EXHIBIT (e)(1)
MARKET STREET FUND
DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT (the "Agreement"), made as of the close of
business on ___________, 2002, by and between MARKET STREET FUND, a Delaware
business trust (the "Fund"), and 1717 CAPITAL MANAGEMENT COMPANY, a Pennsylvania
corporation ("1717" or the "Distributor").
WHEREAS, the Fund is an open-end, diversified management investment
company and is so registered under the Investment Company Act of 1940, as
amended (the "1940 Act"); and
WHEREAS, the Distributor is registered as a broker-dealer under the
Securities and Exchange Act of 1934, as amended (the "1934 Act"), is a member of
the National Association of Securities Dealers, Inc. ("NASD"), and is a
wholly-owned, indirect subsidiary of Provident Mutual Life Insurance Company
("Provident Mutual"), a Pennsylvania mutual life insurance company; and
WHEREAS, the Fund previously had retained 1717 as the Fund's
distributor to provide for the sale and distribution of shares of beneficial
interest ("shares") of each series, and any class or classes thereof, of the
Fund's investment portfolios (individually, a "Portfolio," and, collectively,
the "Portfolios"), pursuant to an agreement between the Fund and 1717, dated
January 26, 2001 (hereinafter, the "Previous Agreement"); and
WHEREAS, the change in control over Provident Mutual, as of ________,
2002, as a result of the ___________, 2002 "sponsored demutualization" and
acquisition of Provident Mutual by Nationwide Financial Services, Inc., also
resulted in the automatic and immediate change in control over 1717, and,
accordingly, also resulted in the "assignment" (as that term is defined at
Section 2(a)(4) of the 0000 Xxx) of the Previous Agreement, pursuant to which
assignment the Previous Agreement automatically and immediately terminated; and
WHEREAS, the Fund desires to continue to retain the Distributor as the
Fund's distributor to provide for the sale and distribution of the shares of the
Fund's Portfolios, as listed on the Appendix to this Agreement (as, from time to
time, may be supplemented or amended), and the Distributor is and remains
willing to continue to render these services.
NOW, THEREFORE, in consideration of the premises and mutual covenants
set forth and intending to be legally bound, the parties hereto agree as
follows:
1. APPOINTMENT OF DISTRIBUTOR. The Fund hereby appoints the Distributor as
distributor of each Portfolio, and any class thereof, on the terms and for the
period set forth in this Agreement. The Distributor hereby accepts this
appointment and agrees to render the services and duties set forth in Section 3
below. In the event that the Fund establishes any classes of the Portfolios
listed on the Appendix, or additional investment portfolios other than the
Portfolios listed on the Appendix, with respect to which the Fund desires to
retain the Distributor to act as distributor hereunder, the Fund shall notify
the Distributor, whereupon the Appendix shall be supplemented or amended and
that class or portfolio shall become a Class or Portfolio hereunder, subject to
the
provisions of this Agreement to the same extent as the Portfolios (except to the
extent that said provisions may be modified in writing by the Fund and
Distributor at the time).
2. DELIVERY OF DOCUMENTS. The Fund has furnished the Distributor with copies of
each of the following documents and shall deliver to the Distributor any future
amendments and supplements:
a. The Fund's Declaration of Trust, pursuant to a Certificate of
Trust filed with the Secretary of State of the State of
Delaware on October 30, 2000, as that Declaration of Trust may
be amended from time to time (the "Declaration of Trust");
b. The Fund's Bylaws, as amended and supplemented ("Bylaws");
c. Resolutions of the Fund's Board of Trustees (the "Board")
authorizing the execution and delivery of this Agreement;
d. The Fund's most recent amendment to its Registration Statement
under the Securities Act of 1933, as amended (the "1933 Act"),
and the 1940 Act on Form N-1A as filed with the Securities and
Exchange Commission (the "Commission") on January 26, 2001,
relating to the Fund's Portfolios (the Registration Statement,
as presently in effect and as amended or supplemented from
time to time, is herein called the "Registration Statement");
e. The Fund's most recent prospectus(es) and statement of
additional information and all amendments and supplements
thereto (these prospectus(es) and statement of additional
information and any supplements thereto, as presently in
effect and as from time to time amended and supplemented, are
herein called the "Prospectus"); and
f. The Fund's service plan and related distribution and servicing
agreement and form of broker-dealer agreement, when and if
approved; and
g. The Fund's participation agreements with certain insurance
companies that on behalf of the insurance company, and on
behalf of each separate account of the company, invest in
certain Portfolios (the "Dedicated Portfolios") which act as
investment vehicles for separate accounts established for
variable life insurance policies and variable annuity
contracts offered by the insurance companies that have entered
into participation agreements with the Fund, including
Nationwide Life Insurance Company of America (formerly,
"Provident Mutual Life Insurance Company"), Nationwide Life
and Annuity Company of America (formerly, "Providentmutual
Life and Annuity Company of America"), and other insurance
companies as may from time to time enter into
-2-
participation agreements with the Fund and the Distributor
(collectively, these agreements are referred to as the
"Participation Agreements").
3. SERVICES AND DUTIES. The Distributor covenants the following with respect to
the Distributor's services and duties:
a. The Distributor agrees to sell, as agent, from time to time
during the term of this Agreement, shares upon the terms and
at the current offering price as described in the Prospectus.
The Distributor shall act in accordance with the Participation
Agreements when selling shares of the Dedicated Portfolios,
and the Distributor shall act only in the Distributor's own
behalf as principal in making agreements with selected
dealers, if any, with respect to Portfolios that are not
Dedicated Portfolios (hereafter referred to as the "Retail
Portfolios"). No broker-dealer or other person that enters
into a selling, servicing, or participation agreement with the
Distributor shall be authorized to act as agent for the Fund
or the Fund's Portfolios in connection with the offering or
sale of shares to the public or otherwise, except as provided
in that selling, servicing, or participation agreement. The
Distributor shall use the Distributor's best efforts to sell
shares of each Portfolio, or class thereof, but the
Distributor shall not be obligated to sell any certain number
of shares.
b. The Distributor shall prepare or review, provide advice with
respect to, and file with the federal and state agencies or
other organization as required by federal, state, and other
applicable laws and regulations, all sales literature
(advertisements, brochures, and shareholder communications)
for each of the Portfolios and any class of shares thereof.
c. In performing all of the Distributor's services and duties as
distributor, the Distributor shall act in conformity with the
Declaration of Trust, Bylaws, Prospectuses, and resolutions
and other instructions of the Fund's Board and shall comply
with the requirements of the 1933 Act, the 1934 Act, the 1940
Act and all other applicable federal or state law and the
rules and regulations of the NASD.
d. The Distributor shall bear the cost of (i) printing and
distributing any Prospectus (including any supplement thereto)
to investors who are not shareholders, and (ii) preparing,
printing, and distributing any literature, advertisement or
material that is primarily intended to result in the sale of
shares; provided, however, that the Distributor shall not be
obligated to bear the expenses incurred by the Fund in
connection with the preparation and printing of any amendment
to any Registration Statement or Prospectus necessary for the
continued effective registration of the shares under the 1933
Act and state securities laws and the distribution of any such
document to existing shareholders of the Fund's Portfolios.
-3-
e. The Fund shall have the right to suspend the sale of shares at
any time in response to conditions in the securities markets
or otherwise, as may be determined by the Fund's Board, and to
suspend the redemption of shares of any Portfolio, or class
thereof, at any time permitted by the 1940 Act or the rules
and regulations of the Commission ("Rules").
f. The Fund reserves the right to reject any order for shares but
shall not do so arbitrarily or without reasonable cause.
4. FORFEITURE OF ANY SALES CHARGES UNDER CERTAIN CIRCUMSTANCES. If any Fund
shares subject to any sales charges are sold by the Distributor under the terms
of this Agreement are later redeemed or repurchased by the Fund or by the
Distributor as agent or tendered for redemption within seven (7) business days
after the date of confirmation of the original purchase of these shares, the
Distributor shall forfeit the amount above the net asset value received by the
Distributor in respect of these shares; provided, that the portion, if any, of
this amount re-allowed by the Distributor to broker-dealers or other persons
shall be repayable to the Fund only to the extent recovered by the Distributor
from the broker-dealer or other person concerned. The Distributor shall include
in the form of agreement with these broker-dealers and other persons a
corresponding provision for the forfeiture by these broker-dealers and other
persons of the concession by these broker-dealers and other persons with respect
to shares sold by these broker-dealers and other persons or their principals and
redeemed or repurchased by the Fund or by the Distributor as agent (or tendered
for redemption) within seven (7) business days after the date of confirmation of
these initial purchases.
5. LIMITATIONS OF LIABILITY. The Distributor shall not be liable for any error
of judgment or mistake of law or for any loss suffered by the Fund in connection
with the matters to which this Agreement relates, except a loss resulting from
willful misfeasance, bad faith, or gross negligence on the part of the
Distributor in the performance of the Distributor's duties or from reckless
disregard by the Distributor of any obligations and duties under this Agreement.
6. PROPRIETARY AND CONFIDENTIAL INFORMATION. The Distributor agrees on behalf of
itself and the Distributor's employees to treat confidentially and as
proprietary information of the Fund all records and other information relative
to the Fund and the Fund's Portfolios and prior, present, or potential
shareholders, and not to use these records and information for any purpose other
than performance of the Distributor's responsibilities and duties hereunder,
except after prior notification to and approval in writing by the Fund, which
approval shall not be unreasonably withheld and may not be withheld where the
Distributor may be exposed to civil or criminal contempt proceedings for failure
to comply, when requested to divulge such information by duly constituted
authorities, or when so requested by the Fund.
7. INDEMNIFICATION.
a. The Fund represents, warrants, and covenants to the
Distributor that the Registration Statement contains, and that
the Prospectus at all times shall contain, all statements
required by the 1933 Act and the Rules of the Commission,
shall in all material respects conform to the applicable
-4-
requirements of the 1933 Act and the Rules thereunder and
shall not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading,
except that no representation or warranty in this Section 7
shall apply to statements or omissions made in reliance upon
and in conformity with written information furnished to the
Fund by or on behalf of the Distributor or the Fund's
administrator (presently, and as of _________, 2002, Gartmore
SA Capital Trust) or the Fund's fund accountant (presently,
and as of _________, 2002, BISYS Fund Services Ohio, Inc.)
expressly for use in the Registration Statement or
Prospectuses.
b. The Fund, on behalf of each Portfolio, agrees that the Fund or
a Portfolio, as the case may be, shall indemnify, defend, and
hold harmless the Distributor, the Distributor's directors and
officers, and any person who controls the Distributor within
the meaning of Section 15 of the 1933 Act, from and against
any losses, claims, damages, or liabilities, joint or several,
to which the Distributor, the Distributor's directors and
officers, and any person who controls the Distributor within
the meaning of Section 15 of the 1933 Act, may become subject
under the 1933 Act or otherwise, insofar as such losses,
claims, damages, or liabilities (or actions or proceedings in
respect thereof) arise out of, or are based upon any untrue
statement or alleged untrue statement of a material fact
contained in the Registration Statement, the Prospectuses, or
in any application or other document executed by or on behalf
of the Fund with respect to that Portfolio or are based upon
information furnished by or on behalf of the Fund with respect
to that Portfolio filed in any state in order to qualify the
shares under the securities or blue sky laws thereof ("Blue
Sky application") or arise out of, or are based upon, the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the
statements therein not misleading, and shall reimburse the
Distributor, the Distributor's directors and officers, and any
person who controls the Distributor within the meaning of
Section 15 of the 1933 Act, for any legal or other expenses
reasonably incurred by the Distributor, the Distributor's
directors and officers, and any person who controls the
Distributor within the meaning of Section 15 of the 1933 Act,
in investigating, defending or preparing to defend any such
action, proceeding or claim; provided, however, that the Fund
shall not be liable in any case to the extent that any loss,
claim, damage, or liability arises out of, or is based upon,
any untrue statement, alleged untrue statement, or omission or
alleged omission made in the Registration Statement, the
Prospectus, or any Blue Sky application with respect to a
Portfolio in reliance upon and in conformity with written
information furnished to the Fund by or on behalf of the
Distributor or either the Fund's administrator
-5-
or fund accountant specifically for inclusion therein or
arising out of the failure of the Distributor to deliver a
current Prospectus.
c. The Fund on behalf of each Portfolio shall not indemnify any
person pursuant to this Section 7 unless the court or other
body before which the proceeding was brought has rendered a
final decision on the merits that this person was not liable
by reason of his or her willful misfeasance, bad faith, or
gross negligence in the performance of his or her duties, or
his or her reckless disregard of any obligations and duties,
under this Agreement ("disabling conduct") or, in the absence
of such a decision, a reasonable determination (based upon a
review of the facts) that this person was not liable by reason
of disabling conduct has been made (i) by the vote of a
majority of a quorum of the trustees of the Fund who are
neither "interested parties" (as defined in the 0000 Xxx) nor
parties to the proceeding or (ii) by independent legal counsel
in a written opinion.
d. The Distributor shall indemnify and hold harmless the Fund and
each of the Fund's Portfolios and the Fund's several trustees
and officers, and any person who controls the Fund within the
meaning of Section 15 of the 1933 Act, from and against any
losses, claims, damages, or liabilities, joint or several, to
which any of these persons may become subject under the 1933
Act or otherwise, insofar as these losses, claims, damages, or
liabilities (or actions or proceedings in respect thereof)
arise out of, or are based upon, any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement, the Prospectus, or any Blue Sky
application, or arise out of, or are based upon, the omission
or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements
therein not misleading, which statement or omission was made
in reliance upon and in conformity with information furnished
in writing to the Fund or any of the Fund's several trustees
and officers by or on behalf of the Distributor or the Fund's
administrator or fund accountant specifically for inclusion
therein, and shall reimburse the Fund and the Fund's several
trustees and officers and these controlling persons for any
legal or other expenses reasonably incurred by any of these
persons investigating, defending or preparing to defend any
such action, proceeding, or claim.
e. The obligations of each Portfolio under this Section 7 shall
be the several (and not the joint or joint and several)
obligation of each Portfolio.
8. DURATION AND TERMINATION. This Agreement shall become effective upon its
execution as of the date first written above and, unless sooner terminated as
provided herein, shall continue for not more than two (2) years after that date.
Thereafter, if not terminated, this Agreement shall continue automatically for
successive terms of one year, provided, that the continuance is specifically
approved at least annually (a) by a vote of a majority of those members of the
Fund's Board who are not parties to this Agreement or "interested persons" of
any such party, cast in
-6-
person at a meeting called for the purpose of voting on such approval, and (b)
by the Fund's Board or by vote of a "majority of the outstanding voting
securities" of the Fund; provided, however, that this Agreement may be
terminated by the Fund at any time, without the payment of any penalty, by vote
of a majority of the entire Board or by a vote of a "majority of the outstanding
voting securities" of the Fund on sixty- (60-) days' written notice to the
Distributor, or by the Distributor at any time, without the payment of any
penalty, on ninety- (90-) days' written notice to the Fund. This Agreement shall
automatically and 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.)
9. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may be changed,
waived, discharged, or terminated orally, but only by an instrument in writing
signed by the party against which an enforcement of the change, waiver,
discharge or termination is sought.
10. NOTICES. Notices of any kind to be given to the Fund hereunder by the
Distributor shall be in writing and shall be duly given if mailed or delivered
to the Fund at 0000 Xxxxxxxxxxxx Xxxx, Xxxxxx, Xxxxxxxxxxxx 00000-0000;
Attention: President, or at any other address or to any other individual as
shall be so specified by the Fund to the Distributor. Notices of any kind to be
given to the Distributor hereunder by the Fund shall be in writing and shall be
duly given if mailed or delivered to 1717 Capital Management Company, 0000
Xxxxxxxxxxxx Xxxx, Xxxxxx, Xxxxxxxxxxxx 00000-0000; Attention: President, or at
any other address or to any other individual as shall be so specified by the
Distributor to the Fund.
11. MISCELLANEOUS.
a. 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 the construction or
effect of any of the provisions hereof. 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.
b. The names "Market Street Fund" and "Board" or Trustees" of
"Market Street Fund" refer specifically 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 October 29, 2000, which is hereby referred to and
a copy of the Certificate of Trust is on file at the office of
the Delaware Secretary of State, and each of which are
available at the principal office of the Fund. The obligations
of "Market Street Fund" entered into in the name or on behalf
thereof by any of the trustees, officers, representatives, or
agents are not made individually, but in such capacities, and
are not binding upon any of the trustees, officers,
shareholders, representatives, or agents of the Fund
personally, but bind only the Trust or Portfolio property, as
the case may be (as defined in the
-7-
Declaration of Trust), and all persons dealing with the Fund
or any Portfolio, or class thereof, must look solely to the
Trust property belonging to such Portfolio or class for the
enforcement of any claims against the Fund or that Portfolio
or class.
12. COUNTERPARTS. This Agreement may be executed in counterparts, all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
ATTEST: MARKET STREET FUND
By: _________________________ By: ______________________
Name: Name:
Title: Title:
ATTEST: 1717 CAPITAL MANAGEMENT
COMPANY
By: _________________________ By: _____________________
Name: Name:
Title: Title:
-8-
APPENDIX
to the
DISTRIBUTION AGREEMENT
between
MARKET STREET FUND
and
1717 CAPITAL MANAGEMENT COMPANY
Dedicated Portfolios
All Pro Broad Equity Portfolio
All Pro Large Cap Growth Portfolio
All Pro Large Cap Value Portfolio
All Pro Small Cap Growth Portfolio
All Pro Small Cap Value Portfolio
Equity 500 Index Portfolio
International Portfolio
Mid Cap Growth Portfolio
Balanced Portfolio
Bond Portfolio
Money Market Portfolio
A-1
