Exhibit 99(g)
INVESTMENT MANAGEMENT AGREEMENT
INVESTMENT MANAGEMENT AGREEMENT dated this 3rd day of January, 2005,
between HATTERAS INVESTMENT PARTNERS LLC, a Delaware limited liability company
(the "Investment Manager") and HATTERAS MASTER FUND, L.P. a Delaware limited
partnership (the "Master Fund"). All terms not defined herein shall have the
meanings ascribed to them in the Limited Partnership Agreement of the Master
Fund (the "Master Partnership Agreement")
WHEREAS, the Master Fund is registered with the Securities and Exchange
Commission (the "SEC") as a closed-end management investment company under the
Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Investment Manager is engaged principally in the business of
rendering investment management services and is registered with the SEC as an
investment adviser under the Investment Advisers Act of 1940, as amended;
WHEREAS, the Master Fund desires to retain the Investment Manager to
render investment advisory services to the Master Fund in the manner and on the
terms and conditions hereinafter set forth;
WHEREAS, the Adviser is willing to render such services and/or engage
others to render such services to the Master Fund; and
WHEREAS, the Master Fund serves as the "master" portfolio for one or more
"feeder" funds (each, a "Fund" and collectively, the "Feeder Funds") that invest
all or substantially all of their assets in the Master Fund and that have the
same investment objective and policies as the Master Fund.
NOW THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed by the parties as follows:
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and for other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:
1. Appointment of the Investment Manager. The Master Fund hereby appoints
the Adviser to act as investment adviser and provide investment advisory
services to the Master Fund, subject to the supervision of the Master Fund's
board of directors (the "Board of Directors"), for the period and on the terms
and conditions set forth in this Agreement. The Adviser accepts such appointment
and agrees to render the services and to assume the obligations set forth in
this Agreement commencing on its effective date for the compensation herein
provided.
2. Responsibilities of the Investment Manager.
(a) Investment Program. The Investment Manager shall: (i) furnish
continuously an investment program for the Master Fund; (ii) determine
(subject to the
overall supervision and review of the Board of Directors) what investments
shall be purchased, held, sold or exchanged by the Master Fund and what
portion, if any, of the assets of the Master Fund shall be held
uninvested; and (iii) make changes in the investments of the Master Fund.
The Investment Manager also shall manage, supervise and conduct the other
affairs and business of the Master Fund and matters incidental thereto,
subject always to the control of the Board of Directors and to the
provisions of the organizational documents of the Master Fund, the
Registration Statement of the Master Fund and its securities, including
the offering documents and Registration Statements of the funds listed on
Exhibit A hereto (collectively, the "Feeder Funds"), and the 1940 Act, in
each case as from time to time amended and in effect. Subject to the
foregoing, with the consent of the holders of interests in the Feeder
Funds, the Investment Manager shall have the authority to engage one or
more sub-advisers in connection with the management of the Master Fund,
which sub-advisers may be affiliates of the Investment Manager.
(b) Authority of the Investment Manager. In connection with its
obligations hereunder, the Investment Manager will have the authority for
and in the name of the Master Fund:
(i) to invest and re-invest the Master Fund's assets
(including determining the size, timing, price and counterparty of
such transactions) primarily in interests in (A) private investment
vehicles, including limited partnerships, limited liability
companies and similar entities (the "Advisor Funds") managed by
asset managers (the "Advisors"); (B) separate accounts managed by
Advisors ("Accounts"), provided, however, that the advisory
agreement with each such Advisor of an Account shall satisfy the
requirements of the 1940 Act and shall have received the approval of
the holders of interests in the Feeder Funds or an exemption from
the requirements for such approval shall have been granted or be in
effect; and (C) other instruments including liquid short-term
investments not prohibited for investment by the offering documents,
limited partnership agreements or articles of association of any of
the Feeder Funds (together with the Advisor Funds, Accounts and the
instruments described in this paragraph, the "Securities") and to
pay the fees and costs associated with such Securities;
(ii) to be responsible for the selection of, monitoring of,
and allocation of certain of the Master Fund's assets in the
Securities;
(iii) directly or through the Advisor Funds or Accounts, to
purchase, hold, sell, transfer, exchange, mortgage, pledge,
hypothecate and otherwise act to acquire and dispose of and exercise
all rights, powers, privileges, and other incidents of ownership or
possession with respect to Securities held or owned by the Master
Fund;
(iv) directly or through the Advisor Funds or Accounts, to
acquire a long position or a short position with respect to any
Securities and to make purchases or sales increasing, decreasing or
liquidating such position or changing
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from a long position to a short position or from a short position to
a long position, without any limitation as to the frequency of the
fluctuation in such position or as to the frequency of the changes
in the nature of such positions;
(v) directly or through the Portfolio Funds or Accounts, to
purchase Securities for investment and to make such representations
to the seller of such Securities, and to other persons, that the
Investment Manager may deem proper in such circumstances, including
the representation that such Securities are purchased by the Fund
for investment and not with a view to their sale or other
disposition;
(vi) directly or through the Advisor Funds or Accounts, to
vote and exercise all other rights in connection with Securities
purchased on behalf of the Master Fund;
(vii) with the oral or written approval of the general partner
of the Master Fund, to borrow or raise monies from time to time
without limit as to amount or manner and time of repayment, and to
issue, accept, endorse and execute promissory notes or other
evidences of indebtedness, and to secure the payment of any such
borrowings, and of the interest thereon, by mortgage upon or pledge,
conveyance or assignment in trust of the whole or any part of the
properties of the Master Fund whether at the time owned or
thereafter acquired;
(viii) to lend, with or without security, any of the
Securities, funds or other properties which are from time to time
owned or held by the Master Fund;
(ix) to engage personnel, whether part-time or full-time, and
attorneys, administrators, consultants, independent accountants,
sub-advisers, auditors or such other persons as the Investment
Manager may deem necessary or advisable;
(x) to issue orders and directions to any bank, brokerage, or
other financial institution at which the Master Fund maintains a
general account with respect to the disposition and application of
monies or Securities of the Master Fund from time to time held by
such institution;
(xi) directly or through the Advisor Funds or Accounts, to
open, maintain, conduct and close accounts, including margin and
custodial accounts, with brokers, dealers, banks, counterparties and
futures commission merchants, which power shall include the
authority to issue all instructions and authorizations to brokers,
dealers, banks, counterparties and futures commission merchants
regarding the Securities and/or money therein; to pay, or authorize
the payment and reimbursement of, commissions, markups or markdowns
that may be in excess of the lowest rates available that are paid to
brokers, dealers, banks, counterparties and futures commission
merchants who execute transactions for the account of the Master
Fund and who supply or pay for (or rebate to the Master Fund for
payment of) the cost of brokerage or research services (such as
custodial services, news and quotation equipment and publications)
utilized by the Master
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Fund, provided that the Master Fund does not pay a rate of
commissions in excess of what is competitively available from
comparable firms for comparable services, taking into account
various factors, including commission rates, financial
responsibility and strength of the broker and ability of the broker,
dealer, bank, counterparty or futures commission merchant to
efficiently execute transactions;
(xii) to combine purchase or sale orders on behalf of the
Master Fund together with other accounts to whom the Investment
Manager provides investment services or accounts of affiliates of
the Investment Manager (the "Other Accounts") and allocate the
Securities or other assets so purchased or sold among such accounts;
(xiii) to enter into any other contracts or agreements in
connection with any of the foregoing activities, including contracts
or agreements with Persons, firms or corporations with which a
principal of the Investment Manager is affiliated;
(xiv) to do such other acts as are delegated to the Investment
Manager by the Board or the general partner of the Master Fund; and
(xv) to do all things necessary and appurtenant to any of the
foregoing.
As to any matter not expressly provided for by this Agreement, the
Investment Manager shall be in all cases fully protected in acting or in
refraining from acting hereunder until it shall receive assurances to its
reasonable satisfaction that it and its affiliates, members and employees shall
be fully indemnified by the Master Fund to its satisfaction against any and all
liability and expense that may be incurred by it by reason of taking, continuing
to take or failing to take any such action.
(c) Administrative Services. to render to the Master Fund management
and administrative assistance in connection with the operation of the Master
Fund that shall include: (i) compliance with all reasonable requests of the
Master Fund for information, including information required in connection with
the Master Fund's filings with the SEC, other federal and state regulatory
organizations, and self-regulatory organizations, and (ii) such other services
as the Investment Manager shall from time to time determine to be necessary or
useful to the administration of the Master Fund.
(d) Reports. The Investment Manager will submit such periodic
reports to the Master Fund regarding the Investment Manager's activities
hereunder as the Master Fund may reasonably request.
(e) Books and Records. The Investment Manager will maintain or cause
to be maintained for the Master Fund all books, records, reports and any other
information required under the 1940 Act, to the extent that such books, records,
reports and other information are not maintained or furnished by the custodian,
transfer agent, administrator, sub-administrator or other agent of the Master
Fund.
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3. Reimbursement by the Fund. The Investment Manager may retain, in
connection with its responsibilities hereunder, the services of others to assist
in the investment advice to be given to the Master Fund. Payment for any such
services shall be assumed by the Investment Manager, and the Master Fund shall
not have any liability therefore; provided, however, that the Investment Manager
may in its discretion, on behalf of the Master Fund, retain the services of
independent third party professionals, legal advisers, accountants, consultants
and other professionals in connection with the services provided by the
Investment Manager pursuant to this Agreement.
4. Expenses of the Fund. The Master Fund shall bear full responsibility
for the following fees and expenses, although the Investment Manager may pay
certain expenses of the Master Fund in its absolute discretion:
(a) custodian and sub-custodian fees, if any, for its Securities;
(b) administrator's fees and disbursements;
(c) tax preparation and auditor's fees;
(d) taxes other than those incurred in connection with facilities
and services rendered by the Investment Manager at the Investment
Manager's expense;
(e) legal fees and disbursements;
(f) auditing fees and disbursements;
(g) organization and conduct of meetings of the limited partners and
the preparation and distribution of all reports and other communications
with limited partners;
(h) calculation of the net asset value of the Master Fund and the
capital account of each limited partner of the Master Fund, in a manner
determined pursuant to the Master Partnership Agreement;
(i) investment expenses (e.g., expenses which are directly related
to the investment of the Master Fund's assets, including, but not limited
to, brokerage commissions, interest expense and consulting and other
professional fees relating to Securities, including management and
performance-based fees and expenses of the Advisor Funds and Accounts);
and
(j) other operations and expenses not related to functions assumed
by the Investment Manager hereunder.
5. Expenses of the Investment Manager. Subject to Section 3 and Section 4
herein, the Investment Manager will render the services set forth in Section 2
of this Agreement at its own expense, including without limitation, the salaries
of employees necessary for such services, the rent and utilities for the
facilities provided, and other advisory and operating expenses, except as
assumed by the Master Fund under this Agreement or the Master Partnership
Agreement or
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provided for pursuant to the permitted use of soft dollar arrangements. The
Investment Manager may pay certain expenses of the Master Fund in its sole
discretion.
6. Fees.
(a) Subject to the following Section 6(c), as compensation for its
provision of the services hereunder, the Master Fund will pay to the
Investment Manager (the "Management Fee") equal to 1.00% of the aggregate
value of its net assets determined as of the first business day of each
fiscal quarter. The Management Fee will be due and payable in advance
within five business days after the beginning of each fiscal quarter.
Notwithstanding the foregoing, any changes to the compensation to the
Investment Manager set forth in any offering document of the Master Fund
shall not be binding on the Investment Manager, unless agreed to in
writing by the Investment Manager.
(b) The Investment Manager, in its sole discretion, may vary, defer
or waive, by rebate or otherwise, all or part of any fees payable under
Section 6(a) in accordance with applicable law. Profits derived by the
Investment Manager, including from such fees, may be used for any lawful
purpose, including payments to any other person in the sole discretion of
the Investment Manager.
(c) If the Investment Manager shall serve hereunder for less than
the whole of any quarter, the fee hereunder shall be prorated according to
the proportion that such period bears to the full quarter and shall be
payable within five business days after the end of the relevant quarter or
the date of termination of this Agreement, as applicable. The value of the
net assets of the Master Fund shall be determined pursuant to the
applicable provisions of the Master Partnership Agreement, valuation
procedures, and Registration Statement of the Master Fund, each as amended
from time to time. If the determination of the net asset value of the
Master Fund has been suspended for a period including the beginning of any
quarter when the Investment Manager's compensation is payable pursuant to
this paragraph, then the Investment Manager's compensation payable with
respect to such quarter shall be computed on the basis of the value of the
net assets of the Master Fund as last determined (whether during or prior
to such quarter).
(d) Each payment for services to the Investment Manager shall be
accompanied by a report of the Master Fund, prepared either by the
administrator hired by the Master Fund or by an independent certified
public accountant or an attorney which shall show the amount properly
payable to the Investment Manager under this Agreement, and the manner of
computation thereof.
7. Selection of Brokers. Except for investments made directly in
Securities by the Investment Manager on behalf of the Master Fund, the Master
Fund and the Investment Manager will have no direct control over the selection
of brokers.
In selecting brokers or dealers to execute transactions directly, the
Investment Manager may not necessarily solicit competitive bids and may not have
an obligation to seek the lowest available commission cost. It may not be the
practice of the Investment Manager to negotiate "execution only" commission
rates, and thus the Investment Manager may be deemed to be
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paying for research and other services provided by the broker which are included
in the commission rate. Research furnished by brokers may include, but is not
limited to, written information and analyses concerning specific securities,
companies or sectors; market, financial and economic studies and forecasts;
financial publications; statistic and pricing services, as well as discussions
with research personnel, along with hardware, software, databases and other
technical and telecommunication services and equipment (including updates,
improvements and repairs of same) utilized in the investment management process.
Research services obtained by the use of commissions arising from the Master
Fund's direct portfolio transactions may be used by the Investment Manager in
its other investment activities. To the extent the Investment Manager utilizes
commissions to obtain items which would otherwise be an expense of the
Investment Manager, such use of commissions in effect constitutes additional
compensation to the Advisor. Section 28(e) of the Securities Exchange Act of
1934, as amended, permits the payment of a rate of commissions in excess of the
amount another broker would have charged to obtain "research and execution"
services, which may result in higher transaction costs than would otherwise be
obtainable.
8. Status of the Investment Manager. The Investment Manager shall for all
purposes be an independent contractor and not an agent or employee of the Master
Fund. The Investment Manager shall have no authority to act for, represent, bind
or obligate the Fund except as provided herein.
9. Exculpation; Indemnification. None of the Investment Manager or its
affiliates, officers, principals, members, shareholders, directors, partners,
employees, agents, members, affiliates or the legal representatives of any of
them or managers, members or affiliates (each, an "Indemnified Person") shall be
liable for any acts or omissions or any error of judgment or for any loss
suffered by the Master Fund in connection with the subject matter of this
Agreement, except for loss resulting from willful misfeasance, bad faith or
gross negligence in the performance by such Indemnified Person of obligations
and duties hereunder. To the fullest extent permitted by law, the Master Fund
shall indemnify each Indemnified Person out of the assets of the Master Fund
from and against any and all costs, losses, claims, damages, amounts paid in
settlement, judgment or expense, liabilities, joint or several, including,
without limitation, legal fees or other expenses reasonably incurred in the
investigation or defense of any action, suit or proceeding (including civil,
criminal, administrative or investigative proceedings) to which an Indemnified
Person may be a party or otherwise be involved with or with which an Indemnified
Person shall be threatened, resulting in any way from the performance or
non-performance of their duties hereunder, except those resulting from the
willful misfeasance, gross negligence or bad faith of such Indemnified Person.
The Master Fund shall advance to or reimburse an Indemnified Person (to the
extent that the Master Fund has available assets and need not borrow to do so)
reasonable attorney's fees and other costs and expenses incurred in connection
with defense of any action or proceeding arising out of such performance or
non-performance. The Investment Manager agrees, and each other Indemnified
Person will agree, that in the event it receives any such advance, it shall
reimburse the Master Fund for such fees, costs and expenses to the extent that
it shall be determined that it was not entitled to indemnification under this
Section 9. Notwithstanding the foregoing, nothing in this Section 9 shall be
deemed to constitute a waiver of any rights the Master Fund may have under U.S.
federal securities laws (which may impose liability, under certain
circumstances, even on persons who act in good faith).
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10. Services Not Exclusive. The services of the Investment Manager to the
Master Fund hereunder are not to be deemed exclusive, and the Investment Manager
shall be free to render similar services to others so long as its services
hereunder are not impaired thereby. In addition, the parties may enter into
agreements pursuant to which the Investment Manager provides administrative or
other non-investment advisory services to the Master Fund, and may be
compensated for such other services.
11. Conflicts of Interest. Whenever the Master Fund and one or more other
accounts or investment companies managed or advised by the Investment Manager or
an Advisor have available funds for investment, investments suitable and
appropriate for each shall be allocated in accordance with procedures approved
by the Board of Directors and believed by the Investment Manager or the Advisor
to be equitable to each entity. Similarly, opportunities to sell Securities
shall be allocated in accordance with procedures approved by the Board of
Directors and believed by the Investment Manager or the Advisor to be equitable.
The Master Fund recognizes that in some cases this procedure may adversely
affect the size of the position that may be acquired or disposed of for the
Master Fund. In addition, the Master Fund acknowledges that any member,
director, officer, or persons employed by the Investment Manager, its
affiliates, or an Advisor, who may also be a member, director, officer, or
person employed by the Master Fund, to assist in the performance of the
Investment Adviser's or the Advisor's duties hereunder will not devote their
full time to such service and nothing contained herein shall be deemed to limit
or restrict the right of the Investment Manager or any affiliate of the
Investment Manager or an Advisor to engage in and devote time and attention to
other businesses or to render services of whatever kind or nature.
12. Duration and Termination.
(a) Duration. This Agreement shall become effective on the date
first set forth above, such date being the date on which this Agreement
has been executed following (1) the approval of the Board of Directors,
including approval by a vote of a majority of the directors who are not
"interested persons" (as defined in the 0000 Xxx) of the Investment
Manager or the Master Fund, cast in person at a meeting called for the
purpose of voting on such approval and (2) the approval by a vote of a
majority of the outstanding voting securities of the Feeder Funds, voting
as a single class (which shall be deemed given upon the approval of the
holders of such securities of a Fund to cause such Fund to invest in
assets in the Master Fund. Unless terminated as herein provided, this
Agreement shall remain in full force and effect until the date which is
two years after the effective date of this Agreement. Subsequent to such
initial period of effectiveness, this Agreement shall continue in full
force and effect, subject to Section 12(c), for successive one-year
periods so long as such continuance is approved at least annually: (i) by
either the Board of Directors or by vote of a majority of the outstanding
voting securities (as defined in the 0000 Xxx) of the Feeder Funds, voting
as a single class; and (ii) in either event, by the vote of a majority of
the directors of the Master Fund who are not parties to this Agreement or
"interested persons" (as defined in the 0000 Xxx) of any such party, cast
in person at a meeting called for the purpose of voting on such approval.
(b) Amendment. No provision of this Agreement may be changed,
waived, discharged or terminated orally, but only by an instrument in
writing signed by the party
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against which enforcement of the change, waiver, discharge or termination
is sought, and no amendment of this Agreement adversely affecting a Fund
or the holders of interest therein shall be effective until approved by
vote of the holders of a majority of the outstanding voting securities (as
defined in the 0000 Xxx) of such Feeder Funds, voting as a single class.
(c) Termination. This Agreement may be terminated at any time,
without payment of any penalty, by vote of the Board or by vote of a
majority of the outstanding voting securities (as defined in the 0000 Xxx)
of the Feeder Funds, voting as a single class, or by the Investment
Manager, in each case on not more than sixty (60) days' nor less than
thirty (30) days' prior written notice to the other party.
(d) Automatic Termination. This Agreement shall automatically and
immediately terminate in the event of its assignment (as defined in the
1940 Act).
13. Use of Name. The Master Fund acknowledges that it adopted its name
through the permission of the Investment Manager. The Investment Manager hereby
consents to the non-exclusive use by the Master Fund of the name "Hatteras
Master Fund, L.P." only so long as the Investment Manager serves as the Master
Fund's Investment Manager. The Fund agrees to indemnify and hold harmless the
Investment Manager and its affiliates from and against any and all costs,
losses, claims, damages or liabilities, joint or several, including, without
limitation, attorneys' fees and disbursements, which may arise out of the Master
Fund's use or misuse of the name "Hatteras Master Fund, L.P." or out of any
breach of or failure to comply with this Section 13. In addition, the Master
Fund shall not approve or authorize the use or distribution in connection with
the sale of its securities of any literature or advertisement in which the
Investment Manger is named or referred to unless such literature or
advertisement shall first be submitted to the Investment Manager for its
approval with respect to matters concerning the Investment Manager.
14. Governing Law. Notwithstanding the place where this Agreement may be
executed by any of the parties thereto, the parties expressly agree that all
terms and provisions hereof shall be governed by and construed in accordance
with the laws of the State of Delaware without regard to conflicts of law
principles.
15. Notices. Any notice, consent or other communication made or given in
connection with this Agreement shall be in writing and shall be deemed to have
been duly given when delivered or five days after mailed by certified mail,
return receipt requested, as follows:
If to the Investment Manager:
Hatteras Investment Management LLC
0000 Xxx Xxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Phone: (000) 000-0000
Fax: (000) 000-0000
If to the Master Fund:
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Hatteras Master Fund, L.P.
c/o Hatteras Investment Partners LLC
0000 Xxx Xxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Phone: (000) 000-0000
Fax: (000) 000-0000
16. Entire Agreement. This Agreement contains all of the terms agreed upon
or made by the parties relating to the subject matter of this Agreement, and
supersedes all prior and contemporaneous agreements, negotiations,
correspondence, undertakings and communications of the parties, oral or written,
respecting such subject matter.
17. No Waivers. The failure of a party to insist upon strict adherence to
any term of this Agreement on any occasion shall not be considered a waiver
thereof or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement.
18. Binding Effect; Assignment. This Agreement shall be binding upon and
inure to the benefit of the Master Fund, the Feeder Funds, the Investment
Manager, each Indemnified Person and their respective successors and permitted
assigns. Any person that is not a signatory to this Agreement but is
nevertheless conferred any rights or benefits hereunder (e.g., officers and
employees of the Investment Manager that are entitled to indemnification) shall
be entitled to such rights and benefits as if such person were a signatory
hereto, and the rights and benefits of such person hereunder may not be impaired
without such person's express written consent. No party to this Agreement may
assign or delegate, except to an affiliate, by operation of law or otherwise,
all or any portion of its rights, obligations or liabilities under this
Agreement without the prior written consent of the other party to this
Agreement.
19. Survival. The provisions of Sections 3, 4, 5, 6, 9 and 14 shall
survive the termination of this Agreement.
20. Headings. The headings contained in this Agreement are intended solely
for convenience and shall not affect the rights of the parties to this
Agreement.
21. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall be deemed an original, but all of which when
taken together shall be deemed to be one and the same instrument.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE.]
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IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
executed as of the date set forth above.
HATTERAS MASTER FUND, L.P.
By: Hatteras Investment Management LLC, its
General Partner
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Managing Member
HATTERAS INVESTMENT PARTNERS LLC
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President
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Exhibit 99(g)
EXHIBIT A
List of Feeder Funds
Hatteras Diversified Strategies Fund LP
Hatteras Diversified Strategies Offshore Fund LTD
Hatteras Multi-Strategy Fund I, L.P.
Hatteras Multi-Strategy Fund II, L.P.
