Document:

Exhibit 4(c)

                        SUB-INVESTMENT ADVISORY AGREEMENT

            AGREEMENT dated September 29, 2006, between BlackRock Advisors, LLC,
a Delaware limited liability company (the "Advisor"), and BlackRock Investment
Management, LLC, a Delaware limited liability company (the "Sub-Advisor").

            WHEREAS, the Advisor has agreed to furnish investment advisory
services to BlackRock Balanced Capital V.I. Fund, BlackRock Basic Value V.I.
Fund, BlackRock Fundamental Growth V.I. Fund, BlackRock Global Growth V.I. Fund,
BlackRock Global Allocation V.I. Fund, BlackRock S&P 500 Index V.I. Fund,
BlackRock Large Cap Core V.I. Fund, BlackRock Large Cap Growth V.I. Fund,
BlackRock Large Cap Value V.I. Fund, BlackRock Value Opportunities V.I. Fund and
BlackRock Utilities and Telecommunications V.I. Fund (each a "Fund" and together
the "Funds"), series of BlackRock Variable Series Funds, Inc. (the
"Corporation"), an open-end management investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act");

            WHEREAS, the Advisor wishes to retain the Sub-Advisor to provide it
with certain sub-advisory services as described below in connection with
Advisor's advisory activities on behalf of the Funds;

            WHEREAS, the advisory agreements between the Advisor and the
Corporation, dated September 29, 2006 (such agreements or the most recent
successor agreements between such parties relating to advisory services to the
Corporation is referred to herein as the "Advisory Agreements") contemplates
that the Advisor may sub-contract investment advisory services with respect to
the Funds to a sub-advisor pursuant to a sub-advisory agreement agreeable to the
Corporation and approved in accordance with the provisions of the 1940 Act; and

            WHEREAS, this Agreements has been approved in accordance with the
provisions of the 1940 Act, and the Sub-Advisor is willing to furnish such
services upon the terms and conditions herein set forth; and

            NOW, THEREFORE, in consideration of the mutual premises and
covenants herein contained and other good and valuable consideration, the
receipt of which is hereby acknowledged, it is agreed by and between the parties
hereto as follows:

      1. Appointment. The Advisor hereby appoints the Sub-Advisor to act as
sub-advisor with respect to the Funds and the Sub-Advisor accepts such
appointment and agrees to render the services herein set forth for the
compensation herein provided.

      2. Services of the Sub-Advisor. Subject to the succeeding provisions of
this section, the oversight and supervision of the Advisor and the direction and
control of the Corporation's Board of Directors, the Sub-Advisor will perform
certain of the day-to-day operations of the Funds, which may include one or more
of the following services, at the request of the Advisor: (a) acting as
investment advisor for and managing the investment and reinvestment of those
assets of the Funds as the Advisor may from time to time request and in
connection therewith have complete discretion in purchasing and selling such
securities and other assets for the Funds and in voting, exercising consents and
exercising all other rights appertaining to such securities

<PAGE>

and other assets on behalf of the Funds; (b) arranging, subject to the
provisions of paragraph 3 hereof, for the purchase and sale of securities and
other assets of the Funds; (c) providing investment research and credit analysis
concerning the Funds' investments, (d) assist the Advisor in determining what
portion of the Funds' assets will be invested in cash, cash equivalents and
money market instruments, (e) placing orders for all purchases and sales of such
investments made for the Funds, and (f) maintaining the books and records as are
required to support Fund investment operations. At the request of the Advisor,
the Sub-Advisor will also, subject to the oversight and supervision of the
Advisor and the direction and control of the Corporation's Board of Directors,
provide to the Advisor or the Funds any of the facilities and equipment and
perform any of the services described in Section 3 of the Advisory Agreements.
In addition, the Sub-Advisor will keep the Funds and the Advisor informed of
developments materially affecting the Funds and shall, on its own initiative,
furnish to the Funds from time to time whatever information the Sub-Advisor
believes appropriate for this purpose. The Sub-Advisor will periodically
communicate to the Advisor, at such times as the Advisor may direct, information
concerning the purchase and sale of securities for the Funds, including: (a) the
name of the issuer, (b) the amount of the purchase or sale, (c) the name of the
broker or dealer, if any, through which the purchase or sale is effected, (d)
the CUSIP number of the instrument, if any, and (e) such other information as
the Advisor may reasonably require for purposes of fulfilling its obligations to
the Funds under the Advisory Agreements. The Sub-Advisor will provide the
services rendered by it under this Agreement in accordance with each Fund's
investment objectives, policies and restrictions (as currently in effect and as
they may be amended or supplemented from time to time) as stated in the Funds'
Prospectus and Statement of Additional Information and the resolutions of the
Corporation's Board of Directors.

      3. Covenants. (a) In the performance of its duties under this Agreement,
the Sub-Advisor 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 Agreement and
Charter and By-Laws of the Corporation, as such documents are amended from time
to time; (iv) the investment objectives and policies of the Funds as set forth
in its Registration Statement on Form N-1A and/or the resolutions of the Board
of Directors; and (v) any policies and determinations of the Board of the
Directors of the Corporation and

            (b) In addition, the Sub-Advisor will:

                  (i) 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, the Sub-Advisor will attempt to obtain the best
price and the most favorable execution of its orders. In placing orders, the
Sub-Advisor 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, the Sub-Advisor may select brokers
on the basis of the research, statistical and pricing services they provide to
the Funds and other clients of the Advisor or the Sub-Advisor. Information and
research received from such brokers will be in addition to, and not in lieu of,
the services required to be performed by the Sub-Advisor 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 the
Sub-Advisor determines in

                                      -2-
<PAGE>

good faith that such commission is reasonable in terms either of the transaction
or the overall responsibility of the Advisor and the Sub-Advisor to the Funds
and their other clients and that the total commissions paid by each Fund will be
reasonable in relation to the benefits to the Fund over the long-term. 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, the Advisor may
select brokers and dealers with which it or the Corporation is affiliated;

                  (ii) maintain books and records with respect to the Funds'
securities transactions and will render to the Advisor and the Corporation's
Board of Directors such periodic and special reports as they may request;

                  (iii) maintain a policy and practice of conducting its
investment advisory services hereunder independently of the commercial banking
operations of its affiliates. When the Sub-Advisor makes investment
recommendations for the Funds, its investment advisory personnel will not
inquire or take into consideration whether the issuer of securities proposed for
purchase or sale for each Fund's account are customers of the commercial
department of its affiliates; and

                  (iv) treat confidentially and as proprietary information of
the Funds all records and other information relative to the Funds, and the
Funds' 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 each Fund, which approval shall not be unreasonably withheld and may not be
withheld where the Sub-Advisor 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 Funds.

      4. Services Not Exclusive. Nothing in this Agreement shall prevent the
Sub-Advisor 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-Advisor 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-Advisor 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, the Sub-Advisor hereby agrees that all records which it
maintains for the Corporation are the property of the Corporation and further
agrees to surrender promptly to the Corporation any such records upon the
Corporation's request. The Sub-Advisor 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 the Advisor).

      6. Expenses. During the term of this Agreement, the Sub-Advisor will bear
all costs and expenses of its employees and any overhead incurred by the
Sub-Advisor in connection with its duties hereunder; provided that the Board of
Directors of the Corporation may approve

                                      -3-
<PAGE>

reimbursement to the Sub-Advisor 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 and administrative
services required to be provided hereunder) of all personnel employed by the
Sub-Advisor who devote substantial time to the Fund operations or the operations
of other investment companies advised or sub-advised by the Sub-Advisor.

      7. Compensation.

            (a) The Advisor agrees to pay to the Sub-Advisor and the Sub-Advisor
agrees to accept as full compensation for all services rendered by the
Sub-Advisor as such, a monthly fee in arrears at an annual rate equal to the
amount set forth in Schedule A 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 Funds
shall be calculated pursuant to the procedures adopted by resolutions of the
Directors of the Corporation for calculating the value of each Fund's assets or
delegating such calculations to third parties.

      8. Indemnity.

            (a) The Corporation hereby agrees to indemnify the Sub-Advisor and
each of the Sub-Advisor's directors, officers, employees, agents, associates and
controlling persons and the directors, partners, members, officers, employees
and agents thereof (including any individual who serves at the Sub-Advisor's
request as director, officer, partner, member, trustee or the like of another
entity) (each such person being an "Indemnitee") against any liabilities and
expenses, including amounts paid in satisfaction of judgments, in compromise or
as fines and penalties, and counsel fees (all as provided in accordance with
applicable state law) reasonably incurred by such Indemnitee in connection with
the defense or disposition of any action, suit or other proceeding, whether
civil or criminal, before any court or administrative or investigative body in
which such Indemnitee may be or may have been involved as a party or otherwise
or with which such Indemnitee may be or may have been threatened, while acting
in any capacity set forth herein or thereafter by reason of such Indemnitee
having acted in any such capacity, except with respect to any matter as to which
such Indemnitee shall have been adjudicated not to have acted in good faith in
the reasonable belief that such Indemnitee's action was in the best interest of
the Corporation and furthermore, in the case of any criminal proceeding, so long
as such Indemnitee had no reasonable cause to believe that the conduct was
unlawful; provided, however, that (1) no Indemnitee shall be indemnified
hereunder against any liability to the Corporation or its shareholders or any
expense of such Indemnitee arising by reason of (i) willful misfeasance, (ii)
bad faith, (iii) gross negligence or (iv) reckless disregard of the duties
involved in the conduct of such Indemnitee's position (the conduct referred to
in such clauses (i) through (iv) being sometimes referred to herein as
"disabling conduct"), (2) as to any matter disposed of by settlement or a
compromise payment by such Indemnitee, pursuant to a consent decree or
otherwise, no indemnification either for said payment or for any other expenses
shall be provided unless there has been a determination that such settlement or
compromise is in the best interests of the Corporation and that such Indemnitee
appears to have acted in good faith in the reasonable

                                      -4-
<PAGE>

belief that such Indemnitee's action was in the best interest of the Corporation
and did not involve disabling conduct by such Indemnitee and (3) with respect to
any action, suit or other proceeding voluntarily prosecuted by any Indemnitee as
plaintiff, indemnification shall be mandatory only if the prosecution of such
action, suit or other proceeding by such Indemnitee was authorized by a majority
of the full Board of Directors of the Corporation.

            (b) The Corporation shall make advance payments in connection with
the expenses of defending any action with respect to which indemnification might
be sought hereunder if the Corporation receives a written affirmation of the
Indemnitee's good faith belief that the standard of conduct necessary for
indemnification has been met and a written undertaking to reimburse the
Corporation unless it is subsequently determined that such Indemnitee is
entitled to such indemnification and if the Directors of the Corporation
determine that the facts then known to them would not preclude indemnification.
In addition, at least one of the following conditions must be met: (A) the
Indemnitee shall provide a security for such Indemnitee-undertaking, (B) the
Corporation shall be insured against losses arising by reason of any unlawful
advance, or (C) a majority of a quorum consisting of Directors of the
Corporation who are neither "interested persons" of the Corporation (as defined
in Section 2(a)(19) of the 1940 Act) nor parties to the proceeding
("Disinterested Non-Party Directors") or an independent legal counsel in a
written opinion, shall determine, based on a review of readily available facts
(as opposed to a full trial-type inquiry), that there is reason to believe that
the Indemnitee ultimately will be found entitled to indemnification.

            (c) All determinations with respect to indemnification hereunder
shall be made (1) by a final decision on the merits by a court or other body
before whom the proceeding was brought that such Indemnitee is not liable by
reason of disabling conduct, or (2) in the absence of such a decision, by (i) a
majority vote of a quorum of the Disinterested Non-Party Directors of the
Corporation, or (ii) if such a quorum is not obtainable or even, if obtainable,
if a majority vote of such quorum so directs, independent legal counsel in a
written opinion. All determinations that advance payments in connection with the
expense of defending any proceeding shall be authorized shall be made in
accordance with the immediately preceding clause (2) above.

            The rights accruing to any Indemnitee under these provisions shall
not exclude any other right to which such Indemnitee may be lawfully entitled.

      9. Limitation on Liability. The Sub-Advisor will not be liable for any
error of judgment or mistake of law or for any loss suffered by the Advisor or
by the Funds 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 duties under this Agreement.

      10. Duration and Termination. This Agreement shall become effective as of
the date hereof and, unless sooner terminated with respect to the Funds as
provided herein, shall continue in effect for a period of two years. Thereafter,
if not terminated, this Agreement shall continue in effect with respect to the
Funds for successive periods of 12 months, provided such continuance is
specifically approved at least annually by both (a) the vote of a majority of
the Corporation's

                                      -5-
<PAGE>

Board of Directors or a vote of a majority of the outstanding voting securities
of each Fund at the time outstanding and entitled to vote and (b) by the vote of
a majority of the Directors, who are not parties to this Agreement or interested
persons (as such term is defined in the 1940 Act) of any such party, cast in
person at a meeting called for the purpose of voting on such approval.
Notwithstanding the foregoing, this Agreement may be terminated by the
Corporation or the Advisor at any time, without the payment of any penalty, upon
giving the Sub-Advisor 60 days' notice (which notice may be waived by the
Sub-Advisor), provided that such termination by the Corporation or the Advisor
shall be directed or approved by the vote of a majority of the Directors of the
Trust in office at the time or by the vote of the holders of a majority of the
voting securities of each Fund at the time outstanding and entitled to vote, or
by the Sub-Advisor on 60 days' written notice (which notice may be waived by the
Corporation and the Advisor), and will terminate automatically upon any
termination of the Advisory Agreement between the Corporation and the Advisor.
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
of 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. This Agreement may be amended by the
parties only if such amendment is specifically approved by the vote of the Board
of Directors of the Corporation, including a majority of those Directors 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, where
required by the 1940 Act, by a vote of a majority of the outstanding voting
securities of each Fund.

      13. 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.

      14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York 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 New York, or any of the provisions, conflict
with the applicable provisions of the 1940 Act, the latter shall control.

      15. 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.

                                      -6-
<PAGE>

            IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be executed by their duly authorized officers designated below as of the day
and year first above written.

                                            BLACKROCK ADVISORS, LLC

                                            By: ________________________________
                                                Name:  Donald C. Burke
                                                Title: Managing Director

                                            BLACKROCK INVESTMENT MANAGEMENT, LLC

                                            By: ________________________________
                                                Name:
                                                Title:
Agreed and Accepted:

BLACKROCK VARIABLE SERIES FUNDS, INC.

By: _________________________________
   Name:  Donald C. Burke
   Title: Vice President & Treasurer

                                      -7-
<PAGE>

                                   Schedule A

                           Sub-Investment Advisory Fee

<TABLE>
<CAPTION>
                                                                               Percentage of the monthly advisory fee
Fund                                                                            received by the Advisor from the Fund
----                                                                            -------------------------------------
<S>                                                                                            <C>
BlackRock Balanced Capital V.I. Fund                                                           37.00%
BlackRock Basic Value V.I. Fund                                                                74.00%
BlackRock Fundamental Growth V.I. Fund                                                         74.00%
BlackRock Global Growth V.I. Fund                                                              74.00%
BlackRock Global Allocation V.I. Fund                                                          37.00%
BlackRock S&P 500 Index V.I. Fund                                                              74.00%
BlackRock Large Cap Core V.I. Fund                                                             74.00%
BlackRock Large Cap Growth V.I. Fund                                                           74.00%
BlackRock Large Cap Value V.I. Fund                                                            74.00%
BlackRock Value Opportunities V.I. Fund                                                        74.00%
BlackRock Utilities and Telecommunications V.I. Fund                                           74.00%
</TABLE>

                                      -8-Exhibit 4(d)

                        SUB-INVESTMENT ADVISORY AGREEMENT

            AGREEMENT dated September 29, 2006, between BlackRock Advisors, LLC,
a Delaware limited liability company (the "Advisor"), and BlackRock Financial
Management, Inc., a Maryland corporation (the "Sub-Advisor").

            WHEREAS, the Advisor has agreed to furnish investment advisory
services to BlackRock Balanced Capital V.I. Fund, BlackRock Bond V.I. Fund,
BlackRock Government Income V.I. Fund and BlackRock High Income V.I. Fund (each
a "Fund" and together the "Funds"), series of BlackRock Variable Series Funds,
Inc. (the "Corporation"), an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act");

            WHEREAS, the Advisor wishes to retain the Sub-Advisor to provide it
with certain sub-advisory services as described below in connection with
Advisor's advisory activities on behalf of the Funds;

            WHEREAS, the advisory agreement between the Advisor and the
Corporation, dated September 29, 2006 (such agreement or the most recent
successor agreement between such parties relating to advisory services to the
Corporation is referred to herein as the "Advisory Agreement") contemplates that
the Advisor may sub-contract investment advisory services with respect to the
Funds to a sub-advisor pursuant to a sub-advisory agreement agreeable to the
Corporation and approved in accordance with the provisions of the 1940 Act; and

            WHEREAS, this Agreement has been approved in accordance with the
provisions of the 1940 Act, and the Sub-Advisor is willing to furnish such
services upon the terms and conditions herein set forth; and

            NOW, THEREFORE, in consideration of the mutual premises and
covenants herein contained and other good and valuable consideration, the
receipt of which is hereby acknowledged, it is agreed by and between the parties
hereto as follows:

      1. Appointment. The Advisor hereby appoints the Sub-Advisor to act as
sub-advisor with respect to the Funds and the Sub-Advisor accepts such
appointment and agrees to render the services herein set forth for the
compensation herein provided.

      2. Services of the Sub-Advisor. Subject to the succeeding provisions of
this section, the oversight and supervision of the Advisor and the direction and
control of the Corporation's Board of Directors, the Sub-Advisor will perform
certain of the day-to-day operations of the Funds, which may include one or more
of the following services, at the request of the Advisor: (a) acting as
investment advisor for and managing the investment and reinvestment of those
assets of the Funds as the Advisor may from time to time request and in
connection therewith have complete discretion in purchasing and selling such
securities and other assets for the Funds and in voting, exercising consents and
exercising all other rights appertaining to such securities and other assets on
behalf of the Funds; (b) arranging, subject to the provisions of paragraph 3
hereof, for the purchase and sale of securities and other assets of the Funds;
(c) providing investment research and credit analysis concerning the Funds'
investments, (d) assist the Advisor

<PAGE>

in determining what portion of the Funds' assets will be invested in cash, cash
equivalents and money market instruments, (e) placing orders for all purchases
and sales of such investments made for the Funds, and (f) maintaining the books
and records as are required to support Fund investment operations. At the
request of the Advisor, the Sub-Advisor will also, subject to the oversight and
supervision of the Advisor and the direction and control of the Corporation's
Board of Directors, provide to the Advisor or the Funds any of the facilities
and equipment and perform any of the services described in Section 3 of the
Advisory Agreement. In addition, the Sub-Advisor will keep the Funds and the
Advisor informed of developments materially affecting the Funds and shall, on
its own initiative, furnish to the Funds from time to time whatever information
the Sub-Advisor believes appropriate for this purpose. The Sub-Advisor will
periodically communicate to the Advisor, at such times as the Advisor may
direct, information concerning the purchase and sale of securities for the
Funds, including: (a) the name of the issuer, (b) the amount of the purchase or
sale, (c) the name of the broker or dealer, if any, through which the purchase
or sale is effected, (d) the CUSIP number of the instrument, if any, and (e)
such other information as the Advisor may reasonably require for purposes of
fulfilling its obligations to the Funds under the Advisory Agreement. The
Sub-Advisor will provide the services rendered by it under this Agreement in
accordance with each Fund's investment objectives, policies and restrictions (as
currently in effect and as they may be amended or supplemented from time to
time) as stated in the Funds' Prospectus and Statement of Additional Information
and the resolutions of the Corporation's Board of Directors.

      3. Covenants. (a) In the performance of its duties under this Agreement,
the Sub-Advisor 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 Agreement and
Charter and By-Laws of the Corporation, as such documents are amended from time
to time; (iv) the investment objectives and policies of the Funds as set forth
in its Registration Statement on Form N-1A and/or the resolutions of the Board
of Directors; and (v) any policies and determinations of the Board of the
Directors of the Corporation and

            (b) In addition, the Sub-Advisor will:

                  (i) 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, the Sub-Advisor will attempt to obtain the best
price and the most favorable execution of its orders. In placing orders, the
Sub-Advisor 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, the Sub-Advisor may select brokers
on the basis of the research, statistical and pricing services they provide to
the Funds and other clients of the Advisor or the Sub-Advisor. Information and
research received from such brokers will be in addition to, and not in lieu of,
the services required to be performed by the Sub-Advisor 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 the
Sub-Advisor determines in good faith that such commission is reasonable in terms
either of the transaction or the overall responsibility of the Advisor and the
Sub-Advisor to the Funds and their other clients and that the total commissions
paid by each Fund will be reasonable in relation to the benefits to the Fund

                                      -2-
<PAGE>

over the long-term. 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, the Advisor may select brokers and dealers with which it or the
Corporation is affiliated;

                  (ii) maintain books and records with respect to the Funds'
securities transactions and will render to the Advisor and the Corporation's
Board of Directors such periodic and special reports as they may request;

                  (iii) maintain a policy and practice of conducting its
investment advisory services hereunder independently of the commercial banking
operations of its affiliates. When the Sub-Advisor makes investment
recommendations for the Funds, its investment advisory personnel will not
inquire or take into consideration whether the issuer of securities proposed for
purchase or sale for each Fund's account are customers of the commercial
department of its affiliates; and

                  (iv) treat confidentially and as proprietary information of
the Funds all records and other information relative to the Funds, and the
Funds' 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 each Fund, which approval shall not be unreasonably withheld and may not be
withheld where the Sub-Advisor 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 Funds.

      4. Services Not Exclusive. Nothing in this Agreement shall prevent the
Sub-Advisor 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-Advisor 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-Advisor 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, the Sub-Advisor hereby agrees that all records which it
maintains for the Corporation are the property of the Corporation and further
agrees to surrender promptly to the Corporation any such records upon the
Corporation's request. The Sub-Advisor 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 the Advisor).

      6. Expenses. During the term of this Agreement, the Sub-Advisor will bear
all costs and expenses of its employees and any overhead incurred by the
Sub-Advisor in connection with its duties hereunder; provided that the Board of
Directors of the Corporation may approve reimbursement to the Sub-Advisor 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

                                      -3-
<PAGE>

investment advice and administrative services required to be provided hereunder)
of all personnel employed by the Sub-Advisor who devote substantial time to the
Fund operations or the operations of other investment companies advised or
sub-advised by the Sub-Advisor.

      7. Compensation.

            (a) The Advisor agrees to pay to the Sub-Advisor and the Sub-Advisor
agrees to accept as full compensation for all services rendered by the
Sub-Advisor as such, a monthly fee in arrears at an annual rate equal to the
amount set forth in Schedule A 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 Funds
shall be calculated pursuant to the procedures adopted by resolutions of the
Directors of the Corporation for calculating the value of each Fund's assets or
delegating such calculations to third parties.

      8. Indemnity.

            (a) The Funds hereby agrees to indemnify the Sub-Advisor and each of
the Sub-Advisor's directors, officers, employees, agents, associates and
controlling persons and the directors, partners, members, officers, employees
and agents thereof (including any individual who serves at the Sub-Advisor's
request as director, officer, partner, member, trustee or the like of another
entity) (each such person being an "Indemnitee") against any liabilities and
expenses, including amounts paid in satisfaction of judgments, in compromise or
as fines and penalties, and counsel fees (all as provided in accordance with
applicable state law) reasonably incurred by such Indemnitee in connection with
the defense or disposition of any action, suit or other proceeding, whether
civil or criminal, before any court or administrative or investigative body in
which such Indemnitee may be or may have been involved as a party or otherwise
or with which such Indemnitee may be or may have been threatened, while acting
in any capacity set forth herein or thereafter by reason of such Indemnitee
having acted in any such capacity, except with respect to any matter as to which
such Indemnitee shall have been adjudicated not to have acted in good faith in
the reasonable belief that such Indemnitee's action was in the best interest of
the Corporation and furthermore, in the case of any criminal proceeding, so long
as such Indemnitee had no reasonable cause to believe that the conduct was
unlawful; provided, however, that (1) no Indemnitee shall be indemnified
hereunder against any liability to the Corporation or a Fund or its shareholders
or any expense of such Indemnitee arising by reason of (i) willful misfeasance,
(ii) bad faith, (iii) gross negligence or (iv) reckless disregard of the duties
involved in the conduct of such Indemnitee's position (the conduct referred to
in such clauses (i) through (iv) being sometimes referred to herein as
"disabling conduct"), (2) as to any matter disposed of by settlement or a
compromise payment by such Indemnitee, pursuant to a consent decree or
otherwise, no indemnification either for said payment or for any other expenses
shall be provided unless there has been a determination that such settlement or
compromise is in the best interests of a Fund and that such Indemnitee appears
to have acted in good faith in the reasonable belief that such Indemnitee's
action was in the best interest of a Fund and did not involve disabling conduct
by such Indemnitee and (3) with respect to any action, suit or other proceeding
voluntarily prosecuted by any Indemnitee as plaintiff, indemnification shall be
mandatory only if

                                      -4-
<PAGE>

the prosecution of such action, suit or other proceeding by such Indemnitee was
authorized by a majority of the full Board of Directors of the Corporation.

            (b) The Funds shall make advance payments in connection with the
expenses of defending any action with respect to which indemnification might be
sought hereunder if the Corporation receives a written affirmation of the
Indemnitee's good faith belief that the standard of conduct necessary for
indemnification has been met and a written undertaking to reimburse a Fund
unless it is subsequently determined that such Indemnitee is entitled to such
indemnification and if the Directors of the Corporation determine that the facts
then known to them would not preclude indemnification. In addition, at least one
of the following conditions must be met: (A) the Indemnitee shall provide a
security for such Indemnitee-undertaking, (B) the Corporation shall be insured
against losses arising by reason of any unlawful advance, or (C) a majority of a
quorum consisting of Directors of the Corporation who are neither "interested
persons" of the Corporation (as defined in Section 2(a)(19) of the 1940 Act) nor
parties to the proceeding ("Disinterested Non-Party Directors") or an
independent legal counsel in a written opinion, shall determine, based on a
review of readily available facts (as opposed to a full trial-type inquiry),
that there is reason to believe that the Indemnitee ultimately will be found
entitled to indemnification.

            (c) All determinations with respect to indemnification hereunder
shall be made (1) by a final decision on the merits by a court or other body
before whom the proceeding was brought that such Indemnitee is not liable by
reason of disabling conduct, or (2) in the absence of such a decision, by (i) a
majority vote of a quorum of the Disinterested Non-Party Directors of the
Corporation, or (ii) if such a quorum is not obtainable or even, if obtainable,
if a majority vote of such quorum so directs, independent legal counsel in a
written opinion. All determinations that advance payments in connection with the
expense of defending any proceeding shall be authorized shall be made in
accordance with the immediately preceding clause (2) above.

            The rights accruing to any Indemnitee under these provisions shall
not exclude any other right to which such Indemnitee may be lawfully entitled.

      9. Limitation on Liability. The Sub-Advisor will not be liable for any
error of judgment or mistake of law or for any loss suffered by the Advisor or
by the Funds 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 duties under this Agreement.

      10. Duration and Termination. This Agreement shall become effective as of
the date hereof and, unless sooner terminated with respect to the Funds as
provided herein, shall continue in effect for a period of two years. Thereafter,
if not terminated, this Agreement shall continue in effect with respect to the
Funds for successive periods of 12 months, provided such continuance is
specifically approved at least annually by both (a) the vote of a majority of
the Corporation's Board of Directors or a vote of a majority of the outstanding
voting securities of each Fund at the time outstanding and entitled to vote and
(b) by the vote of a majority of the Directors, who are not parties to this
Agreement or interested persons (as such term is defined in the 1940 Act) of

                                      -5-
<PAGE>

any such party, cast in person at a meeting called for the purpose of voting on
such approval. Notwithstanding the foregoing, this Agreement may be terminated
by the Corporation or the Advisor at any time, without the payment of any
penalty, upon giving the Sub-Advisor 60 days' notice (which notice may be waived
by the Sub-Advisor), provided that such termination by the Corporation, on
behalf of a Fund, or the Advisor shall be directed or approved by the vote of a
majority of the Directors of the Trust in office at the time or by the vote of
the holders of a majority of the voting securities of each Fund at the time
outstanding and entitled to vote, or by the Sub-Advisor on 60 days' written
notice (which notice may be waived by the Corporation, on behalf of a Fund, and
the Advisor), and will terminate automatically upon any termination of the
Advisory Agreement between the Corporation and the Advisor. 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 of 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. This Agreement may be amended by the
parties only if such amendment is specifically approved by the vote of the Board
of Directors of the Corporation, including a majority of those Directors 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, where
required by the 1940 Act, by a vote of a majority of the outstanding voting
securities of each Fund.

      13. 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.

      14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York 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 New York, or any of the provisions, conflict
with the applicable provisions of the 1940 Act, the latter shall control.

      15. 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.

                                      -6-
<PAGE>

            IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be executed by their duly authorized officers designated below as of the day
and year first above written.

                                            BLACKROCK ADVISORS, LLC

                                            By: ________________________________
                                                Name:  Donald C. Burke
                                                Title: Managing Director

                                            BLACKROCK FINANCIAL MANAGEMENT, INC.

                                            By: ________________________________
                                                Name:
                                                Title:
Agreed and Accepted:

BLACKROCK VARIABLE SERIES FUNDS, INC.

By: _________________________________
   Name:  Donald C. Burke
   Title: Vice President & Treasurer

                                      -7-
<PAGE>

                                   Schedule A

                           Sub-Investment Advisory Fee

                                          Percentage of the monthly advisory fee
Fund                                      received by the Advisor from the Fund
----                                      -------------------------------------
BlackRock Balanced Capital V.I. Fund                      37.00%
BlackRock Bond V.I. Fund                                  59.00%
BlackRock Government Income V.I. Fund                     59.00%
BlackRock High Income V.I. Fund                           59.00%

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