INVESTMENT MANAGEMENT AGREEMENT Hatteras 1099 Advantage Institutional Fund
AGREEMENT
made this 15th day of July, 2009, by and between Hatteras 1099 Advantage
Institutional Fund, a Delaware statutory trust (the "Fund"), and Hatteras
Capital Investment Management, LLC, a Delaware limited liability company (the
"Adviser").
WHEREAS,
the Fund is a closed-end, management investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS,
the Fund desires to retain the Adviser to render investment management services
with respect to the Fund and the Adviser is willing to render such
services:
NOW,
THEREFORE, in consideration of mutual covenants herein contained, the parties
hereto agree as follows:
1. APPOINTMENT
AND ACCEPTANCE. The Fund hereby appoints the Adviser to act as
Adviser to the Fund for the period and on the terms set forth in this
Agreement. The Adviser accepts such appointment and agrees to furnish
the services herein set forth for the compensation herein provided.
The
Adviser will, at its own expense, render the services and provide the office
space, furnishings and equipment, and personnel (including any sub-advisers)
required by it to perform the services on the terms and for the compensation
provided herein. The Adviser will not, however, pay for the cost of
securities, commodities, and other investments (including brokerage commissions
and other transaction charges, if any) purchased or sold for any
Fund.
2. DUTIES
OF ADVISER. The Fund employs the Adviser to furnish and manage a continuous
investment program for the Fund. The Adviser will continuously
review, supervise and (where appropriate) administer the investment program of
the Fund, to determine in its discretion (where appropriate) the securities to
be purchased, held, sold or exchanged, to provide the Fund with records
concerning the Adviser’s activities which the Fund is required to maintain and
to render regular reports to the Fund’s officers and Trustees concerning the
Adviser’s discharge of the foregoing responsibilities. The Adviser
may hire (subject to the approval of the Fund's Board of Trustees (“Board”) and,
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 Fund) and thereafter
supervise the investment activities of one or more sub-advisers deemed necessary
to carry out the investment program of the Fund. The retention of a
sub-adviser by the Adviser shall not relieve the Adviser of its responsibilities
under this Agreement.
The
Adviser shall discharge the foregoing responsibilities subject to the control of
the Fund’s Board and in compliance with such policies as the Board may from time
to time establish, with the objectives, policies, and limitations for the Fund
set forth in the Fund's registration statement as amended from time to time, and
with applicable laws and regulations.
3. FUND
TRANSACTIONS. The Adviser is authorized to select the brokers or dealers that
will execute the purchases and sales of portfolio securities for the Fund and is
directed to use its best efforts to obtain “best execution,” considering the
Fund’s investment objectives, policies, and restrictions as stated in the Fund’s
Prospectus and Statement of Additional Information, as the same may be amended,
supplemented or restated from time to time, and resolutions of the Fund’s
Board. The Adviser will promptly communicate to the officers and the
Board such information relating to portfolio transactions as they may reasonably
request.
It is
understood that the Adviser will not be deemed to have acted unlawfully, or to
have breached a fiduciary duty to the Fund or be in breach of any obligation
owing to the Fund under this Agreement, or otherwise, by reason of its having
directed a securities transaction on behalf of the Fund to a broker-dealer in
compliance with the provisions of Section 28(e) of the Securities Exchange Act
of 1934 or as described from time to time by the Fund’s Prospectus and Statement
of Additional Information.
4. COMPENSATION
OF THE ADVISER. For the services provided and the expenses assumed pursuant to
this Agreement, the Fund shall pay to the Adviser compensation at an annual rate
of 1.50%, payable monthly in arrears, based upon the Fund’s net assets as of
month-end. Net assets means the total value of all assets of the Fund, less an
amount equal to all accrued debts, liabilities and obligations of the Fund. In
the case of a partial month, compensation will be based on the number of days
during the month in which the Adviser invested Fund assets. Compensation will be
paid to the Adviser before giving effect to any repurchase of Shares in the Fund
effective as of that date. The Adviser may, in its discretion and
from time to time, waive all or a portion of its fee.
All
rights of compensation under this Agreement for services performed as of the
termination date shall survive the termination of this Agreement.
5. BOOKS
AND RECORDS. The Adviser will maintain all books and records with
respect to the securities transactions of the Fund and will furnish to the
Fund’s Board such periodic and special reports as the Board may reasonably
request. The Fund and the Adviser agree to furnish to each other, if
applicable, current registration statements, proxy statements, reports to
shareholders, certified copies of their financial statements, and such other
information with regard to their affairs as each may reasonably
request.
Any
records required to be maintained and preserved pursuant to the provisions of
Rule 31a-1 and Rule 31a-2 promulgated under the 1940 Act which are prepared or
maintained by the Adviser on behalf of the Fund are the property of the Fund and
will be surrendered promptly to the Fund on request.
6. STATUS
OF ADVISER. The services of the Adviser to the Fund are not to be deemed
exclusive, and the Adviser shall be free to render similar services to others so
long as its services to the Fund are not impaired thereby. The Adviser shall be
deemed to be an independent contractor and shall, unless otherwise expressly
provided or authorized, have no authority to act for or represent the Fund in
any way or otherwise be deemed an agent of the Fund.
7. LIMITATION
OF LIABILITY AND INDEMNIFICATION OF ADVISER.
(a) In the absence of willful
misfeasance, gross negligence or reckless disregard of its obligations to the
Fund, the Adviser and any partner, director, officer or employee of the Adviser,
or any of their affiliates, executors, heirs, assigns, successors or other legal
representatives, will not be liable for any error of judgment, mistake of law or
for any act or omission by the person in connection with the performance of
services to the Fund, except as may otherwise be provided under provisions of
applicable state law or Federal securities law which cannot be waived or
modified hereby.
(b) The Fund shall indemnify, to the
fullest extent permitted by law, the Adviser, or any partner, director, officer
or employee of the Adviser, and any of their affiliates, executors, heirs,
assigns, successors or other legal representatives, against any liability or
expense to which the person may be liable that arises in connection with the
performance of services to the Fund, so long as the liability or expense is not
incurred by reason of the person’s willful misfeasance, gross negligence or
reckless disregard of its obligations to the Fund. The rights of
indemnification provided under this Section shall not be construed so as to
provide for indemnification of any aforementioned persons for any losses
(including any liability under Federal securities laws which, under certain
circumstances, impose liability even on persons that act in good faith) 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 to the fullest extent permitted by
law.
(c) The Adviser shall indemnify, to the
fullest extent permitted by law, the Fund and all controlling persons of the
Fund (as described in Section 15 of the Securities Act of 1933, as amended),
against any liability or expense to which the person may be liable that arises
in connection with the performance of services to the Adviser, so long as the
liability or expense is not incurred by reason of the person’s willful
misfeasance, gross negligence or reckless disregard of its obligations to the
Adviser. The rights of indemnification provided under this
Section shall not be construed so as to provide for indemnification of any
aforementioned persons for any losses (including any liability under Federal
securities laws which, under certain circumstances, impose liability even on
persons that act in good faith) 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 to the
fullest extent permitted by law.
8. PERMISSIBLE
INTERESTS. Trustees, agents, and shareholders of the Fund are or may be
interested in the Adviser (or any successor thereof) as directors, partners,
officers, or shareholders, or otherwise; directors, partners, officers, agents,
and shareholders of the Adviser are or may be interested in the Fund as
Trustees, shareholders or otherwise; and the Adviser (or any successor) is or
may be interested in the Fund as a shareholder or otherwise. In addition,
brokerage transactions for the Fund may be effected through affiliates of the
Adviser if approved by the Fund’s Board, subject to the rules and regulations of
the Securities and Exchange Commission.
9. AUTHORITY;
NO CONFLICT. The Adviser represents, warrants and agrees that: it has the
authority to enter into and perform the services contemplated by this Agreement;
and the execution, delivery and performance of this Agreement do not, and will
not, conflict with, or result in any violation or default under, any agreement
to which Adviser or any of its affiliates are a party.
10. LICENSE
OF ADVISER'S NAME. The parties agree that the name of the Adviser, the names of
any affiliates of the Adviser and any derivative or logo or trademark or service
xxxx or trade name are the valuable property of the Adviser and its
affiliates. The Adviser hereby agrees to grant a license to the Fund
for use of its name in the name of the Fund for the term of this Agreement and
such license shall terminate upon termination of this Agreement. If
the Fund makes any unauthorized use of the Adviser’s names, derivatives, logos,
trademarks, or service marks or trade names, the parties acknowledge that the
Adviser shall suffer irreparable harm for which monetary damages may be
inadequate and thus, the Adviser shall be entitled to injunctive relief, as well
as any other remedy available under law.
11. DURATION
AND TERMINATION. This Agreement, unless sooner terminated as provided herein,
shall remain in effect until May 31, 2011, and thereafter, for periods of one
year so long as such continuance thereafter is specifically approved at least
annually (a) by the vote of a majority of those Trustees of the Board who are
not parties to this Agreement or interested persons of any party to this
Agreement, cast in person at a meeting called for the purpose of voting on such
approval, and (b) by a vote of a majority of the Fund’s Board or by vote of a
majority of the outstanding voting securities of the Fund; provided, however,
that if the shareholders of any Fund fail to approve the Agreement as provided
herein, the Adviser may continue to serve hereunder in the manner and to the
extent permitted by the 1940 Act and rules and regulations thereunder. The
foregoing requirement that continuance of this Agreement be "specifically
approved at least annually" shall be construed in a manner consistent with the
1940 Act and the rules and regulations thereunder.
Notwithstanding
the foregoing, this Agreement may be terminated as to the Fund at any time,
without the payment of any penalty by vote of a majority of members of the
Fund’s Board or by vote of a majority of the outstanding voting securities of
the Fund on 60 days written notice to the Adviser, or by the Adviser at any time
without the payment of any penalty, on 60 days written notice to the Fund. This
Agreement will automatically and immediately terminate in the event of its
assignment. Any notice under this Agreement shall be given in writing, addressed
and delivered, or mailed postpaid, to the other party at any office of such
party.
As used
in this Section 11, the terms "assignment", "interested persons", and a "vote of
a majority of the outstanding voting securities" shall have the respective
meanings set forth in the 1940 Act and the rules and regulations thereunder;
subject to such exemptions as may be granted by the Securities and Exchange
Commission under said Act.
12. NOTICE.
Any notice required or permitted to be given by either party to the other shall
be deemed sufficient if sent by registered or certified mail, postage prepaid,
addressed by the party giving notice to the other party at the last address
furnished by the other party to the party giving notice:
If to the
Adviser:
Hatteras
Capital Investment Management LLC
0000
Xxxxxxxxx Xxxxxx Xxxxx
Xxxxx
000
Xxxxxxx,
XX 00000
Phone: (000)
000-0000
Fax: (000)
000-0000
If to the
Fund:
c/o
Hatteras Capital Investment Management LLC
0000
Xxxxxxxxx Xxxxxx Xxxxx
Xxxxx
000
Xxxxxxx,
XX 00000
Phone: (000)
000-0000
Fax: (000)
000-0000
13. 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 affected thereby.
14. GOVERNING
LAW. This Agreement shall be construed in accordance with the laws of the State
of Delaware, without reference to conflict of law or choice of law doctrines,
and the applicable provisions of the 1940 Act. To the extent that the applicable
laws of the State of Delaware, or any of the provisions herein, conflict with
the applicable provisions of the 1940 Act, the latter shall
control.
IN
WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as
of the day and year first written above.
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/s/ Xxxxx X. Xxxxxxx
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By:
Xxxxx X. Xxxxxxx
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Title:
President
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HATTERAS
CAPITAL INVESTMENT MANAGEMENT, LLC
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/s/ Xxxxx X. Xxxxxxx
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By:
Xxxxx X. Xxxxxxx
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Title:
Managing Member
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