May __, 2000
Board of Trustees
The Arbitrage Funds
61 West Ninth Street
New York, NY 10011
Re: SUBSCRIPTION FOR SHARES OF THE ARBITRAGE FUND (THE "FUND")
Dear Trustees:
The Water Island Capital, LLC offers to purchase from The Arbitrage Funds,
10,000 shares of beneficial interest of the Fund at a price of $10.00 per share
for an aggregate purchase price of $100,000 cash, all such shares to be validly
issued, fully paid and non-assessable upon issuance of such shares and receipt
of said payment by the Fund.
These shares are not being purchased with any present intent of distributing
or reselling the same to the public, and will be held for investment by Water
Island Capital, LLC.
Sincerely,
Water Island Capital, LLC
By:______________________
Name: JOHN S. ORRICO
Title: PRESIDENT
ACCEPTED AND AGREED to this ____ day of May __, 2000.
THE ARBITRAGE FUNDS
By:_________________________________
Name:_______________________________
Title:TRUSTEE
