<PAGE>
 
                                 EXHIBIT 10.08

<PAGE>
 
                                                                    EXHIBIT 10.8
 
                    FOREIGN EXCHANGE DESK SERVICE AGREEMENT

                                  BY AND AMONG

                       MERRILL LYNCH INTERNATIONAL BANK,

                          MERRILL LYNCH FUTURES INC.,

                      ML FUTURES INVESTMENT PARTNERS INC.

                                      AND

                     EACH OF THE FUNDS LISTED ON SCHEDULE A

                            DATED AS OF JULY 1, 1993

<PAGE>
 
                    FOREIGN EXCHANGE DESK SERVICE AGREEMENT

                       MERRILL LYNCH INTERNATIONAL BANK,
                          MERRILL LYNCH FUTURES INC.,
                      ML FUTURES INVESTMENT PARTNERS INC.
                                      AND
                     EACH OF THE FUNDS LISTED ON SCHEDULE A

                               TABLE OF CONTENTS
                               -----------------

                                                                            PAGE
                                                                            ----
1.   MLF Customer Agreement..................................................  2

2.   MLIB and MLF............................................................  2

3.   Equal Terms.............................................................  3

4.   "Chinese Wall" Procedures...............................................  3

5.   Access..................................................................  3

6.   Trading Procedures......................................................  3

7.   Service Fee.............................................................  4

8.   Expenses................................................................  4

9.   Errors..................................................................  4

10.  Choice of Counterparties; MLFIP Review..................................  5
 
11.  Currencies Traded.......................................................  5
 
12.  Additional Credit Lines.................................................  5
 
13.  CTA Option not to Trade Through the F/X Desk............................  5
 
14.  Confidentiality.........................................................  5
 
15.  Form of Confirmations...................................................  6
 
16.  Separate Accounting.....................................................  6
 
17.  Records of Service Fees.................................................  6
 
18.  Net Asset Valuations....................................................  6

                                      -i-
<PAGE>
 
19.   Supervision......................................... 6
 
20.   No ERISA Funds...................................... 6
 
21.   Response to Inquiries............................... 7
 
22.   Disclosure.......................................... 7
 
23.   Audit of F/X Desk................................... 7
 
24.   Governing Law....................................... 7
 
 
Schedule A:  Funds Party to the F/X Desk
             Service Agreement as of July 1, 1993....... A-1
Appendix I:  Trading Procedures to be
             Monitored by MLFIP...................... APPI-1
Appendix II: "Chinese Wall" Procedures.............. APPII-1
 

                                      -ii-
<PAGE>
 
                    FOREIGN EXCHANGE DESK SERVICE AGREEMENT

                       MERRILL LYNCH INTERNATIONAL BANK,
                          MERRILL LYNCH FUTURES INC.,
                      ML FUTURES INVESTMENT PARTNERS INC.
                                      AND
                    EACH OF THE FUNDS LISTED ON SCHEDULE A


     This Agreement dated as of July 1, 1993 by and among Merrill Lynch
International Bank ("MLIB"), Merrill Lynch Futures Inc. ("MLF"), ML Futures
Investment Partners Inc. ("MLFIP") and each of the funds (collectively, the
"Funds") identified on Schedule A hereto, as the same may be amended from time
to time by agreement among MLIB, MLF and MLFIP, of which MLFIP is the Sponsor,
General Partner or Trading Manager, as the case may be.

     WHEREAS, MLIB, MLF and MLFIP have agreed to establish and operate a service
desk (the "F/X Desk") to assist the Funds and other clients introduced by
Merrill Lynch affiliates (the Funds and such other clients being hereinafter
collectively referred to as "Clients") in effecting off-exchange currency trades
("F/X trades") (i) through both MLF and MLIB with third-party counterparties
and/or (ii) through MLF with MLIB, in each case in the over-the-counter, inter-
dealer, inter-bank market;

     WHEREAS, only Clients qualified under Part 35 of the regulations of the
Commodity Futures Trading Commission (the "CFTC") will be permitted to utilize
the F/X Desk;

     WHEREAS, Clients other than the Funds will execute other documentation in
connection with their use of the F/X Desk, subject to the provisions of Section
3 hereof;

     WHEREAS, all trades executed through the F/X Desk will be executed as
principal trades either:  (i) between MLIB and MLF at a competitive "bid-asked"
spread, with MLF entering into a back-to-back transaction, without mark-up or
spread, with the appropriate Clients; or (ii) between MLIB and a third-party
counterparty with a back-to-back transaction executed between MLIB and MLF and,
in turn, between MLF and the appropriate Clients, without mark-up or spread
other than the Service Fee described herein, in each case as determined pursuant
to the Trading Procedures to be monitored by MLFIP referred to in Section 6
hereof;

     WHEREAS, no proprietary Merrill Lynch trading shall be permitted to take
place through the F/X Desk; and
<PAGE>
 
     WHEREAS, MLFIP as General Partner or Trading Manager of the Funds or the
Board of Directors of each of the Funds for which MLFIP serves as Sponsor, as
the case may be, has determined that it is in the best interests of the Funds to
enter into this Service Agreement in order to provide access to the increasingly
diverse and international currency markets in which certain managed futures
advisors concentrate a significant percentage of their trading and because MLFIP
is confident that doing so will reduce the overall cost of the Funds' currency
trading;

     NOW THEREFORE, in consideration of the premises and for other valuable
consideration the receipt and sufficiency of which are hereby acknowledged, each
of the Funds, respectively, MLFIP, MLIB and MLF hereby agree as follows:

1. MLF Customer Agreement
   ----------------------

     Other than in respect of the terms set forth herein, the terms of the MLF
Customer Agreement previously executed and delivered between each of the Funds
and MLFIP shall govern the Funds' F/X trading through the F/X Desk as
contemplated hereby, and such Customer Agreement is hereby restated and
incorporated herein by reference in its entirety to the extent not inconsistent
herewith.

2. MLIB and MLF
   ------------

     In F/X Desk trading with F/X Desk counterparties other than MLIB, MLIB
shall act as principal with such counterparties and then enter into a back-to-
back trade with MLF (MLIB adding the Service Fee to the contract pricing but no
mark-up or spread) which will, in turn, enter into a back-to-back trade (without
mark-up, spread or fee) with the appropriate Clients.

     In F/X Desk trading with MLIB, MLIB shall act as principal with MLF
(charging a competitive "bid-asked" spread), which will, in turn, enter into a
back-to-back trade (without mark-up, spread or fee) with the appropriate
Clients.

     MLF, not MLIB, shall be responsible for allocating positions acquired
through or with MLIB among the appropriate Clients; provided that MLFIP shall
assist in allocating positions among the appropriate Funds.

     MLF shall in all cases enter into back-to-back principal transactions with
the appropriate Clients, effectively transferring to their respective accounts
the positions taken by MLF with MLIB; provided that MLF shall remain financially
liable 

                                      -2-
<PAGE>
 
to MLIB on all such trades.  MLF shall not charge any Fund any spread or
mark-ups on any such back-to-back transactions.

     The Trading Procedures to be monitored by MLFIP to be implemented by the
F/X Desk are set forth in Appendix I hereto.

3. Equal Terms
   -----------

     All Funds will utilize the F/X Desk on substantially identical terms, and
no Client will utilize the F/X Desk on any terms more favorable than those of
the Funds.

4. "Chinese Wall" Procedures
   -------------------------

     The procedures attached hereto as Appendix II have been adopted to prevent
misuse or misappropriation of information relating to the Funds' order flow
through the F/X Desk.

     In no event shall any Merrill Lynch proprietary trading take place through
the F/X Desk (other than trading of ML Institutional Partners L.P. which may be
deemed "proprietary" to Merrill Lynch & Co., Inc. within the meaning of CFTC
Reg. 1.3 (y)).

5. Access
   ------

     MLIB, MLF and MLFIP shall provide and maintain direct access, through
dedicated telephone lines, between the F/X Desk and the advisors ("CTAs")
trading for the Funds through the F/X Desk, at no additional cost to the Funds.
In conjunction therewith, MLIB, MLF and MLFIP shall establish mutually
satisfactory procedures to assure the validity of all orders transmitted by the
CTAs.

6. Trading Procedures
   ------------------

     As set forth in Appendix I hereto, upon receipt of an F/X trade order, the
F/X Desk shall obtain a price from MLIB and at least two (2) other
counterparties.  The order shall be executed with MLIB if the price quoted by
MLIB (which will not include a Service Fee) is as good as or better than the
best price quoted by the other counterparties contacted (including the Service
Fee).  If MLIB is not making a market in a currency in which a CTA wishes to
acquire a position, the F/X Desk shall contact three (3) other counterparties
for price quotes and shall execute the trade order with the counterparty
offering the best price quote.

                                      -3-
<PAGE>
 
     MLFIP shall cause to be documented the counterparties contacted for each
F/X trade executed through the F/X Desk and the price offered by each such
counterparty.  Such documentation shall be retained by the F/X Desk pursuant to
MLFIP's standard recordkeeping procedures.

7. Service Fee
   -----------

     For the F/X Desk's services hereunder, MLFIP will receive a Service Fee, on
trades for which MLIB does not act as the ultimate counterparty, equal to one
"pip" per futures-equivalent trade on each purchase and one "pip" per futures-
equivalent trade on each sale transaction - each "pip" to be calculated in
accordance with standard industry practice.  Such Service Fee will be added as a
mark-up by MLIB on all trades executed by the F/X Desk with counterparties other
than MLIB, and promptly paid by MLIB to MLFIP.  No Service Fee will be charged
or paid on F/X trades executed with MLIB as principal rather than MLIB as back-
to-back principal with a third-party counterparty.

     MLFIP represents and warrants that, to the best of MLFIP's knowledge after
due inquiry, the Service Fee is competitive with that charged by third parties
for comparable services.  Furthermore, if, as a result of MLFIP's annual review
of the competitiveness of the operations of the F/X Desk, MLFIP determines that
the Service Fee is not competitive, MLFIP will promptly adjust such Fee so that
it becomes so.

8. Expenses
   --------

     The only cost to the Funds of utilizing the F/X Desk shall be the Service
Fees paid on trades executed through MLIB with counterparties other than MLIB
and the "bid-asked" spreads on trades executed with such counterparties and with
MLIB.  None of the Funds shall in any event pay any expenses, overhead or other
costs relating to the operation of the F/X Desk.

9. Errors
   ------

     In addition to any liability which MLIB or MLF may have in respect thereof,
MLFIP shall indemnify and hold each Fund harmless for all losses incurred or
quantifiable profits foregone as a result of any errors on the part of F/X Desk
personnel in executing trades on behalf of such Fund.  Such indemnity shall not,
however, apply to losses incurred or profits foregone as a result of technical
or telecommunication failures, counterparty errors or defaults, CTA errors or
any other cause not within the reasonable control of MLFIP.

                                      -4-
<PAGE>
 
10. Choice of Counterparties; MLFIP Review
    --------------------------------------

     MLFIP and MLF shall each have the right to approve any counterparty
proposed by MLIB, as well as to request MLIB to include a particular
counterparty in the F/X Desk group of counterparties, which request MLIB will
not unreasonably refuse; provided that MLIB need not include more than twelve
(12) counterparties in such group at any one time.  In no event shall any
counterparty other than MLIB be directly or indirectly controlled by, or under
common control with, MLFIP, MLF or MLIB.

     MLFIP will conduct, no less frequently than annually, a review of the
counterparties used by, and the general operations of, the F/X Desk in order to
evaluate their competitiveness, credit standing, service and reputation.  Each
of MLIB and MLF undertake to cooperate fully with MLFIP in such review.

11. Currencies Traded
    -----------------

     MLIB, MLFIP and MLF agree to use best efforts, upon CTA request, to include
additional currencies in the portfolio of currencies which can be traded through
the F/X Desk.

12. Additional Credit Lines
    -----------------------

     MLIB agrees to use best efforts to obtain all such additional credit lines
as may be necessary to ensure that the CTAs are able to trade currencies on
behalf of the Funds to the full extent they may deem appropriate and, if such
credit lines cannot be obtained, to make alternative arrangements so as to
permit the CTAs to do so, at no additional cost to the Funds.

13. CTA Option not to Trade Through the F/X Desk
    --------------------------------------------

     MLFIP, MLF and MLIB each agree that in the event any CTA wishes not to use
the F/X Desk to effect trades for a Fund, MLFIP, MLF and MLIB will arrange for
such CTA to trade for such Fund exclusively with MLIB through MLF without
Service Fees or margin requirements.  MLFIP will inform each CTA of the
availability of this option.  CTAs may designate specific F/X trade orders as
ones which are to be executed exclusively with MLIB on a trade by trade basis.

14. Confidentiality
    ---------------

     MLIB, MLF and MLFIP agree to keep all orders executed through the F/X Desk
strictly confidential, in accordance with industry custom, except as otherwise
required by law.  MLIB, MLF and MLFIP agree to execute such agreements or
documents as any 

                                      -5-
<PAGE>
 
CTA may reasonably require to evidence the foregoing undertaking of
confidentiality.

     MLIB, MLF and MLFIP shall observe the "Chinese Wall" procedures set forth
in Appendix II hereto in order to ensure that information relating to Clients'
F/X trades will not be misused or misappropriated.

15. Form of Confirmations
    ---------------------

     All trades executed through the F/X Desk will be confirmed by MLIB to MLF
as principal transactions, and MLF shall, in turn, confirm back-to-back
transactions with the appropriate Clients as principal trades between MLF and
such Clients carried in an "unregulated" MLF account.

16. Separate Accounting
    -------------------

     MLFIP and MLF shall account separately for all trades and all assets of
each Client, and such trades and assets shall in no event be commingled with
those of any other Client.

17. Records of Service Fees
    -----------------------

     MLIB and MLFIP shall maintain full and accurate records of all Service Fees
paid to MLIB, and all Service Fees remitted by MLIB to MLFIP, respectively.
MLFIP shall be responsible for allocating Service Fees among the Funds, and MLF
for allocating Service Fees among other Clients.

18. Net Asset Valuations
    --------------------

     MLIB will cooperate fully with MLFIP and MLF in obtaining, to the extent
reasonably practicable, valuations of the open F/X positions held by Clients,
and will attempt to provide data feeds compatible with MLFIP's existing systems.

19. Supervision
    -----------

     There shall at all times be an appropriately qualified supervising employee
assigned to the F/X Desk.

20. No ERISA Funds
    --------------

     MLFIP shall ensure that no Fund, the assets of which constitute "plan
assets" under the Employee Retirement Income Security Act of 1974 ("ERISA"),
trades through the F/X Desk.

                                      -6-
<PAGE>
 
21. Response to Inquiries
        ---------------------

     MLFIP shall use best efforts to respond to any inquiries concerning the
operation of the F/X Desk which they may receive from investors in the Funds.

22. Disclosure
    ----------

     MLFIP agrees to disclose the F/X Desk operation to all existing and
prospective Funds to the full extent that it is advised by counsel may be
necessary or appropriate.

23. Audit of F/X Desk
    -----------------

     MLIB, MLF and MLFIP agree to obtain an annual auditors' review of the F/X
Desk (which need not result in a formal audit report) so as to verify and
document compliance with the operation of the F/X Desk as contemplated hereby.
The expense of such review shall be paid by MLFIP.

24. Governing Law
    -------------

     This Service Agreement shall be governed by and construed in accordance
with the laws of the State of New York, United States of America, without regard
to principles of conflicts of law.

                                      -7-
<PAGE>
 
     IN WITNESS WHEREOF, the undersigned have executed this Agreement by their
representatives thereunto duly authorized.

                                   EACH OF THE FUNDS                     
                                   LISTED ON SCHEDULE A HERETO           
                                                                         
                                   By:  ML FUTURES INVESTMENT PARTNERS INC.
                                        General Partner/Trading Manager       
                                                                         
                                                                         
                                   By: ___________________________________
                                       Title:                              
                                                                         
                                                                         
                                   ML FUTURES INVESTMENT PARTNERS INC.   
                                                                         
                                                                         
                                   By: _______________________________   
                                       Title:                              
                                                                         
                                                                         
                                   MERRILL LYNCH FUTURES INC.            
                                                                         
                                                                         
                                   By: _______________________________   
                                       Title:                              
                                                                         
                                                                         
                                   MERRILL LYNCH INTERNATIONAL BANK      
                                                                         
                                                                         
                                   By: _______________________________   
                                       Title:                              
                                                                          
                                                                         
                                   WORLD CURRENCIES LIMITED              
                                   INTERRATE(TM) LIMITED                    
                                   ML FUTURES INVESTMENTS LTD.           
                                   CURRENCY INVESTMENT PARTNERS LTD.     
                                   SECTOR(SM) INTERNATIONAL LTD.            
                                   ML JAPAN INVESTMENT PARTNERS LTD.     
                                   ML MOUNTAIN PARTNERS LTD.             
                                   ML HYMAN BECK LTD.                    
                                   ML CHESAPEAKE LTD.                    
                                                                         
                                                                         
                                   By: _______________________________   
                                       John R. Frawley, Jr., as a          
                                       Director of each of the above         
                                         listed companies                       

                                      -8-
<PAGE>
 
                                   SCHEDULE A
                 FUNDS PARTY TO THE F/X DESK SERVICE AGREEMENT
                               AS OF JULY 1, 1993



MLFIP General Partner
---------------------

The Futures Expansion Fund Limited Partnership
The Growth and Guarantee Fund L.P.
ML Futures Investments II L.P.
ML Futures Investments L.P.
John W. Henry & Co./Millburn L.P.
The S.E.C.T.O.R. Strategy Fund(SM) L.P.
The SECTOR Strategy Fund(SM) II L.P.
The SECTOR Strategy Fund(SM) IV L.P.
The SECTOR Strategy Fund(SM) V L.P.
The SECTOR Strategy Fund(SM) VI L.P.
The JWH Global Asset Fund L.P.
The Leyden Investment Fund L.P.
ML Institutional Partners L.P.
ML Global Horizons L.P.

MLFIP Sponsor
-------------

World Currencies Limited
InterRate(TM) Limited
ML Futures Investments Ltd.
Currency Investment Partners Ltd.
SECTOR(SM) International Ltd.
ML Japan Investment Partners Ltd.
ML Mountain Partners Ltd.
ML Hyman Beck Ltd.
ML Chesapeake Ltd.

                                      A-1
<PAGE>
 
                               SCHEDULE A (CONT.)
                 FUNDS PARTY TO THE F/X DESK SERVICE AGREEMENT
                               AS OF JULY 1, 1993



MLFIP Trading Manager
---------------------

Commodity Trading Company, Ltd.    Consent: NCB Investment
                                             Services Company
                                             Limited

                                   By: _________________________
                                   Title: ______________________

                                      A-2
<PAGE>
 
                               SCHEDULE A (CONT.)
                 FUNDS PARTY TO THE F/X DESK SERVICE AGREEMENT
                               AS OF JULY 1, 1993



MLFIP Trading Manager
---------------------

Permal Commodities Ltd.        Consent:  Worms Asset
                                          Management, Inc.


                               By:  _______________________
                               Title: _____________________


                               Consent:  F.M.C. Limited
                                          Managing Director


                               By:  _______________________
                               Title: _____________________


                               Consent:  S.C.S. Limited
                                          Managing Director


                               By:  _______________________
                               Title: _____________________

                                      A-3
<PAGE>
 
                                   APPENDIX I

                               TRADING PROCEDURES
                            TO BE MONITORED BY MLFIP


A)  F/X Desk Trading Procedures
    ---------------------------

     (i)       prior to effecting any trade, the F/X Desk will ensure that there
               exist sufficient credit limits with approved counterparties;

     (ii)      the F/X Desk will provide dedicated telephone lines to facilitate
               trading;

     (iii)     upon receipt of an F/X trade order, F/X Desk personnel shall
               inquire of MLIB and two (2) counterparties unaffiliated with
               Merrill Lynch;

     (iv)      in the event that MLIB is not quoting a "bid" and "asked" price
               for a particular currency, F/X Desk personnel shall inquire of
               three (3) counterparties unaffiliated with Merrill Lynch;

     (v)       no less than six (6) counterparties other than MLIB shall be
               included in the group of counterparties contacted by the F/X
               Desk;

     (vi)      the F/X Desk need not rotate the counterparties contacted for
               price quotes provided that MLFIP reasonably believes that not
               doing so is in, or not opposed to, the best interests of the
               Clients;

     (vii)     the order of inquiry as among MLIB and the two (2) other
               counterparties contacted shall be as near to simultaneous as
               practicable;

     (viii)    trades which the F/X Desk executes with MLIB shall be executed by
               MLIB in the same manner as MLIB executes other customer trades;

     (ix)      trades shall be executed with that counterparty whose price
               quote, plus Service Fee, is the best obtained upon inquiry;
               provided that trades shall be executed with MLIB if its price
               quote, without Service Fee, is as good as or better than the best
               price quote, plus Service Fee, obtained from any other
               counterparty;

                                     APPI-1
<PAGE>
 
     (x)       in the event an F/X trade is executed with a counterparty other
               than MLIB, the Service Fee shall be added to the price quoted by
               such counterparty.  MLIB will promptly remit such Service Fee to
               MLFIP.

     (xi)      each F/X trade order, counterparties inquired of, price quotes
               received, execution price, and trade time shall be recorded and
               preserved; and

     (xii)     the F/X Desk will make its trading records available upon
               request to internal and external auditors as well as authorized
               MLFIP, MLIB and MLF personnel.

B)  CTA Direct Trading with MLIB
    ----------------------------

     (i)       MLFIP will offer each CTA the opportunity to trade on behalf of
               the Funds directly with MLIB rather than through the F/X Desk;

     (ii)      the F/X Desk will provide dedicated phone lines to facilitate
               trading (which may be the same lines used for a CTA's trading
               through the F/X Desk);

     (iii)     CTAs may designate particular trades as trades which the CTA
               wishes to be executed directly with MLIB, on a trade by trade
               basis;

     (iv)      the person or persons on the F/X Desk (the "CTA Order Handler")
               handling trades designated by CTAs to be executed directly with
               MLIB shall have no trading operations at MLFIP, MLIB or MLF other
               than receiving CTAs' orders through the F/X Desk, communicating
               these orders to the MLIB trading desk, and managing MLIB's
               position and market exposure in acting as counterparty to such
               orders;

      (v)      trades which the CTA Order Handler executes will be executed with
               MLIB's trading desk, not with MLIB's proprietary traders;

      (vi)     each F/X trade order, execution price, and trade time shall be
               recorded and preserved by the CTA Order Handler; and

      (vii)    the CTA Order Handler will make its trading records (which may be
               kept together with those of the other F/X operations) available
               upon request 

                                     APPI-2
<PAGE>
 
               to internal and external auditors as well as
               authorized MLFIP, MLIB and MLF personnel.

C)  Monitoring
    ----------

     MLFIP will monitor the F/X Desk and be responsible for the general
oversight thereof, confirming:

     (i)       that MLIB's prices quoted to the F/X Desk are consistent with
               prices quoted by MLIB to the CTA Order Handler;

     (ii)      that the F/X Desk is quoting prices in a fair and
               nondiscriminatory manner (i.e., does not always source MLIB's bid
               first or last, rotates the order in which it solicits external
               bids, and solicits such bids from competitive counterparties that
               make markets in the currency being requested);

     (iii)     that the F/X Desk records, documents and retains the bids for
               each trade, the counterparties contacted, to which counterparty
               the trade was ultimately awarded and, if effected with an
               external counterparty, the amount of the "pip" added to such
               trade;

     (iv)      that each counterparty is providing service and pricing which are
               consistently competitive;

     (v)       that the confidentiality requirements of this Service Agreement
               are being satisfied;

     (vi)      that no MLIB personnel trading for MLIB's proprietary account
               will have access to or knowledge of the transactions effected by
               the F/X Desk and that the "Chinese Wall" procedures set forth in
               Appendix II are being implemented;

     (vii)     that F/X Desk personnel effect only such trades as are
               envisioned by this Service Agreement and are not effecting other
               trades on behalf of MLIB;

     (viii)    that, on an annual basis, an audit (which need not be by
               independent public accountants as opposed to Merrill Lynch audit
               staff and which need not result in a formal audit report) is
               conducted to insure the F/X Desk's compliance with the provisions
               of this Service Agreement;

                                     APPI-3
<PAGE>
 
     (ix)      that MLIB and MLFIP has each maintained full and accurate records
               of all Service Fees paid; and

     (x)       that a netting agreement is and remains in effect between MLIB
               and MLF (and/or the Funds).

                                     APPI-4
<PAGE>
 
                                  APPENDIX II

                           "CHINESE WALL" PROCEDURES


1.   The F/X Desk and its personnel (including the CTA Order Handler):

     (i)       must be physically segregated from any persons trading on behalf
               of MLIB's proprietary account (as opposed to the MLIB trading
               desk which will be contacted by the F/X Desk and its personnel);
     (ii)      will effect trades solely as necessitated by the stated purposes
               of the F/X Desk as set forth in the Foreign Exchange Desk Service
               Agreement and will not effect any other trades on behalf of
               MLIB's proprietary account (as opposed to the MLIB trading desk
               which will be contacted by the F/X Desk and its personnel).

2.   All personnel on the F/X Desk must be Merrill Lynch employees.

3.   The F/X Desk will trade only with such external counterparties and in such
     currencies and such products as shall have been agreed upon among MLF, MLIB
     and MLFIP.

4.   The F/X Desk and its personnel will keep all orders executed by it strictly
     confidential in accordance with industry custom (except as disclosure
     thereof may be required in the course of trading or as required by law).

5.   The F/X Desk (including the CTA Order Handler) will not disclose
     information relating to any F/X Desk trades to any Merrill Lynch employee
     trading for the proprietary account of Merrill Lynch (as opposed to the
     MLIB trading desk which will be contacted by the F/X Desk and its
     personnel).

                                    APPII-1