INVESTMENT ADVISORY AGREEMENT
AGREEMENT made the 30th day of June, 2006, by and between RAF FUND LTD.
(hereinafter referred to as the "Fund"), and OPPENHEIMERFUNDS, INC. (hereinafter
referred to as "OFI").
WHEREAS, the Fund is an exempt company organised under the Companies Law
(2004 Revision), and OFI is an investment advisor registered as such with the
Commission under the Investment Advisors Act of 1940; and
WHEREAS, the Fund desires that OFI shall act as its investment advisor
pursuant to this Agreement,
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, it is agreed by and between the parties, as follows:
1. General Provision.
The Fund hereby appoints OFI and OFI hereby undertakes to act as the
investment advisor of the Fund and to perform for the Fund such other duties and
functions as are hereinafter set forth. OFI shall, in all matters, give to the
Fund and its Board of Directors the benefit of its best judgment, effort, advice
and recommendations and shall, at all times conform to, and use its best efforts
to enable the Fund to conform to (i) the provisions of Cayman Island law and the
Investment Company Act and any rules or regulations thereunder; (ii) the
provisions of the Memorandum of Association and Articles of Association of the
Fund as amended from time to time; (iii) policies and determinations of the
Board of Directors of the Fund; (iv) the fundamental policies and investment
restrictions of the Fund as communicated to OFI in writing by the Fund in effect
from time to time. The appropriate officers and employees of OFI shall be
available upon reasonable notice for consultation with any of the Directors and
officers of the Fund with respect to any matters dealing with the business and
affairs of the Fund including the valuation of portfolio securities of the Fund
which are either not registered for public sale or not traded on any securities
market.
2. Authority of OFI.
In connection with its obligations hereunder, OFI will have the authority
for and in the name of the Fund, subject to the overall direction and control of
the Fund's board of directors, to:
(a) invest and reinvest the Fund's assets, on margin or otherwise, in
securities and other financial instruments of United States and foreign
entities, including, without limitation, capital stock; shares of beneficial
interest; partnership interests and similar financial instruments; bonds, notes
and debentures (whether subordinated, convertible or otherwise); currencies;
commodities; interest rate, currency, commodity, equity and other derivative
products, including, without limitation, (i) futures contracts (and options
thereon) relating to stock indices, currencies, United States Government
securities and securities of foreign governments, other financial instruments
and all other commodities, (ii) swaps, options, warrants, caps, collars, floors
and forward rate agreements, (iii) spot and forward currency transactions and
(iv) agreements relating to or securing such transactions; equipment lease
certificates; equipment trust certificates; loans; accounts and notes receivable
and payable held by trade or other creditors; trade acceptances; contract and
other claims; executory contracts; participations; mutual funds, exchange traded
funds and similar financial instruments; money market funds; obligations of the
United States or any state thereof, foreign governments and instrumentalities of
any of them; commercial paper; certificates of deposit; bankers' acceptances;
choses in action; trust receipts; and any other obligations and instruments or
evidences of indebtedness of whatever kind or nature; in each case, of any
person, corporation, government or other entity whatsoever, whether or not
publicly traded or readily marketable (all such items being called herein a
"Security" or "Securities"), and to sell Securities short and cover such sales.
OFI shall delegate all investment discretion with respect to futures contracts,
option on futures contracts, or other instruments regulated by the Commodity
Futures Trading Commission to Xxxxxxxxxxx Real Asset Management, Inc., except in
situations in which OFI would be permitted to act as a commodities trading
advisor to a U.S. registered investment company under applicable law or
regulation;
(b) provide research and analysis and direct the formulation of investment
policies and strategies for the Fund;
(c) acquire a long position or a short position with respect to any
Security and to make purchases or sales increasing, decreasing or liquidating
such position or changing from a long position to a short position or from a
short position to a long position, without any limitation as to the frequency of
the fluctuation in such positions or as to the frequency of the changes in the
nature of such positions;
(d) purchase Securities and hold them for investment;
(e) enter into contracts for or in connection with investments in Securities;
(f) invest in other pooled investment vehicles for any purpose, which
investments shall be subject in each case to the terms and conditions of the
respective governing document for such vehicle;
(g) possess, transfer, mortgage, pledge or otherwise deal in, and exercise
all rights, powers, privileges and other incidents of ownership or possession
with respect to, Securities and other property and funds held or owned by the
Fund;
(h) lend, either with or without security, any Securities, funds or other
properties of the Fund, including by entering into reverse repurchase
agreements, and, from time to time, without limit as to the amount, borrow or
raise funds, including by entering into repurchase agreements, and secure the
payment of obligations of the Fund by mortgage upon, or pledge or hypothecation
of, all or any part of the property of the Fund;
(i) open, maintain and close accounts, including futures, margin and
custodial accounts, with brokers, including brokers affiliated with OFI, which
power shall include the authority to issue all instructions and authorisations
to brokers regarding the Securities and/or money therein; to pay, or authorise
the payment and reimbursement of, commissions that may be in excess of the
lowest rates available that are paid to brokers who execute transactions for the
account of the Fund and who supply, or pay for (or rebate a portion of the
Fund's brokerage commissions to the Fund for payment of) the cost of, brokerage,
research or execution services utilised by the Fund, OFI and its affiliates,
members, partners, officers and employees (collectively, excluding OFI,
"Affiliates"); provided that the Fund does not pay a rate of commissions in
excess of what is competitively available from comparable brokerage firms for
comparable services, taking into account various factors, including commission
rates, reliability, financial responsibility, strength of the broker and ability
of the broker to efficiently execute transactions, the broker's facilities, and
the broker's provision or payment of the costs of research and other services or
property that are of benefit to the Fund, OFI and Affiliates;
(j) open, maintain and close accounts, including custodial accounts, with
banks, including banks located outside the United States, and draw checks or
other orders for the payment of monies as authorised by the board of directors
of the Fund (the "Board of Directors"); (k) combine purchase or sale orders on
behalf of the Fund with orders for other accounts to whom OFI or any of its
affiliates provide investment services ("Other Accounts") and allocate the
Securities or other assets so purchased or sold, on an average-price basis or by
any other method of fair allocation, among such accounts;
(l) enter into arrangements with brokers to open "average price" accounts
wherein orders placed during a trading day are placed on behalf of the Fund and
Other Accounts and are allocated among such accounts using an average price;
(m) organise one or more corporations or other entities formed to hold
record title, as nominee for the Fund (whether alone or together with the Other
Accounts), to Securities or funds of the Fund as authorised by the Board of
Directors;
(n) cause the Fund to engage in agency, agency cross and principal
transactions with affiliates to the extent permitted by applicable securities
laws;
(o) supply the administrator of, or other service providers to, the Fund
with such information and instructions as may be necessary to enable such person
or persons to perform their duties in accordance with the applicable agreements;
(p) engage personnel, whether part-time or full-time, and subadvisors,
attorneys, independent accountants, or such other persons as OFI may deem
necessary or advisable;
(q) authorize any employee or other agent of OFI or any employee or other
agent of the Fund to act for and on behalf of the Fund in all matters incidental
to the foregoing; and
(r) do any and all acts on behalf of the Fund as it may deem necessary or
advisable in connection with the maintenance and administration of the Fund, and
exercise all rights of the Fund, with respect to its interest in any person,
including, without limitation, the voting of Securities (including voting of
proxies), participation in arrangements with creditors, the institution and
settlement or compromise of suits and administrative proceedings and other like
or similar matters.
3. Liability.
The Investment Advisor will be liable for the losses to the Company which
are the direct result of the Investment Advisor's bad faith, gross negligence,
wilful default or breach of the express terms of this Agreement. Except as set
forth in the foregoing sentence, neither the Investment Advisor nor its
officers, employees or agents shall be liable hereunder for any act or omission
or for any error of judgment in managing the Fund. The Investment Advisor shall
not be responsible for any special, indirect or consequential damages, or any
loss incurred by reasons of any act or omission of the Fund or any broker,
dealer or custodian used hereunder or any authorised representative of the
foregoing. Notwithstanding the foregoing, nothing herein shall in any way
constitute a waiver or limitation of any rights which the Fund may have under
the federal securities or other applicable law.
4. Other Duties of OFI.
OFI shall, at its own expense, provide and supervise the activities of all
administrative and clerical personnel as shall be required to provide effective
corporate administration for the Fund, including but not limited to:
a) Maintenance of a database of all transactions, open position, portfolio
and account/fund information.
b) Preparation and maintenance of portfolio valuation reports and records
based upon the daily activity reflecting cost and market valuations, realized
gains and losses, and unrealized gains and losses on open position in accordance
with the Memorandum of Association and Articles of Association of the Fund.
c) Co-ordination of the receipt of account statements from all custodian
such as brokers and other clearing organizations and reconcile portfolio
positions and cash balances in all such accounts.
d) Preparation and calculation of a daily net asset value of the fund in
accordance with the Memorandum and Articles of Association of the Fund.
e) Liaising with auditors, as appointed by the Fund from time to time, and
the preparation of the Fund's annual financial statements.
OFI shall, at its own expense, provide such officers for the Fund as the
Board of Directors may request.
5. Allocation of Expenses.
All other costs and expenses of the Fund not expressly assumed by OFI under
this Agreement shall be paid by the Fund, including, but not limited to: (i)
interest and taxes; (ii) brokerage commissions; (iii) insurance premiums for
fidelity and other coverage requisite to its operations; (iv) compensation and
expenses of its directors other than those affiliated with OFI; (v) legal and
audit expenses; (vi) custodian and transfer agent fees and expenses; (vii)
expenses incident to the redemption of its shares; (viii) expenses incident to
the issuance of its shares against payment therefor by or on behalf of the
subscribers thereto; (ix) fees and expenses, other than as hereinabove provided,
incident to its status as a Cayman Island exempt company; (x) expenses of
printing and mailing reports, notices and proxy materials to shareholders of the
Fund; (xi) except as noted above, all other expenses incidental to holding
meetings of the Fund's shareholders; and (xii) such extraordinary non-recurring
expenses as may arise, including litigation, affecting the Fund and any legal
obligation which the Fund may have to indemnify its officers and trustees with
respect thereto. Any officers or employees of OFI or any entity controlling,
controlled by or under common control with OFI who also serve as officers,
directors or employees of the Fund shall not receive any compensation from the
Fund for their services.
6. Compensation of OFI.
The Fund agrees to pay OFI and OFI agrees to accept as full compensation
for the performance of all functions and duties on its part to be performed
pursuant to the provisions hereof, a fee computed on the aggregate net asset
value of the shares of the Fund as of the close of each business day and payable
monthly at the following annual rate:
1.00% of the first $200 million of net assets;
0.90% of the next $200 million;
0.850% of the next $200 million;
0.80% of the next $200 million; and
0.750% of net assets in excess of $800 million.
7. Portfolio Transactions and Brokerage.
(a) OFI is authorised, in arranging the purchase and sale of the Fund's
portfolio investments, to employ or deal with such members of securities or
commodities exchanges, brokers, dealers or futures commission merchants
(hereinafter "broker-dealers"), including "affiliated" broker-dealers (as that
term is defined in the U. S. Investment Company Act), as may, in its best
judgment, implement the policy of the Fund to obtain, at reasonable expense, the
"best execution" (prompt and reliable execution at the most favorable security
price obtainable) of the Fund's portfolio transactions as well as to obtain,
consistent with the provisions of subparagraph (c) of this paragraph 6, the
benefit of such investment information or research as will be of significant
assistance to the performance by OFI of its investment management functions.
(b) OFI shall select broker-dealers to effect the Fund's portfolio
transactions on the basis of its estimate of their ability to obtain best
execution of particular and related portfolio transactions. The abilities of a
broker-dealer to obtain best execution of particular portfolio transaction(s)
will be judged by OFI on the basis of all relevant factors and considerations
including, insofar as feasible, the execution capabilities required by the
transaction or transactions; the ability and willingness of the broker-dealer to
facilitate the Fund's portfolio transactions by participating therein for its
own account; the importance to the Fund of speed, efficiency or confidentiality;
the broker-dealer's apparent familiarity with sources from or to whom particular
securities might be purchased or sold; as well as any other matters relevant to
the selection of a broker-dealer for particular and related transactions of the
Fund.
(c) OFI shall have discretion, in the interests of the Fund, to allocate
brokerage on the Fund's portfolio transactions to broker-dealers, other than an
affiliated broker-dealer, qualified to obtain best execution of such
transactions who provide brokerage and/or research services (as such services
are defined in Section 28(e)(3) of the U. S. Securities Exchange Act of 1934)
for the Fund and/or other accounts for which OFI or its affiliates exercise
"investment discretion" (as that term is defined in Section 3(a)(35) of the U.
S. Securities Exchange Act of 1934) and to cause the Fund to pay such
broker-dealers a commission for effecting a portfolio transaction for the Fund
that is in excess of the amount of commission another broker-dealer adequately
qualified to effect such transaction would have charged for effecting that
transaction, if OFI determines, in good faith, that such commission is
reasonable in relation to the value of the brokerage and/or research services
provided by such broker-dealer, viewed in terms of either that particular
transaction or the overall responsibilities of OFI or its affiliates with
respect to the accounts as to which they exercise investment discretion. In
reaching such determination, OFI will not be required to place or attempt to
place a specific dollar value on the brokerage and/or research services provided
or being provided by such broker-dealer. In demonstrating that such
determinations were made in good faith, OFI shall be prepared to show that all
commissions were allocated for purposes contemplated by this Agreement and that
the total commissions paid by the Fund over a representative period selected by
the Fund's trustees were reasonable in relation to the benefits to the Fund.
(d) OFI shall have no duty or obligation to seek advance competitive
bidding for the most favorable commission rate applicable to any particular
portfolio transactions or to select any broker-dealer on the basis of its
purported or "posted" commission rate but will, to the best of its ability,
endeavor to be aware of the current level of the charges of eligible
broker-dealers and to minimise the expense incurred by the Fund for effecting
its portfolio transactions to the extent consistent with the interests and
policies of the Fund as established by the determinations of the Board of
Directors of the Fund and the provisions of this paragraph 6.
(e) The Fund recognises that an affiliated broker-dealer: (i) may act as
one of the Fund's regular brokers for the Fund so long as it is lawful for it so
to act; (ii) may be a major recipient of brokerage commissions paid by the Fund;
and (iii) may effect portfolio transactions for the Fund only if the
commissions, fees or other remuneration received or to be received by it are
determined in accordance with procedures contemplated by any rule, regulation or
order adopted under the Investment Company Act for determining the permissible
level of such commissions.
8. Duration.
This Agreement will take effect on the date first set forth above. Unless
earlier terminated pursuant to paragraph 8 hereof, this Agreement shall remain
in effect from year to year, so long as OFI remains the investment advisor for
Xxxxxxxxxxx Real Asset Fund.
9. Termination.
This Agreement shall terminate automatically and immediately in the event
that the Investment Advisory Agreement between OFI and the Xxxxxxxxxxx Real
Asset Fund is terminated; this Agreement may also be terminated (i) by OFI at
any time without penalty upon sixty days' written notice to the Fund (which
notice may be waived by the Fund); or (ii) by the Fund at any time without
penalty upon sixty days' written notice to OFI (which notice may be waived by
OFI) provided that such termination by the Fund shall be directed or approved by
the vote of a majority of all of the directors of the Fund then in office and by
the vote of the holders of a "majority" of the outstanding voting securities of
the Fund (as defined in the U.S. Investment Company Act).
10. Notice.
Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party, with a copy to the
Fund, at the addresses below or such other address as such other party may
designate for the receipt of such notice.
If to OFI:
OppenheimerFunds, Inc.
2 World Financial Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxx
If to the Sub-Advisor:
Xxxxxxxxxxx Real Asset Management, Inc.
2 World Financial Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxx
If to the Fund:
RAF Fund Ltd.
c/o M and C Corporate Services Limited
Xxxxxx Xxxxx, Xxxxx Xxxxxx Xxxxxx
P.O. Box 309GT
Xxxxxx Town, Grand Cayman
Cayman Islands
British West Indies
If to any party, copy to:
Xxxxxxxxxxx Real Asset Fund
0000 Xxxxx Xxxxxx Xxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxx, Chairman
11. Assignment or Amendment.
This Agreement may not be amended or the rights of OFI hereunder sold,
transferred, pledged or otherwise in any manner encumbered without the
affirmative vote or written consent of the holders of the "majority" of the
outstanding voting securities of the Fund. This Agreement shall automatically
and immediately terminate in the event of its "assignment," as defined in the U.
S. Investment Company Act.
12. Governing Law
This Agreement shall be governed by, and construed in accordance, with the
laws of Colorado.
13. Definitions.
The terms and provisions of the Agreement shall be interpreted and defined
in a manner consistent with the provisions and definitions contained in the
Investment Company Act.
RAF FUND LTD.
By: /s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx, Director
OPPENHEIMERFUNDS, INC.
By: /s/ Xxxxxx Xxxx
Xxxxxx Xxxx
Executive Vice President and General Counsel
