Exhibit 99(h)(1)
FORM OF SOLICITOR'S AGREEMENT
This SOLICITOR'S AGREEMENT (the "Agreement") is made as of ___________,
2004, by and between ______________ (the "Solicitor"), and Hatteras Investment
Partners LLC, a Delaware limited liability company ("Hatteras"), with reference
to the following facts:
The Solicitor intends to introduce investors to the pooled investment
vehicles listed on Exhibit A (each, a "Fund"), which may be amended by Hatteras
from time to time. In consideration of the mutual covenants herein, the
Solicitor and Hatteras agree as follows:
1. Engagement. Hatteras hereby engages the Solicitor, and the Solicitor
hereby accepts such engagement, to solicit prospective investors for Hatteras in
connection with the placement of limited partnership interests or shares, as
applicable, in a Fund (each, an "Investment"). Such engagement is not exclusive,
and Hatteras may engage any other solicitors and the Solicitor may act as a
solicitor for any other funds, without restriction. Hatteras represents to the
Solicitor that Hatteras serves as investment manager to each Fund, and receives
an investment management fee from each Fund. The parties represent that they are
not affiliated persons of each other.
2. Investors. The term "Investor" means an individual, partnership, trust,
plan or other entity (each a "Person") that acquired an Investment pursuant to
introduction by the Solicitor to a Fund. The Solicitor acknowledges and
understands that a Person solicited by it may be rejected by a Fund or its
agents (including Hatteras), and in such circumstances the Person will not have
acquired an Investment, and the Solicitor will not be entitled to a fee
hereunder. In addition, the Fund or its agents may, pursuant to the terms of the
applicable organizational and operational documents of the Fund (e.g., the
Fund's offering memoranda, partnership agreements, subscription agreements or
Memorandum and Articles of Association, as applicable (the "Governing
Documents")), compel the Investor to redeem its Investments or otherwise
withdraw from the Fund, and in such cases, the Solicitor will cease to be
eligible to receive a fee with respect to such Investor.
3. Activities. The Solicitor agrees that:
(a) The Solicitor will introduce a Fund only to Persons that it
reasonably believes meet the requirements to invest in a Fund, as set forth in
the Governing Documents for the Fund. For example, if a Fund offers Investments
pursuant to Regulation D under the Securities Act of 1933, as amended (the "1933
Act"), the Solicitor will only present information about such Fund to Persons it
reasonably believes are "accredited investors" within the meaning of Regulation
D.
(b) The Solicitor will conduct its activities in a manner: (i) such
that, if Hatteras does not wish to register the Investments with the federal
government, any state, or any other jurisdiction, the offer and sale of
Investments will be exempt from any such registration requirements, (ii) such
that, if Hatteras does not wish to remain registered as an investment adviser
under the Investment Advisers Act of 1940, as amended (the "Advisers Act"),
Hatteras
will not be required to so register, and (iii) that is consistent with
all instructions, policies and procedures that Hatteras provides orally or in
writing from time to time to the Solicitor.
(c) The Solicitor will deliver at the time of solicitation to each
potential Investor any and all documents applicable to such solicitation,
including the Governing Documents of such Fund and a brochure containing at
least the information that would be contained in Part II of Hatteras' Form ADV
(the "Hatteras Brochure"). Hatteras will determine in its sole discretion the
materials that the Solicitor will present to a potential Investor. The Solicitor
will obtain an executed statement from the potential Investor representing that
it has received such materials and acknowledges any such conflicts of interest,
a form of which is attached hereto as Exhibit B, and the Solicitor will deliver
all such statements to Hatteras. Also, the Solicitor will keep a log of all
documents delivered to potential Investors, and consecutively number each copy
of an offering memorandum delivered to such potential Investors, and identify
the potential Investor and the document numbers on the appropriate logs.
Promptly upon the request of Hatteras, and upon the termination of this
Agreement, the Solicitor will provide to Hatteras a copy of such logs and
executed statements by potential Investors.
(d) Unless expressly authorized by Hatteras in writing, the
Solicitor will not provide any potential Investor with any offering or sales
materials created by the Solicitor, and will not make any representations or
warranties about Hatteras or a Fund, except with respect to representations set
forth in the applicable Governing Documents of one or more Funds.
(e) Unless expressly authorized in advance by Hatteras in writing,
the Solicitor will not engage in any form of general solicitation or advertising
in performing the Solicitor's duties under this Agreement. This prohibition
includes, but is not limited to, any mass mailing, any advertisement, article or
notice published in any magazine, newspaper or newsletter, and any seminar or
meeting where the attendees are invited by any mass mailing, general
solicitation or advertising. Related to this prohibition, the Solicitor will not
mention the Funds, Hatteras, the Investments or any information about the
Solicitor's duties under this Agreement in any public medium, including any
newspaper, on radio or television, by electronic communication, or otherwise.
(f) Prior to mentioning or sending any material about a Fund related
to any potential Investor, the Solicitor shall form a reasonable belief that the
potential Investor is sophisticated and knowledgeable in business and financial
matters and is capable of evaluating the merits and risks of purchasing an
Investment.
(g) The Solicitor will not solicit a potential Investor who resides
or is located outside of the United States without prior written approval from
Hatteras. Further, notwithstanding any of the foregoing provisions to the
contrary, the Solicitor may not solicit a potential Investor that resides or is
located in a Prohibited Jurisdiction, as set forth on Exhibit C, which Hatteras
may revise from time to time. "Prohibited Jurisdiction" means a state, country
or other jurisdiction in which Hatteras, in the reasonable exercise of its
business judgment, believes that it may not offer Investments, serve as
investment adviser, or pay compensation to the Solicitor hereunder, without: (i)
violating the provisions of the USA Patriot Act; or (ii) either Hatteras or the
Solicitor having to register with a government or agency thereof, provided
Hatteras has not registered and does not wish to register in such jurisdiction.
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4. Term. Either party may terminate this Agreement, with or without cause,
on 30 days' prior written notice to the other party. Notwithstanding anything to
the contrary herein, (a) either party may terminate this Agreement immediately
by notifying the other party in writing of a breach of this Agreement by the
other party and (b) all provisions of this Agreement, other than Sections 1, 2
and 3, will survive the termination of this Agreement with respect to Investors
who have invested with Hatteras prior to such termination, except that the
provisions of Section 5 will survive only if the Solicitor will not have
breached this Agreement.
5. Compensation. (a) As compensation for the services rendered by the
Solicitor hereunder, Hatteras will pay the Solicitor (with respect to each
Investor solicited hereunder for any Fund listed on Exhibit A) 20% of any
asset-based management fee paid to Hatteras by each such Investor (either
directly or by means of the Investor's pro rata portion of the management fee
paid to Hatteras by a Fund) (the "Solicitation Fee") for as long as the assets
remain under the management of Hatteras. Such amount will be payable within 30
days after Hatteras has been paid such Solicitation Fee attributable to such
Investor.
(b) The Solicitor represents that neither it nor any of its
officers, directors, employees, affiliates or agents will, without the express
prior written consent of Hatteras, which consent Hatteras may withhold in its
sole discretion, share any part of the fees received pursuant to this Agreement
with any other Person.
6. Expenses. Unless otherwise and specifically agreed in writing, Hatteras
will not pay or reimburse the Solicitor for any out-of-pocket or other expenses
incurred or paid by the Solicitor in connection with the Solicitor's engagement
hereunder or otherwise and the Solicitor shall be responsible for all its
expenses.
7. Indemnification by the Solicitor. The Solicitor will indemnify and
defend the Funds, Hatteras, and their respective partners, directors, officers,
shareholders, members, managers, controlling persons, employees and agents and
hold them harmless, to the fullest extent permitted by law, from and against any
and all costs, claims, liabilities, losses, damages and expenses (including
reasonable attorneys' fees and expenses, all expert witnesses' fees and expenses
and all costs of investigation), as they are incurred, that are directly or
indirectly related to or otherwise incurred in connection with the Solicitor's
gross negligence, bad faith or willful misconduct, any violation by the
Solicitor of any law or regulation in connection with carrying out its duties
under this Agreement or any breach by the Solicitor of this Agreement.
8. Confidentiality. The Solicitor will hold in confidence any and all
information and materials provided to the Solicitor by Hatteras. The Solicitor
will not use any such information or materials except for purposes contemplated
by this Agreement, and the Solicitor will not reproduce, disclose or distribute
any such information or materials unless permitted by this Agreement without the
prior written consent of Hatteras. The Solicitor shall, on Hatteras' request or
upon the termination of this Agreement for any reason, promptly return to
Hatteras all Governing Documents and other materials theretofore provided to the
Solicitor by Hatteras and all copies thereof and excerpts therefrom in the
Solicitor's possession. Except as permitted hereby, the Solicitor will not
distribute any information relating to the Funds or Hatteras, including, without
limitation, the Funds' Governing Documents and the Hatteras Brochure, to any
Person without the prior approval of Hatteras.
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9. Representations and Warranties of the Solicitor. The Solicitor
represents and warrants to Hatteras as follows:
(a) The Solicitor has full power and authority and is permitted by
applicable law to enter into and carry out its obligations under this Agreement
and to own its properties and conduct its business as described in this
Agreement.
(b) The performance of the obligations under this Agreement by the
Solicitor will not violate the terms of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement, management or advisory
agreement, or other agreement or instrument to which the Solicitor, or any of
its employees and affiliates, is a party or by which any such Person is bound or
to which any of the property or assets of any such Person is subject, or any
order, rule, law, regulation or other legal requirement applicable to any such
Person or to the property or assets of any such Person.
(c) There is not pending or, to the best of the Solicitor's
knowledge, threatened any action, suit or proceeding before or by any court or
other governmental body or regulatory authority to which the Solicitor or any
affiliate thereof that is or may be a party thereto, or any of their properties
that is or may be subject thereto, and no event has occurred relating to the
Solicitor or its affiliates that might render unavailable the exemptions from
registration or qualification of Investments under federal or state securities
laws, if applicable. Without limiting the generality of the foregoing, neither
the Solicitor nor any of its affiliates: (i) is subject to an order of the
Securities Exchange Commission (the "SEC") issued under Section 203(f) of the
Advisers Act, (ii) has been convicted within the previous ten years from the
date hereof of any felony or misdemeanor involving conduct described in Section
203(e)(2)(A) through (D) of the Advisers Act, (iii) has been found by the SEC to
have engaged, or has been convicted of engaging, in any of the conduct specified
in paragraph (1), (5) or (6) of Section 203(e) of the Advisers Act, (iv) is
subject to any order, judgment or decree described in Section 203(e)(4) of the
Advisers Act, or (v) is involved in any proceeding or subject to any order,
judgment or decree under the rules of the National Association of Securities
Dealers (the "NASD"). In the event that the Solicitor becomes subject to any
order, conviction, finding, judgment or decree described in this Section 9(c),
it will promptly advise Hatteras of such fact and Hatteras will not be obligated
to pay the Solicitor any amount hereunder for such period in which the Solicitor
is subject to such order, conviction, finding, judgment or decree.
(d) If the Solicitor or any of its affiliates becomes subject to any
event or condition that would make such Person ineligible under paragraph
(a)(1)(ii) of Rule 206(4)-3 under the Advisers Act to receive cash solicitation
fees from Hatteras, Hatteras will not be obligated to make any payment
whatsoever otherwise required by this Agreement unless and until the Solicitor
provides Hatteras with a written opinion of counsel, in form and substance
acceptable to Hatteras in Hatteras' sole discretion, that such payments would
not result in any violation of any law or regulation.
(e) The Solicitor has and will maintain all business and
professional licenses, registrations and permits necessary or appropriate, and
agrees to obtain and maintain any such license, registration or permit that may
hereafter become necessary or appropriate, under all applicable laws and
regulations to carry on the business contemplated by this Agreement. In
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particular, but without limiting the generality of the foregoing, the Solicitor
is and will be duly licensed or registered as a broker-dealer or registered
representative of a broker-dealer under the laws of each jurisdiction requiring
such licensing or registration. The Solicitor will maintain each such license,
registration and permit in full force and effect to the extent necessary or
appropriate under all applicable laws and regulations to carry on the business
contemplated by this Agreement.
(f) The Solicitor undertakes to perform its duties hereunder in a
manner consistent with the instructions of Hatteras, the provisions of the
Advisers Act and the rules thereunder, and the rules of, and notices issued by,
the NASD.
(g) The Solicitor has reviewed the written disclosure statement
substantially in the form attached hereto as Exhibit B, and such disclosure
statement does not and will not contain any misstatement of a material fact or
omit to state any material fact as relates to the Solicitor stated therein or
necessary to make the statements made therein not misleading. Without limiting
the foregoing, the Solicitor will not make any statement that could cause a
reasonable person to conclude that it provides investment advisory services to
the Fund or that Hatteras does not provide investment advisory services to the
Funds.
(h) The Solicitor will not solicit any employee benefit plan covered
by ERISA for which it or any of its officers, directors, employees, affiliates
or agents serves as a trustee or administrator, or an employer of any employee
covered by such plan.
(i) The Solicitor will not solicit any state or municipal entity for
which either it or any of its officers, directors, employees, affiliates or
agents has served, within the past two years, as a civil servant or an elected
official or has been retained to provide professional services.
(j) The Solicitor has had the opportunity to review the Governing
Documents and the Hatteras Brochure and has had the opportunity to ask Hatteras
any questions and receive answers in connection with the statements contained in
such documents and in connection with the terms and conditions by which
Investments would be offered.
(k) The representations and warranties set forth in Section 9(a)
through (i) above shall be continuous during the entire term of this Agreement
and if, at any time, any event will occur that could make any of the
representations and warranties in this Section 9 incomplete or inaccurate, such
event will be deemed to be a breach by the Solicitor of this Agreement and the
Solicitor will immediately notify Hatteras of the occurrence of such event.
10. Independent Contractor. The Solicitor is and will hereafter act as an
independent contractor and not as an employee or agent of Hatteras and nothing
in this Agreement will be interpreted or construed to create any employment,
agency, partnership, joint venture or other relationship between the Solicitor
and Hatteras. The Solicitor will not hold itself out as having, and will not
state to any Person that the Solicitor has, any such relationship with a Fund or
Hatteras other than as an independent contractor. Except to the extent that
Hatteras is required by law or regulation to supervise the Solicitor's
activities, the Solicitor will retain full control
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over the manner, means, methods, times and places by or at which the Solicitor
performs services under this Agreement.
11. Notices. Except for oral notices expressly permitted hereby, any
notice, consent, authorization or other communication to be given hereunder will
be in writing and will be deemed duly given and received when delivered
personally or transmitted by facsimile or, if sent by mail, five business days
after being mailed by first class mail, or one business day after being sent by
an internationally recognized overnight delivery service, charges and postage
prepaid, properly addressed to the party to receive such notice, at the address
or facsimile number specified below that party's signature (or at such other
address as will be specified by such party by like notice).
12. Amendments. This Agreement may not be amended or modified except by a
writing signed by both parties.
13. Governing Law. This Agreement will be governed by and construed and
interpreted in accordance with the laws of North Carolina, without giving effect
to any choice of law provision thereof, except to the extent federal law
(including the Advisers Act) pre-empts any provision of state law.
14. Assignment; Entire Agreement; Counterparts. Neither this Agreement nor
any rights under this Agreement are assignable and no duties or obligations
under this Agreement are delegable. Any attempted or purported assignment or
delegation will be void. This Agreement contains the entire agreement of the
parties and supersedes all prior or contemporaneous negotiations,
correspondence, understandings and agreements between the parties, with respect
to the subject matter hereof. This Agreement is not intended to confer on any
Person other than the parties hereto and the Persons described in Section 7 any
rights or remedies hereunder. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original and all of which together
will be considered one and the same instrument.
15. Headings; Gender; Number; References. The headings at the beginning of
the sections hereof are solely for convenience of reference and are not part of
this Agreement. As used herein, each gender includes each other gender, the
singular includes the plural and vice versa, as the context may require. All
references to sections are intended to refer to sections of this Agreement,
except as otherwise indicated.
16. No Waiver. No right or power of either party will be deemed to have
been waived by any act or conduct on the part of that party, or by any neglect
to exercise such right or power, or by any delay in so doing; and every right
and power of that party will continue in full force and effect until such right
or power is specifically waived by an instrument in writing executed by that
party. No waiver of any right or power on any one occasion will be deemed to be
a waiver of any other right or power on that occasion or of any right or power
on any subsequent occasion. All remedies of either party against the other party
are cumulative.
17. Arbitration. THE PARTIES WAIVE THEIR RIGHTS TO SEEK REMEDIES IN COURT,
INCLUDING ANY RIGHT TO A JURY TRIAL. Any claim for money damages between the
parties in connection with any matter hereunder will be resolved by binding
arbitration on an expedited
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basis in Wake County, North Carolina in accordance with the then prevailing
rules of the American Arbitration Association and any judgment may be entered
into any court having jurisdiction thereof. There will be three arbitrators
selected within ten (10) days of notification to the other party of the dispute
being referred to arbitration; each side to any controversy, dispute,
disagreement, or claim will select an arbitrator and the two arbitrators so
selected will select the third arbitrator; provided that: (i) the arbitrators
will be practicing attorneys who are members of the North Carolina State Bar,
(ii) the arbitrators will be knowledgeable in industry standards and practices,
(iii) the authority of the arbitrators will be limited to construing and
enforcing the express terms of hereunder, and (iv) the arbitrators will only
state the reasons for the award in a written opinion if all parties to the
arbitration so request.
18. Attorneys' Fees. In the event of any controversy, claim or dispute
between the parties arising out of or relating to this Agreement, or the alleged
breach thereof, the prevailing party shall, in addition to any other relief or
award, be entitled to recover its reasonable attorneys' fees and all of the
costs incurred in connection therewith.
19. Severability. If any agreement, covenant, warranty or other provision
of this Agreement is invalid, illegal or incapable of being enforced by reason
of any rule of law or public policy, all other agreements, covenants,
warranties, and other provision of this Agreement shall, nevertheless, remain in
full force and effect.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE.]
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IN WITNESS WHEREOF, this Agreement has been duly executed by or on behalf
of the parties hereto as of the date first written HATTERAS INVESTMENT PARTNERS
LLC above.
HATTERAS:
HATTERAS INVESTMENT PARTNERS HATTERAS INVESTMENT PARTNERS
LLC LLC
By: ____________________________ By: ____________________________
Name: Xxxxx X. Xxxxxxx Name: J. Xxxxxxx Xxxxxx
Title: President Title: Director
Address: 0000 Xxx Xxxxx Xxxx, Xxxxx 000 Address: 0000 Xxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000-0000 Xxxxxxx, XX 00000-0000
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
SOLICITOR:
By: ____________________________
Name:
Title:
Address:
Telephone:
Facsimile:
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EXHIBIT A
SOLICITATION FEE (AS A
PERCENTAGE OF
THE FUND'S
FUND MANAGEMENT FEE)
---- ---------------
Hatteras Diversified Strategies Fund LP 20%
Hatteras Diversified Strategies Offshore Fund Ltd. 20%
Hatteras Multi-Strategy Fund I, L.P. 20%
Hatteras Multi-Strategy II, L.P. 20%
EXHIBIT B
DISCLOSURE STATEMENT
FOR INVESTORS IN
HATTERAS DIVERSIFIED STRATEGIES FUND LP
HATTERAS DIVERSIFIED STRATEGIES OFFSHORE FUND LTD.
HATTERAS MULTI-STRATEGY II, L.P.
HATTERAS MULTI-STRATEGY FUND I, L.P.
Hatteras Investment Partners LLC ("Hatteras") is an investment adviser
registered under the Investment Advisers Act of 1940, as amended. Hatteras
serves as investment adviser to [name of Fund] (the "Fund") and certain
employees of Hatteras serve as the directors of the Fund. Hatteras has engaged
the services of [name of Solicitor] (the "Solicitor") to solicit prospective
investors to acquire interests in the Fund (the "Investment") pursuant to a
written agreement.
As compensation for the services rendered by the Solicitor, Hatteras pays
the Solicitor a Solicitation Fee of 20% of any management fees paid by the
Investor (either directly or via the Investor's pro rata portion of management
fees paid by the Fund) for so long as Hatteras manages such Investor's assets.
The compensation arrangements between Hatteras and the Solicitor with respect to
the Investor named below are set forth below:
Terms of compensation (include rate,
basis and term (i.e., up front or Relationship of Solicitor with
Name of Solicitor ongoing) of payment) Hatteras (if any)
----------------- ----------------------------------- ---------------------------------
__________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________
To the extent that an Investor's Solicitation Fee is higher than that
charged to others, its cost of investing in the Fund is higher than the cost of
investing for other investors. Otherwise, the compensation to the Fund and the
Solicitor does not in any way affect any management or performance fee or
allocation that an Investor would be charged or allocated in the event that an
Investor acquired the Investment without solicitation by the Solicitor.
Please acknowledge your receipt of this written Disclosure Statement and
the Part II of Hatteras' Form ADV (the "Hatteras Brochure"):
I hereby acknowledge receipt of this Disclosure Statement and the Hatteras
Brochure.
_______________________ __________________
Name: Date:
EXHIBIT C
LIST OF PROHIBITED JURISDICTIONS
