MAVERICK FUND, LTD -EQUALIZATION AND DEPRECIATION DEPOSITS

Date5-Jan-2001
The following is the text of a letter sent to investors in Maverick Fund, Ltd:

 

"December 29, 2000

 

Dear Investor,

 

Please be advised that as of January 1st, 2001, Maverick Fund, Ltd. will

be revising the mechanism used to determine Equalization and

Depreciation Deposits. When the fund's net asset value is below the

High Water Mark or Year Beginning NAV, a depreciation deposit will not

be withheld from a subscription made at that time. Instead, the

investor will subscribe at the usual Offering Price and at the end of

the fiscal year, shares will automatically be redeemed from the

investor account to provide for any Incentive fee payable on these

shares.

 

The new mechanism is considered to be preferable as all

subscription monies will be invested in the Fund at the

subscription date. Under the previous mechanism, the amount of

subscription monies calculated as Depreciation Deposit were

held outside the fund and earned US Treasury Bill or other

short term deposit rates.

 

We will therefore be updating the wording in the Private

Placement Memorandum by removing (pg 25-26):

 

"(1) For Shares purchased at the beginning of the fiscal year ("Year

Beginning"), the Offering Price is the Year Beginning net asset value

("Beginning Value") plus a Depreciation Deposit equal to 20% of the

amount of any loss carryover per Share* at Year Beginning. The

Depreciation Deposit is invested and paid out as described in Section

2(a) below.

 

(2) For Interim Purchases:

 

(a) When the net asset value per Share is less than the sum of (i)

Beginning Value and (ii) the loss carryover per Share at Year

Beginning, the Offering Price is the sum of the net asset value per

Share and the "Depreciation Deposit". The Depreciation Deposit is 20%

of the amount by which the sum of (i) and (ii) above exceeds

the net asset value per Share at the date of purchase. The

Depreciation Deposit is segregated and separately invested in U.S.

Treasury bills or other high quality short term debt securities or

certificates of deposit and is not at risk with the investment by

Maverick Fund, Ltd. in the Fund. It may, in certain circumstances, be

returned to the shareholder at the time of redemption of the

Shares. It is included in the Offering Price to permit the Shares

purchased on the date of purchase to be charged the Performance Fee

with respect to an increase in net asset value and with respect to any

benefit received by reason of the existence of a loss carryover. If at

the end of any fiscal year (or at any time during the fiscal year when

the Shares of a shareholder are redeemed), the losses which gave rise

to the Depreciation Deposit are recouped then, to the extent that the

losses which gave rise to all or a portion of the Depreciation Deposit

are recouped, the Depreciation Deposit will be paid to the Investment

Manager as a part of the Performance Fee. Any portion of the

Depreciation Deposit not paid to the Investment Manager will be paid to

the shareholder when it becomes no longer necessary to accomplish the

objectives described above or upon redemption. Promptly after the end

of each fiscal year in which a Depreciation Deposit is held,

the interest (net of any income taxes payable thereon) earned thereon

will be paid to the shareholder who made such Depreciation Deposit."

 

and replacing it with the following wording:

 

"Certain adjustments are required at the end of the fiscal year if

shares are purchased during a fiscal year at a time when the net asset

value per share is less than the Beginning Value or if shares are

purchased at the beginning of the fiscal year where there is a loss

carryover. These adjustments will be made so that the purchasers of

those shares will be charged an Incentive Fee equal to 20% of the net

profits allocable to those shares. These adjustments will be effected

by redeeming a sufficient number of those shares at the end of the

fiscal year so that the particular shareholder will be charged the

appropriate Incentive Fee. Similarly, an adjustment would be made to

any redemption proceeds payable if such shares are redeemed prior to

the relevant fiscal year end, and an Incentive Fee is due on allocated

profits."

 

If you have any concerns or questions pertaining to this

change, please don't hesitate to contact me directly.

 

For and on behalf of

The Irish Trust Company (Cayman) Ltd.

As Administrator

 

Michelle Boucher

Chief Financial Officer

 

* The loss carryover per Share at the beginning of any year shall be

the loss carryover per Share at the beginning of the preceding year

increased by the decrease in net asset value per Share during the

preceding year or decreased (not below zero) by the increase in net

asset value during the preceding year. "