For period ending January 31, 2010 Exhibit 77Q1
File number 811-8764
Sub-Advisory Agreement
between
UBS Global Asset Management (Americas) Inc.
And
Delaware Management Company, a series of
Delaware Management Business Trust
Agreement dated as of January 4, 2010, between UBS Global Asset Management
(Americas) Inc. (UBS Global AM), a Delaware corporation, and Delaware
Management Company, a series of Delaware Management Business Trust, a
Delaware business trust (Sub-Adviser) (the Agreement).
Recitals
(1) UBS Global AM has entered into a Management Agreement dated as of August
1, 2008 ( Management Agreement) with UBS PACE 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 the UBS PACE Large
Co Growth Equity Investments (Portfolio);
(2) UBS Global AM desires to retain the Sub-Adviser to furnish certain
investment advisory services to UBS Global AM and the Portfolio or a
designated portion of the assets (Segment) of the Portfolio; and
(3) The Sub-Adviser is willing to furnish such services;
Now, therefore, in consideration of the premises and mutual covenants herein
contained, the parties agree as follows:
1. Appointment. UBS Global AM hereby appoints the Sub-Adviser as an
investment Sub-Adviser with respect to 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 Trusts Board of Trustees
(the Board) and review by UBS Global AM, and any written guidelines adopted by
the Board or UBS Global 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 Portfolios 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 Portfolios
investment objective, policies and restrictions as stated in the Trusts
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 Global AM and the Trusts custodian
such information as UBS Global Americas and the Trusts custodian may reasonably
request relating to all transactions concerning the Portfolio or Segment.
(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 Global 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 Global AM, a summary of such Proxy Voting Policy for inclusion in the
Trusts registration statement, and will provide UBS Global 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, in placing orders with brokers, it will
obtain the best net result in terms of price and execution; provided that, on
behalf of the Portfolio or Segment, the Sub-Adviser may, in its discretion,
use brokers who 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-Advisers determining 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 over the long term. In no instance will portfolio
securities be purchased from or sold to UBS Global AM or the Sub-Adviser,
the Trusts principal underwriter, or any affiliated person thereof, except
in accordance with the federal securities laws and the rules and regulations
thereunder. The Sub-Adviser may aggregate sales and purchase orders of 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 Global AM recognizes that in some cases this
procedure may adversely affect the results obtained for the Portfolio or
Segment.
Subject to the Sub-Advisers obligations to seek best execution, UBS Global
AM agrees that the Sub-Adviser, in its sole discretion, may place transactions
on behalf of the Portfolio and the Trust or with any broker-dealer deemed to
be an affiliate 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
II of the Sub-Advisers Form ADV Registration Statement on file with the
Securities and Exchange Commission (Form ADV)) of Section 11(a)(1)(H) of the
Securities Exchange Act of 1934, and in compliance with Rules 17e-1 or 10f-3
under the 1940 Act or other applicable rules and the Trusts 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 Global AM, the Portfolio or the Trust.
UBS Global AM further authorizes the Sub-Adviser and its Affiliated
Broker-Dealers to execute agency cross transactions (the 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 Global 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 and any other applicable provisions of the
federal securities laws and shall provide UBS Global Americas with periodic
reports describing such agency cross transactions.
(e) 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.
(f) At such times as shall be reasonably requested by the Board or UBS
Global AM, the Sub-Adviser will provide the Board and UBS Global 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 Global AM any economic, statistical and investment
services that the Sub-Adviser normally makes available to its institutional
or other customers.
(g) In accordance with procedures adopted by the Board, as amended from
time to time, the Sub-Adviser is responsible for assisting in the fair
valuation of all portfolio securities and will use its reasonable efforts to
arrange for the provision of a price(s) 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 Global Americas 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 of 1933, as amended
(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 act in conformity with the Trusts Trust
Instrument, By-Laws and Registration Statement, the Trusts 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 Global AM; and will
comply with the applicable requirements of the 1940 Act, the Investment
Advisers Act of 1940, as amended (Advisers Act), and the rules under each,
the Code, and all other applicable federal and state laws and regulations
applicable to the Trust and the Portfolio. UBS Global AM agrees to provide to
the Sub-Adviser copies of the Trusts Trust Instrument, By-Laws, Registration
Statement, Trusts Compliance Procedures, written instructions and directions
of the Board and UBS Global AM, and any amendments or supplements to any of
these materials as soon as practicable after such materials become available;
provided, however, that the Sub-Advisers duty under this Agreement to act in
conformity with any document, instruction or guideline produced by the Trust
or UBS Global AM shall not arise until it has been delivered to the
Sub-Adviser. Any changes to the objectives, policies and restrictions will
make due allowance for the time within which the Sub-Adviser shall have to
come into compliance. UBS Global AM further agrees to identify to the
Sub-Adviser in writing any broker-dealers that are affiliated with UBS Global
AM (other than UBS Financial Services Inc. and UBS Global Asset Management
(US) Inc.).
In order to assist the Trust and the Trusts 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-Advisers chief compliance officer (the Sub-Adviser CCO), 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)),
other than those Material Compliance Matters which have previously been
disclosed to the Trusts CCO, that arose under the Trust Compliance Procedures
that related to the Sub-Advisers management of the Portfolio or Segment.
The Sub-Adviser shall promptly provide the Trust CCO with copies of: (i) the
Sub-Advisers 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 CCOs performance of the Trust CCOs responsibilities under Rule 38a-1 to
review, evaluate and report to the Trusts 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-Advisers 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, other than those Material Compliance Matters which
have previously been disclosed to the Trusts CCO, 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 the Federal Securities Laws.
The Sub-Adviser will provide UBS Global AM with information (including
information that is required to be disclosed in the Trusts 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 Global AM of any pending
investigation, material litigation, administrative proceeding or any other
significant regulatory inquiry, relating to the Sub-Advisers provision of
services to the Portfolio or Segment, or otherwise negatively impacting its
ability to serve as an advisor to a registered investment company.
The Sub-Adviser will cooperate promptly and fully with UBS Global 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 Global 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 incurred
by the Trust, the Portfolio or UBS Global AM.
Upon request by UBS Global AM, Sub-Adviser agrees to reimburse UBS Global
Americas or the Trust for costs associated with generating and distributing
any supplement or amendment to the Prospectuses or SAIs for any Fund
(Supplement) when the Sub-Adviser is given a copy of a draft of such Supplement
and fails to promptly disclose to the Adviser facts than known to the
Sub-Adviser or its personnel that would require disclosure (or amendments to
disclosure) in the Funds Prospectuses or SAIs in time for such disclosure or
amendments to disclosure to be included in such Supplement. 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
..40% of the Portfolios average daily net assets of the Portfolio or Segment
(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-Advisers
Segment.
(b) The fee shall be computed 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 Global AM has agreed to waive all or a
portion of its management fee, UBS Global 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 prorated according to the proportion which such period bears
to the full month in which 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 Global AM in connection with the matters to which this Agreement
relates, except a loss resulting from willful misfeasance, bad faith or gross
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 portion of the
Portfolios Segment of the Portfolio, the Sub-Adviser shall have no
responsibility for the Portfolios being in violation of any applicable law or
regulation or investment policy or restriction applicable to the Portfolio as
a whole or for the Portfolios 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 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 Global AM and provided to the
Sub-Adviser.
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 Global 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 Global 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
Global 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-Advisers 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 Global AM, the Sub-Adviser shall permit UBS Global AM, its
employees or its agents to examine the reports required to be made to the
Sub-Adviser by Rule 17j-1(c)(1) and all other records relevant to the
Sub-Advisers code of ethics.
(c) The Sub-Adviser has provided UBS Global AM with a copy of its Form ADV as
most recently filed with the Securities and Exchange Commission (SEC) and
promptly will furnish a copy of all amendments to UBS Global AM at least
annually.
(d) The Sub-Adviser will notify UBS Global 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 promptly after such change.
(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 Global AM or any of their respective affiliates in offering,
marketing or other promotional materials without the express written consent
of UBS Global AM. Notwithstanding the foregoing, the Sub-Adviser may include
the Portfolios performance in calculating its composites, provided
that Sub-Adviser may not separately disclose the Funds performance (or the
performance of Sub-Advisers segment of the Fund) in connection therewith.
(f) The Sub-Adviser hereby represents that it has implemented policies and
procedures that are reasonably designed to prevent the disclosure by it, its
employees or its agents of the Trusts portfolio holdings to any person or
entity other than UBS Global AM, the Trusts custodian, or other persons
expressly designated by UBS Global AM.
8. Services Not Exclusive. The Sub-Adviser may act as an investment adviser
to any other person, firm or corporation, and may perform management and any
other services for any other person, association, corporation, firm or other
entity pursuant to any contract or otherwise, and take any action or do
anything in connection therewith or related thereto, except as prohibited by
applicable law; and no such performance of management or other services or
taking of any such action or doing of any such thing shall be in any manner
restricted or otherwise affected by any aspect of any relationship of the
Sub-Adviser to or with the Trust, Portfolio or UBS Global AM or deemed to
violate or give rise to any duty or obligation of the Sub-Adviser to the
Trust, Portfolio or UBS Global AM except as otherwise imposed by law or by
this Agreement.
9. Duration and Termination.
(a) This Agreement shall become effective upon the consummation of the
anticipated transaction involving a change in control of the Sub-Advisor
resulting in the automatic termination of the prior agreement between the
parties hereto, 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
Portfolios outstanding voting securities; unless UBS Global AM has authority
to enter into this Agreement pursuant to exemptive relief from the SEC without
a vote of the Portfolios 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 at least
annually (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 approval, and
(ii) by the Board or by 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 Global AM: (i) upon 120 days written
notice to the Sub-Adviser; (ii) immediately 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 Global 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 Global AM. This Agreement will terminate automatically in the event of its
assignment or upon termination of the Management Agreement.
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 which enforcement of the change, waiver,
discharge or termination is sought. 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 Portfolios 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 Series 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 Series or if such
disclosure is expressly required or requested by applicable federal or state
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 Global 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 the UBS Global AM and only so
long as the UBS Global AM is Manager to the Trust and/or the Fund.
(b) It is understood that the name Delaware Management Company 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
Fund 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 Fund. Upon termination of this
Agreement, the Company 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 Global 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
Global AM will be sent to the attention of the General Counsel. All notices
provided to the Sub-Adviser will be sent to the attention of Xxxxxxxx Xxxxx,
Senior Vice President, Delaware Management Company, Xxx Xxxxxxxx Xxxxxx, 0000
Xxxxxx Xxxxxx, Xxxxxxxxxxxx, XX 00000.
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.
Attest: UBS Global Asset Management (Americas) Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
By:/s/Xxxx Xxxxxxx By:/s/Xxxxxx X. Xxxxxxxx
Name: Xxxx Xxxxxxx Name: Xxxxxx X. Xxxxxxxx
Title: Director & Assoc. Gen. Counsel Title: Executive Director
Delaware Management Company, a series of
Delaware Management Business Trust
Xxx Xxxxxxxx Xxxxxx
Attest: 0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
By:/s/Xxxxx X. Xxxxxxx By:/s/Xxxxx X. XXxxxxx
Name:Xxxxx X. Xxxxxxx Name: Xxxxx X. XXxxxxx
Title:Associate General Counsel Title: Senior Vice President
For period ending January 31, 2010 Exhibit 77Q1
File number 811-8764
SUB-ADVISORY AGREEMENT
Agreement dated as of November 17, 2009 between UBS Global Asset Management
(Americas) Inc. (UBS Global AM), a Delaware corporation, and Brookfield
Investment Management, Inc. (Sub- Adviser), a Delaware corporation (the
Agreement).
RECITALS
(1) UBS Global AM has entered into a Management Agreement dated as of August
1, 2008 (Management Agreement), with UBS PACE 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 UBS PACE Global
Real Estate Securities Investments (Portfolio); and
(2) UBS Global AM is authorized to retain one or more sub-advisers to furnish
certain investment advisory services to UBS Global AM and the Portfolio;
(3) UBS Global AM desires to retain the Sub-Adviser to furnish certain
investment advisory services to UBS Global 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 Global AM and the Sub-Adviser agree as follows:
1. Appointment. UBS Global 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 Trusts Board of Trustees
(the Board) and review by UBS Global AM, and any written guidelines adopted by
the Board or UBS Global 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 Portfolios 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 Portfolios investment objective, policies
and restrictions as stated in the Trusts 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 Global AM and the Trusts custodian such information as UBS Global AM and
the Trusts custodian may reasonably request relating to all transactions
concerning the Portfolio or Segment.
UBS Global AM hereby designates and appoints the Sub-Adviser as its and the
Portfolios limited purpose agent and attorney-in-fact, without further prior
approval of UBS Global 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 Global 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.
(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 Global 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 Global AM, a summary of such Proxy Voting Policy for inclusion in the
Trusts registration statement, and will provide UBS Global 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 Global 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 Global
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 best execution policies, 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-Advisers 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 Global AM or the Sub-Adviser, the Trusts principal underwriter, or any
affiliated person thereof, 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 Global AM recognizes that in some cases this procedure may adversely
affect the results obtained for the Portfolio or Segment.
Subject to the Sub-Advisers obligations to seek best execution, UBS Global 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 II of the Sub-Advisers Form
ADV Registration Statement on file with the Securities and Exchange Commission
(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 Trusts 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
Global 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 Trusts Board of Trustees prior to commencement of transactions with such
broker-dealer on behalf of the Portfolio or the Trust.
UBS Global AM further authorizes the Sub-Adviser and its Affiliated
Broker-Dealers to execute agency cross transactions (the 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 Global 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
Global AM with periodic reports describing such agency cross transactions.
UBS Global 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 Global 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 Global AM
with such periodic and special reports as the Board or UBS Global AM may
request.
(g) At such times as shall be reasonably requested by the Board or UBS Global
AM, the Sub-Adviser will provide the Board and UBS Global 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 Global 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 Global
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 Global 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 Trusts
Trust Instrument, By-Laws and Registration Statement, the Trusts 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 Global 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 Global AM agrees
to provide to the Sub-Adviser copies of the Trusts Trust Instrument, By-Laws,
Registration Statement, Trusts Compliance Procedures, written instructions and
directions of the Board and UBS Global AM, and any amendments or supplements
to any of these materials as soon as practicable after such materials become
available. UBS Global AM further agrees to identify to the Sub-Adviser in
writing any broker-dealers that are affiliated with UBS Global AM (other than
UBS Financial Services Inc. and UBS Global Asset Management (US) Inc.).
In order to assist the Trust and the Trusts 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-Advisers 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-Advisers management of the Portfolio or Segment.
The Sub-Adviser shall promptly provide the Trust CCO with copies of: (i) the
Sub-Advisers 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 CCOs performance of the Trust CCOs responsibilities under Rule 38a-1 to
review, evaluate and report to the Trusts 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-Advisers
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 Global AM with information
(including information that is required to be disclosed in the Trusts
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 Global 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 Global 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 Global AM brought by any governmental or regulatory
authorities having appropriate jurisdiction (including, but not limited to,
the Securities and Exchange Commission (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
incurred by the Trust, the Portfolio or UBS Global AM, except as otherwise
specifically provided herein.
Upon request by UBS Global AM, Sub-Adviser agrees to reimburse UBS Global
Americas 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 Global AM facts then known to the Sub-Adviser or its personnel
that would require disclosure (or amendments to disclosure) in the Funds
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
0.42% up to $50 million and 0.40% on assets in excess of $50 million 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-Advisers
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 Global AM has agreed to waive all or a
portion of its management fee, UBS Global 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 Global AM in connection with the matters to which this Agreement
relates, except a loss resulting from willful misfeasance, bad faith or gross
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
Portfolios being in violation of any applicable law or regulation or investment
policy or restriction applicable to the Portfolio as a whole or for the
Portfolios 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 Global 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 Global 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 Global 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
Global 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-Advisers 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 Global AM, the Sub-Adviser shall permit UBS Global AM, its
employees or its agents to examine the reports required to be made by the
Sub-Adviser pursuant to Rule 17j-1(c)(1) and all other records relevant to
the Sub-Advisers code of ethics.
(c) The Sub-Adviser has provided UBS Global 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 Global AM at least annually.
(d) The Sub-Adviser will notify UBS Global 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 Global AM or any of their respective affiliates in offering,
marketing or other promotional materials without the express written consent
of UBS Global 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 Trusts portfolio holdings to any person or entity other than UBS Global
AM, the Trusts custodian, or other persons expressly designated by UBS Global
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 Global AM, the Trust,
their affiliates or agents.
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.
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 Portfolios
outstanding voting securities, unless UBS Global AM has authority to enter
into this Agreement pursuant to exemptive relief from the SEC without a vote
of the Portfolios 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 at least
annually (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 approval, and
(ii) by the Board or by 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 Global 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 Global 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 Global 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 Portfolios
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 Global 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 Global AM and only so long
as UBS Global AM is Manager to the Trust and/or the Portfolio.
(b) It is understood that the name Brookfield Investment Management Inc. 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 Global 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
Global AM will be sent to the attention of: General Counsel, UBS Global 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:
Brookfield Investment Management Inc., Three World Financial Center, 000 Xxxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, Attn: General Counsel.
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 Global Asset Management (Americas) Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxxxxx: Xxx Xxxx, XX 00000
By:/s/Xxxx Xxxxxxx By:/s/Xxxxx Xxxxxxxxxx
Name: Xxxx Xxxxxxx Name: Xxxxx Xxxxxxxxxx
Title: Director & Assoc. Gen. Counsel Title: Executive Director & Snr.
Assoc. GC
Brookfield investment Management Inc.
Three World Financial Center
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx: Xxx Xxxx, XX 10281-1010
By:/s/Xxxxx Xxxxxxx By:/s/Xxx X. Xxxxxxx
Name: Xxxxx Xxxxxxx Name: Xxx X. Xxxxxxx
Title: Vice President Title: Co-Chief Executive Officer
& Chief Investment
Officer
For period ending January 31, 2010 Exhibit 77Q1
File number 811-8764
SUB-ADVISORY AGREEMENT
Agreement dated as of November 17, 2009 between UBS Global Asset Management
(Americas) Inc. (UBS Global AM), a Delaware corporation, and ING Clarion Real
Estate Securities (Sub- Adviser), a Delaware limited liability company (the
Agreement).
RECITALS
(1) UBS Global AM has entered into a Management Agreement dated as of
August 1, 2008 (Management Agreement), with UBS PACE 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 UBS
PACE Global Real Estate Securities Investments (Portfolio); and
(2) UBS Global AM is authorized to retain one or more sub-advisers to
furnish certain investment advisory services to UBS Global AM and the
Portfolio;
(3) UBS Global AM desires to retain the Sub-Adviser to furnish certain
investment advisory services to UBS Global 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 Global AM and the Sub-Adviser agree as follows:
1. Appointment. UBS Global 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 Trusts Board of Trustees
(the Board) and review by UBS Global AM, and any written guidelines adopted by
the Board or UBS Global 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 Portfolios 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 Portfolios investment objective, policies
and restrictions as stated in the Trusts 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 Global AM and the Trusts custodian such information as UBS Global AM and
the Trusts custodian may reasonably request relating to all transactions
concerning the Portfolio or Segment.
UBS Global AM hereby designates and appoints the Sub-Adviser as its and the
Portfolios limited purpose agent and attorney-in-fact, without further prior
approval of UBS Global 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)
ommit 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 Global 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.
(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 Global 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 Global AM, a summary of such Proxy Voting Policy for inclusion in the
Trusts registration statement, and will provide UBS Global 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 Global 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
Global 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 best execution policies, 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-Advisers 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 Global AM or the Sub-Adviser,
the Trusts principal underwriter, or any affiliated person thereof, 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 Global AM recognizes that in
some cases this procedure may adversely affect the results obtained for the
Portfolio or Segment.
Subject to the Sub-Advisers obligations to seek best execution, UBS Global 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 II of the Sub-Advisers Form
ADV Registration Statement on file with the Securities and Exchange Commission
(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 Trusts 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 Global 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 Trusts Board of Trustees prior to commencement of transactions with such
broker-dealer on behalf of the Portfolio or the Trust.
UBS Global AM further authorizes the Sub-Adviser and its Affiliated
Broker-Dealers to execute agency cross transactions (the 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 Global 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 Global AM with periodic reports describing such agency
cross transactions. UBS Global 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 Global 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 Global AM
with such periodic and special reports as the Board or UBS Global AM may
request.
(g) At such times as shall be reasonably requested by the Board or UBS Global
AM, the Sub-Adviser will provide the Board and UBS Global 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 Global 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 Global
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 Global 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 Trusts
Trust Instrument, By-Laws and Registration Statement, the Trusts 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 Global 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 Global AM agrees
to provide to the Sub-Adviser copies of the Trusts Trust Instrument, By-Laws,
Registration Statement, Trusts Compliance Procedures, written instructions and
directions of the Board and UBS Global AM, and any amendments or supplements
to any of these materials as soon as practicable after such materials become
available. UBS Global AM further agrees to identify to the Sub-Adviser in
writing any broker-dealers that are affiliated with UBS Global AM (other than
UBS Financial Services Inc. and UBS Global Asset Management (US) Inc.).
In order to assist the Trust and the Trusts 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-Advisers 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-Advisers management of the Portfolio or
Segment.
The Sub-Adviser shall promptly provide the Trust CCO with copies of: (i) the
Sub-Advisers 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 CCOs performance of the Trust CCOs responsibilities under Rule
38a-1 to review, evaluate and report to the Trusts 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-Advisers
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 Global AM with information
(including information that is required to be disclosed in the Trusts
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 Global 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 Global 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 Global AM brought by any governmental or regulatory
authorities having appropriate jurisdiction (including, but not limited to,
the Securities and Exchange Commission (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 incurred
by the Trust, the Portfolio or UBS Global AM, except as otherwise specifically
provided herein.
Upon request by UBS Global AM, Sub-Adviser agrees to reimburse UBS Global
Americas 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 Global AM facts then known to the Sub-Adviser or its personnel
that would require disclosure (or amendments to disclosure) in the Funds
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
0.40% 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-Advisers
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 Global AM has agreed to waive all or a
portion of its management fee, UBS Global 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 Global AM in connection with the matters to which this Agreement
relates, except a loss resulting from willful misfeasance, bad faith or gross
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
Portfolios being in violation of any applicable law or regulation or investment
policy or restriction applicable to the Portfolio as a whole or for the
Portfolios 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 Global 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 Global 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 Global 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
Global 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-Advisers 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 Global AM, the Sub-Adviser shall permit UBS Global AM, its
employees or its agents to examine the reports required to be made by the
Sub-Adviser pursuant to Rule 17j-1(c)(1) and all other records relevant to the
Sub-Advisers code of ethics.
(c) The Sub-Adviser has provided UBS Global 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 Global AM at least annually.
(d) The Sub-Adviser will notify UBS Global 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 Global AM or any of their respective affiliates in offering,
marketing or other promotional materials without the express written consent
of UBS Global 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 Trusts portfolio holdings to any person or entity other than UBS Global
AM, the Trusts custodian, or other persons expressly designated by UBS Global
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 Global AM, the Trust,
their affiliates or agents.
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.
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 Portfolios
outstanding voting securities, unless UBS Global AM has authority to enter
into this Agreement pursuant to exemptive relief from the SEC without a vote
of the Portfolios 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 at least
annually (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 approval, and
(ii) by the Board or by 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 Global 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 Global 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
Global 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 Portfolios
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 Global 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 Global AM and only so long
as UBS Global AM is Manager to the Trust and/or the Portfolio.
(b) It is understood that the name ING Clarion Real Estate Securities 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 Global 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 Global AM will be sent to the attention of: General Counsel, UBS Global
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: ING Clarion Real Estate Securities, 000 Xxxx xx Xxxxxxxx Xxxx, Xxxxxx,
Xxxxxxxxxxxx 00000 Attn: General Counsel.
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 Global Asset Management (Americas) Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxxxxx: Xxx Xxxx, XX 00000
By:/s/Xxxx Xxxxxxx By:/s/Xxxxx Xxxxxxxxxx
Name: Xxxx Xxxxxxx Name: Xxxxx Xxxxxxxxxx
Title: Director & Assoc. Gen. Counsel Title: Executive Director
& Snr. Assoc. GC
ING Clarion Real Estate Securities
000 Xxxx xx Xxxxxxx Xxxx
- Xxxxx 000
Xxxxxx: Xxxxxx, XX 00000
By:/s/Xxxxxxx X. Xxxxxxx By:/s/Xxxxx Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxx Name: Xxxxx Xxxxxxxx
Title: SVP/Gen. Counsel Title: COO
