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)
JAMES L. BAILEY
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
October 14, 2005
(Date Tender Offer First Published,
Sent or Given to Security Holders)
CALCULATION OF FILING FEE
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Transaction Valuation: $30,000,000.00 (a) Amount of Filing Fee: $3,531 (b)
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(a) Calculated as the aggregate maximum repurchase price for Interests.
(b) Calculated at $117.70 per million of Transaction Valuation.
[X] 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: $2,931.56
Form or Registration No.: 005-80093
Filing Party: EXCELSIOR ABSOLUTE RETURN FUND OF FUNDS MASTER FUND, LLC
Date Filed: APRIL 14, 2005
[ ] 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 repurchase
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 repurchase Interests (the "Offer") will remain open until 12:00 midnight,
Eastern Time, on Thursday, November 10, 2005, unless the Offer is extended. The
net asset value of the Interests will be calculated for this purpose on December
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 December 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 December 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 December 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").
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 repurchase by the Fund (the "Initial Payment") and will be paid to
the Member's account with U.S. Trust Company, N.A. or an affiliate bank
(collectively, "U.S. Trust"), or mailed to the Member if the Member does not
have a U.S. Trust 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 repurchase 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
U.S. Trust, or mailed to the Member if the Member does not have a U.S. Trust
account.
A Member that tenders for repurchase 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 portion of the Interest tendered by the
Member that is accepted for repurchase by the Fund. Payment pursuant to the Note
will be made to the Member's account at U.S. Trust or mail to the Member if the
Member does not have a U.S. Trust 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 repurchase 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 repurchase 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 repurchase less than the amount
tendered by a Member if the repurchase 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 $30 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 repurchases
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
repurchase the Interests. The Offer remains open to Members until 12:00
midnight, Eastern Time, Thursday, November 10, 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 Monday, December 12, 2005,
40 business days from the commencement of the Offer, assuming their Interest has
not been accepted for repurchase by the Fund on or before that date.
If a Member would like the Fund to repurchase 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 Peggy Lynn, 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 Thursday, November 10, 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
Thursday, November 10, 2005). Of course, the value of Interests will change
between September 30, 2005 (the last time prior to the date of the Offer as of
which net asset value has been calculated) and December 30, 2005, the date as of
which the value of Interests will be determined for purposes of calculating the
repurchase 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 Thursday, November 10,
2005. Also realize that although the Offer expires on November 10, 2005, a
Member that tenders all or a portion of its Interest will remain a Member with
respect to the Interest tendered and accepted for repurchase by the Fund through
December 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
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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.
(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
August 31, 2005, there was approximately $285,198,955 outstanding in capital of
the Fund, represented by Interests. Subject to the conditions set forth in the
Offer, the Fund will repurchase up to $30 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 James L. Bailey, Virginia Breen, Jonathan B. Bulkeley 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 repurchase up to $30 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 Thursday, November 10, 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 repurchase 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 repurchase 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 repurchased (subject to adjustment upon completion of the next annual
audit of the Fund's financial statements). This
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amount will be the value of the Member's capital account (or the portion thereof
being repurchased) 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.
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
repurchase 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 repurchase 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 repurchase 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 portion of the Interest tendered by the
Member that is accepted for repurchase 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 repurchase 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 repurchase price for Interests by distributing marketable securities, the
repurchase 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, Thursday, November 10, 2005.
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(iv) Not applicable.
(v) The Fund reserves the right, at any time and from time to
time, to extend the period of time during which the Offer is pending by
notifying Members of such extension. If the Fund elects to extend the tender
period, for the purpose of determining the repurchase 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 repurchase
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, Thursday, November 10, 2005 and, if the Fund has
not accepted such Interest for repurchase, at any time after Monday, December
12, 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 Peggy Lynn, 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 Peggy Lynn, 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 repurchased) Interests that are tendered when it gives
written notice to the tendering Member of its election to repurchase such
Member's Interest.
(ix) If more than $30 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
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that the Fund is offering to repurchase to an amount it believes sufficient
to accommodate the excess Interests tendered as well as any Interests tendered
during the extended Offer; or (c) accept Interests tendered on or before the
Expiration Date for payment on a PRO RATA basis based on the aggregate net asset
value of tendered Interests. The Offer may be extended, amended or canceled in
various other circumstances described in (v) above.
(x) The repurchase 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
November 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 repurchase 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 repurchase of their
Interests by the Fund pursuant to the Offer.
In general, a Member from which an Interest is repurchased 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
repurchase, 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 repurchase 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 repurchased 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 repurchase Interests from Members
from time to time pursuant to
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written tenders. The Adviser expects that it will recommend to the Board of
Managers that the Fund repurchase 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 previously offered to
repurchase Interests from Members pursuant to written tender offers effective as
of December 31, 2004 and June 30, 2005. 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 repurchase by the Fund has not been repurchased within a period of two years
of the request.
ITEM 6. PURPOSES OF THIS TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER
OR AFFILIATE.
(a) The purpose of the Offer is to provide liquidity to Members that
hold Interests as contemplated by and in accordance with the procedures set
forth in the 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, except that, while candidates
to fill a vacancy are being considered, Mr. Bailey is serving as an interim
Manager until the vacancy is filled; (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 repurchase 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.
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(a) The Fund expects that the repurchase price for Interests acquired
pursuant to the Offer, which will not exceed $30 million (unless the Fund elects
to repurchase 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
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 repurchase 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 repurchase price for Interests, subject to compliance with applicable
law. If the Fund finances any portion of the repurchase 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 August 31, 2005 estimated values, there are no persons
holding interests 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
October 3, 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:
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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
Audited financial statements for fiscal year ended March 31, 2005,
previously filed on EDGAR on Form N-CSR on June 8, 2005.
(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 repurchased 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.
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.
-10-
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: /S/JAMES L. BAILEY
-------------------------
Name: James L. Bailey
Title: Principal Manager
October 14, 2005
-11-
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.
-12-
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 OFFER.
October 14, 2005
Dear Member:
We are writing to inform you of important dates relating to an offer
by Excelsior Absolute Return Fund of Funds Master Fund, LLC (the "Fund") to
repurchase limited liability company interests in the Fund ("Interest" or
"Interests" as the context requires) from investors (the "Offer"). If you are
not interested in selling your Interest at this time, please disregard this
notice and take no action.
The Offer period will begin at 12:01 a.m., Eastern Time, on Friday,
October 14, 2005. The purpose of the Offer is to provide liquidity to members of
the Fund holding Interests. Interests may be presented to the Fund for
repurchase only by tendering them during one of the Fund's announced tender
offers.
NO ACTION IS REQUIRED IF YOU DO NOT WISH TO SELL ANY PORTION OF YOUR
INTEREST AT THIS TIME. IF YOU DO NOT WISH TO SELL YOUR INTERESTS, SIMPLY
DISREGARD THIS NOTICE.
Should you wish to tender your Interest or a portion of your Interest
for repurchase 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 (if by fax, please deliver an original, execution copy promptly
thereafter). All tenders of Interests must be received by the Fund's adviser,
U.S. Trust Hedge Fund Management, Inc., in good order by November 10, 2005.
Please note that the enclosed postage-paid envelope is provided for convenience,
neither the Fund nor its adviser can guarantee that the package will be received
by November 10, 2005. If you are concerned about the timely delivery of this
Letter of Transmittal, you are encouraged to fax the Letter of Transmittal (by
November 10, 2005) prior to mailing it.
If you have any questions, please refer to the attached Offer
document, which contains additional important information about the tender
offer, or call Peggy Lynn 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 REPURCHASE UP TO $30 MILLION OF OUTSTANDING
INTERESTS AT NET ASSET VALUE
DATED OCTOBER 14, 2005
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, EASTERN TIME, ON THURSDAY, NOVEMBER 10, 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 repurchase for
cash on the terms and conditions set forth in this offer to repurchase and the
related Letter of Transmittal (which together constitute the "Offer") up to $30
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 December 30, 2005, if the Offer expires on November 10, 2005.
If the Fund elects to extend the tender offer period, for the purpose of
determining the repurchase 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 September 30, 2005 (the last time net
asset value was calculated) and December 30, 2005, when the value of Interests
tendered to the Fund for repurchase will be determined for purposes of
calculating the repurchase price of such Interests. Members tendering all or a
portion of their Interests should also note that they will remain Members, with
respect to the Interests tendered and accepted for repurchase by the Fund
through December 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: Peggy Lynn
Phone: (203) 352-4497
Fax: (203) 352-4456
B-2
TABLE OF CONTENTS
_________________
1. Background and Purpose of the Offer.......................................6
2. Offer to Repurchase and Price.............................................7
3. Amount of Tender..........................................................8
4. Procedure for Tenders.....................................................9
5. Withdrawal Rights.........................................................9
6. Repurchases and Payment...................................................9
7. Certain Conditions of the Offer..........................................11
8. Certain Information About the Fund.......................................12
9. Certain Federal Income Tax Consequences..................................13
10. Miscellaneous............................................................13
11. Financial Information....................................................14
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
repurchase 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 Thursday, November 10, 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 December 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 December 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
December 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") 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 September 2, 2003 (the "LLC Agreement")),
determined as of December 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 U.S. Trust Company, N.A. or an
affiliate bank (collectively, "U.S. Trust") or mailed to you if you do
not have a U.S. Trust 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 repurchase of Interests,
B-4
ten business days after we have received at least 95% of the total
amount withdrawn from such investment funds.
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 U.S. Trust
account or mailed to you if you do not have a U.S. Trust 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 U.S.
Trust or mailed to you if you do not have a U.S. Trust 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
repurchase 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 repurchase less
than the amount you tender if the repurchase 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 $30
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 repurchase
your Interest. This Offer remains open to you until 12:00 midnight,
Eastern Time, on Thursday, November 10, 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
December 12, 2005, 40 business days from the commencement of the
Offer, assuming your Interest has not yet been accepted for repurchase
by the Fund on or before that date.
B-5
o If you would like us to repurchase your Interest or a portion of
your Interest, you should (i) mail the Letter of Transmittal (enclosed
with the Offer), to our investment adviser, U.S. Trust Hedge Fund
Management, Inc. (the "Adviser"), 225 High Ridge Road, Stamford, CT
06905, attention Peggy Lynn, or (ii) fax it to the Adviser at (203)
352-4456, so that it is received before 12:00 midnight, Eastern Time,
on Thursday, November 10, 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 Thursday,
November 10, 2005. Of course, the value of your Interests will change
between September 30, 2005 (the last time net asset value was
calculated) and December 30, 2005, when the value of your Interest
will be determined for purposes of calculating the repurchase 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 Thursday,
November 10, 2005. Also realize that although the Offer expires on
Thursday, November 10, 2005, you will remain a Member with respect to
the Interest you tendered that is accepted for repurchase by the Fund
through December 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 repurchase 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 repurchase 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
repurchase Interests from Members pursuant to written tenders effective as of
December 31, 2004 and June 30, 2005. 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
B-6
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.
The Board of Managers intends to consider the continued desirability
of the Fund making an offer to repurchase Interests from time to time in the
future, but the Fund is not required to make any such offer.
The repurchase 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 November 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 REPURCHASE AND PRICE. The Fund will, on the terms and
subject to the conditions of the Offer, repurchase up to $30 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 repurchase price of an Interest tendered will be its net
asset value on December 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 August 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 AUGUST 31, 2005 WOULD BE
----------------------------- ------------------------
July 1, 2005 $255,657.97
April 1, 2005 $255,452.64
January 1, 2005 $256,620.16
October 1, 2004 $268,520.80
B-7
If You Invested $250,000 Your Unaudited Net Asset Value As Of
ON THE FOLLOWING CLOSING DATE AUGUST 31, 2005 WOULD BE
----------------------------- ------------------------
July 1, 2004 $269,839.48
April 1, 2004 $267,886.54
January 1, 2004 $274,952.11
December 1, 2003 $279,901.25
As of the close of business on August 31, 2005, there was
approximately $285,198,955 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
repurchase 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
repurchased 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 $30
million (or such greater amount as the Fund may elect to repurchase pursuant to
the Offer), the Fund will, on the terms and subject to the conditions of the
Offer, repurchase 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 $30 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 repurchase 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
B-8
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 Peggy Lynn, 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 Peggy Lynn, 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 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 repurchase by
the Fund, at any time after December 12, 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. REPURCHASES AND PAYMENT. For purposes of the Offer, the Fund will
be deemed to have accepted (and thereby repurchased) Interests that are tendered
as, if and when, it gives written notice to the tendering Member of its election
to repurchase such Interest. As
B-9
stated in Section 2 above, the repurchase price of an Interest tendered by any
Member will be the net asset value thereof determined as of December 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 repurchase 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 repurchased (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 repurchased) 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.
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 repurchase
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 repurchase 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 repurchase 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 repurchase 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 repurchase 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
repurchase 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.
B-10
Although the Fund has retained the option to pay all or a portion of
the repurchase price for Interests by distributing marketable securities, the
repurchase 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 U.S. Trust if the Member has an account with
U.S. Trust and will be subject upon withdrawal from such accounts to any fees
that U.S. Trust would customarily assess upon the withdrawal of cash from such
account. Those Members that do not have a U.S. Trust 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.
It is expected that cash payments for Interests acquired pursuant to
the Offer, which will not exceed $30 million (unless the Fund elects to
repurchase 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 repurchase 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 repurchase price,
subject to compliance with applicable law, through borrowings. If the Fund
finances any portion of the repurchase 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
repurchase 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 repurchase or pay for any Interests tendered pursuant to the
Offer; (b)
B-11
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
repurchase 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 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
repurchased; or (c) the Board of Managers determines that it is not in the best
interest of the Fund to repurchase 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, except that, while
candidates to fill a vacancy are being considered, Mr. Bailey is serving as an
interim Manager until the vacancy is filled; (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
repurchase price for
B-12
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 October 3,
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 August 31, 2005 estimated values, there are no
persons holding interests 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 repurchase 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 repurchase of their Interests by the Fund pursuant to the Offer.
In general, a Member from which an Interest is repurchased 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
repurchase, 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 repurchase 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 repurchase 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 repurchased 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.
B-13
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 100 F.
Street, N.E., 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
Audited financial statements for the fiscal year ended March 31, 2005,
previously filed on EDGAR on Form N-CSR on June 8, 2005.
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 October 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 THURSDAY, NOVEMBER 10, 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: Peggy Lynn
For additional information:
Phone: (203) 352-4497
Fax: (203) 352-4456
C-1
EXCELSIOR ABSOLUTE RETURN FUND OF FUNDS MASTER FUND, LLC - LETTER OF TRANSMITTAL
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 repurchase, dated October 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 repurchased 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 repurchase any of the Interests in
the Fund or portions thereof tendered hereby.
A promissory note for the repurchase price will be deposited into a
special custody account with PFPC Trust Company ("PFPC"). The initial payment of
the repurchase 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 U.S. Trust Company, N.A. or an affiliate bank (collectively, "U.S. Trust"),
or mailed to the address of record for the undersigned if the undersigned does
not have a U.S. Trust 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 U.S. Trust account, U.S. Trust may
subject such withdrawal to any fees that U.S. Trust 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 repurchase 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 U.S. Trust, or
will be mailed to the undersigned if the undersigned does not have a U.S. Trust
account. Upon a withdrawal of such cash from such account, U.S. Trust 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 repurchase price for
Interests will be based on the unaudited net asset value of the Fund, determined
as of December 30, 2005, subject to an extension of the Offer as described in
Section 7. The Contingent Payment portion of the repurchase 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
EXCELSIOR ABSOLUTE RETURN FUND OF FUNDS MASTER FUND, LLC - LETTER OF TRANSMITTAL
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: PEGGY LYNN. FOR ADDITIONAL INFORMATION: PHONE: (203) 352-4497 FAX: (203)
352-4456
PART 1. NAME AND ADDRESS:
Name of Member: ___________________________________________________
U.S. Trust Account Number (where applicable)__________________________
Social Security No.
or Taxpayer
Identification No.: __________________________
Telephone Number: ( )
__________________________
PART 2. AMOUNT OF LIMITED LIABILITY COMPANY INTEREST IN THE FUND BEING
TENDERED:
[ ] I would like to tender my entire limited liability company interest in
the Fund.
[ ] I would like to tender $_________ of my limited liability company
interest in the Fund. (Please note, the minimum tender is $25,000 and
a minimum interest with a value of $100,000, or more must be
maintained in the Fund (the "Required Minimum Balance").)*
[ ] I would like to leave $ of my limited liability company interest in
the Fund, and tender any remaining balance. (Please note, the minimum
tender is $25,000 and the Required Minimum Balance, or more must be
maintained in the Fund).*
*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 repurchased 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 U.S.
Trust, 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,
U.S. Trust may impose such fees as it would customarily assess upon
the withdrawal of cash from such account.
PROMISSORY NOTE
_______________
[X] The promissory note reflecting both the initial and contingent payment
portion of the repurchase 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
C-3
EXCELSIOR ABSOLUTE RETURN FUND OF FUNDS MASTER FUND, LLC - LETTER OF TRANSMITTAL
U.S. Trust or mailed to the address of record for the undersigned and
upon a withdrawal of such cash from a U.S. Trust account, U.S. Trust
may impose such fees as it would customarily assess upon the
withdrawal of cash from such account.
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 October 14, 2005
----------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE
AT, AND THIS NOTICE OF WITHDRAWAL MUST BE
RECEIVED BY THE FUND BY, 12:00 MIDNIGHT, EASTERN TIME,
ON THURSDAY, NOVEMBER 10, 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: Peggy Lynn
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 repurchase 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.
[ ] $________ of limited liability company interest expressed as a specific
dollar value.
The portion of limited liability company interest in excess of $_______.
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 repurchased
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 SENT IF THE MEMBER TENDERED ITS ENTIRE INTEREST IN THE FUND.]
November 30, 2005
Dear Member:
Excelsior Absolute Return Fund of Funds Master Fund, LLC (the "Fund")
has received and accepted for repurchase 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 repurchased your entire
investment, you have been paid a note (the "Note") entitling you to receive an
initial payment of 95% of the repurchase price based on the unaudited net asset
value of the Fund, determined as of December 30, 2005, in accordance with the
terms of the tender offer. A cash payment in this amount will be deposited into
your account with U.S. Trust Company, N.A. or an affiliate bank (collectively,
"U.S. Trust") on January 30, 2006 or a check will be mailed to you on that date
if you do not have a U.S. Trust 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 repurchase 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 U.S. Trust account or will be mailed to you if
you do not have a U.S. Trust 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 SENT IF THE MEMBER TENDERED A PORTION OF ITS INTEREST IN THE
FUND.]
November 30, 2005
Dear Member:
Excelsior Absolute Return Fund of Funds Master Fund, LLC (the "Fund")
has received and accepted for repurchase 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 repurchased a portion of
your investment, you have been paid a note (the "Note") entitling you to receive
an initial payment of 100% of the repurchase price based on the unaudited net
asset value of the Fund, determined as of December 30, 2005, in accordance with
the terms of the tender offer. A cash payment in this amount will be deposited
into your account with U.S. Trust Company, N.A. or an affiliate bank
(collectively, "U.S. Trust") on January 30, 2006 or a check will be mailed to
you on that date if you do not have a U.S. Trust 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 SENT TO THE MEMBER WITH THE INITIAL PAYMENT FOR ALL OF YOUR
INTEREST WHICH WAS REPURCHASED BY THE FUND.]
January 30, 2006
Dear Member:
Enclosed is a statement showing the breakdown of your capital
withdrawal resulting from our repurchase of your interest in Excelsior Absolute
Return Fund of Funds Master Fund, LLC (the "Fund").
Because you have tendered and the Fund has repurchased your entire
investment, you have previously been paid a note entitling you to receive 95% of
the repurchase price based on the unaudited net asset value of the Fund,
determined as of December 30, 2005, in accordance with the terms of the tender
offer. A cash payment in this amount is being deposited into your account with
U.S. Trust Company, N.A. or an affiliate bank (collectively, "U.S. Trust") on
January 30, 2006, if you have a U.S. Trust account. If you do not have a U.S.
Trust 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 SENT TO THE MEMBER WITH THE INITIAL PAYMENT FOR THE PORTION OF
ITS INTEREST WHICH WAS REPURCHASED BY THE FUND.]
January 30, 2006
Dear Member:
Enclosed is a statement showing the breakdown of your capital
withdrawal resulting from our repurchase of your interest in Excelsior Absolute
Return Fund of Funds Master Fund, LLC (the "Fund").
Because you have tendered and the Fund has repurchased a portion of
your investment, you have been paid 100% of the repurchase price based on the
estimated unaudited net asset value of the Fund, determined as of December 30,
2005, in accordance with the terms of the tender offer. A cash payment in this
amount is being deposited into your account with U.S. Trust Company, N.A. or an
affiliate bank (collectively, "U.S. Trust") on January 30, 2006, if you have a
U.S. Trust account. If you do not have a U.S. Trust 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 SENT TO THE MEMBER 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 repurchase 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 U.S. Trust Company, N.A. or an affiliate
bank (collectively, "U.S. Trust") on June 9, 2006 if you have a U.S. Trust
account. If you do not have a U.S. Trust 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