<PAGE>

                                                                   Exhibit 10.05

                                 SELLING AGREEMENT
                                 ------------------
                               ML CHESAPEAKE L.P.

                        (A Delaware Limited Partnership)

               Private Placement of Limited Partnership Interests

                                                  Dated as of September 22, 1995

<PAGE>

                               ML CHESAPEAKE L.P.

                                SELLING AGREEMENT

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                  Page
<S>                                                                                               <C>
Section 1.  Representations and Warranties of the General Partner...............................    2

Section 2.  Representations and Warranties of the Commodity Broker..............................    4

Section 3.  Representations and Warranties of the Trading Advisor...............................    6

Section 4.  Offering and Sale of Interests......................................................    8

Section 5.  Covenants of the General Partner....................................................   10

Section 6.  Covenants of the Trading Advisor....................................................   11

Section 7.  Payment of Expenses and Fees........................................................   12

Section 8.  Conditions of Closing...............................................................   12

Section 9.  Memorandum Terms and Descriptions Controlling.......................................   18

Section 10.  Indemnification and Exculpation....................................................   19

Section 11.  Status of Parties..................................................................   20

Section 12.  Representations, Warranties and Agreements to Survive Delivery.....................   21

Section 13.  Termination........................................................................   21

Section 14.  Notices and Authority to Act.......................................................   21

Section 15.  Parties............................................................................   21

Section 16.  Governing Law......................................................................   21

Section 17.  Requirements of Law................................................................   21

Section 18.  Consent to Jurisdiction............................................................   22
</TABLE>

                                       i

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                               ML CHESAPEAKE L.P.
                        (A Delaware Limited Partnership)

               Private Placement of Limited Partnership Interests

                                SELLING AGREEMENT
                                -----------------
                                                              September 22, 1995

MERRILL LYNCH, PIERCE, FENNER
       & SMITH INCORPORATED
Merrill Lynch World Headquarters
North Tower
World Financial Center
New York, New York 10080-6106

Dear Sirs:

                  Your affiliate, Merrill Lynch Investment Partners Inc., a
Delaware corporation (referred to herein in its individual corporate capacity
and as general partner as the "General Partner"), and an initial limited partner
have caused the formation of a limited partnership pursuant to the Revised
Uniform Limited Partnership Act of the State of Delaware (the "Delaware Act")
under the name ML CHESAPEAKE L.P. (the "Partnership"), for the purposes of
engaging in speculative trading of commodity futures and forward contracts,
commodity options, and other commodity interests, implementing the techniques
and trading strategies of Chesapeake Capital Corporation, an Illinois
corporation (the "Trading Advisor"). The initial commodity broker for the
Partnership will be Merrill Lynch Futures Inc., a Delaware corporation (the
"Commodity Broker"). The exclusive selling agents for the Partnership will be
yourself and certain of your affiliates (herein sometimes collectively referred
to as the "Selling Agent").

                  The Partnership desires to increase the capital of the
Partnership as herein provided, by the sale of limited partnership interests in
the Partnership (the "Interests"), the purchasers of which will become limited
partners ("Limited Partners") in the Partnership.

                  The Commodity Broker has agreed to act as broker for the
Partnership pursuant to a customer agreement (the "Customer Agreement") between
the Commodity Broker and the Partnership.

                  The Trading Advisor has agreed to provide commodity-related
services to the Partnership pursuant to an advisory agreement (the "Advisory
Agreement") between the Trading Advisor, the General Partner and the
Partnership. The Trading Advisor has also agreed to provide various
commodity-related services to the Commodity Broker pursuant to a consulting
agreement (the "Consulting Agreement") between the Trading Advisor and the
Commodity Broker.

<PAGE>

                  Capitalized terms used herein, unless otherwise indicated,
shall have the meanings attributed to them in the Memorandum referred to below.

         Section 1. Representations and Warranties of the General
                    ---------------------------------------------
Partner.
-------
         The General Partner represents and warrants to the Commodity Broker,
the Trading Advisor and the Selling Agent as follows:

                  (a)      The Partnership has provided to the Trading Advisor
         and to the Selling Agent a Confidential Private Placement Memorandum
         and Disclosure Document dated September 22, 1995 (including the
         Appendices and Exhibits thereto and as amended and supplemented from
         time to time, the "Memorandum") relating to the sale of the Interests
         to "accredited investors" in a continuous offering exempt from
         registration under the Securities Act of 1933, as amended, pursuant to
         Section 4(2) thereof and Regulation D promulgated thereunder (together,
         the "1933 Act"), has filed two copies thereof with the Commodity
         Futures Trading Commission (the "CFTC") under the Commodity Exchange
         Act (the "Commodity Act") and one copy with the National Futures
         Association (the "NFA") in accordance with NFA Compliance Rule 2-13,
         and has filed any such amendments thereto as may have been required by
         the CFTC or any other regulatory agency, or as advised by counsel, to
         the date hereof. Except as required by law, the Partnership will not
         file any amendment or supplement to the Memorandum (and will not use
         any such amendment or supplement) which shall be reasonably objected to
         in writing by counsel to the Trading Advisor after reasonable prior
         notice.

                  (b)      The Certificate of Limited Partnership (the
         "Certificate of Limited Partnership") pursuant to which the Partnership
         has been formed and the Limited Partnership Agreement of the
         Partnership (the "Limited Partnership Agreement") each provide for the
         subscription for and sale of the Interests; all action required to be
         taken by the General Partner and the Partnership as a condition to the
         sale of the Interests to qualified subscribers therefor has been, or
         prior to each Closing Time (as defined in Section 4 hereof) will have
         been, taken; and, upon payment of the consideration therefor specified
         in all accepted Subscription Agreements and Powers of Attorney, the
         Interests will constitute valid limited partnership interests in the
         Partnership.

                  (c)      The Partnership is a limited partnership duly
         organized, validly existing and in good standing under the laws of the
         State of Delaware with full power and authority to engage in the
         business to be conducted by it, as described in the Memorandum.

                  (d)      The General Partner is a corporation duly organized,
         validly existing and in good standing under the laws of the State of
         Delaware and in good standing as a foreign corporation under the laws
         of the State of New York and in each other jurisdiction in which the
         nature or conduct of its business requires such qualification and the
         failure to so qualify would materially adversely affect the Partnership
         or the General Partner's ability to perform its obligations hereunder.

                  (e)      The Partnership and the General Partner have full
         partnership or corporate power and authority under applicable law to
         perform their respective obligations under

                                       2

<PAGE>

         the Limited Partnership Agreement, the Customer Agreement, the Advisory
         Agreement and this Agreement, as described in the Memorandum.

                  (f)      The Memorandum contains all statements and
         information required to be included therein by the Commodity Act, the
         1933 Act and the rules and regulations under each. The Memorandum does
         not contain, and will not as at any Closing Time contain, any untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements contained therein, in the light of the
         circumstances under which such statements were made, not misleading.
         This representation and warranty shall not, however, apply to any
         statement or omission in the Memorandum made in reliance upon and in
         conformity with information relating to or furnished by the Trading
         Advisor or the Selling Agent.

                  (g)      Since the respective dates as of which information is
         given in the Memorandum, except as may otherwise be stated in or
         contemplated by the Memorandum, there has not been any material adverse
         change in the condition (financial or otherwise), business or prospects
         of the General Partner or the Partnership, whether or not arising in
         the ordinary course of business.

                  (h)      The General Partner at each Closing Time will have a
         net worth sufficient in amount and satisfactory in form, as set forth
         in the opinion of Sidley & Austin, counsel for the General Partner, for
         classification of the Partnership as a partnership for Federal income
         tax purposes under current interpretations of the Internal Revenue Code
         of 1986, as amended (the "Code") and the regulations thereunder.

                  (i)      Each of this Agreement, the Limited Partnership
         Agreement and the Advisory Agreement has been duly and validly
         authorized, executed and delivered by the General Partner on behalf of
         the General Partner and the Partnership and constitutes a valid,
         binding and enforceable agreement of the General Partner and the
         Partnership in accordance with its terms. The Customer Agreement has
         been duly and validly authorized, executed and delivered by the General
         Partner on behalf of the Partnership.

                  (j)      The execution and delivery of the Limited Partnership
         Agreement, the Customer Agreement, the Advisory Agreement and this
         Agreement, the incurrence of the obligations set forth in each of such
         agreements and the consummation of the transactions contemplated
         herein, therein and in the Memorandum will not constitute a breach of,
         or default under, any instrument by which the General Partner or the
         Partnership, as the case may be, is bound or any order, rule or
         regulation applicable to the General Partner or the Partnership of any
         court or any governmental body or administrative agency having
         jurisdiction over the General Partner or the Partnership.

                  (k)      There is not pending or, to the best of the General
         Partner's knowledge, threatened any action, suit or proceeding before
         or by any court or other governmental body to which the General Partner
         or the Partnership is a party, or to which any of the assets of the
         General Partner or the Partnership is subject, which is not referred to
         in the Memorandum and which might reasonably be expected to result in
         any material adverse change in the condition (financial or otherwise),
         business or prospects of the General

                                       3

<PAGE>

         Partner or the Partnership or is required to be disclosed in the
         Memorandum pursuant to applicable CFTC regulations. The General Partner
         has not received any notice of an investigation by the NFA or the CFTC
         regarding non-compliance by the General Partner with the Commodity Act
         or the regulations thereunder.

                  (l)      The General Partner has all Federal and state
         governmental, regulatory and exchange approvals and licenses, and has
         effected all filings and registrations with Federal and state
         governmental agencies required to conduct its business and to act as
         described in the Memorandum or required to perform its obligations as
         described under the Limited Partnership Agreement (including, without
         limitation, registration as a commodity pool operator under the
         Commodity Act and membership in the NFA as a commodity pool operator),
         and the performance of such obligations will not contravene or result
         in a breach of any provision of its certificate of incorporation,
         by-laws or any agreement, instrument, order, law or regulation binding
         upon it. The principals of the General Partner identified in the
         Memorandum are all of the principals of the General Partner, as the
         term "principals" is defined by the CFTC regulations. Such principals
         are duly registered as such on the General Partner's commodity pool
         operator Form 7-R registration.

                  (m)      The Partnership does not require any Federal or state
         governmental, regulatory or exchange approvals or licenses, nor need
         the Partnership effect any filings or registrations with any Federal or
         state governmental agencies in order to conduct its business and to act
         as contemplated by the Memorandum and to issue and sell the Interests
         (other than filings relating solely to the offering of the Interests).

                  (n)      Neither the General Partner nor any principal or
         affiliate thereof has previously "operated" any commodity pool within
         the meaning of CFTC Regulations the performance of which is not
         disclosed in the Memorandum.

                  Section 2. Representations and Warranties of the Commodity
                             -----------------------------------------------
Broker.
------
         The Commodity Broker represents and warrants to the Partnership, the
General Partner, the Trading Advisor and the Selling Agent as follows:

                  (a)      The Commodity Broker is a corporation duly organized,
         validly existing and in good standing under the laws of the State of
         Delaware and in good standing as a foreign corporation in each other
         jurisdiction in which the nature or conduct of its business requires
         such qualification and the failure to so qualify would materially
         adversely affect the Commodity Broker's ability to perform its
         obligations hereunder or under the Customer Agreement or the Consulting
         Agreement. The Commodity Broker has full corporate power and authority
         to perform its obligations under the Customer Agreement, the Consulting
         Agreement and this Agreement, as described in the Memorandum.

                  (b)      All references to the Commodity Broker and its
         principals in the Memorandum are accurate and complete in all material
         respects, and set forth in all material respects the information
         required to be disclosed therein under the Commodity Act and the rules
         and regulations thereunder. As to the Commodity Broker and its

                                       4

<PAGE>

         principals (i) the Memorandum contains all statements and information
         required to be included therein under the Commodity Act and the rules
         and regulations thereunder, (ii) the Memorandum does not contain, and
         will not as of any Closing Time contain, any misleading or untrue
         statement of a material fact or omit to state a material fact which is
         required to be stated therein or necessary to make the statements
         contained therein not misleading, in light of the circumstances under
         which such statements were made.

                  (c)      The Commodity Broker has all Federal and state
         governmental, regulatory and exchange approvals and licenses, and has
         effected all filings and registrations with Federal and state
         governmental and regulatory agencies required to conduct its business
         and to act as described in the Memorandum or required to perform its
         obligations as described under the Customer Agreement, the Consulting
         Agreement and this Agreement (including, without limitation,
         registration of the Commodity Broker as a futures commission merchant
         under the Commodity Act and membership of the Commodity Broker as a
         futures commission merchant in the NFA), and the performance of such
         obligations will not contravene or result in a breach of any provision
         of the Commodity Broker's certificate of incorporation, by-laws or any
         agreement, instrument, order, law or regulation binding upon the
         Commodity Broker.

                  (d)      Each of the Customer Agreement, the Consulting
         Agreement and this Agreement has been duly and validly authorized,
         executed and delivered by the Commodity Broker, and each of this
         Agreement and the Consulting Agreement constitutes a valid, binding and
         enforceable agreement of the Commodity Broker in accordance with its
         terms.

                  (e)      Since the respective dates as of which information is
         given in the Memorandum, except as may otherwise be stated in or
         contemplated by the Memorandum, there has not been any material adverse
         change in the condition (financial or otherwise), business or prospects
         of the Commodity Broker, whether or not arising in the ordinary course
         of business.

                  (f)      In the ordinary course of its business, the Commodity
         Broker is engaged in civil litigation and subject to administrative
         proceedings which, in the aggregate, are not expected to have a
         material effect upon its condition, financial or otherwise. The
         Commodity Broker makes it a policy to vigorously defend civil
         litigation, reparation or arbitration proceedings brought against it
         and in almost all such proceedings currently pending against it, the
         Commodity Broker believes it has defenses which are factually and
         legally sound. Neither the Commodity Broker nor any of its principals
         have been the subject of any administrative, civil, or criminal actions
         within the five years preceding the date hereof that would be material
         to an investor's decision to purchase an Interest.

                  (g)      The execution and delivery of the Customer Agreement,
         the Consulting Agreement and this Agreement, the incurrence of the
         obligations set forth herein and therein and the consummation of the
         transactions contemplated herein and therein and in the Memorandum will
         not constitute a breach of, or default under, any instrument by which
         the Commodity Broker is bound or any order, rule or regulation
         applicable to the

                                       5

<PAGE>

         Commodity Broker of any court or any governmental body or
         administrative agency having jurisdiction over the Commodity Broker.

                  Section 3. Representations and Warranties of the Trading
Advisor. The Trading Advisor represents and warrants to the Partnership, the
Selling Agent, the Commodity Broker and the General Partner as follows:

                  (a)      The Trading Advisor is a corporation duly organized,
         validly existing and in good standing under the laws of its state of
         incorporation and in good standing as a foreign corporation in each
         other jurisdiction in which the nature or conduct of its business
         requires such qualification and the failure to so qualify would
         materially adversely affect the Trading Advisor's ability to perform
         its obligations hereunder or under the Advisory Agreement or the
         Consulting Agreement. The Trading Advisor has full power and authority
         to participate in the Partnership as described in the Memorandum.

                  (b)      All references to the Trading Advisor and its
         principals and trading systems, methods and performance in the
         Memorandum are accurate and complete in all material respects. As to
         the Trading Advisor, each of its principals, and their trading systems,
         methods and performance, (i) the Memorandum contains all statements and
         information required to be included therein under the Commodity Act and
         the rules and regulations thereunder, and (ii) the Memorandum does not
         contain, and will not as of any Closing Time contain, any untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements contained therein, in the light of the
         circumstances under which such statements were made, not misleading.
         Except as otherwise disclosed in the Memorandum, the actual performance
         of each discretionary account directed by the Trading Advisor or any
         principal or affiliate of the Trading Advisor since January 1990 is
         disclosed in the Memorandum on either a composite or a stand alone
         basis, in accordance with the requirements of the Commodity Act and the
         rules and regulations thereunder. The information regarding the actual
         performance of such accounts set forth in the Memorandum is complete
         and accurate in all material respects and complies with the disclosure
         requirements of the rules and regulations of the CFTC promulgated
         pursuant to the Commodity Act.

                  (c)      The Trading Advisor has all Federal and state
         governmental, regulatory and exchange approvals and licenses, and has
         effected all filings and registrations with Federal and state
         governmental and regulatory agencies required to conduct its business
         and to act as described in the Memorandum or required to perform its
         obligations as described under this Agreement, the Advisory Agreement
         and the Consulting Agreement (including, without limitation,
         registration of such Trading Advisor as a commodity trading advisor
         under the Commodity Act and membership of such Trading Advisor as a
         commodity trading advisor in the NFA), and the performance of such
         obligations will not contravene or result in a breach of any provision
         of the constituent documents of the Trading Advisor. The principals of
         the Trading Advisor are duly disclosed as such on the Trading Advisor's
         commodity trading advisor Form 7-R registration.

                                       6

<PAGE>

                  (d)      Each of the Advisory Agreement, this Agreement and
         the Consulting Agreement has been duly and validly authorized, executed
         and delivered by or on behalf of the Trading Advisor and each
         constitutes a valid, binding, and enforceable agreement of the Trading
         Advisor in accordance with its terms.

                  (e)      Participation by the Trading Advisor in accordance
         with the terms hereof and as described in the Memorandum will not
         violate any provisions of the Investment Advisers Act of 1940.

                  (f)      Neither the Trading Advisor nor any principal of the
         Trading Advisor will use or distribute the Memorandum or any selling
         literature or engage in any selling activities whatsoever in connection
         with the offering of the Interests, except as may be approved in
         writing by the General Partner.

                  (g)      Since the respective dates as of which information is
         given in the Memorandum, except as may otherwise be stated in or
         contemplated by the Memorandum, there has not been any material adverse
         change in the condition (financial or otherwise), business or prospects
         of the Trading Advisor, whether or not arising in the ordinary course
         of business.

                  (h)      There is not pending or, to the best of the Trading
         Advisor's knowledge, threatened any action, suit or proceeding before
         or by any court or other governmental body to which the Trading Advisor
         is a party, or to which any of the assets of the Trading Advisor is
         subject, which might reasonably be expected to result in any material
         adverse change in the condition (financial or otherwise), business or
         prospects of the Trading Advisor or is required to be disclosed in the
         Memorandum pursuant to applicable CFTC regulations. The Trading Advisor
         has not received any notice of an investigation by the NFA or the CFTC
         regarding non-compliance by the Trading Advisor with the Commodity Act
         or the regulations thereunder.

                  (i)      The execution and delivery of this Agreement, the
         Advisory Agreement and the Consulting Agreement, the incurrence of the
         obligations herein and therein set forth and the consummation of the
         transactions contemplated herein and therein and in the Memorandum will
         not constitute a breach of, or default under, any instrument by which
         the Trading Advisor is bound or any order, rule or regulation
         applicable to the Trading Advisor of any court or any governmental body
         or administrative agency having jurisdiction over the Trading Advisor.

                  (j)      The Trading Advisor has not received, and is not
         entitled to receive, directly or indirectly, any commission, finder's
         fee, similar fee, or rebate from any person in connection with the
         organization or operation of the Partnership other than as described in
         the Memorandum.

                  (k)      The actual performance capsules relating to the
         Trading Advisor in the Memorandum have been calculated in conformity
         with all applicable rules and advisories of the CFTC, including those
         relating to the inclusion of "notional" equity.

                                       7

<PAGE>

                  Section 4. Offering and Sale of Interests.
                             ------------------------------
                  (a)      The Selling Agent is hereby appointed the exclusive
         selling agent of the Partnership, except as may be otherwise approved
         by the General Partner, during the term herein specified for the
         purpose of finding acceptable subscribers who are "accredited
         investors" (as defined in the 1933 Act) through a private placement.
         Subject to the performance by the General Partner and the Trading
         Advisor of their respective obligations to be performed hereunder and
         to the completeness and accuracy in all material respects of all the
         representations and warranties of the General Partner, the Commodity
         Broker and the Trading Advisor contained herein, the Selling Agent
         hereby accepts such agency and agrees on the terms and conditions
         herein set forth to use reasonable efforts during the term hereof to
         find acceptable subscribers for the Interests, subscriptions being made
         in multiples of $1,000 with the minimum subscription being $100,000 for
         initial subscriptions and $25,000 for additional subscriptions, subject
         to reduction to not less than $50,000 in the discretion of the General
         Partner. It is understood that the Selling Agent's agreement to use
         reasonable efforts to find acceptable subscribers for the Interests
         shall not prevent it from acting as a selling agent or underwriter for
         the securities of other issuers which may be offered or sold during the
         term hereof. The agency of the Selling Agent hereunder shall continue
         until the termination of this Agreement.

                  No selling commissions will be paid from the proceeds of sales
         of Interests. The Selling Agent will be credited within the Merrill
         Lynch organization with a selling commission equal to 5% of the
         subscription price of each Interest, a portion of which will be paid to
         employees of the Selling Agent who sell the Interests from funds made
         available by the General Partner. In addition, the Selling Agent will
         receive subsequent credits of 3% per annum of the average month-end Net
         Asset Value of each outstanding Interest, payable as of the end of each
         calendar quarter. Accruals will begin with the thirteenth full month
         after such Interests are sold and will be made only in respect of
         Interests which remain outstanding at the end of the relevant month
         (including Interests redeemed as of such month-end). A portion of such
         credits will also be paid to employees of the Selling Agent who sell
         Interests from funds made available by the General Partner.

                  (b)      In the event the offering is commenced and acceptable
         subscriptions for at least $5,000,000 in subscriptions (the "Minimum
         Amount") shall not have been received by October 31, 1995 (or such
         other date on or before December 31, 1995 as to which the initial
         offering period shall be extended by the General Partner, the "Initial
         Offering Period Termination Date"), all funds received from subscribers
         shall be returned in full, with any interest payable thereon
         (irrespective of amount) and without deduction for any fees or
         expenses; and thereupon the Selling Agent's duties as agent and this
         Agreement shall terminate without further obligation hereunder on the
         part of the Selling Agent, the General Partner, the Partnership, the
         Commodity Broker or the Trading Advisor.

                  (c)      At the Initial Offering Period Termination Date, or
         at such earlier time as the General Partner may determine to terminate
         the initial offering, the General Partner shall notify the Selling
         Agent of the aggregate amount of acceptable subscriptions received by
         the General Partner and, if at least the Minimum Amount shall have been
         so

                                       8

<PAGE>

         subscribed for, then payment of the purchase price for the Interests
         shall be made at the office of the General Partner, Merrill Lynch World
         Headquarters, Sixth Floor, South Tower, World Financial Center, New
         York, New York 10080-6106, or at such other place as shall be agreed
         upon between the Selling Agent and the General Partner, at 10:00 A.M.,
         New York time, on the fifth full business day after the day on which
         the General Partner so notifies the Selling Agent or such other day and
         time as shall be agreed upon between the Selling Agent and the General
         Partner (the "Initial Closing Time").

                  (d)      Subject to the earlier termination of the offering by
         the General Partner, after the Initial Closing Time, Interests (as well
         as additional subscriptions for existing Limited Partners) will be
         offered as of the close of business on the last business day of each
         month ("Additional Closing Times"). The Initial Closing Time and the
         Additional Closing Times are herein collectively referred to as the
         "Closing Times." At 10:00 A.M. on each Additional Closing Time, payment
         of the purchase price for the acceptable subscriptions received in
         respect of such Additional Closing Time shall be made at the office of
         the General Partner set forth above, or at such other place or time as
         shall be agreed upon between the General Partner and the Selling Agent.

                  (e)      The Selling Agent will use reasonable efforts to find
         eligible persons to purchase the Interests on the terms stated herein
         and in the Memorandum. It is understood that the Selling Agent has no
         commitment with regard to the sale of the Interests other than to use
         reasonable efforts. In connection with the offer and sale of the
         Interests, the Selling Agent represents that it will comply fully with
         all applicable laws, and the rules of the National Association of
         Securities Dealers, Inc., the Securities and Exchange Commission, the
         CFTC, state securities administrators and any other regulatory body.
         The Selling Agent shall not execute any sale of an Interest from a
         discretionary account over which it has control without prior written
         approval of the customer in whose name such discretionary account is
         maintained.

                  The Selling Agent agrees not to recommend the purchase of an
         Interest to any subscriber unless the Selling Agent shall have
         reasonable grounds to believe, on the basis of information obtained
         from the subscriber concerning, among other things, the subscriber's
         investment objectives, other investments, financial situation and
         needs, that the subscriber (i) is an "accredited investor" within the
         meaning of the 1933 Act, (ii) can afford to bear the risk of a total
         loss of the subscriber's investment in the Partnership, (iii) has
         sufficient financial knowledge and experience to be capable of
         evaluating the risks and merits of an investment in the Partnership
         (either alone or together with such subscriber's financial adviser(s),
         other than a Merrill Lynch employee) and (iv) otherwise qualifies as an
         acceptable subscriber on the basis set forth in the Memorandum. The
         Selling Agent represents and warrants that it has reasonable grounds to
         believe, based on information in the Memorandum and information to
         which the Selling Agent has had access due to its affiliation with the
         General Partner, that all material facts relating to an investment in
         the Partnership are adequately and accurately disclosed in the
         Memorandum. In connection with making the foregoing representations and
         warranties, the Selling Agent further represents and warrants that it
         has, among other things, examined the Memorandum and obtained such
         additional information from the General Partner, the Commodity Broker
         and the Trading Advisor regarding the information set

                                       9

<PAGE>

         forth therein as the Selling Agent has deemed necessary or appropriate
         to determine whether the Memorandum adequately and accurately discloses
         all material facts relating to an investment in the Partnership and
         provides an adequate basis to subscribers for evaluating an investment
         in the Interests. In connection with making the representations and
         warranties set forth in this paragraph, the Selling Agent has not
         relied on inquiries made by or on behalf of any other parties.

                  The Selling Agent agrees to inform all prospective purchasers
         of Interests of all pertinent facts relating to the liquidity and
         marketability of the Interests as set forth in the Memorandum.

                  (f)      None of the Selling Agent, the Partnership or the
         General Partner shall, directly or indirectly, pay or award any
         finder's fees, commissions or other compensation to any person engaged
         by a potential investor for investment advice as an inducement to such
         advisor to advise or recommend the purchase of an Interest; provided,
         however, the normal sales commissions payable to a registered
         broker-dealer or other properly licensed person for selling Interests
         shall not be prohibited hereby.

                  (g)      All payments for subscriptions shall be made by wire
         transfers from subscribers' Merrill Lynch customer securities accounts,
         as described in the Memorandum.

                  (h)      The General Partner agrees to cause its counsel to
         prepare and deliver to the Selling Agent a Blue Sky Survey which shall
         set forth, for the guidance of the Selling Agent, the United States
         jurisdictions in which the Interests may be offered and sold. It is
         understood and agreed that the Selling Agent may rely, in connection
         with the offering and sale of Interests in any jurisdiction, on advice
         given by such counsel as to the legality of the offer or sale of the
         Interests in such jurisdiction; provided, however, that the Selling
         Agent shall be responsible for compliance with all applicable laws,
         rules and regulations with respect to the actions of its employees,
         acting as such, in connection with sales of Interests in any
         jurisdiction.

                  Section 5. Covenants of the General Partner.
                             --------------------------------
                  (a)      The General Partner will notify the Selling Agent,
         the Commodity Broker and the Trading Advisor immediately and confirm
         such notification in writing (i) of the receipt of any comments from
         the CFTC or any other Federal or state regulatory body with respect to
         the Memorandum, (ii) of any request by the CFTC or any other Federal or
         state regulatory body for any amendment or supplement to the Memorandum
         or for additional information relating thereto, (iii) any material
         criminal, civil or administrative proceedings against or involving
         either the General Partner, the Partnership or the Commodity Broker and
         (iv) of the issuance by the CFTC or any other Federal or state
         regulatory body of any order suspending the effectiveness of the CFTC
         registration or NFA membership of the General Partner as a commodity
         pool operator, or the exemption of the Interests under the Blue Sky or
         securities laws of any state or other jurisdiction or any order or
         decree enjoining the offering or the use of the then current Memorandum
         or

                                       10

<PAGE>

         of the institution, or notice of the intended institution, of any
         action or proceeding for that purpose.

                  (b)      It will deliver to the Selling Agent as promptly as
         practicable from time to time such number of copies of the Memorandum
         as the Selling Agent may reasonably request.

                  (c)      It will amend or supplement the Memorandum from time
         to time as is necessary, in its opinion, to comply with the 1933 Act,
         the Commodity Act and the CFTC regulations thereunder and will furnish
         to the Selling Agent and the Trading Advisor, at the expense of the
         General Partner, a reasonable number of copies of such amendments or
         supplements. No such amendment or supplement shall be filed without the
         approval of the Selling Agent, the Commodity Broker and the Trading
         Advisor.

                  (d)      If any event relating to or affecting the General
         Partner or the Partnership shall occur as a result of which it is
         necessary, in the reasonable opinion of the Selling Agent or the
         Trading Advisor, to amend or supplement the Memorandum in order to
         comply with the 1933 Act, the Commodity Act and the CFTC regulations
         thereunder or to make the Memorandum not materially misleading in the
         light of the circumstances existing at the time it is delivered to a
         subscriber, the General Partner and the Partnership will forthwith
         prepare and furnish to the Selling Agent and the Trading Advisor, at
         the expense of the General Partner, a reasonable number of copies of an
         amendment or amendments of, or a supplement or supplements to, the
         Memorandum which will amend or supplement the Memorandum so that as
         amended or supplemented it will comply with the 1933 Act, the Commodity
         Act and the CFTC regulations thereunder and not contain an untrue
         statement of a material fact or omit to state a material fact necessary
         in order to make the statements contained therein, in the light of the
         circumstances existing at the time the Memorandum is delivered to a
         subscriber, not misleading. No such amendment or supplement shall be
         filed without the approval of the Selling Agent, the Commodity Broker
         and the Trading Advisor.

                  (e)      It will use best efforts to exempt the offer and sale
         of the Interests from registration under applicable securities or "Blue
         Sky" laws and continue such exemption throughout the term hereof,
         provided that in no event shall the General Partner or the Partnership
         be obligated to (i) take any action which would subject it to service
         of process for lawsuits, other than for any lawsuit arising out of the
         offering or sale of the Interests, or taxes, in any jurisdiction where
         either is not now so subject, (ii) change any material term in the
         Memorandum, or (iii) expend a sum of money considered unreasonable by
         the General Partner.

                  Section 6. Covenants of the Trading Advisor.
                             --------------------------------
                  (a)      The Trading Advisor agrees to cooperate in the
         preparation of the Memorandum and of any amendments or supplements
         thereto.

                  (b)      The Trading Advisor agrees to notify the General
         Partner immediately upon discovery of any untrue or misleading
         statement regarding it, its operations or any

                                       11

<PAGE>

         of its principals, or of the occurrence of any event or change in
         circumstances which would result in there being any untrue or
         misleading statement or an omission regarding it (except with respect
         to the Trading Advisor's trading performance), its operations or any of
         its principals, in the Memorandum or result in the Memorandum not
         including all information relating to the Trading Advisor and its
         principals required pursuant to CFTC regulations. The Trading Advisor
         shall promptly inform the General Partner if it is necessary to amend
         or supplement the Memorandum in order to make the Memorandum not
         materially misleading in the light of the circumstances existing at the
         time the Memorandum is delivered to a subscriber.

         Section 7. Payment of Expenses and Fees.
                    ----------------------------
         The General Partner will pay all expenses incident to the performance
of the obligations of the General Partner and the Partnership hereunder,
including: (i) the printing or reproduction and delivery to the Selling Agent in
quantities as hereinabove stated of copies of the Memorandum and all amendments
or supplements thereto and of any supplemental sales materials; (ii) the
reproduction of this Agreement and the printing or reproduction and filing of
the Memorandum with the CFTC and NFA; (iii) the exemption of the offer and sale
of the Interests under the securities or "Blue Sky" laws in the various
jurisdictions, including filing fees and the fees and disbursements of the
General Partner's counsel incurred in connection therewith; (iv) the services of
counsel for the General Partner and the Partnership; and (v) the printing or
reproduction and delivery to the Selling Agent of such number of copies as it
may reasonably request of the Blue Sky Survey. Other than as set forth above,
each party hereto shall bear its own expenses relating hereto and to the
offering of the Interests.

                  In the event that the sale of the Interests would otherwise
occur but is prevented from occurring due to any representation or warranty of
the Trading Advisor being materially untrue as a result of the willful act of
such Trading Advisor or any of its principals either as of the date hereof or as
of the Initial Closing Time, the Trading Advisor shall pay the expenses
described in clause (i) above.

                  Section 8. Conditions of Closing. The obligations of each of
                             ---------------------
the parties hereunder at each Closing Time are subject to the accuracy of the
representations and warranties of the other parties hereto, to the performance
by such other parties of their respective obligations hereunder and to the
following further conditions:

                  (a)      At the Initial Closing Time, no objection to the
         content of the Memorandum shall have been expressed or threatened by
         the CFTC or the NFA.

                  (b)      At the Initial Closing Time, Sidley & Austin, counsel
         to the General Partner and the Partnership, shall deliver its opinion,
         in form and substance satisfactory to the parties hereto, to the effect
         that:

                           (i)      Each of the Certificate of Limited
                  Partnership pursuant to which the Partnership has been formed
                  and the Limited Partnership Agreement provides for the
                  subscription for and sale of the Interests; all action
                  required to be taken by the General Partner and the
                  Partnership as a condition to the subscription for and sale of
                  the Interests to qualified subscribers therefor has been
                  taken; and, upon

                                       12

<PAGE>

                  payment of the consideration therefor specified in the
                  accepted Subscription Agreements and Powers of Attorney, the
                  Interests will constitute valid limited partnership interests
                  in the Partnership and each subscriber who purchases an
                  Interest will become a Limited Partner, subject to the
                  requirement that each such purchaser shall have duly
                  completed, executed and delivered to the Partnership a
                  Subscription Agreement and Power of Attorney signature page
                  relating to the Interest purchased by such party, that such
                  purchaser meets all applicable suitability standards and that
                  the representations and warranties of such purchaser in the
                  Subscription Agreement and Power of Attorney are true and
                  correct.

                           (ii)     The Partnership is a limited partnership
                  duly and validly organized pursuant to the Certificate of
                  Limited Partnership, the Limited Partnership Agreement and the
                  Delaware Act, and is validly existing under the laws of the
                  State of Delaware with full power and authority to conduct the
                  business in which it proposes to engage, as described in the
                  Memorandum.

                           (iii)    The General Partner is duly organized,
                  validly existing and in good standing as a corporation under
                  the laws of the State of Delaware and is qualified to do
                  business and is in good standing as a foreign corporation
                  under the laws of the State of New York and in each other
                  jurisdiction in which the nature or conduct of its business
                  requires such qualification and the failure to so qualify
                  might reasonably be expected to materially adversely affect
                  the Partnership or the General Partner's ability to perform
                  its obligations hereunder. The General Partner has full
                  corporate power and authority to perform its obligations as
                  described hereunder and in the Memorandum.

                           (iv)     Each of the General Partner (including the
                  principals of the General Partner) and the Partnership has all
                  Federal and state governmental, regulatory and exchange
                  approvals and licenses, and has received or made all filings
                  and registrations with Federal and state governmental and
                  regulatory agencies required for each of the General Partner
                  and the Partnership to conduct its business and to act as
                  described in the Memorandum, and to the best of their
                  knowledge, none of such approvals, licenses or registrations
                  have been rescinded or revoked.

                           (v)      Each of the Limited Partnership Agreement,
                  the Advisory Agreement, the Customer Agreement and this
                  Agreement has been duly and validly authorized, executed and
                  delivered by or on behalf of the General Partner or the
                  Partnership, as the case may be, and assuming that such
                  agreements are binding on the other parties hereto, each of
                  the Limited Partnership Agreement, the Advisory Agreement, and
                  this Agreement constitutes a valid, binding and enforceable
                  agreement of the General Partner and/or the Partnership (as
                  the case may be) in accordance with its terms, subject to
                  bankruptcy, insolvency, reorganization, moratorium or similar
                  laws at the time in effect affecting the enforceability
                  generally of rights of creditors and except as enforceability
                  of indemnification provisions may be limited by applicable law
                  and the enforcement of any specific terms or remedies may be
                  unavailable.

                                       13

<PAGE>

                           (vi)     The execution and delivery of this
                  Agreement, the Limited Partnership Agreement, the Customer
                  Agreement and the Advisory Agreement, the incurrence of the
                  obligations herein and therein set forth and the consummation
                  of the transactions contemplated herein and therein and in the
                  Memorandum will not be in contravention of any of the
                  provisions of the General Partner's certificate of
                  incorporation or by-laws, or of the Limited Partnership
                  Agreement, and to the best of their knowledge, will not
                  constitute a breach of, or default under, any instrument by
                  which the General Partner or the Partnership, as the case may
                  be, is bound or any order, rule or regulation applicable to
                  the General Partner or the Partnership of any court or any
                  governmental body or administrative agency having jurisdiction
                  over the General Partner or the Partnership.

                           (vii)    There is not pending or, to the best of
                  their knowledge, threatened any action, suit or proceeding
                  before or by any court or other governmental or administrative
                  body, nor have there been any such suits, claims or
                  proceedings within the last five years, to which the General
                  Partner (or any principal of the General Partner) or the
                  Partnership is or was a party, or to which any of their assets
                  is or was subject, which are required to be, but are not,
                  disclosed in the Memorandum or which might reasonably be
                  expected to result in any material adverse change in the
                  condition (financial or otherwise), business or prospects of
                  the General Partner or the Partnership.

                           (viii)   No authorization, approval or consent of any
                  governmental or self-regulatory authority or agency is
                  necessary in connection with the subscription for and sale of
                  the Interests, except such as may be required under the
                  Commodity Act, NFA compliance rules or applicable securities
                  or "Blue Sky" laws.

                           (ix)     The terms and provisions of the Limited
                  Partnership Agreement, the Advisory Agreement, the Customer
                  Agreement and this Agreement conform in all material respects
                  to descriptions thereof, if any, contained in the Memorandum.

                           (x)      At the time the Memorandum and any
                  amendments or supplements thereto were first issued, the
                  Memorandum complied as to form in all material respects with
                  the requirements of the 1933 Act and CFTC regulations. Nothing
                  has come to their attention that would lead them to believe
                  that the Memorandum as first issued or as subsequently issued
                  (prior to the Initial Closing Time) or at the Initial Closing
                  Time contained an untrue statement of a material fact or
                  omitted to state a material fact necessary in order to make
                  the statements contained therein relating to the General
                  Partner, the Partnership or the Commodity Broker, in the light
                  of the circumstances under which they were made, not
                  misleading; provided, however, that such counsel need express
                  no opinion or belief as (A) as to the financial statements,
                  notes thereto and other financial or statistical data set
                  forth in the Memorandum or (B) as to the performance data set
                  forth in the Memorandum, except that counsel shall opine,
                  without rendering any opinion as to the accuracy of the
                  information therein, that

                                       14

<PAGE>

                  the capsule performance information set forth under
                  "Performance of Futures Funds Operated or Managed by Merrill
                  Lynch Investment Partners Inc." in the Memorandum complies as
                  to form in all material respects with CFTC Rule Section 4.25
                  (a)(3).

                           (xi)     Such counsel confirm their opinion that the
                  summary of Federal income tax consequences to Limited Partners
                  set forth under the caption "Certain Tax Information" in the
                  Memorandum accurately describes the material tax consequences
                  set forth therein and that such counsel further confirm their
                  advice to the General Partner explicitly set forth therein.

                           (xii)    Assuming operation in accordance with the
                  Memorandum, the Partnership at the Initial Closing Time is not
                  an "investment company" as that term is defined in the
                  Investment Company Act of 1940, as amended.

                  (c)      At the Initial Closing Time, Mr. William Maitland,
         counsel to the Commodity Broker, shall deliver an opinion to the effect
         that:

                           (i)      The Commodity Broker is a corporation duly
                  organized, validly existing and in good standing as a
                  corporation under the laws of the State of Delaware and is
                  qualified to do business and is in good standing as a foreign
                  corporation in each jurisdiction in which the nature or
                  conduct of its business requires such qualification and in
                  which the failure to so qualify might reasonably be expected
                  to materially adversely affect the Partnership. The Commodity
                  Broker has full corporate power and authority to perform its
                  obligations as described hereunder and in the Memorandum.

                           (ii)     The Commodity Broker has all Federal and
                  state governmental and regulatory licenses and approvals and
                  has received or made all filings and registrations with
                  Federal and state governmental and regulatory agencies
                  necessary in order for the Commodity Broker to conduct its
                  business as described in the Memorandum, and, to the best of
                  his knowledge, none of such approvals, licenses or
                  registrations have been rescinded or revoked.

                           (iii)    Each of the Customer Agreement, the
                  Consulting Agreement and this Agreement has been duly and
                  validly authorized, executed and delivered by the Commodity
                  Broker, and, assuming that such agreements are binding on the
                  other parties thereto, each of this Agreement and the
                  Consulting Agreement constitutes a valid, binding and
                  enforceable agreement of the Commodity Broker in accordance
                  with its terms, subject only to bankruptcy, insolvency,
                  reorganization, moratorium or similar laws at the time in
                  effect affecting the enforceability generally of rights of
                  creditors and that the enforcement of specific terms or
                  remedies may be unavailable.

                           (iv)     The execution and delivery of the Customer
                  Agreement, the Consulting Agreement and this Agreement, the
                  incurrence of the obligations herein and therein set forth and
                  the consummation of the transactions

                                       15

<PAGE>

                  contemplated herein, therein and in the Memorandum will not be
                  in contravention of any of the provisions of the Commodity
                  Broker's certificate of incorporation or by-laws, or, to the
                  best of his knowledge, constitute a breach of, or default
                  under, any instrument known to him by which the Commodity
                  Broker is bound or any order, rule or regulation applicable to
                  the Commodity Broker, of any court or any governmental body or
                  administrative agency having jurisdiction over the Commodity
                  Broker.

                           (v)      Nothing has come to his attention that would
                  lead him to believe that the Memorandum as first issued or as
                  subsequently issued (prior to the Initial Closing Time) or at
                  the Initial Closing Time contained an untrue statement of a
                  material fact or omitted to state a material fact necessary in
                  order to make the statements contained therein relating to the
                  Commodity Broker or its principals, in the light of the
                  circumstances under which they were made, not misleading.

                  (d)      At the Initial Closing Time, Sidley & Austin, counsel
         to the Trading Advisor, shall deliver an opinion to all other parties
         hereto to the effect that:

                           (i)      The Trading Advisor is a corporation duly
                  organized, validly existing and in good standing under the
                  laws of the state of its incorporation and is qualified to do
                  business and is in good standing in each jurisdiction in which
                  the nature or conduct of its business requires such
                  qualification and in which the failure to so qualify might
                  reasonably be expected to materially adversely affect the
                  Partnership, as described in the Memorandum. The Trading
                  Advisor has full power and authority to conduct the business
                  in which it engages and proposes to engage.

                           (ii)     The Trading Advisor (including its
                  principals) has all Federal and state governmental and
                  regulatory licenses and approvals and has received or made all
                  filings and registrations with Federal and state governmental
                  and regulatory authorities necessary in order for the Trading
                  Advisor to conduct its business as described in the
                  Memorandum (including, without limitation, performance of this
                  Agreement, the Advisory Agreement and the Consulting
                  Agreement) and, to the best of such counsel's knowledge, none
                  of such approvals, licenses or registrations has been
                  rescinded or revoked.

                           (iii)    Each of this Agreement, the Advisory
                  Agreement and the Consulting Agreement has been duly and
                  validly authorized, executed and delivered by the Trading
                  Advisor, and, assuming that such agreements are binding on the
                  other parties thereto, constitutes a valid, binding and
                  enforceable agreement of the Trading Advisor, in accordance
                  with its terms, subject only to bankruptcy, insolvency,
                  reorganization, moratorium or similar laws at the time in
                  effect affecting the enforceability generally of rights of
                  creditors and except as enforceability of the indemnification
                  provisions contained in any such agreement may be limited by
                  applicable law and the enforcement of specific terms or
                  remedies may be unavailable.

                                       16

<PAGE>

                           (iv)     The execution and delivery of this
                  Agreement, the Advisory Agreement and the Consulting
                  Agreement, the incurrence of the obligations herein and
                  therein set forth and the consummation of the transactions
                  contemplated herein, therein and in the Memorandum will not be
                  in contravention of any of the provisions of the constituent
                  documents of the Trading Advisor, and to the best of such
                  counsel's knowledge, will not constitute a breach of, or
                  default under, any instrument by which the Trading Advisor is
                  bound or any order, rule or regulation applicable to the
                  Trading Advisor of any court or any governmental body or
                  administrative agency having jurisdiction over the Trading
                  Advisor.

                           (v)      There is not pending or, to the best of such
                  counsel's knowledge, threatened any action, suit or proceeding
                  before or by any court or other governmental or administrative
                  body, nor have there been any such suits, claims or
                  proceedings within the last five years to which the Trading
                  Advisor, or any of its principals, is or was a party, or to
                  which any of their assets is or was subject, which are
                  required to be, but are not, disclosed in the Memorandum or
                  which might reasonably be expected to result in any material
                  adverse change in the condition (financial or otherwise),
                  business or prospects of such Trading Advisor.

                           (vi)     Nothing has come to such counsel's attention
                  that would lead such counsel to believe that the Memorandum as
                  first issued or as subsequently issued (prior to the Initial
                  Closing Time) or at the Initial Closing Time contained an
                  untrue statement of a material fact or omitted to state a
                  material fact necessary in order to make the statements
                  therein relating to the Trading Advisor or any of its
                  principals, in the light of the circumstances under which they
                  were made, not misleading; provided, however, that counsel
                  need express no opinion or belief (A) as to the financial
                  statements, notes thereto and other financial or statistical
                  data set forth in the Memorandum or (B) as to the performance
                  data set forth in the Memorandum, except that such counsel
                  shall opine, without rendering any opinion as to the accuracy
                  of the information in such performance capsules, that the
                  performance capsules relating to the Trading Advisor and its
                  principals set forth in the Memorandum comply as to form in
                  all material respects with CFTC Rule Section 4.25(a)(3) and
                  discussions, if any, held with the Division of Trading and
                  Markets of the CFTC.

                  (e)      At the Initial Closing Time, the General Partner
         shall deliver a certificate to the effect that: (i) the representations
         and warranties of the General Partner contained herein are true and
         correct with the same effect as though expressly made at the Initial
         Closing Time; and (ii) the General Partner has performed all covenants
         and agreements herein contained to be performed on its part at or prior
         to the Initial Closing Time. Such certificate may state that the
         General Partner has relied upon the Trading Advisor to provide certain
         information supplied by the Trading Advisor for use in the Memorandum.

                  (f)      At the Initial Closing Time, the Trading Advisor
         shall deliver a report dated as of the Initial Closing Time which shall
         present for the period from the date after the last day covered by the
         performance capsules in the Memorandum to the latest practicable day
         before the Initial Closing Time figures which constitute a continuation
         of

                                       17

<PAGE>

         such capsules and which shall certify that such figures are accurate in
         all material respects.

                  (g)      At the Initial Closing Time, the Trading Advisor
         shall deliver a certificate to the effect that (i) the representations
         and warranties of the Trading Advisor contained herein are true and
         correct with the same effect as though expressly made at the Initial
         Closing Time and (ii) the Trading Advisor has performed all covenants
         and agreements herein contained to be performed on its part at or prior
         to the Initial Closing Time.

                  (h)      At the Initial Closing Time, the Commodity Broker
         shall deliver a certificate to the effect that the representations and
         warranties of the Commodity Broker contained herein are true and
         correct with the same effect as though expressly made at the Initial
         Closing Time.

                  (i)      The Partnership shall have received a capital
         contribution of the General Partner in the amount required by the
         Limited Partnership Agreement and as described in the Memorandum.

                  (j)      Executed copies of the Limited Partnership Agreement,
         the Customer Agreement, the Consulting Agreement, the Advisory
         Agreement and this Agreement shall be delivered to all parties.

                  (k)      The parties hereto shall have been furnished with
         such additional information, opinions and documents, including
         supporting documents relating to parties described in the Memorandum
         and certificates signed by such parties with regard to information
         relating to them and included in the Memorandum as they may reasonably
         require for the purpose of enabling them to pass upon the sale of the
         Interests as herein contemplated and related proceedings, in order to
         evidence the accuracy or completeness of any of the representations or
         warranties or the fulfillment of any of the conditions herein
         contained; and all actions taken by the parties hereto in connection
         with the sale of the Interests as herein contemplated shall be
         reasonably satisfactory in form and substance to Messrs. Sidley &
         Austin and Mr. William Maitland.

                  If any of the conditions specified in this Section 8 shall not
         have been fulfilled when and as required by this Agreement to be
         fulfilled, this Agreement and all obligations hereunder may be
         cancelled by any party hereto by notifying the other parties hereto of
         such cancellation in writing or by telegram at any time at or prior to
         the Initial Closing Time, and any such cancellation or termination
         shall be without liability of any party to any other party except as
         otherwise provided in Section 7.

                  At each sale of Interests at any Additional Closing Time, the
         parties hereto shall be deemed to have restated and reaffirmed the
         representations made herein by each such party as of such Additional
         Closing Time.

                  Section 9. Memorandum Terms and Descriptions Controlling.

                  All parties hereto expressly agree that the descriptions, if
any, of this Agreement, the Consulting Agreement, the Customer Agreement and the
Advisory Agreement contained in

                                       18

<PAGE>

the Memorandum, as amended and supplemented and as identified by the General
Partner and approved by each such other party hereto, shall control against the
terms contained herein and in such agreements and contracts referred to above.

                  Section 10. Indemnification and Exculpation.

                  (a)      Indemnification by the General Partner. The General
         Partner agrees to indemnify and hold harmless the Selling Agent, the
         Partnership, the Commodity Broker and the Trading Advisor and each
         person, if any, who controls any of the foregoing within the meaning of
         Section 15 of the 1933 Act, as follows:

                           (i)      against any and all loss, liability, claim,
                  damage and expense whatsoever (including fees and
                  disbursements of counsel) arising out of any untrue statement
                  or alleged untrue statement of a material fact contained in
                  the Memorandum (or any amendment or supplement thereto) or any
                  omission or alleged omission therefrom of a material fact
                  required to be stated therein or necessary in order to make
                  the statements therein, in the light of the circumstances
                  under which they were made, not misleading; provided that the
                  Trading Advisor and its controlling persons shall not be
                  entitled to be indemnified if such untrue statement or
                  omission or alleged untrue statement or omission was made in
                  reliance upon and in conformity with information relating to
                  the Trading Advisor or any of its principals furnished or
                  approved by the Trading Advisor or any of its principals; and
                  provided further that the Selling Agent and its controlling
                  persons shall not be entitled to be indemnified if such untrue
                  statement or omission or alleged untrue statement or omission
                  was made in reliance upon and in conformity with information
                  relating to the Selling Agent furnished or approved by the
                  Selling Agent; and

                           (ii)     against any and all loss, liability, claim,
                  damage and expense whatsoever (including the fees and
                  disbursements of counsel) to the extent of the aggregate
                  amount paid in settlement of any litigation, or any
                  investigation or proceeding by any governmental agency or body
                  commenced or threatened, or of any claim whatsoever based upon
                  any such untrue statement or omission or any such alleged
                  untrue statement or omission (any settlement to be subject to
                  indemnity hereunder only if effected with the written consent
                  of the General Partner and only, in the case of the Trading
                  Advisor, to the extent of its net worth (as provided above)).

         In no case shall the General Partner be liable under this indemnity
         agreement with respect to any claim made against any indemnified party
         unless the General Partner shall be notified in writing of the nature
         of the claim within a reasonable time after the assertion thereof, but
         failure so to notify the General Partner shall not relieve the General
         Partner from any liability which it may have otherwise than on account
         of this indemnity agreement. The General Partner shall be entitled to
         participate at its own expense in the defense or, if it so elects
         within a reasonable time after receipt of such notice, to assume the
         defense of the pertinent portion of any suit so brought for which an
         indemnified party has claimed that indemnification may be due from the
         General Partner, which defense

                                       19

<PAGE>

         shall be conducted by counsel chosen by it and satisfactory to the
         indemnified party or parties, defendant or defendants therein. In the
         event that the General Partner elects to assume the defense of any such
         suit and retain such counsel, the indemnified party or parties,
         defendant or defendants in the suit, shall bear the fees and expenses
         of any additional counsel thereafter retained by it or them.

                  In no event, however, shall the General Partner be obligated
         to indemnify the Selling Agent or the Commodity Broker hereunder, and
         each of the Selling Agent and the Commodity Broker agrees not to
         attempt to obtain any indemnity from the General Partner hereunder, to
         the extent that the General Partner and the Selling Agent or the
         Commodity Broker are advised by counsel reasonably satisfactory to the
         General Partner and the Selling Agent or the Commodity Broker that
         payment of such indemnity could adversely affect the classification of
         the Partnership as a partnership for Federal income tax purposes.

                  The General Partner agrees to notify the Trading Advisor, the
         Selling Agent and the Commodity Broker within a reasonable time of the
         assertion of any claim in connection with the sale of the Interests
         against it or any of its officers or directors or any person who
         controls the General Partner within the meaning of Section 15 of the
         1933 Act.

                  (b)      Indemnification by the Trading Advisor. The Trading
         Advisor agrees to indemnify and hold harmless the Selling Agent, the
         Commodity Broker, the General Partner and the Partnership and each
         person, if any, who controls the Selling Agent, the Commodity Broker,
         the Partnership or the General Partner within the meaning of Section 15
         of the 1933 Act (and, in the case of the General Partner, each director
         of the General Partner), to the same extent as the indemnity from the
         General Partner set forth in Section 10(a) hereof, but only insofar as
         the losses, claims, damages, liabilities or expenses indemnified
         against arise out of or are based upon any materially untrue statement
         or omission or alleged materially untrue statement or omission relating
         or with respect to the Trading Advisor, or any of its principals, or
         their operations, trading systems, methods or performance, which was
         made in the Memorandum or any amendment or supplement thereto and
         furnished by such Trading Advisor and approved for inclusion therein.

                  (c)      Limitation on Certain Indemnifications and
         Exculpations. The exculpation and indemnification provisions in the
         Limited Partnership Agreement, the Consulting Agreement and the
         Advisory Agreement shall neither relieve nor indemnify the Trading
         Advisor from or against any liability it may have or incur to the
         Partnership, the General Partner, the Selling Agent or the Commodity
         Broker under this Agreement (including, without limitation, pursuant to
         the provisions of Section 10(b) hereof). The exculpation and
         indemnification provisions contained in the Limited Partnership
         Agreement shall neither relieve nor indemnify the General Partner
         against any loss, liability, damage, cost or expense it may incur under
         this Agreement.

                  Section 11. Status of Parties. In selling the Interests for
the Partnership, the Selling Agent is acting solely as agent for the Partnership
and not as principal. The Selling Agent will use its best efforts to assist the
Partnership in obtaining performance by each purchaser

                                       20

<PAGE>

whose offer to purchase Interests from the Partnership has been accepted on
behalf of the Partnership, but the Selling Agent shall not have any liability to
the Partnership in the event that Subscription Agreements and Powers of Attorney
signature pages are improperly completed or any such purchase is not consummated
for any reason. The Selling Agent shall in no respect be deemed to be an agent
of the Partnership.

                  Section 12. Representations, Warranties and Agreements to
Survive Delivery. All representations, warranties and agreements contained in
this Agreement or contained in certificates of any party hereto submitted
pursuant hereto shall remain operative and in full force and effect, regardless
of any investigation made by, or on behalf of, the Selling Agent, the General
Partner, the Partnership, the Commodity Broker, the Trading Advisor, or any
person who controls any of the foregoing, and shall survive each Closing Time in
the form restated and reaffirmed as of such Closing Time.

                  Section 13. Termination. The General Partner shall have the
right to terminate this Agreement at any time prior to the Initial Closing Time
by giving written notice of such termination to the Trading Advisor, the Selling
Agent and the Commodity Broker. In addition, this Agreement may be terminated by
either the General Partner or the Selling Agent on any anniversary of the
Initial Closing Time by such party giving ten days notice to the other parties
hereto to such effect. No such termination shall relieve the General Partner
from its obligations under Section 4(a) hereof unless the termination is based
on the Selling Agent's breach of its obligations under this Agreement.

                  Section 14. Notices and Authority to Act. All communications
hereunder shall be in writing and sent to the addresses listed on Schedule A
hereto, as the same may be changed by written notice to all parties. Notices
shall be effective when actually received.

                  Section 15. Parties. This Agreement shall inure to the benefit
of and be binding upon the Selling Agent, the Partnership, the General Partner,
the Commodity Broker, the Trading Advisor and such parties' respective
successors to the extent provided herein. This Agreement and the conditions and
provisions hereof are intended to be and are for the sole and exclusive benefit
of the parties hereto and their respective successors, assigns and controlling
persons and parties indemnified hereunder, and for the benefit of no other
person, firm or corporation. No purchaser of an Interest shall be considered to
be a successor or assign solely on the basis of such purchase.

                  Section 16. Governing Law. This Agreement and the rights and
obligations of the parties created hereby shall be governed by the laws of the
State of New York, without regard to principles of conflicts of law.

                  Section 17. Requirements of Law. Whenever in this Agreement it
is stated that a party will take or refrain from taking a particular action,
such party may nevertheless refrain from taking or take such action if advised
by counsel that doing so is required by law or advisable to ensure compliance
with law, and shall not be subject to any liability hereunder for doing so,
although such action shall permit termination of the Agreement by the other
parties hereto.

                                       21

<PAGE>

                  Section 18. Consent to Jurisdiction. The parties hereto agree
that any action or proceeding arising directly, indirectly, or otherwise in
connection with, out of, related to, or from this Agreement, any breach hereof,
or any transaction covered hereby, shall be resolved, whether by arbitration or
otherwise, within the County, City, and State of New York. Accordingly, the
parties consent and submit to the jurisdiction of the federal and state courts
and any applicable arbitral body located within the County, City, and State of
New York. The parties further agree that any such action or proceeding brought
by either party to enforce any right, assert any claim, or obtain any relief
whatsoever in connection with this Agreement shall be bought by such party
exclusively in the federal or state courts, or if appropriate before any
applicable arbitral body, located within the County, City, and State of New
York.

                  If the foregoing is in accordance with each party's
understanding of their agreement, each party is requested to sign and return to
the General Partner a counterpart hereof, whereupon this instrument along with
all counterparts will become a binding agreement among them in accordance with
its terms.

                            Very truly yours,

                            ML CHESAPEAKE L.P.

                            By: MERRILL LYNCH INVESTMENT PARTNERS
                                  INC., General Partner

                            By: /s/ Steven B. Olgin
                                --------------------------------------------
                                Name: Steven B. Olgin
                                Title: Vice President & Director, Administration

                            CHESAPEAKE CAPITAL CORPORATION

                            By: _____________________________________________
                                Name:
                                Title

                            MERRILL LYNCH FUTURES INC.

                            By: /s/ John R. Frawley, Jr.
                                --------------------------------------------
                                Name: John R. Frawley, Jr.
                                Title: Co-Chairman

                            MERRILL LYNCH INVESTMENT PARTNERS INC.

                            By: /s/ Steven B. Olgin
                                --------------------------------------------
                                Name: Steven B. Olgin
                                Title: Vice President & Director, Administration

                                       22

<PAGE>

Confirmed and accepted as of
the date first above written:

MERRILL LYNCH, PIERCE, FENNER
  & SMITH INCORPORATED

By: /s/ John R. Frawley, Jr.
   --------------------------------
   Name: John R. Frawley, Jr.
   Title: Director

                                       23

<PAGE>

this instrument along with all counterparts will become a binding agreement
among them in accordance with its terms.

                            Very truly yours,

                            ML CHESAPEAKE L.P.

                            By: MERRILL LYNCH INVESTMENT PARTNERS
                                  INC., General Partner

                            By:_____________________________________________
                               Name:
                               Title

                            CHESAPEAKE CAPITAL CORPORATION

                            By: /s/ John M. Hoade
                               --------------------------------------------
                               Name: John M. Hoade
                               Title: Executive Vice President

                            MERRILL LYNCH FUTURES INC.

                            By:_____________________________________________
                               Name:
                               Title

                            ML FUTURES INVESTMENT PARTNERS INC.

                            By:_____________________________________________
                               Name:
                               Title

Confirmed and accepted as of
the date first above written:

MERRILL LYNCH, PIERCE, FENNER
  & SMITH INCORPORATED

By:______________________________
   Name:
   Title

                                       24

<PAGE>

                                   SCHEDULE A

                              ADDRESSES OF PARTIES

ML Chesapeake Fund L.P.
c/o Merrill Lynch Investment
    Partners Inc.
Merrill Lynch World Headquarters
6th Floor, South Tower
World Financial Center
New York, New York 10080-6106

Merrill Lynch Investment
    Partners Inc.
Merrill Lynch World Headquarters
6th Floor, South Tower
World Financial Center
New York, New York 10080-6106

Merrill Lynch Futures Inc.
Two Broadway
New York, New York 10004

Merrill Lynch, Pierce, Fenner &
    Smith Incorporated
Merrill Lynch World Headquarters
North Tower
World Financial Center
New York, New York 10080-6106

Chesapeake Capital Corporation
500 Forest Avenue
Richmond, Virginia 23229