INVESTMENT ADVISORY AGREEMENT
Between
STRALEM FUND
And
STRALEM & COMPANY INCORPORATED
This agreement is made this ___ day of _______, 1999 by and between Stralem
Fund, a Delaware business trust (the "Trust"), on behalf of Stralem Equity 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 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 Funds 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
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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 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, Abrokerage 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 Advisers 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 January
31, April 30, July 31 and October 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 January 31, April 30, July 31 or
October 31 next succeeding such date.
(iii) The term "final period" shall mean the period commencing on the
February 1, May 1, August 1 or November 1 next preceding the date of the
termination of this Agreement and ending on such last mentioned date.
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(iv) The term "fiscal year" shall mean the final fiscal year and each
period of 12 consecutive calendar months ending on October 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 only so long as such
continuance is specifically approved at least annually in accordance with the
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 Equity 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, expect 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
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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 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
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Xxxxxxxx X. Xxxxxxx
President
STRALEM FUND, on behalf of its Series, Stralem Equity Fund
By
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Xxxxxxxx X. Xxxxxxx
President
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