EXHIBIT 10.10

WORLD MONITOR TRUST III

TRADING ADVISORY AGREEMENT

PASKEWITZ ASSET MANAGEMENT, LLC

This TRADING ADVISORY AGREEMENT (“Agreement”), made as of the 24th day of March,
2010, by and among WORLD MONITOR TRUST III – Series J (hereafter, “Series J”), a
separate series of World Monitor Trust III, a Delaware statutory trust (the
“Trust”), KENMAR PREFERRED INVESTMENTS CORP., a Delaware corporation (the
“Managing Owner”), and Paskewitz Asset Management, LLC , a limited liability
company organized under the laws of Delaware (the “Trading Advisor”).

W I T N E S S E T H :

WHEREAS, the Trust has been organized to trade, buy, sell or otherwise acquire,
hold or dispose of foreign exchange financial instruments, currencies, futures
and any rights pertaining thereto and any options thereon and to engage in all
activities incident thereto (the foregoing forms of investment being
collectively referred to herein as “Financial Instruments”);

WHEREAS, the Managing Owner is the managing owner of the Trust; and

WHEREAS, the Trust is making a private offering pursuant to Regulation D under
the Securities Act of 1933, as amended (the “1933 Act”) of beneficial interests
(the “Offering”) in the Trust (the “Interests”) evidenced by different series of
Interests (each, a “Series”) and in connection therewith, the Trust has prepared
a Confidential Private Placement Memorandum and Disclosure Document (the
“Memorandum”) for the offering of Series J Interests; and

WHEREAS, the Managing Owner is authorized to utilize the services of one or more
professional commodity trading advisors in connection with the Financial
Instruments trading activities of Series J; and

WHEREAS, the Trading Advisor is registered as a commodity trading advisor under
the United States 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, Series J and the Managing Owner desire the Trading Advisor to enter
into this Agreement and, upon the terms and conditions set forth herein, to act
as a trading advisor in Series J and to make Financial Instrument trading
decisions for Series J with respect to Series J’s assets allocated to the
Trading Advisor for management using the Trading Advisor’s Contrarian Stock
Index Program (the “Program”) in an account at Newedge USA, LLC (the “Account”),
and the Trading Advisor desires so to act; and

WHEREAS, the Trading Advisor is engaged in the business of making trading
decisions on behalf of investors in the purchase and sale of certain Financial
Instruments.

 

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NOW, THEREFORE, the parties hereto do hereby agree as follows:

1. Undertakings of the Trading Advisor

(a) Furnish Information for the Memorandum. The Trading Advisor agrees:

(i) to make all disclosures necessary or appropriate regarding the Trading
Advisor and its affiliates, their trading performance and trading systems,
methods, models, strategies, and formulae (subject to the need to preserve the
secrecy of proprietary information concerning such trading systems, methods,
models, strategies, and formulae), and other kinds or information (A) to be
included in the Memorandum or (B) to comply with any applicable law, rule or
regulation of any regulatory authority having jurisdiction, and

(ii) to otherwise cooperate with the Managing Owner and its designees in
preparing the Memorandum and any documents filed with the authorities of any
jurisdiction or regulatory authority and in complying with any law, rule, or
regulation, including but not limited to cooperating with and furnishing actual
performance data and other information to the Managing Owner and its designees
in connection with any due diligence or other investigation which may be
conducted at any time and from time to time.

(b) Update Information in the Memorandum. If the Trading Advisor shall become
aware of any materially untrue or misleading statement of a fact or any omission
of a material fact contained in the Memorandum regarding the Trading Advisor or
its affiliates or their trading performance or trading systems, methods, models,
strategies, or formulae or of the occurrence of any event or change in
circumstances which shall have resulted or could result in there being any such
materially untrue or misleading statement of a material fact or any such
omission of a material fact, the Trading Advisor immediately shall inform the
Managing Owner and cooperate with the Managing Owner and its designees in the
preparation of any necessary amendments or supplements to the Memorandum.

(c) Performance Reporting. During the term of this Agreement, the Trading
Advisor shall provide the Managing Owner on a monthly basis within thirty
(30) days after the end of each month with a composite table or tables (in form
and substance mutually acceptable to the parties) reflecting the estimated
actual performance in the aggregate, on a monthly basis, of accounts directed by
the Trading Advisor and/or its affiliates that follow the Program. As used in
this Agreement, the term “direct” or “directed” shall have the meaning given to
such term in Section 4.10(f) of the Commodity Pool Operators and Commodity
Trading Advisors Regulations promulgated under the CE Act by the Commodity
Futures Trading Commission (the “Commodity Regulations”).

(d) Access to Books and Records. Upon notice to the Trading Advisor, Series J,
the Managing Owner and their affiliates shall have the right to have access to
and to inspect and copy such books and records as may enable them to verify the
accuracy and completeness of or to supplement as necessary the data furnished by
the Trading Advisor pursuant to Section 1(c) of this Agreement or to verify
compliance with the terms of this Agreement (subject to the need to preserve the
secrecy of proprietary information concerning such trading systems, methods,
models, strategies, and formulae and of customer names and other identifying
information).

(e) Marketing of the Interests. Neither the Trading Advisor nor its employees,
affiliates, or agents, the stockholders, directors, officers, employees,
principals, affiliates, or agents of such affiliates, or their respective
successors or assigns shall use, publish, circulate, or distribute the
Memorandum (including any amendment or supplement thereto) or any related
solicitation material nor engage in any marketing, sales, or promotional
activities in connection with the offering of units of beneficial interest.

 

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(f) Management of Other Accounts. During the term of this Agreement, the Trading
Advisor and its officers, members, employees, and affiliates shall be free to
advise other investors as to the purchase and sale of Financial Instruments, to
manage and trade other investors’ Financial Instrument accounts, and to trade
for and on behalf of their own proprietary Financial Instrument accounts.
However, under no circumstances shall the Trading Advisor or any of its
officers, members, employees, or affiliates favor any account directed by any of
them (regardless of the date on which they began or shall begin to direct such
account) over Series J’s Account in any way or manner, that is inconsistent with
the trade allocation and execution policies followed by the Trading Advisor for
accounts that are traded pursuant to the Program.

(g) Availability of Reports. At the request of Series J or the Managing Owner,
the Trading Advisor and its officers, members, employees, and affiliates
promptly shall make available to Series J and the Managing Owner copies of the
normal daily, monthly, quarterly, and annual, as the case may be, written
reports reflecting the performance of accounts advised, managed, owned, or
controlled by the Trading Advisor and its officers, members, employees, and
affiliates (subject to the need to preserve the secrecy of customer names and
other identifying information). At the request of Series J or the Managing
Owner, the Trading Advisor promptly shall deliver to Series J and the Managing
Owner a satisfactory written explanation, in the judgment of Series J, of
differences, if any, in the performance of Series J’s Account.

(h) Portfolio Managers. The Trading Advisor’s managers for Series J shall be
Bradford Paskewitz and Diana King (the “Portfolio Managers”) and the Portfolio
Managers shall be responsible for all investment and trading activity of Series
J hereunder on behalf of the Trading Advisor. The Trading Advisor will notify
the Managing Owner promptly if any Portfolio Manager either (i) dies, (ii) is
adjudicated incompetent or becomes disabled for 90 consecutive days,
(iii) otherwise ceases to be active in the affairs of Series J, or (iv) ceases
(or threatens to cease) being employed by the Trading Advisor.

(i) Non-Solicitation. The Trading Advisor agrees that neither it nor its
affiliates will take any steps to solicit Series J’s investors or to cause any
investor in Series J to withdraw from or reduce its investment in Series J;
provided, however, that this Section 2(i) shall not apply to any investor in
Series J with whom the Trading Advisor had a relationship prior to the date of
this Agreement.

2. Duties of the Trading Advisor

(a) Allocated Assets and Trading Policies. Upon the funding of the Account by
Series J for the Trading Advisor, the Trading Advisor shall act as a trading
advisor for the Account. The Trading Advisor shall have authority and
responsibility for directing the investment and reinvestment of the Trading
Advisor’s Allocated Assets (as defined below) in Financial Instruments pursuant
to and in accordance with the Trading Advisor’s trading systems, methods,
models, strategies, and formulae as set forth in the Memorandum, and as refined
and modified from time to time in the future in accordance herewith, for the
period and on the terms and conditions set forth herein and in accordance with
Series J’s trading policies as from time to time in effect, as described in the
Memorandum. As used in this Agreement, the Trading Advisor’s “Allocated Assets”
shall mean the nominal assets committed by Series J in writing to the Account
with respect to the trading program of the Trading Advisor described in the
Program Disclosure (as defined in Section 2(c)). The initial Allocated Assets
shall be set forth in the trading authorization described in Section 2(d).
Allocated Assets may be increased at any time by the Managing Owner with the
consent of the Trading Advisor and may be decreased at any time (including to
zero) in the sole discretion of the Managing Owner or Series J. The Managing
Owner shall notify the Trading Advisor in writing of the Allocated Assets for a
particular month.

 

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In the event the Trading Advisor requests 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 of the Program in
connection with trading for Series J (including, without limitation, the
deletion or addition of an agreed upon trading program, system, method or
strategy to the then agreed upon trading approach utilized by the Program),
either in whole or in part, the Trading Advisor may not do so unless both Series
J and the Trading Advisor consent thereto in writing.

The Trading Advisor shall provide Series J prior written notice of any proposed
material change in its Program, and agrees not to make any material change in
the Program (as applied to Series J) over the objection of Series J, it being
understood that the Trading Advisor shall be free to institute non-material
changes in its Program (as applied to Series J) without prior written
notification. Without limiting the generality of the foregoing, refinements to
the Program, and the deletion (but not the addition) of Financial Instruments
(other than the addition of Financial Instruments then being traded (i) on
organized domestic exchanges, (ii) on foreign exchanges recognized by the
Commodity Futures Trading Commission (“CFTC”) as providing customer protections
comparable to those provided on domestic exchanges, or (iii) in the interbank
foreign currency market) to or from the Program, and variations in the leverage
principles and policies utilized by the Trading Advisor, shall not be deemed a
material change in the Program, and prior approval of Series J shall not be
required therefore.

(b) Brokerage Confirmation and Reports. Series J will instruct its brokers and
counterparties to furnish the Trading Advisor with copies of all trade
confirmations, daily equity runs, and monthly trading statements relating to the
Allocated Assets. The Trading Advisor will maintain records and will monitor all
open positions relating thereto; provided, however, that the Trading Advisor
shall not be responsible for any errors by Series J’s brokers or counterparties.
The Trading Advisor shall, at Series J’s request, make a good faith effort to
provide Series J with copies of all trade confirmations, daily equity runs,
monthly trading reports or other reports sent to the Trading Advisor by Series
J’s commodity broker regarding Series J, and in the Trading Advisor’s possession
or control, as Series J deems appropriate if Series J cannot obtain such copies
on its own behalf. Upon request, Series J will provide the Trading Advisor with
accurate information with respect to the Allocated Assets.

(c) Errors. The Trading Advisor shall have the obligation to notify immediately
the appropriate broker and/or floor broker and/or dealer and the Managing Owner
of any material error committed by the Trading Advisor or its employees,
affiliates, agents, or their respective successors or assigns. Furthermore, the
Trading Advisor shall have the obligation to identify, whether in brokerage
statements, confirmations, or otherwise, and notify immediately after receipt of
such document the broker and/or floor broker and/or dealer and the Managing
Owner and Series J of any order or trade which the Trading Advisor believes was
not executed in accordance with the Trading Advisor’s instructions to any broker
or floor broker or dealer and shall utilize its reasonable efforts to cause the
error or discrepancy to be corrected.

(d) Delivery of Program Disclosure The Trading Advisor has delivered to the
Managing Owner and Series J a description of the Program, which is attached
hereto as Exhibit A describing the trading strategy to be used with respect to
the Trading Advisor’s management of the Account (the “Program Disclosure”) and
shall, during the term of this Agreement, deliver to the Managing Owner copies
of any amendments thereto.

 

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(e) Trading Authorization.

(i) Prior to Series J’s acceptance of trading advice from the Trading Advisor in
accordance with this Agreement, Series J shall deliver to the Trading Advisor a
trading authorization appointing the Trading Advisor Series J’s agent and
attorney-in-fact for such purpose and setting forth the initial Allocated
Assets.

(ii) The Managing Owner may terminate the Trading Advisor’s power-of-attorney
hereunder at any time upon written notice to the Advisor.

(f) Trading Records. The Trading Advisor shall send to the Managing Owner or an
affiliate (including the Administrator) copies of all trades made by the Trading
Advisor on behalf of the Account in a form agreeable to the Managing Owner by
the end of the Trading Advisor’s trading day on the day such trades are made.

(g) Notices. The Trading Advisor will notify the Managing Owner orally (to be
confirmed in writing) promptly following the occurrence of any of the following
events:

(i) The Trading Advisor modifies or revises its performance numbers so that
there is a material difference between the previous numbers reported to the
Managing Owner and the revised numbers;

(ii) The Trading Advisor merges, consolidates with, or sells or otherwise
transfers its advisory business, all or a substantial portion of its assets, all
or any portion of its Program or its goodwill;

(iii) The Trading Advisor becomes bankrupt or insolvent;

(iv) The Trading Advisor is unable to use any material part or aspect of its
Program; or

(v) The Trading Advisor’s registration with the SEC, CFTC or other regulatory
organization or membership in a self-regulatory organization, if any, as
applicable, is revoked, suspended, terminated or not renewed, or limited,
conditioned, restricted or qualified in any respect.

3. Trading Advisor Independent

For all purposes of this Agreement, the Trading Advisor shall be deemed to be an
independent contractor and, unless otherwise expressly provided herein or with
the prior written authorization of the Managing Owner, the Trading Advisor shall
have no authority to act for or represent the Managing Owner, its affiliates,
officers, directors or employees in any way and shall not otherwise be deemed to
be an agent of the Managing Owner. Except as shall be specifically provided
otherwise in this Agreement, nothing contained herein shall create or constitute
the Trading Advisor and any other trading advisor or advisors for Series J or
the Managing Owner as members of any partnership, joint venture, association,
syndicate, unincorporated business, or other separate entity, nor shall be
deemed to confer on any of them any express, implied, or apparent authority to
incur any obligation or liability on behalf of any other.

4. Fees

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

(a) The Trading Advisor shall be paid a Management Fee equal to 1/12% of 2.0%
(0.1666667%) of Allocated Assets determined as of the close of business on the
last day of each month

 

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(an annual rate of 2.0%). For purposes of determining the Management Fee, any
distributions, redemptions, or reallocation of the Allocated Assets made as of
the last day of a month shall be added back to the Allocated Assets and there
shall be no reduction for (i) any accrued but unpaid Incentive Fees due the
Trading Advisor under paragraph (b) below for the period in which such fees are
being computed, or (ii) any accrued but unpaid extraordinary expenses (as
defined in the Fifth Amended and Restated Declaration of Trust and Trust
Agreement, as the same may be amended from time to time (the “Trust Agreement”))
unless such extraordinary expenses are in connection with the Allocated Asset
managed by the Trading Advisor. The Management Fee determined for any month in
which the Trading Advisor manages the 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 Allocated Assets were under the Trading
Advisor’s management as compared to the total number of days in such month, with
such proration to include appropriate adjustments for any reallocation of
Allocated Assets.

(b) The Trading Advisor shall be paid an Incentive Fee equal to twenty percent
(20%) of “New High Net Trading Profits” (as hereinafter defined) generated on
the Allocated Assets 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 Trading Advisor’s
Incentive Fee only) shall be computed as of the Incentive Measurement Date and
shall include such profits (as outlined below) since the immediately preceding
Incentive Measurement Date (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 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 shall be calculated
after the determination of (reduction for) the fees charged to Series J for
brokerage commissions, Series J’s transaction fees, costs attributable to the
Allocated Assets or its trading activities (including without limitation
exchange fees and NFA fees), the Trading Advisor’s Management Fee, the operating
expenses allocated by Series J to the Allocated Assets, and any extraordinary
expenses (e.g., litigation, costs or damages) paid during an Incentive
Measurement Period which are specifically related to the Trading Advisor, but
before deduction of any Incentive Fees payable during the Incentive Measurement
Period. New High Net Trading Profits shall not include interest earned or
credited on the Allocated Assets.

New High Net Trading Profits shall be generated only to the extent that the
Trading Advisor’s cumulative New High Net Trading Profits exceed the highest
level of cumulative New High Net Trading Profits achieved by the Trading 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 shall be treated as if
it were an Incentive Measurement Date. New High Net Trading Profits for an
Incentive Measurement Period shall exclude capital contributions to Series J in
an Incentive Measurement Period, distributions or redemptions paid or payable by
Series J 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 Trading Advisor
(through redemptions, distributions or allocations caused by Series J), any loss
carry-forward attributable to the Trading Advisor shall be reduced in the same
proportion that the value of the assets allocated away from the Trading Advisor
comprises the value of the Allocated Assets prior to such allocation away from
the Trading 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 twenty (20) business days following the end of the period for
which they are payable. If an Incentive Fee shall have been paid by the Trust to
the Trading Advisor in respect of any calendar quarter and the Trading Advisor
shall incur subsequent losses on the Allocated Assets the Trading Advisor shall
nevertheless be entitled to retain amounts previously paid to it in respect of
New High Net Trading Profits.

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

(e) Third Party Payments. Neither the Trading Advisor, nor any of its officers,
directors, employees or stockholders, shall receive any commissions,
compensation, remuneration or payments whatsoever from any broker with which
Series J carries an account for transactions executed in the 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
Program on behalf of Series J, which payment shall not violate the preceding
sentence.

5. Brokers; Floor Broker; Dealers; Counterparties

(a) Brokers, Dealers and Counterparties. The Trading Advisor shall place orders
for all transactions for the Account through such broker, dealer, counterparty
or brokers, dealers and counterparties as determined by the Trading Advisor and
subject to approval by the Managing Owner, provided that such orders shall be
settled at a broker, dealer and/or counterparty as the Managing Owner shall
direct from time to time in its sole discretion.

(b) Floor Brokers. Notwithstanding Section 5(a) of this Agreement, the Trading
Advisor may place orders for Financial Instrument transactions for the Account
through exchange floor brokers selected by the Trading Advisor, provided that in
each such case the Managing Owner shall have given its prior written approval
of: (i) the use by the Trading Advisor of a particular floor broker to effect
specific Financial Instrument transactions for Series J; and (ii) the brokerage
and floor commissions and fees and other transaction costs to be charged by such
floor broker to effect such transactions.

6. Term and Termination

(a) Term. This Agreement shall commence on the date hereof and, unless sooner
terminated pursuant to paragraphs (b), (c) or (d) of this Section 6, shall
continue in effect until the close of business on the last day of the month
ending twelve (12) full months following the date hereof (the “Initial Term”).
Thereafter, unless this Agreement is terminated pursuant to paragraphs (b),
(c) or (d) of this Section 6, this Agreement shall be renewed automatically on
the same terms and conditions set forth herein for successive additional
twelve-month terms, each of which shall commence on the first day of the month
subsequent to the conclusion of the preceding term. Subject to Section 6(d)(iv)
hereof, the automatic renewal(s) set forth in the preceding sentence hereof
shall not be affected by (i) any allocation of the Allocated Assets away from
the Trading Advisor pursuant to this Agreement, or (ii) the retention of other
trading advisors following a reallocation, or otherwise.

(b) Automatic Termination. This Agreement shall terminate automatically in the
event that Series J is dissolved. In addition, this Agreement shall terminate
automatically in the event that the Allocated Assets decline as of the end of
any business day by at least 40% from the Allocated Assets (i) as of the date
hereof, or (ii) as of the first day of any calendar year, as adjusted in each
instance on an ongoing basis by (A) any decline(s) in the Allocated Assets
caused by distributions, redemptions, reallocations, and withdrawals, and
(B) additions to the Allocated Assets caused by additional allocations.

 

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(c) Optional Termination Right of Series J. This Agreement may be terminated at
any time at the election of Series J in its sole discretion upon at least
fifteen (15) days’ prior written notice to the Trading Advisor. This Agreement
may also be terminated upon prior written notice, appropriate under the
circumstances, to the Trading Advisor in the event that: (i) Series J determines
in good faith that the Trading Advisor is unable to use its agreed upon Program
to any material extent, as such Program may be refined or modified in the future
in accordance with the terms of this Agreement for the benefit of Series J;
(ii) the Trading Advisor’s registration as a commodity trading advisor under the
CE Act or membership as a commodity trading advisor with the NFA is revoked,
suspended, terminated or not renewed; (iii) Series J determines in good faith
that the Trading Advisor has failed to conform, to (A) any of Series J’s trading
policies and limitations, or (B) the Program; (iv) there is an unauthorized
assignment of this Agreement by the Trading Advisor; (v) the Trading Advisor
dissolves, merges or consolidates with another entity, or sells a substantial
portion of its assets, or a change in any material respect in any portion of the
Program utilized by the Trading Advisor for Series J, without the consent of
Series J; (vi) the death, incapacity or disability of Steve Evans, (ix) the
Trading Advisor becomes bankrupt or insolvent, or (x) there is a material breach
of this Agreement by the Trading Advisor and after giving written notice to the
Trading Advisor which identifies such breach and such material breach has not
been cured within 10 days following receipt of such notice by the Trading
Advisor or (xi) for any other reason, Series J determines in good faith that
such termination is essential for the protection of Series J, including without
limitation a good faith determination by Series J that the Trading Advisor has
breached a material obligation to Series J under this Agreement relating to the
trading of the Allocated Assets.

(d) Optional Termination Right of Trading Advisor. This Agreement may be
terminated at any time after the expiration of the Initial Term at the election
of the Trading Advisor in its sole discretion upon at least sixty (60) days’
prior written notice to the Managing Owner. This Agreement may be also
terminated upon prior written notice, appropriate under the circumstances, to
Series J in the event: (i) of the receipt by the Trading Advisor of an opinion
of independent counsel reasonably satisfactory to the Trading Advisor and Series
J that by reason of the Trading Advisor’s activities with respect to Series J 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 Series J imposes additional trading limitation(s) which the
Trading Advisor does not agree to follow in its reasonable discretion in its
management of the Allocated Assets; (iv) Series J elects to have the Trading
Advisor use a different trading approach in the Trading Advisor’s management of
the Allocated Assets from that which the Trading Advisor is then using to manage
such assets and the Trading Advisor objects (in its reasonable discretion) to
using such different trading approach; (v) there is an unauthorized assignment
of this Agreement by Series J; (vi) there is a material breach of this Agreement
by Series J and after giving written notice to Series J which identifies such
breach and such material breach has not been cured within 10 days following
receipt of such notice by Series J; or (vii) the Trading Advisor provides Series
J with written notice, at least ninety (90) days prior to the end of the then
current term, of the Trading Advisor’s desire and intention to terminate this
Agreement as of the end of the then current term.

(e) Termination and Open Positions. If terminated for any reason by either
party, the Trading Advisor will proceed to liquidate all positions on the
following business day or days if there are intervening holidays unless notified
in writing by Series J that no liquidation of positions is required.

(f) Foreign Currency. The Trading Advisor shall be solely responsible for
converting any foreign currency balances.

 

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(g) Indemnities and Fee Payment Obligations Survive Termination. The fee payment
obligations set forth in Section 4 (with respect to periods on or before the
date of termination) and the indemnities set forth in Section 9 of this
Agreement shall survive any termination hereof.

7. Position Limits

(a) Compliance with Limits. The Trading Advisor shall not enter into or own,
hold, or control any position in any Financial Instrument or control any other
Financial Instrument account (either alone or aggregated with the positions of
any other person if such aggregation shall be required by any law, rule,
regulation or any regulatory or self-regulatory authority having jurisdiction)
or render trading advice to any other person or otherwise engage in activity
which would cause Series J or the Trading Advisor to be in violation of any
applicable position limits (“Limits”).

(b) Liquidation of Positions to Comply with Limits. If applicable Limits shall
be exceeded or are about to be exceeded in any Financial Instrument by the
Trading Advisor (either alone or aggregated with the positions of any other
person if such aggregation shall be required by any law, rule, regulation or any
regulatory or self-regulatory authority having jurisdiction), the Trading
Advisor shall promptly take such action as may be necessary to comply with the
Limits with respect to the Account or any other accounts under its or their
management, to the extent practicable, on a fair and equitable basis.

8. Representations and Warranties

(a) Representations and Warranties of the Trading Advisor. The Trading Advisor
hereby represents and warrants to Series J and the Managing Owner as follows:

(i) The Trading Advisor is duly organized and validly existing under the laws of
the jurisdiction of its organization and is qualified to do business in each
jurisdiction in which the failure to so qualify could have a materially adverse
affect on the Trading Advisor’s ability to perform its obligations under this
Agreement.

(ii) The Trading Advisor has full power and authority and is permitted by
applicable law to enter into and carry out its obligations under this Agreement
and to own its properties (including, but not limited to, its Program) and
conduct its business as described in this Agreement and the Program Disclosure.

(iii) The performance of the obligations under this Agreement by the Trading
Advisor, its Affiliates and personnel will not conflict with, violate the terms
of, or constitute a default under any indenture, mortgage, deed of trust, loan
agreement, management or advisory agreement, or other agreement or instrument to
which the Trading Advisor or its employees or Affiliates is a party or by which
any such person is bound or to which any of the property (including but not
limited to the Program) or assets of any such person is subject, or any order,
rule, law, regulation, or other legal requirement applicable to any such person
or to the property or assets of any such person.

(iv) The Trading Advisor is currently registered as an investment adviser with
the SEC or one or more states, and such registration has not expired or been
revoked, suspended, terminated or not renewed, or been materially limited,
conditioned, restricted, or qualified in any respect. The Trading Advisor and
each Principal have all required governmental, regulatory, and self-regulatory
licenses, registrations and memberships necessary to carry out its obligations
under this Agreement and to act as described in this Agreement.

 

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(v) The Trading Advisor is currently registered as a commodity trading advisor
with the CFTC and is a member of the NFA in such capacity, and such registration
and membership has not expired or been revoked, suspended, terminated, not
renewed, or been materially limited, conditioned, restricted, or qualified in
any respect. The Trading Advisor and its Affiliates and administrative personnel
have all required governmental and regulatory registrations and memberships
necessary to carry out their respective obligations under this Agreement and to
act as described in this Agreement.

(vi) The information contained in the Program Disclosure attached hereto as
Exhibit A and the reports provided to the Managing Owner under this Agreement
are true, accurate, and complete in all material respects and do not contain any
misleading or untrue statement of a material fact or any omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances under which such statements
are made and the Program Disclosure contains all statements and information
required to be included under the CE Act.

(vii) All information provided to the Managing Owner by the Trading Advisor
specifically relating to the Trading Advisor and the Trading Advisor principals
and trading systems, methods and performance for inclusion in the Memorandum is
accurate and complete in all material respects at each time such information is
provided. With respect to the Trading Advisor, the Trading Advisor principals,
and its trading systems, methods and performance: (i) the Memorandum contains
all statements and information required to be included therein under the CE Act
and the rules and regulations thereunder, and (ii) the Memorandum does not
contain, and will not during the term of this Agreement contain, any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements contained therein, in the light of the circumstances under which
such statements were made, not misleading. Except as otherwise disclosed in the
Memorandum, the actual performance of each discretionary account directed by the
Trading Advisor or any principal of the Trading Advisor, on either a composite
or a stand-alone basis, as provided by the Trading Advisor to the Managing Owner
for inclusion in the Memorandum, is or will be in accordance with the then
current CFTC Rules. The information regarding the actual performance of such
accounts set forth in the Memorandum has been calculated and presented in
accordance with the descriptions therein and is complete and accurate in all
material respects.

(viii) To the best of its knowledge, there are no material actions, suits,
proceedings, or investigations pending or threatened against the Trading Advisor
or its principals or Affiliates, at law or in equity or before or by any
federal, state, municipal, or other governmental department, commission, board,
bureau, agency, or instrumentality, any self-regulatory organization, or any
exchange. None of the Trading Advisor or any Trading Advisor principal has
received any notice of an investigation by the NFA, CFTC or other administrative
agency or self-regulatory body (whether United States or foreign) regarding
noncompliance by the Trading Advisor or any of the Trading Advisor principals
with the CE Act or any other applicable law.

(ix) To the best of the Trading Advisor’s knowledge after due inquiry, the
Trading Advisor has complied, and will continue to comply, with all laws, rules,
and regulations having application to its business, properties and assets,
including but not limited to the CE A and the rules and regulations thereunder
to the extent applicable. Without limiting the generality of the foregoing, the
Trading Advisor has and will at all times (A), in selecting futures commission
merchants, brokers and dealers to effect portfolio transactions for Series J,
seek best execution, taking into consideration such factors as the ability of
the firm to effect the transactions, their facilities, reliability and financial
responsibility and the provision or payment of the costs of research products
and services which are of benefit to Series J, the Trading Advisor or related
funds and accounts, (B) maintain policies and procedures to ensure that the
allocation of opportunities among similarly situated clients is fair and
equitable and that any allocation of instruments among clients will be done
before, at or promptly after the transaction, and (C) maintain all required
written policies and procedures.

 

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The foregoing representations and warranties shall be continuing during the term
of this Agreement and if at any time any event shall occur which could make any
of the foregoing incomplete or inaccurate, the Trading Advisor shall promptly
notify the Managing Owner and Series J of the occurrence of such event.

(b) Representations and Warranties of Series J. Series J hereby represents and
warrants to the Managing Owner and the Trading Advisor as follows:

(i) Series J is duly organized and validly existing under the laws of its
jurisdiction of organization and is qualified to do business in each
jurisdiction in which the failure to so qualify would have a materially adverse
affect on Series J’s ability to perform its obligations under this Agreement.

(ii) Series J has full power and authority and is permitted by applicable law to
enter into and carry out its obligations under this Agreement and to own its
properties and conduct its or his business as described in this Agreement and
the Memorandum.

(iii) The performance of the obligations under this Agreement by Series J will
not conflict with, violate the terms of, or constitute a default under any
indenture, mortgage, deed of trust, loan agreement, management or advisory
agreement, or other agreement or instrument to which Series J is a party or by
which Series J is bound or to which any of the property or assets of Series J is
subject, or any order, rule, law, regulation, or other legal requirement
applicable to Series J or to the property or assets of Series J

(iv) Series J is and during the term of this Agreement will remain a “qualified
eligible person” as defined in CFTC Regulation 4.7 and an “eligible contract
participant” as defined in Section 1(a)(12) of the CE Act.

(v) Series J has all required governmental and regulatory registrations and
memberships necessary to carry out its obligations under this Agreement.

(vi) Series J has complied, and will continue to comply, with all laws, rules
and regulations having application to its business, properties and assets, and
has adopted anti-money laundering policies and procedures consistent with the
U.S. PATRIOT Act.

(vii) Except as set forth in the Memorandum, there are no actions, suits,
proceedings, or investigations pending or threatened against Series J, at law or
in equity or before or by any federal, state, municipal, or other governmental
department, commission, board, bureau, agency, or instrumentality, any
self-regulatory organization, or any exchange.

(viii) The information contained in the Memorandum, other than information
supplied by the Trading Advisor, is true, accurate, and complete in all material
respects and does not contain any misleading or untrue statement of a material
fact or any omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading.

The foregoing representations and warranties shall be continuing during the term
of this Agreement and if at any time any event shall occur which could make any
of the foregoing incomplete or inaccurate, Series J shall promptly notify the
Trading Advisor and the Managing Owner of the occurrence of such event.

 

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(c) Representations and Warranties of the Managing Owner. The Managing Owner
hereby represents and warrants to the Trading Advisor and Series J as follows:

(i) The Managing Owner duly organized and validly existing under the laws of its
jurisdiction of organization and is qualified to do business in each
jurisdiction in which the failure to so qualify would have a materially adverse
affect on Series J’s ability to perform its obligations under this Agreement.

(ii) The Managing Owner has full power and authority and is permitted by
applicable law to enter into and carry out its obligations under this Agreement
and to own its properties and conduct its business as described in this
Agreement and the Memorandum.

(iii) The performance of the obligations under this Agreement by the Managing
Owner and its affiliates and administrative personnel will not conflict with,
violate the terms of, or constitute a default under any indenture, mortgage,
deed of trust, loan agreement, management or advisory agreement, or other
agreement or instrument to which the Managing Owner is a party or by which it is
bound or to which any of the property or assets of the Managing Owner or its
affiliates and administrative personnel is subject, or any order, rule, law,
regulation, or other legal requirement applicable to any such person or to the
property or assets of such person.

(iv) The Managing Owner is registered as an investment adviser with the SEC and
as a commodity pool operator and commodity trading advisor with the CFTC.

(v) To the best of its knowledge there are no actions, suits, proceedings, or
investigations pending or threatened against the Managing Owner or its
principals or affiliates, at law or in equity or before or by any federal,
state, municipal, or other governmental department, commission, board, bureau,
agency, or instrumentality, any self-regulatory organization, or any exchange.

(vi) To the best of the Managing Owner’s knowledge, the Managing Owner has
complied, and will continue to comply, with all laws, rules, and regulations
having application to its business, properties and assets, including but not
limited to the CE Act and the rules and regulations thereunder to the extent
applicable.

(vii) The Managing Owner shall not engage any investment manager, trading
advisor or subadvisor other than the Trading Advisor to manage the assets of
Series J.

The foregoing representations and warranties shall be continuing during the term
of this Agreement and if at any time any event shall occur which could make any
of the foregoing incomplete or inaccurate, the Managing Owner shall promptly
notify the Trading Advisor and Series J of the occurrence of such event.

9. Indemnification and Limitation of Liability

(a) Limitation of Liability.

(i) The Trading Advisor, its affiliates and their respective directors,
officers, shareholders, employees, agents and controlling persons (“Trading
Advisor Indemnified Persons”) shall not be liable to Series J or the Managing
Owner for any acts or omissions arising out of or in connection with Series J,
any investment made or held by Series J, or this Agreement unless such action or
inaction constituted bad faith, willful misconduct or gross negligence.

 

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(ii) Series J, the Managing Owner, their affiliates and their respective
directors, officers, shareholders, members, employees, agents and controlling
persons (“Managing Owner Indemnified Persons”) shall not be liable to the
Trading Advisor for any acts or omissions arising out of or in connection with
this Agreement unless such action or inaction constituted bad faith, willful
misconduct or gross negligence.

(b) Indemnification by the Trading Advisor. The Trading Advisor shall indemnify,
hold harmless and defend the Managing Owner Indemnified Persons from and
against, any loss, liability, claim, demand, damage, cost and expense (including
reasonable attorneys’ and accountants’ fees and cost of investigation)
(collectively referred to herein as “Liabilities”) arising out of or based upon
(i) an act, omission, conduct or activity of the Trading Advisor under this
Agreement arising from a material breach of any representation, warranty,
covenant or material term of this Agreement by the Trading Advisor, (ii) any
acts, omissions or alleged acts or omissions to act due to, bad faith, willful
misconduct or gross negligence by the Trading Advisor, or (iii) a misleading or
untrue statement of a material fact provided by the Trading Advisor for
inclusion in the Memorandum provided to Series J or the Managing Owner or an
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading.

(c) Indemnification by Series J. Series J shall indemnify, hold harmless and
defend the Managing Owner, its Affiliates and the Trading Advisor Indemnified
Persons from and against, any Liabilities arising out of or based upon (i) an
act, omission, conduct or activity of Series J under this Agreement arising from
a material breach of any representation, warranty, covenant or material term of
this Agreement by Series J, (ii) any acts, omissions or alleged acts or
omissions arising out of or in connection with Series J or this Agreement, any
investment made or held by Series J, provided that such acts, omissions or
alleged acts or omission upon which such actual or threatened action, proceeding
or claim are based did not constitute willful misconduct or gross negligence by
such Trading Advisor Indemnified Person, or (iii) a misleading or untrue
statement of a material fact contained in the Memorandum or any amendment or
supplement thereto, or an omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading.

(d) Procedure for Indemnification. Promptly after receipt by an indemnified
party under this Section 9 of notice of the commencement of an action or claim
to which either such Section may apply, the indemnified party shall notify the
indemnifying party in writing of the commencement of such action or claim if a
claim for indemnification in respect of such action or claim may be made against
the indemnifying party under either such Section; but the omission so to notify
the indemnifying party shall not relieve the indemnifying party from any
liability which the indemnifying party may have to the indemnified party under
either such Section (except where such omission shall have materially prejudiced
the indemnifying party) or otherwise. In case any such action or claim shall be
brought against an indemnified party and the indemnified party shall notify the
indemnifying party of the commencement of such action or claim, the indemnifying
party shall be entitled to participate in such action or claim and, to the
extent that the indemnifying party may desire, to assume the portion of the
defense of such action or claim with respect to which the indemnifying party has
an indemnification obligation hereunder with counsel selected by the
indemnifying party and approved by the indemnified party. After notice from the
indemnifying party to the indemnified party of the indemnifying party’s election
so to assume the defense of such action or claim, or the applicable portion
thereof, the indemnifying party shall not be liable to the indemnified party for
any legal, accounting, and other fees and expenses subsequently incurred by the
indemnified party in connection with the defense of such action or claim other
than reasonable costs of investigation.

 

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(e) Availability of Other Remedies. The foregoing agreements of indemnity shall
be in addition to, and shall in no respect limit or restrict, any other remedies
which may be available to an indemnified party.

10. Confidentiality

(a) Proprietary Information. The Trading Advisor’s trading methodologies,
systems, strategies, formulae and programs, trading advice, trading
instructions, research data bases, and computer software (including Financial
Instrument positions established pursuant thereto) (the “Proprietary
Information”) are the sole and exclusive property of the Trading Advisor. The
Proprietary Information will be kept confidential and will not, without the
prior written consent of the Trading Advisor, be disclosed either directly or
indirectly by Series J or the Managing Owner or by Series J’s or the Managing
Owner’s representatives, beneficial owners, officers, directors or employees
(collectively, “Representatives”), in any manner whatsoever, in whole or in
part, and will not be used by Series J, the Managing Owner or their
Representatives for any purpose whatsoever other than for the purpose of
evaluating and monitoring Series J’s trading and performance. Moreover, Series J
and the Managing Owner agree to reveal the Proprietary Information only to such
of Series J’s and the Managing Owner’s Representatives who need to know the
Proprietary Information for the purpose of evaluating Series J’s trading and
performance, who are informed by Series J or the Managing Owner of the
confidential nature of the Proprietary Information and who agree to treat the
Proprietary Information as confidential and proprietary.

(b) Information Not Subject to Confidentiality Obligations. The obligations of
the parties in relation to confidentiality will not apply to the extent that any
Proprietary Information (i) is required to be disclosed in accordance with any
law, rule, regulation or order of any court, arbitration panel, governmental,
regulatory or self-regulatory authority or any audit requirement, or (ii) has
entered into the public domain other than by a breach of duty on the part of
Series J or the Managing Owner.

11. Entire Agreement

This Agreement constitutes the entire agreement among the parties hereto with
respect to the matters referred to herein, and no other agreement, verbal or
otherwise, shall be binding as between the parties.

12. Assignment

This Agreement shall not be assigned by any party hereto without the prior
express written consent of the other parties.

13. Amendment; Waiver

This Agreement shall not be amended except by a writing signed by the parties
hereto. No waiver of any provision of this Agreement shall be implied from any
course of dealing among the parties hereto or from any failure by any party
hereto to assert its rights hereunder on any occasion or series of occasions.

14. Severability

If any provision of this Agreement, or the application of any provision to any
person or circumstance, shall be held to be inconsistent with any present or
future law, ruling, rule, or regulation of any court or governmental or
regulatory authority having jurisdiction over the subject matter hereof, such

 

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provision shall be deemed to be rescinded or modified in accordance with such
law, ruling, rule, or regulation, and the remainder of this Agreement, or the
application of such provision to persons or circumstances other than those as to
which it shall be held inconsistent, shall not be affected thereby.

15. Notices

Any notice required or desired to be delivered under this Agreement shall be in
writing and shall be delivered by courier service or facsimile transmission
(with electronic confirmation) and shall be effective upon actual receipt by the
party to which such notice shall be directed, addressed as follows (or to such
other address as the party entitled to notice shall hereafter designate in
accordance with the terms hereof):

If to Series J:

World Monitor Trust III – Series J

c/o Kenmar Preferred Investments Corp.

900 King Street, Suite 100

Rye Brook, New York 10573

Attn: General Counsel

Facsimile: (914) 307-4045

E-mail: legaldept@kenmar.com

with copies to:

Kenmar Preferred Investments Corp.

900 King Street, Suite 100

Rye Brook, New York 10573

Attn: General Counsel

Facsimile: (914) 307-4045

E-mail: legaldept@kenmar.com

and

Alston & Bird LLP

90 Park Avenue

New York, New York 10016

Attention: Timothy P. Selby, Esq.

Facsimile: (212) 210-9494

E-mail: timothy.selby@alston.com

If to the Managing Owner:

Kenmar Preferred Investment Corp.

900 King Street, Suite 100

Rye Brook, New York 10573

Attn: General Counsel

Facsimile: (914) 307-4045

E-mail: legaldept@kenmar.com

 

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with a copy to:

Alston & Bird LLP

90 Park Avenue

New York, New York 10016

Attention: Timothy P. Selby, Esq.

Facsimile: (212) 210-9494

E-mail: timothy.selby@alston.com

If to the Trading Advisor:

Paskewitz Asset Management, LLC

100 Plainfield Avenue, Suite 1

Edison, NJ 08817

Attn: Diana King

E-mail: dianak@pamhf.com

16. Governing Law

This Agreement shall be governed by and construed in accordance with the law of
the State of New York (excluding the law thereof which requires the application
of or reference to the law of any other jurisdiction).

17. Arbitration

The parties waive their right to seek remedies in court, including any right to
a jury trial. The parties agree that in the event of any dispute arising out of,
relating to or in connection with this Agreement, such dispute shall be resolved
exclusively by arbitration to be conducted only in the county and state of New
York, New York in accordance with the rules of JAMS/Endispute (“JAMS”) applying
the laws of New York or the United States, as appropriate. Disputes shall not be
resolved in any other forum or venue. The parties agree that such arbitration
shall be conducted by a retired judge who is experienced in resolving similar
disputes, that discovery shall not be permitted except as required by the rules
of JAMS, that the arbitration award shall not include factual findings or
conclusions of law, and that no punitive damages shall be awarded. The parties
understand that their right to appeal or to seek modification of any ruling or
award of the arbitrator is severely limited. Any award rendered by the
arbitrator shall be final and binding, and judgment may be entered on it in any
court of competent jurisdiction in the county and state of New York, New York or
as otherwise provided by law.

18. Survival

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

19. Counterparts

This Agreement may be executed in counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same instrument.

 

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20. Headings

Headings to sections and subsections in this Agreement are for the convenience
of the parties only and are not intended to be a part of or to affect the
meaning or interpretation hereof.

21. No Third Party Beneficiaries

This Agreement is not intended to and shall not convey any rights to persons not
a party to this Agreement.

[Remainder of page left blank intentionally.]

 

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

 

WORLD MONITOR TRUST III – SERIES J By:  

Kenmar Preferred Investments Corp.,

its Managing Owner

  By:  

/s/ Esther E. Goodman

  Name:   Esther E. Goodman   Title:  

Senior Executive Vice President

and Chief Operating Officer

 

KENMAR PREFERRED INVESTMENTS CORP. By:  

/s/ Esther E. Goodman

Name:   Esther E. Goodman Title:  

Senior Executive Vice President

and Chief Operating Officer

 

PASKEWITZ ASSET MANAGEMENT, LLC By:  

/s/ Diana King

Name:   Diana King Title:   Chief Financial Officer

 

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EXHIBIT A

Program Disclosure

Paskewitz Contrarian Stock Index Program

In implementing its Contrarian Stock Index Program, the Trading Advisor intends
to invest in S&P 500 futures with the objective of achieving consistent capital
growth, which is uncorrelated or negatively correlated with the CTA Index, the
S&P 500 index, the U.S. Government Bond index, as well as all other major hedge
fund indices. The Trading Advisor utilizes a fully-systematic contrarian program
that employs multiple models to forecast short and intermediate term tops and
bottoms in the S&P 500 index, and then simultaneously generate trades, buying
identified bottoms and selling identified tops. The trading portfolio represents
the net outcomes of the predictive sub-models. For example, if 2 of the
sub-models wanted by buy, and 1 wanted to short, then the portfolio trade would
be to “buy 1 unit”, since the other buy and simultaneous short signals would be
cancelled out. Risk control is both pro-active and reactive. Pro-active risk
controls include limits on leverage and scaling of positions appropriate to
investor volatility and return objectives. Typical exposure is approximately 1/4
of maximum exposure, and at times, the strategy can be completely out of the
market. Pro-active risk control is further provided by strategy diversification.
Reactive risk controls include a stop loss on positions. An adverse scenario for
this strategy is that an adverse large price gap occurs subsequent to the
portfolio putting on a maximum exposure position.

MARKET RISKS ARE INHERENT IN ALL INVESTMENT STRATEGIES TO VARYING DEGREES. THE
TRADING ADVISOR’S TRADING PROGRAM IS SPECULATIVE AND ENTAILS SUBSTANTIAL RISKS,
AND NO ASSURANCES CAN BE GIVEN THAT A CLENT WILL ACHIEVE ITS INVESTMENT
OBJECTIVE OR AVOID SUBSTANTIAL LOSSES.

 

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