MANAGEMENT AGREEMENT between KORNITZER CAPITAL MANAGEMENT, INC. and BUFFALO FUNDS
between
XXXXXXXXX
CAPITAL MANAGEMENT, INC.
and
THIS
AGREEMENT is made and entered into as of the 18th day of December, 2006, by
and between BUFFALO FUNDS, a Delaware statutory trust (hereinafter referred
to
as the “Trust”), on
behalf
of the Buffalo Jayhawk China Fund series of the Trust (the “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
may hire
one or more sub-advisors to carry out the investment program of the Fund,
subject to the approval of the Trust’s Board of Trustees and (except as
otherwise permitted under the terms of any exemptive relief obtained by the
Manager and/or Trust from the U.S. Securities and Exchange Commission, or by
rule or regulation) a majority of the outstanding voting securities of the
Fund.
To the extent that the Advisor does hire any sub-advisor, it will thereafter
continuously review, supervise and (where appropriate) administer the investment
program of the Fund.
The
Manager will provide, or direct any sub-advisor to provide, to the Trust (or
its
agent) records concerning the Manager’s and sub-advisor(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 and sub-advisor(s)’ performance
of the foregoing responsibilities. The retention of a sub-advisor by the Manager
shall not relieve the Manager of its responsibilities under this
Agreement.
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,
when
compared to 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, when compared to 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
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 1.50% 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. Any
advisory fees that may be charged by sub-advisors hired by the Manager are
the
sole obligation of the Manager, and not of the Trust.
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 to which the Manager has agreed.
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.
3
5. DURATION
AND TERMINATION
This
Agreement shall become effective as to the Fund, on the date first written
above, provided it has been 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.
4
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
5
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 as of the day and year first above written.
|
By: /s/
Xxxx X. Xxxxxxx
|
|
Xxxx
X. Xxxxxxx
|
|
ATTEST:
|
|
|
|
XXXXXXXXX
CAPITAL MANAGEMENT, INC.
|
|
By: /s/
Xxxx X. Xxxxxxxxx
|
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Xxxx X. Xxxxxxxxx
|
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ATTEST:
|
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6
