EXHIBIT (h)(8)(viii)
EIGHTH AMENDMENT TO FINANCIAL GUARANTY AGREEMENT
EIGHTH AMENDMENT, dated as of September 26, 2003 (the "Amendment"), to
the Financial Guaranty Agreement, dated as of July 3, 2001, as amended by the
First Amendment dated as of January 14, 2002, the Second Amendment dated as of
March 28, 2002, the Third Amendment dated as of August 20, 2002, the Fourth
Amendment dated October 30, 2002, the Fifth Amendment dated November 12, 2002,
the Sixth Amendment dated February 10, 2003 and the Seventh Amendment dated
Xxxxx 00, 0000 (xxx "Xxxxxxxxx"), xxxxx XXXX INSURANCE CORPORATION (the
"Insurer"), ING INVESTMENTS, LLC ("ING") (successor to ING Pilgrim Investments,
LLC), AELTUS INVESTMENT MANAGEMENT, INC. ("Aeltus") and ING EQUITY TRUST (the
"Fund") (formerly known as Pilgrim Equity Trust).
WITNESSETH:
WHEREAS, ING, Aeltus and the Fund have requested, and upon this
Amendment becoming effected, the Insurer has agreed, that certain provisions of
the Agreement be amended in the manner provided for in this Amendment.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Defined Terms. All capitalized terms defined in the Agreement and
used herein shall have the meanings given to them in the Agreement.
2. Amendments to Section 1.1.
a. Section 1.1 of the Agreement is hereby amended by the addition
of the following new definition in alphabetical order:
"`Index ETF' shall mean, on any Valuation Date, an open-ended
registered mutual fund or unit investment trust that invests in a portfolio of
stocks designed to track the performance and dividend yield of the S&P 500
Index."
b. Section 1.1 of the Agreement is further amended by deleting
the definitions of the following defined terms in their entirety and
substituting in lieu thereof the following new definitions:
"`Asset Reallocation' shall mean, with respect to any PPF, (a) the sale
of Index Equities, Index Futures or Index ETFs held by such PPF and the
reinvestment of all or a portion of the proceeds therefrom in Fixed Income
Securities or (b) the sale of Fixed Income Securities held by such PPF and the
reinvestment of all or a portion of the proceeds therefrom in Index Equities,
Index Futures or Index ETFs."
"`Equity Portfolio' shall mean, with respect to any PPF, all
investments of such PPF which are Eligible PPF Investments defined in Sections
3.1(b)(v), (vi) or (vii)."
Page 1 of 4
"`Lower Covered Expense Ratio' shall mean, with respect to PPF I
through PPF VI, 1.75%, and for all other PPFs shall mean the sum, with respect
to each Class of Shares for each such PPF, of the product of the Net Expense
Percentage with respect to such Class of Shares and the Class Percentage with
respect to such Class of Shares on such Valuation Date, less a percentage equal
to the management fees paid to the Investment Adviser under the Investment
Management Agreement by such PPF."
c. Section 1.1 of the Agreement is further amended by the
addition of the following new sub-section as part of the definition of "Market
Value":
"(ix) with respect to any Index ETF held by a PPF, the product of
(A) the price per share of such Index ETF at the close of trading on such date,
as published in Reuters America or in a Substitute Valuation Source, times (B)
the number of shares of such Index ETF held by such PPF;"
d. Section 1.1 of the Agreement is further amended by the
addition of the following new sub-section as part of the definition of "Total
Net Assets":
"(xi) the aggregate Market Value of all Index ETFs held by such PPF
on such Valuation Date."
3. Amendment to Section 3.1. Section 3.1 of the Agreement is hereby
amended by deleting sub-sections 3.1(b)(v) and (vi) and replacing them with the
following:
"(v) Index Equities;
(vi) Index Futures; and
(vii) Index ETFs."
4. Amendment to Section 3.4. Section 3.4 of the Agreement is hereby
amended by the renumbering of existing paragraphs (a) through (d) to be Section
3.4(a)(1) through (4) and the addition of a new Section 3.4(b) as follows:
"In the event the Equity Portfolio's market value is $5 million or
less, the Sub-Adviser may invest the entire amount of the Equity Portfolio's
assets in Index Futures, in Index ETFs, or in a combination of Index Futures and
Index ETFs, subject to any limitation on the Fund's investments in such
securities. Notwithstanding the foregoing, at no time may the amount of the
Equity Portfolio's assets which are invested in Index ETFs exceed $5 million."
5. Amendments to Section 3.5 of the Agreement.
a. Section 3.5 (a) of the Agreement is hereby amended by
deleting, in clause (1), sub-clause (vi) in its entirety and inserting in lieu
thereof the following new sub-clause:
"(vi) 70% of the aggregate Market Value of all Index Futures and Index
ETFs held by such PPF on the Valuation Date for such Business Day,"
Page 2 of 4
b. Section 3.5 (a) of the Agreement is hereby amended by the
addition of", Index ETFs" after "Index Equities" in the fifth line of clause (2)
thereof.
c. Section 3.5(d) of the Agreement is hereby amended by the
addition of ", Index ETFs and/or Index Futures" after the words "Index Equities"
in the second line thereof.
6. Amendments to Section 4.2 of the Agreement.
a. Section 4.2(b)(iv) of the Agreement is hereby amended by the
addition of", Index Futures and/or Index ETFs" after the words "Index Equities"
in the first and fourth lines thereof.
b. Section 4.2(b)(vi) of the Agreement is amended by the addition
of", Index ETFs and/or" after the words "Index Equities" in the second line
thereof.
c. Section 4.2(b)(vii) of the Agreement is hereby amended by
deleting it in its entirety and substituting in lieu thereof the following:
"(vii) if such Event of Default is specified in Section 4.1 (b),
Index Futures, Index ETFs and Index Equities will be sold, to the extent
practicable, in the following order of priority and manner, to the extent
reasonably necessary to satisfy Section 4.2(b)(vi):
(A) a pro-rata portion of all Index Futures held by such PPF shall be
sold;
(B) all Index Futures held by such PPF shall be sold;
(C) a pro rata portion of all Index ETFs held by such PPF shall be
sold;
(D)all Index ETFs held by such PPF shall be sold;
(E) a pro rata portion of all Index Equities shall be sold; and
(F) all Index Equities shall be sold."
7. Conditions of Effectiveness. This Amendment shall become effective
on the date on which the Insurer, ING, Aeltus and the Fund shall have executed
and delivered this Amendment.
8. No other Amendments; Confirmation. Except as expressly amended,
modified and supplemented by this Amendment or by any prior amendment, the
provisions of the Agreement are and shall remain in full force and effect.
9. Governing Law. This Amendment and the rights and obligation of the
parties hereto shall be governed by, and construed and interpreted in accordance
with, the laws of the State of New York.
10. Counterparts. This Amendment may be executed by one or more of the
parties to this Agreement on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument.
Page 3 of 4
IN WITNESS WHEREOF, each of the undersigned have caused this Amendment
to be duly executed and delivered by their proper and duly authorized officers
as of the day and year first above written.
AELTUS INVESTMENT MANAGEMENT, MBIA INSURANCE CORPORATION
INC.
/s/ Xxxx Xxx Xxxxxxxxx /s/ XXXXX X. XXXXX
-------------------------------------- --------------------------
By: Xxxx Xxx Xxxxxxxxx BY: XXXXX X. XXXXX
Title: Senior Vice President Title: Managing Director
ING EQUITY TRUST ING INVESTMENTS, LLC
/s/ Xxxxxx X. Naka /s/ Xxxxxxx X. Xxxxxx
-------------------------------------- --------------------------
By: Xxxxxx X. Naka By: Xxxxxxx X. Xxxxxx
Title: SENIOR VICE PRESIDENT Title: EXECUTIVE VICE
PRESIDENT
Page 4 of 4
