Document:

Exhibit 10.01

 

ML FUTURESACCESSsm ADVISORY AGREEMENT

 

among

 

ML TRANSTREND DTP ENHANCED FUTURESACCESSSM LLC

ML TRANSTREND DTP ENHANCED FUTURESACCESSSM LTD.

 

MERRILL LYNCH ALTERNATIVE INVESTMENTS LLC

 

and

 

TRANSTREND B.V.

 

 

Dated as of March 20, 2007

 

 

ML FUTURESACCESSSM ADVISORY AGREEMENT

 

Table of Contents

 

	
  Section

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  Undertakings
  of the Trading Advisor in Connection with Offering

  	
   

  	
  3

  
	
  2.

  	
   

  	
  Duties
  of the Trading Advisor

  	
   

  	
  5

  
	
  3.

  	
   

  	
  Trading
  Advisor Independent

  	
   

  	
  7

  
	
  4.

  	
   

  	
  Commodity
  Broker; Floor Brokers

  	
   

  	
  8

  
	
  5.

  	
   

  	
  Management
  Fee

  	
   

  	
  9

  
	
  6.

  	
   

  	
  Incentive
  Fee

  	
   

  	
  9

  
	
  7.

  	
   

  	
  Term
  and Termination

  	
   

  	
  11

  
	
  8.

  	
   

  	
  Right
  to Advise Others; Uniformity of Acts and Practices

  	
   

  	
  12

  
	
  9.

  	
   

  	
  Additional
  Undertakings by the Trading Advisor

  	
   

  	
  12

  
	
  10.

  	
   

  	
  Representations
  and Warranties

  	
   

  	
  13

  
	
  11
  .

  	
   

  	
  Entire
  Agreement

  	
   

  	
  17

  
	
  12.

  	
   

  	
  Standard
  of Liability; Indemnification

  	
   

  	
  17

  
	
  13.

  	
   

  	
  Assignment

  	
   

  	
  I9

  
	
  14.

  	
   

  	
  Amendment;
  Waiver

  	
   

  	
  19

  
	
  15.

  	
   

  	
  Severability

  	
   

  	
  19

  
	
  16.

  	
   

  	
  Notices

  	
   

  	
  19

  
	
  17.

  	
   

  	
  Governing
  Law

  	
   

  	
  20

  
	
  18.

  	
   

  	
  Consent
  to Jurisdiction

  	
   

  	
  20

  
	
  19.

  	
   

  	
  Survival

  	
   

  	
  20

  
	
  20.

  	
   

  	
  Counterparts

  	
   

  	
  20

  
	
  21.

  	
   

  	
  No
  Waiver

  	
   

  	
  20

  
	
  22.

  	
   

  	
  Rules of
  Interpretation

  	
   

  	
  21

  
	
  23.

  	
   

  	
  Binding
  Effect; Benefit; Third-Party Beneficiary

  	
   

  	
  22

  
	
  24.

  	
   

  	
  Confidentiality

  	
   

  	
  23

  
	
  25.

  	
   

  	
  Advisers
  Act Compliance

  	
   

  	
  24

  

 

APPENDIX
A — COMMODITY INTERESTS TRADED BY TRANSTREND B.V.

APPENDIX
B — COMMODITY TRADING AUTHORITY

 

 

ML FUTURESACCESSSM ADVISORY AGREEMENT

 

THIS
ADVISORY AGREEMENT (the “Agreement”), is made as of this 20th day of March,
2007, among ML TRANSTREND DTP ENHANCED FUTURESACCESSsm  LLC, a Delaware limited liability company, ML
TRANSTREND DTP ENHANCED FUTURESACCESSsm LTD., a Cayman Islands exempted company (the “Onshore Fund” and the “Offshore
Fund,” respectively, and collectively, the “Fund”), MERRILL LYNCH ALTERNATIVE
INVESTMENTS LLC, a Delaware limited liability company (the “Manager”), and
TRANSTREND B.V., a limited liability company incorporated under the laws of the
Netherlands (the “Trading Advisor”).

 

W  I  T  N  E  S  S
E  T  H:

 

WHEREAS, the
Fund is one of the “family” of privately-offered managed futures funds
sponsored by the Manager as part of the “ML FuturesAccesssm Program,” which provides for investors to
invest in, and exchange their investments among, different funds in the ML
FuturesAccessSM Program
(each of which is currently a single-advisor fund), as well as among the
various “hedge funds” in the ML HedgeAccess® Program (the ML FuturesAccessSM Program and the ML HedgeAccess® Program being collectively referred to as the “Program”);

 

WHEREAS, the
Manager intends to operate a “fund of funds” (“Trend-Following FuturesAccess”)
— which will allocate and reallocate its capital among funds (“FuturesAccess
Funds”) such as the Fund, which are established within the ML FuturesAccessSM Program;

 

WHEREAS, the
Fund has been formed in order to trade, buy, sell or otherwise acquire, hold or
dispose of spot currencies, forward contracts, futures contracts and swaps for
commodities, financial instruments and currencies, rights pertaining thereto
and options thereon or on physical commodities and engage in all activities
incident thereto (the foregoing forms of investment being collectively referred
to herein as “commodity interests”) under the direction of the Trading Advisor;

 

WHEREAS, the
Onshore Fund intends, subject to the terms and conditions set forth herein, to
offer units of limited liability company interest in the Fund (“Units”) for
sale to investors in an offering exempt from registration under the Securities
Act of 1933, as amended (the “1933 Act”), as described in the Onshore Fund’s
Confidential Program Disclosure Document, as amended from time to time (the “Onshore
Memorandum”), which has been filed with the Commodity Futures Trading
Commission (the “CFTC”) and the National Futures Association (the “NFA”)
pursuant to the Commodity Exchange Act, as amended (the “CEA”), the commodity
pool operator and commodity trading advisor regulations promulgated under the
CEA by the CFTC (the “Commodity Regulations”), and the NFA rules promulgated
under the CEA (the “NFA Rules”);

 

WHEREAS, the
Offshore Fund intends, subject to the terms and conditions set forth herein, to
offer redeemable participating shares (“Shares”; and collectively with the
Units, “Interests”) for sale exclusively to Non-“United States persons,”
pursuant to Regulation S under the 1933 Act, as described in the Offshore Fund’s
Confidential Program Disclosure Document,

 

2

 

as
amended from time to time (the “Offshore Memorandum,” and collectively, with
the Onshore Memorandum, the “Memorandum”). The Manager has filed a Form 18-96
Notice with NFA exempting the Offshore Fund from filing the Offshore Memorandum
with the Commodity Futures Trading Commission (the “CFTC”) or NFA;

 

WHEREAS, the
Manager acts as manager of the Fund;

 

WHEREAS, the
Trading Advisor is engaged in the business of, among other things, making
trading decisions on behalf of investors in the purchase and sale of certain
commodity interests;

 

WHEREAS, the
Manager has sponsored the Fund in order that the Trading Advisor, upon the
terms and conditions set forth herein, act as the trading advisor for the Fund,
making commodity interests investment decisions for the Fund on a discretionary
basis; and

 

WHEREAS, the
Trading Advisor is willing to manage the Fund’s commodity interests trading.

 

NOW, THEREFORE,
the parties hereto do hereby agree as follows, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
and in entering into this Agreement the parties intend to be legally bound:

 

1.                                       Undertakings of the Trading Advisor in
Connection with Offering.

 

(a)                                  Trading Advisor to Provide Current
Information. At all times
while any of the Interests continue to be offered, the Trading Advisor agrees
to use its reasonable best efforts to cooperate with the Manager in preparing
the sections in the Memorandum related to the Trading Advisor, including
without limitation by providing, as promptly as may be reasonably practicable,
all information (if any) regarding the Trading Advisor, its “principals,” “trading
principals” and “trading program” (each of the foregoing as defined in Section 4.10
of the Commodity Regulations) and “Affiliates” (as defined in Rule 405
promulgated under the Securities Act) which the Manager reasonably believes to
be necessary or advisable to include in the Memorandum.

 

(b)                                 Solicitation Material; “Roadshow”
Participation. The Trading
Advisor, its officers and employees shall not use, publish, circulate or
distribute the Memorandum or any related solicitation material nor shall the
Trading Advisor, its officers or employees engage in any marketing, sales or
promotional activities in connection with the offering of Interests, except as
may be reasonably requested by the Manager and agreed to by the Trading Advisor
and as may be permitted by the Commodity Regulations and the NFA Rules. The
Trading Advisor will, to the extent reasonably requested and scheduled by the
Manager and agreed to by the Trading Advisor, participate in “road shows,”
seminars, presentations or other marketing activities relating to the Fund for
five (5) calendar days in the aggregate during calendar years 2007 and
2008, such participation to be at the expense of the Trading Advisor. For
avoidance of doubt, the Trading Advisor shall not be required to participate in
any “road shows”, seminars, presentations or other marketing activities
relating to the Fund on or after January 1, 2009.

 

3

 

(c)                                  Performance Information.

 

(i)                                     At all times while any of the Interests
continue to be offered, the Trading Advisor, at its own expense, shall promptly
provide the Manager with complete and accurate composite performance
information (in form and substance consistent with Sections 4.25 and 4.35 of
the Commodity Regulations and the NFA Rules) reflecting the actual composite
performance of the client accounts directed by the Trading Advisor up to the
latest practicable date (consistent with Sections 4.25 and 4.35 of the
Commodity Regulations), together with any reports or letters relating to such
composite performance data subsequently received from accountants and in the
possession of the Trading Advisor.

 

(ii)                                  The Manager acknowledges receipt, on behalf
of both itself and the Fund, of the Trading Advisor’s commodity trading advisor
disclosure document dated December 17, 2006 (the “Trading Advisor
Disclosure Document”), and of all other disclosure documents required to be
delivered by the Trading Advisor pursuant to applicable Commodity Regulations
or the NFA Rules.

 

(d)                                 Access to Books and Records. Upon reasonable notice to the Trading
Advisor, the Manager shall have the right to have access to the Trading Advisor’s
offices during normal business hours and at the Manager’s expense in order to
inspect such books and records related to the Trading Advisor’s trading for
client accounts utilizing the Trading Program (as defined in Section 2(a))
as the Manager may reasonably deem necessary in connection with the
transactions contemplated hereby, in each case, subject to such restrictions as
the Trading Advisor may reasonably deem necessary or advisable so as to
preserve the confidentiality of proprietary information with respect to clients
and investors other than those who access the Trading Advisor through the Fund;
provided, however, that nothing contained in this Agreement shall
be deemed or construed to require the Trading Advisor to disclose the
proprietary details of any trading approach.

 

(e)                                  General Assistance.

 

(i)                                     In consideration of the Manager’s reliance on
the Trading Advisor’s availability and ability to make trading decisions for
the Fund, the Trading Advisor agrees promptly to notify the Manager in the
event that the Trading Advisor has any reason to believe that the Trading
Advisor may not be able or willing to do so to the full extent set forth
herein.

 

(ii)                                  The Trading Advisor agrees, subject to Section 8,
not to accept other client capital or accounts if doing so could reasonably be
expected to impair the Trading Advisor’s ability to manage the Fund as
contemplated by the Memorandum, assuming that the Fund has a minimum capitalization
of $250 million in the calendar years 2007 and 2008; provided, however,
that the provisions of this Section 2(e)(ii) shall not apply to, and
shall in no manner restrict, the Trading Advisor’s management of any accounts
it currently manages

 

4

 

or
may hereafter manage for current and/or former principals and/or Affiliates of
the Trading Advisor under any circumstances.

 

(iii)                               The Trading Advisor acknowledges that, as of
the date of this Agreement, the Manager is registered as an “investment adviser”
with the Securities and Exchange Commission under the Investment Advisers Act
of 1940, as amended (the “Advisers Act”), and agrees to take such steps as the
Manager may reasonably request to assist the Manager with the Manager’s
obligation to operate the Fund in compliance with the Advisers Act.

 

2.                                       Duties of the Trading Advisor.

 

(a)                                  Trading for the Fund. The Trading Advisor shall act as the sole
and exclusive trading advisor for the Fund. The Trading Advisor, the Manager
and the Fund agree that in making trading decisions for the Fund, the Trading
Advisor shall use its Diversified Trend Program (Enhanced Risk - USD) (the “Trading
Program”) described in the Memorandum. The Trading Advisor shall have sole and
exclusive authority and responsibility for directing the Fund’s trading,
subject to the Manager’s fiduciary authority to intervene to overrule or
unwind trades if the Manager deems that doing so is necessary or advisable for
the protection of the Fund. The Manager may also override the trading
instructions of the Trading Advisor to the extent necessary: (i) to fund
any distributions or redemptions of Interests to be made by the Fund; (ii) to
pay the Fund’s expenses; and/or (iii) to comply with speculative position
limits; provided that the Manager shall permit the Trading Advisor three days
in which to liquidate positions for the purposes set forth in clauses (i)-(ii) prior
to exercising its override authority. The Trading Advisor will have no
liability for the results of any of the Manager’s interventions in (i), (ii) or
(iii), above.

 

The
Trading Advisor shall give the Manager prompt written notice of any proposed
material change in the Trading Program (as described in the Trading Advisor
Disclosure Document and as applied to the Fund) and shall not make any such
material change without at least 30 days’ prior notice to the Manager if such
material change would require an amendment to the Trading Advisor Disclosure
Document. The addition and/or deletion of commodity interests from the Fund’s
portfolio traded by the Trading Advisor shall not be deemed a material change
in the Trading Program and prior written notice to the Manager shall not be
required therefor, except as set forth in Section 2(b) below.

 

(b)                                 List of Commodity Interests Traded by the
Trading Advisor.

 

(i)                                     The Trading Advisor shall provide the Manager
with a complete list of commodity interests which it intends to trade on the
Fund’s behalf. All commodity interests other than regulated futures contracts
and options on regulated futures contracts traded on a qualified board or
exchange in the United States shall be listed on Appendix A to this Agreement.
The addition of commodity interests (other than forward contracts on foreign
currencies) to the Fund’s portfolio traded by the Trading Advisor as set forth
in Appendix A to this Agreement shall require prior written notice to the Fund
or the Manager and an amendment to Appendix A, which amendment shall become
effective no later

 

5

 

than
5 days following the Trading Advisor’s having provided the Manager or the Fund
with prior written notice of its intention to trade such additional commodity
interests.

 

(ii)                                  The Trading Advisor acknowledges and agrees that
U.S. investors are prohibited by the CFTC from trading in certain instruments —
for example, certain “contracts for differences,” and certain non-U.S. stock
index futures and related options. The Trading Advisor agrees not to trade any
such instruments for the Onshore Fund, as well as for the Offshore Fund should
the Manager so request.

 

(c)                                  Capacity; Speculative Position Limits.

 

(i)                                     The Trading Advisor agrees that it will
reserve for the Fund an aggregate amount of $250 million in trading capacity (“Total
Capacity”) during the calendar years 2007 and 2008. In the event that there are
any withdrawals from the Fund’s assets or investment losses, the amount of such
withdrawals and investment losses shall increase the then available remaining
capacity such that Total Capacity shall remain at $250,000,000 for the calendar
years 2007 and 2008. In the event that there are any additions to the Fund’s
assets or investment gains, the amount of such additions and investment gains
shall decrease the then available remaining capacity such that Total Capacity
shall remain at $250,000,000 for the calendar years 2007 and 2008. For
avoidance of doubt, the Trading Advisor shall not be required to offer any
capacity to the Fund on or after January 1, 2009.

 

(ii)                                  The Trading Advisor also agrees to consult
with the Manager in the event that, notwithstanding the undertaking in the
preceding sentence, the Manager believes that capacity restrictions may affect
the Trading Advisor’s strategy on behalf of the Fund.

 

(iii)                               If the Trading Advisor (either alone or
aggregated with the positions of any other person, if such aggregation shall be
required by the CEA, the CFTC or any other regulatory authority having
jurisdiction) exceeds applicable position limits in any commodity interest
traded for the Fund, the Trading Advisor shall promptly take such action as the
Trading Advisor may deem fair and equitable to comply with such limits, and
shall promptly with due care deliver to the Fund a written explanation of the
action taken to comply with such limits. If such limits are exceeded by the
Fund, the Manager may require the Trading Advisor to liquidate positions as
required.

 

(d)                                 No Authority to Invest Assets Held in
Securities and Cash. The
Fund and the Manager, and not the Trading Advisor, shall have the sole and
exclusive authority and responsibility with regard to the investment,
maintenance and management of the Fund’s assets other than in respect of the
Trading Advisor’s trading of the Fund’s assets in commodity interests.

 

6

 

(e)                                  Trading Authorization. Prior to the Fund commencing operations,
the Fund shall deliver to the Trading Advisor a trading authorization in the
form of Appendix B hereto appointing the Trading Advisor as an agent of the
Fund and attorney-in-fact for such purpose.

 

(f)                                    Delivery of Disclosure Documents and Reports. The Trading Advisor shall, during the term
of this Agreement, deliver to the Fund copies of all disclosure documents filed
with NFA promptly after such filing.

 

(g)                                 Trade Reconciliations. The Trading Advisor acknowledges its
obligation to review the Fund’s commodity interest positions on a daily basis
and to notify the Manager promptly of any material errors committed by the
Trading Advisor or any trade which the Trading Advisor believes was not
executed in accordance with its instructions and which cannot be promptly
resolved.

 

(h)                                 Onshore and Offshore Fund Trading Accounts. At the request of the Manager, the Trading
Advisor agrees to trade separate accounts for each of the Onshore and the
Offshore Funds, a single account for both or any combination of the two, as the
case may be.

 

(i)                                     Trade Information. The Trading Advisor shall use reasonable
efforts to provide trade information to OMR Systems by electronic file by 4:30 p.m.
(New York time) on the date of any trade made on behalf of the Fund. Such
reports may be provided directly by the Trading Advisor.

 

(j)                                     Letter Agreement. As of the date hereof, the Manager, Merrill
Lynch, Pierce, Fenner & Smith Incorporated (“Merrill Lynch”) and the
Trading Advisor are entering into a Letter Agreement (the “Letter Agreement”)
setting forth the legally binding agreements with respect to certain matters
relating to the organization and marketing of the Fund. This Agreement, which
deals primarily with the Trading Advisor’s management of the Fund’s trading, is
to be read and interpreted in conjunction with the Letter Agreement, and vice versa.

 

(k)                                  No Guarantee of Profits. The Fund and the Manager both specifically
acknowledge that in agreeing to make trading decisions for the Fund, the
Trading Advisor is in no respects making any guarantee of profits or of
protections against loss, but it is undertaking to use reasonable best efforts
to trade profitably on behalf of the Fund.

 

3.                                       Trading Advisor Independent. For all purposes of this Agreement, the
Trading Advisor shall be deemed to be an independent contractor and shall have
no authority to act for or represent the Fund in any way and shall not
otherwise be deemed to be an agent of the Fund. Nothing contained herein shall
create or constitute the Trading Advisor, the Fund or the Manager as a member
of any partnership, joint venture, association, syndicate, unincorporated
business or other separate entity, nor shall be deemed to confer on any of them
any express, implied, or apparent authority to incur any obligation or
liability on behalf of any other. The parties acknowledge that the Trading
Advisor has not been an organizer or promoter of the Fund.

 

7

 

4.                                       Commodity Broker; Floor Brokers

 

(a)                                  (i) Clearing of All Trades. The
Trading Advisor shall enter orders for all commodity interest transactions for
the Fund through such commodity broker or brokers as the Fund shall designate from
time to time in its sole discretion (the Fund currently so designating Merrill
Lynch). The Trading Advisor will not, without the consent of the Manager, trade
on a “give up” basis through floor brokers, give-up brokers, prime brokers,
dealers or other executing entities or facilities (collectively, “executing
brokers”) not affiliated with Merrill Lynch. The Manager will review and
approve or disapprove all executing brokers proposed by the Trading Advisor for
the Fund’s account, such approval not to be unreasonably withheld or delayed.
If an executing broker is approved, the Fund will not hold the Trading Advisor
liable for any error or breach of contract by any such executing broker subject
to the standard of liability set forth in Section 12(a). Irrespective of
whether executing brokers unaffiliated with Merrill Lynch receive the Manager’s
consent to execute trades on behalf of the Fund, all such trades will be “given-up”
to be carried by Merrill Lynch. The Trading Advisor shall receive copies of all
daily and monthly brokerage statements for the Fund directly from Merrill
Lynch. The Trading Advisor shall have full authority to enter in its own name
but for the account, benefit and risk of the Fund into any automated order
routing agreement, if and when required by any executing broker, for executing
orders through an automated order routing system, to make the necessary
representations and warranties set forth in such agreement and to negotiate the
applicable automated order routing commissions, if any. The parties agree that
all orders, entered into pursuant to this Agreement and pursuant to any
automated order routing agreement, are being entered into by the Trading
Advisor as the Fund’s agent for the account, benefit and risk of the Fund. The
Fund agrees to assume all liabilities associated with the orders entered into
using an automated order routing system and agrees, subject to the standard of
liability set forth in Section 12(a) of this Agreement, that the
Trading Advisor shall have no liability for such transactions.

 

(ii)                                  The Fund will be subject to round turn
commission rates as determined from time to time by Merrill Lynch and
consistent with disclosures made to investors.

 

(b)                                 Forward Trading.

 

(i)                                     All forward trades for the Fund shall be
executed through the forward dealer(s) (which may be Affiliates of the Manager)
designated by the Manager, provided that at the request of the Trading Advisor,
the Manager may consent to other forward trading arrangements, which consent
shall not be unreasonably withheld or delayed.

 

(ii)                                  If necessary for the Trading Advisor to trade
pursuant to the Trading Program, the Fund shall provide adequate dealing lines
of credit for the Trading Advisor to place orders for spot and forward foreign
exchange contracts on behalf of the Fund.

 

(iii)                               Any “F/X prime brokerage” arrangements which
the Trading Advisor may wish to establish for the Fund shall be subject to the
approval of the Manager. The Manager hereby so approves Deutsche Bank AG,
London Branch,

 

8

 

as FX prime broker to effectuate the give-up of over-the-counter
foreign exchange transactions to Merrill Lynch or such other clearing broker
appointed by the Fund from time to time for the account, benefit and risk of
the Fund, and the applicable prime brokerage commissions to be negotiated by
the Trading Advisor. The parties agree that all over-the-counter foreign
exchange transactions entered into pursuant to this Agreement are being entered
into by the Trading Advisor as the Fund’s agent for the account, benefit and
risk of the Fund, notwithstanding that such over-the counter-foreign exchange
transactions are first being entered into by the Trading Advisor, being treated
as principal by the foreign exchange prime broker and Merrill Lynch. The Fund
agrees to assume all liabilities associated with the over-the-counter foreign
exchange transactions and the Fund and the Manager agree, subject to the
standard of liability set forth in Section 12(a) of this Agreement,
that the Trading Advisor shall have no liability for such over-the-counter
foreign exchange transactions.

 

(c)                                  The Trading Advisor acknowledges that the
Fund shall be subject to the brokerage commissions and administrative fees
specified in the Memorandum.

 

(d)                                 Floor Brokerage Costs. The “floor brokerage,” “give-up” fees and
other transaction costs charged by any floor broker, other than Merrill Lynch,
to effect Fund transactions shall be subject to the approval of Merrill Lynch,
which shall pay such costs, such approval not to be unreasonably withheld or
delayed provided that such fees and transaction costs are competitive with
Merrill Lynch’s standard rates.

 

5.                                       Management Fee. As of the last Business Day of each
calendar month, the Fund shall pay the Trading Advisor a Management Fee equal
to 1/12 of 2.0% (a 2.0% annual rate) of the aggregate gross asset value (for
the avoidance of doubt, prior to reduction for any accrued Incentive Fee or for
the Management Fee being calculated) of the Fund. Such Management Fee shall be pro rated in the case of partial calendar
months and for intra month capital additions and capital withdrawals, but shall
not be subject to rebate once paid. To the extent that the Trading Advisor is
managing any notional funds for the Fund, the amount of such notional funding
shall form part of the gross asset value of the Fund for purposes of
determining the Trading Advisor’s Management Fee.

 

6.                                       Incentive Fee.

 

(a)                                  The Fund shall pay to the Trading Advisor, as
of each December 31 (“Incentive Fee Calculation Date”), an Incentive Fee
equal to 25% of any New Trading Profit recognized by the Fund as of such
Incentive Fee Calculation Date.

 

(b)                                 “Trading Profits” equals any profits earned
from the trading of commodity interests for the Onshore Fund and the Offshore
Fund, determined separately, in each case after deduction for all fees and
expenses incurred by the Onshore Fund and the Offshore Fund, respectively,
other than the Incentive Fee itself. For the avoidance of doubt, Trading
Profits shall not be reduced by initial selling compensation or ongoing selling
and trailing compensation payable with respect to the sales of Interests.

 

9

 

(c)                                  “New Trading Profit”
equals any increase in the Net Asset Value of the Fund, prior to reduction for
any accrued Incentive Fee as of the current Incentive Fee Calculation Date over
the High Water Mark attributable to each of the Onshore Fund and the Offshore
Fund, respectively.

 

(d)                                 (i)                                     The High Water Mark of each of the Onshore
Fund and the Offshore Fund, respectively, shall be equal to the highest Net
Asset Value attributable to each of the Onshore Fund and the Offshore Fund,
respectively, after reduction for the Incentive Fee then paid by each of the
Onshore Fund and the Offshore Fund, respectively, as of any preceding Incentive
Fee Calculation Date. The High Water Mark shall be increased dollar for dollar
by new subscriptions made to, and decreased proportionately when capital
withdrawals are made from, the Onshore Fund and the Offshore Fund,
respectively. The respective amounts of new subscriptions and capital
withdrawals shall be calculated taking into account any notional funds being
traded by the Trading Advisor for the Fund related to such new subscriptions
and capital withdrawals. The proportionate High Water Mark reduction made as a
result of capital withdrawals shall be calculated by multiplying the High Water
Mark in effect immediately prior to such capital withdrawal by the fraction the
numerator of which is the Net Asset Value of the Onshore Fund and the Offshore
Fund, as the case may be, immediately following such reallocation and the
denominator of which is the Net Asset Value of the Onshore Fund and the
Offshore Fund, as the case may be, immediately before such capital withdrawal,
in each case prior to reduction for any accrued Incentive Fee.

 

(ii)                                  If an Incentive Fee is paid as of an
Incentive Fee Calculation Date, the High Water Mark is reset to the Net Asset
Value of the Offshore Fund or the Offshore Fund, as the case may be,
immediately following such payment.

 

(iii)                               For the avoidance of doubt, the High Water
Mark shall be determined (A) separately for each of the Onshore Fund and
the Offshore Fund, as the case may be; (B) not on the basis of any
individual investors or group of investors in either the Onshore Fund or the
Offshore Fund; and (C) after making appropriate adjustments to take
account of any notional funds being traded by the Trading Advisor for the Fund.

 

(e)                                  When there is an accrued Incentive Fee at the
time any capital withdrawal is made, the incentive Fee attributable to such
capital withdrawal will be paid. Such Incentive Fee shall be determined by
multiplying the Incentive Fee that would have been paid had the date of the
capital withdrawal been an Incentive Fee Calculation Date by the fraction the
numerator of which is the amount of the capital withdrawal and the denominator
of which is the Net Asset Value of the Fund immediately prior to the capital
withdrawal, in each case prior to reduction for the accrued Incentive Fee. Such
Incentive Fee will be paid from and reduce the amount of the capital
withdrawal.

 

(f)                                    Net Asset Value, solely for purposes of
calculating the Incentive Fee, shall not include any interest income earned by
the Fund (although such interest income shall increase Net Asset Value for
purposes of determining the value of the Interests) but shall include any
notional funds being traded by the Trading Advisor for the Fund. For the
avoidance of doubt, no Incentive Fee shall be payable on any interest income
earned by the Fund but interest income

 

10

 

shall
be included in the determination of the gross asset value for determining the
Management Fee payable to the Trading Advisor pursuant to Section 5.

 

(g)                                 Appropriate adjustments shall be made in
calculating the Incentive Fee to reflect the fact that if reductions in
notional equity result in an Incentive Fee being paid, such Incentive Fee must
be paid from actual equity, not notional equity.

 

(h)                                 The date of termination of this Agreement
shall be treated as an Incentive Fee Calculation Date and an Incentive Fee
shall be paid, if earned, to the Trading Advisor as of such date.

 

7.                                       Term and Termination.

 

(a)                                  Term and Renewal. This Agreement shall continue in effect
until the second December 31 after the effectiveness of this Agreement.
Thereafter, this Agreement shall be automatically renewed for successive one-year
periods, on the same terms, unless terminated by either the Trading Advisor or
the Fund or the Manager upon at least 90 days’ notice to the other parties
prior to the expiration of the then-current term.

 

(b)                                 Termination.

 

(i)                                     Notwithstanding Section 7(a) hereof,
this Agreement shall terminate immediately with respect to the Onshore Fund
and/or the Offshore Fund, as applicable, in the event that such fund shall
terminate and be dissolved as determined by the Manager;

 

(ii)                                  Either the Manager or the Trading Advisor may
terminate this Agreement upon 30 days’ notice as of the end of the first full
calendar quarter subsequent to the twelfth month-end after the date of this
Agreement if, as of such twelfth month-end, the Fund does not have an aggregate
capitalization of at least $25 million.

 

(iii)                               The Fund and/or the Manager, on the one hand,
or the Trading Advisor, on the other, may terminate this Agreement as a result
of a material breach hereof by any other party, after written notice of such
material breach is provided to the materially breaching party by the other
party and such material breach has not been cured within ten (10) days
following the giving of such notice;

 

(iv)                              The Trading Advisor may terminate this
Agreement at any time, upon written notice to the Fund and the Manager, in the
event: (A) the Manager overrides a trading instruction of the Trading
Advisor (for the avoidance of doubt, the Manager’s actions in accordance with Section 2(a) of
this Agreement do not confer a termination right upon the Trading Advisor); or (B) the
Fund or the Manager appoints a clearing broker other than a Merrill Lynch
Affiliate without the prior consent of the Trading Advisor, such consent to be
deemed effective no later than 5 days following the Fund’s or the Manager’s
having provided the

 

11

 

Trading
Advisor with prior written notice of its intention to appoint such other
clearing broker.

 

(c)                                  In the event of the termination of this
Agreement, the Manager shall promptly dissolve the Fund or change the Fund’s
name to eliminate confusion with the Trading Advisor or its trading programs,
which shall include, in the event of the Fund’s continued operation, removing
the words “Transtrend DTP Enhanced” as part of its name. For the avoidance of
doubt, the use of the name “Transtrend DTP Enhanced” after the termination of
this Agreement in connection with the continued reporting of the past
performance of the Fund as may be required by rules or regulations of a
relevant regulatory body shall not constitute a violation of this provision.

 

8.                                       Right to Advise Others; Uniformity of Acts
and Practices. During the
term of this Agreement, the Trading Advisor shall, subject to the capacity
undertaking set forth in Section 2(c)(i), and the exclusivity undertaking
of the Letter Agreement, be free to advise other investors as to the purchase
and sale of commodity interests, to manage and trade other investors’ commodity
interests accounts and to trade for and on behalf of their own proprietary
commodity interests accounts. However, under no circumstances shall the Trading
Advisor favor any commodity interests account directed by any of them
(regardless of the date on which they began or shall begin to direct such
account) over the Fund’s account on an overall basis, giving due consideration
to the trading program and leverage subset which the Manager has requested the
Trading Advisor to trade on behalf of the Fund. Nothing contained in this Section 8
shall preclude the Trading Advisor from charging different management and/or
incentive fees to its clients. The Fund and the Manager acknowledge and agree
that the Trading Advisor has granted and may continue to grant preferential
treatment, including but not limited to access to capacity, the waiver of all
advisory fees and other rights and benefits to accounts currently or hereafter
managed by the Trading Advisor for current and/or former principals and/or
Affiliates of the Trading Advisor and their Affiliates and the Trading Advisor’s
granting of such preferential treatment shall not be deemed to be favoring such
accounts over the Fund’s account on an overall basis.

 

At the request of the Manager, the Trading Advisor shall promptly
deliver to the Manager a satisfactory written explanation, in the reasonable
judgment of the Manager, of the differences, if any, in the gross trading
performance between the Fund’s account and such other commodity interest
accounts traded utilizing the Trading Program (subject to the need to preserve
the confidentiality of proprietary information concerning the Trading Advisor’s
trading systems, methods, models, strategies and formulas and the identity of
the Trading Advisor’s clients).

 

9.                                       Additional Undertakings by the Trading
Advisor. The Trading
Advisor, its officers and employees and their successors or assigns shall not: (i) use
or distribute for any purpose the names and/or any other information about any
of the investors in the Fund except to the extent required to (A) comply
with any laws, statutes, rules or regulations applicable to the Trading
Advisor or (B) respond to requests from the Trading Advisor’s
shareholders; and (ii) solicit any investor known by the Trading Advisor
to be an investor in the Fund for any investment in a fund traded by the
Trading Advisor pursuant to the Trading Advisor’s Diversified Trend Program; provided,
however, that this Section 9(ii) shall not preclude the

 

12

 

Trading
Advisor from managing assets for any investor in the Fund if such investor’s
investment in another fund or account traded by the Trading Advisor pursuant to
the Trading Advisor’s Diversified Trend Program is unsolicited by the Trading
Advisor.

 

10.                                 Representations and Warranties.

 

(a)                                  The Trading Advisor hereby represents and
warrants to the Manager and the Fund as follows:

 

(i)                                     The Trading Advisor is an entity duly
organized and validly existing under the laws of the jurisdiction of its
organization and in good standing in each other jurisdiction in which the
nature or conduct of its business requires such qualification and the failure
to be duly qualified would materially affect the Trading Advisor’s ability to
perform its obligations under this Agreement. The Trading Advisor has full
corporate, partnership or limited liability company (as the case may be) power
and authority to perform its obligations under this Agreement.

 

(ii)                                  This Agreement has been duly and validly
authorized, executed and delivered by the Trading Advisor and constitutes a
valid and binding agreement of the Trading Advisor enforceable in accordance
with its terms.

 

(iii)                               The Trading Advisor has all US federal and
state governmental, regulatory and commodity exchange licenses and approvals
and has effected all filings and registrations with US federal and state
governmental and regulatory agencies required to conduct its business and to
act as described herein or required to perform its obligations hereunder
(including, without limitation, registration of the Trading Advisor as a
commodity trading advisor under the CEA, and membership of the Trading Advisor
as a commodity trading advisor in NFA), and the performance of such obligations
will not violate or result in a breach of any provision of the Trading Advisor’s
certificate of incorporation, bylaws or any agreement, instrument, order, law
or regulation binding on the Trading Advisor. The principals of the Trading
Advisor are duly listed as such on its commodity trading advisor Form 7-R
registration.

 

(iv)                              Assuming the accuracy of the Manager’s representation
in subsection 10(b)(vii) and the Onshore Fund’s and the Offshore Fund’s
representation in subsection 1 0(c)(vii), the trading by the Trading Advisor of
an account for the Fund in accordance with the terms hereof will not require,
in and of itself, any registration under, or violate any of the provisions of
the Advisers Act.

 

(v)                                 The Trading Advisor’s implementation of its
Trading Program will not infringe any other person’s copyrights, trademark or
other property rights.

 

(vi)                              The execution and delivery of this Agreement,
the incurrence of the obligations herein set forth and the consummation of the
transactions contemplated herein will not constitute a breach of, or default
under, any

 

13

 

instrument by which the Trading Advisor is bound or any order, rule or
regulation applicable to the Trading Advisor of any court or any governmental
body or administrative agency having jurisdiction over the Trading Advisor.

 

(vii)                           Other than as may have been disclosed in
writing to the Manager by the Trading Advisor, there is not pending, or to the
best of the Trading Advisor’s knowledge threatened, any action, suit or
proceeding before or by any court or other governmental body to which the
Trading Advisor is a party, or to which any of the assets of the Trading
Advisor is subject, which might reasonably be expected to result in any
material adverse change in the condition, financial or otherwise, business or
prospects of the Trading Advisor. The Trading Advisor has not received any
notice of an investigation or warning letter from NFA or the CFTC regarding
non-compliance by the Trading Advisor with the CEA or the regulations
thereunder.

 

(viii)                        The Trading Advisor is not bankrupt or
insolvent.

 

(b)                                 The Manager hereby represents and warrants to
the Trading Advisor and the Fund as follows:

 

(i)                                     The Manager is duly organized and validly
existing and in good standing under the laws of the jurisdiction of its
formation and in good standing under the laws of each other jurisdiction in
which the nature or conduct of its business requires such qualification and the
failure to so qualify would materially adversely affect the Manager’s ability
to perform its obligations hereunder.

 

(ii)                                  The Manager has the
corporate power and authority under applicable law to perform its obligations
under this Agreement.

 

(iii)                               This Agreement has been duly
and validly authorized, executed and delivered by the Manager and constitutes a
legal, valid and binding agreement of the Manager enforceable in accordance
with its terms.

 

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

 

(v)                                 There is not pending, or, to the best of the
Manager’s knowledge threatened, any action, suit or proceeding before or by any
court or other governmental body to which the Manager is a party, or to which
any of the assets of the Manager is subject, which might reasonably be expected
to result in any material adverse change in the condition (financial or
otherwise), business or prospects of the Manager or is required to be disclosed
pursuant to applicable CFTC regulations. The Manager has not received any
notice of an investigation

 

14

 

or
warning letter from NFA or the CFTC regarding non-compliance by the Manager
with the CEA or the regulations thereunder.

 

(vi)                              The Manager has all US federal and state
governmental, regulatory and commodity exchange approvals and licenses, and has
effected all filings and registrations with US federal and state governmental
and regulatory agencies required to conduct its business and to act as
described herein or required to perform its obligations hereunder (including,
without limitation, registration of the Manager as a commodity pool operator
under the CEA and membership of the Manager in NFA as a commodity pool
operator), and the performance of such obligations will not contravene or
result in a breach of any provision of its certificate of incorporation,
by-laws or any agreement, order, law or regulation binding upon the Manager.
The principals of the Manager are duly listed as such on the Manager’s
commodity pool operator Form 7-R registration.

 

(vii)                           The Fund is not an investment company as
defined in the U.S. Investment Company Act of 1940, as amended (the “Investment
Company Act”), nor is the Fund relying on an exemption from registration under
the Investment Company Act set forth in Sections 3(c)(1) or 3(c)(7) of
the Investment Company Act.

 

(viii)                        The offer, sale and distribution of Interests
in the Fund shall be made in full compliance with all applicable laws,
statutes, rules, regulations and orders of ally government, governmental,
regulatory or self-regulatory organization, including without limitation,
applicable requirements regarding “anti money laundering” and “know your
customer” rules.

 

(ix)                                The Fund is not a Benefit Plan Investor (as
hereinafter defined) and none of the Fund’s assets constitute “plan assets” for
purposes of part 4 of Subtitle B of Title I of the U.S. Employee Retirement
Income Security Act of 1974, as amended (“ERISA”). The term “Benefit Plan
Investor” means any employee benefit plan subject to part 4 of Subtitle B of
Title I of ERISA, any plan to which Section 4975 of the U.S. Internal
Revenue Code of 1986, as amended, applies, and any entity whose underlying
assets include plan assets by reason of a plan’s investment in such entity.

 

(x)                                   The Manager is not bankrupt or insolvent.

 

(c)                                  Each of the Onshore and the Offshore Fund
represents and warrants to the Trading Advisor and the Manager as follows:

 

(i)                                     It is duly organized and validly existing and
in good standing under the laws of the jurisdiction of its formation and in
good standing in each other jurisdiction in which the nature or conduct of its
business requires such qualification and the failure to so qualify would
materially adversely affect the its ability to perform its obligations
hereunder.

 

15

 

(ii)                                  It has the power and authority under
applicable law to perform its obligations hereunder.

 

(iii)                               This Agreement has been duly and validly
authorized, executed and delivered by it and constitutes a legal, valid and
binding agreement of it enforceable in accordance with its terms.

 

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

 

(v)                                 There is not pending, or, to the best of its
knowledge threatened, any action, suit or proceeding before or by any court or
other governmental body to which it is a party, or to which any of its assets
are subject, which might reasonably be expected to result in any material
adverse change in the condition (financial or otherwise), business or prospects
of it or is required to be disclosed pursuant to applicable CFTC regulations.
It has not received any notice of an investigation or warning letter from NFA
or the CFTC regarding non-compliance by it with the CEA or the regulations
thereunder.

 

(vi)                              It has all US federal and state and non-US
governmental, regulatory and commodity exchange approvals and licenses, and has
effected all filings and registrations with US federal and state and non-US
governmental and regulatory agencies required to conduct its business and to
act as described herein or required to perform its obligations hereunder and
the performance of such obligations will not contravene or result in a breach
of any provision of its certificate of formation, organization agreement or any
agreement, order, law or regulation binding upon it.

 

(vii)                           It is not an investment company as defined in
the Investment Company Act nor is it relying on an exemption from registration
under the Investment Company Act set forth in Sections 3(c)(1) or 3(c)(7) of
the Investment Company Act.

 

(viii)                        The Memorandum does not contain any
misleading or untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading. Any supplemental sales literature, when read in conjunction
with the Memorandum, will not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein, in
light of the circumstances under which such statements were made, not
misleading. This representation and warranty shall not, however, apply to any
statement or omission in the Memorandum or supplemental sales literature made
in reliance upon and in conformity with information relating to the Trading
Advisor, its trading methods

 

16

 

or its trading performance which has been furnished by and approved by
the Trading Advisor.

 

(ix)                                The offer, sale and distribution of Interests
shall be made in full compliance with all applicable laws, statutes, rules,
regulations and orders of any government, governmental, regulatory or
self-regulatory organization, including without limitation, applicable
requirements regarding “anti money laundering” and “know your customer” rules.

 

(x)                                   It shall not prepare, utilize or distribute
any promotional materials (including the Memorandum or supplemental sales
literature) which identify the Trading Advisor without obtaining the Trading
Advisor’s prior written approval of such promotional materials. For the
avoidance of doubt, the identification of the Trading Advisor after the
termination of this Agreement in connection with the continued reporting of the
past performance of the Fund as may be required by rules or regulations of
a relevant regulatory body shall not constitute a violation of this provision.

 

(xi)                                It is not a Benefit Plan Investor and none of
its assets constitute “plan assets” for purposes of part 4 of Subtitle B of
Title I of the ERISA.

 

(xii)                             Each of the Offshore Fund and the Onshore
Fund is not bankrupt or insolvent.

 

(d)                                 The foregoing representations and warranties
shall be continuing during the entire term of this Agreement and, if at any
time, any event shall occur which would make any of the foregoing representations
and warranties of any party no longer true and accurate, such party shall
promptly notify the other parties.

 

11.                                 Entire Agreement. This Agreement and the Letter Agreement
constitute the entire agreement between the parties hereto with respect to the
matters referred to herein, and no other agreement, verbal or otherwise, shall
be binding as between the parties unless it shall be in writing and signed by
the party against whom enforcement is sought.

 

12.                                 Standard of Liability; Indemnification.

 

(a)                                  The Trading Advisor shall not be liable to
the Fund or the Manager or their respective successors or assigns except for
acts or omissions of the Trading Advisor: (a) which constitute (i) negligence,
(ii) misconduct or (iii) a material breach of this Agreement; or (b) which
result from the Trading Advisor not having acted in good faith with the
reasonable belief that such actions or omissions were in, or not opposed to,
the best interests of the Fund.

 

(b)                                 (i) The Fund and the Manager, jointly
and severally, shall indemnify, defend and hold harmless the Trading Advisor
and its Affiliates and their respective directors, officers, employees,
representatives and controlling persons (such Affiliates and their respective
directors, officers, employees, representatives and controlling persons are
hereinafter collectively referred to as the “Trading Advisor Parties”) from and
against any and all losses, claims, damages, liabilities (joint and several),
costs and expenses (including any investigatory, legal and

 

17

 

other
expenses incurred in connection with, and any amounts paid in, any settlement; provided
that the Fund shall have approved such settlement) (“Losses”) whether or not
resulting from any arbitration, demand, claim, dispute, investigation, lawsuit,
action or other proceeding (each a “Proceeding”), to which the Trading Advisor
and/or the Trading Advisor Parties may become subject based upon, arising out
of, or otherwise related to, this Agreement, the transactions contemplated in
this Agreement or the fact that the Trading Advisor is or was a trading advisor
to the Fund, unless any such Losses are the direct result of the Trading
Advisor’s failure to meet the standard of liability applicable to it under Section 12(a).

 

(ii)                                  The Trading Advisor shall indemnify, defend
and hold harmless the Fund and the Manager and its directors, officers,
employees and representatives (such directors, officers, employees and
representatives are hereinafter collectively referred to as the “Merrill Lynch
Parties”) from and against any and all Losses to which the Fund, the Manager
and/or the Merrill Lynch Parties may become subject, if any such Losses are the
direct result of the Trading Advisor’s failure to meet the standard of
liability applicable to it under Section 12(a).

 

(c)                                  The foregoing agreements of indemnity shall
be in addition to, and shall in no respect limit or restrict, any other
remedies which may be available to an indemnified party.

 

(d)                                 Any dispute as to whether a person or entity
is entitled to indemnification under this Section 12 may be determined by
binding arbitration in accordance with Section 18 of this Agreement.

 

(e)                                  In the event that a person entitled to
indemnification under this Section 12, is made a party to a Proceeding
alleging both matters for which indemnification may be due hereunder and
matters for which indemnification may not be due hereunder, such person shall
be indemnified only in respect of the former matters.

 

(f)                                    Promptly after receipt by any of the
indemnified parties under this Agreement of notice of any Proceeding, the
indemnified party shall notify the indemnifying party in writing of the
commencement thereof if a claim in respect thereof is to be made under this
Agreement. Except to the extent that the indemnifying party is not materially
prejudiced thereby, the omission so to notify shall relieve the indemnifying
party from any obligation or liability which it may have to any such
indemnified party under this section. In the event that such Proceeding is
brought against a person indemnified under this Agreement, and the indemnified
party is notified of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that the indemnifying party
may wish, to assume the defense thereof, with counsel selected by the
indemnifying party and approved by the indemnified person (provided that
approval may not be unreasonably withheld or delayed), and after notice from
the indemnifying party to such indemnified person of the indemnifying party’s
election so as to assume the defense thereof, the indemnifying party shall not
be liable to such person under this section for any legal or other expenses
subsequently incurred by such person in connection with the defense thereof,
unless the indemnifying party approves the employment of separate counsel by
such person (it being understood, however, that the indemnifying party shall
not be liable for legal or other expenses of more than one separate firm of attorneys
for all such persons indemnified hereunder, which firm shall be designated in
writing by the Trading Advisor or the Manager, as the case may be).

 

18

 

(g)           The provisions of
this Section 12 shall survive the termination or the expiration of this
Agreement.

 

13.           Assignment.
This Agreement shall not be assigned by any of the parties hereto without the
prior express written consent of the other parties hereto.

 

14.           Amendment; Waiver.
This Agreement shall not be amended except by a writing signed by the parties
hereto. No waiver of any provision of this Agreement shall be implied from any
course of dealing between the parties hereto or from any failure by either
party hereto to assert its rights hereunder on any occasion or series of
occasions.

 

15.           Severability.
If any provision of this Agreement, or the application of any provision to any
person or circumstance, shall be held to be inconsistent with any present or
future law, ruling, rule or regulation of any court or governmental or
regulatory authority having jurisdiction over the subject matter hereof, such
provision shall be deemed to be rescinded or modified in accordance with such
law, ruling, rule or regulation, and the remainder of this Agreement, or
the application of such provision to persons or circumstances other than those
as to which it shall be held inconsistent, shall not be affected thereby.

 

16.           Notices. Any
notice required or desired to be delivered under this Agreement shall be in
writing and shall be delivered by courier service, facsimile, e-mail, any form
of electronic file transfer, mail, postage prepaid mail or other similar means
and shall be effective upon actual receipt by the party to which such notice
shall be directed, addressed as follows (or to such other address as the party
entitled to notice shall hereafter designate in accordance with the terms
hereof):

 

if
to the Fund:

 

ML
TRANSTREND DTP ENHANCED FUTURES ACCESS, LLC

ML
TRANSTREND DTP ENHANCED FUTURES ACCESS LTD.

c/o
Merrill Lynch Alternative Investments LLC

Manager

Princeton
Corporate Campus

800
Scudders Mill Road

Section 2G

Plainsboro,
New Jersey 08536

Attn:
William Marr, Managing Director

E-mail:
william_marr@ml.com

 

if
to the Manager:

 

MERRILL
LYNCH ALTERNATIVE INVESTMENTS LLC

Princeton
Corporate Campus

800
Scudders Mill Road

Section 2G

Plainsboro,
New Jersey 08536

Attn:
William Marr, Managing Director

E mail: william_marr@ml.com

 

19

 

if
to the Trading Advisor:

 

TRANSTREND
B.V.

P.O. Box
444, 3000 AK Rotterdam

The
Netherlands

Attention:
Directors

Facsimile
Number: +31-10-4532750 

email:
mgt@transtrend.corn

 

17.           Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard
to principles of conflicts of law.

 

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

 

19.           Survival. The
provisions of this Agreement shall survive the termination hereof with respect
to any matter arising while this Agreement shall be in effect.

 

20.           Counterparts.
This Agreement may be executed in one or more counterparts, each of which
shall, however, together constitute one and the same document. Facsimile
signature pages shall have the same binding force and effect as original
copies.

 

21.           No Waiver.

 

(a)           No failure or delay
on the part of the Trading Advisor or the Manager in exercising any right,
power or remedy hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right, power or remedy preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy. Failure on the part of the Trading Advisor, the Fund or the Manager to
complain of any act of the other or to declare the other in default under this
Agreement, irrespective of how long such failure continues, shall not
constitute a waiver by the Trading Advisor, the Fund or the Manager of its
rights with respect to such default until the applicable statute-of-limitations
period has run.

 

(b)           Any waiver granted
hereunder must be in writing and shall be valid only in the specific instance
in which given.

 

20

 

22.           Rules of
Interpretation. In this Agreement, unless inconsistent with the context or
the contrary intention appears, a reference to:

 

(a)           “May” shall be construed as permissive;

 

(b)           A “notice” means
written notice unless otherwise stated;

 

(c)           “Shall” shall be
construed as imperative;

 

(d)           The singular
includes the plural and vice versa;

 

(e)           The masculine
includes the feminine and neuter respectively;

 

(f)            Writing includes
typewriting, printing, lithography, photography and other modes of representing
or reproducing words in a legible and non-transitory form;

 

(g)           Any reference to a
law, agreement or a document shall be deemed also to refer to any amendment,
supplement or replacement thereof;

 

(h)           Whenever this
Agreement refers to a number of days, such number shall refer to calendar days
unless such reference specifies Business Days;

 

(i)            The term “and/or”
is used herein to mean both “and” as well as “or.” The use of “and/or” in
certain contexts in no respects qualifies or modifies the use of the terms “and”
or “or” in others. “Or” shall not be interpreted to be exclusive, and “and”
shall not be interpreted to require the conjunctive — in each case, unless the
context otherwise requires;

 

(j)            The terms “include”
and “including” are to be construed as non-exclusive (so that, by way of
example and for the avoidance of doubt, “including” shall mean “including
without limitation”);

 

(k)           Whenever it is
provided or contemplated herein that the Manager is to determine or decide any
matter, the Manager (on its own behalf as well as on behalf of the Fund) shall
do so in its sole and absolute discretion, unless otherwise expressly provided
herein;

 

(l)            In addition to the
authority granted to the Manager pursuant to this Agreement, the Manager may,
but shall have no obligation to, take any action that the Manager deems
necessary or advisable to ensure that the Fund is not in violation of law or in
breach of any contractual provisions;

 

(m)          The table of contents
to and the headings in this Agreement are for convenience of reference only and
are to be ignored in construing this Agreement;

 

(n)           Any reference to “payable”
or “paid” or any derivative thereof shall mean credited to the deferred
compensation account, as the context may require;

 

21

 

(o)           No provision of this
Agreement shall be construed in favor of or against any person by reason of the
extent to which any such person, its Affiliates, or their respective employees
or counsel participated in the drafting thereof; and

 

(p)           In the event of any
inconsistency between the provisions of this Agreement and of the constituent
documents of the Fund, the provisions of this Agreement shall control.

 

23.           Binding Effect;
Benefit; Third-Party Beneficiary. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto, all persons indemnified
hereunder and their respective estates, permitted successors, transferees, custodians,
executors, administrators, legal representatives, heirs and permitted assigns.
The Trading Advisor Parties and the Merrill Lynch Parties shall be third party
beneficiaries of the provisions of Section 12.

 

22

 

24.           Confidentiality.

 

(a)           The parties hereto
each acknowledge that the business and assets of the Manager and the Fund and
of the Trading Advisor are confidential and involve a wide range of proprietary
information, including trade secrets and financial, legal or commercial
information (collectively, “Confidential Information”). For avoidance of doubt,
the Fund and the Manager explicitly confirm and agree that Confidential Information
with regard to the Trading Advisor shall include, without limitation, the
Trading Advisor’s (i) trading and risk models, techniques and procedures, (ii) past,
current or future trading or position data, (iii) price and research
software and databases and (iv) client lists.

 

(b)           Each party covenants
that it has and it shall at all times keep confidential and not, directly or
indirectly, disclose, divulge, furnish or make accessible to anyone, or use in
any manner that would be adverse to the interests of any other party, any
Confidential Information of another party to which such party has been or shall
become privy except with the prior written approval of such other party or
except for information that is otherwise publicly available (other than
information made publicly available by breach of this Agreement) or required to
be disclosed by law, the request of any court or other regulatory body or valid
legal process. For avoidance of doubt, in no event shall the Fund or the
Manager make available, directly or indirectly Confidential Information with
regard to the Trading Advisor to: (i) any third-party risk monitoring or
risk measurement service provider or to any Merrill Lynch internal risk
monitoring personnel other than the Manager’s risk monitoring personnel; (ii) any
investor in the Fund; (iii) Merrill Lynch or any its officers, directors,
employees, registered representatives or agents; or (iv) any Merrill Lynch
trading desk. Each party may, however, share certain Confidential Information
with such party’s accountants, attorneys, administrators and auditors (“Permitted
Confidants”); provided, however, that the Manager’s Permitted
Confidants and the Fund’s Permitted Confidants undertake to hold such
information strictly confidential to the same extent set forth herein, provided,
further, that the Manager shall take all such actions as are necessary
and appropriate to ensure that the Manager, the Fund, the Manager’s Permitted
Confidants and the Fund’s Permitted Confidants shall not in any manner or
respect, directly or indirectly, (A) use any of such Confidential Information
with regard to the Trading Advisor in trading for their own accounts, any
accounts of their Affiliates or any third party accounts (B) sell, license
or assign any of such Confidential Information with regard to the Trading
Advisor, (C) use such Confidential Information with regard to the Trading
Advisor to reverse engineer, attempt to reverse engineer or otherwise seek to
replicate the Trading Advisor’s trading in any manner or (D) otherwise use
such Confidential Information for their personal gain in any other manner.

 

(c)           Without regard to
whether all of the foregoing matters will be deemed confidential, material or
important, the parties hereto stipulate that as between them, the same are
confidential, material and important and gravely affect the effective and
successful conduct of their businesses and goodwill and that any breach of any
of the provisions of Section 24 of this Agreement will be a material
breach of this Agreement. In the event of a breach or threatened breach by a
party of any of the provisions of this Section 24, the parties hereto
acknowledge that in view of the unique nature of the services rendered by each
party and its clients and the fact that each party’s business heavily depends
upon maintaining the confidentiality of the Confidential Information, the
remedies of the non-breaching party at law for such breach will be

 

23

 

inadequate,
and the parties hereto agree that the non-breaching party shall be entitled,
without the necessity of proving irreparable damages, to obtain injunctive
relief, a decree of specific performance or other equitable relief restraining
the breaching party or parties, as applicable, from violating the provisions of
Section 24 of this Agreement. Nothing stated herein shall be construed as
prohibiting any party from pursuing any other remedies available to it for such
breach or threatened breach, including the recovery of damages.

 

(d)           The parties also
acknowledge and agree that, as a prerequisite to the Trading Advisor’s entering
orders for the Fund through any clearing broker which is an Affiliate of
Merrill Lynch, that the Trading Advisor will require that each Merrill Lynch
Affiliate which acts as a clearing broker for the Fund enter into a
confidentiality agreement with the Trading Advisor, in form and substance
acceptable to the Trading Advisor, and the Manager shall use its best efforts
to assist the Trading Advisor to facilitate the entering into of such
confidentiality agreement(s).

 

(e)           The provisions of
this Section 24 shall survive the termination of this Agreement.

 

25.           Advisers Act
Compliance. Any provisions of this Agreement which are construed to violate
the Advisers Act shall be deemed null and void ab
initio. For the avoidance of doubt, no provision of this Agreement
shall be deemed to constitute a waiver of any person’s rights or claims under
any federal or state securities laws.

 

24

 

IN
WITNESS WHEREOF, this Agreement has been executed for and on behalf of the
undersigned on the day and year first written above.

 

	
   

  	
  ML
  TRANSTREND DTP ENHANCED 

  FUTURESACCESSsm LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Merrill Lynch Alternative

  
	
   

  	
   

  	
  Investments, LLC, 

  
	
   

  	
   

  	
  Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  ML
  TRANSTREND DTP ENHANCED  

  FUTURESACCESSSM LTD.

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  MERRILL
  LYNCH ALTERNATIVE 

  INVESTMENTS LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  TRANSTREND
  B.V.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
					

 

25

 

APPENDIX A

COMMODITY INTERESTS TRADED BY

TRANSTREND B.V.

 

The
undersigned represents, as of the date indicated below, that the following is a
complete list of all commodity interests which the undersigned intends to trade
on behalf of ML TRANSTREND DTP ENHANCED FUTURESACCESSSM LLC/ML TRANSTREND DTP ENHANCED FUTURESACCESSSM LTD.:

 

	
  INTEREST
  RATES 

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  CBOT

  	
   

  	
  30-DAY
  FEDERAL FUNDS 

  US
  10-YR INTEREST SWAP 

  US
  10-YR T-NOTE

  
	
   

  	
   

  	
  US
  2-YR T-NOTE

  
	
   

  	
   

  	
  US
  30-YR T-BOND

  
	
   

  	
   

  	
  US
  5-YEAR INTEREST SWAP 

  US
  5-YR T-NOTE

  
	
  CME

  	
   

  	
  1-MNTH
  LIBOR

  
	
   

  	
   

  	
  EURODOLLAR

  
	
   

  	
   

  	
  EUROYEN
  (IMM)

  
	
  EUREX

  	
   

  	
  BOBL

  
	
   

  	
   

  	
  BUND

  
	
   

  	
   

  	
  EURO
  BUXL

  
	
   

  	
   

  	
  SCHATZ

  
	
   

  	
   

  	
  SWISS
  CONE. BOND

  
	
   

  	
   

  	
   

  
	
  LIFFE

  	
   

  	
  EURIBOR

  
	
   

  	
   

  	
  EURO
  10-YR SWAPNOTE

  
	
   

  	
   

  	
  EURO
  2-YR SWAPNOTE

  
	
   

  	
   

  	
  EURO
  5-YR SWAPNOTE

  
	
   

  	
   

  	
  EUROSWISS

  
	
   

  	
   

  	
  JAP.
  GVT. BOND (LIFFE)

  
	
   

  	
   

  	
  LONG
  GILT

  
	
   

  	
   

  	
  SHORT
  STERLING

  
	
  ME

  	
   

  	
  CAN.
  10-YR GVT. BOND

  
	
   

  	
   

  	
  CAN.
  BANK ACCEPT.

  
	
  SFE

  	
   

  	
  AUSSIE
  10-YR T-BOND

  
	
   

  	
   

  	
  AUSSIE
  3-YR T-BOND

  
	
   

  	
   

  	
  AUSSIE
  BANK BILL

  

 

A-1

 

	
   

  	
   

  	
  NZ
  BANK BILLS

  
	
  SGX

  	
   

  	
  EUROYEN
  (SGX)

  
	
   

  	
   

  	
  JAP.
  GVT. BOND (SGX/MINI)

  
	
  TIFFE

  	
   

  	
  EUROYEN
  (TIFFE)

  
	
  TSE

  	
   

  	
  JAP.
  GVT. BOND (TOKYO)

  
	
   

  	
   

  	
   

  
	
  STOCK INDICES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  BI

  	
   

  	
  MINI
  S&P/MIB

  
	
   

  	
   

  	
  S&P/M1B

  
	
  CBOE

  	
   

  	
  S&P
  500 VOLATILITY INDEX

  
	
  CBOT

  	
   

  	
  DOW
  JONES INDEX

  
	
   

  	
   

  	
  MINI
  DOW JONES INDEX

  
	
  CME

  	
   

  	
  E-MINI
  NASDAQ 100

  
	
   

  	
   

  	
  E-MINI
  RUSSELL 2000

  
	
   

  	
   

  	
  E-MINI
  S&P 400 MIDCAP

  
	
   

  	
   

  	
  F-MINI
  S&P 500

  
	
   

  	
   

  	
  NASDAQ
  100

  
	
   

  	
   

  	
  RUSSELL
  2000

  
	
   

  	
   

  	
  S&P
  400 MIDCAP

  
	
   

  	
   

  	
  S&P
  500

  
	
  EDX

  	
   

  	
  OMX
  (FUTURE)

  
	
  ENEXTA

  	
   

  	
  AEX
  INDEX

  
	
  ENEXTP

  	
   

  	
  CAC
  40

  
	
  EUREX

  	
   

  	
  DAX
  30

  
	
   

  	
   

  	
  DJ
  EURO STOXX 50

  
	
   

  	
   

  	
  DJ
  EURO STOXX BANKS INDEX

  
	
   

  	
   

  	
  DJ
  STOXX 50

  
	
   

  	
   

  	
  DJ
  STOXX600 BANKS INDEX

  
	
   

  	
   

  	
  MIDCAP
  DAX

  
	
  HKEX

  	
   

  	
  HANG
  SENG

  
	
   

  	
   

  	
  HANG
  SEND CHINA ENTERPRISES

  
	
  LIFFE

  	
   

  	
  FTSE
  100

  
	
   

  	
   

  	
  MSCI
  PAN-EURO INDEX

  
	
  ME

  	
   

  	
  S&P
  CANADA 60

  
	
  MEFF

  	
   

  	
  IBEX
  35+

  
	
  MEXDER

  	
   

  	
  MEXICAN
  PRICE & QUOTE INDEX

  
	
  NYBOT

  	
   

  	
  MINI
  RUSSELL 1000

  
	
   

  	
   

  	
  RUSSELL
  1000

  
	
  OSE

  	
   

  	
  NIKKEI
  225 (OSAKA)

  
	
  SAFEX

  	
   

  	
  FTSE/JSE
  TOP 40

  
	
  SFE

  	
   

  	
  SPI
  200

  
	
  SGX

  	
   

  	
  MSCI
  TAIWAN STOCK INDEX

  
	
   

  	
   

  	
  NIKKEI
  225 (SGX)

  
	
   

  	
   

  	
  S&P
  CNX NIFTY (SGXDT)

  
	
   

  	
   

  	
  SINGAPORE
  FREE INDEX

  
	
  TAIFEX

  	
   

  	
  TAIWAN
  ELECTRONIC INDEX

  

 

A-2

 

	
   

  	
   

  	
  TAIWAN
  FINANCE INDEX

  
	
   

  	
   

  	
  TAIWAN
  WEIGHTED INDEX 

  
	
  TSE

  	
   

  	
  TOPIX

  
	
   

  	
   

  	
   

  
	
  CURRENCIES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  CME

  	
   

  	
  AUSTRALIAN
  DOLLAR

  
	
   

  	
   

  	
  BRITISH
  POUND

  
	
   

  	
   

  	
  CANADIAN
  DOLLAR 

  EURO

  
	
   

  	
   

  	
  ISRAELI
  SHEKEL (1MM)

  
	
   

  	
   

  	
  JAPANESE
  YEN

  
	
   

  	
   

  	
  MEXICAN
  PESO

  
	
   

  	
   

  	
  POLISH
  ZLOTY (IMM)

  
	
   

  	
   

  	
  POLISH
  ZLOTY - EURO (IMM)

  
	
   

  	
   

  	
  RUSSIAN
  RUBLE (IMM)

  
	
   

  	
   

  	
  SWISS
  FRANC

  
	
  FINEX

  	
   

  	
  AUSSI
  - KIWI (FINEX)

  
	
   

  	
   

  	
  AUSSI
  - YEN (FINEX)

  
	
   

  	
   

  	
  EURO
  - AUSSI (FINEX)

  
	
   

  	
   

  	
  EURO
  - CZECH KORUNA (FINEX)

  
	
   

  	
   

  	
  EURO
  - HUNGAR. FORINT (FINEX)

  
	
   

  	
   

  	
  EURO
  - NORWEGIAN KRONE (FINEX)

  
	
   

  	
   

  	
  EURO
  - STERLING (FINEX)

  
	
   

  	
   

  	
  EURO
  - SWEDISH KRONA (FINEX)

  
	
   

  	
   

  	
  EURO
  - SWISS FRANC (FINEX)

  
	
   

  	
   

  	
  EURO
  - YEN (FINEX)

  
	
   

  	
   

  	
  KIWI
  DOLLAR (FINEX)

  
	
   

  	
   

  	
  NORWEGIAN
  - SWEDISH (FINEX)

  
	
   

  	
   

  	
  STERLING
  - SWISS (FINEX)

  
	
   

  	
   

  	
  STERLING
  - YEN (FINEX)

  
	
   

  	
   

  	
  SWISS
  - YEN (FINEX)

  
	
   

  	
   

  	
  US
  DOLLAR INDEX

  
	
   

  	
   

  	
  USD
  - CZECH KORUNA (FINEX)

  
	
   

  	
   

  	
  USD
  HUNGARIAN FORINT (FINEX)

  
	
   

  	
   

  	
  USD
  - NORWEGIAN KRONE (FINEX)

  
	
   

  	
   

  	
  USD
  - RAND (FINEX)

  
	
   

  	
   

  	
  USD
  - SWEDISH KRONA (FINEX)

  
	
  KOFEX

  	
   

  	
  USD
  - KOREAN WON

  
	
  OTC

  	
   

  	
  EURO
  - HONG KONG DOLLAR (FWD)

  
	
   

  	
   

  	
  EURO
  - NEW TURKISH LIRA (FWD)

  
	
   

  	
   

  	
  EURO-
  SLOVAK KORUNA (FWD)

  
	
   

  	
   

  	
  USD
  - BRAZILIAN REAL (FWD)

  
	
   

  	
   

  	
  USD
  - CHILEAN PESO (FWD)

  
	
   

  	
   

  	
  USD
  - INDIAN RUPEE (FWD)

  
	
   

  	
   

  	
  USD
  - ISRAELI SHEKEL (FWD)

  
	
   

  	
   

  	
  USD
  - NEW TURKISH LIRA (FWD)

  

 

A-3

 

	
   

  	
   

  	
  USD
  - SINGAPORE DOLLAR (FWD)

  
	
   

  	
   

  	
  USD
  - SLOVAK KORUNA (FWD)

  
	
   

  	
   

  	
  USD
  - TAIWANESE DOLLAR (FWD)

  
	
  TURKDEX

  	
   

  	
  USD/TRY

  
	
   

  	
   

  	
   

  
	
  METALS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  CBOT

  	
   

  	
  GOLD
  CBOT

  
	
   

  	
   

  	
  SILVER
  CBOT

  
	
  COMEX

  	
   

  	
  GOLD

  
	
   

  	
   

  	
  HIGH
  GRADE COPPER

  
	
   

  	
   

  	
  SILVER

  
	
  LME

  	
   

  	
  ALUMINIUM

  
	
   

  	
   

  	
  COPPER

  
	
   

  	
   

  	
  LEAD

  
	
   

  	
   

  	
  NICKEL

  
	
   

  	
   

  	
  TIN

  
	
   

  	
   

  	
  ZINC

  
	
  NYMEX

  	
   

  	
  PALLADIUM

  
	
   

  	
   

  	
  PLATINUM

  
	
  TOCOM

  	
   

  	
  ALUMINIUM
  (TOKYO)

  
	
   

  	
   

  	
  GOLD
  (TOKYO)

  
	
   

  	
   

  	
  PALLADIUM
  (TOKYO)

  
	
   

  	
   

  	
  PLATINUM
  (TOKYO)

  
	
   

  	
   

  	
  SILVER
  (TOKYO)

  
	
   

  	
   

  	
   

  
	
  ENERGIES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  CCX

  	
   

  	
  GASOLINE
  (CHUBU)

  
	
   

  	
   

  	
  KEROSENE
  (CHUBU)

  
	
  CME

  	
   

  	
  GS
  COMMODITY INDEX

  
	
   

  	
   

  	
   

  
	
  ICE

  	
   

  	
  BRENT

  
	
   

  	
   

  	
  CARBON
  EMISSION

  
	
   

  	
   

  	
  GASOI
  L

  
	
  NYMEX

  	
   

  	
  CRUDE
  OIL

  
	
   

  	
   

  	
  HEATING
  OIL

  
	
   

  	
   

  	
  NATURAL
  GAS

  
	
   

  	
   

  	
  NY
  HARBOR RBOB GASOLINE

  
	
  TOCOM

  	
   

  	
  CRUDE
  OIL (TOKYO)

  
	
   

  	
   

  	
  GASOLINE
  (TOKYO)

  
	
   

  	
   

  	
  KEROSENE
  (TOKYO)

  
	
   

  	
   

  	
   

  
	
  AGRICULTURALS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  BUMA

  	
   

  	
  CRUDE
  PALM OIL

  
	
  CBOT

  	
   

  	
  CORN

  
	
   

  	
   

  	
  OATS

  

 

A-4

 

	
   

  	
   

  	
  ROUGH
  RICE

  
	
   

  	
   

  	
  SOYBEAN
  MEAL

  
	
   

  	
   

  	
  SOYBEAN
  OIL

  
	
   

  	
   

  	
  SOYBEANS

  
	
   

  	
   

  	
  WHEAT

  
	
  CCX

  	
   

  	
  RSS3
  RUBBER (OSAKA)

  
	
   

  	
   

  	
  RUBBER
  INDEX (OSAKA)

  
	
  CME

  	
   

  	
  FEEDER
  CATTLE

  
	
   

  	
   

  	
  FLUID
  MILK

  
	
   

  	
   

  	
  LEAN
  HOGS

  
	
   

  	
   

  	
  LIVE
  CATTLE

  
	
   

  	
   

  	
  LUMBER

  
	
   

  	
   

  	
  PORK
  BELLIES

  
	
  ENEXTP

  	
   

  	
  EUROPEAN
  RAPESEED

  
	
   

  	
   

  	
  MILLING
  WHEAT NO.2

  
	
  KCBT

  	
   

  	
  KANSAS
  CITY WHEAT

  
	
  LIFFE

  	
   

  	
  COCOA
  (LONDON)

  
	
   

  	
   

  	
  ROBUSTA
  COFFEE

  
	
   

  	
   

  	
  WHITE
  SUGAR NO.5

  
	
  MGE

  	
   

  	
  MINNEAPOLIS
  WHEAT

  
	
  NYBOT

  	
   

  	
  ARABICA
  COFFEE

  
	
   

  	
   

  	
  COCOA

  
	
   

  	
   

  	
  COTTON

  
	
   

  	
   

  	
  ORANGE
  JUICE

  
	
   

  	
   

  	
  WORLD
  SUGAR NO.11

  
	
  SAFEX

  	
   

  	
  SUNFLOWER
  SEED (JOHANNESBURG)

  
	
   

  	
   

  	
  WHEAT
  (JOHANNESBURG)

  
	
   

  	
   

  	
  WHITE
  MAIZE

  
	
   

  	
   

  	
  YELLOW
  MAIZE

  
	
  TGE

  	
   

  	
  ARABICA
  COFFEE (TOKYO)

  
	
   

  	
   

  	
  AZUKI/RED
  BEANS (TOKYO)

  
	
   

  	
   

  	
  CORN
  (TOKYO)

  
	
   

  	
   

  	
  NON-GMO
  US SOYBEANS (TOKYO)

  
	
   

  	
   

  	
  RAW
  SUGAR (TOKYO)

  
	
   

  	
   

  	
  US
  SOYBEANS (TOKYO)

  
	
  TOCOM

  	
   

  	
  RUBBER
  (TOKYO)

  
	
  WCE

  	
   

  	
  RAPESEED/CANOLA

  

 

The
Trading Advisor may trade additional commodity interests for the account of the
Fund by notifying the Manager in writing of the name of such additional
commodity interest and the exchange on which it is traded, provided that the
Manager does not notify the Trading Advisor within five (5) business days
of the Trading Advisor’s having so notified the Manager that the Manager
objects to the Trading Advisor trading such commodity interest for the Fund.

 

A-5

 

	
   

  	
  TRANSTREND
  B.V.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  

 

Dated
as of March 20, 2007.

 

A-6

 

APPENDIX B

 

COMMODITY TRADING AUTHORITY

 

TRANSTREND
B.V.

P.O. Box
444, 3000 AK Rotterdam

The
Netherlands

Attn:
Managing Directors

 

Dear
Advisor:

 

ML
TRANSTREND DTP ENHANCED FUTURESACCESSsm LLC/ML
TRANSTREND DTP ENHANCED FUTURESACCESSsm LTD. (collectively, the “Fund”) does
hereby make, constitute and appoint you as its attorney-in-fact to buy and sell
commodity futures and forward contracts (including foreign futures and options
contracts) in accordance with the ML FuturesAccesssm Advisory Agreement among us and certain
others.

 

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ML
  TRANSTREND DTP ENHANCED

  
	
   

  	
  FUTURESACCESSsm LLC

  
	
   

  	
   

  
	
   

  	
  ML
  TRANSTREND DTP ENHANCED

  
	
   

  	
  FUTURESACCESSsm LTD.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Merrill
  Lynch Alternative Investments LLC,

  
	
   

  	
   

  	
  Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
				

 

Dated
as of March 20, 2007.Exhibit 10.1

 

FIRST CENTURY BANCORP.

AMENDED AND RESTATED

2003 STOCK INCENTIVE PLAN

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  
	
  SECTION 1 

  	
  DEFINITIONS

  	
  1

  
	
  1.1

  	
  Definitions

  	
  1

  
	
  SECTION 2 

  	
  THE STOCK INCENTIVE PLAN

  	
  4

  
	
  2.1

  	
  Purpose of the Plan

  	
  4

  
	
  2.2

  	
  Stock Subject to the Plan

  	
  4

  
	
  2.3

  	
  Administration of the Plan

  	
  5

  
	
  2.4

  	
  Eligibility and Limits

  	
  5

  
	
  SECTION 3 

  	
  TERMS OF STOCK INCENTIVES

  	
  6

  
	
  3.1

  	
  General Terms and Conditions

  	
  6

  
	
  3.2

  	
  Terms and Conditions of
  Options

  	
  6

  
	
   

  	
  (a)

  	
  Option Price

  	
  7

  
	
   

  	
  (b)

  	
  Option Term

  	
  7

  
	
   

  	
  (c)

  	
  Payment

  	
  7

  
	
   

  	
  (d)

  	
  Conditions
  to the Exercise of an Option

  	
  7

  
	
   

  	
  (e)

  	
  Termination
  of Incentive Stock Option Status

  	
  8

  
	
   

  	
  (f)

  	
  Special
  Provisions for Certain Substitute Options

  	
  8

  
	
  3.3

  	
  Treatment of Awards Upon
  Termination of Service

  	
  8

  
	
  SECTION 4 

  	
  RESTRICTIONS ON STOCK

  	
  8

  
	
  4.1

  	
  Escrow of Shares

  	
  8

  
	
  4.2

  	
  Restrictions on Transfer

  	
  9

  
	
  SECTION 5 

  	
  GENERAL PROVISIONS

  	
  9

  
	
  5.1

  	
  Withholding

  	
  9

  
	
  5.2

  	
  Changes in Capitalization;
  Merger; Liquidation

  	
  9

  
	
  5.3

  	
  Cash Awards

  	
  10

  
	
  5.4

  	
  Compliance with Code

  	
  10

  
	
  5.5

  	
  Right to Terminate Service

  	
  11

  
	
  5.6

  	
  Restrictions on Delivery and
  Sale of Shares; Legends

  	
  11

  
	
  5.7

  	
  Non-Alienation of Benefits

  	
  11

  
	
  5.8

  	
  Termination and Amendment of
  the Plan

  	
  11

  
	
  5.9

  	
  Stockholder Approval

  	
  11

  
	
  5.10

  	
  Choice of Law

  	
  11

  
	
  5.11

  	
  Effective Date of the Plan

  	
  11

  
							

 

 

FIRST CENTURY BANCORP.

AMENDED AND RESTATED

2003 STOCK INCENTIVE PLAN

 

SECTION 1  DEFINITIONS

 

1.1           Definitions.  Whenever used herein, the masculine pronoun
shall be deemed to include the feminine, and the singular to include the
plural, unless the context clearly indicates otherwise, and the following capitalized
words and phrases are used herein with the meaning thereafter ascribed:

 

(a)           “Affiliate”
means

 

(1)           any Subsidiary or
Parent;

 

(2)           an
entity that directly or through one or more intermediaries controls, is
controlled by, or is under common control with the Company, as determined by
the Company; or

 

(3)           any
entity in which the Company has such a significant interest that the Company
determines it should be deemed an “Affiliate,” as determined in the sole
discretion of the Company.

 

(b)           “Bank” means The
National Bank of Gainesville.

 

(c)           “Board
of Directors” means the board of directors of the Company.

 

(d)           “Cause”
has the same meaning as provided in the employment agreement between the
Participant and the Company or Affiliate(s) on the date of Termination of
Service, or if no such definition or employment agreement exists, “Cause” means
conduct amounting to (1) fraud or dishonesty against the Company or
Affiliate(s); (2) Participant’s willful misconduct, repeated refusal to
follow the reasonable directions of the Board of Directors or knowing violation
of law in the course of performance of the duties of Participant’s service with
the Company or Affiliate(s); (3) repeated absences from work without a
reasonable excuse; (4) repeated intoxication with alcohol or drugs while
on the Company’s or Affiliate(s)’ premises during regular business hours; (5) a
conviction or plea of guilty or nolo contendere
to a felony or a crime involving dishonesty; or (6) a breach or violation
of the terms of any agreement to which Participant and the Company or Affiliate(s) are
party.

 

(e)           “Change
in Control” has the same meaning as provided in the employment agreement
between the Participant and the Company or Affiliate(s), or if no such
definition or employment agreement exists, “Change in Control shall mean any
one of the following events which may occur after the date the Stock Incentive
is granted:

 

(1)           the
acquisition by any individual, entity or “group,” within the meaning of Section 13(d)(3) or
Section 14(d)(2) of the Securities Exchange Act of 1934, as amended,
(a “Person”) of beneficial ownership (within the meaning of Rule 13-d-3
promulgated under the Securities Exchange Act of 1934) of voting securities of
the Company or the Bank where such acquisition

 

1

 

causes any such Person to own fifty percent (50%) or more of the
combined voting power of the then outstanding voting securities entitled to
vote generally in the election of directors;

 

(2)           within
any twelve-month period, the persons who were directors of the Company or the
Bank immediately before the beginning of such twelve-month period (the “Incumbent
Directors”) shall cease to constitute at least a majority of the Board of
Directors of the Company or the Bank; provided that any director who was not a
director as of the beginning of such twelve-month period shall be deemed to be
an Incumbent Director if that director were elected to the Board of Directors
of the Company or the Bank by, or on the recommendation of or with the approval
of, at least two-thirds of the directors who then qualified as Incumbent
Directors; and provided further that no director whose initial assumption of
office is in connection with an actual or threatened election contest relating
to the election of directors shall be deemed to be an Incumbent Director;

 

(3)           a
reorganization, merger or consolidation, with respect to which persons who were
the stockholders of the Company or the Bank immediately prior to such
reorganization, merger or consolidation do not, immediately thereafter, own
more than fifty percent (50%) of the combined voting power entitled to vote in
the election of directors of the reorganized, merged or consolidated company’s
then outstanding voting securities; or

 

(4)           the
sale, transfer or assignment of all or substantially all of the assets of the
Company or the Bank to any third party.

 

(f)            “Code” means
the Internal Revenue Code of 1986, as amended.

 

(g)           “Committee”
means the committee appointed by the Board of Directors to administer the Plan
pursuant to Plan Section 2.3.  If
the Committee has not been appointed, the Board of Directors in its entirety
shall constitute the Committee.

 

(h)           “Company”
means First Century Bancorp.

 

(i)            “Disability”
has the same meaning as provided in the long-term disability plan or policy
maintained or, if applicable, most recently maintained, by the Company or an
Affiliate for the Participant.  If no
long-term disability plan or policy was ever maintained on behalf of the
Participant or, if the determination of Disability relates to an Incentive
Stock Option, Disability shall mean that condition described in Code Section 22(e)(3),
as amended from time to time.  In the
event of a dispute, the determination of Disability shall be made by the Board
of Directors and shall be supported by advice of a physician competent in the
area to which such Disability relates.

 

(j)            “Disposition”
means any conveyance, sale, transfer, assignment, pledge or hypothecation,
whether outright or as security, inter vivos or testamentary, with or without
consideration, voluntary or involuntary.

 

(k)           “Exchange
Act” means the Securities Exchange Act of 1934, as amended.

 

2

 

(l)            “Fair
Market Value” with regard to a date means:

 

(1)           if
the Stock is then readily tradable on an established securities market (as
defined in Section 1.897-1(m) of the Treasury Regulations), the
closing sales price of the Stock on the trading day immediately preceding such
date on the securities exchange having the greatest volume of trading in the
Stock during the thirty (30) day period preceding the day the value is to be
determined or, if such exchange was not open for trading on such date, the next
preceding date on which it was open; or

 

(2)           if
the Stock is not then readily tradable on an established securities market (as
defined in Section 1.897-1(m) of the Treasury Regulations), then (A) with
respect to the grant of a Nonqualified Stock Option, as of any date, the fair
market value of a share of Stock determined by the Committee by the reasonable
application of a reasonable valuation method in compliance with Section 409A
of the Code and Section 1.409A-1(b)(5)(iv) of the Treasury
Regulations; and (B) with respect to the grant of an Incentive Stock
Option, the fair market value of a share of Stock determined in good faith by
the Committee in any reasonable manner, in compliance with Section 422 of
the Code and Section 1.422-2(e) of the Treasury Regulations.

 

(m)          “Incentive
Stock Option” means an incentive stock option, as defined in Code Section 422,
described in Plan Section 3.2.

 

(n)           “Nonqualified
Stock Option” means a stock option, other than an option qualifying as an
Incentive Stock Option, described in Plan Section 3.2.

 

(o)           “Option”
means a Nonqualified Stock Option or an Incentive Stock Option.

 

(p)           “Over
10% Owner” means an individual who at the time an Incentive Stock Option is
granted owns Stock possessing more than ten percent (10%) of the total combined
voting power of the Company or one of its Parents or Subsidiaries, determined
by applying the attribution rules of Code Section 424(d).

 

(q)           “Parent”
means any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company if, with respect to Incentive Stock Options,
at the time of granting of the Incentive Stock Option, each of the corporations
other than the Company owns stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
corporations in the chain.

 

(r)            “Participant”
means an individual who receives a Stock Incentive hereunder.

 

(s)           “Plan”
means the First Century Bancorp. Amended and Restated 2003 Stock Incentive
Plan.

 

(t)            “Stock”
means the Company’s no par value common stock.

 

3

 

(u)           “Stock
Incentive Agreement” means an agreement between the Company and a
Participant or other documentation evidencing an award of a Stock Incentive.

 

(v)           “Stock
Incentive” means, collectively, Incentive Stock Options and Nonqualified
Stock Options.

 

(w)          “Subsidiary”
means any corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company if, with respect to Incentive Stock
Options, at the time of the granting of the Incentive Stock Option, each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing fifty percent (50%) or more of the total combined voting power of
all classes of stock in one of the other corporations in the chain.  A “Subsidiary” shall include any entity other
than a corporation to the extent permissible under Section 424(f) of
the Code or the Treasury Regulations or rulings thereunder.

 

(x)            “Termination
of Service” means the termination of the service relationship, whether employment
or otherwise, between a Participant and the Company and any Affiliates,
regardless of the fact that severance or similar payments are made to the
Participant for any reason, including, but not by way of limitation, a
termination by resignation, discharge, death, Disability or retirement.  The Committee shall, in its absolute
discretion, determine the effect of all matters and questions relating to a
Termination of Service, including, but not by way of limitation, the question
of whether a leave of absence constitutes a Termination of Service, or whether
a Termination of Service is for Cause.

 

(y)           “Treasury
Regulations” means regulations promulgated by the United States Department of
Treasury pursuant to the Code, as amended, including proposed or temporary
regulations as applicable.

 

SECTION 2  THE STOCK INCENTIVE PLAN

 

2.1           Purpose
of the Plan.  The Plan is intended to
(a) provide incentives to officers, employees and directors of the Company
and its Affiliates to stimulate their efforts toward the continued success of
the Company and to operate and manage the business in a manner that will
provide for the long-term growth and profitability of the Company; (b) encourage
stock ownership by officers, employees and directors by providing them with a
means to acquire a proprietary interest in the Company by acquiring shares of
Stock; and (c) provide a means of obtaining and rewarding key personnel.

 

2.2           Stock
Subject to the Plan.  Subject to
adjustment in accordance with Section 5.2, 750,000 shares of Stock (the “Maximum
Plan Shares”) are hereby reserved exclusively for issuance upon exercise or
payment pursuant to Stock Incentives.  At
such times as the Company is subject to Section 16 of the Exchange Act, at
no time shall the Company have outstanding Stock Incentives subject to Section 16
of the Exchange Act and shares of Stock issued in respect of Stock Incentives
in excess of the Maximum Plan Shares. 
The shares of Stock attributable to the nonvested, unpaid, unexercised,
unconverted or otherwise unsettled portion of any Stock Incentive that is
forfeited or cancelled or expires or terminates for any reason without becoming
vested, paid, exercised, converted or otherwise settled in full will again be
available for purposes of the Plan.

 

4

 

2.3           Administration
of the Plan.  The Plan shall be
administered by the Committee.   The
Committee shall consist of at least two members of the Board of Directors.  During those periods that the Company is
subject to the provisions of Section 16 of the Exchange Act, the Board of
Directors shall consider whether each Committee member should qualify as an “outside
director” as defined in Section 1.162-27(e) of the Treasury
Regulations and a “non-employee director” as defined in Rule 16b(3)(b)(3) as
promulgated under the Exchange Act.  The
Committee shall have full authority in its discretion to determine the
officers, employees and directors of the Company or its Affiliates to whom
Stock Incentives shall be granted and the terms and provisions of Stock
Incentives subject to the Plan.  Subject
to the provisions of the Plan, the Committee shall have full and conclusive
authority to interpret the Plan; to prescribe, amend and rescind rules and
regulations relating to the Plan; to determine the terms and provisions of the
respective Stock Incentive Agreements and to make all other determinations
necessary or advisable for the proper administration of the Plan.  The Committee’s determinations under the Plan
need not be uniform and may be made by it selectively among persons who
receive, or are eligible to receive, awards under the Plan (whether or not such
persons are similarly situated).  The
Committee’s decisions shall be final and binding on all Participants.  Each member of the Committee shall serve at
the discretion of the Board of Directors and the Board of Directors may from
time to time remove members from or add members to the Committee.  Vacancies on the Committee shall be filled by
the Board of Directors.

 

The Committee shall select one of its members as chairman and shall
hold meetings at the times and in the places as it may deem advisable.  Acts approved by a majority of the Committee
in a meeting at which a quorum is present, or acts reduced to or approved in
writing by a majority of the members of the Committee, shall be the valid acts
of the Committee.

 

2.4           Eligibility and
Limits.  Stock Incentives may be
granted only to officers, employees and directors of the Company or any
Affiliate; provided, however, that an Incentive Stock Option may only be
granted to an employee of the Company or any Subsidiary.  In the case of Incentive Stock Options, the
aggregate Fair Market Value (determined as of the date an Incentive Stock
Option is granted) of stock with respect to which stock options intended to
meet the requirements of Code Section 422 become exercisable for the first
time by an individual during any calendar year under all plans of the Company
and its Parents and Subsidiaries shall not exceed $100,000; provided further,
that if the limitation is exceeded, the Incentive Stock Option(s) which
cause the limitation to be exceeded shall be treated as Nonqualified Stock
Option(s).   During such periods as
required by Code Section 162(m) of the Code and the regulations
thereunder for compensation to be treated as qualified performance-based
compensation, the maximum number of shares of Stock with respect to which
Options may be granted during any calendar year to an employee may not exceed
25,000, subject to adjustment in accordance with Section 5.2.  If, after grant, the exercise price of an
Option is reduced, the transaction shall be treated as the cancellation of the
Option and the grant of a new Option.  If
an Option is deemed to be cancelled as described in the preceding sentence, the
Option that is deemed to be cancelled and the Option that is deemed to be
granted shall both be counted against the Maximum Plan Shares and the maximum
number of shares for which Options may be granted to an employee during any
calendar year.

 

5

 

SECTION 3  TERMS
OF STOCK INCENTIVES

 

3.1           General
Terms and Conditions.

 

(a)           The number of shares of Stock 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 2.2, as to
the total number of shares available for grants under the Plan.  If a Stock Incentive Agreement so provides, a
Participant may be granted a new Option to purchase a number of shares of Stock
equal to the number of previously owned shares of Stock tendered in payment of
the Exercise Price (as defined below) for each share of Stock purchased
pursuant to the terms of the Stock Incentive Agreement.

 

(b)           Each Stock Incentive shall be
evidenced by a Stock Incentive Agreement in such form and containing such
terms, conditions and restrictions as the Committee may determine is
appropriate.  Each Stock Incentive
Agreement shall be subject to the terms of the Plan and any provision in a
Stock Incentive Agreement  that is
inconsistent with the Plan shall be null and void.

 

(c)           The date a Stock Incentive is granted
shall be the date on which the Committee has approved the terms of, and
satisfaction of any conditions applicable to, the grant of the Stock Incentive
and has determined the recipient of the Stock Incentive and the number of
shares covered by the Stock Incentive and has taken all such other action
necessary to complete the grant of the Stock Incentive.

 

(d)           The Committee may provide in any
Stock Incentive Agreement (or subsequent to the award of a Stock Incentive but
prior to its expiration or cancellation, as the case may be) that, in the event
of a Change in Control, the Stock Incentive shall or may be cashed out on the
basis of any price not greater than the price per share of Stock received or to
be received by other stockholders of the Company in the Change of Control
transaction, as determined by the Committee, or, if the Committee in its sole
discretion deems it to be appropriate, the Fair Market Value of a share of
Stock as of the date of the Change of Control; provided, however, that, in the
case of Incentive Stock Options, then unless the Committee determines
otherwise, the price will be based only on the Fair Market Value of the Stock
on the date on which the Incentive Stock Options are cashed out (the “Change in
Control Price”).  For purposes of this
Subsection, any Option shall be cashed out on the basis of the excess, if any,
of the Change in Control Price over the Exercise Price to the extent the Option
is then exercisable in accordance with the terms of the Option and the Plan.

 

(e)           Stock Incentives shall not be
transferable or assignable except by will or by the laws of descent and
distribution and shall be exercisable, during the Participant’s lifetime, only
by the Participant; in the event of the Disability of the Participant, by the
legal representative of the Participant; or in the event of the death of the
Participant, by the personal representative of the Participant’s estate or if
no personal representative has been appointed, by the successor in interest
determined under the Participant’s will.

 

3.2           Terms and
Conditions of Options.  Each Option
granted under the Plan shall be evidenced by a Stock Incentive Agreement.  At the time any Option is granted, the
Committee shall determine whether the Option is to be an Incentive Stock Option
or a Nonqualified Stock Option, and the Option shall be clearly identified as
to its status as an Incentive Stock Option or a Nonqualified Stock Option.  At the time any 

 

6

 

Incentive Stock Option is exercised, the Company shall be entitled to
place a legend on the certificates representing the shares of Stock purchased
pursuant to the Option to clearly identify them as shares of Stock purchased
upon exercise of an Incentive Stock Option. 
An Incentive Stock Option may only be granted within ten (10) years
from the earlier of the date the Plan is adopted by the Board of Directors or
approved by the Company’s stockholders. 
All Options shall provide that the primary federal regulator of the
Company or the Bank may require a Participant to exercise an Option in whole or
in part if the capital of the Company or the Bank falls below minimum
requirements and shall further provide that, if the Participant fails to so
exercise any such portion of the Option, that portion of the Option shall be
forfeited.

 

(a)           Option Price.   Subject to adjustment in accordance with Section 5.2
and the other provisions of this Section 3.2, the exercise price (the “Exercise
Price”) per share of Stock purchasable under any Option shall be as set forth
in the applicable Stock Incentive Agreement. 
With respect to each grant of an Incentive Stock Option to a Participant
who is not an Over 10% Owner, the Exercise Price per share shall not be less
than the Fair Market Value on the date the Option is granted.  With respect to each grant of an Incentive
Stock Option to a Participant who is an Over 10% Owner, the Exercise Price
shall not be less than 110% of the Fair Market Value on the date the Option is
granted.  With respect to each grant of a
Nonqualified Stock Option, the Exercise Price per share shall be no less than
the Fair Market Value.

 

(b)           Option Term.  The term of an Option shall be as specified
in the applicable Stock Incentive Agreement; provided, however that any Option
granted to a Participant shall not be exercisable after the expiration of ten (10) years
after the date the Option is granted and any Incentive Stock Option granted to
an Over 10% Owner shall not be exercisable after the expiration of five (5) years
after the date the Option is granted.

 

(c)           Payment.  Payment for all shares of Stock purchased
pursuant to the exercise of an Option shall be made in cash or, if the Stock
Incentive Agreement provides, in a cashless exercise through a broker.   In its discretion, the Committee also may
authorize (at the time an Option is granted or thereafter) Company financing to
assist the Participant as to payment of the Exercise Price on such terms as may
be offered by the Committee in its discretion. 
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 stockholder.

 

(d)           Conditions to the Exercise of an
Option.  Each Option granted under
the Plan shall be exercisable by the Participant or any other designated
person, at such time or times, or upon the occurrence of such event or events,
and in such amounts, as the Committee shall specify in the Stock Incentive
Agreement; provided, however, that subsequent to the grant of an Option, the
Committee, at any time before complete termination of such Option, may
accelerate the time or times at which such Option may be exercised in whole or
in part, including, without limitation, upon a Change in Control and may permit
the Participant or any other designated person to exercise the Option, or any
portion thereof, for all or part of the remaining Option term notwithstanding
any provision of the Stock Incentive Agreement to the contrary.  Notwithstanding the foregoing, no Option
granted prior to the third anniversary of the date the Bank opens for business
shall contain provisions which allow the 

 

7

 

Option to become vested and exercisable at a rate faster than in equal
one-third increments commencing with the first anniversary of the Option’s
grant date.

 

(e)           Termination of Incentive Stock
Option Status.  With respect to an
Incentive Stock Option, in the event of the Termination of Service of a
Participant, the Option or portion thereof held by the Participant which is
unexercised shall expire, terminate and become unexercisable no later than
three (3) months after the date of termination of employment; provided,
however, that in the case of a holder whose termination of employment is due to
death or Disability, up to one (1) year may be substituted for such three (3) month
period.  For purposes of this Subsection
(e), Termination of Service of the Participant shall not be deemed to have
occurred if the Participant is employed by another corporation (or a parent or
subsidiary corporation of such other corporation) which has assumed the
Incentive Stock Option of the Participant in a transaction to which Code Section 424(a) is
applicable.

 

(f)            Special Provisions for Certain
Substitute Options.  Notwithstanding
anything to the contrary in this Section 3.2, any Option issued in
substitution for an option previously issued by another entity, which
substitution occurs in connection with a transaction to which Code Section 424(a) (with
respect to Incentive Stock Options) or Section 1.409A-1(b)(v)(D) of
the Treasury Regulations (with respect to Nonqualified Stock Options) is
applicable, may provide for an exercise price computed in accordance with such
Code and Treasury Regulation provisions and may contain such other terms and
conditions as the Committee may prescribe to cause such substitute Option to
contain as nearly as possible the same terms and conditions (including the
applicable vesting and termination provisions) as those contained in the
previously issued option being replaced thereby.

 

3.3           Treatment of Awards Upon Termination of Service.  Except as otherwise provided by Plan Section 3.2(e),
any award under this Plan to a Participant who suffers a Termination of Service
may be cancelled, accelerated, paid or continued, as provided in the Stock
Incentive Agreement or, in the absence of such provision, as the Committee may
determine.  The portion of any award
exercisable in the event of continuation or the amount of any payment due under
a continued award may be adjusted by the Committee to reflect the Participant’s
period of service from the date of grant through the date of the Participant’s
Termination of Service or such other factors as the Committee determines are
relevant to its decision to continue the award.

 

SECTION 4  RESTRICTIONS ON STOCK

 

4.1           Escrow of
Shares.  Any certificates representing
the shares of Stock issued under the Plan shall be issued in the Participant’s
name, but, if the Stock Incentive Agreement so provides, the shares of Stock
shall be held by a custodian designated by the Committee (the “Custodian”).  Each applicable Stock Incentive Agreement
providing for transfer of shares of Stock to the Custodian shall appoint the
Custodian as the attorney-in-fact for the Participant for the term specified in
the applicable Stock Incentive Agreement, with full power and authority in the
Participant’s name, place and stead to transfer, assign and convey to the
Company any shares of Stock held by the Custodian for such Participant, if the
Participant forfeits the shares under the terms of the applicable Stock
Incentive Agreement.  During the period
that the Custodian holds the shares subject to this Section, the Participant
shall be entitled to all rights, except as provided in the applicable Stock
Incentive Agreement, applicable to shares of Stock not so held.  Any dividends declared on shares of Stock
held by the Custodian shall, as the Committee may provide in the applicable
Stock Incentive Agreement, be paid 

 

8

 

directly to the Participant or, in the alternative, be retained by the
Custodian until the expiration of the term specified in the applicable Stock
Incentive Agreement and shall then be delivered, together with any proceeds,
with the shares of Stock to the Participant or to the Company, as applicable.

 

4.2           Restrictions on
Transfer.  The Participant shall not
have the right to make or permit to exist any Disposition of the shares of
Stock issued pursuant to the Plan except as provided in the Plan or the
applicable Stock Incentive Agreement. 
Any Disposition of the shares of Stock issued under the Plan by the
Participant not made in accordance with the Plan or the applicable Stock
Incentive Agreement shall be void.  The
Company shall not recognize, or have the duty to recognize, any Disposition not
made in accordance with the Plan and the applicable Stock Incentive Agreement,
and the shares so transferred shall continue to be bound by the Plan and the
applicable Stock Incentive Agreement.

 

SECTION 5 
GENERAL PROVISIONS

 

5.1           Withholding.  The Company shall deduct from all cash distributions
under the Plan any taxes required to be withheld by federal, state or local
government.  Whenever the Company
proposes or is required to issue or transfer shares of Stock under the Plan,
the Company shall have the right to require the recipient to remit to the
Company an amount sufficient to satisfy any federal, state and local tax
withholding requirements prior to the delivery of any certificate or
certificates for such shares.  A
Participant may pay the withholding obligation in cash, by tendering shares of
Stock which have been owned by the holder for at least six (6) months
prior to the date of exercise or, if the applicable Stock Incentive Agreement
provides, a Participant may elect to have the number of shares of Stock he is
to receive reduced by the smallest number of whole shares of Stock which, when
multiplied by the Fair Market Value of the shares of Stock determined as of the
Tax Date (defined below), is sufficient to satisfy federal, state and local, if
any, withholding obligation arising from exercise or payment of a Stock
Incentive (a “Withholding Election”).  A
Participant may make a Withholding Election only if both of the following
conditions are met:

 

(a)           The Withholding Election must be made
on or prior to the date on which the amount of tax required to be withheld is
determined (the “Tax Date”) by executing and delivering to the Company a
properly completed notice of Withholding Election as prescribed by the
Committee; and

 

(b)           Any Withholding Election made will be
irrevocable; however, the Committee may, in its sole discretion, disapprove and
give no effect to the Withholding Election.

 

5.2           Changes in
Capitalization; Merger; Liquidation.

 

(a)           The number of shares of Stock
reserved for the grant of Options, the maximum number of shares of Stock for
which Options may be granted to any employee during any calendar year, the
number of shares of Stock reserved for issuance upon the exercise of each
outstanding Option, and the Exercise Price of each outstanding Option shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Stock resulting from a subdivision or combination of shares or the
payment of an ordinary stock dividend in shares of Stock to holders of
outstanding shares of Stock or any other increase or decrease in the number of
shares of Stock outstanding effected without receipt of consideration by the
Company.  Any such adjustments shall be
made in accordance with Section 1.424-1 

 

9

 

of the Treasury Regulations (with respect to Incentive Stock Options)
or Section 1.409A-1(b)(v) of the Treasury Regulations (with respect
to Nonqualified Stock Options).

 

(b)           In the event of any merger,
consolidation, reorganization, extraordinary dividend, spin-off, sale of
substantially all of the Company’s assets, other change in the capital
structure of the Company or its Stock (including any Change in Control) or
tender offer for shares of Stock, the Committee, in its sole discretion, may
make such adjustments with respect to awards and take such other action as it
deems necessary or appropriate to reflect or in anticipation of such merger,
consolidation, reorganization, extraordinary dividend, spin-off, sale of
substantially all of the Company’s assets, other change in capital structure or
tender offer, including, without limitation; the assumption of other awards,
the substitution of new awards, the adjustment of outstanding awards (with or
without the payment of any consideration), the acceleration of awards or the
removal of restrictions on outstanding awards, all as may be provided in the
applicable Stock Incentive Agreement or, if not expressly addressed therein, as
the Committee subsequently may determine in the event of any such merger,
consolidation, reorganization, extraordinary dividend, spin-off, sale of
substantially all of the Company’s assets, other change in the capital
structure of the Company or its Stock or tender offer for shares of Stock or
the termination of outstanding awards in exchange for the cash value, as
determined in good faith by the Committee of the vested and/or unvested portion
of the award.  The Committee’s general
authority under this Section 5.2 is limited by and subject to all other
express provisions of the Plan.  Any
adjustment pursuant to this Section 5.2 may provide, in the Committee’s
discretion, for the elimination without payment therefor of any fractional
shares that might otherwise become subject to any Stock Incentive. Any such
adjustments shall be made in accordance with Section 1.424-1 of the
Treasury Regulations (with respect to Incentive Stock Options) or Section 1.409A-1(b)(v) of
the Treasury Regulations (with respect to Nonqualified Stock Options).

 

(c)           The existence of the Plan and the
Stock Incentives granted pursuant to the Plan shall not affect in any way the
right or power of the Company to make or authorize any adjustment,
reclassification, reorganization or other change in its capital or business
structure, any merger or consolidation of the Company, any issue of debt or
equity securities having preferences or priorities as to the Stock or the
rights thereof, the dissolution or liquidation of the Company, any sale or
transfer of all or any part of its business or assets, or any other corporate
act or proceeding.

 

5.3           Cash Awards.  The Committee may, at any time and in its
discretion, grant to any holder of a Stock Incentive the right to receive, at
such times and in such amounts as determined by the Committee in its
discretion, a cash amount which is intended to reimburse such person for all or
a portion of the federal, state and local income taxes imposed upon such person
as a consequence of the receipt of the Stock Incentive or the exercise of
rights thereunder.

 

5.4           Compliance with
Code.  All Incentive Stock Options to
be granted hereunder are intended to comply with Code Section 422, and all
Nonqualified Stock Options to be granted hereunder are intended to comply with
Code Section 409A or an exemption thereto. All provisions of the Plan and
all Options granted hereunder shall be construed in such a manner as to
effectuate that intent.

 

10

 

5.5           Right to
Terminate Service.  Nothing in the
Plan or in any Stock Incentive Agreement shall confer upon any Participant the
right to continue as an employee, director, organizer or officer of the Company
or affect the right of the Company to terminate the Participant’s services at
any time.

 

5.6           Restrictions on
Delivery and Sale of Shares; Legends. 
Each Stock Incentive is subject to the condition that if at any time the
Committee, in its discretion, shall determine that the listing, registration or
qualification of the shares covered by such Stock Incentive upon any securities
exchange or under any state or federal law is necessary or desirable as a
condition of or in connection with the granting of such Stock Incentive or the
purchase or delivery of shares thereunder, the delivery of any or all shares
pursuant to such Stock Incentive may be withheld unless and until such listing,
registration or qualification shall have been effected.  If a registration statement is not in effect
under the Securities Act of 1933 or any applicable state securities laws with
respect to the shares of Stock purchasable or otherwise deliverable under Stock
Incentives then outstanding, the Committee may require, as a condition of
exercise of any Option or as a condition to any other delivery of Stock
pursuant to a Stock Incentive, that the Participant or other recipient of a
Stock Incentive represent, in writing, that the shares received pursuant to the
Stock Incentive are being acquired for investment and not with a view to
distribution and agree that the shares will not be disposed of except pursuant
to an effective registration statement, unless the Company shall have received
an opinion of counsel that such disposition is exempt from such requirement
under the Securities Act of 1933 and any applicable state securities laws.  The Company may include on certificates
representing shares delivered pursuant to a Stock Incentive such legends
referring to the foregoing representations or restrictions or any other
applicable restrictions on resale as the Company, in its discretion, shall deem
appropriate.

 

5.7           Non-Alienation
of Benefits.  Other than as
specifically provided herein, no benefit under the Plan shall be subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance or charge; and any attempt to do so shall be void.  No such benefit shall, prior to receipt by
the Participant, be in any manner liable for or subject to the debts,
contracts, liabilities, engagements or torts of the Participant.

 

5.8           Termination and
Amendment of the Plan.  The Board of
Directors at any time may amend or terminate the Plan without stockholder
approval; provided, however, that the Board of Directors may condition any
amendment on the approval of stockholders of the Company if such approval is
necessary or advisable with respect to tax, securities or other applicable
laws.  No such termination or amendment
without the consent of the holder of a Stock Incentive shall adversely affect
the rights of the Participant under such Stock Incentive.

 

5.9           Stockholder
Approval.   The Plan must be
submitted to the stockholders of the Company for their approval within twelve
(12) months before or after the adoption of the Plan by the Board of Directors.

 

5.10         Choice of Law. 
The laws of the State of Georgia shall govern the Plan, to the extent
not preempted by federal law.

 

5.11         Effective Date of the
Plan.  The Plan was approved by the
Board as of May 15, 2008 and will be effective as of that date.

 

11

 

	
   

  	
  FIRST CENTURY BANCORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William R. Blanton

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Chief Executive Officer

  
				

 

12

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