Contract
ESCROW AGREEMENT, dated
September 17, 2007 (this "Escrow Agreement"), between U.S. BANCORP FUND
SERVICES, LLC, a limited liability company organized under laws of Wisconsin
("Escrow Agent") and Prospector Funds, Inc., a corporation organized under the
laws of Maryland (“Fund”).
W I T N E S S E T
H:
WHEREAS the Fund is registered under
the Investment Company Act of 1940, as amended, as an open-end management
investment company, and is authorized to issue shares of beneficial interest in
separate series, with each such series representing interests in a separate
portfolio of securities and other assets; and
WHEREAS
the Fund intends to accept monies in the form of wires, cash or checks (“Advance
Deposits”) from prospective shareholders in advance of the date the Fund
commences operations; and
WHEREAS
The Fund desires to obtain the services of the Escrow Agent subject to the terms
and conditions set forth herein to hold such Advance Deposits.
NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements contained herein, and intending to be legally bound hereby, the
parties hereto agree as follows:
ARTICLE
1.
ESCROW
ARRANGEMENTS
1.1 Appointment and Agreement of
Escrow Agent. The Fund hereby appoints the Escrow Agent to
serve as, and the Escrow Agent hereby agrees to act as, escrow agent upon the
terms and conditions of this Escrow Agreement.
1.2 Receipt of Advance Deposits
and the Escrow Account. Upon the receipt of
Advance Deposits in the form of wired amounts, the Escrow Agent agrees to hold
such Advance Deposits, in an existing non-interest bearing account at the Escrow
Agent (the “Wire Account”) until the Distribution Date (as defined below). Any
Advance Deposits held in the Wire Account on behalf of the Fund shall be held in
the name of the Fund and segregated from the other assets in the Wire Account.
Upon the receipt of Advance Deposits in the form of checks, the Escrow Agent
shall hold the checks for safekeeping until the Distribution Date (together with
the Wire Account, the “Escrow Account”). Any checks received by the
Escrow Agent for the Escrow Account shall not be deposited or cashed until the
Distribution Date.
1.3 Actions of the Escrow Agent
and Disbursements from the Escrow Account. Upon the receipt of
written fund transfer instructions from an authorized person of the Fund, the
Escrow Agent shall on the Distribution Date promptly deposit the Advance
Deposits, (including any uncashed checks) in the account of the appropriate
series of the Fund at the Fund’s custodian, U.S. Bank, National Association,
pursuant to the deposit instructions attached as Schedule 1.
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1.4 Maintenance of the Escrow
Account; Termination of the Escrow Account. The Escrow Agent
shall continue to maintain the Escrow Account until the time at which there
shall be no funds in the Escrow Account.
1.5 Assignment of Rights to the
Escrow Account; Assignment of Obligations; Successors. This
Escrow Agreement may not be assigned by operation of law or otherwise without
the express written consent of the other party hereto (which consent may be
granted or withheld in the sole discretion of such other party). This
Escrow Agreement shall be binding upon and inure to the benefit of successors
and permitted assigns of the parties hereto.
1.6 Escrow
Agent.
(a) Except as
expressly contemplated by this Escrow Agreement or by written instructions from
the Fund, the Escrow Agent shall not sell, transfer or otherwise dispose of in
any manner all or any portion of the Escrow Account, except pursuant to an order
of a court of competent jurisdiction.
(b) The
duties and obligations of the Escrow Agent shall be determined solely by this
Escrow Agreement, and the Escrow Agent shall not be liable except for the
performance of such duties and obligations as are specifically set forth in this
Escrow Agreement.
(c) In the
performance of its duties hereunder, the Escrow Agent shall be entitled to rely
upon any document, instrument or signature, or any other writing believed by it
in good faith to be genuine and signed by an authorized officer or agent of the
Fund, and shall not be required to investigate the truth or accuracy of any
statement contained in any such document or instrument or determine the
propriety or validity of service thereof.
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(d) The
Escrow Agent shall not be liable for any error of judgment, or any action taken,
suffered or omitted to be taken, hereunder except in the case of its gross
negligence or willful misconduct. .
(e) The
Escrow Agent shall have no interest in the Escrow Account but is serving as
escrow holder only and has only possession thereof.
(f) The Fund
shall indemnify the Escrow Agent for, and hold it harmless against, any loss,
liability or expense, including, without limitation, reasonable attorneys' fees
and expenses, incurred without gross negligence, bad faith or willful misconduct
on the part of the Escrow Agent arising out of, or in connection with the
acceptance of, or the performance of, its duties and obligations under this
Escrow Agreement. Anything in this Escrow Agreement to the contrary
notwithstanding, in no event shall the Escrow Agent be liable for special,
indirect or consequential loss or damage of any kind whatsoever (including but
not limited to lost profits), even if the Escrow Agent has been advised of the
likelihood of such loss or damage and regardless of the form of
action.
(g) In the
event of ambiguity in the provisions governing the Escrow Account or uncertainty
on the part of the Escrow Agent as to how to proceed, such that the Escrow
Agent, in its sole and absolute judgment, deems it necessary for its protection
so to do, the Escrow Agent may refrain from taking any action other than to
retain custody of the Escrow Account until it shall have received written
instructions signed by an authorized person of the Fund, or to deposit the
Escrow Account with a court of competent jurisdiction and thereupon to have no
further duties or responsibilities in connection therewith.
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(h) The
Escrow Agent may at any time resign by giving three business days' prior written
notice of resignation to the Fund. The Fund may at any time remove
the Escrow Agent by giving three business days' written notice to the Escrow
Agent. If the Escrow Agent shall resign or be removed, either, a
successor Escrow Agent may be appointed by written instrument executed by the
Fund and delivered to the Escrow Agent and to such successor Escrow Agent and,
thereupon, the resignation or removal of the predecessor Escrow Agent shall
become effective and such successor Escrow Agent, without any further act, deed
or conveyance, shall become vested with all right, title and interest to all
cash and property held hereunder of such predecessor Escrow Agent, and such
predecessor Escrow Agent shall execute and deliver to such successor Escrow
Agent all right, title and interest hereunder in and to the Escrow Account and
the predecessor Escrow Agent shall thereupon be discharged from all obligations
under this Escrow Agreement and shall have no further duties or responsibilities
hereunder. If no successor Escrow Agent shall have been appointed
within two business days of a notice of resignation or removal, the Escrow
Agent's sole responsibility shall thereafter be, in its sole discretion, either
to hold the Escrow Account, without any obligation to investment or reinvest any
moneys therein, until the earlier of receipt of designation of a successor
Escrow Agent, a written instruction by the Fund and termination of this
Agreement in accordance with its terms or to apply to a court of competent
jurisdiction for appointment of a successor Escrow Agent and after such
appointment to have no further duties or obligations in connection
herewith.
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1.7 Termination. The
provisions of this Article I shall terminate on September 28, 2007 (or such
later date as the Fund may determine by written instruction to the Escrow Agent
upon at least one business day prior written notice) (the “Distribution Date”),
at which time the Escrow Agent shall deposit all assets in the Escrow Account to
the custodial accounts of the appropriate series of the Fund pursuant to Section
1.3. Notwithstanding any termination of this Article I, the
provisions of Section 1.6(f) and (g) shall survive.
ARTICLE
2.
MISCELLANEOUS
2.1 Expenses. Except
as otherwise provided herein, all costs and expenses incurred in connection with
the transactions contemplated by this Escrow Agreement shall be paid by the
party incurring such expenses.
2.2 Further
Assurances. The Fund will execute and deliver all such further
documents and instruments and take all such further action as may be necessary
in order to consummate the transactions contemplated hereby.
2.3 Specific
Performance. The parties hereto agree that irreparable damage
would occur in the event any provision of this Escrow Agreement is not performed
in accordance with the terms hereof and that the parties shall be entitled to
specific performance of the terms hereof, in addition to any other remedy at law
or in equity.
2.4 Entire
Agreement. This Escrow Agreement constitute the entire
agreement of the parties with respect to the subject matter hereof and supersede
all prior agreements and understandings, both written and oral, between the Fund
and the Escrow Agent with respect to the subject matter hereof.
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2.5 Parties in
Interest. This Escrow Agreement shall be binding upon, inure
solely to the benefit of, and be enforceable only by, the parties hereto and
their successors and permitted assigns. Nothing in this Escrow
Agreement, express or implied, is intended to or shall confer upon any other
person any right, benefit or remedy of any nature whatsoever under or by reason
of this Escrow Agreement.
2.6 Amendment:
Waiver. This Escrow Agreement may not be amended except by an
instrument in writing signed by all of the parties hereto. Any party
hereto may (x) extend the time for the performance of any obligation or other
act of any other party hereto, and (y) waive compliance with any agreement or
condition contained herein. Any such extension or waiver shall be
valid only if set forth in an instrument in writing signed by the party or
parties to be bound thereby.
2.7 Severability. If
any term or other provision of this Escrow Agreement is invalid, illegal or
incapable of being enforced by any rule of law, or public policy, all other
conditions and provisions of this Escrow Agreement shall nevertheless remain in
full force and effect so long as the economic or legal substance of this Escrow
Agreement is not affected in any manner materially adverse to any
party. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Escrow Agreement so as to effect the
original intent of the parties as closely as possible in a mutually acceptable
manner in order that the terms of this Escrow Agreement remain as originally
contemplated to the fullest extent possible.
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2.8 Notices. All
notices, requests, claims, demands and other communications hereunder shall be
in writing and shall be given (and shall be deemed to have been duly given upon
receipt) by delivery in person, by telecopy, or by registered or certified mail
(postage prepaid, return receipt requested) to the respective parties at the
following addresses (or at such other address for a party as shall be specified
in a notice given in accordance with this Section 2.8):
if to the
Fund, to:
Prospector
Partners Asset Management, LLC
000
Xxxxxx Xx
Xxxxxxxx,
XX 00000
if to the
Escrow Agent, to:
U.S.
Bancorp Fund Services, LLC
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx,
XX 00000
2.9 Governing
Law. This Escrow Agreement shall be governed by, and construed
in accordance with, the laws of the State of Wisconsin applicable to contracts
executed in and to be performed in that State. All actions and
proceedings arising out of or relating to this Escrow Agreement shall be heard
and determined in any Connecticut state court or federal court, and the Escrow
Agent and the Fund agree not to assert, by way of motion, as a defense or
otherwise, in any action, suit or proceeding, any claim that it is not subject
personally to the jurisdiction of such court, that the action, suit or
proceeding is brought in an inconvenient forum, that the venue of the action,
suit or proceeding is improper or that this Agreement or the subject matter
hereof may not be enforced in or by such court.
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2.10 Headings. The
descriptive headings contained in this Escrow Agreement are included for
convenience of reference only and shall not affect in any way the meaning or
interpretation of this Escrow Agreement.
2.11 Counterparts. This
Escrow Agreement may be executed in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which when executed
shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement.
2.12 Authorized Persons.
In the event funds transfer instructions are given whether in writing, by
telecopier or otherwise, the Escrow Agent is authorized to seek confirmation of
such instructions by telephone call-back to the person or persons designated on
Schedule 2 hereto, and the Escrow Agent may rely upon the confirmations of
anyone proposed to be the person or persons so designated. The
persons and telephone numbers for call-backs may be changed only in a writing
actually received and acknowledged by the Escrow Agent. The parties
to this Escrow Agreement acknowledge that such security procedure is
commercially reasonable.
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IN
WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement as of
the date first set forth above.
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By: /s/
Xxxxx X. Xxxxxxxx, Xx.
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Name:
Xxxxx X. Xxxxxxxx, Xx.
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Title:
Treasurer
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US
BANCORP FUND SERVICES, LLC
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as
Escrow Agent
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By: /s/
Xxxxxxx X. XxXxx
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Name:
Xxxxxxx X. XxXxx
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Title:
Senior Vice
President
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Schedule
1
Deposit
Instructions
Wire
Instructions and Account Numbers
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Schedule
2
Telephone
Number(s) for Call-Backs and Person(s) Designated to Confirm Fund Transfer
Instructions
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Name
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Telephone
Number
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Xxxxx
X. Xxxxxxxx
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203-458-1500
Ext. 811
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Treasurer
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SK 02081
0009 810171 v3
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