EXHIBIT (g)(11)
FORM OF CUSTODIAN SERVICE AND MONITORING AGREEMENT
THIS AGREEMENT made as of the ____ day of April, 2003 by and among
ING EQUITY TRUST ("Fund"), MBIA INSURANCE CORPORATION ("MBIA") and THE BANK OF
NEW YORK ("BNY").
WHEREAS, the Fund has established one or more series of the Fund,
each to be called a ING Principal Protection Fund (each a "Series") and will
continue to establish new Series of the Fund in the future, with an obligation
by the Fund, on behalf of each Series, that on a date certain (the "Guarantee
Maturity Date"), each shareholder of such Series will be entitled to redeem each
of his or her shares for an amount no less than the Guarantee per Share, the
calculation of which is described in the Fund's Registration Statement
("Repayment Obligation"); and
WHEREAS, the Fund has entered into a Financial Guaranty Agreement
with MBIA (the "Financial Guaranty Agreement") whereby MBIA will issue a policy
to support the Repayment Obligation of each Series ("Policy"); and
WHEREAS, Schedule A contains a list of each Series currently
existing to which this Agreement applies; and
WHEREAS, such Schedule A may be amended from time to time by mutual
written agreement of the parties hereto to include additional series as provided
for in the Financial Guaranty Agreement, whereupon such series shall become a
Series hereunder;
WHEREAS, in connection therewith, the Fund intends to open custody
accounts with BNY under the terms of the Custodian Agreement (the "Custodian
Agreement") between the Fund and BNY on behalf of each Series, to hold such
Series' portfolio investments; and
WHEREAS, under the terms of the Financial Guaranty Agreement, in
consideration of MBIA's issuing the Policy in respect of a Series, the Fund, on
behalf of such Series, has agreed to a particular investment strategy and to
provide an arrangement whereby trades executed for such Series through the
Guarantee Maturity Date for such Series will be monitored for conformity with
certain guidelines; and
WHEREAS, the Fund and MBIA wish for BNY to provide investment
monitoring services in respect of each Series, and BNY is willing to perform
such services upon the following terms and conditions; and
WHEREAS, the Fund and MBIA wish for BNY to provide trade execution
services in respect of each Series, and BNY is willing to perform such services
upon the following terms and conditions.
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration the parties hereto agree to the following:
1. Construction.
Unless the context of this Agreement otherwise clearly requires,
references to the plural include the singular, the singular the plural and the
part the whole and "or" has the inclusive meaning sometimes represented by the
phrase "and/or." The words "hereof," "herein," "hereunder" and similar terms in
this Agreement refer to this Agreement as a whole and not to any particular
provision of this Agreement. The section and other headings contained in this
Agreement are for reference purposes only and shall not control or affect the
construction of this
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Agreement or the interpretation thereof in any respect. Section, subsection,
schedule; exhibit and attachment references are to this Agreement unless
otherwise specified.
2. Custody and Monitoring Services.
The Fund, on behalf of each Series, will open with BNY one or more
custody account(s) designated "Series" (such designated custody account(s)
hereinafter referred to as "Series Account"). The Series Account will contain
the appropriate designation in its title and will be operated subject to the
terms of the Custodian Agreement between BNY and the Fund. BNY will monitor the
assets delivered to each Series Account for conformity with the guidelines set
forth in Schedule B attached hereto entitled Conforming Assets Guidelines (the
"Guidelines"). For purposes of this Agreement, BNY will only be responsible for
performing conforming assets tests on assets that are traded through the Series
Accounts and shall not be responsible for monitoring the continuing compliance
with the Guidelines of assets held in the Series Accounts. In order to carry out
the conforming assets tests, BNY will rely on the trade information that BNY
receives from the Fund on behalf of each Series and from broker confirmations
tendered by brokers to BNY through The Depository Trust Company's Institutional
Delivery Confirmation System ("DTC ID"). Such trade information must be
complete, properly formatted and provided to BNY in a timely manner. BNY shall
perform the conforming asset tests with respect to each asset added to each
Series Account promptly after receipt of the related trade information and in
any event within one business day of such receipt by BNY. If by applying the
conforming assets tests to the Series Accounts in respect of each Series an
instance of noncompliance with the Guidelines is noted, BNY will notify MBIA and
the Fund promptly of such noncompliance in writing via facsimile transmission.
Once BNY has notified the Fund and MBIA as to the existence of noncompliance
with respect to a Series, BNY
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shall have no further obligation or duty to the Fund, such Series or MBIA to
monitor the trade with respect to such Series, or to report its cure.
3. Notification of Event of Default/Trade Execution/Cure Notice/Obligation
to Reject Trades.
If MBIA notifies BNY, by giving a written notice to BNY, with a copy
to the Fund, substantially in the format of Exhibit 1 hereto, that an Event of
Default under the Financial Guaranty Agreement has occurred with respect to a
Series and remains uncured ("Event of Default Notice"), BNY will promptly
confirm receipt of such notice, via phone contact and facsimile to the Fund.
After or concurrently with BNY's receipt of an Event of Default
Notice and until the end of the related DK Period (as defined below), MBIA shall
be entitled to deliver to BNY (with a copy to the Fund) trade instructions in
the format of Attachment 1 to Exhibit 1 (for manual trade instructions) or in
the format of Attachment 2 to Exhibit 1 (for electronic instructions) with
respect to the Series Accounts in respect of a Series or in respect of all
Series as set forth in the Event of Default Notice. MBIA shall deliver to BNY,
with a copy to the Fund, a written notice of the cure of such default,
substantially in the format of Exhibit 2 hereto, promptly upon the occurrence of
such cure (the "Cure Notice").
From 12:01 a.m. eastern time on the Business Day (defined as a day
upon which the New York Stock Exchange is open for trading and is not a Saturday
or Sunday, and is neither a legal holiday nor a day on which banking
institutions are generally authorized or obligated by law or regulation to
close) immediately following the day upon which BNY receives an Event of Default
Notice from MBIA until 12:01 a.m. eastern time on the Business Day immediately
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following the day upon which BNY receives a Cure Notice from MBIA (a "DK
Period"), BNY shall reject and not act upon any trade instructions issued
directly by the Fund (or its investment adviser) for the Series Accounts in
respect of a Series or in respect of all Series as set forth in the Event of
Default Notice. With respect to the Series Accounts, BNY shall, upon the
termination of a DK Period, revert to its normal method of accepting trade
instructions from the Fund (or its investment adviser) as governed by the
Custodian Agreement. Nothing herein shall be construed as authorizing BNY to
reject for settlement securities transactions for which trade instructions were
issued prior to 12:01 am. eastern time on the Business Day immediately following
the day on which BNY receives an Event of Default Notice.
From the time BNY receives an Event of Default Notice through the
end of the related DK Period, BNY is irrevocably authorized and instructed (i)
to act upon any and all trade instructions delivered by MBIA and (ii) to execute
the transactions set forth in such instructions through a broker or dealer
designated in writing by MBIA for the Series Accounts in respect of a Series or
in respect of all Series as indicated in such Event of Default Notice. BNY will
promptly notify the Fund, with a copy to MBIA, of trades executed as a result of
instructions received by MBIA. Such notification will be made via transmission
of a trade execution file to the extent possible (substantially in the format of
Exhibit 5), by close of business on the date such trades are executed.
4. Delivery of Documents.
The Fund and MBIA will promptly furnish to BNY such copies, properly
certified or authenticated, of documents and other related information that BNY
may reasonably request or require to properly discharge its duties herein.
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5. Fees and Expenses.
(a) As compensation for the services rendered to the Fund and MBIA
pursuant to this Agreement, the Fund, on behalf of each Series, shall pay BNY
monthly fees determined as set forth in Schedule A hereto. Such fees are to be
billed monthly and shall be due and payable upon receipt of the invoice. The
Fund and BNY may agree, from time to time, to a change to the fees set forth in
Schedule A. Upon any termination of the provision of services under this
Agreement before the end of any month, the fee for the part of the month before
such termination shall be prorated according to the proportion which such part
bears to the full monthly period and shall be payable upon the date of such
termination. (b) The Fund may request additional services, additional
processing, or special reports, with such specifications and requirements
documentation as may be reasonably required by the Fund or by BNY. If BNY elects
to provide such services or arrange for their provision, it shall be entitled to
additional fees and expenses at its customary rates and charges.
(c) All fees, out-of-pocket expenses, or additional charges of BNY
shall be billed on a monthly basis and shall be due and payable by the Fund, on
behalf of each Series, upon receipt of the invoice.
(d) BNY will render, after the close of each month in which services
have been furnished, a statement reflecting all of the charges for such month.
Charges remaining unpaid thirty (30) days after receipt of such statement (with
the exception of specific amounts which may be contested in good faith by the
Fund) shall bear interest in finance charges equivalent to BNY's Prime Rate as
announced from time to time plus two (2) percent per annum and all costs and
expenses of effecting collection of any such sums, including reasonable
attorneys' fees, shall be paid by the Fund, on behalf of each Series, to BNY.
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(e) In the event that the Fund, on behalf of a Series, is more than
sixty (60) days delinquent in its payments of monthly xxxxxxxx in connection
with this Agreement (with the exception of specific amounts which may be
contested in good faith by the Fund), this Agreement may be terminated with
respect to such Series upon sixty (60) days' written notice to the Fund and MBIA
by BNY. The Fund must notify BNY in writing of any contested amounts, with a
copy to MBIA, within thirty (30) days of receipt of a billing for such amounts.
Disputed amounts are not due and payable while they are being investigated. MBIA
reserves the right to pay the delinquent amounts thereby eliminating BNY's right
to terminate the Agreement under this subsection.
6. Limitation of Liability and Indemnification
(a) In undertaking the performance of its obligations hereunder, BNY
shall not be liable for any loss, damage or expense suffered by the Fund, any
Series or MBIA in connection with the matters to which this Agreement relates or
the services provided hereunder except for general damages solely caused by or
resulting from willful misfeasance, bad faith or negligence on the part of BNY,
its officers, employees or agents, in the performance of its or their duties
under this Agreement. "General Damages" means only those damages as directly and
necessarily result from such act or omission without reference to any special
conditions or circumstances of the Fund, any Series or MBIA. In no event shall
BNY be liable for any indirect, special or consequential losses or damages of
any kind whatsoever (including but not limited to lost profits), even if BNY has
been advised of the likelihood of such losses or damages and regardless of the
form of action through which any such losses or damages may be claimed.
(b) BNY shall not be responsible for, and the Fund on behalf of each
Series shall indemnify and hold BNY, its officers, employees and agents
(collectively "BNY and its
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agents") harmless from and against any and all losses, damages, costs,
reasonable attorneys' fees and expenses, incurred by BNY or its agents in
connection with BNY's acceptance of this Agreement in the performance of
its/their duties hereunder in respect of such Fund, including but not limited to
those arising out of or attributable to:
(i) any and all actions of BNY and its agents required to be
taken pursuant to this Agreement;
(ii) the reliance on or use by BNY and/or its agents of
information, records, or documents which are received by BNY and/or
its agents and furnished to it or them by or on behalf of the Fund,
such Series or MBIA in accordance with this Agreement, and which
have been prepared or maintained by the Fund, such Series or MBIA or
any third party on behalf of the Fund, such Series or MBIA;
(iii) the Fund's or MBIA's refusal or failure to comply with
the terms of this Agreement or any agreement between such Series,
the Fund and MBIA relating to the matters herein, or the Fund's,
such Series', or MBIA's lack of good faith, or its actions, or lack
thereof, involving negligence or willful misfeasance;
(iv) any delays, inaccuracies, errors in or omissions from
information or data provided to BNY or its agents by MBIA or such
Series or the Fund or provided to BNY or its agents by data or
corporate action services or vendors;
(v) the offer or sale of shares by the Fund, such Series or
MBIA in violation of any requirement under the Federal securities
laws or regulations or the securities laws or regulations of any
state, or in violation any stop order or other determinations or
ruling by any federal agency or any state agency with respect to the
offer or sale of such shakes in such state (1) resulting from
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activities, actions, or omissions by the Fund, such Series or MBIA,
or (2) existing or arising out of activities, actions or omissions
by or on behalf of the Fund, such Series or MBIA prior to the
effective date of this Agreement;
(vi) all actions, omissions, or errors caused by third parties
to whom BNY, its agents, the Fund on behalf of such Series, or MBIA
has assigned any rights and/or delegated any duties under this
Agreement at the request of or as required by the Fund or MBIA; and
(vii) BNY and its agents acting upon electronic or written
trade instructions given by MBIA pursuant to Section 3;
provided that, in no event shall BNY or its agents be indemnified for its or
their negligence, bad faith or willful misfeasance in carrying out its or their
duties hereunder.
(c) MBIA shall indemnify and hold BNY, and its agents harmless from
and against any and all losses, damages, costs, reasonable attorneys' fees and
expenses, incurred by BNY and its agents insofar as such losses, damages or
costs arise out of, or are based upon, wrongful exercise by MBIA of its rights
under the Financial Guaranty Agreement to give instructions to BNY pursuant to
Section 3 hereof; provided that, in no event shall BNY or its agents be
indemnified for its or their negligence, bad faith or willful misfeasance in
carrying out its duties hereunder.
(d) In performing its services hereunder, BNY and its agents shall
be entitled to rely only on written instructions (oral instructions are not
permitted), notices or other communications, including electronic transmissions,
bearing or purporting to bear the manual or facsimile signature of any person
from each Series, the Fund or MBIA (an "Authorized Person") named, and in the
capacity identified, in lists (naming those persons who may authorize the
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transactions in Sections 2 and 3) which are attached hereto as Exhibit 3 (for
the Fund) and Exhibit 4 (for MBIA). Any changes to such lists will be furnished
to BNY from time to time in writing and given in the manner set forth in Section
9 hereof and will be signed by an officer of either the Fund or MBIA, as
appropriate, who shall provide BNY with evidence of his or her authority to make
such changes. Each of the Fund, in Exhibit 3, and MBIA, in Exhibit 4, will
provide BNY with authenticated specimen signatures of each Authorized Person,
and each of the Fund, on behalf of each Series, and MBIA shall indemnify BNY and
its agents for any loss or expense caused by reliance upon such authenticated
specimen signatures which BNY and its agents acting in good faith believe to be
genuine, valid and authorized, and shall be indemnified by each of the Fund and
MBIA as appropriate for any loss or expense caused by such reliance. In
addition, in performing its services hereunder, BNY and its agents also shall be
entitled to consult with and rely on the advice and opinions of legal counsel
retained by BNY or the Fund or MBIA, as necessary or appropriate, including
BNY's in-house counsel, and BNY shall not be liable for any action taken,
suffered or omitted by it in accordance with the advice of such counsel.
(e) In the event that BNY or its agents shall receive instructions,
claims or demand from the Fund, a Series, or MBIA which, in BNY's opinion,
conflict with any of the provisions of this Agreement, BNY shall notify the
Fund, such Series, or MBIA, as the case may be, of such conflict and shall be,
entitled to refrain from taking any action and its sole obligation shall be to
keep safely all assets in the Series Account until it shall receive
instructions, claims or demands from such party which, in BNY's opinion, conform
to the provisions of this Agreement.
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(f) The duties and responsibilities of BNY hereunder shall be
determined solely by the express provisions of this Agreement, except that the
settlement and safekeeping of assets in the Series Accounts shall be governed by
the terms of the Custodian Agreement between BNY and the Fund. Should there be
any conflict between the terms of the Custodian Agreement and the terms of this
Agreement regarding the services set forth in Section 3 of this Agreement, the
terms of this Agreement shall govern.
(g) BNY shall have no responsibility to make recommendations with
respect to the purchase, retention or sale of assets relating to the Series
Accounts or to maintain any insurance on assets in the Series Accounts for the
benefit of MBIA or any Series.
(h) BNY shall have no responsibility for any act or omission, or for
the solvency or insolvency, or notice to BNY or any of its affiliates or agents
of the solvency or insolvency, of any broker (other than a BNY affiliate
selected by BNY pursuant to Section 3 hereof to execute the trade instructions
provided by MBIA).
(i) Any liability of the Fund under this Agreement with respect to a
Series, or in connection with the transactions contemplated herein with respect
to such Series, shall be discharged only out of the assets of such Series, and
no other series of the Fund (including any other Series) shall be liable with
respect thereto.
7. Term.
This Agreement shall become effective immediately and shall
terminate on the earlier of the termination date under the Custodian Agreement
or December 31, 2008, unless earlier terminated by any party hereto on 90 days'
written notice to the other parties. Upon termination of this Agreement, the
Fund, on behalf of each Series, shall pay to BNY such compensation and any
out-of-pocket or other reimbursable expenses which may become due or
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payable under the terms hereof as of the date of termination or after the date
that the provision of services ceases, whichever is later.
8. Representations.
(a) The Fund, on behalf of each Series, represents and warrants that
the Fund has directed such Series' investment adviser to comply with the
Guidelines and purchase for such accounts only assets conforming to the
Guidelines.
(b) Each of the parties hereto represents and warrants that: (i) it
has the legal right, power and authority to execute; deliver and perform this
Agreement and to carry out all of the transactions contemplated hereby; (ii) it
has obtained all necessary authorizations, (iii) the execution, delivery and
performance of this Agreement and the carrying out of any of the transactions
contemplated hereby will not be in conflict with, result in a breach of or
constitute a default under any agreement or other instrument to which it is a
party or which is otherwise known to it; (iv) it does not require the consent or
approval of any governmental agency or instrumentality, except any such consents
and approvals which it has obtained; and (v) the execution and delivery of this
Agreement by it will not violate any law, regulation, charter, by-law, order of
any court or governmental agency or judgment applicable to it.
9. Notices.
Any notice required or permitted hereunder shall be in writing and
shall be deemed effective on the date of personal delivery (by private
messenger, courier service or otherwise) or upon confirmed receipt of telex or
facsimile or other electronic system acceptable to BNY, whichever occurs first,
or upon receipt if by mail to the parties at the following address (or such
other address as a party may specify by notice to the others):
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If to the Fund or a Series:
ING Equity Trust
0000 X. Xxxxxxxxxx Xxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxxxxx, Vice President and Secretary
Phone: (000) 000-0000
Fax: (000) 000-0000
If to MBIA:
MBIA Insurance Corporation
000 Xxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxx X. Xxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
If to BNY:
The Bank of New York
000 Xxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000
Attention:
Phone:
Fax:
10. Waiver.
The failure of a party to insist upon strict adherence to any term
of this Agreement on any occasion shall not be considered a waiver nor shall it
deprive such party of the right thereafter to insist upon strict adherence to
that term or any term of this Agreement. Any waiver must be in writing signed by
the waiving party.
11. Amendments.
This Agreement may be modified or amended from time to time by
mutual written agreement of the parties hereto. No provision of this Agreement
may be changed, discharged, or terminated orally, but only by an instrument in
writing signed by the parties.
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12. Severability.
If any provision of this Agreement is invalid or unenforceable, the
balance of the Agreement shall remain in effect, and if any provision is
inapplicable to any person or circumstance it shall nevertheless remain
applicable to all others persons and circumstances.
13. Governing Law.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without regard to laws as to conflicts of
laws, and shall be binding on all the parties hereto and their respective
successors and assigns. The Fund, MBIA and BNY hereby irrevocably submit to the
exclusive jurisdiction of the state and federal courts in the State and County
of New York for the purposes of any suit, action or other proceedings arising
out of this Agreement. The Fund, MBIA and BNY hereby irrevocably waive any
objection on the ground of venue, forum non conveniens, or any similar grounds,
and irrevocably consent to service of process by mail or in any manner permitted
by New York law, and irrevocably waive their respective rights to any jury
trial. The headings of the sections hereof are included for convenience of
reference only and do not form a part of this Agreement.
14. Benefit of the Parties.
This Agreement is for the exclusive benefit of the parties hereto
and shall not be relied upon by or create any beneficial interest in any person
not a party hereto including any shareholders of the Fund.
15. Counterparts:
This Agreement may be executed by the parties in a number of
counterparts each of which shall be an original and together shall constitute
one and the same agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their officers designated below as of the date first written
above.
ING EQUITY TRUST MBIA INSURANCE CORPORATION
By: By:
--------------------------------- ---------------------------------
Name: Name:
------------------------------- --------------------------------
Title: Title:
------------------------------ -------------------------------
THE BANK OF NEW YORK
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
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SCHEDULE A
FEES AND EXPENSES
Series (1) Annual Fee
------- ----------
ING Principal Protection Fund VII $ 12,000
------
(1) Any new series of the Fund added to this Agreement will be subject to prior
review by BNY, and the rate charged with respect to such new series may be
equal to or higher than the annual rate of $12,000, depending upon
transaction volumes.
SCHEDULE B
CONFORMING ASSETS GUIDELINES
BNY will utilize Open Bloomberg to determine whether the non-callable corporate
debt securities have the requisite ratings from S&P and Moody's in performing
the Conforming Assets Guideline review. In the event a corporate debt rating is
not available on Open Bloomberg, BNY will apply the rating from Moody's and
Standard & Poors, if available. If not, BNY will use the issuer's long-term debt
rating for monitoring purposes.
Equity Asset Test
- Equity securities of any company included in the S&P 500 Index, as
published by FactSet Data Systems, Inc. or by S&P
- Forward contracts on the S&P 500 Index, as traded on the Chicago
Mercantile Exchange
Fixed Income Assets Test
- U.S. Treasury or Agency Zeroes, including Government Trust Certificates,
which represent an interest in a government trust, the property of which
consists of (i) a promissory note of a foreign government no less than 90%
of which is backed by a full faith and credit guaranty issued by the
Federal Government of the United States of America (issued pursuant to
Title III of the Foreign Operations, Export, Financing and Related
Borrowers Programs Appropriations Act, 1988) and (ii) a security interest
in obligations of the United States Treasury backed by the full faith and
credit of the United States of America sufficient to support the remaining
balance (no more than 10%) of all payments of principal and interest on
such promissory note, and which are rated at least AAA by S&P or Aaa by
Moody's, maturing on, or within 90 days preceding, the Guarantee Maturity
Date
- Non-callable corporate debt securities, maturing within 3 years (preceding
or following) of the Guarantee Maturity Date and having a rating of at
least AA- by S&P or Aa3 by Moody's
- U.S. Treasury Notes and U.S. Agency Notes maturing within 3 years
(preceding or following) of the Guarantee Maturity Date
- if both Moody's and S&P have issued a rating thereon, such rating shall be
no less than Aa3/AA-
- U.S. Treasury Futures
Cash and Cash Equivalents Test
- Cash and
- the following short-term securities with remaining maturities of 180 days
or less:
(1) direct obligations of, and obligations fully guaranteed as to full and
timely payment by the full faith and credit of, the United States of
America, U.S. Agency Notes and U.S. Agency Zeroes;
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(2) demand deposits, time deposits or certificates of deposit of any
depository institution or trust company incorporated under the laws of the
United States of America or any state thereof; provided that at the time
of investment therein the commercial paper or other short-term unsecured
debt obligations thereof shall be rated at least A-1 by S&P or P-1 by
Moody's
(3) bankers acceptances issued by any depository institution or trust
company referred to in clause (2) above and
(4) commercial paper having at the time of the investment therein a rating
of at least A-1 by S&P or P-1 by Moody's
(5) "Qualified Repurchase Agreements" which shall mean, with respect to
any PPF and any Valuation Date, repurchase agreements that (i) mature in
no more than seven days (ii) are 102% fully collateralized with cash,
U.S.Treasury securities or X.X.Xxxxxx debentures, (iii) are
marked-to-market and remargined daily, and (iv) are issued by sellers that
at the time of issue have a short-term rating of P-1 from Moody's and A-1
or A-1+ from Standard and Poor's, or in the absence of a short-term rating
of the issuer, the parent of the issuer has a short-term rating of P-1
from Moody's and A-1 or A-1+ from Standard and Poor's, provided that a
repurchase agreement will not be a Qualified Repurchase Agreement, if
immediately after its purchase the aggregate amount of all Qualified
Repurchase Agreements would exceed 10% of the Total Net Assets.
18
EXHIBIT 1
EVENT OF DEFAULT NOTICE
[Date]
[Addressee BNY]
Re: Event of Default
Pursuant to Section 3 of the Custodian Service and Monitoring Agreement (the
"Agreement") dated____________ among ING Equity Trust ("Fund"), The Bank of New
York ("BNY") and MBIA Insurance Corporation ("MBIA"), please be advised that an
Event of Default, as defined in Section 4.1(___) relating to a default under
[Section 3.____ of](1) the Financial Guaranty Agreement dated among the Fund and
MBIA [with respect to ING Principal Protection Fund [___]][with respect to each
of the ING Principal Protection Funds], has occurred and [remains uncured.
Please reject and do not act upon any trade instructions for the settlement of
securities issued directly by [the Series Fund][all Series Funds] (or its
investment adviser or its sub-adviser) for [the] [all] ING Principal Protection
Fund[s] [___] Account # _________.] or [was cured on the date hereof, as
indicated in a Cure Notice dated the date hereof].(2) Please have the following
trades listed on the attached Trade Instructions executed in respect of ING
Principal Protection Fund [___].
MBIA Insurance Corporation
By:
Title:
copy: ING Equity Trust
0000 X. Xxxxxxxxxx Xxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxxxxx, Vice President and Secretary
Phone: (000) 000-0000
Fax: (000) 000-0000
--------
(1) Strike language in brackets and initial if Section 4.1(c) or (d) Event of
Default has occurred.
(2) Strike inappropriate language in brackets and initial.
19
EXHIBIT 1 - ATTACHMENT 1
MANUAL TRADE INSTRUCTIONS
(WITH RESPECT TO ING PRINCIPAL PROTECTION FUND [___])
From: MBIA Insurance Corporation
PORTFOLIO ACCOUNT BUY OR SELL SECURITY NAME TICKET/CUSIP QUANTITY
----------------- ----------- ------------- ------------ --------
1.
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2.
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3.
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4.
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5.
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6.
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7.
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8.
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Note: CUSIP Number is only required for U.S. Treasury Strip securities.
copy: ING Equity Trust
[ ]
-----------------
[ ]
-----------------
Attn: Counsel
Fax: [( ) - ]
--- --- ----
EXHIBIT 2
CURE NOTICE
[Date]
ING Equity Trust
0000 X. Xxxxxxxxxx Xxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxxxxx, Vice President and Secretary
Phone: (000) 000-0000
Fax: (000) 000-0000
Re: Event of Default
Pursuant to Section 3 of the Custodian Service and Monitoring Agreement (the
"Agreement") dated ___________ among ING Equity Trust ("Fund"), The Bank of New
York ("BNY") and MBIA Insurance Corporation ("MBIA"), please be advised that an
Event of Default identified in our written notice to BNY dated
__________________, as defined in Section 4.1(___) relating to a default under
[Section 3.____ of](3) the Financial Guaranty Agreement dated _____________
among the Fund and MBIA has been cured. Please revert to your normal method of
accepting trade instructions from the ING Principal Protection Fund [___] (or
its investment adviser or its sub-adviser) for ING Principal Protection Fund
[___] (as defined in the Agreement).
MBIA Insurance Corporation
--------------------------
By:
Title:
copy: The Bank of New York
-------------
(3) Strike language in brackets and initial if Section 4.1(c) or (d) Event of
Default has occurred.
EXHIBIT 3
AUTHORIZED PERSONS - ING EQUITY TRUST
The following ING Equity Trust personnel are authorized to instruct BNY as it
relates to ING Principal Protection Fund [___]:
--------------------------------------------------------------------------------
Telephone: Facsimile:
--------------------------------------------------------------------------------
Telephone: Facsimile:
--------------------------------------------------------------------------------
Telephone: Facsimile:
--------------------------------------------------------------------------------
Telephone: Facsimile:
23
EXHIBIT 4
AUTHORIZED PERSONS AND SIGNATURE SAMPLES - MBIA INSURANCE CORPORATION
The following MBIA Insurance Corporation personnel are authorized to instruct
BNY as it relates to ING Principal Protection Fund [___]:
--------------------------------------------------------------------------------
Telephone: Facsimile:
--------------------------------------------------------------------------------
Telephone: Facsimile:
--------------------------------------------------------------------------------
Telephone: Facsimile:
--------------------------------------------------------------------------------
Telephone: Facsimile:
24
EXHIBIT 5
TRADE EXECUTION; NOTIFICATION FILE
Each ING Principal Protection Fund must have a header (Record Type 1), the trade
execution detail for purchases and sales (Record Type 2), hash totals (Record
Type 3) one each for purchase and sales.
FLAT FILE FORMAT FOR TRADE PARSE
HEADER (RECORD TYPE 1)
FIELD POSITION LENGTH COMMENTS
----- -------- ------ --------
Record Type 1 1 "1"
Filler 2 1 space
Account 3 30 ING Portfolio
Trade Date 33 8 mm/dd/yy
Filler 41 1 space
Settlement Date 42 8 mm/dd/yy
Filler 50 1 space
Broker Number 51 6 Assigned by ING Operations
DETAIL (RECORD TYPE 2)
FIELD POSITION LENGTH COMMENTS
----- -------- ------ --------
Record Type 1 1 "2"
Filler 2 1 space
CUSIP 3 9
Filler 12 1 space
Ticker 13 6
Filler 19 1 space
Buy/Sell 20 1 "B" or "S"
Filler 21 1 space
Shares 22 7 no commas, no decimals
Filler 29 1 space
Price 30 11 six decimals, no commas
Filler 41 1 space
Commission 42 7 four decimals
Filler 49 1 space
Security Name 50 30
25
EXHIBIT 5 (CONT'D.)
TOTALS (RECORD TYPE 3)
FIELD POSITION LENGTH COMMENTS
----- -------- ------ --------
Record Type 1 1 "3"
filler 2 1 space
Buy/Sell 3 1 "B" or "S"
filler 4 1 space
# of trades 5 4 no comma
filler 9 1 space
# of shares 13 8 no commas, no decimals
filler 21 1 space
Gross cost/proceeds 22 13 no commas, two decimals
filler 35 1 space
Commission 36 13 no commas, three decimals
filler 49 1 space
SEC Fee 50 9 no commas, two decimals
filler 59 1 space
Net cost/proceeds 60 13 no commas, two decimals
26
