Exhibit 99.(e)
DISTRIBUTION AGREEMENT
AGREEMENT made this 1st day of May, 2005 by and between SKYLINE FUNDS, a
Massachusetts business trust (the "Trust"), and MANAGERS DISTRIBUTORS, INC., a
Delaware corporation (the "Distributor").
WITNESSETH:
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as an open-end, management investment company and
it is in the interest of the Trust to offer shares of the Skyline Special
Equities Portfolio, a series of the Trust, and such other series as may be
created from time to time (each a "Fund," and collectively, the "Funds") for
sale as described in the Prospectus and Statement of Additional Information of
the Trust; and
WHEREAS, the Distributor is registered with the Securities and Exchange
Commission (the "SEC") as a broker-dealer under the Securities Act of 1934, and
is a member of the National Association of Securities Dealers, Inc. (the
"NASD"); and
WHEREAS, the Trust and the Distributor wish to enter into an agreement with
each other with respect to the offering of the Trust's shares in order to
promote the growth of the Trust and facilitate distribution of its shares;
NOW, THEREFORE, it is hereby mutually agreed as follows:
1. (a) The Trust hereby appoints Distributor as an underwriter of the
shares of beneficial interest of the Trust (the "Shares"), as an independent
contractor upon the terms and conditions hereinafter set forth. Except as the
Trust may from time to time agree, Distributor will act as agent for the Trust
and not as principal. The Distributor shall be a representative of the Trust to
act as the principal underwriter and distributor of Shares of the Trust to sell
and arrange for the sale of the Shares covered by the Trust's registration
statement in effect under the Securities Act of 1933 (the "1933 Act") and the
1940 Act (the "Registration Statement").
(b) The rights granted to the Distributor shall be nonexclusive
in that the Trust reserves the right to sell Shares to investors on application
received and accepted by the Trust. The Trust reserves the right to suspend
sales and the Distributor's authority to process orders for Shares on behalf of
the Trust if, in the judgment of the Trust, it is in the best interests of the
Trust to do so. Suspension will continue for such period as may be determined by
the Trust.
2. Distributor will use its best efforts in connection with the
distribution of the Shares, to promote the distribution of the Shares, and may
obtain orders from brokers, dealers, or other persons for sales of the Shares.
The Distributor may enter into agreements, in form and substance satisfactory to
the Trust, with dealers and other persons selected by the Distributor ("Selected
Dealers"), providing for the sale to such Selected Dealers and resale by them to
purchasers of Shares at the net asset value per share. No dealer, broker, or
other person shall have any authority
to act as agent for the Trust; such dealer, broker, or other person shall act
only as dealers for their own accounts or as agents for their customers.
3. Sales of Shares by the Distributor shall be made at the net asset
value per share determined in the manner set forth in the current Prospectus
and/or Statement of Additional Information of the Trust, as amended or
supplemented, at the time of the acceptance of the order for Shares of a Fund by
the Trust or an authorized agent of the Trust. It is understood and agreed that
the applicable public offering price of Shares is currently net asset value. All
orders shall be subject to acceptance by the Trust, and the Trust reserves the
right in its sole discretion to reject any order received. The Trust shall not
be liable to the Distributor or any other person for failure to accept any
order.
4. On all sales of Shares, the Trust shall receive the current net asset
value. If sales charges are described in the then-current Prospectus and
Statement of Additional Information of the Trust, as amended or supplemented,
the Distributor shall be entitled to receive such sales charges. The Distributor
may reallow all or a part of any such sales charges to such brokers, dealers, or
other persons as Distributor may determine. In the event that a sales charge is
in effect and Shares of a Fund are redeemed or repurchased by the Trust or the
Distributor as agent for the Trust, within seven business days after
confirmation by the Distributor of the original purchase order, the Distributor
shall pay to the Trust, for the account of that Fund, the Distributor's portion
of the sales load paid on such Shares. In such case, the Distributor shall
require the dealer or other person that sold the Shares so redeemed or
repurchased to refund to the Distributor the full discount allowed to the dealer
or other person on the sale and, upon the receipt of such discount, the
Distributor shall pay the same to the Trust, for the account of the appropriate
Fund.
5. The Trust agrees to supply to the Distributor, either directly or
indirectly, promptly after the time or times at which net asset value is
determined, on each day on which the New York Stock Exchange is open for
business and on such other days as the Trustees of the Trust may from time to
time determine (each such day being hereinafter called a "business day"), a
confirmation of the computation of the net asset value of each Fund of the Trust
having been determined in the manner set forth in the then-current Prospectus
and Statement of Additional Information of the Trust, as amended or
supplemented. Each determination of net asset value shall take effect as of the
time or times on each business day as set forth in the then-current Prospectus
of the Trust, as amended or supplemented, and shall prevail until the time as of
which the next determination is made. The Distributor may reject any order for
Shares. The Trust, or any agent of the Trust designated in writing by the trust
shall be promptly advised of all purchase orders for Shares received by the
Distributor. Any order may be rejected by the Trust (or its agent). The Trust
(or its agent) will confirm orders upon their receipt and will make appropriate
book entries. The Distributor agrees to cause payment to be delivered promptly
to the Trust (or its agent).
6. (a) All sales literature and advertisements used by the Distributor in
connection with sales of Shares shall be subject to approval by the Trust. The
Trust authorizes the Distributor, in connection with the sale or arranging for
the sale of Shares, to provide such information and to make such statements or
representations as are contained in the Trust's then-current Prospectus and
Statement of Additional information, as amended or supplemented, in such
financial and other statements which are furnished to the Distributor pursuant
to paragraph 6(c) or as otherwise may be prepared by the Distributor and
properly included in sales literature or advertisements in accordance with the
provisions of the 1933 Act, the 1940 Act and applicable rules of the NASD.
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(b) The Distributor shall review and file all proposed advertisements
and sales literature with appropriate regulators, if required, and consult with
the Trust regarding any comments provided by regulators with respect to such
materials. The Trust shall not use any advertisements or other sales materials
that have not been (i) submitted to the Distributor for its review and approval,
and (ii) filed by the Distributor, if required, with the appropriate regulators.
(c) The Trust shall keep the Distributor fully informed with regard to
its affairs, shall make available to the Distributor, if requested by the
Distributor, a copy of all financial statements of the Trust and a signed copy
of each report prepared for the Trust by its independent auditors, and shall
cooperate fully in the efforts of the Distributor to sell the Shares and in the
performance by the Distributor of all its duties under this Agreement. Copies of
the then-current Prospectus and Statement of Additional Information and all
amendments or supplements thereto will be supplied by the Trust to the
Distributor in reasonable quantities upon reasonable request.
7. Distributor agrees to comply with the Rules of Fair Practice of the
NASD.
8. (a) Any of the outstanding shares may be tendered for redemption at
any time, and the Trust agrees to redeem shares so tendered in accordance with
its Declaration of Trust as amended from time to time, and in accordance with
the applicable provisions of the Prospectus. The price to be paid to redeem or
repurchase shares shall be equal to the net asset value determined as set forth
in the Prospectus. All payments by the Trust hereunder shall be made in the
manner set forth in Paragraph (b) below.
(b) The Trust shall pay the total amount of the redemption price as
defined in the above paragraph pursuant to the instructions of the Distributor
on or before the seventh day subsequent to its having received the notice of
redemption in proper form.
(c) Redemption of shares or payment may be suspended at times when
the New York Stock Exchange is closed for other than customary weekends and
holidays, when trading on said Exchange is restricted, when an emergency exists
as a result of which disposal by the Trust of securities owned by it is not
reasonably practicable or it is not reasonably practicable for the Trust fairly
to determine the value of its net assets, or during any other period when the
Securities and Exchange Commission, by order, so permits.
9. The Trust has delivered to the Distributor a copy of the Trust's
Declaration of Trust as currently in effect and agrees to deliver to the
Distributor any amendments thereto promptly upon the filing thereof with the
Office of the Secretary of State of The Commonwealth of Massachusetts.
10. The Trust represents and warrants that its Registration Statement,
post-effective amendments, Prospectus and Statement of Additional Information
(excluding statements relating to the Distributor and the services it provides
that are based upon information furnished by the Distributor expressly for
inclusion therein) shall not contain any untrue statement of material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, and that all statements or
information furnished to the Distributor, pursuant to Section 6(b) hereof, shall
be true and correct in all material respects.
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11. The Trust agrees to indemnify and hold harmless the Distributor, its
officers, and each person, if any, who controls the Distributor within the
meaning of Section 15 of the 1933 Act, against any losses, claims, damages,
liabilities and expenses (including the cost of any reasonable legal fees
incurred in connection therewith) which the Distributor, its officers, 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 or Statement of
Additional information (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 or
Statement of Additional Information 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
and in conformity with information furnished to the Trust by the Distributor for
use in the Trust's Registration Statement, Prospectus or Statement of Additional
information (including amendments and supplements thereto), such indemnification
is not applicable. In no case shall the Trust indemnify the Distributor, its
officers or its controlling person as to any amounts incurred for any liability
arising out of or based upon any actions for which the Distributor, its
officers, or any controlling person would otherwise be subject to liability by
reason of willful misfeasance, bad faith, or gross negligence in the performance
of its duties or by reason of the reckless disregard of its obligations and
duties under this Agreement.
12. The Distributor agrees to indemnify and hold harmless the Trust,
its officers and Trustees and each person, if any, who controls the Trust within
the meaning of Section 15 of the 1933 Act against any losses, 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 arising out of (i) 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 or Statement of Additional Information (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
for use therein, (ii) the Distributor's willful misfeasance, bad faith or gross
negligence in performance of its duties under this Agreement or (iii) the
Distributor's material breach of its obligations under this Agreement.
13. The Trust shall bear the expense of preparing, printing and
distributing advertising and sales literature, and of preparing, printing and
distributing Prospectuses and Statements of Additional information in connection
with the sale or offering of the Shares pursuant to this Agreement. The Trust
shall bear the expense of registering Shares under the 1933 Act and the Trust
under the 1940 Act, qualifying shares for sale under the so-called "blue sky"
laws of any state, the preparation and printing of Prospectuses, Statements of
Additional information and reports required to be filed with the SEC and other
authorities, the preparation, printing and
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mailing of Prospectuses and Statements of Additional Information to shareholders
of the Trust, and the direct expenses of the issue of Shares.
14. Neither the Distributor nor any of its affiliates shall use the name
of the Trust in any publicly disseminated materials, including sales literature
in any manner without the prior written consent of the Trust (which shall not be
unreasonably withheld); provided, however, that the Trust hereby approves all
lawful uses of its name in any required regulatory filings of the Distributor
which merely refer in accurate terms to the appointment of the Distributor
hereunder, or which are required by the SEC, NASD, or any state securities
authority.
15. The Distributor agrees to maintain liability insurance coverages
which are, in scope and amount, consistent with coverages customary for
distribution activities relating to the Trust. The Distributor shall notify the
Trust upon receipt of any notice of material, adverse change in the terms or
provisions of its insurance coverage. Such notification shall include the date
of change and the reason or reasons therefor. The Distributor shall notify the
Trust of any material claims against it, whether or not covered by insurance,
and shall notify the Trust from time to time as may be appropriate of the total
outstanding claims made by it under its insurance coverage.
16. The Distributor agrees to maintain an anti-money laundering
program in compliance with Title III of the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001 (the "USA Patriot Act") and all applicable laws and regulations promulgated
thereunder. The Distributor confirms that, as soon as possible, following the
request from the Trust, the Distributor will supply the Trust with copies of the
Distributor's anti-money laundering policy and procedures, and such other
relevant certifications and representations regarding such policy and procedures
as the Trust may reasonably request from time to time.
17. The Distributor, its officers, directors, employees and agents will
treat confidentially and as proprietary information all of the records and other
information relating to the Trust and to prior or present shareholders or to
those persons or entities who respond to the Distributor's inquiries concerning
investment in the Funds, and will not use such records and information for any
purposes other than performance of its responsibilities and duties hereunder. If
the Distributor is requested or required by, but not limited to, depositions,
interrogatories, requests for information or documents, subpoena, civil
investigation, demand or other action, proceeding or process or as otherwise
required by law, statute, regulation, writ, decree or the like to disclose such
information, the Distributor will provide the Trust with prompt written notice
of any such request or requirement so that the Trust may seek an appropriate
protective order or other appropriate remedy and/or waive compliance with this
provision. If such order or other remedy is not sought, or obtained, or waiver
not received within a reasonable period following such notice, then the
Distributor may without liability hereunder, disclose to the person, entity or
agency requesting or requiring the information, that portion of the information
that is legally required in the reasonable opinion of the Distributor's counsel.
18. The Distributor represents that it requires broker-dealers to
represent they will sell shares of the Funds in compliance with all laws and any
rules, regulations, judgments, orders, decrees or stipulations thereunder to
which the offer of the Shares may be subject, including, as applicable, the (i)
1933 Act, (ii) the Securities Exchange Act of 1934, (iii) the 1940 Act, (iv) the
requirements of the NASD, (v) banking laws, rules and regulations, (vi)
fiduciary duties under
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federal and state law and (vii) the laws, rules and regulations of the
jurisdictions in which they sell, directly or indirectly, any Shares of the
Funds. Distributor further represents that it has systems, procedures and/or
policies in place designed to ensure that it is complying with all terms of this
Agreement, the Prospectus requirements and all relevant rules and regulations,
as applicable to the Distributor, regarding the handling of mutual fund orders
on a timely basis.
19. (a) This Agreement shall become effective on the date hereof and
shall remain in full force and effect until March __, 2006, and may be continued
from year to year thereafter; provided, that such continuance shall be
specifically approved no less frequently than annually by the Trustees of the
Trust or by a majority of the outstanding voting securities of the Trust, and in
either case, also by a majority of the Trustees who are not interested persons
of the Trust or the Distributor ("Disinterested Trustees"). If such continuance
is not approved, the Agreement shall terminate upon the date specified by the
Trustees in written notice to the Distributor, which shall be no more an 60 days
after the date upon which such notice of non-renewal is delivered personally or
mailed registered mail, postage prepaid, to the Distributor. This Agreement may
be amended with the approval of the Trustees or a majority of the outstanding
voting securities of the Trust, provided that in either case, such amendment
shall also be approved by a majority of the Disinterested Trustees.
(b) If the Trustees determine in good faith that there is reasonable
cause to believe that the Distributor is violating applicable federal or state
law in connection with the distribution of shares of the Trust and, after
written notice to Distributor of such violation which Distributor fails to cure
to the satisfaction of the Trustees within 10 days of receipt of such notice,
the Trustees determine that the continuation in effect of this Agreement will
result in further such violations, to the detriment of the Trust or its
shareholders, then this Agreement may be terminated by the Trust without payment
of any penalty. Such termination may be effected by written notice delivered
personally or mailed registered mail, postage prepaid, to the Distributor.
(c) This Agreement shall automatically terminate in the event of its
assignment.
(d) Any question of interpretation of any term or provision of this
Agreement having a counterpart in or otherwise derived from a term or provision
of the 1940 Act shall be resolved by reference to such term or provision of the
1940 Act and to interpretations thereof, if any, by the United States courts or,
in the absence of any controlling decision of any such court, by rules,
regulations or orders of the SEC validly issued pursuant to the 1940 Act.
Specifically, the terms "interested persons," "assignment" and "vote of a
majority of the outstanding voting securities," as used in this Agreement, shall
have the meanings assigned to them by Section 2(a) of the 1940 Act. In addition,
when the effect of a requirement of the 1940 Act reflected in any provision of
this Agreement is modified, interpreted or relaxed by a rule, regulation or
order of the SEC, whether of special or of general application, such provision
shall be deemed to incorporate the effect of such rule, regulation or order. The
Trust and the Distributor may from time to time agree on such provisions
interpreting or clarifying the provisions of this Agreement as, in their joint
opinion, are consistent with the general tenor of this Agreement and with the
specific provisions of this Paragraph 15(d). Any such interpretations or
clarifications shall be in writing signed by the parties and annexed hereto, but
no such interpretation or clarification shall be effective in contravention of
any applicable federal or state law regulations, and no such interpretation or
clarification shall be deemed to be an amendment of this Agreement.
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(e) Except insofar as the 1940 Act or other federal laws and
regulations may be controlling, this Agreement shall be governed by, and
construed and enforced in accordance with, the internal laws of the State of
Connecticut.
(f) This Agreement is made by the Trust pursuant to authority granted
by the Trustees and the obligations created hereby are not binding on any of the
Trustees or shareholders of the Trust, individually, but bind only assets
belonging to the Trust.
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IN WITNESS WHEREOF, the parties hereto have caused this agreement to
be executed by their respective officers thereunto duly authorized on the day
and year first written above.
SKYLINE FUNDS
By:
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Title:
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MANAGERS DISTRIBUTORS, INC.
By:
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Title:
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