Item 5 – Fees and Compensation
The Firm shall receive an annual management fee (“Management Fee”) equal to 2% of the
month-end balance attributable to each client’s account, payable in installments of 1/12th of 2%
monthly in arrears (account balances, for such purposes, are calculated prior to reduction for any
accrued Performance Fee (see Item 6) or the Management Fee being calculated). The Firm may
waive or reduce its Management Fee or Performance Fee for one or more clients without
entitling any other client to a similar waiver or reduction. If the client is invested in a pooled
investment, fees will be deducted from the client’s account. In the case of a managed account,
fees will be billed by the Advisor, with the billing sent to the client for authorization to be paid
out of your account. You are required to execute a Fee Payment Authorization directing your
broker to deduct the fees from your account upon receiving the invoice from the Advisor of a
certificate setting forth the amount of the fees payable to the Advisor. Typically, there are no
prepaid fees or expenses, but upon termination of an account, any prepaid, asset-based fees will
be prorated according to the days the account was opened during the calendar quarter and
excess fees will be rebated to the client.
Portfolio transactions for the client will be allocated to brokers as selected by the Firm on the
basis of negotiated rates in the case of futures and forward trades, and on the basis of “best price
and execution” with respect to securities transactions. The Firm estimates that the client’s
annual brokerage commissions will be between 0.50%-2.0% of the client’s assets, although
brokerage commissions could exceed this range in certain market conditions. In addition to
portfolio transactions expenses could also include, investment related expenses, including
without limitation, brokerage commissions and other execution and transaction costs (including
trade errors that are not the result of the General Partner’s willful misconduct, bad faith or gross
negligence (as defined in accordance with the laws of the State of Delaware) or as otherwise
required by applicable law), including exchange, clearing and settlement charges and fees,
interest on, and commitment fees and expenses associated with, debt balances or borrowings
and borrowing charges on Investments, expenses associated with purchasing or leasing exchange
memberships (see “Brokerage and Custody”), and costs of acquisition and disposition of
commodities and other investments, including expenses of buying, maintaining and selling its
physical commodities (including, with respect to its cattle, feed costs, veterinary expense,
processing fees and other costs of raising cattle). However, the Advisor may, in its sole discretion,
choose to absorb any such expenses incurred on behalf of the Fund or Client. Despite the
foregoing, costs, fees and expenses may be specially allocated among the clients on any other
basis that the Advisor determines is more equitable in light of the purposes for which such
expenses were incurred. The Advisor will not share in any of these fees and if the client utilizes
a managed account, the client is responsible for negotiating commission rates with their Broker.
The client pays, or reimburses the General Partner for, all costs, fees and expenses arising in
connection with the client’s organization, operations and investments and the offering of
Interests. The client also bears its share of the cost of the Trading Fund’s organization.
Expenses payable by the client include all costs, fees and expenses directly incurred by the
Advisor (or on behalf of the client) in connection with its organization, operations and
investments, including the costs, fees and expenses associated with: (i) the organization of the
Fund, including filing, legal and accounting fees, which such organizational costs, fees and
expenses may be expensed immediately, or in the Advisor’s discretion, amortized in whole or in
part and capitalized over a period of up to 12 months; (ii) the initial and ongoing marketing and
offering of Interests, including legal and accounting fees, printing costs; (iii) the Advisor’s
compliance with any applicable law, rule or regulation (including, for example, filings made in the
name of the Fund/Client with regulatory authorities, such as any Form D under the Securities Act
or other regulatory filings where the Fund/Client is the reporting person); (iv) financial and tax accounting,
bookkeeping, reporting or administrative services provided to, or on behalf of, the Client (e.g., the
Administrator or any other administrator of the Fund/Client), including the cost of any audit of the Fund’s
or Client’s financial statements and the preparation of its tax returns; (v) any withholding, transfer or
other taxes imposed or assessed on, or payable by, the Fund/Client (including any interest and penalties);
(vi) the winding up and dissolution of the Fund or Client’s account; (vii) any litigation or investigation
involving Fund activities, including fees of legal counsel or other experts or consultants, including without
limitation, costs, fees and expenses incurred in connection with the investigation, prosecution or defense
of any claims by or against the Fund or the General Partner (for acts or omissions relating to the
Partnership or its activities), including claims by or against any governmental agency, authority or body or
any self-regulatory organization; (viii) the indemnification obligations of the Fund under the Partnership
Agreement; and (ix) bank service fees and custody fees.
Account Termination
For Commodity Pool clients, withdrawals are monthly with prior written notice that is received
by the Administrator by 5:00 P.M. ET on or before the last Business Day of the prior month,
subject to suspensions, reserves for contingencies and a 10% hold-back pending completion of
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