ACCOUNTING SERVICES AGREEMENT
AGREEMENT made as of the _____ day of __________, 1997 by and between
Xxxxx Xxxxxxxx & Company, a [Delaware corporation] ("BKF"), and LEVCO Series
Trust, a Delaware business trust (the "Trust").
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Trust desires to retain BKF to render certain accounting
services to those series of the Trust described in Schedule A hereto, (each a
"Fund" and, collectively, the "Funds"), and BKF is willing to render such
services;
W I T N E S S E T H:
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NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Trust hereby appoints BKF to act as accounting
agent for the Trust on the terms set forth in this Agreement. BKF accepts such
appointment and agrees to render the services herein set forth for the
compensation provided for in Schedule C, annexed hereto and incorporated herein.
In the event that the Trust establishes additional series with respect
to which the Trust decides to retain BKF to act as accounting agent, the Trust
shall so notify BKF in writing. If BKF is willing to render such services, BKF
shall notify the Trust in writing whereupon such portfolio shall be deemed to be
a Fund hereunder and shall be subject to the provisions of this Agreement except
to the extent that said provisions (including those relating to the compensation
payable by the Funds to BKF) are modified with respect to such Fund in writing
by the Trust and BKF at the time. Without limiting the foregoing, it is
understood that the Trust will from time to time issue separate series or
classes of shares and may classify and reclassify shares of any such series or
class. BKF shall identify to each such series or class property belonging to
such series or class and in such reports, confirmations and notices to the Trust
called for under this Agreement shall identify the series or class to which such
report, confirmation or notice pertains.
2. Delivery of Documents and Information; Changes. The Trust will
provide BKF with any documents that BKF may reasonably request and will notify
BKF as soon as possible of any matter affecting the performance by BKF of its
services under this Agreement; provided that BKF shall have no responsibility
for compliance with the terms of any document (including the Declaration of
Trust, By-Laws and Prospectuses of the Trust) or with any accounting policy or
procedure adopted by the Trust until BKF has received such document or notice of
such policy or procedure.
3. Duties. Subject to the supervision and direction of the Board of
Trustees of the Trust, BKF, as accounting agent, will provide the accounting
related services to the Trust listed in Schedule B annexed hereto and
incorporated herein.
Subject to paragraph 2 of this Agreement, in performing its duties as
accounting agent for the Trust, BKF will act in accordance with the Declaration
of Trust, By-Laws, and Prospectuses of the Trust and with the instructions and
directions of the Board of Trustees of the Trust and will, in all material
respects, conform to and comply with the requirements of the 1940 Act and the
rules thereunder and all other applicable federal or state laws and regulations.
4. Compensation. BKF shall bear all expenses in connection with the
performance of its services under this Agreement, except as noted below.
(a) The Trust shall compensate BKF for its services rendered
pursuant to this Agreement in accordance with the fees set forth in Schedule C,
annexed hereto and incorporated herein. BKF shall bear its own expenses in
connection with the performance of its services under this Agreement, except
that BKF shall be entitled to reimbursement of these out-of-pocket disbursements
specified in Schedule D, annexed hereto and incorporated herein, in addition to
the fees shown in Schedule C. BKF shall have no responsibility for payment of
any expense properly payable by the Trust, including, but not limited, to costs
of printing and mailing prospectuses, reports and notices; taxes and fees
payable to federal, state and other governmental agencies; outside auditing
expenses; outside legal expenses.
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(b) BKF will xxxx the Trust as soon as practicable after the
end of each calendar quarter, and said xxxxxxxx will be detailed in accordance
with the out-of-pocket schedule. The Trust will promptly pay to BKF the
amount of such billing.
5. Changes in Equipment, Systems, Service, Etc. BKF reserves the
right to make changes from time to time, as it deems advisable, relating to its
services, systems, programs, rules, operating schedules and equipment, so long
as such changes do not adversely affect the service provided to the Trust under
this Agreement.
6. Records, BKF 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 Trust but not inconsistent with the rules and
regulations of appropriate government authorities, in particular, Section 31 of
the 1940 Act and the rules thereunder. BKF agrees that all such records prepared
or maintained by BKF relating to the services to be performed by BKF hereunder
are the property of the Trust and will be preserved, maintained, and made
available with such section and rules of the 1940 Act and will be promptly
surrendered to the Trust on and in accordance with its request.
7. Confidentiality. BKF shall handle in confidence all information
relating to the Trust's business, which is received by BKF during the course of
rendering any service hereunder.
8. Notification of Error. The Trust will notify BKF of any balancing
or control error caused by BKF within three (3) business days after receipt of
any reports rendered by BKF to the Trust, or within three (3) business days
after discovery of any error or omission not covered in the balancing or control
procedure, or within three (3) business days of receiving notice from any
shareholder.
9. Limitation of Liability.
(a) BKF shall not be liable to the Trust for any error of
judgment or mistake of law or for any loss suffered by the Trust in connection
with the performance of its obligations and duties under this Agreement
(including losses resulting from mechanical breakdowns or the failure of
communications or power supplies beyond BKF's control), except a loss resulting
from BKF's willful misfeasance, bad faith or negligence in the performance of
such obligations and duties, or by reason of its reckless disregard thereof. The
Trust will indemnify BKF against and hold it harmless from any and all losses,
claims, damages, liabilities or expenses (including reasonable counsel fees and
expenses) resulting from any claim, demand, action or suit not resulting from
the willful misfeasance, bad faith or negligence of BKF in the performance of
such obligations and duties or by reason of its reckless disregard thereof. The
Trust and BKF agree that the obligations of the Trust under this Agreement shall
not be binding upon any of the members of the Trust's Board of Trustees,
shareholders, nominees, officers, employees or agents, whether past, present or
future, of the Trust, individually, but are binding only upon the assets and
property of the Trust, as provided in the Declaration of Trust. The execution
and delivery of this Agreement have been authorized by the Board of Trustees and
signed by an authorized officer of the Trust, acting as such, and neither such
authorization by such members of the Board of Trustees nor such execution and
delivery by such officer shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but shall
bind only the assets and property of the Trust as provided in the Declaration of
Trust.
(b) In no event and under no circumstances shall either party to
this Agreement be liable to the other party for consequential or indirect loss
of profits, reputation or business or any other special damages under any
provision of this Agreement or for any act or failure to act hereunder.
10. Term and Termination.
(a) This Agreement shall remain in effect for an initial term of
two years from the date hereof and from year to year thereafter provided such
continuance is approved at least annually by the Board of Trustees of the Trust,
and such continuance is also approved annually by the vote of a majority of the
trustees of the Trust who are not parties to this agreement or "interested
persons" (as defined in the 0000 Xxx) of any such party; and provided, however,
that: (a) the Trust may, at any time and without the payment of any penalty,
terminate this Agreement upon sixty days' written notice to BKF; (b) this
agreement shall immediately terminate in the event of its assignment (as such
term is used by the 1940 Act and the rules thereunder); and (c) BKF may
terminate this agreement without payment of any penalty on sixty day's written
notice to the Trust.
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(b) In the event a termination notice is given by the Trust, all
reasonable out-of-pocket expenses associated with movement of records and
materials and conversion thereof will be borne by the Trust.
11. Amendment to this Agreement. No provision of this Agreement may
be changed, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, discharge
or termination is sought.
12. Miscellaneous.
(a) Any notice or other instrument authorized or required by
this Agreement to be given in writing to the Trust or BKF shall be sufficiently
given if addressed to the party and received by it at its office set forth below
or at such other place as it may from time to time designate in writing.
To the Trust:
LEVCO Series Trust
Xxx Xxxxxxxxxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxx
To BKF:
000 Xxxx Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxx
(b) This Agreement shall extend to and shall be binding upon the
parties hereto and their respective successors and permitted assigns.
(c) This Agreement shall be construed in accordance with the laws
of the State of New York.
(d) This Agreement may be executed in any number of counterparts
each of which shall be deemed to be an original and which collectively shall be
deemed to constitute only one instrument.
(e) The captions of this Agreement are included for convenience
of reference only and in no way define or delimit any of the provisions hereof
or otherwise affect their construction or effect.
(f) This Agreement and the schedules hereto constitute the entire
agreement between the parties hereto with respect to the matters described
herein.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be duly executed and delivered by their duly authorized officers as of the date
first written above.
XXXXX XXXXXXXX & COMPANY
By:
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LEVCO SERIES TRUST
By:
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SCHEDULE A
SERIES OF THE TRUST
The series of LEVCO Series Trust currently subject to this Agreement are as
follows:
LEVCO Equity Value Fund
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SCHEDULE B
ACCOUNTING RELATED SERVICES
A. Portfolio Accounting Services:
(1) Maintain portfolio records on a trade date +1 basis using security
trade information communicated from the investment manager on a timely
basis.
(2) For each valuation date, obtain prices from a pricing source approved
by the Board of Trustees and apply those prices to the portfolio
positions. For those securities where market quotations are not readily
available, the Board of Trustees shall approve, in good faith, the
method for determining the fair value for such securities. If the Fund
desires to provide a price which varies from the pricing source, the
Fund shall promptly notify and supply BKF with the valuation of any
such security on each valuation date. All pricing changes made by the
Fund 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 is
effective.
(3) Identify interest and dividend accrual balances as of each valuation
date and calculate gross earnings on investments for the accounting
period.
(4) Determine gain/loss on security sales and identify them as to short-
short, short- or long-term status; account for periodic distributions
of gains or losses to shareholders and maintain undistributed gain or
loss balances as of each valuation date.
B. Expense Accrual and Payment Services;
(1) For each valuation date, calculate the expense accrual amounts as
directed by the Trust as to methodology, rate or dollar amount.
(2) Record payments for Fund expenses upon receipt of written authorization
from the Fund.
(3) Account for Trust expenditures and maintain expense accrual balances at
the level of accounting detail, as agreed upon by BKF and the Trust.
(4) Provide expense accrual and payment reporting.
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C. Fund Valuation and Financial Reporting Services:
(1) Account for Fund share purchases, sales, exchanges, transfers, dividend
reinvestments, and other Fund share activity as reported by the
transfer agent on a timely basis.
(2) Determine net investment income (earnings) for the 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.
(3) Maintain a general ledger for the Fund in the form as agreed upon.
(4) For each day the Fund is open as defined in the prospectus relating to
shares of the Fund as in effect from time to time, determine the net
asset value per share of the Fund according to the accounting policies
and procedures set forth in the prospectus.
(5) Calculate per share net asset value, per share net earnings, and other
per share amounts reflective of Fund operation at such time as required
by the nature and characteristics of the Fund.
(6) Communicate, at an agreed upon time, the per share price for each
valuation date to parties as agreed upon from time to time.
(7) Prepare monthly reports which document the adequacy of accounting
detail to support month-end ledger balances.
D. Tax Accounting Services:
(1) Maintain accounting records for the investment portfolio of the Fund to
support the tax reporting required for IRS-defined regulated investment
companies, under the Internal Revenue Code of 1986, as amended, and
regulations thereunder.
(2) Maintain tax lot detail for the investment portfolio.
(3) Calculate taxable gain/loss on security sales using the tax lot relief
method designed by the Fund.
(4) Provide the necessary financial information to support the taxable
components of income and capital gains distributions to the transfer
agent to support tax reporting to the shareholders.
(5) Assist the Fund's independent public accounts in preparation of the
Fund's federal and state income tax returns.
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E. Compliance Control Services
(1) Support reporting to regulatory bodies and support financial statement
preparation by making the Fund accounting records available to the
Fund, its investment adviser, the Securities and Exchange Commission,
and the Fund's independent public accountants.
F. Shareholder and Regulatory Reporting:
(1) Support reporting to shareholders by preparing, subject to approval by
the Treasurer of the Trust, financial statements for inclusion in
annual and semiannual reports to shareholders.
(2) Prepare and, subject to approval by the Treasurer of the Trust, file
with the Securities and Exchange Commission, reports on Form N-SAR
and Rule 24f-2 Notices.
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SCHEDULE C
FEE SCHEDULE
In consideration of the services provided under this Agreement, BKF shall be
entitled to receive a monthly fee, payable monthly in arrears, equal to the
following:
Average Monthly Net Assets Monthly Fee
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$ 0 - 50,000,000 $2,000
50 - 100,000,000 $2,500
100 - 200,000,000 $3,000
200 - 300,000,000 $4,000
over 300,000,000 $5,000 plus
0.001% on amount in excess
of $300 million.
Monthly fees shall be pro-rated for any month as to which this Agreement is not
in effect for the entire month.
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SCHEDULE D
OUT-OF-POCKET EXPENSES
Out-of-pocket expenses are limited to the following items:
- Postage (including overnight or other courier services)
- Telephone
- Telecommunications charges (including FAX)
- Duplicating charges
- Pricing services
- Forms and supplies
- Such other expenses as are agreed to by BKF and the Trust
- Charges related to XXXXX conversion and filing
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