TAX-FREE TRUST OF OREGON
AMENDED AND RESTATED
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT, made as of July 1, 1995, by and
between The Cascades Trust (the "Business Trust"), a Massachusetts
business trust, 000 Xxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, XX 00000,
and Qualivest Capital Management, Inc. (the "Adviser"), 000 X.X.
Xxxxx Xxxxxx, X.X. Bancorp Tower, Portland, Oregon 97204
W I T N E S S E T H :
WHEREAS, the Business Trust and the Adviser have
previously entered into an Investment Advisory Agreement with
respect to a portfolio of the Business Trust entitled Tax-Free
Trust of Oregon (the "Trust"); and
WHEREAS, the Business Trust and the Adviser now wish
to amend and restate their agreement as herein set forth, referred
to hereafter as "this Agreement";
NOW THEREFORE, in consideration of the mutual
promises and agreements herein contained and other good and
valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:
1. In General
The Adviser agrees, all as more fully set forth
herein, to act as managerial investment adviser to the Trust with
respect to the investment of the Trust's assets, and to supervise
and arrange the purchase of securities for and the sale of
securities held in the portfolio of the Trust.
2. Duties and Obligations of the Adviser With Respect To
Investment of the Assets of the Trust
(a) Subject to the succeeding provisions of
this section and subject to the direction and control of the Board
of Trustees of the Business Trust, the Adviser shall:
(i) Supervise continuously the investment
program of the Trust and the composition of
its portfolio;
(ii) Determine what securities shall be
purchased or sold by the Trust;
(iii) Arrange for the purchase and the sale of
securities held in the portfolio of the Trust;
and
(iv) Either keep the accounting records of the
Trust, including the computation of net asset
value per share and the dividends or, at its
expense and responsibility, delegate such
duties in whole or in part to a company
satisfactory to the Business Trust.
(b) Any investment program furnished by the
Adviser under this section shall at all times conform to, and be in
accordance with, any requirements imposed by: (1) the Investment
Company Act of l940 (the "Act") and any rules or regulations in
force thereunder; (2) any other applicable laws, rules and
regulations; (3) the Declaration of Trust and By-Laws of the
Business Trust as amended from time to time; (4) any policies and
determinations of the Board of Trustees of the Business Trust; and
(5) the fundamental policies of the Trust, as reflected in its
registration statement under the Act or as amended by the
shareholders of the Trust.
(c) The Adviser shall give the Trust the
benefit of its best judgment and effort in rendering services
hereunder, but the Adviser shall not be liable for any loss
sustained by reason of the adoption of any investment policy or the
purchase, sale or retention of any security, whether or not such
purchase, sale or retention shall have been based upon (i) its own
investigation and research or (ii) investigation and research made
by any other individual, firm or corporation, if such purchase,
sale or retention shall have been made and such other individual,
firm or corporation shall have been selected in good faith by the
Adviser. Nothing herein contained shall, however, be construed to
protect the Adviser against any liability to the Trust or its
security holders by reason of willful misfeasance, bad faith or
gross negligence in the performance of its duties, or by reason of
its reckless disregard of its obligations and duties under this
Agreement.
(d) Nothing in this Agreement shall prevent the
Adviser or any affiliated person (as defined in the Act) of the
Adviser from acting as investment adviser or manager for any other
person, firm or corporation and shall not in any way limit or
restrict the Adviser or any such affiliated person from buying,
selling or trading any securities for its own or their own accounts
or for the accounts of others for whom it or they may be acting,
provided, however, that the Adviser expressly represents that it
will undertake no activities which, in its judgment, will adversely
affect the performance of its obligations to the Trust under this
Agreement. It is agreed that the Adviser shall have no
responsibility or liability for the accuracy or completeness of the
Business Trust's Registration Statement under the Act and the
Securities Act of 1933, except for information supplied by the
Adviser for inclusion therein. The Adviser shall promptly inform
the Business Trust as to any information concerning the Adviser
appropriate for inclusion in such Registration Statement, or as to
any transaction or proposed transaction which might result in an
assignment of the Agreement. The Business Trust agrees to
indemnify the Adviser to the full extent permitted by the Business
Trust's Declaration of Trust.
(e) In connection with its duties to arrange
for the purchase and sale of the Trust's portfolio securities, the
Adviser shall select such broker-dealers ("dealers") as shall, in
the Adviser's judgment, implement the policy of the Trust to
achieve "best execution," i.e., prompt, efficient, and reliable
execution of orders at the most favorable net price. The Adviser
shall cause the Trust to deal directly with the selling or
purchasing principal or market maker without incurring brokerage
commissions unless the Adviser determines that better price or
execution may be obtained by paying such commissions; the Trust
expects that most transactions will be principal transactions at
net prices and that the Trust will incur little or no brokerage
costs. The Business Trust understands that purchases from
underwriters include a commission or concession paid by the issuer
to the underwriter and that principal transactions placed through
dealers include a spread between the bid and asked prices. In
allocating transactions to dealers, the Adviser is authorized to
consider, in determining whether a particular dealer will provide
best execution, the dealer's reliability, integrity, financial
condition and risk in positioning the securities involved, as well
as the difficulty of the transaction in question, and thus need not
pay the lowest spread or commission available if the Adviser
determines in good faith that the amount of commission is
reasonable in relation to the value of the brokerage and research
services provided by the dealer, viewed either in terms of the
particular transaction or the Adviser's overall responsibilities as
to the accounts as to which it exercises investment discretion.
If, on the foregoing basis, the transaction in question could be
allocated to two or more dealers, the Adviser is authorized, in
making such allocation, to consider (i) whether a dealer has
provided research services, as further discussed below; and (ii)
whether a dealer has sold shares of the Trust or any other
investment company or companies having the Adviser as its
investment adviser or having the same sub-adviser, administrator or
principal underwriter as the Trust. Such research may be in
written form or through direct contact with individuals and may
include quotations on portfolio securities and information on
particular issuers and industries, as well as on market, economic,
or institutional activities. The Business Trust recognizes that no
dollar value can be placed on such research services or on
execution services, that such research services may or may not be
useful to the Trust and/or other accounts of the Adviser, and that
research received by such other accounts may or may not be useful
to the Trust.
3. Allocation of Expenses
The Adviser agrees that it will furnish the Trust,
at the Adviser's expense, all office space, facilities, equipment
and clerical personnel necessary for carrying out its duties under
this Agreement. The Adviser agrees that it will supply, or cause
to be supplied, to any sub-adviser, administrator or principal
underwriter of the Trust all necessary financial information in
connection with such sub-adviser's, administrator's or principal
underwriter's duties under any agreement between such sub-adviser,
administrator or principal underwriter and the Business Trust. The
Adviser will also pay all compensation of the Trust's officers,
employees, and Trustees, if any, who are affiliated persons of the
Adviser. The Trust agrees to bear the costs of preparing and
setting in type its prospectuses, statements of additional
information and reports to its shareholders, and the costs of
printing or otherwise producing and distributing those copies of
such prospectuses, statements of additional information and reports
as are sent to its shareholders. All costs and expenses not
expressly assumed by the Adviser under this Agreement or by such
sub-adviser, administrator or principal underwriter shall be paid
by the Trust, including, but not limited to (i) interest and taxes;
(ii) brokerage commissions; (iii) insurance premiums; (iv)
compensation and expenses of its Trustees other than those
affiliated with the Adviser or such sub-adviser, administrator or
principal underwriter; (v) legal and audit expenses; (vi) custodian
and transfer agent, or shareholder servicing agent, fees and
expenses; (vii) expenses incident to the issuance of its shares
(including issuance on the payment of, or reinvestment of,
dividends); (viii) fees and expenses incident to the registration
under Federal or State securities laws of the Trust or its shares;
(ix) expenses of preparing, printing and mailing reports and
notices and proxy material to shareholders of the Trust; (x) all
other expenses incidental to holding meetings of the Trust's
shareholders; and (xi) such non-recurring expenses as may arise,
including litigation affecting the Trust and the legal obligations
for which the Business Trust may have to indemnify its officers and
Trustees.
4. Compensation of the Adviser
(a) The Business Trust agrees to pay the
Adviser, and the Adviser agrees to accept as full compensation for
all services rendered by the Adviser as such, a management fee
payable monthly and computed on the net asset value of the Trust as
of the close of business each business day at the annual rate of
0.25 of 1% of such net asset value, provided, however, that for any
day that the Trust pays or accrues a fee under the Distribution
Plan of the Trust based upon the assets of the Trust, the annual
management fee shall be payable at the annual rate of 0.20 of 1% of
such net asset value.
(b) The Adviser agrees that the fee under (a)
above shall be reduced, but not below zero, by an amount equal to
one-half of the amount, if any, by which the total expenses of the
Trust in any fiscal year, exclusive of taxes, interest, and
brokerage fees, shall exceed the lesser of (i) 2.5% of the first
$30 million of average annual net assets of the Trust plus 2% of
the next $70 million of such assets and 1.5% of such assets in
excess of $100 million, or (ii) 25% of the Trust's total annual
investment income. The payment of the fee under (a) above at the
end of any month will be reduced or postponed so that at no time
will there be any accrued but unpaid liability under this expense
limitation, subject to readjustment during the year.
5. Duration and Termination
(a) This Amended and Restated Investment
Advisory Agreement shall become effective upon the date stated
above and shall, unless terminated as hereinafter provided,
continue in effect until the June 30 next preceding the second
anniversary of the effective date of this Agreement, and from year
to year thereafter, but only so long as such continuance is
specifically approved at least annually (1) by a vote of the
Business Trust's Board of Trustees, including a vote of a majority
of the Trustees who are not parties to this Agreement or
"interested persons" (as defined in the Act) of any such party,
with votes cast in person at a meeting called for the purpose of
voting on such approval, or (2) by a vote of the holders of a
"majority" (as so defined) of the outstanding voting securities of
the Trust and by such a vote of the Trustees.
(b) This Agreement may be terminated by the
Adviser at any time without penalty upon giving the Business Trust
sixty days' written notice (which notice may be waived by the
Business Trust) and may be terminated by the Business Trust at any
time without penalty upon giving the Adviser sixty days' written
notice (which notice may be waived by the Adviser), provided that
such termination by the Business Trust shall be directed or
approved by a vote of a majority of its Trustees in office at the
time or by a vote of the holders of a majority (as defined in the
Act) of the voting securities of the Trust outstanding and entitled
to vote. This Agreement shall automatically terminate in the event
of its assignment (as defined in the Act).
6. Disclaimer of Shareholder Liability
The Adviser understands that the obligations of
this Agreement are not binding upon any shareholder of the Trust
personally, but bind only the Business Trust's property; the
Adviser represents that it has notice of the provisions of the
Business Trust's Declaration of Trust disclaiming shareholder
liability for acts or obligations of the Trust.
7. Notices of Meetings
The Business Trust agrees that notice of each
meeting of the Board of Trustees of the Business Trust will be sent
to the Adviser and that the Business Trust will make appropriate
arrangements for the attendance (as persons present by invitation)
of such person or persons as the Adviser may designate.
IN WITNESS WHEREOF, the parties hereto have
caused the foregoing instrument to be executed by their duly
authorized officers and their seals to be hereunto affixed, all as
of the day and year first above written.
ATTEST: The Cascades Trust
________________________ By:___________________________________
ATTEST: Qualivest Capital Management, Inc.
________________________ By:___________________________________
