AMENDED AND RESTATED INVESTMENT MANAGEMENT AGREEMENT FEG ABSOLUTE ACCESS FUND LLC
AMENDED
AND RESTATED
AMENDED
AND RESTATED AGREEMENT, made as of ________, 2010 between FEG Absolute Access
Fund LLC, a Delaware limited liability company (the “Company”), and FEG
Investors, LLC, a Delaware limited liability company (the “Investment
Manager”).
WHEREAS,
the Company plans to register with the Securities and Exchange Commission (the
“SEC”) under the Investment Company Act of 1940, as amended (the “Company Act”);
and
WHEREAS,
the Investment Manager is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended; and
WHEREAS,
the Company retained the Investment Manager to render investment advisory
services to the Company pursuant to an Investment Management Agreements dated as
if March 3, 2008 (the “Agreement”); and
WHEREAS,
the parties desire to amend and restate the Agreement as set forth
herein;
NOW
THEREFORE, in consideration of the promises and mutual covenants herein
contained, it is agreed by the parties as follows:
1. Appointment. The
Company hereby appoints the Investment Manager to act as investment adviser and
provide investment advisory services to the Company, subject to the supervision
of the Company’s board of directors (the “Board” or “Directors”), for the period
and on the terms and conditions set forth in this Agreement. The
Investment Manager accepts such appointment and agrees to render the services
and to assume the obligations set forth in this Agreement commencing on its
effective date for the compensation herein provided. The Investment
Manager may hire (subject to the approval of the Company’s Board and, if the
Company is registered as an “investment company” under the Company Act, except
as otherwise permitted under the terms of any applicable exemptive relief
obtained from the Securities and Exchange Commission, or by rule or regulation,
a majority of the outstanding voting securities of the Company) and thereafter
supervise the investment activities of one or more sub-advisers deemed necessary
to carry out the investment program of the Company. The retention of
a sub-adviser by the Investment Manager shall not relieve the
Investment Manager of its responsibilities under this Agreement.
2. Responsibilities of the
Investment Manager. The Investment Manager hereby undertakes
and agrees, upon the terms and conditions herein set forth, subject to the
supervision of the Company’s Board:
(i) to
make investment decisions and provide a program of continuous investment
management for the Company; prepare, obtain, evaluate, and make available to the
Company research and statistical data in connection therewith; obtain and
evaluate such information and advice relating to the economy, securities
markets, and securities as it deems necessary or useful to discharge its duties
hereunder; engage in or supervise the selection, acquisition, retention, and
sale of investments, securities, and/or cash; engage in or supervise the
selection, acquisition, retention, and sale of unregistered pooled investment
vehicles, and/or managed accounts (collectively, “Portfolio Funds”); the
allocation of capital among a number of independent investment advisers
(“Portfolio Managers”); select brokers or dealers to execute transactions; and
all of the aforementioned shall be done in accordance with the Company’s
investment objective, policies, and limitations as stated in the Company’s
confidential private placement memorandum, as amended from time to time (the
“Memorandum”);
(ii) subject
to the direction and control of the Company’s Board, to assist the Company as it
may reasonably request in the conduct of the Company’s business, including oral
and written research, analysis, advice, statistical, and economic data,
judgments regarding individual investments, general economic conditions and
trends, and long-range investment policies; determine or recommend the
securities, instruments, repurchase agreements, options, and other investments
(including the Portfolio Funds), and techniques that the Company will purchase,
sell, enter into, use, or provide in an ongoing evaluation of the Company’s
portfolio; continuously manage and supervise the investment program of the
Company and the composition of its investment portfolio in a manner consistent
with the investment objective, policies, and restrictions of the Company, as set
forth in its Memorandum and as may be adopted from time to time by the Board,
and applicable laws and regulations; determine or recommend the extent to which
the Company’s portfolio shall be invested in securities, Portfolio
Funds, and other assets, and what portion if any, should be held
uninvested; and undertake to do anything incidental to the foregoing to
facilitate the performance of its obligations hereunder;
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(iii) furnish
to or place at the disposal of the Company information, evaluations, analyses,
and opinions formulated or obtained by the Investment Manager in the discharge
of its duties as the Company may, from time to time reasonably request, and
maintain or cause to be maintained for the Company all books, records, reports,
and any other information required under the Company Act, to the extent that
such books, records, reports, and other information are not maintained or
furnished by any custodian, transfer agent, administrator, sub-administrator, or
other agent of the Company;
(iv) to
furnish at the Investment Manager’s expense for the use of the Company such
office space, telephone, utilities, and facilities as the Company may require
for its reasonable needs and to furnish at the Investment Manager’s expense
clerical services related to research, statistical, and investment
work;
(v) to
render to the Company management and administrative assistance in connection
with the operation of the Company that shall include (i) compliance with all
reasonable requests of the Company for information, including information
required in connection with the Company’s potential filings with the SEC, other
federal and state regulatory organizations, and self-regulatory organizations,
and (ii) such other services as the Investment Manager shall from time to time
determine to be necessary or useful to the administration of the
Company;
(vi) to
pay the reasonable salaries, fees, and expenses of the Company (including the
Company’s officers and employees and the Company’s share of payroll taxes) and
any fees and expenses (including travel expenses) of the Company’s Directors who
are directors, officers, or employees of the Investment Manager or its
affiliates; provided, however, that the Company and not the Investment Manager,
shall bear travel expenses of Directors and officers of the Company who are
directors, officers, or employees of the Investment Manager or of its affiliates
to the extent that such expenses relate to attendance at meetings
of the Company’s Board of Directors or any committees thereof or
advisers thereto. The Investment Manager shall bear all expenses
arising out of its duties hereunder but shall not be responsible for any
expenses of the Company other than those specifically allocated to the
Investment Manager in this Agreement;
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(vii) to
enter into, make and perform any other contracts, agreements or other
undertakings it may deem advisable in acting as Investment Manager of the
Company; and
(viii) to
act for the Company in all other matters relating to its investment management
duties.
3. No Ownership of Intellectual
Property by the Company or any Member. Neither the Company nor
any member in the Company, in such member's capacity as a member (a “Member”),
shall have, in the absence of a written agreement with the Investment Manager to
the contrary, any title to or right to use the name “FEG,” or any derivative
thereof or any trademark used in connection with the name “FEG,” which name
shall be deemed, for all purposes, to be the exclusive intellectual property of
Fund Evaluation Group, LLC, a member of the Investment Manager. In addition,
neither the Company nor any Member (in such Member's capacity as a Member) shall
have, in the absence of a written agreement with the Investment Manager to the
contrary, any title to, interest in, or right to use any intellectual property
owned by the Investment Manager nor shall such intellectual property become the
property of the Company or any Member. Intellectual property owned by
the Investment Manager or any of its affiliates does not belong to the Company,
but rather is made available to the Company by the Investment Manager or its
affiliates, which retains full ownership rights in such intellectual
property. The Investment Manager covenants, however, that so long as
it or any of its affiliates are acting as the investment manager of the Company,
the Company shall have a royalty-free license to use the Investment Manager’s
intellectual property (including the name FEG or any derivative thereof) solely
in connection with the business activities of the Company, which license shall
not be transferable or assignable under any circumstances.
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4. Expenses. The
Company will bear all of its own expenses, including, but not limited to, the
Management Fee, as defined below, payable to the Investment Manager; all
expenses that the Board reasonably determines to be incurred in connection with
the Company’s investment activities, including, but not limited to, due
diligence costs, Portfolio Manager background checks, systems and travel costs
(or a portion thereof); any taxes to which the Company is subject; the Portfolio
Fund and Portfolio Manager fees and expenses; regulatory fees; and interest
charges. In addition, except as described below, the Company will
bear all of its own ordinary operating and administrative expenses, which
include, but are not limited to, administration fees; amounts due to persons not
affiliated with the Investment Manager for providing operating and
administrative services, custody, legal, accounting, audit and tax services to
the Company or to the Investment Manager with respect to the activities of the
Company; registration and filing fees; and the cost of the ongoing offering of
the limited liability company interests (the “Interests”). The
Company will bear all of its extraordinary expenses, if any. The
Investment Manager or an affiliate will bear the fees and expenses incurred in
connection with the organization of the Company and the initial offering of the
Interests. Any expenses incurred in connection with the Company’s
registration under the Company Act, if so registered in the future, will be
borne by the Investment Manager or an affiliate, provided, however, that the
ongoing expenses incurred in connection with the Company’s status as a
registered investment company, if and when so registered, such as the fees and
expenses of directors not affiliated with the Investment Manager or its
affiliates and the expenses incurred in connection with the preparation and
filing of periodic and other regulatory filings, will be borne by the
Company.
5. Regulatory
Compliance. In performing its duties hereunder, the Investment
Manager shall comply with (i) the Company Act and all rules and regulations
thereunder during any time that the Company is registered under the Company Act,
(ii) all other applicable federal and state laws and regulations, (iii) any
applicable procedures adopted by the Company’s Board, and (iv) the provisions of
the Company’s Memorandum.
6. Compensation. As
compensation for the services performed and the facilities and personnel
provided by the Investment Manager pursuant to this Agreement, the Company will
pay the Investment Manager monthly in arrears a management fee (the “Management
Fee”), equal to 1/12 of 0.85% of the Company’s month-end net asset value, prior
to reduction for the Management Fee then being calculated (a 0.85% annual
rate). If the Investment Manager shall serve hereunder for less than
the whole of any month, the fee hereunder shall be prorated according to the
proportion that such period bears to the full month and shall be payable within
30 days after the end of the relevant month or the date of termination of this
Agreement, as applicable. The value of the net assets of the Company
shall be determined pursuant to the applicable provisions of the limited
liability company operating agreement (the “Operating Agreement”), valuation
procedures, and the Memorandum, each as amended from time to time. If
the determination of the net asset value of the Company has been suspended for a
period including the end of any month when the Investment Manager’s compensation
is payable pursuant to this paragraph, then the Investment Manager’s
compensation payable with respect to such month shall be computed on the basis
of the net asset value of the Company as last determined (whether during or
prior to such month).
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7. Selection of
Brokers. It is expected that the Portfolio Managers will
generally be responsible for the selection of brokers and that they may take
into account the factors noted in the Memorandum.
8. Reports. The
Investment Manager will regularly report to the Company’s Board on the
investment program of the Company and the issuers and securities generally
represented in the Company’s portfolio, including reports received from the
Portfolio Funds and Portfolio Managers, and will furnish the Company’s Board
such periodic and special reports as the Directors may reasonably
request.
9. Other Activities; Management
of Other Accounts; Allocation of Investment Opportunities.
(a) The
Investment Manager, its Members, and their personnel are required to devote so
much of their time to the activities of the Company as may be reasonably
required to further the business affairs and activities of the
Company. The Investment Manager, its Members, and their personnel are
involved in other business ventures and may organize or become involved in other
business ventures in the future. Neither the Company nor any Member
will share in the risks or rewards of the Investment Manager, its members, and
their personnel deriving from such other ventures. However, such
other ventures will compete for the time and attention of such persons and might
create other conflicts of interest. This Agreement does not require
the Investment Manager, its members, and their personnel to devote any
particular amount of time to the Company.
(b) Portfolio
Managers trade for accounts other than the Company and may have an incentive to
favor those accounts over the Company as they may have investments in those
accounts or receive greater compensation for managing them than they do for
managing the Company’s investment. Similarly, the Investment
Manager’s members currently manage other accounts and may have an incentive to
favor those accounts over the Company as it or its members may have investments
in those accounts or receive greater compensation for managing them than they do
for managing the Company.
(c) The
Investment Manager or its members may operate now or organize in the future
investment vehicles similar to the Company which may invest in similar or
different investments. The Investment Manager and its members may
have to allocate limited investment opportunities in Portfolio Managers among
the Company and such other investment vehicles, based on a variety of factors
including differences in the size of different investment vehicles (including
the Company), differences in target strategy allocations and the
timing of contributions and withdrawals. The ultimate decision as to
allocations will be determined in the Investment Manager’s
discretion.
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10. Independent
Contractor. The Investment Manager shall for all purposes
herein be deemed to be an independent contractor and shall, unless otherwise
expressly provided herein or authorized by the Company’s Board from time to
time, have no authority to act for or represent the Company in any way or
otherwise be deemed its agent.
11. Duty of
Care. The Investment Manager (including for this purpose each
affiliate, shareholder, partner, member, officer, director, principal, employee,
or agent of the Investment Manager) shall not be liable to the Company or to any
of its members for any loss or damage occasioned by any act or omission in the
performance of the Investment Manager’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 Investment Manager constituting
willful misfeasance, bad faith, gross negligence, or reckless disregard of the
duties involved in the conduct of the Investment Manager or as otherwise
required by law.
12. Indemnification.
(a) To
the fullest extent permitted by law, the Company shall, subject to Section 12(b)
hereof, indemnify the Investment Manager (including for this purpose each
affiliate, shareholder, partner, member, officer, director, principal, employee,
or agent of the Investment Manager) and the executors, heirs, assigns,
successors, or other legal representatives of the Investment Manager, and of any
person who controls or is under common control, or otherwise affiliated, with
the Investment Manager (and their executors, heirs, assigns, successors, or
other legal representatives) (an “indemnitee”) against all losses, claims,
damages, liabilities, costs, and expenses, including, but not limited to,
amounts paid in satisfaction of judgments, in compromise, or as fines or
penalties, and reasonable counsel fees, incurred in connection with the defense
or disposition of any action, suit, investigation, or other proceeding, whether
civil or criminal, before any judicial, arbitral, administrative, or legislative
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 in office or thereafter, by reason of being or having been the Investment
Manager of the Company or the past or present performance of services to the
Company by the Investment Manager, except to the extent such loss,
claim, damage, liability, cost, or expense shall have been finally determined in
a decision on the merits in any such action, suit, investigation, or other
proceeding to have been incurred or suffered by such indemnitee by reason of
willful misfeasance, bad faith, gross negligence, or reckless disregard of the
duties involved in the conduct of the indemnitee’s office. The rights
of indemnification provided under this Section 12 shall not be construed to
constitute a waiver of any rights of the Company or any Member under federal or
state securities laws which, under certain circumstances, impose liability even
on persons that act in good faith, or to provide for indemnification of an
indemnitee to the extent (but only to the extent) that such indemnification
would be in violation of applicable law, but shall be construed so as to
effectuate the applicable provisions of this Section 12 to the fullest extent
permitted by law.
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(b) Expenses,
including reasonable counsel fees, so incurred by any such indemnitee (but
excluding amounts paid in satisfaction of judgments, in compromise, or as fines
or penalties), may be paid from time to time by the Company in advance of the
final disposition of any such action, suit, investigation, or proceeding upon
receipt of an undertaking by or on behalf of such indemnitee to repay to the
Company amounts so paid if it shall ultimately be determined that
indemnification of such expenses is not authorized under Section 12(a) hereof;
provided, however, that a majority of the Directors (excluding any Director who
has been a party to any action, suit, investigation, or proceeding involving
claims similar to those involved in the action, suit, investigation, or
proceeding giving rise to a claim for advancement of expenses hereunder if the
Company is registered as an “investment company” under the Company Act) or
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 such indemnitee ultimately will be entitled to
indemnification.
(c) An
indemnitee may not satisfy any right of indemnification or advancement of
expenses granted in this Section 12 as to which he, she, or it may otherwise be
entitled except out of the assets of the Company, and no Member shall be
personally liable with respect to any such claim for indemnification or
advancement of expenses.
(d) The
rights of indemnification provided hereunder shall not be exclusive of or affect
any other rights to which any person may be entitled by contract or
otherwise under law. Nothing contained in this Section 12 shall
affect the power of the Company to purchase and maintain liability insurance on
behalf of any person.
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13. Term of Agreement;
Termination. This Agreement will remain in effect two years
from its date of execution, and will continue in effect year to year thereafter;
provided that (a) if the Company is registered as an “investment company” under
the Company Act, the continuation of this Agreement shall be specifically
approved at least annually by the affirmative vote of a majority of the members
of the Company’s Board who are not parties to this Agreement or interested
persons (as defined in the Company Act) of any party to this Agreement, or of
any entity regularly furnishing investment advisory services with respect to the
Company pursuant to an agreement with any party to this Agreement, cast in
person at a meeting called for the purpose of voting on such approval; and (b)
if the Company is not registered as an “investment company” under the Company
Act, this Agreement shall continue in effect until terminated as provided in the
following sentence. This Agreement may be terminated at any time without
penalty, on 60 days’ written notice, by the Company’s Board, by vote of holders
of a majority of the outstanding voting securities of the Company (but only if
the Company is registered as an “investment company” under the Company Act), or
by the Investment Manager. This Agreement shall
automatically be terminated in the event of its assignment, provided that an
assignment to a corporate successor to all or substantially all of the
Investment Manager’s business or to a wholly owned subsidiary of such corporate
successor which does not result in a change of actual control or management of
the Investment Manager’s business shall not be deemed to be an assignment for
the purposes of this Agreement. Any notice to the Company or the
Investment Manager shall be deemed given when received by the
addressee.
14. Confidentiality. All
investment advice furnished by the Investment Manager to the Company shall
remain the property of the Investment Manager, shall be treated as confidential
by the Company and shall not be used by the Company or disclosed to third
parties except as required in connection with the operation of the Company or as
required by law or by demand of any regulatory or self-regulatory
agency.
15. Notice. All
notices shall be in writing and shall be deemed to have been duly given if
delivered personally or if mailed by registered mail, postage prepaid, to the
following respective addresses until a different address is specified in writing
by a party to the other party:
(a) if
to the Company: FEG Absolute Access Fund LLC, c/o FEG Investors, LLC, 000 Xxxx
Xxxxx Xx., Xxxxx 0000, Xxxxxxxxxx, XX 00000.
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(b) if
to the Investment Manager: FEG Investors, LLC, 000 Xxxx Xxxxx Xx., Xxxxx 0000,
Xxxxxxxxxx, XX 00000.
16. Survival of
Obligations. Provisions of this Agreement that by their terms
or by their context are to be performed in whole or in part after termination of
this Agreement shall survive termination of this Agreement. Specifically, and
without limiting the generality of the foregoing, the obligations set forth in
Sections 3 ("No Ownership of Intellectual Property by the Company or any
Member"), 11 ("Duty of Care"), 12 ("Indemnification"), 14 ("Confidentiality")
and the obligation to settle accounts hereunder shall survive the termination of
this Agreement.
17. Receipt of Form
ADV. The Company hereby acknowledges receipt of the Investment
Manager’s current Form ADV Part II at least 48 hours prior to entering into this
Agreement.
18. Assignment. Subject
to Section 13 hereof, this Agreement may not be transferred, assigned, sold, or
in any manner hypothecated or pledged by either party hereto, except as
permitted under applicable law.
19. Amendment. This
Agreement may be amended only by the written agreement of the
parties. Any amendment shall be required to be approved by the Board
and, if the Company is registered as an “investment company” under the Company
Act, by a majority of the independent Directors in accordance with the
provisions of Section 15(c) of the Company Act and the rules and regulations
adopted thereunder. If the Company is registered as an “investment
company” under the Company Act and, if required by the Company Act, any material
amendment shall also be required to be approved by such vote of the Members of
the Company as is required by the Company Act and the rules
thereunder. In advance of the Company registering as an “investment
company” under the Company Act, the parties shall amend this agreement as may be
necessary or appropriate in connection with such registration or to comply with
the requirements of the Company Act, provided, however, that the parties shall
not amend this Agreement in any manner that would require approval of the
Members if the Company were registered under the Company Act without such
approval.
20. Conflicts of
Laws. This Agreement shall be construed in accordance with the
laws of the State of Delaware, without giving effect to the conflicts of laws
principles thereof, provided, however, that nothing herein shall be construed as
being inconsistent with the Company Act (if the Company is registered as an
“investment company” under the Company Act). As used herein, the
terms “interested person,” “assignment,” and “vote of a majority of the
outstanding voting securities” shall have the meanings set forth in the Company
Act.
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21. Management of
Subsidiaries. If the Company’s Board determines that it is in
the best interests of the Company and its Members to carry on all or part of the
business of the Company through one or more subsidiaries, the Board may cause
the substantive terms of this Agreement to apply to the management of any such
subsidiary or subsidiaries.
22. Company
Obligations. This Agreement is made by the Company and
executed on behalf of the Company by a director of the Company, and the
obligations created hereby are not binding on any of the Board, officers,
Members, employees, or agents, whether past, present, or future of the Company
individually, but bind only the assets and property of the Company.
23. Severability. 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 effected thereby and, to this extent, the provisions of this Agreement shall
be deemed to be severable.
24. Counterparts. This
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, and it shall not be necessary in making proof
of this Agreement to produce or account for more than one such
counterpart.
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IN
WITNESS WHEREOF, the parties have executed this Agreement by their officers
thereunto duly authorized as of the day and year first written
above.
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By:
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Name:
Xxxxxxxxxxx Xxxxx
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Title:
Director
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FEG
INVESTORS, LLC
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By:
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Name:
Xxxxxxxxxxx Xxxxx
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Title:
President
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