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
8540 Colonnade Center Drive
Suite 401
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
March 26, 2007
(Date Tender Offer First Published,
Sent or Given to Security Holders)
CALCULATION OF FILING FEE
Transaction Valuation: $25,000,000 (a) Amount of Filing Fee: $767.50 (b)
(a) Calculated as the aggregate maximum value of Interests being purchased.
(b) Calculated at $30.70 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: ____________________________________
Form or Registration No.: __________________________________
Filing Party: ______________________________________________
Date Filed: ________________________________________________
[ ] 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.
- - 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 $25,000,000
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 April 30, 2007 (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 June
30, 2007, or at a later date determined by the Fund if the Offer is
extended (in each case, the "Repurchase Date").
- - 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, 2008, the Fund expects that
the audit will be completed by the end of May 2008.
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- - 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).
- - 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.
- - 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.
- - 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 UMB Fund Services, Inc. (referred to
herein as "UMBFS" or the "Administrator") on the Partner's behalf. Upon a
written request by a Partner to UMBFS, UMBFS 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).
- - 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).
- - 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).
- - Partners that desire to tender an Interest for purchase must do so by 12:00
midnight, Eastern Standard Time, on Monday, April 30, 2007 (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 May 22, 2007 (i.e., the date 40 business days from the
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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).
- - 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 UMB Fund Services, Inc. at
P.O. Box 2175, Milwaukee, Wisconsin 53201-2175, Attention: Tender Offer
Administrator; or (ii) fax it to UMBFS at (414) 270-1068, Attention: Tender
Offer Administrator, so that it is received before 12:00 midnight, Eastern
Standard Time, on April 30, 2007. IF THE PARTNER CHOOSES TO FAX THE LETTER
OF TRANSMITTAL, IT MUST MAIL THE ORIGINAL LETTER OF TRANSMITTAL TO UMBFS
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
APRIL 30, 2007). See Item 4(a)(1)(vii). The value of the Interests may
change between February 28, 2007 (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 UMBFS at
(800) 504-9070 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 April 30, 2007, 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 8540 Colonnade Center Drive, Suite 401, 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 February 28, 2007, the net asset value of the Fund was
$408,929,129. Subject to the conditions set out in the Offer, the Fund will
purchase Interests in an amount up to $25,000,000 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 8540 Colonnade Center Drive, Suite 401, Raleigh, North Carolina, 27615 and
the telephone number is (919) 846-2324. The General
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Partner of the Fund is Hatteras Investment Management LLC (the "General
Partner"). The principal executive office of the General Partner is located at
8540 Colonnade Center Drive, Suite 401, 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 8540 Colonnade Center Drive, Suite 401, Raleigh, North Carolina,
27615. The directors on the Fund's board of directors (the "Board of Directors")
are David B. Perkins, H. Alexander Holmes, Art Lottes, Steve E. Moss and Gregory
S. Sellers. Their address is c/o Hatteras Master Fund, L.P. at 8540 Colonnade
Center Drive, Suite 401, Raleigh, North Carolina 27615.
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 $25,000,000 of the net assets of the
Fund that are tendered by Partners by 12:00 midnight, Eastern Standard Time, on
April 30, 2007 (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 June 30, 2007, 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 April 30, 2007. 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
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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 March 26,
2007, 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.
(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, April 30, 2007 (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 May 22, 2007 (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 UMBFS
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 UMBFS, 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 UMBFS, either by mail or by fax, no later than 12:00 midnight, Eastern
Standard Time, on April 30, 2007 (or if the Offer is extended, by any later
Notice Due Date). The Fund recommends that all documents be submitted to UMBFS
by certified mail, return receipt requested, or by facsimile transmission. A
Partner choosing to fax a Letter of Transmittal to UMBFS must also send or
deliver the original completed and executed Letter of Transmittal to UMBFS
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 UMBFS 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 $25,000,000 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
6
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.
(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 September 20, 2006 (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 seven 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 Section 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 $25,000,000 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.
8
(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 January 1, 2007
and February 1, 2007, 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, 2006, which were
filed with the Securities and Exchange Commission on Form N-CSR on December 6,
2006. 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
March 26, 2007
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.
March 26, 2007
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 JUNE 30, 2007, PLEASE DISREGARD
THIS NOTICE AND TAKE NO ACTION.
The tender offer period will begin on March 26, 2007 and will end at 12:00
midnight, Eastern Standard Time, on APRIL 30, 2007, 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 UMB Fund Services,
Inc. ("UMBFS") no later than APRIL 30, 2007. 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 UMB Fund
Services, Inc. at P.O. Box 2175, Milwaukee, Wisconsin 53201-2175, Attention:
Tender Offer Administrator; or (ii) fax it to UMBFS at (414) 270-1068,
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 APRIL 30, 2007.
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 UMBFS at (800) 504-9070.
Sincerely,
Hatteras Master Fund, L.P.
EXHIBIT B
OFFER TO PURCHASE
HATTERAS MASTER FUND, L.P.
8540 Colonnade Center Drive
Suite 401
Raleigh, North Carolina 27615
OFFER TO PURCHASE INTERESTS
DATED MARCH 26, 2007
LETTERS OF TRANSMITTAL MUST BE
RECEIVED BY UMB FUND SERVICES, INC.
BY APRIL 30, 2007.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, EASTERN STANDARD TIME, ON APRIL 30, 2007,
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 $25,000,000 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 June 30, 2007 (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 April 30, 2007 (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 February 28, 2007 (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 UMB Fund
Services, Inc., the Fund's Administrator, at (800) 504-9070 or at Hatteras
Master Fund, L.P., c/o UMB Fund Services, Inc. at P.O. Box 2175, Milwaukee,
Wisconsin 53201-2175, 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 UMB Fund Services, 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 UMB Fund Services, Inc.
P.O. Box 2175
Milwaukee, WI 53201-2175
Attention: Tender Offer Administrator
Phone: (800) 504-9070
Fax: (414) 270-1068
(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.
- - The Fund (referred to as "we" or the "Fund" in this Summary Term Sheet) is
offering to purchase Interests in an amount up to $25,000,000 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 June 30, 2007 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 April 30, 2007 (or if the Offer
is extended, until any later Notice Due Date), at which time the Offer is
scheduled to expire.
- - 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, 2008, 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, 2008, the Fund expects that the
audit will be completed by the end of May 2008.
- - A Partner may tender its entire Interest or a portion of its Interest. See
Section 4.
- - 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 June 30, 2007 (or if the Offer is extended, the net asset value
determined on the Repurchase Date).
- - 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.
- - 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 UMB Fund Services, Inc. (referred to herein as "UMBFS"
or the "Administrator") on your behalf. Upon a written request by you to
UMBFS, UMBFS will mail the Note to you at the address for you as maintained
in the books and records of the Fund. See Section 7.
- - 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.
- - If you desire to tender an Interest for purchase, you must do so by 12:00
midnight, Eastern Standard Time, on April 30, 2007 (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 May 22, 2007
(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.
- - 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 UMB Fund Services, Inc. at P.O. Box 2175,
Milwaukee, Wisconsin 53201-2175, Attention: Tender Offer Administrator; or
(ii) fax it to UMBFS at (414) 270-1068, Attention: Tender Offer
Administrator, so that it is received before 12:00 midnight, Eastern
Standard Time, on April 30, 2007. IF YOU CHOOSE TO FAX THE LETTER OF
TRANSMITTAL, YOU MUST MAIL THE ORIGINAL LETTER OF TRANSMITTAL TO UMBFS
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
APRIL 30, 2007). See Section 5. The value of your Interests may change
between February 28, 2007 (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.
- - As of February 28, 2007, the net asset value of the Fund was $408,929,129.
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 UMBFS at (800) 504-9070 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 April 30, 2007 (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 $25,000,000 of the net assets of the Fund
that are tendered by Partners by 12:00 midnight, Eastern Standard Time, on April
30, 2007 (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 June 30, 2007 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
$25,000,000 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 $25,000,000 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
3
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.
5. PROCEDURE FOR TENDERS.
Partners wishing to tender Interests pursuant to this Offer to Purchase
should send or deliver by April 30, 2007 (or if the Offer is extended, by any
later Notice Due Date) a completed and executed Letter of Transmittal to UMBFS,
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 UMBFS, 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 UMBFS, either by mail or by fax, no later than 12:00 midnight, Eastern
Standard Time, on April 30, 2007 (or if the Offer is extended, no later than any
later Notice Due Date).
The Fund recommends that all documents be submitted to UMBFS via certified
mail, return receipt requested, or by facsimile transmission. A Partner choosing
to fax a Letter of Transmittal to UMBFS must also send or deliver the original
completed and executed Letter of Transmittal to UMBFS promptly thereafter.
Partners wishing to confirm receipt of a Letter of Transmittal may contact UMBFS
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 UMBFS 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 May 22, 2007 (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 UMBFS 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 June 30, 2007, 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 UMBFS on behalf of the tendering Partner. Upon a written request
by a Partner to UMBFS, UMBFS 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
5
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.
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 8540 Colonnade Center Drive,
Suite 401, 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 January 1, 2007 and
February 1, 2007, 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 UMBFS 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 March 26, 2007
THIS LETTER OF TRANSMITTAL MUST BE
RECEIVED BY UMB FUND SERVICES, INC.
BY APRIL 30, 2007.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE
AT 12:00 MIDNIGHT, EASTERN STANDARD TIME, ON APRIL 30, 2007,
UNLESS THE OFFER IS EXTENDED.
Complete This Letter Of Transmittal And Return To:
Hatteras Master Fund, L.P.
c/o UMB Fund Services, Inc.
P.O. Box 2175
Milwaukee, WI 53201-2175
Attention: Tender Offer Administrator
Phone: (800) 504-9070
Fax: (414) 270-1068
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 March 26, 2007 (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 UMB Fund Services, Inc. ("UMBFS") on behalf of the undersigned. Upon
written request by the undersigned to UMBFS, UMBFS 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 June 30, 2007, 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 UMB FUND SERVICES, INC., P.O. BOX 2175,
MILWAUKEE, WI 53201-2175, ATTENTION: TENDER OFFER ADMINISTRATOR. FOR ADDITIONAL
INFORMATION: PHONE: (800) 504-9070 OR FAX: (414) 270-1068.
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
UMB Fund Services, Inc. on the undersigned's behalf. Upon a written
request by the undersigned to UMBFS, UMBFS 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 Print Name of Signatory and Title
(SIGNATURE OF 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
ONLY COMPLETE THIS FORM IF YOU WISH TO CANCEL YOUR TENDER
NOTICE OF WITHDRAWAL OF TENDER
Regarding Interests in
HATTERAS MASTER FUND, L.P.
Tendered Pursuant to the Offer to Purchase
Dated March 26, 2007
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE
AT, AND THIS NOTICE OF WITHDRAWAL MUST BE
RECEIVED BY UMB FUND SERVICES, INC. BY,
12:00 MIDNIGHT, EASTERN STANDARD TIME, ON APRIL 30, 2007,
UNLESS THE OFFER IS EXTENDED.
Complete This Notice of Withdrawal And Return To:
Hatteras Master Fund, L.P.,
c/o UMB Fund Services, Inc.
P.O. Box 2175
Milwaukee, WI 53201-2175
Attention: Tender Offer Administrator
Phone: (800) 504-9070
Fax: (414) 270-1068
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 Print Name of Signatory and Title
(SIGNATURE OF 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:
---------------
2
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 June 30, 2007, 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 September 28, 2007, unless the repurchase date of the interests in
the Fund has changed. The Note will be held by UMB Fund Services, Inc. on your
behalf. Upon a written request by you to UMBFS, UMBFS 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 2008.
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 UMB Fund Services, Inc. at (800) 504-9070.
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
June 30, 2007, 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 2008.
Should you have any questions, please feel free to contact the Tender Offer
Administrator at UMB Fund Services, Inc. at (800) 504-9070.
Sincerely,
- -------------------------------------
Hatteras Master Fund, L.P.
Enclosure
2