Exhibit 10
                                                                 ----------

                      INVESTMENT SUB-ADVISORY AGREEMENT

            INVESTMENT SUB-ADVISORY AGREEMENT (the "Agreement") dated as of
December 21, 2001 by and among Excelsior Venture Partners III, LLC, a
Delaware limited liability company (the "Company"), U.S. Trust Company
("UST"), a Connecticut state bank and trust company and U.S. Trust Company,
N.A. ("USTNA"), a national banking association.

            WHEREAS, the Company is a closed-end, management investment
company that has elected to be treated as a business development company
under the Investment Company Act of 1940, as amended;

            WHEREAS, UST is the investment adviser to the Company;

            WHEREAS, United States Trust Company of New York ("USTNY") has
heretofore been retained by UST to render investment sub-advisory services,
and UST desires to retain USTNY in such capacity;

            WHEREAS, UST desires to retain USTNA to render additional
investment sub-advisory services to the Company, and USTNA is willing to so
render such services.

            NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, it is agreed between the parties hereto as
follows:

            1. Definitions. As used in this Agreement, the following terms
have the meanings set forth below:

            (a) "Board of Managers" means the board of managers of the
Company;

            (b) "Company" means Excelsior Venture Partners III, LLC;

            (c) "Disabling Conduct" means, on the part of the investment
sub-adviser, any willful misfeasance, bad faith, or gross negligence in the
performance of its duties owed to the Company, or reckless disregard of its
obligations and duties owed to the Company;

            (d) "Disinterested Manager" has the meaning set forth in Section 10
hereof;

            (e) "Exchange Act" means the Securities Exchange Act of 1934, as
amended;

            (f) "Indemnified Person" has the meaning set forth in
Section 10 hereof;

            (g) "Investment Company Act" means the Investment Company Act of
1940, as amended;

            (h) "Investment Advisory Agreement" means the agreement between
the Company and UST dated as of May 11, 2001

            (i) "Manager" means any member of the Board of Managers;

            (j) "Operating Agreement" means the Limited Liability Company
Operating Agreement of the Company;

            (k) "Registration Statement" means the Registration Statement of
the Company under the Securities Act (File No. 333-30986);

            (l) "Securities Act" means the Securities Act of 1933, as
amended;

            (m) "Unit" has the meaning set forth in the Operating Agreement.

            (n) "UST" means U.S. Trust Company;

            (o) "USTNA" means U.S Trust Company of California;

            (p) "USTNY" means United States Trust Company of New York.

            2.   Appointment. UST hereby appoints USTNA to act as investment
sub-adviser to the Company for the period and on the terms set forth in this
Agreement. USTNA accepts such appointment and agrees to render the services
herein set forth for the compensation herein provided. USTNA may, in its
discretion, provide such services through its own employees or the employees
of one or more affiliated companies that are qualified to act as investment
sub-adviser to the Company under applicable law and are under the common
control of U.S. Trust Corporation provided (i) that all persons, when
providing services hereunder, are functioning as part of an organized group
of persons, and (ii) the use of an affiliate's employees does not result in
an assignment of this agreement under the Investment Company Act; and (iii)
the use of an affiliate's employees has been approved by the Board of
Managers of the Company.

            3.   Delivery of Documents. UST has furnished USTNA with copies
properly certified or authenticated of each of the following:

            (a) Certificate of Formation of the Company dated
February 18, 2000;

            (b) Operating Agreement;

            (c) Investment Advisory Agreement;

            (d) Resolutions of the Board of Managers of the Company
authorizing the appointment of UST as the investment adviser for the Company
and the execution and delivery of the Investment Advisory Agreement;

            (e) Resolutions of the Board of Managers of the Company
authorizing the appointment of USTNA as the Company's investment sub-adviser
and the execution and delivery of this Agreement; and

            (f) the Registration Statement.

            UST will furnish USTNA from time to time with copies of all
amendments of or supplements to the foregoing, if any.

            4.  Sub-Advisory Services. Subject to the supervision of the Board
of Managers of the Company and the oversight of UST, at the request of UST,
USTNA will provide a continuous investment program for the Company, including
investment research and management with respect to all securities and
investments of the Company. At the request of UST, USTNA will determine what
securities and other investments will be purchased, retained or sold by the
Company. At the request of UST, USTNA will perform any or all of the other
duties of UST under the Investment Advisory Agreement. USTNA will provide the
services rendered by it hereunder in accordance with the Company's investment
objectives and policies as stated in the Prospectus, the Company's policies
and procedures and the requirements applicable to UST under the Investment
Advisory Agreement. USTNA further agrees that it:

            (a) will conform with all applicable rules and regulations of the
Securities and Exchange Commission, and will in addition conduct its
activities under this Agreement in accordance with applicable law, including
but not limited to applicable banking law;

            (b) will not make loans for the purpose of purchasing or carrying
Company Units, or make loans to the Company;

            (c) will place orders pursuant to its investment determinations
for the Company either directly with the issuer or with any broker or dealer
selected by it. In placing orders with brokers and/or dealers, USTNA shall
use its best efforts to obtain the most favorable execution of its orders,
after taking into account all factors it deems relevant, including the
breadth of the market in the security, the price of the security, the
financial condition and execution capability of the broker and/or dealer, and
the reasonableness of the commission, if any, both for the specific
transaction and on a continuing basis. Consistent with this obligation, USTNA
may, to the extent permitted by law, purchase and sell portfolio securities
to and from brokers who provide brokerage and research services (within the
meaning of Section 28(e) of the Exchange Act) to or for the benefit of the
Company and/or other accounts over which USTNA or any of its affiliates
exercises investment discretion. USTNA is authorized to pay to a broker who
provides such brokerage and research services a commission for effecting a
securities transaction which is in excess of the amount of commission another
broker would have charged for effecting that transaction if USTNA determines
in good faith that such commission was reasonable in relation to the value of
the brokerage and research services provided by such broker. This
determination may be viewed in terms of either that particular transaction or
of the overall responsibilities of USTNA with respect to the accounts as to
which it exercises investment discretion;

            (d) will maintain books and records with respect to the
securities and other investment transactions entered into pursuant to this
Agreement and will render to UST and the Company's Board of Managers such
periodic and special reports as they may request;

            (e) will treat confidentially and as proprietary information of
the Company all records and other information relative to the Company and
prior, present 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 Company, which approval shall not be unreasonably withheld and
may not be withheld where USTNA 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 Company. Nothing
contained herein, however, shall prohibit USTNA from advertising or
soliciting the public generally with respect to other products or services,
regardless of whether such advertisement or solicitation may include prior,
present or potential shareholders of the Company.

            5.   Services Not Exclusive. The investment sub-advisory services
rendered by USTNA hereunder are not to be deemed exclusive, and USTNA shall
be free to render similar services to others so long as its services under
this Agreement are not impaired thereby.

            6.   Books and Records. USTNA shall provide the Company with all
records concerning USTNA's activities that the Company is required by law to
maintain. Any records required to be maintained and preserved pursuant to the
provisions of Rule 31a-1 and Rule 31a-2 under the Investment Company Act
which are prepared or maintained by USTNA on behalf of the Company are the
property of the Company and will be surrendered promptly to the Company on
request. The Company also shall comply with all reasonable requests for
information by the Company's officers or Board of Managers, including
information required for the Company's filings with the Securities and
Exchange Commission and state securities commissions.

            7.   Expenses.

            (a) USTNA shall furnish, at its own expense, all office space,
office facilities, equipment and personnel necessary or appropriate to the
performance of its duties under this Agreement. USTNA shall pay the salaries
and fees of all officers and employees of the Company performing services
related to USTNA's duties under this Agreement.

            (b) It is understood that the Company will pay all of its
expenses and liabilities, including all of such fees and expenses as set
forth in the Investment Advisory Agreement.

            8.   Compensation. For the services provided and the expenses
assumed pursuant to this Agreement, UST will pay USTNA a fee or fees as may
be agreed to in writing by UST and USTNA.

            9.   Limitation of Liability of the Investment Sub-Adviser.

            (a) USTNA hereby is notified expressly of the limitation of
Managers' liability as set forth in the Operating Agreement and agrees that
any obligation of the Company arising in connection with this Agreement shall
be limited in all cases to the Company and its assets, and USTNA shall not
seek satisfaction of any such obligation from any Manager of the Company.

            (b) USTNA shall give the Company the benefit of its best judgment
and efforts in rendering services under this Agreement. In the absence of
Disabling Conduct, USTNA shall not be liable to the Company or to any member
of the Company or any other person for any act or omission in the course of,
or connected with, rendering services under this Agreement or for any losses
that may be sustained in the purchase, holding or sale of any security.

            10.   Indemnification. The Company will indemnify USTNA, its
affiliates and each of their officers, directors, employees, members and
agents (each an "Indemnified Person") against, and hold each of them harmless
from, any and all losses, claims, damages, liabilities or expenses (including
reasonable counsel fees and expenses) incurred by any of them in connection
with or resulting from the actions or inactions of any Indemnified Person in
connection with the performance of or under this Agreement not resulting from
Disabling Conduct by the respective Indemnified Person. Indemnification shall
be made only following: (i) a final decision on the merits by a court or
other body before whom the proceeding was brought that the Indemnified Person
was not liable by reason of Disabling Conduct; or (ii) in the absence of such
a decision, a reasonable determination, based upon a review of the facts,
that the Indemnified Person was not liable by reason of Disabling Conduct by
(a) the vote of a majority of a quorum of Managers of the Company who are not
"interested persons" of USTNA ("Disinterested Managers") or (b) independent
legal counsel in a written opinion. The Indemnified Person shall be entitled
to advances from the Company for payment of the reasonable expenses incurred
by it in connection with the matter as to which it is seeking indemnification
in the manner and to the fullest extent permissible under the Delaware
Limited Liability Company Act. The Indemnified Person shall provide to the
Company a written affirmation of its good faith belief that the standard of
conduct necessary for indemnification by the Company has been met and a
written undertaking to repay any such advance if it should ultimately be
determined that the standard of conduct has not been met. In addition, at
least one of the following additional conditions shall be met: (a) the
Indemnified Person shall provide security in form and amount acceptable to
the Company for its undertaking; (b) the Company is insured against losses
arising by reason of the advance; or (c) a majority of a quorum of
Disinterested Managers, or independent legal counsel, in a written opinion,
shall have determined, based on a review of facts readily available to the
Company at the time the advance is proposed to be made, that there is reason
to believe that the Indemnified Person will ultimately be found to be
entitled to indemnification.

            No provision of this Agreement shall be construed to protect any
Indemnified Person from liability in violation of Section 17(h) or (i) of the
Investment Company Act.

            11. Effective Date; Termination; Amendments.

            (a) This Agreement shall be effective as of the date first above
written and, unless terminated sooner as provided herein, shall continue
until the second anniversary of the execution of this Agreement. Thereafter,
unless terminated sooner as provided herein, this Agreement shall continue in
effect for successive annual periods, provided that such continuance is
specifically approved at least annually by the vote of a majority of the
Board of Managers of the Company 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 continuance, and either: (i) the vote of a
majority of the outstanding voting securities of the Company; or (ii) the
vote of a majority of the full Board of Managers.

            (b) This Agreement may be terminated at any time, without the
payment of any penalty, either by: (i) the Company, by action of the Board of
Managers or by vote of a majority of the outstanding voting securities of the
Company, on 60 days' written notice to USTNA; or (ii) USTNA, on 90 days'
written notice to the Company. This Agreement shall terminate immediately in
the event of its assignment.

            (c) An affiliate of USTNA may assume USTNA's obligations under
this Agreement provided that: (i) the affiliate is qualified to act as an
investment sub-adviser to the Company under applicable law; (ii) the
assumption will not result in a change of actual control or management of
USTNA; and (iii) the assumption of USTNA's obligations by the affiliate is
approved by the Board of Managers of the Company.

            (d) This Agreement may be amended only if such amendment is
approved, to the extent required by the Investment Company Act, by the vote
of a majority of the outstanding voting securities of the Company and by vote
of a majority of the Board of Managers 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 amendment.

            (e) As used in this Agreement, the terms "specifically approved
at least annually," "majority of the outstanding voting securities,"
"interested persons" and "assignment" shall have the same meanings as such
terms have in the Investment Company Act and the regulations thereunder.

            12. Notices. All notices and other communications hereunder shall
be in writing or by confirm in telegram, cable, telex, or facsimile sending
device. Notices shall be addressed: (a) if to USTNA, to: U.S. Trust Company,
N.A., 5 Palo Alto Square, 9th Floor, 3000 El Camino Road, Palo Alto,
California 94306; (b) if to UST, to: U.S. Trust Company, 225 High Ridge Road,
Stamford, Connecticut 06905; or (c) if to the Company, to: Excelsior Venture
Partners III, LLC, 114 W. 47th Street, New York, New York 10036, Attn: David
I. Fann.

            13. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York without giving effect to
the choice of law provisions thereof, to the extent that such laws are
consistent with the provisions of the Investment Company Act and the
regulations thereunder.

            14. Miscellaneous. The captions in this Agreement are included
for the convenience of reference only and in no way define or delimit any of
the provisions hereof or otherwise affect their construction or effect.
Should any part of this Agreement be held or made invalid by a court
decision, statute, regulation, or otherwise, the remainder of this Agreement
shall not be affected thereby. This Agreement shall be binding and shall
inure to the benefit of the parties hereto and their respective successors,
to the extent permitted by law.



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

                                   EXCELSIOR VENTURE PARTNERS III, LLC


                                   By: ____________________________________
                                       Name:   David I. Fann
                                       Title:  Co-Chief Executive Officer



                                   U.S. TRUST COMPANY


                                   By: ____________________________________
                                       Name:
                                       Title:



                                   U.S. TRUST COMPANY, N.A.


                                   By: ____________________________________
                                       Name:
                                       Title: