Exhibit 99.(E)

ING PRIME RATE TRUST
SHAREHOLDER REINVESTMENT PROGRAM

PURPOSE

The purpose of the ING Prime Rate Trust Shareholder Reinvestment Program
(the "Program") is to provide shareholders of ING Prime Rate Trust (the "Trust")
with a convenient and economical way to purchase common shares of the Trust ("Shares") and to reinvest their cash dividends from the Trust in additional Shares.

IMPORTANT CONTACTS

     ADMINISTRATOR:                       TRUST:
     DST Systems, Inc.                    Shareholder Services Department
     Post Office Box 219368               Telephone: (800) 992-0180
     Kansas City, MO 64141
     Telephone: (800) XXXXXXX

DEFINITIONS

In addition to terms otherwise defined herein, the following terms, when written with capitalized initial letters, will have the following meanings when used in this Program.

"ADMINISTRATOR" means the entity that administers the Program, currently DST Systems, Inc.

"BENEFICIAL OWNER" means a shareholder that beneficially owns Shares that are registered in a name other than such shareholder's name (for example, where Shares are held in the name of a broker, bank or other nominee).

"BROKER AND NOMINEE FORM DUE DATE" means the date upon which a Broker and Nominee Form is due for a Beneficial Owner making an optional cash investment to participate in the next OCI Investment Date. The Broker and Nominee Form Due Date is two business days preceding the relevant OCI Pricing Period.

"DIVIDEND" means dividends and capital gain distributions, if any.

"DIVIDEND RECORD DATE" means a date established by the Trust upon which the Shareholders of Record on that day will be entitled to receive the next Dividend.

"DIVIDEND REINVESTMENT DATE" means the date upon which Dividends paid to participants in the Program are invested in additional Shares. Dividend Reinvestment Dates will be set by the Trust in advance. Participants can obtain a schedule of upcoming Dividend Reinvestment Dates by calling the Trust.

"DRIP" means Dividend Reinvestment.

"DRIP PRICING PERIOD" means the period encompassing the Valuation Date and the prior trading day.

"MARKET PRICE" means the volume-weighted average sales price, per Share, as reported on the New York Stock Exchange Composite Transaction Tape as shown for any day on Bloomberg screen AQR.

"OCI" means optional cash investment.

"OCI INVESTMENT DATE" means the date upon which optional cash investments received on or before the relevant OCI Payment Due Date are first applied by the Administrator to the purchase of Shares. OCI Investment Dates will be set by the Trust in advance. Please refer to ATTACHMENT A for a schedule of upcoming OCI Investment Dates.

"OCI PAYMENT DUE DATE" means the date upon which payment of any optional cash investment by a shareholder is due (by 4:00 pm Eastern time on such date) to be eligible for investment on the next OCI Investment Date. The OCI Payment Due Date is two business days preceding the relevant OCI Pricing Period.

"OCI PRICING PERIOD" means a period of five business days, beginning four Trading Days prior to the Valuation Date through and including the Valuation Date.

"OPEN MARKET" means transactions occurring on the New York Stock Exchange, any other exchange or over-the-counter.

"SHAREHOLDER OF RECORD" means a shareholder that owns Shares in his or her own name.

"TRADING DAY" means a day on which trades of the Shares are reported on the New York Stock Exchange.

"VALUATION DATE" means the date upon which it is determined, based upon the Market Price and the net asset value of Shares on such date, whether the Administrator will

purchase Shares on the Open Market or the Trust will issue the Shares for the Program. Please refer to ATTACHMENT A for a schedule of upcoming Valuation Dates.

PARTICIPATION

Participation in the Program is open to any shareholder of the Trust. By electing to participate in the Program, a participant appoints the Administrator as his/her agent and directs the Trust to pay to the Administrator all of the participant's cash Dividends, and directs the Administrator to purchase additional Shares of the Trust with such Dividends.

SHAREHOLDERS OF RECORD

A Shareholder of Record may participate directly in the Program by either telephoning the Trust at (800) 992-0180 or delivering a completed Shareholder Investment Program Participation Form to the Administrator. A Participation Form will be furnished at any time upon request to the Trust.

BENEFICIAL OWNERS

A Beneficial Owner may participate in the Program by either (i) becoming a Shareholder of Record by having ten or more shares registered into such shareholder's own name, or (ii) coordinating such Beneficial Owner's participation with a broker, bank or other nominee who is the record holder to participate on such shareholder's behalf.

A Beneficial Owner must contact their broker, bank or other nominee and complete any required documentation. The broker, bank or other nominee will coordinate participation with its securities depository, which will provide the Administrator with the information necessary to allow the Beneficial Owner to participate in the Program. See the section titled "Broker and Nominee Form" for a discussion of the requirements for optional cash investments of a Beneficial Owner.

Requests to participate in the Program will be processed as promptly as practicable.

The Program is intended for the benefit of investors in the Trust and not for persons or entities who accumulate accounts under the Program over which they have control for the purpose of exceeding the $100,000 per month optional cash investment maximum or who engage in transactions that cause or are designed to cause aberrations in the price or trading volume of the Shares.
Notwithstanding anything in the Program to the contrary, the Trust reserves the right to exclude from participation in the Program, at any time, (i) persons or entities who the Trust concludes are attempting to circumvent the Program's $100,000 per month optional cash investment maximum by accumulating accounts over which they have control, or (ii) any other persons or entities, as determined in the sole discretion of the Trust.

REINVESTMENT OF DIVIDENDS

Dividends paid to participants in the Program will be reinvested in additional Shares on each relevant Dividend Reinvestment Date and will be credited to shareholder accounts as of that date. For a discussion of the source and price of shares purchased pursuant to the reinvestment of Dividends, see the section titled "Source and Price of Shares for DRIP and OCI."

TO BE EFFECTIVE WITH RESPECT TO A PARTICULAR DIVIDEND, THE ADMINISTRATOR MUST RECEIVE TELEPHONE INSTRUCTIONS OR A PARTICIPATION FORM AT LEAST THREE BUSINESS DAYS BEFORE THE DIVIDEND RECORD DATE. Dividends will continue to be reinvested until the participant provides new telephone or written instructions to the Administrator or the Program is terminated.

OPTIONAL CASH INVESTMENTS

Participants may make optional cash investments in amounts not exceeding $100,000 per month by personal check, wire investment, or an On-Demand Electronic Deduction from your bank account. Beneficial Owners wanting to participate in optional cash investments must instruct their broker, bank or other nominee to complete a Broker and Nominee Form and transmit the optional cash payment to the Administrator. See explanation of "Broker and Nominee Form" below. Optional cash investments must be at least $100 for any single investment and may not exceed $100,000 per month. (For the purposes of these limitations, all Program accounts under the common control or management of a participant may be aggregated, at the Trust's sole discretion.) There is no obligation to make an optional cash investment at any time, and the amount of such investments may vary from time to time. For a discussion of the source and price of shares purchased pursuant to optional cash investments, see the section titled "Source and Price of Shares for DRIP and OCI."

OPTIONAL CASH INVESTMENTS NOT EXCEEDING $100,000 MUST BE RECEIVED BY THE ADMINISTRATOR NO LATER THAN 4:00 P.M. EASTERN TIME ON THE OCI PAYMENT DUE DATE. The Trust may delay the mailing of stock certificates purchased by check until such check has cleared (or been paid by) the bank on which the check was written. This process may take up to 15 days or more. All optional cash investments are subject to collection by the Administrator for full face value in U.S. funds.

The Administrator will apply the optional cash investment from a participant to the purchase of Shares for the account of the participant on the related OCI Investment Date or Waiver Investment Date (see the sections titled "Source and Price of Shares for DRIP and OCI").

Upon a participant's written request received by the Administrator no later than two business days prior to the OCI Pricing Period, an optional cash investment not already invested under the Program will be canceled or refunded to the participant, as appropriate. However, in such event, no refund of a check will be made until the funds have cleared. Accordingly, such refunds may be delayed by up to three weeks.

NO INTEREST WILL BE PAID ON AMOUNTS HELD BY THE ADMINISTRATOR PENDING

INVESTMENT OR TO BE REFUNDED TO THE

PARTICIPANT.

BROKER AND NOMINEE FORM

The Broker and Nominee Form provides the only means by which a broker, bank or other nominee holding shares of a Beneficial Owner in the name of a major securities depository may invest optional cash investments within the minimum and maximum investment limitations established for the Program (see "Optional Cash Investments" below) on behalf of such Beneficial Owner or interested investor. A Broker and Nominee Form must be delivered to the Administrator each time such broker, bank or other nominee transmits optional cash investments. Broker and Nominee Forms will be furnished at any time upon request to the Trust.

The Broker and Nominee Form and appropriate instructions must be received by the Administrator not later than 4:00 pm Eastern time on the Broker and Nominee Form Due Date in order for any optional cash investment to be invested on the OCI Investment Date.

SOURCE AND PRICE OF SHARES FOR DRIP AND OCI

SOURCE OF SHARES

WHEN THE TRUST'S SHARES ARE TRADING AT A PREMIUM

If the Market Price, plus the estimated fees to purchase the Shares, is equal to or exceeds the net asset value per Share on the Valuation Date, the Trust may issue the Shares to be acquired under the Program.

WHEN THE TRUST'S SHARES ARE TRADING AT A DISCOUNT

If the Market Price, plus the estimated fees to purchase the Shares, is less than the net asset value per Share on the Valuation Date, the Administrator will purchase Shares on the Open Market through a bank or securities broker (including an affiliate of the Administrator) as provided herein. If the Market Price, plus estimated fees, exceeds the net asset value before the Administrator has completed its purchases, the Administrator will use reasonable efforts to cease purchasing Shares, and the Trust shall issue the remaining Shares.

The Trust may, without prior notice to participants, determine that it will not issue new Shares for purchase pursuant to the Program, even when shares are trading at a Premium, in which case the Administrator will purchase Shares pursuant to the Program on the Open Market.

PRICE OF SHARES

SHARES ISSUED BY THE TRUST

Dividend Reinvestment:

Shares issued by the Trust in connection with the reinvestment of Dividends will be acquired under the Program on the relevant Dividend Reinvestment Date at the greater of (i) net asset value at the close of business on the Valuation Date, or (ii) the average of the daily Market Price of the Shares during the DRIP Pricing Period, minus a discount of 5%.

Optional Cash Investments:

Shares issued by the Trust will be acquired under the Program on the relevant OCI Investment Date at the greater of (i) net asset value at the close of business on the Valuation Date, or (ii) the average of the daily Market Price of the Shares during the OCI Pricing Period minus a discount, determined at the sole discretion of the Trust, ranging from 0% to 5%.

On the last business day of each month, the Trust may establish a discount applicable to optional cash investments. The discount will be in effect for the following OCI Pricing Period. The discount for optional cash investments is set by the Trust and may be changed or eliminated by the Trust without prior notice to participants at any time. Participants may obtain the applicable discount by telephoning the Trust at (800) 992-0180.

SHARES PURCHASED ON THE OPEN MARKET

Dividend Reinvestment:

If some or all of the Shares are purchased on the Open Market, Shares purchased pursuant to the reinvestment of Dividends will be credited to the participant's account at the weighted average price per share of all such shares purchased with respect to the relevant Dividend Reinvestment Date.

Optional Cash Investments:

If some or all of the Shares are purchased on the Open Market, Shares purchased pursuant to optional cash investments will be credited to the participant's account at the weighted average price per share of all such Shares purchased as of the relevant OCI Investment Date.

When Shares are to be purchased on the Market, the Administrator will begin making purchases as soon as practicable on the day after the Valuation Date and in no event later than 6 business days after the Valuation Date, except where and to the extent necessary under any applicable federal securities laws or other government or stock exchange regulations. Shares will be applied to the Participant's account as of the relevant Investment Date. The Administrator may commingle each participant's funds with those of other participants for the purpose of executing purchases.

Dividend and voting rights on shares purchased in the Open Market will commence upon settlement, which is normally three business days after purchase. However, shares purchased in the Open Market within a period of three business days prior to and including a Dividend record date are considered purchased "ex-dividend" and therefore are not entitled to payment of that

Dividend or voting rights.

Shares purchased on the Open Market will not be eligible for the discount to Market Price and are subject to such terms and conditions, including price and delivery, as the Administrator may accept.

BY WIRE                 Optional cash investments may be made by wire transfer to the
                        Administrator. Call the Administrator at (800) 992-0180 to obtain
                        a wire reference number. Give that number to your bank and
                        instruct them to wire the funds to the Trust as follows:

                        Investors Fiduciary Trust Co. (Kansas City, MO)
                        ABA #101003621
                        Credit to: ING Prime Rate Trust
                        A/C# 751-8315 For Further Credit to (Your Name and Account Number)

                        Participants making wire investments may be charged fees by the
                        commercial bank initiating the transfer.

BY ELECTRONIC           Optional cash investments may be made by an On-Demand Electronic
FUNDS                   Funds Transfer. You must establish the privilege by completing an
TRANSFER                OCI Electronic Funds Transfer Form prior to initiating an
                        Electronic Funds Transfer. The properly completed form must be
                        received by the Administrator prior to the last business day of
                        the month to be effective for the next OCI Investment Date. Call
                        the Administrator at (800) 992-0180 to obtain the form.

                        Once the Administrator receives and processes your properly
                        completed form, you may initiate an Electronic Funds Transfer
                        from your pre-designated U.S. bank account by instructing the
                        Trust by telephone at (800) 992-0180, or in writing, to complete
                        a purchase into your account for a specified amount (not less
                        than $100 and not more than $100,000). Each On-Demand Electronic
                        Funds Transfer must be separately initiated. Instructions must be
                        received by the Trust on or before the OCI Payment Due Date

                        Once the Electronic Funds Transfer is initiated by your telephone
                        call or letter of instruction, the funds will be drawn from the
                        pre-designated bank account providing the account contains funds
                        sufficient to complete the transfer and will be invested in
                        Shares on the relevant OCI Investment Date. An insufficient or
                        uncollected account balance will void the transaction and you may
                        be subject to fees by your bank.

                        You may change the pre-designated bank by providing new written
                        instructions to the Administrator. The new instructions must be
                        received by the Administrator prior to the last business day of
                        the month to be effective for the next month's OCI Investment
                        Date.

BY MAIL                 An optional cash investment may be made by personal check, drawn
                        on a U.S. bank and payable in U.S. dollars, to "ING Prime Rate
                        Trust." Checks should be mailed to:

                                        ING Prime Rate Trust
                                        c/o DST Systems, Inc.
                                        P.O. Box 219368
                                        Kansas City, MO 64141

                        Checks drawn on non-U.S. banks and third-party checks (as defined
                        by the Administrator) will not be accepted. To avoid investment
                        delays write your account number on the check or you may include
                        a completed Participation Form.

BY CONTACTING           Beneficial Owners may participate by either (i) becoming a
YOUR DEALER             Shareholder of Record or (ii) by contacting their broker, bank or
                        other nominee.

The Trust reserves the right to reject any purchase.

REPORTS TO PARTICIPANTS; TAX IMPLICATIONS

Participants will receive an account confirmation after each transaction. Participants should retain these account confirmations to be able to establish the cost basis of shares purchased under the Program for income tax and other purposes.

The automatic reinvestment of dividends will not relieve you of any income tax payable on the dividends. If shares are purchased at a discount from the market price, participants may have income equal to the discount. Please consult with your personal tax advisor.

All notices, account confirmations and reports from the Administrator to a participant will be addressed to the participant at his or her latest address of record with the Administrator. Therefore, participants must promptly notify the Administrator of any change of address. To be effective with respect to mailings of Dividend checks and account confirmations, address changes must be received by the Administrator or the Trust prior to the record date for that Dividend.

CERTIFICATES FOR SHARES

The Administrator will hold Shares purchased under the Program in book entry form. Participants may obtain a certificate for all or some of the whole Shares held in their account by writing or telephoning the Trust's Shareholder Services Department. Issuance of a certificate pursuant to such request in no way affects Dividend reinvestment (see "Reinvestment of Dividends" above).

Shares of stock held in book entry form for a participant cannot be pledged or assigned. A participant who wishes to pledge or assign any such Shares must request that a certificate for such Shares be issued in the participant's name.

PLAN OF DISTRIBUTION; EXPENSES

Subject to the availability of Shares registered for issuance under the Program, there is no total maximum number of Shares that can be issued pursuant to the Program.

From time to time, financial intermediaries, including brokers and dealers, and other persons may engage in positioning transactions in order to benefit from the discount from the market price of Shares acquired through the Program. Such Shares may be resold in market transactions (including coverage of short positions) on any national securities exchange on which Shares of the Trust trade or in privately negotiated transactions. Such transactions could cause fluctuations in the trading volume and price of the Shares. The difference between the price such owners pay to the Trust for Shares acquired under the Program, after deduction of the applicable discount from the market price, and the price at which such Shares are resold, may be deemed to constitute underwriting commissions received by such owners in connection with such transactions.

The Trust will pay the costs of administering the Program. There will be no brokerage charges on purchases of Shares by the Administrator directly from the Trust in connection with the reinvestment of dividends or Optional Cash Investments. For shares purchased on the Open Market, participants will pay a PRO RATA portion of brokerage commissions for such purchase. Brokerage charges for purchasing Shares for individual accounts through the Program may be expected, but are not guaranteed, to be less than the usual brokerage charge for such transactions, as the Administrator will usually be purchasing shares for all participants in blocks and prorating the lower commission thus attainable.

The Administrator may charge a participant for additional services not provided under the Program or where specified charges are indicated. Brokers or nominees who participate on behalf of Beneficial Owners for whom they are holding shares may charge such Beneficial Owners fees in connection with such participation, for which neither the Administrator nor the Trust will be responsible.

CLOSING OF A PARTICIPANT'S ACCOUNT

When a shareholder wants to close his/her account, a stock certificate for full Shares in the account must be requested from the Trust. The shareholder can then deliver the certificate to their broker or dealer for sale on the Open Market. Fractional Shares will be held and aggregated with other fractional Shares being liquidated by the Administrator, as agent of the Program and as Transfer Agent of the Trust, and paid by check when actually sold. Fractional Shares will be sold by the Administrator either on the Open Market or to the Program for use in Dividend reinvestment or cash investment transactions. The price for fractional Shares will be either the actual market price received, after deducting any commissions, for open market sales, or the average daily Market Price for the two Trading Days immediately preceding the relevant Investment Date for sales to the Program. If the certificate for full Shares or sale proceeds for fractional Shares are to be sent to

anyone other than the registered owner(s) at the address of record or broker/dealer of record, a signature guaranteed request will be required in order to process the request.

MISCELLANEOUS

REQUESTING CASH DIVIDENDS

Shareholders may request to receive their dividends in cash at any time by giving the Administrator written notice or by contacting the Trust's Shareholder Service Department at (800) 992-0180. Such request will be effective immediately if the Administrator receives notice at least three business days prior to the relative Dividend Record Date; otherwise such notice will be effective for the next Dividend Record Date and any subsequent Dividends.

VOTING OF SHARES HELD IN THE PROGRAM

Whole and fractional shares held in an account may be voted in person or by the proxy sent to the participant.

STOCK DIVIDEND OR RIGHTS OFFERING

Any Dividends in Shares distributed by the Trust on Shares held in book entry will be added to the participant's account.

In the event of a rights offering, the participant will receive rights based upon the total number of whole shares owned in book entry form and certificated shares outstanding in the participant's name.

LIMITATION OF LIABILITY

Neither the Trust nor the Administrator (nor any of their respective agents, representatives, employees, officers, trustees, directors, or subcontractors) will be liable in administering the Program for any act performed in good faith nor for any good faith omission to act, including, without limitation, any claim of liability arising with respect to the prices or times at which shares are purchased or sold for participants, or, with respect to fractional Shares any change in the market value of Shares, or from failure to terminate a participant's account upon such a participant's death. The foregoing does not represent a waiver of any rights a participant may have under applicable securities laws.

CHANGE OR TERMINATION OF THE PROGRAM

The Trust, in its sole discretion, may suspend, modify or terminate the Program at any time in whole, in part, or in respect of participants in one or more jurisdictions. Notice of such suspension, modification or termination will be sent to all affected participants. No such event will affect any Shares then credited to a participant's account. Upon any whole or partial termination of the Program by the Trust, the participant may request a certificate for any amount of

full Shares held in book entry form. Fractional Shares will be held and aggregated with other fractional Shares being liquidated by the Administrator, as agent of the Program and as Transfer Agent of the Trust, and paid for by check when actually sold. Any change in the Optional Cash Investment Discount made by the Trust shall not constitute a modification of the Program requiring notice to the participants.

TERMINATION OF THE ADMINISTRATOR

The Administrator may withdraw as Administrator to the Program upon 90 days written notice to the Trust, in which case the Trust will select a replacement to serve as Administrator. The Trust may also terminate the Administrator upon 90 days written notice, and select a replacement to serve as Administrator.

TERMINATION OF PARTICIPATION

If a participant owns fewer than ten whole Shares of the Trust, the participant's participation in the Program may be terminated. The Trust may also terminate any participant's participation in the Program for any reason (including, without limitation, the attempted circumvention by a participant of the $100,000 monthly maximum for cash purchases through the accumulation of Program accounts over which the participant has control) after written notice mailed in advance to such participant at the address appearing on the Administrator's records. Participants whose participation in the Program has been terminated will receive a certificate for full Shares in their account. Fractional Shares will be held and aggregated with other fractional Shares being liquidated by the Administrator as agent of the Program and as Transfer Agent of the Trust and paid for by check when actually sold.

PROFITS ON SALES OF SHARES

There is no assurance that participants will be able to sell Shares purchased pursuant to the Program at a profit.

FUTURE DIVIDENDS

The payment of Dividends is dependent upon the generation of income by the Trust. There is no assurance that income will continue to be generated by the Trust in the future from which Dividends may be paid, and, therefore, there is no assurance that there will continue to be Dividends in the future to be reinvested pursuant to the Program.

ATTACHMENTS

A. Schedule of Important Dates

      OCI &                                                      OCI &         VALUATION DATE,
 WAIVER DISCOUNT      REQUEST FOR        OCI & WAIVER       WAIVER PRICING       OCI & WAIVER             OCI            WAIVER
ANNOUNCEMENT DATE   WAIVER DEADLINE   PAYMENT DUE DATE(1)   PERIOD BEGINS    PRICING PERIOD ENDS    INVESTMENT DATE  INVESTMENT DATE
-----------------   ---------------   -------------------   --------------   -------------------   ----------------  ---------------
    1/30/2004          2/5/2004            2/6/2004            2/10/2004          2/17/2004            2/18/2004        2/19/2004
    2/27/2004          3/4/2004            3/5/2004            3/9/2004           3/15/2004            3/16/2004        3/17/2004
    3/31/2004          4/5/2004            4/6/2004            4/8/2004           4/15/2004            4/16/2004        4/19/2004
    4/30/2004          5/6/2004            5/7/2004            5/11/2004          5/17/2004            5/18/2004        5/19/2004
    5/28/2004          6/4/2004            6/7/2004            6/9/2004           6/15/2004            6/16/2004        6/17/2004
    6/30/2004          7/6/2004            7/7/2004            7/9/2004           7/15/2004            7/16/2004        7/19/2004
    7/30/2004          8/5/2004            8/6/2004            8/10/2004          8/16/2004            8/17/2004        8/18/2004
    8/31/2004          9/3/2004            9/7/2004            9/9/2004           9/15/2004            9/16/2004        9/17/2004
    9/30/2004          10/6/2004          10/7/2004           10/11/2004          10/15/2004          10/18/2004       10/19/2004
    10/29/2004         11/4/2004          11/5/2004            11/9/2004          11/15/2004          11/16/2004       11/17/2004
    11/30/2004         12/6/2004          12/7/2004            12/9/2004          12/15/2004          12/16/2004       12/17/2004
    12/20/2004        12/27/2004          12/28/2004          12/30/2004           1/5/2005            1/6/2005         1/7/2005

Exhibit 99.(g)(i)(1)

AMENDED SCHEDULE OF APPROVALS

WITH RESPECT TO THE

INVESTMENT MANAGEMENT AGREEMENT

BETWEEN

ING PRIME RATE TRUST

AND

                                     ANNUAL INVESTMENT MANAGEMENT FEE
TRUST                          (AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)
-----                          ---------------------------------------------
ING Prime Rate Trust                                0.80%

Exhibit 99.(g)(ii)(1)

FIRST AMENDMENT TO SUB-ADVISORY AGREEMENT

ING PRIME RATE TRUST

This First Amendment, effective as of September 1, 2003, amends the Sub-Advisory Agreement (the "Agreement") dated the 19th day of August, 2003 between ING Investments, LLC, an Arizona limited liability company (the "Manager"), and Aeltus Investment Management, Inc., a Connecticut corporation (the "Sub-Adviser") with regards to ING Prime Rate Trust, a Series of ING Prime Rate Trust.

W I T N E S S E T H

WHEREAS, the parties desire to amend the Agreement and agree that the amendment will be effective as of September 1, 2003.

NOW, THEREFORE, the parties agree as follows:

1. The following Section 11 is hereby inserted between existing Section 10 and Section 11:

11. NON-EXCLUSIVITY. The services of the Sub-Adviser to the Series and the Fund are not to be deemed to be exclusive, and the Sub-Adviser shall be free to render investment advisory or other services to others (including other investment companies) and to engage in other activities, provided, however, that the Sub-Adviser may not consult with any other sub-adviser of the Fund concerning transactions in securities or other assets for any investment portfolio of the Fund, including the Series, except that such consultations are permitted between the current and successor sub-advisers of the Series in order to effect an orderly transition of sub-advisory duties so long as such consultations are not concerning transactions prohibited by Section 17(a) of the 1940 Act.

2. Each Section number and applicable references to each Section following the inserted Section 11 above, will increase numerically by one (i.e.,
Section 13 will be Section 14, etc.).

3. Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Agreement.

4. In all other respects, the Agreement is hereby confirmed and remains in full force and effect.

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed as of the day and year first above written.

ING INVESTMENTS, LLC

By:  /s/ Michael J. Roland
     ---------------------
     Michael J. Roland
     Executive Vice President

AELTUS INVESTMENT MANAGEMENT, INC.

By:  /s/ Michael Gioffre
     -------------------
     Name:  Michael Gioffre
     Title: Senior Vice President

Ex 99.(h)(i)

            ING Funds Distributor, LLC (the "Distributor")

Date:       June 15, 2004

     WHEREAS, ING Prime Rate Trust is a Massachusetts business trust operating

as a closed-end management investment company;

WHEREAS, the Trust has filed a registration statement (the "Registration Statement") on Form N-2 under the Investment Company Act of 1940, as amended (the "1940 Act") (File No. 333-68239) and under the Securities Act of 1933, as amended (the "1933 Act") (File No. 811-5410) to register shares of the Trust which may be issued and sold from time to time;

WHEREAS, the Distributor is registered as a broker-dealer under the provisions of the Securities Exchange Act of 1934 and is a member in good standing of the National Association of Securities Dealers, Inc.;

WHEREAS, the Trust and the Distributor have previously entered into a Distribution Agreement dated September 1, 2000, as amended, pursuant to which the Trust appointed the Distributor (and its predecessors) to distribute the Trust's shares under the Registration Statement;

WHEREAS, the parties wish to amend and restate the above referenced Distribution Agreement; and

WHEREAS, the Trust's Board of Trustees (the "Trustees") has adopted a resolution approving this Amended and Restated Distribution Agreement (the "Agreement"), and such resolution was adopted at a meeting of the Trustees, at which a majority of Trustees, including a majority of the Trust's Trustees who are not otherwise interested persons of the Trust's investment manager or its related organizations, were present and voted in favor of the said resolution approving this Agreement.

NOW, THEREFORE, the parties agree as follows:

1. APPOINTMENT OF DISTRIBUTOR; ACCEPTANCE. The Trust hereby appoints the Distributor as the principal underwriter and distributor for shares of the Trust to be issued pursuant to the Registration Statement (the "Shares") and the Distributor hereby accepts such appointment and agrees to serve as the principal underwriter and distributor for the Shares.

2. SALE OF SHARES. The Distributor will use reasonable efforts to promote the sale of the Shares, but the Distributor is not obligated to sell any specific number of Shares. The Shares will only be sold on such days as shall be agreed to between the Distributor and the Trust. The

Trust will deliver to the Distributor such Shares as the Distributor may sell.

3. OFFERING PRICE. The public offering price per Share shall be determined in accordance with the then current prospectus of the Trust under the Registration Statement. In no event shall the public offering price be less than the current net asset value per Share (the "Minimum Price"). The Distributor shall suspend the sale of Shares if the per share price of the Shares is less than the Minimum Price.

4. SALES COMMISSIONS AND DISCOUNTS. The Distributor shall not be entitled to receive any sales commission or discount from the Trust for its services hereunder.

5. FURNISHING OF INFORMATION. The Trust will furnish the Distributor with such number of copies of the Registration Statement as distributor shall reasonably request, and the Trust warrants to the Distributor that the statements therein contained are true and correct as of the date of the Registration Statement, as it may be amended or supplemented from time to time. The Trust will also furnish the Distributor with such other information that the Distributor may reasonably request for use in connection with the distribution of the Shares, including, at least annually, audited financial statements of the Trust's books and accounts certified by independent public accountants.

6. CONDUCT OF BUSINESS. Other than the currently effective Prospectus and Statement of Additional Information, the Distributor will not use any sales materials or statements except literature or advertising which conforms to the requirements of federal and state securities laws and regulations and which have been filed, where necessary, with the appropriate regulatory authorities. the Distributor will furnish to the Trust copies of all material prior to its use and no such material shall be published if the Trust shall reasonably and promptly object.

7. COMPLIANCE WITH LAW. The Distributor shall comply with applicable federal and state laws and regulations where the Trust's Shares are offered for sale and conduct its affairs with the Trust and with dealers, brokers or investors in accordance with the Conduct Rules of the National Association of Securities Dealers, Inc.

8. OTHER ACTIVITIES. The Distributor's services pursuant to this Agreement shall not be deemed to be exclusive, and the Distributor may render similar services and act as an underwriter, distributor or dealer for other investment companies in the offering of their shares.

9. SUSPENSION OF SALES. The Trust reserves the right at all times to suspend or limit the public offering of the Shares upon written notice to the Distributor, and to reject any order in whole or in part.

10. PAYMENT OF EXPENSES. The Distributor shall bear all expenses incurred by it in connection with its duties and activities under this Agreement. The Trust shall bear all costs and expenses of the Trust, including expenses (including legal fees) pertaining to the preparation and filing of the Registration Statement and Prospectus and any amendments or supplements thereto, and expenses pertaining to the preparation, printing and distribution of any reports or communications to shareholders, including Prospectuses and Statements of Additional

Information, annual or interim reports or proxy materials.

11. AGENT OF TRUST. Any person, even though also an officer, employee or agent of the Distributor, who may be or become an officer, Trustee, employee or agent of the Trust, shall be deemed, when rendering services to the Trust or acting in any business of the Trust, to be rendering such services to or acting solely for the Trust and not as an officer, partner, employee or agent or one under the control or direction of the Distributor even though paid by the Distributor.

12. RECORDS. All records maintained by the Distributor in connection with this Agreement shall be the property of the Trust and shall be returned to the Trust upon termination of this Agreement, free from any claims or retention of rights by the Distributor. the Distributor shall keep confidential any information obtained pursuant to this Agreement and shall disclose such information only if the Trust has authorized such disclosure or if such disclosure is expressly required by applicable federal or state regulatory authorities.

13. DURATION AND TERMINATION. This Agreement shall take effect on the date of its execution and shall continue in effect, unless sooner terminated as provided herein, for two years from such date and shall continue from year to year thereafter so long as such continuance is specifically approved at least annually (a) by the vote of a majority of those Trustees who are not "interested persons," cast in person at a meeting called for the purpose of voting on such approval, and (b) either by a majority of the Trustees of the Trust or by a majority vote (as defined in the Prospectus) of the shareholders of the Trust; PROVIDED, HOWEVER, that this Agreement may be terminated by the Trust or by a majority vote of the shareholders of the Trust on 60 days' written notice to the Distributor, or by the Distributor at any time on 60 days' written notice to the Trust, in all cases without the payment of any penalty. This Agreement will automatically and immediately terminate in the event of its assignment (as described in the 1940 Act).

14. LIABILITY OF DISTRIBUTOR. The Distributor shall not be liable to the Trust for any error of judgment or mistake of law or for any loss suffered by the Trust in connection with the matters to which this Agreement relates, except a loss resulting from the Distributor's willful misfeasance, bad faith or negligence in the performance of its duties, or by reason of its reckless disregard of its obligations and duties under this Agreement.

15. AGREEMENT AND DECLARATION OF TRUST AND LIMITATION OF LIABILITY. A copy
of the Agreement and Declaration of Trust of the Trust is on file with the Secretary of State of the Commonwealth of Massachusetts, and notice is hereby given that this Agreement is executed by an officer of the Trust on behalf of the Trustees of the Trust, as Trustees and not individually, and that the obligations of this Agreement with respect to the Trust shall be binding upon the assets and properties of the Trust only and shall not be binding upon the assets or properties of the Trustees, officers, employees, agents or shareholders of the Trust individually.

16. NOTICES. Notices of any kind to be given to the Distributor by the Trust shall be in writing and shall be duly given if mailed, first class postage prepaid, or delivered to the Distributor at its principal place of business or at such other address or to such individual as shall

be specified by the Distributor to the Trust. Notices of any kind to be given to the Trust shall be in writing and shall be duly given if mailed, first class postage prepaid, or delivered to the Trust at its principal place of business or at such other address or to such individual as shall be specified by the Trust.

17. REPORTS. The Distributor shall prepare reports to the Trustees of the Trust showing such information as from time to time shall be reasonably requested by the Trustees or as are required of the Distributor by applicable laws and regulations.

18. INDEPENDENT CONTRACTOR STATUS. The Distributor shall for all purposes herein provided be deemed to be an independent contractor and, unless otherwise expressly provided or authorized, shall have no authority to act for or represent the Trust in any way or otherwise be deemed an agent of the Trust. It is understood and agreed that the Distributor, by separate agreement with the Trust, may also serve the Trust in other capacities.

19. MISCELLANEOUS. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original. This Agreement shall be governed by the laws of the State of New York, provided that nothing herein shall be construed in a manner inconsistent with the 1940 Act, the Securities Exchange Act of 1934, as amended, or any rule or order of the Securities and Exchange Commission. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby and, to this extent, the provisions of this Agreement shall be deemed to be severable.

ING PRIME RATE TRUST                         ING FUNDS DISTRIBUTOR, LLC


By:                                          By:
     ------------------------------                -----------------------------
     Robert S. Naka                                Michael J. Roland
     Senior Vice President                         Executive Vice President

Exhibit 99 (h)(ii)

Auction Rate Cumulative Preferred Shares

PILGRIM PRIME RATE TRUST

3,600 Shares, Series T

3,600 Shares, Series Th

Liquidation Preference $25,000 Per Share

UNDERWRITING AGREEMENT

November 13, 2000

SALOMON SMITH BARNEY INC.
UBS WARBURG LLC
LEHMAN BROTHERS INC.
GRUNTAL & CO., L.L.C.

c/o SALOMON SMITH BARNEY INC.
388 Greenwich Street
New York, New York 10013

Ladies and Gentlemen:

Pilgrim Prime Rate Trust, a Massachusetts business trust (the "Trust"), proposes, upon the terms and conditions set forth herein, to issue and sell an aggregate of 3,600 shares of its Auction Rate Cumulative Preferred Shares, Series T, and 3,600 shares of its Auction Rate Cumulative Preferred Shares, Series Th, each with a liquidation preference of $25,000 per share (the shares of Auction Rate Cumulative Preferred Shares to be sold hereby are referred to herein, collectively, as the "Shares"). The Shares will be authorized by, and subject to the terms and conditions of, the Certificate of Designation for Preferred Shares of the Trust (the "Certificate") in the form filed as an exhibit to the Registration Statement referred to in Section 1 of this agreement. The Trust and its investment adviser, ING Pilgrim Investments, Inc. (the "Adviser"), wish to confirm as follows their agreement with Salomon Smith Barney Inc., UBS Warburg LLC, Lehman Brothers Inc. and Gruntal & Co., L.L.C. (the "Underwriters"), in connection with the purchase of the Shares by the Underwriters.

Collectively, the Investment Management Agreement dated as of September 1, 2000 between the Trust and the Adviser ("the "Investment Management Agreement"), the

Custodian Agreement dated as of July 1, 1996 between the Trust and State Street Bank and Trust - Kansas City, the Agency Agreement dated as of October 1, 1996 between the Trust and DST Systems, Inc. and the Auction Agency Agreement between the Trust and Bankers Trust Company are hereinafter referred to as the "Trust Agreements." This Underwriting Agreement is hereinafter referred to as the "Agreement."

1. REGISTRATION STATEMENT AND PROSPECTUS. The Trust has prepared in conformity with the provisions of the Securities Act of 1933, as amended (the "1933 Act"), the Investment Company Act of 1940, as amended (the "1940 Act"), and the rules and regulations of the Securities and Exchange Commission (the "Commission") promulgated under the 1933 Act (the "1933 Act Rules and Regulations") and the 1940 Act (the "1940 Act Rules and Regulations" and, together with the 1933 Act Rules and Regulations, the "Rules and Regulations") a registration statement on Form N-2, as amended by Pre-Effective Amendment No. 1 (File Nos. 333-48782 and 811-05410), under the 1933 Act and the 1940 Act (the "registration statement"), including a prospectus relating to the Shares, and has filed the registration statement and prospectus in accordance with the 1933 Act and the 1940 Act. The Trust also has filed a notification of registration of the Trust as an investment company under the 1940 Act on Form N-8A (the "1940 Act Notification"). The term "Registration Statement" as used in this Agreement means the registration statement (including all financial schedules and exhibits), as amended at the time it becomes effective under the 1933 Act or, if the registration statement became effective under the 1933 Act prior to the execution of this Agreement, as amended or supplemented at the time it became effective, prior to the execution of this Agreement. If it is contemplated, at the time this Agreement is executed, that a post-effective amendment to the registration statement will be filed under the 1933 Act and must be declared effective before the offering of the Shares may commence, the term "Registration Statement" as used in this Agreement means the registration statement as amended by said post-effective amendment. If the Trust has filed an abbreviated registration statement to register an additional amount of Shares pursuant to Rule 462(b) under the 1933 Act (the "Rule 462 Registration Statement"), then any reference herein to the term "Registration Statement" shall include such Rule 462 Registration Statement. The term "Prospectus" as used in this Agreement means the prospectus and statement of additional information in the forms included in the Registration Statement or, if the prospectus and statement of additional information included in the Registration Statement omit information in reliance on Rule 430A under the 1933 Act Rules and Regulations and such information is included in a prospectus and statement of additional information filed with the Commission pursuant to Rule 497(h) under the 1933 Act, the term "Prospectus" as used in this Agreement means the prospectus and statement of additional information in the forms included in the Registration Statement as supplemented by the addition of the information contained in the prospectus filed with the Commission pursuant to Rule 497(h). The term "Prepricing Prospectus" as used in this Agreement means the prospectus and statement of additional information subject to completion in the forms included in the registration statement at the time of filing of amendment no. 1 to the registration statement with the Commission on November 6, 2000, and as such prospectus and statement of additional information shall have been amended from time to time prior to the date of the Prospectus, together with any other prospectus and statement of additional information relating to the Trust other than the Prospectus approved in writing by or directly or indirectly prepared by the Trust or the Adviser; it being understood that the definition of Prepricing Prospectus above shall not include any Prepricing Prospectus

prepared by the Underwriters unless approved in writing by the Trust or Adviser. The terms "Registration Statement," "Prospectus" and "Prepricing Prospectus" shall also include any financial statements incorporated by reference therein.

The Trust has furnished Salomon Smith Barney Inc. with copies of such registration statement, each amendment to such registration statement filed with the Commission and each Prepricing Prospectus, and Salomon Smith Barney Inc. has provided the same to the other Underwriters.

2. AGREEMENTS TO SELL AND PURCHASE. The Trust hereby agrees, subject to all the terms and conditions set forth herein, to issue and sell to the Underwriters and, upon the basis of the representations, warranties and agreements of the Trust and the Adviser herein contained and subject to all the terms and conditions set forth herein, the Underwriters agree to purchase from the Trust, at a purchase price of $24,750 per Share, the number of shares of each series of Auction Rate Cumulative Preferred Shares set forth opposite the name of each Underwriter in Schedule I hereto.

3. TERMS OF PUBLIC OFFERING. The Trust and the Adviser have been advised by the Underwriters that they propose to make a public offering of the Shares as soon after the Registration Statement and this Agreement have become effective as in the Underwriters' judgment is advisable and initially to offer the Shares upon the terms set forth in the Prospectus.

4. DELIVERY OF THE SHARES AND PAYMENT THEREFOR. Delivery to the Underwriters of and payment for the Shares shall be made at the office of Simpson Thacher & Bartlett, 425 Lexington Avenue, New York, NY 10017, or through the facilities of The Depository Trust Company or another mutually agreeable facility, at 9:30 A.M., New York City time, on November 16, 2000 (the "Closing Date"). The place of closing for the Shares and the Closing Date may be varied by agreement between you and the Trust.

Certificates for the Shares shall be registered in such names and in such denominations as the Underwriters shall request prior to 9:30 A.M., New York City time, on the second business day preceding the Closing Date. Such certificates shall be made available to the Underwriters in New York City for inspection not later than 9:30 A.M., New York City time, on the business day next preceding the Closing Date. The certificates evidencing the Shares shall be delivered to the Underwriters on the Closing Date, through the facilities of The Depository Trust Company or another mutually agreeable facility, against payment of the purchase price therefor in immediately available funds.

5. AGREEMENTS OF THE TRUST AND THE ADVISER. The Trust and the Adviser, jointly and severally, agree with the Underwriters as follows:

(a) If, at the time this Agreement is executed and delivered, it is necessary for the Registration Statement or a post-effective amendment thereto to be declared effective under the 1933 Act before the offering of the Shares may commence, the Trust will endeavor to cause the Registration Statement or such post-effective amendment to become effective under the 1933 Act as soon as possible and will advise the Underwriters promptly and, if requested by the

Underwriters, will confirm such advice in writing when the Registration Statement or such post-effective amendment has become effective.

(b) The Trust will advise the Underwriters promptly and, if requested by the Underwriters, will confirm such advice in writing: (i) of any request made by the Commission for amendment of or a supplement to the Registration Statement, any Prepricing Prospectus or the Prospectus (or any amendment or supplement to any of the foregoing) or for additional information, (ii) of the issuance by the Commission, the National Association of Securities Dealers, Inc. (the "NASD"), any state securities commission, any national securities exchange, any arbitrator, any court or any other governmental, regulatory, self-regulatory or administrative agency or any official of any order suspending the effectiveness of the Registration Statement, prohibiting or suspending the use of the Prospectus or any Prepricing Prospectus, or any sales material (as hereinafter defined), of any notice pursuant to Section 8(e) of the 1940 Act, of the suspension of qualification of the Shares for offering or sale in any jurisdiction, or the initiation of any proceeding for any such purposes, (iii) of receipt by the Trust, the Adviser, any affiliate of the Trust or the Adviser or any representative or attorney of the Trust or the Adviser of any other material communication from the Commission, the NASD, any state securities commission, any national securities exchange, any arbitrator, any court or any other governmental, regulatory, self-regulatory or administrative agency or any official relating to the Trust (if such communication relating to the Trust is received by such person within three years after the date of this Agreement), the Registration Statement, the 1940 Act Notification, the Prospectus, any Prepricing Prospectus, any sales material (as herein defined) (or any amendment or supplement to any of the foregoing) or this Agreement or any of the Trust Agreements and (iv) within the period of time referred to in paragraph (f) below, of any material adverse change in the condition (financial or other), business, prospects, properties, net assets or results of operations of the Trust or the Adviser or of the happening of any other event which makes any statement of a material fact made in the Registration Statement or the Prospectus, or any Prepricing Prospectus or any sales materials (as herein defined) (or any amendment or supplement to any of the foregoing) untrue or which requires the making of any additions to or changes in the Registration Statement or the Prospectus, or any Prepricing Prospectus or any sales materials (as herein defined) (or any amendment or supplement to any of the foregoing) in order to state a material fact required by the 1933 Act, the 1940 Act or the Rules and Regulations to be stated therein or necessary in order to make the statements therein (in the case of the Prospectus, in light of the circumstances under which they were made), not misleading or of the necessity to amend or supplement the Registration Statement, the Prospectus, or any Prepricing Prospectus or any sales material (as herein defined) (or any amendment or supplement to any of the foregoing) to comply with the 1933 Act, the 1940 Act, the Rules and Regulations or any other law or order of any court or regulatory body. If at any time the Commission, the NASD, any state securities commission, any national securities exchange, any arbitrator, any court or any other governmental, regulatory, self-regulatory or administrative agency or any official shall issue any order suspending the effectiveness of the Registration Statement, prohibiting or suspending the use of the Prospectus or any sales material (as herein defined) (or any amendment or supplement to any of the foregoing) or suspending the qualification of the Shares for offering or sale in any jurisdiction, the Trust will make every reasonable effort to obtain the withdrawal of such order at the earliest possible time.

(c) The Trust will furnish to you, without charge, three signed copies of the Registration Statement as originally filed with the Commission and of each amendment thereto, including financial statements and all exhibits thereto, and will also furnish to you, without charge, such number of conformed copies of the Registration Statement as originally filed and of each amendment thereto, but without exhibits, as you may reasonably request.

(d) The Trust will not (i) file any amendment to the Registration Statement or make any amendment or supplement to the Prospectus, or any sales material (as herein defined), of which you shall not previously have been advised or to which you shall reasonably object after being so advised or (ii) so long as, in the opinion of counsel for the Underwriters, a Prospectus is required by the 1933 Act to be delivered in connection with sales by the Underwriters or any dealer, file any information, documents or reports pursuant to the Securities Exchange Act of 1934, as amended (the "1934 Act"), without delivering a copy of such information, documents or reports to you prior to or concurrently with such filing.

(e) Prior to the execution and delivery of this Agreement, the Trust has delivered to you, without charge, in such quantities as you have requested, copies of each form of the Prepricing Prospectus. The Trust consents to the use, in accordance with the provisions of the 1933 Act and with the state securities or blue sky laws of the jurisdictions in which the Shares are offered by the Underwriters and by dealers, prior to the date of the Prospectus, of each Prepricing Prospectus so furnished by the Trust.

(f) As soon after the execution and delivery of this Agreement as possible and thereafter from time to time for such period as in the opinion of counsel for the Underwriters a prospectus is required by the 1933 Act to be delivered in connection with sales by the Underwriters or any dealer, the Trust will expeditiously deliver to the Underwriters and each dealer, without charge, as many copies of the Prospectus (and of any amendment or supplement thereto) as the Underwriters may reasonably request. The Trust consents to the use of the Prospectus (and of any amendment or supplement thereto) in accordance with the provisions of the 1933 Act and with the state securities or blue sky laws of the jurisdictions in which the Shares are offered by the Underwriters and by all dealers to whom Shares may be sold, both in connection with the offering and sale of the Shares and for such period of time thereafter as the Prospectus is required by the 1933 Act to be delivered in connection with sales by the Underwriters or any dealer. If during such period of time any event shall occur that in the judgment of the Trust or in the opinion of counsel for the Underwriters is required to be set forth in the Registration Statement or the Prospectus (as then amended or supplemented) or should be set forth therein in order to make the statements therein (in the case of the Prospectus, in the light of the circumstances under which they were made) not misleading, or if it is necessary to supplement or amend the Registration Statement or the Prospectus to comply with the 1933 Act, the 1940 Act, the Rules and Regulations or any other federal law, rule or regulation, or any state securities or blue sky disclosure laws, rules or regulations, the Trust will forthwith prepare and, subject to the provisions of paragraph (d) above, promptly file with the Commission an appropriate supplement or amendment thereto, and will expeditiously furnish to the Underwriters and dealers, without charge, a reasonable number of copies thereof. In the event that the Trust and the Underwriters agree that the Registration Statement or the Prospectus should be amended

or supplemented, the Trust, if requested by the Underwriters, will promptly issue a press release announcing or disclosing the matters to be covered by the proposed amendment or supplement.

(g) The Trust will make generally available to its security holders an earnings statement, which need not be audited, covering a twelve-month period ending not later than 15 months after the effective date of the Registration Statement as soon as practicable after the end of such period, which earnings statement shall satisfy the provisions of Section 11(a) of the 1933 Act and Rule 158 of the 1933 Act Rules and Regulations.

(h) During the period of five years after the date of this Agreement, the Trust will furnish to you (i) as soon as available, a copy of each report of the Trust mailed to stockholders or filed with the Commission or furnished to the New York Stock Exchange (the "NYSE") other than reports on Form N-SAR, and
(ii) from time to time such other information concerning the Trust as the Underwriters may reasonably request.

(i) If this Agreement shall terminate or shall be terminated after execution pursuant to any provisions hereof (otherwise than by notice given by the Underwriters terminating this Agreement pursuant to Section 12 hereof) or if this Agreement shall be terminated by the Underwriters because of any failure or refusal on the part of the Trust or the Adviser to comply with the terms or fulfill any of the conditions of this Agreement, the Trust and the Adviser, jointly and severally, agree to reimburse the Underwriters for all out-of-pocket expenses (including reasonable fees and expenses of counsel for the Underwriters) incurred by the Underwriters in connection herewith.

(j) The Trust will apply the net proceeds from the sale of the Shares substantially in accordance with the description set forth in the Prospectus and in such a manner as to comply with the investment objectives, policies and restrictions of the Trust as described in the Prospectus.

(k) The Trust will timely file the Prospectus with the Commission pursuant to Rule 497(c) or Rule 497(h) of the 1933 Act Rules and Regulations, whichever is applicable or, if applicable, will timely file the certification permitted by Rule 497(j) of the 1933 Act Rules and Regulations and will advise the Underwriters of the time and manner of such filing.

(l) Except as provided in this Agreement, the Trust will not sell, contract to sell, or otherwise dispose of any senior securities (as defined in the 1940 Act) (other than senior securities sold in an underwriting lead-managed by Salomon Smith Barney Inc.) of the Trust, or grant any options or warrants to purchase senior securities of the Trust, for a period of 180 days after the date of the Prospectus, without the prior written consent of the Underwriters.

(m) Except as stated in this Agreement and in the Prepricing Prospectus and the Prospectus, neither the Trust nor the Adviser has taken, nor will it take, directly or indirectly, any action designed to or that might reasonably be expected to cause or result in stabilization or manipulation of the price of any securities issued by the Trust to facilitate the sale or resale of the Shares.

(n) The Trust will use commercially reasonable efforts to cause the Shares, prior to the Closing Date, to be assigned a rating of 'aaa' by Moody's Investors Service, Inc. ("Moody's") and 'AAA' by Standard & Poor's, a division of McGraw-Hill Companies, Inc. ("S&P" and, together with Moody's, the "Rating Agencies").

(o) The Trust and the Adviser will use commercially reasonable efforts to perform all of the agreements required of them and discharge all conditions to closing as set forth in this Agreement.

6. REPRESENTATIONS AND WARRANTIES OF THE TRUST AND THE ADVISER. The Trust and the Adviser, jointly and severally, represent and warrant to the Underwriters that:

(a) Each Prepricing Prospectus included as part of the registration statement as originally filed or as part of any amendment or supplement thereto, or filed pursuant to Rule 497 of the 1933 Act Rules and Regulations, complied when so filed in all material respects with the provisions of the 1933 Act, the 1940 Act and the Rules and Regulations. The Commission has not issued any order preventing or suspending the use of any Prepricing Prospectus.

(b) The registration statement in the form in which it became or becomes effective and also in such form as it may be when any post-effective amendment thereto shall become effective and the Prospectus and any supplement or amendment thereto when filed with the Commission under Rule 497 of the 1933 Act Rules and Regulations and the 1940 Act Notification when originally filed with the Commission and any amendment or supplement thereto when filed with the Commission, complied or will comply in all material respects with the provisions of the 1933 Act, the 1940 Act and the Rules and Regulations and did not or will not at any such times contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of the Prospectus, in light of the circumstances under which they were made) not misleading, except that this representation and warranty does not apply to statements in or omissions from the registration statement or the Prospectus made in reliance upon and in conformity with information relating to the Underwriters furnished to the Trust in writing by or on behalf of the Underwriters expressly for use therein.

(c) All the outstanding shares of beneficial interest of the Trust have been duly authorized and validly issued by the Trust, are fully paid and nonassessable and are free of any preemptive or similar rights; the Shares have been duly authorized and, when issued and delivered to the Underwriters against payment therefor in accordance with the terms hereof, will be validly issued by the Trust, fully paid and nonassessable and free of any preemptive or similar rights and will conform to the description thereof in the Registration Statement and the Prospectus (and any amendment or supplement to either of them); and the capitalization of the Trust conforms to the description thereof in the Registration Statement and the Prospectus (and any amendment or supplement to either of them).

(d) The Trust is a business trust duly organized and validly existing under the laws of the State of Massachusetts with full business trust power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement and

the Prospectus (and any amendment or supplement to either of them), and is duly registered and qualified to conduct its business and is in good standing in each jurisdiction or place where the nature of its properties or the conduct of its business requires such registration or qualification, except where the failure so to register or qualify does not have a material adverse effect on the condition (financial or other), business, prospects, properties, net assets or results of operations of the Trust; and the Trust has no subsidiaries.

(e) There are no legal or governmental proceedings pending or, to the knowledge of the Trust, threatened, against the Trust, or to which the Trust or any of its properties is subject, that are required to be described in the Registration Statement or the Prospectus (and any amendment or supplement to either of them) but are not described as required, and there are no agreements, contracts, indentures, leases or other instruments that are required to be described in the Registration Statement or the Prospectus (and any amendment or supplement to either of them) or to be filed as an exhibit to the Registration Statement that are not described or filed as required by the 1933 Act, the 1940 Act or the Rules and Regulations.

(f) The Trust is not in violation of its Agreement and Declaration of Trust (the "Declaration"), or bylaws (the "Bylaws"), or other organizational documents or of any law, ordinance, administrative or governmental rule or regulation applicable to the Trust or of any decree of the Commission, the NASD, any state securities commission, any national securities exchange, any arbitrator, any court or governmental agency, body or official having jurisdiction over the Trust, or in default in any material respect in the performance of any obligation, agreement or condition contained in any bond, debenture, note or any other evidence of indebtedness or in any material agreement, indenture, lease or other instrument to which the Trust is a party or by which it or any of its properties may be bound.

(g) Neither the issuance and sale of the Shares, the execution, delivery or performance of this Agreement or any of the Trust Agreements by the Trust, nor the consummation by the Trust of the transactions contemplated hereby or thereby (A) requires the Trust to obtain any consent, approval, authorization or other order of or registration or filing with, the Commission, the NASD, any state securities commission, any national securities exchange, any arbitrator, any court, regulatory body, administrative agency or other governmental body, agency or official (except such as may have been obtained prior to the date hereof and such as may be required for compliance with the state securities or blue sky laws of various jurisdictions which have been or will be effected in accordance with this Agreement) or conflicts or will conflict with or constitutes or will constitute a breach of, or a default under, the Declaration, the Bylaws or other organizational documents of the Trust or (B) conflicts or will conflict with or constitutes or will constitute a breach of, or a default under, any agreement, indenture, lease or other instrument to which the Trust is a party or by which it or any of its properties may be bound, or violates or will violate any statute, law, regulation or judgment, injunction, order or decree applicable to the Trust or any of its properties, or will result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Trust pursuant to the terms of any agreement or instrument to which it is a party or by which it may be bound or to which any of its property or assets is subject. The Trust is not subject to any order of any court or of any arbitrator, governmental authority or administrative agency.

(h) The accountants, KPMG LLP, who have certified or shall certify the financial statements included or incorporated by reference in the Registration Statement and the Prospectus (or any amendment or supplement to either of them) have represented to the Trust that they are independent public accountants as required by the 1933 Act, the 1940 Act and the Rules and Regulations.

(i) The financial statements, together with related schedules and notes, included or incorporated by reference in the Registration Statement and the Prospectus (and any amendment or supplement to either of them), present fairly the financial position, results of operations and changes in financial position of the Trust on the basis stated or incorporated by reference in the Registration Statement at the respective dates or for the respective periods to which they apply; such statements and related schedules and notes have been prepared in accordance with generally accepted accounting principles consistently applied throughout the periods involved, except as disclosed therein; and the other financial and statistical information and data included in the Registration Statement and the Prospectus (and any amendment or supplement to either of them) are accurately presented and prepared on a basis consistent with such financial statements and the books and records of the Trust.

(j) The execution and delivery of, and the performance by the Trust of its obligations under, this Agreement and the Trust Agreements have been duly and validly authorized by the Trust, and this Agreement and the Trust Agreements have been duly executed and delivered by the Trust and constitute the valid and legally binding agreements of the Trust, enforceable against the Trust in accordance with their terms, except as rights to indemnity and contribution hereunder and thereunder may be limited by federal or state securities laws or principles of public policy and subject to the qualification that the enforceability of the Trust's obligations thereunder may be limited by bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium and other laws relating to or affecting creditors' rights generally and by general equitable principles.

(k) Except as disclosed in the Registration Statement and the Prospectus (or any amendment or supplement to either of them), subsequent to the respective dates as of which such information is given in the Registration Statement and the Prospectus (or any amendment or supplement to either of them), the Trust has not incurred any liability or obligation, direct or contingent, or entered into any transaction, not in the ordinary course of business, that is material to the Trust, and there has not been any change in the capital stock, or material increase in the short-term debt or long-term debt, of the Trust, or any material adverse change, or any development involving or which may reasonably be expected to involve, a prospective material adverse change, in the condition (financial or other), business, prospects, properties, net assets or results of operations of the Trust, whether or not arising in the ordinary course of business.

(1) The Trust has not distributed and, prior to the later to occur of
(i) the Closing Date and (ii) completion of the distribution of the Shares, will not distribute any offering material in connection with the offering and sale of the Shares other than the Registration Statement, the Prepricing Prospectus, the Prospectus or other materials, if any, permitted by the 1933 Act, the 1940 Act or the Rules and Regulations.

(m) The Trust has such permits, licenses, franchises and authorizations of governmental or regulatory authorities ("permits") as are necessary to own its properties and to conduct its business in the manner described in the Prospectus (and any amendment or supplement thereto), subject to such qualifications as may be set forth in the Prospectus; the Trust has fulfilled and performed all its material obligations with respect to such permits and no event has occurred which allows, or after notice or lapse of time would allow, revocation or termination thereof or results in any other material impairment of the rights of the Trust under any such permit, subject in each case to such qualification as may be set forth in the Prospectus (and any amendment or supplement thereto); and, except as described in the Prospectus (and any amendment or supplement thereto), none of such permits contains any restriction that is materially burdensome to the Trust.

(n) The Trust maintains a system of internal accounting controls sufficient to provide reasonable assurances that (i) transactions in portfolio securities are executed in accordance with management's general or specific authorization and with the applicable requirements of the 1940 Act, the 1940 Act Rules and Regulations and the Internal Revenue Code of 1986, as amended (the "Code"); (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain accountability for assets and to maintain compliance with the books and records requirements under the 1940 Act and the 1940 Act Rules and Regulations; (iii) access to assets is permitted only in accordance with management's general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

(o) To the Trust's knowledge, neither the Trust nor any employee or agent of the Trust has made any payment of funds of the Trust or received or retained any funds, which payment, receipt or retention of funds is of a character required to be disclosed in the Prospectus and that is not so disclosed.

(p) The Trust has filed all tax returns required to be filed, which returns are complete and correct in all material respects, and the Trust is not in material default in the payment of any taxes which were payable pursuant to said returns or any assessments with respect thereto.

(q) No holder of any security of the Trust has any right to require registration of common shares of beneficial interest or any other security of the Trust because of the filing of the registration statement or consummation of the transactions contemplated by this Agreement.

(r) The Trust, subject to the registration statement having been declared effective and the filing of the Prospectus under Rule 497 under the 1933 Act Rules and Regulations, has taken all required action under the 1933 Act, the 1940 Act and the Rules and Regulations to make the public offering and consummate the sale of the Shares as contemplated by this Agreement.

(s) The conduct by the Trust of its business (as described in the Prospectus) does not, to the knowledge of the Trust or the Adviser after reasonable inquiry, require the Trust to be

the owner, possessor or licensee of any patents, patent licenses, trademarks, service marks or trade names which it does not own, possess or license.

(t) The Trust is registered under the 1940 Act as a closed-end, diversified management investment company and the 1940 Act Notification has been duly filed with the Commission and, at the time of filing thereof and any amendment or supplement thereto, conformed in all material respects with all applicable provisions of the 1940 Act and the Rules and Regulations. The Trust is, and at all times through the completion of the transactions contemplated hereby, will be, in compliance in all material respects with the terms and conditions of the 1933 Act and the 1940 Act. No person is serving or acting as an officer, trustee or investment adviser of the Trust except in accordance with the provisions of the 1940 Act and the 1940 Act Rules and Regulations and the Investment Advisers Act of 1940, as amended (the "Advisers Act"), and the rules and regulations of the Commission promulgated under the Advisers Act (the "Advisers Act Rules and Regulations").

(u) Except as stated in this Agreement and in the Prospectus (and any amendment or supplement thereto), the Trust has not taken, nor will it take, directly or indirectly, any action designed to or which might reasonably be expected to cause or result in stabilization or manipulation of the price of any securities issued by the Trust to facilitate the sale or resale of the Shares, and the Trust is not aware of any such action taken or to be taken by any affiliates of the Trust.

(v) The Trust has filed in a timely manner each document or report required to be filed by it pursuant to the 1934 Act and the rules and regulations of the Commission promulgated thereunder (the "1934 Act Rules and Regulations"); each such document or report at the time it was filed conformed to the requirements of the 1934 Act and the 1934 Act Rules and Regulations; and none of such documents or reports contained an untrue statement of any material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein not misleading.

(w) All advertising, sales literature or other promotional material (including "prospectus wrappers," "broker kits," "road show slides" and "road show scripts") authorized in writing by or prepared by the Trust or the Adviser for use in connection with the offering and sale of the Shares (collectively, "sales material") complied and comply in all material respects with the applicable requirements of the 1933 Act, the 1940 Act, the Rules and Regulations and the rules and interpretations of the NASD and no such sales material contained or contains an untrue statement of a material fact or omitted or omits to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

(x) Each of the Trust Agreements complies in all material respects with all applicable provisions of the 1940 Act, the 1940 Act Rules and Regulations, the Advisers Act and the Advisers Act Rules and Regulations, except as to rights of indemnity and contribution.

(y) The Shares have been, or prior to the Closing Date will be, assigned a rating of 'aaa' by Moody's and 'AAA' by S&P.

(z) As required by Subchapter M of the Code, the Trust is currently in compliance with the requirements to qualify as a regulated investment company under the Code.

(aa) Except as disclosed in the Registration Statement and the Prospectus (or any amendment or supplement to either of them), no trustee of the Trust is an "interested person" (as defined in the 1940 Act) of the Trust or an "affiliated person" (as defined in the 1940 Act) of any Underwriter listed in Schedule I hereto.

7. REPRESENTATIONS AND WARRANTIES OF THE ADVISER. The Adviser represents and warrants to the Underwriters as follows:

(a) The Adviser is a corporation duly incorporated and validly existing in good standing under the laws of the State of Delaware, with full corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement and the Prospectus (and any amendment or supplement to either of them), and is duly registered and qualified to conduct its business and is in good standing in each jurisdiction or place where the nature of its properties or the conduct of its business requires such registration or qualification, except where the failure so to register or to qualify does not have a material adverse effect on the condition (financial or other), business, prospects, properties, net assets or results of operations of the Adviser or on the ability of the Adviser to perform its obligations under this Agreement and the Investment Management Agreement.

(b) The Adviser is duly registered with the Commission as an investment adviser under the Advisers Act and is not prohibited by the Advisers Act, the Advisers Act Rules and Regulations, the 1940 Act or the 1940 Act Rules and Regulations from acting under the Investment Management Agreement for the Trust as contemplated by the Prospectus (or any amendment or supplement thereto). There does not exist any proceeding or any facts or circumstances the existence of which could lead to any proceeding which might adversely affect the registration of the Adviser with the Commission.

(c) There are no legal or governmental proceedings pending or, to the knowledge of the Adviser, threatened against the Adviser, or to which the Adviser or any of its properties is subject, that are required to be described in the Registration Statement or the Prospectus (or any amendment or supplement to either of them) but are not described as required or that may reasonably be expected to involve a prospective material adverse change in the condition (financial or other), business, prospects, properties, net assets or results of operations of the Adviser or on the ability of the Adviser to perform its obligations under this Agreement and the Investment Management Agreement.

(d) Neither the execution, delivery or performance of this Agreement or the Investment Management Agreement by the Adviser, nor the consummation by the Adviser of the transactions contemplated hereby or thereby (A) requires the Adviser to obtain any consent, approval, authorization or other order of or registration or filing with, the Commission, the NASD, any state securities commission, any national securities exchange, any arbitrator, any court, regulatory body, administrative agency or other governmental body, agency or official or

conflicts or will conflict with or constitutes or will constitute a breach of or a default under, the certificate of incorporation or by-laws, or other organizational documents, of the Adviser or (B) conflicts or will conflict with or constitutes or will constitute a breach of or a default under, any agreement, indenture, lease or other instrument to which the Adviser is a party or by which it or any of its properties may be bound, or violates or will violate any statute, law, regulation or filing or judgment, injunction, order or decree applicable to the Adviser or any of its properties or will result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Adviser pursuant to the terms of any agreement or instrument to which it is a party or by which it may be bound or to which any of the property or assets of the Adviser is subject. The Adviser is not subject to any order of any court or of any arbitrator, governmental authority or administrative agency.

(e) The execution and delivery of, and the performance by the Adviser of its obligations under, this Agreement and the Investment Management Agreement have been duly and validly authorized by the Adviser, and this Agreement and the Investment Management Agreement have been duly executed and delivered by the Adviser and each constitutes the valid and legally binding agreement of the Adviser, enforceable against the Adviser in accordance with its terms except as rights to indemnity and contribution hereunder may be limited by federal or state securities laws or principles of public policy and subject to the qualification that the enforceability of the Trust's obligations thereunder may be limited by bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium and other laws relating to or affecting creditors' rights generally and by general equitable principles.

(f) The Adviser has the financial resources available to it necessary for the performance of its services and obligations as contemplated in the Prospectus (or any amendment or supplement thereto) and under this Agreement and the Investment Management Agreement.

(g) The description of the Adviser in the Registration Statement and the Prospectus (and any amendment or supplement thereto) complied and comply in all material respects with the provisions of the 1933 Act, the 1940 Act, the Advisers Act, the Rules and Regulations and the Advisers Act Rules and Regulations and did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of the Prospectus, in light of the circumstances under which they were made) not misleading.

(h) Except as disclosed in the Registration Statement and the Prospectus (or any amendment or supplement to either of them), subsequent to the respective dates as of which such information is given in the Registration Statement and the Prospectus (or any amendment or supplement to either of them), the Adviser has not incurred any liability or obligation, direct or contingent, or entered into any transaction, not in the ordinary course of business, that is material to the Adviser or the Trust and that is required to be disclosed in the Registration Statement or the Prospectus and there has not been any material adverse change, or any development involving or which may reasonably be expected to involve, a prospective material adverse change, in the condition (financial or other), business, prospects, properties, net assets or results of operations of the Adviser, whether or not arising in the ordinary course of business, or which,

in each case, could have a material adverse effect on the ability of the Adviser to perform its obligations under this Agreement and the Investment Management Agreement.

(i) The Adviser has such permits, licenses, franchises and authorizations of governmental or regulatory authorities ("permits") as are necessary to own its properties and to conduct its business in the manner described in the Prospectus (and any amendment or supplement thereto); the Adviser has fulfilled and performed all its material obligations with respect to such permits and no event has occurred which allows, or after notice or lapse of time would allow, revocation or termination thereof or results in any other material impairment of the rights of the Adviser under any such permit; and, except as described in the Prospectus (and any amendment or supplement thereto), none of such permits contains any restriction that is materially burdensome to the Adviser.

(j) Except as stated in this Agreement and in the Prospectus (and in any amendment or supplement thereto), the Adviser has not taken, nor will it take, directly or indirectly, any action designed to or which might reasonably be expected to cause or result in, stabilization or manipulation of the price of any securities issued by the Trust to facilitate the sale or resale of the Shares, and the Adviser is not aware of any such action taken or to be taken by any affiliates of the Adviser.

8. INDEMNIFICATION AND CONTRIBUTION.

(a) The Trust and the Adviser, jointly and severally, agree to indemnify and hold harmless each of the Underwriters and each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act from and against any and all losses, claims, damages, liabilities and expenses (including reasonable costs of investigation), joint or several, arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in any Prepricing Prospectus or in the Registration Statement or the Prospectus or in any amendment or supplement thereto, or arising out of or based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of the Prospectus, in light of the circumstances under which they were made) not misleading, except insofar as such losses, claims, damages, liabilities or expenses arise out of or are based upon any untrue statement or omission or alleged untrue statement or omission which has been made therein or omitted therefrom in reliance upon and in conformity with the information relating to any Underwriter furnished in writing to the Trust by or on behalf of any Underwriter through you expressly for use in connection therewith; provided, however, that the indemnification contained in this paragraph (a) with respect to any Prepricing Prospectus shall not inure to the benefit of any Underwriter (or to the benefit of any person controlling such Underwriter) on account of any such loss, claim, damage, liability or expense arising from the sale of the Shares by such Underwriter to any person if a copy of the Prospectus shall not have been delivered or sent to such person within the time required by the 1933 Act and the 1933 Act Rules and Regulations, and the untrue statement or alleged untrue statement or omission or alleged omission of a material fact contained in such Prepricing Prospectus was corrected in the Prospectus, provided that the Trust has delivered the Prospectus to the several Underwriters in requisite quantity on a

timely basis to permit such delivery or sending. The foregoing indemnity agreement shall be in addition to any liability which the Trust or the Adviser may otherwise have.

(b) If any action, suit or proceeding shall be brought against any Underwriter or any person controlling any Underwriter in respect of which indemnity may be sought against the Trust or the Adviser, such Underwriter or such controlling person shall promptly notify the Trust or the Adviser, and the Trust or the Adviser shall assume the defense thereof, including the employment of counsel and payment of all fees and expenses. Such Underwriter or any such controlling person shall have the right to employ separate counsel in any such action, suit or proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Underwriter or such controlling person unless (i) the Trust or the Adviser has agreed in writing to pay such fees and expenses, (ii) the Trust and the Adviser have failed to assume the defense and employ counsel, or (iii) the named parties to any such action, suit or proceeding (including any impleaded parties) include both such Underwriter or such controlling person and the Trust or the Adviser and such Underwriter or such controlling person shall have been advised by its counsel that representation of such indemnified party and the Trust or the Adviser by the same counsel would be inappropriate under applicable standards of professional conduct (whether or not such representation by the same counsel has been proposed) due to actual or potential differing interests between them (in which case the Trust and the Adviser shall not have the right to assume the defense of such action, suit or proceeding on behalf of such Underwriter or such controlling person). It is understood, however, that the Trust and the Adviser shall, in connection with any one such action, suit or proceeding or separate but substantially similar or related actions, suits or proceedings in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of only one separate firm of attorneys (in addition to any local counsel) at any time for all such Underwriters and controlling persons not having actual or potential differing interests with you or among themselves, which firm shall be designated in writing by the Underwriters, and that all such fees and expenses shall be reimbursed as they are incurred. The Trust and the Adviser shall not be liable for any settlement of any such action, suit or proceeding effected without their written consent, but if settled with such written consent, or if there be a final judgment for the plaintiff in any such action, suit or proceeding, the Trust and the Adviser agree to indemnify and hold harmless any Underwriter, to the extent provided in the preceding paragraph, and any such controlling person from and against any loss, claim, damage, liability or expense by reason of such settlement or judgment.

(c) Each Underwriter agrees to indemnify and hold harmless the Trust and the Adviser, their trustees, directors, any officers who sign the Registration Statement, and any person who controls the Trust or the Adviser within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, to the same extent as the foregoing indemnity from the Trust and the Adviser to each Underwriter, but only with respect to information relating to such Underwriter furnished in writing by or on behalf of such Underwriter expressly for use in the Registration Statement, the Prospectus or any Prepricing Prospectus, or any amendment or supplement thereto. If any action, suit or proceeding shall be brought against the Trust or the Adviser, any of their trustees or directors, any such officer, or any such controlling person based on the Registration Statement, the Prospectus or any Prepricing Prospectus, or any amendment or supplement thereto, and in respect of which indemnity may be sought against any Underwriter

pursuant to this paragraph (c), such Underwriter shall have the rights and duties given to the Trust and the Adviser by paragraph (b) above (except that if the Trust or the Adviser shall have assumed the defense thereof such Underwriter shall not be required to do so, but may employ separate counsel therein and participate in the defense thereof, but the fees and expenses of such counsel shall be at such Underwriter's expense), and the Trust and the Adviser, their trustees or directors, any such officer, and any such controlling person shall have the rights and duties given to the Underwriters by paragraph (b) above. The foregoing indemnity agreement shall be in addition to any liability which the Underwriters may otherwise have.

(d) If the indemnification provided for in this Section 8 is unavailable to an indemnified party under paragraphs (a) or (c) hereof in respect of any losses, claims, damages, liabilities or expenses referred to therein, then an indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or expenses (i) in such proportion as is appropriate to reflect the relative benefits received by the Trust and the Adviser on the one hand (treated jointly for this purpose as one person) and the Underwriters on the other hand from the offering of the Shares, or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Trust and the Adviser on the one hand (treated jointly for this purpose as one person) and the Underwriters on the other in connection with the statements or omissions that resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative benefits received by the Trust and the Adviser on the one hand (treated jointly for this purpose as one person) and the Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Trust bear to the total underwriting discounts and commissions received by the Underwriters, in each case as set forth in the table on the cover page of the Prospectus. The relative fault of the Trust and the Adviser on the one hand (treated jointly for this purpose as one person) and the Underwriters on the other hand shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Trust and the Adviser on the one hand (treated jointly for this purpose as one person) or by the Underwriters on the other hand and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

(e) The Trust, the Adviser and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 8 were determined by a pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in paragraph
(d) above. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities and expenses referred to in paragraph (d) above shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating any claim or defending any such action, suit or proceeding. Notwithstanding the provisions of this Section 8, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price of the Shares underwritten by it and distributed to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such

untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters' obligations to contribute pursuant to this Section 8 are several in proportion to the respective numbers of Shares set forth opposite their names in Schedule I hereto (or such numbers of Shares increased as set forth in Section 11 hereof) and not joint.

(f) No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened action, suit or proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such action, suit or proceeding.

(g) Any losses, claims, damages, liabilities or expenses for which an indemnified party is entitled to indemnification or contribution under this
Section 8 shall be paid by the indemnifying party to the indemnified party as such losses, claims, damages, liabilities or expenses are incurred. The indemnity and contribution agreements contained in this Section 8 and the representations and warranties of the Trust and the Adviser set forth in this Agreement shall remain operative and in full force and effect, regardless of (i) any investigation made by or on behalf of any Underwriter or any person controlling any Underwriter, the Trust, the Adviser, their trustees, directors or officers, or any person controlling the Trust or the Adviser, (ii) acceptance of any Shares and payment therefor hereunder, and (iii) any termination of this Agreement. A successor to any Underwriter or any person controlling any Underwriter, or to the Trust, the Adviser, their trustees, directors or officers, or any person controlling the Trust or the Adviser, shall be entitled to the benefits of the indemnity, contribution, and reimbursement agreements contained in this Section 8.

9. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several obligations of the Underwriters to purchase the Shares hereunder are subject to the following conditions:

(a) If, at the time this Agreement is executed and delivered, it is necessary for the registration statement or a post-effective amendment thereto to be declared effective before the offering of the Shares may commence, the registration statement or such post-effective amendment shall have become effective not later than 5:30 P.M., New York City time, on the date hereof, or at such later date and time as shall be consented to in writing by the Underwriters, and all filings, if any, required by Rules 497 and 430A under the 1933 Act and the 1933 Act Rules and Regulations shall have been timely made; no stop order suspending the effectiveness of the Registration Statement or order pursuant to Section 8(e) of the 1940 Act shall have been issued and no proceeding for those purposes shall have been instituted or, to the knowledge of the Trust, the Adviser or any Underwriter, threatened by the Commission, and any request of the Commission for additional information (to be included in the registration statement or the prospectus or otherwise) shall have been complied with to the Underwriters' satisfaction.

(b) Subsequent to the effective date of this Agreement, there shall not have occurred (i) any change or any development involving a prospective change in or affecting the

condition (financial or other), business, prospects, properties, net assets, or results of operations of the Trust or the Adviser not contemplated by the Prospectus, which in the Underwriters' opinion would materially, adversely affect the market for the Shares, or (ii) any event or development relating to or involving the Trust or the Adviser or any officer, trustee or director of the Trust or the Adviser which makes any statement made in the Prospectus untrue or which, in the opinion of the Trust and its counsel or the Underwriters and their counsel, requires the making of any addition to or change in the Prospectus in order to state a material fact required by the 1933 Act, the 1940 Act or the Rules and Regulations or any other law to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, if amending or supplementing the Prospectus to reflect such event or development would, in the Underwriters' opinion, materially adversely affect the market for the Shares.

(c) The Trust shall have furnished to you a report showing compliance with the asset coverage requirements of the 1940 Act and a Preferred Shares Basic Maintenance Certificate (as defined in the Certificate), each dated the Closing Date and in form and substance satisfactory to you. Each such report may use portfolio holdings and valuations as of the close of business of any day not more than six business days preceding the Closing Date, provided, however, that the Trust represents in such report that its total net assets as of the Closing Date have not declined by 5% or more from such valuation date.

(d) The Underwriters shall have received on the Closing Date an opinion of Dechert, counsel for the Trust, dated the Closing Date and addressed to you, in form and substance satisfactory to you and to the effect that:

(i) The Trust (A) is a business trust duly formed by virtue of the execution and delivery of the Agreement and Declaration of Trust on December 2, 1987 and is validly existing under the laws of the State of Massachusetts with full business trust power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement and the Prospectus (and any amendment or supplement to either of them), and (B) is duly registered and qualified to conduct its business and is in good standing in the State of Arizona;

(ii) The Trust has no subsidiaries;

(iii) The authorized and outstanding capital stock of the Trust is as set forth under the caption "Capitalization" in the Prospectus; and the authorized capital stock of the Trust conforms in all material respects as to legal matters to the description thereof contained in the Prospectus under the caption "Description of Capital Structure";

(iv) All the shares of beneficial interest of the Trust outstanding prior to the issuance of the Shares have been duly authorized and validly issued by the Trust, and are fully paid and nonassessable;

(v) The Shares have been duly authorized and, when issued and delivered to the Underwriters against payment therefor in accordance with the terms hereof, will be validly issued by the Trust, fully paid and nonassessable and free of any preemptive, or to the best knowledge of such counsel after reasonable inquiry, similar rights that entitle or will entitle any person to acquire any Shares upon the issuance thereof by the Trust, and will conform to the description thereof contained in the Prospectus under the caption "Description of Preferred Shares";

(vi) The form of certificates for the Shares conforms to the requirements of Massachusetts law;

(vii) The Registration Statement and all post-effective amendments, if any, have become effective under the 1933 Act and the 1933 Act Rules and Regulations and, to the best knowledge of such counsel after reasonable inquiry, no stop order suspending the effectiveness of the Registration Statement or order pursuant to
Section 8(e) of the 1940 Act has been issued and no proceedings for that purpose are pending before or contemplated by the Commission; and any required filing of the Prospectus pursuant to Rule 497 of the 1933 Act Rules and Regulations has been made in accordance with Rule 497;

(viii) The Trust has business trust power and authority to enter into this Agreement and each of the Trust Agreements and to issue, sell and deliver the Shares to the Underwriters as provided herein, and this Agreement and each of the Trust Agreements have been duly authorized, executed and delivered by the Trust and each is a valid, legal and binding agreement of the Trust, enforceable against the Trust in accordance with its terms, except as enforcement of rights to indemnity and contribution hereunder may be limited by Federal or state securities laws or principles of public policy and subject to the qualification that the enforceability of the Trust's obligations hereunder may be limited by bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium and other laws relating to or affecting creditors' rights generally and by general equitable principles;

(ix) (A) The Trust is not in violation of the Declaration, including the Certificate, or Bylaws, or other organizational documents, and (B) based upon a certificate executed by officers of the Trust delivered to us, is not in default in the performance of any material obligation, agreement or condition contained in any bond, debenture, note or other evidence of indebtedness, except as may be disclosed in the Prospectus;

(x) Neither the offer, sale or delivery of the Shares, the execution, delivery or performance of this Agreement and in the Trust Agreements by the Trust, compliance by the Trust with the provisions hereof or thereof nor consummation by the Trust of the transactions contemplated hereby and the Trust Agreements constitutes or will constitute a breach of, or a default under, the Declaration, including the Certificate, or Bylaws, or other organizational

documents, of the Trust or any agreement, indenture, lease or other instrument to which the Trust is a party or by which it or any of its properties is bound that is an exhibit to the Registration Statement, nor will any such action result in any violation of any existing law, regulation, ruling (assuming compliance with all applicable state securities or blue sky laws), judgment, injunction, order or decree known to such counsel after reasonable inquiry, applicable to the Trust or any of its properties;

(xi) No consent, approval, authorization or other order of, or registration or filing with, the Commission, the NASD, any national securities exchange, or, to counsel's knowledge, any state securities commission, any arbitrator, any court, regulatory body, administrative agency or other governmental body, agency, or official is required on the part of the Trust (except such as may have been obtained prior to the date hereof and such as may be required for compliance with the state securities or blue sky laws of various jurisdictions) for the valid issuance and sale of the Shares to the Underwriters as contemplated by this Agreement, the execution, delivery and performance by the Trust of this Agreement and the Trust Agreements or the consummation of the transactions contemplated hereby and thereby;

(xii) The 1940 Act Notification, the Registration Statement, the Prospectus and any supplements or amendments thereto (except for the financial statements and the notes thereto and the schedules and other financial and statistical data included therein, as to which such counsel need not express any opinion) comply as to form in all material respects with the requirements of the 1933 Act, the 1940 Act and the Rules and Regulations;

(xiii) Based upon a certificate executed by officers of the Trust delivered to us, (A) other than as described or contemplated in the Registration Statement or Prospectus (or any amendment or supplement thereto), there are no legal or governmental proceedings pending or threatened against the Trust, or to which the Trust or any of its properties is subject, which are required to be described in the Registration Statement or Prospectus (or any amendment or supplement to either of them) and (B) there are no agreements, contracts, indentures, leases or other instruments that are required to be described in the Registration Statement or the Prospectus (or any amendment or supplement thereto) or to be filed as an exhibit to the Registration Statement that are not described or filed as required, as the case may be;

(xiv) The statements in the Registration Statement and Prospectus, insofar as they (A) are descriptions of contracts, agreements or other legal documents, or (B) refer to statements of law or legal conclusions, are accurate and present fairly the information required to be shown;

(xv) Each of the Trust Agreements complies in all material respects with all applicable provisions of the 1933 Act, the 1940 Act, the Advisers Act, the

Rules and Regulations and the Advisers Act Rules and Regulations, except as to rights of indemnity and contribution;

(xvi) The Trust is duly registered with the Commission under the 1940 Act and the 1940 Act Rules and Regulations as a closed-end, diversified management investment company and, to such counsel's best knowledge after reasonable inquiry, no order of suspension or revocation of such registration under the 1940 Act and the 1940 Act Rules and Regulations has been issued or proceedings therefor initiated or threatened by the Commission; the provisions of the Declaration, including the Certificate, and Bylaws comply as to form in all material respects with the applicable provisions of the 1940 Act and the 1940 Act Rules and Regulations, the provisions of the Declaration, including the Certificate, and Bylaws and the investment policies and restrictions described in the Registration Statement and the Prospectus under the captions "Investment Objective and Policies", "Risk Factors", "Additional Information About Investments and Investment Techniques" and "Investment Restrictions" (in the Prospectus and the statement of additional information) comply in all material respects with the requirements of the 1940 Act, and all action has been taken by the Trust as is required of the Trust by the 1933 Act and the 1940 Act and the Rules and Regulations in connection with the issuance and sale of the Shares to make the public offering and consummate the sale of the Shares as contemplated by this Agreement;

(xvii) Except as described in the Prospectus, there are no outstanding options, warrants or other rights calling for the issuance of, and such counsel does not know of any commitment, plan or arrangement to issue, any shares of beneficial interest of the Trust or any security convertible into or exchangeable or exercisable for shares of beneficial interest of the Trust;

(xviii) Except as described in the Prospectus, such counsel does not know of any holder of any security of the Trust or any other person who has the right, contractual or otherwise, to cause the Trust to sell or otherwise issue to them, or to permit them to underwrite the sale of, the Shares or the right to have any securities of the Trust included in the registration statement or the right, as a result of the filing of the registration statement, to require registration under the 1933 Act of any securities of the Trust;

(xix) If the Trust operates as described in the Prospectus, the Trust will qualify as a regulated investment company under the Code; and

(xx) Such counsel shall also state that, while they have not themselves checked the accuracy and completeness of or otherwise verified, and are not passing upon and assume no responsibility for the accuracy or completeness of, the statements contained in the Registration Statement or the Prospectus, except to the limited extent stated in paragraphs (iii), (xiv) and (xvi) above, in the course of their review and discussion of the contents of the Registration Statement and

Prospectus with certain officers and employees of the Trust and its independent accountants, no facts have come to their attention which cause them to believe that the Registration Statement or any amendment or supplement thereto (except as to any financial statements or other financial data included in the Registration Statement or any such amendment or supplement, as to which they express no belief), as of its effective date, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements contained therein not misleading or that the Prospectus or any amendment or supplement thereto (except as to any financial statements or other financial data included in the Prospectus or any such amendment or supplement, as to which they express no belief), as of its issue date and as of the Closing Date, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements contained therein, in the light of the circumstances under which they were made, not misleading.

Such counsel may state in its opinion letter that "[O]ur opinion is limited solely to those laws, rulings and regulations that are normally applicable to transactions of the type contemplated by the Underwriting Agreement by closed-end management investment companies registered under the 1940 Act, and to Massachusetts law with respect to the matters covered by paragraphs (i)(A), (iii), (iv), (v),
(vi) and (viii). Moreover, the opinions given under paragraphs (ix)(B) and (xiii) are based solely upon the receipt of a certificate signed by officers of the Trust attesting to the statements made therein."

(e) The Underwriters shall have received on the Closing Date an opinion of Bryan Cave LLP, counsel for the Adviser, dated the Closing Date and addressed to you, in form and substance satisfactory to you and to the effect that:

(i) The Adviser is a corporation duly incorporated and validly existing in good standing under the laws of the State of Delaware with full corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement and the Prospectus (and any amendment or supplement to either of them), and is duly registered and qualified to conduct its business and is in good standing in each of the following jurisdictions: Arizona and California;

(ii) The Adviser is duly registered with the Commission as an investment adviser under the Advisers Act and is not prohibited by the Advisers Act, the Advisers Act Rules and Regulations, the 1940 Act or the 1940 Act Rules and Regulations from acting under the Investment Management Agreement for the Trust as contemplated by the Prospectus (or any amendment or supplement thereto); and, to such counsel's knowledge, no order of suspension or revocation of such registration under the Advisers Act and the Advisers Act Rules and Regulations has been issued or proceedings therefor initiated or threatened by the Commission;

(iii) The Adviser has corporate power and authority to enter into this Agreement and the Investment Management Agreement, and this Agreement and the Investment Management Agreement have been duly authorized, executed and delivered by the Adviser and each is a valid, legal and binding agreement of the Adviser, enforceable against the Adviser in accordance with its terms except as enforcement of rights to indemnity and contribution hereunder may be limited by Federal or state securities laws or principles of public policy and subject to the qualification that the enforceability of the Adviser's obligations hereunder may be limited by bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium, and other laws relating to or affecting creditors' rights generally and by general equitable principles;

(iv) Neither the execution, delivery or performance of this Agreement or the Investment Management Agreement by the Adviser, compliance by the Adviser with the provisions hereof or thereof nor consummation by the Adviser of the transactions contemplated hereby and by the Investment Management Agreement conflicts or will conflict with, or constitutes or will constitute a breach of or default under, the certificate of incorporation or bylaws, or other organizational documents, of the Adviser or any agreement, indenture, lease or other instrument to which the Adviser is a party or by which it or any of its properties is bound that is known to such counsel, or will result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Adviser, nor will any such action result in any violation of any existing law, regulation, ruling, judgment, injunction, order or decree known to such counsel after reasonable inquiry, applicable to the Adviser or any of its properties;

(v) No consent, approval, authorization or other order of, or registration or filing with, the Commission, the NASD, any state securities commission, any national securities exchange, any arbitrator, any court, regulatory body, administrative agency or other governmental body, agency, or official is required on the part of the Adviser for the execution, delivery and performance by it of this Agreement and the Investment Management Agreement or the consummation by it of the transactions contemplated hereby and thereby;

(vi) To the best knowledge of such counsel after reasonable inquiry, there are no legal or governmental proceedings pending or threatened against the Adviser or to which the Adviser or any of its properties is subject, which are required to be described in the Registration Statement or the Prospectus (or any amendment or supplement to either of them) but are not described as required or which may reasonably be expected to involve a prospective material adverse change on the ability of the Adviser to perform its obligations under this Agreement and the Investment Management Agreement;

(vii) The obligations of the Adviser under this Agreement and the Investment Management Agreement comply in all material respects with all

applicable provisions of the 1940 Act, the 1940 Act Rules and Regulations, the Advisers Act and the Advisers Act Rules and Regulations, except as to rights of indemnity and contribution; and

(viii) Such counsel shall also state that, while they have not checked or verified the accuracy and completeness of, and are not passing upon and assume no responsibility for the accuracy and completeness of, any statements in the Registration Statement or the Prospectus, no facts have come to their attention in the course of their representation of the Adviser which cause them to believe that the description of the Adviser contained in the Registration Statement (and any amendment or supplement thereto), as of its effective date, contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements contained therein not misleading or that the description of the Adviser contained in the Prospectus or any amendment or supplement thereto, as of its issue date and as of the Closing Date, contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements contained therein, in the light of the circumstances under which they were made, not misleading.

(f) The Underwriters shall have received on the Closing Date an opinion of Simpson Thacher & Bartlett, counsel for the Underwriters, dated the Closing Date and addressed to you, with respect to such matters as you may reasonably request. It is agreed that Simpson Thacher & Bartlett may rely on the opinions of Dechert contained in Sections 9(d)(i)(A), 9(d)(v), 9(d)(viii) and 9(d)(xiv)(B) of this Agreement to the extent those opinions relate to or are dependent upon matters governed by the laws of the State of Massachusetts.

(g) The Underwriters shall have received letters addressed to you, dated the date hereof and the Closing Date, from KPMG LLP, independent certified public accountants, substantially in the forms heretofore approved by you.

(h) (i) No order suspending the effectiveness of the registration statement or the Registration Statement or prohibiting or suspending the use of the Prospectus (or any amendment or supplement thereto) or any Prepricing Prospectus or any sales material shall have been issued and no proceedings for such purpose or for the purpose of commencing an enforcement action against the Trust, the Adviser or, with respect to the transactions contemplated by the Prospectus (or any amendment or supplement thereto) and this Agreement, the Underwriters, may be pending before or, to the knowledge of the Trust, the Adviser or the Underwriters or in the reasonable view of counsel to the Underwriters, shall be threatened or contemplated by the Commission at or prior to the Closing Date and that any request for additional information on the part of the Commission (to be included in the Registration Statement, the Prospectus or otherwise) be complied with to the satisfaction of the Underwriters; (ii) there shall not have been any change in the capital stock of the Trust nor any material increase in the short-term or long-term debt of the Trust (other than in the ordinary course of business) from that set forth or contemplated in the Registration Statement or the Prospectus (or any amendment or supplement thereto); (iii) there shall not have been, subsequent to the respective dates as of which information is given in the Registration Statement and the Prospectus (or any amendment or

supplement thereto), except as may otherwise be stated in the Registration Statement and Prospectus (or any amendment or supplement thereto), any material adverse change in the condition (financial or other), business, prospects, properties, net assets or results of operations of the Trust or the Adviser;
(iv) the Trust shall not have any liabilities or obligations, direct or contingent (whether or not in the ordinary course of business), that are material to the Trust, other than those reflected in the Registration Statement or the Prospectus (or any amendment or supplement to either of them); and (v) all the representations and warranties of the Trust and the Adviser contained in this Agreement shall be true and correct on and as of the date hereof and on and as of the Closing Date as if made on and as of the Closing Date, and the Underwriters shall have received a certificate of the Trust and the Adviser, dated the Closing Date and signed by the chief executive officer and the chief financial officer of each of the Trust and the Adviser (or such other officers as are acceptable to the Underwriters), to the effect set forth in this Section 9(h) and in Section 9(i) hereof.

(i) That neither the Trust nor the Adviser shall have failed at or prior to the Closing Date to have performed or complied in all material respects with any of its agreements herein contained and required to be performed or complied with by it hereunder at or prior to the Closing Date.

(j) The Trust shall have delivered and the Underwriters shall have received evidence satisfactory to the Underwriters that each series of Shares are rated 'aaa' by Moody's and 'AAA' by S&P as of the Closing Date, and there shall not have been given any notice of any intended or potential downgrading, or of any review for a potential downgrading, in the rating accorded to the shares of each series of the Shares by either Rating Agency.

(k) The Trust and the Adviser shall have furnished or caused to be furnished to you such further certificates and documents as you shall have reasonably requested.

All such opinions, certificates, letters and other documents will be in compliance with the provisions hereof only if they are satisfactory in form and substance to the Underwriters and the Underwriters' counsel.

Any certificate or document signed by any officer of the Trust or the Adviser and delivered to the Underwriters, or to counsel for the Underwriters, shall be deemed a representation and warranty by the Trust or the Adviser to the Underwriters as to the statements made therein.

10. EXPENSES. The Trust agrees to pay the following costs and expenses and all other costs and expenses incident to the performance by it of its obligations hereunder: (i) the preparation, printing or reproduction, and filing with the Commission of the registration statement (including financial statements and exhibits thereto), each Prepricing Prospectus, the Prospectus and each amendment or supplement to any of them (including, without limitation, the filing fees prescribed by the 1933 Act, the 1940 Act and the Rules and Regulations); (ii) the printing (or reproduction) and delivery (including postage, air freight charges and charges for counting and packaging) of such copies of the Registration Statement, each Prepricing Prospectus, the Prospectus, any sales material and all amendments or supplements to any of them as may be reasonably requested for use in connection with the offering and sale of the Shares; (iii) the preparation, printing, authentication, issuance and delivery of certificates for the Shares, including any stamp taxes in connection with the original issuance and sale of the Shares; (iv) the reproduction and delivery of this Agreement, any dealer agreements, the preliminary blue sky memorandum and all other agreements or documents reproduced and delivered in connection with the offering of the Shares; (v) the reasonable fees, expenses and disbursements of counsel for the Underwriters relating to the preparation, reproduction, and delivery of the preliminary blue sky memorandum; (vi) fees paid to the Rating Agencies; (vii) the transportation and other expenses incurred by or on behalf of Trust representatives in connection with presentations to prospective purchasers of the Shares; and (viii) the fees and expenses of the Trust's accountants and the fees and expenses of counsel (including local and special counsel) for the Trust and of the transfer agent.

11. EFFECTIVE DATE OF AGREEMENT. This Agreement shall become effective: (i) upon the execution and delivery hereof by the parties hereto; or
(ii) if, at the time this Agreement is executed and delivered, it is necessary for the registration statement or a post-effective amendment thereto to be declared effective before the offering of the Shares may commence, when notification of the effectiveness of the registration statement or such post-effective amendment has been released by the Commission. Until such time as this Agreement shall have become effective, it may be terminated by the Trust, by notifying the Underwriters, or by the Underwriters, by notifying the Trust.

If any one or more of the Underwriters shall fail or refuse to purchase Shares which it or they are obligated to purchase hereunder on the Closing Date, and the aggregate number of Shares which such defaulting Underwriter or Underwriters are obligated but fail or refuse to purchase is not more than one-tenth of the aggregate number of Shares which the Underwriters are obligated to purchase on the Closing Date, each non-defaulting Underwriter shall be obligated, severally, in the proportion which the number of Shares set forth opposite its name in Schedule I hereto bears to the aggregate number of Shares set forth opposite the names of all non-defaulting Underwriters or in such other proportion as you may specify, to purchase the Shares which such defaulting Underwriter or Underwriters are obligated, but fail or refuse, to purchase. If any one or more of the Underwriters shall fail or refuse to purchase Shares which it or they are obligated to purchase on the Closing Date and the aggregate number of Shares with respect to which such default occurs is more than one-tenth of the aggregate number of Shares which the Underwriters are obligated to purchase on the Closing Date and arrangements satisfactory to you and the Trust for the purchase of such Shares by one or more non-defaulting Underwriters or other party or parties approved by you and the Trust are not made within 36

hours after such default, this Agreement will terminate without liability on the part of any non-defaulting Underwriter, the Trust or the Adviser. In any such case which does not result in termination of this Agreement, either you or the Trust shall have the right to postpone the Closing Date, but in no event for longer than seven days, in order that the required changes, if any, in the Registration Statement and the Prospectus or any other documents or arrangements may be effected. Any action taken under this paragraph shall not relieve any defaulting Underwriter from liability in respect of any such default of any such Underwriter under this Agreement. The term "Underwriter" as used in this Agreement includes, for all purposes of this Agreement, any party not listed in Schedule I hereto who, with your approval and the approval of the Trust, purchases Shares which a defaulting Underwriter is obligated, but fails or refuses, to purchase.

Any notice under this Section 11 may be given by telegram, telecopy or telephone but shall be subsequently confirmed by letter.

12. TERMINATION OF AGREEMENT. This Agreement shall be subject to termination in the Underwriters' absolute discretion, without liability on the part of any Underwriter to the Trust or the Adviser, by notice to the Trust or the Adviser, if prior to the Closing Date (i) trading in the Shares or the Trust's common shares of beneficial interest or securities generally on the NYSE shall have been suspended or materially limited or minimum prices shall have been established on the NYSE, (ii) a general moratorium on commercial banking activities in New York shall have been declared by either federal or state authorities, or (iii) there shall have occurred any outbreak or escalation of hostilities, declaration by the United States of a national emergency or war, or other international or domestic calamity, crisis or change in political, financial or economic conditions, the effect of which on the financial markets of the United States is to make it, in your judgment, impracticable or inadvisable to commence or continue the offering of the Shares at the offering price to the public set forth on the cover page of the Prospectus or to enforce contracts for the resale of the Shares by the Underwriters. Notice of such termination may be given to the Trust by telegram, telecopy or telephone and shall be subsequently confirmed by letter.

13. INFORMATION FURNISHED BY THE UNDERWRITERS. The statements set forth in the last paragraph on the cover page and the statements in the third and fifth paragraphs under the caption "Underwriting" in any Prepricing Prospectus and in the Prospectus, constitute the only information furnished by or on behalf of the Underwriters through you as such information is referred to in Sections 6(b) and 8 hereof.

14. MISCELLANEOUS. Except as otherwise provided in Sections 5, 11 and 12 hereof, notice given pursuant to any provision of this Agreement shall be in writing and shall be delivered (i) if to the Trust or the Adviser, at the office of the Trust at 7337 E. Doubletree Ranch Rd., Scottsdale, Arizona 85258-2034, Attention: Daniel A. Norman, Senior Vice President; or (ii) if to the Underwriters, to Salomon Smith Barney Inc., 388 Greenwich Street, New York, New York 10013, Attention: Manager, Investment Banking Division.

This Agreement has been and is made solely for the benefit of the Underwriters, the Trust, the Adviser, their trustees, directors and officers, and the other controlling persons

referred to in Section 8 hereof and their respective successors and assigns, to the extent provided herein, and no other person shall acquire or have any right under or by virtue of this Agreement. Neither the term "successor" nor the term "successors and assigns" as used in this Agreement shall include a purchaser from the Underwriters of any of the Shares in his status as such purchaser.

Consistent with the Trust's Declaration, notice is hereby given and the parties hereto acknowledge and agree that this Agreement is executed on behalf of the trustees of the Trust as trustees and not individually and that obligations of this Agreement are not binding upon any of the trustees or shareholders of the Trust individually but are binding only against the assets and property of the Trust.

15. APPLICABLE LAW; COUNTERPARTS. This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

This Agreement may be signed in various counterparts, which together constitute one and the same instrument. If signed in counterparts, this Agreement shall not become effective unless at least one counterpart hereof shall have been executed and delivered on behalf of each party hereto.

Please confirm that the foregoing correctly sets forth the agreement among the Trust, the Adviser and the several Underwriters.

Very truly yours,

PILGRIM PRIME RATE TRUST

Title:

ING PILGRIM INVESTMENTS, INC.

Title:

Confirmed as of the date first above
mentioned on behalf of themselves
and the other several Underwriters
named in Schedule I hereto.

SALOMON SMITH BARNEY INC.
UBS WARBURG LLC
LEHMAN BROTHERS INC.
GRUNTAL & CO., L.L.C.

By: SALOMON SMITH BARNEY INC.

By:  /s/ Robert F. Bush Jr.
     -------------------------------
     Name:  Robert F. Bush Jr.
     Title: Director

Please confirm that the foregoing correctly sets forth the agreement among the Trust, the Adviser and the several Underwriters.

Very truly yours,

PILGRIM PRIME RATE TRUST

By:     /s/ Daniel A. Norman
     -------------------------------
        Name: Daniel A. Norman
        Title: Senior Vice President and Treasurer

ING PILGRIM INVESTMENTS, INC.

By:     /s/ Daniel A. Norman
     -------------------------------
        Name: Daniel A. Norman
        Title: Senior Vice President and Treasurer

Confirmed as of the date first above
mentioned on behalf of themselves
and the other several Underwriters
named in Schedule I hereto.

SALOMON SMITH BARNEY INC.
UBS WARBURG LLC
LEHMAN BROTHERS INC.
GRUNTAL & CO., L.L.C.

By: SALOMON SMITH BARNEY INC.

                                   NUMBER OF
UNDERWRITER                        SHARES
-----------                        ---------
Salomon Smith Barney Inc.          2,160 Series T
                                   2,160 Series Th

UBS Warburg LLC                    1,080 Series T
                                   1,080 Series Th

Lehman Brothers Inc.               180 Series T
                                   180 Series Th

Gruntal & Co., L.L.C.              180 Series T
                                   180 Series Th

                                   ---------------
Total                              3,600 Series T
                                   3,600 Series Th

Exhibit 99.(h)(ii)(1)

Auction Rate Cumulative Preferred Shares

PILGRIM PRIME RATE TRUST

3,600 Shares, Series M

3,600 Shares, Series W

3,600 Shares, Series F

Liquidation Preference $25,000 Per Share

UNDERWRITING AGREEMENT

October 30, 2000

SALOMON SMITH BARNEY INC.
PAINEWEBBER INCORPORATED
LEHMAN BROTHERS INC.
GRUNTAL & CO., L.L.C.

c/o SALOMON SMITH BARNEY INC.
388 Greenwich Street
New York, New York 10013

Ladies and Gentlemen:

Pilgrim Prime Rate Trust, a Massachusetts business trust (the "Trust"), proposes, upon the terms and conditions set forth herein, to issue and sell an aggregate of 3,600 shares of its Auction Rate Cumulative Preferred Shares, Series M, 3,600 shares of its Auction Rate Cumulative Preferred Shares, Series W and 3,600 shares of its Auction Rate Cumulative Preferred Shares, Series F, each with a liquidation preference of $25,000 per share (the shares of Auction Rate Cumulative Preferred Shares to be sold hereby are referred to herein, collectively, as the "Shares"). The Shares will be authorized by, and subject to the terms and conditions of, the Certificate of Designation for Preferred Shares of the Trust (the "Certificate") in the form filed as an exhibit to the Registration Statement referred to in Section 1 of this agreement. The Trust and its investment adviser, ING Pilgrim Investments, Inc. (the "Adviser"), wish to confirm as follows their agreement with Salomon Smith Barney Inc., PaineWebber Incorporated, Lehman Brothers Inc. and Gruntal & Co., L.L.C. (the "Underwriters"), in connection with the purchase of the Shares by the Underwriters.

Collectively, the Investment Management Agreement dated as of September 1, 2000 between the Trust and the Adviser ("the "Investment Management Agreement"), the Custodian Agreement dated as of July 1, 1996 between the Trust and State Street Bank and Trust - Kansas City, the Agency Agreement dated as of October 1, 1996 between the Trust and DST Systems, Inc. and the Auction Agency Agreement between the Trust and Bankers Trust Company are hereinafter referred to as the "Trust Agreements." This Underwriting Agreement is hereinafter referred to as the "Agreement."

1. REGISTRATION STATEMENT AND PROSPECTUS. The Trust has prepared in conformity with the provisions of the Securities Act of 1933, as amended (the "1933 Act"), the Investment Company Act of 1940, as amended (the "1940 Act"), and the rules and regulations of the Securities and Exchange Commission (the "Commission") promulgated under the 1933 Act (the "1933 Act Rules and Regulations") and the 1940 Act (the "1940 Act Rules and Regulations" and, together with the 1933 Act Rules and Regulations, the "Rules and Regulations") a registration statement on Form N-2, as amended by Pre-Effective Amendment No. 1 (File Nos. 333-44918 and 811-05410), under the 1933 Act and the 1940 Act (the "registration statement"), including a prospectus relating to the Shares, and has filed the registration statement and prospectus in accordance with the 1933 Act and the 1940 Act. The Trust also has filed a notification of registration of the Trust as an investment company under the 1940 Act on Form N-8A (the "1940 Act Notification"). The term "Registration Statement" as used in this Agreement means the registration statement (including all financial schedules and exhibits), as amended at the time it becomes effective under the 1933 Act or, if the registration statement became effective under the 1933 Act prior to the execution of this Agreement, as amended or supplemented at the time it became effective, prior to the execution of this Agreement. If it is contemplated, at the time this Agreement is executed, that a post-effective amendment to the registration statement will be filed under the 1933 Act and must be declared effective before the offering of the Shares may commence, the term "Registration Statement" as used in this Agreement means the registration statement as amended by said post-effective amendment. If the Trust has filed an abbreviated registration statement to register an additional amount of Shares pursuant to Rule 462(b) under the 1933 Act (the "Rule 462 Registration Statement"), then any reference herein to the term "Registration Statement" shall include such Rule 462 Registration Statement. The term "Prospectus" as used in this Agreement means the prospectus and statement of additional information in the forms included in the Registration Statement or, if the prospectus and statement of additional information included in the Registration Statement omit information in reliance on Rule 430A under the 1933 Act Rules and Regulations and such information is included in a prospectus and statement of additional information filed with the Commission pursuant to Rule 497(h) under the 1933 Act, the term "Prospectus" as used in this Agreement means the prospectus and statement of additional information in the forms included in the Registration Statement as supplemented by the addition of the information contained in the prospectus filed with the Commission pursuant to Rule 497(h). The term "Prepricing Prospectus" as used in this Agreement means the prospectus and statement of additional information subject to completion in the forms included in the registration statement at the time of filing of amendment no. 1 to the registration statement with the Commission on October 23, 2000, and as such prospectus and statement of additional information shall have been amended from time to time prior to the date of the Prospectus, together with any other prospectus and

statement of additional information relating to the Trust other than the Prospectus approved in writing by or directly or indirectly prepared by the Trust or the Adviser; it being understood that the definition of Prepricing Prospectus above shall not include any Prepricing Prospectus prepared by the Underwriters unless approved in writing by the Trust or Adviser. The terms "Registration Statement," "Prospectus" and "Prepricing Prospectus" shall also include any financial statements incorporated by reference therein.

The Trust has furnished Salomon Smith Barney Inc. with copies of such registration statement, each amendment to such registration statement filed with the Commission and each Prepricing Prospectus, and Salomon Smith Barney Inc. has provided the same to the other Underwriters.

2. AGREEMENTS TO SELL AND PURCHASE. The Trust hereby agrees, subject to all the terms and conditions set forth herein, to issue and sell to the Underwriters and, upon the basis of the representations, warranties and agreements of the Trust and the Adviser herein contained and subject to all the terms and conditions set forth herein, the Underwriters agree to purchase from the Trust, at a purchase price of $24,750 per Share, the number of shares of each series of Auction Rate Cumulative Preferred Shares set forth opposite the name of each Underwriter in Schedule I hereto.

3. TERMS OF PUBLIC OFFERING. The Trust and the Adviser have been advised by the Underwriters that they propose to make a public offering of the Shares as soon after the Registration Statement and this Agreement have become effective as in the Underwriters' judgment is advisable and initially to offer the Shares upon the terms set forth in the Prospectus.

4. DELIVERY OF THE SHARES AND PAYMENT THEREFOR. Delivery to the Underwriters of and payment for the Shares shall be made at the office of Simpson Thacher & Bartlett, 425 Lexington Avenue, New York, NY 10017, or through the facilities of The Depository Trust Company or another mutually agreeable facility, at 9:30 A.M., New York City time, on November 2, 2000 (the "Closing Date"). The place of closing for the Shares and the Closing Date may be varied by agreement between you and the Trust.

Certificates for the Shares shall be registered in such names and in such denominations as the Underwriters shall request prior to 9:30 A.M., New York City time, on the second business day preceding the Closing Date. Such certificates shall be made available to the Underwriters in New York City for inspection not later than 9:30 A.M., New York City time, on the business day next preceding the Closing Date. The certificates evidencing the Shares shall be delivered to the Underwriters on the Closing Date, through the facilities of The Depository Trust Company or another mutually agreeable facility, against payment of the purchase price therefor in immediately available funds.

5. AGREEMENTS OF THE TRUST AND THE ADVISER. The Trust and the Adviser, jointly and severally, agree with the Underwriters as follows:

(a) If, at the time this Agreement is executed and delivered, it is necessary for the Registration Statement or a post-effective amendment thereto to be declared effective under the

1933 Act before the offering of the Shares may commence, the Trust will endeavor to cause the Registration Statement or such post-effective amendment to become effective under the 1933 Act as soon as possible and will advise the Underwriters promptly and, if requested by the Underwriters, will confirm such advice in writing when the Registration Statement or such post-effective amendment has become effective.

(b) The Trust will advise the Underwriters promptly and, if requested by the Underwriters, will confirm such advice in writing: (i) of any request made by the Commission for amendment of or a supplement to the Registration Statement, any Prepricing Prospectus or the Prospectus (or any amendment or supplement to any of the foregoing) or for additional information, (ii) of the issuance by the Commission, the National Association of Securities Dealers, Inc. (the "NASD"), any state securities commission, any national securities exchange, any arbitrator, any court or any other governmental, regulatory, self-regulatory or administrative agency or any official of any order suspending the effectiveness of the Registration Statement, prohibiting or suspending the use of the Prospectus or any Prepricing Prospectus, or any sales material (as hereinafter defined), of any notice pursuant to Section 8(e) of the 1940 Act, of the suspension of qualification of the Shares for offering or sale in any jurisdiction, or the initiation of any proceeding for any such purposes, (iii) of receipt by the Trust, the Adviser, any affiliate of the Trust or the Adviser or any representative or attorney of the Trust or the Adviser of any other material communication from the Commission, the NASD, any state securities commission, any national securities exchange, any arbitrator, any court or any other governmental, regulatory, self-regulatory or administrative agency or any official relating to the Trust (if such communication relating to the Trust is received by such person within three years after the date of this Agreement), the Registration Statement, the 1940 Act Notification, the Prospectus, any Prepricing Prospectus, any sales material (as herein defined) (or any amendment or supplement to any of the foregoing) or this Agreement or any of the Trust Agreements and (iv) within the period of time referred to in paragraph (f) below, of any material adverse change in the condition (financial or other), business, prospects, properties, net assets or results of operations of the Trust or the Adviser or of the happening of any other event which makes any statement of a material fact made in the Registration Statement or the Prospectus, or any Prepricing Prospectus or any sales materials (as herein defined) (or any amendment or supplement to any of the foregoing) untrue or which requires the making of any additions to or changes in the Registration Statement or the Prospectus, or any Prepricing Prospectus or any sales materials (as herein defined) (or any amendment or supplement to any of the foregoing) in order to state a material fact required by the 1933 Act, the 1940 Act or the Rules and Regulations to be stated therein or necessary in order to make the statements therein (in the case of the Prospectus, in light of the circumstances under which they were made), not misleading or of the necessity to amend or supplement the Registration Statement, the Prospectus, or any Prepricing Prospectus or any sales material (as herein defined) (or any amendment or supplement to any of the foregoing) to comply with the 1933 Act, the 1940 Act, the Rules and Regulations or any other law or order of any court or regulatory body. If at any time the Commission, the NASD, any state securities commission, any national securities exchange, any arbitrator, any court or any other governmental, regulatory, self-regulatory or administrative agency or any official shall issue any order suspending the effectiveness of the Registration Statement, prohibiting or suspending the use of the Prospectus or any sales material (as herein defined) (or any amendment or supplement to any of the foregoing) or suspending the qualification of the Shares for offering or sale in any jurisdiction,

the Trust will make every reasonable effort to obtain the withdrawal of such order at the earliest possible time.

(c) The Trust will furnish to you, without charge, three signed copies of the Registration Statement as originally filed with the Commission and of each amendment thereto, including financial statements and all exhibits thereto, and will also furnish to you, without charge, such number of conformed copies of the Registration Statement as originally filed and of each amendment thereto, but without exhibits, as you may reasonably request.

(d) The Trust will not (i) file any amendment to the Registration Statement or make any amendment or supplement to the Prospectus, or any sales material (as herein defined), of which you shall not previously have been advised or to which you shall reasonably object after being so advised or (ii) so long as, in the opinion of counsel for the Underwriters, a Prospectus is required by the 1933 Act to be delivered in connection with sales by the Underwriters or any dealer, file any information, documents or reports pursuant to the Securities Exchange Act of 1934, as amended (the "1934 Act"), without delivering a copy of such information, documents or reports to you prior to or concurrently with such filing.

(e) Prior to the execution and delivery of this Agreement, the Trust has delivered to you, without charge, in such quantities as you have requested, copies of each form of the Prepricing Prospectus. The Trust consents to the use, in accordance with the provisions of the 1933 Act and with the state securities or blue sky laws of the jurisdictions in which the Shares are offered by the Underwriters and by dealers, prior to the date of the Prospectus, of each Prepricing Prospectus so furnished by the Trust.

(f) As soon after the execution and delivery of this Agreement as possible and thereafter from time to time for such period as in the opinion of counsel for the Underwriters a prospectus is required by the 1933 Act to be delivered in connection with sales by the Underwriters or any dealer, the Trust will expeditiously deliver to the Underwriters and each dealer, without charge, as many copies of the Prospectus (and of any amendment or supplement thereto) as the Underwriters may reasonably request. The Trust consents to the use of the Prospectus (and of any amendment or supplement thereto) in accordance with the provisions of the 1933 Act and with the state securities or blue sky laws of the jurisdictions in which the Shares are offered by the Underwriters and by all dealers to whom Shares may be sold, both in connection with the offering and sale of the Shares and for such period of time thereafter as the Prospectus is required by the 1933 Act to be delivered in connection with sales by the Underwriters or any dealer. If during such period of time any event shall occur that in the judgment of the Trust or in the opinion of counsel for the Underwriters is required to be set forth in the Registration Statement or the Prospectus (as then amended or supplemented) or should be set forth therein in order to make the statements therein (in the case of the Prospectus, in the light of the circumstances under which they were made) not misleading, or if it is necessary to supplement or amend the Registration Statement or the Prospectus to comply with the 1933 Act, the 1940 Act, the Rules and Regulations or any other federal law, rule or regulation, or any state securities or blue sky disclosure laws, rules or regulations, the Trust will forthwith prepare and, subject to the provisions of paragraph (d) above, promptly file with the Commission an appropriate supplement or amendment thereto, and will expeditiously furnish to the Underwriters

and dealers, without charge, a reasonable number of copies thereof. In the event that the Trust and the Underwriters agree that the Registration Statement or the Prospectus should be amended or supplemented, the Trust, if requested by the Underwriters, will promptly issue a press release announcing or disclosing the matters to be covered by the proposed amendment or supplement.

(g) The Trust will make generally available to its security holders an earnings statement, which need not be audited, covering a twelve-month period ending not later than 15 months after the effective date of the Registration Statement as soon as practicable after the end of such period, which earnings statement shall satisfy the provisions of Section 11(a) of the 1933 Act and Rule 158 of the 1933 Act Rules and Regulations.

(h) During the period of five years after the date of this Agreement, the Trust will furnish to you (i) as soon as available, a copy of each report of the Trust mailed to stockholders or filed with the Commission or furnished to the New York Stock Exchange (the "NYSE") other than reports on Form N-SAR, and
(ii) from time to time such other information concerning the Trust as the Underwriters may reasonably request.

(i) If this Agreement shall terminate or shall be terminated after execution pursuant to any provisions hereof (otherwise than by notice given by the Underwriters terminating this Agreement pursuant to Section 12 hereof) or if this Agreement shall be terminated by the Underwriters because of any failure or refusal on the part of the Trust or the Adviser to comply with the terms or fulfill any of the conditions of this Agreement, the Trust and the Adviser, jointly and severally, agree to reimburse the Underwriters for all out-of-pocket expenses (including reasonable fees and expenses of counsel for the Underwriters) incurred by the Underwriters in connection herewith.

(j) The Trust will apply the net proceeds from the sale of the Shares substantially in accordance with the description set forth in the Prospectus and in such a manner as to comply with the investment objectives, policies and restrictions of the Trust as described in the Prospectus.

(k) The Trust will timely file the Prospectus with the Commission pursuant to Rule 497(c) or Rule 497(h) of the 1933 Act Rules and Regulations, whichever is applicable or, if applicable, will timely file the certification permitted by Rule 497(j) of the 1933 Act Rules and Regulations and will advise the Underwriters of the time and manner of such filing.

(l) Except as provided in this Agreement, the Trust will not sell, contract to sell, or otherwise dispose of any senior securities (as defined in the 1940 Act) (other than senior securities sold in an underwriting lead-managed by Salomon Smith Barney Inc.) of the Trust, or grant any options or warrants to purchase senior securities of the Trust, for a period of 180 days after the date of the Prospectus, without the prior written consent of the Underwriters.

(m) Except as stated in this Agreement and in the Prepricing Prospectus and the Prospectus, neither the Trust nor the Adviser has taken, nor will it take, directly or indirectly, any action designed to or that might reasonably be expected to cause or result in stabilization or

manipulation of the price of any securities issued by the Trust to facilitate the sale or resale of the Shares.

(n) The Trust will use commercially reasonable efforts to cause the Shares, prior to the Closing Date, to be assigned a rating of 'aaa' by Moody's Investors Service, Inc. ("Moody's") and 'AAA' by Standard & Poor's, a division of McGraw-Hill Companies, Inc. ("S&P" and, together with Moody's, the "Rating Agencies").

(o) The Trust and the Adviser will use commercially reasonable efforts to perform all of the agreements required of them and discharge all conditions to closing as set forth in this Agreement.

6. REPRESENTATIONS AND WARRANTIES OF THE TRUST AND THE ADVISER. The Trust and the Adviser, jointly and severally, represent and warrant to the Underwriters that:

(a) Each Prepricing Prospectus included as part of the registration statement as originally filed or as part of any amendment or supplement thereto, or filed pursuant to Rule 497 of the 1933 Act Rules and Regulations, complied when so filed in all material respects with the provisions of the 1933 Act, the 1940 Act and the Rules and Regulations. The Commission has not issued any order preventing or suspending the use of any Prepricing Prospectus.

(b) The registration statement in the form in which it became or becomes effective and also in such form as it may be when any post-effective amendment thereto shall become effective and the Prospectus and any supplement or amendment thereto when filed with the Commission under Rule 497 of the 1933 Act Rules and Regulations and the 1940 Act Notification when originally filed with the Commission and any amendment or supplement thereto when filed with the Commission, complied or will comply in all material respects with the provisions of the 1933 Act, the 1940 Act and the Rules and Regulations and did not or will not at any such times contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of the Prospectus, in light of the circumstances under which they were made) not misleading, except that this representation and warranty does not apply to statements in or omissions from the registration statement or the Prospectus made in reliance upon and in conformity with information relating to the Underwriters furnished to the Trust in writing by or on behalf of the Underwriters expressly for use therein.

(c) All the outstanding common shares of beneficial interest of the Trust have been duly authorized and validly issued by the Trust, are fully paid and nonassessable and are free of any preemptive or similar rights; the Shares have been duly authorized and, when issued and delivered to the Underwriters against payment therefor in accordance with the terms hereof, will be validly issued by the Trust, fully paid and nonassessable and free of any preemptive or similar rights and will conform to the description thereof in the Registration Statement and the Prospectus (and any amendment or supplement to either of them); and the capitalization of the Trust conforms to the description thereof in the Registration Statement and the Prospectus (and any amendment or supplement to either of them).

(d) The Trust is a business trust duly organized and validly existing under the laws of the State of Massachusetts with full business trust power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement and the Prospectus (and any amendment or supplement to either of them), and is duly registered and qualified to conduct its business and is in good standing in each jurisdiction or place where the nature of its properties or the conduct of its business requires such registration or qualification, except where the failure so to register or qualify does not have a material adverse effect on the condition (financial or other), business, prospects, properties, net assets or results of operations of the Trust; and the Trust has no subsidiaries.

(e) There are no legal or governmental proceedings pending or, to the knowledge of the Trust, threatened, against the Trust, or to which the Trust or any of its properties is subject, that are required to be described in the Registration Statement or the Prospectus (and any amendment or supplement to either of them) but are not described as required, and there are no agreements, contracts, indentures, leases or other instruments that are required to be described in the Registration Statement or the Prospectus (and any amendment or supplement to either of them) or to be filed as an exhibit to the Registration Statement that are not described or filed as required by the 1933 Act, the 1940 Act or the Rules and Regulations.

(f) The Trust is not in violation of its Agreement and Declaration of Trust (the "Declaration"), or bylaws (the "Bylaws"), or other organizational documents or of any law, ordinance, administrative or governmental rule or regulation applicable to the Trust or of any decree of the Commission, the NASD, any state securities commission, any national securities exchange, any arbitrator, any court or governmental agency, body or official having jurisdiction over the Trust, or in default in any material respect in the performance of any obligation, agreement or condition contained in any bond, debenture, note or any other evidence of indebtedness or in any material agreement, indenture, lease or other instrument to which the Trust is a party or by which it or any of its properties may be bound.

(g) Neither the issuance and sale of the Shares, the execution, delivery or performance of this Agreement or any of the Trust Agreements by the Trust, nor the consummation by the Trust of the transactions contemplated hereby or thereby (A) requires the Trust to obtain any consent, approval, authorization or other order of or registration or filing with, the Commission, the NASD, any state securities commission, any national securities exchange, any arbitrator, any court, regulatory body, administrative agency or other governmental body, agency or official (except such as may have been obtained prior to the date hereof and such as may be required for compliance with the state securities or blue sky laws of various jurisdictions which have been or will be effected in accordance with this Agreement) or conflicts or will conflict with or constitutes or will constitute a breach of, or a default under, the Declaration, the Bylaws or other organizational documents of the Trust or (B) conflicts or will conflict with or constitutes or will constitute a breach of, or a default under, any agreement, indenture, lease or other instrument to which the Trust is a party or by which it or any of its properties may be bound, or violates or will violate any statute, law, regulation or judgment, injunction, order or decree applicable to the Trust or any of its properties, or will result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Trust pursuant to the terms of any agreement or instrument to which it is a party or by which it

may be bound or to which any of its property or assets is subject. The Trust is not subject to any order of any court or of any arbitrator, governmental authority or administrative agency.

(h) The accountants, KPMG LLP, who have certified or shall certify the financial statements included or incorporated by reference in the Registration Statement and the Prospectus (or any amendment or supplement to either of them) have represented to the Trust that they are independent public accountants as required by the 1933 Act, the 1940 Act and the Rules and Regulations.

(i) The financial statements, together with related schedules and notes, included or incorporated by reference in the Registration Statement and the Prospectus (and any amendment or supplement to either of them), present fairly the financial position, results of operations and changes in financial position of the Trust on the basis stated or incorporated by reference in the Registration Statement at the respective dates or for the respective periods to which they apply; such statements and related schedules and notes have been prepared in accordance with generally accepted accounting principles consistently applied throughout the periods involved, except as disclosed therein; and the other financial and statistical information and data included in the Registration Statement and the Prospectus (and any amendment or supplement to either of them) are accurately presented and prepared on a basis consistent with such financial statements and the books and records of the Trust.

(j) The execution and delivery of, and the performance by the Trust of its obligations under, this Agreement and the Trust Agreements have been duly and validly authorized by the Trust, and this Agreement and the Trust Agreements have been duly executed and delivered by the Trust and constitute the valid and legally binding agreements of the Trust, enforceable against the Trust in accordance with their terms, except as rights to indemnity and contribution hereunder and thereunder may be limited by federal or state securities laws or principles of public policy and subject to the qualification that the enforceability of the Trust's obligations thereunder may be limited by bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium and other laws relating to or affecting creditors' rights generally and by general equitable principles.

(k) Except as disclosed in the Registration Statement and the Prospectus (or any amendment or supplement to either of them), subsequent to the respective dates as of which such information is given in the Registration Statement and the Prospectus (or any amendment or supplement to either of them), the Trust has not incurred any liability or obligation, direct or contingent, or entered into any transaction, not in the ordinary course of business, that is material to the Trust, and there has not been any change in the capital stock, or material increase in the short-term debt or long-term debt, of the Trust, or any material adverse change, or any development involving or which may reasonably be expected to involve, a prospective material adverse change, in the condition (financial or other), business, prospects, properties, net assets or results of operations of the Trust, whether or not arising in the ordinary course of business.

(1) The Trust has not distributed and, prior to the later to occur of
(i) the Closing Date and (ii) completion of the distribution of the Shares, will not distribute any offering material in connection with the offering and sale of the Shares other than the Registration Statement, the

Prepricing Prospectus, the Prospectus or other materials, if any, permitted by the 1933 Act, the 1940 Act or the Rules and Regulations.

(m) The Trust has such permits, licenses, franchises and authorizations of governmental or regulatory authorities ("permits") as are necessary to own its properties and to conduct its business in the manner described in the Prospectus (and any amendment or supplement thereto), subject to such qualifications as may be set forth in the Prospectus; the Trust has fulfilled and performed all its material obligations with respect to such permits and no event has occurred which allows, or after notice or lapse of time would allow, revocation or termination thereof or results in any other material impairment of the rights of the Trust under any such permit, subject in each case to such qualification as may be set forth in the Prospectus (and any amendment or supplement thereto); and, except as described in the Prospectus (and any amendment or supplement thereto), none of such permits contains any restriction that is materially burdensome to the Trust.

(n) The Trust maintains a system of internal accounting controls sufficient to provide reasonable assurances that (i) transactions in portfolio securities are executed in accordance with management's general or specific authorization and with the applicable requirements of the 1940 Act, the 1940 Act Rules and Regulations and the Internal Revenue Code of 1986, as amended (the "Code"); (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain accountability for assets and to maintain compliance with the books and records requirements under the 1940 Act and the 1940 Act Rules and Regulations; (iii) access to assets is permitted only in accordance with management's general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

(o) To the Trust's knowledge, neither the Trust nor any employee or agent of the Trust has made any payment of funds of the Trust or received or retained any funds, which payment, receipt or retention of funds is of a character required to be disclosed in the Prospectus and that is not so disclosed.

(p) The Trust has filed all tax returns required to be filed, which returns are complete and correct in all material respects, and the Trust is not in material default in the payment of any taxes which were payable pursuant to said returns or any assessments with respect thereto.

(q) No holder of any security of the Trust has any right to require registration of common shares of beneficial interest or any other security of the Trust because of the filing of the registration statement or consummation of the transactions contemplated by this Agreement.

(r) The Trust, subject to the registration statement having been declared effective and the filing of the Prospectus under Rule 497 under the 1933 Act Rules and Regulations, has taken all required action under the 1933 Act, the 1940 Act and the Rules and Regulations to make the public offering and consummate the sale of the Shares as contemplated by this Agreement.

(s) The conduct by the Trust of its business (as described in the Prospectus) does not, to the knowledge of the Trust or the Adviser after reasonable inquiry, require the Trust to be the owner, possessor or licensee of any patents, patent licenses, trademarks, service marks or trade names which it does not own, possess or license.

(t) The Trust is registered under the 1940 Act as a closed-end, diversified management investment company and the 1940 Act Notification has been duly filed with the Commission and, at the time of filing thereof and any amendment or supplement thereto, conformed in all material respects with all applicable provisions of the 1940 Act and the Rules and Regulations. The Trust is, and at all times through the completion of the transactions contemplated hereby, will be, in compliance in all material respects with the terms and conditions of the 1933 Act and the 1940 Act. No person is serving or acting as an officer, trustee or investment adviser of the Trust except in accordance with the provisions of the 1940 Act and the 1940 Act Rules and Regulations and the Investment Advisers Act of 1940, as amended (the "Advisers Act"), and the rules and regulations of the Commission promulgated under the Advisers Act (the "Advisers Act Rules and Regulations").

(u) Except as stated in this Agreement and in the Prospectus (and any amendment or supplement thereto), the Trust has not taken, nor will it take, directly or indirectly, any action designed to or which might reasonably be expected to cause or result in stabilization or manipulation of the price of any securities issued by the Trust to facilitate the sale or resale of the Shares, and the Trust is not aware of any such action taken or to be taken by any affiliates of the Trust.

(v) The Trust has filed in a timely manner each document or report required to be filed by it pursuant to the 1934 Act and the rules and regulations of the Commission promulgated thereunder (the "1934 Act Rules and Regulations"); each such document or report at the time it was filed conformed to the requirements of the 1934 Act and the 1934 Act Rules and Regulations; and none of such documents or reports contained an untrue statement of any material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein not misleading.

(w) All advertising, sales literature or other promotional material (including "prospectus wrappers," "broker kits," "road show slides" and "road show scripts") authorized in writing by or prepared by the Trust or the Adviser for use in connection with the offering and sale of the Shares (collectively, "sales material") complied and comply in all material respects with the applicable requirements of the 1933 Act, the 1940 Act, the Rules and Regulations and the rules and interpretations of the NASD and no such sales material contained or contains an untrue statement of a material fact or omitted or omits to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

(x) Each of the Trust Agreements complies in all material respects with all applicable provisions of the 1940 Act, the 1940 Act Rules and Regulations, the Advisers Act and the Advisers Act Rules and Regulations, except as to rights of indemnity and contribution.

(y) The Shares have been, or prior to the Closing Date will be, assigned a rating of 'aaa' by Moody's and 'AAA' by S&P.

(z) As required by Subchapter M of the Code, the Trust is currently in compliance with the requirements to qualify as a regulated investment company under the Code.

(aa) Except as disclosed in the Registration Statement and the Prospectus (or any amendment or supplement to either of them), no trustee of the Trust is an "interested person" (as defined in the 1940 Act) of the Trust or an "affiliated person" (as defined in the 1940 Act) of any Underwriter listed in Schedule I hereto.

7. REPRESENTATIONS AND WARRANTIES OF THE ADVISER. The Adviser represents and warrants to the Underwriters as follows:

(a) The Adviser is a corporation duly incorporated and validly existing in good standing under the laws of the State of Delaware, with full corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement and the Prospectus (and any amendment or supplement to either of them), and is duly registered and qualified to conduct its business and is in good standing in each jurisdiction or place where the nature of its properties or the conduct of its business requires such registration or qualification, except where the failure so to register or to qualify does not have a material adverse effect on the condition (financial or other), business, prospects, properties, net assets or results of operations of the Adviser or on the ability of the Adviser to perform its obligations under this Agreement and the Investment Management Agreement.

(b) The Adviser is duly registered with the Commission as an investment adviser under the Advisers Act and is not prohibited by the Advisers Act, the Advisers Act Rules and Regulations, the 1940 Act or the 1940 Act Rules and Regulations from acting under the Investment Management Agreement for the Trust as contemplated by the Prospectus (or any amendment or supplement thereto). There does not exist any proceeding or any facts or circumstances the existence of which could lead to any proceeding which might adversely affect the registration of the Adviser with the Commission.

(c) There are no legal or governmental proceedings pending or, to the knowledge of the Adviser, threatened against the Adviser, or to which the Adviser or any of its properties is subject, that are required to be described in the Registration Statement or the Prospectus (or any amendment or supplement to either of them) but are not described as required or that may reasonably be expected to involve a prospective material adverse change in the condition (financial or other), business, prospects, properties, net assets or results of operations of the Adviser or on the ability of the Adviser to perform its obligations under this Agreement and the Investment Management Agreement.

(d) Neither the execution, delivery or performance of this Agreement or the Investment Management Agreement by the Adviser, nor the consummation by the Adviser of the transactions contemplated hereby or thereby (A) requires the Adviser to obtain any consent,

approval, authorization or other order of or registration or filing with, the Commission, the NASD, any state securities commission, any national securities exchange, any arbitrator, any court, regulatory body, administrative agency or other governmental body, agency or official or conflicts or will conflict with or constitutes or will constitute a breach of or a default under, the certificate of incorporation or by-laws, or other organizational documents, of the Adviser or (B) conflicts or will conflict with or constitutes or will constitute a breach of or a default under, any agreement, indenture, lease or other instrument to which the Adviser is a party or by which it or any of its properties may be bound, or violates or will violate any statute, law, regulation or filing or judgment, injunction, order or decree applicable to the Adviser or any of its properties or will result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Adviser pursuant to the terms of any agreement or instrument to which it is a party or by which it may be bound or to which any of the property or assets of the Adviser is subject. The Adviser is not subject to any order of any court or of any arbitrator, governmental authority or administrative agency.

(e) The execution and delivery of, and the performance by the Adviser of its obligations under, this Agreement and the Investment Management Agreement have been duly and validly authorized by the Adviser, and this Agreement and the Investment Management Agreement have been duly executed and delivered by the Adviser and each constitutes the valid and legally binding agreement of the Adviser, enforceable against the Adviser in accordance with its terms except as rights to indemnity and contribution hereunder may be limited by federal or state securities laws or principles of public policy and subject to the qualification that the enforceability of the Trust's obligations thereunder may be limited by bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium and other laws relating to or affecting creditors' rights generally and by general equitable principles.

(f) The Adviser has the financial resources available to it necessary for the performance of its services and obligations as contemplated in the Prospectus (or any amendment or supplement thereto) and under this Agreement and the Investment Management Agreement.

(g) The description of the Adviser in the Registration Statement and the Prospectus (and any amendment or supplement thereto) complied and comply in all material respects with the provisions of the 1933 Act, the 1940 Act, the Advisers Act, the Rules and Regulations and the Advisers Act Rules and Regulations and did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of the Prospectus, in light of the circumstances under which they were made) not misleading.

(h) Except as disclosed in the Registration Statement and the Prospectus (or any amendment or supplement to either of them), subsequent to the respective dates as of which such information is given in the Registration Statement and the Prospectus (or any amendment or supplement to either of them), the Adviser has not incurred any liability or obligation, direct or contingent, or entered into any transaction, not in the ordinary course of business, that is material to the Adviser or the Trust and that is required to be disclosed in the Registration Statement or the Prospectus and there has not been any material adverse change, or any development

involving or which may reasonably be expected to involve, a prospective material adverse change, in the condition (financial or other), business, prospects, properties, net assets or results of operations of the Adviser, whether or not arising in the ordinary course of business, or which, in each case, could have a material adverse effect on the ability of the Adviser to perform its obligations under this Agreement and the Investment Management Agreement.

(i) The Adviser has such permits, licenses, franchises and authorizations of governmental or regulatory authorities ("permits") as are necessary to own its properties and to conduct its business in the manner described in the Prospectus (and any amendment or supplement thereto); the Adviser has fulfilled and performed all its material obligations with respect to such permits and no event has occurred which allows, or after notice or lapse of time would allow, revocation or termination thereof or results in any other material impairment of the rights of the Adviser under any such permit; and, except as described in the Prospectus (and any amendment or supplement thereto), none of such permits contains any restriction that is materially burdensome to the Adviser.

(j) Except as stated in this Agreement and in the Prospectus (and in any amendment or supplement thereto), the Adviser has not taken, nor will it take, directly or indirectly, any action designed to or which might reasonably be expected to cause or result in, stabilization or manipulation of the price of any securities issued by the Trust to facilitate the sale or resale of the Shares, and the Adviser is not aware of any such action taken or to be taken by any affiliates of the Adviser.

8. INDEMNIFICATION AND CONTRIBUTION.

(a) The Trust and the Adviser, jointly and severally, agree to indemnify and hold harmless each of the Underwriters and each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act from and against any and all losses, claims, damages, liabilities and expenses (including reasonable costs of investigation), joint or several, arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in any Prepricing Prospectus or in the Registration Statement or the Prospectus or in any amendment or supplement thereto, or arising out of or based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of the Prospectus, in light of the circumstances under which they were made) not misleading, except insofar as such losses, claims, damages, liabilities or expenses arise out of or are based upon any untrue statement or omission or alleged untrue statement or omission which has been made therein or omitted therefrom in reliance upon and in conformity with the information relating to any Underwriter furnished in writing to the Trust by or on behalf of any Underwriter through you expressly for use in connection therewith; provided, however, that the indemnification contained in this paragraph (a) with respect to any Prepricing Prospectus shall not inure to the benefit of any Underwriter (or to the benefit of any person controlling such Underwriter) on account of any such loss, claim, damage, liability or expense arising from the sale of the Shares by such Underwriter to any person if a copy of the Prospectus shall not have been delivered or sent to such person within the time required by the 1933 Act and the 1933 Act Rules and Regulations, and the untrue statement or alleged untrue statement or omission or alleged omission of a

material fact contained in such Prepricing Prospectus was corrected in the Prospectus, provided that the Trust has delivered the Prospectus to the several Underwriters in requisite quantity on a timely basis to permit such delivery or sending. The foregoing indemnity agreement shall be in addition to any liability which the Trust or the Adviser may otherwise have.

(b) If any action, suit or proceeding shall be brought against any Underwriter or any person controlling any Underwriter in respect of which indemnity may be sought against the Trust or the Adviser, such Underwriter or such controlling person shall promptly notify the Trust or the Adviser, and the Trust or the Adviser shall assume the defense thereof, including the employment of counsel and payment of all fees and expenses. Such Underwriter or any such controlling person shall have the right to employ separate counsel in any such action, suit or proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Underwriter or such controlling person unless (i) the Trust or the Adviser has agreed in writing to pay such fees and expenses, (ii) the Trust and the Adviser have failed to assume the defense and employ counsel, or (iii) the named parties to any such action, suit or proceeding (including any impleaded parties) include both such Underwriter or such controlling person and the Trust or the Adviser and such Underwriter or such controlling person shall have been advised by its counsel that representation of such indemnified party and the Trust or the Adviser by the same counsel would be inappropriate under applicable standards of professional conduct (whether or not such representation by the same counsel has been proposed) due to actual or potential differing interests between them (in which case the Trust and the Adviser shall not have the right to assume the defense of such action, suit or proceeding on behalf of such Underwriter or such controlling person). It is understood, however, that the Trust and the Adviser shall, in connection with any one such action, suit or proceeding or separate but substantially similar or related actions, suits or proceedings in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of only one separate firm of attorneys (in addition to any local counsel) at any time for all such Underwriters and controlling persons not having actual or potential differing interests with you or among themselves, which firm shall be designated in writing by the Underwriters, and that all such fees and expenses shall be reimbursed as they are incurred. The Trust and the Adviser shall not be liable for any settlement of any such action, suit or proceeding effected without their written consent, but if settled with such written consent, or if there be a final judgment for the plaintiff in any such action, suit or proceeding, the Trust and the Adviser agree to indemnify and hold harmless any Underwriter, to the extent provided in the preceding paragraph, and any such controlling person from and against any loss, claim, damage, liability or expense by reason of such settlement or judgment.

(c) Each Underwriter agrees to indemnify and hold harmless the Trust and the Adviser, their trustees, directors, any officers who sign the Registration Statement, and any person who controls the Trust or the Adviser within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, to the same extent as the foregoing indemnity from the Trust and the Adviser to each Underwriter, but only with respect to information relating to such Underwriter furnished in writing by or on behalf of such Underwriter expressly for use in the Registration Statement, the Prospectus or any Prepricing Prospectus, or any amendment or supplement thereto. If any action, suit or proceeding shall be brought against the Trust or the Adviser, any of their trustees or directors, any such officer, or any such controlling person based

on the Registration Statement, the Prospectus or any Prepricing Prospectus, or any amendment or supplement thereto, and in respect of which indemnity may be sought against any Underwriter pursuant to this paragraph (c), such Underwriter shall have the rights and duties given to the Trust and the Adviser by paragraph
(b) above (except that if the Trust or the Adviser shall have assumed the defense thereof such Underwriter shall not be required to do so, but may employ separate counsel therein and participate in the defense thereof, but the fees and expenses of such counsel shall be at such Underwriter's expense), and the Trust and the Adviser, their trustees or directors, any such officer, and any such controlling person shall have the rights and duties given to the Underwriters by paragraph (b) above. The foregoing indemnity agreement shall be in addition to any liability which the Underwriters may otherwise have.

(d) If the indemnification provided for in this Section 8 is unavailable to an indemnified party under paragraphs (a) or (c) hereof in respect of any losses, claims, damages, liabilities or expenses referred to therein, then an indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or expenses (i) in such proportion as is appropriate to reflect the relative benefits received by the Trust and the Adviser on the one hand (treated jointly for this purpose as one person) and the Underwriters on the other hand from the offering of the Shares, or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Trust and the Adviser on the one hand (treated jointly for this purpose as one person) and the Underwriters on the other in connection with the statements or omissions that resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative benefits received by the Trust and the Adviser on the one hand (treated jointly for this purpose as one person) and the Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Trust bear to the total underwriting discounts and commissions received by the Underwriters, in each case as set forth in the table on the cover page of the Prospectus. The relative fault of the Trust and the Adviser on the one hand (treated jointly for this purpose as one person) and the Underwriters on the other hand shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Trust and the Adviser on the one hand (treated jointly for this purpose as one person) or by the Underwriters on the other hand and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

(e) The Trust, the Adviser and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 8 were determined by a pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in paragraph
(d) above. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities and expenses referred to in paragraph (d) above shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating any claim or defending any such action, suit or proceeding. Notwithstanding the provisions of this Section 8, no Underwriter shall be required to contribute any amount in excess of the amount by which the

total price of the Shares underwritten by it and distributed to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters' obligations to contribute pursuant to this Section 8 are several in proportion to the respective numbers of Shares set forth opposite their names in Schedule I hereto (or such numbers of Shares increased as set forth in
Section 11 hereof) and not joint.

(f) No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened action, suit or proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such action, suit or proceeding.

(g) Any losses, claims, damages, liabilities or expenses for which an indemnified party is entitled to indemnification or contribution under this
Section 8 shall be paid by the indemnifying party to the indemnified party as such losses, claims, damages, liabilities or expenses are incurred. The indemnity and contribution agreements contained in this Section 8 and the representations and warranties of the Trust and the Adviser set forth in this Agreement shall remain operative and in full force and effect, regardless of (i) any investigation made by or on behalf of any Underwriter or any person controlling any Underwriter, the Trust, the Adviser, their trustees, directors or officers, or any person controlling the Trust or the Adviser, (ii) acceptance of any Shares and payment therefor hereunder, and (iii) any termination of this Agreement. A successor to any Underwriter or any person controlling any Underwriter, or to the Trust, the Adviser, their trustees, directors or officers, or any person controlling the Trust or the Adviser, shall be entitled to the benefits of the indemnity, contribution, and reimbursement agreements contained in this Section 8.

9. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several obligations of the Underwriters to purchase the Shares hereunder are subject to the following conditions:

(a) If, at the time this Agreement is executed and delivered, it is necessary for the registration statement or a post-effective amendment thereto to be declared effective before the offering of the Shares may commence, the registration statement or such post-effective amendment shall have become effective not later than 5:30 P.M., New York City time, on the date hereof, or at such later date and time as shall be consented to in writing by the Underwriters, and all filings, if any, required by Rules 497 and 430A under the 1933 Act and the 1933 Act Rules and Regulations shall have been timely made; no stop order suspending the effectiveness of the Registration Statement or order pursuant to Section 8(e) of the 1940 Act shall have been issued and no proceeding for those purposes shall have been instituted or, to the knowledge of the Trust, the Adviser or any Underwriter, threatened by the Commission, and any request of the Commission for additional information (to be included in the registration statement or the prospectus or otherwise) shall have been complied with to the Underwriters' satisfaction.

(b) Subsequent to the effective date of this Agreement, there shall not have occurred (i) any change or any development involving a prospective change in or affecting the condition (financial or other), business, prospects, properties, net assets, or results of operations of the Trust or the Adviser not contemplated by the Prospectus, which in the Underwriters' opinion would materially, adversely affect the market for the Shares, or (ii) any event or development relating to or involving the Trust or the Adviser or any officer, trustee or director of the Trust or the Adviser which makes any statement made in the Prospectus untrue or which, in the opinion of the Trust and its counsel or the Underwriters and their counsel, requires the making of any addition to or change in the Prospectus in order to state a material fact required by the 1933 Act, the 1940 Act or the Rules and Regulations or any other law to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, if amending or supplementing the Prospectus to reflect such event or development would, in the Underwriters' opinion, materially adversely affect the market for the Shares.

(c) The Trust shall have furnished to you a report showing compliance with the asset coverage requirements of the 1940 Act and a Preferred Shares Basic Maintenance Certificate (as defined in the Certificate), each dated the Closing Date and in form and substance satisfactory to you. Each such report may use portfolio holdings and valuations as of the close of business of any day not more than six business days preceding the Closing Date, provided, however, that the Trust represents in such report that its total net assets as of the Closing Date have not declined by 5% or more from such valuation date.

(d) The Underwriters shall have received on the Closing Date an opinion of Dechert, counsel for the Trust, dated the Closing Date and addressed to you, in form and substance satisfactory to you and to the effect that:

(i) The Trust (A) is a business trust duly formed by virtue of the execution and delivery of the Agreement and Declaration of Trust on December 2, 1987 and is validly existing under the laws of the State of Massachusetts with full business trust power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement and the Prospectus (and any amendment or supplement to either of them), and (B) is duly registered and qualified to conduct its business and is in good standing in the State of Arizona;

(ii) The Trust has no subsidiaries;

(iii) The authorized and outstanding capital stock of the Trust is as set forth under the caption "Capitalization" in the Prospectus; and the authorized capital stock of the Trust conforms in all material respects as to legal matters to the description thereof contained in the Prospectus under the caption "Description of Capital Structure";

(iv) All the shares of beneficial interest of the Trust outstanding prior to the issuance of the Shares have been duly authorized and validly issued by the Trust, and are fully paid and nonassessable;

(v) The Shares have been duly authorized and, when issued and delivered to the Underwriters against payment therefor in accordance with the terms hereof, will be validly issued by the Trust, fully paid and nonassessable and free of any preemptive, or to the best knowledge of such counsel after reasonable inquiry, similar rights that entitle or will entitle any person to acquire any Shares upon the issuance thereof by the Trust, and will conform to the description thereof contained in the Prospectus under the caption "Description of Preferred Shares";

(vi) The form of certificates for the Shares conforms to the requirements of Massachusetts law;

(vii) The Registration Statement and all post-effective amendments, if any, have become effective under the 1933 Act and the 1933 Act Rules and Regulations and, to the best knowledge of such counsel after reasonable inquiry, no stop order suspending the effectiveness of the Registration Statement or order pursuant to
Section 8(e) of the 1940 Act has been issued and no proceedings for that purpose are pending before or contemplated by the Commission; and any required filing of the Prospectus pursuant to Rule 497 of the 1933 Act Rules and Regulations has been made in accordance with Rule 497;

(viii) The Trust has business trust power and authority to enter into this Agreement and each of the Trust Agreements and to issue, sell and deliver the Shares to the Underwriters as provided herein, and this Agreement and each of the Trust Agreements have been duly authorized, executed and delivered by the Trust and each is a valid, legal and binding agreement of the Trust, enforceable against the Trust in accordance with its terms, except as enforcement of rights to indemnity and contribution hereunder may be limited by Federal or state securities laws or principles of public policy and subject to the qualification that the enforceability of the Trust's obligations hereunder may be limited by bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium and other laws relating to or affecting creditors' rights generally and by general equitable principles;

(ix) (A) The Trust is not in violation of the Declaration, including the Certificate, or Bylaws, or other organizational documents, and (B) based upon a certificate executed by officers of the Trust delivered to us, is not in default in the performance of any material obligation, agreement or condition contained in any bond, debenture, note or other evidence of indebtedness, except as may be disclosed in the Prospectus;

(x) Neither the offer, sale or delivery of the Shares, the execution, delivery or performance of this Agreement and in the Trust Agreements by the Trust, compliance by the Trust with the provisions hereof or thereof nor consummation by the Trust of the transactions contemplated hereby and the Trust Agreements constitutes or will constitute a breach of, or a default under, the

Declaration, including the Certificate, or Bylaws, or other organizational documents, of the Trust or any agreement, indenture, lease or other instrument to which the Trust is a party or by which it or any of its properties is bound that is an exhibit to the Registration Statement, nor will any such action result in any violation of any existing law, regulation, ruling (assuming compliance with all applicable state securities or blue sky laws), judgment, injunction, order or decree known to such counsel after reasonable inquiry, applicable to the Trust or any of its properties;

(xi) No consent, approval, authorization or other order of, or registration or filing with, the Commission, the NASD, any national securities exchange, or, to counsel's knowledge, any state securities commission, any arbitrator, any court, regulatory body, administrative agency or other governmental body, agency, or official is required on the part of the Trust (except such as may have been obtained prior to the date hereof and such as may be required for compliance with the state securities or blue sky laws of various jurisdictions) for the valid issuance and sale of the Shares to the Underwriters as contemplated by this Agreement, the execution, delivery and performance by the Trust of this Agreement and the Trust Agreements or the consummation of the transactions contemplated hereby and thereby;

(xii) The 1940 Act Notification, the Registration Statement, the Prospectus and any supplements or amendments thereto (except for the financial statements and the notes thereto and the schedules and other financial and statistical data included therein, as to which such counsel need not express any opinion) comply as to form in all material respects with the requirements of the 1933 Act, the 1940 Act and the Rules and Regulations;

(xiii) Based upon a certificate executed by officers of the Trust delivered to us, (A) other than as described or contemplated in the Registration Statement or Prospectus (or any amendment or supplement thereto), there are no legal or governmental proceedings pending or threatened against the Trust, or to which the Trust or any of its properties is subject, which are required to be described in the Registration Statement or Prospectus (or any amendment or supplement to either of them) and (B) there are no agreements, contracts, indentures, leases or other instruments that are required to be described in the Registration Statement or the Prospectus (or any amendment or supplement thereto) or to be filed as an exhibit to the Registration Statement that are not described or filed as required, as the case may be;

(xiv) The statements in the Registration Statement and Prospectus, insofar as they (A) are descriptions of contracts, agreements or other legal documents, or (B) refer to statements of law or legal conclusions, are accurate and present fairly the information required to be shown;

(xv) Each of the Trust Agreements complies in all material respects with all applicable provisions of the 1933 Act, the 1940 Act, the Advisers Act, the Rules and Regulations and the Advisers Act Rules and Regulations, except as to rights of indemnity and contribution;

(xvi) The Trust is duly registered with the Commission under the 1940 Act and the 1940 Act Rules and Regulations as a closed-end, diversified management investment company and, to such counsel's best knowledge after reasonable inquiry, no order of suspension or revocation of such registration under the 1940 Act and the 1940 Act Rules and Regulations has been issued or proceedings therefor initiated or threatened by the Commission; the provisions of the Declaration, including the Certificate, and Bylaws comply as to form in all material respects with the applicable provisions of the 1940 Act and the 1940 Act Rules and Regulations, the provisions of the Declaration, including the Certificate, and Bylaws and the investment policies and restrictions described in the Registration Statement and the Prospectus under the captions "Investment Objective and Policies", "Risk Factors", "Additional Information About Investments and Investment Techniques" and "Investment Restrictions" (in the Prospectus and the statement of additional information) comply in all material respects with the requirements of the 1940 Act, and all action has been taken by the Trust as is required of the Trust by the 1933 Act and the 1940 Act and the Rules and Regulations in connection with the issuance and sale of the Shares to make the public offering and consummate the sale of the Shares as contemplated by this Agreement;

(xvii) Except as described in the Prospectus, there are no outstanding options, warrants or other rights calling for the issuance of, and such counsel does not know of any commitment, plan or arrangement to issue, any shares of beneficial interest of the Trust or any security convertible into or exchangeable or exercisable for shares of beneficial interest of the Trust;

(xviii) Except as described in the Prospectus, such counsel does not know of any holder of any security of the Trust or any other person who has the right, contractual or otherwise, to cause the Trust to sell or otherwise issue to them, or to permit them to underwrite the sale of, the Shares or the right to have any securities of the Trust included in the registration statement or the right, as a result of the filing of the registration statement, to require registration under the 1933 Act of any securities of the Trust;

(xix) If the Trust operates as described in the Prospectus, the Trust will qualify as a regulated investment company under the Code; and

(xx) Such counsel shall also state that, while they have not themselves checked the accuracy and completeness of or otherwise verified, and are not passing upon and assume no responsibility for the accuracy or completeness of, the statements contained in the Registration Statement or the Prospectus, except to

the limited extent stated in paragraphs (iii), (xiv) and (xvi) above, in the course of their review and discussion of the contents of the Registration Statement and Prospectus with certain officers and employees of the Trust and its independent accountants, no facts have come to their attention which cause them to believe that the Registration Statement or any amendment or supplement thereto (except as to any financial statements or other financial data included in the Registration Statement or any such amendment or supplement, as to which they express no belief), as of its effective date, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements contained therein not misleading or that the Prospectus or any amendment or supplement thereto (except as to any financial statements or other financial data included in the Prospectus or any such amendment or supplement, as to which they express no belief), as of its issue date and as of the Closing Date, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements contained therein, in the light of the circumstances under which they were made, not misleading.

Such counsel may state in its opinion letter that "[O]ur opinion is limited solely to those laws, rulings and regulations that are normally applicable to transactions of the type contemplated by the Underwriting Agreement by closed-end management investment companies registered under the 1940 Act, and to Massachusetts law with respect to the matters covered by paragraphs (i)(A), (iii), (iv), (v), (vi) and (viii). Moreover, the opinions given under paragraphs (ix)(B) and
(xiii) are based solely upon the receipt of a certificate signed by officers of the Trust attesting to the statements made therein."

(e) The Underwriters shall have received on the Closing Date an opinion of Bryan Cave LLP, counsel for the Adviser, dated the Closing Date and addressed to you, in form and substance satisfactory to you and to the effect that:

(i) The Adviser is a corporation duly incorporated and validly existing in good standing under the laws of the State of Delaware with full corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement and the Prospectus (and any amendment or supplement to either of them), and is duly registered and qualified to conduct its business and is in good standing in each of the following jurisdictions: Arizona and California;

(ii) The Adviser is duly registered with the Commission as an investment adviser under the Advisers Act and is not prohibited by the Advisers Act, the Advisers Act Rules and Regulations, the 1940 Act or the 1940 Act Rules and Regulations from acting under the Investment Management Agreement for the Trust as contemplated by the Prospectus (or any amendment or supplement thereto); and, to such counsel's knowledge, no order of suspension or revocation of such registration under the Advisers Act and the Advisers Act Rules and

Regulations has been issued or proceedings therefor initiated or threatened by the Commission;

(iii) The Adviser has corporate power and authority to enter into this Agreement and the Investment Management Agreement, and this Agreement and the Investment Management Agreement have been duly authorized, executed and delivered by the Adviser and each is a valid, legal and binding agreement of the Adviser, enforceable against the Adviser in accordance with its terms except as enforcement of rights to indemnity and contribution hereunder may be limited by Federal or state securities laws or principles of public policy and subject to the qualification that the enforceability of the Adviser's obligations hereunder may be limited by bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium, and other laws relating to or affecting creditors' rights generally and by general equitable principles;

(iv) Neither the execution, delivery or performance of this Agreement or the Investment Management Agreement by the Adviser, compliance by the Adviser with the provisions hereof or thereof nor consummation by the Adviser of the transactions contemplated hereby and by the Investment Management Agreement conflicts or will conflict with, or constitutes or will constitute a breach of or default under, the certificate of incorporation or bylaws, or other organizational documents, of the Adviser or any agreement, indenture, lease or other instrument to which the Adviser is a party or by which it or any of its properties is bound that is known to such counsel, or will result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Adviser, nor will any such action result in any violation of any existing law, regulation, ruling, judgment, injunction, order or decree known to such counsel after reasonable inquiry, applicable to the Adviser or any of its properties;

(v) No consent, approval, authorization or other order of, or registration or filing with, the Commission, the NASD, any state securities commission, any national securities exchange, any arbitrator, any court, regulatory body, administrative agency or other governmental body, agency, or official is required on the part of the Adviser for the execution, delivery and performance by it of this Agreement and the Investment Management Agreement or the consummation by it of the transactions contemplated hereby and thereby;

(vi) To the best knowledge of such counsel after reasonable inquiry, there are no legal or governmental proceedings pending or threatened against the Adviser or to which the Adviser or any of its properties is subject, which are required to be described in the Registration Statement or the Prospectus (or any amendment or supplement to either of them) but are not described as required or which may reasonably be expected to involve a prospective material adverse change on the ability of the Adviser to perform its obligations under this Agreement and the Investment Management Agreement;

(vii) The obligations of the Adviser under this Agreement and the Investment Management Agreement comply in all material respects with all applicable provisions of the 1940 Act, the 1940 Act Rules and Regulations, the Advisers Act and the Advisers Act Rules and Regulations, except as to rights of indemnity and contribution; and

(viii) Such counsel shall also state that, while they have not checked or verified the accuracy and completeness of, and are not passing upon and assume no responsibility for the accuracy and completeness of, any statements in the Registration Statement or the Prospectus, no facts have come to their attention in the course of their representation of the Adviser which cause them to believe that the description of the Adviser contained in the Registration Statement (and any amendment or supplement thereto), as of its effective date, contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements contained therein not misleading or that the description of the Adviser contained in the Prospectus or any amendment or supplement thereto, as of its issue date and as of the Closing Date, contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements contained therein, in the light of the circumstances under which they were made, not misleading.

(f) The Underwriters shall have received on the Closing Date an opinion of Simpson Thacher & Bartlett, counsel for the Underwriters, dated the Closing Date and addressed to you, with respect to such matters as you may reasonably request. It is agreed that Simpson Thacher & Bartlett may rely on the opinions of Dechert contained in Sections 9(d)(i)(A), 9(d)(v), 9(d)(viii) and 9(d)(xiv)(B) of this Agreement to the extent those opinions relate to or are dependent upon matters governed by the laws of the State of Massachusetts.

(g) The Underwriters shall have received letters addressed to you, dated the date hereof and the Closing Date, from KPMG LLP, independent certified public accountants, substantially in the forms heretofore approved by you.

(h) (i) No order suspending the effectiveness of the registration statement or the Registration Statement or prohibiting or suspending the use of the Prospectus (or any amendment or supplement thereto) or any Prepricing Prospectus or any sales material shall have been issued and no proceedings for such purpose or for the purpose of commencing an enforcement action against the Trust, the Adviser or, with respect to the transactions contemplated by the Prospectus (or any amendment or supplement thereto) and this Agreement, the Underwriters, may be pending before or, to the knowledge of the Trust, the Adviser or the Underwriters or in the reasonable view of counsel to the Underwriters, shall be threatened or contemplated by the Commission at or prior to the Closing Date and that any request for additional information on the part of the Commission (to be included in the Registration Statement, the Prospectus or otherwise) be complied with to the satisfaction of the Underwriters; (ii) there shall not have been any change in the capital stock of the Trust nor any material increase in the short-term or long-term debt of the Trust (other than in the ordinary course of business) from that set forth or contemplated in the Registration Statement or the Prospectus (or any amendment or supplement

thereto); (iii) there shall not have been, subsequent to the respective dates as of which information is given in the Registration Statement and the Prospectus (or any amendment or supplement thereto), except as may otherwise be stated in the Registration Statement and Prospectus (or any amendment or supplement thereto), any material adverse change in the condition (financial or other), business, prospects, properties, net assets or results of operations of the Trust or the Adviser; (iv) the Trust shall not have any liabilities or obligations, direct or contingent (whether or not in the ordinary course of business), that are material to the Trust, other than those reflected in the Registration Statement or the Prospectus (or any amendment or supplement to either of them); and (v) all the representations and warranties of the Trust and the Adviser contained in this Agreement shall be true and correct on and as of the date hereof and on and as of the Closing Date as if made on and as of the Closing Date, and the Underwriters shall have received a certificate of the Trust and the Adviser, dated the Closing Date and signed by the chief executive officer and the chief financial officer of each of the Trust and the Adviser (or such other officers as are acceptable to the Underwriters), to the effect set forth in this Section 9(h) and in Section 9(i) hereof.

(i) That neither the Trust nor the Adviser shall have failed at or prior to the Closing Date to have performed or complied in all material respects with any of its agreements herein contained and required to be performed or complied with by it hereunder at or prior to the Closing Date.

(j) The Trust shall have delivered and the Underwriters shall have received evidence satisfactory to the Underwriters that each series of Shares are rated 'aaa' by Moody's and 'AAA' by S&P as of the Closing Date, and there shall not have been given any notice of any intended or potential downgrading, or of any review for a potential downgrading, in the rating accorded to the shares of each series of the Shares by either Rating Agency.

(k) The Trust and the Adviser shall have furnished or caused to be furnished to you such further certificates and documents as you shall have reasonably requested.

All such opinions, certificates, letters and other documents will be in compliance with the provisions hereof only if they are satisfactory in form and substance to the Underwriters and the Underwriters' counsel.

Any certificate or document signed by any officer of the Trust or the Adviser and delivered to the Underwriters, or to counsel for the Underwriters, shall be deemed a representation and warranty by the Trust or the Adviser to the Underwriters as to the statements made therein.

10. EXPENSES. The Trust agrees to pay the following costs and expenses and all other costs and expenses incident to the performance by it of its obligations hereunder: (i) the preparation, printing or reproduction, and filing with the Commission of the registration statement (including financial statements and exhibits thereto), each Prepricing Prospectus, the Prospectus and each amendment or supplement to any of them (including, without limitation, the filing fees prescribed by the 1933 Act, the 1940 Act and the Rules and Regulations); (ii) the printing (or reproduction) and delivery (including postage, air freight charges and charges for counting and packaging) of such copies of the Registration Statement, each Prepricing Prospectus, the Prospectus, any sales material and all amendments or supplements to any of them as may be reasonably requested for use in connection with the offering and sale of the Shares; (iii) the preparation, printing, authentication, issuance and delivery of certificates for the Shares, including any stamp taxes in connection with the original issuance and sale of the Shares; (iv) the reproduction and delivery of this Agreement, any dealer agreements, the preliminary blue sky memorandum and all other agreements or documents reproduced and delivered in connection with the offering of the Shares; (v) the reasonable fees, expenses and disbursements of counsel for the Underwriters relating to the preparation, reproduction, and delivery of the preliminary blue sky memorandum; (vi) fees paid to the Rating Agencies; (vii) the transportation and other expenses incurred by or on behalf of Trust representatives in connection with presentations to prospective purchasers of the Shares; and (viii) the fees and expenses of the Trust's accountants and the fees and expenses of counsel (including local and special counsel) for the Trust and of the transfer agent.

11. EFFECTIVE DATE OF AGREEMENT. This Agreement shall become effective: (i) upon the execution and delivery hereof by the parties hereto; or
(ii) if, at the time this Agreement is executed and delivered, it is necessary for the registration statement or a post-effective amendment thereto to be declared effective before the offering of the Shares may commence, when notification of the effectiveness of the registration statement or such post-effective amendment has been released by the Commission. Until such time as this Agreement shall have become effective, it may be terminated by the Trust, by notifying the Underwriters, or by the Underwriters, by notifying the Trust.

If any one or more of the Underwriters shall fail or refuse to purchase Shares which it or they are obligated to purchase hereunder on the Closing Date, and the aggregate number of Shares which such defaulting Underwriter or Underwriters are obligated but fail or refuse to purchase is not more than one-tenth of the aggregate number of Shares which the Underwriters are obligated to purchase on the Closing Date, each non-defaulting Underwriter shall be obligated, severally, in the proportion which the number of Shares set forth opposite its name in Schedule I hereto bears to the aggregate number of Shares set forth opposite the names of all non-defaulting Underwriters or in such other proportion as you may specify, to purchase the Shares which such defaulting Underwriter or Underwriters are obligated, but fail or refuse, to purchase. If any one or more of the Underwriters shall fail or refuse to purchase Shares which it or they are obligated to purchase on the Closing Date and the aggregate number of Shares with respect to which such default occurs is more than one-tenth of the aggregate number of Shares which the Underwriters are obligated to purchase on the Closing Date and arrangements satisfactory to you and the Trust for the purchase of such Shares by one or more non-defaulting Underwriters or other party or parties approved by you and the Trust are not made within 36

hours after such default, this Agreement will terminate without liability on the part of any non-defaulting Underwriter, the Trust or the Adviser. In any such case which does not result in termination of this Agreement, either you or the Trust shall have the right to postpone the Closing Date, but in no event for longer than seven days, in order that the required changes, if any, in the Registration Statement and the Prospectus or any other documents or arrangements may be effected. Any action taken under this paragraph shall not relieve any defaulting Underwriter from liability in respect of any such default of any such Underwriter under this Agreement. The term "Underwriter" as used in this Agreement includes, for all purposes of this Agreement, any party not listed in Schedule I hereto who, with your approval and the approval of the Trust, purchases Shares which a defaulting Underwriter is obligated, but fails or refuses, to purchase.

Any notice under this Section 11 may be given by telegram, telecopy or telephone but shall be subsequently confirmed by letter.

12. TERMINATION OF AGREEMENT. This Agreement shall be subject to termination in the Underwriters' absolute discretion, without liability on the part of any Underwriter to the Trust or the Adviser, by notice to the Trust or the Adviser, if prior to the Closing Date (i) trading in the Shares or the Trust's common shares of beneficial interest or securities generally on the NYSE shall have been suspended or materially limited or minimum prices shall have been established on the NYSE, (ii) a general moratorium on commercial banking activities in New York shall have been declared by either federal or state authorities, or (iii) there shall have occurred any outbreak or escalation of hostilities, declaration by the United States of a national emergency or war, or other international or domestic calamity, crisis or change in political, financial or economic conditions, the effect of which on the financial markets of the United States is to make it, in your judgment, impracticable or inadvisable to commence or continue the offering of the Shares at the offering price to the public set forth on the cover page of the Prospectus or to enforce contracts for the resale of the Shares by the Underwriters. Notice of such termination may be given to the Trust by telegram, telecopy or telephone and shall be subsequently confirmed by letter.

13. INFORMATION FURNISHED BY THE UNDERWRITERS. The statements set forth in the last paragraph on the cover page and the statements in the third and fifth paragraphs under the caption "Underwriting" in any Prepricing Prospectus and in the Prospectus, constitute the only information furnished by or on behalf of the Underwriters through you as such information is referred to in Sections 6(b) and 8 hereof.

14. MISCELLANEOUS. Except as otherwise provided in Sections 5, 11 and 12 hereof, notice given pursuant to any provision of this Agreement shall be in writing and shall be delivered (i) if to the Trust or the Adviser, at the office of the Trust at 7337 E. Doubletree Ranch Rd., Scottsdale, Arizona 85258-2034, Attention: Daniel A. Norman, Senior Vice President; or (ii) if to the Underwriters, to Salomon Smith Barney Inc., 388 Greenwich Street, New York, New York 10013, Attention: Manager, Investment Banking Division.

This Agreement has been and is made solely for the benefit of the Underwriters, the Trust, the Adviser, their trustees, directors and officers, and the other controlling persons

referred to in Section 8 hereof and their respective successors and assigns, to the extent provided herein, and no other person shall acquire or have any right under or by virtue of this Agreement. Neither the term "successor" nor the term "successors and assigns" as used in this Agreement shall include a purchaser from the Underwriters of any of the Shares in his status as such purchaser.

Consistent with the Trust's Declaration, notice is hereby given and the parties hereto acknowledge and agree that this Agreement is executed on behalf of the trustees of the Trust as trustees and not individually and that obligations of this Agreement are not binding upon any of the trustees or shareholders of the Trust individually but are binding only against the assets and property of the Trust.

15. APPLICABLE LAW: COUNTERPARTS. This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

This Agreement may be signed in various counterparts, which together constitute one and the same instrument. If signed in counterparts, this Agreement shall not become effective unless at least one counterpart hereof shall have been executed and delivered on behalf of each party hereto.

Please confirm that the foregoing correctly sets forth the agreement among the Trust, the Adviser and the several Underwriters.

Very truly yours,

PILGRIM PRIME RATE TRUST

Title:

ING PILGRIM INVESTMENTS, INC.

Title:

Confirmed as of the date first above
mentioned on behalf of themselves
and the other several Underwriters
named in Schedule I hereto.

SALOMON SMITH BARNEY INC.
PAINEWEBBER INCORPORATED
LEHMAN BROTHERS INC.
GRUNTAL & CO., L.L.C.

By: SALOMON SMITH BARNEY INC.

By:   /s/ Robert F. Bush, Jr
      -----------------------------
      Name:   Robert F. Bush, Jr
      Title:  Director

Please confirm that the foregoing correctly sets forth the agreement among the Trust, the Adviser and the several Underwriters.

Very truly yours,

PILGRIM PRIME RATE TRUST

By:    /s/ Daniel A. Norman
      ----------------------------------
          Name:      DANIEL A. NORMAN
          Title:   SENIOR VICE PRESIDENT

ING PILGRIM INVESTMENTS, INC.

By:    /s/ Daniel A. Norman
      ----------------------------------
          Name:      DANIEL A. NORMAN
          Title:   SENIOR VICE PRESIDENT

Confirmed as of the date first above
mentioned on behalf of themselves
and the other several Underwriters
named in Schedule I hereto.

SALOMON SMITH BARNEY INC.
PAINEWEBBER INCORPORATED
LEHMAN BROTHERS INC.
GRUNTAL & CO., L.L.C.

By: SALOMON SMITH BARNEY INC.

                                         NUMBER OF
UNDERWRITER                              SHARES
-----------                              ---------
Salomon Smith Barney Inc.                2,160 Series M,
                                         2,160 Series W
                                         2,160 Series F

PaineWebber Incorporated                 1,080 Series M
                                         1,080 Series W
                                         1,080 Series F

Lehman Brothers Inc.                     180 Series M
                                         180 Series W
                                         180 Series F

                                         180 Series M
Gruntal & Co., L.L.C.                    180 Series W
                                         180 Series F

                                         --------------
Total                                    3,600 Series M
                                         3,600 Series W
                                         3,600 Series F

Exhibit 99.(j)(i)

CUSTODIAN AND INVESTMENT ACCOUNTING AGREEMENT

This Agreement is made effective the 1st day of November, 2001, by and between EACH OF THE FUNDS SET FORTH ON EXHIBIT A HERETO, each a business trust or corporation organized and existing under the laws of the jurisdiction listed on Exhibit A (each a "FUND"), and STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust company ("STATE STREET"),

WITNESSETH:

WHEREAS, Fund is authorized to issue shares in separate series, with each such series representing interests in a separate portfolio of securities and other assets; and

WHEREAS, Fund intends that this Agreement be applicable to each of its series existing on the date hereof (such series together with all other series subsequently established by Fund and made subject to this Agreement in accordance with Section 16.2, be referred to herein as the "PORTFOLIO(s)");

NOW THEREFORE, in consideration of the mutual covenants and agreements hereinafter contained, the parties hereto agree as follows:

SECTION 1 APPOINTMENT OF STATE STREET AS CUSTODIAN AND RECORDKEEPING AGENT. Fund hereby appoints State Street as the custodian of the assets of the Portfolios, including securities that Fund, on behalf of the applicable Portfolio, desires to be held in places within the United States ("DOMESTIC SECURITIES") and securities it desires to be held outside the United States ("FOREIGN SECURITIES"). Fund, on behalf of the Portfolio(s), agrees to deliver to State Street all securities and cash of the Portfolios, and all payments of income, payments of principal or capital distributions received by it with respect to all securities owned by the Portfolio(s) from time to time, and the cash consideration received by it for such new or treasury shares of beneficial interest of Fund representing interests in the Portfolios ("SHARES") as may be issued or sold from time to time. State Street shall not be responsible for any property of a Portfolio held or received by the Portfolio and not delivered to State Street.

Upon receipt of "PROPER INSTRUCTIONS" (as such term is defined in Section 6 hereof), State Street shall on behalf of the applicable Portfolio(s) from time to time appoint one or more sub-custodians located in the United States, but only in accordance with an applicable vote by the Board of Trustees or Directors of Fund (the "BOARD") on behalf of the applicable Portfolio(s). State Street may appoint as sub-custodian for Fund's foreign securities on behalf of the applicable Portfolio(s) the foreign banking institutions and foreign securities depositories designated in Schedules A and B hereto, but only in accordance with the applicable provisions of Sections 3 and 4. State Street shall have the same responsibility or liability to Fund on account of any actions or omissions of any sub-custodian so appointed that State Street would have if State Street had not retained such sub-custodian.

Fund hereby appoints State Street as agent to perform certain investment accounting and recordkeeping functions relating to portfolio transactions required of a duly registered investment company under Rule 31a of the Investment Company Act of 1940, as amended and the rules promulgated thereunder, including without limitation Rules 31a-1, 31a-2 and 31a-3 (the

"1940 ACT") and to calculate the net asset value of the Portfolio(s) in accordance with the provisions of Section 9 hereof.

SECTION 2 DUTIES OF STATE STREET WITH RESPECT TO PROPERTY OF FUND HELD BY STATE STREET IN THE UNITED STATES

SECTION 2.1 HOLDING SECURITIES. State Street shall hold and physically segregate for the account of each Portfolio all non-cash property to be held by it in the United States, including all domestic securities other than securities which are maintained pursuant to Section 2.8 in a clearing agency which acts as a securities depository or in a book-entry system authorized by the U.S. Department of the Treasury (each, a "U.S. SECURITIES SYSTEM").

SECTION 2.2 DELIVERY OF SECURITIES. State Street shall release and deliver domestic securities held by State Street or in a U.S. Securities System account of State Street only upon receipt of Proper Instructions on behalf of the applicable Portfolio, which may be continuing instructions when deemed appropriate by the parties, and only in the following cases:

1) Upon sale of such securities for the account of the Portfolio and receipt of payment therefor;

2) Upon the receipt of payment in connection with any repurchase agreement related to such securities entered into by the Portfolio;

3) In the case of a sale effected through a U.S. Securities System, in accordance with the provisions of Section 2.8 hereof;

4) To the depository agent in connection with tender or other similar offers for securities of the Portfolio;

5) To the issuer thereof or its agent when such securities are called, redeemed, retired or otherwise become payable; provided that, in any such case, the cash or other consideration is to be delivered to State Street;

6) To the issuer thereof, or its agent, for transfer into the name of the Portfolio or into the name of any nominee(s) of State Street or into the name or nominee name of any agent appointed pursuant to
Section 2.7 or into the name or nominee name of any sub-custodian appointed pursuant to Section 1; or for exchange for a different number of bonds, certificates or other evidence representing the same aggregate face amount or number of units; PROVIDED that, in any such case, the new securities are to be delivered to State Street;

7) Upon the sale of such securities for the account of the Portfolio, to the broker or its clearing agent, against a receipt, for examination in accordance with "street delivery" custom; provided that in any such case, State Street shall have no responsibility or liability for any loss arising from the delivery of such securities prior to receiving payment for such securities except as may arise from State Street's own negligence or willful misconduct;

8) For exchange or conversion pursuant to any corporate action, including without limitation, any calls for redemption, tender or exchange offers, declarations, record and payment dates and amounts of any dividends or income, plan of merger, consolidation, recapitalization, reorganization, readjustment, split-up of shares, changes of par value, or conversion ("CORPORATE ACTION") of the securities of the issuer of such securities, or pursuant to provisions for conversion contained in such securities, or pursuant to any deposit agreement; provided that, in any such case, the new securities and cash, if any, are to be delivered to State Street;

9) In the case of warrants, rights or similar securities, the surrender thereof in the exercise of such warrants, rights or similar securities or the surrender of interim receipts or temporary securities for definitive securities; provided that, in any such case, the new securities and cash, if any, are to be delivered to State Street;

10) For delivery in connection with any loans of securities made by the Portfolio, BUT ONLY against receipt of adequate collateral as agreed upon from time to time by State Street and Fund on behalf of the Portfolio, which may be in the form of cash or obligations issued by the United States government, its agencies or instrumentalities, except that in connection with any loans for which collateral is to be credited to State Street's account in the book-entry system authorized by the U.S. Department of the Treasury, State Street will not be held liable or responsible for the delivery of securities owned by the Portfolio prior to the receipt of such collateral;

11) For delivery as security in connection with any borrowing by Fund on behalf of the Portfolio requiring a pledge of assets by Fund, BUT ONLY against receipt of amounts borrowed;

12) For delivery in accordance with the provisions of any agreement among Fund on behalf of the Portfolio, State Street and a broker-dealer registered under the Securities Exchange Act of 1934 (the "EXCHANGE ACT") and a member of The National Association of Securities Dealers, Inc. ("NASD"), relating to compliance with the rules of The Options Clearing Corporation and of any registered national securities exchange, or of any similar organization or organizations, regarding escrow or other arrangements in connection with transactions by the Portfolio;

13) For delivery in accordance with the provisions of any agreement among Fund on behalf of the Portfolio, State Street, and a futures commission merchant registered under the Commodity Exchange Act, relating to compliance with the rules of the Commodity Futures Trading Commission ("CFTC") and/or any contract market, or any similar organization or organizations, regarding account deposits in connection with transactions by the Portfolio;

14) Upon receipt of instructions from the transfer agent for Fund (the "TRANSFER AGENT") for delivery to such Transfer Agent or to the holders of Shares in connection with distributions in kind, as may be described from time to time in the currently effective prospectus and statement of additional information related to the Portfolio (the "PROSPECTUS"), in satisfaction of requests by holders of Shares for repurchase or redemption; and

15) For any other purpose, BUT ONLY upon receipt of Proper Instructions on behalf of the applicable Portfolio specifying the securities to be delivered and naming the person or persons to whom delivery of such securities shall be made.

SECTION 2.3 REGISTRATION OF SECURITIES. Domestic securities (other than bearer securities) shall be registered in the name of the Portfolio or in the name of any nominee of Fund on behalf of the Portfolio or of State Street which nominee shall be assigned exclusively to the Portfolio, UNLESS Fund has authorized in writing the appointment of a nominee to be used in common with other registered investment companies having the same investment advisor as the Portfolio, or in the name or nominee name of any agent appointed pursuant to
Section 2.7 or in the name or nominee name of any sub-custodian appointed pursuant to Section 1. All securities accepted by State Street under the terms hereof shall be in "street name" or other good delivery form. If, however, Fund directs State Street to maintain securities in "street name", State Street shall continuously utilize its best efforts to timely collect income due Fund on such securities and to notify Fund on a best efforts basis only of relevant information regarding securities such as maturities and pendency of calls and Corporate Actions.

SECTION 2.4 BANK ACCOUNTS. State Street shall open and maintain a separate bank account or accounts in the United States in the name of each Portfolio, subject only to draft or order by State Street acting pursuant hereto, and shall hold in such account or accounts, subject to the provisions hereof, all cash received by it from or for the account of the Portfolio, other than cash maintained by the Portfolio in an account established and used in accordance with Rule 17f-3 under the 1940 Act. Funds held by State Street for a Portfolio may be deposited by it to its credit as custodian in the banking department of State Street or in such other banks or trust companies as it may in its discretion deem necessary or desirable; PROVIDED, however, that every such bank or trust company shall be qualified to act as a custodian under the 1940 Act and that each such bank or trust company and the funds to be deposited with each such bank or trust company shall on behalf of each applicable Portfolio be approved by vote of a majority of the Board. Such funds shall be deposited by State Street in its capacity as custodian and shall be withdrawable by State Street only in that capacity.

SECTION 2.5 COLLECTION OF INCOME. Subject to the provisions of Section 2.3, State Street shall collect on a timely basis all income and other payments with respect to registered domestic securities to which each Portfolio shall be entitled either by law or pursuant to custom in the securities business, and shall collect on a timely basis all income and other payments with respect to bearer domestic securities if, on the date of payment by the issuer, such securities are held by State Street or its agent thereof and shall credit such income, as collected, to such Portfolio's custodian account. Without limiting the generality of the foregoing, State Street shall detach and present for payment all coupons and other income items requiring presentation as and when they become due and shall collect interest when due on securities held hereunder. Income due each Portfolio on securities loaned pursuant to the provisions of Section 2.2 (10) shall be the responsibility of Fund. State Street will have no duty or responsibility in connection therewith, other than to provide Fund with such information or data as may be necessary to assist Fund in arranging for the timely delivery to State Street of the income to which the Portfolio is properly entitled.

SECTION 2.6 PAYMENT OF PORTFOLIO MONIES. Except to the extent that Section 4.4.2 applies, upon receipt of Proper Instructions on behalf of the applicable Portfolio, which may be

continuing instructions when deemed appropriate by the parties, State Street shall pay out monies of a Portfolio in the following cases only:

1) Upon the purchase of domestic securities, options, futures contracts or options on futures contracts for the account of the Portfolio but only (a) against the delivery of such securities or evidence of title to such options, futures contracts or options on futures contracts to State Street (or any bank, banking firm or trust company doing business in the United States or abroad which is qualified under the 1940 Act to act as a custodian and has been designated by State Street as its agent for this purpose) registered in the name of the Portfolio or in the name of a nominee of State Street referred to in Section 2.3 hereof or in proper form for transfer; (b) in the case of a purchase effected through a U.S. Securities System, in accordance with the conditions set forth in
Section 2.8 hereof; (c) in the case of repurchase agreements entered into between Fund on behalf of the Portfolio and State Street, or another bank, or a broker-dealer which is a member of NASD, (i) against delivery of the securities either in certificate form or through an entry crediting State Street's account at the Federal Reserve Bank with such securities or (ii) against delivery of the receipt evidencing purchase by the Portfolio of securities owned by State Street along with written evidence of the agreement by State Street to repurchase such securities from the Portfolio; or (d) for transfer to a time deposit account of Fund in any bank, whether domestic or foreign; such transfer may be effected prior to receipt of a confirmation from a broker and/or the applicable bank pursuant to Proper Instructions ;

2) In connection with conversion, exchange or surrender of securities owned by the Portfolio as set forth in Section 2.2 hereof;

3) For the redemption or repurchase of Shares issued as set forth in
Section 5 hereof;

4) For the payment of any expense or liability incurred by the Portfolio, including but not limited to the following payments for the account of the Portfolio: interest, taxes, management, accounting, transfer agent and legal fees, and operating expenses of Fund whether or not such expenses are to be in whole or part capitalized or treated as deferred expenses;

5) For the payment of any dividends on Shares declared pursuant to the Declaration of Trust, Articles of Incorporation, Bylaws or other governing documents of Fund (collectively, the "GOVERNING DOCUMENTS");

6) For payment of the amount of dividends received in respect of securities sold short; and

7) For any other purpose, BUT ONLY upon receipt of Proper Instructions on behalf of the Portfolio specifying the amount of such payment and naming the person or persons to whom such payment is to be made.

SECTION 2.7 APPOINTMENT OF AGENTS. State Street may at any time or times in its discretion appoint (and may at any time remove) any other bank or trust company which is itself qualified under the 1940 Act to act as a custodian, as its agent to carry out such of the provisions

of this Section 2 as State Street may from time to time direct; PROVIDED, however, that the appointment of any agent shall not relieve State Street of its responsibilities or liabilities hereunder.

SECTION 2.8 DEPOSIT OF FUND ASSETS IN U.S. SECURITIES SYSTEMS. State Street may deposit and/or maintain securities owned by a Portfolio in a U.S. Securities System subject to the following provisions:

1) State Street may keep securities of the Portfolio in a U.S. Securities System provided that such securities are represented in an account of State Street in the U.S. Securities System (the "U.S. SECURITIES SYSTEM ACCOUNT") which account shall not include any assets of State Street other than assets held as a fiduciary, custodian or otherwise for customers;

2) The records of State Street with respect to securities of the Portfolio which are maintained in a U.S. Securities System shall identify by book-entry those securities belonging to the Portfolio;

3) State Street shall pay for securities purchased for the account of the Portfolio upon (i) receipt of advice from the U.S. Securities System that such securities have been transferred to the U.S. Securities System Account, and (ii) the making of an entry on the records of State Street to reflect such payment and transfer for the account of the Portfolio. State Street shall transfer securities sold for the account of the Portfolio upon (i) receipt of advice from the U.S. Securities System that payment for such securities has been transferred to the U.S. Securities System Account, and (ii) the making of an entry on the records of State Street to reflect such transfer and payment for the account of the Portfolio. Copies of all advices from the U.S. Securities System of transfers of securities for the account of the Portfolio shall identify the Portfolio, be maintained for the Portfolio by State Street and be provided to Fund at its request. Upon request, State Street shall furnish Fund on behalf of the Portfolio confirmation of each transfer to or from the account of the Portfolio in the form of a written advice or notice and shall furnish to Fund on behalf of the Portfolio copies of daily transaction sheets reflecting each day's transactions in the U.S. Securities System for the account of the Portfolio;

4) State Street shall provide Fund with any report obtained by State Street on the U.S. Securities System's accounting system, internal accounting control and procedures for safeguarding securities deposited in the U.S. Securities System;

5) Anything to the contrary herein notwithstanding, State Street shall be liable to Fund for the benefit of the Portfolio for any loss or damage to the Portfolio resulting from use of the U.S. Securities System by reason of any negligence, misfeasance or misconduct of State Street or any of its agents or of any of its their employees or from failure of State Street or any such agent to enforce effectively such rights as it may have against the U.S. Securities System; at the election of Fund, it shall be entitled to be subrogated to the rights of State Street with respect to any claim against the U.S. Securities System or any other person which State

Street may have as a consequence of any such loss or damage if and to the extent that the Portfolio has not been made whole for any such loss or damage.

SECTION 2.9 SEGREGATED ACCOUNT. State Street shall upon receipt of Proper Instructions on behalf of each applicable Portfolio establish and maintain a segregated account or accounts for and on behalf of each such Portfolio, into which account or accounts may be transferred cash and/or securities, including securities maintained in an account by State Street pursuant to Section 2.8 hereof, (i) in accordance with the provisions of any agreement among Fund on behalf of the Portfolio, State Street and a broker-dealer registered under the Exchange Act and a member of the NASD (or any futures commission merchant registered under the Commodity Exchange Act), relating to compliance with the rules of The Options Clearing Corporation and of any registered national securities exchange (or the CFTC or any registered contract market), or of any similar organization or organizations, regarding escrow or other arrangements in connection with transactions by the Portfolio, (ii) for purposes of segregating cash or government securities in connection with options purchased, sold or written by the Portfolio or commodity futures contracts or options thereon purchased or sold by the Portfolio, (iii) for the purposes of compliance by the Portfolio with the procedures required by Investment Company Act Release No. 10666, or any subsequent release of the U.S. Securities and Exchange Commission (the "SEC"), or interpretative opinion of the staff of the SEC, relating to the maintenance of segregated accounts by registered investment companies, and (iv) for any other purpose upon receipt of Proper Instructions on behalf of the applicable Portfolio.

SECTION 2.10 OWNERSHIP CERTIFICATES FOR TAX PURPOSES. State Street shall execute ownership and other certificates and affidavits for all federal and state tax purposes in connection with receipt of income or other payments with respect to domestic securities of each Portfolio and in connection with transfers of securities.

SECTION 2.11 PROXIES. State Street shall, with respect to domestic securities, cause to be promptly executed by the registered holder of such securities, if the securities are registered otherwise than in the name of the Portfolio or a nominee of the Portfolio, all proxies, without indication of the manner in which such proxies are to be voted, and shall promptly deliver to the Portfolio such proxies, all proxy soliciting materials and all notices relating to such securities.

SECTION 2.12 COMMUNICATIONS RELATING TO PORTFOLIO SECURITIES. Subject to the provisions of Section 2.3, State Street shall transmit promptly to Fund for each Portfolio all written information received by State Street from issuers of the securities being held for the Portfolio with respect to Corporate Actions, notices of exercise of call and put options written by Fund on behalf of the Portfolio, and the maturity of futures contracts purchased or sold by the Portfolio. With respect to tender or exchange offers, State Street shall transmit promptly to the Portfolio all written information received by State Street from issuers of the securities whose tender or exchange is sought and from the party (or its agents) making the tender or exchange offer. If the Portfolio desires to take action with respect to any Corporate Action, the Portfolio shall provide Proper Instruction to State Street at least three business days prior to the date on which State Street is to take such action.

SECTION 3 PROVISIONS RELATING TO RULES 17F-5 AND 17F-7

SECTION 3.1 DEFINITIONS. As used throughout this Agreement, the capitalized terms set forth below shall have the indicated meanings:

"Country Risk" means all factors reasonably related to the systemic risk of holding Foreign Assets in a particular country including, but not limited to, such country's political environment, economic and financial infrastructure (including any Eligible Securities Depository operating in the country), prevailing or developing custody and settlement practices, and laws and regulations applicable to the safekeeping and recovery of Foreign Assets held in custody in that country. "Country Risk" does not include the risk that State Street or any sub-custodian or agent will be negligent or will engage in willful misconduct.

"Eligible Foreign Custodian" has the meaning set forth in section (a)(1) of Rule 17f-5, including a majority-owned or indirect subsidiary of a U.S. Bank (as defined in Rule 17f-5), a bank holding company meeting the requirements of an Eligible Foreign Custodian (as set forth in Rule 17f-5 or by other appropriate action of the SEC, or a foreign branch of a Bank (as defined in section 2(a)(5) of the 1940 Act) meeting the requirements of a custodian under section 17(f) of the 1940 Act; the term does not include any Eligible Securities Depository.

"Eligible Securities Depository" has the meaning set forth in section (b)(1) of Rule 17f-7.

"Foreign Assets" means any of the Portfolios' investments (including foreign currencies) for which the primary market is outside the United States and such cash and cash equivalents as are reasonably necessary to effect the Portfolios' transactions in such investments.

"Foreign Custody Manager" has the meaning set forth in section (a)(3) of Rule 17f-5.

"Rule 17f-5" means Rule 17f-5 promulgated under the 1940 Act.

"Rule 17f-7" means Rule 17f-7 promulgated under the 1940 Act.

SECTION 3.2 STATE STREET AS FOREIGN CUSTODY MANAGER.

3.2.1 DELEGATION TO STATE STREET AS FOREIGN CUSTODY MANAGER. Fund, by resolution adopted by its Board, hereby delegates to State Street, subject to section (b) of Rule 17f-5, the responsibilities set forth in this
Section 3.2 with respect to Foreign Assets held outside the United States, and State Street hereby accepts such delegation as Foreign Custody Manager with respect to the Portfolios.

3.2.2 COUNTRIES COVERED. The Foreign Custody Manager shall be responsible for performing the delegated responsibilities defined below only with respect to the countries and custody arrangements for each such country listed on Schedule A, which list of countries may be amended from time to time by Fund with the agreement of the Foreign Custody Manager. The Foreign Custody Manager shall list on Schedule A the Eligible Foreign Custodians selected by the Foreign Custody Manager to maintain the assets of the Portfolios, which list of Eligible Foreign Custodians may be amended from time to time in the sole discretion of the Foreign Custody Manager. The Foreign Custody Manager will provide amended versions of Schedule A in accordance with Section 3.2.5 hereof.

Upon the receipt by the Foreign Custody Manager of Proper Instructions to open an account or to place or maintain Foreign Assets in a country listed on Schedule A, and the

fulfillment by Fund, on behalf of the Portfolios, of the applicable account opening requirements for such country, the Foreign Custody Manager shall be deemed to have been delegated by the Board on behalf of the Portfolios responsibility as Foreign Custody Manager with respect to that country and to have accepted such delegation. Execution hereof by Fund shall be deemed
(i) to be a Proper Instruction to open an account, or to place or maintain Foreign Assets, in each country listed on Schedule A in which State Street has previously placed or currently maintains Foreign Assets pursuant to the terms of the contract governing the custody arrangement (the parties agreeing that the countries in which the Custodian has previously maintained or currently maintains Foreign Assets are listed on Schedule B) and (ii) to be a delegation by the Board on behalf of the Portfolios to the Custodian of responsibility as Foreign Custody Manager with respect to the countries listed on Schedule B and the acceptance by the Custodian of such delegation. Following the receipt of Proper Instructions directing the Foreign Custody Manager to close the account of a Portfolio with the Eligible Foreign Custodian selected by the Foreign Custody Manager in a designated country, the delegation by the Board on behalf of the Portfolios to State Street as Foreign Custody Manager for that country shall be deemed to have been withdrawn and State Street shall use commercially reasonable efforts to effect the closing of such account and to cease to be the Foreign Custody Manager of the Portfolios with respect to that country.

The Foreign Custody Manager may withdraw its acceptance of delegated responsibilities with respect to a designated country upon written notice to Fund. Thirty days (or such longer period to which the parties agree in writing) after receipt of any such notice by Fund, State Street shall have no further responsibility in its capacity as Foreign Custody Manager to Fund with respect to the country as to which State Street's acceptance of delegation is withdrawn.

3.2.3 SCOPE OF DELEGATED RESPONSIBILITIES:

(a) SELECTION OF ELIGIBLE FOREIGN CUSTODIANS. Subject to the provisions of this Section 3.2, the Foreign Custody Manager may place and maintain the Foreign Assets in the care of the Eligible Foreign Custodian selected by the Foreign Custody Manager in each country listed on Schedule A, as amended from time to time. In performing its delegated responsibilities as Foreign Custody Manager to place or maintain Foreign Assets with an Eligible Foreign Custodian, the Foreign Custody Manager shall determine that the Foreign Assets will be subject to reasonable care, based on the standards applicable to custodians in the country in which the Foreign Assets will be held by that Eligible Foreign Custodian, after considering all factors relevant to the safekeeping of such assets, including, without limitation the factors specified in Rule 17f-5(c)(1).

(b) CONTRACTS WITH ELIGIBLE FOREIGN CUSTODIANS. The Foreign Custody Manager shall determine that the contract governing the foreign custody arrangements with each Eligible Foreign Custodian selected by the Foreign Custody Manager will satisfy the requirements of Rule 17f-5(c)(2).

(c) MONITORING. In each case in which the Foreign Custody Manager maintains Foreign Assets with an Eligible Foreign Custodian selected by the Foreign Custody Manager, the Foreign Custody Manager shall in accordance with Rule 17f-

5(c)(3)(1), establish a system to monitor (i) the appropriateness of maintaining the Foreign Assets with such Eligible Foreign Custodian and
(ii) the contract governing the custody arrangements established by the Foreign Custody Manager with the Eligible Foreign Custodian. In the event the Foreign Custody Manager determines that the custody arrangements with an Eligible Foreign Custodian it has selected are no longer appropriate, the Foreign Custody Manager shall notify the Board in accordance with
Section 3.2.5 hereunder.

3.2.4 GUIDELINES FOR THE EXERCISE OF DELEGATED AUTHORITY. For purposes of this Section 3.2, the Board shall be deemed to have considered and determined to accept such Country Risk as is incurred by placing and maintaining the Foreign Assets in each country for which State Street is serving as Foreign Custody Manager of the Portfolios.

3.2.5 REPORTING REQUIREMENTS. The Foreign Custody Manager shall report the withdrawal of the Foreign Assets from an Eligible Foreign Custodian and the placement of such Foreign Assets with another Eligible Foreign Custodian not previously reported to the Board by providing to the Board an amended Schedule A at the end of the calendar quarter in which an amendment to such Schedule has occurred. The Foreign Custody Manager shall make written reports notifying the Board of any other material change in the foreign custody arrangements of the Portfolios described in this Section 3.2 after the occurrence of the material change.

3.2.6 STANDARD OF CARE AS FOREIGN CUSTODY MANAGER OF A PORTFOLIO. In performing the responsibilities delegated to it, the Foreign Custody Manager agrees to exercise reasonable care, prudence and diligence such as a person having responsibility for the safekeeping of assets of management investment companies registered under the 1940 Act would exercise.

3.2.7 REPRESENTATIONS WITH RESPECT TO RULE 17F-5. The Foreign Custody Manager represents to Fund that (i) it is a U.S. Bank as defined in section
(a)(7) of Rule 17f-5 (ii) that each institution listed on Schedule A is an Eligible Foreign Custodian and (iii) each institution listed in Schedule B is an Eligible Securities Depository. Fund represents to State Street that the Board has determined that it is reasonable for the Board to rely on State Street to perform the responsibilities delegated pursuant hereto to State Street as the Foreign Custody Manager of the Portfolios.

3.2.8 EFFECTIVE DATE AND TERMINATION OF STATE STREET AS FOREIGN CUSTODY MANAGER. The Board's delegation to State Street as Foreign Custody Manager of the Portfolios shall be effective as of the date hereof and shall remain in effect until terminated at any time, without penalty, by written notice from the terminating party to the non-terminating party. Termination will become effective thirty (30) days after receipt by the non-terminating party of such notice. The provisions of Section 3.2.2 hereof shall govern the delegation to and termination of State Street as Foreign Custody Manager of the Portfolios with respect to designated countries.

SECTION 3.3 ELIGIBLE SECURITIES DEPOSITORIES.

3.3.1 ANALYSIS AND MONITORING. State Street shall (a) provide Fund (or its duly-authorized investment manager, investment advisor or sub-adviser, where applicable)

with an analysis of the custody risks associated with maintaining assets with the Eligible Securities Depositories set forth on Schedule B hereto in accordance with section (a)(1)(i)(A) of Rule 17f-7, and (b) monitor such risks on a continuing basis, and promptly notify Fund (or its duly-authorized investment manager, investment advisor or sub-adviser, where applicable) of any material change in such risks, in accordance with section (a)(1)(i)(B) of Rule 17f-7.

3.3.2 STANDARD OF CARE. State Street agrees to exercise reasonable care, prudence and diligence in performing the duties set forth in Section 3.3.1.

SECTION 4 DUTIES OF STATE STREET WITH RESPECT TO PROPERTY HELD OUTSIDE THE UNITED STATES

SECTION 4.1 DEFINITIONS. As used throughout this Agreement, the capitalized terms set forth below shall have the indicated meanings:

"Foreign Securities System" means an Eligible Securities Depository listed on Schedule B hereto.

"Foreign Sub-Custodian" means a foreign banking institution serving as an Eligible Foreign Custodian.

SECTION 4.2 HOLDING SECURITIES. State Street shall identify on its books as belonging to the Portfolios the foreign securities held by each Foreign Sub-Custodian or Foreign Securities System. State Street may hold foreign securities for all of its customers, including the Portfolios, with any Foreign Sub-Custodian in an account that is identified as belonging to State Street for the benefit of its customers, provided however, that (i) the records of State Street with respect to foreign securities which are maintained in such account shall identify those securities as belonging to the Portfolios and (ii), to the extent permitted and customary in the market in which the account is maintained, State Street shall require that securities so held by the Foreign Sub-Custodian be held separately from any assets of such Foreign Sub-Custodian or of other customers of such Foreign Sub-Custodian.

SECTION 4.3 FOREIGN SECURITIES SYSTEMS. Foreign securities shall be maintained in a Foreign Securities System in a designated country through arrangements implemented by State Street or a Foreign Sub-Custodian, as applicable, in such country. (Foreign Securities Systems and U.S. Securities Systems are collectively referred to herein as "SECURITIES SYSTEMS").

SECTION 4.4 TRANSACTIONS IN FOREIGN CUSTODY ACCOUNT.

4.4.1. DELIVERY OF FOREIGN ASSETS. State Street or a Foreign Sub-Custodian shall release and deliver foreign securities held by State Street or such Foreign Sub-Custodian, or in a Foreign Securities System account, only upon receipt of Proper Instructions on behalf of the Applicable Portfolio, which may be continuing instructions when deemed appropriate by the parties, and only in the following cases:

(i) upon the sale of such foreign securities for the Portfolio in accordance with commercially reasonable market practice in the country where such foreign

securities are held or traded, including, without limitation: (A) delivery against reasonable expectation of receiving later payment; or (B) in the case of a sale effected through a Foreign Securities System, in accordance with the rules governing the operation of the Foreign Securities System;

(ii) in connection with any repurchase agreement related to foreign securities;

(iii) to the depository agent in connection with tender or other similar offers for foreign securities;

(iv) to the issuer thereof or its agent when such foreign securities are called, redeemed, retired or otherwise become payable;

(v) to the issuer thereof, or its agent, for transfer into the name of State Street (or the name of the respective Foreign Sub-Custodian or of any nominee of State Street or such Foreign Sub-Custodian) or for exchange for a different number of bonds, certificates or other evidence representing the same aggregate face amount or number of units;

(vi) to brokers, clearing banks or other clearing agents for examination or trade execution in accordance with market custom; provided that in any such case the Foreign Sub-Custodian shall have no responsibility or liability for any loss arising from the delivery of such securities prior to receiving payment for such securities except as may arise from the Foreign Sub-Custodian's own negligence or willful misconduct;

(vii) for exchange or conversion pursuant to any Corporate Actions or pursuant to provisions for conversion contained in such securities, or pursuant to any deposit agreement;

(viii) in the case of warrants, rights or similar foreign securities, the surrender thereof in the exercise of such warrants, rights or similar securities or the surrender of interim receipts or temporary securities for definitive securities;

(ix) for delivery as security in connection with any borrowing by the Portfolios requiring a pledge of assets by the Portfolios;

(x) in connection with trading in options and futures contracts, including delivery as original margin and variation margin in accordance with applicable regulatory requirements;

(xi) in connection with the lending of foreign securities by the Portfolio; and

(xii) for any other purpose, but only upon receipt of Proper Instructions specifying the foreign securities to be delivered and naming the person or persons to whom delivery of such securities shall be made.

4.4.2. PAYMENT OF PORTFOLIO MONIES - FOREIGN SECURITIES. Upon receipt of Proper Instructions on behalf of the applicable Portfolio, which may be continuing instructions when deemed appropriate by the parties, State Street shall pay out, or direct the

respective Foreign Sub-Custodian or the respective Foreign Securities System to pay out, monies of a Portfolio in the following cases only:

(i) upon the purchase of foreign securities for the Portfolio, unless otherwise directed by Proper Instructions, by (A) delivering money to the seller thereof or to a dealer therefor (or an agent for such seller or dealer) against reasonable expectation of receiving later delivery of such foreign securities; or (B) in the case of a purchase effected through a Foreign Securities System, in accordance with the rules governing the operation of such Foreign Securities System;

(ii) in connection with the conversion, exchange or surrender of foreign securities;

(iii) for the payment of any expense or liability of the Portfolio, including but not limited to the following payments: interest, taxes, investment advisory fees, transfer agency fees, fees hereunder, legal fees, accounting fees, and other operating expenses;

(iv) for the purchase or sale of foreign exchange or foreign exchange contracts for the Portfolio, including transactions executed with or through State Street or its Foreign Sub-Custodians;

(v) in connection with trading in options and futures contracts, including delivery as original margin and variation margin;

(vi) for payment of part or all of the dividends received in respect of securities sold short;

(vii) in connection with the borrowing or lending of foreign securities; and

(viii) for any other purpose, but only upon receipt of Proper Instructions specifying the amount of such payment and naming the person or persons to whom such payment is to be made.

4.4.3. MARKET CONDITIONS. Notwithstanding any provision hereof to the contrary, settlement and payment for Foreign Assets received for the account of the Portfolios and delivery of Foreign Assets maintained for the account of the Portfolios may be effected in accordance with the customary established securities trading or processing practices and procedures in the country or market in which the transaction occurs, including, without limitation, delivering Foreign Assets to the purchaser thereof or to a dealer therefor (or an agent for such purchaser or dealer) with the expectation of receiving later payment for such Foreign Assets from such purchaser or dealer.

State Street shall provide each Portfolio's adviser (and sub-adviser, where applicable), as identified in Proper Instructions by the Board, the information with respect to custody and settlement practices in countries in which State Street employs a Foreign Sub-Custodian described on Schedule C hereto, including without limitation information relating to Foreign Securities Systems, at the time or times set forth on such Schedule. State Street may revise Schedule C from time to time, provided that no such revision

shall result in the Board being provided with substantively less information than had been previously provided hereunder.

SECTION 4.5 REGISTRATION OF FOREIGN SECURITIES. The foreign securities maintained in the custody of a Foreign Sub-Custodian (other than bearer securities) shall be registered in the name of the applicable Portfolio or in the name of State Street or in the name of any Foreign Sub-Custodian or in the name of any nominee of the foregoing, and Fund on behalf of such Portfolio agrees to hold any such nominee harmless from any liability as a holder of record of such foreign securities. State Street or a Foreign Sub-Custodian shall not be obligated to accept securities on behalf of a Portfolio under the terms hereof unless the form of such securities and the manner in which they are delivered are in accordance with reasonable market practice.

SECTION 4.6 BANK ACCOUNTS. State Street shall identify on its books as belonging to Fund cash (including cash denominated in foreign currencies) deposited with State Street. Where State Street is unable to maintain, or market practice does not facilitate the maintenance of, cash on the books of State Street, a bank account or bank accounts shall be opened and maintained outside the United States on behalf of a Portfolio with a Foreign Sub-Custodian. All accounts referred to in this Section shall be subject only to draft or order by State Street (or, if applicable, such Foreign Sub-Custodian) acting pursuant to the terms hereof to hold cash received by or from or for the account of the Portfolio. Cash maintained on the books of State Street (including its branches, subsidiaries and affiliates), regardless of currency denomination, is maintained in bank accounts established under, and subject to the laws of, The Commonwealth of Massachusetts.

SECTION 4.7 COLLECTION OF INCOME. State Street shall use reasonable commercial efforts to collect all income and other payments with respect to the Foreign Assets held hereunder to which the Portfolios shall be entitled and shall credit such income, as collected, to the applicable Portfolio. In the event that extraordinary measures are required to collect such income, Fund and State Street shall consult as to such measures and as to the compensation and expenses of State Street relating to such measures.

SECTION 4.8 SHAREHOLDER RIGHTS. With respect to the foreign securities held pursuant to this Section 4, State Street will use reasonable commercial efforts to facilitate the exercise of voting and other shareholder rights, subject always to the laws, regulations and practical constraints that may exist in the country where such securities are issued. Fund acknowledges that local conditions, including lack of regulation, onerous procedural obligations, lack of notice and other factors may have the effect of severely limiting the ability of Fund to exercise shareholder rights.

SECTION 4.9 COMMUNICATIONS RELATING TO FOREIGN SECURITIES. State Street shall transmit promptly to Fund written information with respect to materials received by State Street via the Foreign Sub-Custodians from issuers of the foreign securities being held for the account of the Portfolios (including, without limitation, pendency of calls and maturities of foreign securities and expirations of rights in connection therewith). With respect to tender or exchange offers, State Street shall transmit promptly to Fund written information with respect to materials so received by State Street from issuers of the foreign securities whose tender or exchange is sought or from the party (or its agents) making the tender or exchange offer. State Street shall not be liable for any untimely exercise of any action, right or power in connection with foreign securities or other property unless (i) State Street or the respective Foreign Sub-Custodian is in

actual possession of such foreign securities or property and (ii) State Street receives Proper Instructions with regard to the exercise of any such action, right or power, and both (i) and (ii) occur at least three business days prior to the date on which State Street is to take action to exercise such right or power.

SECTION 4.10 LIABILITY OF FOREIGN SUB-CUSTODIANS. Each agreement pursuant to which State Street employs a Foreign Sub-Custodian shall, to the extent possible, require the Foreign Sub-Custodian to exercise reasonable care in the performance of its duties, and to indemnify, and hold harmless, State Street from and against any loss, damage, cost, expense, liability or claim arising out of or in connection with the Foreign Sub-Custodian's performance of such obligations. At Fund's election, the Portfolios shall be entitled to be subrogated to the rights of State Street with respect to any claims against a Foreign Sub-Custodian as a consequence of any such loss, damage, cost, expense, liability or claim if and to the extent that the Portfolios have not been made whole for any such loss, damage, cost, expense, liability or claim.

SECTION 4.11 TAX LAW. State Street shall have no responsibility or liability for any obligations now or hereafter imposed on Fund, the Portfolios or State Street as custodian of the Portfolios by the tax law of the United States or of any state or political subdivision thereof (except taxes attributable to the domicile of State Street in the Commonwealth of Massachusetts, and in such case State Street shall notify Fund). It shall be the responsibility of Fund to notify State Street of the obligations imposed on Fund with respect to the Portfolios or State Street as custodian of the Portfolios by the tax law of countries other than those mentioned in the above sentence, including responsibility for withholding and other taxes, assessments or other governmental charges, certifications and governmental reporting. The sole responsibility of State Street with regard to such tax law shall be to use reasonable efforts to assist Fund with respect to any claim for exemption or refund under the tax law of countries for which Fund has provided such information.

SECTION 4.12 LIABILITY OF STATE STREET. State Street shall be liable for the acts or omissions of a Foreign Sub-Custodian to the same extent as set forth with respect to sub-custodians generally herein and, regardless of whether assets are maintained in the custody of a Foreign Sub-Custodian or a Foreign Securities System, State Street shall not be liable for any loss, damage, cost, expense, liability or claim resulting from nationalization, expropriation, currency restrictions, or acts of war or terrorism, or any other loss to the extent that the Sub-Custodian has acted with reasonable care.

SECTION 5 PAYMENTS FOR SALES OR REPURCHASES OR REDEMPTIONS OF SHARES. State Street shall receive from the distributor for the Shares or from the Transfer Agent and deposit into the account of the appropriate Portfolio such payments as are received for Shares thereof issued or sold from time to time by Fund. State Street will provide timely notification to Fund on behalf of each such Portfolio and the Transfer Agent of any receipt by it of payments for Shares of such Portfolio.

From such funds as may be available for the purpose, State Street shall, upon receipt of instructions from the Transfer Agent, make funds available for payment to holders of Shares who have delivered to the Transfer Agent a request for redemption or repurchase of their Shares. In connection with the redemption or repurchase of Shares, State Street is authorized upon receipt of instructions from the Transfer Agent to wire funds to or through a commercial bank

designated by the redeeming shareholders. In connection with the redemption or repurchase of Shares, State Street shall honor checks drawn on State Street by a holder of Shares, which checks have been furnished by Fund to the holder of Shares, when presented to State Street in accordance with such procedures and controls as are mutually agreed upon from time to time between Fund and State Street.

SECTION 6 PROPER INSTRUCTIONS. Proper Instructions as used throughout this Agreement means a writing signed or initialed by one or more person or persons as the Board shall have from time to time authorized. Each such writing shall set forth the specific transaction or type of transaction involved, including a specific statement of the purpose for which such action is requested. Oral instructions will be considered Proper Instructions if State Street reasonably believes them to have been given by a person authorized to give such instructions with respect to the transaction involved. Fund shall cause all oral instructions to be confirmed in writing. If given pursuant to procedures to be agreed upon by the parties, Proper Instructions may include communications effected directly between electro-mechanical or electronic devices provided that Fund and State Street agree to security procedures, including but not limited to, the security procedures selected by Fund in the Funds Transfer Addendum attached hereto. For purposes of this Section, Proper Instructions shall include instructions received by State Street pursuant to any three-party agreement that requires a segregated asset account in accordance with Section 2.9.

SECTION 7 ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY. State Street may in its discretion, without express authority from Fund on behalf of each applicable Portfolio: 1) surrender securities in temporary form for securities in definitive form; 2) endorse for collection, in the name of the Portfolio, checks, drafts and other negotiable instruments; and 3) in general, attend to all non-discretionary details in connection with the sale, exchange, substitution, purchase, transfer and other dealings with the securities and property of the Portfolio except as otherwise directed by the Board.

SECTION 8 EVIDENCE OF AUTHORITY. State Street shall be protected in acting upon any instructions, notice, request, consent, certificate or other instrument or paper believed by it to be genuine and to have been properly executed by or on behalf of Fund. State Street may receive and accept a copy of a resolution certified by the Secretary or an Assistant Secretary of Fund ("CERTIFIED RESOLUTION") as conclusive evidence (a) of the authority of any person to act in accordance with such resolution or (b) of any determination or of any action by the Board as described in such resolution, and such resolution may be considered as in full force and effect until receipt by State Street of written notice to the contrary.

SECTION 9 DUTIES OF STATE STREET WITH RESPECT TO THE BOOKS OF ACCOUNT AND CALCULATION OF NET ASSET VALUE

SECTION 9.1 ACCOUNTS AND RECORDS. State Street will prepare and maintain, under the direction of and as interpreted by Fund, Fund's or Portfolio's accountants and/or other advisors, in complete, accurate and current form such accounts and records: (A) required to be maintained by Fund with respect to portfolio transactions under the 1940 Act; (B) required as a basis for calculation of each Portfolio's net asset value; and (C) as otherwise agreed upon by the parties. Fund will advise State Street in writing of all applicable record retention requirements, other than those set forth in the 1940 Act. State Street will preserve such accounts and records in the manner and for the periods prescribed in the 1940 Act or for such longer period as is agreed

upon by the parties. Fund will furnish, in writing or its electronic or digital equivalent, accurate and timely information needed by State Street to complete such accounts and records when such information is not readily available from generally accepted securities industry services or publications. State Street shall, at Fund's request, supply Fund with a tabulation of securities owned by a Portfolio and held by State Street, including certificate numbers, if applicable, for such compensation as shall be agreed upon between Fund and State Street.

SECTION 9.2 DELIVERY OF ACCOUNTS AND RECORDS. Fund will turn over or cause to be turned over to State Street all accounts and records needed by State Street to perform its duties and responsibilities hereunder fully and properly. State Street may rely conclusively on the completeness and correctness of such accounts and records.

SECTION 9.3 ACCOUNTS AND RECORDS PROPERTY OF FUND. State Street acknowledges that all of the accounts and records maintained by State Street pursuant hereto are the property of Fund, and will be made available to Fund for inspection or reproduction within a reasonable period of time, upon demand. State Street will assist Fund's independent auditors, or upon the prior written approval of Fund, or upon demand, any regulatory body, in any requested review of Fund's accounts and records but Fund will reimburse State Street for all reasonable expenses and employee time invested in any such review outside of routine and normal periodic reviews. Upon receipt from Fund of the necessary information or instructions, State Street will supply information from the books and records it maintains for Fund that Fund may reasonably request for tax returns, questionnaires, periodic reports to shareholders and such other reports and information requests as Fund and State Street may agree upon from time to time.

SECTION 9.4 ADOPTION OF PROCEDURES. State Street and Fund may from time to time adopt such procedures as they agree upon, and State Street may conclusively assume that no procedure approved or directed by Fund, Fund's or Portfolio's accountants or other advisors conflicts with or violates any requirements of Fund's Prospectus, governing documents, any applicable law, rule or regulation, or any order, decree or agreement by which Fund may be bound. The Fund agrees to notify State Street promptly of any change in the Fund's circumstances and of any changes in statutes, regulations, rules, requirements or policies which may impact State Street's performance of its responsibilities hereunder or its related operational policies and procedures as they relate to the Fund in a manner different from or in addition to requirements applicable to investment companies registered under the 1940 Act in general.

SECTION 9.5 VALUATION OF ASSETS. State Street will value the assets of each Portfolio in accordance with Proper Instructions utilizing the pricing sources designated by Fund ("PRICING SOURCES") on the Price Source and Methodology Authorization Matrix, incorporated herein by this reference. State Street will assist with the shadow pricing of any money market Portfolios as requested by Fund. If so directed, State Street shall also calculate daily net income of a Portfolio as described in the prospectus and shall advise the Fund periodically of the division of such net income of its various components.

SECTION 9.6 LIMITATION OF LIABILITY. So long as and to the extent that it is in the exercise of reasonable care, State Street is not responsible or liable for, and Fund will indemnify and hold State Street harmless from and against, any and all costs, expenses, losses, damages, charges, counsel fees (including, without limitation, disbursements and the allocable cost of in-house counsel), payments and liabilities which may be asserted against or incurred by State Street or for which State Street may be held to be liable, arising out of or attributable to any error, omission,

inaccuracy or other deficiency in any Portfolio's accounts and records or other information provided to State Street by or on behalf of a Portfolio, including the accuracy of the prices quoted by the Pricing Sources or for the information supplied by Fund to value the assets, or the failure of Fund to provide, or provide in a timely manner, any accounts, records, or information needed by State Street to perform its duties hereunder.

SECTION 10 OPINION OF FUND'S INDEPENDENT ACCOUNTANT. State Street shall take all reasonable action, as Fund on behalf of each applicable Portfolio may from time to time request, to obtain from year to year favorable opinions from Fund's independent accountants with respect to its activities hereunder in connection with the preparation of Fund's Form N-1A, and Form N-SAR or other annual reports to the SEC and with respect to any other requirements thereof.

SECTION 11 REPORTS TO FUND BY INDEPENDENT PUBLIC ACCOUNTANTS. State Street shall provide Fund, on behalf of each of the Portfolios at such times as Fund may reasonably require, with reports by independent public accountants on the accounting system, internal accounting control and procedures for safeguarding securities, futures contracts and options on futures contracts, including securities deposited and/or maintained in any Securities System, relating to the services provided by State Street hereunder; such reports, shall be of sufficient scope and in sufficient detail, as may reasonably be required by Fund to provide reasonable assurance that any material inadequacies would be disclosed by such examination, and, if there are no such inadequacies, the reports shall so state.

SECTION 12 COMPENSATION OF STATE STREET. State Street shall be entitled to reasonable compensation for its services and expenses as custodian and recordkeeping agent, as agreed upon from time to time in a fee schedule, as amended from time to time ("FEE SCHEDULE") between Fund on behalf of each applicable Portfolio and State Street.

SECTION 13 RESPONSIBILITY OF STATE STREET. So long as and to the extent that State Street exercises reasonable care, State Street shall not be responsible for the title, validity or genuineness of any property or evidence of title thereto received by it or delivered by it pursuant hereto and shall be held harmless in acting upon any notice, request, consent, certificate or other instrument reasonably believed by it to be genuine and to be signed by the proper party or parties, including any futures commission merchant acting pursuant to the terms of a three-party futures or options agreement. State Street shall be held to the exercise of reasonable care in carrying out the provisions hereof, but shall be kept indemnified by and shall be without liability to Fund for any action taken or omitted by it in good faith without negligence, including, without limitation, acting in accordance with any Proper Instruction. It shall be entitled to rely on and may act upon advice of counsel on all matters, and shall be without liability for any action reasonably taken or omitted pursuant to such advice. State Street shall be without liability to Fund and the Portfolios for any loss, liability, claim or expense resulting from or caused by anything which is part of Country Risk (as defined in Section 3 hereof), including without limitation nationalization, expropriation, currency restrictions, or acts of war, revolution, riots or terrorism.

Except to the extent of State Street's own negligence or willful misconduct or the negligence or willful misconduct of a sub-custodian or agent, State Street shall be without liability to Fund for any loss, liability, claim or expense resulting from or caused by; (i) events or circumstances beyond the reasonable control of State Street or any sub-custodian or Securities System or any agent or nominee of any of the foregoing, including, without limitation, the interruption,

suspension or restriction of trading on or the closure of any securities market, power or other mechanical or technological failures or interruptions, computer viruses or communications disruptions, work stoppages, natural disasters, or other similar events or acts ("Force Majeure Events"); (ii) errors by Fund or its duly-authorized investment manager or investment advisor in their instructions to State Street provided such instructions have been in accordance with this Agreement; (iii) the insolvency of or acts or omissions by a Securities System; (iv) any delay or failure of any broker, agent or intermediary, central bank or other commercially prevalent payment or clearing system to deliver to State Street's sub-custodian or agent securities purchased or in the remittance or payment made in connection with securities sold; (v) any delay or failure of any company, corporation, or other body in charge of registering or transferring securities in the name of State Street, Fund, State Street's sub-custodians, nominees or agents or any consequential losses arising out of such delay or failure to transfer such securities including non-receipt of bonus, dividends and rights and other accretions or benefits; (vi) delays or inability to perform its duties due to any disorder in market infrastructure with respect to any particular security or Securities System; and (vii) any provision of any present or future law or regulation or order of the United States of America, or any state thereof, or any other country, or political subdivision thereof or of any court of competent jurisdiction.

State Street shall be liable for the acts or omissions of a Foreign Sub-Custodian (as defined in Section 4 hereof) to the same extent as set forth with respect to sub-custodians generally herein.

If Fund on behalf of a Portfolio requires State Street to take any action with respect to securities, which action involves the payment of money or which action may, in the opinion of State Street, result in State Street or its nominee assigned to Fund or the Portfolio being liable for the payment of money or incurring liability of some other form, Fund on behalf of the Portfolio, as a prerequisite to requiring State Street to take such action, shall provide indemnity to State Street in an amount as State Street may reasonably require.

If Fund requires State Street, its affiliates, subsidiaries or agents, to advance cash or securities for any purpose (including but not limited to securities settlements, foreign exchange contracts and assumed settlement) or in the event that State Street or its nominee shall incur or be assessed any taxes, charges, expenses, assessments, claims or liabilities in connection with the performance of this Agreement, except such as may arise from State Street's or its nominee's own negligent action, negligent failure to act or willful misconduct, any property at any time held for the account of the applicable Portfolio shall be security therefor and should Fund fail to repay State Street promptly, State Street shall be entitled to utilize available cash and to dispose of such Portfolio's assets to the extent necessary to obtain reimbursement.

In no event shall either party be liable for indirect, special or consequential damages.

SECTION 14 EFFECTIVE PERIOD, TERMINATION AND AMENDMENT. This Agreement shall become effective as of its execution, shall continue in full force and effect until terminated as hereinafter provided, may be amended at any time by mutual agreement of the parties hereto and may be terminated by either party by an instrument in writing delivered or mailed, postage prepaid to the other party, such termination to take effect not sooner than sixty (60) days after the date of such delivery or mailing; PROVIDED, however, that Fund shall not amend or terminate this Agreement in contravention of any applicable federal or state regulations, or any provision of the governing documents, and further provided, that Fund on behalf of one or more of the Portfolios may at any time by action of its Board (i) substitute another bank or trust company for State

Street by giving notice as described above to State Street, or (ii) immediately terminate this Agreement in the event of the appointment of a conservator or receiver for State Street by the Comptroller of the Currency or upon the happening of a like event at the direction of an appropriate regulatory agency or court of competent jurisdiction.

Upon termination hereof, Fund on behalf of each applicable Portfolio shall pay to State Street such compensation and reimbursement as may be due as of the date of such termination in accordance with the Fee Schedule, and State Street shall pay amounts due to any Portfolio.

SECTION 15 SUCCESSOR CUSTODIAN AND RECORDKEEPING AGENT. Upon termination of State Street as recordkeeping agent, State Street shall, upon payment of all sums due to it from Fund that are not in dispute, deliver all accounts and records to the successor recordkeeping agent (or, if none, to Fund) at the office of State Street.

Upon termination of State Street as Custodian, if a successor custodian for one or more Portfolios shall be appointed by the Board, State Street shall deliver to such successor custodian at the office of State Street, duly endorsed and in the form for transfer, all securities of each applicable Portfolio then held by it hereunder and shall transfer to an account of the successor custodian all of the securities of each such Portfolio held in a Securities System.

If no such successor custodian shall be appointed, State Street shall, in like manner, upon receipt of a Certified Resolution, deliver at the office of State Street and transfer such securities, funds and other properties in accordance with such resolution.

In the event that no written order designating a successor custodian or Certified Resolution shall have been delivered to State Street on or before the date when such termination shall become effective, then State Street shall have the right to deliver to a bank or trust company, which is a "bank" as defined in the 1940 Act, doing business in Boston, Massachusetts, or New York, New York, of its own selection, having an aggregate capital, surplus, and undivided profits, as shown by its last published report, of not less than $25,000,000, all securities, funds and other properties held by State Street on behalf of each applicable Portfolio and all instruments held by State Street relative thereto and all other property held by it hereunder on behalf of each applicable Portfolio, and to transfer to an account of such successor custodian all of the securities of each such Portfolio held in any Securities System. Thereafter, such bank or trust company shall be the successor of State Street hereunder.

In the event that accounts, records, securities, funds and other properties remain in the possession of State Street after the date of termination hereof owing to failure of Fund to procure the Certified Resolution to appoint a successor custodian or otherwise, State Street shall be entitled to fair compensation for its services during such period as State Street retains possession of such accounts, records, securities, funds and other properties and the provisions hereof relating to the duties and obligations of State Street shall remain in full force and effect.

SECTION 16 CONFIDENTIAL INFORMATION. The parties acknowledge that in the course of performing their responsibilities under the Agreement, they may be exposed to or acquire certain non-public information belonging to the other party ("Confidential Information"). The parties agree to hold any such Confidential Information in strict confidence and not to copy, reproduce, sell, assign, license, market, transfer or otherwise dispose of, give or disclose such Confidential Information to third parties or to use such Confidential Information for any

purposes whatsoever other than the provision of the services under this Agreement and to advise each of its officers, directors, employees and agents who may be exposed to such Confidential Information of their obligations to keep such information confidential. It is understood that in the event of a breach of this Section, damages may not be an adequate remedy and the non-breaching party shall be entitled to injunctive relief to restrain any such breach, threatened or actual.

The foregoing confidentiality obligations shall not apply to such Confidential Information (1) which at the time of disclosure, is publicly available or in the public knowledge; (2) which, after disclosure, lawfully becomes part of the public knowledge through publication or otherwise, but through no fault of the receiving party; (3) which the receiving party possesses at the time of disclosure of such Confidential Information and which was not acquired, directly or indirectly, from the disclosing party; (4) was acquired by the receiving party from a third party which has the right to disclose such Confidential Information; or (5) is independently developed by the receiving party without reference to the Confidential Information.

SECTION 17 GENERAL

SECTION 17.1 INTERPRETIVE AND ADDITIONAL PROVISIONS. In connection with the operation hereof, State Street and Fund on behalf of each of the Portfolios, may from time to time agree on such provisions interpretive of or in addition to the provisions hereof as may in their joint opinion be consistent with the general tenor of this Agreement. Any such interpretive or additional provisions shall be in a writing signed by both parties and shall be annexed hereto, PROVIDED that no such interpretive or additional provisions shall contravene any applicable federal or state regulations or any provision of the governing documents. No interpretive or additional provisions made as provided in the preceding sentence shall be deemed to be an amendment of this Agreement.

SECTION 17.2 ADDITIONAL PORTFOLIOS. In the event that Fund establishes one or more additional series with respect to which it desires to have State Street render services as custodian and recordkeeping agent under the terms hereof, it shall so notify State Street in writing, and if State Street agrees to provide such services, such series shall become a Portfolio hereunder.

SECTION 17.3 MASSACHUSETTS LAW TO APPLY. This Agreement shall be construed and the provisions thereof interpreted under and in accordance with laws of The Commonwealth of Massachusetts.

SECTION 17.4 PRIOR AGREEMENTS. This Agreement supersedes and terminates, as of the date hereof, all prior agreements between Fund on behalf of each of the Portfolios and State Street relating to the custody or recordkeeping of Fund's assets, as more specifically set forth on Exhibit A hereto.

To Fund:                                    To State Street:

ING PILGRIM INVESTMENTS                     STATE STREET BANK AND TRUST COMPANY
7337 E. Doubletree Ranch Road               801 Pennsylvania Avenue
Scottsdale, Arizona  85258-2034             Kansas City, MO  64105
Attention:  Maria M. Anderson               Attention: Vice President, Custody
Telephone: 480-477-2169                     Telephone: 816-871-4100
Telecopy: 480-477-2706                      Telecopy: 816-871-9648

Such notice, instruction or other instrument shall be deemed to have been served in the case of a registered letter at the expiration of five business days after posting, in the case of cable twenty-four hours after dispatch and, in the case of telex, immediately on dispatch and if delivered outside normal business hours it shall be deemed to have been received at the next time after delivery when normal business hours commence and in the case of cable, telex or telecopy on the business day after the receipt thereof. Evidence that the notice was properly addressed, stamped and put into the post shall be conclusive evidence of posting.

SECTION 17.6 REPRODUCTION OF DOCUMENTS. This Agreement and all schedules, addenda, exhibits, attachments and amendments hereto may be reproduced by any photographic, photostatic, microfilm, micro-card, miniature photographic or other similar process. The parties hereto all/each agree that any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding, 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 likewise be admissible in evidence.

SECTION 17.7 REMOTE ACCESS SERVICES ADDENDUM. State Street and Fund agree to be bound by the terms of the Remote Access Services Addendum attached hereto.

SECTION 17.8 ASSIGNMENT. Except as otherwise set forth herein, this Agreement may not be assigned by either party without the written consent of the other.

SECTION 17.9 COUNTERPARTS. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, and all such counterparts taken together shall constitute but one and the same Agreement.

SECTION 17.10 SEVERABILITY. If any provision in this Agreement is determined to be invalid, illegal, in conflict with any law or otherwise unenforceable, the remaining provisions hereof will be considered severable and will not be affected thereby, and every remaining provision hereof will remain in full force and effect and will remain enforceable to the fullest extent permitted by applicable law.

SECTION 17.11 SHAREHOLDER COMMUNICATIONS ELECTION. SEC Rule 14b-2 requires banks which hold securities for the account of customers to respond to requests by issuers of securities for the names, addresses and holdings of beneficial owners of securities of that issuer held by the bank unless the beneficial owner has expressly objected to disclosure of this information. In order to comply with the rule, State Street needs Fund to indicate whether it authorizes State Street to provide Fund's name, address, and share position to requesting companies whose securities Fund owns. If Fund tells State Street "no", State Street will not

provide this information to requesting companies. If Fund tells State Street "yes" or does not check either "yes" or "no" below, State Street is required by the rule to treat Fund as consenting to disclosure of this information for all securities owned by Fund or any funds or accounts established by Fund. For Fund's protection, the Rule prohibits the requesting company from using Fund's name and address for any purpose other than corporate communications. Please indicate below whether Fund consents or objects by checking one of the alternatives below.

YES / /   State Street is authorized to release Fund's name, address, and share
          positions.

NO  /X/   State Street is not authorized to release Fund's name, address, and
          share positions.

IN WITNESS WHEREOF, each of the parties has caused this instrument to be executed in its name and behalf by its duly authorized representative effective as of the day and year first written above.

ON BEHALF OF EACH OF THE FUNDS
SET FORTH ON EXHIBIT A HERETO FUND SIGNATURE ATTESTED TO BY:

By:    /s/ Michael J. Roland              By:    /s/ Robert S. Naka
       -----------------------------             ---------------------------

Name:  Michael J. Roland                  Name:  Robert S. Naka
       -----------------------------             ---------------------------

Title: Executive Vice President           Title: Senior Vice President
       -----------------------------             ---------------------------

STATE STREET BANK AND TRUST COMPANY SIGNATURE ATTESTED TO BY:

By:    /s/ illegible                      By:    /s/ Angie Keough
       -----------------------------             ---------------------------

Name:  illegible                          Name:  Angie Keough
       -----------------------------             ---------------------------

Title: Senior Vice President              Title: Legal Assistant
       -----------------------------             ---------------------------

COUNTRY                                        SUBCUSTODIAN
Argentina                Citibank, N.A.

Australia                Westpac Banking Corporation

Austria                  Erste Bank der Osterreichischen Sparkassen AG

Bahrain                  HSBC Bank Middle East
                         (as delegate of the Hongkong and Shanghai Banking Corporation Limited)

Bangladesh               Standard Chartered Bank

Belgium                  Fortis Bank nv-sa

Benin                    via Societe Generale de Banques en Cote d'Ivoire, Abidjan, Ivory Coast

Bermuda                  The Bank of Bermuda Limited

Bolivia                  Citibank, N. A.

Botswana                 Barclays Bank of Botswana Limited

Brazil                   Citibank, N.A.

Bulgaria                 ING Bank N.V.

Burkina Faso             via Societe Generale de Banques en Cote d'Ivoire, Abidjan, Ivory Coast

Canada                   State Street Trust Company Canada

Chile                    BankBoston, N.A.

People's Republic        Hongkong and Shanghai Banking Corporation Limited,
of China                 Shanghai and Shenzhen branches

Colombia                 Cititrust Colombia S.A. Sociedad Fiduciaria

Costa Rica               Banco BCT S.A.

Croatia                  Privredna Banka Zagreb d.d

Cyprus                   The Cyprus Popular Bank Ltd.

Czech Republic           Ceskoslovenska Obchodni Banka, A.S.

Denmark                  Danske Bank A/S

Ecuador                  Citibank, N.A.

Egypt                    HSBC Bank Egypt S.A.E.
                         (as delegate of the Hongkong and Shanghai Banking Corporation Limited)

Estonia                  Hansabank

Finland                  Nordea Bank Finland Plc.

France                   BNP Paribas Securities Services, S.A.

Germany                  Dresdner Bank AG

COUNTRY                                        SUBCUSTODIAN
Ghana                    Barclays Bank of Ghana Limited

Greece                   National Bank of Greece S.A.

Guinea-Bissau            via Societe Generale de Banques en Cote d'Ivoire, Abidjan, Ivory Coast

Hong Kong                Standard Chartered Bank

Hungary                  HVB Bank Hungary Rt.

Iceland                  Icebank Ltd.

India                    Deutsche Bank AG

                         Hongkong and Shanghai Banking Corporation Limited

Indonesia                Standard Chartered Bank

Ireland                  Bank of Ireland

Israel                   Bank Hapoalim B.M.

Italy                    BNP Paribas Securities Services, S.A.

Ivory Coast              Societe Generale de Banques en Cote d'Ivoire

Jamaica                  Scotiabank Jamaica Trust and Merchant Bank Ltd.

Japan                    The Fuji Bank, Limited

                         Sumitomo Mitsui Banking Corporation

Jordan                   HSBC Bank Middle East
                         (as delegate of the Hongkong and Shanghai Banking Corporation Limited)

Kazakhstan               HSBC Bank Kazakhstan
                         (as delegate of the Hongkong and Shanghai Banking Corporation Limited)

Kenya                    Barclays Bank of Kenya Limited

Republic of Korea        Hongkong and Shanghai Banking Corporation Limited

Latvia                   A/s Hansabanka

Lebanon                  HSBC Bank Middle East
                         (as delegate of the Hongkong and Shanghai Banking Corporation Limited)

Lithuania                Vilniaus Bankas AB

Malaysia                 Standard Chartered Bank Malaysia Berhad

Mali                     via Societe Generale de Banques en Cote d'Ivoire, Abidjan, Ivory Coast

Mauritius                Hongkong and Shanghai Banking Corporation Limited

Mexico                   Banco Nacional de Mexico S.A.

Morocco                  Banque Commerciale du Maroc

COUNTRY                                        SUBCUSTODIAN
Namibia                  Standard Bank Namibia Limited               -

Netherlands              Fortis Bank (Nederland) N.V.

New Zealand              Westpac Banking Corporation

Niger                    via Societe Generale de Banques en Cote d'Ivoire, Abidjan, Ivory Coast

Nigeria                  Stanbic Merchant Bank Nigeria Limited

Norway                   Nordea Bank Norge ASA

Oman                     HSBC Bank Middle East
                         (as delegate of the Hongkong and Shanghai Banking Corporation Limited)

Pakistan                 Deutsche Bank AG

Palestine                HSBC Bank Middle East
                         (as delegate of the Hongkong and Shanghai Banking Corporation Limited)

Panama                   BankBoston, N.A.

Peru                     Citibank, N.A.

Philippines              Standard Chartered Bank

Poland                   Bank Handlowy w Warszawie S.A.

Portugal                 Banco Comercial Portugues

Qatar                    HSBC Bank Middle East
                         (as delegate of the Hongkong and Shanghai Banking Corporation Limited)

Romania                  ING Bank N.V.

Russia                   Credit Suisse First Boston AO - Moscow
                         (as delegate of Credit Suisse First Boston - Zurich)

Senegal                  via Societe Generale de Banques en Cote d'Ivoire, Abidjan, Ivory Coast

Singapore                The Development Bank of Singapore Limited

Slovak Republic          Ceskoslovenska Obchodni Banka, A.S.

Slovenia                 Bank Austria Creditanstalt d.d. - Ljubljana

South Africa             Standard Bank of South Africa Limited

Spain                    Banco Santander Central Hispano S.A.

Sri Lanka                Hongkong and Shanghai Banking Corporation Limited

Swaziland                Standard Bank Swaziland Limited

Sweden                   Skandinaviska Enskilda Banken

Switzerland              UBS AG

Taiwan - R.O.C.          Central Trust of China

COUNTRY                                        SUBCUSTODIAN
Thailand                 Standard Chartered Bank

Togo                     via Societe Generale de Banques en Cote d'Ivoire, Abidjan, Ivory Coast

Trinidad & Tobago        Republic Bank Limited

Tunisia                  Banque Internationale Arabe de Tunisie

Turkey                   Citibank, N.A.

Ukraine                  ING Bank Ukraine

United Arab Emirates     HSBC Bank Middle East
                         (as delegate of the Hongkong and Shanghai Banking Corporation Limited)

United Kingdom           State Street Bank and Trust Company, London Branch

Uruguay                  BankBoston, N.A.

Venezuela                Citibank, N.A.

Vietnam                  The Hongkong and Shanghai
                         Banking Corporation Limited

Zambia                   Barclays Bank of Zambia Limited

Zimbabwe                 Barclays Bank of Zimbabwe Limited

COUNTRY                                                    DEPOSITORIES
Argentina                      Caja de Valores S.A.

Australia                      Austraclear Limited Reserve Bank Information and Transfer System

Austria                        Oesterreichische Kontrollbank AG (Wertpapiersammelbank Division)

Belgium                        Caisse Interprofessionnelle de Depots et de Virements de Titres, S.A.

                               Banque Nationale de Belgique

Benin                          Depositaire Central - Banque de Reglement

Brazil                         Companhia Brasileira de Liquidacao e Custodia

                               Sistema Especial de Liquidacao e de Custodia (SELIC)

                               Central de Custodia e de Liquidacao Financeira de Titulos Privados (CETIP)

Bulgaria                       Central Depository AD

                               Bulgarian National Bank

Burkina Faso                   Depositaire Central - Banque de Reglement

Canada                         Canadian Depository for Securities Limited

Chile                          Deposito Central de Valores S.A.

People's Republic of China     China Securities Depository and Clearing Corporation Limited Shanghai Branch

                               China Securities Depository and Clearing Corporation Limited Shenzhen Branch

Colombia                       Deposito Centralizado de Valores

Costa Rica                     Central de Valores S.A.

Croatia                        Ministry of Finance

                               National Bank of Croatia

                               Sredisnja Depozitarna Agencija d.d.

Czech Republic                 Stredisko cennych papiru - Ceska republika

                               Czech National Bank

Denmark                        Vaerdipapircentralen (Danish Securities Center)

Egypt                          Misr for Clearing, Settlement, and Depository S.A.E.

Estonia                        Eesti Vaartpaberite Keskdepositoorium

Finland                        Finnish Central Securities Depository

France                         Euroclear France

COUNTRY                                                    DEPOSITORIES
Germany                        Clearstream Banking AG, Frankfurt

Greece                         Bank of Greece,
                               System for Monitoring Transactions in Securities in Book-Entry Form

                               Apothetirion Titlon AE - Central Securities Depository

Guinea-Bissau                  Depositaire Central - Banque de Reglement

Hong Kong                      Hong Kong Securities Clearing Company Limited

                               Central Moneymarkets Unit

Hungary                        Kozponti Elszamolohaz es Ertektar (Budapest) Rt. (KELER)

Iceland                        Iceland Securities Depository Limited

India                          National Securities Depository Limited

                               Central Depository Services India Limited

                               Reserve Bank of India

Indonesia                      Bank Indonesia

                               PT Kustodian Sentral Efek Indonesia

Israel                         Tel Aviv Stock Exchange Clearing House Ltd. (TASE Clearinghouse)

Italy                          Monte Titoli S.p.A.

Ivory Coast                    Depositaire Central - Banque de Reglement

Jamaica                        Jamaica Central Securities Depository

Japan                          Japan Securities Depository Center (JASDEC)

                               Bank of Japan

Kazakhstan                     Central Depository of Securities

Kenya                          Central Bank of Kenya

Republic of Korea              Korea Securities Depository

Latvia                         Latvian Central Depository

Lebanon                        Custodian and Clearing Center of Financial Instruments for
                               Lebanon and the Middle East (Midclear) S.A.L.

                               Banque du Liban

Lithuania                      Central Securities Depository of Lithuania

Malaysia                       Malaysian Central Depository Sdn. Bhd.

                               Bank Negara Malaysia

COUNTRY                                                    DEPOSITORIES
Mali                           Depositaire Central - Banque de Reglement

Mauritius                      Central Depository and Settlement Co. Ltd.

                               Bank of Mauritius

Mexico                         S.D. Indeval, S.A. de C.V.

Morocco                        Maroclear

Netherlands                    Nederlands Centraal Instituut voor  Giraal Effectenverkeer B.V. (NECIGEF)

New Zealand                    New Zealand Central Securities Depository Limited

Niger                          Depositaire Central - Banque de Reglement

Nigeria                        Central Securities Clearing System Limited

Norway                         Verdipapirsentralen (Norwegian Central Securities Depository)

Oman                           Muscat Depository & Securities Registration Company, SAOC

Pakistan                       Central Depository Company of Pakistan Limited

                               State Bank of Pakistan

Palestine                      Clearing Depository and Settlement, a department
                               of the Palestine Stock Exchange

Peru                           Caja de Valores y Liquidaciones, Institucion
                               de Compensacion y Liquidacion de Valores S.A

Philippines                    Philippine Central Depository, Inc.

                               Registry of Scripless Securities (ROSS) of the Bureau of Treasury

Poland                         National Depository of Securities
                               (Krajowy Depozyt Papierow Wartosciowych SA)

                               Central Treasury Bills Registrar

Portugal                       INTERBOLSA - Sociedade Gestora de Sistemas de Liquidacao e de
                               Sistemas Centralizados de Valores Mobiliarios, S.A.

Qatar                          Central Clearing and Registration (CCR), a
                               department of the Doha Securities Market

Romania                        National Securities Clearing, Settlement and Depository Company

                               Bucharest Stock Exchange Registry Division

                               National Bank of Romania

Russia                         Vneshtorgbank, Bank for Foreign Trade of the Russian Federation

Senegal                        Depositaire Central - Banque de Reglement

COUNTRY                                                    DEPOSITORIES
Singapore                      Central Depository (Pte) Limited

                               Monetary Authority of Singapore

Slovak Republic                Stredisko cennych papierov SR, a.s.

                               National Bank of Slovakia

Slovenia                       KDD - Centralna klirinsko depotna druzba d.d.

South Africa                   Central Depository Limited

                               Share Transactions Totally Electronic (STRATE) Ltd.

Spain                          Servicio de Compensacion y Liquidacion de Valores, S.A.

                               Banco de Espana, Central de Anotaciones en Cuenta

Sri Lanka                      Central Depository System (Pvt) Limited

Sweden                         Vardepapperscentralen  VPC AB (Swedish Central Securities Depository)

Switzerland                    SegaIntersettle AG (SIS)

Taiwan - R.O.C.                Taiwan Securities Central Depository Co., Ltd.

Thailand                       Thailand Securities Depository Company Limited

Togo                           Depositaire Central - Banque de Reglement

Tunisia                        Societe Tunisienne Interprofessionelle pour la
                               Compensation et de Depots des Valeurs Mobilieres

Turkey                         Takas ve Saklama Bankasi A.S. (TAKASBANK)

                               Central Bank of Turkey

Ukraine                        National Bank of Ukraine

                               Mizhregionalny Fondovy Souz

United Arab Emirates           Clearing and Depository System, a department of theDubai Financial Market

Venezuela                      Banco Central de Venezuela

Zambia                         LuSE Central Shares Depository Limited

                               Bank of Zambia

PUBLICATION/TYPE OF INFORMATION                      BRIEF DESCRIPTION
-------------------------------                      -----------------
(SCHEDULED FREQUENCY)
THE GUIDE TO CUSTODY IN WORLD MARKETS     An overview of settlement and safekeeping procedures,
(hardcopy annually and regular            custody practices and foreign investor considerations for
website updates)                          the markets in which State Street offers custodial
                                          services.

GLOBAL CUSTODY NETWORK REVIEW             Information relating to Foreign Sub-Custodians in State
(annually)                                Street's Global Custody Network. The Review stands as an
                                          integral part of the materials that State Street provides
                                          to its U.S. mutual fund clients to assist them in
                                          complying with SEC Rule 17f-5. The Review also gives
                                          insight into State Street's market expansion and Foreign
                                          Sub-Custodian selection processes, as well as the
                                          procedures and controls used to monitor the financial
                                          condition and performance of our Foreign Sub-Custodian
                                          banks.

SECURITIES DEPOSITORY REVIEW              Custody risk analyses of the Foreign Securities
(annually)                                Depositories presently operating in Network markets. This
                                          publication is an integral part of the materials that
                                          State Street provides to its U.S. mutual fund clients to
                                          meet informational obligations created by SEC Rule 17f-7.

GLOBAL LEGAL SURVEY                       With respect to each market in which State Street offers
(annually)                                custodial services, opinions relating to whether local law
                                          restricts (i) access of a fund's independent public
                                          accountants to books and records of a Foreign
                                          Sub-Custodian or Foreign Securities System, (ii) a fund's
                                          ability to recover in the event of bankruptcy or
                                          insolvency of a Foreign Sub-Custodian or Foreign
                                          Securities System, (iii) a fund's ability to recover in
                                          the event of a loss by a Foreign Sub-Custodian or Foreign
                                          Securities System, and (iv) the ability of a foreign
                                          investor to convert cash and cash equivalents to U.S.
                                          dollars.

SUBCUSTODIAN AGREEMENTS                   Copies of the contracts that State Street has entered into
(annually)                                with each Foreign Sub-Custodian that maintains U.S. mutual
                                          fund assets in the markets in which State Street offers
                                          custodial services.

GLOBAL MARKET BULLETIN                    Information on changing settlement and custody conditions
(daily or as necessary)                   in markets where State Street offers custodial services.
                                          Includes changes in market and tax regulations, depository
                                          developments, dematerialization information, as well as
                                          other market changes that may impact State Street's
                                          clients.

FOREIGN CUSTODY ADVISORIES                For those markets where State Street offers custodial
(as necessary)                            services that exhibit special risks or infrastructures
                                          impacting custody, State Street issues market advisories
                                          to highlight those unique market factors which might
                                          impact our ability to offer recognized custody service
                                          levels.

MATERIAL CHANGE NOTICES                   Informational letters and accompanying materials
(presently on a quarterly                 confirming State Street's foreign custody arrangements,
basis or as otherwise necessary)          including a summary of material changes with Foreign
                                          Sub-Custodians that have occurred during the previous
                                          quarter. The notices also identify any material changes in
                                          the custodial risks associated with maintaining assets
                                          with Foreign Securities Depositories.

FUNDS TRANSFER OPERATING GUIDELINES

1. OBLIGATION OF THE SENDER: State Street Bank and Trust Company and affiliates ("SSB") is authorized to promptly debit Client's account(s) upon the receipt of a payment order in compliance with any of the Security Procedures chosen by the Client, from those offered on the attached selection form (and any updated selection forms hereafter executed by the Client), for funds transfers and in the amount of money that SSB has been instructed to transfer. SSB is hereby instructed to accept funds transfer instructions only via the delivery methods and Security Procedures indicated on the attached selection form (and any updated selection forms hereafter executed by the Client). The Client agrees that the Security Procedures are reasonable and adequate for its wire transfer transactions and agrees to be bound by any payment orders, amendments and cancellations, whether or not authorized, issued in its name and accepted by SSB after being confirmed by any of the selected Security Procedures. The Client also agrees to be bound by any other valid and authorized payment order accepted by SSB. SSB shall execute payment orders in compliance with the selected Security Procedures and with the Client's/Investment Manager's instructions on the execution date provided that such payment order is received by the customary deadline for processing such a request, unless the payment order specifies a later time. SSB will use reasonable efforts to execute on the execution date payment orders received after the customary deadline, but if it is unable to execute any such payment order on the execution date, such payment order will be deemed to have been received on the next business day.

2. SECURITY PROCEDURES: The Client acknowledges that the selected Security Procedures were selected by the Client from Security Procedures offered by SSB. The Client shall restrict access to confidential information relating to the Security Procedures to authorized persons as communicated in writing to SSB. The Client must notify SSB immediately if it has reason to believe unauthorized persons may have obtained access to such information or of any change in the Client's authorized personnel. SSB shall verify the authenticity of all instructions according to the selected Security Procedures.

3. ACCOUNT NUMBERS: SSB shall process all payment orders on the basis of the account number contained in the payment order. In the event of a discrepancy between any name indicated on the payment order and the account number, the account number shall take precedence and govern. Financial institutions that receive payment orders initiated by SSB at the instruction of the Client may also process payment orders on the basis of account numbers, regardless of any name included in the payment order. SSB shall be entitled to reasonably rely on any financial institution identification numbers included in any payment order, regardless of any financial institution name included in the payment order.

4. REJECTION: SSB reserves the right to decline to process or delay the processing of a payment order which (a) is in excess of the collected balance in the account to be charged at the time of SSB's receipt of such payment order;
(b) if initiating such payment order would cause SSB, in SSB's reasonable judgment, to exceed any applicable volume, aggregate dollar, network, time, credit or similar limits upon wire transfers; or (c) if SSB, in good faith, is unable to satisfy itself that the transaction has been properly authorized.

5. CANCELLATION OR AMENDMENT: SSB shall use reasonable efforts to act on all authorized requests to cancel or amend payment orders received in compliance with the selected Security Procedures provided that such requests are received in sufficient time to afford SSB a reasonable opportunity to act prior to executing the payment order. However, SSB assumes no liability if the request for amendment or cancellation cannot be satisfied by SSB's reasonable efforts.

6. ERRORS: SSB shall assume no responsibility hereunder for failure to detect any erroneous payment order provided that SSB complies with the payment order instructions as received and SSB complies with the selected Security Procedures. The Security Procedures are established for the purpose of authenticating payment orders only and not for the detection of errors in payment orders.

7. INTEREST AND LIABILITY LIMITS: SSB shall assume no responsibility for lost interest with respect to the refundable amount of any unauthorized payment order, unless SSB is notified of the unauthorized payment order within thirty
(30) days of notification by SSB of the acceptance of such payment order. In no event (including but not limited to failure to execute a payment order) shall SSB be liable for special, indirect or consequential damages, even if advised of the possibility of such damages.

8. AUTOMATED CLEARING HOUSE ("ACH") CREDIT ENTRIES/PROVISIONAL PAYMENTS:
When the Client initiates or receives ACH credit and debit entries pursuant to these Guidelines and the rules of the National Automated Clearing House Association and the Mid-America Payment Exchange or other similar body, SSB or its agent will act as an Originating Depository Financial Institution and/or Receiving Depository Financial Institution, as the case may be, with respect to such entries. Credits given with respect to an ACH credit entry are provisional until final settlement for such entry is received from the Federal Reserve Bank. If such final settlement is not received, the Client agrees to promptly refund the amount credited to the Client in connection with such entry, and the party making payment to the Client via such entry shall not be deemed to have paid the amount of the entry.

9. CONFIRMATIONS: Confirmation of SSB's execution of payment orders shall ordinarily be provided within 24 hours. Notice may be delivered through SSB's account statements, advices, information systems, or by facsimile or callback. The Client must report any objections to the execution of a payment order within 30 days of receipt of confirmation.

10. MISCELLANEOUS: SSB may use the Federal Reserve System Fedwire to execute payment orders, and any payment order carried in whole or in part through Fedwire will be subject to applicable Federal Reserve Board rules and regulations. SSB and the Client agree to cooperate to attempt to recover any funds erroneously paid to wrong parties, regardless of any fault of SSB or the Client, but the party responsible for the erroneous payment shall bear all costs and expenses incurred in trying to effect such recovery. These Guidelines may not be amended except by a written agreement signed by the parties.

11. LIABILITY ON FOREIGN ACCOUNTS: State Street shall not be required to repay any deposit made at a non-U.S. branch of State Street, or any deposit made with State Street and denominated in a non-U.S. dollar currency, if repayment of such deposit or the use of assets denominated in the non-U.S. dollar currency is prevented, prohibited or otherwise blocked due to: (a) an act of war, insurrection or civil strife; (b) any action by a non-U.S. government or instrumentality or authority asserting governmental, military or police power of any kind, whether such authority be recognized as a defacto or a dejure government, or by any entity, political or revolutionary movement or otherwise that usurps, supervenes or otherwise materially impairs the normal operation of civil authority; or (c) the closure of a non-U.S. branch of State Street in order to prevent, in the reasonable judgment of State Street, harm to the employees or property of State Street. The obligation to repay any such deposit shall not be transferred to and may not be enforced against any other branch of State Street.

The foregoing provisions constitute the disclosure required by Massachusetts General Laws, Chapter 167D, Section 36.

While State Street is not obligated to repay any deposit made at a non-U.S. branch or any deposit denominated in a non-U.S. currency during the period in which its repayment has been prevented, prohibited or otherwise blocked, State Street will repay such deposit when and if all circumstances preventing, prohibiting or otherwise blocking repayment cease to exist.

SECURITY PROCEDURES SELECTION FORM

Please select at least two of the funds transfer security procedures indicated below.

/ / SWIFT
SWIFT (Society for Worldwide Interbank Financial Telecommunication) is a cooperative society owned and operated by member financial institutions that provides telecommunication services for its membership. Participation is limited to securities brokers and dealers, clearing and depository institutions, recognized exchanges for securities, and investment management institutions. SWIFT provides a number of security features through encryption and authentication to protect against unauthorized access, loss or wrong delivery of messages, transmission errors, loss of confidentiality and fraudulent changes to messages. SELECTION OF THIS SECURITY PROCEDURE WOULD BE MOST APPROPRIATE FOR EXISTING SWIFT MEMBERS.

/ / REMOTE BATCH TRANSMISSION
Wire transfer instructions are delivered via Computer-to-Computer (CPU-CPU) data communications between the Client and/or its agent and SSB and/or its agent. Security procedures include encryption and/or the use of a test key by those individuals authorized as Automated Batch Verifiers or a callback procedure to those individuals. CLIENTS SELECTING THIS OPTION SHOULD HAVE AN EXISTING FACILITY FOR COMPLETING CPU-CPU TRANSMISSIONS. THIS DELIVERY MECHANISM IS TYPICALLY USED FOR HIGH-VOLUME BUSINESS SUCH AS SHAREHOLDER REDEMPTIONS AND DIVIDEND PAYMENTS.

/ / AUTOMATED CLEARING HOUSE (ACH)
SSB or its agent receives an automated transmission from a Client for the initiation of payment (credit) or collection (debit) transactions through the ACH network. The transactions contained on each transmission or tape must be authenticated by the Client. The transmission is sent from the Client's or its agent's system to SSB's or its agent's system with encryption.

/ / REPETITIVE WIRES
For situations where funds are transferred periodically from an existing authorized account to the same payee (destination bank and account number) and only the date and currency amount are variable, a repetitive wire may be implemented. Repetitive wires will be subject to a $10 million limit. If the payment order exceeds the $10 million limit, the instruction will be confirmed by Telephone Confirmation (Call Back) or Test Key prior to execution. Repetitive wire instructions must be reconfirmed annually. Clients may establish Repetitive Wires by following the agreed upon security procedures as described by Telephone Confirmation (Call Back) or Test Key. THIS ALTERNATIVE IS RECOMMENDED WHENEVER
FUNDS ARE FREQUENTLY TRANSFERRED BETWEEN THE SAME TWO ACCOUNTS. IF THIS OPTION IS SELECTED, CHOOSE EITHER TELEPHONE CONFIRMATION OR TEST KEY TO BE USED AS A SECONDARY PROCEDURE WHEN OVER $10 MILLION.

/ / STANDING INSTRUCTIONS
Funds are transferred by SSB to a counter party on the Client's established list of authorized counter parties. Only the date and the dollar amount are variable. Clients may establish Standby Instructions by following the agreed upon security procedures as described by Telephone Confirmation (Call Back) or Test Key. Additional paperwork will be required from insurance Clients using 1031 drawdowns. THIS OPTION IS USED FOR TRANSACTIONS THAT INCLUDE BUT ARE NOT LIMITED TO FOREIGN EXCHANGE CONTRACTS, TIME DEPOSITS AND TRI-PARTY REPURCHASE AGREEMENTS. IF THIS OPTION IS SELECTED, CHOOSE EITHER TELEPHONE CONFIRMATION OR TEST KEY TO BE USED AS A SECONDARY PROCEDURE WHEN OVER $10 MILLION.

/ / TELEPHONE CONFIRMATION (CALL BACK)
This procedure requires Clients to designate individuals as authorized initiators and authorized verifiers. SSB will verify that the instruction contains the signature of an authorized person and prior to execution of the payment order, will contact someone other than the originator at the Client's location to authenticate the instruction. SELECTION OF THIS ALTERNATIVE IS APPROPRIATE FOR CLIENTS WHO DO NOT HAVE THE CAPABILITY TO USE OTHER SECURITY PROCEDURES. PLEASE COMPLETE THE TELEPHONE CONFIRMATION INSTRUCTIONS ATTACHED AS A SCHEDULE HERETO.

/ / TEST KEY
Test Key confirmation will be used to verify all non-repetitive funds transfer instructions received via facsimile or phone. SSB will provide test keys if this option is chosen. SSB will verify that the instruction contains the signature of an authorized person and prior to execution of the payment order, will authenticate the test key provided with the corresponding test key at SSB.
SELECTION OF THIS ALTERNATIVE IS APPROPRIATE FOR CLIENTS WHO DO NOT HAVE THE CAPABILITY TO USE OTHER SECURITY PROCEDURES.

The individual signing below must be authorized to sign contract on behalf of the client. The execution of payment orders under the selected Security Procedures is governed by the Funds Transfer Operating Guidelines, which are incorporated by reference.

On behalf of the ING Pilgrim funds listed on Exhibit A to the Custody and Investment Accounting Agreement, as amended

CLIENT OPERATIONS CONTACT                 ALTERNATE CONTACT

Name                                      Name

Address                                   Address

City/State/Zip Code                       City/State/Zip Code

Telephone Number                          Telephone Number

Facsimile Number                          Facsimile Number

NAME                           TITLE                          SPECIMEN SIGNATURE
-----------------------        -----------------------        -----------------------

-----------------------        -----------------------        -----------------------

-----------------------        -----------------------        -----------------------

-----------------------        -----------------------        -----------------------

-----------------------        -----------------------        -----------------------

Authorized Verifiers (Please Type or Print) - Please provide a listing of your staff members who will be CALLED BACK to verify the initiation of repetitive wires of $10 million or more and all non-repetitive wire instructions:

NAME                           CALLBACK PHONE NUMBER          DOLLAR LIMITATION (IF ANY)
-----------------------        -----------------------        -----------------------

-----------------------        -----------------------        -----------------------

-----------------------        -----------------------        -----------------------

-----------------------        -----------------------        -----------------------

-----------------------        -----------------------        -----------------------

REMOTE ACCESS SERVICES ADDENDUM
TO CUSTODY AND INVESTMENT ACCOUNTING AGREEMENT BY AND BETWEEN

STATE STREET BANK AND TRUST COMPANY AND ING PILGRIM FUNDS DATED NOVEMBER 1, 2001

State Street has developed proprietary accounting and other systems, and has acquired licenses for other such systems, which it utilizes in conjunction with the services we provide to you (the "Systems"). In this regard, we maintain certain information in databases under our control and ownership that we make available on a remote basis to our customers (the "Remote Access Services").

THE SERVICES. This addendum shall govern use of all Systems that State Street may from time to time agree to provide you, the Customer, and your designated investment advisors, consultants or other third parties authorized by State Street who agree to abide by the terms of this Addendum ("Authorized Designees") in order to provide Remote Access Services for the purpose of obtaining and analyzing reports and information.

SECURITY PROCEDURES. You agree to comply, and to cause your Authorized Designees to comply, with remote access operating standards and procedures and with user identification or other password control requirements and other security procedures as may be issued from time to time by State Street for use of the Systems and access to the Remote Access Services. You agree to advise State Street immediately in the event that you learn or have reason to believe that any person to whom you have given access to the Systems or the Remote Access Services has violated or intends to violate the terms of this Addendum and you will cooperate with State Street in seeking injunctive or other equitable relief. You agree to discontinue use of the Systems and Remote Access Services, if requested, for any security reasons cited by State Street.

FEES. Fees and charges (if any) for the use of the Systems and the Remote Access Services and related payment terms shall be as set forth in the fee schedule in effect from time to time between the parties (the "Fee Schedule"). You shall be responsible for any tariffs, duties or taxes imposed or levied by any government or governmental agency by reason of the transactions contemplated by this Addendum, including, without limitation, federal, state and local taxes, use, value added and personal property taxes (other than income, franchise or similar taxes which may be imposed or assessed against State Street). Any claimed exemption from such tariffs, duties or taxes shall be supported by proper documentary evidence delivered to State Street.

PROPRIETARY INFORMATION/INJUNCTIVE RELIEF. The Systems and Remote Access Services and the databases, computer programs, screen formats, report formats, interactive design techniques, formulae, processes, systems, software, know-how, algorithms, programs, training aids, printed materials, methods, books, records, files, documentation and other information made available to you by State Street as part of the Remote Access Services and through the use of the Systems and all copyrights, patents, trade secrets and other proprietary rights of State Street and its relevant licensors related thereto are the exclusive, valuable and confidential property of State Street and its relevant licensors, as applicable (the "Proprietary Information").

You agree on behalf of yourself and your Authorized Designees to keep the Proprietary Information confidential and to limit access to your employees and Authorized Designees (under a similar duty of confidentiality) who require access to the Systems for the purposes intended. The foregoing shall not apply to Proprietary Information in the public domain or required by law

to be made public.

You agree to use the Remote Access Services only in connection with the proper purposes of this Addendum. You will not, and will cause your employees and Authorized Designees not to, (i) permit any third party to use the Systems or the Remote Access Services, (ii) sell, rent, license or otherwise use the Systems or the Remote Access Services in the operation of a service bureau or for any purpose other than as expressly authorized under this Addendum, (iii) use the Systems or the Remote Access Services for any fund, trust or other investment vehicle without the prior written consent of State Street, or (iv) allow or cause any information transmitted from State Street's databases, including data from third party sources, available through use of the Systems or the Remote Access Services, to be redistributed or retransmitted for other than use for or on behalf of yourself, as our Customer.

You agree that neither you nor your Authorized Designees will modify the Systems in any way, enhance or otherwise create derivative works based upon the Systems, nor will you or your Authorized Designees reverse engineer, decompile or otherwise attempt to secure the source code for all or any part of the Systems.

You acknowledge that the disclosure of any Proprietary Information, or of any information which at law or equity ought to remain confidential, will immediately give rise to continuing irreparable injury inadequately compensable in damages at law, and that State Street and its licensor, if applicable, shall be entitled to obtain immediate injunctive relief against the breach or threatened breach of any of the foregoing undertakings, in addition to any other legal remedies which may be available.

LIMITED WARRANTIES. State Street represents and warrants that it has the right to grant access to the Systems and to provide the Remote Access Services contemplated herein. Because of the nature of computer information technology, including but not limited to the use of the Internet, and the necessity of relying upon third-party sources, and data and pricing information obtained from third parties, the Systems and Remote Access Services are provided "AS IS", and you and your Authorized Designees shall be solely responsible for the investment decisions, results obtained, regulatory reports and statements produced using the Remote Access Services. State Street and its relevant licensors will not be liable to you or your Authorized Designees for any direct or indirect, special, incidental, punitive or consequential damages arising out of or in any way connected with the Systems or the Remote Access Services, nor shall either party be responsible for delays or nonperformance under this Addendum arising out of any cause or event beyond such party's control.

EXCEPT AS EXPRESSLY SET FORTH IN THIS ADDENDUM, STATE STREET FOR ITSELF AND ITS RELEVANT LICENSORS EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES CONCERNING THE SYSTEM AND THE SERVICES TO BE RENDERED HEREUNDER, WHETHER EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY WARRANTY OF MERCHANTIBILITY OR FITNESS FOR A PARTICULAR PURPOSE.

INFRINGEMENT. State Street will defend or, at our option, settle any claim or action brought against you to the extent that it is based upon an assertion that access to any proprietary System developed and owned by State Street or use of the Remote Access Services through any such proprietary System by you under this Addendum constitutes direct infringement of any United

States patent or copyright or misappropriation of a trade secret, provided that you notify State Street promptly in writing of any such claim or proceeding and cooperate with State Street in the defense of such claim or proceeding. Should any such proprietary System or the Remote Access Services accessed thereby or any part thereof become, or in State Street's opinion be likely to become, the subject of a claim of infringement or the like under the patent or copyright or trade secret laws of the United States, State Street shall have the right, at State Street's sole option, to (i) procure for you the right to continue using such System or Remote Access Services, (ii) replace or modify such System or Remote Access Services so that the System or the Remote Access Services becomes noninfringing, or (iii) terminate access to the Remote Access Services without further obligation.

TERMINATION. Either party may terminate access to the Remote Access Services (i) for any reason by giving the other party at least one-hundred and eighty (180) days' prior written notice in the case of notice of termination by State Street to you or thirty (30) days' notice in the case of notice from you to State Street of termination, or (ii) immediately for failure of the other party to comply with any material term and condition of the Addendum by giving the other party written notice of termination. In the event of termination, you will return to State Street all Proprietary Information in your possession or in the possession of your Authorized Designees. The foregoing provisions with respect to confidentiality and infringement will survive termination for a period of three (3) years.

MISCELLANEOUS. Except as provided in the next sentence, this Addendum constitutes our entire understanding with respect to access to the Systems and the Remote Access Services. If any State Street custody, accounting or other services agreement with you contains terms and conditions relating to computer systems or data access, this Addendum shall constitute an amendment and supplement to them, and in the event of any inconsistency the provisions providing the greatest benefit to State Street shall control. This Addendum cannot be modified or altered except in a writing duly executed by both of us and shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts.

CONFIRMED AND AGREED:

By:    /s/ Michael J. Roland
       ---------------------

Name:  Michael J. Roland
       -----------------

Title: Executive Vice President
       ------------------------

Date:  11-1-01

Exhibit 99.(j)(i)(1)

FIRST AMENDMENT TO CUSTODIAN AND
INVESTMENT ACCOUNTING AGREEMENT

THIS FIRST AMENDMENT TO CUSTODIAN AND INVESTMENT ACCOUNTING AGREEMENT (the "Amendment") is made and entered into as of March 1, 2002 by and between EACH OF THE FUNDS SET FORTH ON EXHIBIT A DATED NOVEMBER 1, 2001, attached to the Agreement and attached hereto for reference (each a "Client") and STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust company ("State Street").

WITNESSETH:

WHEREAS, Client and State Street are parties to that certain Custodian and Investment Accounting Agreement dated as of November 1, 2001 (the "Agreement"); and

WHEREAS, Client and State Street desire to amend and supplement the Agreement upon the following terms and conditions.

NOW THEREFORE, for and in consideration of the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Client and State Street hereby agree that the Agreement is amended and supplemented as follows:

1. Exhibit A shall be replaced in its entirety by the Exhibit A dated March 1, 2002 attached hereto and incorporated herein by this reference.

2. General Provisions. This Amendment will at all times and in all respects be construed, interpreted, and governed by the laws of The Commonwealth of Massachusetts, without giving effect to the conflict of laws provisions thereof. This Amendment may be executed in any number of counterparts, each constituting an original and all considered one and the same agreement. This Amendment is intended to modify and amend the Agreement and the terms of this Amendment and the Agreement are to be construed to be cumulative and not exclusive of each other. Except as provided herein, the Agreement is hereby ratified and confirmed and remains in full force and effect.

IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their duly authorized officers to be effective as of the date first above written.

STATE STREET BANK AND TRUST             ON BEHALF OF EACH OF THE FUNDS SET FORTH
COMPANY                                 ON EXHIBIT A ATTACHED HERETO

By: /s/ illegible                       By: /s/ Michael J. Roland
    -------------                           ---------------------
Name: illegible                         Name: Michael J. Roland
      ---------                               -----------------
Title: Senior Vice President            Title: Executive Vice President
       ---------------------                   ------------------------

Exhibit 99.(j)(i)(2)

                      ENTITY NAME                                      JURISDICTION
-------------------------------------------------------   --------------------------------------
ING EQUITY TRUST                                          Massachusetts Business Trust
     ING Biotechnology Fund
     ING Convertible Fund
     ING Equity and Bond Fund
     ING Financial Services Fund
     ING Growth Opportunities Fund
     ING Large Company Value Fund
     ING LargeCap Growth Fund
     ING MidCap Opportunities Fund
     ING MidCap Value Fund
     ING Principal Protection Fund
     ING Principal Protection Fund II
     ING Principal Protection Fund III
     ING Principal Protection Fund IV
     ING Principal Protection Fund V
     ING Principal Protection Fund VI*
     ING Real Estate Fund
     ING Research Enhanced Index Fund
     ING SmallCap Opportunities Fund
     ING SmallCap Value Fund
     ING Tax Efficient Equity Fund

                      ENTITY NAME                                      JURISDICTION
-------------------------------------------------------   --------------------------------------
ING FUNDS TRUST                                           Delaware Business Trust
     ING Classic Money Market Fund
     ING GNMA Income Fund
     ING High Yield Bond Fund
     ING High Yield Opportunity Fund
     ING Intermediate Bond Fund
     ING Lexington Money Market Trust
     ING Money Market Fund
     ING National Tax-Exempt Bond Fund
     ING Strategic Bond Fund
     ING National Tax-Exempt Money Market Fund

ING INVESTMENT FUNDS, INC.                                Maryland Corporation
     ING MagnaCap Fund

ING MAYFLOWER TRUST                                       Massachusetts Business Trust
     ING Growth + Value Fund

ING SENIOR INCOME FUND                                    Delaware Business Trust

ING PRIME RATE TRUST                                      Massachusetts Business Trust

ING VP NATURAL RESOURCES TRUST                            Massachusetts Business Trust

ING VARIABLE INSURANCE TRUST                              Delaware Business Trust
     ING VP High Yield Bond Fund

ING VARIABLE PRODUCTS TRUST                               Massachusetts Business Trust
     ING VP Convertible Portfolio
     ING VP Financial Services Portfolio
     ING VP Growth + Value Portfolio
     ING VP Growth Opportunities Portfolio
     ING VP High Yield Bond Portfolio
     ING VP Large Company Value Portfolio
     ING VP LargeCap Growth Portfolio
     ING VP MagnaCap Portfolio
     ING VP MidCap Opportunities Portfolio
     ING VP Research Enhanced Index Portfolio
     ING VP SmallCap Opportunities Portfolio

USLICO SERIES FUND                                        Massachusetts Business Trust
     Asset Allocation Portfolio
     Bond Portfolio
     Money Market Portfolio
     Stock Portfolio

Last Approved: 11/22/02

Exhibit 99.(j)(ii)

FT INTERACTIVE

FEE ALLOCATION AGREEMENT

FT INTERACTIVE FEE ALLOCATION AGREEMENT, made as of the 21st day of August 2003 (the "Agreement") is entered into by and among the ING funds listed on SCHEDULE A attached hereto (each a "Fund," collectively the "Funds") each acting on its own behalf, and on behalf of its series portfolios.

WHEREAS, the Board of Directors/Trustees of each Fund (the "Board") has authorized the retention of an independent fair value pricing information service, FT Interactive Data Corporation ("FT"), in accordance with the Funds' valuation procedures; and

WHEREAS, ING Investments, LLC ("ING Investments"), has entered into a Services Agreement with FT dated as of the 1st day of March 2000 on behalf of certain Customers, as such term is defined in the Services Agreement. (All capitalized terms, unless herein defined, will have the meaning set forth in the Services Agreement.) The FundRun Schedule of Data Services commencing on February 3, 2003, as amended, sets forth the cost of FT's fair valuation services ("FT Fees") in connection with the certain Customers including the Funds set forth on SCHEDULE A; and

WHEREAS, the Funds now desire to establish (i) the criteria by which the FT Fees shall be allocated among the Funds in connection with the fees set forth in the FundRun Schedule of Data Services; and (ii) the basis on which additional Funds may be added to the Agreement.

NOW, THEREFORE, IT IS HEREBY AGREED by and among the Funds as follows:

SECTION 1. ALLOCATION OF FT FEES

Each Fund shall pay on behalf of itself, and its series portfolios, a portion of the FT Fees based upon the following allocation:

Each Fund will pay a pro rata portion of the FT Fees based upon the percentage of each Fund's portfolios' net assets that are invested in equity securities traded on a foreign exchange as determined at each month-end.

SECTION 2. PAYMENT OF FT FEES

Each Fund will pay a portion of the FT Fees as specified in Section 1 above. Such amounts will be calculated by ING Fund Services, LLC and communicated to each Fund's Custodian. Payments shall be forwarded by each Fund to FT monthly as follows:

FT Interactive Data
P.O. Box 98616
Chicago, IL 60693

SECTION 3. ADDITIONAL FUNDS

(a) If ING Investments adds any additional Funds to the Services Agreement through an amendment to the FundRun Schedule of Data Services, in connection with FT's fair valuation of equity securities traded on a foreign exchange services, such Fund and its portfolios shall become subject to this Agreement immediately upon being added to the SCHEDULE A.

(b) Each additional Fund that becomes subject to this Agreement in accordance with Section 3(a) above shall pay a portion of the FT Fees as described in Section 1 above based on the percentage of such Fund's portfolios' net assets that are invested in equity securities traded on a foreign exchange as determined at the first month-end after such Fund becomes subject to this Agreement. Such allocation will be adjusted monthly thereafter.

SECTION 4. CONTINUATION AND TERMINATION

The Agreement shall become effective on the date first written above. It shall continue with respect to a Fund until such Fund is removed as a Customer from the FundRun Schedule of Data Services provided that such Fund's portion of the FT Fees have been paid for the period that the Fund utilized FT's services.

The Agreement shall terminate for all Funds upon termination of the Services Agreement and FundRun Schedule of Data Services provided that all FT Fees have been paid for the period that the Funds utilized FT's services.

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed by their duly authorized officers as of the date and year first above written.

ON BEHALF OF ALL FUNDS
SET FORTH ON SCHEDULE A

/s/ Michael J. Roland
---------------------
By:   Michael J. Roland*
      Executive Vice President

* Duly authorized to execute and deliver this Agreement on behalf of each Fund set forth on Schedule A to the Agreement.

Exhibit 99.(j)(ii)(1)

AMENDED SCHEDULE A

THE FUNDS

ING INVESTORS TRUST
Fund For Life Series(1)
ING AIM Mid Cap Growth Portfolio(1)
ING Alliance Mid Cap Growth Portfolio(1) ING American Funds Growth Portfolio
ING American Funds Growth-Income Portfolio ING American Funds International Portfolio ING Capital Guardian Large Cap Value Portfolio(1) ING Capital Guardian Managed Global Portfolio(1) ING Capital Guardian Small Cap Portfolio(1) ING Developing World Portfolio(1)
ING Eagle Asset Capital Appreciation Portfolio(1) ING Evergreen Health Sciences Portfolio
ING Evergreen Omega Portfolio
ING FMR(SM) Diversified Mid Cap Portfolio(1) ING Goldman Sachs Internet Tollkeeper(SM) Portfolio(1) ING Hard Assets Portfolio(1)
ING International Portfolio(1)
ING Janus Special Equity Portfolio(1)
ING Jennison Equity Opportunities Portfolio(1) ING JPMorgan Small Cap Equity Portfolio(1) ING Julius Baer Foreign Portfolio(1)
ING Legg Mason Value Portfolio(1)
ING Limited Maturity Bond Portfolio(1)
ING Liquid Assets Portfolio(1)
ING Marsico Growth Portfolio(1)
ING Mercury Focus Value Portfolio(1)
ING Mercury Fundamental Growth Portfolio(1) ING MFS Mid Cap Growth Portfolio(1)
ING MFS Research Portfolio(1)
ING MFS Total Return Portfolio(1)
ING PIMCO Core Bond Portfolio(1)
ING PIMCO High Yield Bond Portfolio(1)
ING Salomon Brothers All Cap Portfolio(1) ING Salomon Brothers Investors Portfolio(1) ING Stock Index Portfolio(1)
ING T. Rowe Price Capital Appreciation Portfolio(1) ING T. Rowe Price Equity Income Portfolio(1) ING UBS U.S. Balanced Portfolio(1)
ING Van Kampen Equity Growth Portfolio(1) ING Van Kampen Global Franchise Portfolio(1) ING Van Kampen Growth and Income Portfolio(1) ING Van Kampen Real Estate Portfolio(1)

ING EQUITY TRUST
ING Convertible Fund
ING Disciplined LargeCap Fund
ING Equity and Bond Fund
ING Financial Services Fund
ING Growth Opportunities Fund
ING LargeCap Growth Fund
ING LargeCap Value Fund
ING MidCap Opportunities Fund
ING MidCap Value Fund
ING Principal Protection Fund
ING Principal Protection Fund II
ING Principal Protection Fund III
ING Principal Protection Fund IV
ING Principal Protection Fund V
ING Principal Protection Fund VI
ING Principal Protection Fund VII
ING Principal Protection Fund VIII
ING Principal Protection Fund IX
ING Principal Protection Fund X
ING Principal Protection Fund XI
ING Real Estate Fund
ING SmallCap Opportunities Fund
ING SmallCap Value Fund
ING Tax Efficient Equity Fund

ING FUNDS TRUST
ING Classic Money Market Fund
ING GNMA Income Fund

(1) Under the terms of the Management Agreement between ING Investors Trust and Directed Services, Inc., the Fund is subject to a unified fee arrangement. Accordingly, the portion of FT Fees allocated to the Fund under the Agreement will be borne directly by Directed Services, Inc. as provided in the Management Agreement.

ING High Yield Bond Fund
ING High Yield Opportunity Fund
ING Intermediate Bond Fund
ING Lexington Money Market Trust
ING Money Market Fund
ING National Tax-Exempt Bond Fund

ING INVESTMENT FUNDS, INC.
ING MagnaCap Fund

ING MAYFLOWER TRUST
ING Growth + Value Fund
ING International Value Fund

ING MUTUAL FUNDS
ING Emerging Countries Fund
ING Foreign Fund
ING Global Equity Dividend Fund
ING Global Real Estate Fund
ING International Fund
ING International SmallCap Growth Fund
ING Precious Metals Fund
ING Russia Fund
ING Worldwide Growth Fund

ING PRIME RATE TRUST

ING SENIOR INCOME FUND

ING VARIABLE INSURANCE TRUST
ING GET U.S. Core Portfolio - Series 1
ING GET U.S. Core Portfolio - Series 2
ING GET U.S. Core Portfolio - Series 3
ING GET U.S. Core Portfolio - Series 4
ING GET U.S. Core Portfolio - Series 5
ING GET U.S. Core Portfolio - Series 6
ING GET U.S. Opportunity Portfolio - Series 1 ING GET U.S. Opportunity Portfolio - Series 2 ING VP Worldwide Growth Portfolio

ING VARIABLE PRODUCTS TRUST
ING VP Convertible Portfolio
ING VP Disciplined LargeCap Portfolio
ING VP Financial Services Portfolio
ING VP Growth + Value Portfolio
ING VP Growth Opportunities Portfolio
ING VP High Yield Bond Portfolio
ING VP International Value Portfolio
ING VP LargeCap Growth Portfolio
ING VP MagnaCap Portfolio
ING VP MidCap Opportunities Portfolio
ING VP Real Estate Portfolio
ING VP SmallCap Opportunities Portfolio

ING VP EMERGING MARKETS FUND, INC.

ING VP NATURAL RESOURCES TRUST

USLICO SERIES FUND
The Asset Allocation Portfolio
The Bond Portfolio
The Money Market Portfolio
The Stock Portfolio

ING PARTNERS, INC.
ING Alger Aggressive Growth Portfolio
ING Alger Capital Appreciation Portfolio ING Alger Growth Portfolio
ING American Century Small Cap Value Portfolio ING Baron Small Cap Growth Portfolio
ING DSI Enhanced Index Portfolio
ING Goldman Sachs(R) Capital Growth Portfolio ING Goldman Sachs(R) Core Equity Portfolio ING JPMorgan Fleming International Portfolio ING JPMorgan Mid Cap Value Portfolio
ING MFS Capital Opportunities Portfolio
ING MFS Global Growth Portfolio
ING MFS Research Equity Portfolio
ING OpCap Balanced Value Portfolio
ING PIMCO Total Return Portfolio
ING Salomon Brothers Aggressive Growth Portfolio ING Salomon Brothers Fundamental Value Portfolio ING Salomon Brothers Investors Value Portfolio ING T. Rowe Price Growth Equity Portfolio ING UBS Tactical Asset Allocation Portfolio

ING Van Kampen Comstock Portfolio

ING VP BALANCED PORTFOLIO, INC.

ING STRATEGIC ALLOCATION PORTFOLIOS, INC.
ING VP Strategic Allocation Balanced Portfolio ING VP Strategic Allocation Growth Portfolio ING VP Strategic Allocation Income Portfolio

ING GET FUND
ING GET Fund - Series E
ING GET Fund - Series G
ING GET Fund - Series H
ING GET Fund - Series I
ING GET Fund - Series J
ING GET Fund - Series K
ING GET Fund - Series L
ING GET Fund - Series M
ING GET Fund - Series N
ING GET Fund - Series P
ING GET Fund - Series Q
ING GET Fund - Series R
ING GET Fund - Series S
ING GET Fund - Series T
ING GET Fund - Series U
ING GET Fund - Series V

ING VP BOND PORTFOLIO

ING VP MONEY MARKET PORTFOLIO

ING VARIABLE FUNDS
ING VP Growth and Income Portfolio

ING VARIABLE PORTFOLIOS, INC.
ING VP Global Science and Technology Portfolio ING VP Growth Portfolio
ING VP Index Plus LargeCap Portfolio
ING VP Index Plus MidCap Portfolio
ING VP Index Plus SmallCap Portfolio
ING VP International Equity Portfolio
ING VP Small Company Portfolio
ING VP Value Opportunity Portfolio

ING SERIES FUND, INC.
Brokerage Cash Reserves
ING Aeltus Money Market Fund
ING Balanced Fund
ING Bond Fund
ING Classic Principal Protection Fund I
ING Classic Principal Protection Fund II ING Classic Principal Protection Fund III ING Classic Principal Protection Fund IV ING Equity Income Fund
ING Global Science and Technology Fund
ING Government Fund
ING Growth Fund
ING Index Plus LargeCap Fund
ING Index Plus MidCap Fund
ING Index Plus Protection Fund
ING Index Plus SmallCap Fund
ING International Growth Fund
ING Small Company Fund
ING Strategic Allocation Balanced Fund
ING Strategic Allocation Growth Fund
ING Strategic Allocation Income Fund
ING Value Opportunity Fund

Exhibit 99.(j)(iii)

PROXY AGENT
FEE ALLOCATION AGREEMENT

PROXY VOTING FEE ALLOCATION AGREEMENT, made as of the 21st day of August, 2003 (the "Agreement"), is entered into by and among ING Investments, LLC ("ING Investments"), Directed Services, Inc. ("DSI"), ING Life Insurance and Annuity Company ("ILIAC") and the ING funds listed on SCHEDULE A attached hereto (each a "Fund," and collectively the "Funds"), each acting on its own behalf, and on behalf of its series portfolios.

WHEREAS, each Fund is an investment company registered under the Investment Company Act of 1940, as amended (the "1940 Act"), the series of which are managed by ING Investments, DSI or ILIAC (each an "Adviser," and collectively the "Advisers"); and

WHEREAS, the Board of Directors/Trustees of each Fund (the "Board") has adopted procedures and guidelines to govern the voting of proxies relating to each Fund's portfolio securities; and

WHEREAS, the Board has authorized the retention of an independent proxy voting service, Institutional Shareholder Services, Inc. ("ISS"), to assist in the voting of Fund proxies through the provision of vote analysis, implementation and recordkeeping and disclosure services; and

WHEREAS, the Advisers for the Funds have entered into a Master Services Agreement with ISS dated as of the 1st day of July, 2003 which sets forth the fees ("ISS Fees") for the ISS services ("Services") set forth on Addendum No. (ING Funds-ADN.US & Global Voting Agent Service.8/1/2003-I) to the Master Services Agreement in connection with Fund proxies that are to be paid in advance of receipt of such Services; and

WHEREAS, the Advisers and the Funds now desire to establish (i) the criteria by which the ISS Fees shall be allocated among the Advisers and the Funds in connection with the Services to be provided in connection with the Master Services Agreement; and (ii) the basis on which additional Advisers or Funds for which the Advisers may act as investment manager may be added to the Agreement.

NOW, THEREFORE, IT IS HEREBY AGREED by and among the Advisers and the Funds as follows:

1. ALLOCATION OF ISS FEES ATTRIBUTABLE TO PROXY ADVISORY SERVICES.

The Advisers and each Fund, on behalf of itself and its series portfolios, shall pay a portion of the ISS Fees attributable to Proxy Advisory Services based upon the following allocation:

A. U.S. Proxy Advisory Service

The Advisers will pay fifty percent (50%) of the ISS Fees attributable

to U.S. Proxy Advisory Services. The amount will be allocated among the Advisers based upon Fund assets under management that are invested in U.S. equity positions, as of June 30, 2003, and will be adjusted semi-annually. Each Fund's Net Assets as of June 30, 2003 is listed on SCHEDULE B attached hereto.

Each Fund will pay a pro rata portion of the remaining fifty percent (50%) of the ISS Fees attributable to U.S. Proxy Advisory Services based upon the percentage of each Fund's net assets that are invested in U.S. equity positions as of June 30, 2003. Such allocations will be adjusted semi-annually based on the percentage of each Fund's net assets that are invested in U.S. equity positions.

B. Global Proxy Advisory Service

The Advisers will pay fifty percent (50%) of the ISS Fees attributable to Global Proxy Advisory Services. The amount will be allocated among the Advisers based on Fund assets under management that are invested in equity securities traded on a foreign exchange as of June 30, 2003, and will be adjusted semi-annually.

Each Fund will pay a pro rata portion of the remaining fifty percent (50%) of the ISS Fees attributable to Global Proxy Advisory Services based upon the percentage of each Fund's net assets that are invested in equity securities traded on a foreign exchange as of June 30, 2003. Such allocations will be adjusted semi-annually based on the percentage of each Fund's net assets that are invested in equity securities traded on a foreign exchange.

2. ALLOCATION OF ISS FEES ATTRIBUTABLE TO VOTING AGENT SERVICE.

The Advisers and each Fund, on behalf of itself, and its series portfolios, shall pay a portion of the ISS Fees attributable to Voting Agent Services based upon the following allocation:

A. Per Ballot

The Advisers shall pay fifty percent (50%) of the ISS Fees attributable to the Per Ballot portion of the Voting Agent Services. The amount will be allocated among the Advisers based on Fund assets under management that are invested in U.S. and foreign equity positions as of June 30, 2003, and will be adjusted semi-annually.

Each Fund, on behalf of itself, and its series portfolios, shall pay a pro rata portion of fifty percent (50%) of the ISS Fees attributable to the Per Ballot portion of the Voting Agent Services based upon the percentage of each Fund's net assets that are invested in U.S. and foreign equity positions as of June 30, 2003. Such allocations will be adjusted semi-annually based on the percentage of each Fund's net assets that are invested in equity

positions.

B. Per Account

The amount will be allocated among the Funds equally based upon the number of Funds or their series portfolios as of June 30, 2003. Such allocations will be adjusted semi-annually based on the number of Funds or their series portfolios.

3. ALLOCATION OF ISS FEES ATTRIBUTABLE TO VOTE DISCLOSURE SERVICES.

Each Fund shall pay on behalf of itself, and its series portfolios, the ISS Fees attributable to Vote Disclosure Services based up on the following allocation:

The amount will be allocated on a pro rata basis based upon the percentage of each Fund's net assets that are invested in equity positions as of June 30, 2003. Such allocations will be adjusted semi-annually based on the percentage of each Fund's net assets that are invested in equity positions.

4. ALLOCATION OF ISS FEES ATTRIBUTABLE TO CUSTOM POLICY SERVICE.

Each Fund shall pay on behalf of itself, and its series portfolios, the ISS Fees attributable to Custom Policy Service fees based upon the following allocation:

The amount will be allocated equally based upon the number of Funds or their series portfolios as of June 30, 2003. Such allocations will be adjusted semi-annually based on the number of Funds or their series portfolios.

5. PAYMENTS.

Each Adviser and Fund will pay a portion of the ISS Fees as specified in Sections 1, 2, 3 and 4 above. Such amounts will be calculated by and communicated to each Fund's Adviser and/or custodian as applicable by ING Funds Services, LLC. Payments shall be forwarded quarterly by each Adviser and/or custodian to ISS as follows:

Routing Number: 052001633
A/C # 03935295204
Bank of America
Rockville MD

6. ADDITIONAL FUNDS.

(a) If any Advisers are added to the Master Services Agreement, such Adviser shall become subject to this Agreement immediately upon being added to the Master Services Agreement.

(b) If the Advisers add any additional Funds to the Master Services Agreement, such Fund shall become subject to this Agreement

immediately upon being added to the Master Services Agreement.

(c) Each additional Adviser that becomes subject to this Agreement in accordance with Section 6(a) above shall pay a portion of the ISS Fees as described in Sections 1 and 2 above, as of the date such Adviser becomes subject to this Agreement. Such allocation will be adjusted semi-annually as described in Sections 1 and 2.

(d) Each additional Fund that becomes subject to this Agreement in accordance with Section 6(b) above shall pay a portion of the ISS Fees as described in Sections 1, 2, 3 and 4 above based on the Fund's net assets or number of Funds, as applicable, as of the date such Fund becomes subject to this Agreement. Such allocation will be adjusted semi-annually as described in Sections 1, 2, 3 and 4.

7. CONTINUATION AND TERMINATION.

The Agreement shall become effective on the date first written above. It shall continue with respect to an Adviser or a Fund until such Adviser or Fund is removed from the Master Services Agreement provided that such Adviser or Fund's portion of the ISS Fees has been paid for the period that the Adviser or Fund utilized the Services.

The Agreement shall terminate for all Advisers and Funds upon termination of the Master Services Agreement provided that all ISS Fees have been paid for the period that the Advisers and Funds utilized the Services.

8. COUNTERPART

This Agreement may be executed simultaneously in two or more counterparts, each of which taken together will constitute one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed by their duly authorized officers as of the date and year first above written.

ON BEHALF OF: ALL FUNDS SET FORTH ON SCHEDULE A

/s/ James M. Hennessy
---------------------
By:     James M. Hennessy
        President
        Duly authorized to execute
        and deliver this Agreement
        on behalf of each Fund set
        forth on Schedule A to the
        Agreement.

ING INVESTMENTS, LLC

/s/ Michael J. Roland
---------------------
By:     Michael J. Roland
        Executive Vice President

DIRECTED SERVICES, INC.

/s/ David L. Jacobson
---------------------
By:     David L. Jacobson
        Executive Vice President

ING LIFE INSURANCE AND ANNUITY COMPANY

/s/ Laurie M. Tillinghast
-------------------------
By:     Laurie M. Tillinghast
        Vice President

Exhibit 99.(j)(iii)(1)

AMENDED SCHEDULE A

THE FUNDS

ING INVESTORS TRUST
Fund For Life Series(1)
ING AIM Mid Cap Growth Portfolio(1)
ING Alliance Mid Cap Growth Portfolio(1) ING Capital Guardian Large Cap Value Portfolio(1) ING Capital Guardian Managed Global Portfolio(1) ING Capital Guardian Small Cap Portfolio(1) ING Developing World Portfolio(1)
ING Eagle Asset Capital Appreciation Portfolio(1) ING Evergreen Health Sciences Portfolio
ING Evergreen Omega Portfolio
ING FMR(SM) Diversified Mid Cap Portfolio(1) ING Goldman Sachs Internet Tollkeeper(SM) Portfolio(1) ING Hard Assets Portfolio(1)
ING International Portfolio(1)
ING Janus Special Equity Portfolio(1)
ING Jennison Equity Opportunities Portfolio(1) ING JPMorgan Small Cap Equity Portfolio(1) ING Julius Baer Foreign Portfolio(1)
ING Legg Mason Value Portfolio(1)
ING Lifestyle Aggressive Growth Portfolio ING Lifestyle Growth Portfolio
ING Lifestyle Moderate Growth Portfolio
ING Lifestyle Moderate Portfolio
ING Limited Maturity Bond Portfolio(1)
ING Liquid Assets Portfolio(1)
ING Marsico Growth Portfolio(1)
ING Mercury Focus Value Portfolio(1)
ING Mercury Fundamental Growth Portfolio(1) ING MFS Mid Cap Growth Portfolio(1)
ING MFS Research Portfolio(1)
ING MFS Total Return Portfolio(1)
ING PIMCO Core Bond Portfolio(1)
ING PIMCO High Yield Portfolio(1)
ING Salomon Brothers All Cap Portfolio(1) ING Salomon Brothers Investors Portfolio(1) ING Stock Index Portfolio(1)
ING T. Rowe Price Capital Appreciation Portfolio(1) ING T. Rowe Price Equity Income Portfolio(1) ING UBS U.S. Balanced Portfolio(1)
ING Van Kampen Equity Growth Portfolio(1) ING Van Kampen Global Franchise Portfolio(1) ING Van Kampen Growth and Income Portfolio(1) ING Van Kampen Real Estate Portfolio(1)

ING EQUITY TRUST
ING Convertible Fund
ING Disciplined LargeCap Fund
ING Equity and Bond Fund
ING Financial Services Fund
ING Growth Opportunities Fund
ING LargeCap Growth Fund
ING LargeCap Value Fund
ING MidCap Opportunities Fund
ING MidCap Value Fund
ING Principal Protection Fund
ING Principal Protection Fund II
ING Principal Protection Fund III
ING Principal Protection Fund IV
ING Principal Protection Fund V
ING Principal Protection Fund VI
ING Principal Protection Fund VII
ING Principal Protection Fund VIII
ING Principal Protection Fund IX
ING Principal Protection Fund X
ING Principal Protection Fund XI
ING Real Estate Fund
ING SmallCap Opportunities Fund
ING SmallCap Value Fund
ING Tax Efficient Equity Fund

ING FUNDS TRUST
ING Classic Money Market Fund

(1) Under the terms of the Management Agreement between ING Investors Trust and Directed Services, Inc., the Fund is subject to a unified fee arrangement. Accordingly, the portion of FT Fees allocated to the Fund under the Agreement will be borne directly by Directed Services, Inc. as provided in the Management Agreement.

ING GNMA Income Fund
ING High Yield Bond Fund
ING High Yield Opportunity Fund
ING Intermediate Bond Fund
ING Lexington Money Market Trust
ING Money Market Fund
ING National Tax-Exempt Bond Fund

ING INVESTMENT FUNDS, INC.
ING MagnaCap Fund

ING MAYFLOWER TRUST
ING Growth + Value Fund
ING International Value Fund

ING MUTUAL FUNDS
ING Emerging Countries Fund
ING Foreign Fund
ING Global Equity Dividend Fund
ING Global Real Estate Fund
ING International Fund
ING International SmallCap Growth Fund
ING Precious Metals Fund
ING Russia Fund
ING Worldwide Growth Fund

ING PRIME RATE TRUST

ING SENIOR INCOME FUND

ING VARIABLE INSURANCE TRUST
ING GET U.S. Core Portfolio - Series 1
ING GET U.S. Core Portfolio - Series 2
ING GET U.S. Core Portfolio - Series 3
ING GET U.S. Core Portfolio - Series 4
ING GET U.S. Core Portfolio - Series 5
ING GET U.S. Core Portfolio - Series 6
ING GET U.S. Opportunity Portfolio - Series 1 ING GET U.S. Opportunity Portfolio - Series 2 ING VP Worldwide Growth Portfolio

ING VARIABLE PRODUCTS TRUST
ING VP Convertible Portfolio
ING VP Disciplined LargeCap Portfolio
ING VP Financial Services Portfolio
ING VP Growth + Value Portfolio
ING VP Growth Opportunities Portfolio
ING VP High Yield Bond Portfolio
ING VP International Value Portfolio
ING VP LargeCap Growth Portfolio
ING VP MagnaCap Portfolio
ING VP MidCap Opportunities Portfolio
ING VP Real Estate Portfolio
ING VP SmallCap Opportunities Portfolio

ING VP EMERGING MARKETS FUND, INC.

ING VP NATURAL RESOURCES TRUST

USLICO SERIES FUND
The Asset Allocation Portfolio
The Bond Portfolio
The Money Market Portfolio
The Stock Portfolio

ING PARTNERS, INC.
ING Alger Aggressive Growth Portfolio
ING Alger Capital Appreciation Portfolio ING Alger Growth Portfolio
ING American Century Small Cap Value Portfolio ING Baron Small Cap Growth Portfolio
ING DSI Enhanced Index Portfolio
ING Goldman Sachs(R) Capital Growth Portfolio ING Goldman Sachs(R) Core Equity Portfolio ING JPMorgan Fleming International Portfolio ING JPMorgan Mid Cap Value Portfolio
ING MFS Capital Opportunities Portfolio
ING MFS Global Growth Portfolio
ING MFS Research Equity Portfolio
ING OpCap Balanced Value Portfolio
ING PIMCO Total Return Portfolio
ING Salomon Brothers Aggressive Growth Portfolio ING Salomon Brothers Fundamental Value Portfolio

(1) Under the terms of the Management Agreement between ING Investors Trust and Directed Services, Inc., the Fund is subject to a unified fee arrangement. Accordingly, the portion of FT Fees allocated to the Fund under the Agreement will be borne directly by Directed Services, Inc. as provided in the Management Agreement.

ING Salomon Brothers Investors Value Portfolio ING T. Rowe Price Growth Equity Portfolio ING UBS Tactical Asset Allocation Portfolio ING Van Kampen Comstock Portfolio

ING VP BALANCED PORTFOLIO, INC.

ING STRATEGIC ALLOCATION PORTFOLIOS, INC.
ING VP Strategic Allocation Balanced Portfolio ING VP Strategic Allocation Growth Portfolio ING VP Strategic Allocation Income Portfolio

ING GET FUND
ING GET Fund - Series E
ING GET Fund - Series G
ING GET Fund - Series H
ING GET Fund - Series I
ING GET Fund - Series J
ING GET Fund - Series K
ING GET Fund - Series L
ING GET Fund - Series M
ING GET Fund - Series N
ING GET Fund - Series P
ING GET Fund - Series Q
ING GET Fund - Series R
ING GET Fund - Series S
ING GET Fund - Series T
ING GET Fund - Series U
ING GET Fund - Series V

ING VP BOND PORTFOLIO

ING VP MONEY MARKET PORTFOLIO

ING VARIABLE FUNDS
ING VP Growth and Income Portfolio

ING VARIABLE PORTFOLIOS, INC.
ING VP Global Science and Technology Portfolio ING VP Growth Portfolio
ING VP Index Plus LargeCap Portfolio
ING VP Index Plus MidCap Portfolio
ING VP Index Plus SmallCap Portfolio
ING VP International Equity Portfolio
ING VP Small Company Portfolio
ING VP Value Opportunity Portfolio

ING SERIES FUND, INC.
Brokerage Cash Reserves
ING Aeltus Money Market Fund
ING Balanced Fund
ING Bond Fund
ING Classic Principal Protection Fund I
ING Classic Principal Protection Fund II ING Classic Principal Protection Fund III ING Classic Principal Protection Fund IV ING Equity Income Fund
ING Global Science and Technology Fund
ING Government Fund
ING Growth Fund
ING Index Plus LargeCap Fund
ING Index Plus MidCap Fund
ING Index Plus Protection Fund
ING Index Plus SmallCap Fund
ING International Growth Fund
ING Small Company Fund
ING Strategic Allocation Balanced Fund
ING Strategic Allocation Growth Fund
ING Strategic Allocation Income Fund
ING Value Opportunity Fund

(1) Under the terms of the Management Agreement between ING Investors Trust and Directed Services, Inc., the Fund is subject to a unified fee arrangement. Accordingly, the portion of FT Fees allocated to the Fund under the Agreement will be borne directly by Directed Services, Inc. as provided in the Management Agreement.

Exhibit 99.(j)(iv)

ALLOCATION AGREEMENT

FIDELITY BOND

THIS AGREEMENT made as of this 24th day of May, 2002 by and among any of the Funds listed on Schedule A and any separate classes thereof and all future investment companies and any separate classes thereof (the "Funds"), which are named insureds under a joint liability policy as described below and for which ING Investments, LLC acts as investment manager are entered into under the following circumstances:

A. Section 17(g) of the Investment Company Act of 1940, as amended ("the 1940 Act") provides that the Securities and Exchange Commission ("SEC") is authorized to require that directors, officers and employees of registered investment companies be covered under a liability, errors and omissions insurance policy, and the SEC has promulgated rules and regulations dealing with this subject ("Rule 17g-1");

B. The Funds are named as joint insureds under the terms of a joint insurance policy ("Policy") which insures against illegal profit or gain, intentional wrongful acts, libel, slander, defamation, ERISA claims, insider trading, as well as other coverage as outlined in the Policy, by the directors, officers and employees;

C. A majority of those members of the Board of Directors/Trustees of each of the Funds, who are not "interested persons" as defined by Section 2(a)(19) of the 1940 Act, have given due consideration to all factors relevant to the form, amount and apportionment of premiums and recoveries under such Policy and the Board of Directors/Trustees of each Fund has approved the term and amount of the Policy, the portion of the premium payable by that party, and the manner in which recovery on the Policy, if any, shall be shared by and among the parties thereto; and

D. The Funds now desire to enter into the agreement required by Rule 17g-1 of the 1940 Act to establish the manner in which recovery under the Policy, if any, shall be shared.

NOW, THEREFORE, IT IS HEREBY AGREED by and among the parties as follows:

1. Payment of Premiums.

Each Fund shall pay a portion of the premium due under the Policy derived by multiplying the premium by a fraction, (i) the denominator of which is the total net assets of all the Funds combined and (ii) the numerator of which is the total net assets of each of the Funds individually. The net assets of the classes are deemed to be represented by the net assets of their respective funds. Each of the Funds agrees that the appropriateness of the allocation of said premium will be determined no less often than annually. No adjustment of the allocation of said premium will be implemented without approval of the Boards of each of the Funds.

2. Allocation of Recoveries

(a) If more than one of the parties hereto is damaged in a single loss for which recovery is received under the policy, each such party shall receive that portion of the recovery which represents the loss sustained by that party, unless the recovery is inadequate to fully indemnify such party sustaining loss.

(b) If the recovery is inadequate to fully indemnify each such party sustaining a loss, the recovery shall be allocated among such parties as follows:

(i) Each Party sustaining a loss shall be allocated an amount equal to the lesser of its actual loss or the minimum amount of policy which would be required to be maintained by such party under a single insured policy (determined as of the time of loss) in accordance with the provisions of Rule 17g-1.

(ii) The remaining portion of the proceeds shall be allocated to each party sustaining a loss not fully covered by the allocation under subparagraph (i) in the proportion that each such party's last payment of premium bears to the sum of the last such premium payments of all such parties. If such allocation would result in any party which had sustained a loss receiving a portion of the recovery in excess of the loss actually sustained, such excess portion shall be allocated among the other parties whose losses would not be fully indemnified. The allocation shall bear the same proportion as each such party's last payment of premium bears to the sum of the last premium payments of all parties entitled to receive a share of the excess. Any allocation in excess of a loss actually sustained by any such party shall be reallocated in the same manner.

3. OBLIGATION TO MAINTAIN MINIMUM COVERAGE.

Each of the Funds represents and warrants to each of the other parties hereto that the minimum amount of coverage required of it by Rule 17g-1 as of the date hereof is as reflected in the schedule attached hereto. Each of the Funds agrees that it will determine, no less than at the end of each calendar quarter, the minimum amount of coverage which would be required of it by Rule 17g-1 if a determination with respect to the adequacy of the coverage were currently being made. In the event that the total amount of the minimum coverage thus determined exceeds the amount of coverage of the then effective policy, the Boards of each of the Funds will be notified and will determine whether it is necessary or appropriate to increase the total amount of coverage of the policy to an amount not less than the total amount of such minimums, or to secure such excess coverage for one or more of the parties hereto, which, when added to the total coverage of the policy, will equal an amount of such minimums. Unless a Fund elects to terminate this Agreement (pursuant to Paragraph 4) and its participation in a joint-insured policy, each Fund agrees to pay its fair portion of the new or additional premium (taking into account all of the then existing circumstances).

4. CONTINUATION AND TERMINATION. This Agreement shall become effective on the date first written above, subject to the condition that the Fund's Board of Directors/Trustees, including a majority of those Directors/Trustees who are not interested persons (as such term is defined in the 1940 Act) of the Manager, shall have approved this Agreement. This Agreement shall supersede all prior agreements relating to an allocation of premium on any joint insured policy and shall apply to the present liability policy coverage and any renewal or replacement thereof. It shall continue until terminated by any party hereto upon the giving of not less than sixty (60) days notice to the other parties hereto in writing.

5. AMENDMENTS. No provision of this Agreement may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought. A written amendment of this Agreement is effective upon the approval of the Board of Directors/Trustees and the Manager.

IN WITNESS WHEREOF, the parties hereto have caused these presents to be duly executed by their duly authorized officers as of the date first above written.

On Behalf of: All ING Funds Listed on Schedule A

By:/s/ Michael J. Roland
   ---------------------
        Michael J. Roland
        Executive Vice President

Exhibit 99.(j)(iv)(1)

AMENDED SCHEDULE A

WITH RESPECT TO THE

ALLOCATION AGREEMENT - BLANKET BOND

FUNDS
Fund For Life Series(1)
ING AIM Mid Cap Growth Portfolio(1)
ING Alliance Mid Cap Growth Portfolio(1) ING American Funds Growth Portfolio
ING American Funds Growth-Income Portfolio ING American Funds International Portfolio ING Capital Guardian Large Cap Value Portfolio(1) ING Capital Guardian Managed Global Portfolio(1) ING Capital Guardian Small Cap Portfolio(1) ING Classic Money Market Fund
ING Convertible Fund
ING Developing World Portfolio(1)
ING Disciplined LargeCap Fund
ING Eagle Asset Capital Appreciation Portfolio(1) ING Emerging Countries Fund
ING Equity and Bond Fund
ING Evergreen Health Sciences Portfolio
ING Evergreen Omega Portfolio
ING Financial Services Fund
ING FMR(SM) Diversified Mid Cap Portfolio(1) ING Foreign Fund
ING GET U.S. Core Portfolio - Series 1
ING GET U.S. Core Portfolio - Series 2
ING GET U.S. Core Portfolio - Series 3
ING GET U.S. Core Portfolio - Series 4
ING GET U.S. Core Portfolio - Series 5
ING GET U.S. Core Portfolio - Series 6
ING GET U.S. Core Select Portfolio - Series 1 ING GET U.S. Core Select Portfolio - Series 2 ING GET U.S. Opportunity Portfolio - Series 1 ING GET U.S. Opportunity Portfolio - Series 2 ING Global Equity Dividend Fund
ING Global Real Estate Fund
ING GNMA Income Fund
ING Goldman Sachs Internet Tollkeeper(SM) Portfolio(1) ING Growth + Value Fund
ING Growth Opportunities Fund
ING Hard Assets Portfolio(1)
ING High Yield Bond Fund
ING High Yield Opportunity Fund
ING Intermediate Bond Fund
ING International Fund
ING International Portfolio(1)
ING International SmallCap Growth Fund
ING International Value Fund
ING Janus Special Equity Portfolio(1)
ING Jennison Equity Opportunities Portfolio(1) ING JPMorgan Small Cap Equity Portfolio(1) ING Julius Baer Foreign Portfolio(1)
ING LargeCap Growth Fund
ING LargeCap Value Fund
ING Legg Mason Value Portfolio(1)
ING Lexington Money Market Trust
ING Lifestyle Aggressive Growth Portfolio ING Lifestyle Growth Portfolio
ING Lifestyle Moderate Growth Portfolio
ING Lifestyle Moderate Portfolio
ING Limited Maturity Bond Portfolio(1)
ING Liquid Assets Portfolio(1)
ING MagnaCap Fund
ING Marsico Growth Portfolio(1)
ING Mercury Focus Value Portfolio(1)
ING Mercury Fundamental Growth Portfolio(1) ING MFS Mid Cap Growth Portfolio(1)
ING MFS Research Portfolio(1)
ING MFS Total Return Portfolio(1)

(1) Under the terms of the Management Agreement between ING Investors Trust and Directed Services, Inc., the Fund is subject to a unified fee arrangement. Accordingly, the portion of Blanket Bond premium allocated to the Fund under the Agreement will be borne directly by Directed Services, Inc. as provided in the Management Agreement.

ING MidCap Opportunities Fund
ING MidCap Value Fund
ING Money Market Fund
ING National Tax-Exempt Bond Fund
ING PIMCO Core Bond Portfolio(1)
ING PIMCO High Yield Portfolio(1)
ING Precious Metals Fund
ING PRIME RATE TRUST
ING Principal Protection Fund
ING Principal Protection Fund II
ING Principal Protection Fund III
ING Principal Protection Fund IV
ING Principal Protection Fund V
ING Principal Protection Fund VI
ING Principal Protection Fund VII
ING Principal Protection Fund VIII
ING Principal Protection Fund IX
ING Principal Protection Fund X
ING Principal Protection Fund XI
ING Real Estate Fund
ING Russia Fund
ING Salomon Brothers All Cap Portfolio(1) ING Salomon Brothers Investors Portfolio(1)
ING SENIOR INCOME FUND
ING SmallCap Opportunities Fund
ING SmallCap Value Fund
ING Stock Index Portfolio(1)
ING T. Rowe Price Capital Appreciation Portfolio(1) ING T. Rowe Price Equity Income Portfolio(1) ING Tax Efficient Equity Fund
ING UBS U.S. Balanced Portfolio(1)
ING Van Kampen Equity Growth Portfolio(1) ING Van Kampen Global Franchise Portfolio(1) ING Van Kampen Growth and Income Portfolio(1) ING Van Kampen Real Estate Portfolio(1)
ING VP Convertible Portfolio
ING VP Disciplined LargeCap Portfolio
ING VP EMERGING MARKETS FUND, INC.
ING VP Financial Services Portfolio
ING VP Growth + Value Portfolio
ING VP Growth Opportunities Portfolio
ING VP High Yield Bond Portfolio
ING VP International Value Portfolio
ING VP LargeCap Growth Portfolio
ING VP MagnaCap Portfolio
ING VP MidCap Opportunities Portfolio
ING VP NATURAL RESOURCES TRUST
ING VP Real Estate Portfolio
ING VP SmallCap Opportunities Portfolio
ING VP Worldwide Growth Portfolio
ING Worldwide Growth Fund
The Asset Allocation Portfolio
The Bond Portfolio
The Money Market Portfolio
The Stock Portfolio

(1) Under the terms of the Management Agreement between ING Investors Trust and Directed Services, Inc., the Fund is subject to a unified fee arrangement. Accordingly, the portion of Blanket Bond premium allocated to the Fund under the Agreement will be borne directly by Directed Services, Inc. as provided in the Management Agreement.

Exhibit 99.(j)(v)

ALLOCATION AGREEMENT

DIRECTORS & OFFICERS LIABILITY

THIS AGREEMENT made as of this 24th day of May, 2002 by and among the Funds listed on Schedule A and any separate classes thereof and all future investment companies and any separate classes thereof (the "Funds"), which are named insureds under a joint liability policy as described below and for which ING Investments, LLC acts as investment manager are entered into under the following circumstances:

A. Section 17d-1(d)(7) of the Investment Company Act of 1940, as amended ("the 1940 Act") provides that the Securities and Exchange Commission ("SEC") is authorized to require that directors, officers and employees of registered investment companies be covered under a liability, errors and omissions insurance policy, and the SEC has promulgated rules and regulations dealing with this subject ("Rule 17d-1(d)(7)");

B. The Funds are named as joint insureds under the terms of a joint insurance policy ("Policy") which insures against illegal profit or gain, intentional wrongful acts, libel, slander, defamation, ERISA claims, insider trading, as well as other coverage as outlined in the Policy, by the directors, officers and employees;

C. A majority of those members of the Board of Directors/Trustees of each of the Funds, who are not "interested persons" as defined by Section 2(a)(19) of the 1940 Act, have given due consideration to all factors relevant to the form, amount and apportionment of premiums and recoveries under such Policy and the Board of Directors/Trustees of each Fund has approved the term and amount of the Policy, the portion of the premium payable by that party, and the manner in which recovery on the Policy, if any, shall be shared by and among the parties thereto; and

D. The Funds now desire to enter into the agreement required by Rule 17d-1(d)(7) of the 1940 Act to establish the manner in which recovery under the Policy, if any, shall be shared.

NOW, THEREFORE, IT IS HEREBY AGREED by and among the parties as follows:

1. PAYMENT OF PREMIUMS.

Each Fund shall pay a portion of the premium due under the Policy derived by multiplying the premium by a fraction, (i) the denominator of which is the total net assets of all the Funds combined and (ii) the numerator of which is the total net assets of each of the Funds individually. The net assets of the classes are deemed to be represented by the net assets of their respective funds. Each of the Funds agrees that the appropriateness of the allocation of said premium will be determined no less often than annually. No adjustment of the allocation of said premium will be implemented without approval of the Boards of each of the Funds.

2. ALLOCATION OF RECOVERIES

(a) If more than one of the parties hereto is damaged in a single loss for which recovery is received under the policy, each such party shall receive that portion of the recovery which represents the loss sustained by that party, unless the recovery is inadequate to fully indemnify such party sustaining loss.

(b) If the recovery is inadequate to fully indemnify each such party sustaining a loss, the recovery shall be allocated among such parties as follows:

(i) Each Party sustaining a loss shall be allocated an amount equal to the lesser of its actual loss or the minimum amount of policy which would be required to be maintained by such party under a single insured policy (determined as of the time of loss) in accordance with the provisions of Rule 17d-1(d)(7).

(ii) The remaining portion of the proceeds shall be allocated to each party sustaining a loss not fully covered by the allocation under subparagraph (i) in the proportion that each such party's last payment of premium bears to the sum of the last such premium payments of all such parties. If such allocation would result in any party which had sustained a loss receiving a portion of the recovery in excess of the loss actually sustained, such excess portion shall be allocated among the other parties whose losses would not be fully indemnified. The allocation shall bear the same proportion as each such party's last payment of premium bears to the sum of the last premium payments of all parties entitled to receive a share of the excess. Any allocation in excess of a loss actually sustained by any such party shall be reallocated in the same manner.

3. OBLIGATION TO MAINTAIN MINIMUM COVERAGE.

Each of the Funds represents and warrants to each of the other parties hereto that the minimum amount of coverage required of it by Rule 17d-1(d)(7) as of the date hereof is as reflected in the schedule attached hereto. Each of the Funds agrees that it will determine, no less

than at the end of each calendar quarter, the minimum amount of coverage which would be required of it by Rule 17d-1(d)(7) if a determination with respect to the adequacy of the coverage were currently being made. In the event that the total amount of the minimum coverage thus determined exceeds the amount of coverage of the then effective policy, the Boards of each of the Funds will be notified and will determine whether it is necessary or appropriate to increase the total amount of coverage of the policy to an amount not less than the total amount of such minimums, or to secure such excess coverage for one or more of the parties hereto, which, when added to the total coverage of the policy, will equal an amount of such minimums. Unless a Fund elects to terminate this Agreement (pursuant to Paragraph 4) and its participation in a joint-insured policy, each Fund agrees to pay its fair portion of the new or additional premium (taking into account all of the then existing circumstances).

4. CONTINUATION AND TERMINATION. This Agreement shall become effective on the date first written above, subject to the condition that the Fund's Board of Directors/Trustees, including a majority of those Directors/Trustees who are not interested persons (as such term is defined in the 1940 Act) of the Manager, shall have approved this Agreement. This Agreement shall supersede all prior agreements relating to an allocation of premium on any joint insured policy and shall apply to the present liability policy coverage and any renewal or replacement thereof. It shall continue until terminated by any party hereto upon the giving of not less than sixty (60) days notice to the other parties hereto in writing.

5. AMENDMENTS. No provision of this Agreement may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought. A written amendment of this Agreement is effective upon the approval of the Board of Directors/Trustees and the Manager.

IN WITNESS WHEREOF, the parties hereto have caused these presents to be duly executed by their duly authorized officers as of the date first above written.

On Behalf of: All ING Funds Listed on Schedule A

By:/s/ Michael J. Roland
   ---------------------
Name:  Michael J. Roland
Title: Executive Vice President

Exhibit 99.(j)(v)(1)

AMENDED SCHEDULE A

WITH RESPECT TO THE

ALLOCATION AGREEMENT - DIRECTORS & OFFICERS LIABILITY

FUNDS
Fund For Life Series(1)
ING AIM Mid Cap Growth Portfolio(1)
ING Alliance Mid Cap Growth Portfolio(1) ING American Funds Growth Portfolio
ING American Funds Growth-Income Portfolio ING American Funds International Portfolio ING Capital Guardian Large Cap Value Portfolio(1) ING Capital Guardian Managed Global Portfolio(1) ING Capital Guardian Small Cap Portfolio(1) ING Classic Money Market Fund
ING Convertible Fund
ING Developing World Portfolio(1)
ING Disciplined LargeCap Fund
ING Eagle Asset Capital Appreciation Portfolio(1) ING Emerging Countries Fund
ING Equity and Bond Fund
ING Evergreen Health Sciences Portfolio
ING Evergreen Omega Portfolio
ING Financial Services Fund
ING FMR(SM) Diversified Mid Cap Portfolio(1) ING Foreign Fund
ING GET U.S. Core Portfolio - Series 1
ING GET U.S. Core Portfolio - Series 2
ING GET U.S. Core Portfolio - Series 3
ING GET U.S. Core Portfolio - Series 4
ING GET U.S. Core Portfolio - Series 5
ING GET U.S. Core Portfolio - Series 6
ING GET U.S. Core Select Portfolio - Series 1 ING GET U.S. Core Select Portfolio - Series 2 ING GET U.S. Opportunity Portfolio - Series 1 ING GET U.S. Opportunity Portfolio - Series 2 ING Global Equity Dividend Fund
ING Global Real Estate Fund
ING GNMA Income Fund
ING Goldman Sachs Internet Tollkeeper(SM) Portfolio(1) ING Growth + Value Fund

ING Growth Opportunities Fund
ING Hard Assets Portfolio(1)
ING High Yield Bond Fund
ING High Yield Opportunity Fund
ING Intermediate Bond Fund
ING International Fund
ING International Portfolio(1)
ING International SmallCap Growth Fund
ING International Value Fund
ING Janus Special Equity Portfolio(1)
ING Jennison Equity Opportunities Portfolio(1) ING JPMorgan Small Cap Equity Portfolio(1) ING Julius Baer Foreign Portfolio(1)
ING LargeCap Growth Fund
ING LargeCap Value Fund
ING Legg Mason Value Portfolio(1)
ING Lexington Money Market Trust
ING Lifestyle Aggressive Growth Portfolio ING Lifestyle Growth Portfolio
ING Lifestyle Moderate Growth Portfolio
ING Lifestyle Moderate Portfolio
ING Limited Maturity Bond Portfolio
ING Liquid Assets Portfolio(1)
ING MagnaCap Fund
ING Marsico Growth Portfolio(1)
ING Mercury Focus Value Portfolio(1)
ING Mercury Fundamental Growth Portfolio(1) ING MFS Mid Cap Growth Portfolio(1)
ING MFS Research Portfolio(1)
ING MFS Total Return Portfolio(1)
ING MidCap Opportunities Fund
ING MidCap Value Fund
ING Money Market Fund
ING National Tax-Exempt Bond Fund

(1) Under the terms of the Management Agreement between ING Investors Trust and Directed Services, Inc., the Fund is subject to a unified fee arrangement. Accordingly, the portion of D&O premium allocated to the Fund under the Agreement will be borne directly by Directed Services, Inc. as provided in the Management Agreement.

ING PIMCO Core Bond Portfolio(1)
ING PIMCO High Yield Portfolio(1)
ING Precious Metals Fund
ING PRIME RATE TRUST
ING Principal Protection Fund
ING Principal Protection Fund II
ING Principal Protection Fund III
ING Principal Protection Fund IV
ING Principal Protection Fund V
ING Principal Protection Fund VI
ING Principal Protection Fund VII
ING Principal Protection Fund VIII
ING Principal Protection Fund IX
ING Principal Protection Fund X
ING Principal Protection Fund XI
ING Real Estate Fund
ING Russia Fund
ING Salomon Brothers All Cap Portfolio(1) ING Salomon Brothers Investors Portfolio(1)
ING SENIOR INCOME FUND
ING SmallCap Opportunities Fund
ING SmallCap Value Fund
ING Stock Index Portfolio(1)
ING T. Rowe Price Capital Appreciation Portfolio(1) ING T. Rowe Price Equity Income Portfolio(1) ING Tax Efficient Equity Fund
ING UBS U.S. Balanced Portfolio(1)
ING Van Kampen Equity Growth Portfolio(1) ING Van Kampen Global Franchise Portfolio(1) ING Van Kampen Growth and Income Portfolio(1) ING Van Kampen Real Estate Portfolio
ING VP Convertible Portfolio
ING VP Disciplined LargeCap Portfolio
ING VP EMERGING MARKETS FUND, INC.
ING VP Financial Services Portfolio
ING VP Growth + Value Portfolio
ING VP Growth Opportunities Portfolio
ING VP High Yield Bond Portfolio
ING VP International Value Portfolio
ING VP LargeCap Growth Portfolio
ING VP MagnaCap Portfolio
ING VP MidCap Opportunities Portfolio
ING VP NATURAL RESOURCES TRUST
ING VP Real Estate Portfolio
ING VP SmallCap Opportunities Portfolio
ING VP Worldwide Growth Portfolio
ING Worldwide Growth Fund
The Asset Allocation Portfolio
The Bond Portfolio
The Money Market Portfolio
The Stock Portfolio

(1) Under the terms of the Management Agreement between ING Investors Trust and Directed Services, Inc., the Fund is subject to a unified fee arrangement. Accordingly, the portion of D&O premium allocated to the Fund under the Agreement will be borne directly by Directed Services, Inc. as provided in the Management Agreement.

Exhibit 99.(j)(vi)

AGENCY AGREEMENT

THIS AGREEMENT made the 30th day of November, 2000, by and between each of the following registered investment companies (1) LEXINGTON MONEY MARKET TRUST, a Massachusetts business trust; (2) PILGRIM EQUITY TRUST, a Massachusetts business trust, currently consisting of Pilgrim Index Plus Protection Fund and Pilgrim MidCap Opportunities Fund; (3) PILGRIM GROWTH OPPORTUNITIES FUND, a Massachusetts business trust; (4) PILGRIM MAYFLOWER TRUST, a Massachusetts business trust, consisting of Pilgrim Growth + Value Fund, Pilgrim International Value Fund and Pilgrim Research Enhanced Index Fund; (5) PILGRIM NATURAL RESOURCES TRUST, a Massachusetts business trust; (6) PILGRIM PRIME RATE TRUST, a Massachusetts business trust; (7) PILGRIM SMALLCAP OPPORTUNITIES FUND, a Massachusetts business trust; (8) PILGRIM VARIABLE PRODUCTS TRUST, a Massachusetts business trust, consisting of Pilgrim VP Convertible Portfolio, Pilgrim VP Emerging Countries Portfolio, Pilgrim VP Financial Services Portfolio, Pilgrim VP Growth & Income Portfolio, Pilgrim VP Growth + Value Portfolio, Pilgrim VP Growth Opportunities Portfolio, Pilgrim VP High Yield Bond Portfolio, Pilgrim VP International Portfolio, Pilgrim VP International SmallCap Growth Portfolio, Pilgrim VP International Value Portfolio, Pilgrim VP LargeCap Growth Portfolio, Pilgrim VP MagnaCap Portfolio, Pilgrim VP MidCap Opportunities Portfolio, Pilgrim VP Research Enhanced Index Portfolio, Pilgrim VP SmallCap Opportunities Portfolio and Pilgrim VP Worldwide Growth Portfolio; (9) PILGRIM FUNDS TRUST, a Delaware business trust, consisting of Pilgrim European Equity Fund, Pilgrim Global Communications Fund, Pilgrim Global Information Technology Fund, Pilgrim Intermediate Bond Fund, Pilgrim Internet Fund, ING Pilgrim Money Market Fund, Pilgrim National Tax-Exempt

Bond Fund and Pilgrim Tax Efficient Equity Fund; (10) PILGRIM MUTUAL FUNDS, a Delaware business trust, consisting of Pilgrim Balanced Fund, Pilgrim Convertible Fund, Pilgrim Emerging Countries Fund, Pilgrim High Yield Fund II, Pilgrim International Core Growth Fund, Pilgrim International SmallCap Growth Fund, Pilgrim LargeCap Growth Fund, Pilgrim MidCap Growth Fund, Pilgrim Money Market Fund, Pilgrim SmallCap Growth Fund, Pilgrim Strategic Income Fund and Pilgrim Worldwide Growth Fund; (11) PILGRIM SENIOR INCOME FUND, a Delaware business trust; (12) PILGRIM ADVISORY FUNDS, INC., a Maryland corporation, consisting of Pilgrim Asia-Pacific Equity Fund; (13) PILGRIM BANK AND THRIFT FUND, INC., a Maryland corporation; (14) PILGRIM EMERGNG MARKETS FUND, INC., a Maryland corporation; (15) PILGRIM GNMA INCOME FUND, INC., a Maryland corporation; (16) PILGRIM PRECIOUS METALS FUND, INC., a Maryland corporation;
(17) PILGRIM GROWTH AND INCOME FUND, INC., a Maryland corporation; (18) PILGRIM INVESTMENT FUNDS, INC., a Maryland corporation, consisting of Pilgrim High Yield Fund and Pilgrim MagnaCap Fund; (19) PILGRIM INTERNATIONAL FUND, INC., a Maryland corporation, and (20) PILGRIM RUSSIA FUND, INC., a Maryland corporation, and any other registered investment companies set forth on Exhibit A, attached hereto, as amended from time to time (each such registered investment company (1-20) and any investment company added to Exhibit A in the future) hereinafter jointly and severally referred to as "Fund") each having its principal place of business at 7337 E. Doubletree Ranch Road, Scottsdale, Arizona, 85258-2034, and DST SYSTEMS, INC., a corporation organized and existing under the laws of the State of Delaware, having its principal place of business at 333 West 11th Street, 5th Floor, Kansas City, Missouri 64105 ("DST"):

WITNESSETH:

WHEREAS, Fund desires to appoint DST as Transfer Agent and Dividend Disbursing Agent, and DST desires to accept such appointment;

NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties hereto agree as follows:

1. DOCUMENTS TO BE FILED WITH APPOINTMENT.

In connection with the appointment of DST as Transfer Agent and Dividend Disbursing Agent for Fund, there will be filed with DST the following documents:

A. A certified copy of the resolutions of the Board of Directors or Trustees of Fund appointing DST as Transfer Agent and Dividend Disbursing Agent, approving the form of this Agreement, and designating certain persons to sign stock certificates, if any, and give written instructions and requests on behalf of Fund;

B. A certified copy of the Articles of Incorporation or Declaration of Trust of Fund and all amendments thereto;

C. A certified copy of the Bylaws of Fund;

D. Copies of Registration Statements and amendments thereto, filed with the Securities and Exchange Commission;

E. Specimens of all forms of outstanding stock certificates, in the forms approved by the Board of Directors or Trustees of Fund, with a certificate of the Secretary of Fund, as to such approval;

F. Specimens of the signatures of the officers of Fund authorized to sign stock certificates and individuals authorized to sign written instructions and requests;

G. An opinion of counsel for Fund with respect to:

(1) Fund's organization and existence under the laws of its state of organization,

(2) The status of all shares of stock of Fund covered by the appointment under the Securities Act of 1933, as amended, and any other applicable federal or state statute, and

(3) That all issued shares are, and all unissued shares will be, when issued, validly issued, fully paid and nonassessable.

2. CERTAIN REPRESENTATIONS AND WARRANTIES OF DST.

DST represents and warrants to Fund that:

A. It is a corporation duly organized and existing and in good standing under the laws of Delaware.

B. It is duly qualified to carry on its business in the State of Missouri.

C. It is empowered under applicable laws and by its Articles of Incorporation and bylaws to enter into and perform the services contemplated in this Agreement.

D. It is registered as a transfer agent to the extent required under the Securities Exchange Act of 1934.

E. All requisite corporate proceedings have been taken to authorize it to enter into and perform this Agreement.

F. It has and will continue to have and maintain the necessary facilities, equipment and personnel to perform its duties and obligations under this Agreement.

3. CERTAIN REPRESENTATIONS AND WARRANTIES OF FUND.

Fund represents and warrants to DST that:

A. It is duly organized as heretofore described and existing and in good standing under the laws of the State/Commonwealth of organization set forth after its name in the opening paragraph or, if it does not appear in such opening paragraph, on Exhibit A.

B. It is an open-end or closed-end management investment company registered under the Investment Company Act of 1940, as amended.

C. A registration statement under the Securities Act of 1933 has been filed and will be effective with respect to all shares of Fund being offered for sale.

D. All requisite steps have been and will continue to be taken to register Fund's shares for sale in all applicable states and such registration will be effective at all times shares are offered for sale in such state.

E. Fund is empowered under applicable laws and by its charter or declaration and bylaws to enter into and perform this Agreement.

4. SCOPE OF APPOINTMENT.

A. Subject to the conditions set forth in this Agreement, Fund hereby appoints DST as Transfer Agent and Dividend Disbursing Agent.

B. DST hereby accepts such appointment and agrees that it will act as Fund's Transfer Agent and Dividend Disbursing Agent. DST agrees that it will also act as agent in connection with Fund's periodic withdrawal payment accounts and other open accounts or similar plans for shareholders, if any.

C. Fund agrees to use its best efforts to deliver to DST in Kansas City, Missouri, as soon as they are available, all of its shareholder account records.

D. DST, utilizing DST's computerized data processing systems for securityholder accounting for open-end funds (the "TA2000(R) System"), and subject to the provisions of Sections 19, 20 and 21 of this Agreement, will perform the following services as transfer, dividend disbursing and shareholders' servicing agent for Fund, and as agent of Fund for shareholder accounts thereof, in a timely manner: issuing

(including countersigning), transferring and canceling share certificates; maintaining all shareholder accounts; providing transaction journals; preparing shareholder meeting lists (one annually at no charge, lists for additional meetings will be charged for), mailing proxies and proxy materials, receiving and tabulating proxies, certifying the shareholder votes in Fund (all proxy activities are subject to proxy fees and reimbursable fees); mailing shareholder reports and prospectuses supplied to DST by Fund or its agents; withholding, as required by Federal law and as directed by Fund, taxes on nonresident alien and foreign corporation accounts, for pension and deferred income, backup withholding or other instances agreed upon by Fund and DST; disbursing income dividends and capital gains distributions to shareholders, preparing, filing and mailing U.S. Treasury Department Forms 1099, 1042, 1042S and backup withholding as required for all shareholders and as directed by Fund; preparing and mailing confirmation forms to shareholders and dealers, as instructed, for all purchases and liquidations (not applicable to closed-end funds except for transfers into or out of a shareholders' account) of shares of Fund and other confirmable transactions in shareholders' accounts; recording reinvestment of dividends and distributions in shares of Fund; providing or making available on-line daily and monthly reports as provided by the TA2000 System and as requested by Fund or its management company; maintaining those records necessary to carry out DST's duties hereunder, including all information reasonably required by Fund to account for all transactions (non-valued in closed-end funds) in Fund shares, calculating the appropriate sales charge with respect to each purchase of Fund shares as set forth in the prospectus for Fund (not applicable to closed-end funds); solely for open-end funds: determining the portion of each sales charge payable to the

dealer participating in a sale in accordance with schedules delivered to DST by Fund's principal underwriter or distributor (hereinafter "principal underwriter") from time to time, disbursing dealer commissions collected to such dealers, determining the portion of each sales charge payable to such principal underwriter and disbursing such commissions to the principal underwriter; receiving correspondence pertaining to any former, existing or new shareholder account, processing such correspondence for proper recordkeeping, and responding promptly to shareholder correspondence; mailing to dealers confirmations of wire order trades (not applicable to closed-end funds); mailing copies of shareholder statements to shareholders and registered representatives of dealers in accordance with Fund's instructions; and, solely in the case of open-end funds, processing, generally on the date of receipt, purchases or redemptions or instructions to settle any mail or wire order purchase or redemption (or in the case of closed-end funds, effecting transfer of certificates) received in proper order as set forth in the prospectus and DST's Procedures, as hereinafter defined, rejecting promptly any requests not received in proper order (as defined by Fund or its agents or DST's Procedures), and, solely in the case of open-end funds, causing exchanges of shares to be executed in accordance with Fund's instructions, the applicable prospectus, DST's Procedures and the general exchange privilege application.

E. At the request of an Authorized Person (a person identified as such on Exhibit D, attached hereto and incorporated herein for reference), DST shall use reasonable efforts to provide the services set forth in this Agreement in connection with transactions (i) on behalf of retirement plans and participants in retirement plans and transactions ordered by brokers as part of a "no transaction fee" program ("NTF"),

the processing of which transactions require DST to use methods and procedures other than those usually employed by DST to perform shareholder servicing agent services, (ii) involving the provision of information to DST after the commencement of the nightly processing cycle of TA2000 System or (iii) which require more manual intervention by DST, either in the entry of data or in the modification or amendment of reports generated by the TA2000 System than is usually required by non-retirement plan, non-NTF and pre-nightly transactions (the "Exception Services").

F. Fund shall have the right to add new series to the TA2000 System upon at least thirty (30) days' prior written notice to DST provided that the requirements of the new series are generally consistent with services then being provided by DST under this Agreement and any new series shall be provided services in accordance with the Fee Schedules then attached to the existing Agency Agreements between DST and the various Funds of Pilgrim Capital Corporation, which agreements pre-date this Agency Agreement. Rates or charges for additional series shall be as set forth in Exhibit B, as hereinafter defined, for the remainder of the contract term except as such series use functions, features or characteristics for which DST has imposed an additional charge as part of its standard pricing schedule. In the latter event, rates and charges shall be in accordance with DST's then-standard pricing schedule.

G. DST shall use reasonable efforts to provide, reasonably promptly under the circumstances, the same services with respect to any new, additional functions or features or any changes or improvements to existing functions or features as provided for in Fund's instructions, prospectus or application as amended from time to time, for Fund provided (i) DST is advised in advance by Fund of any changes

therein, (ii) the TA2000 System and the mode of operations utilized by DST as then constituted support such additional functions and features, and (iii) any new or increased services to be provided by DST or commenced to be used by Fund in addition to those currently used at execution hereof or any new products or functionality added to the TA2000 System shall be provided in accordance with the Fee Schedules then attached to the existing Agency Agreements between DST and the various Funds of Pilgrim Capital Corporation, which agreements pre-date this Agency Agreement, or, if not referenced in such fee schedules, at mutually agreed to fees and charges. If any addition to, improvement of or change in the features and functions currently provided by the TA2000 System or the operations as requested by Fund requires an enhancement or modification to the TA2000 System or to operations as presently conducted by DST, DST shall not be liable therefor until such modification or enhancement is, if DST agrees to develop or institute it, developed (at Fund's expense) and installed on the TA2000 System or a new mode of operation is instituted. If any new, additional function or feature or change or improvement to existing functions or features or new service or mode of operation measurably increases DST's cost of performing the services required hereunder at the current level of service, DST shall advise Fund of the amount of such increase and if Fund elects to utilize such function, feature or service, DST shall be entitled to increase its fees by the amount of the increase in costs. In no event shall DST be responsible for or liable to provide any additional function, feature, improvement or change in method of operation until it has consented thereto in writing.

5. LIMIT OF AUTHORITY.

Unless otherwise expressly limited by the resolution of appointment or by subsequent action by Fund, the appointment of DST as Transfer Agent will be construed to cover the full amount of authorized stock of the class or classes for which DST is appointed as the same will, from time to time, be constituted, and any subsequent increases in such authorized amount.

In case of such increase Fund will file with DST:

A. If the appointment of DST was theretofore expressly limited, a certified copy of a resolution of Fund's Board of Directors or Trustees, as applicable, increasing the authority of DST;

B. A certified copy of the amendment to Fund's Articles of Incorporation or Declaration of Trust, as applicable, authorizing the increase of stock;

C. A certified copy of the order or consent of each governmental or regulatory authority required by law to consent to the issuance of the increased stock, and an opinion of counsel that the order or consent of no other governmental or regulatory authority is required;

D. Opinion of counsel for Fund stating:

(1) The status of the additional shares of stock of Fund under the Securities Act of 1933, as amended, and any other applicable federal or state statute and that said shares may be legally issued; and

(2) That the additional shares are, or when issued will be, validly issued, fully paid and nonassessable by Fund.

6. COMPENSATION AND EXPENSES.

A. In consideration for its services hereunder as Transfer Agent and Dividend Disbursing Agent, Fund will pay to DST from time to time a reasonable compensation for all services rendered as Agent, and also all its reasonable out-of-pocket expenses, charges, counsel fees, and other disbursements (Compensation and Expenses) incurred in connection with the agency. Such compensation is set forth in a separate schedule to be agreed to, from time to time, by Fund and DST, the current copy of which is attached hereto as Exhibit B and incorporated herein by reference. If Fund has not paid such Compensation and Expenses to DST within a reasonable time, DST may, after written notice to Fund, charge against any monies held under this Agreement, the amount of any Compensation and/or Expenses for which it shall be entitled to reimbursement under this Agreement.

B. Fund also agrees promptly to reimburse DST for all reasonable reimbursable expenses or disbursements incurred by DST in connection with the performance of services under this Agreement including, but not limited to, expenses for postage, express delivery services, freight charges, envelopes, checks, drafts, forms (continuous or otherwise), specially requested reports and statements, telephone calls, telegrams, stationery supplies, counsel fees, outside printing and mailing firms (including DST Output SRI, Inc.), magnetic tapes, reels or cartridges (if sent to a Fund or to third party at Fund's request) and magnetic tape handling charges, off-site record storage, media for storage of records (e.g., microfilm, microfiche, optical platters, computer tapes), computer equipment installed at Fund's request at Fund's or a third party's premises, telecommunications equipment, telephone/ telecommunication lines between Fund and its agents, on one hand, and DST on the

other, proxy mailing, soliciting, processing and/or tabulating costs, second-site backup computer facility, transmission of statement data for remote printing or processing, and NSCC transaction fees (as well as any other expenses set forth on Exhibit C, as amended from time to time) to the extent any of the foregoing are paid or incurred by DST. Fund agrees to pay postage expenses at least one day in advance if so requested. In addition, any other expenses incurred by DST at the request or with the consent of Fund will be promptly reimbursed by Fund.

C. Amounts due hereunder shall be due and paid on or before the thirtieth (30th) calendar day after receipt of the statement therefor by Fund (the "Due Date"). Fund is aware that its failure to pay all amounts in a timely fashion so that they will be received by DST on or before the Due Date will give rise to costs to DST not contemplated by this Agreement, including but not limited to carrying, processing and accounting charges. Accordingly, subject to Section 6.D. hereof, in the event that any amounts due hereunder are not received by DST by the Due Date, Fund shall pay a late charge equal to the rate set forth in the fee schedule times the amount overdue, times the number of days from the Due Date up to and including the day on which payment is received by DST divided by 365. The parties hereby agree that such late charge represents a fair and reasonable computation of the costs incurred by reason of late payment or payment of amounts not properly due. Acceptance of such late charge shall in no event constitute a waiver of Fund's or DST's default or prevent the non-defaulting party from exercising any other rights and remedies available to it.

D. In the event that any charges are disputed, Fund shall, on or before the Due Date, pay all undisputed amounts due hereunder and notify DST in writing of any

disputed charges for out-of-pocket expenses that it is disputing in good faith. Payment for such disputed charges shall be due on or before the close of the fifth (5th) business day after the day on which DST provides to Fund documentation which an objective observer would agree reasonably supports the disputed charges (the "Revised Due Date"). Late charges shall not begin to accrue as to charges disputed in good faith until the first day after the Revised Due Date.

7. OPERATION OF DST SYSTEMS.

In connection with the performance of its services under this Agreement, DST is responsible for such items as:

A. That entries in DST's records and in Fund's records on the TA2000 System created by DST accurately reflect the orders, instructions, and other information received by DST from Fund, Fund's principal manager, underwriter or distributor or Fund's investment adviser, sponsor, custodian or administrator (each an "Authorized Person"), broker-dealers and shareholders;

B. That shareholder lists, shareholder account verifications, confirmations and other shareholder account information to be produced from its records or data be available and accurately reflect the data in Fund's records on the TA2000 System;

C. The accurate and timely issuance of dividend and distribution checks in accordance with instructions received from Fund and the data in Fund's records on the TA2000 System;

D. That redemption transactions and payments with respect to shares of open-end funds and transfers with respect to closed-end funds be effected timely, under normal circumstances on the day of receipt, and accurately in accordance with instructions received by DST from dealers, shareholders, or an Authorized Person of Fund

provided such instructions are in proper order as set forth elsewhere in this Agreement and are consistent with the data in Fund's records on the TA2000 System;

E. The deposit daily in Fund's appropriate special bank account of all checks and payments received by DST from NSCC, broker-dealers or shareholders for investment in shares of open-end funds;

F. Notwithstanding anything herein to the contrary, with respect to "as of" adjustments, DST will not necessarily assume one hundred percent (100%) responsibility for losses resulting from "as of's" due to clerical errors or misinterpretations of shareholder instructions. DST shall not be liable for any action taken, suffered, or omitted by it or for any error of judgment made by it with respect to "as of" adjustments in the absence of bad faith, willful misconduct, knowing violations of applicable law pertaining to the manner in which transfer agency services are to be performed by DST, reckless disregard of the performance of its duties, or negligence on its part. DST's liability hereunder shall extend only to losses that are "material", that is, that, on a given, day arise from dilution or a pricing error that is (i) greater than a negligible amount per shareholder, (ii) equals or exceeds one ($.01) full cent per share times the number of shares outstanding with respect to whether recompense of Fund is required, or (iii) equals or exceeds the product of one-half of one percent (1/2%) times Fund's Net Asset Value per share times the number of shares outstanding with respect to whether recompense at the shareholder level is required (or such other amounts as may be adopted by applicable accounting or regulatory authorities from time to time);

G. Notwithstanding anything in this Agreement to the contrary, DST shall perform the services set forth in Section 4.D. of, and elsewhere in, this Agreement, including but not limited to the requiring of proper forms of instructions, signatures and signature guarantees and any necessary documents supporting the opening of shareholder accounts (where required), transfers, redemptions and other shareholder account transactions, in conformance with DST's present procedures as set forth in its Legal Manual, Third Party Check Procedures, Checkwriting Draft Procedures, and Signature Guarantee Procedures with such changes or deviations therefrom as may be from time to time required or approved by Fund, its investment adviser or principal underwriter, or their or DST's counsel (the "Procedures") and the rejection of orders or instructions not in good order in accordance with the applicable prospectus or the Procedures;

H. The maintenance of customary records in connection with its agency, and particularly those records required to be maintained pursuant to subparagraph (2) (iv) of paragraph (b) of Rule 31a-1 under the Investment Company Act of 1940, if any; and

I. The maintenance of a current, duplicate set of Fund's essential records as of the close of business on the prior business day at a secure separate location, in a form available and usable forthwith in the event of any breakdown or disaster disrupting its main operation.

8. INDEMNIFICATION.

A. DST shall at all times use reasonable care, due diligence and act in good faith in performing its duties under this Agreement. DST shall provide its services as transfer agent in accordance with
Section 17A of the Exchange Act, and the rules

and regulations thereunder. In the absence of bad faith, willful misconduct, knowing violations of applicable law pertaining to the manner in which transfer agency services are to be performed by DST (excluding any violations arising directly or indirectly out of the actions of DST-unaffiliated third parties), reckless disregard of the performance of its duties, or negligence on its part, DST shall not be liable for any action taken, suffered, or omitted by it or for any error of judgment made by it in the performance of its duties under this Agreement. For those activities or actions delineated in the Procedures, DST shall be presumed to have used reasonable care, due diligence and acted in good faith if it has acted in accordance with the Procedures, copies of which have been provided to Fund, as amended from time to time with approval of counsel, or for any deviation therefrom approved by an Authorized Person, Fund or Fund's or DST's counsel.

B. DST shall not be responsible for, and Fund shall indemnify and hold DST harmless from and against, any and all losses, damages, costs, charges, counsel fees, payments, expenses and liability which may be asserted against DST or for which DST may be held to be liable, arising out of or attributable to:

(1) All actions of DST required to be taken by DST pursuant to this Agreement, provided that DST has acted in accordance with the standards specified in Paragraph A;

(2) Fund's refusal or failure to comply with the terms of this Agreement, Fund's negligence or willful misconduct, or the breach of any representation or warranty of Fund hereunder;

(3) The good faith reliance on or the carrying out of any written or recorded oral instructions or requests of persons designated by Fund in writing from time

to time as authorized to give instructions on its behalf or of representatives of an Authorized Person or DST's good faith reliance on or use of information, data, records and documents received from, or which have been prepared and/or maintained by or on behalf of, an Authorized Person;

(4) Defaults by dealers or shareowners with respect to payment for share orders previously entered;

(5) The offer or sale of Fund's shares in violation of any requirement under federal securities laws or regulations or the securities laws or regulations of any state or in violation of any stop order or other determination or ruling by any federal agency or state with respect to the offer or sale of such shares in such state (unless such violation results from DST's failure to comply with written instructions of Fund or of any officer of Fund that no offers or sales be input into Fund's securityholder records in or to residents of such state);

(6) Fund's or its agents' and Authorized Persons' omissions, errors and mistakes: (a) in the use of (i) the TA2000 System, (ii) the data center, computer and related equipment used to access the TA2000 System (the "DST Facilities"), and (iii) control procedures in the TA2000 System, and (b) in the verification of output and (c) in the remote input of data;

(7) Errors, inaccuracies and omissions in, or errors, inaccuracies or omissions of DST arising out of or resulting from such errors, inaccuracies and omissions in, Fund's records, shareholder records and other records, delivered to DST hereunder by Fund or its prior agent(s) (but not including errors, inaccuracies or omissions resulting from the negligence or willful

misconduct of DST while DST was acting as sub-agent on behalf of Investors Fiduciary Trust Company, Fund's prior transfer agent);

(8) Actions or omissions to act by Fund or agents designated by Fund with respect to duties assumed thereby as provided for in Section 21 hereof; and

(9) DST's performance of AGREED UPON Exception Services except where DST acted or omitted to act in bad faith, with reckless disregard of its obligations or with gross negligence.

C. Except where DST is entitled to indemnification under Section 8.B. hereof, and subject to the provisions Section 7.F. hereof, DST shall indemnify and hold Fund harmless from and against any and all losses, damages, costs, charges, counsel fees, payments, expenses and liability arising out of DST's failure to comply with the terms of this Agreement or arising out of or attributable to DST's negligence or willful misconduct or material breach of any representation or warranty of DST hereunder.

D. EXCEPT FOR VIOLATIONS OF SECTION 23, IN NO EVENT AND UNDER NO CIRCUMSTANCES SHALL EITHER PARTY TO THIS AGREEMENT BE LIABLE TO ANYONE, INCLUDING, WITHOUT LIMITATION TO THE OTHER PARTY, FOR CONSEQUENTIAL DAMAGES FOR ANY ACT OR FAILURE TO ACT UNDER ANY PROVISION OF THIS AGREEMENT EVEN IF ADVISED OF THE POSSIBILITY THEREOF.

E. Promptly after receipt by an indemnified person of notice of the commencement of any action, such indemnified person will, if a claim in respect thereto is to be made against an indemnifying party hereunder, notify the indemnifying party in writing of

the commencement thereof; but the failure so to notify the indemnifying party will not relieve an indemnifying party from any liability that it may have to any indemnified person for contribution or otherwise under the indemnity agreement contained herein except to the extent it is prejudiced as a proximate result of such failure to timely notify. In case any such action is brought against any indemnified person and such indemnified person seeks or intends to seek indemnity from an indemnifying party, the indemnifying party will be entitled to participate in, and, to the extent that it may wish, assume the defense thereof (in its own name or in the name and on behalf of any indemnified party or both with counsel reasonably satisfactory to such indemnified person); provided, however, if the defendants in any such action include both the indemnified person and an indemnifying party and the indemnified person shall have reasonably concluded that there may be a conflict between the positions of the indemnified person and an indemnifying party in conducting the defense of any such action or that there may be legal defenses available to it and/or other indemnified persons which are inconsistent with those available to an indemnifying party, the indemnified person or indemnified persons shall have the right to select one separate counsel (in addition to counsel provided by the indemnifying party) to assume such legal defense and to otherwise participate in the defense of such action on behalf of such indemnified person or indemnified persons at such indemnified party's sole expense. Upon receipt of notice from an indemnifying party to such indemnified person of its election so to assume the defense of such action and approval by the indemnified person of counsel, which approval shall not be unreasonably withheld (and any disapproval shall be accompanied by a written statement of the reasons therefor), the indemnifying party

will not be liable to such indemnified person hereunder for any legal or other expenses subsequently incurred by such indemnified person in connection with the defense thereof. An indemnifying party will not settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified persons are actual or potential parties to such claim, action, suit or proceeding) unless such settlement, compromise or consent includes an unconditional release of each indemnified person from all liability arising out of such claim, action, suit or proceeding. An indemnified party will not, without the prior written consent of the indemnifying party, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder. If it does so, it waives its right to indemnification therefor.

9. CERTAIN COVENANTS OF DST AND FUND.

A. All requisite steps will be taken by Fund from time to time when and as necessary to register Fund's shares for sale in all states in which Fund's shares shall at the time be offered for sale and require registration. If at any time Fund receives notice of any stop order or other proceeding in any such state affecting such registration or the sale of Fund's shares, or of any stop order or other proceeding under the federal securities laws affecting the sale of Fund's shares, Fund will give prompt notice thereof to DST.

B. DST hereby agrees to perform such transfer agency functions as are set forth in section 4.D. above and establish and maintain facilities and procedures reasonably

acceptable to Fund for safekeeping of stock certificates, check forms, and facsimile signature imprinting devices, if any; and for the preparation or use, and for keeping account of, such certificates, forms and devices, and to carry such insurance as it considers adequate and reasonably available.

C. To the extent required by Section 31 of the Investment Company Act of 1940 as amended and Rules thereunder, DST agrees that all shareholder- or Fund-related records maintained by DST relating to the services performed by DST under this Agreement are the property of Fund and will be preserved, and will, upon receipt of payment of all sums due to DST in connection with DST's performance under this Agreement, be surrendered promptly to Fund on request.

D. DST agrees to furnish Fund semiannual reports of its financial condition, consisting of a balance sheet, earnings statement and any other readily and publicly available financial information reasonably requested by Fund. The annual financial statements will be certified by DST's certified public accountants. DST agrees to provide such reports as are produced by the TA2000 System respecting its services under this Agreement to Fund's Board as the Fund Board may reasonably request.

E. DST represents and agrees that it will use its reasonable efforts to keep current on the trends of the investment company industry relating to shareholder services and will use its reasonable efforts to continue to modernize and improve.

F. DST will permit Fund and its authorized representatives to make periodic inspections of its operations as such would involve Fund upon reasonable prior notice and at reasonable times during business hours.

G. DST agrees to use its reasonable efforts to provide in Kansas City at Fund's expense two (2) man weeks of training for Fund's personnel in connection with use and

operation of the TA2000 System. All travel and reimbursable expenses incurred by Fund's personnel in connection with and during training at DST's Facility shall be borne by Fund. At Fund's option and expense, DST also agrees to use its best efforts to provide an additional two (2) man weeks of training at Fund's facility for Fund's personnel in connection with the TA2000 System. Reasonable travel, per diem and reimbursable expenses incurred by DST personnel in connection with and during training at Fund's facility or in connection with the conversion shall be borne by Fund.

10. RECAPITALIZATION OR READJUSTMENT.

In case of any recapitalization, readjustment or other change in the capital structure of Fund requiring a change in the form of stock certificates, DST will, upon agreement with Fund as to the charges to apply thereto, issue or register certificates in the new form in exchange for, or in transfer of, the outstanding certificates in the old form, upon receiving:

A. Written instructions from an officer of Fund;

B. Certified copy of the amendment to the Articles of Incorporation or other document effecting the change;

C. Certified copy of the order or consent of each governmental or regulatory authority required by law to the issuance of the stock in the new form, and an opinion of counsel that the order or consent of no other government or regulatory authority is required;

D. Specimens of the new certificates in the form approved by the Board of Directors or Trustees of Fund, with a certificate of the Secretary of Fund as to such approval;

E. Opinion of counsel for Fund stating:

(1) The status of the shares of stock of Fund in the new form under the Securities Act of 1933, as amended and any other applicable federal or state statute; and

(2) That the issued shares in the new form are, and all unissued shares will be, when issued, validly issued, fully paid and nonassessable by the Fund.

11. STOCK CERTIFICATES.

Fund will furnish DST with a sufficient supply of blank stock certificates and from time to time will renew such supply upon the request of DST. Such certificates will be signed manually or by facsimile signatures of the officers of Fund authorized by law and by bylaws to sign stock certificates and, if required, will bear the corporate seal or facsimile thereof.

12. DEATH, RESIGNATION OR REMOVAL OF SIGNING OFFICER.

Fund will file promptly with DST written notice of any change in the officers authorized to sign stock certificates, written instructions or requests, together with two certificates of the Secretary or Clerk bearing the specimen signature of each newly authorized officer. In case any officer of Fund who has signed manually or whose facsimile signature has been affixed to blank stock certificates dies, resigns, or is removed prior to the issuance of such certificates, DST may issue or register such stock certificates as the stock certificates of Fund notwithstanding such death, resignation, or removal, until specifically directed to the contrary by Fund in writing. In the absence of such direction, Fund will file promptly with DST such approval, adoption, or ratification as may be required by law.

13. FUTURE AMENDMENTS OF CHARTER AND BYLAWS.

Fund will promptly file with DST copies of all material amendments to its Articles of Incorporation or Declaration of Trust, as applicable, or bylaws made after the date of this Agreement.

14. INSTRUCTIONS, OPINION OF COUNSEL AND SIGNATURES.

At any time DST may apply to any person authorized by Fund, including without limitation the duly authorized representative of any Authorized Person and any Authorized Personnel set forth on Exhibit D to this Agreement, to give instructions to DST, and may with the approval of a Fund officer consult with legal counsel for Fund or its own legal counsel at the expense of Fund, with respect to any matter arising in connection with the agency and it will not be liable for any action taken or omitted by it in good faith in reliance upon such instructions or upon the opinion of such counsel. DST will be protected in acting upon any paper or document reasonably believed by it to be genuine and to have been signed by the proper person or persons and will not be held to have notice of any change of authority of any person, until receipt of written notice thereof from Fund. It will also be protected in recognizing stock certificates which it reasonably believes to bear the proper manual or facsimile signatures of the officers of Fund, and the proper countersignature of any former Transfer Agent or Registrar, or of a present or former co-Transfer Agent or co-Registrar.

15. FORCE MAJEURE AND DISASTER RECOVERY PLANS.

A. DST SHALL NOT BE RESPONSIBLE OR LIABLE FOR ITS FAILURE OR DELAY IN PERFORMANCE OF ITS OBLIGATIONS UNDER THIS AGREEMENT ARISING OUT OF OR CAUSED, DIRECTLY OR INDIRECTLY, BY CIRCUMSTANCES BEYOND ITS REASONABLE CONTROL, INCLUDING, WITHOUT LIMITATION: ANY INTERRUPTION, LOSS OR MALFUNCTION OR ANY UTILITY, TRANSPORTATION, COMPUTER (HARDWARE OR SOFTWARE) OR COMMUNICATION SERVICE; INABILITY TO OBTAIN LABOR, MATERIAL, EQUIPMENT OR TRANSPORTATION, OR A DELAY IN

MAILS; GOVERNMENTAL OR EXCHANGE ACTION, STATUTE, ORDINANCE, RULINGS, REGULATIONS OR DIRECTION; WAR, STRIKE, RIOT, EMERGENCY, CIVIL DISTURBANCE, TERRORISM, VANDALISM, EXPLOSIONS, LABOR DISPUTES, FREEZES, FLOODS, FIRES, TORNADOS, ACTS OF GOD OR PUBLIC ENEMY, REVOLUTIONS, OR INSURRECTION; OR ANY OTHER CAUSE, CONTINGENCY, CIRCUMSTANCE OR DELAY NOT SUBJECT TO DST'S CONTROL WHICH PREVENTS OR HINDERS DST'S PERFORMANCE HEREUNDER.

B. DST currently maintains an agreement with a third party whereby DST is to be permitted to use on a "shared use" basis a "hot site" (the "Recovery Facility") maintained by such party in event of a disaster rendering the DST Facilities inoperable. DST has developed and is continually revising a business contingency plan (the "Business Contingency Plan") detailing which, how, when, and by whom data maintained by DST at the DST Facilities will be installed and operated at the Recovery Facility. Provided Fund is paying its pro rata portion of the charge therefor, DST would, in event of a disaster rendering the DST Facilities inoperable, use reasonable efforts to convert the TA2000 System containing the designated Fund data to the computers at the Recovery Facility in accordance with the then current Business Contingency Plan.

C. DST also currently maintains, separate from the area in which the operations that provide the services to Fund hereunder are located, a Crisis Management Center consisting of phones, computers and the other equipment necessary to operate a full service transfer agency business in the event one of its operations areas is rendered

inoperable. The transfer of operations to other operating areas or to the Crisis Management Center is also covered in DST's Business Contingency Plan.

16. CERTIFICATION OF DOCUMENTS.

The required copy of the Articles of Incorporation or Declaration of Trust of Fund and copies of all amendments thereto will be certified by the Secretary of State (or other appropriate official) of the State of Incorporation, and if such Articles of Incorporation or Declaration of Trust and amendments are required by law to be also filed with a county, city or other officer of an official body, a certificate of such filing will appear on the certified copy submitted to DST. A copy of the order or consent of each governmental or regulatory authority required by law to the issuance of the stock will be certified by the Secretary or Clerk of such governmental or regulatory authority, under proper seal of such authority. The copy of the Bylaws and copies of all amendments thereto, and copies of resolutions of the Board of Directors or Trustees of Fund, as applicable, will be certified by the Secretary or Clerk or an Assistant Secretary or Clerk of Fund under Fund's seal.

17. RECORDS.

DST will maintain customary records in connection with its agency, and particularly will maintain those records required to be maintained pursuant to subparagraph (2) (iv) of paragraph (b) of Rule 31a-1 under the Investment Company Act of 1940, if any.

18. DISPOSITION OF BOOKS, RECORDS AND CANCELED CERTIFICATES.

DST may send periodically to Fund, or to where designated by the Secretary or an Assistant Secretary of Fund, all books, documents, and records no longer deemed needed for current purposes and all stock certificates which have been canceled in transfer or in exchange, upon the understanding that such books, documents, records, and stock certificates will be maintained by Fund under and in accordance with the requirements of Section 17Ad-7

adopted under the Securities Exchange Act of 1934. Such materials will not be destroyed by Fund without the consent of DST (which consent will not be unreasonably withheld), but will be safely stored for possible future reference and maintained, preserved and made available to DST and the U.S. Securities and Exchange Commission in accordance with the requirement of Sections 17Ad-7 under the Securities Exchange Act of 1934 (17 C.F.R. Section 240.17Ad-7).

19. PROVISIONS RELATING TO DST AS TRANSFER AGENT.

A. DST will make original issues of stock certificates upon written request of an officer of Fund, and upon mutual agreement as to the charges to apply thereto and being furnished with a certified copy of a resolution of the Board of Directors or Trustees authorizing such original issue, an opinion of counsel as outlined in Section
1.G. of this Agreement, any documents required by Sections 5. or
10. of this Agreement, and necessary funds for the payment of any original issue tax.

B. Before making any original issue of certificates, Fund will furnish DST with sufficient funds to pay all required taxes on the original issue of the stock, if any. Fund will furnish DST such evidence as may be required by DST to show the actual value of the stock. If no taxes are payable, DST will be furnished with an opinion of outside counsel to that effect.

C. Shares of stock will be transferred and new certificates issued in transfer, or, except in the case of closed-end funds, shares of stock will be accepted for redemption and funds remitted therefor, or book entry transfer will be effected, upon surrender of the old certificates in form or receipt by DST of instructions deemed by DST properly endorsed for transfer or, except in the case of closed-end funds, redemption accompanied by such documents as DST may deem necessary to evidence the

authority of the person making the transfer or redemption. DST reserves the right to refuse to transfer or redeem shares until it is satisfied that the endorsement or signature on the certificate or any other document is valid and genuine, and for that purpose, unless Fund has instructed DST not to require a signature guarantee, DST may require a guaranty of signature in accordance with the Procedures. DST shall have the right to refuse to transfer or redeem shares until it is satisfied that the requested transfer or redemption is legally authorized, and it will incur no liability for the refusal in good faith to make transfers or redemptions that, in its judgment, are improper or unauthorized. DST may, in effecting transfers or redemptions, rely upon Simplification Acts, Uniform Commercial Code, or other statutes that protect it and Fund in not requiring complete fiduciary documentation. In cases in which DST is not directed or otherwise required to maintain the consolidated records of shareholder's accounts, DST will not be liable for any loss that may arise by reason of not having such records.

D. When mail is used for delivery of stock certificates, DST will forward stock certificates in "nonnegotiable" form by first class or registered mail and stock certificates in "negotiable" form by registered mail, all such mail deliveries to be covered while in transit to the addressee by insurance arranged for by DST.

E. DST will issue and mail subscription warrants, certificates representing stock dividends, exchanges or split ups, or act as Conversion Agent upon receiving written instructions from any officer of Fund and such other documents as DST deems necessary upon agreement between DST and Fund as to the charges to apply thereto.

F. DST will issue, transfer, and split up certificates and will issue certificates of stock representing full shares upon surrender of scrip certificates aggregating one full share or more when presented to DST for that purpose upon receiving written instructions from an officer of Fund and such other documents as DST may deem necessary.

G. DST may issue new certificates in place of certificates represented to have been lost, destroyed, stolen or otherwise wrongfully taken upon receiving instructions from Fund and indemnity satisfactory to DST and Fund, and may issue new certificates in exchange for, and upon surrender of, mutilated certificates. Such instructions from Fund will be in such form as will be approved by the Board of Directors or Trustees of Fund and will be in accordance with the provisions of law and the bylaws of Fund governing such matter.

H. DST will supply a shareholder's list to Fund for its annual meeting upon receiving a request from an officer of Fund. It will also supply lists at such other times as may be requested by an officer of Fund, subject to payment of applicable charges therefor.

I. Upon receipt of written instructions of an officer of Fund, DST will address and mail notices to shareholders.

J. In case of any request or demand for the inspection of the stock books of Fund or any other books or records in the possession of DST, DST will endeavor to notify Fund and to secure instructions as to permitting or refusing such inspection. DST reserves the right, however, to exhibit the stock books or other books or records to any person in case it is advised by its counsel that it may be held responsible for the failure to exhibit the stock books or other books to such person.

20. PROVISIONS RELATING TO DIVIDEND DISBURSING AGENCY.

A. DST will, at the expense of Fund, provide a special form of check containing the imprint of any device or other matter desired by Fund. Said checks must, however, be of a form and size convenient for use by DST.

B. If Fund desires to include additional printed matter, financial statements, ETC., with the dividend checks, the same will be furnished to DST within a reasonable time prior to the date of mailing of the dividend checks, at the expense of Fund.

C. If Fund desires its distributions mailed in any special form of envelopes, sufficient supply of the same will be furnished to DST, but the size and form of said envelopes will be subject to the approval of DST. If stamped envelopes are used, they must be furnished by Fund; or if postage stamps are to be affixed to the envelopes, the stamps or the cash necessary for such stamps must be furnished by Fund in advance of such mailing.

D. DST is hereby authorized to open and to maintain at a Bank acceptable to Fund one or more non-interest bearing deposit accounts as Agent for Fund, into which the funds for payment of dividends, distributions, redemptions or other disbursements provided for hereunder will be deposited, and against which checks will be drawn.

E. DST is authorized and directed to stop payment of checks theretofore issued hereunder, but not presented for payment, when the payees thereof allege either that they have not received the checks or that such checks have been mislaid, lost, stolen, destroyed or through no fault of theirs, are otherwise beyond their control, and cannot be produced by them for presentation and collection, and, to issue and deliver duplicate checks in replacement thereof.

21. ASSUMPTION OF DUTIES BY FUND OR AGENTS DESIGNATED BY FUND.

A. Fund or its designated agents other than DST may assume certain duties and responsibilities of DST or those services of Transfer Agent and Dividend Disbursement Agent as those terms are referred to in Section 4.D. of this Agreement including but not limited to answering and responding to telephone inquiries from shareholders and brokers, accepting shareholder and broker instructions (either or both oral and written) and transmitting orders based on such instructions to DST, preparing and mailing confirmations, obtaining certified TIN numbers, classifying the status of shareholders and shareholder accounts under applicable tax law, establishing shareholder accounts on the TA2000 System and assigning social codes and Taxpayer Identification Number codes thereof, and disbursing monies of Fund, said assumption to be embodied in writing to be signed by both parties.

B. To the extent Fund or its agent or affiliate assumes such duties and responsibilities, DST shall be relieved from all responsibility and liability therefor and is hereby indemnified and held harmless against any liability therefrom and in the same manner and degree as provided for in Section 8 hereof.

C. DST MAY, SUBJECT TO THE WRITTEN CONSENT OF THE FUND, APPOINT OTHER PARTIES QUALIFIED TO PERFORM TRANSFER AGENCY SERVICES ("SUB-TRANSFER AGENTS") TO CARRY OUT SOME OR ALL OF ITS RESPONSIBILITIES UNDER THIS AGREEMENT; PROVIDED, HOWEVER, THAT A SUB-TRANSFER AGENT SHALL BE THE AGENT OF DST AND NOT THE AGENT OF THE FUND, AND THAT UNLESS THE SUB-TRANSFER AGENT IS APPOINTED AT THE DIRECTION OF THE FUND, DST SHALL BE FULLY RESPONSIBLE FOR THE ACTS OF A SUB-TRANSFER AGENT AND SHALL NOT BE RELIEVED OF ANY OF ITS RESPONSIBILITIES HEREUNDER BY THE APPOINTMENT OF A SUB-TRANSFER AGENT.

D. Initially Fund shall be responsible for the following: (i) answering and responding to phone calls from shareholders and broker-dealers, and (ii) scanning items into the AWD(TM) System as such calls or items are received by Fund, and (iii) entering and confirming wire order trades.

22. TERMINATION OF AGREEMENT.

A. This Agreement shall be in effect from the date set forth on the first page (the "Effective Date") through May 31, 2002 and thereafter shall remain in effect unless terminated by either party upon receipt of six (6) months written notice from the other party, provided, however, that the effective date of any termination shall not occur during the period from December 15 through March 30 of any year to avoid adversely impacting year end.

B. Each party, in addition to any other rights and remedies, shall have the right to terminate this Agreement forthwith upon the occurrence at any time of any of the following events with respect to the other party:

(1) Any interruption or cessation of operations by the other party or its assigns that materially interferes with the business operation of the first party;

(2) The bankruptcy of the other party or its assigns or the appointment of a receiver for the other party or its assigns;

(3) Failure by the other party or its assigns to perform its duties in accordance with the Agreement, which failure materially adversely affects the business operations of the first party and which failure continues for thirty (30) days after receipt of written notice from the first party; and

(4) The acquisition of a controlling interest in DST Systems, Inc. or its assigns, by any broker, dealer, investment adviser or investment company except as may presently exist.

C. In the event of any termination, Fund will promptly pay DST all amounts due to DST hereunder. In addition, if this Agreement is terminated by Fund for any reason other than those set forth in
Section 22.B. hereof, then Fund shall pay to DST on the last business day of each of the next three (3) whole or partial calendar months (commencing with the last day of the month in which termination actually occurs if termination does not occur on the last business day of the month, and with the last business day of the immediately following month if termination actually occurs on the last business day of a month) an amount equal to the average monthly fees, exclusive of the out-of-pocket expenses, paid by or on behalf of each terminating party under the affected Agreement during the six (6) calendar months preceding the month during which the termination notice was received by DST.

D. If the termination date set forth in the original termination notice is extended by any terminating party (which extension shall require the agreement of DST), then the fees and charges payable by the terminating party under this Agreement shall increase by twenty percent (20%) during the period commencing with the original termination date set forth in the initial termination notice and concluding with the day upon which termination actually occurs. These provisions are in addition to any other contractual provision or compensation agreements that may be in existence at the time of an actual transfer.

E. DST shall, upon termination of this Agreement and receipt of payment of all outstanding bills and invoices, deliver to the successor so specified or appointed, or

to Fund, at DST's office, all records then held by DST hereunder, all funds and other properties of Fund deposited with or held by DST hereunder. In the event no written order designating a successor (which may be Fund) shall have been delivered to DST on or before the date when such termination shall become effective, then DST shall deliver the records, funds and properties of Fund to a bank or trust company at the selection of DST or if a satisfactory successor cannot be obtained, DST may deliver the assets to Fund, at DST's offices or as otherwise agreed to between the parties in any event upon written notice to Fund. Thereafter Fund or such bank or trust company shall be the successor under this Agreement and shall be entitled to reasonable compensation for its services. Notwithstanding the foregoing requirement as to delivery upon termination of this Agreement, DST may make any other delivery of the funds and property of Fund that shall be permitted by the Investment Company Act of 1940 and Fund's Articles of Incorporation, Declaration of Trust, and/or Bylaws then in effect. Except as otherwise provided herein, neither this Agreement nor any portion thereof may be assigned by DST without the consent of Fund.

F. In the event of termination, DST shall provide reasonable assistance to Fund and its designated successor transfer agent and other information relating to its services provided hereunder (subject to the recompense of DST for such assistance at its standard rates and fees for personnel then in effect at that time); provided, however, as used herein "reasonable assistance" and "other information" shall not include assisting any new service or system provider to modify, alter, enhance, or improve such new service or system provider's system or to improve, enhance, or alter its current, or to provide any new, functionality or to require DST to disclose any DST

Protected Information, as defined in Section 23 of this Agreement, or any information which is otherwise confidential to DST. DST's assistance shall be billed at its then current rates. DST's present rates, which are subject to annual increase as DST's labor costs for such personnel increase, are as is set forth in Exhibit B to this Agreement.

G. Nothing in this Agreement is intended to, nor does it, compel DST to disclose non-public information concerning its operations or operating systems, including but not limited to the TA2000 System, or to provide programming assistance or information which might tend to improve, enhance, or add functionality to anyone else's operating systems.

23. CONFIDENTIALITY.

A. DST agrees that, except as provided in the last sentence of
Section 19.J hereof, or as otherwise required by law, DST will keep confidential all records of and information relating to Fund or its shareholders or shareholder accounts in its possession and will not disclose the same to any person except at the request or with the consent of Fund.

B. Fund agrees to keep confidential all provisions, terms and conditions of this Agreement, all financial statements and other financial records (other than statements and records relating solely to Fund's business dealings with DST) and all manuals, systems and other technical information and data, not publicly disclosed, relating to DST's operations and programs furnished to it by DST pursuant to this Agreement and will not disclose the same to any person except at the request or with the consent of DST.

C. Fund acknowledges that DST has proprietary rights in and to the computerized data processing recordkeeping system used by DST to perform services hereunder including but not limited to the maintenance of shareholder accounts and records, processing of related information and generation of output, the TA2000 System, including without limitation any changes or modifications of the TA2000 System and any other DST programs, data bases, supporting documentation, or procedures (collectively "DST Protected Information") which Fund's access to the TA2000 System or software or DST Facilities may permit Fund or its employees or agents to become aware of or to access and that the DST Protected Information constitutes confidential material and trade secrets of DST. Fund agrees to maintain the confidentiality of the DST Protected Information.

D. Fund acknowledges that any unauthorized use, misuse, disclosure or taking of DST Protected Information which is confidential as provided by law, or which is a trade secret, residing or existing internal or external to a computer, computer system, or computer network, or the knowing and unauthorized accessing or causing to be accessed of any computer, computer system, or computer network, may be subject to civil liabilities and criminal penalties under applicable state law. Fund will advise all of its employees and agents who have access to any DST Protected Information or to any computer equipment capable of accessing DST hardware or software of the foregoing.

E. Fund acknowledges that disclosure of the DST Confidential Information may give rise to an irreparable injury to DST inadequately compensable in damages. Accordingly, DST may seek (without the posting of any bond or other security) injunctive relief against the breach of the foregoing undertaking of confidentiality

and nondisclosure, in addition to any other legal remedies that may be available, and Fund consents to the obtaining of such injunctive relief. All of the undertakings and obligations relating to confidentiality and nondisclosure, whether contained in this Section or elsewhere in this Agreement shall survive the termination or expiration of this Agreement for a period of ten
(10) years.

24. CHANGES AND MODIFICATIONS.

A. During the term of this Agreement DST will use on behalf of Fund without additional cost all modifications, enhancements, or changes which DST may make to the TA2000 System in the normal course of its business and which are applicable to functions and features offered by Fund, unless substantially all DST clients are charged separately for such modifications, enhancements or changes, including, without limitation, substantial system revisions or modifications necessitated by changes in existing laws, rules or regulations. Fund agrees to pay DST promptly for modifications and improvements that are charged for separately at the rate provided for in DST's standard pricing schedule that shall be identical for substantially all clients, if a standard pricing schedule shall exist. If there is no standard pricing schedule, the parties shall mutually agree upon the rates to be charged.

B. DST shall have the right, at any time and from time to time, to alter and modify any systems, programs, procedures or facilities used or employed in performing its duties and obligations hereunder; provided that Fund will be notified as promptly as possible prior to implementation of such alterations and modifications and that no such alteration or modification or deletion shall materially adversely change or affect the operations and procedures of Fund in using or employing the TA2000 System or DST Facilities hereunder or the reports to be generated by such system

and facilities hereunder, unless Fund is given thirty (30) days prior notice to allow Fund to change its procedures and DST provides Fund with revised operating procedures and controls.

C. All enhancements, improvements, changes, modifications or new features added to the TA2000 System however developed or paid for shall be, and shall remain, the confidential and exclusive property of, and proprietary to, DST.

25. SUBCONTRACTORS.

Nothing herein shall impose any duty upon DST in connection with or make DST liable for the actions or omissions to act of unaffiliated third parties such as, by way of example and not limitation, the banks at which the deposit accounts are maintained, The National Securities Clearing Corporation, airborne services, the U.S. mails and telecommunication companies, provided, if DST selected such company, DST shall have exercised due care in selecting the same.

26. LIMITATIONS ON LIABILITY.

A. If Fund is comprised of more than one Portfolio, each Portfolio shall be regarded for all purposes hereunder as a separate party apart from each other Portfolio. Unless the context otherwise requires, with respect to every transaction covered by this Agreement, every reference herein to Fund shall be deemed to relate solely to the particular Portfolio to which such transaction relates. Under no circumstances shall the rights, obligations or remedies with respect to a particular Portfolio constitute a right, obligation or remedy applicable to any other Portfolio or the rights, obligations or remedies with respect to a particular Fund constitute a right, obligation or remedy applicable to any other Fund. The use of this single document to memorialize the separate agreement of each Portfolio or Fund is understood to be for clerical

convenience only and shall not constitute any basis for joining the Portfolios or Funds for any reason.

B. Notice is hereby given that a copy of Fund's Articles of Incorporation or Trust Agreement (as applicable) and all amendments thereto is on file with the Secretary of State of the state of its organization; that this Agreement has been executed on behalf of Fund by the undersigned duly authorized representative of Fund in his/her capacity as such and not individually; and that the obligations of this Agreement shall only be binding upon the assets and property of Fund and shall not be binding upon any director, trustee, officer or shareholder of Fund individually.

27. NOTICES.

All notices, consents, requests, instructions, approvals and other communications provided for herein shall be validly given, made or served if in writing and delivered personally, sent by mail, registered or certified, return receipt requested, postage prepaid, by telegram or by facsimile transmission:

If to Fund:

The ING Pilgrim Family of Funds
7337 E. Doubletree Ranch Road
Scottsdale, Arizona 85258-2034
Telephone No.: (408) 477-2117
Telecopier No.: (408) 477-2082
Attn: Rob Naka, Senior Vice President

And if to DST:

DST Systems, Inc.
210 West 10th Street, 7th Floor
Kansas City, Missouri 64105
Telephone No.: (816) 843-7500
Telecopier No.: (816) 843-7502
Attn: Jonathan Boehm, Group Vice President

With a copy of non-operational notices to:

DST Systems, Inc.
333 West 11th Street, 5th Floor
Kansas City, Missouri 64105
Telephone No.: (816) 435-8688
Telecopier No.: (816) 435-8630
Attn: Legal Department

or to such other address as DST or Fund may from time to time designate in writing delivered as provided above.

28. MISCELLANEOUS.

A. This Agreement is executed and delivered in the State of Missouri and shall be construed according to, and the rights and liabilities of the parties hereto shall be governed by, the laws of the State of Missouri, excluding that body of law applicable to choice of law.

B. All terms and provisions of this Agreement shall be binding upon, inure to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns.

C. The representations and warranties, all indemnifications and any limitations on liability set forth in this Agreement are intended to and shall continue after and survive the expiration, termination or cancellation of this Agreement until any statute of limitations applicable to the matter at issues shall have expired.

D. No provisions of this Agreement may be amended or modified in any manner except by a written agreement properly authorized and executed each party hereto.

E. The captions in this Agreement are included for convenience of reference only, and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect.

F. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

G. If any part, term or provision of this Agreement is by the courts held to be illegal, in conflict with any law or otherwise invalid, the remaining portion or portions shall be considered severable and not be affected, and the rights and obligations of the parties shall be construed and enforced as if this Agreement did not contain the particular part, term or provision held to be illegal or invalid.

H. This Agreement may not be assigned any party hereto without prior written consent of the other parties.

I. Neither the execution nor performance of this Agreement shall be deemed to create a partnership or joint venture by and between Fund and DST. It is understood and agreed that all services performed hereunder by DST shall be as an independent contractor and not as an employee of Fund. This Agreement is between DST and Fund and neither this Agreement nor the performance of services under it shall create any rights in any third parties. There are no third party beneficiaries hereto.

J. Except as specifically provided herein, this Agreement does not in any way affect any other agreements entered into among the parties hereto and any actions taken or omitted by any party hereunder shall not affect any rights or obligations of any other party hereunder.

K. The failure of either party to insist upon the performance of any terms or conditions of this Agreement or to enforce any rights resulting from any breach of any of the terms or conditions of this Agreement, including the payment of damages, shall not be construed as a continuing or permanent waiver of any such terms, conditions,

rights or privileges, but the same shall continue and remain in full force and effect as if no such forbearance or waiver had occurred.

L. This Agreement constitutes the entire agreement between the parties hereto and supersedes any prior agreement, draft or agreement or proposal with respect to the appointment of DST as Agent for the Fund and the provision by DST of transfer agency services as such Agent between any Fund and DST, whether oral or written.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective duly authorized officers, to be effective as of the day and year first above written.

DST SYSTEMS, INC.

By: /s/ Jonathan Boehm
   -------------------------------

Title: Group VP
      ----------------------------

Date: 11/30/2000
     -----------------------------

LEXINGTON MONEY MARKET TRUST
PILGRIM EQUITY TRUST
Pilgrim Index Plus Protection Fund
Pilgrim MidCap Opportunities Fund
PILGRIM GROWTH OPPORTUNITIES FUND
PILGRIM MAYFLOWER TRUST
Pilgrim Growth + Value Fund
Pilgrim International Value Fund
Pilgrim Research Enhanced Index Fund

PILGRIM NATURAL RESOURCES TRUST
PILGRIM PRIME RATE TRUST
PILGRIM SMALLCAP OPPORTUNITIES FUND
PILGRIM VARIABLE PRODUCTS TRUST
Pilgrim VP Convertible Portfolio
Pilgrim VP Emerging Countries Portfolio
Pilgrim VP Financial Services Portfolio
Pilgrim VP Growth & Income Portfolio
Pilgrim VP Growth + Value Portfolio
Pilgrim VP Growth Opportunities Portfolio
Pilgrim VP High Yield Bond Portfolio
Pilgrim VP International Portfolio
Pilgrim VP International SmallCap Growth Portfolio
Pilgrim VP International Value Portfolio
Pilgrim VP LargeCap Growth Portfolio
Pilgrim VP MargnaCap Portfolio
Pilgrim VP MidCap Opportunities Portfolio
Pilgrim VP Research Enhanced Index Portfolio
Pilgrim VP SmallCap Opportunities Portfolio
Pilgrim VP Worldwide Growth Portfolio
PILGRIM FUNDS TRUST
Pilgrim European Equity Fund
Pilgrim Global Communications Fund
Pilgrim Global Information Technology Fund
Pilgrim Intermediate Bond Fund
Pilgrim Internet Fund
ING Pilgrim Money Market Fund
Pilgrim National Tax-Exempt Bond Fund
Pilgrim Tax Efficient Equity Fund
PILGRIM MUTUAL FUNDS
Pilgrim Balanced Fund
Pilgrim Convertible Fund
Pilgrim Emerging Countries Fund
Pilgrim High Yield Fund II
Pilgrim International Core Growth Fund
Pilgrim International SmallCap Growth Fund
Pilgrim LargeCap Growth Fund
Pilgrim MidCap Growth Fund
Pilgrim Money Market Fund
Pilgrim SmallCap Growth Fund
Pilgrim Strategic Income Fund
Pilgrim Worldwide Growth Fund
PILGRIM SENIOR INCOME FUND
PILGRIM ADVISORY FUNDS, INC.
Pilgrim Asia-Pacific Equity Fund
PILGRIM BANK AND THRIFT FUND, INC.

PILGRIM EMERGING MARKETS FUND, INC.
PILGRIM GNMA INCOME FUND, INC.
PILGRIM PRECIOUS METALS FUND, INC.
PILGRIM GROWTH AND INCOME FUND, INC.
PILGRIM INVESTMENT FUNDS, INC.
Pilgrim High Yield Fund
Pilgrim MagnaCap Fund
PILGRIM INTERNATIONAL FUND, INC.,
PILGRIM RUSSIA FUND, INC.

By: /s/ Robert S. Naka
    -----------------------------------


Title: Senior Vice President
       --------------------------------


Date: 11/30/2000
      ---------------------------------

$0 - $100,000,000                      9.0 basis pts per year
$100,000,001- $300,000,000             8.5 basis pts per year
$300,000,001 - $500,000,000            7.5 basis pts per year
Greater than $500,000,000              7.25 basis pts per year

(APPLIES TO ALL LEXINGTON AND PILGRIM CUSIPS, INCLUDING NEW Q SHARE
PORTFOLIO CLASSES ESTABLISHED AS A RESULT OF THE NORTHSTAR CONVERSION)

Prime Rate Trust                       2.4 basis pts per year
Bank & Thrift                          24.2 basis pts   per year
Pilgrim Investment Plan                $7,200 per year
Northstar Funds                        Covered under separate
                                       agreement
ING Money Market Portfolio             6.0 basis pts per year
                                       (effective 12/1/01)

BUNDLED PRODUCTS AND SERVICES:

The above asset fees cover a comprehensive bundle of products and services. The following products and services are not covered by the asset fees and will continue to be billed separately using the current rates, subject to current allowable periodic increases:

- AWD License Fees
- Escheatment
- Programming
- FANMail
- Vision

EXHIBIT B, p. 2

Additional products and services not currently utilized would be priced separately and would be billed in addition to the asset fees.

-Computer/Technical Personnel (2000 Rates):

Business Analyst/Tester:
Dedicated - $79,040 per year
On Request - $72.80 per hour

COBOL Programmer:

Dedicated - $129,480 per year
On Request - $100.88 per hour

Workstation Programmer:

Dedicated - $157,040 per year
On Request - $128.96 per hour

-Full Service Support (2000 Rates):

Senior Staff Support - $70.00 per hour

Staff Support - $50.00 per hour Clerical Support - $40.00 per hour

RATE ADJUSTMENT TRIGGERS:

The above asset fees would be adjusted monthly based on the following triggers:

Should either "Average Assets per Account" or "Average Assets per CUSIP" decrease 10% in a given month from their baseline March through May 2000 averages, the basis point fee rates would be adjusted up using the formula: Previous Rate divided by .9. When/if a rate adjustment is made, both trigger ratios would be reset at new levels equal to 10% below their previous level. Subsequent adjustments to the rates would be triggered should these ratios decrease in additional 10% increments. Downward adjustments would be made to the rates using the same formula should the trigger ratios increase in 10% increments, but only to the extent that previous upward rate adjustments have been made. The basis point fee rates could not be adjusted below the original rates listed above.

               AVERAGE ASSETS PER ACCOUNT  AVERAGE ASSETS PER CUSIP
               --------------------------  -------------------------
Bank & Thrift        $         9,733           $   184,696,341
Prime Rate           $       113,660           $ 1,259,736,679
All Others           $        29,452           $    63,379,993

EXHIBIT B, p. 3

NOTES TO THE ABOVE FEE SCHEDULE

A. The above schedule does not include reimbursable expenses that are incurred on the Fund's behalf. Examples of reimbursable expenses include but are not limited to those set forth on Exhibit C to this Agreement. Reimbursable expenses are billed separately from service fees on a monthly basis.

B. Any fees or reimbursable expenses not paid within 30 days of the date of the original invoice will be charged a late payment fee of 1.5% per month until payment is received.

C. The above fees, except for those indicated by an "*", are guaranteed through May 31, 2002. All items marked by an "*" are subject to change with 60 day notice.

EXHIBIT B.1, p.1
TA2000 VOICE SYSTEM
FEE SCHEDULE

PER CALL SERVICE FEE
Utilization of DST's TA2000 Voice System is based on a service fee of $.20 per call. Each call has a maximum duration of seven (7) minutes. This charge is a flat rate regardless of the number or type of transactions that a shareholder processes during the call. A given call could result in inquiries and/or transactions being processed for various funds in the complex. Therefore, on a monthly basis, DST will report the number of inquiries and/or transactions processed by fund. A percentage of the total will be derived and reported for each fund. As a result of this process, DST will allocate the charges among the individual funds.

MULTIPLE CALL FLOWS
An additional fee of $500 per month will be charged for each additional call flow that requires different flows, functions, vocabulary, processing, rules or access method. An additional fee of $200 per month will be charged for each additional call flow that is identical in flows, functions, vocabulary, processing rules or access method.

 YEARS        CHARGE PER            CHARGE PER
  OF       CUSIP AUTHORIZED        SHAREHOLDER
SERVICE      FOR SERVICE*           ACCOUNT**
-------    ----------------        -----------
  1           $     50             $     .002
  2           $     75             $     .003
  3           $    100             $     .004

* CUSIPS ADDED TO THE SERVICE will be subject to the same minimums being charged to the other cusips in the complex at the time the cusips are added.

** THE PER ACCOUNT CHARGE is based on the total number of shareholder accounts in authorized cusips at the end of each month.

OUT OF POCKET COSTS
Each fund complex will require a unique WATS number for their shareholders to call. Each WATS number will require a specific number of trunks to service a given volume of shareholder calls. All installation and monthly usage charges associated with these will be billed through monthly out-of-pocket invoices.

EXHIBIT B.2, p. 1
NSCC FEES AND OUT-OF-POCKET EXPENSES

DST Fees

DST charges $1,500 per cusip per year for the NSCC platform

Settling Bank Fees

Fund may be charged fees by the Settling Bank at which the net settlement account resides for monthly maintenance of this account. These are negotiated directly between Fund and the Settling Bank.

NSCC Participant Fees

The NSCC charges $40 per month per management company for CPU access/shared line costs.

A combined participant base fee of $200 per month is charged for the following services:

FUND/SERV:

The NSCC charges an activity charge of $.30 per inputted transaction. Transactions include purchases, redemptions and exchanges.

NETWORKING: The NSCC charges the following activity fee:

- $.02 per account for funds paying dividends on a monthly basis

- $.01 per account for funds paying dividends other than monthly

COMMISSION SETTLEMENT: The NSCC charges the following processing fee:

- $.30 per hundred records, per month, for one to 500,000 records; there is a $50 per month minimum processing charge

- $.20 per hundred records, per month, for 500,001 to 1,000,000 records

- $.10 per hundred records, per month, for 1,000,001 records and above

Note: Participant fees are cumulative when Fund/SERV, Networking and/or Commission Settlement are used in conjunction with each other.

EXHIBIT C
REIMBURSABLE EXPENSES

Forms
Postage (to be paid in advance if so requested) Mailing Services
Computer Hardware and Software - specific to Fund or installed at remote site at Fund's direction
Telecommunications Equipment and Lines/Long Distance Charges Magnetic Tapes, Reels or Cartridges
Magnetic Tape Handling Charges
Microfiche/Microfilm/CD ROM
Freight Charges
Printing
Bank Wire and ACH Charges
Proxy Processing - per proxy mailed
not including postage

    Includes:     Proxy Card
                  Printing
                  Outgoing Envelope
                  Return Envelope
                  Tabulation and Certification
Tax Certification Mailings (e.g., W-8 & W-9)
    (Postage associated with the return
    envelope is included)
N.S.C.C. Communications Charge
    (Fund/Serv and Networking)
Record Storage (hardcopy/microfiche/on-call)
Second Site Disaster                                  Currently $.10
    Backup Fee (per account)                          through 12/31/01,
                                                      subject to annual
                                                      adjustment

Transmission of Statement Data for                    Currently $.035/per
Remote Processing                                           record
Travel, Per Diem and other Billables
    Incurred by DST personnel traveling to,
    at and from Fund at the request
    of Fund

          NAME                                                  TITLE

_____________________________                        ___________________________

_____________________________                        ___________________________

_____________________________                        ___________________________

_____________________________                        ___________________________

_____________________________                        ___________________________

_____________________________                        ___________________________

_____________________________                        ___________________________

This Exhibit may be revised by Fund by providing DST with a substitute Exhibit D. Any such substitute Exhibit B shall become effective twenty-four (24) hours after DST's receipt of the document and shall be incorporated into the Agreement.

ACKNOWLEDGMENT OF RECEIPT:

DST SYSTEMS, INC.

By: /s/ Jonathan Boehm
   ---------------------------

Title: Group VP
      ------------------------

Date: 11/30/2000
     -------------------------

LEXINGTON MONEY MARKET TRUST
PILGRIM EQUITY TRUST
Pilgrim Index Plus Protection Fund
Pilgrim MidCap Opportunities Fund
PILGRIM GROWTH OPPORTUNITIES FUND
PILGRIM MAYFLOWER TRUST
Pilgrim Growth + Value Fund
Pilgrim International Value Fund
Pilgrim Research Enhanced Index Fund
PILGRIM NATURAL RESOURCES TRUST
PILGRIM PRIME RATE TRUST
PILGRIM SMALLCAP OPPORTUNITIES FUND
PILGRIM VARIABLE PRODUCTS TRUST
Pilgrim VP Convertible Portfolio
Pilgrim VP Emerging Countries Portfolio
Pilgrim VP Financial Services Portfolio
Pilgrim VP Growth & Income Portfolio
Pilgrim VP Growth + Value Portfolio
Pilgrim VP Growth Opportunities Portfolio
Pilgrim VP High Yield Bond Portfolio
Pilgrim VP International Portfolio
Pilgrim VP International SmallCap Growth Portfolio
Pilgrim VP International Value Portfolio
Pilgrim VP LargeCap Growth Portfolio
Pilgrim VP MargnaCap Portfolio
Pilgrim VP MidCap Opportunities Portfolio
Pilgrim VP Research Enhanced Index Portfolio
Pilgrim VP SmallCap Opportunities Portfolio
Pilgrim VP Worldwide Growth Portfolio
PILGRIM FUNDS TRUST
Pilgrim European Equity Fund
Pilgrim Global Communications Fund
Pilgrim Global Information Technology Fund
Pilgrim Intermediate Bond Fund
Pilgrim Internet Fund
ING Pilgrim Money Market Fund
Pilgrim National Tax-Exempt Bond Fund
Pilgrim Tax Efficient Equity Fund
PILGRIM MUTUAL FUNDS
Pilgrim Balanced Fund
Pilgrim Convertible Fund
Pilgrim Emerging Countries Fund
Pilgrim High Yield Fund II
Pilgrim International Core Growth Fund
Pilgrim International SmallCap Growth Fund
Pilgrim LargeCap Growth Fund
Pilgrim MidCap Growth Fund

Pilgrim Money Market Fund Pilgrim SmallCap Growth Fund Pilgrim Strategic Income Fund Pilgrim Worldwide Growth Fund
PILGRIM SENIOR INCOME FUND

PILGRIM ADVISORY FUNDS, INC.
Pilgrim Asia-Pacific Equity Fund
PILGRIM BANK AND THRIFT FUND, INC.
PILGRIM EMERGING MARKETS FUND, INC.
PILGRIM GNMA INCOME FUND, INC.
PILGRIM PRECIOUS METALS FUND, INC.
PILGRIM GROWTH AND INCOME FUND, INC.
PILGRIM INVESTMENT FUNDS, INC.
Pilgrim High Yield Fund
Pilgrim MagnaCap Fund
PILGRIM INTERNATIONAL FUND, INC.,
PILGRIM RUSSIA FUND, INC.

By: /s/ Robert S. Naka
    -----------------------------

Title: Senior Vice President
       --------------------------

Date: 11/30/2000
      ---------------------------

Exhibit 99.(j)(vi)(1)

[ING FUNDS LOGO]

February 25, 2004

Nick Horvath
DST Systems, Inc.
333 West 11th St., 5th Floor
Kansas City, Missouri 64105

Dear Mr. Horvath:

Pursuant to the Agency Agreement dated November 30, 2000, as amended, between the Funds (as defined in the Agreement) and DST Systems, Inc. (the "Agreement"), we hereby notify you of our intention to retain you as Transfer Agent and Dividend Disbursing Agent to render such services to ING Evergreen Health Sciences Portfolio, ING Evergreen Omega Portfolio, ING Lifestyle Aggressive Growth Portfolio, ING Lifestyle Growth Portfolio, ING Lifestyle Moderate Growth Portfolio and ING Lifestyle Moderate Portfolio, each a new series of ING Investors Trust, ING Principal Protection Fund X and ING Principal Protection Fund XI, each a new series of ING Equity Trust, and ING VP Real Estate Portfolio, a new series of ING Variable Products Trust, (the "New Funds"), upon all of the terms and conditions set forth in the Agreement. Upon your acceptance, the Agreement will be modified to give effect to the foregoing by adding the above-mentioned New Funds to AMENDED AND RESTATED EXHIBIT A of the Agreement.

The AMENDED AND RESTATED EXHIBIT A has also been updated by the removal of ING Strategic Bond Fund, ING VP Emerging Countries Portfolio, ING VP International Portfolio and ING VP International SmallCap Portfolio as these funds have been dissolved.

Please signify your acceptance to act as Transfer Agent and Dividend Disbursing Agent under the Agreement with respect to the New Funds, by signing below.

Very sincerely,

/s/ Robert S. Naka
------------------
Robert S. Naka
Senior Vice President
ING Investors Trust
ING Equity Trust
ING Variable Products Trust

ACCEPTED AND AGREED TO:
DST Systems, Inc.

By:   /s/ Nick Horvath
      ----------------
Name: Nick Horvath

7337 E. Doubletree Ranch Rd.    Tel: 480-477-3000            ING Investors Trust
Scottsdale, AZ 85258-2034       Fax: 480-477-2700               ING Equity Trust
                                www.ingfunds.com     ING Variable Products Trust

AMENDED AND RESTATED EXHIBIT A

WITH RESPECT TO THE

AGENCY AGREEMENT

BETWEEN

THE FUNDS

AND

DST SYSTEMS, INC.

                                                                   TYPE OF              STATE OF            TAXPAYER
TAXPAYER/FUND NAME                                               ORGANIZATION         ORGANIZATION          I.D. NO.
------------------                                               ------------         ------------          --------
ING CORPORATE LEADERS TRUST FUND                                Trust                New York               13-6061925

ING EQUITY TRUST                                                Business Trust       Massachusetts          N/A
  ING Convertible Fund                                                                                      33-0552461
  ING Disciplined LargeCap Fund                                                                             06-1533751
  ING Equity and Bond Fund                                                                                  33-0552418
  ING Financial Services Fund                                                                               95-4020286
  ING Growth Opportunities Fund                                                                             04-2886865
  ING LargeCap Growth Fund                                                                                  33-0733557
  ING LargeCap Value Fund                                                                                   20-0437128
  ING MidCap Opportunities Fund                                                                             06-1522344
  ING MidCap Value Fund                                                                                     86-1048451
  ING Principal Protection Fund                                                                             86-1033467
  ING Principal Protection Fund II                                                                          86-1039030
  ING Principal Protection Fund III                                                                         86-1049217
  ING Principal Protection Fund IV                                                                          82-0540557
  ING Principal Protection Fund V                                                                           27-0019774
  ING Principal Protection Fund VI                                                                          48-1284684
  ING Principal Protection Fund VII                                                                         72-1553495
  ING Principal Protection Fund VIII                                                                        47-0919259
  ING Principal Protection Fund IX                                                                          20-0453800
  ING Principal Protection Fund X                                                                           20-0584080
  ING Principal Protection Fund XI                                                                          20-0639761
  ING Real Estate Fund                                                                                      43-1969240
  ING SmallCap Opportunities Fund                                                                           04-2886856
  ING SmallCap Value Fund                                                                                   86-1048453
  ING Tax Efficient Equity Fund                                                                             23-2978988

ING FUNDS TRUST                                                 Business Trust       Delaware               N/A
  ING Classic Money Market Fund                                                                             23-2978935
  ING GNMA Income Fund                                                                                      22-2013958
  ING High Yield Bond Fund                                                                                  23-2978938
  ING High Yield Opportunity Fund                                                                           33-0715888

                                                                   TYPE OF              STATE OF            TAXPAYER
TAXPAYER/FUND NAME                                               ORGANIZATION         ORGANIZATION          I.D. NO.
------------------                                               ------------         ------------          --------
ING FUNDS TRUST (CONTD.)
  ING Intermediate Bond Fund                                                                                52-2125227
  ING Lexington Money Market Trust                                                                          13-6766350
  ING Money Market Fund                                                                                     86-0955273
  ING National Tax-Exempt Bond Fund                                                                         23-2978941

ING INVESTMENT FUNDS, INC.                                      Corporation          Maryland               N/A
   ING MagnaCap Fund                                                                                        22-1891924

ING INVESTORS TRUST                                             Business Trust       Massachusetts          N/A
  ING American Funds Growth Portfolio                                                                       55-0839555
  ING American Funds Growth-Income Portfolio                                                                55-0839542
  ING American Funds International Portfolio                                                                55-0839952
  ING Evergreen Health Sciences Portfolio                                                                   20-0573913
  ING Evergreen Omega Portfolio                                                                             20-0573935
  ING Lifestyle Aggressive Growth Portfolio                                                                 20-0573999
  ING Lifestyle Growth Portfolio                                                                            20-0573986
  ING Lifestyle Moderate Growth Portfolio                                                                   20-0573968
  ING Lifestyle Moderate Portfolio                                                                          20-0573946

ING MAYFLOWER TRUST                                             Business Trust       Massachusetts          N/A
  ING Growth + Value Fund                                                                                   06-1465531
  ING International Value Fund                                                                              06-1472910

ING MUTUAL FUNDS                                                Business Trust       Delaware               N/A
  ING Emerging Countries Fund                                                                               33-0635177
  ING Foreign Fund                                                                                          72-1563685
  ING Global Equity Dividend Fund                                                                           55-0839557
  ING Global Real Estate Fund                                                                               86-1028620
  ING International Fund                                                                                    22-3278095
  ING International SmallCap Growth Fund                                                                    33-0591838
  ING Precious Metals Fund                                                                                  13-2855309
  ING Russia Fund                                                                                           22-3430284
  ING Worldwide Growth Fund                                                                                 33-0552475

ING PRIME RATE TRUST                                            Business Trust       Massachusetts          95-6874587

ING SENIOR INCOME FUND                                          Business Trust       Delaware               86-1011668

ING VARIABLE INSURANCE TRUST                                    Business Trust       Delaware               N/A
  ING GET U.S. Core Portfolio - Series 1                                                                    43-2007006
  ING GET U.S. Core Portfolio - Series 2                                                                    41-2107140
  ING GET U.S. Core Portfolio - Series 3                                                                    32-0090501

                                                                   TYPE OF              STATE OF            TAXPAYER
TAXPAYER/FUND NAME                                               ORGANIZATION         ORGANIZATION          I.D. NO.
------------------                                               ------------         ------------          --------
ING VARIABLE INSURANCE TRUST (CONT.)
  ING GET U.S. Core Portfolio - Series 4                                                                    32-0090502
  ING GET U.S. Core Portfolio - Series 5                                                                    32-0090504
  ING GET U.S. Core Portfolio - Series 6                                                                    32-0090505
  ING GET U.S. Opportunity Portfolio - Series 1                                                             43-2007032
  ING GET U.S. Opportunity Portfolio - Series 2                                                             TBD
  ING VP Worldwide Growth Portfolio                                                                         25-6705433

ING VARIABLE PRODUCTS TRUST                                     Business Trust       Massachusetts          N/A
  ING VP Convertible Portfolio                                                                              86-1028318
  ING VP Disciplined LargeCap Fund                                                                          06-6397003
  ING VP Financial Services Portfolio                                                                       86-1028316
  ING VP Growth + Value Portfolio                                                                           06-6396994
  ING VP Growth Opportunities Portfolio                                                                     06-6493759
  ING VP High Yield Bond Portfolio                                                                          06-6396995
  ING VP International Value Portfolio                                                                      06-6453493
  ING VP LargeCap Growth Portfolio                                                                          86-1028309
  ING VP MagnaCap Portfolio                                                                                 06-6493762
  ING VP MidCap Opportunities Portfolio                                                                     06-6493760
  ING VP Real Estate Portfolio                                                                              20-0453833
  ING VP SmallCap Opportunities Portfolio                                                                   06-6397002

ING VP EMERGING MARKETS FUND, INC.                              Corporation          Maryland               06-1287459

ING VP NATURAL RESOURCES TRUST                                  Business Trust       Massachusetts          22-2932678

USLICO SERIES FUND                                              Business Trust       Massachusetts          N/A
  The Asset Allocation Portfolio                                                                            54-1499147
  The Bond Portfolio                                                                                        54-1499901
  The Money Market Portfolio                                                                                54-1499149
  The Stock Portfolio                                                                                       54-1499398

Last Approved: February 25, 2004

Exhibit 99.(k)(i)

AMENDED AND RESTATED

ADMINISTRATION AGREEMENT

THIS ADMINISTRATION AGREEMENT which was made as of the 20th day of October, 1992, amended and restated as of February 17, 1995, April 7, 1995, May 2, 1996, April, 7, 1997, and February 2, 1999, and as further amended and restated on the 27th day of April, 2000, by and between PILGRIM PRIME RATE TRUST (formerly Pilgrim America Prime Rate Trust), a Massachusetts Business Trust (hereinafter referred to as the "Trust"), and PILGRIM GROUP, INC. (formerly Pilgrim America Group, Inc.), a corporation organized and existing under the laws of Delaware (hereinafter called the "Administrator").

W I T N E S S E T H:

WHEREAS, the Trust is a closed-end management investment company, registered as such under the Investment Company Act of 1940; and

WHEREAS, the Trust's name was changed to Pilgrim Prime Rate Trust on November 16, 1998; and

WHEREAS, the Administrator's name was changed to Pilgrim Group, Inc. on October 30, 1998; and

WHEREAS, the Administrator is engaged in the business of providing management and administrative services, as an independent contractor; and

WHEREAS, the Trust desires to retain the Administrator to furnish management and administrative services to the Trust pursuant to the terms and provisions of this Agreement, and the Administrator is interested in providing said services.

NOW, THEREFORE, in consideration of the covenants and the mutual promises hereinafter set forth, the parties hereto, intending to be legally bound hereby, mutually agree as follows:

1. The Trust hereby employs the Administrator and the Administrator hereby accepts such employment, to render management and administrative services to the Trust, subject to the supervision and direction of the Trust's Board of Trustees. The Administrator shall furnish to the Trust the services of executive and administrative personnel to supervise the performance of all administrative functions concerning the operation of the Trust, other than the investment management function. The Administrator shall, as part of its duties hereunder
(i) monitor the provisions of the loan agreements and any agreements with respect to participations and assignments and be responsible for recordkeeping with respect to senior loans in the Trust's portfolio; (ii) administer the Trust's corporate affairs including preparing and filing all reports required by the Commonwealth of Massachusetts; (iii) furnish the Trust such office space, equipment, and personnel as is needed by the Trust; (iv) furnish clerical and bookkeeping services as are needed by the Trust; (v) prepare and furnish annual and other reports to shareholders, the Securities and Exchange Commission, the New York Stock Exchange and to any appropriate governmental body; (vi) prepare and file any federal, state and local income tax returns as requested by the Trust; (vii) provide shareholder services as are needed by the Trust; (viii) permit its officers and employees to serve without compensation as trustees or officers of the Trust if elected to such positions; and (ix) in general, supervise the performance of all

administrative functions of the Trust, subject to the ultimate supervision and direction of the Trust's Board of Trustees.

2. The Administrator shall, for all purposes herein, be deemed to be an independent contractor, and shall, unless otherwise expressly provided and authorized, have no authority to act for or represent the Trust in any way, or in any way be deemed an agent for the Trust. It is expressly understood and agreed that the services to be rendered by the Administrator to the Trust under the provisions of this Agreement are not to be deemed exclusive, and the Administrator shall be free to render similar or different services to others so long as its ability to render the services provided for in this Agreement shall not be impaired thereby.

3. The Administrator agrees to use its best judgment and efforts in performing the services to the Trust as contemplated hereunder, and for this purpose the Administrator shall, at its own expense, maintain such staff and employ or retain such personnel and consult with such other persons as it shall from time to time determine to be necessary to the performance of its obligations under this Agreement.

4. In performing the administrative services hereunder, the Administrator shall at all times comply with the applicable provisions of the Investment Company Act of 1940 and any other federal or state securities laws.

5. The Administrator shall bear and pay the costs of rendering the services to be performed by it under this Agreement. Without limiting the generality of the foregoing, the Administrator shall bear the following expenses: the salaries and expenses of all personnel of the Trust and the Administrator, except for the fees and expenses of Trustees not affiliated with the Trust or the Administrator; costs to prepare information for determination of net asset value by the Trust's recordkeeping and accounting agent; expenses to maintain the Trust's books and

records that are not maintained by the Trust's Manager, Custodian or Transfer Agent; costs incurred to assist in the preparation of financial information for the Trust's income tax returns, proxy statements, quarterly and annual shareholder reports; expenses to provide shareholder services in connection with the Trust's dividend reinvestment and cash purchase plans; expenses to provide shareholder services in preparation of tender offers, if any, or to shareholders proposing to transfer their shares to a third party; and all expenses incurred by the Administrator or by the Trust in rendering the administrative services pursuant to the terms of this Agreement.

6. The Trust shall bear and pay for all other expenses of its operation, except for those expenses expressly assumed by the Manager to the Trust pursuant to an Investment Management Agreement between the Manager and the Trust, including, but not limited to, the fees payable to the Manager; the fees and expenses of Trustees who are not affiliated with the Manager or the Administrator; the fees and certain expenses of the Trust's Custodian and Transfer Agent, including the cost of providing records to the Administrator in connection with its obligation of maintaining required records of the Trust; the charges and expenses of the Trust's legal counsel and independent accountants; commissions and any issue or transfer taxes chargeable to the Trust in connection with its transactions; all taxes and corporate fees payable by the Trust to governmental agencies; the fees of any trade association of which the Trust is a member; the cost of share certificates representing shares of the Trust; organizational and offering expenses of the Trust and the fees and expenses involved in registering and maintaining registration of the Trust and of its shares with the Securities and Exchange Commission, the New York Stock Exchange and qualifying its shares under applicable state securities laws including the preparation and printing of the Trust's registration statements and prospectuses for such purposes; allocable communications expenses, with respect to investor services and all expenses

of stockholders and Trustees' meetings and of preparing, printing and mailing reports, proxy statements and prospectuses to stockholders; the cost of insurance; and litigation and indemnification expenses and extraordinary expenses not incurred in the ordinary course of the Trust's business.

7. To the extent the Administrator incurs any costs or performs any services which are an obligation of the Trust, as set forth herein, the Trust shall promptly reimburse the Administrator for such costs and expenses. To the extent the services for which the Trust is obligated to pay are performed by the Administrator, the Administrator shall be entitled to recover from the Trust only to the extent of its costs for such services.

8. (a) The Trust agrees to pay to the Administrator, and the Administrator agrees to accept, as full compensation for all administrative services furnished or provided to the Trust and as full reimbursement for all expenses assumed by the Administrator, an administration fee computed at the annual rate of 0.25% of the average daily net assets of the Trust, plus the proceeds of any outstanding borrowings.

(b) The administration fee shall be accrued daily by the Trust and paid to the Administrator at the end of each calendar month.

9. The Administrator agrees that neither it nor any of its officers or employees shall take any short position in the capital stock of the Trust. This prohibition shall not prevent the purchase of such shares by any of the officers and directors or bona fide employees of the Administrator or any trust, pension, profit-sharing or other benefit plan for such persons or affiliates thereof.

10. Nothing herein contained shall be deemed to require the Trust to take any action contrary to its Trust Indenture or any applicable statute or regulation, or to relieve or deprive the

Board of Trustees of the Trust of its responsibility for and control of the conduct of the affairs of the Trust.

11. (a) In the absence of willful misfeasance, bad faith, gross negligence, or reckless disregard of obligations or duties hereunder on the part of the Administrator, the Administrator shall not be subject to liability to the Trust or to any shareholder of the Trust for any act or omission in the course of, or connected with, rendering services hereunder or for any losses that may be sustained in the purchase, holding or sale of any security by the Trust.

(b) Notwithstanding the foregoing, the Administrator agrees to reimburse the Trust for any and all costs, expenses, and counsel and Trustees' fees reasonably incurred by the Trust in the preparation, printing and distribution of amendments to its registration statement, holding of meetings of its shareholders or Trustees, the conduct of factual investigations, any legal or administrative proceedings including any applications for exemptions or determinations by the Securities and Exchange Commission which the Trust incurs as the result of action or inaction of the Administrator or any of its shareholders where the action or inaction necessitating such expenditures (i) is directly or indirectly related to any transactions or proposed transaction in the shares or control of the Administrator or its affiliates (or litigation relates to any pending or proposed future transaction in such shares or control) which shall have been undertaken without the prior, express approval of the Trust's Board of Trustees; or (ii) is within the sole control of the Administrator or any of its affiliates or any of their officers, directors, employees or shareholders. The Administrator shall not be obligated pursuant to the provisions of this Subparagraph 11(b), to reimburse the Trust for any expenditures related to the institution of an administrative proceeding or civil litigation by the Trust or a Trust shareholder seeking to recover all or a portion of the proceeds derived by any shareholder of the Administrator or any of its

affiliates from the sale of his shares of the Administrator, or similar matters. So long as this Agreement is in effect, the Administrator shall pay to the Trust the amount due for expenses subject to this Subparagraph 11(b) within thirty
(30) days after a bill or statement has been received by the Trust therefor. This provision shall not be deemed to be a waiver of any claim the Trust may have or may assert against the Administrator or others or costs, expenses, or damages heretofore incurred by the Trust for costs, expenses, or damages by the Trust may hereafter incur which are not reimbursable to it hereunder.

(c) No provision of this Agreement shall be construed to protect any Trustee or officer of the Trust, or the Administrator, from liability in violation of Section 17(h) and (i) of the Investment Company Act of 1940, as amended.

12. (a) This Agreement shall become effective at the close of business on the date hereof and shall continue in effect from year to year thereafter so long as such continuation is specifically approved at least annually by (i) the Board of Trustees of the Trust, and (ii) the vote of a majority of the Trustees of the Trust who are not parties to this Agreement or interested persons thereof, cast in person at a meeting called for the purpose of voting on such approval.

(b) This Agreement may be terminated at any time, without penalty, by the Trust by giving 60 days' written notice of such termination to the Administrator at its principal place of business, or may be terminated at any time by the Administrator by giving 60 days' written notice of such termination to the Trust at its principal place of business.

13. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule, or otherwise, the remainder of this Agreement shall not be affected thereby.

14. This Agreement may be amended only by written instrument signed by the parties hereto.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in duplicate by their respective officers on the day and year first above written.

PILGRIM PRIME RATE TRUST

Attest:                                    By: /s/ Daniel A. Norman
                                              ---------------------
                                           Senior Vice President

/s/ Robert S. Naka
------------------
Vice President

PILGRIM GROUP, INC.

                                           By: /s/ James M. Hennessy
                                              ----------------------
Attest:                                    Executive Vice President
                                           and Secretary

/s/ Robert S. Naka
------------------
Vice President

Exhibit 99.(k)(iii)

Execution Copy

REVOLVING CREDIT AND SECURITY AGREEMENT

among

ING PRIME RATE TRUST,
as Borrower

CRC FUNDING, LLC
as Conduit Lender

CITIBANK, N.A.,
as Secondary Lender

and

CITICORP NORTH AMERICA, INC.,
as Agent

Dated as of July 16, 2003

SIDLEY AUSTIN BROWN & WOOD LLP

                                    ARTICLE I
                     DEFINITIONS AND RULES OF CONSTRUCTION

SECTION 1.01.     DEFINITIONS                                                    1

SECTION 1.02.     RULES OF CONSTRUCTION                                         25

SECTION 1.03.     COMPUTATION OF TIME PERIODS                                   25

                                   ARTICLE II
                            ADVANCES TO THE BORROWER

SECTION 2.01.     ADVANCE FACILITY                                              26

SECTION 2.02.     MAKING OF ADVANCES                                            26

SECTION 2.03.     NOTELESS AGREEMENT; EVIDENCE OF INDEBTEDNESS                  27

SECTION 2.04.     MATURITY OF THE ADVANCES                                      28

SECTION 2.05.     PREPAYMENT OF THE ADVANCES                                    28

SECTION 2.06.     YIELD                                                         29

SECTION 2.07.     INCREASED COSTS                                               29

SECTION 2.08.     COMPENSATION                                                  31

SECTION 2.09.     ADDITIONAL YIELD ON EURODOLLAR RATE ADVANCES                  31

SECTION 2.10.     TERMINATION OR REDUCTION OF THE TOTAL COMMITMENT              31

SECTION 2.11.     RESCISSION OR RETURN OF PAYMENT                               31

SECTION 2.12.     FEES PAYABLE BY BORROWER                                      32

SECTION 2.13.     POST-DEFAULT INTEREST                                         32

SECTION 2.14.     PAYMENTS                                                      32

SECTION 2.15.     RATABLE PAYMENTS                                              33

SECTION 2.16.     BORROWER'S OBLIGATIONS ABSOLUTE                               33

                                   ARTICLE III
                              CONDITIONS PRECEDENT

SECTION 3.01.     CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF THIS AGREEMENT   33

SECTION 3.02.     CONDITIONS PRECEDENT TO ALL ADVANCES                          35

                                   ARTICLE IV
                         REPRESENTATIONS AND WARRANTIES

SECTION 4.01.     REPRESENTATIONS AND WARRANTIES OF THE BORROWER                35

                                    ARTICLE V
                                    COVENANTS

SECTION 5.01.     AFFIRMATIVE COVENANTS OF THE BORROWER                         39

SECTION 5.02.     NEGATIVE COVENANTS OF THE BORROWER                            44

                                   ARTICLE VI
                                EVENTS OF DEFAULT

SECTION 6.01.     EVENTS OF DEFAULT                                             46

                                   ARTICLE VII
                PLEDGE OF PLEDGED COLLATERAL; RIGHTS OF THE AGENT

SECTION 7.01.     SECURITY INTERESTS                                            50

SECTION 7.02.     SUBSTITUTION OF COLLATERAL AND RELEASE OF SECURITY INTEREST   51

SECTION 7.03.     APPLICATION OF PROCEEDS                                       52

SECTION 7.04.     RIGHTS AND REMEDIES UPON EVENT OF DEFAULT                     53

SECTION 7.05.     REMEDIES CUMULATIVE                                           54

SECTION 7.06.     ENFORCEMENT OF REMEDIES UNDER THE CUSTODIAL AGREEMENT AND
                  LOAN DOCUMENTS                                                54

                                  ARTICLE VIII
                                    THE AGENT

SECTION 8.01.     AUTHORIZATION AND ACTION                                      55

SECTION 8.02.     DELEGATION OF DUTIES                                          55

SECTION 8.03.     AGENT'S RELIANCE, ETC.                                        55

SECTION 8.04.     INDEMNIFICATION                                               56

SECTION 8.05.     SUCCESSOR AGENT                                               56

                                   ARTICLE IX
                                  MISCELLANEOUS

SECTION 9.01.     NO WAIVER; MODIFICATIONS IN WRITING                           57

SECTION 9.02.     NOTICES, ETC.                                                 57

SECTION 9.03.     TAXES                                                         58

SECTION 9.04.     COSTS AND EXPENSES; INDEMNIFICATION                           60

SECTION 9.05.     EXECUTION IN COUNTERPARTS                                     61

SECTION 9.06.     ASSIGNABILITY                                                 61

SECTION 9.07.     GOVERNING LAW                                                 63

SECTION 9.08.     SEVERABILITY OF PROVISIONS                                    63

SECTION 9.09.     CONFIDENTIALITY                                               63

SECTION 9.10.     MERGER                                                        64

SECTION 9.11.     NO PROCEEDINGS; NO RECOURSE                                   65

SECTION 9.12.     SURVIVAL OF REPRESENTATIONS AND WARRANTIES                    65

SECTION 9.13.     LOAN DOCUMENTS                                                65

SECTION 9.14.     SUBMISSION TO JURISDICTION; WAIVERS                           66

SECTION 9.15.     E-MAIL REPORTS                                                66

SECTION 9.16.     WAIVER OF JURY TRIAL                                          67

SECTION 9.17.     SEVERAL OBLIGATIONS                                           67

SECTION 9.18.     LIMITATION ON LIABILITY                                       67

Schedule I    Form of Investor Report
Schedule II   Form of Weekly Portfolio Report
Schedule III  Scope of Audit Procedures
Schedule IV   Industry Classifications

                                    EXHIBITS

EXHIBIT A     Form of Advance Note (if requested)
EXHIBIT B     Form of Notice of Borrowing
EXHIBIT C     Form of Assignment and Acceptance

REVOLVING CREDIT AND SECURITY AGREEMENT

REVOLVING CREDIT AND SECURITY AGREEMENT, dated as of July 16, 2003
among CRC FUNDING, LLC, as the Conduit Lender, CITIBANK, N.A., the other Secondary Lenders (as hereinafter defined) from time to time parties hereto, CITICORP NORTH AMERICA, INC., as agent for the Secured Parties (as hereinafter defined) (in such capacity, together with its successors and assigns, the "Agent") and ING PRIME RATE TRUST (together with its permitted successors and assigns, the "Borrower").

W I T N E S S E T H:

WHEREAS, the Borrower desires that the Conduit Lender and the Secondary Lenders from time to time make advances to the Borrower on the terms and subject to the conditions set forth in this Agreement; and

WHEREAS, the Conduit Lender and the Secondary Lenders are willing to make such advances to the Borrower for such purposes on the terms and subject to the conditions set forth in this Agreement;

NOW, THEREFORE, in consideration of the premises and of the mutual covenants herein contained, the parties hereto agree as follows:

ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION

SECTION 1.01. DEFINITIONS.

As used in this Agreement, the following terms shall have the meanings indicated:

"ADJUSTED ASSET VALUE" means in respect of any Borrowing Base Eligible Asset, as of any date of determination, an amount equal to the product of (i) the Asset Value of such Borrowing Base Eligible Asset as of such date, and (ii) the applicable Advance Rate for such Borrowing Base Eligible Asset.

"ADMINISTRATION AGREEMENT" means the Amended and Restated Administration Agreement dated as of October 20, 1992, as amended and restated as of February 17, 1995, April 7, 1995, May 2, 1996, April 7, 1997, February 2, 1999 and April 27, 2000, and as amended as of November 2, 2001 between the Administrator and the Borrower, as the same may be amended, supplemented, waived or modified as permitted under this Agreement.

"ADMINISTRATOR" means ING Funds Services, LLC (formerly known as Pilgrim Group, Inc.), together with its permitted successors and assigns.

"ADMINISTRATOR LETTER AGREEMENT" means the Letter Agreement dated as of the date hereof from the Administrator to the Agent on behalf of the Secured Parties, as the same may from time to time be amended, supplemented, waived or modified.

"ADVANCE" means each advance by the Conduit Lender or a Secondary Lender to the Borrower on a Borrowing Date pursuant to ARTICLE II; provided that if the Conduit Lender assigns a portion of any Advance made by it to a Lender pursuant to an Asset Purchase Agreement or otherwise, the portion of such Advance retained by the Conduit Lender and the portion of such Advance acquired by such Lender shall each be deemed to constitute a separate Advance for purposes of this Agreement.

"ADVANCE NOTE" means each promissory note, if any, issued by the Borrower to the Conduit Lender or a Secondary Lender in accordance with the provisions of SECTION 2.03, substantially in the form of EXHIBIT A hereto, as the same may from time to time be amended, supplemented, waived or modified.

"ADVANCE RATE" means (i) in respect of Cash, 100%, (ii) in respect of Eligible Commercial Paper Notes, Eligible Money Market Funds and Eligible Government Securities, 95%, (iii) in respect of Class A Loan Assets, 80%, (iv) in respect of Class B Loan Assets, 70%, (v) in respect of Class C Loan Assets, 60%, (vi) in respect of Class D Loan Assets, 50%, (vii) in respect of Class A Bond Asset, 80%, (viii) in respect of Class B Bond Assets, 72%, (ix) in respect of Class C Bond Assets, 62%, (x) in respect of Class D Bond Assets, 58%, (xi) in respect of Class E Bond Assets, 45%, and (xii) in respect of Class F Bond Assets, 28%.

"ADVERSE CLAIM" means any Lien or other right, claim, encumbrance or any other type of preferential arrangement in, of or on any Person's assets or properties in favor of any other Person, other than Permitted Liens.

"ADVISER" means ING Investments, LLC, together with its permitted successors and assigns.

"ADVISER LETTER AGREEMENT" means the Letter Agreement dated as of the date hereof from the Adviser to the Agent on behalf of the Secured Parties, as the same may from time to time be amended, supplemented, waived or modified.

"ADVISORY AGREEMENT" means the Investment Management Agreement, September 1, 2000, between the Adviser and the Borrower, as the same may be amended, supplemented, waived or modified as permitted under this Agreement.

"AFFECTED PERSON" means any Lender, any Secondary Lender, any other entity which enters into a commitment to make or purchase any Advance or any interest therein, any of their respective Affiliates, any corporation controlling any Lender or any Secondary Lender and any permitted assignee or participant of any Lender or any Secondary Lender.

"AFFILIATE" means, in respect of a referenced Person, another Person controlling, controlled by or under common control with such referenced Person (which in the case of the Conduit Lender and the Agent, shall also include any entity which is a special purpose entity that

issues promissory notes and has a relationship to the Agent comparable to that of the Conduit Lender). The terms "control," "controlling," "controlled" and the like mean the direct or indirect possession of the power to direct or cause the direction of the management or policies of a Person or the disposition of its assets or properties, whether through ownership, by contract, arrangement or understanding, or otherwise.

"AGENT" has the meaning assigned to such term in the introduction to this Agreement.

"AGENT'S ACCOUNT" means the special account (account number 40517805, ABA No. 021000089) of the Agent maintained at the office of Citibank at its Principal Office or to such other account in the United States as the Agent shall designate in writing to the Borrower.

"AGGREGATE CUSTODIAN'S ADVANCE AMOUNT" means the sum of (i) the aggregate unpaid Dollar amount of all outstanding Custodian's Overdraft Advances of cash, (ii) the aggregate Value of all Custodian's Overdraft Advances of assets (other than cash) to the extent not reimbursed by the Borrower, and (iii) the accrued and unpaid interest, if any, on the amounts set forth in CLAUSES (i) and (ii) above.

"AGREEMENT" means this Revolving Credit and Security Agreement, as the same may from time to time be amended, supplemented, waived or modified.

"ALTERNATE BASE RATE" means in respect of any Advance for any Settlement Period, a fluctuating interest rate per annum as shall be in effect from time to time, which rate shall be at all times equal to the sum of (i) the Applicable Margin PLUS (ii) the highest of:

(a) the Base Rate;

(b) one-half of one percent (0.5%) above the latest three-week moving average of secondary market morning offering rates in the United States for three-month certificates of deposit of major United States money market banks, such three-week moving average being determined weekly on each Monday (or, if such day is not a Business Day, on the next succeeding Business Day) for the three-week period ending on the previous Friday by Citibank on the basis of such rates reported by certificate of deposit dealers to and published by the Federal Reserve Bank of New York or, if such publication shall be suspended or terminated, on the basis of quotations for such rates received by Citibank from three New York certificate of deposit dealers of recognized standing selected by Citibank, in either case, adjusted to the nearest 1/16 of one percent or, if there is no nearest 1/16 of one percent, to the next higher 1/16 of one percent; and

(c) one half of one percent (0.5%) per annum above the Federal Funds Rate.

"APPLICABLE LAW" means any Law of any Authority, including, without limitation, all Federal and state banking or securities laws, to which the Person in question is subject or by which it or any of its property is bound.

"APPLICABLE MARGIN" means, with respect to the Eurodollar Rate and the Alternate Base Rate, 1.00% per annum.

"ASSET COVERAGE TEST" means, as of any date of determination, the Borrower's "senior securities representing indebtedness" (as defined in
Section 18(g) of the Investment Company Act) have "asset coverage" (as defined in Section 18(h) of the Investment Company Act) of at least 300% (computed on such date of determination regardless of whether or not dividends or distributions are being made on such date, or whether Debt is being incurred on such date).

"ASSET PURCHASE AGREEMENT" means the Asset Purchase Agreement entered into by a Secondary Lender (other than Citibank) concurrently with the Assignment and Acceptance pursuant to which such Secondary Lender became party to this Agreement.

"ASSETS" means a collective reference to all items which would be classified as an "asset" on the balance sheet of the Borrower in accordance with GAAP.

"ASSET VALUE" means, as of any day of determination (i) in respect of Cash, the amount of such Cash, and (ii) in respect of any other Asset, the Value of such Asset computed in the manner as such Value is required to be computed by the Borrower in accordance with the Prospectus and in accordance with Applicable Law, including without limitation the Investment Company Act; PROVIDED, that the Asset Value of any Asset shall be net of the Borrower's liabilities relating thereto, including without limitation all of the Borrower's obligations to pay any unpaid portion of the purchase price thereof; PROVIDED, FURTHER, that for any Asset for which independent reliable market quotations (which may consist of only an independent dealer quotation) are not available (or which is not otherwise valued for the Borrower by an independent recognized pricing source), the Asset Value of such Asset shall be deemed zero for purposes of this definition.

"ASSIGNEE RATE" means in respect of any Advance by a Secondary Lender or acquired by a Lender (other than the Conduit Lender) for any Settlement Period an interest rate per annum equal to the sum of the Applicable Margin plus the Eurodollar Rate for such Settlement Period; PROVIDED, HOWEVER, that in case of:

(i) any Settlement Period on or prior to the first day of which the applicable Lender (other than the Conduit Lender) or the applicable Secondary Lender shall have notified the Agent that the introduction of or any change in or in the interpretation of any law or regulation makes it unlawful, or any central bank or other governmental authority asserts that it is unlawful, for such Lender or such Secondary Lender to fund such Advance at the Assignee Rate set forth above (and such Lender or such Secondary Lender shall not have subsequently notified the Agent that such circumstances no longer exist),

(ii) any Settlement Period of one to (and including) 27 days,

(iii) any Settlement Period as to which the Agent receives notice after 12:00 noon (New York City time) on the second Business Day preceding the first

day of such Settlement Period, that such Advance will not be funded by the Conduit Lender through the issuance of promissory notes, or

(iv) any Settlement Period for which the aggregate principal amount of all outstanding Advances is less than $1,000,000,

solely with respect to the affected Lender's or Secondary Lender's pro rata share of such Advances in the case of CLAUSE (i) above, but with respect to the aggregate principal amount of such Advance in the case of CLAUSES (ii) through
(iv) above, the "Assignee Rate" for such Settlement Period shall be an interest rate per annum equal to the Alternate Base Rate in effect on the first day of such Settlement Period.

"ASSIGNMENT AND ACCEPTANCE" means the Assignment and Acceptance, in substantially the form of EXHIBIT C hereto, entered into by a Secondary Lender, any Eligible Assignee and the Agent, and, if required by the terms of
SECTION 9.06(b), the Borrower, pursuant to which such Eligible Assignee may become a party to this Agreement.

"AUTHORITY" means any governmental or quasi-governmental authority (including without limitation the National Association of Securities Dealers, the stock exchanges, the SEC and any accounting board or authority (whether or not a part of government) which is responsible for the establishment or interpretation of national or international accounting principals, in each case whether foreign or domestic), whether executive, legislative, judicial, administrative or other, or any combination thereof, including, without limitation, any Federal, state, territorial, county, municipal or other government or governmental or quasi-governmental agency, arbitrator, board, body, branch, bureau, commission, corporation, court, department, instrumentality, master, mediator, panel, referee, system or other political unit or subdivision or other entity of any of the foregoing, whether domestic or foreign, having the force of law.

"AUTHORIZED OFFICER" means the president, the executive vice president, the senior vice president, vice president, treasurer, assistant treasurer or any other duly authorized officer of the Borrower; PROVIDED, that the Agent shall have received a manually signed certificate of the Secretary of the Borrower as to the incumbency of, and bearing a manual specimen signature of, such duly authorized officer.

"AUTHORIZED SIGNATORY" means any Authorized Officer or any duly authorized employee of ING Investments, LLC, PROVIDED, that the Agent shall have received a manually signed certificate of the Secretary of the Borrower as to the incumbency of, and bearing a specimen signature of, such duly authorized person or employee.

"BASE RATE" means the rate of interest from time to time announced publicly by Citibank at its Principal Office as its base rate. The Base Rate is a reference rate and does not necessarily represent the lowest or best rate actually charged to any customer of Citibank.

"BENEFIT ARRANGEMENT" means at any time an employee benefit plan within the meaning of Section 3(3) of ERISA which is subject to the provisions of Title I of ERISA and is not a Plan or a Multiemployer Plan and which is maintained or otherwise contributed to by any member of the ERISA Group.

"BOND ASSET" means any Asset that is a direct interest in a non-governmental bond obligation.

"BORROWER" has the meaning assigned to such term in the introduction to this Agreement.

"BORROWER INFORMATION" has the meaning assigned to such term in
SECTION 9.09(c).

"BORROWER OBLIGATIONS" means all indebtedness, whether absolute, fixed or contingent, at any time or from time to time owing by the Borrower to any Secured Party under or in connection with this Agreement or any other Program Document, including without limitation, all amounts payable by the Borrower in respect of the Advances, with interest thereon, and the amounts payable under SECTIONS 2.05, 2.06, 2.07, 2.08, 2.09, 2.11, 2.12, 2.13, 7.04(b), 9.03 and 9.04 of this Agreement.

"BORROWER REPRESENTATIVES" has the meaning assigned to such term in
SECTION 9.09(b).

"BORROWER'S ACCOUNT" means the special account (account number 5568-37-00, ABA No. 011-000-028) of the Borrower maintained with the Custodian, or such other account as the Borrower shall from time to time designate in writing to the Agent.

"BORROWING BASE" means on the date any determination thereof is made, an amount equal to (i) the aggregate Adjusted Asset Value of all Eligible Collateral as of such date of determination MINUS (ii) the Borrowing Base Excess Amount as of such date of determination.

"BORROWING BASE ELIGIBLE ASSET" means Cash, any Eligible Loan Asset, any Eligible Credit-Linked Note, any Eligible Bond Asset, an Eligible Commercial Paper Note, Eligible Money Market Funds and any Eligible Government Security which the Borrower is permitted to purchase in accordance with the Investment Policies and Restrictions which are free and clear of all Adverse Claims; PROVIDED that such Asset does not constitute (i) a Derivative Transaction, Margin Stock, an Equity Security, a Non-OECD Asset or a Foreign Currency Asset,
(ii) an Asset which is the subject of a reverse repurchase agreement, dollar roll, securities lending transaction or other Derivatives Transaction (other than Derivatives Transactions entered into solely to protect against interest rate risk which have not been entered into for speculative purposes), including, without limitation, any cash or other Asset maintained in a segregated account with the Custodian relating to any outstanding reverse repurchase agreement entered into by the Borrower; or (iii) an Asset held by a sub-custodian of the Custodian which is not located in the United States.

"BORROWING BASE EXCESS AMOUNT" means as of any date any determination thereof is made, an amount equal to the sum (without duplication) of:

(i) the amount by which the aggregate Adjusted Asset Value of all Eligible Collateral (other than Cash and Eligible Government Securities, but including Eligible Commercial Paper Notes and Eligible Money Market Funds) issued or

Guaranteed by or owing from any Person (together with all Affiliates of such Person), exceeds five percent (5%) of the aggregate Adjusted Asset Value of all Eligible Collateral;

PLUS (ii) the amount by which the aggregate Adjusted Asset Value of all Eligible Collateral issued or Guaranteed by or owing from one or more Persons in a single Industry Class, exceeds twenty percent (20%) of the aggregate Adjusted Asset Value of all Eligible Collateral;

PLUS (iii) the amount by which the aggregate Adjusted Asset Value of all Eligible Collateral which constitute Foreign Assets exceeds twenty-five percent (25%) of the aggregate Adjusted Asset Value of all Eligible Collateral;

PLUS (iv) the amount by which the aggregate Adjusted Asset Value of all Eligible Collateral which constitute Foreign Assets relating to Obligors in any single OECD Country (other than the United States) exceeds ten percent (10%) of the aggregate Adjusted Asset Value of all Eligible Collateral;

PLUS (v) the amount by which the aggregate Adjusted Asset Value of all Eligible Collateral which constitutes Distressed Loan Assets or Distressed Bond Assets exceeds ten percent (10%) of the aggregate Adjusted Asset Value of all Eligible Collateral;

PLUS (vi) the amount by which the aggregate Adjusted Asset Value of all Loan Assets which constitute Eligible Collateral which constitute participation interests purchased or otherwise acquired from any Selling Institution (together with all Affiliates of such Selling Institution), exceeds ten percent (10%) of the aggregate Adjusted Asset Value of all Eligible Collateral;

PLUS (vii) the amount by which the aggregate Adjusted Asset Value of all Eligible Collateral which constitutes Unsecured Loan Assets exceeds ten percent (10%) of the aggregate Adjusted Asset Value of all Eligible Collateral;

PLUS (viii) the amount by which the aggregate Adjusted Asset Value of all Eligible Collateral which constitutes Loan Assets in respect of which the interest payable on the principal amount thereof is not calculated by reference to a Floating Rate, exceeds ten percent (10%) of the aggregate Adjusted Asset Value of all Eligible Collateral;

PLUS (ix) the aggregate maximum unused commitments of the Borrower to fund advances or make extensions of credit under the Loan Documents relating to the Pledged Collateral;

PLUS (x) the amount by which the aggregate Adjusted Asset Value of all Eligible Collateral which constitute Eligible Credit-Linked Notes exceeds ten percent (10%) of the aggregate Adjusted Asset Value of all Eligible Collateral; and

PLUS (xi) the amount by which the aggregate Adjusted Asset Value of all Eligible Collateral which constitute Class E Bond Assets or Class F Bond Assets exceeds twenty percent (20%) of the aggregate Adjusted Asset Value of all Eligible Collateral.

"BORROWING BASE TEST" means as of any date of determination that the Borrowing Base shall be equal to or greater than the Credits Outstanding.

"BORROWING DATE" has the meaning assigned to such term in
SECTION 2.02.

"BUSINESS DAY" means any day on which (i) banks are not authorized or required to close in New York, New York or the New York Stock Exchange is not authorized or required to close, and (ii) if this definition of "Business Day" is utilized in connection with a Eurodollar Rate Advance, dealings in dollar deposits are carried out in the London interbank market.

"CASH" means a demand deposit of United States Dollars immediately available on the day in question in an account maintained by the Custodian and in respect of which all actions have been taken under this Agreement and the Control Agreement to create and perfect in the Agent, for the benefit of the Secured Parties, a first-priority perfected security interest.

"CITIBANK" means Citibank, N.A. and its successors.

"CLASS A BOND ASSET" means, as of any date of determination, a Borrowing Base Eligible Asset (i) that is a Bond Asset related to corporate bond obligations and (ii) in respect of which such corporate bond obligations are rated as of such date of determination no less than "BBB-" from S&P and "Baa3" from Moody's, or which, if rated only by S&P or Moody's, shall be rated no less than "BBB-" from S&P or "Baa3" from Moody's, or which, if unrated, are in the reasonable judgment of the Adviser of equivalent credit quality.

"CLASS B BOND ASSET" means, as of any date of determination, a Borrowing Base Eligible Asset (i) that is a Bond Asset related to corporate bond obligations, (ii) that is not a Class A Bond Asset and (iii) in respect of which such corporate bond obligations are rated as of such date of determination no less than "BB-" from S&P and "Ba3" from Moody's, or which, if rated only by S&P or Moody's, shall be rated no less than "BB-" from S&P or "Ba3" from Moody's, or which, if unrated, are in the reasonable judgment of the Adviser of equivalent credit quality.

"CLASS C BOND ASSET" means, as of any date of determination, a Borrowing Base Eligible Asset (i) that is a Bond Asset related to corporate bond obligations, (ii) that is not a Class A Bond Asset or Class B Bond Asset and
(iii) in respect of which such corporate bond obligations are rated as of such date of determination no less than "B" from S&P and "B2" from Moody's, or which, if rated only by S&P or Moody's, shall be rated no less than "B" from S&P or "B2" from Moody's, or which, if unrated, are in the reasonable judgment of the Adviser of equivalent credit quality.

"CLASS D BOND ASSET" means, as of any date of determination, a Borrowing Base Eligible Asset (i) that is a Bond Asset related to corporate bond obligations, (ii) that is not a

Class A Bond Asset, Class B Bond Asset or Class C Bond Asset and (iii) in respect of which such corporate bond obligations are rated as of such date of determination no less than "B-" from S&P and "B3" from Moody's, or which, if rated only by S&P or Moody's, shall be rated no less than "B-" from S&P or "B3" from Moody's, or which, if unrated, are in the reasonable judgment of the Adviser of equivalent credit quality.

"CLASS E BOND ASSET" means, as of any date of determination, a Borrowing Base Eligible Asset (i) that is a Bond Asset related to corporate bond obligations, (ii) that is not a Class A Bond Asset, Class B Bond Asset, Class C Bond Asset or Class D Bond Asset and (iii) in respect of which such corporate bond obligations are rated as of such date of determination no less than "CCC" from S&P and "Caa2" from Moody's, or which, if rated only by S&P or Moody's, shall be rated no less than "CCC" from S&P or "Caa2" from Moody's, or which, if unrated, are in the reasonable judgment of the Adviser of equivalent credit quality.

"CLASS F BOND ASSET" means, as of any date of determination, a Borrowing Base Eligible Asset (i) that is a Bond Asset related to corporate bond obligations and (ii) is either (a) a Distressed Bond Asset or in respect of which such corporate bond obligations are rated as of such date of determination less than "CCC" from S&P or "Caa2" from Moody's, or which, if unrated, are in the reasonable judgment of the Adviser of equivalent credit quality or (b) unrated by S&P or Moody's and the Adviser has assigned no other equivalent rating thereto.

"CLASS A LOAN ASSET" means as of any date of determination, a Borrowing Base Eligible Asset which (i) is a Loan Asset, (ii) is not a Distressed Loan Asset, and (iii) has an Asset Value which is ninety percent (90%) or more of its par value as of such date of determination.

"CLASS B LOAN ASSET" means as of any date of determination, a Borrowing Base Eligible Asset which (i) is a Loan Asset, (ii) is not a Distressed Loan Asset, and (iii) has an Asset Value which is less than ninety percent (90%) of its par value as of such date of determination.

"CLASS C LOAN ASSET" means as of any date of determination, a Borrowing Base Eligible Asset which (i) is a Distressed Loan Asset, and (ii) has an Asset Value which is ninety percent (90%) or more of its par value as of such date of determination.

"CLASS D LOAN ASSET" means as of any date of determination, a Borrowing Base Eligible Asset which (i) is a Distressed Loan Asset, and (ii) has an Asset Value which is less than ninety percent (90%) of its par value as of such date of determination.

"CLOSING DATE" means the first date on which the conditions precedent specified in Section 3.01 shall have been fully satisfied.

"CODE" means the Internal Revenue Code of 1986, as amended from time to time, or any successor statute.

"COLLATERAL ACCOUNT" means, collectively, Account Number 556-837-00, ABA Number 011-00002 and Account Number 379-26-342, ABA Number 011-00002, established by the Borrower at State Street Bank and Trust Company.

"COMPLIANCE CERTIFICATION DATE" has the meaning assigned to such term
in SECTION 2.05(b).

"CONDUIT LENDER" means CRC Funding, LLC, together with its successors and assigns that constitute special purpose entities that issue promissory notes or other debt securities.

"CONTROL AGREEMENT" means the Control Agreement, dated as of the date hereof among the Borrower, the Agent and the Custodian, as the same may from time to time be amended, supplemented, waived or modified.

"CP RATE" for each day during a Settlement Period for any Advance means the per annum rate equivalent to the weighted average of the per annum rates paid or payable by the Conduit Lender from time to time as interest on or otherwise (by means of interest rate hedges or otherwise) in respect of those promissory notes issued by the Conduit Lender that are allocated, in whole or in part, by the Agent (on behalf of the Conduit Lender) to fund the making or maintenance of such Advance on such day during such Settlement Period as determined by the Agent (on behalf of the Conduit Lender) and reported to the Borrower, which rates shall reflect and give effect to the commissions of placement agents and dealers in respect of such promissory notes, to the extent such commissions are allocated, in whole or in part, to such promissory notes by the Agent on behalf of the Conduit Lender; PROVIDED, HOWEVER, that if any component of such rate is a discount rate, in calculating the "CP Rate" for such day the Agent shall for such component use the rate resulting from converting such discount rate to an interest bearing equivalent rate per annum.

"CREDITS OUTSTANDING" means at any time a determination thereof is made, an amount equal to the sum of (i) the outstanding principal amount of all Advances, PLUS (ii) the Yield that would accrue on the aggregate outstanding principal amount of the Advances through the sixty (60) day period following such date of determination, computed by reference to the Assignee Rate based upon the applicable Eurodollar Rates plus the Applicable Margin for a thirty
(30) day period in effect as of the time of determination, plus (iii) the Aggregate Custodian's Advance Amount plus (iv) the sum of (a) the aggregate outstanding principal balance of all advances and other extensions of credit and
(b) any unpaid and past due interest, fees or other obligations, in each case, under the Existing 1998 Credit Agreement.

"CUSTODIAL AGREEMENT" means the Custodian and Investment Accounting Agreement, dated as of November 1, 2001 by and among the Borrower, one or more other funds that are advised by the Adviser (or any Affiliate thereof) and the Custodian, as amended by a First Amendment to Custodian and Investment Accounting Agreement dated as of March 1, 2002 and as the same may from time to time be amended, restated, supplemented, waived or modified as permitted under the Program Documents.

"CUSTODIAN" means State Street Bank and Trust Company, as custodian under the Custodial Agreement, and as securities intermediary and collateral agent under the Custodial Agreement and the Control Agreement, and its permitted successors and assigns.

"CUSTODIAN'S OVERDRAFT ADVANCES" means any advance of cash, assets or securities by the Custodian pursuant to or in connection with the Custodial Agreement.

"DEBT" means with respect to any Person, at any date, without duplication, (i) all "senior securities representing indebtedness" (as defined in Section 18(g) of the Investment Company Act), (ii) all obligations of such Person for borrowed money, including without limitation, all obligations of such Person which are evidenced by letters of credit or letter of credit reimbursement arrangements, (iii) all obligations of such Person evidenced by bonds, debentures, notes, acceptances or other similar instruments, (iv) all obligations of such Person to pay the deferred purchase price of property or services, (v) all obligations of such Person as lessee which are capitalized in accordance with GAAP, (vi) all Debt of others secured by a Lien on any asset of such Person, whether or not such Debt is assumed by such Person, (vii) payment obligations, fixed or contingent, under investment, financial derivative or similar contracts (other than covered short sales), (viii) all Debt of others Guaranteed by such Person, and (ix) to the extent not otherwise included, all items which in accordance with GAAP would be included in determining total liabilities as shown on the liabilities side of such Person's balance sheet.

"DEFAULT" means any event which, with the passage of time, the giving of notice, or both, would constitute an Event of Default.

"DERIVATIVES TRANSACTION" means any financial futures contract, option, forward contract, warrant, swap, swaption, collar, floor, cap and any other agreement, instrument and derivative and other transactions of a similar nature (whether currency linked, index linked, insurance risk linked, credit risk linked or otherwise).

"DETERMINATION DATE" means (i) each Borrowing Date, (ii) each Weekly Determination Date, (iii) each date any Restricted Payment is made or any Senior Security is issued, and (iv) during the continuance of a Default or an Event of Default, each Business Day which the Agent may designate in its sole discretion as a "Determination Date" (which may be daily).

"DISTRESSED BOND ASSET" means a Bond Asset (a) the Obligor of which is the subject of a bankruptcy, insolvency, liquidation or other similar proceedings, (b) which is in default (unless cured or waived) beyond the applicable grace period, if any, as to payment of principal or interest or other amount owing under the instruments or agreements under which it was issued or otherwise evidenced, or (c) which is rated lower than "Caa2" by Moody's or lower than "CCC" by S&P or which, if unrated, is in the reasonable judgment of the Adviser of equivalent credit quality.

"DISTRESSED LOAN ASSET" means a Loan Asset (i) the Obligor of which is the subject of a bankruptcy, insolvency, liquidation or other similar proceedings, (ii) which is in default (unless cured or waived) beyond the applicable grace period, if any, as to payment of principal or interest or other amount owing under the applicable Loan Documents, (iii) which is otherwise classified by the Adviser or the Borrower as "non-performing", (iv) in respect of which the related Obligor is rated "Caa" or lower by Moody's or "CCC" or lower by S&P or which, if unrated, is in the reasonable judgment of the Adviser of equivalent credit quality, (v)

which is not part of a senior credit facility, or (vi) which is otherwise not classified as a "Senior Loan" by the Adviser.

"DOLLARS" and "$" mean lawful money of the United States of America.

"EDISON CREDIT FACILITY" means that certain Revolving Loan Agreement dated as of July 16, 1998 by and among the Borrower, the Adviser, Edison Asset Securitization, L.L.C., as the lender, and General Electric Capital Corporation, as lender, operating agent and as collateral agent, as amended.

"ELIGIBLE ASSIGNEE" means Citicorp North America, Inc., Citibank, any of their respective Affiliates, any Person managed by Citibank, Citicorp North America, Inc. or any of their respective Affiliates or any other financial or other institution acceptable to the Agent.

"ELIGIBLE BOND ASSET" at any time means a Bond Asset: (i) with respect to which the interest payable on the principal amount thereof by the related Obligor is payable in cash; (ii) which is not part of an issuance of corporate debt securities with an original aggregate principal amount as of the Origination Date of such Bond Asset of less than $100,000,000; and (iii) which has a scheduled maturity date no later than the thirtieth (30th) anniversary after the related Origination Date.

"ELIGIBLE COLLATERAL" means at any time the Pledged Collateral which constitutes Borrowing Base Eligible Assets.

"ELIGIBLE COMMERCIAL PAPER NOTE" means a promissory note (i) issued in the commercial paper market by an obligor having its principal office in the United States, having a maturity of not more than 270 days and which (a) if rated by both S&P and Moody's, is rated at least "A-l" by S&P and at least "P-l" by Moody's, and (b) if rated by S&P or Moody's (but not both), is rated at least "A-l" by S&P or at least "P-l" by Moody's (ii) custodied with the Custodian or a sub-custodian pursuant to the Custodian Agreement, (iii) subject to the Custodian's control in accordance with the Control Agreement, (iv) credited to the Collateral Account, and (v) in respect of which all actions have been taken under this Agreement and the Control Agreement to create and perfect in the Agent, for the benefit of the Secured Parties, a first-priority perfected security interest.

"ELIGIBLE CREDIT-LINKED NOTE" means any Asset (i) which references an asset (the "Referenced Asset") of the type described in either (a) CLAUSES (i) through (iii) of the definition of "Eligible Bond Asset" or (b) CLAUSES (i) through (x) of the definition of "Eligible Loan Asset", (ii) in respect of which
(a) under certain credit conditions (which may include failure to pay or bankruptcy or insolvency of the Obligor in respect of such Referenced Asset), the Borrower shall be required to accept such Referenced Asset (or a similar asset) as payment in full, or (b) in the absence of such credit conditions, the Borrower shall receive periodic interest and principal in full at the maturity of such Asset, (iii) which is (a) custodied with the Custodian or a sub-custodian pursuant to the Custodian Agreement, (b) subject to the Custodian's control in accordance with the Control Agreement, and (c) credited to the Collateral Account, and (iv) in respect of which all actions have been taken under this Agreement and the Control Agreement to

create and perfect in the Agent, for the benefit of the Secured Parties, a first-priority perfected security interest.

"ELIGIBLE GOVERNMENT SECURITIES" means all "Government Securities" (as defined in the Investment Company Act and which for the purposes hereof shall include any securities issued or guaranteed as to principal and interest by an agency of the government of the United States) held in an account maintained by the Custodian and in respect of which all actions have been taken under this Agreement and the Control Agreement to create and perfect in the Agent, for the benefit of the Secured Parties, a first-priority perfected security interest.

"ELIGIBLE LOAN ASSET" at any time means a Loan Asset: (i) with respect to which the interest payable on the principal amount thereof by the related Obligor is payable in cash; (ii) in respect of which the Borrower's interest is not a subparticipation; (iii) which has a scheduled final maturity date no later than the tenth (10th) anniversary after the related Origination Date; (iv) which is part of a senior credit facility, with respect to which such Loan Asset is not by its terms subordinated (pursuant to contractual provisions or otherwise) to the prior payment of any other liabilities or any equity interests of the related Obligor; (v) which is part of a syndicated credit facility where the sum of the aggregate revolving loan commitment amount plus the aggregate outstanding principal amount of all loans under such facility on the Origination Date of such Loan Asset is at least equal to $100,000,000; (vi) which relates to Loan Documents in which the Borrower's interest (direct or participating) in the aggregate outstanding principal amount of all loans thereunder is no greater than thirty-three and one-third percent (33.33%); (vii) in respect of which the related Loan Documents are not subject to any confidentiality arrangement which would preclude the Agent from reviewing such Loan Documents; (viii) in which the Borrower's interest in all collateral security therefor and principal and interest payments thereunder is no less than pro rata and pari passu with all other lenders thereunder or participants therein, as the case may be; (ix) in respect of which the credit rating of the related Transaction Agent or its controlling Affiliate is no less than "A-" from S&P or "A3" from Moody's; (x) in respect of which, if the Borrower's interest therein is that of a participant, the credit rating of the related Selling Institution is no less than "A-" from S&P and "A3" from Moody's; and (xi) the pledge of which under Article VII of this Agreement, would not conflict with or constitute a default under or be prohibited by any anti-assignment or other provisions contained in the related Loan Documents, except for anti-assignment provisions rendered ineffective by applicable law.

"ELIGIBLE MONEY MARKET FUNDS" means shares of money market, mutual or similar funds rated at least AAA by S&P and Aaa by Moody's and held in an account maintained by the Custodian and in respect of which all actions have been taken under this Agreement and the Control Agreement to create and perfect in the Agent, for the benefit of the Secured Parties, a first-priority perfected security interest.

"E-MAIL REPORT" has the meaning assigned to such term in SECTION 9.15.

"EQUITY SECURITIES" means common and preferred stock, warrants, membership interests or partnership interests and securities that are convertible into common or preferred stock, membership interests or partnership interests, including without limitation common stock

purchase warrants and rights, equity interests in trusts, partnerships, limited liability companies, joint ventures or similar enterprises.

"ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder.

"ERISA GROUP" means the Borrower and all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with the Borrower, are treated as a single employer under Section 414(b), (c), (m) or (n) of the Code.

"EUROCURRENCY LIABILITIES" has the meaning assigned to such term in Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time.

"EURODOLLAR ADDITIONAL YIELD" means additional Yield on the outstanding principal of each Advance during the Settlement Period in respect of such Advance in respect of which Yield is computed by reference to the Eurodollar Rate, for such Settlement Period, at a rate per annum equal at all times during such Settlement Period to the remainder obtained by subtracting (i) the Eurodollar Rate for such Settlement Period from (ii) the rate obtained by dividing such Eurodollar Rate referred to in CLAUSE (i) above by that percentage equal to one-hundred percent (100%) minus the Eurodollar Rate Reserve Percentage of the applicable Lender (other than the Conduit Lender) or Secondary Lender, as the case may be, for such Settlement Period.

"EURODOLLAR RATE" means, for any Advance for any Settlement Period, an interest rate per annum equal to the rate per annum at which deposits in Dollars are offered by the principal office of Citibank in London, England to prime banks in the London interbank market at 11:00 A.M. (London time) two (2) Business Days before the first day of such Settlement Period in an amount substantially equal to the outstanding principal amount of such Advance on such first day and for a period equal to such Settlement Period.

"EURODOLLAR RATE ADVANCE" means an Advance the Yield on which is computed with reference to the Eurodollar Rate.

"EURODOLLAR RATE RESERVE PERCENTAGE" for any Settlement Period for any Eurodollar Rate Advance means the reserve percentage applicable during such Settlement Period under regulations issued from time to time by the Board of Governors of the Federal Reserve System (or any successor) (or if more than one such percentage shall be applicable, the daily average of such percentages for those days in such Settlement Period during which any such percentage shall be so applicable) for determining the maximum reserve requirement (including, without limitation, any emergency, supplemental or other marginal reserve requirement) for any applicable Lender (other than the Conduit Lender) or Secondary Lender with respect to liabilities or assets consisting of or including Eurocurrency Liabilities (or any other category of liabilities that includes deposits by reference to which the interest rate on Eurocurrency Liabilities is determined) having a term comparable to such Settlement Period.

"EVENT OF DEFAULT" means any of the events, acts or occurrences set forth in SECTION 6.01.

"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC thereunder, all as from time to time in effect, or any successor law, rules or regulations, and any reference to any statutory or regulatory provision shall be deemed to be a reference to any successor statutory or regulatory provision.

"EXISTING 1998 CREDIT AGREEMENT" means that certain Second Amended and Restated Credit Agreement, dated as of September 2, 1998, by and among the Borrower (formerly known as Pilgrim America Prime Rate Trust), the financial institutions from time to time party thereto and Bank of America, N.A. (formerly known as Bank of America National Trust and Savings Association), as Syndication Agent, State Street Bank and Trust Company, as Administrative Agent, Deutsche Bank AG, as Documentation Agent, and Commerzbank AG, as Co-Agent, as the same may be amended, restated, supplemented or otherwise modified from time to time.

"FACILITY" has the meaning assigned to such term in SECTION 9.09(b).

"FEDERAL FUNDS RATE" means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by Citibank from three Federal funds brokers of recognized standing selected by it.

"FEE LETTER" means that certain letter agreement dated the date hereof between the Borrower and the Agent, as the same may from time to time be amended, supplemented, waived or modified.

"FLOATING RATE" means an interest rate calculated by reference to the prime rate, the London interbank offered rate, the certificate of deposit rate, the federal funds rate or any other per annum rate commonly referred to in the United States banking industry as a "floating rate."

"FOREIGN CURRENCY ASSET" means any Asset which is denominated or payable in a currency other than Dollars.

"FOREIGN ASSET" means any Loan Asset or Bond Asset, as applicable, the Obligor of which is organized under the laws of any OECD Country (other than the United States of America).

"GAAP" means generally accepted accounting principles in the United States, in effect from time to time, consistently applied.

"GOVERNMENTAL AUTHORIZATIONS" means all franchises, permits, licenses, approvals, consents and other authorizations of all Authorities.

"GOVERNMENTAL FILINGS" means all filings, including franchise and similar tax filings, and the payment of all fees, assessments, interests and penalties associated with such filing with all Authorities.

"GUARANTEE" by any Person means any obligation, contingent or otherwise, of such Person directly or indirectly guaranteeing any Debt or other obligation of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt or other obligation (whether arising by virtue of partnership arrangements, or by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise) or (ii) entered into for the purpose of assuring in any other manner the obligee of such Debt or other obligation of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); PROVIDED that the term "Guarantee" shall not include endorsements for collection or deposit in the ordinary course of business. The term "Guarantee" used as a verb has a corresponding meaning.

"INDUSTRY CLASS" means, for purposes of computing the Borrowing Base, any industry class set forth on SCHEDULE IV hereto, as such SCHEDULE IV may be amended and supplemented from time to time in accordance with this Agreement.

"INTERCREDITOR AGREEMENT" means that certain Intercreditor and Collateral Agency Agreement dated as of July 16, 2003, by and among the Borrower, the Agent, State Street Bank and Trust Company, as agent for the secured parties under the Existing 1998 Credit Agreement, and State Street Bank and Trust Company, as information agent.

"INVESTMENT COMPANY ACT" means the Investment Company Act of 1940, as amended, and the rules and regulations of the SEC thereunder, as modified or interpreted by orders of the SEC, or other interpretative releases or letters issued by the SEC or its staff, all as from time to time in effect, or any successor law, rules or regulations, and any reference to any statutory or regulatory provision shall be deemed to be a reference to any successor statutory or regulatory provision.

"INVESTMENT POLICIES AND RESTRICTIONS" means the provisions dealing with investment objectives, policies, distributions, investment restrictions, tender offers, repurchases, leverage and diversification status as set forth in the Prospectus in effect on the Closing Date or as modified in accordance with
SECTION 5.02(i).

"INVESTOR REPORT" means the Investor Report of the Borrower substantially in the form of Schedule I hereto.

"LAW" means any action, code, consent decree, constitution, decree, directive, enactment, finding, guideline, law, injunction, interpretation, judgment, order, ordinance, policy statement, proclamation, promulgation, regulation, requirement, rule, rule of law, rule of public

policy, settlement agreement, statute, or writ, of any Authority, or any particular section, part or provision thereof.

"LENDERS" means the Conduit Lender, together with all Persons which acquire or are obligated to acquire any interest in any Advance from the Conduit Lender under an Asset Purchase Agreement or in the case of Citibank, under any similar arrangement.

"LENDER TERMINATION DATE" means the date which is the earlier to occur of (i) one (1) Business Day prior to the Secondary Lender Stated Expiration Date, and (ii) the date on which the Total Commitment is reduced to zero or terminated pursuant to the terms hereof, including, without limitation, pursuant to SECTION 2.10 or SECTION 6.01.

"LETTER AGREEMENTS" means, collectively, the Administrator Letter Agreement and the Adviser Letter Agreement.

"LIEN" means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien or security interest (statutory or other), or preference, priority or other security agreement or preferential arrangement, or other claim or encumbrance of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement and any financing lease having substantially the same economic effect as any of the foregoing.

"LIQUIDATION FEE" means, in respect of any Advance for any Settlement Period which is funded by the Conduit Lender during which the principal on such Advance is repaid by the Borrower in whole or in part prior to the end of said Settlement Period, the amount, if any, by which (i) the additional Yield (calculated without taking into account any Liquidation Fee or any shortened duration of such Settlement Period) which would have accrued during such Settlement Period on the reduction of the outstanding principal amount of such Advance relating to such Settlement Period had such reductions remained as outstanding principal, exceeds (ii) that income, if any, received by the Conduit Lender's investing the proceeds of such reductions of principal.

"LOAN ASSET" means any Asset that is a direct or participation or subparticipation interest in or assignment or novation of a loan or other extension of credit (other than a Bond Asset).

"LOAN DOCUMENTS" means with respect to any Loan Asset, each loan agreement, promissory note, collateral security agreement, participation certificate, guarantee and any other agreement or document evidencing, securing, governing or executed in connection with such Loan Asset, including without limitation, the agreements and instruments in respect of which the Borrower acquired such Loan Asset.

"MARGIN STOCK" has the meaning assigned to such term in Regulation U.

"MATERIAL ADVERSE EFFECT" means a (i) material adverse effect on the ability of the Borrower, the Adviser or the Administrator to perform its obligations under this Agreement or the Control Agreement or to perform any material obligation under any other Program Document

to which it is a party or any Loan Document, (ii) a material adverse effect on any Secured Party's right, title and interest in the Pledged Collateral or on the rights and remedies of any Secured Party under any Program Document, (iii) a material adverse effect on the validity or enforceability of this Agreement or any other Program Document to which the Borrower, the Adviser or the Administrator is a party or any Loan Document, (iv) a material adverse effect on the business, financial condition, operations, Assets or properties of the Borrower, the Adviser or the Administrator, (v) a material Adverse Claim on any of the Assets of the Borrower, or (vi) a Default or Event of Default.

"MATURITY DATE" means (i) with respect to any Advance funded by a Lender, the Lender Termination Date (or if such day is not a Business Day, the Business Day immediately preceding such date), and (ii) with respect to any Advance made by a Secondary Lender, the Secondary Lender Termination Date (or if such day is not a Business Day, the Business Day immediately preceding such date).

"MOODY'S" means Moody's Investors Service, Inc., together with its successors.

"MULTIEMPLOYER PLAN" means an employee pension benefit plan within the meaning of Section 4001(a)(3) of ERISA.

"NON-OECD ASSET" means any Asset issued or guaranteed by any Person organized outside of any OECD Country and, in the case of any Loan Asset or Bond Asset, the Obligor of which is organized outside of any OECD Country.

"NOTICE OF BORROWING" has the meaning assigned to such term in
SECTION 2.02.

"NOTICE OF EXCLUSIVE CONTROL" has the meaning assigned to such term in the Control Agreement.

"OBLIGOR" means (i) in respect of any Loan Asset, the Person primarily obligated under the related Loan Documents to repay the loan or extension of credit which is the subject of such Loan Asset and (ii) in respect of any Bond Asset, the issuer thereof and any other Person primarily obligated to repay the bond obligations thereunder.

"OECD COUNTRY" means any country which is a member of the Organization for Economic Cooperation and Development and which has a sovereign credit rating for "foreign currency" of at least "AA-" and "Aa3" from S&P and Moody's, respectively.

"ORIGINATION DATE" means (i) in respect of any Loan Asset, the initial date on which the proceeds of the loan or other extension of credit which is the subject of such Loan Asset was advanced to the Obligor under the related Loan Documents and (ii) in respect of any Bond Asset, the initial date on which the proceeds of the issuance of such securities which is the subject of such Bond Asset was advanced to the Obligor thereof.

"OTHER TAXES" has the meaning assigned to such term in
SECTION 9.03(b).

"PARENT" means ING Groep N.V., together with its successors.

"PERCENTAGE" of any Secondary Lender means, (i) with respect to Citibank, the percentage set forth on the signature page to this Agreement, or such amount as reduced by any Assignment and Acceptance entered into with an Eligible Assignee, or (ii) with respect to a Secondary Lender that has entered into an Assignment and Acceptance, the amount set forth therein as such Secondary Lender's Percentage, or such amount as reduced by an Assignment and Acceptance entered into between such Secondary Lender and an Eligible Assignee.

"PERMITTED DEBT" means (i) Debt arising under this Agreement or the other Program Documents to the Secured Parties, (ii) Debt in favor of the Custodian relating to Custodian's Overdraft Advances incurred in the ordinary course of the Borrower's business, which are not overdue and which do not exceed the amount permitted by SECTION 5.02(o), (iii) fee and expense obligations to the Custodian and other similar agents which are providing services in respect of the Borrower's Assets arising in the ordinary course of the Borrower's business which are not overdue for a period in excess of thirty (30) days, (iv) Debt (other than Debt for borrowed money) arising in connection with transactions in the ordinary course of the Borrower's business in connection with its purchasing of securities, Derivatives Transactions or dollar rolls to the extent such transactions are permitted under the Investment Company Act and the Investment Policies and Restrictions, (v) obligations of the Borrower to fund future extensions of credit under the Loan Documents relating to its Loan Assets which do not exceed twenty percent (20%) of the aggregate Asset Value of the Borrower's Assets and which meet the Borrower's diversification requirements set forth in the Prospectus which are not overdue, (vi) Debt representing accrued expenses and current trade account payables incurred in the ordinary course of the Borrower's business which are not overdue for a period of more than thirty (30) days or which are being diligently contested in good faith,
(vii) Debt in respect of judgments or awards that have been in force for less than the applicable period for taking an appeal so long as such judgments or awards do not constitute an Event of Default and so long as execution is not levied thereunder or in respect of which the Borrower (A) shall at the time in good faith be diligently prosecuting an appeal or proceeding for review and in respect of which a stay of execution shall have been obtained pending such appeal or review, or (B) shall have obtained an unsecured performance bond in respect of such judgment or award, and (viii) Debt arising in connection with reverse repurchase agreements which are permitted under the Investment Company Act and the Investment Policies and Restrictions, and which have been entered into in the ordinary course of the Borrower's business, (ix) on the Closing Date, Debt created under the Edison Credit Facility, all of which Debt shall be repaid with the initial Advance made pursuant to this Agreement and (x) Debt arising under the Existing 1998 Credit Agreement in an aggregate outstanding principal amount not to exceed $90,000,000.

"PERMITTED LIENS" means (i) Liens of any Secured Party created by or pursuant to this Agreement or the Control Agreement, (ii) Liens of the Custodian securing the Custodian's Overdraft Advances to the extent such Custodian's Overdraft Advances do not exceed the amount permitted by SECTION 5.02(o), (iii) Liens of the Custodian which are by the terms of the Control Agreement expressly subordinated to the payment of the Borrower Obligations, (iv) Liens (other than non-possessory Liens which pursuant to Applicable Law are, or may be, entitled to take priority (in whole or in part) over prior, perfected liens and security interests) with respect to taxes, assessments and other governmental charges or levies for amounts not yet due or which are being contested in good faith by appropriate proceedings diligently conducted

and with respect to which adequate reserves have been set aside in accordance with GAAP, provided that enforcement of such Liens is stayed pending such contest, (v) Liens securing Debt permitted under clause (x) of the definition of Permitted Debt, (vi) Liens incidental to the conduct of the Borrower's business securing the performance of fee and expense obligations to the Custodian and other similar agents which are providing services in respect of the Borrower's Assets arising in the ordinary course of the Borrower's business which are not overdue for a period in excess of thirty (30) days, and (vii) Liens in respect of Debt permitted under clauses (iv) and (viii) of the definition of Permitted Debt.

"PERMITTED SENIOR SECURITIES" means "senior securities" within the meaning of the Investment Company Act which constitute Advances under this Agreement, notes or similar instruments issued as of the Closing Date in favor of the lenders under the Existing 1998 Credit Agreement, Derivatives Transactions, repurchase transactions, reverse repurchase transactions, preferred shares (to the extent the Borrower shall be in compliance with the terms of SECTION 5.01(e)(xii) in respect thereof) or commitments of the Borrower to fund future advances or other extensions of credit under any Loan Document, to the extent the issuance of any such senior security by the Borrower is not in contravention of the Investment Company Act or the Investment Policies and Restrictions.

"PERSON" means an individual or a corporation (including a business trust), partnership, trust, incorporated or unincorporated association, joint stock company, limited liability company, government (or an agency or political subdivision thereof) or other entity of any kind.

"PLAN" means an employee pension benefit plan (other than a Multiemployer Plan) which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code.

"PLEDGED COLLATERAL" shall have the meaning assigned to such term in
SECTION 7.01.

"POST-DEFAULT RATE" means in respect of all amounts payable to any Secured Party under any Program Document not paid when due (whether at stated maturity, by acceleration or otherwise), including, without limitation, the principal and Yield on any Advance not paid when due, a rate per annum during the period commencing on the due date until such amount is paid in full equal to the Base Rate as in effect from time to time plus two percent (2.00%).

"PRINCIPAL OFFICE" means the principal office of Citibank presently located at 399 Park Avenue, New York, New York or at such other location as Citibank shall designate in writing to the Borrower.

"PRIVATE AUTHORIZATIONS" means all franchises, permits, licenses, approvals, consents and other authorizations of all Persons (other than Authorities) including, without limitation, those with respect to trademarks, service marks, trade names, copyrights, computer software programs, technical and other know-how.

"PROCEEDS" shall have, with reference to any asset or property, the meaning assigned to it under the UCC and, in any event, shall include, but not be limited to, any and all amounts from time to time paid or payable under or in connection with such asset or property.

"PRODUCT INFORMATION" shall have the meaning assigned to such term in
SECTION 9.09(b).

"PROGRAM DOCUMENTS" means this Agreement, the Advance Notes, if any, the Letter Agreements, the Asset Purchase Agreements, the Advisory Agreement, the Administration Agreement, the Control Agreement, the Custodial Agreement, the Intercreditor Agreement, the Fee Letter, the Loan Documents and the other agreements, documents and instruments entered into or delivered in connection herewith or therewith.

"PROGRAM TERMINATION DATE" means the later to occur of (i) the Secondary Lender Termination Date, and (ii) the date that all Borrower Obligations have been finally paid in full; PROVIDED, HOWEVER, that if any payment in respect of any Borrower Obligation made to any Secured Party must be rescinded or returned for any reason whatsoever (including the insolvency or bankruptcy of the Borrower) such Borrower Obligation shall be deemed to be reinstated as though such payment had not been made and the Program Termination Date shall be deemed to have not occurred.

"PROSPECTUS" means with respect to the Borrower, the prospectus dated July 1, 2003 filed with the SEC as a part of the Borrower's registration statement on Form N-2, as amended (or any successor SEC form), and shall include, without limitation, the related statement of additional information, if any, included in such registration statement, and all supplements, amendments and modifications thereto as of the Closing Date, and as further supplemented, amended or modified in accordance with Applicable Law, including, without limitation, the Securities Act and the Investment Company Act.

"REGISTER" shall have the meaning assigned to such term in
SECTION 9.06(f).

"REGULATION T" means Regulation T of the Board of Governors of the Federal Reserve System, as in effect from time to time.

"REGULATION U" means Regulation U of the Board of Governors of the Federal Reserve System, as in effect from time to time.

"REGULATION X" means Regulation X of the Board of Governors of the Federal Reserve System, as in effect from time to time.

"REQUESTED AMOUNT" shall have the meaning assigned to such term in
SECTION 2.02(a).

"RESTRICTED PAYMENTS" means (i) the declaration of any distributions or dividends (other than distributions payable solely in shares of beneficial interest in the Borrower) on, or the payment on account of, or the setting apart of assets for the purchase, redemption, retirement or other acquisition of, any shares of beneficial interests in the Borrower, including, without

limitation, all common and preferred shares, whether now or hereafter outstanding, either directly or indirectly, whether in cash, property or in obligations of the Borrower, and (ii) the payment of fees and expenses to the Adviser or the Administrator or any Affiliate of the Adviser or the Administrator, as applicable, as compensation for the provision of managerial, administrative services or otherwise.

"S&P" means Standard & Poor's Ratings Group, together with its successors.

"SEC" means the Securities and Exchange Commission or any other governmental authority of the United States of America at the time administrating the Securities Act, the Investment Company Act or the Exchange Act.

"SECONDARY LENDER COMMITMENT" means (i) with respect to each Secondary Lender party to this Agreement as of the Closing Date, the amount set forth on the signature page to this Agreement, as such amount shall be adjusted by any Assignment and Acceptance entered into between such Secondary Lender and an Eligible Assignee in accordance with and subject to SECTION 9.06(b), or (ii) with respect to a Secondary Lender that has entered into an Assignment and Acceptance, the amount set forth therein as such Secondary Lender's "Secondary Lender Commitment", in each case as such amount may be reduced by an Assignment and Acceptance entered into between such Secondary Lender and an Eligible Assignee in accordance with and subject to SECTION 9.06(b), and as may be further reduced (or terminated) pursuant to the next sentence. Any reduction (or termination) of the Total Commitment pursuant to the terms of this Agreement shall reduce ratably (or terminate) each Secondary Lender's Secondary Lender Commitment. References to the unused portion of any Secondary Lender's Secondary Lender Commitment shall mean, at any time, such Secondary Lender's Secondary Lender Commitment then in effect, minus the outstanding principal amount of the Advances funded by such Secondary Lender.

"SECONDARY LENDER STATED EXPIRATION DATE" means July 13, 2004; PROVIDED that prior to such date (or the date so extended pursuant to this proviso), upon the Borrower written request to the Agent, which request shall be received by the Agent not more than sixty (60) days nor less than thirty (30) days prior to the then current Secondary Lender Stated Expiration Date, one or more Secondary Lenders having 100% of the Total Commitment may, in their sole discretion, consent, which consent shall be given no less than twenty (20) days prior to the then current Secondary Lender Stated Expiration Date (the date any such consent is given, the "Extension Date"), to the extension of the Secondary Lender Stated Expiration Date to the date occurring 364 days after such Extension Date; PROVIDED, HOWEVER, that any failure of any Secondary Lender to respond to the Borrower's request for such extension shall be deemed a denial of such request by such Secondary Lender.

"SECONDARY LENDER TERMINATION DATE" means the earlier of (i) the Secondary Lender Stated Expiration Date, and (ii) the date the Total Commitment shall terminate pursuant to SECTION 2.10 or SECTION 6.01.

"SECONDARY LENDERS" means Citibank and each Eligible Assignee that becomes a party to this Agreement pursuant to SECTION 9.06.

"SECURED PARTIES" means the Agent, the Lenders, the Secondary Lenders and their respective successors and assigns.

"SECURED PARTY REPRESENTATIVES" shall have the meaning assigned to such term in SECTION 9.09(c).

"SECURITIES ACT" means the Securities Act of 1933, as amended, and the rules and regulations of the SEC thereunder, all as from time to time in effect, or any successor law, rules or regulations, and any reference to any statutory or regulatory provisions shall be deemed to be a reference to any successor statutory or regulatory provision.

"SELLING INSTITUTION" means, in respect of any Loan Asset which constitutes a participation interest, the Person which has granted or sold to the Borrower a participation interest in the loan or other extension of credit which is the subject of such Loan Asset.

"SETTLEMENT DATE" means the date which is two (2) Business Days after the end of each Settlement Period; provided, that, for purposes of the payment of Yield, with respect to any Settlement Period for which Yield is computed by reference to the Eurodollar Rate, the Settlement Date shall be the last day of the Settlement Period.

"SETTLEMENT PERIOD" means in respect of any Advance:

(a) in the case of any Settlement Period in respect of which Yield in respect of such Advance is computed by reference to the CP Rate, the period beginning on the date such Advance was made and ending on the last day of the calendar month in which such Advance was made and, unless the Conduit Lender shall have notified the Agent and the Borrower that such Advance will not continue to be funded by the Conduit Lender through the issuance of commercial paper (in which case such Advance shall be automatically continued at the end of the then current Settlement Period as an Advance in respect of which Yield shall be computed by reference to the Alternate Base Rate), thereafter each successive period commencing on the first day of each calendar month during the term of this Agreement and ending on the last day of such calendar month during the term of this Agreement; PROVIDED, HOWEVER, that in the case of any Settlement Period for any Advance which commences before the Maturity Date for such Advance and would otherwise end on a date occurring after such Maturity Date, such Settlement Period shall end on such Maturity Date and the duration of each Settlement Period which commences on or after the Maturity Date for such Advance may be any period (including, without limitation, a period of one day) as shall be selected from time to time by the Agent;

(b) in the case of any Settlement Period in respect of which Yield in respect of such Advance is computed by reference to the Eurodollar Rate, the period beginning on the date such Advance was made and ending on the last day of the calendar month in which such Advance was made and thereafter each successive period commencing on the first day of each calendar month during the term of this Agreement and ending on the last day of such calendar month during the term of this Agreement; PROVIDED, HOWEVER, that any Settlement Period which is other than the monthly Settlement Period shall be of such duration as shall be selected by the Agent; and

(c) in the case of any Settlement Period in respect of which Yield is computed by reference to the Alternate Base Rate, such Settlement Period shall be of such duration as shall be selected by the Agent.

"SPECIFIED LOAN DOCUMENTS" shall have the meaning assigned to such term in the Control Agreement.

"TAXES" shall have the meaning assigned to such term in
SECTION 9.03(a).

"TOTAL COMMITMENT" means $325,000,000 as such amount may be reduced pursuant to SECTIONS 2.10 or 9.01. References to the unused portion of the Total Commitment shall mean, at any time, the Total Commitment then in effect, minus the outstanding principal amount of the Advances.

"TRANSACTION AGENT" means a commercial bank, insurance company, finance company or other financial institution that is acting as agent or trustee under the Loan Documents relating to any Loan Asset.

"UCC" means the Uniform Commercial Code, as from time to time in effect in the applicable jurisdictions.

"UNSECURED LOAN ASSETS" means Loan Assets which are not fully secured under the related Loan Documents by a first-priority perfected Lien on assets or properties of the related Obligor with value as reasonably determined by the Adviser at the time of the Borrower's purchase of such Loan Asset in reliance upon appraisals, financial statements or market valuation techniques, in an amount no less than the outstanding debt of such Obligor under the related Loan Documents.

"VALUE" shall have the meaning assigned to such term in
Section 2(a)(41) of the Investment Company Act.

"WEEKLY DETERMINATION DATE" means the last Business Day of each calendar week.

"WEEKLY PORTFOLIO REPORT" shall have the meaning assigned to such term in SECTION 5.01(e)(ix).

"YIELD" means for each Advance for each Settlement Period:

(i) for each day during such Settlement Period to the extent such Advance will be funded or maintained on such day by the Conduit Lender through the issuance of promissory notes,

(ii) for each day during such Settlement Period to the extent such Advance will be funded or maintained on such day by the Conduit Lender through the sale of a participation, or by a Secondary Lender or a Lender (other than the Conduit Lender),

where:

AR = the Assignee Rate for such Advance for such Settlement Period

P = the outstanding principal amount of such Advance on such day

CPR = the CP Rate for such Advance on such day

LF = the Liquidation Fee, if any, for such Advance for such Settlement Period (expressed as a daily amount);

PROVIDED, FURTHER, that Yield for any Advance shall not be considered paid by any distribution to the extent that at any time all or a portion of such distribution is rescinded or must otherwise be returned for any reason.

SECTION 1.02. RULES OF CONSTRUCTION.

For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires (i) singular words shall connote the plural as well as the singular, and vice versa (except as indicated), as may be appropriate, (ii) the words "herein," "hereof and "hereunder" and other words of similar import used in this Agreement refer to this Agreement as a whole and not to any particular appendix, article, schedule, section, paragraph, clause, exhibit or other subdivision, (iii) the headings, subheadings and table of contents set forth in this Agreement are solely for convenience of reference and shall not constitute a part of this Agreement nor shall they affect the meaning, construction or effect of any provision hereof,
(iv) references in this Agreement to "including" shall mean including without limiting the generality of any description preceding such term, and for purposes hereof the rule of ejusdem generis shall not be applicable to limit a general statement, followed by or referable to an enumeration of specific matters, to matters similar to those specifically mentioned, and (v) each of the parties to this Agreement and its counsel have reviewed and revised, or requested revisions to, this Agreement, and the usual rule of construction that any ambiguities are to be resolved against the drafting party shall be inapplicable in the construction and interpretation of this Agreement.

SECTION 1.03. COMPUTATION OF TIME PERIODS.

Unless otherwise stated in this Agreement, in the computation of a period of time from a specified date to a later specified date, the word "from" means "from and including" and the words "to" and "until" both mean "to but excluding".

ARTICLE II
ADVANCES TO THE BORROWER

SECTION 2.01. ADVANCE FACILITY.

On the terms and conditions hereinafter set forth, including without limitation, SECTIONS 3.01 and 3.02, the Conduit Lender may, in its sole discretion, make Advances to the Borrower on any Borrowing Date from the date hereof to the Lender Termination Date. On the terms and conditions hereinafter set forth, including without limitation, SECTIONS 3.01 and 3.02 and during the period from the date hereof to the Secondary Lender Termination Date if the Conduit Lender has declined to make an Advance, the Secondary Lenders shall make Advances to the Borrower, ratably in accordance with their respective Secondary Lender Commitments. Under no circumstances shall the Conduit Lender or any Secondary Lender be obligated to make any such Advance, to the extent that after giving effect to the making of such Advance the aggregate principal amount of all outstanding Advances would exceed the Total Commitment.

SECTION 2.02. MAKING OF ADVANCES.

(a) The Borrower shall give the Agent written notice (which notice shall be irrevocable and effective only upon receipt by the Agent) of each request for an Advance (each such request a "NOTICE OF BORROWING") not later than 12:00 noon (New York City time) on the day which is two (2) Business Days prior to the proposed borrowing date, which notice shall specify (i) the proposed borrowing date therefor (each such date, a "BORROWING DATE"), and (ii) the aggregate principal amount of the proposed borrowing (the "REQUESTED AMOUNT"). Any such Notice of Borrowing shall be substantially in the form of EXHIBIT B hereto, dated the date such request is being made, signed by an Authorized Signatory and otherwise appropriately completed. The Requested Amount specified in any Notice of Borrowing shall be at least $1,000,000 and in integral multiples of $1,000,000 in excess thereof. The Borrower shall not request more than two
(2) borrowings in any calendar week.

(b) During the period prior to the Lender Termination Date, the Conduit Lender shall promptly notify the Agent whether it has determined to make a proposed Advance, and the Agent shall promptly thereafter notify the Borrower whether the Conduit Lender has determined to make such Advance. If the Conduit Lender has declined to make a proposed Advance, the Agent shall promptly send notice of the proposed borrowing to all of the Secondary Lenders concurrently by telecopier, telex or cable specifying the Borrowing Date for such borrowing, each Secondary Lender's Percentage multiplied by the Requested Amount and whether the Yield for such Advance is calculated based on the Eurodollar Rate or the Alternate Base Rate. On each Borrowing Date, the Conduit Lender or the Secondary Lenders shall, subject to the terms and conditions of this Agreement, make available to the Borrower at the Borrower's

Account Advances in an amount equal to the Requested Amount in immediately available funds. To the extent not covered by SECTION 2.08, the Borrower shall indemnify the Conduit Lender, each Secondary Lender and the Agent against any loss or expense incurred by them as a result of any failure by the Borrower to accept any Advance requested in a Notice of Borrowing or as a result of the failure of the Borrower to receive any Advance requested in a Notice of Borrowing as a result of the failure of any condition precedent to the making of such Advance to be satisfied, including, without limitation, any loss or expense incurred by reason of the liquidation or reemployment of funds acquired or requested to fund such Advance.

SECTION 2.03. NOTELESS AGREEMENT; EVIDENCE OF INDEBTEDNESS.

(a) Each Lender and each Secondary Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender or such Secondary Lender, as applicable, resulting from each Advance made by such Lender or such Secondary Lender, as applicable, from time to time, including the amounts of principal and Yield thereon and paid to such Lender or Secondary Lender, as applicable, from time to time hereunder.

(b) The Agent shall maintain accounts in which it will record (i) the amount of each Advance made hereunder and the Settlement Period with respect thereto, (ii) the amount of any principal and Yield due and payable or to become due and payable from the Borrower to each Lender and each Secondary Lender hereunder, and (iii) the amount of any sum received by the Agent hereunder from the Borrower and each Lender's and each Secondary Lender's share thereof.

(c) The entries maintained in the accounts maintained pursuant to CLAUSES (a) and (b) of this SECTION 2.03 shall be rebuttable presumptive evidence of the existence and amounts of the Borrower Obligations therein recorded (absent manifest error); PROVIDED, HOWEVER, that the failure of the Agent, any Lender or any Secondary Lender to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay the Borrower Obligations in accordance with their terms.

(d) The Conduit Lender and any Secondary Lender may request that its Advances be evidenced by an Advance Note. In such event, the Borrower shall (as soon as reasonably practicable) prepare, execute and deliver to such Conduit Lender or Secondary Lender, as applicable, an Advance Note payable to the order of such Conduit Lender or Secondary Lender, as applicable. Thereafter, the Advances evidenced by such Advance Note and interest thereon shall at all times (including after any assignment pursuant to
SECTION 9.06) be represented by one or more Advance Notes payable to the order of the payee named therein or any assignee pursuant to SECTION 9.06, except to the extent that any such Conduit Lender, Secondary Lender or assignee subsequently returns to the Borrower any such Advance Note for cancellation and requests that such Advances once again be evidenced as described in CLAUSES (a) and (b) of this SECTION 2.03 above. In connection with any assignment pursuant to SECTION 9.06, if such assigning Secondary Lender shall have an Advance Note issued to it, such assigning Secondary Lender shall promptly return its Advance Note to the Borrower marked "cancelled".

SECTION 2.04. MATURITY OF THE ADVANCES.

The principal amount of, and the accrued and unpaid Yield on each outstanding Advance shall be due and payable by the Borrower on the Maturity Date for such Advance.

SECTION 2.05. PREPAYMENT OF THE ADVANCES.

(a) The Borrower shall have the right at any time and from time to time, upon not less than one (1) Business Day's prior written or telephonic notice (in the case of telephonic notice, promptly confirmed in writing) to the Agent specifying the date and amount of such prepayment, to prepay (without any premium or penalty, except for any Liquidation Fee or amount payable under SECTION 2.08) all or a portion of the outstanding Advances, together with unpaid Yield on all Advances that are paid in full on such date of prepayment, on a Business Day; PROVIDED, that any such prepayment, if a partial prepayment, shall be at least $1,000,000 and in integral multiples of $100,000 in excess thereof (or, in the case of any prepayment required under SECTION 2.05(b), at least $10,000 and in integral multiples of $10,000 in excess thereof).

(b) If on any Determination Date the Borrower is not in full compliance with the Borrowing Base Test, the Borrower shall on the next succeeding Business Day after such Determination Date (each such date, a "COMPLIANCE CERTIFICATION DATE"), (I) notify the Agent of such failure to comply and the amount of any prepayment required to be made, or additional Borrowing Base Eligible Assets required to be pledged, under this CLAUSE
(b), and (II) prepay Advances (together with Yield thereon) and/or pledge to the Agent additional Borrowing Base Eligible Assets in an amount necessary to cause the Borrower to be in full compliance with the Borrowing Base Test on such Compliance Certification Date; PROVIDED, HOWEVER, that to the extent the Borrower does not have sufficient available funds and/or additional Borrowing Base Eligible Assets to pledge to the Agent to fully cure such compliance shortfall on such Compliance Certification Date, then the Borrower shall (i) on such Compliance Certification Date prepay outstanding Advances in the amount of its available funds and pledge any Borrowing Base Eligible Assets to the Agent, if applicable; (ii) no later than the close of business on the twelfth (12th) Business Day following such Determination Date either (A) acquire and pledge to the Agent under this Agreement and the Control Agreement additional Borrowing Base Eligible Assets having an Adjusted Asset Value at least sufficient to cause the Borrowing Base to be at least equal to the product of (x) 1.05 and (y) the Credits Outstanding as determined on such Compliance Certification Date, or (B) prepay Advances in a principal amount (and pay the Yield thereon) at least sufficient to cause the Borrowing Base to be at least equal to the product of (x) 1.05 and (y) the Credits Outstanding as determined on such Compliance Certification Date; and (iii) no later than the close of business on such Compliance Certification Date, deliver to the Agent a certificate, signed by an Authorized Signatory of the Borrower, that (1) certifies the amount of the compliance shortfall, (2) specifies whether the Borrower shall either (x) prepay the Advances in accordance with CLAUSE (B) above, or (y) acquire additional Borrowing Base Eligible Assets in accordance with CLAUSE (A) above and specifies the identity and Adjusted Asset Value of the Borrowing Base Eligible Assets for which the Borrower has entered into corrective trades

in order to satisfy the requirements of CLAUSE (A) of this SECTION 2.05(b), and (3) certifies that the requirements of this SECTION 2.05(b) shall be satisfied on or prior to the twelfth (12th) Business Day following such Determination Date.

(c) The amount of each prepayment under this SECTION 2.05 shall be applied ratably to the Advances of each Lender and each Secondary Lender in the order in which such Advances were made by such Lender or Secondary Lender.

SECTION 2.06. YIELD.

The Borrower hereby agrees to pay the Yield computed with reference to the principal amount of each Advance outstanding from time to time. Yield accruing in respect of any Advance for any Settlement Period shall be due and payable on the Settlement Date immediately succeeding such Settlement Period and as required by SECTION 2.05. It is the intention of the parties hereto that the Yield on the Advances shall not exceed the maximum rate permissible under applicable law. Accordingly, anything herein or in any Advance Note to the contrary notwithstanding, in the event any Yield is charged to, collected from or received from or on behalf of the Borrower by the Lenders or the Secondary Lenders pursuant hereto or thereto in excess of such maximum lawful rate, then the excess of such payment over that maximum shall be applied first to the payment of amounts then due and owing by the Borrower to the Secured Parties under the Program Documents (other than in respect of principal and Yield on Advances), then to the reduction of the outstanding principal balance of the Advances then due, and then any excess amount to be returned to the Borrower.

SECTION 2.07. INCREASED COSTS.

(a) If, due to either (i) the introduction of or any change (other than any change by way of imposition or increase of reserve requirements reflected in the Eurodollar Rate Reserve Percentage) in or in the interpretation of any Applicable Law or (ii) the compliance with any directive or guideline issued by, or request from, any central bank or other Authority (whether or not having the force of law), there shall be any increase in the cost to any Affected Person of agreeing to make or making, funding or maintaining Eurodollar Rate Advances to the Borrower, then the Borrower from time to time shall, as promptly as practicable upon written demand by such Affected Person pay to the Agent for the account of such Affected Person additional amounts sufficient to compensate such Affected Person for such increased cost; PROVIDED, HOWEVER, that no additional amounts shall be required under this SECTION 2.07 with respect to (i) income or profits taxes (or franchise taxes imposed in lieu thereof), (ii) Taxes or Other Taxes in effect on the date that such Affected Person became a party to this Agreement or otherwise became committed to purchase or acquire any interest in any Advances (whether by assignment, participation or otherwise), except to the extent that such Affected Person's assignor or predecessor was entitled to such additional amounts, and (iii) Taxes to the extent avoidable had such Person complied with the provisions of SECTION 9.03(f). In determining such amount, such Affected Person may in good faith use any reasonable averaging and attribution methods, consistent with the averaging and attribution methods generally used by such Affected Person in determining amounts of this type with respect to other borrowers. Each such Affected Person shall, together with

its written demand therefor, deliver to the Borrower and the Agent a certificate setting forth in reasonable detail the amount of such increased cost and the basis for the calculation of such amount, which certificate shall be conclusive and binding for all purposes, absent manifest error.

(b) If an Affected Person determines that the compliance with (i) any Applicable Law or (ii) any directive or guideline issued by, or request from, any central bank or other Authority (whether or not having the force of law), in either case, affects or would affect the amount of capital required or expected to be maintained by such Affected Person and that the amount of such capital is increased by or based upon the existence of such Affected Person's commitment under the Program Documents or upon such Affected Person's making, funding or maintaining Advances, then, as promptly as practicable upon written demand of such Affected Person (with a copy of such demand to the Agent), the Borrower shall pay to the Agent for the account of such Affected Person, from time to time as specified by such Affected Person, additional amounts sufficient to compensate such Affected Person in light of the circumstances. Each such Affected Person shall, together with its written demand therefore, deliver to the Borrower and the certificate setting forth in reasonable detail such amounts and the basis for the calculation of such amounts, which certificate shall be conclusive and binding for all purposes, absent manifest error.

(c) Upon the occurrence of any event giving rise to the Borrower's obligation to pay additional amounts to any Affected Person pursuant to SECTIONS 2.07(a), 2.07(b) or 9.03, such Affected Person will, if requested by the Borrower, use reasonable efforts (subject to overall policy considerations of such Affected Person) to designate a different lending office; provided, however, that such designation is made on such terms that such Affected Person and its lending office suffer no significant economic, legal or regulatory disadvantage, with the object of avoiding future consequence of the event giving rise to the operation of any such Section. If such additional amounts are not eliminated by any such designation and such Affected Person does not waive payment of such additional amounts, the Agent, may at its sole discretion within sixty (60) days, recommend a replacement Affected Person not so affected. If after the sixty (60) day period described in the preceding sentence a replacement for such Affected Person has not been procured, the Borrower may propose a replacement for such Affected Person and, upon approval of the Agent (which approval shall not be unreasonably withheld or delayed), such Affected Person shall assign its interests under the applicable Program Documents to such replacement entity. The parties hereby agree that unless and until the Affected Person to be replaced (i) is paid in full for all amounts due and owing hereunder and under any other Program Document, and (ii) enters into assignment documents with the replacement entity which are reasonably satisfactory to such Affected Person, it shall have no obligation to assign any of its rights and interests hereunder. Each such Affected Person agrees to take all actions necessary to permit a replacement to succeed to its rights and obligations hereunder and under the other Program Documents. The Borrower agrees to pay all reasonable expenses incurred by any Affected Person in utilizing another lending office of such Affected Person or in assigning its interest pursuant to this SECTION 2.07(c).

Nothing in this SECTION 2.07(c) shall affect or postpone any of the obligations of the Borrower or the rights of any Secured Party.

SECTION 2.08. COMPENSATION.

Without duplication of any amount due by the Borrower in respect of any Liquidation Fee, the Borrower shall compensate each Affected Person, upon its written request (which request shall set forth in reasonable detail the basis for requesting such amounts and the details showing the basis of the calculation of such amounts), for all reasonable losses, expenses and liabilities (including, without limitation, any interest paid by such Affected Person to lenders of funds borrowed by it to make or carry its Eurodollar Rate Advances and any loss sustained by such Affected Person in connection with the re-employment of such funds), which such Affected Person may sustain: (i) if for any reason (other than a default by such Affected Person) a borrowing of any Eurodollar Rate Advance by the Borrower does not occur on a date specified therefor in the Notice of Borrowing, (ii) if any prepayment of any of the Borrower's Eurodollar Rate Advances occurs on a date which is not the last day of a Settlement Period applicable thereto, (iii) if any prepayment of any of the Borrower's Eurodollar Rate Advances is not made on any date specified in a notice of prepayment given by the Borrower, or (iv) as a consequence of any other default by the Borrower to repay its Eurodollar Rate Advances when required by the terms of this Agreement.

SECTION 2.09. ADDITIONAL YIELD ON EURODOLLAR RATE ADVANCES.

So long as any Affected Person shall be required under regulations of the Board of Governors of the Federal Reserve System to maintain reserves with respect to liabilities or assets consisting of or including Eurocurrency Liabilities, the Borrower shall pay as promptly as practicable following written demand therefor to such Affected Person Eurodollar Additional Yield on the principal amount of each outstanding Advance on each date on which Yield is payable on such Advance. Such Eurodollar Additional Yield shall be determined on a reasonable basis by such Affected Person and notified to the Borrower through the Agent within thirty (30) days after any payment is made with respect to which such additional Yield is requested. Each such Affected Person shall, together with the written demand therefor, deliver to the Borrower and the Agent a certificate setting forth in reasonable detail the amount of such Eurodollar Additional Yield and the basis for the calculation of such amount, which certificate shall be conclusive and binding for all purposes, absent manifest error.

SECTION 2.10. TERMINATION OR REDUCTION OF THE TOTAL COMMITMENT.

(a) The Borrower may at any time, upon thirty (30) days prior written notice to the Agent terminate in whole or reduce in part the unused portion of the Total Commitment; PROVIDED, that each such partial reduction of the Total Commitment shall be in an amount equal to at least $5,000,000 or an integral multiple thereof.

SECTION 2.11. RESCISSION OR RETURN OF PAYMENT.

The Borrower further agrees that, if at any time all or any part of any payment theretofore made by it to any Secured Party or their designees is or must be rescinded or returned

for any reason whatsoever (including, without limitation, the insolvency, bankruptcy or reorganization of the Borrower or any of its Affiliates), the obligation of the Borrower to make such payment to such Secured Party shall, for the purposes of this Agreement, to the extent that such payment is or must be rescinded or returned, be deemed to have continued in existence and this Agreement shall continue to be effective or be reinstated, as the case may be, as to such obligations, all as though such payment had not been made.

SECTION 2.12. FEES PAYABLE BY BORROWER.

The Borrower agrees to pay to the Agent and the Secondary Lenders such fees as are set forth in the Fee Letter.

SECTION 2.13. POST-DEFAULT INTEREST.

The Borrower hereby promises to pay interest on the unpaid principal amount of each Advance and any other amount payable by the Borrower hereunder, in each case, which shall not be paid in full when due, for the period commencing on the due date thereof until but not including the date the same is paid in full at the Post-Default Rate. Interest payable at the Post-Default Rate shall be payable on the Agent's demand.

SECTION 2.14. PAYMENTS.

(a) All amounts owing and payable by the Borrower to the Agent, any Lender or any Secondary Lender, in respect of the Advances or otherwise under this Agreement or any other Program Document, including, without limitation, the principal amount of outstanding Advances, Yield, fees, indemnities, expenses or other amounts payable under the Program Documents, shall be paid in Dollars, in immediately available funds on or prior to 12:00 noon (New York City time) on the date due without counterclaim, setoff, deduction, defense, abatement, suspension or deferment to the Agent's Account. Any payment paid after 12:00 noon (New York City time) on any day shall be deemed to have been made on the next Business Day for all purposes of this Agreement.

(b) All computations of interest at the Post-Default Rate and all computations of Yield, fees and other amounts hereunder shall be made on the basis of a year of 360 days for the actual number of days elapsed. Whenever any payment or deposit to be made hereunder shall be due on a day other than a Business Day, such payment or deposit shall be made on the next succeeding Business Day and such extension of time shall be included in the computation of such payment or deposit.

(c) Upon receipt of funds deposited into the Agent's Account, the Agent shall distribute such funds, FIRST to the Lenders and the Secondary Lenders on a pro rata basis in accordance with such amounts owed to each Lender and Secondary Lender in payment in full of all accrued and unpaid Yield owing to the Lenders and Secondary Lenders, SECOND to the Lenders, the Secondary Lenders or the Agent, on a pro rata basis in accordance with such amounts owed to each such Person in payment of any other fees or other amounts owed by the Borrower to the Lenders, the Secondary Lenders and the Agent under this Agreement and the other Program Documents (other than in respect of

the principal amount of the Advances), and THIRD to the payment of the principal amount of the Advances owing to such Lenders and Secondary Lenders on a pro rata basis in accordance with such amounts owed to each such Lender and Secondary Lender.

(d) During the continuance of an Event of Default all payments in respect of the Borrower Obligations, payable by or on behalf of the Borrower, including all Proceeds resulting from the sale or disposition of the Pledged Collateral shall be remitted to the Agent's Account and applied in accordance with Section 7.03(a).

SECTION 2.15. RATABLE PAYMENTS.

If any Secondary Lender or Lender (other than the Conduit Lender), whether by setoff, bankers' lien, counterclaim or otherwise, has payment made to it with respect to any Borrower Obligations owing to it in a greater proportion than that received by any other Lender or Secondary Lender entitled to receive a ratable share of such payments, such Lender or Secondary Lender agrees, promptly upon demand, to purchase for cash without recourse or warranty a portion of the unpaid Borrower Obligations held by the other Lenders and Secondary Lenders so that after such purchase each Lender and Secondary Lender will hold its ratable proportion of such unpaid Borrower Obligations; provided that if all or any portion of such excess amount is thereafter recovered from such Secondary Lender or Lender, as the case may be, such purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest.

SECTION 2.16. BORROWER'S OBLIGATIONS ABSOLUTE.

The Borrower's obligations under this Agreement and under the other Program Documents to which it is a party shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms hereof and thereof, under any and all circumstances and irrespective of any setoff, counterclaim or defense to payment which the Borrower, the Adviser, the Administrator or any other Person may have or have had against any Secured Party or any other Person.

ARTICLE III
CONDITIONS PRECEDENT

SECTION 3.01. CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF THIS AGREEMENT.

The effectiveness of this Agreement and the Conduit Lender's and any the Secondary Lender's obligations hereunder shall be subject to the conditions precedent that the Agent shall have received (or waived receipt thereof) on or before the initial Borrowing Date the following, each (unless otherwise indicated) in form and substance reasonably satisfactory to the Agent in sufficient copies for the Conduit Lenders and the Secondary Lenders:

(a) each of the Program Documents duly executed and delivered by the parties thereto, which shall each be in full force and effect;

(b) the Prospectus, as in effect on the Closing Date;

(c) the signed opinions of counsel to the Borrower, the Adviser and the Administrator addressed to the Agent, each the Conduit Lender and each Secondary Lender as to such matters as the Agent shall have reasonably requested;

(d) if requested by the Conduit Lender or any Secondary Lender pursuant to SECTION 2.03 on or prior to the Closing Date, an Advance Note duly executed and completed by the Borrower to the Conduit Lender or such Secondary Lender, as applicable;

(e) copies of all Governmental Authorizations, material Private Authorizations and Governmental Filings, if any, which may be required to be made or obtained by the Borrower in connection with the transactions contemplated by the Program Documents;

(f) a certificate of the Secretary or Assistant Secretary of each of the Borrower, the Adviser and the Administrator certifying (i) as to its certificate of incorporation or declaration of trust, as applicable and by-laws, (ii) solely as to the Borrower, as to the resolutions of its Board of Trustees approving this Agreement, the other Program Documents to which it is a party and the transactions contemplated hereby and thereby, (iii) that its representations and warranties set forth in the Program Documents to which it is a party are true and correct, and (iv) the incumbency and specimen signature of each of its officers authorized to execute the Program Documents to which it is a party;

(g) copies of proper financing statements naming the Borrower as debtor and the Agent as secured party to be filed under the UCC in all jurisdictions that the Agent may deem necessary or desirable in order to perfect the Agent's interests in the Pledged Collateral contemplated by this Agreement;

(h) copies of proper termination financing statements, if any, necessary to release all Adverse Claims of any Person in the Assets of the Borrower previously granted by the Borrower;

(i) completed requests for information, dated on or before the date of the initial Borrowing Date, listing all effective financing statements filed in the jurisdictions referred to in subsection (g) above that name the Borrower (under its present name and any previous name) as debtor, together with copies of such other financing statements;

(j) a pro-forma Investor Report, which shall evidence compliance with the Borrowing Base Test, the Asset Coverage Test and certain other terms of the Program Documents after giving effect to the initial borrowing of Advances under this Agreement; and

(k) the fees, if any, to be received by it on or prior to the Closing Date under this Agreement and the Fee Letter.

SECTION 3.02. CONDITIONS PRECEDENT TO ALL ADVANCES.

The obligation of the Conduit Lenders and the Secondary Lenders to make any Advance (including the initial Advances) on any Borrowing Date shall be subject to the fulfillment of the following conditions:

(a) each of the representations and warranties of the Borrower, the Custodian, the Adviser and the Administrator contained in this Agreement, the Letter Agreements and the other Program Documents shall be true and correct as of such date and shall continue to be true immediately after giving effect to such Advance;

(b) no Default or Event of Default shall have occurred and be continuing or shall result from the making of such Advance;

(c) immediately after giving effect to such Advance the Borrower shall be in full compliance with each of the Borrowing Base Test and the Asset Coverage Test;

(d) immediately after the making of any such Advance, the aggregate outstanding principal amount of all Advances shall not exceed the Total Commitment; and

(e) the Agent shall have received an Investor Report and such other instruments, certificates and documents as the Agent shall reasonably request.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES

SECTION 4.01. REPRESENTATIONS AND WARRANTIES OF THE BORROWER.

The Borrower represents and warrants to each of the Secured Parties on and as of the Closing Date, each Borrowing Date and each Weekly Determination Date, as follows:

(a) DUE ORGANIZATION. The Borrower is a Massachusetts business trust, duly organized, validly existing and in good standing under the laws of the Commonwealth of Massachusetts, with full power and authority to own and operate its Assets, to conduct the business in which it is now engaged and to execute and deliver and perform its obligations under this Agreement and the other Program Documents to which it is a party, except where the failure to hold such power and authority could not reasonably be expected to result in a Material Adverse Effect.

(b) DUE QUALIFICATION AND GOOD STANDING. The Borrower is duly qualified to do business and is in good standing in each jurisdiction in which the nature of its business, assets and properties, including, without limitation, the performance of its obligations under this Agreement and the other Program Documents to which it is a party, requires such qualification, except where the failure to be so qualified or to be in good standing could not reasonably be expected to have a Material Adverse Effect.

(c) DUE AUTHORIZATION; EXECUTION AND DELIVERY; LEGAL, VALID AND BINDING; ENFORCEABILITY. The execution and delivery by the Borrower of, and the performance by the Borrower of its obligations under, the Program Documents to which it is a party are within its powers and have been duly authorized by all requisite action by the Borrower and have been duly executed and delivered by the Borrower and constitute the legal, valid and binding obligations of the Borrower enforceable against the Borrower in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).

(d) NONCONTRAVENTION. Neither the execution and delivery by the Borrower of this Agreement, the other Program Documents to which it is a party, nor the consummation of the transactions herein or therein contemplated, nor compliance with the terms, conditions and provisions hereof or thereof by it, will (i) conflict with, or result in a breach or violation of, or constitute a default under its declaration of trust or other organizational documents, (ii) conflict with or contravene (A) any Applicable Law, (B) any contractual restriction binding on or affecting the Borrower or any of its Assets, or (C) any order, writ, judgment, award, injunction or decree binding on or affecting the Borrower or any of its Assets, (iii) result in a breach or violation of, or constitute a default under, or permit the acceleration of any obligation or liability in, or but for any requirement of the giving of notice or the passage of time (or both) would constitute such a conflict with, breach or violation of, or default under, or permit any such acceleration in, any contractual obligation or any agreement or document to which it is a party or by which it or any of its properties is bound (or to which any such obligation, agreement or document relates), or (iv) result in any Adverse Claim upon any Asset of the Borrower.

(e) GOVERNMENTAL AUTHORIZATIONS; PRIVATE AUTHORIZATIONS; GOVERNMENTAL FILINGS. The Borrower has obtained all necessary Governmental Authorizations and Private Authorizations, and made all Governmental Filings necessary for the execution and delivery by the Borrower of, and the performance by the Borrower of its obligations under, this Agreement, the other Program Documents to which it is a party and the agreements, certificates and instruments contemplated hereby or thereby, except in the case of Private Authorizations, where the failure to obtain such Private Authorizations could not reasonably be expected to have a Material Adverse Effect.

(f) SECURITY INTEREST. This Agreement and the Control Agreement and the actions required to be taken pursuant to the terms hereof and thereof are, and at all times shall be, effective to create and perfect in the Agent for the benefit of the Secured Parties a first-priority perfected security interest in the Pledged Collateral (subject to the Lien of the Custodian securing the Custodian's Overdraft Advances to the extent permitted by SECTION 5.02(o) and other Permitted Liens) free and clear of all Adverse Claims.

(g) BORROWING BASE ELIGIBLE ASSETS, ADVERSE CLAIMS, ETC. The Borrower owns each Borrowing Base Eligible Asset free and clear of Adverse Claims; and as of the initial Borrowing Date and at all times thereafter, the Agent has a first-priority perfected

security interest in the Pledged Collateral (subject to the Lien of the Custodian securing the Custodian's Overdraft Advances to the extent permitted by SECTION 5.02(o) and other Permitted Liens) free and clear of all Adverse Claims.

(h) NO FINANCING STATEMENT. No effective financing statements or other instruments similar in effect covering any Asset of the Borrower are on file in any recording office, except those filed in favor of the Agent pursuant to this Agreement.

(i) PRINCIPAL OFFICE; ORGANIZATION. The Borrower's principal place of business and chief executive office is at the addresses referred to in
SECTION 5.01(d), the Borrower's jurisdiction of organization is the Commonwealth of Massachusetts and the Borrower has not transacted any business under any name other than "ING Prime Rate Trust".

(j) PENDING LITIGATION OR OTHER PROCEEDING. There are no pending or, to the best of the Borrower's knowledge, threatened investigations, litigation, suits or proceedings involving the Borrower which could reasonably be expected to have a Material Adverse Effect.

(k) INVESTMENT COMPANY ACT, ETC. The Borrower is and will continue to be registered as a diversified, closed-end management investment company as such term is used in the Investment Company Act and is in compliance in all material respect with the Investment Company Act and the Investment Policies and Restrictions (other than with respect to the Borrower's minimum "asset coverage" (as defined in and determined pursuant to
Section 18 of the Investment Company Act) which compliance shall be without qualification).

(1) INFORMATION AND REPORTS. The Prospectus, each Investor Report, each Weekly Portfolio Report, each Notice of Borrowing and all other written information, written reports, certificates and written statements provided by or on behalf of the Borrower to any Secured Party for purposes of or in connection with this Agreement, the other Program Documents to which the Borrower is a party or the transactions contemplated hereby or thereby to be performed by the Borrower is, and all such information hereafter provided by or on behalf of the Borrower to any Secured Party is and will be (except for projections and forward looking statements (other than any pro forma Investor Report)) true, correct and complete in all material respects on the date such information is stated or certified and no such information contains, or will contain, any material misrepresentation or any omission to state therein matters necessary to make the statements made therein not misleading under the circumstances in which they were made or delivered as of the time when made or delivered.

(m) APPLICABLE LAW. The Borrower is in full compliance with all Applicable Law, including, without limitation, the Securities Act and the Investment Company Act, including the rules and regulations promulgated thereunder, except where the failure to so comply could not give rise to a reasonable possibility of a Material Adverse Effect (other than with respect to the Borrower's minimum "asset coverage" (as defined in and

determined pursuant to Section 18 of the Investment Company Act), which compliance shall be without qualification).

(n) ERISA. The Borrower is not nor has during the past five (5) years been a member of an ERISA Group and does not have nor during the past five
(5) years had any liability or obligation with respect to any Plan, Multiemployer Plan or Benefit Arrangement; provided, however, that the Borrower may incur liabilities or obligations under a plan or arrangement in the form of (i) the Form of Retirement Plan For Each Closed End Fund or
(ii) the Form of Amended and Restated Deferred Compensation Agreement.

(o) NO DEFAULT OR EVENT OF DEFAULT. No Default or Event of Default has occurred and is continuing and on each Borrowing Date each of the conditions precedent to the making of Advances set forth in Section 3.02 have been fully satisfied.

(p) BORROWING BASE TEST; ASSET COVERAGE TEST, ETC. The Borrowing Base Test and the Asset Coverage Test are fully satisfied and will be fully satisfied and immediately after the making of each Advance; provided, that if on any date this representation is made (other than a Borrowing Date) the Borrower is in full compliance with the requirements set forth in
SECTION 2.05(b), the Borrower shall be deemed to be in compliance with this CLAUSE (p) to the extent it relates to the Borrowing Base Test as of such date.

(q) INTERNAL REVENUE CODE. The Borrower is qualified, and intends to continue to qualify, as a "regulated investment company" within the meaning of the Code, and as such its income is not, and will not be, subject to tax at the corporate level under the Code.

(r) TAXES. The Borrower has filed all United States Federal income tax returns and all other material tax returns which are required to be filed by it, if any, and has paid all material taxes due pursuant to such returns, if any, or pursuant to any assessment received by the Borrower, except for any taxes or assessments which are being contested in good faith by appropriate proceedings and with respect thereto adequate reserves have been established in accordance with GAAP.

(s) FINANCIAL CONDITION. The statement of assets and liabilities of the Borrower as at February 28, 2002, certified by KPMG LLP, certified public accountants, fairly present in conformity with GAAP the financial position of the Borrower at such date and since such date there has been no material adverse change in the business, financial condition or results of operations of the Borrower.

(t) REGULATIONS T, U AND X. Neither the making of any Advance nor the use of proceeds thereof will violate the provisions of Regulation U or Regulation X. The Borrower's use of the proceeds of the Advances will not violate Regulation T.

ARTICLE V
COVENANTS

SECTION 5.01. AFFIRMATIVE COVENANTS OF THE BORROWER.

The Borrower covenants and agrees that it shall from the date hereof until the Program Termination Date:

(a) COMPLIANCE WITH AGREEMENTS, LAWS, ETC. (i) Duly observe, comply with and conform to all requirements of Applicable Law relative to the conduct of its business or to its Assets, including without limitation the Investment Company Act, (ii) preserve and keep in full force and effect the legal existence of the Borrower and the rights, privileges, qualifications and franchises of the Borrower, (iii) comply in all material respects with the terms and conditions of each Program Document to which it is a party, and (iv) obtain, maintain and keep in full force and effect all Governmental Authorizations, Private Authorizations and Governmental Filings which are necessary or appropriate to properly carry out its business and the transactions contemplated to be performed by the Borrower under this Agreement and the other Program Documents to which it is a party, except with respect to clauses (i) through (iv) above where the failure to so observe, comply, preserve, keep, obtain, maintain and conform could not reasonably be expected to have a Material Adverse Effect (other than with respect to the Borrower's minimum "asset coverage" (as defined and determined pursuant to Section 18 of the Investment Company Act) which compliance shall be without qualification).

(b) TAXES. Cause to be computed, paid and discharged when due all material taxes, assessments and other governmental charges or levies imposed upon it, or upon any income or Assets of the Borrower, prior to the day on which penalties are attached thereto, unless and to the extent that the same shall be contested in good faith by appropriate proceedings and with respect to which adequate reserves have been established on the books of the Borrower in accordance with GAAP.

(c) FURTHER ASSURANCES. Promptly, at its expense, execute and deliver such further instruments and take such further action as is necessary in order to (i) establish and protect the rights, interests and remedies created, or intended to be created, in favor of the Secured Parties including, without limitation, all such actions which are necessary or reasonably advisable to maintain and protect the Secured Parties' first-priority perfected (subject to the Lien of the Custodian securing the Custodian's Overdraft Advances to the extent permitted by Section 5.02(o) and other Permitted Liens) security interest in the Pledged Collateral free and clear of Adverse Claims, and (ii) enable the Secured Parties to enforce their rights and remedies under the Program Documents to which the Borrower is a party, including, without limitation, to do all things necessary at the reasonable request of the Agent during the continuance of an Event of Default to have each Loan Asset and the related Loan Documents assigned to the Agent or its designee.

(d) CONTINUED EXISTENCE. Keep the Commonwealth of Massachusetts as its jurisdiction of organization and keep its principal place of business and chief executive office at the address of the Borrower set forth in
Section 9.02 or, upon thirty (30) days'

prior written notice to the Agent, in any other jurisdiction of organization or at any other locations in jurisdictions where all actions to protect and perfect the Agent's first-priority perfected (subject to the Lien of the Custodian securing the Custodian's Overdraft Advances to the extent permitted by Section 5.02(o) and other Permitted Liens) security interest in the Pledged Collateral have been taken and completed.

(e) FINANCIAL STATEMENTS: ACCOUNTANTS' REPORTS; OTHER INFORMATION. Provide to the Agent (with enough additional copies for the Conduit Lender and each Secondary Lender):

(i) as soon as available, and in any event within ninety (90) days after the end of each fiscal year of the Borrower, a statement of assets and liabilities of the Borrower as at the end of such fiscal year, and statements of operations and of changes in net assets of the Borrower for such fiscal year, and the Borrower's portfolio of investments as of the end of such fiscal year, with an audit report thereon issued by KPMG LLP or other independent certified public accountants of nationally recognized standing, together with the comparable report for the prior fiscal year;

(ii) as soon as available, and in any event within sixty (60) days after the end of each first semi-annual fiscal period of the Borrower, a statement of assets and liabilities of the Borrower as at the end of such period, a statement of operations and of changes in net assets of the Borrower for such period, and the portfolio of investments as of the end of such period, all in reasonable detail and stating in comparative form the respective figures for the comparable period in the preceding year, prepared in accordance with GAAP, consistently applied and all certified (subject to normal year-end adjustment) as to fairness of presentation in all material respects by an Authorized Officer;

(iii) as soon as available, and in any event within sixty (60) days after the end of the first and third fiscal quarters of the Borrower's fiscal years, a list setting forth each of the senior loan assets held by the Borrower and the Value thereof, in each case, as of the last day of such quarter;

(iv) simultaneously with the delivery of each set of financial statements referred to in clauses (i) and (ii) above, a statement of an Authorized Officer to the effect that nothing has come to the attention of such Authorized Officer to cause him/her to believe that any Default or Event of Default existed on the date of such statements;

(v) as soon as possible, and in any event within three (3) Business Days of the Borrower's actual knowledge of the occurrence of any Default or Event of Default, a certificate of an Authorized Officer setting forth the details thereof and the action which the Borrower is taking or proposes to take with respect thereto;

(vi) as soon as possible, and in any event within two (2) Business Days, after the Borrower has actual knowledge of any failure by the Custodian to

perform or observe any term, covenant or agreement on its part to be performed under the Custodial Agreement which failure gives rise to a reasonable possibility of a Material Adverse Effect, written notice thereof executed by an Authorized Officer;

(vii) promptly upon the mailing thereof to the shareholders of the Borrower generally, copies of all financial statements, reports and proxy statements so mailed;

(viii) promptly upon the filing thereof, copies of all registration statements (other than the exhibits thereto and any registration statements on Form S-8 or its equivalent) and unless duplicative of any deliveries to be made under clauses (i) or (ii) above, annual and semi-annual reports which the Borrower shall have filed with the SEC;

(ix) on or before the second Business Day of each week, weekly portfolio reports and weekly covenant compliance certificates in substantially the form of Schedule II attached hereto (each a "Weekly Portfolio Report") as of the Determination Date occurring on the Business Day immediately prior thereto (and, if applicable, reflecting compliance with the requirements of SECTION 2.05(b) on the Determination Date occurring during the immediately preceding calendar week), signed by an Authorized Signatory;

(x) on or before the tenth (10th) Business Day of each calendar month (or during the continuance of a Default or Event of Default more frequently as the Agent shall reasonably request (which may be daily)), an Investor Report substantially in the form of Schedule I hereto, as of the last Business Day of the immediately preceding calendar month (or other relevant period if delivered on a daily or weekly basis), together with a certificate of an Authorized Signatory in substantially the form of Annex A to the Investor Report;

(xi) promptly upon its receipt of and contemporaneously with its giving of any notice relating to the termination of the Custodial Agreement or the Control Agreement, copies of any such notice;

(xii) prior to the issuance by the Borrower of any preferred shares, notice of such issuance which notice shall include the offering materials to be used in connection with the issuance of such preferred shares;

(xiii) prompt notice of any amendment or modification to the Investment Policies and Restrictions which notice shall include, in reasonable detail, a description of any such change;

(xiv) from time to time upon the reasonable request of the Agent, copies of a current report identifying the locations of any Pledged Collateral maintained by the Borrower or which is in the possession of or is maintained in securities

accounts with an agent or sub-custodian of the Custodian which report shall specify the Pledged Collateral held by each agent or sub-custodian; and

(xv) from time to time such additional information regarding the financial condition or business of the Borrower as the Agent may reasonably request.

(f) MAINTENANCE OF INSURANCE. Maintain in force with financially sound and reputable insurers, policies with respect to its assets and property and business against such risks and in such amounts as are usually insured against in the same general area in the case of entities engaged in similar lines of business and as may be required by the Investment Company Act.

(g) MAINTENANCE OF BUSINESS. Remain at all times a closed-end investment company for the purposes of the Investment Company Act and continue to engage in business of the same general type as now conducted by the Borrower, and will continue to be a Massachusetts business trust and will preserve, renew and keep in full force and effect its existence and rights, privileges and franchises necessary or reasonably desirable in the normal conduct of business and will at all times remain registered under the Investment Company Act.

(h) AUDITS. Annually (or more frequently as the Agent, for itself and as agent for the Secured Parties may require after the occurrence of and during the continuance of a Default or an Event of Default) and at the sole cost and expense of the Borrower (i) cause an independent nationally recognized accounting firm reasonably satisfactory to the Agent, to enter the premises of the Borrower and any Person to whom the Borrower delegates all or any portion of its duties under any Program Document to which it is a party (including, without limitation, the Adviser and the Administrator) and examine and audit the books, records and accounts of the Borrower and such other Person relating to its business, financial condition, operations and the Borrower's and such other Person's performance under the Program Documents to which it is a party, (ii) permit such accounting firm to discuss the Borrower's and such other Person's affairs and finances with the officers, partners, employees and accountants of any of them, (iii) cause such accounting firm to provide to the Agent, with a certified report in respect of the foregoing, which shall be in form reasonably satisfactory to the Agent setting forth the results of such accounting firm's audit of the Borrower's performance under the Program Documents as determined pursuant to the scope of audit and procedures set forth on Schedule III hereto, and (iv) authorize such accounting firm to discuss such affairs, finances and performance with representatives of the Agent and their designees; provided, that, such examination and audit of information provided to the Borrower in connection with any Loan Document (which, for the avoidance of doubt, does not include the Loan Documents relating to any Eligible Loan Asset) shall be subject to any prohibition set forth in written confidentiality agreements entered into by the Borrower with respect thereto.

(i) ACCESS TO RECORDS. Annually (or more frequently as the Agent, for itself and as agent for the Secured Parties may require after the occurrence of and during the continuance of a Default or an Event of Default) permit the Agent or any Person

designated by the Agent to, upon reasonable advance notice and during normal hours, visit and inspect at reasonable intervals its and any Person to which it delegates any of its duties under the Program Documents to which it is a party (including, without limitation, the Adviser and the Administrator) books, records and accounts relating to its business, financial condition, operations, Assets and its performance under the Program Documents to which it is a party and to discuss the foregoing with its and such Person's officers, partners, employees and accountants, all as often as the Agent may reasonably request; provided, that, the Agent shall use reasonable efforts to coordinate their inspections; provided, however, that if under the terms of any agreement with any Person which is not an Affiliate of the Adviser, the Administrator or the Borrower to whom the Adviser, the Administrator or the Borrower has delegated any of its duties under any Program Document, only the Borrower, the Adviser or the Administrator, as the case may be, is permitted to visit and inspect such Person's books, records and accounts, it shall at the request of the Agent, exercise or cause the applicable Adviser, Administrator or the Borrower, as the case may be, to exercise the rights specified in this Section 5.01(i) on behalf of such requesting parties, as frequently as the terms of any such agreement permit, but in no event less frequently than annually; provided, further, that the Agent's and its designees' right to review information provided to the Borrower in connection with any Loan Document (which, for the avoidance of doubt, does not include the Loan Documents relating to any Eligible Loan Asset) shall be subject to the prohibitions of any written confidentiality agreements entered into by the Borrower with respect thereto, provided, that the Borrower had used reasonable efforts to permit the Agent or its designees to review such information by complying with any terms of such confidentiality agreement which would permit disclosure of confidential information to the third parties.

(j) INVESTMENT POLICIES AND RESTRICTIONS. At all times be in compliance in all material respects with Investment Policies and Restrictions and maintain necessary liquidity to meet its obligations to fund future advances or other extensions of credit under the Loan Documents relating to its Loan Assets.

(k) DEFENSE OF SECURED PARTIES' INTEREST. Warrant and defend each of the Secured Parties' right and interest in, to and under the Pledged Collateral against all Adverse Claims of all Persons whomsoever.

(l) CUSTODY AND CONTROL. At all times cause all Borrowing Base Eligible Assets of the Borrower (including all instruments, if any, evidencing the same and all Specified Loan Documents) to constitute Pledged Collateral and to be (i) custodied with the Custodian or a sub-custodian of the Custodian pursuant to the Custodial Agreement, and (ii) subject to the Custodian's control and custody in accordance with the Control Agreement; provided, that if such Pledged Collateral is a Loan Asset and concurrently with any request to register such Loan Asset in the name of the Borrower, the Borrower shall deliver instructions to all Selling Institutions, Transaction Agents and Obligors related to such Loan Asset requiring that any instrument evidencing such Loan Asset be delivered to the Custodian. At all times cause all Loan Documents (other than the Specified Loan Documents) to be held at the address of the Borrower set forth in
Section 9.02

or, such other location of the Borrower in Arizona as the Borrower shall designate upon twenty (20) day's prior written notice to the Agent.

(m) NOTICE OF LITIGATION OR OTHER PROCEEDINGS. Promptly give notice in writing to the Agent of all litigation, arbitration proceedings and regulatory proceedings affecting the Borrower or the Assets of the Borrower, except such litigation, arbitration proceedings and regulatory proceedings which could not reasonably be expected to have a Material Adverse Effect.

(n) MAINTENANCE OF BOOKS OF RECORD AND ACCOUNT. Keep proper books of record and account in which full, true and correct entries shall be made of all dealings and transactions in relation to its business and activities in accordance with the requirements of the SEC or under the Investment Company Act.

(o) PROCEEDS OF PLEDGED COLLATERAL. Cause all Proceeds of the Pledged Collateral to be remitted to the Collateral Account if a Default or Event of Default shall be continuing or would occur as a result of the failure to so remit such Proceeds.

(p) USE OF PROCEEDS. Use the net proceeds of any Advance made hereunder solely for the purpose of (i) purchasing Assets, (ii) refinancing Debt under the Edison Credit Facility as of the Closing Date (iii) paying principal and Yield in respect of outstanding Advances, or (iv) for general corporate purposes.

(q) INVESTMENT ADVISER. Except as consented to by the Agent (which consent shall not be unreasonably withheld), at all times maintain ING Investments, LLC as the Borrower's investment adviser, provided that the Agent shall in no event be obligated to consent to any change of the Adviser unless such successor investment adviser has entered into a letter agreement with the Agent substantially identical to the Adviser Letter Agreement. The parties hereto acknowledge, agree and consent to the sub-advisory agreements by and among the Adviser and ING Aeltus Investment Management, Inc., a Connecticut corporation, on terms as set forth on the Prospectus as of the date hereof.

(r) ADMINISTRATOR. Except as consented to by the Agent (which consent shall not be unreasonably withheld), at all times maintain ING Funds Services, LLC as the Borrower's administrator, provided that the Agent shall in no event be obligated to consent to any change of the Administrator unless such successor administrator has entered into a letter agreement with the Agent substantially identical to the Administrator Letter Agreement.

SECTION 5.02. NEGATIVE COVENANTS OF THE BORROWER. The Borrower covenants and agrees that from the date hereof until the Lender Termination Date the Borrower shall not:

(a) IMPAIRMENT OF RIGHTS. Enter into any agreement containing any provision which would be violated or breached by the performance of its obligations under any Program Document to which the Borrower is a party the continuation of which could reasonably be expected to have a Material Adverse Effect or which could reasonably be expected to result in any material liability to a Secured Party.

(b) PROSPECTUS AND INVESTMENT POLICIES AND RESTRICTIONS. Purchase any Assets or engage in any line of business not contemplated by the Prospectus or the Investment Policies and Restrictions.

(c) CREATION OF DEBT. Create, assume or suffer to exist any Debt, except for Permitted Debt.

(d) MERGERS; SALE OF ASSETS. Adopt or carry out any plan of liquidation, partial liquidation, reorganization, incorporation, recapitalization, merger or consolidation nor sell, transfer or otherwise dispose of all or substantially all of its Assets (whether in one transaction or a series of related transactions), without the prior written consent of the Agent (which consent shall not be unreasonably withheld or delayed).

(e) ADVANCES AND EXTENSIONS OF CREDIT. Make any advance or other extension of credit to any Person except in the ordinary course of the Borrower's business and as expressly contemplated by the Investment Policies and Restrictions.

(f) CUSTODIAL AGREEMENT; INVESTMENT POLICIES AND RESTRICTIONS; PROSPECTUS. Without the prior written consent (which consent shall not be unreasonably withheld or delayed) of the Agent, (i) cancel or terminate the Custodial Agreement or (ii) permit or consent to any material amendment, modification or waiver of the Custodial Agreement unless the Borrower has delivered to the Agent a copy thereof together with a certificate of an Authorized Officer certifying that such amendment, modification or waiver could not reasonably be expected to have a Material Adverse Effect, or
(iii) take any action inconsistent in any material respect with the Prospectus or the Investment Policies and Restrictions.

(g) AMENDMENTS TO ORGANIZATIONAL DOCUMENTS. Except in connection with the issuance of preferred stock, amend, terminate, supplement or otherwise modify in any material respect its declaration of trust, by-laws or other organizational documents, unless the Borrower has delivered to the Agent a copy thereof and a certificate of an Authorized Officer certifying that to the actual knowledge of such Authorized Officer such amendment, modification or waiver could not reasonably be expected to have a Material Adverse Effect.

(h) ERISA. Become a member of an ERISA Group or incur any liability or obligation with respect to any Plan, Multiemployer Plan or any Benefit Arrangement; provided, however, that the Borrower may incur liabilities or obligations under a plan or arrangement in the form of (i) the Form of Retirement Plan For Each Closed End Fund or (ii) the Form of Amended and Restated Deferred Compensation Agreement; provided, further, that the Borrower give the Agent at least ten (10) days prior written notice of any such amendment to the forms of the plan or agreement that materially increases the Borrower's liabilities under the plan or agreement.

(i) INVESTMENT POLICIES AND RESTRICTIONS. Without the prior written consent (which consent shall not be unreasonably withheld or delayed) of the Agent (i) unless required by a change in Applicable Law (including, without limitation, the Investment

Company Act and the Securities Act) make or permit any material change in the Investment Policies and Restrictions, or (ii) make or permit any change in any Industry Class used to compute the Borrowing Base.

(j) LIENS. Create, assume or suffer to exist any Adverse Claim on any Asset now owned or hereafter acquired by it.

(k) SENIOR SECURITIES. Issue any "senior securities", as such term is defined and used in the Investment Company Act other than Permitted Senior Securities.

(l) MARGIN REQUIREMENTS. Extend credit to others for the purpose of buying or carrying any "margin stock" in such a manner as to violate Regulation T, Regulation U or Regulation X or use the proceeds of any Advance to purchase or carry Margin Stock or, without limiting the foregoing, have more than twenty percent (20%) of its total Assets constitute Margin Stock.

(m) RESTRICTED PAYMENTS. Make any Restricted Payment (i) if any Default or Event of Default shall be continuing or shall result therefrom,
(ii) if immediately after giving effect to such payment the Borrower will not be in full compliance with the Borrowing Base Test and the Asset Coverage Test, (iii) at any time after the Agent shall have delivered a Notice of Exclusive Control to the Custodian (unless such Notice of Exclusive Control has been revoked in writing by the Agent), or (iv) at any time after the Maturity Date of the Advances shall have occurred.

(n) NAME CHANGE. Change its name (i) without giving the Agent at least ten (10) days prior written notice, and (ii) unless all actions necessary and reasonably appropriate to protect and perfect the Secured Parties' first-priority perfected security interest (subject to any Permitted Liens) in the Pledged Collateral have been taken and completed.

(o) CUSTODIAN'S OVERDRAFT ADVANCES. Permit the Aggregate Custodian's Advance Amount to at any time exceed $50,000,000.

(p) NOTICE OF EXCLUSIVE CONTROL; PLEDGED COLLATERAL. After the Borrower has received written notice of delivery by the Agent to the Custodian of a Notice of Exclusive Control, unless such Notice of Exclusive Control is revoked in writing by the Agent, give any instruction to the Custodian in respect of any Pledged Collateral without the prior written consent of the Agent.

ARTICLE VI
EVENTS OF DEFAULT

SECTION 6.01. EVENTS OF DEFAULT.

If any of the following events shall occur and be continuing (each an "Event of Default"):

(a) the Borrower shall fail to make or cause to be made in the manner and when due (i) except as expressly provided in SECTION 2.05(b), any payment of principal to be made or to be caused to be made by it under this Agreement or any of the other Program Documents to which it is a party and such failure shall continue for one (1) Business Day, or (ii) any payment of interest, fees or other deposit to be made or caused to be made by it under this Agreement or any of the other Program Documents to which it is a party and such failure shall continue for three (3) Business Days; or

(b) the Borrower shall (i) fail to be in compliance with the Asset Coverage Test, provided that if an Authorized Officer has certified that the Borrower is taking all steps necessary to cause the Borrower to be in full compliance with the Asset Coverage Test within ten (10) Business Days after the first date of the Borrower's knowledge of such noncompliance, such event shall not constitute an Event of Default unless such failure shall continue for ten (10) Business Days after such first date, or (ii) fail to comply with SECTION 2.05(b), CLAUSES (e)(v), (e)(vi), (g) or (p) of
SECTION 5.01, SECTION 5.02 or SECTION 9.11; or

(c) (i) the Borrower shall fail to perform or observe any other term, covenant or agreement on its part to be performed or observed under this Agreement or any other Program Document to which it is a party, or (ii) the Adviser shall fail to perform any of its obligations under the Adviser Letter Agreement, (iii) the Administrator shall fail to perform any of its obligations under the Administrator Letter Agreement, or (iv) the Custodian shall fail to perform or observe any term, covenant or agreement on its part to be performed or observed under the Control Agreement, or (v) the Custodian shall fail to perform or observe any term, covenant or agreement on its part to be performed under the Custodial Agreement, which in the case of this clause (v), could reasonably be expected to have a Material Adverse Effect, and such failure described in each of clause (i) through
(v) above shall continue unremedied for thirty (30) days after such person has knowledge, or has received notice, of such failure; or

(d) any representation or warranty made or deemed made by the Borrower, the Adviser, the Administrator or the Custodian under or in connection with this Agreement or any other Program Document or any certificate or report delivered by or on behalf of the Borrower, the Adviser, the Administrator or the Custodian in connection therewith shall have been false or incorrect in any material respect on or as of the date made or deemed made or delivered; or

(e) the Agent shall for any reason cease to have a valid and perfected first-priority security interest in the Pledged Collateral (subject to the Lien of the Custodian securing the Custodian's Overdraft Advances to the extent permitted by Section 5.02(o) and other Permitted Liens) free and clear of all Adverse Claims or the Custodian, as collateral agent and/or securities intermediary under the Control Agreement, shall not have custody and control, as contemplated by the Control Agreement, of the Pledged Collateral; or

(f) the Borrower, the Adviser, the Administrator or the Custodian shall generally not pay its debts as such debts become due, or shall admit in writing its

inability to pay its debts generally, or shall make a general assignment for the benefit of creditors; or any proceeding shall be instituted by or against the Borrower, the Adviser, the Administrator or the Custodian seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its property and, in the case of any such proceeding instituted against it (but not instituted by it), either such proceeding shall remain undismissed or unstayed for a period of sixty (60) days, or any of the actions sought in such proceeding (including an order for relief against, or the appointment of a receiver, trustee, custodian or other similar official for, it or for any substantial part of its property) shall occur; or the Borrower, the Adviser, the Administrator or the Custodian shall take any corporate action to authorize any of the actions set forth above in this subsection; or

(g) any provision of any Program Document shall cease to be a legal, valid and binding obligation of any of the parties purported to be bound thereby, enforceable in accordance with its respective terms or the Borrower, the Adviser, the Administrator or the Custodian shall so assert in writing; or

(h) any judgment or order, or any series of judgments or orders, shall have been entered against the Borrower, provided that (i) such judgments or orders that have not been vacated, discharged, settled, paid or satisfied shall aggregate to $1,000,000 or more at any one time outstanding (excluding any judgments or orders related to any payment to or application by the Borrower that is rescinded or must otherwise be returned or paid over as a result of any bankruptcy, insolvency or similar proceeding involving any other Person), and (ii) enforcement actions have been commenced with respect thereto and have not been dismissed or stayed or bonded pending appeal within sixty (60) days of such entry; or

(i) either (1) State Street Bank and Trust Company shall at any time cease to serve as Custodian under the Custodial Agreement or the Control Agreement, unless a successor thereto reasonably satisfactory to the Agent shall have assumed the duties of Custodian thereunder and in accordance with the terms of the Program Documents, or (2) the Custodian or the Borrower shall have given notice of the termination of the Custodial Agreement or the Control Agreement; provided, however, that events specified in clause (2) above shall not constitute an Event of Default if prior to the tenth (10th) Business Day immediately preceding the effective date of such termination a successor custodian reasonably satisfactory to the Agent shall have been appointed as custodian under the Custodial Agreement and shall have assumed the obligations of the Custodian under the Custodial Agreement and the Control Agreement and the Agent shall have received such certificates and opinions as they shall have reasonably requested; or

(j) any event or condition shall occur which results in (x) the acceleration of the maturity of any Debt of the Borrower which Debt in the aggregate is at least $1,000,000 or (y) the acceleration of the maturity of the Debt under the Existing 1998

Credit Agreement or otherwise enables (or, with the giving of notice or lapse of time or both would enable) the holders of such Debt under the Existing 1998 Credit Agreement (or any Person acting on behalf of such holders) to accelerate the maturity thereof; or

(k) any change in Applicable Law (including, without limitation, the Investment Company Act and the Securities Act) shall be enacted or promulgated which (i) would limit in any material respect the ability of the Agent, or any Secured Party to foreclose upon its interest in, or in the event of such foreclosure to dispose of, the Pledged Collateral or to be granted the security interest in Pledged Collateral as contemplated by this Agreement and the Control Agreement, or (ii) unless such changes have been consented to in writing by the Agent (which consent shall not be unreasonably withheld or delayed), would require any material change to the Investment Policies and Restrictions; or

(l) the Adviser or the Administrator shall cease to be a wholly owned direct or indirect subsidiary of the Parent; or

(m) the Advisory Agreement in effect on the Closing Date (or any replacement advisory agreement approved of in writing by the Agent), or the Administration Agreement in effect on the Closing Date (or any replacement administration agreement approved of in writing by the Agent), in either case, shall be terminated, amended, waived or otherwise modified if such termination, amendment, waiver or other modification would require the consent of the Borrower's shareholders under Applicable Law, unless (i) the Agent has consented to the same in writing and (ii) (x) in the case of the Advisory Agreement, if terminated, a replacement investment advisory agreement has been entered into with a successor investment adviser which is substantially similar in all material respects to the Advisory Agreement in effect prior to any such termination, and (y) in the case of the Administration Agreement, if terminated, a replacement administration agreement has been entered into with a successor administrator which is substantially similar in all material respects to the Administration Agreement in effect prior to any such termination; or

(n) ING Investments, LLC, any Affiliate of ING Investments, LLC organized under the laws of a jurisdiction located in the United States and having its primary operations and offices in the United States, or another wholly-owned direct or indirect subsidiary of the Parent consented to in writing by the Agent, in each case which has executed a letter agreement in favor of the Agent on behalf of the Secured Parties substantially identical in all material respects to the Adviser Letter Agreement), is not the current investment adviser for the Borrower;

(o) ING Fund Services, LLC, or any Affiliate of ING Fund Services, LLC organized under the laws of a jurisdiction located in the Untied States and having its primary operations and offices in the United States, or another wholly-owned direct or indirect subsidiary of the Parent consented to in writing by the Agent, in each case which has executed a letter agreement in favor of the Agent on behalf of the Secured Parties substantially identical in all material respects to the Administrator Letter Agreement), is not the current administrator for the Borrower;

(p) either of the Adviser or the Administrator shall (i) sell or otherwise dispose of all or substantially all of its assets, (ii) consolidate with or merge into any other Person unless it is the survivor, or (iii) acquire all or substantially all of the assets of another Person, unless in each case the Agent has consented to the same in writing; or

(q) the ratings issued with respect to the Parent's senior unsecured long-term debt securities (without third-party credit enhancement) shall be less than BBB- by S&P or less than Baa3 by Moody's or, if no such ratings exist from S&P and Moody's, is in the sole judgment of the Agent of less than such credit quality;

then, and in any such event, in addition to all rights and remedies specified in this Agreement, including without limitation, Article VII, and the rights and remedies of a secured party under Applicable Law including, without limitation the UCC, the Agent, upon direction of the Conduit Lender, may by notice to the Borrower, declare the Lender Termination Date and the Secondary Lender Termination Date to have occurred and declare the outstanding Advances to be due and payable (in which case the Lender Termination Date, the Secondary Lender Termination Date and the Maturity Date shall be deemed to have occurred); provided, that, upon the occurrence of any event (without any requirement for the passage of time or the giving of notice, or both) described in subsection
(f) of this SECTION 6.01, the Lender Termination Date, the Secondary Lender Termination Date and the Maturity Date shall be deemed to have automatically occurred.

ARTICLE VII
PLEDGE OF PLEDGED COLLATERAL; RIGHTS OF THE AGENT

SECTION 7.01. SECURITY INTERESTS.

In consideration of the Lenders and the Secondary Lenders making and maintaining the Advances, and as collateral security for the prompt, complete and unconditional payment and performance of all of the Borrower Obligations, the Borrower hereby pledges (and in the case of all Pledged Collateral other than the Loan Assets), hypothecates, assigns, transfers, sets over and delivers to the Agent for the benefit of the Secured Parties and grants to the Agent for the benefit of the Secured Parties a continuing Lien upon and security interest in, all of the Borrower's right, title and interest in, to and under all of the Borrower's accounts, equipment, fixtures, inventory, investment property, payment intangibles, goods, chattel paper (both tangible and intangible), general intangibles, letter-of-credit rights, financial assets, supporting obligations, commercial tort claims, contract rights, instruments, promissory notes and documents, together with all books and records, customer lists, credit files, computer files, programs, printouts and other computer materials and records related thereto, and all products and proceeds thereof, whether now owned or existing or hereafter arising or acquired and wheresoever located (collectively, the "Pledged Collateral"). For the avoidance of doubt, the Pledged Collateral shall include, but not be limited to, the following assets and properties of the Borrower:

(i) all of the Assets, investments and property from time to time credited to the Collateral Account, and all security entitlements with respect to the Collateral Account, all Assets held by the Custodian as bailee and agent for the

Agent pursuant to the Control Agreement and all Loan Assets of the Borrower evidenced by, secured by or governed by any Loan Document;

(ii) the Collateral Account (together with all other accounts in which the distributions referred to in clause (iii) below are remitted);

(iii) all interest, dividends, stock dividends, stock splits, distributions and other money or property of any kind distributed in respect of the assets, investments, property and security entitlements described in CLAUSE (i) above, including without limitation all principal, interest, fees and other payments in respect of such Loan Assets;

(iv) all rights and remedies of the Borrower under the Loan Documents and the Custodial Agreement in respect of the assets, investments, property and security entitlements described in CLAUSE
(i) above;

(v) all security interests, liens, collateral, property, guaranties, supporting obligations, insurance and other agreements or arrangements of whatever character from time to time supporting or securing payment of the assets, investments, property and security entitlements described in CLAUSE (i) above;

(vi) all accounts, contract rights, documents, instruments, securities, investment property, chattel paper, general intangibles (including payment intangibles), inventory, goods, equipment and all other property of every kind and nature, now owned or hereafter acquired in respect of the assets, investments, property and security entitlements described in CLAUSE (i) above);

(vii) all books, records and other information (including, without limitation, computer programs, tapes, discs, punch cards, data processing software and related property and rights) relating to the assets, investments, property and security entitlements described in CLAUSE (i) above; and

(viii) all Proceeds of any and all of the foregoing.

Notwithstanding the foregoing provisions of this SECTION 7.01, the Pledged Collateral shall not include Margin Stock. Terms not otherwise defined in this Section 7.01 shall have the meaning set forth in Article 9 of the UCC.

SECTION 7.02. SUBSTITUTION OF COLLATERAL AND RELEASE OF SECURITY INTEREST.

(a) (a) Subject to Section 5.02(p), so long as no Default or Event of Default shall have occurred and be continuing or would occur as a consequence of such sale, disposition or substitution and the Borrowing Base Test will be satisfied immediately following such sale, disposition or substitution, the Borrower may originate entitlement orders and instructions with respect to the Collateral Account and may sell or dispose of

or substitute Pledged Collateral in accordance with the terms of this Agreement and the Control Agreement.

(b) On the Program Termination Date the Lien granted under this Agreement shall be automatically terminated and released and the Agent at the written request of the Borrower shall execute, deliver and file such instruments as the Borrower shall reasonably request in order to reassign, release or terminate its security interest in the Pledged Collateral. Any and all actions under this SECTION 7.02 shall be without any recourse to, or representation or warranty by, the Agent or any Secured Party and shall be at the sole cost and expense of the Borrower.

SECTION 7.03. APPLICATION OF PROCEEDS.

(a) After the occurrence and during the continuance of an Event of Default, all amounts remitted to the Agent's Account in respect of the Borrower Obligations, including without limitation all Proceeds resulting from the sale or other disposition of the Pledged Collateral shall be applied by the Agent in the following order and priority:

FIRST, to the payment of all amounts advanced or expended by the Agent and all costs and expenses incurred by the Agent in connection with the enforcement of the Secured Parties' rights and remedies under the Program Documents;

SECOND, to the extent funds are remaining after the above application, to the Lenders and the Secondary Lenders to the payment of all accrued and unpaid Yield on all outstanding Advances on a pro-rata basis according to the amount of accrued Yield owing to each Lender and each Secondary Lender;

THIRD, to the extent funds are remaining after the above applications, to the Secured Parties to the payment of all fees payable under the Fee Letter on a pro rata basis according to the amount of such fees owing to each such Secured Party;

FOURTH, to the extent funds are remaining after the above applications, to the Lenders and the Secondary Lenders to the payment of the principal amount of each outstanding Advance on a pro-rata basis according to the amount of principal owing to each Lender and each Secondary Lender;

FIFTH, to the extent funds are remaining after the above applications, to the Secured Parties to the payment of all other amounts payable to the Secured Parties pursuant to this Agreement and the other Program Documents on a pro rata basis according to the amounts owed to each such Secured Party.

The Agent shall, after the final payment in full of all Advances and the occurrence of the Program Termination Date, remit the remaining excess Proceeds which it had received from the sale or disposition of the Pledged Collateral to the Borrower's Account.

(b) For purposes of determining the application to be made of such monies and other cash proceeds by the Agent to other Secured Parties pursuant to this SECTION 7.03,

the Agent may rely exclusively upon a certificate or other statement of such Secured Party, setting forth in reasonable detail the amount then owing to such Secured Party. The Agent shall not be liable for any application of funds in accordance with any certificate or direction delivered pursuant to this SECTION 7.03; PROVIDED, HOWEVER, that no application of funds in accordance with any certificate delivered pursuant to this SECTION 7.03 shall be deemed to restrict or limit the right of any party to contest with the purported obligee its respective liability in respect of the amount set forth in such certificate.

SECTION 7.04. RIGHTS AND REMEDIES UPON EVENT OF DEFAULT.

(a) The Agent (for itself and on behalf of the other Secured Parties) shall have all of the rights and remedies of a secured party under the UCC and other Applicable Law. Upon the occurrence and during the continuance of an Event of Default, the Agent or its designees may (i) deliver a Notice of Exclusive Control to the Custodian; (ii) instruct the Custodian to deliver any or all of the Pledged Collateral and any Loan Documents relating to the Pledged Collateral to the Agent or its designees and otherwise give all instructions and entitlement orders to the Custodian regarding the Pledged Collateral; (iii) require the Borrower to terminate the purchase of any additional Assets, whereupon the Borrower agrees to cease purchasing Assets; (iv) require that the Borrower or the Custodian immediately take action to liquidate the Assets to pay amounts due and payable in respect of the Borrower Obligations; (v) sell or otherwise dispose of the Pledged Collateral, all without judicial process or proceedings; (vi) take control of the Proceeds of any such Pledged Collateral; (vii) subject to the provisions of the applicable Loan Documents, exercise any consensual or voting rights in respect of the Pledged Collateral; (viii) release, make extensions, discharges, exchanges or substitutions for, or surrender all or any part of the Pledged Collateral; (ix) enforce the Borrower's rights and remedies under the Custodial Agreement with respect to the Pledged Collateral; (x) institute and prosecute legal and equitable proceedings to enforce collection of, or realize upon, any of the Pledged Collateral; (xi) require that the Borrower and the Custodian promptly take action to liquidate the Pledged Collateral to pay amounts due and payable in respect of the Borrower Obligations; (xii) remove from the Borrower's, the Adviser's, the Administrator's and their respective agents' place of business all books, records and documents relating to the Pledged Collateral unless copies thereof shall have been provided to the Agent which copies of such books and records shall thereafter be deemed to be originals thereof; and/or (xiii) notify all Selling Institutions, Transaction Agents and Obligors related to the Loan Assets which constitute Pledged Collateral to make payments in respect thereof directly to the Agent's Account; (xiv) at the request of the Agent execute all documents and agreements which are necessary or appropriate to have the Pledged Collateral which constitutes Loan Assets to be assigned to the Agent or its designee; and (xv) endorse the name of the Borrower upon any items of payment relating to the Pledged Collateral or upon any proof of claim in bankruptcy against an account debtor. For purposes of taking the actions described in SUBSECTIONS (i) through (xv) of this SECTION 7.04(a) the Borrower hereby irrevocably appoints the Agent as its artorney-in-fact (which appointment being coupled with an interest is irrevocable while any of the Borrower Obligations remain unpaid), with power

of substitution, in the name of the Agent or in the name of the Borrower or otherwise, for the use and benefit of the Agent, but at the cost and expense of the Borrower and with notice to the Borrower.

(b) All sums paid or advanced by the Agent in connection with the foregoing and all reasonable out-of-pocket costs and expenses (including, without limitation, reasonable outside attorneys' fees and expenses) incurred in connection therewith, together with interest thereon at the Post-Default Rate from the date of payment until repaid in full, shall be paid by the Borrower to the Agent on demand and shall constitute and become a part of the Borrower Obligations secured hereby.

SECTION 7.05. REMEDIES CUMULATIVE.

Each right, power, and remedy of the Agent and the other Secured Parties, or any of them, as provided for in this Agreement or in the other Program Documents or now or hereafter existing at law or in equity or by statute or otherwise shall be cumulative and concurrent and shall be in addition to every other right, power, or remedy provided for in this Agreement or in the other Program Documents or now or hereafter existing at law or in equity or by statute or otherwise, and the exercise or beginning of the exercise by the Agent or any other Secured Party of any one or more of such rights, powers, or remedies shall not preclude the simultaneous or later exercise by such Persons of any or all such other rights, powers, or remedies.

SECTION 7.06. ENFORCEMENT OF REMEDIES UNDER THE CUSTODIAL AGREEMENT AND LOAN DOCUMENTS.

The Borrower agrees that it shall (i) during the continuance of a Default or an Event of Default, upon the request of the Agent (and at the Borrower's own expense) diligently enforce the rights and remedies under the Custodial Agreement and at law or equity against the Custodian for any material breach by the Custodian of any term, covenant or agreement thereunder relating to or affecting any Pledged Collateral, and (ii) diligently enforce its rights and remedies under the Loan Documents relating to the Pledged Collateral. The Borrower shall at all times enforce its rights and remedies under the Custodial Agreement and the Loan Documents with the same degree of care and diligence that it would exercise if this Agreement had not been entered into; PROVIDED that during the continuance of a Default or an Event of Default, the Borrower shall not, in enforcing such rights and remedies, settle any claim against the Custodian without the prior written consent of the Agent (which consent shall not be unreasonably withheld or delayed).

The Borrower agrees that to the extent not expressly prohibited by the terms of the related Loan Documents, after the occurrence and during the continuance of an Event of Default, it shall (i) upon the written request of the Agent promptly forward to the Agent all information and notices which it receives under or in connection with the Loan Documents relating to the Pledged Collateral, and (ii) act and refrain from acting, in respect of any request, act, decision or vote under the Loan Documents relating to the Pledged Collateral only in accordance with the direction of the Agent.

ARTICLE VIII
THE AGENT

SECTION 8.01. AUTHORIZATION AND ACTION.

Each of the Secure Parties hereby irrevocably appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers under this Agreement and the other Program Documents as are delegated to the Agent by the terms hereof and thereof, together with such powers as are reasonably incidental thereto. The Agent shall not have any duties or responsibilities, except those expressly set forth herein or in the other Program Documents, or any fiduciary relationship with any Secured Party, and no implied covenants, functions, responsibilities, duties or obligations or liabilities on the part of the Agent shall be read into this Agreement or any other Program Document or otherwise exist for the Agent. As to any matters not expressly provided for by this Agreement or the other Program Documents, the Agent shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Lenders or the Secondary Lenders; PROVIDED, HOWEVER, that the Agent shall not be required to take any action which exposes the Agent to personal liability or which is contrary to this Agreement, the other Program Documents or Applicable Law. Each Secured Party agrees that in any instance in which the Program Documents provide that the Agent's consent may not be unreasonably withheld, provide for the exercise of the Agent's reasonable discretion, or provide to a similar effect, it shall not in its instructions to the Agent withhold its consent or exercise its discretion in an unreasonable manner.

SECTION 8.02. DELEGATION OF DUTIES. The Agent may execute any of its duties under this Agreement and each other Program Document by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care.

SECTION 8.03. AGENT'S RELIANCE, ETC.

Neither the Agent nor any of its directors, officers, agents or employees shall be liable for any action taken or omitted to be taken by it or them under or in connection with this Agreement or any of the other Program Documents, except for its or their own gross negligence or willful misconduct. Without limiting the generality of the foregoing, the Agent: (i) may consult with legal counsel (including counsel for the Borrower, the Adviser or the Administrator) and independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts; (ii) makes no warranty or representation to any Lender or any Secondary Lender and shall not be responsible to any Lender or any Secondary Lender for any statements, warranties or representations (whether written or oral) made in or in connection with this Agreement or the other Program Documents; (iii) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement or the other Program Documents or any Loan Documents on the part of the Borrower, the Adviser, the Administrator, the Custodian or any other Person or to inspect the property (including the books and records) of the Borrower, the Adviser or the Administrator;

(iv) shall not be responsible to any Lender or any Secondary Lender for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement, the other Program Documents, any Loan Document or any other instrument or document furnished pursuant hereto or thereto; and (v) shall incur no liability under or in respect of this Agreement or any other Program Document by acting upon any notice, consent, certificate or other instrument or writing (which may be delivered by telecopier, telegram, cable or telex) believed by it to be genuine and signed or sent by the proper party or parties.

SECTION 8.04. INDEMNIFICATION

Each of the Secondary Lenders agrees to indemnify and hold the Agent harmless (to the extent not reimbursed by or on behalf of the Borrower) from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against the Agent in any way relating to or arising out of this Agreement or any other Program Document or any action taken or omitted by the Agent under this Agreement or any other Program Document; PROVIDED, that no Secondary Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the Agent's gross negligence or willful misconduct. Without limitation of the foregoing, each of the Secondary Lenders agrees to reimburse the Agent promptly upon demand for any out-of-pocket expenses (including reasonable counsel fees) incurred by the Agent in connection with the administration or enforcement (whether through negotiations, legal proceedings or otherwise) or legal advice in respect of rights or responsibilities under this Agreement or the other Program Documents, to the extent that the Agent is not reimbursed for such expenses by or on behalf of the Borrower. Each Secondary Lender shall be obligated to pay its Proportionate Share of all amounts payable to the Agent under this SECTION 8.04. As used in this SECTION 8.04, the term "Proportionate Share" in respect of any Secondary Lender means the fraction, expressed as a percentage, the numerator of which is the Secondary Lender Commitment of such Secondary Lender and the denominator of which is the Total Commitment.

SECTION 8.05. SUCCESSOR AGENT. The Agent may, upon thirty (30) days' notice to the Borrower, the Conduit Lender and the Secondary Lenders, resign as Agent. If the Agent shall resign, then the Lenders and the Secondary Lenders during such thirty (30) day period shall appoint from among the Secondary Lenders a successor agent. If for any reason a successor agent is not so appointed and does not accept such appointment during such thirty (30) day period, the Agent may appoint a successor agent. Any resignation of the Agent shall be effective upon the appointment of a successor agent pursuant to this
Section 8.05 and the acceptance of such appointment by such successor. After the effectiveness of any retiring Agent's resignation hereunder as Agent, the retiring Agent shall be discharged from its duties and obligations hereunder and under the other Program Documents and the provisions of this Article VIII and
Section 9.04 shall continue in effect for its benefit with respect to any actions taken or omitted to be taken by it while it was Agent under this Agreement and under the other Program Documents.

ARTICLE IX
MISCELLANEOUS

SECTION 9.01. NO WAIVER; MODIFICATIONS IN WRITING.

No failure or delay on the part of any Secured Party in exercising any right, power or remedy hereunder or with respect to the Advances shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy. The remedies provided for herein are cumulative and are not exclusive of any remedies that may be available to any Secured Party at law or in equity. No amendment, modification, supplement, termination or waiver of this Agreement shall be effective unless the same shall be in writing and signed by the Borrower, the Agent and the Conduit Lender. Any waiver of any provision of this Agreement, and any consent to any departure by the Borrower from the terms of any provision of this Agreement, shall be effective only in the specific instance and for the specific purpose for which given. No notice to or demand on the Borrower in any case shall entitle the Borrower to any other or further notice or demand in similar or other circumstances.

SECTION 9.02. NOTICES, ETC.

Except where telephonic instructions are authorized herein to be given, all notices, demands, instructions and other communications required or permitted to be given to or made upon any party hereto shall be in writing and shall be personally delivered or sent by registered, certified or express mail, postage prepaid, or by prepaid telegram (with messenger delivery specified in the case of a telegram), or by facsimile transmission, or by prepaid courier service, and shall be deemed to be given for purposes of this Agreement on the day that such writing is received by the intended recipient thereof. Unless otherwise specified in a notice sent or delivered in accordance with the foregoing provisions of this SECTION 9.02. notices, demands, instructions and other communications in writing shall be given to or made upon the respective parties hereto at their respective addresses (or to their respective facsimile numbers) indicated below, and, in the case of telephonic instructions or notices, by calling the telephone number or numbers indicated for such party below. For all purposes under this Agreement, delivery of any telephonic or facsimile notice to the Borrower to the care of the Adviser shall be deemed to have been delivered to the Borrower.

If to the Conduit Lender:      CRC Funding, LLC
                               c/o Citicorp North America, Inc.
                               450 Mamaroneck Avenue
                               Harrison, New York 10528
                               Attention:   U.S. Securitization
                               Telephone No.:   (914) 899-7122
                               Facsimile No.: (914) 899-7890

 If to the Agent:              Citicorp North America, Inc.
                               U.S. Securitization
                               450 Mamaroneck Avenue
                               Harrison, New York 10528

Attention: U.S. Securitization Telephone No.: (914) 899-7122

                               Facsimile No.: (914) 899-7890

If to Citibank:                Citibank, N.A.
                               388 Greenwich Street
                               New York, New York 10013
                               Attention:   Portfolio Management
                               Telephone No.: (212) 816-0777
                               Facsimile No.: (212) 816-0270

If to the Borrower:            ING Prime Rate Trust
                               7337 East Doubletree Ranch Road
                               Scottsdale, AZ 85258
                               Attention:   Dan Norman, Senior Vice
                                            President
                               Telephone No.: (480) 477-2112
                               Facsimile No.: (480) 477-2076

With a copy to:                ING Investments, LLC
                               7337 East Doubletree Ranch Road
                               Scottsdale, AZ 85258
                               Attention: Dan Norman
                               Telephone No.: (480) 477-2112
                               Facsimile No.: (480) 477-2076

     SECTION 9.03.    TAXES.

(a) Any and all payments by the Borrower under this Agreement or any other Program Document to which it is a party shall be made, in accordance with this Agreement, free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding, in the case of the Secured Parties, (i) all taxes imposed by the United States federal government and (ii) income, profits and franchise taxes imposed on it by any taxing Authority in any jurisdiction which asserts jurisdiction to impose such taxes on the basis of contacts which the Secured Party in question maintains with such jurisdiction other than contacts arising solely out of the execution, delivery or performance of the Program Documents or the transactions contemplated thereby (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as "Taxes"). If the Borrower shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder or under any other Program Document to which it is a party to any Secured Party, (i) the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this SECTION 9.03) such Secured Party receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions and
(iii) the

Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with Applicable Law.

(b) In addition, the Borrower agrees to pay any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies which arise from any payment made by the Borrower hereunder or under any other Program Document to which it is a party or from the execution, delivery or registration of, or otherwise with respect to, this Agreement or under any other Program Document to which it is a party (hereinafter referred to as "Other Taxes").

(c) The Borrower will indemnify each of the Secured Parties for the full amount of Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this SECTION 9.03) paid by any Secured Party in respect of the Borrower and any liability (including penalties, interest and expenses) (other than such as are the result of such Person's action or failure to take action) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted. This indemnification shall be made within thirty (30) days from the date the Secured Party makes written demand therefor to the Borrower.

(d) Within thirty (30) days after the date of receiving a receipt for any payment of Taxes or Other Taxes, the Borrower will furnish to the Agent the original or a certified copy of a receipt evidencing payment thereof.

(e) With respect to an assignment or appointment of a successor agent, the assignee or successor agent (including such that is already a party to this Agreement) shall not be entitled to increased amounts or Other Taxes pursuant to this SECTION 9.03 in excess of the amount to which its transferor or predecessor, as the case may be, was entitled.

(f) To the extent legally entitled to do so, each Secured Party and participant shall provide to the Borrower and Agent (as applicable) such forms or other certifications at such time(s) and in such manner(s) as will permit payments to be made under this Agreement without deduction for, or at a reduced rate of, withholding taxes.

(g) If any Secured Party determines, in its sole discretion, that it has actually received or realized any refund or tax, any reduction of, or credit against, its tax liabilities or otherwise recovered any amount that would not have been received, realized or recovered but for any deduction or withholding, or payment of any additional amount, by the Borrower pursuant to this SECTION 10.03 or SECTION 2.07, then so long as no Default or Event of Default shall have occurred and be continuing, such Secured Party shall reimburse the Borrower an amount that the Secured Party shall, in its sole discretion, determine is equal to the net benefit after tax, and net of all expenses incurred by the Secured Party in connection with its receipt or realization of such refund, reduction, credit or recovery; provided that nothing in this paragraph (g) shall require any Secured Party to make available its tax returns (or any other information relating to its taxes which it deems to be confidential). The Borrower shall return such amount to the

applicable Secured Party in the event that the Secured Party is subsequently required to repay such refund of tax or is not entitled to such reduction of, or credit against, its tax liabilities.

(h) Without prejudice to the survival of any other agreement of the Borrower hereunder, the agreement and obligations of the Borrower contained in this SECTION 9.03 shall survive the termination of this Agreement and the payment in full of principal and Yield hereunder until the expiration of all applicable statutes of limitation.

SECTION 9.04. COSTS AND EXPENSES; INDEMNIFICATION.

(a) The Borrower agrees to promptly pay on written demand all costs and expenses (excluding any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, in each case, now or hereafter imposed, levied, collected, withheld or assessed) of each of the Secured Parties in connection with the preparation, review, negotiation, reproduction, execution, delivery, administration, modification, amendment and enforcement of this Agreement and the other Program Documents to which the Borrower is a party, including, without limitation, the reasonable fees and disbursements of counsel for the Secured Parties with respect thereto and with respect to advising the Secured Parties as to their rights, remedies and responsibilities under this Agreement and the other Program Documents to which the Borrower is a party, UCC filing fees, periodic auditing expenses incurred in connection and regulatory costs associated with clauses (h) and
(i) of SECTION 5.01 and all other fees and expenses.

(b) The Borrower agrees to indemnify and hold harmless each Secured Party and each of their Affiliates and the respective officers, directors, employees, agents, managers of, and any Person controlling any of, the foregoing (each, an "Indemnified Party") from and against any and all claims, damages, losses, liabilities, obligations, expenses, penalties, actions, suits, judgments and disbursements of any kind or nature whatsoever, (including, without limitation, the reasonable fees and disbursements of counsel), but excluding in all cases any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, in each case, now or hereafter imposed levied, collected, withheld or assessed (collectively the "Liabilities") that may be incurred by or asserted or awarded against any Indemnified Party, in each case arising out of or in connection with or by reason of the execution, delivery, enforcement, performance, administration of or otherwise arising out of or incurred in connection with this Agreement, any Loan Document or any other Program Document to which the Borrower is a party or any transaction contemplated hereby or thereby (and regardless of whether or not any such transactions are consummated), including, without limitation any such Liability that is incurred or arises out of or in connection with, or by reason of any one or more of the following: (i) preparation for a defense of, any investigation, litigation or proceeding arising out of, related to or in connection with this Agreement or any other Program Document or any of the transactions contemplated hereby or thereby; (ii) any breach or alleged breach of any covenant by the Borrower, the Adviser, the Administrator or the Custodian contained in

any Program Document; (iii) any representation or warranty made or deemed made by the Borrower or the Custodian contained in any Program Document or in any certificate, statement or report delivered in connection therewith is, or is alleged to be, false or misleading; (iv) any failure by the Borrower, the Adviser, the Administrator or the Custodian to comply with any Applicable Law or contractual obligation binding upon it; (v) any failure to vest, or delay in vesting, in the Secured Parties a first-priority perfected (subject to the Lien of the Custodian securing the Custodian's Overdraft Advances to the extent permitted by Section 5.02(o) and other Permitted Liens) security interest in all of the Pledged Collateral; (vi) any action or omission, not expressly authorized by the Program Documents, by the Borrower, the Adviser, the Administrator or the Custodian, which has the effect of reducing or impairing the Pledged Collateral or the rights of the Agent or the Secured Parties with respect thereto; (vii) any Default or Event of Default; and (viii) any claim that any Secured Party has assumed any obligation or liability of the Borrower under any Loan Document or otherwise; and (ix) any transactions related to the funding, carrying or repayment of the outstanding principal amount of the Advances in connection with the Program Documents; EXCEPT to the extent any such Liability is found in a final, non-appealable judgment by a court of competent jurisdiction to have resulted from such Indemnified Party's gross negligence, bad faith or willful misconduct.

(c) Without prejudice to the survival of any other agreement of the Borrower hereunder, the agreements and obligations of the Borrower contained in this SECTION 9.04 shall survive the termination of this Agreement and the payment in full of principal and Yield on the Advances.

SECTION 9.05. EXECUTION IN COUNTERPARTS.

This Agreement may be executed in any number of counterparts and by different parties hereto on separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same agreement.

SECTION 9.06. ASSIGNABILITY.

(a) This Agreement and the Conduit Lender's rights and obligations herein (including the outstanding Advances) shall be assignable by such Conduit Lender to an Eligible Assignee; PROVIDED, that without the prior written consent of the Borrower (which consent shall not be unreasonably withheld or delayed and which consent shall, in any event, not be required if an Event of Default shall have occurred and be continuing) such Conduit Lender shall not assign its rights and obligations under this Agreement to any Person other than to a U.S. Affiliate of the Agent which is a special purpose entity that issues promissory notes. Each such assignor shall notify the Agent and the Borrower of any such assignment. Each such assignor may, in connection with the assignment or participation, disclose to the assignee or participant any information relating to the Borrower, including the Pledged Collateral, furnished to such assignor by or on behalf of the Borrower or by the Agent; PROVIDED that, prior to any such disclosure, the assignee or participant agrees to preserve the confidentiality of any confidential information relating to the Borrower received by it from any of the foregoing entities. Notwithstanding the

foregoing, without the consent of the Borrower, the Conduit Lender may, pursuant to an Asset Purchase Agreement or otherwise, sell, assign, transfer and convey all or any portion of the Advances maintained by the Conduit Lender, together with all rights hereunder and under the Program Documents in respect thereof, to any bank or financial institution which is also a Secondary Lender.

(b) Each Secondary Lender may, with the consent of the Borrower (which consent shall not be unreasonably withheld or delayed and which consent shall, in any event, not be required if an Event of Default shall have occurred and be continuing), assign to any Eligible Assignee or to any other Secondary Lender all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Secondary Lender Commitment and the outstanding Advances or interests therein owned by it); provided that the Borrower's consent to any such assignment shall not be required if the assignee is an existing Secondary Lender or a U.S. Affiliate of an existing Secondary Lender. The parties to each such assignment shall execute and deliver to the Agent an Assignment and Acceptance. Notwithstanding the foregoing, each Secondary Lender may assign any of its rights (including, without limitation, rights to payment of principal and Yield on the Advances) under this Agreement to any Federal Reserve Bank without notice to or consent of the Borrower.

(c) The Agent may, with the consent of the Borrower (which consent shall not be unreasonably withheld or delayed and which consent shall, in any event, not be required if an Event of Default has occurred and is continuing), assign this Agreement and its rights and obligations hereunder; provided that the Borrower's consent to any such assignment shall not be required if the assignee is a U.S. Affiliate of the Agent.

(d) The Borrower may not assign its rights or obligations hereunder or any interest herein without the prior written consent of the Agent.

(e) The Borrower acknowledges and agrees that each Lender's (other than the Conduit Lender) and each Secondary Lender's source of funds may derive in part from its participants. Accordingly, references in SECTIONS 2.06, 2.07, 2.08, 2.09, 9.03 and 9.04 and the other terms and provisions of this Agreement and the other Program Documents to rates, determinations, reserve and capital adequacy requirements, accounting principles, expenses, increased costs, reduced receipts and the like as they pertain to the Lender and the Secondary Lenders shall be deemed also to include those of each of its participants; PROVIDED that no participant shall be entitled to any amount under any such Sections or provisions, which is greater than the amount the related Lender or Secondary Lender, as the case may be, would have been entitled to under any such Sections or provisions if the applicable participation had not occurred.

(f) The Agent shall maintain at its address specified in SECTION 9.02 or such other address as the Agent shall designate in writing to the Lenders and Secondary Lenders a copy of this Agreement and each signature page hereto and each Assignment and Acceptance delivered to and accepted by it and a register (the "REGISTER") for the recordation of the names and addresses of the Secondary Lenders, their Secondary Lender Commitments, effective dates and Secondary Lender Stated Expiration Date, and

the aggregate outstanding principal amount of the outstanding Advances made by each Secondary Lender under this Agreement. The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and the Borrower, the Agent and the Secondary Lenders may treat each Person whose name is recorded in the Register as a Secondary Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Borrower or any Secondary Lender at any reasonable time and from time to time upon reasonable prior notice.

SECTION 9.07. GOVERNING LAW.

THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF SAID STATE.

SECTION 9.08. SEVERABILITY OF PROVISIONS.

Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.

SECTION 9.09. CONFIDENTIALITY.

(a) By accepting delivery of this Agreement, the Borrower agrees not to disclose to any person or entity the existence of this Agreement, any term sheet related hereto or the Program Documents or the terms hereof or thereof (including, without limitation, any specific pricing information provided by the Agent, any Secondary Lender or any Lender or the amount or terms of any fees payable to the Agent, any Secondary Lender or any Lender in connection with the transactions contemplated by the Program Documents), the proposal or structure of such transactions, any related structures developed by the Agent, any Secondary Lender or any Lender for the Borrower, any related analyses, computer models, information or documents, any written or oral reports from the Agent, any Secondary Lender or any Lender to the Borrower or any related written information or the existence or status of any ongoing negotiations between the Borrower and the Agent, any Secondary Lender or any Lender concerning the transactions contemplated by the Program Documents (collectively, the "Product Information"), except
(i) to its and its affiliates' officers, directors, employees, agents, accountants, legal counsel and other representatives (collectively, the "Borrower Representatives") who have a need to know the Product Information for the purpose of assisting in the negotiation and completion of the transactions contemplated by the Program Documents and who agree to be bound by the provisions of this section applicable to the Borrower, or (ii) to the extent required by applicable law, regulation, subpoena or other legal process. The Borrower will be responsible for any failure of any Borrower Representative to comply with the provisions of this section applicable to the Borrower.

(b) Neither the Agent, any Secondary Lender nor any Lender will disclose to any person or entity the confidential or proprietary information of the Borrower furnished to the Agent, any Secondary Lender or any Lender in connection with the transactions contemplated by the Program Documents (the "Borrower Information"), except (i) to its and its affiliates' officers, directors, employees, agents, accountants, legal counsel and other representatives (collectively, the "Lender Representatives") who have a need to know the Borrower Information for the purpose of assisting in the negotiation and completion of the transactions contemplated by the Program Documents and who agree to be bound by the provisions in this section applicable to the Agent, the Secondary Lenders and the Lenders, (ii) to the extent required by applicable law, regulation, subpoena or other legal process, (iii) to the extent requested by any governmental or regulatory authority having jurisdiction over the Agent, any Secondary Lender or any Lender or any Lender Representative, (iv) to the rating agencies, or (v) to credit enhancers and dealers and investors in respect of promissory notes of any Lender or any Secondary Lender in accordance with the customary practices of such Lender or Secondary Lender for disclosures to credit enhancers, dealers or investors, as the case may be, it being understood that any such disclosure to dealers or investors will not identify the Borrower or any of its affiliates by name. The Agent, each Secondary Lender and each Lender will be responsible for any failure of the Agent, such Secondary Lender, such Lender, or any Lender Representative of the Agent, such Secondary Lender or such Lender, as applicable, to comply with the provisions of this section applicable thereto.

(c) Notwithstanding any other provision of this Agreement, each party (and each participant pursuant to Section 9.06) (and each employee, representative or other agent of such party (or participant)) may disclose to any and all persons, without limitation of any kind, the U.S. tax treatment and U.S. tax structure of the transactions contemplated by the Program Documents and all materials of any kind (including opinions or other tax analyses) that are provided to such party relating to such U.S. tax treatment and U.S. tax structure, other than any information for which nondisclosure is reasonably necessary in order to comply with applicable securities laws.

(d) Product Information and Borrower Information shall not include, however, information that is a matter of general public knowledge or has heretofore been or is hereafter published in any source generally available to the public other than as a result of a disclosure by any person required to keep such information confidential as provided in this section.

(e) The obligations of the Borrower, the Agent, each Secondary Lender and each Lender under this section shall be in effect from the date of this Agreement until three years from the date of this Agreement.

SECTION 9.10. MERGER.

The Program Documents taken as a whole incorporate the entire agreement between the parties thereto concerning the subject matter thereof. The Program Documents supersede any prior agreements among the parties relating to the subject matter thereof.

SECTION 9.11. NO PROCEEDINGS; NO RECOURSE.

(a) Each of the parties to this Agreement and each assignee of any Advance or any interest therein and each entity which enters into a commitment to make Advances to the Borrower hereunder hereby agrees that it will not institute against the Conduit Lender any proceeding of the type referred to in SECTION 6.01(f) so long as any commercial paper or other senior indebtedness issued by the Conduit Lender shall be outstanding or there shall not have elapsed one year plus one day since the last day on which any such commercial paper or other senior indebtedness shall have been outstanding.

(b) The obligations of the Conduit Lender under and in connection with this Agreement and the other Program Documents are solely the obligations of the Conduit Lender. It is expressly agreed that no recourse shall be had for the payment of any amount owing in respect of this Agreement or any other Program Document or for any other obligation or claim arising out of or based upon this Agreement or any other Program Document, against any member, stockholder, employee, officer, manager, director, organizer or incorporator of the Conduit Lender or against any member, stockholder, employee, officer, manager, director, organizer or incorporator of any such member, stockholder or manager.

SECTION 9.12. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.

All representations and warranties made hereunder, in the other Program Documents and in any document, certificate or statement delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery of this Agreement and the making of the Advances hereunder.

SECTION 9.13. LOAN DOCUMENTS.

No obligation or liability of the Borrower is intended to be assumed by the Agent, or any other Secured Party under or as a result of this Agreement or the other Program Documents, and the transactions contemplated hereby and thereby, including, without limitation, under any Loan Document and, to the maximum extent permitted under provisions of law, the Agent and the other Secured Parties expressly disclaim any such assumption. If an Event of Default under SECTION 6.01(f) in respect of the Borrower shall have occurred and is continuing or the Agent shall have delivered a Notice of Exclusive Control to the Custodian, and such notice has not been revoked by the Agent, the Borrower will use its best efforts to obtain and give all necessary consents under all Loan Documents relating to any Pledged Collateral and execute and deliver all agreements and documents which are necessary or appropriate in order to enable the Secured Parties to enforce their rights and remedies hereunder and under the other Program Documents, including, without limitation, to permit the Pledged Collateral which constitutes Loan Assets to be assigned to the Agent or its designees. In addition, the Borrower shall pay all assignment fees which are required to be paid pursuant to the Loan Documents relating to the Pledged Collateral in connection with the foregoing. The Agent and the Secured Parties acknowledge that in order to enforce certain of their remedies in respect of the Pledged Collateral which constitutes Loan Assets after the occurrence and during the continuance of an

Event of Default, certain provisions of the related Loan Documents may need to be complied with, including provisions requiring the consent of the related Transaction Agent and/or Obligor.

The Agent agrees that if it would be prevented from reviewing any Loan Document relating to an Eligible Loan Asset in connection with the exercise of its rights under SECTION 5.01(i) or SECTION 7.04, as a result of any confidentiality agreement entered into by the Borrower in respect thereof, and if it's review of such Loan Documents would be permitted if it agrees to maintain the confidentiality of such Loan Documents in accordance with the terms of such confidentiality agreement (each such confidentiality agreement a "Subject Confidentiality Agreement"), the Agent hereby agrees to abide by the terms of such Subject Confidentiality Agreement in respect of such Loan Documents.

SECTION 9.14. SUBMISSION TO JURISDICTION; WAIVERS.

The Borrower hereby irrevocably and unconditionally:

(a) submits for itself and its property in any legal action or proceeding relating to this Agreement or the other Program Documents to which it is a party, or for recognition and enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of the courts of the State of New York, the courts of the United States of America for the Southern District of New York, and the appellate courts of any of them;

(b) consents that any such action or proceeding may be brought in any of such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same;

(c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to the Borrower at its address set forth in SECTION 9.02 or at such other address as may be permitted thereunder;

(d) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction or court; and

(e) waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this Section any special, exemplary, punitive or consequential damages.

SECTION 9.15. E-MAIL REPORTS.

Subject to the following terms and conditions, the Borrower may, unless otherwise notified to the contrary by the Agent, transmit Investor Reports and Weekly Portfolio Reports to the Agent by electronic mail (each an "E-Mail Report"). Each E-Mail Report shall be formatted as the Agent may reasonably designate from time to time. Each E-Mail Report shall

be sent to the Agent at an electronic mail address designated by the Agent, and the executed "summary sheet" for each E-Mail Report shall be transmitted via facsimile transmission to the Agent at the facsimile numbers specified for the Agent in SECTION 9.02.

SECTION 9.16. WAIVER OF JURY TRIAL.

EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER PROGRAM DOCUMENT OR FOR ANY COUNTERCLAIM THEREIN OR RELATING THERETO.

SECTION 9.17. SEVERAL OBLIGATIONS.

Except for the commitment of the Secondary Lenders to make Advances if the Conduit Lender has declined to make an Advance to the extent expressly required by SECTION 2.02, no Lender or Secondary Lender shall be responsible for the failure of any other Lender or Secondary Lender to make any Advance or to perform any obligation on this Agreement or any other Program Document. The Agent shall not have any liability to the Borrower, any Lender or any Secondary Lender for the Borrower's, any Lender's, any Secondary Lender's, as the case may be, performance of, or failure to perform, any of their respective obligations and duties under this Agreement or any other Program Document.

SECTION 9.18. LIMITATION ON LIABILITY.

No claim may be made by the Borrower or any other Person against the Agent, any Lender or any Secondary Lender or their respective Affiliates, directors, officers, employees, attorneys or agents for any special, indirect, consequential or punitive damages in respect of any claim for breach of contract or any other theory or liability arising out of or related to the transactions contemplated by this Agreement or any other Program Document, or any act, omission or event occurring in connection therewith; and the Borrower hereby waives, releases, and agrees not to sue upon any claim for any such damages, whether or not accrued and whether or not known or suspected to exist in its favor. As provided for in Section 1 of Article IX of the Agreement and Declaration of Trust, made as of December 2, 1987, as amended April 12, 1996, October 23, 1998, October 20, 2000 and February 20, 2002, of the Borrower (under which the Borrower is organized as a voluntary association with transferable shares under the laws of the Commonwealth of Massachusetts), the shareholders, trustees, officers, employees and other agents of the Borrower shall not personally be bound by or liable for the matters set forth herein or in any other Program Document, nor shall resort be had to their private property for the satisfaction of any obligation or claim hereunder or under any other Program Document.

[REMAINDER OF PAGE INTENTIONALLY BLANK]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.

CRC FUNDING, LLC, as Conduit Lender By: Citicorp North America, Inc., its Attorney-In-Fact

By:  /s/ Susan M. Olsen
   ---------------------------------------------------
   Name:  Susan M. Olsen
   Title: Vice President

CITICORP NORTH AMERICA, INC., as Agent

By:  /s/ Susan M. Olsen
   ---------------------------------------------------
   Name:  Susan M. Olsen
   Title: Vice President

CITIBANK, N.A., as Secondary Lender

By:  /s/ Susan M. Olsen
   ---------------------------------------------------
   Name:  Susan M. Olsen
   Title: Vice President
   Percentage: 100%

ING PRIME RATE TRUST,
as Borrower

By:  /s/ Daniel A. Norman
   ---------------------------------------------------
Name:    Daniel A. Norman
Title:   Senior Vice President

SCHEDULE I

FORM OF INVESTOR REPORT

See Attached

            BAM VERSION                     2.0
-------------------------------------    ---------
CUSTOMER NO (#)                                  1 Obtain from Harrison (Madeleine Macintyre).
FACILITY NO (#)                               1691 Obtain from Harrison (Madeleine Macintyre).
REPORT MONTH (#)                                 6 The formula should yield a number between 1 and 12.
REPORT YEAR (#)                               2003 The formula should yield a number like 1997, 1998, etc.
"AS OF" DATE                             6/27/2003 The "as of" date for the Outstanding Capital Balance, etc.
SELLER REPORT/FILE VERSION NO                  2.0 Used to verify what version of the file the customer is using.

/ / Thousand (x $1,000)     /X/ Whole Dollars ($1) or Dollars and Cents ($ 1.00)     / / Millions (x $1,000,000)

All dollar amounts in this BAMI worksheet must be consistent. E.g., If the Thousands option is selected above, all dollar amounts will be multiplied by 1,000 when they are transferred into the portfolio database.

ALL AMOUNTS IN THIS BAM WORKSHEET MUST BE EXPRESSED IN US$

For Non-US$ denominated Seller Reports use the Seller Report's exchange rate in the formulas entered below

                                              ENTER FORMULAS
  ENTER (OR POINT TO) THE AGINGS BUCKET      THAT POINT TO THE
  DESCRIPTIONS USED IN THIS DEAL (E.G.,     DATA IN THE SELLER
    CURRENT, 1-30 DAYS PAST DUE, ETC.)            REPORT.
-----------------------------------------   ------------------
        AGING BUCKET DESCRIPTION               AGING AMOUNTS
-----------------------------------------   ------------------
 1
 2
 3
 4
 5
 6
 7
 8
 9
10

    DESCRIPTION                                        VALUE
    -----------                                        -----
 1  COLLECTIONS - PRINCIPAL ($)                                     Required for all deals.
 2  COLLECTIONS - FINANCE CHARGES ($)                               Applicable only to interest-bearing receivables.
 3  ASSET DILUTIONS ($)
 4  ASSET GROSS WRITE OFFS ($)                                      Required for all deals.
 5  ASSET RECOVERIES ($)                                            Required for all deals.
 6  SALES ($)
 7  AVERAGE MATURITY (DAYS)                                         As used in the calculation of the liquidation yield reserve.
 8  BREAKAGE RESERVE ($)
 9  CAPITAL COVERAGE (%)                                 1530.170%
10  COLLECTION AGENT FEE RESERVE ($)
11  DEFAULT RECEIVABLES ($)
12  DEFAULT RATIO (%)
13  DELINQUENT RECEIVABLES ($)
14  DELINQUENCY RATIO (%)
15  CURRENT LOSS-TO-LIQUIDATION RATIO (%)
16  ROLLING AVERAGE LTL RATIO (%)                                   As defined in the transaction documentation.
                                                                    (3-month/6-month/12-month/etc.)
17  DILUTION RESERVE ($)
18  ELIGIBLE ASSET SHARE (%)                              100.000%
19  LOSS PROTECTION (%)                                  1530.170%  Required for all deals.
20  LOSS RECOURSE ($)                                               { One or the other is required for all deals.
21  LOSS RESERVE ($)                                1,196,561,978   { One or the other is required for all deals.
22  NET ASSET POOL BALANCE ($)                        836,523,312   Required for all deals.
23  OTHER RECOURSE ($)                                              { One or the other may apply, but not both
24  OTHER RESERVES ($)                                              { One or the other may apply, but not both
25  TOTAL CAPITAL OUTSTANDING ($)                      98,000,000   Required for all deals.
26  TOTAL NUMBER OF OBLIGORS (#)
27  YIELD RECOURSE ($)                                              { One or the other may apply, but not both
28  YIELD RESERVE ($)                                               { One or the other may apply, but not both
29  Reserved for Future Use
30  Reserved for Future Use
          OTHER FORMS OF LOSS PROTECTION
31  SUBORDINATED DEBT ($)                                           { One or more may apply
32  LETTERS OF CREDIT ($)                                           { One or more may apply
33  CASH COLLATERAL ($)                                             { One or more may apply
34  SPREAD ACCOUNT ($)                                              { One or more may apply
               RE CREDIT CARD DEALS
35  PORTFOLIO YIELD (%)
36  BASE RATE (%)

37  NET LOSS (%)
38  EXCESS SPREAD (%)
39  PAYMENT RATIO (%)

 ENTER (OR ENTER FORMULAS THAT POINT TO) THE                                              ENTER FORMULAS
    NAMES/DESCRIPTIONS OF THE COMPLIANCE         ENTER (OR POINT TO)   ENTER "MIN" OR   THAT POINT TO THE
 TESTS FOR THIS DEAL. LEAVE BLANKS IF THERE      THE TEST LIMIT FOR    "MAX" FOR EACH   TEST RESULT IN THE
             ARE FEWER THAN TEN.                      EACH TEST.            TEST.         SELLER REPORT.
---------------------------------------------   --------------------   --------------   ------------------
              TEST DESCRIPTION                       TEST LIMIT        TYPE (MIN/MAX)       TEST RESULT
---------------------------------------------   --------------------   --------------   ------------------
 1  Borrowing Base Test (%)                                   100.00%        MIN                   850.590%
 2  Asset Coverage Test (%)                                   300.00%        MIN                  1530.170%
 3
 4
 5
 6
 7
 8
 9
10

         TEN LARGEST NORMAL OBLIGORS                  BALANCE ($)         LIMIT ($)         EXCESS ($)
------------------------------------------------  ------------------   --------------   ------------------
 1  Nextel Finance Company                                47,993,010       48,465,859
 2  Charter Communications Operating Llc                  34,898,151       48,465,859
 3  Safelite Glass Corp.                                  13,831,998       48,465,859
 4  Mandalay Resort Group                                 13,534,829       48,465,859
 5  Fitness Holdings Worldwide, Inc.                      12,426,857       48,465,859
 6  Dean Foods Company                                    12,370,277       48,465,859
 7  Ford Motor Credit Company                             12,036,408       48,465,859
 8  Lamar Media Corporation                               12,027,504       48,465,859
 9  Metro-Goldwyn-Mayer Studios, Inc.                     12,015,143       48,465,859
10  Riverwood International Corporation                   11,985,936       48,465,859
11                 SUM OF REMAINING NORMAL OBLIGORS ($)

Enter FORMULAS that point to this data in the Seller Report worksheet.

              ALL SPECIAL OBLIGORS                    BALANCE ($)         LIMIT ($)         EXCESS ($)
------------------------------------------------  ------------------   --------------   ------------------
 1

 2
 3
 4
 5
 6
 7
 8
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12
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31
32
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39
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43

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75

Annex A to Schedule I

Investor Report Officer's Certificate

The undersigned, _______________, Authorized Signatory of ING Prime Rate Trust (the "Borrower") pursuant to that certain Revolving Credit and Security Agreement, dated as of July 16, 2003 among the Borrower, CRC Funding, LLC, and Citicorp North America, Inc., as agent (the "Agent"), as the same may be amended, modified or supplemented from time to time (the "Credit Agreement"), hereby certifies that:

1. The Investor Report furnished herewith to the Agent pursuant to
SECTION 5.01(e) of the Credit Agreement is true, accurate and complete as of the date hereof.

2. Except as expressly disclosed in writing to the Agent, no event has occurred and is continuing which would constitute a Default or an Event of Default.

3. Except as expressly disclosed in writing to the Agent, as of the date hereof, the Borrower is in full compliance with the Borrowing Base Test and the Asset Coverage Test.

4. Capitalized terms used herein and not otherwise defined shall have the meaning ascribed to such terms in the Credit Agreement.

IN WITNESS WHEREOF, the undersigned has duly signed on behalf of the Borrower as of the date set forth below.

SCHEDULE II

FORM OF WEEKLY PORTFOLIO REPORT

See Attached

            BAM VERSION                     2.0
-------------------------------------    ---------
CUSTOMER NO (#)                                  1 Obtain from Harrison (Madeleine Maclntyre).
FACILITY NO (#)                               1691 Obtain from Harrison (Madeleine Maclntyre).
REPORT MONTH (#)                                 6 The formula should yield a number between 1 and 12.
REPORT YEAR (#)                               2003 The formula should yield a number like 1997, 1998, etc.
"AS OF" DATE                             6/27/2003 The "as of" date for the Outstanding Capital Balance, etc.
SELLER REPORT/FILE VERSION NO                  2.0 Used to verify what version of the file the customer is using.

/ / Thousands (x $1,000)    /X/ Whole Dollars ($1) or Dollars and Cents ($1.00)      / / Millions (x $1,000,000)

All dollar amounts in this BAMI worksheet must be consistent. E.g., If the THOUSANDS option is selected above, all dollar amounts will be multiplied by 1,000 when they are transferred into the portfolio database.

ALL AMOUNTS IN THIS BAM WORKSHEET MUST BE EXPRESSED IN US$

For Non-US$ denominated Seller Reports use the Seller Report's exchange rate in the formulas entered below

                                              ENTER FORMULAS
  ENTER (OR POINT TO) THE AGINGS BUCKET      THAT POINT TO THE
  DESCRIPTIONS USED IN THIS DEAL (E.G.,     DATA IN THE SELLER
    CURRENT, 1-30 DAYS PAST DUE, ETC.)            REPORT.
-----------------------------------------   ------------------
        AGING BUCKET DESCRIPTION               AGING AMOUNTS
-----------------------------------------   ------------------
 1
 2
 3
 4
 5
 6
 7
 8
 9
10

    DESCRIPTION                                        VALUE
    -----------                                        -----
 1  COLLECTIONS - PRINCIPAL ($)                                     Required for all deals.
 2  COLLECTIONS - FINANCE CHARGES ($)                               Applicable only to interest-bearing receivables.
 3  ASSET DILUTIONS ($)
 4  ASSET GROSS WRITE OFFS ($)                                      Required for all deals.
 5  ASSET RECOVERIES ($)                                            Required for all deals.
 6  SALES ($)
 7  AVERAGE MATURITY (DAYS)                                         As used in the calculation of the squidation yield reserve.
 8  BREAKAGE RESERVE ($)
 9  CAPITAL COVERAGE (%)                                 1530.170%
10  COLLECTION AGENT FEE RESERVE ($)
11  DEFAULT RECEIVABLES ($)
12  DEFAULT RATIO (%)
13  DELINQUENT RECEIVABLES ($)
14  DELINQUENCY RATIO (%)
15  CURRENT LOSS-TO-LIQUIDATION RATIO (%)
16  ROLLING AVERAGE LTL RATIO (%)                                   As defined in the transaction documentation.
                                                                    (3-month/6-month/12-month/etc.)
17  DILUTION RESERVE ($)
18  ELIGIBLE ASSET SHARE (%)                              100.000%
19  LOSS PROTECTION (%)                                  1530.170%  Required for all deals.
20  LOSS RECOURSE ($)                                               { One or the other is required for all deals.
21  LOSS RESERVE ($)                                1,196,561,978   { One or the other is required for all deals.
22  NET ASSET POOL BALANCE ($)                        836,523,312   Required for all deals.
23  OTHER RECOURSE ($)                                              { One or the other may apply, but not both
24  OTHER RESERVES ($)                                              { One or the other may apply, but not both
25  TOTAL CAPITAL OUTSTANDING ($)                      98,000,000   Required for all deals.
26  TOTAL NUMBER OF OBLIGORS (#)
27  YIELD RECOURSE ($)                                              { One or the other may apply, but not both
28  YIELD RESERVE ($)                                               { One or the other may apply, but not both
29  Reserved for Future Use
30  Reserved for Future Use
          OTHER FORMS OF LOSS PROTECTION
31  SUBORDINATED DEBT ($)                                           { One or more may apply
32  LETTERS OF CREDIT ($)                                           { One or more may apply
33  CASH COLLATERAL ($)                                             { One or more may apply
34  SPREAD ACCOUNT ($)                                              { One or more may apply
               RE CREDIT CARD DEALS
35  PORTFOLIO YIELD (%)
36  BASE RATE (%)

37  NET LOSS (%)
38  EXCESS SPREAD (%)
39  PAYMENT RATIO (%)

 ENTER (OR ENTER FORMULAS THAT POINT TO) THE                                              ENTER FORMULAS
    NAMES/DESCRIPTIONS OF THE COMPLIANCE         ENTER (OR POINT TO)   ENTER "MIN" OR   THAT POINT TO THE
 TESTS FOR THIS DEAL. LEAVE BLANKS IF THERE      THE TEST LIMIT FOR    "MAX" FOR EACH   TEST RESULT IN THE
             ARE FEWER THAN TEN.                      EACH TEST.            TEST.         SELLER REPORT.
---------------------------------------------   --------------------   --------------   ------------------
              TEST DESCRIPTION                       TEST LIMIT        TYPE (MIN/MAX)       TEST RESULT
---------------------------------------------   --------------------   --------------   ------------------
 1  Borrowing Base Test (%)                                   100.00%        MIN                   850.590%
 2  Asset Coverage Test (%)                                   300.00%        MIN                  1530.170%
 3
 4
 5
 6
 7
 8
 9
10

         TEN LARGEST NORMAL OBLIGORS                  BALANCE ($)         LIMIT ($)         EXCESS ($)
------------------------------------------------  ------------------   --------------   ------------------
 1  Nextel Finance Company                                47,993,010       48,465,859
 2  Charter Communications Operating Llc                  34,898,151       48,465,859
 3  Safelite Glass Corp.                                  13,831,998       48,465,859
 4  Mandalay Resort Group                                 13,534,829       48,465,859
 5  Fitness Holdings Worldwide, Inc.                      12,426,857       48,465,859
 6  Dean Foods Company                                    12,370,277       48,465,859
 7  Ford Motor Credit Company                             12,036,408       48,465,859
 8  Lamar Media Corporation                               12,027,504       48,465,859
 9  Metro-Goldwyn-Mayer Studios, Inc.                     12,015,143       48,465,859
10  Riverwood International Corporation                   11,985,936       48,465,859
11                 SUM OF REMAINING NORMAL OBLIGORS ($)

Enter FORMULAS that point to this data in the Seller Report worksheet.

              ALL SPECIAL OBLIGORS                    BALANCE ($)         LIMIT ($)         EXCESS ($)
------------------------------------------------  ------------------   --------------   ------------------
 1

 2
 3
 4
 5
 6
 7
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10
11
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24
25
26
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28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43

44
45
46
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48
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51
52
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75

Annex A to Schedule II

Weekly Portfolio Report Officer's Certificate

The undersigned, _______________, Authorized Signatory of ING Prime Rate Trust (the "Borrower") pursuant to that certain Revolving Credit and Security Agreement, dated as of July 16, 2003 among the Borrower, CRC Funding, LLC and Citicorp North America, Inc., as agent (the "Agent"), as the same may be amended, modified or supplemented from time to time (the "Credit Agreement"), hereby certifies that:

1. The aggregate outstanding principal balance of Advances as of the date hereof is $___________.

2. The aggregate Asset Value of the Eligible Collateral as of the date hereof is $___________.

3. The Borrowing Base as of the date hereof is $_________.

4. Except as expressly disclosed in writing to the Agent, no event has occurred and is continuing which would constitute a Default or an Event of Default.

5. The Weekly Portfolio Report to which this certificate is attached is true, accurate and complete. (1)

6. Except as expressly disclosed in writing to the Agent, as of the date hereof, the Borrower is in compliance with the Borrowing Base Test and the Asset Coverage Test.

7. Capitalized terms used herein and not otherwise defined shall have the meaning ascribed to such terms in the Credit Agreement.

IN WITNESS WHEREOF, the undersigned has duly signed on behalf of the Borrower as of the date set forth below.

Title:

SCHEDULE III

SCOPE OF AUDIT PROCEDURES

See Attached

ING Prime Rate Trust (the "Fund")

Agreed Upon Procedures to be Performed Annually by the External Accountants

Select three Monthly Investor Reports (the "Investor Reports"), including the Monthly Investor Report corresponding to the Fund's year-end (the "Year-end Investor Report"). Perform the following procedures for each Investor Report, except as otherwise specified (captions refer to Investor Report sections):

I. Calculation of the Borrowing Base

1. Agree the aggregate Asset Value of Borrowing Base Eligible Assets on the Investor Reports to the Fund's supporting documentation. Agree the aggregate Asset Value of Borrowing Base Eligible Assets on the Year-end Investor Report to the total of the portfolio of investments included in the Fund's audited financial statements.

2. Agree the aggregate Adjusted Asset Value of Borrowing Base Eligible Assets.

3. Agree Aggregate Asset Value of Borrowing Base Eligible Assets to the total of Input Section II: System Download of the Investor Report.

4. Agree all Excess Concentrations (Obligor > 5%, Industry > 20%, Foreign OECD Loan Assets > 25%, Foreign OECD Assets - Single Country > 10%, Distressed Assets > 10%, Maturity Greater than 10 years > 10%, Unsecured Loan Assets > 10%, Participation Interests from a single Selling Institution > 10%, Credit Linked Notes > 10%, Class E or Class F Bond Assets > 20% and Fixed Rate Loan Assets > 10%) to the total of sections IV: Excess Obligor Concentrations, V: Excess Industry Concentrations and VI: Other Borrowing Base Excess Concentrations.

5. Recalculate the Borrowing Base.

II. Calculation of Credits Outstanding

1. Recalculate Credits Outstanding (sum of (i) Principal Balance of Advances - Capital Outstanding, (ii) Custodian Overdrafts Outstanding, and (iii) Accrued Interest for 60 Days at Assignee Rate).

III. Compliance Tests

1. Recalculate compliance for the Borrowing Base Test (Borrowing Base divided by Total Credits Outstanding) and Asset Coverage Test - 40 Act Test (Net Assets plus Accrued Interest plus Principal Outstanding divided by Accrued Interest plus Principal Outstanding).

2. Recalculate compliance of the Remedial Paydown Calculation if the Borrowing Base Test and Asset Coverage Test fail.

3. Recalculate the Credits Outstanding after Paydown (Pre-Paydown Credit Outstanding Less Actual Paydown).

IV. Excess Obligor Concentrations

1. Select ten obligors from this section and agree the obligor names and the Adjusted Asset Value to the Fund's supporting documentation.

2. For the selected obligors, recalculate the Obligor Excess Concentrations, if any.

3. For the selected obligors, verify that the obligor totals were properly aggregated by tracing the obligor names to Input Section II: System Download.

V. Excess Industry Concentration

1. Select ten industries from this section and agree the industry name and the Total Adjusted Asset Value per Industry to the Fund's supporting documentation.

2. For the selected industries, recalculate the Industry Excess Concentrations, Obligor/Industry Overlap and Net Industry Concentration, if any.

3. For the selected industries, verify that the industry totals were properly aggregated by tracing the industry names to Input Section II: System Download.

VI. Other Excess Concentrations

1. Agree the Total Adjusted Asset Value for Approved Foreign Assets, Foreign Assets relating to obligors in a single OECD country, Distressed Assets, Unsecured Loan Assets, Fixed Rate Loan Assets, Credit Linked Notes, Class E or Class F Bond Assets and Selling Institution Participations to the Fund's supporting documentation. Additionally, select ten Single OECD Countries and agree the Total Adjusted Asset Value to the Fund's supporting documentation. In addition, agree the maximum unused commitments to fund future advances to the Fund's supporting documentation.

2. Recalculate the Gross Excess Concentrations and Net (with Obligor) Excess Concentrations for Approved Foreign Assets and Distressed Assets. Additionally, recalculate the Excess Concentrations, Obligor/Industry Overlap, Obligor/Distressed Assets Overlap and Net Single Country Concentration for Single OECD Countries.

3. For the other concentrations, verify that the industry totals were properly aggregated by tracing the concentration categories to Input Section II:
System Download.

VII. Input Section II: System Download

1. Select a sample of 25 assets from the file. Agree all information by obligor to the Fund's supporting documentation.

2. For the sample selected in step 1, test whether the assets satisfy the criteria for Borrowing Base Eligible Assets per the Program Documents.

For the sample selected in step 1, agree their market value to the independent market value pricing source used by the Fund.

SCHEDULE IV

INDUSTRY CLASSIFICATIONS

Aerospace and Defense
Automobile
Banking
Beverage, Food and Tobacco
Broadcasting
Buildings and Real Estate
Cargo Transport
Chemicals, Plastics, and Rubber
Containers, Packaging, and Glass
Diversified Natural Resources
Diversified/Cong Manufacturing
Diversified/Conglomerate Service
Ecological
Electronics
Farming and Agriculture
Finance
Grocery
Healthcare, Education, Childcare
Home and Office Furnishings
Hotels, Motels, and Gaming
Insurance
Leisure, Amusement, Entertainment
Machinery
Mining, Steel, and Nonprecious Metals
Oil and Gas
Personal Transportation
Personal, Food and Misc Services
Personal/Nondurable Consumer Prod
Printing, Publishing
Retail Stores
Telecommunications
Textiles and Leather
Utilities

EXHIBIT A

[FORM OF ADVANCE NOTE]

$__________ _________,______

FOR VALUE RECEIVED, on the Maturity Date (as defined in the Credit Agreement defined below) of each Advance made by the [Conduit Lender] [Secondary Lender] the undersigned (the "Borrower") pursuant to the Credit Agreement (defined below), the Borrower hereby promises to pay to the order of [INSERT NAME OF CONDUIT LENDER OR SECONDARY LENDER] (together with its successors and assigns the ["Conduit Lender"] ["Secondary Lender"]) the unpaid principal amount of each such Advance in immediately available funds and in lawful money of the United States of America, and to pay Yield on the unpaid balance of said principal Advance from the Borrowing Date thereof, until the principal amount thereof shall have been paid in full, in like funds and money as provided in said Credit Agreement for Advances made by the [Conduit Lender] [Secondary Lender] and at the maturity thereof. Capitalized terms used in this promissory note unless otherwise defined herein shall have the meaning assigned to such terms in the Credit Agreement.

This promissory note is an Advance Note referred to in the Revolving Credit and Security Agreement dated as of July 16, 2003 (as from time to time amended, modified, or supplemented, the "Credit Agreement") among the Borrower, CRC Funding, LLC, as the Conduit Lender, the financial institutions parties thereto, and Citicorp North America, Inc., as agent. The date and principal amount of each Advance made to the Borrower and of each repayment of principal thereon shall be recorded by the [Conduit Lender] [Secondary Lender] or its designee on Schedule I attached to this Advance Note, and the aggregate unpaid principal amount shown on such schedule shall be rebuttable presumptive evidence of the principal amount owing and unpaid on the Advances made by the |Conduit Lender] [Secondary Lender]. The failure to record or any error in recording any such amount on such schedule shall not, however, limit or otherwise affect the obligations of the Borrower hereunder or under the Credit Agreement to repay the principal amount of the Advances together with all Yield accrued thereon.

THIS PROMISSORY NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE

WITH THE LAWS OF THE STATE OF NEW YORK.

ING PRIME RATE TRUST

Title:

SCHEDULE I

TO EXHIBIT A

This Advance Note evidences Advances made by [INSERT NAME OF CONDUIT LENDER OR SECONDARY LENDER], (the ["Conduit Lender"] ["'Secondary Lender"]) under the Revolving Credit and Security Agreement dated as of July 16, 2003 among ING Prime Rate Trust, as Borrower, CRC Funding, LLC, as the Conduit Lender, and Citicorp North America, Inc., as agent in the principal amounts and on the dates set forth below, subject to the payments and prepayments of principal set forth below:

       PRINCIPAL   PRINCIPAL     PRINCIPAL
       AMOUNT      AMOUNT PAID   BALANCE       NOTATION
DATE   ADVANCED    OR PREPAID    OUTSTANDING    BY
----   ---------   -----------   -----------   --------

EXHIBIT B

[FORM OF NOTICE OF BORROWING]

ING PRIME RATE TRUST
Two Renaissance Square
40 North Central Avenue Suite 1200
Phoenix, AZ 85004-4424

Citicorp North America, Inc.,
as Agent
Citicorp North America, Inc.
450 Mamaroneck Avenue
Harrison, New York 10528

NOTICE OF BORROWING

This Notice of Borrowing is made pursuant to SECTION 2.02 of that certain Revolving Credit and Security Agreement dated as of July 16, 2003 among ING Prime Rate Trust, CRC Funding, LLC, Citibank, N.A., and Citicorp North America, Inc., as Agent (as the same may from time to time be amended, supplemented, waived or modified, the "Credit Agreement"). Unless otherwise defined herein, capitalized terms used herein have the meanings assigned to those terms in the Credit Agreement.

1. The Borrower hereby requests that on ______________, _____ (the "Borrowing Date") it receive Advances under the Credit Agreement in an aggregate principal amount of ____________ Dollars ($ ______).

2. The Borrower hereby gives notice of its request for such Advances to the Agent pursuant to SECTION 2.02 of the Credit Agreement, and requests the Conduit Lender or the Secondary Lenders, as applicable, remit, or cause to be remitted, the proceeds thereof to [the Borrower's Account (as defined in the Credit Agreement)] [SPECIFY OTHER ACCOUNT, IF APPLICABLE].

3. The Borrower certifies that (i) the representations and warranties of the Borrower contained or reaffirmed in SECTION 4.01 of the Credit Agreement and to the best of the Borrower's knowledge, the representations and warranties of the Custodian, the Adviser and the Administrator contained in the Program Documents to which each such person is a party, are true and correct on and as of the date hereof to the same extent as though made on and as of the date hereof (except to the extent such representations and warranties expressly relate to any earlier date, which representations and warranties shall be true and correct as of such earlier date) and shall continue to be true immediately after giving effect to such Advance; (ii) no Default or Event of Default has occurred and is continuing under the Credit Agreement or will result from the proposed borrowing; (iii) the conditions precedent to the making of the proposed Advance set forth in
SECTION 3.02 of the Credit Agreement have been

fully satisfied; (iv) immediately after giving effect to such Advance, the Borrowing Base Test and the Asset Coverage Test will be complied with and not more than 20% of its Assets is represented by Margin Stock; and (v) immediately after the making of any such Advance, the aggregate outstanding principal amount of all Advances shall not exceed the Total Commitment for the Borrower.

IN WITNESS WHEREOF, the undersigned has caused this Notice of Borrowing to be duly executed on its behalf on this ________ day of ________, ____.

ING PRIME RATE TRUST

Title:

EXHIBIT C

[FORM OF ASSIGNMENT AND ACCEPTANCE]

ASSIGNMENT AND ACCEPTANCE

Reference is made to the Revolving Credit and Security Agreement dated as of July 16, 2003 (as amended, supplemented or otherwise modified from time to time, the "Credit Agreement") among CRC FUNDING, LLC, (together with its successors and assigns, the "Conduit Lender"), CITIBANK, N.A., as a secondary lender (together with the other banks and financial institutions from time to time parties to the Credit Agreement, the "Secondary Lenders"), CITICORP NORTH AMERICA, INC., as agent (in such capacity, together with its successors and assigns, the "Agent") and ING PRIME RATE TRUST (together with its permitted successors and assigns, the "Borrower"). Terms defined in the Credit Agreement are used herein with the same meaning.

The "Assignor" and the "Assignee" referred to on Schedule 1 hereto agree as follows:

1. As of the Effective Date (as defined below), the Assignor hereby absolutely and unconditionally sells and assigns, without recourse, to the Assignee, and the Assignee hereby purchases and assumes, without recourse to or representation of any kind (except as set forth below) from Assignor, an interest in and to the Assignor's rights and obligations under the Credit Agreement and under the other Program Documents equal to the percentage interest specified on Schedule I hereto, including the Assignor's Secondary Lender Commitment and Percentage and the Assignor's portion of the outstanding principal amount of the Advances (such rights and obligations assigned hereby being the "Assigned Interests"). After giving effect to such sale, assignment and assumption, the Assignee's "Secondary Lender Commitment" and the Assignee's "Percentage" will be as set forth on Schedule I hereto.

2. The Assignor (i) represents and warrants that immediately prior to the Effective Date it is the legal and beneficial owner of the Assigned Interest free and clear of any Lien created by the Assignor; (ii) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Program Documents or the execution, legality, validity, enforceability, genuineness, sufficiency or value of, or the perfection or priority of any lien or security or ownership interest created or purported to be created under or in connection with, the Program Documents or any other instrument or document furnished pursuant thereto or the condition or value of the Assigned Interest, Pledged Collateral, or any interest therein; and (iii) makes no representation or warranty and assumes no responsibility with respect to the condition (financial or otherwise) of any of the Borrower, the Agent, the Custodian, the Adviser, the Administrator or any other Person, or the performance or observance by any Person of any of its obligations under any Program Document or any instrument or document furnished pursuant thereto.

3. The Assignee (i) confirms that it has received a copy of the Credit Agreement and the other Program Documents, together with copies of any financial statements delivered pursuant to SECTION 5.01 of the Credit Agreement and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance; (ii) agrees that it will, independently and without reliance upon the Agent, the Assignor, the Conduit Lender or any other Secondary Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under or in connection with any of the Program Documents; (iii) confirms that it is an Eligible Assignee; (iv) appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers and discretion under the Program Documents as are delegated to the Agent by the terms thereof, together with such powers and discretion as are reasonably incidental thereto; (v) agrees that it will perform in accordance with their terms all of the obligations that by the terms of the Program Documents are required to be performed by it as a Secondary Lender; (vi) confirms that the assignment hereunder complies with any applicable legal requirements including the Securities Act of 1933, as amended; (vii) confirms that such Assignee is a United States Person (as defined in Section 7701 (a)(30) of the Internal Revenue Code) or that such Assignee shall have provided the Agent with two Internal Revenue Service forms W-8ECI (or a successor form) certifying that the income from the Assigned Interest is effectively connected with the conduct of such Person's trade or business in the United States; and (viii) confirms that such Assignee is not a partnership, grantor trust or S corporation (as such terms are defined in the Internal Revenue Code).

4. Following the execution of this Assignment and Acceptance, it will be delivered to the Agent for acceptance and recording by the Agent. The effective date for this Assignment and Acceptance (the "Effective Date") shall be the date of acceptance hereof by the Agent, unless a later effective date is specified on Schedule I hereto.

5. Upon such acceptance and recording by the Agent, as of the Effective Date,
(i) the Assignee shall be a party to and bound by the provisions of the Credit Agreement and, to the extent provided in this Assignment and Acceptance, have the rights and obligations of a Secondary Lender thereunder and under any other Program Document and (ii) the Assignor shall, to the extent provided in this Assignment and Acceptance, relinquish its rights and be released from its obligations under the Credit Agreement and under any other Program Document.

6. Upon such acceptance and recording by the Agent, from and after the Effective Date, the Agent shall make all payments to be made by it under the Credit Agreement in respect of the Assigned Interest to the Assignee. The Assignor and Assignee shall make all appropriate adjustments in payments under the Credit Agreement and the Assigned Interests for periods prior to the Effective Date directly between themselves.

7. This Assignment and Acceptance shall be governed by, and construed in accordance with, the laws of the State of New York.

8. This Assignment and Acceptance may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same

agreement. Delivery of an executed counterpart of Schedule I to this Assignment and Acceptance by telecopier shall be effective as a delivery of a manually executed counterpart of this Assignment and Acceptance.

IN WITNESS WHEREOF, the Assignor and the Assignee have caused Schedule I to this Assignment and Acceptance to be executed by their officers thereunto duly authorized as of the date specified thereon.

Schedule I to Assignment and ACCEPTANCE

Percentage interest
transferred by Assignor: ___%

Assignee's "Secondary Lender Commitment": $___

Assignee's "Percentage"    ___%
Assignor:


                                        [INSERT NAME OF ASSIGNOR], as
                                        Assignor,


                                        By:
                                           ---------------------------
                                        Authorized Signatory


Assignee:


                                        [INSERT NAME OF ASSIGNEE], as Assignee


                                        By:
                                           ---------------------------
                                        Authorized Signatory

Accepted, Consented to and
Acknowledged this ____ day of
_________________, ____

CITICORP NORTH AMERICA, INC., as Agent

[ING PRIME RATE TRUST

                                                          Exhibit 99.(k)(iii)(1)

                         SIDLEY AUSTIN BROWN & WOOD LLP

      BEIJING                    BANK ONE PLAZA                LOS ANGELES
     BRUSSELS                10 S. DEARBORN STREET               NEW YORK
      CHICAGO               CHICAGO, ILLINOIS 60603           SAN FRANCISCO
      DALLAS                 TELEPHONE 312 853 7000              SHANGHAI
      GENEVA                 FACSIMILE 312 853 7036             SINGAPORE
     HONG KONG                   www.sidley.com                   TOKYO
      LONDON                      FOUNDED 1866               WASHINGTON, D.C.

WRITER'S DIRECT NUMBER                                   WRITER'S E-MAIL ADDRESS
    (312) 853-4151                                         crissler@sidley.com

February 3, 2004

BY FEDERAL EXPRESS

To the Parties Identified on the attached Schedule

Re: AMENDMENT NO. 1 TO THE REVOLVING CREDIT AND SECURITY AGREEMENT

Dear Ladies and Gentlemen:

Enclosed please find one set of the documents executed and/or obtained in connection with that certain Amendment No. 1 to the Revolving Credit and Security Agreement, dated as of February 2, 2004, by and among ING Prime Rate Trust (the "Borrower"), CRC Funding, LLC, as conduit lender (the "Conduit Lender"), Citibank, N.A., as secondary lender (the "Secondary Lender") and Citicorp North America, Inc., as agent (the "Agent") under that certain Revolving Credit and Security Agreement (the "Credit Agreement"), dated as of July 16, 2003 by and among the Borrower, the Conduit Lender, the Secondary Lender and the Agent.

If you have further need of assistance, please feel free to call me at
(312) 853-4151.

Sincerely,

                                                       /s/ Christina B. Rissler
                                                       Christina B. Rissler

Enclosures

SIDLEY AUSTIN BROWN & WOOD LLP IS AN ILLINOIS LIMITED LIABILITY PARTNERSHIP PRACTICING IN AFFILIATION WITH OTHER SIDLEY AUSTIN BROWN & WOOD PARTNERSHIPS

Execution Copy

AMENDMENT NO. 1

to

REVOLVING CREDIT AND SECURITY AGREEMENT

THIS AMENDMENT NO. 1 TO REVOLVING CREDIT AND SECURITY AGREEMENT (the
"AMENDMENT") is made as of February 2, 2004 by and among ING PRIME RATE TRUST (the "BORROWER"), CRC FUNDING, LLC, as Conduit Lender (the "LENDER"), CITIBANK, N.A., as Secondary Lender (the "SECONDARY LENDER"), and CITICORP NORTH AMERICA, INC., in its capacity as contractual representative (the "AGENT") under that certain Revolving Credit and Security Agreement dated as of July 16, 2003 by and among the Borrower, the Lender, the Secondary Lender and the Agent (as amended, restated, supplemented or otherwise modified, the "CREDIT AGREEMENT"). Defined terms used herein and not otherwise defined herein shall have the meaning given to them in the Credit Agreement.

WITNESSETH

WHEREAS, the Borrower, the Lender, the Secondary Lender and the Agent are parties to the Credit Agreement; and

WHEREAS, the Borrower, the Lender, the Secondary Lender and the Agent have agreed to amend the Credit Agreement on the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the premises set forth above, the terms and conditions contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto have agreed to the following amendment to the Credit Agreement:

1. AMENDMENT TO THE CREDIT AGREEMENT. Effective as of February 2, 2004, 2003 (the "Effective Date") and subject to the satisfaction of the conditions precedent set forth in SECTION 2 below, the Credit Agreement is hereby amended as follows:

1.1. The definition of "TOTAL COMMITMENT" now appearing in SECTION 1.01 of the Credit Agreement is amended to delete the amount "$325,000,000" and to substitute therefor the amount "$435,000,000".

2. CONDITIONS OF EFFECTIVENESS. The effectiveness of this Amendment is subject to the conditions precedent that the Agent shall have received duly executed originals of (i) an opinion of Dechert LLP, counsel of the Borrower,
(ii) a letter substantially in the form of SCHEDULE I attached hereto from the Advisor and the Administrator reaffirming their respective Letter Agreement and acknowledged and agreed to by the Agent and (iii) this Amendment from each of the Borrower, the Lender, the Secondary Lender and the Agent.

3. REPRESENTATIONS AND WARRANTIES OF THE BORROWER.

3.1. The Borrower hereby represents and warrants that this Amendment and the Credit Agreement as previously executed and as amended hereby, constitute legal, valid

and binding obligations of the Borrower and are enforceable against the Borrower in accordance with their terms (except as enforceability may be limited by bankruptcy, insolvency, or similar laws affecting the enforcement of creditors' rights generally).

3.2. Upon the effectiveness of this Amendment and after giving effect hereto, the Borrower hereby (i) reaffirms all covenants, representations and warranties made in the Credit Agreement as amended hereby, and agrees that all such covenants, representations and warranties are true and correct in all material respects as of the effective date of this Amendment, except for changes in the Schedules to the Credit Agreement reflecting events, conditions or transactions permitted by or not in violation of the Credit Agreement (unless such representation and warranty is made as of a specific date, in which case such representation and warranty shall be true and correct in all material respects as of such date) and (ii) certifies that no Default or Event of Default has occurred and is continuing.

4. REFERENCE TO THE EFFECT ON THE CREDIT AGREEMENT.

4.1. Upon the effectiveness of SECTION 1 hereof, on and after the date hereof, each reference in the Credit Agreement (including any reference therein to "this Credit Agreement," "hereunder," "hereof," "herein" or words of like import referring thereto) or in any other Program Document shall mean and be a reference to the Credit Agreement as amended hereby.

4.2. Except as specifically amended above, the Credit Agreement and all other documents, instruments and agreements executed and/or delivered in connection therewith, shall remain in full force and effect, and are hereby ratified and confirmed.

4.3. The execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of the Agent, the Lender or the Secondary Lender, nor constitute a waiver of any provision of the Credit Agreement or any other documents, instruments and agreements executed and/or delivered in connection therewith.

5. GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF SAID STATE.

6. HEADINGS. Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose.

7. COUNTERPARTS. This Amendment may be executed in any number of counterparts and by different parties hereto on separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same agreement.

IN WITNESS WHEREOF, this Amendment has been duly executed as of the day and year first above written.

ING PRIME RATE TRUST, as Borrower

By: /s/ Daniel A. Norman
   -----------------------
   Name:   Daniel A. Norman
   Title:  Senior Vice President

CRC FUNDING, LLC, as the Lender

Title:

CITIBANK, N.A., as Secondary Lender

Title:

CITICORP NORTH AMERICA, INC., as
Agent

Title:

SIGNATURE PAGE TO AMENDMENT NO. 1 TO REVOLVING CREDIT AND SECURITY AGREEMENT

IN WITNESS WHEREOF, this Amendment has been duly executed as of the day and year first above written.

ING PRIME RATE TRUST, as Borrower

Title:

CRC FUNDING, LLC, as the Lender

By: /s/ Susan M. Olsen
   -----------------------
   Name:            SUSAN M. OLSEN
   Title:           Vice President
                    Securitization
           388 Greenwich Street, 19th Floor
                     212-816-0777

CITIBANK, N.A., as Secondary Lender

By: /s/ Susan M. Olsen
   -----------------------
   Name:            SUSAN M. OLSEN
   Title:           Vice President
                    Securitization
           388 Greenwich Street, 19th Floor
                     212-816-0777

CITICORP NORTH AMERICA, INC., as
Agent

By: /s/ Susan M. Olsen
   -----------------------
   Name:            SUSAN M. OLSEN
   Title:           Vice President
                    Securitization
           388 Greenwich Street, 19th Floor
                     212-816-0777

SIGNATURE PAGE TO AMENDMENT NO. 1 TO REVOLVING CREDIT AND SECURITY AGREEMENT

SCHEDULE I

FORM OF REAFFIRMATION LETTER

Reference is hereby made to that certain Amendment No. 1 to Revolving Credit and Security Agreement (the "AMENDMENT") made as of February 2, 2004 by and among ING Prime Rate Trust (the "BORROWER"), CRC Funding, LLC, as Conduit Lender (the "LENDER"), Citibank, N.A., as Secondary Lender (the "SECONDARY LENDER"), and Citicorp North America, Inc., in its capacity as contractual representative (the "AGENT") under that certain Revolving Credit and Security Agreement, dated as of July 16, 2003, by and among the Borrower, the Lender, the Secondary Lender and the Agent (as amended, restated, supplemented or otherwise modified, the "CREDIT AGREEMENT"). Defined terms used herein and not otherwise defined herein shall have the meaning given to them in the Credit Agreement.

Each of the Advisor and the Agent hereby agrees to amend the last paragraph of the Letter Agreement to which both are parties by adding the following language thereto:

"Any such subcontract, delegation or assignment shall not affect the Advisor's liability for performance of its duties and obligations pursuant to the terms hereof. Without limiting the generality of the foregoing, any action taken or omitted to be taken by any Person that has entered into a subcontract with the Advisor or to whom the Advisor has delegated or assigned any of its duties shall be deemed to be an action or omission by the Advisor."

Each of the Advisor and the Administrator hereby acknowledges that all references to the Credit Agreement in the Letter Agreement to which it is a party shall mean and be references to such Credit Agreement as amended by the Amendment. Each of the Advisor and the Administrator hereby reaffirms all of its obligations under the Letter Agreement to which it is a party, which Letter Agreement remains in full force and effect before and after giving effect to the amendment described in the Amendment and the amendment described herein as so amended hereby, if applicable, and such Letter Agreement is hereby ratified and confirmed.

ING INVESTMENTS, LLC, as Advisor

Title:

ING FUNDS SERVICES, LLC, as the
Administrator

Title:

SIGNATURE PAGE TO REAFFIRMATION OF LETTER AGREEMENTS

Acknowledged and agreed to
this ___ day of February, 2004 by,

CITICORP NORTH AMERICA, INC., as Agent

SIGNATURE PAGE TO REAFFIRMATION OF LETTER AGREEMENTS

[ING FUNDS LOGO]

Reference is hereby made to that certain Amendment No. 1 to Revolving Credit and Security Agreement (the "AMENDMENT") made as of February 2, 2004 by and among ING Prime Rate Trust (the "BORROWER"), CRC Funding, LLC, as Conduit Lender (the "LENDER"). Citibank, N.A., as Secondary Lender (the "SECONDARY LENDER"), and Citicorp North America, Inc., in its capacity as contractual representative (the "AGENT") under that certain Revolving Credit and Security Agreement, dated as of July 16, 2003, by and among the Borrower, the Lender, the Secondary Lender and the Agent (as amended, restated, supplemented or otherwise modified, the "CREDIT AGREEMENT"). Defined terms used herein and not otherwise defined herein shall have the meaning given to them in the Credit Agreement.

Each of the Advisor and the Agent hereby agrees to amend the last paragraph of the Letter Agreement to which both are parties by adding the following language thereto:

"Any such subcontract, delegation or assignment shall not affect the Advisor's liability for performance of its duties and obligations pursuant to the terms hereof. Without limiting the generality of the foregoing, any action taken or omitted to be taken by any Person that has entered into a subcontract with the Advisor or to whom the Advisor has delegated or assigned any of its duties shall be deemed to be an action or omission by the Advisor."

Each of the Advisor and the Administrator hereby acknowledges that all references to the Credit Agreement in the Letter Agreement to which it is a party shall mean and be references to such Credit Agreement as amended by the Amendment. Each of the Advisor and the Administrator hereby reaffirms all of its obligations under the Letter Agreement to which it is a party, which Letter Agreement remains in full force and effect before and after giving effect to the amendment described in the Amendment and the amendment described herein as so amended hereby, if applicable, and such Letter Agreement is hereby ratified and confirmed.

ING INVESTMENTS, LLC, as the Advisor    ING FUNDS SERVICES, LLC, as the
                                        Administrator


By: /s/ Daniel A. Norman                By: /s/ Rob Naka
    --------------------------------        ----------------------------
Name:  Daniel A. Norman                 Name:  Rob Naka
Title: Senior Vice President            Title: Senior Vice President


       7337 East Doubletree Ranch Road      Tel: 480.477.3000
       Scottsdale, AZ 85258-2034            Fax: 480.477.2700
       www.ingfunds.com

Acknowledged and agreed to
this 2nd day of February, 2004 by,


CITICORP NORTH AMERICA, INC., as Agent


By:  /s/ Susan M. Olsen
    ----------------------------
      Name:           SUSAN M. OLSEN
      Title:          Vice President
                      Securitization
             388 Greenwich Street, 19th Floor
                       212-816-0777

SIGNATURE PAGE TO REAFFIRMATION OF LETTER AGREEMENTS

[ING FUNDS LOGO]

SECRETARY'S CERTIFICATE

The undersigned hereby certifies that he is the duly elected and acting Vice President and Assistant Secretary of ING Investments, LLC, an Arizona limited liability company, and does further certify that:

1. ING Investments, LLC is the investment adviser for ING Prime Rate Trust, a Massachusetts business trust (the "Trust").

2. In connection with the execution of, and entering into, by the Trust of that certain Amendment No. 1 to the Revolving Credit and Security Agreement by and among the Trust, CRC Funding, LLC, Citibank, N.A., and Citicorp North America, Inc., ING Investments, LLC has executed that certain Reaffirmation Letter in the form set forth as Schedule I to said Amendment No. 1.

3. The execution of the Reaffirmation Letter by ING Investments, LLC has been duly authorized by all requisite limited liability company action of ING Investments, LLC, the officer who executed such Reaffirmation Letter is a duly elected and authorized officer of ING Investments, LLC, and, once executed by such officer, the provisions of the Reaffirmation Letter shall be binding and enforceable against ING Investments, LLC in accordance with its terms.

4. ING Investments, LLC has the requisite power and authority to execute, deliver and perform its obligations under the Reaffirmation Letter. Such execution, delivery and performance:

(i) have been duly authorized by all necessary and proper limited liability company action on the part of ING Investments, LLC;

(ii) do not violate any provision of the Certificate of Formation or the Operating Agreement of ING Investments, LLC;

(iii) will not violate any law or regulation of the State of Arizona or of the United States of America applicable to ING Investments, LLC;

(iv) will not violate any order of any court applicable to ING Investments, LLC; and

(v) will not violate, or require the termination of, or require the approval or consent of any Person under the terms of any indenture, mortgage, deed of

7337 East Doubletree Ranch Road Tel: 480.477.3000 ING Investments, LLC Scottsdale, AZ 85258-2034 Fax: 480.477.2700 www.ingfunds.com

trust, loan agreement or any other material agreement to which ING Investments, LLC is a party or by which ING Investments, LLC or any of its properties may be bound.

IN WITNESS WHEREOF, the undersigned has executed this Secretary's Certificate this 2nd day of February, 2004.

/s/ William H. Rivoir III
-----------------------------------------
William H. Rivoir III
Vice President and Assistant Secretary

CERTIFICATE OF INCUMBENCY OF OFFICERS OF
ING FUNDS SERVICES, LLC

The undersigned, William H. Rivoir III, hereby certifies that (i) he is the duly elected, qualified and acting Senior Vice President and Secretary for ING Funds Services, LLC, and (ii) the person named below has been duly elected, has duly qualified, and this day is an officer of ING Funds Services, LLC, holding the office set opposite his name, the signature set opposite his name is his genuine signature, and he has the authority to execute documents on behalf of ING Funds Services, LLC.

NAME                     TITLE                  SIGNATURE
----                     -----                  ---------
Rob Naka         Senior Vice President         /s/ Rob Naka
                                               ------------

IN WITNESS WHEREOF, the undersigned has executed this Certificate on the 30th day of January, 2004.

/s/ William H. Rivoir III
----------------------------------------
William H. Rivoir III
Senior Vice President and Secretary

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February 2, 2004

CRC Funding, LLC
as Conduit Lender
Citibank, N.A.,
as Secondary Lender
Citicorp North America, INC.,
as Agent, and the
Persons who are from time to time
Lenders under the Revolving Credit and Security Agreement
c/o Citicorp North America, INC.
450 Mamaraneck Avenue
Harrison, New York 10528

Re: ING Prime Rate Trust

Ladies and Gentlemen:

We have acted as special counsel to ING Prime Rate Trust, a Massachusetts business trust, in connection with that certain Amendment No. 1 made as of February 2, 2004 to that certain Revolving Credit and Security Agreement dated as of July 16, 2003 by and among ING Prime Rate Trust, CRC Funding, LLC, as Conduit Lender, Citibank, N.A., as Secondary Lender, and Citicorp North America, Inc., in its capacity as contractual representative (the "Amendment"). Capitalized terms used herein, but not otherwise defined herein, shall have the meanings ascribed to such terms in the Credit Agreement, as amended. This opinion is delivered to you at our clients' request pursuant to
Section 2(i) of the Amendment.

In rendering the opinions set forth herein, we have examined:

1. the Borrower's Agreement and Declaration of Trust, Bylaws and certificates of good standing received from The Commonwealth of Massachusetts and the State of Arizona;

2. the Borrower's Prospectus and Statement of Additional Information;

3. resolutions of the Executive Committee of the Board of Trustees of the Borrower with respect to the transactions referred to herein; and

4. such other agreements, instruments and documents as we have deemed necessary or appropriate to enable us to render the opinions expressed below.

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Additionally, we have examined originals or copies, certified to our satisfaction, of such certificates of public officials and officers and representatives of the Borrower and we have made such inquiries of officers and representatives of the Borrower as we have deemed relevant or necessary, as the basis for the opinions set forth herein. A copy of the certificate received from the Borrower and relied upon for purposes of the determination of matters of fact for this opinion are attached hereto as EXHIBIT A.

In rendering the opinions expressed below, we have, with your consent, assumed that the signatures of Persons signing all documents in connection with which this opinion is rendered are genuine (other than Persons signing on behalf of the Borrower), all documents submitted to us as originals or duplicate originals are authentic and all documents submitted to us as copies, whether certified or not, conform to authentic original documents. Additionally, we have, with your consent, assumed and relied upon, the following:

a. the accuracy and completeness of all certificates and other statements, documents and records reviewed by us, and the accuracy and completeness of all representations, warranties, schedules and exhibits contained in the Credit Agreement and Amendment, with respect to the factual matters set forth therein;

b. all parties to the documents reviewed by us (other than the Borrower, with respect to whom we render our opinions herein) are duly organized, validly existing and in good standing under the laws of all jurisdictions where they are conducting their businesses or otherwise required to be so qualified, and have full power and authority to execute, deliver and perform their duties under such documents and all such documents have been duly authorized, executed and delivered by such parties and are enforceable against such parties in accordance with their respective terms;

Whenever our opinion with respect to the existence or absence of facts is indicated to be based on our knowledge or awareness, we are referring to the actual present knowledge of the particular Dechert LLP attorneys who have represented the Borrower in connection with the Amendment. Except as expressly set forth herein, we have not undertaken any independent investigation, examination or inquiry to determine the existence or absence of any facts (and have not caused the review of any court file or indices) and no inference as to our knowledge concerning any facts should be drawn as a result of the limited representation undertaken by us.

Based upon the foregoing and subject to the qualifications stated herein, we are of the opinion that:

1. Based on a certificate received from the Secretary of The Commonwealth of Massachusetts, the Borrower is a business trust duly authorized to exercise in The Commonwealth of Massachusetts all of the powers recited in Borrower's Declaration of Trust and to transact business in Massachusetts under the laws of The Commonwealth of Massachusetts. Based on a certificate received from the Secretary of the State of Arizona, the Borrower has the authority to transact business in the State of Arizona. Copies of the certificates referred to in this paragraph are attached here to as EXHIBIT B.

2. The Borrower has the requisite trust power and authority to own and encumber its properties and assets and to conduct its business as currently conducted.

3. The Borrower has all requisite trust power and authority to execute and deliver the Amendment and to perform its obligations under Credit Agreement, as amended by the Amendment. The Amendment has been duly authorized by the Borrower and has been duly executed and delivered by a duly authorized officer of the Borrower. The Amendment and the Credit Agreement as previously executed and as amended by the Amendment, constitute legal, valid and binding obligations of the Borrower, enforceable against the Borrower in accordance with their respective terms.

The opinions as expressed herein are subject to the following qualifications:

A. The effect of applicable bankruptcy, reorganization, insolvency, moratorium, receivership, fraudulent conveyance and similar laws relating to or affecting the rights and remedies of creditors or secured parties.