FORM OF ESCROW AGREEMENT
THIS AGREEMENT is made as of ________ 2003, by and among Advisory Hedged
Opportunity Fund, a Delaware statutory trust, (the "Trust"),
_____________________ ("[Party 2]"), and ___________[Bank] ("[Bank]") (the
"Escrow Agent").
WITNESSETH
WHEREAS, the Trust is registered as a closed-end, management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Trust desires that the Escrow Agent provide services as escrow
agent, as described herein, and the Escrow Agent wishes to provide such
services.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto agree as follows:
1. Acceptance by Escrow Agent. The Escrow Agent hereby accepts the appointment
as escrow agent hereunder and agrees to act on the terms and conditions
hereinafter set forth.
2. Rights and Responsibilities of Escrow Agent. The acceptance by the Escrow
Agent of its duties hereunder is subject to the following terms and
conditions, which the parties to this Agreement hereby agree shall govern
and control the Escrow Agent's rights, duties, liabilities and immunities.
(a) The Escrow Agent shall act hereunder as a depositary only, and in its
capacity as such, it shall not be responsible or liable in any manner
whatever for the sufficiency, correctness, genuineness or validity of
any document furnished to the Escrow Agent or any asset deposited with
it, nor as to the legal capacity or identity of the parties to th.
(b) "Written Instructions" mean written instructions received by the
Escrow Agent and signed by [PARTY 2] or any other person duly
authorized by [PARTY 2], or by the Board of Trustees of the Trust (the
"Board"), to give such instructions on behalf of the Trust. The
instructions may be delivered by hand, mail, facsimile, cable, telex
or telegram; except that any instruction terminating this Agreement
may be given only by hand or mail. The Trust shall file from time to
time with the Escrow Agent a certified copy certified by [PARTY 2] of
each resolution of its Board authorizing the person or persons to give
Written Instructions. Such resolution shall include certified
signatures of such persons authorized to give Written Instructions.
This shall constitute conclusive evidence of the authority of the
signatories designated therein to act. Such resolution shall be
considered in full force and effect with the Escrow Agent fully
protected in acting in reliance thereon unless and until it receives
written notice from [PARTY 2] or the Board to the contrary.
The Escrow Agent may rely upon and shall be protected for any action
or omission it takes pursuant to Written Instructions if it, in good
faith, believes such Written Instructions to be genuine. Unless
otherwise provided in this Agreement, the Escrow Agent shall act only
upon Written Instructions. The Escrow Agent shall be entitled to
assume that any Written Instruction received hereunder is not in any
way inconsistent with the provisions of the Trust's Declaration of
Trust or this Agreement or of any vote, resolution or proceeding of
the Board, unless and until the Escrow Agent receives Written
Instructions to the contrary.
(c) The Escrow Agent shall be obligated to exercise care and diligence in
the performance of its duties hereunder, to act in good faith and to
use its best efforts, within reasonable limits, in performing services
provided for under this Agreement. The Escrow Agent shall be liable
for any damages arising out of its failure to perform its duties under
this Agreement to the extent such damages arise out of its willful
misfeasance, bad faith, gross negligence or reckless disregard of such
duties.
(d) Notwithstanding anything in this Agreement to the contrary, neither
the Escrow Agent nor its affiliates shall be liable to the Trust or
[PARTY 2] for any consequential, special or indirect losses or damages
which the Trust may incur or suffer by or as a consequence of the
Escrow Agent's or its affiliates' performance of the services provided
hereunder, whether or not the likelihood of such losses or damages was
known by the Escrow Agent or its affiliates.
(e) Without limiting the generality of the foregoing or of any other
provision of this Agreement, the Escrow Agent shall not be liable for
losses beyond its control, provided it has acted in accordance with
the standard of care set forth above; and the Escrow Agent shall not
be liable for delays or errors or loss of data occurring by reason of
circumstances beyond its control, including acts of civil or military
authority, national emergencies, labor difficulties, fire, flood,
catastrophe, acts of God, insurrection, war, riots or failure of the
mails, transportation, communication or power supply.
(f) The Trust agrees to indemnify the Escrow Agent and hold it harmless
from and against any tax, charge, loss, liability, expense (including
reasonable attorneys
fees and expenses), claim or demand arising directly or indirectly
from any action or omission to act which the Escrow Agent takes (i) at
the request or on the direction of or in reliance on the advice of the
Trust or (ii) upon Written Instructions; provided, however, that
neither the Escrow Agent, nor any of its affiliates, shall be
indemnified against any liability (or any expenses incident to such
liability) arising out of the Escrow Agent's or its affiliates own
willful misfeasance, bad faith, gross negligence or reckless disregard
of its duties and obligations under this Agreement. The Trust shall
indemnify and hold harmless the Escrow Agent against and in respect of
any liability for taxes and for any penalties or interest in respect
of taxes attributable to the investment of funds held in escrow by the
Escrow Agent pursuant to this Agreement. Notwithstanding anything in
this Agreement to the contrary, the Trust shall not be liable to the
Escrow Agent for any consequential, special or indirect losses or
damages which the Escrow Agent may incur or suffer, whether or not the
likelihood of such losses or damages was known by the Trust. These
indemnities shall survive the resignation of the Escrow Agent or the
termination of this Agreement.
(g) The Escrow Agent shall have no duties except those specifically set
forth in this Agreement.
(h) The Escrow Agent shall have the right at any time it deems appropriate
to seek an adjudication in a court of competent jurisdiction as to the
respective rights of the parties hereto and shall not be held liable
by any party hereto for any delay or the consequences of any delay
occasioned by such resort to court.
(i) The Escrow Agent shall notify promptly [PARTY 2] of any discrepancy
between the amounts set forth on any remittance advice received by
Escrow Agent and the sums delivered to it therewith.
3. Definitions. Except as specifically set forth herein, the terms used in
this Agreement shall have the same meaning as set forth in the
Administration, Accounting and Investor Services Agreement among the
parties.
4. Deposit of Escrow Fund. The Escrow Agent shall establish an account in the
name of "Advisory Hedged Opportunity Fund, Escrow Account for the Benefit
of Investors" (the "Subscription Account") and an account in the name of
"Advisory Hedged Opportunity Fund, Repurchase Account" (the "Repurchase
Account" and, together with the Subscription Account, the "Accounts"). The
Escrow Agent shall promptly deposit in the Subscription Account checks
remitted by Potential Investors and made payable to Advisory Hedged
Opportunity Fund. Potential Investors also may deposit monies in the
Subscription Account by wire transfer pursuant to instructions provided to
them by the Trust or by amounts wire transferred from brokerage accounts at
[PARTY 2]. Balances on deposit in the Subscription Account will earn
interest at prevailing market rates pursuant to arrangements approved by
the Trust.
5. Statements. During the term of this Agreement, the Escrow Agent shall
provide the Trust with (a) monthly statements containing the beginning
balance in each Account as well as all principal and income transactions
for the statement period and (b) a daily summary of amounts deposited and
the status of available funds. The Trust shall be responsible for
reconciling such statements. The Escrow Agent shall be forever released and
discharged from all liability with respect to the accuracy of such
statements, except
with respect to any such act or transaction as to which the Trust shall,
within 90 days after the furnishing of the statement, file written
objections with the Escrow Agent.
6. Distributions and Closings. Upon Written Instructions, at each closing of
each offering of interests in the Trust, the Escrow Agent will wire
principal balances on deposit in the Subscription Account to the account
designated by the Trust. Such Written Instructions shall be sent to the
Escrow Agent by 1:00 p.m. on the closing date with respect to each closing.
In the event that a Potential Investor who has escrow funds in the
Subscription Account is not admitted into the Trust, upon Written
Instructions, the Escrow Agent shall promptly issue refunds to the
Potential Investor in the amount of the principal balance with accrued
interest. Such refunds shall be made in check form or by wire transfer to
the brokerage account of the Potential Investor at [PARTY 2].
7. Interest. All interest earned on the escrow funds deposited in the Accounts
hereunder shall be added to and held in the Accounts. With respect to each
closing, pursuant to Written Instructions, within 5 business days the
Escrow Agent shall issue interest payments in check form to each Potential
Investor based on his or her individual balance in the Subscription Account
along with a cover letter and to [PARTY 2] based upon its balance in the
Subscription Account along with a cover letter. The Escrow Agent will
prepare and send notifications on Form 1099 for each calendar year.
8. Repurchases. The Trust from time to time may wire balances to the
Repurchase Account in connection with periodic repurchases of interests by
the Trust from its members. Upon Written Instructions, the Escrow Agent
shall issue promptly repurchase payments from the Repurchase Account in
check form to the repurchasing member or to [PARTY 2], as the case may be.
Upon Written Instructions, the Escrow Agent will
withhold specified amounts from repurchasing members. Any interest earned
thereon will be credited to the accounts of the Trust.
9. Tax Identification Number. All deposits to the Accounts shall be subject to
the Escrow Agent's receipt of a valid tax identification number for the
Trust, [PARTY 2] or the Potential Investor, as applicable.
10. Compensation. The fee of the Escrow Agent for its services hereunder shall
be paid by the Trust as may be mutually agreed to in writing by the Trust
and Escrow Agent. Notwithstanding the foregoing, standard account
transaction charges will be billed to the Trust as an out-of-pocket
expense.
11. Amendment. This Agreement may not be amended or supplemented, and no
provision hereof may be modified or waived, except by an instrument in
writing, signed by all of the parties hereto.
12. Termination. This Agreement shall continue until terminated by either party
on 60 days prior written notice. Upon the termination of this Agreement and
upon the delivery of the balance of the Accounts to a successor escrow
agent or such other person as may be designated by Written Instructions,
the Escrow Agent shall be released and discharged of any and all further
obligations hereunder.
If no successor Escrow Agent has been designated pursuant to Written
Instructions to receive the balance of the Accounts at the expiration of
the 60-day period, the Escrow Agent shall have no further obligation
hereunder except to hold the escrow funds as a depositary. Upon written
notification by the Trust of the appointment of the successor, the Escrow
Agent shall promptly deliver the balance of the Accounts to such successor,
and the duties of the resigning Escrow Agent shall thereupon in all
respects terminate, and it shall be released and discharged of any and all
further obligations hereunder.
13. Execution. This Agreement may be executed in several counterparts, each of
which shall be deemed an original, but such counterparts together shall
constitute one and the same instrument.
14. Miscellaneous. All covenants and agreements contained in this Agreement by
or on behalf of the parties hereto shall bind and inure to the benefit of
such parties and their respective heirs, administrators, legal
representatives, successors and assigns, as the case may be. The headings
in this Agreement are for convenience of reference only and shall neither
be considered as part of this Agreement, nor limit or otherwise affect the
meaning thereof. This Agreement shall be construed and enforced in
accordance with the laws of Delaware without regard to principles of
conflicts of law.
15. Notices. All instructions, notices and other communications hereunder must
be in writing and shall be deemed to have been duly given if delivered by
hand or facsimile or mailed by first class, registered mail, return receipt
requested, postage prepaid, and addressed as follows:
(a) If to the Trust:
Advisory Hedged Opportunity Fund
50611 AXP Financial Center
Xxxxxxxxxxx, XX 00000
Attn: __________
(b) If to the Escrow Agent:
[Bank]
[NUMBER][STREET]
[CITY][STATE][ZIPCODE]
Attn: _____________
16. Partial Invalidity. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder
of this Agreement shall not be affected thereby.
17. Entire Agreement. This Agreement embodies the entire agreement and
understanding among the parties and supersedes all prior agreements and
understandings relating to the subject matter hereof; provided that, the
parties may embody in one or more separate documents their agreement, if
any, with respect to delegated duties and instructions.
IN WITNESS THEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
ADVISORY HEDGED OPPORTUNITY FUND
By: _____________________
NAME: _____________________
TITLE: _____________________
[Party 2]
By: _____________________
NAME: _____________________
TITLE: _____________________
[Bank]
By: _____________________
NAME: _____________________
TITLE: _____________________
