THIRD AMENDED AND RESTATED OPERATING EXPENSE LIMITATION AGREEMENT DIREXION SHARES ETF TRUST
Exhibit (h)(vii)(A)
THIRD AMENDED AND RESTATED
OPERATING EXPENSE LIMITATION AGREEMENT
THIS OPERATING EXPENSE LIMITATION AGREEMENT (the “Agreement”), amends and restates the Operating Expense Limitation Agreement dated May 20, 2009, by and between DIREXION SHARES ETF TRUST, a Delaware statutory trust (the “Trust”), on behalf of each of the series listed on Appendix A hereto (each a “Fund” and collectively, the “Funds”), as such schedule may be amended from time to time, and the adviser of the Funds, Xxxxxxxx Asset Management, LLC, a New York limited liability corporation (the “Adviser”), is effective as to each Fund, as of the effective date listed on Appendix A.
WHEREAS, the Adviser renders advice and services to the Funds pursuant to the terms and provisions of an Investment Advisory Agreement and a Management Services Agreement between the Trust and the Adviser (the “Investment Advisory Agreement”); and
WHEREAS, the Funds are responsible for, and have assumed the obligation for, payment of certain expenses pursuant to the Investment Advisory Agreement and the Management Services Agreement that have not been assumed by the Adviser; and
WHEREAS, the Adviser desires to limit the Funds’ Total Annual Fund Operating Expenses (as that term is defined below in Paragraph 2 of this Agreement) pursuant to the terms and provisions of this Agreement, and the Trust (on behalf of the Funds) desires to allow the Adviser to implement those limits;
NOW THEREFORE, in consideration of the covenants and the mutual promises hereinafter set forth, the parties, intending to be legally bound hereby, mutually agree as follows:
1. | Limit On Total Annual Fund Operating Expenses. The Adviser hereby agrees to limit each Fund’s current Total Annual Fund Operating Expenses to an annual rate, expressed as a percentage of each Fund’s respective average daily net assets to the amounts listed in Appendix A (the “Annual Limits”). In the event that the current Total Annual Fund Operating Expenses of each Fund, as accrued each month, exceed its Annual Limit, the Adviser will pay to that Fund, on a monthly basis, the excess expense within 30 days of being notified that an excess expense payment is due. |
2. | Definition. For purposes of this Agreement, the term “Total Annual Fund Operating Expenses” with respect to a Fund is defined to include all expenses necessary or appropriate for the operation of the Fund, including the Adviser’s advisory fee and management services fee and other expenses described in the Investment Advisory Agreement and the Management Services Agreement, but does not include, as applicable, among other expenses, any front-end or contingent deferred sales loads, taxes, swap financing and related costs, dividends or interest on short positions, other interest expenses, brokerage commissions, expenses incurred in connection with any merger or reorganization, acquired fund fees and expenses, and extraordinary expenses such as indemnification and litigation or other expenses outside the typical day-to-day operations |
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of the Funds. Solely at the Adviser’s option and discretion, the Adviser can pay, reimburse or otherwise assume one or more of the excluded expenses, in which case such an assumed expense will be subject to reimbursement to the Adviser in accordance with the reimbursement provisions of Section 3. For purposes of this paragraph 2, “acquired fund fees and expenses” means the indirect fees and expenses that a Fund incurs from investing in the shares of other registered or unregistered investment companies. |
3. | Recoupment of Fees and Expenses. The Adviser retains its right to recoup any the excess expense payments paid by it pursuant to this Agreement in the three previous years, if the recovery does not cause a Fund to exceed any expense limitations contractually imposed by the Adviser. |
4. | Term. The Annual Limit shall be in effect for each Fund until the termination date indicated on Appendix A, unless sooner terminated as provided in Paragraph 5 of this Agreement. |
5. | Termination. This Agreement may be terminated at any time, and without payment of any penalty, by the Board of Trustees of the Trust, on behalf of one or more Funds, upon notice to the Adviser. This Agreement may not be terminated by the Adviser, on behalf of one or more Funds, without the consent of the Board of Trustees of the Trust. This Agreement automatically will terminate with respect to a Fund if the Investment Advisory Agreement is terminated with respect to such Fund, with such termination effective upon the effective date of the Investment Advisory Agreement’s termination. No shareholder approval is required to terminate or amend this Agreement. |
6. | Assignment. This Agreement and all rights and obligations hereunder may not be assigned without the written consent of the other party. |
7. | Severability. If any provision of this Agreement shall be held or made invalid by a court decision, statute or rule, or shall be otherwise rendered invalid, the remainder of this Agreement shall not be affected thereby. |
8. | Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York without giving effect to the conflict of laws principles hereof; provided that nothing herein shall be construed to preempt, or to be inconsistent with, any applicable federal law, regulation or rule, including the Investment Company Act of 1940, and the Investment Advisers Act of 1940, and any rules an regulations promulgated thereunder. |
9. | Amendments. The parties may amend Appendix A to this Agreement to add or delete Funds and update the termination date of the Annual Limits with respect to a Fund by including such changes in an updated version Appendix A. |
10. | Binding Effect. A copy of the Certificate of Trust establishing the Trust is on file with the Secretary of The State of Delaware, and notice is hereby given that this Agreement is executed by the Trust on behalf of the Funds by an officer of the Trust as an officer and not individually and that the obligations of or arising out of this Agreement are not binding upon any of the Trustees, officers or shareholders individually but are binding only up on the assets and property belonging to the Funds. |
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed.
DIREXION SHARES ETF TRUST | XXXXXXXX ASSET MANAGEMENT, LLC | |||||
By: | /s/ Xxxxxx X. X’Xxxxx | By: | /s/ Xxxxxx X. X’Xxxxx | |||
Name: | Xxxxxx X. X’Xxxxx | Name: | Xxxxxx X. X’Xxxxx | |||
Title: | CEO | Title: | Managing Director | |||
Date: | November 22, 2016 | Date: | November 22, 2016 |
Dated: May 20, 2009
Amended and Restated: November 26, 2013
Amended and Restated: November 24, 2015
Amended and Restated: August 23, 2016
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