INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT,
dated as of ___________, 2010 by and among FEG Absolute Access Fund (the
“Fund”), FEG Investors, LLC (the “Adviser”), and InterOcean Capital, LLC (the
“Sub-Adviser”).
WHEREAS,
the Adviser is registered as an investment adviser under the Investment Advisers
Act of 1940, as amended (the “Advisers Act”);
WHEREAS,
the Adviser has entered into an amended and restated investment management
agreement (the “Investment Management Agreement”) dated ________ with the Fund,
which plans to register as an investment company registered under the Investment
Company Act of 1940, as amended (the “Investment Company Act”);
WHEREAS,
the Sub-Adviser is registered as an investment adviser under the Advisers
Act;
WHEREAS,
the Board of Directors of the Fund (the “Board”) and the Adviser desire to
retain the Sub-Adviser to render investment advisory and other services to the
Fund, in the manner and on the terms hereinafter set forth;
WHEREAS,
the Adviser has the authority under the Investment Management Agreement with the
Fund to retain sub-advisers; and
WHEREAS,
the Sub-Adviser is willing to furnish such services to the Adviser and the
Fund;
NOW,
THEREFORE, in consideration of the promises and mutual covenants contained
herein, and intending to be legally bound hereby, the Fund, the Adviser and the
Sub-Adviser agree as follows:
|
1.
|
APPOINTMENT
OF THE SUB-ADVISER
|
The
Adviser hereby appoints the Sub-Adviser to act as an investment adviser for the
Fund, subject to the supervision and oversight of the Adviser and the Board, and
in accordance with the terms and conditions of this Agreement. The Sub-Adviser
will be an independent contractor and will have no authority to act for or
represent the Fund or the Adviser in any way or otherwise be deemed an agent of
the Fund or the Adviser except as expressly authorized in this Agreement or
another writing by the Fund, the Adviser and the Sub-Adviser.
|
2.
|
ACCEPTANCE
OF APPOINTMENT
|
The
Sub-Adviser accepts that appointment and agrees to render the services herein
set forth, for the compensation herein provided.
|
3.
|
SERVICES
TO BE RENDERED BY THE SUB-ADVISER TO THE
FUND
|
A. As
an investment adviser to the Fund, the Sub-Adviser will be involved with the
aspects of the Fund’s investment program as detailed in this Section 3. All
powers and authority of the Sub-Adviser under this Agreement shall be effected
and exercised exclusively through the Fund. The Sub-Adviser shall act on behalf
of the Fund only pursuant to the supervision of the Adviser and the authority
granted under this Agreement. The Sub-Adviser shall not permit or cause the Fund
to enter into or otherwise directly engage in any borrowing, leverage or other
credit arrangements without the express authorization of the Adviser. Further,
the Sub-Adviser shall not engage in any principal transactions or agency cross
transactions with, or with respect to any of the assets of, the
Fund.
B. As
part of the services it will provide hereunder, the Sub-Adviser
will:
(i) appoint
a member of the Adviser’s Investment Policy Committee, thereby assisting in
providing for oversight of the Fund’s investments, making Fund manager selection
and termination recommendations and approving significant and strategic asset
allocation changes and
(ii) cooperate
with and provide reasonable assistance to the Adviser, the Fund’s administrator,
the Fund’s custodian, the Fund’s transfer agent and pricing agents and all other
agents and representatives of the Fund and the Adviser; keep all such persons
fully informed as to such matters as they may reasonably deem necessary to the
performance of their obligations to the Fund; provide prompt responses to
reasonable requests made by such persons; and maintain necessary and appropriate
interfaces with each such person so as to promote the efficient exchange of
information.
C. In
furnishing services hereunder, the Sub-Adviser shall be subject to, and shall
perform in accordance with, the following: (i) the Fund’s operating agreement
and/or other governing instruments, as the same may be amended from time to time
(“Governing Documents”); (ii) the registration statement of the Fund as filed
with the Securities and Exchange Commission (“SEC”), as the same may be amended
from time to time (the “Registration Statement”) as well as the Confidential
Memorandum of any Feeder Fund; (iii) the Investment Company Act and the Advisers
Act and the rules under each, and all other federal and state laws or
regulations applicable to the Fund; (iv) the Fund’s Compliance Manual and other
policies and procedures adopted from time to time by the Board; and (v) the
written instructions of the Adviser not inconsistent with any of the foregoing.
The Sub-Adviser shall have no responsibility under this Agreement to conform its
services to any new or modified requirements imposed by any such any such
amendment, modification or supplement, and shall have no liability for its
failure to do so, unless it has been furnished with a copy thereof or a written
notice detailing such new or modified requirements a reasonable period of time
before such amendment, modification or supplement is to take
effect.
- 2
-
D. The
Sub-Adviser agrees to render the services and to provide at its own expense, the
office space, furnishings and equipment and the personnel required by it to
perform the services on the terms and for the compensation provided
herein.
E. The
Adviser and the Fund agree that the Sub-Adviser and its affiliates may give
advice and take action in the performance of their duties with respect to any of
their other clients that may differ from advice given, or the timing or nature
of actions taken, with respect to the Fund. Nothing in this Agreement shall be
deemed to confer upon the Sub-Adviser any obligation to purchase or to recommend
for purchase for the Fund any investment that the Sub-Adviser, its affiliates,
officers or employees may purchase or sell for its or their own account or for
the account of any client, if in the sole and absolute discretion of the
Sub-Adviser, it is for any reason impractical or undesirable to take such action
or make such recommendation for the Fund.
F. The
Sub-Adviser will maintain all accounts, books and records with respect to the
Fund as are required, in accordance with its role and duties under this
Agreement, of an investment adviser of a registered investment company pursuant
to the Investment Company Act and Advisers Act and the rules
thereunder.
|
4.
|
COMPENSATION
OF THE SUB-ADVISER
|
In
consideration of the services provided by the Sub-Adviser pursuant to this
Agreement, the Adviser will pay the Sub-Adviser a monthly fee equal to 10% of
any investment management fee received by the Adviser from the Fund pursuant to
the Investment Management Agreement as of the end of each calendar month, which
fee shall be paid within 60 days after the end of the month (or if earlier,
within 60 days after the date of expiration or termination of this Agreement).
In the event this Agreement is in effect for part, but not all, of a calendar
month, the fee payable to the Sub-Adviser for such month shall be appropriately
pro-rated. In the event this Agreement expires or terminates on a date other
than the end of a calendar month, the fee payable for the uncompleted month
shall be determined based on the value of the net assets of the Fund determined
as of the end of the most recent calendar month ended on or prior to the date of
expiration or termination and as if the Adviser had received a fee for the
uncompleted month pursuant to the Investment Management Agreement. Except as may
otherwise be prohibited by law or regulation (including, without limitation, any
then current SEC staff interpretation), the Sub-Adviser may, in its sole and
absolute discretion and from time to time, waive all or any portion of its
advisory fee compensation.
|
5.
|
LIABILITY/DUTY
OF CARE
|
The
Sub-Adviser (including for this purpose each affiliate, shareholder, partner,
member, officer, director, principal, employee, or agent of the Sub-Adviser)
shall not be liable to the Adviser or the Fund or to any of their members for
any loss or damage occasioned by any act or omission in the performance of the
Sub-Adviser’s services under this Agreement, unless it shall be determined by
final judicial decision in a court of competent jurisdiction on the merits from
which there is no further right to appeal that such loss is due to an act or
omission of the Sub-Adviser
constituting willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of the Sub-Adviser or as
otherwise required by law.
- 3
-
The
Adviser and the Fund (including for this purpose each affiliate, shareholder,
partner, member, officer, director, principal, employee, or agent of the Adviser
and the Fund) shall not be liable to the Sub-Adviser or to any of its members
for any loss or damage occasioned by any act or omission in the performance of
the Adviser’s or the Fund’s services under this Agreement, unless it shall be
determined by final judicial decision in a court of competent jurisdiction on
the merits from which there is no further right to appeal that such loss is due
to an act or omission of the Adviser or the Fund constituting willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of the Adviser or the Fund or as otherwise required by
law.
The
provisions of this Section 5 shall survive the expiration and termination of
this Agreement.
|
6.
|
REPRESENTATIONS
OF THE ADVISER
|
The
Adviser represents, warrants and agrees that:
A. The
Adviser has been duly authorized by the Board to delegate to the Sub-Adviser the
provision of investment services to the Fund as contemplated
hereby.
B. The
Adviser and the Fund have adopted a written code of ethics complying with the
requirements of Rule 17j-1 under the Investment Company Act and will provide the
Sub-Adviser with a copy of such code of ethics.
C. The
Adviser is currently in material compliance and shall at all times continue to
materially comply with the requirements imposed upon the Adviser by applicable
law and regulations.
D. The
Adviser (i) is registered as an investment adviser under the Advisers Act and
will continue to be so registered for so long as this Agreement remains in
effect; (ii) is not prohibited by the Investment Company Act, the Advisers Act
or other law, regulation or order from performing the services contemplated by
this Agreement; (iii) to the best of its knowledge, has met and will seek to
continue to meet for so long as this Agreement is in effect, any other
applicable federal or state requirements, or the applicable requirements of any
regulatory or industry self-regulatory agency necessary to be met in order to
perform the services contemplated by this Agreement; and (iv) will promptly
notify the Sub-Adviser of the occurrence of any event that would disqualify the
Adviser from serving as investment manager of an investment company pursuant to
Section 9(a) of the Investment Company Act or otherwise. The Adviser
will also promptly notify the Sub-Adviser if it is served or otherwise receives
notice of any action, suit, proceeding, inquiry or investigation, at law or in
equity, before or by any court, public board or body, involving the affairs of
the Fund or a feeder fund, provided, however, that routine regulatory
examinations shall not be required to be reported by this
provision.
- 4
-
E. The
execution, delivery and performance of this Agreement do not, and will not,
conflict with, or result in any violation or default under, any agreement to
which Adviser or any of its officers, directors, partners, members or employees
(its “Affiliates”) are a party.
|
7.
|
REPRESENTATIONS
OF THE SUB-ADVISER
|
The
Sub-Adviser represents, warrants and agrees that:
A. The
Sub-Adviser is currently in material compliance and shall at all times continue
to materially comply with the requirements imposed upon the Sub-Adviser by
applicable law and regulations.
B. The
Sub-Adviser (i) is registered as an investment adviser under the Advisers Act
and will continue to be so registered for so long as this Agreement remains in
effect; (ii) is not prohibited by the Investment Company Act, the Advisers Act
or other law, regulation or order from performing the services contemplated by
this Agreement; (iii) has met and will seek to continue to meet for so long as
this Agreement remains in effect, any other applicable federal or state
requirements, or the applicable requirements of any regulatory or industry
self-regulatory agency necessary to be met in order to perform the services
contemplated by this Agreement; (iv) has the authority to enter into and perform
the services contemplated by this Agreement; and (v) will promptly
notify the Adviser of the occurrence of any event that would disqualify the
Sub-Adviser from serving as an investment adviser of an investment company
pursuant to Section 9(a) of the Investment Company Act or otherwise. The
Sub-Adviser will also promptly notify the Fund and the Adviser if it is served
or otherwise receives notice of any action, suit, proceeding, inquiry or
investigation, at law or in equity, before or by any court, public board or
body, involving the affairs of the Fund or a feeder fund.
C. The
Sub-Adviser has adopted a written code of ethics complying with the requirements
of Rule 17j-1 under the Investment Company Act and Rule 204A-1 under the
Advisers Act and will provide the Adviser and the Board with a copy of such code
of ethics, together with evidence of its adoption. Within forty-five days of the
end of the last calendar quarter of each year that this Agreement is in effect,
and as otherwise requested, the General Counsel, Chief Compliance Officer or a
vice-president of the Sub-Adviser shall certify to the Adviser that the
Sub-Adviser has complied with the requirements of Rule 17j-1 and Rule 204A-1
during the previous year and that there has been no material violation of the
Sub-Adviser’s code of ethics or, if such a material violation has occurred, that
appropriate action was taken in response to such violation. Upon the reasonable
written request of the Adviser, the Sub-Adviser shall permit the Adviser, its
employees or its agents to examine the reports required to be made to the
Sub-Adviser by Rule 17j-1(c)(1) and Rule 204A-1(b) and other records relating to
the Sub-Adviser’s code of ethics to the extent relevant to the
Fund.
D. The
Sub-Adviser has provided the Fund and the Adviser with a copy of its Form ADV
Part I, which as of the date of this Agreement is its Form ADV as most recently
filed with the SEC, and ADV Part II and promptly will furnish a copy of all
amendments to the Fund and the Adviser at least annually.
- 5
-
E. The
Sub-Adviser will notify the Fund and the Adviser of any change of control of the
Sub-Adviser, as applicable, and any changes in the key personnel who are either
the portfolio manager(s) of the Fund named in the Registration Statement or
senior management of the Sub-Adviser, in each case prior to or promptly after,
such change. The Sub-Adviser agrees to bear all reasonable expenses of the Fund,
if any, arising out of any such assignment or change in control.
F. The
Sub-Adviser will promptly notify the Adviser of any financial condition that is
likely to impair the Sub-Adviser’s ability to fulfill its commitment under this
Agreement.
G. The
Sub-Adviser agrees to maintain a level of errors and omissions or professional
liability insurance coverage reasonably deemed appropriate by the
Sub-Adviser.
H. The
execution, delivery and performance of this Agreement do not, and will not,
conflict with, or result in any violation or default under, any agreement to
which Sub-Adviser or any of its Affiliates are a party, or otherwise arising
under this Agreement.
|
8.
|
REGULATION
|
The
Sub-Adviser shall submit to all regulatory and administrative bodies having
jurisdiction over the services provided pursuant to this Agreement any
information, reports, or other material which any such body by reason of this
Agreement shall have the authority to request pursuant to applicable laws and
regulations.
|
9.
|
RECORDS
|
Records
relating to the services provided under this Agreement maintained by the
Sub-Adviser that are required to be maintained by the Fund by the Investment
Company Act and the rules thereunder (“Required Records”) shall be the property
of the Fund and shall be under its control; however, the Fund shall furnish to
the Sub-Adviser such records and permit the Sub-Adviser to retain such records
(either in original or in duplicate form) as the Sub-Adviser shall reasonably
require in order to carry out its business or to comply with applicable laws and
regulations. In the event of the termination of this Agreement,
Required Records shall promptly be returned to the Fund by the Sub-Adviser free
from any claim or retention of rights therein, provided that the Sub-Adviser may
retain copies of any or all such records and may retain such records that are
required to be retained by it by law or regulation. The Adviser and
the Sub-Adviser shall keep confidential any information obtained in connection
with their respective duties hereunder and shall disclose such information only
if the Fund has authorized such disclosure or if such disclosure is expressly
required by law.
- 6
-
|
10.
|
DURATION
OF AGREEMENT
|
This
Agreement shall become effective upon the date first above written, provided
that this Agreement shall not take effect unless it has first been
approved: (i) by a vote of a majority of the Board who are not
“interested persons” (as defined in the Investment Company Act) of any party to
this Agreement (“Independent Directors”), cast in person at a meeting called for
the purpose of voting on such approval, and (ii) by vote of a majority of the
Fund’s outstanding voting securities. This Agreement shall continue in effect
until __________ and shall continue in effect from year to year thereafter,
unless terminated in accordance with the provisions of this Agreement, provided
that such continuance is specifically approved at least annually by the Board
and by the vote of a majority of the Independent Directors cast in person at a
meeting called for the purpose of voting on such approval.
|
11.
|
TERMINATION
OF AGREEMENT
|
This
Agreement may be terminated at any time, without the payment of any penalty, by
the Board or by the vote of a majority of the outstanding voting securities of
the Fund, on sixty (60) days’ written notice to the Adviser and the Sub-Adviser,
or by the Adviser or Sub-Adviser on sixty (60) days’ written notice to the Fund
and the other party. This Agreement will automatically terminate, without the
payment of any penalty, (i) in the event of its assignment (as defined in the
Investment Company Act), or (ii) effective upon the termination of the
Investment Management Agreement.
|
12.
|
AMENDMENTS
TO THE AGREEMENT
|
Except
to the extent permitted by the Investment Company Act or the rules or
regulations thereunder or pursuant to exemptive relief granted by the SEC, this
Agreement may be amended by the parties only if such amendment: (i) if material,
is specifically approved by the vote of a majority of the outstanding voting
securities of the Fund (unless such approval is not required by Section 15 of
the Investment Company Act as interpreted by the SEC or its staff or unless the
SEC has granted an exemption from such approval requirement); and (ii) is
approved by the vote of a majority of the Independent Directors cast in person
at a meeting called for the purpose of voting on such approval.
|
13.
|
ENTIRE
AGREEMENT
|
This
Agreement contains the entire understanding and agreement of the parties with
respect to the subject matter hereof.
|
14.
|
HEADINGS
|
The
headings in the sections of this Agreement are inserted for convenience of
reference only and shall not constitute a part hereof.
|
15.
|
NOTICES
|
All
notices required to be given pursuant to this Agreement shall be delivered or
mailed to the address listed below of each applicable party in person or by
registered or certified mail or a private mail or delivery service providing the
sender with notice of receipt or to such other address as specified in a notice
duly given to the other party. Notice shall be deemed given on the date
delivered or mailed in accordance with this paragraph.
- 7
-
(a) if
to the Fund: FEG Absolute Access Fund LLC, c/o FEG Investors, LLC, 000 Xxxx
Xxxxx Xx., Xxxxx 0000, Xxxxxxxxxx, XX 00000.
(b) if
to the Adviser: FEG Investors, LLC, 000 Xxxx Xxxxx Xx., Xxxxx 0000, Xxxxxxxxxx,
XX 00000.
(c) if to the Sub-Adviser: InterOcean
Capital, LLC, 000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, XX
00000
|
16.
|
SEVERABILITY
|
Should
any portion of this Agreement for any reason be held to be void in law or in
equity, the Agreement shall be construed, insofar as is possible, as if such
portion had never been contained herein.
|
17.
|
GOVERNING
LAW
|
The
provisions of this Agreement shall be construed and interpreted in accordance
with the laws of the State of Delaware, without reference to conflict of law or
choice of law doctrines. To the extent that the laws of the State of
Delaware conflict with applicable provisions of the Investment Company Act or
the Advisers Act, the latter federal statutes shall control.
|
18.
|
INTERPRETATION
|
Any
question of interpretation of any term or provision of this Agreement having a
counterpart in or otherwise derived from a term or provision of the Investment
Company Act shall be resolved by reference to such term or provision of the
Investment Company Act and to interpretations thereof, if any, by the United
States courts or, in the absence of any controlling decision of any such court,
by rules, regulations or orders of the SEC validly issued pursuant to the
Investment Company Act. Specifically, the terms “vote of a majority of the
outstanding voting securities,” “interested persons,” “assignment,” and
“affiliated persons,” as used herein shall have the meanings assigned to them by
Section 2(a) of the Investment Company Act and applicable rules adopted
thereunder. In addition, where the effect of a requirement of the Investment
Company Act reflected in any provision of this Agreement is relaxed by a rule,
regulation or order of the SEC, whether of special or of general application,
such provision shall be deemed to incorporate the effect of such rule,
regulation or order.
- 8
-
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by
their duly authorized officers as of the date first mentioned
above.
|
FEG
ABSOLUTE ACCESS FUND, LLC
|
FEG
INVESTORS, LLC
|
|||
|
By:
|
By:
|
|||
|
Name:
|
Name:
|
|||
|
Title:
|
Title:
|
|||
|
INTEROCEAN
CAPITAL, LLC
|
||||
|
By:
|
||||
|
Name:
|
||||
|
Title:
|
||||
- 9
-
