ADMINISTRATIVE SERVICES AGREEMENT
AGREEMENT dated as of , 1996 between PRAGMA
INVESTMENT TRUST (the "Trust"), an Ohio business trust, PRAGMA,
INC. ("PRAGMA"), a Texas corporation, and MGF SERVICE CORP.
("MGF"), an Ohio corporation.
WHEREAS, the Trust has been organized to operate as an
open-end management investment company registered under the
Investment Company Act of 1940; 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 wishes to avail itself of the information,
advice, assistance and facilities of MGF to perform on behalf of
the Trust the services as hereinafter described; and
WHEREAS, MGF wishes to provide such services to the Trust
under the conditions set forth below;
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained in this Agreement, the Trust, PRAGMA and MGF
agree as follows:
1. Employment. PRAGMA, being duly authorized, hereby
employs MGF to perform those services described in this Agreement.
MGF shall perform the obligations thereof upon the terms and
conditions hereinafter set forth.
2. Trust Administration. Subject to the direction and
control of PRAGMA and the Trust, MGF shall supervise the Trust's
business affairs not otherwise supervised by other agents of the
Trust. To the extent not otherwise the primary responsibility of,
or provided by, other agents of PRAGMA or the Trust, MGF shall
supply (i) non-investment related statistical and research data,
(ii) internal regulatory compliance services, and (iii) executive
and administrative services. MGF shall supervise the preparation
of (i) tax returns, (ii) reports to shareholders of
the Trust, (iii) reports to and filings with the Securities and
Exchange Commission, state securities commissions and Blue Sky
authorities including preliminary and definitive proxy materials
and post-effective amendments to the Trust's registration
PAGE
statement, and (iv) necessary materials for meetings of the
Trust's Board of Trustees unless prepared by other parties under
agreement with PRAGMA or the Trust. MGF shall provide personnel
to serve as officers of the Trust if so elected by the Board of
Trustees; provided, however, that PRAGMA shall reimburse MGF for
the expenses incurred by such personnel in attending Board of
Trustees' meetings and shareholders' meetings of the Trust.
3. Record Keeping and Other Information. MGF shall create
and maintain all necessary records in accordance with all
applicable laws, rules and regulations, including but not limited
to records required by Section 31(a) of the Investment Company Act
of 1940 and the rules thereunder, as the same may be amended from
time to time, pertaining to the various functions performed by it
and not otherwise created and maintained by another party pursuant
to contract with PRAGMA or the Trust. Where applicable, such
records shall be maintained by MGF for the periods and in the
places required by Rule 31a-2 under the Investment Company Act of
1940.
4. Audit, Inspection and Visitation. MGF shall make
available to PRAGMA and the Trust during regular business hours
all records and other data created and maintained pursuant to the
foregoing provisions of this Agreement for reasonable audit and
inspection by PRAGMA, and the Trust or their agents, or any
regulatory agency having authority over the Trust.
5. Compensation. For the performance of MGF's obligations
under this Agreement, PRAGMA shall pay MGF, on the first business
day following the end of each month, a fee with respect to each
series of the Trust equal to the annual rate of .15% of the
average value during such month of daily net assets up to
$25,000,000; .125% of such assets from $25,000,000 to $50,000,000;
and .10% of such assets in excess of $50,000,000; provided,
however, that the minimum fee shall be $1,000 per month for each
series. MGF shall not be required to reimburse the Trust or
PRAGMA for (or have deducted from its fees) any expenses in excess
of expense limitations imposed by certain state securities
commissions having jurisdiction over the Trust.
6. 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.
7. Services for Others. Nothing in this Agreement shall
prevent MGF or any affiliated person 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.
8. Compliance with Government 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 Investment Company Act of 1940 or to supersede or
contravene the Prospectus or Statement of Additional Information
of the Trust or any provisions of the Investment Company Act of
1940 and the rules thereunder.
9. Renewal and Termination. This Agreement shall become
effective on the date first above written and shall remain in
force for a period of two (2) years from such date, and from year
to year thereafter, but only so long as such continuance is
specifically approved at least annually by the vote of a majority
of the Trustees who are not interested persons of the Trust or
MGF, cast in person at a meeting called for the purpose of voting
on such approval and by a vote of the Board of Trustees or of a
majority of the Trust's outstanding voting securities. This
Agreement may be terminated without the payment of any penalty by
any party upon sixty (60) days' written notice to the other
parties. Upon the termination of this Agreement, PRAGMA shall pay
MGF such compensation as may be payable for the period prior to
the effective date of such termination.
10. 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 have 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.
11. 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.
12. 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.
13. Representations Of MGF. MGF represents and warrants
that no legal proceedings or regulatory investigations are pending
against MGF which could have a material impact on MGF. MGF also
represents and warrants that it currently maintains all registrations
and meets all capital requirements under applicabile 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 immediately should it become a party to any legal
proceeding, 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.
14. 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.
15. 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.
16. 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.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement 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
