AMENDED AND RESTATED MANAGEMENT AGREEMENT between KORNITZER CAPITAL MANAGEMENT, INC. and BUFFALO FUNDS
AMENDED
AND RESTATED MANAGEMENT AGREEMENT
between
XXXXXXXXX
CAPITAL MANAGEMENT, INC.
and
THIS
AGREEMENT is made and entered into as of the 29th day of
July, 2008, as amended on the 19th day of
August, 2008, by and between BUFFALO FUNDS, a Delaware statutory trust
(hereinafter referred to as the “Trust”), on behalf of
the Buffalo Balanced Fund, Buffalo High Yield Fund, Buffalo Large Cap Fund,
Buffalo Small Cap Fund and Buffalo USA Global Fund series of the Trust (each, a
“Fund”), and XXXXXXXXX CAPITAL MANAGEMENT, INC., a corporation organized under
the laws of the State of Kansas (hereinafter referred to as the
“Manager”).
WHEREAS,
the Trust is an open-end management investment company, registered under the
Investment Company Act of 1940, as amended (the “1940 Act”), and
WHEREAS,
the Trust is authorized to create separate series of shares, with each series of
shares representing interests in a separate portfolio of investments managed
according to its own investment objective and policies, and the Trust currently
consists of several series, including the Fund, and
WHEREAS,
the Manager is registered as an investment adviser under the Investment Advisers
Act of 1940, as amended, and is engaged in the business of providing investment
advice and management services to registered investment companies and other
clients as an independent contractor, and
WHEREAS,
the Trust desires to retain the Manager to render investment management and
other services with respect to the Fund, and the Manager is willing to render
such services on the following terms and conditions.
NOW,
THEREFORE, in consideration of the mutual promises herein contained, and other
good and valuable consideration, receipt of which is hereby acknowledged, it is
mutually agreed and contracted by and between the parties hereto
that:
1. DUTIES
The
Trust, on behalf of the Fund, hereby employs the Manager, for the period set
forth in Paragraph 5 hereof, and on the terms set forth herein, to render
investment advice and management services to the Fund, subject to the
supervision and direction of the Board of Trustees of the Trust. The
Manager hereby accepts such employment and agrees, during such period, to render
the services and assume the obligations herein set forth, for the compensation
herein provided. The Manager shall, unless otherwise expressly
provided and authorized, have no authority to act for or represent the Trust or
the Fund in any way, or in any other way be deemed an agent of the Trust or
Fund.
The
Manager shall furnish the Fund investment management and administrative
services. Investment management services shall include analysis,
research and portfolio recommendations consistent with the Fund’s objectives and
policies. Subject to the supervision of the Trust’s Board of
Trustees, the Manager is authorized to make all determinations, without prior
consultation with the Trust, as to which securities and other assets of the Fund
will be acquired, held, disposed of or loaned, and shall take steps necessary to
implement the same. Such determination and services shall also
include determining the manner in which voting rights, rights to consent to
corporate action, and any other rights pertaining to the Fund’s securities shall
be exercised. The Manager shall render regular periodic reports to
the Trust’s Board of Trustees concerning the Fund’s investment
activities. In connection with the placement of orders for the
execution of the Fund’s transactions, the Manager shall create and maintain all
necessary brokerage records of the Fund in accordance with all applicable laws,
rules and regulations.
The
Manager will provide to the Trust (or its agent) records concerning the
Manager’s activities which the Trust is required to maintain, and to render
regular reports to the Trust’s officers and Trustees concerning the Manager’s
performance of the foregoing responsibilities.
Administrative
services shall include the services and compensation of such members of the
Manager’s organization as shall be duly elected officers and/or Trustees of the
Trust and such other personnel as shall be necessary to carry out its normal
operations; fees of the independent Trustees, the custodian (except for the
additional cost of maintaining custody of assets in foreign jurisdictions, in
excess of domestic custody costs), the independent public accountant and legal
counsel (but not legal and audit fees and other costs in contemplation of or
arising out of litigation or administrative actions to which the Trust, its
officers or Trustees are a party or incurred in anticipation of becoming a
party); rent; the cost of a transfer and dividend disbursing agent or similar
in-house services; bookkeeping; accounting; and all other clerical and
administrative functions as may be reasonable and necessary to maintain the
Fund’s records and for it to operate as an open-end management investment
company. Exclusive of the management fee, the Fund shall bear the
cost of any interest, taxes, dues, fees and other charges of governments and
their agencies, including the cost of qualifying the Fund’s shares for sale in
any jurisdiction, brokerage commissions, additional cost of maintaining custody
of assets in foreign jurisdictions, in excess of domestic custody costs or any
other expenses incurred by it which are not assumed herein by the
Manager.
All
property, equipment and information used by the Manager in the management and
administration of the Fund shall belong to the Manager. Should the
management and administrative relationship between the Trust and the Manager
terminate, the Trust shall be entitled to, and the Manager shall provide the
Trust, a copy of all information and records in the Manager’s files necessary
for the Trust to continue the functions related to the Fund, which shall include
computer systems and programs in use as of the date of such termination; but
nothing herein shall prohibit thereafter the use of such information, systems or
programs by the Manager, so long as such does not unfairly interfere with the
continued operation of the Trust or the Fund.
2. COMPENSATION
OF MANAGER
As
compensation for the services to be rendered by the Manager under the provisions
of this Agreement, the Trust agrees to pay the Manager a management fee computed
at the annual rate of 1.00% of the average daily net assets of the
Fund. Such compensation shall be paid to the Manager semi-monthly and
shall be calculated by applying a daily rate to the assets of the Fund, based on
the annual percentage rate described above.
The Manager may
voluntarily or contractually agree to waive any portion of the
compensation due to the Manager pursuant to this Agreement and may similarly
agree to make payments to limit the overall operating expenses of the
Trust. Unless otherwise agreed, any such reduction or payment shall
be applicable only to such specific reduction or payment and shall not
constitute an agreement to reduce any future compensation or reimbursement due
to the Manager hereunder or to continue future payments. Any such
reduction will be agreed upon prior to accrual of the related expense or fee and
will be estimated daily. Any fee voluntarily reduced by the Manager
and any expense paid by the Manager voluntarily or pursuant to an agreed expense
limitation may be reimbursed by the Fund to the Manager in the first, second, or
third (or any combination thereof) year next succeeding the year of the
reduction or payment to the extent permitted by applicable law if the aggregate
expenses for the next succeeding fiscal year, second fiscal year or third
succeeding fiscal year do not exceed any limitation in effect at the
time the fee was waived or the expense was reimbursed.
3. STATUS
OF MANAGER
It is
understood and agreed that the services to be rendered by the Manager to the
Fund under the provisions of the Agreement are not to be deemed exclusive, and
the Manager shall be free to render similar or different services to others so
long as its ability to render the services provided for in this Agreement shall
not be impaired thereby.
It is
further understood and agreed that, to the extent that the purchase or sale of
securities or other investments of any issuer may be deemed by the Manager to be
suitable for two or more accounts managed by the Manager, the available
securities or investments shall be allocated in a manner that is equitable to
each account. It is recognized that, in some cases, this may
adversely affect the price paid or received by the Fund or the size or position
obtainable for or disposed by the Fund.
4. PERMISSIBLE
INTERESTS
It is
understood and agreed that the Trustees, officers, agents, employees of the
Trust and shareholders of the Fund may be interested in the Manager as owners,
employees, agents or otherwise, and that owners, employees and agents of the
Manager may be interested in the Trust or Fund as shareholders or
otherwise. It is understood and agreed that shareholders, officers,
Trustees and other personnel of the Manager are and may continue to be officers
and Trustees of the Trust, but that they receive no remuneration from the Trust
solely for acting in those capacities. All such interests shall be
fully disclosed between the parties as required by law.
5. DURATION
AND TERMINATION
This
Agreement shall become effective as to the Fund, if it is approved by the
Trust’s Board of Trustees, including a majority of the Trustees who are not
parties to the Agreement or interested persons of any such party (“Independent
Trustees”), and by the vote of a majority of the outstanding voting securities
of the Fund as contemplated under the 1940 Act. It shall remain in
force for an initial two-year term and thereafter may be renewed for successive
periods not exceeding one year only so long as such renewal and continuance is
specifically approved at least annually by the Board of Trustees or by vote of a
majority of the outstanding voting securities of the Fund as contemplated under
the 1940 Act, and only if the terms and the renewal of this Agreement have been
approved by a vote of a majority of the Trustees of the Trust, including a
majority of the Independent Trustees, cast in person at a meeting called for the
purpose of voting on such approval. It shall be the duty of the
Trustees of the Trust to request and evaluate, and the duty of the Manager to
furnish, such information as may reasonably be necessary to evaluate the terms
of this Agreement and any amendment thereto.
This
Agreement may be amended by mutual consent of the parties only if such amendment
is specifically approved (1) by a majority of the Trustees of the Trust,
including a majority of the Independent Trustees and, (2) if required by law or
SEC rules or SEC staff interpretations, by the affirmative vote of a majority of
the outstanding voting securities of the Fund.
This
Agreement may be terminated at any time, without the payment of any penalty, by
the Trustees of the Trust, or by the vote of a majority of the outstanding
voting securities of the Fund as prescribed by the 1940 Act on not more than
sixty days written notice to the Manager, and it may be so terminated by the
Manager upon not less than sixty days written notice to the Trust. It
shall terminate automatically in the event of its assignment by either party
unless the parties hereby, by agreement, obtain an exemption from the Securities
and Exchange Commission from the provisions of the 1940 Act pertaining to the
subject matter of this paragraph. Any notice, request or instruction
provided for herein, or for the giving of which, the occasion may arise
hereunder, shall be deemed duly given, if in writing and mailed by registered
mail, postage prepaid, addressed to the regular executive office of the Trust or
the Manager, as the case may be. As used in this Agreement, the terms
“assignment,” “majority of the outstanding voting securities” and “interested
person” shall have the meanings contained in the 1940 Act, as interpreted by the
SEC staff.
If this
Agreement is terminated prior to the end of any calendar month, the management
fee shall be prorated for the portion of any month in which this Agreement is in
effect according to the proportion which the number of calendar days, during
which the Agreement is in effect, bears to the number of calendar days in the
month, and shall be payable within 10 days after the date of
termination.
6. USE
OF BUFFALO NAME
In the
event that the Manager ceases to be the Fund’s investment manager for any
reason, the Trust will (unless the Manager otherwise agrees in writing) take all
necessary steps to cause itself and the Fund to cease using the word “Buffalo”
in its name within a reasonable period of time. It is further agreed
that the provisions of this Paragraph shall inure to the benefit of the Manager
and may be imposed by it or any successor in interest as if it or such successor
in interest were parties to this Agreement.
7. LIMITATION
OF LIABILITY OF THE MANAGER
The
Manager shall not be liable for any error in judgment or mistake at law for any
loss suffered by the Fund in connection with any matters to which this Agreement
relates, except that nothing herein contained shall be construed to protect the
Manager against any liability by reason of willful misfeasance, bad faith or
gross negligence in the performance of duties or by reckless disregard of its
obligations or duties under this Agreement.
8. GOVERNING
LAW
This
Agreement shall be governed by the laws of the State of Delaware, without regard
to conflict of law principles; provided, however that nothing herein shall be
construed as being inconsistent with the 1940 Act.
9. NOTICE
Any
notice, advice or report to be given pursuant to this Agreement shall be deemed
sufficient if delivered or mailed by registered, certified or overnight mail,
postage prepaid addressed by the party giving notice to the other party at the
last address furnished by the other party:
To the
Advisor
at: Xxxxxxxxx
Capital Management, Inc.
0000 Xxxx 00 Xxxxx
Xxxxxxx Xxxxxxx,
XX 00000
To the
Trust
at: Buffalo
Funds
c/o Kornitzer Capital Management,
Inc.
0000 Xxxx 00 Xxxxx
Xxxxxxx Xxxxxxx,
XX 00000
10. SEVERABILITY
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.
11. ENTIRE
AGREEMENT
This
Agreement embodies the entire agreement and understanding between the parties
hereto, and supersedes all prior agreements and understandings relating to this
Agreement’s subject matter. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but
such counterparts, together, shall constitute only one instrument.
A copy of
the Certificate of Trust of the Trust is on file with the Secretary of State of
Delaware, and notice is hereby given that this instrument is executed on behalf
of the Trustees of the Trust as Trustees, and is not binding upon any of the
Trustees, officers, or shareholders of the Trust individually but binding only
upon the assets and property of the Trust.
No series
of the Trust shall be liable for the obligations of any other series of the
Trust. Without limiting the generality of the foregoing, the Manager
shall look only to the assets of a particular Fund for payment of fees for
services rendered to that Fund.
Where the
effect of a requirement of the 1940 Act reflected in any provision of this
Agreement is altered by a rule, regulation or order of the U.S. Securities and
Exchange Commission, whether of special or general application, such provision
shall be deemed to incorporate the effect of such rule, regulation or
order.
IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be executed by their respective
officers on the day and year first above written.
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By:
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/s/ Xxxx X.
Xxxxxxx
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Xxxx
X. Xxxxxxx
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President
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XXXXXXXXX
CAPITAL MANAGEMENT, INC.
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By:
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/s/ Xxxxx
Xxxxxx
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Xxxxx
Xxxxxx
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Chief
Financial Officer
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