DISTRIBUTION AGREEMENT
THIS AGREEMENT is made as of this 2nd day of November, 2005 by and between
Kobren Insight Funds (the "Trust") and E*TRADE Securities, LLC (the
"Distributor"), a limited liability company organized under the laws of the
State of Delaware, having its principal place of business at 0000 Xxxxxxxx
Xxxxx, Xxxxx Xxxx, Xxxxxxxxxx 00000 .
WHEREAS, the Trust is registered as an open-end, diversified management
investment company under the Investment Company Act of 1940 (the "1940 Act") and
intends to offer shares of beneficial interest (such shares of all series are
hereinafter called the "Shares"), representing interests in investment
portfolios of the Trust identified on Schedule A hereto (the "Funds") which are
registered with the Securities and Exchange Commission ("SEC") pursuant to the
Trust's Registration Statement on Form N-1A (the "Registration Statement"); and
WHEREAS, the Trust desires to retain the Distributor as distributor for
the Trust to provide for the sale and distribution of the Shares of the Funds
identified on Schedule A, and for such additional classes or series as the Trust
may issue, and the Distributor is prepared to provide such services commencing
on November 2, 2005.
NOW THEREFORE, in consideration of the premises and mutual covenants set
forth herein and intending to be legally bound hereby the parties hereto agree
as follows:
1. SERVICE AS DISTRIBUTOR
1.1 The Distributor will act on behalf of the Trust for the distribution of
the Shares covered by the Registration Statement under the Securities Act
of 1933 (the "1933 Act"). The Distributor will have no liability for
payment for the purchase of Shares sold pursuant to this Agreement or with
respect to redemptions or repurchases of Shares.
1.2 The Distributor agrees to use efforts deemed appropriate by the
Distributor to solicit orders for the sale of the Shares and will
undertake such advertising and promotion as it believes reasonable in
connection with such solicitation. The Trust understands that the
Distributor is, and may in the future be, the distributor of the shares of
several investment companies or series (collectively, the "Companies")
including Companies having investment objectives similar to those of the
Trust. The Trust further understands that investors and potential
investors in the Trust may invest in shares of such other Companies. The
Trust agrees that the Distributor's duties to such Companies shall not be
deemed in conflict with its duties to the Trust under this paragraph 1.2.
1.3 The Distributor shall, at its own expense, finance appropriate agreed upon
activities which it deems reasonable which are primarily intended to
result in the sale of the Shares, including, but not limited to,
compensation of underwriters, dealers and sales personnel and the printing
and mailing of prospectuses to other than current shareholders.
1.4 All activities by the Distributor and its agents and employees, as
distributor of the Shares, shall comply with all applicable laws, rules
and regulations, including, without limitation, all rules and regulations
made or adopted pursuant to the 1940 Act by the SEC or the National
Association of Securities Dealers, Inc.
1.5 The Distributor will transmit any orders received by it for purchase or
redemption of the Shares to the transfer agent for the Trust.
1.6 Whenever in their judgment such action is warranted by unusual market,
economic or political conditions, the Distributor or the officers of the
Trust may decline to accept any orders for, or make any sales of, the
Shares until such time as the Distributor or those officers deem it
advisable to accept such orders and to make such sales.
1.7 The Trust agrees at its own expense to execute any and all documents and
to furnish any and all information and otherwise to take all actions that
may be reasonably necessary in connection with the qualification of the
Shares for sale in such states as the Distributor may designate.
1.8 The Trust shall furnish from time to time, for use in connection with the
sale of the Shares, such information with respect to the Trust and the
Shares as the Distributor may reasonably request; and the Trust warrants
that the statements contained in any such information shall fairly show or
represent what they purport to show or represent.
1.9 The Trust represents to the Distributor that all Registration Statements
and prospectuses filed by the Trust with the SEC under the 1933 Act with
respect to the Shares have been prepared in conformity with the
requirements of said Act and the rules and regulations of the SEC
thereunder. As used in this Agreement, the term "Registration Statement"
shall mean any Registration Statement and any prospectus and any statement
of additional information relating to the Trust filed with the SEC and any
amendments or supplements thereto at any time filed with said Commission.
The Trust represents and warrants to the Distributor that any Registration
Statement, when such Registration Statement becomes effective, will
contain statements required to be stated therein in conformity with the
1933 Act and the rules and regulations of the SEC; that all statements of
fact contained in any such Registration Statement will be true and correct
when such Registration Statement becomes effective; and that no
Registration Statement when such
Registration Statement becomes effective will include an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading to a
purchaser of the Shares. The Trust may but shall not be obligated to
propose from time to time such amendment or amendments to any Registration
Statement and such supplement or supplements to any prospectus as, in the
light of future developments, may, in the opinion of the Trust's counsel,
be necessary or advisable. The Trust shall promptly notify the Distributor
of any advice given to it by its counsel regarding the necessity or
advisability of amending or supplementing such Registration Statement. If
the Trust shall not propose such amendment or amendments and/or supplement
or supplements within fifteen days after receipt by the Trust of a written
request from the Distributor to do so, the Distributor may, at its option,
terminate this Agreement. The Trust shall not file any amendment to any
Registration Statement or supplement to any prospectus without giving the
Distributor reasonable notice thereof in advance; provided, however, that
nothing contained in this Agreement shall in any way limit the Trust's
right to file at any time such amendments to any Registration Statements
and/or supplements to any prospectus, of whatever character, as the Trust
may deem advisable, such right being in all respects absolute and
unconditional.
1.10 The Trust authorizes the Distributor and dealers to use any prospectus or
statement of additional information in the form furnished from time to
time in connection with the sale of the Shares. The Trust agrees to
indemnify and hold harmless the Distributor, its officers, directors, and
employees, and any person who controls the Distributor within the meaning
of Section 15 of the 1933 Act, free and harmless from and against any and
all claims, demands, liabilities and expenses (including the cost of
investigating or defending such claims, demands or liabilities and any
legal fees incurred in connection therewith) which the Distributor, its
officers, directors, employees or any such controlling person may incur
under the 1933 Act, under any other statute, at common law or otherwise,
arising out of or based upon:
(a) any untrue statement, or alleged untrue statement, of a material fact
contained in the Trust's Registration Statement, prospectus, statement of
additional information, or sales literature (including amendments and
supplements thereto), or
(b) any omission, or alleged omission, to state a material fact required
to be stated in the Trust's Registration Statement, prospectus, statement
of additional information or sales literature (including amendments or
supplements thereto), necessary to make the statements therein not
misleading, provided, however, that insofar as losses, claims, damages,
liabilities or expenses arise out of or are based upon any such untrue
statement or omission or alleged untrue statement or omission made in
reliance on and in conformity with information furnished to the Trust by
the Distributor or its affiliated persons for use in the Trust's
Registration
Statement, prospectus, or statement of additional information or sales
literature (including amendments or supplements thereto), such
indemnification is not applicable.
The Distributor, its officers, directors, and employees, and any such
controlling person, as aforesaid, shall notify the Trust of any action
brought against the Distributor, its officers, directors or employees, or
any such controlling person, such notification to be given by letter or by
telegram addressed to the Trust at its principal office in Wellesley
Hills, Massachusetts and sent to the Trust by the person against whom such
action is brought, within 10 days after the summons or other first legal
process shall have been served. The failure to notify the Trust of any
such action shall not relieve the Trust from any liability which the Trust
may have to the person against whom such action is brought by reason of
any such untrue, or allegedly untrue, statement or omission, or alleged
omission, otherwise than on account of the Trust's indemnity agreement
contained in this paragraph 1.10. The Trust will be entitled to assume the
defense of any suit brought to enforce any such claim, demand or
liability, but, in such case, such defense shall be conducted by counsel
of good standing chosen by the Trust and approved by the Distributor,
which approval shall not unreasonably be withheld. In the event the Trust
elects to assume the defense of any such suit and retain counsel of good
standing approved by the Distributor, the defendant or defendants in such
suit shall bear the fees and expenses of any additional counsel retained
by any of them; but in case the Trust does not elect to assume the defense
of any such suit, or in case the Distributor reasonably does not approve
of counsel chosen by the Trust, or in case there is a conflict of interest
between the Trust and the Distributor, the Trust will reimburse the
Distributor, its officers, directors and employees, or the controlling
person or persons named as defendant or defendants in such suit, for the
fees and expenses of any counsel retained by the Distributor or them. The
Trust's indemnification agreement contained in this paragraph 1.10 and the
Trust's representations and warranties in this Agreement shall remain
operative and in full force and effect regardless of any investigation
made by or on behalf of the Distributor, its officers, directors and
employees, or any controlling person, and shall survive the delivery of
any Shares. This agreement of indemnity will inure exclusively to the
Distributor's benefit, to the benefit of its several officers, directors
and employees, and their respective estates, and to the benefit of the
controlling persons and their successors. The Trust agrees promptly to
notify the Distributor of the commencement of any litigation or
proceedings against the Trust or any of its officers or trustees in
connection with the issue and sale of any Shares.
1.11 The Distributor agrees to indemnify and hold harmless the Trust, its
several officers and trustees and each person, if any, who controls a Fund
within the meaning of Section 15 of the 1933 Act against any loss, claims,
damages, liabilities and expenses (including the cost of any reasonable
legal fees incurred in connection therewith) which the Trust, its
officers, trustees or any such controlling
person may incur under the 1933 Act, under any other statute, at common
law or otherwise, but only to the extent that such liability or expense
incurred by the Trust, its officers or trustees, or any controlling person
resulting from such claims or demands arose out of the acquisition of any
Shares by any person which may be based upon any untrue statement or
alleged untrue statement of a material fact contained in the Trust's
Registration Statement, prospectus, statement of additional information or
sales literature (including amendments and supplements thereto), or any
omission, or alleged omission, to state a material fact required to be
stated therein or necessary to make the statements therein not misleading,
if such statement or omission was made in reliance upon information
furnished or confirmed in writing to the Trust by the Distributor or its
affiliated persons (as defined in the 1940 Act).
The Trust, its officers and trustees, and any such controlling person, as
aforesaid, shall notify the Distributor of any action brought against the
Trust, its officers and trustees or any such controlling person, such
notification to be given by letter or by telegram addressed to the
Distributor at its principal office in Menlo Park, California and sent to
the Distributor by the person against whom such action is brought, within
10 days after the summons or other first legal process shall have been
served. The failure to notify the Distributor of any such action shall not
relieve the Distributor from any liability which the Distributor may have
to the person against whom such action is brought by reason of any such
untrue, or allegedly untrue, statement or omission, or alleged omission,
otherwise than on account of the Distributor's indemnity agreement
contained in this paragraph 1.11. The Distributor will be entitled to
assume the defense of any suit brought to enforce any such claim, demand
or liability, but, in such case, such defense shall be conducted by
counsel of good standing chosen by the Distributor and approved by the
Trust, which approval shall not unreasonably be withheld. In the event the
Distributor elects to assume the defense of any such suit and retain
counsel of good standing approved by the Trust, the defendant or
defendants in such suit shall bear the fees and expenses of any additional
counsel retained by any of them; but in case the Distributor does not
elect to assume the defense of any such suit, or in case the Trust
reasonably does not approve of counsel chosen by the Distributor, or in
case there is a conflict of interest between the Trust and the
Distributor, the Distributor will reimburse the Trust, its officers and
trustees, or the controlling person or persons named as defendant or
defendants in such suit, for the fees and expenses of any counsel retained
by the Trust or them. The Distributor's indemnification agreement
contained in this paragraph 1.11 and the Distributor's representations and
warranties in this Agreement shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of the Trust,
its officers and trustees, or any controlling person, and shall survive
the delivery of any Shares. This agreement of indemnity will inure
exclusively to the Trust's benefit, to the benefit of its several officers
and trustees, and their respective estates, and to the benefit of the
controlling persons and their successors. The Distributor agrees promptly
to notify the Trust of the
commencement of any litigation or proceedings against the Distributor or
any of its officers, directors or employees in connection with the issue
and sale of any Shares.
1.12 No Shares shall be offered by either the Distributor or the Trust under
any of the provisions of this Agreement and no orders for the purchase or
sale of Shares hereunder shall be accepted by the Trust if and so long as
effectiveness of the Registration Statement then in effect or any
necessary amendments thereto shall be suspended under any of the
provisions of the 1933 Act, or if and so long as a current prospectus as
required by Section 5(b)(2) of said Act is not on file with the SEC;
provided, however, that nothing contained in this paragraph 1.12 shall in
any way restrict or have any application to or bearing upon the Trust's
obligation to repurchase Shares from any shareholder in accordance with
the provisions of the Trust's Registration Statement, Declaration of
Trust, or bylaws.
1.13 The Trust agrees to advise the Distributor as soon as reasonably practical
by a notice in writing delivered to the Distributor:
(a) of any request by the SEC for amendments to the Registration
Statement, prospectus or statement of additional information then in
effect or for additional information;
(b) in the event of the issuance by the SEC of any stop order suspending
the effectiveness of the Registration Statement, prospectus or statement
of additional information then in effect or the initiation by service of
process on the Trust of any proceeding for that purpose;
(c) of the happening of any event that makes untrue any statement of a
material fact made in the Registration Statement, prospectus or statement
of additional information then in effect or that requires the making of a
change in such Registration Statement, prospectus or statement of
additional information in order to make the statements therein not
misleading; and
(d) of all actions of the SEC with respect to any amendments to any
Registration Statement, prospectus or statement of additional information
which may from time to time be filed with the SEC.
For purposes of this section, informal requests by or acts of the Staff of
the SEC shall not be deemed actions of or requests by the SEC.
1.14 The Distributor may enter into selling agreements with selected dealers or
other institutions with respect to the offering of the Shares to the
public. Each such selling agreement will provide (a) that all payments for
purchases of Shares will be sent directly from the dealer or such other
institution to the Funds' transfer agent and (b) that, if payment is not
made with respect to purchases of Shares at
the customary or required time for settlement of the transaction, the
Distributor will have the right to cancel the sale of the Shares ordered
by the dealer or such other institution, in which case the dealer or such
other institution will be responsible for any loss suffered by any Fund or
the Distributor resulting from such cancellation. The Distributor may also
act as disclosed agent for a Fund and sell Shares of that Fund to
individual investors. The Distributor shall enter into selling agreements
only with organizations that are either members in good standing of the
National Association of Securities Dealers, Inc. or financial institutions
that are not required to be such members.
2. TERM
This Agreement shall become effective on November 2, 2005 and, unless
sooner terminated as provided herein, shall continue until November 1,
2007 and thereafter shall be renewed for successive one-year terms,
provided such continuance is specifically approved at least annually by
(i) the Trust's Board of Trustees or (ii) by a vote of a majority (as
defined in the 0000 Xxx) of the outstanding voting securities of the
Trust, provided that in either event the continuance is also approved by a
majority of the Trustees who are not parties to this Agreement and 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 with respect to the
Trust without penalty, on at least sixty days' written notice, by the
Trust's Board of Trustees, by vote of a majority (as defined in the 0000
Xxx) of the outstanding voting securities of the Trust, or by the
Distributor. This Agreement will also terminate automatically in the event
of its assignment (as defined in the 1940 Act).
3. LIMITATION OF LIABILITY
The Distributor shall not be liable for any error of judgment or mistake
of law or for any loss suffered by the Trust in connection with the
performance of its obligations and duties under this Agreement, except a
loss resulting from the Distributor's willful misfeasance, bad faith or
gross negligence in the performance of such obligations and duties, or by
reason of its reckless disregard thereof. The Trust will indemnify the
Distributor against and hold it harmless from any and all losses, claims,
damages, liabilities or expenses (including reasonable counsel fees and
expenses) resulting from any claim, demand, action or suit not resulting
from the willful misfeasance, bad faith or gross negligence of the
Distributor in the performance of such obligations and duties or by reason
of its reckless disregard thereof; provided, however, that as to any
matter disposed of by a compromise payment by the Distributor, pursuant to
a consent decree or otherwise, no indemnification either for such payment
or for any other expenses shall be provided unless there has been a
determination that the Distributor did not engage in willful misfeasance,
bad faith or gross negligence or reckless disregard of the
performance of its obligations and duties (i) by the court or other body
approving the settlement or other disposition; or (ii) based upon a review
of readily available facts (as opposed to a full trial-type inquiry), by
written opinion from independent legal counsel approved by the Board of
Trustees; or (iii) by a majority of the Board of Trustees who are neither
interested persons of the Trust (as defined in the 0000 Xxx) nor parties
to the matter, based upon a review of readily available facts (as opposed
to a full trial-type inquiry).
4. NOTICES
All notices and other communications (collectively referred to as a
"Notice" or "Notices" in this paragraph) hereunder shall be in writing or
by telegram, cable, telex or facsimile sending device. Notices shall be
addressed (a) if to the Distributor at its address, 0000 Xxxxxxxx Xxxxx,
Xxxxx Xxxx, Xxxxxxxxxx 00000; (b) if to the Trust, at its principal place
of business or (c) if to neither of the foregoing, at such other address
as to which the sender shall have been notified by any such Notice or
other communication. The Notice may be sent by first-class mail, in which
case it shall be deemed to have been given three days after it is sent, or
if sent by telegram, cable, telex or facsimile sending device, it shall be
deemed to have been given immediately.
5. FURTHER ACTIONS
Each party agrees to perform such further acts and execute such further
documents as are necessary to effectuate the purposes hereof.
6. AMENDMENTS
This Agreement or any part hereof may be changed or waived only by an
instrument in writing signed by the party against which enforcement of
such change or waiver is sought.
7. GOVERNING STATE LAW
This Agreement shall be governed by and its provisions shall be construed
in accordance with the laws of the Commonwealth of Massachusetts.
8. MATTERS RELATING TO THE TRUST AS A MASSACHUSETTS BUSINESS TRUST
The names "Kobren Insight Funds" and "Trustees of Kobren Insight Funds"
refer respectively to the Trust created and the Trustees, as trustees but
not individually or personally, acting from time to time under a
Declaration of Trust dated September 13, 1996 to which reference is hereby
made and a copy of which is on file at the office of the Secretary of the
Commonwealth of Massachusetts and elsewhere as required by law, and to any
and all amendments thereto so filed or
hereafter filed. The obligations of "Kobren Insight Funds" entered into in
the name or on behalf thereof by any of the Trustees, representatives or
agents are made not individually, but in such capacities, and are not
binding upon any of the Trustees, Shareholders or representatives of the
Trust personally, but bind only the assets of the Trust, and all persons
dealing with a Fund must look solely to the assets of the Trust belonging
to such Fund for the enforcement of any claims against the Trust. No Fund
shall be responsible for the obligations of any other Fund hereunder.
9. MISCELLANEOUS
This Agreement embodies the entire agreement and understanding between the
parties hereto, and supersedes all prior agreements and understandings
relating to the subject matter thereof. 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. If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby. This Agreement shall be binding
and shall inure to the benefit of the parties hereto and their respective
successors. This Agreement may be executed in one or more counterparts,
all of which taken together shall be deemed one original.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
KOBREN INSIGHT FUNDS
By: /s/ Xxxx X. Xxxxx
-----------------------------
Title: Vice President
-----------------------------
E*TRADE SECURITIES, LLC
By: /s/ Xxxxxx Xxxxxxx
-----------------------------
Title: Vice President
-----------------------------
SCHEDULE A
to the Distribution Agreement
between Kobren Insight Funds and
E*TRADE Securities, LLC
NAME OF SERIES
Kobren Growth Fund
Delphi Value Fund
- Retail Class Shares
- Institutional Class Shares
