INVESTMENT MANAGEMENT AGREEMENT HATTERAS GLOBAL PRIVATE EQUITY PARTNERS MASTER FUND, LLC
AGREEMENT
made this __ day of ___________, 200_, by and between Hatteras Global Private
Equity Partners Master 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 any particular 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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By:
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Attest:
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HATTERAS
CAPITAL INVESTMENT MANAGEMENT, LLC
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By:
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Attest:
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Schedule
A
Each of the Adviser and Capvent US
Advisors LLC (the “Sub-Adviser”) will receive an Incentive Allocation, charged
to the capital account of each person who is admitted as a member of the Fund
(“Member”) as of the last day of each allocation period (as defined below) with
respect to such Member, of 5% (10% in the aggregate) of the Member’s allocable
share 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 Members for the
allocation period (as defined below)), if any, over the then balance of the
Member’s Loss Recovery Account (as defined below), appropriately adjusted for
any partial repurchases or partial transfers of such Member’s limited liability
company interest in the Fund (“Interest”); provided that the Member’s capital
account has been allocated at least a 6% annualized return (prior to deduction
of the Incentive Allocation) for such allocation period. Each of the
Adviser and Sub-Adviser hold non-voting Interests in the Fund in incentive
allocation accounts (“Incentive Allocation Accounts”) solely for the purpose of
receiving the Incentive Allocation with respect to the capital account of each
Member, and no other allocations of net profits, net losses or other items
(other than distributions) are made to or from such accounts. Each of
the Adviser and Sub-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 each Member’s Loss Recovery Account (as
defined below). The Fund will maintain a memorandum account for each
Member (each, 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 Member’s allocable share 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 Member’s allocable share of the net
profits of the Fund for such allocation period. Any positive balance
in a Member’s Loss Recovery Account will be reduced as the result of a
repurchase or certain transfers with respect to the Member’s Interest (or
portion thereof) in the Fund in proportion to the reduction of the Member’s
capital account attributable to the repurchase or transfer. A
transferee of an Interest in the Fund will not succeed to all or any part of the
transferor’s Loss Recovery Account, provided that in the case of a transfer in
which the transferee will have the same beneficial owner or beneficial owners as
the transferor, the transferee will succeed to the Loss Recovery Account (or
portion thereof) attributable to the Interest or portion thereof
transferred.
An
“allocation period” as to each Member is a period commencing on the admission of
such Member to the Fund and, thereafter, each period commencing as of the day
following the last day of the preceding allocation period with respect to the
Member, and ending on the first to occur of (1) the last day of each
calendar year of the Fund, (2) the date of a distribution from the Fund to
the Member, (3) the valuation date with respect to any repurchase of the
Interest or a portion of the Interest of such Member, or the day preceding the
effective date of any redemption of any Interest or portion of an Interest of
any Member or the complete withdrawal by a Member, (4) the day preceding
the day as of which the Fund admits as a substitute Member a person to whom the
Interest or portion of the Interest of such Member has been transferred, or
(5) the day as of which the status of the Adviser or Sub-Adviser as such 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). Appropriate adjustments will
be made to the calculation of the Incentive Allocation for extraordinary
circumstances, including for example, if Interests are purchased, repurchased or
redeemed intra-month.
The
allocation period with respect to a Member whose Interest in the Fund is
repurchased, transferred in part, or with respect to a Member that has received
a distribution from the Fund other than a final distribution pursuant to a
liquidation of the Fund, shall be treated as ending only with respect to the
portion of the Interest so repurchased, transferred or represented by such
distribution, and only the net profits of the Fund, if any, and the balance of
the Loss Recovery Account attributable to the portion of the Interest being
repurchased, transferred or represented by such distribution (based on the
Member’s capital account amount being so repurchased, transferred or
distributed) will be taken into account in determining the Incentive Allocation
for the allocation period then ending, and the Member’s Loss Recovery Account
shall not be adjusted for such Member’s allocable share of the net losses of the
Fund, if any, for the allocation period then ending that are attributable to the
portion of the Interest so repurchased, transferred or represented by such
distribution.
After the
close of an allocation period with respect to a Member, and subject to certain
limitations, the Adviser or Sub-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 and debited from such Member’s capital 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 and/or Sub-Adviser based on such
audit, and the Adviser and/or Sub-Adviser shall remit to the Fund any excess
amount of Incentive Allocation determined to be owed to the Fund.
