EX-23D(2)
INVESTMENT SUB-ADVISOR AGREEMENT
AGREEMENT, effective as of the 1st day of April, 2002 between SBG Capital
Management, Inc. (the "Fund Manager") on behalf of the Montecito Fund (the
"Fund") and Ameristock Corporation (the "Sub-Advisor").
WHEREAS, the Fund Manager has entered into an investment advisory agreement
with The Santa Xxxxxxx Group of Mutual Funds, Inc. (the "Company").
WHEREAS, the Company is a Maryland corporation authorized to issue shares
in series and is registered as an open-end management investment company under
the Investment Company Act of 1940, as amended (the "1940 Act"), and the Fund is
one of the series of the Company;
WHEREAS, the Sub-Advisor is registered as an investment advisor under the
Investment Advisors Act of 1940, as amended ( "Advisors Act");
WHEREAS, the Fund Manager wishes to retain the Sub-Advisor to render
investment advisory services to the Fund, and the Sub-Advisor is willing to
furnish such services to the Fund;
NOW THEREFORE, in consideration of the promises and mutual covenants herein
contained, it is agreed between the Fund Manager and the Sub-Advisor as follows:
APPOINTMENT.
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The Fund Manager hereby appoints the Sub-Advisor to act as Investment
Sub-Advisor to the Fund for the periods and on the terms set forth herein. The
Sub-Advisor accepts the appointment and agrees to furnish the services set forth
herein for the compensation provided herein.
SERVICES AS INVESTMENT SUB-ADVISOR.
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Subject to the general supervision and direction of the Board of Directors
of the Company, the Sub-Advisor will (a) manage the fund in accordance with the
Fund's investment objective and policies as stated in the Fund's Prospectus and
the Statement of Additional Information filed with the Securities and Exchange
Commission, as they may be amended from time to time; (b) make investment
decisions for the Fund; (c) place purchase and sale orders on behalf of the
Fund; and, (d) employ professional portfolio managers and securities analysts to
provide research services to the Fund. In providing those services, the
Sub-Advisor will provide the Fund with ongoing research, analysis, advice, and
judgments regarding individual investments, general economic conditions and
trends and long-range investment policy. In addition, the Sub-Advisor will
furnish the Fund with whatever statistical information the Fund may reasonably
request with respect to the securities that the Fund may hold or contemplate
purchasing.
The Sub-Advisor further agrees that, in performing it's duties hereunder,
it will:
comply with the 1940 Act and all rules and regulations thereunder, the Advisor's
Act, the Internal Revenue Code of 1986, as amended (the "Code") and all other
applicable federal and state laws and regulations, and with any applicable
procedures adopted by the Directors;
use reasonable efforts to manage the Fund so that it will qualify, and continue
to qualify, as a regulated investment company under Subchapter M of the Code and
regulations issued thereunder;
maintain books and records with respect to the Fund's securities transactions,
render to the Board of Directors of the Company such periodic and special
reports as the Board may reasonably request, and keep the Directors informed of
developments materially affecting the Fund's portfolio;
make available to the Fund's administrator, and the Company, promptly upon their
request, such copies of its investment records and ledgers with respect to the
Fund as may be required to assist the administrator and the Company in their
compliance with applicable laws and regulations. The Sub-Advisor will furnish
the Directors with such periodic and special reports regarding the Fund as they
may reasonably request;
immediately notify the Company in the event that the Sub-Advisor or any of its
affiliates: (1) becomes aware that it is subject to a statutory disqualification
that prevents the Sub-Advisor from serving as an investment Sub-Advisor pursuant
to this Agreement; or (2) becomes aware that it is the subject of an
administrative proceeding or enforcement action by the Securities and Exchange
Commission or other regulatory authority. The Sub-Advisor further agrees to
notify the Company: (1) immediately of any material fact known to the
Sub-Advisor respecting or relating to the Sub-Advisor that is not contained in
the Company's Registration Statement regarding the Fund, or any amendment or
supplement thereto, but that is required to be disclosed therein, and of any
statement contained therein that becomes untrue in any material respect; and (2)
sufficiently in advance of any change of control, as
defined in Section 2(a)(9) of the 1940 Act, as will enable the Company to
consider whether an assignment, as defined in Section 2(a)(4) of the 1940 Act,
would occur.
DOCUMENTS.
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The Fund Manager has delivered properly certified or authenticated copies
of each of the following documents to the Sub-Advisor and will deliver to it all
future amendments and supplements thereto, if any:
certified resolution of the Board of Directors of the Company authorizing the
appointment of the Sub-Advisor and approving the form of this Agreement;
The Registration Statement as filed with the Securities and Exchange Commission
and any amendments thereto; Exhibits, powers of attorneys, certificates and any
and all other documents relating to or filed in connection with the Registration
Statement described above.
The Fund Manager shall promptly provide to the Sub-Advisor copies of all
advertising materials, scripts and other sales literature related to the Fund.
BROKERAGE.
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In selecting brokers or dealers to execute transactions on behalf of the
Fund, the Sub-Advisor will use its best efforts to seek the best overall terms
available. In assessing the best overall terms available for any Fund
transaction, the Sub-Advisor will consider all factors it deems relevant,
including, but not limited to, the breadth of the market in the security, the
price of the security, the financial condition and execution capability of the
broker or dealer and the reasonableness of the commission, if any, for the
specific transaction and on a continuing basis. In selecting brokers or dealers
to execute a particular transaction, and in evaluating the best overall terms
available, the Sub-Advisor is authorized to consider the brokerage and research
services (as those terms are defined in section 28(e) of the Securities and
Exchange Act of 1934, as amended ( the "1934 Act") provided to the Fund and/or
other accounts over which the Sub-Advisor or its affiliates exercise investment
discretion. In accordance with Section 11(a) of the 1934 Act and Rule 11a2-2(T)
thereunder, and subject to any other applicable laws and regulations, the
Sub-Advisor and its affiliates, and the Fund Manager and its affiliates, are
authorized to effect portfolio transactions for the Fund and to retain brokerage
commissions on such transactions.
RECORDS.
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The Sub-Advisor agrees to maintain and to preserve for the periods
prescribed under the 1940 Act any such records as are required to be maintained
by the Sub-Advisor with respect to the Fund by the 1940 Act. The Sub-Advisor
further agrees that all records which it maintains for the Fund are the property
of the Fund and it will promptly surrender any of such records upon request.
STANDARD OF CARE.
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The Sub-Advisor shall exercise its best judgment in rendering the services
under this Agreement. The Sub-Advisor shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Fund or the Fund's
shareholders in connection with the matters to which this Agreement relates,
provided that nothing herein shall be deemed to protect or purport to protect
the Sub-Advisor against any liability to the Fund or to its shareholders to
which the Sub-Advisor would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence on its part in the performance of its
duties or by reason of the Sub-Advisor's reckless disregard of its obligations
and duties under this Agreement. As used in this Section 6, the term
"Sub-Advisor" shall include any officers, directors, employees, or other
affiliates of the Sub-Advisor performing services with respect to the Fund.
COMPENSATION.
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In consideration of the services rendered pursuant to this Agreement, the
Fund Manager will pay the Sub-Advisor a fee at an annual rate equal to 0.25% of
the average daily net assets of the Fund on the first $100 million in Fund
assets, and 0.20% of the average daily net assets of the Fund in excess of $100
million in Fund assets. This fee shall be computed and accrued daily and payable
quarterly. For the purpose of determining fees payable to the Sub-Advisor, the
value of the Fund's average daily net assets shall be computed at the times and
in the manner specified in the Fund's Prospectus or Statement of Additional
Information.
EXPENSES.
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The Sub-Advisor will bear all of its direct expenses incurred in connection
with the performance of its services under this Agreement. The cost of
securities and investments purchased for the Fund (including taxes, borrowing
costs, brokerage fees and commissions and other transaction costs, if any) will
not be considered an expense of the Sub-Advisor and will be paid by the Fund.
SERVICES TO OTHER COMPANIES OR ACCOUNTS.
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The investment advisory services of the Sub-Advisor to the Fund under this
Agreement are not to be deemed exclusive, and the Sub-Advisor, or any affiliate
thereof, shall be free to render similar services to other investment companies
and other clients (whether or not their investment objectives and policies are
similar to those of the Fund) and to engage in other activities, so long as its
services hereunder are not impaired thereby.
DURATION AND TERMINATION.
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This Agreement shall become effective on the date first written above,
and unless sooner terminated as provided herein, for two years from such date
and shall continue from year to year thereafter, provided each continuance is
specifically approved at least annually by the vote of a majority of the Board
of Directors of the Company or, a vote of a "majority" (as defined in the 1940
act) of the Fund's outstanding voting securities, provided that in either event
the continuance is also approved by a majority of the Board of Directors who are
not "interested persons" (as defined in the 0000 Xxx) of any party to this
Agreement, by vote cast in person at a meeting called for the purpose of voting
on such approval. This Agreement is terminable, without penalty, on sixty (60)
days written notice by the Board of Directors of the Company or by vote of
holders of a majority of the Fund's shares or upon ninety (90) days written
notice by the Sub-Advisor. This Agreement will also terminate automatically in
the event of its "assignment" (as defined in the 1940 Act).
AMENDMENT.
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No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought, and no amendment of this Agreement shall be effective until approved by
an affirmative vote of (i) a majority of the outstanding voting securities of
the Fund, and (ii) a majority of the Directors of the Company, including a
majority of Directors who are not interested persons of any party to this
Agreement, cast in person at a meeting called for the purpose of voting on such
approval, if such approval is required by applicable law.
USE OF NAME.
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It is understood that the name of Ameristock Corporation. or any derivative
thereof or logo associated with that name is the valuable property of the
Sub-Advisor and its affiliates, and that the Fund has the right to use such name
(or derivative or logo) only so long as this Agreement shall continue with
respect to the Fund. Upon termination of this Agreement, the Fund shall
forthwith cease to use such name (or derivative or logo) and shall promptly
amend its Articles of Incorporation to change its name to comply herewith.
MISCELLANEOUS.
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This Agreement constitutes the full and complete agreement of the parties hereto
with respect to the subject matter hereof. Titles or captions of Sections
contained in this Agreement are inserted only as a matter of convenience and for
reference, and in no way define, limit, extend or describe the scope of this
Agreement or the intent of any provisions thereof.
This Agreement may be executed in several counterparts, all of which together
shall for all purposes constitute one agreement, binding on all the Parties.
This Agreement and the rights and obligations of the parties hereunder shall be
governed by, and interpreted, construed and enforced in accordance with the laws
of the State of California.
If any provision of this Agreement or the application thereof to any party or
circumstances shall be determined by any court of competent jurisdiction to be
invalid or unenforceable to any extent, the remainder of this Agreement or the
application of such provision to such person or circumstance, other than those
as to which it is so determined to be invalid or unenforceable, shall not be
affected thereby, and each provision hereof shall be valid and shall be enforced
to the fullest extent permitted by law.
Notices of any kind to be given to the Sub-Advisor by the Company shall be in
writing and shall be duly given if mailed or delivered to the Sub-Advisor at:
P.O. Box___________________, or at such other address or to such individual as
shall be specified by the Sub-Advisor to the Company. Notices of any kind to be
given to the Company by the Sub-Advisor shall be in writing and shall be duly
given if mailed or delivered to ___________________ , or at such other address
or to such individual as shall be specified by the Company to the Sub-Advisor.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below on the day and year first above
written.
SBG CAPITAL MANAGEMENT, INC.
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By: Xxxx X. Xxxxx
Its: President
AMERISTOCK CORPORATION
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By:
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Its:
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