Exhibit 99(g)(2)
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
the BlackRock Multi-Strategy Hedge Opportunities LLC, a Delaware limited
liability company (the "Fund") and a closed-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.
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 Fund 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 Fund's Board of Directors, the Sub-Advisor will
perform certain of the day-to-day operations of the Fund, 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 Fund 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 Fund and in voting, exercising consents and
exercising all other rights appertaining to such securities and other assets on
behalf of the Fund; (b) arranging, subject to the provisions of paragraph 3
hereof, for the purchase and sale of securities and other assets of the Fund;
(c) providing investment research and credit analysis concerning the Fund's
investments, (d) assist the Advisor in determining what portion of the Fund's
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 Fund, 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 Fund's Board of Directors, provide
to the Advisor or the Fund any of the facilities and equipment and perform any
of the services described in the investment advisory agreement between the
Advisor and the Fund (the "Advisory Agreement"). In addition, the Sub-Advisor
will keep the Fund and the Advisor informed of developments materially affecting
the Fund and shall, on its own initiative, furnish to the Fund 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 Fund, 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 Fund under the Advisory Agreement.
The Sub-Advisor will provide the services rendered by it under this Agreement in
accordance with the 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 Fund's Prospectus and Statement of Additional Information
and the resolutions of the Fund'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
Declaration of Trust and By-Laws of the Fund, as such documents are amended from
time to time; (iv) the investment objectives and policies of the Fund as set
forth in its Registration Statement on Form N-2; and (v) any policies and
determinations of the Board of the Directors of the Fund 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 Fund 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 Fund's and
their other clients and that the total commissions paid by the Fund
will be reasonable in relation to the benefits to the Fund
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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 Fund is affiliated;
(ii) maintain books and records with respect to the Fund's
securities transactions and will render to the Advisor and the
Fund'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 Fund, its
investment advisory personnel will not inquire or take into
consideration whether the issuer of securities proposed for purchase
or sale for the Fund's account are customers of the commercial
department of its affiliates; and
(iv) treat confidentially and as proprietary information of
the Fund all records and other information relative to the Fund, 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 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 Fund.
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 Fund are the property of the Fund and further agrees to
surrender promptly to the Fund any such records upon the Fund'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 Fund 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
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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 Fund shall be
calculated pursuant to the procedures adopted by resolutions of the Directors of
the Fund for calculating the value of the Fund's assets or delegating such
calculations to third parties.
8. Indemnity.
(a) The Fund 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
Fund 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 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 the
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 the
Fund and did not involve disabling conduct by such Indemnitee and (3) with
respect to any action, suit or other proceeding voluntarily
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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
Fund.
(b) The Fund shall make advance payments in connection with the expenses
of defending any action with respect to which indemnification might be sought
hereunder if the Fund 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 Fund unless it is subsequently
determined that such Indemnitee is entitled to such indemnification and if the
Directors of the Fund 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 Fund shall be insured against losses arising by
reason of any unlawful advance, or (C) a majority of a quorum consisting of
Directors of the Fund who are neither "interested persons" of the Fund (as
defined in Section 2(a)(19) of the 0000 Xxx) 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 Fund, 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.
(a) 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 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 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 Fund 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
Fund 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 Fund's Board of Directors or a vote of a majority of the outstanding voting
securities of the Fund
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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 0000 Xxx) 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 Fund 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 Fund or the Advisor shall be directed or approved by the vote
of a majority of the Directors of the Fund in office at the time or by the vote
of the holders of a majority of the voting securities of the 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 Fund and the Advisor), and will
terminate automatically upon any termination of the Advisory Agreement between
the Fund 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 Fund, 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 the 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.
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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:
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Name: Xxxxxx X. Xxxxx
Title: Managing Director
BLACKROCK INVESTMENT MANAGEMENT, LLC
By:
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Name:
Title:
Agreed and Accepted:
BLACKROCK MULTI-STRATEGY HEDGE
OPPORTUNITIES LLC
By:
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Name: Xxxxxx X. Xxxxx
Title: Vice President & Treasurer
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Schedule A
Sub-Investment Advisory Fee
74.00% of the monthly advisory fee received by the Advisor from the Fund.
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