SUBADVISORY AGREEMENT
Subadvisory Agreement executed as of November 21, 1985 between RJ
Fund Management, Inc., a Florida corporation (the "Manager"), and The
Xxxxxx Management Company, Inc., a Delaware corporation (the
"Subadviser").
Witnesseth:
That in connection with the mutual covenants herein contained, it
is agreed as follows:
1. SERVICES TO BE RENDERED BY SUBADVISER TO THE TRUST
(a) Subject always to the control of the Trustees and Manager
of Heritage Cash Trust (the "Trust"), a Massachusetts business trust, the
Subadviser, at its expense, will furnish continuously an investment
program for the Trust. The Subadviser will make investment decisions on
behalf of the Trust and place all orders for the purchase and sale of
portfolio securities. In the performance of its duties, the Subadviser
will comply with the provisions of this Agreement and the Trust's
Declaration of Trust, Bylaws and Registration Statement as from time to
time amended, any relevant undertakings provided to State securities
regulators, and the stated investment objective, policies and restrictions
of the Trust, and will use its best efforts to safeguard and promote the
welfare of the Trust, and to comply with other policies which the Trustees
or the Manager, as the case may be, may from time to time determine, and
shall exercise the same care and diligence as are expected of the
Trustees. The Subadviser shall make its officers and employees, including
portfolio managers and research analysts, available to the Trustees and
Manager from time to time at reasonable times to review investment
policies of the Trust and to consult with the Trustees and Manager
regarding the investment affairs of the Trust and economic, statistical
and investment matters relevant to the Subadviser's duties hereunder, in
each case of the sort typically provided by the Subadviser to investment
company clients with objectives and policies comparable to those of the
Trust.
(b) The Subadviser, at its expense, will furnish (i) all
necessary investment and management facilities, including salaries of
personnel, required for it to execute its duties faithfully and (ii)
administrative facilities, including bookkeeping, clerical personnel and
equipment necessary for the efficient conduct of the investment affairs of
the Trust (excluding determination of net asset value and shareholder ac-
counting services).
(c) The Subadviser, at its expense, also will provide the
Manager with compliance reports relating to the Trust's investment
operations of the type that the Subadviser generally prepares for its
investment company clients including, but not limited to, (i) quarterly
reports relating to guidelines and standards of review for repurchase
agreements, (ii) monthly reports relating to the Trust's amortized cost
procedures (including the relationship of the dollar weighted average ma-
turity of the portfolio to market conditions, actions taken to prevent
deviations of the market-based price per Trust share and the amortized
cost price per Trust share and actions taken if the rating of a portfolio
instrument was reduced below the Trust's standard for investment) and
portfolio strategies employed, and (iii) weekly reports which monitor
investment restrictions and other guidelines of the prospectus.
(d) In the selection of brokers or dealers and the placement
of orders for the purchase and sale of portfolio investments for the
Trust, the Subadviser 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 Subadviser, 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 Subadviser 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 Subadviser 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 Subadviser 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 Subadviser's overall responsibilities with
respect to the Trust and to the Trust and to other clients of the
Subadviser as to which the Subadviser exercises investment discretion. As
provided in the Investment Advisory and Administration Agreement between
the Manager and the Trust referred to in Section 4 below, 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 the Trust which is permitted by Section
11(a) of the Securities Exchange Act of 1934, as amended (the "1934 Act"),
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).
(e) The Subadviser shall not be obligated to pay any expenses
of or for the Trust not expressly assumed by the Subadviser pursuant to
this Section 1 and 2.
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2. BOOKS AND RECORDS
In compliance with the requirements of Rule 31a-3 under the
Investment Company Act of 1940, as amended (the "1940 Act"), the
Subadviser agrees that all records it maintains for the Trust are the
property of the Trust and further agrees to surrender promptly to the
Trust or Manager any such records upon the Trust's or Manager's request.
The Subadviser further agrees to maintain for the Trust the records the
Trust is required to maintain under Rule 31a-l(b)(3), (5), (6), (7), (9)
and (10), and those records required by Rule 31a-l(b)(l) pertaining to the
purchases and sales of securities, but excluding records in connection
with the sales and redemptions of the Trust's own securities. The
Subadviser further agrees to preserve for the periods prescribed by Rule
31a-2 under the 1940 Act the records it maintains for the Trust.
3. OTHER AGREEMENTS
It is understood that any of the shareholders, Trustees, officers
and employees of the Trust may be a shareholder, director, officer or
employee of, or be otherwise interested in the Subadviser and in any
person controlled by or under common control with the Subadviser, and that
the Subadviser and any person controlled by or under common control with
the Subadviser may have an interest in the Trust. It is also understood
that the Subadviser and persons controlled by or under common control with
the Subadviser have and may have advisory, management service or other
contracts with other organizations and persons, and may have other
interests and businesses; provided, however, that neither the Subadviser
nor any of its investment adviser affiliates operating under the Xxxxxx
name shall undertake to act as investment adviser or subadviser for any
other registered investment company offered to the general public that is
not sponsored by the Subadviser or an affiliate of the Subadviser (other
than such arrangement as may exist on the date of this Subadvisory
Agreement) except upon not less than 60 days' notice in writing to the
Manager and the Trust.
4. COMPENSATION TO BE PAID BY THE MANAGER TO THE SUBADVISER
The Manager will pay to the Subadviser as compensation for the
Subadviser's services rendered and for the expenses borne by the
Subadviser pursuant to Section 1 and 2, a fee computed and paid monthly at
an annual rate equal to 45% of fees payable by the Trust to the Manager
under the Investment Advisory and Administration Agreement between the
Manager and the Trust on the first $150 million in Trust assets and 30% of
fees payable on assets over $150 million. Such fee shall be paid by the
Manager and not by the Trust without regard to any reduction in the fees
paid to the Manager under the Investment Advisory and Administration
Agreement between the Manager and the Trust as a result of any statutory
or regulatory or voluntary limitation on investment company expenses.
Such fee shall be payable for each month within 10 business days after the
end of such month. If the Subadviser shall serve for less than the whole
of a month, the foregoing compensation shall be prorated.
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5. ASSIGNMENT TERMINATES THIS AGREEMENT; AMENDMENT OF THIS AGREEMENT
This Agreement shall automatically terminate, without the payment
of any penalty, in the event of its assignment or in the event that the
Investment Advisory and Administration Agreement between the Manager and
the Trust shall have terminated for any reason; and this Agreement shall
not be amended unless such amendment be approved at a meeting by the
affirmative vote of a majority of the outstanding shares of the Trust, and
by the vote, cast in person at a meeting called for the purpose of voting
on such approval, of a majority of the Trustees of the Trust who are not
interested persons of the Trust or of the Manager or of the Subadviser.
6. EFFECTIVE PERIOD AND TERMINATION OF THIS AGREEMENT
This Agreement shall become effective upon its execution, and
shall remain in full force and effect continuously thereafter (unless
terminated automatically as set forth in Section 5) 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 and
the Subadviser; 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 Subadviser 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 Subadviser, and the
Subadviser may at any time terminate this Agreement by not less
than 90 days' written notice delivered or mailed by registered
mail, postage prepaid, to the Manager.
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Action by the Trust under (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.
Termination of this Agreement pursuant to this Section 6 shall be
without the payment of any penalty. Upon termination of this Agreement,
the duties of the Manager delegated to the Subadviser under this Agreement
automatically revert to the Manager.
7. CERTAIN INFORMATION
The Subadviser shall promptly notify the Manager in writing of
the occurrence of any of the following events:
(a) the Subadviser shall fail to be registered as an
investment adviser under the 1940 Act, as amended from time to
time, and under the laws of any jurisdiction in which the
Subadviser is required to be registered as an investment adviser
in order to perform its obligations under this Agreement;
(b) the Subadviser shall have been served or otherwise
have notice of any action, suit, proceeding, inquiry or
investigation, at law or in equity, before or by any court,
public board or body, involving the affairs of the Trust;
(c) the Subadviser shall cease to be a direct or
indirect wholly owned subsidiary of Xxxxx & XxXxxxxx Companies,
Inc.;
(d) the President or Executive Vice President of the
Subadviser or the portfolio manager of the Trust shall have
changed; or
(e) any other occurrence that might affect the ability
of the Subadviser to provide the services provided for under this
Agreement.
8. CERTAIN DEFINITIONS
For the purposes of this Agreement, the "affirmative vote of a
majority of the outstanding Shares" means the affirmative vote, at a duly
called and held meeting of shareholders, of the lesser of: (a) the holders
of 67% or more of the Shares present (in person or by proxy) and entitled
to vote at such meeting if the holders of more than 50% of the Shares
entitled to vote at such meeting are present in person or by proxy, or (b)
the holders of more than 50% of Shares entitled to vote at such meeting.
For the purposes of this Agreement, the terms "affiliated
person," "control," "interested person" and "assignment" shall have their
respective meanings defined in the 1940 Act and the rules and regulations
thereunder subject, however, to such exemptions as may be granted by the
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Securities and Exchange Commission under said Act; the term "specifically
approve at least annually" shall be construed in a manner consistent with
the 1940 Act and the rules and regulations thereunder; and the term
"brokerage and research services" shall have the meaning given in the 1934
Act and the rules and regulations thereunder.
9. NONLIABILITY OF SUBADVISER
In the absence of willful misfeasance, bad faith or gross
negligence on the part of the Subadviser, or reckless disregard of its
obligations and duties hereunder, the Subadviser shall not be subject to
any liability to the Trust, or to any shareholder of the Trust, for any
act or omission in the course of, or connected with, rendering services
hereunder.
10. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS
A copy of the Declaration of Trust of the Trust is on file with
the Secretary of the Commonwealth of Massachusetts, and notice is hereby
given that this instrument is executed on behalf of the Trustees of the
Trust as Trustees and not individually and that the obligations of this
instrument are not binding upon any of the Trustees or shareholders
individually but are binding only upon the assets and property of the
Trust.
IN WITNESS WHEREOF, RJ Fund Management, Inc. and The Xxxxxx
Management Company, Inc. have each caused this instrument to be signed in
duplicate on its behalf by its duly authorized representative, all as of
the day and year first above written.
Dated: November 21, 1985
Attest: RJ FUND MANAGEMENT, INC.
By: /s/ Xxxxxxxx X. Xxxx By: /s/ Xxxxxxx X. Xxxxx
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Attest: THE XXXXXX MANAGEMENT COMPANY, INC.
By: /s/ Secretary By: /s/ X. Xxxxx
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Executive Vice Pres.
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