EX-99.23.h(i)
ADMINISTRATIVE SERVICES AGREEMENT
AGREEMENT dated as of August 1, 2000, between The BSG Funds (the "Trust"),
an Ohio business trust, and Diamond Hill Capital Management, Inc. ("DHCM"), 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 (the
"Act"); and
WHEREAS, the Trust has engaged DHCM to act as investment adviser to the
Diamond Hill Focus Fund (the "Fund"); and
WHEREAS, the Trust has engaged Mutual Funds Service Co. to perform certain
administrative services for the Fund; and
WHEREAS, the Trust wishes to retain DHCM to perform certain additional
administrative services as hereinafter described on behalf of the Fund; and
WHEREAS, DHCM wishes to provide such services to the Fund under the
conditions set forth below;
NOW, THEREFORE, in consideration of the promises and mutual covenants
contained in this Agreement, the Trust and DHCM agree as follows:
1. EMPLOYMENT. The Trust, being duly authorized, hereby employs DHCM to
perform the services described in this Agreement. DHCM shall perform such
administrative services upon the terms and conditions hereinafter set forth. Any
administrative services undertaken by DHCM pursuant to this Agreement, as well
as any other activities undertaken by DHCM on behalf of the Trust pursuant
hereto, shall at all times be subject to any directives of the Board of Trustees
of the Trust.
2. TRUST ADMINISTRATION. DHCM shall give the Trust the benefit of its best
judgment, efforts and facilities in rendering its administrative services. DHCM
shall at all times conform to: (i) all applicable provisions of the Act and any
rules and regulations adopted thereunder, (ii) the provisions of the
Registration Statement of the Trust under the Securities Act of 1933 and the Act
as amended from time to time, (iii) the provisions of the Agreement and
Declaration of Trust and the By-Laws of the Trust, and (iv) any other applicable
provisions of state and federal law.
Subject to the direction and control of the Trust, DHCM shall supervise the
Fund'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
parties under agreement with the Trust, DHCM shall supply (i) non-investment
related statistical and research data, (ii) internal regulatory compliance
services, and (iii) executive and administrative services. DHCM shall supervise
the preparation of (i) tax returns, (ii) reports to shareholders of the Fund,
(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 Fund's
registration statement, and (iv) necessary materials for meetings of the Trust's
Board of Trustees. DHCM shall provide personnel to serve as officers of the
Trust if so elected by the Board of Trustees. Executive and administrative
services include, but are not limited to, the coordination of all third parties
furnishing services to the Fund, review of the books and records of the Fund
maintained by such third parties, and the review and submission to the officers
of the Fund for their approval, of invoices or other requests for payment of
Fund expenses; and such other action with respect to the Fund as may be
necessary in the opinion of DHCM to perform its duties hereunder.
3. ALLOCATION OF CHARGES AND EXPENSES. DHCM will pay all operating expenses
of the Fund not specifically assumed by the Fund, including without limitation
the compensation and expenses of any employees of the Fund and of any other
persons rendering any services to the Fund; clerical and shareholder service
staff salaries; office space and other office expenses; fees and expenses
incurred by the Fund in connection with membership in investment company
organizations; legal, auditing and accounting expenses; expenses of registering
shares under federal and state securities laws, including expenses incurred by
the Fund in connection with the organization and initial registration of shares
of the Fund; insurance expenses; fees and expenses of the custodian, transfer
agent, dividend disbursing agent, shareholder service agent, plan agent,
administrator (excluding fees and expenses payable to DHCM under this
Agreement), accounting and pricing services agent and underwriter of the Fund;
expenses, including clerical expenses, of issue, sale, redemption or repurchase
of shares of the Fund; the cost of preparing and distributing reports and
notices to shareholders, the cost of printing or preparing prospectuses and
statements of additional information for delivery to the Fund's current
shareholders; the cost of printing or preparing stock certificates or any other
documents, statements or reports to shareholders; expenses of shareholders'
meetings and proxy solicitations; and all other operating expenses not
specifically assumed by the Fund.
The Fund will pay all brokerage fees and commissions, taxes, borrowing
costs (such as (a) interest and (b) dividend expenses on securities sold short),
fees and expenses of the non-interested person trustees and such extraordinary
or non-recurring expenses as may arise, including litigation to which the Fund
may be a party and indemnification of the Trust's trustees and officers with
respect thereto. The Fund will also pay the fees paid pursuant to its Management
Agreement between DHCM and the Trust, and all expenses which it is authorized to
pay pursuant to Rule 12b-1 under the 1940 Act. DHCM may obtain reimbursement
from the Fund, at such time or times as DHCM may determine in its sole
discretion, for any of the expenses advanced by DHCM, which the Fund is
obligated to pay, and such reimbursement shall not be considered to be part of
DHCM's compensation pursuant to this Agreement.
4. RECORD KEEPING AND OTHER INFORMATION. DHCM 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 the
Trust. Where applicable, such records shall be maintained by DHCM for the
periods and in the places required by Rule 31a-2 under the Investment Company
Act of 1940.
5. AUDIT, INSPECTION AND VISITATION. DHCM shall make available to 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 the Trust or any regulatory agency having authority over the
Trust.
6. COMPENSATION. For the performance of DHCM's obligations under this
Agreement, the Fund shall pay DHCM, on the first business day following the end
of each month, a fee at an annual rate of 0.50% of the Fund's average daily net
assets.
The average value of the daily net assets of the Fund shall be determined
pursuant to the applicable provisions of the Declaration of Trust of the Trust
or a resolution of the Board, if required. If, pursuant to such provisions, the
determination of net asset value of the Fund is suspended for any particular
business
day, then for the purposes of this paragraph, the value of the net assets of the
Fund as last determined shall be deemed to be the value of the net assets as of
the close of the business day, or as of such other time as the value of the
Fund's net assets may lawfully be determined, on that day. If the determination
of the net asset value of the Fund has been suspended for a period including
such month, DHCM's compensation payable at the end of such month shall be
computed on the basis of the value of the net assets of the Fund as last
determined (whether during or prior to such month).
7. LIMITATION OF LIABILITY. DHCM may rely on information reasonably
believed by it to be accurate and reliable. Except as may otherwise be required
by the Act or the rules thereunder, neither DHCM nor its shareholders, officers,
directors, employees, agents, control persons or affiliates of any thereof
(collectively, the "DHCM Employees") shall be subject to any liability for, or
any damages, expenses or losses incurred by the Trust in connection with, any
error of judgment, mistake of law, any act or omission in connection 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 DHCM under this Agreement or by
reason of reckless disregard by any of such persons of the obligations and
duties of DHCM under this Agreement. Any person, even though also a director,
officer, employee, shareholder or agent of DHCM, 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 (other
than services or business in connection with DHCM's duties hereunder), to be
rendering such services to or acting solely for the Trust and not as a director,
officer, employee, shareholder or agent, or one under the control or direction
of DHCM, even though paid by it.
8. INDEMNIFICATION OF DHCM. Subject to and except as otherwise provided in
the Securities Act of 1933, as amended, and the Act, the Trust shall indemnify
DHCM and each DHCM Employee (hereinafter collectively referred to as a "Covered
Person") against all liabilities, including but not limited to amounts paid in
satisfaction of judgments, in compromise or as fines and penalties, and
expenses, including reasonable accountants' and counsel fees, incurred by any
Covered Person in connection with the defense or disposition of any action, suit
or other proceeding, whether civil or criminal, before any court or
administrative or legislative body, in which such Covered Person may be or may
have been involved as a party or otherwise or with which such person may be or
may have been threatened, while serving as the administrator for the Trust or as
a DHCM Employee, or, thereafter, by reason of being or having been the
administrator for the Trust or a DHCM Employee, including but not limited to
liabilities arising due to any misrepresentation or misstatement in the Trust's
prospectus, other regulatory filings, and amendments thereto, or in other
documents originating from the Trust. In no case shall a Covered Person be
indemnified against any liability to which such Covered Person would otherwise
be subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties of such Covered Person.
9. SERVICES FOR OTHERS. Nothing in this Agreement shall prevent DHCM or any
affiliated person of DHCM from providing services for any other person, firm or
corporation, including other investment companies; provided, however, that DHCM
expressly represents that it will undertake no activities which, in its
judgment, will adversely affect the performance of its obligations to the Trust
under this Agreement.
10. COMPLIANCE WITH THE ACT. The parties hereto acknowledge and agree that
nothing contained herein shall be construed to require DHCM to perform any
services for any series of the Trust which services could cause DHCM to be
deemed an "investment adviser" of the Fund within the meaning of Section
2(a)(20) of the Act or to supersede or contravene the Prospectus or Statement of
Additional Information of any series of the Trust or any provisions of the Act
and the rules thereunder.
11. RENEWAL AND TERMINATION. This Agreement shall become effective on the
date first above written and shall remain in force for a period of one (1) year
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 DHCM, 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 Fund's outstanding voting
securities. This Agreement may be terminated without the payment of any penalty
by either party upon sixty (60) days' written notice to the other party. Upon
the termination of this Agreement, the Trust shall pay DHCM such compensation as
may be payable for the period prior to the effective date of such termination.
12. THE TRUST. The term "BSG Funds" 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, agent 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.
13. MISCELLANEOUS. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof. This Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of Ohio. The captions in 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.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
day and year first above written.
BSG FUNDS
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Its: President
DIAMOND HILL CAPITAL MANAGEMENT, INC.
By: /S/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
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Its: President
