INVESTMENT ADVISORY AGREEMENT between STRALEM FUND and STRALEM & COMPANY INCOPORATED
between
and
STRALEM
& COMPANY INCOPORATED
AGREEMENT
made as
of the 12th
day of
September 2005, by and between Stralem Fund, a Delaware business trust (the
“Trust”), and Stralem & Company Incorporated, a Delaware corporation (the
“Adviser”).
WHEREAS,
the
Trust is registered as an open-end, management investment company under the
Investment Company Act of 1940, as amended (the “1940 Act”); and
WHEREAS,
the
Trust desires to retain the Adviser to furnish investment advisory services
to
the funds listed on Schedule A (each, a “Fund” and collectively, the “Funds”),
and the Adviser represents that it is willing and possesses legal authority
to
so furnish such services;
NOW,
THEREFORE,
in
consideration of the premises and mutual covenants herein contained, it is
agreed between the parties hereto as follows:
1. Appointment.
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(a)
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General.
The Trust hereby appoints the Adviser to act as investment adviser
to the
Funds for the period and on the terms set forth in this Agreement.
The
Adviser accepts such appointment and agrees to furnish the services
herein
set forth for the compensation herein
provided.
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(b)
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Sub-Advisers.
It is understood and agreed that the Adviser may from time to time
employ
or associate with such other entities or persons as the Adviser believes
appropriate to assist in the performance of this Agreement with respect
to
a particular Fund or Funds (each a “Sub-Adviser”), and that any such
Sub-Adviser shall have all of the rights and powers of the Adviser
set
forth in this Agreement; provided
that a Fund shall not pay any additional compensation for any Sub-Adviser
and the Adviser shall be as fully responsible to the Trust for the
acts
and omissions of the Sub-Adviser as it is for its own acts and omissions;
and provided
further
that the retention of any Sub-Adviser shall be approved in advance
by (i)
the Board of Trustees of the Trust and (ii) the shareholders of the
relevant Fund if required under any applicable provisions of the
1940 Act.
The Adviser will review, monitor and report to the Trust’s Board of
Trustees regarding the performance and investment procedures of any
Sub-Adviser. In the event that the services of any Sub-Adviser are
terminated, the Adviser may provide investment advisory services
pursuant
to this Agreement to the Fund without a Sub-Adviser and without further
shareholder approval, to the extent consistent with the 1940 Act.
A
Sub-Adviser may be an affiliate of the
Adviser.
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2. Investment
Advisory Services.
(a) Management
of the Funds.
The
Adviser hereby undertakes to act as investment adviser to the Funds. The Adviser
shall regularly provide investment advice to the Funds and continuously
supervise the investment and reinvestment of cash, securities and other property
composing the assets of the Funds and, in furtherance thereof,
shall:
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(i)
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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.
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(ii)
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take,
on behalf of the Funds, all actions which the Adviser 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 Funds as the representative or representatives
of the
Funds, to give instructions to the Custodian of the assets of the
Funds as
to deliveries of securities and payments of cash for the account
of the
Funds.
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(iii)
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make
appropriate periodic reports to the Trust’s Board of
Trustees.
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(b)
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Covenants.
The Adviser shall carry out its investment advisory and supervisory
responsibilities in a manner consistent with the investment objectives,
policies, and restrictions provided in: (i) each Fund’s Prospectus and
Statement of Additional Information as revised and in effect from
time to
time; (ii) the Trust’s Trust Instrument, By-Laws or other governing
instruments, as amended from time to time; (iii) the 1940 Act; (iv)
other
applicable laws; and (v) such other investment policies, procedures
and/or
limitations as may be adopted by the Trust with respect to a Fund
and
provided to the Adviser in writing. The Adviser agrees to use reasonable
efforts to manage each Fund so that it will qualify, and continue
to
qualify, as a regulated investment company under Subchapter M of
the
Internal Revenue Code of 1986, as amended, and regulations issued
thereunder (the “Code”), except as may be authorized to the contrary by
the Trust’s Board of Trustees. The management of the Funds by the Adviser
shall at all times be subject to the review of the Trust’s Board of
Trustees.
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(c)
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Books
and Records.
Pursuant to applicable law, the Adviser shall keep each Fund’s books and
records required to be maintained by, or on behalf of, the Funds
with
respect to advisory services rendered hereunder. The Adviser agrees
that
all records which it maintains for a Fund are the property of the
Fund and
it will promptly surrender any of such records to the Fund upon the
Fund’s
request. The Adviser further agrees to preserve for the periods prescribed
by Rule 31a-2 under the 1940 Act any such records of the Fund required
to
be preserved by such Rule.
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(d)
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Reports,
Evaluations and other Services.
The Adviser shall furnish reports, evaluations, information or analyses
to
the Trust with respect to the Funds and in connection with the Adviser’s
services hereunder as the Trust’s Board of Trustees may request from time
to time or as the Adviser may otherwise deem to be desirable. The
Adviser
shall make recommendations to the Trust’s Board of Trustees with respect
to Trust policies, and shall carry out such policies as are adopted
by the
Board of Trustees. The Adviser shall, subject to review by the Board
of
Trustees, furnish such other services as the Adviser shall from time
to
time determine to be necessary or useful to perform its obligations
under
this Agreement.
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(e)
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Selection
of Brokers or Dealers.
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
to
pay a member of a securities exchange, broker or dealer an amount
of
commission higher than the commission 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.
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(g)
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Aggregation
of Securities Transactions.
In executing portfolio transactions for a Fund, the Adviser may,
to the
extent permitted by applicable laws and regulations, but shall not
be
obligated to, aggregate the securities to be sold or purchased with
those
of other Funds or its other clients if, in the Adviser’s reasonable
judgment, such aggregation (i) will result in an overall economic
benefit
to the Fund, taking into consideration the advantageous selling or
purchase price, brokerage commission and other expenses, and trading
requirements, and (ii) is not inconsistent with the policies set
forth in
the Trust’s registration statement and the Fund’s Prospectus and Statement
of Additional Information. In such event, the Adviser will allocate
the
securities so purchased or sold, and the expenses
incurred in the transaction, in an equitable manner, consistent with
its
fiduciary obligations to the Fund and such other
clients.
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-3-
3. Representations
and Warranties.
(a) The
Adviser hereby represents and warrants to the Trust as follows:
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(i)
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The
Adviser is a corporation duly organized and in good standing under
the
laws of the State of Delaware and is fully authorized to enter into
this
Agreement and carry out its duties and obligations
hereunder.
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(ii)
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The
Adviser is registered as an investment adviser with the Commission
under
the Investment Advisers Act of 1940, as amended (the “Advisers Act”), and
is registered or licensed as an investment adviser under the laws
of all
applicable jurisdictions. The Adviser shall maintain such registrations
or
licenses in effect at all times during the term of this
Agreement.
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(iii)
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The
Adviser at all times shall provide its best judgment and effort to
the
Trust in carrying out the Adviser’s obligations
hereunder.
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(b) The
Trust
hereby represents and warrants to the Adviser as follows:
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(i)
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The
Trust has been duly organized as a business trust under the laws
of the
State of Delaware and is authorized to enter into this Agreement
and carry
out its terms.
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(ii)
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The
Trust is registered as an investment company with the Commission
under the
1940 Act and shares of each Fund are registered for offer and sale
to the
public under the 1933 Act and all applicable state securities laws
where
currently sold. Such registrations will be kept in effect during
the term
of this Agreement.
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4. Compensation.
(a) As
compensation for the services which the Adviser is to provide or cause to be
provided pursuant to Paragraph 2, each Fund shall pay to the Adviser out of
Fund
assets a quarterly fee, computed and accrued at the rates set forth opposite
each Fund’s name on Schedule A, which shall be the percentage of the average
weekly net assets of the Fund (computed in the manner set forth in the Fund’s
most recent Prospectus and Statement of Additional Information) determined
as of
the close of business the last business days of each calendar week during each
fiscal quarter. For the quarter in which this Agreement commences or terminates,
the Adviser shall make an appropriate pro rata adjustment of the fee on the
basis of the number of days that the Agreement is in effect during such
quarter.
-4-
(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
“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. Expenses.
As
between the Adviser and the Funds, the Funds will pay for all their expenses
other than those expressly stated to be payable by the Adviser hereunder, which
expenses payable by the Funds shall include, without limitation, (i) interest
and taxes; (ii) brokerage commissions and other costs in connection with the
purchase or sale of securities and other investment instruments, which the
parties acknowledge might be higher than other brokers would charge when a
Fund
utilizes a broker which provides brokerage and research services to the Adviser
as contemplated under Paragraph 3 above; (iii) fees and expenses of the Trust’s
Trustees that are not employees of the Adviser; (iv) legal and audit expenses;
(v) any compliance expenses
properly allocable to the Funds; (vi) administrator, custodian, pricing and
bookkeeping, registrar and transfer agent fees and expenses; (vii) fees and
expenses related to the registration and qualification of the Funds’ shares for
distribution under state and federal securities laws; (viii) expenses of
printing and mailing reports and notices and proxy material to shareholders,
unless otherwise required; (ix) all other expenses incidental to holding
meetings of shareholders, including proxy solicitations therefor, unless
otherwise required; (x) expenses of typesetting for printing Prospectuses and
Statements of Additional Information and supplements thereto; (xi) expenses
of printing and mailing Prospectuses and Statements of Additional Information
and supplements thereto sent to existing shareholders; (xii) insurance premiums
for fidelity bonds and other coverage to the extent approved by the Trust’s
Board of Trustees; (xiii) association membership dues; and (xiv) such
non-recurring or extraordinary expenses as may arise, including those relating
to actions, suits or proceedings to which the Trust is a party (or to which
the
Funds’ assets are subject) and any legal obligation for which the Trust may have
to provide indemnification to the Trust’s Trustees and officers.
6. Non-Exclusive
Services; Limitation of Adviser’s Liability. The
services of the Adviser to the Funds are not to be deemed exclusive and the
Adviser may render similar services to others and engage in other activities.
The Adviser and its affiliates may enter into other agreements with the Funds
and the Trust for providing additional services to the Funds and the Trust
which
are not covered by this Agreement, and to receive additional compensation for
such services. In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties hereunder on the
part
of the Adviser, or a breach of fiduciary duty with respect to receipt of
compensation, neither the Adviser nor any of its directors, officers,
shareholders, agents, or employees shall be liable or responsible to the Trust,
the Funds or to any shareholder of the Funds for any error of judgment or
mistake of law or for any act or omission in the course of, or connected with,
rendering services hereunder or for any loss suffered by the Trust, a Fund
or
any shareholder of a Fund in connection with the performance of this
Agreement.
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7. Effective
Date; Modifications; Termination. This
Agreement shall become effective on September 12, 2005, provided that it shall
have been approved by a majority of the outstanding
voting securities of each Fund, in accordance with the requirements of the
1940
Act, or such later date as may be agreed by the parties following such
shareholder approval.
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(a)
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This
Agreement shall continue in force for two years. Thereafter, this
Agreement shall continue in effect as to each Fund for successive
annual
periods, provided such continuance is specifically approved at least
annually (i) by a vote of the majority of the Trustees of the Trust
who are not parties to this Agreement or interested persons of any
such
party, cast in person at a meeting called for the purpose of voting
on
such approval and (ii) by a vote of the Board of Trustees of the
Trust or
a majority of the outstanding voting shares of the
Fund.
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(b)
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The
modification of any of the non-material terms of this Agreement may
be
approved by a vote of a majority of those Trustees of the Trust who
are
not interested persons of any party to this Agreement, cast in person
at a
meeting called for the purpose of voting on such
approval.
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(c)
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Notwithstanding
the foregoing provisions of this Paragraph 9, either party hereto
may
terminate this Agreement at any time on sixty (60) days’ prior written
notice to the other, without payment of any penalty. Such a termination
by
the Trust may be effected severally as to any particular Fund, and
shall
be effected as to any Fund by vote of the Trust’s Board of Trustees or by
vote of a majority of the outstanding voting securities of the Fund.
This
Agreement shall terminate automatically in the event of its
assignment.
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8. Limitation
of Liability of Trustees and Shareholders. The
Adviser acknowledges the following limitation of liability:
The
terms
“Stralem Fund” 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 and a copy
of
which is on file at the office of the Secretary of State of the State of
Delaware, such reference being inclusive of any and all amendments thereto
so
filed or hereafter filed. The obligations of “Stralem Fund” 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 Trust personally, but
bind
only the assets of the Trust, and all persons dealing with the Trust or a Fund
must look solely to the assets of the Trust or Fund for the enforcement of
any
claims against the Trust or Fund.
9. Certain
Definitions. The
terms
“vote of a majority of the outstanding voting securities,” “assignment,”
“control,” and “interested persons,” when used herein, shall have the respective
meanings specified in the 1940 Act. References in this Agreement to the 1940
Act
and the Advisers Act shall be construed as references to such laws as now in
effect or as hereafter amended, and shall be understood as inclusive of any
applicable rules, interpretations and/or orders adopted or issued thereunder
by
the Commission.
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10. Independent
Contractor.
The
Adviser shall for all purposes herein be deemed to be an independent contractor
and shall, unless otherwise expressly provided herein or authorized
by the Board of Trustees of the Trust from time to time, have no authority
to
act for or represent a Fund in any way or otherwise be deemed an agent of a
Fund.
11. Structure
of Agreement.
The
Trust is entering into this Agreement on behalf of the respective Funds
severally and not jointly. The responsibilities and benefits set forth in this
Agreement shall refer to each Fund severally and not jointly. No Fund shall
have
any responsibility for any obligation of any other Fund arising out of this
Agreement. Without otherwise limiting the generality of the
foregoing:
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(a)
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any
breach of any term of this Agreement regarding the Trust with respect
to
any one Fund shall not create a right or obligation with respect
to any
other Fund;
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(b)
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under
no circumstances shall the Adviser have the right to set off claims
relating to a Fund by applying property of any other Fund;
and
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(c)
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the
business and contractual relationships created by this Agreement,
consideration for entering into this Agreement, and the consequences
of
such relationship and consideration relate solely to the Trust and
the
particular Fund to which such relationship and consideration
applies.
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This
Agreement is intended to govern only the relationships between the Adviser,
on
the one hand, and the Trust and the Funds, on the other hand, and (except as
specifically provided above in this Paragraph 14) is not intended to and shall
not govern (i) the relationship between the Trust and any Fund or (ii) the
relationships among the respective Funds.
12. Governing
Law.
This
Agreement shall be governed by the laws of the State of New York, provided
that
nothing herein shall be construed in a manner inconsistent with the 1940 Act
or
the Advisers Act.
13. 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 and, to this extent, the provisions of this Agreement shall
be
deemed to be severable.
14. Notices.
Notices
of any kind to be given to the Trust hereunder by the Adviser shall be in
writing and shall be duly given if mailed or delivered to 000 Xxxxxxx Xxxxxx,
Xxx Xxxx Xxx Xxxx 00000; or at such other address or to such individual as
shall
be so specified by the Trust to the Adviser. Notices of any kind to be given
to
the Adviser hereunder by the Trust shall be in writing and shall be duly given
if mailed or delivered to the Adviser at 000 Xxxxxxx Xxxxxx Xxx Xxxx, Xxx Xxxx
00000, or at such other address or to such individual as shall be so specified
by the Adviser to the Trust. Notices shall be effective upon
delivery.
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IN
WITNESS WHEREOF,
the
parties have caused this Agreement to be executed by their respective officers
thereunto duly authorized as of the date written above.
| STRALEM FUND | STRALEM & COMPANY INCOPORATED |
| By: /s/ Philippe E. Baumann____________ | By: /s/ Hirschel B. Abelson___________ |
| _________________________________ | ________________________________ |
| Name: Xxxxxxxx X. Xxxxxxx | Name: Xxxxxxxx X. Xxxxxxx |
| Title: President | Title: President |
-8-
SCHEDULE
A
to
the
between
and
STRALEM
& COMPANY INCOPORATED
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Name
of Fund
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Fee,
at a quarterly rate,
expressed
as a percentage of average weekly net assets.
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Annual
rate
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Last
Approved
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Stralem
Balanced Fund
|
.25%
of the first $50 million
|
1.00%
of the first $50 million
|
By
Trustees 3/30/05
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.1875%
of the next $50 million
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0.75%
of the next $50 million
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By
Shareholders 9/12/05
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.125%
in excess of $100 million
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0.50%
in excess of $100 million
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(no
change to fees)
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Stralem
Equity Fund
|
.3125%
of the first $50 million
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1.25%
of the first $50 million
|
By
Trustees 3/30/05
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.25%
of the next $50 million
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1.00%
of the next $50 million
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Effective
7/1/05
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.1875%
in excess of $100 million
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0.75%
in excess of $100 million
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By
Shareholders 9/12/05
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| By: /s/ Xxxxxxxx X. Xxxxxxx | |
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Xxxxxxxx
X. Xxxxxxx
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| Accepted: | |
| STRALEM & COMPANY INCOPORATED | |
| By: /s/ Xxxxxxxx X. Xxxxxxx | |
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Xxxxxxxx
X. Xxxxxxx
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