Exhibit 77(o)
For period ending January 31, 2012
File number 811-8764
SUB-ADVISORY AGREEMENT
Agreement dated as of March 6, 2012 between UBS Global Asset Management
(Americas) Inc. ("UBS Global AM"), a Delaware corporation, and Xxxxx Xxxxxxxx
Xxxxxxx Investment Management, LLC ("Sub- Adviser"), a California Limited
Liability Company (the "Agreement").
RECITALS
(1) UBS Global 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 Global AM is authorized to retain one or more sub-advisers to furnish
certain investment advisory services to UBS Global AM and the Portfolio; (3)
UBS Global AM desires to retain the Sub-Adviser to furnish certain investment
advisory services to UBS Global 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 Global AM and the Sub-Adviser agree as follows:
1. Appointment.
UBS Global 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 Global AM, and any written guidelines adopted
by the Board or UBS Global 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 Global AM and the Trust's custodian such information as UBS
Global AM and the Trust's custodian may reasonably request relating to all
transactions concerning the Portfolio or Segment.
UBS Global 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 Global 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; (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; and
exchange, convert and otherwise respond to tender offers and other
voluntary corporate actions. This power-of-attorney is a continuing
power-of-attorney and shall remain in full force and effect until
revoked by UBS Global 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 Global 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 Global AM, a
summary of such Proxy Voting Policy for inclusion in the Trust's
registration statement, and will provide UBS Global 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. The Sub-Adviser will
not be responsible or liable for failing to vote any proxies where (i) it
(or its agent) has not received such proxies or related shareholder
communications on a timely basis, or (ii) it is consistent with the
Sub-Adviser's policies regarding proxy voting then in effect to refrain
from voting the relevant proxy(ies).
(d) The Sub-Adviser agrees that upon the request of UBS Global 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 Global
AM fully informed about any such actions that it intends to take. Except as
otherwise set forth in this subparagraph 2(d}, the Sub-Adviser shall not
advise or act for the Portfolio in any legal proceedings, including without
limitation class action lawsuits, involving securities held or previously
held in the Portfolio or Segment or the issuers of such securities.
(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 Global 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
places orders simultaneously or in close succession 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 timing, price and/or amount among all such accounts in a manner
believed to be equitable over time to each account. UBS Global 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
Global 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 II 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
Global 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 Global 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 Global 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 Global AM with
periodic reports describing such agency cross transactions. UBS Global
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 Global 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 31 a-1 and Rule 31 a-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 31 a-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 Global AM with such
periodic and special reports as the Board or UBS Global AM may request.
(g) At such times as shall be reasonably requested by the Board or UBS
Global AM, the Sub-Adviser will provide the Board and UBS Global 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 Global 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 Global 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 Global 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 Global 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 Global 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 Global AM, and any
amendments or supplements to any of these materials as soon as
practicable after such materials become available. UBS Global AM further
agrees to identify to the Sub-Adviser in writing any broker-
dealers that are affiliated with UBS Global AM (other than UBS
Financial Services Inc. and UBS Global 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 Global 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.
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The Sub-Adviser will promptly notify UBS Global 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 Global 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 Global
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 Global AM, except as otherwise specifically provided
herein.
Upon request by UBS Global AM, Sub-Adviser agrees to reimburse UBS Global
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 Global 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 Global AM, not the Portfolio,
will pay to the Sub-Adviser a fee, computed daily and payable monthly,
at an annual rate of 0.40% on the first $50 million, 0.35% on the next
$50 million, and 0.30% on assets in excess of $100 million of the average
daily net assets of the Portfolio or Segment allocated to its management
(computed in the manner specified in the Management Agreement), and will
provide the Sub-Adviser with a schedule showing the manner in which the
fee was computed. If the Sub-Adviser is managing a Segment, its fees
will be based on the value of the assets of the Portfolio within the
Sub-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 Global AM has agreed to waive all or a
portion of its management fee, UBS Global 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 Global AM in connection with the matters to
which this Agreement relates, except a loss resulting from willful
misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement.
(b) In no event will the Sub-Adviser have any responsibility for any other
portfolio of the Trust, for any portion of the Portfolio not managed by the
Sub-Adviser or for the acts or omissions of any Other Sub-Adviser to the
Trust or Portfolio. In particular, in the event the Sub-Adviser shall
manage only a Segment of the Portfolio, the Sub-Adviser shall have no
responsibility for the 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 Global 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 Global 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 6
Global 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 Global 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 Global AM, the Sub-Adviser shall permit UBS Global
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 Global 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 Global AM at least annually.
(d) The Sub-Adviser will notify UBS Global 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 Global AM or any of their respective
affiliates in offering, marketing or other promotional materials
without the express written consent of UBS Global 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 Global AM, the Trust's custodian, or other persons
expressly designated by UBS Global 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 Global AM, the Trust, their affiliates or
agents.
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 Global 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 Global 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 Global 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
Global 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. Notwithstanding the foregoing,
UBS Global AM hereby agrees that the Sub-Adviser may, at its own cost,
employ, retain or otherwise avail itself of the services and facilities
of persons and entities within its own organization or any other
organization (subject to the restriction set forth in subparagraph 2(b)
of this Agreement) as the Sub-Adviser may deem necessary, appropriate or
convenient for the purpose of performing the services under this
Agreement or obtaining for itself, or providing UBS Global AM or the
Portfolio with, information, advice or assistance, and the Sub-Adviser
may provide information about the Portfolio or Segment to anyone so
retained, provided, however, that the Sub-Adviser's liability hereunder
will be unaffected by any such delegation.
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 Global A
M 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 Global AM and
only so long as UBS Global AM is Manager to the Trust and/or the Portfolio.
(b) It is understood that the name Xxxxx Xxxxxxxx Xxxxxxx Investment
Management, LLC or any derivative thereof or logo associated with those
names, are the valuable property of the Sub-Adviserand 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 Global 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 Global AM will be sent to the attention of: General Counsel, UBS
Global 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: Xxxxxxxx Xxxxxx, Xxxxx Xxxxxxxx Xxxxxxx Investment
Management, LLC, 0000 Xxxxxx xx xxx Xxxxx, Xxxxxx Xxxxx, Xxx Xxxxxxx,
XX 00000.
In witness whereof, the parties hereto have caused this instrument to be
executed by their duly authorized signatories as of the date and year
first above written.
Attest:
UBS Global Asset Management (Americas) Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
By: /s/Xxxx Xxxxxx
By: /s/Xxxxxx X. Xxxxxxxx
Name: Xxxx Xxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Director
Title: Executive Director
Attest:
Xxxxx Xxxxxxxx Xxxxxxx Investment Management, LLC
0000 Xxxxxx xx xxx Xxxxx, Xxxxxx Xxxxx
Xxx Xxxxxxx, XX 00000
By: /s/Xxxxx Xxxxxx
By: Xxxxxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Name: Xxxxxxxx Xxxxxx
Title: Executive Vice President
Title: Chief Operating Officer
Exhibit 77(o)
For period ending January 31, 2012
File number 811-8764
Sub-Advisory Agreement
between
UBS Global Asset Management (Americas) Inc.
And
Delaware Management Company, a series of
Delaware Management Business Trust
Agreement dated as of January 4, 2010 and amended as of February 15, 2012,
between UBS Global Asset Management (Americas) Inc. CUBS Global AM"), a
Delaware corporation, and Delaware Management Company, a series of Delaware
Management Business Trust, a Delaware business trust ("Sub-Adviser")
(the "Agreement").
Recitals
(1) UBS Global AM has entered into a Management Agreement dated as of
August 1,2008 ( "Management Agreement") with UBS PACE Select Advisors Trust
(Trust), an open-end management investment company registered under the
Investment Company Act of 1940, as amended (,,1940 Act"), with respect to
the UBS PACE Large Co Growth Equity Investments ("Portfolio");
(2) UBS Global AM desires to retain the Sub-Adviser to furnish certain
investment advisory services to UBS Global AM and the Portfolio or a
designated portion of the assets (Segment) of the Portfolio; and
(3) The Sub-Adviser is willing to furnish such services; Now, therefore, in
consideration of the premises and mutual covenants herein contained, the
parties agree as follows:
1. Appointment.
UBS Global AM hereby appoints the Sub-Adviser as an investment Sub-Adviser
with respect to 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 Global AM, and any written guidelines adopted
by the Board or UBS Global 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 Global AM and the Trust's custodian such information as UBS
Global Americas and the Trust's custodian may reasonably request relating to
all transactions concerning the Portfolio or Segment.
(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 Global 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 Global AM, a summary of such Proxy Voting Policy for inclusion
in the Trust's registration statement, and will provide UBS Global 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, in placing orders with brokers, it will obtain
the best net result in terms of price and execution; provided that, on behalf of
the Portfolio or Segment, the Sub-Adviser may, in its discretion, use brokers
who 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 determining 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 over the long
term. In no instance will portfolio securities be purchased from or sold
to UBS Global 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 of the assets of the Portfolio or
Segment with similar orders being madesimultaneously 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 otheraccounts advised
by the Sub-Adviser, the orders will be allocated as to price and amount
among all such accounts in a manner believed to be equitable over
time to each account. UBS Global 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 Global AM
agrees that the Sub-Adviser, in its sole discretion, may place transactions on
behalf of the Portfolio and the Trust or with any broker-dealer deemed to be
an affiliate of the Sub-Adviser (the Affiliated Broker-Dealers) so long as
such transactions are effected in conformity with the requirements (including
any applicable exemptions and administrative interpretations set forth in Part
II of the Sub-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, 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 Global AM, the Portfolio or the Trust.
UBS Global 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 Global 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 and any other applicable
provisions of the federal securities laws and shall provide UBS Global Americas
with periodic reports describing such agency cross transactions.
(e) 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 31
a-1 and Rule 31 a-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 31 a-1
under the 1940 Act.
(f) At such times as shall be reasonably requested by the Board or UBS Global
AM, the Sub-Adviser will provide the Board and UBS Global 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
Global AM any economic, statistical and investment services that the Sub-Adviser
normally makes available to its institutional or other customers.
(g) In accordance with procedures adopted by the Board, as amended from time to
time, the Sub-Adviser is responsible for assisting in the fair valuation of all
portfolio securities and will use its reasonable efforts to arrange for the
provision of a price(s) 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 Global Americas 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 of 1933, as amended (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 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
directionsof the Board and UBS Global AM; and will comply with the
applicable requirementsof the 1940 Act, the Investment Advisers Act
of 1940, as amended ("Advisers Act"), and the rules under each, the
Code, and all other applicable federal and state laws and regulations
applicable to the Trust and the Portfolio. UBS Global 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 Global AM,
and any amendments or supplements to any of these materials as soon
as practicable after such materials become available; provided,
however, that the Sub-Adviser's duty under this Agreement to act in
conformity with any document, instruction or guideline produced by
the Trust or UBS Global AM shall not arise until it has been
delivered to the Sub-Adviser. Any changes to the objectives,
policies and restrictions will make due allowance for the time
within which the Sub-Adviser shall have to come into compliance.
UBS Global AM further agrees to identify to the Sub-Adviser in
writing any broker-dealers that are affiliated with UBS Global AM
(other than UBS Financial Services Inc. and UBS Global 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 (the "Sub-Adviser CCO"),
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)), other than those Material Compliance Matters which have
previously been disclosed to the Trust's CCO, 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, other than those Material
Compliance Matters which have previously been disclosed to the Trust's CCO, 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 the Federal Securities Laws.
The Sub-Adviser will provide UBS Global 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 Global AM of any pending investigation,
material litigation, administrative proceeding or any other significant
regulatory inquiry, relating to the Sub-Adviser's provision of services to the
Portfolio or Segment, or otherwise negatively impacting its ability to serve as
an advisor to a registered investment company.
The Sub-Adviser will cooperate promptly and fully with UBS Global 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
Global AM brought by any governmental or regulatory authorities having
appropriate jurisdiction (including, but not limited to, the 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 Global AM.
Upon request by UBS Global AM, Sub-Adviser agrees to reimburse UBS Global
Americas or the Trust for costs associated with generating and distributing
any supplement or amendment to the Prospectuses or SAls for any Fund
("Supplement") when the Sub-Adviser is given a copy of a draft of such
Supplement and fails to promptly disclose to the Adviser facts than known to the
Sub-Adviser or its personnel that would require disclosure (or amendments
to disclosure) in the Fund's Prospectuses or SAls in time for such disclosure
or amendments to disclosure to be included in such Supplement. 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, effective January 1, 2012, UBS Global AM, not the
Portfolio, will pay to the Sub-Adviser a fee, computed daily and payable
monthly, at an annual rate of 0.40% on the first $200 million, and 0.35% on
assets in excess of $200 million of the Portfolio's average daily net assets
of the Portfolio or Segment (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 computed 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 Global AM has agreed to waive all or a
portion of its management fee, UBS Global 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 prorated according to the proportion which such
period bears to the full month in which such effectiveness or
termination occurs.
6. Limitation of Liability.
(a) The Sub-Adviser shall not be liable for any error of judgment or mistake of
law or for any loss suffered by the Portfolio, the Trust or its shareholders
or by UBS Global AM in connection with the matters to which this Agreement
relates, except a loss resulting from willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or from reckless
disregard by it of its obligations and duties under this Agreement.
(b) In no event will the Sub-Adviser have any responsibility for any other
portfolio of the Trust, for any portion of the Portfolio not managed by the
Sub-Adviser or for the acts or omissions of any Other Sub-Adviser to the Trust
or Portfolio.
In particular, in the event the Sub-Adviser shall manage only a portion of the
Portfolio's 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 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 Global AM and provided to the
Sub-Adviser.
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; Oi) is not prohibited by the 1940 Act or the
Advisers Act from performing the services contemplated by this Agreement;
(iii) has met, and will seek to continue to meet for so long as this
Agreement remains in effect, any other applicable federal or state
requirements, or the applicable requirements of any regulatory or industry
self-regulatory agency necessary to be met in order to perform the services
contemplated by this Agreement; (iv) has the authority to enter into and
perform the services contemplated by this Agreement; and (v) will promptly
notify UBS Global 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 Global 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
Global 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 Global AM, the Sub-Adviser shall
permit UBS Global AM, its employees or its agents to examine the reports
required to be made to the Sub-Adviser by 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 Global AM with a copy of its Form ADV as
most recently filed with the Securities and Exchange Commission ("SEC") and
promptly will fumish a copy of all amendments to UBS Global AM at least
annually.
(d) The Sub-Adviser will notify UBS Global 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
promptly after such change.
(e) The Sub-Adviser agrees that neither it nor any of its affiliates will in
any way refer directly or indirectly to its relationship with the Trust, the
Portfolio, UBS Global AM or any of their respective affiliates in offering,
marketing or other promotional materials without the express written
consent of UBS Global AM.
Notwithstanding the foregoing, the Sub-Adviser may include the Portfolio's
performance in calculating its composites, provided that Sub-Adviser may
not separately disclose the Funds performance (or the performance of
Sub-Adviser's segment of the Fund) in connection therewith.
(f) The Sub-Adviser hereby represents that it has implemented policies and
procedures that are reasonably designed to prevent the disclosure by it,
its employees or its agents of the Trust's portfolio holdings to any
person or entity other than UBS Global AM, the Trust's custodian, or other
persons expressly designated by UBS Global AM.
8. Services Not Exclusive.
The Sub-Adviser may act as an investment adviser to any other person, firm
or corporation, and may perform management and any other services for any
other person, association, corporation, firm or other entity pursuant to
any contract or otherwise, and take any action or do anything in
connection therewith or related thereto, except as prohibited by applicable
law; and no such performance of management or other services or taking of
any such action or doing of any such thing shall be in any manner
restricted or otherwise affected by any aspect of any relationship of
the Sub-Adviser to or with the Trust, Portfolio or UBS Global AM or deemed
to violate or give rise to any duty or obligation of the Sub-Adviser to
the Trust, Portfolio or UBS Global AM except as otherwise imposed by law
or by this Agreement.
9. Duration and Termination.
(a) This Agreement shall become effective upon the consummation of the
anticipated transaction involving a change in control of the Sub-Advisor
resulting in the automatic termination of the prior agreement between the
parties hereto, provided that this Agreement shall not take effect unless
it has first been approved (i) by a vote of a majority of those trustees
of the Trust who are not parties to this Agreement or interested persons
of any such party ("Independent Trustees"), cast in person at a meeting
called for the purpose of voting on such approval, and (ii) by vote of a
majority of the Portfolio's outstanding voting securities; unless UBS
Global 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 Global AM: (i) upon 120 days'
written notice to the Sub-Adviser; (ii) immediately upon material breach by
the Sub-Adviser of any of the representations, warranties and agreements set
forth in Paragraph 7 of this Agreement; or (iii) immediately if, in the
reasonable judgment of UBS Global 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 Global AM. This Agreement will terminate
automatically in the event of its assignment or upon termination of the
Management Agreement.
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 which
enforcement of the change, waiver, discharge or termination is sought. 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 Series 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 Series or if such disclosure is expressly required
or requested by applicable federal or state 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 Global 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 the UBS Global AM and only so
long as the UBS Global AM is Manager to the Trust and/or the Fund.
(b) It is understood that the name Delaware Management Company 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 Fund 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 Fund. Upon termination of this Agreement, the Company 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 Global 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
Global AM will be sent to the attention of the General Counsel. All notices
provided to the Sub- Adviser will be sent to the attention of
Xxxxxxx X. Xxxxx, President, Delaware Management Company,
Xxx Xxxxxxxx Xxxxxx, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, XX 00000
with a copy to
Chief Counsel, Delaware Management
Company, Xxx Xxxxxxxx Xxxxxx, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, XX 00000.
In Witness Whereof, the parties hereto have caused this instrument to be
executed by their duly authorized signatories as of the date and year first
above written.
Attest:
UBS Global Asset Management
(Americas) Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
By: /s/Xxxx Xxxxxxx
By: /s/Xxxxxx X. Xxxxxxxx
Name: Xxxx Xxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Director
Title: Executive Director
Attest:
Delaware Management Company, a
series of
Delaware Management Business Trust
By: /s/Xxxx Xxxx X'Xxxxxx
Xx: /s/Xxxxxxx X. Xxxxx
Name: Xxxx Xxxx X'Xxxxxx
Name: Xxxxxxx X. Xxxxx
Title: Executive Administrative Assistant
Title: President
