HERITAGE CAPITAL APPRECIATION TRUST
AMENDED AND RESTATED
INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENT
Agreement made as of November 22, 1985, as amended and restated on
November 19, 1996, between Heritage Capital Appreciation Trust, a Massachusetts
business trust ("Trust"), and Heritage Asset Management, Inc.
("Manager").
WHEREAS, the Trust is engaged in business as an open-end, diversified
management investment company and is so registered under the Investment Company
Act of 1940, as amended ("1940 Act"); 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 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 Heritage Asset
Management, Inc. as investment adviser and administrator of the Trust for the
period and on the terms set forth in this Agreement. Heritage Asset
Management, Inc. accepts such appointment and agrees to render the services
herein set forth for the compensation herein provided. In all matters
relating to the performance of this Agreement, the Manager will act in
conformity with the Declaration of Trust, Bylaws and current Prospectus and
Statement of Additional Information of the Trust and with the instructions
and directions of the Trust's Board of Trustees and will conform to and
comply with the requirements of the 1940 Act and all other applicable
federal or state laws and regulations.
2. DUTIES AS INVESTMENT ADVISER. Subject to the supervision of the
Trust's Board of Trustees, the Manager will provide a continuous investment
program for the Trust's portfolio, including investment research and management
with respect to all securities, investments and cash equivalents in the
portfolio. The Manager will determine from time to time what securities and
other investments will be purchased, retained or sold by the Trust. The Manager
will provide the services under this Agreement in accordance with the Trust's
investment objective, policies and restrictions as stated in the Trust's current
Prospectus and Statement of Additional Information ("Prospectus").
The Manager will place orders pursuant to its investment determinations
for the Trust 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 the Trust, the Manager shall use
its best efforts to obtain for the Trust the most favorable price and execution
available, except to the extent 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 the Trust's 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 the Trust to pay a broker or dealer 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 or dealer would have charged for effecting that transaction if the
Manager determines in good faith that such amount of commission was 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 the Trust and to other
clients of the Manager as to which the Manager exercises investment discretion.
In no instance will portfolio securities be purchased from or sold to the
Manager or any affiliated person of the Manager. The Trust agrees that any
entity or person associated with the Manager that is a member of a national
securities exchange is authorized to effect any transaction on such exchange for
the account of the Trust that is permitted by Section 11(a) of the Securities
Exchange Act of 1934 and the Trust consents to the retention of compensation for
such transactions.
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.
Any of the foregoing functions may be delegated by the Manager, at the
Manager's expense, to Eagle Asset Management, Inc. or another appropriate party,
subject to such approval by the Board of Trustees and shareholders as may be
required by the 1940 Act. The Manager shall oversee the performance of delegated
functions by any such party and shall furnish to the Trust quarterly evaluations
and analyses concerning the performance of delegated responsibilities by those
parties.
3. DUTIES AS ADMINISTRATOR. The Manager will assist in
administering the Trust's affairs subject to the supervision of the Trust's
Board of Trustees and the following understandings:
(a) The Manager will supervise all aspects of the Trust's
operation 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 Trust's affairs.
(b) The Manager will investigate and, with appropriate
approval of the Trust's Board of Trustees, select necessary service
companies to conduct certain operations of the Trust, including the
Trust's custodian, transfer agent, dividend disbursing agent,
accountant and attorney.
(c) The Manager will provide the Trust with such
administrative and clerical services as are deemed necessary or
advisable by the Trust's Board of Trustees, including the maintenance
of certain of the Trust's books and records which are not maintained by
the Trust's Custodian or Subadviser.
(d) The Manager will arrange, but not pay, for the periodic
updating of Prospectuses and supplements thereto, proxy material, tax
returns and reports to the Trust's shareholders and the Securities and
Exchange Commission.
(e) The Manager will provide the Trust 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 hold 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.
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. During the term of this Agreement, the Trust will bear all
expenses not specifically assumed by the Manager incurred in its operations and
the offering of shares. That is, the Trust will pay (a) brokerage commissions
relating to securities purchased or sold by the Trust or any losses incurred in
connection therewith; (b) fees payable to and expenses incurred on behalf of the
Trust by the Manager; (c) expenses of organizing the Trust; (d) filing fees and
expenses relating to the registration and qualification of the Trust's shares
under federal or state securities laws and maintaining such registrations and
qualifications; (e) distribution fees; (f) 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; (g) taxes (including any income or franchise taxes)
and governmental fees; (h) costs of any liability, uncollectible items of
deposit and other insurance or fidelity bonds; (i) any costs, expenses or losses
arising out of any liability of or claim for damage or other relief asserted
against the Trust for violation of any law; (j) legal, accounting and auditing
expenses, including legal fees of special counsel for the independent directors;
(k) charges of custodians, transfer agents and other agents; (1) costs of
preparing share certificates; (m) expenses of setting in type and printing
prospectuses and supplements thereto for existing shareholders, reports and
statements to shareholders and proxy material; (n) any extraordinary expenses
(including fees and disbursements of counsel) incurred by the Trust; and (o)
fees and other expenses incurred in connection with membership in investment
company organizations.
The Trust 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
Trust 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.
In addition, if the expenses borne by the Trust
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 reimburse the Trust for any excess up
to the amount of the fee payable to it during that fiscal year pursuant to
paragraph 7 hereof.
7. COMPENSATION. For the services provided and the expenses
assumed pursuant to this Agreement, effective from the date of this
Agreement, the Trust will pay the Manager an annual fee, computed daily and
paid monthly, at the rate of 0.75% of the Trust's average daily net assets.
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 in connection with the matters to which this Agreement relates 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. This Agreement shall become
effective upon its execution, and shall remain in full force and effect
continuously thereafter until terminated as follows:
(a) The Trust may at any time terminate this Agreement by
providing not more than 60 days' written notice delivered or mailed by
registered mail, postage prepaid, to the Manager; or
(b) If (i) the Trustees of the Trust or the shareholders by
the affirmative vote of a majority of the outstanding shares of the
Trust, and (ii) a majority of the Trustees of the Trust who are not
interested persons of the Trust or of the Manager or of the Subadviser,
by vote cast in person at a meeting called for the purpose of voting on
such approval, do not specifically approve at least annually the
continuance of this Agreement, then this Agreement shall automatically
terminate at the close of business on the second anniversary of its
execution, or upon the expiration of one year from the effective date
of the last such continuance, whichever is later; provided, however,
that if the continuance of this Agreement is submitted to the
shareholders of the Trust for their approval and such shareholders fail
to approve such continuance of this Agreement as provided herein, the
Manager may continue to serve hereunder in a manner consistent with the
1940 Act and the rules and regulations thereunder; or
(c) The Manager may at any time terminate this Agreement by
not less than 60 days' written notice delivered or mailed by registered
mail, postage prepaid to the Trust.
Action by the Trust under paragraph (a) above may be taken either (i)
by vote of a majority of its Trustees, or (ii) by the affirmative vote of a
majority of the outstanding shares of 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. (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.)
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 amendment of this Agreement shall be
effective until approved by vote of the holders of a majority of the Trust's
outstanding voting securities.
11. NAME OF TRUST. The Trust may use the name "Heritage" or "Heritage
Capital Appreciation 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 will
(to the extent that it lawfully can) cease to use any name derived from Heritage
Capital Appreciation Trust, Xxxxxxx, Xxxxx & Associates, Inc. or Heritage Asset
Management, Inc. or any successor organization.
12. 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.
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.
Dated: November 22, 1985, as amended and restated on November 19, 1996
Attest: HERITAGE CAPITAL APPRECIATION TRUST
By: /s/ Xxxxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxxxx
--------------------- ------------------------
Xxxxxx X. Xxxxxxxx
Attest: HERITAGE ASSET MANAGEMENT, INC.
By: /s/ Xxxxxxx X. Xxxx
By: /s/ Xxxxxxxx X. Xxxxxx -------------------
--------------------- Xxxxxxx X. Xxxx
