Document:

Exhibit 10.1

                           Form of Customer Agreement

To:  ADM Investor Services, Inc.
     141 West Jackson Blvd.
     Chicago, IL  60604

Gentlemen:

     In consideration of the acceptance by ADM Investor Services, Inc. ("ADMIS")
acting as broker, of one or more accounts of the undersigned ("Customer") for
the purchase or sale of commodity futures, commodity options, forward contracts,
foreign exchange, physical or cash commodities, and exchange for physical
("EFP") transactions (collectively "contracts") it is agreed as follows:

     1. Customer acknowledges the following:

          (a)  The purchase and sale of commodity futures contracts,
               exchange-traded and dealer options (commodity options) is
               speculative, involves a high degree of risk and is suitable only
               for persons who can assume the risk of loss in excess of their
               margin deposits or of the entire option cost. Customer
               understands that because of the law margin normally required in
               commodity futures trading, price changes in commodity futures
               contracts may result in significant Customer losses, which losses
               may substantially exceed Customer's margin deposits and any other
               deposits he may make. Customer also acknowledges that he has
               received, has read and understands this agreement.

          (b)  Customer authorizes ADMIS to execute such transactions for the
               Customer's account and exercise commodity options for Customer's
               account in accordance with Customer's oral or written
               instructions. ADMIS shall have the right to refuse to accept any
               orders. ADMIS shall also have the right to tape record all
               telephone conversations with Customer.

          (c)  Customer understands that ADMIS or its affiliates will at times
               act as principal in regard to cash, forward, or foreign exchange
               transactions.

          (d)  ADMIS shall not be responsible to Customer in any case for a
               floor brokers' inability to execute orders, or for error or
               negligence on the part of floor brokers who are not employees of
               ADMIS. Furthermore, ADMIS is not obligated to quote a price for
               any principal transaction.

          (e)  The Customer acknowledges that the execution of a futures
               contract always anticipates making or accepting delivery.
               Customer hereby authorizes ADMIS to take all action deemed
               necessary by ADMIS in the event ADMIS takes physical delivery for
               Customer and Customer hereby agrees to indemnify ADMIS from all
               costs associated therewith. ADMIS may, in its sole discretion,
               liquidate any short position in Customer's account if Customer
               has not delivered to ADMIS certificates, receipts, or other
               appropriate instruments of delivery at least seven days prior to
               the last trading day of the futures contract.

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          (f)  Customer acknowledges the right of ADMIS to limit, without notice
               to Customer, the number of open positions which Customer may
               maintain or acquire through ADMIS.

     2. Customer shall deposit with ADMIS (1) the applicable initial and
maintenance requirements; pay interest, commission charges in effect from time
to time (which commissions may be shared by more than one of Customer's agents)
and other costs to ADMIS occasioned by carrying the account of the Customer; (2)
deposit the amount of any deficit balance that may result from transactions
executed by ADMIS for Customer's account, and (3) pay the interest and service
charges on any Customer deficit balances at the rates customarily charged by
ADMIS together with ADMIS's cost and attorneys' fees incurred in collecting any
such deficit or defending claims brought by Customer in which ADMIS is the
prevailing party.

     3. Customer understands and acknowledges that ADMIS acts as agent for all
transactions which are executed on commodity futures exchanges and among other
requirements, is financially liable to the exchange clearing houses of which it
is a member and to the clearing members through which it clears transactions on
exchanges of which it is not a clearing member, for deficit balances occurring
in the Customer's accounts; because of this, ADMIS is the guarantor of the
financial responsibility of the Customer. Therefore, Customer agrees to hold
ADMIS harmless with respect to any and all losses sustained by ADMIS resulting
from deficit balances which may occur in the Customer's account.

     4. Customer shall, without notice or demand from ADMIS, at all times,
maintain adequate margins, so as continually to meet the margin requirements
established by ADMIS. Such margin requirements established by ADMIS, in its sole
and absolute discretion, may exceed the margin requirements set by any commodity
exchange, or other regulatory authority. Customer agrees, when required, to wire
transfer margins to ADMIS or any monies so required, and to furnish ADMIS with
names of bank officers for immediate verification of such transfers.

     5. If, at any time, Customer's account does not contain the amount of
margin required by ADMIS, or by any exchange, clearing house or other regulatory
authority, ADMIS may, at its sole and absolute discretion, at any time or from
time to time, without notice to Customer, close out Customer's open positions in
whole or in part or take any other action it deems necessary to satisfy such
requirements, including, but not necessarily limited to, transferring funds form
other accounts of Customer including transfers between CFTC Segregated and other
accounts. Failure of ADMIS to so act in such circumstances, in whole or in part,
shall not constitute a waiver of its rights so to do any time or from time to
time thereafter, nor shall ADMIS be subject to any liability to Customer or its
failure so to act. In addition, ADMIS has the right but not the obligation, to
liquidate the account(s) upon receipt of notice of the death of Customer (if
applicable).

     6. All monies, securities, negotiable instruments, forward contracts,
foreign exchange contracts, physical or cash contracts, commodity options, open
position in futures contracts and commodities, or other property now or at any
future time in Customer's account, or held by ADMIS or its affiliates for
Customer, are hereby pledged with ADMIS, and shall be subject to a security
interest in ADMIS's favor to secure any indebtedness, at any time, owing from
Customer to ADMIS without regard to whether or not ADMIS or its affiliates had
made advances with respect to such property. Customer will not cause or allow
any of the property held in his accounts to be subject to any other liens,
security interests, mortgages or other encumbrances without the express written
approval of ADMIS.

     7. Customer understands that obligations arising out of transactions
denominated and/or paid for in currencies other than U.S. Dollars may be
converted at the discretion of ADMIS at an exchange rate

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determined by ADMIS at its discretion based on prevailing market rates and
Customer will be required to pay ADMIS in U.S. Dollars.

     8. Customer acknowledges that: (1) any market recommendations and
information communicated to Customer by ADMIS do not constitute an offer to
sell, or the solicitation of an offer to buy any commodity, or any commodity
futures contract; (2) such recommendations and information, although based upon
information obtained from sources believed by ADMIS to be reliable, may be
incomplete and may not be verified; and (3) ADMIS makes no representation,
warranty or guarantee as to, and shall be responsible for, the accuracy or
completeness of any information or trading recommendation furnished to Customer.
Customer understands that ADMIS and/or its officers, directors, affiliates,
stockholders or representatives may have a position or positions in and may
intend to buy or sell commodities or commodity futures contracts, which are the
subject of market recommendations furnished to Customer, and that the position
or positions of ADMIS or any such officer, director, affiliate, stockholder, or
representative may or may not be consistent with the recommendations furnished
to Customer by ADMIS.

     9. All transactions by ADMIS on Customer's behalf shall be subject to the
applicable constitution, rules, regulations, customs, usages, rulings and
interpretations of the exchanges or markets on which such transactions are
executed by ADMIS or its agents for Customer's account (such as the Board of
Trade of the City of Chicago, The Chicago Mercantile Exchange, and the
MidAmerica Commodity Exchange and the clearing houses affiliated with each, if
any) and to all applicable governmental acts and statutes (such as the Commodity
Exchange Act of the Commodity Futures Trading Commission Act of 1974) and to
rules and regulations mad thereunder; ADMIS shall not be liable to Customer as a
result of any action taken by ADMIS, or its agents, to comply with any such
constitution, rule, regulation, custom, usage, ruling, interpretation, act or
statute. If Customer is subject to regulation, Customer agrees that ADMIS has no
duty to ascertain or ensure that Customer is in compliance with any governing
statutes or rules.

     10. If, any time, Customer shall be unable to deliver to ADMIS any
security, commodity or other property previously bought or sold by ADMIS on
Customer's behalf, Customer authorizes ADMIS, in its discretion, to borrow or to
buy any security, commodity, or other property necessary to make delivery
thereof, and Customer shall pay and indemnify ADMIS for any cost, loss, and
damage (including consequential costs, losses and damages) which ADMIS may
sustain thereby and any premiums which ADMIS may be required to pay thereon, and
for any cost, loss and damage (including consequential costs, losses and
damages) which ADMIS may sustain thereby and any premiums which ADMIS may be
required to pay thereon, and for any cost, loss and damage (including
consequential costs, losses and damages) which ADMIS may sustain from its
inability to borrow or buy any such security, commodity or other property.

     11. Customer acknowledges and agrees that ADMIS shall not be responsible to
Customer for any losses resulting from conduct or advice (including but not
limited to errors and negligence) on the part of any broker/dealer, futures
commission merchant, introducing broker, commodity trading advisor, or any other
person or entity introducing Customer to ADMIS or having trading authority over
the account of Customer at ADMIS. Customer specifically agrees that ADMIS shall
have no obligation to supervise the activities of any such person or entity and
Customer will indemnify ADMIS and hold ADMIS harmless from and against al
losses, liabilities, and damages (including attorneys' fees) incurred by ADMIS
as a result of any actions taken or not taken by such person or entity.

     12. Customer authorizes ADMIS to contact such banks, financial
institutions, credit agencies and other references as ADMIS shall deem
appropriate from time to time verify the information regarding Customer which
may be provided by Customer. Customer understands that an investigation may be

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made pertaining to his personal and business credit standing and that Customer
may make a written request within a reasonable period of time for complete and
accurate disclosure of its nature and scope.

     13. ADMIS shall not be responsible for delays in the execution of orders
due to breakdown, or failure of transmission, or communication facilities, or to
any other cause beyond ADMIS's control.

     14. Confirmation of trades, contracts statements of account, margin calls,
and any other notices sent by ADMIS to Customer shall be sent to the address
shown in and to the attention of the person(s) named in the "Commodity
Agreement" and they shall be conclusively deemed accurate and complete, if not
objected to, in writing, prior to the opening of trading on the contract market
on which such transaction occurred on the next business day following the day on
which such communication was first received. The price at which an order is
executed shall be binding notwithstanding the fact an erroneous report is made.
An order which was executed but in error reported as not executed shall be
binding. Customer shall direct all objections to ADM Investor Services, Inc.,
141 West Jackson Boulevard, Suite #1600A, Chicago, Illinois 60604, Phone No.
(312) 435-7000.

     15. All transactions for or on Customer's behalf shall be deemed to be
included in a single account whether or not such transactions are segregated on
ADMIS's records into separate accounts, either severally or jointly with others,
for purposes including reportable positions as required by regulatory
authorities.

     16. The Agreement, including all authorizations, shall insure to the
benefit of ADMIS, its successors and assigns and shall be binding upon Customer
and Customer's personal representatives, executors, trustees, administrators,
agents, successors, and assigns. In the event that Customer's financial
condition becomes unsatisfactory to ADMIS, in its sole discretion, or that a
petition, voluntary or involuntary, in bankruptcy to reorganize, or to effect a
composition or extension, is filed by or against Customer, or in the event a
receiver is appointed of Customer's property or business in any proceeding
whatsoever, state or federal, or in the event of Customer's legal incapacity or
death (and whenever the Customer consists of more than one person, then upon the
occurrence or any of the aforementioned contingencies to any of them), ADMIS
may, at its sole and absolute discretion, either continue to carry or close and
liquidate the account of Customer, including the covering of short positions,
exercise of options or offset of forward contracts and foreign exchanges subject
to no liability to the personal representatives, executors, trustee,
administrators, agents, successors or assigns of Customer for the use of such
discretion.

     17. The rights and remedies conferred upon the parties hereto shall be
cumulative, and the exercise or waiver of any thereof shall not preclude or
inhibit the exercise of additional rights or remedies.

     18. Customer agrees that ADMIS may, from time to time, change the account
number assigned to any account covered by this Agreement, and that this
Agreement shall remain in full force and effect. Customer agrees further that
this account, as well as all additional accounts opened by him at ADMIS, shall
be covered by this same Agreement with the exception of any new account for
which a new Customer Agreement is signed.

     19. All actions or proceedings arising directly, indirectly or otherwise in
connection with, out of, related to, or from this Agreement or any transaction
covered hereby shall be governed by the law of Illinois and may, at the
discretion and election of ADMIS, be litigated in courts whose situs is within
Illinois.

     20. Customer represents that (1) he/she is (or, if Customer is a
corporation, that each officer and director is, if Customer is a partnership,
that each partner is) an adult of sound mind and is under no legal disability
which would prevent him/her from trading in commodities, commodity futures
contracts,

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options contracts, forward contracts, foreign exchange or other physical or case
contracts therein or entering into this Agreement; (2) he/she is (or its
officers and directors or its partners are) authorized to enter into this
Agreement.

Name (Print)____________________________    Name (Print)________________________

Name (Signature)________________________    Name (Signature)____________________
                Customer/Officer/Partner                Customer/Officer/Partner

Date___________________                     Date___________________

                                      -5-Exhibit 10.2

                           Form of Advisory Agreement

     ADVISORY AGREEMENT dated as of _______________, 2000 (this "Agreement") by
and between SHAFFER DIVERSIFIED FUND, L.P., a Delaware limited partnership
having an address c/o Shaffer Asset Management, Inc., 70 West Red Oak Lane,
White Plains, NY 10604 (the "Fund"), and SHAFFER ASSET MANAGEMENT, INC., a New
York corporation having an address at 70 West Red Oak Lane, White Plains, NY
10604 (the "Advisor").

                              W I T N E S S E T H:

     WHEREAS, Shaffer Asset Management, Inc., a New York corporation having an
address at 70 West Red Oak Lane, White Plains, NY 10604 (the "General Partner"),
is the general partner of the Fund;

     WHEREAS, the Fund was organized for the purpose of engaging in, among other
things, the business of speculatively trading in commodities, commodity futures
contracts (including, without limitation, futures contracts on United States
Treasury Bills and other financial instruments), other commodity interests, any
other items that are presently, or may hereafter become, the subject of futures
trading (hereinafter collectively referred to as "Commodity Interests");

     WHEREAS, the General Partner is required to utilize the services of
professional commodity trading advisor(s) in connection with the Fund's
Commodity Interest trading activities pursuant to the terms of the Amended and
Restated Agreement of Limited Partnership governing the Fund, a copy of which is
attached to the Statement of Additional Information (as hereinafter defined)
that accompanies the Prospectus (as hereinafter defined) as Exhibit A (the
"Limited Partnership Agreement");

     WHEREAS, the Fund proposes to make a public offering (the "Offering") of a
minimum of one million (1,000,000) and a maximum of twenty five million
(25,000,000) units of limited partnership interest ("Units") through Berthel
Fisher & Company Financial Services, Inc., and may engage in an offering of
additional Units thereafter;

     WHEREAS, in connection with such Offering, the Fund has filed with the
Securities and Exchange Commission (the "SEC"), pursuant to the Securities Act
of 1933, as amended (the "1933 Act"), a registration statement on Form S-1 (File
No. 333-46550), and as a part thereof a prospectus and statement of additional
information, which registration statement, together with all amendments thereto,
shall be referred to herein as the "Registration Statement"; which prospectus,
when included as a part of the Registration Statement, together with all
amendments and supplements thereto in the forms filed with the SEC pursuant to
Rule 424 under the Act, shall be referred to herein as the "Prospectus; and
which statement of additional information, when included as a part of the
Registration Statement, together with all amendments and supplements thereto in
the forms filed with the SEC pursuant to Rule 424 under the Act, shall be
referred to herein as the "Statement of Additional Information;

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

     WHEREAS, the Advisor's present business is making trading decisions and
recommendations on behalf of itself, its affiliates and other investors in the
purchase and sale of Commodity Interests; and

<PAGE>

     WHEREAS, the Fund 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 trading advisory services in connection with the conduct by the
Fund of its trading in Commodity Interests during the term of this Agreement.

     NOW, THEREFORE, the parties agree as follows:

     1. Duties of the Advisor. (a) During the term and on the terms and
conditions of this Agreement, the Advisor shall have sole authority and
responsibility for managing the Fund's Commodity Interests trading account and
for directing the investment and reinvestment of the assets and funds of the
Fund, except that if the Advisor if legally unable to perform its functions
hereunder or if some emergency should arise as a result of which the Advisor is
unable or becomes unwilling to perform under this Agreement, the Fund may
procure the services of another trading advisor to manage the investment and
reinvestment of such assets and funds until such time as the Advisor is able or
willing to resume its management responsibilities hereunder.

     (b) The Advisor will determine the investments on behalf of the Fund in
accordance with the trading policies set forth in the Prospectus and the
Statement of Additional Information under the caption "Trading Policies" (the
"Trading Policies"). The Advisor will exercise its good faith (best efforts)
judgment in determining the trades in Commodity Interests which are to be made
on behalf of the Fund in accordance with such Trading Policies and, to the
extent that the Advisor is notified in writing thereof, and agrees in writing
thereto, in accordance with revisions of such policies, from time to time, by
the Fund. The Advisor is not, however, obligated to trade any fixed portion of
the Fund's assets under the Advisor's management, and there may be times when,
under the Advisor's trading system, no open positions will be maintained.

     (c) The Advisor also agrees to give the Fund prior written notice of any
proposed material change in its trading strategies, systems and methods as
described in the Prospectus and Statement of Additional Information under the
caption "Trading Philosophy and Methods of the Advisor" (the "Trading
Strategies"), and agrees not to make any material change in such Trading
Strategies (as they are applied to trading for the Fund) without the prior
express written approval of the Fund, it being understood that the Advisor shall
be free to institute non-material changes in its Trading Strategies (as they are
applied to trading for the Fund) without such prior written approval- Neither
refinements of its Trading Strategies nor any change in the number or type of
Commodity Interests traded in the Fund's portfolio within the limits imposed by
the Fund's trading policies shall be deemed a material change in Trading
Strategies, and prior approval of the Fund shall not be required therefor
provided, however, that the Advisor will not render advice to the Fund with
respect to trading in securities or in any futures contracts or options relating
thereto if trading therein would require the Fund to register under the
Investment Company Act of 1940, as amended, and/or would require the Advisor to
register under the Investment Advisers Act of 1940, as amended, unless counsel
to the Fund has advised the Fund to the effect that such acts are not applicable
to such trading.

     (d) All purchases and sales of Commodity Interests shall be for the account
of and at the risk of the Fund and neither the Advisor nor any of its directors,
officers, shareholders, employees or affiliates shall in any way be personally
liable in connection with any orders for such purchases and sales except as
otherwise expressly set forth in this Agreement. All brokerage commissions
arising from the trading of the Fund's account shall be charged to the Fund's
account.

     (e) The Advisor agrees to make all necessary disclosures regarding itself,
its principals, employees and affiliates, its trading performance and Trading
Strategies, its customer accounts and otherwise as are required in the judgment
of the Fund to be made in the Registration Statement,

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Prospectus and Statement of Additional Information and such state applications
and other filings as may be required by federal or state law.

     (f) Nothing herein contained shall be deemed to require the Fund to take
any action contrary to its Certificate of Limited Partnership, the Limited
Partnership Agreement or any applicable statute, regulation or exchange or
self-regulatory organization rule.

     (g) Notwithstanding the foregoing, the Fund (or the General Partner on its
behalf) may withdraw the Registration Statement or terminate the registration of
the Units at any time. Upon any such withdrawal or termination, or if the
Registration Statement shall not have become effective on or before __________,
or if the minimum number of Units offered by the Prospectus and Statement of
Additional Information, as amended or supplemented, is not sold and accepted by
the General Partner during the initial offering period of up to sixty (60) days
from the date of the Prospectus and Statement of Additional Information (subject
to a possible extension for up to an additional sixty (60) days at the
discretion of the General Partner), this Agreement shall terminate. In such
event, the Fund shall not have any obligation to the Advisor with respect to
this Agreement; nor shall the Advisor have any obligation to the Fund with
respect to this Agreement.

     (h) No assurance is given and no representation is made that the Advisor's
trading advice will result in profitable trades or that losses will not be
incurred or that the Fund will achieve capital appreciation.

     2. Independence of the Advisor. For all purposes herein, the Advisor shall
be deemed to be an independent contractor. Except as otherwise expressly
provided or authorized herein, the Advisor, in its capacity as the Advisor to
the Fund, shall have no authority to act for or represent the Fund in any way
and shall not be deemed to be an agent of the Fund.

     3. Commodity Brokers. All Commodity Interests traded for the account of the
Fund shall be made through such commodity broker or brokers as the Fund directs.
The Advisor shall have no authority or responsibility in selecting or
supervising any broker for the execution of trades of the Fund or for
negotiating the commission rates to be charged therefor. At the present time, it
is contemplated that the Fund will execute all trades through ADM Investor
Services, a CFTC-registered futures commission merchant.

     4. Management Fees / Incentive Allocations. (a) In consideration of and in
compensation for the performance of its services under this Agreement, the
Advisor shall receive from the Fund (i) a monthly management fee calculated at
the rate of 1/12 of 3.75% of the Net Asset Value per Unit (as defined in the
Limited Partnership Agreement) of the Fund's assets under the Advisor's
management at month's end with respect to Units purchased within the prior
twelve-month period and 1/12 of 1% of the Net Asset Value per Unit of the Fund's
assets under the Advisor's management at month's end with respect to Units
purchased more than twelve months prior thereto, and (ii) a quarterly incentive
allocation equal to fifteen percent (15%) of the Fund's Advisory Profits (as
hereinafter defined), if any, achieved each calendar quarter which are derived
from trades initiated by the Advisor for the Fund's account. In determining the
monthly management fee for any month, Net Asset Value per Unit shall not be
reduced to reflect any (i) distributions, redemptions or reallocations of assets
payable or effected as of such date, (ii) management fees accrued or payable as
of such date, or (iii) incentive allocations accrued or allocable as of such
date.

     (b) Advisory Profits (for purposes of calculating the Advisor's incentive
allocation only) during a calendar quarter shall mean (i) the net of profits and
losses resulting from all Commodity Interest trades initiated by the Advisor for
the Fund's account which are closed out during such quarter, plus (ii)

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the net of any profits and losses on Commodity Interest trades initiated by the
Advisor for the Fund's account which are open as of the end of such quarter
(after deduction for accrued round-turn brokerage commissions), minus (iii) the
net of any profits and losses carried forward on open Commodity Interest trades
initialed by the Advisor for the Fund's account from the preceding calendar
quarter (after deduction for accrued round-turn brokerage commissions), minus
(iv) the Advisor's "Carryforward Loss" (as defined in the following sentence),
if any, as of the beginning of such calendar quarter. If the total of items (i)
to (iv), above, is negative at the end of a calendar quarter, such amount
(reduced by the trading loss attributable to distributions, redeemed Units and
reallocations of assets away from the Advisor, if any) shall be the Advisor's
"Carryforward Loss" for the next calendar quarter.

     (c) If any incentive allocation shall have been allocated by the Fund to
the Advisor during any calendar quarter and the Advisor shall, during any
following calendar quarter, incur an Advisory Loss for such quarter, the Advisor
shall be nevertheless entitled to retain such amounts previously allocated by
the Fund. "Advisory Loss" for these purposes is defined as the opposite of
Advisory Profits, as hereinabove defined, measured for the preceding calendar
quarter.

     (d) Payment of the monthly management fee shall be made on or about the
first day of the month following the end of the month to which it relates, and
in any event within fifteen (15) days of the end of each month; allocation of
the quarterly incentive allocation shall be made on or about the first day of
the quarter following the end of the quarter to which it relates, and in any
event within fifteen (15) day of the end of each quarter. In calculating the
first management fee payable, the management fee shall be prorated for the
number of days in the month during which the Advisor has Fund assets under its
management. In the event of termination or expiration of this Agreement as of
any date that is not the last day of a month, the monthly management fee shall
be calculated and paid as of such date pro rata for the number of days of such
month that have elapsed to the date of termination or expiration. In the event
of the termination or expiration of this Agreement as of any date that is not
the last day of a calendar quarter, the quarterly incentive allocation shall be
calculated and paid as if the effective date of termination were at quarter end.

     (e) The Advisor and its shareholders, directors, officers, employees and
affiliates are prohibited from receiving, directly or indirectly, any share of
the brokerage commissions paid by the Fund to any commodity broker or its
employees or representatives, whether in the form of rebates or otherwise. The
foregoing shall not be construed to prevent a shareholder, director, officer,
employee or affiliate of the Advisor from owning one percent (1%) or less of the
publicly traded shares of common stock of any commodity broker receiving
brokerage commissions from the Fund.

     5. Term and Termination. (a) This Agreement shall commence on the date
hereof and continue in effect for a term of twelve (12) months after the date on
which the Fund shall commence trading in Commodity Interests (the "Initial
Term"). Thereafter, the Fund shall have the option of automatically renewing
this Agreement for an additional twelve (12) months on the same terms and
conditions by written notice to the Advisor ninety (90) days prior to the
expiration of the Initial Term, subject to the right of the Advisor to terminate
this Agreement at any time after the conclusion of the Initial Term upon giving
written notice as set forth below.

     (b) This Agreement (i) shall terminate automatically in the event of the
Fund's termination in accordance with the terms of the Limited Partnership
Agreement; (ii) may be terminated at the election of the Fund or the General
Partner at any time upon sixty (60) days' prior written notice to the Advisor;
and (iii) may also be terminated at the election of the General Partner at any
time, upon written notice to the Advisor, in the event that: (A) the Advisor is
unable to use its Trading Strategies as in effect on the date hereof, and as
such Trading Strategies may be revised, refined or modified in the future for
the benefit of the Fund and in accordance with the terms of this Agreement, for
any reason; (B) the Advisor's

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registration as a commodity trading advisor with the CFTC is suspended,
terminated or not renewed; (C) the General Partner, in its sole discretion,
shall determine in good faith that the Advisor has violated the Trading Policies
as they may be revised or modified in accordance with Section 1 hereof; (D)
there is an assignment of this Agreement by the Advisor in violation of Section
13 hereof; (E) the Net Asset Value per Unit (increased by the amount of any
distributions per Unit, if any) on any business day during a fiscal year
decreases to fifty percent (50%) or less of the Net Asset Value per Unit as of
the beginning of the fiscal year, provided that such decrease results in a Net
Asset Value per Unit of less than One Thousand Dollars($1,000), or if the Net
Asset Value per Unit (increased by the amount of distributions per Unit, if any)
decreases on any business day to or below $350; (F) the Advisor merges,
consolidates with or sells a substantial potion of its assets, any portion of
its Trading Strategies, systems or programs or its business goodwill or becomes
bankrupt or insolvent; (G) Daniel S. Shaffer (1) ceases to direct the
administration or advisory policies of, or ceases to be an officer or employee
or, the Advisor, (2) dies, or (3) becomes incapacitated; or (H) the General
Partner withdraws from the Fund. Notwithstanding the foregoing, the Advisor may
transfer all of its assets, Trading Strategies, trading programs or goodwill to,
or merge or consolidate with, any corporation or partnership controlled by Mr.
Shaffer and may assign this Agreement to any such corporation or partnership
provided that such corporation or partnership (i) expressly assumes all the
rights and obligations of the Advisor under this Agreement in a written
instrument in forma acceptable to counsel to the Fund and (ii) is entitled and
agrees to sue the Trading Strategies and the programs of the Advisor for the
benefit of the Fund.

     (c) This Agreement may be terminated at the election of the Advisor at any
time after the conclusion of the Initial Term (if any) upon sixty (60) days'
prior written notice to the Fund. In addition, this Agreement may be terminated
at the election of the Advisor at any time, upon written notice to the Fund, in
the event that: (i) the Advisor receives an opinion of legal counsel,
satisfactory to the Advisor and the Fund, that by reason of its being a trading
advisor to the Fund, it is required to register as an investment adviser under
the Investment Advisers Act of 1940, as amended; (ii) the registration of the
General Partner as a commodity pool operator is suspended, terminated or not
renewed, or (iii) Daniel S. Shaffer dies or becomes incapacitated.

     6. Standard of Liability and Indemnity. (a) In any action in which the
Advisor was, is or is threatened to be made a party, alleging claims arising out
of or in connection with the management of all or any portion of the Fund's
assets (other than an action brought by or in the right of the Fund), the Fund
shall indemnify and hold harmless the Advisor, subject to receipt of a legal
opinion of independent counsel regarding the applicable standard of conduct,
against any loss, liability, damage, cost, expense (including, without
limitation, attorneys' and accountants' fees and disbursements), judgments and
amounts paid in settlement, if the Adviser acted in good faith and in an manner
it reasonably believed to be in or not opposed to the best interests of the
Fund, and if such actions did not involve gross negligence, willful, wanton, or
reckless misconduct, or a breach of fiduciary obligations to the Fund. In any
action brought by or in the right of the Fund against the Adviser, subject to
receipt of a legal opinion of independent counsel regarding the applicable
standard of conduct, against any loss, liability, damage, cost or expense
(including, without limitation, attorneys' and accountants' fees and
disbursements), judgments or amounts paid in settlement incurred in connection
with the investigation, defense or settlement of such action, if the Advisor
acted in good faith and in a manner it reasonably believed to be in or not
opposed to the best interests of the Fund, and if such action did not involve
negligence, misconduct, or breach of fiduciary obligations to the Fund (unless
the court or administrative forum in which such action was brought shall
determine that, in view of all circumstances of the case, the Advisor is
nevertheless fairly and reasonably entitled to indemnification for such amounts
as the court or administrative forum shall deem proper). To the extent that the
indemnified party has been successful in the defense of any action, no legal
opinion of independent counsel is needed. Expenses may be paid by the Fund in
advance of the final disposition of such action if the indemnified person shall
agree to reimburse the Fund in the event indemnification is not permitted
hereunder. As used in this paragraph, the term "Advisor" shall include

                                      -5-
<PAGE>

the Advisor, its shareholders, directors, officers, employees and affiliates and
each person who controls the Advisor, as the case may be.

     (b) The Advisor agrees to indemnify, defend and hold harmless the Fund and
its affiliates against any loss, liability, damage, cost or expense (including,
without limitation, attorneys' and accountants' fees and disbursements) incurred
by them by reason of any act or omission of the Advisor or its affiliates
relating to the Fund if there has been a final judicial or regulatory
determination that such acts or omissions violated the terms of this Agreement
or involved gross negligence, willful, wanton or reckless misconduct on the part
of the Advisor, or a breach of the Advisor's fiduciary obligations to the Fund.

     (c) In addition, in the event that any claim, dispute or litigation arises
between the Advisor or its affiliates and any party other than the Fund or any
of its affiliates, which claim, dispute or litigation is unrelated to the Fund's
business, and if the Fund or any of its affiliates are made a party to such
claim, dispute or litigation by such other party, the Advisor and its affiliates
shall defend any actions brought in connection therewith on behalf of the Fund
and its affiliates, each of whom agrees to cooperate in such defense, and the
Advisor and its affiliates shall indemnify and hold harmless the Fund and its
affiliates from and with respect to any amounts awarded to such other party.

     (d) In the event that any claim, dispute or litigation arises between the
Fund or its affiliates and any party other than the Advisor or any of its
affiliates, which claim, dispute or litigation is unrelated to the
responsibilities of the Advisor under this Agreement, and if the Advisor or any
of its affiliates is made a party to such claim, dispute or litigation by such
other party, the Fund shall defend any actions brought in connection therewith
on behalf of the Advisor and its affiliates, each of whom agrees to cooperate in
such defense, and the fund shall indemnify and hold harmless the Advisor, its
affiliates and their respective shareholders, directors, officers and employees
from and with respect to any amounts awarded to such other party.

     (e) 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 of the party obligated to indemnify the other party.

     (f) Except as otherwise set forth herein, the Advisor, its shareholders,
directors, officers, employees and affiliates shall not be liable to the Fund,
its partners or any of their respective successors or permitted assigns except
by reason of its or their acts or omissions taken or omitted due to bad faith,
misconduct or negligence or for not having acted in good faith in the reasonable
belief that its or their actions were taken in, or not opposed to, the best
interests of the Fund. The foregoing sentence is intended to limit the liability
of the persons enumerated therein, and nothing in the foregoing sentence shall
expressly or impliedly create any liability, duty or responsibility on the part
of any person.

     (g) The provisions of this Section 6 shall survive the termination or other
expiration of this Agreement.

     7. Right to Engage in Other Activities. (a) The Advisor's present business
includes managing its assets, the assets of its principals and affiliates and
discretionary accounts for investors in the purchase and sale of Commodity
Interests, and it will be managing such accounts and assets during the same
period that it is managing the Fund's account. The services provided by the
Advisor hereunder are not to be deemed exclusive. The Fund acknowledges that,
subject to the terms of this Agreement, the Advisor and its shareholders,
directors, officers, employees and affiliates may render advisory, consulting
and management services to other clients and accounts. The Advisor and its
shareholder, directors, officers, employees and affiliates shall be free to
trade for their own accounts and to advise other clients

                                      -6-
<PAGE>

and manage other Commodity Interests trading accounts (including other public
and private commodity funds) during the term of this Agreement and to use for
such other clients and accounts the same or other information, Trading
Strategies, programs and formulas which they obtain, produce or utilize in the
performance of services for the Fund. In that connection, however, the Advisor
represents and warrants that the management of such other accounts by the
foregoing persons will not be incompatible with the performance of the Advisor's
obligations and duties to the Fund under this Agreement and will not prevent the
Advisor from rendering services to the Fund 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 Fund's positions in Commodity Interests with the
positions of any other person for purposes of applying the speculative position
or daily trading limits of the CFTC or any exchange, self-regulatory body or
governmental authority and its trading recommendations are altered because of
the application of any such limit, the Advisor will modify its trading decisions
and Trading Strategies for the Fund and its other accounts in a good faith
effort to achieve an equitable treatment of all accounts under management by the
Advisor and such persons, including with respect to priorities of order entry.

     (c) Upon the request at the General Partner, the Advisor shall provide to
it such information as it may reasonably request for the purpose of confirming
that the Fund has been treated equitably with respect to the trading engaged in
during the term of this Agreement by the Advisor or its shareholders, directors,
officers, employees and affiliates for other accounts, which the parties
acknowledge to mean that the General Partner may inspect all records of the
Advisor related to its or their management of Commodity Interest trading
accounts; provided, however, that the Advisor may, in its discretion, withhold
from any such report or inspection the name of the client for whom any such
account is maintained.

     8. Representations, Warranties and Covenants of the Fund. (a) The Fund
represents, warrants and covenants that:

          (i) The Fund is a limited partnership duly organized and validly
     existing under the laws of the State of Delaware, is duly qualified to
     transact business as a foreign corporation under the laws of all
     jurisdictions in which such qualification is necessary for the purposes
     hereof and has full power and authority to perform its obligations under
     this Agreement.

          (ii) This Agreement has been duly and validly authorized, executed and
     delivered by the Fund and, when executed and delivered by each of the other
     parties hereto, will be a valid and binding agreement of the Fund
     enforceable in accordance with its terms. The performance of the Fund's
     obligations and duties under this Agreement will not result in any
     violation or breach of default under or conflict with (A) the Certificate
     of Limited Partnership of the Fund or the Limited Partnership Agreement or
     (B) any term or prevision of any undertaking, contract, agreement, statute,
     law, rule or regulation by which the Fund is bound or to which it is a
     party, which in either case would limit or materially affect the
     performance of its duties under this Agreement.

          (iii) The General Partner is registered as a commodity pool operator
     under the Commodity Exchange Act, as amended (the "CE Act") and is a member
     of the NFA, and it will maintain and renew such registration and membership
     during the term of this Agreement.

     (b) The foregoing representations, warranties and covenants shall be
continuing during the term of this Agreement, and if at any time any event has
occurred which would make or tend to make any of the foregoing not true, the
Advisor agrees to promptly notify the Fund.

                                      -7-
<PAGE>

     9. Representations, Warranties and Covenants of the Advisor. (a) The
Advisor represents, warrants and covenants that:

          (i) The Advisor is a corporation duly organized and validly existing
     under the laws of the State of New York, is duly qualified to transact
     business as a foreign corporation under the laws of all jurisdictions in
     which such qualification is necessary for the purposes hereof and has full
     power and authority to perform its obligations under this Agreement and to
     act as described in the Registration Statement, Prospectus and Statement of
     Additional Information.

          (ii) This Agreement has been duly and validly authorized, executed and
     delivered by the Advisor and, when executed and delivered by each of the
     other parties hereto, will be a valid and binding agreement of the Advisor
     enforceable in accordance with its terms. The performance of the Advisor's
     obligations and duties under this Agreement will not result in any
     violation or breach of default under or conflict with (A) the charter or
     by-laws of the Advisor or (B) any term or prevision of any undertaking,
     contract, agreement, statute, law, rule or regulation by which the Advisor
     is bound or to which it is a party, which in either case would limit or
     materially affect the performance of its duties under this Agreement;

          (iii) All references to the Advisor, its principals and affiliates
     contained in the Registration Statement, Prospectus and Statement of
     Additional Information are complete and accurate in all material respects,
     and, as to each of them, the Registration Statement, Prospectus and
     Statement of Additional Information does not contain any misleading or
     untrue statement of a material fact or omit to state a material fact which
     is necessary to be stated therein in order to prevent the statements
     therein, in light of the circumstances under which they are mane, from
     being misleading;

          (iv) Any use or distribution of the Registration Statement, Prospectus
     or Statement of Additional Information by the Advisor to date has complied
     with, and in the future will continue to comply with, the 1933 Act, the
     Securities Exchange Act of 1934, as amended, the Commodity Exchange Act, as
     amended (the "CE Act"), and the rules and regulations promulgated by the
     SEC and the CFTC under such statutes, and all applicable state securities
     and commodities laws, as well as the rules and regulations promulgated
     under such laws The fact that clients or affiliates of the Advisor become
     limited partners in the Fund shall not constitute a breach of the
     warranties, representations and covenants contained herein.

          (v) The Advisor has obtained all required governmental and regulatory
     licenses and approvals required to perform its obligations under this
     Agreement and to act or perform its obligations as described in the
     Registration Statement, Prospectus and Statement of Additional Information
     (including, without limitation, registration as a commodity trading advisor
     under the CE Act and membership as a commodity trading advisor in the NFA,
     and it will maintain and renew such registration and membership during the
     term of this Agreement).

          (vi) Neither the Advisor nor any of its principals or affiliates has
     managed or directed on an overall discretionary basis the trading for any
     Commodity Investments or commodities trading account other than as set
     forth in the Registration Statement, Prospectus and Statement of Additional
     Information.

                                      -8-
<PAGE>

          (vii) As of the date hereof, there has been no material change in the
     performance data included in Tables A and B in the Registration Statement
     and Prospectus and the notes thereto, and the information set forth therein
     fairly presents the results of accounts traded pursuant to trading
     strategies of the Advisor as in effect from time to time and as utilized by
     the Advisor for the periods covered by such tables.

     (b) At any time during the term of this Agreement that a Registration
Statement, Prospectus or Statement of Additional Information relating to the
Interests is required to be delivered in connection with the offer and sale
thereof, the Advisor agrees upon the request of the Fund to provide the Fund
with such information as shall be necessary so that, as to itself, the
Registration Statement, Prospectus and Statement of Additional Information is
complete and accurate in all material respects and does not contain any untrue
or misleading statement of a material fact or omit to state a material fact
which is necessary to make the statements therein not misleading.

     (c) The foregoing representations, warranties and covenants shall be
continuing during the term of this Agreement, and if at any time any event has
occurred which would make or tend to make any of the foregoing not true, the
Advisor agrees to promptly notify the Fund.

     (d) In connection with its activities on behalf of the Fund, the Advisor
will comply with all applicable rules and regulations of the CFTC and/or the
commodity exchange or board of trade on which any particular transaction is
executed.

     (e) In the placement of orders for the Fund's account and for the accounts
of any other client, the Advisor will utilize a fair and reasonable order entry
system, which shall, on an overall basis, be no less favorable to the Fund than
to any other account managed by the Advisor or its directors, officers,
shareholders, employees or affiliates.

     9. Miscellaneous. (a) Survival. The provisions of this Agreement shall
survive the termination or expiration of this Agreement with respect to any
matter arising while this Agreement was in effect.

     (b) Entire Agreement. This Agreement contains the entire agreement between
the parties hereto with respect to the transactions contemplated by this
Agreement and supersedes all prior arrangements or understandings with respect
thereto.

     (c) Descriptive Headings. The descriptive headings of this Agreement are
for convenience only and shall not control or affect the meaning or construction
of any provision of this Agreement.

     (d) Notices. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if delivered personally
or sent by registered or certified mail, postage prepaid, addressed as set forth
in the initial paragraph of this Agreement. Any party may by notice change the
address to which notices or other communications to such party are to be
delivered or mailed.

     (e) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.

     (f) Arbitration. Any controversy or claim arising out of, resulting from or
relating to this Agreement shall be settled exclusively by arbitration conducted
in New York, New York in accordance with the Commercial Arbitration Rules of the
American Arbitration Association (or organization which is the successor
thereto). The parties hereto agree that service of process or notice of motion
or other

                                      -9-
<PAGE>

application in connection with any arbitration may be served by the means by
which notices are to be given under this Agreement, provided that a reasonable
time for appearance is allowed. Any award in such arbitration may be enforced on
application of either party by the order or judgment of any Federal or state
court in the State of New York as the party making such application shall elect,
having jurisdiction over the subject matter thereof. Each of the parties hereto
hereby submits itself to the jurisdiction of any such court and agree that
service of process on it in any action, suit or proceeding to enforce any such
award may be effected by the means by which notices are to be given to it under
this Agreement. The fees and expenses of any arbitration shall be borne by the
parties equally, but each party shall bear the expenses of its own attorneys and
experts and the additional expenses of presenting its own proof.

     (g) Illegalities. In the event that any provision contained in this
Agreement shall be determined to be invalid, illegal or unenforceable in any
respect for any reason, the validity, legality and enforceability of any such
provision in every other respect and the remaining provisions of this Agreement
shall not, at the election of the party for whose benefit the provision exists,
be in any way impaired.

     (h) Assignability. This Agreement shall not be assignable by either party
hereto without the prior written consent of the other party hereto, and any
purported assignment by any party without such consent shall be void.

     (i) Third Party Rights. Notwithstanding any other provision of this
Agreement, this Agreement shall not create benefits on behalf of any third
party, and this Agreement shall be effective only as between the parties hereto
and their respective successors, heirs and permitted assigns.

     (j) Amendments and Waivers. Any term or provision of this Agreement may be
waived at any time by the party which is entitled to the benefits thereof, and
any term or provision of this Agreement may be amended or supplemented at any
time by the mutual consent of the parties hereto, except that any waiver of any
term or condition, or any amendment or supplementation, of this Agreement shall
be effective only if in writing and, in the case of any waiver by the
Corporation and any amendment or supplementation to which the Corporation
consents, if approved by resolution of a majority of the disinterested members
of the Board of Directors of the Corporation.

     IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.

                                        SHAFFER DIVERSIFIED FUND, L.P.

                                        By:  Shaffer Asset Management, Inc.,
                                             its General Partner

                                               By:______________________________
                                                  Daniel S. Shaffer
                                                  President

                                        SHAFFER ASSET MANAGEMENT, INC.

                                        By:______________________________
                                           Daniel S. Shaffer
                                           President

                                      -10-

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