CUSTODIAN AGREEMENT
THIS
AGREEMENT made on June 13, 2007, between Stralem Fund, a Delaware Statutory
Trust (the “Trust”) on behalf of the series listed in Exhibit A, Pershing
Advisor Solutions LLC, a Delaware limited liability company, (the “Introducing
Broker-Dealer” or “IBD”) and Pershing LLC, a Delaware limited liability company
and clearing broker-dealer for accounts of the IBD (“Custodian”);
WHEREAS,
the Trust desires that its securities and cash be held and administered by
the
IBD and Custodian pursuant to the terms of this Agreement and intend that this
Agreement supersede any prior agreements with respect to the custody
thereof;
WHEREAS
the IBD and Custodian have entered into a Fully Disclosed Clearing Agreement,
dated July 12, 2005 (the “Clearing Agreement”) pursuant to which the Custodian
will carry, clear transactions for, and perform services to the accounts of
the
IBD that the IBD introduces to the Custodian and the Custodian
accepts;
WHEREAS
the parties intend that the IBD will introduce the account of the Trust to
the
Custodian and that the Custodian will accept such account;
NOW,
THEREFORE, in consideration of the mutual agreements herein made, the Trust,
IBD
and Custodian agree as follows:
1. Definitions
The
word
“securities” includes stocks, shares, bonds, debentures, notes, mortgages or
other obligations, and any certificates, receipts, warrants or other instruments
representing rights to receive, purchase or subscribe for the same, or
evidencing or representing any other rights or interests therein, or in any
property or assets.
The
words
“authorized person” mean any of the persons duly authorized to give proper
instructions or otherwise act on behalf of the Trust by appropriate resolution
of its Board of Trustees (“Board”), and set forth in a certificate as
required by Section 2.
The
words
“officers’ certificate” mean a request or direction or certification in writing
signed in the name of the Trust by any two of the President, a Vice President,
the Secretary and the Treasurer of the Trust, or any other persons duly
authorized to sign by the Board of Trustees of the Trust.
The
words
“proper instructions” mean (i) instructions regarding the purchase or sale of
portfolio securities, and payments and deliveries in connection therewith,
given
by an authorized person, such instructions to be given in such form and manner
as the IBD, Custodian and the Trust will agree upon from time to time, and
(ii)
instructions (which may be continuing instructions) regarding other matters
signed or initialed by an authorized person. Oral instructions will be
considered proper instructions if the IBD reasonably believes them to have
been
given by an authorized person. The Trust will promptly confirm all
oral instructions in writing. As between the IBD and Custodian, the
IBD shall be responsible for determining that an instruction is a “proper
instruction” as defined herein and shall forward to Custodian only such
instructions as it determines to be proper instructions. Custodian
shall be entitled to rely on any instruction for the Trust that Custodian
receives from the IBD as constituting a proper instruction. The IBD
and Custodian will use their best efforts to comply with any subsequent proper
instruction which modifies a prior proper instruction and the sole obligation
of
the IBD and Custodian with respect to any such subsequent proper instruction
will be to make reasonable efforts to detect any discrepancy between the
original and subsequent proper instructions and to report such discrepancy
to
the Trust. The Trust will be responsible, at the Trust’s expense, for
taking any action, including any reprocessing, necessary to correct any such
discrepancy or error, and to the extent such action requires the IBD and
Custodian to act, the Trust will give the IBD specific proper instructions
as to
the action required.
2. Names,
Titles, and Signatures of the Trust’s Officers
An
officer of the Trust will certify to the IBD the names and signatures of
authorized persons and the names of the members of the Board, together with
any
changes which may occur from time to time.
3. Additional
Series
The
Trust
is authorized to issue separate classes of shares of beneficial interest
representing interests in separate investment portfolios. The parties
intend that each portfolio established by the Trust, now or in the future,
be
covered by the terms and conditions of this agreement. Upon the
establishment of each new class or series, the Trust will notify the IBD to
establish a separate account for the separate investment portfolio of such
separate class or series and provide a copy of the class’s or series’
registration statement and any other documentation memorializing the class’s or
series’ investment restrictions. The IBD shall introduce such account
to the Custodian for handling pursuant to the terms of this
agreement.
4. Receipt
and Disbursement of Money
A. Upon
receipt of proper instructions the Custodian will open and maintain a segregated
account or accounts in the name of the Trust, subject only to draft or order
by
the Custodian acting pursuant to the terms of this Agreement. The
Custodian will hold in such account or accounts, subject to the provisions
hereof, all cash received by it from or for the account of the
Trust. The Custodian will make payments of cash to, or for the
account of, the Trust from such cash upon receipt of proper instructions
only:
(a) for
the purchase of securities for the portfolio of the Trust upon the delivery
of
such securities to the Custodian, registered in the name of the Trust or of
the
nominee of the Custodian referred to in Section 7 of this Agreement or in proper
form for transfer;
(b) for
the purchase or redemption of shares of the Trust upon delivery thereof to
the
Custodian, or upon proper instructions from the Trust, provided, however, the
Custodian shall have no duty to determine the purpose of such payments made
or
received or to make or keep any shareholder records with respect
thereto;
(c) for
the payment of interest, dividends, taxes, investment adviser’s fees or
operating expenses (including, without limitation thereto, fees for legal,
accounting, auditing and custodian services and expenses for printing and
postage), provided the Custodian shall have no duty to determine the purpose
of
such payments;
(d) for
payments in connection with the conversion, exchange or surrender of securities
owned or subscribed to by the Trust held by or to be delivered to the Custodian;
or
(e) for
other proper corporate purposes certified by resolution of the
Board.
B. The
Custodian is hereby authorized to endorse and collect all checks, drafts or
other orders for the payment of money received by the Custodian for the account
of the Trust.
C. Upon
receipt of proper instructions, the Custodian will make federal funds available
to the Trust as of specified times agreed upon from time to time by the Trust
and the Custodian in the amount of checks received in payment for shares of
the
Trust which are deposited into the Trust’s account.
5. Transfer,
Exchange, Redelivery, etc. of Securities of the Trust’s
Portfolios
Upon
receipt of proper instructions, the Custodian will release or deliver any
securities of the Trust’s portfolios held by it pursuant to this
Agreement. The Custodian agrees to transfer, exchange or deliver such
Trust portfolio securities held by it hereunder upon receipt of proper
instructions only:
(a) for
sales of such portfolio securities for the account of the Trust upon receipt
by
the Custodian of payment therefore;
(b) when
such portfolio securities are called, redeemed or retired or otherwise become
payable;
(c) for
examination by any broker selling any such portfolio securities in accordance
with “street delivery” custom;
(d) in
exchange for, or upon conversion into, other securities for the Trust’s
portfolios alone or other securities and cash for the Trust’s portfolios whether
pursuant to any plan of merger, consolidation, reorganization, recapitalization
or readjustment, or otherwise;
(e) upon
conversion of such portfolio securities pursuant to their terms into other
securities;
(f) upon
exercise of subscription, purchase or other similar rights represented by such
portfolio securities;
(g) for
the purpose of exchanging interim receipts or temporary securities for
definitive portfolio securities;
(h) otherwise
for the purpose of transferring, exchanging or delivering securities of the
Trust’s portfolio, provided the Custodian shall have no duty to determine the
purpose of such transfer, exchange or delivery; or
(i) for
other proper corporate purposes.
As
to any
deliveries made by the Custodian pursuant to items (a), (b), (d), (e), (f),
(g)
and (h) above, securities or cash receivable in exchange therefore will be
deliverable to the Custodian.
6. Custodian’s
Acts Without Instructions
Notwithstanding
anything to the contrary, unless and until the Custodian receives an officers’
certificate to the contrary, the Custodian will take the following actions
without prior instructions: (a) present for payment all coupons and
other income items held by it for the account of the Trust, which call for
payment upon presentation and hold the cash received by it upon such payment
for
the account of the Trust; (b) collect interest and cash dividends received,
with
notice to the Trust, for the account of the Trust; and (c) hold for the account
of the Trust hereunder all stock dividends, rights and similar securities issued
with respect to any securities held by it hereunder.
The
Custodian has no power or authority to assign, hypothecate, pledge or otherwise
dispose of any security or investment except as authorized by the Trust for
its
own account.
7. Registration
of Securities
Except
as
otherwise directed by an officers’ certificate, the Custodian will register all
portfolio securities in street name or in the name of a registered nominee
of
the Custodian. The Custodian will use its best efforts so that the specific
securities held by it are at all times identifiable and segregated in its
records.
The
Trust
will from time to time furnish to the Custodian appropriate instruments to
enable the Custodian to hold or deliver in proper form for transfer, or to
register in the name of its registered nominee, any securities which it may
hold
for the account of the Trust’s portfolios and which may from time to time be
registered in the name of the Trust.
8. Voting
and Other Action
Neither
the IBD, Custodian nor any nominee of the Custodian will vote any of the
securities held hereunder by or for the account of the Trust, except in
accordance with proper instructions received from the Trust. The
Custodian will deliver, or cause to be executed and delivered, to the Trust
or
its designee as specified by proper instructions all notices, proxies and proxy
soliciting materials with relation to such securities, such proxies to be
executed by the registered holder of such securities (if registered otherwise
than in the name of the Trust), but without indicating the manner in which
such
proxies are to be voted.
9. Transfer
Tax and Other Disbursements
The
Trust
will pay or reimburse the Custodian on demand for any transfer taxes payable
upon transfers of securities made hereunder, and for all other necessary and
proper disbursements and expenses made or incurred by the Custodian in the
performance of this Agreement.
10. Concerning
Custodian
The
Custodian’s compensation shall be as agreed in writing from time to
time. In addition, the Custodian will be entitled to receive from the
Trust on demand reimbursement for cash disbursements, costs and expenses in
connection with the miscellaneous charges such as postage, insurance and
transfer taxes incurred in the transfer of securities. The Custodian
may not charge such disbursements, costs and expenses against any money held
in
the name of the Trust.
The
IBD
and the Custodian will not be liable for any action taken in good faith upon
any
proper instruction, certificate herein described or certified copy of any
resolution of the Board, and may rely on the genuineness of any such instruction
or document which it or they may in good faith believe to have been validly
executed.
The
Trust
agrees to indemnify and hold harmless the IBD, Custodian and its nominee, and
their respective employees, agents, officers and directors from all taxes,
charges, expenses, assessments, claims and liabilities (including reasonable
counsel fees) incurred or assessed against the IBD, Custodian or by the
Custodian’s nominee in connection with the performance of this Agreement, except
such as may arise from the IBD’s or Custodian’s or its nominee’s, or their
respective employee’s, agent’s, officer’s or director’s own grossly negligent
action, grossly negligent failure to act or willful misconduct. The
Custodian is authorized to charge any account of the Trust for such
items.
In
the
event of any advance of cash for any purpose made by the Custodian resulting
from orders or instructions of the Trust, or in the event that the Custodian
or
its nominee incurs or is assessed any taxes, charges, expenses, assessments,
claims or liabilities in connection with the performance of this Agreement,
except such as may arise from its or its nominee’s own grossly negligent action,
grossly negligent failure to act or willful misconduct, any property at any
time
held for the account of the Trust will be security
therefore. Custodian shall not be obligated to make any advance
hereunder.
11. Lien
on Securities
Notwithstanding
any other provision herein or in the terms and conditions of any account
statement or confirmation, the securities may not be subject to any lien or
charge of any kind in favor of the IBD, Custodian or any person claiming through
the IBD or Custodian.
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12.
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Members
of National Securities
Exchange
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The
Custodian represents and warrants that it is a “member of a national securities
exchange” as such term is used in Rule 17f-1 under the Investment Company Act of
1940, as amended, (the “1940 Act”). The Custodian agrees to indemnify
and hold harmless the Trust and its employees, agents, officers and Trustees
from all claims and liabilities (including reasonable counsel fees) incurred
or
assessed against the Trust resulting from the Custodian’s breach of this
representation and warranty.
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13.
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Subcustodians
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The
Custodian is hereby authorized to engage a bank or trust company as a
subcustodian for all or any part of the Trust’s assets, so long as any such bank
or trust company is a bank or trust company organized under the laws of any
state of the United States, having an aggregate capital, surplus and undivided
profit, as shown by its last published report, of not less than two million
dollars ($2,000,000) and provided further that, if the Custodian utilizes the
services of a subcustodian, the Custodian will remain fully liable and
responsible for any losses caused to the Trust by the subcustodian as fully
as
if the Custodian was directly responsible for any such losses under the terms
of
this Agreement.
Notwithstanding
anything contained herein, if the Trust requires the Custodian to engage
specific subcustodians for the safekeeping and/or clearing of portfolio assets,
the Trust agrees to indemnify and hold harmless the Custodian from all claims,
expenses and liabilities incurred or assessed against it in connection with
the
use of such subcustodian in regard to the Trust’s assets, except as may arise
from its own grossly negligent action, grossly negligent failure to act or
willful misconduct.
14. Reports
and Services by Trust’s
Custodian and IBD
The
Custodian will furnish the Trust as agreed upon with a daily account statement
summarizing all transactions and entries for the account of the
Trust. The Custodian will furnish to the Trust, at the end of every
month, a list of the portfolio securities held under this Agreement showing
the
market value of each issue at the end of such month and summarizing all
transactions and entries for the account of the Trust. The Custodian
will provide copies of its books and records pertaining to its actions
under this Agreement promptly upon the reasonable prior notice by officers
of auditors employed by the Trust.
The
IBD’s
and Custodian’s reporting and servicing obligations shall be limited to those
specifically enumerated herein and neither the IBD nor the Custodian shall
serve
in the capacity of transfer agent for the Trust or be obligated to provide
calculations or reports of net asset value (NAV), shareholder interests or
any
other shareholder reporting or shareholder servicing or Trust reporting
whatsoever.
15. Termination
or Assignment
This
Agreement may be terminated by the Trust, the IBD or the Custodian, on ninety
(90) days’ notice, given in writing and sent by registered mail to the IBD or
Custodian at
_____________________________________________________________________________,
or to the Trust at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as the case
may
be. Upon any termination of this Agreement, pending appointment of a
successor to the Custodian or a vote of the shareholders of the Trust to
dissolve or to function without a custodian of its cash, securities and other
property, the Custodian shall not deliver cash, securities or other property
of
the Trust to the Trust, but may deliver them to a bank or trust company of
its
own selection, having an aggregate capital, surplus and undivided profits,
as
shown by its last published report of not less than twenty million dollars
($20,000,000) as a custodian for the Trust to be held under terms similar to
those of this Agreement, provided, however, that the Custodian shall not be
required to make any such delivery or payment until full payment is made by
the
Trust of all liabilities constituting a charge on or against the properties
then
held by the Custodian or on or against the Custodian, and until full payment
is
been made to the Custodian of all its fees, compensation, costs and expenses,
subject to the provisions of Section 10 of this Agreement. Custodian
shall not be required to take any other action after termination of this
Agreement other than transferring cash, securities or other property of the
Trust to a successor/Custodian or as directed by the Trust as provided
herein.
This
Agreement may not be assigned by the IBD or Custodian without the consent of
the
Trust, authorized or approved by a resolution of its Board.
16. Deposits
of Securities in Securities Depositories
No
provision of this Agreement shall be deemed to prevent the use by the Custodian
of a central securities clearing agency or securities depository, provided,
however, that the Custodian and the central securities clearing agency or
securities depository meet all applicable federal and state laws and
regulations, and the Board has approved by resolution prior to the effective
date of this agreement the use by the Custodian of such central securities
clearing agency or securities depository.
17. Cooperation
with Accountants
The
IBD
and the Custodian will cooperate with the Trust’s independent public accountants
and take all reasonable action in the performance of its obligations under
this
Agreement to ensure that the necessary information is made available to such
accountants for the expression of their opinion and the preparation of Form
N-17f-1. Pursuant to Rule 17f-1(b)(4) under the 1940 Act, at the end
of each annual and semi-annual fiscal period and on one other occasion selected
by the accountant, the accountant shall request that the Custodian provide
such
information and reports as such accountant requires to
confirm all securities positions held by the Custodian on behalf of the Trust
as
required by Rule 17f-1(b)(4); and the Custodian shall respond to the
accountant’s request promptly.
18. Records
To
the
extent that the IBD or Custodian in any capacity prepares or maintains and
retains any records for the Trust, the IBD and Custodian agree to give copies
of
all such records to the Trust on a periodic basis as required by the Trust
and
to make any such records available to the Trust upon reasonable
request. The Custodian agrees that at any time, upon request of the
Commission, it will confirm all securities positions held by the Custodian
on
behalf of the Trust.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and their respective corporate seals to be affixed hereto as of the date first
above-written by their respective officers thereunto duly
authorized.
Executed
in several counterparts, each of which is an original.
