SUB-ADVISORY AGREEMENT
THIS AGREEMENT dated as of October 14, 1996, by and between
OppenheimerFunds, Inc. ("OFI"), a registered investment adviser and
▇▇▇▇▇▇▇▇▇▇▇ 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 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 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.
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, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
If to the Sub-Adviser:
▇▇▇▇▇▇▇▇▇▇▇ Real Asset Management, Inc.
▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
If to either party, copy to:
Oppenheimer Real Asset Fund
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, 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/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇,
Senior Vice President
▇▇▇▇▇▇▇▇▇▇▇ REAL ASSET MANAGEMENT, INC.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
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▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Vice President
Accepted and Acknowledged:
OPPENHEIMER REAL ASSET FUND
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President
ADVISORY\735#3