FUND OF FUNDS INVESTMENT AGREEMENT
FUND OF FUNDS INVESTMENT AGREEMENT
THIS AGREEMENT, dated as of January 12, 2022, between/among each Acquiring Fund(s), severally and not jointly listed on Schedule A hereto (each, an “Acquiring Fund”), and each series of the Direxion Shares ETF Trust (“Trust”), excluding those listed on Schedule B hereto (each, an “Acquired Fund”), severally and not jointly. The Acquired Funds, together with the Acquiring Funds, are the “Funds.”
WHEREAS, each Fund is registered with the U.S. Securities and Exchange Commission (“SEC”) as an investment company under the Investment Company Act of 1940, as amended, (the “1940 Act”);
WHEREAS, an Acquiring Fund is not in the same Group of Investment Companies (as defined in Rule 12d1-4(d) under the 0000 Xxx) as any Acquired Fund and the Acquired Fund’s investment advisor, or any person controlling, controlled by, or under common control with such investment adviser, is not the Acquiring Fund’s sub-adviser;
WHEREAS, Section 12(d)(1)(A) of the 1940 Act limits the extent to which a registered investment company may invest in shares of other registered investment companies and Section 12(d)(1)(B) limits the extent to which a registered investment company, its principal underwriter or registered brokers or dealers may knowingly sell shares of such registered investment company to other investment companies;
WHEREAS, Rule 12d1-4 under the 1940 Act (the “Rule”) permits registered investment companies, such as the Acquiring Funds, to invest in shares of other registered investment companies, such as the Acquired Funds, in excess of the limits of Section 12(d)(1) of the 1940 Act subject to compliance with the conditions of the Rule, including that an Acquired Fund and an Acquiring Fund enter into an agreement, such as this Agreement, before the Acquiring Fund purchases shares of the Acquired Fund in excess of the limits established by Section 12(d)(1)(A) of the 1940 Act; and
WHEREAS, an Acquiring Fund may, from time to time, invest in shares of one or more Acquired Funds in excess of the limitations of Section 12(d)(1)(A) in reliance on the Rule;
NOW THEREFORE, in accordance with the Rule, the Acquiring Fund[s] and the Acquired Fund[s] desire to set forth the following terms pursuant to which the Acquiring Fund[s] may invest in the Acquired Fund[s] in reliance on the Rule.
| 1. | Terms of Investment |
(a) In order to help reasonably address the risk of undue influence on an Acquired Fund by an Acquiring Fund, and to assist the Acquired Fund’s investment adviser with making the required findings under the Rule, each Acquiring Fund acknowledges and agrees as follows:
(i) In-kind redemptions. The Acquiring Fund acknowledges and agrees that, if and to the extent consistent with the Acquired Fund’s registration statement, as amended from time to time, and Rule 6c-11 under the 1940 Act, the Acquired Fund may honor any
redemption request from an Authorized Participant acting as an intermediary to execute the Acquiring Fund’s transaction partially or wholly in-kind.
(ii) Timing/advance notice of redemptions. Only upon the request of the Acquired Fund, the Acquiring Fund will use reasonable efforts to spread orders given to an Authorized Participant that reasonably are expected to result in that Authorized Participant redeeming shares from the Acquired Fund (greater than such percentage of the Acquired Fund’s total outstanding shares as the Acquired Fund shall establish, from time to time, which percentage may be amended, upon notification to the Acquiring Fund, in the sole discretion of the Acquired Fund) over multiple days or to provide advance notification of such orders to the Acquired Fund whenever practicable and only if consistent with the Acquiring Fund’s and its shareholders’ best interests. The Acquired Fund acknowledges and agrees that any notification provided pursuant to the foregoing is not a commitment to sell the Acquired Fund shares and constitutes an estimate that may differ materially from the amount, timing and manner in which a redemption request is submitted, if any. The Acquiring Fund and Acquired Fund each acknowledge and agree that this voluntary notification provision does not apply to trades placed by the Acquiring Fund in secondary markets. In addition, upon a reasonable request by an Acquired Fund, the Acquiring Fund will provide summary information regarding the anticipated timeline of its investment in, and redemption of, shares of the Acquired Fund.
(iii) Scale of investment. Upon a reasonable request by an Acquired Fund, the Acquiring Fund will provide summary information regarding the scale of its contemplated investments in, and redemptions from, the Acquired Fund.
(b) In order to assist the Acquiring Fund’s investment adviser with evaluating the complexity of the structure and fees and expenses associated with an investment in an Acquired Fund, each Acquired Fund shall provide each Acquiring Fund with information on the fees and expenses of the Acquired Fund as reasonably requested by the Acquiring Fund. Such fee and expense information shall be limited to that which is made publicly available by the Acquired Fund.
| 2. | Representations of the Acquired Funds. |
In connection with any investment by an Acquiring Fund in an Acquired Fund in excess of the limitations in Section 12(d)(1)(A), the Acquired Fund agrees to: (i) comply with all conditions of the Rule, as interpreted or modified by the SEC or its Staff from time to time, applicable to Acquired Funds; (ii) comply with its obligations under this Agreement; and (iii) promptly notify the Acquiring Fund if such Acquired Fund fails to comply with the Rule with respect to an investment by the Acquiring Fund, as interpreted or modified by the SEC or its Staff from time to time, or this Agreement.
| 3. | Representations of the Acquiring Funds. |
(a) In connection with any investment by an Acquiring Fund in an Acquired Fund in excess of the limitations in Section 12(d)(1)(A), the Acquiring Fund agrees to: (i) comply with all conditions of the Rule, as interpreted or modified by the SEC or its Staff from time to time,
applicable to Acquiring Funds; (ii) comply with its obligations under this Agreement; and (iii) promptly notify the Acquired Fund if such Acquiring Fund fails to comply with the Rule with respect to its investment in such Acquired Fund, as interpreted or modified by the SEC or its Staff from time to time, or this Agreement.
(b) Notwithstanding anything herein to the contrary, any Acquiring Fund that has an “affiliated person” (as defined under the 0000 Xxx) that is: (i) a broker or dealer, (ii) a bank or bank holding company, or (iii) a futures commission merchant or a swap dealer, (collectively, “Affiliates”), will: (a) provide the Trust with a complete list of such Affiliates (“List of Affiliates”) on or before the effective date of this Agreement; (b) promptly provide the Trust with an updated List of Affiliates following any change to such list; and (c) not make an investment in an Acquired Fund that causes such Acquiring Fund to hold 5% or more of such Acquired Fund’s total outstanding voting securities without prior approval from the Acquired Fund.
| 4. | Indemnification |
Each Acquiring Fund, severally and not jointly, agrees to hold harmless and indemnify the Acquired Funds, including any principals, directors or trustees, officers, employees and agents of the Acquired Funds (“Trust Agents”), against and from any and all losses, expenses or liabilities incurred by or claims or actions (“Claims”) asserted against the Acquired Funds, including any Trust Agent, to the extent such Claims result from (i) a violation or alleged violation by the Acquiring Fund or any directors or trustees, officers, employees and agents of the Acquiring Fund (“Acquiring Fund Agent”) of any provision of this Agreement or (ii) a violation or alleged violation by the Acquiring Fund or an Acquiring Fund Agent of the Rule, as interpreted or modified by the SEC or its Staff from time to time, such indemnification to include any reasonable counsel fees and expenses incurred in connection with investigating and/or defending such Claims.
| 5. | Notices |
All notices, including all information that either party is required to provide under the terms of this Agreement and the Rule, shall be in writing and shall be delivered by registered or overnight mail, facsimile, or electronic mail to the address for each party specified below (which address may be changed from time to time by written notice to the other party).
| If to the Acquiring Fund: | If to the Acquired Fund: |
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Northern Lights Fund Trust and Northern Lights Variable Trust Attn: Xxxxxxx Xxxxxxxxxx c/o Ultimus Fund Solutions, LLC 00 Xxxxx Xxxxx Xxxxxxxxx, XX, 00000 Email: xxxxxxxxxxx@xxxxxxxxxxxxxxxxxxxx.xxx
With a copy to: Xxxxxxxx Xxxx LLP Attn: Legal Dept. 00 Xxxxx Xxxx Xxxxxx, Xxxxx 0000 Xxxxxxxx, XX 00000 Fax: 000-000-0000 Email: xxxxx.xxxxxxxx@xxxxxxxxxxxx.xxx
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Xxxxxxxx Asset Management, LLC 1301 Avenue of the Americas (6th Ave.), 28th Floor New York, NY 10019 Attn: Xxxxxx Xxxxxx Fax: (000) 000-0000 Email: xxxxxxxxxxxxxxxxxx@xxxxxxxxxxxxx.xxx
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6. Term; Termination;
(a) This Agreement shall be effective for the duration of the Acquired Funds’ and the Acquiring Funds’ reliance on the Rule, as interpreted or modified by the SEC or its Staff from time to time. While the terms of the Agreement shall only be applicable to investments in Acquired Funds made in reliance on the Rule, as interpreted or modified by the SEC or its Staff from time to time, the Agreement shall continue in effect until terminated pursuant to Section 6(b).
(b) This Agreement shall continue until terminated in writing by either party upon thirty (30) days’ notice to the other party, provided, however, that in the event of a material breach of this Agreement by either party, the other party may terminate immediately by providing notice in writing thereof. Upon termination of this Agreement, the Acquiring Fund may not purchase additional shares of the Acquired Fund beyond the Section 12(d)(1)(A) limits in reliance on the Rule.
7. Assignment; Amendment
(a) This Agreement may not be assigned by either party without the prior written consent of the other.
(b) This Agreement may be amended only by a writing that is signed by each affected party.
8. Governing Law; Execution
(a) This Agreement will be governed by New York law without regard to choice of law principles.
(b) In any action involving the Acquiring Funds under this Agreement, each Acquired Fund agrees to look solely to the individual Acquiring Fund(s) that are involved in the matter in controversy and not to any other series of the Acquiring Funds. In any action involving the Acquired Funds under this Agreement, each Acquiring Fund agrees to look solely to the individual Acquired Fund(s) that are involved in the matter in controversy and not to any other series of the Acquired Funds.
(c) The parties may execute this Agreement in multiple counterparts, each of which constitutes an original, and all of which collectively constitute only one Agreement. The signature of all of the parties need not appear on the same counterpart. This Agreement is effective upon delivery of one executed counterpart from each party to the other.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
Each of the Acquiring Funds listed on Schedule A,
severally and not jointly,
on behalf of itself or each of its listed series:
/s/ Xxxxxxxxx Xxxxxxx
Name: Xxxxxxxxx Xxxxxxx
Title: Secretary
DIREXION SHARES ETF TRUST, on
behalf of each of its series:
/s/ Xxxxxx Xxxxxx
Name: Xxxxxx Xxxxxx
Title: CCO/Secretary
SCHEDULE A
List of Acquiring Funds
| CURRENT AND PENDING NORTHERN LIGHTS FUNDS |
| Northern Lights Fund Trust – 74 Funds (68 operational) |
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· 13D Activist Fund (“13D”) · Altegris Funds: o Altegris Futures Evolution Fund (“Altegris Futures Evolution”) o Altegris/AACA Opportunistic Real Estate Fund (“Altegris Opportunistic”) · Astor Funds: o Astor Dynamic Allocation Fund (“Astor Dynamic”) o Astor Macro Alternative Fund (“Astor Macro”) o Astor Sector Allocation Fund (“Astor Sector”) · Athena Behavioral Tactical Fund (“Athena”) · Beech Hill Total Return Fund (“Beech Hill”) · Xxxxxx Focus Fund (“Xxxxxx”) · BTS Funds: o BTS Managed Income Fund (“BTS Managed”) o BTS Tactical Fixed Income Fund (“BTS Tactical”) · Changing Parameters Fund (“Changing Parameters”) · CMG Funds: o CMG Xxxxxxx Core Fund (“CMG Xxxxxxx”) o CMG Tactical All Asset Strategy Fund (“CMG All Asset”) o CMG Tactical Bond Fund (“CMG Bond”) · Xxxxxxxx Xxxxxxxx Funds: o Donoghue Xxxxxxxx Dividend Fund (“Xxxxxxxx Xxxxxxxx Dividend”) o Donoghue Xxxxxxxx Risk Managed Income Fund (“Xxxxxxxx Xxxxxxxx Risk Managed”) o Donoghue Xxxxxxxx Tactical Allocation (“Xxxxxxxx Xxxxxxxx Tactical”) o Donoghue Xxxxxxxx Tactical Income Fund (“Xxxxxxxx Xxxxxxxx Income”) o Donoghue Xxxxxxxx Momentum Fund (“Xxxxxxxx Xxxxxxxx Momentum”) · Grant Park Multi-Alternative Strategies Fund (“Grant Park”) · Ladenburg Funds: o Ladenburg Aggressive Growth Fund (“Ladenburg Aggressive”) o Ladenburg Growth Fund (“Ladenburg Growth”) o Ladenburg Growth & Income Fund (“Ladenburg Growth & Income”) o Ladenburg Income Fund (“Ladenburg Income”) o Ladenburg Income & Growth Fund (“Ladenburg Income & Growth”) · Navigator Funds: o Navigator Equity Hedged Fund (“Navigator Equity”) o Navigator Tactical Fixed Income Fund (Navigator Tactical”) o Navigator Ultra Short Bond Fund (“Navigator Ultra”) o Navigator Investment Grade Bond Fund (“Navigator Investment”) o Navigator Tactical U.S. Allocation Fund (Navigator Allocation”) · Princeton Funds: o Deer Park Total Return Credit Fund (“Deer Park Total”) o Eagle MLP Strategy Fund (“Eagle”) o Princeton Premium Fund (“Princeton Premium”) o Princeton Long/Short Treasury Fund (“Princeton L/S”) o Princeton Alternative Premium Fund* · Probabilities Funds: o Probabilities Fund (“Probabilities”) o Probabilities Sector Rotation Fund (“Probabilities Sector”) *
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· PSI Strategic Growth Fund (“PSI Strategic”) · PFG Funds: o PFG Active Core Bond Strategy Fund (“PFG Active Core”) o PFG American Funds® Conservative Income Strategy Fund (“PFG American Conservative”) o PFG American Funds® Growth Strategy Fund (“PFG American Growth”) o PFG BNY Mellon Diversifier Strategy Fund (PFG BNY Mellon”) o PFG BR Equity ESG Strategy Fund, (“PFG BR Equity”) o PFG Fidelity Institutional AM® Equity Index Strategy Fund (“PGR Fidelity Index”) o PFG Fidelity Institutional AM® Equity Sector Strategy Fund (“PFG Fidelity Sector”) o PFG XX Xxxxxx Tactical Aggressive Strategy Fund (“XX Xxxxxx Aggressive”) o PFG XX Xxxxxx Tactical Moderate Strategy Fund (XX Xxxxxx Moderate”) o PFG Xxxxxx Tactical Strategy Fund (“PFG Xxxxxx”) o PFG MFS® Aggressive Growth Strategy Fund (“PFG MFS”) o PFG Tactical Income Strategy Fund (PFG Tactical”) o PFG Fidelity Institutional AM® Bond ESG Strategy o PFG Xxxxx Xxxxxxxxx® Balanced Strategy o PFG Invesco® Thematic Equity ESG Strategy · Sierra Funds: o Sierra Tactical Core Income Fund (“Sierra Tactical Core”) o Sierra Tactical All Asset Fund (“Sierra Tactical”) o Sierra Tactical Municipal Fund (“Sierra Municipal”) o Sierra Tactical Bond Fund (“Sierra Bond”) o Sierra Tactical Risk Spectrum 30 Fund (“Sierra Tactical 30”)* o Sierra Tactical Risk Spectrum50 Fund (“Sierra Tactical 50”) o Sierra Tactical Risk Spectrum 70 Fund (“Sierra Tactical 70”)* · Toews Funds: o Toews Agility Shares Dynamic Tactical Income ETF (“Agility Dynamic”) o Toews Agility Shares Managed Risk Equity ETF (“Agility Managed”) o Agility Shares Put Write Enhance Equity ETF (“Agility Put Write”) * o Agility Shares Tactical Core Fixed Income ETF (“Agility Tactical”) * o Toews Tactical Defensive Alpha Fund (‘Toews Defensive”) o Toews Tactical Income Fund (“Toews Income”) o Toews Hedged U.S. Fund (“Toews Hedged U.S.”) o Toews Hedged Oceana Fund (“Toews Oceana”) o Toews Hedged U.S. Opportunity Fund (“Toews Opportunity”) o Toews Unconstrained Income Fund (“Toews Unconstrained”) · TransWestern Institutional Short Duration Government Bond Fund (“TransWestern”) · Zeo Funds: o Zeo Short Duration Income Fund (“Zeo Short”) o Zeo Sustainable Credit Fund (“Zeo Sustainable”) |
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| Northern Lights Variable Trust – 20 Portfolios (15 operational) | |
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· 7Twelve Balanced Portfolio (“7Twelve”) · Astor Funds: o Astor Long/Short ETF Portfolio* (“Astor VIT”) o Astor Macro Alternative Portfolio* (Astor Macro VIT”) · BTS Tactical Fixed Income VIT Fund (“BTS Tactical VIT”) · Xxxxxxxx Xxxxxxxx Portfolios:
· Probabilities VIT Fund (“Probabilities VIT”)
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· TOPS® Portfolios: o TOPS® Aggressive Growth ETF Portfolio (“TOPS Aggressive”) o TOPS® Balanced ETF Portfolio (“TOPS Balanced”) o TOPS® Conservative ETF Portfolio (“TOPS Conservative”) o TOPS® Global Target Range TM Fund (“TOPS Global”) o TOPS® Growth ETF Portfolio (“TOPS Growth”)
o TOPS®F Hedged Equity Growth ETF Portfolio (“TOPS Hedged Growth”) * o TOPS® Hedged Equity Moderate Growth ETF Portfolio * (“TOPs Hedged Moderate”) o TOPS® Managed Risk Balanced ETF Portfolio (“TOPS Risk Balanced”) o TOPS® Managed Risk Growth ETF Portfolio (“TOPS Risk Growth”) o TOPS® Managed Risk Moderate Growth ETF Portfolio (“TOPS Risk ETF”) o TOPS® Managed Risk Flex ETF Portfolio (“TOPS Risk Flex”) o TOPS® Moderate Growth ETF Portfolio (“TOPS Moderate”) |
* Fund not operational as of November 30, 2021
SCHEDULE B
List of Excluded Series (Funds) of the Direxion Shares ETF Trust
None
