RULE 12d1-4 FUND OF FUNDS INVESTMENT AGREEMENT
Exhibit (h)(18)
RULE 12d1-4 FUND OF FUNDS INVESTMENT AGREEMENT
THIS AGREEMENT is entered into as of January 19, 2022, between Exchange Listed Funds Trust and Exchange Traded Concepts Trust, each a Statutory Trust organized under the laws of Delaware, on behalf of itself or its separate series listed on Schedule A, severally and not jointly (each, an “Acquiring Fund”), and Global X Funds, a statutory trust organized under the laws of the State of Delaware (“Global X Funds”), on behalf of its respective series listed on Schedule B and such additional series as shall be designated in the future, severally and not jointly (each, an “Acquired Fund” and collectively, the “Acquired Funds”).
WHEREAS, each Acquiring Fund and each Acquired 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, 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, 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; 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;
WHEREAS, the Acquiring Fund and the Acquired Funds have entered into a Participation Agreement dated July 12, 2021, which is hereby terminated and superseded by this agreement;
NOW THEREFORE, in accordance with the Rule, the Acquiring Funds and the Acquired Funds desire to set forth the following terms pursuant to which the Acquiring Funds may invest in theAcquired Funds 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 and each Acquired Fund agrees as follows:
(i) 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, the Acquired Fund may honor any redemption request partially or wholly in-kind.
(ii) Upon a reasonable request by an Acquired Fund, the Acquiring Fund will provide summary information regarding the anticipated timeline of its investment in the Acquired Fund and the scale of its contemplated investments in the Acquired Fund.
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(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 reasonably requested by the Acquiring Fund with reference to the Rule.
| 2. | 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 the Acquiring Fund; (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 an investment in such Acquired Fund, as interpreted or modified by the SEC or its Staff from time to time, or this Agreement.
(b) The members of an Acquiring Fund’s Advisory Group (as such term is defined in the Rule) will not control (individually or in the aggregate) an Acquired Fund within the meaning of Section 2(a)(9) of the 1940 Act. The members of an Acquiring Fund’s Sub- Advisory Group (as such term is defined in the Rule), if any, will not control (individually or in the aggregate) an Acquired Fund within the meaning of Section 2(a)(9) of the 1940 Act.
If, as a result of a decrease in the outstanding voting securities of an Acquired Fund, an Acquiring Fund’s Advisory Group or an Acquiring Fund’s Sub-Advisory Group, each in the aggregate, becomes a holder of more than 25% of the outstanding voting securities of an Acquired Fund, the Acquiring Fund will vote its shares of the Acquired Fund in the same proportion as the vote of all other holders of the Acquired Fund’s shares. Notwithstanding the foregoing, none of the foregoing provisions of this paragraph (c) shall apply to an Acquiring Fund Sub-Advisory Group with respect to an Acquired Fund for which the Acquiring Fund Sub-Adviser or a person controlling, controlled by or under common control with the Acquiring Fund Sub-Adviser acts as the investment adviser within the meaning of Section 2(a)(20)(A) of the 1940 Act.
(c) Each Acquiring Fund acknowledges and understands that an Acquired Fund reserves the right to reject any direct purchase of Creation Units by an Acquiring Fund.
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| 3. | Representations of the Acquired 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 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 the Acquired Fund; (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.
| 4. | Indemnification. |
The Acquiring Funds, severally and not jointly, agree to hold harmless, indemnify and defend the Acquired Funds and Global X Funds, including any of their principals, trustees, officers, employees and agents (“Global X Agents”), against and from any and all losses, costs, expenses or liabilities incurred by or claims or actions (“Claims”) asserted against the Acquired Funds and/or Global X Funds, including any Global X Agents, to the extent such Claims result from a material breach by such AcquiringFund of any provision of this Agreement. The indemnification provided for in thisparagraph shall include any reasonable counsel fees and expenses incurred in connection with investigating and/or defending such Claims.
The Acquired Funds, severally and not jointly, agree to hold harmless, indemnify and defend an Acquiring Fund, including any of its principals, directors or trustees, officers, employees and agents (“Acquiring Fund Agents”), against and from any Claims asserted against the Acquiring Fund, including any Acquiring Fund Agents, to the extent such Claims result from a material breach by the Acquired Fund of any provision of this Agreement. The indemnification provided for in this paragraph shall include any reasonable counsel fees and expenses incurred in connection with investigating and/or defending such Claims, provided that no Acquired Fund shall be liable for indemnifying any Acquiring Fund or Acquiring Fund Agent for any Claims resulting from violations that occur as a result of incomplete or inaccurate information provided by the Acquiring Fund to such Acquired Fund pursuant to the terms of this Agreement, or resulting from violations caused by the Acquiring Fund, the Acquiring Fund’s Agent or any Acquiring Fund Sub- Adviser.
| 5. | Materials. |
To the extent an Acquiring Fund refers to one or more Acquired Funds in any prospectus, statement of additional information or otherwise, each Acquiring Fund agrees to:
(a) Refer to such Acquired Funds with their full name as, for example, the “Global X [ ] ETF”; and
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(b) Include, other than in the financial statements of the Acquiring Fund when the Acquired Fund is listed as a holding, the following notice within reasonable proximity to the reference to such Acquired Fund:
None of Global X Management Company LLC, SEI Investments Distribution Company, Global X Funds or the Global X [ ] ETF make any representations regarding the advisability of investing in [Name of Acquiring Fund].
| 6. | Notices. |
All notices, including all information that either party is required to provide under the terms of this Agreement and the terms of 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 notice to the other party).
If to the Acquiring Fund:
Xxxxxxx Xxxxxxxxx
Funds
Chief Compliance Officer
Exchange Traded Concepts
000
Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Telephone: 000.000.0000
Facsimile: 000-000-0000
Email: 00x0xxxxxxxxxxx@xxxxxxxxxxxxxxxxxxxxxx.xxx
If to an Acquired Fund:
Global X Funds
Attn: Xxxx Xxxxxxx
000 Xxxxx Xxx., 00xx Floor
New York, New York 10158
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Email: xxxxxxxxxxxx@xxxxxxxxxxx.xxx
| 7. | Addition of New Funds |
Schedule B lists the Acquired Funds in existence as of the date of this Agreement. Additional Acquired Funds may be created from time to time. [Acquiring Fund] and Global X Funds agree that in the event an Acquiring Fund invests in an Acquired Fund that is created after the date of this Agreement, such investment shall be governed by the terms of this Agreement and such Acquired Fund shall be deemed to be added to Schedule B as of the date of the initial investment in such Acquired Fund.
Schedule A lists the Acquiring Funds in existence as of the date of this Agreement. Additional Acquiring Funds may be created from time to time. Acquiring Fund and Global X Funds agree that additional Acquiring Funds may be added to this Agreement bynotifying Global X Funds in accordance with Paragraph 6 of this Agreement of the additional Acquiring Funds. Any such Acquiring Fund added pursuant to this provision shall be deemed to be added to Schedule A as of the date of the receipt of such notice byGlobal X Funds.
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| 8. | Termination; Governing Law; Amendment. |
(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 this 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 8(b).
(b) This Agreement shall continue until terminated in writing by either party (either in its entirety or with respect to one or more Acquired Funds or Acquiring Funds) upon 60 days’ notice to the other party. Upon termination of this Agreement (either in its entirety or with respect to specific funds), an Acquiring Fund may not purchase additional shares of an Acquired Fund beyond the Section 12(d)(1)(A) limits in reliance on the Rule.
(c) This Agreement may not be assigned by either party without the prior written consent of the other.
(d) This Agreement will be governed by Delaware law without regard to choice of law principles.
(e) In any action involving an Acquired Fund under this Agreement, each Acquiring Fund agrees to look solely to the individual Acquired Fund(s) that is/are involved in the matter in controversy and not to any other series of the Global X Funds.
(f) This Agreement may be amended or modified by a written document signed by an authorized representative of each party and delivered in accordance with Section 6 of this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
Exchange Traded Concepts Trust and Exchange Listed Funds Trust on behalf of each of its series listed on Schedule A, severally and not jointly,
| /s/ X. Xxxxxxx Xxxxxxx | |||
| Name: | X. Xxxxxxx Xxxxxxx | ||
| Title: | President | ||
Global X Funds
on behalf of each of its series listed on Schedule B, severally and not jointly,
| /s/ Xxxxx Xxxxxx | |||
| Name: | Xxxxx Xxxxxx | ||
| Title: | General Counsel | ||
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SCHEDULE A
List of Acquiring Funds
Cabana
Target Drawdown 5 ETF
Cabana Target Drawdown 7 ETF
Cabana Target Drawdown 10 ETF
Cabana Target Drawdown 13 ETF
Cabana Target Drawdown
16 ETF
Cabana
Target Leading Sector Aggressive ETF
Cabana Target Leading Sector Conservative ETF
Cabana Target Leading Sector Moderate ETF
A-1
SCHEDULE B
List of Acquired Funds
| Global X MSCI China Consumer Discretionary ETF | Global X Robotics & Artificial Intelligence ETF |
| Global X MSCI China Energy ETF | Global X MSCI SuperDividend EAFE ETF |
| Global X MSCI China Financials ETF | Global X Founder-Run Companies ETF |
| Global X MSCI China Industrials ETF | Global X U.S. Infrastructure Development ETF |
| Global X MSCI China Materials ETF | Global X U.S. Preferred ETF |
| Global X Copper Miners ETF | Global X Autonomous & Electric Vehicles ETF |
| Global X MSCI Greece ETF | Global X Artificial Intelligence & Technology ETF |
| Global X MSCI Portugal ETF | Global X S&P 500 Quality Dividend ETF |
| Global X Gold Explorers ETF | Global X Adaptive US Factor ETF |
| Global X Lithium & Battery Tech ETF | Global X E-commerce ETF |
| Global X MLP & Energy Infrastructure ETF | Global X MSCI China Consumer Staples ETF |
| Global X MLP ETF | Global X MSCI China Health Care ETF |
| Global X MSCI Argentina ETF | Global X MSCI China Information Technology ETF |
| Global X MSCI Colombia ETF | Global X MSCI China Real Estate ETF |
| Global X MSCI Nigeria ETF | Global X MSCI China Utilities ETF |
| Global X MSCI Norway ETF | Global X Nasdaq 100 Covered Call ETF |
| Global X MSCI Pakistan ETF | Global X S&P 500 Covered Call ETF |
| Global X MSCI China Communication Services ETF | Global X DAX Germany ETF |
| Global X MSCI Next Emerging & Frontier ETF | Global X Genomics & Biotechnology ETF |
| Global X Silver Miners ETF | Global X Cloud Computing ETF |
| Global X Social Media ETF | Global X Cannabis ETF |
| Global X FTSE Southeast Asia ETF | Global X Cybersecurity ETF |
| Global X MSCI SuperDividend EmergingMarkets ETF | Global X Video Games & Esports ETF |
| Global X SuperDividend ETF | Global X Emerging Markets Bond ETF |
| Global X SuperDividend REIT ETF | Global X Variable Rate Preferred ETF |
| Global X SuperDividend U.S. ETF | Global X S&P Catholic Values Developed ex- U.S. ETF |
| Global X SuperIncome Preferred ETF | Global X Education ETF |
| Global X Uranium ETF | Global X Telemedicine & Digital Health ETF |
| Global X Guru Index ETF | Global X China Biotech Innovation ETF |
| Global X NASDAQ 100 Covered Call & Growth ETF | |
| Global X Renewable Energy Producers ETF | Global X S&P 500 Covered Call & Growth ETF |
| Global X S&P 500® Catholic Values ETF | Global X CleanTech ETF |
| Global X Millennial Consumer ETF | Global X Data Center REITs & Digital Infrastructure ETF |
| Global X Health & Wellness ETF | Global X Emerging Markets Internet & E- commerce ETF |
| Global X Aging Population ETF | Global X Adaptive U.S. Risk Management ETF |
| Global X Conscious Companies ETF | Global X China Innovation ETF |
| Global X FinTech ETF | Global X Clean Water ETF |
| Global X Internet of Things ETF | Global X Hydrogen ETF |
| Global X AgTech & Food Innovation ETF | Global X NASDAQ 100 Tail Risk ETF |
| Global X Blockchain ETF | Global X NASDAQ 100 Risk Managed Income ETF |
| Global X S&P 500 Risk Managed Income ETF | Global X NASDAQ 100 Collar 95-110 ETF |
| Global X Solar ETF | Global X S&P 500 Tail Risk ETF |
| Global X Wind Energy ETF | Global X S&P 500 Collar 95-110 ETF |
| Global X MSCI Vietnam ETF |
B-1
