SAWGRASS FUND LLC
POS AMI, 2000-02-29
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    As filed with the Securities and Exchange Commission on February 29, 2000

                    Investment Company Act File No. 811-09727
- --------------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                              ---------------------

                                    FORM N-2

                        (Check appropriate box or boxes)

[X]  REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

[X]  Amendment No. 1

                              ---------------------

                              SAWGRASS FUND, L.L.C.
               (Exact name of Registrant as specified in Charter)

                           One World Financial Center
                                   31st Floor
                               200 Liberty Street
                            New York, New York 10281
                    (Address of principal executive offices)

       Registrant's Telephone Number, including Area Code: (212) 667-4225

                              ---------------------

                              c/o HOWARD M. SINGER
                                Managing Director
                            CIBC World Markets Corp.
                           One World Financial Center
                                   31st Floor
                               200 Liberty Street
                            New York, New York 10281
                     (Name and address of agent for service)

                                    Copy to:
                            KENNETH S. GERSTEIN, ESQ.
                            Schulte Roth & Zabel LLP
                                900 Third Avenue
                            New York, New York 10022

- --------------------------------------------------------------------------------

This  Registration  Statement has been filed by  Registrant  pursuant to Section
8(b) of the  Investment  Company  Act of  1940,  as  amended.  Interests  in the
Registrant are not being registered under the Securities Act of 1933, as amended
(the "1933 Act"),  and will be issued solely in private  placement  transactions
that do not involve any "public  offering" within the meaning of Section 4(2) of
the 1933 Act.  Investments  in  Registrant  may only be made by  individuals  or
entities  that are  "accredited  investors"  within the meaning of  Regulation D
under the 1933 Act. This Registration  Statement does not constitute an offer to
sell, or the solicitation of an offer to buy, any interests in Registrant.

<PAGE>


                                                   Copy Number: ________________



                        --------------------------------


                              SAWGRASS FUND, L.L.C.

                         -------------------------------


                             CONFIDENTIAL MEMORANDUM
                                  January 2000

                         ------------------------------

                        CIBC Oppenheimer Advisers, L.L.C.

                               Investment Adviser
                         ------------------------------


                     One World Financial Center, 31st Floor
                               200 Liberty Street
                            New York, New York 10281
                                 (212) 667-4225



In making an investment decision, investors must rely upon their own examination
of Sawgrass Fund, L.L.C. and the terms of the offering, including the merits and
risks involved.  The interests in Sawgrass Fund, L.L.C.  ("Interests")  have not
been  registered  with or approved or disapproved by the Securities and Exchange
Commission  or any other  Federal  or state  governmental  agency or  regulatory
authority or any national securities exchange. No agency,  authority or exchange
has passed upon the accuracy or adequacy of this Confidential  Memorandum or the
merits of an investment in the Interests offered hereby.  Any  representation to
the contrary is a criminal offense.

<PAGE>


                                TO ALL INVESTORS

     Interests are not insured by the United States  Federal  Deposit  Insurance
Corporation  or any other  governmental  agency.  Interests  are not deposits or
other  obligations  of, and are not  guaranteed  by,  Canadian  Imperial Bank of
Commerce or any other bank. Interests are subject to investment risks, including
the possible loss of the full amount invested.

     Interests have not been and will not be registered under the Securities Act
of 1933,  as amended  (the "1933  Act"),  or the  securities  laws of any of the
states of the United  States.  The offering  contemplated  by this  Confidential
Memorandum  will be made in reliance  upon an  exemption  from the  registration
requirements  of the 1933 Act for  offers  and sales of  securities  that do not
involve any public  offering,  and analogous  exemptions  under state securities
laws.

     This  Confidential  Memorandum shall not constitute an offer to sell or the
solicitation  of an offer to buy nor shall there be any sale of Interests in any
jurisdiction  in which such offer,  solicitation or sale is not authorized or to
any person to whom it is unlawful to make such offer,  solicitation  or sale. No
person has been authorized to make any representations concerning Sawgrass Fund,
L.L.C.   that  are  inconsistent  with  those  contained  in  this  Confidential
Memorandum.  Prospective  investors  should  not  rely  on any  information  not
contained in this Confidential Memorandum or the exhibits hereto.

     This  Confidential  Memorandum is intended solely for the use of the person
to whom  it has  been  delivered  for  the  purpose  of  evaluating  a  possible
investment by the recipient in the Interests  described herein, and is not to be
reproduced or distributed to any other persons (other than professional advisers
of the prospective investor receiving this document).

     Prospective investors should not construe the contents of this Confidential
Memorandum as legal, tax or financial advice.  Each prospective  investor should
consult his or her own professional  advisers as to the legal, tax, financial or
other matters  relevant to the  suitability  of an investment in Sawgrass  Fund,
L.L.C. for such investor.

     These securities are subject to substantial restrictions on transferability
and resale and may not be  transferred  or resold except as permitted  under the
limited liability company agreement of Sawgrass Fund,  L.L.C., the 1933 Act, and
applicable  state  securities  laws,   pursuant  to  registration  or  exemption
therefrom.  Investors  should  be aware  that they may be  required  to bear the
financial  risks of this investment for up to two (2) years from the date that a
repurchase request has been made by an investor.

                           FOR GEORGIA RESIDENTS ONLY

     These  securities have been issued or sold in reliance on paragraph (13) of
code section  10-5-9 of the Georgia  Securities Act of 1973, and may not be sold
or  transferred  except  in a  transaction  which is  exempt  under  such act or
pursuant to an effective registration under such Act.

<PAGE>


                                TABLE OF CONTENTS

                                                                            Page

SUMMARY OF TERMS............................................................. 1

THE COMPANY..................................................................12

STRUCTURE....................................................................12

INVESTMENT PROGRAM...........................................................12

TYPES OF INVESTMENTS AND RELATED RISK FACTORS................................15

ADDITIONAL RISK FACTORS......................................................28

PERFORMANCE INFORMATION......................................................30

BOARD OF MANAGERS............................................................30

COMPENSATION TABLE...........................................................32

THE ADVISER, CIBC WM AND CWH ASSOCIATES, INC.................................33

VOTING.......................................................................36

CONFLICTS OF INTEREST........................................................36

BROKERAGE....................................................................39

FEES AND EXPENSES............................................................41

CAPITAL ACCOUNTS AND ALLOCATIONS.............................................43

SUBSCRIPTION FOR INTERESTS...................................................47

REDEMPTIONS, REPURCHASES OF INTERESTS AND TRANSFERS..........................49

TAX ASPECTS..................................................................53

ERISA CONSIDERATIONS.........................................................66

ADDITIONAL INFORMATION AND SUMMARY OF LIMITED LIABILITY COMPANY AGREEMENT....67


APPENDIX A     LIMITED LIABILITY COMPANY AGREEMENT.......................... A-1
APPENDIX B     PERFORMANCE INFORMATION...................................... B-1

<PAGE>


                                SUMMARY OF TERMS

     The  following  summary is qualified  entirely by the detailed  information
appearing  elsewhere  in  this  Confidential  Memorandum  and by the  terms  and
conditions of the limited  liability  company agreement of Sawgrass Fund, L.L.C.
(the "Company  Agreement"),  each of which should be read carefully and retained
by any prospective investor.

The Company:                            Sawgrass Fund, L.L.C. (the "Company") is
                                        a  recently  formed   Delaware   limited
                                        liability company,  registered under the
                                        Investment  Company  Act  of  1940  (the
                                        "1940    Act")    as    a    closed-end,
                                        non-diversified,  management  investment
                                        company.

                                        The Company is a specialized  investment
                                        vehicle  that  may be  referred  to as a
                                        registered private  investment  company.
                                        The    Company    is   similar   to   an
                                        unregistered      private     investment
                                        partnership  in that  (i) the  Company's
                                        portfolio may be more  actively  managed
                                        than most  other  investment  companies,
                                        (ii)    interests    in   the    Company
                                        ("Interests")  are sold in comparatively
                                        large minimum  denominations  in private
                                        placements  solely  to  high  net  worth
                                        individual and institutional  investors,
                                        and thus are  restricted as to transfer,
                                        and  (iii)  the   capital   accounts  of
                                        persons who purchase  Interests  offered
                                        hereby  ("Members")  are subject to both
                                        asset-based          charges         and
                                        performance-based     allocations     in
                                        connection     with    the     Company's
                                        activities.  Unlike a private investment
                                        partnership  but like  other  registered
                                        investment   companies,   however,   the
                                        Company  has  registered  under the 1940
                                        Act to be able to  offer  its  Interests
                                        without limiting the number of investors
                                        that can  participate  in its investment
                                        program.

Investment Program:                     The Company's investment objective is to
                                        seek    superior    long-term    capital
                                        appreciation.  It pursues this objective
                                        by investing its assets primarily in the
                                        equity  securities  of small  to  medium
                                        size    emerging    growth    companies.
                                        Generally, the Company's investment time
                                        horizon,   i.e.,  the  time  period  the
                                        Company will hold its investments,  will
                                        be greater  than one year.  The  Company
                                        may effect short sales of securities and
                                        may  invest in debt  securities.  It may
                                        also   utilize   various    derivatives,
                                        including   options  on  securities  and
                                        stock index  options.  In  pursuing  its
                                        investment  objective,  the  Company may
                                        from time to time  borrow  money for the
                                        purchase  of   investments  (a  practice
                                        known as "leverage").


                                      -1-
<PAGE>


                                        CIBC Oppenheimer  Advisers,  L.L.C., the
                                        investment  adviser of the Company  (the
                                        "Adviser"),   will  rely  on  investment
                                        research  and  fundamental  analysis  of
                                        company  financial  data in  seeking  to
                                        identify      attractive      investment
                                        opportunities   for  the  Company.   The
                                        research    process   involves   company
                                        visits, continuous updating of valuation
                                        models, review and analysis of published
                                        research and  discussions  with industry
                                        sources.

                                        The Adviser  will  invest the  Company's
                                        assets based upon intensive  fundamental
                                        research and theme  analysis (as further
                                        described  herein).  Theme analysis will
                                        be central to the  Adviser's  investment
                                        decision    making     process.     (See
                                        "Investment Program.")

                                        In pursuing its investment objective, or
                                        for  hedging  purposes,  the Company may
                                        use various  investment  techniques  and
                                        strategies. These may include the use of
                                        leverage,  short sales of securities and
                                        the  purchase  and  sale of  options  on
                                        securities and stock indices, subject to
                                        certain limitations  described elsewhere
                                        in this Confidential Memorandum. The use
                                        of  these   investment   techniques  and
                                        instruments involves certain risks. (See
                                        "Types of  Investments  and Related Risk
                                        Factors.")

Risk Factors:                           The  Company's   investment  program  is
                                        speculative   and  entails   substantial
                                        risks.  There can be no  assurance  that
                                        the Company's  investment objective will
                                        be   achieved.   In   particular,    the
                                        Company's  use of leverage,  short sales
                                        and   derivative    transactions,    and
                                        potentially limited diversification can,
                                        in  certain  circumstances,   result  in
                                        significant   losses  to  the   Company.
                                        Additionally,  the  Company's  focus  on
                                        small  to  medium  size  issuers   could
                                        subject  the   Company's   portfolio  to
                                        greater  volatility or risk of loss than
                                        if the Company's portfolio were invested
                                        in    the     securities    of    larger
                                        capitalization, established issuers.

                                        As a non-diversified investment company,
                                        there are no percentage  limitations  on
                                        the portion of the Company's assets that
                                        may be invested in the securities of any
                                        one  issuer.   The  Company  intends  to
                                        invest  no more than 15% of the value of
                                        its total  assets in the  securities  of
                                        any one issuer.  However,  while seeking
                                        desirable  investments,  the Company may
                                        temporarily exceed this limitation.  The
                                        Company's  investment  portfolio  may be
                                        subject to greater  risk and  volatility
                                        than  if  investments  were  made in the
                                        securities   of  a   broader   range  of
                                        issuers.


                                      -2-
<PAGE>


                                        The Company will invest primarily in the
                                        securities  of  U.S.  issuers,  but  may
                                        invest a  portion  of its  assets in the
                                        securities    of    foreign     issuers.
                                        Investments  in foreign  securities  are
                                        affected by risk factors  generally  not
                                        thought  to  be  present  in  the  U.S.,
                                        including, among other things, increased
                                        political,  regulatory,  contractual and
                                        economic  risk and  exposure to currency
                                        fluctuations.  Certain  other  types  of
                                        investments,  such  as  derivatives  and
                                        illiquid   investments,   also   involve
                                        particular risks as described herein.

                                        The Incentive Allocation, defined below,
                                        may create an incentive  for the Adviser
                                        to cause the Company to make investments
                                        that  are  riskier  or more  speculative
                                        than would be the case in the absence of
                                        the Incentive  Allocation.  In addition,
                                        because  the  Incentive   Allocation  is
                                        calculated  on  a  basis  that  includes
                                        unrealized appreciation of the Company's
                                        assets,  the  allocation  may be greater
                                        than if it were based solely on realized
                                        gains.

                                        The Company is a recently  formed entity
                                        and has no operating  history upon which
                                        investors can evaluate its  performance.
                                        The  personnel  of  the  members  of the
                                        Adviser  responsible  for  managing  the
                                        Company's investment portfolio, however,
                                        have substantial  experience in managing
                                        investments   and   private   investment
                                        partnerships.

                                        Interests   are   not   traded   on  any
                                        securities  exchange or other market and
                                        are subject to substantial  restrictions
                                        on  transfer.  Although  the Company may
                                        offer to repurchase  Interests from time
                                        to  time,  a  Member  may not be able to
                                        liquidate  its  Interest  for  up to two
                                        years.  (See "Types of  Investments  and
                                        Related Risk  Factors,"  "Tax  Aspects,"
                                        and    "Redemptions,    Repurchases   of
                                        Interests and Transfers.")

Management:                             The  board of  managers  of the  Company
                                        (the  "Board of  Managers")  has overall
                                        responsibility  for the  management  and
                                        supervision  of  the  operations  of the
                                        Company.  Any vacancy in the position of
                                        Manager  may be filled by the  remaining
                                        Managers,  or, if  required  by the 1940
                                        Act,  by a vote  of a  plurality  of the
                                        votes cast at any meeting of the Members
                                        (excluding any votes eligible to be cast
                                        by the Members affiliated with CIBC WM).
                                        (See "Board of Managers" and "Voting.")

                                        The  Managers  of the  Company  may also
                                        serve on the  boards  of  several  other
                                        CIBC WM investment  funds.  As a


                                      -3-
<PAGE>


                                        result,  the Company may be deemed to be
                                        controlled  by CIBC WM for  purposes  of
                                        applicable   banking  laws.  This  could
                                        subject    the    Company   to   certain
                                        limitations on its ability to own equity
                                        securities  of  certain  issuers.   (See
                                        "Investment         Policies         And
                                        Restrictions."). The Adviser may also be
                                        deemed  to  control   the   Company  for
                                        purposes of the 1940 Act.

Adviser:                                The Adviser,  CIBC Oppenheimer Advisers,
                                        L.L.C.,  a  Delaware  limited  liability
                                        company,   serves   as  the   investment
                                        adviser   of   the    Company   and   is
                                        responsible  for managing the  Company's
                                        investment  portfolio  pursuant  to  the
                                        terms   of   an   investment    advisory
                                        agreement  with the Company.  CIBC WM is
                                        the  managing   member  and  controlling
                                        person   of   the   Adviser,   and   CWH
                                        Associates,    Inc.   ("CWH"),    is   a
                                        non-managing   member  of  the  Adviser.
                                        Investment professionals employed by CWH
                                        will  manage  the  Company's  investment
                                        portfolio on behalf of the Adviser under
                                        the  supervision of CIBC WM. The Adviser
                                        holds  a  non-voting   Special  Advisory
                                        Member  interest (the "Special  Advisory
                                        Account") in the Company  solely for the
                                        purpose  of  receiving   the   Incentive
                                        Allocation.

                                        CIBC WM (directly or through affiliates,
                                        including    the    Adviser)    provides
                                        investment    advisory    services    to
                                        registered investment companies, private
                                        investment  partnerships  and individual
                                        client  accounts.  CWH  is a  registered
                                        investment      adviser      that     is
                                        majority-owned by Clifford W. Henry. Mr.
                                        Henry has over twenty  years  experience
                                        in   the   investment   management   and
                                        securities  industries.  As of  December
                                        31,  1999,  CWH  had  approximately  $65
                                        million of assets under management.

                                        The   Company   has   entered   into  an
                                        investment   advisory   agreement   (the
                                        "Investment  Advisory  Agreement")  with
                                        the Adviser,  which is effective  for an
                                        initial term  expiring  January 5, 2002,
                                        and may be continued in effect from year
                                        to year thereafter if the continuance is
                                        approved   annually   by  the  Board  of
                                        Managers.  The  Board  of  Managers  may
                                        terminate   the   Investment    Advisory
                                        Agreement  on  60  days'  prior  written
                                        notice to the Adviser.

Placement Agent:                        CIBC WM acts as the placement  agent for
                                        the     Company,     without     special
                                        compensation from the Company,  and will
                                        bear   costs    associated    with   its
                                        activities as placement agent. The Board
                                        of  Managers  may  terminate  CIBC WM as
                                        placement   agent  on  30  days'   prior
                                        written  notice.   CIBC


                                      -4-
<PAGE>


                                        WM intends  to  compensate  its  account
                                        executives  for their ongoing  servicing
                                        of  clients  with whom they have  placed
                                        Interests.  This  compensation  will  be
                                        based  on  a  formula  that  takes  into
                                        account  the  amount  of  client  assets
                                        being serviced as well as the investment
                                        results  attributable to clients' assets
                                        invested in the Company. (See "Conflicts
                                        Of Interest - CIBC WM.")

                                        CIBC WM (subject to the  approval of the
                                        Board of  Managers)  may delegate any of
                                        its  duties,   functions  or  powers  as
                                        placement    agent    to    unaffiliated
                                        third-parties  to act  as  sub-placement
                                        agents   for   the   Company   and   may
                                        compensate  them  therefor.  The Company
                                        will not bear any costs  associated with
                                        any such arrangements.

Conflicts of Interest:                  Certain  conflicts of interest may arise
                                        from the following: (i) CIBC WM, CWH and
                                        their respective  affiliates,  including
                                        the   Adviser,   may  each   engage   in
                                        investment   management  activities  for
                                        their own  accounts  and the accounts of
                                        others  in  which  the  Company  has  no
                                        interest   and  may   have   actual   or
                                        potential  conflicts  of  interest  with
                                        respect  to  investments   made  by  the
                                        Adviser on behalf of the  Company;  (ii)
                                        CWH  and  its  affiliates   will  manage
                                        accounts  (in which the  Company  has no
                                        interest)  of certain  other  persons in
                                        accordance  with an  investment  program
                                        that  is  substantially  similar  to the
                                        Company's  investment  program,  but (a)
                                        these   accounts  may  commit  a  larger
                                        percentage of their respective assets to
                                        an  investment   opportunity   than  the
                                        Adviser  may  commit  of  the  Company's
                                        assets    and   (b)    there    may   be
                                        circumstances  under  which  CWH and its
                                        affiliates  will consider  participation
                                        by   such    accounts   in    investment
                                        opportunities  in which the Adviser does
                                        not  intend  to  invest on behalf of the
                                        Company;   (iii)  situations  may  occur
                                        where the Company could be disadvantaged
                                        because  of  the  investment  activities
                                        conducted by CWH and its  affiliates for
                                        accounts  they manage;  (iv) the Company
                                        may enter into certain transactions with
                                        one or more accounts that are managed by
                                        CWH  or  its  affiliates,  but  only  in
                                        accordance  with the 1940  Act;  (v) the
                                        Adviser, CWH and any of their respective
                                        affiliates  may  in the  future  provide
                                        investment  advisory  services from time
                                        to    time   to    private    investment
                                        partnerships   or  other   entities   or
                                        accounts  that are  advised  by CIBC WM,
                                        CWH or their respective affiliates; (vi)
                                        CWH  and  its   affiliates  may  receive
                                        research   products   and   services  in
                                        connection  with the brokerage  services
                                        that  CIBC  WM and  its  affiliates  may
                                        provide  from time to time (a) to one or
                                        more  entities  managed  by  CWH  or its
                                        affiliates or (b) to


                                      -5-
<PAGE>


                                        the Company; (vii) from time to time, in
                                        the ordinary course of their  brokerage,
                                        investment or dealer activities, CIBC WM
                                        and its affiliates  may trade,  position
                                        or invest  in,  for their own  accounts,
                                        the  same  securities  as those in which
                                        the   Company   invests;    (viii)   the
                                        investment banking and corporate finance
                                        activities of CIBC WM, Canadian Imperial
                                        Bank of Commerce,  the parent company of
                                        CIBC WM, and its  respective  affiliates
                                        may  restrict the ability of the Company
                                        to purchase or sell certain  securities;
                                        and  (ix)  the  Adviser,   CIBC  WM  and
                                        affiliates  of  CIBC WM are  subject  to
                                        regulation   under   the  Bank   Holding
                                        Company Act and to restrictions  imposed
                                        by the Board of Governors of the Federal
                                        Reserve System on their transactions and
                                        relationships with the Company and these
                                        restrictions  may affect the investments
                                        made by the Company.  Future  activities
                                        of CIBC  WM,  CWH and  their  respective
                                        affiliates,   including  the  respective
                                        directors,   principals,   officers  and
                                        employees  of the  foregoing,  may  give
                                        rise   to   additional    conflicts   of
                                        interest. (See "Conflicts Of Interest.")

Fees and Expenses:                      CIBC WM provides certain  administration
                                        and  investor  services to the  Company,
                                        including, among other things, providing
                                        office space and other support  services
                                        to   the   Company,    maintaining   and
                                        preserving   certain   records   of  the
                                        Company,  preparing  and filing  various
                                        materials   with   state   and   Federal
                                        regulators,    providing    legal    and
                                        regulatory  advice  in  connection  with
                                        administrative  functions  and reviewing
                                        and   arranging   for   payment  of  the
                                        Company's expenses. In consideration for
                                        these services, the Company pays CIBC WM
                                        a monthly administration fee of 0.08333%
                                        (1%  on  an  annualized  basis)  of  the
                                        Company's   net  assets  (the  "CIBC  WM
                                        Fee").  The  CIBC WM Fee is paid to CIBC
                                        WM  out  of the  Company's  assets,  and
                                        debited   against    Members'    capital
                                        accounts  (but not the Special  Advisory
                                        Account).  A portion  of the CIBC WM Fee
                                        is paid by CIBC WM to CWH.

                                        The Company bears all expenses  incurred
                                        in  connection  with  its  business  and
                                        operations,  including,  but not limited
                                        to,   the   following:   all  costs  and
                                        expenses     related    to     portfolio
                                        transactions   and   positions  for  the
                                        Company's   account,   including:   fees
                                        payable     to      consultants      and
                                        professionals;  legal  fees;  accounting
                                        fees;   custody   expenses;   costs   of
                                        insurance;       organizational      and
                                        registration expenses;  certain offering
                                        expenses;  expenses  of  meetings of the
                                        Board of Managers and Members;  the CIBC
                                        WM Fee;  and fees


                                      -6-
<PAGE>


                                        payable  to  PFPC  Inc.  for   providing
                                        certain  administration,  accounting and
                                        investor  services to the Company.  (See
                                        "Fees and Expenses.") These expenses are
                                        not  charged  to  the  Special  Advisory
                                        Account.

Sales Charge:                           Investors  purchasing  Interests  may be
                                        charged sales commissions of up to 3% of
                                        the  amount  transmitted  in  connection
                                        with their  subscriptions for Interests.
                                        (See "Subscription for Interests.")

Allocation of Profit and Loss:          The net  profits  or net  losses  of the
                                        Company (including,  without limitation,
                                        net  realized  gain or loss  and the net
                                        change  in  unrealized  appreciation  or
                                        depreciation  of  securities  positions)
                                        are  credited to or debited  against the
                                        capital  accounts  of the Members at the
                                        end of each fiscal  period in accordance
                                        with   their    respective    investment
                                        percentages   for   the   period.   Each
                                        Member's   investment    percentage   is
                                        determined  by  dividing as of the start
                                        of a fiscal  period  the  balance of the
                                        Member's  capital  account by the sum of
                                        the balances of the capital  accounts of
                                        all Members.  (See "Capital Accounts and
                                        Allocations  - Allocation of Net Profits
                                        and Net Losses.")

Incentive Allocation:                   Generally  at  the  end of  each  fiscal
                                        year, an incentive  allocation of 20% of
                                        the net profits,  if any, that have been
                                        credited  to the  capital  account  of a
                                        Member during the period (an  "Incentive
                                        Allocation")  will be  debited  from the
                                        Member's capital account and credited to
                                        the  Special   Advisory   Account.   The
                                        Incentive  Allocation  is  charged  to a
                                        Member   only   to   the   extent   that
                                        cumulative  net profits  with respect to
                                        the  Member  through  the  close  of any
                                        period  exceeds  the  highest  level  of
                                        cumulative  net profits  with respect to
                                        the  Member  through  the  close  of any
                                        prior   period.    For   this   purpose,
                                        cumulative  net profits will be adjusted
                                        to reflect any repurchases of a Member's
                                        Interest.  The Adviser may  withdraw any
                                        Incentive  Allocation  credited  to  its
                                        Special  Advisory  Account  by the  last
                                        business day of the month  following the
                                        date on which the  Incentive  Allocation
                                        was made.  (See  "Capital  Accounts  and
                                        Allocations - Incentive Allocation.")

Subscription for Interests:             The minimum  initial  investment  in the
                                        Company  is  $150,000  and  the  minimum
                                        additional  investment in the Company is
                                        $25,000,  subject to the sole discretion
                                        of  the  Board  of  Managers  to  accept
                                        initial and  additional  investments  in
                                        lesser   amounts.   In  connection  with
                                        initial and  additional  investments,  a
                                        sales  charge of up to 3% of


                                      -7-
<PAGE>


                                        the   amount    transmitted   for   such
                                        investments  may be  imposed in the sole
                                        discretion  of  the  investor's  account
                                        executive.   Amounts   paid   as   sales
                                        charges,   if  any,   are  included  for
                                        purposes    of    determining    whether
                                        applicable       minimum      investment
                                        requirements have been satisfied.

                                        For the  first  twelve  months  from the
                                        date the Company  commences  operations,
                                        the Board of Managers may accept initial
                                        and   additional    subscriptions    for
                                        Interests  as of the  first  day of each
                                        month. Thereafter, the Board of Managers
                                        may  accept   initial   and   additional
                                        subscriptions  for Interests by eligible
                                        investors   at  such  times  as  may  be
                                        determined by the Board of Managers, but
                                        not more frequently than as of the first
                                        day of each calendar quarter, unless the
                                        Board of Managers  has received a letter
                                        from   counsel   stating   that,   under
                                        applicable  banking  laws,  the Board of
                                        Managers   may   accept    initial   and
                                        additional  subscriptions  from eligible
                                        investors on a more frequent basis.  All
                                        subscriptions are subject to the receipt
                                        of  cleared   funds  on  or  before  the
                                        acceptance date and require the investor
                                        to  submit  a   completed   subscription
                                        document before the acceptance date. The
                                        Board of Managers  reserves the right to
                                        reject any  subscription  for Interests.
                                        The Board of  Managers  may, in its sole
                                        discretion,  suspend  subscriptions  for
                                        Interests  at any  time.  The  Board  of
                                        Managers has  authorized  the Company to
                                        accept   initial    subscriptions    for
                                        Interests  from  eligible  investors who
                                        are directors, officers or employees (or
                                        members of their  families)  of CIBC WM,
                                        CWH or their  respective  affiliates  in
                                        amounts of  $50,000  or more.  Interests
                                        may  not  be  purchased  by  nonresident
                                        aliens,  foreign  corporations,  foreign
                                        partnerships,  foreign trusts or foreign
                                        estates,  all as defined in the Internal
                                        Revenue  Code of 1986,  as amended  (the
                                        "Code").   In   addition,   because  the
                                        Company may generate "unrelated business
                                        taxable  income"  ("UBTI"),   charitable
                                        remainder   trusts   may  not   want  to
                                        purchase  Interests because a charitable
                                        remainder  trust will not be exempt from
                                        Federal  income tax under Section 664(c)
                                        of the Code for any year in which it has
                                        UBTI.

Initial Closing Date:                   The anticipated initial closing date for
                                        subscriptions for Interests is March 15,
                                        2000.

Transfer Restrictions:                  Interests   held  by   Members   may  be
                                        transferred only (i) by operation of law
                                        pursuant   to   the   death,    divorce,
                                        bankruptcy, insolvency or dissolution of
                                        a Member or (ii) under  certain  limited
                                        circumstances,  with the written consent
                                        of the


                                      -8-
<PAGE>


                                        Board of Managers (which may be withheld
                                        in its sole  discretion  and is expected
                                        to be  granted,  if at all,  only  under
                                        extenuating circumstances). The Board of
                                        Managers generally will not consent to a
                                        transfer unless the following conditions
                                        are met: (i) the transferring Member has
                                        been a Member  for at least six  months;
                                        (ii) the proposed transfer is to be made
                                        on the effective date of an offer by the
                                        Company  to  repurchase  Interests;  and
                                        (iii) the transfer does not constitute a
                                        change  in  beneficial  ownership.   The
                                        foregoing permitted transferees will not
                                        be allowed to become substituted Members
                                        without  the  consent  of the  Board  of
                                        Managers,  which may be  withheld in its
                                        sole discretion.  A Member who transfers
                                        an  Interest  may be charged  reasonable
                                        expenses,   including   attorneys'   and
                                        accountants'   fees,   incurred  by  the
                                        Company in connection with the transfer.
                                        (See   "Redemptions,    Repurchases   of
                                        Interests  and  Transfers - Transfers of
                                        Interests.")

Withdrawals and Repurchases
of Interests by the Company:            No Member has the right to  require  the
                                        Company  to  redeem  its  Interest.  The
                                        Company  may from time to time  offer to
                                        repurchase Interests pursuant to written
                                        tenders by Members.  Repurchases will be
                                        made at such  times and on such terms as
                                        may  be   determined  by  the  Board  of
                                        Managers,  in its  sole  discretion.  In
                                        determining  whether the Company  should
                                        repurchase Interests or portions thereof
                                        from   Members   pursuant   to   written
                                        tenders,  the  Board  of  Managers  will
                                        consider  the   recommendation   of  the
                                        Adviser.  The  Adviser  expects  that it
                                        will  recommend to the Board of Managers
                                        that the  Company  offer  to  repurchase
                                        Interests  from  Members  at the  end of
                                        2000.  Thereafter,  the Adviser  expects
                                        that it generally  will recommend to the
                                        Board of Managers that the Company offer
                                        to  repurchase  Interests  from  Members
                                        twice each year, effective at the end of
                                        the second  fiscal  quarter and again at
                                        the  end  of  the  year.  The  Board  of
                                        Managers    will   also   consider   the
                                        following  factors,   among  others,  in
                                        making this  determination:  (i) whether
                                        any  Members  have  requested  to tender
                                        Interests  or  portions  thereof  to the
                                        Company;   (ii)  the  liquidity  of  the
                                        Company's  assets;  (iii) the investment
                                        plans and working  capital  requirements
                                        of  the   Company;   (iv)  the  relative
                                        economies  of scale with  respect to the
                                        size of the Company;  (v) the history of
                                        the Company in repurchasing Interests or
                                        portions  thereof;   (vi)  the  economic
                                        condition of the securities markets; and
                                        (vii) the anticipated  tax  consequences
                                        of any proposed repurchases of Interests
                                        or portions thereof.  (See


                                      -9-
<PAGE>


                                        "Redemptions,  Repurchases  of Interests
                                        and Transfers - No Right of  Redemption"
                                        and "- Repurchases of Interests.")

                                        The Company Agreement  provides that the
                                        Company   shall  be   dissolved  if  the
                                        Interest   of  any   Member   that   has
                                        submitted   a   written   request,    in
                                        accordance with the terms of the Company
                                        Agreement, to tender its entire Interest
                                        for  repurchase  by the  Company has not
                                        been repurchased  within a period of two
                                        years of the request.

Summary of Taxation:                    Counsel to the  Company  will  render an
                                        opinion that the Company will be treated
                                        as  a   partnership   and   not   as  an
                                        association taxable as a corporation for
                                        Federal income tax purposes.  Counsel to
                                        the Company also will render its opinion
                                        that, under a "facts and  circumstances"
                                        test set forth in regulations adopted by
                                        the  U.S.   Treasury   Department,   the
                                        Company   will  not  be   treated  as  a
                                        "publicly traded partnership" taxable as
                                        a corporation.  Accordingly, the Company
                                        should not be subject to Federal  income
                                        tax, and each Member will be required to
                                        report on its own annual tax return such
                                        Member's   distributive   share  of  the
                                        Company's taxable income or loss.

                                        If it were  determined  that the Company
                                        should be treated as an association or a
                                        publicly traded partnership taxable as a
                                        corporation (as a result of a successful
                                        challenge  to the  opinions  rendered by
                                        counsel to the  Company  or  otherwise),
                                        the taxable  income of the Company would
                                        be subject to  corporate  income tax and
                                        any  distributions  of profits  from the
                                        Company  would be treated as  dividends.
                                        (See "Tax Aspects.")

ERISA Plans and Other
Tax-Exempt Entities:                    Investors   subject   to  the   Employee
                                        Retirement  Income Security Act of 1974,
                                        as   amended   ("ERISA"),    and   other
                                        tax-exempt     entities     (each,     a
                                        "tax-exempt"    entity)   may   purchase
                                        Interests with the approval of the Board
                                        of  Managers.  The  Company  may utilize
                                        leverage in connection  with its trading
                                        activities.   Therefore,   a  tax-exempt
                                        Member may incur  income  tax  liability
                                        with  respect  to its  share  of the net
                                        profits     from     these     leveraged
                                        transactions  to  the  extent  they  are
                                        treated  as  giving  rise to  "unrelated
                                        business  taxable  income."  The Company
                                        provides  to  tax-exempt   Members  such
                                        accounting  information  as they require
                                        to  report  their  "unrelated   business
                                        taxable income" for income tax purposes.


                                      -10-
<PAGE>


                                        Investment  in the Company by tax-exempt
                                        entities requires special consideration.
                                        Trustees  or   administrators  of  these
                                        entities are urged to  carefully  review
                                        the    matters    discussed    in   this
                                        Confidential Memorandum.

Term:                                   The Company's  term is perpetual  unless
                                        the  Company  is  otherwise   terminated
                                        under   the   terms   of   the   Company
                                        Agreement.

Reports to Members:                     The Company furnishes to Members as soon
                                        as  practicable  after  the  end of each
                                        taxable  year  such  information  as  is
                                        necessary  for them to complete  Federal
                                        and  state  income  tax  or  information
                                        returns,   along   with  any  other  tax
                                        information required by law. The Company
                                        will  also  send  Members  an  unaudited
                                        semi-annual and an audited annual report
                                        within  60 days  after  the close of the
                                        period  for  which  the  report is being
                                        made.   Members   also   will   be  sent
                                        quarterly    reports    regarding    the
                                        Company's    operations    during   each
                                        quarter.

Fiscal Year:                            The 12-month period ending December 31.


                                      -11-
<PAGE>


                                   THE COMPANY

     Sawgrass Fund,  L.L.C.  (the "Company") is registered  under the Investment
Company Act of 1940 (the "1940 Act") as a non-diversified, closed-end management
investment  company.  The  Company's  principal  office is  located at One World
Financial Center,  31st Floor, 200 Liberty Street, New York, New York 10281, and
its telephone number is (212) 667-4225.  CIBC Oppenheimer Advisers,  L.L.C. (the
"Adviser"),  a Delaware  limited  liability  company,  serves as the  investment
adviser  to  the  Company  and  is  responsible  for  the  Company's  investment
activities pursuant to an investment advisory agreement.  Responsibility for the
overall management and supervision of the operations of the Company is vested in
the individuals who serve as the Board of Managers of the Company (the "Board of
Managers"). (See "Board of Managers.")

                                    STRUCTURE

     The Company is a specialized  investment  vehicle that combines many of the
features  of a  private  investment  partnership  with  those  of  a  closed-end
investment company. Private investment partnerships are unregistered, commingled
asset pools that are often  aggressively  managed  and offered in large  minimum
denominations  (often over $1 million)  through private  placements to a limited
number of high net worth  individual and  institutional  investors.  The general
partners of these  partnerships are typically  compensated  through  asset-based
fees and performance-based allocations. Closed-end investment companies are 1940
Act registered pools typically organized as corporations or business trusts that
usually  are  managed  more   conservatively   than  most   private   investment
partnerships,  subject to  relatively  modest  minimum  investment  requirements
(often less than $2,000) and publicly offered to a broad range of investors. The
advisers to these companies are typically  compensated  through asset-based (but
not performance-based) fees.

     The  Company  is similar to  private  investment  partnerships  in that its
investment  portfolio  may be more actively  managed than most other  investment
companies and interests in the Company  ("Interests")  are sold in comparatively
large minimum denominations  ($150,000) in private placements solely to high net
worth  individual and  institutional  investors,  whose capital accounts will be
subject to both asset-based fees and performance-based allocations. However, the
Company, like other closed-end  investment  companies,  has registered under the
1940 Act to be able to offer  its  Interests  without  limiting  the  number  of
investors that can participate in its investment program.  This permits a larger
number  of  investors  that  have a  higher  tolerance  for  investment  risk to
participate  in  an  aggressive  investment  program  without  making  the  more
substantial  minimum  capital  commitment  that  is  required  by  many  private
investment partnerships.

                               INVESTMENT PROGRAM

     The Company's  investment  objective is to seek superior  long-term capital
appreciation. It pursues this objective by investing its assets primarily in the
equity  securities of small to medium size  emerging  growth  companies.  Equity
securities include common and preferred stock and other securities having equity
characteristics,  including convertible debt


                                      -12-
<PAGE>


securities,  stock  options,  warrants  and  rights.  Generally,  the  Company's
investment  time  horizon,  i.e.,  the time  period  the  Company  will hold its
investments,  will  be  greater  than  one  year.  The  Company's  portfolio  of
securities is expected to include long and short positions in equity securities.
As part of its  investment  program,  the  Company  may  effect  short  sales of
securities  and may invest in debt  securities.  The  Company  may also  utilize
swaps,  swaptions and other derivative instruments such as forward contracts and
options on stock indices and structured  equity related  products.  Although the
Company will invest primarily in the securities of U.S.  issuers,  it may invest
up to one-third of the value of its total  assets in the  securities  of foreign
issuers,  including  depositary  receipts relating to foreign  securities.  (See
"Types of Investments and Related Risk Factors.")

     Depending  upon  market   conditions  and  the   availability  of  suitable
investment  opportunities,  the  Company may  utilize  leverage in pursuing  its
investment  objective.  Leverage is the practice of borrowing  money to purchase
investments,  which the  Company  may do by  purchasing  securities  on  margin,
borrowing from a bank or entering into reverse repurchase agreements.

     Although the  philosophy  underlying  the management of the Company is that
the  development  and  expansion of the emerging  growth  companies in which the
Company  invests will provide for growth of the  Company's  assets over a 3 to 5
year period,  the  Company's  portfolio may also generate  current  income,  and
short-term gains will be taken where appropriate.

     The Company  will  endeavor to attain its  investment  goals  primarily  by
making  investments  that are stock  specific,  i.e.,  related  directly  to the
prospects of certain small to medium sized emerging growth companies.

     In seeking  investment  opportunities,  the Adviser will generally focus on
the securities of companies that have  managements with proven track records and
the ability to develop and  introduce  new products or services,  and which have
exhibited  demonstrable  pricing  flexibility.  High barriers to market entry by
competitors  will also be a  consideration.  In the  Adviser's  view,  financial
characteristics  of such companies  generally include low balance sheet leverage
and high debt coverage,  growth in unit and dollar sales, margin expansion,  and
high current or potential return on invested capital.

     Theme  analysis will be central to the Adviser's  decision-making  process.
Theme analysis involves the  identification of high growth niches of the economy
that the Adviser  believes  will become the focus of investor  attention  in the
coming  twelve to  eighteen  months.  Once a high  growth  niche is chosen,  the
Adviser will select those companies within that niche that, in its view, exhibit
financial  strength and the most favorable growth  characteristics.  Examples of
themes  include  laser  vision  correction  procedures,   "middleware"  software
applications, and "voice over IP" telephony technologies.

     Although the Adviser's  selection of a security will focus on its long-term
merits,  the size of a position  may vary  considerably  depending  upon current
levels of valuation, rate of earnings growth, and stage of the product cycle. To
the extent possible, the Adviser will try to


                                      -13-
<PAGE>


take  advantage  of market  volatility  by selling  into what it  believes to be
valuation excesses and buying into what it believes to be depressed periods.

     In managing  the  investments  of the  Company,  the  Adviser  will rely on
investment  research  and  fundamental  analysis  of company  financial  data in
seeking to identify attractive  investment  opportunities.  The research process
involves company visits,  continuous  updating of valuation  models,  review and
analysis of published research and discussions with industry sources. Investment
professionals employed by CWH Associates, Inc. ("CWH") will manage the Company's
investment portfolio on behalf of the Adviser.

     The research process will involve direct contact with the management of the
companies in which the Company  invests,  augmented  where necessary by contacts
with  competitors,  suppliers  or end users of  relevant  products.  The Adviser
intends to use  information  provided by specialized  research firms or regional
brokerage  companies  in order to become  more  knowledgeable  about  particular
industries and geographic  areas.  In addition,  brokerage firm analysts will be
used as either research backup or company  specialists,  trade  publications and
industry  sources will be studied on an ongoing basis,  and consultants  will be
utilized in specialized cases. Finally, the network of other investment managers
and analysts with which the Company's  portfolio managers have become acquainted
during  the years in which  they  have  worked as  investment  advisers  will be
utilized as informal sources of information.

     The assets of the Company will be invested  primarily in equity  securities
that the  Adviser  believes  are  undervalued  or that,  in the  judgment of the
Adviser,   offer  other   opportunities  for  capital   appreciation   based  on
consideration of relevant company-,  industry- and  market-specific  factors and
trends. For example,  the Adviser will seek to identify securities in particular
market sectors that are undervalued relative to other issuers in the same sector
or which have characteristics  making the issuer a potential acquisition target.
In addition,  the Adviser may cause the Company to sell short the  securities of
an issuer that it believes to be overvalued relative to similar issuers.

     The   Company  may  also   invest  in   non-convertible   bonds  and  other
non-convertible  debt securities when the Adviser believes that these securities
offer opportunities for capital appreciation.

     During periods of adverse market  conditions,  the Company may deviate from
its  investment  objective  and invest all or any  portion of its assets in high
quality debt securities,  including money market instruments,  or hold cash. The
Company may also invest in money market  instruments  or hold cash for liquidity
purposes.  (See  "Types of  Investments  and  Related  Risk  Factors - Temporary
Investments.")

     In pursuing its investment objective,  or for hedging purposes, the Company
may use various investment techniques and strategies.  These may include the use
of leverage,  short sales of securities  and the purchase and sale of options on
securities and stock indices, subject, however, to certain limitations described
elsewhere in this  Confidential  Memorandum,  including any policies that may be
established by the Board of Managers. The use of these investment techniques and
instruments  involves certain risks. (See "Types of Investments and Related Risk


                                      -14-
<PAGE>


Factors.")  The Company  will comply with  applicable  regulatory  requirements,
including the asset coverage requirements under the 1940 Act, in connection with
its use of these strategies.

     Additional  information about the types of investments that will be made by
the  Company,  its  investment  practices  and related  risk factors is provided
below.  Except as otherwise  indicated,  the Company's  investment  policies and
restrictions  are not  fundamental and may be changed without a vote of Members.
(See "Types of  Investments  and Related Risk Factors - Investment  Policies And
Restrictions.")

     THE COMPANY'S  INVESTMENT  PROGRAM IS SPECULATIVE  AND ENTAILS  SUBSTANTIAL
RISKS. THERE CAN BE NO ASSURANCE THAT THE COMPANY'S INVESTMENT OBJECTIVE WILL BE
ACHIEVED.  IN  PARTICULAR,  THE  COMPANY'S  USE OF LEVERAGE,  SHORT  SELLING AND
DERIVATIVES  TRANSACTIONS,  AND ITS  LIMITED  DIVERSIFICATION  CAN,  IN  CERTAIN
CIRCUMSTANCES, RESULT IN SIGNIFICANT LOSSES TO THE COMPANY.

                  TYPES OF INVESTMENTS AND RELATED RISK FACTORS

Equity Securities

     A significant portion of the Company's  investment  portfolio normally will
consist  of  long  and  short  positions  in  common  stocks  and  other  equity
securities.  The values of equity securities change in response to many factors,
including,  but not  limited  to, the  activities  and  financial  condition  of
individual companies,  the business market in which individual companies compete
and general market and economic conditions.

     The  Company's  investments  in equity  securities of U.S.  companies  will
include  securities  that are  listed on U.S.  securities  exchanges  as well as
unlisted  securities  that are traded  over-the-counter.  Equity  securities  of
companies  traded  over-the-counter  may not be traded in the volumes  typically
found on a  national  securities  exchange.  Consequently,  the  Company  may be
required  to dispose of these  securities  over a longer (and  potentially  less
favorable)  period of time than is  required  to  dispose of the  securities  of
exchange listed companies. There is no minimum required market capitalization of
the  companies  in which the Company  may  invest,  and the Company may invest a
significant  portion of its assets in  securities  of companies  having  smaller
market  capitalization.  These  companies may not be well known to the investing
public, may not have significant  institutional ownership and may have cyclical,
static or only moderate growth prospects.  Additionally, the securities of these
companies  may be more  volatile  in price  and  have  less  liquidity  than the
securities of companies having larger market capitalization.

     Common  Stocks.  Common stocks are shares of a corporation  or other entity
that  entitle  the holder to a pro rata  share of the  profits,  if any,  of the
entity without  preference over any other  shareholder or claim of shareholders,
after making  required  payments to holders of the entity's  preferred stock and
other senior equity.  Common stock usually carries with it the right to vote and
frequently an exclusive right to do so.

     Preferred  Stocks.  Preferred  stock  generally  has a  preference  over an
issuer's common stock as to dividends and upon the event of liquidation,  but it
ranks junior to debt  securities  in an issuer's  capital  structure.  Preferred
stock generally pays dividends in cash (or


                                      -15-
<PAGE>


additional  shares of preferred  stock) at a defined rate,  but unlike  interest
payments on debt  securities,  preferred  stock  dividends  are payable  only if
declared by the issuer's board of directors. Dividends on preferred stock may be
cumulative,  meaning  that,  in the event the  issuer  fails to make one or more
dividend  payments  on the  preferred  stock,  no  dividends  may be paid on the
issuer's common stock until all unpaid preferred stock dividends have been paid.
Preferred  stock  may  also be  subject  to  optional  or  mandatory  redemption
provisions.

     Convertible  Securities.  Convertible  securities  are  bonds,  debentures,
notes,  preferred  stocks  or other  securities  that may be  converted  into or
exchanged for a specified amount of common stock of the same or different issuer
within  a  particular  period  of  time  at a  specified  price  or  formula.  A
convertible  security  entitles the holder to receive interest that is generally
paid or accrued on debt or a dividend that is paid or accrued on preferred stock
until the convertible  security matures or is redeemed,  converted or exchanged.
Convertible  securities  have unique  investment  characteristics,  in that they
generally  (1) have  higher  yields than common  stocks,  but lower  yields than
comparable  non-convertible  securities,  (2) are less subject to fluctuation in
value than the underlying common stock due to their debt characteristics and (3)
provide  the  potential  for  capital  appreciation  if the market  price of the
underlying common stock increases.

     The value of a convertible security is a function of its "investment value"
(determined  by its yield in comparison  with the yields of other  securities of
comparable maturity and quality that do not have a conversion privilege) and its
"conversion value" (the security's worth, at market value, if converted into the
underlying  common  stock).  The investment  value of a convertible  security is
influenced by changes in interest  rates,  with  investment  value  declining as
interest rates  increase and  increasing as interest  rates decline.  The credit
standing  of the  issuer  and  other  factors  may also  have an  effect  on the
convertible  security's  investment value. The conversion value of a convertible
security is determined by the market price of the  underlying  common stock.  If
the conversion  value is low relative to the investment  value, the price of the
convertible security is governed principally by its investment value. Generally,
the conversion value decreases as the convertible  security approaches maturity.
To the extent the market  price of the  underlying  common stock  approaches  or
exceeds the  conversion  price,  the price of the  convertible  security will be
increasingly   influenced  by  its  conversion  value.  A  convertible  security
generally  will sell at a premium  over its  conversion  value by the  extent to
which investors place value on the right to acquire the underlying  common stock
while holding a debt security.

     A  convertible  security may be subject to  redemption at the option of the
issuer  at  a  price  established  in  the  convertible   security's   governing
instrument.  If a  convertible  security  held  by the  Company  is  called  for
redemption,  the  Company  will be  required  to permit the issuer to redeem the
security,  convert  it into the  underlying  common  stock or sell it to a third
party.  Any of these  actions  could  have an  adverse  effect on the  Company's
ability to achieve its investment objective.

Bonds and Other Debt Securities

     Generally.  The Company may invest in bonds and other debt securities.  The
Adviser  (subject to any policies  established  by the Board of  Managers)  will
invest  in  these


                                      -16-
<PAGE>


securities when they offer  opportunities for capital  appreciation and may also
invest in these  securities  for  temporary  defensive  purposes and to maintain
liquidity.  Debt securities  include,  among other securities:  bonds, notes and
debentures  issued by corporations;  debt securities issued or guaranteed by the
U.S. Government or one of its agencies or  instrumentalities  ("U.S.  Government
Securities")   or  by  a   foreign   government;   municipal   securities;   and
mortgage-backed  and  asset-backed  securities.  These securities may pay fixed,
variable or floating rates of interest, and may include zero coupon obligations.
Debt  securities  are  subject  to the risk of the  issuer's  inability  to meet
principal and interest payments on its obligations  (i.e.,  credit risk) and are
subject to price  volatility  due to such factors as interest rate  sensitivity,
market  perception  of the  creditworthiness  of the issuer and  general  market
liquidity (i.e., market risk).

     The Company may invest in both investment  grade and  non-investment  grade
debt  securities.  Investment  grade debt  securities are  securities  that have
received a rating from at least one  nationally  recognized  statistical  rating
organization  ("NRSRO") in one of the four highest rating  categories or, if not
rated by any NRSRO,  have been  determined  by the  Adviser to be of  comparable
quality.  Non-investment  grade debt securities  (typically called "junk bonds")
are  securities  that have  received a rating  from a NRSRO of below  investment
grade or have been  given no  rating,  and are  considered  to be  predominantly
speculative  with  respect to the  issuer's  capacity to pay  interest and repay
principal.  Non-investment grade debt securities in the lowest rating categories
may involve a substantial risk of default or may be in default.  Adverse changes
in economic conditions or developments  regarding the individual issuer are more
likely to cause  price  volatility  and weaken the  capacity  of the  issuers of
non-investment  grade debt  securities to make  principal and interest  payments
than is the  case  for  higher  grade  debt  securities.  An  economic  downturn
affecting an issuer of  non-investment  grade debt  securities  may result in an
increased  incidence of default.  In  addition,  the market for lower grade debt
securities may be thinner and less active than for higher grade debt securities.
The Company will not invest more than 20% of its total assets in non-convertible
debt securities which have not received an investment grade rating from at least
one NRSRO.

Limited Diversification

     The Company is a "non-diversified"  investment company.  Thus, there are no
percentage  limitations  on the  percentage of the Company's  assets that may be
invested in the  securities  of any one issuer.  To the extent that a relatively
high  percentage  of the Company's  assets were invested in the  securities of a
limited number of issuers,  some of which may be within the same  industry,  the
Company's  investment portfolio will be more susceptible to any single economic,
political  or  regulatory   occurrence  than  the  portfolio  of  a  diversified
investment company.

     The  Company  intends  to invest no more than 15% of the value of its total
assets in the  securities of any one issuer.  However,  while seeking  desirable
investments, the Company may temporarily exceed this limitation subject to other
applicable policies and procedures.

Foreign Securities

     Although the Company invests primarily in the securities of publicly traded
U.S. issuers,  it may invest up to one-third of the value of its total assets in
securities  of foreign  issuers


                                      -17-
<PAGE>


and in depositary receipts,  such as American Depositary Receipts ("ADRs"), that
represent  indirect   interests  in  securities  of  foreign  issuers.   Foreign
securities  in which the Company may invest may be listed on foreign  securities
exchanges or traded in foreign over-the-counter markets.  Investments in foreign
securities  are affected by risk factors  generally not thought to be present in
the U.S. These factors include,  but are not limited to, the following:  varying
custody, brokerage and settlement practices;  difficulty in pricing; less public
information about issuers of foreign  securities;  less governmental  regulation
and  supervision  over the issuance and trading of securities  than in the U.S.;
the unavailability of financial  information regarding the foreign issuer or the
difficulty  of  interpreting   financial   information  prepared  under  foreign
accounting  standards;  less liquidity and more volatility in foreign securities
markets; the possibility of expropriation or nationalization;  the imposition of
withholding   and  other  taxes;   adverse   political,   social  or  diplomatic
developments;  limitations  on the  movement  of funds or  other  assets  of the
Company  between  different  countries;  difficulties  in invoking legal process
abroad and enforcing  contractual  obligations;  and the difficulty of assessing
economic trends in foreign countries. Moreover,  governmental issuers of foreign
securities may be unwilling to repay principal and interest due, and may require
that the conditions for payment be renegotiated. Investment in foreign countries
also involves  higher  brokerage and custodian  expenses than does investment in
domestic securities.

     Other risks of investing in foreign  securities include changes in currency
exchange  rates  (in the case of  securities  that are not  denominated  in U.S.
dollars) and currency exchange control regulations or other foreign or U.S. laws
or  restrictions,  or  devaluations  of  foreign  currencies.  A decline  in the
exchange  rate  would  reduce  the value of  certain  of the  Company's  foreign
currency denominated portfolio securities irrespective of the performance of the
underlying  investment.  In addition,  the Company may incur costs in connection
with conversion between various  currencies.  The foregoing risks may be greater
in emerging industrialized and less developed countries.

     The Company may enter into forward currency  exchange  contracts  ("forward
contracts")  for  hedging  purposes  and  non-hedging  purposes  to  pursue  its
investment objective. Forward contracts are transactions involving the Company's
obligation  to  purchase  or sell a  specific  currency  at a  future  date at a
specified  price.  Forward  contracts  may be used by the  Company  for  hedging
purposes to protect against  uncertainty in the level of future foreign currency
exchange  rates,  such as when the Company  anticipates  purchasing or selling a
foreign  security.  This technique would allow the Company to "lock in" the U.S.
dollar price of the security.  Forward  contracts may also be used to attempt to
protect the value of the  Company's  existing  holdings  of foreign  securities.
There may be,  however,  imperfect  correlation  between the  Company's  foreign
securities holdings and the forward contracts entered into with respect to those
holdings.  Forward contracts may also be used for non-hedging purposes to pursue
the Company's  investment  objective (subject to any policies established by the
Board of Managers), such as when the Adviser anticipates that particular foreign
currencies  will  appreciate  or  depreciate  in value,  even though  securities
denominated in those  currencies  are not then held in the Company's  investment
portfolio.

Leverage


                                      -18-
<PAGE>


     The Company may borrow money to purchase  securities,  a practice  known as
"leverage,"  which involves certain risks. In this regard,  the Company may make
margin  purchases of securities,  borrow money from banks and enter into reverse
repurchase  agreements.  The  Company  may also borrow  money for  temporary  or
emergency purposes or in connection with the repurchase of Interests.

     Trading equity  securities on margin  involves an initial cash  requirement
representing  at least 50% of the  underlying  security's  value with respect to
transactions in U.S.  markets and varying  (typically  lower)  percentages  with
respect to  transactions  in foreign  markets.  Borrowings  to  purchase  equity
securities  typically  will be secured by the  pledge of those  securities.  The
financing  of  securities   purchases  may  also  be  effected  through  reverse
repurchase agreements with banks, brokers and other financial institutions. This
involves  the  transfer  by  the  Company  of  the  underlying   security  to  a
counterparty  in exchange for cash proceeds based on a percentage  (which can be
as high as 95% to 100%) of the value of the debt instrument.

     Although  leverage will increase  investment  return if the Company earns a
greater return on the investments purchased with borrowed funds than it pays for
the use of those funds, the use of leverage will decrease  investment  return if
the Company fails to earn as much on  investments  purchased with borrowed funds
as it pays  for the use of  those  funds.  The use of  leverage  will  therefore
magnify the volatility of the value of the Company's  investment  portfolio.  In
the event that the Company's  equity or debt  instruments  decline in value, the
Company could be subject to a "margin call" or  "collateral  call,"  pursuant to
which the Company must either deposit  additional  collateral with the lender or
suffer  mandatory  liquidation  of the pledged  securities to compensate for the
decline  in value.  In the event of a sudden,  precipitous  drop in value of the
Company's  assets,  the Company  might not be able to liquidate  assets  quickly
enough to pay off its borrowing.  Money borrowed for leveraging  will be subject
to interest  costs that may or may not be recovered by return on the  securities
purchased. The Company also may be required to maintain minimum average balances
in  connection  with its  borrowings  or to pay a  commitment  or  other  fee to
maintain a line of credit;  either of these requirements would increase the cost
of borrowing over the stated interest rate.

     The 1940 Act requires the Company to satisfy an asset coverage  requirement
of 300% of its indebtedness,  including  amounts borrowed,  measured at the time
the Company incurs the  indebtedness  (the "Asset Coverage  Requirement").  This
means  that  the  value  of the  Company's  total  indebtedness  may not  exceed
one-third the value of its total assets (including such indebtedness),  measured
at the time the Company incurs the indebtedness. The staff of the Securities and
Exchange  Commission's Division of Investment Management (the "SEC Staff") takes
the position that short sales of securities,  reverse repurchase agreements, use
of margin,  sales of put and call  options on  specific  securities  or indices,
investments in certain other types of instruments (including certain derivatives
such  as swap  agreements),  and  the  purchase  and  sale  of  securities  on a
when-issued  or  forward   commitment   basis,   may  be  deemed  to  constitute
indebtedness subject to the Asset Coverage Requirement.

     The SEC  Staff  has  stated,  however,  that it will not  deem a  portfolio
position  involving  such  instruments  to be  subject  to  the  Asset  Coverage
Requirement if an investment company "covers" its position by segregating liquid
securities  on  its  books  or in an  account  with  its  custodian  in  amounts
sufficient to offset the liability associated with the position.  Generally,


                                      -19-
<PAGE>


in  conjunction  with portfolio  positions that are deemed to constitute  senior
securities,  the Company must: (1) observe the Asset Coverage  Requirement;  (2)
maintain daily a segregated account in cash or liquid securities at such a level
that the amount  segregated  plus any amounts  pledged to a broker as collateral
will  equal  the  current  value of the  position;  or (3)  otherwise  cover the
portfolio position with offsetting portfolio  securities.  Segregation of assets
or covering portfolio positions with offsetting  portfolio  securities may limit
the  Company's  ability to  otherwise  invest  those  assets or dispose of those
securities.

     In order to obtain "leveraged"  market exposure in certain  investments and
to  increase  the  overall  return to the  Company of various  investments,  the
Company  may  purchase  options  and  other  synthetic  instruments  that do not
constitute "indebtedness" for purposes of the Asset Coverage Requirement.  These
instruments may nevertheless involve significant economic leverage and therefore
may, in some cases, involve significant risks of loss.

Short Sales

     The Company may attempt to limit  exposure to a possible  market decline in
the value of its portfolio securities through short sales of securities that the
Adviser (subject to any policies  established by the Board of Managers) believes
possess volatility  characteristics  similar to those being hedged. In addition,
the  Company  may use  short  sales  for  non-hedging  purposes  to  pursue  its
investment objective. To effect a short sale, the Company will borrow a security
from a  brokerage  firm to make  delivery  to the  buyer.  The  Company  is then
obligated to replace the borrowed  security by purchasing it at the market price
at the time of  replacement.  Until the  security  is  replaced,  the Company is
required to pay to the brokerage  firm any accrued  interest or dividend and may
be required to pay a premium.

     The Company will realize a gain if the borrowed  security declines in price
between  the date of the short sale and the date on which the  Company  replaces
the  security.  The  Company  will  incur a loss if the  price  of the  borrowed
security  increases  between  those dates.  This loss can  increase  rapidly and
without  effective  limit.  The  amount of any gain will be  decreased,  and the
amount of any loss  increased,  by the  amount of any  premium or  interest  the
Company may be required to pay in connection with a short sale.  There is a risk
that the borrowed  securities would need to be returned to the brokerage firm on
short notice.  If a request for return of securities occurs at a time when other
short sellers of the subject security are receiving similar  requests,  a "short
squeeze"  can  occur,  wherein  the  Company  might  be  compelled,  at the most
disadvantageous  time, to replace borrowed securities previously sold short with
purchases on the open market,  possibly at prices significantly in excess of the
price at which the  securities  were sold  short.  The  successful  use of short
selling may be adversely affected by imperfect  correlation between movements in
the price of the security  sold short and the  securities  being  hedged.  Short
selling may  exaggerate the  volatility of the Company's  investment  portfolio.
Short  selling may also produce  higher than normal  portfolio  turnover and may
result in increased transaction costs to the Company.

Reverse Repurchase Agreements

     Reverse repurchase agreements involve the Company's sale of a security to a
bank or securities dealer and the Company's simultaneous agreement to repurchase
that  security  for a


                                      -20-
<PAGE>


fixed price  (reflecting  a market rate of interest) on a specific  date.  These
transactions  involve  a risk  that  the  other  party to a  reverse  repurchase
agreement will be unable or unwilling to complete the  transaction as scheduled,
which may result in losses to the Company. Reverse repurchase transactions are a
form of  leverage  which  may also  increase  the  volatility  of the  Company's
investment  portfolio.  The Company has adopted procedures  designed to minimize
certain of the risks of loss associated with reverse repurchase transactions.

Special Investment Instruments and Techniques

     The  Company may utilize a variety of special  investment  instruments  and
techniques  (described below) to hedge its investment  portfolio against various
risks (such as changes in interest  rates or other factors that affect  security
values)  or  for  non-hedging   purposes  to  pursue  the  Company's  investment
objective. These strategies may be executed through derivative transactions. The
instruments  the Company may use and the particular  manner in which they may be
used may change over time as new  instruments  and  techniques  are developed or
regulatory  changes occur.  Certain of the special  investment  instruments  and
techniques that the Company may use are speculative and involve a high degree of
risk,  particularly  in the context of  non-hedging  transactions  to pursue the
Company's investment objective.

     Call and Put Options on  Individual  Securities.  The Company may  purchase
call and put options in respect of specific  securities,  and may write and sell
covered or uncovered call and put options for hedging  purposes and  non-hedging
purposes to pursue its investment objective. A put option gives the purchaser of
the option the right to sell,  and obligates  the writer to buy, the  underlying
security at a stated  exercise  price at any time prior to the expiration of the
option.  Similarly, a call option gives the purchaser of the option the right to
buy,  and  obligates  the writer to sell,  the  underlying  security at a stated
exercise price at any time prior to the expiration of the option.

     A covered call option  written by the Company is a call option with respect
to which the Company owns the  underlying  security.  The sale of such an option
exposes  the  Company  during  the  term  of the  option  to  possible  loss  of
opportunity  to  realize  appreciation  in the  market  price of the  underlying
security or to possible  continued  holding of a security  that might  otherwise
have  been sold to  protect  against  depreciation  in the  market  price of the
security.  A covered  put  option  written by the  Company is a put option  with
respect  to which cash or liquid  securities  have been  placed in a  segregated
account on the Company's  books or with the  Company's  custodian to fulfill the
obligation undertaken. The sale of such an option exposes the Company during the
term of the  option  to a  decline  in price of the  underlying  security  while
depriving the Company of the opportunity to invest the segregated assets.

     The Company may close out a position when writing  options by purchasing an
option on the same security with the same exercise price and expiration  date as
the option that it has  previously  written on the  security.  The Company  will
realize a profit or loss if the  amount  paid to  purchase  an option is less or
more, as the case may be, than the amount  received  from the sale  thereof.  To
close out a position as a purchaser of an option,  the Company would  ordinarily
make a similar  "closing  sale  transaction,"  which  involves  liquidating  the
Company's  position by selling the option  previously  purchased,  although  the
Company would be entitled to exercise the


                                      -21-
<PAGE>


option should it deem it  advantageous  to do so. The Company may also invest in
so-called  "synthetic"  options  or  other  derivative  instruments  written  by
broker-dealers.

     Options  transactions  may be effected on  securities  exchanges  or in the
over-the-counter  market.  When  options  are  purchased  over-the-counter,  the
Company  bears the risk that the  counterparty  that  wrote the  option  will be
unable or unwilling to perform its obligations under the option contract.  These
options may also be illiquid and, in such cases, the Company may have difficulty
closing out its  position.  Over-the-counter  options  purchased and sold by the
Company may also include options on baskets of specific securities.

     Warrants and Rights.  Warrants are derivative  instruments that permit, but
do not obligate,  the holder to subscribe for other  securities or  commodities.
Rights are similar to  warrants,  but normally  have a shorter  duration and are
offered or distributed to shareholders of a company.  Warrants and rights do not
carry with them the right to  dividends  or voting  rights  with  respect to the
securities  that they entitle the holder to purchase,  and they do not represent
any rights in the assets of the issuer. As a result,  warrants and rights may be
considered more speculative than certain other types of equity-like  securities.
In addition,  the values of warrants and rights do not  necessarily  change with
the value of the  underlying  securities or  commodities  and these  instruments
cease to have value if they are not exercised prior to their expiration dates.

     Call and Put Options on  Securities  Indices.  The Company may purchase and
sell  call and put  options  on stock  indices  (such as the  Standard  & Poor's
Composite  Index of 500  Stocks  (the "S&P  500") or the  Standard  & Poor's 100
Index) listed on national securities exchanges or traded in the over-the-counter
market for hedging  purposes and  non-hedging  purposes to pursue its investment
objective.  A stock index  fluctuates  with changes in the market  values of the
stocks included in the index.  The  effectiveness of purchasing or writing stock
index  options for hedging  purposes  will depend upon the extent to which price
movements in the Company's portfolio correlate with price movements of the stock
index  selected.  Because the value of an index option depends upon movements in
the level of the index rather than the price of a particular stock,  whether the
Company  will  realize a gain or loss from the purchase or writing of options on
an index depends upon movements in the level of stock prices in the stock market
generally or, in the case of certain indexes,  in an industry or market segment,
rather  than  movements  in  the  price  of  a  particular  stock.  Accordingly,
successful use by the Company of options on stock indexes will be subject to the
Adviser's ability to predict  correctly  movements in the direction of the stock
market  generally or of a particular  industry or market segment.  This requires
different  skills  and  techniques  than  predicting  changes  in the  price  of
individual stocks.

     Additional  Derivative  Transactions.  The  Company may take  advantage  of
opportunities in the area of swaps,  options on various underlying  instruments,
swaptions and certain other customized derivative instruments.  In addition, the
Company  may take  advantage  of  opportunities  with  respect to certain  other
derivative  instruments  that  are  not  presently  contemplated  for use by the
Company or which are currently not available, but which may be developed, to the
extent such  opportunities  are both  consistent  with the Company's  investment
objective and legally  permissible  for the Company.  Special risks may apply to
instruments  that are  invested  in by the  Company in the  future,  which risks
cannot be  determined  at this time or until such  instruments  are developed or
invested in by the Company.


                                      -22-
<PAGE>


     A swap is a  contract  under  which  two  parties  agree  to make  periodic
payments to each other based on specified  interest rates, an index or the value
of some other  instrument,  applied to a stated,  or "notional",  amount.  Swaps
generally can be classified as interest rate swaps,  currency  swaps,  commodity
swaps or equity  swaps,  depending  on the type of index or  instrument  used to
calculate  the  payments.  Such swaps would  increase or decrease the  Company's
investment  exposure to the  particular  interest rate,  currency,  commodity or
equity  involved.  A swaption is an option  entitling  one party to enter into a
swap agreement with the  counterparty.  In addition to swaps and swaptions,  the
Company may become a party to various other  customized  derivative  instruments
entitling the  counterparty to certain payments on the gain or loss on the value
of an underlying  or referenced  instrument.  Certain  swaps,  options and other
derivative  instruments  may be  subject to  various  types of risks,  including
market risk, liquidity risk, counterparty credit risk, legal risk and operations
risk. In addition,  swaps and other derivatives can involve significant economic
leverage and may, in some cases, involve significant risks of loss.

Lending Portfolio Securities

     The  Company may lend its  portfolio  securities  to  domestic  and foreign
brokers,  dealers  and  financial  institutions.  These loans will be secured by
collateral  (consisting  of cash,  U.S.  Government  Securities  or  irrevocable
letters of credit)  maintained in an amount equal to at least 100% of the market
value,  determined daily, of the loaned securities.  The Company may at any time
call the loan and obtain the return of the securities  loaned.  The Company will
be  entitled to  payments  equal to the  interest  and  dividends  on the loaned
security and may receive a premium for lending the securities. Lending portfolio
securities  may result in income to the Company,  but there may be delays in the
recovery of the loaned securities or a loss of rights in the collateral supplied
should the borrower  fail  financially.  Securities  lending  involves a form of
leverage,  and the Company  may incur a loss if  securities  purchased  with the
collateral from securities loans decline in value.


                                      -23-
<PAGE>


When-Issued and Forward Commitment Securities

     The  Company  may  purchase  securities  on a  "when-issued"  basis and may
purchase or sell  securities on a "forward  commitment"  basis in order to hedge
against  anticipated  changes in interest rates and prices.  These  transactions
involve a commitment  by the Company to purchase or sell  securities at a future
date  (ordinarily  one  or two  months  later).  The  price  of  the  underlying
securities, which is generally expressed in terms of yield, is fixed at the time
the commitment is made, but delivery and payment for the securities  takes place
at a later  date.  No income  accrues  on  securities  that have been  purchased
pursuant to a forward  commitment or on a when-issued basis prior to delivery to
the Company. When-issued securities and forward commitments may be sold prior to
the  settlement  date.  If the  Company  disposes  of the  right  to  acquire  a
when-issued  security  prior to its  acquisition  or  disposes  of its  right to
deliver or receive  against a forward  commitment,  it may incur a gain or loss.
These  transactions will be subject to the Company's  limitation on indebtedness
unless,  at the time the Company  enters into such a  transaction,  a segregated
account  consisting of cash,  U.S.  Government  Securities or liquid  securities
equal to the  value of the  when-issued  or  forward  commitment  securities  is
established  and  maintained.  There is a risk that  securities  purchased  on a
when-issued basis may not be delivered and that the purchaser of securities sold
by the Company on a forward  basis will not honor its  purchase  obligation.  In
such cases, the Company may incur a loss.

Restricted and Illiquid Investments

     Although the Company will invest  primarily in publicly traded  securities,
it may invest up to 15% of the value of its total  assets  (measured at the time
of purchase) in restricted  securities and other investments which are illiquid.
Restricted  securities are securities that may not be sold to the public without
an effective  registration  statement  under the  Securities  Act of 1933 ("1933
Act") or, if they are unregistered,  may be sold only in a privately  negotiated
transaction or pursuant to an exemption from registration. In recognition of the
increased  size and  liquidity  of the  institutional  markets for  unregistered
securities  and the  importance of  institutional  investors in the formation of
capital,  the Securities and Exchange  Commission  ("SEC") has adopted Rule 144A
under the 1933 Act, which is designed to further  facilitate  efficient  trading
among  qualified  institutional  investors  by  permitting  the sale of  certain
unregistered  securities to qualified  institutional buyers. The Company will be
eligible to purchase securities in Rule 144A transactions if and when it and all
other  investment  companies  for which  the  Adviser  serves as the  investment
adviser  own,  in  the  aggregate,  at  least  $100  million  of  securities  of
unaffiliated  issuers.  To the extent  privately  placed  securities held by the
Company qualify under Rule 144A, and an institutional  market develops for those
securities, the Company likely will be able to dispose of the securities without
registering them under the 1933 Act. To the extent that qualified  institutional
buyers  become,  for  a  time,  uninterested  in  purchasing  these  securities,
investing in Rule 144A securities  could have the effect of increasing the level
of the  Company's  illiquidity.  The  Company may adopt  procedures  under which
certain  Rule 144A  securities  will not be deemed to be  illiquid,  if  certain
criteria are satisfied with respect to those securities and the market therefor.
Foreign  securities  that can be freely  sold in the  markets  in which they are
principally  traded  are  not  considered  by  the  Company  to  be  restricted.
Regulation S under the 1933 Act permits the sale abroad of  securities  that are
not  registered  for  sale in the  United  States.  Repurchase  agreements  with
maturities of more than seven days will be treated as illiquid.


                                      -24-
<PAGE>


     Where  registration  is  required  to sell a  security,  the Company may be
obligated to pay all or part of the  registration  expenses,  and a considerable
period may elapse  between the  decision to sell and the time the Company may be
permitted to sell a security  under an  effective  registration  statement.  If,
during such period, adverse market conditions were to develop, the Company might
obtain a less favorable price than prevailed when it decided to sell. Restricted
securities for which no market exists and other illiquid  investments are valued
at  fair  value  as  determined  in  accordance  with  procedures  approved  and
periodically reviewed by the Board of Managers.

     Restricted  securities and other illiquid investments involve the risk that
the securities will not be able to be sold at the time desired by the Adviser or
at  prices  approximating  the  value at  which  the  Company  is  carrying  the
securities.

Temporary Investments

     For  defensive  purposes,  the  Company  may  temporarily  invest  all or a
substantial  portion of its assets in high  quality  debt  securities  and money
market  instruments,  or may temporarily  hold cash or cash  equivalents in such
amounts as the Adviser deems  appropriate  under the  circumstances.  Securities
will be  deemed  to be of  high  quality  if they  are  rated  in the top  three
categories  by an NRSRO or,  if  unrated,  are  determined  to be of  comparable
quality by the Adviser.  Money market  instruments are high quality,  short-term
debt  obligations  (which  generally  have  remaining  maturities of one year or
less),  and  may  include:   U.S.  Government   Securities;   commercial  paper;
certificates of deposit and banker's  acceptances issued by domestic branches of
United  States  banks  that  are  members  of  the  Federal  Deposit   Insurance
Corporation;  and repurchase agreements for U.S. Government Securities.  In lieu
of purchasing money market instruments, the Company may purchase shares of money
market  mutual funds that invest  primarily in U.S.  Government  Securities  and
repurchase agreements involving those securities, subject to certain limitations
imposed by the 1940 Act.

     The Company may also invest in money market  instruments or purchase shares
of money  market  mutual  funds  pending  investment  of its  assets  in  equity
securities  or non-money  market  fixed-income  securities,  or to maintain such
liquidity as may be necessary to effect repurchases of Interests from Members or
for other purposes.

     Repurchase  agreements  are  agreements  under which the Company  purchases
securities from a bank that is a member of the Federal Reserve System, a foreign
bank or a securities  dealer that agrees to repurchase the  securities  from the
Company at a higher  price on a designated  future  date.  If the seller under a
repurchase  agreement becomes  insolvent,  the Company's right to dispose of the
securities may be restricted,  or the value of the securities may decline before
the  Company  is able to dispose of them.  In the event of the  commencement  of
bankruptcy  or  insolvency  proceedings  with  respect  to  the  seller  of  the
securities before the repurchase of the securities under a repurchase  agreement
is accomplished,  the Company may encounter a delay and incur costs, including a
decline  in the  value  of  the  securities,  before  being  able  to  sell  the
securities.  If the seller  defaults,  the value of the  securities  may decline
before the  Company is able to dispose of them.  If the  Company  enters  into a
repurchase  agreement  that is  subject  to  foreign  law and  the  other  party
defaults,  the Company may not enjoy protections comparable to those provided to
certain repurchase  agreements under U.S.  bankruptcy law, and


                                      -25-
<PAGE>


may suffer  delays and losses in disposing of the  collateral  as a result.  The
Company has adopted procedures designed to minimize certain of the risks of loss
from the Company's repurchase agreement transactions.

Investment Policies and Restrictions

     The Company has adopted the following six fundamental  investment policies,
which  cannot  be  changed  without  the  vote of a  majority  of the  Company's
outstanding voting securities (as defined by the 1940 Act):

     (1)  The  Company  will not invest  more than 25% of the value of its total
          assets in the securities  (other than U.S.  Government  Securities) of
          issuers engaged in any single industry.

     (2)  The Company will not issue senior securities  representing  stock, but
          may borrow money from banks, brokers and other lenders, and may engage
          in  transactions  involving  the  issuance  by the  Company of "senior
          securities" representing indebtedness,  to the extent permitted by the
          1940 Act.

     (3)  The Company will not underwrite  securities of other  issuers,  except
          insofar as the Company may be deemed an underwriter under the 1933 Act
          in connection with the disposition of its portfolio securities.

     (4)  The  Company  will not make  loans  of  money or  securities  to other
          persons,  except through purchasing fixed-income  securities,  lending
          portfolio  securities  or entering  into  repurchase  agreements  in a
          manner consistent with the Company's investment policies.

     (5)  The  Company  will  not  purchase  or sell  commodities  or  commodity
          contracts,  but the Company may purchase and sell foreign currency and
          enter into foreign currency forward contracts, and may engage in other
          transactions  in  financial  instruments,  in each case to the  extent
          permitted  under the Company's  investment  policies as in effect from
          time to time.

     (6)  The Company will not  purchase,  hold or deal in real estate,  but may
          invest  in  securities  that are  secured  by real  estate or that are
          issued by companies that invest or deal in real estate.

     The investment  objective of the Company is also fundamental and may not be
changed  without  a vote  of a  majority  of the  Company's  outstanding  voting
securities.

     Under  the 1940  Act,  the vote of a  majority  of the  outstanding  voting
securities of an investment company, such as the Company,  means the vote, at an
annual or a special meeting of the security  holders of the company duly called,
(A) of 67 percent or more of the voting  securities  present at the meeting,  if
the holders of more than 50 percent of the outstanding  voting securities of the
company are present or represented  by proxy;  or (B) of more than 50 percent of
the outstanding voting securities of the company, whichever is less.


                                      -26-
<PAGE>


     With respect to these investment restrictions, and other policies described
in this Confidential  Memorandum,  if a percentage  restriction is adhered to at
the time of entering  into the  investment  or  transaction,  a later  change in
percentage  resulting from a change in the values of investments or the value of
the Company's  total assets,  unless  otherwise  stated,  will not  constitute a
violation  of the  restriction  or  policy.  In  addition  to  the  restrictions
contained in the fundamental  investment  policies stated above,  the Company is
subject to certain restrictions imposed by the 1940 Act on registered investment
companies,  including  restrictions  with  respect  to  its  investment  in  the
securities  of other  investment  companies,  insurance  companies and companies
engaged in certain securities related businesses.

     Generally, the Company may not purchase or otherwise acquire the securities
of any company that derives more than 15% of its gross revenues from  securities
related activities,  which means activities as a broker, dealer,  underwriter or
registered  investment  adviser  (a  "Securities  Related  Issuer"),  unless  it
complies  with the following  conditions:  (i)  immediately  after a purchase of
equity securities of a Securities  Related Issuer,  the Company may not own more
than 5% of the outstanding  securities of any class of equity  securities of the
issuer;  (ii) immediately  after the purchase of a debt security of a Securities
Related  Issuer,  the  Company  may not own  more  than  10% of the  outstanding
principal amount of the issuer's debt securities;  and (iii)  immediately  after
any such  purchase,  the Company may not have invested more than 5% of its total
assets in securities of the Securities  Related Issuer.  Under applicable rules,
the Company may not purchase any securities of a Securities  Related Issuer that
is the  investment  adviser or  principal  underwriter  of the  Company or is an
affiliated person of the adviser or principal underwriter.

     The Company is also  generally  prohibited  from  purchasing  or  otherwise
acquiring:  (i) more than 3% of the outstanding  voting  securities of any other
investment company;  (ii) securities issued by another investment company having
an aggregate value in excess of 5% of the total assets of the Company; and (iii)
securities of all investment  companies  having an aggregate  value in excess of
10% of the total assets of the Company.

     In  addition,  the Company  generally  is  prohibited  from  purchasing  or
otherwise  acquiring any security  (not limited to equity or debt  individually)
issued by any insurance company if the Company and any company controlled by the
Company own in the aggregate  or, as a result of the  purchase,  will own in the
aggregate more than 10% of the total  outstanding  voting stock of the insurance
company. Certain state insurance laws impose similar limitations.

     The BHC Act,  together  with the  rules  and  regulations  of the  Board of
Governors  of the  Federal  Reserve  (the  "Federal  Reserve"),  impose  certain
restrictions on the ability of bank holding companies and their  subsidiaries to
own equity  securities of certain  issuers.  Canadian  Imperial Bank of Commerce
("CIBC"),  the parent company of CIBC WM, the managing member of the Adviser, is
subject to the BHC Act and those rules and regulations.  CIBC may also be deemed
to "control" the Company for purposes of the BHC Act as a result of the Managers
of the Company also serving on the boards of other CIBC WM investment funds that
may be deemed to be controlled by CIBC WM under the BHC Act.

     In  particular,  CIBC  generally  may  not  own  or  control,  directly  or
indirectly,  more  than 5% of the  outstanding  shares  of any  class of  voting
securities or more than 25% of the


                                      -27-
<PAGE>


outstanding equity (including  subordinated debt) of a non-banking  company with
business  activities  in the United  States,  or,  without  the  approval of the
Federal Reserve and other appropriate  regulatory agencies,  more than 5% of the
outstanding  shares of any class of  voting  securities  or more than 25% of the
outstanding  equity (including  subordinated debt) of any issuer that is a bank,
bank holding  company,  thrift or thrift holding  company (the "Equity  Limit").
Because CIBC may be deemed to control the Company  within the meaning of the BHC
Act, the Company's holdings of all such securities will be aggregated with those
of CIBC and its subsidiaries (including CIBC WM) for purposes of calculating the
Equity Limit.  Consequently,  the Company  generally  will be unable to purchase
equity  securities  that,  when taken together with the equity  securities of an
issuer owned or controlled by CIBC and its subsidiaries,  would cause the Equity
Limit to be exceeded. In addition,  CIBC and its subsidiaries  generally will be
precluded  under the BHC Act from  exerting a  "controlling  influence  over the
management  or  policies" of a company with  business  activities  in the United
States.  Consequently,  activities in relation to companies in which the Company
may invest will need to be conducted so as not to result in a  determination  of
"control" within the meaning of the BHC Act.

     After March 11, 2000,  the Equity Limit may no longer apply to the Company,
as a result of amendments to the BHC Act that take effect on that date.

     The Adviser  does not expect that the  restrictions  imposed by the BHC Act
will adversely impact the investment operations of the Company.

     The Adviser  will not cause the  Company to make loans to or receive  loans
from the Adviser or its affiliates,  except to the extent  permitted by the 1940
Act or as  otherwise  permitted  by  applicable  law.  The  Company  may  effect
brokerage transactions through affiliates of the Adviser,  subject to compliance
with the 1940 Act. (See "Conflicts Of Interest - CIBC WM" and "Brokerage.")

                             ADDITIONAL RISK FACTORS

Small and Mid Capitalization Companies

     A significant  portion of the Company's assets will normally be invested in
securities  of  small  and  mid  capitalization  companies.  Historically,  such
securities  have been more  volatile in price than those of larger  capitalized,
more established  companies included in the Standard & Poor's Composite Index of
500 Stocks  (the "S&P  500").  The  securities  of small and mid  capitalization
companies pose greater  investment risks because such companies may have limited
product lines,  distribution  channels and financial and  managerial  resources.
Further,  there is often less publicly  available  information  concerning  such
companies than for larger, more established businesses. The equity securities of
small and mid capitalization  companies are often traded  over-the-counter or on
regional  exchanges  and may not be traded in the volumes  typical on a national
securities  exchange.  Consequently,  the  Company may be required to dispose of
such securities over a longer (and  potentially  less favorable)  period of time
than is  required  to dispose of the  securities  of  larger,  more  established
companies.  Investments in companies with limited  operating  histories are more
speculative  and entail  greater risk than do  investments  in companies with an
established operating record.


                                      -28-
<PAGE>


Incentive Allocation

     The  special  allocation  of 20% of net  profits  to the  Special  Advisory
Account  (defined  below) of the Adviser may create an incentive for the Adviser
to cause the Company to make  investments  that are riskier or more  speculative
than would be the case in the absence of the Incentive Allocation.  In addition,
because  the  allocation  is  calculated  on a basis  that  includes  unrealized
appreciation of the Company's  assets,  the Incentive  Allocation may be greater
than if it were based  solely on realized  gains.  (See  "Capital  Accounts  and
Allocations - Incentive Allocation.")

Tax Risks

     Counsel to the  Company  will render an opinion  that the  Company  will be
treated as a partnership and not as an association  taxable as a corporation for
Federal  income tax  purposes.  Counsel to the  Company  has also  rendered  its
opinion that,  under a "facts and  circumstances"  test set forth in regulations
adopted by the U.S.  Treasury  Department,  the Company will not be treated as a
"publicly traded partnership" taxable as corporation. If it were determined that
the Company should be treated as an association or publicly  traded  partnership
taxable as a corporation (as a result of a successful  challenge to the opinions
rendered by counsel to the  Company or  otherwise),  the  taxable  income of the
Company would be subject to corporate  income tax and  distributions  of profits
from the  Company  would be  treated  as  dividends.  (See  "Tax  Aspects  - Tax
Treatment of Company Operations - Classification of the Company.")

Lack of Operating History

     The Company is a recently  formed entity and has no operating  history upon
which  investors  can evaluate the  performance  of the  Company.  However,  the
principal  members  of  the  Adviser  responsible  for  managing  the  Company's
investment  portfolio  (including such members'  employees and affiliates)  have
substantial  experience in managing investment portfolios and private investment
funds.  Moreover,  CWH, a member of the Adviser  whose  personnel  is  primarily
responsible  for managing the Company's  investment  portfolio,  has substantial
experience in managing private  investment  funds that have investment  programs
that  are  substantially  similar  to the  Company's  investment  program.  (See
"Performance  Information," "The Adviser, CIBC WM and CWH Associates,  Inc." and
"Conflicts of Interest - Participation in Investment Opportunities.")

Liquidity Risks

     Interests are not traded on any securities exchange or other market and are
subject to substantial restrictions on transfer.  Although the Company may offer
to repurchase Interests from time to time, a Member may not be able to liquidate
its  Interest in the Company for up to two years.  The Adviser  expects  that it
will  recommend to the Board of Managers  that the Company  offer to  repurchase
Interests from Members at the end of 2000, and, for each year thereafter,  twice
each year,  effective at the end of the second  fiscal  quarter and again at the
end of the year. (See "Redemptions, Repurchases of Interests and Transfers.")

Distributions to Members and Payment of Tax Liability


                                      -29-
<PAGE>


     The  Company  does not  intend to make  periodic  distributions  of its net
income or gains,  if any, to  Members.  Whether or not  distributions  are made,
Members will be required  each year to pay  applicable  Federal and state income
taxes on their respective shares of the Company's taxable income,  and will have
to pay  applicable  taxes  from  other  sources.  The  amount  and  times of any
distributions  will  be  determined  in the  sole  discretion  of the  Board  of
Managers.

                             PERFORMANCE INFORMATION

     Appendix B contains performance  information for Worthington Growth L.P., a
private investment  partnership  managed by an entity controlled by CWH, with an
investment program substantially similar to that of the Company, from January 1,
1990 through December 31, 1999. The future performance of the Company may differ
from  that  of   Worthington   Growth  L.P.  (See   "Conflicts  of  Interest  --
Participation in Investment Opportunities.") PAST PERFORMANCE DOES NOT GUARANTEE
FUTURE RESULTS.

                                BOARD OF MANAGERS

     The Board of Managers has overall  responsibility  for the  management  and
supervision  of the  operations  of the Company and has approved  the  Company's
investment program. It exercises the same powers, authority and responsibilities
on behalf of the Company as are customarily  exercised by the board of directors
of a  registered  investment  company  organized  as a  corporation,  and it has
complete and exclusive  authority to oversee and to establish policies regarding
the  management,  conduct and operation of the Company's  business.  The persons
comprising the Board of Managers ("Managers") will not contribute to the capital
of the Company in their  capacity as Managers,  but may subscribe for Interests,
subject  to  the  eligibility   requirements   described  in  this  Confidential
Memorandum.


                                      -30-
<PAGE>


     The  identity  of  the  members  of  the  Board  of  Managers,   and  brief
biographical information regarding each Manager, is set forth below.

<TABLE>
<CAPTION>
            Name, Address        Position(s) Held                 Principal Occupation(s)
               and Age           with the Company                    During Past 5 years
           ---------------       ----------------                  ---------------------

<S>                              <C>                   <C>
Sol Gittleman                    Manager               Mr.  Gittleman  has been Senior Vice  President and
                                                       Provost of Tufts  University  since  1981.  He is a
Ballou Hall                                            Director  of the Mexico  Equity  and  Income  Fund,
Tufts University                                       Inc.  and  CIBC  Oppenheimer  Technology  Partners,
Medford, MA  02155                                     L.L.C.,  as well as an Individual  General  Partner
Age 64                                                 of Augusta Partners, L.P. and Troon Partners, L.P.

Luis Rubio                       Manager               Dr. Rubio is  President of Centro de  Investigation
                                                       Para  El  Desarrollo,   A.C.  (Center  of  Research
Centro de Investigacion                                Development),  Adjunct Fellow, Center for Strategic
Para El Desarrollo, A.C.                               and  International  Studies  and a  Member  of  the
Jaime Balmes No. 11,  D-2                              Advisory  Board of the National  Council of Science
Los Morales Polanco                                    and  Technology  of  Mexico.  He is also a Director
Mexico D.F. 11510                                      of the  Central  European  Value  Fund,  Inc.,  The
Age 43                                                 Mexico  Equity  and  Income  Fund,  Inc.  and  CIBC
                                                       Oppenheimer  Technology  Partners,  L.L.C., as well
                                                       as certain other offshore private  investment funds
                                                       associated  with CIBC WM. He is also an  Individual
                                                       General  Partner  of  Augusta  Partners,  L.P.  and
                                                       Troon  Partners,   L.P.  From  1991  to  1993,  Dr.
                                                       Rubio was a Director  of Banco  National  de Mexico
                                                       S.A.

Janet L. Schinderman             Manager               Ms.  Schinderman  is  Associate  Dean  for  Special
                                                       Projects  and  Secretary  to the Board of Overseers
Columbia Business School                               at   Columbia    Business    School   of   Columbia
Office of the Dean                                     University.  From  1987  to  1990,  she  served  as
101 Uris Hall                                          Executive   Assistant  to  the   President  at  the
Columbia University                                    Illinois  Institute of Technology.  Ms. Schinderman
New York, NY  10027                                    is also an  Individual  General  Partner of Augusta
Age 47                                                 Partners, L.P. and Troon Partners, L.P.

Howard M. Singer*                Manager               Mr.   Singer   is  a   Managing   Director,  Asset
</TABLE>


                                       31-
<PAGE>


<TABLE>
<CAPTION>
            Name, Address        Position(s) Held                 Principal Occupation(s)
               and Age           with the Company                     During Past 5 years
           ---------------       ----------------                   ---------------------
<S>                              <C>                   <C>

                                                       Management, CIBC WM.
CIBC World Markets Corp.
1 World Financial Center
New York, New York  10281
Age 36
</TABLE>

*    Manager who is an  "interested  person" (as defined by the 1940 Act) of the
     Company.

     The Managers serve for terms of indefinite  duration.  A Manager's position
in that capacity will terminate if the Manager is removed, resigns or is subject
to various disabling events such as death,  incapacity or bankruptcy.  A Manager
may  resign,  subject  to  giving  90 days'  prior  written  notice to the other
Managers if such resignation is likely to affect adversely the tax status of the
Company,  and may be removed either by vote of two-thirds  (2/3) of the Managers
not  subject to the removal  vote or by a vote of the  Members  holding not less
than  two-thirds  (2/3) of the total number of votes  eligible to be cast by all
Members.  In the  event  of any  vacancy  in the  position  of an  Manager,  the
remaining Managers may appoint an individual to serve as an Manager,  so long as
immediately after the appointment at least two-thirds (2/3) of the Managers then
serving  have been  elected by the  Members.  The Board of  Managers  may call a
meeting of Members to fill any vacancy in the  position of an Manager,  and must
do so within 60 days after any date on which  Managers  who were  elected by the
Members cease to constitute a majority of Managers then serving.

     The  following   table  sets  forth  certain   information   regarding  the
compensation  expected to be received by the  Managers  who are not  "interested
persons"  (as  defined  by the 1940  Act) of the  Company  or the  Adviser  (the
"Independent  Managers")  from the  Company and from all  registered  investment
companies for which the Adviser or its  affiliates  serve as investment  adviser
for the calendar year ending  December 31, 2000. No  compensation is paid by the
Company to Managers who are "interested persons" (as defined by the 1940 Act) of
the Company or the Adviser.

                                                          COMPENSATION TABLE
<TABLE>
<CAPTION>
                                                         Pension or
                                                    Retirement Benefits
                                                     Accrued as Part of     Estimated Annual      Total Compensation
                                 Compensation             Company            Benefits Upon           from CIBC WM
      Name of Person             from Company             Expenses             Retirement          Registered Funds
      --------------             ------------         ----------------         ----------          ----------------

<S>                                 <C>                      <C>                    <C>                <C>
Sol Gittleman                       $7,800                   0                      0                  $31,200

Luis Rubio                          $7,800                   0                      0                  $46,800

Janet Schinderman                   $7,800                   0                      0                  $23,400
</TABLE>

     Currently,  the  Independent  Managers are each paid an annual  retainer of
$5,000 and per meeting fees of $700 (or $100 in the case of telephonic meetings)
by  the  Company,  and


                                      -32-
<PAGE>


are reimbursed by the Company for their reasonable  out-of-pocket  expenses. The
Managers do not receive any pension or retirement benefits from the Company.

                  THE ADVISER, CIBC WM AND CWH ASSOCIATES, INC.

     The Adviser serves as the Company's  investment  adviser and has been given
the responsibility to manage the investment portfolio of the Company, subject to
the ultimate supervision of and subject to any policies collectively established
by the  Board  of  Managers,  including  the  Company's  fundamental  investment
policies, pursuant to the terms of an investment advisory agreement entered into
between the Company and the Adviser dated as of January 5, 2000 (the "Investment
Advisory Agreement").

     The Adviser was formed as a Delaware limited  liability  company in October
1997 and is registered as an investment  adviser under the  Investment  Advisers
Act of 1940 (the "Advisers Act"). The Adviser serves as an investment adviser or
general  partner of other  registered  and  private  investment  companies.  The
offices of the Adviser are located at One World  Financial  Center,  31st Floor,
200 Liberty Street,  New York, New York 10281, and its telephone number is (212)
667-4225.

     CIBC WM is the managing member of (and therefore  controls) the Adviser and
oversees the Adviser's  provision of investment advice to the Company.  CWH is a
non-managing  member of the Adviser  and  provides  the Adviser  with use of and
access to such of its personnel, research and facilities as the Adviser requires
to  manage  the  Company's  investment   portfolio.   Such  personnel  have  the
responsibility,  subject only to the supervision of the personnel of CIBC WM and
the Board of Managers,  for the  investment  advisory  services  provided to the
Company.  The interest of CIBC WM and CWH in the  Adviser,  as it relates to the
Adviser's  business of providing  services to the Company,  is  represented by a
separate  series of  interests  in the  Adviser  relating  specifically  to such
business.  Pursuant to applicable law, the debts, liabilities and obligations of
the Adviser  related to that series are  enforceable  against the assets of that
series  only,  and not against the assets of any other  series or of the Adviser
generally.  Similarly,  the debts,  liabilities  and  obligations of the Adviser
relating to any other  series of  interests  in the Adviser are not  enforceable
against  the assets of the  series  relating  to the  Company.  Other  series of
interests in the Adviser represent interests in other business activities of the
Adviser.

     The Adviser and companies  controlling the Adviser  (including CIBC WM, its
managing  member,  and CIBC,  CIBC WM's parent) may be deemed to  "control"  the
Company,  as such term is  defined  by the 1940 Act.  CIBC may also be deemed to
"control" the Adviser under  certain  provisions of the U.S.  banking laws. As a
result,  certain  activities of the Company may be restricted by the BHC Act and
the rules and regulations thereunder as described elsewhere in this Confidential
Memorandum.

     CIBC WM is a member of the New York  Stock  Exchange  and  other  principal
securities exchanges. As a registered  broker-dealer,  CIBC WM is subject to the
informational  requirements  of the U.S.  Securities  Exchange  Act of 1934,  as
amended,  and in accordance  therewith  files reports with the SEC. Such reports
filed by CIBC WM with the SEC will be made available to any prospective investor
upon request. CIBC, the parent company of CIBC WM, and its affiliates, including
CIBC WM, are subject to the BHC Act and the rules and


                                      -33-
<PAGE>


regulations of the Federal Reserve.  CIBC WM is also registered as an investment
adviser with the SEC under the Advisers Act.

     CIBC WM is the U.S. corporate, investment, institutional and private client
banking arm of CIBC, which currently is the second-largest  bank in Canada, with
assets of approximately U.S. $170 billion as of October 31, 1999.  Although CIBC
has conducted  business in the United States for over a century,  the name "CIBC
Oppenheimer  Corp." was adopted in November 1997 when CIBC Wood Gundy Securities
Corp.  acquired  Oppenheimer & Co.,  Inc., one of the largest  privately  owned,
full-service  securities firms in the U.S. At the time of the  acquisition,  the
combined  company was renamed "CIBC  Oppenheimer  Corp."  Effective May 3, 1999,
CIBC  Oppenheimer  Corp.  changed  its name to CIBC World  Markets  Corp.  Known
globally under the marketing name CIBC World  Markets,  this worldwide  business
offers a complete range of investment and corporate  banking,  capital  markets,
asset  management  and  brokerage  activities.  CIBC  WM  also  provides  wealth
management  and  retail  brokerage   services  under  the  marketing  name  CIBC
Oppenheimer.  CIBC WM has approximately 4,500 employees in the United States and
9,000 worldwide.

     CWH,  a  non-managing  member  of the  Adviser,  was  formed in 1989 by its
majority  shareholder,  Clifford W. Henry.  CWH is  registered  as an investment
adviser with the SEC under the Advisers  Act and manages  investment  portfolios
for individual and  institutional  accounts.  CWH had assets under management of
approximately  $65  million as of December  31,  1999.  Through  its  affiliate,
Scottsdale  Associates,  L.P.,  CWH acts as the general  partner of  Worthington
Growth  L.P.,  a private  investment  partnership  formed in 1989,  which has an
investment program substantially similar to that of the Company.

     The personnel of CWH who have the primary responsibility for the investment
advisory services provided on behalf of the Adviser to the Company are:

     Clifford W. Henry, age 60, is the Chairman and President of CWH Associates,
Inc. Mr. Henry's business  experience is as follows: In 1981, Mr. Henry founded,
and until  1988,  Mr.  Henry was a partner and member of the  Investment  Policy
Committee of Dawson-Henry  Capital  Management  ("Dawson-Henry"),  an investment
management  firm,  which  specialized in equity  investments for individuals and
pension funds.  During such time, Mr. Henry also served as a general  partner of
Southport  Management  Limited  Partnership,   a  private  investment  fund  for
individuals managed by Dawson-Henry.  Mr. Henry's  responsibilities at Southport
Management  included  direction of overall investment  policies,  with a special
emphasis on emerging growth,  financial,  and consumer groups. In addition,  Mr.
Henry  was  responsible  for the  research  and  implementation  of a real  time
valuation model for the general market and individual stocks.

     Andrew M. Abrams, age 49, is the Chief Operating Officer of CWH Associates,
Inc.  Mr.  Abrams  business  experience  is as  follows:  prior to  joining  CWH
Associates,  Mr. Abrams was general  partner of Abrams  Investment  Partners,  a
partnership he founded in 1990 which merged with CWH Associates.  Previously, he
was senior vice president of institutional sales for Rauscher,  Pierce, Refsnes,
a  Dallas-based  brokerage  firm.  Earlier,  he was  senior  vice  president  of
institutional  sales  and a member  of the  stock  selection  committee  at L.F.
Rothchild,  Unterberg  Towbin,  Inc., and, before that, senior vice president of
institutional sales with Mabon


                                      -34-
<PAGE>


Nugent.  Between 198l and 1985,  he was senior vice  president of  institutional
sales at Prudential-Bache Securities and DQ Securities, a spin-off of Dataquest.

     Pursuant to the Investment Advisory Agreement,  the Adviser is responsible,
subject to the  supervision of the Board of Managers,  for the management of the
Company's  investment  portfolio in accordance with the investment objective and
policies of the Company. The Adviser formulates a continuing  investment program
for the Company. It makes all decisions regarding investments to be purchased or
sold for the Company  (subject to the  supervision of the Board of Managers) and
places all orders for the purchase and sale of investments.

     The  Investment  Advisory  Agreement  was approved by the Board of Managers
(including a majority of the Independent Managers),  at a meeting held in person
on January 5, 2000, and was also approved on that date by Janet L.  Schinderman,
the then sole  member of the  Company.  The  Investment  Advisory  Agreement  is
terminable  without penalty,  on 60 days' prior written notice:  by the Board of
Managers;  by vote of a majority (as defined by the 1940 Act) of the outstanding
voting  securities  of the Company;  or by the Adviser.  The initial term of the
Investment Advisory Agreement expires on January 5, 2002. However, the agreement
may be continued in effect from year to year  thereafter if such  continuance is
approved  annually by either the Board of Managers or the vote of a majority (as
defined by the 1940 Act) of the  outstanding  voting  securities of the Company;
provided that in either event the  continuance is also approved by a majority of
the  Independent  Managers  by vote cast in person at a meeting  called  for the
purpose of voting on such  approval.  The  Investment  Advisory  Agreement  also
provides that it will terminate  automatically in the event of its "assignment,"
as defined by the 1940 Act and the rules thereunder.

     The Investment  Advisory Agreement provides that, in the absence of willful
misfeasance,   bad  faith,   gross  negligence  or  reckless  disregard  of  its
obligations  to the Company,  the Adviser and any member,  director,  officer or
employee  thereof,  or any  of  their  affiliates,  executors,  heirs,  assigns,
successors or other legal representative,  will not be liable to the Company for
any error of judgment, for any mistake of law or for any act or omission by such
person in  connection  with the  performance  of  services to the  Company.  The
Investment Advisory Agreement also provides for indemnification,  to the fullest
extent permitted by law, by the Company of the Adviser, or any member, director,
officer or employee  thereof,  and any of their  affiliates,  executors,  heirs,
assigns,  successors  or other legal  representatives,  against any liability or
expense to which such person may be liable  which arise in  connection  with the
performance  of services to the Company,  provided that the liability or expense
is not incurred by reason of the person's willful misfeasance,  bad faith, gross
negligence or reckless disregard of its obligations to the Company.

     The Investment  Advisory  Agreement  provides that in  consideration of the
services  provided  by the  Adviser,  the  Adviser  shall be  entitled to be the
Special  Advisory  Member of the  Company.  In such  capacity,  the  Adviser  is
entitled  to receive  the  Incentive  Allocation.  (See  "Capital  Accounts  and
Allocations  -- Incentive  Allocation.")  The incentive  allocation  arrangement
between the  Company and the Adviser was also  approved by the Board of Managers
(including  a majority  of the  Independent  Managers),  and by vote of Janet L.
Schinderman, as the then sole member of the Company, on January 5, 2000.


                                      -35-
<PAGE>


                                     VOTING

     Each  Member has the right to cast a number of votes  based on the value of
the Member's  respective capital account at any meeting of Members called by the
Board of Managers or by Members holding 25% or more of the total number of votes
eligible  to be cast.  Members  will be  entitled to vote on any matter on which
shareholders of a registered investment company organized as a corporation would
normally be entitled to vote,  including  election of Managers,  approval of the
agreement  with the  investment  adviser of the  Company,  and  approval  of the
Company's  auditors,  and on certain other  matters.  Except for the exercise of
their voting  privileges,  Members in their capacity as such are not entitled to
participate in the management or control of the Company's business,  and may not
act for or bind the  Company.  The  interest of the Special  Advisory  Member is
non-voting.

                              CONFLICTS OF INTEREST

CIBC WM

     In  addition  to serving as the  managing  member of the  Adviser,  CIBC WM
(directly  or  through  its  affiliates,   including  the  Adviser)  carries  on
substantial  investment  activities for its own account and for other registered
investment  companies,   private  investment   partnerships,   institutions  and
individual  clients  (collectively,  "CIBC  WM  Clients").  The  Company  has no
interest  in these  activities.  As a result of the  foregoing,  CIBC WM and its
officers or employees  who assist CIBC WM in its  management of the Adviser will
be engaged in substantial activities other than on behalf of the Adviser and may
have conflicts of interest in allocating  their time and activities  between the
Adviser  and  CIBC  WM  Clients.  Nevertheless,  CIBC WM and  its  officers  and
employees  will  devote so much time to the  affairs of the  Adviser as in their
judgment is necessary and appropriate.

     CIBC WM acts as the  placement  agent for the  Company  and will bear costs
associated with its activities as placement  agent.  CIBC WM, as managing member
of the Adviser and in its capacity as placement  agent for the Company,  intends
to compensate  its account  executives  for their  ongoing  servicing of CIBC WM
clients with whom they have placed Interests.  CIBC WM intends to compensate its
account  executives  based upon a formula  that takes into account the amount of
client assets being serviced as well as the investment  results  attributable to
clients'  assets  invested in the  Company.  Additionally,  in  connection  with
initial and additional  purchases of Interests,  an investor's account executive
may charge the investor a sales commission of up to 3% of the amount transmitted
for such purchase (up to 3.1% of the amount invested), in the sole discretion of
the  account  executive.   (See  "Fees  and  Expenses,"  "Capital  Accounts  and
Allocations - Incentive  Allocation"  and  "Subscriptions  for Interests - Sales
Charge.")

     Situations  may  arise in which  accounts  affiliated  with  CIBC WM or its
affiliates  have  purchased   securities  that  would  have  been  suitable  for
investment by the Company,  but which the Company,  for various reasons, did not
choose to purchase. This could affect the availability (or price) of investments
to the  Company  at a later  time.  From  time to  time,  in the  course  of its
brokerage, investment or dealer activities, CIBC WM or its affiliates may trade,


                                      -36-
<PAGE>


position or invest in, for its own  account,  the same  securities,  as those in
which the Company  invests.  This could have an adverse  impact on the Company's
investment performance.

     IBC WM and its  affiliates  may provide  brokerage and other  services from
time to time to one or more  accounts or  entities  managed by CWH or one of its
affiliates.

CWH

     CWH, its  affiliates and certain of the  investment  professionals  who are
principals of or employed by CWH or its affiliates  (collectively  with CWH, the
"CWH Affiliates") carry on substantial  investment  activities for other advised
accounts and for their own accounts. In addition,  the CWH Affiliates advise (or
serve as general  partner of) private  investment  funds,  and may in the future
serve in a similar  capacity for other  pooled  investment  vehicles,  including
registered   investment  companies  and  additional  private  investment  funds,
established by CWH or others,  with investment  programs  similar to that of the
Company. (All accounts managed by the CWH Affiliates, excluding the Company, are
referred to collectively as the "CWH  Accounts.") The Company has no interest in
these  activities.  As a  result  of  the  foregoing,  CWH  and  the  investment
professionals  of CWH who, on behalf of the Adviser,  will manage the  Company's
investment  portfolio  will be engaged in substantial  activities  other than on
behalf of the Adviser and may have  conflicts  of interest in  allocating  their
time and activity  between the Company and the CWH Accounts.  These persons will
devote only so much time to the affairs of the Adviser as in the judgment of CWH
is necessary and appropriate.

     In addition,  the CWH Affiliates may receive research products and services
in connection  with the brokerage  services that CIBC WM and its  affiliates may
provide  from  time  to  time  (i) to one or more  CWH  Accounts  or (ii) to the
Company.

Participation in Investment Opportunities

     The Adviser  and the CWH  Affiliates  serve or may serve as the  investment
adviser for certain  private  investment  companies  and may be appointed in the
future  to serve  as the  investment  adviser  to  other  registered  investment
companies,  private investment  partnerships or managed accounts that may pursue
an investment strategy similar to that of the Company (the "Other Accounts"). As
a general matter, the Adviser (subject to any policies  established by the Board
of  Managers)  will  consider  participation  by the Company in all  appropriate
investment  opportunities that are under consideration by the Adviser or the CWH
Affiliates for investment for the Other  Accounts.  There may be  circumstances,
however, under which the Adviser or the CWH Affiliates will cause one or more of
the Other Accounts to commit a larger  percentage of their respective  assets to
an  investment  opportunity  than to which the Adviser will commit the Company's
assets.  There may also be  circumstances  under  which the  Adviser  or the CWH
Affiliates  will  consider  participation  by the Other  Accounts in  investment
opportunities  in which the  Adviser  does not intend to invest on behalf of the
Company.

     The Adviser will evaluate for the Company,  and it is anticipated  that the
CWH Affiliates will evaluate for each CWH Account, a variety of factors that may
be relevant in determining whether, and to what extent, a particular  investment
opportunity  or strategy is  appropriate  and  feasible for the Company or a CWH
Account at a particular time, including,  but


                                      -37-
<PAGE>


not  limited to, the  following:  (1) the nature of the  investment  opportunity
taken in the context of the other  investments at the time; (2) the liquidity of
the investment  relative to the needs of the particular  entity or account;  (3)
the availability of the opportunity (i.e., size of obtainable position); (4) the
transaction  costs  involved;  and (5) the investment or regulatory  limitations
applicable to the particular entity or account. Because these considerations may
differ for the  Company and the CWH  Accounts  in the context of any  particular
investment  opportunity,  the  investment  activities of the Company and the CWH
Accounts may differ from time to time. In addition, the fees and expenses of the
Company  may differ  from those of the CWH  Accounts.  Accordingly,  prospective
Members  should  note that the future  performance  of the  Company  and the CWH
Accounts or Other Accounts may vary.

     When  the  Adviser  and the CWH  Affiliates  determine  that  it  would  be
appropriate  for the  Company  and one or more CWH  Accounts,  respectively,  to
participate in an investment  opportunity at the same time, they will aggregate,
place and  allocate  orders on a basis that the Adviser  believes to be fair and
equitable,  consistent with its responsibilities  under the Advisers Act and the
1940 Act.  Decisions in this regard are  necessarily  subjective and there is no
requirement that the Company  participate,  or participate to the same extent as
the CWH Accounts,  in all trades.  However,  no participating  entity or account
will receive  preferential  treatment over any other and the Adviser and the CWH
Affiliates  will take steps to ensure  that no  participating  entity or account
(including the Company) will be systematically disadvantaged by the aggregation,
placement and allocation of orders.

     Situations  may occur,  however,  where the Company could be  disadvantaged
because of the investment activities conducted by the CWH Affiliates for the CWH
Accounts.  These situations may be based on, among other things,  the following:
(1) legal  restrictions  on the combined size of positions that may be taken for
the Company and the CWH  Accounts,  thereby  limiting the size of the  Company's
position;  (2) the  difficulty of  liquidating an investment for the Company and
the CWH Accounts where CWH cannot absorb the sale of the combined positions; and
(3) the determination  that a particular  investment is warranted only if hedged
with an option or other instrument and there is a limited  availability of these
options  or  other  instruments.  In  particular,  the  Company  may be  legally
restricted from entering into a "joint transaction" (as defined by the 1940 Act)
with the CWH Accounts with respect to the  securities of an issuer without first
obtaining  exemptive  relief from the SEC.  (See  "Conflicts Of Interest - Other
Matters.")

     The members of the Adviser,  and their  directors,  officers and employees,
may buy and sell securities or other  investments for their own accounts and may
have actual or potential  conflicts of interest with respect to investments made
on behalf  of the  Company.  As a result of  differing  trading  and  investment
strategies or  constraints,  positions  may be taken by directors,  officers and
employees of CIBC WM or CWH, or by the CWH Affiliates for the CWH Accounts, that
are the same, different or made at a different time than positions taken for the
Company. In order to mitigate the possibility that the Company will be adversely
affected by this  personal  trading,  the Company and the Adviser have adopted a
Joint  Code of  Ethics in  compliance  with  Section  17(j) of the 1940 Act that
restricts   securities   trading  in  the   personal   accounts  of   investment
professionals  and others  who  normally  come into  possession  of  information
regarding the Company's portfolio transactions.


                                      -38-
<PAGE>


Other Matters

     The Adviser and its members (and  affiliated  persons of its members)  will
not purchase  securities or other  property  from,  or sell  securities or other
property to, the Company. However, CIBC WM and its affiliated broker-dealers may
act as  broker  for the  Company  in  effecting  securities  transactions.  (See
"Brokerage.") In addition, the Company may effect certain principal transactions
in securities with one or more CWH Accounts, except for accounts in which CWH or
any affiliate  thereof serves as a general partner or certain  accounts in which
it has a financial  interest  (other than an interest  that results  solely from
CWH's or any affiliate's  appointment as an investment  adviser to the account).
These  transactions  would be  effected in  circumstances  where the Adviser has
determined  that it would be  appropriate  for the Company to purchase and a CWH
Account to sell, or the Company to sell and a CWH Account to purchase,  the same
security or  instrument  on the same day. The  purchases and sales would be made
pursuant to procedures  adopted by the Company  pursuant to Rule 17a-7 under the
1940 Act. Among other things,  those procedures are intended to ensure that: (1)
each transaction  will be effected for cash  consideration at the current market
price of the particular  securities;  (2) no transaction will involve restricted
securities  or other  securities  for which  market  quotations  are not readily
available; and (3) no brokerage commissions, fees (except for customary transfer
fees) or other remuneration will be paid in connection with the transaction.

     The Company is not  permitted to purchase or sell  securities of any issuer
as to which the Adviser has obtained  material,  non-public  information,  until
such time as the information is no longer material or has become publicly known.
This policy could adversely affect the Company's investment  performance because
the  Company  may (i) hold  securities  of an issuer  with  respect to which the
Adviser has adverse  information,  or (ii) not purchase securities of any issuer
with respect to which the Adviser has favorable information.

     As a result of the investment  banking and corporate finance  activities of
CIBC WM, the  Company  may be subject to future  restrictions  on its ability to
purchase or sell  certain  securities.  Additionally,  the Company may  purchase
securities during the existence of an underwriting or selling syndicate in which
CIBC WM or any of its  affiliates  is  participating  only  subject  to  certain
conditions.  This  could  have an  adverse  impact on the  Company's  investment
performance.

     Under the BHC Act and other U.S. banking laws, and the rules,  regulations,
guidelines and policies of the regulatory  agencies and the staff thereof,  CIBC
WM and its affiliates are subject to restrictions on the transactions  that they
may make with the Company,  and their  restrictions  may affect the  investments
made by the Company.

     Future investment  activities of CIBC WM (or its affiliates) or CWH (or its
affiliates) and their principals, partners, directors, officers or employees may
give rise to additional conflicts of interest.

                                    BROKERAGE

     The Adviser is  responsible  for placing  orders for the  execution  of the
Company's portfolio  transactions and the allocation of brokerage.  Transactions
on U.S. stock exchanges and


                                      -39-
<PAGE>


on some foreign  stock  exchanges  involve the payment of  negotiated  brokerage
commissions.  On the great majority of foreign stock exchanges,  commissions are
fixed. No stated  commission is generally  applicable to securities  traded on a
principal basis in over-the-counter  markets, but the prices of those securities
include undisclosed  commissions or mark-ups.  Transactions may also be executed
on an agency basis in over-the-counter  markets,  which will involve the payment
of negotiated or fixed  commissions,  when deemed  consistent with the Company's
brokerage policies.

     In  selecting  brokers and dealers to effect  transactions  on behalf of or
with the Company,  the Adviser  seeks to obtain the best price and execution for
the  Company,  taking  into  account  factors  such as  price,  size  of  order,
difficulty of execution and  operational  facilities  of a brokerage  firm,  the
scope  and  quality  of  brokerage  services  provided,   and  in  the  case  of
transactions  effected by the Company with unaffiliated brokers, the firm's risk
in  positioning  a block of  securities.  Although the Adviser  generally  seeks
reasonably  competitive  commission  rates, the Company will not necessarily pay
the  lowest  commission  available  on  each  transaction.  The  Company  has no
obligation to deal with any broker or group of brokers in executing transactions
in portfolio securities.

     Consistent  with the  principle  of seeking best price and  execution,  the
Adviser  may place  brokerage  business on behalf of the  Company  with  brokers
(including  affiliates  of CIBC  WM)  that  provide  the  Adviser  and CWH  with
supplemental research,  market and statistical information,  including advice as
to the value of  securities,  the  advisability  of investing in,  purchasing or
selling securities,  and the availability of securities or purchasers or sellers
of  securities,   and  furnishing   analyses  and  reports  concerning  issuers,
industries,  securities, economic factors and trends, portfolio strategy and the
performance of accounts. The expenses of the Adviser are not necessarily reduced
as a result of the receipt of this supplemental information, which may be useful
to the Adviser,  CWH and their  respective  affiliates in providing  services to
clients  other  than  the  Company.  In  addition,  not all of the  supplemental
information is used by the Adviser in connection  with the Company.  Conversely,
the  information  provided to the Adviser by brokers and dealers  through  which
other  clients  of the  Adviser,  CWH and  their  respective  affiliates  effect
securities  transactions  may be useful to the Adviser in providing  services to
the Company.

     Although the Company cannot accurately predict its portfolio turnover,  the
Company generally expects that its annual portfolio turnover rate will generally
range between 100% and 200%.  Higher  portfolio  turnover rates usually generate
additional brokerage  commissions and expenses and the short-term gains realized
from these transactions are taxable to the Members as ordinary income.

     The Company may execute portfolio brokerage transactions through CIBC WM or
its  affiliates.  These  transactions  would be effected  pursuant to procedures
adopted by the Company  pursuant to Section 17(e) of the 1940 Act and Rule 17e-1
thereunder.  Among other things, Section 17(e) and those procedures provide that
when acting as broker for the Company in connection  with the sale of securities
to or by the Company,  neither CIBC WM nor any of its affiliates may receive any
compensation  exceeding the following  limits:  (1) if the sale is effected on a
securities  exchange,  the  compensation may not exceed the "usual and customary
broker's  commission"  (as defined in Rule 17e-1 under the 1940 Act); (2) if the
sale is effected in


                                      -40-
<PAGE>


connection with a secondary distribution of securities,  the compensation cannot
exceed  2% of the sale  price;  and (3) the  compensation  for  sales  otherwise
effected  cannot  exceed 1% of the sales price.  Rule 17e-1 defines a "usual and
customary  broker's  commission"  as one that is fair compared to the commission
received by other brokers in connection with comparable  transactions  involving
similar  securities  being  purchased or sold on an exchange during a comparable
period of time.  Morgan  Stanley Dean Witter will serve as the  Company's  prime
broker.

                                FEES AND EXPENSES

     CIBC WM  provides  certain  administration  and  investor  services  to the
Company, including, among other things, providing office space and other support
services to the  Company,  screening  potential  investors,  preparing  investor
communications,  maintaining  and  preserving  certain  records of the  Company,
preparing  and  filing  various  materials  with state and  Federal  regulators,
providing  legal  and  regulatory  advice  in  connection  with   administrative
functions and reviewing and arranging for payment of the Company's expenses.  In
consideration  for these  services,  the  Company  pays CIBC WM a monthly fee of
0.08333% (1% on an  annualized  basis) of the Company's net assets (the "CIBC WM
Fee").  Net assets means the total value of all assets of the  Company,  less an
amount equal to all accrued debts,  liabilities  and obligations of the Company.
The CIBC WM Fee is  computed  based on the net  assets of the  Company as of the
start of business on the first business day of each month,  after adjustment for
any  subscriptions  effective  on that date,  and is due and  payable in arrears
within  five  business  days  after  the end of that  month.  The CIBC WM Fee is
charged in each fiscal period to the capital accounts of all Members (except the
Special  Advisory  Account  (defined below)) in proportion to the value of their
capital  accounts at the beginning of that fiscal period.  A portion of the CIBC
WM Fee is paid by CIBC WM to CWH for  services  provided by CWH  pursuant to the
terms of a Sub-Administration Agreement.

     PFPC  Inc.  ("PFPC")  provides  administration,   accounting  and  investor
services to the Company,  which are in addition to the services provided by CIBC
WM to the Company, as described above. In consideration for these services,  the
Company pays PFPC a fee (the "PFPC Fee") that is not anticipated to exceed 0.35%
(annualized)  of  the  Company's  net  assets,  plus  reimbursement  of  certain
out-of-pocket expenses.

     In addition,  the capital  accounts of Members (except the Special Advisory
Account  (defined  below)) may be subject to an Incentive  Allocation  depending
upon the  investment  performance  of the Company.  (See  "Capital  Accounts And
Allocations - Incentive Allocation.")

     The Company  bears all expenses  incurred in its  business and  operations,
other than those specifically required to be borne by CIBC WM. Expenses borne by
the Company  include,  but are not limited  to, the  following:

     --   all costs and expenses directly related to portfolio  transactions and
          positions for the Company's  account,  including,  but not limited to,
          brokerage commissions,  research fees, interest and commitment fees on
          loans and debit balances,  borrowing charges on securities sold short,
          dividends on securities


                                      -41-
<PAGE>


          sold but not yet  purchased,  custodial  fees,  margin fees,  transfer
          taxes and premiums,  taxes withheld on foreign  dividends and indirect
          expenses from investments in investment funds;

     --   all  costs  and  expenses   associated  with  the   organization   and
          registration of the Company,  certain  offering costs and the costs of
          compliance with any applicable Federal or state laws;

     --   attorneys'  fees  and  disbursements   associated  with  updating  the
          Company's  Confidential  Memorandum  and  subscription  documents (the
          "Offering  Materials");  the costs of printing the Offering Materials;
          the  costs of  distributing  the  Offering  Materials  to  prospective
          investors;  and attorneys' fees and disbursements  associated with the
          review of subscription documents executed and delivered to the Company
          in connection with offerings of Interests;

     --   the costs and  expenses  of holding  meetings of the Board of Managers
          and any meetings of Members;

     --   fees and  disbursements  of any attorneys,  accountants,  auditors and
          other consultants and professionals  engaged on behalf of the Company;
          however,  in the event that consultants and professionals are retained
          for the benefit of the Company and one or more other accounts  managed
          by the  Adviser  or CWH,  such fees will be  allocated  among all such
          accounts based on relative net assets;

     --   the CIBC WM Fee and the fees of custodians  and persons (such as PFPC)
          providing administrative services to the Company;

     --   the costs of a fidelity bond and any liability  insurance  obtained on
          behalf of the Company or the Board of Managers;

     --   all expenses of computing the Company's net asset value, including any
          equipment or services obtained for these purposes;

     --   all  charges  for   equipment  or  services   used  in   communicating
          information regarding the Company's transactions among the Adviser and
          any custodian or other agent engaged by the Company; and

     --   such other types of  expenses as may be approved  from time to time by
          the Board of Managers.

     --   The  Adviser  will be  reimbursed  by the Company for any of the above
          expenses that it pays on behalf of the Company.

     --   The Company's  organizational  expenses are estimated at $175,000, and
          the Company will also bear certain  expenses,  not to exceed $100,000,
          associated


                                      -42-
<PAGE>


          with the initial offering of Interests.  Before a recent change to the
          guidelines  followed by the American  Institute  of  Certified  Public
          Accountants  applicable  to the Company,  the Company  would have been
          able to amortize the  organizational  expenses over a 60 month period.
          Because of that change,  however, the organizational expenses now must
          be  expensed  as  incurred.  In  order  to  achieve  a more  equitable
          distribution of the impact of those expenses among Members,  an amount
          equal to the  organizational  expenses incurred by the Company will be
          allocated  among  and  credited  to or  debited  against  the  capital
          accounts (described below) of all Members based on the percentage that
          a  Member's  contributed  capital  to the  Company  bears to the total
          capital  contributed  to the Company by all Members as of the relevant
          allocation date. An initial allocation of organizational costs will be
          made as of the first date on which  capital  contributions  of Members
          are made.  These  allocations  will  thereafter be adjusted as of each
          date,  through and  including  December 1, 2000,  on which  additional
          capital is  contributed  to the  Company by  Members.  Offering  costs
          cannot be deducted by the Company or Members.

                        CAPITAL ACCOUNTS AND ALLOCATIONS

Capital Accounts

     The Company maintains a separate capital account for each Member (including
the Adviser in respect of the Adviser's capital  contribution to the Company, as
a  Member),  which  has  an  opening  balance  equal  to  the  Member's  initial
contribution  to the capital of the Company.  Each Member's  capital  account is
increased  by the sum of the  amount  of cash and the  value  of any  securities
constituting  additional  contributions  by the  Member  to the  capital  of the
Company,  plus any amounts credited to the Member's capital account as described
above with respect to organization  expenses or as described  below.  Similarly,
each  Member's  capital  account  is  reduced  by the sum of the  amount  of any
repurchase by the Company of the interest,  or portion  thereof,  of the Member,
plus the amount of any  distributions  to the Member  which are not  reinvested,
plus any amounts debited against the Member's capital account as described above
with respect to organization expenses or as described below.

     Capital accounts of Members are adjusted as of the close of business on the
last day of each fiscal  period.  Fiscal periods begin on the day after the last
day of the  preceding  fiscal period and end at the close of business on (1) the
last  day of the  fiscal  year,  (2)  the  day  preceding  any  day on  which  a
contribution  to the  capital of the  Company is made,  (3) any day on which the
Company repurchases any Interest or portion of an Interest of any Member, or (4)
any day on which any amount is credited to or debited  from the capital  account
of any Member other than an amount to be credited to or debited from the capital
accounts  of  all  Members  in  accordance  with  their  respective   investment
percentages.  An investment  percentage is determined  for each Member as of the
start of each fiscal  period by dividing  the  balance of the  Member's  capital
account as of the  commencement  of the period by the sum of the balances of all
capital accounts of all Members as of that date.

     The Company  maintains a "Special  Advisory Account" for the Adviser solely
for the purpose of receiving the Incentive Allocation, as described below.


                                      -43-
<PAGE>


Allocation of Net Profits and Net Losses

     Net  profits  or net  losses of the  Company  for each  fiscal  period  are
allocated among and credited to or debited  against the capital  accounts of all
Members (but not the Special Advisory  Account) as of the last day of the fiscal
period in accordance  with Members'  respective  investment  percentages for the
fiscal  period.  Net profits or net losses are measured as the net change in the
value of the net assets of the Company  (including  any net change in unrealized
appreciation  or  depreciation  of investments  and realized income and gains or
losses and expenses (including organizational expenses) during a fiscal period),
before giving effect to any  repurchases by the Company of Interests or portions
thereof, and excluding the amount of any items to be allocated among the capital
accounts of the Members  other than in accordance  with the Members'  respective
investment percentages.

     Allocations  for Federal  income tax purposes  generally will be made among
the Members so as to reflect  equitably amounts credited to or debited from each
Member's  capital  account  for the current and prior  fiscal  years.  (See "Tax
Aspects - Allocation of Profits and Losses.")

Incentive Allocation

     So long as the Adviser serves as the investment adviser of the Company, the
Adviser is entitled to be the Special  Advisory  Member of the Company.  In such
capacity,  the  Adviser is  entitled  to receive an  incentive  allocation  (the
"Incentive Allocation"), charged to the capital account of each Member as of the
last  day of  each  "allocation  period,"  of 20% of the  amount  by  which  any
"allocated  gain" during an "allocation  period" exceeds the positive balance in
the Member's "loss recovery account." The Incentive  Allocation will be credited
to the Special Advisory Account of the Adviser.

     For purposes of  calculating  the Incentive  Allocation,  "allocated  gain"
means the excess of the balance of a Member's  capital  account at the end of an
"allocation period" (after giving effect to allocations other than the Incentive
Allocation,  but before giving effect to repurchases of Interests by the Company
or debits to the  Member's  capital  account to reflect any item not  chargeable
ratably to all Members), over the balance of the Member's capital account at the
start of the "allocation period."  Consequently,  any Incentive Allocation to be
credited to the Adviser  will be increased by a portion of the amount of any net
unrealized appreciation, as well as net realized gains, allocable to a Member.

     An Incentive  Allocation  is charged  only with  respect to any  "allocated
gain" in excess of the positive balance of a "loss recovery account"  maintained
for each Member. A "loss recovery account" is a memorandum account maintained by
the Company  for each  Member,  which has an initial  balance of zero and is (1)
increased  after  the close of each  "allocation  period"  by the  amount of any
negative  performance  for the Member  during the  "allocation  period," and (2)
decreased  (but not below zero) after the close of each  "allocation  period" by
the amount of any allocated gain for the Member during the "allocation  period."
Any positive  balance in a Member's "loss recovery  account" would be reduced as
the result of a  repurchase  or certain  transfers  with respect to the Member's
Interest  in  proportion  to the  reduction  of  the  Member's  capital  account
attributable to the repurchase or transfer.


                                      -44-
<PAGE>


     An  "allocation  period" as to each  Member is a period  commencing  on the
admission of the Member to the Company, and thereafter each period commencing as
of the day  following  the  last day of the  preceding  allocation  period  with
respect to such  Member,  and ending as of the close of business on the first to
occur of (1) the last day of a  fiscal  year of the  Company,  (2) the day as of
which the Company  repurchases the entire Interest of the Member, (3) the day as
of which the Company  admits as a substitute  Member a person to whom the entire
Interest  of the  Member  has been  transferred  or (4) the day as of which  the
Investment  Advisory  Agreement  terminates.  The  measurement  of any Incentive
Allocation  for an  "allocation  period"  must take into  account  any  negative
performance from a prior allocation  period to the extent reflected in the "loss
recovery account." Therefore, the Incentive Allocation for any allocation period
after the initial  allocation  period in effect is a reflection of the extent to
which cumulative  performance  achieved with respect to a Member's account since
the Member's  admission  to the Company  exceeds the highest  previous  level of
performance achieved through the close of any prior allocation period.

     By the  last  business  day of the  month  following  the  date on which an
Incentive  Allocation  is  made,  the  Adviser  may  withdraw  up to 100% of the
Incentive Allocation (computed on the basis of unaudited data) that was credited
to the Special  Advisory  Account and debited from the Member's  capital account
with respect to the  allocation  period.  Within 30 days after the completion of
the audit of the  Company's  books,  the  Company  will pay to the  Adviser  any
additional amount determined to be owed to the Adviser based upon the audit, and
the Adviser will pay to the Company any excess  amount  determined to be owed to
the Company.

Allocation of Special Items - Certain Withholding Taxes and Other Expenditures

     Withholding  taxes or other tax  obligations  incurred by the Company which
are  attributable  to any Member will be debited  against the capital account of
that Member as of the close of the fiscal  period  during which the Company paid
those  obligations,  and any amounts  then or  thereafter  distributable  to the
Member  will be  reduced by the  amount of those  taxes.  If the amount of those
taxes is  greater  than the  distributable  amounts,  then  the  Member  and any
successor  to the  Member's  Interest  is  required  to pay upon  demand  to the
Company,  as a  contribution  to the capital of the  Company,  the amount of the
excess.  The Company is not  obligated  to apply for or obtain a reduction of or
exemption from  withholding  tax on behalf of any Member,  although in the event
that the  Company  determines  that a Member  is  eligible  for a refund  of any
withholding  tax, it may, at the request and expense of that Member,  assist the
Member in applying for a refund.

     Generally,  any expenditures  payable by the Company, to the extent paid or
withheld on behalf of, or by reason of particular  circumstances  applicable to,
one or more,  but fewer than all of the  Members,  will be charged to only those
Members on whose behalf the payments are made or whose particular  circumstances
gave  rise to the  payments.  These  charges  shall be  debited  to the  capital
accounts of the  applicable  Members as of the close of the fiscal period during
which the items were paid or accrued by the Company.

Reserves


                                      -45-
<PAGE>


     Appropriate reserves may be created, accrued and charged against net assets
and  proportionately  against the capital accounts of the Members for contingent
liabilities  as of the  date  the  contingent  liabilities  become  known to the
Company.  Reserves  will be in such amounts  (subject to increase or  reduction)
which the Company may deem necessary or  appropriate.  The amount of any reserve
(or any  increase  or  decrease  therein)  will be  proportionately  charged  or
credited,  as  appropriate,  to the capital  accounts of those investors who are
Members at the time when the reserve is created,  increased or decreased, as the
case may be; provided, however, that if the reserve (or any increase or decrease
therein)  exceeds  the lesser of $500,000  or 1% of the  aggregate  value of the
capital accounts of all those Members, the amount of the reserve,  increase,  or
decrease  shall  instead be  charged or  credited  to those  investors  who were
Members at the time, as determined by the Company, of the act or omission giving
rise  to the  contingent  liability  for  which  the  reserve  was  established,
increased or decreased in proportion to their capital accounts at that time.

Net Asset Valuation

     The value of the net assets of the Company is determined as of the close of
business at the end of any fiscal period in accordance  with the  procedures set
forth below or in accordance with such other procedures as may be established by
the Board of Managers in the future.

     Domestic  exchange traded and NASDAQ listed equity  securities  (other than
options) will be valued at their last  composite  sale prices as reported on the
exchanges where those securities are traded. If no sales of those securities are
reported on a  particular  day, the  securities  will be valued based upon their
composite bid prices for securities  held long, or their  composite asked prices
for securities held short, as reported by those exchanges.  Securities traded on
a foreign  securities  exchange  will be valued at their last sale prices on the
exchange  where the  securities  are  primarily  traded,  or in the absence of a
reported  sale on a  particular  day,  at  their  bid  prices  (in  the  case of
securities  held long) or asked prices (in the case of securities held short) as
reported by that exchange. Listed options will be valued at their bid prices (or
asked  prices in the case of listed  options  held  short)  as  reported  by the
exchange  with the highest  volume on the last day a trade was  reported.  Other
securities for which market  quotations are readily  available will be valued at
their bid  prices  (or asked  prices in the case of  securities  held  short) as
obtained from one or more dealers making markets for those securities. If market
quotations are not readily available, securities and other assets will be valued
at fair value in accordance with  procedures  adopted in good faith by the Board
of Managers.

     Debt securities will be valued in accordance with the procedures  described
above,  which with respect to these securities may include the use of valuations
furnished by a pricing  service which  employs a matrix to determine  valuations
for  normal  institutional  size  trading  units.  The  Board of  Managers  will
periodically  monitor the  reasonableness of valuations  provided by the pricing
service.  Debt  securities  with  remaining  maturities of 60 days or less will,
absent  unusual  circumstances,  be valued at  amortized  cost,  so long as this
method of valuation  is  determined  by the Board of Managers to represent  fair
value.

     If, in the view of the Adviser,  the bid price of a listed option (or asked
price in the case of any such security  held short) does not fairly  reflect the
market  value of the  security,  the


                                      -46-
<PAGE>


Adviser may request a valuation  committee  comprised of two Managers to instead
adopt procedures to value the security at fair value. In any such situation, the
valuation committee will consider the recommendation of the Adviser,  and, if it
determines in good faith that an override of the value  assigned to the security
under the procedures described above is warranted, will adopt procedures in good
faith for purposes of determining the fair value of the security.

     All assets and liabilities  initially  expressed in foreign currencies will
be converted  into U.S.  dollars  using  foreign  exchange  rates  provided by a
pricing  service  compiled  as of 4:00 p.m.  London  time.  Trading  in  foreign
securities  generally is  completed,  and the values of foreign  securities  are
determined,  prior  to the  close of  securities  markets  in the  U.S.  Foreign
exchange rates are also determined prior to such close. On occasion,  the values
of foreign  securities  and exchange  rates may be affected by events  occurring
between the time as of which  determination of values or exchange rates are made
and the time as of which the net asset value of the Company is determined.  When
an event materially  affects the values of securities held by the Company or its
liabilities,  such  securities  and  liabilities  may be valued at fair value in
accordance with procedures adopted in good faith by the Board of Managers.

     Prospective   investors   should  be  aware   that   situations   involving
uncertainties  as to the valuation of portfolio  positions could have an adverse
effect  on the  Company's  net  assets  if  the  Managers'  judgments  regarding
appropriate valuations should prove incorrect.

                           SUBSCRIPTION FOR INTERESTS

Subscription Terms

     For the first twelve months from the date the Company commences operations,
the Board of  Managers  may accept  initial  and  additional  subscriptions  for
Interests as of the first day of each month.  Thereafter,  the Board of Managers
may accept  initial  and  additional  subscriptions  for  Interests  by eligible
investors at such times as may be determined  by the Board of Managers,  but not
more  frequently than as of the first day of each calendar  quarter,  unless the
Board of  Managers  has  received a letter  from  counsel  stating  that,  under
applicable banking laws, the Board of Managers may accept initial and additional
subscriptions   from  eligible   investors  on  a  more  frequent   basis.   All
subscriptions  are  subject to the  receipt  of  cleared  funds on or before the
acceptance  date in the full  amount of the  subscription,  plus the  applicable
sales charge,  if any. (See  "Subscription  for Interests - Sales  Charge.") The
investor  must  also  submit  a  completed   subscription  document  before  the
acceptance  date.  The  Board of  Managers  reserves  the  right to  reject  any
subscription  for Interests.  The Board of Managers may, in its sole discretion,
suspend  subscriptions for Interests at any time. The minimum initial investment
in the Company is $150,000 and the minimum additional  investment in the Company
is $25,000,  subject to the sole  discretion  of the Board of Managers to accept
initial and additional investments in lesser amounts. In connection with initial
and additional  investments,  an investor's account executive may impose a sales
charge of up to 3% of the amount transmitted for such investments.  Amounts paid
as sales  charges,  if any, are included  for  purposes of  determining  whether
applicable  minimum  investment  requirements have been satisfied.  The Board of
Managers  has  authorized  the  Company  to  accept  initial  subscriptions  for
Interests from eligible  investors who are directors,  officers or employees (or
members of their  families)  of CIBC WM, CWH or their  affiliates  in amounts of
$50,000 or more.  Interests may not be purchased by nonresident aliens,


                                      -47-
<PAGE>


foreign corporations,  foreign partnerships,  foreign trusts or foreign estates,
all as defined in the Internal Revenue Code of 1986, as amended (the "Code"). In
addition,  because the Company may generate  "unrelated business taxable income"
("UBTI"), charitable remainder trusts may not want to purchase Interests because
a charitable  remainder  trust will not be exempt from Federal  income tax under
Section 664(c) of the Code for any year in which it has UBTI.

     Except as otherwise  permitted  by the Board of  Managers,  initial and any
additional contributions to the capital of the Company by any Member are payable
in cash, and all contributions must be transmitted by the time and in the manner
that is specified in the subscription documents of the Company.  Initial and any
additional  contributions  to the  capital  of the  Company  are  payable in one
installment  and are due at least  three  business  days  prior to the  proposed
acceptance date of the contribution,  although the Board of Managers may accept,
in its sole discretion, a subscription prior to receipt of cleared funds.

     Each new Member will be  obligated to agree to be bound by all of the terms
of the  Limited  Liability  Company  Agreement  of  the  Company  (the  "Company
Agreement").  Each  potential  investor  will also be obligated to represent and
warrant in a subscription  agreement,  among other things,  that the investor is
purchasing  an  Interest  for  its  own  account,  and  not  with a view  to the
distribution, assignment, transfer or other disposition of the Interest.

     If and when the Board of  Managers  determines  to accept  securities  as a
contribution to the capital of the Company,  the Company will charge each Member
making a  contribution  of  securities  an  amount  determined  by the  Board of
Managers  and not  exceeding  2% of the  value of the  contribution  in order to
reimburse the Company for any costs it incurs in  liquidating  and accepting the
securities.  This charge will be due and payable by the  contributing  Member in
full at the time of the  contribution to the capital of the Company to which the
charge relates.

Eligible Investors

     Each  prospective  investor  will be required to certify  that the Interest
subscribed  for is being  acquired  directly or indirectly for the account of an
"accredited  investor"  as defined in  Regulation D under the 1933 Act, and that
the investor (as well as each of the investor's  beneficial owners under certain
circumstances)  has a net worth immediately prior to the time of subscription of
at least $1.5 million or such greater  amounts as may be required by  applicable
law or by the Board of Managers,  in its sole  discretion.  Existing Members who
subscribe  for  additional  Interests  will be  required  to meet the  foregoing
eligibility  criteria at the time of the additional  subscription.  The relevant
investor  qualifications will be set forth in a subscription agreement that must
be completed by each prospective investor.

Sales Charge

     In  connection  with  initial and  additional  purchases of  Interests,  an
investor's account executive may charge the investor a sales commission of up to
3% of the  amount  transmitted  for  such  purchase  (up to 3.1%  of the  amount
invested), in the sole discretion of the account executive.


                                      -48-
<PAGE>


                           REDEMPTIONS, REPURCHASES OF
                             INTERESTS AND TRANSFERS

No Right of Redemption

     No Member or other  person  holding an Interest or a portion of an Interest
acquired  from a Member has the right to  require  the  Company  to redeem  that
Interest or portion thereof.  There is no public market for Interests,  and none
is expected to develop.  Consequently,  investors  may not be able to  liquidate
their  investment  other than as a result of  repurchases  of  Interests  by the
Company,  as described below.  (The Adviser will have certain rights to withdraw
amounts from its Special Advisory Account.)

Repurchases of Interests

     The  Board  of  Managers,  from  time to time and in sole  discretion,  may
determine to cause the Company to repurchase  Interests or portions thereof from
Members (other than the Adviser in its capacity as the Special  Advisory Member)
pursuant to written  tenders by Members on such terms and  conditions  as it may
determine.  In determining  whether the Company should  repurchase  Interests or
portions thereof from Members pursuant to written tenders, the Board of Managers
will consider the  recommendation  of the Adviser.  The Adviser  expects that it
will  recommend to the Board of Managers  that the Company  offer to  repurchase
Interests from Members at the end of 2000. Thereafter,  the Adviser expects that
generally it will  recommend to the Board of Managers  that the Company offer to
repurchase  Interests  from Members twice in each year,  effective at the end of
the  second  fiscal  quarter  and  again at the end of the  year.  The  Board of
Managers will also consider the following  factors,  among others, in making its
determination:

     --   whether any Members  have  requested  to tender  Interests or portions
          thereof to the Company;

     --   the liquidity of the Company's assets;

     --   the investment plans and working capital requirements of the Company;

     --   the  relative  economies  of  scale  with  respect  to the size of the
          Company;

     --   the  history of the  Company in  repurchasing  Interests  or  portions
          thereof;

     --   the  economic  condition  of  the  securities   markets;   and

     --   the  anticipated  tax  consequences  of any  proposed  repurchases  of
          Interests or portions thereof.

     The Company  will  repurchase  Interests  or portions  thereof from Members
pursuant to written  tenders on terms and conditions  that the Board of Managers
determines  to be fair to the  Company  and to all  Members or  persons  holding
Interests  acquired  from  Members,  or to one or more  classes of  Members,  as
applicable.  When the  Board of  Managers  determines  that  the  Company  shall
repurchase  Interests  or portions  thereof,  notice will be provided to Members


                                      -49-
<PAGE>


describing the terms thereof,  containing information Members should consider in
deciding  whether to participate in the  repurchase  opportunity  and containing
information on how to  participate.  Members who are deciding  whether to tender
their Interests or portions thereof during the period that a repurchase offer is
open may ascertain the net asset value of their  Interests  from PFPC during the
period.

     The Company  Agreement  provides that the Company shall be dissolved if the
Interest of any Member that has submitted a written request to tender its entire
Interest for repurchase by the Company has not been repurchased  within a period
of two years of such request.

     Repurchases  of Interests  or portions  thereof from Members by the Company
may be made, in the  discretion of the Company,  in part or in whole for cash or
for securities of equivalent  value and shall be effective  after receipt by the
Company of all eligible  written  tenders of Interests or portions  thereof from
Members.  The amount  due to any Member  whose  Interest  or portion  thereof is
repurchased  shall be equal to the  value of the  Member's  capital  account  or
portion  thereof based on the net asset value of the Company's  assets as of the
effective date of repurchase,  after giving effect to all allocations to be made
to the Member's  capital account as of that date.  Payment of the purchase price
pursuant to a tender of Interests will consist of, first, cash and/or marketable
securities  traded on an established  securities  exchange  (valued at net asset
value in  accordance  with the Company  Agreement and  distributed  to tendering
Members on a pari passu basis) in an  aggregate  amount equal to at least 95% of
the estimated unaudited net asset value of the Interests tendered, determined as
of the expiration date of the tender offer (the "expiration  date").  Payment of
this amount will be made promptly after the expiration date (the "cash payment")
in accordance with the terms of the written offer from the Company to repurchase
Interests.  Generally,  payment  pursuant  to a tender  will also  consist  of a
promissory  note (the "note")  that is not expected to bear  interest and is not
transferable,  entitling the holder thereof to a contingent payment equal to the
excess,  if any, of (a) the net asset value of the Interests  tendered as of the
expiration  date,  determined based on the audited  financial  statements of the
Company, over (b) the cash payment. The note would be delivered to the tendering
Member  promptly after the expiration date and would be payable in cash promptly
after completion of the annual audit of the financial statements of the Company.
The audit of the Company's financial statements will be completed within 60 days
after the end of each  year.  The  Company  does not  impose  any  charges  on a
repurchase of Interests or portion of Interests.

     The Company intends to maintain daily a segregated  account on its books or
with its custodian consisting of cash or liquid securities in an amount equal to
the  aggregate  estimated  dollar amount of the notes.  Payment for  repurchased
Interests may require the Company to liquidate  portfolio  holdings earlier than
the Adviser would otherwise liquidate these holdings,  potentially  resulting in
losses, and may increase the Company's portfolio  turnover.  The Adviser intends
to take measures (subject to such policies as may be established by the Board of
Managers)  to  attempt  to avoid  or  minimize  potential  losses  and  turnover
resulting from the repurchase of Interests.

     A Member  who  tenders  for  repurchase  only a  portion  of such  Member's
Interest  shall be required to maintain a capital  account  balance equal to the
greater of: (i) $150,000, net of the amount of the Incentive Allocation, if any,
that is to be debited from the capital account


                                      -50-
<PAGE>


of the Member and credited to the Special Advisory Member Account of the Adviser
on the date of  expiration  of the  tender  offer or would be so debited if such
date of  expiration  were a day on which an Incentive  Allocation  was made (the
"Tentative Incentive Allocation"); or (ii) the amount of the Tentative Incentive
Allocation,  if any. If a Member tenders an amount that would cause the Member's
capital account balance to fall below the required minimum, the Company reserves
the right to reduce  the  amount to be  purchased  from such  Member so that the
required minimum balance is maintained.

     The Company may  repurchase  an Interest or portion  thereof of a Member or
any person  acquiring an Interest or portion thereof from or through a Member in
the event that:

     --   the Interest or a portion thereof has been transferred or the Interest
          or a portion  thereof has vested in any person by  operation of law as
          the result of the death, dissolution,  bankruptcy or incompetency of a
          Member;

     --   ownership  of the  Interest by a Member or other person will cause the
          Company to be in violation of, or require registration of any Interest
          or portion  thereof  under,  or  subject  the  Company  to  additional
          registration or regulation under, the securities, commodities or other
          laws of the United States or any other relevant jurisdiction;

     --   continued ownership of the Interest may be harmful or injurious to the
          business or  reputation  of the Company,  the Board of Managers or the
          Adviser, or may subject the Company or any Members to an undue risk of
          adverse tax or other fiscal consequences;

     --   any  of  the  representations  and  warranties  made  by a  Member  in
          connection  with the acquisition of an Interest or portion thereof was
          not true when made or has ceased to be true; or

     --   it would be in the best  interests  of the  Company for the Company to
          repurchase the Interest or a portion thereof.

     In the event that the Adviser holds any Interests in its capital account in
its capacity as a Member, such Interest or a portion thereof may be tendered for
repurchase  in connection  with any  repurchase  offer made by the Company.  The
Adviser is also  entitled to withdraw its  interests  from its Special  Advisory
Account  at the times  described  under  "Capital  Accounts  And  Allocations  -
Incentive Allocation."

Transfers of Interests

     Except as otherwise  described  below, no person shall become a substituted
Member without the written  consent of the Board of Managers,  which consent may
be withheld for any reason in its sole discretion. Interests held by Members may
be  transferred  only (i) by operation  of law  pursuant to the death,  divorce,
bankruptcy,  insolvency or dissolution of a Member or (ii) under certain limited
circumstances,  with the written  consent of the Board of Managers (which may be
withheld in its sole  discretion and is expected to be granted,  if at all,


                                      -51-
<PAGE>


only under extenuating circumstances).  The Board of Managers generally will not
consent  to a  transfer  unless  the  following  conditions  are  met:  (i)  the
transferring Member has been a Member for at least six months; (ii) the proposed
transfer  is to be made on the  effective  date of an  offer by the  Company  to
repurchase  Interests;  and (iii) the transfer  does not  constitute a change in
beneficial  ownership.  Notice to the  Company  of any  proposed  transfer  must
include  evidence  satisfactory  to the  Board of  Managers  that  the  proposed
transfer  is exempt  from  registration  under the 1933 Act,  that the  proposed
transferee  meets any  requirements  imposed  by the  Company  with  respect  to
investor  eligibility  and  suitability,  including  the  requirement  that  any
investor (or investor's  beneficial owners in certain  circumstances)  has a net
worth  immediately prior to the time of subscription of at least $1.5 million or
such  greater  amounts as may be required by  applicable  law or by the Board of
Managers,  in its  sole  discretion,  and  must  be  accompanied  by a  properly
completed  subscription  agreement.  The Board of Managers  may not consent to a
transfer  of an  Interest  by a  Member  unless  such  transfer  is to a  single
transferee  or after the transfer of a portion of the  Interest,  the balance of
the capital  account of each of the  transferee  and transferor is not less than
$150,000.

     Any transferee  that acquires an Interest or portion thereof in the Company
by operation of law as the result of the death, divorce, dissolution, bankruptcy
or incompetency  of a Member or otherwise,  shall be entitled to the allocations
and  distributions  allocable  to the  Interest so  acquired,  to  transfer  the
Interest in accordance with the terms of the Company Agreement and to tender the
Interest for  repurchase by the Company,  but shall not be entitled to the other
rights of a Member unless and until the transferee  becomes a substituted Member
as provided in the Company Agreement.

     If a Member  transfers an Interest or portion  thereof with the approval of
the Board of Managers,  the Company shall promptly take all necessary actions so
that each  transferee  or successor  to whom the Interest or portion  thereof is
transferred  is admitted to the Company as a Member.  Each Member and transferee
may be charged for all expenses,  including  attorneys' and  accountants'  fees,
incurred by the Company in connection with the transfer.

     By  subscribing  for an Interest,  each Member agrees to indemnify and hold
harmless the Company, the Board of Managers,  the Adviser, each other Member and
any affiliate of the foregoing against all losses, claims, damages, liabilities,
costs and expenses  (including legal or other expenses incurred in investigating
or  defending  against  any  losses,  claims,  damages,  liabilities,  costs and
expenses or any  judgments,  fines and  amounts  paid in  settlement),  joint or
several,  to which such persons may become  subject by reason of or arising from
any  transfer  made by that  Member  in  violation  of these  provisions  or any
misrepresentation made by that Member in connection with any such transfer.

     The Adviser may not transfer its interest as the Special Advisory Member.

                                   TAX ASPECTS

     The following is a summary of certain aspects of the income taxation of the
Company and its Members which should be considered by a prospective  Member. The
Company  has not  sought  a  ruling  from  the  Internal  Revenue  Service  (the
"Service")  or any other  Federal,  state or local agency with respect to any of
the tax issues affecting the Company,  nor has


                                      -52-
<PAGE>


it obtained an opinion of counsel  with  respect to any Federal tax issues other
than the characterization of the Company as a partnership for Federal income tax
purposes.

     This summary of certain  aspects of the Federal income tax treatment of the
Company  is based  upon the  Internal  Revenue  Code of 1986,  as  amended  (the
"Code"),  judicial  decisions,  Treasury  Regulations  (the  "Regulations")  and
rulings in  existence  on the date  hereof,  all of which are subject to change.
This summary  does not discuss the impact of the various  proposals to amend the
Code which could change certain of the tax  consequences of an investment in the
Company. This summary also does not discuss all of the tax consequences that may
be relevant to a particular  investor or to certain investors subject to special
treatment under the Federal income tax laws, such as insurance companies.

     EACH  PROSPECTIVE  MEMBER SHOULD  CONSULT WITH ITS OWN TAX ADVISER IN ORDER
FULLY  TO  UNDERSTAND  THE  FEDERAL,   STATE,   LOCAL  AND  FOREIGN  INCOME  TAX
CONSEQUENCES OF AN INVESTMENT IN THE COMPANY.

     In addition to the particular matters set forth in this section, tax-exempt
organizations should review carefully those sections of the Memorandum regarding
liquidity  and other  financial  matters to  ascertain  whether  the  investment
objectives of the Company are consistent  with their overall  investment  plans.
Each prospective tax-exempt Member is urged to consult its own counsel regarding
the acquisition of Interests.

     Tax Treatment of Company Operations

     Classification  of the  Company.  The  Company  will  receive an opinion of
Schulte Roth & Zabel LLP,  counsel to the Company,  that under the provisions of
the Code and the Regulations,  as in effect on the date of the opinion,  as well
as under the relevant authority  interpreting the Code and the Regulations,  and
based upon certain representations made to Schulte Roth & Zabel LLP, the Company
will be treated as a partnership  for Federal  income tax purposes and not as an
association taxable as a corporation.

     Under  Section  7704  of  the  Code,  "publicly  traded  partnerships"  are
generally  treated as corporations  for Federal income tax purposes.  A publicly
traded  partnership is any  partnership  the interests in which are traded on an
established  securities  market or which are  readily  tradable  on a  secondary
market (or the substantial equivalent thereof).  Interests will not be traded on
an established  securities market.  Regulations concerning the classification of
partnerships as publicly traded  partnerships  (the "Section 7704  Regulations")
provide certain safe harbors under which interests in a partnership  will not be
considered readily tradable on a secondary market (or the substantial equivalent
thereof).  The  Company may not be eligible  for any of those safe  harbors.  In
particular,  it will not  qualify  under the private  placement  safe harbor set
forth in the Section 7704 Regulations if the Company has more than 100 Members.

     The Section  7704  Regulations  specifically  provide  that the fact that a
partnership does not qualify for the safe harbors is disregarded for purposes of
determining  whether  interests  in a  partnership  are  readily  tradable  on a
secondary market (or the substantial equivalent thereof).  Rather, in this event
the  partnership's  status is examined  under a general facts and  circumstances
test set forth in the Section  7704  Regulations.  Schulte Roth & Zabel LLP also
will render its


                                      -53-
<PAGE>


opinion  that,  under this "facts and  circumstances"  test,  and based upon the
anticipated  operations  of the  Company as well as the  legislative  history to
Section   7704,   the  text  of  the  Section  7704   Regulations   and  certain
representations  made to Schulte  Roth & Zabel LLP,  the  Interests  will not be
readily tradable on a secondary market (or the substantial  equivalent  thereof)
and,  therefore,  that the  Company  will not be treated  as a  publicly  traded
partnership taxable as a corporation.

     Neither of the opinions of counsel described above,  however, is binding on
the  Service or the courts.  If it were  determined  that the Company  should be
treated  as  an  association  or a  publicly  traded  partnership  taxable  as a
corporation  for  Federal  income  tax  purposes  (as a result  of a  successful
challenge to such opinions by the Service,  changes in the Code, the Regulations
or judicial  interpretations  thereof,  a material  adverse change in facts,  or
otherwise),  the  taxable  income of the Company  would be subject to  corporate
income tax when recognized by the Company;  distributions of such income,  other
than in certain  redemptions of Interests,  would be treated as dividend  income
when  received  by the  Members  to the  extent of the  current  or  accumulated
earnings and profits of the Company; and Members would not be entitled to report
profits or losses realized by the Company.

     As an entity taxed as a  partnership,  the Company is not itself subject to
Federal income tax. The Company files an annual  partnership  information return
with the  Service  which  reports  the  results of  operations.  Each  Member is
required to report separately on its income tax return its distributive share of
the Company's net long-term capital gain or loss, net short-term capital gain or
loss and all other items of ordinary income or loss. Each Member is taxed on its
distributive  share of the  Company's  taxable  income  and gain  regardless  of
whether it has received or will receive a distribution from the Company.

     Recently enacted legislation  generally allows certain partnerships such as
the  Company  with 100 or more  partners to elect to have a special set of rules
and procedures apply that are intended to simplify the calculation and reporting
of certain partnership items, and the handling of partnership audits.  Among the
items that would be affected by the  election are the  calculation  of long-term
capital  gains and the tax  treatment of expenses,  if any,  that are treated as
itemized  deductions by the partners.  If the Company is eligible,  the Board of
Managers may elect to have such rules and procedures  apply to the Company if it
believes  that they may be  beneficial  to a majority of the  Members.  Once the
election is made, it cannot be revoked without the consent of the Service. There
can be no assurance that, if such an election is made, the anticipated  benefits
will be  realized.  Furthermore,  in  certain  cases,  it is  possible  that the
election would have an adverse effect on the Members.

     Allocation  of  Profits  and  Losses.  Under  the  Company  Agreement,  the
Company's  net  capital  appreciation  or  net  capital  depreciation  for  each
accounting  period is allocated among the Members and to their capital  accounts
without  regard  to the  amount of income  or loss  actually  recognized  by the
Company for Federal  income tax purposes.  The Company  Agreement  provides that
items of income,  deduction,  gain,  loss or credit  actually  recognized by the
Company  for each  fiscal  year  generally  are to be  allocated  for income tax
purposes among the Members pursuant to Regulations  issued under Sections 704(b)
and  704(c) of the  Code,  based  upon  amounts  of the  Company's  net  capital
appreciation  or net capital  depreciation  allocated to each  Member's  capital
account for the current and prior fiscal years.


                                      -54-
<PAGE>


     Under the Company  Agreement,  the Board of Managers has the  discretion to
allocate  specially an amount of the Company's capital gain and loss for Federal
income tax purposes to the Special  Advisory Member and to a withdrawing  Member
to the extent that the Member's capital account exceeds, or is less than, as the
case may be, its Federal income tax basis in its partnership interest. There can
be no  assurance  that,  if  the  Board  of  Managers  makes  any  such  special
allocations,  the Service will accept such allocations.  If such allocations are
successfully  challenged by the Service, the Company's gains or losses allocable
to the remaining Members would be affected.

     Tax  Elections;  Returns;  Tax  Audits.  The  Code  provides  for  optional
adjustments  to  the  basis  of  partnership   property  upon  distributions  of
partnership  property  to a  partner  and  transfers  of  partnership  interests
(including by reason of death)  provided  that a  partnership  election has been
made pursuant to Section 754. Under the Company  Agreement,  at the request of a
Member, the Board of Managers, in its sole discretion,  may cause the Company to
make such an election.  Any such election,  once made, cannot be revoked without
the Service's  consent.  As a result of the  complexity and added expense of the
tax  accounting  required to implement  such an election,  the Board of Managers
presently does not intend to make such election.

     The Board of Managers  decides how to report the  partnership  items on the
Company's tax returns,  and all Members are required under the Code to treat the
items  consistently on their own returns,  unless they file a statement with the
Service disclosing the inconsistency. In the event the income tax returns of the
Company are audited by the Service,  the tax treatment of the  Company's  income
and deductions generally is determined at the limited liability company level in
a single proceeding  rather than by individual audits of the Members.  A Member,
designated  as the "Tax Matters  Partner",  has  considerable  authority to make
decisions  affecting the tax treatment and procedural rights of all Members.  In
addition,  the Tax Matters  Partner has the authority to bind certain Members to
settlement  agreements  and the  right on behalf of all  Members  to extend  the
statute of limitations  relating to the Members' tax liabilities with respect to
Company items.

     Tax Consequences to a Withdrawing Member

     A Member receiving a cash  liquidating  distribution  from the Company,  in
connection with a complete withdrawal from the Company, generally will recognize
capital  gain or loss to the  extent  of the  difference  between  the  proceeds
received by such Member and such Member's  adjusted tax basis in its partnership
interest.  Such capital gain or loss will be short-term  or long-term  depending
upon the Member's  holding  period for its interest in the Company.  However,  a
withdrawing  Member will recognize  ordinary  income to the extent such Member's
allocable share of the Company's  "unrealized  receivables" exceeds the Member's
basis  in  such   unrealized   receivables   (as  determined   pursuant  to  the
Regulations).  For these purposes,  accrued but untaxed market discount, if any,
on securities  held by the Company will be treated as an unrealized  receivable,
with respect to which a withdrawing  Member would recognize  ordinary  income. A
Member receiving a cash  nonliquidating  distribution will recognize income in a
similar  manner only to the extent that the amount of the  distribution  exceeds
such Member's adjusted tax basis in its partnership interest.


                                      -55-
<PAGE>


     As  discussed  above,  the  Company  Agreement  provides  that the Board of
Managers  may  specially  allocate  items of Company  capital gain and loss to a
withdrawing  Member to the extent its capital account would otherwise  exceed or
be less than,  as the case may be,  its  adjusted  tax basis in its  partnership
interest. Such a special allocation of gain may result in the withdrawing Member
recognizing  capital gain,  which may include  short-term  gain, in the Member's
last  taxable  year in the  Company,  thereby  reducing  the amount of long-term
capital gain recognized during the tax year in which it receives its liquidating
distribution  upon withdrawal.  Such a special  allocation of loss may result in
the withdrawing  Member  recognizing  capital loss, which may include  long-term
loss,  in the Member's  last taxable year in the Company,  thereby  reducing the
amount of short-term  loss  recognized  during the tax year in which it receives
its liquidating distribution upon withdrawal.

     Distributions  of  Property.  A  partner's  receipt  of a  distribution  of
property from a partnership is generally not taxable. However, under Section 731
of the Code, a  distribution  consisting of marketable  securities  generally is
treated as a distribution of cash (rather than property) unless the distributing
entity  is  an   "investment   partnership"   within  the   meaning  of  Section
731(c)(3)(C)(i) and the recipient is an "eligible partner" within the meaning of
Section  731(c)(3)(C)(iii).  The Company will determine at the appropriate  time
whether it qualifies as an "investment  partnership."  Assuming it so qualifies,
if a Member is an "eligible  partner",  which term should include a Member whose
contributions to the Company  consisted  solely of cash, the  recharacterization
rule described above would not apply.

     Tax Treatment of Company Investments

     In General. The Company expects to act as a trader or investor,  and not as
a dealer, with respect to its securities transactions.  A trader and an investor
are persons who buy and sell securities for their own accounts. A dealer, on the
other hand, is a person who purchases  securities for resale to customers rather
than for investment or speculation.

     Generally,  the gains and losses realized by a trader or an investor on the
sale of securities are capital gains and losses.  Thus, subject to the treatment
of  certain   currency   exchange  gains  as  ordinary   income  (see  "Currency
Fluctuations  -  'Section  988'  Gains  or  Losses"  below)  and  certain  other
transactions described below, the Company expects that its gains and losses from
its securities  transactions typically will be capital gains and capital losses.
These  capital  gains and losses may be long-term or  short-term  depending,  in
general,  upon the length of time the Company maintains a particular  investment
position and, in some cases,  upon the nature of the transaction.  Property held
for more than one year generally will be eligible for long-term  capital gain or
loss  treatment.  The  application of certain rules relating to short sales,  to
so-called  "straddle" and "wash sale" transactions and to Section 1256 Contracts
(defined  below)  may serve to alter the manner in which the  Company's  holding
period for a security is determined or may otherwise affect the characterization
as short-term or long-term,  and also the timing of the realization,  of certain
gains or losses.  Moreover,  the straddle rules and short sale rules may require
the capitalization of certain related expenses of the Company.

     The  maximum  ordinary  income tax rate for  individuals  is 39.6% and,  in
general,  the maximum  individual income tax rate for long-term capital gains is
20% (unless the taxpayer  elects to be taxed at ordinary rates - see "Limitation
on Deductibility of Interest" below),


                                      -56-
<PAGE>


although  in all cases the  actual  rates may be higher  due to the phase out of
certain tax  deductions,  exemptions  and credits.  The excess of capital losses
over capital  gains may be offset  against the ordinary  income of an individual
taxpayer,  subject to an annual  deduction  limitation of $3,000.  For corporate
taxpayers,  the maximum  income tax rate is 35%.  Capital  losses of a corporate
taxpayer may be offset only against capital gains, but unused capital losses may
be carried back three years (subject to certain limitations) and carried forward
five years.

     The Company may realize  ordinary  income from  dividends  and  accruals of
interest on  securities.  The Company may hold debt  obligations  with "original
issue  discount." In such case, the Company would be required to include amounts
in taxable  income on a current  basis even though  receipt of such  amounts may
occur in a subsequent  year. The Company may also acquire debt  obligations with
"market discount." Upon disposition of such an obligation, the Company generally
would be required to treat gain realized as interest income to the extent of the
market  discount which accrued during the period the debt obligation was held by
the  Company.  Income or loss from  transactions  involving  certain  derivative
instruments, such as swap transactions,  will also generally constitute ordinary
income  or loss.  In  addition,  amounts,  if any,  payable  by the  Company  in
connection  with equity  swaps,  interest rate swaps,  caps,  floors and collars
likely would be considered  "miscellaneous  itemized  deductions"  which,  for a
noncorporate  Non-Managing  Member,  may be  subject  to  restrictions  on their
deductibility.   See  "Deductibility  of  Company  Investment   Expenditures  by
Noncorporate Members" below. Moreover,  gain recognized from certain "conversion
transactions" will be treated as ordinary income.(1)

     Currency  Fluctuations - "Section 988" Gains or Losses.  To the extent that
its investments are made in securities  denominated in a foreign currency,  gain
or loss realized by the Company  frequently  will be affected by the fluctuation
in the value of such  foreign  currencies  relative  to the value of the dollar.
Generally,  gains or losses with respect to the Company's  investments in common
stock of foreign issuers will be taxed as capital gains or losses at the time of
the disposition of such stock. However, under Section 988 of the Code, gains and
losses of the Company on the  acquisition  and  disposition of foreign  currency
(e.g.,  the purchase of foreign  currency and  subsequent use of the currency to
acquire  stock)  will be treated as  ordinary  income or loss.  Moreover,  under
Section 988, gains or losses on disposition of debt securities  denominated in a
foreign  currency to the extent  attributable to fluctuation in the value of the
foreign  currency  between the date of  acquisition of the debt security and the
date of disposition will be treated as ordinary income or loss. Similarly, gains
or losses  attributable to fluctuations in exchange rates that occur between the
time the Company accrues  interest or other  receivables or accrues  expenses or
other  liabilities  denominated  in a foreign  currency and the time the

- ------------------------

(1)  Generally,   a  conversion   transaction  is  one  of  several   enumerated
transactions where substantially all of the taxpayer's return is attributable to
the  time  value  of the  net  investment  in the  transaction.  The  enumerated
transactions  are (i) the  holding  of any  property  (whether  or not  actively
traded) and entering  into a contract to sell such  property  (or  substantially
identical property) at a price determined in accordance with such contract,  but
only if such  property  was  acquired  and such  contract  was entered into on a
substantially contemporaneous basis, (ii) certain straddles, (iii) generally any
other  transaction  that is marketed or sold on the basis that it would have the
economic  characteristics of a loan but the interest-like  return would be taken
as capital gain or (iv) any other transaction specified in Regulations.


                                      -57-
<PAGE>


Company  actually  collects such  receivables  or pays such  liabilities  may be
treated as ordinary income or ordinary loss.

     As indicated  above (see "Types of  Investments  and Related Risk Factors -
Foreign   Securities"),   the  Company  may  acquire  foreign  currency  forward
contracts.  Any  gain or loss  realized  by the  Company  with  respect  to such
instruments will be ordinary,  unless (i) the contract is a capital asset in the
hands of the  Company and is not a part of a straddle  transaction  and (ii) the
Company  makes an election (by the close of the day the  transaction  is entered
into) to treat the gain or loss attributable to such contract as capital gain or
loss.

     Section 1256  Contracts.  In the case of Section 1256  Contracts,  the Code
generally  applies a "mark to  market"  system of  taxing  unrealized  gains and
losses on such contracts and otherwise provides for special rules of taxation. A
Section 1256 Contract  includes certain  regulated  futures  contracts,  certain
foreign currency forward contracts,  and certain options contracts.  Under these
rules,  Section  1256  Contracts  held by the Company at the end of each taxable
year of the Company are treated for Federal  income tax purposes as if they were
sold by the Company for their fair market value on the last business day of such
taxable  year.  The net gain or loss, if any,  resulting  from such deemed sales
(known as "marking to market"),  together with any gain or loss  resulting  from
actual  sales of  Section  1256  Contracts,  must be taken  into  account by the
Company  in  computing  its  taxable  income for such  year.  If a Section  1256
Contract  held  by the  Company  at the  end of a  taxable  year  is sold in the
following  year,  the amount of any gain or loss  realized  on such sale will be
adjusted to reflect the gain or loss  previously  taken into  account  under the
"mark to market" rules.

     Capital  gains and losses from such Section 1256  Contracts  generally  are
characterized as short-term capital gains or losses to the extent of 40% thereof
and as  long-term  capital  gains or losses to the extent of 60%  thereof.  Such
gains and losses will be taxed under the general rules  described  above.  Gains
and  losses  from  certain  foreign  currency  transactions  will be  treated as
ordinary income and losses. (See "Currency Fluctuations - 'Section 988' Gains or
Losses.") If an individual  taxpayer  incurs a net capital loss for a year,  the
portion thereof,  if any, which consists of a net loss on Section 1256 Contracts
may, at the election of the  taxpayer,  be carried  back three years.  Losses so
carried  back may be deducted  only  against net capital gain to the extent that
such gain includes gains on Section 1256 Contracts.

     Mixed  Straddle  Election.  The Code  allows a taxpayer  to elect to offset
gains and losses from positions  which are part of a "mixed  straddle." A "mixed
straddle" is any straddle in which one or more but not all positions are Section
1256 Contracts.  Pursuant to Temporary Regulations,  the Company may be eligible
to elect to  establish  one or more mixed  straddle  accounts for certain of its
mixed straddle  trading  positions.  The mixed straddle  account rules require a
daily  "marking  to market" of all open  positions  in the  account  and a daily
netting of gains and  losses  from  positions  in the  account.  At the end of a
taxable year, the annual net gains or losses from the mixed straddle account are
recognized for tax purposes. The application of the Temporary Regulations' mixed
straddle account rules is not entirely clear.  Therefore,  there is no assurance
that a mixed  straddle  account  election by the Company will be accepted by the
Service.


                                      -58-
<PAGE>


     Short  Sales.  Gain or loss  from a short  sale of  property  is  generally
considered  as capital gain or loss to the extent the property used to close the
short sale  constitutes  a capital  asset in the  Company's  hands.  Except with
respect to certain  situations where the property used to close a short sale has
a long-term  holding period on the date the short sale is entered into, gains on
short sales generally are short-term  capital gains. A loss on a short sale will
be  treated  as a  long-term  capital  loss if, on the date of the  short  sale,
"substantially  identical  property"  has been held by the Company for more than
one year. In addition, these rules may also terminate the running of the holding
period of "substantially identical property" held by the Company.

     Gain or loss on a short sale will generally not be realized until such time
that the short  sale is  closed.  However,  if the  Company  holds a short  sale
position  with  respect  to  stock,  certain  debt  obligations  or  partnership
interests that has  appreciated in value and then acquires  property that is the
same as or  substantially  identical  to the  property  sold short,  the Company
generally  will  recognize  gain on the date it acquires such property as if the
short  sale were  closed on such date  with  such  property.  Similarly,  if the
Company holds an appreciated  financial position with respect to stock,  certain
debt  obligations,  or  partnership  interests and then enters into a short sale
with  respect  to the same or  substantially  identical  property,  the  Company
generally will recognize gain as if the appreciated financial position were sold
at its fair  market  value on the  date it  enters  into  the  short  sale.  The
subsequent holding period for any appreciated financial position that is subject
to these  constructive  sale rules will be  determined  as if such position were
acquired on the date of the constructive sale.

     Effect of Straddle Rules on Members' Securities Positions.  The Service may
treat certain  positions in securities held (directly or indirectly) by a Member
and  its  indirect  interest  in  similar  securities  held  by the  Company  as
"straddles"  for Federal income tax purposes.  The application of the "straddle"
rules in such a case could affect a Member's  holding  period for the securities
involved  and  may  defer  the  recognition  of  losses  with  respect  to  such
securities.

     Limitation  on  Deductibility  of  Interest  and Short Sale  Expenses.  For
noncorporate  taxpayers,  Section  163(d) of the Code limits the  deduction  for
"investment  interest" (i.e.,  interest or short sale expenses for "indebtedness
properly allocable to property held for investment"). Investment interest is not
deductible in the current year to the extent that it exceeds the taxpayer's "net
investment  income,"  consisting  of net gain and ordinary  income  derived from
investments in the current year less certain directly  connected expenses (other
than interest or short sale expenses).  For this purpose,  any long-term capital
gain is excluded from net  investment  income unless the taxpayer  elects to pay
tax on such amount at ordinary income tax rates.

     For purposes of this provision, the Company's activities will be treated as
giving  rise to  investment  income for a Member,  and the  investment  interest
limitation  would apply to a  noncorporate  Member's  share of the  interest and
short sale expenses  attributable  to the Company's  operation.  In such case, a
noncorporate  Member would be denied a deduction for all or part of that portion
of its  distributive  share of the Company's  ordinary  losses  attributable  to
interest and short sale expenses unless it had sufficient investment income from
all  sources  including  the  Company.  A Member  that could not  deduct  losses
currently as a result of the  application of Section 163(d) would be entitled to
carry forward such losses to future years,  subject to the same limitation.  The
investment   interest  limitation  would  also  apply  to  interest


                                      -59-
<PAGE>


paid by a noncorporate Member on money borrowed to finance its investment in the
Company.  Potential investors are advised to consult with their own tax advisers
with respect to the application of the investment  interest  limitation in their
particular tax situations.

     Deductibility of Company Investment  Expenditures by Noncorporate  Members.
Investment expenses (e.g., investment advisory fees) of an individual,  trust or
estate  are  deductible  only to the extent  they  exceed 2% of  adjusted  gross
income.(2) In addition,  the Code further restricts the ability of an individual
with an  adjusted  gross  income in  excess of a  specified  amount  (for  2000,
$128,950 or $64,475  for a married  person  filing a separate  return) to deduct
such investment expenses. Under such provision, investment expenses in excess of
2% of  adjusted  gross  income may only be  deducted  to the extent  such excess
expenses (along with certain other itemized deductions) exceed the lesser of (i)
3% of the excess of the  individual's  adjusted  gross income over the specified
amount  or (ii) 80% of the  amount  of  certain  itemized  deductions  otherwise
allowable  for  the  taxable  year.  Moreover,   such  investment  expenses  are
miscellaneous  itemized  deductions  which are not  deductible by a noncorporate
taxpayer in calculating its alternative minimum tax liability.

     It is unclear  whether all or a portion of the  Company's  operations  will
qualify as trading -- rather than  investment  --  activities,  the expenses for
which  would not be treated  as  investment  expenses.  Therefore,  pursuant  to
Temporary  Regulations issued by the Treasury  Department,  these limitations on
deductibility may apply to a noncorporate  Member's share of the expenses of the
Company, including the CIBC WM Fee.

     The  consequences  of  these  limitations  will  vary  depending  upon  the
particular tax situation of each  taxpayer.  Accordingly,  noncorporate  Members
should  consult  their tax  advisers  with respect to the  application  of these
limitations.

     Application  of Rules for Income and Losses from  Passive  Activities.  The
Code restricts the  deductibility  of losses from a "passive  activity"  against
certain income which is not derived from a passive  activity.  This  restriction
applies to individuals,  personal service  corporations and certain closely held
corporations.   Pursuant  to  Temporary   Regulations  issued  by  the  Treasury
Department,  income or loss from the Company's securities investment and trading
activity  generally will not constitute  income or loss from a passive activity.
Therefore,  passive  losses from other sources  generally  could not be deducted
against a Non-Managing Member's share of such income and gain from the Company.

- ------------------------

(2) However,  Section 67(e) of the Code provides that, in the case of a trust or
an estate,  such limitation does not apply to deductions or costs which are paid
or incurred in  connection  with the  administration  of the estate or trust and
would not have been  incurred  if the  property  were not held in such  trust or
estate.  The  Federal  Court of Appeals for the Sixth  Circuit,  reversing a Tax
Court decision,  has held that the investment  advisory fees incurred by a trust
were exempt (under  Section 67(e)) from the 2% of adjusted gross income floor on
deductibility.  The  Service,  however,  has stated that it will not follow this
decision outside of the Sixth Circuit. Members that are trusts or estates should
consult  their  tax  advisors  as to  the  applicability  of  this  case  to the
investment expenses that are allocated to them.


                                      -60-
<PAGE>


     "Phantom   Income"   From   Company   Investments.   Pursuant   to  various
"anti-deferral"  provisions  of the Code  (the  "Subpart  F,"  "passive  foreign
investment   company"  and  "foreign  personal  holding  company"   provisions),
investments (if any) by the Company in certain foreign  corporations may cause a
Member  to (i)  recognize  taxable  income  prior to the  Company's  receipt  of
distributable  proceeds, (ii) pay an interest charge on receipts that are deemed
as having been deferred or (iii)  recognize  ordinary  income that,  but for the
"anti-deferral"  provisions,  would have been treated as long-term or short-term
capital gain.

     Foreign Taxes

     It is possible that certain  dividends and interest received by the Company
from sources  within  foreign  countries  will be subject to  withholding  taxes
imposed by such  countries.  In  addition,  the  Company  may also be subject to
capital  gains taxes in some of the foreign  countries  where it  purchases  and
sells  securities.  Tax treaties between certain countries and the United States
may reduce or eliminate  such taxes.  It is impossible to predict in advance the
rate of  foreign  tax the  Company  will pay since the  amount of the  Company's
assets to be invested in various countries is not known.

     The Members will be informed by the Company as to their proportionate share
of the foreign taxes paid by the Company, which they will be required to include
in their income. The Members generally will be entitled to claim either a credit
(subject,  however,  to various  limitations on foreign tax credits) or, if they
itemize their  deductions,  a deduction  (subject to the  limitations  generally
applicable  to  deductions)  for their share of such foreign  taxes in computing
their  Federal  income  taxes.  A Member that is tax exempt will not  ordinarily
benefit from such credit or deduction.

     Unrelated Business Taxable Income

     Generally,  an exempt organization is exempt from Federal income tax on its
passive  investment  income,  such as  dividends,  interest  and capital  gains,
whether  realized  by  the  organization   directly  or  indirectly   through  a
partnership  in which it is a partner.(3)  This type of income is exempt even if
it is realized from  securities  trading  activity which  constitutes a trade or
business.

     This general  exemption from tax does not apply to the "unrelated  business
taxable income" ("UBTI") of an exempt organization.  Generally,  except as noted
above with  respect to  certain  categories  of exempt  trading  activity,  UBTI
includes income or gain derived (either directly or through partnerships) from a
trade or  business,  the  conduct  of which is  substantially  unrelated  to the
exercise or performance of the organization's  exempt purpose or function.  UBTI
also includes "unrelated  debt-financed income," which generally consists of (i)
income  derived

- ------------------------

(3)  With  certain  exceptions,   tax-exempt  organizations  which  are  private
foundations  are  subject  to a 2% Federal  excise tax on their "net  investment
income." The rate of the excise tax for any taxable year may be reduced to 1% if
the private foundation meets certain  distribution  requirements for the taxable
year. A private  foundation  will be required to make  payments of estimated tax
with respect to this excise tax.


                                      -61-
<PAGE>


by  an  exempt   organization   (directly   or  through  a   partnership)   from
income-producing   property   with  respect  to  which  there  is   "acquisition
indebtedness"  at any time during the taxable year, and (ii) gains derived by an
exempt organization  (directly or through a partnership) from the disposition of
property with respect to which there is "acquisition  indebtedness"  at any time
during the twelve-month period ending with the date of such disposition.

     The Company may incur "acquisition indebtedness" with respect to certain of
its  transactions,  such as the purchase of securities  on margin.  Based upon a
published  ruling  issued by the Service which  generally  holds that income and
gain with respect to short sales of publicly  traded  stock does not  constitute
income from debt financed  property for purposes of computing  UBTI, the Company
will  treat  its  short  sales  of  securities  as  not  involving  "acquisition
indebtedness"  and therefore not resulting in UBTI.(4) To the extent the Company
recognizes income (i.e., dividends and interest) from securities with respect to
which there is "acquisition  indebtedness" during a taxable year, the percentage
of such  income  which will be treated  as UBTI  generally  will be based on the
percentage which the "average acquisition indebtedness" incurred with respect to
such  securities  is of the  "average  amount  of the  adjusted  basis"  of such
securities during the taxable year.

     To the extent the Company  recognizes  gain from securities with respect to
which there is "acquisition  indebtedness"  at any time during the  twelve-month
period ending with the date of their  disposition,  the  percentage of such gain
which will be treated as UBTI will be based on the percentage  which the highest
amount  of such  "acquisition  indebtedness"  is of the  "average  amount of the
adjusted basis" of such  securities  during the taxable year. In determining the
unrelated   debt-financed  income  of  the  Company,  an  allocable  portion  of
deductions directly connected with the Company's debt-financed property is taken
into  account.  Thus,  for instance,  a percentage of losses from  debt-financed
securities  (based on the debt/basis  percentage  calculation  described  above)
would offset gains treated as UBTI.

     Since the calculation of the Company's "unrelated  debt-financed income" is
complex and will depend in large part on the amount of leverage, if any, used by
the Company from time to time,(5) it is impossible to predict what percentage of
the Company's  income and gains will be treated as UBTI for a Member which is an
exempt  organization.  An exempt  organization's share of the income or gains of
the  Company  which is treated as UBTI may not be offset by losses of the exempt
organization  either  from the  Company or  otherwise,  unless  such  losses are
treated as attributable  to an unrelated  trade or business  (e.g.,  losses from
securities for which there is acquisition indebtedness).

     To the extent that the Company  generates UBTI, the applicable  Federal tax
rate for such a Member generally would be either the corporate or trust tax rate
depending  upon the

- ------------------------

(4)  Moreover,   income  realized  from  option  writing  and  futures  contract
transactions generally would not constitute UBTI.

(5) The  calculation of a particular  exempt  organization's  UBTI would also be
affected if it incurs  indebtedness to finance its investment in the Company. An
exempt  organization  is required to make estimated tax payments with respect to
its UBTI.


                                      -62-
<PAGE>


nature of the particular  exempt  organization.  An exempt  organization  may be
required to support,  to the  satisfaction  of the  Service,  the method used to
calculate its UBTI.  The Company will be required to report to a Member which is
an exempt  organization  information  as to the  portion of its income and gains
from the Company for each year which will be treated as UBTI. The calculation of
such amount with respect to  transactions  entered into by the Company is highly
complex,  and there is no assurance that the Company's  calculation of UBTI will
be accepted by the Service.

     In  general,  if UBTI is  allocated  to an  exempt  organization  such as a
qualified retirement plan or a private foundation,  the portion of the Company's
income and gains  which is not  treated as UBTI will  continue to be exempt from
tax, as will the  organization's  income and gains from other  investments which
are not treated as UBTI.  Therefore,  the possibility of realizing UBTI from its
investment in the Company  generally should not affect the tax-exempt  status of
such an exempt  organization.(6)  However, a charitable remainder trust will not
be exempt from Federal  income tax under Section 664(c) of the Code for any year
in which it has UBTI. A title-holding  company will not be exempt from tax if it
has certain types of UBTI. Moreover, the charitable contribution deduction for a
trust under Section  642(c) of the Code may be limited for any year in which the
trust has UBTI.  A  prospective  investor  should  consult its tax adviser  with
respect to the tax consequences of receiving UBTI from the Company.  (See "ERISA
Considerations.")

     Certain Issues Pertaining to Specific Exempt Organizations

     Private Foundations.  Private foundations and their managers are subject to
excise  taxes if they invest "any amount in such a manner as to  jeopardize  the
carrying out of any of the foundation's  exempt  purposes." This rule requires a
foundation manager, in making an investment, to exercise "ordinary business care
and prudence" under the facts and circumstances prevailing at the time of making
the  investment,  in providing for the  short-term  and  long-term  needs of the
foundation  to carry out its exempt  purposes.  The factors  which a  foundation
manager may take into account in assessing  an  investment  include the expected
rate of return (both income and capital  appreciation),  the risks of rising and
falling price levels, and the need for  diversification  within the foundation's
portfolio.

     In order to avoid the imposition of an excise tax, a private foundation may
be required to distribute on an annual basis its  "distributable  amount," which
includes,  among other  things,  the private  foundation's  "minimum  investment
return,"  defined  as 5%  of  the  excess  of  the  fair  market  value  of  its
nonfunctionally  related assets (assets not used or held for use in carrying out
the foundation's  exempt purposes),  over certain  indebtedness  incurred by the
foundation  in  connection  with such  assets.  It appears  that a  foundation's
investment in the Company would most probably be classified as a nonfunctionally
related  asset.  A   determination   that  an  interest  in

- ------------------------

(6) Certain exempt  organizations  which realize UBTI in a taxable year will not
constitute "qualified organizations" for purposes of Section 514(c)(9)(B)(vi)(I)
of the Code,  pursuant to which, in limited  circumstances,  income from certain
real estate partnerships in which such organizations  invest might be treated as
exempt from UBTI. A prospective tax-exempt Member should consult its tax adviser
in this regard.


                                      -63-
<PAGE>


the Company is a nonfunctionally related asset could conceivably cause cash flow
problems  for a  prospective  Member  which  is a  private  foundation.  Such an
organization  could be required to make distributions in an amount determined by
reference  to  unrealized  appreciation  in the  value  of its  interest  in the
Company.  Of course,  this factor  would  create less of a problem to the extent
that the value of the  investment in the Company is not  significant in relation
to the value of other assets held by a foundation.

     In some instances, an investment in the Company by a private foundation may
be  prohibited by the "excess  business  holdings"  provisions of the Code.  For
example,   if  a  private   foundation  (either  directly  or  together  with  a
"disqualified person") acquires more than 20% of the capital interest or profits
interest  of the  Company,  the private  foundation  may be  considered  to have
"excess business  holdings." If this occurs,  such foundation may be required to
divest itself of its interest in the Company in order to avoid the imposition of
an excise  tax.  However,  the  excise tax will not apply if at least 95% of the
gross income from the Company is "passive"  within the applicable  provisions of
the Code and  Regulations.  Although  there  can be no  assurance,  the Board of
Managers believes that the Company will meet such 95% gross income test.

     A  substantial  percentage of  investments  of certain  "private  operating
foundations"  may be restricted to assets directly  devoted to their  tax-exempt
purposes.  Otherwise,  generally,  rules similar to those discussed above govern
their operations.

     Qualified   Retirement  Plans.   Employee  benefit  plans  subject  to  the
provisions  of ERISA,  Individual  Retirement  Accounts  and Keogh Plans  should
consult their counsel as to the  implications of such an investment under ERISA.
(See "ERISA Considerations.")

     Endowment  Funds.  Investment  managers of endowment  funds should consider
whether the  acquisition  of an Interest is legally  permissible.  This is not a
matter of Federal  law, but is  determined  under state  statutes.  It should be
noted,  however,  that under the Uniform Management of Institutional  Funds Act,
which  has  been  adopted,  in  various  forms,  by a large  number  of  states,
participation in investment partnerships or similar organizations in which funds
are commingled and investment  determinations are made by persons other than the
governing board of the endowment fund is allowed.

     State and Local Taxation

     In  addition  to the  Federal  income  tax  consequences  described  above,
prospective investors should consider potential state and local tax consequences
of an  investment  in the  Company.  State  and  local  tax laws  differ  in the
treatment  of  limited   liability   companies  such  as  the  Company.   A  few
jurisdictions may impose entity level taxes on a limited liability company if it
is found to have  sufficient  contact  with that  jurisdiction.  Such  taxes are
frequently  based on the income and capital of the entity that is  allocated  to
the jurisdiction. Although there can be no assurance, except as noted below, the
Company  intends to  conduct  its  activities  so that it will not be subject to
entity level taxation by any state or local jurisdiction.

     State and local laws often differ from Federal income tax laws with respect
to the treatment of specific items of income,  gain, loss, deduction and credit.
A  Member's  distributive


                                      -64-
<PAGE>


share of the taxable income or loss of the Company generally will be required to
be  included  in  determining  its  reportable  income  for  state and local tax
purposes in the jurisdiction in which it is a resident.

     The Company,  which is treated as a partnership  for New York State and New
York City  income  tax  purposes,  should  not be  subject  to the New York City
unincorporated  business  tax,  which  is not  imposed  on a  partnership  which
purchases  and sells  securities  for its "own  account." By reason of a similar
"own account"  exemption,  it is also  expected  that a  nonresident  individual
Member should not be subject to New York State personal  income tax with respect
to his share of income or gain realized  directly by the Company.  A nonresident
individual  Member  will  not  be  subject  to New  York  City  earnings  tax on
nonresidents with respect to his investment in the Company.

     Individual  Members who are  residents  of New York State and New York City
should be aware  that the New York State and New York City  personal  income tax
laws limit the deductibility of itemized deductions for individual  taxpayers at
certain income levels.  These  limitations may apply to a Member's share of some
or all of the Company's expenses. Prospective Members are urged to consult their
tax  advisers  with  respect to the impact of these  provisions  and the Federal
limitations on the  deductibility of certain itemized  deductions and investment
expenses on their New York State and New York City tax liability.

     For purposes of the New York State corporate franchise tax and the New York
City  general  corporation  tax,  a  corporation  generally  is treated as doing
business  in New York State and New York City,  respectively,  and is subject to
such corporate taxes as a result of the ownership of a partnership interest in a
partnership   which  does  business  in  New  York  State  and  New  York  City,
respectively.(7)  Each of the New York State and New York City  corporate  taxes
are imposed,  in part, on the corporation's  taxable income or capital allocable
to the  relevant  jurisdiction  by  application  of the  appropriate  allocation
percentages.  Moreover,  a non-New York  corporation  which does business in New
York State may be subject to a New York State license fee. A  corporation  which
is subject to New York State corporate franchise tax solely as a result of being
a   non-managing   member  in  a  New  York   partnership   may,  under  certain
circumstances,  elect to compute its New York State  corporate  franchise tax by
taking into account only its distributive share of such partnership's income and
loss. There is currently no similar  provision in effect for purposes of the New
York City general corporation tax.

     Regulations  under both the New York State corporate  franchise tax and the
New York City general  corporation  tax,  however,  provide an exception to this
general  rule in the  case of a  "portfolio  investment  partnership",  which is
defined,  generally,  as a partnership which meets the gross income requirements
of  Section  851(b)(2)  of the Code.  New York State (but not New York City) has
adopted   regulations   that  also  include  income  and  gains  from  commodity
transactions  described in Section  864(b)(2)(B)(iii) as qualifying gross income
for this purpose.  The Company's  qualification  as such a portfolio  investment
partnership must be determined on

- ------------------------

(7) New York State  (but not New York City)  generally  exempts  from  corporate
franchise  tax a  non-New  York  corporation  which  (i)  does not  actually  or
constructively own a 1% or greater limited partnership interest in a partnership
doing business in New York and (ii) has a tax basis in such limited  partnership
interest not greater than $1 million.


                                      -65-
<PAGE>


an annual basis and, with respect to a taxable year, the Company may not qualify
as a portfolio investment partnership.

     A trust  or  other  unincorporated  organization  which  by  reason  of its
purposes or activities is exempt from Federal income tax is also exempt from New
York State and New York City personal income tax. A nonstock  corporation  which
is exempt from Federal  income tax is  generally  presumed to be exempt from New
York State corporate  franchise tax and New York City general  corporation  tax.
New York  State  imposes a tax with  respect  to such  exempt  entities  on UBTI
(including unrelated debt-financed income) at a rate which is currently equal to
the New York State  corporate  franchise tax rate (plus the  corporate  surtax).
There is no New York City tax on the UBTI of an otherwise exempt entity.

     Each  prospective  corporate  Member  should  consult its tax adviser  with
regard to the New York State and New York City tax consequences of an investment
in the Company.

                              ERISA CONSIDERATIONS

     Persons who are fiduciaries  with respect to an employee benefit plan, IRA,
Keogh  plan or other  arrangement  subject  to the  Employee  Retirement  Income
Security Act of 1974, as amended  ("ERISA") or the Code (an "ERISA Plan") should
consider,  among other things,  the matters  described below before  determining
whether to invest in the Company.

     ERISA imposes certain general and specific  responsibilities on persons who
are   fiduciaries   with   respect  to  an  ERISA  Plan,   including   prudence,
diversification,  prohibited  transaction  and other  standards.  In determining
whether a particular  investment is appropriate for an ERISA Plan, Department of
Labor  ("DOL")  regulations  provide that a fiduciary of an ERISA Plan must give
appropriate  consideration to, among other things,  the role that the investment
plays in the ERISA  Plan's  portfolio,  taking  into  consideration  whether the
investment  is designed  reasonably  to further the ERISA  Plan's  purposes,  an
examination of the risk and return  factors,  the portfolio's  composition  with
regard  to  diversification,  the  liquidity  and  current  return  of the total
portfolio  relative to the  anticipated  cash flow needs of the ERISA Plan,  the
income tax consequences of the investment (see "TAX ASPECTS - Unrelated Business
Taxable   Income"  and  "-  Certain   Issues   Pertaining  to  Specific   Exempt
Organizations"), and the projected return of the total portfolio relative to the
ERISA Plan's funding objectives. Before investing the assets of an ERISA Plan in
the  Company,  a  fiduciary  should  determine  whether  such an  investment  is
consistent with its fiduciary  responsibilities  and the foregoing  regulations.
For example,  a fiduciary  should consider  whether an investment in the Company
may be too illiquid or too speculative for a particular  ERISA Plan, and whether
the assets of the ERISA Plan would be sufficiently  diversified.  If a fiduciary
with respect to any such ERISA Plan breaches his responsibilities with regard to
selecting an investment  or an investment  course of action for such ERISA Plan,
the fiduciary  may be held  personally  liable for losses  incurred by the ERISA
Plan as a result of such breach.

     Because the Company is registered  as an investment  company under the 1940
Act, the  underlying  assets of the Company should not be considered to be "plan
assets" of the ERISA Plans  investing  in the  Company  for  purposes of ERISA's
fiduciary responsibility and


                                      -66-
<PAGE>


prohibited  transaction rules. Thus, neither the Adviser nor any of the Managers
will be fiduciaries within the meaning of ERISA.

     The Board of  Managers  requires an ERISA Plan  proposing  to invest in the
Company to represent  that it, and any  fiduciaries  responsible  for the Plan's
investments,  are aware of and  understand the Company's  investment  objective,
policies and strategies,  that the decision to invest plan assets in the Company
was made with  appropriate  consideration  of relevant  investment  factors with
regard to the ERISA Plan and is consistent with the duties and  responsibilities
imposed upon fiduciaries with regard to their investment decisions under ERISA.

     Certain  prospective  Plan investors may currently  maintain  relationships
with the Adviser or the Managers,  or with other  entities  which are affiliated
with the  Adviser or the  Managers.  Each of such  persons may be deemed to be a
party in interest  to and/or a fiduciary  of any ERISA Plan to which it provides
investment  management,  investment advisory or other services.  ERISA prohibits
ERISA Plan  assets to be used for the  benefit of a party in  interest  and also
prohibits  an ERISA Plan  fiduciary  from using its  position to cause the ERISA
Plan to make an investment  from which it or certain third parties in which such
fiduciary has an interest would receive a fee or other consideration. ERISA Plan
investors  should  consult with counsel to  determine  if  participation  in the
Company is a transaction  which is prohibited by ERISA or the Code.  Fiduciaries
of ERISA or Benefit  Plan  investors  will be  required  to  represent  that the
decision  to  invest in the  Company  was made by them as  fiduciaries  that are
independent of such  affiliated  persons,  that are duly authorized to make such
investment  decision  and that have not relied on any  individualized  advice or
recommendation of such affiliated  persons,  as a primary basis for the decision
to invest in the Company.

     The   provisions  of  ERISA  are  subject  to  extensive   and   continuing
administrative  and judicial  interpretation and review. The discussion of ERISA
contained in this Confidential Memorandum, is, of necessity,  general and may be
affected by future publication of regulations and rulings.  Potential  investors
should consult with their legal advisors  regarding the consequences under ERISA
of the acquisition and ownership of interests.

                      ADDITIONAL INFORMATION AND SUMMARY OF
                       LIMITED LIABILITY COMPANY AGREEMENT

     The following is a summary  description  of additional  items and of select
provisions of the Company Agreement which may not be described elsewhere in this
Confidential  Memorandum.  The  description  of such items and provisions is not
definitive  and  reference  should be made to the  complete  text of the Company
Agreement, which is attached hereto as Appendix A.

Member Interests

     Persons who purchase  Interests  in the offering  being made hereby will be
Members.  The Adviser and its affiliates may contribute  capital to and maintain
an investment in the Company, and to that extent will be Members of the Company.
The Adviser, or its successor as investment adviser of the Company, will also be
a Special  Advisory  Member of the  Company.  In that  regard,  the  Company has
established a Special Advisory Account solely for the purpose of


                                      -67-
<PAGE>


receiving the Incentive Allocation.  The interest of the Special Advisory Member
does not participate in the income or gains of the Company, has no voting rights
and has no right to a share of the assets of the Company  upon its  liquidation,
except to the  extent  that the  Special  Advisory  Member  has  received  or is
entitled to receive the Incentive  Allocation  credited to the Special  Advisory
Account  and all or a portion of that  allocation  has not been  withdrawn.  The
Adviser may not contribute capital to the Company as Special Advisory Member.

Liability of Members

     Under  Delaware law and the Company  Agreement,  each Member will be liable
for  the  debts  and  obligations  of the  Company  only  to the  extent  of any
contributions  to the  capital  of the  Company  (plus any  accretions  in value
thereto prior to withdrawal)  and a Member,  in the sole discretion of the Board
of Managers,  may be obligated to return to the Company  amounts  distributed to
the Member in  accordance  with the Company  Agreement in certain  circumstances
where  after  giving  effect to the  distribution,  certain  liabilities  of the
Company exceed the fair market value of the Company's assets.

Duty of Care of Managers

     The Company  Agreement  provides  that a Manager shall not be liable to the
Company or any of the  Members for any loss or damage  occasioned  by any act or
omission in the performance of the Manager's  services as such in the absence of
willful  misfeasance,  bad faith,  gross negligence or reckless disregard of the
duties involved in the conduct of the Manager's  office.  The Company  Agreement
also contains  provisions for the  indemnification,  to the extent  permitted by
law, of a Manager by the Company (but not by the Members  individually)  against
any  liability  and expense to which the  Manager  may be liable  which arise in
connection  with the  performance  of the Manager's  activities on behalf of the
Company. Managers shall not be personally liable to any Member for the repayment
of any positive balance in the Member's capital account or for  contributions by
the  Member to the  capital  of the  Company  or by reason of any  change in the
Federal or state income tax laws applicable to the Company or its investors. The
rights of indemnification  and exculpation  provided under the Company Agreement
shall not be construed so as to provide for indemnification of a Manager for any
liability  (including  liability  under  Federal  securities  laws which,  under
certain circumstances, impose liability even on persons that act in good faith),
to the extent (but only to the  extent)  that such  indemnification  would be in
violation of  applicable  law, but shall be  construed so as to  effectuate  the
applicable  provisions of the Company  Agreement to the fullest extent permitted
by law.

Amendment of the Company Agreement

     The Company  Agreement may generally be amended,  in whole or in part, with
the approval of the Board of Managers  (including a majority of the  Independent
Managers, if required by the 1940 Act) and, without the approval of the Members,
unless the approval of Members is required by the 1940 Act. In addition, certain
amendments to the Company  Agreement  involving capital accounts and allocations
thereto  may not be made  without the  written  consent of any Member  adversely
affected  thereby or unless  each  Member  has  received  written  notice of the
amendment and any Member objecting to the amendment has been allowed


                                      -68-
<PAGE>


a reasonable opportunity (pursuant to any procedures as may be prescribed by the
Board of Managers) to tender its entire interest for repurchase by the Company.

Power of Attorney

     By  subscribing  for an interest in the  Company,  each Member will appoint
each of the Managers his or her attorney-in-fact for purposes of filing required
certificates  and documents  relating to the formation  and  maintenance  of the
Company  as a limited  liability  company  under  Delaware  law or  signing  all
instruments effecting authorized changes in the Company or the Company Agreement
and conveyances and other instruments deemed necessary to effect the dissolution
or termination of the Company.

     The  power-of-attorney  granted  as  part  of  each  Member's  subscription
agreement  is a special  power-of-attorney  and is coupled  with an  interest in
favor of the  Board  of  Managers  and as such  shall  be  irrevocable  and will
continue  in full  force and  effect  notwithstanding  the  subsequent  death or
incapacity of any Member granting the  power-of-attorney,  and shall survive the
delivery of a transfer by a Member of all or any portion of an Interest,  except
that where the transferee thereof has been approved by the Board of Managers for
admission to the Company as a substitute  Member,  or upon the  withdrawal  of a
Member  from the  Company  pursuant  to a  periodic  tender  or  otherwise  this
power-of-attorney given by the transferor shall terminate.

Term, Dissolution and Liquidation

     The Company shall be dissolved:

     --   upon the affirmative vote to dissolve the Company by: (1) the Board of
          Managers or (2) Members holding at least two-thirds (2/3) of the total
          number of votes eligible to be cast by all Members;

     --   upon the expiration of any two year period which commences on the date
          on which any  Member has  submitted  a written  notice to the  Company
          requesting to tender its entire interest for repurchase by the Company
          if that interest has not been repurchased by the Company;

     --   upon the failure of Members to elect  successor  Managers at a meeting
          called by the Adviser when no Manager remains to continue the business
          of the Company; or

     --   as required by operation of law.

     Upon the occurrence of any event of  dissolution,  the Board of Managers or
CIBC WM, acting as  liquidator  under  appointment  by the Board of Managers (or
another  liquidator,  if the Board of Managers do not appoint  CIBC WM to act as
liquidator  or are unable to perform  this  function) is charged with winding up
the affairs of the Company and liquidating  its assets.  Net profits or net loss
during the fiscal period  including the period of liquidation  will be allocated
as  described  in  the  section  titled  "Capital  Accounts  And  Allocations  -
Allocation of Net Profits and Net Loss."


                                      -69-
<PAGE>


     Upon the  liquidation of the Company,  its assets will be  distributed  (1)
first to satisfy the debts,  liabilities  and  obligations of the Company (other
than debts to Members) including actual or anticipated liquidation expenses, (2)
next to repay  debts  owing  to the  Members,  and (3)  finally  to the  Members
proportionately  in  accordance  with the balances in their  respective  capital
accounts.  Assets may be distributed in kind on a pro rata basis if the Board of
Managers or liquidator  determines that the distribution of assets in kind would
be in the interests of the Members in facilitating an orderly liquidation.

Reports to Members

     The Company  furnishes to Members as soon as  practicable  after the end of
each taxable year such  information as is necessary for them to complete Federal
and  state  income  tax  or  information  returns,  along  with  any  other  tax
information  required  by law.  The  Company  will send to Members an  unaudited
semi-annual  and an audited  annual report within 60 days after the close of the
period for which it is being  made,  or as  otherwise  required by the 1940 Act.
Quarterly reports regarding the Company's operations during the period will also
be sent to Members.

Fiscal Year

     The Company's fiscal year is the 12-month period ending on December 31.

Auditors and Legal Counsel

     The Board of Managers  has  selected  Ernst & Young LLP as the  independent
public  accountants  of the  Company.  Ernst & Young  LLP's  principal  business
address is located at 787 Seventh Avenue, 15th Floor, New York, New York.

     Schulte Roth & Zabel LLP, New York,  New York,  serves as legal  counsel to
the Company. The firm also acts as legal counsel to the Adviser, CIBC WM and its
affiliates with respect to certain  matters.  Stroock & Stroock & Lavan LLP, New
York, New York, acts as legal counsel to the Independent Managers.

Custodian

     PFPC Trust Company ("PFPC  Trust")  serves as the primary  custodian of the
Company's assets, and may maintain custody of the Company's assets with domestic
and  foreign  subcustodians  (which may be banks,  trust  companies,  securities
depositories  and clearing  agencies),  approved by the Board of Managers of the
Company in accordance  with the  requirements  set forth in Section 17(f) of the
1940 Act and the rules adopted thereunder. Assets of the Company are not held by
the Adviser or commingled  with the assets of other  accounts  other than to the
extent  that  securities  are held in the name of a  custodian  in a  securities
depository,  clearing agency or omnibus  customer  account of a custodian.  PFPC
Trust's  principal  business  address is 103 Bellevue  Parkway,  Wilmington,  DE
19809.

Inquiries


                                      -70-
<PAGE>


     Inquiries  concerning  the Company  and  Interests  (including  information
concerning subscription and withdrawal procedures) should be directed to:

                  CIBC Oppenheimer Advisers, L.L.C.
                  c/o CIBC World Markets Corp.
                  One World Financial Center - 31st Floor
                  200 Liberty Street
                  New York, New York  10281
                  Telephone:  212-667-4225
                  Telecopier:  212-667-5689

                  For additional information contact:
                  Howard M. Singer
                  Managing Director
                  CIBC World Markets Corp.

                                    * * * * *

     All  potential   investors  in  the  Company  are   encouraged  to  consult
appropriate legal and tax counsel.


                                      -71-
<PAGE>


                                   APPENDIX A
                      ------------------------------------

                              SAWGRASS FUND, L.L.C.

                     (A Delaware Limited Liability Company)
                      ------------------------------------

                       LIMITED LIABILITY COMPANY AGREEMENT

                           Dated as of January 5, 2000
                      ------------------------------------
                     One World Financial Center, 31st Floor
                               200 Liberty Street
                            New York, New York 10281
                                 (212) 667-4225

<PAGE>


                                TABLE OF CONTENTS

                                                                            Page

ARTICLE I    DEFINITIONS...................................................   1

ARTICLE II   ORGANIZATION; ADMISSION OF MEMBERS............................   9

         2.1          Formation of Limited Liability Company...............   9

         2.2          Name.................................................   9

         2.3          Principal and Registered Office......................   9

         2.4          Duration.............................................   9

         2.5          Objective and Business of the Company................   9

         2.6          Board of Managers....................................  10

         2.7          Members..............................................  11

         2.8          Special Advisory Member..............................  11

         2.9          Organizational Member................................  11

         2.10         Both Managers and Members............................  11

         2.11         Limited Liability....................................  11

ARTICLE III  MANAGEMENT....................................................  12

         3.1          Management and Control...............................  12

         3.2          Actions by the Board of Managers.....................  13

         3.3          Meetings of Members..................................  13

         3.4          Custody of Assets of the Company.....................  14

         3.5          Other Activities of Members and Managers.............  14

         3.6          Duty of Care.........................................  14

         3.7          Indemnification......................................  15

         3.8          Fees, Expenses and Reimbursement.....................  17


<PAGE>


ARTICLE IV   TERMINATION  OF  STATUS  OF  ADVISER  AND  MANAGERS,
             TRANSFERS AND REPURCHASES.....................................  18

         4.1          Termination of Status of the Adviser.................  18

         4.2          Termination of Status of a Manager...................  19

         4.3          Removal of the Managers..............................  19

         4.4          Transfer of Interests of Members.....................  19

         4.5          Transfer of Interests of Special Advisory Member.....  20

         4.6          Repurchase of Interests..............................  20

ARTICLE V    CAPITAL.......................................................  22

         5.1          Contributions to Capital.............................  22

         5.2          Rights of Members to Capital.........................  23

         5.3          Capital Accounts.....................................  23

         5.4          Allocation of Net Profit and Loss....................  24

         5.5          Allocation of Insurance Premiums and Proceeds........  24

         5.6          Allocation of Certain Withholding Taxes and Other
                      Expenditures.........................................  24

         5.7          Reserves.............................................  25

         5.8          Incentive Allocation.................................  26

         5.9          Allocation of Organizational Expenses................  26

         5.10         Tax Allocations......................................  26

         5.11         Distributions........................................  28

         5.12         Foreign Withholding..................................  28

ARTICLE VI   DISSOLUTION AND LIQUIDATION...................................  29

         6.1          Dissolution..........................................  29

         6.2          Liquidation of Assets................................  30

ARTICLE VII  ACCOUNTING, VALUATIONS AND BOOKS AND RECORDS..................  31

         7.1          Accounting and Reports...............................  31


                                       ii
<PAGE>


         7.2          Determinations by the Board of Managers..............  31

         7.3          Valuation of Assets..................................  31

ARTICLE VIII  MISCELLANEOUS PROVISIONS.....................................  32

         8.1          Amendment of Limited Liability Company Agreement.....  32

         8.2          Special Power of Attorney............................  33

         8.3          Notices..............................................  34

         8.4          Agreement Binding Upon Successors and Assigns........  35

         8.5          Applicability of 1940 Act and Form N-2...............  35

         8.6          Choice of Law; Arbitration...........................  35

         8.7          Not for Benefit of Creditors.........................  36

         8.8          Consents.............................................  36

         8.9          Merger and Consolidation.............................  36

         8.10         Pronouns.............................................  37

         8.11         Confidentiality......................................  37

         8.12         Certification of Non-Foreign Status..................  37

         8.13         Severability.........................................  38

         8.14         Filing of Returns....................................  38

         8.15         Tax Matters Partner..................................  38

         8.16         Section 754 Election.................................  39


                                      iii
<PAGE>


                              SAWGRASS FUND, L.L.C.
                       LIMITED LIABILITY COMPANY AGREEMENT


     THIS LIMITED  LIABILITY  COMPANY  AGREEMENT of Sawgrass Fund,  L.L.C.  (the
"Company")  is dated as of  January  5, 2000 by and among  Sol  Gittleman,  Luis
Rubio,  Janet  L.  Schinderman  and  Howard  M.  Singer  as the  Managers,  CIBC
Oppenheimer  Advisers,  L.L.C., as the Special Advisory Member, Howard M. Singer
as the Organizational Member, and those persons hereinafter admitted as Members.

     WHEREAS,  the Company  has  heretofore  been formed as a limited  liability
company under the Delaware Limited  Liability Company Act pursuant to an initial
Certificate of Formation (the "Certificate")  dated and filed with the Secretary
of State of Delaware on December 2, 1999;

     NOW,  THEREFORE,  for and in  consideration of the foregoing and the mutual
covenants hereinafter set forth, it is hereby agreed as follows:

                             ----------------------

                                    ARTICLE I

                                   DEFINITIONS

                             ----------------------

     For purposes of this Agreement:

     Administrator                      The person who  provides  administrative
                                        services to the  Company  pursuant to an
                                        administrative services agreement.

     Adviser                            CIBC  Oppenheimer  Advisers,  L.L.C.,  a
                                        limited   liability   company  organized
                                        under  Delaware  law,  or any person who
                                        may hereinafter  serve as the investment
                                        adviser to the  Company  pursuant  to an
                                        Investment Advisory Agreement.

     Advisers Act                       The Investment  Advisers Act of 1940
                                        and the  rules,  regulations  and orders
                                        thereunder,  as  amended  from  time  to
                                        time, or any successor law.

     Affiliate                          An affiliated person of a person as such
                                        term is defined in the 1940 Act.

     Agreement                          This    Limited     Liability    Company
                                        Agreement, as amended from time to time.

     Allocation Change                  With  respect  to each  Member  for each
                                        Allocation    Period,


                                      A-1
<PAGE>


                                        the difference between:

                                             (1)  the sum of (a) the  balance of
                                                  such Member's  Capital Account
                                                  as  of   the   close   of  the
                                                  Allocation    Period    (after
                                                  giving     effect    to    all
                                                  allocations to be made to such
                                                  Member's Capital Account as of
                                                  such  date   other   than  any
                                                  Incentive   Allocation  to  be
                                                  debited  against such Member's
                                                  Capital Account), plus (b) any
                                                  debits   to   such    Member's
                                                  Capital   Account  during  the
                                                  Allocation  Period to  reflect
                                                  any     actual    or    deemed
                                                  distributions  or  repurchases
                                                  with respect to such  Member's
                                                  Interest,  plus (c) any debits
                                                  to   such   Member's   Capital
                                                  Account  during the Allocation
                                                  Period    to    reflect    any
                                                  Insurance  premiums  allocable
                                                  to such  Member,  plus (d) any
                                                  debits   to   such    Member's
                                                  Capital   Account  during  the
                                                  Allocation  Period to  reflect
                                                  any  items  allocable  to such
                                                  Member's    Capital    Account
                                                  pursuant    to   Section   5.6
                                                  hereof; and

                                             (2)  the sum of (a) the  balance of
                                                  such Member's  Capital Account
                                                  as of the  commencement of the
                                                  Allocation  Period,  plus  (b)
                                                  any  credits to such  Member's
                                                  Capital   Account  during  the
                                                  Allocation  Period to  reflect
                                                  any   contributions   by  such
                                                  Member to the  capital  of the
                                                  Company,  plus (c) any credits
                                                  to   such   Member's   Capital
                                                  Account  during the Allocation
                                                  Period    to    reflect    any
                                                  Insurance  proceeds  allocable
                                                  to such Member.

                                        If the  amount  specified  in clause (1)
                                        exceeds the amount  specified  in clause
                                        (2), such difference shall be a Positive
                                        Allocation  Change,  and if  the  amount
                                        specified  in  clause  (2)  exceeds  the
                                        amount  specified  in clause  (1),  such
                                        difference    shall   be   a    Negative
                                        Allocation Change.

     Allocation Period                  With respect to each Member,  the period
                                        commencing  as of the date of  admission
                                        of  such  Member  to  the  Company,  and
                                        thereafter each period  commencing as of
                                        the day  following  the  last day of the
                                        preceding Allocation Period with respect
                                        to such Member,  and ending at the close
                                        of business on the first to occur of the
                                        following:

                                             (1)  the last day of a Fiscal Year;


                                      A-2
<PAGE>



                                             (2)  the  day  as  of   which   the
                                                  Company repurchases the entire
                                                  Interest of such Member;


                                             (3)  the  day  as  of   which   the
                                                  Company     admits     as    a
                                                  substituted Member a person to
                                                  whom  the   Interest  of  such
                                                  Member  has  been  Transferred
                                                  (unless  there is no change of
                                                  beneficial ownership); and

                                             (4)  the  day  as  of   which   the
                                                  Adviser's    status   as   the
                                                  Special   Advisory  Member  is
                                                  terminated pursuant to Section
                                                  4.1 hereof.

     Board of Managers                  The   Board  of   Managers   established
                                        pursuant to Section 2.6.

     Capital Account                    With respect to each Member, the capital
                                        account  established  and  maintained on
                                        behalf  of  each   Member   pursuant  to
                                        Section 5.3 hereof.

     Capital Percentage                 A percentage established for each Member
                                        on  the  Company's   books  as  of  each
                                        Expense  Allocation  Date.  The  Capital
                                        Percentage  of a  Member  on an  Expense
                                        Allocation  Date shall be  determined by
                                        dividing    the    amount   of   capital
                                        contributed to the Company by the Member
                                        pursuant  to  Section  5.1 hereof by the
                                        sum of the  capital  contributed  to the
                                        Company  by  each  Member   pursuant  to
                                        Section  5.1  hereof on or prior to such
                                        Expense  Allocation Date. The sum of the
                                        Capital  Percentages  of all  Members on
                                        each Expense Allocation Date shall equal
                                        100%.

     Certificate                        The  Certificate  of  Formation  of  the
                                        Company  and any  amendments  thereto as
                                        filed with the  office of the  Secretary
                                        of State of Delaware.

     CIBC WM                            CIBC  World   Markets   Corp.,   or  any
                                        successor thereto.

     CIBC WM Services                   Such administrative  services as CIBC WM
                                        shall provide to the Company pursuant to
                                        a separate  written  agreement  with the
                                        Company  as   contemplated   by  Section
                                        3.8(a) hereof.

     Closing Date                       The  first  date  on or as  of  which  a
                                        Member  other  than  the  Organizational
                                        Member is admitted to the Company.

     Code                               The United States Internal  Revenue Code
                                        of 1986,  as  amended  and as  hereafter
                                        amended  from  time  to  time,   or


                                      A-3
<PAGE>


                                        any successor law.

     Company                            The limited  liability  company governed
                                        hereby,   as  such   limited   liability
                                        company   may  from   time  to  time  be
                                        constituted.

     Delaware Act                       The Delaware Limited  Liability  Company
                                        Act as in effect on the date  hereof and
                                        as  amended  from  time to time,  or any
                                        successor law.

     Expense Allocation Date            The Closing Date,  and  thereafter  each
                                        day on or before December 1, 2000, as of
                                        which a  contribution  to the capital of
                                        the Company is made  pursuant to Section
                                        5.1 hereof.

     Fiscal Period                      The  period  commencing  on the  Closing
                                        Date,   and   thereafter   each   period
                                        commencing   on  the   day   immediately
                                        following  the last day of the preceding
                                        Fiscal  Period,  and ending at the close
                                        of business on the first to occur of the
                                        following dates:

                                             (1)  the last day of a Fiscal Year;

                                             (2)  the day  preceding  any day as
                                                  of which a contribution to the
                                                  capital of the Company is made
                                                  pursuant to Section 5.1; or

                                             (3)  any day on which  the  Company
                                                  repurchases  any  Interest  or
                                                  portion of an  Interest of any
                                                  Member;

                                             (4)  any  day   (other   than   one
                                                  specified in clause (2) above)
                                                  as  of  which  this  Agreement
                                                  provides  for any amount to be
                                                  credited to or debited against
                                                  the  Capital  Account  of  any
                                                  Member,  other  than an amount
                                                  to be  credited  to or debited
                                                  against the  Capital  Accounts
                                                  of all  Members in  accordance
                                                  with     their      respective
                                                  Investment Percentages.

     Fiscal Year                        The  period  commencing  on the  Closing
                                        Date and ending on  December  31,  2000,
                                        and thereafter each period commencing on
                                        January  1 of each  year and  ending  on
                                        December 31 of each year (or on the date
                                        of  a  final  distribution  pursuant  to
                                        Section 6.2 hereof), unless the Board of
                                        Managers shall elect another fiscal year
                                        for the  Company  that is a  permissible
                                        taxable year under the Code.


                                      A-4
<PAGE>


     Form N-2                           The Company's  Registration Statement on
                                        Form N-2 filed with the  Securities  and
                                        Exchange  Commission,  as  amended  from
                                        time to time.

     Incentive Allocation               With respect to each Member,  20% of the
                                        amount,  determined  as of the  close of
                                        each  Allocation  Period with respect to
                                        such  Member,  by  which  such  Member's
                                        Positive   Allocation  Change  for  such
                                        Allocation  Period,  if any, exceeds any
                                        positive  balance in such  Member's Loss
                                        Recovery  Account as of the most  recent
                                        prior  date as of which  any  adjustment
                                        has been made thereto.

     Independent Managers               Those  Managers who are not  "interested
                                        persons"  of the Company as such term is
                                        defined in the 1940 Act.

     Insurance                          One or more "key man" insurance policies
                                        on the life of any principal of a member
                                        of the  Adviser,  the  benefits of which
                                        are payable to the Company.

     Interest                           The  entire  ownership  interest  in the
                                        Company  at  any  particular  time  of a
                                        Member or the Special  Advisory  Member,
                                        or other person to whom an Interest of a
                                        Member  or  portion   thereof  has  been
                                        transferred   pursuant  to  Section  4.4
                                        hereof,   including   the   rights   and
                                        obligations  of  such  Member  or  other
                                        person  under  this  Agreement  and  the
                                        Delaware Act.

     Investment Advisory
     Agreement                          A  separate  written  agreement  entered
                                        into by the  Company  pursuant  to which
                                        the Adviser provides investment advisory
                                        services to the Company.

     Investment Percentage              A percentage established for each Member
                                        on the  Company's  books as of the first
                                        day   of   each   Fiscal   Period.   The
                                        Investment  Percentage of a Member for a
                                        Fiscal  Period  shall be  determined  by
                                        dividing  the  balance  of the  Member's
                                        Capital  Account as of the  commencement
                                        of such Fiscal  Period by the sum of the
                                        Capital  Accounts  of all of the Members
                                        as of the  commencement  of such  Fiscal
                                        Period.   The  sum  of  the   Investment
                                        Percentages  of  all  Members  for  each
                                        Fiscal Period shall equal 100%.

     Loss Recovery Account              A  memorandum  account to be recorded in
                                        the books  and  records  of the  Company
                                        with respect to each Member, which shall
                                        have an  initial  balance  of  zero  and
                                        which shall be adjusted as follows:

                                             (1)  As of the  first day after the
                                                  close   of   each   Allocation
                                                  Period  for such  Member,  the
                                                  balance


                                      A-5
<PAGE>


                                                  of the Loss  Recovery  Account
                                                  shall  be   increased  by  the
                                                  amount,   if   any,   of  such
                                                  Member's  Negative  Allocation
                                                  Change  for  such   Allocation
                                                  Period  and  shall be  reduced
                                                  (but  not  below  zero) by the
                                                  amount,   if   any,   of  such
                                                  Member's  Positive  Allocation
                                                  Change  for  such   Allocation
                                                  Period.

                                             (2)  The   balance   of  the   Loss
                                                  Recovery   Account   shall  be
                                                  reduced  (but not below  zero)
                                                  as of  the  first  date  as of
                                                  which  the   Capital   Account
                                                  balance   of  any   Member  is
                                                  reduced   as   a   result   of
                                                  repurchase  or  transfer  with
                                                  respect   to   such   Member's
                                                  Interest    by    an    amount
                                                  determined by multiplying  (a)
                                                  such positive balance by (b) a
                                                  fraction, (i) the numerator of
                                                  which is  equal to the  amount
                                                  of the repurchase or transfer,
                                                  and  (ii) the  denominator  of
                                                  which is equal to the  balance
                                                  of   such   Member's   Capital
                                                  Account   immediately   before
                                                  giving    effect    to    such
                                                  repurchase or transfer.

                                        No  transferee  of  any  Interest  shall
                                        succeed  to any  Loss  Recovery  Account
                                        balance or portion thereof  attributable
                                        to the transferor unless the Transfer by
                                        which  such  transferee   received  such
                                        Interest  did not  involve  a change  of
                                        beneficial ownership.

     Manager                            An individual designated as a manager of
                                        the Company  pursuant to the  provisions
                                        of Section 2.6 of the  Agreement and who
                                        serves on the Board of  Managers  of the
                                        Company.

     Member                             Any person who shall have been  admitted
                                        to the  Company  as a member  (including
                                        any Manager in such person's capacity as
                                        a member of the  Company  but  excluding
                                        any Manager in such person's capacity as
                                        a  Manager  of the  Company)  until  the
                                        Company  repurchases the entire Interest
                                        of such  person as a member  pursuant to
                                        Section  4.6  hereof  or  a  substituted
                                        member  or  members  are  admitted  with
                                        respect  to  any  such  person's  entire
                                        Interest as a member pursuant to Section
                                        4.4  hereof;   such  term  includes  the
                                        Adviser to the extent the Adviser  makes
                                        a capital  contribution  to the  Company
                                        and  shall  have  been  admitted  to the
                                        Company  as  a  member,  and  shall  not
                                        include the Special Advisory Member.

     Negative Allocation Change         The  meaning  given  such  term  in  the
                                        definition  of  Allocation  Change.


                                      A-6
<PAGE>


     Net Assets                         The  total  value of all  assets  of the
                                        Company,  less an  amount  equal  to all
                                        accrued    debts,     liabilities    and
                                        obligations  of the Company,  calculated
                                        before giving effect to any  repurchases
                                        of Interests.

     Net Profit or Net Loss             The amount by which the Net Assets as of
                                        the close of business on the last day of
                                        a Fiscal  Period  exceed (in the case of
                                        Net  Profit)  or are  less  than (in the
                                        case of Net Loss)  the Net  Assets as of
                                        the  commencement  of  the  same  Fiscal
                                        Period (or,  with respect to the initial
                                        Fiscal  Period  of the  Company,  at the
                                        close of business on the Closing  Date),
                                        such amount to be adjusted to exclude:

                                             (1)  the  amount  of any  Insurance
                                                  premiums  or  proceeds  to  be
                                                  allocated  among  the  Capital
                                                  Accounts    of   the   Members
                                                  pursuant    to   Section   5.5
                                                  hereof;

                                             (2)  any  items  to  be   allocated
                                                  among the Capital  Accounts of
                                                  the Members on a basis that is
                                                  not  in  accordance  with  the
                                                  respective          Investment
                                                  Percentages  of all Members as
                                                  of the  commencement  of  such
                                                  Fiscal   Period   pursuant  to
                                                  Sections  5.6 and 5.7  hereof;
                                                  and

                                             (3)  Organizational        Expenses
                                                  allocated  among  the  Capital
                                                  Accounts    of   the   Members
                                                  pursuant    to   Section   5.9
                                                  hereof.

     1940 Act                           The  Investment  Company Act of 1940 and
                                        the   rules,   regulations   and  orders
                                        thereunder,  as  amended  from  time  to
                                        time, or any successor law.

     1934 Act                           The Securities  Exchange Act of 1934 and
                                        the   rules,   regulations   and  orders
                                        thereunder,  as  amended  from  time  to
                                        time, or any successor law.

     Organizational Expenses            The expenses  incurred by the Company in
                                        connection   with  its  formation,   its
                                        initial  registration  as an  investment
                                        company  under  the  1940  Act,  and the
                                        initial offering of Interests.

     Organizational Member              Howard M. Singer

     Positive Allocation Change         The  meaning  given  such  term  in  the
                                        definition of Allocation Change.


                                      A-7
<PAGE>


     Securities                         Securities      (including,      without
                                        limitation,  equities, debt obligations,
                                        options,  and other "securities" as that
                                        term is defined in Section  2(a)(36)  of
                                        the  1940  Act)  and any  contracts  for
                                        forward  or  future   delivery   of  any
                                        security,  debt  obligation or currency,
                                        or  commodity,  all types of  derivative
                                        instruments  and any contracts  based on
                                        any index or group of  securities,  debt
                                        obligations    or     currencies,     or
                                        commodities, and any options thereon.

     Special Advisory Account           A  capital   account   established   and
                                        maintained  on  behalf  of  the  Special
                                        Advisory  Member pursuant to Section 5.3
                                        hereof   solely   for  the   purpose  of
                                        receiving the Incentive Allocation.

     Special Advisory Member            The  Adviser  in  its  capacity  as  the
                                        investment adviser to the Company.

     Transfer                           The    assignment,    transfer,    sale,
                                        encumbrance, pledge or other disposition
                                        of all or any  portion  of an  Interest,
                                        including   any  right  to  receive  any
                                        allocations      and       distributions
                                        attributable to an Interest.


                                      A-8
<PAGE>


                            -------------------------

                                   ARTICLE II

                       ORGANIZATION; ADMISSION OF MEMBERS

                            -------------------------

     2.1  Formation of Limited Liability Company.

     The  Board  of  Managers  shall  execute  and file in  accordance  with the
Delaware Act any  amendment to the  Certificate  and shall execute and file with
applicable  governmental  authorities  any  other  instruments,   documents  and
certificates that, in the opinion of the Company's legal counsel,  may from time
to time be  required by the laws of the United  States of America,  the State of
Delaware or any other  jurisdiction  in which the Company shall  determine to do
business,  or any political  subdivision or agency  thereof,  or that such legal
counsel may deem necessary or appropriate to effectuate,  implement and continue
the valid existence and business of the Company.

     2.2  Name.

     The name of the Company shall be "Sawgrass Fund, L.L.C." or such other name
as the Board of Managers  may  hereafter  adopt upon (i) causing an  appropriate
amendment to the Certificate to be filed in accordance with the Delaware Act and
(ii) sending notice thereof to each Member.

     2.3  Principal and Registered Office.

     The Company shall have its principal office at One World Financial  Center,
31st Floor, 200 Liberty Street, New York, New York 10281, or at such other place
designated from time to time by the Board of Managers.

     The  Company  shall have its  registered  office in Delaware at 1013 Centre
Road,  Wilmington,  Delaware  19805-1297,  and shall  have  Corporation  Service
Company as its  registered  agent for service of process in  Delaware,  unless a
different  registered  office  or agent is  designated  from time to time by the
Board of Managers.

     2.4  Duration.

     The term of the Company commenced on the filing of the Certificate with the
Secretary of State of Delaware and shall continue until the Company is dissolved
pursuant to Section 6.1 hereof.

     2.5  Objective and Business of the Company.

     (a)  The  objective  and  business  of the  Company  is to  purchase,  sell
(including short sales), invest and trade in Securities, on margin or otherwise,
and to engage in any financial or derivative  transactions  relating  thereto or
otherwise. The Company may execute, deliver and


                                      A-9
<PAGE>


perform  all  contracts,  agreements  and other  undertakings  and engage in all
activities  and  transactions  as may in the opinion of the Board of Managers be
necessary or advisable to carry out its objective or business.

     (b) The Company shall operate as a closed-end, non-diversified,  management
investment  company  in  accordance  with  the  1940  Act  and  subject  to  any
fundamental policies and investment restrictions set forth in the Form N-2.

     2.6  Board of Managers.

     (a) Prior to the Closing Date, the Organizational Member may designate such
persons  who shall  agree to be bound by all of the terms of this  Agreement  to
serve as the initial Managers on the Board of Managers,  subject to the election
of such  persons  prior to the Closing  Date by the  Organizational  Member.  By
signing  this  Agreement or the  signature  page of the  Company's  subscription
agreement,  a Member  admitted on the Closing Date shall be deemed to have voted
for the election of each of the initial Managers to the Board of Managers. After
the  Closing  Date,  the Board of Managers  may,  subject to the  provisions  of
paragraphs  (a) and (b) of this  Section  2.6 with  respect to the number of and
vacancies  in the position of Manager and the  provisions  of Section 3.3 hereof
with  respect to the  election  of Managers to the Board of Managers by Members,
designate  any  person  who shall  agree to be bound by all of the terms of this
Agreement as a Manager. The names and mailing addresses of the Managers shall be
set forth in the books and records of the Company.  The number of Managers shall
be fixed from time to time by the Board of Managers.

     (b) Each  Manager  shall serve on the Board of Managers for the duration of
the term of the Company,  unless his or her status as a Manager  shall be sooner
terminated  pursuant to Section  4.2 hereof.  In the event of any vacancy in the
position of Manager,  the remaining  Managers may appoint an individual to serve
in such  capacity,  so long as  immediately  after  such  appointment  at  least
two-thirds  (2/3) of the Managers  then  serving  would have been elected by the
Members. The Board of Managers may call a meeting of Members to fill any vacancy
in the  position  of  Manager,  and shall do so within 60 days after any date on
which Managers who were elected by the Members cease to constitute a majority of
the Managers then serving on the Board of Managers.

     (c) In the event that no Manager  remains to continue  the  business of the
Company,  the Adviser shall  promptly call a meeting of the Members,  to be held
within 60 days  after the date on which the last  Manager  ceased to act in that
capacity, for the purpose of determining whether to continue the business of the
Company and, if the business shall be continued, of electing the required number
of Managers to the Board of  Managers.  If the Members  shall  determine at such
meeting not to continue the business of the Company or if the required number of
Managers is not elected  within 60 days after the date on which the last Manager
ceased to act in that capacity,  then the Company shall be dissolved pursuant to
Section  6.1  hereof  and the  assets of the  Company  shall be  liquidated  and
distributed pursuant to Section 6.2 hereof.


                                      A-10
<PAGE>


     2.7  Members.

     For the first twelve months from the date the Company commences operations,
the Board of  Managers  may admit new Members as of the first day of each month.
Thereafter,  the Board of Managers may admit new Members at such times as may be
determined  by the Board of  Managers,  but not more  frequently  than as of the
first day of each calendar quarter,  unless the Board of Managers has received a
letter from counsel stating that,  under  applicable  banking laws, the Board of
Managers  may  admit  new  Members  on a more  frequent  basis.  Subject  to the
foregoing,  Members may be admitted to the Company subject to the condition that
each such Member shall execute an  appropriate  signature page of this Agreement
or of the Company's  subscription agreement pursuant to which such Member agrees
to be bound by all the terms and provisions hereof. The Board of Managers may in
its absolute  discretion  reject any  subscription  for Interests.  The Board of
Managers may, in its sole discretion, suspend subscriptions for Interests at any
time.  The  admission  of any  person as a Member  shall be  effective  upon the
revision  of the books and  records of the  Company to reflect  the name and the
contribution to the capital of the Company of such additional Member.

     2.8  Special Advisory Member.

     Upon signing this  Agreement,  the Adviser shall be admitted to the Company
as the Special  Advisory  Member.  The Interest of the Special  Advisory  Member
shall be non-voting. If at anytime the Investment Advisory Agreement between the
Company and the person then serving as Adviser terminates, the Board of Managers
shall admit as a  substitute  Special  Advisory  Member,  upon its signing  this
Agreement,  such person as may be retained by the Company to provide  investment
advisory services pursuant to an Investment Advisory  Agreement,  subject to the
due  approval of such  Investment  Advisory  Agreement  in  accordance  with the
requirements of the 1940 Act.

     2.9  Organizational Member.

     Upon the admission of any Member, the Organizational  Member shall withdraw
from the  Company  as the  Organizational  Member and shall be  entitled  to the
return  of his  or  her  Capital  Contribution,  if  any,  without  interest  or
deduction.

     2.10 Both Managers and Members.

     A Member  may at the same  time be a  Manager  and a  Member,  or a Special
Advisory Member and Member,  in which event such Member's rights and obligations
in each capacity shall be determined separately in accordance with the terms and
provisions hereof or as provided in the Delaware Act.

     2.11 Limited Liability.

     Except as provided under  applicable law, a Member and the Special Advisory
Member shall not be liable for the Company's debts,  obligations and liabilities
in any amount in excess of the capital account balance of such Member, plus such
Member's  share of  undistributed  profits and assets.  Except as provided under
applicable  law,  a  Manager  shall  not be  liable  for  the  Company's  debts,
obligations and liabilities.


                                      A-11
<PAGE>


                           --------------------------

                                   ARTICLE III

                                   MANAGEMENT

                           --------------------------

     3.1  Management and Control.

     (a)  Management  and control of the business of the Company shall be vested
in the Board of Managers,  which shall have the right,  power and authority,  on
behalf of the  Company  and in its name,  to  exercise  all  rights,  powers and
authority of Managers under the Delaware Act and to do all things  necessary and
proper to carry out the  objective  and business of the Company and their duties
hereunder.  No Manager shall have the authority individually to act on behalf of
or to bind the Company  except within the scope of such  Manager's  authority as
delegated by the Board of Managers.  The parties  hereto intend that,  except to
the extent otherwise expressly provided herein, (i) each Manager shall be vested
with the same powers, authority and responsibilities on behalf of the Company as
are customarily vested in each director of a Delaware  corporation and (ii) each
Independent  Manager  shall  be  vested  with  the same  powers,  authority  and
responsibilities  on behalf of the  Company  as are  customarily  vested in each
director of a closed-end management investment company registered under the 1940
Act  that is  organized  as a  Delaware  corporation  who is not an  "interested
person" of such  company  as such term is  defined  in the 1940 Act.  During any
period in which the Company shall have no Managers,  the Adviser shall  continue
to serve as the Adviser to the Company.  During such time period,  CIBC WM shall
continue to provide the CIBC WM Services to the Company.

     (b) Each Member agrees not to treat,  on such Member's  personal income tax
return  or in any  claim  for a tax  refund,  any item of  income,  gain,  loss,
deduction or credit in a manner  inconsistent with the treatment of such item by
the  Company.  The Board of  Managers  shall have the  exclusive  authority  and
discretion to make any elections required or permitted to be made by the Company
under any provisions of the Code or any other revenue laws.

     (c) Members shall have no right to participate in and shall take no part in
the  management  or control of the  Company's  business and shall have no right,
power or authority to act for or bind the Company.  Members shall have the right
to vote on any matters only as provided in this Agreement or on any matters that
require the approval of the holders of voting  securities  under the 1940 Act or
as otherwise required in the Delaware Act.

     (d) The Board of  Managers  may  delegate  to any other  person any rights,
power and  authority  vested by this  Agreement  in the Board of Managers to the
extent permissible under applicable law.

     3.2  Actions by the Board of Managers.

     (a) Unless  provided  otherwise  in this  Agreement,  the Board of Managers
shall  act only:  (i) by the  affirmative  vote of a  majority  of the  Managers
(including the vote of a majority of the Independent Managers if required by the
1940 Act)  present at a meeting  duly  called at which a quorum of the  Managers
shall be present (in person or, if in person  attendance  is not required by


                                      A-12
<PAGE>


the 1940 Act, by telephone) or (ii) by unanimous  written  consent of all of the
Managers without a meeting, if permissible under the 1940 Act.

     (b) The Board of  Managers  may  designate  from  time to time a  Principal
Manager who shall preside at all meetings. Meetings of the Board of Managers may
be called by the Principal  Manager or by any two  Managers,  and may be held on
such date and at such time and place as the Board of Managers  shall  determine.
Each Manager shall be entitled to receive  written notice of the date,  time and
place of such meeting within a reasonable time in advance of the meeting. Notice
need not be given to any Manager who shall attend a meeting without objecting to
the lack of notice or who shall execute a written  waiver of notice with respect
to the meeting.  Managers may attend and participate in any meeting by telephone
except  where in person  attendance  at a meeting is required by the 1940 Act. A
majority of the Managers shall constitute a quorum at any meeting.

     3.3  Meetings of Members.

     (a)  Actions  requiring  the vote of the  Members  may be taken at any duly
constituted meeting of the Members at which a quorum is present. Meetings of the
Members may be called by the Board of Managers or by Members holding 25% or more
of the total number of votes eligible to be cast by all Members, and may be held
at such time, date and place as the Board of Managers shall determine. The Board
of Managers shall arrange to provide written notice of the meeting,  stating the
date, time and place of the meeting and the record date therefor, to each Member
entitled to vote at the meeting within a reasonable time prior thereto.  Failure
to receive  notice of a meeting  on the part of any Member  shall not affect the
validity of any act or proceeding  of the meeting,  so long as a quorum shall be
present at the meeting,  except as otherwise  required by  applicable  law. Only
matters set forth in the notice of a meeting may be voted on by the Members at a
meeting. The presence in person or by proxy of Members holding a majority of the
total  number of votes  eligible to be cast by all Members as of the record date
shall constitute a quorum at any meeting.  In the absence of a quorum, a meeting
of the Members may be adjourned  by action of a majority of the Members  present
in person  or by proxy  without  additional  notice  to the  Members.  Except as
otherwise  required by any  provision of this  Agreement or of the 1940 Act, (i)
those  candidates  receiving  a  plurality  of the votes cast at any  meeting of
Members  shall be elected as Managers and (ii) all other  actions of the Members
taken at a meeting  shall  require  the  affirmative  vote of Members  holding a
majority of the total number of votes  eligible to be cast by those  Members who
are present in person or by proxy at such meeting.

     (b) Each  Member  shall be  entitled  to cast at any  meeting  of Members a
number of votes  equivalent  to such  Member's  Investment  Percentage as of the
record date for such  meeting.  The Board of Managers  shall  establish a record
date not less than 10 nor more than 60 days prior to the date of any  meeting of
Members to determine eligibility to vote at such meeting and the number of votes
that each Member will be entitled to cast thereat,  and shall  maintain for each
such record date a list setting  forth the name of each Member and the number of
votes that each Member will be entitled to cast at the meeting.

     (c) A  Member  may  vote at any  meeting  of  Members  by a proxy  properly
executed  in writing by the Member and filed with the  Company  before or at the
time of the meeting. A proxy may be suspended or revoked, as the case may be, by
the Member executing the


                                      A-13
<PAGE>


proxy by a later writing  delivered to the Company at any time prior to exercise
of the proxy or if the  Member  executing  the  proxy  shall be  present  at the
meeting  and  decide  to vote in  person.  Any  action  of the  Members  that is
permitted to be taken at a meeting of the Members may be taken without a meeting
if consents in writing,  setting forth the action  taken,  are signed by Members
holding a  majority  of the total  number of votes  eligible  to be cast or such
greater percentage as may be required in order to approve such action.

     3.4  Custody of Assets of the Company.

     The physical possession of all funds, Securities or other properties of the
Company shall at all times, be held,  controlled and administered by one or more
custodians  retained by the Company in accordance  with the  requirements of the
1940 Act and the rules thereunder.

     3.5  Other Activities of Members and Managers.

     (a) The  Managers  shall not be required to devote full time to the affairs
of the  Company,  but shall  devote such time as may  reasonably  be required to
perform their obligations under this Agreement.

     (b) Any Member or Manager,  and any Affiliate of any Member or Manager, may
engage in or  possess an  interest  in other  business  ventures  or  commercial
dealings of every kind and description, independently or with others, including,
but not limited to,  acquisition  and  disposition of  Securities,  provision of
investment  advisory or  brokerage  services,  serving as  directors,  officers,
employees,  advisors or agents of other companies,  partners of any partnership,
members of any limited liability company,  or trustees of any trust, or entering
into any other  commercial  arrangements.  No Member or  Manager  shall have any
rights in or to such  activities of any other Member or Manager,  or any profits
derived therefrom.

     3.6  Duty of Care.

     (a) A Manager  shall not be liable to the  Company or to any of its Members
for any loss or damage  occasioned by any act or omission in the  performance of
his or her services under this Agreement, unless it shall be determined by final
judicial  decision on the merits from which there is no further  right to appeal
that such loss is due to an act or omission of such Manager constituting willful
misfeasance,  bad faith,  gross  negligence or reckless  disregard of the duties
involved in the conduct of such Manager's office.

     (b)  Members  not in  breach  of any  obligation  hereunder  or  under  any
agreement  pursuant  to which the Member  subscribed  for an  Interest  shall be
liable to the Company,  any Member or third  parties only as provided  under the
Delaware Act.

     3.7  Indemnification.

     (a) To the fullest extent  permitted by law, the Company shall,  subject to
Section 3.7(b) hereof, indemnify each Manager (including for this purpose his or
her   respective   executors,   heirs,   assigns,   successors  or  other  legal
representatives),  against all losses, claims, damages,  liabilities,  costs and
expenses,  including,  but not  limited  to,  amounts  paid in  satisfaction  of
judgments, in compromise, or as fines or penalties, and reasonable counsel fees,
incurred in


                                      A-14
<PAGE>


connection with the defense or disposition of any action, suit, investigation or
other  proceeding,  whether civil or criminal,  before any  judicial,  arbitral,
administrative  or legislative body, in which such indemnitee may be or may have
been involved as a party or otherwise,  or with which such  indemnitee may be or
may have been threatened,  while in office or thereafter,  by reason of being or
having  been a Manager  of the  Company or the past or  present  performance  of
services  to the  Company by such  indemnitee,  except to the extent  such loss,
claim, damage,  liability, cost or expense shall have been finally determined in
a  decision  on the  merits in any such  action,  suit,  investigation  or other
proceeding  to have been  incurred or suffered by such  indemnitee  by reason of
willful misfeasance,  bad faith, gross negligence,  or reckless disregard of the
duties  involved  in the  conduct  of such  indemnitee's  office.  The rights of
indemnification  provided under this Section 3.7 shall not be construed so as to
provide for indemnification of a Manager for any liability  (including liability
under  federal  securities  laws  which,  under  certain  circumstances,  impose
liability even on persons that act in good faith) to the extent (but only to the
extent) that such  indemnification  would be in violation of applicable law, but
shall be construed so as to effectuate the applicable provisions of this Section
3.7 to the fullest extent permitted by law.

     (b) Expenses,  including  reasonable  counsel fees, so incurred by any such
indemnitee  (but  excluding  amounts  paid  in  satisfaction  of  judgments,  in
compromise,  or as fines or  penalties),  may be paid  from  time to time by the
Company  in  advance  of  the  final  disposition  of  any  such  action,  suit,
investigation  or proceeding  upon receipt of an  undertaking by or on behalf of
such indemnitee to repay to the Company  amounts so paid if it shall  ultimately
be determined  that  indemnification  of such expenses is not  authorized  under
Section 3.7(a) hereof; provided, however, that (i) such indemnitee shall provide
security for such undertaking, (ii) the Company shall be insured by or on behalf
of such indemnitee against losses arising by reason of such indemnitee's failure
to fulfill such undertaking,  or (iii) a majority of the Managers (excluding any
Manager who is either  seeking  advancement  of expenses  hereunder or is or has
been a party to any other action,  suit,  investigation or proceeding  involving
claims  similar  to  those  involved  in  the  action,  suit,  investigation  or
proceeding  giving rise to a claim for  advancement  of expenses  hereunder)  or
independent legal counsel in a written opinion shall determine based on a review
of readily available facts (as opposed to a full trial-type  inquiry) that there
is  reason  to  believe  such   indemnitee   ultimately   will  be  entitled  to
indemnification.

     (c) As to the disposition of any action, suit,  investigation or proceeding
(whether by a compromise  payment,  pursuant to a consent  decree or  otherwise)
without an  adjudication or a decision on the merits by a court, or by any other
body before which the proceeding shall have been brought,  that an indemnitee is
liable to the  Company  or its  Members by reason of  willful  misfeasance,  bad
faith,  gross  negligence,  or reckless  disregard of the duties involved in the
conduct of such indemnitee's office,  indemnification shall be provided pursuant
to Section 3.7(a) hereof if (i) approved as in the best interests of the Company
by a majority of the  Managers  (excluding  any  Manager  who is either  seeking
indemnification  hereunder or is or has been a party to any other action,  suit,
investigation  or proceeding  involving  claims similar to those involved in the
action,   suit,   investigation  or  proceeding  giving  rise  to  a  claim  for
indemnification  hereunder) upon a determination  based upon a review of readily
available facts (as opposed to a full  trial-type  inquiry) that such indemnitee
acted in good faith and in the  reasonable  belief that such actions were in the
best  interests  of the  Company and that such  indemnitee  is not liable to the
Company  or its  Members  by reason of willful  misfeasance,  bad  faith,  gross
negligence,  or reckless disregard of the duties involved in the conduct of such
indemnitee's office, or (ii) the Board of


                                      A-15
<PAGE>


Managers  secures a written  opinion of  independent  legal counsel based upon a
review of readily  available facts (as opposed to a full trial-type  inquiry) to
the effect that such  indemnification  would not protect such indemnitee against
any  liability  to the  Company or its  Members to which such  indemnitee  would
otherwise  be  subject  by reason  of  willful  misfeasance,  bad  faith,  gross
negligence,  or reckless disregard of the duties involved in the conduct of such
indemnitee's office.

     (d) Any  indemnification  or  advancement of expenses made pursuant to this
Section 3.7 shall not  prevent  the  recovery  from any  indemnitee  of any such
amount if such indemnitee  subsequently shall be determined in a decision on the
merits in any action, suit,  investigation or proceeding involving the liability
or expense that gave rise to such  indemnification or advancement of expenses to
be liable to the  Company or its Members by reason of willful  misfeasance,  bad
faith,  gross  negligence,  or reckless  disregard of the duties involved in the
conduct of such  indemnitee's  office.  In (i) any suit brought by a Manager (or
other  person  entitled  to  indemnification  hereunder)  to  enforce a right to
indemnification  under this Section 3.7 it shall be a defense that,  and (ii) in
any  suit  in  the  name  of the  Company  to  recover  any  indemnification  or
advancement  of expenses  made pursuant to this Section 3.7 the Company shall be
entitled to recover such expenses upon a final adjudication that, the Manager or
other person claiming a right to indemnification  under this Section 3.7 has not
met the  applicable  standard of conduct set forth in this  Section  3.7. In any
such suit  brought  to  enforce a right to  indemnification  or to  recover  any
indemnification  or  advancement  of expenses made pursuant to this Section 3.7,
the  burden of proving  that the  Manager  or other  person  claiming a right to
indemnification is not entitled to be indemnified,  or to any indemnification or
advancement of expenses,  under this Section 3.7 shall be on the Company (or any
Member  acting  derivatively  or  otherwise  on  behalf  of the  Company  or its
Members).

     (e)  An  indemnitee  may  not  satisfy  any  right  of  indemnification  or
advancement of expenses  granted in this Section 3.7 or to which such indemnitee
may otherwise be entitled except out of the assets of the Company, and no Member
shall be personally liable with respect to any such claim for indemnification or
advancement of expenses.

     (f) The rights of indemnification provided hereunder shall not be exclusive
of or affect any other rights to which any person may be entitled by contract or
otherwise  under law.  Nothing  contained  in this  Section 3.7 shall affect the
power of the Company to purchase and maintain  liability  insurance on behalf of
any Manager or other person.

     3.8  Fees, Expenses and Reimbursement.

     (a) So long as CIBC WM provides  CIBC WM Services to the Company,  it shall
be entitled to receive fees for such services as may be agreed to by CIBC WM and
the Company pursuant to a separate written agreement.

     (b) The Board of Managers may cause the Company to compensate  each Manager
for his or her services as such. In addition,  the Managers  shall be reimbursed
by the  Company  for  reasonable  out-of-pocket  expenses  incurred  by  them in
performing their duties under this Agreement.


                                      A-16
<PAGE>


     (c) The  Company  shall bear all  expenses  incurred  in its  business  and
operations,  other than those  specifically  required to be borne by the Adviser
pursuant  to the  Investment  Advisory  Agreement  or by CIBC WM pursuant to the
agreement  referred  to in Section  3.8(a)  hereof.  Expenses to be borne by the
Company include, but are not limited to, the following:

          (1)  all costs and expenses directly related to portfolio transactions
               and  positions  for the  Company's  account,  including,  but not
               limited to, brokerage  commissions,  research fees,  interest and
               commitment fees on loans and debit balances, borrowing charges on
               Securities sold short, dividends on Securities sold short but not
               yet purchased,  custodial fees,  margin fees,  transfer taxes and
               premiums,  taxes  withheld  on  foreign  dividends  and  indirect
               expenses from investments in investment funds;

          (2)  all costs  and  expenses  associated  with the  organization  and
               registration of the Company, certain offering costs and the costs
               of compliance with any applicable federal or state laws;

          (3)  attorneys'  fees and  disbursements  associated with updating the
               Company's Confidential Memorandum and subscription documents (the
               "Offering  Materials");   the  costs  of  printing  the  Offering
               Materials;  the costs of distributing  the Offering  Materials to
               prospective  investors;  and  attorneys'  fees and  disbursements
               associated with the review of subscription documents executed and
               delivered  to  the  Company  in  connection   with  offerings  of
               Interests;

          (4)  the  costs  and  expenses  of  holding  meetings  of the Board of
               Managers and any meetings of Members;

          (5)  fees and  disbursements of any attorneys,  accountants,  auditors
               and other consultants and professionals  engaged on behalf of the
               Company.  In the event that  consultants  and  professionals  are
               retained  for the  benefit of the  Company  and one or more other
               accounts  managed  by the  Adviser,  such fees will be  allocated
               among all such accounts based on relative net assets;

          (6)  any fees  payable to CIBC WM for CIBC WM Services and the fees of
               custodians and persons providing  administrative  services to the
               Company;

          (7)  the costs of a fidelity bond and any liability insurance obtained
               on behalf of the Company or its Managers;

          (8)  all  expenses  of  computing   the  Company's  net  asset  value,
               including any equipment or services obtained for such purposes;

          (9)  all  charges for  equipment  or  services  used in  communicating
               information  regarding  the  Company's   transactions  among  the


                                      A-17
<PAGE>


               Adviser and any  custodian or other agent engaged by the Company;
               and

          (10) such other types of expenses as may be approved from time to time
               by the Board of Managers,  other than those  required to be borne
               by the Adviser or CIBC WM.

The Adviser shall be entitled to  reimbursement  from the Company for any of the
above expenses that it pays on behalf of the Company.

     (d) Subject to procuring any required  regulatory  approvals,  from time to
time the Company may, alone or in conjunction  with other accounts for which the
Adviser, or any Affiliate of the Adviser,  acts as general partner or investment
adviser,  purchase  Insurance in such  amounts,  from such  insurers and on such
terms as the Board of Managers shall determine.

                        ---------------------------------

                                   ARTICLE IV

                 TERMINATION OF STATUS OF ADVISER AND MANAGERS,
                            TRANSFERS AND REPURCHASES

                        ---------------------------------

     4.1  Termination of Status of the Adviser.

     The status of the Adviser as the Special Advisory Member shall terminate if
the Investment  Advisory  Agreement with the Adviser  terminates and the Company
does not  enter  into a new  Investment  Advisory  Agreement  with the  Adviser,
effective as of the date of such termination.

     4.2  Termination of Status of a Manager.

     The status of a Manager shall  terminate if the Manager (i) shall die; (ii)
shall be adjudicated incompetent;  (iii) shall voluntarily withdraw as a Manager
(upon not less than 90 days' prior written notice to the other  Managers);  (iv)
shall be  removed;  (v) shall be  certified  by a  physician  to be  mentally or
physically unable to perform his or her duties hereunder; (vi) shall be declared
bankrupt by a court with appropriate jurisdiction,  file a petition commencing a
voluntary case under any bankruptcy law or make an assignment for the benefit of
creditors;  (vii) shall have a receiver  appointed to administer the property or
affairs of such Manager;  or (viii) shall otherwise cease to be a Manager of the
Company under the Delaware Act.

     4.3  Removal of the Managers.

     Any Manager may be removed either by (a) the vote or written  consent of at
least  two-thirds  (2/3) of the  Managers not subject to the removal vote or (b)
the vote or written consent of Members holding not less than two-thirds (2/3) of
the total number of votes eligible to be cast by all Members.


                                      A-18
<PAGE>


     4.4  Transfer of Interests of Members.

     (a) An Interest of a Member may be Transferred only (i) by operation of law
pursuant to the death,  divorce,  bankruptcy,  insolvency or dissolution of such
Member or (ii) with the written  consent of the Board of Managers  (which may be
withheld in its sole and absolute discretion); provided, however, that the Board
of Managers may not consent to any  Transfer  other than a Transfer (i) in which
the tax basis of the Interest in the hands of the transferee is  determined,  in
whole or in part,  by reference to its tax basis in the hands of the  transferor
(e.g.,  certain  Transfers  to  affiliates,  gifts and  contributions  to family
partnerships),  (ii) to  members of the  Member's  immediate  family  (brothers,
sisters, spouse, parents and children), or (iii) a distribution from a qualified
retirement  plan or an individual  retirement  account,  unless it consults with
counsel to the Company and counsel to the Company  confirms  that such  Transfer
will not cause the  Company  to be treated as a  "publicly  traded  partnership"
taxable as a corporation.

     (b) The Board of Managers may not consent to a Transfer of an Interest or a
portion  thereof of a Member  unless:  (i) the person to whom such  Interest  is
Transferred  (or each of such person's  beneficial  owners if such a person is a
"private  investment company" as defined in paragraph (d)(3) of Rule 205-3 under
the  Advisers  Act) is a person  whom the Board of Managers  believes  meets the
requirements  of  paragraph  (d)(1) of Rule 205-3 under the  Advisers Act or any
successor  rule  thereto;  and  (ii)  the  entire  Interest  of  the  Member  is
Transferred  to a single  transferee  or,  after the Transfer of a portion of an
Interest,  the  balance of the  Capital  Account of each of the  transferee  and
transferor is not less than $150,000.  Any transferee  that acquires an Interest
by operation of law as the result of the death, divorce, bankruptcy,  insolvency
or  dissolution of a Member or otherwise,  shall be entitled to the  allocations
and  distributions  allocable to the  Interest so acquired and to Transfer  such
Interest  in  accordance  with the  terms of this  Agreement,  but  shall not be
entitled  to the other  rights of a Member  unless  and  until  such  transferee
becomes  a  substituted  Member.  If a Member  transfers  an  Interest  with the
approval of the Board of Managers, the Board of Managers shall promptly take all
necessary actions so that the transferee to whom such Interest is transferred is
admitted to the Company as a Member.  Each Member  effecting a Transfer  and its
transferee  agree to pay all expenses,  including  attorneys'  and  accountants'
fees, incurred by the Company in connection with such Transfer.

     (c)  Each  Member  shall  indemnify  and hold  harmless  the  Company,  the
Managers,  the  Adviser,  each other Member and any  Affiliate of the  foregoing
against all losses, claims, damages, liabilities,  costs and expenses (including
legal or other expenses  incurred in investigating or defending against any such
losses, claims, damages, liabilities, costs and expenses or any judgments, fines
and amounts  paid in  settlement),  joint or several,  to which such persons may
become subject by reason of or arising from (i) any Transfer made by such Member
in violation of this Section 4.4 and (ii) any  misrepresentation  by such Member
in connection with any such Transfer.

     4.5  Transfer of Interests of Special Advisory Member.

          The  Adviser may not  Transfer  its  Interest as the Special  Advisory
          Member.


                                      A-19
<PAGE>


     4.6  Repurchase of Interests.

     (a) Except as  otherwise  provided  in this  Agreement,  no Member or other
person  holding an Interest or portion  thereof shall have the right to withdraw
or tender to the Company for repurchase  that Interest or portion  thereof.  The
Board of Managers from time to time,  in its complete and  exclusive  discretion
and on such terms and conditions as it may  determine,  may cause the Company to
repurchase  Interests or portions thereof pursuant to written tenders.  However,
the Company shall not offer to  repurchase  Interests on more than two occasions
during any one Fiscal Year  unless it has  received an opinion of counsel to the
effect  that  such  more  frequent  offers  would  not  cause  any  adverse  tax
consequences to the Company or the Members.  In determining whether to cause the
Company to repurchase Interests or portions thereof pursuant to written tenders,
the Board of Managers  shall  consider the  recommendation  of the Adviser,  and
shall also consider the following factors, among others:

          (1)  whether  any  Members  have  requested  to  tender  Interests  or
               portions thereof to the Company;

          (2)  the liquidity of the Company's assets;

          (3)  the  investment  plans and working  capital  requirements  of the
               Company;

          (4)  the  relative  economies of scale with respect to the size of the
               Company;

          (5)  the history of the Company in repurchasing  Interests or portions
               thereof;

          (6)  the economic condition of the securities markets; and

          (7)  the anticipated tax  consequences of any proposed  repurchases of
               Interests or portions thereof.

The Board of  Managers  shall  cause the  Company  to  repurchase  Interests  or
portions  thereof  pursuant to written tenders only on terms fair to the Company
and to all Members or one or more classes of Members  (including persons holding
Interests acquired from Members), as applicable.

     (b) A Member who tenders  for  repurchase  only a portion of such  Member's
Interest  shall be required to maintain a capital  account  balance equal to the
greater of: (i) $150,000, net of the amount of the Incentive Allocation, if any,
that is to be debited from the capital account of the member and credited to the
Special  Advisory Member Account of the Adviser on the date of expiration of the
tender  offer or would be so  debited if such date of  expiration  were a day on
which an incentive allocation was made (the "Tentative Incentive Allocation") or
such lesser  amount as may be permitted  by the Board of  Managers;  or (ii) the
amount of the Tentative  Incentive  Allocation,  if any. If a Member  tenders an
amount that would cause the Member's  capital  account balance to fall below the
required  minimum,  the  Company  reserves  the right to reduce the amount to be
purchased from such Member so that the required minimum balance is maintained.


                                      A-20
<PAGE>


     (c) The Adviser may tender its Interest or a portion thereof as a Member or
Special Advisory Member of the Company under Section 4.6(a) hereof.

     (d) If the  Adviser's  status as  Special  Advisory  Member  is  terminated
pursuant   to  Section   4.1   hereof,   it  (or  its  trustee  or  other  legal
representative)  may, by written notice to the Board of Managers  within 60 days
of the effective date of such termination,  tender to the Company for repurchase
all or any portion of its Special Advisory  Account.  Not later than thirty (30)
days after the receipt of such  notice,  the Board of Managers  shall cause such
tendered  portion  of the  Special  Advisory  Account to be  repurchased  by the
Company for cash.

     (e) The Board of Managers may cause the Company to  repurchase  an Interest
or portion  thereof of a Member or any person  acquiring  an Interest or portion
thereof  from or  through  a Member  in the  event  that the  Board of  Managers
determines or has reason to believe that:

          (1)  such an  Interest  or portion  thereof  has been  transferred  in
               violation  of Section 4.4 hereof,  or such an Interest or portion
               thereof  has  vested  in any  person by  operation  of law as the
               result  of  the  death,  divorce,   dissolution,   bankruptcy  or
               incompetency of a Member;

          (2)  ownership  of such an Interest  by a Member or other  person will
               cause the Company to be in violation of, or require  registration
               of any Interest or portion  thereof under, or subject the Company
               to additional  registration or regulation  under,  the securities
               laws of the United States or any other relevant jurisdiction;

          (3)  continued  ownership  of  such  an  Interest  may be  harmful  or
               injurious  to the  business or  reputation  of the  Company,  the
               Managers or the Adviser, or may subject the Company or any of the
               Members  to  an  undue  risk  of  adverse  tax  or  other  fiscal
               consequences;

          (4)  any of the  representations  and  warranties  made by a Member in
               connection with the acquisition of an Interest or portion thereof
               was not true when made or has ceased to be true; or

          (5)  it would be in the best  interests of the Company,  as determined
               by the Board of  Managers  in its  absolute  discretion,  for the
               Company to repurchase such an Interest or portion thereof.

     (f)  Repurchases  of Interests or portions  thereof by the Company shall be
payable promptly after the expiration date of such repurchase in accordance with
the terms of the Company's repurchase offer. Payment of the purchase price shall
consist of: (i) cash in an aggregate amount equal to such percentage,  as may be
determined by the Board of Managers,  of the estimated unaudited net asset value
of Interests  repurchased by the Company determined as of the expiration date of
such  repurchase  (the "Cash  Payment");  and, if  determined to be necessary or
appropriate  by the Board of Managers,  (ii) a  promissory  note  entitling  the
holder thereof to a contingent  payment equal to the excess,  of any, of (x) the
net asset value of the Interests repurchased by the Company as of the expiration
date of such repurchases,  determined based on the audited financial  statements
of the Company for the Fiscal Year in which such repurchases were


                                      A-21
<PAGE>


effective, over (y) the Cash Payment.  Notwithstanding anything in the foregoing
to the contrary,  the Board of Managers,  in its discretion,  may pay all or any
portion of the purchase price in marketable  Securities  (or any  combination of
marketable  Securities  and cash) having a value,  determined  as of the date of
repurchase,  equal to the amount to be repurchased. All repurchases of Interests
shall be subject to any and all  conditions  as the Board of Managers may impose
in its sole  discretion.  The amount due to any Member whose Interest or portion
thereof  is  repurchased  shall be equal to the value of such  Member's  Capital
Account  or  portion  thereof,  as  applicable,  as of  the  effective  date  of
repurchase,  after giving effect to all  allocations to be made to such Member's
Capital Account as of such date.

                      ------------------------------------

                                    ARTICLE V

                                     CAPITAL

                      ------------------------------------

     5.1  Contributions to Capital.

     (a) The minimum  initial  contribution of each Member to the capital of the
Company shall be such amount as the Board of Managers,  in its  discretion,  may
determine from time to time,  but in no event shall be less than  $150,000.  The
amount of the initial contribution of each Member shall be recorded on the books
and records of the Company upon  acceptance as a contribution  to the capital of
the Company. The Managers shall not be entitled to make voluntary  contributions
of capital to the  Company as Managers of the  Company,  but may make  voluntary
contributions  to the capital of the  Company as  Members.  The Adviser may make
voluntary contributions to the capital of the Company as a Member.

     (b)  The  Members  and  the  Adviser,  as a  Member,  may  make  additional
contributions to the capital of the Company of at least $25,000, effective as of
such times as the Board of Managers, in its discretion,  may permit,  subject to
Section 2.7 hereof,  but no Member  shall be  obligated  to make any  additional
contribution  to the  capital of the  Company  except to the extent  provided in
Section 5.7 hereof.

     (c) Except as otherwise permitted by the Board of Managers, (i) initial and
any additional  contributions  to the capital of the Company by any Member shall
be  payable in cash or in such  Securities  that the Board of  Managers,  in its
absolute  discretion,  may agree to accept  on behalf of the  Company,  and (ii)
initial  and any  additional  contributions  in cash shall be payable in readily
available funds at the date of the proposed acceptance of the contribution.  The
Company  shall charge each Member  making a  contribution  in  Securities to the
capital of the Company such amount as may be determined by the Board of Managers
not  exceeding 2% of the value of such  contribution  in order to reimburse  the
Company  for any costs  incurred  by the  Company  by reason of  accepting  such
Securities,  and any such charge  shall be due and  payable by the  contributing
Member in full at the time the  contribution  to the  capital of the  Company to
which such charges relate is due. The value of contributed  Securities  shall be
determined in accordance with Section 7.3 hereof as of the date of contribution.


                                      A-22
<PAGE>


     (d) The minimum initial and additional  contributions  set forth in (a) and
(b) of this Section 5.1 may be reduced by the Board of Managers.

     5.2 Rights of Members to Capital.

     No Member shall be entitled to interest on any  contribution to the capital
of the Company, nor shall any Member be entitled to the return of any capital of
the Company  except (i) upon the  repurchase  by the Company of a part or all of
such  Member's  Interest  pursuant to Section 4.6 hereof,  (ii)  pursuant to the
provisions  of  Section  5.7(c)  hereof  or (iii)  upon the  liquidation  of the
Company's  assets pursuant to Section 6.2 hereof.  No Member shall be liable for
the  return of any such  amounts.  No  Member  shall  have the right to  require
partition  of the  Company's  property or to compel any sale or appraisal of the
Company's assets.

     5.3 Capital Accounts.

     (a) The Company shall maintain a separate Capital Account for each Member.

     (b) Each Member's  Capital  Account shall have an initial  balance equal to
the amount of cash and the value of any  Securities  (determined  in  accordance
with Section 7.3 hereof)  constituting such Member's initial contribution to the
capital of the Company.

     (c) Each Member's  Capital Account shall be increased by the sum of (i) the
amount of cash and the value of any Securities  (determined  in accordance  with
Section 7.3 hereof) constituting additional  contributions by such Member to the
capital of the Company permitted  pursuant to Section 5.1 hereof,  plus (ii) all
amounts  credited to such  Member's  Capital  Account  pursuant to Sections  5.4
through 5.7 or 5.9 hereof.

     (d) Each  Member's  Capital  Account shall be reduced by the sum of (i) the
amount of any repurchase of the Interest,  or portion thereof, of such Member or
distributions  to such Member pursuant to Sections 4.6, 5.11 or 6.2 hereof which
are not  reinvested,  plus (ii) any amounts debited against such Capital Account
pursuant to Sections 5.4 through 5.9 hereof.

     (e) The Company shall maintain a Special  Advisory  Account for the Adviser
in its capacity as Special  Advisory Member solely for purposes of receiving the
Incentive  Allocation  pursuant  to Section 5.8  hereof.  The  Special  Advisory
Account shall have an initial balance of zero.

     5.4  Allocation of Net Profit and Loss.

     As of the last day of each  Fiscal  Period,  any Net Profit or Net Loss for
the Fiscal  Period shall be allocated  among and credited to or debited  against
the  Capital  Accounts  of the  Members  in  accordance  with  their  respective
Investment Percentages for such Fiscal Period.

     5.5  Allocation of Insurance Premiums and Proceeds.

     (a) Any premiums payable by the Company for Insurance purchased pursuant to
Section  3.8(d)  hereof shall be  apportioned  evenly over each Fiscal Period or
portion  thereof  falling within the period to which such premiums  relate under
the terms of such  Insurance,  and the portion of the premiums so apportioned to
any Fiscal Period shall be allocated among and debited


                                      A-23
<PAGE>


against  the  Capital  Accounts  of each  Member who is a member of the  Company
during such Fiscal Period in accordance with such Member's Investment Percentage
for such Fiscal Period.

     (b) Proceeds,  if any, to which the Company may become entitled pursuant to
such Insurance shall be allocated among and credited to the Capital  Accounts of
each Member who is a member of the Company during the Fiscal Period in which the
event that gives rise to  recovery of proceeds  occurs in  accordance  with such
Member's Investment Percentage for such Fiscal Period.

     5.6  Allocation of Certain Withholding Taxes and Other Expenditures.

     (a) If the Company incurs a withholding  tax or other tax  obligation  with
respect to the share of Company income  allocable to any Member,  then the Board
of  Managers,  without  limitation  of any other  rights of the  Company  or the
Managers,  shall cause the amount of such  obligation to be debited  against the
Capital  Account of such Member when the Company pays such  obligation,  and any
amounts then or thereafter  distributable to such Member shall be reduced by the
amount of such  taxes.  If the  amount of such  taxes is  greater  than any such
distributable  amounts,  then such  Member and any  successor  to such  Member's
Interest  shall pay to the  Company  as a  contribution  to the  capital  of the
Company,  upon demand of the Board of Managers,  the amount of such excess.  The
Board of Managers  shall not be  obligated to apply for or obtain a reduction of
or exemption from  withholding  tax on behalf of any Member that may be eligible
for such reduction or exemption;  provided,  that in the event that the Board of
Managers  determines  that a Member is eligible for a refund of any  withholding
tax,  the Board of Managers  may,  at the  request  and expense of such  Member,
assist such Member in applying for such refund.

     (b)  Except  as  otherwise  provided  for  in  this  Agreement  and  unless
prohibited  by the 1940 Act, any  expenditures  payable by the  Company,  to the
extent  determined  by the Board of  Managers  to have been paid or  withheld on
behalf of, or by reason of particular  circumstances  applicable to, one or more
but fewer than all of the  Members,  shall be  charged to only those  Members on
whose behalf such payments are made or whose particular  circumstances gave rise
to such  payments.  Such charges  shall be debited from the Capital  Accounts of
such  Members as of the close of the Fiscal  Period  during which any such items
were paid or accrued by the Company.

     5.7  Reserves.

     (a)  Appropriate  reserves may be created,  accrued and charged against Net
Assets and  proportionately  against  the  Capital  Accounts  of the Members for
contingent  liabilities,  if any, as of the date any such  contingent  liability
becomes  known to the Adviser or the Board of Managers,  such  reserves to be in
the amounts that the Board of Managers, in its sole discretion,  deems necessary
or  appropriate.  The Board of Managers may increase or reduce any such reserves
from  time to time by  such  amounts  as the  Board  of  Managers,  in its  sole
discretion,  deems necessary or appropriate.  The amount of any such reserve, or
any increase or decrease therein, shall be proportionately  charged or credited,
as appropriate,  to the Capital Accounts of those parties who are Members at the
time when such reserve is created,  increased or decreased,  as the case may be;
provided,  however,  that if any such individual  reserve item,  adjusted by any
increase therein, exceeds the lesser of $500,000 or 1% of the aggregate value of
the Capital Accounts of all such Members, the amount of such reserve,  increase,
or decrease shall instead be charged or credited to


                                      A-24
<PAGE>


those  parties  who were  Members  at the time,  as  determined  by the Board of
Managers,  in its sole  discretion,  of the act or  omission  giving rise to the
contingent  liability  for which  the  reserve  was  established,  increased  or
decreased in proportion to their Capital Accounts at that time.

     (b) If at any time an amount is paid or received by the Company (other than
contributions  to the capital of the Company,  distributions  or  repurchases of
Interests or portions thereof) and such amount exceeds the lesser of $500,000 or
1% of the aggregate value of the Capital  Accounts of all Members at the time of
payment or receipt and such  amount was not  accrued or  reserved  for but would
nevertheless,  in accordance with the Company's accounting practices, be treated
as  applicable  to one or more prior Fiscal  Periods,  then such amount shall be
proportionately  charged or credited, as appropriate,  to those parties who were
Members during such prior Fiscal Period or Periods.

     (c) If any amount is required by  paragraph  (a) or (b) of this Section 5.7
to be  charged or  credited  to a party who is no longer a Member,  such  amount
shall be paid by or to such party,  as the case may be, in cash,  with  interest
from the date on which  the Board of  Managers  determines  that such  charge or
credit  is  required.  In the  case of a  charge,  the  former  Member  shall be
obligated to pay the amount of the charge,  plus interest as provided  above, to
the Company on demand;  provided,  however,  that (i) in no event shall a former
Member be  obligated  to make a payment  exceeding  the amount of such  Member's
Capital Account at the time to which the charge relates; and (ii) no such demand
shall be made after the  expiration  of three years since the date on which such
party ceased to be a Member.  To the extent that a former Member fails to pay to
the Company,  in full,  any amount  required to be charged to such former Member
pursuant  to  paragraph  (a)  or  (b),  whether  due to  the  expiration  of the
applicable limitation period or for any other reason whatsoever,  the deficiency
shall be charged  proportionately  to the Capital Accounts of the Members at the
time of the act or omission  giving  rise to the charge to the extent  feasible,
and otherwise proportionately to the Capital Accounts of the current Members.

     5.8  Incentive Allocation.

     (a) So long as the  Adviser  serves as the Special  Advisory  Member of the
Company,  the Incentive  Allocation shall be debited against the Capital Account
of each Member as of the last day of each Allocation Period with respect to such
Member and the amount so debited shall simultaneously be credited to the Special
Advisory  Account or,  subject to compliance  with the 1940 Act and the Advisers
Act, to the  Capital  Accounts of such  Members who are  directors,  officers or
employees of CIBC WM or its Affiliates, or with respect to which such directors,
officers or employees are the sole beneficial owners, as have been designated in
any written notice  delivered by the Adviser to the Board of Managers  within 90
days after the close of such Allocation Period.

     (b) By the last  business day of the month  following  the date on which an
Incentive  Allocation is made,  the Special  Advisory  Member may withdraw up to
100% of the Incentive  Allocation (computed on the basis of unaudited data) that
was  credited  to the  Special  Advisory  Account.  Within  30  days  after  the
completion  of the  audit  of the  books  of the  Company  for the year in which
allocations to the Special  Advisory  Account are made, the Company shall pay to
the  Special  Advisory  Member any  additional  amount of  Incentive  Allocation
determined to be owed to the Special Advisory Member based on the audit, and the
Special Advisory Member shall


                                      A-25
<PAGE>


pay to the Company any excess  amount of Incentive  Allocation  determined to be
owed to the Company.

     5.9  Allocation of Organizational Expenses.

     (a) As of the first Expense Allocation Date,  Organizational Expenses shall
be allocated  among and debited  against the Capital  Accounts of the Members in
accordance with their respective Capital  Percentages on such Expense Allocation
Date.

     (b)  As of  each  Expense  Allocation  Date  following  the  first  Expense
Allocation Date, all amounts previously debited against the Capital Account of a
Member  pursuant to this Section 5.9 on the preceding  Expense  Allocation  Date
will be credited  to the  Capital  Account of such  Member,  and  Organizational
Expenses  shall then be  re-allocated  among and  debited  against  the  Capital
Accounts of all Members in accordance with their respective Capital  Percentages
on such Expense Allocation Date.

     5.10 Tax Allocations.

     For each fiscal  year,  items of income,  deduction,  gain,  loss or credit
shall be allocated  for income tax purposes  among the Members in such manner as
to reflect  equitably  amounts  credited  or debited  to each  Member's  Capital
Account for the current and prior fiscal years (or relevant  portions  thereof).
Allocations  under this Section 5.10 shall be made pursuant to the principles of
Sections  704(b)  and 704(c) of the Code,  and in  conformity  with  Regulations
Sections  1.704-1(b)(2)(iv)(f),   1.704-1(b)(4)(i)  and  1.704-3(e)  promulgated
thereunder,  as  applicable,  or the  successor  provisions  to such Section and
Regulations.  Notwithstanding anything to the contrary in this Agreement,  there
shall be  allocated to the Members such gains or income as shall be necessary to
satisfy the  "qualified  income offset"  requirement of Treasury  Regulation ss.
1.704-1(b)(2)(ii)(d).

     If the Company realizes capital gains (including  short-term capital gains)
for Federal  income tax purposes  ("gains")  for any fiscal year during or as of
the end of which one or more  Positive  Basis Members (as  hereinafter  defined)
withdraw from the Company pursuant to Article IV, the Board of Managers,  unless
otherwise  determined by the Board of Managers,  in its sole  discretion,  shall
allocate  such gains as follows:  (i) to allocate such gains among such Positive
Basis  Members,  pro rata in proportion  to the  respective  Positive  Basis (as
hereinafter  defined) of each such Positive Basis Member,  until either the full
amount of such gains shall have been so allocated or the Positive  Basis of each
such Positive  Basis Member shall have been  eliminated and (ii) to allocate any
gains not so allocated to Positive  Basis  Members to the other  Members in such
manner as shall equitably reflect the amounts allocated to such Members' Capital
Accounts  pursuant to Section 5.4;  provided,  however,  that if, following such
fiscal year,  the Company  realizes gains from a sale of Securities the proceeds
of which are  designated  on the  Company's  books and  records as being used to
effect  payments of all or part of the  interest in the Company of any  Positive
Basis Member, there shall be allocated to any Positive Basis Member an amount of
such gains equal to the amount, if any, by which such Member's Positive Basis as
of the effective date of such Member's  withdrawal  exceeds the amount allocated
to such Member pursuant to clause (i) of this sentence.


                                      A-26
<PAGE>


     If the Company realizes capital losses (including long-term capital losses)
for Federal  income tax purposes  ("losses") for any fiscal year during or as of
the end of which one or more  Negative  Basis Members (as  hereinafter  defined)
withdraw from the Company pursuant to Article IV, the Board of Managers,  unless
otherwise  determined by the Board of Managers,  in its sole  discretion,  shall
allocate such losses as follows: (i) to allocate such losses among such Negative
Basis  Members,  pro rata in proportion  to the  respective  Negative  Basis (as
hereinafter  defined) of each such Negative Basis Member,  until either the full
amount of such losses shall have been so allocated or the Negative Basis of each
such Negative  Basis Member shall have been  eliminated and (ii) to allocate any
losses not so allocated to Negative  Basis  Members to the other Members in such
manner as shall equitably reflect the amounts allocated to such Members' Capital
Accounts  pursuant to Section 5.4;  provided,  however,  that if, following such
fiscal year, the Company  realizes losses from a sale of Securities the proceeds
of which are  designated  on the  Company's  books and  records as being used to
effect  payments of all or part of the  interest in the Company of any  Negative
Basis Member, there shall be allocated to any Negative Basis Member an amount of
such losses equal to the amount, if any by which such Member's Negative Basis as
of the effective date of such Member's  withdrawal  exceeds the amount allocated
to such Member pursuant to clause (i) of this sentence.

     As used herein,  (i) the term "Positive  Basis" shall mean, with respect to
any Member and as of any time of  calculation,  the amount by which its interest
in the  Company as of such time  exceeds its  "adjusted  tax basis," for Federal
income tax purposes,  in its interest in the Company as of such time (determined
without regard to any adjustments made to such "adjusted tax basis" by reason of
any transfer or assignment of such interest,  including by reason of death,  and
without  regard to such Member's  share of the  liabilities of the Company under
Section 752 of the Code),  and (ii) the term "Positive  Basis Member" shall mean
any Member who withdraws  from the Company and who has Positive  Basis as of the
effective date of its  withdrawal,  but such Member shall cease to be a Positive
Basis  Member at such time as it shall have  received  allocations  pursuant  to
clause (i) of the second  paragraph  of this  Section 5.10 equal to its Positive
Basis as of the effective date of its withdrawal.

     As used herein,  (i) the term "Negative  Basis" shall mean, with respect to
any Member and as of any time of  calculation,  the amount by which its interest
in the  Company  as of such  time is less than its  "adjusted  tax  basis,"  for
Federal  income tax  purposes,  in its  interest  in the Company as of such time
(determined  without regard to any adjustments made to such "adjusted tax basis"
by reason of any transfer or assignment of such interest, including by reason of
death,  and without  regard to such  Member's  share of the  liabilities  of the
Company  under  Section  752 of the  Code),  and (ii) the term  "Negative  Basis
Member"  shall  mean any  Member  who  withdraws  from the  Company  and who has
Negative Basis as of the effective date of its withdrawal, but such Member shall
cease to be a  Negative  Basis  Member  at such time as it shall  have  received
allocations pursuant to clause (i) of the third paragraph of this Section.  5.10
equal to its Negative Basis as of the effective date of its withdrawal.

     Notwithstanding  anything to the contrary in the foregoing,  if the Company
realizes  taxable  gains in any fiscal  year with  respect to which the  Special
Advisory Member is entitled to an Incentive Allocation under Section 5.8 hereof,
the Board of  Managers  (at the  request of the  Special  Advisory  Member)  may
specially allocate such gains to the Special Advisory


                                      A-27
<PAGE>


Member in an  amount  by which the  Incentive  Allocation  exceeds  the  Special
Advisory  Member's  "adjusted  tax  basis"  (determined  without  regard  to any
allocation to be made pursuant to this paragraph) in its interest in the Company
as of the time it withdraws  such  Incentive  Allocation.  The Special  Advisory
Member's  "adjusted tax basis",  for these  purposes,  shall be increased by any
amount of the Incentive Allocation  withdrawal that it elects to contribute as a
Member  to  the  Company  as of the  date  of the  withdrawal  of the  Incentive
Allocation.

     5.11 Distributions.

     (a) The  Board of  Managers,  in its sole  discretion,  may  authorize  the
Company to make distributions in cash at any time to all of the Members on a pro
rata basis in accordance with the Members' Investment Percentages.

     (b) The Board of Managers may withhold taxes from any  distribution  to any
Member to the  extent  required  by the Code or any other  applicable  law.  For
purposes of this Agreement, any taxes so withheld by the Company with respect to
any amount  distributed  by the  Company  to any Member  shall be deemed to be a
distribution  or  payment  to  such  Member,   reducing  the  amount   otherwise
distributable to such Member pursuant to this Agreement and reducing the Capital
Account of such Member.

     5.12 Foreign Withholding.

     Notwithstanding any provision of this Agreement to the contrary,  the Board
of  Managers  shall  withhold  and pay  over to the  Internal  Revenue  Service,
pursuant  to Section  1441,  1442,  1445 or 1446 of the Code,  or any  successor
provisions,  at such times as required  by such  Sections,  such  amounts as the
Company is required to withhold under such Sections, as from time to time are in
effect.  To the extent that a foreign  Member claims to be entitled to a reduced
rate of, or exemption  from,  U.S.  withholding  tax  pursuant to an  applicable
income tax treaty,  or otherwise,  the foreign Member shall furnish the Board of
Managers with such  information and forms as such foreign Member may be required
to complete  where  necessary  to comply  with any and all laws and  regulations
governing  the  obligations  of  withholding  tax agents.  Each  foreign  Member
represents and warrants that any such  information  and forms  furnished by such
foreign  Member shall be true and  accurate and agrees to indemnify  the Company
and each of the Members from any and all damages,  costs and expenses  resulting
from the filing of  inaccurate or incomplete  information  or forms  relating to
such withholding taxes.

     Any  amount of  withholding  taxes  withheld  and paid over by the Board of
Managers with respect to a foreign Member's  distributive share of the Company's
gross income,  income or gain shall be treated as a distribution to such foreign
Member and shall be charged against the Capital Account of such foreign Member.


                                      A-28
<PAGE>


                           --------------------------

                                   ARTICLE VI

                           DISSOLUTION AND LIQUIDATION

                           ---------------------------

     6.1  Dissolution.

     The Company shall be dissolved:

          (1)  upon the  affirmative  vote to  dissolve  the Company by: (i) the
               Board of Managers  or (ii)  Members  holding at least  two-thirds
               (2/3) of the  total  number of votes  eligible  to be cast by all
               Members;

          (2)  upon the  failure of Members  to elect a  successor  Manager at a
               meeting  called by the Adviser in accordance  with Section 2.6(c)
               hereof when no Manager  remains to continue  the  business of the
               Company;

          (3)  upon the  expiration of any two year period that commences on the
               date on which any Member has  submitted  a written  notice to the
               Company  requesting to tender its entire  Interest for repurchase
               by the Company if such Interest has not been  repurchased  by the
               Company;

          (4)  as required by operation of law.

Dissolution  of the Company  shall be effective on the later of the day on which
the event giving rise to the  dissolution  shall occur or the  conclusion of any
applicable  60 day period  during  which the Board of  Managers  and Members may
elect to continue the business of the Company as provided above, but the Company
shall not  terminate  until the assets of the Company  have been  liquidated  in
accordance with Section 6.2 hereof and the Certificate has been canceled.

     6.2 Liquidation of Assets.

     (a) Upon the  dissolution of the Company as provided in Section 6.1 hereof,
the Board of Managers shall promptly appoint the Administrator as the liquidator
and the Administrator shall liquidate the business and administrative affairs of
the  Company,  except  that if the  Board  of  Managers  does  not  appoint  the
Administrator  as the liquidator or the  Administrator is unable to perform this
function, a liquidator elected by Members holding a majority of the total number
of  votes  eligible  to be cast by all  Members  shall  promptly  liquidate  the
business  and  administrative  affairs of the  Company.  Net Profit and Net Loss
during the period of  liquidation  shall be  allocated  pursuant  to Section 5.4
hereof.  The proceeds  from  liquidation  (after  establishment  of  appropriate
reserves for contingencies in such amount as the Board of Managers or liquidator
shall  deem  appropriate  in  its  sole  discretion  as  applicable)   shall  be
distributed in the following manner:


                                      A-29
<PAGE>


          (1)  the  debts of the  Company,  other  than  debts,  liabilities  or
               obligations   to  Members,   and  the  expenses  of   liquidation
               (including legal and accounting  expenses  incurred in connection
               therewith), up to and including the date that distribution of the
               Company's  assets to the Members has been completed,  shall first
               be paid on a pro rata basis;

          (2)  such  debts,  liabilities  or  obligations  as are  owing  to the
               Members  shall next be paid in their order of seniority  and on a
               pro rata basis;

          (3)  The Special Advisory Member shall next be paid any balance in the
               Special  Advisory  Account  after giving  effect to the Incentive
               Allocation,  if any,  to be made  pursuant to Section 5.8 hereof;
               and

          (4)  the Members  shall next be paid on a pro rata basis the  positive
               balances of their respective Capital Accounts after giving effect
               to all allocations to be made to such Members'  Capital  Accounts
               for the  Fiscal  Period  ending on the date of the  distributions
               under this Section 6.2(a)(3).

     (b)  Anything in this  Section 6.2 to the  contrary  notwithstanding,  upon
dissolution  of the  Company,  the Board of  Managers  or other  liquidator  may
distribute ratably in kind any assets of the Company; provided, however, that if
any in-kind  distribution is to be made (i) the assets distributed in kind shall
be  valued  pursuant  to  Section  7.3  hereof  as of the  actual  date of their
distribution and charged as so valued and distributed against amounts to be paid
under Section 6.2(a) above, and (ii) any profit or loss attributable to property
distributed  in-kind  shall be  included  in the Net  Profit or Net Loss for the
Fiscal Period ending on the date of such distribution.

                          -----------------------------

                                   ARTICLE VII

                  ACCOUNTING, VALUATIONS AND BOOKS AND RECORDS

                          -----------------------------

     7.1  Accounting and Reports.

     (a) The Company  shall adopt for tax  accounting  purposes  any  accounting
method that the Board of Managers shall decide in its sole  discretion is in the
best  interests of the Company.  The Company's  accounts  shall be maintained in
U.S. currency.

     (b) After the end of each taxable  year,  the Company shall furnish to each
Member such information regarding the operation of the Company and such Member's
Interest as is necessary for Members to complete federal, state and local income
tax or information  returns and any other tax  information  required by federal,
state or local law.

     (c) Except as  otherwise  required by the 1940 Act, or as may  otherwise be
permitted by rule,  regulation  or order,  within 60 days after the close of the
period for which a report  required under this Section 7.1(c) is being made, the
Company shall  furnish to each Member a semi-annual  report and an annual report
containing the information required by such


                                      A-30
<PAGE>


Act.  The Company  shall cause  financial  statements  contained  in each annual
report  furnished  hereunder to be  accompanied  by a certificate of independent
public  accountants  based upon an audit  performed in accordance with generally
accepted  accounting  principles.  The  Company  may furnish to each Member such
other periodic reports as it deems necessary or appropriate in its discretion.

     7.2  Determinations by the Board of Managers.

     (a) All matters  concerning  the  determination  and  allocation  among the
Members of the  amounts to be  determined  and  allocated  pursuant to Article V
hereof,  including  any  taxes  thereon  and  accounting  procedures  applicable
thereto,  shall be determined by the Board of Managers unless  specifically  and
expressly otherwise provided for by the provisions of this Agreement or required
by law, and such  determinations  and allocations  shall be final and binding on
all the Members.

     (b) The Board of Managers may make such  adjustments to the  computation of
Net Profit or Net Loss, the Allocation Change with respect to any Member, or any
components  comprising  any of the  foregoing  as it  considers  appropriate  to
reflect  fairly and  accurately  the  financial  results of the  Company and the
intended allocation thereof among the Members.

     7.3  Valuation of Assets.

     (a) Except as may be required by the 1940 Act, the Board of Managers  shall
value or have  valued any  Securities  or other  assets and  liabilities  of the
Company as of the close of  business  on the last day of each  Fiscal  Period in
accordance with such valuation  procedures as shall be established  from time to
time by the Board of Managers and which conform to the  requirements of the 1940
Act. In  determining  the value of the assets of the Company,  no value shall be
placed on the goodwill or name of the  Company,  or the office  records,  files,
statistical  data or any similar  intangible  assets of the Company not normally
reflected in the  Company's  accounting  records,  but there shall be taken into
consideration any items of income earned but not received, expenses incurred but
not yet paid, liabilities,  fixed or contingent,  and any other prepaid expenses
to the extent not otherwise reflected in the books of account,  and the value of
options or commitments to purchase or sell Securities or commodities pursuant to
agreements entered into prior to such valuation date.

     (b) The value of  Securities  and other  assets of the  Company and the net
worth of the Company as a whole determined pursuant to this Section 7.3 shall be
conclusive and binding on all of the Members and all parties claiming through or
under them.


                                      A-31
<PAGE>


                           ---------------------------

                                  ARTICLE VIII

                            MISCELLANEOUS PROVISIONS

                          -----------------------------

     8.1  Amendment of Limited Liability Company Agreement.

     (a) Except as otherwise provided in this Section 8.1, this Agreement may be
amended,  in whole or in part,  with:  (i) the approval of the Board of Managers
(including the vote of a majority of the  Independent  Managers,  if required by
the 1940 Act) and (ii) if required by the 1940 Act,  the approval of the Members
by such vote as is required by the 1940 Act.

     (b) Any amendment that would:

          (1)  increase the obligation of a Member to make any  contribution  to
               the capital of the Company;

          (2)  reduce  the  Capital  Account  of a Member  or  Special  Advisory
               Account other than in accordance with Article V; or

          (3)  modify the events causing the dissolution of the Company;

may be made only if (i) the written  consent of each Member  adversely  affected
thereby is obtained  prior to the  effectiveness  thereof or (ii) such amendment
does not become  effective until (A) each Member has received  written notice of
such amendment and (B) any Member  objecting to such amendment has been afforded
a reasonable  opportunity  (pursuant to such  procedures as may be prescribed by
the Board of  Managers)  to tender its entire  Interest  for  repurchase  by the
Company.

     (c) The power of the Board of Managers to amend this  Agreement at any time
without the consent of the other  Members as set forth in paragraph  (a) of this
Section 8.1 shall specifically include the power to:

          (1)  restate this Agreement  together with any amendments  hereto that
               have been duly adopted in accordance herewith to incorporate such
               amendments in a single, integrated document;

          (2)  amend this Agreement  (other than with respect to the matters set
               forth in  Section  8.1(b)  hereof)  to cure any  ambiguity  or to
               correct  or  supplement   any   provision   hereof  that  may  be
               inconsistent with any other provision hereof,  provided that such
               action does not adversely  affect the rights of any Member in any
               material respect; and

          (3)  amend this  Agreement to make such changes as may be necessary or
               advisable  to ensure that the  Company  will not be treated as an
               association  taxable as a  corporation  or as a  publicly  traded
               partnership as defined in Section 7704(b) of the Code.


                                      A-32
<PAGE>


     (d) The Board of  Managers  shall cause  written  notice to be given of any
amendment to this Agreement  (other than any amendment of the type  contemplated
by clause (1) of Section 8.1(c)  hereof) to each Member,  which notice shall set
forth (i) the text of the  amendment  or (ii) a summary  thereof and a statement
that the text thereof will be furnished to any Member upon request.

     8.2  Special Power of Attorney.

     (a) Each Member hereby  irrevocably  makes,  constitutes  and appoints each
Manager, acting severally,  and any liquidator of the Company's assets appointed
pursuant  to Section 6.2 hereof  with full power of  substitution,  the true and
lawful  representatives  and  attorneys-in-fact  of, and in the name,  place and
stead of, such Member, with the power from time to time to make, execute,  sign,
acknowledge, swear to, verify, deliver, record, file and/or publish:

          (1)  any amendment to this Agreement that complies with the provisions
               of this  Agreement  (including  the  provisions  of  Section  8.1
               hereof);

          (2)  any amendment to the Certificate  required because this Agreement
               is  amended,  including,  without  limitation,  an  amendment  to
               effectuate any change in the membership of the Company; and

          (3)  all such other  instruments,  documents and certificates that, in
               the  opinion of legal  counsel to the  Company,  may from time to
               time be required by the laws of the United States of America, the
               State of Delaware or any other  jurisdiction in which the Company
               shall determine to do business,  or any political  subdivision or
               agency thereof,  or that such legal counsel may deem necessary or
               appropriate  to  effectuate,  implement  and  continue  the valid
               existence  and  business  of the  Company as a limited  liability
               company under the Delaware Act.

     (b) Each Member is aware that the terms of this  Agreement  permit  certain
amendments  to this  Agreement  to be effected and certain  other  actions to be
taken or  omitted  by or with  respect  to the  Company  without  such  Member's
consent.  If an amendment to the  Certificate or this Agreement or any action by
or with  respect  to the  Company is taken in the  manner  contemplated  by this
Agreement,  each Member agrees that,  notwithstanding  any  objection  that such
Member may assert with respect to such action, the  attorneys-in-fact  appointed
hereby  are  authorized  and  empowered,  with full  power of  substitution,  to
exercise  the  authority  granted  above in any manner that may be  necessary or
appropriate  to permit such  amendment  to be made or action  lawfully  taken or
omitted.  Each  Member  is  fully  aware  that  each  Member  will  rely  on the
effectiveness  of this  special  power-of-attorney  with a view  to the  orderly
administration of the affairs of the Company.

     (c) This  power-of-attorney is a special  power-of-attorney  and is coupled
with an interest in favor of each of the Managers and as such:

          (1)  shall be  irrevocable  and  continue  in full  force  and  effect
               notwithstanding  the subsequent  death or incapacity of any party


                                      A-33
<PAGE>


               granting  this  power-of-attorney,   regardless  of  whether  the
               Company or Board of Managers shall have had notice thereof; and

          (2)  shall survive the delivery of a Transfer by a Member of the whole
               or any portion of such Member's  Interest,  except that where the
               transferee thereof has been approved by the Board of Managers for
               admission  to  the  Company  as  a   substituted   Member,   this
               power-of-attorney  given  by the  transferor  shall  survive  the
               delivery of such  assignment for the sole purpose of enabling the
               Board of Managers to execute, acknowledge and file any instrument
               necessary to effect such substitution.

     8.3  Notices.

     Notices which may or are required to be provided under this Agreement shall
be made, if to a Member,  by regular mail, or if to the Board of Managers or the
Adviser,  by  hand  delivery,   registered  or  certified  mail  return  receipt
requested,  commercial  courier  service,  telex  or  telecopier,  and  shall be
addressed to the respective  parties  hereto at their  addresses as set forth in
the books  and  records  of the  Company.  Notices  shall be deemed to have been
provided when delivered by hand, on the date indicated as the date of receipt on
a return  receipt or when received if sent by regular mail,  commercial  courier
service,  telex or  telecopier.  A  document  that is not a  notice  and that is
required to be provided  under this  Agreement by any party to another party may
be delivered by any reasonable means.

     8.4  Agreement Binding Upon Successors and Assigns.

     This  Agreement  shall be  binding  upon and  inure to the  benefit  of the
parties  hereto and their  respective  heirs,  successors,  assigns,  executors,
trustees or other legal  representatives,  but the rights and obligations of the
parties hereunder may not be Transferred or delegated except as provided in this
Agreement  and any  attempted  Transfer or  delegation  thereof that is not made
pursuant to the terms of this Agreement shall be void.

     8.5  Applicability of 1940 Act and Form N-2.

     The parties hereto  acknowledge that this Agreement is not intended to, and
does not, set forth the substantive provisions contained in the 1940 Act and the
Form N-2 that affect numerous  aspects of the conduct of the Company's  business
and of the rights,  privileges and obligations of the Members. Each provision of
this Agreement shall be subject to and  interpreted in a manner  consistent with
the applicable provisions of the 1940 Act and the Form N-2.

     8.6  Choice of Law; Arbitration.

     (a)  Notwithstanding  the place where this Agreement may be executed by any
of the  parties  hereto,  the  parties  expressly  agree  that all the terms and
provisions  hereof shall be  construed  under the laws of the State of Delaware,
including the Delaware Act without  regard to the conflict of law  principles of
such State.


                                      A-34
<PAGE>


     (b)  Unless  otherwise  agreed in  writing,  each  Member  and the  Special
Advisory Member agree to submit all controversies arising between Members or one
or more Members or the Special Advisory Member and the Company to arbitration in
accordance with the provisions set forth below and understands that:

          (1)  arbitration is final and binding on the parties;

          (2)  they are waiving their right to seek remedies in court, including
               the right to a jury trial;

          (3)  pre-arbitration discovery is generally more limited and different
               from court proceedings;

          (4)  the  arbitrator's  award  is  not  required  to  include  factual
               findings or legal  reasoning  and a party's right to appeal or to
               seek  modification of rulings by arbitrators is strictly limited;
               and

          (5)  the panel of  arbitrators  will  typically  include a minority of
               arbitrators  who  were  or are  affiliated  with  the  securities
               industry.

     (c) All controversies  that may arise among Members and one or more Members
or the Special  Advisory Member and the Company  concerning this Agreement shall
be determined  by  arbitration  in New York City in accordance  with the Federal
Arbitration Act, to the fullest extent  permitted by law. Any arbitration  under
this Agreement shall be determined  before and in accordance with the rules then
obtaining  of either  the New York  Stock  Exchange,  Inc.  (the  "NYSE") or the
National Association of Securities Dealers,  Inc. (the "NASD"), as the Member or
Special Advisory Member or entity  instituting the arbitration may elect. If the
NYSE or NASD does not accept the arbitration for consideration,  the arbitration
shall be  submitted  to,  and  determined  in  accordance  with the  rules  then
obtaining of, the Center for Public Resources,  Inc. in New York City.  Judgment
on any award of any such  arbitration may be entered in the Supreme Court of the
State of New York or in any other  court  having  jurisdiction  of the person or
persons against whom such award is rendered.  Any notice of such  arbitration or
for the  confirmation  of any award in any  arbitration  shall be  sufficient if
given in accordance  with the provisions of this  Agreement.  Each Member agrees
that the  determination of the arbitrators  shall be binding and conclusive upon
them.

     (d) No  Member  shall  bring  a  putative  or  certified  class  action  to
arbitration,  nor seek to enforce any pre-dispute  arbitration agreement against
any  person who has  initiated  in court a putative  class  action;  or who is a
member of a putative  class who has not opted out of the class  with  respect to
any  claims  encompassed  by the  putative  class  action  until:  (i) the class
certification is denied;  or (ii) the class is decertified;  or (iii) the Member
is  excluded  from the  class by the  court.  Such  forbearance  to  enforce  an
agreement  to arbitrate  shall not  constitute a waiver of any rights under this
Agreement except to the extent stated herein.


                                      A-35
<PAGE>


     8.7  Not for Benefit of Creditors.

     The  provisions of this  Agreement are intended only for the  regulation of
relations among past, present and future Members, Managers, the Special Advisory
Member and the  Company.  This  Agreement  is not  intended  for the  benefit of
non-Member  creditors  and no rights are granted to non-Member  creditors  under
this Agreement.

     8.8  Consents.

     Any and all consents,  agreements or approvals provided for or permitted by
this Agreement  shall be in writing and a signed copy thereof shall be filed and
kept with the books of the Company.

     8.9  Merger and Consolidation.

     (a) The Company may merge or  consolidate  with or into one or more limited
liability  companies  formed under the Delaware Act or other  business  entities
pursuant to an agreement of merger or  consolidation  that has been  approved in
the manner contemplated by Section 18-209(b) of the Delaware Act.

     (b)  Notwithstanding  anything to the contrary contained  elsewhere in this
Agreement,  an agreement of merger or consolidation  approved in accordance with
Section  18-209(b) of the  Delaware Act may, to the extent  permitted by Section
18-209(f) of the Delaware Act, (i) effect any amendment to this Agreement,  (ii)
effect the adoption of a new limited liability company agreement for the Company
if it is the surviving or resulting  limited  liability company in the merger or
consolidation,  or (iii) provide that the limited liability company agreement of
any other  constituent  limited liability company to the merger or consolidation
(including a limited  liability  company formed for the purpose of  consummating
the merger or consolidation) shall be the limited liability company agreement of
the surviving or resulting limited liability company.

     8.10 Pronouns.

     All pronouns shall be deemed to refer to the masculine,  feminine,  neuter,
singular  or  plural,  as the  identity  of  the  person  or  persons,  firm  or
corporation may require in the context thereof.

     8.11 Confidentiality.

     (a) A Member may obtain from the Company  such  information  regarding  the
affairs of the Company as is just and reasonable under the Delaware Act, subject
to reasonable  standards  (including  standards  governing what  information and
documents are to be furnished,  at what time and location and at whose  expense)
established by the Board of Managers.

     (b) Each Member covenants that, except as required by applicable law or any
regulatory  body, it will not divulge,  furnish or make  accessible to any other
person the name and/or address (whether  business,  residence or mailing) of any
Member  (collectively,  "Confidential  Information")  without the prior  written
consent of the Board of  Managers,  which  consent  may be  withheld in its sole
discretion.


                                      A-36
<PAGE>


     (c) Each  Member  recognizes  that in the event that this  Section  8.11 is
breached by any Member or any of its principals,  partners,  members, directors,
officers,  employees or agents or any of its  affiliates,  including any of such
affiliates' principals,  partners,  members, directors,  officers,  employees or
agents,  irreparable  injury may  result to the  non-breaching  Members  and the
Company.  Accordingly,  in addition  to any and all other  remedies at law or in
equity to which the non-breaching Members and the Company may be entitled,  such
Members shall also have the right to obtain equitable relief, including, without
limitation,  injunctive  relief,  to  prevent  any  disclosure  of  Confidential
Information,  plus  reasonable  attorneys'  fees and other  litigation  expenses
incurred in connection therewith.  In the event that any non-breaching Member or
the Company  determines  that any of the other Members or any of its principals,
partners,  members,  directors,  officers,  employees  or  agents  or any of its
affiliates,  including any of such affiliates'  principals,  partners,  members,
directors,  officers, employees or agents should be enjoined from or required to
take any action to prevent the disclosure of Confidential  Information,  each of
the other  non-breaching  Members  agrees  to  pursue in a court of  appropriate
jurisdiction such injunctive relief.

     8.12 Certification of Non-Foreign Status.

     Each Member or transferee of an Interest from a Member shall certify,  upon
admission  to the  Company and at such other  times  thereafter  as the Board of
Managers may request, whether such Member is a "United States Person" within the
meaning  of  Section  7701(a)(30)  of the Code on forms  to be  provided  by the
Company,  and shall  notify  the  Company  within 30 days of any  change in such
Member's status.  Any Member who shall fail to provide such  certification  when
requested  to do so by the Board of  Managers  may be  treated  as a  non-United
States Person for purposes of U.S. federal tax withholding.

     8.13 Severability.

     If any  provision of this  Agreement is  determined by a court of competent
jurisdiction  not to be enforceable  in the manner set forth in this  Agreement,
each Member agrees that it is the  intention of the Members that such  provision
should be enforceable to the maximum extent  possible under  applicable  law. If
any provisions of this Agreement are held to be invalid or  unenforceable,  such
invalidation or unenforceability shall not affect the validity or enforceability
of any other provision of this Agreement (or portion thereof).

     8.14 Filing of Returns.

     The Board of Managers or its  designated  agent shall  prepare and file, or
cause the accountants of the Company to prepare and file, a Federal  information
tax return in  compliance  with Section 6031 of the Code and any required  state
and local income tax and information returns for each tax year of the Company.

     8.15 Tax Matters Partner.

     (a) A Manager who is a Member shall be designated  on the Company's  annual
Federal income tax return, and have full powers and responsibilities, as the Tax
Matters  Partner of the Company for purposes of Section  6231(a)(7) of the Code.
In the event  that no  Manager  is a Member,  a Member  shall be so  designated.
Should any Member be  designated  as the Tax  Matters  Partner  for the  Company
pursuant to Section 6231(a)(7) of the Code, it shall, and each


                                      A-37
<PAGE>


Member  hereby  does,  to the fullest  extent  permitted  by law,  delegate to a
Manager  selected  by the  Board  of  Managers  all of its  rights,  powers  and
authority to act as such Tax Matters Partner and hereby constitutes and appoints
such Manager as its true and lawful  attorney-in-fact,  with power to act in its
name and on its  behalf,  including  the  power to act  through  such  agents or
attorneys as it shall elect or appoint, to receive notices, to make, execute and
deliver,  swear to,  acknowledge  and file any and all  reports,  responses  and
notices,  and to do any and all things  required or advisable,  in the Manager's
judgment, to be done by such a Tax Matters Partner. Any Member designated as the
Tax Matters  Partner for the Company under Section  6231(a)(7) of the Code shall
be indemnified and held harmless by the Company from any and all liabilities and
obligations that arise from or by reason of such designation.

     (b) Each person (for  purposes of this  Section  8.15,  called a "Pass-Thru
Partner")  that holds or  controls  an interest as a Member on behalf of, or for
the  benefit  of,  another  person or  persons,  or which  Pass-Thru  Partner is
beneficially owned (directly or indirectly) by another person or persons, shall,
within 30 days  following  receipt  from the Tax Matters  Partner of any notice,
demand, request for information or similar document, convey such notice or other
document  in  writing to all  holders of  beneficial  interests  in the  Company
holding such interests through such Pass-Thru Partner.  In the event the Company
shall be the  subject  of an  income  tax audit by any  Federal,  state or local
authority,  to the extent the  Company is treated as an entity for  purposes  of
such audit,  including  administrative  settlement and judicial review,  the Tax
Matters  Partner shall be authorized to act for, and its decision shall be final
and binding upon, the Company and each Member thereof.  All expenses incurred in
connection  with any such audit,  investigation,  settlement  or review shall be
borne by the Company.

     8.16 Section 754 Election.

     In the  event of a  distribution  of  Company  property  to a Member  or an
assignment  or other  transfer  (including by reason of death) of all or part of
the interest of a Member in the Company,  at the request of a Member,  the Board
of  Managers,  in its  discretion,  may cause the Company to elect,  pursuant to
Section 754 of the Code, or the  corresponding  provision of subsequent  law, to
adjust the basis of the Company  property as provided by Sections 734 and 743 of
the Code.


                                      A-38
<PAGE>


     EACH OF THE  UNDERSIGNED  ACKNOWLEDGES  HAVING READ THIS  AGREEMENT  IN ITS
ENTIRETY BEFORE SIGNING,  INCLUDING THE PRE-DISPUTE ARBITRATION CLAUSE SET FORTH
IN SECTION 8.6 AND THE CONFIDENTIALITY CLAUSE SET FORTH IN SECTION 8.11.

     IN WITNESS  WHEREOF,  the parties hereto have executed this Agreement as of
the day and year first above written.

MANAGERS:


/s/                                     /s/
- --------------------------------------  ----------------------------------------
Sol Gittleman                           Luis Rubio


/s/                                     /s/
- --------------------------------------  ----------------------------------------
Janet L. Schinderman                    Howard M. Singer


ORGANIZATIONAL MEMBER:


/s/
- --------------------------------------
Janet L. Schinderman


MEMBERS:

Each person who shall sign a Member  Signature Page and who shall be accepted by
the Board of Managers to the Company as a Member.


SPECIAL ADVISORY MEMBER:

CIBC OPPENHEIMER ADVISERS, L.L.C.

By:    CIBC World Markets Corp.
        Managing Member


By:  /s/
     ---------------------------------
       Name:  Howard M. Singer
       Title: Managing Director


                                      A-39
<PAGE>


                                                                      APPENDIX B
                             PERFORMANCE INFORMATION

     The  Company's  investment  adviser (the  "Adviser")  employs an investment
program for the Company that is substantially  similar to the investment program
that is employed by Worthington Growth L.P. ("Worthington"),  a Delaware limited
partnership  for which  Scottsdale  Associates L.P.  ("Scottsdale"),  a Delaware
limited  partnership  controlled by Clifford W. Henry, serves as general partner
and investment adviser.

     Because of the similarity of investment programs,  as a general matter, the
Adviser will consider participation by the Company in all appropriate investment
opportunities  that are under  consideration by Scottsdale for Worthington.  The
Adviser will evaluate for the Company,  and it is  anticipated  that the general
partner of Worthington will evaluate for Worthington,  a variety of factors that
may be relevant in determining  whether a particular  investment  opportunity or
strategy  is  appropriate  and  feasible  for the  Company or  Worthington  at a
particular  time.  Because these  considerations  may differ for the Company and
Worthington  in  the  context  of any  particular  investment  opportunity,  the
investment  activities  of the Company and  Worthington  may differ from time to
time. (See "CONFLICTS OF INTEREST - Participation in Investment Opportunities.")

     The following  table sets forth the  performance  record of Worthington for
the periods  indicated.  The table should be read in conjunction  with the notes
thereto.  This performance and the statistical  information included herein have
been obtained  from sources  believed to be reliable but are not warranted as to
accuracy or  completeness.  PAST  PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
Prospective  investors  should  recognize  that  there are  certain  differences
between the investment  policies of the Company and  Worthington  and that their
fees and expenses differ.  Future  performance of the Company and of Worthington
may differ.

THIS TABLE MUST BE READ IN CONJUNCTION WITH THE ACCOMPANYING FOOTNOTES APPEARING
ON THE FOLLOWING PAGE WHICH ARE AN INTEGRAL PART HEREOF.

<TABLE>
<CAPTION>
                                                                     Worthington                    S&P
                    Worthington Annual           S&P Annual        Cumulative Return            Cumulative
                     Return (1),(2)               Return (3)         (1),(2),(4)               Return (3),(4)
<S>                     <C>                       <C>                  <C>                        <C>
1990                    45.29%                    (3.17%)                45.29%                    (3.10%)
1991                    48.28%                    30.55%                115.44%                    26.43%
1992                    10.09%                     7.59%                137.18%                    36.06%
1993                     4.27%                    10.02%                147.31%                    49.77%
1994                     1.59%                     1.32%                151.26%                    51.75%
1995                    57.28%                    37.57%                295.18%                   108.78%
1996                    28.27%                    23.08%                406.91%                   156.71%
1997                     8.83%                    33.38%                451.67%                   242.35%
1998                    17.60%                    28.58%                548.76%                   340.16%
1999                    76.98%                    21.03%               1048.18%                   432.77%
Annualized              27.64%                    18.21%
Return
</TABLE>

The above returns for  Worthington  are net of all fees,  expenses and incentive
allocations.


                                      B-1
<PAGE>


                        NOTES TO PERFORMANCE INFORMATION

The table on the prior page reflects  Worthington's  investment  performance  as
well as the results of the S&P Composite  Index of 500 Stocks.  The  information
contained  in  the  table  was  computed  based  on  the  following   facts  and
assumptions:

          1. Worthington  commenced  operations in July 1989.  Worthington has a
          December 31 fiscal year.  The  information  is based on  Worthington's
          audited financial statements from January 1, 1990 through December 31,
          1998,  and on  unaudited  performance  from  January  1, 1999  through
          December  31,  1999.  PAST  PERFORMANCE  IS NOT A  GUARANTY  OF FUTURE
          RESULTS.

          2. The above returns for  Worthington are net of all fees and expenses
          (including  a  management  fee of 1% per  annum)  and a 20%  incentive
          allocation  payable to Scottsdale  Associates L.P. (a Delaware limited
          partnership the general  Partner of which is CWH  Associates,  Inc., a
          registered  investment  advisor  controlled  by  Clifford  Henry)  the
          general  partner  and  investment  manager of  Worthington.  The above
          returns  are  based  upon the  results  achieved  by an  investor  who
          invested  in  Worthington  on  January  1,  1990.  Performance  of the
          Standard & Poor's  Composite  Index of 500  Stocks  (the "S&P 500") is
          provided for comparison purposes. Worthington Growth LP, however, does
          not restrict its  investments in securities  only to those  securities
          comprising in the S&P 500 and neither will the Company.

          3. The Standard & Poor's  Composite  Index of 500 Stocks (the "Index")
          rate of return reflects the percentage increase (or decrease) for each
          period  for the  Index.  The  rate of  return  of the  Index  has been
          adjusted to reflect  reinvestment of dividends.  The statistical  data
          for the Index has been obtained  from sources  believed to be reliable
          but which are not warranted as to accuracy or completeness.  The Index
          is a  well-known,  broad based stock market index which  contains only
          seasoned  equity   securities.   Worthington  does  not  restrict  its
          selection of securities to those comprising the Index and accordingly,
          the  performance of Worthington  and the  performance of the Index may
          not be comparable.

          4.  The  Worthington  Cumulative  Return  is  calculated  by  using an
          arithmetic,  compounded  return.  The S&P  500  Cumulative  Return  is
          calculated by using an arithmetic, compounded return.


                                      B-2
<PAGE>


                           PART C - OTHER INFORMATION

Item 24. Financial Statements and Exhibits

     (1)  Financial Statements:

          As Registrant has no assets, financial statements are omitted.

     (2)  Exhibits:

          (a)  (1) Certificate  of  Formation  of  Limited  Liability  Company.
               Incorporated by reference to Registrant's  Registration Statement
               on Form N-2, File No. 811-09727,  filed on December 10, 1999.
               (2) Form of Limited  Liability Company  Agreement.  See Appendix
               A of Registrant's Confidential Memorandum.
          (b)  Not Applicable.
          (c)  Not Applicable.
          (d)  See Item 24(2)(a)(2).
          (e)  Not Applicable.
          (f)  Not Applicable.
          (g)  Form of Investment Advisory Agreement.
          (h)  Form of Placement Agency Agreement.
          (i)  Not Applicable.
          (j)  Form of Custody Agreement.
          (k)  (1)  Form of Administrative Services Agreement.
               (2)  Form  of   Administration,   Accounting   and  Investor
                    Services Agreement.
          (l)  Not Applicable.
          (m)  Not Applicable.
          (n)  Not Applicable.
          (o)  Not Applicable.
          (p)  Not Applicable.
          (q)  Not Applicable.
          (r)  Not Applicable.

Item 25. Marketing Arrangements

          Not Applicable.


                                      C-1
<PAGE>


Item 26. Other Expenses of Issuance and Distribution

         All figures are estimates:

         Blue Sky Fees and Expenses (including fees
             of counsel).....................................      10,000
         Transfer Agent fees.................................         N/A
         Accounting fees and expenses........................      10,000
         Legal fees and expenses.............................     125,000
         Printing and engraving..............................      25,000
         Offering Expenses...................................      75,000
         Miscellaneous.......................................       5,000
                                                                  -------
                                                                 $250,000

Item 27. Persons Controlled by or Under Common Control

     After completion of the private offering of interests,  Registrant  expects
that no  person  will be  directly  or  indirectly  under  common  control  with
Registrant.

Item 28. Number of Holders of Securities

         Title of Class                            Number of Record Holders
         --------------                            ------------------------

         Limited Liability Company Interests       1   (Registrant   anticipates
                                                   that  as  a  result   of  the
                                                   initial  private  offering of
                                                   interests  there will be more
                                                   than 100  record  holders  of
                                                   such interests.)

Item 29. Indemnification

     Reference is made to Section 3.7 of Registrant's  Form of Limited Liability
Company  Agreement (the "Company  Agreement")  filed as Exhibit  2(a)(2) hereto.
Registrant hereby undertakes that it will apply the indemnification provision of
the  Company  Agreement  in a manner  consistent  with  Release  40-11330 of the
Securities and Exchange  Commission under the Investment Company Act of 1940, so
long as the  interpretation  therein  of  Sections  17(h)  and 17(i) of such Act
remains in effect.

     Registrant,  in conjunction with the CIBC Oppenheimer Advisers, L.L.C. (the
"Adviser")  and  Registrant's  Managers,  maintains  insurance  on behalf of any
person  who is or was a  Independent  Manager,  officer,  employee,  or agent of
Registrant,  against certain liability  asserted against him or her and incurred
by him or her or arising out of his or her position.  However,  in no event will
Registrant  pay that portion of the premium,  if any, for insurance to indemnify
any such  person or any act for which  Registrant  itself  is not  permitted  to
indemnify.


                                      C-2
<PAGE>


Item 30. Business and Other Connections of Investment Adviser

     A description of any other business, profession, vocation, or employment of
a substantial nature in which the Adviser, and each director, executive officer,
managing  member or partner of the Adviser,  is or has been,  at any time during
the past two  fiscal  years,  engaged  in for his or her own  account  or in the
capacity of director, officer, employee, managing member, partner or trustee, is
set forth in Registrant's  Confidential  Memorandum in the section entitled "THE
ADVISER  AND CIBC WM."  Information  as to the  directors  and  officers  of the
Adviser  is  included  in its Form ADV as filed  with the  Commission  (File No.
801-55640), and is incorporated herein by reference.

Item 31. Location of Accounts and Records

     The  Administrator   maintains  certain  required  accounting  related  and
financial  books and records of Registrant at PFPC Inc.,  400 Bellevue  Parkway,
Wilmington,  Delaware 19809. The other required books and records are maintained
by the Adviser,  One World Financial Center,  200 Liberty Street,  New York, New
York 10281.

Item 32. Management Services

     Not applicable.

Item 33. Undertakings

     Not Applicable.


                                      C-3
<PAGE>


                                    FORM N-2

                              SAWGRASS FUND, L.L.C.

                                   SIGNATURES

     Pursuant  to  the  requirements  of the  Investment  Company  Act of  1940,
Registrant  has duly  caused  this  registration  statement  to be signed on its
behalf by the undersigned,  thereunto duly authorized,  in the City of New York,
and State of New York, on February __, 2000.

                                            SAWGRASS FUND, L.L.C.


                                            By:  /s/  Howard M. Singer
                                                 -------------------------------
                                                 Name:    Howard M. Singer
                                                 Title:   Manager


                                      C-4
<PAGE>


                                    FORM N-2

                              SAWGRASS FUND, L.L.C.

                                  EXHIBIT INDEX


Exhibit       Document Description
 (g)          Form of Investment Advisory Agreement
 (h)          Form of Placement Agency Agreement
 (j)          Form of Custody Agreement
 (k)     (1)  Form of Administrative Services Agreement
         (2)  Form of Administration, Accounting and Investor Services Agreement


                                      C-5


Exhibit (g)

                          INVESTMENT ADVISORY AGREEMENT


     THIS INVESTMENT ADVISORY AGREEMENT is made the 5th day of January, 2000, by
and between Sawgrass Fund,  L.L.C., a Delaware  limited  liability  company (the
"Fund"),  and CIBC Oppenheimer  Advisers,  L.L.C., a Delaware limited  liability
company (the "Adviser").

     WHEREAS,   the  Fund  intends  to  engage  in  business  as  a  closed-end,
non-diversified  management  investment  company and is registered as such under
the Investment Company Act of 1940, as amended (the "1940 Act"); and

     WHEREAS,  the Adviser is  registered  as an  investment  adviser  under the
Investment  Advisers  Act of 1940,  as amended,  and engages in the  business of
acting as an investment adviser; and

     WHEREAS,  the Fund  desires  to retain  the  Adviser  to render  investment
advisory  services  to the Fund in the  manner  and on the terms and  conditions
hereinafter set forth; and

     WHEREAS,  the Adviser  desires to be retained to perform  such  services on
said terms and conditions;

     NOW,  THEREFORE,  in  consideration  of the  terms  and  conditions  herein
contained, the Fund and the Adviser agree as follows:

     1. The Fund hereby  retains the  Adviser to act as its  investment  adviser
and, subject to the supervision and control of the Board of Managers of the Fund
(the "Board"),  to manage the  investment  activities of the Fund as hereinafter
set forth. Without limiting the generality of the foregoing,  the Adviser shall:
obtain and  evaluate  such  information  and  advice  relating  to the  economy,
securities markets,  and securities as it deems necessary or useful to discharge
its  duties  hereunder;  continuously  manage the assets of the Fund in a manner
consistent with the investment objective, policies and restrictions of the Fund,
as set forth in the  Confidential  Memorandum  of the Fund and as may be adopted
from time to time by the Board, and applicable laws and  regulations;  determine
the  securities to be purchased,  sold or otherwise  disposed of by the Fund and
the timing of such  purchases,  sales and  dispositions;  and take such  further
action,  including  the  placing of  purchase  and sale orders and the voting of
securities  on  behalf of the Fund,  as the  Adviser  shall  deem  necessary  or
appropriate.  The Adviser  shall furnish to or place at the disposal of the Fund
such of the  information,  evaluations,  analyses  and  opinions  formulated  or
obtained by the  Adviser in the  discharge  of its duties as the Fund may,  from
time to time, reasonably request.

     2. Without limiting the generality of paragraph 1 hereof, the Adviser shall
be authorized to open,  maintain and close accounts in the name and on behalf of
the Fund with brokers and dealers as it determines  are  appropriate;  to select
and place orders with brokers, dealers or other financial intermediaries for the
execution,  clearance or settlement of any transactions on behalf of the Fund on
such terms as the Adviser considers appropriate and that


                                      G-1
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are  consistent  with the  policies of the Fund;  and,  subject to any  policies
adopted by the Board and to the  provisions of applicable  law, to agree to such
commissions,  fees and other  charges  on  behalf  of the Fund as it shall  deem
reasonable in the circumstances taking into account all such factors as it deems
relevant (including the quality of research and other services made available to
it even if such services are not for the  exclusive  benefit of the Fund and the
cost of such services does not represent the lowest cost available) and shall be
under no obligation to combine or arrange orders so as to obtain reduced charges
unless  otherwise  required under the federal  securities laws. The Adviser may,
subject to such procedures as may be adopted by the Board, use affiliates of the
Adviser as brokers to effect the Fund's securities transactions and the Fund may
pay such  commissions to such brokers in such amounts as are  permissible  under
applicable law.

     3. The Adviser shall, at its own expense, maintain such staff and employ or
retain such personnel and consult with such other persons as may be necessary to
render the  services  required to be provided by the Adviser or furnished to the
Fund under this Agreement. Without limiting the generality of the foregoing, the
staff and personnel of the Adviser shall be deemed to include  persons  employed
or  otherwise  retained by the Adviser or made  available  to the Adviser by its
members.

     4. The Fund will, from time to time, furnish or otherwise make available to
the Adviser such financial reports,  proxy statements,  policies and procedures,
and other  information  relating to the  business and affairs of the Fund as the
Adviser may reasonably  require in order to discharge its duties and obligations
hereunder.

     5. The  Adviser  shall  bear  the  cost of  rendering  the  services  to be
performed by it under this Agreement.

     6. The Fund  assumes and shall pay or cause to be paid all  expenses of the
Fund not  expressly  assumed  by the  Adviser  under this  Agreement,  including
without  limitation:  all costs  and  expenses  directly  related  to  portfolio
transactions  and positions for the Fund's account,  including,  but not limited
to, brokerage commissions,  research fees, interest and commitment fees on loans
and debit balances,  borrowing  charges on securities  sold short,  dividends on
securities  sold but not yet purchased,  custodial fees,  margin fees,  transfer
taxes and premiums,  taxes withheld on foreign  dividends and indirect  expenses
from investments in investment funds; all costs and expenses associated with the
organization and registration of the Fund,  certain offering costs and the costs
of compliance  with any applicable  Federal or state laws;  attorneys'  fees and
disbursements  associated with updating the Fund's  Confidential  Memorandum and
subscription  documents  (the "Offering  Materials");  the costs of printing the
Offering  Materials;  the  costs  of  distributing  the  Offering  Materials  to
prospective investors; and attorneys' fees and disbursements associated with the
review  of  subscription  documents  executed  and  delivered  to  the  Fund  in
connection  with  offerings of interests of the Fund;  the costs and expenses of
holding  meetings of the Board and any meetings of members of the Fund; fees and
disbursements of any attorneys,  accountants, auditors and other consultants and
professionals  engaged  on behalf of the Fund or the Board;  the  administrative
services fee paid to CIBC World  Markets  Corp.  pursuant to the  Administrative
Services   Agreement   and  the  fees  of  custodians   and  persons   providing
administrative  services  to the  Fund;  the  costs of a  fidelity  bond and any
liability insurance obtained on behalf of the Fund or the Board; all expenses of
computing  the Fund's net asset  value,  including  any  equipment  or  services


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obtained for these  purposes;  and all charges for equipment or services used in
communicating  information  regarding the Fund's  transactions among the Adviser
and any custodian or other agent engaged by the Fund.

     7. As full  compensation  for the  services  provided  to the  Fund and the
expenses  assumed by the Adviser  under this  Agreement,  the  Adviser  shall be
entitled to be the Special  Advisory Member of the Fund pursuant to the terms of
the Limited Liability Company Agreement of the Fund (the "L.L.C. Agreement"). As
the  Special  Advisory  Member,  the  Adviser  shall be  entitled  to receive an
incentive  allocation in accordance with the terms and conditions of Section 5.8
of the L.L.C. Agreement.

     8. The Adviser will use its best efforts in the  supervision and management
of the investment  activities of the Fund and in providing  services  hereunder,
but in the  absence  of willful  misfeasance,  bad faith,  gross  negligence  or
reckless disregard of its obligations hereunder, the Adviser, its members, their
respective  directors,  officers or employees and their  respective  affiliates,
executors,   heirs,   assigns,   successors   or  other  legal   representatives
(collectively,  the "Affiliates")  shall not be liable to the Fund for any error
of judgment  for any mistake of law or for any act or omission by the Adviser or
any of the Affiliates.

     9. (a) The Fund shall indemnify the Adviser, its members,  their respective
directors,  officers or employees and their  respective  affiliates,  executors,
heirs, assigns,  successors or other legal representatives (each an "Indemnified
Person")  against any and all costs,  losses,  claims,  damages or  liabilities,
joint or several, including, without limitation,  reasonable attorneys' fees and
disbursements,  resulting in any way from the performance or  non-performance of
any Indemnified Person's duties with respect to the Fund, except those resulting
from the willful  malfeasance,  bad faith or gross  negligence of an Indemnified
Person or the Indemnified Person's reckless disregard of such duties, and in the
case of criminal  proceedings,  unless such  Indemnified  Person had  reasonable
cause to believe  its  actions  unlawful  (collectively,  "disabling  conduct").
Indemnification shall be made following: (i) a final decision on the merits by a
court or other body before which the proceeding was brought that the Indemnified
Person  was not  liable by  reason of  disabling  conduct  or (ii) a  reasonable
determination, based upon a review of the facts and reached by (A) the vote of a
majority of the members of the Board (the "Managers") who are not parties to the
proceeding or (B) legal counsel selected by a vote of a majority of the Board in
a written  advice,  that the Indemnified  Person is entitled to  indemnification
hereunder.  The Fund shall advance to an Indemnified  Person (to the extent that
it has available assets and need not borrow to do so) reasonable attorneys' fees
and other costs and expenses  incurred in connection  with defense of any action
or proceeding  arising out of such performance or  non-performance.  The Adviser
agrees,  and each other Indemnified Person will agree as a condition to any such
advance, that in the event the Indemnified Person receives any such advance, the
Indemnified Person shall reimburse the Fund for such fees, costs and expenses to
the  extent  that it shall be  determined  that the  Indemnified  Person was not
entitled to indemnification under this paragraph 9.

     (b) Notwithstanding any of the foregoing to the contrary, the provisions of
this paragraph 9 shall not be construed so as to relieve the Indemnified  Person
of, or  provide  indemnification  with  respect  to,  any  liability  (including
liability under Federal  Securities laws,  which,  under certain  circumstances,
impose  liability even on persons who act in good faith) to


                                      G-3
<PAGE>


the  extent  (but only to the  extent)  that such  liability  may not be waived,
limited or modified under applicable law or that such  indemnification  would be
in violation of applicable  law, but shall be construed so as to effectuate  the
provisions of this paragraph 9 to the fullest extent permitted by law.

     10. Nothing  contained in this  Agreement  shall prevent the Adviser or any
affiliated  person of the Adviser from acting as  investment  adviser or manager
for any other person,  firm or corporation and, except as required by applicable
law  (including  Rule 17j-1  under the 1940  Act),  shall not in any way bind or
restrict  the  Adviser or any such  affiliated  person from  buying,  selling or
trading any securities or commodities  for their own accounts or for the account
of others for whom they may be acting.  Nothing in this Agreement shall limit or
restrict  the right of any member,  officer or employee of the Adviser to engage
in any other  business or to devote his or her time and attention in part to the
management  or other  aspects  of any other  business  whether  of a similar  or
dissimilar nature.

     11. This  Agreement  shall  remain in effect for an initial  term  expiring
January 5,  2002,  and shall  continue  in effect  from year to year  thereafter
provided  such  continuance  is  approved  at  least  annually  by the vote of a
majority of the  outstanding  voting  securities  of the Fund, as defined by the
1940 Act and the rules thereunder,  or by the Board; and provided that in either
event such  continuance  is also  approved by a majority of the Managers who are
not parties to this  Agreement or  "interested  persons" (as defined by the 1940
Act) of any such party (the "Independent Managers"), by vote cast in person at a
meeting called for the purpose of voting on such  approval.  The Fund may at any
time, without payment of any penalty,  terminate this Agreement upon sixty days'
prior written notice to the Adviser,  either by majority vote of the Board or by
the vote of a majority  of the  outstanding  voting  securities  of the Fund (as
defined by the 1940 Act and the rules thereunder).  The Adviser may at any time,
without  payment of penalty,  terminate  this  Agreement  upon sixty days' prior
written notice to the Fund. This Agreement shall automatically  terminate in the
event of its  assignment  (to the extent  required by the 1940 Act and the rules
thereunder) unless such automatic termination shall be prevented by an exemptive
order of the Securities and Exchange Commission.

     12. Any notice under this Agreement  shall be given in writing and shall be
deemed to have been duly given when  delivered by hand or facsimile or five days
after mailed by certified mail,  post-paid,  by return receipt  requested to the
other party at the principal office of such party.

     13. This  Agreement  may be amended  only by the written  agreement  of the
parties.  Any  amendment  shall be required to be approved by the Board and by a
majority  of the  Independent  Managers in  accordance  with the  provisions  of
Section 15(c) of the 1940 Act and the rules thereunder.  If required by the 1940
Act, any amendment shall also be required to be approved by such vote of members
of the Fund as is required by the 1940 Act and the rules thereunder.

     14. This  Agreement  shall be construed in accordance  with the laws of the
state of New York and the  applicable  provisions of the 1940 Act. To the extent
the applicable  law of the State of New York, or any of the  provisions  herein,
conflict  with the  applicable  provisions  of the 1940 Act,  the  latter  shall
control.


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<PAGE>


     15. The Fund  represents  that this Agreement has been duly approved by the
Board, including a majority of the Independent Managers, and by the sole initial
member of the Fund, in accordance with the  requirements of the 1940 Act and the
rules thereunder.

     16. The parties to this  Agreement  agree that the  obligations of the Fund
under this Agreement  shall not be binding upon any of the Managers,  members of
the Fund or any officers,  employees or agents, whether past, present or future,
of the Fund, individually,  but are binding only upon the assets and property of
the Fund.

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                                      G-5
<PAGE>


     IN WITNESS  WHEREOF,  the parties  hereto have executed and delivered  this
Agreement on the day and year first above written.


                                             SAWGRASS FUND, L.L.C.



                                             By:
                                                  -----------------------------
Attest:                                           Name:    Howard M. Singer
                                                  Title:   Manager

- -----------------------------
                                             CIBC OPPENHEIMER ADVISERS, L.L.C.

                                             By:  CIBC World Markets Corp.,
                                                  its Managing Member


                                             By:
                                                  -----------------------------
Attest:                                           Name:
                                                  Title:

- -----------------------------


                                      G-6


Exhibit (h)

                              SAWGRASS FUND, L.L.C.
                           One World Financial Center
                                   31st Floor
                               200 Liberty Street
                            New York, New York 10281


CIBC World Markets Corp.
One World Financial Center - 31st Floor
200 Liberty Street
New York, New York 10281

     Re:  Appointment as Placement Agent

Ladies and Gentlemen:

     Sawgrass Fund, L.L.C., a limited liability company organized under the laws
of the State of Delaware (the "Fund"), hereby agrees with you as follows:

     1.   Fund Offering.

     The Fund  proposes  to  issue  and to sell its  limited  liability  company
interests  ("Interests") in accordance with a Confidential  Memorandum issued by
the Fund dated January 2000, as amended or  supplemented  from time to time (the
"Memorandum").

     2.   Definitions.

     All  capitalized  terms  used in this  Agreement  which are not  separately
defined herein shall have the respective meaning set forth in the Memorandum.

     3.   Placement of Interests.

     (a) Subject to the terms and conditions  set forth herein,  the Fund hereby
appoints  you as its  placement  agent  in  connection  with  the  placement  of
Interests.  Subject to the  performance in all material  respects by the Fund of
its obligations hereunder,  and to the completeness and accuracy in all material
respects of all of the  representations  and  warranties  of the Fund  contained
herein,  you hereby  accept  such  agency and agree on the terms and  conditions
herein set forth to use your best  efforts  to find  qualified  subscribers  for
Interests  and to use all  reasonable  efforts to assist  the Fund in  obtaining
performance by each subscriber.  You shall not have any liability to the Fund in
the event that any subscriber  fails to consummate the purchase of Interests for
any reason other than your willful misconduct or gross negligence.

     (b) The offers and sales of  Interests  are to be effected  pursuant to the
exemption from the  registration  requirements of the Securities Act of 1933, as
amended (the "Securities Act"),  pursuant to Section 4(2) thereof and Regulation
D under the Securities Act. Both you and the Fund have established the following
procedures  in  connection  with the offer


                                      H-1
<PAGE>


and sale of Interests and agree that neither of you will make offers or sales of
any Interests except in compliance with such procedures:

          (i) Offers and sales of Interests will be made only in compliance with
     Regulation D under the Securities Act and only to investors that qualify as
     "accredited investors," as defined in Rule 501(a) under the Securities Act.

          (ii) No sale of Interests to any one  Purchaser  will be for less than
     the minimum denominations as may be specified in the Memorandum.

          (iii) No offer or sale of any  Interest  shall be made in any state or
     jurisdiction,  or to any  prospective  investor  located  in any  state  or
     jurisdiction,  where such Interests  have not been  registered or qualified
     for offer and sale under  applicable  state  securities  laws  unless  such
     Interests are exempt from the registration or qualification requirements of
     such laws.

          (iv)  Sales  of  Interests  will be made  only to  investors  that are
     qualified  clients  under Rule 205-3 under the  Investment  Advisers Act of
     1940, as amended.

     (c) For purposes of the offering of  Interests,  the Fund has  furnished to
you copies of the  Memorandum  and  subscription  documentation  which  shall be
furnished to prospective investors.  Additional copies will be furnished in such
numbers as you may  reasonably  request for  purposes of the  offering.  You are
authorized to furnish to prospective purchasers only such information concerning
the Fund and the offering as may be contained in the  Memorandum  or any written
supplements  thereto,  and such other  materials as you have  prepared and which
comply with applicable laws and regulations,  including to the extent applicable
the rules of the National Association of Securities Dealers, Inc. (the "NASD").

     4.   Subscriptions During the Initial Offering Period.

     (a) The initial offering period for the Interests shall commence as soon as
practicable after the date as of which this Agreement is effective and be closed
on  March  15,  2000 or such  later  date as may be  specified  by the  Board of
Managers of the Fund (the "Board"), in its sole discretion, which date shall not
be more than 90 days thereafter (the "Initial Offering Period").

     (b)  All  subscriptions  for  Interests  and  payments  by  subscribers  of
subscription  amounts  for  Interests  shall be made  pursuant  to the terms and
conditions  set  forth  in  the  Memorandum  and   subscription   documentation.
Subscriptions  shall be subject to  acceptance  by you as agent for the Fund, as
described in Section 6 below.

     (c) All payments  received by you hereunder for  subscriptions  in the name
and on behalf of the Fund shall be handled by you in  accordance  with the terms
of the subscription documentation.

     (d) If the offering is not completed in accordance  with the conditions set
forth in the Memorandum,  the Fund may terminate the offering. In such case, you
will  instruct  PFPC


                                      H-2
<PAGE>


Inc. or any other escrow agent who may be serving in such  capacity for the time
being to return all subscription payments to investors.

     5.   Subscriptions After the Initial Offering Period.

     (a) After the Initial Offering  Period,  the Fund may from time to time, in
the sole  discretion  of the Board,  offer  Interests to investors  for purchase
("Subsequent Offerings").

     (b) In Subsequent Offerings, the minimum additional investment requirements
shall be such amounts as are specified in the Memorandum.  All subscriptions for
Interests in Subsequent  Offerings and payments  therefor shall be made pursuant
to the terms and conditions set forth in the Memorandum, and subscriptions shall
be subject to acceptance by you as agent for the Fund, as described in Section 6
below.  In Subsequent  Offerings,  the procedures set forth in Sections 4(c) and
(d) shall also be applicable.

     6.   Acceptance of Subscriptions.

     You are appointed as agent of the Fund for purposes of determining  whether
to accept or to  reject  subscriptions  for  Interests.  Subscriptions  shall be
accepted only if the investor: (a) has supplied, or in the case of an additional
subscription  by an  existing  member,  previously  supplied,  to  you  properly
completed  subscription  documentation;  and (b) has  made  proper  payment  for
Interests.  Subscriptions shall be rejected if it appears to you that any of the
terms or conditions  applicable to  subscriptions  for Interests as set forth in
the Memorandum or subscription  documentation have not been satisfied. The Board
reserves the right to reject any subscription for Interests in the Fund.

     7.   Representations and Warranties of the Fund.

     The Fund represents and warrants to you that:

     (a) The Fund has been duly  formed  and is  validly  existing  as a limited
liability  company in good standing under the laws of the State of Delaware with
all requisite  power and  authority,  all necessary  authorizations,  approvals,
orders,  licenses,  certificates  and  permits  of  and  from  all  governmental
regulatory officials and bodies, and all necessary rights,  licenses and permits
from other parties, to conduct its business as described in the Memorandum.

     (b)  Interests  to be or which  may be  issued  by the Fund  have been duly
authorized  for  issuance and sale and,  when issued and  delivered by the Fund,
Interests  will  conform to all  statements  relating  thereto  contained in the
Memorandum.

     (c) The  issue  and  sale of  Interests  and the  execution,  delivery  and
performance of the Fund's  obligations  under the Memorandum  will not result in
the violation of any applicable law.

     (d) The Fund will apply the  proceeds  from the sale of  Interests  for the
purposes set forth in the Memorandum.


                                      H-3
<PAGE>


     (e) The  Memorandum  will not contain an untrue  statement  of any material
fact or omit to state any material  fact  necessary in order to make  statements
therein  in the light of the  circumstances  under  which  they were  made,  not
misleading.

     (f) This Agreement has been duly authorized,  executed and delivered by the
Fund and,  assuming your execution  hereof,  will constitute a valid and binding
agreement of the Fund.

     (g) Prior to and on the effective date of this Agreement, neither the Fund,
nor to the  knowledge of the Fund any person  acting on behalf of the Fund,  has
directly  or  indirectly  offered  or sold,  or  attempted  to offer or sell any
Interests  to or  solicited  offers  to buy any  Interests  from,  or  otherwise
approached or negotiated with respect thereto with, any prospective  investor in
connection with the placement thereof.

     8.   Covenants of the Fund.

     The Fund covenants and agrees with you as follows:

     (a) You and your  counsel  shall  be  furnished  with  such  documents  and
opinions  as you and they may  require,  from time to time,  for the  purpose of
enabling  you or them to pass upon the  issuance and sale of Interests as herein
contemplated  and related  proceedings,  or in order to evidence the accuracy of
any of the  representations  and  warranties,  or the  fulfillment of any of the
conditions  herein  contained;  and all  proceedings  taken  by the  Fund and in
connection with the issuance and sale of Interests as herein  contemplated shall
be satisfactory in form and substance to you and your counsel.

     (b) If, at any time after the  commencement of an offering of Interests and
prior to its termination, an event occurs which in the opinion of counsel to the
Fund  materially  affects the Fund and which should be set forth in an amendment
or supplement  to the  Memorandum  in order to make the  statements  therein not
misleading  in light of the  circumstances  under which they are made,  the Fund
will notify you as promptly as  practical  of the  occurrence  of such event and
prepare  and  furnish  to  you  copies  of an  amendment  or  supplement  to the
Memorandum,  in such reasonable  quantities as you may request in order that the
Memorandum will not contain any untrue statement of any material fact or omit to
state a material  fact which in the opinion of such counsel is necessary to make
the statements therein not misleading in light of the circumstances  under which
they are made.

     9.   Representations and Warranties of the Placement Agent.

     You represent and warrant that:

     (a) You are duly  authorized  to  enter  into and  perform,  and have  duly
executed and delivered, this Agreement.

     (b) You have and will  maintain all licenses  and  registrations  necessary
under  applicable  law and  regulations  (including  the  rules of the  NASD) to
provide the services required to be provided by you hereunder.


                                      H-4
<PAGE>


     (c) You have not and will  not  solicit  any  offer to buy or offer to sell
Interests in any manner which would be  inconsistent  with  applicable  laws and
regulations,  or with  the  procedures  for  solicitations  contemplated  by the
Memorandum or by any form of general solicitation or advertising, including, but
not  limited  to,  any  advertisement,  article,  notice or other  communication
published  in any  newspaper,  magazine  or  similar  medium or  broadcast  over
television or radio or conduct any seminar or meeting whose  attendees have been
invited by any general solicitation or advertising.

     (d) You will furnish each subscriber of Interests, identified either by you
or the Fund, a copy of the Memorandum and  subscription  documentation  prior to
such person's admission as a member of the Fund.

     10.  Compensation of Placement Agent.

     (a) You will receive no fee,  payment or other  remuneration  from the Fund
for your  services  under  this  Agreement;  provided,  that as set forth in the
Memorandum,  you are entitled to charge a sales commission on the purchase price
of Interests of up to 3%, or such other  percentage as established by the Board;
and further  provided,  that you shall have the authority to waive or reduce the
sales commission in particular cases, at your sole discretion.

     (b)  Except  as may  otherwise  be  agreed  to by the  Fund,  you  shall be
responsible  for the  payment  of all  costs  and  expenses  incurred  by you in
connection  with the  performance  of your  obligations  under  this  Agreement,
including the costs associated with the  preparation,  printing and distribution
of any sales materials.

     (c) We acknowledge  that you intend to compensate  your account  executives
for their ongoing  servicing of clients with whom they have placed  Interests in
the Fund. This compensation will be based upon a formula that takes into account
the amount of client  assets being  serviced as well as the  investment  results
attributable to clients' assets invested in the Fund.

     11.  Indemnification and Contribution.

     The parties agree to indemnify one another as follows:

     (a) The Fund agrees to indemnify and hold harmless you and each person,  if
any, who controls you within the meaning of Section 15 of the  Securities Act or
Section  20(a) of the  Securities  Exchange  Act of 1934 (the  "Exchange  Act"),
against any and all losses, liabilities, claims, damages and expenses whatsoever
(including,  but not  limited  to,  attorneys'  fees  and  any and all  expenses
whatsoever  incurred  in  investigating,  preparing  or  defending  against  any
litigation,  commenced or threatened,  or any claim whatsoever,  and any and all
amounts paid in settlement  of any claim or  litigation),  joint or several,  to
which you or they may become subject under the Securities  Act, the Exchange Act
or any other law or  statute  in any  jurisdiction  otherwise,  insofar  as such
losses, liabilities,  claims, damages or expense (or actions in respect thereof)
arise out of or are based upon any untrue  statement or alleged untrue statement
of a material fact contained in the Memorandum or the subscription documentation
or any  amendment or supplement  thereto,  or arise out of or are based upon the
omission or alleged  omission to state  therein a material  fact  required to be
stated  therein or  necessary  to make the  statements  therein not  misleading;
provided, however, that the Fund will not be liable in any such


                                      H-5
<PAGE>

case to the  extent,  but only to the  extent,  that any such  loss,  liability,
claim,  damage  or  expense  arises  out of or is based  upon  any  such  untrue
statement  or alleged  untrue  statement  or omission or alleged  omission  made
therein in reliance upon and in conformity with written information furnished to
the Fund by you or  through  you  expressly  for the use  therein;  and  further
provided that this  indemnity  shall not protect you or any other person who may
otherwise be entitled to indemnity  hereunder  from or against any  liability to
which you or they would be  subject  by reason of your own or their own  willful
misfeasance,  bad faith, gross negligence or reckless disregard of your or their
duties hereunder.  This indemnity will be in addition to any liability which the
Fund may otherwise have included under this Agreement.

     (b) You agree to indemnify  and hold  harmless the Fund and each person who
controls  the Fund  within the  meaning of Section 15 of the  Securities  Act or
Section  20(a) of the Exchange  Act,  against any losses,  liabilities,  claims,
damages and expenses whatsoever (including,  but not limited to, attorneys' fees
and any and all  expenses  whatsoever  incurred in  investigating,  preparing or
defending  against  any  litigation,  commenced  or  threatened,  or  any  claim
whatsoever,  and  any  and  all  amounts  paid in  settlement  of any  claim  or
litigation), joint or several, to which you or they may become subject under the
Securities   Act,  the  Exchange  Act  or  any  other  law  or  statute  in  any
jurisdiction,  insofar as such losses, liabilities,  claims, damages or expenses
(or  actions  in  respect  thereof)  arise out of or are based  upon any  untrue
statement  or alleged  untrue  statement  of a material  fact  contained  in the
Memorandum or Subscription Agreement, or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a  material  fact  required  to be  stated  therein  or  necessary  to make  the
statements  therein not misleading,  in each case to the extent, but only to the
extent, that any such loss, liability, claim, damage or expense arises out of or
is based upon any such untrue  statement or alleged untrue statement or omission
or alleged omission made therein in reliance upon and in conformity with written
information furnished to the Fund by you or on your behalf through you expressly
for use therein.  This indemnity will be in addition to any liability  which you
may otherwise have incurred under this Agreement.

     (c) Promptly after receipt by an indemnified  party under subsection (a) or
(b) above of notice of the commencement of any action,  such  indemnified  party
shall,  if a claim in respect  thereof is to be made  against  the  indemnifying
party under such subsection, notify the party against whom indemnification is to
be sought in writing of the  commencement  thereof (but the failure so to notify
an indemnifying party shall not relieve it from any other liability which it may
have under this Section 11 (except to the extent that it has been  prejudiced in
any material  respect by such failure) or from any  liability  which it may have
otherwise).  In case any such action is brought against any  indemnified  party,
and  it  notifies  an  indemnifying  party  of  the  commencement  thereof,  the
indemnifying party will be entitled to participate therein and, to the extent it
may elect by written notice  delivered to the  indemnified  party promptly after
receiving  the  aforesaid  notice  from such  indemnified  party,  to assume the
defense thereof with counsel  satisfactory to such indemnified party;  provided,
however,  that if, in the  judgment  of such  indemnified  party,  a conflict of
interest  exists  where  it  is  advisable  for  such  indemnified  party  to be
represented by separate  counsel,  the indemnified party shall have the right to
employ separate counsel in any such action, in which event the fees and expenses
of such separate  counsel shall be borne by the  indemnifying  party or parties.
After  notice  from  the  indemnifying  party to such  indemnified  party of its
election so to assume the defense  thereof and the  approval by the  indemnified
party of counsel, the indemnifying party shall not be liable to such indemnified
party


                                      H-6
<PAGE>


under such  subsections  for any legal  expenses  of other  counsel or any other
expenses,  in each case  subsequently  incurred by such  indemnified  party,  in
connection with the defense thereof other than reasonable costs of investigation
unless  (i) the  indemnified  party  shall  have  employed  separate  counsel in
accordance with the proviso to the next preceding sentence (it being understood,
however,  that the  indemnifying  party or  parties  shall not be liable for the
expenses of more than one such separate  counsel  representing  the  indemnified
parties  under  subparagraph  (a) of this  Section  11 who are  parties  to such
action),  (ii) the indemnifying party or parties shall not have employed counsel
satisfactory to the indemnified  party to represent the indemnified party within
a  reasonable  time  after  notice of  commencement  of the  action or (iii) the
indemnifying  party or parties have authorized the employment of counsel for the
indemnified  party at the  expense of the  indemnifying  party or  parties;  and
except that, if clause (i) or (iii) is applicable,  such liability shall be only
in  respect  of  the  counsel  referred  to in  such  clause  (i) or  (iii).  No
indemnifying  party shall,  without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened  proceeding in respect
of which any indemnified party is or could have been a party and indemnity could
have been sought  hereunder by such  indemnified  party,  unless such settlement
includes an unconditional  release of such indemnified  party from all liability
on claims that are the subject matter of such proceeding.

     12.  Representations and Indemnities to Survive Delivery.

     The  agreements,   representations,   warranties,   indemnities  and  other
statements  of the parties and their  officers set forth in or made  pursuant to
this  Agreement  will  remain in full force and  effect,  regardless  of (i) any
termination of this Agreement,  (ii) any  investigation  made by or on behalf of
you, or the Fund, any Managers serving on the Board (the "Managers"),  directors
or  officers  of any of the  foregoing  or  any  person  controlling  any of the
foregoing,  and (iii)  acceptance  of any payment for Interests  hereunder.  The
provisions of this Section 12 shall survive the  termination or  cancellation of
this Agreement.

     13.  Effective Date and Term of Agreement.

     This  Agreement  shall become  effective  for all purposes as of January 5,
2000 and shall remain in effect for an initial term of two years from such date.
Thereafter,  this Agreement shall continue in effect from year to year, provided
that each such  continuance  is approved by the Board,  including  the vote of a
majority of the  Managers  who are not  "interested  persons," as defined by the
Investment Company Act of 1940 (the "1940 Act") and the rules thereunder, of the
Fund or of CIBC World Markets Corp.

     14.  Termination.

     This Agreement may be terminated as follows:

     (a) Either party may  terminate  this  Agreement  without  cause by written
notice to the other on not less than thirty (30) days  notice,  or, if there has
been a material breach of any condition, warranty,  representation or other term
of this Agreement by the other, by written notice to such other at any time.

     (b) By written  notice to the Fund, you may terminate this Agreement at any
time if (i) there has been, since the respective  dates as of which  information
is given in the


                                      H-7
<PAGE>


Memorandum,  any  material  adverse  change  in  the  condition,   financial  or
otherwise,  of the Fund,  which in your  opinion,  will make it  inadvisable  to
proceed with the delivery of Interests;  (ii) there has occurred any outbreak of
hostilities or other domestic or international  calamity or crisis the effect of
which on the financial  markets is so substantial  and adverse as to make it, in
your judgment,  impracticable to market  Interests or enforce  contracts for the
sale of Interests;  and (iii) any order  suspending the sale of Interests  shall
have been issued by any jurisdiction in which a sale or sales of Interests shall
have been made, or proceedings for that purpose shall have been initiated or, to
your best knowledge and belief, shall be contemplated.

     (c)  This  Agreement  shall  terminate  automatically  in the  event of its
"assignment" as such term is defined by the 1940 Act and the rules thereunder.

     15.  Delegation of Powers.

     You shall be entitled to delegate all or any of your  duties,  functions or
powers  under this  Agreement  to another  person as  sub-agents  subject to the
approval of the Fund. However,  you shall be solely responsible for the acts and
omissions of any such sub-agent and for the payment of any  remuneration to such
sub-agent.

     16.  Notices.

     All communications under this Agreement shall be given in writing,  sent by
(i) telecopier,  (ii) telex confirmed by answerback, or (iii) registered mail to
the address  set forth  below or to such other  address as such party shall have
specified in writing to the other party hereto, and shall be deemed to have been
delivered  effective  at the earlier of its receipt or within two (2) days after
dispatch,


                                      H-8
<PAGE>


     If to CIBC World Markets Corp.:

          CIBC World Markets Corp.
          One World Financial Center
          37th Floor
          200 Liberty Street
          New York, NY  10281

          Telephone: (212) 667-7398
          Attn.:  Mark Kaplan, Assistant General Counsel

     If to Sawgrass Fund, L.L.C.:

          Sawgrass Fund, L.L.C.
          One World Financial Center
          31st Floor
          200 Liberty Street
          New York, NY  10281

          Telephone: (212) 667-4225
          Attn.:  Howard M. Singer

     17.  Miscellaneous.

     (a) This  Agreement  may be executed in two or more  counterparts,  each of
which  when so  executed  and  delivered  shall  constitute  one  and  the  same
instrument. This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their  respective  successors and assigns and no other person
shall have any right or obligation hereunder.

     (b) This  Agreement  supersedes  all prior  agreements  and  understandings
relating to the subject matter  hereof,  and neither this Agreement nor any term
hereof may be changed, waived,  discharged or terminated except by an instrument
in writing signed by the party against whom  enforcement of the change,  waiver,
discharge  or  termination  is sought.  The headings in this  Agreement  are for
purposes of reference  only and shall not limit or otherwise  affect the meaning
hereof.

     18.  Governing Law.

     This  Agreement  shall be governed by and construed in accordance  with the
laws of the State of New York without regard to the conflicts of laws provisions
thereof,  and with the  provisions of the 1940 Act. In the event of any conflict
between the  provisions  of the laws of New York and those of the 1940 Act,  the
1940 Act provisions shall control.

     19. The parties to this  Agreement  agree that the  obligations of the Fund
under this Agreement shall not be binding upon any Managers, members of the Fund
or any officers,  employees or agents,  whether past,  present or future, of the
Fund,  individually,  but are binding  only upon the assets and  property of the
Fund.


                                      H-9
<PAGE>


     If the foregoing  correctly sets forth our  understanding  with you, please
indicate your acceptance in the space provided below.


                                        Very truly yours,

                                        SAWGRASS FUND, L.L.C.


                                        By:
                                               --------------------------------
                                        Name:  Howard M. Singer
                                        Title: Manager



                                        Date:
                                               --------------------------------
Agreed to and accepted:

CIBC WORLD MARKETS CORP.


By:
       ---------------------------
Name:
Title:

Date:
       ---------------------------


                                      H-10


Exhibit (j)


     CUSTODIAN SERVICES AGREEMENT

THIS  AGREEMENT  is made as of  ____________________,  2000 by and between  PFPC
TRUST COMPANY,  a limited purpose trust company  incorporated  under the laws of
Delaware ("PFPC Trust"),  and SAWGRASS FUND, L.L.C. a Delaware limited liability
company (the "Company").

     W I T N E S S E T H:

WHEREAS, the Company is registered as a closed-end,  non-diversified  management
investment  company  under the  Investment  Company Act of 1940, as amended (the
"1940 Act"); and

WHEREAS,  the Company wishes to retain PFPC Trust to provide custodian services,
and PFPC Trust wishes to furnish custodian services,  either directly or through
an affiliate or affiliates, as more fully described herein.

NOW,  THEREFORE,  in  consideration  of the premises and mutual covenants herein
contained, and intending to be legally bound hereby, the parties hereto agree as
follows:

1.   Definitions. As Used in This Agreement:

(a) "1933 Act" means the Securities Act of 1933, as amended.

(b) "1934 Act" means the Securities Exchange Act of 1934, as amended.

(c)  "Authorized  Person"  means any officer of the Company and any other person
duly authorized by the Company's Board of Managers to give Oral Instructions and
Written  Instructions  on behalf of the  Company  and  listed on the  Authorized
Persons Appendix attached hereto and made a part hereof or any amendment thereto
as may be received by PFPC Trust. An Authorized  Person's scope of authority may
be limited by the Company by setting  forth such  limitation  in the  Authorized
Persons Appendix.

(d) "Board of Managers" and "Members"  shall have the same meanings as set forth
in the Company's Limited Liability Company Agreement.

(e) "Book-Entry  System" means Federal Reserve  Treasury  book-entry  system for
United States and federal agency  securities,  its successor or successors,  and
its nominee or nominees  and any  book-entry  system  maintained  by an exchange
registered with the SEC under the 1934 Act.

(f) "CEA" means the Commodities Exchange Act, as amended.

(g) "Interests" mean membership interests in the Company.


                                      J-1
<PAGE>


(h) "Oral  Instructions"  mean oral instructions  received by PFPC Trust from an
Authorized  Person or from a person  reasonably  believed by PFPC Trust to be an
Authorized Person.

(i) "PFPC Trust" means PFPC Trust Company,  or a subsidiary or affiliate of PFPC
Trust Company.

(j) "SEC" means the Securities and Exchange Commission.

(k) "Securities" means Securities (including, without limitation, equities, debt
obligations,  options, and other "securities" as that term is defined in Section
2(a)(36) of the 1940 Act) and any  contracts  for forward or future  delivery of
any  security,  debt  obligation  or  currency,  or  commodity,  all  manner  of
derivative  instruments  and any  contracts  based  on any  index  or  group  of
Securities,  debt  obligations or currencies,  or  commodities,  and any options
thereon, as well as investments in registered  investment  companies and private
investment funds.

(m) "Securities Laws" mean the 1933 Act, the 1934 Act, the 1940 Act and the CEA.

(n) "Property" means:

(i) any and all Securities and other investment items which the Company may from
time to time deposit,  or cause to be  deposited,  with PFPC Trust or which PFPC
Trust may from time to time hold for the Company;

(ii) all income in respect of any of such Securities or other investment items;

(iii) all proceeds of the sale of any of such  Securities or  investment  items;
and

(iv) all proceeds of the sale of  securities  issued by the  Company,  which are
received by PFPC Trust from time to time, from or on behalf of the Company.

(o) "Written  Instructions" mean written  instructions  signed by two Authorized
Persons,  unless  specified  otherwise  herein,  and received by PFPC Trust. The
instructions may be delivered  electronically or by hand, mail, tested telegram,
cable, telex or facsimile sending device.

2.  Appointment.  The Company  hereby  appoints PFPC Trust to provide  custodian
services  to the  Company,  in  accordance  with  the  terms  set  forth in this
Agreement.  PFPC Trust  accepts  such  appointment  and  agrees to furnish  such
services.

3. Delivery of Documents.  The Company has provided or, where  applicable,  will
provide PFPC Trust with the following:

(a) certified or authenticated  copies of the resolutions of the Company's Board
of  Managers,  approving  the  appointment  of PFPC Trust or its  affiliates  to
provide services and approving this Agreement;


                                      J-2
<PAGE>


(b) a copy of the Company's current Form N-2 registration statement;

(c) a copy of the Limited Liability Company Agreement;

(d) a copy of the Company's investment advisory agreement pursuant to which CIBC
Oppenheimer Advisers,  L.L.C., as Investment Adviser, provides investment advice
to the Company;

(e) a copy of the placement agent agreement with respect to the Company;

(f) a copy of any administration agreements;

(g) copies of any investor servicing agreement; and

(h) certified or  authenticated  copies of any and all amendments or supplements
to the foregoing.

4.   Compliance with Laws.

PFPC  Trust  undertakes  to  comply  with  the  applicable  requirements  of the
Securities Laws, and any laws, rules and regulations of governmental authorities
having  jurisdiction  with  respect to the duties to be  performed by PFPC Trust
hereunder.  Except as  specifically  set forth  herein,  PFPC  Trust  assumes no
responsibility for such compliance by the Company.

5.   Instructions.

(a) Unless otherwise provided in this Agreement,  PFPC Trust shall act only upon
Oral  Instructions  and  Written   Instructions,   including   standing  Written
Instructions related to ongoing instructions received electronically.

(b) PFPC Trust shall be entitled to rely upon any Oral and Written  Instructions
it receives from an Authorized Person (or from a person  reasonably  believed by
PFPC Trust to be an Authorized  Person)  pursuant to this Agreement.  PFPC Trust
may assume that any Oral or Written  Instructions  received hereunder are not in
any way  inconsistent  with the  provisions of  organizational  documents of the
Company or of any vote,  resolution  or  proceeding  of the  Company's  Board of
Managers or the Company's members,  unless and until PFPC Trust receives Written
Instructions to the contrary.

(c) The Company agrees to forward to PFPC Trust Written Instructions  confirming
Oral  Instructions  given on  behalf  of the  Company  (except  where  such Oral
Instructions  are given by PFPC Trust or its  affiliates)  and shall endeavor to
ensure  that  PFPC  Trust  receives  the  Written  Instructions  by the close of
business on the same day that such Oral Instructions are received. The fact that
such confirming Written  Instructions are not received by PFPC Trust shall in no
way invalidate the transactions or enforceability of the transactions authorized
by the Oral  Instructions.  Where  Oral  Instructions  or  Written  Instructions
reasonably  appear to have been received from an Authorized  Person,  PFPC Trust
shall incur no liability to the Company in acting upon such Oral Instructions or
Written  Instructions  provided that PFPC Trust's  actions comply with the other
provisions of this Agreement.


                                      J-3
<PAGE>


6.   Right to Receive Advice.

(a) Advice of the Company.  If PFPC Trust is in doubt as to any action it should
or should not take, PFPC Trust may request directions or advice,  including Oral
Instructions or Written Instructions, from the Company.

(b) Advice of Counsel. If PFPC Trust shall be in doubt as to any question of law
pertaining  to any action it should or should not take,  PFPC Trust may  request
advice at its own cost from such counsel of its own choosing.

(c) Conflicting Advice. In the event of a conflict between directions, advice or
Oral Instructions or Written  Instructions PFPC Trust receives from the Company,
and the advice it receives  from  counsel,  PFPC Trust shall be entitled to rely
upon and follow the advice of  counsel.  PFPC Trust  shall  promptly  inform the
Company of such  conflict and PFPC Trust shall  refrain from acting in the event
of a conflict unless counsel advises PFPC Trust that a failure to take action is
likely to result in  additional  loss,  liability or expense.  In the event PFPC
Trust relies on the advice of counsel,  PFPC Trust remains liable for any action
or omission on the part of PFPC Trust which constitutes willful misfeasance, bad
faith, negligence or reckless disregard by PFPC Trust of any duties, obligations
or responsibilities set forth in this Agreement.

(d)  Protection  of PFPC Trust.  PFPC Trust shall be  protected in any action it
takes or does not take in reliance upon directions,  advice or Oral Instructions
or Written Instructions it receives from the Company or (to the extent permitted
under  clause (c) above)  from  counsel and which PFPC Trust  believes,  in good
faith, to be consistent with those  directions,  advice or Oral  Instructions or
Written Instructions. Nothing in this section shall be construed so as to impose
an  obligation  upon  PFPC  Trust (i) to seek  such  directions,  advice or Oral
Instructions  or Written  Instructions,  or (ii) to act in accordance  with such
directions,  advice or Oral Instructions or Written  Instructions  unless, under
the terms of other provisions of this Agreement, the same is a condition of PFPC
Trust's  properly  taking or not taking such action.  Nothing in this subsection
shall  excuse  PFPC Trust when an action or  omission  on the part of PFPC Trust
constitutes willful misfeasance,  bad faith, negligence or reckless disregard by
PFPC Trust of any  duties,  obligations  or  responsibilities  set forth in this
Agree-ment.

7. Records;  Visits. The books and records pertaining to the Company,  which are
in the  possession  or under the control of PFPC Trust shall be the  property of
the Company. Such books and records shall be prepared and maintained as required
by the 1940 Act and other applicable securities laws, rules and regulations. The
Company and its duly authorized officers,  employees and agents and the staff of
the  Securities  and  Exchange  Commission  shall have  access to such books and
records  at all times  during  PFPC  Trust's  normal  business  hours.  Upon the
reasonable request of the Company, copies of any such books and records shall be
provided  by PFPC  Trust  to the  Company  or to an  Authorized  Person,  at the
Company's  expense.  No records will be destroyed  without the Company's written
consent.

8.  Confidentiality.  PFPC Trust agrees to keep  confidential all records of the
Company and  information  relating to the  Company and its  Members,  unless the
release of such records or information is otherwise consented to, in writing, by
the  Company.  The Company  agrees that such consent  shall not be  unreasonably
withheld  and may not be  withheld  where  PFPC Trust


                                      J-4
<PAGE>


may be exposed to civil or criminal  contempt  proceed-ings  or when required to
divulge such information or records to duly constituted authorities.

9. Cooperation with  Accountants.  PFPC Trust shall cooperate with the Company's
independent  public  accountants  and shall  take all  reasonable  action in the
performance of its obligations under this Agreement to assure that the necessary
information  is  made  available  to  such  auditors  and  accountants  for  the
expression of their opinion, as required by the Company.

10. Disaster Recovery.  PFPC Trust shall enter into and shall maintain in effect
with appropriate parties one or more agreements making reasonable provisions for
emergency use of electronic data processing equipment. In the event of equipment
failures,  PFPC Trust  shall,  at no  additional  expense to the  Company,  take
reasonable  steps to minimize  service  interruptions.  PFPC Trust shall have no
liability  with respect to the loss of data or service  interruptions  caused by
equipment  failure  provided  such loss or  interruption  is not  caused by PFPC
Trust's own willful misfeasance,  bad faith, negligence or reckless disregard of
its duties or obligations under this Agreement.

11. Year 2000  Readiness  Disclosure.  PFPC (a) has  reviewed  its  business and
operations as they relate to the services provided hereunder,  (b) has developed
or is  developing a program to remediate or replace  computer  applications  and
systems,  and (c) has  developed  a  testing  plan to test  the  remediation  or
replacement  of  computer  applications/systems,  in each case,  to address on a
timely basis the risk that certain  computer  applications/systems  used by PFPC
may be unable  to  recognize  and  perform  properly  date  sensitive  functions
involving dates prior to, including and after December 31, 1999, including dates
such as  February  29, 2000 (the "Year 2000  Challenge").  To the best of PFPC's
knowledge and belief, the reasonably  foreseeable  consequences of the Year 2000
Challenge  will not adversely  effect  PFPC's  ability to perform its duties and
obligations under this Agreement.

12.  Compensation.  As compensation for custody services  rendered by PFPC Trust
during the term of this  Agreement,  the Company will pay to PFPC Trust a fee or
fees as may be agreed to in writing  from time to time by the  Company  and PFPC
Trust.

13.  Indemnification.  The Company,  agrees to indemnify  and hold harmless PFPC
Trust and its affiliates from all taxes, charges, expenses,  assessments, claims
and liabilities  (including,  without limitation,  liabilities arising under the
Securities  Laws and any state and  foreign  Securities  and blue sky laws,  and
amendments thereto),  and expenses,  including (without  limitation)  reasonable
attorneys' fees and disbursements arising directly or indirectly from any action
or omission to act which PFPC Trust takes (i) at the request or on the direction
of or in reliance on the advice of the Company or (ii) upon Oral Instructions or
Written  Instructions;  provided,  however,  neither PFPC Trust,  nor any of its
affiliates, shall be indemnified against any liability (or any expenses incident
to such  liability)  arising out of PFPC Trust's or its  affiliates' own willful
misfeasance,  bad faith,  negligence  or reckless  disregard of its duties under
this Agreement.

14. Responsibility of PFPC Trust.


                                      J-5
<PAGE>


(a) PFPC  Trust  shall be under no duty to take  any  action  on  behalf  of the
Company   except  as  necessary  to  fulfill  its  duties  and   obligations  as
specifically set forth herein or as may be specifically  agreed to by PFPC Trust
in writing.  PFPC Trust shall be obligated to exercise care and diligence in the
performance  of its duties  hereunder,  to act in good faith and to use its best
efforts,  within reasonable  limits,  in performing  services provided for under
this  Agreement.  PFPC Trust shall be liable for any damages arising out of PFPC
Trust's  failure to perform its duties  under this  Agreement to the extent such
damages arise out of PFPC Trust's willful misfeasance,  bad faith, negligence or
reckless disregard of its duties under this Agreement.

(b) Without  limiting the generality of the foregoing or of any other  provision
of this  Agreement,  (i) PFPC Trust  shall not be liable  for losses  beyond its
control,  provided that PFPC Trust has acted in accordance  with the standard of
care set forth  above;  and (ii)  PFPC  Trust  shall  not be liable  for (A) the
validity or invalidity or authority or lack thereof of any Oral  Instruction  or
Written Instruction, notice or other instrument which conforms to the applicable
requirements of this Agreement,  and which PFPC Trust reasonably  believes to be
genuine;  or (B)  subject  to  section  10,  delays  or  errors  or loss of data
occurring by reason of circumstances beyond PFPC Trust's control, including acts
of civil or military authority, national emergencies,  fire, flood, catastrophe,
acts of God, insurrection,  war, riots or failure of the mails,  transportation,
communication or power supply.

(c)  Notwithstanding  anything in this  Agreement to the contrary,  neither PFPC
Trust nor its affiliates  shall be liable to the Company for any  consequential,
special or indirect  losses or damages  which the Company may incur or suffer by
or as a  consequence  of PFPC  Trust's  or its  affiliates'  performance  of the
services  provided  hereunder,  whether or not the  likelihood of such losses or
damages was known by PFPC Trust or its affiliates.

(d)  Notwithstanding  anything in this  Agreement to the  contrary,  the Company
shall not be liable to PFPC Trust for any  consequential,  special  or  indirect
losses or damages which PFPC Trust may incur or suffer as a consequence  of this
Agreement,  whether or not the likelihood of such losses or damages was known by
the Company.

15.  Description of Services.

(a) Delivery of the  Property.  The Company will deliver or arrange for delivery
to PFPC Trust, all the Property owned by the Company, including cash received as
a result of the  purchase of  Interests,  during the period that is set forth in
this  Agreement.  PFPC Trust will not be  responsible  for such  property  until
actual receipt.

(b)  Receipt  and  Disbursement  of  Money.  PFPC  Trust,  acting  upon  Written
Instructions,  shall open and maintain  separate accounts (each an "Account") in
the  Company's  name  using all cash  received  from or for the  account  of the
Company, subject to the terms of this Agreement.

PFPC Trust shall make cash payments from or for the Accounts only for:

(i)  purchases  of  Securities  in the name of the  Company,  PFPC Trust or PFPC
Trust's nominee or a sub-custodian or nominee thereof as provided in sub-section
(j) and  for  which  PFPC  Trust  has  received  a copy of (A) the  subscription
document, or (B) the broker's or dealer's confirmation,  or (C) payee's invoice,
as appropriate;


                                      J-6
<PAGE>


(ii) the repurchase of Interests of the Company;

(iii)   payment  of,   subject  to  Written   Instructions,   interest,   taxes,
administration,  accounting,  distribution, advisory, management fees or similar
expenses which are to be borne by the Company;

(iv)  payment  to,  subject to receipt of Written  Instructions,  the  Company's
administrator, as agent for the Members, of an amount equal to the amount of any
distributions  stated in the Written  Instructions  to be distributed in cash by
the administrator to Members, or, in lieu of paying the Company's administrator,
PFPC  Trust  may  arrange  for  the  direct   payment  of  cash   dividends  and
distributions to Members in accordance with procedures mutually agreed upon from
time  to  time  by  and  among  the  Company,   PFPC  Trust  and  the  Company's
administrator.

(v)  payments,  upon receipt of Written  Instructions  signed by one  Authorized
Person,  in connection with the conversion,  exchange or surrender of Securities
owned or  subscribed  to by the Company and held  pursuant to this  Agreement or
delivered to PFPC Trust;

(vi)  payments  of,  subject to receipt  of Written  Instructions  signed by one
Authorized  Person, the amounts of dividends received with respect to Securities
sold short;

(vii) payments made to a sub-custodian pursuant to provisions in sub-section (c)
of this Section; and

(viii) other payments, upon Written Instructions.

PFPC Trust is hereby  authorized  to endorse and  collect all checks,  drafts or
other orders for the payment of money received as custodian for the Company.

(c) Receipt of Securities; Subcustodians.

(i) PFPC Trust  shall hold all  Securities  received  by it for the Company in a
separate  account that  physically  segregates such Securities from those of any
other persons, firms or corporations, except for Securities held in a Book-Entry
System.  All such  Securities  shall be held or  disposed  of only upon  Written
Instructions of the Company pursuant to the terms of this Agreement.  PFPC Trust
shall have no power or  authority  to assign,  hypothecate,  pledge or otherwise
dispose of any such  Securities or investment,  except upon the express terms of
this Agreement or upon Written Instructions  authorizing the transaction.  In no
case may any member of the Company's Board of Managers, or any officer, employee
or agent of the Company withdraw any Securities.


At PFPC  Trust's own expense and for its own  convenience,  PFPC Trust may enter
into sub-custodian agreements with other United States banks or trust companies,
which are banks as defined by the 1940 Act, to perform duties  described in this
sub-section  (c) with  respect to domestic  assets.  Such bank or trust  company
shall have an aggregate capital, surplus and undivided profits, according to its
last published report, of at least one million dollars ($1,000,000),  if it is a
subsidiary  or  affiliate  of PFPC Trust,  or at least  twenty  million  dollars
($20,000,000)  if such bank or trust company is not a subsidiary or affiliate of
PFPC Trust. In


                                      J-7
<PAGE>


addition,  such bank or trust  company must be qualified to act as custodian and
agree  to  comply  with  the  relevant  provisions  of the  1940  Act and  other
applicable rules and  regulations,  including but not limited to, if applicable,
standards  relating to the custody of foreign  Securities.  Any such arrangement
will not be entered into without prior written notice to the Company.

PFPC Trust shall remain  responsible for the performance of all of its duties as
described in this  Agreement  and shall hold the Company  harmless  from its own
acts or omissions,  under the standards of care provided for herein and from the
acts and omissions of any sub-custodian  chosen by PFPC Trust under the terms of
this sub-section (c).

(d) Transactions  Requiring  Instructions.  Upon receipt of Oral Instructions or
Written Instructions and not otherwise,  PFPC Trust, directly or through the use
of a Book-Entry System, shall:

(i) deliver any Securities  held for the Company  against the receipt of payment
for the sale of such Securities;

(ii)  execute  and  deliver to such  persons as may be  designated  in such Oral
Instructions or Written Instructions, proxies, consents, authorizations, and any
other  instruments  received by PFPC Trust as custodian whereby the authority of
the Company as owner of any Securities may be exercised;

(iii) deliver any  Securities  to the issuer  thereof,  or its agent,  when such
Securities are called, redeemed,  retired or otherwise become payable;  provided
that, in any such case,  the cash or other  consideration  is to be delivered to
PFPC Trust;

(iv)  deliver  any  Securities  held for the  Company  against  receipt of other
Securities  or  cash  issued  or  paid  in  connection  with  the   liquidation,
reorganization,    refinancing,   tender   offer,   merger,   consolidation   or
recapitalization  of  any  corporation,   or  the  exercise  of  any  conversion
privilege;

(v) deliver any  Securities  held for the Company to any  protective  committee,
reorganization  committee or other person in connection with the reorganization,
refinancing,  merger,  consolidation,  recapitalization or sale of assets of any
corporation,  and  receive  and hold  under  the  terms of this  Agreement  such
certificates of deposit,  interim receipts or other  instruments or documents as
may be issued to it to evidence such delivery;

(vi) make such  transfer or exchanges of the assets of the Company and take such
other steps as shall be stated in said Oral Instructions or Written Instructions
to be for the purpose of  effectuating a duly  authorized  plan of  liquidation,
reorganization, merger, consolidation or recapitalization of the Company;

(vii) release  Securities  belonging to the Company to any bank or trust company
for the purpose of a pledge or  hypothecation to secure any loan incurred by the
Company; provided,  however, that Securities shall be released only upon payment
to PFPC Trust of the monies  borrowed,  except  that in cases  where  additional
collateral  is  required to secure a borrowing  already  made  subject to proper
prior authorization, further Securities may be released for that


                                      J-8
<PAGE>


purpose;  and repay such loan upon redelivery to it of the Securities pledged or
hypothecated  therefor and upon  surrender of the note or notes  evidencing  the
loan;

(viii) release and deliver  Securities  owned by the Company in connection  with
any  repurchase  agreement  entered into on behalf of the  Company,  but only on
receipt of payment  therefor;  and pay out moneys of the  Company in  connection
with such repurchase agreements, but only upon the delivery of the Securities;

(ix)  release  and  deliver  or  exchange  Securities  owned by the  Company  in
connection with any conversion of such Securities, pursuant to their terms, into
other Securities;

(x) release and deliver  Securities to a broker in connection  with the broker's
custody of margin collateral relating to futures and options transactions;

(xi)  release  and  deliver  Securities  owned by the Company for the purpose of
redeeming in kind Interests of the Company upon delivery  thereof to PFPC Trust;
and

(xii) release and deliver or exchange  Securities owned by the Company for other
purposes.

(e) Use of  Book-Entry  System.  PFPC Trust is  authorized  and  instructed on a
continuous basis, to deposit in Book-Entry  Systems all Securities  belonging to
the Company  eligible for deposit therein and to utilize  Book-Entry  Systems to
the extent  possible in connection  with  settlements  of purchases and sales of
Securities by the Company,  and  deliveries  and returns of  Securities  loaned,
subject to  repurchase  agreements  or used as  collateral  in  connection  with
borrowings.  PFPC Trust shall  continue to perform such duties until it receives
Written Instructions or Oral Instructions authorizing contrary actions.

PFPC Trust shall administer the Book-Entry System as follows:

(i) With  respect to  Securities  of the  Company  which are  maintained  in the
Book-Entry  System,  the records of PFPC Trust shall  identify by  book-entry or
otherwise those Securities belonging to the Company.

(ii) Assets of the Company  deposited in the Book-Entry System will at all times
be segregated  from any assets and cash controlled by PFPC Trust in other than a
fiduciary or custodian  capacity but may be commingled with other assets held in
such capacities.

PFPC Trust  will  provide  the  Company  with such  reports on its own system of
internal control as the Company may reasonably request from time to time.

(f)  Registration  of Securities.  All Securities held for the Company which are
issued or  issuable  only in bearer  form,  except such  Securities  held in the
Book-Entry  System,  shall  be held by PFPC  Trust in  bearer  form;  all  other
Securities  held for a Portfolio  may be  registered in the name of the Company,
PFPC Trust, a Book-Entry System, a sub-custodian, or any duly appointed nominees
of the Company,  PFPC Trust,  Book-Entry  System or  sub-custodian.  The Company
reserves the right to instruct PFPC Trust as to the method of  registration  and
safekeeping of the  Securities of the Company.  The Company agrees to furnish to
PFPC Trust  appropriate  instruments  to enable PFPC Trust to hold or deliver in
proper form for transfer, or to


                                      J-9
<PAGE>


register in the name of its nominee or in the name of the  Book-Entry  System or
in the name of another  appropriate entity, any Securities which it may hold for
the  Company  and which may from time to time be  registered  in the name of the
Company.

(g) Voting and Other  Action.  Neither PFPC Trust nor its nominee shall vote any
of the  Securities  held pursuant to this Agreement by or for the account of the
Company, except in accordance with Written Instructions. PFPC Trust, directly or
through the use of a  Book-Entry  System,  shall  execute in blank and  promptly
deliver all notices,  proxies and proxy  soliciting  materials  received by PFPC
Trust  as  custodian  to  the  registered  holder  of  such  Securities.  If the
registered  holder  is not  the  Company,  then  Written  Instructions  or  Oral
Instructions must designate the person who owns such Securities.

(h) Transactions Not Requiring Instructions.  In the absence of contrary Written
Instructions, PFPC Trust is authorized to take the following actions:

(i) Collection of Income and Other Payments.

(A) collect and receive for the account of the Company,  all income,  dividends,
distributions,  coupons,  option  premiums,  other  payments and similar  items,
included or to be included in the Property,  and, in addition,  promptly  advise
the  Company of such  receipt  and credit  such  income,  as  collected,  to the
Company's custodian account;

(B)  endorse and deposit for  collection,  in the name of the  Company,  checks,
drafts, or other orders for the payment of money;

(C) receive and hold for the account of the Company all Securities received as a
distribution on the Company's Securities as a result of a stock dividend,  share
split-up   or   reorganization,    recapitalization,   readjustment   or   other
rearrangement  or  distribution  of rights or  similar  Securities  issued  with
respect  to any  Securities  belonging  to the  Company  and held by PFPC  Trust
hereunder;

(D) present for payment and collect the amount payable upon all Securities which
may mature or be called,  redeemed,  or retired,  or otherwise become payable on
the date such Securities become payable; and

(E) take any action which may be  necessary  and proper in  connection  with the
collection and receipt of such income and other payments and the endorsement for
collection of checks, drafts, and other negotiable instruments.

(ii) Miscellaneous Transactions.

(A) PFPC  Trust is  authorized  to  deliver  or cause to be  delivered  Property
against  payment or other  consideration  or  written  receipt  therefor  in the
following cases:

(1) for examination by a broker or dealer selling for the account of the Company
in accordance with street delivery custom;

(2) for the exchange of interim receipts or temporary  Securities for definitive
Securities; and


                                      J-10
<PAGE>


(3) for transfer of  Securities  into the name of the Company or PFPC Trust or a
sub-custodian  or a  nominee  of one  of  the  foregoing,  or  for  exchange  of
Securities for a different  number of bonds,  certificates,  or other  evidence,
representing  the same aggregate face amount or number of units bearing the same
interest rate, maturity date and call provisions,  if any; provided that, in any
such case, the new Securities are to be delivered to PFPC Trust.

(B)  unless  and  until  PFPC  Trust  receives  Oral   Instructions  or  Written
Instructions to the contrary, PFPC Trust shall:

(1) pay all income items held by it which call for payment upon presentation and
hold the cash received by it upon such payment for the account of the Company;

(2) collect  interest and cash dividends  received,  with notice to the Company,
for the account of the Company;

(3) hold for the account of the Company all stock dividends,  rights and similar
Securities issued with respect to any Securities held by PFPC Trust; and

(4)  execute  as  agent  on  behalf  of  the  Company  all  necessary  ownership
certificates required by the Internal Revenue Code or the Income Tax Regulations
of the United States  Treasury  Department or under the laws of any state now or
hereafter in effect,  inserting the Company's  name, on such  certificate as the
owner of the Securities covered thereby, to the extent it may lawfully do so.

(i) Segregated Accounts.

PFPC Trust  shall upon  receipt of  Written  Instructions  or Oral  Instructions
establish and maintain  segregated  accounts on its records for and on behalf of
the  Company.  Such  accounts  may be  used to  transfer  cash  and  Securities,
including Securities in a Book-Entry System:

(A) for the purposes of compliance by the Company with the  procedures  required
by a securities,  futures or option exchange,  providing such procedures  comply
with the 1940 Act and any  releases of the SEC  relating to the  maintenance  of
segregated accounts by registered investment companies; and

(B) upon receipt of Written Instructions, for other purposes.

(j) Purchases of Securities.  PFPC Trust shall settle purchased  Securities upon
receipt of Oral Instructions or Written Instructions that specify:

(i) the name of the  issuer  and the title of the  Securities,  including  CUSIP
number if applicable;

(ii) the number of  Interests  or the  principal  amount  purchased  and accrued
interest, if any;

(iii) the date of purchase and settlement;

(iv) the purchase price per unit;


                                      J-11
<PAGE>


(v) the total amount payable upon such purchase; and

(vi) the name of the person from whom or the broker  through  whom the  purchase
was made.  PFPC Trust shall upon receipt of  Securities  purchased by or for the
Company  pay out of the moneys  held for the  account of the  Company  the total
amount  payable to the person from whom or the broker  through whom the purchase
was made,  provided  that the same  conforms to the total amount  payable as set
forth in such Oral Instructions or Written Instructions.

(k) Sales of Securities. PFPC Trust shall settle sold Securities upon receipt of
Oral Instructions or Written Instructions that specify:

(i) the name of the issuer and the title of the security, including CUSIP number
if applicable;

(ii) the number of Interests or principal amount sold, and accrued interest,  if
any;

(iii) the date of trade and settlement;

(iv) the sale price per unit;

(v) the total amount payable to the Company upon such sale;

(vi) the name of the  broker  through  whom or the  person  to whom the sale was
made; and

(vii)  the  location  to which  the  security  must be  delivered  and  delivery
deadline, if any.

PFPC Trust shall deliver the Securities upon receipt of the total amount payable
to the Company upon such sale,  provided  that the total  amount  payable is the
same  as was  set  forth  in the  Oral  Instructions  or  Written  Instructions.
Notwithstanding  the other provisions  hereof,  PFPC Trust may accept payment in
such form which is consistent with industry practice and may deliver  Securities
and arrange for payment in accordance with the customs  prevailing among dealers
in Securities.

(l) Reports; Proxy Materials.

(i) PFPC Trust shall furnish to the Company the following reports:

(A) such periodic and special reports as the Company may reasonably request;

(B) a monthly statement summarizing all transactions and entries for the account
of the Company,  listing each portfolio  security  belonging to the Company with
the adjusted  average cost of each issue and the market value at the end of such
month and stating the cash account of the Company including disbursements;

(C) the reports  required to be furnished to the Company  pursuant to Rule 17f-4
of the 1940 Act; and

(D) such other  information  as may be agreed upon from time to time between the
Company and PFPC Trust.


                                      J-12
<PAGE>


(ii) PFPC Trust shall  transmit  promptly  to the  Company any proxy  statement,
proxy  material,  notice  of a call or  conversion,  other  corporate  action or
similar  communication  received by it as custodian of the Property.  PFPC Trust
shall be under no other  obligation  to inform the Company as to such actions or
events.

(m)  Crediting  of  Accounts.  If PFPC Trust in its sole  discretion  credits an
Account with respect to (a) income,  dividends,  distributions,  coupons, option
premiums,  other  payments or similar  items on a  contractual  payment  date or
otherwise in advance of PFPC Trust's  actual  receipt of the amount due, (b) the
proceeds  of any  sale  or  other  disposition  of  assets  on  the  contractual
settlement  date or otherwise in advance of PFPC Trust's  actual  receipt of the
amount due or (c)  provisional  crediting of any amounts due, and (i) PFPC Trust
is  subsequently  unable to collect  full and final  payment  for the amounts so
credited  within a  reasonable  time  period  using  reasonable  efforts or (ii)
pursuant to standard industry practice, law or regulation PFPC Trust is required
to repay to a third party such amounts so credited,  or if any Property has been
incorrectly  credited,  PFPC  Trust  shall have the  absolute  right in its sole
discretion  without  demand to reverse any such  credit or payment,  to debit or
deduct the amount of such credit or payment from the  Account,  and to otherwise
pursue recovery of any such amounts so credited from the Company. Nothing herein
or  otherwise  shall  require  PFPC Trust to make any  advances or to credit any
amounts until PFPC Trust's actual receipt  thereof.  The Company hereby grants a
first priority contractual possessory security interest in and a right of setoff
against the assets  maintained  hereunder in the amount  necessary to secure the
return and  payment to PFPC  Trust of any  advance or credit  made by PFPC Trust
(including reasonable charges related thereto).

(n)  Collections.  All  collections of monies or other  property in respect,  or
which are to become part, of the Property (but not the safekeeping  thereof upon
receipt by PFPC Trust) shall be at the sole risk of the  Company.  If payment is
not received by PFPC Trust within a  reasonable  time after proper  demands have
been made, PFPC Trust shall notify the Company in writing,  including  copies of
all demand  letters,  any written  responses and memoranda of all oral responses
and shall await  instructions from the Company.  PFPC Trust shall not be obliged
to take legal action for collection  unless and until reasonably  indemnified to
its satisfaction. PFPC Trust shall also notify the Company as soon as reasonably
practicable whenever income due on Securities is not collected in due course and
shall provide the Company with periodic status reports of such income  collected
after a reasonable time.

16. Duration and Termination.  This Agreement shall continue until terminated by
either party upon ninety (90) days' prior  written  notice to the other party by
certified mail with confirmed receipt. In the event this Agreement is terminated
(pending  appointment of a successor to PFPC Trust or vote of the Members of the
Company to dissolve or to function  without a custodian of its cash,  Securities
or other  property),  PFPC Trust shall not  deliver  cash,  Securities  or other
property of the  Portfolios  to the  Company.  It may deliver  them to a bank or
trust company of PFPC Trust's choice,  having an aggregate capital,  surplus and
undivided  profits,  as shown by its last  published  report,  of not less  than
twenty million dollars ($20,000,000),  as a custodian for the Company to be held
under terms similar to those of this Agreement.

17.  Notices.   All  notices  and  other   communications,   including   Written
Instructions,  shall be in writing or by confirming  telegram,  cable,  telex or
facsimile  sending  device.  Notices  shall be addressed (a) if to PFPC Trust at
Airport Business Center, 200 Stevens Drive, Lester,


                                      J-13
<PAGE>

Pennsylvania  19113,  attention:  Custody Manager (b) if to the Company,  at c/o
CIBC World Markets Corp., One World Financial Center,  200 Liberty Street,  31st
Floor,  New York, NY 10281,  Attn:  Howard M. Singer or (c) if to neither of the
foregoing,  at such other address as shall have been given by like notice to the
sender of any such notice or other  communication  by the other party. If notice
is sent by confirming  telegram,  cable,  telex or facsimile  sending device, it
shall be deemed to have been given immediately. If notice is sent by first-class
mail,  it shall be deemed to have been given five days after it has been mailed.
If notice is sent by messenger, it shall be deemed to have been given on the day
it is delivered.

18.  Amendments.  This Agreement,  or any term hereof,  may be changed or waived
only by a written  amendment,  signed by the party against whom  enforcement  of
such change or waiver is sought.

19.  Delegation;  Assignment.  This  Agreement  and the rights and duties of the
parties  herein  may not be  assigned;  provided,  however,  that PFPC Trust may
assign its rights and delegate its duties hereunder at no additional cost to the
Company to any affiliate of or any majority-owned  direct or indirect subsidiary
of PFPC  Inc.  or of PNC Bank  Corp.,  provided  that (i) PFPC  Trust  gives the
Company sixty (60) days' prior written notice of such  assignment or delegation;
(ii) the assignee or delegate  agrees to comply with the relevant  provisions of
the Securities Laws; and (iii) PFPC Trust and such assignee or delegate promptly
provide  such  information  as the  Company  may  request,  and  respond to such
questions  as the Company may ask,  relative to the  assignment  or  delegation,
(including,  without  limitation) the  capabilities of the assignee or delegate.
Except as stated above,  this  Agreement may not be assigned or delegated by any
party without the written consent of each party.

20.  Counterparts.  This Agreement may be executed in two or more  counterparts,
each of which  shall be  deemed an  original,  but all of which  together  shall
constitute one and the same instrument.

21. Further Actions.  Each party agrees to perform such further acts and execute
such further documents as are necessary to effectuate the purposes hereof.

22. Miscellaneous.

(a)  Entire  Agreement.   This  Agreement  embodies  the  entire  agreement  and
understanding  between the  parties  and  supersedes  all prior  agreements  and
understandings  relating to the subject matter hereof, provided that the parties
may embody in one or more  separate  documents  their  agreement,  if any,  with
respect to delegated duties and Oral Instruc-tions.

(b) Captions.  The captions in this Agreement are included for  conve-nience  of
reference only and in no way define or delimit any of the provi-sions  hereof or
otherwise affect their construction or effect.

(c)  Governing  Law.  This  Agreement  shall be deemed to be a contract  made in
Delaware and governed by Delaware law, without regard to principles of conflicts
of law.


                                      J-14
<PAGE>


(d) Partial Invalidity. If any provision of this Agreement shall be held or made
invalid by a court decision,  statute, rule or otherwise,  the remainder of this
Agreement shall not be affected thereby.

(e) Successors and Assigns. This Agreement shall be binding upon and shall inure
to the  benefit  of the  parties  hereto  and their  respective  successors  and
permitted assigns.

(f) Facsimile Signatures. The facsimile signature of any party to this Agreement
shall constitute the valid and binding execution hereof by such party.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the day and year first above written.


PFPC TRUST COMPANY


By:

Title:


SAWGRASS FUND, L.L.C.

By:

Title:

         AUTHORIZED PERSONS APPENDIX



NAME (Type)                                       SIGNATURE


                                      J-15



Exhibit (k)(1)

                        ADMINISTRATIVE SERVICES AGREEMENT


     THIS ADMINISTRATIVE SERVICES AGREEMENT (the "Agreement") is made as of this
5th day of January,  2000, by and between CIBC World  Markets Corp.  ("CIBC WM")
and Sawgrass Fund, L.L.C. (the "Fund").

     WHEREAS, CIBC WM is in the business of providing administrative services to
investment partnerships and limited liability companies; and

     WHEREAS,   the  Fund   wishes  to  retain   CIBC  WM  to  provide   certain
administrative services;

     NOW  THEREFORE,  in  consideration  of  the  terms  and  conditions  herein
contained, the parties agree as follows:

     1.   Appointment of CIBC WM.

          (a) The Fund  hereby  retains  CIBC WM to  provide  and CIBC WM hereby
     agrees to  provide  certain  administrative  services  to the  Fund.  These
     services shall include:

          (i)       the provision of office space, telephone and utilities;

          (ii)      the provision of  administrative  and secretarial,  clerical
                    and other  personnel  as  necessary  to provide the services
                    required to be provided under this Agreement;

          (iii)     the general supervision of the entities that are retained by
                    the Fund to  provide  administrative  services  and  custody
                    services to the Fund;

          (iv)      the handling of investor  inquiries  regarding  the Fund and
                    providing   investors  with  information   concerning  their
                    investment in the Fund and capital account balances;

          (v)       monitoring  relations and  communications  between investors
                    and the Fund;

          (vi)      assisting  in  the  drafting  and  updating  of   disclosure
                    documents   relating  to  the  Fund  and  assisting  in  the
                    preparation of offering materials;

          (vii)     maintaining  and  updating  investor  information,  such  as
                    change of address and employment;


                                      K-1-1
<PAGE>

          (viii)    assisting  in  the   preparation  and  mailing  of  investor
                    subscription  documents and  confirming  the receipt of such
                    documents and investor funds;

          (ix)      assisting in the preparation of regulatory  filings with the
                    Securities  and  Exchange   Commission,   state   securities
                    regulators   and  other   Federal   and   state   regulatory
                    authorities;

          (x)       preparing reports to and other  informational  materials for
                    members and assisting in the preparation of proxy statements
                    and other member communications;

          (xi)      monitoring compliance with regulatory  requirements and with
                    the Fund's investment  objective,  policies and restrictions
                    as  established  by the Board of  Managers  of the Fund (the
                    "Board");

          (xii)     reviewing  accounting  records and financial  reports of the
                    Fund,  assisting  with  the  preparation  of  the  financial
                    reports of the Fund and  acting as  liaison  with the Fund's
                    accounting agent and independent auditors;

          (xiii)    assisting in preparation and filing of tax returns;

          (xiv)     coordinating  and  organizing  meetings  of  the  Board  and
                    meetings  of the  members  of the  Fund,  in each  case when
                    called by such persons;

          (xv)      preparing  materials and reports for use in connection  with
                    meetings of the Board;

          (xvi)     maintaining  and  preserving  those books and records of the
                    Fund not maintained by CIBC  Oppenheimer  Advisers,  L.L.C.,
                    the Fund's investment  adviser (the "Adviser") or the Fund's
                    accounting agent or custodian;

          (xvii)    reviewing  and  arranging for payment of the expenses of the
                    Fund;

          (xviii)   assisting  the Fund in  conducting  offers to members of the
                    Fund to repurchase member interests; and

          (xix)     reviewing and approving all  regulatory  filings of the Fund
                    required under applicable law.

     (b)  Notwithstanding  the appointment of CIBC WM to provide  administrative
services  hereunder,  the Board shall remain  responsible  for  supervising  and
controlling the management, business and affairs of the Fund.


                                      K-1-2
<PAGE>


     2.   CIBC WM Fee; Expenses.

     (a)  In  consideration  for  the  provision  by  CIBC  WM of  its  services
hereunder, the Fund will pay CIBC WM a monthly management fee of 0.08333% (1% on
annualized  basis) of the Fund's "net assets" (the "CIBC WM Fee").  "Net assets"
shall equal the total value of all assets of the Fund,  less an amount  equal to
all accrued debts,  liabilities,  and obligations of the Fund calculated  before
giving effect to any repurchases of interests.

     (b) The CIBC WM Fee will be computed based on the net assets of the Fund as
of the  start  of  business  on the  first  business  day of each  month,  after
adjustment  for any  subscriptions  effective on such date,  and will be due and
payable in arrears within five business days after the end of such month. In the
event that the CIBC WM Fee is payable  in respect of a partial  month,  such fee
will be appropriately pro-rated.

     (c) CIBC WM is responsible  for all costs and expenses  associated with the
provision  of its  services  hereunder.  The Fund  shall pay all other  expenses
associated with the conduct of its business.

     (d) The Fund  understands that CIBC WM may pay a portion of the CIBC WM Fee
to CWH Associates, Inc., a member of the Adviser.

     3.  Liability.  CIBC WM will not be  liable  for any error of  judgment  or
mistake of law or for any loss suffered by the Fund, the Managers serving on the
Board  ("Managers")  or the Fund's members in connection with the performance of
its duties  under this  Agreement,  except a loss (as to which it will be liable
and  will  indemnify  and  hold  harmless  the  Fund)   resulting  from  willful
misfeasance,  bad faith or gross negligence on CIBC WM's part (or on the part of
an officer or employee of CIBC WM) in the performance of its duties hereunder or
reckless disregard by it of its duties under this Agreement.

     4. Effective Date and Termination. This Agreement shall become effective as
of the date first noted above, and shall remain in effect for an initial term of
two years from the date of its effectiveness. This Agreement may be continued in
effect from year to year after its initial term provided  that such  continuance
is  approved  annually  by the Board,  including  the vote of a majority  of the
Managers  who are not  "interested  persons"  of the  Fund,  as  defined  by the
Investment  Company Act of 1940 and the rules thereunder (the "1940 Act").  This
Agreement may be terminated by CIBC WM, by the Board or by vote of a majority of
the outstanding voting securities of the Fund at any time, in each case upon not
less than 60 days' prior written  notice.  This  Agreement  shall also terminate
automatically  in the event of its  "assignment," as such term is defined by the
1940 Act.

     5. Entire Agreement.This Agreement embodies the entire understanding of the
parties. This Agreement cannot be altered, amended,  supplemented,  or abridged,
or any provisions waived except by written agreement of the parties.

     6.  Choice of Law.  This  Agreement  shall be  construed  and  enforced  in
accordance with the laws of the State of New York and the 1940 Act. In the event
the laws of New York  conflict with the 1940 Act, the  applicable  provisions of
the 1940 Act shall control.


                                      K-1-3
<PAGE>



     IN WITNESS WHEREOF,  the parties have executed this Agreement as of the day
and year first above written.


                                        CIBC WORLD MARKETS CORP.


                                        By:
                                             ----------------------------------
                                             Name:
                                             Title:



                                        SAWGRASS FUND, L.L.C.


                                        By:
                                             ----------------------------------
                                             Name:  Howard M. Singer
                                             Title: Manager


                                      K-1-4



           ADMINISTRATION, ACCOUNTING AND INVESTOR SERVICES AGREEMENT

      THIS AGREEMENT is made as of _____________, 2000 by and between SAWGRASS
FUND, L.L.C., a Delaware limited liability company, (the "Company"), and PFPC
INC., a Delaware corporation ("PFPC"), which is an indirect subsidiary of PNC
Bank Corp.

                              W I T N E S S E T H :

      WHEREAS, the Company is registered as a closed-end, non-diversified
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"); and

      WHEREAS, the Company wishes to retain PFPC to provide certain
administration and accounting services and PFPC wishes to furnish such services.

      NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, and intending to be legally bound hereby the parties hereto
agree as follows:

      1.    DEFINITIONS, AS USED IN THIS AGREEMENT:

            (a) "1933 Act" means the Securities Act of 1933, as amended.

            (b) "1934 Act" means the Securities Exchange Act of 1934, as
amended.

            (c) "Authorized Person" means any officer of the Company and any
other person duly authorized by the Company's Board of Managers to give Oral
Instructions and Written Instructions on behalf of the Company and listed on the
Authorized Persons Appendix attached

                                      K-2-1

<PAGE>

hereto and made a part hereof or any amendment thereto as may be received by
PFPC. An Authorized Person's scope of authority may be limited by the Company by
setting forth such limitation in the Authorized Persons Appendix.

            (d) "CEA" means the Commodities Exchange Act, as amended.

            (e) "Board of Managers" and "Members" shall have the same meanings
as set forth in the Company's Limited Liability Agreement.

            (f) "Oral Instructions" mean oral instructions received by PFPC from
an Authorized Person or from a person reasonably believed by PFPC to be an
Authorized Person.

            (g) "SEC" means the Securities and Exchange Commission.

            (h) "Securities Laws" means the 1933 Act, the 1934 Act, the 1940 Act
and the CEA.

            (i) "Written Instructions" mean written instructions signed by an
Authorized Person and received by PFPC. The instructions may be delivered by
hand, mail, tested telegram, cable, telex or facsimile sending device.

      2. APPOINTMENT. The Company hereby appoints PFPC to provide
administration, accounting and investor services, in accordance with the terms
set forth in this Agreement. PFPC accepts such appointment and agrees to furnish
such services.

      3. DELIVERY OF DOCUMENTS. The Company has provided or, where applicable,
will provide PFPC with the following:

            (a)   certified or authenticated copies of the resolutions of the
                  Company's Board of Managers, approving the appointment of PFPC
                  or its affiliates to provide services and approving this
                  Agreement;

            (b)   a copy of the Company's most recent effective registration
                  statement;

            (c)   a copy of the limited liability company agreement;

                                      K-2-2

<PAGE>

            (d)   a copy of the investment advisory agreement (pursuant to which
                  CIBC Oppenheimer Advisers, L.L.C., as Investment Adviser,
                  provides investment advice to the Company);

            (e)   a copy of any distribution agreement with respect to the
                  Company;

            (f)   a copy of any additional administration agreements;

            (g)   a copy of any other investor servicing agreement; and

            (h)   copies (certified or authenticated, where applicable) of any
                  and all amendments or supplements to the foregoing.

      4. COMPLIANCE WITH RULES AND REGULATIONS. PFPC undertakes to comply with
all applicable requirements of the Securities Laws, and any laws, rules and
regulations of governmental authorities having jurisdiction with respect to the
duties to be performed by PFPC hereunder. Except as specifically set forth
herein, PFPC assumes no responsibility for such compliance by the Company.

      5. INSTRUCTIONS.

            (a) Unless otherwise provided in this Agreement, PFPC shall act only
upon Oral Instructions and Written Instructions including standing Written
Instructions related to ongoing instructions received electronically.

            (b) PFPC shall be entitled to rely upon any Oral and Written
Instructions it receives from an Authorized Person (or from a person reasonably
believed by PFPC to be an Authorized Person) pursuant to this Agreement. PFPC
may assume that any Oral or Written Instruction received hereunder is not in any
way inconsistent with the provisions of organizational documents or this
Agreement or of any vote, resolution or proceeding of the

                                      K-2-3

<PAGE>

Company's Board of Managers or of the Company's Members, unless and until PFPC
receives Written Instructions to the contrary.

            (c) The Company agrees to forward to PFPC Written Instructions
confirming Oral Instructions (except where such Oral Instructions are given by
PFPC or its affiliates) and shall endeavor to ensure that PFPC receives the
Written Instructions by the close of business on the same day that such Oral
Instructions are received. The fact that such confirming Written Instructions
are not received by PFPC shall in no way invalidate the transactions or
enforceability of the transactions authorized by the Oral Instructions. Where
Oral Instructions or Written Instructions reasonably appear to have been
received from an Authorized Person, PFPC shall incur no liability to the Company
in acting upon such Oral or Written Instructions provided that PFPC's actions
comply with the other provisions of this Agreement.

      6. RIGHT TO RECEIVE ADVICE.

            (a) Advice of the Company. If PFPC is in doubt as to any action it
should or should not take, PFPC may request directions or advice, including Oral
Instructions or Written Instructions, from the Company.

            (b) Advice of Counsel. If PFPC shall be in doubt as to any question
of law pertaining to any action it should or should not take, PFPC may request
advice at its own cost from such counsel of its own choosing.

            (c) Conflicting Advice. In the event of a conflict between
directions, advice or Oral Instructions or Written Instructions PFPC receives
from the Company and the advice PFPC receives from counsel, PFPC may rely upon
and follow the advice of counsel. PFPC shall

                                      K-2-4

<PAGE>

promptly inform the Company of such conflict and PFPC shall refrain from acting
in the event of a conflict unless counsel advises PFPC that a failure to take
action is likely to result in additional loss, liability or expense. In the
event PFPC relies on the advice of counsel, PFPC remains liable for any action
or omission on the part of PFPC which constitutes willful misfeasance, bad
faith, gross negligence or reckless disregard by PFPC of any duties, obligations
or responsibilities set forth in this Agreement.

            (d) Protection of PFPC. PFPC shall be protected in any action it
takes or does not take in reliance upon directions, advice or Oral Instructions
or Written Instructions it receives from the Company or (to the extent permitted
under clause (c) above) from counsel and which PFPC believes, in good faith, to
be consistent with those directions, advice and Oral Instructions or Written
Instructions. Nothing in this section shall be construed so as to impose an
obligation upon PFPC (i) to seek such directions, advice or Oral Instructions or
Written Instructions, or (ii) to act in accordance with such directions, advice
or Oral Instructions or Written Instructions unless, under the terms of other
provisions of this Agreement, the same is a condition of PFPC's properly taking
or not taking such action. Nothing in this subsection shall excuse PFPC when an
action or omission on the part of PFPC constitutes willful misfeasance, bad
faith, gross negligence or reckless disregard by PFPC of any duties, obligations
or responsibilities set forth in this Agreement.

      7. RECORDS; VISITS.

            (a) The books and records pertaining to the Company which are in the
possession or under the control of PFPC shall be the property of the Company.
Such books and records

                                      K-2-5

<PAGE>

shall be prepared and maintained as required by the 1940 Act and other
applicable securities laws, rules and regulations. The Company and Authorized
Persons shall have access to such books and records at all times during PFPC's
normal business hours. Upon the reasonable request of the Company, copies of any
such books and records shall be provided by PFPC to the Company or to an
Authorized Person, at the Company's expense.

            (b) PFPC shall keep the following records:

                     (i)  all books and records with respect to the Company's
                          books of account;
                    (ii)  records of the Company's securities transactions;
                          and
                   (iii)  all other books and records as the Company is
                   required to maintain pursuant to Rule 31a-1 of the 1940
                   Act in connection with the services provided by PFPC
                   hereunder.

      8. CONFIDENTIALITY. PFPC agrees to keep confidential all records of the
Company and information relating to the Company and its Members, unless the
release of such records or information is otherwise consented to, in writing, by
the Company. The Company agrees that such consent shall not be unreasonably
withheld and may not be withheld where PFPC may be exposed to civil or criminal
contempt proceedings or when required to divulge such information or records to
duly constituted authorities.

      9. LIAISON WITH ACCOUNTANTS. PFPC shall act as liaison with the Company's
independent public accountants and shall provide account analyses, fiscal year
summaries, and other audit-related schedules. PFPC shall take all reasonable
action in the performance of its duties under this Agreement to assure that the
necessary information is made available to such auditors and accountants in a
timely fashion for the expression of their opinion, as required by the

                                      K-2-6

<PAGE>

Company.

      10. DISASTER RECOVERY. PFPC shall enter into and shall maintain in effect
with appropriate parties one or more agreements making reasonable provisions for
emergency use of electronic data processing equipment to the extent appropriate
equipment is available. In the event of equipment failures, PFPC shall, at no
additional expense to the Company, take reasonable steps to minimize service
interruptions. PFPC shall have no liability with respect to the loss of data or
service interruptions caused by equipment failure, provided such loss or
interruption is not caused by PFPC's own willful misfeasance, bad faith, gross
negligence or reckless disregard of its duties or obligations under this
Agreement.

      11. YEAR 2000 READINESS DISCLOSURE. PFPC (a) has reviewed its business and
operations as they relate to the services provided hereunder, (b) has developed
or is developing a program to remediate or replace computer applications and
systems, and (c) has developed a testing plan to test the remediation or
replacement of computer applications/systems, in each case, to address on a
timely basis the risk that certain computer applications/systems used by PFPC
may be unable to recognize and perform properly date sensitive functions
involving dates prior to, including and after December 31, 1999, including dates
such as February 29, 2000 (the "Year 2000 Challenge"). To the best of PFPC's
knowledge and belief, the reasonably foreseeable consequences of the Year 2000
Challenge will not adversely effect PFPC's ability to perform its duties and
obligations under this Agreement.

      12. COMPENSATION. As compensation for services rendered by PFPC during the
term of this Agreement, the Company will pay to PFPC a fee or fees as may be
agreed to in writing by

                                      K-2-7

<PAGE>

the Company and PFPC.

      13. INDEMNIFICATION. The Company agrees to indemnify and hold harmless
PFPC and its affiliates from all taxes, charges, expenses, assessments, claims
and liabilities (including, without limitation, liabilities arising under the
Securities Laws and any state or foreign securities and blue sky laws, and
amendments thereto), and expenses, including (without limitation) reasonable
attorneys' fees and disbursements arising directly or indirectly from any action
or omission to act which PFPC takes (i) at the request or on the direction of or
in reliance on the advice of the Company or (ii) upon Oral Instructions or
Written Instructions; Provided, however, neither PFPC, nor any of its
affiliates, shall be indemnified against any liability (or any expenses incident
to such liability) arising out of PFPC's or its affiliates own willful
misfeasance, bad faith, gross negligence or reckless disregard of its duties and
obligations under this Agreement.

      14. RESPONSIBILITY OF PFPC.

            (a) PFPC shall be under no duty to take any action on behalf of the
Company except as necessary to fulfill its duties and obligations as
specifically set forth herein or as may be specifically agreed to by PFPC in
writing. PFPC shall be obligated to exercise care and diligence in the
performance of its duties hereunder, to act in good faith and to use its best
efforts, within reasonable limits, in performing services provided for under
this Agreement. PFPC shall be liable for any damages arising out of PFPC's
failure to perform its duties under this Agreement to the extent such damages
arise out of PFPC's willful misfeasance, bad faith, gross negligence or reckless
disregard of such duties.

            (b) Without limiting the generality of the foregoing or of any other
provision of

                                      K-2-8

<PAGE>

this Agreement, (i) PFPC shall not be liable for losses beyond its control,
provided that PFPC has acted in accordance with the standard of care set forth
above; and (ii) PFPC shall not be liable for (A) the validity or invalidity or
authority or lack thereof of any Oral Instruction or Written Instruction, notice
or other instrument which conforms to the applicable requirements of this
Agreement, and which PFPC reasonably believes to be genuine; or (B) subject to
Section 10, delays or errors or loss of data occurring by reason of
circumstances beyond PFPC's control, including acts of civil or military
authority, national emergencies, labor difficulties, fire, flood, catastrophe,
acts of God, insurrection, war, riots or failure of the mails, transportation,
communication or power supply.

            (c) Notwithstanding anything in this Agreement to the contrary,
neither PFPC nor its affiliates shall be liable to the Company for any
consequential, special or indirect losses or damages which the Company or any
Portfolio may incur or suffer by or as a consequence of PFPC's or any
affiliates' performance of the services provided hereunder, whether or not the
likelihood of such losses or damages was known by PFPC or its affiliates.

      15. DESCRIPTION OF ACCOUNTING SERVICES ON A CONTINUOUS BASIS. PFPC will
perform the following accounting services:

            (i)   Journalize investment, income and expense activities;

            (ii)  Verify investment buy/sell trade tickets when received from
                  the investment adviser for a Portfolio in accordance with
                  PFPC's written procedures;

            (iii) Maintain individual ledgers for investment securities;

            (iv)  Maintain historical tax lots for each security;

                                      K-2-9

<PAGE>

            (v)   Record and reconcile corporate action activity and all other
                  capital changes with the Company's Adviser;

            (vi)  Reconcile cash and investment balances of the Company with the
                  Custodian, and provide the Adviser with the beginning cash
                  balance available for investment purposes;

            (vii) Update the cash availability throughout the day as required by
                  the Adviser, the Portfolio Manager or the custodian (as
                  necessary) including details of cash movements related to
                  securities and payment of Company expenses;

            (viii) Calculate contractual expenses (e.g., advisory and custody
                  fees) in accordance with the Company's Confidential
                  Memorandum;

            (ix)  Prepare quarterly the Statement of Assets and Liabilities, the
                  Statement of Operations, Statement of Changes in Partner's
                  Capital, and the Statement of Changes in Net Assets, Listing
                  of Investment and Quarterly Reports, as required for reporting
                  to the Members of the Board;

            (x)   Maintain detailed line item expense budget for the Company and
                  notify an officer of the Company of any proposed adjustments;

            (xi)  Control all disbursements and authorize such disbursements
                  from the Company's account at PNC Bank, Delaware upon Written
                  Instructions;

            (xii) Calculate capital gains and losses;

            (xiii) Determine net income;

            (xiv) Determine applicable foreign exchange gains and losses on
                  payables and receivables;

            (xv)  Interface with global custodian to monitor collection of tax
                  reclaims;

            (xvi) Calculate daily asset coverage ratio;

            (xvii) Obtain daily security market quotes from independent

                                     K-2-10

<PAGE>

                    pricing services approved by the Adviser, or if such quotes
                    are unavailable, then obtain such prices from the Adviser,
                    and in either case calculate the market value of and the
                    appreciation/depreciation on the Company's Investments;

            (xviii) Transmit or otherwise send a copy of the daily portfolio
                    valuation to the Adviser;

            (xix)   Compute net asset value with frequency to conform to the
                    terms of the Company;

            (xx)    Research portfolio accounting tax treatment for unique
                    security types; and

            (xxi)   As appropriate, compute yields, total return, expense
                    ratios, portfolio turnover rate, and, if required, portfolio
                    average dollar-weighted maturity in accordance with
                    applicable regulations.

            (xxii)  Assist with the annual audit of the Company's financial
                    statements; and

            (xxiii) Such other services as the parties agree in writing.

      16. DESCRIPTION OF ADMINISTRATION SERVICES ON A CONTINUOUS BASIS. PFPC
will perform the following administration services:

            (i)     Prepare quarterly broker security transactions summaries
                    including principal and agency transactions and related
                    commissions;

            (ii)    Prepare monthly security transaction listings;

            (iii)   Supply various normal and customary portfolio and Company
                    statistical data as requested on an ongoing basis;

            (iv)    Provide to the extent contained in accounting records
                    materials required for board reporting as may be requested
                    from time to time;

            (v)     Prepare for execution and file the Company's Federal Form
                    1065 and state tax returns;

                                     K-2-11

<PAGE>

            (vi)    Prepare and file the Company's Annual and Semi-Annual
                    Reports with the SEC on Form N-SAR via EDGAR;

            (vii)   Prepare and coordinate printing of and filing with the SEC
                    via EDGAR the Company's annual and semi-annual reports;

            (viii)  Transmit or otherwise send, to the extent practicable and
                    feasible, requested detailed information related to the
                    Members, including admission details, income, capital gains
                    and losses, and performance detail;

            (ix)    Mail Company offering materials to prospective investors;
                    and

            (x)     Mail quarterly reports of the Adviser and Semi-Annual
                    Financial Statements to investors as well as any other
                    necessary correspondence;

            (xi)    Copy the Board of Managers on routine correspondence sent to
                    Members;

            (xii)   Coordinate contractual relationships and communications
                    between the Company and its contractual service providers;
                    and

            (xiii)  Maintain certain bank accounts of the Company for authorized
                    purposes.

      17. DESCRIPTION OF INVESTOR SERVICES ON A CONTINUOUS BASIS. PFPC will
perform the following functions:

            (i)     Maintain the register of Members of the Company and enter on
                    such register all issues, transfers and repurchases of
                    interests in the Company;

            (ii)    Arrange for the calculation of the issue and repurchase
                    prices of interests in the Company in accordance with the
                    limited liability company agreement and private offering
                    memorandum; and

            (iii)   Allocate income, expenses, gains and losses to individual
                    Members' capital accounts in accordance with applicable tax
                    laws and with the private offering memorandum;

            (iv)    Calculate the Incentive Allocation in accordance with the

                                     K-2-12

<PAGE>

                    Confidential Memorandum and reallocate corresponding amounts
                    from the applicable Members' accounts to the Special
                    Advisory Account;

            (v)     Mail to Members annual Form K-1's in accordance with
                    applicable tax regulations;

            (vi)    Mail tender offers to Members for purposes of executing
                    repurchases;

            (vii)   Retain in a safe place Share Registers and transfer forms
                    for a period of at least six years from the time of
                    execution;

            (viii)  Maintain and tabulate information regarding Company votes;

            (ix)    Transmit to the Board of Managers the investor data for
                    inclusion in monthly investor brokerage statements, as
                    agreed upon by the Company and PFPC;

            (x)     Mail, as applicable, quarterly reports of the Portfolio
                    Manager as requested by the Board of Managers to investors,
                    as well as any other correspondence requested by the Board
                    of Managers;

            (xi)    Transmit or otherwise send, to the extent practical and
                    feasible, requested detailed information related to the
                    Members, including admission details, income, capital gains
                    and losses, and performance detail; and

            (xii)   Mail Company offering materials to prospective investors in
                    accordance with instructions from an Authorized Person.

      18. DURATION AND TERMINATION. This Agreement shall continue until
terminated by either party on sixty (60) days' prior written notice to the other
party.

      19. NOTICES. All notices and other communications, including Written
Instructions, shall be in writing or by confirming telegram, cable, telex or
facsimile sending device. If notice is sent by confirming telegram, cable, telex
or facsimile sending device, it shall be deemed to

                                     K-2-13

<PAGE>

have been given immediately. If notice is sent by first-class mail, it shall be
deemed to have been given three days after it has been mailed. If notice is sent
by messenger, it shall be deemed to have been given on the day it is delivered.
Notices shall be addressed (a) if to PFPC, at 400 Bellevue Parkway, Wilmington,
Delaware 19809; Attn: Rene Paradis (b) if to the Company, at c/o CIBC World
Markets Corp., One World Financial Center, 200 Liberty Street, 31st Floor, New
York, NY 10281, Attn: Howard M. Singer; or (c) if to neither of the foregoing,
at such other address as shall have been provided by like notice to the sender
of any such notice or other communication by the other party.

      20. AMENDMENTS. This Agreement, or any term thereof, may be changed or
waived only by written amendment, signed by the party against whom enforcement
of such change or waiver is sought.

      21. DELEGATION; ASSIGNMENT. This Agreement and the rights and duties of
the parties herein may not be assigned; provided, however, that PFPC may assign
its rights and delegate its duties hereunder, at no additional cost to the
Company, to any affiliate of or any majority-owned direct or indirect subsidiary
of PFPC or PNC Bank Corp., provided that (i) PFPC gives the Company sixty (60)
days' prior written notice of such assignment or delegation; (ii) the assignee
or delegate agrees to comply with all relevant provisions of the Securities
Laws; and (iii) PFPC and such assignee or delegate promptly provide such
information as the Company may request, and respond to such questions as the
Company may ask, relative to the assignment or delegation, (including, without
limitation) the capabilities of the assignee or delegate. Except as stated
above, this Agreement may not be assigned or delegated by any party without the
written consent

                                     K-2-14

<PAGE>

of each party.

      22. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

      23. FURTHER ACTIONS. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof.

      24. MISCELLANEOUS.

            (a) Entire Agreement. This Agreement embodies the entire agreement
and understanding between the parties and supersedes all prior agreements and
understandings relating to the subject matter hereof, provided that the parties
may embody in one or more separate documents their agreement, if any, with
respect to delegated duties and Oral Instructions.

            (b) Captions. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.

            (c) Governing Law. This Agreement shall be deemed to be a contract
made in Delaware and governed by Delaware law, without regard to principles of
conflicts of law.

            (d) Partial Invalidity. If any provision of this Agreement shall be
held or made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.

            (e) Successors and Assigns. This Agreement shall be binding upon and
shall

                                     K-2-15

<PAGE>

inure to the benefit of the parties hereto and their respective successors and
permitted assigns.

            (f) Facsimile Signatures. The facsimile signature of any party to
this Agreement shall constitute the valid and binding execution hereof by such
party.

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.


                                    PFPC INC.

                                    By:_____________________________

                                    Title: _________________________


                                    SAWGRASS FUND, L.L.C.

                                    By:_____________________________

                                    Title: _________________________

                                     K-2-16

<PAGE>

                          AUTHORIZED PERSONS APPENDIX

NAME (Type)                               SIGNATURE

________________________________          ______________________________________


________________________________          ______________________________________


________________________________          ______________________________________


________________________________          ______________________________________


________________________________          ______________________________________


________________________________          ______________________________________


________________________________          ______________________________________


________________________________          ______________________________________


                                     K-2-17





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