INVESTMENT ADVISORY AGREEMENT
Between
STRALEM FUND
(on behalf of its series, Stralem III Fund)
And
STRALEM & COMPANY INCORPORATED
This agreement is made as of the 13th day of September, 2000 by and between
Stralem Fund, a Delaware business trust (the "Trust"), on behalf of Stralem III
Fund, a series of the Trust (the "Fund"), registered as an investment company
under the Investment Company Act of 1940, and Stralem & Company Incorporated, a
Delaware corporation (the "Adviser"), registered as an investment adviser under
the Investment Advisers Act of 1940 with respect to the following recital of
fact:
RECITAL
The Trust, on behalf of the Fund, intends to have the Adviser act as its
investment adviser to the Fund and provide it with investment research, advice,
supervision and management. The Adviser is willing to undertake these activities
under the terms and conditions set forth herein.
Now therefore, it is hereby agreed to by the Trust, on behalf of the Fund, and
the Adviser as follows:
1. Duties. The Adviser shall provide the Fund with such investment research,
data, advice and supervision as the Fund may consider necessary for proper
supervision of its funds. The Adviser shall act as manager and investment
adviser of the Fund and, as such, shall furnish continuously an investment
program, which will include determining what securities shall be purchased or
sold by the Fund and what portion of the assets of the Fund shall be held
uninvested, subject always to the provisions of the Trust Instrument and
By-Laws, the Fund's fundamental investment policies as in effect from time to
time, and control and review by the Board of Trustees. The Adviser shall take,
on behalf of the Fund, all actions which it deems necessary to carry into effect
the investment policies determined as provided above, and to that end the
Adviser may designate a person or persons who are to be authorized by the Fund
as the representative or representatives of the Fund, to give instructions to
the Custodian of the assets of the Fund as to deliveries of securities and
payments of cash for the account of the Fund.
2. Expenses. The expenses connected with the Fund shall be allocable
between the Fund and the Adviser as follows:
(a) The Adviser shall (i) furnish at its own expense all
administrative services, office space, equipment and administrative
and clerical personnel necessary for managing the affairs of the
Fund and (ii) provide persons satisfactory to the Board
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of Trustees to act as officers and employees of the Fund and shall
pay the salaries and wages of all officers and employees of the Fund
who are also officers and employees of the Adviser or of an
affiliated person (as defined in the Investment Company Act of 1940)
other than the Fund.
(b) All other costs and expenses not expressly assumed by the
Adviser under this Agreement, or to be paid by the Distributor of
the shares of the Fund, shall be paid by the Fund, including (i)
interest and taxes; (ii) brokerage commissions and other costs in
connection with the purchase or sale of securities; (iii) insurance
premiums for fidelity and other coverage requisite to its
operations; (iv) compensation and expenses of its directors other
than those affiliated with the Adviser; (v) legal, audit and fund
accounting expenses; (vi) custodian and shareholder servicing agent
fees and expenses; (vii) expenses incident to the issuance of its
shares against payment therefor by or on behalf of the subscribers
thereto, including printing of stock certificates; (viii) fees and
expenses incident to the registration under the Securities Act of
1933 or under any state securities laws of shares of the Fund for
public sale and fees imposed on the Fund under the Investment
Company Act of 1940; (ix) expenses of printing and mailing
prospectuses, reports and notices and proxy material to shareholders
of the Fund; (x) all other expenses incidental to holding meetings
of the Fund's shareholders; (xi) the fees or dues of the Investment
Company Institute or other trade associations; (xii) fees and
expenses in connection with registration of the Fund or
qualification of its shares under the securities laws of states and
foreign jurisdictions and (xiii) such non-recurring expenses as may
arise, including actions, suits or proceedings to which the Fund is
a party and the legal obligation which the Fund may have to
indemnify its officers and directors with respect therein.
Notwithstanding the obligation of the Fund to bear the expense of
the functions referred to in this subparagraph (b), the Adviser may
pay the salaries, including any applicable employment or payroll
taxes and other salary costs, of any officer and other personnel
carrying out such functions and the Fund shall reimburse the Adviser
therefor upon proper accounting.
(c) All of the ordinary business expenses incurred in the operations
of the Fund and the offering of its shares shall be borne by the
Fund unless specifically provided otherwise in this paragraph 2.
3. Brokerage. The Adviser shall place purchase and sale orders for portfolio
transactions of the Fund with brokers and/or dealers including, where permitted
by law, the Fund's Distributor or affiliates thereof or of the Adviser, which,
in the judgment of the Adviser, are able to execute such orders as expeditiously
as possible and at the best obtainable price. The Adviser may select Stralem &
Company Incorporated as the broker/dealer to effect all or substantially all of
the security transactions which are effected on a national securities exchange.
Purchases and sales of securities which are not listed or traded on a securities
exchange shall ordinarily be executed with primary market makers acting as
principal except when it is determined that better prices and executions may
otherwise be obtained, provided, that the Adviser may cause the Fund
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to pay a member of a securities exchange, broker or dealer an amount of
commission higher than that another member of an exchange, broker or dealer
would have charged for effecting that transaction if the Adviser determines in
good faith that such amount of commission was reasonable in relation to the
value of the brokerage and research services provided by such member, broker or
dealer, viewed in terms of that particular transaction or the Adviser's overall
responsibilities. As used herein, "brokerage and research services" shall have
the same meaning as in Section 28 (e)(3) of the Securities Exchange Act of 1934,
as such Section may be amended from time to time, and any rules or regulations
promulgated thereunder by the Securities and Exchange Commission. It is
understood that, consistent with the Adviser's fiduciary duty to the Fund, it is
the intent of the Agreement to allow the Adviser the widest discretion permitted
by law in determining the manner and means by which portfolio securities'
transactions can be affected in the best interests of the Fund.
4. Compensation.
(a) As promptly as shall be practicable after the last business day
of each "fiscal quarter" (as hereinafter defined), the Fund shall pay the
Adviser the amount equal to the sum of (i) .375 percent of the first $100
million of the "Average Net Asset Value of the Fund" (determined in accordance
with the provisions of the Trust's current registration statement) at the close
of business on the last business days of each calendar week during such fiscal
quarter, (ii) .3125 percent of the next $100 million of the average net asset
value of the Fund at the close of business on such last business days, and (iii)
..25 percent of the average net asset value of the Fund in excess of $200 million
at the close of business on such last business days (except that, if the fiscal
quarter shall be the "initial period" or the "final period" (as such terms are
hereinafter defined), such payment shall in no event exceed the product of said
sum and a fraction the numerator of which shall be the number of calendar days
constituting the initial period or the final period, as the case may be, and the
denominator of which shall be 90)."
(b) As used herein:
(i) the term "fiscal quarter" shall mean the initial period, the
final period and each period of three consecutive calendar months ending on
March 31, June 30, September 30 and December 31 of each calendar year.
(ii) The term "initial period" shall mean the period commencing on
the date of this Agreement and ending on the March 31, June 30, September 30 or
December 31 next succeeding such date.
(iii) The term "final period" shall mean the period commencing on
the April 1, July 1, October 1 or January 1 next preceding the date of the
termination of this Agreement and ending on such last mentioned date.
(iv) The term "fiscal year" shall mean the final fiscal year and
each period of 12 consecutive calendar months ending on December 31 of each
calendar year.
5. Duration and Termination of Agreement. This Agreement shall become
effective on the date set forth above and shall continue in effect for two years
and then from year to year thereafter only so long as such continuance is
specifically approved in accordance with the
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Investment Company Act of 1940. This Agreement may be terminated on sixty days
written notice by either party. This Agreement shall terminate automatically in
the event of its assignment as defined in the Investment Company Act of 1940.
6. Name of Fund. The Adviser consents to the use by the Fund of the name
"Stralem III Fund" so long, and only so long, as this Agreement (or any
agreement with any organization which has succeeded to the business of the
Adviser) or any extension, renewal or amendment thereof, remains in effect. The
Fund agrees that if and when no such agreement is in effect, (a) it will cease
to use said name or any name indicating or suggesting that the Fund is advised
by or otherwise connected with the Adviser and (b) it will not thereafter refer
to the former association between the Adviser and the Fund.
7. Adviser May Act for Others. Nothing herein contained shall limit the
freedom of the Adviser or any affiliated person of the Adviser to render
investment supervisory or corporate administrative services to other investment
companies, or act as investment adviser or investment counselor to other
persons, firms or corporations, and to engage in other business activities.
8. Amendment of Agreement. The Agreement may not be amended except pursuant
to a direction given by the vote of the holders of a majority (as defined in the
Investment Company Act of 1940) of the outstanding shares of the Fund.
9. Liability. The Adviser shall not be liable for any error of judgment, or
mistake of law, or any loss suffered by the Fund, in connection with the matters
to which this Agreement relates, except for loss resulting from gross negligence
of the Adviser in the performance of its duties or from reckless disregard by
the Adviser of its obligations and duties hereunder.
10. Liabilities of the Trustees and Shareholders. The Adviser acknowledges the
following limitation of liability:
The terms "Trust" and "Trustees" refer, respectively, to the trust created
and the Trustees, as trustees but not individually or personally, acting from
time to time under the Trust Instrument, to which reference is hereby made, such
reference being inclusive of any and all amendments thereto so filed or
hereafter filed. The obligations of "the Trust" entered into in the name or on
behalf thereof by any of the Trustees, representatives or agents are made not
individually, but in such capacities and are not binding upon any of the
Trustees, shareholders or representatives of the Fund personally, but bind only
the assets of the Fund and all persons dealing with the Fund must look solely to
the assets of the Fund for the enforcement of any claims against the Fund.
11. Notices. Any notices under this Agreement shall be in writing, addressed
and delivered or mailed postage paid to the other party at such address as such
other party may designate for the receipt of such notice. Until further notice
to the other party, it is agreed that the mailing address of the Fund and that
of the Adviser shall be 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
12. Questions of Interpretation. 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
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Investment Company Act of 1940, as amended, shall be resolved by reference to
such term or provision of the 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 Securities and Exchange Commission
issued pursuant to said Act. In addition, where the effect of a requirement of
the Investment Company Act of 1940, reflected in any provision of this Agreement
is released by rules, regulations or order of the Securities and Exchange
Commission, 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 duly authorized officers as of the date and year first above
written
STRALEM & COMPANY INCORPORATED
By /s/ Xxxxxxxx X. Xxxxxxx
--------------------------------
Xxxxxxxx X. Xxxxxxx
President
STRALEM FUND, on behalf of its Series, Stralem III Fund
By /s/ Xxxxxxxx X. Xxxxxxx
--------------------------------
Xxxxxxxx X. Xxxxxxx
President
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