For period ending June 30, 2006
Exhibit 77Q1
File number 811-3504
UBS RMA TAX-FREE FUND INC.
SUB-ADVISORY AND SUB-ADMINISTRATION CONTRACT
Contract made as of April 1, 2006, between UBS FINANCIAL SERVICES INC.
( UBS Financial Services ), a Delaware corporation registered as a
broker-dealer under the Securities Exchange Act of 1934, as amended ( 1934
Act ) , and as an investment adviser under the Investment Advisors Act
of 1940, as amended ( Advisers Act ), and UBS GLOBAL ASSET MANAGEMENT
(AMERICAS) INC. ( UBS Global Americas ), a Delaware corporation registered
as an investment adviser under the Advisers Act.
WHEREAS, UBS Financial Services has entered into an Investment
Advisory and Administration Contract dated March 1, 1989 ( Advisory Contract)
with UBS RMA Tax-Free Fund Inc. ( Corporation ), an open-end management
investment company registered under the Investment Company Act of 1940,
as amended ( 1940 Act ), which intends to offer for public sale distinct
series of shares of common stock (Series ), each corresponding to a distinct
portfolio; and
WHEREAS, under the Advisory Contract UBS Financial Services has
agreed to provide certain investment advisory and administrative services
to the Series as now exist and as hereafter may be established; and
WHEREAS, the Advisory Contract authorizes UBS Financial Services to
delegate certain of its duties as investment adviser and administrator
under the Advisory Contract to a sub-adviser or sub-administrator; and
WHEREAS, UBS Financial Services wishes to retain UBS Global
Americas as sub-adviser and sub-administrator to provide certain investment
advisory and administrative services to UBS Financial Services and each
Series, and UBS Global Americas is willing to render such services as
described herein upon the terms set forth below;
NOW, THEREFORE, in consideration of the premises and mutual
cenants contained herein, it is agreed between the parties as follows:
1. Appointment. UBS Financial Services hereby appoints UBS Global
Americas as its sub-adviser and sub-administrator with respect to each
Series, and UBS Global Americas accepts such appointment and agrees that
it will furnish the services set forth in paragraph 2 below.
2. Services and Duties of UBS Global Americas.
(a) Subject to the supervision of the Board of Directors ( Board )
and UBS Financial Services, UBS Global Americas will provide a continuous
investment program for each Series including investment research and
management with respect to all securities, investments and cash
equivalents held in the portfolio of each Series. UBS Global Americas
will determine from time to time what securities and other investments
will be purchased, retained or sold by each Series.
(b) UBS Global Americas agrees that in placing orders with brokers and
dealers, it will attempt to obtain the best net result in terms of
price and execution; provided that, on behalf of any Series, UBS Global
Americas may, in its discretion, purchase and sell portfolio securities
to and from brokers and dealers who provide the Series with research,
analysis, advice and similar services, and UBS Global Americas may
pay to those brokers and dealers, in return for research and analysis,
a higher commission or spread than may be charged by other brokers
and dealers, subject to UBS Global Americas determining in good faith
that such commission or spread is reasonable in terms either of the
particular transaction or of the overall responsibility of UBS Global
Americas to such Series and its other clients, and that the total
commissions or spreads paid by such Series will be reasonable in
relation to the benefits to such Series over the long term. In no
instance will portfolio securities be purchased from or sold to UBS
Financial Services, UBS Global Americas or any affiliated person thereof;
except in accordance with the federal securities laws and the rules and
regulations thereunder. Whenever UBS Global Americas simultaneously
places orders to purchase or sell the same security on behalf of a
Series 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 Corporation
recognizes that in some cases this procedure may adversely affect the
results obtained for a Series.
(c)UBS Global Americas will oversee the maintenance of all books and
records with respect to the securities transactions of each Series and
will furnish the Board with such periodic and special reports as UBS
Financial Services or 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 Corporation
are the property of the Corporation, agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any records which it maintains
for the Corporation and which are required to be maintained by Rule 31a-1
under the 1940 Act, and further agrees to surrender promptly to the
Corporation any records which it maintains for the Corporation upon
request by the Corporation.
(d)UBS Global Americas will oversee the computation of the net asset value
and net income of each Series as described in the currently effective
registration statement of the Corporation under the Securities Act of
1933, as amended, and 1940 Act and any supplements thereto ( Registration
Statement ) or as more frequently requested by UBS Financial Services or
the Board.
(e) UBS Global Americas will assist in administering the affairs of the
Corporation and each Series, subject to the supervision of the Board and
UBS Financial Services, and further subject to the following understandings:
(i) UBS Global Americas will supervise all aspects of the operation of the
Corporation and each Series 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 affairs of
the Corporation and each Series.
(ii) UBS Global Americas will provide the Corporation and each Series with
such administrative and clerical personnel (including officers of the
Corporation) as are reasonably deemed necessary or advisable by the Board
and UBS Financial Services, and UBS Global Americas will pay the
salaries of all such personnel.
(iii) UBS Global Americas will provide the Corporation and each Series
with such administrative and clerical services as are reasonably deemed
necessary or advisable by the Board and UBS Financial Services, including
the maintenance of certain of the books and records of the Corporation
and each Series.
(iv) UBS Global Americas will arrange, but not pay for, the periodic
preparation, updating, filing and dissemination (as applicable) of the
Corporation s Registration Statement, proxy material, tax returns and
reports to shareholders of each Series, the Securities and Exchange Commission
and other appropriate federal or state regulatory authorities.
(v) UBS Global Americas will provide the Corporation and each Series 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.
3. Duties Retained by UBS Financial Services. UBS Financial Services
will continue to provide to the Board and each Series the services described
in subparagraphs 3(e), (f) and (g) of the Advisory Contract.
4. Further Duties. In all matters relating to the performance of this
Contract, UBS Global Americas will act in conformity with the Articles of
Incorporation, By-Laws and Registration Statement of the Corporation and
with the instructions and directions of the Board and UBS Financial Services,
and will comply with the requirements of the 1940 Act, the rules thereunder,
and all other applicable federal and state laws and regulations.
5. Services Not Exclusive. The services furnished by UBS Global Americas
hereunder are not to be deemed to be exclusive, and UBS Global Americas
shall be free to furnish similar services to others so long as its services
under this Contract are not impaired thereby. Nothing in this Contract
shall limit or restrict the right of any director, officer or employee of
UBS Global Americas who may also be a director, officer or employee of
the Corporation, 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.
6. Expenses. During the term, of this Contract, UBS Global Americas
will pay all expenses incurred by it in connection with its services under
this Contract.
7. Compensation. For the services provided and expenses assumed by
UBS Global Americas pursuant to this Contract with respect to each Series,
UBS Financial Services will pay to UBS Global Americas a percentage of the
fee received by UBS Financial Services pursuant to the Advisory Contract
with respect to such Series, such percentage to be equal to, on an annual
basis, 0.08% of such Series average daily net assets, such compensation
to be paid monthly.
8. Limitation of Liability of UBS Global AM. UBS Global Americas will
not be liable for any error of judgment or mistake of law or for any loss
suffered by UBS Financial Services or the Corporation or the shareholders
of any Series in connection with the performance of this Contract, 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 or duties under this Contract. Any person, even
though also an officer, director, employee, or agent of UBS Global Americas
who may be or become an officer, director, employee or agent of the
Corporation, shall be deemed, when rendering services to any Series or
the Corporation or acting with respect to any business of such Series or
the Corporation, to be rendering such services to or acting solely for
the Series or the Corporation and not as an officer, director, employee,
or agent or one under the control or direction of UBS Global Americas even
though paid by it.
9. Duration and Termination.
(a) This Contract will become effective upon the date hereabove written
provided that, with respect to any Series, this Contract shall not take
effect unless it has first been approved (i) by a vote of a majority of
those directors of the Corporation who are not parties to this Contract
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 Series, by vote of a majority of the outstanding voting
securities of such Series.
(b) Unless sooner terminated as provided herein, this Contract will continue
automatically for successive periods of 12 months each, provided that such
continuance is specifically approved at least annually (i)by a vote of a
majority of those directors of the Corporation who are not parties to this
Contract 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 Series, by vote of a majority of the outstanding
voting securities of such Series.
(c) Notwithstanding the foregoing, with respect to any Series, this
Contract may be terminated by either party hereto at any time, without the
payment of any penalty, on sixty days written notice to the other party;
this Contract also may be terminated at any time, without the payment of
any penalty, by vote of the Board or by vote of a majority of the outstanding
voting securities of such Series on sixty days written notice to UBS
Global Americas and UBS Financial Services. Termination of this Contract
with respect to any given Series shall in no way affect the continued validity
of this Contract or the performance thereunder with respect to any other
Series. This Contract will automatically terminate in the event of its
assignment and will automatically terminate upon termination of the Advisory
Contract.
10. Amendment of this Contract. No provision of this Contract 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 Contract as to
any given Series shall be effective until approved by vote of a majority of
such Series outstanding voting securities.
11. Governing Law. This Contract shall be construed in accordance with
the laws of the State of Delaware and the 1940 Act. 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.
12. Miscellaneous. The captions in this Contract 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 Contract shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Contract shall
not be affected thereby. This Contract shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors.
As used in this Contract, the terms majority of the outstanding voting
securities, interested person and assignment shall have the same
meaning as such terms have in the 1940 Act.
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 FINANCIAL SERVICES INC.
Attest:/s/ Xxxxxx Xxxxx /s/ Xxxxxxx Xxxxxxx
Name: Xxxxxx Xxxxx Name: Xxxxxxx Xxxxxxx
Title: Executive Director Title: Managing Director & Head of ICS
UBS GLOBAL ASSET MANAGEMENT (AMERICAS) INC.
Attest:/s/ Xxxx Xxxxxxx /s/ Xxxxx X. Xxxxxx
Name: Xxxx Xxxxxxx Name: Xxxxx X. Xxxxxx
Title: Director & Assoc. Gen l Counsel Title: Executive Director & Sr.
Assoc. Gen.Counsel
