EXPENSE REIMBURSEMENT, FEE WAIVER AND RECOVERY AGREEMENT
THIS EXPENSE REIMBURSEMENT, FEE WAIVER AND RECOVERY AGREEMENT (this
"Agreement") is entered into between First Trust Series Fund, a Massachusetts
business trust (the "Trust"), and First Trust Advisors L.P., an Illinois limited
partnership ("First Trust"), as of December 22, 2010.
RECITALS:
A. The Trust is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"), comprised
of various series (each, a "Fund," and, collectively, the "Funds") set forth on
Exhibit A attached hereto, which may be amended from time to time. Each Fund is
treated as a open-end fund with its own investment objectives and policies.
B. First Trust is the investment adviser to the Funds and is paid an
annual management fee by the Funds.
C. First Trust has voluntarily agreed to waive management fees and
reimburse certain expenses to prevent a Fund's Expense Ratio from exceeding a
particular Expense Cap (as such terms are hereinafter defined) for a term
provided herein; provided, however, First Trust has reserved the right to seek
restitution of any fees waived and expenses reimbursed within three years from
the date the fee or expense was incurred to the extent that such restitution
would not cause a Fund to exceed the expense limitations in effect at the time
such fee or expense was incurred.
D. First Trust and the Trust desire to more fully describe and document
the above-described fee waivers, expense reimbursements and recovery all in
accordance with the terms and provisions hereinafter set forth.
NOW, THEREFORE, IN CONSIDERATION of the foregoing facts and other good and
valuable consideration, the parties hereto hereby agree as follows:
Section 1. Definitions. The following terms shall have the following
definitions in this Agreement:
"Expense Ratio" is defined as a Fund's annual investment management fees
and expenses (excluding taxes, interest, all brokerage commissions, other normal
charges incident to the purchase and sale of portfolio securities, distribution
and service fees payable pursuant to a Rule 12b-1 plan, if any, and
extraordinary expenses) as a percentage of such Fund's daily net asset value.
"Expense Cap" shall be equal to an Expense Ratio for the Funds as set
forth on Exhibit A.
Section 2. Waiver of Fees and Reimbursement of Expenses. On a Fund by
Fund basis, First Trust will waive investment management fees payable to it by a
Fund and/or reimburse a Fund for other expenses borne by such Fund up to such
Fund's respective Expense Cap set forth in Exhibit A for the term set forth in
Exhibit A (the "Expense Cap Term"), subject to First Trust's right to recover
such fees and expenses set forth in Section 3. The aggregate amount of
investment management fees waived and expenses reimbursed for a Fund from time
to time under this Agreement for a particular Fund shall collectively be
referred to as the "Reimbursed Amount." The Reimbursed Amount shall be accrued
and paid on a monthly basis for each Fund but calculated and settled on an
annual fiscal year basis.
Section 3. Recovery. To the extent that the Expense Ratio of a particular
Fund is less than such Fund's applicable Expense Cap, First Trust may recover a
portion of the Reimbursed Amount for such Fund equal to the amount of the
Expense Cap less the actual Expense Ratio for such Fund (the "Recovered Amount")
for up to three (3) years from the date the fee or expense was incurred during
the Expense Cap Term (the "Recovery Period"). The Recovered Amount shall be
accrued and paid on a monthly basis for each Fund but calculated and settled on
an annual fiscal year basis. Under no circumstances, however, will First Trust
be eligible to recover any of the Reimbursed Amount if such recovery would cause
the Expense Ratio for a particular Fund to exceed such Fund's Expense Cap for
the most recent fiscal year period for which the Expense Cap was in place.
Nothwithstanding anything to the contrary herein, the terms and obligations set
forth in this Section 3 shall survive any termination of this Agreement as
contemplated in Section 5.
Section 4. First Trust's fund accounting department shall develop and
maintain appropriate internal accounting policies and procedures to monitor and
calculate the Reimbursed Amount and the Recovered Amount on a monthly basis for
each Fund.
Section 5. Term and Continuation. This Agreement shall be effective on
the date provided on Exhibit A (the "Effective Date") for each respective Fund.
This Agreement shall continue in effect for each respective Fund until the end
of such Fund's Recovery Period unless the Agreement is continued for additional
periods as agreed to by the parties. This Agreement may be terminated by the
Trust on behalf of a Fund at any time and by First Trust after the expiration of
the Expense Cap Term of a particular Fund upon sixty (60) days' written notice
to the other party.
Section 6. Notices. Any notice shall be sufficient when sent by
registered or certified mail to the other party at the address of such party,
set forth below such party's signature on this Agreement.
Section 7. Entire Agreement; Amendments. This Agreement supersedes and
abrogates all prior understandings, communications and agreements (whether
written or oral) between the parties with respect to the subject matter hereof,
and this Agreement constitutes the entire agreement between the parties with
respect to such subject matter. This Agreement may not be amended except by an
instrument in writing signed by each of the parties hereto. No assignment by
either party shall be of any force except with the prior written consent of the
other party.
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Section 8. Governing Law; Miscellaneous. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of Illinois (without
regard to principles of law), including all matters of construction, validity,
and performance; provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act or any rule or regulation of the Securities and
Exchange Commission. If any provision of this Agreement shall be held or made
invalid by a court's decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby. The captions in this Agreement are
included for convenience only and in no way define any of the provisions hereof
or otherwise affect their construction or effect. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors.
Section 9. Massachusetts Notice. All parties hereto are expressly put on
notice of the Trust's Declaration of Trust and all amendments thereto, a copy of
which is on file with the Secretary of the Commonwealth of Massachusetts and the
limitation of shareholder and trustee liability contained therein. This
Agreement is executed on behalf of the Trust and Fund by the Trust's officers as
officers and not individually and the obligations imposed upon the Trust and
Fund by this Agreement are not binding upon any of the Trust's Trustees,
officers or shareholders individually but are binding only upon the assets and
property of the respective Fund, and persons dealing with a Fund must look
solely to the assets of the Fund and those assets belonging to the subject Fund,
for the enforcement of any claims.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
FIRST TRUST ADVISORS L.P. FIRST TRUST SERIES FUND
By /s/ Xxxxx X. Xxxxx By /s/ Xxxxx X. Xxxxx
_________________________________ _______________________________
Xxxxx X. Xxxxx, President Xxxxx X. Xxxxx, President
Address: First Trust Advisors L.P. Address: First Trust Series Fund
000 Xxxx Xxxxxxx Xxxxx 000 Xxxx Xxxxxxx Xxxxx
Xxxxx 000 Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000 Xxxxxxx, Xxxxxxxx 00000
Fax: (630) __________ Fax: (630) __________
Attention: W. Xxxxx Xxxxxxx Attention: W. Xxxxx Xxxxxxx
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EXHIBIT A
EXPENSE CAP
(% OF AVERAGE NET EFFECTIVE EXPENSE CAP
NAME OF FUND ASSETS) DATE TERM
First Trust Preferred Securities and Income Fund 1.15%
First Trust/Confluence Small Cap Value Fund 1.35%
