ACCOUNTING SERVICES AGREEMENT
THIS AGREEMENT effective as of , 1996 by and
between PRAGMA INVESTMENT TRUST (the "Trust"), an Ohio business
trust, PRAGMA, INC. ("PRAGMA"), a Texas corporation, and MGF
SERVICE CORP. ("MGF"), an Ohio corporation.
WITNESSETH THAT:
WHEREAS, the Trust has been organized to operate as an open-
end management investment company registered under the Investment
Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, PRAGMA is registered as an investment adviser under
the Investment Advisers Act of 1940 and provides advisory
services to the Trust pursuant to an Investment Advisory
Agreement; and
WHEREAS, under the Investment Advisory Agreement, PRAGMA is
responsible for retaining and compensating agents to provide non-
advisory services to the Trust; and
WHEREAS, PRAGMA desires to hire MGF to provide the Trust
with certain accounting and pricing services, and MGF is willing
to provide such services upon the terms and conditions herein set
forth;
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants herein contained, the parties hereto, intending
to be legally bound, hereby agree as follows:
1. APPOINTMENT.
MGF is hereby appointed to provide the Trust with
certain accounting and pricing services, and MGF accepts such
appointment and agrees to provide such services under the terms
and conditions set forth herein.
2. CALCULATION OF NET ASSET VALUE.
MGF will calculate the net asset value of each series
of the Trust and the per share net asset value of each series of
the Trust, in accordance with the Trust's current prospectus and
statement of additional information, once daily as of the time
selected by the Trust's Board of Trustees. MGF will prepare and
maintain a daily valuation of all securities and other assets of
the Trust in accordance with instructions from a designated
officer of the Trust or PRAGMA and in the manner set forth in
the current prospectus and statement of additional information.
In valuing securities of the Trust, MGF may contract with, and
rely upon market quotations provided by, outside services.
3. BOOKS AND RECORDS.
MGF will maintain and keep current the general ledger
for each series of the Trust, recording all income and expenses,
capital share activity and security transactions of the Trust.
MGF will maintain such further books and records as are necessary
to enable it to perform its duties under this Agreement, and will
periodically provide reports to the Trust and its authorized
agents regarding share purchases and redemptions and trial
balances of each series of the Trust. MGF will prepare and
maintain complete, accurate and current all records with respect
to the Trust required to be maintained by the Trust under the
Internal Revenue Code of 1986, as amended (the "Code"), and under
the rules and regulations of the 1940 Act, and will preserve said
records in the manner and for the periods prescribed in the Code
and the 1940 Act. The retention of such records shall be at the
expense of PRAGMA.
All of the records prepared and maintained by MGF
pursuant to this Section 3 which are required to be maintained by
the Trust under the Code and the 1940 Act will be the property of
the Trust. In the event this Agreement is terminated, all such
records shall be delivered to the Trust or to PRAGMA at PRAGMA's
expense, and MGF shall be relieved of responsibility for the
preparation and maintenance of any such records delivered to the
Trust or PRAGMA.
4. PAYMENT OF TRUST EXPENSES.
MGF shall process each request received from the Trust
or its authorized agents for payment of the Trust's expenses.
Upon receipt of written instructions signed by an officer or
other authorized agent of the Trust, MGF shall prepare checks in
the appropriate amounts which shall be signed by an authorized
officer of MGF and mailed to the appropriate party.
5. FORM N-SAR.
MGF shall maintain such records within its control and
as shall be requested by the Trust to assist the Trust in
fulfilling the requirements of Form N-SAR.
6. COOPERATION WITH ACCOUNTANTS.
MGF shall cooperate with the Trust's independent public
accountants and shall take all reasonable action in the
performance of its obligations under this Agreement to assure
that the necessary information is made available to such
accountants for the expression of their unqualified opinion where
required for any document for the Trust.
7. FURTHER ACTIONS.
Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the
purposes hereof.
8. FEES.
For performing its services under this Agreement,
PRAGMA shall pay MGF a monthly fee with respect to each series of
the Trust in accordance with the schedule attached hereto as
Schedule A. The fees with respect to any month shall be paid to
MGF on the last business day of such month. PRAGMA shall also
promptly reimburse MGF for the cost of external pricing services
utilized by MGF.
9. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS.
The parties hereto acknowledge and agree that nothing
contained herein shall be construed to require MGF to perform any
services for PRAGMA or the Trust which services could cause MGF
to be deemed an "investment adviser" of the Trust within the
meaning of Section 2(a)(20) of the 1940 Act or to supersede or
contravene the prospectus or statement of additional information
of the Trust or any provisions of the 1940 Act and the rules
thereunder. Except as otherwise provided in this Agreement and
except for the accuracy of information furnished to it by MGF,
the Trust assumes full responsibility for complying with all
applicable requirements of the 1940 Act, the Securities Act of
1933, as amended, and any laws, rules and regulations of
governmental authorities having jurisdiction, it being
acknowledged that the Trust is relying on the best efforts of
MGF.
10. REFERENCES TO MGF, PRAGMA AND THE TRUST.
The Trust or PRAGMA shall not circulate any printed
matter which contains any reference to MGF without the prior
written approval of MGF, excepting solely such printed matter as
merely identifies MGF as Administrative Services Agent, Transfer,
Shareholder Servicing and Dividend Disbursing Agent and
Accounting Services Agent. The Trust or PRAGMA will submit
printed matter requiring approval to MGF in draft form, allowing
sufficient time for review by MGF and its counsel prior to any
deadline for printing.
MGF shall not circulate any printed matter which
contains any reference to the Trust or PRAGMA without the
prior written approval of the Trust or PRAGMA, excepting solely
such printed matter as merely identifies PRAGMA amd the Trust as
clients of MGF. MGF will submit printed matter requiring approval
to PRAGMA and/or the Trust in draft form, allowing sufficient time
for review by PRAGMA and/or the Trust and its counsel prior to
any deadline for printing.
11. EQUIPMENT FAILURES.
In the event of equipment failures beyond MGF's
control, MGF shall take all steps necessary to minimize service
interruptions but shall have no liability with respect thereto.
MGF shall endeavor to enter into one or more agreements making
provision for emergency use of electronic data processing
equipment to the extent appropriate equipment is available.
12. INDEMNIFICATION OF MGF.
MGF may rely on information reasonably believed by it
to be accurate and reliable. Except as may otherwise be required
by the 1940 Act and the rules thereunder, neither MGF nor its
shareholders, officers, directors, employees, agents, control
persons or affiliates of any thereof shall be subject to any
liability for, or any damages, expenses or losses incurred by the
Trust or PRAGMA in connection with, any error of judgment,
mistake of law, any act or omission connected with or arising out
of any services rendered under or payments made pursuant to this
Agreement or any other matter to which this Agreement relates,
except by reason of willful misfeasance, bad faith or gross
negligence on the part of any such persons in the performance of
the duties of MGF under this Agreement or by reason of reckless
disregard by any of such persons of the obligations and duties of
MGF under this Agreement.
Any person, even though also a director, officer,
employee, shareholder or agent of MGF, or any of its affiliates,
who may be or become an officer, trustee, employee or agent of
the Trust, shall be deemed, when rendering services to the Trust
or acting on any business of the Trust, to be rendering such
services to or acting solely as an officer, trustee, employee or
agent of the Trust and not as a director, officer, employee,
shareholder or agent of or one under the control or direction of
MGF or any of its affiliates, even though paid by one of those
entities.
Notwithstanding any other provision of this Agreement,
the Trust and PRAGMA shall each indemnify and hold harmless MGF,
its directors, officers, employees, shareholders, agents, control
persons and affiliates, from and against any and all claims,
demands, expenses and liabilities (whether with or without basis
in fact or law) of any and every nature which MGF may sustain or
incur or which may be asserted against MGF by any person, by
reason of, or as a result of: (i) any action taken or omitted to
be taken by MGF in good faith in reliance upon any certificate,
instrument, order or stock certificate believed by it to be
genuine and to be signed, countersigned or executed by any duly
authorized person, upon the oral instructions or written
instructions of an authorized person of the Trust or upon the
opinion of legal counsel for the Trust or its own counsel; or
(ii) any action taken or omitted to be taken by MGF in connection
with its appointment in good faith in reliance upon any law, act,
regulation or interpretation of the same even though the same may
thereafter have been altered, changed, amended or repealed.
However, indemnification under this subparagraph shall not apply
to actions or omissions of MGF or its directors, officers,
employees, shareholders or agents in cases of its or their own
gross negligence, willful misconduct, bad faith, or reckless
disregard of its or their own duties hereunder.
13. TERMINATION.
The provisions of this Agreement shall be effective on
the date first above written, shall continue in effect for two
years from that date and shall continue in force from year to
year thereafter, but only so long as such continuance is approved
(1) by MGF, (2) by PRAGMA, (3) by vote, cast in person at a
meeting called for the purpose, of a majority of the Trust's
trustees who are not parties to this Agreement or interested
persons (as defined in the 0000 Xxx) of any such party, and (4)
by vote of a majority of the Trust's Board of Trustees or a
majority of the Trust's outstanding voting securities.
PAGE
Any party may terminate this Agreement on any date by
giving the other parties at least sixty (60) days' prior written
notice of such termination specifying the date fixed therefor.
Upon termination of this Agreement, PRAGMA shall pay to MGF such
compensation as may be due as of the date of such termination.
In the event that in connection with the termination of
this Agreement a successor to any of MGF's duties or
responsibilities under this Agreement is designated by the Trust
or by PRAGMA by written notice to MGF, MGF shall, promptly upon
such termination and at the expense of PRAGMA, transfer all
records maintained by MGF under this Agreement and shall
cooperate in the transfer of such duties and responsibilities,
including provision for assistance from MGF's cognizant personnel
in the establishment of books, records and other data by such
successor.
14. SERVICES FOR OTHERS.
Nothing in this Agreement shall prevent MGF or any
affiliated person (as defined in the 0000 Xxx) of MGF from
providing services for any other person, firm or corporation
(including other investment companies); provided, however, that
MGF expressly represents that it will undertake no activities
which, in its judgment, will adversely affect the performance of
its obligations under this Agreement.
15. REPRESENTATIONS OF MGF.
MGF represents and warrants that no legal proceedings or regulatory
proceedings or regulatory investigations are pending against MGF which could
have a material impact on the operations or financial condition of MGF. MGF
also represents warrants that it currently maintains all registrations and
meets all capital requirements under applicable laws in order to provide the
services contemplated herein, and will continue to do so for the duration of
this Agreement. MGF agrees that it will notify PRAGMA and the Trust
regulatory investigation or enforcement action that could have a material
impact on the operations or financial condition of MGF. MGF further agrees
that it will immediately notify PRAGMA and the TRUST of any material change in
the ownership or control of MGF.
16. MISCELLANEOUS.
The captions in this Agreement are included for
convenience of reference only and in no way define or limit any
of the provisions hereof or otherwise affect their construction
or effect.
17. LIMITATION OF LIABILITY.
The term "PRAGMA Investment Trust" means and refers to
the trustees from time to time serving under the Trust's
Agreement and Declaration of Trust as the same may subsequently
thereto have been, or subsequently hereto may be, amended. It is
expressly agreed that the obligations of the Trust hereunder
shall not be binding upon any of the trustees, shareholders,
nominees, officers, agents or employees of the Trust, personally,
but bind only the trust property of the Trust. The execution and
delivery of this Agreement has been authorized by the trustees of
the Trust and signed by an officer of the Trust acting as such,
and neither such authorization by such 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 trust property
of the Trust.
18. SEVERABILITY.
In the event any provision of this Agreement is
determined to be void or unenforceable, such determination shall
not affect the remainder of this Agreement, which shall continue
to be in force.
19. QUESTIONS OF INTERPRETATION.
This Agreement shall be governed by the laws of the
State of Ohio. Any question of interpretation of any term or
provision of this Agreement having a counterpart in or otherwise
derived from a term or provision of the 1940 Act shall be
resolved by reference to such term or provision of the 1940 Act
and to interpretations thereof, if any, by the United States
Courts or in the absence of any controlling decision of any such
court, by rules, regulations or orders of the Securities and
Exchange Commission issued pursuant to said 1940 Act. In
addition, where the effect of a requirement of the 1940 Act,
reflected in any provision of this Agreement, is revised by rule,
regulation or order of the Securities and Exchange Commission,
such provision shall be deemed to incorporate the effect of such
rule, regulation or order.
20. NOTICES.
Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to the other party
at such address as such other party may designate for the receipt
of such notice. Until further notice to the other party, it is
agreed that the address of the Trust and of PRAGMA for this
purpose shall be 0000 Xxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx,
Xxxxx 00000 and that the address of MGF for this purpose shall be
000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxx 00000.
21. BINDING EFFECT.
Each of the undersigned expressly warrants and
represents that he has the full power and authority to sign this
Agreement on behalf of the party indicated, and that his
signature will operate to bind the party indicated to the
foregoing terms.
22. COUNTERPARTS.
This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
23. FORCE MAJEURE.
If MGF shall be delayed in its performance of services
or prevented entirely or in part from performing services due to
causes or events beyond its control, including and without
limitation, acts of God, interruption of power or other utility,
transportation or communication services, acts of civil or
military authority, sabotages, national emergencies, explosion,
flood, accident, earthquake or other catastrophe, fire, strike or
other labor problems, legal action, present or future law,
governmental order, rule or regulation, or shortages of suitable
parts, materials, labor or transportation, such delay or non-
performance shall be excused and a reasonable time for
performance in connection with this Agreement shall be extended
to include the period of such delay or non-performance.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the day and year first above
written.
PRAGMA INVESTMENT TRUST
By:___________________________
Its: President
PRAGMA, INC.
By:_____________________________
Its: President
MGF SERVICE CORP.
By:___________________________
Its: President
PAGE
Schedule A
Compensation
For Fund Accounting and Portfolio Pricing:
PRAGMA will pay MGF a monthly fee with respect to each
series of the Trust, according to the average net assets of such
series during such month, as follows:
Monthly Fees Average Net Assets
------------ ------------------
$2,000 $0 - $ 50,000,000
$2,500 $50,000,000 - $100,000,000
$3,000 $100,000,000 - $200,000,000
$4,000 $Over $200,000,000
