ADMINISTRATION, FUND ACCOUNTING AND RECORDKEEPING AGREEMENT
THIS
AGREEMENT is made as of
this 1st day of March, 2009, by and between
Hatteras Global Private Equity Partners Institutional, LLC, a Delaware limited
liability company (the “Fund”), and UMB Fund Services, Inc., a Wisconsin
corporation (the “Administrator”).
WHEREAS, the Fund is a limited liability company
which is registered as a closed-end, non-diversified management investment
company under the provisions of the Investment Company Act of 1940 (the “1940
Act”); and
WHEREAS, the Fund is authorized to offer and
sell limited liability company interests which represent an investment in the
Fund (the “Interests”) in reliance on exemptions provided in the Securities Act
of 1933 (the “Securities Act”) and state securities laws for transactions not
involving any public offering; and
WHEREAS, in pursuit of its investment
objective, the Fund will invest its assets primarily in (i) private investment
funds (“Portfolio Funds”) (ii) direct investments in the equity and/or debt of
operating companies (“Direct Investments”) and (iii) listed private equity
vehicles, such as business development companies (including derivatives tied to
the returns of such vehicles); and
WHEREAS, the Fund and the Administrator desire
to enter into an agreement pursuant to which the Administrator shall provide
certain administration, fund accounting and recordkeeping services to the Fund.
NOW,
THEREFORE, in consideration
of the mutual promises and agreements herein contained and other good and
valuable consideration, the receipt of which is hereby acknowledged, the parties
hereto, intending to be legally bound, do hereby agree as follows:
1. Appointment
The Fund hereby appoints the
Administrator as administrator, fund accountant and recordkeeper of the Fund for
the period and on the terms set forth in this Agreement. The Administrator
accepts such appointment and agrees to render the services herein set forth, for
the compensation herein provided.
2. Services
(a) Subject to the direction and
control of the Fund and utilizing information provided by the Fund and its
agents and service providers, the Administrator will provide the services listed
on Schedule
A hereto. The duties of the
Administrator shall be confined to those expressly set forth therein, and no
implied duties are assumed by or may be asserted against the Administrator
hereunder. The Fund agrees not to (i) make any modifications to its registration
statement or (ii) adopt any policies, which would materially increase the
obligations and responsibilities of the Administrator hereunder without the
prior written approval of the Administrator, which approval shall not be
unreasonably withheld.
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(b) Hatteras Capital Investment
Management, LLC (the “Manager”), the investment manager of the Fund, shall use
reasonable efforts to cause the investment adviser(s) and sub-advisers,
including any third-party managers (each a “Portfolio Manager”), prime broker
and/or custodian, legal counsel, independent accountants and other service
providers and agents, past or present, for the Fund to cooperate with the
Administrator and to provide the Administrator with such information, documents
and advice relating to the Fund as necessary and/or appropriate or as requested
by the Administrator, in order to enable the Administrator to perform its duties
hereunder. In connection with its duties hereunder, the Administrator
shall (without investigation or verification) be entitled and is hereby
instructed to, rely upon any and all oral or written instructions, advice,
information or documents provided to the Administrator by an officer or
representative of the Manager or the Fund or by any of the aforementioned
persons. The Administrator shall be entitled to rely on any document
that it reasonably believes to be genuine and to have been signed or presented
by the proper party. Fees charged by such persons shall not be an
expense of the Administrator. The Administrator shall not be held to have notice
of any change of authority of any officer, agent, representative or employee of
the Manager, the Fund, Portfolio Managers or service provider until receipt of
written notice thereof from the Fund.
(c) At any time, the Administrator
may request instructions from the Fund with respect to any matter arising in
connection with this Agreement. If such instructions are not received
within a reasonable time, the Administrator may seek advice from legal counsel
for the Fund at the expense of the Fund, or its own legal counsel at its own
expense, and it shall not be liable for any action taken or not taken by it in
good faith in accordance with such instructions or in accordance with advice of
counsel.
(d) The Administrator hereby agrees
that all records which it maintains for the Fund pursuant to its duties
hereunder are the property of the Fund and further agrees to surrender promptly
to the Fund any of such records upon the Manager’s request.
(e) It is understood that in
determining security valuations, as appropriate, the Administrator employs one
or more pricing services to determine valuations of portfolio securities for
purposes of calculating net asset values of the Fund, as described in the
Confidential Private Placement Memorandum dated January 5, 2009, and any
successor thereto (the “Offering Memorandum”). The Administrator shall price the
securities and other holdings of the Fund for which market quotations or prices
are available by the use of such services. For those securities where prices are
not provided by the pricing service(s) utilized by the Administrator, the Fund
shall approve, in good faith, the method for determining the fair value of the
securities. At such times as are necessary and in accordance with such
procedures, the Portfolio Managers shall determine or obtain the valuation of
the securities (subject always to the review and supervision of the Board) and
shall deliver to the Administrator the resulting prices for use in its
calculation of net asset values; in particular, the Administrator shall price
investments in Portfolio Funds based on the valuations provided to it by the
Portfolio Managers. In addition, the Manager shall determine or
obtain the valuation of the Direct Investments (subject always to the review and
supervision of the Fund’s Board) and shall deliver to the Administrator the
resulting prices for use in its calculation of net asset values. The
Administrator is authorized to rely on the prices provided by the Portfolio
Managers, the Manager or other authorized representatives of the Fund without
investigation or verification.
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(f) The Manager and the Fund have and
retain primary responsibility for all compliance matters relating to the Fund,
including but not limited to compliance with all applicable provisions of the
Securities Act, the 1940 Act, the Securities Exchange Act of 1934, state
securities laws, the Internal Revenue Code of 1986, as amended, the USA PATRIOT
Act of 2001 (including checking persons submitting subscription documents
against the Office of Foreign Asset Controls (“OFAC”) list if the Administrator
is not directed to do so, the Xxxxxxxx-Xxxxx Act of 2002 and the policies and
limitations of the Fund relating to the portfolio investments as set forth in
the Offering Memorandum. The Administrator’s monitoring and other
functions hereunder shall not relieve the Manager and the Fund of their primary
day-to-day responsibility for assuring such compliance. Notwithstanding the
foregoing, the Administrator will be responsible for its own compliance with
such statutes insofar as such statutes are applicable to the services it has
agreed to provide hereunder, and will promptly notify the Fund if it becomes
aware of any non-compliance which relates to the Fund. The Administrator shall
provide the Fund with quarterly and annual certifications (on a calendar basis)
with respect to the design and operational effectiveness of its compliance and
procedures.
(g) The Fund hereby certifies that it
has undertaken (or will undertake in a timely manner) all filings and other
actions necessary to permit the Fund to lawfully offer and sell Interests in the
Fund without registration under the Securities Act and the applicable securities
laws of each state and territory in which the Fund intends to offer and sell
Interests. Except as otherwise noted on Schedule A hereto, the Fund is not delegating to
the Administrator any responsibility to monitor or otherwise take any actions
with respect to the qualification for or maintenance of any applicable Federal
or state securities law exemptions.
(h) The Administrator shall maintain
a disaster recovery and business continuity plan and adequate and reliable
computer and other equipment necessary and appropriate to carry out its
obligations under this Agreement. Upon the Fund’s reasonable request, the
Administrator shall provide supplemental information concerning the aspects of
its disaster recovery and business continuity plan that are relevant to the
services provided hereunder.
3. Fees; Delegation;
Expenses
(a) In consideration of the services
rendered pursuant to this Agreement, the Fund will pay the Administrator fees,
each as provided in Schedule B hereto. In addition, to the extent that
the Administrator corrects, verifies or addresses any prior actions or inactions
by the Fund or by any other service provider, the Administrator shall be
entitled to additional fees as provided in Schedule B. Fees shall be adjusted in accordance
with Schedule
B or as otherwise agreed to
in writing by the parties from time to time. The parties may amend this
Agreement to include fees for any additional services requested by the Fund,
enhancements to current services, or to add funds for which the Administrator
has been retained. The Fund agrees to pay the Administrator’s then current rate
for additional services provided, or for enhancements to existing services
currently provided, after the execution of this Agreement.
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(b) For the purpose of determining
fees payable to the Administrator, net asset value shall be computed in
accordance with the Fund's Operating Agreement, the Offering Memorandum and the
resolutions of the Fund, if any. The fee for the period from the day charges
begin accruing under this Agreement until the end of that period shall be
pro-rated according to the proportion that such period bears to the full period.
Upon any termination of this Agreement before the end of any period, the fee for
such part of a period shall be pro-rated according to the proportion which such
period bears to the period and shall be payable upon the date of termination of
this Agreement. Should the Fund be liquidated, merged with or
acquired by another fund or investment company, any accrued fees shall be
immediately payable.
(c) The Administrator will bear all
expenses incurred by it in connection with the performance of its services under
Section 2, except as otherwise provided herein. The Administrator
shall not be required to pay or finance any costs and expenses incurred in the
operation of the Fund, including, but not limited to: taxes; interest; brokerage
fees and commissions; salaries, fees and expenses of the Manager or any
officers; any Securities and Exchange Commission (the “Commission”) fees and
state Blue Sky fees; advisory fees; charges of custodians, prime brokers,
transfer agents, dividend disbursing and accounting services agents and other
service providers; security pricing services; insurance premiums; outside
auditing and legal expenses, including but not limited to attorneys’ fees
incurred in connection with responding to or complying with SEC or other
regulatory investigations, inquiries or subpoenas; costs of organization and
maintenance of corporate existence; taxes and fees payable to federal, state and
other governmental agencies; preparation, typesetting, printing, proofing and
mailing of prospectuses, statements of additional information, Offering
Memoranda or notices, forms or applications and proxy materials for regulatory
purposes and for distribution to prospective or current members of the Fund;
preparation, typesetting, printing, proofing and mailing and other costs of
shareholder reports; expenses in connection with the electronic transmission of
documents and information including electronic filings with the Commission and
the states; research and statistical data services; expenses incidental to
holding meetings of the Fund's members and Manager; fees and expenses associated
with internet, e-mail and other related activities; expenses incurred for
distribution of Interests and extraordinary expenses. The Administrator shall
not be required to pay any Blue Sky fees or take any related Blue Sky actions
except as set forth on Schedule A, and then not unless and until it has
received the amount of such fees from the Fund.
(d) Except as otherwise specified,
fees payable hereunder shall be calculated and billed as set forth on Schedule
B. The Fund agrees to pay all fees within thirty days of receipt of each invoice
or other method of notification of payment due the Administrator. The
Administrator retains the right to charge interest in the amount of 1 percent
per month on any amounts that remain unpaid beyond such thirty day
period.
4. Proprietary and Confidential
Information
The Administrator agrees on behalf of
itself and its employees to treat confidentially and as proprietary information
of the Fund all records relative to the Fund, its business, and the Fund’s
members, including such proprietary information received by the Administrator
prior to the date of this Agreement (“Confidential Information”), not to use
such records and information for any purpose other than performance of its
responsibilities and duties hereunder, and not to disclose such information
except where the Administrator may be exposed to civil or criminal proceedings
for failure to comply, when requested to divulge such information by duly
constituted authorities or court process, when subject to governmental or
regulatory audit or investigation, or when so requested by the Fund. In case of
any requests or demands for inspection of the records of the Fund, the
Administrator will endeavor to notify the Manager promptly and to secure
instructions from a representative of the Manager as to such inspection, unless
prohibited by law from making such notification. Records and information which
have become known to the public through no action or inaction of the
Administrator or any of its employees, agents or representatives, and
information which was already in the possession of the Administrator prior to
the date hereof, shall not be subject to this paragraph.
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5. Limitation of
Liability
(a) The Administrator shall not be
liable for any error of judgment or mistake of law or for any loss suffered by
the Fund in connection with the matters to which this Agreement relates, except
for a loss resulting from the Administrator’s willful misfeasance, bad faith or
gross negligence in the performance of its duties or from reckless disregard by
it of its obligations and duties under this Agreement. Furthermore, the
Administrator shall not be liable for (i) any action taken or omitted to be
taken in accordance with or in reliance upon written or oral instructions,
advice, data, documents or information (without investigation or verification)
received by the Administrator from or on behalf of the Manager or an officer or
representative of the Fund, or from a representative of any of the parties
referenced in Section 2, (ii) its reliance on the security valuations without
investigation or verification provided by pricing service(s), the Fund’s
Manager, a Portfolio Manager or other representatives of the Fund, (iii) any
liability arising from the offer or sale of any Interest by the Fund in reliance
on exemptions from registration under the Securities Act and the applicable
securities laws of each state and territory in which the Fund intends to offer
and sell Interests, or (iv) any action taken or omission by the Fund, the
Manager, Portfolio Managers or any past or current service
provider.
(b) The Administrator assumes no
responsibility hereunder, and shall not be liable, for any default, damage, loss
of data or documents, errors, delay or any other loss whatsoever caused by
events beyond its reasonable control. The Administrator will, however, take all
reasonable steps to minimize service interruptions for any period that such
interruption continues beyond its control.
(c) The Fund agrees to indemnify and
hold harmless the Administrator, its employees, agents, officers, directors,
affiliates and nominees (collectively, the “Indemnified Parties”) from and
against any and all claims, demands, actions and suits, and from and against any
and all judgments, liabilities, losses, damages, costs, charges, reasonable
counsel fees and other expenses of every nature and character which may be
asserted against or incurred by any Indemnified Party or for which any
Indemnified Party may be held liable (a “Claim”) arising out of or in any way
relating to (i) the Administrator’s actions or omissions, (ii) the
Administrator’s reliance on, implementation of or use of (without investigation
or verification) advice, instructions, requests, directions, information, data,
records and documents received by the Administrator from any party referenced in
Section 2 hereof or other representative of the Fund, (iii) any breach of any of
the Fund’s obligations, representations or warranties hereunder, or (iv) any
action taken by or omission of the Fund, its Manager, any Portfolio Managers, or
any past or current service provider. The Indemnified Parties shall not be
indemnified to the extent a Claim resulted from the Administrator’s or the
Indemnified Parties’ willful misfeasance, bad faith, or gross negligence in the
performance of the Administrator’s duties hereunder or from reckless disregard
by the Administrator of its obligations and duties
hereunder.
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(d) The Administrator agrees to
indemnify and hold harmless the Fund, its employees, officers and directors
(collectively, the “Fund Indemnified Parties”) from and against any and all
claims, demands, actions and suits, and from and against any and all judgments,
liabilities, losses, damages, costs, charges, reasonable counsel fees and other
expenses of every nature and character which may be asserted against or incurred
by any Fund Indemnified Party or for which any Fund Indemnified Party may be
held liable, arising out of or in any way relating to the Administrator’s
willful misfeasance, bad faith or gross negligence in the performance of its
duties or from reckless disregard by it of its obligations and duties under this
Agreement.
(e) In no event and under no
circumstances shall either party, its affiliates or any of its or their
officers, directors, members, agents or employees be liable to anyone,
including, without limitation, the other party, under any theory of tort,
contract, strict liability or other legal or equitable theory for lost profits,
exemplary, punitive, special, indirect or consequential damages for any act or
failure to act under any provision of this Agreement regardless of whether such
damages were foreseeable and even if advised of the possibility thereof. The
indemnity and defense provisions set forth in this Section 5 shall indefinitely
survive the termination and/or assignment of this Agreement.
6. Term
(a) This Agreement shall become
effective as of the date this Agreement is executed and shall continue in effect
until terminated as provided
herein. This Agreement shall continue in effect with respect to the
Fund until the fourth anniversary of the date of this
Agreement. Thereafter if not terminated as provided herein, the
Agreement shall continue automatically for successive annual periods.
(b) The terms of this Agreement shall
not be waived, altered, modified, amended or supplemented in any manner
whatsoever except by a written instrument signed by the Administrator and the
Fund.
(c) Either party may terminate this
Agreement at any time by giving the other party a written notice not less than
one-year prior to the date the termination is to
be effective.
(d) Notwithstanding anything herein
to the contrary, upon the termination of this Agreement or the liquidation of
the Fund, the Administrator shall deliver the records of the Fund (in the form
maintained by the Administrator to the extent permitted by applicable license
agreements) to the Fund or person(s) designated by the Fund at the Fund’s cost
and expense, and thereafter the Fund or its designee shall be solely responsible
for preserving the records for the periods required by all applicable laws,
rules and regulations. The Administrator shall be entitled to maintain a copy of
such records for the sole purpose of defending itself against any action arising
under or as a result of this Agreement or as otherwise required or permitted by
law. The Fund shall be responsible for all expenses associated with the movement
(or duplication) of records and materials and conversion thereof to a successor
fund accounting and administrative services agent, including all reasonable
trailing expenses incurred by the Administrator. In addition, in the event of
termination of this Agreement, or the proposed liquidation or merger of the
Fund, and the Fund requests the Administrator to provide additional services in
connection therewith, the Administrator shall provide such services and be
entitled to such compensation as the parties may mutually
agree.
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7. Non-Exclusivity
The services of the Administrator
rendered to the Fund are not deemed to be exclusive. The
Administrator may render such services and any other services to others,
including other investment vehicles, including hedge funds.
8. Governing Law;
Invalidity
This Agreement shall be governed by
Wisconsin law, excluding the laws on conflicts of laws. To the extent that the
applicable laws of the State of Wisconsin, or any of the provisions herein,
conflict with the applicable provisions of the 1940 Act, the latter shall
control, and nothing herein shall be construed in a manner inconsistent with the
1940 Act or any rule or order of the Commission thereunder. Any provision of
this Agreement which may be determined by competent authority to be prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. In such case, the
parties shall in good faith modify or substitute such provision consistent with
the original intent of the parties.
9. Notices
Any notice required or permitted to be
given by either party to the other shall be in writing and shall be deemed to
have been given when sent by registered or certified mail, postage prepaid,
return receipt requested, as follows: Notice to the Administrator shall be sent
to UMB Fund Services, Inc., 000 Xxxx Xxxxxxxx Xxxxxx, Xxxxx X, Xxxxxxxxx, XX,
00000, Attention: Xxxxx X. Xxxxxxx, with a copy to General Counsel, and notice
to the Fund shall be sent to Hatteras Global Private Equity Partners
Institutional, LLC, 0000 Xxxxxxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, XX, 00000,
Attention: J. Xxxxxxx Xxxxxx.
10. Entire
Agreement
This Agreement, together with the
Schedules attached hereto, constitutes the entire Agreement of the parties
hereto.
11. Counterparts
This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original
agreement but such counterparts shall together constitute but one and the same
instrument. The facsimile signature of any party to this Agreement shall
constitute the valid and binding execution hereof by such
party.
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12. Amendments
This Agreement may be amended only by
the written agreement of the parties hereto.
13. Assignment; Successors and
Assigns
Neither party may assign this Agreement
without the prior written consent of the other party; provided, however, that
the Administrator may assign its rights hereunder to any subsidiary or affiliate
with thirty (30) days’ prior written notice of such assignment. This Agreement
shall be binding upon and shall insure to the benefit of the parties hereto and
their respective successors and permitted assigns. To the extent that the
Administrator appoints other parties to carry out some or all of its
responsibilities under this Agreement, the Administrator (i) will, prior to
appointing such other party, use reasonable care in determining that such other
party is able to provide such services and (ii) will remain responsible for the
provision of such services to the Fund.
14. Legal
Advice
Notwithstanding anything in this
Agreement to the contrary, the services provided by the Administrator hereunder
do not constitute, nor shall they be construed as constituting, legal advice or
the provision of legal services for or on behalf of the Fund or any other
person.
15. Records
The Administrator shall keep those
records specified in Schedule C hereto in the form and manner, and for such
period, as it may deem advisable but not inconsistent with the rules and
regulations of appropriate government authorities, in particular Rules 31a-2 and
31a-3 under the 1940 Act. The Administrator shall only destroy
records at the direction of the Fund, and any such destruction shall comply with
the provisions of Section 248.30(b) of Regulation S-P (17 CFR
248.1-248.30). The Administrator may deliver to the Fund from time to
time at the Administrator’s discretion, for safekeeping or disposition by the
Fund in accordance with law, such records, papers and documents accumulated in
the execution of its duties hereunder, as the Administrator may deem expedient,
other than those which the Administrator is itself required to maintain pursuant
to applicable laws and regulations. The Fund shall assume all responsibility for
any failure thereafter to produce any record, paper, or other document so
returned, if and when required.
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16. Miscellaneous
The Fund hereby grants to the
Administrator the limited power of attorney on behalf of the Fund to sign Blue
Sky forms and related documents in connection with the performance of its
obligations under this Agreement.
IN
WITNESS WHEREOF, the
parties hereto have caused this Agreement to be executed by a duly authorized
officer as of the day and year first above written.
HATTERAS GLOBAL PRIVATE EQUITY
PARTNERS
INSTITUTIONAL, LLC
(the “Fund”)
By:
____________________________________________
Xxxxx X. Xxxxxxx, President
Xxxxx X. Xxxxxxx, President
UMB FUND SERVICES,
INC.
(“Administrator”)
By:
____________________________________________
Xxxx X. Xxxxx, Chief Executive Officer
Xxxx X. Xxxxx, Chief Executive Officer
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Schedule A
to the
by and between
and
UMB Fund Services,
Inc.
Services
Subject to the direction of, and
utilizing information provided by the Fund, the Manager, the Portfolio Managers
and the Fund’s agents, the Administrator will:
General
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Provide
office space, facilities, equipment and personnel to carry out its
services hereunder;
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Maintain
the accounts, books
and other documents produced by the Administrator in connection with its
services hereunder;
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Accounting and Reporting
Services
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Maintain
books and records in accordance with the terms of the Operating Agreement
and generally accepted accounting
principles;
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Maintain
checkbook registers and facilitate the payment of vendor invoices (UMB
Fund Services, Inc., shall not be a signatory on any bank
accounts);
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Coordinate
transfer of funds for purchase of investments and inter-bank
transfers;
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Compute
distribution payments and allocations of profit, loss, income and expense
to investors in accordance with the Operating Agreement with supporting
detail of preferred return, catch-up and other special allocation
provisions;
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Maintain
capital account detail for each investor, including income and loss
allocations, capital contributions and
distributions;
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Maintain
database detail of all portfolio investment
transactions;
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Maintain
database detail of each capital contribution and each
distribution;
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Coordinate
and supervise the annual audit including: prepare and/or gather all
supporting documen- tation for audit review; cash, custody and investment
confirmations; legal and audit representation letters; and follow-up on
all questions and requests for additional
information;
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Provide
work papers sufficient to permit the preparation and filing of all federal
and state income tax returns (and such
other required tax filings as may be agreed to by the parties) by the
Fund’s tax accountants;
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Prepare
and distribute quarterly and annual financial reports to investors in a
format and on a timetable consistent with applicable
requirements;
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Prepare
and distribute individual statements of investors’ capital accounts on a
quarterly basis for each year-to-date and inception-to-date period as
required;
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On
a quarterly basis, pursuant to the terms of the Operating Agreement,
prepare a report reflecting the Fund’s performance and provide comparisons
of performance information to pertinent
benchmarks;
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Act
as liaison with the Fund’s independent public accountants, and provide
account analyses, fiscal year summaries and other audit-related
information schedules;
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Assist
in the preparation of the Fund’s annual financial reports, subject to the
review and approval of the Fund and the Fund’s independent public
accountants;
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Review
subscription documents for reasonableness; provided, however, the Manager
remains solely responsible for determining
accreditation;
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At
the direction of the Manager, establish and maintain member capital
accounts for each investor;
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Calculate
items of income, expense, gain and loss, and allocate such items to
individual members’ capital accounts in accordance with the Fund’s
Operating Agreement;
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Determine
realized gains or losses on security
trades;
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Monitor
individual investments for corporate actions, cash dividends and capital
changes;
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Calculate
contractual expenses (e.g.,
advisory fees);
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Determine
and periodically monitor the Fund's income and expense accruals and cause
all appropriate expenses to be paid from Fund assets on proper
authorization from the Fund;
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Calculate
the net asset value per Interest of the Fund (i) in accordance with the
Fund’s operating documents as provided to the Administrator, and (ii)
based on security valuations, if applicable, as provided
herein;
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Maintain
all general ledger accounts and related
subledgers;
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Provide
such reports as mutually agreed upon by the parties
hereto;
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Prepare
internal management reports relating to the activities of the Fund as
requested
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Prepare
Form 1099s for Board members and other Fund vendors;
and
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Compute
gross and net internal rate of return calculations, as
requested.
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Administrative
Services
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Prepare
draft notifications to investors for distribution payments for review and
approval;
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Distribute
approved notifications to investors and their advisors as
directed;
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Coordinate
payment of cash distributions by check or
wire;
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Reconcile
investment securities held in
custody;
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Coordinate
relationships with professionals, including attorneys, bankers,
independent accountants and distribution agents used by the
Fund;
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Maintain
database of investor data required for dissemination of reports and
notifications, preparation of tax information and payment of cash and
in-kind distributions;
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Effect
and/or maintain the qualification of Interests for sale under the
securities laws of the jurisdictions indicated by the Manager or officer
or other representative of the Fund by filing Form NF or such other
form(s) as directed by the Fund and, subject to Section 3, remitting any
applicable fees to such jurisdictions are required under applicable Blue
Sky laws;
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File
with each jurisdiction, as required, the appropriate materials relating to
the Fund, including, but not limited to the Fund’s Registration Statements
or Post-Effective Amendments, definitive copies of the Fund’s Offering
Memorandum and annual reports;
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Monitor
sales in each jurisdiction and in the event sales of shares in a
particular jurisdiction reach or exceed Administrator’s warning levels,
promptly prepare an amendment to the Fund’s notice permit to increase the
offering amount;
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Compile
data for and prepare with respect to the Fund’s Semi-Annual Reports on
Form N-SAR;
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Prepare
and review the financial statement for the Fund’s Annual and Semi-Annual
Reports included in Form N-CSR as required under the Xxxxxxxx-Xxxxx Act;
assist in compiling exhibits and disclosures for Form N-CSR as requested
by the Manager;
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Provide
financial and Fund performance information for inclusion in the
Registration Statement for the Fund (on Form N-2 or any replacement
therefor) and any amendments thereto, subject to the review of Fund
counsel;
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Assist
in the acquisition of the Fund’s directors’ and officers’ errors and
omissions insurance, assist in the acquisition of the Fund’s fidelity bond
required by the 1940 Act, and monitor the amount of the bond and make the
necessary SEC filings related
thereto;
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From
time to time as the Administrator deems appropriate, check the Fund’s
compliance with the policies and limitations of the Fund relating to the
portfolio investments as set forth in the Fund’s Offering Memorandum and
Statement of Additional Information (but these functions shall not relieve
the Fund’s Manager and Portfolio Managers, if any, of their primary
day-to-day responsibility for assuring such
compliance);
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Develop
with legal counsel and the secretary of the Fund an agenda for each Board
meeting and, if requested by the Board of Managers, attend Board meetings
and prepare minutes;
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Provide
timely response to investor inquiries and requests for additional
information as directed;
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In
connection with the Fund’s first and third fiscal quarters, prepare Form
N-Q and provide to Fund counsel for its review of the same; upon the
advice and direction of Fund counsel, file Form N-Q with the Commission as
required;
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Subject
to having received all relevant information from the Fund and upon the
advice and direction of Fund counsel, prepare Form N-PX and provide to
Fund counsel for its review of the same; upon the advice and direction of
Fund counsel, file Form N-PX with the Commission as
required;
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12
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Provide
secured investor account online reporting
services;
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Generally
assist in the Fund’s administrative operations as mutually agreed to by
the parties; and
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Assist
the Fund’s Chief Compliance Officer with the development and maintenance
of a compliance calendar for the Fund, provided that it is understood by
the parties that the Fund’s Chief Compliance Officer is ultimately
responsible for such calendar;
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Subscription Period
Services
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Development
of investor database;
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Data
collection and input for the initial and subsequent
closings;
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Assist
the Fund with its monitoring obligations under the USA PATRIOT Act by (1)
at such time as directed by the Manager, rejecting Subscription Agreements
that are not accompanied by required identifying information; (2)
providing an initial check of identifying information against the
LEXIS/NEXIS® AML database (or any successor thereto) licensed by the
Administrator; (3) providing an initial check of persons submitting
Subscription Agreements against the OFAC list; (4) upon consultation with
the Manager, filing a suspicious activity report with the appropriate
authorities; (5) permitting federal regulators access to such information
and records maintained by the Administrator relating to the
Administrator’s implementation of the Fund’s monitoring obligations, as
they may request, and (6) permitting such federal regulators to inspect
the Administrator’s implementation of such monitoring obligations on
behalf of the Fund;
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Coordination
of subscription approval process with counsel, as requested,
and
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Other
administrative functions as mutually agreed upon in connection with the
subscription process.
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Additional Work
The duties of the Administrator shall be
confined to those expressly set forth herein, and no implied duties are assumed
by or may be asserted against the Administrator hereunder. Work requested of the
Administrator that is considered to be outside the scope of the accounting,
reporting and administrative services set forth above is subject to additional
fees at the prevailing hourly rate.
13
Schedule B
to the
by and between
and
UMB Fund Services,
Inc.
Fees
ACCOUNTING AND
ADMINISTRATION
Annual Hatteras Firm Level Asset-Based
Fee
|
■ First $1 billion in net
assets
|
7.5 basis points,
plus
|
|
■ Next $500 million in net
assets
|
6.5 basis points,
plus
|
|
■ Next $500 million in net
assets
|
5 basis points,
plus
|
|
■ Next $500 million in net
assets
|
4 basis points,
plus
|
|
■ Over $2.5 billion in net
assets
|
3 basis
points
|
The annual Hatteras firm level asset
based fee will be calculated based upon the aggregate beginning of the month net
assets of all Hatteras master funds and stand alone funds at the applicable
basis points per annum rate above and will be payable by the relevant master
fund/stand alone fund on a monthly/quarterly basis as agreed. The fees will be
determined based on the aggregate net assets of all master funds and stand alone
funds managed by Hatteras and administered by UMB Fund Services, Inc. and
applied to each such fund based on its respective pro rata share of the
aggregate net assets. The asset-based fee will be subject to the following
minimum fees:
Minimum Asset-Based
Fee
|
■ Monthly Priced
Funds
|
$6,000/month
|
|
■ Quarterly Priced
Funds
|
$4,800/month
|
The above fees apply to each master fund
and stand alone fund and exclude optional services, out-of-pocket expenses and
other related expenses (see Out of Pocket Expenses and Other Related Expenses
section).
The fee for each feeder fund in a master
fund structure is listed below.
Monthly Feeder Fund
Fee
|
■ Monthly Priced Feeder
Funds
|
$2,000/feeder
|
|
■ Quarterly Priced Feeder
Funds
|
$1,000/feeder
|
Offshore funds which solely serve as
intermediate entities and which do not have investment or other discretion over
its investable assets will not be charged a fee.
14
Monthly Regulatory Administration
Fee
A monthly fee of $2,500 per fund will be
charged to each fund that is registered with the SEC.
INVESTOR SERVICES
Continuously Offered
Funds
Annual Hatteras Firm Level Investor
Servicing Fee
|
■ For each of the first 1000
investors
|
$125
|
|
■ For each of the next 1000
investors
|
$100
|
|
■ For each of the next 1000
investors
|
$75
|
|
■ For each investor over 3,000
investors
|
$50
|
The fees will be determined on the
aggregate total number of investors in funds managed by Hatteras and
administered by UMB Fund Services, Inc. and allocated to each fund based on its
respective percentage of the number of investors on a monthly basis. Account
fees will be subject to the minimum investor services fees listed
below.
Non-Continuously Offered
Funds
|
■ Account
Opening
|
$50/account
|
|
■ Yearly Account Charge (including
initial year)
|
$50/account
|
Minimum Investor Services
Fee
|
■ Monthly Priced
Funds
|
$2,000/month
|
|
■ Quarterly Priced
Funds
|
$1,500/month
|
|
■ Non-Continuously Offered
Funds
|
$1,500/month
|
BLUE SKY FEES
|
Per state
filing
|
$150
|
USA PATRIOT ACT (AML)
FEES
|
■ Per fund (per
year)
|
$1,500
|
|
■ Suspicious Activity Report filing
(per occurrence)
|
$25
|
OUT-OF-POCKET EXPENSES AND OTHER RELATED
EXPENSES
Out-of-pocket expenses and other related
expenses include but are not limited to: pricing services and printing of
reports; financial statement system charges; photocopying; express delivery
charges; travel on behalf of company business; record
retention/storage/retrieval expenses, attorney’s fees incurred in connection
with responding to and complying with SEC or other regulatory investigations,
inquiries or subpoenas, excluding routine examinations of UMB Fund Services,
Inc. in its role as administrator.
15
Additional fees at $200 per hour or as
quoted by project may apply for special programming to meet your servicing
requirements or to create custom reports. Such additional fees will only be
charged after receiving written notice from Hatteras confirming such additional
services.
Each of the fees on this Schedule B is
subject to an annual escalation, the implementation of which shall be subject to
the Administrator’s sole discretion, equal to the increase in the Consumer Price
Index – Urban Wage Earners (“CPI”), which escalation shall be effective
commencing one year from the date of the Agreement (the “Anniversary Date”) and
on the corresponding Anniversary Date each year thereafter. CPI shall be
determined by reference to the Consumer Price Index News Release issued by the
Bureau of Labor Statistics, U.S. Department of Labor.
Fees for services not contemplated by
this schedule will be negotiated on a case-by-case
basis.
16
Schedule C
to the
by and between
and
UMB Fund Services,
Inc.
|
■
|
Accounting records, including
Interest Holder Account Ledgers, Portfolio Transactions Journals, Cash
Receipts and Disbursements Journal, General Ledger, Subsidiary Ledgers,
Portfolio Securities Ledger, Commissions Ledger, Capital Account Ledger
and Trial Balances.
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■
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Copies of the Fund’s Limited
Liability Company Agreement and minute
books.
|
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■
|
Shareholder correspondence
(including e-mail communications) relating to matters required to be
maintained by Section 31(a) of the 1940
Act
|
17
