1. |
Engagement of USBFS
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2. |
Services and Duties of USBFS
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A.
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Portfolio Accounting Services:
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(1) |
Maintain portfolio records on a trade date+1 basis using security trade information communicated from the Fund.
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(2) |
As of the end of each calendar month (each such date is referred to herein as a “valuation date”), obtain prices from a pricing source approved by the Board of Trustees of the Fund (the “Board of Trustees” or the “Trustees”) and apply
those prices to the portfolio positions. For those securities where market quotations are not readily available, the Board of Trustees, or a designee thereof, shall provide, in good faith, the fair value for such securities.
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(3) |
Identify interest and dividend accrual balances as of each valuation date and calculate gross earnings on investments for the accounting period.
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(4) |
Determine gain/loss on security sales and identify them as short-term or long-term; account for periodic distributions of gains or losses to shareholders and maintain undistributed gain or loss balances as of each valuation date.
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B.
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Expense Accrual and Payment Services:
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(1) |
For each valuation date, calculate the expense accrual amounts as directed by the Administrator as to methodology, rate or dollar amount.
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(2) |
Record payments of expenses or changes in accruals upon receipt of written authorization from the Administrator.
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(3) |
Account for expenditures and maintain expense accrual balances at the level of accounting detail, as agreed upon by USBFS and the Administrator.
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(4) |
Provide expense accrual and payment reporting.
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C.
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Fund Valuation and Financial Reporting Services:
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(1) |
Account for Fund share repurchases, tenders, sales, exchanges, transfers, dividend reinvestments, and other Fund share activity as reported by the Fund’s transfer agent on a timely basis.
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(2) |
Apply equalization accounting as directed by the Administrator and/or the Fund, to the extent applicable.
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(3) |
Determine net investment income (earnings) for the Fund as of each valuation date. Account for periodic distributions of earnings to shareholders by share class and maintain undistributed net investment income balances as of each
valuation date.
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(4) |
Maintain a general ledger and other accounts, books, and financial records for the Fund in the form as agreed upon.
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(5) |
Calculate the net asset value of the Fund including management fee and incentive fee calculation according to the accounting policies and procedures set forth in the registration statement filed under the Securities Act of 1933 and/or
Securities Exchange Act of 1934 and the Fund’s valuation policies and procedures, or other operative documents.
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(6) |
Calculate per share net asset value, per share net earnings, and other per share amounts per share class reflective of Fund operations of each valuation date and at such time as requested by the Administrator and/or the Fund.
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(7) |
Communicate, at an agreed upon time, the per share price for each share class for each valuation date to parties as agreed upon from time to time.
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(8) |
Prepare quarterly reports that document the adequacy of accounting detail to support month-end ledger balances.
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D.
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Tax Accounting Services:
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(1) |
Maintain accounting records for the investment portfolio of the Fund to support the tax reporting required for Internal Revenue Service defined regulated investment companies.
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(2) |
Maintain tax lot detail for the Fund’s investment portfolio.
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(3) |
Calculate taxable gain/loss on security sales using the tax lot relief method designated by the Administrator and/or the Fund.
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(4) |
Provide the necessary financial information to support the taxable components of income and capital gains distributions to the Fund’s transfer agent to support tax reporting to the shareholders.
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E.
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Compliance Control Services:
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(1) |
Support reporting to regulatory bodies and support financial statement preparation by making the Fund’s accounting records available to the Fund, the Securities and Exchange Commission (the “SEC”), and the Fund’s outside auditors.
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(2) |
Maintain accounting records according to the 1940 Act and regulations provided thereunder.
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(3) |
Assist the Fund’s Chief Executive Officer and Chief Financial Officer in connection with establishing and maintaining internal control over financial reporting (as defined in Rules 13a-15(f) and 15-d(f) under the Securities Exchange Act
of 1934 (the “1934 Act”)) for the Fund.
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(4) |
In order to assist the Fund in satisfying the requirements of Rule 38a-1 under the 1940 Act (the “Rule”), USBFS will provide the Fund’s Chief Compliance Officer with reasonable access to USBFS’s fund records relating the services provided
by it under this Agreement, and will provide quarterly compliance reports and related certifications regarding any Material Compliance Matter (as defined in the Rule) involving USBFS that affect or could affect the Fund.
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(5) |
Cooperate with the Fund’s independent registered public accounting firm and take all reasonable action in the performance of its obligations under this Agreement to ensure that the necessary information is made available to such firm for
the expression of its opinion on the Fund’s financial statements without any qualification as to the scope of its examination.
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(6) |
Transmit or mail a copy of the portfolio valuation to the Fund on each valuation date.
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F.
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USBFS will perform the following reconciliation functions on a daily basis:
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(1) |
Reconcile cash and investment balances of the Fund with the Fund’s custodian.
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(2) |
Reconcile cash, positions, and income accruals between USBF’s accounting records and the Fund’s internal records.
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G.
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In addition, USBFS will:
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(1)
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Prepare quarterly security transactions listings.
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(2) |
Supply various statistical data as requested by the Fund on an ongoing basis.
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(3)
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Prepare a final quarterly reconciliation between the Fund’s cash and positions in the portfolio in addition to the total profit and loss for the period as held on USBFS’s accounting records and the Fund’s internal records.
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(4) |
Pay Fund expenses upon written authorization from the Fund.
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(5) |
Facilitate creation of monthly Audit Committee net asset valuation reporting package.
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3. |
License of Data; Warranty; Termination of Rights
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A. |
The valuation information and valuations being provided to the Administrator by USBFS pursuant hereto (collectively, the “Data”) is being licensed, not sold, to the Administrator. The Administrator has a limited license to use the Data
only for purposes necessary to valuing the Fund’s assets and reporting to regulatory bodies and the Fund’s stockholders (the “License”). The Administrator does not have any license nor right to use the Data for purposes beyond the intentions
of this Agreement including, but not limited to, resale to other users or use to create any type of historical database. The License is non-transferable and not sub-licensable. The Administrator’sright to use the Data cannot be passed to or
shared with any other entity.
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B. |
THE ADMINISTRATOR HEREBY ACCEPTS THE DATA AS IS, WHERE IS, WITH NO WARRANTIES, EXPRESS OR IMPLIED, AS TO MERCHANTABILITY OR FITNESS FOR ANY PURPOSE OR ANY OTHER MATTER.
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C. |
USBFS may stop supplying some or all Data to the Administrator if USBFS’ suppliers terminate any agreement to provide Data to USBFS. Also, USBFS may stop supplying some or all Data to the Administrator if USBFS reasonably believes that
the Administrator is using the Data in violation of the License, or breaching its duties of confidentiality provided for hereunder, or if any of USBFS’ suppliers demand that the Data be withheld from the Administrator. USBFS will provide
notice to the Administrator of any termination of provision of Data as soon as reasonably possible.
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4. |
Pricing of Securities
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A. |
For each valuation date, USBFS shall obtain prices from a pricing source recommended by USBFS and approved by the Administrator or the Adviser and apply those prices to the portfolio positions of the Administrator. For those securities
where market quotations are not readily available, the Board of Trustees shall provide, in good faith, the fair value for such securities and USBFS shall apply those fair values to the relevant portfolio positions.
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B. |
In the event that the Administrator at any time receives Data containing evaluations, rather than market quotations, for certain securities or certain other data related to such securities, the following provisions will apply: (i)
evaluated securities are typically complicated financial instruments. There are many methodologies (including computer-based analytical modeling and individual security evaluations) available to generate approximations of the market value of
such securities, and there is significant professional disagreement about which method is best. No evaluation method, including those used by USBFS and its suppliers, may consistently generate approximations that correspond to actual “traded”
prices of the securities; (ii) methodologies used to provide the pricing portion of certain Data may rely on evaluations; however, the Administrator acknowledges that there may be errors or defects in the software, databases, or methodologies
generating the evaluations that may cause resultant evaluations to be inappropriate for use in certain applications; and (iii) the Administrator assumes all responsibility for edit checking, external verification of evaluations, and
ultimately the appropriateness of using Data containing evaluations, regardless of any efforts made by USBFS and its suppliers in this respect. The provisions in this Section 4 shall not have any effect upon the services USBFS is required to
provide or the standard of care and liability USBFS has set forth in Section 9 of this Agreement.
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C. |
USBFS shall not have any obligation to verify the accuracy or appropriateness of any prices, evaluations, market quotations, or other data or pricing related inputs received from the Administrator, the Fund, any of their affiliates, or any
unaffiliated third party source. Notwithstanding anything else in this Agreement to the contrary, USBFS and its affiliates shall not be responsible or liable for any mistakes, errors, or mispricing, or any losses related thereto, resulting
from any inaccurate, inappropriate, or fraudulent prices, evaluations, market quotations, or other data or pricing related inputs received from the Administrator, the Fund, any of their affiliates, or any unaffiliated third party source.
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5. |
Changes in Accounting Procedures
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6. |
Changes in Equipment, Systems, Etc.
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7. |
Compensation
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8. |
Representations and Warranties
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A. |
The Administrator hereby represents and warrants to USBFS, which representations and warranties shall be deemed to be continuing throughout the term of this Agreement, that:
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(1) |
It is duly organized and existing under the laws of the jurisdiction of its organization, with full power to carry on its business as now conducted, to enter into this Agreement and to perform its respective obligations hereunder;
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(2) |
This Agreement has been duly authorized, executed and delivered by the Administrator in accordance with all requisite action and constitutes a valid and legally binding obligation of the Administrator, enforceable in accordance with its
terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting the rights and remedies of creditors and secured parties;
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(3) |
It is conducting its business in compliance in all material respects with all applicable laws and regulations, both state and federal except to the extent such failure to do so does not have a material adverse affect on its business, and
has obtained all regulatory approvals necessary to carry on its business as now conducted; there is no statute, rule, regulation, order or judgment binding on it and no provision of its organzational documents or any contract binding it or
affecting its property which would prohibit its execution or performance of this Agreement; and
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(4) |
To the best of its knowledge, all records of the Fund provided to USBFS by the Administrator are accurate and complete and USBFS is entitled to rely on all such records in the form provided.
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B. |
USBFS hereby represents and warrants to the Administrator, which representations and warranties shall be deemed to be continuing throughout the term of this Agreement, that:
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(1) |
It is duly organized and existing under the laws of the jurisdiction of its organization, with full power to carry on its business as now conducted, to enter into this Agreement and to perform its obligations hereunder;
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(2) |
This Agreement has been duly authorized, executed and delivered by USBFS in accordance with all requisite action and constitutes a valid and legally binding obligation of USBFS, enforceable in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting the rights and remedies of creditors and secured parties;
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(3) |
It is conducting its business in compliance in all material respects with all applicable laws and regulations, both state and federal, and has obtained all regulatory approvals necessary to carry on its business as now conducted; there is
no statute, rule, regulation, order or judgment binding on it and no provision of its organizational documents or any contract binding it or affecting its property which would prohibit its execution or performance of this Agreement;
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(4) |
To the best of its knowledge, no legal or administrative proceedings have been instituted or threatened which would impair USBFS’ ability to perform its duties and obligations under this Agreement;
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(5) |
Its entrance into this Agreement shall not cause a material breach or be in a material conflict with any other agreement or obligation of USBFS, or any law or regulation applicable to it; and
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(6) |
It has all the necessary facilities, equipment and personnel to perform the duties and obligations under this Agreement.
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9. |
Standard of Care; Indemnification; Limitation of Liability
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A. |
USBFS shall exercise reasonable care in the performance of its duties under this Agreement. USBFS shall not be liable for any error of judgment or mistake of law or for any loss suffered by the Fund or the Administrator in connection with
its duties under this Agreement, including losses resulting from mechanical breakdowns or the failure of communication or power supplies beyond USBFS’ control, except a loss arising out of or relating to USBFS’ refusal or failure to comply
with the terms of this Agreement or from its bad faith, negligence, or willful misconduct in the performance of its duties under this Agreement. Notwithstanding any other provision of this Agreement, if USBFS has exercised reasonable care in
the performance of its duties under this Agreement, the Fund shall indemnify and hold harmless USBFS from and against any and all claims, demands, losses, expenses, and liabilities of any and every nature (including reasonable and documented
attorneys’ fees) that USBFS may sustain or incur or that may be asserted against USBFS by any person arising out of or directly related to (X) any action taken or omitted to be taken by it in performing the services hereunder (i) in
accordance with the foregoing standards, or (ii) in reliance upon any written instruction provided to USBFS by the Administrator or the Fund’s investment adviser or by any duly authorized officer of the Fund, as approved by the Board of
Trustees of the Fund, or (Y) the Data, or any information, service, report, analysis or publication derived therefrom, except for any and all claims, demands, losses, expenses, and liabilities arising out of or relating to USBFS’ refusal or
failure to comply with the terms of this Agreement or from its bad faith, negligence or willful misconduct in the performance of its duties under this Agreement. This indemnity shall be a continuing obligation of the Fund, its successors and
assigns, notwithstanding the termination of this Agreement (provided that, for the avoidance of doubt, the parties acknowledge and agree that this indemnity shall not cover events that occur subsequent to the termination of this Agreement).
As used in this paragraph, the term “USBFS” shall include USBFS’ directors, officers and employees.
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B. |
In order that the indemnification provisions contained in this section shall apply, it is understood that if in any case the indemnitor may be asked to indemnify or hold the indemnitee harmless, the indemnitor shall be fully and promptly
advised of all pertinent facts concerning the situation in question, and it is further understood that the indemnitee will use all reasonable care to notify the indemnitor promptly concerning any situation that presents or appears reasonably
likely to result in a claim for indemnification. The indemnitor shall have the option to defend the indemnitee against any claim that may be the subject of this indemnification. In the event that the indemnitor so elects, it will so notify
the indemnitee and thereupon the indemnitor shall take over complete defense of the claim, and the indemnitee shall in such situation initiate no further legal or other expenses for which it shall seek indemnification under this section. The
indemnitee shall in no case confess any claim or make any compromise in any case in which the indemnitor will be asked to indemnify the indemnitee except with the indemnitor’s prior written consent.
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C. |
The indemnity and defense provisions set forth in this Section 9 shall indefinitely survive the termination and/or assignment of this Agreement.
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D. |
If USBFS is acting in another capacity for the Administrator or the Fund pursuant to a separate agreement, nothing herein shall be deemed to relieve USBFS of any of its obligations in such other capacity.
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10. |
Proprietary and Confidential Information
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11. |
Term of Agreement; Amendment
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12. |
Records
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13. |
Governing Law
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14. |
Duties in the Event of Termination
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15. |
No Agency Relationship
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16. |
Data Necessary to Perform Services
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17. |
Notification of Error
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18. |
Compliance with Laws
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19. |
Assignment
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20. |
Notices
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Notice to USBFS shall be sent to: |
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U.S. Bancorp Fund Services, LLC |
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777 East Wisconsin Avenue |
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MK-WI-J1S |
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Milwaukee, WI 53202 |
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and notice to the Administrator and Fund shall be sent to: |
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HPS Investment Partners, LLC | |||
40 West 57th Street, | |||
33rd Floor New York, NY 10019 |
21. |
Multiple Originals
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22. |
Entire Agreement
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HPS INVESTMENT PARTNERS, LLC
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U.S. BANCORP FUND SERVICES, LLC
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By:
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By:
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Name:
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Name:
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Title:
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Title:
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Date:
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Date:
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HPS CORPORATE LENDING FUND,solely
with respect to Sections 9 and 14 hereof
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By:
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Name:
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Title:
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Date:
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