Exhibit 10.17

ADVISORY AGREEMENT

ADVISORY AGREEMENT (this “Agreement”), dated as of the 30th day of November,
2005, by and among WMT III—SERIES H/J TRADING VEHICLE LLC, a Delaware statutory
trust (the “Trading Vehicle”), PREFERRED INVESTMENT SOLUTIONS CORP., a
Connecticut corporation (the “Managing Owner”), and BRIDGEWATER ASSOCIATES,
INC., a Connecticut corporation (the “Advisor”).

WITNESSETH:

WHEREAS, the Trading Vehicle has been organized primarily for the purpose of
trading, buying, selling, spreading or otherwise acquiring, holding or disposing
of futures, forward and options contracts with respect to commodities. Other
transactions also may be effected from time to time, including among others,
those as more fully identified in Exhibit A hereto; the foregoing commodities
and other transactions are collectively referred to as “Commodities”; and

WHEREAS, Series H and Series J are the only members (“Members”) of the Trading
Vehicle; and

WHEREAS, the Managing Owner is the managing owner of World Monitor Trust III
(the “Trust”), a Delaware statutory trust; and

WHEREAS, the Managing Owner is authorized as managing owner of the Trust to
utilize the services of one or more professional commodity trading advisors in
connection with the Commodities trading activities of the various trading
vehicles that will be owned by certain series of the Trust; and

WHEREAS, the Trust proposes to make an initial public offering (the “Offering”)
of units (the “Units”) of beneficial interest in the Trust (the “Interests”)
issuable in

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multiple series of interests (each, a “Series”) through Kenmar Securities, Inc.
(the “Selling Agent”), an affiliate of the Managing Owner, and in connection
therewith, the Trust intends to file with the U. S. 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 to register the beneficial
interests (“Interests”), including the Series H Interests (Units relating to the
Series H Interests are referred to herein as the “Series H Units”) and Series J
Interest (Units relating to the Series J Interests are referred to herein as the
“Series J Units”), and as part thereof a prospectus (which registration
statement, together with all amendments thereto, shall be referred to herein as
the “Registration Statement” and which prospectus, in final form, shall be
referred to herein as the “Prospectus”); and

WHEREAS, the Trust will prepare and file applications for registration of the
Interests under the securities or Blue Sky laws of such jurisdictions as the
Managing Owner deems appropriate; and

WHEREAS, the Advisor’s present business includes the management of Commodities
accounts for its clients; and

WHEREAS, the Advisor is registered as a commodity trading advisor under the
Commodity Exchange Act, as amended (the “CE Act”), and is a member of the
National Futures Association (the “NFA”) as a commodity trading advisor and will
maintain such registration and membership for the term of this Agreement; and

WHEREAS, the Trading Vehicle and the Advisor desire to enter into this Agreement
in order to set forth the terms and conditions upon which the Advisor will
render and implement commodity advisory services on behalf of the Trading
Vehicle during the term of this Agreement.

 

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NOW, THEREFORE, the parties agree as follows:

1. Duties of the Advisor.

(a) Appointment. The Trading Vehicle hereby appoints the Advisor, and the
Advisor hereby accepts appointment, as its limited attorney-in-fact to exercise
discretion to invest and reinvest in Commodities during the term of this
Agreement the portion of the Trading Vehicle’s Net Asset Value (as described in
the Prospectus) which is comprised of the assets attributable to the Trading
Vehicle’s assets allocated to the Advisor (the “Trading Vehicle Allocated
Assets”) on the terms and conditions and for the purposes set forth herein. This
limited power-of-attorney is a continuing power and shall continue in effect
with respect to the Advisor until terminated hereunder. The Advisor shall have
sole authority and responsibility for independently directing the investment and
reinvestment in Commodities of the Trading Vehicle Allocated Assets for the term
of this Agreement pursuant to the trading programs, methods, systems, and
strategies described in Exhibit A hereto, which Trading Vehicle has selected to
be utilized by the Advisor in trading the Trading Vehicle Allocated Assets
(collectively referred to as the Advisor’s “Trading Approach”), subject to the
trading limitations and policies as set forth in the Prospectus and attached
hereto as Exhibit B (the “Trading Limitations and Policies”), as the same may be
modified from time to time and provided in writing to the Advisor. The portion
of the Trading Vehicle Allocated Assets to be allocated by the Advisor at any
point in time to one or more of the various trading strategies comprising the
Advisor’s Trading Approach will be determined as set forth in Exhibit A hereto,
as it may be amended from time to time, with the consent of the parties, it
being understood that trading gains and losses automatically will alter the
agreed upon allocations. Upon receipt of a new allocation, the Advisor will
determine and, if required, adjust its trading in light of the new allocation.

 

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(b) Allocation of Responsibilities. The Trading Vehicle will have the
responsibility for the management of any portion of the Trading Vehicle
Allocated Assets that are not invested in Commodities. The Advisor will use its
good faith and best efforts in determining the investment and reinvestment in
Commodities of the Trading Vehicle Allocated Assets in compliance with the
Trading Limitations and Policies, and in accordance with the Advisor’s Trading
Approach. In the event that the Trading Vehicle shall, in its sole discretion,
determine in good faith following consultation appropriate under the
circumstances with the Advisor that any trading instruction issued by the
Advisor violates the Trading Limitations and Policies then the Trading Vehicle,
following reasonable notice to the Advisor appropriate under the circumstances,
may override such trading instruction and shall be responsible therefor. Nothing
herein shall be construed to prevent the Managing Owner from imposing any
limitation(s) on the trading activities of the Trading Vehicle beyond those
enumerated in the Prospectus if the Managing Owner determines that such
limitation(s) are necessary or in the best interests of the Trust or the Trading
Vehicle, in which case the Advisor will adhere to such limitations following
written notification thereof.

(c) Gains From Trading Approach. The Advisor agrees that at least 90% of the
annual gross income and gain, if any, generated by its Trading Approach for the
Trading Vehicle Allocated Assets will be “qualifying income” within the meaning
of Section 7704(d) of the Internal Revenue Code (the “Code”) (it being
understood that such income will largely result from buying and selling
Commodities and that the Trading Approach is not intended primarily to generate
interest income). The Advisor also agrees that it will attempt to trade in such
a manner as to allow non-U.S. Limited Owners (as defined below) to qualify for
the safe harbors found in Section 864(b)(2) of the Code and as interpreted in
the regulations promulgated or proposed thereunder.

 

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(d) Modification of Trading Approach. In the event the Advisor requests to use,
or the Trading Vehicle requests the Advisor to use, a trading program, system,
method or strategy other than or in addition to the trading programs, systems,
methods or strategies comprising the Trading Approach in connection with trading
for the Trading Vehicle (including, without limitation, the deletion or addition
of an agreed upon trading program, system, method or strategy to the then agreed
upon Trading Approach or a modification in the leverage employed), either in
whole or in part, the Advisor may not do so and/or shall not be required to do
so, as appropriate, unless both the Trading Vehicle and the Advisor consent
thereto in writing.

(e) Notification of Material Changes. The Advisor also agrees to give the
Trading Vehicle prior written notice of any proposed material change in its
Trading Approach and agrees not to make any material change in such Trading
Approach (as applied to the Trading Vehicle) over the objection of the Trading
Vehicle, it being understood that the Advisor shall be free to institute
non-material changes in its Trading Approach (as applied to the Trading Vehicle)
without prior written notification. Without limiting the generality of the
foregoing, refinements to the Advisor’s Trading Approach, and the deletion (but
not the addition) of Commodities (other than the addition of Commodities then
being traded (i) on organized domestic commodities exchanges, (ii) on foreign
commodities exchanges recognized by the Commodity Futures Trading Commission
(the “CFTC”) as providing customer protections comparable to those provided on
domestic exchanges or (iii) in the interbank foreign currency market) to or from
the Advisor’s Trading Approach shall not be deemed a material change in the
Advisor’s Trading Approach, and prior approval of the Trading Vehicle shall not
be required therefor. The utilization of forward markets in addition to those
enumerated in Exhibit D hereto would be deemed a material change to the
Advisor’s Trading Approach and prior approval shall be required therefor.

 

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Subject to adequate assurances of confidentiality, the Advisor agrees that it
will discuss with the Trading Vehicle upon request any alternate trading
strategy that the Advisor believes would be beneficial to the Trading Vehicle,
provided that nothing contained in this Agreement shall require the Advisor to
disclose what it deems to be proprietary or confidential information.

(f) Request for Information. The Advisor agrees to reasonably consider requests
for information from the Trading Vehicle concerning the Advisor (other than the
identity of its customers or proprietary or confidential information concerning
the Advisor), subject to receipt of adequate assurances of confidentiality by
the Trading Vehicle, including, but not limited to, information regarding any
change in control and key personnel and Trading Approach which the Trading
Vehicle reasonably deems to be material to the Trading Vehicle; the Advisor also
shall notify the Trading Vehicle of any such matters the Advisor, in its
reasonable judgment, believes may be material to the Trading Vehicle relating to
the Advisor. During the term of this Agreement: (i) the Advisor agrees to
provide the Trading Vehicle with updated monthly capsule performance information
related to the Advisor’s performance results for the program that the Advisor
trades for the Trading Vehicle within a reasonable period of time after the end
of the quarter to which it relates; and (ii) the Advisor agrees to provide the
Trading Vehicle with updated monthly capsule performance information related to
the Advisor’s performance results as to other programs traded by the Advisor, as
included in the Advisor’s Disclosure Document, within a reasonable period of
time after the quarter which it relates.

(g) Notice of Errors. The Advisor is responsible for promptly reviewing all oral
and written confirmations it receives to determine that the Commodities trades
were made in accordance with the Advisor’s instructions. If the Advisor
determines that an error was made in connection with a trade or that a trade was
made other than in accordance with the Advisor’s instructions, the Advisor shall
promptly notify the Trading Vehicle of this fact and shall utilize its
reasonable efforts to cause the error or discrepancy to be corrected.

 

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(h) Liability. Neither the Advisor nor any employee, shareholder, director or
officer of the Advisor, nor any person who controls the Advisor, shall be liable
to the Trading Vehicle, its officers, directors, members, shareholders or
employees, or any person who controls the Trading Vehicle or any of their
respective successors or assignees under this Agreement, except by reason of
acts or omissions in material breach of this Agreement or due to their willful
misconduct or gross negligence or by reason of their not having acted in good
faith in the reasonable belief that such actions or omissions were in, or not
opposed to, the best interests of the Trading Vehicle and its Members; it being
understood that the Advisor makes no guarantee of profit nor guarantee against
loss, and that all purchases and sales of Commodities shall be for the account
and risk of the Trading Vehicle, and the Advisor shall incur no liability for
trading profits or losses resulting therefrom provided the Advisor would not
otherwise be liable to the Trading Vehicle under the terms hereof.

Notwithstanding anything to the contrary, nothing in this Advisory Agreement
shall in any way constitute a waiver or limitation of any rights that the
Trading Vehicle may have under applicable state or federal securities laws.

(i) Initial Allocation. Initially, the Trading Vehicle Allocated Assets will
total an amount equal to the assets of the Trust allocable to the Trading
Vehicle, including all cash and cash equivalents held by the Trust in respect of
the Trading Vehicle reduced by all liabilities of the Trust incurred
specifically in respect of the Trading Vehicle and further reduced by a pro-rata
share of the total liabilities of the Trust which are not otherwise specifically
allocable to another trading vehicle, at the conclusion of the Trust’s Initial
Offering Period (as described in the Prospectus).

 

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(j) Additional Allocations and Reallocations. Subject to Section 10 below, the
Trading Vehicle may, on a monthly basis during the Trust’s Continuous Offering
Period, as described in the Prospectus, (i) allocate additional assets to the
Advisor, (ii) reallocate the Trading Vehicle Allocated Assets away from the
Advisor to another commodity trading advisor (an “Other Advisor”),
(iii) reallocate assets to the Advisor from an Other Advisor or (iv) allocate
additional capital with respect to the Trading Vehicle Allocated Assets to an
Other Advisor.

(k) Delivery of Disclosure Document. The Advisor agrees to provide to the
Managing Owner with any amendment or supplement to the Disclosure Document
attached hereto as Exhibit D (an “Update”) upon request.

2. Indemnification.

(a) The Advisor. Subject to the provisions of Section 3 of this Agreement, the
Advisor, each shareholder, director, officer and employee of the Advisor, and
each person who controls the Advisor, shall be indemnified, defended and held
harmless by the Trading Vehicle, from and against any and all losses, judgments,
liabilities, expenses (including, without limitation, reasonable attorneys’
fees) and amounts paid in settlement of any claims in compliance with the
conditions specified below (collectively, “Losses”) sustained by the Advisor
(i) in connection with any acts or omissions of the Advisor, or any of its
directors, officers, shareholders or employees relating to its management of the
Trading Vehicle Allocated Assets and/or (ii) as a result of a material breach of
this Agreement by the Trading Vehicle or the Managing Owner, provided that
(i) such Losses were not the result of negligence, misconduct or a material
breach of this Agreement on the part of the Advisor, any of its shareholders,
directors, officers or employees or any person controlling the Advisor, (ii) the
Advisor, and its shareholders, directors, officers, employees, and each person
controlling the Advisor, acted or omitted to act in good faith and in a manner
reasonably believed by such person to be in, or not

 

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opposed to, the best interests of the Trading Vehicle and its Members and
(iii) any such indemnification will only be recoverable from the Trading Vehicle
Allocated Assets and not from any other assets of Series H, Series J or any
other Series of the Trust, and provided further, that no indemnification shall
be permitted under this Section 2 for amounts paid in settlement if the Trading
Vehicle does not approve the amount of the settlement (such approval not to be
withheld unreasonably). Notwithstanding the foregoing, the Trading Vehicle shall
at all times have the right to offer to settle any matter with the approval of
the Advisor (which approval shall not be withheld unreasonably), and if the
Trading Vehicle successfully negotiates a settlement and tenders payment
therefor to the party claiming indemnification (the “Indemnitee”), the
Indemnitee must either use its reasonable efforts to dispose of the matter in
accordance with the terms and conditions of the proposed settlement or the
Indemnitee may refuse to settle the matter and continue its defense in which
latter event the maximum liability of the Trading Vehicle to the Indemnitee
shall be the amount of said proposed settlement. Any indemnification by the
Trading Vehicle under this Section 2, unless ordered by a court, shall be made
only as authorized in the specific case by the Trading Vehicle.

(b) Default Judgments and Confessions of Judgment. None of the foregoing
provisions for indemnification shall be applicable with respect to default
judgments of which Indemnitee has actual and timely notice or confessions of
judgment entered into by the Indemnitee, with its knowledge, without the prior
consent of the Trading Vehicle.

(c) Procedure. In the event that an Indemnitee under this Section 2 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 Indemnitee shall be indemnified only for that
portion of the Losses incurred in such action, suit or proceeding which relates
to the matters for which indemnification can be made.

 

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(d) Expenses. Expenses incurred in defending a threatened or pending civil,
administrative or criminal action, suit or proceeding against an Indemnitee
shall be paid by the Trading Vehicle from the Trading Vehicle Allocated Assets
in advance of the final disposition of such action, suit or proceeding if
(i) the legal action, suit or proceeding, if sustained, would entitle the
Indemnitee to indemnification pursuant to the terms of this Section 2, (ii) the
Advisor undertakes to repay the advanced funds to the Trading Vehicle Allocated
Assets in cases in which the Indemnitee is not entitled to indemnification
pursuant to this Section 2.

3. Limits on Claims.

(a) Prohibited Acts. The Advisor agrees that it will not take any of the
following actions against the Trust: (i) seek a decree or order by a court
having jurisdiction in the premises (A) for relief in respect of the Trust in an
involuntary case or proceeding under the federal Bankruptcy Code or any other
federal or state bankruptcy, insolvency, reorganization, rehabilitation,
liquidation or similar law or (B) adjudging the Trust a bankrupt or insolvent or
seeking reorganization, rehabilitation, liquidation, arrangement, adjustment or
composition of or in respect of the Trust under the federal Bankruptcy Code or
any other applicable federal or state law or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator (or other similar official) of the
Trust or of any substantial part of any of its properties or ordering the
winding up or liquidation of any of its affairs, (ii) seek a petition for
relief, reorganization or to take advantage of any law referred to in the
preceding clause or (iii) file an involuntary petition for bankruptcy
(collectively, “Bankruptcy or Insolvency Action”).

(b) Limited Assets Available. In addition, the Advisor agrees that for any
obligations due and owing to it by the Trading Vehicle, the Advisor will look
solely and exclusively to the Trading Vehicle Allocated Assets to satisfy its
claims and will not seek to attach or otherwise assert a claim against the other
assets of the Trust, the Trading Vehicle or any

 

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Member whether there is a Bankruptcy or Insolvency Action taken or otherwise.
The parties agree that this provision will survive the termination of this
Agreement, whether terminated in a Bankruptcy or Insolvency Action or otherwise.

(c) No Limited Owner Liability. This Agreement has been made and executed by and
on behalf of the Trading Vehicle for the benefit of the Trading Vehicle and the
obligations of the Trading Vehicle set forth herein are not binding upon the
Members nor any of the owners of any Series (“Limited Owners”) individually but
are binding only upon the assets and property identified above, and no resort
shall be had to the assets of any other Series issued by the Trust or the
Limited Owners’ personal property for the satisfaction of any obligation or
claim hereunder.

4. Obligations of the Trading Vehicle, the Managing Owner and the Advisor.

(a) The Registration Statement and Prospectus. Each of the Trading Vehicle and
the Managing Owner agrees to cooperate and use its good faith and reasonable
efforts in connection with (i) the preparation by the Trading Vehicle of the
Registration Statement and the Prospectus (and any amendments or supplements
thereto), (ii) the filing of the Registration Statement and the Prospectus (and
any amendments or supplements thereto) with such governmental and
self-regulatory authorities as the Managing Owner deems appropriate for the
registration and sale of the Interests and the taking of such other actions not
inconsistent with this Agreement as the Managing Owner may determine to be
necessary or advisable in order to make the proposed offer and sale of Interests
lawful in any jurisdiction and (iii) causing the Registration Statement (and any
amendment thereto) to become effective under the 1933 Act and the Blue Sky
securities laws of such jurisdictions as the Managing Owner may deem
appropriate.

The Advisor agrees to make all reasonable and necessary disclosures regarding
itself, its officers and principals, trading performance (not including any
principal accounts,

 

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except as otherwise required to be disclosed by the Trading Vehicle pursuant to
applicable law or regulation or pursuant to request by any regulatory
authority), Trading Approach, customer accounts (other than the names of
customers, unless such disclosure is required by law or regulation) and
otherwise as may be required, in the reasonable judgment of the Managing Owner,
to be made in the Registration Statement and Prospectus and in applications to
any such jurisdictions.

Except as required by applicable law or regulation, no description of or other
information relating to the Advisor may be distributed by the Managing Owner
without the prior written consent of the Advisor, which consent shall not be
unreasonably withheld or delayed; provided that distribution of performance
information relating to the Trading Vehicle account shall not require consent of
the Advisor.

(b) Advisor Not A Promoter. The parties acknowledge that the Advisor has not
been, either alone or in conjunction with the Selling Agent or its affiliates,
an organizer or promoter of the Trading Vehicle, and it is not intended by the
parties that the Advisor shall have any liability as such.

(c) Filings. The Advisor acknowledges that the Trust may at any time determine
not to file the Registration Statement with the SEC or withdraw the Registration
Statement from the SEC or any other governmental or self-regulatory authority
with which it is filed or otherwise terminate the Registration Statement or the
offering of Interests. Upon any such withdrawal or termination, or if the
“minimum” (i) aggregate number of Units or (ii) Series H Units or Series J Units
required to be sold pursuant to the Prospectus is not sold, this Agreement shall
terminate and, except for the payment of expenses as set forth in subparagraph
4(b) above and in paragraph 2, neither the Managing Owner nor the Trading
Vehicle shall have any obligations to the Advisor with respect to this Agreement
nor shall the Advisor have any obligations to the Managing or the Trading
Vehicle with respect to this Agreement.

 

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(d) Representation Agreement. On or prior to commencement of the offering of
Interests pursuant to the Prospectus, the parties agree to execute a
Representation Agreement relating to the offering of the Series H Interests and
Series J Interests (the “Representation Agreement”) substantially in the form of
Exhibit C to this Agreement.

5. Advisor Independence.

(a) Independent Contractor. The Advisor shall for all purposes herein be deemed
to be an independent contractor with respect to the Trading Vehicle, the
Managing Owner and its affiliates and each other commodity trading advisor that
may in the future provide commodity trading advisory services to the Trading
Vehicle and the Managing Owner and its affiliates and shall, unless otherwise
expressly authorized, have no authority to act for or to represent the Trading
Vehicle, the Managing Owner and its affiliates, any other commodity trading
advisor or the Selling Agent in any way or otherwise be deemed to be a general
agent, joint venturer or partner of the Trading Vehicle, the Managing Owner and
its affiliates or any other commodity trading advisor or in any way be
responsible for the acts or omissions of the Trading Vehicle, the Managing Owner
and its affiliates or any other commodity trading advisor as long as it is
acting independently of such persons.

(b) Purchase of Interests. Any of the Advisor, its principals and employees may,
in its discretion, purchase Interests in the Trust.

(c) Confidentiality. The Trading Vehicle and the Managing Owner acknowledge that
the Trading Approach of the Advisor is the confidential property of the Advisor.
Nothing in this Agreement shall require the Advisor to disclose the confidential
or proprietary details of its Trading Approach. The Trading Vehicle and the
Managing Owner

 

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further agree that they will keep confidential and will not disseminate the
Advisor’s trading advice to the Trading Vehicle, except as, and to the extent
that, it may be determined by the Managing Owner to be (i) necessary for the
monitoring or conduct of the business of the Trading Vehicle, including the
performance of brokerage services by the Trading Vehicle commodity broker(s), or
(ii) expressly required by law or regulation.

6. Commodity Broker.

The Managing Owner consents and agrees that, to the extent permitted by
applicable law, the Adviser may (but is not required to) aggregate Commodity
sale and purchase orders for the Trading Vehicle with similar orders being made
contemporaneously for other accounts managed by the Adviser or with proprietary
accounts of the Adviser and its affiliates if, in the Adviser’s reasonable
judgment, such aggregation is reasonably likely to result in an overall economic
benefit to the Trading Vehicle, based on an evaluation that the Trading Vehicle
is benefited by relatively better purchase or sale prices, lower commission
expenses or beneficial timing of transactions, or a combination of these and
other factors. In many instances, the purchase or sale of Commodities for the
Trading Vehicle shall be effected substantially simultaneously with the purchase
or sale of like investments for the accounts of other clients of the Adviser, as
well as proprietary accounts of the Adviser and its affiliates.

All Commodities traded for the account of the Trading Vehicle shall be made
through such commodity broker or brokers, or counterparty or counterparties, as
the Managing Owner directs or otherwise in accordance with such order execution
procedures as are agreed upon between the Advisor and the Trading Vehicle.
Except as set forth below, the Advisor shall not have any authority or
responsibility in selecting or supervising any floor brokers or counterparties
for execution of Commodities trades of the Trading Vehicle or for negotiating
floor brokerage commission rates or other compensation to be charged therefor.
The Advisor

 

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shall not be responsible for determining that any such broker or counterparty
used in connection with any Commodities transactions meets the financial
requirements or standards imposed by the Trading Vehicle Trading Policies and
Limitations. At the present time, it is contemplated that the Trading Vehicle
will execute and clear all Commodities trades through UBS Securities LLC or its
affiliates. The Advisor may, however, with the consent of the Trading Vehicle,
such consent not to be unreasonably withheld, execute transactions at such other
firm(s) and upon such terms and conditions as the Advisor and the Trading
Vehicle agree if such firm(s) agree to “give up” all such transactions to UBS
Securities LLC for clearance. To the extent that the Trading Vehicle determines
to utilize a broker or counterparty other than UBS Securities LLC or its
affiliates, the Trading Vehicle will consult with the Advisor prior to directing
it to utilize such broker or counterparty and will not retain the services of
such firm over the reasonable objection of the Advisor. To the extent that the
Trading Vehicle does not agree to the use of futures give-ups, the floor
brokers, or foreign exchange counterparties selected by the Advisor, the Trading
Vehicle may be disadvantaged because the Advisor will execute all block trades
first. The Advisor will have no liability for the results of implementing such
procedure.

7. Fees.

In consideration of and in compensation for the performance of the Advisor’s
services under this Agreement, the Advisor shall receive from the Trading
Vehicle Allocated Assets a monthly management fee (the “Management Fee”) and a
quarterly incentive fee (the “Incentive Fee”) based on the Trading Vehicle
Allocated Assets, as follows:

(a) A Management Fee equal to  1/12% of 3% (0.25%) of the Trading Vehicle
Allocated Assets determined as of the close of business on the last day of each
month (an annual rate of 3%). For purposes of determining the Management Fee,
any distributions, redemptions, or reallocation of the Trading Vehicle Allocated
Assets made as of the last day of a month shall

 

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be added back to the Trading Vehicle Allocated Assets and there shall be no
reduction for (i) any accrued but unpaid Incentive Fees due the Advisor (under
paragraph (b) below) for the quarter in which such fees are being computed, or
(ii) any accrued but unpaid extraordinary expenses (as described in the Trust’s
Declaration Of Trust And Trust Agreement). The Management Fee determined for any
month in which an Advisor manages the Trading Vehicle Allocated Assets for less
than a full month shall be pro rated, such proration to be calculated on the
basis of the number of days in the month the Trading Vehicle Allocated Assets
were under the Advisor’s management as compared to the total number of days in
such month, with such proration to include appropriate adjustments for any funds
taken away from the Advisor’s management during the month for reasons other than
distributions or redemptions.

(b) An Incentive Fee of twenty per cent (20%) (the “Incentive Fee”) of “New High
Net Trading Profits” (as hereinafter defined) generated on the Trading Vehicle
Allocated Assets, including realized and unrealized gains and losses thereon, as
of the close of business on the last day of each calendar quarter (the
“Incentive Measurement Date”).

New High Net Trading Profits (for purposes of calculating the Advisor’s
Incentive Fee only) will be computed as of the Incentive Measurement Date and
will include such profits (as outlined below) since the immediately preceding
Incentive Measurement Date (or, with respect to the first Incentive Measurement
Date, since commencement of operations of the Trading Vehicle) (each an
“Incentive Measurement Period”).

New High Net Trading Profits for any Incentive Measurement Period will be the
net profits, if any, from trading the Trading Vehicle Allocated Assets during
such period (including (i) realized trading profit (loss) plus or minus (ii) the
change in unrealized trading profit (loss) on open positions), and will be
calculated after the determination of (reduction for) (x) the fees charged to
the Trading Vehicle for brokerage commissions (including the related

 

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exchange fees, clearing fees, pit brokerage fees, give-up fees, and NFA fees)
and (y) the Advisor’s Management Fee, but before deduction of any Incentive Fees
payable during the Incentive Measurement Period. New High Net Trading Profits
will not include interest earned or credited on the Trading Vehicle Allocated
Assets. New High Net Trading Profits will be generated only to the extent that
the Advisor’s cumulative New High Net Trading Profits exceed the highest level
of cumulative New High Net Trading Profits achieved by the Advisor as of a
previous Incentive Measurement Date. Except as set forth below, net losses from
prior quarters must be recouped before New High Net Trading Profits can again be
generated. If a withdrawal or distribution occurs or if this Agreement is
terminated at any date that is not an Incentive Measurement Date, the date of
the withdrawal or distribution or termination will be treated as if it were an
Incentive Measurement Date, but any Incentive Fee accrued in respect of the
withdrawn assets on such date shall not be paid to the Advisor until the next
scheduled Incentive Measurement Date. New High Net Trading Profits for an
Incentive Measurement Period shall exclude capital contributions to the Trading
Vehicle in an Incentive Measurement Period, distributions or redemptions paid or
payable by the Trading Vehicle during an Incentive Measurement Period, as well
as losses, if any, associated with redemptions, distributions, and reallocations
of assets during the Incentive Measurement Period and prior to the Incentive
Measurement Date (i.e., to the extent that assets are allocated away from the
Advisor through redemptions, distributions or allocations caused by the Trading
Vehicle), any loss carryforward attributable to the Advisor shall be reduced in
the same proportion that the value of the assets allocated away from the Advisor
comprises of the value of the Trading Vehicle Allocated Assets prior to such
allocation away from the Advisor. In calculating New High Net Trading Profits,
Incentive Fees paid for a previous Incentive Measurement Period will not reduce
cumulative New High Net Trading Profits in subsequent periods.

 

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(c) Timing of Payment. Management Fees and Incentive Fees shall be paid
generally within 15 business days following the end of the period for which they
are payable. The first Incentive Fee which may be due and owing to the Advisor
in respect of any New High Net Trading Profits will be due and owing as of the
end of the first calendar quarter during which the Trading Advisor managed the
Trading Vehicle Allocated Assets for at least 45 days. If an Incentive Fee shall
have been paid by the Trading Vehicle to the Advisor in respect of any calendar
quarter and the Advisor shall incur subsequent losses on the Trading Vehicle
Allocated Assets, the Advisor shall nevertheless be entitled to retain amounts
previously paid to it in respect of New High Net Trading Profits.

(d) Fee Data. The Trading Vehicle will provide the Advisor with the data used by
the Trading Vehicle to compute the foregoing fees generally within 15 business
days of the end of the relevant period.

(e) Third Party Payments. Neither the Advisor nor any of its officers,
directors, employees or stockholders shall receive any commissions,
compensation, remuneration or payments whatsoever from any broker with which the
Trading Vehicle carries an account for transactions executed in the Trading
Vehicle’s account. The parties acknowledge that a spouse of any of the foregoing
persons may receive floor brokerage commissions in respect of trades effected
pursuant to the Advisor’s Trading Approach on behalf of the Trading Vehicle,
which payment shall not violate the preceding sentence.

8. Term and Termination.

(a) Term. This Agreement shall commence on the date hereof and, unless sooner
terminated pursuant to paragraph (b), (c), or (d) of this Section 8, shall
continue in effect until the close of business on the last day of the month
ending twelve full months following the commencement of the Trading Vehicle’s
trading activities. Thereafter, unless this Agreement is

 

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terminated pursuant to paragraphs (b), (c), or (d) of this Section 8, this
Agreement shall be renewed automatically on the same terms and conditions set
forth herein for successive additional one-year terms, each of which shall
commence on the first day of the month subsequent to the conclusion of the
preceding term. Subject to Section 8(d) hereof, the automatic renewal(s) set
forth in the preceding sentence hereof shall not be affected by (i) any
allocation of the Trading Vehicle Allocated Assets away from the Advisor
pursuant to this Agreement or (ii) the retention of Other Advisors following a
reallocation or otherwise.

(b) Automatic Termination. This Agreement shall terminate automatically in the
event that the Trading Vehicle is terminated or the Trust is terminated. In
addition, this Agreement shall terminate automatically in the event that the Net
Asset Value of the Trading Vehicle Allocated Assets decline as of the end of any
business day by at least 40% from the Net Asset Value of the Trading Vehicle
Allocated Assets (i) as of the beginning of the first day of this Agreement or
(ii) as of the beginning of the first day of any calendar year, as adjusted on
an ongoing basis by (A) any decline(s) in the Trading Vehicle Allocated Assets
caused by distributions, redemptions, reallocations and withdrawals, and
(B) additions to the Trading Vehicle Allocated Assets caused by additional
allocations.

(c) Optional Termination Right of the Trading Vehicle. This Agreement may be
terminated at any time at the election of the Trading Vehicle in its sole
discretion upon at least 30 days’ prior written notice to the Advisor. This
Agreement also may be terminated at the election of the Trading Vehicle upon
prior written notice to the Advisor in the event that: (i) the Trading Vehicle
determines in good faith that the Advisor is unable to use its agreed upon
Trading Approach to any material extent, as such Trading Approach may be refined
or modified in the future in accordance with the terms of this Agreement for the
benefit of the Trading Vehicle; (ii) the Advisor’s registration as a commodity
trading advisor under the CE Act or

 

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membership as a commodity trading advisor with the NFA is revoked, suspended,
terminated or not renewed; (iii) the Trading Vehicle determines in good faith
that the Advisor has failed to conform, and after receipt of written notice,
continues to fail to conform in any material respect, to (A) any of the Trading
Vehicle’s Trading Limitations and Policies or (B) the Advisor’s Trading
Approach; (iv) there is an unauthorized assignment of this Agreement by the
Advisor; (v) the Advisor dissolves, merges or consolidates with another entity,
sells or transfers a substantial portion of its assets or its business goodwill,
or sells or transfers any portion of its Trading Approach utilized with respect
to the Trading Vehicle, in each instance without the consent of the Trading
Vehicle; (vi) Raymond T. Dalio is not in control of the Advisor’s trading
activities for the Trading Vehicle; (vii) the Advisor becomes bankrupt (admitted
or decreed) or insolvent; (viii) for any other reason if the Trading Vehicle
determines in good faith that such termination is essential for the protection
of the Trading Vehicle or any Member, including, without limitation, a good
faith determination by the Trading Vehicle that the Advisor has breached a
material obligation to the Trading Vehicle under this Agreement relating to the
trading of the Trading Vehicle Allocated Assets.

(d) Optional Termination Right of Advisor. The Advisor shall have the right to
terminate this Agreement at any time upon written notice to the Trading Vehicle,
in the event: (i) of the receipt by the Advisor of an opinion of independent
counsel satisfactory to the Advisor and the Trading Vehicle that by reason of
the Advisor’s activities with respect to the Trading Vehicle it is required to
register as an investment adviser under the Investment Advisers Act of 1940 and
it is not so registered; (ii) that the registration of the Managing Owner as a
commodity pool operator under the CE Act or its NFA membership as a commodity
pool operator is revoked, suspended, terminated or not renewed; (iii) that the
Trading Vehicle (A) imposes additional trading limitation(s) pursuant to
Section 1 of this Agreement which the Advisor does

 

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not agree to follow in its management of the Trading Vehicle Allocated Assets or
(B) overrides trading instructions of the Advisor; (iv) the amount of the
Trading Vehicle Allocated Assets decreases to less than $10 million as the
result of redemptions, distributions, reallocations of Trading Vehicle Allocated
Assets, or deleveraging initiated by the Trading Vehicle but not trading losses,
as of the close of business on any Friday; (v) the Trading Vehicle elects
(pursuant to Section 1 of this Agreement) to have the Advisor use a different
Trading Approach in the Advisor’s management of Trading Vehicle assets from that
which the Advisor is then using to manage such assets and the Advisor objects to
using such different Trading Approach; (vi) there is an unauthorized assignment
of this Agreement by the Trading Vehicle; (vii) there is a material breach of
this Agreement by the Trading Vehicle or the Managing Owner and after giving
written notice to the Trading Vehicle or the Managing Owner (as the case may be)
which identifies such breach, such material breach has not been cured within ten
days following receipt of such notice by the Trading Vehicle or the Managing
Owner (as the case may be); (viii) the Advisor provides the Trading Vehicle with
written notice, at least 60 days’ prior to the end of the then current term
(other than with respect to any such notice delivered prior to the end of the
initial term, for which there shall be at least 90 days’ notice), of the
Advisor’s desire and intention to terminate this Agreement as of the end of the
then current term; or (ix) other good cause is shown and the written consent of
the Trading Vehicle is obtained (which shall not be withheld or delayed
unreasonably).

(e) Termination Fees. In the event that this Agreement is terminated with
respect to, or by, the Advisor pursuant to this Section 8 or the Trading Vehicle
allocates the Trading Vehicle’s assets to Other Advisors, the Advisor shall be
entitled to, and the Trading Vehicle shall pay, the Management Fee and the
Incentive Fee, if any, which shall be computed (i) with respect to the
Management Fee, on a pro rata basis, based upon the portion of the month

 

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for which the Advisor had the Trading Vehicle Allocated Assets under management,
and (ii) with respect to the Incentive Fee, if any, as if the effective date of
termination was the last day of the then current calendar quarter. The rights of
the Advisor to fees earned through the earlier to occur of the date of
expiration or termination shall survive this Agreement until satisfied.

(f) Termination and Open Positions. Once terminated, the Advisor shall have no
responsibility for existing positions, including delivery issues, if any, which
may result from such positions.

9. Liquidation of Positions.

The Advisor agrees to liquidate open positions in the amount that the Trading
Vehicle informs the Advisor, in writing via facsimile or other equivalent means,
that the Trading Vehicle considers necessary or advisable to liquidate in order
to (i) effect any termination or reallocation pursuant to Sections 1 or 8,
respectively or (ii) fund its pro rata share of any redemption, distribution or
Trading Vehicle expense. The Trading Vehicle shall not, however, have authority
to instruct the Advisor as to which specific open positions to liquidate, except
as provided in Section 1 hereof. The Trading Vehicle shall provide the Advisor
with such reasonable prior notice of such liquidation as is practicable under
the circumstances and will endeavor to provide at least two days prior notice.

10. Other Accounts of the Advisor.

(a) Management of Other Accounts and Trading of Proprietary Capital. Subject to
paragraph (c) of this Section 10, the Advisor shall be free to (i) manage and
trade accounts for other investors (including other public and private commodity
pools), and (ii) trade for its own account, and for the accounts of its
partners, shareholders, directors, officers and employees, as applicable, using
the same or other information and Trading Approach utilized in the performance
of services for the Trading Vehicle, so long as in the Advisor’s reasonable

 

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judgment the aggregate amount of capital being managed or traded by the Adviser
does not (i) materially impair the Advisor’s ability to carry out its
obligations and duties to the Trading Vehicle pursuant to this Agreement or
(ii) create a reasonable likelihood of the Advisor having to modify materially
its agreed upon Trading Approach being used for the Trading Vehicle in a manner
which might reasonably be expected to have a material adverse effect on the
Trading Vehicle. The aggregate amount of capital referred to in the preceding
sentence hereinafter shall be called “Advisor’s Capacity”. The Advisor shall not
be required to accept capital from the Trading Vehicle in an amount which
exceeds $135 million if such excess amount will cause the Advisor to be managing
or trading funds pursuant to its Trading Approach which exceed the Advisor’s
Capacity.

(b) Equitable Treatment of Accounts. The Advisor agrees, in its management of
accounts other than the account of the Trading Vehicle, that it will not
knowingly or deliberately favor any other account managed or controlled by it or
any of its principals or affiliates (in whole or in part) over the Trading
Vehicle. The preceding sentence shall not be interpreted to preclude (i) the
Advisor from charging another client fees which differ from the fees to be paid
to it hereunder or (ii) an adjustment by the Advisor in the implementation of
any agreed upon Trading Approach in accordance with the procedures set forth in
Section 1 hereof which is undertaken by the Advisor in good faith in order to
accommodate additional accounts. Notwithstanding the foregoing, the Advisor also
shall not be deemed to be favoring another commodity interest account over the
Trading Vehicle’s account if the Advisor, in accordance with specific
instructions of the owner of such account, shall trade such account at a degree
of leverage or in accordance with trading policies which shall be different from
that which would normally be applied or if the Advisor, in accordance with the
Advisor’s money management principles, shall not trade certain commodity
interest contracts for an account based on the

 

23

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amount of equity in such account. The Advisor, upon reasonable request and
receipt of adequate assurances of confidentiality, shall provide the Trading
Vehicle with an explanation of the material differences, if any, in performance
between the Trading Vehicle and any other similar account pursuant to the same
Trading Approach for which the Advisor or any of its principals or affiliates
acts as a commodity trading advisor (in whole or in part), provided, however,
that the Advisor may, in its discretion, withhold from any such inspection the
identity of the client for whom any such account is maintained.

The Managing Owner recognizes, on behalf of itself and the Trading Vehicle, that
investment performance results will vary between accounts for a variety of
reasons, including, but not limited to, the following: (i) the period during
which accounts are active; (ii) the trading approach — used although all
accounts may be traded in accordance with the same trading approach, such
approach can and does change periodically as a result of an ongoing program of
research and development by the Currency Overlay Manager; (iii) the size of
accounts — which influences the trading activity of the account; (iv) investor’s
goals and policies by which accounts are traded — some accounts are more highly
leveraged at the investors’ request producing commensurately larger gains or
losses than other accounts; (v) the rates of brokerage commissions paid by
accounts and when such commissions are charged to accounts; (vi) the amount of
interest income, if earned by accounts, which will depend on the portion of the
account’s assets invested in interest bearing obiligations such as United States
Treasury Bills; (vii) the rate of management and/or incentive fees and amount of
administrative cost paid by accounts — some pay management and incentive fees,
some pay management or incentive fees only, and some pay no fees at all;
(viii) the timing of orders to open or close positions; (ix) the market
conditions in which accounts are traded, which in part determines the quality of
trade executions; (x) different inflows or outflows of equity; and (xi) client
restrictions on permitted executing brokers, dealers or counterparties.

 

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(c) Inspection of Records. Upon the reasonable request of and upon reasonable
notice from the Trading Vehicle or the Managing Owner from time to time, the
Advisor shall permit each of the Trading Vehicle or the Managing Owner or its
representatives (which representatives shall be subject to the prior approval of
the Advisor, such approval not to be unreasonably withheld or delayed) to review
at the Advisor’s offices during normal business hours such trading records
pertaining to the account of the Trading Vehicle, or pertaining to the Advisor’s
covenants or obligations with respect to this Agreement. The Advisor may, in its
discretion, withhold from any such report or inspection information that the
Advisor deems to be confidential or proprietary and the Trading Vehicle and the
Managing Owner and/or such representatives shall keep all such information
obtained by them from the Advisor confidential unless disclosure thereof legally
is required or has been made public. Such right will terminate one year after
the termination of this Agreement and does not permit access to computer
programs, records, or other information used in determining trading decisions.

11. Speculative Position Limits.

If, at any time during the term of this Agreement, it appears to the Advisor
that it may be required to aggregate the Trading Vehicle’s Commodities positions
with the positions of any other accounts it owns or controls for purposes of
applying the speculative position limits of the CFTC, any exchange,
self-regulatory body or governmental authority, the Advisor promptly will notify
the Trading Vehicle if the Trading Vehicle’s positions under its management are
included in an aggregate amount which equals or exceeds the applicable
speculative limit. The Advisor agrees that if its trading recommendations
pursuant to its agreed upon Trading Approach are altered because of the
potential application of speculative position limits, the Advisor will

 

25

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modify its trading instructions to the Trading Vehicle and its other accounts in
a good faith effort to achieve an equitable treatment of all accounts; to wit,
the Advisor will liquidate Commodities positions and/or limit the taking of new
positions in all accounts it manages, including the Trading Vehicle, as nearly
as possible in proportion to the assets available for trading of the respective
accounts (including “notional” equity) to the extent necessary to comply with
applicable speculative position limits. The Advisor presently believes that its
Trading Approach for the management of the Trading Vehicle’s account, assuming
that the allocation is not more than $135 million, can be implemented for the
benefit of the Trading Vehicle notwithstanding the possibility that, from time
to time, speculative position limits may become applicable.

12. Redemptions, Distributions, Reallocations and Additional Allocations.

(a) Notice. The Trading Vehicle agrees to give the Advisor at least two business
days prior notice of any proposed redemptions, exchanges, distributions,
reallocations, additional allocations or withdrawals affecting the Trading
Vehicle Allocated Assets.

(b) Allocations. Redemptions, exchanges, withdrawals and distributions of
Trading Vehicle interests shall be charged against the Trading Vehicle Allocated
Assets.

13. Brokerage Confirmations and Reports.

The Trading Vehicle will instruct the Trading Vehicle’s brokers and
counterparties to furnish the Advisor with copies of all trade confirmations,
daily equity runs and monthly trading statements relating to the Trading Vehicle
Allocated Assets. The Advisor will maintain records and will monitor all open
positions relating thereto; provided, however, that the Advisor shall not be
responsible for any errors by the Trading Vehicle’s brokers or counterparties.
The Managing Owner also will furnish the Advisor with a copy of the form of all
reports, including but not limited to, monthly, quarterly and annual reports,
sent to the Limited Owners and copies of all reports filed with the SEC, the
CFTC and the NFA. The Advisor shall,

 

26

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at the Trading Vehicle’s request, make a good faith effort to provide the
Trading Vehicle with copies of all trade confirmations, daily equity runs,
monthly trading reports or other reports sent to the Advisor by the Trading
Vehicle’s commodity broker regarding the Trading Vehicle and in the Advisor’s
possession or control as the Trading Vehicle deems appropriate if the Trading
Vehicle cannot obtain such copies on its own behalf. Upon request, the Trading
Vehicle will provide the Advisor with accurate information with respect to the
Trading Vehicle Allocated Assets.

14. The Advisor’s Representations and Warranties.

The Advisor represents and warrants that:

(a) it has full capacity and authority to enter into this Agreement and to
provide the services required of it hereunder;

(b) it will not by entering into this Agreement and by acting as a commodity
trading advisor to the Trading Vehicle (i) be required to take any action
contrary to its incorporating or other formation documents or, to the best of
its knowledge, any applicable statute, law or regulation of any jurisdiction or
(ii) breach or cause to be breached, to the best of its knowledge, any
undertaking, agreement, contract, statute, rule or regulation to which it is a
party or by which it is bound which, in the case of (i) or (ii), would
materially limit or materially adversely affect its ability to perform its
duties under this Agreement;

(c) it is duly registered as a commodity trading advisor under the CE Act and is
a member of the NFA as a commodity trading advisor and it will maintain and
renew such registration and membership during the term of this Agreement;

(d) a copy of its most recent Commodity Trading Advisor Disclosure Document as
required by Part 4 of the CFTC’s regulations has been provided to the Trading
Vehicle in the form of Exhibit D hereto (and the Trading Vehicle acknowledges
receipt of such

 

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Disclosure Document) and, except as disclosed in such Disclosure Document, all
information in such Disclosure Document (including, but not limited to,
background, performance, trading methods and trading systems) is true, complete
and accurate in all material respects and is in conformity in all material
respects with the provisions of the CE Act, including the rules and regulations
thereunder, as well as all rules and regulations of the National Futures
Association;

(e) assuming that the Trading Vehicle Allocated Assets equal not more than
$135 million as of the commencement of trading, the amount of such assets should
not, in the reasonable judgment of the Advisor, result in the Advisor being
required to manage funds in an amount which will exceed the Advisor’s Capacity;
and

(f) except as may be required by any regulatory authority, neither the Advisor
nor its stockholders, directors, officers, employees, agents, principals,
affiliates nor any of its or their respective successors or assigns: (i) shall
knowingly use or distribute for any purpose whatsoever any list containing the
names and/or residence addresses of, and/or other information about, the Limited
Owners nor (ii) shall solicit any person it or they know is a Limited Owner for
the purpose of soliciting commodity business from such Limited Owner, unless
such Limited Owner shall have first contacted the Advisor or is already a client
of the Advisor or a prospective client with which the Advisor has commenced
discussions or is introduced to or referred to the Advisor by an unaffiliated
agent other than in violation of clause (i).

The within representations and warranties 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 in any material respect with respect
to the Advisor, the Advisor promptly will notify the Trading Vehicle in writing
thereof.

 

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15. The Managing Owner’s and the Trading Vehicle’s Representations and
Warranties.

Each of the Managing Owner and the Trading Vehicle represents and warrants only
as to itself (and, further, provided that only the Managing Owner is making the
representations and warranties in Section 13(c) and Section 13(e)(ii), and only
the Trading Vehicle is making the representations and warranties in
Section 13(e)(i) and Section 13(f)) that:

(a) each has the full capacity and authority to enter into this Agreement and to
perform its obligations hereunder;

(b) it will not (i) be required to take any action contrary to its incorporating
or other formation documents or any applicable statute, law or regulation of any
jurisdiction or (ii) breach or cause to be breached (A) any undertaking,
agreement, contract, statute, rule or regulation to which it is a party or by
which it is bound or (B) any order of any court or governmental or regulatory
agency having jurisdiction over it, which in the case of (i) or (ii) would
materially limit or materially adversely affect the performance of its duties
under this Agreement;

(c) it is registered as a commodity pool operator under the CE Act and is a
commodity pool operator member of the NFA, and it will maintain and renew such
registration and membership during the term of this Agreement;

(d) this Agreement has been duly and validly authorized, executed and delivered
and is a valid and binding agreement, enforceable against each of them, in
accordance with its terms;

(e) on the date hereof, it is, and during the term of this Agreement, it will be
(i) in the case of the Trading Vehicle, a duly formed and validly existing
Delaware limited liability company, in good standing under the laws of the State
of Delaware, and in good

 

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standing and qualified to do business in each jurisdiction in which the nature
and conduct of its business requires such qualification and where the failure to
be so qualified would materially adversely affect its ability to perform its
obligations under this Agreement, and (ii) in the case of the Managing Owner, a
duly formed and validly existing corporation, in good standing under the laws of
the State of Connecticut and in good standing and qualified to do business in
each jurisdiction in which the nature and conduct of its business requires such
qualification and where the failure to be so qualified would materially
adversely affect its ability to perform its obligations under this Agreement;
and

(f) it consents to its account being treated by the Adviser as an exempt account
under Commodity Futures Trading Commission rule 4.7.

The within representations and warranties 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 in any material respect, the Trading
Vehicle in the case of its representations and warranties, and the Managing
Owner in the case of its representations and warranties, promptly will notify
the Advisor in writing.

16. Assignment.

This Agreement may not be assigned by any of the parties hereto without the
express prior written consent of the other parties hereto, except that the
Advisor need not obtain the consent of any Other Advisor.

17. Successors.

This Agreement shall be binding upon and inure to the benefit of the parties
hereto and the successors and permitted assignees of each of them, and no other
person (except as otherwise provided herein) shall have any right or obligation
under this Agreement. The terms “successors” and “assignees” shall not include
any purchasers, as such, of Interests.

 

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18. Amendment or Modification or Waiver.

(a) Changes to Agreement. This Agreement may not be amended or modified, nor may
any of its provisions be waived, except upon the prior written consent of the
parties hereto, except that an amendment to, a modification of or a waiver of
any provision of the Agreement as to the Advisor need not be consented to by any
Other Advisor.

(b) No Waiver. No failure or delay on the part of any party hereto in exercising
any right, power or remedy hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right, power or remedy preclude
any other or further exercise thereof or the exercise of any other right, power
or remedy. Any waiver granted hereunder must be in writing and shall be valid
only in the specific instance in which given.

19. Notices.

Any notices, direction, instruction, acknowledgment, or other communication
required or contemplated by this Agreement shall be confirmed in writing either
by facsimile, email or courier service and shall be deemed given and effective
only when acknowledged by the intended recipient, such acknowledgement not to be
unreasonably delayed or withheld. Notices shall be addressed as follows:

 

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If to the Managing Owner or the Trading Vehicle:

Preferred Investment Solutions Corp.

51 Weaver Street

Building One South, 2nd Floor

Greenwich, Connecticut 06831

Attention: General Counsel

Facsimile: (203) 861-1095

with a copy to:

Sidley Austin Brown & Wood LLP

787 Seventh Avenue

New York, New York 10019

Attention: Michael J. Schmidtberger, Esq.

Facsimile: (212) 839-5599

If to the Advisor:

Bridgewater Associates, Inc.

1 Glendinning Place

Westport, Connecticut 06880

Attention: Peter R La Tronica

Facsimile: (203) 291-7300

with a copy to:

Bridgewater Associates, Inc.

1 Glendinning Place

Westport, Connecticut 06880

Attention: Legal Department

Facsimile: (203) 291-7300

or to such other address as the party entitled to notice shall hereafter
designate by written notice to the other parties.

20. Governing Law.

Each party agrees that this Agreement shall be governed by and construed in
accordance with the laws of the State of New York without regard to the conflict
of laws principles thereof.

 

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21. Survival.

The provisions of this Agreement shall survive the termination of this Agreement
with respect to any matter arising while this Agreement was in effect.

22. Promotional Literature.

Each party agrees that prior to using any promotional literature in which
reference to the other parties hereto is made, it shall furnish in advance a
copy of such information to the other parties and will not make use of any
promotional literature containing references to such other parties to which such
other parties object, except as otherwise required by law or regulation.

23. No Liability of Limited Owners.

This Agreement has been made and executed by and on behalf of the Trading
Vehicle, and the obligations of the Trading Vehicle and/or the Managing Owner
set forth herein are not binding upon any of the Members or Limited Owners
individually, but rather, are binding only upon the assets and property of the
Trading Vehicle and, to the extent provided herein, upon the assets and property
of the Managing Owner.

24. Headings.

Headings to sections herein are for the convenience of the parties only and are
not intended to be or to affect the meaning or interpretation of this Agreement.

25. Complete Agreement.

Except as otherwise provided herein, this Agreement and the Representation
Agreement constitute the entire agreement between the parties with respect to
the matters referred to herein, and no other agreement, verbal or otherwise,
shall be binding upon the parties hereto except as may be set forth in writing
and executed by the parties hereto.

 

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26. Counterparts.

This Agreement may be executed in one or more counterparts, each of which shall
be deemed an original and all of which, when taken together, shall constitute
one original instrument.

27. Arbitration, Remedies.

Each party hereto agrees that any dispute relating to the subject matter of this
Agreement shall be settled and determined by arbitration in the City of New York
pursuant to the rules of the NFA or, if the NFA should refuse to accept the
matter, the American Arbitration Association.

28. Anti-Money Laundering.

The Trading Vehicle acknowledges that the Advisor represents that the Advisor is
subject to United States of America and/or European Union anti-money laundering
regulations. As applicable, the Trading Vehicle will use correspondent selling
agents that, in the Trading Vehicle’s reasonable belief, have appropriate
procedures in place to comply with any anti-money laundering laws that apply
regarding an investor’s subscription for Series H Interests and Series J
Interests. The Trading Vehicle agrees to provide such information as may be
reasonably requested by the Advisor in order to comply with a request from any
applicable regulatory authority.

The Trading Vehicle confirms that, to the best of the Trading Vehicle’s
knowledge and belief, the Trading Vehicle’s investment moneys are not, in whole
or in part, the proceeds of drug trafficking or other such criminal activity,
nor do they represent, in whole or in part, directly or indirectly, such
proceeds.

 

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29. ADV

The Trading Vehicle received Part II of the Form ADV of the Advisor at least 48
hours prior to the date of this Agreement.

 

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PURSUANT TO AN EXEMPTION FROM THE COMMODITY FUTURES TRADING COMMISSION IN
CONNECTION WITH ACCOUNTS OF QUALIFIED ELIGIBLE PERSONS, THIS BROCHURE OR 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 BROCHURE OR
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.

 

WMT III SERIES H/J TRADING VEHICLE LLC

By:

  WORLD MONITOR TRUST III- SERIES H

Its:

  Member   By:   PREFERRED INVESTMENT SOLUTIONS CORP., its sole Managing Owner  
By:  

/s/ Esther E. Goodman

  Name:   Esther E. Goodman   Title:  

Chief Operating Officer and

Senior Executive Vice President

By:   WORLD MONITOR TRUST III- SERIES J Its:   Member   By:  
PREFERRED INVESTMENT SOLUTIONS CORP., its sole Managing Owner   By:  

/s/ Esther E. Goodman

  Name:   Esther E. Goodman   Title:  

Chief Operating Officer and

Senior Executive Vice President

 

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PREFERRED INVESTMENT SOLUTIONS CORP. By:  

/s/ Esther E. Goodman

Name:   Esther E. Goodman Title:  

Chief Operating Officer and

Senior Executive Vice President

BRIDGEWATER ASSOCIATES, INC. By:  

/s/ Peter R. La Tronica

Name:   Peter R. La Tronica Title:   Vice President

 

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EXHIBIT A

TRADING VEHICLE TRADING APPROACH

AGGRESSIVE PURE ALPHA FUTURES ONLY – A, NO BENCHMARK

The Advisor will make its trading decisions for the Trading Vehicle according to
its Aggressive Pure Alpha Futures Only-A, No Benchmark trading system as
described in Exhibits A and D as amended from time to time. For purposes of this
Agreement, the Aggressive Pure Alpha Futures Only-A, No Benchmark strategy will
trade the Trading Vehicle Allocated Assets at 1.5 times the normal Pure Alpha
Strategy level.

 

A-1

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EXHIBIT B

TRADING LIMITATIONS AND POLICIES

The following limitations and policies are applicable to assets representing the
Trading Vehicle Allocated Assets as a whole and at the outset to the Advisor
individually; since the Advisor initially will manage 100% of the Trading
Vehicle Allocated Assets, such application of the limitations and policies is
identical initially for the Trading Vehicle and the Advisor. The Advisor
sometimes may be prohibited from taking positions for the Trading Vehicle
Allocated Assets which it would otherwise acquire due to the need to comply with
these limitations and policies. The Trading Vehicle or the Managing Owner will
monitor compliance with the trading limitations and policies set forth below,
and the Trading Vehicle may impose additional restrictions (through modification
of such limitations and policies) upon the trading activities of the Advisor as
it, in good faith, deems appropriate in the best interests of the Trading
Vehicle, subject to the terms of the Advisory Agreement.

The Trading Vehicle will not approve a material change in the following trading
limitations and policies without obtaining the prior written approval of Limited
Owners owning more than 50% of the Series H Interests. The Trading Vehicle may,
however, impose additional trading limitations on the trading activities of the
Trading Vehicle without obtaining such approval if the Trading Vehicle or the
Managing Owner determines such additional limitations to be necessary in the
best interests of the Members.

Investment Objective

To maximize total return with a target tracking error of 18% per year (tracking
error is defined as the annualized standard deviation of returns).

Permitted Investments

 

  •  

fixed income derivatives and fixed income index derivatives.

 

  •  

currency spot and derivative instruments

 

  •  

equity derivatives and equity index derivatives

 

  •  

commodity derivatives and commodity index derivatives

 

  •  

derivatives are limited to CFTC approved futures, options and currency forwards

Trading Limitations

The Trading Vehicle will not: (i) engage in pyramiding its commodities positions
(i.e., the use of unrealized profits on existing positions to provide margin for
the acquisition of additional positions in the same or a related commodity
provided, however, unrealized profits may be considered in determining the
current Trading Vehicle Allocated Assets) but may take into account open trading
equity on existing positions in determining generally whether to acquire
additional commodities positions; (ii) borrow or loan money (except with respect
to the initiation or maintenance of commodities positions or obtaining lines of
credit for the trading of forward currency contracts; provided, however, that
the Trading Vehicle is prohibited from incurring any indebtedness on a
non-recourse basis); (iii) permit rebates to be received by the

 

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Trading Vehicle or its affiliates or permit the Trading Vehicle or any affiliate
to engage in any reciprocal business arrangements which would circumvent the
foregoing prohibition; (iv) permit the Advisor to share in any portion of the
commodity brokerage fees paid by the Trading Vehicle; (v) commingle its assets,
except as permitted by law; or (vi) permit the churning of its commodity
accounts.

The Trading Vehicle will conform in all respects to the rules, regulations and
guidelines of the markets on which its trades are executed.

Trading Policies

Subject to the foregoing limitations, the Advisor has agreed to abide by the
trading policies of the Trading Vehicle, which currently are as follows:

(1) The Trading Vehicle Allocated Assets will generally be invested in contracts
which are traded in sufficient volume which, at the time such trades are
initiated, are reasonably expected to permit entering and liquidating positions.

(2) Stop or limit orders may, in the Advisor’s discretion, be given with respect
to initiating or liquidating positions in order to attempt to limit losses or
secure profits. If stop or limit orders are used, no assurance can be given,
however, that the clearing broker will be able to liquidate a position at a
specified stop or limit order price, due to either the volatility of the market
or the inability to trade because of market limitations.

(3) The Trading Vehicle may engage in EFP transactions involving currencies and
metals and other commodities.

(4) The Trading Vehicle may, from time to time, employ trading techniques such
as spreads, straddles and conversions.

(5) The Trading Vehicle will not initiate open futures or option positions which
would result in net long or short positions requiring as margin or premium for
outstanding positions in excess of 15% of the Trading Vehicle Allocated Assets
for any one commodity or in excess of 66 2/3% of the Trading Vehicle Allocated
Assets for all commodities combined. Under certain market conditions, such as an
inability to liquidate open commodities positions because of daily price
fluctuations, the Trading Vehicle may be required to commit the Trading Vehicle
Allocated Assets as margin in excess of the foregoing limits, and in such case
the Trading Vehicle will cause the Advisor to reduce its open futures and option
positions to comply to these limits before initiating new commodities positions.

(6) To the extent the Trading Vehicle engages in transactions in forward
currency contracts other than with or through UBS Securities LLC or its
affiliates, the Trading Vehicle will only engage in such transactions with
counterparties that have a short term credit rating of at least A-1 or P-1. The
Advisor may enter into netting agreements with these counterparties. In the
event that the counterparty is an unrated guaranteed affiliate of the parent
company, the parent’s credit rating shall apply.

 

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EXHIBIT C

REPRESENTATION AGREEMENT CONCERNING THE

REGISTRATION STATEMENT AND THE PROSPECTUS

REPRESENTATION AGREEMENT (“Agreement”) dated as of the 30th day of November,
2005, by and among WMT III SERIES H/J TRADING VEHICLE LLC, a Delaware limited
liability company (the “Trading Vehicle”), WORLD MONITOR TRUST III – SERIES H
and WORLD MONITOR TRUST III – SERIES J (individually and collectively a
“Trust”), each a separate series of a statutory trust organized under Chapter 38
of Title 12 of the Delaware Code (the “Delaware Act”), KENMAR SECURITIES, INC.,
A Connecticutt corporation (the “Selling Agent”), PREFERRED INVESTMENT SOLUTIONS
CORP., a Connecticut corporation (the “Managing Owner”), and BRIDGEWATER
ASSOCIATES, INC., a Connecticut corporation (the “Advisor”).

WITNESSETH:

WHEREAS, the Trust proposes to make an initial public offering (the “Offering”)
of units of beneficial interest in the Trust (the “Interests”) issuable in
multiple series of Interests (the “Series”), each separately managed by a
different professional commodity trading advisor through the Selling Agent, an
affiliate of the Managing Owner, and in connection therewith, the Trust intends
to file with the U.S. Securities and Exchange Commission (the “SEC”), pursuant
to the U.S. Securities Act of 1933, as amended (the “1933 Act”), a registration
statement on Form S-1 to register the Interests, including the Series H
Interests and the Series J Interests, and as a part thereof a prospectus (which
registration statement, together with all amendments thereto, shall be referred
to herein as the “Registration Statement” and which prospectus in final form,
together with all amendments and supplements thereto, shall be referred to
herein as the “Prospectus”); and

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WHEREAS, the Trading Vehicle and the Managing Owner entered into an agreement
with the Advisor, dated as of November 30, 2005 (the “Advisory Agreement”),
pursuant to which the Advisor has agreed to act as a commodity trading advisor
to the Trading Vehicle; and

WHEREAS, Series H and Series J are the only Members of the Trading Vehicle; and

WHEREAS, the parties hereto wish to set forth their duties and obligations to
each other with respect to the Registration Statement as of its effective date
and the Prospectus as of the date(s) on which subscribers’ funds are transferred
to the trust estate represented by Series H Interests and Series J Interests
(“Closing Dates(s)”).

NOW, THEREFORE, the parties agree as follows:

1. Representations and Warranties of the Advisor. The Advisor hereby represents
and warrants to the Selling Agent, the Trading Vehicle, the Trust and the
Managing Owner that:

(a) All references in the Registration Statement, consented to in writing by the
Advisor in the form attached hereto as Exhibit A, as of its effective date and
the Prospectus as of the Closing Date to (i) the Advisor and its affiliates, and
the controlling persons, shareholders, directors, officers and employees of any
of the foregoing, (ii) the Advisor’s Trading Approach (as defined in the
Advisory Agreement) and (iii) the actual past performance of discretionary
accounts directed by the Advisor or any principal thereof, including the notes
to the tables reflecting such actual past performance (hereinafter referred to
as the Advisor’s “Past Performance History”) are complete and accurate in all
material respects, and as to such persons,

 

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the Advisor’s Trading Approach and the Advisor’s past performance history, the
Registration Statement as of its effective date and the Prospectus as of each
Closing Date contain all information requested by the Managing Owner, and do not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein (with
respect to the Prospectus, in light of the circumstances in which they were
made) not misleading. The Advisor also represents and warrants as to the
accuracy and completeness in all material respects of the underlying data made
available by the Advisor to the Trust and the Managing Owner for purposes of
preparing the pro forma performance tables. Except as specifically stated
herein, it is understood that no representation or warranty is being made with
respect to the calculations used to create the pro forma performance table or
notes thereto. The term “principal” in this Agreement shall have the same
meaning as that term in Commodity Futures Trading Commission (the “CFTC”)
Regulation § 4.10(e) under the CE Act.

(b) The Advisor will not distribute the Registration Statement, the Prospectus
and/or the selling materials related thereto, except as may be requested by the
Managing Owner in connection with “road show” presentations or otherwise.

(c) This Agreement and the Advisory Agreement have been duly and validly
authorized, executed and delivered on behalf of the Advisor and each is a valid
and binding agreement enforceable in accordance with its terms. The performance
of the Advisor’s obligations under this Agreement and the consummation of the
transactions set forth in this Agreement, in the Advisory Agreement and in the
Registration Statement as of its effective date and Prospectus as of the Closing
Date are not contrary to the provisions of the Advisor’s formation documents, or
to the best of its knowledge, any applicable statute, law or regulation of any
jurisdiction, and will not result in any violation, breach or default under any
term or provision of any undertaking, contract, agreement or order to which the
Advisor is a party or by which the Advisor is bound.

 

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(d) The Advisor has all governmental and regulatory licenses, registrations and
approvals required by law as may be necessary to perform its obligations under
the Advisory Agreement and this Agreement and to act as described in the
Registration Statement as of its effective date and the Prospectus as of the
Closing Date including, without limitation, registration as a commodity trading
advisor under the CE Act and membership as a commodity trading advisor with the
National Futures Association (the “NFA”), and it will maintain and renew any
required licenses, registrations, approvals or memberships during the term of
the Advisory Agreement.

(e) On the date hereof, the Advisor is, and at all times during the term of this
Agreement will be, a corporation formed and validly existing and in good
standing under the laws of its jurisdiction of formation and in good standing
and qualified to do business in each jurisdiction in which the nature or conduct
of its business requires such qualifications and the failure to be so qualified
would materially adversely affect the Advisor’s ability to perform its
obligations hereunder or under the Advisory Agreement. The Advisor has full
capacity and authority to conduct its business and to perform its obligations
under this Agreement and to act as described in the Registration Statement as of
its effective date and the Prospectus as of the Closing Date.

(f) Neither the Advisor nor any of its principals has managed, controlled or
directed, on an overall discretionary basis, the trading for any commodity
account which is required by CFTC regulations and the rules and regulations
under the 1933 Act to be disclosed in the Registration Statement as of its
effective date and the Prospectus as of the Closing Date which is not set forth
in the Registration Statement as of its effective date and in the Prospectus as
of the Closing Date as required.

 

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(g) The Advisor is required to be registered as an investment adviser under the
United States Investment Advisers Act of 1940, as amended (the “Advisers Act”),
and is so registered.

(h) As of the date hereof, there has been no material adverse change in the
Advisor’s past performance history as set forth in the Registration Statement or
in the Prospectus under the caption “BRIDGEWATER ASSOCIATES, INC.” which has not
been communicated in writing to and received by the Managing Owner and the
Selling Agent or their counsel.

(i) Except for subsequent performance, as to which no representation is made,
since the date of the Advisory Agreement, (i) there has not been any material
adverse change in the condition, financial or otherwise, of the Advisor or in
the earnings, affairs or business prospects of the Advisor, whether or not
arising in the ordinary course of business, and (ii) there have not been any
material transactions entered into by the Advisor other than those in the
ordinary course of its business.

(j) Except as disclosed in the Registration Statement and in the Prospectus,
there is no pending, or to the best of its knowledge, threatened or contemplated
action, suit or proceeding before or by any court, governmental, administrative
or self-regulatory body or arbitration panel to which the Advisor or its
principals is a party, or to which any of the assets of the Advisor is subject
which reasonably might be expected to result in any material adverse change in
the condition (financial or otherwise), business or prospects of the Advisor or
which reasonably might be expected to materially adversely affect any of the
material assets of the Advisor or which reasonably might be expected to
(A) impair materially the Advisor’s ability to

 

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discharge its obligations to the Trading Vehicle or (B) result in a matter which
would require disclosure in the Registration Statement and/or Prospectus;
furthermore the Advisor has not received any notice of an investigation by
(i) the NFA regarding non-compliance with its rules or the CE Act, (ii) the CFTC
regarding non-compliance with the CE Act, or the rules and regulations
thereunder or (iii) any exchange regarding non-compliance with the rules of such
exchange which investigation reasonably might be expected to materially impair
the Advisor’s ability to discharge its obligations under this Agreement or the
Advisory Agreement.

2. Covenants of the Advisor. If, at any time during the term of the Advisory
Agreement, the Advisor discovers any fact, omission or event, or that a change
of circumstances has occurred, which would make the Advisor’s representations
and warranties in Section 1 of this Agreement inaccurate or incomplete in any
material respect, or which might reasonably be expected to render the
Registration Statement or Prospectus, with respect to (i) the Advisor or its
principals, (ii) the Advisor’s Trading Approach or (iii) the Advisor’s past
performance history, untrue or misleading in any material respect, the Advisor
will provide prompt written notification to the Trading Vehicle, the Managing
Owner and the Selling Agent of any such fact, omission, event or change of
circumstance, and the facts related thereto, and it is agreed that the failure
to provide such notification or the failure to continue to be in compliance with
the foregoing representations and warranties during the term of the Advisory
Agreement as soon as possible following such notification shall be cause for the
Trading Vehicle to terminate the Advisory Agreement with the Advisor on prior
written notice to the Advisor. The Advisor also agrees that, during the term of
the Advisory Agreement, from and after the Effective Date of the Registration
Statement and for so long as Interests in the Trust are being offered, whether
during the Initial Offering Period or during any Continuous Offering Period (as

 

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those terms are described in the Prospectus), it will provide the Selling Agent,
the Trading Vehicle and the Managing Owner with updated month-end capsule
performance information relating to the Advisor’s past performance history, as
required to be disclosed in the performance tables relating to the performance
of the Advisor in the Prospectus under the caption “BRIDGEWATER ASSOCIATES,
INC.” beyond the periods disclosed therein. The Advisor shall use its best
efforts to provide such information within a reasonable period of time after the
information is available to it. Concurrently herewith the Advisor shall execute
and deliver a consent, in the form and substance of Exhibit A hereto, with
respect to the Prospectus.

3. Modification of Registration Statement or Prospectus. If any event or
circumstance occurs as a result of which it becomes necessary, in the judgment
of the Managing Owner and the Selling Agent, to amend the Registration Statement
in order to make the Registration Statement not materially misleading or to
amend or to supplement the Prospectus in order to make the Prospectus not
materially misleading in light of the circumstances existing at the time it is
delivered to a subscriber, or if it is otherwise necessary in order to permit
the Trust to continue to offer its Interests subsequent to the Initial Offering
Period subject to the limitations set forth in the Advisory Agreement, the
Advisor will furnish such information with respect to itself and its principals,
as well as its Trading Approach and past performance history as the Managing
Owner or the Selling Agent may reasonably request, and will cooperate to the
extent reasonably necessary in the preparation of any required amendments or
supplements to the Registration Statement and/or the Prospectus.

4. Advisor’s Closing Obligations. On or prior to the Closing Date with respect
to the initial offering of Series H Interests and Series J Interests (the
“Initial Closing Date”), and thereafter, only if requested, on or prior to each
closing date during the continuous

 

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offering of Series H Interests and Series J Interests (each a “Subsequent
Closing Date”), the Advisor shall deliver or cause to be delivered, at the
expense of the Advisor, to the Selling Agent, the Trading Vehicle, the Trust and
the Managing Owner, a certificate of the Advisor in a form reasonably acceptable
to the Selling Agent, the Trading Vehicle, the Managing Owner and the Advisor,
to the effect that:

(a) The representations and warranties of the Advisor in Section 1 of this
Agreement are true and correct in all material respects on the date of the
certificate as though made on such date.

(b) Nothing has come to the Advisor’s attention which would cause the Advisor to
believe that, at any time from the time the Registration Statement initially
became effective to the Closing Date, the Registration Statement, as amended
from time to time, or the Prospectus, as amended or supplemented from time to
time, with respect to the Advisor, or its affiliates, and controlling persons,
shareholders, directors, officers or employees of any of the foregoing, or with
respect to the Advisor’s Trading Approach or past performance history, contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein (with
respect to the Prospectus, in light of the circumstances in which they were
made) not misleading.

(c) The Advisor has performed all covenants and agreements herein contained to
be performed on its part at or prior to the Closing Date.

5. Advisor Acknowledgements. The Advisor acknowledges that: (i) it may be a
condition to each closing under the Selling Agreement that the Selling Agent
shall have received, at no cost to the Advisor, letter(s) from certified public
accountants or other reputable professionals selected by the Selling Agent with
respect to the past performance history of the

 

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Advisor as set forth in the Selling Agreement and (ii) the Trust may at any time
withdraw the Registration Statement from the SEC or otherwise terminate the
Registration Statement or the offering of Interests, and upon any such
withdrawal or termination or if the “minimum” number of Interests, as described
in the Prospectus, is not sold, this Agreement shall terminate and none of the
parties hereto shall have any obligation to any other party pursuant to this
Agreement, except pursuant to Section 10 of this Agreement to the extent that
such section is applicable.

6. Warranties of the Trading Vehicle and the Managing Owner. The Managing Owner
hereby only represents and warrants as to itself and the Trust (as applicable),
and the Trading Vehicle hereby only represents and warrants as to itself, to the
Advisor that:

(a) On the date hereof, the Trading Vehicle is, and at all times during the term
of this Agreement and the Advisory Agreement will be, a duly formed and validly
existing limited liability company in good standing under the laws of the State
of Delaware and at all times during the term of this Agreement and the Advisory
Agreement will be in good standing and qualified to do business in each
jurisdiction in which the nature or conduct of its business requires such
qualifications and the failure to be so qualified materially adversely would
affect its ability to perform its obligations under this Agreement and the
Advisory Agreement and to operate as described in the Prospectus, and the
Managing Owner is, and at all times during the term of this Agreement and the
Advisory Agreement will be, a duly formed and validly existing corporation in
good standing under the laws of the State of Connecticut and is, and at all
times during the term of this Agreement and the Advisory Agreement will be, in
good standing and qualified to do business as a foreign corporation in each
other jurisdiction in which the nature or conduct of its business requires such
qualifications and in which the failure to be so qualified materially adversely
would affect its ability to act as Managing Owner of the Trust and to

 

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perform its obligations hereunder and under the Advisory Agreement, and each has
full capacity and authority to conduct its business and to perform its
obligations under this Agreement and the Advisory Agreement and to act as
described in the Registration Statement as of its effective date and the
Prospectus as of the Closing Date.

(b) Each of this Agreement and the Advisory Agreement has been duly and validly
authorized, executed and delivered on behalf of the Trading Vehicle and the
Managing Owner, is a valid and binding agreement of the Trading Vehicle and the
Managing Owner and is enforceable in accordance with its terms. The performance
of the Trading Vehicle’s and the Managing Owner’s obligations under this
Agreement and under the Advisory Agreement, and the consummation of the
transactions set forth in this Agreement and the Advisory Agreement, and in the
Registration Statement as of its effective date and Prospectus as of the Closing
Date are not contrary to the provisions of the Trust’s Declaration of Trust and
Trust Agreement, as it may be amended from time to time (the “Trust Agreement”),
or Certificate of Trust, the Managing Owner’s Articles of Incorporation or
By-Laws, or the Trading Vehicle’s Certificate of Formation or Limited Liability
Company Agreement, respectively, any applicable statute, law or regulation of
any jurisdiction and will not result in any violation, breach or default under
any term or provision of any undertaking, contract, agreement or order, to which
the Trading Vehicle, the Trust or the Managing Owner, is a party or by which the
Trading Vehicle, the Trust or the Managing Owner is bound.

(c) Each of the Trading Vehicle, the Trust and the Managing Owner (as the case
may be) has obtained all required governmental and regulatory licenses,
registrations and approvals required by law as may be necessary to perform their
obligations under this Agreement and under the Advisory Agreement and to act as
described in the Registration Statement as of its

 

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effective date and in the Prospectus as of the Closing Date (including, without
limitation, the Managing Owner’s registration as a commodity pool operator under
the CE Act and membership as a commodity pool operator with the NFA) and will
maintain and renew any required licenses, registrations, approvals and
memberships required during the term of this Agreement and the Advisory
Agreement.

(d) The Trading Vehicle is not required to be registered as an investment
company under the United States Investment Company Act of 1940, as amended (the
“Investment Company Act”).

(e) All authorizations, consents or orders of any court or of any federal, state
or other governmental or regulatory agency or body required for the valid
authorization, issuance, offer and sale of the Interests have been obtained, and
no order preventing or suspending the use of the Prospectus with respect to the
Interests has been issued by the SEC, the CFTC or the NFA. The Registration
Statement as of its effective date and the Prospectus as of the Closing Date
contain all statements which are required to be made therein, conform in all
material respects with the requirements of the 1933 Act and the CE Act, and the
rules and regulations of the SEC and the CFTC, respectively, thereunder, and
with the rules of the NFA and do not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein (with respect to the Prospectus, in light of the
circumstances in which they are made) not misleading; and at all times
subsequent hereto up to and including the date of termination of the Initial
Offering Period and any Subsequent Offering Period, the Registration Statement
as of its effective date and the Prospectus as of the Closing Date will contain
all statements required to be made therein and will conform in all material
respects with the requirements of the 1933 Act and the CE Act, and the

 

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rules and regulations of the SEC and the CFTC, respectively, thereunder, and
with the rules of the NFA and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein
(with respect to the Prospectus, in light of the circumstances in which they are
made) not misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon and in
conformity with information furnished to the Managing Owner, the Trust or to the
Selling Agent by or on behalf of the Advisor for the express purpose of
inclusion in the Registration Statement or the Prospectus, including without
limitation references to the Advisor and its affiliates, and controlling
persons, shareholders, directors, officers and employees, as well as to the
Advisor’s Trading Approach and past performance history provided such references
have been approved.

(f) The Registration Statement as of its effective date and the Prospectus as of
the Closing Date have been delivered to the Advisor.

(g) There is no pending, or to its knowledge, threatened or contemplated action,
suit or proceeding before any court or arbitration panel or before or by any
governmental, administrative or self-regulatory body to which the Trading
Vehicle, the Trust or the Managing Owner or the principals of any is a party, or
to which any of the assets of any of the foregoing persons is subject, which
might reasonably be expected to result in any material adverse change in their
condition (financial or otherwise), business or prospects or reasonably might be
expected to affect adversely in any material respect any of their assets or
which reasonably might be expected to materially impair their ability to
discharge their obligations under this Agreement or under the Advisory
Agreement; and neither the Trading Vehicle, the Trust nor the Managing Owner has
received any notice of an investigation by (i) the NFA regarding non-compliance
with NFA rules or the CE Act, (ii) the CFTC regarding non-compliance with the CE
Act or the rules

 

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and regulations thereunder, or (iii) any exchange regarding non-compliance with
the rules of such exchange which investigation reasonably might be expected to
materially impair the ability of each of the Trading Vehicle, the Trust and the
Managing Owner to discharge its obligations under this Agreement or under the
Advisory Agreement.

7. Covenants of the Managing Owner and the Trading Vehicle. If, at any time
during the term of the Advisory Agreement, the Managing Owner or the Trading
Vehicle discovers any fact, omission or event or that a change of circumstance
has occurred which would make its representations and warranties in Section 6 of
this Agreement inaccurate or incomplete in any material respect, the Trading
Vehicle or the Managing Owner (as the case may be), as appropriate, promptly
will provide written notification to the Advisor of such fact, omission, event
or change of circumstance and the facts related thereto. The Managing Owner
shall provide the Advisor with a copy of each amendment to the Registration
Statement and amendment or supplement to the Prospectus, and no amendment to the
Registration Statement or amendment or supplement to the Prospectus which
contains any statement or information regarding the Advisor will be filed or
used unless the Advisor has received reasonable prior notice and a copy thereof
and has consented in writing to such statement or information being filed and
used.

8. Trading Vehicle’s and Managing Owner’s Closing Obligations. On or prior to
the Initial Closing Date, and thereafter on or prior to each Subsequent Closing
Date, if the Trading Vehicle and the Managing Owner have requested that the
Advisor provide certificates and documents pursuant to Section 4 of this
Agreement, the Trading Vehicle and the Managing Owner shall deliver or cause to
be delivered to the Advisor, certificates of the Trading Vehicle and the
Managing Owner in the form proposed prior to the Closing Date by counsel to

 

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the Trading Vehicle and the Managing Owner with such changes in such form as are
proposed by the Advisor or its counsel and are acceptable to the Trading
Vehicle, the Managing Owner and their counsel so as to make such form mutually
acceptable to the Trading Vehicle, the Managing Owner, the Advisor and their
respective counsel, to the effect that:

(a) Its representations and warranties in Section 6 of this Agreement are true
and correct in all material respects on the date of the certificates as though
made on such date.

(b) It performed all covenants and agreements herein contained to be performed
on its part at or prior to the Closing Date.

9. Survival of Representations, Warranties and Covenants. All representations,
warranties and covenants in this Agreement or contained in certificates required
to be delivered hereunder shall survive the delivery of any payment for the
Interests and the termination of the Advisory Agreement and this Agreement, with
respect to any matter arising while the Advisory Agreement or this Agreement was
in effect. Furthermore, all representations, warranties and covenants hereunder
shall inure to the benefit of each of the parties to this Agreement and to their
respective successors and permitted assigns.

10. Indemnification.

(a) In any action in which the Selling Agent, the Trust, the Trading Vehicle,
Wilmington Trust Company, a Delaware corporation, in its capacity as trustee of
the Trust (in such capacity, the “Trustee”) or the Managing Owner, or their
respective controlling persons, shareholders, partners, members, managers,
directors, officers and/or employees of any of the foregoing are parties
(individually and collectively, the “Sponsor Indemnified Parties”), the Advisor
agrees to indemnify and hold harmless the Sponsor Indemnified Parties against
any loss,

 

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claim, damage, charge, liability (including without limitation any liability
arising under the 1933 Act or the CE Act) or expense (including without
limitation, reasonable attorneys’ and accountants’ fees) (“Losses”) to which the
Sponsor Indemnified Parties may become subject, to the extent that such Losses
arise directly out or result directly from (i) any misrepresentation or alleged
misrepresentation or material breach or alleged material breach of any warranty,
covenant or agreement of the Advisor contained in this Agreement; (ii) a breach
of the disclosure requirements under the CE Act that relates to the Advisor’s
past performance history; or (iii) any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement or the
Prospectus or the omission or alleged omission to state in the Registration
Statement or the Prospectus a material fact required to be stated therein or
necessary to make the statements therein (with respect to the Prospectus, in
light of the circumstances in which they are made) not misleading, in each case
under this subclause (iii) to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in material conformity with information furnished by
the Advisor or its representatives to the Trust, the Managing Owner or their
respective representatives for inclusion in the Registration Statement or
Prospectus including without limitation any information relating to the Advisor
or its affiliates, controlling persons, shareholders, partners, directors,
officers and employees, as well as to the Advisor’s Trading Approach and past
performance history.

(b) In any action in which the Advisor, or its controlling persons, or any of
their respective shareholders, partners, directors, officers and/or employees
(individually and collectively, the “Advisor Indemnified Parties”) are parties,
the Managing Owner agrees (A) to indemnify and hold harmless the Advisor
Indemnified Parties against any Losses, to the extent that such Losses arise
directly out of or result directly from (i) any misrepresentation or alleged

 

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misrepresentation or material breach or alleged material breach of any warranty,
covenant or agreement of the Trust or the Managing Owner regarding the Managing
Owner contained in this Agreement, or (ii) any untrue statement or alleged
untrue statement of any material fact regarding the Managing Owner contained in
the Registration Statement or the Prospectus or the omission or alleged omission
to state in the Registration Statement or the Prospectus a material fact
regarding the Managing Owner required to be stated therein or necessary to make
the statements therein (with respect to the Prospectus, in light of the
circumstances in which they are made) not misleading.

(c) None of the indemnifications contained in this Section 10 shall be
applicable with respect to default judgments or confessions of judgment, or to
settlements entered into by an indemnified party claiming indemnification
without the prior written consent of the indemnifying party.

(d) Promptly after receipt by an indemnified party under this Section 10 of
notice of any claim or dispute or commencement of any action or litigation, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party under this Section 10, notify the indemnifying party of the
commencement thereof; but the omission to notify the indemnifying party will not
relieve it from any liability which it may have to any indemnified party
otherwise than under this Section 10 except to the extent, if any, that such
failure or delay prejudiced the indemnifying party in defending against the
claim. In case any such claim, dispute, action or litigation is brought or
asserted against any indemnified party, and it timely notifies the indemnifying
party of the commencement thereof, the indemnifying party will be entitled to
participate in the defense therein, and to the extent that it may wish, to
assume such defense thereof, with counsel specifically approved in writing by
such indemnified party,

 

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such approval not to be unreasonably withheld, following notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, in which event, the indemnifying party will not be liable to
such indemnified party under this Section 10 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof, but shall continue to be liable to the indemnified party in all other
respects as heretofore set forth in this Section 10. Notwithstanding any other
provisions of this Section 10, if, in any claim, dispute, action or litigation
as to which indemnity is or may be available, any indemnified party reasonably
determines that its interests are or may be, in whole or in part, adverse to the
interests of the indemnifying party, the indemnified party may retain its own
counsel in connection with such claim, dispute, action or litigation and shall
continue to be indemnified by the indemnifying party for any legal or any other
expenses reasonably incurred in connection with investigating or defending such
claim, dispute, action or litigation.

(e) Expenses incurred by an indemnified party in defending a threatened or
asserted claim or a threatened or pending action shall be paid by the
indemnifying party in advance of final disposition or settlement of such matter,
if and to the extent that the person on whose behalf such expenses are paid
shall agree in writing to reimburse the indemnifying party in the event
indemnification is not permitted under this Section 10 upon final disposition or
settlement.

(f) The parties hereto acknowledge and agree on their own behalf that the
indemnities provided in this Agreement shall be inapplicable in the event of any
loss, claim, damage, charge or liability arising out of or based upon, but
limited to the extent caused by, any misrepresentation or breach of any
warranty, covenant or agreement of any indemnified party to any indemnifying
party contained in this Agreement.

 

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11. Limits on Claims. The Advisor agrees that it will not take any of the
following actions against the Trust: (i) seek a decree or order by a court
having jurisdiction in the premises (A) for relief in respect of the Trust in an
involuntary case or proceeding under the U.S. Bankruptcy Code or any other
federal or state bankruptcy, insolvency, reorganization, rehabilitation,
liquidation or similar law or (B) adjudging the Trust a bankrupt or insolvent or
seeking reorganization, rehabilitation, liquidation, arrangement, adjustment or
composition of or in respect of the Trust under the U.S. Bankruptcy Code or any
other applicable federal or state law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator (or other similar official) of the
Trust or of any substantial part of any of its properties, or ordering the
winding up or liquidation of any of its affairs, (ii) seek a petition for
relief, reorganization or to take advantage of any law referred to in the
preceding clause or (iii) file an involuntary petition for bankruptcy
(collectively, “Bankruptcy or Insolvency Action”). In addition, the Advisor
agrees that for any obligations due and owing to it by the Trading Vehicle, the
Advisor will look solely and exclusively to the assets of the Trading Vehicle to
satisfy its claims and will not seek to attach or otherwise assert a claim
against the assets of any other Series or the other assets of the Trust, whether
there is a Bankruptcy or Insolvency Action taken. The parties agree that this
provision will survive the termination of this Agreement, whether terminated in
a Bankruptcy or Insolvency Action or otherwise.

12. Notices. Any notices under this Agreement required to be given shall be
effective only if given or confirmed in writing, shall be deemed given by the
party providing notice when received by the party to whom notice is being given
and shall be sent certified mail, postage prepaid, or hand delivered, to the
following address, or to such other address as a party may specify by written
notice to each of the other parties hereto:

 

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If to the Selling Agent:

Kenmar Securities, Inc.

51 Weaver Street

Building One South, 2nd Floor

Greenwich, Connecticut 06831

Attention: General Counsel

If to the Managing Owner, the Trading Vehicle or the Trust:

Preferred Investment Solutions Corp.

51 Weaver Street

Building One South, 2nd Floor

Greenwich, Connecticut 06831

Attention: General Counsel

Facsimile: (203) 861-1095

with a copy to:

Michael J. Schmidtberger, Esq.

Sidley Austin Brown & Wood LLP

787 Seventh Avenue

New York, New York 10019

Facsimile: (212) 839-5599

If to the Advisor:

Bridgewater Associates, Inc.

1 Glendinning Place

Westport, Connecticut 06880

Attention: Peter R. La Tronica

Facsimile: (203) 291-7300

With a copy to:

Bridgewater Associates, Inc.

1 Glendinning Place

Westport, Connecticut 06880

Attention: Legal

Facsimile: (203) 291-7300

 

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13. Governing Law. This Agreement shall be deemed to be made under the laws of
the State of New York applicable to contracts made and to be performed in that
State and shall be governed by and construed in accordance with the laws of that
State, without regard to the conflict of laws principles.

14. Arbitration, Remedies. Each party hereto agrees that any dispute relating to
the subject matter of this Agreement shall be settled and determined by
arbitration in the City of New York pursuant to the rules of NFA or, if NFA
should refuse to accept the matter, the American Arbitration Association. The
parties also agree that the award of the arbitrators shall be final and may be
enforced in the courts of New York and in any other courts having jurisdiction
over the parties.

15. Assignment. This Agreement may not be assigned by any party without the
express prior written consent of each of the other parties hereto.

16. Amendment or Modification or Waiver. This Agreement may not be amended or
modified except by the written consent of each of the parties hereto.

17. Successors. Except as set forth in Section 10 of this Agreement, this
Agreement is made solely for the benefit of and shall be binding upon the
Trading Vehicle, the Trust, the Managing Owner, the Selling Agent, the Advisor
and the respective successors and permitted assigns of each of them, and no
other person shall have any right or obligation under this Agreement. The terms
“successors” and “assigns” shall not include any purchasers, as such, of
Interests.

 

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18. Survival. The provisions of this Agreement shall survive the termination of
this Agreement with respect to any matter arising while this Agreement was in
effect.

19. No Waiver. No failure or delay on the part of any party hereto in exercising
any right, power or remedy hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right, power or remedy preclude
any other or further exercise thereof or the exercise of any other right, power
or remedy. Any waiver granted hereunder must be in writing and shall be valid
only in the specific instance in which given.

20. No Liability of Limited Owners. This Agreement has been made and executed by
and on behalf of the Trading Vehicle, the Trust and the Managing Owner, and the
obligations of the Trading Vehicle and/or the Managing Owner set forth in this
Agreement are not binding upon any of the Limited Owners, Series H, Series J or
any other Series, individually, but rather, are binding only upon the assets and
property of the Trading Vehicle and, to the extent provided herein, upon the
assets and property of the Managing Owner.

21. Headings. Headings to the Sections in this Agreement are for the convenience
of the parties only and are not intended to be or to affect the meaning or
interpretation of this Agreement.

22. Complete Agreement. Except as otherwise provided herein, this Agreement and
the Advisory Agreement constitute the entire agreement among the parties with
respect to the matters referred to herein, and no other agreement, verbal or
otherwise, shall be binding upon the parties hereto.

 

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23. Counterparts. This Agreement may be executed in one or more counterparts,
all of which, when taken together, shall be deemed to constitute one original
instrument.

 

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IN WITNESS WHEREOF, this Agreement has been executed as of the day and year
first above written.

 

WMT III SERIES H/J TRADING VEHICLE LLC By:   WORLD MONITOR TRUST III- SERIES H
Its:   Member   By:   PREFERRED INVESTMENT SOLUTIONS CORP., its sole Managing
Owner   By:  

/s/ Esther E. Goodman

  Name:   Esther E. Goodman   Title:  

Chief Operating Officer and

Senior Executive Vice President

By:   WORLD MONITOR TRUST III- SERIES J Its:   Member   By:  
PREFERRED INVESTMENT SOLUTIONS CORP., its sole Managing Owner   By:  

/s/ Esther E. Goodman

  Name:   Esther E. Goodman   Title:  

Chief Operating Officer and

Senior Executive Vice President

KENMAR SECURITIES, INC.   By:  

/s/ Esther E. Goodman

  Name:   Esther E. Goodman   Title:  

Chief Operating Officer and

Senior Executive Vice President

PREFERRED INVESTMENT SOLUTIONS CORP.   By:  

/s/ Esther E. Goodman

  Name:   Esther E. Goodman   Title:  

Chief Operating Officer and

Senior Executive Vice President

 

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WORLD MONITOR TRUST III – SERIES H By:    

PREFERRED INVESTMENT SOLUTIONS

CORP., as sole Managing Owner

By:    

/s/ Esther E. Goodman

Name:     Esther E. Goodman Title:    

Chief Operating Officer and

Senior Executive Vice President

WORLD MONITOR TRUST III – SERIES J By:     PREFERRED INVESTMENT SOLUTIONS CORP.,
as sole Managing Owner By:    

/s/ Esther E. Goodman

Name:     Esther E. Goodman Title:    

Chief Operating Officer and

Senior Executive Vice President

BRIDGEWATER ASSOCIATES, INC. By:    

/s/ Peter R. La Tronica

Name:     Peter R. La Tronica Title:     Vice President

 

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Exhibit A

Consent

The undersigned Advisor has reviewed the Prospectus dated                     ,
2005 of World Monitor Trust III with respect to the information contained
therein relating to the undersigned Advisor and, in accordance with the
Representation Agreement among us dated as of the          day of
                    , 2005 (“Representation Agreement”), hereby consents to all
provisions to which it is required to consent pursuant to the Representation
Agreement and also consents to the distribution of such Prospectus.

 

BRIDGEWATER ASSOCIATES, INC. By:  

 

Name:   Peter R. La Tronica Title:   Vice President

 

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EXHIBIT D

[ATTACH LATEST DISCLOSURE DOCUMENT]