AMENDMENT NO. 2 TO THE ADVISORY AGREEMENT

 

This AMENDMENT NO. 2 dated as of the 1st day of January 2013 to the ADVISORY AGREEMENT made as of the 30th day of April, 2007, among CERES MANAGED FUTURES LLC (formerly Demeter Management Corporation), a Delaware limited liability company (the “Trading Manager”), MORGAN STANLEY SMITH BARNEY KAISER I, LLC (formerly Morgan Stanley Managed Futures Kaiser I, LLC), a Delaware limited liability company (the “Trading Company”) and KAISER TRADING GROUP PTY. LTD., a private company organized under the laws of Australia (the “Trading Advisor”), as previously amended by an Amendment to the Advisory Agreement dated as of March 1, 2012 (together the “Agreement”).

 

 

W I T N E S S E T H:

 

WHEREAS, the Trading Manager, the Trading Company and the Trading Advisor wish to amend the Advisory Agreement to increase the amount of leverage used to manage the Trading Company’s assets.

 

NOW, therefore, the parties agree as follows:

 

1. The first sentence of Section 2(f) shall be deleted and replaced by the following:

 

In performing services to the Trading Company, the Trading Advisor shall utilize its Global Diversified Program (the “Trading Program”), as described in the Disclosure Document, and as modified from time to time; provided, however, that the Trading Manager and the Trading Company agree that amount of leverage applied to the assets of the Trading Company allocated to the Trading Advisor by the Trading Manager shall be 2.0 times the assets of the Trading Company allocated to the Trading Advisor by the Trading Manager (the “Trading Level”), unless otherwise agreed by the parties hereto in writing.  The Trading Advisor shall trade the Trading Company’s assets on the basis of the Trading Level.

 

2. The first sentence of Section 5(a)(i) shall be deleted and replaced by the following:

 

The Trading Company shall pay the Trading Advisor a monthly management fee equal to 1/12 of 2% (a 2% annual rate) of the Net Assets (as defined in Section 5(c) hereof) as of the first day of each month (the “Management Fee”).

 

3. In all other respects the Advisory Agreement remains unchanged and of full force and effect.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of the day and year first above written.

 

CERES MANAGED FUTURES LLC

By                                                                        

Walter Davis

President

MORGAN STANLEY SMITH BARNEY KAISER I, LLC 

By:  Ceres Managed Futures LLC

(Trading Manager)

By                                                                        

Walter Davis

President

KAISER TRADING GROUP PTY. LTD.

By                                                                           

Karl O’Shaughnessy

Director

 

 

 

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