EXHIBIT 10.1(a)

SECOND AMENDED AND RESTATED MANAGEMENT AGREEMENT

This SECOND AMENDED AND RESTATED MANAGEMENT AGREEMENT made as of the 1st day of
August, 2013, is by and among CERES MANAGED FUTURES LLC, a Delaware limited
liability company (“CMF”), COMMODITY ADVISORS FUND L.P., a Delaware limited
partnership (the “Partnership”) and J E MOODY & COMPANY LLC, a Delaware limited
liability company (the “Advisor” or “JE Moody” together with CMF and the
Partnership, the “Parties”). This Agreement amends and restates the Amended and
Restated Management Agreement dated as of October 1, 2012 (the “Existing
Agreement”) by and among the Parties.

 

W I T N E S S E T H :

WHEREAS, CMF is the general partner of the Partnership, a limited partnership
organized for the purpose of speculative trading of commodity interests,
including futures contracts, options, swaps, forward contracts and other
over-the-counter instruments and derivatives on U.S. and non-U.S. markets with
the objective of achieving capital appreciation, such trading is to be conducted
directly or through an investment in JEM Master Fund L.P., a Delaware limited
partnership (the “Master Fund”) of which CMF is the general partner and JE Moody
is the advisor; and

WHEREAS, the Third Amended and Restated Limited Partnership Agreement dated as
of September 30, 2012 (the “Partnership Agreement”) permits CMF to delegate to
one or more commodity trading advisors CMF’s authority to make trading decisions
for the Partnership; and

WHEREAS, the Advisor is registered as a commodity trading advisor with the
Commodity Futures Trading Commission (“CFTC”) and is a member of the National
Futures Association (“NFA”); and

WHEREAS, CMF is registered as a commodity trading advisor and a commodity pool
operator with the CFTC and is a member of NFA; and

WHEREAS, this Agreement is being amended to, among other things, (i) include new
language concerning the treatment of certain confidential information,
(ii) shorten certain notice periods required for the termination of this
Agreement, and (iii) to make other appropriate changes; and

WHEREAS, the Parties have entered into the Existing Agreement and now wish to
amend and restate the Existing Agreement as set out in this Agreement; and

WHEREAS, the Parties wish to enter into this Agreement in order to set forth the
terms and conditions upon which the Advisor will render and implement advisory
services in connection with the conduct by the Partnership of its commodity
trading activities during the term of this Agreement.

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NOW, THEREFORE, the parties agree as follows:

1. DUTIES OF THE ADVISOR. (a) For the period and on the terms and conditions of
this Agreement, the Advisor shall have sole authority and responsibility, as one
of the Partnership’s agents and attorneys-in-fact, for directing the investment
and reinvestment of the assets and funds of the Partnership allocated to it from
time to time by CMF in commodity interests, including commodity futures
contracts, options and forward contracts. The Advisor may also engage in spot,
swap and other derivative transactions with the prior written approval of CMF.
All such trading on behalf of the Partnership shall be (i) in accordance with
the trading policies set forth in the Partnership’s Private Placement Offering
Memorandum and Disclosure Document dated as of June 30, 2013, as supplemented
(the “Memorandum”), as such trading policies may be changed from time to time
upon receipt by the Advisor of prior written notice of such change, and
(ii) pursuant to the trading strategy selected by CMF to be utilized by the
Advisor in managing the Partnership’s assets. CMF has initially selected the
Advisor’s JEM Commodity Relative Value Program (the “Program”), as described in
Appendix A attached hereto, to manage the Partnership’s assets allocated to it.
Any open positions or other investments at the time of receipt of such notice of
a change in trading policy shall not be deemed to violate the changed policy and
shall be closed or sold in the ordinary course of trading. The Advisor may not
deviate from the trading policies set forth in the Memorandum without the prior
written consent of the Partnership given by CMF. The Advisor makes no
representation or warranty that the trading to be directed by it for the
Partnership will be profitable or will not incur losses.

(b) CMF acknowledges receipt of the description of the Advisor’s Program,
attached hereto as Appendix A. All trades made by the Advisor for the account of
the Partnership, whether directly or indirectly through the Master Fund, shall
be made through such commodity broker or brokers as CMF shall direct, and the
Advisor shall have no authority or responsibility for selecting or supervising
any such broker in connection with the execution, clearance or confirmation of
transactions for the Partnership or for the negotiation of brokerage rates
charged therefor. However, the Advisor, with the prior written permission (by
original, fax copy or email copy) of CMF, may direct any and all trades in
commodity futures and options to a futures commission merchant or independent
floor broker it chooses for execution with instructions to give-up the trades to
the broker designated by CMF, provided that the futures commission merchant or
independent floor broker and any give-up or floor brokerage fees are approved in
advance by CMF. All give-up or similar fees relating to the foregoing shall be
paid by the Partnership after all parties have executed the relevant give-up
agreements (via EGUS or by original, fax copy or email copy).

(c) The allocation of the Partnership’s assets to the Advisor will be traded by
the Advisor in accordance with the Program, as described in Appendix A; provided
that CMF and the Partnership agree that, for so long as the Partnership trades
through the Master Fund, the amount of leverage applied to the assets of the
Partnership allocated to the Advisor by CMF shall be in accordance with the
terms of the agreement by and among CMF, the Master Fund and the Advisor, dated
as of August 1, 2013, as such agreement may be amended from time to time. In the
event the Advisor wishes to use a trading system or methodology other than or in
addition to the Program in connection with its trading for the Partnership,
either in whole or in part, it may not do so unless the Advisor gives CMF prior
written notice of its

 

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intention to utilize such different trading system or methodology and CMF
consents thereto in writing. In addition, the Advisor will provide five days’
prior written notice to CMF of any change in the trading system or methodology
to be utilized for the Partnership which the Advisor deems material. If the
Advisor deems such change in system or methodology or in markets traded to be
material, the changed system or methodology or markets traded will not be
utilized for the Partnership without the prior written consent of CMF. In
addition, the Advisor will notify CMF of any changes to the trading system or
methodology that would require a change in the description of the trading
strategy or methods described in Appendix A to be materially accurate. Further,
the Advisor will provide the Partnership in Appendix B to this Agreement, as may
be amended from time to time, with a current list of all commodity interests to
be traded for the Partnership’s account and the Advisor will not trade any
additional commodity interests for such account without providing notice thereof
to CMF and receiving CMF’s written approval. The Advisor also agrees to provide
CMF, on a monthly basis, with a written report of the assets under the Advisor’s
management together with all other matters deemed by the Advisor to be material
changes to its business not previously reported to CMF. The Advisor further
agrees that it will convert foreign currency balances (not required to margin
positions denominated in a foreign currency) to U.S. dollars no less frequently
than monthly. U.S. dollar equivalents in individual foreign currencies of more
than $100,000 will be converted to U.S. dollars within one business day after
such funds are no longer needed to margin foreign positions.

(d) The Advisor agrees to make all material disclosures to the Partnership
regarding itself and its principals as defined in Part 4 of the CFTC’s
regulations (“principals”), members, directors, officers and employees, their
trading performance and general trading methods, its customer accounts (but not
the identities of or identifying information with respect to its customers) and
otherwise as are required in the reasonable judgment of CMF to be made in any
filings required by federal or state law or NFA rule or order. Notwithstanding
Sections 1(d) and 4(d) of this Agreement, the Advisor is not required to
disclose the actual trading results of proprietary accounts of the Advisor or
its principals unless CMF reasonably determines that such disclosure is required
in order to fulfill its fiduciary obligations to the Partnership or the
reporting, filing or other obligations imposed on it by federal or state law or
NFA rule or order.

(e) The Advisor understands and agrees that CMF may designate other trading
advisors for the Partnership and apportion or reapportion to such other trading
advisors the management of an amount of Net Assets (as defined in Section 3(b)
hereof) as it shall determine in its absolute discretion. The designation of
other trading advisors and the apportionment or reapportionment of Net Assets to
any such trading advisors pursuant to this Section 1 shall neither terminate
this Agreement nor modify in any regard the respective rights and obligations of
the parties hereunder.

(f) CMF may, from time to time, in its absolute discretion, select additional
trading advisors and reapportion funds among the trading advisors for the
Partnership as it deems appropriate. CMF shall use its best efforts to make
reapportionments, if any, as of the first day of a month. The Advisor agrees
that it may be called upon at any time promptly to liquidate positions in CMF’s
sole discretion so that CMF may reallocate the Partnership’s assets, meet margin
calls on the Partnership’s account, fund redemptions, or for any other reason,
except that CMF will not require the liquidation of specific positions by the
Advisor. CMF will use its best efforts to give two days’ prior notice to the
Advisor of any reallocations or liquidations.

 

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(g) The Advisor shall assume financial responsibility for any errors committed
or caused by it in transmitting orders for the purchase or sale of commodity
interests for the Partnership’s account including payment to the brokers of the
floor brokerage commissions, exchange, NFA fees, and other transaction charges
and give-up charges incurred by the brokers on such trades. The Advisor’s errors
shall include, but not be limited to, inputting improper trading signals or
communicating incorrect orders to the commodity brokers. The Advisor shall have
an affirmative obligation to promptly notify CMF in accordance with the
provisions of Section 8(a)(iii) of any errors with respect to the account, and
the Advisor shall use its best efforts to identify and promptly notify CMF of
any order or trade which the Advisor reasonably believes was not executed in
accordance with its instructions to any broker utilized to execute orders for
the Partnership.

(h) (i) The Advisor, CMF and the Partnership will keep confidential the terms
hereof and each transaction hereunder, and all related agreements, business
practices, financial data, procedures and policies hereunder or otherwise
relating to either of them or their affiliates that are not publicly available
(herein, “Confidential Information”). Confidential Information shall also
include, but not be limited to, each party’s respective proprietary or
confidential (A) market and/or computerized investment approaches, strategies,
systems or programs for trading, hedging, asset allocation or portfolio
construction, (B) mathematical models, simulated results, simulation software,
price or research databases, other research, algorithms, numerical techniques,
analytical results, technical data, strategies and methodologies, (C) trading
signals, trading orders or executed trades (including prices, quantities and
times), asset allocation targets, position sizes and portfolio holdings,
(D) business methods, trade secrets, internal marketing materials or memoranda,
corporate policies, supervisory and risk control techniques and procedures, fee
and compensation structures, client lists and contact lists, knowledge of
facilities and any books and records made available to any party, (E) any other
proprietary materials or information, (F) any synopses or descriptions of the
foregoing and (G) due diligence materials and other information provided by the
Advisor to CMF and the Partnership or provided by CMF and the Partnership to the
Advisor, whether prior to or after execution of this Agreement and whether or
not marked confidential; but does not include information which (w) was or
becomes generally available to the public other than as a result of a disclosure
by the receiving party or its representatives in violation hereof, (x) was or
becomes available to the receiving party on a non-confidential basis prior to
its disclosure by the disclosing party or its representatives or agents to the
receiving party or its representatives, (y) becomes available to the receiving
party or its representatives on a non-confidential basis from a source other
than the disclosing party or its representatives or agents, provided that such
source is not known to the receiving party to be bound by a confidentiality
agreement with the disclosing party or its representatives or agents or
otherwise prohibited from transmitting the information to the receiving party or
its representatives by a contractual, legal or fiduciary obligation, or (z) is
independently developed by the receiving party or on its behalf, provided that
such development was by the receiving party or on the receiving party’s behalf
without the use of, or any reference to, the Confidential Information.

 

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(ii) Each party shall keep Confidential Information in strictest confidence
except (A) to the extent necessary for purposes hereof to communicate it to the
each such party’s officers, employees and counsel or to any broker or service
provider, (B) to the extent necessary to comply with any requirement or demand
of any self-regulatory, regulatory, judicial or taxing authority having
jurisdiction over any of them, or (C) as otherwise required by applicable law or
regulation, including the reporting and disclosure requirements of the CFTC, NFA
and Securities and Exchange Commission.

(iii) CMF and the Partnership shall not use the Advisor’s Confidential
Information as a basis on which to (A) trade, on behalf of itself or its
investors or clients, in accounts not managed by the Advisor, (B) to
reverse-engineer, replicate or develop or to aid others to reverse-engineer,
replicate or develop competing or similar strategies to those of the Advisor, or
(C) to use the Advisor’s Confidential Information for purposes other than
enabling, conducting and monitoring the trading advisory services specified in
this Agreement.

(iv) Each party will be permitted to disclose the track record of the Program,
and may disclose the identity of the other party.

2. INDEPENDENCE OF THE ADVISOR. For all purposes herein, the Advisor shall be
deemed to be an independent contractor and, unless otherwise expressly provided
or authorized, shall have no authority to act for or represent the Partnership
in any way and shall not be deemed an agent, promoter or sponsor of the
Partnership, CMF, or any other trading advisor. The Advisor shall not be
responsible to the Partnership, CMF, any trading advisor or any limited partners
for any acts or omissions of any other trading advisor to the Partnership.

3. COMPENSATION. (a) In consideration of and as compensation for all of the
services to be rendered by the Advisor to the Partnership under this Agreement,
the Partnership shall pay the Advisor (i) an incentive fee payable quarterly
equal to 20% of New Trading Profits (as such term is defined below) earned by
the Advisor for the Partnership and (ii) a monthly fee for professional
management services equal to 1/12 of 2% (2% per year) of the month-end Net
Assets of the Partnership allocated to the Advisor (computed monthly by
multiplying the Partnership’s Net Assets allocated to the Advisor as of the last
business day of each month by 2% and dividing the result thereof by 12). For the
avoidance of doubt, the leverage employed by the Program will have no impact on
fee calculations.

(b) “Net Assets” shall have the meaning set forth in Section 7(d)(2) of the
Partnership Agreement and, unless the Advisor consents in writing, without
regard to further amendments thereto, provided that in determining the Net
Assets of the Partnership on any date, no adjustment shall be made to reflect
any distributions, redemptions or incentive fees payable as of the date of such
determination.

(c) “New Trading Profits” shall mean the excess, if any, of Net Assets managed
by the Advisor at the end of the fiscal quarter over Net Assets managed by the
Advisor at the end of the highest previous fiscal quarter or Net Assets
allocated to the Advisor at the date trading commences by the Advisor for the
Partnership, whichever is higher, and as further adjusted to eliminate the
effect on Net Assets resulting from new capital contributions,

 

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redemptions, reallocations or capital distributions, if any, made during the
fiscal quarter decreased by interest or other income, not directly related to
trading activity, earned on the Partnership’s assets during the fiscal quarter,
whether the assets are held separately or in margin accounts. Ongoing expenses
will be attributed to the Advisor based on the Advisor’s proportionate share of
Net Assets. Ongoing expenses will not include expenses of litigation not
involving the activities of the Advisor on behalf of the Partnership. Ongoing
expenses include offering and organizational expenses of the Partnership. No
incentive fee shall be paid to the Advisor until the end of the first full
calendar quarter of the Advisor’s trading for the Partnership, which fee shall
be based on New Trading Profits (if any) earned from the commencement of trading
by the Advisor on behalf of the Partnership through the end of the first full
calendar quarter of such trading. Interest income earned, if any, will not be
taken into account in computing New Trading Profits earned by the Advisor. If
Net Assets allocated to the Advisor are reduced due to redemptions,
distributions or reallocations (net of additions), there will be a corresponding
proportional reduction in the related loss carryforward amount that must be
recouped before the Advisor is eligible to receive another incentive fee.

(d) Quarterly incentive fees and monthly management fees shall be paid within
twenty (20) business days following the end of the period for which such fee is
payable. In the event of the termination of this Agreement as of any date which
shall not be the end of a calendar quarter or calendar month, as the case may
be, the quarterly incentive fee shall be computed as if the effective date of
termination were the last day of the then current quarter and the monthly
management fee shall be prorated to the effective date of termination. If,
during any month, the Partnership does not conduct business operations or the
Advisor is unable to provide the services contemplated herein for more than two
successive business days, the monthly management fee shall be prorated by the
ratio which the number of business days during which CMF conducted the
Partnership’s business operations or utilized the Advisor’s services bears in
the month to the total number of business days in such month.

(e) The provisions of this Section 3 shall survive the termination of this
Agreement.

4. RIGHT TO ENGAGE IN OTHER ACTIVITIES. (a) Except as otherwise provided herein,
the services provided by the Advisor hereunder are not to be deemed exclusive.
CMF on its own behalf and on behalf of the Partnership acknowledges that,
subject to the terms of this Agreement, the Advisor and its officers, directors,
employees and members, may render advisory, consulting and management services
to other clients and accounts. The Advisor and its officers, directors,
employees and members shall be free to trade for their own accounts and to
advise other investors and manage other commodity accounts during the term of
this Agreement and to use the same information, computer programs and trading
strategies, programs or formulas which they obtain, produce or utilize in the
performance of services to CMF for the Partnership. However, the Advisor
represents, warrants and agrees that it believes the rendering of such
consulting, advisory and management services to other accounts and entities will
not require any material change in the Advisor’s basic trading strategies for
the Partnership and will not affect the capacity of the Advisor to continue to
render services to CMF for the Partnership of the quality and nature
contemplated by this Agreement.

 

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(b) If, at any time during the term of this Agreement, the Advisor is required
to aggregate the Partnership’s commodity positions with the positions of any
other person for purposes of applying CFTC- or exchange-imposed speculative
position limits, the Advisor agrees that it will promptly notify CMF in writing
if the Partnership’s positions are included in an aggregate amount which exceeds
the applicable speculative position limit. The Advisor agrees that, if its
trading recommendations are altered because of the application of any
speculative position limits, it will not modify the trading instructions with
respect to the Partnership’s account in such manner as to affect the Partnership
substantially disproportionately as compared with the Advisor’s other accounts.
The Advisor further represents, warrants and agrees that under no circumstances
will it knowingly or deliberately use trading programs, strategies or methods
for the Partnership that are inferior to strategies or methods employed for any
other client or account and that it will not knowingly or deliberately favor any
client or account managed by it over any other client or account in any manner,
it being acknowledged, however, that different trading programs, strategies or
methods may be utilized for differing sizes of accounts, accounts with different
trading policies or risk parameters, accounts experiencing differing inflows or
outflows of equity, accounts that commence trading at different times, accounts
that have different portfolios or different fiscal years, accounts utilizing
different executing brokers and accounts with other differences, and that such
differences may cause divergent trading results.

(c) It is acknowledged that the Advisor and/or its officers, employees,
directors and members presently act, and it is agreed that they may continue to
act, as advisor for other accounts managed by them, and may continue to receive
compensation with respect to services for such accounts.

(d) Subject to the Advisor’s duties of confidentiality to its other clients or
as imposed on the Advisor by applicable rules or regulations, the Advisor agrees
that it shall make such information available to CMF respecting the performance
of the Partnership’s account as compared to the performance of other accounts
managed by the Advisor or its principals, if any, as shall be reasonably
requested by CMF. The Advisor presently believes and represents that existing
speculative position limits will not materially adversely affect its ability to
manage the Partnership’s account given the potential size of the Partnership’s
account and the Advisor’s and its principals’ current accounts and all proposed
accounts for which they have contracted to act as trading advisor.

5. TERM. (a) This Agreement shall continue in effect until June 30, 2014. CMF
may, in its sole discretion, renew this Agreement for additional one-year
periods upon notice to the Advisor not less than 30 days prior to the expiration
of the previous period. At any time during the term of this Agreement, CMF may
terminate this Agreement at any month-end upon 5 days’ notice to the Advisor. At
any time during the term of this Agreement, CMF may elect to immediately
terminate this Agreement if (i) the Net Asset Value per Unit shall decline as of
the close of business on any day to $400 or less; (ii) the Net Assets allocated
to the Advisor (adjusted for redemptions, distributions, withdrawals or
reallocations, if any) decline by 20% or more as of the end of a trading day
from such Net Assets’ previous highest value; (iii) limited partners owning at
least 50% of the outstanding units of the Partnership shall vote to require CMF
to terminate this Agreement; (iv) the Advisor fails to comply with the terms of
this Agreement; (v) CMF, in good faith, reasonably determines that the
performance of the Advisor

 

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has been such that CMF’s fiduciary duties to the Partnership require CMF to
terminate this Agreement; (vi) CMF reasonably believes that the application of
speculative position limits will substantially affect the performance of the
Partnership; (vii) the Advisor fails to conform to the trading policies set
forth in the Partnership Agreement or the Memorandum, as they may be changed
from time to time; (viii) the Advisor merges, consolidates with another entity,
sells a substantial portion of its assets, or becomes bankrupt or insolvent;
(ix) John E. Moody dies, becomes incapacitated, leaves the employ of the
Advisor, ceases to control the Advisor or is otherwise not managing the trading
programs or systems of the Advisor; (x) the Advisor’s registration as a
commodity trading advisor with the CFTC or its membership in NFA or any other
regulatory authority, is terminated or suspended; or (xi) CMF reasonably
believes that the Advisor has or may contribute to any material operational,
business or reputational risk to CMF or CMF’s affiliates. This Agreement will
immediately terminate upon dissolution of the Partnership or upon cessation of
trading by the Partnership prior to dissolution.

(b) The Advisor may terminate this Agreement at any month-end upon 30 days’
written notice to CMF. The Advisor may immediately terminate this Agreement if
CMF’s registration as a commodity pool operator or its membership in NFA is
terminated or suspended.

(c) Except as otherwise provided in this Agreement, any termination of this
Agreement in accordance with this Section 5 shall be without penalty or
liability to any party, except for any fees due to the Advisor pursuant to
Section 3 hereof.

6. INDEMNIFICATION. (a)(i) In any threatened, pending or completed action, suit,
or proceeding to which the Advisor was or is a party or is threatened to be made
a party arising out of or in connection with this Agreement or the management of
the Partnership’s assets by the Advisor or the offering and sale of units in the
Partnership, CMF shall, subject to subsection (a)(iii) of this Section 6,
indemnify and hold harmless the Advisor against any loss, liability, damage,
fine, penalty, obligation, cost, expense (including, without limitation,
attorneys’ and accountants’ fees, collection fees, court costs and other legal
expenses), judgments and awards and amounts paid in settlement actually and
reasonably incurred by it in connection with such action, suit, or proceeding if
the Advisor acted in good faith and in a manner reasonably believed to be in or
not opposed to the best interests of the Partnership, and provided that its
conduct did not constitute negligence, bad faith, recklessness, intentional
misconduct, or a breach of its fiduciary obligations to the Partnership as a
commodity trading advisor, unless and only to the extent that the court or
administrative forum in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
circumstances of the case, the Advisor is fairly and reasonably entitled to
indemnity for such expenses which such court or administrative forum shall deem
proper; and further provided that no indemnification shall be available from the
Partnership if such indemnification is prohibited by Section 16 of the
Partnership Agreement. The termination of any action, suit or proceeding by
judgment, order or settlement shall not, of itself, create a presumption that
the Advisor did not act in good faith and in a manner reasonably believed to be
in or not opposed to the best interests of the Partnership.

(ii) Without limiting subsection (i) above, to the extent that the Advisor has
been successful on the merits or otherwise in defense of any action, suit or

 

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proceeding referred to in subsection (i) above, or in defense of any claim,
issue or matter therein, CMF shall indemnify the Advisor against the expenses
(including, without limitation, attorneys’ and accountants’ fees) actually and
reasonably incurred by it in connection therewith.

(iii) Any indemnification under subsection (i) above, unless ordered by a court
or administrative forum, shall be made by CMF only as authorized in the specific
case and only upon a determination by independent legal counsel in a written
opinion that such indemnification is proper in the circumstances because the
Advisor has met the applicable standard of conduct set forth in subsection
(i) above. Such independent legal counsel shall be selected by CMF in a timely
manner, subject to the Advisor’s approval, which approval shall not be
unreasonably withheld. The Advisor will be deemed to have approved CMF’s
selection unless the Advisor notifies CMF in writing, received by CMF within
five days of CMF’s telecopying to the Advisor of the notice of CMF’s selection,
that the Advisor does not approve the selection.

(iv) In the event the Advisor is made a party to any claim, dispute or
litigation or otherwise incurs any loss or expense as a result of, or in
connection with, the Partnership’s or CMF’s activities or claimed activities
unrelated to the Advisor, CMF shall indemnify, defend and hold harmless the
Advisor against any loss, liability, damage, fine, penalty, obligation, cost or
expense (including, without limitation, attorneys’ and accountants’ fees,
collection fees, court costs and other legal expenses) judgments, awards and
amounts including amounts paid in settlement incurred in connection therewith.

(v) As used in this Section 6(a), the term “Advisor” shall include the Advisor,
its principals, officers, directors, members and employees and the term “CMF”
shall include the Partnership.

(b) (i) The Advisor agrees to indemnify, defend and hold harmless CMF, the
Partnership and their affiliates against any loss, liability, damage, fine,
penalty, obligation, cost or expense (including, without limitation, attorneys’
and accountants’ fees, collection fees, court costs and other legal expenses),
judgments and awards and amounts paid in settlement reasonably incurred by them
(A) as a result of the material breach of any material representations and
warranties made by the Advisor in this Agreement, or (B) as a result of any act
or omission of the Advisor relating to the Partnership if (i) there has been a
final judicial or regulatory determination or a written opinion of an arbitrator
pursuant to Section 14 hereof, to the effect that such acts or omissions
violated the terms of this Agreement in any material respect or involved
negligence, bad faith, recklessness or intentional misconduct on the part of the
Advisor (except as otherwise provided in Section 1(g)), or (ii) there has been a
settlement of any action or proceeding with the Advisor’s prior written consent.

(ii) In the event CMF, the Partnership or any of their affiliates is made a
party to any claim, dispute or litigation or otherwise incurs any loss or
expense as a result of, or in connection with, the activities or claimed
activities of the Advisor or its principals, officers, directors, members or
employees unrelated to CMF’s or the Partnership’s business, the Advisor shall
indemnify, defend and hold harmless CMF, the Partnership or any of their
affiliates against any loss, liability, damage, fine, penalty, obligation, cost
or expense (including, without limitation, attorneys’ and accountants’ fees,
collection fees, court costs and other legal expenses) judgments, awards and
amounts including amounts paid in settlement incurred in connection therewith.

 

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(c) In the event that a person entitled to indemnification under this Section 6
is made a party to an action, suit or proceeding alleging both matters for which
indemnification can be made hereunder and matters for which indemnification may
not be made hereunder, such person shall be indemnified only for that portion of
the loss, liability, damage, cost or expense incurred in such action, suit or
proceeding which relates to the matters for which indemnification can be made.

(d) None of the indemnifications contained in this Section 6 shall be applicable
with respect to default judgments, confessions of judgment or settlements
entered into by the party claiming indemnification without the prior written
consent, which shall not be unreasonably withheld or delayed, of the party
obligated to indemnify such party.

(e) The provisions of this Section 6 shall survive the termination of this
Agreement.

7. REPRESENTATIONS, WARRANTIES AND AGREEMENTS.

(a) The Advisor represents and warrants that:

(i) All information with respect to the Advisor and its principals and the
trading performance of any of them that has been provided to CMF, including,
without limitation, the description of the Program contained in Appendix A, is
complete and accurate in all material respects and such information does not
contain any untrue statement of a material fact or omit to state a material fact
that is necessary to make such statements and information therein not
misleading. All references to the Advisor and its principals, if any, in the
Memorandum or a supplement thereto will, after review and approval of such
references by the Advisor prior to the use of such Memorandum in connection with
the offering of Partnership units, be accurate in all material respects, except
that with respect to pro forma or hypothetical performance information in such
Memorandum, if any, this representation and warranty extends only to any
underlying data made available by the Advisor for the preparation thereof and
not to any hypothetical or pro forma adjustments.

(ii) The information with respect to the Advisor set forth in the actual
performance tables in the Memorandum, if any, is based on all of the customer
accounts managed on a discretionary basis by the Advisor’s principals and/or the
Advisor during the period covered by such tables and required to be disclosed
therein, and such tables have been prepared by the Advisor or its agents in
accordance with applicable CFTC and NFA rules and guidance, including, but not
limited to, CFTC Rule 4.25.

(iii) The Advisor will be acting as a commodity trading advisor with respect to
the Partnership and not as a securities investment adviser and is duly
registered as a commodity trading advisor with the CFTC and is a member of NFA,
and is in compliance with such other registration and licensing requirements as
shall be necessary to enable it to perform its obligations hereunder. The
Advisor agrees to maintain and renew such registrations and licenses during the
term of this Agreement, including, without limitation, registration as a
commodity trading advisor with the CFTC and membership in NFA.

 

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(iv) The Advisor is a limited liability company duly organized, validly existing
and in good standing under the laws of the State of Delaware and has full
limited liability company power and authority to enter into this Agreement and
to provide the services required of it hereunder.

(v) The Advisor will not, by acting as a commodity trading advisor to the
Partnership, breach or cause to be breached any undertaking, agreement,
contract, statute, rule or regulation to which it is a party or by which it is
bound.

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

(vii) At any time during the term of this Agreement that an offering memorandum
or a prospectus relating to the Partnership units is required to be delivered in
connection with the offer and sale thereof, the Advisor agrees upon the request
of CMF to promptly provide the Partnership with such information as shall be
necessary so that, as to the Advisor and its principals, such offering
memorandum or prospectus is accurate.

(b) CMF represents and warrants for itself and the Partnership that:

(i) The Memorandum (as from time to time amended or supplemented, which
amendment or supplement shall be approved by the Advisor as to descriptions, if
any, of itself and its actual performance) does not contain any untrue statement
of a material fact or omit to state a material fact which is necessary to make
the statements therein not misleading, except that the foregoing representation
does not apply to any statement or omission concerning the Advisor, if any, in
the Memorandum, made in reliance upon, and in conformity with, information
furnished to CMF by or on behalf of the Advisor expressly for use in the
Memorandum (it being understood that any hypothetical and pro forma adjustments
will not be furnished by the Advisor).

(ii) CMF is a limited liability company duly organized, validly existing and in
good standing under the laws of the State of Delaware and has full limited
liability company power and authority to perform its obligations under this
Agreement.

(iii) CMF and the Partnership have the capacity and authority to enter into this
Agreement on behalf of the Partnership.

(iv) This Agreement has been duly and validly authorized, executed and delivered
on CMF’s and the Partnership’s behalf and is a valid and binding agreement of
CMF and the Partnership enforceable in accordance with its terms.

(v) CMF will not, by acting as the general partner to the Partnership and the
Partnership will not, breach or cause to be breached any undertaking, agreement,
contract, statute, rule or regulation to which it is a party or by which it is
bound which would materially limit or affect the performance of its duties under
this Agreement.

 

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(vi) CMF is registered as a commodity trading advisor and a commodity pool
operator and is a member of NFA, and it will maintain and renew such
registrations and membership during the term of this Agreement.

(vii) The Partnership is a limited partnership duly organized and validly
existing under the laws of the State of Delaware and has full limited
partnership power and authority to enter into this Agreement and to perform its
obligations under this Agreement.

(viii) The Partnership is a qualified eligible person as defined in CFTC Rule
4.7.

8. COVENANTS OF THE ADVISOR, CMF AND THE PARTNERSHIP.

(a) The Advisor agrees as follows:

(i) In connection with its activities on behalf of the Partnership, the Advisor
will comply with all applicable laws, including rules and regulations of the
CFTC, NFA and/or the commodity exchange on which any particular transaction is
executed.

(ii) The Advisor will promptly notify CMF of the commencement of any
investigation, suit, action or proceeding involving the Advisor or any of its
affiliates, officers, directors, member(s), employees, agents or
representatives; regardless of whether such investigation, suit, action or
proceeding also involves CMF. The Advisor will provide CMF with copies of any
correspondence (including, but not limited to, any notice or correspondence
regarding the violation or potential violation of position limits) from or to
the CFTC, NFA or any commodity exchange in connection with an investigation or
audit of the Advisor’s business activities.

(iii) In the placement of orders for the Partnership’s account and for the
accounts of any other client, the Advisor will utilize a pre-determined,
systematic, fair and reasonable order entry system, which shall, on an overall
basis, be no less favorable to the Partnership than to any other account managed
by the Advisor. The Advisor acknowledges its obligation to review and reconcile
the Partnership’s positions, prices and equity in the account managed by the
Advisor daily and within two business days to notify, in writing, the broker and
CMF and the Partnership’s brokers of (A) any error committed by the Advisor or
its principals or employees; (B) any trade which the Advisor believes was not
executed in accordance with its instructions; and (C) any discrepancy with a
value of $10,000 or more (due to differences in the positions, prices or equity
in the account) between its records and the information reported on the
account’s daily and monthly broker statements.

(iv) The Advisor will maintain a net worth of not less than $100,000 during the
term of this Agreement.

 

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(v) The Advisor will use its best efforts to close out all futures positions
prior to any applicable delivery period, and will use its best efforts to avoid
causing the Partnership to take delivery of any commodity.

(b) CMF agrees for itself and the Partnership that:

(i) CMF and the Partnership will comply with all applicable laws, including
rules and regulations of the CFTC, NFA and/or the commodity exchange on which
any particular transaction is executed.

(ii) CMF will promptly notify the Advisor of the commencement of any material
suit, action or proceeding involving it or the Partnership, whether or not such
suit, action or proceeding also involves the Advisor.

(iii) CMF or the selling agents for the Partnership have policies, procedures,
and internal controls in place that are reasonably designed to comply with
applicable anti-money laundering laws, rules and regulations, including
applicable provisions of the USA PATRIOT Act. CMF or the selling agents for the
Partnership have Customer Identification Programs (“CIP”), which require the
performance of CIP due diligence in accordance with applicable USA PATRIOT Act
requirements and regulatory guidance. CMF or the selling agents for the
Partnership also have policies, procedures, and internal controls in place that
are reasonably designed to comply with regulations and economic sanctions
programs administered by the U.S. Department of the Treasury’s Office of Foreign
Assets Control.

9. COMPLETE AGREEMENT. This Agreement constitutes the entire agreement between
the parties pertaining to the subject matter hereof.

10. ASSIGNMENT. This Agreement may not be assigned by any party without the
express written consent of the other parties.

11. AMENDMENT. This Agreement may not be amended except by the written consent
of the parties.

12. NOTICES. All notices, demands or requests required to be made or delivered
under this Agreement shall be effective upon actual receipt and shall be made
either by electronic (email) copy or in writing and delivered personally or by
registered or certified mail or expedited courier, return receipt requested,
postage prepaid, to the addresses below or to such other addresses as may be
designated by the party entitled to receive the same by notice similarly given:

If to CMF or to the Partnership:

Ceres Managed Futures LLC

522 Fifth Avenue - 14th Floor

New York, New York 10036

Attention: Alper Daglioglu

email: Alper.Daglioglu@morganstanley.com

 

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If to the Advisor:

J E Moody & Company LLC

245 SW Birds Hill Road

Portland, Oregon 97219

Attention: John E. Moody

email: john@jemoody.com; biz@jemoody.com

13. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to
principles of conflicts of law.

14. ARBITRATION. The parties agree that any dispute or controversy arising out
of or relating to this Agreement or the interpretation thereof, shall be settled
by arbitration in accordance with the rules, then in effect, of NFA or, if NFA
shall refuse jurisdiction, then in accordance with the rules, then in effect, of
the American Arbitration Association; provided, however, that the power of the
arbitrator shall be limited to interpreting this Agreement as written and the
arbitrator shall state in writing his reasons for his award, and further
provided, that any such arbitration shall occur within the Borough of Manhattan
in New York City. Judgment upon any award made by the arbitrator may be entered
in any court of competent jurisdiction.

15. NO THIRD PARTY BENEFICIARIES. There are no third party beneficiaries to this
Agreement, except that certain persons not party to this Agreement may have
rights under Section 6 hereof.

16. COUNTERPARTS. This Agreement may be executed in any number of counterparts,
including via facsimile or email, each of which is an original and all of which
when taken together evidence the same agreement.

[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK.]

 

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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.

 

CERES MANAGED FUTURES LLC By

/s/ Alper Daglioglu

Alper Daglioglu Authorized Signatory COMMODITY ADVISORS FUND L.P. By: Ceres
Managed Futures LLC (General Partner) By

/s/ Alper Daglioglu

Alper Daglioglu Authorized Signatory J E MOODY & COMPANY LLC By

/s/ John E. Moody

John E. Moody Principal

 

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Appendix A

JEM Commodity Relative Value Program

The JEM Commodity Relative Value (“CRV”) Program uses quantitative models to
detect and exploit price shifts and mispricings between related instruments in
the energy, metal grain, livestock, and food/fiber markets, while employing
hedging methods in an attempt to maintain approximate market or sector
neutrality. The strategies do not make un-hedged directional bets. Most trades
are implemented using offsetting long and short positions in futures and futures
options, thus reducing exposure to sudden changes in market direction. As
examples, such offsetting positions may be in different delivery months of the
same commodity market (e.g., calendar or butterfly spreads), in different but
related markets (e.g., crude oil and unleaded gasoline) or between contracts
traded on different exchanges (e.g., New York and London copper).

Market coverage for the CRV portfolio includes crude oil and petroleum
distillates, natural gas, industrial metals, precious metals, grains, livestock,
foodstuffs, fibers, and potentially other commodities. The Advisor utilizes
primarily exchange-traded futures and futures options to implement its relative
value trades, although trades may also be made using other instruments, such as
commodity swaps or over-the-counter derivatives contracts.

The trading opportunities captured by the CRV models are believed to arise due
to various factors, including: changes in relative supply and demand of
different commodity contracts, the idiosyncratic actions of market participants,
external events that may disrupt production (e.g., droughts, hurricanes, labor
unrest or geopolitics), and risk premia associated with general uncertainties in
future supply or demand. By virtue of their relative value nature, CRV trades
may be interpreted as providing market liquidity to directional traders who need
it, and earning a risk premium by doing so.

Relative value strategies are frequently employed by hedge funds in the equity,
fixed income, convertible bond and option markets, but are relatively uncommon
in the commodity or managed futures arenas. Over extended time periods, relative
value strategies have been observed to produce more consistent returns and
higher Sharpe ratios than un-hedged, directional trading strategies. With the
high leverage often used, however, some relative value managers have experienced
significant losses, particularly when extreme market events have occurred.

The Advisor attempts to manage the risk of large losses by limiting the overall
portfolio leverage and the degree of exposure to any single commodity market or
sector. The CRV portfolio typically includes about 20 to 30 active relative
value trades, with the number of open positions depending on the arbitrage
opportunities available. The CRV trades have low mutual correlation, cover
multiple markets and sectors and thus enable meaningful diversification within
the CRV portfolio.

When few favorable relative value trading opportunities arise in the commodity
markets, or as the Advisor may determine, the Advisor may choose to make
relative value trades in the financial futures, options, swap or derivatives
markets. At times when many or few trading opportunities are available, the
Advisor may increase or reduce overall CRV portfolio exposure.

 

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To hedge offsetting long and short positions, the Advisor may use techniques
such as static hedging, dynamic hedging and option overlays. Moreover, hedging
may seek to achieve market or sector neutrality via various benchmarks, such as
by being “contract neutral”, “dollar neutral” or “delta neutral”. No hedging
strategy is perfect, but each has its costs, risks, advantages and limitations.
Even with well-hedged positions, there is usually some residual exposure to
directional market movements. The Advisor seeks to balance the advantages of the
hedging strategy used in a particular relative value trade versus the costs and
risks of implementing the trade.

 

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Appendix B

Instruments to be Traded by J E Moody & Company LLC on Behalf of Commodity
Advisors Fund L.P.

 

Note:    For all exchange-listed markets below, the Program trades:    Pit,
Electronic & Mini versions    Physical & Financial versions (e.g. NYMEX)   
Listed Inter-Commodity Spreads (e.g. Crack)    Listed Calendar Spreads

 

Sector

 

Commodity

    

Exchange

  

Sector

 

Commodity

    

Exchange

Energy

  Crude Oil — Brent      ICE (IPE)    Metal   Copper      COMEX

Energy

  Crude Oil — WTI      ICE (IPE)    Metal   Gold      COMEX

Energy

  Gas Oil      ICE (IPE)    Metal   Gold      CBOT

Energy

  Heating Oil      ICE (IPE)    Metal   Silver      COMEX

Energy

  Spreads (Various)      ICE (IPE)    Metal   Aluminum      LME

Energy

  Strips (Various)      ICE (IPE)    Metal   Aluminum Alloy      LME

Energy

  Crude Oil — WTI      NYMEX    Metal   Aluminum Alloy-NASAAC      LME

Energy

  Heating Oil      NYMEX    Metal   Copper      LME

Energy

  Natural Gas      NYMEX    Metal   Lead      LME

Energy

  RBOB Gas      NYMEX    Metal   Nickel      LME

Energy

  Spreads (Various)      NYMEX    Metal   Tin      LME

Energy

  Strips (Various)      NYMEX    Metal   Zinc      LME

Grain

  Corn      CBOT    Metal   Palladium      NYMEX

Grain

  Oats      CBOT    Metal   Platinum      NYMEX

Grain

  Rice      CBOT    Other   Lumber      CME

Grain

  Soybean Meal      CBOT    Soft   Cocoa      NYBOT

Grain

  Soybean Oil      CBOT    Soft   Coffee      NYBOT

Grain

  Soybeans      CBOT    Soft   Orange Juice      NYBOT

Grain

  Wheat      CBOT    Soft   Sugar #11      NYBOT

Grain

  Wheat      KCBT    Soft   Sugar #14      NYBOT

Livestock

  Feeder Cattle      CME    Soft   Cotton      NYCE

Livestock

  Live Cattle      CME          

Livestock

  Lean Hogs      CME          

 

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