As filed with the Securities and Exchange Commission on
November 8, 1996
Securities Act File No. 333-12075
Investment Company Act File No. 811-7813
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. 1 X
Post-Effective Amendment No.
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
Amendment No. 1 X
INSIGHT PREMIER FUNDS
(Exact Name of Registrant as Specified in Charter)
20 William Street, Suite 310, Wellesley Hills, Massachusetts
02181
Registrant's Telephone Number, including Area Code: (617) 573-
1557
Name and Address of Agent for Service: Copies to:
Gail A. Hanson, Esq. Pamela Wilson, Esq.
Insight Premier Funds Hale and Dorr
One Exchange Place 60 State Street
Boston, MA 02109 Boston, MA 02109
Approximate Date of Proposed Public Offering:
As soon as practicable after this Registration Statement
becomes effective.
It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b)
on pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a)(1)
on pursuant to paragraph (a)(1)
75 days after filing pursuant to paragraph (a)(2)
on __________ pursuant to paragraph (a)(2) of Rule
485.
Page 1 of __ Pages
Pursuant to Rule 24f-2 under the Investment Company Act of
1940, the Registrant has registered an indefinite number of
shares of beneficial interest, $0.001 par value per share, of
all series and classes of the Registrant then existing or
thereafter created, and will file a Rule 24f-2 Notice within 60
days after the close of the Registrant's fiscal year or as
otherwise may be required.
INSIGHT PREMIER FUNDS
FORM N-1A
CROSS REFERENCE SHEET
PURSUANT TO RULE 495 (a)
Part A.
Item No. Prospectus Caption
1. Cover Page Cover Page
2. Synopsis Expense Information
3. Condensed Financial Information Not Applicable
4. General Description of Registrant Investment Objectives
and Policies; Additional Information
5. Management of the Fund Management of the Funds
5A. Management's Discussion of Not Applicable
Fund Performance
6. Capital Stock and Other Securities How to Purchase
Shares; How to Redeem Shares; Determination of Net Asset Value;
Dividends, Distributions and Taxes; Additional Information
7. Purchase of Securities Being Offered How to Purchase
Shares
8. Redemption or Repurchase How to Redeem Shares
9. Pending Legal Proceedings Not Applicable
Part B. Statement of Additional
Item No. Information Caption
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History Investment Objectives
and Policies; Description of the Trust; Additional Information
13. Investment Objectives and Policies Investment Objectives
and Policies; Investment Restrictions
14. Management of the Registrant Management of the Trust and
the Funds
15. Control Persons and Principal Holders of Securities
Management of the Trust and the Funds
16. Investment Advisory and Other Services Management of
the Trust and the Funds; Custodian, Counsel and Independent
Accountants; Portfolio Transactions
17. Brokerage Allocation Portfolio Transactions
18. Capital Stock and Other Securities Description of the
Trust
19. Purchase, Redemption and Pricing of Purchase,
Redemption and
Securities Being Offered Determination of Net Asset
Value
20. Tax Status Dividends, Distributions and Taxes
21. Underwriters Management of the Trust and the Funds
22. Calculation of Performance Data Performance
Information
23. Financial Statements Financial Statements
PART A: INFORMATION REQUIRED IN A PROSPECTUS
INSIGHT PREMIER FUNDS
Insight Growth Fund
Insight Moderate Growth Fund
Insight Conservative Allocation Fund
Prospectus
November __, 1996
Insight Premier Funds is a no-load open-end diversified
investment company that currently includes three series:
Insight Growth Fund, Insight Moderate Growth Fund and
Insight Conservative Allocation Fund. Each fund pursues the
investment objectives outlined below by investing in a
diversified portfolio consisting primarily of mutual funds.
The primary focus of each fund is to develop an appropriate
asset allocation strategy and to select from the wide range
of mutual funds currently available.
The investment adviser to the funds is Insight Management,
Inc. ("Insight Management"). Insight Management has
extensive experience in managing mutual fund portfolios for
high net worth individuals and corporations with minimum
$250,000 account sizes. Insight Management currently
manages over 1,000 client accounts with assets totaling
approximately $670 million.
As the funds' investment adviser, Insight Management may
select from virtually all publicly available mutual funds.
The funds' strategy of investing in other mutual funds
results in greater expenses than shareholders would incur if
they invested directly in mutual funds.
Insight Growth Fund seeks long-term growth of capital
without regard to current income and with a volatility level
approximating that of the S&P 500 Index.
Insight Moderate Growth Fund seeks long-term growth of
capital without regard to current income and with a
volatility level below that of the S&P 500 Index.
Insight Conservative Allocation Fund seeks enough long-term
growth of capital to maintain purchasing power in the face
of inflation (as measured by the Consumer Price Index) with
a volatility level below that of the S&P 500 Index.
Shares of the funds are not deposits or obligations of or
guaranteed or endorsed by, any bank and are not federally
insured by the Federal Deposit Insurance Corporation, the
Federal Reserve Board or any other agency.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
This prospectus contains information about the funds that
you should consider before investing. Please read the
prospectus carefully and retain it for future reference. A
statement of additional information dated November , 1996
has been filed with the Securities and Exchange Commission.
The statement of additional information contains more
information about the funds and is incorporated by reference
into this prospectus. The statement of additional
information is available without charge and can be obtained
by writing the distributor at the address shown on the back
cover or calling the telephone number shown below.
The principal distributor (the "Distributor") of the funds'
shares is Insight Brokerage Services, Inc. For further
information, please call the Insight Premier funds toll free
at 800-___-____.
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S>
<C>
Expense Information How to Redeem Shares
Investment Objectives and Policies Exchange Privilege
Management of the Funds Shareholder Services
Determination of Net Asset Value Dividends,
Distributions and Taxes
How to Purchase Shares Additional Information
</TABLE>
EXPENSE INFORMATION
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Conservative
Growth Moderate
Allocation
Fund Growth Fund Fund
Shareholder Transaction Expenses
Sales Load Imposed on Purchases None None None
Sales Load Imposed on
Reinvested Dividends None None None
Deferred Sales Load None None None
Exchange Fee None None None
Redemption Fee1 None None None
Annual Fund Operating Expenses
(As a Percentage of Average Net Assets)
Advisory fees2 0.75% 0.75% 0.75%
Distribution (Rule 12b-1) fees None None None
Other expenses (after expense limitation)3 0.25% 0.25%
0.25%
Total fund operating expenses
(after expense limitation)3 1.00% 1.00% 1.00%
<FN>
1 A transaction fee of $10.00 may be charged for redemption
proceeds paid by wire.
2 An Insight Premier fund may invest in shares of an
underlying mutual fund that (1) makes payments of Rule 12b-1
revenues with respect to shares held by the Insight Premier
fund or (2) whose investment adviser is willing to share a
portion of the underlying fund's advisory fee attributable
to underlying fund shares held by the Insight Premier fund.
Any Rule 12b-1 or revenue sharing payments made with respect
to shares of any underlying fund will be applied to the
advisory fees owed to Insight Management by the affected
Insight Premier fund.
3 Insight Management has voluntarily agreed to limit each
fund's other expenses until December 31, 1997 to 0.25% of
the fund's average daily net assets. Without this expense
limitation and without the revenues from underlying funds
(described in note 2 above), the estimated other expenses
and total fund operating expenses, respectively, of each
fund would be -- Growth Fund: 0.26% and 1.01%; Moderate
Growth Fund: 0.31% and 1.06 %; and Conservative Allocation
Fund: 0.44% and 1.19%.
</TABLE>
Example
You would pay the following expenses on a hypothetical
$1,000 investment assuming (1) a 5% annual return and (2)
redemption at the end of each time period.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Growth Moderate Conservative
Allocation
Fund Growth Fund Fund
1 year $10 $10 $10
3 years $32 $32 $32
</TABLE>
The purpose of the above tables is to help you understand
the various costs and expenses that investors in the funds
will bear, directly or indirectly. These expenses are based
on the estimated expenses for each fund's first fiscal year,
after any applicable expense limitation, and should not be
considered representative of past or future expenses.
Actual expenses may be greater or less than those shown.
Also, while the example assumes a 5% annual return, a fund's
actual performance may vary and may result in a return
greater or less than 5%.
INVESTMENT OBJECTIVES AND POLICIES
Insight Growth Fund, Insight Moderate Growth Fund and
Insight Conservative Allocation Fund are diversified mutual
funds. Each fund has its own investment objective, policies
and practices, as described below. Each fund pursues its
investment objective by investing primarily in other mutual
funds, but may also invest directly in securities that are
suitable investments for that fund. There is no guarantee
that a fund will be able to achieve its objectives.
Insight Growth Fund
Investment Objective
The investment objective of Insight Growth Fund is long-term
growth of capital without regard to current income. By
using the active asset allocation strategy described below,
the fund seeks reduced volatility (risk) over a full market
cycle to a level approximating that of the S&P 500 Index.
However, at any particular time, the fund's volatility may
be higher or lower than its target volatility. Under normal
market conditions, at least 65% of the fund's total assets
will be invested in open-end and closed-end, U.S. and
international stock funds. The fund may invest up to 35% of
total assets in fixed income funds or directly in stocks,
bonds, money market instruments, options, futures contracts
and other permissible investments.
Who should invest in the fund?
Insight Growth Fund is designed for investors seeking growth
of capital and a volatility level approximating that of the
S&P 500 Index. These investors should have a minimum five
year time horizon and no need for current income.
Insight Moderate Growth Fund
Investment Objective
The investment objective of Insight Moderate Growth Fund is
long-term growth of capital without regard to current
income. By using the active asset allocation strategy
described below, the fund seeks reduced volatility (risk)
over a full market cycle to a level approximately 20% below
that of the S&P 500 Index. However, at any particular time,
the fund's volatility may be higher or lower than its target
volatility. Under normal market conditions, at least 65% of
the fund's total assets will be invested in open-end and
closed-end, growth and growth and income funds. These may
include both U.S. and international funds. The fund may
invest up to 35% of total assets in fixed income funds or
directly in stocks, bonds, money market instruments,
options, futures contracts and other permissible
investments.
Who should invest in the fund?
Insight Moderate Growth Fund is designed for investors
seeking growth of capital and a volatility level below that
of the S&P 500 Index. These investors should have a minimum
3 to 5 year time horizon and modest income needs.
Insight Conservative Allocation Fund
Investment Objective
The investment objective of Insight Conservative Allocation
Fund is enough long-term growth of capital to maintain
purchasing power in the face of inflation. Current income
is a secondary objective. By using the active asset
allocation strategy described below, the fund seeks reduced
volatility (risk) over a full market cycle to a level
approximately 30% below that of the S&P 500 Index. However,
at any particular time, the fund's volatility may be higher
or lower than its target volatility. The fund expects,
under normal market conditions, to invest at least 40% of
its total assets in open-end and closed-end, growth and
growth and income funds. These may include both U.S. and
international funds. In addition, at least 20% of the
fund's total assets will be invested in income producing
funds or securities. The fund may invest up to 40% of its
total assets directly in stocks, bonds, money market
instruments, options, futures contracts and other
permissible investments.
Who should invest in the fund?
Insight Conservative Allocation Fund is designed for
investors seeking enough long-term growth of capital to
offset the loss of purchasing power due to inflation, as
well as current income. Although not without risk, the fund
may be suitable for conservative investors willing to
sacrifice some growth potential in exchange for less
volatility.
All Funds: Characteristics and Risks of Investment
Securities and Practices
Insight Management's Investment Process. Insight Management
intends to construct for each Insight Premier fund a
diversified portfolio in a risk controlled manner consistent
with the fund's investment objectives. Insight Management
uses a multi-faceted approach and relies on fundamental
valuations and analysis to make investment decisions for the
funds. Insight Management identifies asset classes and
investment styles that appear to be undervalued relative to
their earnings potential or other characteristics. For
example, the price to earnings (PE) ratio of small
capitalization growth stocks is often between 0.6 and 1.0
times their earnings growth rate. PE ratios significantly
above or below this range may prompt trading action or
equity style shifts in a fund's portfolio. Insight
Management seeks to identify and avoid industries or types
of securities that appear overvalued.
Insight Management monitors stock valuations for issuers in
a particular industry relative to current and historical
stock valuations for industries represented in the S&P 500
Index. When stock valuations in a particular industry are
outside their norms, that industry may be underweighted or
overweighted accordingly in a fund's portfolio. In
selecting investments in other mutual funds, Insight
Management considers a variety of quantitative factors such
as historical total returns, style analysis, volatility
levels, expenses and underlying fund size. In addition to
quantitative analysis techniques, a variety of qualitative
factors may be used to identify appropriate funds for
investment. These may include interviews with underlying
fund managers and their research staff. Insight Management
will combine the underlying funds in such a manner as to
achieve an asset allocation mix that reflects its views of
the financial markets as well as the objectives of each
fund.
By using an active asset allocation strategy, each fund
seeks reduced volatility over a full market cycle to a
specified level relative to the volatility of the S&P 500
Index. Risk is reduced by first determining the appropriate
mix of stocks, bonds and cash most likely to achieve the
fund's target volatility. For example, Insight Growth Fund
would typically invest a greater percentage of its assets in
stocks than would the other two funds. Once the stock
allocation is determined, Insight Management determines the
style allocation (i.e., growth vs. value stocks or small
capitalization vs. large capitalization stocks). Finally,
Insight Management selects specific funds (including their
managers). During this three step process, Insight
Management analyzes historical and expected returns,
underlying fund volatility levels and correlations between
underlying funds in order to construct for each fund a
portfolio with an appropriate risk level.
Investments in Other Mutual Funds. Each fund will invest
primarily in the shares of open-end and closed-end funds
(sometimes referred to in this prospectus as "mutual
funds"). Mutual funds pool the investments of many
investors and use professional management to select and
purchase securities and other investments for their
portfolios. The Insight Premier funds are authorized to
invest in underlying funds with investment objectives that
do not match those of the funds. Insight Management
believes that, by investing in a combination of funds with a
broad range of objectives and offsetting risk
characteristics, an Insight Premier fund can achieve a
higher composite rate of return while assuming a level of
risk commensurate with the fund's objective. The underlying
funds in the Insight Premier funds' portfolios may invest in
any or all of the investments described in this prospectus
and will expose the Insight Premier funds to all of the
risks that would be associated with the direct ownership of
these investments. The underlying funds may be authorized
by their investment policies to engage in investment
practices that the Insight Premier funds do not engage in
directly.
As the funds' investment adviser, Insight Management may
select from virtually all publicly available open-end and
closed-end funds. Due to its size and buying power, many
mutual funds that would otherwise be sold with a front-end
sales charge may be available to the Insight Premier funds
at net asset value. The funds will not purchase shares of
open-end mutual funds if a front-end sales charge would be
imposed on such purchase. However, the funds may purchase
shares of an underlying fund that are subject to a deferred
sales charge or redemption fee.
Investing in mutual funds through the Insight Premier funds
involves additional and duplicative expenses and certain tax
results that would not be present if you were to make a
direct investment in the underlying mutual funds. By
investing in mutual funds indirectly through the funds, you
bear not only your proportionate share of the expenses of
the funds (including operating costs and investment advisory
and administrative fees) but also, indirectly, similar
expenses of the underlying funds. Investment decisions by
the investment advisers of the underlying funds are made
independently of Insight Management and the Insight Premier
funds. At any particular time, one underlying fund may be
purchasing shares of an issuer whose shares are being sold
by another underlying fund. As a result, an Insight Premier
fund would incur indirectly certain transaction costs
without accomplishing any investment purpose. In addition,
an underlying fund may incur service fees or expenses
related to the distribution of the underlying fund's shares.
As a shareholder of the Insight Premier funds, you may
receive taxable capital gains distributions to a greater
extent than if you invested directly in the underlying
funds.
A fund, together with the other Insight Premier funds,
Insight Management and any of their affiliated persons, may
purchase only up to 3% of the total outstanding securities
of an underlying fund. Accordingly, each fund's ability to
invest fully in shares of an underlying fund is limited to
the extent that the other Insight Premier funds, Insight
Management or their affiliates also hold shares of the same
underlying fund.
Equity Securities. The funds and the underlying funds in
their portfolios invest in equity securities of U.S. and
foreign companies. Equity securities consist of
exchange-traded, over-the-counter ("OTC") and unlisted
common and preferred stocks, warrants, rights, convertible
debt securities, trust certificates, limited partnership
interests and equity participations. The prices of the
funds' equity investments will change in response to stock
market movements.
Warrants and Convertible Securities. Warrants acquired by a
fund (or an underlying fund in its portfolio) will entitle
it to buy common stock from the issuer at a specified price
and time. Warrants are subject to the same market risks as
stocks, but may be more volatile in price. A fund's
investment in warrants will not entitle it to receive
dividends or exercise voting rights and will become
worthless if the warrants cannot be profitably exercised
before their expiration dates. Convertible debt securities
and preferred stock acquired by a fund will entitle it to
acquire the issuer's stock by exchange or purchase.
Convertible securities are subject both to the credit and
interest rate risks associated with fixed income securities
and to the stock market risk associated with equity
securities.
Fixed Income Securities. Each fund (and the underlying
funds in its portfolio) may invest, to the extent permitted
by its investment policies, in any type of fixed income
security. Fixed income securities include: (1) securities
issued or guaranteed by the U.S. government and any of its
agencies and instrumentalities ("U.S. government
securities") and custodial receipts based on U.S.
government securities; (2) [dollar denominated] securities
issued or guaranteed by a foreign government, any of its
political subdivisions, authorities, agencies and
instrumentalities or supranational entities such as the
World Bank; (3) debt securities issued by U.S. and foreign
companies; (4) certificates of deposit, bankers' acceptances
and time deposits issued by or maintained at U.S. and
foreign banks; (5) commercial paper; and (6)
mortgage-backed, asset-backed, indexed and derivative
securities.
The value of fixed income securities, including U.S.
government securities, varies inversely with changes in
interest rates. When interest rates decline, the value of
fixed income securities tends to rise. When interest rates
rise, the value of fixed income securities tends to decline.
The market prices of zero coupon, delayed coupon and
payment-in-kind securities are affected to a greater extent
by interest rate changes and tend to be more volatile than
the market prices of securities providing for regular cash
interest payments.
In addition, fixed income securities are subject to the risk
that the issuer may default on its obligation to pay
principal and interest. The value of fixed income
securities may also be reduced by the actual or perceived
deterioration in an issuer's creditworthiness, including
credit rating downgrades.
Fixed income securities may be subject to both call
(prepayment) risk and extension risk. Call risk is the risk
that an issuer of a security will exercise its right to pay
principal on an obligation earlier than scheduled. Early
principal payments tend to be made during periods of
declining interest rates. This forces the affected fund to
reinvest the unanticipated cash flow in lower yielding
securities. Extension risk is the risk that an issuer will
exercise its right to pay principal later than scheduled.
This typically happens during periods of rising interest
rates and prevents the affected fund from reinvesting in
higher yielding securities. Unscheduled principal
prepayments and delays in payment can both reduce the value
of an affected security. Unlike most conventional fixed
income securities, mortgage-backed and asset-backed
securities are generally subject to both call (prepayment)
risk and extension risk.
High Yield "Junk" Bonds. Each fund will not invest directly
more than 35% of its total assets in below investment grade
fixed income securities, which are often referred to as
"junk bonds." Junk bonds are securities rated below the top
4 bond rating categories of Standard & Poor's Ratings Group,
Moody's Investors Service, Inc. or another nationally
recognized statistical rating organization or, if unrated,
determined by the investment adviser to be of comparable
credit quality. There is no minimum credit quality standard
for fixed income securities held by the Insight Premier
funds or by the underlying funds.
The prices of high yield bonds can be very volatile and may
decline more steeply following an economic downturn or
increase in interest rates than would the prices of
investment grade debt securities. An adverse economic or
interest rate climate may also impair the ability of high
yield bond issuers to repay principal and interest,
resulting in a default or credit downgrade that may
substantially reduce the yield on, or value of, a fund's
investment.
Repurchase Agreements. Each fund (and the underlying funds
in its portfolio) may, to the extent permitted by its
investment policies, enter into repurchase agreements. A
repurchase agreement consists of the sale to a fund of a
U.S. government security or other debt obligation together
with an agreement to have the selling counterparty
repurchase the security at a specified future date and
repurchase price. If a repurchase agreement counterparty
defaults on its repurchase obligation, a fund may, under
some circumstances, be limited or delayed in disposing of
the repurchase agreement collateral, which could result in a
loss to the fund.
Defensive Investing. For temporary defensive purposes under
abnormal market conditions, Insight Growth Fund and Insight
Moderate Growth Fund may each may hold or invest more than
35% of total assets in cash, investment grade fixed income
securities, repurchase agreements and/or money market fund
shares. Insight Conservative Allocation Fund may hold more
than 35% of total assets in these securities regardless of
market conditions.
Restricted and Illiquid Securities. Each fund may invest up
to 15% of its net assets in illiquid securities, including
certain restricted and private placement securities. It may
be difficult to dispose of illiquid securities quickly or at
a price that fully reflects their fair value. Restricted
securities that are eligible for resale in reliance on Rule
144A under the Securities Act of 1933 and commercial paper
offered under Section 4(2) of the Act are not subject to the
funds' 15% limit on illiquid investments, if they are
determined to be liquid.
An underlying fund whose shares are held by an Insight
Premier fund is obligated to redeem these shares only in an
amount up to 1% of the underlying fund's outstanding
securities during any period of less than 30 days.
Accordingly, because the funds and their affiliates may
together acquire up to 3% of an underlying fund's shares, a
fund that has decided to sell its entire position in an
underlying fund may need up to 90 days to completely
implement this decision. In addition, a fund's holdings of
underlying fund shares representing more than 1% of the
underlying fund's outstanding securities may be subject to
the 15% limitation on illiquid investments. However, the
funds have reserved the right to pay redemption requests in
portfolio securities and therefore, these positions may be
treated as liquid.
An underlying fund may elect to pay the proceeds of a
redemption by an Insight Premier fund through a distribution
in kind of securities of portfolio securities, instead of
cash. If a fund receives securities that are not considered
by Insight Management to be desirable investments, the fund
will incur additional transaction costs in disposing of the
securities.
Foreign Investments. Each fund (and the underlying funds in
its portfolio) may, to the extent permitted by its
investment policies, invest in securities of foreign
issuers. These investments may be in the form of American
Depositary Receipts ("ADRs") or similar securities
representing interests in an underlying foreign security.
ADRs are not necessarily denominated in the same currency as
the underlying foreign securities. If an ADR is not
sponsored by the issuer of the underlying foreign security,
the institution issuing the ADR may have reduced access to
information about the issuer.
Investments in foreign securities involve risks in addition
to those associated with investments in the securities of
U.S. issuers. These risks include less publicly-available
financial and other information about foreign companies;
less rigorous securities regulation; the potential
imposition of currency controls, foreign withholding and
other taxes; and war, expropriation or other adverse
governmental actions. Foreign equity markets may be less
liquid than United States markets and may be subject to
delays in the settlement of portfolio transactions.
Brokerage commissions and other transaction costs in foreign
markets tend to be higher than in the United States. The
value of foreign securities denominated in a foreign
currency will vary in accordance with changes in currency
exchange rates, which can be very volatile.
Mortgage-Backed, Asset-Backed, Indexed and Derivative
Securities. Each fund (and the underlying funds in its
portfolio) may invest in mortgage-backed, asset-backed and
indexed securities. Some of these securities are considered
to be derivative securities. Mortgage-backed securities
represent participation interests in pools of adjustable and
fixed rate mortgage loans. Mortgage-backed securities
either may be issued or guaranteed by agencies of the U.S.
Government or may be privately issued. Unlike conventional
debt obligations, mortgage-backed securities provide monthly
payments derived from the monthly interest and principal
payments (including any prepayments) made by the individual
borrowers on the pooled mortgage loans.
A fund's investments in mortgage-backed securities may
include conventional mortgage pass through securities,
stripped mortgage-backed securities ("SMBS") and certain
classes of multiple class collateralized mortgage
obligations ("CMOs"). Examples of SMBS include interest
only ("IO") and principal only ("PO") securities. Senior
CMO classes typically have priority over less senior and
residual CMO classes as to the receipt of principal and/or
interest payments on the underlying mortgages. The CMO
classes in which the fund may invest include sequential and
parallel pay CMOs, including planned amortization class
securities ("PACs").
The principal and interest on asset-backed securities are
collateralized by pools of assets such as auto loans, credit
card receivables, leases, installment contracts and personal
property. Asset-backed securities generally are not
collateralized as securely as mortgage-backed securities.
A fund may invest in floating rate and other indexed
securities. The interest rate and/or the principal payable
at the maturity of an indexed security may change positively
or inversely in relation to one or more interest rates,
financial indices, currency rates or other reference prices.
In addition, changes in the amount payable on a leveraged
indexed security may be a multiple of changes in the
reference rate or price. Examples of indexed securities
include IOs, POs, inverse floaters, inverse IOs, super
floaters, capped floaters, range floaters, dual index or
yield curve floaters and Cost of Funds Index ("COFI")
floaters.
Mortgage-backed, asset-backed and indexed securities are
subject to different combinations of call (prepayment),
extension, interest rate and other market risks. These
risks and the price volatility of a security are magnified
to the extent that a security has imbedded leverage. Under
adverse market conditions, any of these risks could lead to
a decline in the yield on or market value of these
securities. In addition, these securities can at times be
difficult to price accurately or to liquidate at a fair
price.
Conventional mortgage-backed securities and sequential pay
CMOs are subject to all of these risks, but are typically
not leveraged. PACs and other senior classes of sequential
and parallel pay CMOs usually involve less exposure to
prepayment, extension and interest rate risk than other
mortgage- backed securities, provided that prepayment rates
stay within expected prepayment ranges or collars. Call or
prepayment risk is the risk primarily associated with
mortgage IOs and superfloaters. Mortgage POs, inverse IOs,
inverse floaters, capped floaters and COFI floaters are
especially susceptible to extension and interest rate risk.
Range floaters are subject to the risk that a designated
interest rate will float outside the specified interest rate
collar. Dual index floaters are subject to depreciation if
there is an unfavorable change in the spread between two
designated interest rates.
When-Issued and Forward Commitment Transactions. The funds
(and the underlying funds in their portfolios) may purchase
when-issued securities and enter into other forward
commitments to purchase or sell securities. The value of
securities purchased on a when-issued or forward commitment
basis may decline between the purchase date and the
settlement date.
Futures, Options, Swaps and Currency Contracts. Each fund
(and the underlying funds in its portfolio) may enter into
derivative contracts to hedge against fluctuations in
securities prices or, for non-hedging purposes, as a
substitute for the purchase or sale of securities. These
derivative contracts may include the purchase or sale of
futures contracts on securities, indices or currencies;
options on futures contracts; options on securities, indices
or currencies; interest rate and currency swaps, caps,
floors and collars; and forward contracts to buy or sell
foreign currencies.
All of the funds' transactions in derivative contracts
involve a risk of loss or depreciation due to unanticipated
adverse changes in securities prices, interest rates or
currency exchange rates. A fund incurs liability to a
counterparty in connection with transactions in futures
contracts, swaps and forward contracts and the selling of
options, caps, floors and collars. As a result, the loss on
these derivative contracts may exceed a fund's initial
investment. A fund may also lose the entire premium paid
for purchased options, caps, floors and collars that expire
before they can be profitably exercised by the fund. In
addition, the funds incur transaction costs in opening and
closing positions in derivative contracts.
Derivative contracts may sometimes increase or leverage a
fund's exposure to a particular market risk. Leverage
magnifies the price volatility of derivative contracts held
by a fund. A fund may cover, or partially offset the
leverage inherent in, derivative contracts by maintaining a
segregated account consisting of cash and liquid securities,
by holding offsetting portfolio securities or contracts or
by covering written options.
A fund's success in using derivative contracts to hedge
portfolio assets depends on the degree of price correlation
between the derivative contract and the hedged asset.
Imperfect correlation may be caused by several factors,
including temporary price disparities among the trading
markets for the derivative contract, the assets underlying
the derivative contract and the fund's portfolio assets.
During periods of extreme market volatility, a commodity or
options exchange may suspend or limit trading in an
exchange-traded derivative contract, which may make the
contract temporarily illiquid and difficult to price. Some
over-the-counter options may be illiquid, while others may
be determined to be liquid in accordance with procedures
established by the Trustees. The funds' ability to
terminate over-the-counter options, swaps, caps, floors,
collars and forward contracts may depend on the cooperation
of the counterparties to such contracts. For thinly traded
derivative contracts, the only source of price quotations
may be the selling dealer or counterparty. In addition,
over-the-counter derivative contracts involve a risk that
the counterparty will fail to perform its contractual
obligations.
Portfolio Securities Loans. Each fund (and the underlying
funds in its portfolio) may lend portfolio securities with a
value equal to one-third of its total assets. Each loan
must be fully collateralized by cash or other eligible
assets. The funds may pay reasonable fees in connection
with securities loans. Insight Management will evaluate the
creditworthiness of prospective institutional borrowers and
monitor the adequacy of the collateral to reduce the risk of
default by borrowers from the Insight Premier funds.
Borrowing and Reverse Repurchase Agreements. An underlying
fund in a fund's portfolio may borrow money from banks or
through reverse repurchase agreements for emergency and/or
leverage purposes. Using the cash proceeds of reverse
repurchase agreements to finance the purchase of additional
investments is a form of leverage. Leverage magnifies the
sensitivity of a fund's net asset value to changes in the
market prices of the fund's portfolio securities. However,
each Insight Premier fund will borrow solely for temporary
or emergency (and not for leverage) purposes. The aggregate
amount of such borrowings and reverse repurchase agreements
may not exceed one-third of any fund's total assets.
Short-Term Trading. Each fund is actively managed but is
not expected to have a portfolio turnover rate that exceeds
200%. A 100% annual portfolio turnover rate would be
achieved if each security in a fund's portfolio (other than
securities with less than one year remaining to maturity)
were replaced once during the year. Trading may also
increase transaction costs and the realization of capital
gains, distributions of which are taxable to
shareholders.
Investment Policies and Restrictions. Except as otherwise
stated in this prospectus or the funds' statement of
additional information, the funds' investment objectives,
policies and restrictions are not fundamental and may be
changed without shareholder approval. Each Insight Premier
fund is diversified and therefore may not, with respect to
75% of its total assets, (1) invest more than 5% of its
total assets in the securities of any one issuer, other than
U.S. government securities and other mutual funds, or (2)
acquire more than 10% of the outstanding voting securities
of any one issuer. No Insight Premier fund will concentrate
(invest 25% or more of its total assets) in the securities
of issuers in any one industry.
MANAGEMENT OF THE FUNDS
Trustees. The funds are series of Insight Premier Funds
(the "Trust"). The Trustees of the Trust decide upon
matters of general policy and review the actions of Insight
Management and other service providers. The Trustees of the
Trust are identified in the statement of additional
information.
Investment Adviser. Each fund has retained the services of
Insight Management as investment adviser. Insight
Management provides investment advice and portfolio
management services to the funds. Subject to the
supervision of the Trustees, Insight Management makes the
funds' day-to-day investment decisions, arranges for the
execution of portfolio transactions and generally manages
the funds' investments.
Insight Management, a registered investment adviser, was
established in 1987. Although Insight Management has not
previously managed a mutual fund, it has extensive
experience in managing mutual fund portfolios for high net
worth individuals and corporations with minimum $250,000
account sizes. Insight currently manages over 1,000 client
accounts with assets totaling approximately $670 million.
Insight Management has historically used mutual funds,
rather than individual securities, as the primary investment
vehicle for its client accounts. Eric M. Kobren, the
President and Director of Insight Management, owns all of
Insight Management's stock. Mr. Kobren is also the sole
shareholder of the Distributor and principal shareholder of
Mutual Fund Investors Association, Inc., the publisher of
Fidelity Insight and FundsNet Insight newsletters with
approximately 130,000 paid subscribers.
Mr. Kobren is each fund's primary portfolio manager. Mr.
Kobren has been the president of Insight Management and of
the Distributor since 1987 and of Mutual Fund Investors
Association, Inc. since 1985. Mr. Kobren has been in the
investment business since 1976.
As compensation for the services rendered and related
expenses borne by Insight Management under its investment
advisory agreement with each fund, each fund has agreed to
pay to Insight Management a monthly fee at the annual rate,
as a percentage of that fund's average daily net assets,
shown below.
<TABLE>
<CAPTION>
<S> <C>
Name of Fund Annual Advisory Fee Rate
Insight Growth Fund 0.75%
Insight Moderate Growth Fund 0.75%
Insight Conservative Allocation Fund 0.75%
</TABLE>
An Insight Premier fund may invest in shares of an
underlying mutual fund that (1) makes payments of Rule 12b-1
revenues with respect to shares held by the Insight Premier
fund or (2) whose investment adviser is willing to share a
portion of the underlying fund's advisory fee attributable
to underlying fund shares held by the Insight Premier fund.
Any Rule 12b-1 or revenue sharing payments made with respect
to shares of any underlying fund will be applied to the
advisory fees owed to Insight Management by the affected
Insight Premier fund.
Expenses. Each fund is responsible for all expenses not
expressly assumed by Insight Management or the
Administrator. These include, among other things,
organization expenses, legal fees, audit and accounting
expenses, insurance costs, the compensation and expenses of
the Trustees, the expenses of printing and mailing reports,
notices and proxy statements to fund shareholders,
registration fees under federal and state securities laws,
brokerage commissions, interest, taxes and extraordinary
expenses (such as for litigation). Insight Management has
agreed to reimburse each fund to the extent necessary to
maintain each fund's operating expenses (excluding
investment advisory fees, brokerage commissions, taxes,
interest and litigation, indemnification and other
extraordinary expenses) at 0.25% annually of the fund's
average daily net assets. Although this reimbursement
arrangement can be revoked at any time, Insight Management
currently plans to continue this arrangement through
December 31, 1997.
Administrator. First Data Investor Services Group, Inc.
("First Data") serves as each fund's administrator,
accounting agent and transfer agent. As the funds'
administrator and subject to the oversight of the Trustees,
First Data supervises each fund's day-to-day operations,
other than the management of the fund's investments.
DETERMINATION OF NET ASSET VALUE
Net Asset Value
Each fund computes the net asset value per share ("NAV") of
its shares at the close of regular trading on the New York
Stock Exchange (normally 4:00 p.m. New York time) on each
weekday that is not a holiday listed in the statement of
additional information (a "business day"). If the New York
Stock Exchange closes early, the time of computing the NAV
and the deadlines for purchasing and redeeming shares will
be accelerated to the earlier closing time. The NAV of each
fund's shares is determined by subtracting from the value of
the fund's total assets the amount of the fund's liabilities
and dividing the remainder by the number of outstanding fund
shares. Exchange listed stocks are valued on the basis of
reported market prices or dealer quotations. Shares of
underlying funds are valued at their reported NAVs. All
other investments are valued at fair value, which may
include the use of a pricing service or matrix pricing.
Although the NAV will be calculated at the close of all
regular trading days, the NAV reported to Nasdaq for
distribution to news agencies will be delayed by one
business day.
HOW TO PURCHASE SHARES
Shares of the funds are available to individuals,
institutions, companies and fiduciaries. Prospectuses,
sales material and applications can be obtained from the
Distributor or First Data at the address and telephone
number listed on the back cover of this prospectus. Shares
of each fund may be purchased without a sales charge at the
NAV next calculated after receipt of an order in proper form
by First Data.
Method of Purchase Purchase Procedures
By check:
Initial purchases: You may open an account and make an
initial investment in any fund by sending a check made
payable to Insight Premier Funds and a completed account
application form to First Data Investor Services Group,
Inc., P.O. Box ______, One Exchange Place, Boston, MA
02109. An account application kit is attached to this
prospectus.
Subsequent purchases: Each additional request to purchase
shares by check must contain the account name and number to
permit proper crediting.
All purchases: Checks should be made payable to Insight
Premier Funds. If an order to purchase shares is cancelled
because your check does not clear, you will be responsible
for any resulting losses or fees incurred by the Trust, the
Distributor or First Data in the transaction.
Through broker-dealers: Contact your dealer to find out
about its procedures for processing orders to purchase fund
shares. Purchase orders received by dealers prior to 4:00
p.m. Eastern time on any business day, and transmitted to
First Data by 5:00 p.m. Eastern time on that day receive
that day's net asset value. It is the responsibility of
dealers to transmit properly completed orders so that they
will be received by First Data by 5:00 p.m. Eastern time.
Dealers or other agents may charge you a fee for effecting
transactions.
By wire:
Initial purchases: You may purchase shares of the funds
by wire. Please call First Data at 800-___-____ for
instructions. You should be prepared to give the name in
which the account will be opened, the address, telephone
number and taxpayer identification number for the account
and the name of the bank that will wire the purchase price.
For initial wire purchases, you must confirm the information
provided by telephone by mailing to First Data a completed
account application. If First Data does not receive timely
and complete account information, there may be a delay in
the purchase of fund shares and in the accrual of dividends
(if any).
Subsequent purchases: Each additional wire purchase
request must contain your account name and number to permit
proper crediting.
All purchases: Banks may impose a charge for sending a
wire. First Data does not currently charge any fee for
handling wired funds, but reserves the right to charge
shareholders for this service in the future.
Minimum Investment Amounts. The minimum initial investment
in a fund is $25,000, but the officers of the Trust may, in
their sole discretion, waive or reduce the minimum initial
investment amount for certain investors and financial
intermediaries. The minimum initial investment is waived
for purchases by Trustees, directors, officers and employees
of the Trust and Insight Management, private clients of
Insight Management and members of exempt persons' immediate
families. The minimum subsequent investment is $1,000. The
minimum initial investment for purchases of fund shares
through the following networks is $2,500: Charles Schwab
Mutual Fund Marketplace, Fidelity FundsNetwork and Jack
White Mutual Fund Network.
Other Information About Purchasing Shares. Certificates
representing shares will not be issued. The Trust and the
Distributor reserve the right to limit the amount of
investments and to reject any order to purchase fund shares.
HOW TO REDEEM SHARES
Shares of the funds may be redeemed on each business day.
You will receive the NAV next determined after the receipt
by First Data of a redemption request in the proper form.
Payment is ordinarily sent by mail or by wire within three
business days after the effective date of the redemption.
However, the payment of redemption proceeds for shares
purchased by check will be made only after the check has
cleared, which may take up to fifteen days from the purchase
date. The Trust reserves the right to suspend the right of
redemption or to postpone the date of payment for more than
three business days under unusual circumstances as
determined by the SEC. In addition, the Trust may redeem
shares involuntarily (1) as described below under
"Redemptions of Sub-Minimum Accounts" or (2) if the
shareholder's exchange privileges have been cancelled for
the reasons described below under "Exchange Privilege."
Method of Redemption Redemption Procedures
By mail: Shares of the funds may be redeemed by sending a
written redemption request to First Data Investor Services
Group, Inc., P.O. Box ______, One Exchange Place, Boston,
MA 02109. The request must state the number of shares or
the dollar amount to be redeemed and the applicable account
number. The request must be signed exactly as your name
appears on the Trust's account records. If the shares to be
redeemed have a value of $50,000 or more, your signature
must be guaranteed by one of the eligible guarantor
institutions listed in "Signature Guarantees" below.
Written redemption requests may direct that the proceeds be
deposited directly in the bank account or brokerage account
designated on an investor's account application for
telephone redemptions.
By telephone: To redeem by telephone, call First Data
toll-free at 800-___-____. The proceeds will be sent by
mail to the address designated on your account or wired
directly to your existing account in any commercial bank or
brokerage firm in the United States, as designated on the
application.
The telephone redemption privilege is automatically
available to you. You may change the bank or brokerage
account designated under this procedure at any time by
sending to First Data a written request or completed
supplemental telephone redemption authorization form
(available from First Data) that has been signature
guaranteed by any eligible guarantor institution. Further
documentation will be required to change the designated
account if shares are held by a company, fiduciary or other
organization.
Through broker-dealers: Contact your dealer to find out
about its procedures for processing orders to redeem fund
shares. Redemption orders received by dealers prior to 4:00
p.m. Eastern time on any business day, and transmitted to
First Data by 5:00 p.m. Eastern time on that day, receive
that day's NAV. It is the responsibility of broker-dealers
to promptly transmit wire redemption orders. Broker-dealers
may impose a fee for this service.
Payment of Redemption Proceeds by Wire or ACH Transfer. For
each payment of redemption proceeds by wire, the funds'
custodian will charge a wire fee of $10.00. The funds and
the custodian reserve the right to change the processing
fee. Your bank or brokerage firm may also impose a charge
for processing the wire. In the event that the wire
transfer of redemption proceeds is impossible or
impracticable, the redemption proceeds will be sent by mail
to the designated account.
Redemption requests may direct that the proceeds be
deposited directly in a shareholder's account with a
commercial bank or other depository institution by way of an
Automated Clearing House (ACH) transaction. There is
currently no charge for ACH transactions. Contact First
Data for more information about ACH transactions.
Signature Guarantees. Written requests to redeem shares
above a specified amount or to change the address or account
information for telephone redemptions should be accompanied
by a signature guarantee. The institutions from whom the
funds will accept a signature guarantee include banks,
brokers and dealers, credit unions, national securities
exchanges, registered securities associations, clearing
agencies and savings associations. In addition,
shareholders that are corporations, partnerships, trusts,
estates or other associations may be required to furnish
appropriate evidence that a redemption request has been
properly authorized.
Responsibility for Unauthorized Telephone Instructions.
Neither the Trust, the Distributor, First Data nor their
respective affiliates will be liable for complying with
telephone instructions which they reasonably believe to be
genuine or for any loss, damage, cost or expense in acting
on such telephone instructions. The shareholder will bear
the risk of any such loss. The Trust and First Data will
employ reasonable procedures to determine that telephone
instructions are genuine. If the Trust or First Data does
not employ such procedures, it may be liable for losses due
to unauthorized or fraudulent instructions. Such procedures
may include, among others, requiring forms of personal
identification prior to acting upon telephone instructions,
providing written confirmation of the transactions and/or
tape recording telephone instructions.
Redemptions of Sub-Minimum Accounts. The Trust reserves the
right to require you to close your account if at any time
the value of the shares is less than $5,000 (based on actual
amounts invested, without regard to market fluctuations) or
such other minimum amount as the Trustees may establish.
After notification of the Trust's intention to close your
account, you will be given sixty days to increase the value
of your account to the minimum amount.
EXCHANGE PRIVILEGE
Shares of each fund may be exchanged for shares of the other
funds at net asset value. You may request an exchange by
sending a written request to First Data. The request must
be signed exactly as your name appears on the Trust's
account records. Exchanges may also be requested by
telephone. If you are unable to execute a transaction by
telephone (for example during times of unusual market
activity) you should consider requesting the exchange by
mail. An exchange will be effected at the next determined
NAV of each fund after receipt of a request by First Data.
Exchanges may only be made for shares of funds then offered
for sale in your state of residence and are subject to the
applicable minimum initial investment requirements of the
fund whose shares will be received in the exchange. To
protect the interests of other shareholders of the fund, a
fund may cancel the exchange privileges of any persons that,
in the opinion of the fund, are using market timing
strategies or making more than four exchanges per owner or
controlling person per calendar year. The exchange
privilege may be modified or terminated by the Trustees upon
60 days' prior notice to shareholders. An exchange involves
a sale of fund shares, which may cause you to recognize a
gain or loss for tax purposes.
SHAREHOLDER SERVICES
Call First Data toll-free at 800-___-____ for additional
information about the shareholder services described below.
Systematic Withdrawal Plan. If the shares in your account
have a value of at least $25,000, you may elect to receive,
or may designate another person to receive, monthly,
quarterly, or annual payments in a specified amount. There
is no charge for this service.
Automatic Investment Plan. You may make automatic monthly
investments in the funds from your bank, savings and loan or
other depository institution account. The minimum initial
and subsequent investments must be $25,000 and $500 under
the plan. The Trust pays the costs associated with these
transfers, but reserves the right to make reasonable charges
for this service. A depository institution may impose its
own charge for debiting your account, which would reduce the
return from an investment in a fund.
Tax-Deferred Retirement Plans. Shares of the funds are
available in connection with the following tax-deferred
retirement plans: Keogh Plans for self-employed individuals;
SEP and SARSEP plans; individual retirement account (IRA)
plans for individuals and their non-employed spouses; and
qualified pension and profit-sharing plans for employees,
including 401(k) plans and 403(b)(7) custodial accounts for
employees of public school systems, hospitals, colleges and
other non-profit organizations. Contact the Insight Premier
funds for further information and the necessary forms.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Dividends and Distributions. The net investment income and
realized net capital gains, if any, of Insight Growth Fund,
Insight Moderate Growth Fund and Insight Conservative
Allocation Fund will ordinarily be declared and paid in
accordance with the following schedule.
<TABLE>
<CAPTION>
<S> <C>
Type of Distribution and Name of Fund Declared and Paid
Dividends from net investment income
Insight Growth Fund Declared and paid annually
Insight Moderate Growth Fund Declared and paid annually
Insight Conservative Allocation Fund Declared and paid
quarterly
Distributions from realized net capital gains
All funds Declared and paid annually
</TABLE>
Dividends and distributions will be payable to shareholders
of record on the record date. If investors purchase shares
shortly before the record date of a dividend or
distribution, they may be subject to adverse tax
consequences as described under "Taxes."
A fund's dividends and distributions are paid in additional
shares of the same fund unless the shareholder elects to
have them paid in cash. Cash dividends and distributions
are paid by a check and mailed to the shareholder's address
of record. The tax treatment of dividends and distributions
is the same whether they are paid in shares or cash.
Taxes. Each fund is treated as a separate entity for tax
purposes. Each fund intends to elect to be treated and
qualify as a regulated investment company under Subchapter M
of the Internal Revenue Code of 1986 (the "Code"). To
qualify as such, each fund must satisfy certain requirements
relating to the sources of its income, diversification of
its assets and distribution of its income to shareholders.
As a regulated investment company, each fund will not be
subject to federal income or excise tax on any net
investment income and net realized capital gains that are
distributed to shareholders in accordance with certain
timing requirements of the Code.
Dividends paid by a fund from net investment income, certain
net foreign currency gains, and the excess of short-term
capital gain over net long-term capital loss will be taxable
to its shareholders as ordinary income. Distributions paid
by a fund from the excess of net long-term capital gain over
net short-term capital loss and designated as "capital gain
dividends" will be taxable as long-term capital gains
regardless of how long shareholders have held their shares.
These tax consequences will apply whether distributions are
received in additional shares or in cash. The dividends
paid by each fund to its corporate shareholders that are
attributable to qualifying dividends received by the fund
from U.S. domestic corporations may be eligible, in the
hands of these corporate shareholders, for the corporate
dividends-received deduction, subject to certain holding
period requirements and debt financing limitations under the
Code. Shareholders will be informed annually about the
amount and character, for federal income tax purposes, of
distributions received from the funds.
Investors should consider the adverse tax implications of
buying fund shares immediately before a distribution.
Investors who purchase shares shortly before the record date
for a distribution will pay a per share price that includes
the value of the anticipated distribution and will be taxed
on the distribution even though the distribution represents
a return of a portion of the purchase price.
Redemptions of shares, whether for cash or in-kind, are
taxable events on which a shareholder may recognize a gain
or loss. Individuals and certain other shareholders may be
subject to 31% backup withholding of federal income tax on
distributions and redemptions (including exchanges) if they
fail to furnish their correct taxpayer identification number
and certain certifications or if they are otherwise subject
to backup withholding.
In addition to federal taxes, a shareholder may be subject
to state, local or other taxes on distributions received
from the funds, redemptions or exchanges of fund shares, or
the value of their investment in a fund. Shareholders are
urged to consult their own tax advisers concerning specific
questions about federal, state, local or other taxes.
ADDITIONAL INFORMATION
Shareholder Reports and Confirmations. Each fund sends to
its shareholder annual and semiannual reports. The
financial statements appearing in annual reports are audited
by independent accountants. Shareholders will also be sent
confirmations of each transaction and monthly statements
reflecting all account activity.
Performance Advertising. Each fund may advertise historical
performance information and compare its performance to other
investments or relevant indexes. An advertisement may also
include data supplied by Lipper Analytical Services, Inc.,
Micropal Inc., Morningstar Inc., Ibbotson Associates and
other industry publications or services.
The funds may advertise average annual total return and
other forms of total return data. Average annual total
return is determined by computing the average annual
percentage change in value of $1,000 invested at NAV for
specified periods ending with the most recent calendar
quarter. The total return calculation assumes a complete
redemption of the investment at the end of the relevant
period. Each fund may also advertise total return on a
cumulative, average, year-by-year or other basis for
specified periods. The investment results of a fund will
fluctuate over time and should not be considered a
representation of the fund's performance in the future.
In addition, each fund may advertise its yield. Yield
reflects a fund's rate of income on portfolio investments as
a percentage of its NAV. The yield on fund shares is
computed by annualizing the result of dividing the net
investment income per share over a 30 day period by the NAV
on the last day of that period. Yield is calculated by
accounting methods that are standardized for all stock and
bond funds and differ from the methods used for other
accounting purposes. Therefore, the yield on fund shares
may not equal the income paid on these shares or the income
reported in a fund's financial statements.
Organization. The Trust was organized on September 13,
1996 as a Massachusetts business trust. The Trust currently
has three series of shares of a single class, which are the
funds and shares offered by this prospectus. The Trustees
reserve the right to authorize and issue additional series
and classes of shares.
Shareholders of each fund are entitled to one full or
fractional vote for each share. There is no cumulative
voting and shares have no preemption or conversion rights.
The Trust does not intend to hold annual meetings of
shareholders. The Trustees will call special meetings of
shareholders to the extent required by the Trust's
Declaration of Trust or the Investment Company Act of 1940
(the "1940 Act"). The 1940 Act requires the Trustees, under
certain circumstances, to call a meeting to allow
shareholders to vote on the removal of a Trustee and to
assist shareholders in communicating with each other.
INSIGHT PREMIER FUNDS
Insight Growth Fund
Insight Moderate Growth Fund
Insight Conservative Allocation Fund
Prospectus
November __, 1996
<TABLE>
<CAPTION>
<S> <C>
INVESTMENT ADVISER ADMINISTRATOR
Insight Management, Inc. First Data Investor
Services Group, Inc.
20 William Street, Suite 310 One Exchange Place
P.O. Box 9135 Boston, MA 02109-2873
Wellesley Hills, MA 02181
Toll-free: 1-800-566-4274
PRINCIPAL DISTRIBUTOR CUSTODIAN
Insight Brokerage Services, Inc. Boston Safe
Deposit and Trust Company
20 William Street, Suite 310 One Boston Place
P.O. Box 9135 Boston, MA 02108
Wellesley Hills, MA 02181
Toll-free: 1-800-566-4274
TRANSFER AGENT LEGAL COUNSEL
First Data Investor Hale and Dorr
Services Group, Inc. 60 State Street
4400 Computer Drive Boston, MA 02109
Westborough, MA 01581
Toll-free: 1-800-___-____
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, MA 02109
</TABLE>
PART B: INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL
INFORMATION
November , 1996
INSIGHT PREMIER FUNDS
STATEMENT OF ADDITIONAL INFORMATION
This statement of additional information is not a prospectus,
but expands upon and supplements the information contained in
the prospectus of Insight Premier Funds (the "Trust"), dated
November , 1996, as supplemented from time to time. The
statement of additional information should be read in
conjunction with the prospectus. The Trust's prospectus may be
obtained by writing to the Trust at P.O. Box , Boston,
Massachusetts 02109 or by telephoning the Trust toll free at
800- . Capitalized terms not otherwise defined herein have
the same meaning as in the prospectus.
TABLE OF CONTENTS
PAGE
I. INVESTMENT OBJECTIVES AND POLICIES 2
II. INVESTMENT RESTRICTIONS 16
III. MANAGEMENT OF THE TRUST AND THE FUNDS
A. Trustees and Officers 17
B. Investment Adviser 20
C. Distributor 21
D. Administrator, Transfer Agent and Dividend Paying
Agent 22
IV. PURCHASE, REDEMPTION AND DETERMINATION 22
OF NET ASSET VALUE
V. SPECIAL REDEMPTIONS 23
VI. PORTFOLIO TRANSACTIONS 23
VII. PERFORMANCE INFORMATION
A. Total Return 25
B. Non-Standardized Total Return 26
C. Other Information Concerning Fund Performance 26
VIII. DIVIDENDS, DISTRIBUTIONS AND TAXES 32
IX. CUSTODIAN, COUNSEL AND INDEPENDENT
ACCOUNTANTS 36
X. DESCRIPTION OF THE TRUST 36
XI. ADDITIONAL INFORMATION 37
XII. FINANCIAL STATEMENTS 38
APPENDIX 41
I. INVESTMENT OBJECTIVES AND POLICIES
Insight Premier Funds is a no-load open-end, diversified
investment company, registered as such under the Investment
Company Act of 1940, as amended (the "1940 Act"). The Trust
currently consists of three separate series, each with
different investment objectives (each, a "fund" and
collectively, the "funds"). The funds seek to achieve their
investment objectives by investing primarily in shares of other
investment companies ("underlying funds" or "mutual funds").
As of the date of this statement of additional information, the
Trust's series are:
INSIGHT GROWTH FUND, which seeks long-term growth of
capital without regard to current income and with a volatility
level approximating that of the S&P 500 Index;
INSIGHT MODERATE GROWTH FUND, which seeks long-term
growth of capital without regard to current income and with a
volatility level below that of the S&P 500 Index; and
INSIGHT CONSERVATIVE ALLOCATION FUND, which seeks enough
long-term growth of capital to maintain purchasing power in the
face of inflation (as measured by the Consumer Price Index)
with a volatility level below that of the S&P 500 Index.
Each fund will concentrate its investments in the shares
of mutual funds. Mutual funds pool the investments of many
investors and use professional management to select and
purchase securities of different issuers for their portfolios.
Some mutual funds invest in particular types of securities
(i.e., equity or debt), some concentrate in certain industries,
and others may invest in a variety of securities to achieve a
particular type of return or tax result. Some of the
underlying funds are, like the funds, "open-end" funds and, as
such, stand ready to redeem their shares. Any investment in a
mutual fund involves risk. Even though the funds may invest in
a number of mutual funds, this investment strategy cannot
eliminate investment risk. Investing in mutual funds through a
fund involves additional and duplicative expenses and certain
tax results that would not be present if an investor were to
make a direct investment in the underlying funds. See "Expense
Information" and "Dividends, Distributions and Taxes" in the
prospectus. A fund, together with the other funds and any
"affiliated persons" (as such term is defined in the 1940 Act)
may purchase only up to 3% of the total outstanding securities
of an underlying mutual fund. Accordingly, when affiliated
persons of Insight Management, Inc. ("Insight Management" or
the "Adviser") hold shares of any of the underlying funds, each
fund's ability to invest fully in shares of such mutual funds
is restricted, and the Adviser must then, in some instances,
select alternative investments for the fund that would not have
been its first investment choice.
The 1940 Act also provides that a mutual fund whose
shares are purchased by a fund is obliged to redeem shares held
by the fund only in an amount up to 1% of the underlying mutual
fund's outstanding securities during any period of less than 30
days. Accordingly, because the funds and their affiliates may
together acquire up to 3% of an underlying fund's shares, a
fund that has decided to sell its entire position in an
underlying fund may need up to 90 days to completely implement
this decision. In addition, shares held by a fund in excess of
1% of an underlying mutual fund's outstanding securities may be
considered not readily marketable securities. Together with
other illiquid securities, these mutual funds may not exceed
15% of net assets of each Insight Premier fund. However, since
the funds have reserved the right to pay redemption requests in
portfolio securities, these positions may be treated as liquid.
These limitations are not fundamental and may therefore be
changed by the Board of Trustees of the Trust without
shareholder approval. Under certain circumstances an
underlying fund may determine to make payment of a redemption
by a fund (wholly or in part) by a distribution in kind of
securities from its portfolio, instead of in cash. As a
result, a fund may hold securities distributed by an underlying
fund until such time as Insight Management determines it
appropriate to dispose of such securities. Such disposition
will impose additional costs on the fund.
In the case of an issuer that concentrates in a
particular industry or industry group, events may occur that
impact that industry or industry group more significantly than
the stock market as a whole. Accordingly, an investment in an
investment company that concentrates can normally be expected
to have greater fluctuations in value than an investment in a
fund that includes a broader range of investments. To the
extent a fund invests in investment companies that do not have
a policy of concentration, the impact of conditions affecting
an industry or industry group will be decreased.
Investment decisions by the investment advisers of the
underlying funds are made independently of the funds and the
Adviser. At any particular time, one underlying fund may be
purchasing shares of an issuer whose shares are being sold by
another underlying fund. As a result, a fund would incur
indirectly certain transaction costs without accomplishing any
investment purpose. Each fund limits its investments in
underlying funds to mutual funds whose shares a fund may
purchase without the imposition of an initial sales load. The
underlying funds may incur distribution expenses in the form of
Rule 12b-1 fees. An investor could invest directly in the
underlying funds. By investing in mutual funds indirectly
through the funds, the investor bears not only his or her
proportionate share of the expenses of the funds (including
operating costs and investment advisory and administrative
fees) but also, indirectly, similar expenses of the underlying
funds. An investor may indirectly bear expenses paid by
underlying funds related to the distribution of such mutual
funds' shares. As a result of the funds' policies of investing
in other mutual funds, an investor may receive taxable capital
gains distributions to a greater extent than would be the case
if he or she invested directly in the underlying funds. See
"Dividends, Distributions and Taxes" below.
The types of securities that may be acquired by the funds
and the underlying funds and the various investment techniques
which either may employ, including the risks associated with
these investments, are described herein.
FOREIGN INVESTMENTS
Foreign Securities. A fund or an underlying fund may invest a
portion of its assets in securities of foreign issuers.
Investments in foreign securities involve special risks and
considerations that are not present when a fund invests in
domestic securities.
Exchange Rates. Since a fund or an underlying fund may
purchase securities denominated in foreign currencies, changes
in foreign currency exchange rates will affect the value of the
assets from the perspective of U.S. investors. Changes in
foreign currency exchange rates may also affect the value of
dividends and interest earned, gains and losses realized on the
sale of securities and net investment income and gains, if any,
to be distributed to the investor by a mutual fund. The rate
of exchange between the U.S. dollar and other currencies is
determined by the forces of supply and demand in foreign
exchange markets. These forces are affected by the
international balance of payments and other economic and
financial conditions, government intervention, speculation and
other factors. A fund or an underlying fund may seek to
protect itself against the adverse effects of currency exchange
rate fluctuations by entering into currency-forward, futures,
options or swaps contracts. Hedging transactions will not,
however, always be fully effective in protecting against
adverse exchange rate fluctuations. Furthermore, hedging
transactions involve transaction costs and the risk that the
fund or the underlying fund will lose money, either because
exchange rates move in an unexpected direction, because another
party to a hedging contract defaults, or for other reasons.
Exchange Controls. The value of foreign investments and the
investment income derived from them may also be affected
(either favorably or unfavorably) by exchange control
regulations. Although it is expected that a fund or an
underlying fund will invest only in securities denominated in
foreign currencies that are fully exchangeable into U.S.
dollars without legal restriction at the time of investment,
there is no assurance that currency controls will not be
imposed after the time of investment. In addition, the value
of foreign fixed-income investments will fluctuate in response
to changes in U.S. and foreign interest rates.
Limitations of Foreign Markets. There is often less
information publicly available about a foreign issuer than
about a U.S. issuer. Foreign issuers are not generally subject
to accounting, auditing, and financial reporting standards and
practices comparable to those in the United States. The
securities of some foreign issuers are less liquid and at times
more volatile than securities of comparable U.S. issuers.
Foreign brokerage commissions, custodial expenses, and other
fees are also generally higher than for securities traded in
the United States. Foreign settlement procedures and trade
regulations may involve certain risks (such as delay in payment
or delivery of securities or in the recovery of a fund's assets
held abroad) and expenses not present in the settlement of
domestic investments. A delay in settlement could hinder the
ability of a fund or an underlying fund to take advantage of
changing market conditions, with a possible adverse effect on
net asset value. There may also be difficulties in enforcing
legal rights outside the United States.
Foreign Laws, Regulations and Economies. There may be a
possibility of nationalization or expropriation of assets,
imposition of currency exchange controls, confiscatory
taxation, political or financial instability, and diplomatic
developments that could affect the value of a fund's or an
underlying fund's investments in certain foreign countries.
Legal remedies available to investors in certain foreign
countries may be more limited than those available with respect
to investments in the United States or in other foreign
countries. The laws of some foreign countries may limit a fund
or an underlying fund's ability to invest in securities of
certain issuers located in those countries. Moreover,
individual foreign economies may differ favorably or
unfavorably from the U.S. economy in such respects as growth or
gross national product, inflation rate, capital reinvestment,
resource self-sufficiency and balance of payment positions.
Foreign Tax Considerations. Income (possibly including, in
some cases, capital gains) received by a fund or an underlying
fund from sources within foreign countries may be reduced by
withholding and other taxes imposed by such countries. Tax
conventions between certain countries and the United States may
reduce or eliminate such taxes in some cases. Any such taxes
paid by a fund will reduce the net income of the fund available
for distribution. Special tax considerations apply to foreign
securities.
Emerging Markets. Risks may be intensified in the case of
investments by a fund or an underlying fund in emerging markets
or countries with limited or developing capital markets.
Security prices in emerging markets can be significantly more
volatile than in more developed nations, reflecting the greater
uncertainties of investing in less established markets and
economies. In particular, countries with emerging markets may
have relatively unstable governments, present the risk of
nationalization of businesses, restrictions on foreign
ownership, or prohibitions on repatriation of assets, and may
have less protection of property rights than more developed
countries. The economies of countries with emerging markets
may be predominantly based on only a few industries, may be
highly vulnerable to changes in local or global trade
conditions, and may suffer from extreme and volatile debt or
inflation rates. Local securities markets may trade a small
number of securities and may be unable to respond effectively
to increases in trading volume, potentially making prompt
liquidation of substantial holdings difficult or impossible at
times. Securities of issuers located in countries with
emerging markets may have limited marketability and may be
subject to more abrupt or erratic price movements. Debt
obligations of developing countries may involve a high degree
of risk, and may be in default or present the risk of default.
Governmental entities responsible for repayment of the debt may
be unwilling to repay principal and interest when due, and may
require renegotiation or rescheduling of debt payments. In
addition, prospects for repayment of principal and interest may
depend on political as well as economic factors.
Foreign Currency Transactions. A fund or an underlying fund
may enter into forward contracts to purchase or sell an agreed-
upon amount of a specific currency at a future date that may be
any fixed number of days from the date of the contract agreed
upon by the parties at a price set at the time of the contract.
Under such an arrangement, a fund would, at the time it enters
into a contract to acquire a foreign security for a specified
amount of currency, purchase with U.S. dollars the required
amount of foreign currency for delivery at the settlement date
of the purchase; the fund would enter into similar forward
currency transactions in connection with the sale of foreign
securities. The effect of such transactions would be to fix a
U.S. dollar price for the security to protect against a
possible loss resulting from an adverse change in the
relationship between the U.S. dollar and the particular foreign
currency during the period between the date the security is
purchased or sold and the date on which payment is made or
received (usually 3 to 14 days). These contracts are traded in
the interbank market between currency traders (usually large
commercial banks) and their customers. A forward contract
usually has no deposit requirement and no commissions are
charged for trades. While forward contracts tend to minimize
the risk of loss due to a decline in the value of the currency
involved, they also tend to limit any potential gain that might
result if the value of such currency were to increase during
the contract period.
Calculation of Net Asset Value. The funds and the underlying
funds will generally calculate their net asset values and
complete orders to purchase, exchange or redeem shares only on
a Monday through Friday basis, excluding holidays on which the
New York Stock Exchange is closed (see "Purchase, Redemption
and Determination of Net Asset Value" below). Foreign
securities in which the funds or the underlying funds may
invest may be listed primarily on foreign stock exchanges that
may trade on other days (i.e., Saturday). Accordingly, the net
asset value of a fund's or an underlying fund's portfolio may
be significantly affected by such trading on days when Insight
Management does not have access to the underlying funds and an
investor does not have access to the funds.
Portfolio Securities Loans. A fund or an underlying fund may
lend its portfolio securities as long as: (1) the loan is
continuously secured by collateral consisting of U.S.
government securities or cash or cash equivalents maintained on
a daily mark-to-market basis in an amount at least equal to the
current market value of the securities loaned; (2) the fund or
the underlying fund may at any time call the loan and obtain
the securities loaned; (3) the fund or the underlying fund will
receive any interest or dividends paid on the loaned
securities; and (4) the aggregate market value of the
securities loaned will not at any time exceed one-third of the
total assets of the fund or the underlying fund. Lending
portfolio securities involves risk of delay in the recovery of
the loaned securities and in some cases, the loss of rights in
the collateral if the borrower fails.
Short Sales. A fund or an underlying fund may sell securities
short. In a short sale the fund sells stock it does not own
and makes delivery with securities "borrowed" from a broker.
The fund then becomes obligated to replace the security
borrowed by purchasing it at the market-price at the time of
replacement. This price may be more or less than the price at
which the security was sold by the fund. Until the security is
replaced, the fund is obligated to pay to the lender any
dividends or interest accruing during the period of the loan.
In order to borrow the security, the fund may be required to
pay a premium that would increase the cost of the security
sold. The proceeds of the short sale will be retained by the
broker, to the extent necessary to meet margin requirements,
until the short position is closed out.
When it engages in short sales, a fund or an underlying
fund must also deposit in a segregated account an amount of
cash or U.S. government securities equal to the difference
between (1) the market value of the securities sold short at
the time they were sold short and (2) the value of the
collateral deposited with the broker in connection with the
short sale (not including the proceeds from the short sale).
While the short position is open, the fund must maintain daily
the segregated account at such a level that (1) the amount
deposited in the account plus the amount deposited with the
broker as collateral equals the current market value of the
securities sold short, and (2) the amount deposited in it plus
the amount deposited with the broker as collateral is not less
than the market value of the securities at the time they were
sold short. Depending upon market conditions, up to 80% of the
value of a fund's net assets may be deposited as collateral for
the obligation to replace securities borrowed to effect short
sales and allocated to a segregated account in connection with
short sales.
A fund will incur a loss as a result of a short sale if
the price of the security increases between the date of the
short sale and the date on which the fund replaces the borrowed
security. The fund will realize a gain if the security
declines in price between such dates. The amount of any gain
will be decreased and the amount of any loss increased by the
amount of any premium, dividends or interest the fund may be
required to pay in connection with a short sale.
Short Sales "Against the Box". A short sale is "against the
box" if at all times when the short position is open the fund
or an underlying fund owns an equal amount of the securities or
securities convertible into, or exchangeable without further
consideration for, securities of the same issue as the
securities sold short. Such a transaction serves to defer a
gain or loss for federal income tax purposes.
Industry Concentration. An underlying fund may concentrate its
investments within one industry. Since the investment
alternatives within an industry are limited, the value of the
shares of such a fund may be subject to greater market
fluctuation than an investment in a fund that invests in a
broader range of securities.
Master Demand Notes. An underlying fund (particularly an
underlying money market fund) may invest up to 100% of its
assets in master demand notes. These are unsecured obligations
of U.S. corporations redeemable upon notice that permit
investment by a mutual fund of fluctuating amounts at varying
rates of interest pursuant to direct arrangements between the
mutual fund and the issuing corporation. Because master demand
notes are direct arrangements between the mutual fund and the
issuing corporation, there is no secondary market for the
notes. The notes are, however, redeemable at face value plus
accrued interest at any time.
Options. A fund or an underlying fund may write (sell) listed
call options ("calls") if the calls are covered through the
life of the option. A call is covered if the fund owns the
optioned securities. When a fund writes a call, it receives a
premium and gives the purchaser the right to buy the underlying
security at any time during the call period (usually not more
than nine months in the case of common stock) at a fixed
exercise price regardless of market price changes during the
call period. If the call is exercised, the fund will forgo any
gain from an increase in the market price of the underlying
security over the exercise price.
A fund or an underlying fund may purchase a call on
securities to enhance total return or to effect a "closing
purchase transaction." This is the purchase of a call covering
the same underlying security and having the same exercise price
and expiration date as a call previously written by the fund on
which it wishes to terminate its obligation. If the fund is
unable to effect a closing purchase transaction, it will not be
able to sell the underlying security until the call previously
written by the fund expires (or until the call is exercised and
the fund delivers the underlying security).
A fund or an underlying fund may write and purchase put
options ("puts"). When a fund writes a put, it receives a
premium and gives the purchaser of the put the right to sell
the underlying security to the fund at the exercise price at
any time during the option period. When a fund purchases a
put, it pays a premium in return for the right to sell the
underlying security at the exercise price at any time during
the option period. A fund or an underlying fund also may
purchase stock index puts, which differ from puts on individual
securities in that they are settled in cash based upon values
of the securities in the underlying index rather than by
delivery of the underlying securities. Purchase of a stock
index put is designed to protect against a decline in the value
of the portfolio generally rather than an individual security
in the portfolio. If any put is not exercised or sold, it will
become worthless on its expiration date.
A mutual fund's option positions may be closed out only
on an exchange which provides a secondary market for options of
the same series, but there can be no assurance that a liquid
secondary market will exist at any given time for any
particular option. It is impossible to predict to what extent
liquid markets will develop or continue.
A custodian, or a securities depository acting for it,
generally acts as escrow agent for the securities upon which
the fund has written puts or calls, or as to other securities
acceptable for such escrow so that no margin deposit is
required of the fund. Until the underlying securities are
released from escrow, they cannot be sold by the fund.
In the event of a shortage of the underlying securities
deliverable in the exercise of an option, the Options Clearing
Corporation has the authority to permit other generally
comparable securities to be delivered in fulfillment of option
exercise obligations. If the Options Clearing Corporation
exercises its discretionary authority to allow such other
securities to be delivered, it may also adjust the exercise
prices of the affected options by setting different prices at
which otherwise ineligible securities may be delivered. As an
alternative to permitting such substitute deliveries, the
Options Clearing Corporation may impose special exercise
settlement procedures.
Options Trading Markets. Options in which the funds or the
underlying funds will invest are generally listed on exchanges.
Exchanges on which such options currently are traded are the
Chicago Board Options Exchange and the American, New York,
Pacific, and Philadelphia Stock Exchanges. Options on some
securities may not, however, be listed on any exchange, but may
be traded in the over-the-counter market. Options traded in
the over-the-counter market involve the additional risk that
securities dealers participating in such transactions would
fail to meet their obligations to the fund. The use of options
traded in the over-the-counter market may be subject to
limitations imposed by certain state securities authorities.
In addition to the limits on the use of options discussed
herein, a mutual fund is subject to the investment restrictions
described in its prospectus and the statement of additional
information.
The staff of the Securities and Exchange Commission
currently takes the position that the premiums that a mutual
fund pays for the purchase of unlisted options, and the value
of securities used to cover unlisted options written by the
fund, are considered to be invested in illiquid securities or
assets for the purpose of calculating whether a mutual fund is
in compliance with its limitation on illiquid investments.
Futures Contracts. A fund or an underlying fund may enter into
futures contracts for the purchase or sale of debt securities
and stock indexes. A futures contract is an agreement between
two parties to buy and sell a security or an index for a set
price on a future date. Futures contracts are traded on
designated "contract markets" which, through their clearing
corporations, guarantee performance of the contracts.
A financial futures contract sale creates an obligation
by the seller to deliver the type of financial instrument
called for in the contract in a specified delivery month for a
stated price. A financial futures contract purchase creates an
obligation by the purchaser to take delivery of the type of
financial instrument called for in the contract in a specified
delivery month at a stated price. The specific instruments
delivered or taken, respectively, at settlement date are not
determined until on or near such date. The determination is
made in accordance with the rules of the exchange on which the
futures contract sale or purchase was made. Futures contracts
are traded in the United States only on commodity exchanges or
boards of trade (known as "contract markets") approved for such
trading by the Commodity Futures Trading Commission (the
"CFTC"), and must be executed through a futures commission
merchant or brokerage firm that is a member of the relevant
contract market.
Although futures contracts by their terms call for actual
delivery or acceptance of commodities or securities, in most
cases the contracts are closed out before the settlement date
without the making or taking of delivery. Closing out a
futures contract sale is effected by purchasing a futures
contract for the same aggregate amount of the specific type of
financial instrument or commodity with the same delivery date.
If the price of the initial sale of the futures contract
exceeds the price of the offsetting purchase, the seller is
paid the difference and realizes a gain. On the other hand, if
the price of the offsetting purchase exceeds the price of the
initial sale, the seller realizes a loss. The closing out of a
futures contract purchase is effected by the purchaser's
entering into a futures contract sale. If the offsetting sale
price exceeds the purchase price, the purchaser realizes a
gain, and if the initial purchase price exceeds the offsetting
sale price, the purchaser realizes a loss.
A fund or an underlying fund may sell financial futures
contracts in anticipation of an increase in the general level
of interest rates. Generally, as interest rates rise, the
market value of the securities held by a fund will fall, thus
reducing its net asset value. This interest rate risk may be
reduced without the use of futures as a hedge by selling such
securities and either reinvesting the proceeds in securities
with shorter maturities or by holding assets in cash. This
strategy, however, entails increased transaction costs in the
form of dealer spreads and brokerage commissions and would
typically reduce the fund's average yield as a result of the
shortening of maturities.
The sale of financial futures contracts serves as a means
of hedging against rising interest rates. As interest rates
increase, the value of a fund's short position in the futures
contracts will also tend to increase, thus offsetting all or a
portion of the depreciation in the market value of the fund's
investments being hedged. While a fund will incur commission
expenses in selling and closing out futures positions (by
taking an opposite position in the futures contract),
commissions on futures transactions tend to be lower than
transaction costs incurred in the purchase and sale of
portfolio securities.
A fund or an underlying fund may purchase interest rate
futures contracts in anticipation of a decline in interest
rates when it is not fully invested. As such purchases are
made, a fund would probably expect that an equivalent amount of
futures contracts will be closed out.
Unlike when a fund purchases or sells a security, no
price is paid or received by the fund upon the purchase or sale
of a futures contract. Upon entering into a contract, the fund
is required to deposit with its custodian in a segregated
account in the name of the futures broker an amount of cash
and/or U.S. government securities. This is known as "initial
margin." Initial margin is similar to a performance bond or
good faith deposit which is returned to the fund upon
termination of the futures contract, assuming all contractual
obligations have been satisfied. Futures contracts also
involve brokerage costs.
Subsequent payments, called "variation margin" or
"maintenance margin", to and from the broker (or the custodian)
are made on a daily basis as the price of the underlying
security or commodity fluctuates, making the long and short
positions in the futures contract more or less valuable. This
is known as "marking to the market."
A fund or an underlying fund may elect to close some or
all of its futures positions at any time prior to their
expiration in order to reduce or eliminate a hedge position
then currently held by the fund. The fund may close its
positions by taking opposite positions that will operate to
terminate the fund's position in the futures contracts. Final
determinations of variation margin are then made, additional
cash is required to be paid by or released to the fund, and the
fund realizes a loss or a gain. Such closing transactions
involve additional commission costs.
A stock index futures contract may be used to hedge a
fund or an underlying fund's portfolio with regard to market
risk as distinguished from risk related to a specific security.
A stock index futures contract is a contract to buy or sell
units of an index at a specified future date at a price agreed
upon when the contract is made. A stock index futures contract
does not require the physical delivery of securities, but
merely provides for profits and losses resulting from changes
in the market value of the contract to be credited or debited
at the close of each trading day to the respective accounts of
the parties to the contract. On the contract's expiration
date, a final cash settlement occurs. Changes in the market
value of a particular stock index futures contract reflect
changes in the specified index of equity securities on which
the future is based.
In the event of an imperfect correlation between the
futures contract and the portfolio position that is intended to
be protected, the desired protection may not be obtained and
the fund may be exposed to risk of loss. Further,
unanticipated changes in interest rates or stock price
movements may result in a poorer overall performance for the
fund than if it had not entered into futures contracts on debt
securities or stock indexes.
The market prices of futures contracts may also be
affected by certain factors. First, all participants in the
futures market are subject to margin deposit and maintenance
requirements. Rather than meeting additional margin deposit
requirements, an investor may close futures contracts through
offsetting transactions, which could distort the normal
relationship between the securities and futures markets.
Second, the deposit requirements in the futures market are less
stringent than margin requirements in the securities market.
Accordingly, increased participation by speculators in the
futures market may also cause temporary price distortions.
Positions in futures contracts may be closed out only on
an exchange or board of trade providing a secondary market for
such futures. There is no assurance that a liquid secondary
market on an exchange or board of trade will exist for any
particular contract or at any particular time.
In order to assure that mutual funds have sufficient
assets to satisfy their obligations under their futures
contracts, the funds are required to establish segregated
accounts with their custodians. Such segregated accounts are
required to contain an amount of cash and liquid securities
equal in value to the current value of the underlying
instrument less the margin deposit.
The risk to a fund or an underlying fund from investing
in futures is potentially unlimited. Gains and losses on
investments in options and futures depend upon the fund's
investment adviser's ability to predict correctly the direction
of stock prices, interest rates and other economic factors.
Options on Futures Contracts. A fund or an underlying fund may
also purchase and sell listed put and call options on futures
contracts. An option on a futures contract gives the purchaser
the right in return for the premium paid, to assume a position
in a futures contract (a long position if the option is a call
and a short position if the option is a put), at a specified
exercise price at any time during the option period. When an
option on a futures contract is exercised, delivery of the
futures position is accompanied by cash representing the
difference between the current market price of the futures
contract and the exercise price of the option. The fund may
also purchase put options on futures contracts in lieu of, and
for the same purpose as, a sale of a futures contract. A fund
may also purchase such put options in order to hedge a long
position in the underlying futures contract in the same manner
as it purchases "protective puts" on securities.
The holder of an option may terminate the position by
selling an option of the same series. There is, however, no
guarantee that such a closing transaction can be effected. A
fund is required to deposit initial and maintenance margin with
respect to put and call options on futures contracts written by
it pursuant to brokers' requirements similar to those
applicable to futures contracts described above and, in
addition, net option premiums received will be included as
initial margin deposits.
In addition to the risks which apply to all options
transactions, there are several risks relating to options on
futures contracts. The ability to establish and close out
positions on such options is subject to the development and
maintenance of a liquid secondary market. It is not certain
that this market will be liquid. In comparison with the use of
futures contracts, the purchase of options on futures contracts
involves less potential risk to a fund because the maximum
amount of risk is the premium paid for the option (plus
transaction costs). There may, however, be circumstances when
the use of an option on a futures contract would result in a
loss to a fund when the use of a futures contract would not,
such as when there is no movement in the prices of the
underlying securities. Writing an option on a futures contract
involves risks similar to those arising in the sale of futures
contracts, as described above.
Hedging. A fund or an underlying fund may employ many of the
investment techniques described for investment and hedging
purposes. For example, a fund may purchase or sell put and
call options on common stocks to hedge against movements in
individual common stock prices, or purchase and sell stock
index futures and related options to hedge against market wide
movements in common stock prices. Although such hedging
techniques generally tend to minimize the risk of loss that is
hedged against, they also may limit the potential gain that
might have resulted had the hedging transaction not occurred.
Also, the desired protection generally resulting from hedging
transactions may not always be achieved.
Leverage. An underlying fund may borrow on an unsecured basis
from banks to increase its holdings of portfolio securities.
Under the 1940 Act, such fund is required to maintain
continuous asset coverage of 300% with respect to such
borrowings and to sell (within three days) sufficient portfolio
holdings in order to restore such coverage if it should decline
to less than 300% due to market fluctuation or otherwise. Such
sale must occur even if disadvantageous from an investment
point of view. Leveraging aggregates the effect of any
increase or decrease in the value of portfolio securities on
the underlying fund's net asset value. In addition, money
borrowed is subject to interest costs (which may include
commitment fees and/or the cost of maintaining minimum average
balances) which may or may not exceed the income and gains from
the securities purchased with borrowed funds.
HIGH YIELD INVESTMENTS
High Yield Securities and Their Risks. A fund or an underlying
fund may invest in high yield, high-risk, lower-rated
securities, commonly known as "junk bonds." Such fund's
investment in such securities is subject to the risk factors
outlined below.
Growth of the High Yield Bond Market. The high yield, high
risk market is at times subject to substantial volatility. An
economic downturn or increase in interest rates may have a more
significant effect on the high yield, high risk securities in a
fund's portfolio and their markets, as well as on the ability
of securities' issuers to repay principal and interest.
Issuers of high yield, high risk securities may be of low
credit worthiness and the high yield, high risk securities may
be subordinated to the claims of senior lenders. During
periods of economic downturn or rising interest rates, the
issuers of high yield, high risk securities may have greater
potential for insolvency and a higher incidence of high yield,
high risk bond defaults may be experienced.
Sensitivity of Interest Rate and Economic Changes. The prices
of high yield, high risk securities may be more or less
sensitive to interest rate changes than higher-rated
investments but are more sensitive to adverse economic changes
or individual corporate developments. During an economic
downturn or substantial period of rising interest rates, highly
leveraged issuers may experience financial stress that would
adversely affect their ability to service their principal and
interest payment obligations, to meet projected business goals,
and to obtain additional financing. If the issuer of a high
yield, high risk security owned by an underlying fund defaults,
the fund may incur additional expenses in seeking recovery.
Periods of economic uncertainty and changes can be expected to
result in increased volatility of market prices of high yield,
high risk securities and the fund's net asset value. Yields on
high yield, high risk securities will fluctuate over time.
Furthermore, in the case of high yield, high risk securities
structured as zero coupon or pay-in-kind securities, their
market prices are affected to a greater extent by interest rate
changes and thereby tend to be more volatile than market prices
of securities which pay interest periodically and in cash.
Payment Expectations. Certain securities held by a fund or an
underlying fund, including high yield, high risk securities,
may contain redemption or call provisions. If an issuer
exercises these provisions in a declining interest rate market,
such fund would have to replace the security with a lower
yielding security, resulting in a decreased return for the
investor. Conversely, a high yield, high risk security's value
will decrease in a rising interest rate market.
Liquidity and Valuation. The secondary market may at times
become less liquid or respond to adverse publicity or investor
perceptions, making it more difficult for a fund or an
underlying fund to accurately value high yield, high risk
securities or dispose of them. To the extent such fund owns or
may acquire illiquid or restricted high yield, high risk
securities, these securities may involve special registration
responsibilities, liabilities and costs, and liquidity
difficulties, and judgment will play a greater role in
valuation because there is less reliable and objective data
available.
Taxation. Special tax considerations are associated with
investing in high yield bonds structured as zero coupon or pay-
in-kind securities or other securities that have "original
issue discount." A fund will report the accrued interest on
these securities as income each year even though it receives no
cash interest until the security's maturity or payment date.
Further, a fund must distribute substantially all of its income
for each year to its shareholders to qualify for pass-through
treatment under the tax law. Accordingly, such a fund may have
to dispose of its portfolio securities under disadvantageous
circumstances to generate cash or may have to leverage itself
by borrowing the cash to satisfy distribution requirements.
Credit Ratings. Credit ratings evaluate the safety of
principal and interest payments, not the market value risk of
high yield, high risk securities. Since credit rating agencies
may fail to change the credit ratings in a timely manner to
reflect subsequent events, the investment adviser to the funds
or an underlying fund should monitor the issuers of high yield,
high risk securities in the fund's portfolio to determine if
the issuers will have sufficient cash flow and profits to meet
required principal and interest payments, and to attempt to
assure the securities' liquidity so the fund can meet
redemption requests. To the extent that an underlying fund
invests in high yield, high risk securities, the achievement of
the fund's investment objective may be more dependent on the
underlying fund's own credit analysis than is the case for
higher quality bonds. A fund or an underlying fund may retain
a portfolio security whose rating has been changed. See
"Appendix" for credit rating information.
Mortgage-Backed, Asset-Backed, Indexed and Derivative
Securities. A fund or an underlying fund may invest in
mortgage pass-through securities, which are securities
representing interest in pools of mortgage loans secured by
residential or commercial real property in which payments of
both interest and principal on the securities are generally
made monthly, in effect passing through monthly payments made
by individual borrowers on mortgage loans which underlie the
securities (net of fees paid to the issuer or guarantor of the
securities). Early repayment of principal on some mortgage-
related securities (arising from prepayments of principal due
to sale of the underlying property, refinancing, or
foreclosure, net of fees and costs which may be incurred) may
expose a fund to a lower rate of return upon reinvestment of
principal. Also, if a security subject to prepayment has been
purchased at a premium, in the event of prepayment the value of
the premium would be lost.
Like other fixed income securities, when interest rates
rise, the value of a mortgage-related security generally will
decline; however, when interest rates are declining, the value
of mortgage-related securities with prepayment features may not
increase as much as other fixed income securities.
A fund or an underlying fund may invest in collateralized
mortgage obligations (CMOs), which are hybrid mortgage-related
instruments. Similar to a bond, interest and pre-paid
principal on a CMO are paid, in most cases, semiannually. CMOs
are collateralized by portfolios of mortgage pass-through
securities and are structured into multiple classes with
different stated maturities. Monthly payments of principal,
including prepayments, are first returned to investors holding
the shortest maturity class; investors holding the longer
maturity classes receive principal only after the first class
has been retired.
Other mortgage-related securities in which a fund or an
underlying fund may invest include other securities that
directly or indirectly represent a participation in, or are
secured by and payable from, mortgage loans on real property,
such as CMO residuals or stripped mortgage-backed securities,
and may be structured in classes with rights to receive varying
proportions of principal and interest. In addition, the funds
or the underlying funds may invest in other asset-backed
securities that have been offered to investors or will be
offered to investors in the future. Several types of asset-
backed securities have already been offered to investors,
including certificates for automobile receivables, which
represent undivided fractional interests in a trust whose
assets consist of a pool of motor vehicle retail installment
sales contracts and security interest in the vehicles securing
the contracts.
II. INVESTMENT RESTRICTIONS
FUNDAMENTAL INVESTMENT POLICIES. Each fund has adopted
certain fundamental investment policies. These fundamental
investment policies cannot be changed unless the change is
approved by the lesser of (1) 67% or more of the voting
securities present at a meeting, if the holders of more than
50% of the outstanding voting securities of the fund are
present or represented by proxy, or (2) more than 50% of the
outstanding voting securities of the fund. These fundamental
policies provide that a fund may not:
1. Invest 25% or more of its total assets in securities of
issuers in any one industry (securities issued or guaranteed by
the United States government, its agencies or instrumentalities
are not considered to represent industries) or in shares of
underlying funds ("sector funds") that each have a policy of
concentrating in the same industry. This limitation does not
apply to underlying funds that have a policy against
concentrating in any one industry and does not preclude a fund
from investing 25% or more of its assets in sector funds
generally, provided that cumulative investments in sector funds
that all concentrate as a matter of policy in the same industry
do not equal or exceed 25% of the fund's total assets. Each
fund will concentrate in the mutual fund industry.
2. Borrow money or issue senior securities except to the
extent permitted by the 1940 Act.
3. Make loans of securities to other persons, except loans
of securities not exceeding 33 1/3% of the fund's total assets,
investments in debt obligations and transactions in repurchase
agreements.
4. Underwrite securities of other issuers, except insofar as
the fund may be deemed an underwriter under the Securities Act
of 1933, as amended (the "1933 Act") in selling portfolio
securities.
5. Purchase or sell real estate or any interest therein,
including interests in real estate limited partnerships, except
securities issued by companies (including real estate
investment trusts) that invest in real estate or interests
therein and real estate acquired as a result of owning
securities.
6. Invest in commodities or commodity futures contracts,
provided that this limitation shall not prohibit the purchase
or sale by the fund of forward currency contracts; financial
futures contracts and options on financial futures contracts;
options on securities, currencies and securities indices; and
swaps, caps, floors and collars, as permitted by the fund's
prospectus.
The 1940 Act currently prohibits the funds from issuing
senior securities or borrowing money, except that each fund may
borrow from banks or pursuant to reverse repurchase agreements
in an amount not exceeding one-third of total assets (including
the amount borrowed). A fund is required to reduce the amount
of its borrowings to not more than one-third of total assets
within three days after such borrowings first exceed this one-
third limitation.
Additional investment restrictions adopted by the funds,
which may be changed by the Board of Trustees, provide that a
fund may not:
1. With respect to 75% of the fund's assets, invest more
than 5% of the fund's assets (taken at a market value at the
time of purchase) in the outstanding securities of any single
issuer or own more than 10% of the outstanding voting
securities of any one issuer, in each case other than (1)
securities issued or guaranteed by the United States
government, its agencies or instrumentalities, or (2)
securities of other investment companies.
2. Invest more than 15% of its net assets (taken at market
value at the time of purchase) in illiquid securities.
3. Make investments for the purpose of exercising control or
management.
4. Invest in other investment companies except as permitted
under the 1940 Act.
The mutual funds in which the funds may invest may, but
need not, have the same investment objectives or policies as a
fund. Although all of the funds may from time to time invest
in shares of the same underlying mutual fund, the percentage of
each fund's assets so invested may vary, and Insight Management
will determine that such investments are consistent with the
investment objective and policies of each fund. The
investments that may, in general, be made by underlying funds
in which the funds may invest, as well as the risks associated
with such investments, are described in the prospectus.
III. MANAGEMENT OF THE TRUST AND THE FUNDS
A. Trustees and Officers
The principal occupations of the Trustees and officers of
the Trust during the past five years are set forth below: Each
Trustee who is deemed to be an "interested person" of the
Trust, as defined in the 1940 Act, is indicated by an asterisk.
*ERIC M. KOBREN, 20 William Street, Suite 310, P.O. Box 9135,
Wellesley Hills, Massachusetts 02181 - Chairman of the Board,
President and Trustee. Mr. Kobren has served as President of
Mutual Fund Investors Association, Inc. since 1985 and as
President of Insight Management and Insight Brokerage Services,
Inc. ("Insight Brokerage") since 1987. These are a financial
publishing concern, a registered investment advisory firm and a
registered broker-dealer, respectively. Mr. Kobren is 42 years
old.
*MICHAEL P. CASTELLANO, 20 William Street, Suite 310, P.O. Box
9135, Wellesley Hills, Massachusetts 02181 - Treasurer and
Trustee. Since December 1994, Mr. Castellano has served as
Chief Administrative Officer of Insight Management and as a
Registered Representative of Insight Brokerage. From October
1993 to December 1994, Mr. Castellano was employed as Executive
Vice President and Chief Administrative Officer of Wall Street
Investor Services, a registered broker-dealer. Prior to that
time, he was a Senior Vice President with Fidelity Investments,
a registered investment advisory firm and broker-dealer. Mr.
Castellano is 55 years old.
ARTHUR DUBROFF, 335 Madison Avenue, 25th Floor, New York, New
York 10017 - Trustee. Since July 1996, Mr. Dubroff has served
as Executive Vice President and Chief Financial Officer of
Enhance Financial Services Group, Inc. ("Enhance Financial").
Mr. Dubroff has also acted as a Director of Enhance Financial
from 1986 to 1991 and 1992 to the present. From November 1993
to July 1996, he was employed as a Senior Vice President of
First Data Corporation, a financial services company. From
February 1992 to November 1993, Mr. Dubroff was employed as an
Executive Vice President of Shearson Lehman Brothers, Inc. and
from February 1991 to January 1992 as an Executive Vice
President of American Express Information Services Corp. Mr.
Dubroff is 46 years old.
SCOTT P. MASON, 46 Glen Road, Wellesley, Massachusetts 02181 -
Trustee. Since July 1978, Mr. Mason has been employed as a
professor at Harvard Business School. Mr. Mason is 49 years
old.
STUART J. NOVICK, Children's Hospital, 300 Longwood Avenue,
Boston, Massachusetts 02115 - Trustee. Mr. Novick has served
as Vice President and General Counsel of Children's Hospital
since July 1984. He is 46 years old.
SCOTT A. SCHOEN, Thomas H. Lee Company, 75 State Street,
Boston, Massachusetts 02109 - Trustee. Mr. Schoen, Managing
Director of Thomas H. Lee Company, a venture capital firm, has
been employed there since September 1986. He is 38 years
old.
ERIC J. GODES, 20 William Street, Suite 310, P.O. Box 9135,
Wellesley Hills, Massachusetts 02181 - Vice President and
Secretary. Mr. Godes, a Vice President of Insight Management
and a registered representative of Insight Brokerage, has been
associated with both companies since 1990. He is 35 years
old.
EDWARD R. GOLDFARB, 20 William Street, Suite 310, P.O. Box
9135, Wellesley Hills, Massachusetts 02181 - Vice President.
Since September 1995, Mr. Goldfarb has been Director of
Research and Chief Strategist of Insight Management, as well as
a registered representative, of Insight Brokerage. From June
1992 to September 1995, he was employed as a registered
representative of Aeltus Capital, Inc. and, from March 1994 to
September 1995, he also served as Managing Director of Aeltus
Investment Management, Inc. From September 1982 to September
1995, Mr. Goldfarb was employed as a Vice President of Aetna
Life & Casualty serving in various capacities. During that
time, he was also a registered representative of Aetna
Financial Services, Inc. and, from May 1992 to March 1994, a
registered representative of Aetna Capital Management, Inc.
Mr. Goldfarb is 36 years old.
The Trustees who are not employed by the Adviser each
receive a $5,000 annual retainer paid in quarterly
installments, a $1,000 fee for each board meeting attended and
a $500 fee per committee meeting attended, plus out-of-pocket
expenses incurred in attending such meetings.
Compensation Table
The following table sets forth the anticipated
compensation to be paid to the Trustees of the Trust for the
fiscal period ending December 31, 1996. No compensation is
paid to any officers of the Trust by the funds.
<TABLE>
<CAPTION>
<S> <C> <C>
TOTAL
AGGREGATE COMPENSATION
NAME OF PERSON COMPENSATION FROM THE TRUST
AND POSITION FROM THE TRUST PAID TO TRUSTEES
Eric M. Kobren, $0 $0
Chairman of the Board,
President and Trustee
Michael P. Castellano, $0 $0
Treasurer and Trustee
Arthur Dubroff, $2,250 $2,250
Trustee
Scott P. Mason, $2,250 $2,250
Trustee
Stuart J. Novick, $2,250 $2,250
Trustee
Scott A. Schoen, $2,250 $2,250
Trustee
</TABLE>
Control Persons and Principal Holders of Securities
As of the date of this statement of additional
information, the following entity owned 5% or more of the
outstanding shares of the Trust:
Insight Management, Inc. 100.00%
20 William Street, Suite 310
P.O. Box 9135
Wellesley Hills, Massachusetts 02181
As of the date of this statement of additional
information, Mr. Kobren, by virtue of his ownership of Insight
Management, could be deemed to be a control person and
principal holder of the Trust's securities.
The Trust's Declaration of Trust provides that the Trust
will indemnify its Trustees and officers against liabilities
and expenses incurred in connection with litigation in which
they may be involved as a result of their positions with the
Trust, unless, as to liability to the Trust or its
shareholders, it is finally adjudicated that they engaged in
willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in their offices, or unless
with respect to any other matter it is finally adjudicated that
they did not act in good faith in the reasonable belief that
their actions were in the best interests of the Trust and its
funds. In the case of settlement, such indemnification will
not be provided unless it has been determined by a court or
other body approving the settlement or other disposition, or by
a reasonable determination, based upon a review of readily
available facts, by vote of a majority of disinterested
Trustees or in a written opinion of independent counsel, that
such officers or Trustees have not engaged in willful
misfeasance, bad faith, gross negligence or reckless disregard
of their duties.
B. Investment Adviser
Insight Management serves as investment adviser to the
Trust and its funds pursuant to a written investment advisory
agreement. Insight Management is a Massachusetts corporation
organized in 1987, and is a registered investment adviser under
the Investment Advisers Act of 1940, as amended.
Certain services provided by Insight Management under the
investment advisory agreement are described in the prospectus.
In addition to those services, Insight Management may, from
time to time, provide the funds with office space for managing
their affairs, with the services of required executive
personnel, and with certain clerical services and facilities.
These services are provided without reimbursement by the funds
for any costs incurred. As compensation for its services, each
fund pays Insight Management a fee computed daily and paid
monthly at the annual rate of 0.75% of the fund's average daily
net assets. This fee will be reduced by agreements the Insight
Premier funds have structured with underlying funds to receive
12b-1 fees and share in a portion of their advisory fee
revenue.
Each fund is responsible for all expenses not expressly
assumed by Insight Management or the administrator. These
include, among other things, organization expenses, legal fees,
audit and accounting expenses, insurance costs, the
compensation and expenses of the Trustees, the expenses of
printing and mailing reports, notices and proxy statements to
fund shareholders, registration fees under federal and state
securities laws, brokerage commissions, interest, taxes and
extraordinary expenses (such as for litigation).
Insight Management has agreed to reimburse each fund to
the extent necessary to maintain each fund's operating expenses
(excluding investment advisory fees, brokerage commissions,
taxes, interest and litigation, indemnification and other
extraordinary expenses) at 0.25% annually of the fund's average
daily net assets. The investment advisory agreement with
Insight Management provides that if the total expenses of a
fund in any fiscal year exceed the permissible limits
applicable to the fund in any state in which shares of the fund
are then qualified for sale, the compensation due Insight
Management for such fiscal year shall be reduced by the amount
of such excess by a reduction or refund thereof at the time
such compensation is payable after the end of each calendar
month during such fiscal year of the fund, subject to
readjustment during the fund's fiscal year. Until December 31,
1996, the only state expense limitation provision applicable to
the funds limits each fund's expenses to 2 1/2% of the first
$30 million of average net assets, 2% of the next $70 million
of average net assets and 1 1/2% of any remaining average net
assets. Taxes, brokerage costs, interest expenses and
extraordinary expenses are excluded from this limitation.
By its terms, the Trust's investment advisory agreement
will remain in effect through November , 1998 and from year
to year thereafter, subject to annual approval by (a) the Board
of Trustees or, with respect to a particular fund, (b) a vote
of the majority of that fund's outstanding voting securities;
provided that in either event continuance is also approved by a
majority of the Trustees who are not interested persons of the
Trust, by a vote cast in person at a meeting called for the
purpose of voting such approval. The Trust's investment
advisory agreement may be terminated at any time, on sixty
days' written notice, without the payment of any penalty, by
the Board of Trustees, by a vote of the majority of a
particular fund's outstanding voting securities, or by Insight
Management. The investment advisory agreement automatically
terminates in the event of its assignment, as defined by the
1940 Act and the rules thereunder.
C. Distributor
Insight Brokerage Services, Inc., an affiliate of Insight
Management, 20 William Street, Suite 310, P.O. Box 9135,
Wellesley Hills, Massachusetts 02181, serves as each fund's
distributor pursuant to an agreement which is renewable
annually. Each fund's shares are sold on a continuous basis by
Insight Brokerage as agent, although Insight Brokerage is not
obligated to sell any particular amount of shares. The
distributor pays the cost of printing and distributing
prospectuses to persons who are not shareholders of a fund
(excluding preparation and printing expenses necessary for the
continued registration of a fund's shares) and of preparing,
printing and distributing all sales literature.
D. Administrator, Transfer Agent and Dividend Paying Agent
The Board of Trustees of the Trust has approved an
Administration Agreement between the Trust and First Data
Investor Services Group, Inc. ("First Data"), a subsidiary of
First Data Corporation, pursuant to which First Data serves as
administrator to the Trust and to each of the funds. First
Data is located at One Exchange Place, Boston, Massachusetts
02109. The administrative services necessary for the operation
of the Trust and its funds provided by First Data include among
other things: (i) preparation of shareholder reports and
communications, (ii) regulatory compliance, such as reports to
and filings with the Securities and Exchange Commission and
state securities commissions and (iii) general supervision of
the operation of the Trust and its funds, including
coordination of the services performed by the transfer agent,
custodian, independent accountants, legal counsel and others.
For these services, First Data is entitled to receive the
following annual fees on a per fund basis: $67,500 for
administration and fund accounting.
First Data also serves as the Trust's transfer and
dividend paying agent and performs shareholder service
activities. The location for these services is 4400 Computer
Drive, Westborough, Massachusetts 01581. The services of First
Data are provided pursuant to a Transfer Agency and Services
Agreement between the Trust and First Data. Pursuant to such
Agreement, First Data will receive from the Trust, with respect
to each fund, an annual fee of $14 per shareholder account
(subject to a $32,000 annual minimum). First Data also
receives reimbursement under the Transfer Agency and Services
Agreement for certain out-of-pocket expenses incurred in
rendering such services.
IV. PURCHASE, REDEMPTION AND DETERMINATION
OF NET ASSET VALUE
Detailed information on purchase and redemption of shares
is included in the prospectus. The Trust may suspend the right
to redeem its shares or postpone the date of payment upon
redemption for more than three business days (i) for any period
during which the New York Stock Exchange is closed (other than
customary weekend or holiday closings) or trading on the
exchange is restricted; (ii) for any period during which an
emergency exists as a result of which disposal by a fund of
securities owned by it is not reasonably practicable or it is
not reasonably practicable for a fund fairly to determine the
value of its net assets; or (iii) for such other periods as the
Securities and Exchange Commission may permit for the
protection of shareholders of the Trust.
Each fund's underlying funds are valued according to the
net asset value per share ("NAV") furnished by that fund's
accounting agent. Each fund's investment securities are valued
at the last sale price on the securities exchange or national
securities market on which such securities primarily are
traded. Securities not listed on an exchange or national
securities market, or securities in which there were no
transactions, are valued at the average of the most recent bid
and asked prices. Bid price is used when no asked price is
available. Short-term investments are carried at amortized
cost, which approximates market value. Any securities or other
assets for which recent market quotations are not readily
available are valued at fair value as determined in good faith
by the Board of Trustees. Income, expenses and fees, including
the advisory and administration fees, are accrued daily and
taken into account for the purpose of determining the net asset
value of each fund's shares.
Each fund computes the NAV of its shares at the close of
regular trading on the New York Stock Exchange (normally 4:00
p.m. New York time) on each weekday that is not a holiday. The
holidays (as observed) on which the New York Stock Exchange is
scheduled to be closed currently are: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving and Christmas. If the New York Stock
Exchange closes early, the time of computing the NAV and the
deadlines for purchasing and redeeming shares will be
accelerated to the earlier closing time. The NAV of each
fund's shares is determined by subtracting from the value of
the fund's total assets the amount of the fund's liabilities
and dividing the remainder by the number of outstanding fund
shares. Although the NAV will be calculated at the close of
all regular trading days, the NAV reported to NASDAQ for
distribution to news agencies will be delayed by one business
day.
V. SPECIAL REDEMPTIONS
If the Board of Trustees of the Trust determines that it
would be detrimental to the best interests of the remaining
shareholders of a fund to make payment wholly or partly in
cash, that fund may pay the redemption price in whole or in
part by a distribution in kind of securities from the portfolio
of that fund, instead of in cash, in conformity with any
applicable rules of the Securities and Exchange Commission.
The proceeds of redemption may be more or less than the amount
invested and, therefore, a redemption may result in a gain or
loss for federal income tax purposes.
VI. PORTFOLIO TRANSACTIONS
Insight Management is responsible for decisions to buy
and sell securities for the funds and for the placement of the
funds' portfolio business and negotiation of commissions, if
any, paid on these transactions.
In placing portfolio transactions with brokers and
dealers, Insight Management attempts to obtain the best overall
terms for the funds, taking into account such factors as price
(including dealer spread), the size, type and difficulty of the
transaction involved, and the financial condition and execution
capability of the broker or dealer. In selecting broker-
dealers and to the extent that the execution and price offered
by more than one dealer are comparable, Insight Management may
consider research, including statistical or pricing
information, and brokerage services furnished to the funds or
Insight Management. In addition, the funds may pay brokerage
commissions to brokers or dealers in excess of those otherwise
available upon a determination that the commission is
reasonable in relation to the value of the brokerage services
provided, viewed in terms of either a specific transaction or
overall brokerage services provided with respect to the funds'
portfolio transactions by such broker or dealer. Insight
Management may use this research information in managing the
funds' assets, as well as assets of other clients.
Stocks, other equity securities and options may be traded
through brokers on an agency basis with a stated brokerage
commission or on a principal basis in the over-the-counter
market. Fixed income securities are generally traded on the
over-the-counter market on a "net" basis without a stated
commission, through dealers acting for their own account and
not as brokers. Prices paid to a dealer on principal
transactions will generally include a "spread", which is the
difference between the prices at which the dealer is willing to
purchase and sell the specific security at that time. Shares
of underlying funds may be purchased or redeemed in
transactions with the funds, their principal underwriters or
independent dealers. Certain money market instruments and
government agency securities may be purchased directly from the
issuer, in which case no commissions or premiums are paid.
Futures contracts are traded on an agency basis with a futures
commission merchant. Swaps and other over-the-counter
contracts are traded directly with the counterparty, which is
usually a dealer, a bank or other institution.
Other investment advisory clients advised by Insight
Management may also invest in the same securities as a fund.
When these clients buy or sell the same securities at
substantially the same time, Insight Management may average the
transactions as to price and allocate the amount of available
investments in a manner which Insight Management believes to be
equitable to each client, including the funds. In some
instances, this investment procedure may adversely affect the
price paid or received by a fund or the size of the position
obtainable for it. On the other hand, to the extent permitted
by law, Insight Management may aggregate the securities to be
sold or purchased for a fund with those to be sold or purchased
for other funds or clients managed by it in order to obtain
best execution.
The funds will arrange to be included within a class of
investors entitled not to pay sales charges by purchasing
initial load fund shares under letters of intent, rights of
accumulation, cumulative purchase privileges and other quantity
discount programs.
VII. PERFORMANCE INFORMATION
A. Total Return
From time to time, quotations of a fund's performance may
be included in advertisements, sales literature or reports to
shareholders or prospective investors. These performance
figures may be calculated in the following manner:
Total return is computed by finding the average annual
compounded rates of return over the designated periods that
would equate the initial amount invested to the ending
redeemable value, according to the following formula:
P(1+T)n = ERV
Where:
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value at the end of the designated
period assuming a hypothetical $1,000 payment made at the
beginning of the designated period
The calculation set forth above is based on the further
assumptions that: (i) all dividends and distributions of a fund
during the period were reinvested at the net asset value on the
reinvestment dates; and (ii) all recurring expenses that were
charged to all shareholder accounts during the applicable
period were deducted.
Total returns quoted in advertising reflect all aspects
of a fund's return, including the effect of reinvesting
dividends and capital gain distributions, and any change in the
fund's net asset value per share (NAV) over the period.
Average annual returns are calculated by determining the growth
or decline in value of a hypothetical historical investment in
a fund over a stated period, and then calculating the annually
compounded percentage rate that would have produced the same
result if the rate of growth or decline in value had been
constant over the period. For example, a cumulative return of
100% over ten years would produce an average annual return of
7.18%, which is the steady annual return rate that would equal
100% growth on a compounded basis in ten years. While average
annual returns are a convenient means of comparing investment
alternatives, investors should realize that a fund's
performance is not constant over time, but changes from year to
year, and that average annual returns represent averaged
figures as opposed to the actual year-to-year performance of
the fund.
B. Non-Standardized Total Return
In addition to the performance information described
above, a fund may provide total return information for
designated periods, such as for the most recent rolling six
months or most recent rolling twelve months. A fund may quote
unaveraged or cumulative total returns reflecting the simple
change in value of an investment over a stated period. Average
annual and cumulative total returns may be quoted as a
percentage or as a dollar amount, and may be calculated for a
single investment, a series of investments, and/or a series of
redemptions over any time period. Total returns may be broken
down into their components of income and capital (including
capital gains and changes in share price) in order to
illustrate the relationship of these factors and their
contributions to total return. Total returns and other
performance information may be quoted numerically or in a
table, graph or similar illustration.
C. Other Information Concerning Fund Performance
A fund may quote its performance in various ways, using
various types of comparisons to market indices, other funds or
investment alternatives, or to general increases in the cost of
living. All performance information supplied by a fund in
advertising is historical and is not intended to indicate
future returns. A fund's share prices and total returns
fluctuate in response to market conditions and other factors,
and the value of a fund's shares when redeemed may be more or
less than their original cost.
A fund may compare its performance over various periods
to various indices or benchmarks or combinations of indices and
benchmarks, including the performance record of the Standard &
Poor's 500 Composite Stock Price Index ("S&P"), the Dow Jones
Industrial Average ("DJIA"), the NASDAQ Industrial Index, the
Ten Year Treasury Benchmark and the cost of living (measured by
the Consumer Price Index, or CPI) over the same period.
Comparisons may also be made to yields on certificates of
deposit, treasury instruments or money market instruments. The
comparisons to the S&P and DJIA show how such fund's total
return compared to the record of a broad average of common
stock prices (S&P) and a narrower set of stocks of major
industrial companies (DJIA). The fund may have the ability to
invest in securities or underlying funds not included in either
index, and its investment portfolio may or may not be similar
in composition to the indices. Figures for the S&P and DJIA
are based on the prices of unmanaged groups of stocks, and
unlike the fund's returns, their returns do not include the
effect of paying brokerage commissions and other costs of
investing.
Comparisons may be made on the basis of a hypothetical
initial investment in the fund (such as $1,000), and reflect
the aggregate cost of reinvested dividends and capital gain
distributions for the period covered (that is, their cash value
at the time they were reinvested). Such comparisons may also
reflect the change in value of such an investment assuming
distributions are not reinvested. Tax consequences of
different investments may not be factored into the figures
presented.
A fund's performance may be compared in advertising to
the performance of other mutual funds in general or to the
performance of particular types of mutual funds, especially
those with similar objectives.
Other groupings of funds prepared by Lipper Analytical
Services, Inc. ("Lipper") and other organizations may also be
used for comparison to the funds. Although Lipper and other
organizations such as Investment Company Data, Inc. ("ICD"),
CDA Investment Technologies, Inc. ("CDA") and Morningstar
Investors, Inc. ("Morningstar"), include funds within various
classifications based upon similarities in their investment
objectives and policies, investors should be aware that these
may differ significantly among funds within a grouping.
From time to time a fund may publish the ranking of the
performance of its shares by Morningstar, an independent mutual
fund monitoring service that ranks mutual funds, including the
funds, in broad investment categories (equity, taxable bond,
tax-exempt and other) monthly, based upon each fund's one-,
three-, five- and ten-year average annual total returns (when
available) and a risk adjustment factor that reflects fund
performance relative to three-month U.S. treasury bill monthly
returns. Such returns are adjusted for fees and sales loads.
There are five ranking categories with a corresponding number
of stars: highest (5), above average (4), neutral (3), below
average (2) and lowest (1). Ten percent of the funds, series
or classes in an investment category receive 5 stars, 22.5%
receive 4 stars, 35% receive 3 stars, 22.5% receive 2 stars,
and the bottom 10% receive one star.
From time to time, in reports and promotional literature,
a fund's yield and total return will be compared to indices of
mutual funds and bank deposit vehicles such as Lipper's "Lipper
- - Fixed Income Fund Performance Analysis," a monthly
publication which tracks net assets, total return, and yield on
approximately 1,700 fixed income mutual funds in the United
States. Ibbotson Associates, CDA Wiesenberger and F.C. Towers
are also used for comparison purposes as well as the Russell
and Wilshire Indices. Comparisons may also be made to bank
certificates of deposit ("CD"), which differ from mutual funds,
such as the funds, in several ways. The interest rate
established by the sponsoring bank is fixed for the term of a
CD, there are penalties for early withdrawal from CDs, and the
principal on a CD is insured. Comparisons may also be made to
the 10 year Treasury Benchmark.
Performance rankings and ratings reported periodically in
national financial publications such as Money Magazine, Forbes,
Business Week, The Wall Street Journal, Micropal, Inc.,
Morningstar, Stanger's, Barron's, etc. will also be used.
Ibbotson Associates of Chicago, Illinois ("Ibbotson") and
others provide historical returns of the capital markets in the
United States. A fund may compare its performance to the long-
term performance of the U.S. capital markets in order to
demonstrate general long-term risk versus reward investment
scenarios. Performance comparisons could also include the
value of a hypothetical investment in common stocks, long-term
bonds or treasuries. A fund may discuss the performance of
financial markets and indices over various time periods.
The capital markets tracked by Ibbotson are common
stocks, small capitalization stocks, long-term corporate bonds,
intermediate-term government bonds, long-term government bonds,
Treasury Bills, and the U.S. rate of inflation. These capital
markets are based on the returns of several different indices.
For common stocks the S&P is used. For small capitalization
stocks, return is based on the return achieved by Dimensional
Fund Advisors Small Company Fund. This fund is a market value-
weighted index of the ninth and tenth deciles of the New York
Stock Exchange ("NYSE"), plus stocks listed on the American
Stock Exchange and over-the-counter with the same or less
capitalization as the upper bound of the NYSE ninth decile.
Long-term corporate bond returns are based on the
performance of the Salomon Brothers Long-Term-High-Grade
Corporate Bond Index which includes nearly all Aaa- and Aa-
rated bonds. Returns on intermediate-term government bonds are
based on a one-bond portfolio constructed each year, containing
a bond which is the shortest noncallable bond available with a
maturity not less than 5 years. This bond is held for the
calendar year and returns are recorded. Returns on long-term
government bonds are based on a one-bond portfolio constructed
each year, containing a bond that meets several criteria,
including having a term of approximately 20 years. The bond is
held for the calendar year and returns are recorded. Returns
on U.S. Treasury bills are based on a one-bill portfolio
constructed each month, containing the shortest-term bill
having not less than one month to maturity. The total return
on the bill is the month-end price divided by the previous
month-end price, minus one. Data up to 1976 is from the U.S.
Government Bond file at the University of Chicago's Center for
Research in Security Prices; the Wall Street Journal is the
source thereafter.
Inflation rates are based on the CPI. Ibbotson
calculates total returns in the same method as the fund.
Other widely used indices that the funds may use for
comparison purposes include the Lehman Bond Index, the Lehman
Aggregate Bond Index, The Lehman GNMA Single Family Index, the
Lehman Government/Corporate Bond Index, the Salomon Brothers
Long-Term High Yield Index, the Salomon Brothers Non-Government
Bond Index, the Salomon Brothers Non-U.S. Government Bond
Index, the Salomon Brothers World Government Bond Index and the
J.P. Morgan Government Bond Index. The Salomon Brothers World
Government Bond Index generally represents the performance of
government debt securities of various markets throughout the
world, including the United States. Lehman
Government/Corporate Bond Index generally represents the
performance of intermediate and long-term government and
investment grade corporate debt securities. The Lehman
Aggregate Bond Index measures the performance of U.S. corporate
bond issues, U.S. government securities and mortgage-backed
securities. The J.P. Morgan Government Bond Index generally
represents the performance of government bonds issued by
various countries including the United States. The foregoing
bond indices are unmanaged indices of securities that do not
reflect reinvestment of capital gains or take investment costs
into consideration, as these items are not applicable to
indices.
The funds may also discuss in advertising the relative
performance of various types of investment instruments, such as
stocks, treasury securities and bonds, over various time
periods and covering various holding periods. Such comparisons
may compare these investment categories to each other or to
changes in the CPI. In addition, the funds may employ
historical mutual fund performance data and industry asset
allocation studies in their advertisements.
A fund may advertise examples of the effects of periodic
investment plans, including the principle of dollar cost
averaging. In such a program, the investor invests a fixed
dollar amount in a fund at periodic intervals, thereby
purchasing fewer shares when prices are high and more shares
when prices are low. While such a strategy does not assure a
profit or guard against loss in a declining market, the
investor's average cost per share can be lower than if fixed
numbers of shares had been purchased at those intervals. In
evaluating such a plan, investors should consider their ability
to continue purchasing shares through periods of low price
levels.
The funds may be available for purchase through
retirement plans or other programs offering deferral of or
exemption from income taxes, which may produce superior after-
tax returns over time. For example, a $1,000 investment
earning a taxable return of 10% annually, compounded monthly,
would have an after-tax value of $2,009 after ten years,
assuming tax was deducted from the return each year at a 31%
rate. An equivalent tax-deferred investment would have an
after-tax value of $2,178 after ten years, assuming tax was
deducted at a 31% rate from the deferred earnings at the end of
the ten year period.
Evaluations of fund performance made by independent
sources may also be used in advertisements concerning the
funds, including reprints of, or selections from, editorials or
articles about the fund. These editorials or articles may
include quotations of performance from other sources such as
Lipper or Morningstar. Sources for fund performance
information and articles about the funds may include the
following:
BANXQUOTE, an on-line source of national averages for leading
money market and bank CD interest rates, published on a weekly
basis by Masterfund, Inc. of Wilmington, Delaware.
BARRON'S, a Dow Jones and Company, Inc. business and financial
weekly that periodically reviews mutual fund performance data.
THE BOSTON GLOBE, a regional daily newspaper.
BUSINESS WEEK, a national business weekly that periodically
reports the performance rankings and ratings of a variety of
mutual funds investing abroad.
CDA INVESTMENT TECHNOLOGIES, INC., an organization which
provides performance and ranking information through examining
the dollar results of hypothetical mutual fund investments and
comparing these results against appropriate market indices.
CONSUMER DIGEST, a monthly business/financial magazine that
includes a "Money Watch" section featuring financial news.
FINANCIAL WORLD, a general business/financial magazine that
includes a "Market Watch" department reporting on activities in
the mutual fund industry.
FORBES, a national business publication that from time to time
reports the performance of specific investment companies in the
mutual fund industry.
FORTUNE, a national business publication that periodically
rates the performance of a variety of mutual funds.
IBC/DONOGHUES' MONEY FUND REPORT, a weekly publication of the
Donoghue Organization, Inc. of Holliston, Massachusetts,
reporting on the performance of the nation's money market
funds, summarizing money market fund activity, and including
certain averages as performance benchmarks, specifically
"Donoghue's Money Fund Average," and "Donoghue's Government
Money Fund Average."
IBBOTSON ASSOCIATES, INC., a company specializing in investment
research and data.
INVESTMENT COMPANY DATA, INC., an independent organization
which
provides performance ranking information for broad classes of
mutual funds.
INVESTOR'S DAILY, a daily newspaper that features financial,
economic, and business news.
KIPLINGER'S PERSONAL FINANCE, a monthly business publication.
LIPPER ANALYTICAL SERVICES, INC.'S MUTUAL FUND PERFORMANCE
ANALYSIS, a weekly publication of industry-wide mutual fund
averages by type of fund.
MONEY, a monthly magazine that from time to time features both
specific funds and the mutual fund industry as a whole.
MORNINGSTAR INVESTOR and MORNINGSTAR ONDISC, monthly mutual
fund reporting services.
MUTUAL FUND MAGAZINE, a monthly business magazine published by
the Institute for Econometric Research.
MUTUAL FUND VALUES, a bi-weekly Morningstar, Inc. publication
that provides ratings of mutual funds based on fund
performance, risk and portfolio characteristics.
THE NEW YORK TIMES, a nationally distributed newspaper which
regularly covers financial news.
PERSONAL INVESTING NEWS, a monthly news publication that often
reports on investment opportunities and market conditions.
PERSONAL INVESTOR, a monthly investment advisory publication
that includes a "Mutual Funds Outlook" section reporting on
mutual fund performance measures, yields, indices and portfolio
holdings.
SMART MONEY, a Dow Jones & Company, Inc. monthly business
magazine.
SUCCESS, a monthly magazine targeted to the world of
entrepreneurs and growing business, often featuring mutual fund
performance data.
USA TODAY, a nationally distributed newspaper.
U.S. NEWS AND WORLD REPORT, a national business weekly that
periodically reports mutual fund performance data.
THE WALL STREET JOURNAL, a Dow Jones & Company, Inc. newspaper
which regularly covers financial news.
WIESENBERGER INVESTMENT COMPANIES SERVICES, an annual
compendium of information about mutual funds and other
investment companies, including comparative data on funds'
background, management policies, salient features, management
results, income and dividend records, and price ranges.
WORTH MAGAZINE, a Fidelity Investments-owned monthly business
publication.
When comparing yield, total return and investment risk of
shares of a fund with other investments, investors should
understand that certain other investments have different risk
characteristics than an investment in shares of the funds. For
example, certificates of deposit may have fixed rates of return
and may be insured as to principal and interest by the FDIC,
while a fund's returns will fluctuate and its share values and
returns are not guaranteed. Money market accounts offered by
banks also may be insured by the FDIC and may offer stability
of principal. U.S. Treasury securities are guaranteed as to
principal and interest by the full faith and credit of the U.S.
government. Money market mutual funds may seek to offer a
fixed price per share.
The performance of the funds is not fixed or guaranteed.
Performance quotations should not be considered to be
representative of performance of a fund for any period in the
future. The performance of a fund is a function of many
factors including its earnings, expenses and number of
outstanding shares. Fluctuating market conditions, purchases
and sales of underlying funds, sales and redemptions of shares
of beneficial interest, and changes in operating expenses are
all examples of items that can increase or decrease a fund's
performance.
VIII. DIVIDENDS, DISTRIBUTIONS AND TAXES
Each fund intends to qualify as a separate regulated
investment company under Subchapter M of the Internal Revenue
Code of 1986, as amended (the "Code"). In any year in which a
fund qualifies as a regulated investment company and
distributes to its shareholders substantially all of its
investment company taxable income (which includes, among other
items, interest, dividends and the excess of net short-term
capital gain over net long-term capital loss) and its net
capital gain (the excess of net long-term capital gain over net
short-term capital loss) the fund will not be subject to
federal income tax on the amounts distributed to shareholders
in the manner required under the Code. A fund would be taxed
at regular corporate income tax rates on any amounts not
distributed to shareholders in accordance with these
requirements.
Amounts not distributed on a timely basis in accordance
with a separate calendar year distribution requirement are
subject to a nondeductible 4% excise tax. To avoid imposition
of the excise tax, each fund must distribute for each calendar
year an amount equal to the sum of (1) at least 98% of its net
ordinary income (excluding any capital gains or losses) for the
calendar year, (2) at least 98% of the excess of its capital
gains over capital losses (adjusted for certain ordinary
losses) realized during the one-year period ending October 31
of such year, and (3) all ordinary income and capital gains for
the previous year that were not distributed during such year
and on which the fund has not paid income tax. A distribution
will be treated as paid by a fund, and taxable to shareholders
as if received, on December 31 of the calendar year if it is
declared by a fund in October, November or December of that
year with a record date in such a month and paid by the fund
during January of the following calendar year. Each fund
intends to seek to distribute its income in accordance with
this requirement to avoid or minimize any excise tax. Shortly
after the end of each year, the Trust will notify shareholders
of the tax status of dividends and distributions for that
year.
All income and capital gains received by a fund from a
mutual fund in that fund's portfolio will be distributed by the
fund (after deductions for the fund's losses and expenses) and
will be taxable to shareholders as ordinary income, except for
any distributions attributable to net capital gain, which will
be taxable to shareholders as long-term capital gains. Because
each fund is actively managed and may realize taxable net
short-term capital gains by selling shares of a mutual fund in
its portfolio with unrealized appreciation, investing in a fund
rather than directly in the underlying funds may result in
increased tax liability to a shareholder since the fund must
distribute its gains in accordance with the rules described
above. A fund's ability to dispose of shares of underlying
funds held less than three months may be limited by
requirements relating to a fund's qualification as a regulated
investment company for federal income tax purposes.
Distributions of net capital gain received by a fund from
the underlying funds (as described above), as well as net
capital gain realized by a fund from the purchase and sale (or
redemption) of mutual fund shares or other securities held by a
fund for more than one year, will be taxable to a shareholder
as long-term capital gain (even if the shareholder has held the
shares for less than one year). If a shareholder who has
received a capital gain distribution suffers a loss on the
redemption or other sale of his or her fund shares that have a
tax holding period of six months or less, the loss on those
shares will be treated as a long-term capital loss to the
extent of the capital gain distribution received on those
shares. Also, any loss realized on a redemption or other sale
of fund shares may be disallowed to the extent the shares
disposed of are replaced with other shares of the same fund
within a period of 61 days beginning 30 days before and ending
30 days after the shares are disposed of, such as pursuant to
automatic dividend reinvestments. Long-term capital gains,
including distributions of net capital gain, are currently
subject to a maximum federal tax rate of 28%, which is less
than the maximum rate imposed on other types of taxable
income.
For purposes of determining the character of income
received by a fund when an underlying fund distributes net
capital gain to a fund, the fund will treat the distribution as
a long-term capital gain, even if the fund has held shares of
the underlying fund for less than one year. Any loss incurred
by a fund on the redemption or other sale of such mutual fund's
shares that have a tax holding period of six months or less,
however, will be treated as a long-term capital loss to the
extent of the gain distribution received on the shares disposed
of by the fund.
If a fund acquires stock of certain foreign corporations
that receive at least 75% of their annual gross income from
passive sources (such as interest, dividends, rents, royalties
or capital gain) or hold at least 50% of their assets in
investments producing such passive income ("passive foreign
investment companies"), the fund could be subject to federal
income tax and additional interest charges on "excess
distributions" received from such companies or gain from the
sale of stock in such companies, even if all income or gain
actually received by the fund is timely distributed to its
shareholders. The fund would not be able to pass through to
its shareholders any credit or deduction for such a tax.
Certain elections may, if available, ameliorate these adverse
tax consequences, but any such election would require the fund
to recognize taxable income or gain without the concurrent
receipt of cash. Each fund may limit and/or manage its
holdings in passive foreign investment companies to minimize
its tax liability or maximize its return from these
investments.
Each fund may be subject to foreign withholding or other
foreign taxes imposed by foreign countries with respect to the
fund's investments in foreign securities. Tax conventions
between certain countries and the U.S. may reduce or eliminate
such taxes in some cases. The funds do not except to qualify
to pass such taxes or associated foreign tax credits or
deductions through to their shareholders, who consequently are
not expected to take them into account on their own tax
returns.
Foreign exchange gains and losses realized by a fund in
connection with certain transactions involving foreign
currency-denominated debt securities, foreign currency forward
contracts, foreign currencies, or payables or receivables
denominated in foreign currency are subject to Section 988 of
the Code, which generally causes such gains and losses to be
treated as ordinary income and losses and may affect the
amount, timing and character of distributions to shareholders.
Any such transactions that are not directly-related to a fund's
investment in stock or securities, possibly including any such
transaction not used for hedging purposes, may increase the
amount of gain it is deemed to recognize from the sale of
certain investments or derivatives held for less than three
months, which gain is limited under the Code to less than 30%
of its gross income for each taxable year, and may under future
Treasury regulations produce income not among the types of
"qualifying income" from which the fund must derive at least
90% of its gross income for each taxable year. If the net
foreign exchange loss for a year treated as ordinary loss under
Section 988 were to exceed the fund's investment company
taxable income computed without regard to such loss, the
resulting overall ordinary loss for such year would not be
deductible by the fund or its shareholders in future years.
Limitations imposed by the Code on regulated investment
companies like the funds may restrict each fund's ability to
enter into options and futures contracts, foreign currency
positions and foreign currency forward contracts. Certain of
these transactions may cause a fund to recognize gains or
losses from marking to market even though its positions have
not been sold or terminated and may affect the character as
long-term or short-term (or, in the case of certain foreign
currency options, futures and forward contracts, as ordinary
income or loss) of some capital gains and losses realized by
the fund. Additionally, certain of a fund's losses on
transactions involving options, futures, forward contracts, and
any offsetting or successor positions in its portfolio, may be
deferred rather than being taken into account currently in
calculating the fund's taxable income or gain. Certain of such
transactions may also cause the fund to dispose of investments
sooner than would otherwise have occurred. These transactions
may therefore affect the amount, timing and character of a
fund's distributions to shareholders. The funds will take into
account the special tax rules applicable to options, futures or
forward contracts, including consideration of available
elections, in order to seek to minimize any potential adverse
tax consequences.
The federal income tax rules applicable to interest rate
swaps, caps, floors and collars are unclear in certain
respects, and a fund may be required to account for these
instruments under tax rules in a manner that, under certain
circumstances, may limit its transactions in these
instruments.
Investments in debt obligations that are at risk of or
are in default (i.e., junk bonds) present special tax issues
for the funds. Tax rules are not entirely clear about issues
such as when the funds may cease to accrue interest, original
issue discount, or market discount, when and to what extent
deductions may be taken for bad debts or worthless securities,
how payments received on obligations in default should be
allocated between principal and income, and whether exchanges
of debt obligations in a workout context are taxable. These
and other issues will be addressed by a fund that holds such
obligations in order to reduce the risk of distributing
insufficient income to preserve its status as a regulated
investment company and seek to avoid becoming subject to
federal income or excise tax.
The tax treatment of distributions from a fund is the
same whether the distributions are received in additional
shares or in cash. Shareholders receiving distributions in the
form of additional shares will have a cost basis for federal
income tax purposes in each share received equal to the amount
of cash that could have been received instead.
A fund may invest in mutual funds with capital loss
carry-forwards. If such a mutual fund realizes capital gains,
it will be able to offset the gains to the extent of its loss
carryforwards in determining the amount of capital gains which
must be distributed to shareholders. To the extent that gains
are offset in this manner, distributions to a fund and its
shareholders will likely be reduced. Similarly, a fund may
incur capital losses that it may carry forward to future
taxable years to offset capital gains it may realize in such
years.
Depending upon a shareholder's residence for tax
purposes, distributions and the value of fund shares may also
be subject to state and local taxes, or other taxes.
Shareholders should consult their own tax advisers regarding
the tax consequences of ownership of shares of, and receipt of
distributions from, a fund in their particular
circumstances.
The funds are generally required to withhold federal
income tax at a rate of 31% ("backup withholding") from
dividends and other distributions, including redemption
proceeds paid to individuals and other non-exempt shareholders
if (1) the shareholder fails to furnish the Trust with and to
certify his or her correct social security number or other
taxpayer identification number, (2) the Internal Revenue
Service (the "IRS") or a broker notifies the Trust that the
shareholder is subject to withholding or (3) the shareholder
fails to certify that he or she is not subject to backup
withholding.
Each fund will distribute investment company taxable
income and any net capital gain at least annually. All
dividends and distributions will be reinvested automatically at
net asset value in additional shares of the fund making the
distribution, unless the shareholder notifies the fund in
writing of his or her election to receive distributions in
cash.
The foregoing discussion relates solely to U.S. federal
income tax law as applicable to U.S. persons (i.e., U.S.
citizens or residents and U.S. domestic corporations,
partnerships, trusts or estates) subject to tax under such law.
The discussion does not address special tax rules applicable to
certain classes of investors, such as retirement plans, tax-
exempt entities, insurance companies and financial
institutions.
Non-U.S. investors not engaged in a U.S. trade or
business with which their fund investment is effectively
connected will be subject to U.S. federal income tax treatment
that is different from that described above. These investors
may be subject to non-resident alien withholding tax at the
rate of 30% (or a lower rate under an applicable tax treaty) on
amounts treated as ordinary dividends from a fund and, unless
an effective Form W-8 is on file, 31% backup withholding on
certain other payments from the fund. Non-U.S. investors
should consult their tax advisers regarding such treatment and
the applicability of foreign taxes to an investments in the
funds.
The funds are not subject to Massachusetts corporate
excise or franchise taxes. Provided that each fund qualifies
as a regulated investment company under the Code, the funds
will also not be required to pay Massachusetts income tax.
IX. CUSTODIAN, COUNSEL AND INDEPENDENT ACCOUNTANTS
Pursuant to a Custody Agreement between the Trust and
Boston Safe Deposit and Trust Company ("Boston Safe"), a
subsidiary of Mellon Bank Corporation, provides custodial
services to the Trust and each of the funds. The principal
business address of Boston Safe is One Boston Place, Boston,
Massachusetts 02108.
Hale and Dorr, 60 State Street, Boston, Massachusetts
02109, is counsel for the Trust.
Coopers & Lybrand L.L.P., One Post Office Square, Boston,
Massachusetts 02109, has been selected as auditors of the
Trust.
X. DESCRIPTION OF THE TRUST
The Trust is an open-end, diversified series management
investment company established as an unincorporated business
Trust under the laws of The Commonwealth of Massachusetts
pursuant to a Declaration of Trust dated September 13, 1996.
The Trustees of the Trust have authority to issue an
unlimited number of shares of beneficial interest in an
unlimited number of series, each share with a par value of
$.001. Currently, the Trust consists of three series. Each
share in a particular series represents an equal proportionate
interest in that series with each other share of that series
and is entitled to such dividends and distributions as are
declared by the Trustees of the Trust. Upon any liquidation of
a series, shareholders of that series are entitled to share pro
rata in the net assets of that series available for
distribution. Shareholders in one of the series have no
interest in, or rights upon liquidation of, any of the other
series.
The Trust will normally not hold annual meetings of
shareholders to elect Trustees. If less than a majority of the
Trustees of the Trust holding office have been elected by
shareholders, a meeting of shareholders of the Trust will be
called to elect Trustees. Under the Declaration of Trust and
the 1940 Act, the record holders of not less than two-thirds of
the outstanding shares of the Trust may remove a Trustee by
votes cast in person or by proxy at a meeting called for the
purpose or by a written declaration filed with the Trust's
custodian bank. Except as described above, the Trustees will
continue to hold office and may appoint successor Trustees.
Under Massachusetts law, shareholders could, under
certain circumstances, be held personally liable for the
obligations of the Trust. However, the Declaration of Trust
disclaims shareholder liability for acts or obligations of the
Trust and requires that notice of this disclaimer be given in
each agreement, obligation or instrument entered into or
executed by the funds or the Trustees. The Declaration of
Trust provides for indemnification out of the Trust's property
for all loss and expense of any shareholder held personally
liable for obligations of the Trust and its funds.
Accordingly, the risk of a shareholder of the Trust incurring a
financial loss on account of shareholder liability is limited
to circumstances in which the Trust itself would be unable to
meet its obligations. The likelihood of such circumstances is
remote.
XI. ADDITIONAL INFORMATION
The prospectus and this statement of additional
information do not contain all of the information included in
the Trust's registration statement filed with the Securities
and Exchange Commission under the Securities Act of 1933, as
amended, with respect to the securities offered hereby.
Certain portions of the registration statement have been
omitted pursuant to the rules and regulations of the Securities
and Exchange Commission. Such registration statement,
including the exhibits filed therewith, may be examined at the
offices of the Securities and Exchange Commission in
Washington, D.C.
Statements contained in the prospectus and this statement
of additional information as to the contents of any agreement
or other documents referred to are not necessarily complete,
and, in each instance, reference is made to the copy of such
agreement or other documents filed as an exhibit to the
registration statement, each such statement being qualified in
all respects by such reference.
XII. FINANCIAL STATEMENTS
The financial statements of each fund as of November 6,
1996 included in this statement of additional information have
been audited by Coopers & Lybrand L.L.P., independent public
accountants, as indicated in their report with respect thereto.
The financial statements are included herein in reliance upon
the authority of said firm as experts in accounting and
auditing and giving said report.
INSIGHT PREMIER FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
November 6, 1996
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Insight
Insight
Insight Moderate
Conservative
Growth Growth
Allocation
Fund Fund Fund
ASSETS:
Cash....................................................
.......... $50,000 $25,000 $25,000
Deferred organizational costs (Note 1)............
21,000 10,500 10,500
Total Assets
............................................. 71,000
35,500 35,500
LIABILITIES:
Accrued organizational costs (Note 1)............
21,000 10,500 10,500
Total Liabilities
...................................... 21,000
10,500 10,500
NET ASSETS.............................................
$50,000 $25,000 $25,000
SHARES OF BENEFICIAL INTEREST
OUTSTANDING.........................................5,00
0 2,500 2,500
NET ASSET VALUE, offering and
redemption price per share of beneficial
interest outstanding
....................................... $ 10.00 $
10.00 $ 10.00
</TABLE>
INSIGHT PREMIER FUNDS
NOTES TO STATEMENTS OF ASSETS AND LIABILITIES
NOVEMBER 6, 1996
1. Insight Premier Funds (the "Trust") was organized as
a Massachusetts business trust on September 13, 1996,
and is registered under the Investment Company Act of
1940, as amended, as an open-end management investment
company. The Trust offers three funds: Insight Growth
Fund, Insight Moderate Growth Fund and Insight
Conservative Allocation Fund (individually, a "Fund",
collectively the "Funds"). The primary focus of each
Fund is to develop an asset allocation strategy and to
select from the wide range of mutual funds currently
available. The preparation of financial statements in
accordance with generally accepted accounting principles
requires management to make estimates and assumptions
that affect the reported amounts and disclosures in the
financial statements. Actual results could differ from
those estimates. The Trust has had no operations other
than organizational matters and the issuance and sale of
initial shares of each of the Funds to Insight
Management, Inc. ("Insight"), each Fund's investment
adviser.
Costs incurred by the Trust and the Funds in connection
with their organization will be deferred and amortized
on a straight line basis over a period not to exceed
sixty months from the date upon which each Fund
commences its investment operations. If any of the
initial shares are redeemed during the amortization
period by any holder thereof, the redemption proceeds
will be reduced by a pro rata portion of the then
unamortized organization costs.
Expenses: General expenses of the Trust are allocated
to the respective Funds based upon relative net assets.
Operating expenses directly attributable to a Fund are
charged to that Fund's operations.
2. AGREEMENTS AND TRANSACTIONS WITH AFFILIATES
The Trust has entered into an Investment Advisory
Agreement with Insight. For its investment advisory
services to the Funds, Insight is entitled to receive a
monthly advisory fee calculated at an annual rate of
0.75% of the value of the average daily net assets of
each Fund. Insight has voluntarily agreed to limit each
Fund's other expenses until December 31, 1997, to 0.25%
of the Fund's average daily net assets.
Insight Brokerage Services, Inc., an affiliate of
Insight, serves as the distributor of each Fund. First
Data Investor Services Group, Inc. ("First Data"), a
wholly-owned subsidiary of First Data Corporation,
serves as the administrator and transfer agent of each
Fund.
Report of Independent Accountants
To the Shareholders and Board of Trustees
of Insight Premier Funds:
We have audited the accompanying statements of assets and
liabilities of each of the series of Insight Premier Funds
(comprised of Insight Growth Fund, Insight Moderate Growth Fund
and Insight Conservative Allocation Funds (the "Funds")), as of
November 6, 1996. These financial statements are the
responsibility of the Funds' management. Our responsibility is
the express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used
and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We
believe that our audit of the financial statements provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial
position of the Funds enumerated above as of November 6, 1996,
in conformity with generally accepted accounting principles.
/s/ COOPERS & LYBRAND L.L.P.
Coopers & Lybrand L.L.P.
Boston, Massachusetts
November 7, 1996
APPENDIX
RATINGS OF DEBT INSTRUMENTS
Standard & Poor's Ratings Group ("S&P") Corporate Bond Ratings.
An S&P corporate bond rating is a current assessment of the
credit worthiness of an obligor, with respect to a specific
obligation. This assessment may take into consideration
obligors such as guarantors, insurers or lessees. The debt
rating is not a recommendation to purchase, sell or hold a
security inasmuch as it does not comment as to market price or
suitability for a particular investor. The ratings are based
on current information furnished by the issuer or obtained by
S&P from other sources it considers reliable. S&P does not
perform any audit in connection with the ratings and may, on
occasion, rely on unaudited financial information.
The ratings are based, in varying degrees, on the
following considerations: (a) likelihood of default capacity
and willingness of the obligor as to the timely payment of
interest and repayment of principal in accordance with the
terms of the obligation; (b) nature of and provisions of the
obligation; and (c) protection afforded by and relative
position of the obligation in the event of bankruptcy
reorganization or other arrangement under the laws of
bankruptcy and other laws affecting creditors' rights. To
provide more detailed indications of credit quality, ratings
from "AA" to "CCC" may be modified by the addition of a plus or
minus sign to show relative standing within the major rating
categories.
A provisional rating is sometimes used by S&P. It
assumes the successful completion of the project being financed
by the debt being rated and indicates that payment of debt
service requirements is largely or entirely dependent upon the
successful and timely completion of the project. This rating,
however, while addressing credit quality subsequent to
completion of the project, makes no comment on the likelihood
of, or the risk of default upon failure of, such completion.
Bond ratings are as follows:
AAA -- Bonds rated AAA have the highest rating assigned by S&P.
Capacity to pay interest and repay principal is extremely
strong.
AA -- Bonds rated AA have a very strong capacity to pay
interest and repay principal and differs from the higher rated
issues only in small degree.
A -- Bonds rated A have strong capacity to pay interest and
repay principal although it is somewhat more susceptible to the
adverse effects of changes in circumstances and economic
conditions than debt in higher rated categories.
BBB -- Bonds rated BBB are regarded as having an adequate
capacity to pay interest and repay principal. Whereas it
normally exhibits adequate protection parameters, adverse
economic conditions or changing circumstances are more likely
to lead to a weakened capacity to pay interest and repay
principal for debt in this category than in higher rated
categories.
BB, B, CCC, CC -- Bonds rated BB, B, CCC or CC are regarded on
balance, as predominantly speculative with respect to the
issuer's capacity to pay interest and repay principal in
accordance with the terms of the obligation. BB indicates the
lowest degree of speculation and CC the highest degree of
speculation. While such bonds will likely have some quality
and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.
C -- The rating C is reserved for income bonds on which no
interest is being paid.
D -- Debt rated D is in default, and payment of interest and/or
repayment of principal is in arrears.
S&P Note Ratings. An S&P note rating reflects the liquidity
concerns and market access risks unique to notes. Notes due in
three years or less will likely receive a note rating. Notes
maturing beyond three years will most likely receive a long-
term debt rating. The following criteria are used in making
that assessment: (a) Amortization schedule (the larger the
final maturity relative to other maturities, the more likely it
will be treated as a note), and (b) Source of payment (the more
dependent the issue is on the market for its refinancing, the
more likely it will be treated as a note).
Note ratings are as follows:
SP-1 -- Very strong or strong capacity to pay principal and
interest. Those issues determined to possess overwhelming
safety characteristics will be given a plus (+) designation.
SP-2 -- Satisfactory capacity to pay principal and interest.
SP-3 -- Speculative capacity to pay principal and interest.
Demand Bonds. S&P assigns "Dual" ratings to all long-term debt
issues that have as part of their provisions a demand or double
feature. The first rating addresses the likelihood of
repayment of principal and interest as due, and the second
rating addresses only the demand feature. The long-term debt
rating symbols are used for bonds to denote the long-term
maturity and the commercial paper rating symbols are used to
denote the put options (for example, "AAA/A-1+). For the newer
"Demand Notes," S&P note rating symbols, combined with the
commercial paper symbols, are used (for example, "SP-1+/A-1+").
Moody's Corporate Bond Ratings. Moody's ratings are as
follows:
Aaa -- Bonds that are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and
are generally referred to as "gilt-edge." Interest payments
are protected by a large or by an exceptionally stable margin
and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of
such issues.
Aa -- Bonds that are rated Aa are judged to be of high quality
by all standards. Together with the Aaa group they comprise
what are generally known as high grade bonds. They are rated
lower than the best bonds because margins of protection may not
be as large as in Aaa securities or fluctuation of protective
elements may be of great amplitude or there may be other
elements present that make the long-term risks appear somewhat
larger than in Aaa securities.
A -- Bonds that are rated A possess many favorable investment
attributes and are to be considered as upper medium grade
obligations. Factors giving security to principal and interest
are considered adequate, but elements may be present that
suggest a susceptibility to impairment sometime in the future.
Baa -- Bonds that are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly
secured. Interest payments and principal security appear
adequate for the present, but certain protective elements may
be lacking or may be characteristically unreliable over any
great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as
well.
Moody's applies numerical modifiers, 1, 2 and 3, in each
generic rating classification from Aa through Baa in its
corporate bond rating system. The modifier 1 indicates that
the security ranks in the higher end of its generic rating
category; the modifier 2 indicates a mid-range ranking; and the
modifier 3 indicates that the issue ranks in the lower end of
its generic rating category.
Ba -- Bonds that are rated Ba are judged to have speculative
elements; their future cannot be considered as well assured.
Often the protection of interest and principal payments may be
very moderate and thereby not well safeguarded during good and
bad times over the future. Uncertainty of position
characterizes bonds in this class.
B -- Bonds that are rated B generally lack characteristics of
the desirable investment. Assurance of interest and principal
payments, or of maintenance of other terms of the contract over
any long period of time, may be small.
Caa -- Bonds rated Caa are of poor standing. Such issues may
be in default or there may be present elements of danger with
respect to principal or interest.
Ca -- Bonds rated Ca represent obligations that are speculative
in a high degree. Such issues are often in default or have
other marked shortcomings.
C -- Bonds rated C are the lowest rated class of bonds and
issues so rated can be regarded as having extremely poor
prospects of ever attaining any real investment standing.
Moody's Note Ratings. Moody's Short-Term Loan Ratings --
Moody's ratings for short-term obligations will be designated
Moody's Investment Grade (MIG). This distinction is in
recognition of the differences between short-term credit risk
and long-term risk. Factors affecting the liquidity of the
borrower are uppermost in importance in short-term borrowing,
while various factors of major importance in bond risk are of
lesser importance over the short run.
Rating symbols and their meanings follow:
MIG 1 -- This designation denotes best quality. There is
present strong protection by established cash flows, superior
liquidity support, or demonstrated broad-based access to the
market for refinancing.
MIG 2 -- This designation denotes high quality. Margins of
protection are ample, although not so large as in the preceding
group.
MIG 3 -- This designation denotes favorable quality. All
security elements are accounted for, but this is lacking the
undeniable strength of the preceding grades. Liquidity and
cash flow protection may be narrow and market access for
refinancing is likely to be less well established.
MIG 4 -- This designation denotes adequate quality. Protection
commonly regarded as required of an investment security is
present and, although not distinctly or predominantly
speculative, there is specific risk.
PART C: OTHER INFORMATION
Item 24. Financial Statements and Exhibits.
List all financial statements and exhibits filed as part
of the Registration Statement.
(a) Financial Statements:
Included in Part A
None
Included in Part B
(i) Statements of Assets and Liabilities
(ii) Report of Independent Accountants
(b) Exhibits:
(1) Declaration of Trust is incorporated by reference
to Exhibit 1 of the Registration Statement on Form N-1A, filed on
September 16, 1996.
(2) By-Laws are incorporated by reference to
Exhibit 2 of the Registration
Statement on Form N-1A, filed on September
16, 1996.
(3) Not Applicable
(4) Not Applicable
(5) Form of Investment Advisory Agreement between
Registrant and Insight Management, Inc. is filed herein.
(6) Form of Distribution Agreement between Registrant
and Insight Brokerage Services, Inc. is filed
herein.
(7) Not Applicable
(8) Form of Custody Agreement between Registrant and
Boston Safe Deposit and Trust Company is filed herein.
(9)(a) Form of Transfer Agency Agreement between
Registrant and First Data Investor Services Group, Inc. is
filed herein.
(b) Form of Administration Agreement between
Registrant and First Data Investor Services Group, Inc. is
filed herein.
(10) Opinion and Consent of Counsel is filed herein.
(11)(a) Consent of Independent Accountants is filed
herein.
(b) Power of Attorney of Trustees and officers is
filed herein.
(12) Not Applicable
(13)(a) Purchase Agreement relating to Initial
Capital between the Registrant,
on behalf of Insight Growth Fund, and Insight Management,
Inc. is filed herein.
(b) Purchase Agreement relating to Initial
Capital between the Registrant,
on behalf of Insight Moderate Growth Fund, and Insight
Management, Inc.
is filed herein.
(c) Purchase Agreement relating to Initial
Capital between the Registrant,
on behalf of Insight Conservative Allocation Fund, and
Insight Management, Inc.
is filed herein.
(14) Not Applicable
(15) Not Applicable
(16) Not Applicable
(17) Not Applicable
(18) Not Applicable
Item 25. Persons Controlled by or Under Common Control with
Registrant.
It is anticipated that as of the effective date of this
Registration Statement all of the shares of Registrant will be
owned by Insight Management, Inc. Eric M. Kobren, Director and
sole shareholder of Insight Management, Inc., is also Director
and sole shareholder of Insight Brokerage Services, Inc.,
Registrant's principal underwriter.
Item 26. Number of Holders of Securities.
It is anticipated that there will be one record holder of
the Registrant's shares of beneficial interest, $.001 par
value, on the date the Registrant's Registration Statement
becomes effective.
Item 27. Indemnification.
Under Section 4.3 of Registrant's Declaration of Trust,
any past or present Trustee or officer of Registrant (including
persons who serve at Registrant's request as directors,
officers or trustees of another organization in which
Registrant has any interest as a shareholder, creditor or
otherwise [hereinafter referred to as a "Covered Person"]) is
indemnified to the fullest extent permitted by law against all
liability and all expenses reasonably incurred by him or her in
connection with any claim, action, suit or proceeding to which
he or she may be a party or otherwise involved by reason of his
or her being or having been a Covered Person. This provision
does not authorize indemnification when it is determined, in
the manner specified in the Declaration of Trust, that such
Covered Person has not acted in good faith in the reasonable
belief that his or her actions were in or not opposed to the
best interests of Registrant. Moreover, this provision does
not authorize indemnification when it is determined, in the
manner specified in the Declaration of Trust, that such Covered
Person would otherwise be liable to Registrant or its
shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of his or her duties.
Expenses may be paid by Registrant in advance of the final
disposition of any claim, action, suit or proceeding upon
receipt of an undertaking by such Covered Person to repay such
expenses to Registrant in the event that it is ultimately
determined that indemnification of such expenses is not
authorized under the Declaration of Trust and the Covered
Person either provides security for such undertaking or insures
Registrant against losses from such advances or the
disinterested Trustees or independent legal counsel determines,
in the manner specified in the Declaration of Trust, that there
is reason to believe the Covered Person will be found to be
entitled to indemnification.
Insofar as indemnification for liabilities arising under
the Securities Act of 1933, as amended (the "Securities Act"),
may be permitted to Trustees, officers and controlling persons
of the Registrant pursuant to the foregoing provisions or
otherwise, the Registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Securities Act and
is therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a
Trustee, officer, or controlling person of the Registrant in
connection with the successful defense of any claim, action,
suit or proceeding) is asserted against the Registrant by such
Trustee, officer or controlling person in connection with the
shares being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and
will be governed by the final adjudication of such issue.
Item 28. Business and Other Connections of Investment
Adviser.
Insight Management, Inc., established in 1987, manages
the investment needs of clients seeking to invest in the fixed
revenue and equity markets.
The list required by this Item 28 of officers and
directors of Insight Management, Inc., together with the
information as to any other business, profession, vocation or
employment of substantial nature engaged in by such officers
and directors during the past two years, is incorporated by
reference to Schedules A and D of Form ADV filed by Insight
Management, Inc. pursuant to the Investment Advisers Act of
1940 (SEC File No. 801-30125).
Item 29. Principal Underwriters.
(a) Insight Brokerage Services, Inc., the Fund's Distributor,
does not act as principal underwriter, depositor or investment
adviser for any other mutual funds.
(b) For information with respect to each Director and officer
of the principal underwriter of the Fund, see the following:
Position and Offices
Name and Principal with Insight Brokerage Position and Offices
Business Address* Services, Inc. with the
Registrant
Eric M. Kobren Director, President President
and Treasurer
Cathy Kobren Secretary None
* The business address of the above-listed persons is 20
William Street, Suite 310, P.O. Box 9135, Wellesley Hills,
Massachusetts 02181.
(c) Not Applicable.
Item 30. Location of Accounts and Records.
All accounts books and other documents required to be
maintained by Registrant by Section 31(a) of the Investment
Company Act of 1940 and the Rules thereunder will be maintained
at the offices of:
Insight Management, Inc.
20 William Street, Suite 310
P.O. Box 9135
Wellesley Hills, Massachusetts 02181
(records relating to its functions as investment adviser)
Insight Brokerage Services, Inc.
20 William Street, Suite 310
P.O. Box 9135
Wellesley Hills, Massachusetts 02181
(records relating to its functions as distributor)
First Data Investor Services Group, Inc.
One Exchange Place
Boston, Massachusetts 02109
(records relating to its functions as administrator)
First Data Investor Services Group, Inc.
4400 Computer Drive
Westborough, Massachusetts 01581
(records relating to its functions as transfer agent)
Boston Safe Deposit and Trust Company
One Boston Place
Boston, Massachusetts 02108
(records relating to its functions as custodian)
Item 31. Management Services.
Not Applicable.
Item 32. Undertakings.
(a) Not Applicable.
(b) The undersigned Registrant hereby undertakes to
file a post-effective amendment, using financial statements
which need not be certified, regarding the Fund within four to
six months after the effective date of the Registration
Statement under the Securities Act of 1933.
(c) The undersigned Registrant will afford to
shareholders of the Fund the rights provided by Section 16(c)
of the Investment Company Act of 1940 so long as Registrant
does not hold annual meetings of its shareholders.
(d) The Registrant will furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest
annual report to shareholders, upon request and without charge.
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933 and the Investment Company Act of 1940, the Registrant has
duly caused this Pre-Effective Amendment to the Registration
Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Boston, and
Commonwealth of Massachusetts on the 8th day of November, 1996.
INSIGHT PREMIER FUNDS
By: Eric M. Kobren
Eric M. Kobren, President
Pursuant to the requirements of the Securities Act of
1933, this Pre-Effective Amendment to the Registration
Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signatures Title Date
ERIC M. KOBREN President, November 8, 1996
Eric M. Kobren Chairman of the Board
and Trustee (Principal Executive
Officer)
MICHAEL P. CASTELLANO Treasurer
Michael P. Castellano and Trustee November 8, 1996
(Principal Financial
Officer and
Principal Accounting Officer)
ARTHUR DUBROFF Trustee November 8, 1996
Arthur Dubroff
SCOTT P. MASON Trustee November 8, 1996
Scott P. Mason
STUART J. NOVICK Trustee November 8, 1996
Stuart J. Novick
SCOTT A. SCHOEN Trustee November 8, 1996
Scott A. Schoen
EXHIBIT INDEX
Exhibit
Number Description
5 Form of Investment Advisory Agreement between Registrant
and Insight Management, Inc.
6 Form of Distribution Agreement between Registrant
and Insight Brokerage Services, Inc.
8 Form of Custody Agreement between Registrant
and Boston Safe Deposit and Trust Company
9(a) Form of Transfer Agency Agreement between Registrant
and First Data Investor Services Group, Inc.
9(b) Form of Administration Agreement between Registrant
and First Data Investor Services Group, Inc.
10 Opinion and Consent of Counsel
11(a) Consent of Independent Accountants
11(b) Power of Attorney of Trustees and Officers
13(a) Purchase Agreement relating to Initial Capital between
the Registrant,
on behalf of Insight Growth Fund, and Insight Management,
Inc.
13(b) Purchase Agreement relating to Initial Capital between
the Registrant,
on behalf of Insight Moderate Growth Fund, and Insight
Management, Inc.
13(c) Purchase Agreement relating to Initial Capital between
the Registrant,
on behalf of Insight Conservative Allocation Fund, and
Insight Management, Inc.
EXHIBIT 5
FORM OF
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of this th day of
, 1996 between Insight Premier Funds, a Massachusetts
business trust (the "Trust"), on behalf of its series (each,
a "Fund" and collectively, the "Funds"), and Insight
Management, Inc. (the "Adviser"), registered as an
investment adviser under the Investment Advisers Act of 1940
(the "Advisers Act").
WHEREAS, the Trust is registered as an open-end,
management investment company under the Investment Company
Act of 1940 (the "1940 Act"); and
WHEREAS, the Trust desires to retain the Adviser to
furnish investment advisory services to the Funds in the
management of each Fund's assets, and the Adviser is willing
to furnish such services for the Trust on the terms
hereinafter set forth;
NOW THEREFORE, in consideration of the premises and
mutual covenants herein contained, it is agreed between the
parties hereto as follows:
1. Appointment. The Trust hereby appoints the
Adviser to act as investment adviser to each Fund for the
period and on the terms set forth in this Agreement. The
Adviser accepts such appointment and agrees to furnish the
services herein set forth for the compensation herein
provided. In the event that the Trust establishes one or
more series other than the Funds with respect to which it
desires to retain the Adviser to act as investment adviser
hereunder, it shall notify the Adviser in writing. If the
Adviser is willing to render such services under this
Agreement it shall notify the Trust in writing whereupon
such series shall become a Fund hereunder and shall be
subject to the provisions of this Agreement except to the
extent that said provisions (including those relating to the
compensation payable by the Fund to the Adviser) are
modified with respect to such Fund in writing by the Trust
and the Adviser at the time.
2. Delivery of Documents. The Trust has furnished
the Adviser with copies, properly certified or
authenticated, of each of the following:
(a) The Trust's Declaration of Trust as filed with the
Secretary of the Commonwealth of Massachusetts on September
13, 1996 (such Declaration of Trust, as presently in effect
and as it shall from time to time be amended, is herein
called the "Declaration of Trust");
(b) The Trust's By-Laws (such By-Laws, as presently in
effect and as they shall from time to time be amended, are
herein called the "By-Laws");
(c) Votes of the Trust's Board of Trustees authorizing the
appointment of the Adviser and approving this Agreement;
(d) The Trust's Registration Statement on Form N-1A under
the Securities Act of 1933 (the "1933 Act"), and under the
1940 Act, relating to shares of beneficial interest of the
Trust (herein called the "Shares") as filed with the
Securities and Exchange Commission (the "SEC") and all
amendments thereto; and
(e) The most recent prospectus of the Trust relating to
the Funds (such prospectus together with the related
Statement of Additional Information, as presently in effect
and all amendments and supplements thereto, are herein
called the "Prospectus").
The Trust will furnish the Adviser from time to time with
copies of all amendments of or supplements to the foregoing,
if any.
3. Management. Subject to the supervision of the
Trust's Board of Trustees, the Adviser will provide a
continuous investment program for each Fund's assets
entrusted to it for portfolio management purposes, including
investment research and management with respect to all
securities, investments, cash and cash equivalents in the
Funds. The Adviser will determine from time to time what
securities and other investments will be purchased, retained
or sold with respect to the Funds and will place the daily
purchase or sale orders. The Adviser will provide the
services rendered by it under this Agreement in accordance
with each Fund's investment objective, policies and
restrictions as stated in the Prospectus and votes of the
Trust's Board of Trustees. The Adviser agrees that it will
supply the Trust and its Board of Trustees with reports and
statistical data as requested with respect to the securities
that each Fund may hold or contemplate purchasing.
4. Other Covenants. The Adviser agrees that it:
(a) will comply with all applicable Rules and
Regulations of the SEC and will, in addition, conduct its
activities under this Agreement in accordance with
regulations of any other Federal and State agencies which
may now or in the future have jurisdiction over its
activities under this Agreement;
(b) will use its best efforts to seek the best
overall terms available in executing transactions for the
Funds and soliciting brokers or dealers. In assessing the
best overall terms available for any transaction, the
Adviser shall consider all factors that 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, both for
the specific transaction and on a continuing basis. In
evaluating the best overall terms available, and in
selecting the brokers or dealers to execute a particular
transaction, the Adviser may consider the brokerage and
research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of 1934, as amended)
provided to the Funds and/or other accounts over which the
Adviser or an affiliate of the Adviser exercises investment
discretion. The Adviser is authorized to pay to a broker or
dealer who provides such brokerage and research services a
commission for executing a portfolio transaction for a Fund
which is in excess of the amount of commission another
broker or dealer would have charged for effecting that
transaction if, but only if, the Adviser determines in good
faith that such commission is reasonable in relation to the
value of the brokerage and research services provided by
such broker or dealer, viewed in terms of either that
particular transaction or in terms of all of the accounts
over which the Adviser or any affiliate of the Adviser
exercises investment discretion;
(c) will provide certain executive personnel
for the Trust as may be mutually agreed upon from time to
time with the Board of Trustees, the salaries and expenses
of such personnel to be borne by the Adviser unless
otherwise mutually agreed upon;
(d) will, at its own expense, maintain such
staff and employ or retain such personnel and consult with
such other persons as may be necessary to render the
services required to be provided by the Adviser or furnished
to the Trust under this Agreement. Without limiting the
generality of the foregoing, the staff and personnel of the
Adviser shall be deemed to include persons employed or
otherwise retained by the Adviser to furnish statistical and
other factual data, advice regarding economic factors and
trends, information with respect to technical and scientific
developments, and such other information, advice and
assistance as the Adviser may desire. The Adviser will also
provide such additional management and administrative
services as may be required in connection with the business
affairs and operations of the Trust beyond those furnished
by the Trust's administrator;
(e) will bear the cost of rendering the
services to be performed by it under this Agreement, and
shall provide the Trust with such office space, facilities,
equipment, clerical help, and other personnel and services
as the Trust shall reasonably require in the conduct of its
business.
5. Services Not Exclusive. The advisory services
furnished by the Adviser hereunder are not to be deemed
exclusive, and the Adviser shall be free to furnish similar
services to others so long as its services under this
Agreement are not impaired thereby. To the extent that the
purchase or sale of securities or other investments of the
same issuer may be deemed by the Adviser to be suitable for
two or more accounts managed by the Adviser, the available
securities or investments may be allocated in a manner
believed by the Adviser to be equitable to each account.
The Trust recognizes that in some cases this procedure may
adversely affect the price paid or received by a Fund or the
size of the position obtainable for or disposed of by that
Fund.
6. Books and Records. In compliance with the
requirements of Rule 31a-3 under the 1940 Act, the Adviser
hereby agrees that all records which it maintains for the
benefit of the Trust are the property of the Trust and
further agrees to surrender promptly to the Trust any of
such records upon the Trust's request. The Adviser further
agrees to preserve for the periods prescribed by Rule 31a-2
under the 1940 Act the records required to be maintained by
it pursuant to Rule 31a-1 under the 1940 Act that are not
maintained by others on behalf of the Trust.
7. Expenses. During the term of this Agreement,
the Adviser will pay all expenses incurred by it in
connection with its investment advisory services under this
Agreement other than the cost of securities, commodities and
other investments (including brokerage commissions and other
transaction charges, if any) purchased or sold for a Fund.
Each Fund will bear certain other expenses incurred in its
operation, including: organizational expenses; taxes,
interest, brokerage costs and commissions; fees of Trustees
of the Trust who are not officers, directors, or employees
of the Adviser, the distributor or administrator or any of
their affiliates; Securities and Exchange Commission fees;
state Blue Sky qualification fees; charges of the
administrator, the custodian, any subcustodians, and
transfer and dividend-paying agents; insurance premiums;
auditing, pricing and legal expenses; costs of maintenance
of the Trust's existence; costs of preparing and printing
prospectuses and statements of additional information for
regulatory purposes and for distribution to existing
shareholders; costs of shareholders' reports and meetings of
the shareholders of the Funds and of the officers or Board
of Trustees of the Trust; membership fees in trade
associations; litigation, indemnification and other
extraordinary or non-recurring expenses.
8. Compensation. For the services provided by the
Adviser pursuant to this Agreement, the Trust will pay the
Adviser and the Adviser will accept as full compensation an
investment advisory fee, based upon the average daily net
assets of each Fund, accrued daily and paid monthly as soon
as practicable after the end of each month, at the annual
rate set forth below. If the Adviser shall serve for less
than the whole of any month, the foregoing compensation
shall be prorated. The Adviser may, from time to time,
waive certain amounts payable hereunder or reimburse Fund
expenses for such period or periods as the Adviser deems to
be advisable.
Insight Growth Fund 0.75%
Insight Moderate Growth Fund 0.75%
Insight Conservative Allocation Fund 0.75%
9. Reimbursement of the Fund. If in any fiscal
year the aggregate expenses of a Fund (as defined under the
securities regulations of any state having jurisdiction over
the merits of the offering of Fund Shares) exceed the
expense limitation of any such state, the Adviser will
reimburse that Fund for such excess expenses. The
obligation of the Adviser to reimburse a Fund hereunder is
limited in any fiscal year to the amount of its fee
hereunder for such fiscal year, provided, however, that
notwithstanding the foregoing, the Adviser shall reimburse
that Fund for such excess expenses regardless of the amount
of fees paid to it during such fiscal year to the extent
that the securities regulations of any state having
jurisdiction over the over the merits of the offering of
Fund Shares so requires. Such expense reimbursement, if
any, will be estimated, reconciled and paid on a monthly
basis.
10. Corporate Name. The Trust acknowledges that it
uses the name "INSIGHT" in connection with the Funds and the
Trust by consent of the Adviser, which consent was given in
reliance upon the provisions hereafter contained. The Trust
agrees that if the Adviser should cease to be the investment
adviser of the Funds, the Trust will, upon written demand of
the Adviser, forthwith delete from the Funds' name and from
the Trust's name the word "INSIGHT" or any approximation
thereof. The Trust further agrees that the Adviser may
permit other persons, partnerships (general or limited),
associations, trusts, corporations or other incorporated or
unincorporated groups of persons, including without
limitation any investment company or companies of any type
which may be initially sponsored or organized by the Adviser
in the future, to use the word "INSIGHT" or any
approximation thereof as part of their names. As used in
this section, "INSIGHT" and "Insight Management, Inc." and
"Adviser" shall include any successor corporation,
partnership, limited partnership, trust or person.
11. Limitation of Liability. The Adviser shall not
be liable for any error of judgment, mistake of law or for
any other loss whatsoever suffered by the Trust in
connection with the performance of this Agreement, except a
loss resulting from a breach of fiduciary duty with respect
to the receipt of compensation for services or a loss
resulting from willful misfeasance, bad faith or gross
negligence on the part of the Adviser in the performance of
its duties or from reckless disregard by it of its
obligation and duties under this Agreement. The Trust and
the Adviser agree that the obligations of the Trust under
this Agreement shall not be binding upon any of the
Trustees, shareholders, nominees, officers, employees or
agents, whether past, present or future, of the Trust,
individually, but are binding only upon the assets and
property of the Trust, as provided in the Declaration of
Trust. No Fund shall be liable for the obligations incurred
by any other Fund hereunder. The execution and delivery of
this Agreement have been authorized by the Board of Trustees
and a majority of the holders of each Fund's outstanding
voting securities, and signed by an authorized officer of
the Trust, acting as such, and neither such authorization by
such Trustees and shareholders nor such execution and
delivery by such officer shall be deemed to have been made
by any of them individually or to impose any liability on
any of them personally, but shall bind only the assets and
property of the Trust as provided in the Declaration of
Trust.
12. Duration and Termination. This Agreement shall
become effective on , 199 and,
unless sooner terminated as provided herein, shall continue
in effect until June 30, 1998. Thereafter, this Agreement
shall be renewable as to any Fund for successive periods of
one year each, provided such continuance is specifically
approved annually:
(a) by the vote of a majority of those members
of the Trust's Board of Trustees who are not interested
persons of any such party (as that term is defined in the
1940 Act), cast in person at a meeting called for the
purpose of voting on such approval; and
(b) by the Trust's Board of Trustees or by
vote of a majority of the outstanding voting securities of
such Fund, provided, however, that if the holders of any one
Fund fail to approve the Agreement, the Adviser may continue
to act as investment manager of the Fund(s) which did
approve the Agreement, and may continue to act as investment
manager for the Fund which did not approve the Agreement
until new arrangements are made by such Fund.
Notwithstanding the foregoing, this Agreement may be
terminated as to a Fund at any time, without the payment of
any penalty, by the Trust (by vote of the Trust's Board of
Trustees or by vote of a majority of the outstanding voting
securities of the Fund), or by the Adviser, in each case, on
sixty days' prior written notice. This Agreement will
immediately terminate in the event of its assignment. (As
used in this Agreement, the terms "majority of the
outstanding voting securities," "interested persons" and
"assignment" shall have the same meanings as such terms have
in the 1940 Act.)
13. Amendment of Agreement. This Agreement may be
amended as to any Fund by mutual written consent, but the
consent of the Trust must be approved (a) by vote of a
majority of those members of the Board of Trustees of the
Trust who are not parties to this Agreement or interested
persons of any such party, cast in person at a meeting
called for the purpose of voting on such amendment, and (b)
if required by the 1940 Act, by vote of a majority of the
outstanding voting securities of that Fund. However, the
provisions of this Section 13 shall not restrict or limit
the Adviser's ability to waive its fees or reimburse any
Fund's expenses in accordance with Section 8 of this
Agreement.
14. Miscellaneous. 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 upon, and shall inure to the benefit of,
the parties hereto and their respective successors and shall
be governed by the laws of the Commonwealth of
Massachusetts. This Agreement may be executed in one or
more counterparts, all of which taken together shall be
deemed one original.
INSIGHT PREMIER FUNDS
By: ____________________________
Name:
Title:
ATTEST:
By: ____________________________
Name:
Title:
INSIGHT MANAGEMENT, INC.
By: ____________________________
Name:
Title:
ATTEST:
By: ____________________________
Name:
Title:
7
EXHIBIT 6
FORM OF
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made as of this th day of
, 1996 by and between Insight Premier Funds (the "Trust")
and Insight Brokerage Services, Inc. (the "Distributor"), a
corporation organized under the laws of the Commonwealth of
Massachusetts, having its principal place of business at 20
William Street, Wellesley Hills, Massachusetts 02181.
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 , 199 .
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
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 Wellesley
Hills, Massachusetts 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, such
transactions to be specifically approved by any officer of
that Fund. 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. All selling agreements shall
be in such form as is approved by the President of the Fund.
2. Term
This Agreement shall become effective on
, 199 and, unless sooner terminated as provided herein,
shall continue until June 30, 1998 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 1940 Act) 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 1940 Act) 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 1940 Act) 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 1940 Act) 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, 20 William Street,
Suite 310, P.O. Box 9135, Wellesley Hills, Massachusetts
02181; (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 "Insight Premier Funds" and "Trustees of
Insight Premier 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
"Insight Premier 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.
INSIGHT PREMIER FUNDS
By:_________________________
Title:________________________
INSIGHT BROKERAGE SERVICES, INC.
By:_________________________
Title:________________________
SCHEDULE A
to the Distribution Agreement
between Insight Premier Funds and
Insight Brokerage Services, Inc.
Name of Series
Insight Growth Fund
Insight Moderate Growth Fund
Insight Conservative Allocation Fund
INSIGHT PREMIER FUNDS
By:_____________________________
Title:____________________________
INSIGHT BROKERAGE SERVICES, INC.
By:_______________________________
Title:______________________________
9
G:\SHARED\3RDPARTY\PANORAMA\AGRMTS\DISTAGRE.DOC
EXHIBIT 8
FORM OF
INSIGHT PREMIER FUNDS
CUSTODY AGREEMENT
AGREEMENT dated as of ____________________, 1996,
among each of the mutual funds listed on Appendix A hereto
(each referred to herein as the "Fund", each of which is
acting on its own behalf and not on behalf of any other
Fund), each Fund being a business trust or series thereof
organized under the laws of the Commonwealth of
Massachusetts, having its principal office and place of
business at 20 William Street, P.O. Box 9135, Wellesley
Hills, Massachusetts 02181, and BOSTON SAFE DEPOSIT AND
TRUST COMPANY (the "Custodian"), a Massachusetts trust
company with its principal place of business at One Boston
Place, Boston, Massachusetts 02108.
W I T N E S S E T H:
That for and in consideration of the mutual promises
hereinafter set forth, the Fund and the Custodian agree as
follows:
1. Definitions.
Whenever used in this Agreement or in any Schedules to
this Agreement, the following words and phrases, unless the
context otherwise requires, shall have the following
meanings:
(a) "Affiliated Person" shall have the meaning of the term
within Section 2(a)3 of the 1940 Act.
(b) "Authorized Person" shall be deemed to include the
Chairman of the Board of Trustees, the President, and any
Vice President, the Secretary, the Treasurer or any other
person, whether or not any such person is an officer or
employee of the Fund, duly authorized by the Board of
Trustees of the Fund to give Oral Instructions and Written
Instructions on behalf of the Fund and listed in the
certification annexed hereto as Appendix B or such other
certification as may be received by the Custodian from time
to time.
(c) "Book-Entry System" shall mean the Federal
Reserve/Treasury book-entry system for United States and
federal agency Securities, its successor or successors and
its nominee or nominees.
(d) "Business Day" shall mean any day on which the Fund,
the Custodian, the Book-Entry System and appropriate
clearing corporation(s) are open for business.
(e) "Certificate" shall mean any notice, instruction or
other instrument in writing, authorized or required by this
Agreement to be given to the Custodian, which is actually
received by the Custodian and signed on behalf of the Fund
by any two Authorized Persons or any two officers thereof.
(f) "Master Trust Agreement" shall mean the Master Trust
Agreement of the Fund dated _____________ , 19___ as the
same may be amended from time to time.
(g) "Depository" shall mean The Depository Trust Company
("DTC"), a clearing agency registered with the Securities
and Exchange Commission under Section 17(a) of the
Securities Exchange Act of 1934, as amended, its successor
or successors and its nominee or nominees, in which the
Custodian is hereby specifically authorized to make
deposits. The term "Depository" shall further mean and
include any other person to be named in a Certificate
authorized to act as a depository under the 1940 Act, its
successor or successors and its nominee or nominees.
(h) "Money Market Security" shall be deemed to include,
without limitation, debt obligations issued or guaranteed as
to interest and principal by the government of the United
States or agencies or instrumentalities thereof ("U.S.
government securities"), commercial paper, bank certificates
of deposit, bankers' acceptances and short-term corporate
obligations, where the purchase or sale of such securities
normally requires settlement in federal funds on the same
day as such purchase or sale, and repurchase and reverse
repurchase agreements with respect to any of the foregoing
types of securities.
(i) "Oral Instructions" shall mean verbal instructions
actually received by the Custodian from a person reasonably
believed by the Custodian to be an Authorized Person.
(j) "Prospectus" shall mean the Fund's current prospectus
and statement of additional information relating to the
registration of the Fund's Shares under the Securities Act
of 1933, as amended.
(k) "Shares" refers to shares of [beneficial
interest]common stock, $ [no] par value per share [and
the shares of cumulative preferred stock, $____ par value
per share], of the Fund.
(l) "Security" or "Securities" shall be deemed to include
bonds, debentures, notes, stocks, shares, evidences of
indebtedness, and other securities, commodities interests
and investments from time to time owned by the Fund.
(m) "Transfer Agent" shall mean the person which performs
the transfer agent, dividend disbursing agent and
shareholder servicing agent functions for the Fund.
(n) "Written Instructions" shall mean a written
communication actually received by the Custodian from a
person reasonably believed by the Custodian to be an
Authorized Person by any system, including, without
limitation, electronic transmissions, facsimile and telex.
(o) The "1940 Act" refers to the Investment Company Act of
1940, and the Rules and Regulations thereunder, all as
amended from time to time.
2. Appointment of Custodian.
(a) The Fund hereby constitutes and appoints the Custodian
as custodian of all the Securities and monies at the time
owned by or in the possession of the Fund during the period
of this Agreement.
(b) The Custodian hereby accepts appointment as such
custodian and agrees to perform the duties thereof as
hereinafter set forth.
3. Compensation.
(a) The Custodian shall be entitled to receive, and the
Fund agrees to pay to the Custodian, such compensation as
may be agreed upon from time to time between the Custodian
and the Fund. The Custodian may charge against any monies
held on behalf of the Fund pursuant to this Agreement such
compensation and any expenses incurred by the Custodian in
the performance of its duties pursuant to this Agreement.
The Custodian shall also be entitled to charge against any
money held on behalf of the Fund pursuant to this Agreement
the amount of any loss, damage, liability or expense
incurred with respect to the Fund, including counsel fees,
for which it shall be entitled to reimbursement under the
provisions of this Agreement. The expenses which the
Custodian may charge against such account include, but are
not limited to, the expenses of sub-custodians and foreign
branches of the Custodian incurred in settling transactions
outside of Boston, Massachusetts or New York City, New York
involving the purchase and sale of Securities.
(b) The Fund will compensate the Custodian for its
services rendered under this Agreement in accordance with
the fees set forth in the Fee Schedule annexed hereto as
Schedule A and incorporated herein. Such Fee Schedule does
not include out-of-pocket disbursements of the Custodian for
which the Custodian shall be entitled to bill separately.
Out-of-pocket disbursements shall include, but shall not be
limited to, the items specified in the Schedule of Out-of-
Pocket charges annexed hereto as Schedule B and incorporated
herein, which schedule may be modified by the Custodian upon
not less than thirty days prior written notice to the Fund.
(c) Any compensation agreed to hereunder may be adjusted
from time to time by attaching to Schedule A of this
Agreement a revised Fee Schedule, dated and signed by an
Authorized Person or authorized representative of each party
hereto.
(d) The Custodian will bill the Fund as soon as
practicable after the end of each calendar month, and said
billings will be detailed in accordance with Schedule A, as
amended from time to time. The Fund will promptly pay to
the Custodian the amount of such billing.
4. Custody of Cash and Securities.
(a) Receipt and Holding of Assets.
The Fund will deliver or cause to be delivered to the
Custodian all Securities and monies owned by it at any time
during the period of this Agreement. The Custodian will not
be responsible for such Securities and monies until actually
received by it. The Fund shall instruct the Custodian from
time to time in its sole discretion, by means of Written
Instructions, or, in connection with the purchase or sale of
Money Market Securities, by means of Oral Instructions
confirmed in writing in accordance with Section 11(h) hereof
or Written Instructions, as to the manner in which and in
what amounts Securities and monies are to be deposited on
behalf of the Fund in the Book-Entry System or the
Depository; provided, however, that prior to the deposit of
Securities of the Fund in the Book-Entry System or the
Depository, including a deposit in connection with the
settlement of a purchase or sale, the Custodian shall have
received a Certificate specifically approving such deposits
by the Custodian in the Book-Entry System or the Depository.
Securities and monies of the Fund deposited in the Book-
Entry System or the Depository will be represented in
accounts which include only assets held by the Custodian for
customers, including but not limited to accounts for which
the Custodian acts in a fiduciary or representative
capacity.
(b) Accounts and Disbursements. The Custodian shall
establish and maintain a separate account for the Fund and
shall credit to the separate account all monies received by
it for the account of such Fund and shall disburse the same
only:
1. In payment for Securities purchased for the Fund, as
provided in Section 5 hereof;
2. In payment of dividends or distributions with respect
to the Shares, as provided in Section 7 hereof;
3. In payment of original issue or other taxes with
respect to the Shares, as provided in Section 8 hereof;
4. In payment for Shares which have been redeemed by the
Fund, as provided in Section 8 hereof;
5. Pursuant to Written Instructions setting forth the
name and address of the person to whom the payment is to be
made, the amount to be paid and the purpose for which
payment is to be made, provided that in the event of
disbursements pursuant to this sub-section 4(b)(5), the Fund
shall indemnify and hold the Custodian harmless from any
claims or losses arising out of such disbursements in
reliance on such Written Instructions which it, in good
faith, believes to be received from duly Authorized Persons;
or
6. In payment of fees and in reimbursement of the
expenses and liabilities of the Custodian attributable to
the Fund, as provided in Sections 3 and 11(i).
(c) Confirmation and Statements. Promptly after the close
of business on each day, the Custodian shall furnish the
Fund with confirmations and a summary of all transfers to or
from the account of the Fund during said day. Where
securities purchased by the Fund are in a fungible bulk of
securities registered in the name of the Custodian (or its
nominee) or shown on the Custodian's account on the books of
the Depository or the Book-Entry System, the Custodian shall
by book entry or otherwise identify the quantity of those
securities belonging to the Fund. At least monthly, the
Custodian shall furnish the Fund with a detailed statement
of the Securities and monies held for the Fund under this
Agreement.
(d) Registration of Securities and Physical Separation.
All Securities held for the Fund which are issued or
issuable only in bearer form, except such Securities as are
held in the Book-Entry System, shall be held by the
Custodian in that form; all other Securities held for the
Fund may be registered in the name of the Fund, in the name
of the Custodian, in the name of any duly appointed
registered nominee of the Custodian as the Custodian may
from time to time determine, or in the name of the Book-
Entry System or the Depository or their successor or
successors, or their nominee or nominees. The Fund reserves
the right to instruct the Custodian as to the method of
registration and safekeeping of the Securities. The Fund
agrees to furnish to the Custodian appropriate instruments
to enable the Custodian to hold or deliver in proper form
for transfer, or to register in the name of its registered
nominee or in the name of the Book-Entry System or the
Depository, any Securities which it may hold for the account
of the Fund and which may from time to time be registered in
the name of the Fund. The Custodian shall hold all such
Securities specifically allocated to the Fund which are not
held in the Book-Entry System or the Depository in a
separate account for the Fund in the name of the Fund
physically segregated at all times from those of any other
person or persons.
(e) Segregated Accounts. Upon receipt of a Written
Instruction the Custodian will establish segregated accounts
on behalf of the Fund to hold liquid or other assets as it
shall be directed by a Written Instruction and shall
increase or decrease the assets in such segregated accounts
only as it shall be directed by subsequent Written
Instruction.
(f) Collection of Income and Other Matters Affecting
Securities. Unless otherwise instructed to the contrary by
a Written Instruction, the Custodian by itself, or through
the use of the Book-Entry System or the Depository with
respect to Securities therein deposited, shall with respect
to all Securities held for the Fund in accordance with this
Agreement:
1. Collect all income due or payable;
2. Present for payment and collect the amount payable
upon all Securities which may mature or be called, redeemed,
retired or otherwise become payable. Notwithstanding the
foregoing, the Custodian shall have no responsibility to the
Fund for monitoring or ascertaining any call, redemption or
retirement dates with respect to put bonds which are owned
by the Fund and held by the Custodian or its nominees. Nor
shall the Custodian have any responsibility or liability to
the Fund for any loss by the Fund for any missed payments or
other defaults resulting therefrom; unless the Custodian
received timely notification from the Fund specifying the
time, place and manner for the presentment of any such put
bond owned by the Fund and held by the Custodian or its
nominee. The Custodian shall not be responsible and assumes
no liability to the Fund for the accuracy or completeness of
any notification the Custodian may furnish to the Fund with
respect to put bonds;
3. Surrender Securities in temporary form for definitive
Securities;
4. Execute any necessary declarations or certificates of
ownership under the Federal income tax laws or the laws or
regulations of any other taxing authority now or hereafter
in effect; and
5. Hold directly, or through the Book-Entry System or the
Depository with respect to Securities therein deposited, for
the account of the Fund all rights and similar Securities
issued with respect to any Securities held by the Custodian
hereunder for the Fund.
(g) Delivery of Securities and Evidence of Authority.
Upon receipt of a Written Instruction and not otherwise,
except for subparagraphs 5, 6, 7, and 8 of this section 4(g)
which may be effected by Oral or Written Instructions, the
Custodian, directly or through the use of the Book-Entry
System or the Depository, shall:
1. Execute and deliver or cause to be executed and
delivered to such persons as may be designated in such
Written Instructions, proxies, consents, authorizations, and
any other instruments whereby the authority of the Fund as
owner of any Securities may be exercised;
2. Deliver or cause to be delivered any Securities held
for the Fund in exchange for other Securities or cash issued
or paid in connection with the liquidation, reorganization,
refinancing, merger, consolidation or recapitalization of
any corporation, or the exercise of any conversion
privilege;
3. Deliver or cause to be delivered any Securities held
for the Fund to any protective committee, reorganization
committee or other person in connection with the
reorganization, refinancing, merger, consolidation or
recapitalization or sale of assets of any corporation, and
receive and hold under the terms of this Agreement in the
separate account for the Fund such certificates of deposit,
interim receipts or other instruments or documents as may be
issued to it to evidence such delivery;
4. Make or cause to be made such transfers or exchanges
of the assets specifically allocated to the separate account
of the Fund and take such other steps as shall be stated in
Written Instructions to be for the purpose of effectuating
any duly authorized plan of liquidation, reorganization,
merger, consolidation or recapitalization of the Fund;
5. Deliver Securities upon sale of such Securities for
the account of the Fund pursuant to Section 5;
6. Deliver Securities upon the receipt of payment in
connection with any repurchase agreement related to such
Securities entered into by the Fund;
7. Deliver Securities owned by the Fund to the issuer
thereof or its agent when such Securities are called,
redeemed, retired or otherwise become payable; provided,
however, that in any such case the cash or other
consideration is to be delivered to the Custodian.
Notwithstanding the foregoing, the Custodian shall have no
responsibility to the Fund for monitoring or ascertaining
any call, redemption or retirement dates with respect to the
put bonds which are owned by the Fund and held by the
Custodian or its nominee. Nor shall the Custodian have any
responsibility or liability to the Fund for any loss by the
Fund for any missed payment or other default resulting
therefrom; unless the Custodian received timely notification
from the Fund specifying the time, place and manner for the
presentment of any such put bond owned by the Fund and held
by the Custodian or its nominee. The Custodian shall not be
responsible and assumes no liability to the Fund for the
accuracy or completeness of any notification the Custodian
may furnish to the Fund with respect to put bonds;
8. Deliver Securities for delivery in connection with any
loans of Securities made by the Fund but only against
receipt of adequate collateral as agreed upon from time to
time by the Custodian and the Fund which may be in the form
of cash or U.S. government securities or a letter of credit;
9. Deliver Securities for delivery as security in
connection with any borrowings by the Fund requiring a
pledge of Fund assets, but only against receipt of amounts
borrowed;
10. Deliver Securities upon receipt of Written
Instructions from the Fund for delivery to the Transfer
Agent or to the holders of Shares in connection with
distributions in kind, as may be described from time to time
in the Fund's Prospectus, in satisfaction of requests by
holders of Shares for repurchase or redemption;
11. Deliver Securities as collateral in connection with
short sales by the Fund of common stock for which the Fund
owns the stock or owns preferred stocks or debt securities
convertible or exchangeable, without payment or further
consideration, into shares of the common stock sold short;
12. Deliver Securities for any purpose expressly permitted
by and in accordance with procedures described in the Fund's
Prospectus; and
13. Deliver Securities for any other proper business
purpose, but only upon receipt of, in addition to Written
Instructions, a certified copy of a resolution of the Board
of Directors signed by an Authorized Person and certified by
the Secretary of the Fund, specifying the Securities to be
delivered, setting forth the purpose for which such delivery
is to be made, declaring such purpose to be a proper
business purpose, and naming the person or persons to whom
delivery of such Securities shall be made.
(h) Endorsement and Collection of Checks, Etc. The
Custodian is hereby authorized to endorse and collect all
checks, drafts or other orders for the payment of money
received by the Custodian for the account of the Fund.
5. Purchase and Sale of Investments of the Fund.
(a) Promptly after each purchase of Securities for the
Fund, the Fund shall deliver to the Custodian (i) with
respect to each purchase of Securities which are not Money
Market Securities, a Written Instruction, and (ii) with
respect to each purchase of Money Market Securities, either
a Written Instruction or Oral Instruction, in either case
specifying with respect to each purchase: (1) the name of
the issuer and the title of the Securities; (2) the number
of shares or the principal amount purchased and accrued
interest, if any; (3) the date of purchase and settlement;
(4) the purchase price per unit; (5) the total amount
payable upon such purchase; (6) the name of the person from
whom or the broker through whom the purchase was made, if
any; (7) whether or not such purchase is to be settled
through the Book-Entry System or the Depository; and (8)
whether the Securities purchased are to be deposited in the
Book-Entry System or the Depository. The Custodian shall
receive the Securities purchased by or for the Fund and upon
receipt of Securities shall pay out of the monies held for
the account of the Fund the total amount payable upon such
purchase, provided that the same conforms to the total
amount payable as set forth in such Written or Oral
Instruction.
(b) Promptly after each sale of Securities of the Fund,
the Fund shall deliver to the Custodian (i) with respect to
each sale of Securities which are not Money Market
Securities, a Written Instruction, and (ii) with respect to
each sale of Money Market Securities, either Written
Instruction or Oral Instructions, in either case specifying
with respect to such sale: (1) the name of the issuer and
the title of the Securities; (2) the number of shares or
principal amount sold, and accrued interest, if any; (3) the
date of sale; (4) the sale price per unit; (5) the total
amount payable to the Fund upon such sale; (6) the name of
the broker through whom or the person to whom the sale was
made; and (7) whether or not such sale is to be settled
through the Book-Entry System or the Depository. The
Custodian shall deliver or cause to be delivered the
Securities to the broker or other person designated by the
Fund upon receipt of the total amount payable to the Fund
upon such sale, provided that the same conforms to the total
amount payable to the Fund as set forth in such Written or
Oral Instruction. Subject to the foregoing, the Custodian
may accept payment in such form as shall be satisfactory to
it, and may deliver Securities and arrange for payment in
accordance with the customs prevailing among dealers in
Securities.
6. Lending of Securities.
If the Fund is permitted by the terms of the Master
Trust Agreement and as disclosed in its Prospectus to lend
securities, within 24 hours before each loan of Securities,
the Fund shall deliver to the Custodian a Written
Instruction specifying with respect to each such loan: (a)
the name of the issuer and the title of the Securities; (b)
the number of shares or the principal amount loaned; (c) the
date of loan and delivery; (d) the total amount to be
delivered to the Custodian, and specifically allocated
against the loan of the Securities, including the amount of
cash collateral and the premium, if any, separately
identified; (e) the name of the broker, dealer or financial
institution to which the loan was made; and (f) whether the
Securities loaned are to be delivered through the Book-Entry
System or the Depository.
Promptly after each termination of a loan of
Securities, the Fund shall deliver to the Custodian a
Written Instruction specifying with respect to each such
loan termination and return of Securities: (a) the name of
the issuer and the title of the Securities to be returned;
(b) the number of shares or the principal amount to be
returned; (c) the date of termination; (d) the total amount
to be delivered by the Custodian (including the cash
collateral for such Securities minus any offsetting credits
as described in said Written Instruction); (e) the name of
the broker, dealer or financial institution from which the
Securities will be returned; and (f) whether such return is
to be effected through the Book-Entry System or the
Depository. The Custodian shall receive all Securities
returned from the broker, dealer or financial institution to
which such Securities were loaned and upon receipt thereof
shall pay the total amount payable upon such return of
Securities as set forth in the Written Instruction.
Securities returned to the Custodian shall be held as they
were prior to such loan.
7. Payment of Dividends or Distributions.
(a) The Fund shall furnish to the Custodian the vote of
the Board of Trustees of the Fund certified by the Secretary
(i) authorizing the declaration of distributions on a
specified periodic basis and authorizing the Custodian to
rely on Oral or Written Instructions specifying the date of
the declaration of such distribution, the date of payment
thereof, the record date as of which shareholders entitled
to payment shall be determined, the amount payable per share
to the shareholders of record as of the record date and the
total amount payable to the Transfer Agent on the payment
date, or (ii) setting forth the date of declaration of any
distribution by the Fund, the date of payment thereof, the
record date as of which shareholders entitled to payment
shall be determined, the amount payable per share to the
shareholders of record as of the record date and the total
amount payable to the Transfer Agent on the payment date.
(b) Upon the payment date specified in such vote, Oral
Instructions or Written Instructions, as the case may be,
the Custodian shall pay out the total amount payable to the
Transfer Agent of the Fund.
8. Sale and Redemption of Shares of the Fund.
(a) Whenever the Fund shall sell any Shares, the Fund
shall deliver or cause to be delivered to the Custodian a
Written Instruction duly specifying:
1. The number of Shares sold, trade date, and price; and
2. The amount of money to be received by the Custodian
for the sale of such Shares.
The Custodian understands and agrees that Written
Instructions may be furnished subsequent to the purchase of
Shares and that the information contained therein will be
derived from the sales of Shares as reported to the Fund by
the Transfer Agent.
(b) Upon receipt of money from the Transfer Agent, the
Custodian shall credit such money to the separate account of
the Fund.
(c) Upon issuance of any Shares in accordance with the
foregoing provisions of this Section 8, the Custodian shall
pay all original issue or other taxes required to be paid in
connection with such issuance upon the receipt of a Written
Instruction specifying the amount to be paid.
(d) Except as provided hereafter, whenever any Shares are
redeemed, the Fund shall cause the Transfer Agent to
promptly furnish to the Custodian Written Instructions,
specifying:
1. The number of Shares redeemed; and
2. The amount to be paid for the Shares
redeemed.
The Custodian further understands that the information
contained in such Written Instructions will be derived from
the redemption of Shares as reported to the Fund by the
Transfer Agent.
(e) Upon receipt from the Transfer Agent of advice setting
forth the number of Shares received by the Transfer Agent
for redemption and that such Shares are valid and in good
form for redemption, the Custodian shall make payment to the
Transfer Agent of the total amount specified in a Written
Instruction issued pursuant to paragraph (d) of this Section
8.
(f) Notwithstanding the above provisions regarding the
redemption of Shares, whenever such Shares are redeemed
pursuant to any check redemption privilege which may from
time to time be offered by the Fund, the Custodian, unless
otherwise instructed by a Written Instruction shall, upon
receipt of advice from the Fund or its agent stating that
the redemption is in good form for redemption in accordance
with the check redemption procedure, honor the check
presented as part of such check redemption privilege out of
the monies specifically allocated to the Fund in such advice
for such purpose.
9. Indebtedness.
(a) The Fund will cause to be delivered to the Custodian
by any bank (excluding the Custodian) from which the Fund
borrows money for temporary administrative or emergency
purposes using Securities as collateral for such borrowings,
a notice or undertaking in the form currently employed by
any such bank setting forth the amount which such bank will
loan to the Fund against delivery of a stated amount of
collateral. The Fund shall promptly deliver to the
Custodian Written Instructions stating with respect to each
such borrowing: (1) the name of the bank; (2) the amount
and terms of the borrowing, which may be set forth by
incorporating by reference an attached promissory note, duly
endorsed by the Fund, or other loan agreement; (3) the time
and date, if known, on which the loan is to be entered into
(the "borrowing date"); (4) the date on which the loan
becomes due and payable; (5) the total amount payable to the
Fund on the borrowing date; (6) the market value of
Securities to be delivered as collateral for such loan,
including the name of the issuer, the title and the number
of shares or the principal amount of any particular
Securities; (7) whether the Custodian is to deliver such
collateral through the Book-Entry System or the Depository;
and (8) a statement that such loan is in conformance with
the 1940 Act and the Fund's Prospectus.
(b) Upon receipt of the Written Instruction referred to in
subparagraph (a) above, the Custodian shall deliver on the
borrowing date the specified collateral and the executed
promissory note, if any, against delivery by the lending
bank of the total amount of the loan payable, provided that
the same conforms to the total amount payable as set forth
in the Written Instruction. The Custodian may, at the
option of the lending bank, keep such collateral in its
possession, but such collateral shall be subject to all
rights therein given the lending bank by virtue of any
promissory note or loan agreement. The Custodian shall
deliver as additional collateral in the manner directed by
the Fund from time to time such Securities as may be
specified in Written Instruction to collateralize further
any transaction described in this Section 9. The Fund shall
cause all Securities released from collateral status to be
returned directly to the Custodian, and the Custodian shall
receive from time to time such return of collateral as may
be tendered to it. In the event that the Fund fails to
specify in Written Instruction all of the information
required by this Section 9, the Custodian shall not be under
any obligation to deliver any Securities. Collateral
returned to the Custodian shall be held hereunder as it was
prior to being used as collateral.
10. Persons Having Access to Assets of the Fund.
(a) No trustee or agent of the Fund, and no officer,
director, employee or agent of the Fund's investment
adviser, of any sub-investment adviser of the Fund, or of
the Fund's administrator, shall have physical access to the
assets of the Fund held by the Custodian or be authorized or
permitted to withdraw any investments of the Fund, nor shall
the Custodian deliver any assets of the Fund to any such
person. No officer, director, employee or agent of the
Custodian who holds any similar position with the Fund's
investment adviser, with any sub-investment adviser of the
Fund or with the Fund's administrator shall have access to
the assets of the Fund.
(b) Nothing in this Section 10 shall prohibit any duly
authorized officer, employee or agent of the Fund, or any
duly authorized officer, director, employee or agent of the
investment adviser, of any sub-investment adviser of the
Fund or of the Fund's administrator, from giving Oral
Instructions or Written Instructions to the Custodian or
executing a Certificate so long as it does not result in
delivery of or access to assets of the Fund prohibited by
paragraph (a) of this Section 10.
11. Concerning the Custodian.
(a) Standard of Conduct. Notwithstanding any other
provision of this Agreement, neither the Custodian nor its
nominee shall be liable for any loss or damage, including
counsel fees, resulting from its action or omission to act
or otherwise, except for any such loss or damage arising out
of the gross negligence or willful misconduct of the
Custodian or any of its employees, sub-custodians or agents.
The Custodian may, with respect to questions of law, apply
for and obtain the advice and opinion of counsel to the Fund
or of its own counsel, at the expense of the Fund, and shall
be fully protected with respect to anything done or omitted
by it in good faith in conformity with such advice or
opinion. The Custodian shall not be liable to the Fund for
any loss or damage resulting from the use of the Book-Entry
System or the Depository.
(b) Limit of Duties. Without limiting the generality of
the foregoing, the Custodian shall be under no duty or
obligation to inquire into, and shall not be liable for:
1. The validity of the issue of any Securities purchased
by the Fund, the legality of the purchase thereof, or the
propriety of the amount paid therefor;
2. The legality of the sale of any Securities by the Fund
or the propriety of the amount for which the same are sold;
3. The legality of the issue or sale of any Shares, or
the sufficiency of the amount to be received therefor;
4. The legality of the redemption of any Shares, or the
propriety of the amount to be paid therefor;
5. The legality of the declaration or payment of any
distribution of the Fund;
6. The legality of any borrowing for temporary or
emergency administrative purposes.
(c) No Liability Until Receipt. The Custodian shall not
be liable for, or considered to be the Custodian of, any
money, whether or not represented by any check, draft, or
other instrument for the payment of money, received by it on
behalf of the Fund until the Custodian actually receives and
collects such money directly or by the final crediting of
the account representing the Fund's interest in the Book-
Entry System or the Depository.
(d) Amounts Due from Transfer Agent. The Custodian shall
not be under any duty or obligation to take action to effect
collection of any amount due to the Fund from the Transfer
Agent nor to take any action to effect payment or
distribution by the Transfer Agent of any amount paid by the
Custodian to the Transfer Agent in accordance with this
Agreement.
(e) Collection Where Payment Refused. The Custodian shall
not be under any duty or obligation to take action to effect
collection of any amount, if the Securities upon which such
amount is payable are in default, or if payment is refused
after due demand or presentation, unless and until (i) it
shall be directed to take such action by a Certificate and
(ii) it shall be assured to its satisfaction of
reimbursement of its costs and expenses in connection with
any such action.
(f) Appointment of Agents and Sub-Custodians. The
Custodian may appoint one or more banking institutions,
including but not limited to banking institutions located in
foreign countries, to act as Depository or Depositories or
as sub-custodian or as sub-custodians of Securities and
monies at any time owned by the Fund. The Custodian shall
use reasonable care in selecting a Depository and/or sub-
custodian located in a country other than the United States
("Foreign Sub-Custodian"), and shall oversee the maintenance
of any Securities or monies of the Fund by any Foreign Sub-
Custodian. In addition, the Custodian shall hold the Fund
harmless from, and indemnify the Fund against, any loss that
occurs as a result of the failure of any Foreign Sub-
Custodian to exercise reasonable care with respect to the
safekeeping of Securities and monies of the Fund.
Notwithstanding the generality of the foregoing, however,
the Custodian shall not be liable for any losses resulting
from or caused by events or circumstances beyond its
reasonable control, including, but not limited to, losses
resulting from nationalization, expropriation, devaluation,
revaluation, confiscation, seizure, cancellation,
destruction or similar action by any governmental authority,
de facto or de jure; or enactment, promulgation, imposition
or enforcement by any such governmental authority of
currency restrictions, exchange controls, taxes, levies or
other charges affecting the Fund's property; or acts of war,
terrorism, insurrection or revolution; or any other similar
act or event beyond the Custodian's or its agent's control.
This Section shall survive the termination of this
Agreement.
(g) No Duty to Ascertain Authority. The Custodian shall
not be under any duty or obligation to ascertain whether any
Securities at any time delivered to or held by it for the
Fund are such as may properly be held by the Fund under the
provisions of the Master Trust Agreement and the Prospectus.
(h) Reliance on Certificates and Instructions. The
Custodian shall be entitled to rely upon any Certificate,
notice or other instrument in writing received by the
Custodian and reasonably believed by the Custodian to be
genuine and to be signed by an officer or Authorized Person
of the Fund. The Custodian shall be entitled to rely upon
any Written Instructions or Oral Instructions actually
received by the Custodian pursuant to the applicable
Sections of this Agreement and reasonably believed by the
Custodian to be genuine and to be given by an Authorized
Person. The Fund agrees to forward to the Custodian Written
Instructions from an Authorized Person confirming such Oral
Instructions in such manner so that such Written
Instructions are received by the Custodian, whether by hand
delivery, telex or otherwise, by the close of business on
the same day that such Oral Instructions are given to the
Custodian. The Fund agrees that the fact that such
confirming instructions are not received by the Custodian
shall in no way affect the validity of the transactions or
enforceability of the transactions hereby authorized by the
Fund. The Fund agrees that the Custodian shall incur no
liability to the Fund in acting upon Oral Instructions given
to the Custodian hereunder concerning such transactions
provided such instructions reasonably appear to have been
received from a duly Authorized Person.
(i) Overdraft Facility and Security for Payment. In the
event that the Custodian is directed by Written Instruction
(or Oral Instructions confirmed in writing in accordance
with Section 11(h) hereof) to make any payment or transfer
of monies on behalf of the Fund for which there would be, at
the close of business on the date of such payment or
transfer, insufficient monies held by the Custodian on
behalf of the Fund, the Custodian may, in its sole
discretion, provide an overdraft (an "Overdraft") to the
Fund in an amount sufficient to allow the completion of such
payment or transfer. Any Overdraft provided hereunder: (a)
shall be payable on the next Business Day, unless otherwise
agreed by the Fund and the Custodian; and (b) shall accrue
interest from the date of the Overdraft to the date of
payment in full by the Fund at a rate agreed upon in
writing, from time to time, by the Custodian and the Fund.
The Custodian and the Fund acknowledge that the purpose of
such Overdraft is to temporarily finance the purchase of
Securities for prompt delivery in accordance with the terms
hereof, to meet unanticipated or unusual redemption, to
allow the settlement of foreign exchange contracts or to
meet other emergency expenses not reasonably foreseeable by
the Fund. The Custodian shall promptly notify the Fund in
writing (an "Overdraft Notice") of any Overdraft by
facsimile transmission or in such other manner as the Fund
and the Custodian may agree in writing. To secure payment
of any Overdraft, the Fund hereby grants to the Custodian a
continuing security interest in and right of setoff against
the Securities and cash in the Fund's account from time to
time in the full amount of such Overdraft. Should the Fund
fail to pay promptly any amounts owed hereunder, the
Custodian shall be entitled to use available cash in the
Fund's account and to liquidate Securities in the account as
is necessary to meet the Fund's obligations under the
Overdraft. In any such case, and without limiting the
foregoing, the Custodian shall be entitled to take such
other actions(s) or exercise such other options, powers and
rights as the Custodian now or hereafter has as a secured
creditor under the Massachusetts Uniform Commercial Code or
any other applicable law.
(j) Inspection of Books and Records. The books and
records of the Custodian shall be open to inspection and
audit at reasonable times by officers and auditors employed
by the Fund and by the appropriate employees of the
Securities and Exchange Commission.
The Custodian shall provide the Fund with any report
obtained by the Custodian on the system of internal
accounting control of the Book-Entry System or the
Depository and with such reports on its own systems of
internal accounting control as the Fund may reasonably
request from time to time.
12. Term and Termination.
(a) This Agreement shall become effective on the date
first set forth above (the "Effective Date") and shall
continue in effect thereafter until such time as this
Agreement may be terminated in accordance with the
provisions hereof.
(b) Either of the parties hereto may terminate this
Agreement by giving to the other party a notice in writing
specifying the date of such termination, which shall be not
less than 60 days after the date of receipt of such notice.
In the event such notice is given by the Fund, it shall be
accompanied by a certified vote of the Board of Trustees of
the Fund, electing to terminate this Agreement and
designating a successor custodian or custodians, which shall
be a person qualified to so act under the 1940 Act.
In the event such notice is given by the Custodian,
the Fund shall, on or before the termination date, deliver
to the Custodian a certified vote of the Board of Trustees
of the Fund, designating a successor custodian or
custodians. In the absence of such designation by the Fund,
the Custodian may designate a successor custodian, which
shall be a person qualified to so act under the 1940 Act.
If the Fund fails to designate a successor custodian, the
Fund shall upon the date specified in the notice of
termination of this Agreement and upon the delivery by the
Custodian of all Securities (other than Securities held in
the Book-Entry System which cannot be delivered to the Fund)
and monies then owned by the Fund, be deemed to be its own
custodian and the Custodian shall thereby be relieved of all
duties and responsibilities pursuant to this Agreement,
other than the duty with respect to Securities held in the
Book-Entry System which cannot be delivered to the Fund.
(c) Upon the date set forth in such notice under paragraph
(b) of this Section 12, this Agreement shall terminate to
the extent specified in such notice, and the Custodian shall
upon receipt of a notice of acceptance by the successor
custodian on that date deliver directly to the successor
custodian all Securities and monies then held by the
Custodian on behalf of the Fund, after deducting all fees,
expenses and other amounts for the payment or reimbursement
of which it shall then be entitled.
13. Limitation of Liability.
The Fund and the Custodian agree that the obligations
of the Fund under this Agreement shall not be binding upon
any of the Trustees, shareholders, nominees, officers,
employees or agents, whether past, present or future, of the
Fund, individually, but are binding only upon the assets and
property of the Fund, as provided in the Master Trust
Agreement. The execution and delivery of this Agreement
have been authorized by the Trustees of the Fund, and signed
by an authorized officer of the Fund, acting as such, and
neither such authorization by such Trustees nor such
execution and delivery by such officer shall be deemed to
have been made by any of them or any shareholder of the Fund
individually or to impose any liability on any of them or
any shareholder of the Fund personally, but shall bind only
the assets and property of the Fund as provided in the
Master Trust Agreement.
14. Miscellaneous.
(a) Annexed hereto as Appendix B is a certification signed
by the Secretary of the Fund setting forth the names and the
signatures of the present Authorized Persons. The Fund
agrees to furnish to the Custodian a new certification in
similar form in the event that any such present Authorized
Person ceases to be such an Authorized Person or in the
event that other or additional Authorized Persons are
elected or appointed. Until such new certification shall be
received, the Custodian shall be fully protected in acting
under the provisions of this Agreement upon Oral
Instructions or signatures of the present Authorized Persons
as set forth in the last delivered certification.
(b) Annexed hereto as Appendix C is a certification signed
by the Secretary of the Fund setting forth the names and the
signatures of the present officers of the Fund. The Fund
agrees to furnish to the Custodian a new certification in
similar form in the event any such present officer ceases to
be an officer of the Fund or in the event that other or
additional officers are elected or appointed. Until such
new certification shall be received, the Custodian shall be
fully protected in acting under the provisions of this
Agreement upon the signature of an officer as set forth in
the last delivered certification.
(c) Any notice or other instrument in writing, authorized
or required by this Agreement to be given to the Custodian,
shall be sufficiently given if addressed to the Custodian
and mailed or delivered to it at its offices at One Boston
Place, Boston, Massachusetts 02108 or at such other place
as the Custodian may from time to time designate in writing.
(d) Any notice or other instrument in writing, authorized
or required by this Agreement to be given to the Fund, shall
be sufficiently given if addressed to the Fund and mailed or
delivered to it at its offices at
_______________________________________________________ or
at such other place as the Fund may from time to time
designate in writing.
(e) This Agreement may not be amended or modified in any
manner except by a written agreement executed by both
parties with the same formality as this Agreement (i)
authorized, or ratified and approved by a vote of the Board
of Trustees of the Fund, including a majority of the members
of the Board of Trustees of the Fund who are not "interested
persons" of the Fund (as defined in the 1940 Act), or (ii)
authorized, or ratified and approved by such other
procedures as may be permitted or required by the 1940 Act.
(f) This Agreement shall extend to and shall be binding
upon the parties hereto, and their respective successors and
assigns; provided, however, that this Agreement shall not be
assignable by the Fund without the written consent of the
Custodian, or by the Custodian without the written consent
of the Fund authorized or approved by a vote of the Board of
Trustees of the Fund provided, however, that the Custodian
may assign the Agreement to an Affiliated Person and any
attempted assignment without such written consent shall be
null and void. Nothing in this Agreement shall give or be
construed to give or confer upon any third party any rights
hereunder.
(g) The Fund represents that a copy of the Master Trust
Agreement is on file with the Secretary of the Commonwealth
of Massachusetts and with the Boston City Clerk.
(h) This Agreement shall be construed in accordance with
the laws of The Commonwealth of Massachusetts.
(i) The captions of the 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.
(j) This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an
original, but such counterparts shall, together, constitute
only one instrument.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed by their respective
representatives duly authorized as of the day and year first
above written.
FUNDS LISTED ON APPENDIX A
By:
Name:
Title:
BOSTON SAFE DEPOSIT AND TRUST COMPANY
By:
Name:
Title:
APPENDIX A
Insight Growth Fund
Insight Moderate Growth Fund
Insight Conservative Allocation Fund
APPENDIX B
I, _____________________________________, the
Secretary of the Funds listed on Appendix A, each a business
trust organized under the laws of the Commonwealth of
Massachusetts (the "Fund"), do hereby certify that:
The following individuals have been duly authorized as
Authorized Persons to give Oral Instructions and Written
Instructions on behalf of the Fund and the specimen
signatures set forth opposite their respective names are
their true and correct signatures:
Name Signature
FUNDS LISTED ON
APPENDIX A
By:
Secretary
Dated:
APPENDIX C
I, __________________________________________, the
Secretary of the Funds listed on Appendix A, each a business
trust organized under the laws of the Commonwealth of
Massachusetts (the "Fund"), do hereby certify that:
The following individuals serve in the following
positions with the Fund and each individual has been duly
elected or appointed to each such position and qualified
therefor in conformity with the Fund's Master Trust
Agreement and the specimen signatures set forth opposite
their respective names are their true and correct
signatures:
Name Position
Signature
Chairman of the Board
President
Treasurer
Secretary
Vice President and
Investment Officer
Vice President and
Investment Officer
FUNDS LISTED ON
APPENDIX A
By:
Secretary
Dated:
SCHEDULE A
BOSTON SAFE DEPOSIT AND TRUST COMPANY
CUSTODY FEE SCHEDULE
A. Domestic Safekeeping:
B. PLUS $5/security holding charge
per month
C. PLUS Transaction charges:
DTC eligible
$
Non-DTC eligible $
Fed Book Entry $
Options
$
Futures
$
GNMA Paydowns $
Repo - depository $
- non-deposit
$
Physical - Govt
$
Physical - Corp/Muni
$
Commercial Paper $
Euro-CDs (London) $
This Fee Schedule shall be effective as of XXXXXXX, 19XX
through XXXXXXX, 19XX.
BOSTON SAFE DEPOSIT AND TRUST COMPANY
GLOBAL CUSTODY FEE SCHEDULE
A. Global Safekeeping:
Group I Assets BP
* Group II Assets
First $50 million BP
Next $50 million BP
Next $200 million BP
Excess BP
Group III Assets BP
Group IV Assets BP
Group V Assets BP
Group VI Assets BP
B. PLUS Transaction Charges:
Group I Transactions $
Group II Transactions $
Group III Transactions $
Group IV Transactions $
Group V Transactions $
Group VI Transactions $
* * Third Party F/X $
COUNTRY GROUPS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Group I Group II Group III Group IV Group V Group VI
Japan Euroclear Austria Australia Brazil Mexico
Cedel Canada Belgium Denmark Spain
Germany Luxembourg Finland Sweden
Netherlands France Greece
New Zealand HongKong Indonesia
Switzerland Ireland Jordan
Italy Philippines
Malaysia Turkey
Norway Venezuela
Pakistan Argentina
Peru
Poland
Portugal
Shanghai
Shenzen
Singapore
Thailand
United
Kingdom
Uruguay
</TABLE>
SCHEDULE B
The Fund will pay to the Custodian as soon as possible
after the end of each month all out-of-pocket expenses
reasonably incurred in connection with the assets of the
Fund.
* Group Ikpoint levels are based upon assets within each category.
* * Third d Party F/X is one in which Boston Safe is not the currency broker.
This charge
will be assessed only on transactions where funds are actually transferred.
Reimbursable out-of-pocket expenses will be added to each monthly invoice and
will
include,
but not be limited to, such customary items as telephone, wire charges ($5.25
per wire),
stamp
duties, securities registration, postage, courier services and duplication
charges.
EXHIBIT 9(a)
FORM OF
TRANSFER AGENCY AND SERVICES AGREEMENT
THIS AGREEMENT, dated as of this day of
, 1996 between the INSIGHT PREMIER FUNDS (the "Fund"), a
Massachusetts business trust having its principal place of
business at One Exchange Place, Boston, Massachusetts,
02109-2873 and FIRST DATA INVESTOR SERVICES GROUP, INC.
("FDISG"), a Massachusetts corporation with principal
offices at 4400 Computer Drive, Westboro, Massachusetts
01581.
WITNESSETH
WHEREAS, the Fund is authorized to issue Shares in separate
series, with each such series representing interests in a
separate portfolio of securities and other assets;
WHEREAS, the Fund initially intends to offer Shares in those
Portfolios identified in the attached Exhibit 1, each such
Portfolio, together with all other Portfolios subsequently
established by the Fund shall be subject to this Agreement
in accordance with Article 14;
WHEREAS, the Fund on behalf of the Portfolios, desires to
appoint FDISG as its transfer agent, dividend disbursing
agent and agent in connection with certain other activities
and FDISG desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants and
promises hereinafter set forth, the Fund and FDISG agree as
follows:
Article 1 Definitions.
1.1 Whenever used in this Agreement, the following words
and phrases, unless the context otherwise requires, shall
have the following meanings:
(a) "Articles of Incorporation" shall mean the Articles of
Incorporation, Declaration of Trust, or other similar
organizational document as the case may be, of the Fund as
the same may be amended from time to time.
(b) "Authorized Person" shall be deemed to include (i) any
authorized officer of the Fund; or (ii) any person, whether
or not such person is an officer or employee of the Fund,
duly authorized to give Oral Instructions or Written
Instructions on behalf of the Fund as indicated in writing
to FDISG from time to time.
(c) "Board of Directors" shall mean the Board of Directors
or Board of Trustees of the Fund, as the case may be.
(d) "Commission" shall mean the Securities and Exchange
Commission.
(e) "Custodian" refers to any custodian or subcustodian of
securities and other property which the Fund may from time
to time deposit, or cause to be deposited or held under the
name or account of such a custodian pursuant to a Custodian
Agreement.
(f) "1934 Act" shall mean the Securities Exchange Act of
1934 and the rules and regulations promulgated
thereunder, all as amended from time to time.
(g) "1940 Act" shall mean the Investment Company Act of
1940 and the rules and regulations promulgated thereunder,
all as amended from time to time.
(h) "Oral Instructions" shall mean instructions, other
than Written Instructions, actually received by FDISG from a
person reasonably believed by FDISG to be an Authorized
Person;
(i) "Portfolio" shall mean each separate series of shares
offered by the Fund representing interests in a separate
portfolio of securities and other assets;
(j) "Prospectus" shall mean the most recently dated Fund
Prospectus and Statement of Additional Information,
including any supplements thereto, if any, which has become
effective under the Securities Act of 1933 and the 1940 Act.
(k) "Shares" refers collectively to such shares of capital
stock or beneficial interest, as the case may be, or class
thereof, of each respective Portfolio of the Fund as may be
issued from time to time.
(l) "Shareholder" shall mean a record owner of Shares of
each respective Portfolio of the Fund.
(m) "Written Instructions" shall mean a written
communication signed by a person reasonably believed by
FDISG to be an Authorized Person and actually received by
FDISG. Written Instructions shall include manually executed
originals and authorized electronic transmissions, including
telefacsimile of a manually executed original or other
process.
Article 2 Appointment of FDISG.
The Fund, on behalf of the Portfolios, hereby appoints and
constitutes FDISG as transfer agent and dividend disbursing
agent for Shares of each respective Portfolio of the Fund
and as shareholder servicing agent for the Fund and FDISG
hereby accepts such appointments and agrees to perform the
duties hereinafter set forth.
Article 3 Duties of FDISG.
3.1 FDISG shall be responsible for:
(a) Administering and/or performing the customary services
of a transfer agent; acting as service agent in connection
with dividend and distribution functions; and performing
shareholder account and administrative agent functions in
connection with the issuance, transfer and redemption or
repurchase (including coordination with the Custodian) of
Shares of each Portfolio, as more fully described in the
written schedule of Duties of FDISG annexed hereto as
Schedule A and incorporated herein, and in accordance with
the terms of the Prospectus of the Fund on behalf of the
applicable Portfolio, applicable law and the procedures
established from time to time between FDISG and the Fund.
(b) Recording the issuance of Shares and maintaining
pursuant to Rule 17Ad-10(e) of the 1934 Act a record of the
total number of Shares of each Portfolio which are
authorized, based upon data provided to it by the Fund, and
issued and outstanding. FDISG shall provide the Fund on a
regular basis with the total number of Shares of each
Portfolio which are authorized and issued and outstanding
and shall have no obligation, when recording the issuance of
Shares, to monitor the issuance of such Shares or to take
cognizance of any laws relating to the issue or sale of such
Shares, which functions shall be the sole responsibility of
the Fund.
(c) Notwithstanding any of the foregoing provisions of
this Agreement, FDISG shall be under no duty or obligation
to inquire into, and shall not be liable for: (i) the
legality of the issuance or sale of any Shares or the
sufficiency of the amount to be received therefor; (ii) the
legality of the redemption of any Shares, or the propriety
of the amount to be paid therefor; (iii) the legality of the
declaration of any dividend by the Board of Directors, or
the legality of the issuance of any Shares in payment of any
dividend; or (iv) the legality of any recapitalization or
readjustment of the Shares.
3.2 In addition, the Fund shall (i) identify to FDISG in
writing those transactions and assets to be treated as
exempt from blue sky reporting for each State and (ii)
verify the establishment of transactions for each State on
the system prior to activation and thereafter monitor the
daily activity for each State. The responsibility of FDISG
for the Fund's blue sky State registration status is solely
limited to the initial establishment of transactions subject
to blue sky compliance by the Fund and the reporting of such
transactions to the Fund as provided above.
3.3 FDISG agrees to provide the services set forth herein
in accordance with the Performance Standards annexed hereto
as Exhibit 1 of Schedule A and incorporated herein (the
"Performance Standards"). Such Performance Standards may be
amended from time to time upon written agreement by the
parties.
3.4 In addition to the duties set forth herein, FDISG
shall perform such other duties and functions, and shall be
paid such amounts therefor, as may from time to time be
agreed upon in writing between the Fund and FDISG.
Article 4 Recordkeeping and Other Information.
4.1 FDISG shall create and maintain all records required
of it pursuant to its duties hereunder and as set forth in
Schedule A in accordance with all applicable laws, rules and
regulations, including records required by Section 31(a) of
the 1940 Act. Where applicable, such records shall be
maintained by FDISG for the periods and in the places
required by Rule 31a-2 under the 1940 Act.
4.2 To the extent required by Section 31 of the 1940 Act,
FDISG agrees that all such records prepared or maintained by
FDISG relating to the services to be performed by FDISG
hereunder are the property of the Fund and will be
preserved, maintained and made available in accordance with
such section, and will be surrendered promptly to the Fund
on and in accordance with the Fund's request.
4.3 In case of any requests or demands for the inspection
of Shareholder records of the Fund, FDISG will endeavor to
notify the Fund of such request and secure Written
Instructions as to the handling of such request. FDISG
reserves the right, however, to exhibit the Shareholder
records to any person whenever it is advised by its counsel
that it may be held liable for the failure to comply with
such request.
Article 5 Fund Instructions.
5.1 FDISG will have no liability when acting upon Written
or Oral Instructions believed to have been executed or
orally communicated by an Authorized Person and will not be
held to have any notice of any change of authority of any
person until receipt of a Written Instruction thereof from
the Fund. FDISG will also have no liability when processing
Share certificates which it reasonably believes to bear the
proper manual or facsimile signatures of the officers of the
Fund and the proper countersignature of FDISG.
5.2 At any time, FDISG may request Written Instructions
from the Fund and may seek advice from legal counsel for the
Fund, or its own legal counsel, with respect to any matter
arising in connection with this Agreement, and it shall not
be liable for any action taken or not taken or suffered by
it in good faith in accordance with such Written
Instructions or in accordance with the opinion of counsel
for the Fund or for FDISG. Written Instructions requested
by FDISG will be provided by the Fund within a reasonable
period of time.
5.3 FDISG, its officers, agents or employees, shall accept
Oral Instructions or Written Instructions given to them by
any person representing or acting on behalf of the Fund only
if said representative is an Authorized Person. The Fund
agrees that all Oral Instructions shall be followed within
one business day by confirming Written Instructions, and
that the Fund's failure to so confirm shall not impair in
any respect FDISG's right to rely on Oral Instructions.
Article 6 Compensation.
6.1 The Fund on behalf of each of the Portfolios will
compensate FDISG for the performance of its obligations
hereunder in accordance with the fees set forth in the
written Fee Schedule annexed hereto as Schedule B and
incorporated herein.
6.2 In addition to those fees set forth in Section 6.1
above, the Fund on behalf of each of the Portfolios agrees
to pay, and will be billed separately for, out-of-pocket
expenses incurred by FDISG in the performance of its duties
hereunder. Out-of-pocket expenses shall include, but shall
not be limited to, the items specified in the written
schedule of out-of-pocket charges annexed hereto as Schedule
C and incorporated herein. Schedule C may be modified by
written agreement between the parties. Unspecified
out-of-pocket expenses shall be limited to those
out-of-pocket expenses reasonably incurred by FDISG in the
performance of its obligations hereunder.
6.3 The Fund on behalf of each of the Portfolios agrees to
pay all fees and out-of-pocket expenses within fifteen (15)
days following the receipt of the respective invoice.
6.4 Any compensation agreed to hereunder may be adjusted
from time to time by attaching to Schedule B, a revised Fee
Schedule executed and dated by the parties hereto.
6.5 The Fund acknowledges that the fees that FDISG charges
the Fund under this Agreement reflect the allocation of risk
between the parties, including the disclaimer of warranties
in Section 9.3 and the limitations on liability and
exclusion of remedies in Section 11.2 and Article 12.
Modifying the allocation of risk from what is stated here
would affect the fees that FDISG charges, and in
consideration of those fees, the Fund agrees to the stated
allocation of risk.
Article 7 Documents.
In connection with the appointment of FDISG, the Fund shall,
on or before the date this Agreement goes into effect, but
in any case within a reasonable period of time for FDISG to
prepare to perform its duties hereunder, deliver or caused
to be delivered to FDISG the documents set forth in the
written schedule of Fund Documents annexed hereto as
Schedule D.
Article 8 Transfer Agent System.
8.1 FDISG shall retain title to and ownership of any and
all data bases, computer programs, screen formats, report
formats, interactive design techniques, derivative works,
inventions, discoveries, patentable or copyrightable
matters, concepts, expertise, patents, copyrights, trade
secrets, and other related legal rights utilized by FDISG in
connection with the services provided by FDISG to the Fund
herein (the "FDISG System").
8.2 FDISG hereby grants to the Fund a limited license to
the FDISG System for the sole and limited purpose of having
FDISG provide the services contemplated hereunder and
nothing contained in this Agreement shall be construed or
interpreted otherwise and such license shall immediately
terminate with the termination of this Agreement.
Article 9 Representations and Warranties.
9.1 FDISG represents and warrants to the Fund that:
(a) it is a corporation duly organized, existing and in
good standing under the laws of the Commonwealth of
Massachusetts;
(b) it is empowered under applicable laws and by its
Articles of Incorporation and By-Laws to enter into and
perform this Agreement;
(c) all requisite corporate proceedings have been taken to
authorize it to enter into this Agreement;
(d) it is duly registered with its appropriate regulatory
agency as a transfer agent and such registration will remain
in effect for the duration of this Agreement; and
(e) it has and will continue to have access to the
necessary facilities, equipment and personnel to perform its
duties and obligations under this Agreement.
9.2 The Fund represents and warrants to FDISG that:
(a) it is duly organized, existing and in good standing
under the laws of the jurisdiction in which it is organized;
(b) it is empowered under applicable laws and by its
Articles of Incorporation and By-Laws to enter into this
Agreement;
(c) all corporate proceedings required by said Articles of
Incorporation, By-Laws and applicable laws have been taken
to authorize it to enter into this Agreement;
(d) a registration statement under the Securities Act of
1933, as amended, and the 1940 Act on behalf of each of the
Portfolios is currently effective and will remain effective,
and all appropriate state securities law filings have been
made and will continue to be made, with respect to all
Shares of the Fund being offered for sale; and
(e) all outstanding Shares are validly issued, fully paid
and non-assessable and when Shares are hereafter issued in
accordance with the terms of the Fund's Articles of
Incorporation and its Prospectus with respect to each
Portfolio, such Shares shall be validly issued, fully paid
and non-assessable.
9.3 THIS IS A SERVICE AGREEMENT. EXCEPT AS EXPRESSLY
PROVIDED IN THIS AGREEMENT, FDISG DISCLAIMS ALL OTHER
REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, MADE TO
THE FUND OR ANY OTHER PERSON, INCLUDING, WITHOUT LIMITATION,
ANY WARRANTIES REGARDING QUALITY, SUITABILITY,
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR
OTHERWISE (IRRESPECTIVE OF ANY COURSE OF DEALING, CUSTOM OR
USAGE OF TRADE) OF ANY SERVICES OR ANY GOODS PROVIDED
INCIDENTAL TO SERVICES PROVIDED UNDER THIS AGREEMENT. FDISG
DISCLAIMS ANY WARRANTY OF TITLE OR NON-INFRINGEMENT EXCEPT
AS OTHERWISE SET FORTH IN THIS AGREEMENT.
Article 10 Indemnification.
10.1 FDISG shall not be responsible for and the Fund on
behalf of each Portfolio shall indemnify and hold FDISG
harmless from and against any and all claims, costs,
expenses (including reasonable attorneys' fees), losses,
damages, charges, payments and liabilities of any sort or
kind which may be asserted against FDISG or for which FDISG
may be held to be liable (a "Claim") arising out of or
attributable to any of the following:
(a) any actions of FDISG required to be taken pursuant to
this Agreement unless such Claim resulted from a negligent
act or omission to act or bad faith by FDISG in the
performance of its duties hereunder;
(b) FDISG's reasonable reliance on, or reasonable use of
information, data, records and documents (including but not
limited to magnetic tapes, computer printouts, hard copies
and microfilm copies) received by FDISG from the Fund, or
any authorized third party acting on behalf of the Fund,
including but not limited to the prior transfer agent for
the Fund, in the performance of FDISG's duties and
obligations hereunder;
(c) the reliance on, or the implementation of, any Written
or Oral Instructions or any other instructions or requests
of the Fund on behalf of the applicable Portfolio;
(d) the offer or sales of shares in violation of any
requirement under the securities laws or regulations of any
state that such shares be registered in such state or in
violation of any stop order or other determination or ruling
by any state with respect to the offer or sale of such
shares in such state; and
(e) the Fund's refusal or failure to comply with the terms
of this Agreement, or any Claim which arises out of the
Fund's negligence or misconduct or the breach of any
representation or warranty of the Fund made herein.
10.2 The Fund and each Portfolio shall not be responsible
for, and FDISG shall indemnify and hold the Fund and each
Portfolio harmless from and against, any and all Claims
arising out of or attributable to (a) FDISG's refusal or
failure to comply with the terms of this Agreement or (b)
FDISG's negligence, willful misconduct or breach of any
representation or warranty made of FDISG. herein or
10.3 In any case in which a party (the "Indemnified Party")
may be asked to indemnify or hold the other party (the
"Indemnifying Party") harmless, the Indemnified Party will
notify the Indemnifying Party promptly after identifying any
situation which it believes presents or appears likely to
present a claim for indemnification against the Indemnifying
Party although the failure to do so shall not prevent
recovery by the Indemnified Party and shall keep the
Indemnifying Party advised with respect to all developments
concerning such situation. The Indemnifying Party shall
have the option to defend the Indemnified Party against any
Claim which may be the subject of this indemnification, and,
in the event that the Indemnifying Party so elects, such
defense shall be conducted by counsel chosen by the
Indemnifying Party and satisfactory to the Indemnified
Party, and thereupon the Indemnifying Party shall take over
complete defense of the Claim and the Indemnified Party
shall sustain no further legal or other expenses in respect
of such Claim. The Indemnified Party will not confess any
Claim or make any compromise in any case in which the
Indemnifying Party will be asked to provide indemnification,
except with the Indemnifying Party's prior written consent.
The obligations of the parties hereto under this Article 10
shall survive the termination of this Agreement.
10.4 Any claim for indemnification under this Agreement
must be made prior to the earlier of:
(a) one year after the Indemnified Party becomes aware of
the event for which indemnification is claimed; or
(b) one year after the earlier of the termination of this
Agreement or the expiration of the term of this Agreement.
10.5 Except for remedies that cannot be waived as a matter
of law (and injunctive or provisional relief), the
provisions of this Article 10 shall be each party's sole and
exclusive remedy for claims or other actions or proceedings
to which the indemnification obligations pursuant to this
Article 10 may apply.
Article 11 Standard of Care.
11.1 FDISG shall at all times act in good faith and agrees
to use its best efforts within commercially reasonable
limits to ensure the accuracy of all services performed
under this Agreement, but assumes no responsibility for loss
or damage to the Fund unless said errors are caused by
FDISG's own negligence, bad faith or willful misconduct or
that of its employees.
11.2 Notwithstanding any provision in this Agreement to the
contrary, FDISG's cumulative liability (to the Fund) for all
losses, claims, suits, controversies, breaches, or damages
for any cause whatsoever (including but not limited to those
arising out of or related to this Agreement) and regardless
of the form of action or legal theory shall not exceed the
greater of (i) $500,000 or (ii) the fees received by FDISG
for services provided under this Agreement during the twelve
months immediately prior to the date of such loss or damage.
Fund understands the limitation on FDISG's damages to be a
reasonable allocation of risk and Fund expressly consents
with respect to such allocation of risk. In allocating risk
under the Agreement, the parties agree that the damage
limitation set forth above shall apply to any alternative
remedy ordered by a court in the event such court determines
that sole and exclusive remedy provided for in the Agreement
fails of its essential purpose.
11.3 Neither party may assert any cause of action against
the other party under this Agreement that accrued more than
two (2) years prior to the filing of the suit (or
commencement of arbitration proceedings) alleging such cause
of action.
11.4 Each party shall have the duty to mitigate damages for
which the other party may become responsible.
Article 12 Consequential Damages.
NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY,
IN NO EVENT SHALL FDISG, ITS AFFILIATES OR ANY OF ITS OR
THEIR DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR
SUBCONTRACTORS BE LIABLE UNDER ANY THEORY OF TORT, CONTRACT,
STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR LOST
PROFITS, EXEMPLARY, PUNITIVE, SPECIAL, INCIDENTAL, INDIRECT
OR CONSEQUENTIAL DAMAGES, EACH OF WHICH IS HEREBY EXCLUDED
BY AGREEMENT OF THE PARTIES REGARDLESS OF WHETHER SUCH
DAMAGES WERE FORESEEABLE OR WHETHER EITHER PARTY OR ANY
ENTITY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
Article 13 Term and Termination.
13.1 This Agreement shall be effective on the date first
written above and shall continue for a period of five (5)
years (the "Initial Term").
13.2 Upon the expiration of the Initial Term, this
Agreement shall automatically renew for successive terms of
three (3) years ("Renewal Terms") each, unless the Fund or
FDISG provides written notice to the other of its intent not
to renew. Such notice must be received not less than ninety
(90) days and not more than one-hundred eighty (180) days
prior to the expiration of the Initial Term or the then
current Renewal Term.
13.3 Notwithstanding the forgoing, the Fund shall have the
ability to terminate this Agreement (i) upon sixty (60) days
prior written notice to FDISG in the event that Fund should
dissolve and discontinue to do business; or (ii) upon the
termination of the Administration Agreement dated
, 1996 between the Fund and FDISG.
13.4 In the event that FDISG has failed to meet a specific
performance standard category, as set forth in Exhibit 1 of
Schedule A, in four months of any rolling six month period,
the Fund may terminate this Agreement. The Fund will
provide FDISG with sixty (60) days notice in writing if the
Fund intends to exercise its option under this Section 8(d).
Notwithstanding the foregoing, the Fund's right under this
Section 8(d), shall not become effective until ninety (90)
days after FDISG has begun providing services under this
Agreement.
13.5 In the event a termination notice is given by the
Fund, all expenses associated with movement of records and
materials and conversion thereof to a successor transfer
agent will be borne by the Fund.
13.6 If a party hereto is guilty of a material failure to
perform its duties and obligations hereunder (a "Defaulting
Party") the other party (the "Non-Defaulting Party") may
give written notice thereof to the Defaulting Party, and if
such material breach shall not have been remedied within
thirty (30) days after such written notice is given, then
the Non-Defaulting Party may terminate this Agreement by
giving thirty (30) days written notice of such termination
to the Defaulting Party. If FDISG is the Non-Defaulting
Party, its termination of this Agreement shall not
constitute a waiver of any other rights or remedies of FDISG
with respect to services performed prior to such termination
or rights of FDISG to be reimbursed for out-of-pocket
expenses. In all cases, termination by the Non-Defaulting
Party shall not constitute a waiver by the Non-Defaulting
Party of any other rights it might have under this Agreement
or otherwise against the Defaulting Party.
Article 14 Additional Portfolios.
In the event that the Fund establishes one or more
Portfolios in addition to those identified in Exhibit 1,
with respect to which the Fund desires to have FDISG render
services as transfer agent under the terms hereof, the Fund
shall so notify FDISG in writing, and if FDISG agrees in
writing to provide such services, Exhibit 1 shall be amended
to include such additional Portfolios.
Article 15 Confidentiality.
15.1 The parties agree that the Proprietary Information
(defined below) and the contents of this Agreement
(collectively "Confidential Information") are confidential
information of the parties and their respective licensors.
The Fund and FDISG shall exercise at least the same degree
of care, but not less than reasonable care, to safeguard the
confidentiality of the Confidential Information of the other
as it would exercise to protect its own confidential
information of a similar nature. The Fund and FDISG shall
not duplicate, sell or disclose to others the Confidential
Information of the other, in whole or in part, without the
prior written permission of the other party. The Fund and
FDISG may, however, disclose Confidential Information to
their respective parent corporation, their respective
affiliates, their subsidiaries and affiliated companies and
employees, provided that each shall use reasonable efforts
to ensure that the Confidential Information is not
duplicated or disclosed in breach of this Agreement. The
Fund and FDISG may also disclose the Confidential
Information to regulatory or judicial authorities,
independent contractors, auditors, and professional
advisors, provided they first agree in writing to be bound
by the confidentiality obligations substantially similar to
this Section 15.1. Notwithstanding the previous sentence,
in no event shall either the Fund or FDISG disclose the
Confidential Information to any competitor of the other
without specific, prior written consent.
15.2 Proprietary Information means:
(a) any data or information that is competitively
sensitive material, and not generally known to the public,
including, but not limited to, information about product
plans, marketing strategies, finance, operations, customer
relationships, customer profiles, sales estimates, business
plans, and internal performance results relating to the
past, present or future business activities of the Fund or
FDISG, their respective subsidiaries and affiliated com-
panies and the customers, clients and suppliers of any of
them;
(b) any scientific or technical information, design,
process, procedure, formula, or improvement that is commer-
cially valuable and secret in the sense that its confiden-
tiality affords the Fund or FDISG a competitive advantage
over its competitors; and
(c) all confidential or proprietary concepts, documen-
tation, reports, data, specifications, computer software,
source code, object code, flow charts, databases, inven-
tions, know-how, show-how and trade secrets, whether or not
patentable or copyrightable.
15.3 Confidential Information includes, without limitation,
all documents, inventions, substances, engineering and
laboratory notebooks, drawings, diagrams, specifications,
bills of material, equipment, prototypes and models, and any
other tangible manifestation of the foregoing of either
party which now exist or come into the control or possession
of the other.
Article 16 Force Majeure.
No party shall be liable for any default or delay in the
performance of its obligations under this Agreement if and
to the extent such default or delay is caused, directly or
indirectly, by (i) fire, flood, elements of nature or other
acts of God; (ii) any outbreak or escalation of hostilities,
war, riots or civil disorders in any country, (iii) any act
or omission of the other party or any governmental
authority; (iv) any labor disputes (whether or not the
employees' demands are reasonable or within the party's
power to satisfy); or (v) nonperformance by a third party or
any similar cause beyond the reasonable control of such
party, including without limitation, failures or
fluctuations in telecommunications or other equipment. In
any such event, the non-performing party shall be excused
from any further performance and observance of the
obligations so affected only for as long as such
circumstances prevail and such party continues to use
commercially reasonable efforts to recommence performance or
observance as soon as practicable.
Article 17 Assignment and Subcontracting.
This Agreement, its benefits and obligations shall be
binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns. This
Agreement may not be assigned or otherwise transferred by
either party hereto, without the prior written consent of
the other party, which consent shall not be unreasonably
withheld; provided, however, that FDISG may, in its sole
discretion, assign all its right, title and interest in this
Agreement to an affiliate, parent or subsidiary. FDISG may,
in its sole discretion, engage subcontractors to perform any
of the obligations contained in this Agreement to be
performed by FDISG, but such engagement will not relieve
FDISG of such obligations.
Article 18 Arbitration.
18.1 Any claim or controversy arising out of or relating to
this Agreement, or breach hereof, shall be settled by
arbitration administered by the American Arbitration
Association in Boston, Massachusetts in accordance with its
applicable rules, except that the Federal Rules of Evidence
and the Federal Rules of Civil Procedure with respect to the
discovery process shall apply.
18.2 The parties hereby agree that judgment upon the award
rendered by the arbitrator may be entered in any court
having jurisdiction.
18.3 The parties acknowledge and agree that the performance
of the obligations under this Agreement necessitates the use
of instrumentalities of interstate commerce and,
notwithstanding other general choice of law provisions in
this Agreement, the parties agree that the Federal
Arbitration Act shall govern and control with respect to the
provisions of this Article 18.
Article 19 Notice.
Any notice or other instrument authorized or required by
this Agreement to be given in writing to the Fund or FDISG,
shall be sufficiently given if addressed to that party and
received by it at its office set forth below or at such
other place as it may from time to time designate in
writing. A written notice or instrument may be in the form
of a facsimile transmission, electronic mail, a telegram or
a telex provided that it is actually received by the
addressee.
To the Fund:
Attention: __________________
To FDISG:
First Data Investor Services Group, Inc.
4400 Computer Drive
Westboro, Massachusetts 01581
Attention: President
with a copy to FDISG's General Counsel
Article 20 Governing Law/Venue.
The laws of the Commonwealth of Massachusetts, excluding the
laws on conflicts of laws, shall govern the interpretation,
validity, and enforcement of this agreement. All actions
arising from or related to this Agreement shall be brought
in the state and federal courts sitting in the City of
Boston, and FDISG and Client hereby submit themselves to the
exclusive jurisdiction of those courts.
Article 21 Counterparts.
This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an
original; but such counterparts shall, together, constitute
only one instrument.
Article 22 Captions.
The captions of 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.
Article 23 Publicity.
Neither FDISG nor the Fund shall release or publish news
releases, public announcements, advertising or other
publicity relating to this Agreement or to the transactions
contemplated by it without the prior review and written
approval of the other party; provided, however, that either
party may make such disclosures as are required by legal,
accounting or regulatory requirements after making
reasonable efforts in the circumstances to consult in
advance with the other party.
Article 24 Relationship of Parties/Non-Solicitation.
24.1 The parties agree that they are independent
contractors and not partners or co-venturers and nothing
contained herein shall be interpreted or construed
otherwise.
24.2 Except as may be agreed upon by the parties, during
the term of this Agreement and for one (1) year afterward,
the Fund and FDISG agree not to recruit, solicit, employ or
engage, for themselves or others, the employees of the other
party.
Article 25 Entire Agreement; Severability.
25.1 This Agreement, including Schedules, Addenda, and
Exhibits hereto, constitutes the entire Agreement between
the parties with respect to the subject matter hereof and
supersedes all prior and contemporaneous proposals,
agreements, contracts, representations, and understandings,
whether written or oral, between the parties with respect to
the subject matter hereof. No change, termination,
modification, or waiver of any term or condition of the
Agreement shall be valid unless in writing signed by each
party. No such writing shall be effective as against FDISG
unless said writing is executed by a Senior Vice President,
Executive Vice President, or President of FDISG. A party's
waiver of a breach of any term or condition in the Agreement
shall not be deemed a waiver of any subsequent breach of the
same or another term or condition.
25.2 The parties intend every provision of this Agreement
to be severable. If a court of competent jurisdiction
determines that any term or provision is illegal or invalid
for any reason, the illegality or invalidity shall not
affect the validity of the remainder of this Agreement. In
such case, the parties shall in good faith modify or
substitute such provision consistent with the original
intent of the parties. Without limiting the generality of
this paragraph, if a court determines that any remedy stated
in this Agreement has failed of its essential purpose, then
all other provisions of this Agreement, including the
limitations on liability and exclusion of damages, shall
remain fully effective.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers,
as of the day and year first above written.
INSIGHT PREMIER FUNDS
By:
Title:
FIRST DATA INVESTOR SERVICES GROUP, INC.
By:
Title:
Exhibit 1
LIST OF PORTFOLIOS
Insight Growth Fund
Insight Moderate Growth Fund
Insight Conservative Allocation Fund
Schedule A
DUTIES OF FDISG
1. Shareholder Information. FDISG shall maintain a
record of the number of Shares held by each Shareholder of
record which shall include name, address, taxpayer
identification and which shall indicate whether such Shares
are held in certificates or uncertificated form.
2. Shareholder Services. FDISG shall respond as
appropriate to all inquiries and communications from
Shareholders relating to Shareholder accounts with respect
to its duties hereunder and as may be from time to time
mutually agreed upon between FDISG and the Fund.
3. Share Certificates.
(a) At the expense of the Fund, the Fund shall supply
FDISG with an adequate supply of blank Share certificates to
meet FDISG requirements therefor. Such Share certificates
shall be properly signed by facsimile. The Fund agrees
that, notwithstanding the death, resignation, or removal of
any officer of the Fund whose signature appears on such
certificates, FDISG or its agent may continue to countersign
certificates which bear such signatures until otherwise
directed by Written Instructions.
(b) FDISG shall issue replacement Share certificates in
lieu of certificates which have been lost, stolen or
destroyed, upon receipt by FDISG of properly executed
affidavits and lost certificate bonds, in form satisfactory
to FDISG, with the Fund and FDISG as obligees under the
bond.
(c) FDISG shall also maintain a record of each certificate
issued, the number of Shares represented thereby and the
Shareholder of record. With respect to Shares held in open
accounts or uncertificated form (i.e., no certificate being
issued with respect thereto) FDISG shall maintain comparable
records of the Shareholders thereof, including their names,
addresses and taxpayer identification numbers. FDISG shall
further maintain a stop transfer record on lost and/or
replaced certificates.
4. Mailing Communications to Shareholders; Proxy
Materials. FDISG will address and mail to Shareholders of
the Fund, all reports to Shareholders, dividend and
distribution notices and proxy material for the Fund's
meetings of Shareholders. In connection with meetings of
Shareholders, FDISG will prepare Shareholder lists, mail and
certify as to the mailing of proxy materials, process and
tabulate returned proxy cards, report on proxies voted prior
to meetings, act as inspector of election at meetings and
certify Shares voted at meetings.
5. Sales of Shares
(a) FDISG shall not be required to issue any Shares of the
Fund if it has received a Written Instruction from the Fund
or official notice from any appropriate authority that the
sale of the Shares of the Fund has been suspended or
discontinued. The existence of such Written Instructions or
such official notice shall be conclusive evidence of the
right of FDISG to rely on such Written Instructions or
official notice.
(b) In the event that any check or other order for the
payment of money is returned unpaid for any reason, FDISG
will endeavor to: (i) give prompt notice of such return to
the Fund or its designee; (ii) place a stop transfer order
against all Shares issued as a result of such check or
order; and (iii) take such actions as FDISG may from time to
time deem appropriate.
6. Transfer and Repurchase
(a) FDISG shall process all requests to transfer or redeem
Shares in accordance with the transfer or repurchase
procedures set forth in the Fund's Prospectus.
(b) FDISG will transfer or repurchase Shares upon receipt
of Oral or Written Instructions or otherwise pursuant to the
Prospectus and Share certificates, if any, properly endorsed
for transfer or redemption, accompanied by such documents as
FDISG reasonably may deem necessary.
(c) FDISG reserves the right to refuse to transfer or
repurchase Shares until it is satisfied that the endorsement
on the instructions is valid and genuine. FDISG also
reserves the right to refuse to transfer or repurchase
Shares until it is satisfied that the requested transfer or
repurchase is legally authorized, and it shall incur no
liability for the refusal, in good faith, to make transfers
or repurchases which FDISG, in its good judgement, deems
improper or unauthorized, or until it is reasonably
satisfied that there is no basis to any claims adverse to
such transfer or repurchase.
(d) When Shares are redeemed, FDISG shall, upon receipt of
the instructions and documents in proper form, deliver to
the Custodian and the Fund or its designee a notification
setting forth the number of Shares to be redeemed. Such
redeemed shares shall be reflected on appropriate accounts
maintained by FDISG reflecting outstanding Shares of the
Fund and Shares attributed to individual accounts.
(e) FDISG, upon receipt of the monies provided to it by the
Custodian for the redemption of Shares, pay such monies as
are received from the Custodian, all in accordance with the
procedures described in the written instruction received by
FDISG from the Fund.
(f) FDISG shall not process or effect any redemption with
respect to Shares of the Fund after receipt by FDISG or its
agent of notification of the suspension of the determination
of the net asset value of the Fund.
7. Dividends
(a) Upon the declaration of each dividend and each capital
gains distribution by the Board of Directors of the Fund
with respect to Shares of the Fund, the Fund shall furnish
or cause to be furnished to FDISG Written Instructions
setting forth the date of the declaration of such dividend
or distribution, the ex-dividend date, the date of payment
thereof, the record date as of which Shareholders entitled
to payment shall be determined, the amount payable per Share
to the Shareholders of record as of that date, the total
amount payable on the payment date and whether such dividend
or distribution is to be paid in Shares at net asset value.
(b) On or before the payment date specified in such
resolution of the Board of Directors, the Fund will provide
FDISG with sufficient cash to make payment to the
Shareholders of record as of such payment date.
(c) If FDISG does not receive sufficient cash from the
Fund to make total dividend and/or distribution payments to
all Shareholders of the Fund as of the record date, FDISG
will, upon notifying the Fund, withhold payment to all
Shareholders of record as of the record date until
sufficient cash is provided to FDISG.
8. In addition to and neither in lieu nor in
contravention of the services set forth above, FDISG shall:
(i) perform all the customary services of a transfer agent,
registrar, dividend disbursing agent and agent of the
dividend reinvestment and cash purchase plan as described
herein consistent with those requirements in effect as at
the date of this Agreement. The detailed definition,
frequency, limitations and associated costs (if any) set out
in the attached fee schedule, include but are not limited
to: maintaining all Shareholder accounts, preparing
Shareholder meeting lists, mailing proxies, tabulating
proxies, mailing Shareholder reports to current
Shareholders, withholding taxes on U.S. resident and
non-resident alien accounts where applicable, preparing and
filing U.S. Treasury Department Forms 1099 and other
appropriate forms required with respect to dividends and
distributions by federal authorities for all Shareholders.
Exhibit 1 of Schedule A
PERFORMANCE STANDARDS
FDISG's obligation to meet the following Performance
Standards shall be measured in the aggregate with respect to
all Portfolios.
FDISG will report to Insight on a quarterly basis the
percent of items completed within standard as well as a
quality rating. A pass/fail determination for contractual
purposes will however be based on the categories listed
below based on monthly performance. For example, the
accuracy of purchases, redemptions, exchanges and
adjustments will be reported to the Fund on an individual
basis and as a collective group. FDISG will receive a
"fail" for the month if the collective score for all
financials falls below the contractual level. Note that
completion standards are measured in business days.
<TABLE>
<CAPTION>
<S> <C>
Category Components (to be reported individually)
Financials: Purchases, Redemptions, Exchanges,
Adjustments (both financial
and non-financial adjustments)
Collective Quality Score: 98.25%
Minimum Acceptable Collective
Score by Category: Weighting:
Transaction Throughput - 99% 50%
Transaction Quality - 97.5% 50%
Shareholder Services: Telephones, Correspondence
Collective Quality Score: 98%
Minimum Acceptable Collective
Score by Category: Weighting:
Telephone Abandoned Rate - 3% 25%
Average Speed of Answer - 20 second 25%
Financial Correspondence - Receipt +2 25%
Non-financial Correspondence - Receipt + 4 25%
</TABLE>
Schedule B
FEE SCHEDULE
1. ANNUAL FEES
A. Open Account Fees: $14.00 per open account
(subject to minimum fees set forth below)
B. Fund Minimums: $32,000 per
Portfolio per year, provided however, the Fund shall pay a
minimum of $64,000 per annum regardless of the number of
Portfolios
C. Out of Pocket Expenses As set forth in
Schedule C
GENERAL
After the completion of the third year of the Agreement,
First Data may adjust any annual or monthly fees once per
calendar year, upon thirty (30) days prior written notice in
an amount not to exceed the cumulative percentage increase
in the Consumer Price Index for All Urban Consumers (CPI-U)
U.S. City Average, All items (unadjusted) - (1982-84=100),
published by the U.S Department of Labor since the last such
adjustment in the Client's monthly fees (or the Effective
Date absent a prior such adjustment).
Schedule C
OUT-OF-POCKET EXPENSES
The Fund shall reimburse FDISG monthly for applicable
out-of-pocket expenses, including, but not limited to the
following items:
Microfiche/microfilm production
Magnetic media tapes and freight
Printing costs, including certificates, envelopes,
checks and stationery
Postage (bulk, pre-sort, ZIP+4, barcoding, first
class) direct pass through to the Fund
Due diligence mailings
Telephone and telecommunication costs, including all
lease, maintenance and line costs
Ad hoc reports
Proxy solicitations, mailings and tabulations
Daily & Distribution advice mailings
Shipping, Certified and Overnight mail and insurance
Year-end form production and mailings
Terminals, communication lines, printers and other
equipment and any expenses incurred in connection with such
terminals and lines
Duplicating services
Courier services
Incoming and outgoing wire charges
Federal Reserve charges for check clearance
Overtime, as approved by the Fund
Temporary staff, as approved by the Fund
Travel and entertainment, as approved by the Fund
Record retention, retrieval and destruction costs,
including, but not limited to exit fees charged by third
party record keeping vendors
Third party audit reviews
Ad hoc SQL time
All Systems enhancements after the conversion at the
rate of $100.00 per hour
Insurance
Such other miscellaneous expenses reasonably incurred
by FDISG in performing its duties and responsibilities under
this Agreement.
The Fund agrees that postage and mailing expenses will be
paid on the day of or prior to mailing as agreed with FDISG.
In addition, the Fund will promptly reimburse FDISG for any
other unscheduled expenses incurred by FDISG whenever the
Fund and FDISG mutually agree that such expenses are not
otherwise properly borne by FDISG as part of its duties and
obligations under the Agreement.
Schedule D
FUND DOCUMENTS
Certified copy of the Articles of Incorporation of the
Fund, as amended
Certified copy of the By-laws of the Fund, as amended,
Copy of the resolution of the Board of Directors
authorizing the execution and delivery of this Agreement
Specimens of the certificates for Shares of the Fund,
if applicable, in the form approved by the Board of
Directors of the Fund, with a certificate of the Secretary
of the Fund as to such approval
All account application forms and other documents
relating to Shareholder accounts or to any plan, program or
service offered by the Fund
Certified list of Shareholders of the Fund with the
name, address and taxpayer identification number of each
Shareholder, and the number of Shares of the Fund held by
each, certificate numbers and denominations (if any
certificates have been issued), lists of any accounts
against which stop transfer orders have been placed,
together with the reasons therefore, and the number of
Shares redeemed by the Fund
All notices issued by the Fund with respect to the
Shares in accordance with and pursuant to the Articles of
Incorporation or By-laws of the Fund or as required by law
and shall perform such other specific duties as are set
forth in the Articles of Incorporation including the giving
of notice of any special or annual meetings of shareholders
and any other notices required thereby.
5
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EXHIBIT 9(b)
FORM OF
ADMINISTRATION AGREEMENT
THIS ADMINISTRATION AGREEMENT is made as of
_______________ (the "Agreement"), by and between FIRST DATA
INVESTOR SERVICES GROUP, INC., a Massachusetts corporation
("FDISG"), and INSIGHT PREMIER FUNDS, a Massachusetts
business trust (the "Company").
WHEREAS, the Company is registered as a diversified
open-end management investment company under the Investment
Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Company desires to retain FDISG to render
certain administrative services with respect to each
investment portfolio listed in Schedule A hereto, as the
same may be amended from time to time by the parties hereto
(collectively, the "Funds"), and FDISG is willing to render
such services;
WITNESSETH:
NOW, THEREFORE, in consideration of the premises and
mutual covenants herein contained, it is agreed between the
parties hereto as follows:
1. Appointment. The Company hereby appoints FDISG
to act as Administrator of the Company on the terms set
forth in this Agreement. FDISG accepts such appointment and
agrees to render the services herein set forth for the
compensation herein provided. In the event that the Company
decides to retain FDISG to act as Administrator hereunder
with respect to one or more portfolios other than the Funds,
the Company shall notify FDISG in writing. If FDISG is
willing to render such services, it shall notify the Company
in writing whereupon such portfolio shall become a Fund
hereunder.
2. Delivery of Documents. The Company has
furnished FDISG with copies properly certified or
authenticated of each of the following:
(a) Resolutions of the Company's Board of
Trustees authorizing the appointment of FDISG to provide
certain administrative services required by the Company for
each Fund and approving this Agreement;
(b) The Company's Declaration of Trust (the
"Declaration of Trust") filed with the Commonwealth of
Massachusetts and all amendments thereto;
(c) The Company's By-Laws and all amendments
thereto (the "By-Laws");
(d) The Investment Advisory Agreement between
Insight Management, Inc. (the "Adviser") and the Company
dated as of _______________ and all amendments thereto (the
"Advisory Agreement");
(e) The Custody Agreement between
[_________________________] (the "Custodian") and the
Company dated as of _______________ and all amendments
thereto (the "Custody Agreement");
(f) The Transfer Agency and Registrar
Agreement between First Data Investor Services Group, Inc.
(the "Transfer Agent") and the Company dated as of
______________ and all amendments thereto;
(g) The Company's Registration Statement on
Form N-1A (the "Registration Statement") under the
Securities Act of 1933 and under the 1940 Act (File Nos.
________ and ________), as declared effective by the
Securities and Exchange Commission ("SEC") on
______________, relating to shares of the Company's Shares
of Beneficial Interest, $.___ par value per share, and all
amendments thereto; and
(h) Each Fund's most recent prospectus and
Statement of Additional Information and all amendments and
supplements thereto (collectively, the "Prospectuses").
The Company will furnish FDISG from time to time with
copies, properly certified or authenticated, of all
amendments of or supplements to the foregoing. Furthermore,
the Company will provide FDISG with any other documents that
FDISG may reasonably request and will notify FDISG as soon
as possible of any matter materially affecting the
performance of FDISG of its services under this Agreement.
3. Duties as Administrator. Subject to the
supervision and direction of the Board of Trustees of the
Company, FDISG, as Administrator, will assist in supervising
various aspects of the Company's administrative operations
and undertakes to perform the following specific services:
(a) Maintaining office facilities (which may
be in the offices of FDISG or a corporate affiliate) and
furnishing corporate officers for the Company ;
(b) Performing the functions ordinarily
performed by a mutual fund group's internal legal department
as described in Schedule D to this Agreement, furnishing
data processing services, clerical services, and executive
and administrative services and stationery and office
supplies in connection with the foregoing;
(c) Accounting and bookkeeping services
(including maintenance of such accounts, books and records
of the Company as may be required by Section 31(a) of the
1940 Act and the rules thereunder);
(d) Internal auditing;
(e) Performing all functions ordinarily
performed by the office of a corporate treasurer, and
furnishing the services and facilities ordinarily incident
thereto, including calculating the net asset value of the
shares of each Fund at the close of regular trading on the
New York Stock Exchange (the "NYSE") on each day on which
the NYSE is open for trading and at such other times as the
Board of Directors may reasonably request;
(f) Preparing reports to the Company's
shareholders of record and the SEC including, but not
necessarily limited to, Annual Reports and Semi-Annual
Reports on Form N-SAR;
(g) Preparing and filing various applications,
registration statements, reports or other documents required
by federal, and state laws and regulations, other than those
filed or required to be filed by the Adviser or Transfer
Agent;
(h) Preparing and filing the Company's tax
returns;
(i) At the Adviser's request, monitoring and
developing compliance procedures for the Company which will
include, among other matters, monitoring compliance with
each Fund's investment objective, policies, restrictions,
tax requirements and applicable laws and regulations;
(j) Performing all functions ordinarily
performed by the office of a corporate secretary, and
furnishing the services and facilities incident thereto,
including all functions pertaining to matters organic to the
organization, existence and maintenance of the corporate
franchise of the Company, including preparation for, conduct
of, and recording trustees' meetings and shareholder
meetings. Trustees' meetings in excess of five in any
calendar year and shareholder meetings in excess of one in
any two year period shall be for an additional reasonable
charge as may be agreed upon by the Administrator and FDISG;
(k) Performing "Blue Sky" compliance
functions, including maintaining notice filings,
registrations or "Blue Chip" exemptions (if available) in
all U.S. jurisdictions requested by the Company, monitoring
sales of shares in all such jurisdictions and filing such
additional notice or applying for such additional or amended
registrations as may be reasonably anticipated to be
necessary to permit continuous sales of the shares of the
Funds in all such jurisdictions, filing sales literature and
advertising materials to the extent required, with such Blue
Sky authorities, and making and filing all other
applications, reports, notices, documents and exhibits in
connection with the foregoing; and
(l) Furnishing all other services identified
on Schedule B annexed hereto and incorporated herein which
are not otherwise specifically set forth above.
(m) FDISG agrees to provide the services set
forth herein in accordance with the Performance Standards
annexed hereto as Exhibit 1 of Schedule D and incorporated
herein (the "Performance Standards"). Such Performance
Standards may be amended from time to time upon written
agreement by the parties.
In performing all services under this Agreement,
FDISG: (a) shall act in conformity with the Articles, the
Prospectuses and the instructions and directions of the
Administrator, and will conform to and comply with the
requirements of the 1940 Act and all other applicable
federal or state laws and regulations; and (b) will consult
with legal counsel to the Fund, as necessary or appropriate
in light of FDISG's duty to perform customary internal legal
and corporate secretary functions. Furthermore, FDISG shall
not have or be required to have any authority to supervise
the investment or reinvestment of the securities or other
properties which comprise the assets of the Company or any
of its Funds and shall not provide any investment advisory
services to the Company or any of its Funds.
4. Compensation and Allocation of Expenses. FDISG
shall bear all expenses in connection with the performance
of its services under this Agreement, except as indicated
below.
(a) FDISG will from time to time employ or
associate with itself such person or persons as FDISG may
believe to be particularly suited to assist it in performing
services under this Agreement. Such person or persons may
be officers and employees who are employed by both FDISG and
the Company. The compensation of such person or persons
shall be paid by FDISG and no obligation shall be incurred
on behalf of the Company in such respect.
(b) FDISG shall not be required to pay any of
the following expenses incurred by the Company: membership
dues in the Investment Company Institute or any similar
organization; investment advisory expenses; costs of
printing and mailing stock certificates, prospectuses,
reports and notices; interest on borrowed money; brokerage
commissions; stock exchange listing fees; taxes and fees
payable to Federal, state and other governmental agencies;
fees of Trustees of the Company who are not affiliated with
FDISG; outside auditing expenses; outside legal expenses; or
other expenses not specified in this Section 4 which may be
properly payable by the Company.
(c) The Company on behalf of each of the Funds
will compensate FDISG for the performance of its obligations
hereunder in accordance with the fees set forth in the
written Fee Schedule annexed hereto as Schedule B and
incorporated herein. Schedule B may be amended to add fee
schedules for any additional Funds for which FDISG has been
retained as Administrator.
(d) The Company will compensate FDISG for its
services rendered pursuant to this Agreement in accordance
with the fees set forth above. Such fees do not include
out-of-pocket disbursements of FDISG for which FDISG shall
be entitled to bill separately. Out-of-pocket disbursements
shall include, but shall not be limited to, the items
specified in Schedule C, annexed hereto and incorporated
herein, which schedule may be modified by FDISG upon not
less than thirty days' prior written notice to the Company
and the Special Projects outlined in Schedule D hereto.
(e) FDISG will bill the Company as soon as
practicable after the end of each calendar month, and said
billings will be detailed in accordance with the out-of-
pocket schedule. The Company will promptly pay to FDISG the
amount of such billing.
(f) The Company acknowledges that the fees
that FDISG charges the Company under this Agreement reflect
the allocation of risk between the parties, including the
disclaimer of warranties in Section 7 and the limitations on
liability in Section 5. Modifying the allocation of risk
from what is stated here would affect the fees that FDISG
charges, and in consideration of those fees, the Company
agrees to the stated allocation of risk.
5. Limitation of Liability.
(a) FDISG shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the
Company in connection with the performance of its
obligations and duties under this Agreement, except a loss
resulting from FDISG's willful misfeasance, bad faith or
gross negligence in the performance of such obligations and
duties, or by reason of its reckless disregard thereof.
(b) Notwithstanding any provision in this Agreement
to the contrary, FDISG's cumulative liability (to the
Company) for all losses, claims, suits, controversies,
breaches, or damages for any cause whatsoever (including but
not limited to those arising out of or related to this
Agreement) and regardless of the form of action or legal
theory shall not exceed the greater of (i) $500,000 or (ii)
the fees received by FDISG for services provided under this
Agreement during the twelve months immediately prior to the
date of such loss or damage. The Company understands the
limitation on FDISG's damages to be a reasonable allocation
of risk and the Company expressly consents with respect to
such allocation of risk.
(c) Neither party may assert any cause of action
against the other party under this Agreement that accrued
more than two (2) years prior to the filing of the suit (or
commencement of arbitration proceedings) alleging such cause
of action.
(d) Each party shall have the duty to mitigate
damages for which the other party may become responsible.
(e) NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO
THE CONTRARY, IN NO EVENT SHALL FDISG, ITS AFFILIATES OR ANY
OF ITS OR THEIR DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR
SUBCONTRACTORS BE LIABLE UNDER ANY THEORY OF TORT, CONTRACT,
STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR LOST
PROFITS, EXEMPLARY, PUNITIVE, SPECIAL, INCIDENTAL, INDIRECT
OR CONSEQUENTIAL DAMAGES, EACH OF WHICH IS HEREBY EXCLUDED
BY AGREEMENT OF THE PARTIES REGARDLESS OF WHETHER SUCH
DAMAGES WERE FORESEEABLE OR WHETHER EITHER PARTY OR ANY
ENTITY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
6. Indemnification.
(a) Each party (the "Indemnifying Party")
shall indemnify and hold the other party (the "Indemnified
Party") harmless from and against any and all claims, costs,
expenses (including reasonable attorneys' fees), losses,
damages, charges, payments and liabilities of any sort or
kind which may be asserted against Indemnified Party or for
which Indemnified Party may be held to be liable in
connection with this Agreement or Indemnified Party's
performance hereunder (a "Claim"), unless such Claim
resulted from an intentional, reckless or grossly negligent
act or omission to act or bad faith by Indemnified Party in
the performance of its obligations hereunder.
(b) In any case in which the Indemnifying
Party may be asked to indemnify or hold Indemnified Party
harmless, Indemnified Party will notify the Indemnifying
Party promptly after identifying any situation which it
believes presents or appears likely to present a claim for
indemnification against the Indemnifying Party although the
failure to do so shall not prevent recovery by Indemnified
Party and shall keep the Indemnifying Party advised with
respect to all developments concerning such situation. The
Indemnifying Party shall have the option to defend
Indemnified Party against any Claim which may be the subject
of this indemnification, and, in the event that the
Indemnifying Party so elects, such defense shall be
conducted by counsel chosen by the Indemnifying Party and
satisfactory to Indemnified Party, and thereupon the
Indemnifying Party shall take over complete defense of the
Claim and Indemnified Party shall sustain no further legal
or other expenses in respect of such Claim. Indemnified
Party will not confess any Claim or make any compromise in
any case in which the Indemnifying Party will be asked to
provide indemnification, except with the Indemnifying
Party's prior written consent. The obligations of the
parties hereto under this Section 6 shall survive the
termination of this Agreement.
7. EXCLUSION OF WARRANTIES. THIS IS A SERVICE
AGREEMENT. EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT,
FDISG DISCLAIMS ALL OTHER REPRESENTATIONS OR WARRANTIES,
EXPRESS OR IMPLIED, MADE TO THE FUND OR ANY OTHER PERSON,
INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES REGARDING
QUALITY, SUITABILITY, MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE OR OTHERWISE (IRRESPECTIVE OF ANY COURSE
OF DEALING, CUSTOM OR USAGE OF TRADE) OF ANY SERVICES OR ANY
GOODS PROVIDED INCIDENTAL TO SERVICES PROVIDED UNDER THIS
AGREEMENT. FDISG DISCLAIMS ANY WARRANTY OF TITLE OR NON-
INFRINGEMENT EXCEPT AS OTHERWISE SET FORTH IN THIS
AGREEMENT.
8. Termination of Agreement.
(a) This Agreement shall be effective on the
date first written above and shall continue for a period of
five (5) years (the "Initial Term").
(b) Upon the expiration of the Initial Term,
this Agreement shall automatically renew for successive
terms of three (3) years ("Renewal Terms") each, unless the
Company or FDISG provides written notice to the other of its
intent not to renew. Such notice must be received not less
than ninety (90) days and not more than one-hundred eighty
(180) days prior to the expiration of the Initial Term or
the then current Renewal Term.
(c) Notwithstanding the forgoing, the Company
shall have the ability to terminate this Agreement (i) upon
sixty (60) days prior written notice to FDISG in the event
that Company should dissolve and discontinue to do business;
or (ii) upon the termination of the Transfer Agency and
Services Agreement dated , 1996 between the
Company and FDISG.
(d) In the event that FDISG has failed to meet
a specific performance standard category, as set forth in
Exhibit 1 of Schedule D, in four months of any rolling six
month period, the Company may terminate this Agreement. The
Company will provide FDISG with sixty (60) days notice in
writing if the Company intends to exercise its option under
this Section 8(d). Notwithstanding the foregoing, the
Company's right under this Section 8(d), shall not become
effective until ninety (90) days after FDISG has begun
providing services under this Agreement.
(e) In the event a termination notice is given
by the Company, all expenses associated with movement of
records and materials and conversion thereof will be borne
by the Company.
(f) If a party hereto is guilty of a material
failure to perform its duties and obligations hereunder (a
"Defaulting Party") resulting in a material loss to the
other party, such other party (the "Non-Defaulting Party")
may give written notice thereof to the Defaulting Party, and
if such material breach shall not have been remedied within
thirty (30) days after such written notice is given, then
the Non-Defaulting Party may terminate this Agreement by
giving thirty (30) days written notice of such termination
to the Defaulting Party. If FDISG is the Non-Defaulting
Party, its termination of this Agreement shall not
constitute a waiver of any other rights or remedies of FDISG
with respect to services performed prior to such termination
or rights of FDISG to be reimbursed for out-of-pocket
expenses. In all cases, termination by the Non-Defaulting
Party shall not constitute a waiver by the Non-Defaulting
Party of any other rights it might have under this Agreement
or otherwise against the Defaulting Party.
9. Modifications and Waivers. No change,
termination, modification, or waiver of any term or
condition of the Agreement shall be valid unless in writing
signed by each party. No such writing shall be effective as
against FDISG unless said writing is executed by a Senior
Vice President, Executive Vice President or President of
FDISG. A party's waiver of a breach of any term or
condition in the Agreement shall not be deemed a waiver of
any subsequent breach of the same or another term or
condition.
10. No Presumption Against Drafter. FDISG and the
Company have jointly participated in the negotiation and
drafting of this Agreement. The Agreement shall be
construed as if drafted jointly by the Company and FDISG,
and no presumptions arise favoring any party by virtue of
the authorship of any provision of this Agreement.
11. Publicity. Neither FDISG nor the Company shall
release or publish news releases, public announcements,
advertising or other publicity relating to this Agreement or
to the transactions contemplated by it without prior review
and written approval of the other party; provided, however,
that either party may make such disclosures as are required
by legal, accounting or regulatory requirements after making
reasonable efforts in the circumstances to consult in
advance with the other party.
12. Severability. The parties intend every
provision of this Agreement to be severable. If a court of
competent jurisdiction determines that any term or provision
is illegal or invalid for any reason, the illegality or
invalidity shall not affect the validity of the remainder of
this Agreement. In such case, the parties shall in good
faith modify or substitute such provision consistent with
the original intent of the parties. Without limiting the
generality of this paragraph, if a court determines that any
remedy stated in this Agreement has failed of its essential
purpose, then all other provisions of this Agreement,
including the limitations on liability and exclusion of
damages, shall remain fully effective.
13. Miscellaneous.
(a) Any notice or other instrument authorized
or required by this Agreement to be given in writing to the
Company or FDISG shall be sufficiently given if addressed to
the party and received by it at its office set forth below
or at such other place as it may from time to time designate
in writing. A written notice or instrument may be in the
form of a facsimile transmission, electronic mail, telegram
or telex; provided that it is actually received by the
addressee.
To the Company:
Insight Premier Funds
20 Williams Street
Wellesley Hills, Massachusetts 02181
Attention: President
with a copy to:
Hale and Dorr
60 State Street
Boston, Massachusetts 02109
Attention: Pamela Wilson
To FDISG:
First Data Investor Services Group,
Inc.
4400 Computer Drive
Westborough, Massachusetts 01581
Attention: President
with a copy to FDISG's General
Counsel
(b) This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their
respective successors and permitted assigns and is not
intended to confer upon any other person any rights or
remedies hereunder. This Agreement may not be assigned or
otherwise transferred by either party hereto, without the
prior written consent of the other party, which consent
shall not be unreasonably withheld; provided, however, that
FDISG may, in its sole discretion, assign all its right,
title and interest in this Agreement to an affiliate, parent
or subsidiary. FDISG may, in its sole discretion, engage
subcontractors to perform any of the obligations contained
in this Agreement to be performed by FDISG, but such
engagement will not relieve FDISG of such obligations.
(c) The laws of the Commonwealth of
Massachusetts, excluding the laws on conflicts of laws,
shall govern the interpretation, validity, and enforcement
of this Agreement. All actions arising from or related to
this Agreement shall be brought in the state and federal
courts sitting in the City of Boston, and FDISG and the
Company hereby submit themselves to the exclusive
jurisdiction of those courts.
(d) This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be
an original and which collectively shall be deemed to
constitute only one instrument.
(e) The captions of 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.
(f) The Company and FDISG agree that the
obligations of the Company under the Agreement shall not be
binding upon any of the Trustees, shareholders, nominees,
officers, employees or agents, whether past, present or
future, of the Company individually, but are binding only
upon the assets and property of the Company, as provided in
the Declaration of Trust. The execution and delivery of
this Agreement have been authorized by the Trustees of the
Company, and signed by an authorized officer of the Company,
acting as such, and neither such authorization by such
Trustees nor such execution and delivery by such officer
shall be deemed to have been made by any of them or any
shareholder of the Company individually or to impose any
liability on any of them or any shareholder of the Company
personally, but shall bind only the assets and property of
the Company as provided in the Declaration of Trust. No
series of the Company shall be responsible for the
obligations of any other series under this Agreement.
14. Confidentiality.
(a) The parties agree that the Proprietary
Information (defined below) and the contents of this
Agreement (collectively "Confidential Information") are
confidential information of the parties and their respective
licensers. The Company and FDISG shall exercise reasonable
care to safeguard the confidentiality of the Confidential
Information of the other. The Company and FDISG may each
use the Confidential Information only to exercise its rights
or perform its duties under this Agreement. The Company and
FDISG shall not duplicate, sell or disclose to others the
Confidential Information of the other, in whole or in part,
without the prior written permission of the other party. The
Company and FDISG may, however, disclose Confidential
Information to its employees who have a need to know the
Confidential Information to perform work for the other,
provided that each shall use reasonable efforts to ensure
that the Confidential Information is not duplicated or
disclosed by its employees in breach of this Agreement. The
Company and FDISG may also disclose the Confidential
Information to regulatory or judicial authorities,
independent contractors, auditors and professional advisors,
provided they first agree in writing to be bound by the
confidentiality obligations substantially similar to this
Section 14. Notwithstanding the previous sentence, in no
event shall either the Company or FDISG disclose the
Confidential Information to any competitor of the other
without specific, prior written consent.
(b) Proprietary Information means:
(i) any data or information that is
completely sensitive material, and not generally known to
the public, including, but not limited to, information about
product plans, marketing strategies, finance, operations,
customer relationships, customer profiles, sales estimates,
business plans, and internal performance results relating to
the past, present or future business activities of the
Company or FDISG, their respective subsidiaries and
affiliated companies and the customers, clients and
suppliers of any of them;
(ii) any scientific or technical
information, design, process, procedure, formula, or
improvement that is commercially valuable and secret in the
sense that its confidentiality affords the Company or FDISG
a competitive advantage over its competitors; and
(iii) all confidential or proprietary
concepts, documentation, reports, data, specifications,
computer software, source code, object code, flow charts,
databases, inventions, know-how, show-how and trade secrets,
whether or not patentable or copyrightable.
(c) Confidential Information includes, without
limitation, all documents, inventions, substances,
engineering and laboratory notebooks, drawings, diagrams,
specifications, bills of material, equipment, prototypes and
models, and any other tangible manifestation of the
foregoing of either party which now exist or come into the
control or possession of the other.
(d) The Company acknowledges that breach of
the restrictions on use, dissemination or disclosure of any
Confidential Information would result in immediate and
irreparable harm, and money damages would be inadequate to
compensate FDISG for that harm. FDISG shall be entitled to
equitable relief, in addition to all other available
remedies, to redress any such breach.
15. Force Majeure. No party shall be liable for any
default or delay in the performance of its obligations under
this Agreement if and to the extent such default or delay is
caused, directly or indirectly, by (i) fire, flood, elements
of nature or other acts of God; (ii) any outbreak or
escalation of hostilities, war, riots or civil disorders in
any country, (iii) any act or omission of the other party or
any governmental authority; (iv) any labor disputes (whether
or not the employees' demands are reasonable or within the
party's power to satisfy); or (v) nonperformance by a third
party or any similar cause beyond the reasonable control of
such party, including without limitation, failures or
fluctuations in telecommunications or other equipment. In
any such event, the non-performing party shall be excused
from any further performance and observance of the
obligations so affected only for so long as such
circumstances prevail and such party continues to use
commercially reasonable efforts to recommence performance or
observance as soon as practicable.
16. Entire Agreement. This Agreement, including all
Schedules hereto, constitutes the entire Agreement between
the parties with respect to the subject matter hereof and
supersedes all prior and contemporaneous proposals,
agreements, contracts, representations, and understandings,
whether written or oral, between the parties with respect to
the subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have caused
this instrument to be duly executed and delivered by their
duly authorized officers as of the date first written above.
FIRST DATA INVESTOR SERVICES GROUP,
INC.
By:
Name:
Title:
INSIGHT PREMIER FUNDS
By:
Name:
Title:
SCHEDULE A
LIST OF FUNDS
Insight Growth Fund
Insight Moderate Growth Fund
Insight Conservative Allocation Fund
SCHEDULE B
FEE SCHEDULE
For the services to be rendered, the facilities to be
furnished and the payments to be made by FDISG, as provided
for in this Agreement, the Company, on behalf of each Fund,
will pay FDISG on the first business day of each month a fee
for the previous month at the rates listed below. The fee
for the period from the date the Registration Statement is
declared effective by the SEC to the end of the month during
which the Registration Statement is declared effective shall
be prorated according to the proportion that such period
bears to the full monthly period. Upon any termination of
this Agreement before the end of any month, the fee for such
part of a month shall be prorated according to the
proportion which such period bears to the full monthly
period and shall be payable upon the date of termination of
this Agreement.
Flat fee of $67,500 per Fund per annum, provided
however, the Company shall pay a minimum of $125,000 per
annum regardless of the number of Funds;
FDISG shall be entitled to collect all out-of-pocket
fees described in Schedule C.
SCHEDULE C
OUT-OF-POCKET EXPENSES
Out-of-pocket expenses include, but are not limited to, the
following:
- - Postage of Board meeting materials and other materials
to the Company's
Board members and service providers (including
overnight or other courier
services)
- - Telecommunications charges (including FAX) with
respect to
communications with the Company's directors, officers
and service
providers
- - Duplicating charges with respect to filings with
federal and state authorities
and Board meeting materials
- - Courier services
- - Pricing services
- - Forms and supplies for the preparation of Board
meetings and other
materials for the Company
- - Vendor set-up charges for Blue Sky services
- - Such other expenses as are agreed to by FDISG and the
Administrator
SCHEDULE D
Fund Accounting and Administrative Services
Routine Projects
o Daily, Weekly, and Monthly Reporting
o Portfolio and General Ledger Accounting
o Daily Pricing of all Securities
o Daily Valuation and NAV Calculation
o Comparison of NAV to market movement
o Review of price tolerance/fluctuation report
o Research items appearing on the price exception report
o Weekly cost monitoring along with market-to-market
valuations in accordance with Rule 2a7
o Preparation of monthly ex-dividend monitor
o Daily cash reconciliation with the custodian bank
o Daily updating of price and rate information to the
Transfer Agent/Insurance Agent
o Daily support and report delivery to Portfolio
Management
o Daily calculation of fund advisor fees and waivers
o Daily calculation of distribution rates
o Daily maintenance of each fund's general ledger
including expense accruals
o Daily price notification to other vendors as required
o Calculation of 30-day adjusted SEC yields
o Preparation of month-end reconciliation package
o Monthly reconciliation of fund expense records
o Preparation of monthly pay down gain/loss summaries
o Preparation of all annual and semi-annual audit work
papers
o Preparation and Printing of Financial Statements
o Providing Shareholder Tax Information to Transfer
Agent
o Producing Drafts of IRS and State Tax Returns
o Treasury Services including:
Provide Officer for the fund
Expense Accrual Monitoring
Determination of Dividends
Prepare materials for review by the board, e.g.,
2a-7,10f-3, 17a-7, 17e-1, Rule 144a
Tax and Financial Counsel
o Monthly Compliance Testing including section 817H
Distribution and Legal, Regulatory and Board of Trustees
Support
Routine Projects
o Provide 1940 Act Attorney to assist in organization
o Prepare agenda and background materials for legal
approval at Board Meetings; make
presentations where appropriate; prepare minutes;
follow up on issues
o Review and filing of Form N-SAR
o Review and filing of Annual and Semi-Annual Financial
Reports
o Assistance in Preparation of Fund Registration
Statements
o Review of all Sales Material and Advertising
o Coordinate all aspects of the printing and mailing
process with outside printers for all
shareholder publications
o Support for all quarterly board meetings
o Preparation of proxy materials for one meeting per two
year period
o Annual update Post-Effective Amendment (PEA)
o Prospectus supplements as needed
o Consultations regarding legal issues as needed
o SEC audit report
o Arrange insurance and fidelity bond coverage
o Support for one special board meeting per year and
consent votes where needed
o One additional PEA (other than annual update)
o One exemptive order application
o Assist with marketing strategy and product development
Special Projects*
o Proxy material preparation for additional meetings
beyond one per two year period
o N-14 preparation (merger document)
o Additional PEAs beyond two per year
o Prospectus simplification
o Additional exemptive order applications beyond one per
year
o Extraordinary non-recurring projects - e.g., arranging
CDSC financing programs
o Basic sales, mutual funds, and product training to
branch and sales representatives
*Charged on a project-by-project basis.
Exhibit 1
of
Schedule D
Performance Standards
(i) The Fund's auditors recommend termination and
demonstrate fundamental control weakness at FDISG - cure
period - 90 days;
(ii) The voluntary termination of FDISG employees key to
the Fund's account (as detailed below), exceeds 20% or
more during any one contract year;
Michael Denofrio
David Egan
Vincent Fabiani
Jay Falkner
Douglas Fies
James Fitzpatrick
Tom Gormley
Gail Hanson
Michael Kardok
Georgia Lonkart
Paula Lordi
(iii) The accuracy rate of reporting prices to the wire
services during any calendar quarter is below 98%, subject
to FDISG's ability to obtain timely and accurate prices/net
asset values of the underlying investments in the
funds - cure period - 90 days.
- -18-
SHARED\TLEGAL\CONTRACT\ISADMIN\Document5 Draft date: 11/07/96
November 8, 1996
Insight Premier Funds
One Exchange Place
Boston, Massachusetts 02109
Ladies and Gentlemen:
Insight Premier Funds (the "Trust") is a Massachusetts
business trust created under a written Declaration of Trust
dated, executed and delivered in Boston, Massachusetts on
September 13, 1996 (the "Declaration of Trust"). The
beneficial interests thereunder are represented by
transferable shares of beneficial interest, $.001 par value
per share.
The Trustees have the powers set forth in the
Declaration of Trust, subject to the terms, provisions and
conditions therein provided. Pursuant to Article V, Section
5.1 of the Declaration of Trust, the number of shares of
beneficial interest authorized to be issued under the
Declaration of Trust is unlimited and the Trustees are
authorized to divide the shares into one or more series of
shares and one or more classes thereof as they deem
necessary or desirable. Pursuant to Article V, Section 5.4
of the Declaration of Trust, the Trustees are empowered in
their discretion to issue shares of any series for such
amount and type of consideration, including cash or
property, and on such terms as the Trustees may deem best
(or for no consideration if pursuant to a share dividend or
split-up), all without action or approval of the
shareholders.
Pursuant to Article V, Section 5.11 of the Declaration
of Trust, the Trustees established three series of shares
designated "Insight Growth Fund", "Insight moderate Growth
Fund" and "Insight Conservative Allocation Fund".
By vote dated November 7, 1996, the Trustees of the
Trust authorized the President, any Vice President, the
Secretary and the Treasurer from time to time to determine
the appropriate number of shares to be registered, to
register with the Securities and Exchange Commission, and to
issue and sell to the public, such shares.
We have examined the Declaration of Trust, the By-
Laws, as amended from time to time, of the Trust,
resolutions of the Board of Trustees relating to the
authorization and issuance of shares of beneficial interest
of the Trust and such other documents as we have deemed
necessary or appropriate for the purposes of this opinion,
including, but not limited to, originals, or copies
certified or otherwise identified to our satisfaction, of
such documents, Trust records and other instruments. In our
examination of the above documents, we have assumed the
genuineness of all signatures, the authenticity of all
documents submitted to us as originals and the conformity to
original documents of all documents submitted to us as
certified of photostatic copies.
For purposes of this opinion letter, we have not made
an independent review of the laws of any state or
jurisdiction other than The Commonwealth of Massachusetts
and express no opinion with respect to the laws of any
jurisdiction other than the laws of The Commonwealth of
Massachusetts. Further, we express no opinion as to
compliance with any state or federal securities laws,
including the securities laws of The Commonwealth of
Massachusetts.
Our opinion below, as it relates to the
nonassessability of the shares of the Trust, is qualified to
the extent that under Massachusetts law, shareholders of a
Massachusetts business trust may be held personally liable
for the obligations of the Trust. In this regard, however,
please be advised that the Declaration of Trust disclaims
shareholder liability for acts or obligations of the Trust
and requires that notice of such disclaimer be given in each
note, bond, contract, certificate or undertaking made or
issued by the Trustees or officers of the Trust. Also, the
Declaration of Trust provides for indemnification out of
Trust property for all loss and expense of any shareholder
held personally liable for the obligations of the Trust.
We are of the opinion that all necessary Trust action
precedent to the issue of the shares of beneficial interest
of the Trust has been duly taken, and that all such shares
may legally and validly be issued for cash, and when sold
will be fully paid and non-assessable by the Trust upon
receipt by the Trust or its agent of consideration therefor
in accordance with terms described in the Trust's
Declaration of Trust and the Registration Statement, subject
to compliance with the Securities Act of 1933, as amended,
the Investment Company Act of 1940, as amended, and the
applicable state laws regulating the sale of securities.
We consent to your filing this opinion as an exhibit
to the Trust's registration statement on Form N-1A. Except
as provided in this paragraph, this opinion may not be
relied upon by, or filed with, any other parties or for any
other purpose.
Very truly yours,
/s/ HALE AND DORR
Hale and Dorr
Insight Premier Funds
November 8, 1996
Page 2
EXHIBIT 11(b)
POWER OF ATTORNEY
The undersigned, being an officer or trustee, or both,
of Insight Premier Funds, a Massachusetts business trust
(the "Trust"), hereby makes, constitutes and appoints Eric
M. Kobren, Pamela Wilson and Gail A. Hanson and each of
them, with full power to act without the other, his true and
lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities (until revoked in
writing) to sign any and all amendments to the Registration
Statement on Form N-1A relating to the shares of beneficial
interest of the Trust (including pre-effective amendments
and post-effective amendments thereto), and to file the
same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents,
and each of them, full power and authority to do and perform
each and every act and thing ratifying and confirming all
that said attorneys-in-fact and agents or any of them, or
their or his or her substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
ERIC M. KOBREN SCOTT P. MASON
Eric M. Kobren, Scott P. Mason,
Chairman of the Board Trustee
and Trustee
MICHAEL P. CASTELLANO STUART J. NOVICK
Michael P. Castellano, Stuart J. Novick,
Trustee Trustee
ARTHUR DUBROFF SCOTT A. SCHOEN
Arthur Dubroff, Scott A. Schoen,
Trustee Trustee
Dated: October 22, 1996
insight\memos\poa.doc
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Trustees
of the Insight Premier Funds:
We hereby consent to the inclusion in the Pre-Effective
Amendment to the Registration Statement of Insight Premier
Funds on Form N-1A (No. 811-7813/333-12075) of our report
dated November 7, 1996 on our audit of the statements of
assets and liabilities of the above referenced funds, which
is included in the Registration Statement. We further
consent to the reference to our Firm under the captions
"Independent Accountants" and "Financial Statements" in the
Statement of Additional Information.
/s/ COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
November 8, 1996
EXHIBIT 13(a)
PURCHASE AGREEMENT
Insight Premier Funds (the "Trust"), a Massachusetts
business trust, and Insight Management, Inc. (the "Buyer")
hereby agree as follows:
1. The Trust hereby offers the Buyer and the Buyer
hereby purchases 5,000 shares (the "Shares") at $10.00 per
share of the Trust's Insight Growth Fund (the "Fund"), with
par value of $.001 per share. The Shares are the "initial
shares" of the Fund. The Buyer hereby acknowledges receipt
of a purchase confirmation reflecting the purchase of the
Shares, and the Trust hereby acknowledges receipt from the
Buyer of funds in the amount of $50,000 in full payment for
the Shares.
2. The Buyer represents and warrants to the Trust
that the Shares purchased by the Buyer are being acquired
for investment purposes and not for the purpose of
distribution.
3. The Buyer agrees that if it or any direct or
indirect transferee of the Shares held by the Buyer redeems
the Shares prior to the fifth anniversary of the date that
the Fund begins its investment activities, the Buyer will
pay to the Fund an amount equal to the number resulting from
multiplying the Fund's total unamortized organizational
expenses by a fraction, the numerator of which is equal to
the number of Shares redeemed by the Buyer or such
transferee and the denominator of which is equal to the
number of Shares outstanding as of the date of such
redemption, as long as the administrative position of the
staff of the Securities and Exchange Commission requires
such reimbursement.
4. The Trust represents that a copy of its
Declaration of Trust, dated September 13, 1996, is on file
in the Office of the Secretary of the Commonwealth of
Massachusetts.
5. This Agreement has been executed on behalf of the
Trust by the undersigned officer of the Trust in his or her
capacity as an officer of the Trust. The obligations of
this Agreement shall be binding only upon the assets and
property of the Fund and not upon the assets and property of
any other fund of the Trust.
6. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one
instrument.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the 6th day of November, 1996.
INSIGHT PREMIER FUNDS,
on behalf of Insight Growth Fund
Attest:
Brian W. McDonald By: ERIC GODES
Attest: INSIGHT MANAGEMENT, INC.
Brian W. McDonald By: M. CASTELLANO
EXHIBIT 13(b)
PURCHASE AGREEMENT
Insight Premier Funds (the "Trust"), a Massachusetts
business trust, and Insight Management, Inc. (the "Buyer")
hereby agree as follows:
1. The Trust hereby offers the Buyer and the Buyer
hereby purchases 2,500 shares (the "Shares") at $10.00 per
share of the Trust's Insight Moderate Growth Fund (the
"Fund"), with par value of $.001 per share. The Shares are
the "initial shares" of the Fund. The Buyer hereby
acknowledges receipt of a purchase confirmation reflecting
the purchase of the Shares, and the Trust hereby
acknowledges receipt from the Buyer of funds in the amount
of $25,000 in full payment for the Shares.
2. The Buyer represents and warrants to the Trust
that the Shares purchased by the Buyer are being acquired
for investment purposes and not for the purpose of
distribution.
3. The Buyer agrees that if it or any direct or
indirect transferee of the Shares held by the Buyer redeems
the Shares prior to the fifth anniversary of the date that
the Fund begins its investment activities, the Buyer will
pay to the Fund an amount equal to the number resulting from
multiplying the Fund's total unamortized organizational
expenses by a fraction, the numerator of which is equal to
the number of Shares redeemed by the Buyer or such
transferee and the denominator of which is equal to the
number of Shares outstanding as of the date of such
redemption, as long as the administrative position of the
staff of the Securities and Exchange Commission requires
such reimbursement.
4. The Trust represents that a copy of its
Declaration of Trust, dated September 13, 1996, is on file
in the Office of the Secretary of the Commonwealth of
Massachusetts.
5. This Agreement has been executed on behalf of the
Trust by the undersigned officer of the Trust in his or her
capacity as an officer of the Trust. The obligations of
this Agreement shall be binding only upon the assets and
property of the Fund and not upon the assets and property of
any other fund of the Trust.
6. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one
instrument.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the 6th day of November, 1996.
INSIGHT PREMIER FUNDS,
on behalf of Insight Moderate Growth Fund
Attest:
Brian W. McDonald By: ERIC GODES
Attest: INSIGHT MANAGEMENT, INC.
Brian W. McDonald By: M. CASTELLANO
EXHIBIT 13(c)
PURCHASE AGREEMENT
Insight Premier Funds (the "Trust"), a Massachusetts
business trust, and Insight Management, Inc. (the "Buyer")
hereby agree as follows:
1. The Trust hereby offers the Buyer and the Buyer
hereby purchases 2,500 shares (the "Shares") at $10.00 per
share of the Trust's Insight Conservative Allocation Fund
(the "Fund"), with par value of $.001 per share. The Shares
are the "initial shares" of the Fund. The Buyer hereby
acknowledges receipt of a purchase confirmation reflecting
the purchase of the Shares, and the Trust hereby
acknowledges receipt from the Buyer of funds in the amount
of $25,000 in full payment for the Shares.
2. The Buyer represents and warrants to the Trust
that the Shares purchased by the Buyer are being acquired
for investment purposes and not for the purpose of
distribution.
3. The Buyer agrees that if it or any direct or
indirect transferee of the Shares held by the Buyer redeems
the Shares prior to the fifth anniversary of the date that
the Fund begins its investment activities, the Buyer will
pay to the Fund an amount equal to the number resulting from
multiplying the Fund's total unamortized organizational
expenses by a fraction, the numerator of which is equal to
the number of Shares redeemed by the Buyer or such
transferee and the denominator of which is equal to the
number of Shares outstanding as of the date of such
redemption, as long as the administrative position of the
staff of the Securities and Exchange Commission requires
such reimbursement.
4. The Trust represents that a copy of its
Declaration of Trust, dated September 13, 1996, is on file
in the Office of the Secretary of the Commonwealth of
Massachusetts.
5. This Agreement has been executed on behalf of the
Trust by the undersigned officer of the Trust in his or her
capacity as an officer of the Trust. The obligations of
this Agreement shall be binding only upon the assets and
property of the Fund and not upon the assets and property of
any other fund of the Trust.
6. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one
instrument.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the 6th day of November, 1996.
INSIGHT PREMIER FUNDS,
on behalf of Insight Conservative Allocation Fund
Attest:
Brian W. McDonald By: ERIC GODES
Attest: INSIGHT MANAGEMENT, INC.
Brian W. McDonald By: M. CASTELLANO
