For period
ending
January 31,
2017
Exhibit 77Q1
File number
811-8764
SUB-ADVISORY AGREEMENT
Agreement dated as of January 24, 2017 between
UBS Asset Management (Americas) Inc. ("UBS AM"), a
Delaware corporation, and Xxxxx Capital Management
LLC ("Sub- Adviser"), a Delaware limited liability
company (the "Agreement").
RECITALS
(1) UBS AM has entered into a Management
Agreement dated as of August 1, 2008 ("Management
Agreement"), with PACE(r) Select Advisors Trust ("Trust"),
an open-end management investment company
registered under the Investment Company Act of 1940, as
amended ("1940 Act"), with respect to PACE(r)
Small/Medium Co Value Equity Investments ("Portfolio");
and
(2) UBS AM is authorized to retain one or more sub-
advisers to furnish certain investment advisory services to
UBS AM and the Portfolio;
(3) UBS AM desires to retain the Sub-Adviser to
furnish certain investment advisory services to UBS AM
and the Portfolio or a designated portion of the assets
("Segment") of the Portfolio; and
(4) The Sub-Adviser is willing to furnish such services;
Now therefore, in consideration of the premises and
mutual covenants herein contained, UBS AM and the
Sub-Adviser agree as follows:
1. Appointment. UBS AM hereby appoints the Sub-
Adviser as an investment sub-adviser with respect to the
Portfolio or Segment for the period and on the terms set
forth in this Agreement. The Sub-Adviser accepts that
appointment and agrees to render the services herein set
forth, for the compensation herein provided.
2. Duties as Sub-Adviser.
(a) Subject to the supervision and direction of the
Trust's Board of Trustees (the "Board") and review by
UBS AM, and any written guidelines adopted by the
Board or UBS AM the Sub-Adviser will provide a
continuous investment program for the Portfolio or
Segment, including investment research and
discretionary management with respect to all securities
and investments and cash equivalents in the Portfolio or
Segment. The Sub-Adviser will determine from time to
time what investments will be purchased, retained or sold
by the Portfolio or Segment. The Sub-Adviser will be
responsible for placing purchase and sell orders for
investments and for other related transactions for the
Portfolio or Segment. The Sub-Adviser understands that
the Portfolio's assets need to be managed so as to permit
the Portfolio to qualify or to continue to qualify as a
regulated investment company under Subchapter M of
the Internal Revenue Code, as amended ("Code"). The
Sub-Adviser will provide services under this Agreement in
accordance with the Portfolio's investment objective,
policies and restrictions as stated in the Trust's currently
effective registration statement under the 1940 Act, and
any amendments or supplements thereto ("Registration
Statement"). The Sub-Adviser, on each business day,
shall provide UBS AM and the Trust's custodian such
information as UBS AM and the Trust's custodian may
reasonably request relating to all transactions concerning
the Portfolio or Segment.
UBS AM hereby designates and appoints the Sub-Adviser
as its and the Portfolio's limited purpose agent and
attorney-in-fact, without further prior approval of UBS
AM (except as expressly provided for herein or as may be
required by law) to make and execute, in the name and
on behalf of the Portfolio, all agreements, instruments
and other documents and to take all such other action
which the Sub-Adviser considers necessary or advisable
to carry out its duties hereunder. By way of example and
not by way of limitation, in connection with any purchase
for the Portfolio or Segment of securities or instruments
that are not registered under the U.S. Securities Act of
1933, as amended (the "Securities Act"), the Sub-Adviser
shall have the full power and authority, among other
things, to: (i) commit to purchase such securities for the
Portfolio on the terms and conditions under which such
securities are offered; (ii) execute such account opening
and other agreements, instruments and documents
(including, without limitation, purchase agreements,
subscription documents, ISDA and other swap and
derivative documents), and make such commitments, as
may be required in connection with the purchase and sale
of such securities or instruments; (iii) represent that the
Portfolio is an "accredited investor" as defined in Rule 501
(a) of Regulation D under the Securities Act and a
"Qualified Institutional Buyer" as defined in Rule 144A (a)
(1) (i) under the Securities Act; and (iv) commit that such
securities will not be offered or sold by the Portfolio
except in compliance with the registration requirements
of the Securities Act or an exemption therefrom. This
power-of-attorney is a continuing power-of-attorney and
shall remain in full force and effect until revoked by UBS
AM or the Trust in writing, but any such revocation shall
not affect any transaction initiated prior to receipt by the
Sub-Adviser of such notice.
When investing in non-US securities, the Sub-Advisor is
responsible for identifying and complying with all
applicable laws and regulations of the jurisdiction in
which the security is traded. The Sub-Advisor shall use
the degree of care, diligence and skill that a reasonably
prudent investment manager would exercise under the
circumstances not to establish or add to existing positions
in securities that are subject to any applicable foreign
ownership limits or levels ("FOL'') at a time when it is
reasonably foreseeable that such purchases will have to
be sold due to FOL limits or levels.
(b) The Sub-Adviser agrees that it will not consult
with any other sub-adviser ("Other Sub-Adviser") for the
Trust or Portfolio concerning any transaction by the
Portfolio or Segment in securities or other assets,
including (i) the purchase by the Portfolio or Segment of a
security issued by the Other Sub-Adviser, or an affiliate of
the Other Sub-Adviser, to the Trust or Portfolio except as
permitted by the 1940 Act or (ii) transactions by the
Portfolio or Segment in any security for which the Other
Sub-Adviser, or its affiliate, is the principal underwriter.
(c) Unless otherwise instructed by UBS AM or the
Trust, the Sub-Adviser agrees that it will be responsible
for voting proxies of issuers of securities held by the
Portfolio or Segment. The Sub-Adviser further agrees
that it will adopt written proxy voting procedures that
shall comply with the requirements of the 1940 Act and
the Investment Advisers Act of 1940, as amended
("Advisers Act") ("Proxy Voting Policy"), and that shall be
acceptable to the Board. The Sub-Adviser shall also
provide its Proxy Voting Policy, and if requested by UBS
AM, a summary of such Proxy Voting Policy for inclusion
in the Trust's registration statement, and will provide
UBS AM with any material amendment to the Proxy
Voting Policy within a reasonable time after such
amendment has taken effect. The Sub-Adviser further
agrees that it will provide the Board on or before August
1st of each year, or more frequently as the Board may
reasonably request, with a written report of the proxies
voted during the most recent 12-month period ending
June 30, or such other period as the Board may designate,
in a format that shall comply with the 1940 Act and that
shall be acceptable to the Board.
(d) The Sub-Adviser agrees that upon the request of
UBS AM or the Board, Sub-Adviser shall exercise the
rights incident to the securities held by the Portfolio or
Segment in the context of a bankruptcy or other
reorganization. The Sub-Adviser further agrees that it
will keep UBS AM fully informed about any such actions
that it intends to take.
(e) The Sub-Adviser agrees that it will place orders
with brokers in accordance with 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-Adviser's determination in good faith that such
commission is reasonable in terms either of the particular
transaction or of the overall responsibility of the Sub-
Adviser to the Portfolio or Segment and its other clients
and that the total commissions paid by the Portfolio or
Segment will be reasonable in relation to the benefits to
the Portfolio or Segment over the long term. In no
instance will portfolio securities be purchased from or
sold to UBS AM or the Sub-Adviser, the Trust's principal
underwriter, or any affiliated person thereof, except in
accordance with the federal securities laws and the rules
and regulations thereunder. The Sub-Adviser may
aggregate sales and purchase orders with respect to the
assets of the Portfolio or Segment with similar orders
being made simultaneously for other accounts advised by
the Sub-Adviser or its affiliates. Whenever the Sub-
Adviser simultaneously places orders to purchase or sell
the same security on behalf of the Portfolio or Segment
and one or more other accounts advised by the Sub-
Adviser, the orders will be allocated as to price and
amount among all such accounts in a manner believed to
be equitable over time to each account. UBS AM
recognizes that in some cases this procedure may
adversely affect the results obtained for the Portfolio or
Segment.
Subject to the Sub-Adviser's obligations to seek best
execution, UBS AM agrees that the Sub-Adviser, in its
sole discretion, may place transactions on behalf of the
Portfolio or Segment and the Trust with any broker-
dealer deemed to be an affiliate (including affiliated
FCMs) of the Sub-Adviser (the "Affiliated Broker-
Dealers") so long as such transactions are effected in
conformity with the requirements (including any
applicable exemptions and administrative interpretations
set forth in Part 2A of the Sub-Adviser's Form ADV
Registration Statement on file with the Securities and
Exchange Commission ("Form ADV")) of Section
11(a)(1)(H) of the Securities Exchange Act of 1934 (the
"1934 Act"), and in compliance with Rules 17e-1 or 10f-3
under the 1940 Act or other applicable rules and the
Trust's policies and procedures thereunder. In all such
dealings, the Affiliated Broker-Dealers shall be authorized
and entitled to retain any commissions, remuneration or
profits which may be made in such transactions and shall
not be liable to account for the same to UBS AM, the
Portfolio or the Trust. In the event Sub-Adviser becomes
affiliated (as deemed under the federal securities laws)
with a broker-dealer during the term of this Agreement,
Sub-Adviser shall obtain the approval of the Trust's Board
of Trustees prior to commencement of transactions with
such broker-dealer on behalf of the Portfolio or the Trust.
UBS AM further authorizes the Sub-Adviser and its
Affiliated Broker-Dealers to execute agency cross
transactions (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 AM, the Portfolio and the Trust
should be aware, however, that in a Cross Transaction an
Affiliated Broker-Dealer will be receiving commissions
from both sides of the trade and, therefore, there is a
potentially conflicting division of loyalties and
responsibilities. Sub-Adviser shall effect such Cross
Transactions in compliance with Rule 206(3)-2 under the
Advisers Act, Rule 17a-7 under the 1940 Act, and any
other applicable provisions of the federal securities laws
and shall provide UBS AM with periodic reports
describing such agency cross transactions. UBS AM
understands that the authority of the Sub-Adviser to
execute agency Cross Transactions for the Portfolio is
terminable at will without penalty, effective upon receipt
by the Sub-Adviser of written notice from UBS AM, and
that the failure to terminate such authorization will result
in its continuation.
(f) The Sub-Adviser shall maintain separate detailed
records of all matters pertaining to the Portfolio or
Segment, including, without limitation, brokerage and
other records of all securities transactions. Any records
required to be maintained and preserved pursuant to the
provisions of Rule 31a-1 and Rule 31a-2 promulgated
under the 1940 Act that are prepared or maintained by
the Sub-Adviser on behalf of the Trust are the property of
the Trust and will be surrendered promptly to the Trust
upon request. The Sub-Adviser further agrees to preserve
for the periods prescribed in
Rule 31a-2 under the 1940 Act the records required to be
maintained under Rule 31a-1 under the 1940 Act, and will
furnish the Board and UBS AM with such periodic and
special reports as the Board or UBS AM may request.
(g) At such times as shall be reasonably requested by
the Board or UBS AM, the Sub-Adviser will provide the
Board and UBS AM with economic and investment
analyses and reports as well as quarterly reports setting
forth the performance of the Portfolio or Segment and
make available to the Board and UBS AM any economic,
statistical and investment services that the Sub-Adviser
normally makes available to its institutional or other
customers.
(h) In accordance with procedures adopted by the
Board, as amended from time to time, the Sub-Adviser is
responsible for assisting the Board and UBS AM in the fair
valuation of all portfolio securities in the Portfolio or
Segment and will use its reasonable efforts to arrange for
the provision of a price or prices from one or more parties
independent of the Sub-Adviser for each portfolio
security for which the custodian does not obtain prices in
the ordinary course of business from an automated
pricing service.
The Sub-Adviser also will provide such information or
perform such additional acts as are customarily
performed by a Sub-Adviser and may be required for the
Trust or UBS AM to comply with their respective
obligations under applicable federal securities laws,
including, without limitation, the
1940 Act, the Advisers Act, the 1934 Act, the Securities
Act, and any rule or regulation thereunder.
3. Further Duties. In all matters relating to the
performance of this Agreement, the Sub-Adviser will
seek to act in conformity with the Trust's Trust
Instrument, By-Laws and Registration Statement, the
Trust's policies and procedures for compliance by the
Trust with the Federal Securities Laws (as that term is
defined in Rule 38a-1 under the 1940 Act) provided to the
Sub-Adviser (together, the "Trust Compliance
Procedures") and with the written instructions and
written directions of the Board and UBS AM, and will
comply with the requirements of the 1940 Act, and the
Advisers Act, and the rules under each, the Code, and all
other federal and state laws and regulations applicable to
the Trust and the Portfolio. UBS AM agrees to provide to
the Sub-Adviser copies of the Trust's Trust Instrument,
By-Laws, Registration Statement, Trust's Compliance
Procedures, written instructions and directions of the
Board and UBS AM, and any amendments or
supplements to any of these materials as soon as
practicable after such materials become available. UBS
AM further agrees to identify to the Sub-Adviser in
writing any broker-dealers that are affiliated with UBS
AM (other than UBS Financial Services Inc. and UBS Asset
Management (US) Inc.).
In order to assist the Trust and the Trust's Chief
Compliance Officer (the "Trust CCO") to satisfy the
requirements contained in Rule 38a-1 under the 1940 Act,
the Sub-Adviser shall provide to the Trust CCO: (i) direct
access to the Sub-Adviser's chief compliance officer
and/or other senior compliance
personnel, as reasonably requested by the Trust CCO; (ii)
quarterly reports confirming that the Sub-Adviser has
complied with the Trust Compliance Procedures in
managing the Portfolio or Segment; and (iii) quarterly
certifications that there were no Material Compliance
Matters (as that term is defined by Rule 38a-1(e)(2)) that
arose under the Trust Compliance Procedures that
related to the Sub-Adviser's management of the Portfolio
or Segment.
The Sub-Adviser shall promptly provide the Trust CCO
with copies of: (i) the Sub-Adviser's policies and
procedures for compliance by the Sub-Adviser with the
Federal Securities Laws (together, the "Sub-Adviser
Compliance Procedures"), and (ii) any material changes
to the Sub-Adviser Compliance Procedures. The Sub-
Adviser shall cooperate fully with the Trust CCO so as to
facilitate the Trust CCO's performance of the Trust CCO's
responsibilities under Rule 38a-1 to review, evaluate and
report to the Trust's Board on the operation of the Sub-
Adviser Compliance Procedures, and shall promptly
report to the Trust CCO any Material Compliance Matter
arising under the Sub-Adviser Compliance Procedures
involving the Portfolio or Segment. The Sub-Adviser
shall provide to the Trust CCO: (i) quarterly reports
confirming the Sub-Adviser's compliance with the Sub-
Adviser Compliance Procedures in managing the
Portfolio or Segment, and (ii) certifications that there
were no Material Compliance Matters involving the Sub-
Adviser that arose under the Sub-Adviser Compliance
Procedures that affected the Portfolio or Segment. At
least annually, the Sub-Adviser shall provide a
certification to the Trust CCO to the effect that the Sub-
Adviser has in place and has implemented policies and
procedures that are reasonably designed to ensure
compliance by the Sub-Adviser with any applicable
Federal Securities Laws, subject to such interpretations
as may be contained in the Trust Compliance Procedures.
The Sub-Adviser will promptly provide UBS AM with
information (including information that is required to be
disclosed in the Trust's registration statement) with
respect to the portfolio managers responsible for the
Portfolio or Segment and any changes in the portfolio
managers responsible for the Portfolio or Segment.
The Sub-Adviser will promptly notify UBS AM of any
pending investigation, material litigation, administrative
proceeding or any other significant regulatory inquiry.
The Sub-Adviser will cooperate promptly and fully with
UBS AM and/or the Trust in responding to any regulatory
or compliance examinations or inspections (including
information requests) relating to the Trust, the Portfolio
or UBS AM brought by any governmental or regulatory
authorities having appropriate jurisdiction (including, but
not limited to, the Securities and Exchange Commission
("SEC")).
4. Expenses. During the term of this Agreement, the
Sub-Adviser will bear all expenses incurred by it in
connection with its services under this Agreement. The
Sub-Adviser shall not be responsible for any expenses
incurred by the Trust, the Portfolio or UBS AM, except as
otherwise specifically provided herein.
Upon request by UBS AM, Sub-Adviser agrees to
reimburse UBS AM or the Trust for costs associated with
generating and distributing any Registration Statement
(as defined herein) for when the Sub-Adviser is given a
copy of a draft of such Registration Statement and fails to
promptly disclose to UBS AM facts then known to the
Sub-Adviser or its personnel that would require disclosure
(or amendments to disclosure) in the Fund's Registration
Statement in time for such disclosure or amendments to
disclosure to be included in such Registration Statement.
The Sub-Adviser shall bear all reasonable expenses of the
Trust, if any, arising out of an assignment or change in
control of the Sub-Adviser.
5. Compensation.
(a) For the services provided and the expenses
assumed by the Sub-Adviser pursuant to this Agreement,
UBS AM, not the Portfolio, will pay to the Sub-Adviser a
fee, computed daily and payable monthly, at an annual
rate of % of the average daily net assets of the Portfolio
or Segment allocated to its management (computed in
the manner specified in the Management Agreement),
and will provide the Sub-Adviser with a schedule showing
the manner in which the fee was computed. If the Sub-
Adviser is managing a Segment, its fees will be based on
the value of the assets of the Portfolio within the Sub-
Adviser's Segment.
(b) The fee shall be accrued daily and payable
monthly to the Sub-Adviser on or before the last business
day of the next succeeding calendar month.
(c) For those periods in which UBS AM has agreed to
waive all or a portion of its management fee, UBS AM
may ask the Sub-Adviser to waive the same proportion of
its fees, but the Sub-Adviser is under no obligation to do
so.
(d) If this Agreement becomes effective or terminates
before the end of any month, the fee for the period from
the effective date to the end of the month or from the
beginning of such month to the date of termination, as
the case may be, shall be pro-rated according to the
proportion which such period bears to the full month in
that such effectiveness or termination occurs.
6. Limitation of Liability.
(a) The Sub-Adviser shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the
Portfolio, the Trust or its shareholders or by UBS AM in
connection with the matters to which this Agreement
relates, except a loss resulting from willful misfeasance,
bad faith or negligence on its part in the performance of
its duties or from reckless disregard by it of its obligations
and duties under this Agreement.
(b) In no event will the Sub-Adviser have any
responsibility for any other portfolio of the Trust, for any
portion of the Portfolio not managed by the Sub-Adviser
or for the acts or omissions of any Other Sub-Adviser to
the Trust or Portfolio. In particular, in the event the Sub-
Adviser shall manage only a Segment of the Portfolio, the
Sub-Adviser shall have no responsibility for the Portfolio's
being in violation of any applicable law or regulation or
investment policy or restriction applicable to the Portfolio
as a whole or for the Portfolio's failing to qualify as a
regulated investment company under the Code, if the
securities and other holdings of the Segment of the
Portfolio managed by the
Sub-Adviser are such that such Segment would not be in
such violation or fail to so qualify if such Segment were
deemed a separate series of the Trust or a separate
regulated investment company under the Code, unless
such violation was due to the Sub-Advisers failure to
comply with written guidelines adopted by the Board or
UBS AM and provided to the Sub-Adviser.
Nothing in this section shall be deemed a limitation or
waiver of any obligation or duty that may not by law be
limited or waived.
7. Representations of Sub-Adviser. The Sub-Adviser
represents, warrants and agrees as follows:
(a) The Sub-Adviser (i) is registered as an investment
adviser under the Advisers Act and will continue to be so
registered for so long as this Agreement remains in
effect; (ii) is not prohibited by the 1940 Act or the
Advisers Act from performing the services contemplated
by this Agreement; (iii) has met, and will seek to continue
to meet for so long as this Agreement remains in effect,
any other applicable federal or state requirements, or the
applicable requirements of any regulatory or industry
self-regulatory agency, necessary to be met in order to
perform the services contemplated by this Agreement;
(iv) has the authority to enter into and perform the
services contemplated by this Agreement; and (v) will
promptly notify UBS AM of the occurrence of any event
that would disqualify the Sub-Adviser from serving as an
investment adviser of an investment company pursuant
to Section 9(a) of the 1940 Act or otherwise.
(b) The Sub-Adviser has adopted a written code of
ethics complying with the requirements of Rule 17j-1
under the 1940 Act and Rule 204A-1 under the Advisers
Act and will provide UBS AM and the Board with a copy of
such code of ethics, together with evidence of its
adoption. Within fifteen days of the end of the last
calendar quarter of each year that this Agreement is in
effect, a duly authorized officer of the Sub-Adviser shall
certify to UBS AM that the Sub-Adviser has complied
with the requirements of Rule 17j-1 during the previous
year and that there has been no material violation of the
Sub-Adviser's code of ethics or, if such a violation has
occurred, that appropriate action was taken in response
to such violation. Upon the written request of UBS AM,
the Sub-Adviser shall permit UBS AM, its employees or its
agents to examine the reports required to be made by the
Sub-Adviser pursuant to Rule 17j-1(c)(1) and all other
records relevant to the Sub-Adviser's code of ethics.
(c) The Sub-Adviser has provided UBS AM with a
copy of its Form ADV, as most recently filed with the SEC,
and promptly will furnish a copy of all amendments to
UBS AM at least annually.
(d) The Sub-Adviser will notify UBS AM of any change
of control of the Sub-Adviser, including any change of its
general partners or 25% shareholders or 25% limited
partners, as applicable, and any changes in the key
personnel who are either the portfolio manager(s) of the
Portfolio or senior management of the Sub-Adviser, in
each case prior to or as soon after such change as possible.
(e) The Sub-Adviser agrees that neither it nor any of
its affiliates, will in any way refer directly or indirectly to
its relationship with the Trust, the Portfolio, UBS AM or
any of their respective affiliates in offering, marketing or
other promotional materials without the express written
consent of UBS AM.
(f) The Sub-Adviser hereby represents that it has
implemented policies and procedures that will prevent
the disclosure by it, its employees or its agents of the
Trust's portfolio holdings to any person or entity other
than UBS AM, the Trust's custodian, or other persons
expressly designated by UBS AM. The Sub-Adviser
further represents that it implemented policies and
procedures to prevent it, its employees and agents from
trading on the basis of any material non-public
information provided by UBS AM, the Trust, their
affiliates or agents.
(g) the Sub-Adviser hereby represents, warrants and
agrees that: (1) it is registered with the Commodity
Futures Trading Commission (the "CFTC") as a
commodity trading advisor and is a member of the
National Futures Association (the "NFA") if required in
light of the nature of its activities, and will continue to be
so registered, if required, for so long as this Agreement
remains in effect; (2) it will comply with the Commodity
Exchange Act (the "CEA") and the rules of the CFTC and
the NFA to the extent applicable; and (3) it will provide all
information reasonably required by UBS AM to fulfill any
disclosure and reporting obligations of UBS AM with
respect to the Portfolio under the CEA and the rules of
the CFTC and the NFA.
(h) The Sub-Adviser hereby represents and warrants
that it has (i) a sanctions policy in place and
communicated to all employees and (ii) adequate
sanctions compliance controls reasonably designed to
ensure compliance with US, UN, EU and Swiss sanctions
laws and regulations and local applicable sanctions laws
(the "Sanctions Laws") The Sub-Adviser further
represents and warrants that (i) it will not undertake
investments or engage in activity that involves either
directly or indirectly countries, regimes, jurisdictions or
sanctioned parties (individuals / entities) subject to any
Sanctions Laws and (ii) will not invest in securities /
issuers mentioned on the "Sanctions Securities List
(SSSL)" and the list of "Companies Verifiably Involved in
Controversial Weapons (Ethix List)" provided by UBS and
updated from time to time.
8. Services Not Exclusive. The services furnished by
the Sub-Adviser hereunder are not to be deemed
exclusive, and except as the Sub-Adviser may otherwise
agree in writing, the Sub-Adviser shall be free to furnish
similar services to others so long as its services under this
Agreement are not impaired thereby. Nothing in this
Agreement shall limit or restrict the right of any director,
officer or employee of the Sub-Adviser, who may also be
a trustee, officer or employee of the Trust, to engage in
any other business or to devote his or her time and
attention in part to the management or other aspects of
any other business, whether of a similar nature or a
dissimilar nature.
9. Duration and Termination.
(a) This Agreement shall become effective upon the
date first above written, provided that this Agreement
shall not take effect unless it has first been approved (i)
by a vote of a majority of those trustees of the Trust who
are not parties to this Agreement or interested persons of
any such party ("Independent Trustees"), cast in person at
a meeting called for the purpose of voting on such
approval, and (ii) by vote of a majority of the Portfolio's
outstanding voting securities, unless UBS AM has
authority to enter into this Agreement pursuant to
exemptive relief from the SEC without a vote of the
Portfolio's outstanding voting securities.
(b) Unless sooner terminated as provided herein, this
Agreement shall continue in effect for two years from its
effective date. Thereafter, if not terminated, this
Agreement shall continue automatically for successive
periods of twelve months each, provided that such
continuance is specifically approved 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 AM; (i) upon 120 days
written notice to the Sub-Adviser; (ii) upon material
breach by the Sub-Adviser of any of the representations,
warranties and agreements set forth in Paragraph 7 of
this Agreement; or (iii) immediately if, in the reasonable
judgment of UBS AM, the Sub-Adviser becomes unable
to discharge its duties and obligations under this
Agreement, including circumstances such as financial
insolvency of the Sub- Adviser or other circumstances
that could adversely affect the Portfolio. The Sub-
Adviser may terminate this Agreement at any time,
without the payment of any penalty, on 120 days written
notice to UBS AM. This Agreement will terminate
automatically in the event of its assignment or upon
termination of the Investment Advisory Agreement, as it
relates to this Portfolio.
10. Amendment of this Agreement. No provision of
this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing
signed by the party against whom enforcement of the
change, waiver, discharge or termination is sought. To
the extent required by applicable law, no amendment of
this Agreement shall be effective until approved (i) by a
vote of a majority of the Independent Trustees, and (ii) if
the terms of this Agreement shall have changed, by a
vote of a majority of the Portfolio's outstanding voting
securities (except in the case of (ii), pursuant to the terms
and conditions of the SEC order permitting it to modify
the Agreement without such vote).
11. Governing Law. This Agreement shall be
construed in accordance with the 1940 Act and the laws
of the State of New York, without giving effect to the
conflicts of laws principles thereof. To the extent that the
applicable laws of the State of New York conflict with the
applicable provisions of the 1940 Act, the latter shall
control.
12. Confidentiality. The Sub-Adviser will treat as
proprietary and confidential any information obtained in
connection with its duties hereunder, including all records
and information pertaining to the Portfolio and its prior,
present or potential shareholders. The Sub-Adviser will
not use such information for any purpose other than the
performance of its responsibilities and duties hereunder.
Such information may not be disclosed except after prior
notification to and approval in writing by the Portfolio or
if such disclosure is expressly required or requested by
applicable federal or state or other regulatory authorities.
13. Use of Name.
(a) It is understood that the names UBS and PACE or any
derivative thereof or logo associated with that name is
the valuable property of UBS AM and/or its affiliates, and
that Sub-Adviser has the right to use such name (or
derivative or logo) only with the approval of UBS AM and
only so long as UBS AM is Manager to the Trust and/or
the Portfolio.
(b) It is understood that the name Xxxxx Capital or any
derivative thereof or logo associated with those names,
are the valuable property of the Sub-Adviser and its
affiliates and that the Trust and/or the Portfolio have the
right to use such names (or derivative or logo) in offering
materials of the Trust with the approval of the Sub-
Adviser and for so long as the Sub-Adviser is a Sub-
Adviser to the Portfolio. Upon termination of this
Agreement, the Trust shall forthwith cease to use such
names (or derivatives or logo).
14. Miscellaneous. The captions in this Agreement are
included for convenience of reference only and in no way
define or delimit any of the provisions hereof or
otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected
thereby. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their
respective successors. As used in this Agreement, the
terms majority of the outstanding voting securities,
affiliated person, interested person, assignment, broker,
investment adviser, net assets, sale, sell and security shall
have the same meanings as such terms have in the 1940
Act, subject to such exemption as may be granted by the
SEC by any rule, regulation or order. Where the effect of a
requirement of the federal securities laws reflected in any
provision of this Agreement is made less restrictive by a
rule, regulation or order of the SEC, whether of special or
general application, such provision shall be deemed to
incorporate the effect of such rule, regulation or order.
This Agreement may be signed in counterpart.
15. Notices. Any notice herein required is to be in
writing and is deemed to have been given to the Sub-
Adviser or UBS AM upon receipt of the same at their
respective addresses set forth below. All written notices
required or permitted to be given under this Agreement
will be delivered by personal service, by postage mail
return receipt requested or by facsimile machine or a
similar means of same delivery which provides evidence
of receipt (with a confirming copy by mail as set forth
herein). All notices provided to UBS AM will be sent to
the attention of: General Counsel, UBS Asset
Management (Americas) Inc., 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, XX 00000. All notices provided to
the Sub-Adviser will be sent to the attention of: Xxxx
Xxxxxx.
In witness whereof, the parties hereto have caused this
instrument to be executed by their duly authorized
signatories as of the date and year first above written.
UBS Asset Management (Americas) Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxxxxx: Xxx Xxxx, XX 00000
By: /s/Xxxx Xxxxxxx By: /s/Xxxxxxx XxxXxxxxx
Name: Xxxx Xxxxxxx Name: Xxxxxxx XxxXxxxxx
Title: Director Title: Executive Director
Xxxxx Capital Management LLC
0000 Xxxxxxxxx Xxxxxx - Xxxxx 0000
Xx Xxxxxxx, XX 00000
Attest:
By: /s/Xxxx Xxxxxxx By: /s/Xxxx Xxxxxx
Name: Xxxx Xxxxxxx Name: Xxxx Xxxxxx
Title: Principal Title: COO/CCO
Portfolio Manager
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