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
EXCELSIOR ABSOLUTE RETURN FUND OF FUNDS MASTER FUND, LLC
(Name of Issuer)
EXCELSIOR ABSOLUTE RETURN FUND OF FUNDS MASTER FUND, LLC
(Name of Person(s) Filing Statement)
LIMITED LIABILITY COMPANY INTERESTS
(Title of Class of Securities)
N/A
(CUSIP Number of Class of Securities)
DOUGLAS A. LINDGREN
Excelsior Absolute Return Fund of Funds Master Fund, LLC
225 High Ridge Road
Stamford, CT 06905
(203) 352-4497
(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
April 14, 2005
(Date Tender Offer First Published,
Sent or Given to Security Holders)
CALCULATION OF FILING FEE
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Transaction Valuation: $25,000,000 (a) Amount of Filing Fee: $2,942.50 (b)
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(a) Calculated as the aggregate maximum purchase price for Interests.
(b) Calculated at $117.70 per million 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.
|X| issuer tender offer subject to Rule 13e-4.
|_| going-private transaction subject to Rule 13e-3.
|_| amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the results
of the tender offer:
|_|
ITEM 1. SUMMARY TERM SHEET.
As stated in the offering documents of Excelsior Absolute Return
Fund of Funds Master Fund, 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, May 11, 2005, unless the Offer is extended. The net
asset value of the Interests will be calculated for this purpose on June 30,
2005 or, if the Offer is extended, on the last business day of the month in
which the Offer expires (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 Interests as of June 30,
2005, during the Fund's audit for its fiscal year ending March 31, 2006, which
the Fund expects will be completed by the end of May 2006.
This June 30, 2005 net asset value, as reviewed, 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 (or a portion of its Interest) and the Fund accepts that
Interest for repurchase, the Fund will give the Member a non-interest bearing,
non-transferable promissory note (the "Note") entitling the Member to receive an
amount equal to the net asset value of the Interest tendered (valued in
accordance with the Fund's Limited Liability Company Agreement dated September
2, 2003 (the "LLC Agreement")) determined as of June 30, 2005 (or if the Offer
is extended, the net asset value determined on the Valuation Date). The Note
will be held in a special custody account with PFPC Trust Company (PFPC Trust
Company, together with its affiliated banks, "PFPC").
If a Member tenders its entire Interest, the Note will entitle the
Member to receive an initial payment in cash and/or marketable securities
(valued in accordance with the LLC Agreement) equal to at least 95% of the
unaudited net asset value of the Interest tendered by the Member that is
accepted for purchase by the Fund (the "Initial Payment") and will be paid to
the Member's account with PFPC or mailed to the Member if the Member does not
have a PFPC account, within 30 calendar days after the Valuation Date or, if the
Fund has requested withdrawals of its capital from any investment funds in order
to finance the purchase of Interests, within ten business days after the Fund
has received at least 95% of the aggregate amount withdrawn by the Fund from
such investment funds.
The Note will also entitle the Member to receive a contingent
payment (the "Contingent Payment") equal to the excess, if any, of (a) the net
asset value of the Interest tendered by the Member and accepted by the Fund for
repurchase, determined as of the Valuation Date, as it may be adjusted based on
the next annual audit of the Fund's March 31, 2006, financial statements, over
(b) the Initial Payment. The Fund will deposit the aggregate amount of the
Contingent Payments in a separate, interest bearing account and will pay any
interest actually earned thereon PRO RATA to the Members whose Interests have
been repurchased. The Contingent Payment (plus any interest earned) will be paid
within ten calendar days after the completion of the Fund's annual audit. The
Contingent Payment will also be deposited into the tendering Member's account at
PFPC or mailed to the Member if the Member does not have a PFPC account.
A Member that tenders for purchase only a portion of such Member's
Interest will receive a Note that will entitle the Member to a payment in cash
and/or marketable securities (valued in accordance with the LLC Agreement) equal
to 100% of the net asset value of the Interest tendered by the Member that is
accepted for purchase by the Fund. Payment pursuant to the Note will be made to
the Member's account at PFPC or mail to the Member if the Member does not have a
PFPC account, within 30 calendar days after the Valuation Date or, if the Fund
has requested withdrawals of its capital from any investment funds in order to
finance the purchase of Interests, within ten business days after the Fund has
received at least 95% of the aggregate amount withdrawn by the Fund from such
investment funds.
A Member that tenders for purchase only a portion of such Member's
Interest must tender a minimum of $25,000 and will be required to maintain a
capital account balance equal to $100,000 or more.
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The Fund reserves the right to purchase less than the amount
tendered by a Member if the purchase would cause the Member's capital account in
the Fund to have a value less than the required minimum balance or if the total
amount tendered by Members is more than $25 million. If the Fund accepts the
tender of the Member's entire Interest or a portion of such Member's Interest
for repurchase, the Fund will make payment for Interests it purchases from one
or more of the following sources: cash on hand; withdrawals of capital from
investment funds in which the Fund has invested; proceeds from the sale of
securities and portfolio assets held by the Fund; and/or borrowings (which the
Fund does not currently intend to do).
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, Wednesday, May 11, 2005, 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 Thursday, June 9, 2005, 40
business days from the commencement of the Offer, assuming their Interest has
not been accepted for purchase by the Fund on or before that date.
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 U.S. Trust Hedge Fund
Management, Inc., the investment adviser of the Fund (the "Adviser"), 225 High
Ridge Road, Stamford, CT 06905, attention Kathleen Flores, or (ii) fax it to
U.S. Trust Hedge Fund Management, Inc. at (203) 352-4456, so that it is received
before 12:00 midnight, Eastern Time, on Wednesday, May 11, 2005. If the Member
chooses to fax the Letter of Transmittal, it should mail the original Letter of
Transmittal to the Adviser promptly after it is faxed (although the original
does not have to be received before 12:00 midnight, Eastern Time, on Wednesday,
May 11, 2005). Of course, the value of Interests will change between March 31,
2005 (the last time prior to the date of this filing as of which net asset value
has been calculated) and June 30, 2005, the date as of which the value of
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 calculates monthly based on the information the Fund receives
from the managers of the investment funds in which it invests, by contacting the
Adviser at (203) 352-4497 or at the address listed 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 before 12:00 midnight, Eastern Time, on Wednesday, May 11,
2005. Also realize that although the Offer expires on May 11, 2005, a Member
that tenders its Interest will remain a Member with respect to the Interest
tendered and accepted for purchase by the Fund through June 30, 2005, when the
net asset value of the Member's Interest tendered to the Fund for repurchase is
calculated.
ITEM 2. ISSUER INFORMATION.
(a) The name of the issuer is Excelsior Absolute Return Fund of
Funds Master Fund, 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. It is organized as a Delaware limited liability
company. The principal executive office of the Fund is located at 225 High Ridge
Road, Stamford, CT 06905 and the telephone number is (203) 352-4497.
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(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 Members pursuant to the Offer.) As of the close of business on March
31, 2005, there was approximately $251,792,560 outstanding in capital of the
Fund, represented by Interests. Subject to the conditions set forth in the
Offer, the Fund will purchase up to $25 million of Interests that are tendered
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 LLC Agreement.
ITEM 3. IDENTITY AND BACKGROUND OF FILING PERSON.
(a) The name of the filing person is Excelsior Absolute Return Fund
of Funds Master Fund, LLC. The Fund's principal executive office is located at
225 High Ridge Road, Stamford, CT 06905 and the telephone number is (203)
352-4497. The investment adviser of the Fund is U.S. Trust Hedge Fund
Management, Inc. The principal executive office of U.S. Trust Hedge Fund
Management, Inc. is located at 225 High Ridge Road, Stamford, CT 06905, and its
telephone number is (203) 352-4497. The Fund's managers ("Manager(s)" or "Board
of Managers" as the context requires) are Virginia Breen, Jonathan B. Bulkeley,
Douglas A. Lindgren and Thomas F. McDevitt. The Managers' address is c/o
Excelsior Absolute Return Fund of Funds Master Fund, LLC, 225 High Ridge Road,
Stamford, CT 06905.
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 $25 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, May 11, 2005, (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 repurchase will be their net asset value, determined as of the
Valuation Date or, if the Offer is extended, on the last business day of the
month in which the Offer expires.
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. Each Member that
tenders its entire Interest or a portion thereof that is accepted for purchase
will be given a Note within ten calendar days of the acceptance of the Member's
Interest for repurchase. The Note will be held for the Members in a special
custody account with PFPC. The Note will entitle the Member to be paid an amount
equal to the value, determined as of the Valuation Date, of the Interest or
portion thereof being purchased (subject to adjustment upon completion of the
next annual audit of the Fund's financial statements). This amount will be the
value of the Member's capital account (or the portion thereof being purchased)
determined as of the Valuation Date and will be based on the net asset value of
the Fund's assets determined as of that date, after giving effect to all
allocations to be made as of that date.
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If a Member tenders its entire Interest, the Note
will entitle the Member to receive an Initial Payment. Payment of this amount
will be made within 30 calendar days after the Valuation Date or, if the Fund
has requested withdrawals of its capital from any investment funds in order to
finance the purchase of Interests, within ten business days after the Fund has
received at least 95% of the aggregate amount withdrawn by the Fund from such
investment funds. The Note will also entitle a Member to receive a Contingent
Payment equal to the excess, if any, of (a) the net asset value of the Interest
tendered by the Member and accepted by the Fund for purchase as of the Valuation
Date, as it may be adjusted based on the annual audit of the Fund's March 31,
2006, financial statements, over (b) the Initial Payment. The Fund will deposit
the aggregate amount of the Contingent Payments in a separate, interest bearing
account and will pay any interest actually earned thereon PRO RATA to the
Members whose Interests have been repurchased. The Contingent Payment (plus any
interest earned) will be payable within ten calendar days after the completion
of the Fund's next annual audit. It is anticipated that the annual audit of the
Fund's financial statements will be completed within 60 days after March 31,
2006, the fiscal year end of the Fund.
A Member that tenders for purchase only a portion of
such Member's Interest will receive a Note that will entitle the Member to a
payment in cash and/or marketable securities (valued in accordance with the LLC
Agreement) equal to 100% of the net asset value of the Interest tendered by the
Member that is accepted for purchase by the Fund. Payment pursuant to the Note
will be made within 30 calendar days after the Valuation Date or, if the Fund
has requested withdrawals of its capital from any investment funds in order to
finance the purchase of Interests, within ten business days after the Fund has
received at least 95% of the aggregate amount withdrawn by the Fund from such
investment funds.
Although the Fund has retained the option to pay all
or a portion of the purchase price for Interests by distributing marketable
securities, the purchase price will be paid entirely in cash except in the
unlikely event that the Board of Managers determines that the distribution of
securities is necessary to avoid or mitigate any adverse effect of the Offer on
the remaining Members. In such event, the Fund would make such payment on a pro
rata basis so that each Member would receive the same type of consideration.
A Member that tenders only a portion of such Member's
Interest for repurchase must tender a minimum of $25,000 and will be required to
maintain a capital account balance equal to $100,000 or more.
A copy of: (a) the Cover Letter to the Offer and
Letter of Transmittal; (b) the Offer; (c) a form of Letter of Transmittal; (d) a
form of Notice of Withdrawal of Tender; and (e) forms of Letters to Members from
the Fund that will be sent in connection with the Fund's acceptance of tenders
of Interest for repurchase 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, May 11, 2005.
(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
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extension. If the Fund elects to extend the tender period, for the purpose of
determining the purchase price for tendered Interests, the estimated net asset
value of such Interests will be determined at the close of business on the last
business day of the month after the month in which the Offer actually expires.
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 the Expiration Date, 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; or (c) postpone the acceptance of
Interests for repurchase. 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, May 11, 2005 and, if the
Fund has not accepted such Interest for repurchase, at any time after Thursday,
June 9, 2005, 40 business days from the commencement of the Offer.
(vii) Members wishing to tender an Interest pursuant
to the Offer should mail or fax a completed and executed Letter of Transmittal
to the Adviser, to the attention of Kathleen Flores, at the address set forth on
page 2 of the Offer, or fax a completed and executed Letter of Transmittal to
the Adviser, also to the attention of Kathleen Flores, at the fax number set
forth on page 2 of the Offer. The completed and executed Letter of Transmittal
must be received by the Adviser, either by mail or by fax, no later than the
Expiration Date. The Fund recommends that all documents be submitted to the
Adviser by certified mail, return receipt requested, or by facsimile
transmission. A Member choosing to fax a Letter of Transmittal to the Adviser
must also send or deliver the original completed and executed Letter of
Transmittal to the Adviser promptly thereafter.
Any Member tendering an Interest pursuant to the
Offer may withdraw its tender as described above in ITEM 4(vi). To be effective,
any notice of withdrawal must be timely received by the Adviser at the address
or fax number set forth on page 2 of the Offer. A form to use to give notice of
withdrawal of a tender is available by calling the Adviser at the telephone
number indicated on page 2 of the Offer. A tender of an Interest properly
withdrawn shall 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 $25 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 Rule 13e-4(f)(1)(ii) under the Securities Exchange Act of 1934,
as amended; (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
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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. However, the Fund believes that this result is unlikely given
the nature of the Fund's investment program. A reduction in the aggregate assets
of the Fund may result in 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 to the
extent that additional subscriptions for Interests are made by new and existing
Members on July 1, 2005 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
and will generally reduce (but not below zero) its adjusted tax basis in its
Interest by the amount of cash and the fair market value of property distributed
to such Member. 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 such Member's 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 a
capital gain or ordinary income, depending on the circumstances. A Member that
has its entire Interest purchased by the Fund for cash may generally 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.
(a) (2) Not applicable.
(b) Not applicable.
ITEM 5. PAST CONTRACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS WITH
RESPECT TO THE ISSUER'S SECURITIES.
The Fund's LLC Agreement, which was 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 Adviser expects that
it will recommend to the Board of Managers that the Fund purchase Interests from
Members twice each year, effective as of the last business day in June and
December, in accordance with the offering materials of such Members. The Fund
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previously offered to purchase Interests from Members pursuant to a written
tender offer effective as of December 31, 2004. 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 of the Fund or any person controlling the
Fund or controlling the Adviser or any Manager of the Fund; and (ii) any person,
with respect to Interests. However, the LLC Agreement provides that the Fund
shall 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 purchase by the Fund has not been purchased 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 LLC Agreement.
(b) Interests that are tendered to the Fund in connection with the
Offer will be retired, although the Fund may issue Interests from time to time
in transactions not involving any public offering, conducted pursuant to Rule
506 of Regulation D under the Securities Act of 1933, as amended. The Fund
currently expects that it will continue to accept subscriptions for Interests as
of the first day of each calendar quarter, but is under no obligation to do so.
(c) Neither the Fund nor the Adviser nor the Board of Managers have
any plans or proposals 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 calendar quarter 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,
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 members of the Board of Managers, 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 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 finance 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 $25 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 of and/or delivery of
securities and portfolio assets held by the Fund; and (iii) possibly
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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) Neither the Fund nor the Adviser nor the Board of Managers have
determined at this time to borrow funds to purchase Interests tendered in
connection with the Offer. However, depending on the dollar amount of Interests
tendered and prevailing general economic and market conditions, the Fund, in its
sole discretion, may decide to seek to borrow money to finance all or a portion
of the purchase price for Interests, 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, to serve as
collateral for any amounts so borrowed, and if the Fund were to fail to repay
any such amounts, the lender 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 will be made from additional funds
contributed to the Fund by existing and/or new Members, withdrawal of its
capital from the investment funds in which it has invested, or from 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) Based on March 31, 2005 estimated values, there are no persons
that may be deemed to control the Fund, may control a person that controls the
Fund and/or may be controlled by a person controlling the Fund.
(b) Other than the acceptance of subscriptions for Interests as of
April 1, 2005, 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, 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-1 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:
Audited financial statements for the period from December 1, 2003
(commencement of operations) to March 31, 2004, previously filed on EDGAR
on Form N-CSR on June 8, 2004; and
Unaudited financial statements for the period from April 1, 2004 to
September 30, 2004, previously filed on EDGAR on Form N-CSR on December 9,
2004.
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The Fund's Board of Managers and Audit Committee have terminated
Ernst & Young LLP ("Ernst & Young") as the Fund's independent public accountants
as a result of concerns regarding their independence at the time of the issuance
of their report on the Fund's March 31, 2004 financial statements. These
concerns are the result of certain real estate consulting services performed by
Ernst & Young on a contingent fee basis for Charles Schwab & Co., Inc., an
affiliate of the Fund's Adviser. During the period Ernst & Young served as
independent accountants of the Fund, there was no disagreement between Ernst &
Young and the Fund on any matter of accounting principles or practices,
financial statement disclosure or auditing scope or procedures, which
disagreement, if not resolved to the satisfaction of Ernst & Young, would have
caused it to make reference to the subject matter of the disagreement in its
report. The Fund has no reason to believe that the Fund's March 31, 2004
financial statements were not prepared in accordance with generally accepted
accounting principles, or that such financial statements do not fairly
represent, in all material respects, the financial condition of the Fund as of
their dates. The Board and the Audit Committee have engaged the independent
accounting firm of Deloitte & Touche LLP to perform a re-audit of the Fund's
March 31, 2004 financial statements ("Re-audit") and to perform the audit for
the fiscal year ended March 31, 2005. The results of the Re-audit have been
reported to the Fund and its shareholders. Deloitte & Touche LLP reported no
material differences in the Re-audit.
(2) The Fund is not required to and does not file quarterly
unaudited financial statements under the Securities Exchange Act of 1934, as
amended. 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.
ITEM 11. ADDITIONAL INFORMATION.
(a) (1) None.
(2) None.
(3) Not applicable.
(4) Not applicable.
(5) None.
(b) None.
ITEM 12. EXHIBITS.
-10-
Reference is hereby made to the following exhibits which
collectively constitute the Offer to Members and are incorporated herein by
reference:
A. Cover Letter to the Offer and Letter of Transmittal.
B. The Offer.
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.
-11-
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.
EXCELSIOR ABSOLUTE RETURN
FUND OF FUNDS MASTER FUND, LLC
By: Board of Managers
By: /s/ Douglas A. Lindgren
----------------------------------
Name: Douglas A. Lindgren
Title: Manager and Chairman
April 14, 2005
-12-
EXHIBIT INDEX
EXHIBIT
A Cover Letter to the Offer and Letter of Transmittal.
B The Offer.
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.
-13-
EXHIBIT A
Cover Letter to the Offer and Letter of Transmittal
Excelsior Absolute Return Fund of Funds Master Fund, 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.
April 14, 2005
Dear Member:
We are writing to inform you of important dates relating to a tender
offer by Excelsior Absolute Return Fund of Funds Master Fund, LLC (the "Fund")
to purchase limited liability company interests in the Fund ("Interest" or
"Interests" as the context requires) from investors. If you are not interested
in selling your Interest at this time, please disregard this notice and take no
action.
The tender offer period will begin at 12:01 a.m., Eastern Time, on
Thursday, April 14, 2005. The purpose of the tender offer is to provide
liquidity to members of the Fund holding 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 May 11, 2005.
If you do not wish to sell 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 adviser,
U.S. Trust Hedge Fund Management, Inc., either by mail or by fax (if by fax,
please deliver an original, executed copy promptly thereafter) in good order by
May 11, 2005.
If you have any questions, please refer to the attached Offer
document, which contains additional important information about the tender
offer, or call Kathleen Flores at (203) 352-4497.
Sincerely,
Excelsior Absolute Return Fund of Funds Master Fund, LLC
A-1
EXHIBIT B
The Offer
EXCELSIOR ABSOLUTE RETURN FUND OF FUNDS MASTER FUND, LLC
225 High Ridge Road
Stamford, CT 06905
OFFER TO PURCHASE UP TO $25 MILLION OF OUTSTANDING
INTERESTS AT NET ASSET VALUE
DATED APRIL 14, 2005
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, EASTERN TIME, ON WEDNESDAY, MAY 11, 2005,
UNLESS THE OFFER IS EXTENDED
Dear Member:
Excelsior Absolute Return Fund of Funds Master Fund, 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 to purchase and the
related Letter of Transmittal (which together constitute the "Offer") up to $25
million of interests in the Fund or portions thereof pursuant to tenders by
members of the Fund ("Members") at a price equal to their net asset value,
determined as of June 30, 2005, if the Offer expires on May 11, 2005. If the
Fund elects to extend the tender offer 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 the last business day of the
month in which the Offer actually expires. (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.)
This Offer, which is being made to all Members, is conditioned on a minimum of
$25,000 in Interests being tendered by a Member tendering only a portion of an
Interest for repurchase, and is subject to certain other 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 Limited
Liability Company Agreement dated as of September 2, 2003 (the "LLC Agreement").
Members should realize that the value of the Interests tendered in
this Offer will likely change between March 31, 2005 (the last time net asset
value was calculated) and June 30, 2005, when the value of Interests tendered to
the Fund for repurchase 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 Interests tendered and
accepted for purchase by the Fund, through June 30, 2005, the valuation date of
the Offer when the net asset value of their Interest is calculated. Any
tendering Members that wish to obtain the estimated net asset value of their
Interests should contact U.S. Trust Hedge Fund Management, Inc., at the
telephone number 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 for
repurchase 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
Neither the Fund, nor its investment adviser nor its Board of
Managers make 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 their 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 neither been approved nor disapproved by the
Securities and Exchange Commission. Neither the Securities and Exchange
Commission nor any state securities commission have 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 Adviser:
U.S. Trust Hedge Fund Management, Inc.
225 High Ridge Road
Stamford, CT 06905
Attn: Kathleen Flores
Phone: (203) 352-4497
Fax: (203) 352-4456
B-2
TABLE OF CONTENTS
1. Background and Purpose of the Offer................................B-6
2. Offer to Purchase and Price........................................B-7
3. Amount of Tender...................................................B-8
4. Procedure for Tenders..............................................B-8
5. Withdrawal Rights..................................................B-9
6. Purchases and Payment..............................................B-9
7. Certain Conditions of the Offer...................................B-11
8. Certain Information About the Fund................................B-12
9. Certain Federal Income Tax Consequences...........................B-13
10. Miscellaneous....................................................B-13
11. Financial Information............................................B-13
B-3
SUMMARY TERM SHEET
o As stated in the offering documents of Excelsior Absolute Return Fund
of Funds Master Fund, LLC (hereinafter "we" or the "Fund"), we will
purchase your limited liability company interests in the Fund
("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
redeem). This offer (the "Offer") will remain open until 12:00
midnight, Eastern Time, on Wednesday, May 11, 2005 (such time and date
being hereinafter called the "Initial Expiration Date"), or such 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 net asset value will
be calculated for this purpose on June 30, 2005 or, if the Offer is
extended, on the last business day of the month in which the Offer
actually expires (the "Valuation Date").
o 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 Interests as of June 30, 2005, during the Fund's
audit for its fiscal year ending March 31, 2006, which the Fund
expects will be completed by the end of May 2006. This June 30, 2005
net asset value, as reviewed, 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 minimum required capital account balance. If you tender your
entire Interest (or a portion of your Interest) and we accept that
Interest for repurchase, we will give you a non-interest bearing,
non-transferable promissory note (the "Note") that will be held for
you in a special custody account with PFPC Trust Company (PFPC Trust
Company, together with its affiliated banks, "PFPC") and will entitle
you to an amount equal to the net asset value of the Interest tendered
(valued in accordance with the Fund's Liability Company Agreement
dated July 1, 2003 (the "LLC Agreement")), determined as of June 30,
2005 (or if the Offer is extended, the net asset value determined on
the Valuation Date).
o If you tender your entire Interest, the Note will entitle you to an
initial payment in cash and/or marketable securities (valued in
accordance with the LLC Agreement) equal to at least 95% of the
unaudited net asset value of the Interest (the "Initial Payment")
which will be paid to your account with PFPC or mailed to you if you
do not have a PFPC account, within 30 calendar days after the
Valuation Date or, if we have requested withdrawals of capital from
any investment funds in order to finance the purchase of Interests,
ten business days after we have received at least 95% of the total
amount withdrawn from such investment funds.
B-4
o The Note will also entitle you to a contingent payment (the
"Contingent Payment") equal to the excess, if any, of (a) the net
asset value of the Interest tendered as of the Valuation Date (as it
may be adjusted based upon the next annual audit of the Fund's
financial statements) over (b) the Initial Payment. The Fund will
deposit the aggregate amount of the Contingent Payments in a separate,
interest bearing account and will pay any interest actually earned
thereon PRO RATA to the Members whose Interests have been repurchased.
The Contingent Payment (plus any interest earned) will be paid within
ten calendar days after the completion of the Fund's next annual
audit. The Contingent Payment will also be paid to your PFPC account
or mailed to you if you do not have a PFPC account.
o If you tender only a portion of your Interest, the Note will entitle
you to a payment in cash and/or marketable securities (valued in
accordance with the LLC Agreement) equal to 100% of the unaudited net
asset value of the Interest and will be paid to your account with PFPC
or mailed to you if you do not have a PFPC account, within 30 calendar
days after the Valuation Date or, if we have requested withdrawals of
capital from any investment funds in order to fund the purchase of
Interests, within ten business days after we have received at least
95% of the total amount withdrawn from such investment funds.
o If you tender only a portion of your Interest, you are required to
tender a minimum of $25,000 and you must maintain a capital account
balance of $100,000 or more. We reserve the right to purchase less
than the amount you tender if the purchase would cause your capital
account to have less than the required minimum balance or if the total
amount tendered by members of the Fund ("Members") is more than $25
million.
o If we accept the tender of your entire Interest or a portion of your
Interest, we will pay the proceeds from: cash on hand; withdrawals of
capital from the investment funds in which we have invested; the
proceeds from the sale of securities and portfolio assets held by the
Fund; and/or borrowings (which we do not currently intend to do).
o Following this summary is a formal notice of our offer to purchase
your Interest. This Offer remains open to you until 12:00 midnight,
Eastern Time, on Wednesday, May 11, 2005, the expected expiration date
of the 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 June 9,
2005, 40 business days from the commencement of the Offer, assuming
your Interest has not yet been accepted for purchase by the Fund on or
before that date.
o If you would like us to purchase your Interest or a portion of your
Interest, you should (i) mail the Letter of Transmittal (enclosed with
the Offer), to our investment adviser, U.S. Trust Hedge Fund
Management, Inc. (the "Adviser"),
B-5
225 High Ridge Road, Stamford, CT 06905, attention Kathleen Flores, or
(ii) fax it to the Adviser at (203) 352-4456, so that it is received
before 12:00 midnight, Eastern Time, on Wednesday, May 11, 2005. If
you choose to fax the Letter of Transmittal, you should mail the
original Letter of Transmittal to the Adviser promptly after you fax
it (although the original does not have to be received before 12:00
midnight, Eastern Time, on Wednesday, May 11, 2005). Of course, the
value of your Interests will change between March 31, 2005 (the last
time net asset value was calculated) and June 30, 2005, when the value
of your Interest will be determined for purposes of calculating the
purchase price to be paid by us for your Interest.
o If you would like to obtain the estimated net asset value of your
Interest, which we calculate monthly, based upon the information we
receive from the managers of the investment funds in which we invest,
you may contact the Adviser at (203) 352-4497 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
your Interest, we have the right to cancel, amend or postpone this
Offer at any time before 12:00 midnight, Eastern Time, on Wednesday,
May 11, 2005. Also realize that although the Offer expires on May 11,
2005, you will remain a Member with respect to the Interest you
tendered that is accepted for purchase by the Fund through June 30,
2005, when the net asset value of your Interest is calculated.
1. BACKGROUND AND PURPOSE OF THE OFFER. 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 Fund's LLC Agreement. The LLC
Agreement, which was provided to each Member in advance of subscribing for
Interests, provide that the board of managers of the Fund (each a "Manager," and
collectively, the "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 Adviser expects that it will recommend to the Board of
Managers that the Fund offer to purchase Interests from Members twice each year,
effective as of the last business day of June and December, in accordance with
the offering materials of such Members. The Fund previously offered to purchase
Interests from Members pursuant to a written tender effective as of December 31,
2004. 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, that the Offer
is in the best interests of Members in order to provide liquidity for Interests
as contemplated in the LLC Agreement. Such matters include, but are not limited
to, the following: whether any Members have requested the Fund to repurchase
their Interests or portions thereof; the liquidity of the Fund's assets; the
investment plans and working capital requirements of the Fund; the relative
economies of scale with respect to the size of the Fund; the history of the Fund
in repurchasing Interests; the economic condition of the securities markets; and
the anticipated tax consequences of any proposed repurchases of Interests or
portions thereof.
B-6
The Board of Managers intends to consider the continued desirability
of the Fund making an offer to purchase Interests from time to time in the
future, but the Fund is not required to make any such offer.
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 due to the reduction in the Fund's aggregate assets resulting
from payment for the Interests tendered. These risks include the potential for
greater volatility due to decreased diversification. However, the Fund believes
that this result is unlikely given the nature of the Fund's investment program.
A reduction in the aggregate assets of the Fund may result in 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 to the extent that additional subscriptions for
Interests are made by new and existing Members on July 1, 2005 and thereafter
from time to time.
Interests that are tendered to the Fund in connection with this
Offer will be retired, although the Fund may issue new Interests from time to
time in transactions not involving any public offering conducted pursuant to
Rule 506 of Regulation D under the Securities Act of 1933, as amended. The Fund
currently expects that it will continue to accept subscriptions for Interests as
of the first day of each calendar quarter, but is under no obligation to do so.
2. OFFER TO PURCHASE AND PRICE. The Fund will, on the terms and
subject to the conditions of the Offer, purchase up to $25 million of those
outstanding Interests that are properly tendered by Members and not withdrawn
(in accordance with Section 5 below) prior to 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 on June 30, 2005 or, if the Offer is extended, on 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 March 31, 2005, the unaudited net asset value of an Interest
corresponding to an initial capital contribution of $250,000 on the following
closing dates of the Fund was as follows:
If You Invested $250,000 Your Unaudited Net Asset Value As Of
ON THE FOLLOWING CLOSING DATE MARCH 31, 2005 WOULD BE
January 1, 2005 $251,205.15
October 1, 2004 $264,206.88
July 1, 2004 $265,504.37
April 1, 2004 $262,233.81
January 1, 2004 $270,535.94
December 1, 2003 $275,404.50
B-7
As of the close of business on March 31, 2005, there was
approximately $251,792,560 outstanding in capital of the Fund held in Interests
(based on the unaudited net asset value of the Fund on that date). Members may
obtain monthly estimated net asset value information, which the Fund calculates
based on the information it receives from the managers of the investment funds
in which the Fund invests, until the expiration of the Offer, by contacting the
Adviser at the telephone number 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
purchase only a portion of such Member's Interest shall be required to maintain
a capital account balance of $100,000 or more. 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, which
is being made to all Members, is conditioned on a minimum amount of $25,000 in
Interests being tendered by the Member if the Member is tendering only a portion
of an Interest for repurchase.
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
$25 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 $25 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 Rule 13e-4(f)(1)(ii) under the
Securities Exchange Act of 1934, as amended; (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
Section 7 below.
4. PROCEDURE FOR TENDERS. Members wishing to tender Interests
pursuant to the Offer should either: (a) mail a completed and executed Letter of
Transmittal to the Adviser, to the attention of Kathleen Flores, at the address
set forth on page 2, or (b) fax a completed and executed Letter of Transmittal
to the Adviser, also to the attention of Kathleen Flores, at the fax number set
forth on page 2. The completed and executed Letter of Transmittal must be
received by the Adviser, either by mail or by fax, no later than the Expiration
Date.
The Fund recommends that all documents be submitted to the Adviser
via certified mail, return receipt requested, or by facsimile transmission. A
Member choosing to fax a Letter of Transmittal to the Adviser must also send or
deliver the original completed and executed Letter of Transmittal to the Adviser
promptly thereafter. Members wishing to confirm receipt of a Letter of
Transmittal may contact the Adviser at the address or telephone number set
B-8
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 the Adviser 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 reserves the absolute right to reject any or all
tenders determined by it not to be in appropriate form or the acceptance of or
payment for which would, in the opinion of counsel for the Fund, be unlawful.
The Fund also reserves the absolute right to waive any of the conditions of the
Offer or any defect in any tender with respect to any particular Interest or any
particular 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. Neither the Fund nor the
Adviser nor 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, if such Member's Interest has not yet been accepted for purchase by
the Fund, at any time after June 9, 2005, 40 business days from the commencement
of the Offer. To be effective, any notice of withdrawal of a tender must be
timely received by the Adviser at the address or fax number set forth on page 2.
A form to give notice of withdrawal of a tender is available by calling the
Adviser at the telephone number indicated on page 2. All questions as to the
form and validity (including time of receipt) of notices of withdrawal of the
tender will be determined by the Fund, in its sole discretion, and such
determination shall be final and binding. A tender of Interests properly
withdrawn shall 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.
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 such Interest. As stated in Section 2 above, the purchase price of
an Interest tendered by any Member will be the net asset value thereof
determined as of June 30, 2005, if the Offer expires on the Initial Expiration
Date, and otherwise the net asset value thereof as of the last business day of
the month in which the Offer expires. The net asset value will be determined
after all allocations to capital accounts of the Member required to be made by
the LLC Agreement have been made.
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. Each Member that tenders its
entire Interest or a portion thereof that is accepted for purchase will be given
a Note within ten calendar days of the acceptance of the Member's Interest for
repurchase. The Note will be held for the Member in a special custody account
with PFPC. The Note will entitle the Member to be paid an amount equal to the
value, determined as of the Valuation Date, of the Interest or portion thereof
being purchased (subject to adjustment upon completion of the next annual audit
of the Fund's financial statements). This amount will be the value of the
Member's capital account (or the portion thereof being purchased) determined
B-9
as of the Valuation Date and will be based on the net asset value of the Fund's
assets determined as of that date, after giving effect to all allocations to be
made as of that date.
If a Member tenders its entire Interest, the Note will entitle the
Member to receive an Initial Payment in cash and/or marketable securities
(valued in accordance with the LLC Agreement) equal to at least 95% of the
unaudited net asset value of the Interest tendered and accepted for purchase by
the Fund, determined as of the Valuation Date. Payment of this amount will be
made within 30 calendar days after the Valuation Date or, if the Fund has
requested withdrawals of its capital from any investment funds in order to
finance the purchase of Interests, within ten business days after the Fund has
received at least 95% of the aggregate amount withdrawn by the Fund from such
investment funds. The Note will also entitle a Member to receive a Contingent
Payment equal to the excess, if any, of (a) the net asset value of the Interest
tendered by the Member and accepted by the Fund for purchase as of the Valuation
Date, as it may be adjusted based on the next annual audit of the Fund's March
31, 2006, financial statements, over (b) the Initial Payment. The Fund will
deposit the aggregate amount of the Contingent Payments in a separate, interest
bearing account and will pay any interest actually earned thereon PRO RATA to
the Members whose Interests have been repurchased. The Contingent Payment (plus
any interest earned) will be payable within ten calendar days after the
completion of the Fund's next annual audit. It is anticipated that the annual
audit of the Fund's financial statements will be completed within 60 days after
March 31, 2006, the fiscal year end of the Fund.
A Member that tenders for purchase only a portion of such Member's
Interest will receive a Note that will entitle the Member to a payment in cash
and/or marketable securities (valued in accordance with the LLC Agreement) equal
to 100% of the net asset value of the Interest tendered by the Member that is
accepted for purchase by the Fund. Payment pursuant to the Note will be made
within 30 calendar days after the Valuation Date or, if the Fund has requested
withdrawals of its capital from any investment funds in order to finance the
purchase of Interests, within ten business days after the Fund has received at
least 95% of the aggregate amount withdrawn by the Fund from such investment
funds.
Although the Fund has retained the option to pay all or a portion of
the purchase price for Interests by distributing marketable securities, the
purchase price will be paid entirely in cash except in the unlikely event that
the Board of Managers determines that the distribution of securities is
necessary to avoid or mitigate any adverse effect of the Offer on the remaining
Members. In such event, the Fund would make such payment on a pro rata basis so
that each Member would receive the same type of consideration.
The Note pursuant to which Members will receive the Initial Payment
and Contingent Payment (together, the "Payments") will be held in a special
custody account with PFPC for the benefit of Members tendering Interests in the
Fund. All payments due pursuant to the Note will also be deposited directly to
the tendering Member's account at PFPC if the Member has an account with PFPC
and will be subject upon withdrawal from such accounts to any fees that PFPC
would customarily assess upon the withdrawal of cash from such account. Those
Members that do not have a PFPC account will receive any payments due under the
Note through the mail at the address listed in the Fund's records unless the
Fund is advised in writing of a change of address.
B-10
It is expected that cash payments for Interests acquired pursuant to
the Offer, which will not exceed $25 million (unless the Fund elects to purchase
a greater amount), will be derived from: (a) cash on hand; (b) withdrawal of
capital from the investment funds in which the Fund invests; (c) the proceeds
from the sale of securities and portfolio assets held by the Fund; and/or (d)
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 the Notes, as described
above. Neither the Fund nor the Board of Managers nor the Adviser have
determined at this time to borrow funds to purchase Interests tendered in
connection with the Offer. However, depending on the dollar amount of Interests
tendered and prevailing general economic and market conditions, the Fund, in its
sole discretion, may decide to finance any portion of the purchase price,
subject to compliance with applicable law, through borrowings. 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, to serve as
collateral for any amounts so borrowed, and if the Fund were to fail to repay
any such amounts, the lender 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 will be made from additional funds
contributed to the Fund by existing and/or new Members, withdrawal of capital
from the investment funds in which it has invested 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. In the event that the
Fund so 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 as of the close of business on the last business day of the
month in which the Offer expires. 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 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 for
repurchase. 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 objective 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
Connecticut 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, significant change
in armed hostilities or other international or national calamity directly or
indirectly involving the United States since the commencement of
B-11
the Offer 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. It is organized as a
Delaware limited liability company. The principal office of the Fund is located
at 225 High Ridge Road, Stamford, CT 06905 and the telephone number is (203)
352-4497. Interests are not traded on any established trading market and are
subject to strict restrictions on transferability pursuant to the LLC Agreement.
Neither the Fund nor the Adviser nor the Board of Managers 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 calendar quarter 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 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 finance 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.
Other than the acceptance of subscriptions for Interests on April 1,
2005, there have been no transactions involving the 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.
Based on March 31, 2005 estimated values, there are no persons that
may be deemed to control the Fund, may control a person that controls the Fund
and/or may be controlled by a person controlling the Fund.
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
B-12
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 and will generally
reduce (but not below zero) its adjusted tax basis in its Interest by the amount
of cash and the fair market value of property distributed to such Member. 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 such 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 for
cash may generally 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 the Adviser at the address and telephone
number 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.
11. FINANCIAL INFORMATION. Reference is made to the following
financial statements of the Fund which are incorporated herein by reference.
Audited financial statements for the period from December 1, 2003
(commencement of operations) to March 31, 2004, previously filed on
EDGAR on Form N-CSR on June 8, 2004;* and
- -----------
* The Fund's Board of Managers and Audit Committee have terminated Ernst & Young
LLP ("Ernst & Young") as the Fund's independent public accountants as a result
of concerns regarding their independence at the time of the issuance of their
report on the Fund's March 31, 2004 financial statements. These concerns are the
result of certain real estate consulting services
B-13
Unaudited financial statements for the period from April 1, 2004 to
September 30, 2004, previously filed on EDGAR on Form N-CSR on
December 9, 2004.
- --------------------------------------------------------------------------------
performed by Ernst & Young on a contingent fee basis for Charles Schwab & Co.,
Inc., an affiliate of the Fund's Adviser. During the period Ernst & Young served
as independent accountants of the Fund, there was no disagreement between Ernst
& Young and the Fund on any matter of accounting principles or practices,
financial statement disclosure or auditing scope or procedures, which
disagreement, if not resolved to the satisfaction of Ernst & Young, would have
caused it to make reference to the subject matter of the disagreement in its
report. The Fund has no reason to believe that the Fund's March 31, 2004
financial statements were not prepared in accordance with generally accepted
accounting principles, or that such financial statements do not fairly
represent, in all material respects, the financial condition of the Fund as of
their dates. The Board and the Audit Committee have engaged the independent
accounting firm of Deloitte & Touche LLP to perform a re-audit of the Fund's
March 31, 2004 financial statements ("Re-audit") and to perform the audit for
the fiscal year ended March 31, 2005. The results of the Re-audit have been
reported to the Fund and its shareholders. Deloitte & Touche LLP reported no
material differences in the Re-audit.
B-14
EXHIBIT C
LETTER OF TRANSMITTAL
Regarding
Interests
in
EXCELSIOR ABSOLUTE RETURN FUND OF FUNDS MASTER FUND, LLC
Tendered Pursuant to the Offer
Dated April 14, 2005
|----------------------------------------------------------------|
| |
| 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, MAY 11, 2005, UNLESS THE OFFER IS EXTENDED. |
| |
|----------------------------------------------------------------|
COMPLETE THIS LETTER OF TRANSMITTAL AND RETURN BY MAIL OR FAX TO:
U.S. Trust Hedge Fund Management, Inc.
225 High Ridge Road
Stamford, CT 06905
Attn: Kathleen Flores
For additional information:
Phone: (203) 352-4497
Fax: (203) 352-4456
C-1
Ladies and Gentlemen:
The undersigned hereby tenders to Excelsior Absolute Return Fund of
Funds Master Fund, LLC, a closed-end, non-diversified, management investment
company organized under the laws of the State of Delaware (the "Fund"), the
limited liability company interest in the Fund (hereinafter the "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 April 14, 2005, 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, INCLUDING, BUT NOT LIMITED TO, THE
ABSOLUTE RIGHT OF THE FUND TO REJECT ANY AND ALL TENDERS DETERMINED BY 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.
A promissory note for the purchase price will be deposited into a
special custody account with PFPC Trust Company (PFPC Trust Company, together
with its affiliated banks, "PFPC"). The initial payment of the purchase price
for the Interest or portion thereof tendered by the undersigned will be made by
transfer of the funds to the undersigned's account at PFPC, or mailed to the
address of record for the undersigned if the undersigned does not have a PFPC
account, 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 a PFPC account, PFPC may subject such withdrawal to
any fees that PFPC would customarily assess upon the withdrawal of cash from
such account.
The promissory note will also reflect the contingent payment (the
"Contingent Payment") portion of the purchase price, if any, as described in
Section 6 of the Offer. Any Contingent Payment of cash due pursuant to the Note
will also be deposited directly to the undersigned's account with PFPC, or will
be mailed to the undersigned if the undersigned does not have a PFPC account.
Upon a withdrawal of such cash from such account, PFPC may impose such fees as
it would customarily assess upon the withdrawal of cash from such 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, determined as of June 30,
2005, subject to an extension of the Offer as described in Section 7. The
Contingent Payment portion of the purchase price, if any, will be determined
upon completion of the audit of the Fund's financial statements which is
anticipated to be completed not later than 60 days after March 31, 2006, the
Fund's fiscal year end, and will be paid within ten calendar days thereafter.
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, this tender is irrevocable.
C-2
PLEASE FAX OR MAIL IN THE ENCLOSED POSTAGE PAID ENVELOPE TO:
U.S. TRUST HEDGE FUND MANAGEMENT, INC., 225 HIGH RIDGE RD., STAMFORD, CT 06905
ATTN: KATHLEEN FLORES. FOR ADDITIONAL INFORMATION: PHONE: (203) 352-4497
FAX: (203) 342-4456
PART 1. NAME AND ADDRESS:
Name of Member:
----------------------------------------------------
Social Security No.
or Taxpayer
Identification No.:
-----------------------
Telephone Number: ( )
----------------------
PART 2. AMOUNT OF LIMITED LIABILITY COMPANY 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 tender of $25,000 is required). (A minimum
interest with a value of $100,000, or more must be maintained in the Fund
(the "Required Minimum Balance").)*
$ _________________________
|_| Portion of limited liability company interest in excess of the Required
Minimum Balance. (A minimum of $25,000 must be tendered if this option is
chosen).
*The undersigned understands and agrees that if the undersigned tenders an
amount that would cause the undersigned's capital account 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 deposited to the undersigned's account at PFPC, or
mailed to the address of record for the undersigned. The undersigned
hereby represents and warrants that the undersigned understands that, for
cash payments deposited to the undersigned's account, upon a withdrawal of
such cash payment from such account, PFPC may impose such fees as it would
customarily assess upon the withdrawal of cash from such account.
PROMISSORY NOTE
The promissory note reflecting both the initial and contingent payment
portion of the purchase price, if applicable, will be deposited into a
special custody account with PFPC for the benefit of the undersigned. 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 the undersigned's account at PFPC or mailed to the
address of record for the undersigned and upon a withdrawal of such cash
from a PFPC account, PFPC may impose such fees as it would customarily
assess upon the withdrawal of cash from such account.
C-3
PART 4. SIGNATURE(S).
- -----------------------------------------------------------------------------
FOR INDIVIDUAL INVESTORS FOR OTHER INVESTORS:
AND JOINT TENANTS:
- ------------------------------------ ------------------------------------
Signature Print Name of Investor
(SIGNATURE OF OWNER(S) EXACTLY AS
APPEARED
ON SUBSCRIPTION AGREEMENT)
- ------------------------------------ ------------------------------------
Print Name of Investor Signature
(SIGNATURE OF OWNER(S) EXACTLY AS
APPEARED
ON SUBSCRIPTION AGREEMENT)
- ------------------------------------ ------------------------------------
Joint Tenant Signature if necessary Print Name of Signatory and Title
(SIGNATURE OF OWNER(S) EXACTLY AS
APPEARED
ON SUBSCRIPTION AGREEMENT)
- ------------------------------------ ------------------------------------
Print Name of Joint Tenant Co-signatory if necessary
(SIGNATURE OF OWNER(S) EXACTLY AS
APPEARED
ON SUBSCRIPTION AGREEMENT)
------------------------------------
Print Name and Title of Co-signatory
- -----------------------------------------------------------------------------
Date:
------------------
C-4
EXHIBIT D
NOTICE OF WITHDRAWAL OF TENDER
Regarding Interests in
EXCELSIOR ABSOLUTE RETURN FUND OF FUNDS MASTER FUND, LLC
Tendered Pursuant to the Offer
Dated April 14, 2005
|----------------------------------------------------------------|
| |
| 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, MAY 11, 2005, UNLESS THE OFFER IS EXTENDED. |
| |
|----------------------------------------------------------------|
COMPLETE THIS NOTICE OF WITHDRAWAL AND RETURN OR DELIVER TO:
U.S. Trust Hedge Fund Management, Inc.
225 High Ridge Road
Stamford, CT 06905
Attn: Kathleen Flores
For additional information:
Phone: (203) 352-4497
Fax: (203) 352-4456
D-1
Ladies and Gentlemen:
The undersigned wishes to withdraw the tender of its limited liability
company interest in Excelsior Absolute Return Fund of Funds Master Fund, LLC
(the "Fund"), or the tender of a portion of such interests, for purchase by
the Fund that previously was submitted by the undersigned in a Letter of
Transmittal dated _____________________.
Such tender was in the amount of:
|_| 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 such interest) previously tendered will not be purchased by the
Fund upon expiration of the tender offer described above.
SIGNATURE(S).
- -----------------------------------------------------------------------------
FOR INDIVIDUAL INVESTORS FOR OTHER INVESTORS:
AND JOINT TENANTS:
- ------------------------------------ ------------------------------------
Signature Print Name of Investor
(SIGNATURE OF OWNER(S) EXACTLY AS
APPEARED
ON SUBSCRIPTION AGREEMENT)
- ------------------------------------ ------------------------------------
Print Name of Investor Signature
(SIGNATURE OF OWNER(S) EXACTLY AS
APPEARED
ON SUBSCRIPTION AGREEMENT)
- ------------------------------------ ------------------------------------
Joint Tenant Signature if necessary Print Name of Signatory and Title
(SIGNATURE OF OWNER(S) EXACTLY AS
APPEARED
ON SUBSCRIPTION AGREEMENT)
- ------------------------------------ ------------------------------------
Print Name of Joint Tenant Co-signatory if necessary
(SIGNATURE OF OWNER(S) EXACTLY AS
APPEARED
ON SUBSCRIPTION AGREEMENT)
------------------------------------
Print Name and Title of Co-signatory
- -----------------------------------------------------------------------------
Date:
------------------
D-2
EXHIBIT E
Forms of letters from the Fund
to Members in connection with acceptance of offers of tender
THIS LETTER IS BEING SENT TO YOU IF YOU TENDERED YOUR ENTIRE INTEREST IN THE
FUND.
May 24, 2005
Dear Member:
Excelsior Absolute Return Fund of Funds Master Fund, LLC (the
"Fund") has received and accepted for purchase your tender of your limited
liability company interest in the Fund ("Interest" or "Interests" as the context
requires).
Because you have tendered and the Fund has purchased your entire
investment, you have been paid a note (the "Note") entitling you to receive an
initial payment of 95% of the purchase price based on the unaudited net asset
value of the Fund, determined as of June 30, 2005, in accordance with the terms
of the tender offer. A cash payment in this amount will be deposited into your
account with PFPC Trust Company or one of its affiliated banks ("PFPC") on July
30, 2005 or a check will be mailed to you on that date if you do not have a PFPC
account, unless the valuation date of the Interests has changed or the Fund has
requested a withdrawal of its capital from the investment funds in which it has
invested and has not yet received the proceeds of that withdrawal, in accordance
with the terms of the tender offer.
The terms of the Note provide that a contingent payment representing
the balance of the purchase price, if any, will be paid to you after the
completion of the Fund's fiscal year-end audit and is subject to fiscal year-end
audit adjustment. This amount, will be paid within ten calendar days after the
conclusion of the fiscal 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 and
will also be deposited into your PFPC account or will be mailed to you if you do
not have a PFPC account. We expect the audit to be completed by the end of May
2006.
Should you have any questions, please feel free to contact the
Fund's adviser, U.S. Trust Hedge Fund Management, Inc. at (203) 352-4497.
Sincerely,
Excelsior Absolute Return Fund of Funds
Master Fund, LLC
Enclosure
E-1
THIS LETTER IS BEING SENT TO YOU IF YOU TENDERED A PORTION OF YOUR INTEREST IN
THE FUND.
May 24, 2005
Dear Member:
Excelsior Absolute Return Fund of Funds Master Fund, LLC (the
"Fund") has received and accepted for purchase your tender of a portion of your
limited liability company interest in the Fund ("Interest" or "Interests" as the
context requires).
Because you have tendered and the Fund has purchased a portion of
your investment, you have been paid a note (the "Note") entitling you to receive
an initial payment of 100% of the purchase price based on the unaudited net
asset value of the Fund, determined as of June 30, 2005, in accordance with the
terms of the tender offer. A cash payment in this amount will be deposited into
your account with PFPC Trust Company or one of its affiliated banks ("PFPC") on
July 30, 2005 or a check will be mailed to you on that date if you do not have a
PFPC account, unless the valuation date of the Interests has changed or the Fund
has requested a withdrawal of its capital from the investment funds in which it
has invested and has not yet received the proceeds of that withdrawal, in
accordance with the terms of the tender offer.
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 adviser, U.S. Trust Hedge Fund Management, Inc. at (203) 352-4497.
Sincerely,
Excelsior Absolute Return Fund of Funds
Master Fund, LLC
Enclosure
E-2
THIS LETTER IS BEING SENT TO YOU WITH THE INITIAL PAYMENT FOR ALL OF YOUR
INTEREST WHICH WAS REPURCHASED BY THE FUND.
July 30, 2005
Dear Member:
Enclosed is a statement showing the breakdown of your capital
withdrawal resulting from our purchase of your interest in Excelsior Absolute
Return Fund of Funds Master Fund, LLC (the "Fund").
Because you have tendered and the Fund has purchased your entire
investment, you have previously been paid a note entitling you to receive 95% of
the purchase price based on the unaudited net asset value of the Fund,
determined as of June 30, 2005, in accordance with the terms of the tender
offer. A cash payment in this amount is being deposited into your account with
PFPC Trust Company or one of its affiliated banks ("PFPC") on July 30, 2005, if
you have a PFPC account. If you do not have a PFPC account, a check is enclosed
with this letter.
The balance of the purchase price, if any, will be paid to you after
the completion of the Fund's fiscal year-end audit for the year ending March 31,
2006 and is subject to year-end audit adjustment. This amount will be paid
within ten 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 May 2006.
Should you have any questions, please feel free to contact the
Fund's adviser, U.S. Trust Hedge Fund Management, Inc. at (203) 352-4497.
Sincerely,
Excelsior Absolute Return Fund of Funds
Master Fund, LLC
Enclosure
E-3
THIS LETTER IS BEING SENT TO YOU WITH THE INITIAL PAYMENT FOR THE PORTION OF
YOUR INTEREST WHICH WAS REPURCHASED BY THE FUND.
July 30, 2005
Dear Member:
Enclosed is a statement showing the breakdown of your capital
withdrawal resulting from our purchase of your interest in Excelsior Absolute
Return Fund of Funds Master Fund, LLC (the "Fund").
Because you have tendered and the Fund has purchased a portion of
your investment, you have been paid 100% of the purchase price based on the
estimated unaudited net asset value of the Fund, determined as of June 30, 2005,
in accordance with the terms of the tender offer. A cash payment in this amount
is being deposited into your account with PFPC Trust Company or one of its
affiliated banks ("PFPC") on July 30, 2005, if you have a PFPC account. If you
do not have a PFPC account, a check is enclosed with this letter.
Should you have any questions, please feel free to contact the
Fund's adviser, U.S. Trust Hedge Fund Management, Inc. at (203) 352-4497.
Sincerely,
Excelsior Absolute Return Fund of Funds
Master Fund, LLC
Enclosure
E-4
THIS LETTER IS BEING SENT TO YOU WITH THE CONTINGENT PAYMENT FOR THE INTEREST
REPURCHASED BY THE FUND.
June 6, 2006
Dear Member:
Enclosed is a statement showing the breakdown of your capital
withdrawal resulting from our purchase of your interest in Excelsior Absolute
Return Fund of Funds Master Fund, LLC (the "Fund").
Pursuant to the terms of the tender offer, the contingent payment is
being deposited into your account with PFPC Trust Company or one of its
affiliated banks ("PFPC") on June 9, 2006 if you have a PFPC account. If you do
not have a PFPC account, a check is enclosed with this letter.
Should you have any questions, please feel free to contact the
Fund's adviser, U.S. Trust Hedge Fund Management, Inc. at (203) 352-4497.
Sincerely,
Excelsior Absolute Return Fund of Funds
Master Fund, LLC
Enclosure
E-5