PLACEMENT AGENT AGREEMENT
September , 2006
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxx Xxxxxxx XX Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
Hatteras Multi-Strategy TEI Fund , L.P., a Delaware limited partnership
(the "FUND"), is offering and selling its limited partnership interests (the
"INTERESTS") on a private placement basis exempt from the registration
requirements of the Securities Act of 1933 (the "SECURITIES ACT") pursuant to
Section 4(2) and Regulation D thereunder ("REGULATION D"). The Fund will offer
and sell the Interests in accordance with the terms of the Fund's confidential
memorandum, including any supplements thereto approved by the Fund (the
"MEMORANDUM"), the Fund's subscription documents (the "SUBSCRIPTION AGREEMENTS")
and other investor materials or supplements approved for use or prepared by the
Fund including, but not limited to, any advertisements and promotional
materials, all as amended from time to time (collectively, the "OFFERING
DOCUMENTS") and the Fund's organizational documents (as amended or supplemented
from time to time, "ORGANIZATIONAL DOCUMENTS") (collectively, the "OFFERING
MATERIALS").
The Fund has invested, and will invest, substantially all of its
assets, through Hatteras Multi-Strategy Offshore Fund, LDC, a Cayman Islands
limited duration company (the "Offshore Fund"), in Hatteras Master Fund, L.P., a
Delaware limited partnership (the "MASTER FUND"). Hatteras Investment Management
LLC, a Delaware limited liability company (the "GENERAL PARTNER"), serves as the
general partner of the Fund and the Master Fund, and Hatteras Investment
Partners LLC, a Delaware limited liability company (the "MANAGER") manages the
Master Fund.
Each of the Fund and the Master Fund is registered with the Securities
and Exchange Commission (the "COMMISSION") as an "investment company" under the
Investment Company Act of 1940 (the "INVESTMENT COMPANY ACT"), and the Manager
is registered with the Commission as an "investment adviser" under the
Investment Advisers Act of 1940 (the "ADVISERS ACT").
The Fund desires to retain Xxxxxx Xxxxxxx & Co. Incorporated ("MS&CO.")
and Xxxxxx Xxxxxxx XX Inc. ("MSDW") to introduce prospective investors to the
Fund. As used in this Agreement, the term MS or MS ENTITY shall mean MS&Co. and
MSDW.
1. Appointment of MS.
(a) MS is hereby appointed as a placement agent of the Fund during the
term of this Agreement for the purpose of finding eligible investors for
the Interests through an offering that is exempt from registration under
the Securities Act, pursuant to Section 4(2) thereof and Regulation D.
(b) Subject to the performance by the Fund and the General Partner of
their obligations hereunder, MS hereby accepts such appointment and agrees
on the terms and conditions set forth herein to use such efforts, as it
deems appropriate in its sole discretion, to find eligible investors for
Interests during the term hereof. MS will have no obligation to offer or
sell any Interests.
2. Offering and Sale of Interests.
(a) MS will request Offering Documents, as amended as of such time,
through the Fund's web-based document management and delivery software for
each person to whom MS makes an offer of the Interests. The Fund, at no
cost to MS, will deliver to MS the Offering Documents that have been
clearly identified with control numbers, bar codes and the name of the
person for whom the Offering Documents are specifically created by the Fund
via electronic mail which will include a link to the Offering Documents and
the appropriate disclaimers that must be accepted by each person prior to
accessing the Offering Documents, or regular mail as requested by MS. The
Fund will be responsible for assigning control numbers to the Offering
Documents, and maintaining the name of the person entered in the sign-in
page prior to accessing the Offering Documents and the internet protocol
address provided by each machine that accesses the link to the Offering
Documents to the extent that such internet protocol address can be
reasonably determined. The Fund will promptly provide the name of the
person entered in the sign-in page prior to accessing the Offering
Documents and, if reasonably available, the internet protocol address
provided by each machine that accesses the link to the Offering Documents
to MS upon request. For the avoidance of doubt, this Agreement shall not
require the Fund from the date set forth above to make modifications to its
web-based document and delivery software at the request of MS.
(b) At the time of solicitation, MS will deliver to each person to
whom MS makes an offer of the Interests either the (i) electronic mail
received from the Fund including a link to the Offering Documents and the
appropriate disclaimers that must be accepted by each person prior to
accessing the Offering Documents, or (ii) copies of the specific Offering
Documents provided to MS by the Fund, and in each case MS will also deliver
a copy of the supplemental disclosure form substantially in the form
attached hereto as Exhibit A.
(c) No MS Entity will make any offer of Interests on the basis of any
communications or documents relating to the Fund or the Interests, except
the Offering Materials, any other documents supplied or prepared by the
Fund, the Manager or the General Partner and delivered to MS by the Fund,
the Manager or the General Partner for use in making an offer of Interests,
or any other materials expressly approved for such use by the Fund, the
General Partner or the Manager in writing.
(d) No MS Entity will use any form of "general solicitation" or
"general advertising" (within the meaning of Rule 502 of Regulation D) in
making offers of Interests, including any advertisement, article, notice or
other communication published in any newspaper, magazine or similar media
or broadcast over television or radio, or any seminar or meeting whose
attendees have been invited by any general solicitation or advertising.
(e) Each MS Entity will reasonably believe immediately prior to making
any offer of Interests that any prospective investor solicited by MS is an
"accredited investor," as that term is defined in Rule 501(a) of Regulation
D, is a "qualified client," as that term is defined in the Advisers Act,
and meets such other eligibility criteria as are set forth in the Offering
Documents. The Fund will be responsible for the timely filing with the
Commission of any notices required by Rule 503 of Regulation D.
(f) The Fund and the General Partner will be responsible for the
registration or qualification of Interests under all applicable laws, rules
or regulations. The Fund and the General Partner will use reasonable
efforts to register or qualify the Interests in each jurisdiction,
including each state of the United States, Interests are offered by MS. If
Interests may not be offered in any particular jurisdiction because the
Interest have not been so registered or qualified, the Fund and the General
Partner will promptly notify MS. MS assumes no responsibility or obligation
with respect to the registration or qualification of Interests under the
laws of any jurisdiction.
(g) The Fund will provide, promptly and at no cost to MS a reasonable
quantity of copies of the Offering Materials and such other materials as MS
is required to provide to prospective investors under this agreement. If
any Offering Materials are amended or supplemented, the Fund will promptly
notify MS, and provide copies of such amendments or supplements in
accordance with the preceding sentence.
(h) All subscriptions to the Fund submitted by or through MS will be
subject to the approval by the Fund and the General Partner. The Fund and
the General Partner have the ultimate responsibility to determine whether a
prospective investor meets all applicable private placement accreditation,
minimum investment, and other qualification requirements necessary to
invest in the Fund. Subject to the foregoing, the General Partner and the
Fund will not unreasonably reject or delay accepting a subscription
submitted by MS if the prospective investor otherwise meets the eligibility
criteria set forth in the Offering Materials.
3. Compensation.
(a) MS shall charge each investor introduced by MS that invests in the
Fund (a "MS CLIENT") an upfront placement fee (the "UPFRONT PLACEMENT FEE")
as set forth in Schedule I hereto. The Upfront Placement Fee is payable to
MS simultaneously upon the relevant closing. This Upfront Placement Fee
will not constitute part of the MS Client's capital contribution to the
Fund. None of the Fund, the General Partner, or the Manager shall have the
right to reduce or waive any of the Upfront Placement Fees payable by MS
Clients to MS. The Fund and the General Partner agree that each MS Entity,
including any affiliate of MS, reserves the right to reduce or waive the
Upfront Placement Fee with respect to any of their respective MS Clients so
long as the General Partner is notified of the reduction or waiver of such
fee at the Fund's closing.
(b) MS may allocate all or a portion of its fees to its affiliates.
The Fund and the General Partner agree that each MS Entity, including any
affiliate of MS, reserves the right to reduce or waive its fee with respect
to a MS Client.
(c) The Fund and the General Partner will each bear its own expenses
in connection with the solicitation of prospective investors, including
expenses of preparing, reproducing, mailing and/or delivering Offering
Materials.
4. Representations, Warranties and Agreements of the Fund. The Fund represents
and warrants to MS and agrees with MS as follows:
(a) Each of the Fund, the Offshore Fund and the Master Fund is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its formation or organization, and each of the foregoing
has full power and authority under applicable laws, rules or regulations to
conduct its business as contemplated by the Offering Materials.
(b) The execution, delivery and performance of this Agreement have
been duly authorized by all necessary action of the Fund.
(c) The execution, delivery and performance of this Agreement, the
incurrence of the obligations set forth herein and the consummation of the
transactions contemplated herein and in the Offering Materials, including
the issuance and sale of Interests, will not constitute a breach of or
default under any agreement or instrument by which the Fund is bound, or to
which any of its assets is subject, or any order, rule or regulation
applicable to it of any court or any governmental body or administrative
agency having jurisdiction over it.
(d) There is not pending or, to the best knowledge of the Fund
threatened, any action, suit or proceeding before or by any court or other
governmental body to which the Fund, the Offshore Fund or the Master Fund
is a party, or to which any of their assets is subject, which might
reasonably be expected to result in any material adverse change in the
condition, financial or otherwise, business or prospects of the Fund, the
Offshore Fund or the Master Fund. The Fund has not received any notice of
an investigation regarding non-compliance by the Fund, the Offshore Fund or
the Master Fund with applicable laws, rules or regulations.
(e) The description of Interests contained in the Offering Materials
conforms in all material respects to the applicable provisions of the
Organizational Documents.
(f) The Offering Materials, as of the date hereof do not, and at any
subsequent time during the term of this Agreement, as amended or
supplemented, if applicable, will not contain any untrue statement of a
material fact, or omit to state any material fact required to be stated
therein or necessary in order to make the statements contained therein, in
light of the circumstances under which they are made, not misleading.
(g) The Interests have been duly authorized for issuance and sale,
and, when issued and paid for in the amounts and for the consideration
described in the Offering Materials, will be entitled to the rights and
subject to the restrictions and conditions contained in the Organizational
Documents; no investor will be personally liable for the debts of and
claims against the Fund by the mere reason of being an investor; and all
necessary action required to be taken for authorization, issue and sale of
the Interests has been validly and sufficiently taken.
(h) It is not necessary in connection with the offer, sale and
delivery of Interests to investors in the manner contemplated by this
Agreement to register Interests under the Securities Act or the laws of any
other jurisdiction. The Fund will conduct itself, and take reasonable
measures to ensure that its agents (other than MS) conduct themselves, in a
manner consistent with the exemption from registration under Section 4(2)
of the Securities Act and Regulation D and, without limitation, will not
use, or permit any other person to use, any form of general solicitation or
general advertising in making offers of Interests.
(i) The Fund will extend to any investor introduced by MS the
opportunity prior to such investor's subscribing for an Interest to ask
questions of, and receive answers from, the Fund concerning the Interests
and the terms and conditions of the Offering, and to obtain any information
that such investors may consider necessary in making an informed investment
decision.
(j) The Fund acknowledges that in performing the services contemplated
hereby, MS will be entitled to rely upon and assume, without independent
verification, the accuracy and completeness of all information that is
available from public sources and all information that has been provided to
it by, or on behalf of, the Fund or the General Partner, and that MS has no
obligation to verify the accuracy or completeness of any such information
and will have no liability to the Fund, or any third party for any
information contained in the Offering Materials.
(k) The performance numbers contained in the Offering Materials are
accurate and complete in all material respects.
(l) The representations and warranties set forth in this Agreement are
continuing during the term of this Agreement and the Fund agrees to notify
MS promptly in writing if at any time during the term of this Agreement,
any such representation or warranty becomes inaccurate or untrue and of the
facts related thereto.
(m) Each of the Fund and the Offshore Fund will not trade commodity
interests directly. The Fund has invested, and will invest, substantially
all of its assets through the Offshore Fund in the Master Fund and the
Master Fund will allocate no more than 50% of its assets to investment
vehicles or managed accounts that trade commodity interests.
(n) (1) The Fund has filed with the Commission a notification on Form
N-8A of registration of the Fund as an investment company and a
registration statement on Form N-2, including the Memorandum and a
statement of additional information incorporated by reference in the
Memorandum, relating to the Interests. The registration statement as
amended at the time it becomes effective is hereinafter referred to as the
"REGISTRATION STATEMENT").
(2) The Master Fund has filed with the Commission a
notification on Form N-8A of registration of the Master Fund as an investment
company and a registration statement on Form N-2. The registration statement as
amended at the time it becomes effective is hereinafter referred to as the
"MASTER FUND REGISTRATION STATEMENT".
(o) (1) The Registration Statement, when it became effective, did not
contain and, as amended or supplemented, if applicable, will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading; and the Registration Statement and the Memorandum comply
and, as amended or supplemented, if applicable, will comply in all material
respects with the Investment Company Act and the applicable rules and
regulations thereunder.
(2) The Master Fund Registration Statement, when it became
effective, did not contain and, as amended or supplemented, if applicable, will
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading; and the Master Fund Registration Statement complies and, as
amended or supplemented, if applicable, will comply in all material respects
with the Investment Company Act and the applicable rules and regulations
thereunder.
(p) (1) The Fund is registered with the Commission as a
non-diversified, closed-end management investment company under the
Investment Company Act and no order of suspension or revocation of such
registration has been issued and no proceedings therefor have been
initiated or threatened by the Commission. No person is serving or acting
as an officer or director of, or investment adviser to, the Fund except in
accordance with the provisions of the Investment Company Act and the
Advisers Act. Except as otherwise disclosed in the Registration Statement
and the Memorandum, no director of the Fund is an "interested person" of
the Fund or an "affiliated person" of MS (each, as defined in the
Investment Company Act).
(2) The Master Fund is registered with the Commission as a
non-diversified, closed-end management investment company under the Investment
Company Act and no order of suspension or revocation of such registration has
been issued and no proceedings therefor have been initiated or threatened by the
Commission. No person is serving or acting as an officer or director of, or
investment adviser to, the Master Fund except in accordance with the provisions
of the Investment Company Act and the Advisers Act. Except as otherwise
disclosed in the Registration Statement and the Memorandum, no director of the
Master Fund is an "interested person" of the Master Fund or an "affiliated
person" of MS (each, as defined in the Investment Company Act).
(q) Each of the agreement under which the Manager provides day-to-day
investment management services to the Master Fund (the "MANAGEMENT
AGREEMENT"), the agreement under which UMB Fund Services, Inc. provides
administrative services to the Master Fund (the "ADMINISTRATION
AGREEMENT"), and the agreements under which UMB Bank, N.A. (the
"CUSTODIAN") serves as custodian for the assets of the Fund and the Master
Fund (the "CUSTODY AGREEMENT") (collectively, the "FUNDAMENTAL AGREEMENTS")
has been duly authorized, executed and delivered by the Fund or the Master
Fund, as the case may be, and complies in all material respects with all
applicable provisions of the Investment Company Act, the Advisers Act and
the applicable rules and regulations thereunder. Each Fundamental Agreement
is a valid and binding agreement of the Fund, or the Master Fund, as
applicable, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights
generally and equitable principles of general applicability.
(r) All advertisements and promotional materials authorized in writing
by the Fund for use in the offering of the Interests complied and will
comply in all material respects with the requirements of the Investment
Company Act and the applicable rules and regulations thereunder and the
rules and regulations of the NASD.
(s) The expense summary information set forth in the Memorandum and
the Master Fund Registration Statement has been prepared in accordance with
the requirements of Form N-2 and any fee projections or estimates, if
applicable, are reasonably based and attainable.
(t) The Offering Materials and the Fundamental Agreements comply in
all material respects with all applicable provisions of the Investment
Company Act and the applicable rules and regulations thereunder, and all
approvals of such documents required under the Investment Company Act by
the holders of Interests in the Fund and the Master Fund and Board of
Directors of the Fund and the Master Fund have been obtained and are in
full force and effect.
(u) The Fundamental Agreements are in full force and effect and
neither the Fund, the Master Fund nor any other party to any such agreement
is in default thereunder, and no event has occurred which with the passage
of time or the giving of notice or both would constitute a default
thereunder. None of the Fund, the Offshore Fund or the Master Fund is
currently in breach of, or in default under, any other written agreement or
instrument to which it or its property is bound or affected.
(v) The Fund acknowledges that MS enters into this Agreement in
reliance on the representations, warranties and agreements of the Fund
contained herein.
5. Representations, Warranties and Agreements of the General Partner. The
General Partner represents and warrants to and agrees with, MS as follows:
(a) Each of the Fund, the Offshore Fund, the Master Fund, and the
General Partner is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its formation or organization, and
each of the foregoing has full power and authority under applicable laws,
rules or regulations to conduct their business as contemplated by the
Offering Materials.
(b) The execution, delivery and performance of this Agreement have
been duly authorized by all necessary action of the Fund and the General
Partner.
(c) The execution, delivery and performance of this Agreement, the
incurrence of the obligations set forth herein and the consummation of the
transactions contemplated herein and in the Offering Materials, including
the issuance and sale of Interests, will not constitute a breach of or
default under any agreement or instrument by which the Fund or the General
Partner is bound, or to which any of their assets is subject, or any order,
rule or regulation applicable to any of them of any court or any
governmental body or administrative agency having jurisdiction over any of
them.
(d) There is not pending or, to the best knowledge of the General
Partner threatened, any action, suit or proceeding before or by any court
or other governmental body to which the Fund, the Offshore Fund, the Master
Fund, the General Partner or the Manager or any of their respective
affiliates is a party, or to which any of their assets is subject, which
might reasonably be expected to result in any material adverse change in
the condition, financial or otherwise, business or prospects of the Fund,
the Offshore Fund, the Master Fund, the General Partner or the Manager.
Neither the Fund nor the General Partner, nor any of their respective
affiliates, has received any notice of an investigation regarding
non-compliance by the Fund, the Offshore Fund, the Master Fund, the General
Partner or the Manager or any of their respective affiliates with
applicable laws, rules or regulations.
(e) The description of Interests contained in the Offering Materials
conforms in all material respects to the applicable provisions of the
Organizational Documents.
(f) The Offering Materials, as of the date hereof do not, and at any
subsequent time during the term of this Agreement, as amended or
supplemented, if applicable, will not contain any untrue statement of a
material fact, or omit to state any material fact required to be stated
therein or necessary in order to make the statements contained therein, in
light of the circumstances under which they are made, not misleading. Any
forecasted financial, market or industry information contained in the
Offering Materials is based on reasonable good faith estimates of the
General Partner and/or the Manager.
(g) The Interests have been duly authorized for issuance and sale,
and, when issued and paid for in the amounts and for the consideration
described in the Offering Materials, will be entitled to the rights and
subject to the restrictions and conditions contained in the Organizational
Documents; no investor will be personally liable for the debts of and
claims against the Fund by the mere reason of being an investor; and all
necessary action required to be taken for authorization, issue and sale of
the Interests has been validly and sufficiently taken.
(h) It is not necessary in connection with the offer, sale and
delivery of Interests to investors in the manner contemplated by this
Agreement to register Interests under the Securities Act or the laws of any
other jurisdiction. The General Partner will conduct itself, and take
reasonable measures to ensure that its respective agents (other than MS)
conduct themselves, in a manner consistent with the exemption from
registration under Section 4(2) of the Securities Act and Regulation D and,
without limitation, will not use, or permit any other person to use, any
form of general solicitation or general advertising in making offers of
Interests.
(i) The General Partner will extend to any investor introduced by MS
the opportunity prior to such investor's subscribing for an Interest to ask
questions of, and receive answers from the General Partner and the Manager
concerning the Interests and the terms and conditions of the Offering, and
to obtain any information that such investors may consider necessary in
making an informed investment decision.
(j) The General Partner acknowledges that in performing the services
contemplated hereby, MS will be entitled to rely upon and assume, without
independent verification, the accuracy and completeness of all information
that is available from public sources and all information that has been
provided to it by, or on behalf of, the General Partner, and that MS has no
obligation to verify the accuracy or completeness of any such information
and will have no liability to the Fund, the General Partner, or any third
party for any information contained in the Offering Materials.
(k) The performance numbers contained in the Offering Materials are
accurate and complete in all material respects.
(l) The representations and warranties set forth in this Agreement are
continuing during the term of this Agreement and the General Partner agrees
to notify MS promptly in writing if at any time during the term of this
Agreement, any such representation or warranty becomes inaccurate or untrue
and of the facts related thereto.
(m) Each of the Fund and the Offshore Fund will not trade commodity
interests directly. The Fund has invested, and will invest, substantially
all of its assets through the Offshore Fund in the Master Fund and the
Master Fund will allocate no more than 50% of its assets to investment
vehicles or managed accounts that trade commodity interests.
(n) (1) The Fund has filed with the Commission a notification on Form
N-8A of registration of the Fund as an investment company and the
Registration Statement on Form N-2, including the Memorandum and a
statement of additional information incorporated by reference in the
Memorandum, relating to the Interests.
(2) The Master Fund has filed with the Commission a
notification on Form N-8A of registration of the Master Fund as an investment
company and the Master Fund Registration Statement on Form N-2.
(o) (1) The Registration Statement, when it became effective, did not
contain and, as amended or supplemented, if applicable, will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading; and the Registration Statement and the Memorandum comply
and, as amended or supplemented, if applicable, will comply in all material
respects with the Investment Company Act and the applicable rules and
regulations thereunder.
(2) The Master Fund Registration Statement, when it became
effective, did not contain and, as amended or supplemented, if applicable, will
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading; and the Master Fund Registration Statement complies and, as
amended or supplemented, if applicable, will comply in all material respects
with the Investment Company Act and the applicable rules and regulations
thereunder.
(p) (1) The Fund is registered with the Commission as a
non-diversified, closed-end management investment company under the
Investment Company Act and no order of suspension or revocation of such
registration has been issued and no proceedings therefor have been
initiated or threatened by the Commission. No person is serving or acting
as an officer or director of, or investment adviser to, the Fund except in
accordance with the provisions of the Investment Company Act and the
Advisers Act. Except as otherwise disclosed in the Registration Statement
and the Memorandum, no director of the Fund is an "interested person" of
the Fund or an "affiliated person" of MS (each, as defined in the
Investment Company Act).
(2) The Master Fund is registered with the Commission as a
non-diversified, closed-end management investment company under the Investment
Company Act and no order of suspension or revocation of such registration has
been issued and no proceedings therefor have been initiated or threatened by the
Commission. No person is serving or acting as an officer or director of, or
investment adviser to, the Master Fund except in accordance with the provisions
of the Investment Company Act and the Advisers Act. Except as otherwise
disclosed in the Registration Statement and the Memorandum, no director of the
Master Fund is an "interested person" of the Master Fund or an "affiliated
person" of MS (each, as defined in the Investment Company Act).
(q) Each of the agreement under which the Manager provides day-to-day
investment management services to the Master Fund (the "MANAGEMENT
AGREEMENT"), the agreement under which UMB Fund Services, Inc. provides
administrative services to the Master Fund (the "ADMINISTRATION
AGREEMENT"), and the agreements under which UMB Bank, N.A. (the
"CUSTODIAN") serves as custodian for the assets of the Fund and the Master
Fund (the "CUSTODY AGREEMENT") (collectively, the "FUNDAMENTAL AGREEMENTS")
has been duly authorized, executed and delivered by the Fund or the Master
Fund, as the case may be, and complies in all material respects with all
applicable provisions of the Investment Company Act, the Advisers Act and
the applicable rules and regulations thereunder. Each Fundamental Agreement
is a valid and binding agreement of the Fund, or the Master Fund, as
applicable, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights
generally and equitable principles of general applicability.
(r) All advertisements and promotional materials authorized in writing
by the Fund for use in the offering of the Interests complied and will
comply in all material respects with the requirements of the Investment
Company Act and the applicable rules and regulations thereunder and the
rules and regulations of the NASD..
(s) The expense summary information set forth in the Memorandum and
the Master Fund Registration Statement has been prepared in accordance with
the requirements of Form N-2 and any fee projections or estimates, if
applicable, are reasonably based and attainable.
(t) The Offering Materials and the Fundamental Agreements comply in
all material respects with all applicable provisions of the Investment
Company Act and the applicable rules and regulations thereunder, and all
approvals of such documents required under the Investment Company Act by
the holders of Interests in the Fund and the Master Fund and Board of
Directors of the Fund and the Master Fund have been obtained and are in
full force and effect.
(u) The Fundamental Agreements are in full force and effect and neither the
Fund, the Master Fund nor any other party to any such agreement is in default
thereunder, and no event has occurred which with the passage of time or the
giving of notice or both would constitute a default thereunder. None of the
Fund, the Offshore Fund or the Master Fund is currently in breach of, or in
default under, any other written agreement or instrument to which it or its
property is bound or affected.
(v) The General Partner acknowledges that MS enters into this
Agreement in reliance on the representations, warranties and agreements of
the General Partner contained herein.
6. Representations, Warranties and Agreements of MS. Each MS Entity represents
and warrants to and agrees with, the Fund and the General Partner as
follows:
(a) Each MS Entity is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its formation or
organization and each MS Entity has full power and authority under
applicable laws, rules or regulations to engage in the activities
contemplated under this Agreement.
(b) The execution, delivery and performance of this Agreement have
been duly authorized by all necessary action of each MS Entity.
(c) The execution, delivery and performance of this Agreement, the
incurrence of the obligations set forth herein and the consummation of the
transactions contemplated herein will not constitute a breach of or default
under any agreement or instrument by which any MS Entity is bound, or to
which any of its assets is subject, or any order, rule or regulation
applicable to it or of any court or any governmental body or administrative
agency having jurisdiction over it.
(d) Each MS Entity has and will maintain all licenses and
registrations necessary under applicable federal and state laws, rules and
regulations, including the rules and regulation of any self-regulatory
organization with competent jurisdiction, to provide the services required
to be provided by MS hereunder.
(e) Each MS Entity will comply in all material respects with all
applicable federal and state laws, rules and regulations, including the
rules and regulation of any self-regulatory organization with competent
jurisdiction in connection with the provision of services required to be
provided by MS hereunder.
(f) MS has written compliance policies and procedures in place with
respect to private placements that are reasonably designed to ensure
compliance with Regulation D.
(g) MS will (i) maintain all records required by law to be kept by MS
relating to transactions in Interests by or on behalf of its customers and
compensation received by MS in respect thereto; (ii) upon request by the
Fund or the General Partner in connection with a governmental, court or
administrative proceeding, investigation or request, promptly make such
records available to such requesting party; and (c) promptly notify the
Fund if MS experiences any difficulty maintaining the records described in
the forgoing clause in an accurate and complete manner.
(h) Each MS Entity acknowledge that the Fund and the General Partner
enter into this Agreement in reliance on the representations, warranties
and agreements of each MS Entity contained herein.
7. Indemnification.
(a) The Fund will indemnify, hold harmless, and defend MS, its
affiliates and their respective officers, directors, partners, members,
shareholders, employees and agents from and against any losses, claims,
damages or liabilities (or actions in respect thereof) ("COVERED CLAIMS")
arising out of or relating to (i) the offer or sale of the Interests or the
management or affairs of the Fund; (ii) any untrue statement of material
fact or any omission of a material fact necessary in order to make the
statements made, in light of the circumstances under which they were made,
not misleading in any Offering Materials which include, for the avoidance
of doubt, any advertisements or promotional materials approved, published
or provided to MS by or on behalf of the Fund, or accurately derived from
information approved, published or provided to MS by or on behalf of the
Fund, (iii) any material violation of any law, rule or regulation relating
to the registration or qualification of Interests, the Fund, the Offshore
Fund or the Master Fund, (iv) any material breach by the Fund of any
representation, warranty or agreement contained in this Agreement, (v) any
material violation of any law, rule or regulation relating to the operation
of the Fund, the Offshore Fund or Master Fund or (vi) any willful
misconduct or gross negligence by the Fund, the Offshore Fund or the Master
Fund in the performance of, or failure to perform, its obligations under
this Agreement, except to the extent that any such Covered Claim is caused
by any MS Entity's breach of this Agreement or the willful misconduct or
gross negligence of any MS Entity or its affiliates in the performance of,
or failure to perform, its obligations under this Agreement.
(b) The General Partner will indemnify, hold harmless, and defend MS,
its affiliates and their respective officers, directors, partners, members,
shareholders, employees and agents from and against any Covered Claims
arising out of or relating to (i) the offer or sale of the Interests or the
management or affairs of the Fund; (ii) any untrue statement of material
fact or any omission of a material fact necessary in order to make the
statements made, in light of the circumstances under which they were made,
not misleading in any Offering Materials which include, for the avoidance
of doubt, any advertisements or promotional materials approved, published
or provided to MS by or on behalf of the Fund, the General Partner or the
Manager, or accurately derived from information approved, published or
provided to MS by or on behalf of the Fund, the General Partner or the
Manager, (iii) any material violation of any law, rule or regulation
relating to the registration or qualification of Interests, the Fund, the
Offshore Fund or the Master Fund, (iv) any material breach by the Fund or
the General Partner of any representation, warranty or agreement contained
in this Agreement, (v) any material violation of any law, rule or
regulation relating to the operation of the Fund, the Offshore Fund or
Master Fund or (vi) any willful misconduct or gross negligence by the Fund,
the Offshore Fund, the Master Fund, the General Partner or the Manager or
their respective affiliates in the performance of, or failure to perform,
its obligations under this Agreement, except to the extent that any such
Covered Claim is caused by any MS Entity's breach of this Agreement or the
willful misconduct or gross negligence of any MS Entity or its affiliates
in the performance of, or failure to perform, its obligations under this
Agreement.
(c) Each MS Entity will, severally and not jointly, indemnify, hold
harmless, and defend the Fund, the General Partner, their respective
affiliates and each of their respective officers, directors, partners,
members, shareholders, employees and agents from and against any Covered
Claims arising out of or relating to (i)any untrue statement of material
fact or any omission of a material fact necessary in order to make the
statements made, in light of the circumstances under which they were made,
not misleading in any Offering Materials which include, for the avoidance
of doubt, any advertisements or promotional materials, but only to the
extent that such statement or omission relates to an MS Entity and is based
upon information furnished to the Fund in writing by such MS Entity for use
in the Offering Materials, (ii) any material violation of any law, rule or
regulation by an MS Entity, (iii) any material breach by an MS Entity of
any representation, warranty or agreement contained in this Agreement, or
(iv) any willful misconduct or gross negligence by an MS Entity or their
respective affiliates in the performance of, or failure to perform, its
obligations under this Agreement, except to the extent that any such
Covered Claim is caused by the Fund's or the General Partner's breach of
this Agreement or the willful misconduct or gross negligence of any the
Fund, the General Partner or their respective affiliates in the performance
of, or failure to perform, its obligations under this Agreement.
(d) Promptly after receipt of notice of any claim or complaint or the
commencement of any action or proceeding with respect to which an
indemnified party is entitled to seek indemnification hereunder, the
indemnified party will notify the indemnifying party in writing of such
claim or complaint or the commencement of such action or proceeding. The
indemnifying party, upon request of the indemnified party, shall retain
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in
connection with such claim, complaint, action or proceeding and shall pay
the fees and disbursements of such counsel related to such claim,
complaint, action or proceeding. In connection with any such claim,
complaint, action or proceeding, any indemnified party shall have the right
to retain its own counsel, but the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (i) the indemnifying
party and the indemnified party shall have mutually agreed to the retention
of such counsel or (ii) the named parties to any such action or proceeding
(including any impleaded parties) include both the indemnifying party and
the indemnified party and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the indemnifying party shall
not, in respect of the legal expenses of any indemnified party in
connection with any action or proceeding or related action or proceedings
in the same jurisdiction, be liable for the fees and expenses of more than
one separate firm (in addition to any local counsel) for all such
indemnified parties and that all such fees and expenses shall be reimbursed
as they are incurred. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or
judgment. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been
a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter
of such proceeding.
(e) If the foregoing indemnification is for any reason unavailable to
an indemnified party (other than by reason of the terms thereof), the
indemnifying party shall contribute to the Covered Claims that are paid or
payable by the indemnified party in such proportion as is appropriate to
reflect the relative economic interests of the indemnifying party, on the
one hand, and the indemnified party, on the other hand, in the direct and
indirect transactions contemplated by this Agreement (whether or not
consummated) and any other relevant equitable considerations. For purposes
of this paragraph, the relative economic interests of the Fund, the General
Partner, and MS, in the transactions contemplated by the Agreement, shall
be deemed to be in the same proportion as (i) the total proceeds paid or
payable to the Fund in the transactions directly and indirectly
contemplated by this Agreement (ii) the total proceeds paid or payable to
the General Partner in the transactions directly and indirectly
contemplated by this Agreement with respect to the Interests and (iii) the
placement fees paid to MS under the Agreement bear to each other; provided
that to the extent permitted by applicable law, in no event shall the Fund
and the General Partner contribute less than the amount necessary to ensure
that all indemnified parties, in the aggregate, are not liable in excess of
the amount of fees actually received by MS pursuant to this Agreement.
(f) The foregoing indemnity will be in addition to any liabilities
that the parties may otherwise have incurred hereunder.
8. Confidentiality.
(a) Each party acknowledges that, in performing its obligations under
this Agreement, it may have access to confidential and proprietary
information of the other party ("CONFIDENTIAL INFORMATION"). The parties
agree that information concerning any potential investor introduced by MS
to the Fund, the General Partner or the Manager is the Confidential
Information of MS. By way of illustration but not of limitation,
"Confidential Information" includes any "nonpublic personal information"
(as defined in SEC Regulation S-P or FTC Regulation 313) regarding
prospective investors and limited partners or members, trade secrets, data,
know-how, accounting data, statistical data, financial data or projections,
forecasts, business practices or policies, research projects, reports,
development and marketing plans, strategies, or other business information
that is not generally known or available to the public. The term
"Confidential Information" does not include information that: (i) is or
becomes generally available to the public other than as a result of an
improper disclosure by the disclosing party; (ii) was rightfully available
to a party on a non-confidential basis before its disclosure by the other
party; (iii) was independently developed by the receiving party or (iv)
becomes available to a party on a non-confidential basis from a source
other than the other party, provided that such source is not prohibited
from transmitting the information by a contractual, legal, or fiduciary
obligation.
(b) Except as otherwise permitted in Section 9(c) of the Agreement or
to the extent necessary to perform its obligations under this Agreement,
neither party may disclose or use any of the other party's Confidential
Information. Each party will maintain the confidentiality of the other
party's Confidential Information in its possession or control. For the
avoidance of doubt, no party may provide information concerning the Fund,
prospective investors or limited partners or members to any third party
knowing that such third party may use such information in any form of
publication, whether publicly or privately distributed, without the express
prior written approval of the other party. Each party will limit the
disclosure of the other party's Confidential Information to those of its
employees and agents with a need to know such Confidential Information for
purposes of this Agreement. Each party will use reasonable care to prevent
its employees and agents from violating the foregoing restrictions.
Notwithstanding the above, Confidential Information may be disclosed to the
extent required by law or by an order or decree of any court or other
governmental authority; provided, that each party will, if legally
compelled to disclose such information: (i) provide the other party with
prompt written notice of that fact so that the other party may attempt to
obtain a protective order or other appropriate remedy and/or waive
compliance with the provisions of this Section 8; (ii) disclose only that
portion of the information that a party's legal counsel advises is legally
required; and (iii) endeavor to obtain assurance that confidential
treatment will be accorded the information so disclosed.
(c) On written request or on the expiration or termination of this
Agreement, each party will return to the other party or destroy all
Confidential Information in its possession or control, provided that each
party may retain a single archival copy of any document or information that
such party is obligated to maintain pursuant to record keeping requirements
to which it is subject under applicable laws, rules or regulations, but for
only so long as such records are required to be maintained.
9. Covenants.
(a) The Fund and the General Partner will not use the trademarks,
service marks, logos, names or any other proprietary designations of MS or
its affiliates ("XX XXXXX") in the Offering Materials, any promotional
materials or other documentation without the prior review and written
approval of MS. MS will not use the trademarks, service marks, logos, names
or any other proprietary designations of the Fund or the General Partner in
any written material prepared for distribution to investors without the
prior review and written approval of the relevant party.
(b) Each of the General Partner and the Fund will not, and will each
cause its affiliates not to (i) directly or indirectly solicit any client
it knows to be a client of MS as a result of the activities of MS pursuant
to this Agreement (A) to purchase an interest in any investment entity
sponsored or offered by the General Partner or any of its respective
affiliates (other than Interests with the consent of MS), (B) to enter into
an agreement for the management of any assets of such client by the General
Partner or any of their respective affiliates or (C) to curtail or cancel
such client's business relationship with MS or (ii) permit any person
introduced to the General Partner, the Manager or the Fund by MS as a
result of its activities pursuant to this Agreement to invest in the Fund
or any related investment vehicle, in each case without the prior written
consent of MS.
(c) The Fund and the General Partner agree to provide to MS copies of
any communications, including, but not limited to, each capital account
statements, monthly and/or quarterly investor materials and any other
investor materials, that the Fund, General Partner, or any of their
respective affiliates provide to MS Clients relating to the Fund in a
format and within a time period that has been mutually agreed upon by the
Fund, the General Partner and MS. The Fund and the General Partner agree
that MS may use any information contained in such communications in any
statement, report, or other marketing or sales material that MS provides to
prospective investors and MS Clients. The Fund and the General Partner
undertake to (i) respond in a prompt manner to inquiries of MS Clients as
communicated by MS and (ii) organize informal forums on an as-needed basis
for discussing material events relating to the Fund with MS Clients.
10. Injunctive Relief. Each party agrees that certain breaches of this Agreement
with respect to confidentiality (Section 8) and use of marks and
non-solicitation (Section 8) may cause potentially irreparable harm, and
that monetary damages would not be sufficient to compensate the
non-breaching party for such harm. In the event of a breach of these
provisions by a party, the non-breaching parties may seek temporary and
permanent injunctive relief (without the necessity of proving actual damages
or the posting of a bond) as well as other equitable relief, and will be
entitled to commence an action for any such relief in any court of competent
jurisdiction.
11. Term and Termination.
(a) This Agreement shall become effective for all purposes as of the
date the Agreement is fully executed and shall remain in effect until April
1, 2007. Thereafter, subject to earlier termination as provided herein,
this Agreement shall continue in effect from year to year, provided that
each such continuance is approved by the Board of Directors of the Fund,
including the vote of a majority of the Board of Directors who are not
"interested persons," as defined by the 1940 Act and the rules thereunder,
of the Company.
(b) This Agreement may be terminated by either party on 30 days' prior
written notice to the other parties. This Agreement may be terminated
immediately on written notice to the other parties hereto on the
dissolution, insolvency or bankruptcy of any party.
(c) On termination of this Agreement, MS will be entitled to the
compensation set forth in Section 3 with respect to any person introduced
by MS to the Fund prior to termination that invests in the Fund within 60
days following such termination.
12. Notices. Any notice required or desired to be delivered under this Agreement
will be effective on actual receipt and will be in writing and (i) delivered
personally; (ii) sent by first class mail or overnight delivery, postage
prepaid, or (iii) transmitted by fax (with confirmation by first class mail,
postage prepaid) to the parties at the following address or such other
address as the parties from time to time specify in writing:
If to the Fund or the General Partner: If to MS&Co. or MSDW:
Hatteras Multi-Strategy TEI Fund , X.X. Xxxxxx Xxxxxxx
Hatteras Investment Management LLC 0000 Xxxxxx xx xxx Xxxxxxxx, 0xx Xxxxx
0000 Xxx Xxxxx Xxxx, Xxxxx 000 Xxx Xxxx, XX 00000
Xxxxxxx, XX 00000 Attention: Xxxx Xxx Xxxxx
Attention: J. Xxxxxxx Xxxxxx Tel: 000-000-0000
Tel: 000-000-0000 Fax: 000-000-0000
Fax: 000-000-0000
13. Status of Parties. In selling the Interests, MS will be an independent
contractor (rather than employee, agent or representative) of the Fund and the
General Partner, and MS will not have the right, power or authority to enter
into any contract or to create any obligation on behalf of the Fund, the General
Partner or the Manager or otherwise bind the Fund or the General Partner in any
way. Nothing in this Agreement will create a partnership, joint venture, agency,
association, syndicate, unincorporated business or any other similar
relationship between the parties. Nothing in this Agreement will be construed to
imply that MS is a partner, shareholder, manager, managing member or member of
the Fund or the General Partner.
14. Miscellaneous. Headings to sections and subsections in this Agreement are
for the convenience of the parties only and are not intended to be a part of or
affect the meaning or interpretation hereof. This Agreement embodies the entire
agreement and understanding of the parties with respect to the subject matter
hereof, and supersedes all other agreements and understandings, whether written
or oral, between the parties relating to the subject matter hereof entered into
prior to this Agreement. This Agreement will not be amended except by a writing
signed by all parties hereto. No waiver of any provision of this Agreement will
be implied from any course of dealing between the parties hereto either before
or after the effective date of this Agreement or from any failure by any party
hereto to assert its rights hereunder on any occasion or series of occasions.
This Agreement will be governed by and construed in accordance with the laws of
the State of New York, without regard to the conflict or choice of law
provisions thereof. The provisions of Sections 3, 7 (including with respect to
breaches of Section 4, 5 or 6), 8, 9, 10, and this Section 14 will survive
termination of this Agreement. If any provision of this Agreement is or should
become inconsistent with any present or future law, rule, or regulation of any
governmental or regulatory authority having jurisdiction over the subject matter
of this Agreement, such provision will be deemed rescinded or modified in
accordance with any such law, rule or regulation. In all other respects, this
Agreement will continue and remain in full force and effect. This Agreement will
inure to the benefit of and be binding on the parties hereto and such parties'
respective successors and permitted assigns. No party may assign this Agreement
without the prior written consent of the other parties, except as otherwise
provided herein. Any purported assignment in violation of this Section 14 will
be void.
THE PARTIES WAIVE THEIR RIGHTS TO SEEK REMEDIES IN COURT, INCLUDING ANY RIGHT TO
A JURY TRIAL. Any claim for money damages between the parties in connection with
any matter hereunder will be resolved by binding arbitration on an expedited
basis in New York, New York in accordance with the then prevailing rules of the
American Arbitration Association and any judgment may be entered into any court
having jurisdiction thereof. There will be three arbitrators selected within ten
(10) days of notification to the other party of the dispute being referred to
arbitration; each side to any controversy, dispute, disagreement, or claim will
select an arbitrator and the two arbitrators so selected will select the third
arbitrator; provided that: (i) the arbitrators will be practicing attorneys who
are members of the New York State Bar, (ii) the arbitrators will be
knowledgeable in industry standards and practices, (iii) the authority of the
arbitrators will be limited to construing and enforcing the express terms
hereunder, and (iv) the arbitrators will only state the reasons for the award in
a written opinion if all parties to the arbitration so request.
THE PARTIES HERETO IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF ANY
STATE OR FEDERAL COURT SITTING IN NEW YORK CITY OVER ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND WAIVE TRIAL BY JURY.
EACH OF THE PARTIES IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH
SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT SUCH
SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. EACH OF THE PARTIES AGREES THAT A FINAL JUDGMENT IN ANY SUCH
SUIT, ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND BINDING UPON THE PARTIES AND
MAY BE ENFORCED IN ANY OTHER COURTS TO WHOSE JURISDICTION A PARTY IS OR MAY BE
SUBJECT, BY SUIT UPON SUCH JUDGMENT.
EACH PARTY HEREBY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS WHICH MAY BE
SERVED IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT BY MEANS OF PERSONAL DELIVERY OR COURIER SERVICE, ADDRESSED TO ITS
ADDRESS PROVIDED ABOVE AND TO THE ATTENTION OF ANY SECRETARY, ASSISTANT
SECRETARY OR ANY OTHER OFFICER, DIRECTOR, MANAGING AGENT OR GENERAL AGENT OF
SUCH PARTY, AND SUCH PARTY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE UNDER NEW YORK LAW
OR UNDER ANY LAW OF ANY STATE OF THE UNITED STATES OR OF ANY OTHER JURISDICTION
OR OTHERWISE TO SERVICE OF PROCESS IN SUCH MANNER.
This Agreement may be executed in several counterparts, each of which
will be deemed an original but all of which together will constitute one and the
same instrument. Facsimiles (including facsimiles of the signature pages of this
Agreement) will have the same legal effect hereunder as originals.
Very truly yours
Hatteras Multi-Strategy TEI Fund , L.P.
By: Hatteras Investment Management LLC,
general partner
By:
--------------------------
Name:
--------------------------
Title:
--------------------------
Hatteras Investment Management LLC
By:
--------------------------
Name:
--------------------------
Title:
--------------------------
Accepted as of the date hereof
Xxxxxx Xxxxxxx & Co. Incorporated
By:
--------------------------
Name:
Title:
Xxxxxx Xxxxxxx XX Inc.
By:
--------------------------
Name:
Title:
Schedule I
Subscription Amount Placement Fee
---------------------- -------------
Up to $499,999 2.0%
$500,000 to $999,999 1.5%
$1,000,000 and over 1.0%
Exhibit A
[Supplemental Disclosure Form]
