SUBADVISORY AGREEMENT
THIS AGREEMENT is made by and between OppenheimerFunds, Inc., a
Colorado corporation (the "Adviser"), and OpCap Advisors, a Delaware general
partnership (the "Subadviser"), as of the date set forth below.
RECITAL
WHEREAS, Xxxxxxxxxxx Quest For Value Funds (the "Company") is
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end, management investment company;
WHEREAS, the Adviser is registered under the Investment Advisers Act of
1940, as amended (the "Advisers Act"), as an investment adviser and engages in
the business of acting as an investment adviser;
WHEREAS, the Subadviser is registered under the Advisers Act as an
investment adviser and engages in the business of acting as an investment
adviser;
WHEREAS, the Company's Declaration of Trust authorizes the Board of
Trustees of the Company to classify or reclassify authorized but unissued shares
of the Company into series of shares representing interests in various
investment portfolios;
WHEREAS, pursuant to such authority, the Company has established the
Opportunity Value Fund (the "Fund");
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
as of May 27, 1997, as amended on October 22, 1997, with the Company (the
"Investment Advisory Agreement"), pursuant to which the Adviser acts as
investment adviser with respect to the Fund; and
WHEREAS, pursuant to Paragraph 2 of the Investment Advisory Agreement,
the Adviser has retained and wishes to continue to retain the Subadviser for
purposes of rendering investment advisory services to the Adviser in connection
with the Fund upon the terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt of which are
hereby acknowledged, the parties hereto agree as follows:
I. Appointment and Obligations of the Adviser.
The Adviser hereby appoints the Subadviser to render, to the Adviser
with respect to the Fund, investment research and advisory services as set forth
below in Section II, under the supervision of the Adviser and subject to the
approval and direction of the Company's Board of Trustees (the "Board"), and the
Subadviser hereby accepts such appointment, all subject to the terms and
conditions contained herein. The Subadviser shall, for all purposes herein, be
deemed an independent contractor and shall not have, unless otherwise expressly
provided or authorized, any authority to act for or represent the Company or the
Fund in any way or otherwise to serve as or be deemed an agent of the Company or
the Fund.
II. Duties of the Subadviser and the Adviser.
A. Duties of the Subadviser.
The Subadviser shall regularly provide investment advice with respect
to the Fund and shall, subject to the terms of this Agreement, continuously
supervise the investment and reinvestment of cash, securities and instruments or
other property comprising the assets of the Fund, and in furtherance thereof,
the Subadviser's duties shall include:
1. Obtaining and evaluating pertinent information about significant developments
and economic, statistical and financial data, domestic, foreign or otherwise,
whether affecting the economy generally or the Fund, and whether concerning the
individual issuers whose securities are included in the Fund or the activities
in which such issuers engage, or with respect to securities which the Subadviser
considers desirable for inclusion in the Fund's investment portfolio;
2. Determining which securities shall be purchased, sold or exchanged by the
Fund or otherwise represented in the Fund's investment portfolio and regularly
reporting thereon to the Adviser and, at the request of the Adviser, to the
Board;
3. Formulating and implementing continuing programs for the purchases and sales
of the securities of such issuers and regularly reporting thereon to the Adviser
and, at the request of the Adviser, to the Board; and
4. Taking, on behalf of the Fund, all actions that appear to the Subadviser
necessary to carry into effect such investment program, including the placing of
purchase and sale orders, and making appropriate reports thereon to the Adviser
and the Board.
B. Duties of the Adviser.
The Adviser shall retain responsibility for, among other things,
providing the following advice and services with respect to the Fund:
1. Without limiting the obligation of the Subadviser to so comply, the Adviser
shall monitor the investment program maintained by the Subadviser for the Fund
to ensure that the Fund's assets are invested in compliance with this Agreement
and the Fund's Registration Statement, as currently in effect from time to time;
and
2. The Adviser shall oversee matters relating to Fund promotion, including, but
not limited to, marketing materials and the Subadviser's reports to the Board.
III. Representations, Warranties and Covenants.
A. Representations, Warranties and Covenants of the Subadviser.
1. Organization. The Subadviser is now, and will continue to be, a general
partnership ------------ duly formed and validly existing under the laws of its
jurisdiction of formation, fully authorized to enter into this Agreement and
carry out its duties and obligations hereunder.
2. Registration. The Subadviser is registered as an investment adviser with the
Securities and Exchange Commission (the "SEC") under the Advisers Act, and is
registered or licensed as an investment adviser under the laws of all
jurisdictions in which its activities require it to be so registered or
licensed, except where the failure to be so licensed would not have a material
adverse effect on the Subadviser. The Subadviser shall maintain such
registration or license in effect at all times during the term of this
Agreement.
3. Best Efforts. The Subadviser at all times shall provide its best judgment and
effort ------------- to the Adviser and the Fund in carrying out its obligations
hereunder.
4. Other Covenants. The Subadviser further agrees that: ---------------
a. it will use the same skill and care in providing such services as it uses in
providing services to other accounts for which it has investment management
responsibilities;
b. it will not make loans to any person to purchase or carry units of beneficial
interest in the Fund or make loans to the Fund;
c. it will report regularly to the Fund and to the Adviser and will make
appropriate persons available for the purpose of reviewing with representatives
of the Adviser on a regular basis the management of the Fund, including, without
limitation, review of the general investment strategy of the Fund, economic
considerations and general conditions affecting the marketplace;
d. as required by applicable laws and regulations, it will maintain books and
records with respect to the Fund's securities transactions and it will furnish
to the Adviser and to the Board such periodic and special reports as the Adviser
or the Board may reasonably request;
e. it will treat confidentially and as proprietary information of the Fund all
records and other information relative to the Fund, and will not use records and
information for any purpose other than performance of its responsibilities and
duties hereunder, except after prior notification to and approval in writing by
the Fund or when so requested by the Fund or required by law or regulation;
f. it will, on a continuing basis and at its own expense, (1) provide the
distributor of the Fund (the "Distributor") with assistance in the distribution
and marketing of the Fund in such amount and form as the Adviser may reasonably
request from time to time, and (2) use its best efforts to cause the portfolio
manager or other person who manages or is responsible for overseeing the
management of the Fund's portfolio (the "Portfolio Manager") to provide
marketing and distribution assistance to the Distributor, including, without
limitation, conference calls, meetings and road trips, provided that each
Portfolio Manager shall not be required to devote more than 10% of his or her
time to such marketing and distribution activities;
g. it will use its reasonable best efforts (i) to retain the services of the
Portfolio Manager who manages the portfolio of the Fund, from time to time and
(ii) to promptly obtain the services of a Portfolio Manager acceptable to the
Adviser if the services of the Portfolio Manager are no longer available to the
Subadviser;
h. it will, from time to time, assure that each Portfolio Manager is acceptable
to the Adviser;
i. it will obtain the written approval of the Adviser prior to designating a new
Portfolio Manager; provided, however, that, if the services of a Portfolio
Manager are no longer available to the Subadviser due to circumstances beyond
the reasonable control of the Subadviser (e.g., voluntary resignation, death or
disability), the Subadviser may designate an interim Portfolio Manager who (a)
shall be reasonably acceptable to the Adviser and (b) shall function for a
reasonable period of time until the Subadviser designates an acceptable
permanent replacement; and
j. it will promptly notify the Adviser of any impending change in Portfolio
Manager, portfolio management or any other material matter that may require
disclosure to the Board, shareholders of the Fund or dealers.
B. Representations, Warranties and Covenants of the Adviser.
1. Organization. The Adviser is now, and will continue to be, duly organized and
in good ------------ standing under the laws of its state of incorporation,
fully authorized to enter into this Agreement and carry out its duties and
obligations hereunder.
2. Registration. The Adviser is registered as an investment adviser with the SEC
under the Advisers Act, and is registered or licensed as an investment adviser
under the laws of all jurisdictions in which its activities require it to be so
registered or licensed. The Adviser shall maintain such registration or license
in effect at all times during the term of this Agreement.
3. Best Efforts. The Adviser at all times shall provide its best judgment and
effort to the Fund in carrying out its obligations hereunder. For a period of
five years from November 22, 1995, and subject to the Adviser's fiduciary
obligations to the Fund and its shareholders, the Adviser will not recommend to
the Board that the Fund be reorganized into another Fund unless the total net
assets of the Fund are less than $100 million at the time of such
reorganization.
IV. Compliance with Applicable Requirements.
In carrying out its obligations under this Agreement, the Subadviser
shall at all times conform to:
A. all applicable provisions of the 1940 Act and any rules and regulations
adopted thereunder;
B. the provisions of the registration statement of the Company, as the same may
be amended from time to time, under the Securities Act of 1933, as amended, and
the 1940 Act;
C. the provisions of the Company's Declaration of Trust or other governing
document, as amended from time to time;
D. the provisions of the By-laws of the Company, as amended from time to time;
E. any other applicable provisions of state or federal law; and
F. guidelines, investment restrictions, policies, procedures or instructions
adopted or issued by the Company, the Fund or the Adviser from time to time.
The Adviser shall promptly notify the Subadviser of any changes or amendments to
the provisions of B., C., D. and F. above when such changes or amendments relate
to the obligations of the Subadviser.
V. Control by the Board.
Any investment program undertaken by the Subadviser pursuant to this
Agreement, as well as any other activities undertaken by the Subadviser with
respect to the Fund, shall at all times be subject to any directives of the
Adviser and the Board.
VI. Books and Records.
The Subadviser agrees that all records which it maintains for the Fund
on behalf of the Adviser are the property of the Fund and further agrees to
surrender promptly to the Fund or to the Adviser any of such records upon
request. The Subadviser further agrees to preserve for the periods prescribed by
applicable laws, rules and regulations all records required to be maintained by
the Subadviser on behalf of the Adviser under such applicable laws, rules and
regulations, or such longer period as the Adviser may reasonably request from
time to time.
VII. Broker-Dealer Relationships.
A. Portfolio Trades.
The Subadviser, at its own expense, and to the extent
appropriate, in consultation with the Adviser, shall place all orders for the
purchase and sale of portfolio securities for the Fund with brokers or dealers
selected by the Subadviser, which may include, to the extent permitted by the
Adviser and the Fund, brokers or dealers affiliated with the Subadviser. The
Subadviser shall use its best efforts to seek to execute portfolio transactions
at prices that are advantageous to the Fund and at commission rates that are
reasonable in relation to the benefits received.
B. Selection of Broker-Dealers.
With respect to the execution of particular transactions, the
Subadviser may, to the extent permitted by the Adviser and the Fund, select
brokers or dealers who also provide brokerage and research services (as those
terms are defined in Section 28(e) of the Securities Exchange Act of 1934, as
amended) to the Fund and/or the other accounts over which the Subadviser or its
affiliates exercise investment discretion. The Subadviser is authorized to pay a
broker or dealer who provides such brokerage and research services a commission
for executing a portfolio transaction for the Fund that is in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction if the Subadviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer. This determination may be viewed in
terms of either that particular transaction or the overall responsibilities that
the Subadviser and its affiliates have with respect to accounts over which they
exercise investment discretion. The Adviser, Subadviser and the Board shall
periodically review the commissions paid by the Fund to determine, among other
things, if the commissions paid over representative periods of time were
reasonable in relation to the benefits received.
C. Soft Dollar Arrangements.
The Subadviser may enter into "soft dollar" arrangements
through the agency of third parties on behalf of the Adviser. Soft dollar
arrangements for services may be entered into in order to facilitate an
improvement in performance in respect of the Subadviser's service to the Adviser
with respect to the Fund. The Subadviser makes no direct payments but instead
undertakes to place business with broker-dealers who in turn pay third parties
who provide these services. Soft dollar transactions will be conducted on an
arm's-length basis, and the Subadviser will secure best execution for the
Adviser. Any arrangements involving soft dollars and/or brokerage services shall
be effected in compliance with Section 28(e) of the Securities Exchange Act of
1934, as amended, and the policies that the Adviser and the Board may adopt from
time to time. The Subadviser agrees to provide reports to the Adviser as
necessary for purposes of providing information on these arrangements to the
Board.
VIII. Compensation.
A. Amount of Compensation. The Adviser shall pay the Subadviser,
as compensation for services rendered hereunder, from its own
assets, an annual fee, payable monthly, equal to 40% of the
investment advisory fee collected by the Adviser from the
Fund, based on the total net assets of the Fund existing as of
November 22, 1995 (the "base amount"), plus 30% of the
advisory fee collected by the Adviser, based on the total net
assets of the Fund that exceed the base amount (the "marginal
amount"), in each case calculated after any waivers, voluntary
or otherwise.
B. Calculation of Compensation. Except as hereinafter set forth,
compensation under this Agreement shall be calculated and
accrued on the same basis as the advisory fee paid to the
Adviser by the Fund. If this Agreement becomes effective
subsequent to the first day of a month or shall terminate
before the last day of a month, compensation for that part of
the month this Agreement is in effect shall be prorated in a
manner consistent with the calculation of the fees set forth
above.
C. Payment of Compensation: Subject to the provisions of this paragraph,
payment of the ------------------------- Subadviser's compensation for the
preceding month shall be made within 15 days after the end of the preceding
month.
D. Reorganization of the Fund. If the Fund is reorganized with
another investment company for which the Subadviser does not
serve as an investment adviser or subadviser, and the Fund is
the surviving entity, the subadvisory fee payable under this
section shall be adjusted in an appropriate manner as the
parties may agree.
IX. Allocation of Expenses.
The Subadviser shall pay the expenses incurred in providing services in
connection with this Agreement, including, but not limited to, the salaries,
employment benefits and other related costs of those of its personnel engaged in
providing investment advice to the Fund hereunder, including, without
limitation, office space, office equipment, telephone and postage costs and
other expenses. In the event of an "assignment" of this Agreement, other than an
assignment resulting solely by action of the Adviser or an affiliate thereof,
the Subadviser shall be responsible for payment of all costs and expenses
incurred by the Adviser and the Fund relating thereto, including, but not
limited to, reasonable legal, accounting, printing and mailing costs related to
obtaining approval of Fund shareholders.
X. Non-Exclusivity.
The services of the Subadviser with respect to the Company and the Fund
are not to be deemed to be exclusive, and the Subadviser shall be free to render
investment advisory and administrative or other services to others (including
other investment companies) and to engage in other activities, subject to the
provisions of a certain Agreement Not to Compete dated as of November 22, 1995
among the Adviser, Xxxxxxxxxxx Capital, the Subadviser and Quest For Value
Distributors (the "Agreement Not to Compete"). It is understood and agreed that
officers or directors of the Subadviser may serve as officers or directors of
the Adviser or of the Fund; that officers or directors of the Adviser or of the
Company may serve as officers or directors of the Subadviser to the extent
permitted by law; and that the officers and directors of the Subadviser are not
prohibited from engaging in any other business activity or from rendering
services to any other person, or from serving as partners, officers, directors
or trustees of any other firm or trust, including other investment advisory
companies (subject to the provisions of the Agreement Not to Compete) provided
it is permitted by applicable law and does not adversely affect the Company or
the Fund.
XI. Term.
This Agreement shall become effective at the close of business on the
date hereof and shall remain in force and effect, subject to Paragraphs XII.A
and XII.B hereof and approval by the Fund's shareholders, until December 31,
2000.
XII. Renewal.
Following the expiration of its initial term, the Agreement shall
continue in full force and effect from year to year until November 22, 2005,
provided that such continuance is specifically approved:
A. at least annually (1) by the Board or by the vote of a
majority of the Fund's outstanding voting securities (as
defined in Section 2(a)(42) of the 1940 Act), and (2) by the
affirmative vote of a majority of the Trustees who are not
parties to this Agreement or interested persons of a party to
this Agreement (other than as a Trustee of the Fund), by votes
cast in person at a meeting specifically called for such
purpose; or
B. by such method required by applicable law, rule or regulation then in
effect.
XIII. Termination.
A. Termination by the Company. This Agreement may be terminated
at any time, without the payment of any penalty, by vote of
the Board or by vote of a majority of the Fund's outstanding
voting securities, on sixty (60) days' written notice. The
notice provided for herein may be waived by the party required
to be notified.
B. Assignment. This Agreement shall automatically terminate in the event of
its "assignment", as ---------- defined in Section 2 (a) (4) of the 1940
Act. In the event of an assignment that occurs solely due to the change in
control of the Subadviser (provided that no condition exists that permits,
or, upon the consummation of the assignment, will permit, the termination
of this Agreement by the Adviser pursuant to Section XIII. D. hereof), the
Adviser and the Subadviser, at the sole expense of the Subadviser, shall
use their reasonable best efforts to obtain shareholder approval of a
successor Subadvisory Agreement on substantially the same terms as
contained in this Agreement.
C. Payment of Fees After Termination. Notwithstanding the termination of this
Agreement prior to ---------------------------------- the tenth anniversary
of November 22, 1995, the Adviser shall continue to pay to the Subadviser
the subadvisory fee for the term of this Agreement and any renewals thereof
through such tenth anniversary, if: (1) the Adviser or the Company
terminates this Agreement for a reason other than the reasons set forth in
Section XIII.D. hereof, provided the Investment Advisory Agreement remains
in effect; (2) the Fund reorganizes with another investment company advised
by the Adviser (or an affiliate of the Adviser) and for which the
Subadviser does not serve as an investment adviser or subadviser and such
other investment company is the surviving entity; or (3) the Investment
Advisory Agreement terminates (i) by reason of an "assignment"; (ii)
because the Adviser is disqualified from serving as an investment adviser;
or (iii) by reason of a voluntary termination by the Adviser; provided that
the Subadviser does not serve as the investment adviser or subadviser of
the Fund after such termination of the Investment Advisory Agreement. The
amount of the subadvisory fee paid pursuant to this section shall be
calculated on the basis of the Fund's net assets measured at the time of
such termination or such reorganization. Notwithstanding anything to the
contrary, if the Subadviser terminates this Agreement or if this Agreement
is terminated by operation of law, due solely to an act or omission by the
Subadviser, Xxxxxxxxxxx Capital ("OpCap") or their respective partners,
subsidiaries, directors, officers, employees or agents (other than by
reason of an "assignment"of this Agreement), then the Adviser shall not be
liable for any further payments under this Agreement, provided, however,
that if at any time prior to the end of the term of the Agreement Not to
Compete any event that would have permitted the termination of this
Agreement by the Adviser pursuant to Section XIII. D. (3) hereof occurs,
the Adviser shall be under no further obligation to pay any subadvisory
fees.
D. Termination by the Adviser. The Adviser may terminate this Agreement
without penalty and ---------------------------- without the payment of any
fee or penalty, immediately after giving written notice, upon the
occurrence of any of the following events:
1. The Fund's investment performance of the Fund's Class
A shares compared to the appropriate universe of
Class A shares (or their equivalent), as set forth on
Schedule D-1, as amended from time to time, ranks in
the bottom quartile for two consecutive calendar
years (beginning with the calendar year 1995) and
earns a Morningstar three-year rating of less than
three (3) stars at the time of such termination; or
2. Any of the Subadviser, OpCap, their respective
partners, subsidiaries, affiliates, directors,
officers, employees or agents engages in an action or
omits to take an action that would cause the
Subadviser or OpCap to be disqualified in any manner
under Section 9(a) of the 1940 Act, if the SEC were
not to grant an exemptive order under Section 9(c)
thereof or that would constitute grounds for the SEC
to deny, revoke or suspend the registration of the
Subadviser as an investment adviser with the SEC;
3. Any of OpCap, the Subadviser, their respective
partners, subsidiaries, affiliates, directors,
officers, employees or agents causes a material
violation of the Agreement Not to Compete which is
not cured in accordance with the provisions of that
agreement; or
4. The Subadviser breaches the representations contained in Paragraph
III.A.4.i. of this Agreement or any other material provision of this
Agreement, and any such breach is not cured within a reasonable period of
time after notice thereof from the Adviser to the Subadviser. However,
consistent with its fiduciary obligations, for a period of seven months the
Adviser will not terminate this Agreement solely because the Subadviser has
failed to designate an acceptable permanent replacement to a Portfolio
Manager whose services are no longer available to the Subadviser due to
circumstances beyond the reasonable control of the Subadviser, provided
that the Subadviser uses its reasonable best efforts to promptly obtain the
services of a Portfolio Manager acceptable to the Adviser and further
provided that the Adviser has not unreasonably withheld approval of such
replacement Portfolio Manager.
E. Transactions in Progress upon Termination. The Adviser and
Subadviser will cooperate with each other to ensure that
portfolio or other transactions in progress at the date of
termination of this Agreement shall be completed by the
Adviser in accordance with the terms of such transactions, and
to this end the Subadviser shall provide the Adviser with all
necessary information and documentation to secure the
implementation thereof.
XIV. Non-Solicitation.
During the term of this Agreement, the Adviser (and its affiliates
under its control) shall not solicit or knowingly assist in the solicitation of
any Portfolio Manager of the Fund or any portfolio assistant of the Fund then
employed by the Subadviser or OpCap, provided, however, that the Adviser (or its
affiliates) may solicit or hire any such individual who (A) the Subadviser or
OpCap (or its affiliates) has terminated or (B) has voluntarily terminated his
or her employment with the Subadviser, OpCap (or its affiliates) without
inducement of the Adviser (or its affiliates under its control) prior to the
time of such solicitation. Advertising in general circulation newspapers or
industry newsletters by the Adviser shall not constitute "inducement" by the
Adviser (or its affiliates under its control).
XV. Liability of the Subadviser.
In the absence of willful misfeasance, bad faith, negligence or
reckless disregard of obligations or duties hereunder on the part of the
Subadviser or any of its officers, directors or employees, the Subadviser shall
not be subject to liability to the Adviser for any act or omission in the course
of, or connected with, rendering services hereunder or for any losses that may
be sustained in the purchase, holding or sale of any security; provided,
however, that the foregoing shall not be construed to relieve the Subadviser of
any liability it may have arising under the Agreement Not to Compete or the
Acquisition Agreement dated August 17, 1995, among the Subadviser, the Adviser
and certain affiliates of the Subadviser.
XVI. Notices.
Any notice or other communication required or that may be given
hereunder shall be in writing and shall be delivered personally, telecopied,
sent by certified, registered or express mail, postage prepaid or sent by
national next-day delivery service and shall be deemed given when so delivered
personally or telecopied, or if mailed, two days after the date of mailing, or
if by next-day delivery service, on the business day following delivery thereto,
as follows or to such other location as any party notifies any other party:
A. if to the Adviser, to:
OppenheimerFunds, Inc.
Xxx Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx
Executive Vice President and General Counsel
Telecopier: 212-321-1159
B. if to the Subadviser, to:
OpCap Advisors
x/x Xxxxxxxxxxx Xxxxxxx
0000 Xxxxxx of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxx X. Xxxx
Secretary
Telecopier: 000-000-0000
XVII. Questions of Interpretation.
This Agreement shall be governed by the laws of the State of New York
applicable to agreements made and to be performed entirely within the State of
New York (without regard to any conflicts of law principles thereof). Any
question of interpretation of any term or provision of this Agreement having a
counterpart in or otherwise derived from a term or provision of the 1940 Act
shall be resolved by reference to such term or provision of the 1940 Act and to
interpretations thereof, if any, by the United States Courts or, in the absence
of any controlling decision of any such court, by rules, regulations or orders
of the SEC issued pursuant to the 1940 Act. In addition, where the effect of a
requirement of the 1940 Act reflected in any provision of this Agreement is
revised by rule, regulation or order of the SEC, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
XVIII. Form ADV - Delivery.
The Adviser hereby acknowledges that it has received from the
Subadviser a copy of the Subadviser's Form ADV, Part II as currently filed, at
least 48 hours prior to entering into this Agreement and that it has read and
understood the disclosures set forth in the Subadviser's Form ADV, Part II.
XIX. 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.
XX. Counterparts.
This Agreement may be executed in counterparts, each of which shall
constitute an original and both of which, collectively, shall constitute one
agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective officers as of the 10th day of March ,
2000.
OPPENHEIMERFUNDS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Xxxxxx X. Xxxxxxx
Executive Vice President &
General Counsel
OPCAP ADVISORS
By:/s/ Xxxxxxx X. Xxxx
-------------------------------
Xxxxxxx X. Xxxx
Senior Vice President &
Secretary
SCHEDULE XIII.D.1
The universe of funds to which Class A shares of funds subadvised by
OpCap Advisors will be compared to so that it can be determined in which
quartile the performance ranks shall consist of those funds with the same Lipper
investment objective being offered as the only class of shares of such fund or,
in the case where there is more than one class of shares being offered, with a
front-end load (typically referred to as Class A shares).
The present Lipper investment objective categories for the funds are:
Fund Lipper Category
Xxxxxxxxxxx Quest Value Fund, Inc. ............................. Large Cap Value
Xxxxxxxxxxx Quest Global Value Fund, Inc. ....................... Global
Xxxxxxxxxxx Quest Opportunity Value Fund .....................Flexible Portfolio
Xxxxxxxxxxx Quest Small Cap Fund ......................... Small Cap
Xxxxxxxxxxx Quest Balanced Value Fund ........................... Balanced
Xxxxxxxxxxx Quest Capital Value Fund, Inc. .....................Multi-Cap Value
advisory\236_subadv
SUBADVISORY AGREEMENT
THIS AGREEMENT is made by and between OppenheimerFunds, Inc., a
Colorado corporation (the "Adviser"), and OpCap Advisors, a Delaware general
partnership (the "Subadviser"), as of the date set forth below.
RECITAL
WHEREAS, Xxxxxxxxxxx Quest For Value Funds (the "Company") is
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end, management investment company;
WHEREAS, the Adviser is registered under the Investment Advisers Act of
1940, as amended (the "Advisers Act"), as an investment adviser and engages in
the business of acting as an investment adviser;
WHEREAS, the Subadviser is registered under the Advisers Act as an
investment adviser and engages in the business of acting as an investment
adviser;
WHEREAS, the Company's Declaration of Trust authorizes the Board of
Trustees of the Company to classify or reclassify authorized but unissued shares
of the Company into series of shares representing interests in various
investment portfolios;
WHEREAS, pursuant to such authority, the Company has established the Small Cap
Fund (the "Fund");
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
as of May 27, 1997, as amended on October 22, 1997, with the Company (the
"Investment Advisory Agreement"), pursuant to which the Adviser acts as
investment adviser with respect to the Fund; and
WHEREAS, pursuant to Paragraph 2 of the Investment Advisory Agreement,
the Adviser has retained and wishes to continue to retain the Subadviser for
purposes of rendering investment advisory services to the Adviser in connection
with the Fund upon the terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt of which are
hereby acknowledged, the parties hereto agree as follows:
I. Appointment and Obligations of the Adviser.
The Adviser hereby appoints the Subadviser to render, to the Adviser
with respect to the Fund, investment research and advisory services as set forth
below in Section II, under the supervision of the Adviser and subject to the
approval and direction of the Company's Board of Trustees (the "Board"), and the
Subadviser hereby accepts such appointment, all subject to the terms and
conditions contained herein. The Subadviser shall, for all purposes herein, be
deemed an independent contractor and shall not have, unless otherwise expressly
provided or authorized, any authority to act for or represent the Company or the
Fund in any way or otherwise to serve as or be deemed an agent of the Company or
the Fund.
II. Duties of the Subadviser and the Adviser.
A. Duties of the Subadviser.
The Subadviser shall regularly provide investment advice with respect
to the Fund and shall, subject to the terms of this Agreement, continuously
supervise the investment and reinvestment of cash, securities and instruments or
other property comprising the assets of the Fund, and in furtherance thereof,
the Subadviser's duties shall include:
1. Obtaining and evaluating pertinent information about significant developments
and economic, statistical and financial data, domestic, foreign or otherwise,
whether affecting the economy generally or the Fund, and whether concerning the
individual issuers whose securities are included in the Fund or the activities
in which such issuers engage, or with respect to securities which the Subadviser
considers desirable for inclusion in the Fund's investment portfolio;
2. Determining which securities shall be purchased, sold or exchanged by the
Fund or otherwise represented in the Fund's investment portfolio and regularly
reporting thereon to the Adviser and, at the request of the Adviser, to the
Board;
3. Formulating and implementing continuing programs for the purchases and sales
of the securities of such issuers and regularly reporting thereon to the Adviser
and, at the request of the Adviser, to the Board; and
4. Taking, on behalf of the Fund, all actions that appear to the Subadviser
necessary to carry into effect such investment program, including the placing of
purchase and sale orders, and making appropriate reports thereon to the Adviser
and the Board.
B. Duties of the Adviser.
The Adviser shall retain responsibility for, among other things,
providing the following advice and services with respect to the Fund:
1. Without limiting the obligation of the Subadviser to
so comply, the Adviser shall monitor the investment
program maintained by the Subadviser for the Fund to
ensure that the Fund's assets are invested in
compliance with this Agreement and the Fund's
Registration Statement, as currently in effect from
time to time; and
2. The Adviser shall oversee matters relating to Fund promotion, including, but
not limited to, marketing materials and the Subadviser's reports to the Board.
III. Representations, Warranties and Covenants.
A. Representations, Warranties and Covenants of the Subadviser.
1. Organization. The Subadviser is now, and will continue to be, a general
partnership ------------ duly formed and validly existing under the laws of its
jurisdiction of formation, fully authorized to enter into this Agreement and
carry out its duties and obligations hereunder.
2. Registration. The Subadviser is registered as an investment
adviser with the Securities and Exchange Commission (the
"SEC") under the Advisers Act, and is registered or licensed
as an investment adviser under the laws of all jurisdictions
in which its activities require it to be so registered or
licensed, except where the failure to be so licensed would not
have a material adverse effect on the Subadviser. The
Subadviser shall maintain such registration or license in
effect at all times during the term of this Agreement.
3. Best Efforts. The Subadviser at all times shall provide its best judgment and
effort ------------- to the Adviser and the Fund in carrying out its obligations
hereunder.
4. Other Covenants. The Subadviser further agrees that:
---------------
a. it will use the same skill and care in providing such services as it uses in
providing services to other accounts for which it has investment management
responsibilities;
b. it will not make loans to any person to purchase or carry units of beneficial
interest in the Fund or make loans to the Fund;
c. it will report regularly to the Fund and to
the Adviser and will make appropriate
persons available for the purpose of
reviewing with representatives of the
Adviser on a regular basis the management of
the Fund, including, without limitation,
review of the general investment strategy of
the Fund, economic considerations and
general conditions affecting the
marketplace;
d. as required by applicable laws and regulations, it will maintain books
and records with respect to the Fund's securities transactions and it will
furnish to the Adviser and to the Board such periodic and special reports
as the Adviser or the Board may reasonably request;
e. it will treat confidentially and as
proprietary information of the Fund all
records and other information relative to
the Fund, and will not use records and
information for any purpose other than
performance of its responsibilities and
duties hereunder, except after prior
notification to and approval in writing by
the Fund or when so requested by the Fund or
required by law or regulation;
f. it will, on a continuing basis and at its own expense, (1) provide the
distributor of the Fund (the "Distributor") with assistance in the
distribution and marketing of the Fund in such amount and form as the
Adviser may reasonably request from time to time, and (2) use its best
efforts to cause the portfolio manager or other person who manages or is
responsible for overseeing the management of the Fund's portfolio (the
"Portfolio Manager") to provide marketing and distribution assistance to
the Distributor, including, without limitation, conference calls, meetings
and road trips, provided that each Portfolio Manager shall not be required
to devote more than 10% of his or her time to such marketing and
distribution activities;
g. it will use its reasonable best efforts (i)
to retain the services of the Portfolio
Manager who manages the portfolio of the
Fund, from time to time and (ii) to promptly
obtain the services of a Portfolio Manager
acceptable to the Adviser if the services of
the Portfolio Manager are no longer
available to the Subadviser;
h. it will, from time to time, assure that each Portfolio Manager is
acceptable to the Adviser;
i. it will obtain the written approval of the Adviser prior to designating
a new Portfolio Manager; provided, however, that, if the services of a
Portfolio Manager are no longer available to the Subadviser due to
circumstances beyond the reasonable control of the Subadviser (e.g.,
voluntary resignation, death or disability), the Subadviser may designate
an interim Portfolio Manager who (a) shall be reasonably acceptable to the
Adviser and (b) shall function for a reasonable period of time until the
Subadviser designates an acceptable permanent replacement; and
j. it will promptly notify the Adviser of any impending change in Portfolio
Manager, portfolio management or any other material matter that may require
disclosure to the Board, shareholders of the Fund or dealers.
B. Representations, Warranties and Covenants of the Adviser.
1. Organization. The Adviser is now, and will continue to be, duly
organized and in good ------------ standing under the laws of its state of
incorporation, fully authorized to enter into this Agreement and carry out
its duties and obligations hereunder.
2. Registration. The Adviser is registered as an investment
adviser with the SEC under the Advisers Act, and is registered
or licensed as an investment adviser under the laws of all
jurisdictions in which its activities require it to be so
registered or licensed. The Adviser shall maintain such
registration or license in effect at all times during the term
of this Agreement.
3. Best Effo
rts. The Adviser at all times shall provide its best judgment
and effort to ------------- the Fund in carrying out its obligations
hereunder.
IV. Compliance with Applicable Requirements.
In carrying out its obligations under this Agreement, the Subadviser
shall at all times conform to:
A. all applicable provisions of the 1940 Act and any rules and regulations
adopted thereunder;
B. the provisions of the registration statement of the Company, as the same
may be amended from time to time, under the Securities Act of 1933, as
amended, and the 1940 Act;
C. the provisions of the Company's Declaration of Trust or other governing
document, as amended from time to time;
D. the provisions of the By-laws of the Company, as amended from time to time;
E. any other applicable provisions of state or federal law; and
F. guidelines, investment restrictions, policies, procedures or instructions
adopted or issued by the Company, the Fund or the Adviser from time to
time.
The Adviser shall promptly notify the Subadviser of any changes or
amendments to the provisions of B., C., D. and F. above when such changes
or amendments relate to the obligations of the Subadviser.
V. Control by the Board.
Any investment program undertaken by the Subadviser pursuant to this
Agreement, as well as any other activities undertaken by the Subadviser with
respect to the Fund, shall at all times be subject to any directives of the
Adviser and the Board.
VI. Books and Records.
The Subadviser agrees that all records which it maintains for the Fund
on behalf of the Adviser are the property of the Fund and further agrees to
surrender promptly to the Fund or to the Adviser any of such records upon
request. The Subadviser further agrees to preserve for the periods prescribed by
applicable laws, rules and regulations all records required to be maintained by
the Subadviser on behalf of the Adviser under such applicable laws, rules and
regulations, or such longer period as the Adviser may reasonably request from
time to time.
VII. Broker-Dealer Relationships.
A. Portfolio Trades.
The Subadviser, at its own expense, and to the extent
appropriate, in consultation with the Adviser, shall place all orders for the
purchase and sale of portfolio securities for the Fund with brokers or dealers
selected by the Subadviser, which may include, to the extent permitted by the
Adviser and the Fund, brokers or dealers affiliated with the Subadviser. The
Subadviser shall use its best efforts to seek to execute portfolio transactions
at prices that are advantageous to the Fund and at commission rates that are
reasonable in relation to the benefits received.
B. Selection of Broker-Dealers.
With respect to the execution of particular transactions, the
Subadviser may, to the extent permitted by the Adviser and the Fund, select
brokers or dealers who also provide brokerage and research services (as those
terms are defined in Section 28(e) of the Securities Exchange Act of 1934, as
amended) to the Fund and/or the other accounts over which the Subadviser or its
affiliates exercise investment discretion. The Subadviser is authorized to pay a
broker or dealer who provides such brokerage and research services a commission
for executing a portfolio transaction for the Fund that is in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction if the Subadviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer. This determination may be viewed in
terms of either that particular transaction or the overall responsibilities that
the Subadviser and its affiliates have with respect to accounts over which they
exercise investment discretion. The Adviser, Subadviser and the Board shall
periodically review the commissions paid by the Fund to determine, among other
things, if the commissions paid over representative periods of time were
reasonable in relation to the benefits received.
C. Soft Dollar Arrangements.
The Subadviser may enter into "soft dollar" arrangements
through the agency of third parties on behalf of the Adviser. Soft dollar
arrangements for services may be entered into in order to facilitate an
improvement in performance in respect of the Subadviser's service to the Adviser
with respect to the Fund. The Subadviser makes no direct payments but instead
undertakes to place business with broker-dealers who in turn pay third parties
who provide these services. Soft dollar transactions will be conducted on an
arm's-length basis, and the Subadviser will secure best execution for the
Adviser. Any arrangements involving soft dollars and/or brokerage services shall
be effected in compliance with Section 28(e) of the Securities Exchange Act of
1934, as amended, and the policies that the Adviser and the Board may adopt from
time to time. The Subadviser agrees to provide reports to the Adviser as
necessary for purposes of providing information on these arrangements to the
Board.
VIII. Compensation.
A. Amount of Compensation. The Adviser shall pay the Subadviser,
as compensation for services rendered hereunder, from its own
assets, an annual fee, payable monthly, equal to 40% of the
investment advisory fee collected by the Adviser from the
Fund, based on the total net assets of the Fund existing as of
November 22, 1995 (the "base amount"), plus 30% of the
advisory fee collected by the Adviser, based on the total net
assets of the Fund that exceed the base amount (the "marginal
amount"), in each case calculated after any waivers, voluntary
or otherwise.
B. Calculation of Compensation. Except as hereinafter set forth,
compensation under this Agreement shall be calculated and
accrued on the same basis as the advisory fee paid to the
Adviser by the Fund. If this Agreement becomes effective
subsequent to the first day of a month or shall terminate
before the last day of a month, compensation for that part of
the month this Agreement is in effect shall be prorated in a
manner consistent with the calculation of the fees set forth
above.
C. Payment of Compensation: Subject to the provisions of this paragraph,
payment of the ------------------------- Subadviser's compensation for the
preceding month shall be made within 15 days after the end of the preceding
month.
D. Reorganization of the Fund. If the Fund is reorganized with another
investment company for which the Subadviser does not serve as an investment
adviser or subadviser, and the Fund is the surviving entity, the
subadvisory fee payable under this section shall be adjusted in an
appropriate manner as the parties may agree.
IX. Allocation of Expenses.
The Subadviser shall pay the expenses incurred in providing services in
connection with this Agreement, including, but not limited to, the salaries,
employment benefits and other related costs of those of its personnel engaged in
providing investment advice to the Fund hereunder, including, without
limitation, office space, office equipment, telephone and postage costs and
other expenses. In the event of an "assignment" of this Agreement, other than an
assignment resulting solely by action of the Adviser or an affiliate thereof,
the Subadviser shall be responsible for payment of all costs and expenses
incurred by the Adviser and the Fund relating thereto, including, but not
limited to, reasonable legal, accounting, printing and mailing costs related to
obtaining approval of Fund shareholders.
X. Non-Exclusivity.
The services of the Subadviser with respect to the Company and the Fund
are not to be deemed to be exclusive, and the Subadviser shall be free to render
investment advisory and administrative or other services to others (including
other investment companies) and to engage in other activities, subject to the
provisions of a certain Agreement Not to Compete dated as of November 22, 1995
among the Adviser, Xxxxxxxxxxx Capital, the Subadviser and Quest For Value
Distributors (the "Agreement Not to Compete"). It is understood and agreed that
officers or directors of the Subadviser may serve as officers or directors of
the Adviser or of the Fund; that officers or directors of the Adviser or of the
Company may serve as officers or directors of the Subadviser to the extent
permitted by law; and that the officers and directors of the Subadviser are not
prohibited from engaging in any other business activity or from rendering
services to any other person, or from serving as partners, officers, directors
or trustees of any other firm or trust, including other investment advisory
companies (subject to the provisions of the Agreement Not to Compete) provided
it is permitted by applicable law and does not adversely affect the Company or
the Fund.
XI. Term.
This Agreement shall become effective at the close of business on the
date hereof and shall remain in force and effect, subject to Paragraphs XII.A
and XII.B hereof and approval by the Fund's shareholders, until December 31,
2000.
XII. Renewal.
Following the expiration of its initial term, the Agreement shall
continue in full force and effect from year to year until November 22, 2005,
provided that such continuance is specifically approved:
A. at least annually (1) by the Board or by the vote of a
majority of the Fund's outstanding voting securities (as
defined in Section 2(a)(42) of the 1940 Act), and (2) by the
affirmative vote of a majority of the Trustees who are not
parties to this Agreement or interested persons of a party to
this Agreement (other than as a Trustee of the Fund), by votes
cast in person at a meeting specifically called for such
purpose; or
B. by such method required by applicable law, rule or regulation then in
effect.
XIII. Termination.
A. Termination by the Company. This Agreement may be terminated
at any time, without the payment of any penalty, by vote of
the Board or by vote of a majority of the Fund's outstanding
voting securities, on sixty (60) days' written notice. The
notice provided for herein may be waived by the party required
to be notified.
B. Assignment. This Agreement shall automatically terminate in the event of
its "assignment", as ---------- defined in Section 2 (a) (4) of the 1940
Act. In the event of an assignment that occurs solely due to the change in
control of the Subadviser (provided that no condition exists that permits,
or, upon the consummation of the assignment, will permit, the termination
of this Agreement by the Adviser pursuant to Section XIII. D. hereof), the
Adviser and the Subadviser, at the sole expense of the Subadviser, shall
use their reasonable best efforts to obtain shareholder approval of a
successor Subadvisory Agreement on substantially the same terms as
contained in this Agreement.
C. Payment of Fees After Termination. Notwithstanding the termination of this
Agreement prior to ---------------------------------- the tenth anniversary
of November 22, 1995, the Adviser shall continue to pay to the Subadviser
the subadvisory fee for the term of this Agreement and any renewals thereof
through such tenth anniversary, if: (1) the Adviser or the Company
terminates this Agreement for a reason other than the reasons set forth in
Section XIII.D. hereof, provided the Investment Advisory Agreement remains
in effect; (2) the Fund reorganizes with another investment company advised
by the Adviser (or an affiliate of the Adviser) and for which the
Subadviser does not serve as an investment adviser or subadviser and such
other investment company is the surviving entity; or (3) the Investment
Advisory Agreement terminates (i) by reason of an "assignment"; (ii)
because the Adviser is disqualified from serving as an investment adviser;
or (iii) by reason of a voluntary termination by the Adviser; provided that
the Subadviser does not serve as the investment adviser or subadviser of
the Fund after such termination of the Investment Advisory Agreement. The
amount of the subadvisory fee paid pursuant to this section shall be
calculated on the basis of the Fund's net assets measured at the time of
such termination or such reorganization. Notwithstanding anything to the
contrary, if the Subadviser terminates this Agreement or if this Agreement
is terminated by operation of law, due solely to an act or omission by the
Subadviser, Xxxxxxxxxxx Capital ("OpCap") or their respective partners,
subsidiaries, directors, officers, employees or agents (other than by
reason of an "assignment"of this Agreement), then the Adviser shall not be
liable for any further payments under this Agreement, provided, however,
that if at any time prior to the end of the term of the Agreement Not to
Compete any event that would have permitted the termination of this
Agreement by the Adviser pursuant to Section XIII. D. (3) hereof occurs,
the Adviser shall be under no further obligation to pay any subadvisory
fees.
D. Termination by the Adviser. The Adviser may terminate this Agreement
without penalty and ---------------------------- without the payment of any
fee or penalty, immediately after giving written notice, upon the
occurrence of any of the following events:
1. The Fund's investment performance of the Fund's Class
A shares compared to the appropriate universe of
Class A shares (or their equivalent), as set forth on
Schedule D-1, as amended from time to time, ranks in
the bottom quartile for two consecutive calendar
years (beginning with the calendar year 1995) and
earns a Morningstar three-year rating of less than
three (3) stars at the time of such termination; or
2. Any of the Subadviser, OpCap, their respective
partners, subsidiaries, affiliates, directors,
officers, employees or agents engages in an action or
omits to take an action that would cause the
Subadviser or OpCap to be disqualified in any manner
under Section 9(a) of the 1940 Act, if the SEC were
not to grant an exemptive order under Section 9(c)
thereof or that would constitute grounds for the SEC
to deny, revoke or suspend the registration of the
Subadviser as an investment adviser with the SEC;
3. Any of OpCap, the Subadviser, their respective
partners, subsidiaries, affiliates, directors,
officers, employees or agents causes a material
violation of the Agreement Not to Compete which is
not cured in accordance with the provisions of that
agreement; or
4. The Subadviser breaches the representations contained in Paragraph
III.A.4.i. of this Agreement or any other material provision of this
Agreement, and any such breach is not cured within a reasonable period of
time after notice thereof from the Adviser to the Subadviser. However,
consistent with its fiduciary obligations, for a period of seven months the
Adviser will not terminate this Agreement solely because the Subadviser has
failed to designate an acceptable permanent replacement to a Portfolio
Manager whose services are no longer available to the Subadviser due to
circumstances beyond the reasonable control of the Subadviser, provided
that the Subadviser uses its reasonable best efforts to promptly obtain the
services of a Portfolio Manager acceptable to the Adviser and further
provided that the Adviser has not unreasonably withheld approval of such
replacement Portfolio Manager.
E. Transactions in Progress upon Termination. The Adviser and
Subadviser will cooperate with each other to ensure that
portfolio or other transactions in progress at the date of
termination of this Agreement shall be completed by the
Adviser in accordance with the terms of such transactions, and
to this end the Subadviser shall provide the Adviser with all
necessary information and documentation to secure the
implementation thereof.
XIV. Non-Solicitation.
During the term of this Agreement, the Adviser (and its affiliates
under its control) shall not solicit or knowingly assist in the solicitation of
any Portfolio Manager of the Fund or any portfolio assistant of the Fund then
employed by the Subadviser or OpCap, provided, however, that the Adviser (or its
affiliates) may solicit or hire any such individual who (A) the Subadviser or
OpCap (or its affiliates) has terminated or (B) has voluntarily terminated his
or her employment with the Subadviser, OpCap (or its affiliates) without
inducement of the Adviser (or its affiliates under its control) prior to the
time of such solicitation. Advertising in general circulation newspapers or
industry newsletters by the Adviser shall not constitute "inducement" by the
Adviser (or its affiliates under its control).
XV. Liability of the Subadviser.
In the absence of willful misfeasance, bad faith, negligence or
reckless disregard of obligations or duties hereunder on the part of the
Subadviser or any of its officers, directors or employees, the Subadviser shall
not be subject to liability to the Adviser for any act or omission in the course
of, or connected with, rendering services hereunder or for any losses that may
be sustained in the purchase, holding or sale of any security; provided,
however, that the foregoing shall not be construed to relieve the Subadviser of
any liability it may have arising under the Agreement Not to Compete or the
Acquisition Agreement dated August 17, 1995, among the Subadviser, the Adviser
and certain affiliates of the Subadviser.
XVI. Notices.
Any notice or other communication required or that may be given
hereunder shall be in writing and shall be delivered personally, telecopied,
sent by certified, registered or express mail, postage prepaid or sent by
national next-day delivery service and shall be deemed given when so delivered
personally or telecopied, or if mailed, two days after the date of mailing, or
if by next-day delivery service, on the business day following delivery thereto,
as follows or to such other location as any party notifies any other party:
A. if to the Adviser, to:
OppenheimerFunds, Inc.
Xxx Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx
Executive Vice President and General Counsel
Telecopier: 212-321-1159
B. if to the Subadviser, to:
OpCap Advisors
x/x Xxxxxxxxxxx Xxxxxxx
0000 Xxxxxx of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxx X. Xxxx
Secretary
Telecopier: 000-000-0000
XVII. Questions of Interpretation.
This Agreement shall be governed by the laws of the State of New York
applicable to agreements made and to be performed entirely within the State of
New York (without regard to any conflicts of law principles thereof). Any
question of interpretation of any term or provision of this Agreement having a
counterpart in or otherwise derived from a term or provision of the 1940 Act
shall be resolved by reference to such term or provision of the 1940 Act and to
interpretations thereof, if any, by the United States Courts or, in the absence
of any controlling decision of any such court, by rules, regulations or orders
of the SEC issued pursuant to the 1940 Act. In addition, where the effect of a
requirement of the 1940 Act reflected in any provision of this Agreement is
revised by rule, regulation or order of the SEC, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
XVIII. Form ADV - Delivery.
The Adviser hereby acknowledges that it has received from the
Subadviser a copy of the Subadviser's Form ADV, Part II as currently filed, at
least 48 hours prior to entering into this Agreement and that it has read and
understood the disclosures set forth in the Subadviser's Form ADV, Part II.
XIX. 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.
XX. Counterparts.
This Agreement may be executed in counterparts, each of which shall
constitute an original and both of which, collectively, shall constitute one
agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective officers as of the 10th day of March ,
2000.
OPPENHEIMERFUNDS, INC.
By:/s/ Xxxxxx X. Xxxxxxx
----------------------------------
Xxxxxx X. Xxxxxxx
Executive Vice President &
General Counsel
OPCAP ADVISORS
By: /s/ Xxxxxxx X. Xxxx
-----------------------------------
Xxxxxxx X. Xxxx
Senior Vice President &
Secretary
SCHEDULE XIII.D.1
The universe of funds to which Class A shares of funds subadvised by
OpCap Advisors will be compared to so that it can be determined in which
quartile the performance ranks shall consist of those funds with the same Lipper
investment objective being offered as the only class of shares of such fund or,
in the case where there is more than one class of shares being offered, with a
front-end load (typically referred to as Class A shares).
The present Lipper investment objective categories for the funds are:
Fund Lipper Category
Xxxxxxxxxxx Quest Value Fund, Inc. ..............................Large Cap Value
Xxxxxxxxxxx Quest Global Value Fund, Inc. ....................... Global
Xxxxxxxxxxx Quest Opportunity Value Fund .....................Flexible Portfolio
Xxxxxxxxxxx Quest Small Cap Fund ......................... Small Cap
Xxxxxxxxxxx Quest Balanced Value Fund ........................... Balanced
Xxxxxxxxxxx Quest Capital Value Fund, Inc. ......................Multi-Cap Value
SUBADVISORY AGREEMENT
THIS AGREEMENT is made by and between OppenheimerFunds, Inc., a
Colorado corporation (the "Adviser"), and OpCap Advisors, a Delaware general
partnership (the "Subadviser"), as of the date set forth below.
RECITAL
WHEREAS, Xxxxxxxxxxx Quest For Value Funds (the "Company") is
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end, management investment company;
WHEREAS, the Adviser is registered under the Investment Advisers Act of
1940, as amended (the "Advisers Act"), as an investment adviser and engages in
the business of acting as an investment adviser;
WHEREAS, the Subadviser is registered under the Advisers Act as an
investment adviser and engages in the business of acting as an investment
adviser;
WHEREAS, the Company's Declaration of Trust authorizes the Board of
Trustees of the Company to classify or reclassify authorized but unissued shares
of the Company into series of shares representing interests in various
investment portfolios;
WHEREAS, pursuant to such authority, the Company has established the
Balanced Value Fund (the "Fund");
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
as of May 27, 1997, as amended on October 22, 1997, with the Company (the
"Investment Advisory Agreement"), pursuant to which the Adviser acts as
investment adviser with respect to the Fund; and
WHEREAS, pursuant to Paragraph 2 of the Investment Advisory Agreement,
the Adviser has retained and wishes to continue to retain the Subadviser for
purposes of rendering investment advisory services to the Adviser in connection
with the Fund upon the terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt of which are
hereby acknowledged, the parties hereto agree as follows:
I. Appointment and Obligations of the Adviser.
The Adviser hereby appoints the Subadviser to render, to the Adviser
with respect to the Fund, investment research and advisory services as set forth
below in Section II, under the supervision of the Adviser and subject to the
approval and direction of the Company's Board of Trustees (the "Board"), and the
Subadviser hereby accepts such appointment, all subject to the terms and
conditions contained herein. The Subadviser shall, for all purposes herein, be
deemed an independent contractor and shall not have, unless otherwise expressly
provided or authorized, any authority to act for or represent the Company or the
Fund in any way or otherwise to serve as or be deemed an agent of the Company or
the Fund.
II. Duties of the Subadviser and the Adviser.
A. Duties of the Subadviser.
The Subadviser shall regularly provide investment advice with respect
to the Fund and shall, subject to the terms of this Agreement, continuously
supervise the investment and reinvestment of cash, securities and instruments or
other property comprising the assets of the Fund, and in furtherance thereof,
the Subadviser's duties shall include:
1. Obtaining and evaluating pertinent information about
significant developments and economic, statistical and
financial data, domestic, foreign or otherwise, whether
affecting the economy generally or the Fund, and whether
concerning the individual issuers whose securities are
included in the Fund or the activities in which such issuers
engage, or with respect to securities which the Subadviser
considers desirable for inclusion in the Fund's investment
portfolio;
2. Determining which securities shall be purchased, sold or exchanged by
the Fund or otherwise represented in the Fund's investment portfolio and
regularly reporting thereon to the Adviser and, at the request of the
Adviser, to the Board;
3. Formulating and implementing continuing programs for the purchases and
sales of the securities of such issuers and regularly reporting thereon to
the Adviser and, at the request of the Adviser, to the Board; and
4. Taking, on behalf of the Fund, all actions that appear to
the Subadviser necessary to carry into effect such investment
program, including the placing of purchase and sale orders,
and making appropriate reports thereon to the Adviser and the
Board.
B. Duties of the Adviser.
The Adviser shall retain responsibility for, among other things,
providing the following advice and services with respect to the Fund:
1. Without limiting the obligation of the Subadviser to
so comply, the Adviser shall monitor the investment
program maintained by the Subadviser for the Fund to
ensure that the Fund's assets are invested in
compliance with this Agreement and the Fund's
Registration Statement, as currently in effect from
time to time; and
2. The Adviser shall oversee matters relating to Fund promotion, including,
but not limited to, marketing materials and the Subadviser's reports to the
Board.
III. Representations, Warranties and Covenants.
A. Representations, Warranties and Covenants of the Subadviser.
1. Organization. The Subadviser is now, and will continue to be, a general
partnership ------------ duly formed and validly existing under the laws of
its jurisdiction of formation, fully authorized to enter into this
Agreement and carry out its duties and obligations hereunder.
2. Registration. The Subadviser is registered as an investment
adviser with the Securities and Exchange Commission (the
"SEC") under the Advisers Act, and is registered or licensed
as an investment adviser under the laws of all jurisdictions
in which its activities require it to be so registered or
licensed, except where the failure to be so licensed would not
have a material adverse effect on the Subadviser. The
Subadviser shall maintain such registration or license in
effect at all times during the term of this Agreement.
3. Best Efforts. The Subadviser at all times shall provide its best
judgment and effort ------------- to the Adviser and the Fund in carrying
out its obligations hereunder.
4. Other Covenants. The Subadviser further agrees that:
---------------
a. it will use the same skill and care in providing such services as it
uses in providing services to other accounts for which it has investment
management responsibilities;
b. it will not make loans to any person to purchase or carry units of
beneficial interest in the Fund or make loans to the Fund;
c. it will report regularly to the Fund and to
the Adviser and will make appropriate
persons available for the purpose of
reviewing with representatives of the
Adviser on a regular basis the management of
the Fund, including, without limitation,
review of the general investment strategy of
the Fund, economic considerations and
general conditions affecting the
marketplace;
d. as required by applicable laws and regulations, it will maintain books
and records with respect to the Fund's securities transactions and it will
furnish to the Adviser and to the Board such periodic and special reports
as the Adviser or the Board may reasonably request;
e. it will treat confidentially and as
proprietary information of the Fund all
records and other information relative to
the Fund, and will not use records and
information for any purpose other than
performance of its responsibilities and
duties hereunder, except after prior
notification to and approval in writing by
the Fund or when so requested by the Fund or
required by law or regulation;
f. it will, on a continuing basis and at its own expense, (1) provide the
distributor of the Fund (the "Distributor") with assistance in the
distribution and marketing of the Fund in such amount and form as the
Adviser may reasonably request from time to time, and (2) use its best
efforts to cause the portfolio manager or other person who manages or is
responsible for overseeing the management of the Fund's portfolio (the
"Portfolio Manager") to provide marketing and distribution assistance to
the Distributor, including, without limitation, conference calls, meetings
and road trips, provided that each Portfolio Manager shall not be required
to devote more than 10% of his or her time to such marketing and
distribution activities;
g. it will use its reasonable best efforts (i)
to retain the services of the Portfolio
Manager who manages the portfolio of the
Fund, from time to time and (ii) to promptly
obtain the services of a Portfolio Manager
acceptable to the Adviser if the services of
the Portfolio Manager are no longer
available to the Subadviser;
h. it will, from time to time, assure that each Portfolio Manager is
acceptable to the Adviser;
i. it will obtain the written approval of the Adviser prior to designating
a new Portfolio Manager; provided, however, that, if the services of a
Portfolio Manager are no longer available to the Subadviser due to
circumstances beyond the reasonable control of the Subadviser (e.g.,
voluntary resignation, death or disability), the Subadviser may designate
an interim Portfolio Manager who (a) shall be reasonably acceptable to the
Adviser and (b) shall function for a reasonable period of time until the
Subadviser designates an acceptable permanent replacement; and
j. it will promptly notify the Adviser of any impending change in Portfolio
Manager, portfolio management or any other material matter that may require
disclosure to the Board, shareholders of the Fund or dealers.
B. Representations, Warranties and Covenants of the Adviser.
1. Organization. The Adviser is now, and will continue to be, duly
organized and in good ------------ standing under the laws of its state of
incorporation, fully authorized to enter into this Agreement and carry out
its duties and obligations hereunder.
2. Registration. The Adviser is registered as an investment
adviser with the SEC under the Advisers Act, and is registered
or licensed as an investment adviser under the laws of all
jurisdictions in which its activities require it to be so
registered or licensed. The Adviser shall maintain such
registration or license in effect at all times during the term
of this Agreement.
3. Best Efforts. The Adviser at all times shall provide its best judgment
and effort to ------------- the Fund in carrying out its obligations
hereunder.
IV. Compliance with Applicable Requirements.
In carrying out its obligations under this Agreement, the Subadviser
shall at all times conform to:
A. all applicable provisions of the 1940 Act and any rules and regulations
adopted thereunder;
B. the provisions of the registration statement of the Company, as the same
may be amended from time to time, under the Securities Act of 1933, as
amended, and the 1940 Act;
C. the provisions of the Company's Declaration of Trust or other governing
document, as amended from time to time;
D. the provisions of the By-laws of the Company, as amended from time to
time;
E. any other applicable provisions of state or federal law; and
F. guidelines, investment restrictions, policies, procedures or
instructions adopted or issued by the Company, the Fund or the Adviser from
time to time.
The Adviser shall promptly notify the Subadviser of any changes or
amendments to the provisions of B., C., D. and F. above when such changes or
amendments relate to the obligations of the Subadviser.
V. Control by the Board.
Any investment program undertaken by the Subadviser pursuant to this
Agreement, as well as any other activities undertaken by the Subadviser with
respect to the Fund, shall at all times be subject to any directives of the
Adviser and the Board.
VI. Books and Records.
The Subadviser agrees that all records which it maintains for the Fund
on behalf of the Adviser are the property of the Fund and further agrees to
surrender promptly to the Fund or to the Adviser any of such records upon
request. The Subadviser further agrees to preserve for the periods prescribed by
applicable laws, rules and regulations all records required to be maintained by
the Subadviser on behalf of the Adviser under such applicable laws, rules and
regulations, or such longer period as the Adviser may reasonably request from
time to time.
VII. Broker-Dealer Relationships.
A. Portfolio Trades.
The Subadviser, at its own expense, and to the extent
appropriate, in consultation with the Adviser, shall place all orders for the
purchase and sale of portfolio securities for the Fund with brokers or dealers
selected by the Subadviser, which may include, to the extent permitted by the
Adviser and the Fund, brokers or dealers affiliated with the Subadviser. The
Subadviser shall use its best efforts to seek to execute portfolio transactions
at prices that are advantageous to the Fund and at commission rates that are
reasonable in relation to the benefits received.
B. Selection of Broker-Dealers.
With respect to the execution of particular transactions, the
Subadviser may, to the extent permitted by the Adviser and the Fund, select
brokers or dealers who also provide brokerage and research services (as those
terms are defined in Section 28(e) of the Securities Exchange Act of 1934, as
amended) to the Fund and/or the other accounts over which the Subadviser or its
affiliates exercise investment discretion. The Subadviser is authorized to pay a
broker or dealer who provides such brokerage and research services a commission
for executing a portfolio transaction for the Fund that is in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction if the Subadviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer. This determination may be viewed in
terms of either that particular transaction or the overall responsibilities that
the Subadviser and its affiliates have with respect to accounts over which they
exercise investment discretion. The Adviser, Subadviser and the Board shall
periodically review the commissions paid by the Fund to determine, among other
things, if the commissions paid over representative periods of time were
reasonable in relation to the benefits received.
C. Soft Dollar Arrangements.
The Subadviser may enter into "soft dollar" arrangements
through the agency of third parties on behalf of the Adviser. Soft dollar
arrangements for services may be entered into in order to facilitate an
improvement in performance in respect of the Subadviser's service to the Adviser
with respect to the Fund. The Subadviser makes no direct payments but instead
undertakes to place business with broker-dealers who in turn pay third parties
who provide these services. Soft dollar transactions will be conducted on an
arm's-length basis, and the Subadviser will secure best execution for the
Adviser. Any arrangements involving soft dollars and/or brokerage services shall
be effected in compliance with Section 28(e) of the Securities Exchange Act of
1934, as amended, and the policies that the Adviser and the Board may adopt from
time to time. The Subadviser agrees to provide reports to the Adviser as
necessary for purposes of providing information on these arrangements to the
Board.
VIII. Compensation.
A. Amount of Compensation. The Adviser shall pay the Subadviser,
as compensation for services rendered hereunder, from its own
assets, an annual fee, payable monthly, equal to 40% of the
investment advisory fee collected by the Adviser from the
Fund, based on the total net assets of the Fund existing as of
November 22, 1995 (the "base amount"), plus 30% of the
advisory fee collected by the Adviser, based on the total net
assets of the Fund that exceed the base amount (the "marginal
amount"), in each case calculated after any waivers, voluntary
or otherwise.
B. Calculation of Compensation. Except as hereinafter set forth,
compensation under this Agreement shall be calculated and
accrued on the same basis as the advisory fee paid to the
Adviser by the Fund. If this Agreement becomes effective
subsequent to the first day of a month or shall terminate
before the last day of a month, compensation for that part of
the month this Agreement is in effect shall be prorated in a
manner consistent with the calculation of the fees set forth
above.
C. Payment of Compensation: Subject to the provisions of this paragraph,
payment of the ------------------------- Subadviser's compensation for the
preceding month shall be made within 15 days after the end of the preceding
month.
D. Reorganization of the Fund. If the Fund is reorganized with
another investment company for which the Subadviser does not
serve as an investment adviser or subadviser, and the Fund is
the surviving entity, the subadvisory fee payable under this
section shall be adjusted in an appropriate manner as the
parties may agree.
IX. Allocation of Expenses.
The Subadviser shall pay the expenses incurred in providing services in
connection with this Agreement, including, but not limited to, the salaries,
employment benefits and other related costs of those of its personnel engaged in
providing investment advice to the Fund hereunder, including, without
limitation, office space, office equipment, telephone and postage costs and
other expenses. In the event of an "assignment" of this Agreement, other than an
assignment resulting solely by action of the Adviser or an affiliate thereof,
the Subadviser shall be responsible for payment of all costs and expenses
incurred by the Adviser and the Fund relating thereto, including, but not
limited to, reasonable legal, accounting, printing and mailing costs related to
obtaining approval of Fund shareholders.
X. Non-Exclusivity.
The services of the Subadviser with respect to the Company and the Fund
are not to be deemed to be exclusive, and the Subadviser shall be free to render
investment advisory and administrative or other services to others (including
other investment companies) and to engage in other activities, subject to the
provisions of a certain Agreement Not to Compete dated as of November 22, 1995
among the Adviser, Xxxxxxxxxxx Capital, the Subadviser and Quest For Value
Distributors (the "Agreement Not to Compete"). It is understood and agreed that
officers or directors of the Subadviser may serve as officers or directors of
the Adviser or of the Fund; that officers or directors of the Adviser or of the
Company may serve as officers or directors of the Subadviser to the extent
permitted by law; and that the officers and directors of the Subadviser are not
prohibited from engaging in any other business activity or from rendering
services to any other person, or from serving as partners, officers, directors
or trustees of any other firm or trust, including other investment advisory
companies (subject to the provisions of the Agreement Not to Compete) provided
it is permitted by applicable law and does not adversely affect the Company or
the Fund.
XI. Term.
This Agreement shall become effective at the close of business on the
date hereof and shall remain in force and effect, subject to Paragraphs XII.A
and XII.B hereof and approval by the Fund's shareholders, until December 31,
2000.
XII. Renewal.
Following the expiration of its initial term, the Agreement shall
continue in full force and effect from year to year until November 22, 2005,
provided that such continuance is specifically approved:
A. at least annually (1) by the Board or by the vote of a
majority of the Fund's outstanding voting securities (as
defined in Section 2(a)(42) of the 1940 Act), and (2) by the
affirmative vote of a majority of the Trustees who are not
parties to this Agreement or interested persons of a party to
this Agreement (other than as a Trustee of the Fund), by votes
cast in person at a meeting specifically called for such
purpose; or
B. by such method required by applicable law, rule or regulation then in
effect.
XIII. Termination.
A. Termination by the Company. This Agreement may be terminated
at any time, without the payment of any penalty, by vote of
the Board or by vote of a majority of the Fund's outstanding
voting securities, on sixty (60) days' written notice. The
notice provided for herein may be waived by the party required
to be notified.
B. Assignment. This Agreement shall automatically terminate in the event of
its "assignment", as ---------- defined in Section 2 (a) (4) of the 1940
Act. In the event of an assignment that occurs solely due to the change in
control of the Subadviser (provided that no condition exists that permits,
or, upon the consummation of the assignment, will permit, the termination
of this Agreement by the Adviser pursuant to Section XIII. D. hereof), the
Adviser and the Subadviser, at the sole expense of the Subadviser, shall
use their reasonable best efforts to obtain shareholder approval of a
successor Subadvisory Agreement on substantially the same terms as
contained in this Agreement.
C. Payment of Fees After Termination. Notwithstanding the termination of
this Agreement prior to ---------------------------------- the tenth
anniversary of November 22, 1995, the Adviser shall continue to pay to the
Subadviser the subadvisory fee for the term of this Agreement and any
renewals thereof through such tenth anniversary, if: (1) the Adviser or the
Company terminates this Agreement for a reason other than the reasons set
forth in Section XIII.D. hereof, provided the Investment Advisory Agreement
remains in effect; (2) the Fund reorganizes with another investment company
advised by the Adviser (or an affiliate of the Adviser) and for which the
Subadviser does not serve as an investment adviser or subadviser and such
other investment company is the surviving entity; or (3) the Investment
Advisory Agreement terminates (i) by reason of an "assignment"; (ii)
because the Adviser is disqualified from serving as an investment adviser;
or (iii) by reason of a voluntary termination by the Adviser; provided that
the Subadviser does not serve as the investment adviser or subadviser of
the Fund after such termination of the Investment Advisory Agreement. The
amount of the subadvisory fee paid pursuant to this section shall be
calculated on the basis of the Fund's net assets measured at the time of
such termination or such reorganization. Notwithstanding anything to the
contrary, if the Subadviser terminates this Agreement or if this Agreement
is terminated by operation of law, due solely to an act or omission by the
Subadviser, Xxxxxxxxxxx Capital ("OpCap") or their respective partners,
subsidiaries, directors, officers, employees or agents (other than by
reason of an "assignment"of this Agreement), then the Adviser shall not be
liable for any further payments under this Agreement, provided, however,
that if at any time prior to the end of the term of the Agreement Not to
Compete any event that would have permitted the termination of this
Agreement by the Adviser pursuant to Section XIII. D. (3) hereof occurs,
the Adviser shall be under no further obligation to pay any subadvisory
fees.
D. Termination by the Adviser. The Adviser may terminate this Agreement
without penalty and ---------------------------- without the payment of any
fee or penalty, immediately after giving written notice, upon the
occurrence of any of the following events:
1. The Fund's investment performance of the Fund's Class
A shares compared to the appropriate universe of
Class A shares (or their equivalent), as set forth on
Schedule D-1, as amended from time to time, ranks in
the bottom quartile for two consecutive calendar
years (beginning with the calendar year 1995) and
earns a Morningstar three-year rating of less than
three (3) stars at the time of such termination; or
2. Any of the Subadviser, OpCap, their respective
partners, subsidiaries, affiliates, directors,
officers, employees or agents engages in an action or
omits to take an action that would cause the
Subadviser or OpCap to be disqualified in any manner
under Section 9(a) of the 1940 Act, if the SEC were
not to grant an exemptive order under Section 9(c)
thereof or that would constitute grounds for the SEC
to deny, revoke or suspend the registration of the
Subadviser as an investment adviser with the SEC;
3. Any of OpCap, the Subadviser, their respective
partners, subsidiaries, affiliates, directors,
officers, employees or agents causes a material
violation of the Agreement Not to Compete which is
not cured in accordance with the provisions of that
agreement; or
4. The Subadviser breaches the representations contained in Paragraph
III.A.4.i. of this Agreement or any other material provision of this
Agreement, and any such breach is not cured within a reasonable period of
time after notice thereof from the Adviser to the Subadviser. However,
consistent with its fiduciary obligations, for a period of seven months the
Adviser will not terminate this Agreement solely because the Subadviser has
failed to designate an acceptable permanent replacement to a Portfolio
Manager whose services are no longer available to the Subadviser due to
circumstances beyond the reasonable control of the Subadviser, provided
that the Subadviser uses its reasonable best efforts to promptly obtain the
services of a Portfolio Manager acceptable to the Adviser and further
provided that the Adviser has not unreasonably withheld approval of such
replacement Portfolio Manager.
E. Transactions in Progress upon Termination. The Adviser and
Subadviser will cooperate with each other to ensure that
portfolio or other transactions in progress at the date of
termination of this Agreement shall be completed by the
Adviser in accordance with the terms of such transactions, and
to this end the Subadviser shall provide the Adviser with all
necessary information and documentation to secure the
implementation thereof.
XIV. Non-Solicitation.
During the term of this Agreement, the Adviser (and its affiliates
under its control) shall not solicit or knowingly assist in the solicitation of
any Portfolio Manager of the Fund or any portfolio assistant of the Fund then
employed by the Subadviser or OpCap, provided, however, that the Adviser (or its
affiliates) may solicit or hire any such individual who (A) the Subadviser or
OpCap (or its affiliates) has terminated or (B) has voluntarily terminated his
or her employment with the Subadviser, OpCap (or its affiliates) without
inducement of the Adviser (or its affiliates under its control) prior to the
time of such solicitation. Advertising in general circulation newspapers or
industry newsletters by the Adviser shall not constitute "inducement" by the
Adviser (or its affiliates under its control).
XV. Liability of the Subadviser.
In the absence of willful misfeasance, bad faith, negligence or
reckless disregard of obligations or duties hereunder on the part of the
Subadviser or any of its officers, directors or employees, the Subadviser shall
not be subject to liability to the Adviser for any act or omission in the course
of, or connected with, rendering services hereunder or for any losses that may
be sustained in the purchase, holding or sale of any security; provided,
however, that the foregoing shall not be construed to relieve the Subadviser of
any liability it may have arising under the Agreement Not to Compete or the
Acquisition Agreement dated August 17, 1995, among the Subadviser, the Adviser
and certain affiliates of the Subadviser.
XVI. Notices.
Any notice or other communication required or that may be given
hereunder shall be in writing and shall be delivered personally, telecopied,
sent by certified, registered or express mail, postage prepaid or sent by
national next-day delivery service and shall be deemed given when so delivered
personally or telecopied, or if mailed, two days after the date of mailing, or
if by next-day delivery service, on the business day following delivery thereto,
as follows or to such other location as any party notifies any other party:
A. if to the Adviser, to:
OppenheimerFunds, Inc.
Xxx Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx
Executive Vice President and General Counsel
Telecopier: 212-321-1159
B. if to the Subadviser, to:
OpCap Advisors
x/x Xxxxxxxxxxx Xxxxxxx
0000 Xxxxxx of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxx X. Xxxx
Secretary
Telecopier: 000-000-0000
XVII. Questions of Interpretation.
This Agreement shall be governed by the laws of the State of New York
applicable to agreements made and to be performed entirely within the State of
New York (without regard to any conflicts of law principles thereof). Any
question of interpretation of any term or provision of this Agreement having a
counterpart in or otherwise derived from a term or provision of the 1940 Act
shall be resolved by reference to such term or provision of the 1940 Act and to
interpretations thereof, if any, by the United States Courts or, in the absence
of any controlling decision of any such court, by rules, regulations or orders
of the SEC issued pursuant to the 1940 Act. In addition, where the effect of a
requirement of the 1940 Act reflected in any provision of this Agreement is
revised by rule, regulation or order of the SEC, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
XVIII. Form ADV - Delivery.
The Adviser hereby acknowledges that it has received from the
Subadviser a copy of the Subadviser's Form ADV, Part II as currently filed, at
least 48 hours prior to entering into this Agreement and that it has read and
understood the disclosures set forth in the Subadviser's Form ADV, Part II.
XIX. 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.
XX. Counterparts.
This Agreement may be executed in counterparts, each of which shall
constitute an original and both of which, collectively, shall constitute one
agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective officers as of the 10th day of March ,
2000.
OPPENHEIMERFUNDS, INC.
By:/s/ Xxxxxx X. Xxxxxxx
-----------------------------------
Xxxxxx X. Xxxxxxx
Executive Vice President &
General Counsel
OPCAP ADVISORS
By:/s/ Xxxxxxx X. Xxxx
-------------------------------------
Xxxxxxx X. Xxxx
Senior Vice President &
Secretary
SCHEDULE XIII.D.1
The universe of funds to which Class A shares of funds subadvised by
OpCap Advisors will be compared to so that it can be determined in which
quartile the performance ranks shall consist of those funds with the same Lipper
investment objective being offered as the only class of shares of such fund or,
in the case where there is more than one class of shares being offered, with a
front-end load (typically referred to as Class A shares).
The present Lipper investment objective categories for the funds are:
Fund Lipper Category
Xxxxxxxxxxx Quest Value Fund, Inc. ..............................Large Cap Value
Xxxxxxxxxxx Quest Global Value Fund, Inc. ....................... Global
Xxxxxxxxxxx Quest Opportunity Value Fund .....................Flexible Portfolio
Xxxxxxxxxxx Quest Small Cap Fund ......................... Small Cap
Xxxxxxxxxxx Quest Balanced Value Fund ........................... Balanced
Xxxxxxxxxxx Quest Capital Value Fund, Inc. .................... Multi-Cap Value
