HERITAGE CASH TRUST
INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENT
This Agreement is made as of April 22, 1992, between Heritage Cash Trust,
a Massachusetts business trust ("Trust"), and Heritage Asset Management, Inc.
("Manager").
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended ("1940 Act"), as an open-end, diversified management investment
company and consists of several series of shares ("Series"), each having its own
assets and investment policies; and
WHEREAS, the Trust has by separate contract previously retained the
Manager as investment adviser and administrator to furnish administrative,
investment advisory and portfolio management services to the Heritage Cash Trust
Money Market Fund, a Series of the Trust; and
WHEREAS, the Trust desires to retain the Manager as investment adviser and
administrator to furnish administrative, investment advisory and portfolio
management services to the Trust and each other Series of the Trust as now
exists and as hereafter may be established (hereinafter "Series" shall refer to
each series of the Trust as now exists or as may hereafter be established, other
than the Heritage Cash Trust Money Market Fund series), and the Manager is
willing to furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. The Trust hereby appoints Manager as investment adviser
and administrator of the Trust and each Series for the period and on the terms
set forth in this Agreement. Manager accepts such appointment and agrees to
render the services herein set forth for the compensation herein provided. In
the performance of its duties, the Manager will act in the best interests of the
Trust and the Series and will comply with (a) applicable laws and regulations,
including, but not limited to, the 1940 Act, (b) the terms of this Agreement,
(c) the Trust's Declaration of Trust, Bylaws and currently effective
registration statement under the Securities Act of 1933 and the 1940 Act, and
any amendments thereto ("Registration Statement"), (d) relevant undertakings
provided to State securities regulators, (e) the stated investment objective,
policies and restrictions of each applicable Series, and (f) such other
guidelines as the Trustees reasonably may establish.
2. DUTIES AS INVESTMENT ADVISER.
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(a) INVESTMENT PROGRAM. Subject to supervision by the Trust's
Board of Trustees, the Manager will provide a continuous investment program for
each Series and shall determine what securities and other investments will be
purchased, retained or sold by each Series.
(b) EXECUTION OF TRANSACTIONS. The Manager will place orders
pursuant to its investment determinations for each Series either directly with
the issuer or through any brokers or dealers. In the selection of brokers or
dealers and the placement of orders for the purchase and sale of portfolio
investments for each Series, the Manager shall use its best efforts to obtain
for each Series the most favorable price and execution available, except to the
extent that it may be permitted to pay higher brokerage commissions for
brokerage and research services as described below. In using its best efforts to
obtain the most favorable price and execution available, the Manager, bearing in
mind each Series' best interests at all times, shall consider all factors it
deems relevant, including by way of illustration, price, the size of the
transaction, the nature of the market for the security, the amount of the
commission, the timing of the transaction taking into account market prices and
trends, the reputation, experience and financial stability of the broker or
dealer involved and the quality of service rendered by the broker or dealer in
other transactions. Subject to such policies as the Trustees of the Trust may
determine, the Manager shall not be deemed to have acted unlawfully or to have
breached any duty created by this Agreement or otherwise solely by reason of its
having caused a Series to pay a broker that provides brokerage and research
services to the Manager an amount of commission for effecting a portfolio
investment transaction in excess of the amount of commission another broker
would have charged for effecting that transaction if the Manager determines in
good faith that such amount of commission is reasonable in relation to the value
of the brokerage and research services provided by such broker or dealer, viewed
in terms of either that particular transaction or the Manager's overall
responsibilities with respect to such Series and to other clients of the Manager
as to which the Manager exercises investment discretion.
(c) ASSOCIATED PERSONS. The Trust agrees that any entity or
person associated with the Manager which is a member of a national securities
exchange is authorized to effect any transaction on such exchange for the
account of any Series that is permitted by Section 11(a) of the Securities
Exchange Act of 1934 and Rule 11a2-2(T) thereunder, and the Trust has consented
to the retention of compensation for such transactions in accordance with Rule
11a2-2(T) (a) (2) (iv).
(d) REPORTS TO THE BOARD. The Manager will provide the Board of
Trustees of the Trust on a regular basis with economic and investment analyses
and reports and make available to the Board upon request any economic,
statistical and investment services normally available to institutional or other
customers of the Manager.
(e) DELEGATION OF AUTHORITY. Any of the foregoing duties
specified in this Paragraph 2 may be delegated by the Manager, at the Manager's
expense, to an appropriate party, subject to such approval by the Board of
Trustees and shareholders of the Series as may be required by the 1940 Act. The
Manager shall oversee the performance of delegated duties by any such party and
shall furnish the Board with quarterly evaluations concerning the performance of
delegated responsibilities by such party.
3. DUTIES AS ADMINISTRATOR. The Manager will assist in administering
the affairs of the Trust and each Series subject to the supervision of the
Trust's Board of Trustees and the following understandings:
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(a) The Manager will supervise all aspects of the operation of
the Trust and each Series except as hereinafter set forth, provided, however,
that nothing herein contained shall be deemed to relieve or deprive the Board of
Trustees of the Trust of its responsibility for and control of the conduct of
the affairs of the Trust and each Series.
(b) The Manager will investigate and, with appropriate approval
by the Trust's Board of Trustees, select necessary service companies to conduct
certain operations of the Trust and each Series, including the custodian,
transfer agent, dividend disbursing agent, accountant and attorney.
(c) The Manager will provide the Trust and each Series with such
administrative and clerical services as are deemed necessary or advisable by the
Trust's Board of Trustees, including the maintenance of certain books and
records of the Trust and each Series.
(d) The Manager will arrange, but not pay, for the periodic
preparation, updating, filing and dissemination of the Trust's Registration
Statement, proxy materials, tax returns and reports to each Series' shareholders
and the Securities and Exchange Commission and other appropriate federal or
state regulatory authorities.
(e) The Manager will provide the Trust and each Series with, or
obtain for it, adequate office space and all necessary office equipment and
services, including telephone service, heat, utilities, stationery supplies and
similar items.
(f) The Manager will make itself available to receive and will
transmit purchase and redemption requests to the Trust's transfer agent as
promptly as practicable and will make itself available to respond to shareholder
inquiries.
4. SERVICES NOT EXCLUSIVE. The services furnished by the Manager
hereunder are not to be deemed exclusive and the Manager shall be free to
furnish similar services to others so long as its services under this Agreement
are not impaired thereby. Nothing in this Agreement shall limit or restrict the
right of any director, officer or employee of the Manager, who may also be a
Trustee, officer or employee of the Trust, to engage in any other business or to
devote his or her time and attention in part to the management or other aspects
of any other business, whether of a similar nature or a dissimilar nature.
5. BOOKS AND RECORDS. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Manager hereby agrees that all records which it
maintains for the Trust are the property of the Trust and further agrees to
surrender promptly to the Trust any of such records upon the Trust's request.
The Manager further agrees to preserve for the periods prescribed by Rule 31a-2
under the 1940 Act the records required to be maintained by Rule 31a-1 under the
1940 Act.
6. EXPENSES.
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(a) EXPENSES OF THE TRUST. During the term of this Agreement,
each Series will bear all expenses not specifically assumed by the Manager
incurred in its operations and the offering of its shares. Expenses borne by
each Series will include, but not be limited to, the following (or each Series'
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proportionate share of the following): brokerage commissions relating to
securities purchased or sold by the Series or any losses incurred in connection
therewith; fees payable to and expenses incurred on behalf of the Series by the
Manager; expenses of organizing the Series; filing fees and expenses relating to
the registration and qualification of the Series' shares under federal or state
securities laws and maintaining such registrations and qualifications;
distribution fees; fees and salaries payable to the Trust's directors and
officers who are not officers or employees of the Manager or interested persons
(as defined in the 0000 Xxx) of any investment adviser or underwriter of the
Trust; taxes (including any income or franchise taxes) and governmental fees;
costs of any liability, uncollectible items of deposit and other insurance or
fidelity bonds; any costs, expenses or losses arising out of any liability of or
claim for damage or other relief asserted against the Trust or Series for
violation of any law; legal, accounting and auditing expenses, including legal
fees of special counsel for the independent directors; charges of custodians,
transfer agents and other agents; costs of preparing share certificates;
expenses of setting in type and printing prospectuses and supplements thereto
for existing shareholders, reports and statements to shareholders and proxy
materials; any extraordinary expenses (including fees and disbursements of
counsel) incurred by the Trust or Series; and fees and other expenses incurred
in connection with membership in investment company organizations.
(b) DIRECT PAYMENTS BY THE TRUST. The Trust or a Series may pay
directly any expense incurred by it in its normal operations and, if any such
payment is consented to by the Manager and acknowledged as otherwise payable by
the Manager pursuant to this Agreement, the Series may reduce the fee payable to
the Manager pursuant to paragraph 7 hereof by such amount. To the extent that
such deductions exceed the fee payable to the Manager on any monthly payment
date, such excess shall be carried forward and deducted in the same manner from
the fee payable on succeeding monthly payment dates. If the expenses borne by a
Series in any fiscal year exceed the applicable expense limitations imposed by
the securities regulations of any state in which shares are registered or
qualified for sale to the public, the Manager will waive its fee or reimburse
such Series for any excess up to the amount of the fee payable to it during that
fiscal year pursuant to paragraph 7 hereof.
7. COMPENSATION.
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(a) MUNICIPAL MONEY MARKET FUND. For the services provided and
the expenses assumed pursuant to this Agreement with respect to the Municipal
Money Market Fund, a Series of the Trust, the Trust will pay the Manager,
effective from the date of this Agreement, a fee which is computed daily and
paid monthly from that Series' assets at the following annual rates as
percentages of that Series' average daily net assets:
Advisory Fee as %
Average Daily of Average Daily
Net Assets Net Assets
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First $500 million . . . . . . . . .500%
Second $500 million . . . . . . . . .475%
Third $500 million . . . . . . . . . .450%
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Fourth $500 million . . . . . . . . .425%
Over $2 billion . . . . . . . . . . .400%
(b) OTHER SERIES. For services provided and expenses assumed
pursuant to this Agreement with respect to any Series hereafter established, the
Trust will pay to the Manager from the assets of such Series a fee in an amount
to be agreed upon in a written fee agreement executed by the Trust on behalf of
such Series and the Manager.
(c) PRORATION OF FEES. If this Agreement becomes effective or
terminates before the end of any month, the fee for the period from the
effective date to the end of the month or from the beginning of such month to
the date of termination, as the case may be, shall be prorated according to the
proportion that such period bears to the full month in which such effectiveness
or termination occurs.
8. LIMITATION OF LIABILITY OF THE MANAGER. The Manager shall not be
liable for any error of judgment or mistake of law or for any loss suffered by
the Trust or any Series in connection with the matters to which this Agreement
relate except a loss resulting from the willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or from reckless
disregard by it of its obligations and duties under this Agreement. Any person,
even though also an officer, partner, employee, or agent of the Manager, who may
be or become an officer, director, employee or agent of the Trust shall be
deemed, when rendering services to the Trust or acting in any business of the
Trust, to be rendering such services to or acting solely for the Trust and not
as an officer, partner, employee, or agent or one under the control or direction
of the Manager even though paid by it.
9. DURATION AND TERMINATION.
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(a) EFFECTIVENESS. This Agreement shall become effective upon the
date hereabove written provided that, with respect to a Series, this Agreement
shall not take effect unless it has first been approved (i) by a vote of a
majority of those Trustees of the Trust who are not parties to this Agreement or
interested persons of any such party cast in person at a meting called for the
purpose of voting on such approval, and (ii) by an affirmative vote of a
majority of the outstanding voting securities of such Series.
(b) RENEWAL. Unless sooner terminated as provided herein, this
Agreement shall continue in effect for two years from the above written date.
Thereafter, if not terminated, this Agreement shall continue automatically for
successive periods of twelve months each, provided that such continuance is
specifically approved at least annually (i) by a vote of a majority of those
Trustees of the Trust who are not parties to this Agreement or interested
persons of any such party cast in person at a meeting called for the purpose of
voting on such approval, and (ii) by the Board or with respect to any Series by
an affirmative vote of a majority of the outstanding voting securities of such
Series.
(c) TERMINATION. Notwithstanding the foregoing, with respect to
any Series, this Agreement may be terminated at any time by vote of the Board,
or by vote of a majority of the outstanding voting securities of such Series on
60 days' written notice delivered or mailed by registered mail, postage prepaid,
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to the Manager; or the Manager may at any time terminate this Agreement on 60
days' written notice delivered or mailed by registered mail, postage prepaid, to
the Trust. This Agreement will automatically and immediately terminate in the
event of its assignment. Termination of this Agreement pursuant to this Section
9 shall be without the payment of any penalty. Termination of this Agreement
with respect to a given Series shall not affect the continued validity of this
Agreement or the performance thereunder with respect to any other Series.
10. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought, and no material amendment of this Agreement
as to a given Series shall be effective until approved by vote of the holders of
a majority of the outstanding voting securities of such Series.
11. NAME OF TRUST. The Trust or any Series may use the name "Heritage"
or "Heritage Cash Trust" only for so long as this Agreement or any extension,
renewal or amendment hereof remains in effect, including any similar agreement
with any organization which shall have succeeded to the business of the Manager.
At such time as such an agreement shall no longer be in effect, the Trust and
each Series will (to the extent that it lawfully can) cease to use any name
derived from Heritage Cash Trust, Xxxxxxx, Xxxxx & Associates, Inc. or Heritage
Asset Management, Inc. or any successor organization.
12. LIMITATION OF LIABILITY OF TRUSTEES AND SHAREHOLDERS OF THE TRUST.
The Trustees of the Trust and the shareholders of any Series shall not be liable
for any obligations of any Series or the Trust under this Agreement, and the
Manager agrees that, in asserting any rights or claims under this Agreement, it
shall look only to the assets and property of the Trust in settlement of such
right or claim, and not to such Trustees or shareholders.
13. GOVERNING LAW. This Agreement shall be construed in accordance with
the laws of the State of Florida, without giving effect to the conflicts of laws
principles thereof, and in accordance with the 1940 Act, provided, however, that
Section 12 above will be construed in accordance with the laws of the
Commonwealth of Massachusetts. To the extent that the applicable laws of the
State of Florida, or the Commonwealth of Massachusetts, conflict with the
applicable provisions of the 1940 Act, the latter shall control.
14. DEFINITIONS. As used in this Agreement, the terms "majority of the
outstanding voting securities," "Interested person," and "assignment" shall have
the same meanings as such terms have in the 1940 Act.
15. MISCELLANEOUS. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
Attest: HERITAGE CASH TRUST
By: /s/ Xxxxxxxx X. Xxxxxx /s/ Xxxxxx X. Xxxxxxxx
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Attest: HERITAGE ASSET MANAGEMENT, INC.
By: /s/ Xxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxx
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