For period ending January 31, 2008 Exhibit 77Q1
File number 811-8764
SUB-ADVISORY AGREEMENT
Agreement dated as of December 14, 2007 between UBS Global Asset Management
(AM) Inc. (UBS Global AM), a Delaware corporation, and Xxxxxxx Capital
Management, LLC (Sub-Adviser), a Delaware limited liability corporation
(the Agreement).
RECITALS
(1) UBS Global AM has entered into a Management Agreement dated April 1, 2006,
and amended as of August 1, 2006 (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 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; and
(3) 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 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 Trusts 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 all or a designated portion of the assets (Segment)
of the Portfolio, 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 will be responsible for voting proxies of issuers of
securities held by the Portfolio or Segment. The Sub-Adviser understands
that the Portfolios 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 Portfolios
investment objective, policies and restrictions as stated in the Trusts
currently effective registration statement under the 1940 Act, and any
amendments or supplements thereto (Registration Statement).
(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) The Sub-Adviser agrees that, in placing orders with brokers selected
at the discretion of the Sub-Adviser, it will seek the best net result in
terms of price and execution; provided that, on behalf of the Portfolio, 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, 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-Advisers
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 and its other clients and that the total
commissions will be reasonable in relation to the value of research and
brokerage services provided by the brokers to the Sub-Adviser and its clients.
In no instance will portfolio securities be purchased from or sold to UBS
Global AM or the Sub-Adviser, 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 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 Global AM recognizes that in some cases this
procedure may adversely affect the results obtained for the Portfolio or
Segment.
Subject to the Sub-Advisers 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 of the Sub-Adviser (the Affiliated
Broker-Dealers) so long as such transactions are effected in conformity with
applicable law, including Rule 17e-1 under the 1940 Act. UBS Global AM
hereby consents to the Sub-Advisers use of an affiliated broker to effect
transactions for the Portfolio and the Trust on an exchange under Section
11(a)(1)(H) of the Securities Exchange Act of 1934 (including any applicable
exemptions and administrative interpretations set forth in Part II of the
Sub-Advisers Form ADV Registration Statement on file with the Securities and
Exchange Commission (Form ADV)). 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 Series or the Trust.
UBS Global AM is aware that the affiliation between the Sub-Adviser and an
Affiliated Broker-Dealer could give the Sub-Adviser an indirect interest in
brokerage commissions received by the Affiliated Broker-Dealer, creating a
potential conflict of interest.
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.
(d) The Sub-Adviser will maintain all books and records required to be
maintained pursuant to Rule 31a-1(b)(2)(ii), (3), (5), (6), (7), (9) and (10)
under the 1940 Act and the rules and regulations promulgated thereunder with
respect to transactions by the Sub-Adviser on behalf of the Portfolio or
Segment, and will furnish the Board and UBS Global AM with such periodic and
special reports as the Board or UBS Global AM reasonably may request. In
compliance with the requirements of Rule 31a-3 under the 1940 Act, the
Sub-Adviser hereby agrees that all records which it maintains for the
Portfolio are the property of the Trust, agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any records that it maintains for
the Portfolio and that are required to be maintained by Rule 31a-1 under
the 1940 Act, and further agrees to surrender promptly to the Trust any
records which it maintains for the Portfolio upon request by the Trust
(provided that the Sub-Adviser may retain copies of all records for its own
records).
(e) 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.
(f) 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 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.
3. Further Duties. In all matters relating to the performance of this
Agreement, the Sub-Adviser will seek to act in conformity with the Trusts
Trust Instrument, By-Laws and Registration Statement 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 Investment Advisers Act
of 1940, as amended (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 Trusts Trust Instrument, By-Laws, Registration Statement, 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; and 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.).
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, such as, without limitation, the
costs of executing any transaction for the Trust or the Portfolio.
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
0.30% 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-Advisers Segment. No statement in this Agreement or any
document constitutes a representation by the Sub-Adviser regarding the rate
of growth or return of the Portfolio or Segment. Neither the Sub-Adviser
nor any of its officers, directors or employees make any representations or
warranties, express or implied, that any level of performance or investment
results will be achieved by the Portfolio or Segment, or that it will
perform comparably with any standard or index, including the performance of
other clients of Sub-Adviser.
(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) 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
series 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 Portfolios investments, the Sub-Adviser shall have no
responsibility for the Portfolios being in violation of any applicable law or
regulation or investment policy or restriction applicable to the Portfolio as
a whole or for the Portfolios 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.
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 and/or UBS Global AM. The Sub-Adviser or,
where applicable, UBS Global AM, 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 will provide UBS Global
AM and the Board with a copy of such code of ethics, together with evidence of
its adoption. Within a reasonable time after 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-Advisers 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
pursuant to Rule 17j-1 and all other records relevant to the Sub-Advisers
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 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 promptly after such change.
(e) UBS Global AM represents that it has received a copy of the Sub-Advisers
Form ADV. UBS Global AM and the Sub-Adviser agree that neither of them nor
any of their affiliates, will in any way refer directly or indirectly to
their relationship with one another or any of their respective affiliates in
offering, marketing or other promotional materials without the express
written consent of the other, which consent will be promptly provided and not
unreasonably withheld. UBS Global AM consents to the Sub-Advisers listing of
UBS Global AM and the Trust and Portfolio in standard client lists disclosed
by the Sub-Adviser.
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. The Sub-Adviser may provide investment advice to other clients that
may differ from its advice to the Portfolio or Segment. The Sub-Adviser, its
clients, or its affiliates may engage in transactions that differ from or
conflict with the transactions undertaken on behalf of the Portfolio or
Segment, subject to any restrictions under applicable law or 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 Portfolios 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 Portfolios 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 Management 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
Portfolios 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. 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.
13. 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 its General Counsel. All
notices provided to the Sub-Adviser will be sent to the attention of Xxxx
Xxxxxx, Chief Operations Officer.
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.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
By: /s/Xxxx Xxxxxxx By: /s/Xxxxx Xxxxxxxxxx
Name: Xxxx Xxxxxxx Name: Xxxxx Xxxxxxxxxx
Title: Director and Assoc. GC Title: Senior Associate GC and
Executive Director
Xxxxxxx Capital Management, LLC
Attest:
By: /s/Xxxx X. Xxxxxxx By: /s/Xxxxxxxxxxx X. Xxxxxxx
Name: Xxxx X. Xxxxxxx Name: Xxxxxxxxxxx X. Xxxxxxx
Title: Senior Paralegal Title: President
For period ending January 31, 2008 Exhibit 77Q1
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 December 5, 2007, between UBS Global Asset
Management (Americas) Inc. (UBS 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 April 1, 2006
as amended August 1, 2006 (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 Trusts 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 Portfolios 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 Portfolios investment objective, policies and restrictions
as stated in the Trusts 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
Trusts custodian such information as UBS Global Americas and the Trusts
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 Trusts 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-Advisers 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 Trusts
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 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 Global AM recognizes that in some cases this procedure
may adversely affect the results obtained for the Portfolio or Segment.
Subject to the Sub-Advisers 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-Advisers 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 Trusts 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 31a-1 and Rule 31a-2 promulgated under the 1940 Act that are
prepared or maintained by the Sub-Adviser on behalf of the Trust are the
property of the Trust and will be surrendered promptly to the Trust upon
request. The Sub-Adviser further agrees to preserve for the periods
prescribed in Rule 31a-2 under the 1940 Act the records required to be
maintained under Rule 31a-1 under the 1940 Act.
(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 Trusts Trust
Instrument, By-Laws and Registration Statement, the Trusts 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 applicable requirements of 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 Trusts Trust Instrument, By-Laws, Registration
Statement, Trusts 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-Advisers 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 Trusts 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-Advisers 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 Trusts CCO, that arose under the Trust Compliance Procedures
that related to the Sub-Advisers management of the Portfolio or Segment.
The Sub-Adviser shall promptly provide the Trust CCO with copies of:
(i) the Sub-Advisers 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 CCOs performance of the Trust CCOs
responsibilities under Rule 38a-1 to review, evaluate and report to the Trusts
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-Advisers 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 Trusts 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 Trusts
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-Advisers
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 tothe Prospectuses or
SAIs 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 Funds
Prospectuses or SAIs 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, UBS Global AM, not the Portfolio, will pay to
the Sub-Adviser a fee, computed daily and payable monthly, at an annual rate
of .40% of the Portfolios 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-Advisers
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
Portfolios Segment of the Portfolio, the Sub-Adviser shall have no
responsibility for the Portfolios being in violation of any applicable law
or regulation or investment policy or restriction applicable to the Portfolio
as a whole or for the Portfolios 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-Advisers 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; (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 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-Advisers 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-Advisers 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 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 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 Portfolios performance in calculating its composites,
provided that Sub-Adviser may not separately disclose the Funds performance
(or the performance of Sub-Advisers 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 Trusts portfolio holdings to any person or
entity other than UBS Global AM, the Trusts 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 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 Portfolios
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 Portfolios 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 Portfolios 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 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
Xxxxxxxx Xxxxx, Senior Vice President, 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.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
By: /s/Xxxx Xxxxxxx By: /s/Xxxxx Xxxxxxxxxx
Name: Xxxx Xxxxxxx Name: Xxxxx Xxxxxxxxx
Title: Director and Assoc.
General Counsel Title: Senior Associate General Counsel and
Executive Director
Attest:
Delaware Management Company, a series of
Delaware Management Business Trust
Xxx Xxxxxxxx Xxxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
By: /s/Xxxxxx X. XXxxxxx By: /s/Xxxx X. X. Xxxxxxxx
Name: Xxxxxx X. XXxxxxx Name: Xxxx X.X. Xxxxxxxx
Title: Executive Title: Executive Vice President, Global
Administrative Assistant Marketing and Client Services
