UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE TO
TENDER OFFER STATEMENT UNDER SECTION 14(D)(1) OR 13(E)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
HATTERAS MASTER FUND, L.P.
(Name of Subject Company (Issuer))
HATTERAS MASTER FUND, L.P.
(Name of Filing Person(s) (Issuer))
LIMITED PARTNERSHIP INTERESTS
(Title of Class of Securities)
N/A
(CUSIP Number of Class of Securities)
David B. Perkins
8816 Six Forks Road
Suite 107
Raleigh, North Carolina 27615
919-846-2324
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications on Behalf of the Filing Person(s))
With a copy to:
Michael P. Malloy, Esq.
Drinker Biddle & Reath LLP
One Logan Square
Philadelphia, PA 19103-6996
215-988-2700
June 23, 2006
(Date Tender Offer First Published,
Sent or Given to Security Holders)
CALCULATION OF FILING FEE
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Transaction Valuation: $20,000,000 (a) Amount of Filing Fee: $2,140.00 (b)
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(a) Calculated as the aggregate maximum value of Interests being purchased.
(b) Calculated at $107.00 per $1,000,000 of the Transaction Valuation.
[ ] Check the box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was previously
paid. Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
Amount Previously Paid:
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Form or Registration No.:
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Filing Party:
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Date Filed:
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[ ] Check the box if the filing relates solely to preliminary
communications made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which the
statement relates:
[ ] third-party tender offer subject to Rule 14d-1.
[X] issuer tender offer subject to Rule 13e-4.
[ ] going-private transaction subject to Rule 13e-3.
[ ] amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the results
of the tender offer: [ ]
ITEM 1. SUMMARY TERM SHEET.
o Hatteras Master Fund, L.P. (the "Fund") is offering to purchase
Interests (as defined below) in the Fund (the "Offer") in an amount up
to $20,000,000 of the net assets of the Fund from partners of the Fund
(the "Partners") at their net asset value (that is, the value of the
Fund's total assets minus its total liabilities, including accrued fees
and expenses, multiplied by the proportionate interest in the Fund a
Partner desires to tender, after giving effect to all allocations,
including any incentive allocation) calculated as of the Repurchase
Date (as defined below). As used in this Schedule TO, the term
"Interest" or "Interests" refers to the limited partnership interests
in the Fund or portions of interests that constitute the class of
security that is the subject of the Offer, and includes all or any
portion of a Partner's Interest as the context requires. Partners that
desire to tender an Interest for purchase must do so by 12:00 midnight,
Eastern Standard Time on July 25, 2006 (the "Initial Notice Due Date"),
subject to any extension of the Offer made in the absolute discretion
of the Fund's Board of Directors. The later of the Initial Notice Due
Date or the latest time and date that the Fund designates as the
deadline and expiration date for Partners to tender an Interest for
purchase is called the "Notice Due Date," and is the date upon which
the Offer expires. The net asset value of Interests will be calculated
for this purpose as of September 30, 2006, or at a later date
determined by the Fund if the Offer is extended (in each case, the
"Repurchase Date").
o The Fund reserves the right to adjust the Repurchase Date to correspond
with any extension of the Offer. The Fund will review the net asset
value calculation of the Interests during the Fund's audit for the
fiscal year ending on or after the Repurchase Date, which the Fund
expects will be completed within 60 days of the fiscal year-end, and
that net asset value will be used to determine the final amount paid
for tendered Interests. Since the Fund's fiscal year end is March 31,
2007, the Fund expects that the audit will be completed by the end of
May 2007.
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o A Partner may tender its entire Interest or a portion of its Interest;
however, the minimum value of a repurchase is $50,000, subject to the
discretion of the General Partner (as defined below) to allow
otherwise. See Item 4(a)(1)(ii).
o If a Partner tenders its Interest and the Fund purchases that Interest,
the Fund will issue the Partner a non-interest bearing,
non-transferable promissory note (the "Note") entitling the Partner to
receive an amount equal to the unaudited net asset value of the
Interest tendered (valued in accordance with the Fund's Amended and
Restated Agreement of Limited Partnership dated as of March 31, 2005
(as it may be amended, modified or otherwise supplemented from time to
time, the "Partnership Agreement")) determined as of the Repurchase
Date.
o The Note will entitle the Partner to receive an initial payment in cash
(valued according to the Partnership Agreement) equal to at least 90%
(100% in the case of a Partner that tenders less than its entire
Interest) of the unaudited net asset value of the Interest tendered by
the Partner that is accepted for purchase by the Fund (the "Initial
Payment"). The Fund may take up to 90 days after the Repurchase Date to
make the Initial Payment.
o In the case of a Partner that tenders its entire Interest, the Note
will also entitle the Partner to receive a contingent payment (the
"Post-Audit Payment") equal to the excess, if any, of (1) the net asset
value of the Interest tendered and purchased as of the Repurchase Date
(as it may be adjusted based upon the next annual audit of the Fund's
financial statements), OVER (2) the Initial Payment. The Post-Audit
Payment will be payable promptly after the completion of the Fund's
next annual audit. Final adjustments of payments in connection with the
repurchased Interests generally will be made promptly after the
completion of the annual audit of the Fund. Proceeds of the Initial
Payment and the Post-Audit Payment, if applicable, will be
wire-transferred directly to an account designated by the Partner. The
Note will be held by PFPC Inc. (referred to herein as "PFPC" or the
"Administrator") on the Partner's behalf. Upon a written request by a
Partner to PFPC, PFPC will mail the Note to the Partner at the address
of the Partner as maintained in the books and records of the Fund. See
Item 4(a)(1)(ii).
o Partial Interests will be repurchased on a "first in-first out" basis
(i.e., the portion of the Interest repurchased will be deemed to have
been taken from the earliest capital contribution made by such Partner
(adjusted for subsequent appreciation and depreciation) until that
capital contribution is decreased to zero, and then from each
subsequent capital contribution made by such Partner (as adjusted)
until such capital contribution is decreased to zero).
o The Offer is being made to all Partners of the Fund and is not
conditioned on any minimum amount of Interests being tendered. If the
Fund accepts the tender of the Partner's Interest, the Fund will make
payment for Interests it purchases from one or more of the following
sources: cash on hand, proceeds from the sale of securities held by the
Fund, withdrawal proceeds from investment funds in which the Fund
invests, or borrowings. The purchase amount will be paid entirely in
cash. See Item 4(a)(1)(ii).
o Partners that desire to tender an Interest for purchase must do so by
12:00 midnight, Eastern Standard Time, on Tuesday, July 25, 2006 (or if
the Offer is extended, by any later Notice Due Date), at which time the
Offer is scheduled to expire. Until the Notice Due Date, Partners have
the right to change their minds and withdraw any tenders of their
Interests. Interests withdrawn may be re-tendered, however, provided
that such tenders are made before the Notice Due Date by following the
tender procedures described herein. If the Fund has not yet accepted a
Partner's tender of an Interest on or prior to August 21, 2006 (I.E.,
the date 40 business days from the commencement of the Offer), a
Partner will also have the right to withdraw its tender of its Interest
after such date. See Item 4(a)(1)(vi).
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o If a Partner would like the Fund to purchase its entire Interest or any
portion of its Interest, it should complete, sign and either (i) mail
(via certified mail, return receipt requested) or otherwise deliver a
Letter of Transmittal to Hatteras Master Fund, L.P., c/o PFPC Inc. at
P.O. Box 219, Claymont, Delaware 19703, Attention: Tender Offer
Administrator; or (ii) fax it to PFPC at (302) 791-2790, Attention:
Tender Offer Administrator, so that it is received before 12:00
midnight, Eastern Standard Time, on July 25, 2006. IF THE PARTNER
CHOOSES TO FAX THE LETTER OF TRANSMITTAL, IT MUST MAIL THE ORIGINAL
LETTER OF TRANSMITTAL TO PFPC PROMPTLY AFTER IT IS FAXED (ALTHOUGH THE
ORIGINAL, IF FAXED, DOES NOT HAVE TO BE RECEIVED BY MAIL BEFORE 12:00
MIDNIGHT, EASTERN STANDARD TIME, ON JULY 25, 2006). See Item
4(a)(1)(vii). The value of the Interests may change between May 31,
2006 (the last time prior to the date of this filing as of which net
asset value was calculated) and the Repurchase Date, the date as of
which the value of the Interests being purchased will be determined.
See Item 2(b). Partners desiring to obtain the estimated net asset
value of their Interests, which the Fund will calculate from time to
time based upon the information the Fund receives from the portfolio
managers of the investment funds in which it invests, may contact PFPC,
at (800) 348-1824 or at the address listed on the first page of the
Letter of Transmittal, Monday through Friday, except holidays, during
normal business hours of 9:00 a.m. to 5:00 p.m. (Eastern Standard
Time).
Please note that just as each Partner has the right to withdraw
its tender prior to the Notice Due Date, the Fund has the right to cancel, amend
or postpone the Offer at any time before the Notice Due Date. Also realize that
although the Offer is scheduled to expire on July 25, 2006, a Partner that
tenders its entire Interest will remain a Partner of the Fund through the
Repurchase Date, when the net asset value of the Partner's Interest is
calculated, notwithstanding the Fund's acceptance of the Partner's Interest for
purchase.
ITEM 2. ISSUER INFORMATION.
(a) The name of the issuer is "Hatteras Master Fund, L.P." The
Fund is registered under the Investment Company Act of 1940, as amended (the
"1940 Act"), as a closed-end, non-diversified, management investment company,
and is organized as a Delaware limited partnership. The principal executive
office of the Fund is located at 8816 Six Forks Road, Suite 107, Raleigh, North
Carolina, 27615 and its telephone number is (919) 846-2324.
(b) The title of the securities that are the subject of the Offer
is "limited partnership interests," or portions thereof, in the Fund. As of the
close of business on May 31, 2006, the net asset value of the Fund was
$249,225,601. Subject to the conditions set out in the Offer, the Fund will
purchase Interests in an amount up to $20,000,000 of the net assets of the Fund
that are tendered by and not withdrawn by Partners as described above in Item 1.
(c) There is no established trading market for the Interests, and
any transfer of an Interest is strictly limited by the terms of the Partnership
Agreement.
ITEM 3. IDENTITY AND BACKGROUND OF FILING PERSON.
The name of the filing person (I.E., the Fund and the subject
company) is "Hatteras Master Fund, L.P." The Fund's principal executive office
is located at 8816 Six Forks Road, Suite 107, Raleigh, North Carolina, 27615 and
the telephone number is (919) 846-2324. The General Partner of the Fund is
Hatteras Investment Management LLC (the "General Partner"). The principal
executive office of the General Partner is located at 8816 Six Forks Road, Suite
107, Raleigh, North Carolina, 27615. The investment manager of the Fund is
Hatteras Investment Partners, LLC (the "Investment Manager"). The principal
executive office of the Investment Manager is located at 8816 Six Forks Road,
Suite 107, Raleigh, North Carolina, 27615. The directors on the Fund's board of
directors (the "Board of Directors") are David B. Perkins, H. Alexander Holmes,
Steve E. Moss and Gregory S. Sellers. Their address is c/o Hatteras Master Fund,
L.P. at 8816 Six Forks Road, Suite 107, Raleigh, North Carolina 27615.
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ITEM 4. TERMS OF THE TENDER OFFER.
(a) (1) (i) Subject to the conditions set out in the Offer, the
Fund will purchase Interests in an amount up to $20,000,000 of the net assets of
the Fund that are tendered by Partners by 12:00 midnight, Eastern Standard Time,
on July 25, 2006 (or if the Offer is extended, by any later Notice Due Date) and
not withdrawn as described in Item 4(a)(1)(vi).
(ii) The value of the Interests tendered to the Fund for purchase
will be the net asset value as of the close of business on September 30, 2006,
or, if the Offer is extended, as of any later Repurchase Date. See Item
4(a)(1)(v) below.
A Partner may tender its entire Interest or a portion of its
Interest. Each Partner that tenders an Interest that is accepted for purchase
will be given a Note, a non-interest bearing, non-transferable promissory note,
promptly after the Notice Due Date. The Note will entitle the Partner to be paid
an amount equal to the value, determined as of the Repurchase Date, of the
Interest being purchased (subject to adjustment upon completion of the next
annual audit of the Fund's financial statements). The Note will entitle the
Partner to receive the Initial Payment in an amount equal to at least 90% (100%
in the case of a Partner that tenders less than its entire Interest) of the
unaudited net asset value of the Interest tendered and accepted for purchase by
the Fund, determined as of the Repurchase Date. The Fund may take up to 90 days
after the Repurchase Date to make the Initial Payment. In the case of a Partner
that tenders its entire Interest, the Note will also entitle a Partner to
receive the Post-Audit Payment, a contingent payment equal to the excess, if
any, of (1) the net asset value of the Interest tendered and purchased as of the
Repurchase Date (as it may be adjusted based upon the next annual audit of the
Fund's financial statements), OVER (2) the Initial Payment. The Post-Audit
Payment will be payable promptly after the completion of the Fund's next annual
audit. Final adjustments of payments in connection with the repurchased
Interests generally will be made promptly after the completion of the annual
audit of the Fund. It is anticipated that the annual audit of the Fund's
financial statements will be completed no later than 60 days after the fiscal
year-end of the Fund.
The purchase amount will be paid entirely in cash.
(iii) The Offer is scheduled to expire at 12:00 midnight, Eastern
Standard Time, on July 25, 2006. Partners that desire to tender an Interest for
purchase must do so by that time, unless the Offer is extended in the absolute
discretion of the Board of Directors.
(iv) Not applicable.
(v) At the absolute discretion of the Board of Directors, the
Fund reserves the right, at any time and from time to time, to extend the period
of time during which the Offer is open by notifying Partners of such extension.
If the Fund elects to extend the tender period, the net asset value of the
Interests tendered for purchase will be determined at the close of business on a
day determined by the Fund and notified to the Partners. During any such
extension, all Interests previously tendered and not withdrawn will remain
subject to the Offer. At the absolute discretion of the Board of Directors, the
Fund also reserves the right, at any time and from time to time, up to and
including the Notice Due Date, to: (a) cancel the Offer in the circumstances set
out in Section 8 of the Offer to Purchase dated June 23, 2006, and, in the event
of such cancellation, not to purchase or pay for any Interests tendered pursuant
to the Offer; (b) amend the Offer; and (c) postpone the acceptance of Interests.
If the Fund determines to amend the Offer or to postpone the acceptance of
Interests tendered, it will, to the extent necessary, extend the period of time
during which the Offer is open as provided above and will promptly notify the
Partners.
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(vi) Until the Notice Due Date, Partners have the right to change
their minds and withdraw any tenders of their Interests. Interests withdrawn may
be re-tendered, however, provided that such tenders are made before 12:00
midnight, Eastern Standard Time, July 25, 2006 (or, if the Offer is extended, by
any later Notice Due Date) by following the tender procedures described herein.
Pursuant to Rule 13e-4(f)(2)(ii) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), if the Fund has not yet accepted a Partner's
tender of an Interest on or prior to August 21, 2006 (I.E., the date 40 business
days from the commencement of the Offer), a Partner will also have the right to
withdraw its tender of its Interest after such date.
(vii) Partners wishing to tender Interests pursuant to the Offer
should send or deliver a completed and executed Letter of Transmittal to PFPC to
the attention of the Tender Offer Administrator, at the address set out on the
first page of the Letter of Transmittal, or fax a completed and executed Letter
of Transmittal to PFPC, also to the attention of the Tender Offer Administrator,
at the fax number set out on the first page of the Letter of Transmittal. The
completed and executed Letter of Transmittal must be received by PFPC, either by
mail or by fax, no later than 12:00 midnight, Eastern Standard Time, on July 25,
2006 (or if the Offer is extended, by any later Notice Due Date). The Fund
recommends that all documents be submitted to PFPC by certified mail, return
receipt requested, or by facsimile transmission. A Partner choosing to fax a
Letter of Transmittal to PFPC must also send or deliver the original completed
and executed Letter of Transmittal to PFPC promptly thereafter.
Any Partner tendering an Interest pursuant to the Offer may
withdraw its tender as described above in Item 4(a)(1)(vi). To be effective, any
notice of withdrawal must be timely received by PFPC at the address or fax
number set out on the first page of the Letter of Transmittal. A tender of
Interests properly withdrawn shall not thereafter be deemed to be tendered for
purposes of the Offer. Interests withdrawn may be re-tendered, however, provided
that such tenders are made before the Notice Due Date by following the tender
procedures described above.
(viii) For purposes of the Offer, the Fund will be deemed to have
accepted (and thereby purchased) Interests that are tendered if and when it
gives written notice to the tendering Partner of its election to purchase such
Interest.
(ix) If Interests in excess of $20,000,000 of the net assets of
the Fund are duly tendered to the Fund prior to the Notice Due Date and not
withdrawn prior to the Notice Due Date, the Fund will in its sole discretion
either: (a) accept the additional Interests permitted to be accepted pursuant to
Rule 13e-4(f)(3) under the Exchange Act; (b) extend the Offer, if necessary, and
increase the amount of Interests that the Fund is offering to purchase to an
amount it believes sufficient to accommodate the excess Interests tendered as
well as any Interests tendered during the extended Offer; or (c) accept
Interests tendered before the Notice Due Date and not withdrawn prior to the
Notice Due Date for payment on a pro rata basis based on the aggregate net asset
value of tendered Interests. The Offer may be extended, amended or canceled in
various other circumstances described in Item 4(a)(1)(v) above.
(x) The purchase of Interests pursuant to the Offer will have the
effect of increasing the proportionate interest in the Fund of Partners that do
not tender Interests. Partners that retain their Interests may be subject to
increased risks that may possibly result from the reduction in the Fund's
aggregate assets resulting from payment for the Interests tendered. These risks
include the potential for greater volatility due to decreased diversification.
The Fund believes; however, that this result is unlikely given the nature of the
Fund's investment program. A reduction in the aggregate assets of the Fund may
result in Partners that do not tender Interests bearing higher costs to the
extent that certain expenses borne by the Fund are relatively fixed and may not
decrease if assets decline. These effects may be reduced or eliminated to the
extent that additional subscriptions for Interests are made by new and existing
Partners from time to time. Payment for Interests purchased pursuant to the
Offer may also require the Fund to liquidate portfolio holdings earlier than the
Fund's Investment Manager would otherwise have caused these holdings to be
liquidated, potentially resulting in losses or increased investment related
expenses.
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(xi) Not applicable.
(xii) The following discussion is a general summary of the
federal income tax consequences of the purchase of Interests by the Fund for
cash pursuant to the Offer. Partners should consult their own tax advisors for a
complete description of the tax consequences to them of a purchase of their
Interests by the Fund pursuant to the Offer.
A Partner who sells all or part of the Partner's Interest to the
Fund will generally recognize income or gain only to the extent the amount of
cash received by the Partner exceeds the Partner's adjusted tax basis in the
Partner's entire Interest at that time. The Partner's adjusted tax basis in the
Partner's Interest will be reduced by the amount of any cash received by the
Partner from the Fund, and any excess of that cash over that basis will
generally constitute capital gain for the Partner. It is possible, however, that
Partners might recognize some ordinary income by reason of the sale, under
certain technical rules that apply to the extent a partner disposes of the
partner's share of "unrealized receivables" of a partnership (as defined in
Internal Revenue Code section 751). No loss will be recognized by a Partner on
such a sale to the Fund, except that a Partner who sells the Partner's entire
Interest to the Fund may recognize a capital loss at the time of the
determination of the Post-Audit Payment to the extent the aggregate cash
received, and to be received, by the Partner is less than the Partner's adjusted
tax basis in the Interest.
(2) Not applicable.
(b) Any Interests to be purchased from any officer, director or
affiliate of the Fund will be on the same terms and conditions as any other
purchase of Interests.
ITEM 5. PAST CONTRACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.
The Fund's registration statement on Form N-2, filed with the
U.S. Securities and Exchange Commission on March 31, 2005 (as it may be amended,
modified or otherwise supplemented from time to time, the "Registration
Statement"), and the Partnership Agreement, each of which was provided to each
Partner in advance of subscribing for Interests, provide that the Board of
Directors has the discretion to determine whether the Fund will purchase
Interests from Partners from time to time pursuant to written tenders, and that
one of the factors the Board of Directors will consider in making such
determination is the recommendations of the General Partner and the Investment
Manager. The Registration Statement also states that the General Partner and the
Investment Manager expect that they will recommend to the Board of Directors
that the Fund offer to repurchase Interests from Partners quarterly each year.
The Fund commenced operations on January 3, 2005 and has made five previous
offers to purchase Interests from Partners since inception.
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The Fund is not aware of any contract, arrangement, understanding
or relationship relating, directly or indirectly, to the Offer (whether or not
legally enforceable) between: (i) the Fund, the General Partner, the Investment
Manager or members of the Board of Directors or any person controlling the Fund,
the General Partner or the Investment Manager; and (ii) any other person, with
respect to the Interests.
ITEM 6. PURPOSES OF THIS TENDER OFFER AND PLANS OR PROPOSALS.
(a) The purpose of the Offer is to provide liquidity to Partners
that hold Interests, as contemplated by and in accordance with the procedures
set out in the Registration Statement and the Partnership Agreement.
(b) Interests that are tendered to the Fund in connection with
the Offer will be retired, although the Fund may issue Interests from time to
time in transactions not involving any public offering, conducted pursuant to
Rule 506 of Regulation D under the Securities Act of 1933, as amended, in
accordance with the Partnership Agreement. The Fund currently expects that it
will accept subscriptions for Interests as of the first day of each month, but
is under no obligation to do so, and may do so more frequently as determined by
the General Partner.
(c) None of the Fund, the General Partner, the Investment Manager
or the Board of Directors or any person controlling the Fund, the General
Partner or the Investment Manager has any plans or proposals that relate to or
would result in: (1) an extraordinary transaction, such as a merger,
reorganization or liquidation, involving the Fund; (2) any purchase, sale or
transfer of a material amount of assets of the Fund; (3) any material change in
the present distribution policy or indebtedness or capitalization of the Fund;
(4) any change in the present Board of Directors or in the management of the
Fund including, but not limited to, any plans or proposals to change the number
or the term of members of the Board of Directors, or to fill any existing
vacancy on the Board of Directors or to change any material term of the
employment contract of any executive officer; (5) any other material change in
the Fund's corporate structure or business, including any plans or proposals to
make any changes in its investment policies, for which a vote would be required
by Section 13 of the 1940 Act; (6) the acquisition by any person of additional
Interests (other than the Fund's intention to accept subscriptions for Interests
on the first day of each month and from time to time in the discretion of the
General Partner), or the disposition of Interests (other than through periodic
purchase offers, including the Offer); or (7) any changes in the Partnership
Agreement or other governing instruments or other actions that could impede the
acquisition of control of the Fund. Because Interests are not traded in any
market, Subsections (6), (7) and (8) of Regulation M-A ss. 229.1006(c) are not
applicable to the Fund.
ITEM 7. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) The Fund expects that the amount offered for the purchase of
Interests pursuant to the Offer, which will not exceed $20,000,000 of the net
assets of the Fund (unless the Fund elects to purchase a greater amount as
described in Item 4(a)(1)(ix)), will be paid from one or more of the following
sources: cash on hand, proceeds from the sale of securities held by the Fund,
withdrawal proceeds from investment funds in which the Fund invests, or
borrowings (as described in paragraph (d) below). Upon its acceptance of
tendered Interests for repurchase, the Fund will maintain daily, as an entry on
its books, a distinct account consisting of (1) cash, (2) liquid securities, or
(3) interests in specific investment funds in which the Fund invests (or any
combination of them), in an amount equal to the aggregate estimated unpaid
dollar amount of any Note, as described above.
(b) There are no material conditions to the financing of the
transaction. There are currently no alternative financing plans or arrangements
for the transaction.
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(c) Not applicable.
(d) None of the Fund, the General Partner, the Investment Manager
or the Board of Directors or any person controlling the Fund, the General
Partner or the Investment Manager has determined at this time to borrow funds to
purchase Interests tendered in connection with the Offer. Depending on the
dollar amount of Interests tendered and prevailing general economic and market
conditions; the Fund, in its sole discretion, may decide to seek to borrow money
to fund all or a portion of the purchase amount for Interests, subject to
compliance with applicable law. The Fund expects that the repayment of any
amounts borrowed will be financed from additional funds contributed to the Fund
by existing or new Partners, from withdrawals of its capital from the investment
funds in which it invests, or from proceeds of the sale of securities and
portfolio assets held by the Fund.
ITEM 8. INTEREST IN SECURITIES OF THE ISSUER.
(a) Not applicable.
(b) Other than the acceptance of subscriptions as of May 1, 2006
and June 1, 2006, there have been no transactions involving Interests that were
effected during the past 60 days by the Fund, the General Partner, the
Investment Manager, any member of the Board of Directors or any person
controlling the Fund, the General Partner or the Investment Manager.
ITEM 9. PERSONS/ASSETS RETAINED, EMPLOYED, COMPENSATED OR USED.
No persons have been directly or indirectly employed or retained
or are to be compensated by the Fund to make solicitations or recommendations in
connection with the Offer.
ITEM 10. FINANCIAL STATEMENTS.
(a) (1) The Fund commenced operations on January 3, 2005.
Reference is made to (i) the audited financial statements dated March 31, 2006,
which were filed with the Securities and Exchange Commission on Form N-CSR on
June 9, 2006 and (ii) the unaudited financial statements dated September 30,
2005, which were filed with the Securities and Exchange Commission on Form N-CSR
on December 8, 2005. Each filing is incorporated by reference in its entirety
for the purpose of filing this Schedule TO.
(2) The Fund is not required to and does not file quarterly
unaudited financial statements under the Exchange Act. The Fund does not have
shares, and consequently does not have earnings per share information.
(3) Not applicable.
(4) The Fund does not have shares, and consequently does not
have book value per share information.
(b) The Fund's assets will be reduced by the amount of the
tendered Interests that are purchased by the Fund. Thus, income relative to
assets may be affected by the Offer. The Fund does not have shares and
consequently does not have earnings or book value per share information.
9
ITEM 11. ADDITIONAL INFORMATION.
(a) (1) None.
(2) None.
(3) Not applicable.
(4) Not applicable.
(5) None.
(b) None.
ITEM 12. EXHIBITS.
Reference is hereby made to the following exhibits, which
collectively constitute the Offer to Partners and are incorporated herein by
reference:
A. Cover Letter to Offer to Purchase and Letter of Transmittal.
B. Offer to Purchase.
C. Form of Letter of Transmittal.
D. Form of Notice of Withdrawal of Tender.
E. Forms of Letters from the Fund to Partners in connection with
the Fund's acceptance of tenders of Interests.
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SIGNATURE
After due inquiry and to the best of my knowledge and belief,
I certify that the information set out in this statement is true, complete and
correct.
HATTERAS MASTER FUND, L.P.
By: /s/ David B. Perkins
--------------------------------------------
Name: David B. Perkins
Title: President and
Chairman of the Board of Directors
HATTERAS INVESTMENT MANAGEMENT LLC,
as General Partner
By: /s/ David B. Perkins
--------------------------------------------
Name: David B. Perkins
Title: Managing Member
June 23, 2006
11
EXHIBIT INDEX
EXHIBITS
A Cover Letter to Offer to Purchase and Letter of Transmittal.
B Offer to Purchase.
C Form of Letter of Transmittal.
D Form of Notice of Withdrawal of Tender.
E Forms of Letters from the Fund to Partners in connection with the
Fund's acceptance of tenders of Interests.
EXHIBIT A
COVER LETTER TO OFFER TO PURCHASE AND LETTER OF TRANSMITTAL
IF YOU DO NOT WANT TO SELL YOUR LIMITED PARTNERSHIP INTERESTS AT THIS TIME,
PLEASE DISREGARD THIS NOTICE. THIS
IS SOLELY NOTIFICATION OF THE FUND'S TENDER OFFER.
June 23, 2006
Dear Hatteras Master Fund, L.P. Partner:
We are writing to inform you of important dates relating to a tender
offer by Hatteras Master Fund, L.P. (the "Fund"). IF YOU ARE NOT INTERESTED IN
HAVING THE FUND REPURCHASE YOUR LIMITED PARTNERSHIP INTEREST OR A PORTION OF
YOUR INTEREST IN THE FUND ("INTEREST") VALUED AS OF SEPTEMBER 30, 2006, PLEASE
DISREGARD THIS NOTICE AND TAKE NO ACTION.
The tender offer period will begin on June 23, 2006 and will end at
12:00 midnight, Eastern Standard Time, on JULY 25, 2006, AT WHICH POINT THE
TENDER OFFER WILL EXPIRE. The purpose of the tender offer is to provide
liquidity to Partners of the Fund that hold Interests. Interests may be
presented to the Fund for purchase only by tendering them during one of the
Fund's announced tender offers.
Should you wish to tender your Interest or a portion of your Interest
for purchase by the Fund during this tender offer period, please complete and
return the enclosed Letter of Transmittal so that it is received by PFPC Inc.
("PFPC") no later than JULY 25, 2006. If you do not wish to have all or any
portion of your Interest repurchased, simply disregard this notice. NO ACTION IS
REQUIRED IF YOU DO NOT WISH TO HAVE ANY PORTION OF YOUR INTEREST REPURCHASED.
If you would like to tender your Interest, you should complete, sign
and either (i) mail (via certified mail, return receipt requested) or otherwise
deliver the Letter of Transmittal to Hatteras Master Fund, L.P., c/o PFPC Inc.
at P.O. Box 219, Claymont, Delaware 19703, Attention: Tender Offer
Administrator; or (ii) fax it to PFPC at (302) 791-2790, Attention: Tender Offer
Administrator (if by fax, please deliver an original, executed copy promptly
thereafter), so that it is RECEIVED BEFORE 12:00 MIDNIGHT, EASTERN STANDARD
TIME, ON JULY 25, 2006.
If you have any questions, please refer to the enclosed Offer to
Purchase document, which contains additional important information about the
tender offer, or call the Tender Offer Administrator at PFPC at (800) 348-1824.
Sincerely,
Hatteras Master Fund, L.P.
EXHIBIT B
OFFER TO PURCHASE
HATTERAS MASTER FUND, L.P.
8816 Six Forks Road
Suite 107
Raleigh, North Carolina 27615
OFFER TO PURCHASE INTERESTS
DATED JUNE 23, 2006
LETTERS OF TRANSMITTAL MUST BE
RECEIVED BY PFPC INC.
BY JULY 25, 2006.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, EASTERN STANDARD TIME, ON JULY 25, 2006,
UNLESS THE OFFER IS EXTENDED
To the Partners of
Hatteras Master Fund, L.P.:
Hatteras Master Fund, L.P., a closed-end, non-diversified, management
investment company organized as a Delaware limited partnership (the "Fund"), is
offering to purchase for cash on the terms and conditions set out in this offer
to purchase (this "Offer to Purchase") and the related Letter of Transmittal
(which, together with this Offer to Purchase, constitutes the "Offer") an amount
of Interests or portions of Interests up to $20,000,000 of the net assets of the
Fund. The Offer is being made pursuant to tenders by partners of the Fund
("Partners") at a price equal to the net asset value of the tendered Interests
as of September 30, 2006 (or at a later date determined by the Fund if the Offer
is extended) (in each case, the "Repurchase Date"). As used in the Offer, the
term "Interest" or "Interests" refers to the limited partnership interests in
the Fund representing beneficial interests in the Fund, and includes all or any
portion of a Partner's Interest as the context requires. Partners that desire to
tender an Interest for purchase must do so by 12:00 midnight, Eastern Standard
Time on July 25, 2006 (the "Initial Notice Due Date"), subject to any extension
of the Offer made in the absolute discretion of the Fund's Board of Directors.
The later of the Initial Notice Due Date or the latest time and date that the
Fund designates as the deadline for Partners to tender an Interest for purchase
is called the "Notice Due Date" and is the date upon which the Offer expires. If
the Fund elects to extend the tender period, the net asset value of the
Interests tendered for purchase will be determined at the close of business on a
day determined by the Fund and notified to the Partners. The Offer is being made
to all Partners and is not conditioned on any minimum amount of Interests being
tendered, but is subject to certain conditions described below. Interests are
not traded on any established trading market and are subject to strict
restrictions on transferability pursuant to the Fund's Amended and Restated
Agreement of Limited Partnership dated as of March 31, 2005 (as it may be
amended, modified or otherwise supplemented from time to time, the "Partnership
Agreement").
Partners should realize that the value of the Interests tendered in the
Offer likely will change between May 31, 2006 (the last time net asset value was
calculated) and the Repurchase Date when the value of the Interests tendered to
the Fund for purchase will be determined. Partners tendering their Interest
should also note that they will remain Partners in the Fund, with respect to the
Interest tendered and accepted for purchase by the Fund, through the Repurchase
Date, when the net asset value of their Interest is calculated. Any tendering
Partners that wish to obtain the estimated net asset value of their Interests
should contact the Tender Offer Administrator at PFPC Inc., the Fund's
Administrator, at (800) 348-1824 or at Hatteras Master Fund, L.P., c/o PFPC Inc.
at P.O. Box 219, Claymont, Delaware 19703, Attention: Tender Offer
Administrator, Monday through Friday, except holidays, during normal business
hours of 9:00 a.m. to 5:00 p.m. (Eastern Standard Time).
Partners desiring to tender all or any portion of their Interest in
accordance with the terms of the Offer should complete and sign the enclosed
Letter of Transmittal and send or deliver it to PFPC Inc. in the manner set out
below.
IMPORTANT
NONE OF THE FUND, HATTERAS INVESTMENT MANAGEMENT LLC (THE "GENERAL
PARTNER"), HATTERAS INVESTMENT PARTNERS LLC (THE "INVESTMENT MANAGER") OR THE
FUND'S BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY PARTNER WHETHER TO
TENDER OR REFRAIN FROM TENDERING INTERESTS. PARTNERS MUST MAKE THEIR OWN
DECISIONS WHETHER TO TENDER INTERESTS, AND, IF THEY CHOOSE TO DO SO, THE PORTION
OF THEIR INTERESTS TO TENDER.
BECAUSE EACH PARTNER'S INVESTMENT DECISION IS A PERSONAL ONE, BASED ON
FINANCIAL CIRCUMSTANCES, NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY
RECOMMENDATION ON BEHALF OF THE FUND AS TO WHETHER PARTNERS SHOULD TENDER
INTERESTS PURSUANT TO THE OFFER. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER
THAN THOSE CONTAINED HEREIN OR IN THE LETTER OF TRANSMITTAL. IF GIVEN OR MADE,
SUCH RECOMMENDATION AND SUCH INFORMATION AND REPRESENTATIONS MUST NOT BE RELIED
ON AS HAVING BEEN AUTHORIZED BY THE FUND, THE FUND'S GENERAL PARTNER, THE
INVESTMENT MANAGER, OR ITS BOARD OF DIRECTORS.
THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED ON THE FAIRNESS OR MERITS OF SUCH TRANSACTION
OR ON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN THIS DOCUMENT.
ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
Questions and requests for assistance and requests for additional
copies of the Offer may be directed to:
Hatteras Master Fund, L.P.
c/o PFPC Inc.
P.O. Box 219
Claymont, DE 19703
Attention: Tender Offer Administrator
Phone: (800) 348-1824
Fax: (302) 791-2790
(ii)
TABLE OF CONTENTS
1. Summary Term Sheet.......................................................1
2. Background and Purpose of the Offer......................................2
3. Offer to Purchase and Price..............................................3
4. Amount of Tender.........................................................3
5. Procedure for Tenders....................................................4
6. Withdrawal Rights........................................................4
7. Purchases and Payment....................................................5
8. Certain Conditions of the Offer..........................................5
9. Certain Information About the Fund.......................................6
10. Certain Federal Income Tax Consequences..................................7
11. Miscellaneous............................................................7
(iii)
1. SUMMARY TERM SHEET
This Summary Term Sheet highlights certain information concerning the
Offer. To understand the Offer fully and for a more complete discussion of the
terms and conditions of the Offer, please read carefully this entire Offer to
Purchase and the related Letter of Transmittal. Section references are to this
Offer to Purchase.
o The Fund (referred to as "we" or the "Fund" in this Summary Term Sheet)
is offering to purchase Interests in an amount up to $20,000,000 of the
net assets of the Fund. We will purchase your Interests at their net
asset value (that is, the value of the Fund's total assets minus its
total liabilities, including accrued fees and expenses, multiplied by
the proportionate interest in the Fund you desire to tender, after
giving effect to all allocations, including any incentive allocation)
calculated as of the Repurchase Date. The net asset value of Interests
will be calculated for this purpose as of September 30, 2006 or, if the
Offer is extended, as of any later Repurchase Date. The Offer will
remain open until 12:00 midnight, Eastern Standard Time, on July 25,
2006 (or if the Offer is extended, until any later Notice Due Date), at
which time the Offer is scheduled to expire.
o The Fund reserves the right to adjust the Repurchase Date to correspond
with any extension of the Offer. The Fund will review the net asset
value calculation of the Interests during the Fund's audit for the
fiscal year ending on March 31, 2007, which the Fund expects will be
completed within 60 days of the fiscal year-end, and that net asset
value will be used to determine the final amount paid for tendered
Interests. Because the Fund's current fiscal year will end on March 31,
2007, the Fund expects that the audit will be completed by the end of
May 2007.
o A Partner may tender its entire Interest or a portion of its Interest.
See Section 4.
o If you tender your Interest and we purchase that Interest, we will
issue you a non-interest bearing, non-transferable promissory note (the
"Note") entitling you to an amount equal to the net asset value of the
Interest tendered (valued in accordance with the Partnership Agreement)
determined as of September 30, 2006 (or if the Offer is extended, the
net asset value determined on the Repurchase Date).
o The Note will entitle you to an initial payment in cash (valued
according to the Partnership Agreement) equal to at least 90% (100% in
the case of a Partner tendering less than its entire Interest) of the
unaudited net asset value of the Interest (the "Initial Payment"). The
Fund may take up to 90 days after the Repurchase Date to make the
Initial Payment.
o In the case of a Partner tendering its entire Interest, the Note will
also entitle the Partner to receive a contingent payment (the
"Post-Audit Payment") equal to the excess, if any, of (1) the net asset
value of the Interest tendered and purchased as of the Repurchase Date
(as it may be adjusted based upon the next annual audit of the Fund's
financial statements), OVER (2) the Initial Payment. The Post-Audit
Payment will be payable promptly after the completion of the Fund's
next annual audit. The Note will be held by PFPC Inc. (referred to
herein as "PFPC" or the "Administrator") on your behalf. Upon a written
request by you to PFPC, PFPC will mail the Note to you at the address
for you as maintained in the books and records of the Fund. See Section
7.
o If we accept the tender of your Interest, we will pay you the proceeds
from one or more of the following sources: cash on hand, proceeds from
the sale of securities held by the Fund, withdrawal proceeds from
investment funds in which the Fund invests, or borrowings. The purchase
amount will be paid entirely in cash. See Section 7.
o If you desire to tender an Interest for purchase, you must do so by
12:00 midnight, Eastern Standard Time, on July 25, 2006 (or if the
Offer is extended, by any later Notice Due Date), at which time the
Offer is scheduled to expire. Until that time, you have the right to
change your mind and withdraw any tenders of your Interest. Interests
withdrawn may be re-tendered, however, provided that such tenders are
made before the Notice Due Date by following the tender procedures
described herein. If the Fund has not yet accepted your tender of an
Interest on or prior to August 21, 2006 (I.E., the date 40 business
days from the commencement of the Offer), you will also have the right
to withdraw the tender of your Interest after such date. See Section 6.
o If you would like us to purchase your Interest, you should complete,
sign and either (i) mail (via certified mail, return receipt requested)
or otherwise deliver the Letter of Transmittal, enclosed with the
Offer, to Hatteras Master Fund, L.P., c/o PFPC Inc., P.O. Box 219,
Claymont, DE 19703, Attention: Tender Offer Administrator; or (ii) fax
it to PFPC at (302) 791-2790, Attention: Tender Offer Administrator, so
that it is received before 12:00 midnight, Eastern Standard Time, on
July 25, 2006. IF YOU CHOOSE TO FAX THE LETTER OF TRANSMITTAL, YOU MUST
MAIL THE ORIGINAL LETTER OF TRANSMITTAL TO PFPC PROMPTLY AFTER YOU FAX
IT (ALTHOUGH THE ORIGINAL, IF FAXED, DOES NOT HAVE TO BE RECEIVED BY
MAIL BEFORE 12:00 MIDNIGHT, EASTERN STANDARD TIME, ON JULY 25, 2006).
See Section 5. The value of your Interests may change between May 31,
2006 (the last time net asset value was calculated) and the Repurchase
Date when the value of the Interests being purchased will be
determined. See Section 3.
o As of May 31, 2006, the net asset value of the Fund was $249,225,601.
If you would like to obtain the estimated net asset value of your
Interest, which we calculate from time to time, based upon the
information we receive from the managers of the investment funds in
which we invest, you may contact the Tender Offer Administrator at PFPC
at (800) 348-1824 or at the address listed on the cover page of the
Letter of Transmittal, Monday through Friday, except holidays, during
normal business hours of 9:00 a.m. to 5:00 p.m. (Eastern Standard
Time). See Section 3.
2. BACKGROUND AND PURPOSE OF THE OFFER.
The purpose of the Offer is to provide liquidity to the Partners that
hold Interests in the Fund, as contemplated by and in accordance with the
procedures set out in the Fund's registration statement on Form N-2 (as it may
be amended, modified or otherwise supplemented from time to time, the
"Registration Statement"), and the Partnership Agreement. The Registration
Statement and the Partnership Agreement provide that the board of directors of
the Fund (the "Board of Directors") has the discretion to determine whether the
Fund will purchase Interests from time to time from Partners pursuant to written
tenders, and that one of the factors the Board of Directors will consider in
making such determination is the recommendations of the General Partner and the
Investment Manager. The Registration Statement also states that the General
Partner of the Fund and the Investment Manager expect that they will recommend
to the Board of Directors that the Fund offer to repurchase Interests from
Partners quarterly each year. The Fund commenced operations on January 3, 2005
and has made five previous offers to purchase Interests from Partners since
inception.
Because there is no secondary trading market for Interests and
transfers of Interests are prohibited without prior approval of the General
Partner, the Board of Directors has determined to cause the Fund to make the
Offer, after consideration of various matters, including but not limited to
those set out in the Registration Statement and the Partnership Agreement and
the recommendations of the General Partner and the Investment Manager. While the
General Partner and the Investment Manager intend to recommend to the Board of
Directors that the Fund offer to repurchase Interests, or portions of them, on a
quarterly basis each year, the Board of Directors is under no obligation to
follow such recommendations.
2
The purchase of Interests pursuant to the Offer will have the effect of
increasing the proportionate interest in the Fund of Partners that do not tender
Interests. Partners that retain their Interests may be subject to increased
risks due to the reduction in the Fund's aggregate assets resulting from payment
for the Interests tendered. These risks include the potential for greater
volatility due to decreased diversification. The Fund believes; however, that
this result is unlikely given the nature of the Fund's investment program. A
reduction in the aggregate assets of the Fund may result in Partners that do not
tender Interests bearing higher costs to the extent that certain expenses borne
by the Fund are relatively fixed and may not decrease if assets decline. These
effects may be reduced or eliminated to the extent that additional subscriptions
for Interests are made by new and existing Partners from time to time. Payment
for Interests purchased pursuant to the Offer may also require the Fund to
liquidate portfolio holdings earlier than the Investment Manager would otherwise
have caused these holdings to be liquidated, potentially resulting in losses or
increased investment related expenses.
Interests that are tendered to the Fund in connection with the Offer
will be retired, although the Fund may issue Interests from time to time in
transactions not involving any public offering, conducted pursuant to Rule 506
of Regulation D under the Securities Act of 1933, as amended, in accordance with
the Registration Statement. The Fund currently expects that it will accept
subscriptions for Interests as of the first day of each month, but is under no
obligation to do so, and may do so more frequently as determined by the General
Partner.
The tender of an Interest by a Partner will not affect the record
ownership of such Partner for purposes of voting or entitlement to any
distributions payable by the Fund unless and until such Interest is purchased.
You should also realize that although the Offer is scheduled to expire on July
25, 2006 (unless it is extended), you remain a Partner of the Fund with respect
to the Interest you tendered that is accepted for purchase by the Fund through
the Repurchase Date.
3. OFFER TO PURCHASE AND PRICE.
The Fund will, on the terms and subject to the conditions of the Offer,
purchase an amount of Interests up to $20,000,000 of the net assets of the Fund
that are tendered by Partners by 12:00 midnight, Eastern Standard Time, on July
25, 2006 (or if the Offer is extended, by any later Notice Due Date), and not
withdrawn (as provided in Section 6 below) prior to the Notice Due Date. The
Fund reserves the right to extend, amend or cancel the Offer as described in
Sections 4 and 8 below. The value of the Interests tendered for purchase will be
their net asset value as of September 30, 2006 or, if the Offer is extended, as
of any later Repurchase Date, payable as set out in Section 7. The determination
of the net asset value of Interests as of the Repurchase Date is subject to
adjustment based upon the results of the next annual audit of the Fund's
financial statements.
4. AMOUNT OF TENDER.
Subject to the limitations set out below, a Partner may tender its
entire Interest or a portion of its Interest. The Offer is being made to all
Partners of the Fund and is not conditioned on any minimum amount of Interests
being tendered.
If the amount of Interests that are properly tendered pursuant to the
Offer and not withdrawn pursuant to Section 6 below is less than or equal to
$20,000,000 of the net assets of the Fund (or such greater amount as the Fund
may elect to purchase pursuant to the Offer), the Fund will, on the terms and
subject to the conditions of the Offer, purchase all of the Interests so
tendered unless the Fund elects to cancel or amend the Offer, or postpone
acceptance of tenders made pursuant to the Offer, as provided in Section 8
below. If Interests in excess of $20,000,000 of the net assets of the Fund are
duly tendered to the Fund prior to the Notice Due Date and not withdrawn prior
to the Notice Due Date pursuant to Section 6 below, the Fund will in its sole
discretion either (a) accept the additional Interests permitted to be accepted
pursuant to Rule 13e-4(f)(3) under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"); (b) extend the Offer, if necessary, and increase
the amount of Interests that the Fund is offering to purchase to an amount it
believes sufficient to accommodate the excess Interests tendered as well as any
Interests tendered during the extended Offer; or (c) accept Interests tendered
prior to the Notice Due Date and not withdrawn prior to the Notice Due Date for
payment on a pro rata basis based on the aggregate net asset value of tendered
Interests. The Offer may be extended, amended or canceled in other circumstances
described in Section 8 below.
3
5. PROCEDURE FOR TENDERS.
Partners wishing to tender Interests pursuant to this Offer to Purchase
should send or deliver by July 25, 2006 (or if the Offer is extended, by any
later Notice Due Date) a completed and executed Letter of Transmittal to PFPC,
to the attention of the Tender Offer Administrator, at the address set out on
the first page of the Letter of Transmittal, or fax a completed and executed
Letter of Transmittal to PFPC, also to the attention of the Tender Offer
Administrator, at the fax number set out on the first page of the Letter of
Transmittal. The completed and executed Letter of Transmittal must be received
by PFPC, either by mail or by fax, no later than 12:00 midnight, Eastern
Standard Time, on July 25, 2006 (or if the Offer is extended, no later than any
later Notice Due Date).
The Fund recommends that all documents be submitted to PFPC via
certified mail, return receipt requested, or by facsimile transmission. A
Partner choosing to fax a Letter of Transmittal to PFPC must also send or
deliver the original completed and executed Letter of Transmittal to PFPC
promptly thereafter. Partners wishing to confirm receipt of a Letter of
Transmittal may contact PFPC at the address or telephone number set out on the
first page of the Letter of Transmittal. The method of delivery of any documents
is at the election and complete risk of the Partner tendering an Interest,
including, but not limited to, the failure of PFPC to receive any Letter of
Transmittal or other document submitted by facsimile transmission. All questions
as to the validity, form, eligibility (including time of receipt) and acceptance
of tenders will be determined by the Fund, in its sole discretion, and such
determination will be final and binding. The Fund reserves the absolute right to
reject any or all tenders determined by it not to be in appropriate form or the
acceptance of or payment for which would, in the opinion of counsel for the
Fund, be unlawful. The Fund also reserves the absolute right to waive any of the
conditions of the Offer or any defect in any tender with respect to any
particular Interest or any particular Partner, and the Fund's interpretation of
the terms and conditions of the Offer will be final and binding. Unless waived,
any defects or irregularities in connection with tenders must be cured within
such time as the Fund will determine. Tenders will not be deemed to have been
made until the defects or irregularities have been cured or waived. None of the
Fund, the General Partner, the Investment Manager or the Board of Directors will
be obligated to give notice of any defects or irregularities in tenders, nor
will any of them incur any liability for failure to give such notice.
6. WITHDRAWAL RIGHTS.
Until the Notice Due Date, Partners have the right to change their
minds and withdraw any tenders of their Interests. Interests withdrawn may be
re-tendered, however, provided that such tenders are made before the Notice Date
by following the tender procedures described in Section 5. Pursuant to Rule
13e-4(f)(2)(ii) of the Exchange Act, if the Fund has not yet accepted a
Partner's tender of an Interest on or prior to August 21, 2006 (I.E., the date
40 business days from the commencement of the Offer), a Partner will also have
the right to withdraw its tender of its Interest after such date. To be
effective, any notice of withdrawal must be timely received by PFPC at the
address or fax number set out on the first page of the Letter of Transmittal.
All questions as to the form and validity (including time of receipt) of notices
of withdrawal will be determined by the Fund, in its sole discretion, and such
determination will be final and binding. A tender of Interests properly
withdrawn will not thereafter be deemed to be tendered for purposes of the
Offer.
4
7. PURCHASES AND PAYMENT.
For purposes of the Offer, the Fund will be deemed to have accepted
Interests that are tendered if and when it gives written notice to the tendering
Partner of its election to purchase such Interest. As stated in Section 3 above,
the amount offered for the Interests tendered by Partners will be the net asset
value thereof as of September 30, 2006, or if the Offer is extended, as of any
later Repurchase Date. The net asset value will be determined after all
allocations to capital accounts of the Partners required to be made by the
Partnership Agreement have been made, including any Repurchase Fee due to the
Fund in connection with the repurchase and any incentive allocation. The Fund
will not pay interest on the purchase amount.
For Partners that tender Interests that are accepted for purchase,
payment of the purchase amount will consist of the Note, a non-interest-bearing
non-transferable promissory note. The Note will entitle the Partner to receive
the Initial Payment in an amount equal to at least 90% (100% in the case of a
Partner tendering less than its entire Interest) of the unaudited net asset
value of the Interest tendered and accepted for purchase by the Fund, determined
as of the Repurchase Date. The Fund may take up to 90 days after the Repurchase
Date to make the Initial Payment. In the case of a Partner tendering all of its
Interests, the Note will also entitle the Partner to receive a contingent
payment (the "Post-Audit Payment") equal to the excess, if any, of (1) the net
asset value of the Interest tendered and purchased as of the Repurchase Date (as
it may be adjusted based upon the next annual audit of the Fund's financial
statements), OVER (2) the Initial Payment. The Post-Audit Payment will be
payable promptly after the completion of the Fund's next annual audit. It is
anticipated that the annual audit of the Fund's financial statements will be
completed no later than 60 days after the fiscal year-end of the Fund.
The Note pursuant to which a tendering Partner will receive the Initial
Payment and, if applicable, Post-Audit Payment (together, the "Cash Payment")
will be held by PFPC on behalf of the tendering Partner. Upon a written request
by a Partner to PFPC, PFPC will mail the Note to the Partner at the address of
the Partner as maintained in the books and records of the Fund. Any Cash Payment
due pursuant to the Note will be made by wire transfer directly to the tendering
Partner to an account designated by the Partner in the Letter of Transmittal.
The Fund will make payment for Interests it purchases pursuant to the
Offer from one or more of the following sources: cash on hand, proceeds from the
sale of securities held by the Fund, withdrawal proceeds from investment funds
in which the Fund invests, or borrowings. Upon its acceptance of tendered
Interests for repurchase, the Fund will maintain daily, as an entry on its
books, a distinct account consisting of (1) cash, (2) liquid securities, or (3)
interests in specific investment funds in which the Fund invests (or any
combination of them), in an amount equal to the aggregate estimated unpaid
dollar amount of any Note, as described above. None of the Fund, the Board of
Directors, the General Partner, or the Investment Manager have determined at
this time to borrow funds to purchase Interests tendered in connection with the
Offer. However, depending on the dollar amount of Interests tendered and
prevailing general economic and market conditions, the Fund, in its sole
discretion, may decide to fund any portion of the amount offered for the
purchase of Interests, subject to compliance with applicable law, through
borrowings. The Fund expects that the repayment of any amounts so borrowed will
be financed from additional funds contributed to the Fund by existing and/or new
Partners, withdrawal of capital from the investment funds in which it invests or
from the proceeds of the sale of securities held by the Fund.
The purchase amount will be paid entirely in cash.
8. CERTAIN CONDITIONS OF THE OFFER.
In the absolute discretion of the Board of Directors, the Fund reserves
the right, at any time and from time to time, to extend the period of time
during which the Offer is pending by notifying Partners of such extension. In
the event that the Fund elects to extend the tender period, the net asset value
of the Interests tendered for purchase will be determined as of the later
Repurchase Date. During any such extension, all Interests previously tendered
and not withdrawn will remain subject to the Offer. The Fund also reserves the
right at any time and from time to time up to and including acceptance of
tenders pursuant to the Offer: (a) to cancel the Offer in the circumstances set
out in the following paragraph and in the event of such cancellation not to
purchase or pay for any Interests tendered pursuant to the Offer; (b) to amend
the Offer; and (c) to postpone the acceptance of Interests. If the Fund
determines to amend the Offer or to postpone the acceptance of Interests
tendered, it will, to the extent necessary, extend the period of time during
which the Offer is open as provided above and will promptly notify Partners.
5
The Fund may cancel the Offer, amend the Offer or postpone the
acceptance of tenders made pursuant to the Offer if: (a) the Fund would not be
able to liquidate portfolio securities in a manner that is orderly and
consistent with the Fund's investment objectives and policies in order to
purchase Interests tendered pursuant to the Offer; (b) there is, in the judgment
of the Board of Directors, any (i) legal action or proceeding instituted or
threatened challenging the Offer or otherwise materially adversely affecting the
Fund, (ii) declaration of a banking moratorium by federal or state authorities
or any suspension of payment by banks in the United States or New York State
that is material to the Fund, (iii) limitation imposed by federal or state
authorities on the extension of credit by lending institutions, (iv) suspension
of trading on any organized exchange or over-the-counter market where the Fund
has a material investment, (v) commencement of war, armed hostilities or other
international or national calamity directly or indirectly involving the United
States that is material to the Fund, (vi) material decrease in the net asset
value of the Fund from the net asset value of the Fund as of the commencement of
the Offer, or (vii) other event or condition that would have a material adverse
effect on the Fund or its Partners if Interests tendered pursuant to the Offer
were purchased; (c) the Board of Directors determines that it is not in the best
interest of the Fund to purchase Interests pursuant to the Offer; or (d) for any
other periods that the Securities and Exchange Commission (the "SEC") permits by
order for the protection of Partners.
9. CERTAIN INFORMATION ABOUT THE FUND.
The Fund is registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), as a closed-end, non-diversified, management
investment company. It is organized as a Delaware limited partnership.
Subscriptions for Interests of the Fund were first accepted for investment as of
January 3, 2005. The principal office of the Fund is located at 8816 Six Forks
Road, Suite 107, Raleigh, North Carolina 27615 and the telephone number is (919)
846-2324. Interests are not traded on any established trading market and are
subject to strict restrictions on transferability pursuant to the Partnership
Agreement.
None of the Fund, the General Partner, the Investment Manager or the
Board of Directors has any plans or proposals that relate to or would result in:
(1) an extraordinary transaction, such as a merger, reorganization or
liquidation, involving the Fund; (2) any purchase, sale or transfer of a
material amount of assets of the Fund; (3) any material change in the present
distribution policy or indebtedness or capitalization of the Fund; (4) any
change in the present Board of Directors or in the management of the Fund
including, but not limited to, any plans or proposals to change the number or
the term of members of the Board of Directors, or to fill any existing vacancy
on the Board of Directors or to change any material term of the employment
contract of any executive officer; (5) any other material change in the Fund's
corporate structure or business, including any plans or proposals to make any
changes in its investment policies, for which a vote would be required by
Section 13 of the 1940 Act; (6) the acquisition by any person of additional
Interests (other than the Fund's intention to accept subscriptions for Interests
on the first day of each month and from time to time in the discretion of the
General Partner), or the disposition of Interests (other than through periodic
purchase offers, including the Offer); or (7) any changes in the Partnership
Agreement or other governing instruments or other actions that could impede the
acquisition of control of the Fund.
6
Other than the acceptance of subscriptions as of May 1, 2006 and June
1, 2006, there have been no transactions involving Interests that were effected
during the past 60 days by the Fund, the General Partner, the Investment
Manager, any member of the Board of Directors or any person controlling the
Fund, the General Partner or the Investment Manager.
10. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
The following discussion is a general summary of the federal income tax
consequences of the purchase of Interests by the Fund for cash pursuant to the
Offer. Partners should consult their own tax advisors for a complete description
of the tax consequences to them of a purchase of their Interests by the Fund
pursuant to the Offer.
A Partner who sells all or part of the Partner's Interest to the Fund
will generally recognize income or gain only to the extent the amount of cash
received by the Partner exceeds the Partner's adjusted tax basis in the
Partner's entire Interest at that time. The Partner's adjusted tax basis in the
Partner's Interest will be reduced by the amount of any cash received by the
Partner from the Fund, and any excess of that cash over that basis will
generally constitute capital gain for the Partner. It is possible, however, that
Partners might recognize some ordinary income by reason of the sale, under
certain technical rules that apply to the extent a partner disposes of the
partner's share of "unrealized receivables" of a partnership (as defined in
Internal Revenue Code section 751). No loss will be recognized by a Partner on
such a sale to the Fund, except that a Partner who sells the Partner's entire
Interest to the Fund may recognize a capital loss at the time of the
determination of the Post-Audit Payment to the extent the aggregate cash
received, and to be received, by the Partner is less than the Partner's adjusted
tax basis in the Interest.
11. MISCELLANEOUS.
The Offer is not being made to, nor will tenders be accepted from,
Partners in any jurisdiction in which the Offer or its acceptance would not
comply with the securities or other laws of such jurisdiction. The Fund is not
aware of any jurisdiction in which the Offer or tenders pursuant thereto would
not be in compliance with the laws of such jurisdiction. However, the Fund
reserves the right to exclude Partners from the Offer in any jurisdiction in
which it is asserted that the Offer cannot lawfully be made. The Fund believes
such exclusion is permissible under applicable laws and regulations, provided
the Fund makes a good faith effort to comply with any state law deemed
applicable to the Offer.
The Fund has filed an Issuer Tender Offer Statement on Schedule TO with
the SEC, which includes certain information relating to the Offer. A free copy
of such statement may be obtained by contacting PFPC at the address and
telephone number set out on the first page of the Letter of Transmittal or from
the SEC's internet web site, http://www.sec.gov. A copy may be inspected and
copied at, and, for a fee, may be obtained by mail from, the public reference
office of the SEC at 450 Fifth Street, N.W., Washington, DC 20549.
7
EXHIBIT C
LETTER OF TRANSMITTAL
Regarding Interests in
HATTERAS MASTER FUND, L.P.
Tendered Pursuant to the Offer to Purchase
Dated June 23, 2006
THIS LETTER OF TRANSMITTAL MUST BE
RECEIVED BY PFPC INC.
BY JULY 25, 2006.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE
AT 12:00 MIDNIGHT, EASTERN STANDARD TIME, ON JULY 25, 2006,
UNLESS THE OFFER IS EXTENDED.
Complete This Letter Of Transmittal And Return To:
Hatteras Master Fund, L.P.
c/o PFPC Inc.
P.O. Box 219
Claymont, DE 19703
Attention: Tender Offer Administrator
Phone: (800) 348-1824
Fax: (302) 791-2790
Ladies and Gentlemen:
The undersigned hereby tenders to Hatteras Master Fund, L.P., a
closed-end, non-diversified, management investment company organized as a
limited partnership under the laws of the State of Delaware (the "Fund"), the
limited partnership interest in the Fund or portion thereof (the "Interest")
held by the undersigned, described and specified below, on the terms and
conditions set out in the Offer to Purchase, dated June 23, 2006 (the "Offer"),
receipt of which is hereby acknowledged, and in this Letter of Transmittal. THE
OFFER AND THIS LETTER OF TRANSMITTAL ARE SUBJECT TO ALL THE TERMS AND CONDITIONS
SET OUT IN THE OFFER, INCLUDING, BUT NOT LIMITED TO, THE ABSOLUTE RIGHT OF THE
FUND TO REJECT ANY AND ALL TENDERS DETERMINED BY IT, IN ITS SOLE DISCRETION, NOT
TO BE IN THE APPROPRIATE FORM.
The undersigned hereby sells to the Fund the Interest tendered pursuant
to this Letter of Transmittal. The undersigned warrants that it has full
authority to sell the Interest tendered hereby and that the Fund will acquire
good title to the Interest, free and clear of all liens, charges, encumbrances,
conditional sales agreements or other obligations relating to this sale, and not
subject to any adverse claim, when and to the extent the Interest is purchased
by the Fund. Upon request, the undersigned will execute and deliver any
additional documents necessary to complete the sale in accordance with the terms
of the Offer.
The undersigned recognizes that under certain circumstances set out in
the Offer, the Fund may not be required to purchase the Interest tendered
hereby.
A promissory note (the "Note") for the value of the purchased Interest
will be held by PFPC Inc. ("PFPC") on behalf of the undersigned. Upon written
request by the undersigned to PFPC, PFPC will mail the Note to the undersigned
at the address of the undersigned as maintained in the books and records of the
Fund. The initial payment of the purchase amount for the Interest tendered by
the undersigned will be made by wire transfer of the funds to an account
designated by the undersigned in this Letter of Transmittal.
The Note will also reflect the "Post-Audit Payment" portion of the
purchase amount, if any, as described in Section 7 of the Offer. Any Post-Audit
Payment of cash due pursuant to the Note will also be made by wire transfer of
the funds to the undersigned's account as provided herein. The undersigned
recognizes that the amount of the initial payment of the purchase amount for
Interests will be based on the unaudited net asset value of the Fund as of
September 30, 2006, subject to an extension of the Offer as described in Section
8 of the Offer. The Post-Audit Payment will be payable promptly after the
completion of the Fund's next annual audit. It is anticipated that the annual
audit of the Fund's financial statements will be completed no later than 60 days
after the fiscal year-end of the Fund.
All authority conferred or agreed to be conferred in this Letter of
Transmittal will survive the death or incapacity of the undersigned and the
obligation of the undersigned hereunder will be binding on the heirs, personal
representatives, successors and assigns of the undersigned. Except as stated in
Section 6 of the Offer, this tender is irrevocable.
PLEASE FAX OR MAIL (VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED) TO:
HATTERAS MASTER FUND, L.P., C/O PFPC INC., P.O. BOX 219, CLAYMONT, DE 19703,
ATTENTION: TENDER OFFER ADMINISTRATOR. FOR ADDITIONAL INFORMATION: PHONE: (800)
348-1824 OR FAX: (302) 791-2790.
2
PART 1. NAME:
Name of Partner: ___________________________________
Telephone Number: __________________________________
PART 2. AMOUNT OF LIMITED PARTNERSHIP INTEREST
BEING TENDERED:
[ ] A portion of the undersigned's limited partnership
interest expressed as a specific dollar value.
$
-----------------------
[ ] The undersigned's entire limited partnership interest.
PART 3. PAYMENT:
CASH PAYMENT
Cash payments will be wire transferred to the account you specify
below:
---------------------------------
Name of Bank
---------------------------------
Address of Bank
---------------------------------
ABA Number
---------------------------------
Account Number
---------------------------------
Name Under Which Account Is Held
PROMISSORY NOTE
The Note reflecting both the initial payment and the Post-Audit Payment
portion of the purchase amount, as applicable, will be held by PFPC
Inc. on the undersigned's behalf. Upon a written request by the
undersigned to PFPC, PFPC will mail the Note to the undersigned at the
address of the undersigned as maintained in the books and records of
the Fund.
3
PART 4. SIGNATURE(S):
FOR INDIVIDUAL INVESTORS FOR OTHER INVESTORS:
AND JOINT TENANTS:
- --------------------------------------------------- -------------------------------------------------
Signature Print Name of Investor
(SIGNATURE OF OWNER(S) EXACTLY AS APPEARED ON
SUBSCRIPTION AGREEMENT)
- --------------------------------------------------- -------------------------------------------------
Print Name of Investor Signature
(SIGNATURE OF OWNER(S) EXACTLY AS APPEARED ON
SUBSCRIPTION AGREEMENT)
- --------------------------------------------------- -------------------------------------------------
Joint Tenant Signature if necessary (SIGNATURE OF Print Name of Signatory and Title
OWNER(S) EXACTLY AS APPEARED ON SUBSCRIPTION
AGREEMENT)
- --------------------------------------------------- -------------------------------------------------
Print Name of Joint Tenant Co-signatory if necessary (SIGNATURE OF
OWNER(S) EXACTLY AS APPEARED ON SUBSCRIPTION
AGREEMENT)
-------------------------------------------------
Print Name and Title of Co-signatory
Date: ______________
4
EXHIBIT D
NOTICE OF WITHDRAWAL OF TENDER
Regarding Interests in
HATTERAS MASTER FUND, L.P.
Tendered Pursuant to the Offer to Purchase
Dated June 23, 2006
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE
AT, AND THIS NOTICE OF WITHDRAWAL MUST BE
RECEIVED BY PFPC INC. BY,
12:00 MIDNIGHT, EASTERN STANDARD TIME, ON JULY 25, 2006,
UNLESS THE OFFER IS EXTENDED.
Complete This Notice of Withdrawal And Return To:
Hatteras Master Fund, L.P.,
c/o PFPC Inc.
P.O. Box 219
Claymont, DE 19703
Attention: Tender Offer Administrator
Phone: (800) 348-1824
Fax: (302) 791-2790
Ladies and Gentlemen:
The undersigned wishes to withdraw the tender of its limited
partnership interest in Hatteras Master Fund, L.P. (the "Fund"), or the tender
of a portion of such interest, for purchase by the Fund that previously was
submitted by the undersigned in a Letter of Transmittal dated ____________.
Such tender was in the amount of:
[ ] The undersigned's entire limited partnership interest.
[ ] A portion of the undersigned's limited partnership interest
expressed as a specific dollar value.
$
-----------------------
The undersigned recognizes that upon the submission on a timely basis
of this Notice of Withdrawal of Tender, properly executed, the interest in the
Fund (or portion of such interest) previously tendered will not be purchased by
the Fund upon expiration of the tender offer described above.
SIGNATURE(S):
FOR INDIVIDUAL INVESTORS FOR OTHER INVESTORS:
AND JOINT TENANTS:
- ----------------------------------------------------- ---------------------------------------------------------
Signature Print Name of Investor
(SIGNATURE OF OWNER(S) EXACTLY AS APPEARED ON
SUBSCRIPTION AGREEMENT)
- ----------------------------------------------------- ---------------------------------------------------------
Print Name of Investor Signature
(SIGNATURE OF OWNER(S) EXACTLY AS APPEARED ON
SUBSCRIPTION AGREEMENT)
- ----------------------------------------------------- ---------------------------------------------------------
Joint Tenant Signature if necessary (SIGNATURE OF Print Name of Signatory and Title
OWNER(S) EXACTLY AS APPEARED ON SUBSCRIPTION
AGREEMENT)
- ----------------------------------------------------- ---------------------------------------------------------
Print Name of Joint Tenant Co-signatory if necessary (SIGNATURE OF OWNER(S)
EXACTLY AS APPEARED ON SUBSCRIPTION AGREEMENT)
---------------------------------------------------------
Print Name and Title of Co-signatory
Date: ______________
EXHIBIT E
FORMS OF LETTERS FROM THE FUND TO PARTNERS IN
CONNECTION WITH ACCEPTANCE OF OFFERS OF TENDER
[______ __, 200_]
Dear Partner:
Hatteras Master Fund, L.P. (the "Fund") has received and accepted for
purchase your tender of all or a part of your limited partnership interest in
the Fund (your "Interest").
Because you have tendered and the Fund has purchased all or a part of
your Interest, you have been issued a note (the "Note") entitling you to receive
an initial payment in an amount equal to at least 90% (100% if you tendered less
than your entire Interest) of the value of the purchased Interest based on the
unaudited net asset value of the Fund as of September 30, 2006, in accordance
with the terms of the tender offer. A cash payment in this amount will be wire
transferred to the account designated by you in your Letter of Transmittal no
later than October 31, 2006, unless the repurchase date of the interests in the
Fund has changed, or the Fund has requested a withdrawal of its capital from the
investment funds in which it invests. The Note will be held by PFPC Inc. on your
behalf. Upon a written request by you to PFPC, PFPC will mail the Note to you at
the address for you as maintained in the books and records of the Fund.
If you tendered your entire Interest, the terms of the Note provide
that a post-audit payment representing the balance of the purchase amount, if
any, will be paid to you promptly after the completion of the Fund's next annual
audit according to the terms of the tender offer. We expect that the annual
audit of the Fund's financial statements will be completed by the end of May
2007.
If you are tendering only a portion of your Interest, you remain a
Partner of the Fund with respect to the portion of your Interest that you did
not tender.
Should you have any questions, please feel free to contact the Tender
Offer Administrator at PFPC Inc. at (800) 348-1824.
Sincerely,
Hatteras Master Fund, L.P.
[______ __, 200_]
Dear Partner:
Enclosed is a statement showing the breakdown of your capital
withdrawal resulting from our purchase of your interest in Hatteras Master Fund,
L.P. (the "Fund").
Because you have tendered and the Fund has purchased all or a part of
your interest in the Fund, you have been paid an amount equal to at least 90%
(100% if you tendered less than your entire Interest) of the value of the
purchased interest in the Fund based on the unaudited net asset value of the
Fund as of September 30, 2006, in accordance with the terms of the tender offer.
A cash payment in this amount has been wire transferred to the account
designated by you in your Letter of Transmittal.
The balance of the purchase amount, if any, will be paid to you
promptly after the completion of the Fund's next annual audit according to the
terms of the tender offer. We expect that the annual audit of the Fund's
financial statements will be completed by the end of May 2007.
Should you have any questions, please feel free to contact the Tender
Offer Administrator at PFPC Inc. at (800) 348-1824.
Sincerely,
Hatteras Master Fund, L.P.
Enclosure
2