EXHIBIT 23(g)(1)(b)
FOREIGN CUSTODY MANAGER ADDENDUM
TO
GLOBAL CUSTODIAL SERVICES AGREEMENT, dated as of __________, 2007, by and
between LINCOLN VARIABLE INSURANCE PRODUCTS Trust, on behalf of its series
listed on Schedule A (the "Client") and CITIBANK, N.A. (the "Custodian").
The Client desires to have the Custodian assume and discharge the
responsibility of the Client's board of directors (hereinafter the "Board") to
select, contract with and monitor certain custodians of non-U.S. assets of the
Client held by the Custodian pursuant to the Global Custodial Services
Agreement (the "Agreement"). The Custodian agrees to accept the delegation and
to perform the responsibility as provided in this Addendum.
(A)Foreign Custody Manager:
(i) The Board hereby delegates to the Custodian, and the Custodian hereby
accepts the delegation to it, of the obligation to serve as the Client's
"Foreign Custody Manager" (as defined in Rule 17f-5(a)(2) under the
Investment Company Act of 1940, as amended from time to time), in respect to
the Client's foreign investments held from time to time by the Custodian
with any Subcustodian or Clearance System (each defined in the Agreement)
that is an Eligible Foreign Custodian (as defined in Rule 17f-5(a)(1)) and
that is not a Compulsory Depository as defined below. Foreign investments
are any Property (as defined in the Agreement for which the primary market
is outside the U.S.A.
(ii) As Foreign Custody Manager, the custodian shall:
(1) select Eligible Foreign Custodians to serve as foreign custodians
and place and maintain the Client's foreign investments with such
foreign custodians;
(2) in selecting an Eligible Foreign Custodian, first determine that
foreign investments placed and maintained in the safekeeping of each
Eligible Foreign Custodian shall be subject to reasonable care, based on
the standards applicable to custodians in the relevant market, after
having considered all factors relevant to the safekeeping of such
investments including without limitation, those factors set forth in
Rule 17f-5(c)(1)(i)-(iv);
(3) enter into written agreements with each Eligible Foreign Custodian
selected by the Custodian hereunder;
(4) determine that the written contract with each Eligible Foreign
Custodian (or, in the case of an Eligible Foreign Custodian that is a
Clearance System such contract (which may be between the Custodian and
the Clearance System or between an Eligible Foreign Custodian selected
by the Custodian and the Clearance System), the rules or established
practices or procedures of the
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Clearance System, or any combination of the foregoing) requires that the
Eligible Foreign Custodian will provide reasonable care for the foreign
investments, based on the standards applicable to custodians in the
relevant market, and that all such contracts, rules, practices and
procedures satisfy the requirements of Rule 17f-5(c)(2);
(5) provide written reports (x) notifying the Board of the placement of
foreign investments with each Eligible Foreign Custodian, such reports
to be provided at such time as the Board deems reasonable and
appropriate, but not less than quarterly, and (y) promptly notifying the
Board of the occurrence of any material change in the arrangements with
an Eligible Foreign Custodian;
(6) monitor the continued appropriateness of (x) maintaining the foreign
investments with Eligible Foreign Custodians selected hereunder and
(y) the governing contractual arrangements; it being understood,
however, that in the event the Custodian shall determine that any
Eligible Foreign Custodian would no longer afford the foreign
investments reasonable care, the Custodian shall promptly so advise the
Client and shall then act in accordance with Instructions (as defined in
the Agreement) with respect to the disposition of the foreign
investments; and
(7) exercise such reasonable care, prudence and diligence in serving as
the Foreign Custody Manager as the Custodian exercises in performing its
responsibility under the Agreement for the safekeeping of the Client's
Property (as defined in the Agreement).
(iii) Nothing in the paragraph shall relieve the Custodian of any
responsibility otherwise provided in the Agreement or this Addendum for loss
or damage suffered by the Client from an act of negligence or willful
misconduct on the part of the Custodian.
(iv) Nothing in this Addendum shall require the Custodian to make any
selection on behalf of the Client that would entail consideration of any
factor reasonable related to the systemic risk of holding assets in a
particular country including, but not limited to, such country's financial
infrastructure and prevailing settlement practices. The Custodian agrees to
provide to the Client such information relating to such risk as the Client
shall reasonable request from time to time and such other information as the
Custodian generally makes available to customers with regard to such
countries and risk.
(B)Compulsory Depositories:
(i) Notwithstanding the provisions of Section A above, the Custodian shall
not serve as Foreign Custody Manager in respect of any Compulsory
Depository, as defined below. The Custodian, through its branches or any
Subcustodians, shall be entitled to deposit and maintain the foreign
investments in Compulsory Depositories as the Custodian deems prudent and
appropriate, unless otherwise instructed by the Client or its delegate;
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(ii) Prior to depositing the foreign investments in any Compulsory
Depository, the Custodian shall notify the Client that a Compulsory
Depository will be used and provide the Client in respect of the Compulsory
Depository, with current information of the type the Custodian provided to
clients in the Custodian's informational binders entitled "SEC Rule 17f-5
Package". The Custodian, shall make its representatives available to
consult, in good faith, with such of the Client's delegates as the Client
shall designate regarding the advisability of depositing the Client's
foreign investments with any Compulsory Depository;
(iii) The Custodian shall provide the Client with reports regarding
Compulsory Depositories as provided in Section (A)(ii)(5) above and shall
provide the Client with such other information with regard to any Compulsory
Depository as the Client shall reasonable request; and
(iv) A "Compulsory Depository" shall mean a Clearance System that is a
non-U.S. securities depository or clearing agency the use of which is
mandatory (x) by law or regulation, (y) because securities cannot be
withdrawn from the depository or clearing agency or (2) because maintaining
securities outside the securities depository or clearing agency is not
consistent with prevailing local custodial practices. The Custodian shall
supply to the Client from time to time a schedule of the Compulsory
Depositories in which the Custodian holds the Client's foreign investments.
(C)Termination
(i) The Client may terminate this delegation upon written notice to the
Custodian.
(ii) The Custodian may terminate its acceptance of this delegation upon
ninety (90) days written notice to the Client.
IN WITNESS WHEREOF, the parties have caused this Addendum to be executed as of
the __________, 2007, by their respective officers thereunto duly authorized.
CITIBANK, N.A., NEW YORK OFFICE LINCOLN VARIABLE INSURANCE
PRODUCTSTRUST, on behalf of its
Funds listed on Schedule A
By: ----------------------------- By: -----------------------------
Name: ----------------------------- Name: -----------------------------
Title: ----------------------------- Title: -----------------------------
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Schedule A
Series of the Trust that are Subject to
this Foreign Custody Manager Addendum
LVIP Mid-Cap Growth Fund
LVIP Small-Cap Index Fund
LVIP MFS Value Fund
LVIP Mid-Cap Value Fund
LVIP S&P 500 Index Fund
LVIP Capital Growth Fund
LVIP Xxxxxxx International Growth Fund
LVIP Value Opportunities Fund
LVIP X. Xxxx Price Growth Stock Fund
LVIP Xxxxxxxxx Growth Fund
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