Agreements

12 Months Ended

Dec. 31, 2021

Commitments And Contingencies Disclosure [Abstract]

Agreements

3. Agreements:

a. Limited Partnership Agreement:

The General Partner administers the business and affairs of the Partnership including selecting one or more advisors to make trading decisions for the Partnership. The Partnership pays the General Partner a monthly administrative fee in return for its services to the Partnership equal to 1/12 of 1% (1% per year) of month-end Net Assets per Class, for each outstanding Class, of the Partnership. Month-end Net Assets per Class, for the purpose of calculating administrative fees are Net Assets per Class, as defined in the Limited Partnership Agreement, prior to the reduction of the current month’s advisory fee, profit share allocation accrual, the administrative fee and any redemptions or distributions as of the end of such month. This fee may be increased or decreased at the discretion of the General Partner.

b. Management Agreement:

The Advisor or one of its affiliates, all of which are controlled by Scott C. Kimple, has served as the Partnership’s commodity trading advisor since inception. The General Partner and the Partnership have entered into a management agreement (the “Management Agreement”) with the Advisor. As compensation for services, the Partnership pays the Advisor a monthly advisory fee equal to 1/12 of 2% (2% per year) of month-end Net Assets per Class, for each outstanding Class, managed by the Advisor. Month-end Net Assets per Class, for each outstanding Class, for the purpose of calculating advisory fees are Net Assets per Class, for each outstanding Class, as defined in the Limited Partnership Agreement, prior to the reduction of the current month’s advisory fee, profit share allocation accrual, the administrative fee and any redemptions or distributions as of the end of such month. The Management Agreement may be terminated upon notice by any party thereunder.

In addition, the Special Limited Partner receives a quarterly profit share allocation to its capital account in the Partnership in the form of Redeemable Units of the Partnership, the value of which shall be equal to 20% of new trading profits, as defined in the Limited Partnership Agreement, earned for each outstanding Class by the Advisor on behalf of the Partnership during each calendar quarter and are issued as Special Limited Partner unit equivalents. The Special Limited Partner will not receive a profit share allocation until the Advisor recovers the net loss incurred and earns additional new trading profits for the Partnership.

In allocating substantially all of the assets of the Partnership to the Advisor, the General Partner considers the Advisor’s past performance, trading style, volatility of the markets traded and fee requirements. The General Partner may modify or terminate the allocation of assets to the Advisor at any time.

c. Customer Agreement/Selling Agent Agreement:

During the fourth quarter of 2013, the Partnership entered into a Selling Agent Agreement with Morgan Stanley Wealth Management. Effective April 1, 2015, the Partnership entered into continuing services agreements with each of Morgan Stanley Wealth Management and Credit Suisse Securities (USA) LLC and a selling agreement with Robert W. Baird & Co. Incorporated (“Baird”).   

Under the Wedbush and ADM Customer Agreements, the Partnership pays trading fees for the clearing and, where applicable, execution of transactions, as well as exchange, clearing, user, give-up, floor brokerage and NFA fees (collectively, the “Wedbush, ADM and HSBC clearing fees,” the “clearing fees”) directly. Clearing fees will be paid for the life of the Partnership, although the rate at which such fees are paid may be changed. The portion of the Partnership’s cash held at Wedbush and ADM are in segregated bank accounts to the extent required by CFTC regulations. At December 31, 2021 and 2020 the amount of cash held for margin requirements at Wedbush and ADM was $0 and $2,459,727 , and $0 and $1,967,781, respectively. Wedbush and ADM do not, and HSBC did not, pay interest on excess cash held in the Partnership’s accounts. The excess cash balances will be monitored and are expected to have an immaterial impact on the interest earned.

Under the continuing services agreement with Morgan Stanley Wealth Management, the Partnership pays Morgan Stanley Wealth Management a monthly fee in respect of certain partnership interests which have been sold to certain individuals and entities with an ongoing relationship with Morgan Stanley Wealth Management (the “MS Interests”) equal to (i) 1/12 of 2.00% (2.00% per year) of adjusted month-end Net Assets for Class A Redeemable Units and (ii) 1/12 of 0.75% (0.75% per year) of adjusted month-end Net Assets for Class D Redeemable Units. The fees paid to Morgan Stanley Wealth Management shall continue only for as long as the MS Interests remain outstanding.

Under the continuing services agreement with Credit Suisse Securities (USA) LLC, the Partnership pays Credit Suisse Securities (USA) LLC a monthly fee in respect of certain partnership interests which have been sold to certain individuals and entities with an ongoing relationship with Credit Suisse Securities (USA) LLC (the “CS Interests”) equal to (i) 1/12 of 2.00% (2.00% per year) of adjusted month-end Net Assets for Class A Redeemable Units and (ii) 1/12 of 0.75% (0.75% per year) of adjusted month-end Net Assets for Class D Redeemable Units. The fees paid to Credit Suisse Securities (USA) LLC shall continue only for as long as the CS Interests remain outstanding.

Under the selling agreement with Baird, the Partnership pays Baird a monthly ongoing selling agent fee equal to (i) 1/12 of 2.00% (2.00% per year) of adjusted month-end Net Assets for Class A Redeemable Units and (ii) 1/12 of 0.75% (0.75% per year) of adjusted month-end Net Assets for Class D Redeemable Units. With respect to current Limited Partners that are customers of Baird, the Partnership shall pay Baird a monthly ongoing maintenance fee equal to (i) 1/12 of 2.00% (2.00% per year) of adjusted month-end Net Assets for Class A Redeemable Units and (ii) 1/12 of 0.75% (0.75% per year) of adjusted month-end Net Assets for Class D Redeemable Units for services provided to such current Limited Partners.

For purposes of calculating the fees paid to selling agents, adjusted net assets are month-end Net Assets, as defined in the Partnership Agreement, increased by that month’s ongoing selling agent fee, advisory, profit share allocation accrual, the general’s partner’s administrative fee and other expenses and any redemptions or distributions as of the end of such month.