For period ending January 31, 2007 UBS PACE Select Advisors Trust
File number 811-8764 Exhibit 77Q.1
SUB-ADVISORY AGREEMENT
Agreement made as of September 30, 2006 between UBS Global Asset Management
(Americas) Inc. (UBS Global Americas), a Delaware corporation, and BlackRock
Financial Management, Inc. (Sub-Adviser), a Delaware corporation (the
Agreement).
RECITALS
(1) UBS Global Americas has entered into a Management Agreement dated April 1,
2006 (Management Agreement) with UBS PACE Select Advisors Trust, an open-end
management investment company registered under the Investment Company Act of
1940, as amended (1940 Act), with respect to UBS PACE Intermediate Fixed Income
Investments (Portfolio);
(2) UBS Global Americas is authorized to retain one or more sub-advisers to
furnish certain investment advisory services to UBS Global Americas and the
Portfolio or a designated portion of the assets of the Portfolio (Segment);
(3) UBS Global Americas desires to retain the Sub-Adviser to furnish certain
investment advisory services to UBS Global Americas and 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 Americas and the Sub-Adviser agree as follows:
1. Appointment. UBS Global Americas 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 Americas, and any written guidelines
adopted by the Board or UBS Global Americas, 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).
(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) 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), and that shall be acceptable to the Board. 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 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 Americas or the Sub-Adviser, 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 Americas 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
Americas 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. 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 Americas, the Portfolio or the
Trust.
UBS Global Americas 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 Americas, 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.
(e) The Sub-Adviser will maintain all books and records required to be
maintained pursuant to Rule 31a-1(b)(2)(ii), (3), (5), (6), (7), (9) and (10)
under the 1940 Act and the rules and regulations promulgated thereunder with
respect to transactions by the Sub-Adviser on behalf of the Portfolio or
Segment, and will furnish the Board and UBS Global Americas with such periodic
and special reports as the Board or UBS Global Americas reasonably may request.
In compliance with the requirements of Rule 31a-3 under the 1940 Act, the
Sub-Adviser hereby agrees that all records which it maintains for the
Portfolio or Segment are the property of the Trust, agrees to preserve for the
periods prescribed by Rule 31a-2 under the 1940 Act any records that it
maintains for the Portfolio or Segment and that are required to be maintained
by Rule 31a-1 under the 1940 Act, and further agrees to surrender promptly to
the Trust any records which it maintains for the Portfolio or Segment upon
request by the Trust.
(f) At such times as shall be reasonably requested by the Board or UBS Global
Americas, the Sub-Adviser will provide the Board and UBS Global Americas 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 Americas 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 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.
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 and with the written
instructions and written directions of the Board and UBS Global Americas; and
will comply with the requirements of the 1940 Act, 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 Americas agrees to
provide to the Sub-Adviser copies of the Trusts Trust Instrument, By Laws,
Registration Statement, written instructions and directions of the Board and
UBS Global Americas, and any amendments or supplements to any of these
materials as soon as practicable after such materials become available; and
further agrees to identify to the Sub-Adviser in writing any broker-dealers
that are affiliated with UBS Global Americas (other than UBS Financial Services
Inc. and UBS Global Americas itself).
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 Americas.
5. Compensation.
(a) For the services provided and the expenses assumed by the Sub-Adviser
pursuant to this Agreement, UBS Global Americas, not the Portfolio, will pay
to the Sub-Adviser a fee, computed daily and payable monthly, at an annual
rate listed on Schedule A 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) 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 Americas 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.
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
Americas 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 will provide UBS Global
Americas 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 Americas 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
Americas, the Sub-Adviser shall permit UBS Global Americas, its employees or
its agents to examine the reports required to be made by the Sub-Adviser
pursuant to Rule 17j-1 and all other records relevant to the Sub-Advisers code
of ethics.
(c) The Sub-Adviser has provided UBS Global Americas 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 Americas at
least annually.
(d) The Sub-Adviser will notify UBS Global Americas 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) UBS Global Americas and the Sub-Adviser agree that neither of them nor
any of their affiliates, will in any way refer directly or indirectly to
their relationship with one another or any of their respective affiliates in
offering, marketing or other promotional materials without the express written
consent of the other, which consent will be promptly provided and not
unreasonably withheld.
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 consummation of the
anticipated transaction that may be interpreted as possibly 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 Americas 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 Americas: (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 Americas, 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 Americas. This Agreement will terminate automatically in the
event of its assignment or upon termination of the Management 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. 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.
13. Notices. Any notice herein required is to be in writing and is deemed to
have been given to the Sub-Adviser or UBS Global Americas 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 Americas will be sent to the attention of the General Counsel,00 Xxxx
00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. All notices provided to the Sub-Adviser
will be sent to the attention of Xxxxxx Xxxxxxxx, 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.
Attest:
UBS Global Asset Management (Americas) Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
By: /s/ Xxxx Xxxxxxx
Name: Xxxx Xxxxxxx
Title: Director & Assoc. Gen Counsel
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Executive Director & Sr. Assoc. Gen. Counsel
Attest:
BlackRock Financial Management, Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
By: /s/ Xxxxxxx Xxxxx
Name: Xxxxxxx Xxxxx
Title: Director
By: /s/ Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
Title: Managing Director
Schedule A
20 basis points (0.20%) on the average daily net assets of the Portfolio or
Segment allocated to its management up to and including $120,000,000
10 basis points (0.10%) on the average daily net assets of the Portfolio or
Segment allocated to its management exceeding $120,000,000
For period ending January 31, 2007 Exhibit 77Q.1
File number 811-8764
SUB-ADVISORY AGREEMENT
Agreement made as of December 13, 2006 between UBS Global Asset Management
(Americas) Inc. (UBS Global Americas), a Delaware corporation, and Xxxxxxx
Xxxxxxx Trees & Xxxxx, INC. (FFTW (NY)), a New York corporation and three of its
affiliates, Xxxxxxx Xxxxxxx Trees & Xxxxx (FFTW (UK)), a corporate partnership
organized under the laws of the United Kingdom, Xxxxxxx Xxxxxxx Trees & Xxxxx,
Pte Ltd (FFTW (Singapore)), a Singapore corporation, and Xxxxxxx Xxxxxxx Trees &
Xxxxx, Ltd Kabushiki Kaisha (FFTW (Japan)), a Japanese corporation (referred to
collectively as the Sub-Adviser) (the Agreement).
RECITALS
(1) UBS Global Americas has entered into a Management Agreement dated April 1,
2006 (Management Agreement) with UBS PACE Select Advisors Trust (formerly known
as Managed Accounts Services Portfolio 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 Fixed Income Investments
(Portfolio);
(2) UBS Global Americas is authorized to retain one or more sub-advisers to
furnish certain investment advisory services to UBS Global Americas and the
Portfolio;
(3) UBS Global Americas desires to retain the Sub-Adviser to furnish certain
investment advisory services to UBS Global Americas and 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 Americas and the Sub-Adviser agree as follows:
1. Appointment. UBS Global Americas hereby appoints the Sub-Adviser as an
investment sub-adviser with respect to the Portfolio 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 Board and review by UBS
Global Americas, and any written guidelines adopted by the Board or UBS Global
Americas, the Sub-Adviser will provide a continuous investment program for all
or a designated portion of the assets (Segment) of the Portfolio, 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. UBS Global Americas acknowledges
that the Sub-Adviser may consult with its affiliates in connection with
providing such investment program, while retaining the responsibility for making
investment decisions on behalf of the Portfolio. 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 has
authority to review and execute all industry agreements with banks, brokers,
dealers and other financial intermediaries necessary to perform its duties under
this Agreement. 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).
(b) The Sub-Adviser agrees that it will not consult with any other sub-adviser
for the Trust or Portfolio (Other Sub-Adviser) 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) 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, 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,
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 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
Americas or the Sub-Adviser, 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 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 Americas recognizes that in some cases this
procedure may adversely affect the results obtained for the Portfolio or
Segment.
(d) The Sub-Adviser will maintain all books and records required to be
maintained pursuant to the 1940 Act and the rules and regulations promulgated
thereunder with respect to transactions by the Sub-Adviser on behalf of the
Portfolio or Segment, and will furnish the Board and UBS Global Americas with
such periodic and special reports as the Board or UBS Global Americas
reasonably may request. In compliance with the requirements of Rule 31 a-3
under the 1940 Act, the Sub-Adviser hereby agrees that all records which it
maintains for the Portfolio are the property of the Trust, agrees to preserve
for the periods prescribed by Rule 31 a-2 under the 1940 Act any records that
it maintains for the Portfolio and that are required to be maintained by Rule
31a-I under the 1940 Act, and further agrees to surrender promptly to the
Trust any records which it maintains for the Portfolio upon request by the
Trust.
(e) At such times as shall be reasonably requested by the Board or UBS Global
Americas, the Sub-Adviser will provide the Board and UBS Global Americas 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 Americas any economic, statistical and investment
services that the Sub-Adviser normally makes available to its institutional
or other customers.
(f) 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 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.
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 and with the written
instructions and written directions of the Board and UBS Global Americas; and
will comply with the requirements of the 1940 Act, and the Investment Advisers
Act of 1940, as amended (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 Americas agrees to provide to the Sub-Adviser copies
of the Trusts Trust Instrument, By-Laws, Registration Statement, written
instructions and directions of the Board and UBS Global Americas, and any
amendments or supplements to any of these materials as soon as practicable
after such materials become available; and further agrees to identify to the
Sub-Adviser in writing any broker-dealers that are affiliated with UBS Global
Americas (other than UBS Financial Services Inc. and UBS Global Americas
itself).
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 Americas.
5. Compensation.
(a) For the services provided and the expenses assumed by the Sub-Adviser
pursuant to this Agreement, UBS Global Americas, not the Portfolio, will pay
to the Sub-Adviser a fee, computed daily and payable monthly, at an annual
rate of 0.25% of the average daily net assets of the Series or Segment
(computed in the manner specified in the Management Agreement) up to and
including $400 million and 0.20% of the average daily net assets of the Series
or Segment (computed in the manner specified in the Management Agreement)
above $400 million 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) 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 Americas 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
series 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 investments, 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.
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
Americas 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 will provide UBS Global
Americas 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, the president or a
vice-president of the Sub-Adviser shall certify to UBS Global Americas 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
Americas, the Sub-Adviser shall permit UBS Global Americas, its employees or
its agents to examine the reports required to be made by the Sub-Adviser
pursuant to Rule 17j-1 and all other records relevant to the Sub-Advisers code
of ethics.
(c) The Sub-Adviser has provided UBS Global Americas 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 Americas at
least annually.
(d) The Sub-Adviser will notify UBS Global Americas 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 Americas or any of their respective affiliates in
offering, marketing or other promotional materials without the express written
consent of UBS Global Americas. Notwithstanding, the Sub-Adviser is permitted
to disclose information necessary for it to perform its duties under this
Agreement to banks, brokers, dealers and other financial intermediaries.
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 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 Americas 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 Americas: (1) 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 Americas, 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 Americas.
This Agreement will terminate automatically in the event of its assignment or
upon termination of the Management 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. 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.
13. Notices. Any notice herein required is to be in writing and is deemed to
have been given to the Sub-Adviser or UBS Global Americas 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 Americas will be sent to the attention of the General Counsel. All
notices provided to the Sub-Adviser will be sent to the attention of Xxxxx
Xxxxxxx, Chief Legal and Risk Officer.
In witness whereof, the parties hereto have caused this instrument to be
executed by their duly authorized signatories as of the date and year first
above written.
Attest:
UBS Global Asset Management (Americas) Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
By: /s/ Xxxxxx Xxx
Name: Xxxxxx Xxx
Title: Director and Associate General Counsel
By: /s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Executive Director & Senior Assoc. GC
Attest:
Xxxxxxx Xxxxxxx Trees & Xxxxx, Inc. (New York)
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
By: /s/Xxxxxxx Xxxxx
Name: Xxxxxxx Xxxxx
Title: Legal and Compliance Associate
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Chief Legal and Risk Officer, Managing Director
Attest:
Xxxxxxx Xxxxxxx Trees & Xxxxx (United Kingdom)
3 Royal Court
The Royal Exchange
London EC3V 3RA
By: /s/Xxxxxxx Xxxxx
Name: Xxxxxxx Xxxxx
Title: Legal and Compliance Associate
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Chief Legal and Risk Officer, Managing Director
Attest:
Xxxxxxx Xxxxxxx Trees & Xxxxx Pte Ltd (Singapore)
00 Xxxxxxx Xxxxx
#00-00 Xxxxxxxxx Xxxx Xxxxx
Xxxxxxxxx 000000
By: /s/Xxxxxxx Xxxxx
Name: Xxxxxxx Xxxxx
Title: Legal and Compliance Associate
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Chief Legal and Risk Officer, Managing Director
Attest:
Xxxxxxx Xxxxxxx Trees & Xxxxx, Kabushiki Kaisha, Ltd (Japan)
Fukoku Seimei Building 21F
2-2, Uchisaiwaicho 2-Chrome
Chiyoda-Ku, Tokyo 100
By: /s/Xxxxxxx Xxxxx
Name: Xxxxxxx Xxxxx
Title: Legal and Compliance Associate
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Chief Legal and Risk Officer, Managing Director
For period ending January 31, 2007 Exhibit 77Q.1
File number 811-8764
SUB-ADVISORY AGREEMENT
Agreement made as of November 30, 2006 between UBS GLOBAL ASSET MANAGEMENT
(AMERICAS) INC. (UBS Global Americas), a Delaware corporation, and XXXXXXX
XXXXX ASSET MANAGEMENT, L.P. (Sub-Adviser), a Delaware Limited Partnership
(the Agreement).
RECITALS
(1) UBS Global Americas has entered into a Management Agreement dated as
of April 1, 2006, and amended as of August 1, 2006, 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),
and made applicable to UBS PACE Real Estate Securities Investments
(Portfolio) via an Investment Management and Administration Fee Agreement
dated as of November 30, 2006 (collectively, the Management Agreement);
and
(2) UBS Global Americas is authorized to retain one or more sub-advisers
to furnish certain investment advisory services to UBS Global Americas
and the Portfolio; and
(3) UBS Global Americas desires to retain the Sub-Adviser to furnish
certain investment advisory services to UBS Global Americas 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 Americas and the Sub-Adviser agree as follows:
1.Appointment. UBS Global Americas 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. UBS
Global Americas authorizes the Sub-Adviser to open accounts and execute
documents (with standard indemnities) and representation letters in the name
of, binding against and on behalf of the Segment for all reasonable and
customary purposes necessary or desirable in the Sub-Advisers view to
effectuate the Sub-Advisers activities under the 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 Americas, and any written guidelines
adopted by the Board or UBS Global Americas provided in writing (receipt of
which has been acknowledged by Sub-Adviser), 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).
(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. Sub-Adviser may communicate with other Sub-
Advisers under limited circumstances at the specific request of UBS Global
Americas for compliance and other risk-management purposes to the extent
allowed by law.
(c) 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), and that shall be acceptable to the Board.
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.
Notwithstanding the above, UBS Global Americas or another service provider for
the Trust, and not the Sub-Adviser, shall make any and all filings in connection
with any securities litigation or class action lawsuits involving securities
held or that were held in the Segment; provided, however, that GSAM is
responsible for promptly forwarding to UBS Global Americas documents it receives
regarding such matters that are specific to the Portfolio and providing
reasonable assistance, if necessary, in making such claims Except as may be
provided by applicable law or as otherwise provided herein, the Sub-Advisor
shall not incur any liability to UBS Global Americas by reason of any exercise
of, or failure to exercise, any such proxy voting discretion and shall not
incur any liability for any failure arising from an act or omission of a
person other than the Sub-Adviser or its agents. UBS Global Americas
understands that the Sub-Adviser establishes from time to time guidelines for
the voting of proxies and may employ the services of a proxy voting service to
exercise proxies in accordance with the Sub-Advisers guidelines
(d) 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 Americas or
the Sub-Adviser, 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 Americas 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
Americas 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 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. 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
Americas, the Portfolio or the Trust.
UBS Global Americas 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 Americas, 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. UBS Global Americas understands that its authority to 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 Americas, and that the failure to terminate such
authorization will result in its continuation.
(e) The Sub-Adviser will maintain all books and records required to be
maintained, to the extent applicable, pursuant to Rule 31a-1(b)(2)(ii), (3),
(5), (6), (7), (9) and (10) under the 1940 Act and the rules and regulations
promulgated thereunder with respect to transactions by the Sub-Adviser on
behalf of the Portfolio or Segment, and will furnish the Board and UBS Global
Americas with such periodic and special reports as the Board or UBS Global
Americas reasonably may request. In compliance with the requirements of Rule
31a-3 under the 1940 Act, the Sub-Adviser hereby agrees that all records which
it maintains for the Portfolio or Segment are the property of the Trust, agrees
to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act any
records that it maintains for the Portfolio or Segment and that are required
to be maintained by Rule 31a-1 under the 1940 Act, and further agrees to
surrender promptly to the Trust any records which it maintains for the
Portfolio or Segment upon request by the Trust.
(f) At such times as shall be reasonably requested by the Board or UBS Global
Americas, the Sub-Adviser will provide the Board and UBS Global Americas 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 Americas 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 the Board and UBS Global
Americas 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.
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 and with the written instructions
and written directions of the Board and UBS Global Americas, each as provided to
and whose receipt is acknowledged by the Sub-Adviser, 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 Americas agrees to provide to the Sub-
Adviser copies of the Trusts Trust Instrument, By-Laws, Registration Statement,
written instructions and directions of the Board and UBS Global Americas, and
any amendments or supplements to any of these materials as soon as practicable
after such materials become available; and further agrees to identify to the
Sub-Adviser in writing any broker-dealers that are affiliated with UBS Global
Americas (other than UBS Financial Services Inc.).
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 Americas.
5. Compensation.
(a) For the services provided and the expenses assumed by the Sub-Adviser
pursuant to this Agreement, UBS Global Americas, 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) 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 Americas 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.
The Sub-Adviser shall have no responsibility to monitor compliance with respect
to other portions of the Portfolio that are not under the Sub-Advisers
management, and the Sub-Adviser shall have no responsibility to monitor
compliance with limitations and restrictions specifically applicable to the
Portfolio or Segment unless such limitations or restrictions are provided to
and whose receipt is acknowledged by the Sub-Adviser in writing or which
generally apply to an advisor to a registered investment company or a registered
investment company under applicable law.
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. (a) Representations of Sub-Adviser. The Sub-Adviser represents, warrants and
agrees as follows:
(1) 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 Americas 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.
(2) The Sub-Adviser has adopted a written code of ethics complying with the
requirements of Rule 17j-1 under the 1940 Act and will provide UBS Global
Americas 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 Americas 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 reasonable written request of UBS Global
Americas, the Sub-Adviser shall permit UBS Global Americas, its employees or its
agents to examine the reports required to be made by the Sub-Adviser pursuant to
Rule 17j-1.
(3) The Sub-Adviser has provided UBS Global Americas 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 Americas at
least annually.
UBS Global Americas understands that the Sub-Adviser is part of a worldwide,
full-service investment banking, broker-dealer, asset management organization,
and as such, the Sub-Adviser and its affiliates and their managing directors,
directors, officers and employees have multiple interests as more fully
disclosed in the Sub-Advisers Form ADV Part II as may be amended from time
to time.
(4) The Sub-Adviser will notify UBS Global Americas 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.
(5) UBS Global Americas and the Sub-Adviser agree that neither of them nor any
of their affiliates, will in any way refer directly or indirectly to their
relationship with one another or any of their respective affiliates in offering,
marketing or other promotional materials without the express written consent of
the other, which consent will be promptly provided and not unreasonably
withheld.
(6) It is understood that the name Xxxxxxx, Xxxxx & Co. or Xxxxxxx Xxxxx or
any derivative thereof, any tradename, trademark, trade device, service mark,
symbol or logo associated with those names are the valuable property of the
Sub-Adviser or its affiliates and that UBS Global Americas has the right to use
to such name (or derivative or logo), in offering materials or promotional or
sales-related materials of the Portfolio, only with the prior written approval
of the Sub-Adviser, such approval not to be unreasonably withheld, and for so
long as the Sub-Adviser is Sub-Adviser of the Portfolio. Notwithstanding the
foregoing, the Sub-Advisers approval is not required when (i) previously
approved materials are re-issued with minor modifications, (ii) UBS Global
Americas and Sub-Adviser identify materials which they jointly determine do not
require the Sub-Advisers approval and (iii) used as required to be disclosed in
the registration statement of the Portfolio. Upon termination of this
Agreement, the Portfolio and UBS Global Americas shall forthwith cease to use
such name (or derivative or logo),although UBS Global Americas may continue to
use such name (or derivative or logo) to the extent permitted under any other
agreement between UBS Global Americas and Sub-Adviser or as otherwise required
by law.
(b) Representations and Warranties of UBS Global Americas. UBS Global Americas
represents and warrants to the Sub-Adviser the following:
(1) UBS Global Americas has all requisite corporate power and authority under
the laws of the Commonwealth of Delaware and federal securities laws and under
the Management Agreement with the Trust to execute, deliver and perform this
Agreement.
(2) UBS Global Americas is a registered investment adviser under the Advisers
Act and is in material compliance with all other required registrations under
applicable federal and state law relevant hereto.
(3) UBS Global Americas has complied, in all material respects, with all
registrations required by, and will comply, in all material respects, with all
applicable rules and regulations of the Commission relevant hereto.
(4) UBS Global Americas has received a copy of Part II of Sub-Advisers Form
ADV at least two days in advance of the execution of this contract.
(5) UBS Global Americas agrees that the Sub-Adviser shall have no
responsibility or liability arising out of any non-compliance by the Portfolio
or UBS Global Americas with anti-money laundering regulations. UBS Global
Americas hereby certifies that UBS Global Americas has implemented an anti-money
laundering program and a customer identification program (CIP) that each comply
with the requirements of applicable law, including the Bank Secrecy Act and
U.S.A. PATRIOT ACT of 2001 and the regulations promulgated thereunder, and that
UBS Global Americas or its affiliates will perform or obtain the requisite
assurances with respect to the performance of the requirements of such programs
with respect to the investors in the Portfolio.
The foregoing representations and warranties shall be continuing during the term
of this Sub-Advisory Agreement.
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
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 ithas 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 Americas 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 Americas: (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 Americas, 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 Americas.
This Agreement will terminate automatically in the event of its assignment or
upon termination of the Management 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. 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.
The parties hereto understand that any information or recommendation supplied
by the Sub-Adviser in connection with the performance of its obligation
hereunder is to be regarded as confidential and for use only by UBS Global
Americas, the Segment or such persons UBS Global Americas may designate in
connection with the Segment. The parties also understand that any information
supplied to the Sub-Adviser in connection with the performance of its obligation
hereunder, particularly, but not limited to, any list of securities which may be
bought or sold for the Segment, is to be regarded as confidential and for use
only by the Sub-Adviser in connection with its obligation to provide investment
advice and other services of the Segment
13. Notices. Any notice herein required is to be in writing and is deemed to
have been given to the Sub-Adviser or UBS Global Americas 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 Americas will be sent to the attention of: General Counsel, UBS
Global Asset Management (Americas) Inc., 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX
00000. All notices provided to the Sub-Adviser will be sent to the attention
of: Xxxxx Xxxxxxxxx, Xxxxxxx Xxxxx Asset Management, 00 Xxx Xxxx, 00 Xxxxx,
Xxx Xxxx, 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, Xxx Xxxx 00000
By: /s/ Xxxx Xxxxxxx
Name: Xxxx Xxxxxxx
Title: Director & Assoc Gen Counsel
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Executive Director & Sr. Assoc Gen Counsel
Attest:
XXXXXXX XXXXX ASSET MANAGEMENT, L.P.
00 Xxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
By: /s/ Xxxxxx Xxxxxxxxxx
Name: Xxxxxx Xxxxxxxxxx
Title: Vice President and Assistant General Counsel
By: /s/ Xxxxx X. Xxxxxxxxx
Name: Xxxxx X. Xxxxxxxxx
Title: Managing Director
For period ending January 31, 2007 Exhibit 77Q.1
File number 811-8764
AMENDMENT NO. 4
TO AMENDED AND RESTATED TRUST INSTRUMENT OF UBS PACE SELECT ADVISORS TRUST
THIS AMENDMENT NO. 4 (the Amendment), to the Amended and Restated Trust
Instrument of UBS PACE Select Advisors Trust, a Delaware statutory trust
(the Trust), dated September 13, 2000 (the Trust Instrument), as amended
and restated on November 5, 2001 and as amended effective April 8, 2002 and
as amended effective December 15, 2005, by and among the trustees of the
Trust and the holders, from time to time, of undivided beneficial interests
in the assets of the Trust or a series of the Trust (each, a Shareholder
and collectively, the Shareholders), is effective as of July 19, 2006.
WHEREAS, at a duly noticed meeting of the trustees on July 19, 2006,
pursuant to Article X, Section 8 and Article II, Section 7 of the Trust
Instrument, the trustees of the Trust duly approved amendments to the Trust
Instrument as set forth in this Amendment without the necessity of their
execution thereof; and
WHEREAS, the trustees of the Trust determined that the amendments to the
Trust Instrument set forth below do not require the vote of Shareholders
pursuant to Article X, Section 8 of the Trust Instrument;
NOW THEREFORE, the trustees of the Trust hereby agree as follows:
1. AMENDMENT TO SCHEDULE A. Schedule A of the Trust Instrument is hereby
amended in its entirety as set forth in Exhibit 1 hereto.
2. EFFECT OF AMENDMENT. This Amendment shall be effective and the Trust
Instrument shall be deemed to be modified and amended in accordance herewith
as of the date of this Amendment. Except as hereby amended, the Trust
Instrument shall remain in full force and effect.
3. CAPITALIZED TERMS. Capitalized terms used and not defined herein have the
meanings set forth in the Trust Instrument.
4. GOVERNING LAW. This Amendment shall be governed by, and construed in
accordance with, the laws of the State of Delaware, without regard to
principles of conflicts of law thereof.
EXHIBIT 1
SCHEDULE A TO AMENDED AND RESTATED TRUST INSTRUMENT OF
UBS PACE SELECT ADVISORS TRUST
(AS AMENDED AND RESTATED EFFECTIVE NOVEMBER 5, 2001,
AND AS FURTHER AMENDED EFFECTIVE APRIL 8, 2002,
AND AS FURTHER AMENDED EFFECTIVE DECEMBER 15, 2005,
AND AS FURTHER AMENDED EFFECTIVE JULY 19, 2006)
SERIES OF THE TRUST
UBS PACE Money Market Investments
UBS PACE Government Securities Fixed Income Investments
UBS PACE Intermediate Fixed Income Investments
UBS PACE Strategic Fixed Income Investments
UBS PACE Municipal Fixed Income Investments
UBS PACE Global Fixed Income Investments
UBS PACE Large Company Value Equity Investments
UBS PACE Large Company Growth Equity Investments
UBS PACE Small/Medium Company Value Equity Investments
UBS PACE Small/Medium Company Growth Equity Investments
UBS PACE International Equity Investments
UBS PACE International Emerging Markets Equity Investments
UBS PACE Alternative Strategies Investments
UBS PACE High Yield Investments
UBS PACE Real Estate Securities Investments
CLASSES OF SHARES OF EACH SERIES
An unlimited number of shares of beneficial interest has been established
by the Board as Class P shares of the Series designated as UBS PACE Money
Market Investments.
An unlimited number of shares of beneficial interest has been established
by the Board as Class A shares, Class C shares, Class P shares and Class
Y shares of the Series designated as UBS PACE Real Estate Securities
Investments.
An unlimited number of shares of beneficial interest has been established
by the Board as Class A shares, Class B shares, Class C shares, Class P
shares and Class Y shares of each of the other Series listed above. The
Class B shares of each Series consist of an unlimited number of Sub-Class
B-1 shares, Sub-Class B-2 shares, Sub-Class B-3 shares and Sub-Class B-4
shares. Each of the Class A shares, Class B shares, Class C shares, Class
P shares and Class Y shares of a Series represents interests in the assets
of only that Series and has the same preferences, conversion and other rights,
voting powers, restrictions, limitations as to dividends, qualifications and
terms and conditions of redemption of shares, except as provided in the Trusts
Trust Instrument and as set forth below with respect to the Class B shares of
the Series:
1. Each Sub-Class B-1 share of a Series, other than a share purchased through
the reinvestment of a dividend or a distribution with respect to the Sub-Class
B-1 share, shall be converted automatically, and without any action or choice
on the part of the holder thereof, into Class A shares of the same Series,
based on the relative net asset value of each such class at the time of the
calculation of the net asset value of such class of shares on the date that
is the first Business Day (as defined in the Series prospectus and/or
statement of additional information) of the month in which the sixth
anniversary of the issuance of such Sub-Class B-1 shares occurs (which, for
the purpose of calculating the holding period required for conversion, shall
mean (i) the date on which the issuance of such Sub-Class B-1 shares occurred
or (ii) for Sub-Class B-1 shares obtained through an exchange, the date on
which the issuance of the Sub-Class B-1 shares of an eligible UBS fund
occurred, if such shares were exchanged directly or through a series of
exchanges for the Series Sub-Class B-1 shares (the Sub-Class B-1 Conversion
Date)).
2. Each Sub-Class B-2 share of a Series, other than a share purchased through
the reinvestment of a dividend or a distribution with respect to the Sub-Class
B-2 share, shall be converted automatically, and without any action or choice
on the part of the holder thereof, into Class A shares of the same Series,
based on the relative net asset value of each such class at the time of the
calculation of the net asset value of such class of shares on the date that is
the first Business Day (as defined in the Series prospectus and/or statement
of additional information) of the month in which the fourth anniversary of the
issuance of such Sub-Class B-2 shares occurs (which, for the purpose of
calculating the holding period required for conversion, shall mean (i) the date
on which the issuance of such Sub-Class B-2 shares occurred or (ii) for Sub-
Class B-2 shares obtained through an exchange, the date on which the issuance
of the Sub-Class B-2 shares of an eligible UBS fund occurred, if such shares
were exchanged directly or through a series of exchanges for the Series Sub-
Class B-2 shares (the Class B-2 Conversion Date)).
3. Each Sub-Class B-3 share of a Series, other than a share purchased through
the reinvestment of a dividend or a distribution with respect to the Sub-Class
B-3 share, shall be converted automatically, and without any action or choice
on the part of the holder thereof, into Class A shares of the same Series,
based on the relative net asset value of each such class at the time of the
calculation of the net asset value of such class of shares on the date that is
the first Business Day (as defined in the Series prospectus and/or statement
of additional information) of the month in which the third anniversary of the
issuance of such Sub-Class B-3 shares occurs (which, for the purpose of
calculating the holding period required for conversion, shall mean (i) the
date on which the issuance of such Sub-Class B-3 shares occurred or (ii) for
Sub-Class B-3 shares obtained through an exchange, the date on which the
issuance of the Sub-Class B-3 shares of an eligible UBS fund occurred, if such
shares were exchanged directly or through a series of exchanges for the Series
Sub-Class B-3 shares (the Class B-3 Conversion Date)).
4. Each Sub-Class B-4 share of a Series, other than a share purchased through
the reinvestment of a dividend or a distribution with respect to the Sub-Class
B-4 share, shall be converted automatically, and without any action or choice
on the part of the holder thereof, into Class A shares of the same Series,
based on the relative net asset value of each such class at the time of the
calculation of the net asset value of such class of shares on the date that
is the first Business Day (as defined in the Series prospectus and/or statement
of additional information) of the month in which the second anniversary of the
issuance of such Sub-Class B-4 shares occurs (which, for the purpose of
calculating the holding period required for conversion, shall mean (i) the date
on which the issuance of such Sub-Class B-4 shares occurred or (ii) for Sub-
Class B-4 shares obtained through an exchange, the date on which the issuance
of the Sub-Class B-4 shares of an eligible UBS fund occurred, if such shares
were exchanged directly or through a series of exchanges for the Series Sub-
Class B-4 shares (the Class B-4 Conversion Date)).
5. Each Sub-Class B-1, Sub-Class B-2, Sub-Class B-3 or Sub-Class B-4 share of
a Series (which may be referred to collectively as Class B shares) purchased
through the reinvestment of a dividend or a distribution with respect to the
corresponding sub-class of shares and the dividends and distributions on such
shares shall be segregated in a separate sub-account on the stock records of
the Series for each of the holders of record thereof. On any Class B-1
Conversion Date, Class B-2 Conversion Date, Class B-3 Conversion Date or
Class B-4 Conversion Date (hereinafter referred to as a Conversion Date),
a number of the shares held in the sub-account of the holder of record of
the corresponding Class B shares being converted, calculated in accordance
with the next following sentence, shall be converted automatically, and
without any action or choice on the part of the holder thereof, into Class
A shares of the same Series. The number of Class B shares in the holders
sub-account so converted shall bear the same relation to the total number of
corresponding Class B shares maintained in the sub-account on the Conversion
Date as the number of Class B shares of the holder converted on the Conversion
Date bears to the total number of the corresponding Class B shares of the
holder on the Conversion Date not purchased through the automatic reinvestment
of dividends or distributions with respect to the Class B shares.
6. The number of Class A shares into which Class B shares are converted shall
equal the number (including for this purpose fractions of a share) obtained by
dividing the net asset value per share of the Class B shares for purposes of
sales and redemptions thereof at the time of the calculation of the net asset
value on the Conversion Date by the net asset value per share of the Class A
shares for purposes of sales and redemptions thereof at the time of the
calculation of the net asset value on the Conversion Date.
7. On the Conversion Date, the Class B shares converted into Class A shares
will cease to accrue dividends and will no longer be outstanding and the
rights of the holders thereof will cease (except the right to receive
declared but unpaid dividends to the Conversion Date).
For purposes of the foregoing, the term eligible UBS fund includes any and all
mutual funds for which UBS Global Asset Management (Americas) Inc., UBS Global
Asset Management (US) Inc., or an affiliate thereof serves as investment
adviser, investment manager or principal underwriter that offer shares that
(i) have a contingent deferred sales charge imposed upon certain redemptions
of such shares and (ii) are exchangeable with the Class B shares of the Series.
For period ending January 31, 2007 Exhibit 77Q.1
File number 811-8764
INVESTMENT MANAGEMENT AND ADMINISTRATION AGREEMENT
THIS AGREEMENT made as of April 1, 2006 and amended as of August 1, 2006
between UBS PACE SELECT ADVISORS TRUST, a Delaware statutory trust (Trust),
and UBS GLOBAL ASSET MANAGEMENT (AMERICAS) INC. (UBS Global Americas), a
Delaware corporation registered as an investment adviser under the Investment
Advisers Act of 1940, as amended (Advisers Act).
WHEREAS, the Trust is registered under the Investment Company Act of 1940, as
amended (1940 Act), as an open-end management investment company, and intends
to offer for public sale distinct series of shares of beneficial interest
(each a Portfolio); and
WHEREAS, the Trust desires to retain UBS Global Americas as investment manager
and administrator to furnish certain administrative, investment advisory and
management services to the Trust and each Portfolio as now exists and as
hereafter may be established, and UBS Global Americas is willing to furnish
such services; and
WHEREAS, the Trust desires and intends to have one or more investment advisers
(Sub-Advisers) provide investment advisory and portfolio management services
with respect to the Portfolios other than any Portfolios managed by UBS Global
Americas;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, it is agreed between the parties hereto as follows:
14. Appointment. The Trust hereby appoints UBS Global Americas as investment
manager and administrator of the Trust and each Portfolio for the period and
on the terms set forth in this Agreement. UBS Global Americas accepts such
appointment and agrees to render the services herein set forth, for the
compensation herein provided.
15. Duties as Investment Manager for UBS PACE Money Market Investments.
(a) Subject to the supervision of the Trusts Board of Trustees (Board), UBS
Global Americas will provide a continuous investment program for UBS PACE
Money Market Investments, including investment research and management.
UBS Global Americas will determine from time to time what securities and
other investments will be purchased, retained or sold by UBS PACE Money
Market Investments. UBS Global Americas will be responsible for placing
purchase and sell orders for investments and for other related transactions.
UBS Global Americas will provide services under this Agreement in accordance
with UBS PACE Money Market Investments investment objective, policies and
restrictions as stated in the Trusts Registration Statement as it applies
to UBS PACE Money Market Investments.
(b) UBS Global Americas agrees that in placing orders with brokers, it will
attempt to obtain the best net result in terms of price and execution. In
no instance will portfolio securities be purchased from or sold to UBS
Global Americas or any affiliated person thereof, except in accordance with
the federal securities laws and the rules and regulations thereunder. UBS
Global Americas may aggregate sales and purchase orders of the assets of the
Portfolio with similar orders being made simultaneously for other accounts
advised by UBS Global Americas or its affiliates. Whenever UBS Global
Americas simultaneously places orders to purchase or sell the same security
on behalf of UBS PACE Money Market Investments and one or more other
accounts advised by UBS Global Americas, such orders will be allocated as
to price and amount among all such accounts in a
manner believed to be equitable to each account. The Trust recognizes that
in some cases this procedure may adversely affect the results obtained for
UBS PACE Money Market Investments.
(c) UBS Global Americas will maintain all books and records required to be
maintained by UBS Global Americas pursuant to the 1940 Act and the rules
and regulations promulgated thereunder with respect to transactions on
behalf of UBS PACE Money Market Investments, and will furnish the Board
with such periodic and special reports as the Board reasonably may request.
In compliance with the requirements of Rule 31a-3 under the 1940 Act, UBS
Global Americas hereby agrees that all records which it maintains for the
Trust and UBS PACE Money Market Investments are the property of the Trust,
agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940
Act any records which it maintains for the Trust and which are required to
be maintained by Rule 31a-1 under the 1940 Act, and further agrees to
surrender promptly to the Trust any records which it maintains for the
Trust upon request by the Trust.
(d) At such times as shall be reasonably requested by the Board, UBS
Global Americas will provide the Board with economic and investment
analyses and reports as well as quarterly reports setting forth the
performance of UBS PACE Money Market Investments and make available to the
Board any economic, statistical and investment services normally available
to institutional or other customers of UBS Global Americas.
(e) In accordance with procedures adopted by the Board, as amended from
time to time, UBS Global Americas is responsible for assisting in the fair
valuation of all portfolio securities and will arrange for the provision
of a price(s) from a party(ies) independent of UBS Global Americas for
each portfolio security for which the custodian does not obtain prices
in the ordinary course of business from an automated pricing service.
16. Duties as Investment Manager to Other PACE Portfolios; Appointment of
Sub-Advisers.
(a) Subject to the supervision and direction of the Board, UBS Global
Americas will provide to the Trust investment management evaluation services
principally by performing initial reviews of prospective Sub-Advisers for
each Portfolio other than UBS PACE Money Market Investments and supervising
and monitoring performance of the Sub-Advisers thereafter. UBS Global
Americas agrees to report to the Trust results of its evaluation,
supervision and monitoring functions and to keep certain books and records
of the Trust in connection therewith. UBS Global Americas further agrees
to communicate performance expectations and evaluations tothe Sub-Advisers,
and to recommend to the Trust whether agreements with Sub-Advisers should
be renewed, modified or terminated.
(b) UBS Global Americas is responsible for informing the Sub-Advisers of
the investment objective(s), policies and restrictions of the Portfolio(s)
for which the Sub-Adviser is responsible, for informing or ascertaining
that it is aware of other legal and regulatory responsibilities applicable
to the Sub-Adviser with respect to the Portfolio(s) for which the Sub-
Adviser is responsible, and for monitoring the Sub-Advisers discharge of
their duties; but UBS Global Americas is not responsible for the specific
actions (or inactions) of a Sub-Adviser in the performance of the duties
assigned to it.
(c) With respect to each Portfolio other than UBS PACE Money Market
Investments, UBS Global Americas shall enter into an agreement (Sub-
Advisory Agreement) with a Sub-Adviser in substantially the form attached
hereto as Exhibit I.
(d) UBS Global Americas shall be responsible for the fees payable to and
shall pay the Sub-Adviser of each Portfolio the fee as specified in the
Sub-Advisory Agreement relating thereto.
17. Duties as Administrator. UBS Global Americas will administer the
affairs of the Trust and each Portfolio subject to the supervision of
the Board and the following understandings:
(a) UBS Global Americas will supervise all aspects of the operations of
the Trust and each Portfolio, including oversight of transfer agency,
custodial and accounting services, except as hereinafter set forth;
provided, however, that nothing herein contained shall be deemed to
relieve or deprive the Board of its responsibility for and control of
the conduct of the affairs of the Trust and each Portfolio.
(b) UBS Global Americas shall provide the Trust and each Portfolio with
such corporate, administrative and clerical personnel (including officers
of the Trust) and services as are reasonably deemed necessary or advisable
by the Board, including the maintenance of certain books and records of
the Trust and each Portfolio.
(c) UBS Global Americas will arrange, but not pay, for the periodic
updating, filing and dissemination (as applicable) of the Trusts
Registration Statement, proxy material, tax returns and required reports to
each Portfolios shareholders and the Securities and Exchange Commission and
other appropriate federal or state regulatory authorities.
(d) UBS Global Americas will provide the Trust and each Portfolio with, or
obtain for it, adequate office space and all necessary office equipment and
services, including telephone service, heat, utilities, stationery supplies
and similar items.
(e) UBS Global Americas will provide the Board, on a regular basis, with
economic and investment analyses and reports and make available to the Board
upon request any economic, statistical and investment services normally
available to institutional or other customers of UBS Global Americas.
18. Further Duties. In all matters relating to the performance of this
Agreement, UBS Global Americas will act in conformity with the Trusts Trust
Instrument, By-Laws and the currently effective registration statement under
the 1940 Act and any amendments or supplements thereto (Registration
Statement) and with the instructions and directions of the Board, and will
comply with the requirements of the 1940 Act, the Advisers Act, and the rules
under each, Subchapter M of the Internal Revenue Code as applicable to
regulated investment companies, and all other applicable federal and state
laws and regulations.
19. Services Not Exclusive. The services furnished by UBS Global Americas
hereunder are not to be deemed exclusive and UBS Global Americas 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 UBS Global Americas
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.
20. Expenses.
(a) During the term of this Agreement, each Portfolio will bear all expenses
not specifically assumed by UBS Global Americas incurred in its operations and
the offering of its shares.
(b) Expenses borne by each Portfolio will include but will not be limited to
the following (or each Portfolios proportionate share of the following): (i)
the cost (including brokerage commissions) of securities purchased or sold by
the Portfolio and any losses incurred in connection therewith; (ii) fees
payable to and expenses incurred on behalf of the Portfolio by UBS Global
Americas under this Agreement; (iii) expenses of organizing the Trust and
each Portfolio; (iv) filing fees and expenses relating to the registrations
and qualification of the Portfolios shares and the Trust under federal and/or
state securities laws and maintaining such registration and qualifications;
(v) fees and salaries payable to the Trusts Trustees and officers who are not
interested persons of the Trust; (vi) all expenses incurred in connection
with the Trustees services, including travel expenses; (vii) taxes (including
any income or franchise taxes) and governmental fees; (viii) costs of any
liability, uncollectible items of deposit and other insurance and fidelity
bonds; (ix) any costs, expenses or losses arising out of a liability of or
claim for damages or other relief asserted against the Trust or the Portfolio
for violation of any law; (x) legal, accounting and auditing expenses,
including legal fees of special counsel for those Trustees of the Trust who
are not interested persons of the Trust; (xi) charges of custodians, transfer
agents and other agents; (xii) costs of preparing share certificates; (xiii)
expenses of setting in type and printing prospectuses and supplements
thereto, statement of additional information and supplements thereto,
reports and proxy materials for existing shareholders and costs of mailing
such materials to existing shareholders; (xiv) any extraordinary expenses
(including fees and disbursements of counsel, costs of actions, suits or
proceedings to which the Trust is a party and the expenses the Trust may
incur as a result of its legal obligation to provide indemnification to its
officers, Trustees, agents and shareholders) incurred by the Trust or the
Portfolio; (xv) fees, voluntary assessments and other expenses incurred in
connection with membership in investment company organizations; (xvi) cost
of mailing and tabulating proxies and costs of meetings of shareholders,
the Board and any committees thereof; (xvii) the cost of investment company
literature and other publications provided by the Trust to its Trustees and
officers; and (xviii) costs of mailing, stationery and communications
equipment.
(c) The Trust or the Portfolio may pay directly any expenses incurred by it
in its normal operations; and, if any such payment is consented to by UBS
Global Americas and acknowledged as otherwise payable by UBS Global Americas
pursuant to this Agreement, the Portfolio may reduce the fee payable to UBS
Global Americas pursuant to Paragraph 8 thereof by such amount. To the
extent that such deductions exceed the fee payable to UBS Global Americas
on any monthly payment date, such excess shall be carried forward and
deducted in the same manner from the fee payable on succeeding monthly
payment dates.
(d) UBS Global Americas will assume the cost of any compensation for services
provided to the Trust received by the officers of the Trust and by those
Trustees who are interested persons of the Trust.
(e) The payment or assumption by UBS Global Americas of any expenses of the
Trust or a Portfolio that UBS Global Americas is not required by this
Agreement to pay or assume shall not obligate UBS Global Americas to pay or
assume the same or any similar expense of the Trust or a Portfolio on any
subsequent occasion.
21. Compensation.
(a) For the administrative services provided to each Portfolio, the Portfolio
will pay to UBS Global Americas a fee, computed daily and paid monthly, at
an annual rate of 0.20% of each Portfolios average daily net assets.
(b) For investment management services provided pursuant to this Agreement,
each Portfolio of the Trust shall pay to UBS Global Americas a fee, computed
daily and paid monthly on the first business day of the next succeeding
calendar month, at the annual percentage rate of each such Portfolios average
daily net assets as set forth in Schedule I to this Agreement.
(c) For the services provided and the expenses assumed pursuant to this
Agreement with respect to any Portfolio hereafter established, such Portfolio
will pay to UBS Global Americas from the assets of the Portfolio a fee in the
amount to be agreed upon in a written fee agreement (Fee Agreement) executed
by the Trust on behalf of the Portfolio and by UBS Global Americas. All such
Fee Agreements shall provide that they are subject to all terms and
conditions of this Agreement.
(d) The fee shall be computed daily and paid monthly to UBS Global Americas
on the first business day of the next succeeding calendar month.
(e) If this Agreement becomes effective or terminates before the end of any
month, the fee for the period from the effective day 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.
22. Limitation of Liability of UBS Global Americas. UBS Global Americas,
its officers, directors, employees and delegates, including any Sub-Adviser
or the Trust, shall not be liable for any error of judgment or mistake of
law or for any loss suffered by any Portfolio, the Trust or any of its
shareholders, 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 or on the part of its officers, directors, employees or
delegates of their obligations and duties under this Agreement. Any person,
even though also an officer, director, employee, or agent of UBS Global
Americas who may be or become an officer, Trustee, employee or agent of the
Trust shall be deemed, when rendering services to any Portfolio or the Trust
or acting with respect to any business of such Portfolio or the Trust, to be
rendering such service to or acting solely for the Portfolio or the Trust
and as an officer, director, employee, or agent or one under the control or
direction of UBS Global Americas even though paid by it.
23. Limitation of Liability of the Trustees and Shareholders of the Trust.
The Trustees of the Trust and the shareholders of any Portfolio shall not
be liable for any obligations of any Portfolio or the Trust under this
Agreement, and UBS Global Americas agrees that, in asserting any rights or
claims under this Agreement, it shall look only to the assets and property
of the Trust in settlement of such right or claim, and not to such Trustees
or shareholders.
24. Duration and Termination.
(a) As to any Portfolio, this Agreement shall become effective upon the date
the Portfolio commences investment operations provided that, with respect to
any Portfolio, 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 cast
in person at a meeting called for the purpose of voting on such approval,
and 9ii) by vote of a majority of that Portfolios outstanding voting
securities.
(b) Unless sooner terminated as provided herein, this Agreement shall
continue automatically for successive annual periods of twelve months each,
provided that such continuance is specifically approved at least annually
(i) by vote of a majority of those Trustees of the Trust who are not parties
to this Agreement or interested persons of any such party, cast in person at
a meeting called for the purpose of voting on such approval, and (ii) by the
Board or, with respect to any given Portfolio, by vote of a majority of the
outstanding voting securities of such Portfolio.
(c) Notwithstanding the foregoing, with respect to any Portfolio 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 sixty days written notice to UBS Global
Americas and may be terminated by UBS Global Americas at any time, without
the payment of any penalty, on sixty days written notice to the Trust.
Termination of this Agreement with respect to any given Portfolio shall in
no way affect the continued validity of this Agreement or performance
thereunder with respect to any other Portfolio. This Agreement will
automatically terminate in the event of its assignment.
25. 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 amendment of this
Agreement as to any given Portfolio shall be effective until approved by
vote of a majority of such Portfolios outstanding voting securities.
26. Governing Law. This Agreement shall be construed in accordance with the
laws of the State of Delaware, without giving effect to the conflicts of
laws principles thereof. To the extent that the applicable laws of the State
of Delaware conflict with the applicable provisions of the 1940 Act, the
latter shall control.
27. 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, national securities exchange, net assets, prospectus,
sale, sell and security shall have the same meaning as such terms have in
the 1940 Act, subject to such exemption as may be granted by the Securities
and Exchange Commission by any rule, regulation or order. Where the effect
of a requirement of the 1940 Act reflected in any provision of this
Agreement is relaxed by a rule, regulation or order of the Securities and
Exchange Commission, whether of special or general application, such
provision shall be deemed to incorporate the effect of such rule,
regulation or order.
IN WITNESS WHEREOF; the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first
above written.
UBS PACE SELECT ADVISORS TRUST
Attest: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President & Assistant Treasury
By: /s/ Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
Title: Vice President & Treasurer
UBS GLOBAL ASSET MANAGEMENT (AMERICAS) INC.
Attest: /s/Xxxx Xxxxxxx
Name: Xxxx Xxxxxxx
Title: Director & Associate General Counsel
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Executive Director & Senior Associate General Counsel
Schedule I
Advisory Fee
UBS PACE Money Market Investments 0.15%
UBS PACE Government Securities Fixed Income Investments
Assets Under Management Fee
$0 - $250 million 0.50%
On the next $ 250 million - $500 million 0.45%
On the next $500 million - $750 million 0.425%
On the next $750 million - $1 billion 0.40%
Above $1 billion 0.375%
UBS PACE Intermediate Fixed Income Investments
Assets Under Management Fee
$0 - $250 million 0.40%
On the next $ 250 million - $500 million 0.35%
On the next $500 million - $750 million 0.325%
On the next $750 million - $1 billion 0.30%
Above $1 billion 0.275%
UBS PACE Strategic Fixed Income Investments
Assets Under Management Fee
$0 - $250 million 0.50%
On the next $ 250 million - $500 million 0.45%
On the next $500 million - $750 million 0.425%
On the next $750 million - $1 billion 0.40%
Above $1 billion 0.375%
UBS PACE Municipal Fixed Income Investments
Assets Under Management Fee
$0 - $250 million 0.40%
On the next $ 250 million - $500 million 0.35%
On the next $500 million - $750 million 0.325%
On the next $750 million - $1 billion 0.30%
Above $1 billion 0.275%
UBS PACE Global Fixed Income Investments
Assets Under Management Fee
$0 - $500 million 0.60%
On the next $500 million - $1 billion 0.575%
Above $ 1 billion 0.55%
UBS PACE Large Co Value Equity Investments 0.60%
UBS PACE Large Co Growth Equity Investments
Assets Under Management Fee
$0 - $500 million 0.60%
On the next $ 500 million - $1 billion 0.575
On the next $1 billion - $2 billion 0.55%
Above $ 2 billion 0.525%
UBS PACE Small/Medium Co Value Equity Investments
Assets Under Management Fee
$0 - $ 750 million 0.60%
Above $ 750 million 0.575%
UBS PACE Small/Medium Co Growth Equity Investments
Assets Under Management Fee
$0 - $ 750 million 0.60%
Above $ 750 million 0.575%
UBS PACE International Equity Investments
Assets Under Management Fee
$0 - $500 million 0.70%
On the next $ 500 million - $1 billion 0.675%
On the next $1 billion -- $2 billion 0.65%
Above $ 2 billion 0.625%
UBS PACE International Emerging Markets Equity Investments
Assets Under Management Fee
$0 - $500 million 0.90%
On the next $ 500 million - $1 billion 0.875%
On the next $1 billion - $2 billion 0.85%
Above $ 2 billion 0.825
UBS PACE High Yield Investments
Assets Under Management Fee
$0 - $500 million 0.60%
On the next $500 million - $1 billion 0.55%
On the next $1 billion - $1.5 billion 0.525%
On the next $1.5 billion - $2 billion 0.500%
Above $2 billion 0.475%
UBS PACE Alternative Strategies Investments
Assets Under Management Fee
$0 - $500 million 1.200%
On the next $500 million - $1 billion 1.150%
On the next $1 billion - $1.5 billion 1.100%
On the next $1.5 billion - $2 billion 1.075%
Above $2 billion 1.050%
EXHIBIT 1
FORM of SUB-ADVISORY AGREEMENT
Agreement made as of [Date] between UBS GLOBAL ASSET MANAGEMENT (AMERICAS) INC.
(UBS Global Americas), a Delaware corporation, and [Sub-Adviser] (Sub-
Adviser), a limited liability company (the Agreement).
RECITALS
(1) UBS Global Americas has entered into a Management Agreement dated April
1, 2006 and amended as of August 1, 2006 (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 [Portfolio] (Portfolio);
(2) UBS Global Americas desires to retain the Sub-Adviser to furnish certain
investment advisory services to UBS Global Americas and the Portfolio; and
(3) the Sub-Adviser is willing to provide such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained, UBS Global Americas and the Sub-Adviser agree as follows:
28. Appointment. UBS Global Americas hereby appoints the Sub-Adviser as an
investment sub-adviser with respect to the Portfolio 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.
29. Duties as Sub-Adviser.
(a) Subject to the supervision and direction of the Trusts Board of Trustees
(the Board) and review by UBS Global Americas, and any guidelines adopted by
the Board or UBS Global Americas, the Sub-Adviser will provide a continuous
investment program for all or a designated portion of the assets (Segment) of
the Portfolio, including investment research and discretionary management with
respect to all securities and investments and cash equivalents in the Portfolio
or Segment. The Sub-Adviser may from time to time seek research assistance and
may rely upon resources available to it through its affiliated companies to the
extent such actions would not constitute an assignment for purposes of the 1940
Act but in no case shall such assistance and/or reliance relieve the Sub-Adviser
of any of its obligations hereunder, nor shall the Portfolio or Segment or UBS
Global Americas be responsible for any additional fees or expenses hereunder as
a result. 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 will be responsible for voting proxies of issuers of securities held by
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).
(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) 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, 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, 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 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 Americas or the Sub-Adviser, 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 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 Americas recognizes that in
some cases this procedure may adversely affect the results obtained for the
Portfolio or Segment.
(d) The Sub-Adviser will maintain all books and records required to be
maintained pursuant to the 1940 Act and the rules and regulations promulgated
thereunder with respect to transactions by the Sub-Adviser on behalf of the
Portfolio or Segment, and will furnish the Board and UBS Global Americas with
such periodic and special reports as the Board or UBS Global Americas reasonably
may request. In compliance with the requirements of Rule 31a-3 under the 1940
Act, the Sub-Adviser hereby agrees that all records which it maintains for the
Portfolio are the property of the Trust, agrees to preserve for the periods
prescribed by Rule 31 a-2 under the 1940 Act any records that it maintains for
the Portfolio and that are required to be maintained by Rule 31a-1 under the
1940 Act, and further agrees to surrender promptly to the Trust any records
which it maintains for the Portfolio upon request by the Trust.
(e) At such times as shall be reasonably requested by the Board or UBS Global
Americas, the Sub-Adviser will provide the Board and UBS Global Americas 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 Americas any economic, statistical and investment
services that the Sub-Adviser normally makes available to its institutional or
other customers.
(f) 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 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.
30. 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 and with the instructions and
directions of the Board and UBS Global Americas; and will comply with the
requirements of the 1940 Act, and the Investment Advisers Act of 1940, as
amended (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 Americas agrees to provide to the Sub-Adviser copies of
the Trusts Trust Instrument, By-Laws, Registration Statement, written
instructions and directions of the Board and UBS Global Americas, and any
amendments or supplements to any of these materials as soon as practicable after
such materials become available; and further agrees to identify to the
Sub-Adviser in writing any broker-dealers that are affiliated with UBS Global
Americas (other than UBS Financial Services Inc.).
31. 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.
32. Compensation.
(a) For the services provided and the expenses assumed by the Sub-Adviser
pursuant to this Agreement, UBS Global Americas, not the Portfolio, will pay to
the Sub-Adviser a fee, computed daily and payable monthly, at an annual rate of
[0.__]% 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) 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.
33. 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 Americas 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
series 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, the Trusts custodian, administrator, distributor or any broker-dealer
selected with due care by the Sub-Adviser to effect transactions for the
Portfolio.
In particular, in the event the Sub-Adviser shall manage only a portion of the
Portfolios investments, 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.
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.
34. 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 Americas 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 will provide UBS Global
Americas 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, the president or a
vice-president of the Sub-Adviser shall certify to UBS Global Americas 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 Americas,
the Sub-Adviser shall permit UBS Global Americas, its employees or its agents to
examine the reports required to be made by the Sub-Adviser pursuant to Rule
17j-1 and all other records relevant to the Sub-Advisers code of ethics.
(c) The Sub-Adviser has provided UBS Global Americas 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 Americas at
least annually
(d) The Sub-Adviser will notify UBS Global Americas 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 Americas or any of their respective affiliates in
offering, marketing or other promotional materials without the express written
consent of UBS Global Americas.
35. 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.
36. 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 Americas 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 Americas: (1) 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 Americas, 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 Americas. This Agreement will terminate automatically in the event
of its assignment or upon termination of the Management Agreement, as it relates
to this Portfolio.
37. 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).
38. 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.
39. 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.
40. Notices. Any notice herein required is to be in writing and is deemed to
have been given to the Sub-Adviser or UBS Global Americas 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 Americas will be sent to the attention of the General Counsel. All
notices provided to the Sub-Adviser will be sent to the attention of the
Compliance Officer.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their duly authorized signatories as of the date and year first
above written.
UBS GLOBAL ASSET MANAGEMENT (AMERICAS) INC.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attest:
By:
Name:
Title:
By:
Name:
Title:
[SUB-ADVISER]
[Address]
Attest:
By:
Name:
Title:
By:
Name:
Title:
For period ending January 31, 2007 Exhibit 77Q.1
File number 811-8764
INVESTMENT MANAGEMENT AND ADMINISTRATION FEE AGREEMENT
FOR UBS PACE REAL ESTATE SECURITIES INVESTMENTS
Agreement made as of November 30, 2006 between UBS PACE Select Advisors Trust,
a Delaware statutory trust (Trust), on behalf of UBS PACE Real Estate Securities
Investments (Portfolio), a series of shares of beneficial interest of the Trust,
and UBS Global Asset Management (Americas) Inc. (UBS Global AM), a Delaware
corporation registered as an investment adviser under the Investment Advisers
Act of 1940, as amended.
WHEREAS, the Trust has appointed UBS Global AM as investment manager and
administrator for each series of shares of beneficial interest of the Trust as
now exists and as hereafter may be established, pursuant to an Investment
Management and Administration Agreement dated as of April 1, 2006, and amended
as of August 1, 2006 between the Trust and UBS Global AM (Management Agreement);
and
WHEREAS, the Portfolio has been established as a new series of shares of the
Trust;
NOW THEREFORE, in consideration of the premises and mutual covenants herein
contained, it is agreed between the parties hereto as follows:
1. For the administrative services provided to the Portfolio, the Portfolio
will pay to UBS Global AM a fee, computed daily and paid monthly, at an annual
rate of 0.20% of the Portfolios average daily net assets.
2. For the investment management services provided to the Portfolio,
the Portfolio shall pay to UBS Global AM a fee, computed daily and paid monthly
on the first business day of the next succeeding calendar month, at the annual
percentage rate of such Portfolios average daily net assets as set forth below:
Portfolio Assets Fee
$0-500 million 0.600%
Above $500 million and up to $1 billion 0.550%
Above $1 billion and up to $1.5 billion 0.525%
Above $1.5 billion and up to $2 billion 0.500%
Above $2 billion 0.475%
3. The fee shall be computed daily and paid monthly to UBS Global AM on the
first business day of the next succeeding calendar month.
4. If this Fee Agreement becomes effective or terminates before the end of any
month, the fee for the period from the effective day 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.
5. This Fee Agreement shall be subject to all terms and conditions of the
Management Agreement.
6. This Fee Agreement shall become effective upon the date written above,
provided that it shall not take effect unless it has first been approved (i)
by a vote of a majority of the Trustees of the Trust who are not parties to
this Fee Agreement or the Management Agreement or interested persons of any
such persons at a meeting called for the purpose of such approval and (ii) by
vote of a majority of the Portfolios outstanding voting securities.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their duly authorized officers as of the day and year first written
above.
UBS PACE SELECT ADVISORS TRUST
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: VP & Assistant Treasurer
By: /s/ Xxxxxx Xxx
Name: Xxxxxx Xxx
Title: VP & Assistant Secretary
UBS GLOBAL ASSET MANAGEMENT (AMERICAS) INC.
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Executive Director and Sr. Assoc. Gen. Counsel
By: /s/ Xxxx Xxxxxxx
Name: Xxxx Xxxxxxx
Title: Director & Assoc. General Counsel
For period ending January 31, 2007 Exhibit 77Q.1
File number 811-8764
UBS PACE SELECT ADVISORS TRUST
CERTIFICATE OF VICE PRESIDENT AND ASSISTANT SECRETARY FOR BOARD RESOLUTIONS
APPROVING BYLAW AMENDMENT
I, Xxxxx X. Xxxxxx, Vice President and Assistant Secretary of UBS PACE Select
Advisors Trust (the Trust), hereby certify that, at a duly convened meeting of
the Board of Trustees of the Trust held on November 15, 2006, the Board of
Trustees duly and unanimously approved the following preambles and resolution:
WHEREAS, the Nominating and Corporate Governance Committee of the Board has
recommended to the full Board that the Boards mandatory retirement age be
changed from 72 to 74; and
WHEREAS, the Board has accepted the Nominating and Corporate Governance
Committees recommendation and has determined that it is in the best interest of
the Trust to change the Boards retirement age policy;
NOW, THEREFORE, BE IT
RESOLVED, that pursuant to the relevant section of the Funds Amended and
Restated Bylaws, as amended (the Bylaws), concerning amendments to the Trusts
Bylaws, Article II, Section 2 of the Trusts Bylaws be, and it hereby is,
amended to read as follows:
Section 2. Retirement of Trustees. Each Trustee who has attained the age of
seventy-four (74) years shall retire from service as a Trustee on the last day
of the month in which he or she attains such age. Notwithstanding anything in
this Section, a Trustee may retire at any time as provided for in the governing
instrument of the Fund.
IN WITNESS WHEREOF, I have signed this certificate as of the 21st day of March,
2007.
UBS PACE SELECT ADVISORS TRUST
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President and Assistant Secretary
DC - 406537.1
