FUND SERVICING AGREEMENT BY AND BETWEEN HATTERAS CAPITAL INVESTMENT MANAGEMENT, LLC AND HATTERAS 1099 ADVANTAGE FUND HATTERAS 1099 ADVANTAGE INSTITUTIONAL FUND July 16, 2009
BY AND
BETWEEN
HATTERAS
CAPITAL INVESTMENT MANAGEMENT, LLC
AND
HATTERAS
1099 ADVANTAGE FUND
July 16,
2009
FUND
SERVICING AGREEMENT, made as of the 16th day of July, 2009, by and between
Hatteras Capital Investment Management, LLC, a limited liability company formed
under the laws of the State of Delaware (“Hatteras”), and Hatteras 1099
Advantage Fund and Hatteras 1099 Advantage Institutional Fund (each, a “Fund”
and collectively, the “Funds”), on the other.
RECITAL
WHEREAS,
each Fund desires to retain Hatteras to provide, or to retain service providers
(“Service Providers”) to provide, certain fund services
(“Fund Services”) to the Funds;
WHEREAS,
the Funds are registered under the Investment Company Act of 1940 (the
“Investment Company Act”) and are subject to regulation as such under applicable
federal securities laws;
WHEREAS,
shares of the Funds (“Shares”) are offered for purchase to customers that are
qualified investors; and
WHEREAS,
Hatteras desires to provide, or retain Service Providers to provide,
Fund Services.
NOW
THEREFORE, in consideration of the terms and conditions herein contained, the
parties agree as follows:
1. Appointment
of Hatteras.
1. Each
Fund hereby authorizes Hatteras to provide, and/or retain other Service
Providers, who have entered into an appropriate service provider agreement with
Hatteras, to provide one or more of the
Fund Services. Fund Services shall include, but
shall not be limited to:
(a) assisting
each Fund in administering repurchases;
(b) providing
each Fund with personnel to perform such executive, administrative and clerical
services as are reasonably necessary to provide effective administration of each
Fund and shareholder (“Shareholder”) services;
(c) as
agreed from time to time with the Boards of Trustees of the Funds (the “Board”)
and in accordance with Rule 38a-1 under the Investment Company Act, making
available the services of appropriate compliance personnel and resources
relating to compliance policies and procedures of each Fund;
(d) assisting
each Fund in providing or procuring accounting services for the Funds and the
capital accounts of Shareholders;
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(e) assisting
in the administration of meetings of the Board and its committees and the
Shareholders;
(f) assisting
in administering subscriptions and tender offers, including assistance in the
preparation of regulatory filings and the transmission of cash between
Shareholders and each Fund;
(g) assisting
in arranging for, at each Fund’s expense, the preparation of all required tax
returns;
(h) assisting
in the preparation of proxy statements to Shareholders, and the preparation of
reports filed with regulatory authorities;
(i) periodically
reviewing the services performed by each Fund’s service providers, and making
such reports and recommendations to the Board concerning the performance of such
services as the Board reasonably requests;
(j) to
the extent requested by the Board or officers of each Fund, negotiating changes
to the terms and provisions of each Fund’s custody, administration and escrow
agreements;
(k) providing
information and assistance as requested in connection with the
registration of each Fund’s Shares in accordance with state securities
requirements;
(l) providing
assistance in connection with the preparation of each Fund’s periodic financial
statements and annual audit as reasonably requested by the Board or officers of
the Funds or the Funds’ independent accountants; and
(m) supervising
other aspects of the Funds’ operations and providing other administrative
services to the Funds.
2. Fund
Servicing Fee.
(a) Each
Fund will make payments to Hatteras within 45 days of the end of each calendar
month equal to a certain percentage (on an annualized basis), as set forth in
Exhibit A attached hereto, of the aggregate value of outstanding Shares held by
Shareholders of each Fund, provided that Hatteras
may vary, reduce or waive the Fund Servicing Fee in its sole discretion for
certain Shareholders of a Fund, determined as of the last day of the month
(before repurchases of Shares in either Fund, as applicable) (the “Fund
Servicing Fee”).
(b) Hatteras
may pay amounts pursuant to this Section 2 to any Service Provider, including
any “affiliated person” (as that term is defined in the Investment Company Act)
of Hatteras, if such person provides Fund Services.
(c) Hatteras
may, in its sole discretion, pay all or a portion of the Fund Servicing Fee to
Service Providers.
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3. Duties
of Hatteras.
(a) Hatteras
agrees to provide and/or retain the Service Providers to provide Fund Services
and to compensate such Service Providers for their services.
(b) Hatteras
shall maintain all books and records of the Funds required by Rule 31a-1 under
the Investment Company Act (other than those records being maintained by the
Fund’s distributor, administrator, custodian or transfer agent) and preserve
such records for the periods prescribed therefore by Rule 31a-2 of the
Investment Company Act.
4. Limitation
of Liability; Indemnification.
(a) The
duties of Hatteras shall be confined to those expressly set forth herein, and no
implied duties are assumed by or may be asserted against Hatteras
hereunder. Hatteras 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, gross negligence or reckless disregard 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 8, the term “Hatteras” shall include managers,
officers, employees and other agents of Hatteras as well as that company
itself).
(b) The
Fund shall indemnify and hold harmless Hatteras, all affiliated persons thereof
(within the meaning of Section 2(a)(3) of the 0000 Xxx) and all controlling
persons (as described in Section 15 of the Securities Act of 1933, as amended
(“1933 Act”)) (collectively, “Hatteras Indemnitees”) against, any and all
losses, claims, damages, liabilities or litigation (including reasonable legal
and other expenses) to which any of the Hatteras Indemnitees may become subject
under the 1933 Act, the 1940 Act, the Advisers Act, or under any other statute,
at common law or otherwise (“Losses”) except to the extent such Losses shall
have been finally determined in a non-appealable decision on the merits in any
such action, suit, investigation or other proceeding to have been incurred or
suffered by such Hatteras Indemnitee by reason of willful misfeasance, gross
negligence, or reckless disregard of the duties involved in the conduct of such
Hatteras Indemnitee’s office. The rights of indemnification provided
under this Section shall not be construed so as to provide for
indemnification of a Hatteras Indemnitee 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
5. Duration. This
Agreement will take effect on the date first set forth above. Unless earlier
terminated pursuant to paragraph 7 hereof, this Agreement shall remain in effect
until May 31, 2011 and thereafter from year to year.
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6. Amendment. Any
amendment to this Agreement shall be in writing and shall be subject to the
approval of the Board of each Fund.
7. Termination. This
Agreement may be terminated with respect to a particular Fund (i) by Hatteras at
any time without penalty upon sixty days’ written notice to such Fund (which
notice may be waived by such Fund); or (ii) by a Fund at any time without
penalty upon sixty days’ written notice to Hatteras (which notice may be waived
by Hatteras). Any termination of this Agreement shall not affect the
obligation of a Fund to pay the Fund Servicing Fee to Hatteras prior to such
termination.
8. Choice
of Law. This Agreement shall be governed by the laws of the State of
Delaware applicable to agreements made and to be performed entirely within the
State of Delaware (without regard to any conflicts of law principles
thereof). Any question of interpretation of any term or provision of
this Agreement having a counterpart in or otherwise derived from a term or
provision of the Investment Company Act shall be resolved by reference to such
term or provision of the Investment Company Act and to interpretations thereof,
if any, by the United States courts or, in the absence of any controlling
decision of any such court, by rules, regulations or orders of the Commission
issued pursuant to the Investment Company Act. In addition, where the
effect of a requirement of the Investment Company Act reflected in any provision
of this Agreement is revised by rule, regulation or order of the Commission,
such provision shall be deemed to incorporate the effect of such rule,
regulation or order.
* * *
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IN
WITNESS WHEREOF, the parties have executed this Agreement as of the day and year
first above written.
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HATTERAS
CAPITAL INVESTMENT
MANAGEMENT,
LLC
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By:
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/s/ Xxxxx X. Xxxxxxx
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Name:
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Xxxxx
X. Xxxxxxx
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Title:
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Managing
Member
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HATTERAS
1099 ADVANTAGE FUND
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By:
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/s/ Xxxxx X. Xxxxxxx
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Name:
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Xxxxx
X. Xxxxxxx
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Title:
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President
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By:
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/s/ Xxxxx X. Xxxxxxx
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Name:
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Xxxxx
X. Xxxxxxx
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Title:
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President
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EXHIBIT
A
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Fund
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Fund Servicing
Fee (as a
percentage of the
aggregate value of
outstanding
Shares)
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Hatteras
1099 Advantage Fund
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.35 | % | ||
| .40 | % | |||
