PROSPECTOR FUNDS, INC. FUND ACCOUNTING SERVICING AGREEMENT
THIS
AGREEMENT is made and entered into
as of this ___ day of September, 2007, by and between PROSPECTOR FUNDS,
INC., a Maryland corporation (the “Company”) and U.S. BANCORP
FUND SERVICES, LLC, a Wisconsin limited liability company
(“USBFS”).
WHEREAS,
the Company is registered
under the Investment Company Act of 1940, as amended (the “1940 Act”), 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;
WHEREAS,
USBFS is, among other things,
in the business of providing mutual fund accounting services to investment
companies; and
WHEREAS,
the Company desires to retain
USBFS to provide accounting services to each series of the Company listed on
Exhibit A hereto (as amended from time to time) (each a “Fund” and
collectively, the “Funds”).
NOW,
THEREFORE, in consideration of the
promises and mutual covenants herein contained, and other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereto,
intending to be legally bound, do hereby agree as follows:
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1.
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Appointment
of USBFS as Fund
Accountant
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The
Company hereby appoints USBFS as fund accountant of the Company on the terms
and
conditions set forth in this Agreement, and USBFS hereby accepts such
appointment and agrees to perform the services and duties set forth in this
Agreement. The services and duties of USBFS shall be confined to
those matters expressly set forth herein, and no implied duties are assumed
by
or may be asserted against USBFS hereunder.
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2.
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Services
and Duties of USBFS
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USBFS
shall provide the following accounting services to the Funds:
A. Portfolio
Accounting Services:
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(1)
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Maintain
portfolio records on a trade date+1 basis using security trade information
communicated from the Funds’ investment
adviser.
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(2)
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For
each valuation date, obtain prices from a pricing source determined
in
accordance with valuation procedures approved by the board of directors
of
the Company (the “Board of Directors”) and apply those prices to the
portfolio positions. For those securities where market
quotations are not readily available, the Board of Directors shall
approve, in good faith, procedures for determining the fair value
for such
securities.
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(3) |
Identify
interest and dividend accrual balances as of each valuation date
and
calculate gross earnings on investments for each accounting
period.
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(4)
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Determine
gain/loss on security sales and identify them as short-term or long-term;
account for periodic distributions of gains or losses to shareholders
and
maintain undistributed gain or loss balances as of each valuation
date.
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(5)
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On
a daily basis, reconcile cash of each Fund with the Company’s custodian
and contact the Company with any material issue regarding cash
reconciliation.
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(6)
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Transmit
a copy of the portfolio valuation to the Funds’ investment adviser
daily.
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(7)
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Review
the impact of current day’s activity on a per share basis, and review
changes in market value.
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B. Expense
Accrual and Payment Services:
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(1)
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For
each valuation date, calculate the expense accrual amounts as directed
by
the Company as to methodology, rate or dollar
amount.
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(2)
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Process
and record payments for each Fund’s expenses upon receipt of written
authorization from the Company.
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(3)
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Account
for each Fund’s expenditures and maintain expense accrual balances at the
level of accounting detail, as agreed upon by USBFS and the
Company.
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(4)
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Provide
expense accrual and payment
reporting.
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C.
Fund
Valuation and Financial Reporting Services:
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(1)
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Account
for each Fund’s share purchases, sales, exchanges, transfers, dividend
reinvestments, and other Fund share activity as reported by the Funds’
transfer agent on a timely basis.
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(2)
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Apply
equalization accounting as directed by the
Company.
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(3)
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Determine
net investment income (earnings) for each Fund as of each valuation
date. Account for periodic distributions of earnings to
shareholders and maintain undistributed net investment income balances
as
of each valuation date.
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(4) |
Maintain
a general ledger and other accounts, books, and financial
records for each Fund in the form as agreed upon.
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(5)
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Determine
the net asset value of each Fund according to the accounting policies
and
procedures set forth in the Funds’ current
prospectus.
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(6)
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Calculate
per share net asset value, per share net earnings, and other per
share
amounts reflective of the Funds’ operations at such time as required by
the nature and characteristics of the
Funds.
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(7)
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USBFS
will its best efforts to communicate a priced portfolio report for
each
Fund to a designated officer of the Company at approximately
5:45pm Eastern Time.
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(8)
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Communicate
to the Company, at an agreed upon time, the per share net asset value
for
each valuation date.
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(9)
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Prepare
monthly reports that document the adequacy of accounting detail to
support
month-end ledger balances.
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(10)
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Prepare
monthly security transactions
listings.
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D. Tax
Accounting Services:
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(1)
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Maintain
accounting records for the investment portfolio of each Fund to support
the tax reporting required for “regulated investment companies” under the
Internal Revenue Code of 1986, as amended (the
“Code”).
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(2)
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Maintain
tax lot detail for each Fund’s investment
portfolio.
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(3)
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Calculate
taxable gain/loss on security sales using the tax lot relief method
designated by the Company.
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(4)
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Provide
the necessary financial information to calculate the taxable components
of
income and capital gains distributions to support tax reporting to
the
shareholders.
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E. Compliance
Control Services:
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(1)
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Support
reporting to regulatory bodies and support financial statement preparation
by making each Fund's accounting records available to the Company,
the
Securities and Exchange Commission (the “SEC”), and the independent
accountants.
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(2)
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Maintain
accounting records according to the 1940 Act and regulations provided
thereunder.
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(3)
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Perform
its duties hereunder in compliance with all applicable laws and
regulations and provide any sub-certifications reasonably requested
by the
Company in connection with any certification required of the Company
pursuant to the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 (the “SOX Act”) or any rules or
regulations promulgated by the SEC thereunder, provided the same
shall not
be deemed to change USBFS’s standard of care as set forth
herein.
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(4)
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Cooperate
with the Company’s independent accountants and take all reasonable action
in the performance of its obligations under this Agreement to ensure
that
the necessary information is made available to such accountants for
the
expression of their opinion on the Funds’ financial statements without any
qualification as to the scope of their
examination.
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3.
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License
of Data; Warranty; Termination of
Rights
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A.
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The
valuation information and evaluations being provided to the Company
by
USBFS pursuant hereto (collectively, the “Data”) are being licensed, not
sold, to the Company. The Company has a limited license to use
the Data only for purposes necessary to valuing the Company’s assets and
reporting to regulatory bodies (the “License”). The Company
does not have any license nor right to use the Data for purposes
beyond
the intentions of this Agreement including, but not limited to, resale
to
other users or use to create any type of historical
database. The License is non-transferable and not
sub-licensable. The Company’s right to use the Data cannot be
passed to or shared with any other
entity.
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The
Company acknowledges the proprietary rights that USBFS and its suppliers have
in
the Data.
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B.
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THE
COMPANY HEREBY ACCEPTS THE DATA AS IS, WHERE IS, WITH NO WARRANTIES,
EXPRESS OR IMPLIED, AS TO MERCHANTABILITY OR FITNESS FOR ANY PURPOSE
OR
ANY OTHER MATTER.
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C.
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USBFS
may stop supplying some or all Data to the Company if USBFS’s suppliers
terminate any agreement to provide Data to USBFS provided that USBFS
work
with the Advisor to obtain comparable Data from another supplier,
and
subject to the approval of the Fund Board. Also, USBFS may stop
supplying some or all Data to the Company if USBFS reasonably believes
that the Company is using the Data in violation of the License, or
breaching its duties of confidentiality provided for hereunder, or
if any
of USBFS’s suppliers demand that the Data be withheld from the
Company. USBFS will provide notice to the Company of any
termination of provision of Data as soon as reasonably
possible.
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D.
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Notwithstanding
the language provided in Section (3) herein, USBFS is in no way
absolved from any duties and responsibilities set forth in Section
two (2)
of
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E.
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this
Agreement, including performing tolerance checks, reviewing the current
day’s activities on a per-share basis and reviewing changes in market
value. For instance, USBFS will review daily exception reports to
examine
securities which exceed set tolerance levels and check those identified
securities against a secondary source to confirm the change is due
to
normal business activity.
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4.
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Pricing
of Securities
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A.
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For
each valuation date, USBFS shall obtain prices from a pricing source
recommended by USBFS, approved by the Fund Board and determined in
accordance with the valuation procedures of the Funds approved by
the
Board of Directors and apply those prices to the portfolio positions
of
the Funds. For those securities where market quotations are not
readily available, the Board of Directors shall approve, in good
faith,
procedures for determining the fair value for such
securities.
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If
the Company desires to provide a price that varies from the price provided
by
the pricing source, the Company shall promptly notify and supply USBFS with
the
price of any such security on each valuation date. All pricing
changes made by the Company will be in writing and must specifically identify
the securities to be changed by CUSIP, name of security, new price or rate
to be
applied, and, if applicable, the time period for which the new price(s) is/are
effective.
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B.
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In
the event that the Company at any time receives Data containing
evaluations, rather than market quotations, for certain securities
or
certain other data related to such securities, the following provisions
will apply: (i) evaluated securities are typically complicated
financial instruments. There are many methodologies (including
computer-based analytical modeling and individual security evaluations)
available to generate approximations of the market value of such
securities, and there is significant professional disagreement about
which
method is best. No evaluation method, including those used by
USBFS and its suppliers, may consistently generate approximations
that
correspond to actual “traded” prices of the securities; (ii) methodologies
used to provide the pricing portion of certain Data may rely on
evaluations; however, the Company acknowledges that there may be
errors or
defects in the software, databases, or methodologies generating the
evaluations that may cause resultant evaluations to be inappropriate
for
use in certain applications; and (iii) the Company assumes all
responsibility for edit checking, external verification of evaluations,
and ultimately the appropriateness of using Data containing evaluations,
regardless of any efforts made by USBFS and its suppliers in this
respect.
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5.
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Changes
in Accounting Procedures
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Any
resolution passed by the Board of Directors that affects accounting practices
and procedures under this Agreement shall be effective upon written receipt
of
notice and
acceptance
by USBFS, which acceptance shall not be unreasonably withheld.
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6.
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Changes
in Equipment, Systems,
Etc.
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USBFS
reserves the right to make changes from time to time, as it deems advisable,
relating to its systems, programs, rules, operating schedules and equipment,
so
long as such changes do not adversely affect the services provided to the
Company under this Agreement. The Company will receive notice prior to any
major
system conversion.
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7.
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Compensation
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USBFS
shall be compensated for providing the services set forth in this Agreement
in
accordance with the fee schedule set forth on Exhibit B hereto (as
amended from time to time; but only on or after the third anniversary of the
effective date of this Agreement). USBFS shall also be compensated
for such out-of-pocket expenses (e.g., telecommunication charges, postage and
delivery charges, and reproduction charges) as are reasonably incurred by USBFS
in performing its duties hereunder. The Company shall pay all such
fees and reimbursable expenses within 30 calendar days following receipt of
the
billing notice, except for any fee or expense subject to a good faith
dispute. The Company shall notify USBFS in writing within 30 calendar
days following receipt of each invoice if the Company is disputing any amounts
in good faith. The Company shall pay such disputed amounts within 10
calendar days of the day on which the parties agree to the amount to be
paid. With the exception of any fee or expense the Company is
disputing in good faith as set forth above, and in the absence of fraud and/or
deceit, unpaid invoices shall accrue a finance charge of 1½% per month after the
due date. Notwithstanding anything to the contrary, amounts owed by
the Company to USBFS shall only be paid out of the assets and property of the
particular Fund involved.
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8.
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Representations
and Warranties
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A.
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The
Company hereby represents and warrants to USBFS, which representations
and
warranties shall be deemed to be continuing throughout the term of
this
Agreement, that:
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(1)
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It
is duly organized and existing under the laws of the jurisdiction
of its
organization, with full power to carry on its business as now conducted,
to enter into this Agreement and to perform its obligations
hereunder;
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(2)
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This
Agreement has been duly authorized, executed and delivered by the
Company
in accordance with all requisite action and constitutes a valid and
legally binding obligation of the Company, enforceable in accordance
with
its terms, subject to bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting the rights and remedies
of
creditors and secured parties;
and
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(3)
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It
is conducting its business in compliance in all material respects
with all
applicable laws and regulations, both state and federal, and has
obtained
all regulatory approvals necessary to carry on its business as now
conducted; there is no statute, rule, regulation, order or judgment
binding on it and no provision of its charter, bylaws or any contract
binding it or affecting its property which would prohibit its execution
or
performance of this Agreement.
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B.
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USBFS
hereby represents and warrants to the Company, which representations
and
warranties shall be deemed to be continuing throughout the term of
this
Agreement, that:
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(1)
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It
is duly organized and existing under the laws of the jurisdiction
of its
organization, with full power to carry on its business as now conducted,
to enter into this Agreement and to perform its obligations
hereunder;
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(2)
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This
Agreement has been duly authorized, executed and delivered by USBFS
in
accordance with all requisite action and constitutes a valid and
legally
binding obligation of USBFS, enforceable in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, moratorium and
other
laws of general application affecting the rights and remedies of
creditors
and secured parties;
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(3)
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It
(i) has compliance policies and procedures reasonably designed to
ensure
compliance with the Federal Securities laws as that term is defined
in
Rule 38a-1 under the 1940 Act, (ii) will upon request, provide reports
and
certifications in a mutually agreed upon form to the Company’s Chief
Compliance Officer regarding the foregoing, and (iii) will maintain
appropriate records in accordance with Rule 38a-1;
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(4)
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To
the extent it has access to the Funds’ portfolio holdings prior to their
public dissemination, it will comply with the Funds’ portfolio holdings
disclosure policy;
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(5)
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It
will maintain a disaster recovery and business continuity plan and
adequate and reliable computer and other telecommunications equipment
as
are required by regulations applicable to Fund Accounting and as
are
necessary and appropriate for Fund Accounting to carry out its obligations
under this Agreement and, upon Fund Accounting’s reasonable request, will
provide supplemental information concerning the aspects of Fund
Accounting’s disaster recovery and business continuity plan that are
relevant to the services provided by Fund Accounting hereunder;
and
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(6)
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It
is conducting its business in compliance in all material respects
with all
applicable laws and regulations, both state and federal, and has
obtained
all regulatory approvals necessary to carry on its business as now
conducted; there is no statute, rule, regulation, order or judgment
binding on it and no provision of its charter, bylaws or any contract
binding it or affecting its property which would prohibit its execution
or
performance of this Agreement.
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9.
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Standard
of Care; Indemnification; Limitation of
Liability
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A.
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USBFS
shall exercise reasonable care in the performance of its duties under
this
Agreement. Neither USBFS nor its suppliers shall be liable for
any error of judgment or mistake of law or for any loss suffered
by a Fund
or any third party in connection with its duties under this Agreement,
including losses resulting from mechanical breakdowns or the failure
of
communication or power supplies beyond USBFS’s control, except a loss
arising out of or relating to USBFS’s refusal or failure to comply with
the terms of this Agreement or from its bad faith, negligence, or
willful
misconduct in the performance of its duties under this
Agreement. Each Fund shall indemnify and hold harmless USBFS
and its suppliers from and against any and all claims, demands, losses,
expenses, and liabilities of any and every nature (including reasonable
attorneys’ fees) that USBFS or its suppliers may sustain or incur or that
may be asserted against USBFS or its suppliers by any person arising
out
of or related, with respect to such Fund only, to (X) any
action taken or omitted to be taken by it in performing the services
hereunder (i) in accordance with the foregoing standards, or (ii)
in
reliance upon any written or oral instruction provided to USBFS by
any
duly authorized officer of the Company, as approved by the Board
of
Directors of the Company, , except for any and all claims, demands,
losses, expenses, and liabilities arising out of or relating to USBFS’s
refusal or failure to comply with the terms of this Agreement or
from its
bad faith, negligence or willful misconduct in the performance of
its
duties under this Agreement. This indemnity shall be a
continuing obligation of the relevant Fund, its successors and assigns,
notwithstanding the termination of this Agreement. As used in
this paragraph, the term “USBFS” shall include USBFS’s directors, officers
and employees.
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The
Company acknowledges that the Data are intended for use as an aid to
institutional investors, registered brokers or professionals of similar
sophistication in making informed judgments concerning
securities. The Company accepts responsibility for, and acknowledges
it exercises its own independent judgment in, its selection of the Data, its
selection of the use or intended use of such, and any results
obtained. Nothing contained herein shall be deemed to be a waiver of
any rights existing under applicable law for the protection of
investors.
USBFS
shall indemnify and hold the Company harmless from and against any and all
claims, demands, losses, expenses, and liabilities of any and every nature
(including reasonable attorneys' fees) that the Company may sustain or incur
or
that may be asserted against the Company by any person arising out of any action
taken or omitted to be taken by USBFS as a result of USBFS’s refusal or failure
to comply with the terms of this Agreement, or from its bad faith, negligence,
or willful misconduct in the performance of its duties under this
Agreement. This indemnity shall be a continuing obligation of USBFS,
its successors and assigns, notwithstanding the termination of this
Agreement. As used in this paragraph, the term “Company” shall
include the Company’s directors, officers and employees.
In
the event of a mechanical breakdown or failure of communication or power
supplies beyond its control, USBFS shall take all reasonable steps, which may
include but not be limited to execution of its business continuity plan, to
(i)
minimize service interruptions for any period that such interruption continues,
and (ii) make every reasonable effort to restore any lost or damaged
data and correct any errors resulting from such a breakdown at the expense
of
USBFS. USBFS agrees that it shall, at all times, have reasonable
contingency plans with appropriate parties, making reasonable provision for
emergency use of electrical data processing equipment to the extent appropriate
equipment is available. Representatives of the Company shall be
entitled to inspect USBFS’s premises and operating capabilities at any time
during regular business hours of USBFS, upon reasonable notice to
USBFS. Moreover, USBFS shall provide the Company, at such times as
the Company may reasonably require, copies of reports rendered by independent
accountants on the internal controls and procedures of USBFS relating to the
services provided by USBFS under this Agreement.
Notwithstanding
the above, USBFS reserves the right to reprocess and correct administrative
errors at its own expense.
In
no case shall either party be liable to the other for (i) any special indirect
or consequential damages, loss of profits or goodwill (even if advised of the
possibility of such); (ii) any delay by reason of circumstances beyond its
control, including acts of civil or military authority, national emergencies,
labor difficulties, fire, mechanical breakdown, flood or catastrophe, acts
of
God, insurrection, war, riots, or failure beyond its control of transportation
or power supply..
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B.
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In
order that the indemnification provisions contained in this section
shall
apply, it is understood that if in any case the indemnitor may be
asked to
indemnify or hold the indemnitee harmless, the indemnitor shall be
fully
and promptly advised of all pertinent facts concerning the situation
in
question, and it is further understood that the indemnitee will use
all
reasonable care to notify the indemnitor promptly concerning any
situation
that presents or appears likely to present the probability of a claim
for
indemnification. In the absence of a conflict, the indemnitor
shall have the option to defend the indemnitee against any claim
that may
be the subject of this indemnification. In the event that the
indemnitor so elects, it will so notify the indemnitee and thereupon
the
indemnitor shall take over complete defense of the claim, and the
indemnitee shall in such situation initiate no further legal or other
expenses for which it shall seek indemnification under this
section. The indemnitee shall in no case confess any claim or
make any compromise in any case in which the indemnitor will be asked
to
indemnify the indemnitee except with the indemnitor’s prior written
consent.
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C.
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The
indemnity and defense provisions set forth in this Section 9 shall
indefinitely survive the termination and/or assignment of this
Agreement.
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D.
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If
USBFS is acting in another capacity for the Company pursuant to a
separate
agreement, nothing herein shall be deemed to relieve USBFS of any
of its
obligations in such other capacity.
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10.
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Notification
of Error
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The
Company will notify USBFS of any discrepancy or error, including, but not
limited to, failing to account for a security position in each Fund’s portfolio,
upon the later to occur of: (i) one business day after receipt of any reports
rendered by USBFS to the Company; (ii) one business days after discovery of
any
error or omission not covered in the balancing or control procedure; or (iii)
one business days after receiving notice from any shareholder regarding any
such
discrepancy.
While
Prospector Funds, Inc., understands and agrees that the Advisor has the
responsibility of overseeing each Fund’s portfolio, USBFS shall notify the
Company of any material error or discrepancy in any information maintained
on
behalf of the Company , including, but not limited to, failing to account for
a
security position in each Fund’s portfolio, promptly after becoming aware of any
such material error discrepancy.
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11.
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Data
Necessary to Perform
Services
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The
Company or its agent shall furnish to USBFS the data necessary to perform the
services described herein at such times and in such form as mutually agreed
upon.
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12.
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Proprietary
and Confidential
Information
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A.
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USBFS
agrees on behalf of itself and its directors, officers, and employees
to
treat confidentially and as proprietary information of the Company,
all
records and other information relative to the Company and prior,
present,
or potential shareholders of the Company (and clients of said
shareholders), and not to use such records and information for any
purpose
other than the performance of its responsibilities and duties hereunder,
except (i) after prior notification to and approval in writing by
the
Company, which approval shall not be unreasonably withheld and may
not be
withheld where USBFS may be exposed to civil or criminal contempt
proceedings for failure to comply, (ii) when requested to divulge
such
information by duly constituted authorities, or (iii) when so requested
by
the Company. Records and other information which have become
known to the public through no wrongful act of USBFS or any of its
employees, agents or representatives, and information that was already
in
the possession of USBFS prior to receipt thereof from the Company
or its
agent, shall not be subject to this
paragraph.
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Further,
USBFS will adhere to the privacy policies adopted by the Company pursuant to
Title V of the ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act, as may be modified from time to
time. In this regard, USBFS shall have in place and maintain
physical, electronic and procedural safeguards reasonably designed to protect
the security, confidentiality and integrity of, and to prevent unauthorized
access to or use of, records and information relating to the Company and its
shareholders.
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B.
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The
Company, on behalf of itself and its directors, officers, and employees,
will maintain the confidential and proprietary nature of the Data
and
agrees to protect it using the same efforts, but in no case less
than
reasonable efforts, that it uses to protect its own proprietary and
confidential information.
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13.
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Records
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USBFS
shall keep records relating to the services to be performed hereunder in the
form and manner, and for such period, as it may deem advisable and is agreeable
to the Company, but not inconsistent with the rules and regulations of
appropriate government authorities, in particular, Section 31 of the 1940 Act
and the rules thereunder. USBFS agrees that all such records prepared
or maintained by USBFS relating to the services to be performed by USBFS
hereunder are the property of the Company and will be preserved, maintained,
and
made available in accordance with such applicable sections and rules of the
1940
Act and will be promptly surrendered to the Company or its designee on and
in
accordance with its request.
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14.
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Compliance
with Laws
|
The
Company has and retains primary responsibility for all compliance matters
relating to the Funds, including but not limited to compliance with the 1940
Act, the Code, the SOX Act, the USA Patriot Act of 2002 and the policies and
limitations of the Funds relating to its portfolio investments as set forth
in
its current prospectus and statement of additional
information. USBFS’s services hereunder shall not relieve the Company
of its responsibilities for assuring such compliance or the Board of Director’s
oversight responsibility with respect thereto.
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15.
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Term
of Agreement; Amendment
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This
Agreement shall become effective as of the date first written above and will
continue in effect for a period of two (2) years. Subsequent to the
initial two-year term, this Agreement may be terminated by either party upon
giving 90 days prior written notice to the other party or such shorter period
as
is mutually agreed upon by the parties. Notwithstanding the
foregoing, this Agreement may be terminated by any party upon the breach of
the
other party of any material term of this Agreement if such breach is not cured
within 15 days of notice of such breach to the breaching party. This
Agreement (including without limitation any schedules or exhibits attached
hereto) may not be amended or modified in any manner except by written agreement
executed by USBFS and the Company, and authorized or approved by the Board
of
Directors.
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16.
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Duties
in the Event of
Termination
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In
the event that, in connection with termination, a successor to any of USBFS’s
duties or responsibilities hereunder is designated by the Company by written
notice to USBFS, USBFS will promptly, upon such termination and at the expense
of the Company, transfer to such successor all relevant books, records,
correspondence and other data established or maintained by USBFS under this
Agreement in a form reasonably acceptable to the Company (if such form differs
from the form in which USBFS has maintained the same, the Company shall pay
any
expenses associated with transferring the data to such form), and will cooperate
in the transfer of such duties and responsibilities, including provision for
assistance from USBFS’s personnel in the establishment of books, records and
other data by such successor. If no such successor is designated,
then such books, records and other data shall be returned to the
Company.
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17.
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Early
Termination
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In
the absence of any material breach of this Agreement, should the Company elect
to terminate this Agreement prior to the end of the term, the Company agrees
to
pay the following fees:
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a.
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all
fees associated with converting services to successor service
provider;
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b.
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all
fees associated with any record retention and/or tax reporting obligations
that may not be eliminated due to the conversion to a successor service
provider;
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c.
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all
out-of-pocket costs associated with a-b
above.
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18. Assignment
This
Agreement shall extend to and be binding upon the parties hereto and their
respective successors and assigns; provided, however, that this Agreement shall
not be assignable by the Company without the written consent of USBFS, or by
USBFS without the written consent of the Company accompanied by the
authorization or approval of the Company’s Board of Directors.
19. Governing
Law
This
Agreement shall be construed in accordance with the laws of the State of
Wisconsin, without regard to conflicts of law principles. To the
extent that the applicable laws of the State of Wisconsin, or any of the
provisions herein, conflict with the applicable provisions of the 1940 Act,
the
latter shall control, and nothing herein shall be construed in a manner
inconsistent with the 1940 Act or any rule or order of the SEC
thereunder.
20. No
Agency Relationship
Nothing
herein contained shall be deemed to authorize or empower either party to act
as
agent for the other party to this Agreement, or to conduct business in the
name,
or for the account, of the other party to this Agreement.
21. Services
Not Exclusive
Nothing
in this Agreement shall limit or restrict USBFS from providing services to
other
parties that are similar or identical to some or all of the services provided
hereunder.
22. Invalidity
Any
provision of this Agreement which may be determined by competent authority
to be
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. In such case,
the parties shall in good faith modify or substitute such provision consistent
with the original intent of the parties.
23. Notices
Any
notice required or permitted to be given by either party to the other shall
be
in writing and shall be deemed to have been given on the date delivered
personally or by courier service, or three days after sent by registered or
certified mail, postage prepaid, return receipt requested, or on the date sent
and confirmed received by facsimile transmission to the other party’s address
set forth below:
Notice
to USBFS shall be sent to:
U.S.
Bancorp Fund Services,
LLC
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▇▇▇▇▇▇▇▇▇,
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and
notice to the Company shall be sent to:
Prospector
Partners Asset Management, LLC
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24. Multiple
Originals
This
Agreement may be executed on two or more counterparts, each of which when so
executed shall be deemed to be an original, but such counterparts shall together
constitute but one and the same instrument.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by
a duly authorized officer on one or more counterparts as of the date first
above
written.
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U.S.
BANCORP FUND SERVICES, LLC
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By:
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By:
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Name:
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Name:
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Title:
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Title:
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Exhibit
A
to
the
Fund
Names
Separate
Series of Prospector Funds, Inc.
Name
of
Series Date
Added
Prospector
Capital Appreciation
Fund
On or after September __,
2007
Prospector
Opportunity
Fund On
or after September __, 2007
Exhibit
B
to
the
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FUND
ACCOUNTING SERVICES
FEE
SCHEDULE at June, 2007
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Annual
Fund Accounting Fee Per Fund*
Base
fee on the first $100 million plus
2.00
basis points on the next $250 million
1.00
basis point on the next $1 billion
.75
basis point on the balance
Annual
Base Fee on First $100 Million Per Fund*
$33,000
per domestic equity fund
$35,000
per domestic balanced fund
$42,000
per domestic fixed income or money market fund
$48,000
per international or global equity funds
Advisor
Information Source Web Portal
· $150
/fund/month
· $500
/fund/month for clients using an external administration
service
Plus
Out-Of-Pocket Expenses– Including but not limited to pricing
services, corporate action services, fair value pricing services,
factor
services, customized reporting, and all other out-of-pocket
expenses.
· Pricing
Services
· $.10 Domestic
and Canadian Equities
· $.15 Options
· $.50 Corp/Gov/Agency
Bonds
· $.80 CMO's
· $.50 International
Equities and Bonds
· $.80 Municipal
Bonds
· $.80 Money
Market Instruments
· $125
/Fund/Month - Mutual Fund Pricing
· $2.00/Foreign
Equity Security/Month for Corporate Action Service
· $125
/Month Manual Security Pricing (>10/day)
· Factor
Services (BondBuyer)
· $1.50
/CMO/Month
· $.25 /Mortgage
Backed/Month
· $300
/Month Minimum Per Fund Group
· Fair
Value Services (FT Interactive)
· $.60
on the first 100 securities per day
· $.44
on the balance of securities per day
Additional
Services– Above pricing is for standard
services. Available but not included above are the following
services – multiple class funds, master feeder products, international
income funds, funds with multiple advisors/sub-advisors.
Fees
are billed monthly.
*
Subject to annual CPI increase, Milwaukee
MSA.
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Exhibit
B (continued) to the Fund Accounting Agreement
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CHIEF
COMPLIANCE OFFICER
SUPPORT
SERVICES
FEE
SCHEDULE at June, 2007
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Chief
Compliance Officer Support Services
U.S,
Bancorp provides support to the Chief Compliance Officer (CCO) of
each
fund serviced either by U.S. Bancorp Fund Services, LLC or Quasar
Distributors, LLC. Indicated below are samples of functions
performed by USBFS in this CCO support role:
• Business
Line Functions Supported
• Fund
Administration and Compliance
• Transfer
Agent and Shareholder Services
• Fund
Accounting
• Custody
Services
• Securities
Lending Services
• Distribution
Services
• Daily
Resource to Fund CCO, Fund Board, Advisor
• Provide
USBFS/USB Critical Procedures & Compliance Controls
• Daily
and Periodic Reporting
• Periodic
CCO Conference Calls
• Dissemination
of Industry/Regulatory Information
• Client
& Business Line CCO Education & Training
• Due
Diligence Review of USBFS Service Facilities
• Quarterly
USBFS Certification
• Board
Meeting Presentation and Board Support
• Testing,
Documentation, Reporting
Annual
Fee Schedule*
· $1,200
per service line per year
Fees
are billed monthly.
*Subject
to annual CPI increase, ▇▇▇▇▇▇▇▇▇
▇▇▇.
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810306