INVESTMENT ADVISORY AGREEMENT
AGREEMENT, made the ____ day of January, 1997, by and between
XXXXXXXXXXX QUEST CAPITAL VALUE FUND, INC., a Maryland corporation
(hereinafter referred to as the "Company"), and OPPENHEIMERFUNDS,
INC. (hereinafter referred to as "OFI").
WHEREAS, the Company is an open-end, diversified management
investment company registered as such with the Securities and
Exchange Commission (the "Commission") pursuant to the Investment
Company Act of 1940 (the "Investment Company Act"), and OFI is an
investment adviser registered as such with the Commission under the
Investment Advisers Act of 1940;
WHEREAS, the Company desires that OFI shall act as its
investment adviser 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 Provisions:
The Company hereby employs OFI and OFI hereby undertakes
to act as the investment adviser of the Company, and to perform for
the Company such other duties and functions for the period and on
such terms as set forth in this Agreement. OFI shall, in all
matters, give to the Company and its Board of Directors (the
"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 Company to conform to (i) the provisions of
the Investment Company Act and any rules or regulations thereunder;
(ii) any other applicable provisions of state or Federal law; (iii)
the provisions of the Articles of Incorporation and By-Laws of the
Company as amended from time to time; (iv) policies and
determinations of the Directors; (v) the fundamental policies and
investment restrictions as reflected in the registration statement
of the Company under the Investment Company Act or as such policies
may, from time to time, be amended and (vi) the Prospectus and
Statement of Additional Information 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 Company with respect to any matters dealing
with the business and affairs of the Company including the
valuation of portfolio securities of the Company which are either
not registered for public sale or not traded on any securities
market.
2. Investment Management:
(a) OFI shall, subject to the direction and control by
the Directors, (i) regularly provide investment advice and
recommendations to the Company with respect to the investments,
investment policies and the purchase and sale of securities; (ii)
supervise continuously the investment program of the Company and
the composition of its portfolio and determine what securities
shall be purchased or sold by the Company; and (iii) arrange,
subject to the provisions of paragraph 7 hereof, for the purchase
of securities and other investments by the Company and the sale of
securities and other investments held in the Company's portfolio.
(b) Provided that the Company shall not be required to
pay any compensation for services under this Agreement other than
as provided by the terms of the Agreement and subject to the
provisions of paragraph 7 hereof, OFI may obtain investment
information, research or assistance from any other person, firm or
corporation to supplement, update or otherwise improve its
investment management services including entering into sub-advisory
agreements with other affiliated or unaffiliated registered
investment advisers to obtain specialized services.
(c) Provided that nothing herein shall be deemed to
protect OFI from willful misfeasance, bad faith or gross negligence
in the performance of its duties, or reckless disregard of its
obligations and duties under this Agreement, OFI shall not be
liable for any loss sustained by reason of good faith errors or
omissions in connection with any matters to which this Agreement
relates.
(d) Nothing in this Agreement shall prevent OFI or any
entity controlling, controlled by or under common control with OFI
or any officer thereof from acting as investment adviser for any
other person, firm or corporation or in any way limit or restrict
OFI or any of its directors, officers, stockholders or employees
from buying, selling or trading any securities for its or their own
account or for the account of others for whom it or they may be
acting, provided that such activities will not adversely affect or
otherwise impair the performance by OFI of its duties and
obligations under this Agreement.
3. 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
Company, including the compilation and maintenance of such records
with respect to its operations as may reasonably be required; the
preparation and filing of such reports with respect thereto as
shall be required by the Commission; composition of periodic
reports with respect to operations of the Company for its
shareholders; composition of proxy materials for meetings of the
Company's shareholders; and the composition of such registration
statements as may be required by Federal and state securities laws
for continuous public sale of Shares of the Company. OFI shall, at
its own cost and expense, also provide the Company with adequate
office space, facilities and equipment. OFI shall, at its own
expense, provide such officers for the Company as the Board of
Directors may request.
4. Allocation of Expenses:
All other costs and expenses of the Company not
expressly assumed by OFI under this Agreement, or to be paid by
OppenheimerFunds Distributor, Inc., the distributor of the shares
of the Company, shall be paid by the Company, including, but not
limited to: (i) interest, taxes and governmental fees; (ii)
brokerage commissions and other expenses incurred in acquiring or
disposing of the portfolio securities and other investments; (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 the registration under
Federal and state securities laws of Shares of the Company for
public sale; (x) expenses of printing and mailing reports, notices
and proxy materials to shareholders of the Company; (xi) except as
noted above, all other expenses incidental to holding meetings of
the Company's shareholders; and (xii) such extraordinary non-recurring expenses
as may arise, including litigation, affecting
the Company and any legal obligation which the Company may have to
indemnify its officers and Directors 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 Company shall not receive any
compensation from the Company for their services.
5. Compensation of OFI:
The Company 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 total net asset value of the Company as of the
close of each business day and payable monthly at the annual rate
set forth on Schedule A hereto.
6. Use of Name "Xxxxxxxxxxx" or "Quest For Value":
OFI hereby grants to the Company a royalty-free, non-exclusive license
to use the name "Xxxxxxxxxxx" or "Quest For
Value" in the name of the Company for the duration of this
Agreement and any extensions or renewals thereof. To the extent
necessary to protect OFI's rights to the name "Xxxxxxxxxxx" or
"Quest For Value" under applicable law, such license shall allow
OFI to inspect, subject to control by the Company's Board, control
the nature and quality of services offered by the Company under
such name and may, upon termination of this Agreement, be
terminated by OFI, in which event the Company shall promptly take
whatever action may be necessary to change its name and discontinue
any further use of the name "Xxxxxxxxxxx" or "Quest For Value" in
the name of the Company or otherwise. The name "Xxxxxxxxxxx" and
"Quest For Value" may be used or licensed by OFI in connection with
any of its activities, or licensed by OFI to any other party.
7. Portfolio Transactions and Brokerage:
(a) OFI (and any sub-adviser) is authorized, in
arranging the purchase and sale of the portfolio securities of the
Company, to employ or deal with such members of securities or
commodities exchanges, brokers or dealers (hereinafter "broker-dealers"),
including "affiliated" broker-dealers (as that term is
defined in the 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 portfolio
transactions of the Company as well as to obtain, consistent with
the provisions of subparagraph (c) of this paragraph 7, 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 (and any sub-adviser) shall select broker-dealers
to effect the portfolio transactions of the Company 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 (or any sub-adviser) 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 portfolio transactions of the Company by
participating therein for its own account; the importance to the
Company 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 Company.
(c) OFI (and any sub-adviser) shall have discretion, in
the interest of the Company, to allocate brokerage on the
portfolio transactions of the Company 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 Securities
Exchange Act of 1934) for the Company and/or other accounts for
which OFI or its affiliates (or any sub-adviser) exercise
"investment discretion" (as that term is defined in Section
3(a)(35) of the Securities Exchange Act of 1934) and to cause the
Company to pay such broker-dealers a commission for effecting a
portfolio transaction for the Company 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 (or any sub-adviser) 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 (or any sub-adviser) with
respect to accounts as to which they exercise
investment discretion. In reaching such determination, OFI (or any
sub-adviser) 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 (and any
sub-adviser) shall be prepared to show that all commissions were
allocated for purposes contemplated by this Agreement and that the
total commissions paid by the Company over a representative period
selected by the Company's Directors were reasonable in relation to
the benefits to the Company.
(d) OFI (or any sub-adviser) 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 minimize the expense incurred by
the Company for effecting its portfolio transactions to the extent
consistent with the interests and policies of the Company as
established by the determinations of the Board of Directors of the
Company and the provisions of this paragraph 7.
(e) The Company recognizes that an affiliated broker-dealer:
(i) may act as one of the Company's regular brokers for the
Company so long as it is lawful for it so to act; (ii) may be a
major recipient of brokerage commissions paid by the Company; and
(iii) may effect portfolio transactions for the Company thereof
only if the commissions, fees or other renumeration 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.
(f) Subject to the foregoing provisions of this
paragraph 7, OFI (and any sub-adviser) may also consider sales of
shares of the Company, and the other funds advised by OFI and its
affiliates as a factor in the selection of broker-dealers for its
portfolio transactions.
8. Duration:
This Agreement will take effect on the date first set
forth above. Unless earlier terminated pursuant to paragraph 10
hereof, this Agreement shall remain in effect from year-to-year, so
long as such continuance shall be approved at least annually by the
Company's Board of Directors, including the vote of the majority of
the Directors of the Company who are not parties to this Agreement
or "interested persons" (as defined in the Investment Company Act)
of any such party, cast in person at a meeting called for the
purpose of voting on such approval, or by the holders of a
"majority" (as defined in the Investment Company Act) of the
outstanding voting securities of the Company, and by such a vote of
the Company's Board of Directors.
9. Termination:
This Agreement may be terminated (i) by OFI at any time
without penalty upon sixty days' written notice to the Company
(which notice may be waived by the Company); or (ii) by the Company
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 Company shall be directed or approved by the vote of a
majority of all of the Directors of the Company then in office or
by the vote of the holders of a "majority" of the outstanding
voting securities of the Company (as defined in the Investment
Company Act).
10. 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 Company. This Agreement shall automatically and immediately
terminate in the event of its "assignment," as defined in the
Investment Company Act.
11. 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.
XXXXXXXXXXX QUEST CAPITAL VALUE FUND,
INC.
Attest: ______________________ By: _______________________
Xxxxxx X. Xxxxxxx Xxxxxxx X. Xxxxxxxxx
Secretary Chairman
OPPENHEIMERFUNDS, INC.
Attest: ______________________ By: _______________________
Xxxxxxxxx X. Xxxx Xxxxxx X. Xxxxxxx
Secretary Executive Vice President
quest\qbtsf\investad.ag4
Schedule A
To
Investment Advisory Agreement
Between
Xxxxxxxxxxx Quest Capital Value Fund, Inc.
and
OppenheimerFunds, Inc.
Annual Fee as a Percentage of Daily Total
Name of Series Net Assets1
Xxxxxxxxxxx Quest Capital 1.00% of first $400 million of all net assets
Value Fund, Inc. 0.90% of next $400 million of all net assets
0.85% of net assets over $800 million
_______________
1 For the period of two years from the date of this Agreement, OFI
agrees to waive the following portion of its investment advisory fee:
0.15% of first $200 million of all net assets; 0.40% of next $200
million of all net assets; 0.30% of next $400 million of all net
assets; and 0.25% of net asset over $800 million.
