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
BACAP OPPORTUNITY STRATEGY, LLC
(Name of Issuer)
BACAP OPPORTUNITY STRATEGY, LLC
(Name of Person(s) Filing Statement)
LIMITED LIABILITY COMPANY INTERESTS
(Title of Class of Securities)
N/A
(CUSIP Number of Class of Securities)
Robert B. Carroll
BACAP Opportunity Strategy, LLC
Bank of America Corporation
101 South Tryon Street
Charlotte, NC 28255
(704) 388-5138
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications on Behalf of the Person(s) Filing Statement)
With a copy to:
Kenneth S. Gerstein, Esq.
Schulte Roth & Zabel LLP
919 Third Avenue
New York, New York 10022
(212) 756-2533
November 24, 2003
(Date Tender Offer First Published,
Sent or Given to Security Holders)
CALCULATION OF FILING FEE
- -------------------------------------------------------------------------------
Transaction Valuation: $12,000,000 (a) Amount of Filing Fee: $970.80 (b)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(a) Calculated as the aggregate maximum purchase price for Interests.
(b) Calculated at $80.90 per $1,000,000 of 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.
/ / 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.
As stated in the offering documents of BACAP Opportunity Strategy, LLC
(the "Fund"), the Fund is offering to purchase limited liability company
interests in the Fund ("Interest" or "Interests" as the context requires) from
members of the Fund ("Members") at their net asset value (that is, the value of
the Fund's assets minus its liabilities, multiplied by the proportionate
interest in the Fund a Member desires to tender). The offer to purchase
Interests (the "Offer") will remain open until 12:00 midnight, eastern time, on
Wednesday, December 24, 2003, unless the Offer is extended.
The net asset value of the Interests will be calculated for this
purpose on December 31, 2003 (the "Valuation Date"). The Fund reserves the right
to adjust the Valuation 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 its fiscal year ending December 31, 2003, which the Fund
expects will be completed by the end of February 2004, and the audited net asset
value will be used to determine the final amount paid for tendered Interests.
Members may tender their entire Interest, a portion of their Interest
defined as a specific dollar value or the portion of their Interest above the
required minimum capital account balance. If a Member tenders its entire
Interest, subject to any extension of the Offer, the Fund will pay the Member in
cash and/or marketable securities (valued in accordance with the Fund's First
Amended and Restated Limited Liability Company Agreement dated as of June 27,
2003 (the "LLC Agreement")) no later than January 10, 2003, at least 95% of the
unaudited net asset value of the Member's Interest tendered and accepted by the
Fund based on the Fund's calculation of the net asset value as of December 31,
2003, less the incentive allocation payable to BACAP Advisory Partners, LLC, the
investment adviser of the Fund (the "Adviser") on December 31, 2003, if any. The
Fund will owe the Member the balance, for which it will give the Member a
promissory note (the "Note") that will be held in the account in which the
Member held its Interest (or such other account as the Member may properly
designate).
A Member that tenders for repurchase only a portion of such Member's
Interest will be required to maintain a capital account balance equal to the
greater of: (i) $100,000, net of the amount of the incentive allocation, if any,
that is to be debited from the capital account of the Member on the Valuation
Date of the Offer (the "Incentive Allocation") or would be so debited if the
Valuation Date were a day on which an Incentive Allocation, if any, was made
(collectively, the "Tentative Incentive Allocation"); or (ii) the amount of the
Tentative Incentive Allocation, if any. In the case of a partial tender of an
Interest, the Fund will pay the full estimated net asset value of the portion of
the Interest tendered in cash and/or marketable securities no later than January
10, 2003 subject to any extension of the Offer. The Fund reserves the right to
purchase less than the amount tendered by a Member if the amount tendered would
cause the Member's capital account in the Fund to have a value less than the
required minimum balance. The Fund will make payment for the Interests it
purchases from one or more of the following sources: cash on hand, the proceeds
from the sale of and/or delivery of portfolio securities held by the Fund, or by
borrowings.
Following this summary is a formal notice of the Fund's offer to
purchase the Interests. The Offer remains open to Members until 12:00 midnight,
eastern time, on Wednesday, December 24, 2003, the expected expiration date of
the Offer. Until that time, Members have the right to change their minds and
withdraw the tenders of their Interests. Members will also have the right to
withdraw tenders of their Interests at any time after January 22, 2004, assuming
their Interest has not yet been accepted for purchase by the Fund.
If a Member would like the Fund to purchase its Interest or a 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,
attached to this document as Exhibit C, to PFPC Inc. ("PFPC"), at P.O. Box 220,
Claymont, Delaware 19703, attention Angela Carn, or (ii) fax it to PFPC at (302)
791-2790 or (302) 791-3105, so that it is received before 12:00 midnight,
eastern time, on Wednesday, December 24, 2003. If the Member chooses to fax the
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Letter of Transmittal, it should mail the original Letter of Transmittal to PFPC
promptly after it is faxed (although the original does not have to be received
before 12:00 midnight, eastern time, on Wednesday, December 24, 2003).
Of course, the value of the Interests will change between October 31
(the last time prior to the date of this filing as of which net asset value has
been calculated), and December 31, 2003, the date as of which the value of the
Interests will be determined for purposes of calculating the purchase price for
Interests. Members may obtain the estimated net asset value of their Interests,
which the Fund will calculate monthly until the expiration date of the Offer, by
contacting PFPC at (888) 697-9661 or (866) 306-0232 or at the address set forth
above, Monday through Friday, except holidays, during normal business hours of
9:00 a.m. to 5:00 p.m. (eastern time).
Please note that just as each Member has the right to withdraw the
tender of an Interest, the Fund has the right to cancel, amend or postpone this
Offer at any time up to and including the acceptance of tenders pursuant to the
Offer. Also realize that although the Offer expires on Wednesday, December 24,
2003, a Member that tenders its Interest will remain a Member with respect to
the Interest tendered and accepted for purchase by the Fund through December 31,
2003, when the net asset value of the Member's Interest is calculated.
ITEM 2. ISSUER INFORMATION.
(a) The name of the issuer is BACAP Opportunity Strategy, LLC. 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 Interests are registered under the Securities Act of 1933,
as amended. It is organized as a Delaware limited liability company. The
principal executive office of the Fund is located at 101 South Tryon Street,
Charlotte, North Carolina 28255 and it may be reached at (888) 697-9661 or
(866) 306-0232.
(b) The title of the securities that are the subject of the Offer is
limited liability company interests or portions thereof in the Fund. (As used
herein, the term "Interest" or "Interests" as the context requires, refers to
the limited liability company interests in the Fund and portions thereof that
constitute the class of security that is the subject of this Offer or the
limited liability company interests in the Fund or portions thereof that are
tendered by the Members pursuant to the Offer.) As of the close of business on
October 31, 2003, there was approximately $49,527,000 outstanding in capital of
the Fund, represented by Interests. Subject to the conditions set forth in the
Offer, the Fund will purchase up to $12 million of Interests that are tendered
by 12:00 midnight, eastern time, on Wednesday, December 24, 2003, and not
withdrawn as described in ITEM 1, subject to any extension of the Offer.
(c) Interests are not traded in any market, and any transfer thereof is
strictly limited by the terms of the Fund's LLC Agreement.
ITEM 3. IDENTITY AND BACKGROUND OF FILING PERSON.
(a) The name of the filing person is BACAP Opportunity Strategy, LLC.
The Fund's principal executive office is located at 101 South Tryon Street,
Charlotte, North Carolina 28255 and it may be reached at (888) 697-9661 or (866)
306-0232. The investment adviser of the Fund is BACAP Advisory Partners, LLC.
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The principal executive office of the Adviser is located at 101 South Tryon
Street, Charlotte, North Carolina 28255 and it may be reached at (646) 313-8890,
attention Joseph Belladonna. The members of the Fund's Board of Managers
("Managers" or "Board of Managers" as the context requires) are Thomas W. Brock,
Thomas Yellin and Alan Brott. Their address is c/o BACAP Advisory Partners, LLC,
101 South Tryon Street, Charlotte, North Carolina 28255.
ITEM 4. TERMS OF THIS TENDER OFFER.
(a) (1) (i) Subject to the conditions set forth in the Offer, the Fund
will purchase up to $12 million of Interests that are tendered by Members and
not withdrawn as described in ITEM 1. The initial expiration date of the Offer
is 12:00 midnight, eastern time, on Wednesday, December 24, 2003 (such time and
date, the "Initial Expiration Date"), subject to any extension of the Offer. The
later of the Initial Expiration Date or the latest time and date to which the
Offer is extended is called the "Expiration Date."
(ii) The purchase price of Interests tendered to the Fund for
purchase will be their net asset value as of the Valuation Date if the Offer
expires on the Initial Expiration Date, and otherwise the net asset value
thereof as of the close of business on any later date as corresponds to any
extension of the Offer. The Fund reserves the right to adjust the Valuation Date
to correspond with any extension of the Offer.
For a Member that tenders its entire Interest, payment of the
purchase price will consist of: (a) cash and/or marketable securities (valued in
accordance with the LLC Agreement) in an aggregate amount equal to at least 95%
of the unaudited net asset value of Interests tendered and accepted by the Fund,
determined as of the Valuation Date and payable within ten calendar days after
the Valuation Date (the "95% Cash Payment"); and (b) a Note entitling the holder
thereof to a contingent payment equal to the excess, if any, of (a) the net
asset value of the Interests tendered by the Member and accepted by the Fund as
of the Valuation Date, determined based on the audited financial statements of
the Fund for the fiscal year ended December 31, 2003, over (b) the 95% Cash
Payment. The Note will be delivered to the tendering Member in the manner set
forth in the Letter of Transmittal, attached as Exhibit C, within ten calendar
days after the Valuation Date and will not be transferable.
The Note will be payable in cash within ten calendar days after
completion of the audit of the financial statements of the Fund for the fiscal
year ended December 31, 2003. It is anticipated that the audit of the Fund's
financial statements for the fiscal year ended December 31, 2003 will be
completed by no later than 60 days after the end of the year. Any amounts
payable under the Note will not include interest. Although the Fund has retained
the option to pay all or a portion of the purchase price by distributing
marketable securities, the purchase price will be paid entirely in cash except
in the unlikely event that the Board of Managers of the Fund determines that the
distribution of securities is necessary to avoid or mitigate any adverse effect
of the Offer on the remaining Members.
A Member that tenders for repurchase only a portion of its
Interest (subject to maintenance of the required minimum capital account balance
described in ITEM 1 above) will receive cash and/or marketable securities in an
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aggregate amount equal to 100% of the estimated unaudited net asset value of
Interests tendered and accepted for purchase by the Fund, determined as of the
Valuation Date, payable within ten calendar days after the Valuation Date.
A copy of: (a) the Cover Letter to the Offer to Purchase and
Letter of Transmittal; (b) the Offer to Purchase; (c) a form of Letter of
Transmittal; (d) a form of Notice of Withdrawal of Tender; and (e) forms of
Letters from the Fund to Members that will be sent in connection with the Fund's
acceptance of tenders of Interests, are attached hereto as Exhibits A, B, C, D
and E, respectively.
(iii) The scheduled expiration date of the Offer is 12:00
midnight, eastern time, Wednesday, December 24, 2003.
(iv) Not applicable.
(v) 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 Members of such extension. The purchase price of an Interest tendered
by any Member will be the net asset value thereof as of the close of business on
December 31, 2003, if the Offer expires on the Initial Expiration Date, and
otherwise the net asset value thereof as of the close of business on any later
date as corresponds to any extension of the Offer. 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 to: (a) cancel the
Offer in the circumstances set forth in Section 7 of the Offer 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
Members.
(vi) A tender of an Interest may be withdrawn at any time before
12:00 midnight, eastern time, Wednesday, December 24, 2003 and, if such Interest
has not then been accepted for purchase by the Fund, at any time after Friday,
January 22, 2004.
(vii) Members wishing to tender Interests pursuant to the Offer
should mail or fax a completed and executed Letter of Transmittal to PFPC, to
the attention of Angela Carn, at the address set forth on page 2 of the Offer or
fax a completed and executed Letter of Transmittal to PFPC, also to the
attention of Angela Carn, at one of the fax numbers set forth on page 2 of the
Offer. The completed and executed Letter of Transmittal must be received by
PFPC, either by mail or by fax, no later than the Expiration Date. The Fund
recommends that all documents be submitted to PFPC by certified mail, return
receipt requested, or by facsimile transmission. A Member choosing to fax a
Letter of Transmittal to PFPC must also send or deliver the original completed
and executed Letter of Transmittal to PFPC promptly thereafter.
Any Member tendering an Interest pursuant to the Offer may
withdraw its tender as described in (vi) above. To be effective, any notice of
withdrawal must be timely received by PFPC at the address or at one of the fax
numbers set forth on page 2 of the Offer. A form to use to give notice of
withdrawal of a tender is available by calling PFPC at the telephone numbers set
5
forth on page 2 of the Offer. A tender of an Interest properly withdrawn will
not thereafter be deemed to be tendered for purposes of the Offer. However,
subsequent to the withdrawal of a tendered Interest, the Interest may be
tendered again prior to the Expiration Date by following the procedures
described above.
(viii) For purposes of the Offer, the Fund will be deemed to
have accepted (and thereby purchased) Interests that are tendered when it gives
written notice to the tendering Member of its election to purchase such Member's
Interest.
(ix) If more than $12 million of Interests are duly tendered to
the Fund prior to the Expiration Date and not withdrawn, the Fund will in its
sole discretion either: (a) accept additional Interests in accordance with the
terms of Rule 13e-4(f)(1)(ii) under the Securities Exchange Act of 1934, as
amended (the "1934 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
on or before the Expiration 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 (v) above.
(x) The purchase of Interests pursuant to the Offer will have
the effect of increasing the proportionate interest in the Fund of Members that
do not tender Interests. Members that retain their Interests may be subject to
increased risks that may possibly result from the reduction in the Fund's
aggregate assets resulting from payment for the Interests tendered. These risks
include the potential for greater volatility due to decreased diversification. A
reduction in the aggregate assets of the Fund may result in Members 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 Members on January 1, 2004 and
thereafter from time to time.
(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 from
Members pursuant to the Offer. Members 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.
In general, a Member from which an Interest is purchased by the
Fund will be treated as receiving a distribution from the Fund. Such Member
generally will not recognize income or gain as a result of the purchase, except
to the extent (if any) that the amount of consideration received by the Member
exceeds such Member's then adjusted tax basis in the Member's Interest. A
Member's basis in such Interest will be adjusted for income, gain or loss
allocated (for tax purposes) to such Member for periods prior to the purchase of
such Interest. Cash distributed to a Member in excess of the adjusted tax basis
of such Member's Interest is taxable as a capital gain or ordinary income,
depending on the circumstances. A Member that has its entire Interest purchased
by the Fund may recognize a loss, but only to the extent that the amount of
consideration received from the Fund is less than the Member's then adjusted tax
basis in such Member's Interest.
(b) Not applicable.
ITEM 5. PAST CONTRACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS
WITH RESPECT TO THE ISSUER'S SECURITIES.
The Fund's Prospectus dated July 30, 2002, as supplemented on January
13, 2003 (the "Prospectus"), and the LLC Agreement, which were provided to each
Member in advance of subscribing for Interests, provide that the Fund's Board of
Managers has the discretion to determine whether the Fund will purchase
Interests from Members from time to time pursuant to written tenders. The
Prospectus also states that the Adviser expects that it will recommend to the
Board of Managers that the Fund purchase Interests from Members twice each year,
in June and December. The Fund previously offered to purchase Interests from
Members pursuant to a written tender effective as of June 30, 2003.
The Fund is not aware of any contract, arrangement, understanding or
relationship relating, directly or indirectly, to this Offer (whether or not
legally enforceable) between: (i) the Fund and the Adviser or any Manager or any
person controlling the Fund or controlling the Adviser or any member of the
Board of Managers; and (ii) any person, with respect to Interests. However, the
LLC Agreement provides that the Fund will be dissolved if the Interest of any
Member that has submitted a written request in accordance with the terms of the
LLC Agreement to tender its entire Interest for repurchase by the Fund has not
been repurchased within a period of two years of the request.
ITEM 6. PURPOSES OF THIS TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER OR
AFFILIATE.
(a) The purpose of the Offer is to provide liquidity to Members that
hold Interests, as contemplated by and in accordance with the procedures set
forth in the Prospectus and the LLC Agreement.
(b) Interests that are tendered to the Fund in connection with the
Offer will be retained. The Fund currently expects to accept subscriptions for
Interests on the first day of each month, but is under no obligation to do so.
(c) On October 27, 2003, Bank of America Corporation, the ultimate
parent corporation of the Adviser, and FleetBoston Financial Corporation
announced an agreement to merge, subject to applicable approvals. If the merger
occurs, it is possible that one or more of the material changes described below
may be proposed and/or effected, as appropriate. That being said, none of the
Fund, the Adviser, Alkeon Capital Management, LLC, the sub-adviser of the Fund
(the "Sub-Adviser"), or the Board of Managers currently has any plans, proposals
or negotiations that relate to or would result in: (1) 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 Fund), or the disposition of Interests; (2) an
extraordinary transaction, such as a merger, reorganization or liquidation,
7
involving the Fund; (3) any material change in the present distribution policy
or indebtedness or capitalization of the Fund; (4) any change in the identity of
the Adviser or the Sub-Adviser, or in the management of the Fund including, but
not limited to, any plans or proposals to change any material term of the
investment advisory arrangements with the Adviser; (5) a sale or transfer of a
material amount of assets of the Fund (other than as the Board of Managers
determines may be necessary or appropriate to fund all or a portion of the
purchase price for Interests to be acquired pursuant to the Offer or in
connection with the ordinary portfolio transactions of the Fund); (6) any other
material change in the Fund's structure or business, including any plans or
proposals to make any changes in its fundamental investment policies, as
amended, for which a vote would be required by Section 13 of the 1940 Act; or
(7) any changes in the LLC Agreement or other actions that might impede the
acquisition of control of the Fund by any person. Because Interests are not
traded in any market, Sections (6), (7) and (8) of Regulation M-A ss.
229.1006(c) are not applicable to the Fund.
ITEM 7. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) The Fund expects that the purchase price for Interests acquired
pursuant to the Offer, which will not exceed $12 million (unless the Fund elects
to purchase a greater amount), will be derived from one or more of the following
sources: (i) cash on hand; (ii) the proceeds from the sale or delivery of
securities and portfolio assets held by the Fund; and (iii) possibly borrowings,
as described in paragraph (b), below. The Fund will segregate, with its
custodian, cash or U.S. government securities or other liquid securities equal
to the value of the amount estimated to be paid under any Notes as described
above.
(b) None of the Fund, the Adviser or the Board of Managers has
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 seek to borrow money to finance all or a portion
of the purchase price for Interests from its existing margin facility
established with the Fund's prime broker, Morgan Stanley & Co. Incorporated
("Morgan Stanley") subject to compliance with applicable law. If the Fund
finances any portion of the purchase price in that manner, it will deposit
assets in a special custody account with its custodian, PFPC Trust Company, to
serve as collateral for any amounts so borrowed, and if the Fund were to fail to
repay any such amounts, Morgan Stanley would be entitled to satisfy the Fund's
obligations from the collateral deposited in the special custody account. The
Fund expects that the repayment of any amounts borrowed from Morgan Stanley
would be made from additional funds contributed to the Fund by existing and/or
new Members, or from the proceeds of the sale of securities and portfolio assets
held by the Fund.
(d) Not applicable
ITEM 8. INTEREST IN SECURITIES OF THE ISSUER.
(a) As of October 31, 2003, the Sub-Adviser, which is wholly-owned by
Mr. Panayotis Sparaggis, owns approximately $63,000 (less than 1% of the
outstanding Interests). The Sub-Adviser does not intend to tender all or any
portion of his Interest at this time. In addition, Mr. Sparaggis is a
non-managing member of the Adviser. As of October 31, 2003, the Adviser, BACAP
8
Advisory Partners, LLC, owns approximately $161,000 (less than 1% of the
outstanding Interests) and has no plans to tender in this offer. In addition,
the Adviser may be entitled under the terms of the LLC Agreement to receive an
incentive allocation (if earned and subject to certain limitations), as
specified in the LLC Agreement and described in the Prospectus.
(b) Other than the acceptance of subscriptions for Interests as of
October 1, 2003 and November 1, 2003, there have been no transactions involving
Interests that were effected during the past 60 business days by the Fund, the
Adviser, any Manager or any person controlling the Fund or the Adviser.
ITEM 9. PERSONS/ASSETS RETAINED, EMPLOYED, COMPENSATED OR USED.
No persons have been 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) Reference is made to the following financial statements of the
Fund, which the Fund has prepared and furnished to Members pursuant to Rule
30e-l under the 1940 Act and filed with the Securities and Exchange Commission
pursuant to Rule 30b2-1 under the 1940 Act, and which are incorporated by
reference in their entirety for the purpose of filing this Schedule to:
Unaudited financial statements for the six-month period ended June 30,
2003, previously filed on EDGAR on Form N-CSR on September 8, 2003.
Audited financial statements for the year ended December 31, 2002,
previously filed on EDGAR on Form N-30D on February 28, 2003.
(2) The Fund is not required to and does not file quarterly
unaudited financial statements under the 1934 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.
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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 Members and is incorporated herein by reference:
A. Cover Letter to the 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 Members 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 forth in this statement is true, complete and correct.
BACAP OPPORTUNITY STRATEGY, LLC
By: Board of Managers
By: /s/ KEITH WINN
------------------------------
Name: Keith Winn
Title: President
November 24, 2003
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EXHIBIT INDEX
EXHIBIT
A Cover Letter to the 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 Members in Connection with the Fund's
Acceptance of Tenders of Interests.
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EXHIBIT A
Cover Letter to the Offer to Purchase and Letter of Transmittal
[BACAP Opportunity Strategy, LLC Letterhead]
IF YOU DO NOT WANT TO SELL YOUR LIMITED LIABILITY COMPANY INTERESTS
AT THIS TIME, PLEASE DISREGARD THIS NOTICE.
THIS IS SOLELY A NOTIFICATION OF THE FUND'S TENDER OFFER.
November 24, 2003
Dear BACAP Opportunity Strategy, LLC Member:
We are writing to inform you of important dates relating to a tender
offer by BACAP Opportunity Strategy, LLC (the "Fund"). If you are not interested
in selling your limited liability company interests in the Fund ("Interest" or
"Interests" as the context requires) at this time, please disregard this notice
and take no action.
The tender offer period will begin on November 24, 2003 and end at
12:00 midnight, eastern time, on Wednesday, December 24, 2003. The purpose of
the tender offer is to provide liquidity to members 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 in the enclosed postage-paid envelope
or by fax so that it arrives no later than Wednesday, December 24, 2003. If you
do not wish to tender your Interests, simply disregard this notice. NO ACTION IS
REQUIRED IF YOU DO NOT WISH TO SELL ANY PORTION OF YOUR INTEREST AT THIS TIME.
All tenders of Interests must be received by the Fund's Administrator,
PFPC Inc., either by mail or by fax (if by fax, please deliver an original,
executed copy promptly thereafter) in good order by Wednesday, December 24,
2003.
If you have any questions, please refer to the attached Offer to
Purchase document, which contains additional important information about the
tender offer, or call your investment professional or our Administrator at (888)
697-9661 or (866) 306-0232.
Sincerely,
BACAP Opportunity Strategy, LLC
A-1
EXHIBIT B
Offer to Purchase
BACAP OPPORTUNITY STRATEGY, LLC
101 South Tryon Street
Charlotte, North Carolina 28255
OFFER TO PURCHASE UP TO $12 MILLION OF OUTSTANDING
INTERESTS AT NET ASSET VALUE
DATED NOVEMBER 24, 2003
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, EASTERN TIME, WEDNESDAY, DECEMBER 24, 2003,
UNLESS THE OFFER IS EXTENDED
To the Members of
BACAP OPPORTUNITY STRATEGY, LLC:
BACAP Opportunity Strategy, LLC, a closed-end, non-diversified,
management investment company organized as a Delaware limited liability company
(the "Fund"), is offering to purchase for cash on the terms and conditions set
forth in this offer and the related Letter of Transmittal (which together
constitute the "Offer") up to $12 million of Interests in the Fund or portions
thereof pursuant to tenders by members in the Fund ("Members") at a price equal
to their net asset value as of December 31, 2003, if the Offer expires on
Wednesday, December 24, 2003. (As used in this Offer, the term "Interest" or
"Interests" as the context requires, shall refer to the interests in the Fund
and portions thereof representing beneficial interests in the Fund.) If the Fund
elects to extend the tender period, for the purpose of determining the purchase
price for tendered Interests, the net asset value of such Interests will be
determined at the close of business on a valuation date adjusted to reflect the
extension of the Offer. This Offer is being made to all Members 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 First Amended and Restated Limited Liability Company
Agreement dated as of June 27, 2003 (the "LLC Agreement").
Members should realize that the value of the Interests tendered in this
Offer will likely change between October 31, 2003 (the last time net asset value
was calculated) and December 31, 2003, when the value of the Interests tendered
to the Fund will be determined for purposes of calculating the purchase price of
such Interests. Members tendering their Interests should also note that they
will remain Members with respect to the Interest tendered and accepted for
purchase by the Fund, through December 31, 2003, the valuation date of the Offer
when the net asset value of their Interests is calculated. Any tendering Members
that wish to obtain the estimated net asset value of their Interests should
contact PFPC Inc., at the telephone numbers or address set forth below, Monday
through Friday, except holidays, during normal business hours of 9:00 a.m. to
5:00 p.m. (eastern time).
B-1
Members desiring to tender all or any portion of their Interests in
accordance with the terms of the Offer should complete and sign the attached
Letter of Transmittal and mail or fax it to the Fund in the manner set forth in
Section 4 below.
IMPORTANT
NONE OF THE FUND, ITS ADVISER, ITS SUB-ADVISER OR ITS BOARD OF MANAGERS
MAKES ANY RECOMMENDATION TO ANY MEMBER AS TO WHETHER TO TENDER OR REFRAIN FROM
TENDERING INTERESTS. MEMBERS 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 MEMBER'S INVESTMENT DECISION IS A PERSONAL ONE, BASED ON
ITS OWN FINANCIAL CIRCUMSTANCES, NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY
RECOMMENDATION ON BEHALF OF THE FUND AS TO WHETHER MEMBERS 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.
THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY
STATE SECURITIES COMMISSION HAS PASSED ON THE FAIRNESS OR MERITS OF THIS
TRANSACTION OR ON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN THIS
DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
Questions, requests for assistance and requests for additional copies
of the Offer may be directed to the Fund's service agent:
PFPC Inc.
P.O. Box 220
Claymont, Delaware 19703
Attention: Angela Carn
Phone: (888) 697-9661
(866) 306-0232
Fax: (302) 791-2790
(302) 791-3105
B-2
TABLE OF CONTENTS
1. Background and Purpose of the Offer..................................2
2. Offer to Purchase and Price..........................................3
3. Amount of Tender.....................................................4
4. Procedure for Tenders................................................5
5. Withdrawal Rights....................................................5
6. Purchases and Payment................................................6
7. Certain Conditions of the Offer......................................7
8. Certain Information About the Fund...................................8
9. Certain Federal Income Tax Consequences..............................9
10. Miscellaneous........................................................9
-i-
SUMMARY TERM SHEET
o As stated in the offering documents of BACAP Opportunity Strategy, LLC
(hereinafter "we" or the "Fund"), we will purchase your limited liability
company interests ("Interest" or "Interests" as the context requires) at
their net asset value (that is, the value of the Fund's assets minus its
liabilities, multiplied by the proportionate interest in the Fund you
desire to tender). This offer to purchase Interests (the "Offer") will
remain open until 12:00 midnight, eastern time, on Wednesday, December 24,
2003, unless the Offer is extended.
o The net asset value of the Interests will be calculated for this purpose on
December 31, 2003 (the "Valuation Date"). The Fund reserves the right to
adjust the Valuation 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 its fiscal year ending December 31, 2003, which
the Fund expects will be completed by the end of February 2004, and the
audited net asset value will be used to determine the final amount paid for
tendered Interests.
o You may tender your entire Interest, a portion of your Interest defined as
a specific dollar value or the portion of your Interest above the required
minimum capital account balance subject to the conditions discussed below.
o If you tender your entire Interest, subject to any extension of the Offer,
we will pay you in cash and/or marketable securities (valued in accordance
with the Fund's First Amended and Restated Limited Liability Company
Agreement dated June 27, 2003 (the "LLC Agreement")) no later than January
10, 2003, at least 95% of the unaudited net asset value of your Interest
tendered and accepted by the Fund as of December 31, 2003, less the
incentive allocation payable to BACAP Advisory Partners, LLC, the
investment adviser of the Fund (the "Adviser") on December 31, 2003, if
any. We will owe you the balance, for which we will give you a promissory
note (the "Note") that will be held in the account in which you held your
Interest (or such other account as you may properly designate).
o If you tender only a portion of your Interest, you will be required to
maintain a capital account balance equal to the greater of: (i) $100,000,
net of the amount of the incentive allocation, if any, that is to be
debited from your capital account on the Valuation Date of the Offer (the
"Incentive Allocation") or would be so debited if the Valuation Date were a
day on which an Incentive Allocation, if any, was made (collectively, the
"Tentative Incentive Allocation"); or (ii) the amount of the Tentative
Incentive Allocation, if any. In the case of a partial tender of an
Interest, we will pay the full estimated net asset value of the portion of
the Interest tendered in cash and/or marketable securities no later than
January 10, 2003 subject to any extension of the Offer. We reserve the
right to purchase less than the amount you tender if the amount you tender
would cause your account in the Fund to have a value less than the required
minimum balance. We will pay you from one or more of the following sources:
cash on hand, the proceeds from the sale of and/or delivery of portfolio
securities held by the Fund, or by borrowings.
o Following this summary is a formal notice of our offer to repurchase your
Interests. Our offer remains open to you until 12:00 midnight, eastern
time, on Wednesday, December 24, 2003, the expected expiration date of the
-1-
Offer. Until that time, you have the right to change your mind and withdraw
any tender of your Interest. You will also have the right to withdraw the
tender of your Interest at any time after January 22, 2004, assuming your
Interest has not yet been accepted for repurchase.
o If you would like us to repurchase your Interest or a portion of your
Interest, you should (i) mail the Letter of Transmittal (enclosed with the
Offer), to PFPC Inc. ("PFPC") at P.O. Box 220, Claymont, Delaware 19703,
attention Angela Carn, or (ii) fax it to PFPC at (302) 791-2790 or (302)
791-3105, so that it is received before 12:00 midnight, eastern time, on
Wednesday, December 24, 2003. If you fax the Letter of Transmittal, you
should mail the original Letter of Transmittal to PFPC promptly after you
fax it (although the original does not have to be received before 12:00
midnight, eastern time, on Wednesday, December 24, 2003).
o The value of your Interests will change between October 31, 2003 (the last
time prior to the date of this filing as of which net asset value has been
calculated), and December 31, 2003, the date as of which the value of the
Interests will be determined for purposes of calculating the purchase price
for Interests.
o If you would like to obtain the estimated net asset value of your
Interests, which will be calculated monthly until the expiration date of
the Offer, you may contact PFPC at the telephone numbers or at the address
set forth on page 2, Monday through Friday, except holidays, during normal
business hours of 9:00 a.m. to 5:00 p.m. (eastern time).
o Please note that just as you have the right to withdraw the tender of an
Interest, we have the right to cancel, amend or postpone this Offer at any
time up to and including the acceptance of tenders pursuant to the Offer.
Also realize that although the Offer expires on Wednesday, December 24,
2003, you will remain a Member with respect to the Interest tendered and
accepted for purchase by the Fund through December 31, 2003, when the net
asset value of your Interest is calculated.
1. BACKGROUND AND PURPOSE OF THE OFFER. The purpose of this Offer is to
provide liquidity to Members that hold Interests, as contemplated by and in
accordance with the procedures set forth in the Fund's Prospectus dated July 30,
2002, as supplemented on January 13, 2003 (the "Prospectus"), and the LLC
Agreement. The Prospectus and the LLC Agreement, which were provided to each
Member in advance of subscribing for Interests, provide that the Board of
Managers of the Fund has the discretion to determine whether the Fund will
purchase Interests from Members from time to time pursuant to written tenders.
The Prospectus also states that the Adviser expects that it will recommend to
the Board of Managers that the Fund purchase Interests from Members twice each
year, in June and December. The Fund has not previously offered to purchase
Interests from Members. Because there is no secondary trading market for
Interests and transfers of Interests are prohibited without prior approval of
the Fund, the Board of Managers has determined, after consideration of various
matters, including but not limited to those set forth in the Prospectus, that
the Offer is in the best interests of Members in order to provide liquidity for
Interests as contemplated in the Prospectus and the LLC Agreement.
-2-
The purchase of Interests pursuant to the Offer will have the effect of
increasing the proportionate interest in the Fund of Members that do not tender
Interests. Members that retain their Interests may be subject to increased risks
that may possibly result from the reduction in the Fund's aggregate assets
resulting from payment for the Interests tendered. These risks include the
potential for greater volatility due to decreased diversification. A reduction
in the aggregate assets of the Fund may result in Members 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 Members on January 1, 2004 and thereafter
from time to time.
Interests that are tendered to the Fund in connection with this Offer
will be retained. The Fund currently expects that it will accept subscriptions
for Interests on the first day of each month thereafter, but is under no
obligation to do so.
2. OFFER TO PURCHASE AND PRICE. Subject to the conditions of the Offer,
the Fund will purchase up to $12 million of Interests that are tendered by
Members, and not withdrawn (in accordance with Section 5 below) prior to, 12:00
midnight, eastern time, on Wednesday, December 24, 2003 (this time and date is
called the "Initial Expiration Date"), or any later date as corresponds to any
extension of the Offer. The later of the Initial Expiration Date or the latest
time and date to which the Offer is extended is called the "Expiration Date."
The Fund reserves the right to extend, amend or cancel the Offer as described in
Sections 3 and 7 below. The purchase price of an Interest tendered will be its
net asset value as of the close of the Valuation Date, payable as set forth in
Section 6. The Fund reserves the right to adjust the Valuation Date to
correspond with any extension of the Offer. As of the close of business on
October 31, 2003, the unaudited net asset value of an Interest corresponding to
an initial capital contribution of $100,000 on the following closing dates of
the Fund was as follows:
If you invested $100,000 on the Your Unaudited Net Asset Value
following closing date: as of October 31, 2003 would be:
-------------------------------- -------------------------------
October 1, 2002 $132,355
November 1, 2002 $129,999
December 1, 2002 $124,464
January 1, 2003 $130,955
February 1, 2003 $131,776
March 1, 2003 $130,550
-3-
If you invested $100,000 on the Your Unaudited Net Asset Value
following closing date: as of October 31, 2003 would be:
-------------------------------- -------------------------------
April 1, 2003 $130,984
May 1, 2003 $126,431
June 1, 2003 $116,483
July 1, 2003 $115,212
August 1, 2003 $106,701
September 1, 2003 $103,105
October 1, 2003 $105,163
As of the close of business on October 31, 2003, there was
approximately $49,527,000 outstanding in capital of the Fund held in Interests
(based on the unaudited net asset value of such Interests). Members may obtain
monthly estimated net asset value information until the expiration date of the
Offer by contacting PFPC at the telephone numbers or address set forth on page
2, Monday through Friday, except holidays, during normal business hours of 9:00
a.m. to 5:00 p.m. (eastern time).
3. AMOUNT OF TENDER. Subject to the limitations set forth below,
Members may tender their entire Interest, a portion of their Interest defined as
a specific dollar value or the portion of their Interest above the required
minimum capital account balance, as described below. A Member that tenders for
repurchase only a portion of its Interest will be required to maintain a capital
account balance equal to the greater of: (i) $100,000, net of the amount of the
Incentive Allocation, if any, that is to be debited from the capital account of
the Member on the Valuation Date of the Offer or would be so debited if the
Valuation Date were a day on which an Incentive Allocation was made
(collectively, the "Tentative Incentive Allocation"); or (ii) the amount of the
Tentative Incentive Allocation, if any. If a Member tenders an amount that would
cause the Member's capital account balance to fall below the required minimum,
the Fund reserves the right to reduce the amount to be purchased from such
Member so that the required minimum balance is maintained. The Offer is being
made to all Members 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 5 below is less than or equal to $12
million (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 7 below. If more than $12 million of Interests
are duly tendered to the Fund prior to the Expiration Date and not withdrawn
pursuant to Section 5 below, the Fund will in its sole discretion either: (a)
accept additional Interests in accordance with the terms of Rule 13e-4(f)(1)(ii)
under the Securities Exchange Act of 1934, as amended; (b) extend the Offer, if
-4-
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 on or before the Expiration 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 Section 7 below.
4. PROCEDURE FOR TENDERS. Members wishing to tender Interests pursuant
to the Offer should mail or fax a completed and executed Letter of Transmittal
to PFPC, to the attention of Angela Carn, at the address or to one of the fax
numbers set forth on page 2. The completed and executed Letter of Transmittal
must be received by PFPC, either by mail or by fax, no later than the Expiration
Date.
The Fund recommends that all documents be submitted to PFPC via
certified mail, return receipt requested, or by facsimile transmission. A Member
choosing to fax a Letter of Transmittal to PFPC must also send or deliver the
original completed and executed Letter of Transmittal to PFPC promptly
thereafter. Members wishing to confirm receipt of a Letter of Transmittal may
contact PFPC at the address or telephone numbers set forth on page 2. The method
of delivery of any documents is at the election and complete risk of the Member
tendering an Interest including, but not limited to, the failure of PFPC to
receive any Letter of Transmittal or other document submitted by facsimile
transmission. All questions as to the validity, form, eligibility (including
time of receipt) and acceptance of tenders will be determined by the Fund, in
its sole discretion, and such determination shall be final and binding.
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 Member, 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 shall 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 Adviser, Alkeon Capital Management, LLC, the sub-adviser of the Fund
(the "Sub-Adviser") or the Board of Managers shall be obligated to give notice
of any defects or irregularities in tenders, nor shall any of them incur any
liability for failure to give such notice.
5. WITHDRAWAL RIGHTS. Any Member tendering an Interest pursuant to this
Offer may withdraw its tender at any time prior to or on the Expiration Date and
at any time after January 22, 2004, assuming such Member's Interest has not yet
been accepted for purchase by the Fund. To be effective, any notice of
withdrawal of a tender must be timely received by PFPC at the address or at one
of the fax numbers set forth on page 2. A form to give notice of withdrawal of a
tender is available by calling PFPC at the telephone numbers set forth on page
2. All questions as to the form and validity (including time of receipt) of
notices of withdrawal of a tender 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. However, withdrawn Interests may be tendered again prior
to the Expiration Date by following the procedures described in Section 4.
-5-
6. PURCHASES AND PAYMENT. For purposes of the Offer, the Fund will be
deemed to have accepted (and thereby purchased) Interests that are tendered as
if, and when, it gives written notice to the tendering Member of its election to
purchase the Member's Interest.
For a Member that tenders its entire Interest, payment of the purchase
price will consist of: (1) cash and/or marketable securities (valued in
accordance with the LLC Agreement) in an aggregate amount equal to at least 95%
of the unaudited net asset value of Interests tendered and accepted by the Fund,
determined as of the Valuation Date payable within ten calendar days after the
Valuation Date (the "95% Cash Payment"), in the manner set forth below; and (2)
a Note entitling the holder thereof to a contingent payment equal to the excess,
if any, of (a) the net asset value of the Interests tendered by the Member and
accepted by the Fund as of the Valuation Date, determined based on the audited
financial statements of the Fund for the fiscal year ended December 31, 2003,
over (b) the 95% Cash Payment. The Note will be delivered to the tendering
Member in the manner set forth below within ten calendar days after the
Valuation Date and will not be transferable.
The Note will be payable in cash (in the manner set forth below) within
ten calendar days after completion of the audit of the financial statements of
the Fund for the fiscal year ended December 31, 2003. It is anticipated that the
audit of the Fund's financial statements for the fiscal year ended December 31,
2003 will be completed by no later than 60 days after the end of the year. Any
amounts payable under the Note will not include interest. Although the Fund has
retained the option to pay all or a portion of the purchase price by
distributing marketable securities, the purchase price will be paid entirely in
cash except in the unlikely event that the Board of Managers of the Fund
determines that the distribution of securities is necessary to avoid or mitigate
any adverse effect of the Offer on the remaining Members.
A Member that tenders only a portion of its Interest (subject to
maintenance of the required minimum capital account balance described in Section
3, above) will receive cash and/or marketable securities in an aggregate amount
equal to 100% of the estimated unaudited net asset value of Interests tendered
and accepted for purchase by the Fund, determined as of the Valuation Date (the
"100% Cash Payment") payable within ten calendar days after the Valuation Date.
Both the 95% Cash Payment and the 100% Cash Payment (together, the
"Cash Payment") will be made by wire transfer directly to the account in which
the tendering Member held its Interest or such other account as the tendering
Member may properly designate. Cash Payments wired directly to such accounts
will be subject upon withdrawal from the account to any fees that the
institution at which the account is held would customarily assess upon the
withdrawal of cash from the account.
The Note will be deposited directly to the account in which the
tendering Member held its Interest or such other account as the tendering Member
may properly designate. Any contingent payment due pursuant to the Note will
also be deposited directly to the account in which the tendering Member held its
interest or such other account as the tendering Member may properly designate
and will be subject upon withdrawal from the account to any fees that the
institution at which the account is held would customarily assess upon the
withdrawal of cash from the account.
-6-
The Fund expects that the purchase price for Interests acquired
pursuant to the Offer, which will not exceed $12 million (unless the Fund elects
to purchase a greater amount), will be derived from: (a) cash on hand; (b) the
proceeds of the sale or delivery of securities and portfolio assets held by the
Fund; and/or (c) possibly borrowings, as described below. The Fund will
segregate, with its custodian, cash or U.S. government securities or other
liquid securities equal to the value of the amount estimated to be paid under
any Note as described above. None of the Fund, the Adviser, the Sub-Adviser or
the Board of Managers, has 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 borrow money to
finance any portion of the purchase price from its existing margin facility
established with the Fund's prime broker, Morgan Stanley & Co. Incorporated
("Morgan Stanley"), subject to compliance with applicable law. If the Fund
finances any portion of the purchase price in that manner, it will deposit
assets in a special custody account with its custodian, PFPC Trust Company, to
serve as collateral for any amounts so borrowed, and if the Fund were to fail to
repay any such amounts, Morgan Stanley would be entitled to satisfy the Fund's
obligations from the collateral deposited in the special custody account. The
Fund expects that the repayment of any amounts borrowed from Morgan Stanley will
be made from additional funds contributed to the Fund by existing and/or new
Members, or from the proceeds of the sale of securities and portfolio assets
held by the Fund.
7. CERTAIN CONDITIONS OF THE OFFER. 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 Members of such extension. The purchase price of an
Interest tendered by any Member will be the net asset value thereof as of the
close of business on December 31, 2003, if the Offer expires on the Initial
Expiration Date, and otherwise the net asset value thereof as of the close of
business on any later date as corresponds to any extension of the Offer. 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) cancel the Offer in the circumstances set forth 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) 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 Members.
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 Managers, 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 the State of North
Carolina 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
-7-
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
commencement of the Offer, or (vii) other event or condition that would have a
material adverse effect on the Fund or its Members if Interests tendered
pursuant to the Offer were purchased; or (c) the Board of Managers determines
that it is not in the best interest of the Fund to purchase Interests pursuant
to the Offer. However, there can be no assurance that the Fund will exercise its
right to extend, amend or cancel the Offer or to postpone acceptance of tenders
pursuant to the Offer.
8. 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, and Interests are registered
under the Securities Act of 1933, as amended. It is organized as a Delaware
limited liability company. The principal office of the Fund is located at 101
South Tryon Street, Charlotte, North Carolina 28255 and it may be reached at
(888) 697-9661 or (866) 306-0232. Interests are not traded on any established
trading market and are subject to strict restrictions on transferability
pursuant to the LLC Agreement.
On October 27, 2003, Bank of America Corporation, the ultimate parent
corporation of the Adviser, and FleetBoston Financial Corporation announced an
agreement to merge, subject to applicable approvals. If the merger occurs, it is
possible that one or more of the material changes described below may be
proposed and/or effected, as appropriate. That being said, the Fund does not
have any plans or proposals that relate to or would result in: (a) 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 Fund) or the disposition of
Interests; (b) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Fund; (c) any material change in
the present distribution policy or indebtedness or capitalization of the Fund;
(d) any change in the identity of the investment adviser or sub-adviser of the
Fund, or in the management of the Fund, including, but not limited to, any plans
or proposals to change the number or the term of the members of the Board of
Managers, to fill any existing vacancy on the Board of Managers or to change any
material term of the investment advisory arrangement with the Adviser; (e) a
sale or transfer of a material amount of assets of the Fund (other than as the
Board of Managers determines may be necessary or appropriate to fund any portion
of the purchase price for Interests acquired pursuant to this Offer or in
connection with ordinary portfolio transactions of the Fund); (f) any other
material change in the Fund's structure or business, including any plans or
proposals to make any changes in its fundamental investment policies, as
amended, for which a vote would be required by Section 13 of the 1940 Act; or
(g) any changes in the LLC Agreement or other actions that may impede the
acquisition of control of the Fund by any person.
There have been no transactions involving the Interests that were
effected during the past 60 business days by the Fund, the Adviser, any member
of the Board of Managers or any person controlling the Fund or the Adviser or
controlling any Manager. As of October 31, 2003, the Sub-Adviser, which is
wholly-owned by Mr. Panayotis Sparaggis, owns approximately $63,000 (less than
1% of the outstanding Interests). The Sub-Adviser does not intend to tender all
or any portion of his Interest at this time. In addition, Mr. Sparaggis is a
non-managing member of the Adviser. As of October 31, 2003, the Adviser, BACAP
-8-
Advisory Partners, LLC, owns approximately $161,000 (less than 1% of the
outstanding Interests) and has no plans to tender in this offer. In addition,
the Adviser may be entitled under the terms of the LLC Agreement to receive an
incentive allocation (if earned and subject to certain limitations), as
specified in the LLC Agreement and described in the Prospectus.
9. 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 from Members pursuant to the Offer. Members 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.
In general, a Member from which an Interest is purchased by the Fund
will be treated as receiving a distribution from the Fund. Such Member generally
will not recognize income or gain as a result of the purchase, except to the
extent (if any) that the amount of consideration received by the Member exceeds
such Member's then adjusted tax basis in the Member's Interest. A Member's basis
in such Member's Interest will be reduced (but not below zero) by the amount of
consideration received by the Member from the Fund in connection with the
purchase of such Interest. A Member's basis in such Member's Interest will be
adjusted for income, gain or loss allocated (for tax purposes) to such Member
for periods prior to the purchase of such Interest. Cash distributed to a Member
in excess of the adjusted tax basis of such Member's Interest is taxable as
capital gain or ordinary income, depending on the circumstances. A Member that
has its entire Interest purchased by the Fund may recognize a loss, but only to
the extent that the amount of consideration received from the Fund is less than
the Member's then adjusted tax basis in such Member's Interest.
10. MISCELLANEOUS. The Offer is not being made to, nor will tenders be
accepted from, Members in any jurisdiction in which the Offer or its acceptance
would not comply with the securities or Blue Sky 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 Members 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 Securities and Exchange Commission, which includes certain information
relating to the Offer summarized herein. A free copy of such statement may be
obtained from the Fund by contacting PFPC at the address and telephone numbers
set forth on page 2 or from the Securities and Exchange Commission's internet
web site, http://www.sec.gov. For a fee, a copy may be obtained from the public
reference office of the Securities and Exchange Commission at Judiciary Plaza,
450 Fifth Street, N.W., Washington, DC 20549.
-9-
ANNEX A
Financial Statements
The following financial statements of the Fund are incorporated herein
by reference.
Unaudited financial statements for the six-month period ended June 30,
2003, previously filed on EDGAR on Form N-CSR on September 8, 2003.
Audited financial statements for the four month period ended December
31, 2002, previously filed on EDGAR on Form N-30D on February 28,
2003.
Annex A-1
EXHIBIT C
LETTER OF TRANSMITTAL
Regarding Interests in
BACAP OPPORTUNITY STRATEGY, LLC
Tendered Pursuant to the Offer to Purchase
Dated November 24, 2003
--------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE
AT, AND THIS LETTER OF TRANSMITTAL MUST BE
RECEIVED BY THE FUND BY, 12:00 MIDNIGHT, EASTERN TIME,
ON WEDNESDAY, DECEMBER 24, 2003, UNLESS THE OFFER IS EXTENDED.
--------------------------------------------------------------------
COMPLETE THIS LETTER OF TRANSMITTAL AND RETURN BY MAIL OR FAX TO:
PFPC Inc.
P.O. Box 220
Claymont, Delaware 19703
Attn: Angela Carn
For additional information:
Phone: (888) 697-9661
(866) 306-0232
Fax: (302) 791-2790
(302) 791-3105
C-1
Ladies and Gentlemen:
The undersigned hereby tenders to BACAP Opportunity Strategy, LLC (the
"Fund"), a closed-end, non-diversified, management investment company organized
under the laws of the State of Delaware, the limited liability company interest
in the Fund ("Interest" or "Interests" as the context requires) or portion
thereof held by the undersigned, described and specified below, on the terms and
conditions set forth in the offer to purchase, dated November 24, 2003 ("Offer
to Purchase"), receipt of which is hereby acknowledged, and in this Letter of
Transmittal (which together constitute the "Offer"). THE TENDER AND THIS LETTER
OF TRANSMITTAL ARE SUBJECT TO ALL THE TERMS AND CONDITIONS SET FORTH IN THE
OFFER TO PURCHASE, INCLUDING, BUT NOT LIMITED TO, THE ABSOLUTE RIGHT OF THE FUND
TO REJECT ANY AND ALL TENDERS DETERMINED BY THE FUND, IN ITS SOLE DISCRETION,
NOT TO BE IN THE APPROPRIATE FORM.
The undersigned hereby sells to the Fund the Interest or portion
thereof tendered hereby pursuant to the Offer. The undersigned hereby warrants
that the undersigned has full authority to sell the Interest or portion thereof
tendered hereby and that the Fund will acquire good title thereto, free and
clear of all liens, charges, encumbrances, conditional sales agreements or other
obligations relating to the sale thereof, and not subject to any adverse claim,
when and to the extent the same are purchased by it. 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 forth
in the Offer, the Fund may not be required to purchase any of the Interests in
the Fund or portions thereof tendered hereby.
Payment of the purchase price for the Interest or portion thereof
tendered by the undersigned will be made by wire transfer of the funds to the
account in which the undersigned held its Interest or such other account as the
undersigned may properly designate, as described in Section 6 of the Offer. The
undersigned hereby represents and warrants that the undersigned understands that
upon a withdrawal of such cash payment from the account, the institution at
which the account is held may subject such withdrawal to any fees that it would
customarily assess upon the withdrawal of cash from such account. (Any payment
in the form of marketable securities would be made by means of special
arrangement with the tendering member in the sole discretion of the Managers of
the Fund.)
A promissory note reflecting the contingent payment portion of the
purchase price, if any, as described in Section 6 of the Offer to Purchase, will
be deposited directly to the account in which the undersigned held its Interest
or such other account as the undersigned may properly designate. (Any contingent
payment of cash due pursuant to the Note will also be deposited directly to such
account and, upon a withdrawal of this cash from the account, the institution at
which the account is held may impose any fees that would customarily be assessed
upon the withdrawal of cash from the account.) The undersigned recognizes that
the amount of the purchase price for Interests will be based on the unaudited
net asset value of the Fund as of December 31, 2003, and that the contingent
payment portion of the purchase price, if any, will be determined upon
C-2
completion of the audit of the Fund's financial statements for the fiscal year
ended December 31, 2003, which is anticipated to be completed not later than 60
days after December 31, 2003. The payment of the contingent obligation will be
made within ten calendar days after such 60 day period.
All authority herein conferred or agreed to be conferred shall survive
the death or incapacity of the undersigned and the obligation of the undersigned
hereunder shall be binding on the heirs, personal representatives, successors
and assigns of the undersigned. Except as stated in Section 5 of the Offer to
Purchase, this tender is irrevocable.
C-3
PLEASE FAX OR MAIL IN THE ENCLOSED POSTAGE PAID ENVELOPE TO:
PFPC INC., ATTN: ANGELA CARN; P.O. BOX 220, CLAYMONT, DELAWARE 19703
FAX: (302) 791-2790 OR (302) 791-3105
FOR ADDITIONAL INFORMATION: PHONE: (888) 697-9661 OR (866) 306-0232
PART 1. MEMBER INFORMATION:
Name of Member:
--------------------------------------------------------
Social Security No.
or Taxpayer
Identification No.:
--------------------------
Telephone Number: ( )
--------------------------
PART 2. AMOUNT OF INTEREST IN THE FUND BEING TENDERED:
/ / Entire limited liability company interest.
/ / Portion of limited liability company interest expressed as a
specific dollar value. (A minimum interest with a value greater
than: (a) $100,000, net of the incentive allocation, if any, or
net of the tentative incentive allocation, if any; or (b) the
tentative incentive allocation, if any, must be maintained (the
"Required Minimum Balance").)*
$-----------
/ / Portion of limited liability company interest in excess of the
Required Minimum Balance.
*The undersigned understands and agrees that if the undersigned
tenders an amount that would cause the undersigned's
capitalaccount balance to fall below the Required Minimum
Balance, the Fund may reduce the amount to be purchased from the
undersigned so that the Required Minimum Balance is maintained.
PART 3. PAYMENT.
CASH PAYMENT
------------
Cash payments will be wire transferred directly to the account in
which the undersigned held its Interest or such other account as the
undersigned may properly designate. The undersigned hereby represents
and warrants that the undersigned understands that, for cash payments
wired directly to such account, upon a withdrawal of this cash payment
from the account, the institution at which the account is held may
impose any fees that would customarily be assessed upon the withdrawal
of cash from the account. (Any payment in the form of marketable
securities would be made by means of special arrangements with the
undersigned.)
C-4
PROMISSORY NOTE
---------------
The promissory note reflecting the contingent payment portion of the
purchase price, if any, will be deposited directly to the account in
which the undersigned held its Interest or such other account as the
undersigned may properly designate. The undersigned hereby represents
and warrants that the undersigned understands that any payment of cash
due pursuant to the Note will also be deposited directly to such
account, and, upon a withdrawal of this cash from the account, the
institution at which the account is held may impose any fees that
would customarily be assessed upon the withdrawal of cash from the
account.
C-5
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 INVESTOR CERTIFICATION)
- -------------------------------- ---------------------------------
Print Name of Investor Signature
(SIGNATURE OF OWNER(S)
EXACTLY AS APPEARED
ON INVESTOR CERTIFICATION)
- -------------------------------- ---------------------------------
Joint Tenant Signature if necessary Print Name of Signatory and Title
(SIGNATURE OF OWNER(S) EXACTLY AS
APPEARED ON INVESTOR CERTIFICATION)
- -------------------------------- ---------------------------------
Print Name of Joint Tenant Co-signatory if necessary
(SIGNATURE OF OWNER(S)
EXACTLY AS APPEARED
ON INVESTOR CERTIFICATION)
---------------------------------
Print Name and Title of Co-signatory
Date: ___________________
C-1
EXHIBIT D
Form of Notice of Withdrawal of Tender
(To be provided only to members that call and request the form.)
NOTICE OF WITHDRAWAL OF TENDER
Regarding Interests in
BACAP OPPORTUNITY STRATEGY, LLC
Tendered Pursuant to the Offer to Purchase
Dated November 24, 2003
----------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE
AT, AND THIS NOTICE OF WITHDRAWAL MUST BE
RECEIVED BY THE FUND BY, 12:00 MIDNIGHT, EASTERN TIME,
ON WEDNESDAY, DECEMBER 24, 2003, UNLESS THE OFFER IS EXTENDED.
----------------------------------------------------------------------
COMPLETE THIS NOTICE OF WITHDRAWAL AND RETURN BY MAIL OR FAX TO:
PFPC Inc.
Attn: Angela Carn
P.O. Box 220
Claymont, Delaware 19703
Fax: (302) 791-2790
(302) 791-3105
For additional information:
Phone: (888) 697-9661 or (866) 306-0232
D-1
Ladies and Gentlemen:
The undersigned wishes to withdraw the tender of its limited liability
company interest in BACAP OPPORTUNITY STRATEGY, LLC (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
_____________________.
This tender was in the amount of:
/ / Entire limited liability company interest.
/ / Portion of limited liability company interest expressed as a
specific dollar value. $___________
/ / Portion of limited liability company interest in excess of
the Required Minimum Balance.
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 the 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 INVESTOR CERTIFICATION)
- ------------------------------------ ------------------------------------
Print Name of Investor Signature
(SIGNATURE OF OWNER(S)
EXACTLY AS APPEARED
ON INVESTOR CERTIFICATION)
- ------------------------------------ ------------------------------------
Joint Tenant Signature if necessary Print Name of Signatory and Title
(SIGNATURE OF OWNER(S)
EXACTLY AS APPEARED
ON INVESTOR CERTIFICATION)
D-1
- -------------------------------------- --------------------------------------
Print Name of Joint Tenant Co-signatory if necessary
(SIGNATURE OF OWNER(S)
EXACTLY AS APPEARED
ON INVESTOR CERTIFICATION)
------------------------------------
Print Name and Title of Co-signatory
Date:_____________
D-3
EXHIBIT E
Forms of Letters from the Fund
to Members in Connection with the Fund's Acceptance of Tenders of Interests
THIS LETTER IS BEING SENT TO YOU IF YOU TENDERED YOUR ENTIRE INTEREST IN THE
FUND.
January 10, 2003
Dear Member:
BACAP OPPORTUNITY STRATEGY, LLC (the "Fund") has received and accepted
for purchase your tender of a limited liability company interest in the Fund.
Enclosed is a statement showing the breakdown of your capital withdrawal
resulting from our purchase of your interest in the Fund and the manner in which
payment of the purchase price is being distributed, in accordance with the terms
of the tender offer.
Because you have tendered and the Fund has purchased your entire
investment, you have been paid at least 95% of the purchase price based on the
unaudited net asset value of the Fund as of December 31, 2003, in accordance
with the terms of the tender offer. A cash payment in this amount has been wired
directly into your account.
The balance of the purchase price will be paid to you after the
completion of the Fund's 2003 year-end audit and is subject to year-end audit
adjustment. This amount will be paid within ten calendar days after the
conclusion of the year-end audit, or on such earlier date as the Fund's Board of
Managers may determine, according to the terms of the tender offer. We expect
the audit to be completed by the end of February 2004.
Should you have any questions, please feel free to contact the Fund's
Administrator, PFPC Inc., at (888) 697-9661 or (866) 306-0232.
Sincerely,
BACAP OPPORTUNITY STRATEGY, LLC
Enclosure
E-1
THIS LETTER IS BEING SENT TO YOU IF YOU TENDERED A PORTION OF YOUR INTEREST IN
THE FUND.
January 10, 2003
Dear Member:
BACAP Opportunity Strategy, LLC (the "Fund") has received and accepted
for purchase your tender of a portion of your limited liability company interest
in the Fund. Enclosed is a statement showing the breakdown of your capital
withdrawal resulting from our purchase of a portion of your interest.
Since you have tendered only a portion of your investment, you have
been paid 100% of the amount requested in cash, provided that your account
retains the required minimum balance, in accordance with the terms of the tender
offer. The funds were wired directly into your account. You remain a member of
the Fund with respect to the portion of your interest in the Fund that you did
not tender.
Should you have any questions, please feel free to contact the Fund's
Administrator, PFPC Inc., at (888) 697-9661 or (866) 306-0232.
Sincerely,
BACAP OPPORTUNITY STRATEGY, LLC
Enclosure
E-2
PROMISSORY NOTE
Pursuant to the Offer to Purchase (the "Offer") up to $12 million of
outstanding interests of the Fund (as defined below) or portions thereof based
on the unaudited net asset value as of December 31, 2003 or such later date as
corresponds to any extension of the Offer made by BACAP Opportunity Strategy,
LLC (the "Fund") with respect to limited liability company interests in the Fund
("Interest" or "Interests" as the context requires), the Fund hereby promises to
pay, in the manner set forth below, to the person identified below as the payee
(the "Payee") an amount equal to the excess, if any, of (a) the net asset value
of the Interests tendered by the Payee as of December 31, 2003, determined based
on the audited 2003 financial statements of the Fund in accordance with the
asset valuation policy of the Fund, over (b) the Cash Payment to the Payee;
PROVIDED, HOWEVER, that if the Fund's Board of Managers determines that payment
of all or a portion of the purchase price by a distribution of marketable
securities is necessary to avoid or mitigate any adverse effect of the Offer on
the remaining members of the Fund, then such payment shall be made by
distributing such marketable securities, all as more fully described in the
Offer.
This note shall be due and payable within ten calendar days after the
completion of the audit of the Fund's financial statements for the fiscal year
ended 2003.
The amount payable by the Fund under this note shall not include
interest.
Payment of this note shall be made by wire transfer to the account in
which the Payee held its Interest or such other account as the undersigned may
properly designate.
This note may not be pledged, assigned or otherwise transferred by the
Payee.
This note shall be construed according to and governed by the laws of
the State of North Carolina without giving effect to the conflict of laws
principles thereof.
Any capitalized term used herein but not defined shall have the
meaning ascribed to it in the Offer.
Payee: ___________________
BACAP OPPORTUNITY STRATEGY, LLC
By:
-----------------------------------
Keith Winn
President