THE BUTTONWOOD FUNDS, INC.
DEALER AGREEMENT
February 14, 2000
Ladies and Gentlemen:
Xxxxxx Xxxxxxxxxx Xxxxx LLC ("Xxxxxx"), a Delaware limited liability
company, serves as Distributor (the "Distributor") of The Buttonwood Funds, Inc.
(collectively, the "Funds", individually, a "Fund"). The Funds are open-end
investment companies (or series thereof) registered under the Investment Company
Act of 1940, as amended (the "Investment Company Act"). The Funds offer their
shares ("Shares") to the public in accordance with the terms and conditions
contained in the Prospectus of each Fund. The term "Prospectus" as used herein
refers to each prospectus on file with the Securities and Exchange Commission
which is part of the registration statement of each Fund under the Securities
Act of 1933 (the "Securities Act"). In connection with the foregoing Xxxxxx,
Xxxxxxxx & Xxxx, Inc. ("HTK") may serve as a participating dealer (and,
therefore, accept orders for the purchase or redemption of Shares, respond to
shareholder inquiries and perform other related functions) on the following
terms and conditions:
1. Participating Dealer. HTK is hereby designated a Participating Dealer
and as such is authorized (i) to accept orders for the purchase of Shares and to
transmit to the Funds such orders and the payment made therefore, (ii) to accept
orders for the redemption of Shares and to transmit to the Funds such orders and
all additional material, including any certificates for Shares, as may be
required to complete the redemption and (iii) to assist shareholders with the
foregoing and other matters relating to their investments in each Fund, in each
case subject to the terms and conditions set forth in the Prospectus of each
Fund. HTK is to review each Share purchase or redemption order submitted for
completeness and accuracy. HTK further agrees to undertake from time to time
certain shareholder servicing activities for customers who have purchased Shares
and who use HTK facilities to communicate with the Funds or to effect
redemptions or additional purchases of the Shares.
2. Limitation of Authority. No person is authorized to make any
representations concerning the Funds or the Shares except those contained in the
Prospectus of each Fund and in such printed information as the Distributor may
subsequently prepare. No person is authorized to distribute any sales material
relating to any Fund without the prior written approval of the Distributor.
3. Compensation. As compensation for such services, the Distributor will
pay or cause to pay HTK annual fee of up to 0.65% of the Funds" average daily
net asset value of all outstanding Shares sold by HTK. The Funds shall have no
direct responsibility for any compensation.
4. Prospectus and Reports. HTK agrees to comply with the provisions
contained in the Securities Act governing the distribution of prospectuses to
persons to whom Shares are offered. HTK further agrees to deliver, upon the
Distributor"s request, copies of any amended Prospectus of the relevant Fund to
purchasers whose Shares are being held by HTK as record owner and to deliver to
such persons copies of the annual and interim reports and proxy solicitation
materials of the Funds. The Distributor agrees to furnish to HTK as many copies
of each Prospectus, annual and interim reports and proxy solicitation materials
as HTK may reasonably request.
5. Qualification to Act. HTK represents that it is a member in good
standing of National Association of Securities Dealers, Inc. (the "NASD"). Its
expulsion or suspension from the NASD will automatically terminate this
Agreement on the effective date of such expulsion or suspension. HTK agrees that
it will not offer Shares to persons in any jurisdiction in which it may not
lawfully make such offer due to the fact that it has not registered under, or
are not exempt from, the applicable registration or licensing requirements of
such jurisdiction. HTK agrees that in performing the services under this
Agreement, it at all times, will comply with the Conduct Rules (formerly the
Rules of Fair Practice) of the NASD, including, without limitation, the
provisions of Rule 2830 (formerly Section 26) of such Rules. HTK agrees that it
will not combine customer orders to reach breakpoints in commission for any
purposes whatsoever unless authorized by the then current Prospectus in respect
of a particular class of Shares or by the Distributor in writing. HTK also
agrees that it will place orders immediately upon its receipt and will not
withhold any order so as to profit therefrom. In determining the amount payable
to HTK hereunder, the Distributor reserves the right to exclude any sales which
it reasonably determines are not made in accordance with the terms of the
relevant prospectus and provisions of the Agreement.
6. Blue Sky. The Funds have registered an indefinite number of Shares under
the Securities Act. The Funds intend to make appropriate notice filings in
certain states where such filing is required. The Distributor will inform HTK as
to the states or other jurisdictions in which it believes the Shares are
eligible for sale under the respective securities laws of such states. HTK
agrees that it will offer Shares to its customers only in those states where
such Shares are eligible to be sold. The Distributor assumes no responsibility
or obligation as to HTK"s right to sell Shares in any jurisdiction.
7. Authority of Fund. Each Fund shall have full authority to take such
action as it deems advisable in respect of all matters pertaining to the
offering of its Shares, including the right not to accept any order for the
purchase of Shares.
8. Record Keeping. HTK will (i) maintain all records required by law to be
kept by it relating to transactions in Shares and, upon request by any Fund,
promptly make such of these records available to the Fund as the Fund may
reasonably request in connection with its operations and (ii) promptly notify
the Fund if it experiences any difficulty in maintaining the records described
in the foregoing clauses in an accurate and complete manner.
9. Liability. The Distributor shall be under no liability to HTK except for
lack of good faith and for obligations expressly assumed by it hereunder. In
carrying out its obligations, HTK agrees to act in good faith and without
negligence. Nothing contained in this Agreement is intended to operate as a
waiver by the Distributor or HTK of compliance with any provisions of the
Investment Company Act, the Securities Act, the Securities Exchange Act of 1934,
as amended, or the rules and regulations promulgated by the Securities and
Exchange Commission thereunder.
10. Termination. This Agreement may be terminated by either party, without
penalty, upon ten days" notice to the other party and shall automatically
terminate in the event of its assignment, as defined in the Investment Company
Act. This Agreement may also be terminated at any time for any particular Fund
without penalty by the vote of a majority of the members of the Board of
Directors of such Fund who are not "interested persons" (as such phrase is
defined in the Investment Company Act) and who have no direct or indirect
financial interest in the operation of the Distribution Agreement between such
Fund and the Distributor or by the vote of a majority of the outstanding voting
securities of the Fund.
11. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be binding as of the date first written above,
and all of which shall constitute one and the same instrument. Each such copy
shall be deemed an original, and it shall not be necessary in making proof of
this Agreement to produce or account for more than one such counterpart.
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12. Communications. All communications to the Distributor should be sent to
the address listed below. Any notice to HTK shall be duly given if mailed or
telegraphed to the address specified below.
Please sign and return to the Distributor both copies of this Agreement to:
Xxxxxx Xxxxxxxxxx Xxxxx LLC
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx
By: Xxxxxx Xxxxxxxxxx Xxxxx LLC
_______________________________
_______________________________
Printed Name
_______________________________
Title
Confirmed and accepted:
Firm Name:_______________________________________________________________
By:______________________________________________________________________
Signature
_________________________________________________________________________
Printed Name and Title
Date:____________________________________________________________________
Address:_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
Clears Through:__________________________________________________________
Phone No.:_______________________________________________________________
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