FORM OF ADMINISTRATIVE SERVICES AGREEMENT
This Agreement, dated as of _________2003, is by and between Advisory Hedged
Opportunity Fund, a Delaware statutory Trust (the "Trust"), and American Express
Financial Corporation, ("AEFC"), a Delaware corporation.
Part One: SERVICES
(1) The Trust hereby retains AEFC, and AEFC hereby agrees, for the period of
this Agreement and under the terms and conditions hereinafter set forth,
to furnish, or procure the services of a third party to furnish, the Trust
continuously with all administrative, accounting, clerical, statistical,
correspondence, corporate and all other services of whatever nature
required in connection with the administration of the Trust as provided
under this Agreement; and to pay such expenses as may be provided for in
Part Three hereof; subject always to the direction and control of the
Board of Trustees and the authorized officers of the Trust. AEFC agrees to
maintain an adequate organization of competent persons to provide the
services and to perform the functions herein mentioned. AEFC agrees to
meet with any persons at such times as the Board of Trustees deems
appropriate for the purpose of reviewing AEFC's performance under this
Agreement.
(2) The Trust agrees that it will furnish to AEFC any information that the
latter may reasonably request with respect to the services performed or to
be performed by AEFC under this Agreement.
(3) It is understood and agreed that in furnishing the Trust with the services
as herein provided, neither AEFC, nor any officer, director or agent
thereof shall be held liable to the Trust or its creditors or shareholders
for errors of judgment or for anything except willful misfeasance, bad
faith, or gross negligence in the performance of its duties, or reckless
disregard of its obligations and duties under the terms of this Agreement.
It is further understood and agreed that AEFC may rely upon information
furnished to it reasonably believed to be accurate and reliable.
Part Two: COMPENSATION FOR SERVICES
(1) The Trust agrees to pay to AEFC, on behalf of the Trust, and AEFC
covenants and agrees to accept from the Trust in full payment for the
services furnished, based on an annual rate of 0.25% of the net assets of
the Trust at each month-end, including assets attributable to AEFC and
before giving effect to any repurchases of shares by the Trust.
(a) The administrative fee for each month shall be computed based on
the net assets as of the close of business on the last business day
of each month. In the case of the suspension of the computation of
net asset value, the administrative fee for each month during such
suspension shall be computed as of the close of business on the
last business day on which the net assets were computed. As used
herein "net assets" as of the close of a business day shall include
all transactions in shares of the Trust recorded on the books of
the Trust for that day.
(2) The administrative fee shall be paid on a monthly basis and, in the event
of the termination of this Agreement, the administrative fee accrued shall
be prorated on the basis of the number of days that this Agreement is in
effect during the month with respect to which such payment is made.
(3) The administrative fee provided for hereunder shall be paid in cash by the
Trust to AEFC within _______ business days after the last day of each
month.
Part Three: ALLOCATION OF EXPENSES
(1) The Trust agrees to pay:
(a) Administrative fees payable to AEFC for its services under the
terms of this Agreement.
(b) Taxes.
(c) Fees and charges of its independent certified public accountants
for services the Trust requests.
(d) Fees and expenses of attorneys (i) it employs in matters not
involving the assertion of a claim by a third party against the
Trust, its trustees and officers, (ii) it employs in conjunction
with a claim asserted by the Board of Trustees against AEFC,
except that AEFC shall reimburse the Trust for such fees and
expenses if it is ultimately determined by a court of competent
jurisdiction, or AEFC agrees, that it is liable in whole or in
part to the Trust, and (iii) it employs to assert a claim against
a third party.
(e) Fees paid for the qualification and registration for public sale
of the securities of the Trust under the laws of the United
States and of the several states in which such securities shall
be offered for sale.
(f) Office expenses which shall include a charge for occupancy,
insurance on the premises, furniture and equipment, telephone,
telegraph, electronic information services, books, periodicals,
published services, and office supplies used by the Trust, equal
to the cost of such incurred by AEFC.
(g) Fees of consultants employed by the Trust.
(h) Trustees, officers and employees expenses which shall include
fees, salaries, memberships, dues, travel, seminars, pension,
profit sharing, and all other benefits paid to or provided for
trustees, officers and employees, directors and officers
liability insurance, errors and omissions liability insurance,
worker's compensation insurance and other expenses applicable to
the directors, officers and employees, except the Trust will not
pay any fees or expenses of any person who is an officer or
employee of AEFC or its affiliates.
(i) Filing fees and charges incurred by the Trust in connection with
filing any amendment to its articles of incorporation, or
incurred in filing any other document with the State of Delaware.
(j) Expenses properly payable by the Trust, approved by the Board of
Trustees.
(2) AEFC agrees to pay all expenses associated with the services it provides
under the terms of this Agreement.
Part Four: MISCELLANEOUS
(1) AEFC shall be deemed to be an independent contractor and, except as
expressly provided or authorized in this Agreement, shall have no authority
to act for or represent the Trust .
(2) A "business day" shall be as defined in the By-laws of the Trust.
(3) The Trust recognizes that AEFC now renders and may continue to render
investment advice and other services to other investment companies and
persons which may or may not have investment policies and investments
similar to those of the Trust and that AEFC manages its own investments
and/or those of its subsidiaries. AEFC shall be free to render such
investment advice and other services and the Trust hereby consents thereto.
(4) Neither this Agreement nor any transaction had pursuant hereto shall be
invalidated or in anyway affected by the fact that Trustees, officers,
agents and/or shareholders of the Trust are or may be interested in AEFC or
any successor or assignee thereof, as directors, officers, stockholders or
otherwise; that directors, officers, stockholders or agents of AEFC are or
may be interested in the Trust as Trustees, officers, shareholders, or
otherwise; or that AEFC or any successor or assignee, is or may be
interested in the Trust as shareholder or otherwise, provided, however,
that neither AEFC, nor any officer, director or employee thereof or of the
Trust , shall sell to or buy from the Trust any property or security other
than shares issued by the Trust, except in accordance with applicable
regulations or orders of the United States Securities and Exchange
Commission.
(5) Any notice under this Agreement shall be given in writing, addressed, and
delivered, or mailed postpaid, to the party to this Agreement entitled to
receive such, at such party's principal place of business in Minneapolis,
Minnesota, or to such other address as either party may designate in
writing mailed to the other.
(6) AEFC agrees that no officer, director or employee of AEFC will deal for or
on behalf of the Trust with himself as principal or agent, or with any
corporation or partnership in which he may have a financial interest,
except that this shall not prohibit officers, directors or employees of
AEFC from having a financial interest in the Trust or in AEFC.
(7) The Trust agrees that AEFC may subcontract for certain of the services
described under this Agreement with the understanding that there shall be
no diminution in the quality or level of the services and that AEFC remains
fully responsible for the services.
(8) This Agreement shall extend to and shall be binding upon the parties
hereto, and their respective successors and assigns; provided, however,
that this Agreement shall not be assignable without the written consent of
the other party. This Agreement shall be governed by the laws of the State
of Minnesota.
Part Five: RENEWAL AND TERMINATION
(1) This Agreement shall become effective on the date first set forth above and
shall continue in effect from year to year thereafter as the parties may
mutually agree; provided that either party may terminate this Agreement by
giving the other party notice in writing specifying the date of such
termination, which shall be not less than 60 days after the date of receipt
of such notice.
(2) This Agreement may not be amended or modified in any manner except by a
written agreement executed by both parties.
IN WITNESS THEREOF, the parties hereto have executed the foregoing Agreement as
of the day and year first above written.
ADVISORY HEDGED OPPORTUNITY FUND
By: ____________________________
AMERICAN EXPRESS FINANCIAL CORPORATION
By: ____________________________
