PLACEMENT AGENCY AGREEMENT

MADISON HARBOR BALANCED STRATEGIES, INC.

This Placement Agreement (the Agreement) dated as of October 25, 2004, by and among Madison Harbor Balanced Strategies, Inc. (the Fund), a Maryland corporation operating (or intending to operate) as a closed-end, non-diversified management investment company registered under the Investment Company Act of 1940, as amended (the 1940 Act), and Wells Fargo Investments, LLC (the Placement Agent), a Delaware limited liability company operating as a broker-dealer and registered as such with the Securities and Exchange Commission (SEC) and which is a member of NASD, Inc. (NASD).

WHEREAS

(A)  The Fund issues shares of its common stock (Shares) pursuant to the Funds private placement memorandum dated October 29, 2004, as amended or supplemented from time to time (the Memorandum).

(B)   The Fund desires to appoint the Placement Agent as placement agent with respect to the Shares, and the Placement Agent is willing to accept such appointment.

NOW IT IS AGREED AS FOLLOWS:

1.    Placement of Shares

(a)    Subject to the terms and conditions set forth herein, the Fund appoints the Placement Agent as its non-exclusive placement agent in connection with the placement of Shares, and the Placement Agent hereby accepts such appointment and agrees to use its reasonable best efforts to offer and sell Shares to investors whom the Placement Agent reasonably believes meet the eligibility requirements set forth in the Memorandum and to use all reasonable efforts to assist the Fund in obtaining performance by each investor who submits a Subscription Agreement (as defined below).

(b)    Unless otherwise agreed by the parties, the Placement Agent shall be responsible for reviewing each Subscription Agreement to confirm that it has been completed in accordance with the instructions thereto and that each has been completed by or on behalf of an Eligible Investor as described in the Memorandum. The Placement Agent, in its sole discretion, may return to the Fund and /or its investment adviser (the Investment Adviser) any Subscription Agreement that is not completed to its satisfaction and shall be under no obligation to accept any Subscription Agreement. The Placement Agent is not obligated to sell any specific number of Shares or to purchase any Shares for its own account. The Fund shall be entitled to appoint additional placement agents.

(c)    In offering subscriptions for Shares, the Placement Agent shall act solely as the agent of the Fund and not as principal.

(d)    Prior to forwarding a Subscription Agreement to the Fund and/or the Investment Adviser for acceptance, the Placement Agent shall use its reasonable efforts to determine that the subscriber for Shares has a legitimate source of funds, that there is no reason to suspect such subscriber of money laundering activities, and that in forwarding the Subscription Agreement the Placement Agent is compliant with the program described in Section 5(h).

(e)    For purposes of the offering of Shares, the Fund has furnished to the Placement Agent copies of the Memorandum and subscription documentation (the Subscription Agreement). Additional copies of such documents will be furnished to the Placement Agent at no cost to the Placement Agent in such numbers as reasonably requested. The Placement Agent is authorized to furnish to prospective subscribers for Shares only such information concerning the Fund and the offering as may be contained in the Memorandum, the Funds formation documents, or any other documents, including sales material, if approved in writing by the Fund (collectively with the Memorandum, formation documents and Subscription Agreement, the Funds Offering Documents). The Placement Agent shall assist the Administrator in maintaining a record of each prospective investor to whom the Placement Agent furnishes Offering Documents.