ADMINISTRATIVE SERVICES AGREEMENT
AGREEMENT dated as of February 28, 1997 between PRAGMA
INVESTMENT TRUST (the "Trust"), an Ohio business trust, PRAGMA,
INC. ("PRAGMA"), a Texas corporation, and COUNTRYWIDE FUND
SERVICES, INC. ("Countrywide"), 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 Countrywide to perform on behalf of the Trust the
services as hereinafter described; and
WHEREAS, Countrywide 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 Countrywide agree as follows:
1. EMPLOYMENT. PRAGMA, being duly authorized, hereby employs
Countrywide to perform those services described in this Agreement.
Countrywide 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, Countrywide 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, Countrywide shall supply (i) non-investment related statistical and
research data, (ii) internal regulatory compliance services, and (iii) executive
and administrative services. Countrywide 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 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. Countrywide
shall provide personnel to serve as officers of the Trust if so elected by the
Board of Trustees; provided, however, that PRAGMA shall reimburse Countrywide
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. Countrywide 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
Countrywide for the periods and in the places required by Rule 31a-2 under the
Investment Company Act of 1940.
4. AUDIT, INSPECTION AND VISITATION. Countrywide 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 Countrywide's obligations under
this Agreement, PRAGMA shall pay Countrywide, 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.
Countrywide 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 COUNTRYWIDE. Countrywide 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 Countrywide 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
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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 Countrywide under this Agreement or
by reason of reckless disregard by any of such persons of the obligations and
duties of Countrywide under this Agreement.
Any person, even though also a director, officer, employee,
shareholder or agent of Countrywide, 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 Countrywide 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 Countrywide, 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 Countrywide may sustain or incur or which may be asserted against
Countrywide by any person, by reason of, or as a result of: (i) any action taken
or omitted to be taken by Countrywide 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 Countrywide 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 Countrywide 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
Countrywide or any affiliated person of Countrywide from providing services for
any other person, firm or corporation, including other investment companies;
provided, however, that Countrywide expressly represents that it will undertake
no activities which, in its judgment, will adversely affect the performance of
its obligations under this Agreement.
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8. COMPLIANCE WITH GOVERNMENT RULES AND REGULATIONS. The parties hereto
acknowledge and agree that nothing contained herein shall be construed to
require Countrywide to perform any services for PRAGMA or the Trust which
services could cause Countrywide 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 Countrywide, 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 Countrywide 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,
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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 COUNTRYWIDE. Countrywide represents and warrants
that no legal proceedings or regulatory investigations are pending against
Countrywide which could have a material impact on the operations or financial
condition of Countrywide. Countrywide also represents and 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. Countrywide 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 Countrywide.
Countrywide further agrees that it will immediately notify PRAGMA and the Trust
of any material change in the ownership or control of Countrywide.
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 Countrywide 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.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first above written.
PRAGMA INVESTMENT TRUST
By:/S/ XXXX X. XXXXX III
Its: President
PRAGMA, INC.
By:/S/ XXXX X. XXXXX III
Its: President
COUNTRYWIDE FUND SERVICES, INC.
By:/S/ XXXXXX X. XXXXXX
Its: President
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