CONFIDENTIAL TREATMENT REQUESTED.  Confidential portions of this document have
been redacted and have been separately filed with the Commission.

ADVISORY AGREEMENT
 
THIS AGREEMENT, made as of July 1, 2009, among MSSB Managed Futures Rotella I,
LLC, a Delaware limited liability company (the “Trading Company”), Demeter
Management LLC, a Delaware limited liability company (the “Trading Manager”),
and Rotella Capital Management, Inc., a Nevada corporation (the “Trading
Advisor”).
 
W I T N E S S E T H :
 
WHEREAS, the Trading Company has been organized pursuant to a Certificate of
Formation filed with Secretary of State of the State of Delaware on June 10,
2009 (the “Certificate of Formation”) and an operating agreement (the “Operating
Agreement”) to, among other things, directly or indirectly through a commodity
trading advisor, trade, buy, sell, spread, or otherwise acquire, hold, or
dispose of commodities (including, but not limited to, foreign currencies,
mortgage-backed securities, money market instruments, financial instruments, and
any other securities or items which are now, or may hereafter be, the subject of
futures contract trading), domestic and foreign commodity futures contracts,
forward contracts, foreign exchange commitments, options on physical commodities
and on futures contracts, spot (cash) commodities and currencies, exchange of
futures contracts for physicals transactions, exchange of physicals for futures
contracts transactions, and any rights pertaining thereto, whether traded on an
organized exchange or otherwise (hereinafter referred to collectively as
“futures interests;” provided, however, such definition shall exclude securities
futures products as defined by the Commodity Futures Trading Commission
(“CFTC”), options in securities futures and options in equities) and securities
(such as United States Treasury securities) approved by the CFTC for investment
of customer funds and other securities on a limited basis, and to engage in all
activities incident thereto;
 
WHEREAS, the Trading Company is a commodity pool operated by the Trading Manager
in which other commodity pool investment vehicles sponsored and/or managed by
the Trading Manager and/or its affiliates will invest (each such investment
vehicle, a “Member,” and collectively, the “Members”);
 
WHEREAS, the principals of the Trading Advisor have extensive experience trading
in futures interests and the Trading Advisor is willing to provide the services
and undertake the obligations as set forth herein;
 
WHEREAS, the Trading Company and the Trading Manager each desires the Trading
Advisor to act as a trading advisor for the Trading Company and to make
investment decisions with respect to futures interests for the Trading Company
and the Trading Advisor desires so to act; and
 
WHEREAS, the Trading Company, the Trading Manager and the Trading Advisor wish
to enter into this Agreement which, among other things, sets forth certain terms
and conditions upon which the Trading Advisor will conduct the Trading Company’s
futures interest trading.
 
NOW, THEREFORE, the parties hereto hereby agree as follows:
 
 
 

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1.  
Undertakings in Connection with the Continuing Offering of Units.

 
(a) The Trading Advisor agrees with respect to the continuing offering of
interests in the Members (“Units”): (i) to make all disclosures regarding
itself, its principals and affiliates, its trading performance, its trading
programs, systems, methods and strategies (subject to the need, in the
reasonable discretion of the Trading Advisor, to preserve confidentiality of
proprietary information concerning such programs, systems, methods and
strategies), any client accounts over which it has discretionary trading
authority (other than the names of or identifying information with respect to
any such clients and/or client’s investment strategies and vehicles to the
extent not permitted by agreements in place with such clients), and otherwise,
as the Members may reasonably require (x) in connection with any Member’s
offering materials (collectively, the “Offering Memoranda”) as required by Rule
4.21 of the regulations under the Commodity Exchange Act (the “CEAct”) (if
applicable), including in connection with any amendments or supplements thereto,
or (y) to comply with any other applicable law or rule or regulation, including
those of the CFTC, the Securities and Exchange Commission (the “SEC”), the
National Futures Association (the “NFA”), the Financial Industry Regulatory
Authority (“FINRA”) or any other regulatory or self-regulatory body, exchange,
or board with jurisdiction over its members (or to comply with the reasonable
request of the aforementioned organizations); and (ii) to otherwise cooperate
with the Trading Company, the Trading Manager and the Members by providing
information regarding the Trading Advisor in connection with the preparation of
the Offering Memoranda, including any amendments or supplements thereto, as part
of making application for registration of the Units under the securities or blue
sky laws of any jurisdictions, including foreign jurisdictions, as the Members
may deem appropriate; provided that all such disclosures are subject to the
need, in the reasonable discretion of the Trading Advisor, to preserve the
secrecy of Confidential Information concerning its clients, systems methods and
strategies. As used herein, unless otherwise provided, the term “principal”
shall have the meaning as defined in Rule 4.10(e) of the CFTC’s regulations and
the term “affiliate” shall mean an individual or entity that directly or
indirectly controls, is controlled by, or is under common control with, such
party.
 
(b) If the Trading Advisor becomes aware of any materially untrue or misleading
statement or omission regarding itself or any of its principals or affiliates in
the Disclosure Document (as defined in Section 19 hereof), or of the occurrence
of any event or change in circumstances which would result in there being any
materially untrue or misleading statement or omission in the Disclosure Document
regarding itself or any of its principals or affiliates, the Trading Advisor
shall promptly notify the Trading Manager and shall cooperate with the Trading
Manager in the preparation of any necessary amendments or supplements to the
Offering Memoranda. Neither the Trading Advisor nor any of its principals, or
affiliates, or any stockholders, officers, directors, or employees shall
distribute the Offering Memoranda or supplemental sales material or shall engage
in any selling activities whatsoever in connection with the continuing offering
of Units except as may be specifically approved by the Trading Manager and
agreed to by the Trading Advisor.
 
(c) For purposes of this Agreement, and notwithstanding any of the provisions
hereof, all non-public information relating to the Trading Advisor, its
principals and their respective affiliates, including but not limited to,
records, whether original, duplicated, computerized, handwritten, or in any
other form, and information contained therein, business and/or marketing and/or
sales plans and proposals, names of past and current clients, names of past,
current and prospective contacts, trading methodologies, systems, strategies and
programs, trading advice, instructions, results, orders and fills, current and
historical trading positions, training materials, research data bases,
portfolios, and computer software, and all written and oral information,
furnished by the Trading Advisor to the Trading Company, the Trading Manager,
the Members and/or their officers, directors, employees, agents (including, but
not limited to, attorneys, accountants, consultants, and financial advisors) or
controlling persons (each a “Recipient”), regardless of the manner in which it
is furnished, together with any analysis, compilations, studies or other
documents or records which are prepared by a Recipient of such information and
which contain or are generated from such information, regardless of whether
explicitly identified as confidential, with the exception of information which
(i) is or becomes generally available to the public other than as a result of
acts by the Recipient in violation of this Agreement, (ii) is in the possession
of the Recipient prior to its disclosure pursuant to the terms hereof, (iii) is
or becomes available to the Recipient from a source that is not bound by a
confidentiality agreement with regard to such information or by any other legal
obligation of confidentiality prohibiting such disclosure, or (iv) that is
independently developed by the Recipient without use of the confidential
information described in this Section 1(c), are and shall be confidential
information and/or trade secrets and the exclusive property of the Trading
Advisor (collectively, “Confidential Information”).
 
 
 

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(d) The Trading Company and the Trading Manager each warrants and agrees that
they and their respective officers, directors, members (including but not
limited to, the Members), equity holders, employees and agents (including for
purposes of this Agreement, but not limited to, attorneys, accountants,
consultants, and financial advisors) will protect and preserve the Confidential
Information and will disclose Confidential Information or otherwise make
Confidential Information available only to the Trading Company’s or the Trading
Manager’s officers, directors, members (including but not limited to, the
Members), equity holders, employees and agents (including for purposes of this
Agreement, but not limited to, attorneys, accountants, consultants, and
financial advisors), who need to know the Confidential Information (or any part
of it) for the purpose of satisfying their fiduciary, legal, reporting, filing
or other obligations hereunder or to monitor performance in the account during
the term of this Agreement or thereafter, or to the Trading Company, Trading
Manager or a Recipient, as the case may be, is required to disclose such
Confidential Information due to a fiduciary obligation or legal or regulatory
request. Additionally, the Trading Company and the Trading Manager each warrants
and agrees that it and any Recipient will use the Confidential Information
solely for the purpose of satisfying the Trading Company’s or the Trading
Manager’s obligations under this Agreement and not in a manner which violates
the terms of this Agreement.  Without limitation to the foregoing, (i) the
Trading Company and the Trading Manager each shall not copy, license, misuse,
misappropriate or reverse engineer or otherwise appropriate or make use of in
any manner any of the Confidential Information, including without limitation,
trading results or current and historical trading positions, and (ii) the
Trading Company and the Trading Manager each agree that they may not use any
Confidential Information in the formulation or computation of any index aimed at
being a replication of “commodity pool” returns they may create, sponsor or
manage.
 
 
 

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2.  
Duties of the Trading Advisor.

 
(a) Upon the commencement of trading operations on or about July 1, 2009 by the
Trading Advisor on behalf of  the Trading Company, the Trading Advisor hereby
agrees to act as a Trading Advisor for the Trading Company and, as such, shall
have authority and responsibility for directing the investment and reinvestment
of the Trading Company’s assets, which shall consist of the Trading Company’s
Net Assets (as defined in Section 6(c) hereof) plus “notional” funds, if any, as
specified in writing by the Trading Manager and consented to in writing by the
Trading Advisor (the “Assets”), on the terms and conditions and in accordance
with the prohibitions and the trading policies set forth in Exhibit A to this
Agreement as amended from time to time and provided in writing to the Trading
Advisor by the Trading Manager (the “Trading Policies”); provided, however, that
the Trading Manager may override the instructions of the Trading Advisor without
notice to the Trading Advisor to the extent necessary (i) to comply with the
Trading Policies and with applicable speculative position limits, (ii) to fund
any distributions or redemptions, (iii) to pay the Trading Company’s expenses,
(iv) to the extent the Trading Manager believes doing so is necessary for the
protection of the Trading Company, (v) to terminate the futures interest trading
of the Trading Company with the Trading Advisor, or (vi) to comply with any
applicable law or regulation.  The Trading Manager agrees not to override any
such instructions for the reasons specified in clauses (ii) or (iii) of the
preceding sentence unless the Trading Advisor fails to comply with a request of
the Trading Manager to make the necessary amount of funds available to the
Trading Company within two trading days of such request.  The Trading Advisor
shall not be liable for the consequences of any decision by the Trading Manager
to override instructions of the Trading Advisor, except to the extent that such
consequences result from a material breach of this Agreement by the Trading
Advisor or the Trading Advisor fails to comply with the Trading Manager’s
decision to override an instruction.  In performing services to the Trading
Company, the Trading Advisor shall utilize its Polaris Program (the “Trading
Program”), as described in the Disclosure Document, and as modified from time to
time.  In performing services for the Trading Company, the Trading Advisor may
not materially alter or change the Trading Program without the prior written
consent of the Trading Manager (and shall not effect such alteration or change
on behalf of the Trading Company without the Trading Manager’s consent), it
being understood that changes in the futures interests traded, provided that
such futures interests are listed on Exhibit C hereto as updated from time to
time by the Trading Advisor upon written notice to the Trading Manager, shall
not be deemed a material alteration in the Trading Program.  Notwithstanding any
other provision of this Agreement, the Trading Advisor shall not be responsible
for monitoring or responding to (or advising the Trading Manager of) any margin
calls or any other responsibilities with respect to the cash management of the
Assets or for trading in any instrument that is deemed to be a “security” so as
to require registration of the Trading Advisor as an investment adviser pursuant
to the Investment Advisers Act of 1940, as amended (the “Advisers Act”).
 
(b) The Trading Advisor shall:
 
(i) Exercise good faith and due care in trading futures interests for the
account of the Trading Company in accordance with the prohibitions and Trading
Policies, and the trading systems, methods, and strategies of the Trading
Advisor described in the Disclosure Document, with such changes and additions to
such trading systems, methods or strategies as the Trading Advisor, from time to
time, incorporates into its trading approach for accounts reasonably similar in
size of the Trading Company.
 
 
 

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(ii) Subject to reasonable assurances of confidentiality by the Trading Manager,
provide the Trading Manager, within 30 days of the end of a calendar quarter,
and within 30 days of a separate request which the Trading Manager may make from
time to time, with information comparing the performance of the Trading
Company’s account and the performance, including composite information, of all
other representative accounts directed by the Trading Advisor and using the
Trading Program, including Rotella Polaris Fund LLC and Rotella Polaris Fund,
Ltd. (“Other Accounts”), for the purpose of confirming that the Trading Company
has been treated equitably compared to such Other Accounts.  In providing such
information, the Trading Advisor may take such steps as are necessary to assure
the confidentiality of the Trading Advisor’s clients’ or investors’
identities.  The Trading Advisor shall, upon the Trading Manager’s request,
consult with the Trading Manager concerning any discrepancies between the
performance of such Other Accounts and the Trading Company’s account.  The
Trading Advisor shall promptly inform the Trading Manager of any material
discrepancies of which the Trading Advisor is aware.  The Trading Manager
acknowledges that the following differences in accounts may cause divergent
trading results:  different trading strategies, methods or degrees of leverage,
different trading policies, accounts experiencing differing inflows or outflows
of equity, different risk profiles, accounts which commence trading at different
times and accounts which have different portfolios or different fiscal years.
 
(iii) Inform the Trading Manager when the Trading Advisor’s open positions
maintained by the Trading Advisor exceed the Trading Advisor’s applicable
speculative position limits.
 
(iv) Subject to reasonable assurances of confidentiality by the Trading Manager,
the Trading Advisor shall promptly provide the Trading Manager with all
information concerning the Trading Advisor and its activities reasonably
requested by the Trading Manager (including, without limitation, information
relating to material changes in control, personnel, trading approach, or
financial condition).  The Trading Manager acknowledges that all trading
instructions made by the Trading Advisor will be held in confidence by the
Trading Manager except to the extent necessary to conduct the business of the
Trading Company, otherwise provided for herein or required by applicable law or
regulation.
 
(c) All purchases and sales of futures interests pursuant to this Agreement
shall be for the account, and at the risk, of the Trading Company and not for
the account, or at the risk of the Trading Advisor or any of its affiliates or
each of their principals, stockholders, directors, officers, or employees, or
any other person, if any, who controls the Trading Advisor.  All brokerage
commissions and related transaction fees , including give-up fees at rates
approved by MS&Co., arising from such trading by the Trading Advisor shall be
for the account of the Trading Company.  The Trading Advisor makes no
representations as to whether its trading will produce profits or avoid losses.
 
 
 

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(d) (i)           1

(ii)           *
 
(iii)           *
 
(e) Prior to the commencement of trading by the Trading Company, the Trading
Manager, on behalf of the Trading Company, shall deliver to the Trading Advisor
a trading authorization appointing the Trading Advisor the Trading Company’s
attorney-in-fact for such purpose (a form of which is attached hereto as Exhibit
B).
 
3.  
Designation of Additional or Replacement Trading Advisors and Reallocation of
Assets.

 
(a) If the Trading Manager at any time deems it to be in the best interests of
the Trading Company, the Trading Manager may designate an additional or
replacement trading advisor or advisors for the Trading Company and may
apportion to such additional or replacement trading advisor(s) the management of
such amounts of Assets as the Trading Manager shall determine in its absolute
discretion.  The designation of an additional trading advisor or advisors or
replacement of any trading advisor for the Trading Company by the Trading
Manager shall not require any approval of any existing trading advisor
(including the Trading Advisor).  Subject to Section 7(c) hereof, the
designation and retention of an additional or replacement trading advisor(s) and
the apportionment of Assets to any such trading advisor(s) pursuant to this
Section 3 shall neither terminate this Agreement nor modify in any regard the
respective rights and obligations of the Trading Company, the Trading Manager
and the Trading Advisor hereunder with respect to the Assets that remain under
the management of the Trading Advisor.  In the event that an additional or
replacement trading advisor(s) is so designated, the Trading Advisor shall
thereafter receive Management Fees and Incentive Fees based, respectively, on
that portion of the Assets managed by the Trading Advisor and that portion of
the New Trading Profit (as defined in Section 6(d) hereof) attributable to the
trading done by the Trading Advisor.
 
 
(b) The Trading Manager may at any time and from time to time upon three
Business Days’ (as defined in Section 6(a)(i) below) prior notice reduce Assets
allocated to the Trading Advisor (whether or not such Assets are allocated to
any other trading advisor or advisors of the Trading Company ) or allocate
additional Assets upon three Business Days’ prior notice to the Trading Advisor
(whether or not such additional Assets are allocated away from such other
trading advisor or advisors); provided that any such addition to or withdrawal
from Assets allocated to the Trading Advisor will only take place on the last
day of a month unless the Trading Manager determines that the best interests of
the Trading Company require otherwise.
 
 
 

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4.  
Trading Advisor as an Independent Contractor.

 
For all purposes of this Agreement, the Trading Advisor shall be deemed to be an
independent contractor and shall, unless otherwise expressly provided herein or
authorized, have no authority to act for or represent the Trading Company or its
Members in any way or otherwise be deemed an agent of the Trading Company or its
Members.  Nothing contained herein shall be deemed to require the Trading
Company to take any action contrary to the Operating Agreement or the
Certificate of Formation of the Trading Company as from time to time in effect,
or any applicable law or rule or regulation of any regulatory or self-regulatory
body, exchange, or board.  Nothing herein contained shall constitute the Trading
Advisor, the Trading Manager, or the Members, as members of any partnership,
joint venture, association, syndicate or other entity, or 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.  It is expressly agreed that the Trading
Advisor is neither a promoter, sponsor, or issuer with respect to the Trading
Company or its Members, nor does the Trading Advisor have any authority or
responsibility with respect to the offer, sale or issuance of Units or the
interests of the Trading Company, or the operation of the Members or of the
Trading Company.
 
5.  
Commodity Broker.

 
The Trading Advisor shall effect all transactions in futures interests for the
Trading Company through the Trading Company’s separate account maintained with
such commodity broker or brokers as the Trading Manager shall direct and appoint
from time to time. Morgan Stanley & Co., Incorporated (“MS & Co.”), Morgan
Stanley & Co. International plc (“MSIP”), and Morgan Stanley Capital Group Inc.
(“MSCG” and collectively, the “Commodity Brokers”) may act as the clearing
commodity brokers for the Trading Company, and MS & Co. and its affiliates may
act as foreign exchange forward contract counterparty for the Trading
Company.  MSCG and its affiliates may act as an options on foreign exchange
forward contract counterparty for the Trading Company.  The Trading Manager
shall provide the Trading Advisor with copies of brokerage statements.
 
Notwithstanding the foregoing, the Trading Advisor may execute trades through
commodity brokers other than those employed by MS & Co. and its affiliates so
long as arrangements (including executed give-up agreements) are made for such
commodity brokers to “give-up” or transfer the positions to the Commodity
Brokers in conformity with the Trading Policies set forth in Exhibit A attached
hereto.
 
6.  
Fees.

 
(a) For the services to be rendered to the Trading Company by the Trading
Advisor under this Agreement:
 
(i) The Trading Company shall pay the Trading Advisor a monthly management fee,
without regard to the profitability of the Trading Advisor’s trading for the
Trading Company’s account, equal to 1/12 of 2% (a *% annual rate) of the Assets
as of the first day of each month (the “Management Fee”).  The Management Fee is
payable in arrears within 30 Business Days of the end of the month for which it
was calculated.  For purposes of this Agreement, “Business Day” shall mean any
day which the securities markets are open in the United States.
 
 
 

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(ii) The Trading Company shall pay the Trading Advisor an incentive fee equal to
20% of the New Trading Profit in each capital account of the Members in the
Trading Company (the “Capital Account”) that shall accrue monthly but is not
payable until the end of each calendar quarter (the “Incentive Fee”).  The
initial incentive period will commence on the date of the Trading Company’s
initial closing for each Capital Account and shall end on the last day of the
first full calendar quarter after such initial closing occurs.  The Incentive
Fee is payable within 30 Business Days of the end of the calendar quarter for
which it was calculated.
 
(b) If this Agreement is terminated on a date other than the last day of a
calendar quarter, the Incentive Fee shall be determined as if such date were the
end of a calendar quarter.  If this Agreement is terminated on a date other than
the end of a month, the Management Fee described above shall be determined as if
such date were the end of a month, but such fee shall be prorated based on the
ratio of the number of trading days in the month through the date of termination
to the total number of calendar days in the month.  If, during any month after
the Trading Company commences trading operations (including the month in which
the Trading Company commences such operations), the Trading Company does not
conduct business operations, or suspends trading for the account of the Trading
Company managed by the Trading Advisor, or, as a result of an act or material
failure to act by the Trading Advisor, is otherwise unable to utilize the
trading advice of the Trading Advisor on any of the calendar days of that month
for any reason, the Management Fee shall be prorated based on the ratio of the
number of calendar days in the month which the Trading Company account managed
by the Trading Advisor engaged in trading operations or utilizes the trading
advice of the Trading Advisor to the total number of calendar days in the
month.  The Management Fee payable to the Trading Advisor for the month in which
the Trading Company begins to receive trading advice from the Trading Advisor
pursuant to this Agreement shall be prorated based on the ratio of the number of
calendar days in the month from the day the Trading Company begins to receive
such trading advice to the total number of calendar days in the month.  In the
event that there is an increase or decrease in the Assets as of any day other
than the first day of a month, the Trading Advisor shall be paid a pro rata
Management Fee on such increase or decrease in the Assets for such month.
 
(c) The term “Net Assets” shall mean the total assets of the Trading Company
(including, but not limited to, all cash and cash equivalents, accrued interest
and amortization of original issue discount, and the market value
(marked-to-market) of all open futures interest positions and other assets of
the Trading Company) less all liabilities of the Trading Company determined in
accordance with generally accepted accounting principles consistently applied
under the accrual basis of accounting.  Unless generally accepted accounting
principles require otherwise, the market value of a futures or option contract
traded on a United States exchange shall mean the settlement price on the
exchange on which the particular futures or option contract shall be traded by
the Trading Company on the day with respect to which the Net Assets are being
determined; provided, however, that if a contract could not be liquidated on
such day due to the operation of daily limits or other rules of the exchange on
which that contract shall be traded or otherwise, the settlement price on the
first subsequent day on which the contract could be liquidated shall be the
market value of such contract for such day, or if a contract could not be
liquidated on such day due to the exchange being closed for an exchange holiday,
the settlement price on the most recent preceding day on which the contract
could have been liquidated shall be the market value of such contract for such
day.  The market value of a forward contract or a futures or option contract
traded on a foreign exchange or market shall mean its market value as determined
by the Trading Manager on a basis consistently applied for each different
variety of contract.
 
 
 

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(d) The term “New Trading Profit” shall mean net futures interest trading
profits (realized and unrealized) on the Assets in each Capital Account,
decreased proportionally by the Trading Advisor’s monthly Management Fees,
brokerage commissions, transaction costs and administrative fees.  Such trading
profits and items of decrease shall be determined for each Capital Account from
the end of the last calendar quarter in which an Incentive Fee was earned by the
Trading Advisor or, if no Incentive Fee has been earned previously by the
Trading Advisor with respect to a Capital Account, from the date that the
Trading Advisor commenced managing the Assets in the Capital Account, to the end
of the calendar quarter as of which such Incentive Fee calculation is being
made.  Extraordinary expenses do not reduce New Trading Profit.  Interest income
is not included in New Trading Profit.  New Trading Profit shall be calculated
before reduction for Incentive Fees paid or accrued so that the Trading Advisor
does not have to earn back Incentive Fees.  Accrued Incentive Fees shall be paid
to the Trading Advisor on those Assets withdrawn from a Capital Account due to
redemptions at the end of any month when such withdrawal of Assets is made as if
such month-end is the end of the calendar quarter.
 
(e) If any payment of Incentive Fees is made to the Trading Advisor on account
of New Trading Profit earned by the Trading Advisor for a Capital Account and
the Trading Advisor thereafter fails to earn New Trading Profit or experiences
losses for any subsequent incentive period, the Trading Advisor shall be
entitled to retain such amounts of Incentive Fees previously paid to the Trading
Advisor in respect of such New Trading Profit.
 
(f) No Incentive Fees shall be payable to the Trading Advisor until the Trading
Advisor has earned New Trading Profit; provided, however, that if the Assets of
a Capital Account are reduced because of redemptions that occur at the end of,
and/or subsequent to, a calendar quarter in which the Trading Advisor
experiences a futures interest trading loss for the Trading Company, the trading
loss that must be recovered before the Trading Advisor will be deemed to
experience New Trading Profit in a subsequent calendar quarter will be equal to
the amount determined by (x) dividing the Assets of each Capital Account after
such decrease by the Assets in such Capital Account immediately before such
decrease and (y) multiplying that fraction by the amount of the unrecovered
futures interest trading loss prior to such decrease.  In the event that the
Trading Advisor experiences a trading loss for a Capital Account in more than
one calendar quarter without the Trading Company paying an intervening Incentive
Fee and Assets for a Capital Account are reduced in more than one such calendar
quarter because of redemptions, then the trading loss for each such calendar
quarter shall be adjusted in accordance with the formula described above and
such reduced amount of futures interest trading loss shall be carried forward
and used to offset subsequent futures interest trading profits.
 
 
 

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7.  
Term

 
(a) This Agreement shall continue in effect for a period of one year from the
date the Agreement was entered into unless otherwise terminated as set forth in
this Section 7.  The Trading Advisor may terminate this Agreement at the end of
such one-year period by providing prior written notice of termination to the
Trading Company at least thirty days’ prior to the expiration of such one-year
period. If the Agreement is not terminated upon the expiration of such one-year
period, this Agreement shall automatically renew for an additional one-year
period and shall continue to renew for additional one-year periods until this
Agreement is otherwise terminated, as provided for herein.  This Agreement shall
automatically terminate if the Trading Company is dissolved.
 
(b) The Trading Company and Trading Manager each shall have the right to
terminate this Agreement in its discretion (i) at any month end upon five
calendar days’ prior written notice to the Trading Advisor, or (ii) at any time
upon prior written notice to the Trading Advisor upon the occurrence of any of
the following events:  (A) if any person described as a “principal” of the
Trading Advisor in the Offering Memoranda ceases for any reason to be an active
“principal” of the Trading Advisor; (B) if the Trading Advisor becomes bankrupt
or insolvent; (C) if the Trading Advisor is unable to use its Trading Program as
in effect on the date hereof and as modified in the future for the benefit of
the Trading Company; (D) if the registration, as a commodity trading advisor, of
the Trading Advisor with the CFTC or its membership in the NFA is revoked,
suspended, terminated, or not renewed, or limited or qualified in any respect;
(E) except as provided in Section 12 hereof, if the Trading Advisor merges or
consolidates with, or sells or otherwise transfers its advisory business, or all
or a substantial portion of its assets, any portion of its futures interests
trading programs, systems or methods, or its goodwill to, any individual or
entity, (F) if the Net Assets allocated to the Trading Advisor as of the date of
this Agreement, after adjusting for distributions, additions, redemptions, or
reallocations, if any, shall decline by 50% or more as a result of trading
losses or if Net Assets allocated to the Trading Advisor fall below $7,500,000
(after adding back trading losses) as a result of any reallocation of the
Trading Company’s Net Assets by the Trading Manager; (G) if, at any time, the
Trading Advisor violates any Trading Policy, except with the prior express
written consent of the Trading Manager; (H) if the Trading Advisor fails in a
material manner to perform any of its obligations under this Agreement; or (I)
if the Trading Advisor merges, consolidates or sells a substantial portion of
its assets pursuant to Section 12 of this Agreement.
 
(c) The Trading Advisor may terminate this Agreement at any time, upon 10 days’
 prior written notice to the Trading Company and Trading Manager, in the
event:  (A) that the Trading Manager imposes additional trading limitation(s) in
the form of one or more Trading Policies or administrative policies that the
Trading Advisor does not consent to, such consent not to be unreasonably
withheld; (B) the Trading Manager objects to the Trading Advisor implementing a
proposed material change to the Trading Program and the Trading Advisor
certifies to the Trading Manager in writing that it believes such change is in
the best interests of the Trading Company; (C) the Trading Manager overrides a
trading instruction of the Trading Advisor for reasons unrelated to those set
forth in Section 2 hereof and a determination by the Trading Manager that the
Trading Advisor has violated the Trading Company’s trading policies and the
Trading Advisor certifies to the Trading Manager in writing that as a result the
Trading Advisor believes the performance results of the Trading Advisor relating
to the Trading Company will be materially adversely affected; (D) the Trading
Manager or the Trading Company merges or consolidates with, or sells or
otherwise transfers its business or all or a substantial portion of its assets,
or its goodwill, to any non-affiliated individual or non-affiliated entity;
(E) the Trading Manager or the Trading Company materially breaches this
Agreement and does not correct the breach within ten days of receipt of a
written notice of such breach from the Trading Advisor; (F) the Net Assets fall
below $3 (after adding back trading losses) at any time; (G) the Trading Company
becomes bankrupt or insolvent; or (H) the registration of the Trading Manager
with the CFTC as a commodity pool operator or its membership in the NFA is
revoked, suspended, terminated or not renewed, or limited or qualified in any
respect.  In addition, the Trading Advisor may terminate this Agreement
immediately upon written notice to the Trading Company and the Trading Manager
in the event that the Trading Company becomes “plan assets” subject to the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and/or
Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”),
whether intentionally or inadvertently.
 
 
 

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(d) Except as otherwise provided in this Agreement, any termination of this
Agreement in accordance with this Section 7 shall be without penalty or
liability to any party, on account of such termination.
 
(e) The indemnities set forth in Section 8 hereof shall survive any termination
of this Agreement.
 
8.  
Standard of Liability: Indemnifications.

 
(a) Limitation of Trading Advisor Liability.  In respect of the Trading
Advisor’s role in the futures interests trading of the Trading Company, none of
the Trading Advisor or its controlling persons, its affiliates, and their
respective directors, officers, principals, shareholders, employees or
controlling persons shall be liable to the Trading Company, the Trading Manager,
the Members or their partners, officers, shareholders, directors, or controlling
persons except that the Trading Advisor shall be liable for acts or omissions of
any such person provided that such act or omission constitutes a breach of this
Agreement or a representation, warranty or covenant herein, willful misconduct
or negligence, or is the result of any such person not having acted in good
faith and in the reasonable belief that such actions or omissions were in, or
not opposed to, the best interests of the Trading Company.
 
(b) Trading Advisor Indemnity in Respect of Management Activities.  The Trading
Advisor shall indemnify, defend and hold harmless the Trading Company and the
Trading Manager, their controlling persons, their affiliates and their
respective directors, officers, principals, managers, members, shareholders,
employees and controlling persons from and against any and all losses, claims,
damages, liabilities (joint and several), costs, and expenses (including any
reasonable investigatory, legal, accounting and other expenses incurred in
connection with, and any amounts paid in, any litigation or other proceeding or
any settlement; provided that, solely in the case of a settlement, the Trading
Advisor shall have approved such settlement) resulting from a demand, claim,
lawsuit, action or proceeding (other than those incurred as a result of claims
brought by or in the right of an indemnified party) relating to this Agreement
(except as covered by paragraph (d) below); provided that a court of competent
jurisdiction upon entry of a final judgment (or, if no final judgment is
entered, by an opinion rendered by counsel who is approved by the Trading
Company and the Trading Advisor, such approval not to be unreasonably withheld)
to the effect that the action or inaction of such indemnified party that was the
subject of the demand, claim, lawsuit, action, or proceeding did not constitute
negligence, willful misconduct, or a breach of this Agreement or a
representation, warranty or covenant of the Trading Company or the Trading
Manager, their controlling persons, their affiliates and their respective
directors, officers, shareholders, employees, and controlling persons and was
done in good faith.
 
 
 

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(c) Trading Company Indemnity in Respect of Management Activities.  The Trading
Company and the Trading Manager shall indemnify, defend and hold harmless,
jointly and severally, the Trading Advisor, its controlling persons, their
affiliates and their respective directors, officers, principals, shareholders,
employees and controlling persons, from and against any and all losses, claims,
damages, liabilities (joint and several), costs and expenses (including any
reasonable investigatory, legal, accounting and other expenses incurred in
connection with, and any amounts paid in, any litigation or other proceeding or
any settlement; provided that, solely in the case of a settlement, the Trading
Company shall have approved such settlement) resulting from a demand, claim,
lawsuit, action or proceeding (other than those incurred as a result of claims
brought by or in the right of an indemnified party) relating to this Agreement
(except as covered by paragraph (e) below); provided that a court of competent
jurisdiction upon entry of a final judgment finds (or, if no final judgment is
entered, by an opinion rendered by counsel who is approved by the Trading
Company and the Trading Advisor, such approval not to be unreasonably withheld)
to the effect that the action or inaction of such indemnified party that was the
subject of the demand, claim, lawsuit, action, or proceeding did not constitute
negligence, willful misconduct, or a breach of this Agreement or a
representation, warranty or covenant of the Trading Advisor, its controlling
persons, its affiliates and directors, officers, shareholders, employees, and
controlling persons and was done in good faith.
 
(d) Trading Advisor Indemnity in Respect of Sale of Units.  The Trading Advisor
shall indemnify, defend and hold harmless the Trading Company, the Trading
Manager, any selling agent, their controlling persons and their affiliates and
their respective directors, officers, principals, managers, members,
shareholders, employees and controlling persons from and against any and all
losses, claims, damages, liabilities, costs, and expenses, (joint and several),
to which any indemnified person may become subject (including any reasonable
investigatory, legal, accounting and other expenses incurred in connection with,
and any amounts paid in, any litigation or other proceeding or any settlement;
provided that, solely in the case of a settlement, the Trading Advisor shall
have approved such settlement, and in connection with any administrative
proceedings), in respect of the offer or sale of Units, insofar as such losses,
claims, damages, liabilities, costs, or expenses (or action in respect thereof)
arise out of, or are based upon:  (i) a breach by the Trading Advisor of any
applicable laws or regulations or any representation, warranty or agreement in
this Agreement or any certificate delivered pursuant to this Agreement or the
failure by the Trading Advisor to perform any covenant made by the Trading
Advisor herein; (ii) a breach of the disclosure requirements under the CEAct or
NFA rules that relate to the Trading Advisor and the Trading Advisor Principals
(as defined below), or (iii) a misleading or untrue statement or alleged
misleading or untrue statement of a material fact made in the Disclosure
Document, Offering Memoranda or any supplemental sales material or an omission
or alleged omission to state a material fact therein which is required to be
stated therein or necessary to make the statements therein (in the case of the
Disclosure Document and the Offering Memoranda and any supplemental sales
material, in light of the circumstances under which they were made) not
misleading, and such statement or omission relates specifically to the Trading
Advisor, or its Trading Advisor Principals (including the historical performance
capsules, but excluding the pro forma performance information except to the
extent the pro forma performance information was based on information furnished
by the Trading Advisor) or was made in reliance upon, and in conformity with,
written information or instructions furnished by the Trading Advisor (provided,
however, that with respect to any Offering Memoranda or supplemental sales
material, only such Offering Memoranda or supplemental sales material as shall
have been deemed approved by the Trading Advisor pursuant to Section 11(b)(iv)).
 
 
 

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(e) Trading Company Indemnity in Respect of Sale of Units.  The Trading Company
and the Trading Manager shall indemnify, defend and hold harmless, jointly and
severally, the Trading Advisor and each of its officers, directors, principals,
partners, shareholders and controlling persons from and against any loss claim,
damage, liability, cost, and expense, joint and several, to which any
indemnified person may become subject (including any reasonable investigatory,
legal, accounting and other expenses incurred in connection with, and any
amounts paid in, any litigation or other proceeding or any settlement; provided
that, solely in the case of a settlement, the Trading Company shall have
approved such settlement, and in connection with any administrative
proceedings), in respect of the offer or sale of Units, unless such loss, claim,
damage, liability, cost, or expense (or action in respect thereof) arises out
of, or is based upon (i) a breach by the Trading Company or the Trading Manager
of any representation, warranty or agreement in this Agreement or the failure by
the Trading Company or the Trading Manager to perform any covenant made by them
herein; or (ii) a misleading or untrue statement or alleged misleading or untrue
statement of a material fact made in the Disclosure Document or Offering
Memoranda, or any supplemental sales material or an omission or alleged omission
to state a material fact therein which is required to be stated therein or
necessary to make the statements therein (in the case of the Disclosure Document
or Offering Memoranda or the supplemental sales material, in light of the
circumstances under which they were made) not misleading, provided that such
materially misleading or untrue statement or alleged materially misleading or
untrue statement or omission or alleged omission does not specifically relate to
the Trading Advisor or its Trading Advisor Principals (including the historical
performance capsules, but excluding the pro forma performance information except
to the extent the pro forma performance information was based on information
furnished by the Trading Advisor) or was not made in reliance upon, and in
conformity with, written information or instructions furnished by the Trading
Advisor (provided, however, that with respect to any Offering Memoranda or
supplemental sales material, only such Offering Memoranda or supplemental sales
material as shall have been approved deemed approved by the Trading Advisor
pursuant to Section 11(b)(iv)), or does not result from a breach by the Trading
Advisor of any representation, warranty, or agreement in this Agreement or any
certificate delivered pursuant to this Agreement or the failure by the Trading
Advisor to materially perform any covenant made in this Agreement.
 
 
 

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(f) Subject to Section 8(a) hereof, 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 person.
 
(g) Promptly after receipt by an indemnified person of notice of the
commencement of any action, claim, or proceeding to which any of the indemnities
may apply, the indemnified person will notify the indemnifying party in writing
of the commencement thereof if a claim in respect thereof is to be made against
the indemnifying party hereunder; but the omission so to notify the indemnifying
party will not relieve the indemnifying party from any liability that the
indemnifying party may have to the indemnified person hereunder, except where
such omission has materially prejudiced the indemnifying party.  In case any
action, claim, or proceeding is brought against an indemnified person and the
indemnified person notifies the indemnifying party of the commencement thereof
as provided above, the indemnifying party will be entitled to participate
therein and, to the extent that the indemnifying party desires, to assume the
defense thereof with counsel selected by the indemnifying party and not
unreasonably disapproved by the indemnified person.  After notice from the
indemnifying party to the indemnified person of the indemnifying party’s
election so to assume the defense thereof as provided above, the indemnifying
party will not be liable to the indemnified person under the indemnity
provisions hereof for any legal and other expenses subsequently incurred by the
indemnified person in connection with the defense thereof, other than reasonable
costs of investigation.
 
Notwithstanding the preceding paragraph, if in any action, claim, or proceeding
as to which indemnification is or may be available hereunder, an indemnified
person reasonably determines that its interests are or may be adverse, in whole
or in part, to the indemnifying party’s interests or that there may be legal
defenses available to the indemnified person that are different from, in
addition to, or inconsistent with the defenses available to the indemnifying
party, the indemnified person may retain its own counsel in connection with such
action, claim, or proceeding and will be indemnified (provided the indemnified
person is so entitled) by the indemnifying party for any legal and other
expenses reasonably incurred in connection with investigating or defending such
action, claim, or proceeding.
 
In no event will the indemnifying party be liable for the fees and expenses of
more than one counsel for all indemnified persons in connection with any one
action; claim, or proceeding or in connection with separate but similar or
related actions, claims, or proceedings in the same jurisdiction arising out of
the same general allegations.  The indemnifying party will not be liable for any
settlement of any action, claim, or proceeding effected without the indemnifying
party’s express written consent, but if any action, claim, or proceeding, is
settled with the indemnifying party’s express written consent, the indemnifying
party will indemnify, defend, and hold harmless an indemnified person as
provided in this Section 8.
 
9.  
Right to Advise Others and Uniformity of Acts and Practices.

 
 
 

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(a) The Trading Advisor is engaged in the business of advising clients as to the
purchase and sale of futures interests.  During the term of this Agreement, the
Trading Advisor, its principals and affiliates, will be advising other clients
(including affiliates and the stockholders, officers, directors, and employees
of the Trading Advisor and its affiliates and their families) and trading for
their own accounts.  The Trading Advisor will use its best efforts to implement
a fair and consistent allocation policy that seeks to ensure that all clients
are treated equitably and positions allocated as nearly as possible in
proportion to the assets available for trading of the accounts managed or
controlled by the Trading Advisor.  Upon written reasonable request, the Trading
Manager may request a copy of the Trading Advisor’s procedures regarding the
equitable treatment of trades across accounts.  Such procedures shall be
provided to the Trading Manager within 30 days of such request by the Trading
Manager.  Except as otherwise set forth herein, the Trading Advisor and its
principals and affiliates agree to treat the Trading Company in a fiduciary
capacity to the extent recognized by applicable law, but subject to that
standard.  To the fullest extent required by applicable law, under no
circumstances shall the Trading Advisor by any act or omission knowingly or
intentionally favor any account advised or managed by the Trading Advisor over
the account of the Trading Company in any way or manner.  Nothing contained in
this Section 9(a) shall preclude the Trading Advisor from charging different
management fees and/or incentive fees to its clients.  Subject to the Trading
Advisor’s obligations under applicable law, the Trading Advisor or any of its
principals or affiliates shall be free to advise and manage accounts for other
clients and shall be free to trade on the basis of the same trading systems,
methods, or strategies employed by the Trading Advisor for the account of the
Trading Company, or trading systems, methods, or strategies that are entirely
independent of, or materially different from, those employed for the account of
the Trading Company, and shall be free to compete for the same futures interests
as the Trading Company or to take positions opposite to the Trading Company,
where such actions do not knowingly or intentionally prefer any of such accounts
over the account of the Trading Company on an overall basis.
 
(b) The Trading Advisor and its principals and affiliates shall not be
restricted as to the number or nature of its clients, except that:  (i) so long
as the Trading Advisor acts as a trading advisor for the Trading Company,
neither the Trading Advisor nor any of its principals or affiliates shall
knowingly hold any position or control any other account that would cause the
Trading Company, the Trading Advisor, or the principals or affiliates of the
Trading Advisor to be in violation of the CEAct or any regulations promulgated
thereunder, any other applicable law, or any applicable rule or regulation of
the CFTC or any other regulatory or self regulatory body, exchange, or board;
and (ii) neither the Trading Advisor nor any of its principals or affiliates
shall render futures interests trading advice to any other individual or entity
or otherwise engage in activity that shall knowingly cause positions in futures
interests to be attributed to the Trading Advisor under the rules or regulations
of the CFTC or any other regulatory or self regulatory body, exchange, or board
so as to require the significant modification of positions taken or intended for
the account of the Trading Company; provided that the Trading Advisor may modify
its trading systems, methods or strategies to accommodate the trading of
additional funds or accounts.  If applicable speculative position limits are
exceeded by the Trading Advisor in the opinion of (i) independent counsel (who
shall be other than counsel to the Trading Company), (ii) the CFTC, or (iii) any
other regulatory or self regulatory body, exchange, or board, the Trading
Advisor and its principals and affiliates shall promptly liquidate positions in
all of their accounts, including the Trading Company’s account, as to which
positions are attributed to the Trading Advisor as nearly as possible in
proportion to the accounts′ respective amounts available for trading (taking
into account different degrees of leverage and “notional” equity) to the extent
necessary to comply with the applicable position limits.
 
 
 

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10.  
Representations, Warranties, and Covenants of the Trading Advisor.

 
(a) Representations and Warranties of the Trading Advisor.  The Trading Advisor
represents and warrants to and agrees with the Trading Manager and the Trading
Company as follows:
 
(i) It will exercise good faith and due care in implementing the Trading Program
on behalf of the Trading Company as described in the Disclosure Document (as
modified from time to time) or any other trading programs agreed to by the
Trading Manager and the Trading Advisor.
 
(ii) The Trading Advisor shall follow and comply with, at all times, the Trading
Policies.
 
(iii) The Trading Advisor shall trade the Assets pursuant to the same trading
programs described in the Disclosure Document unless the Trading Manager and the
Trading Advisor agree otherwise.
 
(iv) The Trading Advisor is duly organized, validly existing and in good
standing under the laws of the state of its organization and is qualified to do
business and is in good standing as a foreign corporation in each other
jurisdiction in which the nature or conduct of its business requires such
qualification and the failure to so qualify would materially adversely affect
the Trading Advisor’s ability to perform its duties under this Agreement.  The
Trading Advisor has full power and authority to perform its obligations under
this Agreement.  The only principals (as defined in Rule 4.10(e) under the
CEAct) of the Trading Advisor are those set forth in the Offering Memoranda and
the Disclosure Document (the “Trading Advisor Principals”).
 
(v) The Disclosure Document contains all statements and information required to
be included therein under the CEAct and other applicable laws, and such
information is accurate and complete in all material respects.
 
(vi) All references to the Trading Advisor and the Trading Advisor Principals
and trading systems, methods and performance in the Offering Memoranda are
accurate and complete in all material respects.  With respect to the Trading
Advisor, the Trading Advisor Principals, and its trading systems, methods and
performance:  (i) the Offering Memoranda contains all statements and information
required to be included therein under the CEAct and the rules and regulations
thereunder, and (ii) the Offering Memoranda do not contain, and will not during
the term of this Agreement contain, any untrue statement of a material fact or
omit to state a material fact necessary to make the statements contained
therein, in light of the circumstances under which such statements were made,
not misleading.  Except as otherwise disclosed in the Offering Memoranda, the
actual performance of each discretionary account directed by the Trading Advisor
or any principal or affiliate of the Trading Advisor over the past five years
and year-to-date is disclosed in the Offering Memoranda on either a composite or
a stand alone basis.  The information regarding the actual performance of such
accounts set forth in the Offering Memoranda has been calculated and presented
in accordance with the descriptions therein and is complete and accurate in all
material respects.
 
 
 

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(vii) This Agreement has been duly and validly authorized, executed and
delivered on behalf of the Trading Advisor and is a valid and binding agreement
of the Trading Advisor enforceable in accordance with its terms.
 
(viii) Each of the Trading Advisor and the Trading Advisor Principals has all
federal, state and foreign governmental, regulatory and exchange licenses and
approvals and has effected all filings and registrations with federal, state and
foreign governmental and regulatory agencies required to conduct its business
and to act as described in the Offering Memoranda or required to perform its or
his obligations under this Agreement.  The Trading Advisor is registered as a
commodity trading advisor under the CEAct and is a member of the NFA in such
capacity.
 
(ix) The execution and delivery of this Agreement, the incurrence of the
obligations set forth herein, the consummation of the transactions contemplated
herein and in the Offering Memoranda and the payment of the fees hereunder will
not violate, or constitute a breach of, or default under, the certificate of
incorporation or bylaws (or any other organizational documents) of the Trading
Advisor or any agreement or instrument by which it is bound or of any order,
rule, law or regulation binding on it of any court or any governmental body or
administrative agency or panel or self-regulatory organization having
jurisdiction over it.
 
(x) Since the respective dates as of which information is given in the
Disclosure Document, and except as may otherwise be stated in or contemplated by
the Disclosure Document, there has not been any material adverse change in the
condition, financial or otherwise, business or prospects of the Trading Advisor
or any Trading Advisor Principal.
 
(xi) Except as set forth in the Disclosure Document there have not been in the
five years preceding the date of the Disclosure Document and there is not
pending, or to the best of the Trading Advisor’s knowledge after due inquiry,
threatened, any action, suit or proceeding before or by any court or other
governmental body or any administrative, self-regulatory or commodity exchange
organization to which the Trading Advisor or any Trading Advisor Principal is or
was a party, or to which any of the assets of the Trading Advisor is or was
subject and which resulted in or might reasonably be expected to result in any
material adverse change in the condition, financial or otherwise, business or
prospects of the Trading Advisor or which is required under the Securities Act
or CEAct to be disclosed in the Disclosure Document or the Offering
Memorandum.  None of the Trading Advisor or any Trading Advisor Principal has
received any notice of an investigation by the NFA, CFTC or other administrative
agency or self-regulatory body (whether United States or foreign) regarding
noncompliance by the Trading Advisor or any of the Trading Advisor Principals
with the CEAct or any other law applicable to the commodity trading advisory
services provided by the Trading Advisor, which shall not include routine and
non-material regulatory and administrative audits, inspections, inquiries or
requests.
 
 
 

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(xii) Neither the Trading Advisor nor any Trading Advisor Principal has
received, or is entitled to receive, directly or indirectly, any commission,
finder’s fee, similar fee, or rebate from any person in connection with the
organization or operation of the Trading Company.
 
(xiii) Participation by the Trading Advisor in accordance with the terms hereof
and as described in the Offering Memoranda will not cause the Trading Advisor to
be required to register as an investment adviser pursuant to the Advisers Act.
 
(xiv) Neither the Trading Advisor nor any Trading Advisor Principal will use or
distribute the Offering Memoranda or any supplemental sales material or engage
in any selling activities whatsoever in connection with the offering of the
Units.
 
(xv) The information in the Offering Memoranda about the Trading Advisor does
not contain any misleading or untrue statements of a material fact or omit to
state a material fact required to be stated therein to make the statements not
misleading.
 
(xvi) The foregoing representations and warranties shall be continuing during
the term of this Agreement and if at any time any event shall occur which could
make any of the foregoing representations or warranties inaccurate, the Trading
Advisor shall promptly notify the Trading Manager and the Trading Company of the
nature of such event.
 
(b) Covenants of the Trading Advisor.  The Trading Advisor covenants and agrees
that:
 
(i) The Trading Advisor shall maintain all registrations and memberships
necessary for the Trading Advisor to continue to act as described herein and to
at all times comply in all respects with all applicable laws, rules, and
regulations, to the extent that the failure to so comply would have a materially
adverse effect on the Trading Advisor’s ability to act as described herein.
 
(ii) The Trading Advisor shall inform the Trading Manager immediately as soon as
the Trading Advisor or any Trading Advisor Principal becomes the subject of any
investigation, claim or proceeding of any regulatory authority having
jurisdiction over such person or becomes a named party to any litigation
materially affecting (or which may, with the passage of time, materially affect)
the business of the Trading Advisor.  The Trading Advisor shall also inform the
Trading Manager immediately if the Trading Advisor or any of its officers
becomes aware of any breach of this Agreement by the Trading Advisor.
 
(iii) The Trading Advisor agrees to cooperate by providing information regarding
itself and its performance in the preparation of any amendments or supplements
to the Offering Memoranda.
 
(iv) The Trading Advisor agrees to participate, to the extent that the Trading
Manager may reasonably request, in “road shows” and other promotional activities
relating to the marketing of the Units, provided that such participation shall
not in the reasonable judgment of the Trading Advisor require the registration
of the Trading Advisor or any of its principals or agents as a broker-dealer or
salesman (or the equivalent) under the laws of any jurisdiction or interfere
materially with the trading activities of the Trading Advisor.  The Trading
Advisor shall pay the costs of its reasonably requested participation in such
road shows.
 
 
 

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11.  
Representations and Warranties of the Trading Company and the Trading Manager;
Covenants of the Trading Manager.

 
(a) The Trading Company and the Trading Manager represent and warrant to the
Trading Advisor, as follows:
 
(i) The Trading Manager has provided to the Trading Advisor the Offering
Memoranda of the initial Members which includes information regarding the
Trading Advisor in the form first issued, and will provide the Trading Advisor
with the opportunity to review such Offering Material in accordance with the
provisions of Section 11(b)(iv).
 
(ii) Each Members’ organizational agreement provides for the subscription for
and sale of the Units in the respective Member; all material actions required to
be taken by each Member as a condition to the sale of its Units to qualified
subscribers therefor has been, or prior to each closing described in the
Member’s respective Offering Memoranda shall have been taken; and, upon payment
of the consideration therefor specified in each accepted subscription agreement
in such form as attached to the respective Member’s Offering Memoranda, the
Units will constitute valid interests in the Member.  Each Member is in material
compliance with all laws, rules, regulations and orders of any governmental
agency or self-regulatory organization applicable to the Member’s business and
the offering, sale, issuance and distribution of its Units.
 
(iii) The Trading Company is a limited liability company duly formed pursuant to
its Certificate of Formation, Operating Agreement and the Delaware Limited
Liability Company Act and is validly existing and in good standing under the
laws of the State of Delaware with full power and authority to engage in the
trading of futures interests and to engage in its other contemplated activities
as described in the Offering Memoranda; the Trading Company is qualified to do
business in each jurisdiction in which the nature or conduct of its business
requires such qualification and where failure to be so qualified could
materially adversely affect the Trading Company’s ability to perform its
obligations hereunder.
 
(iv) The Trading Manager is duly organized and validly existing and in good
standing as a corporation under the laws of the State of Delaware and in good
standing and qualified to do business under the laws of the state of New York
and is qualified to do business and is in good standing as a foreign corporation
in each jurisdiction in which the nature or conduct of its business requires
such qualification and where the failure to be so qualified could materially
adversely affect the Trading Manager’s ability to perform its obligations
hereunder.
 
 
 

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(v) The Trading Company and the Trading Manager have full power and authority
under applicable law to conduct their business and to perform their respective
obligations under this Agreement and as described in the Offering Memoranda.
 
(vi) As of the date hereof, the Offering Memoranda and any supplemental sales
material contain all statements and information required to be included therein
by the CEAct or other applicable law and at all times subsequent thereto up to
and including each closing, the Offering Memoranda and any supplemental sales
material will comply in all material respects with the requirements of the rules
of the NFA, the CEAct or other applicable laws.  The Offering Memoranda as of
the initial closing (as described therein), date of issue, and at each closing
will not contain any misleading or untrue statements 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 material, when read
in conjunction with the Offering Memoranda, will not contain any untrue
statements 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 Offering Memoranda or
supplemental sales material made in reliance upon information furnished by and
relating to the Trading Advisor, its trading methods or its trading performance.
 
(vii) Since the respective dates as of which information is given in the
Offering Memoranda, there has not been any material adverse change in the
condition, financial or otherwise, or business of the Trading Manager or the
Trading Company, whether or not arising in the ordinary course of business.
 
(viii) This Agreement has been duly and validly authorized, executed and
delivered by the Trading Manager on behalf of the Trading Company and
constitutes a valid, binding and enforceable agreement of the Trading Company
and the Trading Manager in accordance with its terms.
 
(ix) The execution and delivery of this Agreement, the incurrence of the
obligations set forth herein and the consummation of the transactions
contemplated herein and in the Offering Memoranda will not violate, or
constitute a breach of, or default under, the Trading Manager’s certificate of
incorporation or bylaws, or the Trading Company’s Certificate of Formation or
Operating Agreement, or any agreement or instrument by which either the Trading
Manager or the Trading Company, as the case may be, is bound or any order, rule,
law or regulation applicable to the Trading Manager or the Trading Company of
any court or any governmental body or administrative agency or panel or
self-regulatory organization having jurisdiction over the Trading Manager or the
Trading Company.
 
(x) Except as set forth in the Offering Memoranda, there has not been in the
five years preceding the date of the Offering Memoranda and there is not pending
or, to the best of the Trading Manager’s knowledge after due inquiry,
threatened, any action, suit or proceeding at law or in equity before or by any
court or by any federal, state, municipal or other governmental body or any
administrative, self-regulatory or commodity exchange organization to which the
Trading Manager or the Trading Company is or was a party, or to which any of the
assets of the Trading Manager or the Trading Company is or was subject; and
neither the Trading Manager nor any of the principals of the Trading Manager
(“Trading Manager Principals”) has received any notice of an investigation by
the NFA, CFTC or any other administrative or self-regulatory organization
regarding non-compliance by the Trading Manager or the Trading Manager
Principals or the Trading Company with the CEAct, the Securities Act or any
applicable laws which are material to an investor’s decision to invest in a
Member.
 
 
 

--------------------------------------------------------------------------------

 
(xi) The Trading Manager and the Trading Manager Principals have all federal,
state and foreign governmental, regulatory and exchange approvals and licenses,
and have effected all filings and registrations with federal, state and foreign
governmental agencies required to conduct their business and to act as described
in the Offering Memoranda or required to perform their obligations under this
Agreement (including, without limitation, registration as a commodity pool
operator under the CEAct and membership in the NFA as a commodity pool operator)
and will maintain all such required approvals, licenses, filings and
registrations for the term of this Agreement.  The Trading Manager’s principals
identified in the Offering Memoranda are all of the Trading Manager Principals.
 
(xii) The Trading Company and the Trading Manager represent that the Trading
Company is a Qualified Eligible Person as defined in CFTC Rule 4.7.  The Trading
Company and Trading Manager consent to the account being treated by the Trading
Advisor as an exempt account under CFTC Rule 4.7, and the Trading Company and
the Trading Manager acknowledge that they will not receive a commodity trading
advisor disclosure document from the Trading Advisor that contains all
disclosures required by Part 4 of the CFTC rules.
 
(xiii) The Trading Company and the Trading Manager are and shall remain in
material compliance in all respects with all laws, rules, regulations and orders
of any government, governmental agency or self-regulatory organization
applicable to their business.
 
(xiv) The Trading Company is not, and during the term of this Agreement shall
not be, deemed to be “plan assets” subject to ERISA and/or Section 4975 of the
Code.
 
(xv) The foregoing representations and warranties shall be continuing during the
term of this Agreement and if at any time any event shall occur which could make
any of the foregoing representations or warranties inaccurate, the Trading
Manager shall promptly notify the Trading Advisor of the nature of such event.
 
(b) Covenants of the Trading Manager.  The Trading Manager covenants and
 
agrees that:
 
 
 

--------------------------------------------------------------------------------

 
(i) The Trading Manager shall maintain all registrations and memberships
necessary for the Trading Manager to continue to act as described herein and in
the Offering Memoranda and to all times comply in all respects with all
applicable laws, rules, and regulations, to the extent that the failure to so
comply would have a materially adverse effect on the Trading Manager’s ability
to act as described herein and in the Offering Memoranda.
 
(ii) The Trading Manager shall inform the Trading Advisor immediately as soon as
the Trading Manager, the Trading Company or any of their principals becomes the
subject of any lawsuit, investigation, claim, or proceeding of any regulatory
authority having jurisdiction over such person or becomes a named party to any
litigation materially affecting the business of the Trading Manager or the
Trading Company.  The Trading Manager shall also inform the Trading Advisor
immediately if the Trading Manager or the Trading Company or any of their
officers become aware of any material breach of this Agreement by the Trading
Manager or the Trading Company.
 
(iii) The Trading Manager shall notify the Trading Advisor of any investment
fund or other vehicle that becomes a Member of the Trading Company.
 
(iv) The Trading Manager has or will furnish to the Trading Advisor copies of
the Offering Memoranda of the initial and any future Members, and all amendments
and supplements thereto that refer in any way to the Trading Advisor and
supplemental sales materials (all of the foregoing collectively, the
“Promotional Materials”), in each case as soon as available.  The Trading
Manager will ensure that the Trading Manager or the Members will not utilize (or
cause to be utilized by any selling agent or other third party) any Promotional
Materials, unless the Trading Advisor has received a copy of such Promotional
Materials no less than 5 days in advance of its intended first use and has
approved any information regarding the Trading Advisor contained therein.  In
the event that the Trading Advisor fails to affirmatively object to such
Promotional Material in writing (which may be by email) to the Trading Manager
within such 5 day period, the Trading Advisor shall be deemed to have approved
such Promotional Material for all purposes hereunder.
 
(v) The Trading Manager will furnish, or cause to be furnished, to the Trading
Advisor such other documents and information related to the Trading Company or
the Members or their activities as may reasonably be requested by the Trading
Advisor.
 
12.  
Merger or Transfer of Assets or Business.

 
Upon written notice to the other parties hereto, the Trading Advisor may merge
or consolidate with, or sell or otherwise transfer its advisory business, or all
or a substantial portion of its assets, any portion of its commodity trading
programs, systems or methods, or its goodwill, to any entity that is directly or
indirectly controlled by, controlling, or under common control with, the Trading
Advisor, provided that such entity expressly assumes all obligations of the
Trading Advisor under this Agreement and agrees to continue to operate the
business of the Trading Advisor, substantially as such business is being
conducted on the date hereof.  The Trading Manager or the Trading Company may
merge or consolidate with, or sell or otherwise transfer its business, or all or
a substantial portion of its assets, to any affiliated entity upon written
notice to the other parties hereto.
 
 
 

--------------------------------------------------------------------------------

 
13.  
Complete Agreement.

 
This Agreement constitutes the entire agreement between the parties with respect
to the matters referred to herein, and no other agreement, verbal or otherwise,
shall be binding as between the parties unless in writing and signed by the
party against whom enforcement is sought.
 
14.  
Assignment.

 
Subject to Section 12, hereof, this Agreement may not be assigned by any party
hereto without the express prior written consent of the other parties hereto ;
provided, however, the Trading Manager may assign this Agreement to any
affiliate without the prior written consent of any other party hereto.
 
15.  
Amendment.

 
This Agreement may not be amended except by the written consent of the parties
hereto.  No waiver of any provision of this Agreement shall be implied from any
course of dealings between the parties, from any failure by any party to assert
its rights hereunder or any occasion or series of occasions.
 
16.  
Severability.

 
The invalidity or unenforceability of any provision of this Agreement or any
covenant herein contained shall not affect the validity or enforceability of any
other provision or covenant hereof or herein contained and any such invalid
provision or covenant shall be deemed to be severable.
 
17.  
Closing Certificates.

 
(a) The Trading Advisor shall, at the Members’ initial closing and at the
reasonable request of the Trading Manager at any closing (as described in the
Offering Memoranda), provide the following:
 
(i) To the Trading Manager and the Trading Company, a certificate, dated the
date of any such closing and in form and substance satisfactory to such parties,
to the effect that;
 
(A) the representations and warranties by the Trading Advisor in this Agreement
are true, accurate, and complete in all material respects on and as of the date
of the closing, as if made on the date of the closing; and
 
(B) the Trading Advisor has performed in all material respects all of its
obligations and satisfied in all material respects all of the conditions on its
part to be performed or satisfied under this Agreement, at or prior to the date
of such closing.
 
 
 

--------------------------------------------------------------------------------

 
(ii) To the Trading Manager and the Trading Company, a report as of the closing
date which shall present, for the period from the date after the last day
covered by the historical performance records in the Offering Memoranda to the
latest practicable day before closing, figures which shall be a continuation of
such historical performance records and which shall certify that such figures
are, to the best of such Trading Advisor’s knowledge, accurate in all material
respects.
 
(b) The Trading Manager shall, at the Members’ initial closing and at the
reasonable request of the Trading Advisor at any closing (as described in the
Offering Memoranda), provide the following:
 
(i) To the Trading Advisor, a certificate, dated the date of such closing and in
form and substance satisfactory to the Trading Advisor, to the effect that:
 
(A) the representations and warranties by the Trading Company and the Trading
Manager in this Agreement are true, accurate, and complete on and as of the date
of the closing as if made on the date of the closing;
 
(B) no order preventing or suspending the use of the Offering Memoranda has been
issued by the CFTC, the SEC, any state securities commission, or the NFA or
other self-regulatory organization and no proceedings for that purpose shall
have been instituted or are pending or, to the knowledge of the Trading Manager,
are contemplated or threatened under the CEAct; and
 
(C) The Trading Company and the Trading Manager have performed all of their
obligations and satisfied all of the conditions on their part to be performed or
satisfied under this Agreement with respect to itself or with respect to the
Members at or prior to the date of the closing.
 
18.  
Inconsistent Filings.

 
If the Trading Advisor intends to file, to participate in the filing of, or to
publish any description of the Trading Advisor, or of its respective principals
or trading approaches that is materially inconsistent with those in the
Disclosure Document, the Trading Advisor shall inform the Trading Manager of
such intention and shall furnish copies of all such filings or publications at
least ten Business Days prior to the date of filing or publication.
 
19.  
Disclosure Documents.

 
During the term of this Agreement, upon the reasonable request of the Trading
Manager, the Trading Advisor shall furnish to the Trading Manager promptly
copies of all disclosure documents, information documents, offering memoranda or
similar documents used by the Trading Advisor.  The Trading Manager hereby
acknowledges on behalf of the Trading Company receipt of the Confidential
Information Memorandum dated May 2009 of the Rotella Polaris Fund, LLC (the
“Disclosure Document”).
 
 
 

--------------------------------------------------------------------------------

 
20. Track Record.  The track record and other performance information of the
Members shall be the property of the Trading Manager and not the Trading
Advisor.
 
21.  
Use of Name.

 
(a) The Trading Advisor hereby consents to the non-exclusive use by the Trading
Company of (a) the name “Morgan Stanley Managed Futures Rotella I, LLC”, with
respect to the Trading Company and (b) the name “Morgan Stanley Managed Futures
Rotella I, LLC” in any documentation regarding the Trading Company, only so long
as the Trading Advisor serves as a sole trading advisor to the Trading
Company.  Each of the Trading Company and the Trading Manager agree to indemnify
and hold harmless, jointly and severally, the Trading Advisor, its partners,
directors, officers, affiliates, employees and agents from and against any and
all costs, losses, claims, damages or liabilities, joint or several, including,
without limitation, attorneys' fees and disbursements, which may arise out of
the Trading Company's or the Trading Manager's misuse of the name “Morgan
Stanley Managed Futures Rotella I, LLC” or out of any breach of, or failure to
comply with, this Section 21.
 
(b) Upon termination of this Agreement, the Trading Company, at its expense, as
promptly as practicable:  (i) shall take all necessary action to cause the
Offering Memoranda and organizational documents of the Trading Company to be
amended in order to eliminate any reference to “Rotella” (except to the extent
required by law, regulation or rule); and (ii) shall cease to use in any other
manner, including, but not limited to, use in any supplemental sales material,
the name “Rotella” or any name, mark or logo type derived from it or similar to
it (except to the extent required by law, regulation or rule).
 
22.  
Notices.

 
All notices required to be delivered under this Agreement shall be in writing
and shall be effective when delivered personally on the day delivered, by
facsimile on receipt confirmation, by email followed by delivery of an original,
or when given by registered or certified mail, postage prepaid, return receipt
requested, on the second Business Day following the day on which it is so
mailed, 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 Trading Company:
 
Morgan Stanley Managed Futures Rotella I, LLC
c/o Demeter Management LLC
Managed Futures Department
522 Fifth Avenue, 13th Floor
New York, NY  10036
Attn:  Jeremy Beal
Facsimile: (212) 296-6868
Email: Jeremy.Beal@morganstanley.com;
     
if to the Trading Manager:
     
Demeter Management LLC
 
Managed Futures Department
522 Fifth Avenue, 13th Floor
New York, NY  10036
Attn:  Jeremy Beal
Facsimile: (212) 296-6868
Email: Jeremy.Beal@morganstanley.com;
     
With a copy to:
     
Alston & Bird LLP
90 Park Avenue
New York, NY  10016
Attn: Timothy P. Selby
Facsimile: (212) 210-9444
Email: timothy.selby@alston.com
     
if to the Trading Advisor:
 
 
Rotella Capital Management, Inc.
800 Bellevue Way NE, Suite 200
Bellevue, WA  98004
Attn:  Joseph D. Kelly
Facsimile: (425) 827-0380
Email: jkelly@rotellacapital.com
     
With a copy to:
 
 
Winston & Strawn LLP
35 W. Wacker Drive
Chicago, IL  60601-9703
Attn:  Wesley G. Nissen
Facsimile:  (312) 558-5700
Email:  wnissen@winston.com

 
 
 

--------------------------------------------------------------------------------

 
23.  
Continuing Nature of Representations Warranties and Covenants: Survival.

 
All representations, warranties and covenants contained in this Agreement shall
be continuing during the term of this Agreement and the provisions of this
Agreement shall survive the termination of this Agreement with respect to any
matter arising while this Agreement was in effect.  Each party hereby agrees
that as of the date of this Agreement it is, and during its term shall be, in
compliance with its representations, warranties and covenants herein
contained.  In addition, if at any time any event occurs which would make any of
such representations, warranties or covenants not true, the affected party will
use its best efforts to promptly notify the other parties of such fact.
 
24.  
Third-Party Beneficiaries.

 
Except for each of the Members who shall be a third-party beneficiary of the
applicable provisions of this Agreement, this Agreement is not intended and
shall not convey any rights to a party to this Agreement.
 
25.  
Governing Law.

 
This Agreement shall be governed by, and construed in accordance with, the laws
of the State of New York.  If any action or proceeding shall be brought by a
party to this Agreement or to enforce any right or remedy under this Agreement,
each party hereto hereby consents and will submit to the jurisdiction of the
courts of the State of New York or any Federal court sitting in the County, City
and State of New York.  Any action or proceeding brought by any party to this
Agreement 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
the courts of the State of New York or any federal court sitting in the County,
City and State of New York.
 
26.  
Remedies.

 
Subject to the following sentence, in any action or proceeding arising out of
any of the provisions of this Agreement, the Trading Advisor agrees not to seek
any prejudgment equitable or ancillary relief.  The Trading Advisor agrees that
its sole remedy in any such action or proceeding shall be to seek actual
monetary damages for any breach of this Agreement, except that Trading Advisor
may seek a declaratory judgment with respect to the indemnification provisions
of this Agreement (Sections 8 and 21) or may seek injunctive or equitable relief
with respect to the confidentiality and use of name provisions of this Agreement
(Sections 1(c) and d, and 21).
 
27.  
Headings.

 
Headings to sections herein are for the convenience of the parties only and are
not intended to be part of or to affect the meaning or interpretation of this
Agreement.
 
28.  
Successors.

 
This Agreement including the representations, warranties and covenants contained
herein shall be binding upon and inure to the benefit of the parties hereto,
their successors and permitted assigns, and no other person shall have any right
or obligation under this Agreement.
 
 
 

--------------------------------------------------------------------------------

 
29.  
Counterparts.

 
This Agreement may be executed in counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same instrument.
 
30.  
Waiver of Breach.

 
The waiver by any party of a breach of any provision of this Agreement shall not
operate or be construed as a waiver of any subsequent breach or of a breach by
any other party.  The failure of a party to insist upon strict adherence to any
provision of the Agreement shall not constitute a waiver or thereafter deprive
such party of the right to insist upon strict adherence.
 

--------------------------------------------------------------------------------

 
1 Confidential material redacted and filed separately with the Commission.
 
2 Confidential material redacted and filed separately with the Commission.
 
3 Confidential material redacted and filed separately with the Commission.

 
 

--------------------------------------------------------------------------------

 

PURSUANT TO AN EXEMPTION FROM THE COMMODITY FUTURES TRADING COMMISSION IN
CONNECTION WITH ACCOUNTS OF QUALIFIED ELIGIBLE PERSONS, THIS BROCHURE OR ACCOUNT
DOCUMENT IS NOT REQUIRED TO BE, AND HAS NOT BEEN, FILED WITH THE
COMMISSION.  THE COMMODITY FUTURES TRADING COMMISSION DOES NOT PASS UPON THE
MERITS OF PARTICIPATING IN A TRADING PROGRAM OR UPON THE ADEQUACY OR ACCURACY OF
COMMODITY TRADING ADVISOR DISCLOSURE.  CONSEQUENTLY, THE COMMODITY FUTURES
TRADING COMMISSION HAS NOT REVIEWED OR APPROVED THIS TRADING PROGRAM OR THIS
BROCHURE OR ACCOUNT DOCUMENT.
 
IN WITNESS WHEREOF, this Agreement has been executed for and on behalf of the
undersigned as of the day and year first above written.
 

 
MSSB MANAGED FUTURES ROTELLA I, LLC
by Demeter Management LLC
Trading Manager
 
By                                                      
Walter Davis
Chairman and President
     
DEMETER MANAGEMENT LLC
 
 
By                                                      
Walter Davis
Chairman and President
     
ROTELLA CAPITAL MANAGEMENT, INC.
By                                                      
Rosemarie Rotella
President

 
 

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EXHIBIT A
 

Morgan Stanley Managed Futures
MSC Fund Operations Procedures

Following is a list of abbreviations used in this Exhibit A:
·  
“CTA” shall mean Rotella Capital Management, Inc.

·  
“Fund(s)” refers to Morgan Stanley Managed Futures Funds that utilize
MS&Co/MSIL/MSCG as a clearing commodity broker.

·  
“Futures” is used to identify exchange traded futures, or forward contracts, and
options on the same, that are cleared through a clearing house.

·  
“FX” is used to identify non-exchange traded forward currency contracts, and
options on the same, which are settled directly between the principals of the
trades.

·  
“Trading Manager” shall mean Demeter Management LLC.

·  
“MF” is Morgan Stanley Managed Futures.

·  
“MSC” is MS&Co. and/or MSIL and/or MSCG (the Clearing Commodity Broker or FX
Counterparty, as appropriate).

·  
“MS&Co” is Morgan Stanley & Co., Inc. a subsidiary of Morgan Stanley (the
Clearing Commodity Broker or FX (Non-Options) Counterparty as appropriate).

·  
“MSIL” is Morgan Stanley International plc, a subsidiary of Morgan Stanley (a
sub Clearing Commodity Broker).  MSIL clears London Metal Exchange (“LME”)
transactions on behalf of the Funds.

·  
“MSCG” is Morgan Stanley Capital Group a subsidiary of Morgan Stanley (the FX
Options Counterparty).

CONTACT INFORMATION:

 
 

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Following are the Morgan Stanley departments involved in servicing the Funds and
the corresponding contact information.
Abbreviation
Department
Primary Contact
Telephone
E-mail
Futures Desk
MSC Futures Trading Desk
Brian Jackman
Craig Abruzzo
James Stedman
212.761.1782
212.762.5139
212.761.1093
Brian.Jackman@morganstanley.com
Craig.Abruzzo@morganstanley.com
James.Stedman@morganstanley.com
Futures Ops
MSC Futures Operations
Steve Bucello
Erik Barry
212.276.0477
212.276.0578
Steve.Bucello@morganstanley.com
Erik.Barry@morganstanley.com
FX Desk
MSC Foreign Exchange Trading Desk
Rich Condon
Julia Clancy Sands
John Silver
212.761.2700
212.761.2700
212.761.2700
Richard.Condon@morganstanley.com
Julia.Sands@morganstanley.com
John.Silver@morganstanley.com
FX Ops
MSC Foreign Exchange Operations
John Fusco
718.754.4868
John.Fusco@morganstanley.com
MF Accounting
Morgan Stanley Managed Futures Accounting
Joe Tromello
Kevin Scully
917.790.5702
917.790.5701
Joe.Tromello@morganstanley.com
Kevin.Scully@morganstanley.com
MF Ops
Morgan Stanley Managed Futures Operations
Laura Finne
 
212.296.6813
 
Laura.Finne@morganstaley.com
MF Investment Management
Morgan Stanley Managed Futures Investment Management
Patrick Egan
Alper Daglioglu
212.296.6808
212.296.6807
Patrick.Egan@morganstanley.com
Alper.Daglioglu@morganstanley.com
MF Planning
Morgan Stanley Managed Futures Planning and Reporting
Chris Barry
212.296.6812
Chris.Barry@morganstanley.com

 
 

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FUND ACCOUNTS:
Account Configuration
·  
Futures and Futures Options Trading - For each CTA trading program three Fund
trading accounts will be assigned.  A MS&Co segregated account, prefix 052.  A
MS&Co secured account, prefix 05A.  A MSIL non-regulated (by the CFTC) account,
prefix 045.

·  
FX (Non-Options) Trading - One Fund account for each CTA trading program will be
assigned at MS&Co, prefix 058.

·  
FX Options Trading – One Fund account for each CTA trading program will be
assigned at MSCG (if needed), prefix 057.

·  
Excess and FX Custody Accounts – For each CTA trading program two Fund accounts
will be set up at MS&Co.  One account will be designated as a custody account
for MS&Co FX.  MF Ops will maintain equity in the custody account sufficient to
cover margin requirements of the FX trading account.  The second account will
contain the balance of excess equity that is not required in the custody and
futures trading accounts.

Statements
·  
Futures – The CTA should contact Futures Ops regarding access to Fund futures
account statements.

·  
FX – The CTA should contact FX Ops regarding access to Fund FX account
statements.

·  
Excess and Custody – The CTA should contact MF Ops regarding access to the Fund
account statements at MS&Co.

 
 

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FX TRADING:
FX Order Execution
·  
FX trading of the Funds must be executed through the MSC FX Desk, unless the
Trading Manager otherwise agrees in a form acceptable to the Trading
Manager.  The CTA should contact the MSC FX Desk for information on trade
execution procedures.

·  
When trading FX Options, all premiums (on outright trades and cross currency
trades) must be booked at the clearing broker so that the premium is stated in
USD.

EFP Order Execution
·  
The CTA may utilize the FX Desk to execute EFP transactions.  The futures leg of
an EFP will be subject to the futures brokerage fee.  The CTA should contact the
FX Desk for information on EFP trade execution procedures.

Foreign Currency Conversions
·  
The CTA is responsible for conversion into US dollars of all Fund foreign
currency balances created as a result of futures and/or FX trading.  The CTA, at
its own discretion, should place conversion orders directly to the FX desk.

FUTURES TRADING:
Order Execution Service
·  
The MSC Futures Desk can provide the CTA with order execution facilities.  The
CTA should contact the Futures Desk for information on trade execution
procedures.

“Give Up” Order Execution
·  
The CTA shall ensure that a “give-up” execution agreement is in place prior to
the execution of any trade through a floor broker in accordance with this
Agreement or as otherwise provided in writing to the CTA by the Trading Manager.

·  
On exchanges allowing “give up” execution, the CTA may have orders executed away
from MSC and give up trades to MSC for clearing.  The CTA should contact Futures
Ops for information on trade “give up” procedures.  The CTA should ensure that
executing brokers give trades up on a timely basis.  The CTA should ensure that
executing brokers make timely payment on price adjustments, when
applicable.  For futures trades at exchanges where give-up execution is not
allowed, the CTA must use the execution facilities provided by the Clearing
Commodity Broker.

“Give Up” Agreements
·  
The CTA may authorize payment of an execution service fee (“Give-Up Fee”) only
to the executing clearing firm or the floor broker (the “Executing Broker”) that
directly gives the futures trade to the Clearing Commodity Broker for such
clearance, and in an amount not greater than the amount permitted by the Trading
Manager from time to time (the “Execution Allowance”).  The Execution Allowance
shall be based on the Trading Manager’s assessment for prevailing competitive
rates for Give-Up Fees.

·  
The four party FIA/FOA uniform “give up” agreement is the acceptable form for
futures “give ups”.  The “Morgan Stanley Managed Futures Give Up Policy and
Billing Procedures” and “Morgan Stanley Managed Futures Execution Allowance”
schedule will be made part of each “give up” agreement.  The trader version
FIA/FOA EFP agreement is the acceptable form for EFP “give ups”.  The CTA should
send agreements that have been signed by both the CTA and executing broker to MF
Ops, attention Laura Finne, Morgan Stanley, Managed Futures, 522 Fifth Avenue,
13th Floor, New York, NY  10036.

“Give Up” Execution Payment
·  
Give Up Fee Bills in amounts up to the Execution Allowance will be processed by
Futures Ops, with notice provided to the CTA.  To the extent that such bills
will be greater than the Execution Allowance, the CTA will obtain the prior
written consent of the Trading Manager.  Refer to the “Morgan Stanley Managed
Futures Give Up Policy and Billing Procedures” for specific information.

·  
The CTA shall provide that information which may reasonably be requested by the
Trading Manager to verify the Give-Up Fees processed by Futures Ops.

 
 

--------------------------------------------------------------------------------

 
ACCOUNT MAINTENANCE:
Trade Allocations
·  
The CTA is responsible for determining the trade allocation procedure for Fund
trading accounts, in accordance with CFTC regulations.  The CTA should ensure
that the procedure was followed correctly, and that trades are booked
accordingly in Fund accounts.

Trade Reporting; (Futures)
·  
The CTA is responsible for reporting all trades to Futures Ops on a timely basis
to facilitate clearing and reduce operational risk.  The CTA should contact
Futures Ops for additional information.

Daily Trade Checkout
·  
The CTA is responsible for daily, end of trading day, checkout of all trades
(including currency conversion trades) with Futures and FX Ops.  The CTA should
contact Futures and FX Ops to determine specific checkout procedures.

Daily Statement Reconciliation
·  
The CTA is responsible for daily statement trade activity and position balancing
with FX and Futures Operations.  The CTA should contact FX and Futures Ops to
determine specific balancing procedures.

·  
The CTA should provide a daily, trade reconciliation for each Fund account to MF
Ops, by 10:00 a.m. EST/EDT.  Reconciliation reports can be emailed to
mf.ops@morganstanley.com and should specify trades to be added or canceled in
each account, with a valuation versus the current settlement price of the
product, and any pending cash adjustments due from executing brokers or for
bookkeeping corrections.  (MF Ops provides MF Accounting/the Administrator with
adjusting information for the calculation of NAV.)  Please contact MF Ops if you
have any questions regarding this procedure.

·  
The CTA should notify MF Ops of any incorrect settlement prices it becomes aware
of with regard to the MSC account statements of a Fund.

Monitoring of Delivery Periods and Option Expirations
·  
The CTA is responsible for monitoring delivery periods (first notice dates and
last trade dates), option expirations (option expiration and last trade dates),
and forward settlement and/or maturity dates.

·  
The CTA should take appropriate actions to ensure that futures contracts do not
result in delivery.

·  
The CTA should ensure that their intentions regarding any open option positions,
at the time of expiration, have been communicated appropriately to the Futures
or FX Ops areas.  Contact Futures and FX Ops for specific communication
procedures.

Margin Maintenance and Cash Transaction (Journal) Reconciliation
·  
MF Ops is responsible for balancing of all journal entries in all Fund accounts
and for ensuring the requisite corrective action is taken for each reconciling
item.

·  
MF Ops is responsible for the authorization of Fund margin transfers between MSC
and MS&Co accounts for the purpose of maintaining equity (and/or collateral) in
amounts sufficient to meet Fund margin requirements in the MSC Futures accounts
and the FX custody accounts.

 
 

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TRADING LEVEL NOTIFICATION:
·  
For new trading allocations, MF Prod Org will provide notification to the CTA of
trading authorization and the trading commencement date, along with notification
of the initial trading level.

·  
Thereafter, notification of estimated monthly net additions/withdrawals will be
distributed by MF Strat Plan.  On the third to last Business Day of each month a
preliminary estimate will be provided.  On the first Business Day of each month
a final estimate will be given.  Any material adjustment (1% of account equity)
from the final estimate to the actual will be provided.  Notification will be
made via fax or email and the CTA will be asked to acknowledge receipt via fax
or email.  Questions regarding this procedure can be directed to MF Strat Plan.

·  
Subsequent to a Fund’s monthly closing, actual additions and withdrawals will be
processed by MF Accounting/the Administrator via journal entry in the Fund
“excess” account at MS&Co.

·  
Any other trading level/asset allocation changes will be communicated in writing
from MF Prod Org or MF Strat Plan.

FUND ACCOUNTING:
Net Asset Value Calculation
·  
MF Accounting/the Administrator is responsible for determination of daily NAV
estimates for the Funds.

·  
MF Accounting/the Administrator will determine the actual month end NAV of a
Fund during the monthly closing process.

Brokerage Commission and Transaction Fees
·  
Brokerage commissions for each Fund will be charged in a manner consistent with
the prospectus or offering memorandum.  The CTA should contact MF Accounting/the
Administrator for additional information.

Fund Fee Processing
·  
Fund interest and all Fund fees, exclusive of brokerage commissions and
transaction fees, will be processed in a Funds “excess” account at MS&Co.

·  
MF Accounting/the Administrator will determine fees due to the CTA during the
monthly closing process and notify the CTA of the fees via the monthly
performance tables.  The CTA should provide contact information regarding fees
to MF Accounting/the Administrator.

·  
MF Accounting/the Administrator will make payment of fees to the CTA via wire
transfer.  The CTA should provide wire instructions to MF Accounting/the
Administrator.

ERROR POLICY:
·  
The CTA shall inform the Trading Manager and the relevant Clearing Commodity
Broker of trading errors to the extent required by the second sentence of
Section 2(d)(iii) of this Agreement.  The provisions of Section 2(d) of this
Agreement shall be interpreted to mean that the benefit of all profitable
trading errors and the detriment of all unprofitable trading errors made by the
CTA when trading on behalf of the Fund shall be awarded to the Fund, except for
the detriment of unprofitable trading errors made by the CTA that are subject to
Section 2(d)(ii), which shall be borne by the CTA.

BORROWING:
The CTA shall not use borrowed money to leverage any trades, unless otherwise
approved by the Trading Manager.

 
 
 

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EXHIBIT B
 
COMMODITY TRADING AUTHORITY
 
Dear: Rotella Capital Management, Inc.
 
MSSB Managed Futures Rotella I, LLC (the “Trading Company”) and Demeter
Management LLC, the Trading Company’s Trading Manager (the “Trading Manager”) do
hereby make, constitute and appoint you as the Trading Company’s
attorney-in-fact to buy and sell futures and forward contracts through such
futures commission merchants as shall be agreed on by you and the Trading
Manager on behalf of the Trading Company, pursuant to the trading program
identified in the Agreement among the Trading Company, the Trading Manger and
you as of the 1st day of July, 2009, as amended or supplemented, and in
accordance with the terms and conditions of said Agreement.
 
This authorization shall terminate and be null, void and of no further effect
simultaneously with the termination of the said Agreement.
 

 
Very truly yours,
 
 
MSSB MANAGED FUTURES ROTELLA I, LLC
by Demeter Management Corporation
Trading Manager
 
By                                                      
Walter Davis
Chairman and President
     
DEMETER MANAGEMENT LLC
 
 
By                                                      
Walter Davis
Chairman and President

 

B-

 
 

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EXHIBIT C
 
FUTURES INTERESTS TRADED
 

 

 

 

 
 

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