exv10w14




Exhibit 10.14



MANAGEMENT AGREEMENT



     AGREEMENT made as of the 26th day of March, 2010 among CERES MANAGED FUTURES LLC, a
Delaware limited liability company (“CMF” or the “General Partner”), EMERGING CTA PORTFOLIO L.P., a
New York limited partnership (the “Partnership”) and J E MOODY & COMPANY LLC, a Delaware limited
liability company (the “Advisor”).




WITNESSETH :




     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,
forward contracts, swaps and other derivative instruments with the objective of achieving
substantial capital appreciation; and



     WHEREAS, the Amended and Restated Limited Partnership Agreement dated as of July 23, 2009 (the
“Partnership Agreement”) permits CMF to delegate to one or more commodity trading advisors CMF’s
authority to make trading decisions for the Partnership, which advisors may or may not have any
prior experience managing client funds; 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 the NFA; and



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



     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 by the General Partner in commodity interests,
including commodity futures contracts, options, forward contracts, swaps and other derivative
instruments. All such trading on behalf of the Partnership shall be in accordance with the trading
policies set forth in the Partnership’s Private Placement Memorandum dated August 2009, 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 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 Program, attached hereto as Appendix A.
All trades made by the Advisor for the account of the Partnership shall be made through such
commodity broker or brokers as CMF shall direct, and the Advisor shall have no authority or
responsibility for selecting or supervising any such broker in connection with the execution,
clearance or confirmation of transactions for the Partnership or for the negotiation of brokerage
rates charged therefor. However, the Advisor, with the prior written permission (by either
original or fax copy) of CMF, may direct all trades in commodity futures and options to a futures
commission merchant or independent floor broker it chooses for execution with instructions to
give-up the trades to the broker designated by CMF, provided that the futures commission merchant
or independent floor broker and any give-up or floor brokerage fees are approved in advance by CMF.
All give-up or similar fees relating to the foregoing shall be paid by the Partnership after all
parties have executed the relevant give-up agreements (by either original or fax copy).



     (c) The initial allocation of the Partnership’s assets to the Advisor will be made to the
Program, as described in Appendix A attached hereto. 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 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 cause the description of the trading strategy or methods described in Appendix A to be
materially inaccurate. Further, Appendix B to this Agreement provides the Partnership with a
current list of all commodity interests to be traded for the Partnership’s account and the Advisor
will not trade any additional commodity interests for such account without providing notice thereof
to CMF and receiving CMF’s written approval. The Advisor also agrees to provide CMF, on a monthly
basis, with a written report of the assets under the Advisor’s management together with all other
matters deemed by the Advisor to be material changes to its business not previously reported to
CMF. The Advisor further agrees that it will convert foreign currency balances (not required to
margin positions denominated in a foreign currency) to U.S. dollars no less frequently than
monthly. U.S. dollar equivalents in individual foreign currencies of more than $100,000 will be
converted to U.S. dollars within one business day after such funds are no longer needed to margin
foreign positions.



     (d) The Advisor agrees to make all material disclosures to the Partnership regarding itself
and its principals as defined in Part 4 of the CFTC’s regulations (“principals”), 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



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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.
The Partnership and CMF acknowledge that the trading advice to be provided by the Advisor is a
property right belonging to the Advisor and that they will keep all such advice confidential.




     (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.



     (g) The Advisor will not be liable for trading losses in the Partnership’s account including
losses caused by errors; provided, however, that (i) the Advisor will be liable to the Partnership
with respect to losses incurred due to errors committed or caused by it or any of its principals or
employees in communicating improper trading instructions or orders to any broker on behalf of the
Partnership and (ii) the Advisor will be liable to the Partnership with respect to losses incurred
due to errors committed or caused by any executing broker (other than any CMF affiliate) selected
by the Advisor, it being understood that CMF, with the assistance of the Advisor, will first
attempt to recover such losses from the executing broker.



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



     3. COMPENSATION. (a) In consideration of and as compensation for all of the services
to be rendered by the Advisor to the Partnership under this Agreement, the Partnership shall pay
the Advisor (i) an incentive fee payable quarterly equal to 17% of New Trading Profits (as such
term is defined below) earned by the Advisor for the Partnership and (ii)



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a monthly fee for professional management services equal to 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 multiplying the result thereof by the ratio which the total number of calendar days in that
month bears to the total number of calendar days in the year).




     (b) “Net Assets” shall have the meaning set forth in Section 7(d)(1) of the Partnership
Agreement and without regard to further amendments thereto, provided that in determining the Net
Assets of the Partnership on any date, no adjustment shall be made to reflect any distributions,
redemptions or 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 period over Net Assets managed by the Advisor at the end of the highest
previous fiscal period or Net Assets allocated to the Advisor at the date trading commences,
whichever is higher, and as further adjusted to eliminate the effect on Net Assets resulting from
new capital contributions, redemptions, reallocations or capital distributions, if any, made during
the fiscal period decreased by interest or other income, not directly related to trading activity,
earned on the Partnership’s assets during the fiscal period, 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. No incentive fee shall be
paid until the end of the first full calendar quarter of trading, which fee shall be based on New
Trading Profits earned from the commencement of trading by the Advisor on behalf of the Partnership
through the end of the first full calendar quarter. 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
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) The services provided by the Advisor
hereunder are not to be deemed exclusive. CMF on its own behalf and



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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 and will not affect the
capacity of the Advisor to continue to render services to CMF for the Partnership of the quality
and nature contemplated by this Agreement.




     (b) If, at any time during the term of this Agreement, the Advisor is required to aggregate
the Partnership’s commodity positions with the positions of any other person for purposes of
applying CFTC- or exchange-imposed speculative position limits, the Advisor agrees that it will
promptly notify CMF 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, 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, 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 manager.



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     5. TERM. (a) This Agreement shall continue in effect until June 30, 2010. 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 30 days’ notice
to the Advisor. At any time during the term of this Agreement, CMF may elect to immediately
terminate this Agreement upon 30 days’ notice to the Advisor 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 has
been such that CMF’s fiduciary duties to the Partnership require CMF to terminate this Agreement;
or (vi) CMF reasonably believes that the application of speculative position limits will
substantially affect the performance of the Partnership. At any time during the term of this
Agreement, CMF may elect immediately to terminate this Agreement if (i) the Advisor merges,
consolidates with another entity, sells a substantial portion of its assets, or becomes bankrupt or
insolvent, (ii) 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,
or (iii) the Advisor’s registration as a commodity trading advisor with the CFTC or its membership
in the NFA or any other regulatory authority, is terminated or suspended. This Agreement will
immediately terminate upon dissolution of the Partnership or upon cessation of trading by the
Partnership prior to dissolution.



     (b) The Advisor may terminate this Agreement by giving not less than 30 days’ notice to CMF
(i) in the event that the trading policies of the Partnership as set forth in the Memorandum are
changed in such manner that the Advisor reasonably believes will adversely affect the performance
of its trading strategies; (ii) after June 30, 2010; or (iii) in the event that the General Partner
or Partnership fails to comply with the terms of this Agreement. The Advisor may immediately
terminate this Agreement if CMF’s registration as a commodity pool operator or its membership in
the NFA is terminated or suspended.



     (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, cost, expense (including, without limitation, attorneys’ and accountants’ fees), judgments
and amounts paid in settlement actually and reasonably incurred by it in connection
with such action, suit, or proceeding if the Advisor acted in good faith and in a manner
reasonably believed to be in or not opposed to the best interests of the Partnership, and provided
that its conduct did not constitute negligence, intentional misconduct, or a breach of its
fiduciary obligations to the Partnership as a commodity trading advisor, unless and only to the
extent that



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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) To the extent that the Advisor has been successful on the merits or otherwise in defense
of any action, suit or proceeding referred to in subsection (i) above, or in defense of any claim,
issue or matter therein, CMF shall indemnify it 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, cost or expense (including, without
limitation, attorneys’ and accountants’ fees) 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, cost or expense (including, without
limitation, attorneys’ and accountants’ fees), judgments and amounts paid in settlement actually
and 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 there has been a final judicial
or regulatory determination or, in the event of a settlement of any action or proceeding with the
prior written consent of the Advisor, 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



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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)).




          (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, cost or expense (including, without limitation, attorneys’ and
accountants’ fees) incurred in connection therewith.




     (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, 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, it being understood that CMF does not currently
intend to include any identifying information about the Advisor in the Memorandum.




          (ii) The Advisor will be acting as a commodity trading advisor with respect to the Partnership
and not as a securities investment adviser and is registered as a commodity trading advisor with
the CFTC and is a member of the NFA, and is in compliance with such other registration and
licensing requirements as shall be necessary to enable it to



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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 the NFA.




          (iii) 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.




          (iv) 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.




          (v) 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.




          (vi) 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 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 General Partner to the Partnership, and the Partnership will
not, breach or cause to be breached any undertaking, agreement, contract,



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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.




          (vi) CMF is registered as a commodity trading advisor and a commodity pool operator and is a
member of the 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 New York 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 rules and regulations of the CFTC and/or the commodity exchange on which any
particular transaction is executed.




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




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




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




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



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




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          (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.




     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 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

55 East 59th Street, 10th Floor

New York, New York 10022

Attention: Jerry Pascucci




     If to the Advisor:


J E Moody & Company LLC

245 SW Birds Hill Road

Portland, Oregon 97219

Attention: John E. Moody




     13. GOVERNING LAW. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.



     14. ARBITRATION. The parties agree that any dispute or controversy arising out of or
relating to this Agreement or the interpretation thereof, shall be settled by arbitration in
accordance with the rules, then in effect, of the National Futures Association or, if the National
Futures Association 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. 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.



-11-









 





     PURSUANT TO AN EXEMPTION FROM THE COMMODITY FUTURES TRADING COMMISSION IN CONNECTION WITH
ACCOUNTS OF QUALIFIED ELIGIBLE PERSONS, THIS 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 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/ Jerry Pascucci
 	 
	 	 	Jerry Pascucci 	 
	 	 	President and Director 	 
	 
	 	EMERGING CTA PORTFOLIO L. P.



By: Ceres Managed Futures LLC

        (General Partner)

 	 
	 	By  	/s/ Jerry Pascucci
 	 
	 	 	Jerry Pascucci 	 
	 	 	President and Director 	 
	 
	 	J E MOODY & COMPANY LLC

 	 
	 	By  	/s/ John E. Moody
 	 
	 	 	John E. Moody 	 
	 	 	Principal 	 



-12-









 






	 	 	 	 	 



Appendix A




JEM Commodity Relative Value Program


The JEM CRV Program uses quantitative models to detect and exploit price shifts and
mispricings between related instruments in the energy, metal and agricultural markets, while
employing hedging methods 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 18 to 24 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.




 









 







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.




A-2









 








Appendix B




Instruments to be Traded by J E Moody & Company LLC on Behalf of Emerging CTA Portfolio 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