SUBADVISORY AGREEMENT
THIS AGREEMENT is between Summit Investment Partners,
Inc. (the "Adviser") and Xxxxxxx Xxxxxx Investments, Inc.
(the "Subadviser").
W I T N E S S E T H
WHEREAS, Summit Mutual Funds, Inc. (the "Company") is a
corporation organized under the laws of the state of
Maryland with one or more series of shares and is
registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the
"1940 Act");
WHEREAS, Adviser and Subadviser each is an investment
adviser registered under the Investment Advisers Act of
1940, as amended (the "Advisers Act");
WHEREAS, the Board of Directors of the Company (the
"Directors") have engaged Adviser to act as the
investment manager for the Summit Money Market Fund (the
"Fund"), one series of the Company, under the terms of an
amendment to the investment advisory agreement with the
Fund dated as of May 8, 2000 (the "Advisory Agreement");
and
WHEREAS, Adviser has engaged Subadviser and the Directors
have approved the engagement of Subadviser to provide
investment advice and other investment services set forth
below.
NOW, THEREFORE, Adviser and Subadviser agree as follows:
1. Investment Services. Subadviser will furnish
Adviser with investment advisory services conforming to
the investment objective, investment policies and
restrictions of the Fund as set forth in the Prospectus
("Prospectus") and Statement of Additional Information
("SAI") included in the Registration Statement of the
Company, as in effect from time to time (together, the
"Registration Statement") and in accordance with the
Articles of Incorporation and By-Laws of the Company.
Adviser will promptly furnish Subadviser with any
amendments to such documents. Such amendments will not
be deemed effective with respect to Subadviser until
Subadviser's receipt thereof.
Subject to the supervision and control of Adviser,
which is in turn subject to the supervision and control
of the Directors, Subadviser in its discretion will
determine which issuers and securities will be purchased,
held, sold or exchanged by the Fund or otherwise
represented in the Fund's investment portfolio from time
to time and will place orders with and give instructions
to brokers, dealers and others for all such transactions
and cause such transactions to be executed. The Fund
will be maintained by a custodian bank (the "Custodian")
and Adviser will authorize the Custodian to honor orders
and instructions by employees of Subadviser authorized by
Subadviser to settle transactions in respect of the Fund.
No assets may be withdrawn from the Fund other than for
settlement of transactions on behalf of the Fund except
upon the written authorization of appropriate officers of
the Company who shall have been certified as such by
proper authorities of the Company prior to the
withdrawal.
Subadviser shall not be responsible for the
provision of administrative, bookkeeping or accounting
services to the Fund except as specifically provided
herein, as required by the 1940 Act or the Advisers Act
or as may be necessary for Subadviser to supply to
Adviser, the Fund or the Fund's shareholders the
information required to be provided by Subadviser
hereunder. In compliance with the requirements of Rule
31a-3 under the 1940 Act, Subadviser agrees that all
records it maintains for the Fund are the property of the
Company and further agrees to surrender promptly to the
Company or Adviser any such records upon the Company's or
Adviser's request. Subadviser further agrees to preserve
for the periods prescribed by Rule 31a-2 under the 1940
Act the records it maintains for the Company.
In furnishing the services under this Agreement,
Subadviser will comply with the requirements of: (i) the
1940 Act applicable to it, and the regulations
promulgated thereunder; (ii) Subchapter M of the Internal
Revenue Code and the regulations promulgated thereunder;
(iii) other applicable provisions of state or Federal
law; (iv) the Articles of Incorporation and By-laws of
the Company; (v) policies and determinations of the
Company and the Adviser provided to the Subadviser in
writing; (vi) the fundamental and non-fundamental
investment policies and restrictions applicable to the
Fund, as set out in the Registration Statement of the
Company in effect; and (vi) the Registration Statement of
the Company. Notwithstanding the foregoing, Subadviser
shall have no responsibility to monitor compliance with
limitations or restrictions for which information from
the Adviser or its authorized agents is required to
enable Subadviser to monitor compliance with such
limitations or restrictions unless agreed upon between
Adviser and Subadviser in writing.
Nothing in this Agreement shall be implied to
prevent Adviser from engaging other subadvisers to
provide investment advice and other services to series or
portfolios of the Company for which Subadviser does not
provide such services, or to prevent Adviser from
providing such services itself in relation to the Fund or
such other series or portfolios.
Subadviser shall be responsible for the preparation
and filing of Schedule 13-G and Form 13-F on behalf of
the Fund. Subadviser shall not be responsible for the
preparation or filing or any other reports required of
the Fund by any governmental or regulatory agency, except
as expressly agreed in writing.
2. Delivery of Documents to Subadviser. Adviser has
furnished Subadviser with copies of each of the following
documents:
(a) The Articles of Incorporation of the Company as
in effect on the date hereof;
(b) The By-laws of the Company in effect on the
date hereof:
(c) The resolutions of the Directors approving the
engagement of Subadviser as investment manager
of the Fund and approving the form of this
Agreement;
(d) The resolutions of the Directors selecting
Adviser as investment manager to the Fund and
approving the form of the Adviser's Advisory
Agreement with the Fund;
(e) Adviser's Advisory Agreement with the Fund;
(f) The Code of Ethics of the Company and of
Adviser as currently in effect; and
(g) A list of companies the fixed-income securities
of which are not to be bought or sold for the
Company.
Adviser will furnish Subadviser from time to time with
copies, properly certified or otherwise authenticated, of
all amendments of or supplements to the foregoing, if
any. Such amendments or supplements as to Items (a)
though (f) above will be provided within 30 days of the
time such materials became available to Adviser. Such
amendments or supplements as to item (g) above will be
provided not later than the end of the business day next
following the date such amendments or supplements become
known to Adviser.
3. Delivery of Documents to Adviser. Subadviser has
furnished Adviser with copies of each of the following
documents:
(a) Subadviser's Form ADV as filed with the
Securities and Exchange Commission;
(b) Subadviser's most recent balance sheet;
(c) Separate lists of persons who Subadviser wishes
to have authorized to give written and/or oral
instructions to Custodians of Fund assets;
(d) The Code of Ethics of Subadviser as currently
in effect.
Subadviser will furnish Adviser from time to time with
copies, properly certified or otherwise authenticated, of
all material amendments of or supplements to the
foregoing, if any. Such amendments or supplements as to
items (a) through (d) above will be provided within 30
days of the time such materials became available to
Subadviser.
4. Investment Advisory Facilities. Subadviser, at its
expense, will furnish all necessary investment
facilities, including salaries of personnel, required for
it to execute its duties hereunder.
5. Execution of Fund Transactions. In connection
with the investment and reinvestment of the assets of the
Fund, Subadviser is responsible for the selection of
broker-dealers (which may include broker-dealers
affiliated with Subadviser) to execute purchase and sale
transactions for the Fund in conformity with the policy
with respect to brokerage as set forth in the Company's
Registration Statement, or as the Directors may determine
from time to time, as well as negotiation of brokerage
commission rates with such executing broker-dealers.
In selecting broker-dealers, Subadviser's primary
consideration will be to seek to obtain best overall
execution, and will also take into consideration
additional factors such as price, dealer spread or
commission, size and difficulty of the transaction and
research or other services provided. Consistent with
this, Subadviser may bunch orders for the Fund with
orders for other clients. In addition, when several
brokers appear to offer comparable results, Subadviser
may select brokers that provide research or statistical
material or other services to Subadviser. Such allocation
shall be in such amounts and proportions as Subadviser
shall determine and Subadviser will report on said
allocations, if any, to Adviser regularly as reasonably
requested by Adviser. Subadviser may also authorize the
payment of brokerage commissions that are higher than
commissions another broker might charge, if Subadviser
determines in good faith that the commission paid was
reasonable in relation to the brokerage and research
services provided, viewed in terms of either that
particular transaction or Subadviser's ongoing
responsibilities with respect to the Fund.
6. Reports by Subadviser and Records of the Fund.
Subadviser shall furnish Adviser with reports concerning
transactions and performance of the Fund, including
information required to be disclosed in the Company's
Registration Statement, in such form and frequency as may
be mutually agreed, to review the Fund and discuss the
management of it. Subadviser shall permit the financial
statements, books and records with respect to the Fund to
be inspected and audited by the Company, Adviser or their
agents at all reasonable times during normal business
hours upon prior written notice to Subadviser.
Subadviser shall immediately notify and forward to
Adviser any legal process served upon it on behalf of
Adviser or the Company. Subadviser shall promptly notify
Adviser of any changes in any information of which
Subadviser becomes aware that would be required to be
disclosed in the Company's Registration Statement.
7. Compensation of Subadviser. The amount of the
compensation to Subadviser is computed at an annual rate.
The fee is payable monthly in arrears, based on the
average daily net assets of the Fund for each month, at
the annual rates shown below.
For all services rendered, Adviser will calculate
and pay Subadviser at the annual rate of .20 of 1% on the
first $50 million in net assets of the Fund, .15 of 1% on
the next $200 million in net assets of the Fund, .12 of
1% on the next $750 million in net assets of the Fund and
.10 of 1% on net assets of the Fund greater than $1
billion.
In computing the fee to be paid to Subadviser, the
net asset value of the Fund shall be valued as set forth
in the then current Registration Statement of the
Company. If this Agreement is terminated, the payment
shall be prorated to the date of termination.
Adviser and Subadviser shall not be considered to be
partners or participants in a joint venture. Subadviser
will pay its own expenses for the services to be provided
pursuant to this Agreement and will not be obligated to
pay any expenses of Adviser, the Company or the Fund.
Except as otherwise provided herein, Adviser, the Company
and the Fund will not be obligated to pay any expenses of
Subadviser.
8. Confidential Treatment. It is understood that any
information or recommendation supplied by Subadviser in
connection with the performance of its obligations
hereunder is to be regarded as confidential and for use
only in connection with the business of the Fund by
Adviser, the Company, the Fund or such persons Adviser
may designate. It is also understood that any
information supplied to Subadviser in connection with the
performance of its obligations hereunder, particularly,
but not limited to, any list of securities which, on a
temporary basis, may not be bought or sold for the Fund,
is to be regarded as confidential and for use only by
Subadviser in connection with its obligation to provide
investment advice and other services to the Fund.
9. Representations and Warranties of the Parties.
Each party to this Agreement hereby represents and
warrants that: (i) it is registered as an investment
adviser under the Advisers Act and is registered or
licensed as an investment adviser under the laws of all
jurisdictions in which its activities require it to be so
registered or licensed; (ii) it will use commercially
reasonable efforts to maintain such registration during
the term of this Agreement; (iii) it will promptly notify
the other if it ceases to be so registered, if its
registration is suspended for any reason, or if it is
notified by any regulatory organization or court of
competent jurisdiction that it should show cause why its
registration should not be suspended or terminated; and
(iv) it is duly authorized to enter into this Agreement
and to perform its obligations hereunder.
Adviser further represents and warrants to
Subadviser that (i) the appointment of Subadviser by
Adviser has been duly authorized and (ii) it has acted
and will continue to act in connection with the
transactions contemplated hereby, and the transactions
contemplated hereby are, in conformity with the 1940 Act,
the Company's Articles of Incorporation and By-Laws and
other applicable law.
10. Liability. In the absense of willful
misfeasance, bad faith, gross negligence or reckless
disregard for its obligations hereunder, Subadviser shall
not be liable to the Company, the Fund the Fund's
shareholders or Adviser for any act or omission resulting
in any loss suffered by the Company, the Fund, the Fund's
shareholders or Adviser in connection with any service to
be provided herein, including, without limitation, any
loss suffered as a result of Subadviser's reasonable
reliance on information provided by the Fund's Custodian
or fund accountant or any loss suffered as a result of
the Fund's net asset value per share falling below $1.00.
Adviser agrees that Subadviser shall not be
liable for any failure to recommend the purchase or sale
of any security on behalf of the Fund on the basis of any
information which might, in Subadviser's opinion,
constitute a violation of any Federal or state laws,
rules or regulations.
11. Other Activities of Subadviser. Adviser agrees
that Subadviser and any of its officers, directors or
employees, and persons affiliated with it or with any
such officer, director or employee may render investment
management or advisory services to other investors and
institutions, and such investors and institutions may
own, purchase or sell, securities or other interest in
property the same as or similar to those which are
selected for purchase, holding or sale for the Fund, and
Subadviser shall be in all respects free to take action
with respect to investments in securities or other
interests in property the same as or similar to those
selected for purchase, holding or sale for the Fund.
Adviser further acknowledges that Subadviser shall in all
respects be free to take action with respect to
investments in securities or other interests in property
that are the same as, similar to, or different from those
selected for purchase, holding or sale for the Fund.
Adviser understands that Subadviser shall not favor or
disfavor any of Subadviser's clients or class of clients
in the allocation of investment opportunities, so that to
the extent practical, such opportunities will be
allocated among Subadviser's clients over a period of
time on a fair and equitable basis.
Nothing in this Agreement shall impose upon Subadviser
any obligation (i) to purchase or sell, or recommend for
purchase or sale, for the Fund any security which it, its
officers, directors, affiliates or employees may purchase
or sell for Subadviser or such officer's, director's,
affiliate's or employee's own accounts or for the account
of any other client of Subadviser, advisory or otherwise
or (ii) to abstain from the purchase or sale of any
security for Subadviser's other clients, advisory or
otherwise, which Adviser has placed on the list provided
pursuant to paragraph 2(g) of this Agreement.
12. Continuance and Termination. This Agreement
shall remain in full force and effect for one year from
the date hereof, and is renewable annually thereafter by
specific approval of the Directors or by vote of a
majority of the outstanding voting securities of the
Fund. Any such renewal shall be approved by the vote of
a majority of the Directors who are not interested
persons under the 1940 Act, cast in person at a meeting
called for the purpose of voting on such renewal. This
Agreement may be terminated without penalty at any time
by Adviser or Subadviser upon 60 days written notice, and
will automatically terminate in the event of (i) its
assignment by either party to this Agreement, as defined
in the 1940 Act; or (ii) termination of Adviser's
Advisory Agreement with the Fund, provided, however, that
Subadviser has received prior written notice thereof.
13. Notification. Subadviser will notify Adviser
within a reasonable time of any change in the personnel
of Subadviser with responsibility for making investment
decisions in relation to the Fund or who have been
authorized to give instructions to a Custodian of the
Fund.
Any notice, instruction or other communication
required or contemplated by this agreement shall be in
writing. All such communications shall be addressed to
the recipient at the address set forth below, provided
that either party may, by notice, designate a different
address for such party.
Adviser: SUMMIT INVESTMENT PARTNERS, INC.
Attention: Xxxx X. Xxxxxxxx
Associate General Counsel
0000 Xxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Subadviser: XXXXXXX XXXXXX INVESTMENTS, INC.
Attention: Xxxxxxx X. Xxxxx
General Counsel
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
14. Indemnification. Subadviser agrees to indemnify
and hold harmless Adviser, any affiliated person with the
meaning of Section 2(a)(3) of the 1940 Act ("affiliated
person") of Adviser and each person, if any who, within
the meaning of Section 15 of the Securities Act of 1933
(the "1933 Act"), controls ("Controlling Person")
Adviser, against any and all losses, claims damages,
liabilities or litigation (including reasonable legal and
other expenses), to which Adviser or such affiliated
person or controlling person may become subject under the
1933 Act, the 1940 Act, the Adviser's Act, under any
other statute, at common law or otherwise, arising out of
Subadviser's responsibilities as investment manager of
the Fund (1) to the extent of and as a result of the
willful misfeasance, bad faith or gross negligence by
Subadviser, any of Subadviser's employees, or (2) as a
result of any untrue statement or alleged untrue
statement of a material fact contained in a Prospectus or
SAI covering the Fund or any amendment thereof or any
supplement thereto or the omission or alleged omission to
state therein a material fact required to be stated
therein or necessary to make the statement therein not
misleading, if such a statement or omission was made in
reliance upon written information furnished by Subadviser
to Adviser, the Company, the Fund or any affiliated
person of Adviser or the Company expressly for use in the
Company's Registration Statement, or upon verbal
information confirmed by the Subadviser in writing
expressly for use in the Company's Registration Statement
or (3) to the extent of, and as a result of, the failure
of Subadviser to execute, or cause to be executed, Fund
transactions according to the standards and requirements
of the 1940 Act; provided, however, that in no case is
Subadviser's indemnity in favor of Adviser or any
affiliated person or controlling person of Adviser deemed
to protect such person against any liability to which any
such person would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of its reckless
disregard of its obligations and duties under this
Agreement.
Adviser agrees to indemnify and hold harmless
Subadviser, any affiliated person within the meaning of
Section 2(a)(3) of the 1940 Act of Subadviser and each
person, if any who, within the meaning of Section 15 of
the 1933 Act, controls Subadviser, against any and all
losses, claims, damages, liabilities or litigation
(including reasonable legal and other expenses), to which
Subadviser or such affiliated person or controlling
person may become subject under the 1933 Act, the 1940
Act, the Adviser's Act, under any other statute, at
common law or otherwise, arising out of Adviser's
responsibilities as investment manager of the Fund (1) to
the extent of and as a result of the willful misfeasance,
bad faith, or gross negligence by Adviser, any of
Adviser's employees or representatives or any affiliate
of or any person acting on behalf of Adviser, or (2) as a
result of any untrue statement or alleged untrue
statement of a material fact contained in a Prospectus or
SAI covering the Company or any amendment thereof or any
supplement thereto or the omission or alleged omission to
state therein a material fact required to be stated
therein or necessary to make the statement therein not
misleading, if such statement or omission was made other
than in reliance upon written information furnished by
Subadviser expressly for use in the Company's
Registration Statement or other than upon verbal
information confirmed by Subadviser in writing expressly
for use in the Company's Registration Statement;
provided, however, that in no case is Adviser's indemnity
in favor of Subadviser or any affiliated person or
controlling person of Subadviser deemed to protect such
person against any liability to which any such person
would otherwise be subject by reason of willful
misconduct, bad faith or gross negligence in the
performance of its duties or by reason of its reckless
disregard of its obligations and duties under this
Agreement.
15. Governing Law. This Agreement is made under, and
shall be governed by and construed in accordance with,
the laws of the State of New York, without regard to the
conflict of laws provisions thereof.
16. Miscellaneous: This Agreement shall be binding
upon and shall enure to the benefit of each of the
parties hereto and their respective successors and
permitted assigns. This Agreement may be executed in any
number of counterparts, each counterpart constitutein and
original but all together one and the same instrument and
agreement. In case any provision of this Agreement shall
be held to be invalid or unenforceable in whole or in
part, neither the validity nor the enforceability of the
remainder of this Agreement shall in any way be affected.
The effective date of this agreement is June 26, 2000.
FOR ADVISER: FOR SUBADVISER:
s/s Xxxxxx X. Xxxxxxxxxxxx s/s Xxxxxxx X. Xxxxxxxx
__________________________ _________________________
Name: Xxxxxx X. Xxxxxxxxxxxx Name: Willliam T. Trusott
Date: 6/22/00 Date: 6/7/00
