For period
ending
January 31,
2017
Exhibit 77Q1
File number
811-8764
SUB-ADVISORY AGREEMENT
Agreement dated as of December 19, 2016
between UBS Asset Management (Americas) Inc.
("UBS AM"), a Delaware corporation, and Principal
Global Investors, 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) Alternative Strategies 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
which will provide services through its Macro Currency
Group, a specialist currency investment boutique of
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.
The parties acknowledge and agree that the Sub-
Adviser may, at its expense and in its discretion,
utilize personnel employed by affiliates of the Sub-
Adviser to perform services pursuant to this
Agreement by way of a "participating affiliate"
agreement in accordance with, and to the extent
permitted by, the Act and the Investment Advisers
Act of 1940, as amended (the "Advisers Act"),
including the published interpretations thereof by the
SEC or its staff. Such participating affiliate agreement
shall subject the personnel providing such services to
the Sub-Adviser's compliance and other programs
with respect to their activities on behalf of the
Portfolio or Segment. For the avoidance of doubt, it is
acknowledged and agreed that the Sub-Adviser
assumes full responsibility for all actions, and any
failure to act, by each person utilized by the Sub-
Adviser to perform services under this Agreement.
The parties further acknowledge and agree that the
Sub-Adviser and/or its participating affiliate may, in
its discretion, utilize a third party to perform
administrative support services, provided that the
Sub-Adviser's use of such service provider does not
relieve the Sub-Adviser of any obligation under this
Agreement.
(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. All proxies voted by
Sub-Adviser will be in accordance with Sub-Adviser's
written proxy voting procedures. 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 relate 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.
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 Sub-Adviser of its obligations and duties
under this Agreement. UBS AM agrees to hold
harmless and defend Sub-Adviser and its officers,
directors, employees, agents, affiliates, successors
and permitted assigns (collectively, "Indemnified
Party") against any and all losses, damages, liabilities,
deficiencies, claims, actions, judgments, settlements,
interest, awards, penalties, fines, costs, or expenses of
whatever kind, including reasonable attorneys' fees,
that are incurred by Indemnified Party (collectively,
"Losses"), arising out of any third-party claim alleging
any error or judgment or mistake of law for any loss
suffered by the Portfolio, such loss not being the
result of willful misfeasance, bad faith or negligence
on the its part or in the performance of its duties or
from reckless disregard by Sub-Adviser 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 its participating affiliate, UBS AM,
the Trust's custodian, or other persons expressly
designated by UBS AM. The Sub-Adviser further
represents that it and its participating affiliate have
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. Representations of Investment Adviser (UBS AM).
UBS AM represents, warrants and agrees as follows:
(a) each of UBS AM and the Portfolio is and
will remain for so long as this Agreement remains in
effect a "qualified eligible person" as defined in U.S.
Commodity Futures Trading Commission ("CFTC")
Regulation 4.7 (17 Code of Federal Regulations
Section 4.7) and UBS AM has the authority to consent
and does consent to Sub-Adviser treating it and the
Portfolio as an exempt account under CFTC
Regulation 4.7;
(b) UBS AM is registered with the CFTC as a
commodity pool operator and a commodity trading
advisor and is a member of the National Futures
Association (the "NFA") and will continue to be so
registered for so long as this Agreement remains in
effect;
(c) UBS AM and the Portfolio will, at all times,
constitute an "eligible contract participant under the
Commodity Exchange Act (7 U.S.C Section 1A), as
amended, and 17 CFR Section 1.3(m).
(d) UBS AM and the Portfolio has and at all
times will have in force written policies and
procedures reasonably designed to ensure that its
employees responsible for evaluating dealer
recommendations are capable of making trading
decisions on its behalf in compliance with CFTC
Regulation 23.434(c).
9. 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.
10. 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.
11. Amendment of this Agreement. No
provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an
instrument in writing signed by the party against
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).
12. 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.
13. 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.
Notwithstanding the foregoing, Sub-Adviser may
provide certain documentation and information
pertaining to the Portfolio as needed to establish
trading lines.
14. 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 Principal
Global Investors, LLC 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).
15. 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.
16. 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: Xxxxxx (Xxxxxxx) Xxxxxxx, Counsel,
Principal Global Investors, LLC, 000 Xxxx Xxxxxx, Xxx
Xxxxxx, Xxxx 00000-0000 .
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.
PURSUANT TO AN EXEMPTION FROM THE
COMMODITY FUTURES TRADING COMMISSION IN
CONNECTION WITH ACCOUNTS OF QUALIFIED
ELIGIBLE PERSONS, THIS BROCHURE OR ACCOUNT
DOCUMENT IS NOT REQUIRED TO BE, AND HAS
NOT BEEN, FILED WITH THE COMMISSION. THE
COMMODITY FUTURES TRADING COMMISSION
DOES NOT PASS UPON THE MERITS OF
PARTICIPATING IN A TRADING PROGRAM OR UPON
THE ADEQUACY OR ACCURACY OF COMMODITY
TRADING ADVISOR DISCLOSURE. CONSEQUENTLY,
THE COMMODITY FUTURES TRADING
COMMISSION HAS NOT REVIEWED OR APPROVED
THIS TRADING PROGRAM OR THIS BROCHURE OR
ACCOUNT DOCUMENT.
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
Principal Global Investors, LLC
000 Xxxx Xxxxxx
Xxx Xxxxxx, Xxxx 00000
Attest:
By: /s/Xxx X. Xxxxxx By: /s/Xxxxxx X. Xxxxxxxx
Name: Xxx X. Xxxxxx Name: Xxxxxx X. Xxxxxxxx
Title: Sr. Executive Director Title: Assistant General Counsel
4
