Document:

Exhibit 4.1 to Rimage Corporation Form S-8

Exhibit 4.1

 

RIMAGE CORPORATION

 

2007 STOCK INCENTIVE PLAN

 

SECTION 1

PURPOSE

 

The purpose of the 2007 Stock Incentive Plan (the “Plan”) is to enable Rimage Corporation (the “Company”) and its Subsidiaries to attract and retain employees, directors and service providers of the Company by aligning financial interests of these individuals with the other stockholders of the Company. 

 

The Plan provides for the grant of Incentive Stock Options, Non-Qualified Stock Options, Restricted Stock Awards, Restricted Stock Units, Stock Appreciation Rights, Performance Stock, Performance Units, and Other Awards to aid the Company in obtaining these goals, subject to the approval by the shareholders on May 15, 2007. 

 

SECTION 2

DEFINITIONS

 

	
            2.1 
 	
            BOARD means the Board of Directors of the Company. 
 

 

	
            2.2 
 	
            CAUSE shall mean, unless otherwise defined in the Stock Incentive Agreement or in a separate agreement with the Participant that governs Stock Incentives granted under this Plan, gross and willful misconduct during the course of his or her service to the Company, including but not limited to wrongful appropriation of funds or property of the Company, conviction of a Participant of a gross misdemeanor or felony or a material violation of any Company policy (including, without limitation, any policy contained in the Company’s Code of Conduct), regardless of when facts resulting in a finding of Cause are discovered by the Company. 
 

 

	
            2.3 
 	
            CODE means the Internal Revenue Code of 1986, as amended from time to time, or any successor statute. 
 

 

	
            2.4 
 	
            COMMITTEE means the Compensation Committee of the Board or any other committee appointed by the Board to administer the Plan. 
 

 

	
            2.5 
 	
            COMPANY means Rimage Corporation, a corporation organized under the laws of the State of Minnesota (or any successor corporation). 
 

 

	
            2.6 
 	
            DISABILITY shall mean a physical or mental condition resulting from a bodily injury or disease or mental disorder rendering such person incapable of continuing to perform the essential employment or director duties of such person at the Company as such duties existed immediately prior to the bodily injury, disease or mental disorder. 
 

 

	
            2.7
 	
            EXCHANGE ACT means the Securities Exchange Act of 1934, as amended. 
 

 

	
            2.8 
 	
            EXERCISE PRICE means the price that shall be paid to purchase one (1) Share upon the exercise of an Option granted under this Plan. 
 

 

	
            2.9 
 	
            FAIR MARKET VALUE of one Share on any given date shall be determined by the Committee as follows: (a) if the Common Stock is listed for trading on one of more national securities exchanges, or is traded on the Nasdaq Stock Market, the last reported sales price on the such principal exchange or the Nasdaq Stock Market on the date in question, or if such Common Stock shall not have been traded on such principal exchange or on the Nasdaq Stock Market on such date, the last reported sales price on such principal exchange or the Nasdaq Stock Market on the first day prior thereto on which such Common Stock was so traded; or (b) if the Common Stock is not listed for trading on a national securities exchange or the Nasdaq Stock Market, but is traded in the over-the-counter market, including the Nasdaq Small Cap Market, the closing bid price for such Common Stock on the
date in question, or if there is no such bid price for such  
 

	
             
 	
            Common Stock on such date, the closing bid price on the first day prior thereto on which such price existed; or (c) if neither (a) or (b) is applicable, with respect to any Option intended to qualify as an ISO, by any fair and reasonable determination made in good faith by the Committee, and, with respect to any other Stock Incentive that is intended to be exempt from the requirements of Code Section 409A, a value determined by the reasonable application of a reasonable valuation method as defined in regulations promulgated under Code Section 409A, which determination shall be final and binding on all parties. 
 

 

	
            2.10
 	
            INDEPENDENT DIRECTOR means a member of the Board who is not otherwise an employee of the Company or any Subsidiary.
 

 

	
            2.11
 	
            INSIDER means an individual who is, on the relevant date, an officer, member of the Board or ten percent (10%) beneficial owner of any class of the Company’s equity securities that is registered pursuant to Section 12 of the Exchange Act, all as defined under Section 16 of the Exchange Act. 
 

 

	
            2.12 
 	
            ISO means an Option granted under this Plan to purchase Shares that is intended by the Company to satisfy the requirements of Code Section 422 as an incentive stock option. 
 

 

	
            2.13
 	
            KEY EMPLOYEE means any employee of the Company or any Subsidiary holding a key management or technical position as determined by the Committee. Key Employees of any Subsidiary created or acquired after the Effective Date of this Plan shall be eligible to be Participants in this Plan without further action of the Board or its shareholders.
 

 

	
            2.14
 	
            KEY PERSON means a person, other than a Key Employee, who is (a) a member of the Board; or (b) a service provider providing bona fide services to the Company or any Subsidiary who is eligible to receive Shares that are registered on SEC Form S-8. Key Persons of any Subsidiary created or acquired after the Effective Date of this Plan shall be eligible to be Participants in this Plan without further action of the Board or its shareholders.
 

 

	
            2.15 
 	
            NQSO means an option granted under this Plan to purchase Shares that is not intended by the Company to satisfy the requirements of Code Section 422. 
 

 

	
            2.16 
 	
            OPTION means an ISO or a NQSO. 
 

 

	
            2.17 
 	
            OUTSIDE DIRECTOR means a member of the Board who is not an employee and who qualifies as (a) a “non-employee director” under Rule 16b-3(b)(3) under the Exchange Act, as amended from time to time, and (b) an “outside director” under Code Section 162(m) and the regulations promulgated thereunder. 
 

 

	
            2.18 
 	
            PARTICIPANT means a Key Person or Key Employee who is designated to receive an award under the Plan by the Committee. 
 

 

	
            2.19 
 	
            PERFORMANCE-BASED EXCEPTION means the performance-based exception from the tax deductibility limitations of Code Section 162(m). 
 

 

	
            2.20 
 	
            PERFORMANCE PERIOD shall mean the period during which a performance goal must be attained with respect to a Stock Incentive that is performance based, as determined by the Committee. 
 

 

	
            2.21
 	
            PERFORMANCE STOCK means an award of Shares granted to a Participant that is subject to the achievement of performance criteria, either as to the delivery of such Shares or the calculation of the amount deliverable as a result of achieving a level of performance over a specified Performance Period, or any combination thereof.
 

	
            2.22
 	
            PERFORMANCE UNITS means a contractual right granted to a Participant to receive a Share (or cash equivalent) upon achievement of performance criteria or a level of  performance over a specified Performance Period that are deliverable either at the end of the Performance Period or at a later time. 
 

	
            2.23
 	
            PLAN means the Rimage Corporation 2007 Stock Incentive Plan, as it may be further amended from time to time. 
 

	
            2.24 
 	
            QUALIFYING EVENT shall mean, with respect to a Participant, such Participant’s death, Disability or Retirement. 
 

 

	
            2.25 
 	
            RESTRICTED STOCK AWARD means an award of Shares granted to a Participant under this Plan that is subject to restrictions in accordance with the terms and provisions of this Plan and the applicable Stock Incentive Agreement. 
 

 

	
            2.26 
 	
            RESTRICTED STOCK UNIT means a contractual right granted to a Participant under this Plan to receive a Share (or cash equivalent) that is subject to restrictions in accordance with the terms and provisions of this Plan and the applicable Stock Incentive Agreement. 
 

 

	
            2.27 
 	
            RETIREMENT shall mean retirement from active employment with the Company and any subsidiary or parent corporation of the Company on or after age 65. 
 

 

	
            2.28 
 	
            SHARE or COMMON STOCK means a share of the common stock of the Company.
 

 

	
            2.29
 	
            STOCK APPRECIATION RIGHT means a right granted to a Participant pursuant to the terms and provisions of this Plan whereby the individual, without payment to the Company (except for any applicable withholding or other taxes), receives Shares, or such other consideration as the Committee may determine, in an amount equal to the excess of the Fair Market Value per Share on the date on which the Stock Appreciation Right is exercised over the specified price per Share noted in the Stock Appreciation Right, for each Share subject to the Stock Appreciation Right. 
 

 

	
            2.30 
 	
            STOCK INCENTIVE means an ISO, a NQSO, a Restricted Stock Award, a Restricted Stock Unit, a Stock Appreciation Right, a Performance Stock or Performance Unit or cash. 
 

 

	
            2.31 
 	
            STOCK INCENTIVE AGREEMENT means a document issued by the Company or a Subsidiary to a Participant evidencing an award of a Stock Incentive. 
 

 

	
            2.32 
 	
            SUBSIDIARY means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if each of the corporations (other than the last corporation in the unbroken chain) owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in the chain. 
 

 

	
            2.33 
 	
            TEN PERCENT SHAREHOLDER means a person who owns (after taking into account the attribution rules of Code Section 424(d)) more than ten percent (10%) of the total combined voting power of all classes of shares of stock of either the Company or a Subsidiary. 
 

 

SECTION 3

SHARES SUBJECT TO STOCK INCENTIVES

 

	
            3.1
 	
            The aggregate number of Shares that may be issued under the Plan is Seven Hundred Thirty Thousand Three Hundred Twenty (730,320) Shares, subject to adjustment as provided in Section 10. Effective immediately upon the approval of this Plan by the shareholders of the Company, the Company’s 1992 Stock Option Plan (the “Prior Plan”) is amended by this Plan to eliminate the authority and discretion of the Board, the Compensation Committee of the Board and any executive officer of the Company to grant any new awards or options (or to amend any previously granted award or option to increase the number of shares thereunder) under the Prior Plan, including with respect to any shares that would become available for issuance as a result of the cancellation or forfeiture of shares under any previously granted awards or options. 
 

 

Such Shares shall be reserved, to the extent that the Company deems appropriate, from authorized but unissued Shares, and from Shares which have been reacquired by the Company. 

 

	
            3.2
 	
            Subject to adjustment pursuant to Section 10, no Participant may be granted any Stock Incentive covering an aggregate number of Shares in excess of One Hundred Thousand (100,000) in any calendar year. 
 

SECTION 4

EFFECTIVE DATE

 

The effective date of this Plan shall be May 15, 2007, which is the date on which the shareholders of the Company originally approved the Plan. 

 

SECTION 5

ADMINISTRATION

 

	
            5.1 
 	
            GENERAL ADMINISTRATION. The Committee shall administer this Plan. The Committee, acting in its absolute discretion, shall exercise such powers and take such action as expressly called for under this Plan. The Committee shall have the power to interpret this Plan and, subject to the terms and provisions of this Plan, to take such other action in the administration and operation of the Plan as it deems equitable under the circumstances. The Committee’s actions shall be binding on the Company, on each affected Participant, and on each other person directly or indirectly affected by such actions. 
 

 

	
            5.2 
 	
            AUTHORITY OF THE COMMITTEE. Except as limited by law or by the Articles of Incorporation or By-laws of the Company, and subject to the provisions herein, the Committee shall have full power to select Participants in the Plan, to determine the sizes and types of Stock Incentives in a manner consistent with the Plan, to determine the terms and conditions of Stock Incentives in a manner consistent with the Plan, to construe and interpret the Plan and any agreement or instrument entered into under the Plan, to establish, amend or waive rules and regulations for the Plan’s administration, and to amend the terms and conditions of any outstanding Stock Incentives as allowed under the Plan and such Stock Incentives. Any and all awards of Stock Incentives to named executive officers of the Company shall be made and administered by the Committee (or subcommittee
authorized under Section 5.3) consisting solely of Outside Directors. Further, the Committee may make all other determinations that may be necessary or advisable for the administration of the Plan. The Committee may seek the assistance of such persons as it may see fit in carrying out its routine administrative functions concerning the Plan. 
 

 

	
            5.3 
 	
            DELEGATION OF AUTHORITY. The members of the Committee and any other persons to whom authority has been delegated by the Committee shall be appointed from time to time by, and shall serve at the discretion of, the Board. The Committee may appoint one or more separate committees (any such committee, a “Subcommittee”) composed of two or more Outside Directors of the Company (who may but need not be members of the Committee) and may delegate to any such Subcommittee or to one or more executive officers of the Company the authority to grant Stock Incentives, and/or to administer the Plan or any aspect of it; provided, however, that only the Committee may grant Stock Incentives that may meet the Performance-Based Exception, and only the Committee may grant Stock Incentives to Insiders that may be exempt from Section 16(b) of the Exchange Act. Notwithstanding
any provision of this Plan to the contrary, the Board may assume the powers and responsibilities granted to the Committee or other delegate at any time, in whole or in part. 
 

 

	
            5.4 
 	
            DECISIONS BINDING. All determinations and decisions made by the Committee pursuant to the provisions of this Plan and all related orders and resolutions of the Committee shall be final, conclusive and binding on all persons, including the Company, its shareholders, members of the Board, Participants, and their estates and beneficiaries. 
 

 

SECTION 6

ELIGIBILITY

 

Participants selected by the Committee shall be eligible for the grant of Stock Incentives under this Plan, but no Participant shall have the right to be granted a Stock Incentive under this Plan merely as a result of his or her status as an eligible Participant. 

SECTION 7

TERMS OF STOCK INCENTIVES

 

	
            7.1 
 	
            TERMS AND CONDITIONS OF ALL STOCK INCENTIVES. 
 

 

	
             
	
            (a)
 	
            Grants of Stock Incentives. The Committee, in its absolute discretion, shall grant Stock Incentives under this Plan from time to time and shall have the right to grant new Stock Incentives in exchange for outstanding Stock Incentives; provided, however, the Committee shall not have the right to (i) lower the Exercise Price of an existing Option, (ii) take any action which would be treated as a “repricing” under generally accepted accounting principles, or (iii) cancel an existing Option at a time when its Exercise Price exceeds the fair market value of the underlying stock subject to such Option in exchange for another Option, a Restricted Stock Award, or other equity in the Company (except as provided in Sections 10 and 11). Stock Incentives shall be granted to Participants selected by the Committee, and the Committee shall be
under no obligation whatsoever to grant any Stock Incentives, or to grant Stock Incentives to all Participants, or to grant all Stock Incentives subject to the same terms and conditions. 
 

 

	
             
	
            (b)
 	
            Shares Subject to Stock Incentives. The number of Shares as to which a Stock Incentive shall be granted shall be determined by the Committee in its sole discretion, subject to the provisions of Section 3 as to the total number of Shares available for grants under the Plan, and to any other restrictions contained in this Plan. 
 

 

	
             
	
            (c)
 	
            Stock Incentive Agreements. Each Stock Incentive shall be evidenced by an agreement, certificate, resolution or other type or form of writing or other evidence approved by the Committee that sets forth the terms and conditions of the Stock Incentives granted. The Stock Incentive Agreement may be in an electronic medium, may be limited to notation on the books and records of the Company and, with the approval of the Committee, need not be signed by a representative of the Company or a Participant. The Committee shall have sole discretion to modify the terms and provisions of Stock Incentive Agreements in accordance with Section 12 of this Plan. 
 

 

	
             
	
            (d)
 	
            Date of Grant. The date a Stock Incentive is granted shall be the date on which the Committee (i) has approved the terms and conditions of the Stock Incentive Agreement, (ii) has determined the recipient of the Stock Incentive and the number of Shares covered by the Stock Incentive and (iii) has taken all such other action necessary to direct the grant of the Stock Incentive.
 

 

	
             
	
            (e)
 	
            Vesting of Stock Incentives. Stock Incentives under the Plan may have restrictions on the vesting or delivery of and, in the case of Options, the right to exercise, that lapse based upon the service of a Participant, or based upon other criteria that the Committee may determine appropriate, such as the attainment of performance goals determined by the Committee, including but not limited to one or more of the performance criteria listed in Section 14. If the Award is intended to meet the Performance-Based Exception, the attainment of such performance goals must be certified in writing by the Committee prior to payment thereof. Until the end of the period(s) of time specified in the vesting schedule and/or the satisfaction of any performance criteria, the Shares subject to such Stock Incentive Award shall remain subject to forfeiture.

 

 

	
             
	
            (f)
 	
            Acceleration of Vesting of Stock Incentives. Notwithstanding anything to the contrary in this Plan, the Committee shall have the power to permit, in its sole discretion, an acceleration of the expiration of the applicable restrictions or the applicable period of such restrictions with respect to any part or all of the Shares awarded to a Participant; provided, however, the Committee may grant Stock Incentive Awards precluding such accelerated vesting in order to qualify the Stock Incentive Awards for the Performance-Based Exception. 
 

 

	
             
	
            (g)
 	
            Dividend Equivalents. The Committee may grant dividend equivalents to any Participant. The Committee shall establish the terms and conditions to which the dividend equivalents are subject. Dividend equivalents may be granted only in connection with a Stock Incentive. Under a dividend equivalent, a Participant shall be entitled to receive currently or in the future payments equivalent to the amount of dividends paid by the Company to holders of Common Stock with respect to the number of dividend equivalents held by the Participant. The dividend equivalent may provide for 
 

	
             
	
             
 	
            payment in Shares or in cash, or a fixed combination of Shares or cash, or the Committee may reserve the right to determine the manner of payment at the time the dividend equivalent is payable. Any such dividend equivalent on a Stock Incentive that is intended to be exempt from Code Section 409A shall be stated in a separate arrangement. 
 

 

	
             
	
            (h)
 	
            Transferability of Stock Incentives. Except as otherwise provided in a Participant’s Stock Incentive Agreement, no Stock Incentive granted under the Plan may be sold, transferred, pledged, assigned or otherwise alienated or hypothecated, except upon the death of the holder Participant by will or by the laws of descent and distribution. Except as otherwise provided in a Participant’s Stock Incentive Agreement, during the Participant’s lifetime, only the Participant may exercise any Option or Stock Appreciation Right unless the Participant is incapacitated in which case the Option or Stock Appreciation Right may be exercised by and any other Stock Incentive may be payable to the Participant’s legal guardian, legal representative, or other representative whom the Committee deems appropriate based on applicable facts and
circumstances. The determination of incapacity of a Participant and the identity of appropriate representative of the Participant to exercise the Option or receive any other benefit under a Stock Incentive if the Participant is incapacitated shall be determined by the Committee. 
 

 

	
             
	
            (i)
 	
            Deferral Elections. The Committee may permit or require Participants to elect to defer the issuance of Shares or the settlement of awards in cash under this Plan pursuant to such rules, procedures, or programs as it may establish from time to time. However, notwithstanding the preceding sentence, the Committee shall not, in establishing the terms and provisions of any Stock Incentive, or in exercising its powers under this Article: (i) create any arrangement which would constitute an employee pension benefit plan as defined in ERISA Section 3(3) unless the arrangement provides benefits solely to one or more individuals who constitute members of a select group of management or highly compensated employees; or (ii) create any arrangement that would constitute a deferred compensation plan as defined in Code Section 409A unless the
arrangement complies with Code Section 409A and regulations promulgated thereunder or unless the Committee, at the time of grant, specifically provides that the Stock Incentive is not intended to comply with Section 409A of the Code. 
 

 

	
            7.2 
 	
            TERMS AND CONDITIONS OF OPTIONS. 
 

 

	
             
	
            (a)
 	
            Grants of Options. Each grant of an Option shall be evidenced by a Stock Incentive Agreement that shall specify whether the Option is an ISO or NQSO, and incorporate such other terms as the Committee deems consistent with the terms of this Plan and, in the case of an ISO, necessary or desirable to permit such Option to qualify as an ISO. The Committee and/or the Company may modify the terms and provisions of an Option in accordance with Section 12 of this Plan even though such modification may change the Option from an ISO to a NQSO. 
 

 

	
             
	
            (b)
 	
            Termination of Employment.  Except as provided in the Option Agreement or a separate agreement with the Participant that governs Options granted under this Plan, or as otherwise provided by the Committee: (i) if the Participant’s employment (or in the case of a non-employee, such Participant’s service) with the Company and/or a Subsidiary ends before the Options vest, the Participant shall forfeit all unvested Options; and (ii) any Options held by such Participant may thereafter be exercised to the extent it was exercisable at the time of such termination, but may not be exercised after 90 days after such termination, or the expiration of the stated term of the Options, whichever period is the shorter. In the event a Participant’s employment with the Company or any Subsidiary is terminated for Cause, all unexercised
Options granted to such Participant shall immediately terminate.
 

 

	
             
	
            (c)
 	
            Death, Disability and Retirement. Except as provided in the Option Agreement or a separate agreement with the Participant that governs Options granted under this Plan, and except as otherwise provided by the Committee: (i) if a Qualifying Event occurs before the date or dates on which Options vest, the Participant shall forfeit all unvested Options; and (ii) any Options held by such Participant may thereafter be exercised to the extent it was exercisable at the time of such Qualifying Event, but may not be exercised after one year after such Qualifying Event, or the expiration of the stated term of the Options, whichever period is the shorter.
 

	
             
	
            (d)
 	
            Exercise Price. Subject to adjustment in accordance with Section 10 and the other provisions of this Section, the Exercise Price shall be specified in the applicable Stock Incentive Agreement. With respect to each grant of an ISO to a Participant who is not a Ten Percent Shareholder, the Exercise Price shall not be less than the Fair Market Value of a Share on the date the ISO is granted. With respect to each grant of an ISO to a Participant who is a Ten Percent Shareholder, the Exercise Price shall not be less than one hundred ten percent (110%) of the Fair Market Value of a Share on the date the ISO is granted. 
 

 

	
             
	
            (e)
 	
            Option Term. Each Option granted under this Plan shall be exercisable in whole or in part at such time or times as set forth in the related Stock Incentive Agreement, but no Stock Incentive Agreement shall: (i) make an Option exercisable prior to the date such Option is granted or after it has been exercised in full; or (ii) make an Option exercisable after the date that is (A) the tenth (10th) anniversary of the date such Option is granted, if such Option is a NQSO or an ISO granted to a non-Ten Percent Shareholder, or (B) the date that is the fifth (5th) anniversary of the date such Option is granted, if such Option is an ISO granted to a Ten Percent Shareholder. Options issued under the Plan may become exercisable based on the service of a Participant, or based upon the attainment (as determined by the Committee) of performance goals,
including but not limited to goals established pursuant to one or more of the performance criteria listed in Section 14. Any Option that is intended to qualify for the Performance Based Exception must have its performance goals determined by the Committee based upon one or more of the performance criteria listed in Section 14, and must have the attainment of such performance goals certified in writing by the Committee. 
 

 

	
             
	
            (f)
 	
            Payment. The Exercise Price of Shares acquired pursuant to an Option shall be paid, to the extent permitted by applicable statutes and regulations by delivering to the Company or its designated agent, either: (i) in cash or by check at the time the Option is exercised or (ii) at the discretion of the Committee at the time of the grant of the Option (or subsequently in the case of an NQSO) (A) by delivery (or by attestation) of other Shares, (B) pursuant to a “same day sale” program exercised through a brokerage transaction as permitted under the provisions of Regulation T applicable to cashless exercises promulgated by the Federal Reserve Board so long as the Company’s equity securities are registered under Section 12 of the Exchange Act, unless prohibited by Section 402 of the Sarbanes-Oxley Act of 2002, or (C) by some
combination of the foregoing. Unless otherwise specifically provided in the Option, the Exercise Price of Shares acquired pursuant to an Option that is paid by delivery (including by attestation) of other Shares acquired, directly or indirectly from the Company, shall be paid only by Shares that have been held for more than six (6) months (or such longer or shorter period of time required to avoid the options being a liability award for financial accounting purposes). Notwithstanding the foregoing, with respect to any Participant who is an Insider, a tender of shares or, if permitted by applicable law, a cashless exercise must (1) have met the requirements of an exemption under Rule 16b-3 promulgated under the Exchange Act, or (2) be a subsequent transaction the terms of which were provided for in a transaction initially meeting the requirements of an exemption under Rule 16b-3 promulgated under the Exchange Act. Unless the Stock Incentive Agreement provides otherwise, the foregoing
exercise payment methods shall be subsequent transactions approved by the original grant of an Option. Except as provided above, payment shall be made at the time that the Option or any part thereof is exercised, and no Shares shall be issued or delivered upon exercise of an Option until full payment has been made by the Participant. The holder of an Option, as such, shall have none of the rights of a shareholder. 
 

 

	
             
	
            (g)
 	
            ISO Tax Treatment Requirements. With respect to any Option that purports to be an ISO, to the extent that the aggregate Fair Market Value (determined as of the date of grant of such Option) of stock with respect to which such Option is exercisable for the first time by any individual during any calendar year exceeds one hundred thousand dollars ($100,000), to the extent of such excess, such Option shall not be treated as an ISO in accordance with Code Section 422(d). The rule of the preceding sentence is applied as set forth in Treas. Reg. Section 1.422-4 and any additional guidance issued by the Treasury thereunder. Also, with respect to any Option that purports to be an ISO, such Option shall not be treated as an ISO if the Participant disposes of shares acquired thereunder within two (2) years from the date of the granting of the
Option or within one (1) year of the exercise of the Option, or if the Participant has not met the requirements of Code Section 422(a)(2). 
 

	
            7.3 
 	
            TERMS AND CONDITIONS OF RESTRICTED STOCK AWARDS. 
 

 

	
             
	
            (a)
 	
            Grants of Restricted Stock Awards. Shares awarded pursuant to Restricted Stock Awards shall be subject to such restrictions as determined by the Committee for periods determined by the Committee. The Committee may require a cash payment from the Participant in exchange for the grant of a Restricted Stock Award or may grant a Restricted Stock Award without the requirement of a cash payment. 
 

 

	
             
	
            (b)
 	
            Termination of Employment. Except as provided in the Restricted Stock Agreement or a separate agreement with the Participant covering the Restricted Stock granted under this Plan, if the Participant’s employment (or in the case of a non-employee, such Participant’s service) with the Company and/or a Subsidiary ends for any reason other than a Qualifying Event before any restrictions lapse, the Participant shall forfeit all unvested Restricted Stock Awards, unless the Committee determines that the Participant’s unvested Restricted Stock Awards shall vest as of the date of such event. 
 

 

	
             
	
            (c)
 	
            Death, Disability and Retirement. Except as provided in the Restricted Stock Agreement or a separate agreement with the Participant covering Restricted Stock granted under this Plan: (i) if a Qualifying Event occurs before the date or dates on which restrictions lapse, the Participant shall forfeit all unvested Restricted Stock Awards, unless the Committee determines that the Participant’s unvested Restricted Stock Awards shall vest as of the date of such event; and (ii) in the case of Restricted Stock Awards which are based on performance criteria then, as of the date on which such Qualifying Event occurs, the Participant shall be entitled to receive a number of Shares that is determined by measuring the selected performance criteria from the Company’s most recent publicly available quarterly results that are available as of
the date the Qualifying Event occurs; provided, however, the Committee may grant Restricted Stock Awards precluding such partial awards when a Qualifying Event occurs in order to qualify the Restricted Stock Awards for the Performance-Based Exception. 
 

 

	
             
	
            (d)
 	
            Voting, Dividend & Other Rights. Unless the applicable Stock Incentive Agreement provides otherwise, holders of Restricted Stock Awards shall be entitled to vote and to receive dividends during the periods of restriction of their Shares to the same extent as such holders would have been entitled if the Shares were unrestricted Shares. 
 

 

	
            7.4 
 	
            TERMS AND CONDITIONS OF RESTRICTED STOCK UNITS. 
 

 

	
             
	
            (a)
 	
            Grants of Restricted Stock Units. A Restricted Stock Unit shall entitle the Participant to receive one Share at such future time and upon such terms as specified by the Committee in the Stock Incentive Agreement evidencing such award. The Committee may require a cash payment from the Participant in exchange for the grant of Restricted Stock Units or may grant Restricted Stock Units without the requirement of a cash payment. 
 

 

	
             
	
            (b)
 	
            Termination of Employment. Except as provided in the Restricted Stock Unit Agreement or a separate agreement with the Participant covering the Restricted Stock Unit granted under this Plan, if the Participant’s employment with the Company and/or a Subsidiary ends before the Restricted Stock Units vest, the Participant shall forfeit all unvested Restricted Stock Units, unless the Committee determines that the Participant’s unvested Restricted Stock Units shall vest as of the date of such event. 
 

	
             
	
            (c)
 	
            Death, Disability and Retirement. Except as provided in the Restricted Stock Unit Agreement or a separate agreement with the Participant covering the Restricted Stock Unit granted under this Plan: (i) if a Qualifying Event occurs before the date or dates on which restrictions lapse, the Participant shall forfeit all unvested Restricted Stock Units, unless the Committee determines that the Participant’s unvested Restricted Stock Units shall vest as of the date of such event; and (ii) in the case of Restricted Stock Units that are based on performance criteria, then as of the date on which such Qualifying Event occurs, the Participant shall be entitled to receive a number of Shares that is determined by measuring the selected performance criteria from the Company’s most recent publicly available quarterly results that are
available as of the date the Qualifying Event occurs; provided, however, the Committee may grant Restricted Stock Units precluding such partial awards when a Qualifying Event occurs in order to qualify the Restricted Stock Units for the Performance-Based Exception. 
 

 

	
             
	
            (d)
 	
            Voting, Dividend & Other Rights. Holders of Restricted Stock Units shall not be entitled to vote or to receive dividends until they become owners of the Shares pursuant to their Restricted Stock Units, and, unless the applicable Stock Incentive Agreement provides otherwise, the holder of a Restricted Stock Unit shall not be entitled to any dividend equivalents (as described in Section 7.1(f)). 
 

 

	
            7.5 
 	
            TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS. 
 

 

	
             
	
            (a)
 	
            Grants of Stock Appreciation Rights. A Stock Appreciation Right shall entitle the Participant to receive upon exercise or payment the excess of the Fair Market Value of a specified number of Shares at the time of exercise, over a specified price. The specified price for a Stock Appreciation Right granted in connection with a previously or contemporaneously granted Option, shall not be less than the Exercise Price for Shares that are the subject of the Option. In the case of any other Stock Appreciation Right, the specified price shall not be less than one hundred percent (100%) of the Fair Market Value of the Shares at the time the Stock Appreciation Right was granted. If related to an Option, the exercise of a Stock Appreciation Right shall result in a pro rata surrender of the related Option to the extent the Stock Appreciation Right
has been exercised. 
 

 

	
             
	
            (b)
 	
            Payment. Upon exercise of a Stock Appreciation Right, the Company shall pay to the Participant the appreciation with Shares (computed using the aggregate Fair Market Value of Shares on the date of payment or exercise) or in cash, or in any combination thereof as specified in the Stock Incentive Agreement or, if not specified, as the Committee determines. To the extent that a Stock Appreciation Right is exercised, the specified price shall be treated as paid in Shares for purposes of Section 3. 
 

 

	
             
	
            (c)
 	
            Termination of Employment.  Except as provided in the Stock Appreciation Rights Agreement or a separate agreement with the Participant that governs Stock Incentives granted under this Plan, or as otherwise provided by the Committee: (i) if the Participant’s employment (or in the case of a non-employee, such Participant’s service) with the Company and/or a Subsidiary ends before the Options vest, the Participant shall forfeit all unvested Stock Appreciation Rights; and (ii) any Stock Appreciation Rights held by such Participant may thereafter be exercised to the extent it was exercisable at the time of such termination, but may not be exercised after 90 days after such termination, or the expiration of the stated term of the Stock Appreciation Rights, whichever period is the shorter. In the event a Participant’s employment
with the Company or any Subsidiary is terminated for Cause, all unexercised Stock Appreciation Rights granted to such Participant shall immediately terminate.
 

 

	
             
	
            (d)
 	
            Death, Disability and Retirement. Except as provided in the Stock Appreciation Rights Agreement or a separate agreement with the Participant that governs Stock Incentives granted under this Plan, and except as otherwise provided by the Committee: (i) if a Qualifying Event occurs before the date or dates on which Stock Appreciation Rights vest, the Participant shall forfeit all unvested Stock Appreciation Rights; and (ii) any Stock Appreciation Rights held by such Participant may thereafter be exercised to the extent it was exercisable at the time of such Qualifying Event, but may not be exercised after one year after such Qualifying Event, or the expiration of the stated term of the Stock Appreciation Rights, whichever period is the shorter.
 

	
             
	
            (e)
 	
            Special Provisions for Tandem Stock Appreciation Rights. A Stock Appreciation Right granted in connection with an Option may only be exercised to the extent that the related Option has not been exercised. A Stock Appreciation Right granted in connection with an ISO (i) will expire no later than the expiration of the underlying ISO, (ii) may be for no more than the difference between the exercise price of the underlying ISO and the Fair Market Value of the Shares subject to the underlying ISO at the time the Stock Appreciation Right is exercised, (iii) may be transferable only when, and under the same conditions as, the underlying ISO is transferable, and (iv) may be exercised only (A) when the underlying ISO could be exercised and (B) when the Fair Market Value of the Shares subject to the ISO exceeds the exercise price of the ISO.

 

 

	
            7.6 
 	
            TERMS AND CONDITIONS OF PERFORMANCE STOCK AND PERFORMANCE UNITS. 
 

 

	
             
	
            (a)
 	
            Awards of Performance Stock and Performance Units. Performance Stock and Performance Units shall become payable to a Participant upon achievement of performance criteria as determined by the Committee. Each award will specify the number of Performance Stock or Performance Units to which it pertains, which number may be subject to adjustment to reflect changes in compensation or other factors; provided, however, that no such adjustment will be made in the case of a grant that is intended to qualify for the Performance-Based Exception, other than as provided in Section 14. Any grant of Performance Stock or Units may specify that the amount payable with respect thereto may not exceed a maximum specified by the Committee at the date of grant. 
 

 

	
             
	
            (b)
 	
            Payment. Each grant will specify the time and manner of payment of Performance Stock or Performance Units that have been earned. Any Performance Stock award shall be payable in Shares. Any Performance Unit award may specify that the amount payable with respect thereto may be paid by the Company in cash, in Shares or in any combination thereof and may either grant to the Participant or retain in the Committee the right to elect among cash or Shares. 
 

 

	
            7.7
 	
            OTHER AWARDS.
 

 

	
             
	
            (a)
 	
            Other awards may, subject to limitations under applicable law, be granted to any Participant denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, Shares or factors that may influence the value of such Shares, including, without limitation, convertible or exchangeable debt securities, other rights convertible or exchangeable into Shares, purchase rights for Shares, awards with value and payment contingent upon performance of the Company or specified Subsidiaries, affiliates or other business units thereof, or any other factors designated by the Committee. The Committee shall determine the terms and conditions of such awards.
 

 

	
             
	
            (b)
 	
            Cash awards, as an element of or supplement to any other Stock Incentives granted under this Plan, may also be granted to Participants on such terms and conditions as determined by the Committee pursuant to this Plan. 
 

 

	
             
	
            (c)
 	
            Shares may be granted to a Participant as a bonus, or in lieu of obligations of the Company or a Subsidiary to pay cash or deliver other property under this Plan or under other plans or compensatory arrangements, subject to such terms as the Committee shall determine.
 

 

	
             
	
            (d)
 	
            Participants designated by the Committee may be permitted to reduce compensation otherwise payable in cash in exchange for Shares or other Stock Incentives under the Plan.
 

 

	
            7.8
 	
            INDEPENDENT DIRECTOR GRANTS. Notwithstanding any other provisions of this Plan, a grant of Restricted Stock or NQSO, or any combination of the same, shall be made to each Independent Director on the date of each regular annual meeting of shareholders of the Company at which such Independent Director is elected or re-elected to the Board. Except as provided in (a), (b), (c), (d) and (e) below, the number of Shares subject to this Restricted Stock Award or NQSO and other terms governing the Restricted Stock Award or NQSO shall be determined by the Committee in its sole discretion prior to such annual meeting of shareholders. No Independent Director may be granted Restricted Stock Awards or 
 

	
             
 	
            NQSOs covering an aggregate number of Shares in excess of 25,000 at any regular annual shareholders meeting pursuant to the terms of this Section 7.8. The following terms shall be applied to the grants to Independent Directors under this Section 7.8:
 

  

	
             
	
            (a)
 	
            Subject to Section 7.8(b) and Section 7.8(e), each such Restricted Stock Award to an Independent Director shall vest as to all Shares one year from the date of grant (subject to such longer vesting period as determined by the Committee prior to the annual meeting of shareholders).
 

 

	
             
	
            (b)
 	
            In the event that an Independent Director granted a Restricted Stock Award under this Section shall cease to be a director of the Company for any reason other than Cause, the restrictions shall lapse on the Restricted Stock Award, if not already lapsed pursuant to the provisions of this Plan or the agreement evidencing the Restricted Stock Award, on the later of (A) the date of such event, or (B) the first anniversary of the date of the date of grant.
 

 

	
             
	
            (c)
 	
            Subject to Sections 7.8(d) and Section 7.8(e), NQSOs granted to Independent Directors shall be exercisable in full six months after the date of grant of the NQSO and shall expire ten years from the date of grant of the NQSO (subject to such shorter expiration period as determined by the Committee prior to the annual meeting). The Exercise Price per Share shall be the Fair Market Value of one Share on the date of grant.
 

 

	
             
	
            (d)
 	
            In the event that an Independent Director granted a NQSO under this Section shall cease to be a director of the Company for any reason other than Cause, such Independent Director, or in the case of death or Disability, such Independent Director’s guardians, administrators or personal representatives, shall have the right to exercise the NQSO granted under this Section at any time for the remainder of the term of the NQSO to the extent of the full number of shares the Independent Director was entitled to purchase under the Option on the date of such termination, subject to the condition that no NQSO shall be exercisable after the expiration of the term of the NQSO.
 

 

	
             
	
            (e)
 	
            In the event an Independent Director ceases to be a director for any reason constituting Cause, any NQSO granted under this Section shall terminate as of the date of the action constituting Cause and any Restricted Stock Award shall be forfeited to the Company without payment of any consideration therefor as of the date of such action constituting Cause.
 

 

The Committee, in its discretion, may, in addition to the Restricted Stock Award and NQSOs provided above, grant any additional Stock Incentive to all Independent Directors or to any individual Independent Director, provided that such grant shall be solely for substantial services performed or to be performed by such Independent Director as determined in good faith by the Committee.

 

SECTION 8

SECURITIES REGULATION

 

	
            8.1 
 	
            LEGALITY OF ISSUANCE. No Share shall be issued under this Plan unless and until the Committee has determined that all required actions have been taken to register such Share under the Securities Act of 1933 or the Company has determined that an exemption therefrom is available, any applicable listing requirement of any stock exchange on which the Share is listed has been satisfied, and any other applicable provision of state, federal or foreign law, including foreign securities laws where applicable, has been satisfied. 
 

 

	
            8.2 
 	
            RESTRICTIONS ON TRANSFER; REPRESENTATIONS; LEGENDS. Regardless of whether the offering and sale of Shares under the Plan have been registered under the Securities Act of 1933 or have been registered or qualified under the securities laws of any state, the Company may impose restrictions upon the sale, pledge, or other transfer of such Shares (including the placement of appropriate legends on stock certificates) if, in the judgment of the Company and its counsel, such restrictions are necessary or desirable to achieve compliance with the provisions of the Securities Act of 1933, the securities laws of any state, the United States or any other applicable foreign law. If the offering and/or sale of Shares under the Plan is not registered under the Securities Act of 1933 and the Company determines that the registration requirements of the Securities Act of 1933 apply
but an exemption is available which requires an  
 

	
              
 	
            investment representation or other representation, the Participant shall be required, as a condition to acquiring such Shares, to represent that such Shares are being acquired for investment, and not with a view to the sale or distribution thereof, except in compliance with the Securities Act of 1933, and to make such other representations as are deemed necessary or appropriate by the Company and its counsel. All Stock Incentive Agreements shall contain a provision stating that any restrictions under any applicable securities laws will apply. 
 

 

	
            8.3 
 	
            REGISTRATION OF SHARES. The Company may, and intends to, but is not obligated to, register or qualify the offering or sale of Shares under the Securities Act of 1933 or any other applicable state, federal or foreign law. 
 

 

SECTION 9

LIFE OF PLAN

 

No Stock Incentive shall be granted under this Plan on or after the earlier of: 

 

	
             
	
            (a)
 	
            the tenth (10th) anniversary of the effective date of this Plan (as determined under Section 4 of this Plan), or 
 

 

	
             
	
            (b)
 	
            the date on which all of the Shares reserved under Section 3 of this Plan have (as a result of the exercise of Stock Incentives granted under this Plan or lapse of all restrictions under a Restricted Stock Award or Restricted Stock Unit) been issued or are no longer available for use under this Plan. 
 

 

This Plan shall continue in effect until all outstanding Stock Incentives have been exercised in full or are no longer exercisable and all Restricted Stock Awards or Restricted Stock Units have vested or been forfeited. 

 

SECTION 10

ADJUSTMENT

 

Notwithstanding anything in Section 12 to the contrary, in the event of a stock dividend, stock split, spin-off, rights offering, recapitalization through a large, nonrecurring cash dividend, or a similar equity restructuring of the Company, the Committee will adjust: (a) the number of Shares reserved under Section 3 of this Plan, (b) the limit on the number of Shares that may be granted subject to Stock Incentives during a calendar year to any individual under Section 3 of this Plan, (c) the number of Shares subject to certain Stock Incentives granted subject to Section 3 of the Plan, and (d) the Exercise Price of any Options and the specified price of any Stock Appreciation Rights, or any combination thereof, in an equitable manner that will equalize the fair value of the previously granted Stock Incentives before and after the equity restructuring. Furthermore, in the event of any corporate transaction
described in Code Section 424(a) that provides for the substitution or assumption of Stock Incentives, the Committee will adjust such Stock Incentives in a manner that satisfies the requirements of Code Section 424(a) as to: (i) the number of Shares reserved under Section 3, (ii) the limit on the number of Shares that may be granted subject to Stock Incentives during a calendar year to any individual under Section 3 of this Plan; (iii) the number of Shares subject to such Stock Incentives, and (iii) the Exercise Price of any Options and the specified price of any Stock Appreciation Rights. If any adjustment under this Section creates a fractional Share or a right to acquire a fractional Share, such fractional Share shall be disregarded, and the number of Shares reserved under this Plan and the number subject to any Stock Incentives granted under this Plan shall be the next lower number of Shares, rounding all fractions downward. An adjustment made under this Section by the Committee
shall be conclusive and binding on all affected persons and, further, shall not constitute an increase in the number of Shares reserved under Section 3 or an increase in any limitation imposed by the Plan. 

 

SECTION 11

CHANGE IN CONTROL OF THE COMPANY

 

	
            11.1 
 	
            CHANGE IN CONTROL. “Change in Control” of the Company shall mean a change in control which would be required to be reported in response to Item 5.01 of Form 8-K promulgated under the Exchange Act (or any successor item of Form 8-K), whether or not the Company is then subject to such reporting requirement, including without limitation, if:
 

	
             
	
            (a)
 	
            any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly of securities of the Company representing 20% or more of the combined voting power of the Company’s then outstanding securities (other than an entity owned 50% or greater by the Company or an employee pension plan for the benefit of the employees of the Company);
 

 

	
             
	
            (b)
 	
            there ceases to be a majority of the Board comprised of (i) individuals who, on the date of adoption of this Plan, constituted the Board; and (ii) any new director who subsequently was elected or nominated for election by a majority of the directors who held such office prior to a Change in Control; or
 

 

	
             
	
            (c)
 	
            the Company disposes of at least 75% of its assets, other than (i) to an entity owned 50% or greater by the Company or any of its subsidiaries, or to an entity in which at least 50% of the voting equity securities are owned by the shareholders of the Company immediately prior to the disposition in substantially the same percentage or (ii) as a result of a bankruptcy proceeding, dissolution or liquidation of the Company.
 

 

	
            11.2
 	
            VESTING UPON A CHANGE IN CONTROL. Except as otherwise provided in a Stock Incentive Agreement or as provided in the next sentence, if a Change in Control occurs, and if the agreements effectuating the Change in Control do not provide for the assumption or substitution of all Stock Incentives granted under this Plan, with respect to any Stock Incentive granted under this Plan that is not so assumed or substituted (a “Non-Assumed Stock Incentive”), such Stock Incentives shall immediately vest and be exercisable and any restrictions thereon shall lapse. Notwithstanding the foregoing, unless the Committee determines at or prior to the Change in Control, no Stock Incentive that is subject to any performance criteria for which the Performance Period has not expired, shall accelerate at the time of a Change in Control. 
 

 

	
            11.3
 	
            DISPOSITION OF STOCK INCENTIVES. Except as otherwise provided in a Stock Incentive Agreement, the Committee, in its sole and absolute discretion, may, with respect to any or all of such Non-Assumed Stock Incentives, take any or all of the following actions to be effective as of the date of the Change in Control (or as of any other date fixed by the Committee occurring within the thirty (30) day period immediately preceding the date of the Change in Control, but only if such action remains contingent upon the effectuation of the Change in Control) (such date referred to as the “Action Effective Date”): 
 

 

	
             
	
            (a)
 	
            Unilaterally cancel such Non-Assumed Stock Incentive in exchange for whole and/or fractional Shares (or whole Shares and cash in lieu of any fractional Share) or whole and/or fractional shares of a successor (or whole shares of a successor and cash in lieu of any fractional share) that, in the aggregate, are equal in value to: 
 

 

	
             
	
            (i)
 	
            in the case of Options and Stock Appreciation Rights, the product of (A) the excess, if any, of the Fair Market Value per Share on the effective date of the Action Effective Date over the Exercise Price or specified price per Share (B) multiplied by the number of Shares subject to the Option or Stock Appreciation Right; 
 

 

	
             
	
            (ii)
 	
            in the case of Restricted Stock, Restricted Stock Units, Performance Stock, Performance Units and Other Awards, the Fair Market Value per Share on the effective date of the Action Effective Date of the Shares subject to such Stock Incentive (taking into account vesting), less the value of any consideration payable with respect to such Stock Incentive. 
 

 

	
             
	
            (b)
 	
            Unilaterally cancel such Non-Assumed Stock Incentive in exchange for cash or other property equal in value to: 
 

 

	
             
	
            (i)
 	
            in the case of Options and Stock Appreciation Rights, the product of (A) the excess, if any, of the Fair Market Value per Share on the effective date of the Action Effective Date over the Exercise Price or specified price per Share (B) multiplied by the number of Shares subject to the Option or Stock Appreciation Right; 
 

	
             
	
            (ii)
 	
            in the case of Restricted Stock, Restricted Stock Units, Performance Stock, Performance Units and Other Awards, the Fair Market Value per Share on the effective date of the Action Effective Date of the Shares subject to such Stock Incentive (taking into account vesting), less the value of any consideration payable with respect to such Stock Incentive. 
 

 

	
             
	
            (c)
 	
            In the case of Options, unilaterally cancel such Non-Assumed Option after providing the holder of such Option with (i) an opportunity to exercise such Non-Assumed Option to the extent vested within a specified period prior to the date of the Change in Control, and (ii) notice of such opportunity to exercise prior to the commencement of such specified period. The Committee may modify or waive any condition limiting the exercise of such Option to permit a cashless exercise of such Options.
 

 

	
             
	
            (d)
 	
            Notwithstanding the foregoing, to the extent that the recipient of a Non-Assumed Stock Incentive is an Insider, payment of cash in lieu of whole or fractional Shares or shares of a successor may only be made to the extent that such payment (i) has met the requirements of an exemption under Rule 16b-3 promulgated under the Exchange Act, or (ii) is a subsequent transaction the terms of which were provided for in a transaction initially meeting the requirements of an exemption under Rule 16b-3 promulgated under the Exchange Act. Unless a Stock Incentive Agreement provides otherwise, the payment of cash in lieu of whole or fractional Shares or in lieu of whole or fractional shares of a successor shall be considered a subsequent transaction approved by the original grant of an Option. 
 

 

	
            11.4
 	
            GENERAL RULE FOR OTHER STOCK INCENTIVES. If a Change in Control occurs, then, except to the extent otherwise provided in the Stock Incentive Agreement pertaining to a particular Stock Incentive or as otherwise provided in this Plan, each Stock Incentive shall be governed by applicable law and the documents effectuating the Change in Control. 
 

 

SECTION 12

AMENDMENT OR TERMINATION

 

	
            12.1
 	
            AMENDMENT OF PLAN. This Plan may be amended by the Committee from time to time to the extent that the Committee deems necessary or appropriate; provided, however, no such amendment shall be made absent the approval of the shareholders of the Company if such amendment: (a) increases the number of Shares reserved under Section 3, except as set forth in Section 10, (b) extends the maximum life of the Plan under Section 9 or the maximum exercise period under Section 7, (c) decreases the minimum Exercise Price under Section 7, or (d) changes the designation of Participant eligible for Stock Incentives under Section 6. Shareholder approval of other material amendments (such as an expansion of the types of awards available under the Plan, an extension of the term of the Plan, or a change to the method of determining the Exercise Price of Options issued under the Plan)
may also be required pursuant to rules promulgated by an established stock exchange or a national market system. 
 

 

	
            12.2
 	
            TERMINATION OF PLAN. The Board also may suspend the granting of Stock Incentives under this Plan at any time and may terminate this Plan at any time. 
 

 

	
            12.3
 	
            AMENDMENT OF STOCK INCENTIVES. The Committee shall have the right to modify, amend or cancel any Stock Incentive after it has been granted if (a) the modification, amendment or cancellation does not diminish the rights or benefits of the Participant under the Stock Incentive (provided, however, that a modification, amendment or cancellation that results solely in a change in the tax consequences with respect to a Stock Incentive shall not be deemed as a diminishment of rights or benefits of such Stock Incentive), (b) the Participant consents in writing to such modification, amendment or cancellation, (c) there is a dissolution or liquidation of the Company, (d) this Plan and/or the Stock Incentive Agreement expressly provides for such modification, amendment or cancellation, or (e) the Company would otherwise have the right to make such modification, amendment or
cancellation pursuant to Article 11 or applicable law. Notwithstanding the foregoing, the Committee may reform any provision in a Stock Incentive intended to be exempt from Code Section 409A to maintain to maximum extent practicable the original intent of the applicable provision without violating the provisions of Code Section 409A; provided, however, that if no reasonably practicable reformation would avoid the imposition of any penalty tax or interest under Code Section 409A, no payment or benefit will be provided under the Stock Incentive and the Stock Incentive will be deemed null, void and of no force and effect, and the Company shall have no further obligation in connection with such Stock Incentive.
 

SECTION 13

MISCELLANEOUS

 

	
            13.1 
 	
            SHAREHOLDER RIGHTS. Except as provided in Section 7.3 with respect to Restricted Stock Awards, or in a Stock Incentive Agreement, no Participant shall have any rights as a shareholder of the Company as a result of the grant of a Stock Incentive pending the actual delivery of Shares subject to such Stock Incentive to such Participant. 
 

 

	
            13.2 
 	
            NO GUARANTEE OF CONTINUED RELATIONSHIP. The grant of a Stock Incentive to a Participant under this Plan shall not constitute a contract of employment or other relationship with the Company and shall not confer on a Participant any rights upon his or her termination of employment or relationship with the Company in addition to those rights, if any, expressly set forth in the Stock Incentive Agreement that evidences his or her Stock Incentive. 
 

 

	
            13.3 
 	
            WITHHOLDING. The Company shall have the power and the right to deduct or withhold, or require a Participant to remit to the Company as a condition precedent for the grant or fulfillment of any Stock Incentive, an amount in Shares or cash sufficient to satisfy federal, state and local taxes, domestic or foreign, required by law or regulation to be withheld with respect to any taxable event arising as a result of this Plan and/or any action taken by a Participant with respect to a Stock Incentive. Whenever Shares are to be issued to a Participant upon exercise of an Option or Stock Appreciation Right, or satisfaction of conditions under a Restricted Stock, Restricted Stock Unit, Performance Stock or Performance Units, the Company shall have the right to require the Participant to remit to the Company, as a condition thereof, an amount in cash (or, unless the Stock
Incentive Agreement provides otherwise, in Shares) sufficient to satisfy federal, state and local withholding tax requirements at the time of exercise. However, notwithstanding the foregoing, to the extent that a Participant is an Insider, satisfaction of withholding requirements by having the Company withhold Shares may only be made to the extent that such withholding of Shares (a) has met the requirements of an exemption under Rule 16b-3 promulgated under the Exchange Act, or (b) is a subsequent transaction the terms of which were provided for in a transaction initially meeting the requirements of an exemption under Rule 16b-3 promulgated under the Exchange Act. Unless the Stock Incentive Agreement provides otherwise, the withholding of shares to satisfy federal, state and local withholding tax requirements shall be a subsequent transaction approved by the original grant of a Stock Incentive. Notwithstanding the foregoing, in no event shall payment of withholding taxes be made by
retention of Shares by the Company unless the Company retains only Shares with a Fair Market Value equal to the minimum amount of taxes required to be withheld. Subject to the foregoing, the Participant, and not the Company, shall be and remain responsible for any and all taxes arising out of the grant, exercise or receipt of any Stock Incentive awarded under this Plan.
 

 

	
            13.4 
 	
            NOTIFICATION OF DISQUALIFYING DISPOSITIONS OF ISO OPTIONS. If a Participant sells or otherwise disposes of any of the Shares acquired pursuant to an Option that is an ISO on or before the later of (a) the date two (2) years after the date of grant of such Option, or (b) the date one (1) year after the exercise of such Option, or except as otherwise permitted under Code Section 422(a)(2), then the Participant shall immediately notify the Company in writing of such sale or disposition and shall cooperate with the Company in providing sufficient information to the Company for the Company to properly report such sale or disposition to the Internal Revenue Service. The Participant acknowledges and agrees that he or she may be subject to federal, state and/or local tax withholding by the Company on the compensation income recognized by Participant from any such early
disposition, and agrees that he or she shall include the compensation from such early disposition in his gross income for federal tax purposes. Participant also acknowledges that the Company may condition the exercise of any Option that is an ISO on the Participant’s express written agreement with these provisions of this Plan. 
 

 

	
            13.5
 	
            TRANSFERS AND RESTRUCTURINGS. The transfer of a Participant’s employment between or among the Company or a Subsidiary (including the merger of a Subsidiary into the Company) shall not be treated as a termination of his or her employment under this Plan. Likewise, the continuation of employment by a Participant with a corporation that is a Subsidiary shall be deemed to be a termination of employment when such corporation ceases to be a Subsidiary. 
 

	
            13.6
 	
            LEAVES OF ABSENCE. Unless the Committee provides otherwise, vesting of Stock Incentives granted hereunder will be suspended during any unpaid leave of absence. A Participant will not cease to be an employee of the Company in the case of any leave of absence approved by the Company. For purposes of ISOs, no such leave may exceed 90 days unless reemployment upon expiration of such leave is guaranteed by statute or contract. If reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, then three (3) months following the 91st day of such leave any ISO held by the Participant will cease to be treated as an ISO and if exercised thereafter will be treated for tax purposes as a NQSO.
 

 

	
            13.7
 	
            GOVERNING LAW/CONSENT TO JURISDICTION. This Plan shall be construed under the laws of the State of Minnesota without regard to principles of conflicts of law. Each Participant consents to the exclusive jurisdiction in the United States District Court for the District of Minnesota for the determination of all disputes arising from this Plan and waives any rights to remove or transfer the case to another court. 
 

 

	
            13.8
 	
            ESCROW OF SHARES. To facilitate the Company’s rights and obligations under this Plan, the Company reserves the right to appoint an escrow agent, who shall hold the Shares owned by a Participant pursuant to this Plan.
 

 

	
            13.9
 	
            IMPACT OF RESTATEMENT OF FINANCIAL STATEMENTS UPON STOCK INCENTIVES. If any of the Company’s financial statements are required to be restated resulting from errors, omissions or fraud, the Committee may (in its sole discretion, but acting in good faith) direct that the Company recover all or a portion of any Stock Incentive with respect to any fiscal year of the Company the financial results of which are negatively affected by such restatement. The amount to be recovered from the Participant shall be the amount by which the Stock Incentive exceeded the amount that would have been payable to the Participant had the financial statements been initially filed as restated, or any greater or lesser amount (including, but not limited to, the entire award) that the Committee shall determine. In no event shall the amount to be recovered by the Company be less than the
amount required to be repaid or recovered as a matter of law. In addition to or in lieu of the right to recovery set forth above, the Committee shall determine whether the Company shall effect any such recovery (a) by seeking repayment from the Participant, (b) by reducing (subject to applicable law and the terms and conditions of the applicable plan, program or arrangement) the amount that would otherwise be payable to the Participant under any compensatory plan, program or arrangement maintained by the Company or any of its affiliates, (c) by withholding payment of future increases in compensation (including the payment of any discretionary bonus amount) or grants of compensatory awards that would otherwise have been made in accordance with the Company’s otherwise applicable compensation practices, or (d) by any combination of the foregoing. 
 

 

	
            13.10
 	
            FORFEITURE AND RECOUPMENT. Without limiting in any way the generality of the Committee’s power to specify any terms and conditions of an Award consistent with law, and for greater clarity, the Committee may specify in an Stock Incentive Agreement that the Participant’s rights, payments, and benefits with respect to a Stock Incentive under this Plan shall be subject to reduction, cancellation, forfeiture, or recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable vesting or performance conditions. Such events shall include, but shall not be limited to, failure to accept the terms of the Stock Incentive Agreement, termination of employment or services under certain or all circumstances, violation of material Company policies, breach of noncompetition, confidentiality, nonsolicitation, noninterference, corporate
property protection, or other agreement that may apply to the Participant, or other conduct by the Participant that the Committee determines is detrimental to the business or reputation of the Company and its Subsidiaries.
 

SECTION 14

PERFORMANCE CRITERIA

 

	
            14.1 
 	
            PERFORMANCE GOAL BUSINESS CRITERIA. Unless and until the Board proposes for shareholder vote and shareholders approve a change in the general performance measures set forth in this Section, the attainment of which may determine the degree of payout and/or vesting with respect to Stock Incentives to Key Employees and Key Persons pursuant to this Plan which are designed to qualify for the Performance-Based Exception, the performance measure(s) to be used by the Committee for purposes of such grants shall be chosen from among the following: (a) earnings per share; (b) net income (before or after taxes); (c) return measures (including, but not limited to, return on assets, equity or sales); (d) cash flow return on investments which equals net cash flows divided by owners equity; (e) earnings before or after taxes, depreciation and/or amortization; (f) gross revenues;
(g) operating income (before or after taxes); (h) total shareholder return; (i) corporate performance indicators (indices based on the level of certain services provided to customers); (j) cash generation, profit and/or revenue targets; (k) growth measures, such as revenue growth; (l) ratios, such as expenses or market share and/or (m) share price (including, but not limited to, growth measures and total shareholder return). In setting performance goals using these performance measures, the Committee may establish absolute goals or goals relative to a peer group performance or other benchmark, and may exclude the effect of changes in accounting standards and non-recurring unusual events specified by the Committee, such as write-offs, capital gains and losses and acquisitions and dispositions of businesses. 
 

 

	
            14.2 
 	
            DISCRETION IN FORMULATION OF PERFORMANCE GOALS. The Committee shall have the discretion to adjust the determinations of the degree of attainment of the pre-established performance goals; provided, however, that Stock Incentives that are intended to qualify for the Performance-Based Exception may not be adjusted upward (although the Committee shall retain the discretion to adjust such Stock Incentives downward). 
 

 

	
            14.3 
 	
            PERFORMANCE PERIODS. The Committee shall have the discretion to determine the period during which any performance goal must be attained with respect to a Stock Incentive. Such period may be of any length, and must be established prior to the start of such period or within the first ninety (90) days of such period (provided that the performance criteria are not in any event set after 25% or more of such period has elapsed). 
 

 

	
            14.4 
 	
            MODIFICATIONS TO PERFORMANCE GOAL CRITERIA. In the event that the applicable tax and/or securities laws and regulatory rules and regulations change to permit Committee discretion to alter the governing performance measures noted above without obtaining shareholder approval of such changes, the Committee shall have sole discretion to make such changes without obtaining shareholder approval. In addition, in the event that the Committee determines that it is advisable to grant Stock Incentives that shall not qualify for the Performance-Based Exception, the Committee may make such grants without satisfying the requirements under Code Section 162(m) to qualify for the Performance-Based Exception. 
 

 

SECTION 15

NON-US PROVISIONS

 

	
            15.1 
 	
            The Committee shall have the authority to require that any Stock Incentive Agreement relating to a Stock Incentive in a jurisdiction outside of the United States contain such terms as are required by local law in order to constitute a valid grant under the laws of such jurisdiction. Such authority shall be notwithstanding the fact that the requirements of the local jurisdiction may be different from or more restrictive than the terms set forth in this Plan. No purchase or delivery of Shares pursuant to a Stock Incentive shall occur until applicable restrictions imposed pursuant to this Plan or the applicable Stock Incentive have terminated. 
 

 

Approved by Board of Directors on March 23, 2007 

Ratified by our shareholders on May 15, 2007. 

Amended by the Board of Directors May 15, 2007.efc7-2575_emailex41.htm

    Exhibit
      4.1

     

    THE
      MERRILL LYNCH FUTURESACCESSSM
      FUNDS

     

     

    GENERAL
      FORM

     

     

    of

     

     

    OPERATING
      AGREEMENT

     

    _______________________________

     

    

     

    THE
      UNITS OF LIMITED LIABILITY COMPANY INTEREST CREATED HEREBY HAVE NOT BEEN
      REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES ACT, AND
      MAY
      NOT BE SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT AS PERMITTED UNDER
      APPLICABLE SECURITIES LAWS AND WITH THE CONSENT OF THE
      SPONSOR.

     

    _______________________________

     

     

    

     

     

    

     

     

    

     

     

    Merrill
      Lynch Alternative Investments LLC

     

    Sponsor

     

    

     

    

     

    April
      1, 2007

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    THE
      MERRILL LYNCH FUTURESACCESSSM
      FUNDS

    
      GENERAL
        FORM OF OPERATING AGREEMENT 
        
          

        

      

      
        
          TABLE
            OF CONTENTS

           

        

        
          	
                  ARTICLE
                    I ORGANIZATION

                	 
	 	 
	
                  SECTION
                    1.01. OBJECTIVES AND PURPOSES.

                	
                  1

                
	
                  SECTION
                    1.02. APPOINTMENT OF THE TRADING ADVISOR; INVESTMENT OF CASH
                    RESERVES

                	
                  2

                
	
                  SECTION
                    1.03. FISCAL YEAR; ACCOUNTING PERIODS

                	
                  3

                
	
                  SECTION
                    1.04. REGISTERED AGENT AND OFFICE; PRINCIPAL OFFICE

                	
                  3

                
	
                  SECTION
                    1.05. DURATION OF THIS FUTURESACCESS FUND

                	
                  3

                
	
                  SECTION
                    1.06. NON-ASSIGNABILITY OF UNITS; SUBSTITUTED INVESTORS; LIMITED
                    ASSIGNABILITY OF THE SPONSOR’S INTEREST.

                	
                  3

                
	
                  SECTION
                    1.07. LIABILITY OF INVESTORS.

                	
                  3

                
	 	 
	
                  ARTICLE
                    II CAPITAL AND TAX ALLOCATIONS

                	 
	 	 
	
                  SECTION
                    2.01. CAPITAL CONTRIBUTIONS

                	
                  4

                
	
                  SECTION
                    2.02. OPENING CAPITAL ACCOUNTS.

                	
                  6

                
	
                  SECTION
                    2.03. FINANCIAL ALLOCATIONS AMONG THE UNITS

                	
                  7

                
	
                  SECTION
                    2.04. NET ASSET VALUE

                	
                  7

                
	
                  SECTION
                    2.05. SPONSOR’S FEES; MANAGEMENT AND PERFORMANCE FEES; TRANSACTION COSTS;
                    OPERATING EXPENSES.

                	
                  8

                
	
                  SECTION
                    2.06. ALLOCATION OF PROFITS AND LOSSES FOR FINANCIAL
                    PURPOSES

                	
                  9

                
	
                  SECTION
                    2.07. ALLOCATION OF PROFITS AND LOSSES FOR INCOME TAX
                    PURPOSES.

                	
                  9

                
	
                  SECTION
                    2.08. CHARGEBACKS TO CURRENT OR FORMER INVESTORS

                	
                  11

                
	
                  SECTION
                    2.09. PROCESSING OF SUBSCRIPTIONS.

                	
                  11

                
	
                  SECTION
                    2.10. VALUATION OF ASSETS

                	
                  11

                
	
                  SECTION
                    2.11. USE OF ESTIMATES

                	
                  13

                
	
                  SECTION
                    2.12. ACCOUNTING PRACTICES

                	
                  13

                
	 	 
	
                  ARTICLE
                    III PARTICIPATION IN FUTURESACCESS FUND PROPERTY; REDEMPTIONS
                    AND
                    DISTRIBUTIONS

                	 
	 	 
	
                  SECTION
                    3.01. NO UNDIVIDED INTERESTS IN FUTURESACCESS FUND
                    PROPERTY

                	
                  13

                
	
                  SECTION
                    3.02. REDEMPTIONS OF UNITS; EXCHANGES.

                	
                  13

                

        

         

         

        
          
            
            

          

          
            A-i

            
              

            

          

          
            
            

          

        

         

        TABLE OF CONTENTS (cont.)

        
          	
                  SECTION
                    3.03. WITHDRAWALS OF CAPITAL BY THE SPONSOR.

                	
                  14

                
	
                  SECTION
                    3.04. MANDATORY REDEMPTIONS.

                	
                  14

                
	
                  SECTION
                    3.05. MANDATORY REDEMPTIONS TO PAY TAXES

                	
                  15

                
	
                  SECTION
                    3.06. DISTRIBUTIONS

                	
                  15

                
	
                  SECTION
                    3.07. FORM OF DISTRIBUTION AND REDEMPTION PAYMENTS

                	
                  15

                
	
                  SECTION
                    3.08. REMOVAL OF THE SPONSOR

                	
                  15

                
	 	 
	
                  ARTICLE
                    IV WITHDRAWAL OF THE SPONSOR AND INVESTORS

                	 
	 	 
	
                  SECTION
                    4.01. WITHDRAWAL OF THE SPONSOR.

                	
                  15

                
	
                  SECTION
                    4.02. WITHDRAWAL OF AN INVESTOR

                	
                  15

                
	
                  SECTION
                    4.03. STATUS AFTER WITHDRAWAL

                	
                  15

                
	 	 
	
                  ARTICLE
                    V MANAGEMENT

                	 
	 	 
	
                  SECTION
                    5.01. AUTHORITY OF THE SPONSOR.

                	
                  15

                
	
                  SECTION
                    5.02. SERVICE PROVIDERS; INVESTMENTS; ACCOUNTS

                	
                  16

                
	
                  SECTION
                    5.03. ACTIVITIES OF THE SPONSOR PARTIES.

                	
                  16

                
	
                  SECTION
                    5.04. SERVICES TO THIS FUTURESACCESS FUND

                	
                  17

                
	
                  SECTION
                    5.05. INTERESTED PARTIES

                	
                  17

                
	
                  SECTION
                    5.06. EXCULPATION

                	
                  17

                
	
                  SECTION
                    5.07. INDEMNIFICATION

                	
                  17

                
	
                  SECTION
                    5.08. INVESTORS’ TRANSACTIONS

                	
                  18

                
	
                  SECTION
                    5.09. RELIANCE BY THIRD PARTIES

                	
                  18

                
	
                  SECTION
                    5.10. REGISTRATION OF ASSETS

                	
                  18

                
	
                  SECTION
                    5.11. LIMITATION ON AUTHORITY OF THE SPONSOR

                	
                  18

                
	 	 
	
                  ARTICLE
                    VI ADMISSION OF INVESTORS

                	 
	 	 
	
                  SECTION
                    6.01. PROCEDURE AS TO NEW INVESTORS

                	
                  18

                
	
                  SECTION
                    6.02. PROCEDURE AS TO NEW MANAGERS

                	
                  18

                
	 	 
	
                  ARTICLE
                    VII BOOKS OF ACCOUNT; AUDITS; REPORTS TO
                    INVESTORS

                	 
	 	 
	
                  SECTION
                    7.01. BOOKS OF ACCOUNT

                	
                  19

                
	
                  SECTION
                    7.02. ANNUAL AUDIT

                	
                  19

                
	
                  SECTION
                    7.03. INTERIM REPORTS

                	
                  19

                
	 	 
	
                  ARTICLE
                    VIII CONFLICTS OF INTEREST

                	 
	 	 
	
                  SECTION
                    8.01. INVESTORS’ CONSENT

                	
                  19

                
	 	 
	
                  ARTICLE
                    IX DISSOLUTION AND WINDING UP OF THIS FUTURESACCESS
                    FUND

                	 

        

         

        
          
            
            

          

          
            A-ii

            
              

            

          

          
            
            

          

        

        
           

          TABLE OF CONTENTS (cont.)

        

        
          	 	 
	
                  SECTION
                    9.01. EVENTS OF DISSOLUTION

                	
                  20

                
	
                  SECTION
                    9.02. DISSOLUTION

                	
                  20

                
	 	 
	
                  ARTICLE
                    X MISCELLANEOUS PROVISIONS

                	 
	 	 
	
                  SECTION
                    10.01. INVESTORS NOT TO CONTROL

                	
                  21

                
	
                  SECTION
                    10.02. POWER OF ATTORNEY

                	
                  21

                
	
                  SECTION
                    10.03. AMENDMENTS; CONSENTS

                	
                  21

                
	
                  SECTION
                    10.04. NOTICES

                	
                  22

                
	
                  SECTION
                    10.05. LEGAL EFFECT; MANNER OF EXECUTION

                	
                  22

                
	
                  SECTION
                    10.06. GOVERNING LAW

                	
                  22

                
	
                  SECTION
                    10.07. CONSENT TO JURISDICTION

                	
                  22

                
	
                  SECTION
                    10.08. “TAX MATTERS PARTNER”; TAX ELECTIONS

                	
                  22

                
	
                  SECTION
                    10.09. DETERMINATION OF MATTERS NOT PROVIDED FOR IN THIS
                    AGREEMENT

                	
                  22

                
	
                  SECTION
                    10.10. NO PUBLICITY

                	
                  22

                
	
                  SECTION
                    10.11. SURVIVAL

                	
                  23

                
	
                  SECTION
                    10.12. WAIVERS

                	
                  23

                
	
                  SECTION
                    10.13. VOTING RIGHTS

                	
                  23

                
	
                  SECTION
                    10.14. ISSUANCE OF DIFFERENT CLASSES.

                	
                  23

                
	
                  SECTION
                    10.15. COMPLIANCE WITH THE INVESTMENT ADVISERS ACT OF 1940; SECURITIES
                    LAWS.

                	
                  23

                
	
                  __________________

                	 
	 	 
	
                  TESTIMONIUM

                	 
	
                  SIGNATURES

                	 

        

         

        
          
            
            

          

          
            A-iii

            
              

            

          

          
            
            

          

        

ALL
        DOMESTIC MERRILL LYNCH FUTURESACCESS FUNDS SHALL BE GOVERNED
        BY

    

    THIS
      GENERAL FORM OF OPERATING AGREEMENT FROM AND AFTER APRIL 1,
      2007

     

    THE
      MERRILL LYNCH FUTURESACCESSSM
      FUNDS

     

    GENERAL
      FORM

     

    of

     

    OPERATING
      AGREEMENT

     

    as
      of April 1, 2007

     

    THIS
      LIMITED LIABILITY COMPANY OPERATING AGREEMENT (“Agreement”) dated
      ______________, _____ of ______________________________ (this “FuturesAccess
      Fund”) by and among Merrill Lynch Alternative Investments LLC, a Delaware
      limited liability company (the “Sponsor”), and those persons who shall invest in
      the units of limited liability company interest (“Units”) created hereby — Class
      A, Class C, Class D and Class I — and shall execute this Agreement, by
      power-of-attorney, as members (such members being hereinafter sometimes referred
      to collectively as “Investors”; provided, that for purposes of voting, Units
      held by the Sponsor shall not be considered to be held by an
      Investor).

     

    WHEREAS,
      the parties hereto desire to form or continue the FuturesAccess Fund, a limited
      liability company under the provisions of the Delaware Limited Liability Company
      Act (the “Act”), which shall be one of the funds included in the Merrill Lynch
      FuturesAccessSM
      Program (“FuturesAccess”); such other funds to be hereinafter sometimes referred
      to as “FuturesAccess Funds”).

     

    WHEREAS,
      units of limited liability company interest issued by the FuturesAccess Funds
      in
      general shall hereinafter be referred to as “Units.”

     

    WHEREAS,
      the Sponsor is the sponsor of the FuturesAccess Fund and the manager of the
      FuturesAccess Fund for purposes of the Act.

     

    WHEREAS,
      in addition to FuturesAccess, the Sponsor also sponsors the HedgeAccessSM Program
      (“HedgeAccess”) of private investment funds concentrating on securities, rather
      than futures and forward trading (such funds being hereinafter referred to
      as
“HedgeAccess Funds”).

     

    WHEREAS,
      the parties hereby desire to set forth the terms pursuant to which the
      FuturesAccess Fund shall be governed.

     

    NOW,
      THEREFORE, in consideration of the premises, the mutual agreements herein
      contained and other good and valuable consideration, the receipt and sufficiency
      of which are hereby acknowledged, the parties hereto agree as
      follows:

     

    ARTICLE
      I

    ORGANIZATION

     

    SECTION
      1.01.  OBJECTIVES
      AND PURPOSES.

     

    
      	
              (a)  

            	
              This
                FuturesAccess Fund shall have the following objectives and
                purposes:

            

    

     

    
      	
              (i)  

            	
              to
                retain a professional trading advisor (the “Trading Advisor”) to manage
                this FuturesAccess Fund’s speculative trading in the futures, forward,
                options and other markets as described in the Part One (A) Confidential
                Program Disclosure Document: FuturesAccessSM
                Program
                General Information, the Part One (B): Confidential Program Disclosure
                Document Trading Advisor 

            

    

     

    
      
        
        

      

      
        
          A-1

           

          
            
              The
                Merrill Lynch FuturesAccessSM
Funds

              General
                Form of Operating Agreement Dated as of April 1,
                2007

            

          

        

        
          

        

      

      
        
        

      

    

     

    
      	 	Information
              and the Part Two Confidential Program Disclosure Document: Statement
              of
              Additional Information, as they may be amended from time to time
              (collectively, the “Confidential Program Disclosure
              Document”);

      	 	 

      	
              (ii)  

            	
              to
                maintain such futures brokerage, forward dealing and other counterparty
                accounts, as well as such cash reserves as the Sponsor may from time
                to
                time deem to be appropriate and to invest and manage all such cash
                reserves; and

            

    

     

    
      	
              (iii)  

            	
              to
                engage in any other lawful act or activity within and without the
                United
                States for which limited liability companies may be organized under
                the
                laws of the State of Delaware.

            

    

     

    
      	
              (b)  

            	
              This
                FuturesAccess Fund, and the Sponsor on behalf of this FuturesAccess
                Fund,
                shall have the power to enter into, make and perform all contracts
                and
                other undertakings, and engage in all activities and transactions
                as may
                be necessary or advisable to the carrying out of the foregoing purposes,
                including, without limitation, the
                power:

            

    

     

    
      	
              (i)  

            	
              to
                trade futures, forwards, options and other instruments, on margin
                and
                otherwise;

            

    

     

    
      	
              (ii)  

            	
              to
                borrow money from banks or brokers, and to secure the payment of
                any
                obligations of this FuturesAccess Fund by hypothecation or pledge
                of all
                or part of the assets of this FuturesAccess
                Fund;

            

    

     

    
      	
              (iii)  

            	
              to
                exercise, as applicable, all rights, powers, privileges and other
                incidents of ownership or possession with respect to the assets of
                this
                FuturesAccess Fund;

            

    

     

    
      	
              (iv)  

            	
              to
                open, maintain and close bank, brokerage and other
                accounts;

            

    

     

    
      	
              (v)  

            	
              to
                prepare and file all tax returns required of this FuturesAccess Fund
                and
                make any election or determination on behalf of this FuturesAccess
                Fund in
                connection therewith or as otherwise required or permitted by applicable
                tax laws;

            

    

     

    
      	
              (vi)  

            	
              to
                bring, defend, compromise and settle legal actions or other claims
                on
                behalf of this FuturesAccess Fund;

            

    

     

    
      	
              (vii)  

            	
              to
                maintain insurance on behalf of this FuturesAccess Fund, including
                indemnification insurance; or

            

    

     

    
      	
              (viii)  

            	
              to
                take any and all such actions as the Sponsor may deem to be necessary
                or
                advisable in connection with the
                foregoing.

            

    

     

    SECTION
      1.02.  APPOINTMENT
      OF THE TRADING ADVISOR; INVESTMENT OF CASH RESERVES.  The Sponsor
      shall appoint the Trading Advisor to have discretionary authority over this
      FuturesAccess Fund’s trading and investing as described in the Confidential
      Program Disclosure Document.  This FuturesAccess Fund may execute
      transactions in commodity interests, currency interests, swap agreements and
      any
      other manner of instruments, on either a principal or an agency basis, with
      or
      through affiliates of the Sponsor (the Sponsor and such affiliates being
      hereafter referred to as “Merrill Lynch”) or third parties.  The sole
      clearing broker and the principal forward trading counterparty for this
      FuturesAccess Fund shall be Merrill Lynch unless the Sponsor otherwise
      determines.

     

    This
      FuturesAccess Fund shall deposit all or substantially all of this FuturesAccess
      Fund’s capital with Merrill Lynch or any other clearing brokers selected by the
      Sponsor pursuant to the arrangements described in the Confidential Program
      Disclosure Document, all Investors acknowledging that Merrill Lynch will not
      only receive futures brokerage commissions and bid-ask spreads from this
      FuturesAccess Fund but also will retain significant economic benefits from
      the
      possession of this FuturesAccess Fund’s assets (in addition to the interest
      which Merrill Lynch will credit to this FuturesAccess Fund’s

     

    
      
        
        

      

      
        
          A-2

           

          
            
              The
                Merrill Lynch FuturesAccessSM
Funds

              General
                Form of Operating Agreement Dated as of April 1,
                2007

            

          

        

        
          

        

      

      
        
        

      

    

     

    account).  In
      addition, the Sponsor may maintain this FuturesAccess Fund’s assets in deposit
      or similar accounts with one or more affiliates of the Sponsor, which affiliates
      may benefit from the possession of such assets, as well as with unaffiliated
      entities.  The interest paid by such affiliated and unaffiliated
      entities on this FuturesAccess Fund’s cash so invested will be paid to this
      FuturesAccess Fund.  However, neither the Sponsor nor any of its
      affiliates (or any third parties) will be obligated to account to this
      FuturesAccess Fund or any Investor for any additional economic benefits which
      the Sponsor or any such affiliate may derive from possession of this
      FuturesAccess Fund’s assets.

     

    SECTION
      1.03.  FISCAL
      YEAR; ACCOUNTING PERIODS.  The fiscal year of this FuturesAccess Fund
      shall end on each December 31.  This FuturesAccess Fund’s accounting
      periods (“Accounting Periods”), as of the end of each of which increases and
      decreases in this FuturesAccess Fund’s “Net Assets” (as defined in Section 2.04)
      shall be calculated and reflected in the Net Asset Value of the Units issued
      by
      this FuturesAccess Fund, shall begin: (i) as of the day that this FuturesAccess
      Fund first begins operations; (ii) as of the day that any Unit is issued; (iii)
      as of the day immediately following any redemption of Units or withdrawal from
      an Investor’s Capital Account; (iv) as of the beginning of each calendar month;
      and (v) as of such other day as the Sponsor may determine.  An
      Accounting Period shall end on the day immediately preceding the beginning
      of
      the next Accounting Period.

     

    SECTION
      1.04.  REGISTERED
      AGENT AND OFFICE; PRINCIPAL OFFICE.  This FuturesAccess Fund shall
      maintain in the State of Delaware a registered agent and office.  The
      identity and location of said registered agent and office shall be determined
      by
      the Sponsor, and may be changed from time to time by the Sponsor.

     

    The
      initial registered office of this FuturesAccess Fund in the State of Delaware
      is
      c/o The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street,
      Wilmington, New Castle County, Delaware 19801.

     

    The
      principal office of this FuturesAccess Fund shall be located at the offices
      of
      the Sponsor, Princeton Corporate Campus, 800 Scudders Mill Road, Section 2G,
      Plainsboro, New Jersey 08536, or such other place as the Sponsor may designate
      from time to time.

     

    SECTION
      1.05.  DURATION
      OF THIS FUTURESACCESS FUND.  The term of this FuturesAccess Fund
      commenced as of the date its Certificate of Formation was filed with the
      Secretary of State of the State of Delaware, and shall continue until terminated
      by the dissolution and winding up of this FuturesAccess Fund as hereinafter
      provided.

     

    SECTION
      1.06.  NON-ASSIGNABILITY
      OF UNITS; SUBSTITUTED INVESTORS; LIMITED ASSIGNABILITY OF THE SPONSOR’S
      INTEREST.

     

    
      	
              (a)  

            	
              No
                Investor shall assign, encumber, pledge, hypothecate or otherwise
                transfer
                any of such Investor’s Units without the consent of the Sponsor, and any
                assignment, encumbrance, pledge, hypothecation or transfer of Units,
                whether voluntary, involuntary or by operation of law, to which the
                Sponsor does not consent shall result in the Units so assigned,
                encumbered, pledged, hypothecated or otherwise transferred being
                mandatorily redeemed as of the end of the month during which such
                purported assignment, encumbrance, pledge, hypothecation or transfer
                occurred.  Any assignment, encumbrance, pledge, hypothecation or
                transfer which shall result in the termination of this FuturesAccess
                Fund
                for federal income tax purposes shall be null and void ab initio
                and of no
                legal force or effect whatsoever.  An assigning Investor shall
                remain liable to this FuturesAccess Fund as provided in the Act,
                regardless of whether his or her assignee becomes a substituted
                Investor.

            

    

     

    
      	
              (b)  

            	
              The
                Sponsor may not assign, encumber, pledge, hypothecate or otherwise
                transfer all or any portion of its manager’s interest in this
                FuturesAccess Fund; provided, that the Sponsor may assign such interest
                to
                an affiliate of the Sponsor upon notice (which need not be prior
                notice)
                to the Investors or in connection with the sale or transfer of all
                or a
                material portion of the Sponsor’s equity or assets.  See
                Sections 4.01 and 6.02.

            

    

     

    SECTION
      1.07.  LIABILITY
      OF INVESTORS.

     

    
      
        
        

      

      
        
          A-3

           

          
            
              The
                Merrill Lynch FuturesAccessSM
Funds

              General
                Form of Operating Agreement Dated as of April 1,
                2007

            

          

        

        
          

        

      

      
        
        

      

    

     

    
      	
              (a)  

            	
              Nothing
                herein shall require the Sponsor to maintain any minimum net worth
                or
                shall make any person associated with the Sponsor individually liable
                for
                any debt, liability or obligation of this FuturesAccess Fund or of
                the
                Sponsor.

            

    

     

    
      	
              (b)  

            	
              No
                Investor shall have any obligation to restore any negative balance
                in such
                Investor’s Capital Account.

            

    

     

    
      	
              (c)  

            	
              The
                Sponsor shall have no obligation to restore any negative balance
                in any
                Investor’s or in the Sponsor’s Capital
                Account.

            

    

     

    
      	
              (d)  

            	
              Except
                as provided in Section 2.08 (providing for chargebacks to current
                or
                former Investors), the Sponsor and the Investors shall be liable
                for the
                repayment, satisfaction and discharge of debts, liabilities and
                obligations of this FuturesAccess Fund only to the extent of the
                Sponsor’s
                or such Investor’s investment in this FuturesAccess Fund and not in excess
                thereof.

            

    

     

    ARTICLE
      II

    CAPITAL
      AND TAX ALLOCATIONS

     

    SECTION
      2.01.  CAPITAL
      CONTRIBUTIONS.  All Capital Contributions to this FuturesAccess Fund
      shall be made in cash.  Capital Contributions may be made in such
      amounts, and at such times, as the Sponsor may determine. The Sponsor may permit
      certain Investors to make smaller initial or subsequent Capital Contributions
      than is otherwise generally required by the Sponsor without entitling any other
      Investor to make smaller initial or subsequent Capital
      Contributions

     

    Investors
      will receive Units in return for their Capital Contributions.  Each
      Class of Units shall initially be issued at $1.00 per Unit, and thereafter
      at
      Net Asset Value.

     

    The
      Sponsor (and/or any other Merrill Lynch entity) may, but need not, make Capital
      Contributions as of any date that any Units are issued.  Merrill Lynch
      may provide initial (“seed”) capital to enable the Fund to begin trading before
      sufficient client capital has been raised to meet the Fund’s minimum
      capitalization.  Seed capital (if any) will be invested in Class D
      Units.  However, neither the Sponsor nor any other Merrill Lynch
      entity has any obligation to “seed” the Fund (or any other FuturesAccess
      Fund).  The Units shall be issued in four Classes — Class A Units,
      Class C Units, Class D Units and Class I Units.  Units of a new Class
      or Series may be issued in the Sponsor’s sole discretion.

     

    Sales
      commissions will be deducted from Class A, Class D and Class I subscriptions
      as
      described in the Confidential Program Disclosure Document, and the net amount
      of
      such subscriptions (after deducting applicable sales commissions) will be
      invested in the Units.  The Sponsor may waive or reduce sales
      commissions for certain Investors without entitling any other Investor to any
      such waiver or reduction.

     

    Fractional
      Units shall not be issued to Investors (but may be issued to the Sponsor or
      any
      other Merrill Lynch entity).  Investors’ subscriptions shall be used
      to purchase the largest whole number of Units of the appropriate Class
      possible.  Any subscription amount which cannot be used to purchase
      whole Units will be credited (in cash) to Investors’ Merrill Lynch customer
      securities accounts.

     

    Provided
      the FuturesAccess Fund’s overall minimum capitalization is met, there is no
      minimum number of Units of a particular Class that must be sold in order for
      Units of that particular Class to be issued.

     

    Once
      the
      FuturesAccess Fund has begun operations, there is no minimum dollar amount
      of
      subscriptions that must be received as of the beginning of any calendar quarter
      in order for additional Units of any Class to be issued.  All Units
      will be issued only as the Sponsor may determine, irrespective of how many
      subscriptions are received.

     

    Class
      eligibility shall be determined on the basis of an Investor’s total
“FuturesAccess Investment” (defined below) in FuturesAccess overall as well as,
      in the case of Class D Units, in a particular FuturesAccess Fund.  An
      Investor’s “FuturesAccess Investment,” determined as of the beginning of each
      month, equals the greater of:

     

    
      
        
        

      

      
        
          A-4

           

          
            
              The
                Merrill Lynch FuturesAccessSM
Funds

              General
                Form of Operating Agreement Dated as of April 1,
                2007

            

          

        

        
          

        

      

      
        
        

      

    

     

    (i)           the
      market value of all of an Investor’s outstanding Units (or in a particular
      FuturesAccess Fund, as applicable) based on the most recently available Net
      Asset Values, plus pending subscriptions; or

     

    (ii)           an
      Investor’s net subscriptions to FuturesAccess overall (or to a particular
      FuturesAccess Fund, as applicable).  Net subscriptions means an
      Investor’s aggregate subscriptions less aggregate redemptions (not including
      pending redemptions).

     

    Class
      A
      and Class C Units shall be assigned for FuturesAccess Investments up to
      $5,000,000; Class I Units are assigned for FuturesAccess Investments
      of  $5,000,000 or more; and Class D Units are assigned for
      FuturesAccess Investments in an individual FuturesAccess Fund of $5,000,000
      or
      more or aggregate FuturesAccess Investments of $15,000,000 or more.

     

    Except
      for purposes of determining Class D eligibility in a particular FuturesAccess
      Fund, the purchase and sale of Units in an exchange shall offset each other
      and
      shall have no effect on the amount of an Investor’s net subscriptions to
      FuturesAccess overall.

     

    FuturesAccess
      Investments attributable to certain related accounts may be combined for
      purposes of determining an Investor’s Class I and Class D
      eligibility.  In addition, Investors who participate in HedgeAccess
      (private investment funds which primarily trade securities) shall be permitted
      to aggregate their Investments in FuturesAccess and HedgeAccess  for
      purposes of determining such Investors’ Class I and Class D
      eligibility.

     

    There
      shall be no minimum FuturesAccess Investment required to invest in Class A
      or
      Class C Units (other than the minimum subscription amounts required to invest
      in
      a particular FuturesAccess Fund or FuturesAccess overall).

     

    New
      Investors whose initial subscription equals or exceeds $5,000,000 shall be
      issued Class I Units in each FuturesAccess Fund in which they
      invest.  If an existing Investor, whose FuturesAccess Investment is
      less than $5,000,000, makes an additional subscription which causes such
      Investor’s FuturesAccess Investment to equal or exceed $5,000,000 (including the
      new subscription), the entire new subscription shall be invested in Class I
      Units.  The Investor’s existing Units shall not be converted from
      Class A or Class C (as the case may be) to Class I Units, but all subsequent
      subscriptions and exchanges made by such Investor shall be for Class I
      Units.

     

    Class
      D
      eligibility is determined on both an individual FuturesAccess Fund and an
      overall FuturesAccess basis.

     

    Investors
      whose initial subscription to any one FuturesAccess Fund equals or exceeds
      $5,000,000 shall be issued Class D Units in that FuturesAccess
      Fund.  If an Investor, whose FuturesAccess Investment in a particular
      FuturesAccess Fund is less than $5,000,000, makes an additional subscription
      or
      exchange into that FuturesAccess Fund which causes such Investor’s FuturesAccess
      Investment to equal or exceed $5,000,000 (including the new subscription or
      exchange), the entire new subscription or exchange into that FuturesAccess
      Fund
      shall be invested in Class D Units.  The Investor’s existing Units in
      that FuturesAccess Fund shall not be converted to Class D Units, but all
      subsequent subscriptions or exchanges made by such Investor into the same
      FuturesAccess Fund shall be for Class D Units.  However,
      notwithstanding the fact that an Investor’s FuturesAccess Investment in a
      particular FuturesAccess Fund equals or exceeds $5,000,000, if that Investor
      invests or exchanges into another FuturesAccess Fund in which such Investor’s
      FuturesAccess Investment is less than $5,000,000, such Investor shall not
      receive Class D Units in such other FuturesAccess Fund (except as described
      immediately below).

     

    New
      Investors whose initial subscription equals or exceeds $15,000,000 shall be
      issued Class D Units in each FuturesAccess Fund in which they invest,
      irrespective of whether such Investor’s FuturesAccess Investments in any one
      FuturesAccess Fund equals or exceeds $5,000,000.  If an existing
      Investor, whose FuturesAccess Investment is less than $15,000,000, makes an
      additional subscription immediately after which such Investor’s FuturesAccess
      Investment equals or exceeds $15,000,000 (including the new subscription),
      the
      entire new subscription shall be invested in Class D Units.  The
      Investor’s existing Units shall not be converted to Class D Units, but all
      subsequent subscriptions and exchanges made by such Investor will be for Class
      D
      Units.

     

    
      
        
        

      

      
        
          A-5

           

          
            
              The
                Merrill Lynch FuturesAccessSM
Funds

              General
                Form of Operating Agreement Dated as of April 1,
                2007

            

          

        

        
          

        

      

      
        
        

      

    

     

    Subscriptions
      made to all FuturesAccess Funds shall be aggregated for purposes of determining
      whether an Investor is eligible to invest in Class D or Class I
      Units.

     

    Once
      an
      Investor is issued Class I or Class D Units, such Investor shall continue to
      be
      issued Class I or Class D Units (as applicable) irrespective of subsequent
      redemptions or Unit value depreciation; provided that, if an Investor withdraws
      entirely from FuturesAccess or a particular FuturesAccess Fund and subsequently
      reinvests, such Investor’s Class I and/or Class D Unit eligibility shall be
      determined from the date of such reinvestment as if such Investor had never
      previously participated in FuturesAccess or such FuturesAccess
      Fund.

     

    Merrill
      Lynch officers and employees invest in Class I Units without regard to the
      $5,000,000 minimum “Program Investment” requirement.  Such exemption
      from the minimum FuturesAccess Investment requirement shall not be generally
      available to other Investors.

     

    Certain
      Merrill Lynch clients may invest in Class I or a customized Class of Units
      on
      different terms than those described herein, depending on the type of Merrill
      Lynch Account held by such clients.  In addition, FuturesAccess Funds
      may from time to time offer to certain Merrill Lynch clients a customized Class
      of Units having different financial terms than those described herein or the
      Confidential Program Disclosure Document, provided that doing so does not have
      a
      material adverse effect on existing Investors.  Such customized
      Classes will generally be designed for Investors who are subject to additional
      fees on their investments in the FuturesAccess Funds depending on the type
      of
      Merrill Lynch Account held by such Investors or other reasons, and shall not
      be
      generally available to other Investors.

     

    The
      amount of each Investor’s Capital Contribution shall be set forth in such
      Investor’s FuturesAccess Program Subscription and Exchange Agreement Signature
      Page.  A FuturesAccess Program Subscription and Exchange Agreement
      (including the FuturesAccess Program Subscription and Exchange Agreement
      Signature Page) must be completed and accepted by the Sponsor prior to an
      Investor’s initial Capital Contribution if such Investor is not already an
      investor in FuturesAccess.  A new Program Subscription and Exchange
      Agreement Signature Page must be submitted each time an existing Investor makes
      a Capital Contribution or exchange.

     

    The
      aggregate of all Capital Contributions shall be available to this FuturesAccess
      Fund to carry out its objectives and purposes.

     

    No
      Investor shall be obligated to make any additional Capital Contributions, except
      as provided in Section 2.08.

     

    No
      provision of this Agreement shall be construed as guaranteeing the return,
      by
      any Sponsor Party or this FuturesAccess Fund, of all or any part of the Capital
      Contribution(s) of any Investor.

     

    SECTION
      2.02.  OPENING
      CAPITAL ACCOUNTS.

     

    
      	
              (a)  

            	
              There
                shall be established for each Unit of each Class on the books of
                this
                FuturesAccess Fund, as of the first day of each Accounting Period,
                an
                Opening Capital Account which, for the Accounting Period as of the
                beginning of which such Unit is issued, shall be the Capital Contribution
                made in respect of such Unit and which, for each Accounting Period
                thereafter, shall be an amount equal to the Closing Capital Account
                (determined as set forth in Section 2.06) attributable to such Unit
                for
                the immediately preceding Accounting
                Period.

            

    

     

    
      	
              (b)  

            	
              The
                Sponsor may, but shall not be required to, make Capital Contributions
                to
                this FuturesAccess Fund from time to time as new Units are issued,
                which
                shall be accounted for on a Unit-equivalent basis and shall participate
                in
                the profits and losses of the Units on the same basis as the Capital
                Accounts of the Class D Units.

            

    

     

    
      	
              (c)  

            	
              For
                all purposes of this Agreement, references to Units shall be deemed
                to
                include the Sponsor’s Capital Account on a Unit-equivalent basis (unless
                the context otherwise requires or the reference is made explicit
                for
                greater certainty).

            

    

     

    
      
        
        

      

      
        
          A-6

           

          
            
              The
                Merrill Lynch FuturesAccessSM
Funds

              General
                Form of Operating Agreement Dated as of April 1,
                2007

            

          

        

        
          

        

      

      
        
        

      

    

     

    SECTION
      2.03.  FINANCIAL
      ALLOCATIONS AMONG THE UNITS.  The net profits and losses are allocated
      to each Class as provided in Section 2.06 and shall be allocated equally among
      the Units of such Class.  All Units of the same Class shall have the
      same Net Asset Value.

     

    SECTION
      2.04.  NET
      ASSET
      VALUE.  For the purposes of this Agreement, unless the context
      otherwise requires, “Net Assets” and “Net Asset Value” shall mean assets less
      liabilities.  For purposes of determining Opening Capital Accounts,
      Net Asset Value shall be determined as of the beginning of, and for purposes
      of
      determining Closing Capital Accounts, Net Asset Value will be determined as
      of
      the close of, business on the relevant valuation date.

     

    
      	
              (a)  

            	
              The
                assets of this FuturesAccess Fund shall
                include:

            

    

     

    
      	
              (i)  

            	
              all
                cash on hand or on deposit in bank or other interest-bearing accounts,
                including any interest accrued
                thereon;

            

    

     

    
      	
              (ii)  

            	
              any
                accrued gains on open positions which have not been settled by crediting
                this FuturesAccess Fund’s account, as valued pursuant to Section
                2.10;

            

    

     

    
      	
              (iii)  

            	
              all
                bills, demand notes and accounts
                receivable;

            

    

     

    
      	
              (iv)  

            	
              all
                securities (including, without limitation, money-market funds, Treasury
                bills and other short-term, interest-bearing instruments), commodity
                interests, currency interests, swap agreements and all other instruments
                owned or contracted for by this FuturesAccess
                Fund;

            

    

     

    
      	
              (v)  

            	
              all
                interest accrued on any interest-bearing securities owned by this
                FuturesAccess Fund except to the extent that the same is included
                or
                reflected in the valuation of such securities;
                and

            

    

     

    
      	
              (vi)  

            	
              all
                other assets of every kind and nature, including prepaid
                expenses.

            

    

     

    
      	
              (b)  

            	
              The
                liabilities of this FuturesAccess Fund shall be deemed to include
                the
                following (provided, however, that in determining the amount of such
                liabilities, this FuturesAccess Fund may calculate expenses of a
                regular
                or recurring nature for any given period on an estimated basis in
                advance,
                and may accrue the same in such manner as the Sponsor may deem appropriate
                over such period):

            

    

     

    
      	
              (i)  

            	
              any
                accrued losses on open positions which have not been settled by debiting
                this FuturesAccess Fund’s account, as valued pursuant to Section
                2.10;

            

    

     

    
      	
              (ii)  

            	
              all
                bills and accounts payable;

            

    

     

    
      	
              (iii)  

            	
              all
                expenses accrued, reimbursable or payable;
                and

            

    

     

    
      	
              (iv)  

            	
              all
                other liabilities, present or future, including such reserves as
                the
                Sponsor may (as contemplated by Section 2.04(g)), deem
                advisable.

            

    

     

    
      	
              (c)  

            	
              The
                Management, Performance and Sponsor’s Fees shall be determined, and Units’
                Capital Accounts correspondingly reduced, after the allocation of
                the
                other components of Net Asset Value, as described
                above.

            

    

     

    
      	
              (d)  

            	
              Operating
                expenses shall be allocated among the Units pro rata based on
                their respective Net Asset Values as of the beginning of the
                month.

            

    

     

    
      	
              (e)  

            	
              Extraordinary
                costs, if any, shall be allocated as incurred in such manner as the
                Sponsor may deem to be fair and
                equitable.

            

    

     

    
      
        
        

      

      
        
          A-7

           

          
            
              The
                Merrill Lynch FuturesAccessSM
Funds

              General
                Form of Operating Agreement Dated as of April 1,
                2007

            

          

        

        
          

        

      

      
        
        

      

    

     

    
      	
              (f)  

            	
              Organizational
                and initial offering costs shall be deducted from Net Asset Value
                in
                installments as of the end of each of the first 60 calendar months
                after
                the initial issuance of the Units, as contemplated by Section 2.05(b)
                (for
                financial and performance reporting purposes, all such costs must
                be
                deducted from Net Asset Value as of the date of such initial
                issuance).

            

    

     

    
      	
              (g)  

            	
              All
                Investors, by becoming party to this Agreement, hereby agree and
                consent
                to the Sponsor’s authority to establish whatever reserves the Sponsor may
                determine to be appropriate in order to cover losses, contingencies,
                liabilities, uncertain valuations and other factors.  Any such
                reserves shall, unless the Sponsor determines that such reserves
                are
                properly attributable to certain but less than all outstanding Units,
                reduce the Net Asset Value of the Units of each Class pro rata
                based on their respective Net Asset Values, after reduction for accrued
                Sponsor’s Fees, operating expenses and extraordinary expenses until such
                time, if any, as such reserves are reversed.  Reserves, when
                reversed, shall be similarly allocated among the Units then outstanding
                pro rata based on their respective Net Asset Value (irrespective
                of whether such Units were outstanding when the reserves were
                established).

            

    

     

    
      	
              (h)  

            	
              The
                Sponsor may suspend the calculation of Net Asset Value during any
                period
                for which the Sponsor is unable to value a material portion of this
                FuturesAccess Funds’ positions.  The Sponsor will give notice of
                any such suspension to all
                Investors.

            

    

     

    SECTION
      2.05.  SPONSOR’S
      FEES; MANAGEMENT AND PERFORMANCE FEES; TRANSACTION COSTS; OPERATING
      EXPENSES.

     

    
      	
              (a)  

            	
              The
                Sponsor shall receive monthly Sponsor’s Fees, payable in arrears of 1/12
                of 1.50%, 2.50%, 0% and 1.10%, respectively, of the aggregate Net
                Asset
                Value of the Class A, Class C, Class D and Class I Units, in each
                case as
                of the close of business (as determined by the Sponsor) on the last
                business day of each calendar month (Net Asset Value for purposes
                of
                calculating the Sponsor’s Fees shall not be reduced by the accrued
                Sponsor’s Fees being calculated).  The Sponsor’s Fees shall be
                accrued monthly.  The Sponsor may waive or reduce Sponsor’s Fees
                for certain Investors without entitling any other Investor to any
                such
                waiver or reduction.

            

    

     

    
      	
              (b)  

            	
              This
                FuturesAccess Fund shall reimburse the Sponsor for the organizational
                and
                initial offering costs incurred by this FuturesAccess Fund in respect
                of
                the initial offering of the Units (of all Classes combined) in
                installments as of the end of each of the first 60 calendar months
                of this
                FuturesAccess Fund’s operation, beginning with the end of the first
                calendar month after the initial issuance of the Units.  This
                FuturesAccess Fund shall expense such costs over the same 60-month
                schedule. If this FuturesAccess Fund dissolves prior to the end of
                such 60
                calendar-month period, any remaining reimbursement obligation with
                respect
                to organizational and initial offering costs shall be
                eliminated.

            

    

     

    
      	
              (c)  

            	
              The
                Sponsor’s Fees, as well as operating expenses due to the Sponsor
                (including:  organizational and initial offering costs; ongoing
                offering costs; administrative, custody, transfer, exchange and redemption
                processing, legal, regulatory, filing, tax, audit, escrow, accounting
                and
                printing costs; and extraordinary expenses), shall be debited by
                the
                Sponsor directly from this FuturesAccess Fund’s account and paid to the
                Sponsor, where appropriate, as if to a third party, not credited
                to the
                Sponsor’s Capital Account.

            

    

     

    
      	
              (d)  

            	
              This
                FuturesAccess Fund shall pay all transaction costs (including futures
                brokerage commissions and bid-ask spreads as well as interest on
                foreign
                currency borrowings), as well as all Management and Performance Fees,
                as
                incurred.

            

    

     

    
      	
              (e)  

            	
              The
                Sponsor’s Fees, but not reimbursement payments for organizational and
                initial offering costs, shall be appropriately pro rated in the case
                of
                partial calendar months.

            

    

     

    
      	
              (f)  

            	
              This
                FuturesAccess Fund shall pay all expenses, including administrative
                and
                ongoing offering costs, as well as any extraordinary expenses, incurred
                in
                its operations (including the expenses of any services
                

            

    

     

    
      
        
        

      

      
        
          A-8

           

          
            
              The
                Merrill Lynch FuturesAccessSM
Funds

              General
                Form of Operating Agreement Dated as of April 1,
                2007

            

          

        

        
          

        

      

      
        
        

      

    

     

    
      	 	provided
              by the Sponsor, other than in its capacity as Sponsor, or its affiliates);
              provided, that this FuturesAccess Fund shall not pay any allocable
              Sponsor
              overhead.

      	 	 

      	
              (g)  

            	
              The
                Sponsor retains outside service providers to supply tax reporting,
                custody
                and accounting services to FuturesAccess.  This FuturesAccess
                Fund’s operating costs will include this FuturesAccess Fund’s allocable
                share of the fees and expenses of such service providers, as well
                as the
                fees and expenses of any Merrill Lynch entity which may provide such
                (or
                other) services in the future.

            

    

     

    
      	
              (h)  

            	
              The
                Capital Account of the Sponsor (if any) shall not be subject to Sponsor’s
                Fees.

            

    

     

    SECTION
      2.06.  ALLOCATION
      OF PROFITS AND LOSSES FOR FINANCIAL PURPOSES.  As of the end of each
      Accounting Period and before giving effect to any redemptions then being made,
      the Closing Capital Account of each Class shall be determined by adjusting
      the
      Opening Capital Account of each such Class as of the beginning of such
      Accounting Period in the following manner:

     

    
      	
              (a)  

            	
              Any
                increase or decrease in the Net Asset Value of this FuturesAccess
                Fund,
                after deduction of all Management and Performance Fees, transaction
                costs
                and operating expenses, but prior to accrual of the Sponsor’s Fees, during
                such Accounting Period shall be credited pro rata, without any
                order or priority, among:  (i) each Class of Units; and (ii) the
                Sponsor’s Capital Account, if any, based in each case on the aggregate
                Opening Capital Accounts attributable to each such Class of Units
                and the
                Sponsor’s Capital Account; provided that any amounts received by this
                FuturesAccess Fund from the Trading Advisor for payment to the Sponsor
                shall be allocated to the Capital Account of the
                Sponsor.  Extraordinary expenses shall be allocated as the
                Sponsor may determine.

            

    

     

    
      	
              (b)  

            	
              If
                the Closing Capital Account per Unit of any Class is reduced to zero,
                any
                further decrease in the Net Asset Value per Unit shall be allocated
                to the
                Sponsor’s Capital Account, if any.

            

    

     

    
      	
              (c)  

            	
              The
                Sponsor’s Fee shall be debited from each Class, in each case after the
                Section 2.06(a) and (b) allocations are
                made.

            

    

     

    
      	
              (d)  

            	
              The
                Net Assets of each Class shall be divided equally among all Units
                of such
                Class.

            

    

     

    SECTION
      2.07.  ALLOCATION
      OF PROFITS AND LOSSES FOR INCOME TAX PURPOSES.

     

    
      	
              (a)  

            	
              A
                Tax Account shall be established for each Unit of each
                Class.  The Tax Accounts of all outstanding Units shall
                initially be equal to each Unit’s net purchase price (i.e., the
                subscription price for such Unit reduced by any sales commissions)
                and
                shall subsequently be increased by such Unit’s share of the taxable and
                tax-exempt income of this FuturesAccess Fund and decreased by such
                Unit’s
                share of the items of loss or expense and nondeductible items of
                loss or
                expense of this FuturesAccess Fund, as well as by any
                distributions.

            

    

     

    
      	
              (b)  

            	
              For
                federal income tax purposes, items of ordinary income and loss, capital
                gain and capital loss shall, unless the Sponsor believes that doing
                so
                would not equitably reflect the economic experience of the Units,
                be
                allocated as of December 31 of each year among the Units, in the
                following
                order and priority:

            

    

     

    
      	
              (i)  

            	
              Items
                of ordinary income and deduction generated by this FuturesAccess
                Fund
                shall be allocated pro rata among the Units which were
                outstanding during the months in such year when such items of ordinary
                income and deductions accrued.

            

    

     

    
      	
              (ii)  

            	
              Gains
                will be allocated FIRST, to Investors who have redeemed Units during
                such
                year (including as of December 31), to the extent of the positive
                difference (if any) between the amounts received or receivable upon
                redemption and the respective Tax Account balances of the redeemed
                Units.  SECOND, gains will be allocated to Investors to the
                extent of the positive difference (if any) between the Capital Account
                balance and the Tax Account balance attributable to their remaining
                

            

    

     

    
      
        
        

      

      
        
          A-9

           

          
            
              The
                Merrill Lynch FuturesAccessSM
Funds

              General
                Form of Operating Agreement Dated as of April 1,
                2007

            

          

        

        
          

        

      

      
        
        

      

    

     

    
      	 	Units.  THIRD,
              gains will be allocated among all outstanding Units based on their
              respective Net Asset Values.

      	 	 

      	
              (iii)  

            	
              Losses
                shall be allocated FIRST, to Investors who have redeemed Units during
                such
                year (including as of December 31), to the extent of the negative
                difference (if any) between the amounts received or receivable upon
                redemption and the respective Tax Account balances of the redeemed
                Units.  SECOND, losses shall be allocated to Investors to the
                extent of the negative difference (if any) between the Capital Account
                balance and Tax Account balance attributable to their remaining
                Units.  THIRD,  losses shall be allocated among all
                outstanding Units based on their respective Net Asset
                Values.

            

    

     

    
      	
              (iv)  

            	
              In
                the case of each of the FIRST and SECOND allocation levels set forth
                in
                Sections 2.07(b)(ii) and (iii), if there is insufficient gain or
                loss to
                make the complete allocation required at such level, such allocation
                will
                be made pro rata among all Units which are subject to an
                allocation at such level in accordance with the respective amounts
                which
                would have been allocated had a complete allocation been
                possible.

            

    

     

    
      	
              (v)  

            	
              Management,
                Performance and Sponsor’s Fees, as well as the operating expenses (in each
                case as adjusted to reflect the non-deductibility of all or a portion
                of
                such Sponsor’s Fees and operating expenses) and extraordinary expenses,
                shall be allocated, for tax purposes, to the Tax Accounts of the
                Units
                based on the amount of the foregoing actually debited from the Units’
                respective Capital Accounts.

            

    

     

    
      	
              (vi)  

            	
              Items
                of ordinary income and/or gain attributable to amounts received by
                this
                FuturesAccess Fund from the Trading Advisor for payment to the Sponsor
                shall be specially allocated to the
                Sponsor.

            

    

     

    
      	
              (c)  

            	
              The
                character of items of income, gain, loss or deduction (ordinary,
                short-term and long-term) and of the items required to be separately
                stated by Section 702(a) of the Code shall be allocated to the Investors
                pursuant to this Section 2.07 so as equitably to reflect, without
                discrimination or preference among Investors, the amounts credited
                or
                debited to the Units’ respective Capital Accounts pursuant to Section
                2.06.  Furthermore, to the extent that the FuturesAccess Fund
                has a net long-term capital gain or loss that may be subject to more
                than
                one maximum federal income tax rate, allocations of such gain or
                loss
                shall be made pro rata from among the amounts subject to each maximum
                tax
                rate.

            

    

     

    
      	
              (d)  

            	
              In
                the case of Units which are transferred during a fiscal year, the
                tax
                allocations shall be made to such Units as provided above.  The
                Tax Items so allocated will then be divided among the transferor(s)
                and
                the transferee(s) based on the number of months during such year
                that each
                held such Units, or in such other manner as the Sponsor may deem
                equitable.

            

    

     

    
      	
              (e)  

            	
              Having
                in mind the principles of the allocations set forth above in this
                Section
                2.07 (to which all Investors consent by becoming Investors), the
                Sponsor
                may nevertheless make such allocations of items of ordinary income
                and
                gain, ordinary deduction and loss and any items required to be separately
                stated by Section 702(a) of the Code, as the Sponsor may deem fair
                and
                equitable — even if not consistent with the foregoing allocations — in
                order to cause the Tax Items allocated to the Investors, respectively,
                better to take into account (as determined by the Sponsor) the Units’
                respective Opening Capital Accounts and distributive shares of net
                profit
                and net loss, any entry of new Investors, any redemptions, any differences
                between income for tax purposes and for Net Asset Value purposes,
                the
                differences between the Classes of Units and any other special
                circumstances which may arise; provided, however, that no such allocation
                by the Sponsor shall discriminate unfairly against any Investor;
                and
                provided further, that the Sponsor shall be under no obligation whatsoever
                to deviate from the allocations set forth
                above.

            

    

     

    
      	
              (f)  

            	
              This
                FuturesAccess Fund may, to the extent practicable, allocate Tax Items
                on a
                gross rather than a net basis.

            

    

     

    
      
        
        

      

      
        
          A-10

           

          
            
              The
                Merrill Lynch FuturesAccessSM
Funds

              General
                Form of Operating Agreement Dated as of April 1,
                2007

            

          

        

        
          

        

      

      
        
        

      

    

     

    
      	
              (g)  

            	
              Allocations
                pursuant to this Section 2.07 are solely for purposes of federal,
                state
                and local taxes and shall not affect, or in any way be taken into
                account
                in computing, any Units’ Capital Account or share of net profits, net
                losses, other items or
                distributions.

            

    

     

    
      	
              (h)  

            	
              The
                tax allocations set forth in this Section 2.07 are intended to allocate
                items of this FuturesAccess Fund’s income, gains, losses and deductions
                (ordinary, short-term and long-term) in accordance with Sections
                704(b)
                and 704(c) of the Code, and the regulations thereunder, including,
                without
                limitation, the requirements set forth therein regarding a “qualified
                income offset.”

            

    

     

    
      	
              (i)  

            	
              The
                Sponsor may make such modifications to this Agreement as the Sponsor
                believes may be required to comply with Section 704(c) of the Code
                and the
                regulations thereunder.

            

    

     

    
      	
              (j)  

            	
              In
                the event that the Sponsor determines to issue a new Class of Units,
                the
                foregoing tax allocations shall be adjusted so as equitably to allocate
                tax items between or among the different
                Classes.

            

    

     

    SECTION
      2.08.  CHARGEBACKS
      TO CURRENT OR FORMER INVESTORS.  Each Investor, by subscribing for
      Units, agrees to repay, despite the fact that such Investor no longer remains
      an
      Investor, to this FuturesAccess Fund any amount (including interest at the
      rate
      set by the Sponsor in good faith from the date of any payment of redemption
      or
      distribution proceeds to such Investor by this FuturesAccess Fund) which the
      Sponsor may reasonably determine to be due to this FuturesAccess Fund from
      such
      Investor as a result, for example, of any claims arising (prior or subsequent
      to
      such Investor’s withdrawal from this FuturesAccess Fund) relating to events or
      circumstances (whether known or unknown at the time of such Investor’s
      withdrawal) in existence while such Investor was an Investor or, subject to
      the
      following paragraph, in the event that the Net Asset Value per Unit (of any
      Class) at which such Investor was permitted to redeem is later determined to
      have been overstated or otherwise miscalculated due to circumstances (whether
      known or unknown at the time of such Investor’s redemption) in existence as of
      the date of redemption.  In no event shall any provision of this
      Section 2.08 require an Investor to repay to this FuturesAccess Fund any amounts
      in excess of the redemption proceeds received by such Investor from, or the
      amounts distributed to such Investor by, this FuturesAccess Fund, plus interest
      thereon as provided above.

     

    In
      the
      event that the Sponsor determines that an amount paid by this FuturesAccess
      Fund
      to a withdrawn or continuing Investor was less or more than the amount which
      such Investor was, in fact, entitled to receive, the Sponsor shall not (unless
      the Sponsor otherwise determines) attempt to make appropriate adjusting payments
      to, or formally request appropriate adjusting payments from, such withdrawn
      Investor or make retroactive adjustments to such continuing Investor’s Units in
      order to reflect such discrepancy, but rather shall reflect such adjustments
      in
      the Accounting Period in which they become known.

     

    SECTION
      2.09.  PROCESSING
      OF SUBSCRIPTIONS.

     

    
      	
              (a)  

            	
              The
                Sponsor may admit new Investors to this FuturesAccess Fund at such
                times
                and upon such notice (if any) as the Sponsor may
                determine.  Investors’ Merrill Lynch Accounts will be debited on
                or about the issuance date of such Units, and the amount so debited,
                less
                any applicable sales commission, will be invested directly in the
                FuturesAccess Fund.  No interest will be payable in respect of
                any such subscriptions.

            

    

     

    
      	
              (b)  

            	
              Pursuant
                to Securities and Exchange Commission Rule 15c2-4, all subscriptions
                while
                held in escrow during the initial offering period pending release
                to this
                FuturesAccess Fund shall be held by a bank independent of the Sponsor,
                its
                affiliates, and their respective officers, employees, representatives
                and
                agents (each, a “Sponsor Party” and, collectively, the “Sponsor
                Parties”).

            

    

     

    SECTION
      2.10.  VALUATION
      OF ASSETS.  For all purposes of this Agreement, including, without
      limitation, the determination of the Net Asset Value per Unit of each Class,
      the
      assets of this FuturesAccess Fund shall be valued according to the following
      principles:

     

    
      
        
        

      

      
        
          A-11

           

          
            
              The
                Merrill Lynch FuturesAccessSM
Funds

              General
                Form of Operating Agreement Dated as of April 1,
                2007

            

          

        

        
          

        

      

      
        
        

      

    

     

    
      	
              (a)  

            	
              Net
                Assets of this FuturesAccess Fund are its assets less its liabilities
                determined in accordance with generally accepted accounting principles
                and
                as described below.  Accrued Performance Fees (as described in
                the Confidential Program Disclosure Document) shall reduce Net Asset
                Value, even though such Performance Fees may never, in fact, be
                paid.

            

    

     

    
      	
              (b)  

            	
              For
                the avoidance of doubt, the Sponsor shall, in general, apply the
                following
                principles in valuing this FuturesAccess Fund’s
                assets:

            

    

     

    
      	
              (i)  

            	
              commodity
                interests and currency interests which are traded on a United States
                exchange shall be valued at their settlement on the date as of which
                the
                values are being determined;

            

    

     

    
      	
              (ii)  

            	
              commodity
                interests and currency interests not traded on a United States exchange
                shall be valued based upon policies established by the Sponsor, generally
                based on prices as reported by any reliable source selected by the
                Sponsor, consistently applied for each variety of
                interest;

            

    

     

    
      	
              (iii)  

            	
              swap
                agreements shall be valued in the good faith discretion of the Sponsor
                based on quotations received from dealers deemed appropriate by the
                Sponsor;

            

    

     

    
      	
              (iv)  

            	
              bank
                and other interest-bearing accounts, Treasury bills and other short-term,
                interest-bearing instruments shall be valued at cost plus accrued
                interest;

            

    

     

    
      	
              (v)  

            	
              securities
                which are traded on a national securities exchange shall be valued
                at
                their closing price on the date as of which their value is being
                determined on the national securities exchange on which such securities
                are principally traded or on a consolidated tape which includes such
                exchange, whichever shall be selected by the Sponsor, or, if there
                is no
                closing price on such date on such exchange or consolidated tape,
                at the
                prior day’s closing price;

            

    

     

    
      	
              (vi)  

            	
              securities
                not traded on a national securities exchange but traded over-the-counter
                shall be valued based on prices as reported by any reliable source
                selected by the Sponsor;

            

    

     

    
      	
              (vii)  

            	
              money-market
                funds shall be valued at their net asset value on the date as of
                which
                their value is being determined;

            

    

     

    
      	
              (viii)  

            	
              if
                on the date as of which any valuation is being made, the exchange
                or
                market herein designated for the valuation of any given assets is
                not open
                for business, the basis for valuing such assets shall be such value
                as the
                Sponsor may deem fair and
                reasonable;

            

    

     

    
      	
              (ix)  

            	
              all
                other assets, including securities traded on foreign exchanges, and
                liabilities shall be valued in good faith by the Sponsor, including
                assets
                and liabilities for which there is no readily identifiable market
                value;

            

    

     

    
      	
              (x)  

            	
              the
                foregoing valuations may be modified by the Sponsor if and to the
                extent
                that it shall determine that modifications are advisable in order
                better
                to reflect the true value of any asset;
                and

            

    

     

    
      	
              (xi)  

            	
              the
                Sponsor may reduce the valuation of any asset (or of the FuturesAccess
                Fund) by reserves established, as contemplated by Section 2.04(g),
                to
                reflect losses, contingencies, liabilities, uncertain valuations
                or other
                factors, which the Sponsor determines reduce, or might reduce, the
                value
                of such asset (or of this FuturesAccess Fund as a whole in the case
                of
                reserves not specifically attributable to any particular
                asset).

            

    

     

    All
      determinations of value by the Sponsor shall be final and conclusive as to
      all
      Investors, in the absence of manifest error, and the Sponsor shall be absolutely
      protected in relying upon valuations furnished to the Sponsor by third parties,
      provided that such reliance is in good faith.

     

    
      
        
        

      

      
        
          A-12

           

          
            
              The
                Merrill Lynch FuturesAccessSM
Funds

              General
                Form of Operating Agreement Dated as of April 1,
                2007

            

          

        

        
          

        

      

      
        
        

      

    

     

    The
      Sponsor may suspend the calculation of Net Asset Value during any period in
      which the Sponsor believes that it is reasonably impracticable to value a
      material portion of this FuturesAccess Fund’s assets.

     

    SECTION
      2.11.  USE
      OF
      ESTIMATES.  The Sponsor is authorized to make all Net Asset Value
      determinations (including, without limitation, for purposes of determining
      redemption payments and calculating Sponsor’s Fees) on the basis of estimated
      numbers.  The Sponsor shall not (unless the Sponsor otherwise
      determines) attempt to make any retroactive adjustments in order to reflect
      the
      differences between such estimated and the final numbers, but rather shall
      reflect such differences in the Accounting Period in which final numbers become
      available.  The Sponsor also shall not (unless the Sponsor otherwise
      determines) revise Sponsor’s Fee calculations to reflect differences between
      estimated and final numbers (including differences which have resulted in
      economic benefit to a Sponsor Party).

     

    If,
      after
      payment of redemption proceeds, the Sponsor determines that adjustment to the
      Net Asset Value of the redeemed Units is necessary, the redeeming Investor
      (if
      the Net Asset Value is adjusted upwards) or the remaining Investors (if the
      Net
      Asset Value is adjusted downwards) will bear the risk of such
      adjustment.  The redeeming Investor will neither receive further
      distributions from, nor will it be required to reimburse, this FuturesAccess
      Fund in such circumstances.

     

    SECTION
      2.12.  ACCOUNTING
      PRACTICES.  All matters concerning FuturesAccess Fund accounting
      practices shall be determined by the Sponsor on a fair and equitable basis,
      and
      all such determinations shall be final and conclusive as to all
      Investors.  However, the Sponsor shall be under no obligation
      whatsoever to make any deviations from the allocations set forth in this Article
      II.

     

    In
      reporting Net Asset Values to Investors and third parties on an interim basis,
      the Sponsor shall be entitled to accrue fees and payments due at the end of
      a
      period as if such fees or payments were due (on a pro rata basis, if
      appropriate) as of the end of an interim period within such period.

     

    ARTICLE
      III

    PARTICIPATION
      IN FUTURESACCESS FUND PROPERTY; REDEMPTIONS AND
      DISTRIBUTIONS

     

    SECTION
      3.01.  NO
      UNDIVIDED INTERESTS IN FUTURESACCESS FUND PROPERTY.  Each Unit shall
      represent an interest in this FuturesAccess Fund, not an undivided interest
      in
      any property of this FuturesAccess Fund.  The Units shall constitute
      personal property for all purposes.

     

    SECTION
      3.02.  REDEMPTIONS
      OF UNITS; EXCHANGES.

     

    
      	
              (a)  

            	
              Timing
                and Amount of Redemptions.  Subject to this Section 3.02,
                an Investor shall be entitled to redeem as of the end of any calendar
                month all or part of such Investor’s Units, upon giving at least 10 days’
                written or oral notice.  Investors who have Merrill Lynch
                customer securities accounts may give such notice by contacting their
                Merrill Lynch Financial Advisor, orally or in writing; Investors
                who no
                longer have a Merrill Lynch customer securities account must submit
                written notice of redemption, with the signature guaranteed by a
                United
                States bank or broker-dealer, to the
                Sponsor.

            

    

     

    
      	
              (b)  

            	
              No
                Redemption Fees.  This FuturesAccess Fund shall not charge
                a redemption fee.

            

    

     

    
      	
              (c)  

            	
              Payment
                of Redemptions.  The Sponsor shall cause this FuturesAccess
                Fund to distribute to redeeming Investors the estimated Net Asset
                Value of
                the Units redeemed by them, generally approximately 10 business days
                after
                the effective date of redemption, although there can be no assurance
                of
                the timing of such payment.

            

    

     

    Units
      which have been redeemed, but the proceeds of which have not yet been paid,
      shall nevertheless be deemed to have ceased to be outstanding from the effective
      date of redemption for all other purposes hereunder.

     

    No
      interest shall be paid to Investors on redemption proceeds held pending
      distribution.  This FuturesAccess Fund shall retain any such
      interest.

     

    
      
        
        

      

      
        
          A-13

           

          
            
              The
                Merrill Lynch FuturesAccessSM
Funds

              General
                Form of Operating Agreement Dated as of April 1,
                2007

            

          

        

        
          

        

      

      
        
        

      

    

     

    
      	
              (d)  

            	
              Suspension
                of Redemptions.  In the event that this FuturesAccess Fund
                suspends the calculation of Net Asset Value, the Sponsor shall, upon
                written notice to all affected Investors, suspend any or all redemption
                requests (as well as any request to exchange Units for units of other
                funds included in FuturesAccess).  Any unsatisfied redemption
                requests shall be suspended until such time as this FuturesAccess
                Fund is
                able to determine Net Asset Value.  All Units subject to
                suspended redemption requests shall continue to be treated as outstanding
                for all purposes hereunder, as if no redemption requests relating
                thereto
                had been submitted, until the effective date of their suspended
                redemption.  During any period in which this FuturesAccess Fund
                is suspending redemptions, Investors will not be able to exchange
                Units
                for units of other FuturesAccess Funds.  The Sponsor shall
                suspend redemptions during any period when the calculation of Net
                Asset
                Value has been suspended.

            

    

     

    If
      the
      Sponsor determines that a portion, but not all, of pending redemption requests
      can be processed in due course, the requests of all Investors submitting timely
      redemption requests with respect to any given redemption date shall be satisfied
      pro rata (based on the aggregate Net Asset Value of the Units requested
      to be redeemed by all Investors) from such funds as the Sponsor determines
      are
      available for distribution.

     

    In
      addition to the foregoing provisions of this Section 3.02(d), the Sponsor may
      delay or suspend both the payment of redemption proceeds and the effective
      date
      of redemptions if the Sponsor determines that not doing so would have adverse
      consequences for the non-redeeming Investors.

     

    
      	
              (e)  

            	
              Exchanges.  Investors
                may generally exchange Units for Units in other FuturesAccess Funds
                as
                described in the FuturesAccess Program Subscription and Exchange
                Agreement
                and Signature Pages thereto, as supplemented and amended from time
                to
                time.  Any circumstance leading to a delay or suspension of
                either redemption dates or the receipt of the proceeds of redemptions
                from
                this FuturesAccess Fund shall have a corresponding effect on Investors’
                exercise of their Exchange Privileges relating to this FuturesAccess
                Fund.

            

    

     

    SECTION
      3.03.  WITHDRAWALS
      OF CAPITAL BY THE SPONSOR.

     

    
      	
              (a)  

            	
              The
                Sponsor may withdraw capital from its Capital Account(s), if any,
                without
                notice to the Investors.

            

    

     

    
      	
              (b)  

            	
              To
                the extent Merrill Lynch has provided any “seed” capital to the Fund,
                Merrill Lynch will redeem $50,000 of its Units (by aggregate Net
                Asset
                Value) for each $50,000 in net client investments (i.e.,
                subscriptions minus client redemptions and exchanges) received by
                the Fund
                after it begins operation.  Notwithstanding the foregoing,
                Merrill Lynch may vary the foregoing redemption schedule upon advance
                agreement with the Trading Advisor (e.g., Merrill Lynch may agree
                not to begin withdrawing all or a portion of its initial seed capital
                for
                a specified period of time) and may withdraw seed capital at different
                times and on different terms than are available to
                Investors.

            

    

     

    SECTION
      3.04.  MANDATORY
      REDEMPTIONS.

     

    
      	
              (a)  

            	
              The
                Sponsor may mandatorily redeem part or all of the Units held by a
                particular Investor if the Sponsor determines that (i) such Investor’s
                continued holding of Units could result in adverse consequences to
                this
                FuturesAccess Fund, (ii) such Investor has a history of excessive
                exchanges between different FuturesAccess Funds and/or HedgeAccess
                Funds
                that is contrary to the purpose and/or efficient management of the
                Programs, (iii) such Investor’s investment in the Units, or aggregate
                investment in FuturesAccess, is below the minimum level established
                by the
                Sponsor (including any increase in such minimum level that the Sponsor
                may
                implement in the future), or (iv) for any other
                reason.

            

    

     

    
      	
              (b)  

            	
              The
                Sponsor will mandatorily redeem all of a FuturesAccess Fund’s outstanding
                Units in the event that the Sponsor concludes that it is no longer
                advisable to place client capital with the Trading Advisor or if
                the
                amount of assets invested in this FuturesAccess Fund declines to
                a level
                that the Sponsor believes makes the continued operation of such
                FuturesAccess Fund impracticable or
                uneconomical.

            

    

    
       

      
        	
                (c)  

              	
                Units
                  mandatorily redeemed shall be redeemed as of the specified month-end
                  without any further action 

              

      

       

    

    
      
        
        

      

      
        
          A-14

           

          
            
              The
                Merrill Lynch FuturesAccessSM
Funds

              General
                Form of Operating Agreement Dated as of April 1,
                2007

            

          

        

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              on
                the part of the affected Investor, and the provisions of Sections
                3.02 and
                3.07 shall apply.  In the event that the Sponsor mandatorily
                redeems any of an Investor’s Units, such Investor shall have the option to
                redeem all of such Investor’s Units as of the date fixed for
                redemption.

            

    

     

    SECTION
      3.05.  MANDATORY
      REDEMPTIONS TO PAY TAXES.  In the event that this FuturesAccess Fund
      is required to pay or withhold state, local or other taxes with respect to
      a
      particular Investor or Investors, this FuturesAccess Fund may redeem an
      appropriate number of such Investor’s or Investors’ Units as of the end of the
      Accounting Period immediately following such payment in order to reimburse
      this
      FuturesAccess Fund for the amount of such payment, together with interest on
      the
      amounts so paid at the 91-day Treasury bill rate as in effect as of the
      beginning of each calendar month, starting with the calendar month in which
      such
      payment is made, through the end of such Accounting Period.

     

    SECTION
      3.06.  DISTRIBUTIONS.  FuturesAccess
      Fund distributions shall be made in the sole discretion of the
      Sponsor.  No distributions are required.

     

    SECTION
      3.07.  FORM
      OF
      DISTRIBUTION AND REDEMPTION PAYMENTS.  No Investor shall have the
      right to demand or receive any property other than cash upon
      redemption.  Distributions or payouts made to Investors shall be made
      in cash.

     

    SECTION
      3.08.  REMOVAL
      OF THE SPONSOR.  Upon at least 60 days written notice to the Sponsor
      and all Investors in this FuturesAccess Fund, the Sponsor may be required to
      withdraw as manager of this FuturesAccess Fund by a vote of Investors owning
      not
      less than 50% of the Units of this FuturesAccess Fund.  Any such
      removal shall be effective as of the end of the calendar quarter in which such
      vote occurs.

     

    ARTICLE
      IV

    WITHDRAWAL
      OF THE SPONSOR AND INVESTORS

     

    SECTION
      4.01.  WITHDRAWAL
      OF THE SPONSOR.

     

    
      	
              (a)  

            	
              The
                Sponsor may withdraw from this FuturesAccess Fund at any time, without
                any
                breach of this Agreement, upon 90 calendar days’ written notice to the
                Investors.  Withdrawal of the Sponsor shall not dissolve this
                FuturesAccess Fund if at the time there is at least one other manager
                remaining; however, all Investors shall be entitled to redeem their
                Units,
                in total and not in part, as of the effective date of any such withdrawal
                by the Sponsor, unless an entity affiliated with the Sponsor remains
                as a
                manager of this FuturesAccess Fund.  Nothing in this Section
                4.01(a) shall, however, restrict the Sponsor from assigning and delegating
                its rights and obligations under this Agreement to an affiliate of
                the
                Sponsor upon notice (which need not be prior notice) to the Investors
                or
                in connection with the sale of all or a material portion of the Sponsor’s
                equity or assets.

            

    

     

    
      	
              (b)  

            	
              Withdrawal
                of the last remaining manager shall dissolve this FuturesAccess
                Fund.

            

    

     

    SECTION
      4.02.  WITHDRAWAL
      OF AN INVESTOR.  An Investor shall withdraw from this FuturesAccess
      Fund upon redemption of all of such Investor’s outstanding
      Units.  Withdrawal of an Investor shall not be a cause for dissolution
      of this FuturesAccess Fund.

     

    SECTION
      4.03.  STATUS
      AFTER WITHDRAWAL.  Except to the extent provided in Section 2.08 or
      Section 7.02, each Investor upon redemption of the last of such Investor’s Units
      shall cease to have any rights under this Agreement.

     

    ARTICLE
      V

    MANAGEMENT

     

    SECTION
      5.01.  AUTHORITY
      OF THE SPONSOR.

     

    
      	
              (a)  

            	
              The
                management and operation of this FuturesAccess Fund and the determination
                of its policies shall be vested exclusively in the Sponsor.  The
                Sponsor shall have the authority and power on behalf and in
                the

            

    

     

    
      
        
        

      

      
        
          A-15

           

          
            
              The
                Merrill Lynch FuturesAccessSM
Funds

              General
                Form of Operating Agreement Dated as of April 1,
                2007

            

          

        

        
          

        

      

      
        
        

      

    

     

    
      	 	name
              of this FuturesAccess Fund to carry out any and all of the objectives
              and
              purposes of this FuturesAccess Fund set forth in Section 1.01, and
              to
              perform all acts and enter into and perform all contracts and other
              undertakings which the Sponsor may deem necessary or advisable in
              connection with such objectives and purposes or incidental thereto;
              provided, that the Trading Advisor shall at all times have discretionary
              authority over the trading and investing of this FuturesAccess
              Fund.  All actions and determinations to be made by the Sponsor
              hereunder shall, unless otherwise expressly provided, be made in the
              Sponsor’s sole and absolute discretion.

      	 	 

      	
              (b)  

            	
              The
                Sponsor is specifically authorized to manage this FuturesAccess Fund’s
                cash flow, pay costs by bank or other
                borrowings.

            

    

     

    SECTION
      5.02.  SERVICE
      PROVIDERS; INVESTMENTS; ACCOUNTS.  The Sponsor is hereby authorized
      and empowered to carry out and implement any and all of the objectives and
      purposes of this FuturesAccess Fund, including and without limiting the
      generality of the foregoing:

     

    
      	
              (a)  

            	
              to
                place capital under the management of, and withdraw capital from,
                the
                discretionary control of the Trading Advisor; provided, that this
                FuturesAccess Fund shall not retain any other Trading Advisor (although
                the Sponsor may dissolve this FuturesAccess Fund at any
                time).

            

    

     

    
      	
              (b)  

            	
              to
                engage attorneys, accountants, agents and other persons as the Sponsor
                may
                deem necessary or advisable;

            

    

     

    
      	
              (c)  

            	
              to
                open, maintain and close accounts, including margin, discretionary
                and
                cash management accounts, with brokers, dealers, counterparties or
                other
                persons (in each case, including affiliates of the Sponsor) and to
                pay the
                customary fees and charges applicable to transactions in, or the
                maintenance of, all such accounts;

            

    

     

    
      	
              (d)  

            	
              to
                invest in money-market funds (including funds sponsored by affiliates
                of
                the Sponsor), Treasury bills or other short-term, interest-bearing
                instruments;

            

    

     

    
      	
              (e)  

            	
              to
                open, maintain and close bank and other interest-bearing and
                non-interest-bearing accounts; and

            

    

     

    
      	
              (f)  

            	
              to
                enter into, make and perform such contracts, agreements and other
                undertakings as the Sponsor may deem necessary, advisable or incidental
                to
                the conduct of the business of this FuturesAccess
                Fund.

            

    

     

    SECTION
      5.03.  ACTIVITIES
      OF THE SPONSOR PARTIES.

     

    
      	
              (a)  

            	
              The
                respective Sponsor Parties will not devote their full business time,
                or
                any material portion of their business time, to this FuturesAccess
                Fund,
                as each is involved in the management of numerous other client and
                proprietary accounts.  However, the Sponsor hereby agrees to
                devote to the objectives and purposes of this FuturesAccess Fund
                such
                amount of the business time of its officers and employees as the
                Sponsor
                shall deem necessary for the management of the affairs of this
                FuturesAccess Fund; provided, however, that nothing contained in
                this
                Section 5.03(a) shall preclude any Sponsor Party from acting as a
                director, stockholder, officer or employee of any corporation, a
                trustee
                of any trust, a partner of any partnership, a manager or member of
                any
                other limited liability company or an administrative official of
                any other
                business or governmental entity, or from receiving compensation for
                services rendered thereto, from participating in profits derived
                from
                investments in any such entity or from investing in any securities
                or
                other property for such person’s own
                account.

            

    

     

    
      	
              (b)  

            	
              As
                contemplated by Section 2.05(g), the Sponsor retains outside service
                providers to supply certain services to FuturesAccess, including,
                but not
                limited to: tax reporting, custody, accounting and escrow services
                to
                FuturesAccess.  Operating costs include this FuturesAccess
                Fund’s allocable share of the fees and expenses of such (or other) service
                providers, as well as the fees and expenses of any Sponsor Party
                which may
                provide such (or other) services in the
                futures.

            

    

     

    
      
        
        

      

      
        
          A-16

           

          
            
              The
                Merrill Lynch FuturesAccessSM
Funds

              General
                Form of Operating Agreement Dated as of April 1,
                2007

            

          

        

        
          

        

      

      
        
        

      

    

     

    SECTION
      5.04.  SERVICES
      TO THIS FUTURESACCESS FUND.  Any Sponsor Party may perform
      administrative services for this FuturesAccess Fund, without such Sponsor Party
      waiving its fees for such services.

     

    SECTION
      5.05.  INTERESTED
      PARTIES.  The fact that a Sponsor Party or an Investor is directly or
      indirectly interested in or connected with this FuturesAccess Fund or a related
      party with which or with whom this FuturesAccess Fund has dealings, including
      but not limited to the Sponsor’s sharing in the Management Fees paid and
      Performance Fee paid by this FuturesAccess Fund to the Trading Advisor (such
      sharing to be effected either by the Trading Advisor making a direct payment
      to
      the Sponsor or by the Trading Advisor making payments to this FuturesAccess
      Fund
      which are specially allocated solely to the Sponsor), the receipt or rebate
      of
      other advisory and/or management fees, brokerage commissions, “bid-ask” spreads,
      mark-ups or other expenses, shall not preclude such dealings or make them void
      or voidable; and neither this FuturesAccess Fund nor any of the Investors shall
      have any rights in or to any such dealings or in or to any profits derived
      therefrom.

     

    SECTION
      5.06.  EXCULPATION.  The
      Sponsor Parties shall not be liable to this FuturesAccess Fund or any Investor
      for any claims, costs, expenses, damages or losses arising out of or in
      connection with this Agreement, the Sponsor acting as manager of this
      FuturesAccess Fund, this FuturesAccess Fund in general or the offering of the
      Units, for any conduct undertaken or omitted in good faith, and in the belief
      that such conduct or omission was in, or not opposed to, the best interests
      of
      this FuturesAccess Fund; provided, that such conduct or omission did not
      constitute gross negligence or intentional misconduct on the part of such
      Sponsor Party.

     

    No
      Sponsor Party shall be liable to the FuturesAccess Fund or any Investor for
      failure to obtain for the FuturesAccess Fund, or to require the FuturesAccess
      Fund to obtain, the lowest negotiated brokerage commission rates, or to combine
      or arrange trading orders so as to obtain the lowest brokerage commission rates
      with respect to any transaction on behalf of the FuturesAccess Fund, or for
      the
      failure to recapture, directly or indirectly, any brokerage commissions for
      the
      benefit of the FuturesAccess Fund.

     

    No
      Sponsor Party shall be liable to this FuturesAccess Fund or any Investor for
      claims, costs, expenses, damages or losses due to circumstances beyond any
      Sponsor Party’s control, or due to the negligence, dishonesty, bad faith or
      misfeasance of any third party chosen by a Sponsor Party in good
      faith.

     

    In
      no
      respect by way of limiting the foregoing exculpatory provisions but rather
      by
      way of greater certainty, no Sponsor Party shall be liable to this FuturesAccess
      Fund or any Investor for any actions or omissions of:  (i) the Trading
      Advisor; (ii) any broker, dealer or counterparty unaffiliated with Merrill
      Lynch
      chosen by a Sponsor Party in good faith; or (iii) any broker, dealer or
      counterparty chosen by the Trading Advisor.

     

    Affiliates
      of the Sponsor will provide this FuturesAccess Funds with futures brokerage,
      forward dealing and other counterparty and dealer services, and shall receive
      compensation in connection therewith.

     

    SECTION
      5.07.  INDEMNIFICATION.  This
      FuturesAccess Fund shall indemnify and hold harmless the Sponsor Parties from
      and against any claims, costs, expenses, damages or losses (including, without
      limitation, from and against any judgment, settlement, attorneys’ fees and other
      costs or expenses incurred in connection with the defense of any actual or
      threatened action or proceeding) suffered or sustained by any of them by reason
      of the fact that a Sponsor Party is or was connected in any respect with this
      FuturesAccess Fund; provided, that the conduct or omission which led to such
      claim, cost, expense, damage or loss met the standard of exculpation set forth
      in Section 5.06 above.

     

    This
      FuturesAccess Fund shall advance payments asserted by a Sponsor Party to be
      due
      under the preceding paragraph pending a final determination of whether such
      indemnification is, in fact, due; provided, that such Sponsor Party agrees
      in
      writing to return any amounts so advanced (without interest) in the event such
      indemnification is finally determined not to be due.

     

    Whether
      or not a Sponsor Party is entitled to indemnification hereunder shall be
      determined by the judgment of independent counsel as to whether such Sponsor
      Party has reasonable grounds for asserting that indemnification is so due,
      unless otherwise determined by a court, arbitral tribunal or administrative
      forum.

     

    
      
        
        

      

      
        
          A-17

           

          
            
              The
                Merrill Lynch FuturesAccessSM
Funds

              General
                Form of Operating Agreement Dated as of April 1,
                2007

            

          

        

        
          

        

      

      
        
        

      

    

     

    In
      the
      event this FuturesAccess Fund is made a party to any claim, dispute or
      litigation, or otherwise incurs any loss or expense, as a result of or in
      connection with any Investor’s activities, obligations or liabilities unrelated
      to this FuturesAccess Fund’s business, such Investor shall indemnify and
      reimburse this FuturesAccess Fund for all loss and expense incurred, including
      attorneys’ fees.

     

    SECTION
      5.08.  INVESTORS’
      TRANSACTIONS.  Nothing in this Agreement is intended to prohibit any
      Investor from buying, selling or otherwise transacting in securities, commodity
      interests, currency interests, swap agreements or other instruments for such
      Investor’s own account, including commodity interests, currency interests, swap
      agreements, securities or other instruments which are the same as those held
      by
      this FuturesAccess Fund.

     

    SECTION
      5.09.  RELIANCE
      BY THIRD PARTIES.  In dealing with the Sponsor acting on behalf of
      this FuturesAccess Fund, no person shall be required to inquire into the
      authority of the Sponsor to bind this FuturesAccess Fund.  Persons
      dealing with this FuturesAccess Fund shall also be entitled to rely on a
      certification by the Sponsor with regard to the authority of other persons
      to
      act on behalf of this FuturesAccess Fund in any matter.

     

    SECTION
      5.10.  REGISTRATION
      OF ASSETS.  Any assets owned by this FuturesAccess Fund may be
      registered in this FuturesAccess Fund’s name, in the name of a nominee or in
“street name.”

     

    SECTION
      5.11.  LIMITATION
      ON AUTHORITY OF THE SPONSOR.  The Sponsor shall not have the authority
      without the consent of Investors holding more than 50% of the outstanding Units
      (by Net Asset Value) then held by Investors to:

     

    
      	
              (a)  

            	
              do
                any act in contravention of this Agreement (other than pursuant to
                the
                Sponsor’s authority to unilaterally amend this Agreement, as provided in
                Section 10.03);

            

    

     

    
      	
              (b)  

            	
              confess
                a judgment against this FuturesAccess Fund;
                or

            

    

     

    
      	
              (c)  

            	
              possess
                FuturesAccess Fund property or assign rights to specific FuturesAccess
                Fund property for other than a FuturesAccess Fund
                purpose.

            

    

     

    ARTICLE
      VI

    ADMISSION
      OF INVESTORS

     

    SECTION
      6.01.  PROCEDURE
      AS TO NEW INVESTORS.  The Sponsor may, as of the beginning of any
      calendar month (or as of such other times as the Sponsor may deem appropriate),
      admit one or more new Investors by issuing to such Investor(s) Units of the
      appropriate Class.  Each new Investor to FuturesAccess shall execute
      and deliver an appropriate FuturesAccess Program Subscription and Exchange
      Agreement, and each additional Capital Contribution (whether a new subscription
      or an exchange) shall be accompanied by a new FuturesAccess Program Subscription
      and Exchange Agreement Signature Page.  This FuturesAccess Fund may
      charge an Investor such amount as may be deemed appropriate by the Sponsor
      to
      compensate this FuturesAccess Fund in the case of any Capital Contribution
      received by this FuturesAccess Fund after the day as of which the new Investor
      making such Capital Contribution is admitted to this FuturesAccess Fund and
      such
      Investor’s Units are deemed to have been issued.

     

    Admission
      of a new Investor shall not result in a dissolution of this FuturesAccess
      Fund.

     

    SECTION
      6.02.  PROCEDURE
      AS TO NEW MANAGERS.  One or more additional managers may be admitted
      to this FuturesAccess Fund by the Sponsor, without the consent of any Investor,
      if, but only if, the additional manager or managers are affiliates of the
      Sponsor or successors to all or a material portion of the Sponsor’s equity or
      assets.  The Sponsor shall promptly notify the Investors of the
      admission of any such affiliated manager or managers (such notice need not,
      however, be prior notice).  No manager or managers which is not or are
      not affiliated with the Sponsor may be admitted to this FuturesAccess Fund
      without the consent of Investors holding more than 50% of the outstanding Units
      (by Net Asset Value) then held by Investors; provided, that the foregoing
      restriction shall not apply in the case of a sale of all or a material portion
      of the Sponsor’s equity or assets.

     

    
      
        
        

      

      
        
          A-18

           

          
            
              The
                Merrill Lynch FuturesAccessSM
Funds

              General
                Form of Operating Agreement Dated as of April 1,
                2007

            

          

        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      VII

    BOOKS
      OF ACCOUNT; AUDITS; REPORTS TO INVESTORS

     

    SECTION
      7.01.  BOOKS
      OF
      ACCOUNT.  The books of account of this FuturesAccess Fund shall be
      maintained in accordance with generally accepted accounting principles under
      the
      accrual basis of accounting by or under the supervision of the Sponsor and
      shall
      be open to inspection by any Investor or such Investor’s representative during
      regular business hours; provided, however, that such books and records shall
      only be available for inspection pursuant to a valid, non-commercial purpose
      related to an Investor’s status as an Investor.  This FuturesAccess
      Fund’s books of account shall not, however, for such purpose include any record
      of the particular transactions entered into by this FuturesAccess
      Fund.

     

    SECTION
      7.02.  ANNUAL
      AUDIT.  The accounts of this FuturesAccess Fund shall be audited as of
      the close of each fiscal year by an independent public accounting firm (the
      “Accountant”) selected by the Sponsor and in accordance with the applicable
      Commodity Futures Trading Commission regulations.

     

    The
      Sponsor or its agents shall cause to be prepared and mailed to each Investor,
      including Investors who have redeemed all of their Units and withdrawn but
      who
      were Investors at any time during a fiscal year, audited financial statements
      and a report prepared by the Accountant, setting forth as of the end of such
      fiscal year:

     

    
      	
              (a)  

            	
              the
                assets and liabilities of this FuturesAccess
                Fund;

            

    

     

    
      	
              (b)  

            	
              the
                net capital appreciation or depreciation of this FuturesAccess Fund
                for
                such fiscal year;

            

    

     

    
      	
              (c)  

            	
              the
                Net Asset Value of this FuturesAccess Fund as of the end of such
                fiscal
                year; and

            

    

     

    
      	
              (d)  

            	
              the
                Net Asset Value per Unit of each Class as of the end of such fiscal
                year.

            

    

     

    The
      Sponsor shall not be required to provide Investors with an annual audit in
      respect of any given year by any particular date in the following year, nor
      shall the Net Asset Value of the Units be audited as of any date other than
      the
      end of a fiscal year.

     

    The
      Sponsor or its agents shall cause each Investor, including former Investors
      who
      were Investors at any time during such fiscal year, to be furnished with all
      information relating to this FuturesAccess Fund necessary to enable such
      Investor to prepare such Investor’s federal income tax return; provided, that
      all Investors acknowledge and agree that such information may initially be
      provided in the form of estimates pending completion of this FuturesAccess
      Fund’s audit for such fiscal year, and that Investors may be required to obtain
      extensions of the date by which their federal and state income tax returns
      must
      be filed.  The Sponsor will have no liability to any Investor as a
      result of such Investor being required to obtain any such
      extensions.

     

    SECTION
      7.03.  INTERIM
      REPORTS.  From time to time, but no less frequently than monthly, the
      Sponsor shall cause to be prepared and delivered (at the expense of this
      FuturesAccess Fund), to each Investor interim reports indicating this
      FuturesAccess Fund’s estimated results of operations and presenting such other
      matters concerning this FuturesAccess Fund’s operations as the Sponsor may deem
      appropriate as well as those required by the applicable Commodity Futures
      Trading Commission regulations.  The estimated performance of this
      FuturesAccess Fund will be available upon request to the Sponsor by any
      Investor.

     

    ARTICLE
      VIII

    CONFLICTS
      OF INTEREST

     

    SECTION
      8.01.  INVESTORS’
      CONSENT.  Each Investor, by subscribing for Units, gives full and
      informed consent to the conflicts of interest to which the Sponsor Parties
      are
      subject in their operation of this FuturesAccess Fund, as disclosed in the
      Confidential Program Disclosure Document and as contemplated herein (including
      without limitation Merrill Lynch acting as exclusive clearing broker and
      principal forward contract and swap dealer at rates and dealer spreads
      which

     

    
      
        
        

      

      
        
          A-19

           

          
            
              The
                Merrill Lynch FuturesAccessSM
Funds

              General
                Form of Operating Agreement Dated as of April 1,
                2007

            

          

        

        
          

        

      

      
        
        

      

    

     

    have
      not
      been negotiated at arm’s-length as well as the Sponsor sharing in the Management
      and Performance Fees paid to the Trading Advisor by this FuturesAccess Fund)
      and
      covenants not to object to or bring any proceedings against any Sponsor Party
      relating to any such conflict of interest; provided, that such Sponsor Party
      complies with the standard of exculpation set forth in Section
      5.06.

     

    The
      Sponsor is hereby specifically authorized by all Investors to cause this
      FuturesAccess Fund to use Merrill Lynch as this FuturesAccess Fund’s exclusive
      clearing broker and primary forward contract and swap counterparty, and all
      Investors acknowledge and agree that the brokerage rates and dealer spreads
      charged by Merrill Lynch to this FuturesAccess Fund are higher than those
      charged to other Merrill Lynch clients; in addition, Merrill Lynch will retain
      significant additional economic benefit from possession of this FuturesAccess
      Fund’s assets.

     

    ARTICLE
      IX

    DISSOLUTION
      AND WINDING UP OF THIS FUTURESACCESS FUND

     

    SECTION
      9.01.  EVENTS
      OF
      DISSOLUTION.  This FuturesAccess Fund will be dissolved, the affairs
      of this FuturesAccess Fund will be wound up and this FuturesAccess Fund will
      be
      liquidated upon the occurrence of any of the following events:

     

    
      	
              (a)  

            	
              bankruptcy,
                dissolution, withdrawal or other termination of the last remaining
                manager
                of this FuturesAccess Fund;

            

    

     

    
      	
              (b)  

            	
              any
                event which would make unlawful the continued existence of this
                FuturesAccess Fund;

            

    

     

    
      	
              (c)  

            	
              withdrawal
                of the Sponsor unless at such time there is at least one remaining
                manager; or

            

    

     

    
      	
              (d)  

            	
              the
                determination by the Sponsor to liquidate the FuturesAccess Fund
                and wind
                up its affairs.

            

    

     

    Nothing
      in this Section 9.01 shall impair the right of Investors holding more than
      50%
      of the outstanding Units then held by Investors to vote within 90 calendar
      days
      of any of the foregoing events of dissolution to continue this FuturesAccess
      Fund on the terms set forth herein (if it is lawful to do so), and to appoint
      one or more managers for this FuturesAccess Fund.

     

    SECTION
      9.02.  DISSOLUTION.  Upon
      the dissolution of this FuturesAccess Fund, the Sponsor (or, if the Sponsor
      has
      withdrawn, such other liquidator as the Investors may, by vote of more than
      50%
      of the outstanding Units, by Net Asset Value, then held by Investors, select)
      shall wind up this FuturesAccess Fund’s affairs and, in connection therewith,
      shall distribute this FuturesAccess Fund’s assets in the following manner and
      order:

     

    
      	
              (a)  

            	
              FIRST,
                to the payment and discharge of all claims of creditors of this
                FuturesAccess Fund (including creditors who are
                Investors);

            

    

     

    
      	
              (b)  

            	
              SECOND,
                to the establishment of such reserves as the Sponsor (or such other
                liquidator) may consider reasonably necessary or appropriate for
                any
                losses, contingencies, liabilities or other matters of or relating
                to this
                FuturesAccess Fund; provided, however, that if and when the Sponsor
                (or
                such other liquidator) determines that the causes for such reserves
                have
                ceased to exist, the monies, if any, then held in reserve shall be
                distributed in the manner hereinafter provided;
                and

            

    

     

    
      	
              (c)  

            	
              THIRD,
                after making all final allocations contemplated by Article II (and
                for
                such purposes treating the date of dissolution as if it were a December
                31), to the distribution in cash of the remaining assets of this
                FuturesAccess Fund among the Investors in accordance with the positive
                balance in each such Investor’s Closing Capital Account as of the last day
                of the Accounting Period in which this FuturesAccess Fund’s dissolution
                occurs.  Any assets distributed in kind in the liquidation shall
                be valued, for purposes of such distribution, in accordance with
                Section
                2.11 as of the date of distribution, and any difference between such
                value
                and the carrying value of such assets shall, to the extent not otherwise
                taken into account in determining Net Asset Value, be deemed to constitute
                income or loss to this FuturesAccess
                Fund.

            

    

     

    
      
        
        

      

      
        
          A-20

           

          
            
              The
                Merrill Lynch FuturesAccessSM
Funds

              General
                Form of Operating Agreement Dated as of April 1,
                2007

            

          

        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      X

    MISCELLANEOUS
      PROVISIONS

     

    SECTION
      10.01.  INVESTORS
      NOT TO CONTROL.  The Investors shall take no part in the conduct or
      control of this FuturesAccess Fund’s business and shall have no authority or
      power to act for or to bind this FuturesAccess Fund.

     

    SECTION
      10.02.  POWER
      OF
      ATTORNEY.  Each Investor, by subscribing for Units, does hereby
      constitute and appoint the Sponsor, as such Investor’s true and lawful
      representative and attorney-in-fact, with authority in such Investor’s name,
      place and stead to make, execute, sign and file a Certificate of Formation
      of
      this FuturesAccess Fund, any amendments thereto authorized herein, any
      amendments to this Agreement authorized herein, and all such other instruments,
      documents and certificates which may, from time to time, be required by, or
      deemed advisable by the Sponsor under, the laws of the United States of America,
      the State of Delaware, the State of New Jersey, the State of New York or any
      other state or political subdivision in which the Sponsor shall determine that
      this FuturesAccess Fund shall do business, to effectuate, implement and continue
      the valid existence of this FuturesAccess Fund.

     

    SECTION
      10.03.  AMENDMENTS;
      CONSENTS.  This Agreement may not be modified or amended without the
      written consent of the Sponsor.

     

    This
      Agreement may be modified or amended at any time with the consent of the Sponsor
      and by Investors holding more than 50% of the outstanding Units (by Net Asset
      Value) then held by Investors.

     

    For
      all
      purposes of this Agreement, except as provided in the last paragraph of this
      Section 10.03, when the consent of Investors is required, the affirmative
      consent of Investors is not required; “negative consent” by failure to object in
      writing after reasonable notice of a proposed modification or amendment is
      sufficient — 30 calendar days to be conclusively presumed to constitute
“reasonable notice” for such purposes.

     

    The
      Sponsor may, without the consent of the Investors, modify or amend any provision
      of this Agreement for any of the following purposes:

     

    
      	
              (a)  

            	
              to
                add to this Agreement any further covenants, restrictions, undertakings
                or
                other provisions for the protection or benefit of
                Investors;

            

    

     

    
      	
              (b)  

            	
              to
                cure any ambiguity or to correct or supplement any provision contained
                herein which may be defective or inconsistent with any other provisions
                contained herein or in the Confidential Program Disclosure
                Document;

            

    

     

    
      	
              (c)  

            	
              to
                cause the allocations contained in Article II to comply with Section
                704
                of the Code or any other statutory provisions or regulations relating
                to
                such allocations;

            

    

     

    
      	
              (d)  

            	
              to
                provide for the issuance of new Classes of Units, or to amend the
                manner
                in which Units may be exchanged among funds in FuturesAccess or between
                different Classes of Units, provided that doing so is not adverse
                to
                outstanding Units (as contemplated by Section 10.14);
                or

            

    

     

    
      	
              (e)  

            	
              to
                make any other change not materially adverse to the interests of
                the
                Investors.

            

    

     

    Notwithstanding
      anything in this Section 10.03 to the contrary, without the affirmative written
      consent of each Investor affected thereby, no such modification or amendment
      shall: reduce the liabilities, obligations or responsibilities of the Sponsor
      (except that the Sponsor may take action to admit any person or entity which
      is
      an affiliate of the Sponsor as a substitute manager, and to provide for the
      Sponsor subsequently to withdraw from this FuturesAccess Fund or to provide
      for
      the Sponsor to withdraw from this FuturesAccess Fund without admitting any
      such
      substitute manager to this FuturesAccess Fund); increase the liabilities of
      Investors; or reduce the participation of Investors in the profits and losses
      of
      this FuturesAccess Fund or in any distributions made by this FuturesAccess
      Fund
      as set forth herein.

     

    
      
        
        

      

      
        
          A-21

           

          
            
              The
                Merrill Lynch FuturesAccessSM
Funds

              General
                Form of Operating Agreement Dated as of April 1,
                2007

            

          

        

        
          

        

      

      
        
        

      

    

     

    SECTION
      10.04.  NOTICES.  Any
      notice to this FuturesAccess Fund or the Sponsor relating to this Agreement
      shall be in writing and delivered in person or by registered or certified mail
      and addressed to the Sponsor at the principal office of this FuturesAccess
      Fund.  All notices and reports sent to the Investors shall be
      addressed to each Investor at the address set forth in such Investor’s
      FuturesAccess Program Subscription and Exchange Agreement (including the
      FuturesAccess Program Subscription and Exchange Agreement Signature
      Page).  Any Investor may designate a new address by written notice to
      the Sponsor.  Unless otherwise specifically provided in this
      Agreement, a notice shall be deemed to have been given to this FuturesAccess
      Fund or the Sponsor when actually received by the Sponsor, and to have been
      given to an Investor three business days after being deposited in a post office
      or regularly maintained mailbox or when delivered in person.  The
      Sponsor may waive any notice requirement relating to notice to this
      FuturesAccess Fund or to itself, but no such waiver shall constitute a
      continuing waiver.

     

    SECTION
      10.05.  LEGAL
      EFFECT; MANNER OF EXECUTION.  This Agreement shall be binding upon the
      Investors, the Sponsor and their respective permitted successors and
      assigns.  This Agreement shall inure to the benefit of the foregoing
      parties as well as to the benefit of the Sponsor Parties.

     

    This
      Agreement may be executed by power-of-attorney embodied in a FuturesAccess
      Program Subscription and Exchange Agreement (including the FuturesAccess Program
      Subscription and Exchange Agreement Signature Page) or similar instrument with
      the same effect as if the parties executing the FuturesAccess Program
      Subscription and Exchange Agreement (including the FuturesAccess Program
      Subscription and Exchange Agreement Signature Page) or similar instrument had
      all executed one counterpart of this Agreement; provided, that this Agreement
      may also be executed in separate counterparts.

     

    SECTION
      10.06.  GOVERNING
      LAW.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
      WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO PRINCIPLES OF
      CONFLICTS OF LAWS.  THE RIGHTS AND LIABILITIES OF THE INVESTORS SHALL
      BE AS PROVIDED IN THE ACT, EXCEPT AS HEREIN OTHERWISE EXPRESSLY
      PROVIDED.

     

    SECTION
      10.07.  CONSENT
      TO JURISDICTION.  All controversies arising hereunder or in connection
      with the affairs of this FuturesAccess Fund shall be brought in the state or
      federal courts located in New York, New York, and all Investors hereby
      irrevocably consent to such jurisdiction and venue.

     

    SECTION
      10.08.  “TAX
      MATTERS PARTNER”; TAX ELECTIONS.  The Sponsor is designated as the
“Tax Matters Partner” for this FuturesAccess Fund and shall be empowered to make
      or revoke any elections now or hereafter required or permitted to be made by
      the
      Code or any state or local tax law.

     

    Unless
      the Sponsor otherwise consents, each Investor, by subscribing for Units, agrees
      not to treat any tax item on such Investor’s individual tax return in a manner
      inconsistent with the treatment of such item by this FuturesAccess Fund, as
      reflected on the Schedule K-1 or other information statement furnished by this
      FuturesAccess Fund to such Investor, or to file any claim for refund relating
      to
      any such Tax Item which would result in such inconsistent
      treatment.

     

    SECTION
      10.09.  DETERMINATION
      OF MATTERS NOT PROVIDED FOR IN THIS AGREEMENT.  The Sponsor shall be
      empowered to decide, in its good faith judgment, any questions arising with
      respect to this FuturesAccess Fund or to this Agreement, and to provide for
      matters arising hereunder but which are not specifically set forth herein,
      as
      the Sponsor may deem to be in, or not opposed to, the best interests of this
      FuturesAccess Fund.

     

    SECTION
      10.10.  NO
      PUBLICITY.  Each Investor agrees that such Investor will in no event
      provide information concerning this FuturesAccess Fund to any third party,
      knowing that such third party may use such information in any form of
      publication, newsletter or circular, whether publicly or privately
      distributed.  Each Investor’s investment in this FuturesAccess Fund,
      as well as the performance of such investment, shall be maintained on a strictly
      confidential basis; provided, that the Sponsor may make use of this
      FuturesAccess Fund’s performance record in the ordinary course of the Sponsor’s
      business activities.

     

    
      
        
        

      

      
        
          A-22

           

          
            
              The
                Merrill Lynch FuturesAccessSM
Funds

              General
                Form of Operating Agreement Dated as of April 1,
                2007

            

          

        

        
          

        

      

      
        
        

      

    

     

    SECTION
      10.11.  SURVIVAL.  The
      indemnity and exculpation provisions hereof, as well as the obligations to
      settle accounts, shall survive the withdrawal of any Investor as well as the
      dissolution of this FuturesAccess Fund.

     

    SECTION
      10.12.  WAIVERS.  The
      Sponsor may waive any provision of this Agreement restricting the actions of
      Investors in respect of certain but not all Investors provided that doing so
      will have no adverse effect on other Investors.

     

    SECTION
      10.13.  VOTING
      RIGHTS.  The voting rights of the Units shall be determined by their
      respective Net Asset Values.  In determining the number of Units
      entitled to vote or consent and the number of votes or consents needed for
      approval of any matter for which such a vote or consent is provided for herein,
      Units held by any Sponsor Party (including, without limitation, the Sponsor’s
      Capital Account, if any, on a Unit-equivalent basis) shall not be
      counted.

     

    SECTION
      10.14.  ISSUANCE
      OF DIFFERENT CLASSES.

     

    
      	
              (a)  

            	
              The
                Sponsor may, at any time and from time to time, issue different Classes
                of
                Units, and may adjust the allocation, voting and other provisions
                of this
                Agreement so as equitably to reflect the issuance of such additional
                Classes.  The Sponsor may also alter the terms on which Units of
                any Class are sold, provided that doing so does not adversely affect
                existing Investors.

            

    

     

    
      	
              (b)  

            	
              The
                fact that, for purposes of convenience, Units issued by this FuturesAccess
                Fund shall be designated as being Units of different “Classes” shall in no
                respect imply that these Units constitute different classes of equity
                interests as opposed to simply being subject to different
                fees.

            

    

     

    SECTION
      10.15.  COMPLIANCE
      WITH THE INVESTMENT ADVISERS ACT OF 1940; SECURITIES LAWS.

     

    
      	
              (a)  

            	
              This
                FuturesAccess Fund is not an “advisory client” of the Sponsor for purposes
                of the Investment Advisers Act of 1940 (the “Advisers Act”) due to this
                FuturesAccess Fund trading futures, forward and options contracts
                other
                than securities.  Nevertheless, to the extent that any provision
                hereof may be construed in a manner inconsistent with the Advisers
                Act, it
                is the express intent of the Sponsor and the Investors that such
                provision
                be interpreted and applied ab initio so as to comply with the
                Advisers Act in all respects  (even if doing so effectively
                amends the terms of this
                Agreement).

            

    

     

    
      	
              (b)  

            	
              Nothing
                in this Agreement shall be deemed to constitute a waiver by any Investor
                of such Investor’s rights under any federal or state securities
                laws.

            

    

     

     

    *  *  *  *  *  *  *

     

    
      
        
        

      

      
        
          A-23

           

          
            
              The
                Merrill Lynch FuturesAccessSM
Funds

              General
                Form of Operating Agreement Dated as of April 1,
                2007

            

          

        

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the undersigned have executed this
      Agreement by their respective representatives thereunto duly
      authorized.

     

    
      	
              INVESTORS:

            	 	
              SPONSOR:

            
	 	 	 
	
              By:

            	
              Merrill
                Lynch Alternative Investments LLC

            	 	
              Merrill
                Lynch Alternative Investments LLC

            
	 	
              Attorney-in-Fact

            	 	 
	 	 	 	 
	
              By:

            	
              /s/
                Paul
                Tartanella                           

            	 	
              By:

            	
              /s/
                Paul
                Tartanella                           

            
	 	
              Paul
                Tartanella

            	 	 	
              Paul
                Tartanella

            
	 	
              Vice
                President and Manager

            	 	 	
              Vice
                President and Manager

            

    

     

     

     A-24
      

     

    
      
        The
          Merrill Lynch FuturesAccessSM
Funds

        General
          Form of Operating Agreement Dated as of April 1,
          2007

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