INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT made as of this 20th day of December, 2010, by and among
Macquarie/First Trust Global Infrastructure/Utilities Dividend & Income Fund, a
Massachusetts business trust (the "Fund"), First Trust Advisors L.P., an
Illinois limited partnership and a federally registered investment adviser
("Manager"), and Macquarie Capital Investment Management LLC, a Delaware limited
liability company and a federally registered investment adviser ("Sub-Adviser").
WHEREAS, the Fund is a closed-end management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Fund has retained Manager to serve as the investment manager
for the Fund pursuant to an Investment Management Agreement between Manager and
the Fund (as such agreement may be modified from time to time, "Management
Agreement");
WHEREAS, Management Agreement provides that Manager may, subject to the
initial and periodic approvals required under Section 15 of the 1940 Act,
appoint one or more sub-advisers for the purpose of furnishing certain services
required under Management Agreement; and
WHEREAS, the Fund and Manager desire to retain Sub-Adviser to furnish
investment advisory services for a certain designated portion of the Fund's
investment portfolio, upon the terms and conditions hereafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
1. Appointment. The Fund and Manager hereby appoint Sub-Adviser to
provide certain sub-investment advisory services to the Fund for the period and
on the terms set forth in this Agreement. Sub-Adviser accepts such appointment
and agrees to furnish the services herein set forth for the compensation herein
provided.
2. Services to be Performed. Subject always to the supervision of Fund's
Board of Trustees and Manager, Sub-Adviser will act as sub-adviser for, manage
the investment and reinvestment of the Fund's assets with respect to, furnish an
investment program in respect of, make investment decisions for, and place all
orders for the purchase and sale of securities for the portion of the Fund's
investment portfolio invested or to be invested in equity securities as well as
other securities and instruments issued by U.S. and non-U.S. issuers that
manage, own and/or operate infrastructure and utility assets in a select group
of countries (the "Core Component") all on behalf of the Fund and as described
in the Fund's most recent registration statement on Form N-2 as declared
effective by the Securities and Exchange Commission and as the same may be
amended from time to time (the "Registration Statement"). In the performance of
its duties, Sub-Adviser will satisfy its fiduciary duties to the Fund, will
monitor the Fund's investments in the Core Component, and will comply with the
provisions of the Fund's Declaration of Trust and By-laws, as amended from time
to time and communicated by the Fund or Manager to Sub-Adviser in writing, and
the stated investment objectives, policies and restrictions of the Fund
applicable to the Core Component, as such objectives, policies and restrictions
may subsequently be changed by the Fund's Board of Trustees and communicated by
the Fund or Manager to Sub-Adviser in writing. The Fund or Manager will promptly
provide Sub-Adviser with current copies of the Fund's Declaration of Trust,
By-laws, prospectus, statement of additional information and any amendments to
any thereof.
Sub-Adviser is authorized to select the brokers or dealers that will
execute the purchases and sales of the Fund's securities with respect to the
Core Component on behalf of the Fund, and is directed to use its commercially
reasonable efforts to obtain best execution, which includes most favorable net
results and execution of the Fund's orders, taking into account all appropriate
factors, including price, dealer spread or commission, size and difficulty of
the transaction and research or other services provided. Subject to compliance
with the policies and procedures adopted by the Board of Trustees for the Fund
and to the extent permitted by and in conformance with applicable law (including
Rule 17e-1 of the 1940 Act), Sub-Adviser may select brokers or dealers
affiliated with Sub-Adviser. It is understood that Sub-Adviser will not be
deemed to have acted unlawfully, or to have breached a fiduciary duty to the
Fund, or be in breach of any obligation owing to the Fund under this Agreement,
or otherwise, solely by reason of its having caused the Fund to pay a member of
a securities exchange, a broker or a dealer a commission for effecting a
transaction for the Fund in excess of the amount of commission another member of
an exchange, broker or dealer would have charged if Sub-Adviser determined in
good faith that the commission paid was reasonable in relation to the brokerage
or research services provided by such member, broker or dealer, viewed in terms
of that particular transaction or Sub-Adviser's overall responsibilities with
respect to its accounts, including the Fund, as to which it exercises investment
discretion. In addition, if in the judgment of Sub-Adviser, the Fund would be
benefited by supplemental services, Sub-Adviser is authorized to pay spreads or
commissions to brokers or dealers furnishing such services in excess of spreads
or commissions that another broker or dealer may charge for the same
transaction, provided that Sub-Adviser determined in good faith that the
commission or spread paid was reasonable in relation to the services provided
and complies with the Fund's policies and procedures.
In addition, Sub-Adviser may, to the extent permitted by applicable law,
aggregate purchase and sale orders of securities placed with respect to the Core
Component with similar orders being made simultaneously for other accounts
managed by Sub-Adviser or its affiliates, if in Sub-Adviser's reasonable
judgment such aggregation shall result in an overall economic benefit to the
Fund, taking into consideration the selling or purchase price, brokerage
commissions and other expenses. In the event that a purchase or sale of an asset
of the Fund occurs as part of any aggregate sale or purchase orders, the
objective of Sub-Adviser and any of its affiliates involved in such transaction
shall be to allocate the securities so purchased or sold, as well as expenses
incurred in the transaction, among the Fund and other accounts in an equitable
manner. Nevertheless, the Fund and Manager acknowledge that under some
circumstances, such allocation may adversely affect the Fund with respect to the
price or size of the positions obtainable or salable. Whenever the Fund and one
or more other investment advisory clients of Sub-Adviser have available funds
for investment, investments suitable and appropriate for each will be allocated
in a manner believed by Sub-Adviser to be equitable to each, although such
allocation may result in a delay in one or more client accounts being fully
invested that would not occur if such an allocation were not made. Moreover, it
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is possible that due to differing investment objectives or for other reasons,
Sub-Adviser and its affiliates may purchase securities of an issuer for one
client and at approximately the same time recommend selling or sell the same or
similar types of securities for another client.
Sub-Adviser will not arrange purchases or sales of securities between the
Fund and other accounts advised by Sub-Adviser or its affiliates unless (a) such
purchases or sales are in accordance with applicable law (including Rule 17a-7
of the 0000 Xxx) and the Fund's policies and procedures, (b) Sub-Adviser
determines the purchase or sale is in the best interests of the Fund, and (c)
the Fund's Board of Trustees have approved these types of transactions.
Subject to compliance with applicable law, the Fund's investment
objectives, policies and restrictions and the policies and procedures adopted by
the Board of Trustee for the Fund, Sub-Adviser may cause the Fund to invest in
securities of issuers advised or managed by persons affiliated with Sub-Adviser.
To the extent the Fund seeks to adopt, amend or eliminate any objectives,
policies, restrictions or procedures in a manner that modifies or restricts
Sub-Adviser's authority regarding the execution of the Fund's portfolio
transactions, the Fund agrees to use reasonable commercial efforts to consult
with Sub-Adviser regarding the modifications or restrictions prior to such
adoption, amendment or elimination.
Sub-Adviser will communicate to the officers and trustees of the Fund such
information relating to transactions for the Fund as they may reasonably
request. In no instance will portfolio securities be purchased from or sold to
Manager, Sub-Adviser or any affiliated person of any of the Fund, Manager, or
Sub-Adviser, except as may be permitted under the 1940 Act.
Sub-Adviser further agrees that it:
(a) will use the same degree of skill and care in providing such
services as it uses in providing services to other fiduciary accounts for
which it has investment responsibilities;
(b) will, in all material respects, conform to all applicable Rules
and Regulations of the Securities and Exchange Commission and comply with
all policies and procedures adopted by the Board of Trustees for the Fund
and communicated to Sub-Adviser in writing and, in addition, will conduct
its activities under this Agreement in accordance with any applicable
regulations of any governmental authority pertaining to its investment
advisory activities;
(c) will report regularly to Manager and to the Board of Trustees
of the Fund (generally on a quarterly basis) and will make appropriate
persons available for the purpose of reviewing with representatives of
Manager and the Board of Trustees on a regular basis at reasonable times
the management of the Fund, including, without limitation, review of the
general investment strategies of the Fund, the performance of the Fund's
investment portfolio in relation to relevant standard industry indices and
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general conditions affecting the marketplace and will provide various
other reports from time to time as reasonably requested by Manager or the
Board of Trustees of the Fund; and
(d) will prepare and maintain such books and records with respect
to the Fund's securities transactions for the Core Component as required
for registered investment advisers under applicable law or as otherwise
reasonably requested by Manager and will prepare and furnish Manager and
the Fund's Board of Trustees such periodic and special reports as the
Board or Manager may reasonably request. Sub-Adviser further agrees that
all records that it maintains for the Fund are the property of the Fund
and Sub-Adviser will surrender promptly to the Fund any such records upon
the request of Manager or the Fund; provided, however, that Sub-Adviser
shall be permitted to retain copies thereof and shall be permitted to
retain originals (with copies to the Fund) to the extent required under
Rule 204-2 of the Investment Advisers Act of 1940 or other applicable law.
The Sub-Adviser's duties and obligations shall be limited to those
expressly set out in this Agreement. The Manager and the Fund acknowledge such
limitation.
3. Expenses. During the term of this Agreement, Sub-Adviser will pay all
expenses incurred by it in connection with its activities under this Agreement
other than the cost of securities and other assets (including, legal expenses
and the costs and expenses of due diligence undertaken by third parties incurred
by the Sub-Adviser in connection with the purchase or proposed purchase of such
securities or assets, previously approved in writing by the Fund's Chief
Financial Officer, and brokerage commissions, if any). However, if approved in
writing by the Fund's Chief Financial Officer, Sub-Adviser may be reimbursed for
certain extraordinary expenses.
4. Compensation. For the services provided and the expenses assumed
pursuant to this Agreement, the Fund will pay Sub-Adviser, and, subject to the
Supplemental Management Fee (defined below), Sub-Adviser agrees to accept as
full compensation therefore, a portfolio management fee (the "Core Management
Fee") equal to:
(i) the annual rate of 0.60% multiplied by that portion of the
Total Assets comprising the Core Component; and
(ii) if the Total Assets are more than $250 million, an additional
fee at the annual rate of 0.05% multiplied by that portion of the Total
Assets over $250 million.
To the extent Sub-Adviser invests a portion of the Core Component in
unlisted securities (the "Core Unlisted Portion"), the Fund will pay Sub-Adviser
a supplemental portfolio management fee (the "Supplemental Management Fee",
together with the Core Management Fee, the "Management Fee") equal to the annual
rate of 0.60% multiplied by the Total Assets attributable to the Core Unlisted
Portion; provided, however, that in no event shall the Core Unlisted Portion be
deemed to exceed, for purposes of calculating the Supplemental Management Fee,
25% of the Core Component. The Supplemental Fee shall be in addition to the Core
Management Fee.
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For purposes of calculating the Management Fee, "Total Assets" means the
average daily gross asset value of the Fund (including assets attributable to
the Fund's preferred shares, if any, and the principal amount of borrowings),
minus the sum of the Fund's accrued and unpaid dividends on any outstanding
preferred shares and accrued liabilities (other than the principal amount of any
borrowings incurred, commercial paper or notes or other forms of indebtedness
issued by the Fund and the liquidation preference of any outstanding preferred
shares). The Management Fee shall be payable in arrears on or about the last day
of each fiscal quarter during the term of this Agreement.
For the quarter and year in which this Agreement becomes effective or
terminates, there shall be an appropriate proration of the Management Fee and
Supplemental Fee on the basis of the number of days that the Agreement is in
effect during the quarter and year, respectively.
5. Services to Others. The Fund and Manager acknowledge that Sub-Adviser
may in the future act as an investment adviser to other managed accounts and as
investment adviser or investment sub-adviser to one or more other investment
companies. In addition, the Fund and Manager acknowledge that the persons
employed by Sub-Adviser to assist in Sub-Adviser's duties under this Agreement
will not devote their full time to such efforts. It is also agreed that
Sub-Adviser may use any supplemental research obtained for the benefit of the
Fund in providing investment advice to its other investment advisory accounts
and for managing its own accounts.
6. Limitation of Liability. Sub-Adviser shall not be liable for, and the
Fund and Manager will not take any action against Sub-Adviser to hold
Sub-Adviser liable for, any error of judgment or mistake of law or for any loss
suffered by the Fund (including, without limitation, by reason of the purchase,
sale or retention of any security) in connection with the performance of
Sub-Adviser's duties under this Agreement, except for a loss resulting from
willful misfeasance, bad faith or gross negligence on the part of Sub-Adviser in
the performance of its duties under this Agreement, or by reason of its reckless
disregard of its obligations and duties under this Agreement.
8. Term; Termination. This Agreement shall become effective with respect
to the Fund on the same date as the Management Agreement between the Fund and
Manager becomes effective, provided that it has been approved by a vote of a
majority of the outstanding voting securities of the Fund in accordance with the
requirements of the 1940 Act, and shall remain in full force until the two-year
anniversary of the date of its effectiveness unless sooner terminated as
hereinafter provided. This Agreement shall continue in force from year to year
thereafter, but only as long as such continuance is specifically approved for
the Fund at least annually in the manner required by the 1940 Act and the rules
and regulations thereunder; provided, however, that if the continuation of this
Agreement is not approved for the Fund, Sub-Adviser may continue to serve in
such capacity for the Fund in the manner and to the extent permitted by the 1940
Act and the rules and regulations thereunder. For the avoidance of doubt, the
termination of Management Agreement or other termination of or resignation by
Manager as investment adviser to the Fund shall not in and of itself cause the
termination of this Agreement. In such cases, Sub-Adviser may continue to
provide the services herein set forth for the compensation provided herein.
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This Agreement shall automatically terminate in the event of its
assignment and may be terminated at any time without the payment of any penalty
by Manager or Sub-Adviser upon sixty (60) days' written notice to the other
parties. This Agreement may also be terminated by the Fund by action of the
Board of Trustees or by a vote of a majority of the outstanding voting
securities of such Fund upon sixty (60) days' written notice to Sub-Adviser by
the Fund without payment of any penalty.
Manager and Sub-Adviser have entered into an agreement that provides,
among other things, that if Manager or the Fund terminates or fails to renew
this Agreement other than for cause (as defined in the agreement), Manager shall
resign as adviser to the Fund and shall not be reinstated as investment adviser
or sub-adviser to the Fund. The Fund acknowledges that the terms of such
agreement have been fully described to the Board of Trustees.
The terms "assignment" and "vote of a majority of the outstanding voting
securities" shall have the meanings set forth in the 1940 Act and the rules and
regulations thereunder.
Termination of this Agreement shall not affect the right of Sub-Adviser to
receive payments on any unpaid balance of the compensation described in Section
4 hereof earned prior to such termination and for any additional period during
which Sub-Adviser serves as such for the Fund, subject to applicable law.
9. Notice. Any notice under this Agreement shall be sufficient in all
respects if given in writing and delivered by commercial courier providing proof
of delivery or sent by facsimile and addressed as follows or addressed to such
other person or address as such party may designate for receipt of such notice.
If to Manager or Fund: If to Sub-Adviser:
Macquarie/First Trust Global Infrastructure /Utilities Macquarie Infrastructure Fund Adviser, LLC
Dividend & Income Fund 000 0xx Xxxxxx, 00xx Xxxxx
First Trust Advisors L.P. Xxx Xxxx, Xxx Xxxx 00000
000 X. Xxxxxxx Xxxxx, Xxxxx 000 Xxxxxxxxx: General Counsel
Xxxxxxx, Xxxxxxxx 00000
Attention: Secretary
If by Facsimile: (000) 000-0000
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10. Limitations on Liability. All parties hereto are expressly put on
notice of the Fund'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 Fund by the Fund's officers in their
capacity as officers and not individually and is not binding upon any of the
Trustees, officers, or shareholders of the Fund individually but the obligations
imposed upon the Fund by this Agreement are binding only upon the assets and
property of the Fund, and persons dealing with the Fund must look solely to the
assets of the Fund for the enforcement of any claims.
11. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. This
Agreement will be binding upon and shall inure to the benefit of the parties
hereto and their respective successors.
12. Applicable Law. This Agreement shall be construed in accordance with
applicable federal law and (except as to Section 10 hereof which shall be
construed in accordance with the laws of Massachusetts) the laws of the State of
Illinois.
13. Amendment, Etc. This Agreement may only be amended, or its provisions
modified or waived, in a writing signed by the party against which such
amendment, modification or waiver is sought to be enforced.
14. Authority. Each party represents to the others that it is duly
authorized and fully empowered to execute, deliver and perform this Agreement.
The Fund represents that engagement of Sub-Adviser has been duly authorized by
the Fund and is in accordance with the Fund's Declaration of Trust and other
governing documents of the Fund.
15. Severability. Each provision of this Agreement is intended to be
severable from the others so that if any provision or term hereof is illegal or
invalid for any reason whatsoever, such illegality or invalidity shall not
affect the validity of the remaining provisions and terms hereof; provided,
however, that the provisions governing payment of the Management Fee described
in Section 4 hereof are not severable.
16. Entire Agreement. This Agreement constitutes the sole and entire
agreement of the parties with regard to the subject matter of this Agreement.
Any written or oral agreements, statements, promises, negotiations or
representations not expressly set forth in this Agreement are of no force and
effect.
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IN WITNESS WHEREOF, the Fund, Manager and Sub-Adviser have caused this
Agreement to be executed as of the day and year first above written.
FIRST TRUST ADVISORS L.P.
/s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx, Chief Executive Officer
MACQUARIE/FIRST TRUST GLOBAL
INFRASTRUCTURE/UTILITIES
DIVIDEND & INCOME FUND
/s/ Xxxxx X. Xxxxx
----------------------------------
Xxxxx X. Xxxxx, President
MACQUARIE CAPITAL INVESTMENT MANAGEMENT LLC
/s/ Xxxxxxx X. Butt
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By: Xxxxxxx X. Butt
Title: President
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