Exhibit No. EX-99.d.3
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 1st day of July, 2002, by and between UBS
Relationship Funds, a Delaware business trust (the "Trust") and UBS Global
Asset Management (Americas) Inc., a Delaware corporation (the "Advisor").
WITNESSETH:
WHEREAS, the Trust is an investment company registered under the
Investment Company Act of 1940, as amended (the "Investment Company Act");
and
WHEREAS, the Trust is authorized to issue separate series of shares
representing interests in separate investment portfolios (each referred to as
a "Portfolio" and collectively referred to as the "Portfolios"), which
Portfolios are identified on Schedule A attached hereto, and which Schedule A
may be amended from time to time by mutual agreement of the Trust and the
Advisor; and
WHEREAS, the Trust and the Advisor desire to enter into an agreement
pursuant to which the Advisor will provide investment advisory services
for each of the Portfolios of the Trust that are from time to time set
forth on Schedule A hereto, on the terms and conditions hereinafter set
forth;
NOW THEREFORE, in consideration of the mutual promises and agreements
herein contained and other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto, intending to be legally
bound, do hereby agree as follows:
1. DUTIES OF THE ADVISOR. The Trust hereby appoints the Advisor to act
as investment advisor to the Portfolios for the period and on such terms set
forth in this Agreement. The Trust employs the Advisor to manage the
investment and reinvestment of the assets of the Portfolios, to continuously
review, supervise and administer the investment program of the Portfolios, to
determine in its discretion the assets to be held uninvested, to provide the
Trust with records concerning the Advisor's activities which the Trust is
required to maintain, and to render regular reports to the Trust's officers
and Board of Trustees concerning the Advisor's discharge of the foregoing
responsibilities. The Advisor shall discharge the foregoing responsibilities
subject to the control of the officers and the Board of Trustees of the
Trust, and in compliance with the objectives, policies and limitations set
forth in the Trust's Prospectuses and Statement of Additional Information.
The Advisor accepts such employment and agrees to render the services and to
provide, at its own expense, the office space, furnishings, equipment and the
personnel required by it to perform the services on the terms provided
herein. With respect to foreign securities, at its own expense, the Advisor
may obtain statistical and other factual information and advice regarding
economic factors and trends from its foreign subsidiaries, and may obtain
investment services from the investment advisory personnel of its affiliates
located throughout the world to the extent permitted under interpretations of
the federal securities laws.
2. PORTFOLIO TRANSACTIONS. The Advisor shall provide the Portfolios
with a trading department, and with respect to foreign securities, the
Advisor is authorized to utilize the trading departments of its foreign
affiliates. The Advisor shall select, and with respect to its foreign
affiliates or the use of any sub-advisors, shall monitor the selection of,
the brokers or dealers that will execute the purchases and sales of
securities for the Portfolios and is directed to use its best efforts to
ensure that the best available price and most favorable execution of
securities transactions for the Portfolios are obtained. Subject to policies
established by the Board of Trustees of the Trust and communicated to the
Advisor, it is understood that the Advisor will not be deemed to have acted
unlawfully, or to have breached a fiduciary duty to the Trust or in respect
of the Portfolios, or be in breach of any obligation owing to the Trust or in
respect of the Portfolios under this Agreement, or otherwise, solely by
reason of its having caused a Portfolio to pay a member of a securities
exchange, a broker or a dealer a commission for effecting a securities
transaction for the Portfolio in excess of the amount of commission another
member of an exchange, broker or dealer would have charged if the Advisor
determines in good faith that the commission paid was reasonable in relation
to the brokerage or research services provided by such member, broker or
dealer, viewed in terms of that particular transaction or the Advisor's
overall responsibilities with respect to the Portfolio and to other funds and
advisory accounts for which the Advisor or any Sub-Advisor, as defined in
Section 7 hereof, exercises investment discretion. The Advisor will promptly
communicate to the officers and Trustees of the Trust such information
relating to the Portfolio transactions as they may reasonably request.
3. COMPENSATION OF THE ADVISOR. The Advisor shall not receive a fee
from the Trust or its Portfolios for the services to be rendered by the
Advisor.
4. REPORTS. The Portfolios and the Advisor agree to furnish to each
other such information regarding their operations with regard to their
affairs as each may reasonably request.
5. STATUS OF ADVISOR. The services of the Advisor to the Portfolios are
not to be deemed exclusive, and the Advisor shall be free to render similar
services to others so long as its services to the Portfolios are not impaired
thereby.
6. LIABILITY OF ADVISOR. In the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard by the Advisor of its
obligations and duties hereunder,
the Advisor shall not be subject to any liability whatsoever to the
Portfolios, or to any shareholder of the Portfolios, for any error of
judgment, mistake of law or any other act or omission in the course of, or
connected with, rendering services hereunder including, without limitation,
for any losses that may be sustained in connection with the purchase,
holding, redemption or sale of any security on behalf of the Portfolios.
7. DELEGATION OF RESPONSIBILITIES TO SUB-ADVISORS. The Advisor may, at
its expense, select and contract with one or more investment advisors
registered under the Investment Advisers Act of 1940 ("Sub-Advisors") to
perform some or all of the services for a Portfolios for which it is
responsible under this Agreement. The Advisor will compensate any
Sub-Advisor for its services to a Portfolio. The Advisor may terminate the
services of any Sub-Advisor at any time in its sole discretion, and shall at
such time assume the responsibility of such Sub-Advisor unless and until a
successor Sub-Advisor is selected and the requisite approval of all of the
Portfolio's shareholders is obtained. The Advisor will continue to have
responsibility for all advisory services furnished by any Sub-Advisor.
8. DURATION AND TERMINATION. This Agreement shall become effective on
July 1, 2002, provided that first it is approved by the Board of Trustees of
the Trust, including a majority of those Trustees who are not parties to this
Agreement or interested persons of any party hereto, in the manner provided
in Section 15(c) of the Investment Company Act of 1940, as amended (the "1940
Act"), and by the holders of a majority of the outstanding voting securities
of a Portfolio; and shall continue in effect until July 1, 2004. Thereafter,
this Agreement may continue in effect only if such continuance is approved at
least annually by: (i) the Trust's Board of Trustees; or (ii) by the vote of
a majority of the outstanding voting securities of the Portfolios; and in
either event 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 in the
manner provided in Section 15(c) of the 1940 Act. This Agreement may be
terminated by the Trust at any time, without the payment of any penalty, by
the Board of Trustees of the Trust or by vote of the holders of a majority of
the outstanding voting securities of the Portfolio on 60 days' written notice
to the Advisor. This Agreement may be terminated by the Advisor at any time,
without the payment of any penalty, upon 60 days' written notice to the
Trust. This Agreement will automatically terminate in the event of its
assignment. Any notice under this Agreement shall be given in writing,
addressed and delivered or mailed postpaid, to the other party at the
principal office of such party.
As used in this Section 8, the terms "assignment," "interested person,"
and "a vote of a majority of the outstanding voting securities" shall have
the respective meanings set forth in Section 2(a)(4), Section 2(a)(19) and
Section 2(a)(42) of the 1940 Act and Rule 18f-2 thereunder.
9. NAME OF ADVISOR. The parties agree that the Advisor has a
proprietary interest in the name "UBS," and the Trust agrees to promptly take
such action as may be necessary to delete from its legal name and/or the name
of the Portfolio any reference to the name of the Advisor promptly after
receipt from the Advisor of a written request therefor.
10. SEVERABILITY. If any provisions 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.
11. 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, and no material amendment of this
Agreement shall be effective until approved by vote of a majority of a
Portfolio's outstanding voting securities.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of this 1st day of July, 2002.
UBS RELATIONSHIP FUNDS UBS RELATIONSHIP FUNDS
By: /s/ Xxxx X. Xxxxxxxx By: /s/ Xxxxx X. Xxxxxxxxxx
----------------------------- ----------------------------
Name: Xxxx X. Xxxxxxxx Name: Xxxxx X. Xxxxxxxxxx
Title: Treasurer and Principal Title: Vice President and
Accounting Officer Assistant Secretary
UBS GLOBAL ASSET MANAGEMENT UBS GLOBAL ASSET MANAGEMENT
(AMERICAS) INC. (AMERICAS) INC.
By: /s/ Xxxxxx X. Xxxxxxxxx By: /s/ Xxx X. Doberman
----------------------------- ----------------------------
Name: Xxxxxx X. Xxxxxxxxx Name: Xxx X. Doberman
Title: Executive Director and Title: Assistant Secretary
Chief Financial Officer
SCHEDULE A
UBS RELATIONSHIP FUNDS
1. UBS Global Securities Relationship Fund
2. UBS Global Bond Relationship Fund
3. UBS U.S. Large Cap Equity Relationship Fund
4. UBS U.S. Intermediate Cap Relationship Fund
5. UBS U.S. Value Equity Relationship Fund
6. UBS U.S. Small Cap Equity Relationship Fund
7. UBS Emerging Markets Equity Relationship Fund
8. UBS U.S. Core Plus Relationship Fund
9. UBS U.S. Bond Relationship Fund
10. UBS Short Duration Relationship Fund
11. UBS Enhanced Yield Relationship Fund
12. UBS U.S. Treasury Inflation Protected Securities Relationship Fund
13. UBS Short-Term Relationship Fund
14. UBS Emerging Markets Debt Relationship Fund
15. UBS Opportunistic Emerging Markets Debt Relationship Fund
16. UBS Opportunistic High Yield Relationship Fund
