For period
ending
January 31,
2017
Exhibit 77Q1
File number
811-8764
SUB-ADVISORY AGREEMENT
Agreement dated as of January 9, 2017
between UBS Asset Management (Americas) Inc.
("UBS AM"), a Delaware corporation, and X.X.
Xxxxxx Investment Management Inc. ("Sub-
Adviser"), a Delaware corporation (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)
Global Fixed Income Investments (f/k/a PACE(r)
International Fixed Income 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
executed for 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, futures and
options account agreements (including swaps
addenda thereto), cleared derivative execution
agreements, International Swaps and Derivatives
Association, Inc. master agreements and credit
support annexes ("ISDAs") and other swap and
derivative documents with brokers, dealers,
futures commission merchants swap dealers
and/or clearing houses as the Sub-Adviser shall
select) 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. UBS AM acknowledges
and agrees that the Sub-Adviser will rely on
representations, warranties and covenants made
by UBS AM when entering into such agreements
and when entering into derivatives transactions
on behalf of the Portfolio, and, upon reasonable
request by the Sub-Adviser, UBS AM will provide
the Sub-Adviser with the representations,
warranties and covenants that are required for
such transactions. Subject to applicable law,
including the custody requirements under the
1940 Act, the Sub-Adviser may, using such of the
securities and other property in the Segment or
the Portfolio as the Sub-Adviser deems necessary
or desirable, direct the Portfolio's custodian to
deposit for the Portfolio original and
maintenance brokerage and margin deposits and
otherwise direct payments of cash, cash
equivalents and securities and other property
into such brokerage accounts and to such brokers
as the Sub-Adviser deems desirable or
appropriate. 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 applicable to the
Sub-Adviser or, on a stand-alone basis, to the
portion of the Portfolio managed by the Sub-
Adviser. Sub-Advisor represents that the Account
will invest in fixed income securities and that
there are no FOL applicable to fixed income
securities in non-U.S. jurisdictions.
(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 except as
permitted by the 1940 Act.
(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 in
accordance with its proxy voting policy and
procedures in effect from time to time. The Sub-
Adviser represents that it has adopted a written
proxy voting policy that complies with the
requirements of the 1940 Act and the Investment
Advisers Act of 1940, as amended ("Advisers
Act") ("Proxy Voting Policy"). The parties agree
that the Sub-Adviser's obligation under this sub-
paragraph to vote proxies is subject to the
fulfillment of the condition that the Proxy Voting
Policy is 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 provide reasonable assistance to the
Portfolio's custodian in the exercise of 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 its 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 relation to the value
of the brokerage and research services provided
by such broker or dealer 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 Cross Transactions. UBS AM understands
that the authority of the Sub-Adviser to execute
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.
UBS AM hereby acknowledges receipt of
the current best execution policy of the Sub-
Adviser's London branch and, subject to the
requirements of U.S. law, consents to the Sub-
Adviser following such policy or any other
manner for seeking best execution. In addition,
UBS AM agrees that the Sub-Adviser may execute
trades in markets that are not "regulated markets"
as that term is defined in the "Markets in
Financial Instruments Directive" and may utilize a
multilateral trading facility.
(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; provided, however, that Sub-
Adviser may retain copies of such records to the
extent necessary to comply with applicable law or
regulation or the Sub-Adviser's document
retention policies. 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
discretionary investment management 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 assist the Portfolio's
custodian in obtaining sources (independent of
the Sub-Adviser) for the provision of a price or
prices for each portfolio security for which the
custodian does not obtain prices in the ordinary
course of business from an automated pricing
service.
(i) In the event there is not sufficient cash or
other monies in the Portfolio's custody account
to settle a transaction, and to the extent such a
shortfall is attributable to the actions of UBS AM
or the Portfolio, UBS AM agrees that the Portfolio
shall bear any charges incurred by the Portfolio
related to overdraft charges, trading costs, buy-in
fees or any other costs associated with
settlement failures.
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.
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 represents and warrants that it
shall maintain a compliance program in
accordance with Rule 206(4)-7 under the Advisers
Act ("Sub-Adviser Compliance Program") and
shall promptly provide the Trust CCO with copies
of: (i) the Sub-Adviser's Compliance Program, and
(ii) any material changes to the Sub-Adviser
Compliance Program. 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 Board on the
operation of the Sub-Adviser Compliance
Program, and shall promptly report to the Trust
CCO any material violations of the Sub-Adviser
Compliance Program 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 Program in managing the Portfolio or
Segment, and (ii) certifications that there were no
material violations of the Sub-Adviser Compliance
Program involving the Sub-Adviser 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.
To the extent permitted by law, regulation or
regulatory requirement, 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 the
costs of generating and distributing any
amended Registration Statement (as defined
herein) if such amended Registration Statement
was required because the Sub-Adviser had been
given a copy of a draft of prior Registration
Statement and failed 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 prior
Registration Statement in time for such disclosure
or amendments to disclosure to be included in
such prior Registration Statement. The Sub-
Adviser shall bear all reasonable expenses of the
Trust, if any, arising out of an assignment of this
Agreement or a 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 fee,
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 under this Agreement 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-Adviser's failure to comply with written
guidelines adopted by the Board or UBS AM and
provided to the Sub-Adviser.
(c) Under no circumstances shall either party to
this Agreement be liable for any special,
consequential or indirect damages.
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, with respect to violations of
the Sub-Adviser's code of ethics affecting the
Portfolio or Segment, the Sub-Adviser shall
permit UBS AM, its employees or its agents to
examine the reports (or summaries of reports)
required to be made by the Sub-Adviser pursuant
to Rule 17j-1(c)(1) evidencing enforcement of 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 it will not in any
way refer directly 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. UBS AM acknowledges that
the Sub-Adviser manages other accounts, which
may include other mutual funds, that follow the
same investment strategy as the Portfolio and
that those other accounts may have different
portfolio holdings disclosure policies. The Sub-
Adviser hereby represents that any such
disclosure by Sub-Adviser does not and will not
indicate that the Portfolio follows the same
strategy.
(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 the 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
sanctions legally applicable to the Sub-Adviser in
the jurisdictions in which Sub-Adviser is located
or does business. In the U.S., such sanctions
include those administered and enforced by the
U.S. Department of the Treasury's Office of
Foreign Assets Control and any other related U.S.
laws and regulatory requirements (the "U.S.
Sanctions"). 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 prohibitions of the U.S.
Sanctions or listed on the Specially Designated
Nationals ("SDN") list or other legally applicable
sanctions lists; 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.
The SSSL and the Ethix List are collectively for the
purpose of this Agreement called the "UBS AM
Sanctions Lists." Any revised UBS AM Sanctions
Lists shall become effective only upon Sub-
Adviser's receipt of such revised UBS AM
Sanctions Lists and Sub-Adviser is provided a
reasonable time to input such revised UBS AM
Sanctions Lists into its trading systems. The Sub-
Adviser shall be permitted to rely on the most
recent UBS AM Sanctions Lists received by it from
UBS AM. UBS AM and the Trust agree that the
Sub-Adviser may rely on the UBS AM Sanctions
Lists without independent verification of their
accuracy at any time.}}
8. Services Not Exclusive. UBS AM
acknowledges that the Sub-Adviser and its
affiliates ("JPMorgan Chase") perform investment
advisory services for various clients. UBS AM
acknowledges that Sub-Adviser, JPMorgan Chase
and its or their directors, officers, agents, and/or
employees may render similar or differing
investment advisory services to clients and may
give advice or exercise investment responsibility
and take such other action with respect to any of
its other clients that differs from the advice given
or the price, timing or nature of action taken with
respect to another client, group of clients or the
Portfolio. It is the Sub-Adviser's policy, to the
extent practicable, to allocate, within its
reasonable discretion, investment opportunities
among clients over a period of time on a fair and
equitable basis. One or more of Sub-Adviser's
other client accounts may at any time hold,
acquire, increase, decrease, dispose, or otherwise
deal with positions in investments in which
another client account may have an interest from
time-to-time. UBS AM agrees that Sub-Adviser
shall not have any obligations to purchase or sell,
or to recommend for purchase or sale, for the
Portfolio any security that JPMorgan Chase, its
principals or employees may purchase or sell for
its or their own accounts or for the account of
any other client, if in the opinion of Sub-Adviser
such transaction or investment appears
unsuitable, impractical or undesirable for the
Portfolio. UBS AM agrees that JPMorgan Chase
may make different investment decisions with
respect to each of its clients or for its own
account, and that such fact shall not be relied
upon by UBS AM or the Portfolio or any of their
agents or representatives as evidence of a breach
of Sub-Adviser's duties hereunder.
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.
(a) 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.
(b) UBS AM and the Portfolio will treat as
proprietary and confidential any information
regarding the Sub-Adviser acquired in
consequence of this Agreement except for
information required to be provided to service
providers to the Portfolio or if required or
requested by federal, state or other regulatory
authorities. Subject to the last two sentences of
Section 7(f), the Trust's portfolio holdings shall be
considered confidential information belonging to
UBS AM and the Portfolio.
(c) The obligations under sub-sections (a) and (b)
above do not apply to information that the party
receiving the information ("Receiving Party") can
show: (a) was in its possession prior to the date
of the disclosure by the party disclosing the
information ("Disclosing Party"); (b) was obtained
by Receiving Party after the date of this
Agreement from a third party who is not known
by Receiving Party to be under any obligation of
confidentiality with respect to such information;
(c) became generally available to the trade, or to
the public, based on existing records or through
sources other than Receiving Party; or (d) was
developed at any time by Receiving Party
independent of information or materials
disclosed by the Disclosing Party to Receiving
Party.
(d) Notwithstanding the provisions of 12(a), to
the extent that any market counterparty with
whom the Sub-Adviser deals requires information
relating to the Portfolio or the Segment (including,
but not limited to, the identity of UBS AM or the
Portfolio and market value of the Portfolio or the
Segment), the Sub-Adviser shall be permitted to
disclose such information to the extent necessary
to effect transactions on behalf of the Portfolio or
the Segment in accordance with the terms of this
Agreement, provided that such market
counterparty acts in accordance with the rules
and regulations applicable to it in dealing with
such information.
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 X.X. Xxxxxx
Investment Management Inc., X.X. Xxxxxx Asset
Management, or JPMorgan Chase & Co. 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. Delegation to Third Parties. Except where
prohibited by applicable law or regulation, the
Sub-Adviser may delegate or may employ an
affiliate or other third party to perform any
accounting, administrative, reporting and
ancillary services required to enable the Sub-
Adviser to perform its functions under this
Agreement, but the Sub-Adviser's liability to UBS
AM or the Portfolio shall not be affected thereby.
Notwithstanding any other provision of the
Agreement, the Sub-Adviser may provide
information about UBS AM and the Portfolio or
Segment to any such affiliate or other third party
for the purposes of this paragraph, provided that
such affiliate or other third party has a duty to
keep non-public information received from the
Sub-Adviser confidential. The Sub-Adviser will
act in good faith and with due diligence in the
selection, use and monitoring of third parties and
shall be solely responsible for any loss, mistake,
negligence or misconduct caused by such third
party. Under no circumstances shall this section
be interpreted as authorizing any third party to
provide investment management services to the
Portfolio.
15. Anti Money Laundering. UBS AM shall
provide any document or information to the Sub-
Adviser that the Sub-Adviser may reasonably
request in order for it to comply with its own anti
money laundering obligations.}
16. 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.
17. 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 day 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: X.X.
Xxxxxx Investment Management, Inc., 000 Xxxx
Xxxxxx-00xx Xx., Xxx Xxxx, XX 00000, Attention:
Xxxxx 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/Xxxx Xxxx
Name: Xxxx Xxxxxxx Name: Xxxx Xxxx
Title: Director Title: Executive Director
XX Xxxxxx Investment Management Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000-2014
Attest:
By: /s/Xxxxxxxx X. Xxxx By: /s/Xxxxx Xxxxxx
Name: Xxxxxxxx X. Xxxx Name: Xxxxx Xxxxxx
Title: Vice President Title: Vice President
7
