EXHIBIT (h)(3)(ii)
SECOND AMENDMENT TO AMENDED AND RESTATED
FINANCIAL GUARANTY AGREEMENT
SECOND AMENDMENT, dated as of September 26, 2003, (the "Amendment"), to
the Amended and Restated Financial Guaranty Agreement, dated as of March 1,
2002, as amended by the First Amendment dated November 12, 2002 (the
"Agreement") among MBIA INSURANCE CORPORATION, a New York monoline stock
insurance company (the "Insurer"), ING INVESTMENTS, LLC, an Arizona limited
liability company ("ING"), AELTUS INVESTMENT MANAGEMENT, INC., a Connecticut
corporation ("Aeltus"), and ING SERIES FUND, INC. (formerly known as "Aetna
Series Fund, Inc.") a Maryland corporation (the "Fund").
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)."
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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,"
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.
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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.
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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 MBIA INSURANCE CORPORATION
MANAGEMENT, 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 SERIES FUND, INC 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
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