AMENDED AND RESTATED
                                    DISTRIBUTION AND SERVICE PLAN AND AGREEMENT

                                                       with

                                        OppenheimerFunds Distributor, Inc.

                                               For Class C Shares of

                                          Oppenheimer Capital Income Fund


     This Amended and Restated  Distribution and Service Plan and Agreement (the
"Plan") is dated as of the 28th day of October, 2005, by and between Oppenheimer
Capital  Income Fund (the "Fund") and  OppenheimerFunds  Distributor,  Inc. (the
"Distributor").

     1. The Plan. This Plan is the Fund's written  distribution and service plan
for Class C shares  of the Fund  (the  "Shares"),  designed  to comply  with the
provisions  of Rule  12b-1 as it may be amended  from time to time (the  "Rule")
under the Investment Company Act of 1940 (the "1940 Act"). Pursuant to this Plan
the Fund will compensate the Distributor for its services in connection with the
distribution of Shares,  and the personal service and maintenance of shareholder
accounts  that hold  Shares  ("Accounts").  The Fund may act as  distributor  of
securities  of which it is the issuer,  pursuant to the Rule,  according  to the
terms of this Plan.  The terms and  provisions of this Plan shall be interpreted
and defined in a manner consistent with the provisions and definitions contained
in (i) the Fund's  Registration  Statement,  (ii) the 1940 Act,  (iii) the Rule,
(iv) Rule 2830 of the Conduct  Rules of the National  Association  of Securities
Dealers,  Inc., or any applicable amendment or successor to such rule (the "NASD
Conduct Rules") and (v) any conditions pertaining either to distribution-related
expenses  or to a plan of  distribution  to which the Fund is subject  under any
order on which the Fund relies,  issued at any time by the U.S.  Securities  and
Exchange Commission ("SEC").

     2.  Definitions.  As used in this Plan, the following  terms shall have the
following meanings:

     (a)  "Recipient"  shall mean any broker,  dealer,  bank or other  person or
entity which: (i) has rendered  assistance  (whether direct,  administrative  or
both) in the  distribution  of Shares  or has  provided  administrative  support
services  with  respect  to  Shares  held by  Customers  (defined  below) of the
Recipient;  (ii) shall furnish the Distributor (on behalf of the Fund) with such
information as the Distributor shall reasonably request to answer such questions
as may arise  concerning the sale of Shares;  and (iii) has been selected by the
Distributor to receive payments under the Plan.

     (b)  "Independent  Trustees"  shall mean the members of the Fund's Board of
Trustees  who are not  "interested  persons" (as defined in the 1940 Act) of the
Fund and who have no direct or indirect  financial  interest in the operation of
this Plan or in any agreement relating to this Plan.

     (c) "Customers"  shall mean such brokerage or other customers or investment
advisory  or other  clients of a  Recipient,  and/or  accounts  as to which such
Recipient  provides  administrative  support services or is a custodian or other
fiduciary.

     (d) "Qualified Holdings" shall mean, as to any Recipient,  all Shares owned
beneficially  or of record  by:  (i) such  Recipient,  or (ii) such  Recipient's
Customers,  but in no event shall any such  Shares be deemed  owned by more than
one  Recipient for purposes of this Plan. In the event that more than one person
or entity  would  otherwise  qualify as  Recipients  as to the same  Shares with
respect to the payment of the  Asset-Based  Sales Charge  (defined  below),  the
Recipient which is the dealer of record on the Fund's books as determined by the
Distributor shall be deemed the Recipient as to such Shares for purposes of this
Plan. In the event that more than one person or entity would  otherwise  qualify
as  Recipients  as to  the  same  Shares  with  respect  to the  payment  of the
Asset-Based  Sales Charge (defined below),  the Recipient which is the dealer of
record on the Fund's books as determined by the Distributor  shall be deemed the
Recipient  as to such Shares for  purposes of this Plan.  In the event that more
than one person or entity would  otherwise  qualify as Recipients as to the same
Shares with  respect to the payment of the Service Fee (as defined  below),  the
Recipient as determined by the  Distributor  shall be deemed the Recipient as to
such Shares for purposes of this Plan.

     3.  Payments  for  Distribution   Assistance  and  Administrative   Support
Services.

     (a) Payments to the  Distributor.  In consideration of the payments made by
the Fund to the  Distributor  under this Plan,  the  Distributor  shall  provide
administrative  support  services and  distribution  services to the Fund.  Such
services include  distribution  assistance and  administrative  support services
rendered in connection with Shares (1) sold in purchase transactions, (2) issued
in exchange for shares of another  investment  company for which the Distributor
serves as distributor or  sub-distributor,  or (3) issued  pursuant to a plan of
reorganization  to which  the Fund is a party.  If the Board  believes  that the
Distributor  may  not  be  rendering  appropriate   distribution  assistance  or
administrative  support services in connection with the sale of Shares, then the
Distributor, at the request of the Board, shall provide the Board with a written
report  or other  information  to  verify  that  the  Distributor  is  providing
appropriate  services in this regard. For such services,  the Fund will make the
following payments to the Distributor:

     (i) Administrative Support Service Fees. Within forty-five (45) days of the
end of each  calendar  quarter,  the Fund will make  payments  in the  aggregate
amount of up to 0.25% on an annual basis of the average during the period of the
aggregate  net  asset  value  of the  Shares  computed  as of the  close of each
business day (the "Service  Fee").  Such Service Fee payments  received from the
Fund will  compensate  the  Distributor  for  providing  administrative  support
services  with  respect to  Accounts.  The  administrative  support  services in
connection  with  Accounts  may  include,  but  shall  not be  limited  to,  the
administrative  support  services  that a Recipient  may render as  described in
Section 3(b)(i) below.

     (ii) Distribution  Assistance Fees (Asset-Based Sales Charge). The Fund may
make payments of an "Asset-Based Sales Charge" of up to 0.0625% per month (0.75%
on an annual  basis) of the average  during the month of the aggregate net asset
value of Shares computed as of the close of each business day. Such  Asset-Based
Sales Charge payments received from the Fund will compensate the Distributor for
providing distribution assistance in connection with the sale of Shares.

     The distribution  assistance  services to be rendered by the Distributor in
connection  with the  Shares  may  include,  but shall not be  limited  to,  the
following:  (i) paying sales  commissions to any broker,  dealer,  bank or other
person or entity that sells Shares,  and/or paying such persons "Advance Service
Fee Payments" (as defined below) in advance of, and/or in amounts  greater than,
the  amount  provided  for in  Section  3(b)  of  this  Agreement;  (ii)  paying
compensation  to and  expenses  of  personnel  of the  Distributor  who  support
distribution  of Shares by Recipients;  (iii)  obtaining  financing or providing
such financing from its own  resources,  or from an affiliate,  for the interest
and other borrowing costs of the Distributor's unreimbursed expenses incurred in
rendering  distribution  assistance and  administrative  support services to the
Fund;  and (iv)  paying  other  direct  distribution  costs,  including  without
limitation the costs of sales  literature,  advertising and prospectuses  (other
than  those  prospectuses  furnished  to current  holders  of the Fund's  shares
("Shareholders")) and state "blue sky" registration expenses.

     (b) Payments to Recipients. The Distributor is authorized under the Plan to
pay  Recipients  (1)  distribution  assistance  fees for rendering  distribution
assistance  in  connection  with the sale of Shares  and/or (2) service fees for
rendering administrative support services with respect to Accounts.  However, no
such  payments  shall be made to any  Recipient  for any  period  in  which  its
Qualified  Holdings  do not  equal or  exceed,  at the end of such  period,  the
minimum amount ("Minimum Qualified Holdings"), if any, that may be set from time
to time by a majority of the Independent Trustees.  All fee payments made by the
Distributor  hereunder  are  subject  to  reduction  or  chargeback  so that the
aggregate  service fee payments  and Advance  Service Fee Payments do not exceed
the limits on payments to  Recipients  that are, or may be,  imposed by the NASD
Conduct Rules. The Distributor may make Plan payments to any "affiliated person"
(as  defined  in the 1940  Act) of the  Distributor  if such  affiliated  person
qualifies as a Recipient or retain such payments if the Distributor qualifies as
a Recipient.

     In  consideration of the services  provided by Recipients,  the Distributor
shall make the following payments to Recipients:

     (i) Service  Fee.  In  consideration  of  administrative  support  services
provided by a Recipient, the Distributor shall make service fee payments to that
Recipient  quarterly  or at such other  interval  as deemed  appropriate  by the
Distributor,  within forty-five (45) days of the end of each calendar quarter or
other  period,  at a rate not to exceed  0.25% on an annual basis of the average
during the period of the aggregate net asset value of Shares, computed as of the
close of each business day,  constituting  Qualified Holdings owned beneficially
or of record by the  Recipient or by its Customers for a period of more than the
minimum period (the "Minimum Holding Period"), if any, that may be set from time
to time by a majority of the Independent Trustees.

     Alternatively,  the Distributor may, at its sole option, make the following
service fee payments to any Recipient, within forty-five (45) days of the end of
each calendar  quarter or at such other  interval as deemed  appropriate  by the
Distributor: (A) "Advance Service Fee Payments" at a rate not to exceed 0.25% of
the average  during the calendar  quarter or other period of the  aggregate  net
asset  value of Shares,  computed  as of the close of  business  on the day such
Shares are sold,  constituting Qualified Holdings,  sold by the Recipient during
that  period  and owned  beneficially  or of record by the  Recipient  or by its
Customers,  plus (B)  service fee  payments at a rate not to exceed  0.25% on an
annual basis of the average  during the period of the  aggregate net asset value
of Shares, computed as of the close of each business day, constituting Qualified
Holdings  owned  beneficially  or of record by the Recipient or by its Customers
for a period of more than one (1) year.  In the event Shares are  redeemed  less
than one year after the date such Shares were sold,  the  Recipient is obligated
to and will repay the  Distributor  on demand a pro rata portion of such Advance
Service  Fee  Payments,  based on the ratio of the time such Shares were held to
one (1) year.

     The  administrative  support  services  to be  rendered  by  Recipients  in
connection  with the  Accounts  may  include,  but shall not be limited  to, the
following:  answering  routine inquiries  concerning the Fund,  assisting in the
establishment  and  maintenance  of  accounts  or  sub-accounts  in the Fund and
processing Share redemption transactions, making the Fund's investment plans and
dividend  payment options  available,  and providing such other  information and
services  in  connection  with the  rendering  of personal  services  and/or the
maintenance of Accounts, as the Distributor or the Fund may reasonably request.

     (ii)  Distribution  Assistance  Fee  (Asset-Based  Sales Charge)  Payments.
Irrespective of whichever  alternative  method of making service fee payments to
Recipients is selected by the  Distributor,  in addition the  Distributor  shall
make  distribution  assistance fee payments to each Recipient  quarterly,  or at
such other interval as deemed appropriate by the Distributor,  within forty-five
(45) days after the end of each calendar quarter or other period,  at a rate not
to exceed 0.1875% (0.75% on an annual basis) of the average during the period of
the  aggregate  net  asset  value of  Shares  computed  as of the  close of each
business day constituting  Qualified Holdings owned beneficially or of record by
the  Recipient  or its  Customers  for a  period  of more  than  one  (1)  year.
Alternatively,  at its  sole  option,  the  Distributor  may  make  distribution
assistance fee payments to a Recipient  quarterly,  at the rate described above,
on Shares constituting Qualified Holdings owned beneficially or of record by the
Recipient or its Customers without regard to the 1-year holding period described
above.  Distribution  assistance  fee payments  shall be made only to Recipients
that  are  registered  with  the  SEC  as a  broker-dealer  or are  exempt  from
registration.

     The distribution  assistance to be rendered by the Recipients in connection
with the sale of Shares may include, but shall not be limited to, the following:
distributing  sales  literature and  prospectuses  other than those furnished to
current Shareholders, providing compensation to and paying expenses of personnel
of the Recipient who support the  distribution  of Shares by the Recipient,  and
providing  such  other   information   and  services  in  connection   with  the
distribution of Shares as the Distributor or the Fund may reasonably request.

     (c) A majority of the Independent  Trustees may at any time or from time to
time (i) increase or decrease the rate of fees to be paid to the  Distributor or
to any  Recipient,  but not to exceed the maximum rates set forth above,  and/or
(ii) direct the  Distributor to increase or decrease any Minimum Holding Period,
any maximum period set by a majority of the  Independent  Trustees  during which
fees will be paid on Shares  constituting  Qualified Holdings owned beneficially
or of record by a Recipient or by its Customers (the "Maximum Holding  Period"),
or Minimum  Qualified  Holdings.  The Distributor shall notify all Recipients of
any Minimum  Qualified  Holdings,  Maximum  Holding  Period and Minimum  Holding
Period that are  established  and the rate of payments  hereunder  applicable to
Recipients,  and shall provide each  Recipient with written notice within thirty
(30) days after any change in these provisions.  Inclusion of such provisions or
a  change  in  such  provisions  in a  supplement  or  Statement  of  Additional
Information  or  amendment  to or revision of the  prospectus  or  Statement  of
Additional Information of the Fund shall constitute sufficient notice.

     (d) The Service Fee and the Asset-Based  Sales Charge on Shares are subject
to reduction or  elimination  under the limits that apply to such fees under the
NASD Conduct Rules relating to sales of shares of open-end funds.

     (e)  Under  the  Plan,  payments  may  also be made to  Recipients:  (i) by
OppenheimerFunds, Inc. ("OFI") from its own resources (which may include profits
derived  from  the  advisory  fee it  receives  from the  Fund),  or (ii) by the
Distributor  (a subsidiary of OFI),  from its own  resources,  from  Asset-Based
Sales Charge payments or from the proceeds of its borrowings, in either case, in
the discretion of OFI or the Distributor, respectively.

     (f)   Recipients  are  intended  to  have  certain  rights  as  third-party
beneficiaries  under this Plan,  subject to the  limitations set forth below. It
may be  presumed  that a  Recipient  has  provided  distribution  assistance  or
administrative  support services qualifying for payment under the Plan if it has
Qualified  Holdings of Shares that  entitle it to  payments  under the Plan.  If
either the Distributor or the Board believe that,  notwithstanding  the level of
Qualified Holdings,  a Recipient may not be rendering  appropriate  distribution
assistance  in  connection  with the sale of  Shares or  administrative  support
services for Accounts, then the Distributor,  at the request of the Board, shall
require the Recipient to provide a written report or other information to verify
that said  Recipient is providing  appropriate  distribution  assistance  and/or
services in this regard.  If the  Distributor  or the Board of Trustees still is
not  satisfied  after the receipt of such  report,  either may take  appropriate
steps to  terminate  the  Recipient's  status  as a  Recipient  under  the Plan,
whereupon such Recipient's rights as a third-party  beneficiary  hereunder shall
terminate.   Additionally,   in  their  discretion  a  majority  of  the  Fund's
Independent  Trustees at any time may remove any broker,  dealer,  bank or other
person or entity as a Recipient, whereupon such person's or entity's rights as a
third-party  beneficiary  hereof  shall  terminate.  Notwithstanding  any  other
provision of this Plan,  this Plan does not obligate or in any way make the Fund
liable  to make any  payment  whatsoever  to any  person or  entity  other  than
directly  to the  Distributor.  The  Distributor  has no  obligation  to pay any
Service Fees or Distribution Assistance Fees to any Recipient if the Distributor
has not received  payment of Service Fees or  Distribution  Assistance Fees from
the Fund.

     4. Selection and Nomination of Trustees.  While this Plan is in effect, the
selection  and  nomination  of  persons to be  Trustees  of the Fund who are not
"interested persons" of the Fund  ("Disinterested  Trustees") shall be committed
to the discretion of the incumbent Disinterested Trustees.  Nothing herein shall
prevent the incumbent  Disinterested  Trustees from  soliciting the views or the
involvement  of  others in such  selection  or  nomination  as long as the final
decision on any such  selection and  nomination is approved by a majority of the
incumbent Disinterested Trustees.

     5. Reports.  While this Plan is in effect,  the Treasurer of the Fund shall
provide  written  reports  to the Fund's  Board for its  review,  detailing  the
aggregate  amount of payments made under this Plan and the purpose for which the
payments  were made.  The reports shall be provided  quarterly,  and shall state
whether all provisions of Section 3 of this Plan have been complied with.

     6.  Related  Agreements.  Any  agreement  related  to this Plan shall be in
writing and shall  provide  that:  (i) such  agreement  may be terminated at any
time, without payment of any penalty, by a vote of a majority of the Independent
Trustees  or by a vote of the  holders of a  "majority"  (as defined in the 1940
Act) of the Fund's  outstanding  voting  Class C shares;  (ii) such  termination
shall be on not more than sixty days'  written  notice to any other party to the
agreement;  (iii) such agreement shall  automatically  terminate in the event of
its "assignment" (as defined in the 1940 Act); (iv) such agreement shall go into
effect when approved by a vote of the Board and its Independent Trustees cast in
person at a meeting called for the purpose of voting on such agreement;  and (v)
such agreement shall,  unless terminated as herein provided,  continue in effect
from year to year only so long as such  continuance is specifically  approved at
least  annually  by a vote of the Board  and its  Independent  Trustees  cast in
person at a meeting called for the purpose of voting on such continuance.

     7. Effectiveness, Continuation, Termination and Amendment. This Amended and
Restated  Plan has been  approved  by a vote of the  Board  and its  Independent
Trustees and replaces the Fund's  prior  Amended and Restated  Distribution  and
Service Plan and Agreement for Class C shares.  Unless terminated as hereinafter
provided,  it shall  continue in effect until renewed by the Board in accordance
with the Rule and  thereafter  from year to year or as the  Board may  otherwise
determine but only so long as such continuance is specifically approved at least
annually by a vote of the Board and its Independent Trustees cast in person at a
meeting called for the purpose of voting on such continuance.

     This Plan may not be amended to increase  materially the amount of payments
to be made under this Plan,  without  approval of the Class C Shareholders  at a
meeting called for that purpose and all material  amendments must be approved by
a vote of the Board and of the Independent Trustees.

     This  Plan may be  terminated  at any time by a vote of a  majority  of the
Independent  Trustees or by the vote of the holders of a "majority"  (as defined
in the 1940 Act) of the Fund's  outstanding  Class C voting shares. In the event
of such  termination,  the Board and its  Independent  Trustees shall  determine
whether the  Distributor  shall be entitled to payment from the Fund of all or a
portion of the Service  Fee and/or the  Asset-Based  Sales  Charge in respect of
Shares sold prior to the effective date of such termination.

     8.  Disclaimer  of  Shareholder  and  Trustee  Liability.  The  Distributor
understands  that the  obligations  of the Fund under this Plan are not  binding
upon any Trustee or shareholder of the Fund  personally,  but bind only the Fund
and the Fund's  property.  The Distributor  represents that it has notice of the
provisions  of the  Declaration  of Trust of the Fund  disclaiming  Trustee  and
shareholder liability for acts or obligations of the Fund.

                                 Oppenheimer Capital Income Fund



                                 By: /s/ Robert G. Zack
                                   ___________________________________
                                   Robert G. Zack, Vice President & Secretary



                                  OppenheimerFunds Distributor, Inc.


                                  By: /s/ James Ruff
                                    _______________________________________
                                     James Ruff, President