonuses, health insurance, retirement
benefits and all similar employment costs for the time spent on
Portfolio operations (including, without limitation, compliance
matters) (other than the provision of investment advice and
administrative services required to be provided hereunder) of
all personnel employed by Sub-Adviser who devote substantial
time to Portfolio operations or the operations of other
investment companies advised or sub-advised by Sub-Adviser.
7. Compensation.
(a) Adviser agrees to pay to Sub-Adviser and Sub-
Adviser agrees to accept as full compensation for all services
rendered by Sub-Adviser as such a fee, computed daily and
payable monthly, at the annual rate set forth on Schedule A
attached hereto. 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) For purposes of this Agreement, the net assets of
the Portfolio shall be calculated pursuant to the procedures
adopted by resolutions of the Board of Trustees of the Fund for
calculating the value of the Fund's assets or delegating such
calculations to third parties.
(c) If Adviser waives any or all of its advisory fee
payable under the Advisory Agreement, or reimburses the Fund
pursuant to Section 8(b) of that Agreement, with respect to the
Portfolio, Sub-Adviser will bear its share of the amount of such
waiver or reimbursement by waiving fees otherwise payable to it
hereunder on a proportionate basis to be determined by comparing
the aggregate fees that would otherwise be paid to it hereunder
with respect to the Portfolio to the aggregate fees that would
otherwise be paid by the Fund to Adviser under the Advisory
Agreement with respect to the Portfolio. Adviser shall inform
Sub-Adviser prior to waiving any advisory fees.
8. Limitation of Liability. Sub-Adviser shall not be
liable for any error of judgment or mistake of law or for any
loss suffered by Adviser or by the Fund or the Portfolio 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. As used in
this Section 8, the term "Sub-Adviser" shall include any
affiliates of the Sub-Adviser performing services for the
Portfolio contemplated hereby and partners, directors, officers
and employees of the Sub-Adviser and such affiliates.
The names "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 Secretary of the Commonwealth of
Massachusetts and at the principal office of the Fund, as may be
amended from time to time. 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.
9. Duration and Termination. This Agreement will become
effective as of the date hereof and, unless sooner terminated
with respect to the Portfolio as provided herein, shall continue
in effect with respect to the Portfolio for a period of two
years. Thereafter, if not terminated, this Agreement shall
continue in effect with respect to the Portfolio for successive
periods of 12 months, provided such continuance is specifically
approved at least annually (a) by the 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 a vote
of a majority of the outstanding voting securities of the
Portfolio. Notwithstanding the foregoing, this Agreement may be
terminated with respect to the 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 or Sub-
Adviser on sixty days' written notice, and will terminate
automatically upon any termination of the Advisory Agreement
between the Fund and Adviser. This Agreement will also
immediately terminate in the event of its assignment. (As used
in this Agreement, the terms "majority of the outstanding voting
securities," "interested person" and "assignment" shall have the
same meanings as such terms in the 1940 Act.)
10. 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.
11. 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.
12. 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.
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. To the extent that the
applicable laws of the State of Delaware, or any of the
provisions, conflict with the applicable provisions of the 1940
Act, the latter shall control.
14. 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 ADVISORS, LLC
By:
Name:
Title:
BLACKROCK (SINGAPORE) LIMITED
By:
Name:
Title:
BLACKROCK (SINGAPORE) LIMITED
By:
Name:
Title:
AGREED AND ACCEPTED as of the date first set forth above
BLACKROCK FUNDS II, on behalf of BlackRock Credit Strategies Income Fund
By.
Name:
Title:
Schedule A
Sub-Investment Advisory Fee
Pursuant to Section 7, for that portion of the Portfolio for
which the Sub-Adviser acts as sub-advisor, Adviser shall pay a
fee to Sub-Adviser equal to [ ]% of the advisory fee received
by the Adviser from the Portfolio with respect to such portion,
net of: (i) expense waivers and reimbursements, (ii) expenses
relating to distribution and sales support activities borne by
the Adviser, and (iii) administrative, networking,
recordkeeping, sub-transfer agency and shareholder services
expenses borne by the Adviser.
