Exhibit (h) 8.1
GUARANTEE
GUARANTEE, dated as of January 17, 2003 (the "Agreement"), from XXXXX
XXXXXXX INVESTMENT COMPANY, a Massachusetts business trust (the "Trust"), on
behalf of its series XXXXXXX MULTI-MANAGER PRINCIPAL PROTECTED FUND (the "Fund")
to and for the benefit of shareholders of the Fund (the "Shareholders").
ARTICLE I
DEFINITIONS
The terms defined in this Article I shall have the meanings provided herein
for all purposes of this Agreement, in both singular and plural form, as
appropriate.
"Aggregate Shortfall Amount" means an amount equal to the sum of the Class
Shortfall for Class A Shares, the Class Shortfall for Class B Shares, and the
Class Shortfall for Class C Shares.
"Business Day" means any day other than a day on which banks located in the
City of New York, New York are required or authorized by law to close or on
which the New York Stock Exchange is closed for business.
"Class of Shares" means each class of shares of beneficial interest of the
Fund designated pursuant to the Declaration of Trust.
"Class Shortfall Amount" means, for each Class of Shares for which the NAV
is less than the Guarantee per Share on the Guarantee Maturity Date, an amount
equal to the product of (i) the difference between the Guarantee per Share and
the NAV and (ii) the total number of outstanding shares of beneficial interest
of that Class of Shares, calculated as of the Guarantee Maturity Date.
"Covered Expenses" means, for any Class of Shares, the annual ordinary fund
operating expenses reflected in the Prospectus and SAI relating to such Class of
Shares that are covered and limited by the Expense Limitation Agreement.
"Covered Expenses" shall not include extraordinary expenses such as litigation
and other expenses not incurred in the ordinary course of the Fund's business.
"Custodian" means State Street Bank and Trust Company, as Custodian,
pursuant to the Custodian Agreement, or any successor to State Street Bank and
Trust Company in such capacity.
"Custodian Agreement" means the Custodian Contract, dated as of October 31,
1988, between the Trust and the Custodian, as amended and any successor
agreement.
"Declaration of Trust" means the Trust's Amended and Restated Declaration
of Trust, dated as of August 19, 2002, as amended by Amendment #1 thereto, dated
October 8, 2002 and, as in effect from time to time.
"Distribution Per Share" means, with respect to any Class of Shares, an
amount equal to the quotient of (x) the amount any distribution or payment by
the Fund related to investment income plus capital gains plus principal plus any
expense that is not a Covered Expense (for example, any payment of Income Taxes
and extraordinary expenses) divided by (y) the number of Shares of such Class of
Shares outstanding on the date of such distribution. For the avoidance of doubt
(i) payments of expenses that are not Covered Expenses, specifically including
Income Taxes and extraordinary expenses, will reduce the Guarantee per Share as
if such amounts were distributed to Shareholders, but such payments cannot be
reinvested and no Shares shall be issued in respect of such payments; and (ii)
investment-related costs, such as interest, taxes (other than Income Taxes),
brokerage commissions and transaction fees, shall not be treated as
distributions or payments by the Fund for purposes of determining Distribution
Per Share, but are taken into account and reduce the amount in clause (x) above
in accordance with the Fund's calculation of NAV.
"Expense Limitation Agreement" means the Expense Limitation Agreement,
dated as of the date hereof, between Xxxxx Xxxxxxx Investment Management Company
and the Trust on behalf of the Fund as amended from time to time.
"Guarantee Maturity Date" means the date that is five years after the
Inception Date, but if that date is not a Business Day, the Guarantee Maturity
Date shall be the first Business Day thereafter.
"Guarantee per Share" means, with respect to any Class of Shares, (i) the
NAV for such Class of Shares at the close of business on the Transition Date and
(ii) thereafter on any Business Day, the Guarantee per Share for such Class of
Shares on the immediately preceding Business Day divided by the sum of one plus
the quotient of (A) the amount of any Distribution Per Share with respect to
such Class of Shares effective since the immediately preceding Business Day
divided by (B) the NAV for such Class of Shares at the close of business on the
day such Distribution Per Share was effective.
"Guarantee Period" means the period commencing on and including the
Inception Date to and including the Guarantee Maturity Date.
"Inception Date" means the second Business Day after the end of the
Offering Period.
"Income Taxes" means U.S. income or excise taxes that are calculated on the
net income or undistributed net income of the Fund.
"Investment Company Act" means the Investment Company Act of 1940, as
amended.
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"NAV" means, with respect to any Class of Shares of the Fund, on any date,
the net asset value per share of such Class of Shares established by the Fund
for such date in the manner required by the Investment Company Act.
"Offering Period" means the period prior to the Guarantee Period during
which the shares of the Fund will be offered for sale to investors as described
in the Prospectus and SAI relating to each Class of Shares.
"Prospectus and SAI" means, for any Class of Shares, the prospectus and
statement of additional information pursuant to which the shares of such Class
of Shares were offered for sale, as the same may be updated and in effect from
time to time.
"Transition Date" means the Business Day after the end of the Offering
Period.
ARTICLE II
THE GUARANTEE
The Fund hereby guarantees that on the Guarantee Maturity Date, shares of
the Fund of any Class of Shares may be redeemed for an amount no less than the
Guarantee Per Share for that Class of Shares. To ensure that all such
redemptions can occur, the Fund will, on the Guarantee Maturity Date, cause to
be paid out of its assets available therefor to the Custodian for the benefit of
shareholders an amount equal to the Aggregate Shortfall Amount, if there is such
a shortfall.
The Trust, on behalf of the Fund, has purchased an insurance policy (the
"Policy") from a monoline insurer to insure against the risk of nonpayment by
the Fund of the Aggregate Shortfall Amount.
ARTICLE III
MISCELLANEOUS
In the event of a default of this Agreement by the Trust and in the event
that full payment is not made pursuant to the Policy or any successor insurance
policy, no Shareholder shall be entitled to receive more than such Shareholder's
allocable share of any recovery pursuant to any claim hereunder as determined in
accordance with the ratio that (a) the amount to which such Shareholder would be
entitled under this Agreement bears to (b) the aggregate amount to which all
Shareholders would be entitled hereunder.
Any liability of the Trust under this Agreement or in connection with the
transactions contemplated herein shall be discharged only out of the assets of
the Fund. For this purpose, the assets of the Fund shall not include the Policy
(or any successor insurance policy) but shall include any proceeds thereof. The
Declaration of Trust establishing the Fund is on file with the Secretary of The
Commonwealth of Massachusetts. It is expressly acknowledged and agreed that the
obligations of the Fund hereunder shall not be binding upon any of the
shareholders, Trustees, officers, employees or agents of the Fund, personally,
but shall bind only
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the trust property of the Fund, as provided in its Declaration of Trust. The
execution and delivery of this Agreement has been authorized by the Trustees of
the Fund and signed by an officer of the Fund, acting as such, and neither such
authorization by such Trustees nor such execution and delivery by such officer
shall be deemed to have been made by any of them individually or to impose any
liability on any of them personally, but shall bind only the trust property of
the Fund as provided in the Declaration of Trust.
This Agreement may be amended at any time or from time to time by the Trust
on behalf of the Fund.
This Agreement is subject to the applicable provisions of the Investment
Company Act and shall be construed, and the obligations, rights and remedies
hereunder shall be determined, in accordance with the laws of the State of New
York (to the extent not inconsistent with such Act).
[Signature page follows.]
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IN WITNESS WHEREOF, the Trust has executed this Agreement on behalf of the
Fund as of the day and year first above mentioned.
XXXXX XXXXXXX INVESTMENT
COMPANY,
On behalf of its series
Xxxxxxx Multi-Manager Principal Protected
Fund
By:_________________________________________
Name:
Title:
