Exhibit (e)(2)
PROVIDENT INSTITUTIONAL FUNDS
Distribution Agreement
----------------------
Agreement dated June 25, 1999 between PROVIDENT INSTITUTIONAL FUNDS, a
Delaware business trust, (the "Company"), and PROVIDENT DISTRIBUTORS, INC., a
Delaware corporation (the "Distributor").
WHEREAS, the Company 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 Company desires to retain the Distributor as its
distributor to provide for the sale and distribution of each class and series of
shares ("shares") in each of the Company's investment portfolios (individually,
a "Fund," collectively, the "Funds") as listed on Appendix A (as such Appendix
may, from time to time, be supplemented (or amended)), and the Distributor is
willing to render such 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 Company hereby appoints the
--------------------------
Distributor as distributor of each class and series of shares in each of the
Company's Funds on the terms and for the period set forth in this Agreement. The
Distributor hereby accepts such appointment and agrees to render the services
and duties set forth in Section 2 below. In the event that the Company
establishes additional classes or investment portfolios other than the Funds
listed on Appendix A with respect to which it desires to retain the Distributor
to act as distributor hereunder, the Company shall notify the Distributor,
whereupon such Appendix A shall be supplemented (or amended) and such portfolio
shall become a Fund hereunder and shall be subject to the provisions of this
Agreement to the same extent as the Funds (except to the extent that said
provisions may be modified in writing by the Company and Distributor at the
time).
2. Services and Duties. The Distributor enters into the following
-------------------
covenants with respect to its 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 Prospectuses. The Distributor will act only in its own
behalf as principal in making agreements with selected dealers. No brokerdealer
or other person which enters into a selling or servicing agreement with the
Distributor shall be authorized to act as agent for the Company or its Funds in
connection with the
offering or sale of shares to the public or otherwise. The Distributor shall use
its best efforts to sell shares of each class or series of each of the Funds but
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, or other applicable laws and regulations, all
sales literature (advertisements, brochures and shareholder communications) for
each of the Funds and any class or series thereof.
c. In performing all of its services and duties as Distributor, the
Distributor will act in conformity with the Declaration of Trust, By-Laws,
Prospectuses and resolutions and other instructions of the Company's Board of
Trustees and will comply with the requirements of the Securities Act of 1933, as
amended (the "1933 Act"), the Securities Exchange Act of 1934, the 1940 Act and
all other applicable federal or state law.
d. The Distributor will bear the cost of (i) printing and distributing
any Prospectus (including any supplement thereto) to persons who are not
shareholders, and (ii) preparing, printing and distributing any literature,
advertisement or material which 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 Company 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 Company's Funds.
e. The Company shall have the right to suspend the sale of shares at
any time in response to conditions in the securities markets or otherwise, and
to suspend the redemption of shares of any Fund at any time permitted by the
1940 Act or the rules and regulations of the Commission ("Rules").
f. The Company reserves the right to reject any order for shares but
will not do so arbitrarily, or without reasonable cause.
3. 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 Company
in connection with the matters to which this Agreement relates, except a loss
resulting from willful misfeasance, bad faith or gross negligence on its part in
the performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement.
-2-
4. Proprietary and Confidential Information. The Distributor agrees on
----------------------------------------
behalf of itself and its employees to treat confidentially and as proprietary
information of the Company all records and other information relative to the
Company and its Funds and prior, present or potential shareholders, and not to
use such records and information for any purpose other than performance of its
responsibilities and duties hereunder, except after prior notification to and
approval in writing by the Company, 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 Company.
5. Indemnification.
---------------
a. The Company represents and warrants to the Distributor that the
Registration Statement contains, and that the Prospectuses at all times will
contain, all statements required by the 1933 Act and the Rules of the
Commission, will in all material respects conform to the applicable requirements
of the 1933 Act and the Rules and will 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 5 shall apply to statements or omissions made in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of the Distributor or either of the Company's co-administrators expressly
for use in the Registration Statement or Prospectuses.
b. The Company on behalf of each Fund agrees that each Fund will
indemnify, defend and hold harmless the Distributor, its several officers, and
directors, 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, its several officers,
and directors, 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 Company with respect to such Fund or are based
upon information furnished by or on behalf of the Company with respect to such
Fund 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 will
-3-
reimburse the Distributor, its several officers, and directors, 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, its
several officers, and directors, 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 Company shall not be liable in any case to the extent that such 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 such Fund in reliance upon and in conformity with written information
furnished to the Company by or on behalf of the Distributor or either of the
Company's coadministrators specifically for inclusion therein or arising out of
the failure of the Distributor to deliver a current Prospectus.
c. The Company on behalf of each Fund shall not indemnify any person
pursuant to this Section 5 unless the court or other body before which the
proceeding was brought has rendered a final decision on the merits that such
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 such person was not liable by reason of
disabling conduct has been made by the vote of a majority of a quorum of the
trustees of the Company who are neither "interested parties" (as defined in the
▇▇▇▇ ▇▇▇) nor parties to the proceeding, or by independent legal counsel in a
written opinion.
d. The Distributor will indemnify and hold harmless the Company and
each of its Funds and its several officers and trustees, and any person who
controls the Company 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 them 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
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 Company or any of its several officers
and trustees by or on behalf of the Distributor or either of the Company's co-
administrators specifically for inclusion therein, and will reimburse the
-4-
Company and its several officers, trustees and such controlling persons for any
legal or other expenses reasonably incurred by any of them in investigating,
defending or preparing to defend any such action, proceeding or claim.
e. The obligations of each Fund under this Section 5 shall be the
several (and not the joint or joint and several) obligation of each Fund.
6. 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 until March 31, 2000. Thereafter,
if not terminated, this Agreement shall continue automatically for successive
terms of one year, provided that such continuance is specifically approved at
least annually (a) by a vote of a majority of those members of the Company's
Board of Trustees 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 approval, and (b) by the Company's Board of Trustees or by vote of a
"majority of the outstanding voting securities" of the Company; provided,
--------
however, that this Agreement may be terminated by the Company at any time,
-------
without the payment of any penalty, by vote of a majority of the entire Board of
Trustees or by a vote of a "majority of the outstanding voting securities" of
the Company on 60- days' written notice to the Distributor, or by the
Distributor at any time, without the payment of any penalty, on 90-days' written
notice to the Company. This Agreement will automatically and immediately
terminate in the event of its "assignment." (As used in this Agreement, the
terms "majority of the outstanding voting securities," "interested person" and
"assignment" shall have the same meanings as such terms have in the 1940 Act.)
7. 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 ▇▇▇▇▇ against which an enforcement of the change, waiver,
discharge or termination is sought.
8. Notices. Notices of any kind to be given to the Company hereunder
-------
by the Distributor shall be in writing and shall be duly given if mailed or
delivered to the Company at Bellevue Park Corporate Center, ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President,
with a copy to One ▇▇▇▇▇ Square, 18th and Cherry Streets, Philadelphia
Pennsylvania 19103- 6996, Attention: W. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, III, Secretary, or at
such other address or to such individual as shall be so specified by the Company
to the Distributor. Notices of any kind to be given to the Distributor hereunder
by the Company shall be in writing and shall be duly given if mailed or
delivered to Provident Distributors, Inc., Four Falls ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention:
-5-
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ or at such other address or to such other individual as
shall be so specified by the Distributor to the Company.
9. 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.
10. 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.
PROVIDENT INSTITUTIONAL FUNDS
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
PROVIDENT DISTRIBUTORS, INC.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President
-6-
APPENDIX A
to the
DISTRIBUTION AGREEMENT
between
Provident Institutional Funds
and
Provident Distributors, Inc.
--------------------------------------------------------------------------------
TempFund
TempCash
FedFund
T-Fund
Federal Trust Fund
Treasury Trust Fund
MuniFund
MuniCash
California Money Fund
New York Money Fund
-7-