EXHIBIT 28(H)(1)
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FUND ACCOUNTING AND FINANCIAL ADMINISTRATION
SERVICES AGREEMENT
THIS AGREEMENT is made as of the 27th day of October, 2011 (the "EFFECTIVE
DATE") by and between THE BANK OF NEW YORK MELLON (referred to herein as
"BNYM"), a national banking association having its principal place of business
at Xxx Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, and LINCOLN ADVISORS TRUST
(referred to herein as the "FUND"), a Delaware statutory trust having its
principal place of business at 0000 Xxxxxxx Xxxxxx, Xxxx Xxxxx, XX 00000, on
behalf of its Portfolios (as defined below).
WHEREAS, the Fund is registered with the Securities and Exchange Commission
("SEC") as an investment company under the Investment Company Act of 1940 (the
"1940 ACT"), and is classified as an open-end management investment company,
unless otherwise noted;
WHEREAS, BNYM is engaged in the fund accounting and financial administration
services business; and
WHEREAS, the Fund desires that BNYM perform the fund accounting, financial
administration and related services described in this Agreement for the Fund,
and BNYM is willing to perform such services on the terms and conditions set
forth in this Agreement.
NOW, THEREFORE, in exchange for good and valuable consideration, the receipt
and sufficiency of which are acknowledged, and intending to be legally bound,
the Fund and BNYM agree as follows:
1. Services
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A. BNYM shall perform for the Fund and its series (including all share
classes) listed in Schedule A to this Agreement, the fund accounting,
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financial administration and related services set forth in Schedule B to this
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Agreement ("SERVICES").
The Fund may add a Fund series and/or class to this Agreement by providing
written notice to BNYM at least four (4) months prior to the addition of the
Fund series and/or class; provided that, in the case where the Fund series
and/or class proposes to follow an investment strategy that is materially
different from the investment strategies followed by any other Fund series
and/or class under this Agreement or to make an investment that is not in the
same asset class as investments made by another Fund series and/or class, the
Fund must provide written notice to BNYM at least six (6) months prior to the
addition of the Fund series and/or class and obtain the prior written consent
of BNYM. Such addition must be evidenced by amending Schedule A. The Fund may
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delete a Fund series and/or class to this Agreement by providing written notice
to BNYM at least three (3) months prior to the deletion of the Fund series
and/or class. Such deletion must be evidenced by amending Schedule A. Each
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existing and future
LINCOLN ADVISORS TRUST
series of the Fund (including all share classes) covered by this Agreement is
individually and collectively referred to as a "PORTFOLIO."
BNYM may perform other services for the Fund only upon terms, conditions and
compensation that BNYM and the Fund mutually agree to, as evidenced by an
amendment to this Agreement or Schedule B.
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B. BNYM may enter into additional agreements with the Fund or its designated
service provider from time to time with respect to: (i) certain operational
functions that BNYM will perform in connection with this Agreement; and
(ii) performance measures pursuant to which BNYM will be expected to provide
the Services (the "SERVICE LEVEL DOCUMENTS"). The Service Level Documents will
be designed to provide operational guidance and performance metrics information
that may be used by the Fund and BNYM to assist in the delivery of the Services
and to measure BNYM's performance in providing the Services. The Fund and BNYM
agree that the Service Level Documents will reflect the division of operational
functions between or among the Fund, its agents and BNYM, and specific
performance measures for BNYM, rather than imposing specific contractual
obligations under this Agreement. Notwithstanding the foregoing, (i) BNYM's
material and systemic failure to perform its operational functions or to
satisfy the performance measures pursuant to the Service Level Documents may be
considered a material breach of the "FOR CAUSE" provisions described in
Section 3.B of this Agreement; (ii) the Service Level Documents may provide
remedies for the failure to satisfy the operational functions or performance
measures contemplated thereunder that are separate and apart from any right
that the Fund or BNYM may exercise under this Agreement; and (iii) BNYM's
performance or non-performance of the Services, separate and apart from the
operational functions and performance measures reflected in any Service Level
Document, may give rise to any remedies that the Fund may assert against BNYM
under the terms of this Agreement.
C. BNYM's present accounting platform is Eagle STAR/PACE. BNYM reserves the
right to utilize other accounting platform(s) that allow(s) BNYM to perform the
Services at a quality and level equivalent to the quality and level set forth
in the Service Level Documents. BNYM shall be responsible for the costs and
expenses incurred by BNYM and the Fund for converting from the Eagle STAR/PACE
platform to other accounting platform(s) in accordance with this subparagraph C.
2. Compensation and Expenses
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A. In return for performing the Services, the Fund shall compensate BNYM as
set forth in this Section and in Schedule C to this Agreement. Fees due will be
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accrued daily. If this Agreement is lawfully terminated before the end of any
month, fees shall be calculated on a pro rated basis through the date of
termination and shall be due upon the Agreement's termination date.
B. The Fund will pay all of its own expenses that are incurred in the Fund's
operation and not specifically assumed by BNYM. Expenses to be borne by the
Fund include, but are not limited to: pricing, security and other similar data
information vendor services; organizational expenses; costs of services of the
Fund's independent registered public accounting firm ("INDEPENDENT ACCOUNTANT")
and the Fund's outside legal and tax counsel (including such
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counsel's review of the Fund's registration statement, proxy materials, federal
and state tax qualification as a regulated investment company and any review of
reports and materials prepared by BNYM under this Agreement); costs of any
services contracted for by the Fund directly from parties other than BNYM;
trade association dues; costs of trading operations and brokerage fees,
commissions and transfer taxes in connection with the purchase and sale of
securities for the Fund; investment advisory fees; taxes; Fund insurance
premiums and other Fund insurance-related fees and expenses applicable to its
operation; costs incidental to any meetings of shareholders, including, but not
limited to, legal and auditor fees, proxy filing fees and the costs of printing
and mailing of any proxy materials; costs incidental to Fund board meetings,
including fees and expenses of Fund board members, but excluding costs
specifically assumed by BNYM; the salary and expenses of any officer,
director/trustee or employee of the Fund who is not also a BNYM employee;
registration fees, filing fees, and costs incidental to the preparation,
typesetting, printing and/or distribution, as applicable, of the Fund's
registration statements on Forms X-0X, X-0, X-0, X-0, X-0, and N-14, as
applicable, and any amendments thereto, shareholder reports on Form N-CSR, Form
N-SARs, Form N-Q, Form N-PX, tax returns, and all notices, registrations and
amendments associated with applicable federal and state tax and securities
laws; and other expenses properly payable by the Fund.
C. The Fund agrees to reimburse BNYM for its actual out-of-pocket expenses
in providing the Services, including without limitation, the following:
(i) the electronic transmission expenses incurred by BNYM in
communicating with the Fund, the Fund's investment advisers (which term, for
purposes of this Agreement, shall be interpreted to include any sub-advisers)
or custodian, dealers or others as required for BNYM to perform the Services,
if an Authorized Person requests such electronic transmission and provides BNYM
with prior written approval;
(ii) the costs of creating microfilm, microfiche or electronic copies of
Fund records, and the costs of storage of paper and electronic copies of Fund
records; provided, that BNYM must obtain the prior written approval of an
Authorized Person if such costs for the Fund exceed $7,500 in any calendar year;
(iii) the charges for services provided by vendors set forth in
Schedule D;
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(iv) any additional expenses incurred by BNYM at the written direction
of an Authorized Person;
(v) any additional expenses reasonably incurred by BNYM in the
performance of the Services, provided that, (a) if any individual expense is
less than $1,000, BNYM shall provide prior written notice to the Fund to the
extent practicable, and (b) if any individual expense is $1,000 or more, BNYM
must obtain the prior written approval of an Authorized Person of the Fund; and
(vi) in the event that BNYM is requested or authorized by the Fund or is
required by law, summons, subpoena, investigation, examination or other legal
or regulatory process to produce documents or personnel with respect to the
Services, and so long as BNYM is not the subject of the investigation or
proceeding in question, the Fund will reimburse BNYM for
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its actual out-of-pocket expenses (including reasonable attorneys' fees)
incurred in responding to these requests. In addition, when non-routine,
extensive or extraordinary productions or investigations occur, BNYM will
notify the Fund (as soon as reasonably practicable) and the Fund will reimburse
BNYM for its personnel's professional time (at BNYM's standard billing rates or
other mutually agreed upon rates).
D. BNYM shall be entitled to receive the following amounts:
(i) Any systems development and project fees for new or enhanced
products or services requested by the Fund (including significant enhancements
required by regulatory changes), and all systems-related expenses associated
with the provision of special reports and services, in each case as agreed upon
in advance by an Authorized Person; and
(ii) Ad hoc reporting fees billed at an agreed upon rate.
E. BNYM will xxxx the Fund on a monthly basis for the fees and expenses owed
to BNYM by the Fund under this Agreement. The monthly xxxx shall be set forth
on a detailed invoice in a form mutually agreed upon by BNYM and the Fund. BNYM
shall send such invoice to the Fund no later than fifteen (15) days after the
last day of each month; provided, however, that the failure by BNYM to do so
shall not be considered a breach of this Agreement. The Fund shall pay such
invoice within fifteen (15) days of receipt of such invoice by the Fund. Any
undisputed fees or expenses that are not paid by the Fund within the required
time frame shall be subject to a late fee of 1.5% of the amount billed for each
month that such fees or expenses remain unpaid, and the late fee shall be due
and payable upon demand. No Fund shall dispute the minimum fees set forth in
Schedule C. If any fees over and above the minimum fees set forth in Schedule C
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or any expenses are disputed by the Fund, BNYM and the Fund shall work together
in good faith to resolve the dispute promptly.
F. BNYM will assume responsibility for the costs of its ordinary and
necessary office facilities (including telephone, telephone transmission, and
telecopy expenses), equipment and personnel to perform the Services, including
the compensation of its employees who serve as Fund trustees, directors or
officers. In the event that BNYM is the subject of an examination, subpoena,
investigation, proceeding or legal or regulatory process relating to the
Services it provides to the Fund ("BNYM SERVICES INQUIRY"), and if BNYM
requests that the Fund provide, or if the Fund is required by law, summons,
subpoena, investigation, examination or other legal or regulatory process, to
produce documents or personnel with respect to the Services, then BNYM will
reimburse the Fund for its actual out-of-pocket expenses (including reasonable
attorneys' fees) incurred in responding to these requests. Furthermore, if the
BNYM Services Inquiry is non-routine, extensive or extraordinary, then BNYM
will reimburse the Fund for its personnel's professional time at mutually
agreed upon rates.
3. Length and Termination of Agreement
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A. The term of this Agreement shall begin on the Effective Date and continue
for an initial term extending to September 30, 2014 (the "INITIAL TERM").
Unless otherwise terminated in accordance with its terms, BNYM shall either
(i) request that this Agreement be extended for an additional three (3) year
period, or (ii) indicate that this Agreement will be terminated upon
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the expiration of the Initial Term or a Renewal Term (as the case may be), in
either case by sending a written notice of its intent to the Fund no later than
September 30, 2012 or the first anniversary of the effective date of a Renewal
Term (as the case may be). If BNYM requests that this Agreement be extended for
an additional three (3) year period and the Fund does not reject such request
in writing to BNYM by October 1, 2013, or the second anniversary of the
effective date of a Renewal Term (as the case may be), this Agreement shall be
extended for an additional three (3) year period (a "RENEWAL TERM"). If either
(a) BNYM indicates that this Agreement will be terminated upon the expiration
of the Initial Term or a Renewal Term (as the case may be) by sending a written
notice of its intent to the Fund no later than three (3) months prior to
October 1, 2012 or the first anniversary of the effective date of a Renewal
Term (as the case may be), or (b) the Fund responds to BNYM's request to extend
for an additional three (3) year period by rejecting such request in writing to
BNYM no later than October 1, 2013, or the second anniversary of the effective
date of a Renewal Term (as the case may be), this Agreement shall terminate
upon the expiration of the Initial Term or such Renewal Term (as the case may
be).
B. This Agreement may be terminated by the following party or parties, as
the case may be, for one or more of the following reasons, provided the
terminating party provides the applicable written notice to the other party or
parties, as the case may be, of the reason for such termination:
(i) NonRenewal: BNYM or the Fund may decline to extend the terms of this
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Agreement beyond the Initial Term under subparagraph A of this Section;
(ii) Mutual Agreement: BNYM and the Fund may mutually agree in writing
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to terminate this Agreement at any time;
(iii) "For Cause": (a) BNYM may terminate this Agreement "For Cause," as
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defined below, by providing the Fund with written notice of termination "For
Cause" at least 60 days prior to the date of termination of this Agreement, or
(b) the Fund may terminate this Agreement with respect to the Fund "For Cause,"
as defined below, by providing BNYM with written notice of termination "For
Cause" at least 60 days prior to the date of termination of this Agreement with
respect to the Fund;
(iv) Failure to Pay: BNYM may terminate this Agreement if BNYM has
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notified the Fund that it has failed to pay BNYM any undisputed amounts when
due under this Agreement and the Fund has failed to cure such default within 30
days of receipt of such notice (or, if the Fund has disputed in good faith any
fees over and above the minimum fees set forth in Schedule C or any expenses,
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upon final resolution of such dispute); or
(v) Termination of Custody Agreement: BNYM may terminate this Agreement
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with respect to the Fund if the Fund terminates its custody agreement with BNYM
or any of its affiliates following either (a) a change in the Fund's investment
adviser (other than a change in the Fund's investment adviser to another
investment adviser that is under common ownership with the Fund's investment
adviser or its successor) or (b) a sale (whether by a merger or a sale of the
stock or assets) of the Fund's investment adviser (other than a sale of the
Fund's investment adviser to another entity that is under common ownership with
the Fund's investment
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adviser or its successor) or its parent company, by providing the Fund with
written notice of such termination at least 60 days prior to the date of
termination of this Agreement with respect to the Fund (which termination date
will be extended by BNYM if, but only if and to the same extent that, the date
of termination of its custody agreement is extended by the Fund). For purposes
of this subparagraph (v) only, the term "investment adviser" does not include
any subadviser.
For purposes of subparagraph (iii) above, "FOR CAUSE" shall mean:
(a) a material breach of this Agreement by any other party or
parties, as the case may be, that has not been remedied for 30 days
following written notice by the terminating party that identifies in
reasonable detail the alleged failure of the other party or parties, as
the case may be, to perform, provided that if such default is capable of
being cured, then the other party or parties, as the case may be, are
entitled to such longer period as may reasonably be required to cure
such default if the other party or parties, as the case may be, have
commenced such cure and is diligently pursuing same, but such cure must
be completed within 120 days in any event;
(b) when any other party or parties, as the case may be, commit any
act or omission that constitutes gross negligence, willful misconduct,
fraud or reckless disregard of its or their duties under this Agreement
and that act or omission results in material adverse consequences to the
terminating party;
(c) a final, unappealable judicial, regulatory or administrative
ruling or order in which any other party or parties, as the case may be,
have been found guilty of criminal or unethical behavior in the conduct
of its business that directly relates to the subject matter of the
Services; or
(d) when any other party or parties, as the case may be, shall make a
general assignment for the benefit of its or their creditors or any
proceeding shall be instituted by or against the other party or parties,
as the case may be, to adjudicate it or them as bankrupt or insolvent,
or to seek to liquidate, wind up, or reorganize the other party or
parties, as the case may be, or protect or relieve its or their debts
under any law, or to seek the entry of an order for relief or the
appointment of a receiver, trustee or other similar official for it or
them or for a substantial portion of its or their assets, which
proceeding shall remain unstayed for sixty (60) days or the other party
or parties, as the case may be, have taken steps to authorize any of the
above actions or has become unable to pay its or their debts as they
mature.
C. If this Agreement is terminated by any party (regardless of whether it is
terminated pursuant to paragraph B. above or for any reason other than those
specified in paragraph B. above), the Fund shall pay to BNYM on or before the
effective date of such termination any undisputed and unpaid fees owed to, and
shall reimburse BNYM for any undisputed and unpaid out-of-pocket costs and
expenses owed to, BNYM under this Agreement prior to its termination.
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D. In the event that this Agreement is terminated by a party or the parties,
as the case may be, the parties hereto agree to cooperate and act in good faith
to ensure an orderly conversion of the Fund to a successor service provider
with respect to the Services provided under this Agreement. Without limiting
the generality of the foregoing sentence, BNYM agrees that, in the event this
Agreement is terminated by a party or the parties, it will deliver the Fund's
or the Fund's property, records, data, instruments and documents to the Fund,
its successor service providers and/or its other service providers, as the case
may be, in a non-proprietary, commercially-available format.
E. The termination of this Agreement with respect to any Portfolio shall in
no way affect the continued validity of this Agreement with respect to any
other Portfolio. Furthermore, if, following termination of this Agreement with
respect to the Fund or any Portfolio, BNYM continues to perform any one or more
of the Services with the express consent of the Fund or such Portfolio, then
the provisions of this Agreement, including without limitation the provisions
dealing with indemnification and compensation, shall continue in full force and
effect.
4. Amendments, Assignment and Delegation
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A modification of this Agreement (which term includes all Schedules) will be
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effective only if in writing and signed by the affected parties. No party shall
assign the rights or delegate the duties, or outsource a significant portion of
the Services, pursuant to this Agreement without the prior written consent of
the other party or parties, except as follows:
(i) BNYM may employ such person or persons it may deem desirable to
assist it in performing the Services without notice to the Fund;
(ii) BNYM shall provide written notice to the Fund before BNYM engages
an unaffiliated third party to provide significant services or functions to
assist BNYM in performing the Services under this Agreement;
(iii) BNYM may delegate one or more of the functions or assign this
Agreement to any direct or indirect majority-owned subsidiary of The Bank of
New York BNYM Corporation or its successor with timely notice to the Fund; and
(iv) A Fund merger or reorganization that does not result in a change in
the Fund's investment adviser and where the fund surviving from such merger or
reorganization assumes the duties and obligations of the Fund under this
Agreement shall not require BNYM's consent. For purposes of this subparagraph
(iv) only, the term "investment adviser" does not include any subadviser.
With respect to (i), (ii) and (iii) above, BNYM shall (a) be responsible for
the acts or omissions of such persons, third parties and subsidiaries to the
same extent as BNYM's own acts or omissions under this Agreement, (b) be
responsible for the compensation of such persons, third parties and
subsidiaries, and (c) not be relieved of any of its responsibilities under this
Agreement by virtue of the use of such persons, third parties and subsidiaries.
However, if the Fund instructs BNYM to engage a Subcontractor for the
performance of any of the Services,
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BNYM will not be responsible for any acts or omissions by, or compensation
payable to, such Subcontractor.
This Agreement shall be binding upon, and shall inure to the benefit of, the
parties and their respective successors and permitted assigns.
5. Documentation
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A. The Fund represents that it has provided or made available to BNYM (or
has given BNYM an opportunity to examine) copies of the following documents,
current as of the Effective Date of this Agreement:
(i) The Articles of Incorporation, Agreement and Declaration of Trust,
Partnership Agreement, or other similar charter document, as relevant,
evidencing the Fund's form of organization and any current amendments thereto;
(ii) The By-Laws or procedural guidelines of the Fund;
(iii) Any resolution or other action of the Fund or the Fund board
establishing or affecting the rights, privileges or other status of any class
of shares of a Portfolio, or altering or abolishing any such class;
(iv) A copy of a resolution of the Fund board appointing BNYM to provide
the Services for each Portfolio and authorizing the execution of this Agreement
and its Schedules;
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(v) A copy of the Fund's currently effective prospectus(es) and
statement(s) of additional information ("REGISTRATION STATEMENT") under the
Securities Act of 1933 (the "1933 ACT") and 1940 Act;
(vi) Copies of all pertinent Fund policies and procedures that affect
the Services, including, but not limited to, those relating to valuation,
pricing, Section 2(a)(41) of the 1940 Act and Rules 2a-4 and 2a-7 thereunder,
net asset value errors, and "as-of" processing (e.g., relating to error
corrections, post-trade revisions or similar processing policies that may
exist);
(vii) Such other documents, certificates or opinions which BNYM
reasonably believes to be necessary or appropriate in the proper performance of
the Services, subject to the agreement of the Fund, which shall not be
unreasonably withheld; and
(viii) Any amendment, revocation or other document altering, adding,
qualifying or repealing any document or authority called for under this Section.
B. The Fund will provide BNYM with notice and/or a copy of any material
amendment to the items set forth in this Section. BNYM will not be responsible
for changing or conforming the Services to any such amendment until BNYM has
received notice or a copy of such change, and the parties have negotiated in
good faith to reach mutually agreeable terms applicable to such additional
service(s) and have amended any affected Schedules.
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6. Representations and Warranties of the Fund
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The Fund represents and warrants the following:
A. The Fund is duly organized and validly existing, in good standing under
the laws of the jurisdiction of its organization, and qualified to do business
in each jurisdiction in which the nature or conduct of its business requires
such qualification.
B. The Fund has requisite authority and power under its organizational
documents and applicable law to execute, deliver, consummate and perform this
Agreement; this Agreement is legally valid, binding and enforceable against the
Fund; and the Fund has all necessary registrations and/or licenses necessary to
conduct the activities as described in the Registration Statement.
C. There is no pending or threatened legal proceeding or regulatory action
that would materially impair the Fund's ability to perform its obligations
under this Agreement. The Fund's performance of its obligations under this
Agreement will not conflict with or result in a breach of any terms or
provisions of any agreement to which the Fund is a party or bound, and does not
violate any applicable law.
D. The Fund will use commercially reasonable efforts to ensure that BNYM has
sufficient access to the Fund's service providers, brokers, Independent
Accountant and other authorized agents (each a "FUND AGENT"), and related
parties of any of them, in order to obtain the information BNYM will need to
perform the Services; provided that, BNYM shall bear no liability with respect
to the Fund Agent information to which BNYM had no access.
E. To the best of the Fund's knowledge, all the information relating to the
Fund given to BNYM in connection with the transactions contemplated by this
Agreement is full, complete and accurate, and BNYM may reasonably rely on such
information until it receives written notice from or on behalf of the Fund of
any changes to such information.
F. The Fund has provided BNYM with a current list of all approved
independent pricing, fair value information, and other data information vendors
that are to be used by BNYM in rendering the Services, as set forth in
Schedule D to this Agreement, and the Fund will promptly reflect any changes
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to such list in a revised Schedule D.
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G. The Fund has appropriate procedures and agreements in place to protect
the confidentiality of any non-public portfolio holdings information of the
Fund that the Fund or its agents direct BNYM to disclose or transmit to third
parties before the Fund publicly discloses such information.
H. The Fund has the requisite amount and scope of fidelity bond coverage
required by Rule 17g-1 under the 1940 Act, and has directors' and officers'
errors and omissions insurance coverage.
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7. Representations and Warranties of BNYM
--------------------------------------
BNYM represents and warrants to the Fund the following:
A. BNYM is duly organized as a New York state chartered bank; is in good
standing; and is qualified to do business in each jurisdiction in which the
nature or conduct of its business requires such qualification.
B. BNYM has requisite authority and power under its organizational documents
and applicable law to execute, deliver, consummate and perform this Agreement;
this Agreement is legally valid, binding and enforceable against BNYM; and BNYM
has all necessary registrations and/or licenses necessary to perform the
Services described in Schedule B.
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C. There is no pending or threatened legal proceeding or regulatory action
that would materially impair BNYM's ability to provide the Services. BNYM's
performance of the Services will not conflict with or result in a breach of any
of the terms or provisions of any agreement to which BNYM is a party or bound,
and does not violate any applicable law to which BNYM is subject.
D. BNYM has completed, obtained and performed all registrations, filings,
approvals, and authorizations, consents or examinations required by any
government or governmental authority to which BNYM is subject, to perform the
Services contemplated by this Agreement and will maintain the same in effect
for so long as this Agreement remains in effect.
E. To the best of BNYM's knowledge, all the information relating to BNYM
that BNYM or its authorized agents have given to the Fund in connection with
the transactions contemplated by this Agreement is full, complete and accurate
and the Fund may reasonably rely on such information until it receives written
notice from BNYM of any changes.
F. BNYM will maintain a fidelity bond and an insurance policy with respect
to errors and omissions coverage in form and amount that are commercially
reasonable in light of BNYM's duties and responsibilities under this Agreement.
G. BNYM has implemented and maintains reasonable procedures and systems
(including reasonable disaster recovery and business continuity plans and
procedures consistent with legal, regulatory and business needs applicable to
BNYM's delivery of the Services) to safeguard the Fund's records and data and
BNYM's records, data, equipment facilities and other property that it uses in
the performance of its obligations hereunder from loss or damage attributable
to fire, theft, or any other cause, and BNYM will make such changes to the
procedures and systems from time to time as are reasonably required for the
secure performance of its obligations hereunder.
EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, THERE ARE NO EXPRESS OR
IMPLIED REPRESENTATIONS OR WARRANTIES AS TO THE SERVICES UNDER THIS AGREEMENT
OR THE PERFORMANCE THEREOF, INCLUDING WITHOUT LIMITATION, THE MERCHANTABILITY
OR FITNESS FOR A PARTICULAR
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PURPOSE OF THE SERVICES (IRRESPECTIVE OF ANY COURSE OF DEALING, CUSTOM OR USAGE
OF TRADE).
8. Standard of Care
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BNYM shall act in good faith and exercise reasonable care in performing
the Services under this Agreement. BNYM's duties shall be confined to those
expressly set forth herein, and no implied duties are assumed by or may be
asserted against BNYM hereunder. In that regard, BNYM shall have no
responsibility for the actions or activities of any other party, including
service providers, except as provided in Section 4.
9. Indemnification and Limitation of Liability
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A. Except as set forth in subparagraph F. below, BNYM will not be liable to
the Fund for any loss incurred by the Fund as a result of any error of
judgment, mistake of law, act or omission in the course of, or in connection
with the Services rendered by, BNYM under the Agreement in the absence of
fraud, negligence or willful misconduct of BNYM or the reckless disregard of
its duties under the Agreement.
B. Except as set forth in subparagraph F. below, BNYM agrees to indemnify,
defend, and hold harmless the Fund, its trustees, directors, officers,
employees, agents and nominees and their respective successors and permitted
assigns from and against claims, demands, actions, suits, judgments,
liabilities, losses, fines, damages, costs, charges, and counsel fees
(collectively, "LOSSES") resulting directly and proximately from BNYM's fraud,
negligence or willful misconduct in the performance of the Services, or
reckless disregard of its duties under this Agreement.
C. The Fund agrees to indemnify, defend and hold harmless BNYM, its
trustees, directors, officers, employees, agents, and nominees and their
respective successors and permitted assigns from and against any Losses
resulting directly and proximately from BNYM's actions taken or omissions with
respect to or in connection with the performance of the Services or based, if
applicable, upon BNYM's reasonable reliance on information, records,
instructions or requests reasonably believed to be accurate and genuine
pertaining to the Services that are given or made to BNYM by the Fund, its
investment adviser, or its designated service providers with which BNYM must
interface in providing the Services; provided that this indemnification shall
not apply to actions or omissions of BNYM involving fraud, negligence, willful
misconduct, or reckless disregard in the performance of its duties under this
Agreement.
D. In order for these indemnification provisions to apply, each party
seeking indemnification or to be held harmless shall fully and promptly advise
each indemnifying party in writing of all pertinent facts concerning the
situation in question. Each party seeking indemnification will use reasonable
care to identify and notify each indemnifying party in writing promptly
concerning any situation which presents or appears likely to present the
probability of an indemnification claim. However, failure to do so in good
faith shall not affect the rights under this provision unless the indemnifying
party or parties, as the case may be, is materially prejudiced by such failure.
As to any matter eligible for indemnification, each indemnified party shall act
reasonably and in accordance with good faith business judgment, and
Page 11 of 32
LINCOLN ADVISORS TRUST
shall not effect any settlement or confess judgment without the consent of each
indemnifying party, which consent shall not be withheld or delayed unreasonably.
E. Each indemnifying party shall be entitled to participate in the defense
at its own expense, or assume the defense, of any suit brought to enforce any
claims subject to this indemnity provision. If the indemnifying party or
parties elect to assume the defense, it shall be conducted by counsel of their
choosing that is reasonably satisfactory to each indemnified party; each
indemnified party shall bear the fees and expenses of any additional counsel it
retains. If the indemnifying party or parties do not elect to assume the
defense of such suit, they will reimburse each indemnified party for the
reasonable fees and expenses of any counsel each indemnified party retains,
which is reasonably satisfactory to such indemnifying party or parties. The
indemnifying party or parties shall not effect any settlement without the
consent of each indemnified party (which shall not be withheld or delayed
unreasonably) unless such settlement imposes no liability, responsibility or
other obligation upon the indemnified party or parties and relieves them of all
fault.
F. BNYM agrees to reimburse the Fund or its shareholders (including former
shareholders) for any losses and reasonable reprocessing costs incurred by the
Fund or its shareholders (including former shareholders) resulting directly and
proximately from BNYM's negligence in calculating the net asset value per share
("NAV") for the Fund. BNYM's responsibility for reimbursing the Fund or its
shareholders (including former shareholders) will be in accordance with and
subject to the Fund's policies and procedures for addressing NAV errors set
forth in the appropriate Service Level Document, including without limitation a
materiality threshold of one (unrounded) whole cent per share per NAV error (or
such other materiality threshold as agreed upon by the parties in the
appropriate Service Level Document).
Notwithstanding the foregoing, the parties acknowledge and agree that
(i) BNYM will obtain and rely (without independent verification) upon prices
and quotes from authorized pricing, data and fair valuation information vendors
as identified in Schedule D or otherwise authorized under this Agreement, and
----------
(ii) BNYM will be without liability or responsibility for any errors or loss
occasioned by such reliance on such vendors or any errors caused by or
attributable to such vendors, subject to BNYM's material compliance with the
tolerance checks set forth in the appropriate Service Level Document.
G. Each party shall have a duty to mitigate damages for which the other
party or parties may become responsible. NOTWITHSTANDING ANYTHING IN THIS
AGREEMENT TO THE CONTRARY, IN NO EVENT SHALL THE FUND, BNYM, THEIR AFFILIATES
OR ANY OF ITS OR THEIR TRUSTEES, DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR
SUBCONTRACTORS BE LIABLE FOR EXEMPLARY, PUNITIVE, SPECIAL, INCIDENTAL, INDIRECT
OR CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT LIMITATION, ATTORNEYS' FEES), LOSS
OF BUSINESS, OR LOST PROFITS, EACH OF WHICH IS HEREBY EXCLUDED BY AGREEMENT OF
THE PARTIES REGARDLESS OF WHETHER SUCH DAMAGES WERE FORESEEABLE OR WHETHER
EITHER PARTY OR ANY ENTITY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
Page 12 of 32
LINCOLN ADVISORS TRUST
10.Books and Records, Disclosure, Retention, and Rights of Ownership
-----------------------------------------------------------------
A. BNYM shall maintain on behalf of the Fund all books and records which are
customary or which are legally required to be kept in connection with BNYM's
performance of Services, including without limitation those required by Rules
31a-1 and 31a-2 under the 1940 Act ("RECORDS"). BNYM will prepare and maintain
the Records at the Fund's expense, and the Records shall be the Fund's
property. BNYM will make the Records available for inspection by the SEC,
including giving the SEC access to the Records, and otherwise surrender the
Records promptly in accordance with Rule 31a-3 under the 1940 Act. BNYM will
allow the Fund and its authorized persons and representatives to review the
Records during BNYM's normal business hours or, upon reasonable notice, at such
other reasonable times as the Fund may request.
B. BNYM shall keep the Records confidential, except when: (i) disclosure is
required by law, (ii) BNYM is advised by counsel that it may incur liability
for failure to make a disclosure, (iii) BNYM is requested to divulge such
information by duly-constituted authorities or court process, or (iv) as
requested or authorized by the Fund (including pursuant to its policies and
procedures regarding selective disclosure of non-public portfolio information).
BNYM shall use commercially reasonable efforts to provide reasonable advance
notice to the Fund and its administrator of requests for disclosure pursuant to
items (i) - (iii) of the previous sentence, and to the extent reasonably
practicable to secure instructions as to such inspection, but shall not be
deemed to violate the confidentiality provisions of this Section or Section 11
if BNYM discloses such Records upon reasonable belief that it is obliged to do
so by applicable law or regulatory authority.
C. Upon and subject to payment of any undisputed and unpaid amounts owed to
BNYM under this Agreement, BNYM may at its option at any time after termination
of this Agreement, and shall promptly upon the Fund's demand or upon
termination of this Agreement, turn over to the Fund or its designated agent,
and cease to retain in BNYM's files, any Records created and maintained by BNYM
pursuant to this Agreement which are no longer needed by BNYM in the
performance of the Services or for its legal protection. If not so turned over
to the Fund, such Records will be retained by BNYM, at the expense of the Fund
(which shall be equal to the actual costs incurred by BNYM), for at least six
(6) calendar years from the year of creation or for such other period of time
as is required under applicable law. At the end of such period, such Records
will be turned over to the Fund unless the Fund authorizes in writing the
destruction of such Records.
D. Notwithstanding the foregoing, all computer programs, systems and
procedures employed or developed by or on behalf of BNYM, or on behalf of BNYM
by system providers or vendors used by BNYM, to perform the Services that are
not Records are the sole and exclusive property of BNYM.
11.Confidential Information; Trade Names, Trademarks and Service Marks
-------------------------------------------------------------------
A. "CONFIDENTIAL INFORMATION" of a party shall be maintained confidential by
any other party, and shall include: (a) any data or information that is
competitively sensitive material, and not generally known to the public,
including, but not limited to, information about product plans, marketing
strategies, finances, operations, customer relationships, customer
Page 13 of 32
LINCOLN ADVISORS TRUST
profiles, customer lists, sales estimates, business plans, and internal
performance results relating to the past, present or future business activities
of the Fund or BNYM, their respective subsidiaries and affiliated companies and
the customers, clients and suppliers of any of them; (b) any scientific or
technical information, design, process, procedure, formula, or improvement that
is commercially valuable and secret in the sense that its confidentiality
affords the Fund or BNYM a competitive advantage over its competitors; (c) all
confidential or proprietary concepts, documentation, reports, data,
specifications, computer software, source code, object code, flow charts,
databases, inventions, know-how, and trade secrets, whether or not patentable
or copyrightable; (d) non-public portfolio holdings information of the Fund;
and (e) anything designated as confidential. BNYM shall maintain adequate
safeguards to prevent the use of the Fund's non-public portfolio holdings
information by BNYM, its employees and affiliates for any purpose other than
performing the Services under this Agreement. BNYM also shall maintain adequate
safeguards to limit the dissemination of the Fund's non-public portfolio
holdings information to third parties in accordance with non-disclosure
agreements with the particular Fund, Instructions pursuant to Section 14, or
directions of the Fund under Section 15.C. However, Confidential Information
shall not be subject to such confidentiality obligations if it: (a) is already
known to a receiving party at the time it is obtained; (b) is or becomes
publicly known or available through no wrongful act of a receiving party;
(c) is rightfully received from a third party who, to the best of a receiving
party's knowledge, is not under a duty of confidentiality; (d) is released by a
protected party to a third party without restriction; (e) is required to be
disclosed pursuant to the Fund's Registration Statement or by a requirement of
a court order, subpoena, governmental or regulatory agency or law (provided the
disclosing party will promptly provide the other party written notice of such
requirement, to the extent such notice is permitted); (f) is relevant to the
defense of any claim or cause of action asserted against a receiving party; or
(g) has been or is independently developed or obtained by a receiving party.
B. BNYM also acknowledges Confidential Information includes nonpublic
personal information about the Fund's customers ("CUSTOMER INFORMATION") that
the Fund is required by Regulation S-P to keep confidential. Accordingly, BNYM
agrees that, to the extent it receives such Customer Information, it shall not:
(i) use or disclose Customer Information other than to carry out the
purposes for which the Fund or one of its affiliates disclosed such Customer
Information to BNYM; or
(ii) disclose any Customer Information other than:
(a) to Fund affiliates;
(b) to BNYM affiliates, provided that such affiliates need the
Customer Information to be able to provide the Services hereunder and
shall be restricted in use and disclosure of the Customer Information to
the same extent as BNYM;
(c) to subcontractors of BNYM or the Fund, provided that such
subcontractors need the Customer Information to be able to provide the
Services hereunder and shall have entered into a confidentiality
agreement no less restrictive than the terms hereof; and
Page 14 of 32
LINCOLN ADVISORS TRUST
(d) to comply with federal, state or local laws, rules and other
applicable legal requirements; to comply with a properly authorized
civil, criminal, or regulatory investigation, or subpoena or summons by
federal, state, or local authorities; or to respond to judicial process
or government regulatory authorities having jurisdiction for
examination, compliance, or other purposes as authorized by law
(provided BNYM will promptly provide the Fund written notice of such
requirement, to the extent such notice is permitted).
For purposes of this paragraph, the term "affiliate" shall have the
meaning set forth in Regulation S-P. To the extent any provisions of
this paragraph conflict with other terms of this Agreement, this
paragraph shall control.
C. Neither party shall use the trade name, trademark or service xxxx of the
other party without the prior written consent of the other party; provided,
however, that (a) either party may use the trade name, trademark or service
xxxx of the other party in connection with providing the Services under the
Agreement, or (b) the Fund may use the trade name, trademark or service xxxx of
BNYM in connection with their Registration Statements.
12.Reports
-------
A. BNYM shall furnish reports to the Fund, its Fund Agents and to others
that the Fund designates in writing at such times as are prescribed pursuant to
this Agreement to be provided or completed by BNYM, or as subsequently agreed
upon by the parties pursuant to this Agreement or any amendment thereto. The
Fund agrees to examine each report promptly and will communicate or cause to be
communicated any errors or discrepancies therein. If there are errors or
discrepancies in a report (except such errors and discrepancies as may not
reasonably be expected to be discovered by the recipient after conducting a
diligent examination) that are not so reported promptly, then a report will for
all purposes be accepted by and binding on the Fund and any other recipient,
absent fraud, negligence, willful misconduct, or reckless disregard of BNYM's
duties under this Agreement, and BNYM shall have no further responsibility with
respect to such report other than to correct and revise it.
B. No less frequently than every six months, BNYM shall cause its auditors
to perform a Type II SAS 70 audit, or the equivalent thereof, of BNYM's
internal controls and procedures relating to the Services provided to the Fund.
BNYM shall provide the Fund (together with its chief compliance officer or its
designated representative) with a copy of the report resulting from such Type
II SAS 70 audit, or the equivalent thereof, of BNYM's internal controls and
procedures relating to the Services provided to the Fund no later than 45 days
after the end of each applicable audit period. All such audit reports shall be
treated as Confidential Information.
13.Notices
-------
Any communication, notice or demand pursuant to this Agreement shall be
properly addressed, in writing and delivered by personal service (including
express or courier service),
Page 15 of 32
LINCOLN ADVISORS TRUST
registered or certified mail, or by facsimile with proof of proper transmission
and a means for confirmation of delivery to recipient, as follows:
Page 16 of 32
LINCOLN ADVISORS TRUST
IF TO BNYM:
The Bank of New York Mellon
One Boston Place
000 Xxxxxxxxxx Xx.
Xxxxxx, XX 00000
Attn: Xxxxx X. Xxxxx, Vice President, Client Service
Telephone: 617_ 000-0000
Facsimile: (000) 000-0000
Email: xxxxx.x.xxxxx@xxxxxxxxx.xxx
With a copy to:
The Bank of New York Mellon
BNY Mellon Legal Department
One BNY Mellon Center
000 Xxxxx Xxxxxx, 00/xx/ Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxxx Xxxxxxxxxx, Senior Counsel
Telephone: (000) 000-0000
Facsimile: (000)000-0000
The Bank of New York Mellon Corporation
One BNY Mellon Center
000 Xxxxx Xxxxxx, 00/xx/ Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxx Xxxxxxxxxxxxx, Esq., Senior Managing Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
IF TO THE FUND:
LINCOLN ADVISORS TRUST
0000 X. Xxxxxxx Xxxxxx
Xxxx Xxxxx, XX 00000
Attention: Chief Accounting Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
WITH A COPY TO:
LINCOLN ADVISORS TRUST
c/o Lincoln Financial Group
Page 17 of 32
LINCOLN ADVISORS TRUST
000 X. Xxxxxx-Xxxxxxx Xxxx
Xxxxxx, XX 00000
Attention: Chief Counsel - Funds Management
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
14.Authorized Persons and Instructions
-----------------------------------
A. The Fund shall deliver to BNYM a list of the names, titles and signatures
of all persons who are authorized to act on behalf of the Fund to issue
instructions to BNYM ("AUTHORIZED PERSONS" and "INSTRUCTIONS"), including any
limits on the scope of authority of any Authorized Persons. Fund trustees,
directors and officers shall be presumptively considered Authorized Persons
unless the Fund notifies BNYM to the contrary. The Fund shall promptly notify
BNYM of any changes to or limitations on the rights, powers and duties of any
Authorized Person, but in the absence of receiving such notice, BNYM shall be
entitled to deal with any Authorized Person and to act and rely upon any
Instructions reasonably believed to be from such Authorized Person.
B. An Instruction means a writing signed or initialed by one or more
Authorized Person. Each such writing shall set forth the specific transaction
or type of transaction involved. Oral instructions will be deemed Instructions
if BNYM reasonably believes them to have been given by an Authorized Person,
and the oral instructions are promptly confirmed in writing.
15.Advice, Reliance and Instructions
---------------------------------
A. BNYM may apply to the Fund at any time for Instructions and may consult
with BNYM's or the Fund's counsel, Independent Accountant and other experts
with respect to any matter arising in connection with the Services performed by
BNYM, and BNYM shall not be liable nor accountable for any action taken or
omitted by it in good faith in accordance with such Instructions or on the
advice of such counsel, Independent Accountant or other experts. To the extent
possible, BNYM shall notify the Fund at any time BNYM believes it needs advice
of the Fund's counsel, Independent Accountant or experts with regard to BNYM's
responsibilities and duties pursuant to this Agreement. If BNYM wishes to seek
and rely on legal advice from counsel that is neither the Fund's counsel nor
counsel in the regular employ of BNYM or its affiliated companies, and BNYM
seeks to be reimbursed for such counsel fees, then BNYM must notify and seek
prior approval of such affected Fund, which shall not be unreasonably withheld.
BNYM shall in no event be liable to the Fund or any Fund shareholder or
beneficial owner for any action reasonably taken or omitted pursuant to such
advice.
B. BNYM may rely conclusively upon the terms of a Registration Statement,
the minutes of Fund board meetings and any other Fund document BNYM reasonably
believes to be genuine unless and until BNYM receives Instructions to the
contrary.
C. Subject to the instructions of an Authorized Person, BNYM may provide
information pertaining to the Fund's portfolio holdings to entities designated
by such Authorized Person.
Page 18 of 32
LINCOLN ADVISORS TRUST
D. The Fund understands and acknowledges that the Services are intended to
assist the Fund and its board in their obligations to price and monitor pricing
of the Fund's portfolio securities, but BNYM does not assume responsibility for
the accuracy or appropriateness of pricing information received from the Fund
or other non-BNYM entities or pricing methodologies, including any fair value
pricing information or adjustment factors. The Fund further understands and
acknowledges that it retains overall responsibility to: (i) adopt policies and
procedures to monitor for circumstances that may necessitate the use of fair
value prices; (ii) establish criteria for determining when market quotations
are no longer reliable for a particular portfolio security; (iii) determine a
methodology or methodologies by which the Fund determines the current fair
value of portfolio securities; (iv) regularly review the appropriateness and
accuracy of the method used in valuing securities and make any necessary
adjustments; and (v) promptly communicate the foregoing in writing to BNYM
pursuant to Section 14.
E. The Fund authorizes BNYM to communicate, as required, with the Fund's
service providers, brokers, futures commission merchants, Independent
Accountant and/or other authorized agents and related parties of any of them to
obtain the information BNYM needs to perform the Services. In that regard, BNYM
agrees to cooperate with the Fund's Independent Accountant, to reasonably
support the Independent Accountant's engagement with the Fund, and to provide
the Independent Accountant reasonable access to the Records. BNYM also agrees
to provide periodic sub-certifications to the Fund's chief compliance officer
and certifying principal executive and financial officers relating to the
Services BNYM performs, based on a form of sub-certification that BNYM and the
Fund reasonably agree to, and subject to such limitations as may be reasonable
or necessary to not make a material misstatement, omission or untrue statement
of fact.
16.Compliance with Law
-------------------
A. In performing the Services, BNYM shall comply with all applicable laws,
and its standard of performance shall be in accord with such standards as may
be imposed by law and the requirements of all regulatory authorities. However,
unless specifically identified in the Services, nothing expressly or implicitly
contained in this Agreement is intended or shall be interpreted to confer upon
BNYM a duty to ensure that the Fund is acting in compliance with any applicable
laws. Except for the obligations of BNYM set forth in Schedule B, the Fund
----------
assumes full responsibility for the preparation, contents and distribution of
the Fund's Registration Statement and compliance with applicable laws,
including the requirements of the 1933 Act and the 1940 Act, and governmental
authorities having jurisdiction.
B. BNYM shall use its commercially reasonable efforts to make its employees
who are responsible for providing the Services ("RELEVANT EMPLOYEES") available
to federal, state and local governmental and regulatory and supervisory
authorities having jurisdiction over the performance of the Services
("GOVERNMENTAL AUTHORITIES") as may be required by such Governmental
Authorities pursuant to applicable law, subpoena or order, and as may be
requested by any Governmental Authorities on behalf of or with respect to the
Fund or any of its affiliates or as may be requested by the Fund to be made
available to such Governmental Authorities. To the extent legally permitted,
BNYM shall promptly notify the affected Fund of any request by any Governmental
Authorities for any Relevant Employees (except when the request for access to
Relevant Employees was made by the Fund). The affected Fund shall
Page 19 of 32
LINCOLN ADVISORS TRUST
cooperate, and shall use its commercially reasonable efforts to cause each of
its affiliates and service providers to cooperate, with BNYM in complying with
any notice, order, subpoena or request of any Governmental Authority. Except as
provided in Sections 8 and 9, BNYM shall have no liability to the Fund or any
third party for any claims, obligations, penalties or fines which may arise out
of or in relation to BNYM's compliance with this provision. In accordance with
Section 2.C.(vi), the affected Fund shall reimburse BNYM in connection with
providing such access. Nothing contained in this paragraph shall require BNYM
to disclose any proprietary or confidential information of BNYM or its other
customers and clients.
17.Governing Law and Jurisdiction
------------------------------
This Agreement and performance hereunder and all suits and proceedings
hereunder shall be governed by and construed in accordance with the internal
laws of the Commonwealth of Pennsylvania, without giving effect to conflict of
law principles. Each of the parties to this Agreement expressly and irrevocably
submits to the exclusive jurisdiction of the courts of Pennsylvania and waives
any claims of inconvenient forum or venue. To the extent that the laws of the
Commonwealth of Pennsylvania conflict with the applicable provisions of the
1940 Act, the applicable provisions of the 1940 Act shall control. The parties
hereby expressly waive, to the full extent permitted by applicable law, any
right to trial by jury with respect to any judicial proceeding arising from or
related to this Agreement.
18. Services Not Exclusive
----------------------
A. BNYM's Services are not exclusive to the Fund and BNYM shall be free to
render similar services to others.
B. BNYM shall perform the Services solely as an independent contractor and
no joint venture, partnership, employment, agency or any other relationship is
intended, accomplished or embodied in this Agreement. BNYM shall have the sole
and exclusive right to supervise, manage, control and direct its performance of
the Services, except that BNYM may be subject to performance standards and
measurements for performing the Services.
C. In performing the Services, BNYM is acting solely on behalf of the Fund
and no contractual or service relationship shall be deemed to be established
between BNYM and any other person, including without limitation the custodian
and Fund shareholders.
19.Force Majeure and Uncontrollable Events
---------------------------------------
BNYM shall maintain adequate and reliable computer and other equipment
necessary or appropriate to carry out its obligations under this Agreement.
Upon the Fund's reasonable request, BNYM shall provide supplemental information
concerning the aspects of its disaster recovery and business continuity plan
that are relevant to the Services. Notwithstanding the foregoing or any other
provision of this Agreement, BNYM assumes no responsibility hereunder, and
shall not be liable for, any damage, loss of data, business interruption, delay
or any other loss whatsoever caused by "Force Majeure Events." "FORCE MAJEURE
EVENTS" are events beyond the reasonable control of BNYM, its agents and its
Subcontractors (other than Subcontractors engaged by BNYM at the instruction of
the Fund). In the event of Force Majeure Events, or any
Page 20 of 32
LINCOLN ADVISORS TRUST
disaster that causes a business interruption, BNYM shall act in good faith and
follow applicable procedures in its disaster recovery and business continuity
plan and use all commercially reasonable efforts to minimize service
interruptions.
20. Severability
------------
If any provision of this Agreement shall be held or made invalid, the
remainder of this Agreement and the parties' rights and obligations under it
shall not be affected by such action, and the invalid provisions of the
Agreement shall be deemed to be severable only in the jurisdiction that so
determines.
21. Survivability
-------------
The following provisions shall survive beyond the expiration and termination
of this Agreement:
. all compensation provisions, including Section 2 Compensation and
----------------
Expenses, Section 3 regarding termination fees, costs and expenses,
--------
and Schedule C;
----------
. Section 4. Amendments, Assignment and Delegation;
-------------------------------------
. Section 6. Representations and Warranties of the Fund;
------------------------------------------
. Section 7. Representations and Warranties of BNYM;
--------------------------------------
. Section 9. Indemnification and Limitation of Liability;
-------------------------------------------
. Section 10. Books and Records, Disclosure, Retention, and Rights of
-------------------------------------------------------
Ownership;
---------
. Section 11. Confidential Information;
------------------------
. Section 14. Authorized Persons and Instructions;
-----------------------------------
. Section 19. Force Majeure and Uncontrollable Events; and
---------------------------------------
. Section 20. Severability.
------------
22. Contract Terms To Be Exclusive
------------------------------
This Agreement constitutes the complete agreement of the parties about the
covered subject matter, and supersedes all prior negotiations, understandings
and agreements bearing upon the covered subject matter. As noted in
Section 1.B., BNYM and the Fund may enter into Service Level Documents or other
interpretive documents in connection with this Agreement. Any such Service
Level Documents or interpretive agreements may be in writing and signed by all
parties, but shall not be deemed to be an amendment to this Agreement, and
because the intent of such agreements is to generally facilitate operations in
a flexible manner, the breach of
Page 21 of 32
LINCOLN ADVISORS TRUST
any such agreement shall not necessarily constitute a breach of this Agreement,
and the parties shall be free to change the terms of such agreements as
provided therein.
23.Waiver
------
A party's waiver of a breach of any provision of this Agreement shall not
operate or be construed as a waiver of any subsequent breach by any party. A
party's failure to insist upon strict adherence to any provision of the
Agreement shall not constitute a waiver or deprive such party of the right to
insist upon strict adherence to such provision.
24.Counterparts and Reproduction of Documents
------------------------------------------
This Agreement may be executed in any number of counterparts, each of which
is deemed an original and all of which together evidence the entire Agreement.
This Agreement and any amendments may be reproduced by any commercially
acceptable process. The parties agree that any such reproduction shall be
admissible in evidence as the original itself in any judicial or administrative
proceedings, whether or not the original is in existence and whether or not
such reproduction was made by a party in the regular course of business, and
that any enlargement facsimile or further reproduction of such reproduction
shall be likewise admissible in evidence.
25.Miscellaneous
-------------
Paragraph headings in this Agreement are included for convenience only and
are not to be used to construe or interpret this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed all as of the day and year first above written.
LINCOLN ADVISORS TRUST, on behalf
of its Portfolios THE BANK OF NEW YORK MELLON
By: /s/ Xxxxxxx X. Xxxxx, Xx. By: /s/ Xxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx, Xx. Name: Xxxxx X. Xxxxx
Title: Vice President and Chief Title: Vice President
Accounting Officer
Date: October 27, 2011 Date: October 27, 2011
Page 22 of 32
LINCOLN ADVISORS TRUST
SCHEDULE A TO THE
----------
FUND ACCOUNTING AND FINANCIAL ADMINISTRATION SERVICES
AGREEMENT BETWEEN THE BANK OF NEW YORK MELLON
AND LINCOLN ADVISORS TRUST
DATED OCTOBER 27, 2011
The following Fund and its Portfolios and share classes are covered by, and
made parties to, the Agreement as of the dates so indicated:
LINCOLN ADVISORS TRUST, a Delaware statutory trust
SEC Registration No. 811-22583 (1940 Act)
000-000000 (1933 Act)
TAXPAYER
NAME OF SERIES AND ANY DATE ADDED TO IDENTIFICATION NO.
SHARE CLASSES THE AGREEMENT CUSIP (PORTFOLIO)
---------------------- ------------- ----------- ------------------
Presidential Protected 11/01/2011 00-0000000
Profile 2010 Fund
Class A 53284T 102
Class C 53284T 201
Class I 53284T 300
Presidential Protected 11/01/2011 00-0000000
Profile 2020 Fund
Class A 53284T 409
Class C 53284T 508
Class I 53284T 607
Presidential Protected 11/01/2011 00-0000000
Profile 2030 Fund
Class A 53284T 706
Class C 53284T 805
Class I 53284T 888
Presidential Protected 11/01/2011 00-0000000
Profile 2040 Fund
Class A 53284T 870
Class C 53284T 862
Class I 53284T 854
Presidential Protected 11/01/2011 00-0000000
Profile 2050 Fund
Class A 53284T 847
Class C 53284T 839
Class I 53284T 821
Page 23 of 32
LINCOLN ADVISORS TRUST
Each party represents and warrants to the other party that it has full
authority to enter into this Amendment upon the terms and conditions hereof and
that the individual executing this Amendment on its behalf has the requisite
authority to bind such party to this Amendment.
LINCOLN ADVISORS TRUST, on behalf THE BANK OF NEW YORK MELLON
of its Portfolios
By: /s/ Xxxxxxx X. Xxxxx, Xx. By: /s/ Xxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx, Xx. Name: Xxxxx X. Xxxxx
Title: Vice President and Chief Title: Vice President
Accounting Officer
Date: October 27, 2011 Date: October 27, 2011
Page 24 of 32
LINCOLN ADVISORS TRUST
SCHEDULE B TO THE
----------
FUND ACCOUNTING AND FINANCIAL ADMINISTRATION SERVICES
AGREEMENT BETWEEN
THE BANK OF NEW YORK MELLON AND LINCOLN ADVISORS TRUST,
DATED OCTOBER 27, 2011
FUND ACCOUNTING AND FINANCIAL ADMINISTRATION SERVICES
-----------------------------------------------------
BNYM shall perform for the Fund and each of its Portfolios the following fund
accounting, financial administration and related services. Unless otherwise
noted, capitalized terms used herein shall have the same meanings assigned to
them in the Agreement.
A. VALUATIONS
-------------
In accordance with the 1940 Act, the Fund's pricing policies and procedures
delivered to BNYM, and the Fund's prospectus and statement of additional
information, and subject to the existence of authorized licensing arrangements
and Instructions, BNYM will perform the following pricing and valuation
services:
1. Perform the necessary functions to calculate daily the net asset value per
share ("NAV") for each share class of each Portfolio of the Fund.
2. Calculate the value of the assets of each Portfolio by obtaining securities
prices and readily available market quotations from independent pricing
sources, subject to any adjustments by the fair valuation information
vendors, in each case using a source/vendor approved by the Fund and listed
in Schedule D. If market quotations for portfolio securities are not readily
----------
available, notify the Fund and obtain prices from authorized broker sources
and/or use fair values as determined in good faith by the Fund's board of
directors/trustees, which includes, but is not limited to, using values
determined by the Fund's pricing policies and procedures and values approved
by the Fund's Valuation/Pricing Committee.
3. Assist in resolving pricing discrepancies and implement mutually agreed upon
price variance thresholds and notification processes.
4. In accordance with the Fund's NAV error correction policies provided to
BNYM, notify the Fund promptly upon discovery of NAV errors of a Portfolio
and initiate correction processes.
B. CALCULATION AND PAYMENT OF EXPENSES
--------------------------------------
1. Based upon information provided by one of the Fund's Authorized Persons to
BNYM, calculate asset-based fees and submit to the Fund Treasurer/Principal
Financial Officer for approval, and instruct the custodian to wire fee
payments to the service providers.
2. Accrue expense waivers based on Instructions and provide reporting of
accruals of expense waivers.
3. Accrue and allocate fee payments to directors/trustees and other officers of
the Fund paid directly by the Fund according to Instructions and on a
monthly basis forward cash to the Fund's Authorized Persons in the amount
necessary to make such payments to the directors/trustees and other officers
of the Fund.
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4. Prepare expense reports, liabilities analysis and budgets for each Portfolio
of the Fund for review and approval by the Fund Treasurer/Principal
Financial Officer, including maintaining detailed records pertaining to
expense accruals and payments, adjusting reports to reflect accrual
adjustments, and monitoring all Fund expenses.
5. Forward any invoices payable by the Fund to the Fund's Authorized Persons
for review and approval. Pay any invoices approved by the Fund's Authorized
Person for payment on behalf of the Fund. Allocate such invoices among the
Portfolios in accordance with pre-established instructions from the Fund's
Authorized Persons. Record the payment of invoices on the Fund's books.
6. Provide to the Fund a monthly summary of disbursements.
C. FINANCIAL REPORTING
----------------------
1. Prepare agreed upon financial reporting information for the Fund and/or each
Portfolio: (i) for proxy/information statements, registration statements
(including prospectuses, statements of additional information, and business
combination/exchange offers under Form N-14), Section 19 notices, periodic
shareholder reports (both semi-annual and annual reports), Form N-CSRs, Form
N-Qs, Form N-SARs and such other communications required or otherwise sent
to investors and/or filed with regulatory agencies; (ii) to the Investment
Company Institute; (iii) to statistical reporting and rating agencies; and
(iv) regarding a closed-end Fund's issuance of preferred stock and
commercial paper, if any. Additionally, review and provide comments to the
Fund or a Fund Agent to allow for completion of such reports in accordance
with defined timelines.
2. Prepare other reports, notices or financial documents in accordance with
generally accepted accounting principles, as required by federal, state and
other applicable laws and regulations, in each case as the parties may agree
upon from time to time.
3. Assist in preparing financial information relating to a closed-end Fund's
earnings press release, if any.
4. Provide financial information needed for the offer letter to assist with
buyback and tender offers for a closed-end Fund, if any.
5. Provide 1940 Act Rule 2a-7 amortized cost monitoring (xxxx-to-market)
reports for a money market Portfolio with such frequency as is agreed upon
by parties, or as may be required by Rule 2a-7 and the Fund's policies and
procedures.
6. Prepare and provide such detailed financial reports as may be necessary
for the Fund's board of directors'/trustees' reporting process and as the
parties may agree upon from time to time.
7. Provide sub-certifications in an agreed-upon form to the Fund's chief
compliance officer and certifying principal executive and financial officers
with respect to the generation of financial statements and other financial
reporting performed by BNYM.
D. PORTFOLIO SECURITIES TRANSACTIONS
------------------------------------
Based on information that is provided to BNYM by the Fund, its investment
adviser, and the Fund's Authorized Persons, BNYM will perform the following
functions:
1. Maintain records of investment, capital share, and income and expense
activities for each Portfolio by: (i) recording purchases and sales of
investments; (ii) recording corporate actions and capital changes relating
to investments; (iii) accruing interest, dividends and
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LINCOLN ADVISORS TRUST
expenses on investments; and (iv) maintaining the historical tax lots and
income history for investments.
2. In instances where BNYM is the custodian of the affected portfolio
securities, notify, as directed, the applicable investment adviser (or, if
applicable, sub-adviser) with respect to mandatory and voluntary corporate
actions. The Fund's elections (on actions where elections and options exist)
on voluntary corporate actions must be communicated to BNYM by one of the
Fund's Authorized Persons on the deadline date stated on the corporate
actions notice, allowing a reasonable amount of time before the stated
deadline for BNYM to input the election on the fund accounting system and
notify the custodian (as applicable). BNYM will use commercially reasonable
efforts to respond on behalf of the Fund if a response is received by BNYM
after the deadline date.
3. In instances where BNYM is not the custodian of the affected portfolio
securities, BNYM will notify, as directed, the applicable investment adviser
(or, if applicable, sub-adviser) with respect to mandatory and
voluntary corporate actions upon BNYM's receipt of the corporate action
information. In addition, where BNYM receives mandatory and voluntary
corporate action information in its capacity as portfolio accountant for
other clients on the same accounting platform, BNYM agrees to use
commercially reasonable efforts to identify actions applicable to the Fund's
portfolio securities. However, BNYM assumes no liability for failing to
identify and provide notice of such actions with respect to a portfolio
security when BNYM does not separately receive notice from the custodian for
such portfolio of securities. The Fund's elections (on actions where
elections and options exist) on voluntary corporate actions must be
communicated to BNYM by one of the Fund's Authorized Persons on a date
established by BNYM sufficiently in advance of the deadline date stated on
the custodian's corporate actions notice to permit BNYM to input the
election on the fund accounting system and notify the custodian by its
stated deadline. BNYM will use commercially reasonable efforts to respond on
behalf of the Fund if a response is received by BNYM after a deadline date.
4. Book corporate action activity upon timely receipt of information and
Instructions from one of the Fund's Authorized Persons.
5. Receive, update and process daily trade files from the Fund investment
adviser's order management system.
6. Based on Instructions from one of the Fund's Authorized Persons or the Fund
Treasurer/Principal Financial Officer, implement tax lot relief methodology.
7. Based on Instructions from an Authorized Person file proof of claim notices
with respect to class actions involving the portfolio securities of the
Portfolios.
E. DIVIDENDS & DISTRIBUTIONS
----------------------------
Subject to review and approval of the Fund's Treasurer/Principal Financial
Officer, BNYM will perform the following functions:
1. Provide the Fund's transfer agent, dividend disbursing agent and custodian
with such information as is required for such parties to effect the payment
of dividends and distributions and to implement the Fund's dividend
reinvestment plan, if any.
2. Calculate income projections and provide such projections to the Fund for
completion of the Section 19(a) notices and respond to any questions or
issues raised by such projections.
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3. Periodically calculate and report each Portfolio's "investment company
taxable income," "net capital gain" distributions, and realized and
unrealized capital gains, and calculate amount of distribution to avoid
application of excise tax, in accordance with IRS Subchapter M requirements
and the Portfolio's distribution policies as disclosed in the Portfolio's
prospectus and established by resolution of the Fund's board of
directors/trustees.
F. RECONCILIATION AND CASH MANAGEMENT
-------------------------------------
1. Reconcile trade tickets and fund holdings list with investment adviser
records on a daily basis.
2. Reconcile the cash and portfolio investments of the Portfolio with the
records of the Fund's custodian, and provide corresponding reconciliation
reports to the Fund and Fund Agents.
3. Calculate and provide cash projections daily for each Portfolio of the Fund
based on estimates of portfolio security transactions (including projected
income and dividend receipts), shareholder transactions, and Fund
distributions/reinvestments.
4. Calculate and provide daily the cash available for each Portfolio of the
Fund.
5. In coordination with the Fund's investment adviser, allocate trades among
the Portfolios with respect to master repurchase agreement investments and
other short-term investments.
G. SHAREHOLDER ACTIVITY
-----------------------
1. Record and reconcile daily shareholder activity, including: (i) recording
subscriptions, redemptions, and dividend reinvestments; (ii) reconciling
settlements of shareholder activity; and (iii) recording Portfolio shares
outstanding to the records maintained by each Portfolio's transfer agent and
communicate exceptions to transfer agent which is responsible for
researching exceptions.
2. Provide financial and pricing information to support transfer of portfolio
securities in connection with shareholder transfer-in-kind (purchase and
redemption) transactions.
3. Support the estimation/price protection process and other "post-nightly" and
"as of" shareholder recording processes, including but not limited to,
defined contribution clearance and settlement and same day cash.
H. FUND PERFORMANCE INFORMATION
-------------------------------
1. Calculate each Portfolio's performance, including calculations of yield,
total return, expense ratio, portfolio turnover rate and dollar-weighted
average maturity, as applicable, in accordance with standardized SEC
reporting requirements, and provide to the Fund. Calculate and provide such
additional performance information as may be reasonably requested by the
Fund or the Fund's Authorized Persons.
I. AUDIT SUPPORT
----------------
1. Provide timely assistance with audit requests from the Fund, its internal
auditors, its Independent Accountants, and regulatory agencies. Respond to
inquiries from other Fund Agents regarding BNYM's processes and interface
with the Fund Agents to support annual SAS 70 audits, or the equivalent
thereof, of the Fund Agents.
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2. Prepare work papers for the Fund's annual audit by the Fund's Independent
Accountants, and coordinate the annual audit by the Fund's Independent
Accountants.
3. Provide results of BNYM's semi-annual SAS 70 audits, or the equivalent
thereof.
J. TAX REPORTING
----------------
1. Provide the financial information necessary for the Fund's preparation of
its federal, state and city tax returns and ancillary schedules, including
year-end excise tax distributions, and compliance with Subchapter M and
Section 4982 of the Internal Revenue Code of 1986 (the "Code"). Provide
completed Internal Revenue Service forms for the Fund, such as Form
1120-RIC, necessary to file tax returns in accordance with filing deadlines
and maintain copies of all tax returns and related workpapers.
2. Provide financial data regarding portfolio investments to the Fund's
transfer agent to support the production of Form 1099s and similar
shareholder tax reporting.
K. COMPLIANCE MONITORING
------------------------
1. Establish and maintain, and provide summaries of, internal operating
policies and procedures to support the performance of the Services by BNYM.
2. Conduct testing of each Portfolio for compliance with the Code's
requirements to qualify as a regulated investment company, including but not
limited to: (i) quarterly diversification requirements; (ii) annual income
qualification test; and (iii) annual distribution requirements (including
avoiding application of excise taxes). Provide the results to the Fund's
chief compliance officer.
L. DATA FEEDS
-------------
Subject to the existence of authorized licensing arrangements and Instructions,
BNYM will perform the following functions:
1. Disseminate each Portfolio's NAV, dividend and portfolio data to Fund Agents
and Fund-authorized third parties (including, if a closed-end fund, the
stock exchange on which the Fund is listed) and maintain quality controls
necessary to ensure accuracy of the data.
2. Provide holdings information to the Fund's proxy voting agent on a monthly
basis in support of Form N-PX preparation and filing requirements.
3. Provide month-end data feeds at the end of the 1/st/ business day of the new
month and subsequent month-end feeds as data changes in the month-end area.
4. Provide daily data feeds inclusive of that day's trading activity to the
Fund.
5. Provide the necessary data feeds to retirement systems (mainframe).
6. Provide the capability to re-transmit data feeds for past periods.
7. Provide to Bloomberg price/cash file daily.
8. Provide the data necessary for the Fund's internet/intranet applications and
maintain the subject matter expertise and quality controls required to
ensure data accuracy.
9. Provide the release management plan (software development lifecycle
process), release cycle and prior notification of any changes that affect
the data feeds.
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M. BUSINESS CONTINUITY
----------------------
1. Provide summaries of BNYM's disaster recovery plan for business continuity,
together with summaries of any disaster recovery testing and results, with
respect to those functions performed by BNYM, except that BNYM is not
responsible for disaster recovery plans for business continuity with respect
to any underlying system upon which BNYM relies and BNYM neither operates
nor controls. Conduct and participate in pre-defined disaster recovery
testing as reasonably requested.
N. PERFORMANCE OF SERVICES BY BNYM
----------------------------------
1. Monitor BNYM's performance and provide a monthly performance monitoring
report against mutually agreed upon metrics.
2. Develop and implement corrective action plans in the event of service
requirement defaults.
O. RELATIONSHIP MANAGEMENT
--------------------------
1. Provide client service support to the Fund, including access to day-to-day
points of contact and to points of escalation as necessary.
2. At a minimum, conduct semi-annual meetings with Fund management to discuss
trends, technology and strategic direction.
3. Conduct an annual meeting with Fund management to discuss the Services
provided, system functionality and documentation of policies and procedures.
P. BOOKS AND RECORDS
--------------------
1. Maintain the general ledger and other accounts, books and financial records
of the Fund, as required under Section 31(a) of the 1940 Act and the rules
thereunder in connection with the Services.
2. Comply with SEC and 1940 Act rules and regulations regarding record
retention and maintenance of records on- and off-site as required.
3. Provide the Fund's investment adviser with view and query access to the
accounting systems.
4. Assist with the set-up of new Fund accounts and the maintenance and
termination of existing Fund accounts.
Q. OTHER
--------
1. Provide financial administration and fund accounting support for projects
and processes as needed and/or required. Examples include establishment of
new registrants, series and/or classes; Fund and/or Portfolio mergers,
liquidations, conversions and proxy statements; insurance policy renewals;
and issues relating to the application of fees and expenses waivers. In the
event that completion of a project or process necessitates BNYM to expend
extraordinary expenses, both parties will negotiate in good faith to
compensate BNYM for all or a portion of these expenses while taking into
consideration other relevant factors such as cost sharing with other BNYM
clients and future revenue projections from such projects or processes.
2. Provide operational and financial reporting support to the Fund and each
Portfolio in connection with its credit facilities.
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3. As applicable, support the Fund's transfer agent with respect to dividend
re-purchase processing and communication with omnibus dealers.
LINCOLN ADVISORS TRUST, THE BANK OF NEW YORK MELLON
on behalf of its Portfolios
By: /s/ Xxxxxxx X. Xxxxx, Xx. By: /s/ Xxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx, Xx. Name: Xxxxx X. Xxxxx
Title: Vice President and Chief Title: Vice President
Accounting Officer
Date: October 27, 2011 Date: October 27, 2011
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