SUB-ADVISORY AGREEMENT
THIS AGREEMENT dated as of October 14, 1996, by and between
OppenheimerFunds, Inc. ("OFI"), a registered investment adviser and
Xxxxxxxxxxx Real Asset Management, Inc. ("ORAMI"), a registered
investment adviser and a registered commodity trading adviser (the
"Sub-Adviser").
WHEREAS, Oppenheimer Real Asset Fund (the "Fund") is a
Massachusetts business trust which is an open-end non-diversified
management investment company registered as such with the
Securities and Exchange Commission (the "Commission") pursuant to
the Investment Company Act of 1940, as amended (the "Act"), and
whereas the Trustees of the Fund have appointed OFI as the
investment adviser for the Fund, pursuant to the terms of an
Investment Advisory Agreement (the "Advisory Agreement");
WHEREAS, the Advisory Agreement provides that OFI may, at its
option, subject to approval by the Trustees of the Fund and, to the
extent necessary, shareholders of the Fund, appoint a subadviser to
assume certain of the responsibilities and obligations of OFI under
the Advisory Agreement;
WHEREAS, the Sub-Adviser is a registered investment adviser,
and OFI desires to appoint the Sub-Adviser as its subadviser for
the Fund and the Sub-Adviser is willing to act in such capacity
upon the terms herein set forth;
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants herein contained, the parties hereto, intending to
be legally bound, hereby agree as follows:
1. General Provision.
OFI hereby employs the Sub-Adviser and the Sub-Adviser hereby
undertakes to act as the investment subadviser of the Fund to
provide investment advice and to perform for the Fund such
other duties and functions as are hereinafter set forth. The
Sub-Adviser shall, in all matters, give to the Fund and the
Fund's Board of Trustees, directly or through OFI, the benefit
of the Sub-Adviser's 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 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 Amended
and Restated Declaration of Trust and By-Laws of the Fund as
amended from time to time; (iv) policies and determinations of
the Board of Trustees of the Fund and OFI; (v) the fundamental
policies and investment restrictions of the Fund as reflected
in the Fund's registration statement under the Investment
Company Act or as such policies may, from time to time, be
amended by the Fund's shareholders; and (vi) the Prospectus
and Statement of Additional Information of the Fund in effect
from time to time. The appropriate officers and employees
of the Sub-Adviser shall be available upon reasonable notice
for consultation with any of the Trustees and officers of the
Fund and OFI with respect to any matters dealing with the
business and affairs of the Fund including the valuation of
portfolio securities of the Fund which securities are either
not registered for public sale or not traded on any securities
market.
2. Duties of the Sub-Adviser.
(a) The Sub-Adviser shall, subject to the direction and
control by the Fund's Board of Trustees or OFI, to the
extent OFI's direction is not inconsistent with that of
the Board of Trustees, (i) regularly provide investment
advice and recommendations to the Fund, directly or
through OFI, with respect to the Fund's investments,
investment policies and the purchase and sale of
securities, futures contracts, swaps and other
instruments; (ii) supervise and monitor continuously the
investment program of the Fund and the composition of its
portfolio and determine what securities shall be
purchased or sold by the Fund; (iii) arrange, subject to
the provisions of paragraph 5 hereof, for the purchase of
securities and other investments for the Fund and the
sale of securities and other investments held in the
portfolio of the Fund; and (iv) provide reports on the
foregoing to the Board of Trustees at each Board meeting.
(b) Provided that neither OFI nor the Fund shall not be
required to pay any compensation other than as provided
by the terms of this Agreement and subject to the
provisions of paragraph 5 hereof, the Sub-Adviser may
obtain investment information, research or assistance
from any other person, firm or corporation to supplement,
update or otherwise improve its investment management
services.
(c) Provided that nothing herein shall be deemed to protect
the Sub-Adviser 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, the Sub-Adviser 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 the Sub-
Adviser or any officer thereof from acting as investment
adviser or subadviser for any other person, firm or
corporation and shall not in any way limit or restrict
OFI or the Sub-Adviser or any of their respective
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 any party of its duties and obligations
under this Agreement.
(e) The Sub-Adviser shall cooperate with OFI by providing OFI
with any information in the Sub-Adviser's possession
necessary for supervising the activities of all
administrative and clerical personnel as shall be
required to provide effective corporate administration
for the Fund, including the compilation and maintenance
of such records with respect to its operations as may
reasonably be required. The Sub-Adviser shall, at its
own expense, provide such officers for the Fund as its
Board may request.
3. Duties of OFI.
OFI shall provide the Sub-Adviser with the following
information about the Fund:
(a) cash flow estimates on request;
(b) notice of the Fund's "investable funds" by 11:00 a.m.
each business day;
(c) as they are modified, from time to time, current versions
of the documents and policies referred to in
subparagraphs (iii), (iv), (v) and (vi) of paragraph 1.,
above.
4. Compensation of the Sub-Adviser.
OFI agrees to pay the Sub-Adviser and the Sub-Adviser 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 Fund as of the close of each business day
and payable monthly by the tenth business day of the following
month, at the following annual rate:
0.50% of the first $200 million of average annual net
assets;
0.45% of the next $200 million of average annual net
assets;
0.425% of the next $200 million of average annual net
assets;
0.40% of the next $200 million of average annual net
assets; and 0.375% of average annual net assets in excess of $800
million.
5. Portfolio Transactions and Brokerage.
(a) The Sub-Adviser is authorized, in arranging the purchase
and sale of the Fund's publicly-traded portfolio
securities, to employ or deal with such members of
securities or commodities exchanges, brokers or dealers
or futures commission merchants (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 Fund's portfolio
transactions.
(b) The Sub-Adviser may effect the purchase and sale of
securities (which are otherwise publicly traded) in
private transactions on such terms and conditions as are
customary in such transactions, may use a broker in such
to effect said transactions, and may enter into a
contract in which the broker acts either as principal or
as agent.
(c) The Sub-Adviser 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 the
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 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.
(d) The Sub-Adviser shall have discretion, in the interests
of the Fund, to allocate brokerage on the Fund's
portfolio transactions to broker-dealers, other than
affiliated broker-dealers, 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 Fund and/or other accounts for which the Sub-
Adviser or its affiliates exercise "investment
discretion" (as that term is defined in Section 3(a)(35)
of the 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 the 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 the Sub-Adviser or its
affiliates with respect to the accounts as to which they
exercise investment discretion. In reaching such
determination, the 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, the 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 Fund
over a representative period selected by the Trustees
were reasonable in relation to the benefits to the Fund.
(e) The 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 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
Trustees and the provisions of this paragraph 5.
(f) Subject to the foregoing provisions of this Section 5,
ORAMI may also consider sales of shares of the Fund and
other funds advised by either OFI, ORAMI or their
affiliates as a factor in the selection of broker-dealers
for its portfolio transactions.
6. Duration.
This Agreement will take effect on the date first set forth
above. Unless earlier terminated pursuant to paragraph 7
hereof, this Agreement shall remain in effect until two years
from the date of execution hereof, and thereafter will
continue in effect from year to year, so long as such
continuance shall be approved at least annually by the Fund's
Board of Trustees, including the vote of the majority of the
Trustees of the Fund 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 Fund and by such a vote
of the Fund's Board of Trustees.
7. Termination.
This Agreement shall terminate automatically in the event of
its assignment or in the event the Fund terminates the
Advisory Agreement; it may also be terminated: (i) for cause
or with the consent of the parties and the Fund, by OFI or the
Sub-Adviser at any time without penalty upon sixty days'
written notice to the other party and the Fund; or (ii) by the
Fund at any time without penalty upon sixty days' written
notice to OFI and the Sub-Adviser provided that such
termination by the Fund shall be directed or approved by the
vote of a majority of all of the trustees of the Fund then in
office or by the vote of the holders of a "majority" of the
outstanding voting securities of the Fund (as defined in the
Investment Company Act).
8. Disclaimer of Shareholder Liability.
OFI and the Sub-Adviser understand that the obligations of the
Fund under this Agreement are not binding upon any Trustee or
shareholder of the Fund personally, but bind only the Fund and
the Fund's property. OFI and the Sub-Adviser represent that
each has notice of the provisions of the Amended and Restated
Declaration of Trust of the Fund disclaiming shareholder and
Trustee liability for acts or obligations of the Fund.
9. 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 Trade Center, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
If to the Sub-Adviser:
Xxxxxxxxxxx Real Asset Management, Inc.
0 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxxxx X. Xxxx, Esq.
If to either party, copy to:
Oppenheimer Real Asset Fund
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxx, Chairman
IN WITNESS WHEREOF, OFI and the Sub-Adviser have caused this
Agreement to be executed on the day and year first above written.
OPPENHEIMERFUNDS, INC.
By: /s/ Xxxxxx X. Xxxx
--------------------
Xxxxxx X. Xxxx,
Senior Vice President
XXXXXXXXXXX REAL ASSET MANAGEMENT,
INC.
By: /s/ Xxxxxxxxx X. Xxxx
-----------------------
Xxxxxxxxx X. Xxxx,
Vice President
Accepted and Acknowledged:
OPPENHEIMER REAL ASSET FUND
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------
Xxxxxx X. Xxxxxxx, Vice President
ADVISORY\735#3
