SUBADVISORY AGREEMENT
THIS AGREEMENT is between Summit Investment Partners, Inc. (the
"Adviser") and World Asset Management, L.L.C. (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 ");
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")
has engaged Adviser to act as the investment manager for the
Summit EAFE International Equity Index Fund and the Summit EAFE
International Equity Index Portfolio (the "Fund" or "Funds"), two
series of the Company, under the terms of an amendment to the
investment advisory agreement with the Company dated as of
November 10, 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 for the Funds as 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 Funds 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
Funds or otherwise represented in the Funds' 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
Funds 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 Funds. No assets may be
withdrawn from the Funds other than for settlement of
transactions on behalf of the Funds 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 Funds
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 Funds or the Funds' 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
Funds 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 Funds, 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 Funds or
such other series or portfolios.
Subadviser shall not be responsible for the preparation or
filing or any other reports required of the Funds 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 Funds and
approving the form of this Agreement;
(d) The resolutions of the Directors selecting Adviser as
investment manager to the Funds and approving the form
of the Adviser's Advisory Agreement with the Funds;
(e) Adviser's Advisory Agreement with the Funds;
(f) The Code of Ethics of the Company and of Adviser as
currently in effect; and
(g) A list of companies the 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 Funds,
Subadviser is responsible for the selection of broker-dealers to
execute purchase and sale transactions for the Funds 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 Funds 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 Funds.
6. Reports by Subadviser and Records of the Funds. Subadviser
shall furnish Adviser with reports concerning transactions and
performance of the Funds, 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 Funds and
discuss the management of it. Subadviser shall permit the
financial statements, books and records with respect to the Funds
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 the annual rate of 0.10% of each
Fund's daily net assets; provided, however, that the Subadviser
agrees to waive such advisory fee for the first six months from
the effective date of this Agreement. The fee is payable monthly
in arrears, based on the average daily net assets of each Fund
for each month. During any period when the determination of the
Fund's net asset value is suspended by the Directors of the Fund,
the net asset value of a share of the Fund as of the last
business day prior to such suspension shall, for the purpose of
this paragraph, be deemed to be the net asset value at the close
of each succeeding business day until it is again determined.
However, no such fee shall be paid to the Subadviser with respect
to any assets of the Fund that may be invested in any other
investment company for which the Subadviser serves as investment
adviser or Subadviser. The fee provided for hereunder shall be
prorated in any month in which this Agreement is not in effect
for the entire month. The Subadviser shall be entitled to
receive fees hereunder only for such periods as the Adviser
Investment Advisory Agreement remains in effect.
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.
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 Funds. Except as otherwise provided
herein, Adviser, the Company and the Funds 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 Funds by Adviser, the Company, the Funds
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 Funds, 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 Funds.
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 absence of willful misfeasance, bad
faith, reckless disregard or negligence for its obligations
hereunder, Subadviser shall not be liable to the Company, the
Funds, the Funds' shareholders or Adviser for any act or omission
resulting in any loss suffered by the Company, the Funds, the
Funds' 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 Funds' Custodian or fund accountant.
Adviser agrees that Subadviser shall not be liable for any
failure to recommend the purchase or sale of any security on
behalf of the Funds 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 Funds, 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 Funds. 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 Funds.
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 Funds 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 Funds. 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
Funds or who have been authorized to give instructions to a
Custodian of the Funds.
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: WORLD ASSET MANAGEMENT, L.L.C.
Attention: Xxxx Xxx X. Xxxxxxxx
Associate General Counsel
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 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 Funds (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 Funds 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 Funds 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 Funds (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 Ohio, without regard to the conflict of laws provisions
thereof.
16. Miscellaneous: This Agreement shall be binding upon and
shall inure 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 constituting 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 December 26, 2000.
FOR ADVISER: FOR SUBADVISER:
/s/ Xxxx X. Xxxxxxxx /s/ Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxxx Xxxx X. Xxxxxxx
Date: November 21, 2000 Date: November 29, 2000
