EXHIBIT 10.1
 
 
MANAGEMENT AGREEMENT
 
AGREEMENT effective as of the 24th day of July, 2011 among CERES MANAGED FUTURES
LLC, a Delaware limited liability company (“CMF” or the “General Partner”),
WARRINGTON FUND L.P., a New York limited partnership (the “Partnership”)
and WARRINGTON ASSET MANAGEMENT, LLC, a Delaware limited liability company (the
“Advisor”).
 
W I T N E S S E T H :
 
WHEREAS, CMF is the general partner of Warrington Fund L.P. (formerly, Smith
Barney Warrington Fund L.P.), a limited partnership organized for the purpose of
speculative trading of commodity interests, including futures contracts,
options, swaps and forward contracts on U.S. and non-U.S. markets with the
objective of achieving substantial capital appreciation; and
 
WHEREAS, the Limited Partnership Agreement establishing the Partnership (the
“Limited Partnership Agreement”) permits CMF to delegate to one or more
commodity trading advisors CMF’s authority to make trading decisions for the
Partnership; and
 
WHEREAS, prior to January 30, 2012, the Advisor was exempt from registration as
a commodity trading advisor with the Commodity Futures Trading Commission
(“CFTC”) pursuant to Section 4m(1) of the Commodity Exchange Act, as interpreted
by CFTC Rule 4.14(a)(10); and
 
WHEREAS, on January 30, 2012, the Advisor registered as a commodity trading
advisor with the CFTC and became a member of the National Futures Association
(“NFA”); and
 
WHEREAS, CMF is registered as a commodity pool operator with the CFTC and is a
member of the NFA; and
 
WHEREAS, CMF, the Partnership and Warrington Mgt., L.P. (“Warrington Mgt.”), a
Delaware limited partnership, entered into a management agreement dated as of
December 31, 2005, (the “Initial Advisory Agreement”), pursuant to which
Warrington Mgt. agreed to render and implement advisory services to the
Partnership; and
 
WHEREAS, Warrington Mgt. transferred all of its rights and obligations under the
Initial Advisory Agreement to Warrington Advisors, LLC (“Warrington Advisors”),
a Nevada limited liability company, and Warrington Advisors assumed all of such
rights and obligations of Warrington Mgt. under the Initial Advisory Agreement;
and
 
WHEREAS, the Advisor, Warrington Mgt., and Warrington Advisors all have the same
direct or indirect beneficial ownership; and
 
WHEREAS, Warrington Advisors wishes to transfer all of its rights and
obligations with respect to the Partnership to the Advisor, and the Advisor
wishes to assume all of such rights and obligations of Warrington Advisors; and
 
 
 
 

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WHEREAS, CMF, the Partnership and the Advisor wish to enter into this Agreement
in order to set forth the terms and conditions upon which the Advisor will (i)
render and implement advisory services in connection with the conduct by the
Partnership of its commodity trading activities during the term of this
Agreement and (ii) assume the rights and obligations of Warrington Advisors with
respect to the Partnership.
 
NOW, THEREFORE, the parties agree as follows:
 
1. DUTIES OF THE ADVISOR.  (a) For the period and on the terms and conditions of
this Agreement, the Advisor shall have sole authority and responsibility, as one
of the Partnership’s agents and attorneys-in-fact, for directing the investment
and reinvestment of the assets and funds of the Partnership allocated to it from
time to time by the General Partner in commodity interests, including commodity
futures contracts, options and forward contracts.  The Advisor may also engage
in swaps transactions and other derivative transactions on behalf of the
Partnership with the prior approval of CMF.  All such trading on behalf of the
Partnership shall be in accordance with the trading strategies and trading
policies set forth in the Partnership’s Private Placement Offering Memorandum
and Disclosure Document dated June 15, 2011, as supplemented (the “Memorandum”),
and as such trading policies may be changed from time to time upon receipt by
the Advisor of prior written notice of such change and pursuant to the trading
strategy selected by CMF to be utilized by the Advisor in managing the
Partnership’s assets.  CMF has initially selected the Advisor’s Core Trading
Program (the “Program”), as described in the Disclosure Document (defined
below), to manage the Partnership’s assets allocated to it.  Any open positions
or other investments at the time of receipt of such notice of a change in
trading policy shall not be deemed to violate the changed policy and shall be
closed or sold in the ordinary course of trading.  The Advisor may not deviate
from the trading policies set forth in the Memorandum without the prior written
consent of the Partnership given by CMF.  The Advisor makes no representation or
warranty that the trading to be directed by it for the Partnership will be
profitable or will not incur losses.
 
(b) CMF acknowledges receipt of the Advisor’s Disclosure Document dated March
30, 2012, as filed with the NFA.  All trades made by the Advisor for the account
of the Partnership shall be made through such commodity broker or brokers as CMF
shall direct, and the Advisor shall have no authority or responsibility for
selecting or supervising any such broker in connection with the execution,
clearance or confirmation of transactions for the Partnership or for the
negotiation of brokerage rates charged therefor.  However, the Advisor, with the
prior written permission (by original, fax copy or email copy) of CMF, may
direct any and all trades in commodity futures and options to a futures
commission merchant or independent floor broker it chooses for execution with
instructions to give-up the trades to the broker designated by CMF, provided
that the futures commission merchant or independent floor broker and any give-up
or floor brokerage fees are approved in advance by CMF.  All give-up or similar
fees relating to the foregoing shall be paid by the Partnership after all
parties have executed the relevant give-up agreements (by original, fax copy or
email copy).
 
(c) The initial allocation of the Partnership’s assets to the Advisor will be
made to the Program.  In the event the Advisor wishes to use a trading system or
methodology other than or in addition to the system or methodology outlined in
the Memorandum in connection with its trading for the Partnership, either in
whole or in part, it may not do so unless the Advisor gives CMF prior written
 
 
 
 
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notice of its intention to utilize such different trading system or methodology
and CMF consents thereto in writing.  CMF shall, within a reasonable time,
change the name of the Partnership in the event that the Advisor no longer acts
as the sole advisor to the Partnership.  In addition, the Advisor will provide
five days’ prior written notice to CMF of any change in the trading system or
methodology to be utilized for the Partnership which the Advisor deems
material.  If the Advisor deems such change in system or methodology or in
markets traded to be material, the changed system or methodology or markets
traded will not be utilized for the Partnership without the prior written
consent of CMF.  In addition, the Advisor will notify CMF of any changes to the
trading system or methodology that would require a change in the description of
the trading strategy or methods described in the Disclosure Document or the
Memorandum, as applicable.  Further, the Advisor will provide the Partnership
with a current list of all commodity interests to be traded for the
Partnership’s account and the Advisor will not trade any additional commodity
interests for such account without providing notice thereof to CMF and receiving
CMF’s written approval.  The Advisor also agrees to provide CMF, on a monthly
basis, with a written report of the assets under the Advisor’s management
together with all other matters deemed by the Advisor to be material changes to
its business not previously reported to CMF.  The Advisor further agrees that it
will convert foreign currency balances (not required to margin positions
denominated in a foreign currency) to U.S. dollars no less frequently than
monthly.  U.S. dollar equivalents in individual foreign currencies of more than
$100,000 will be converted to U.S. dollars within one business day after such
funds are no longer needed to margin foreign positions.
 
(d) The Advisor agrees to make all material disclosures to the Partnership
regarding itself and its principals as defined in Part 4 of the CFTC’s
regulations (“principals”), shareholders, directors, officers and employees,
their trading performance and general trading methods, its customer accounts
(but not the identities of or identifying information with respect to its
customers) and otherwise as are required in the reasonable judgment of CMF to be
made in any filings required by Federal or state law or NFA rule or
order.  Notwithstanding Paragraphs 1(d) and 4(d) of this Agreement, the Advisor
is not required to disclose the actual trading results of proprietary accounts
of the Advisor or its principals unless CMF reasonably determines that such
disclosure is required in order to fulfill its fiduciary obligations to the
Partnership or the reporting, filing or other obligations imposed on it by
Federal or state law or NFA rule or order.  The Partnership and CMF acknowledge
that the trading advice to be provided by the Advisor is a property right
belonging to the Advisor and that they will keep all such advice
confidential.  Further, CMF agrees to treat as confidential any results of
proprietary accounts and/or proprietary information with respect to the
Advisor’s trading systems obtained from the Advisor.
 
(e) The Advisor understands and agrees that CMF may designate other trading
advisors for the Partnership and apportion or reapportion to such other trading
advisors the management of an amount of Net Assets (as defined in Paragraph 3(b)
hereof) as it shall determine in its absolute discretion.  The designation of
other trading advisors and the apportionment or reapportionment of Net Assets to
any such trading advisors pursuant to this Paragraph 1 shall neither terminate
this Agreement nor modify in any regard the respective rights and obligations of
the parties hereunder.
 
(f) CMF may, from time to time, in its absolute discretion, select additional
trading advisors and reapportion funds among the trading advisors for the
Partnership as it deems appropriate.  CMF shall use its best efforts to make
reapportionments, if any, as of the first day of a month.  The Advisor agrees
that it may be called upon at any time promptly to liquidate positions in CMF’s
 
 
 
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sole discretion so that CMF may reallocate the Partnership’s assets, meet margin
calls on the Partnership’s account, fund redemptions, or for any other reason,
except that CMF will not require the liquidation of specific positions by the
Advisor.  CMF will use its best efforts to give two business days’ prior notice
to the Advisor of any reallocations or liquidations.
 
(g) The Advisor shall assume financial responsibility for any errors committed
or caused by it in transmitting orders for the purchase or sale of commodity
interests for the Partnership’s account including payment to the brokers of the
floor brokerage commissions, exchange, NFA fees, and other transaction charges
and give-up charges incurred by the brokers on such trades.  The Advisor’s
errors shall include, but not be limited to, inputting improper trading signals
or communicating incorrect orders to the commodity brokers.  The Advisor shall
have an affirmative obligation to promptly notify CMF in accordance with the
provisions of Paragraph 8(a)(iii) of any errors with respect to the account, and
the Advisor shall use its best efforts to identify and promptly notify CMF of
any order or trade which the Advisor reasonably believes was not executed in
accordance with its instructions to any broker utilized to execute orders for
the Partnership.
 
2. INDEPENDENCE OF THE ADVISOR.  For all purposes herein, the Advisor shall be
deemed to be an independent contractor and, unless otherwise expressly provided
or authorized, shall have no authority to act for or represent the Partnership
in any way and shall not be deemed an agent, promoter or sponsor of the
Partnership, CMF, or any other trading advisor.  The Advisor shall not be
responsible to the Partnership, the General Partner, any trading advisor or any
limited partners for any acts or omissions of any other trading advisor to the
Partnership.
 
3. COMPENSATION.  (a) In consideration of and as compensation for all of the
services to be rendered by the Advisor to the Partnership under this Agreement,
the Partnership shall (i) pay the Advisor a monthly fee for professional
management services equal to 1/6 of 1% (2% per year) of the month-end Net Assets
of the Partnership allocated to the Advisor; and (ii) allocate to the Advisor a
quarterly profit share allocation (a “Profit Share”) to its capital account in
the Partnership equal to 20% of New Trading Profits (as such term is defined in
the Limited Partnership Agreement) earned by the Advisor for the Partnership
during each calendar quarter in the form of Units of Limited Partnership
Interest (as such term is defined in the Limited Partnership Agreement).
 
(b) “Net Assets” shall have the meaning set forth in Section 7(d)(1) of the
Limited Partnership Agreement dated as of May 11, 2012 and without regard to
further amendments thereto, provided that in determining the Net Assets of the
Partnership on any date, no adjustment shall be made to reflect any
distributions, redemptions or Profit Shares allocable as of the date of such
determination.
 
(c) Monthly management fees shall be paid within twenty (20) business days
following the end of the period for which such fee is payable.  In the event of
the termination of this Agreement as of any date which shall not be the end of a
calendar month the monthly management fee shall be prorated to the effective
date of termination.  If, during any month, the Partnership does not conduct
 
 
 
 
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business operations or the Advisor is unable to provide the services
contemplated herein for more than two successive business days, the monthly
management fee shall be prorated by the ratio which the number of business days
during which CMF conducted the Partnership’s business operations or utilized the
Advisor’s services bears in the month to the total number of business days in
such month.
 
(d) The provisions of this Paragraph 3 shall survive the termination of this
Agreement.
 
4. RIGHT TO ENGAGE IN OTHER ACTIVITIES.  (a) The services provided by the
Advisor hereunder are not to be deemed exclusive.  CMF on its own behalf and on
behalf of the Partnership acknowledges that, subject to the terms of this
Agreement, the Advisor and its officers, directors, employees and
shareholder(s), may render advisory, consulting and management services to other
clients and accounts.  The Advisor and its officers, directors, employees and
shareholder(s) shall be free to trade for their own accounts and to advise other
investors and manage other commodity accounts during the term of this Agreement
and to use the same information, computer programs and trading strategies,
programs or formulas which they obtain, produce or utilize in the performance of
services to CMF for the Partnership.  However, the Advisor represents, warrants
and agrees that it believes the rendering of such consulting, advisory and
management services to other accounts and entities will not require any material
change in the Advisor’s basic trading strategies and will not affect the
capacity of the Advisor to continue to render services to CMF for the
Partnership of the quality and nature contemplated by this Agreement.
 
(b) If, at any time during the term of this Agreement, the Advisor is required
to aggregate the Partnership’s commodity positions with the positions of any
other person for purposes of applying CFTC- or exchange-imposed speculative
position limits, the Advisor agrees that it will promptly notify CMF in writing
if the Partnership’s positions are included in an aggregate amount which exceeds
the applicable speculative position limit.  The Advisor agrees that, if its
trading recommendations are altered because of the application of any
speculative position limits, it will not modify the trading instructions with
respect to the Partnership’s account in such manner as to affect the Partnership
substantially disproportionately as compared with the Advisor’s other
accounts.  The Advisor further represents, warrants and agrees that under no
circumstances will it knowingly or deliberately use trading strategies or
methods for the Partnership that are inferior to strategies or methods employed
for any other client or account and that it will not knowingly or deliberately
favor any client or account managed by it over any other client or account in
any manner, it being acknowledged, however, that different trading strategies or
methods may be utilized for differing sizes of accounts, accounts with different
trading policies, accounts experiencing differing inflows or outflows of equity,
accounts which commence trading at different times, accounts which have
different portfolios or different fiscal years, accounts utilizing different
executing brokers and accounts with other differences, and that such differences
may cause divergent trading results.
 
(c) It is acknowledged that the Advisor and/or its officers, employees,
directors and shareholder(s) presently act, and it is agreed that they may
continue to act, as advisor for other accounts managed by them, and may continue
to receive compensation with respect to services for such accounts in amounts
which may be more or less than the amounts received from the Partnership.
 
 
 
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(d) The Advisor agrees that it shall make such information available to CMF
respecting the performance of the Partnership’s account as compared to the
performance of other accounts managed by the Advisor or its principals as shall
be reasonably requested by CMF.  The Advisor presently believes and represents
that existing speculative position limits will not materially adversely affect
its ability to manage the Partnership’s account given the potential size of the
Partnership’s account and the Advisor’s and its principals’ current accounts and
all proposed accounts for which they have contracted to act as trading advisor.
 
5. TERM.  (a) This Agreement shall continue in effect until June 30, 2013.  CMF
may, in its sole discretion, renew this Agreement for additional one-year
periods upon notice to the Advisor not less than 30 days prior to the expiration
of the previous period.  After June 30, 2013, CMF may terminate this Agreement
at any month-end upon 30 days’ notice to the Advisor.  At any time during the
term of this Agreement, CMF may elect to immediately terminate this Agreement
upon 5 days’ notice to the Advisor if (i) the Net Asset Value per Unit of
Limited Partnership Interest shall decline as of the close of business on any
day to $400 or less; (ii) the Net Assets allocated to the Advisor (adjusted for
redemptions, distributions, withdrawals or reallocations, if any) decline by 50%
or more as of the end of a trading day from such Net Assets’ previous highest
value; (iii) limited partners owning at least 50% of the outstanding Units of
Limited Partnership Interest shall vote to require CMF to terminate this
Agreement; (iv) the Advisor fails to comply with the terms of this Agreement;
(v) CMF, in good faith, reasonably determines that the performance of the
Advisor has been such that CMF’s fiduciary duties to the Partnership require CMF
to terminate this Agreement; (vi) CMF reasonably believes that the application
of speculative position limits will substantially affect the performance of the
Partnership; or (vii) the Advisor fails to conform to the trading policies set
forth in the Limited Partnership Agreement or the Memorandum as they may be
changed from time to time.  At any time during the term of this Agreement, CMF
may elect immediately to terminate this Agreement if (i) the Advisor merges,
consolidates with another entity, sells a substantial portion of its assets, or
becomes bankrupt or insolvent, (ii) Scott C. Kimple dies, becomes incapacitated,
leaves the employ of the Advisor, ceases to control the Advisor or is otherwise
not managing the trading programs or systems of the Advisor, (iii) the Advisor’s
registration as a commodity trading advisor with the CFTC or its membership in
the NFA or any other regulatory authority, is terminated or suspended; or (iv)
CMF reasonably believes that the Advisor has or may contribute to any material
operational, business or reputational risk to CMF or CMF’s affiliates.  This
Agreement will immediately terminate upon dissolution of the Partnership or upon
cessation of trading by the Partnership prior to dissolution.
 
(b) The Advisor may terminate this Agreement by giving not less than 30 days’
notice to CMF (i) in the event that the trading policies of the Partnership as
set forth in the Memorandum are changed in such manner that the Advisor
reasonably believes will adversely affect the performance of its trading
strategies; (ii) after June 30, 2013; or (iii) in the event that the General
Partner or Partnership fails to comply with the terms of this Agreement.  The
Advisor may immediately terminate this Agreement if CMF’s registration as a
commodity pool operator or its membership in the NFA is terminated or suspended.
 
 
 
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(c) Except as otherwise provided in this Agreement, any termination of this
Agreement in accordance with this Paragraph 5 or Paragraph 1(e) shall be without
penalty or liability to any party, except for any fees due to the Advisor
pursuant to Paragraph 3 hereof.
 
6. INDEMNIFICATION.  (a)(i) In any threatened, pending or completed action,
suit, or proceeding to which the Advisor was or is a party or is threatened to
be made a party arising out of or in connection with this Agreement or the
management of the Partnership’s assets by the Advisor or the offering and sale
of units in the Partnership, CMF shall, subject to subparagraph (a)(iii) of this
Paragraph 6, indemnify and hold harmless the Advisor against any loss,
liability, damage, fine, penalty, obligation, cost, expense (including, without
limitation, attorneys’ and accountants’ fees collection fees, court costs and
other legal expenses), judgments, awards and amounts paid in settlement actually
and reasonably incurred by it in connection with such action, suit, or
proceeding if the Advisor acted in good faith and in a manner reasonably
believed to be in or not opposed to the best interests of the Partnership, and
provided that its conduct did not constitute negligence, intentional misconduct,
or a breach of its fiduciary obligations to the Partnership as a commodity
trading advisor, unless and only to the extent that the court or administrative
forum in which such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all circumstances of
the case, the Advisor is fairly and reasonably entitled to indemnity for such
expenses which such court or administrative forum shall deem proper; and further
provided that no indemnification shall be available from the Partnership if such
indemnification is prohibited by Section 16 of the Limited Partnership
Agreement.  The termination of any action, suit or proceeding by judgment, order
or settlement shall not, of itself, create a presumption that the Advisor did
not act in good faith and in a manner reasonably believed to be in or not
opposed to the best interests of the Partnership.
 
(ii) Without limiting subparagraph (i) above, to the extent that the Advisor has
been successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in subparagraph (i) above, or in defense of any claim,
issue or matter therein, CMF shall indemnify the Advisor against the expenses
(including, without limitation, attorneys’ and accountants’ fees) actually and
reasonably incurred by it in connection therewith.
 
(iii) Any indemnification under subparagraph (i) above, unless ordered by a
court or administrative forum, shall be made by CMF only as authorized in the
specific case and only upon a determination by independent legal counsel in a
written opinion that such indemnification is proper in the circumstances because
the Advisor has met the applicable standard of conduct set forth in subparagraph
(i) above.  Such independent legal counsel shall be selected by CMF in a timely
manner, subject to the Advisor’s approval, which approval shall not be
unreasonably withheld.  The Advisor will be deemed to have approved CMF’s
selection unless the Advisor notifies CMF in writing, received by CMF within
five days of CMF’s telecopying to the Advisor of the notice of CMF’s selection,
that the Advisor does not approve the selection.
 
(iv) In the event the Advisor is made a party to any claim, dispute or
litigation or otherwise incurs any loss or expense as a result of, or in
connection with, the Partnership’s or CMF’s activities or claimed activities
unrelated to the Advisor, CMF shall indemnify, defend and hold harmless the
Advisor against any loss, liability, damage, fine, penalty, obligation, cost or
expense (including, without limitation, attorneys’ and accountants’ fees,
collection fees, court costs and other legal expenses, judgments, awards and
amounts including amounts paid in settlement) incurred in connection therewith.
 
 
 
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(v) As used in this Paragraph 6(a), the term “Advisor” shall include the
Advisor, its principals, officers, directors, stockholders and employees and the
term “CMF” shall include the Partnership.
 
(b) (i) The Advisor agrees to indemnify, defend and hold harmless CMF, the
Partnership and their affiliates against any loss, liability, damage, fine,
penalty, obligation, cost or expense (including, without limitation, attorneys’
and accountants’ fees, collection fees, court costs and other legal expenses),
judgments, awards and amounts paid in settlement reasonably incurred by them (A)
as a result of the breach of any representations and warranties or covenants
made by the Advisor in this Agreement, (B) as a result of the breach of any
representation, warranty or covenant made by Warrington Mgt. or Warrington
Advisors, or (C) as a result of any act or omission of the Advisor, Warrington
Mgt. or Warrington Advisors relating to the Partnership if (i) there has been a
final judicial or regulatory determination, or a written opinion of an
arbitrator pursuant to Paragraph 14 hereof, to the effect that such acts or
omissions violated the terms of this Agreement in any material respect or
involved negligence, bad faith, recklessness or intentional misconduct on the
part of the Advisor, Warrington Mgt. or Warrington Advisors (except as otherwise
provided in Paragraph 1(g)), or (ii) there has been a settlement of any action
or proceeding with the Advisor’s prior written consent..
 
(ii) In the event CMF, the Partnership or any of their affiliates is made a
party to any claim, dispute or litigation or otherwise incurs any loss or
expense as a result of, or in connection with, the activities or claimed
activities of the Advisor or its principals, officers, directors, shareholder(s)
or employees unrelated to CMF’s or the Partnership’s business, the Advisor shall
indemnify, defend and hold harmless CMF, the Partnership or any of their
affiliates against any loss, liability, damage, fine, penalty, obligation, cost
or expense (including, without limitation, attorneys’ and accountants’ fees,
collection fees, court costs and other legal expenses, judgments, awards and
amounts including amounts paid in settlement) incurred in connection therewith.
 
(c) In the event that a person entitled to indemnification under this Paragraph
6 is made a party to an action, suit or proceeding alleging both matters for
which indemnification can be made hereunder and matters for which
indemnification may not be made hereunder, such person shall be indemnified only
for that portion of the loss, liability, damage, cost or expense incurred in
such action, suit or proceeding which relates to the matters for which
indemnification can be made.
 
(d) None of the indemnifications contained in this Paragraph 6 shall be
applicable with respect to default judgments, confessions of judgment or
settlements entered into by the party claiming indemnification without the prior
written consent, which shall not be unreasonably withheld, of the party
obligated to indemnify such party.
 
(e) The provisions of this Paragraph 6 shall survive the termination of this
Agreement.
 
 
 
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7. REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
 
(a) The Advisor represents and warrants that:
 
(i) All references to the Advisor and its principals in the Memorandum, if any,
are accurate in all material respects and as to them the Memorandum does not
contain any untrue statement of a material fact or omit to state a material fact
which is necessary to make the statements therein not misleading, except that
with respect to Table B and other pro forma or hypothetical performance
information in the in the Memorandum, if any, this representation and warranty
extends only to the underlying data made available by the Advisor for the
preparation thereof and not to any hypothetical or pro forma
adjustments.  Subject to such exception, all references to the Advisor and its
principals in the Memorandum will, after review and approval of such references
by the Advisor prior to the use of such Memorandum in connection with the
offering of the Partnership’s units, be accurate in all material respects.
 
(ii) The information with respect to the Advisor set forth in the actual
performance tables in the Memorandum, if any, is based on all of the customer
accounts managed on a discretionary basis by the Advisor’s principals and/or the
Advisor during the period covered by such tables and required to be disclosed
therein.  The Advisor’s performance tables have been examined by an independent
certified public accountant and the report thereon has been provided to
CMF.  The Advisor will have its performance tables so examined no less
frequently than annually during the term of this Agreement and will provide the
report thereon to CMF.
 
(iii) The Advisor will be acting as a commodity trading advisor with respect to
the Partnership and not as a securities investment adviser.  As of January 30,
2012, the Advisor is duly registered with the CFTC as a commodity trading
advisor, is a member of the NFA.  Prior to January 30, 2012, the Advisor was
exempt from registration with the CFTC as a commodity trading advisor pursuant
to Section 4m(1) of the Commodity Exchange Act, as interpreted by CFTC Rule
4.14(a)(10).  The Advisor is in compliance with such other registration and
licensing requirements as shall be necessary to enable it to perform its
obligations hereunder, and agrees to maintain and renew such registrations and
licenses during the term of this Agreement.
 
(iv) The Advisor is a limited partnership duly organized, validly existing and
in good standing under the laws of the State of Delaware and has full limited
partnership power and authority to enter into this Agreement and to provide the
services required of it hereunder.
 
(v) The Advisor will not, by acting as a commodity trading advisor to the
Partnership, breach or cause to be breached any undertaking, agreement,
contract, statute, rule or regulation to which it is a party or by which it is
bound.
 
(vi) This Agreement has been duly and validly authorized, executed and delivered
by the Advisor and is a valid and binding agreement enforceable in accordance
with its terms.
 
 
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(vii) At any time during the term of this Agreement that an offering memorandum
or prospectus relating to the units is required to be delivered in connection
with the offer and sale thereof, the Advisor agrees upon the request of CMF to
provide the Partnership with such information as shall be necessary so that, as
to the Advisor and its principals, such offering memorandum or prospectus is
accurate.
 
(viii) In the event that the Advisor forms another commodity pool unrelated to
CMF with substantially similar investors, whether or not the Advisor terminates
this Agreement or continues trading for the Partnership, the Advisor shall pay
to CMF all expenses incurred by CMF, Citigroup Global Markets Inc. (“CGM”) and
the Partnership in connection with the organization and offering of the
Partnership, including but not limited to attorneys’, accountants’ and filing
fees, to the extent that CMF and CGM  have not previously been reimbursed by the
Partnership.
 
(ix) The Advisor will make no representations, other than those contained in the
Memorandum, to investors or prospective investors in the Partnership with
respect to the offering and sale of Units in the Partnership without the prior
written approval of CMF.
 
(x) The Advisor agrees that it shall be responsible for any liability of
Warrington Advisors or Warrington Mgt. that arises in connection with the
advisory services they provided to the Partnership;
 
(b) CMF represents and warrants for itself and the Partnership that:
 
(i) The Memorandum (as from time to time amended or supplemented, which
amendment or supplement is approved by the Advisor as to descriptions of itself
and its actual performance) does not contain any untrue statement of a material
fact or omit to state a material fact which is necessary to make the statements
therein not misleading, except that the foregoing representation does not apply
to any statement or omission concerning the Advisor in the Memorandum, made in
reliance upon, and in conformity with, information furnished to CMF by or on
behalf of the Advisor expressly for use in the Memorandum (it being understood
that the hypothetical and pro forma adjustments in Table B, if any, were not
furnished by the Advisor).
 
(ii) CMF is a limited liability company duly organized, validly existing and in
good standing under the laws of the State of Delaware and has full limited
liability company power and authority to perform its obligations under this
Agreement.
 
(iii) CMF and the Partnership have the capacity and authority to enter into this
Agreement on behalf of the Partnership.
 
(iv) This Agreement has been duly and validly authorized, executed and delivered
on CMF’s and the Partnership’s behalf and is a valid and binding agreement of
CMF and the Partnership enforceable in accordance with its terms.
 
(v) CMF will not, by acting as the general partner to the Partnership and the
Partnership will not, breach or cause to be breached any undertaking, agreement,
contract, statute, rule or regulation to which it is a party or by which it is
bound which would materially limit or affect the performance of its duties under
this Agreement.
 
 
 
 
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(vi) CMF is registered as a commodity pool operator and is a member of the NFA,
and it will maintain and renew such registration and membership during the term
of this Agreement.
 
(vii) The Partnership is a limited partnership duly organized and validly
existing under the laws of the State of New York and has full power and
authority to enter into this Agreement and to perform its obligations under this
Agreement.
 
 
8. COVENANTS OF THE ADVISOR, CMF AND THE PARTNERSHIP.
 
(a)  The Advisor agrees as follows:
 
(i) In connection with its activities on behalf of the Partnership, the Advisor
will comply with all applicable laws, including rules and regulations of the
CFTC, NFA and/or the commodity exchange on which any particular transaction is
executed.
 
(ii) The Advisor will promptly notify CMF of the commencement of any
investigation, suit, action or proceeding involving the Advisor or any of its
affiliates, officers, manager(s), employees, agents or representatives;
regardless of whether such investigation, suit, action or proceeding also
involves CMF.  The Advisor will provide CMF with copies of any correspondence
(including but not limited to, any notice or correspondence regarding the
violation, or potential violation, of position limits) from or to the CFTC, NFA
or any commodity exchange in connection with an investigation or audit of the
Advisor’s business activities.
 
(iii) In the placement of orders for the Partnership’s account and for the
accounts of any other client, the Advisor will utilize a pre-determined,
systematic, fair and reasonable order entry system, which shall, on an overall
basis, be no less favorable to the Partnership than to any other account managed
by the Advisor.  The Advisor acknowledges its obligation to review the
Partnership’s positions, prices and equity in the account managed by the Advisor
daily and within two business days to notify, in writing, the broker and CMF and
the Partnership’s brokers of (i) any error committed by the Advisor or its
principals or employees; (ii) any trade which the Advisor believes was not
executed in accordance with its instructions; and (iii) any discrepancy with a
value of $10,000 or more (due to differences in the positions, prices or equity
in the account) between its records and the information reported on the
account’s daily and monthly broker statements.
 
(iv) The Advisor will maintain a net worth of not less than $500,000 during the
term of this Agreement.
 
(v) The Advisor intends to use its best efforts to close out all futures
positions prior to any applicable delivery period, and will use its best efforts
to avoid causing the Partnership to take delivery of any commodity.
 
 
 
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(b) CMF agrees for itself and the Partnership that:
 
(i) CMF and the Partnership will comply with all applicable laws, including
rules and regulations of the CFTC, NFA and/or the commodity exchange on which
any particular transaction is executed.
 
(ii) CMF will promptly notify the Advisor of the commencement of any material
suit, action or proceeding involving it or the Partnership, whether or not such
suit, action or proceeding also involves the Advisor.
 
(iii) CMF will be responsible for compliance with the USA Patriot Act and
related anti-money-laundering regulations with respect to the Partnership and
its limited partners.
 
9. COMPLETE AGREEMENT.  This Agreement constitutes the entire agreement between
the parties pertaining to the subject matter hereof.
 
10. ASSIGNMENT.  This Agreement may not be assigned by any party without the
express written consent of the other parties.
 
11. AMENDMENT.  This Agreement may not be amended except by the written consent
of the parties.
 
12. NOTICES.  All notices, demands or requests required to be made or delivered
under this Agreement shall be effective upon actual receipt and shall be made
either by electronic mail (email) copy or in writing and delivered personally or
by registered or certified mail or expedited courier, return receipt requested,
postage prepaid, to the addresses below or to such other addresses as may be
designated by the party entitled to receive the same by notice similarly given:
 
If to CMF or to the Partnership:
 
Ceres Managed Futures LLC
522 Fifth Avenue, 14th Floor
New York, New York  10022
Attention:  Walter Davis
 
Email: walter.davis@morganstanleysmithbarney.com
 
If to the Advisor:
 
Warrington Asset Management, LLC
200 Crescent Court, Suite 900
Dallas, Texas  75201
Attention: Scott C. Kimple
 
Email:  scott.c.kimple@morganstanleysmithbarney.com
 
 
 
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13. GOVERNING LAW.  This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
 
14. ARBITRATION.  The parties agree that any dispute or controversy arising out
of or relating to this Agreement or the interpretation thereof, shall be settled
by arbitration in accordance with the rules, then in effect, of the NFA or, if
the NFA shall refuse jurisdiction, then in accordance with the rules, then in
effect, of the American Arbitration Association; provided, however, that the
power of the arbitrator shall be limited to interpreting this Agreement as
written and the arbitrator shall state in writing his reasons for his award, and
further provided, that any such arbitration shall occur within the Borough of
Manhattan in New York City.  Judgment upon any award made by the arbitrator may
be entered in any court of competent jurisdiction.
 
15. NO THIRD PARTY BENEFICIARIES.  There are no third  party beneficiaries to
this Agreement, except that certain persons not parties to this Agreement may
have rights under Paragraph 6 hereof
 
16. COUNTERPARTS.  This Agreement may be executed in any number of counterparts,
including via facsimile, each of which is an original and all of which when
taken together evidence the same agreement.
 

 
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IN WITNESS WHEREOF, this Agreement has been executed for and on behalf of the
undersigned.
 

 
CERES MANAGED FUTURES LLC
     
By
/s/ Walter Davis                                                  
   
Walter Davis
   
President and Director
   
Dated:  June 18, 2012
         
WARRINGTON FUND L.P.
 
By:  Ceres Managed Futures LLC (General Partner)
     
By
/s/ Walter Davis                                                  
   
Walter Davis
   
President and Director
   
Dated:  June 18, 2012
 
 
     
WARRINGTON ASSET MANAGEMENT, LLC
           
By
/s/ Scott C. Kimple                                              
   
Scott C. Kimple
   
President
   
Dated:  May 30, 2012
   
Acknowledged and agreed to by:
     
WARRINGTON ADVISORS, LLC
     
By
/s/ Scott C. Kimple                                   
   
Scott C. Kimple
   
President
   
Dated:  May 30, 2012
     
WARRINGTON MGT., L.P.
     
By
/s/ Scott C. Kimple                                    
   
Scott C. Kimple
   
President
   
Dated:  May 30, 2012
     

 
 
 
 
 
 
 
 
 
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