KOBREN INSIGHT MANAGEMENT, INC.
00 Xxxxxxx Xxxxxx, Xxxxx 000
X.X. Xxx 0000
Xxxxxxxxx Xxxxx, Xxxxxxxxxxxxx 00000
November 2, 2005
Kobren Insight Funds, on behalf of
Delphi Value Fund
00 Xxxxxxx Xxxxxx, Xxxxx 000
X.X. Xxx 0000
Xxxxxxxxx Xxxxx, Xxxxxxxxxxxxx 00000
Delphi Management, Inc.
00 Xxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
SUBADVISORY AGREEMENT
Dear Sirs:
Kobren Insight Funds (the "trust"), of which Delphi Value Fund (the
"fund") is a series, has been organized as a business trust under the laws of
the Commonwealth of Massachusetts to engage in the business of an investment
company. The trust's shares of beneficial interest are currently divided into
two series (including the fund), each series representing the entire undivided
interest in a separate portfolio of assets.
The board of trustees of the trust (the "trustees") has selected Kobren
Insight Management, Inc. (the "adviser") to provide overall investment advice
and management for the fund, and to provide certain other services, under the
terms and conditions provided in the investment advisory agreement, dated as of
the date hereof, between the trust, on behalf of the fund, and the adviser (the
"investment advisory agreement").
The adviser and the trustees have selected Delphi Management, Inc. (the
"subadviser") to provide the adviser and the fund with the advice and services
set forth below, and the subadviser is willing to provide such advice and
services, subject to the review of the trustees and overall supervision of the
adviser, under the terms and conditions hereinafter set forth. The subadviser
hereby represents and warrants that it is registered as an investment adviser
under the Investment Advisers Act of 1940, as amended (the "Advisers Act").
Accordingly, the trust, on behalf of the fund, and the adviser agree with the
subadviser as follows:
1. DELIVERY OF DOCUMENTS. The trust has furnished the subadviser with copies,
properly certified or otherwise authenticated, of each of the following:
a) agreement and declaration of trust of the trust, dated September 13,
1996, as amended to date (the "declaration of trust");
b) by-laws of the trust as in effect on the date hereof;
c) votes taken at the board meeting whereby the trustees selected the
subadviser as the investment subadviser to the fund and approved
this subadvisory agreement (the "agreement") and the votes taken at
the shareholder meeting of the fund approving the investment
subadvisory agreement;
d) votes taken at the board meeting whereby the trustees selecting the
adviser as investment adviser to the fund and approving the
investment advisory agreement and the votes taken at the shareholder
of the fund approving the investment advisory agreement;
e) the adviser's investment advisory agreement;
f) the fund's prospectus and statement of additional information; and
g) the trust's code of ethics.
The adviser will furnish the subadviser from time to time with copies, properly
certified or otherwise authenticated, of all amendments of or supplements to the
foregoing, if any.
2. INVESTMENT SERVICES. The subadviser will use its best efforts to provide
to the fund continuing and suitable investment advice with respect to
investments, consistent with the investment policies, objectives and
restrictions of the fund as set forth in the fund's prospectus and
statement of additional information. In the performance of the
subadviser's duties hereunder, subject always to the provisions contained
in the documents delivered to the subadviser pursuant to Section 1 above,
as from time to time amended or supplemented, the subadviser will, at its
own expense:
a) furnish the adviser and the fund with advice and recommendations,
consistent with the investment policies, objectives and restrictions
of the fund as set forth above, with respect to the purchase,
holding and disposition of portfolio securities and other permitted
investments;
b) furnish the adviser and the fund with advice in connection with
policy decisions to be made by the board of trustees or any
committee thereof about the fund's investments and, as requested,
furnish the fund with research, economic and statistical data in
connection with the fund's investments and investment policies;
c) submit such reports relating to the valuation of the fund's
securities as the adviser may reasonably request;
d) subject to prior consultation with the adviser, assist the fund in
any negotiations relating to the fund's investments with issuers,
investment banking firms, securities brokers or dealers and other
institutions or investors;
e) consistent with the provisions of Section 7 of this agreement, place
orders for the purchase, sale or exchange of portfolio securities
for the fund's account with brokers or dealers selected by the
adviser or the subadviser, provided that in connection with the
placing of such orders and the selection of such brokers or dealers
the subadviser will seek to obtain best price and execution, except
as otherwise provided in the prospectus and statement of additional
information of the fund;
f) from time to time or at any time requested by the adviser or the
trustees, make reports to the adviser or the trustees, as requested,
of the subadviser's performance of the foregoing services;
g) subject to the supervision of the adviser, maintain and preserve the
records required by the Investment Company Act of 1940 (the "1940
Act") to be maintained by the subadviser (the subadviser agrees that
such records are the property of the trust and copies will be
surrendered to the trust promptly upon request therefor);
h) give instructions to the custodian (including any sub-custodian) of
the fund as to deliveries of securities to and from such custodian
and payments of cash for the account of the fund, and advise the
adviser on the same day such instructions are given;
i) cooperate generally with the fund and the adviser to provide
information necessary for the preparation of registration statements
and periodic reports to be filed with the Securities and Exchange
Commission, including Form N-l A, semi-annual reports on Form N-CSR,
periodic statements, shareholder communications and proxy materials
furnished to holders of shares of the fund, filings with states and
with United States agencies responsible for tax matters, and other
reports and filings of like nature.
In the performance of its duties hereunder, the subadviser is and will be an
independent contractor and unless otherwise expressly provided or authorized
will have no authority to act for or represent the fund or trust in any way or
otherwise be deemed to be an agent of the fund, the trust or of the adviser.
3. EXPENSES PAID BY THE SUBADVISER. The subadviser will pay the cost of
maintaining the staff and personnel necessary for it to perform its
obligations under this agreement, the expenses of office rent, telephone,
telecommunications and other facilities that it is obligated to provide in
order to perform the services specified in Section 2, and any other
expenses incurred by it in connection with the performance of its duties
hereunder.
4. COMPENSATION OF THE SUBADVISER. The adviser will pay the subadviser, as
compensation for services and expenses assumed hereunder, a monthly fee as
set forth in Schedule A. Subadvisory fees for each month payable hereunder
will be computed daily and paid promptly after the adviser's actual
receipt of advisory fees for that month. If this agreement is effective
subsequent to the first day of the month, or if this agreement is
terminated, the fee provided in this section will be computed on the basis
of the number of days in the month for which this agreement is in effect,
subject to a pro rata adjustment based on the number of days elapsed in
the current month as a percentage of the total number of days in such
month. The subadviser understands and agrees that neither the trust nor
the fund has any liability for the subadviser's fee hereunder.
Calculations of the subadviser's fee will be based on average net asset
values as provided by the adviser.
The fees payable to the subadviser by the adviser under this agreement
shall, upon receipt by the adviser of its fees under the investment advisory
agreement with respect to the fund, be paid by the adviser into an
interest-bearing escrow account with a bank or the Fund's custodian in the event
that the holders of a "majority of the outstanding voting securities" (as
defined in the 0000 Xxx) of the fund have not voted to approve this agreement
("fund shareholder approval") by the date of the closing of the acquisition of
the adviser by E*TRADE FINANCIAL Corporation (the "acquisition"). If fund
shareholder approval has subsequently been obtained by the date that is 150 days
after the closing of the acquisition, the fees paid by the adviser into the
escrow account (and interest thereon) shall be paid to the subadviser. If fund
shareholder approval has not been obtained by such date, this agreement shall
terminate and the adviser shall have no responsibility to pay the fees held in
the escrow account (and interest thereon) to the subadviser; provided, however,
that the subadviser shall be entitled to be paid out of the escrow account the
lesser of (i) any costs incurred in performing its services during the period
from and after the date of the closing of the acquisition through the date that
is 150 days after the closing of the Acquisition and (ii) the total amount in
the escrow account (plus interest earned).
5. OTHER ACTIVITIES OF THE SUBADVISER AND ITS AFFILIATES. Nothing herein
contained will prevent the subadviser or any of its affiliates or
associates from engaging in any other business or from acting as
investment adviser or investment manager for any other person or entity,
whether or not having investment policies or a portfolio similar to the
fund. It is specifically understood that officers, directors and employees
of the subadviser and its affiliates may engage in providing portfolio
management services and advice to other investment advisory clients of the
subadviser or of its affiliates.
6. AVOIDANCE OF INCONSISTENT POSITION. In connection with purchases or sales
of portfolio securities for the account of the fund, neither the
subadviser nor any of its directors, officers or employees will act as
principal or agent or receive any commission. The subadviser will not
knowingly recommend that the fund purchase, sell or retain securities of
any issuer in which the subadviser has a financial interest without
obtaining prior approval of the adviser prior to the execution of any such
transaction. Access persons (as defined in Rule 17j-l under the 0000 Xxx)
of the subadviser will provide personal trading reports to a designated
representative of the adviser in accordance with the trust's code of
ethics.
7. NO PARTNERSHIP OR JOINT VENTURE. The trust, the fund, the adviser and the
subadviser are not partners of or joint venturers with each other and
nothing herein shall be construed so as to make them such partners or
joint venturers or impose any liability as such on any of them.
8. LIMITATION OF LIABILITY OF THE SUBADVISER. The subadviser will not be
liable for any error of judgment or mistake of law or for any loss
suffered by the trust, the fund or the adviser in connection with the
matters to which this agreement relates, except a loss resulting from
willful misfeasance, bad faith or gross negligence on the subadviser's
part in the performance of its duties or from reckless disregard by it of
its obligations and duties under this agreement.
9. DURATION AND TERMINATION OF THIS AGREEMENT. This agreement become
effective as of the closing date of the acquisition and, unless sooner
terminated as provided herein, shall continue in effect until the second
anniversary of the effective date of this agreement; PROVIDED, HOWEVER,
that if fund shareholder approval has not been obtained prior to the 150th
day after the closing of the acquisition, this agreement shall terminate
on the 150th day after the closing of the acquisition. Thereafter, this
agreement shall be renewable from year to year, but only so long as such
continuance is specifically approved at least annually by (a) a majority
of the trustees who are not interested persons of the adviser, of the
subadviser or (other than as board members) of the trust, cast in person
at a meeting called for the purpose of voting on such approval, and (b)
either (i) the trustees or (ii) a majority of the outstanding voting
securities of the fund.
This agreement may, on 60 days' written notice, be terminated at any
time without the payment of any penalty by the fund by vote of a majority
of the outstanding voting securities of the fund or by the board of
trustees, by the adviser or the subadviser. Termination of this agreement
with respect to the fund will not be deemed to terminate or otherwise
invalidate any provisions of any contract between you and any other series
of the trust. This agreement will automatically terminate in the event of
its assignment or upon the termination of the adviser's investment
advisory agreement; PROVIDED, HOWEVER, that if fund shareholder approval
has not
been obtained prior to the closing of the acquisition, this agreement may
be terminated by any of the foregoing persons in the manner so provided on
ten days' prior written notice. In interpreting the provisions of this
Section 9, the definitions contained in Section 2(a) of the 1940 Act
(including the definitions of "assignment," "interested person" and
"voting security"), will be applied.
10. AMENDMENT OF THIS AGREEMENT. No provision of this agreement may be changed
or waived orally, but only by an instrument in writing signed by the party
against which enforcement of the change or waiver is sought. No amendment,
transfer, assignment, sale, hypothecation or pledge of this agreement will
be effective until approved by (a) the trustees, including a majority of
the trustees who are not interested persons of the adviser, the subadviser
or (other than as board members) the trust, cast in person at a meeting
called for the purpose of voting on such approval, and (b) a majority of
the outstanding voting securities of the fund, as defined in the 1940 Act.
11. MISCELLANEOUS.
a) The captions in this agreement are included for convenience of
reference only and in no way define or limit any of the provisions
hereof or otherwise affect their construction or effect. This
agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
b) The name Kobren Insight Funds (formerly Insight Premier Funds) is
the designation of the trustees under the declaration of trust,
dated September 13,1996, as amended, and the declaration of trust
and amendments thereto have been filed with the Secretary of State
of the Commonwealth of Massachusetts. The obligations of the trust
and the fund are not personally binding upon, nor will resort be had
to the private property of, any of the trustees, shareholders,
officers, employees or agents of the trust or the fund, but only the
fund's property will be bound. The fund will not be liable for the
obligations of any other series of the trust.
c) Nothing herein contained will limit or restrict the subadviser or
any of its officers, affiliates or employees from buying, selling or
trading in any securities for its or their own account or accounts.
The trust and fund acknowledge that the subadviser and its officers,
affiliates and employees, and its other clients may at any time
have, acquire, increase, decrease or dispose of positions in
investments which are at the same time being acquired or disposed of
by the fund. The subadviser will have no obligation to acquire for
the fund a position in any investment which the subadviser, its
officers, affiliates or employees may acquire for its or their own
accounts or for the account of another client if, in the sole
discretion of the subadviser, it is not feasible or desirable to
acquire a position in such investment for the fund. Nothing herein
will prevent the subadviser from purchasing or recommending the
purchase of a particular security for one or more funds or clients
while other funds or clients may be selling the same security.
d) Any information supplied by the subadviser, which is not otherwise
in the public domain, in connection with the performance of its
duties hereunder is confidential and may be used only by the fund
and/or its agents, and only in connection with the fund and its
investments.
e) Governing Law. The substantive law of the Commonwealth of
Massachusetts and the applicable provisions of the 1940 Act shall
govern this agreement.
Yours very truly,
Kobren Insight Management, Inc.
By: /s/ Xxxx X. Xxxxxx
--------------------------------
Its: President
The foregoing agreement is hereby
agreed to as of the date thereof.
Kobren Insight Funds
on behalf of Delphi Value Fund
By: /s/ Xxxx Xxxxx
---------------------
Its: V.P., Secretary
Delphi Management, Inc.
By: /s/ Xxxxx X. Xxxxx
--------------------
Its: President
SCHEDULE A
Annual Fee Rate as a Percentage of
Average Daily Net Asset Value
----------------------------------
Delphi Value Fund 0.50%
The average net asset value for the month will be based on the net asset
value used in determining the price at which fund shares are sold, repurchased
or redeemed on each day of the month.
If this agreement becomes effective as to a fund after the first day of a
month, or terminates before the last day of a month, your compensation for such
fraction of the month will be determined by applying the foregoing percentages
to the average daily net asset value of the fund during such fraction of a month
and in the proportion that such fraction of a month bears to the entire month.
