FUND OF FUNDS INVESTMENT AGREEMENT
THIS AGREEMENT, dated as of January 19, 2022 between Managed Portfolio Series (the “Acquiring Trust”) on behalf of each of its series, severally and not jointly listed on Schedule A hereto (each, an “Acquiring Fund”), and each series of the Direxion Funds (the “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 1940 Act) 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, the Acquired Fund may honor any redemption request partially or wholly
in-kind.
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(ii)Timing/advance notice of redemptions. Each Acquiring Fund represents that an Acquiring Fund will not seek to disrupt, or intentionally disrupt, the management of the Acquired Fund in connection with any redemption request. 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 investment 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; (iii) comply with all conditions of exemptive relief applicable to the Acquired Funds (“Relief”); and
(iv) promptly notify the Acquiring Fund if such Acquired Fund fails to comply with the Rule, as interpreted or modified by the SEC or its Staff from time to time, or any of the conditions of such Relief, 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 1940 Act) 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
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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 and the Trust, including any principals, directors or trustees, officers, employees and agents of the Acquired Funds or the Trust (“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 Trust (“Acquiring Trust Agent”) of any provision of this Agreement or (ii) a violation or alleged violation by an Acquiring Fund or an Acquiring Trust 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.
Each Acquired Fund, severally and not jointly, agrees to hold harmless and indemnify the Acquiring Funds and the Acquiring Trust, including any principals, directors or trustees, officers, employees and agents of the Acquiring Funds or the Acquiring Trust (“Acquiring Trust Agents”), against and from any and all Claims asserted against the Acquiring Funds, including any Acquiring Trust Agent, to the extent such Claims result from (i) a violation or alleged violation by the Acquired Fund or any directors or trustees, officers, employees and agents of the Acquired Fund or the Trust (“Acquired Fund Agent”) of any provision of this Agreement or (ii) a violation or alleged violation by the Acquired Fund or an Acquired 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: | ||||
Xxxxx Xxxxxxxxx, President 000 X Xxxxxxxx Xxxxxxxxx XX 00000 xxxxx.xxxxxxxxx@xxxxxx.xxx With a copy to: Xxx Xxxxxxxx xxxxxx.xxxxxxxx@xxxxxx.xxx | Xxxxxxxx Asset Management, LLC 0000 Xxxxxx xx xxx Xxxxxxxx (0xx Xxx.), 00xx Xxxxx Xxx Xxxx, XX 00000 Attn: Xxxxxx Xxxxxx Fax: (000) 000-0000 Email: xxxxxxxxxxxxxxxxxx@xxxxxxxxxxxxx.xxx | ||||
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Email:
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 Delaware 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.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
on behalf of each of its series, severally and not jointly, listed on Schedule A:
/s/ Xxxxx Xxxxxxxxx
Name: Xxxxx Xxxxxxxxx
Title:President
DIREXION FUNDS, on
behalf of each of its series:
/s/ Xxxxxx Xxxxxx
Name: Xxxxxx Xxxxxx
Title: Chief Compliance Officer & Secretary
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SCHEDULE A
List of Acquiring Funds
•ATAC Rotation Fund
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[The remainder of this page has been left blank intentionally]
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SCHEDULE B
List of Excluded Series (Funds) of the Direxion Funds
Direxion Monthly NASDAQ-100 Bull 1.25X Fund (DXNLX) Direxion Monthly NASDAQ-100 Bull 2X Fund (DXQLX) Direxion Monthly Emerging Markets Bull 2X Fund (DXELX) Direxion Monthly 7-10 Year Treasury Bull 2X Fund (DXKLX) Direxion Monthly Small Cap Bull 2X Fund (DXRLX) Direxion Monthly S&P 500 Bull 2X Fund (DXSLX)
Direxion Monthly High Yield Bull 1.2X Fund (DXHYX)
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