For period
ending
January 31,
2017
Exhibit 77Q1
File number
811-8764
SUB-ADVISORY AGREEMENT
Agreement dated as of November 30, 2016
between UBS Asset Management (Americas) Inc.
("UBS AM"), a Delaware corporation, and Sapience
Investments, LLC ("Sub- Adviser"), a Delaware
limited liability company (the "Agreement").
RECITALS
(1) UBS AM has entered into a Management
Agreement dated as of August 1, 2008
("Management Agreement"), with PACE(r) Select
Advisors Trust ("Trust"), an open-end management
investment company registered under the
Investment Company Act of 1940, as amended
("1940 Act"), with respect to PACE(r) Small/Medium
Co Value Equity Investments ("Portfolio"); and
(2) UBS AM is authorized to retain one or more sub-
advisers to furnish certain investment advisory
services to UBS AM and the Portfolio;
(3) UBS AM desires to retain the Sub-Adviser to
furnish certain investment advisory services to UBS
AM and the Portfolio or a designated portion of the
assets ("Segment") of the Portfolio; and
(4) The Sub-Adviser is willing to furnish such
services;
Now therefore, in consideration of the premises and
mutual covenants herein contained, UBS AM and
the Sub-Adviser agree as follows:
1. Appointment. UBS AM hereby appoints the
Sub-Adviser as an investment sub-adviser with
respect to the Portfolio or Segment for the period
and on the terms set forth in this Agreement. The
Sub-Adviser accepts that appointment and agrees
to render the services herein set forth, for the
compensation herein provided.
2. Duties as Sub-Adviser.
(a) Subject to the supervision and direction of the
Trust's Board of Trustees (the "Board") and review
by UBS AM, and any written guidelines adopted by
the Board or UBS AM the Sub-Adviser will provide a
continuous investment program for the Portfolio or
Segment, including investment research and
discretionary management with respect to all
securities and investments and cash equivalents in
the Portfolio or Segment. The Sub-Adviser will
determine from time to time what investments will
be purchased, retained or sold by the Portfolio or
Segment. The Sub-Adviser will be responsible for
placing purchase and sell orders for investments and
for other related transactions for the Portfolio or
Segment. The Sub-Adviser understands that the
Portfolio's assets need to be managed so as to
permit the Portfolio to qualify or to continue to
qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code, as
amended ("Code"). The Sub-Adviser will provide
services under this Agreement in accordance with
the Portfolio's investment objective, policies and
restrictions as stated in the Trust's currently
effective registration statement under the 1940 Act,
and any amendments or supplements thereto
("Registration Statement"). The Sub-Adviser, on
each business day, shall provide UBS AM and the
Trust's custodian such information as UBS AM and
the Trust's custodian may reasonably request
relating to all transactions concerning the Portfolio
or Segment.
UBS AM hereby designates and appoints the Sub-
Adviser as its and the Portfolio's limited purpose
agent and attorney-in-fact, without further prior
approval of UBS AM (except as expressly provided
for herein or as may be required by law) to make and
execute, in the name and on behalf of the Portfolio,
all agreements, instruments and other documents
and to take all such other action which the Sub-
Adviser considers necessary or advisable to carry out
its duties hereunder. By way of example and not by
way of limitation, in connection with any purchase
for the Portfolio or Segment of securities or
instruments that are not registered under the U.S.
Securities Act of 1933, as amended (the "Securities
Act"), the Sub-Adviser shall have the full power and
authority, among other things, to: (i) commit to
purchase such securities for the Portfolio on the
terms and conditions under which such securities
are offered; (ii) execute such account opening and
other agreements, instruments and documents
(including, without limitation, purchase agreements,
subscription documents, ISDA and other swap and
derivative documents), and make such
commitments, as may be required in connection
with the purchase and sale of such securities or
instruments; (iii) represent that the Portfolio is an
"accredited investor" as defined in Rule 501 (a) of
Regulation D under the Securities Act and a
"Qualified Institutional Buyer" as defined in Rule
144A (a) (1) (i) under the Securities Act; and (iv)
commit that such securities will not be offered or
sold by the Portfolio except in compliance with the
registration requirements of the Securities Act or an
exemption therefrom. This power-of-attorney is a
continuing power-of-attorney and shall remain in
full force and effect until revoked by UBS AM or the
Trust in writing, but any such revocation shall not
affect any transaction initiated prior to receipt by
the Sub-Adviser of such notice.
When investing in non-US securities, the Sub-
Adviser is responsible for identifying and complying
with all applicable laws and regulations of the
jurisdiction in which the security is traded. The Sub-
Adviser shall use the degree of care, diligence and
skill that a reasonably prudent investment manager
would exercise under the circumstances not to
establish or add to existing positions in securities
that are subject to any applicable foreign ownership
limits or levels ("FOL'') at a time when it is
reasonably foreseeable that such purchases will
have to be sold due to FOL limits or levels.
(b) The Sub-Adviser agrees that it will not consult
with any other sub-adviser ("Other Sub-Adviser") for
the Trust or Portfolio concerning any transaction by
the Portfolio or Segment in securities or other assets,
including (i) the purchase by the Portfolio or
Segment of a security issued by the Other Sub-
Adviser, or an affiliate of the Other Sub-Adviser, to
the Trust or Portfolio except as permitted by the
1940 Act or (ii) transactions by the Portfolio or
Segment in any security for which the Other Sub-
Adviser, or its affiliate, is the principal underwriter.
(c) Unless otherwise instructed by UBS AM or the
Trust, the Sub-Adviser agrees that it will be
responsible for voting proxies of issuers of securities
held by the Portfolio or Segment. The Sub-Adviser
further agrees that it will adopt written proxy voting
procedures that shall comply with the requirements
of the 1940 Act and the Investment Advisers Act of
1940, as amended ("Advisers Act") ("Proxy Voting
Policy"), and that shall be acceptable to the Board.
The Sub-Adviser shall also provide its Proxy Voting
Policy, and if requested by UBS AM, a summary of
such Proxy Voting Policy for inclusion in the Trust's
registration statement, and will provide UBS AM
with any material amendment to the Proxy Voting
Policy within a reasonable time after such
amendment has taken effect. The Sub-Adviser
further agrees that it will provide the Board on or
before August 1st of each year, or more frequently
as the Board may reasonably request, with a written
report of the proxies voted during the most recent
12-month period ending June 30, or such other
period as the Board may designate, in a format that
shall comply with the 1940 Act and that shall be
acceptable to the Board.
(d) The Sub-Adviser agrees that upon the request of
UBS AM or the Board, Sub-Adviser shall exercise the
rights incident to the securities held by the Portfolio
or Segment in the context of a bankruptcy or other
reorganization. The Sub-Adviser further agrees that
it will keep UBS AM fully informed about any such
actions that it intends to take.
(e) The Sub-Adviser agrees that it will place orders
with brokers in accordance with its best execution
policies, as disclosed in the Sub-Adviser's Form ADV
Registration Statement ("Form ADV") on file with
the Securities and Exchange Commission (the
"SEC"), taking into account best price as an
important factor in this decision, provided that, on
behalf of the Portfolio or Segment, the Sub-Adviser
may, in its discretion, use brokers that provide the
Sub-Adviser with research, analysis, advice and
similar services to execute portfolio transactions on
behalf of the Portfolio or Segment, and the Sub-
Adviser may pay to those brokers in return for
brokerage and research services a higher
commission than may be charged by other brokers,
subject to the Sub-Adviser's determination in good
faith that such commission is reasonable in terms
either of the particular transaction or of the overall
responsibility of the Sub-Adviser to the Portfolio or
Segment and its other clients and that the total
commissions paid by the Portfolio or Segment will
be reasonable in relation to the benefits to the
Portfolio or Segment over the long term. In no
instance will portfolio securities be purchased from
or sold to UBS AM or the Sub-Adviser, the Trust's
principal underwriter, or any affiliated person
thereof specifically identified by UBS AM to the
Sub-Adviser, except in accordance with the federal
securities laws and the rules and regulations
thereunder. The Sub-Adviser may aggregate sales
and purchase orders with respect to the assets of
the Portfolio or Segment with similar orders being
made simultaneously for other accounts advised by
the Sub-Adviser or its affiliates. Whenever the Sub-
Adviser simultaneously places orders to purchase or
sell the same security on behalf of the Portfolio or
Segment and one or more other accounts advised
by the Sub-Adviser, the orders will be allocated as to
price and amount among all such accounts in a
manner believed to be equitable over time to each
account. UBS AM recognizes that in some cases this
procedure may adversely affect the results obtained
for the Portfolio or Segment.
Subject to the Sub-Adviser's obligations to seek best
execution, UBS AM agrees that the Sub-Adviser, in
its sole discretion, may place transactions on behalf
of the Portfolio or Segment and the Trust with any
broker-dealer deemed to be an affiliate (including
affiliated FCMs) of the Sub-Adviser (the "Affiliated
Broker-Dealers") so long as such transactions are
effected in conformity with the requirements
(including any applicable exemptions and
administrative interpretations set forth in Part 2A of
the Sub-Adviser's Form ADV) of Section 11(a)(1)(H)
of the Securities Exchange Act of 1934 (the "1934
Act"), and in compliance with Rules 17e-1 or 10f-3
under the 1940 Act or other applicable rules and the
Trust's policies and procedures thereunder. In all
such dealings, the Affiliated Broker-Dealers shall be
authorized and entitled to retain any commissions,
remuneration or profits which may be made in such
transactions and shall not be liable to account for
the same to UBS AM, the Portfolio or the Trust. In
the event Sub-Adviser becomes affiliated (as
deemed under the federal securities laws) with a
broker-dealer during the term of this Agreement,
Sub-Adviser shall obtain the approval of the Trust's
Board of Trustees prior to commencement of
transactions with such broker-dealer on behalf of
the Portfolio or the Trust.
UBS AM further authorizes the Sub-Adviser and its
Affiliated Broker-Dealers to execute agency cross
transactions ( "Cross Transactions") on behalf of the
Portfolio and the Trust. Cross Transactions are
transactions which may be effected by the Affiliated
Broker-Dealers acting for both the Portfolio or the
Trust and the counterparty to the transaction. Cross
Transactions enable the Sub-Adviser to purchase or
sell a block of securities for the Portfolio or the Trust
at a set price and possibly avoid an unfavorable price
movement that may be created through entrance
into the market with such purchase or sale order. As
such, the Sub-Adviser believes that Cross
Transactions can provide meaningful benefits for
the Portfolio and the Trust and its clients generally.
UBS AM, the Portfolio and the Trust should be
aware, however, that in a Cross Transaction an
Affiliated Broker-Dealer will be receiving
commissions from both sides of the trade and,
therefore, there is a potentially conflicting division
of loyalties and responsibilities. Sub-Adviser shall
effect such Cross Transactions in compliance with
Rule 206(3)-2 under the Advisers Act, Rule 17a-7
under the 1940 Act, and any other applicable
provisions of the federal securities laws and shall
provide UBS AM with periodic reports describing
such agency cross transactions. UBS AM
understands that the authority of the Sub-Adviser to
execute agency Cross Transactions for the Portfolio
is terminable at will without penalty, effective upon
receipt by the Sub-Adviser of written notice from
UBS AM, and that the failure to terminate such
authorization will result in its continuation.
(f) The Sub-Adviser shall maintain separate detailed
records of all matters pertaining to the Portfolio or
Segment, including, without limitation, brokerage
and other records of all securities transactions. Any
records required to be maintained and preserved
pursuant to the provisions of Rule 31a-1 and Rule
31a-2 promulgated under the 1940 Act that are
prepared or maintained by the Sub-Adviser on
behalf of the Trust are the property of the Trust and
will be surrendered promptly to the Trust upon
request. The Sub-Adviser further agrees to preserve
for the periods prescribed in
Rule 31a-2 under the 1940 Act the records required
to be maintained under Rule 31a-1 under the 1940
Act, and will furnish the Board and UBS AM with
such periodic and special reports as the Board or
UBS AM may request.
(g) At such times as shall be reasonably requested
by the Board or UBS AM, the Sub-Adviser will
provide the Board and UBS AM with economic and
investment analyses and reports as well as quarterly
reports setting forth the performance of the
Portfolio or Segment and make available to the
Board and UBS AM any economic, statistical and
investment services that the Sub-Adviser normally
makes available to its institutional or other
customers.
(h) In accordance with procedures adopted by the
Board, as amended from time to time, the Sub-
Adviser is responsible for assisting the Board and
UBS AM in the fair valuation of all portfolio
securities in the Portfolio or Segment and will use its
reasonable efforts to arrange for the provision of a
price or prices from one or more parties
independent of the Sub-Adviser for each portfolio
security for which the custodian does not obtain
prices in the ordinary course of business from an
automated pricing service.
The Sub-Adviser also will provide such information
or perform such additional acts as are customarily
performed by a Sub-Adviser and may be required
for the Trust or UBS AM to comply with their
respective obligations under applicable federal
securities laws, including, without limitation, the
1940 Act, the Advisers Act, the 1934 Act, the
Securities Act, and any rule or regulation thereunder.
3. Further Duties. In all matters relating to the
performance of this Agreement, the Sub-Adviser
will seek to act in conformity with the Trust's Trust
Instrument, By-Laws and Registration Statement,
the Trust's policies and procedures for compliance
by the Trust with the Federal Securities Laws (as
that term is defined in Rule 38a-1 under the 1940
Act) provided to the Sub-Adviser (together, the
"Trust Compliance Procedures") and with the
written instructions and written directions of the
Board and UBS AM, and will comply with the
requirements of the 1940 Act, and the Advisers Act,
and the rules under each, the Code, and all other
federal and state laws and regulations applicable to
the Trust and the Portfolio. UBS AM agrees to
provide to the Sub-Adviser copies of the Trust's
Trust Instrument, By-Laws, Registration Statement,
Trust's Compliance Procedures, written instructions
and directions of the Board and UBS AM, and any
amendments or supplements to any of these
materials as soon as practicable after such materials
become available. UBS AM further agrees during
the term of this Agreement to identify to the Sub-
Adviser in writing any broker-dealers that are
affiliated with UBS AM (other than UBS Financial
Services Inc., and UBS Asset Management (US) Inc.).
In order to assist the Trust and the Trust's Chief
Compliance Officer (the "Trust CCO") to satisfy the
requirements contained in Rule 38a-1 under the
1940 Act, the Sub-Adviser shall provide to the Trust
CCO: (i) direct access to the Sub-Adviser's chief
compliance officer and/or other senior compliance
personnel, as reasonably requested by the Trust
CCO; (ii) quarterly reports confirming that the Sub-
Adviser has complied with the Trust Compliance
Procedures in managing the Portfolio or Segment;
and (iii) quarterly certifications that there were no
Material Compliance Matters (as that term is
defined by Rule 38a-1(e)(2)) that arose under the
Trust Compliance Procedures that related to the
Sub-Adviser's management of the Portfolio or
Segment.
The Sub-Adviser shall promptly provide the Trust
CCO with copies of: (i) the Sub-Adviser's policies
and procedures for compliance by the Sub-Adviser
with the Federal Securities Laws (together, the
"Sub-Adviser Compliance Procedures"), and (ii) any
material changes to the Sub-Adviser Compliance
Procedures. The Sub-Adviser shall cooperate fully
with the Trust CCO so as to facilitate the Trust
CCO's performance of the Trust CCO's
responsibilities under Rule 38a-1 to review, evaluate
and report to the Trust's Board on the operation of
the Sub-Adviser Compliance Procedures, and shall
promptly report to the Trust CCO any Material
Compliance Matter arising under the Sub-Adviser
Compliance Procedures involving the Portfolio or
Segment. The Sub-Adviser shall provide to the
Trust CCO: (i) quarterly reports confirming the Sub-
Adviser's compliance with the Sub-Adviser
Compliance Procedures in managing the Portfolio or
Segment, and (ii) certifications that there were no
Material Compliance Matters involving the Sub-
Adviser that arose under the Sub-Adviser
Compliance Procedures that affected the Portfolio
or Segment. At least annually, the Sub-Adviser shall
provide a certification to the Trust CCO to the effect
that the Sub-Adviser has in place and has
implemented policies and procedures that are
reasonably designed to ensure compliance by the
Sub-Adviser with any applicable Federal Securities
Laws, subject to such interpretations as may be
contained in the Trust Compliance Procedures.
The Sub-Adviser will promptly provide UBS AM with
information (including information that is required
to be disclosed in the Trust's registration statement)
with respect to the portfolio managers responsible
for the Portfolio or Segment and any changes in the
portfolio managers responsible for the Portfolio or
Segment.
The Sub-Adviser will promptly notify UBS AM of any
pending investigation, material litigation,
administrative proceeding or any other significant
regulatory inquiry.
The Sub-Adviser will cooperate promptly and fully
with UBS AM and/or the Trust in responding to any
regulatory or compliance examinations or
inspections (including information requests) relating
to the Trust, the Portfolio or UBS AM brought by
any governmental or regulatory authorities having
appropriate jurisdiction (including, but not limited to,
the SEC).
4. Expenses. During the term of this Agreement,
the Sub-Adviser will bear all expenses incurred by it
in connection with its services under this Agreement.
The Sub-Adviser shall not be responsible for any
expenses (including brokerage and other
transactional costs) incurred by the Trust, the
Portfolio or UBS AM, except as otherwise
specifically provided herein.
Upon request by UBS AM, Sub-Adviser agrees to
reimburse UBS AM or the Trust for costs associated
with generating and distributing any Registration
Statement (as defined herein) for when the Sub-
Adviser is given a copy of a draft of such
Registration Statement and fails to promptly
disclose to UBS AM facts then known to the Sub-
Adviser or its personnel that would require
disclosure (or amendments to disclosure) in the
Fund's Registration Statement in time for such
disclosure or amendments to disclosure to be
included in such Registration Statement. The Sub-
Adviser shall bear all reasonable expenses of the
Trust, if any, arising out of an assignment or change
in control of the Sub-Adviser.
5. Compensation.
(a) For the services provided and the expenses
assumed by the Sub-Adviser pursuant to this
Agreement, UBS Global AM, not the Portfolio, will
pay to the Sub-Adviser a fee, computed daily and
payable monthly, at an annual rate of % of the
average daily net assets of the Portfolio or Segment
allocated to its management (computed in the
manner specified in the Management Agreement),
and will provide the Sub-Adviser with a schedule
showing the manner in which the fee was computed.
If the Sub-Adviser is managing a Segment, its fees
will be based on the value of the assets of the
Portfolio within the Sub-Adviser's Segment.
(b) The fee shall be accrued daily and payable
monthly to the Sub-Adviser on or before the last
business day of the next succeeding calendar month.
(c) For those periods in which UBS AM has agreed to
waive all or a portion of its management fee, UBS
AM may ask the Sub-Adviser to waive the same
proportion of its fees, but the Sub-Adviser is under
no obligation to do so.
(d) If this Agreement becomes effective or
terminates before the end of any month, the fee for
the period from the effective date to the end of the
month or from the beginning of such month to the
date of termination, as the case may be, shall be
pro-rated according to the proportion which such
period bears to the full month in that such
effectiveness or termination occurs.
6. Limitation of Liability.
(a) The Sub-Adviser shall not be liable for any error
of judgment or mistake of law or for any loss
suffered by the Portfolio, the Trust or its
shareholders or by UBS AM in connection with the
matters to which this Agreement relates, except a
loss resulting from willful misfeasance, bad faith or
negligence on its part in the performance of its
duties or from reckless disregard by it of its
obligations and duties under this Agreement.
(b) In no event will the Sub-Adviser have any
responsibility for any other portfolio of the Trust, for
any portion of the Portfolio not managed by the
Sub-Adviser or for the acts or omissions of any
Other Sub-Adviser to the Trust or Portfolio. In
particular, in the event the Sub-Adviser shall
manage only a Segment of the Portfolio, the Sub-
Adviser shall have no responsibility for the
Portfolio's being in violation of any applicable law or
regulation or investment policy or restriction
applicable to the Portfolio as a whole or for the
Portfolio's failing to qualify as a regulated
investment company under the Code, if the
securities and other holdings of the Segment of the
Portfolio managed by the
Sub-Adviser are such that such Segment would not
be in such violation or fail to so qualify if such
Segment were deemed a separate series of the
Trust or a separate regulated investment company
under the Code, unless such violation was due to the
Sub-Advisers failure to comply with written
guidelines adopted by the Board or UBS AM and
provided to the Sub-Adviser.
Nothing in this section shall be deemed a limitation
or waiver of any obligation or duty that may not by
law be limited or waived.
7. Representations of Sub-Adviser. The Sub-
Adviser represents, warrants and agrees as follows:
(a) The Sub-Adviser (i) is registered as an
investment adviser under the Advisers Act and will
continue to be so registered for so long as this
Agreement remains in effect; (ii) is not prohibited by
the 1940 Act or the Advisers Act from performing
the services contemplated by this Agreement; (iii)
has met, and will seek to continue to meet for so
long as this Agreement remains in effect, any other
applicable federal or state requirements, or the
applicable requirements of any regulatory or
industry
self-regulatory agency, necessary to be met in order
to perform the services contemplated by this
Agreement; (iv) has the authority to enter into and
perform the services contemplated by this
Agreement; and (v) will promptly notify UBS AM of
the occurrence of any event that would disqualify
the Sub-Adviser from serving as an investment
adviser of an investment company pursuant to
Section 9(a) of the 1940 Act or otherwise.
(b) The Sub-Adviser has adopted a written code of
ethics complying with the requirements of Rule 17j-1
under the 1940 Act and Rule 204A-1 under the
Advisers Act and will provide UBS AM and the Board
with a copy of such code of ethics, together with
evidence of its adoption. Within fifteen days of the
end of the last calendar quarter of each year that
this Agreement is in effect, a duly authorized officer
of the Sub-Adviser shall certify to UBS AM that the
Sub-Adviser has complied with the requirements of
Rule 17j-1 during the previous year and that there
has been no material violation of the Sub-Adviser's
code of ethics or, if such a violation has occurred,
that appropriate action was taken in response to
such violation. Upon the written request of UBS AM,
the Sub-Adviser shall permit UBS AM, its employees
or its agents to examine the reports required to be
made by the Sub-Adviser pursuant to Rule 17j-
1(c)(2) and all other records relevant to the Sub-
Adviser's code of ethics.
(c) The Sub-Adviser has provided UBS AM with a
copy of its Form ADV, as most recently filed with the
SEC, and promptly will furnish a copy of all
amendments to UBS AM at least annually.
(d) The Sub-Adviser will notify UBS AM of any
change of control of the Sub-Adviser, including any
change of its general partners or 25% shareholders
or 25% limited partners, as applicable, and any
changes in the key personnel who are either the
portfolio manager(s) of the Portfolio or senior
management of the Sub-Adviser, in each case prior
to or as soon after such change as possible.
(e) The Sub-Adviser agrees that neither it nor any of
its affiliates, will in any way refer directly or
indirectly to its relationship with the Trust, the
Portfolio, UBS AM or any of their respective
affiliates in offering, marketing or other promotional
materials without the express written consent of
UBS AM.
(f) The Sub-Adviser hereby represents that it has
implemented policies and procedures that will
prevent the disclosure by it, its employees or its
agents of the Trust's portfolio holdings to any
person or entity other than UBS AM, the Trust's
custodian, or other persons expressly designated by
UBS AM. The Sub-Adviser further represents that it
implemented policies and procedures to prevent it,
its employees and agents from trading on the basis
of any material non-public information provided by
UBS AM, the Trust, their affiliates or agents.
(g) the Sub-Adviser hereby represents, warrants and
agrees that: (1) it will register with the Commodity
Futures Trading Commission (the "CFTC") as a
commodity trading advisor and become a member
of the National Futures Association (the "NFA"), if
required in light of the nature of its activities, and
will continue to be so registered, if required, for so
long as this Agreement remains in effect; (2) it will
comply with the Commodity Exchange Act (the
"CEA") and the rules of the CFTC and the NFA to the
extent applicable; and (3) it will provide all
information reasonably required by UBS AM to fulfill
any disclosure and reporting obligations of UBS AM
with respect to the Portfolio under the CEA and the
rules of the CFTC and the NFA.
(h) The Sub-Adviser hereby represents and warrants
that it has (i) a sanctions policy in place and
communicated to all employees and (ii) adequate
sanctions compliance controls reasonably designed
to ensure compliance with US, UN, EU and Swiss
sanctions laws and regulations and local applicable
sanctions laws (the "Sanctions Laws"). The Sub-
Adviser further represents and warrants that (i) it
will not undertake investments or engage in activity
that involves either directly or indirectly countries,
regimes, jurisdictions or sanctioned parties
(individuals / entities) subject to any Sanctions Laws
and (ii) will not invest in securities / issuers
mentioned on the "Sanctions Securities List (SSSL)"
and the list of "Companies Verifiably Involved in
Controversial Weapons (Ethix List)" provided by
UBS and updated from time to time.
8. Services Not Exclusive. The services furnished by
the Sub-Adviser hereunder are not to be deemed
exclusive, and except as the Sub-Adviser may
otherwise agree in writing, the Sub-Adviser shall be
free to furnish similar services to others so long as its
services under this Agreement are not impaired
thereby. Nothing in this Agreement shall limit or
restrict the right of any director, officer or employee
of the Sub-Adviser, who may also be a trustee,
officer or employee of the Trust, to engage in any
other business or to devote his or her time and
attention in part to the management or other
aspects of any other business, whether of a similar
nature or a dissimilar nature. Nothing in this
Agreement shall impose upon the Sub-Adviser any
obligation to purchase or sell on behalf of the
Portfolio, any security (including long and short
positions) which the Sub-Adviser, or its affiliates, or
its or their owners, directors, officers or employees
may purchase or sell for its or their own account(s)
or for the account of any other client. UBS AM
acknowledges that the Sub-Adviser's ability, and
that of its affiliates, to effect or recommend
transactions may be restricted by applicable
regulatory requirements in the United States and
elsewhere or by its or their internal policies designed
to comply with such requirements. Consequently,
there may be periods when the Sub-Adviser may
not initiate or recommend certain types of
transactions in certain investments when the Sub-
Adviser or its affiliates are performing services or
when aggregated position limits have been reached,
and Client will not be advised of that fact.
9. Duration and Termination.
(a) This Agreement shall become effective upon the
date first above written, provided that this
Agreement shall not take effect unless it has first
been approved (i) by a vote of a majority of those
trustees of the Trust who are not parties to this
Agreement or interested persons of any such party
("Independent Trustees"), cast in person at a
meeting called for the purpose of voting on such
approval, and (ii) by vote of a majority of the
Portfolio's outstanding voting securities, unless UBS
AM has authority to enter into this Agreement
pursuant to exemptive relief from the SEC without a
vote of the Portfolio's outstanding voting securities.
(b) Unless sooner terminated as provided herein,
this Agreement shall continue in effect for two years
from its effective date. Thereafter, if not terminated,
this Agreement shall continue automatically for
successive periods of twelve months each, provided
that such continuance is specifically approved (i) by
a vote of a majority of the Independent Trustees,
cast in person at a meeting called for the purpose of
voting on such purpose; and (ii) by the Board or by a
vote of a majority of the outstanding voting
securities of the Portfolio.
(c) Notwithstanding the foregoing, this Agreement
may be terminated at any time, without the
payment of any penalty, by vote of the Board or by a
vote of a majority of the outstanding voting
securities of the Portfolio on 30 days' written notice
to the Sub-Adviser. This Agreement may also be
terminated, without the payment of any penalty, by
UBS AM; (i) upon 120 days' written notice to the
Sub-Adviser; (ii) upon material breach by the Sub-
Adviser of any of the representations, warranties
and agreements set forth in Paragraph 7 of this
Agreement; or (iii) immediately if, in the reasonable
judgment of UBS AM, the Sub-Adviser becomes
unable to discharge its duties and obligations under
this Agreement, including circumstances such as
financial insolvency of the Sub- Adviser or other
circumstances that could adversely affect the
Portfolio. The Sub-Adviser may terminate this
Agreement at any time, without the payment of any
penalty, on 120 days' written notice to UBS AM. This
Agreement will terminate automatically in the event
of its assignment or upon termination of the
Investment Advisory Agreement, as it relates to this
Portfolio.
10. Amendment of this Agreement. No provision of
this Agreement may be changed, waived,
discharged or terminated orally, but only by an
instrument in writing signed by the party against
whom enforcement of the change, waiver,
discharge or termination is sought. To the extent
required by applicable law, no amendment of this
Agreement shall be effective until approved (i) by a
vote of a majority of the Independent Trustees, and
(ii) if the terms of this Agreement shall have
changed, by a vote of a majority of the Portfolio's
outstanding voting securities (except in the case of
(ii), pursuant to the terms and conditions of the SEC
order permitting it to modify the Agreement
without such vote).
11. Governing Law. This Agreement shall be
construed in accordance with the 1940 Act and the
laws of the State of New York, without giving effect
to the conflicts of laws principles thereof. To the
extent that the applicable laws of the State of New
York conflict with the applicable provisions of the
1940 Act, the latter shall control.
12. Confidentiality. The Sub-Adviser will treat as
proprietary and confidential any information
obtained in connection with its duties hereunder,
including all records and information pertaining to
the Portfolio and its prior, present or potential
shareholders. The Sub-Adviser will not use such
information for any purpose other than the
performance of its responsibilities and duties
hereunder. Such information may not be disclosed
except after prior notification to and approval in
writing by the Portfolio or if such disclosure is
expressly required or requested by applicable
federal or state or other regulatory authorities.
13. Use of Name.
(a) It is understood that the names UBS and PACE
or any derivative thereof or logo associated with
that name is the valuable property of UBS AM
and/or its affiliates, and that Sub-Adviser has the
right to use such name (or derivative or logo) only
with the approval of UBS AM and only so long as
UBS AM is Manager to the Trust and/or the Portfolio.
(b) It is understood that the name Sapience or any
derivative thereof or logo associated with those
names, are the valuable property of the Sub-Adviser
and its affiliates and that the Trust and/or the
Portfolio have the right to use such names (or
derivative or logo) in offering materials of the Trust
with the approval of the Sub-Adviser and for so long
as the Sub-Adviser is a Sub-Adviser to the Portfolio.
Upon termination of this Agreement, the Trust shall
forthwith cease to use such names (or derivatives or
logo).
14. 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. If any provision of this Agreement shall be
held or made invalid by a court decision, statute,
rule or otherwise, the remainder of this Agreement
shall not be affected thereby. This Agreement shall
be binding upon and shall inure to the benefit of the
parties hereto and their respective successors. As
used in this Agreement, the terms majority of the
outstanding voting securities, affiliated person,
interested person, assignment, broker, investment
adviser, net assets, sale, sell and security shall have
the same meanings as such terms have in the 1940
Act, subject to such exemption as may be granted
by the SEC by any rule, regulation or order. Where
the effect of a requirement of the federal securities
laws reflected in any provision of this Agreement is
made less restrictive by a rule, regulation or order of
the SEC, whether of special or general application,
such provision shall be deemed to incorporate the
effect of such rule, regulation or order. This
Agreement may be signed in counterpart.
15. Notices. Any notice herein required is to be in
writing and is deemed to have been given to the
Sub-Adviser or UBS AM upon receipt of the same at
their respective addresses set forth below. All
written notices required or permitted to be given
under this Agreement will be delivered by personal
service, by postage mail return receipt requested or
by facsimile machine or a similar means of same
delivery which provides evidence of receipt (with a
confirming copy by mail as set forth herein). All
notices provided to UBS AM will be sent to the
attention of: General Counsel, UBS Asset
Management (Americas) Inc., 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, XX 00000. All notices
provided to the Sub-Adviser will be sent to the
attention of: Xxxxxx Xxxxxxx, Chief Compliance
Officer.
In witness whereof, the parties hereto have caused
this instrument to be executed by their duly
authorized signatories as of the date and year first
above written.
UBS Asset Management (Americas) Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxxxxx: Xxx Xxxx, XX 00000
By: /s/Xxxx Xxxxxxx By: /s/Xxxxxxx XxxXxxxxx
Name: Xxxx Xxxxxxx Name: Xxxxxxx XxxXxxxxx
Title: Director Title: Executive Director
Sapience Investments, LLC
000 Xxxxxxx Xxxxxx Xxxxx - Xxxxx 000
Xxxxxx: Xxxxxxx Xxxxx, XX 00000
By:____________ By: /s/Xxxxx Xxxxx
Name: Name: Xxxxx Xxxxx
Title: Title: CEO/CIO
17