INVESTMENT MANAGEMENT AGREEMENT HATTERAS GLOBAL PRIVATE EQUITY PARTNERS INSTITUTIONAL FUND, LLC
HATTERAS
GLOBAL PRIVATE EQUITY PARTNERS INSTITUTIONAL FUND, LLC
AGREEMENT
made this __ day of ___________, 200_, by and between Hatteras Global Private
Equity Partners Institutional Fund, LLC, a Delaware limited liability company
(the "Fund"), and Hatteras Capital Investment Management, LLC, a Delaware
limited liability company (the "Adviser").
WHEREAS,
the Fund is an 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 Managers concerning the
Adviser’s discharge of the foregoing responsibilities. The Adviser
may hire (subject to the approval of the Fund's Board of Managers (“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
Private Placement Memorandum 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 Private Placement
Memorandum 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 equal to 1.25% on
an annualized basis of the net assets of the Fund. Such compensation shall be
paid to the Adviser at the end of each quarter. However, during the offering
period, the compensation shall be paid to the Adviser at the end of each month.
The fee shall be based on the average daily net assets for the period involved.
The Adviser may, in its discretion and from time to time, waive all or a portion
of its fee.
In
accordance with the terms of the governing documents of the Fund, the Adviser
shall also receive from the Fund an incentive allocation equal to 5% of the
excess of the net profits of the Fund (“Incentive Allocation”), calculated in
accordance with the applicable governing documents and as described in more
detail in attached Schedule A.
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 OF ADVISER. The duties of the Adviser shall be confined to those
expressly set forth herein, and no implied duties are assumed by or may be
asserted against the Adviser hereunder. The Adviser shall not be liable for any
error of judgment or mistake of law or for any loss arising out of any
investment or for any act or omission in carrying out its duties hereunder,
except a loss resulting from willful misfeasance, bad faith or gross negligence
in the performance of its duties, or by reason of reckless disregard of its
obligations and duties hereunder, except as may otherwise be provided under
provisions of applicable state law or Federal securities law which cannot be
waived or modified hereby. (As used in this Paragraph 7, the term "Adviser"
shall include managers, officers, employees and other agents of the Adviser as
well as that company itself).
8. PERMISSIBLE
INTERESTS. Managers, 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
Managers, 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 two years from date of execution, 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 Managers 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:
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If
to the Adviser:
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Hatteras
Capital Investment Management, LLC
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0000
Xxxxxxxxx Xxxxxx Xxxxx
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Xxxxx
000
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Xxxxxxx,
XX 00000
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Phone: (000)
000-0000
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Fax: (000)
000-0000
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If
to the Fund:
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Hatteras
Global Private Equity Partners Institutional Fund, LLC
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c/o
Hatteras Capital Investment Management, LLC
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0000
Xxxxxxxxx Xxxxxx Xxxxx
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Xxxxx
000
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Xxxxxxx,
XX 00000
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Phone: (000)
000-0000
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Fax: (000)
000-0000
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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.
HATTERAS
GLOBAL PRIVATE EQUITY PARTNERS INSTITUTIONAL FUND, LLC
By:
______________________
Attest:
__________________
HATTERAS
CAPITAL INVESTMENT MANAGEMENT, LLC
By:
______________________
Attest:
__________________
Schedule
A
The Adviser will receive an Incentive
Allocation as of the last day of each allocation period (as defined below) with
respect to the Fund, of 5% of the net profits of the Fund (taking into account
any unrealized appreciation or depreciation of investments, but without giving
effect to the Incentive Allocation and any item not charged ratably to all
persons who are admitted as members of the Fund (each a “Member”), if any, over
the then balance of the Fund’s Loss Recovery Account (as defined below),
appropriately adjusted for any partial repurchases, partial distributions or
partial transfers; provided that the net profits of the Fund equals or exceeds
an annualized return of at least a 6% (adjusted for contributions, repurchases
and distributions) for such allocation period. The Adviser holds
non-voting interests of limited liability company interest in the Fund
(“Interests”) in an incentive allocation account (“Incentive Allocation
Account”) solely for the purpose of receiving the Incentive Allocation with
respect to the Fund. The Adviser may transfer its Interests therein
to an affiliate without notice to the Members.
An
Incentive Allocation will be charged only with respect to any net profits in
excess of the positive balance of the Fund’s Loss Recovery Account (as defined
below). The Fund will maintain a memorandum account (a “Loss Recovery
Account”), which has an initial balance of zero and is (1) increased after the
close of each allocation period by the amount of the net losses of the Fund for
such allocation period, and (2) decreased (but not below zero) after the close
of each allocation period by the amount of the net profits of the Fund for such
allocation period. Any positive balance in the Loss Recovery Account
shall be appropriately reduced as the result of a repurchase or
distribution.
An
“allocation period” is a period commencing on commencement of operations of the
Fund and, thereafter, each period commencing as of the day following the last
day of the preceding allocation period and ending on the first to occur of
(1) the last day of each calendar year, (2) the valuation date with
respect to any repurchase of Interests or a portion of the Interests, or the day
preceding the effective date of any redemption of Interests or portion of
Interests or the complete withdrawal by a Member, (3) the day as of which
the Adviser’s or Sub-Adviser’s status as an investment adviser or sub-adviser,
respectively, is terminated (provided that no Incentive Allocation will be
payable to the Adviser or Sub-Adviser if such status is terminated voluntarily
by the Adviser or Sub-Adviser, as the case may be, or by the Board of Managers
of the Fund due to gross negligence or willful misconduct), or (4) such other
date as determined by the Board of Managers.
After the
close of an allocation period with respect to a Member, and subject to certain
limitations, the Adviser may withdraw up to 95% of the Incentive Allocation,
computed on the basis of unaudited data, that was credited to its Incentive
Allocation Account with respect to such allocation period. The Fund
will pay any balance, subject to audit adjustments, as promptly as practicable
after the completion of the audit of the Fund’s books. As promptly as
practicable after the completion of the audit of the books of the Fund for the
year in which allocations to the Incentive Allocation Account are made, the Fund
shall allocate to the Incentive Allocation Account any additional amount of
Incentive Allocation determined to be owed to the Adviser based on such audit,
and the Adviser shall remit to the Fund any excess amount of Incentive
Allocation determined to be owed to the Fund.
