HERITAGE FUNDS ACCOUNTING AND PRICING SERVICES AGREEMENT
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THIS AGREEMENT is made as of the 1st day of March, 1994, by and
between each of the investment companies and investment series thereof
listed on Schedule A attached hereto, as such Schedule is amended from
time to time (each a "Fund" and collectively, the "Funds"), and Heritage
Asset Management, Inc. ("Heritage"), a Florida corporation.
WHEREAS, each Fund is organized as a business trust under the
laws of the Commonwealth of Massachusetts, is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended ("1940 Act"), and is authorized to issue its shares in separate
investment series; and
WHEREAS, each Fund wishes to retain Heritage to provide certain
fund accounting and pricing services to each Fund and each of its existing
investment series, together with all other investment series established
in the future, and Heritage is willing to furnish such services.
NOW, THEREFORE, in consideration of the promises and mutual
covenants herein contained, it is agreed between the parties hereto as
follows:
1. APPOINTMENT. The Funds hereby appoint Heritage to provide
certain accounting services for each Fund on the terms set forth in this
Agreement. Heritage accepts such appointment and agrees to furnish the
services herein set forth in return for the compensation as provided in
Paragraph 11 of this Agreement.
2. DELIVERY OF DOCUMENTS. Each Fund has made available to Heritage
(or has furnished Heritage with) properly certified or authenticated
copies, with all amendments and supplements thereto, of the following
documents:
(a) Declaration of Trust of the Fund;
(b) By-Laws of the Fund;
(c) Resolution of the Fund's Board of Trustees appointing
Heritage and approving the form of this Agreement; and
(d) Resolutions of the Fund's Board of Trustees designating
certain of its officers to give instructions on behalf of the Fund to
Heritage and authorizing Heritage to rely upon Proper Instructions (as
hereinafter defined).
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3. AUTHORIZED PERSONS. Concurrently with the execution of this
Agreement, each Fund shall deliver to Heritage a certificate setting forth
the names, titles and signatures of such persons authorized to give Proper
Instructions or any other notice, request, direction, instruction,
certificate or instrument on behalf of the Fund ("Authorized Persons").
Such certificate may be accepted and reasonably relied upon by Heritage as
conclusive evidence of the facts set forth therein and shall be considered
to be in full force and effect until delivery to Heritage of a similar
certificate to the contrary. Upon delivery of a certificate that deletes
the name of a person previously authorized to give Proper Instructions,
such person shall no longer be considered an Authorized Person.
4. PROPER INSTRUCTIONS.
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(a) Unless otherwise provided in this Agreement, Heritage
shall act only upon Proper Instructions. "Proper Instructions" shall
mean: (i) a tested telex from a Fund; (ii) other communications effected
directly between electro-mechanical or electronic devices or systems,
provided that the Heritage and the Fund agree to the use of such device or
system; (iii) a written request, direction, instruction or certificate
signed or initialled on behalf of a Fund by one or more Authorized
Persons; or (iv) telephonic or other oral instructions given by any
Authorized Person that Heritage reasonably believes to have been given by
a person authorized to give such instructions. Proper Instructions may be
in the form of standing instructions.
(b) Oral instruments will be confirmed by tested telex or in
writing in the manner set forth above at the close of business on the same
day that oral instructions are given to Heritage, but the lack of such
confirmation shall in no way affect any action taken by Heritage in
reasonable reliance upon such oral instructions.
(c) Heritage may assume that any Proper Instructions received
hereunder are not in any way inconsistent with any provisions of the
applicable Fund's Declaration of Trust or By-Laws or any vote, resolution
or proceeding of the Fund's Shareholders, or of the Board of Trustees or
of any committees thereof. Heritage shall be entitled reasonably to rely
upon any Proper Instructions actually received by it pursuant to this
Agreement. The sole obligation of Heritage with respect to any follow-up
or confirmatory instruction shall be to make reasonable efforts to detect
any discrepancy between said instruction and the original Proper
Instruction and to advise the applicable Fund accordingly.
5. FUND ACCOUNTING SERVICES.
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(a) DAILY ACTIVITIES. Heritage will perform the following
accounting functions on a daily basis for each Fund:
(1) Journalize the Fund's capital share and income
and expense activities;
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(2) Verify investment buy/sell trade tickets
received from the Fund's investment adviser(s) or subadvier(s)
and transmit trades to the Fund for transmittal for proper
settlement;
(3) Maintain individual ledgers for investment
securities;
(4) Maintain historical tax lots for each security;
(5) Reconcile Share activity and outstanding Share
balances with the transfer agent;
(6) Update the cash availability throughout the day
as required by the Fund's investment adviser(s) or subadviser(s);
(7) Post to and prepare the Fund's Statement of
Assets and Liabilities and the Statement of Operations;
(8) Calculate various contractual expenses (e.g.,
advisory and custody fees);
(9) Monitor the expense accruals and notify Fund
management of any proposed adjustments;
(10) Calculate capital gains and losses;
(11) Determine the Fund's net income;
(12) Obtain security market quotations from
appropriately approved independent pricing services or, if such
quotes are unavailable, then obtain such prices from the Fund's
investment adviser(s) or subadviser(s), and in either case
calculate the market value of the Fund's investments;
(13) Value the assets of the Fund and compute the net
asset value per share of the Fund at such times and dates and in
the manner specified in the Fund's current prospectus;
(14) Provide a copy of the daily portfolio valuation
to the Fund's investment adviser(s) or subadviser(s); and
(15) Compute the Fund's yield, total return, expense
ratio, portfolio turnover rate and daily dividend factor and
disseminate as agreed upon by the parties hereto.
(b) MONTHLY ACTIVITIES. On the first business day following
the end of each month, each Fund shall cause its custodian to prepare and
forward to Heritage, within three business days following the end of each
such month, a monthly statement of cash and portfolio transactions, which
Heritage will reconcile with Heritage's accounts and records maintained
for the Fund. Within three business days following Heritage's receipt of
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the monthly statement provided by the Fund's custodian , Heritage will
provide a written report of any discrepancies to the Fund's custodian, and
will provide a written report of any unreconciled items to the Fund.
(c) OTHER ACTIVITIES. In addition to the foregoing
accounting services, Heritage, will on behalf of each Fund and its
separate investment series:
(1) Prepare quarterly broker security transactions
summaries;
(2) Supply various Fund statistical data as
reasonably requested by the Fund on an ongoing basis;
(3) Assist in the preparation of support schedules
necessary for completion of the Fund's federal, state and, if
applicable, excise tax returns;
(4) Assist in preparation of the Fund's semi-annual
reports with the Securities and Exchange Commission on Form N-
SAR;
(5) Assist in the preparation of the Fund's annual
and semi-annual Shareholder reports and any proxy statements;
(6) Assist in the preparation of registration
statements on Form N-1A and other filings relating to the
registration of the Fund's Shares;
(7) Act as liaison with the Fund's independent
certified public accountants and provide account analyses, fiscal
year summaries, and other audit related schedules, and take all
reasonable actions in the performance of its obligations under
this Agreement to assure that the necessary information is made
available to such accountants for the expression of their
opinion, as such may be required by the Fund from time to time;
and
(8) Render such other similar services as may be
reasonably requested by the Fund.
6. RECORDS. Heritage shall create and maintain all necessary books
and records in accordance with all applicable laws, rules and regulations,
including, but not limited to, records required by Section 31(a) of the
1940 Act and the rules thereunder, as the same may be amended from time to
time, pertaining to the services performed by it and not otherwise created
and maintained by another party pursuant to contract with the Funds. Such
books and records which are in the possession of the Heritage shall be the
property of the applicable Fund. The Fund, or the Fund's authorized
representatives, shall have access to such books and records at all times
during Heritage's normal business hours. Upon the reasonable request of
the Fund, copies of any such books and records shall be provided by
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Heritage to the Fund or the Fund's authorized representatives at the
Fund's expense.
7. INFORMATION TO BE PROVIDED TO HERITAGE. Each Fund shall provide,
and shall require each of its agents (including, without limitation, its
custodian and distributor) to provide, to Heritage in a timely fashion all
data and information necessary for Heritage to maintain the Fund's
accounts, books and records as required by this Agreement.
8. CONFIDENTIALITY. Heritage agrees on behalf of itself and its
employees to treat confidentially and as proprietary information of the
Funds all books, records and other information relative to the Funds and
the Funds' prior, present or potential shareholders, and not to use such
books, records and other information for any purpose other than
performance of the Heritage's responsibilities and duties hereunder,
except, after prior notification to and approval by the applicable Fund,
which approval shall not be unreasonably withheld and may not be withheld
where Heritage may be exposed to civil or criminal contempt proceedings
for failure to comply, when requested to divulge such information by duly
constituted authorities, or when so requested by the Fund.
9. RIGHT TO RECEIVE ADVICE.
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(a) ADVICE OF A FUND. If Heritage shall be in doubt as to
any action to be taken or omitted by it, it may request, and shall
promptly receive, from a Fund directions or advice, including Proper
Instructions where appropriate.
(b) ADVICE OF COUNSEL. If Heritage shall be in doubt as to
any question of law involved in any action to be taken or omitted by the
Heritage, it may request advice from qualified legal counsel of its own
choosing, who is acceptable to the Fund.
(c) PROTECTION OF HERITAGE. Heritage shall be protected in
any action that it takes or determines not to take in reasonable reliance
on any directions, advice or Proper Instructions received pursuant to
subsections (a) or (b) of this paragraph. However, nothing in this
paragraph shall be construed as imposing upon Heritage any obligation to
seek such directions, advice or Proper Instructions, or to act in
accordance with such directions, advice or Proper Instructions when
received, unless, under the terms of another provision of this Agreement,
the same is a condition to Heritage's properly taking or omitting to take
such action. Nothing in this subsection shall excuse Heritage when an
action or omission on its part constitutes willful misfeasance, willful
misconduct, gross negligence or reckless disregard by Heritage of its
duties under this Agreement.
10. COMPLIANCE WITH APPLICABLE REQUIREMENTS. In carrying out its
obligations under this Agreement, Heritage shall at all times conform with
all applicable provisions of the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, the 1940 Act, and the
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Commodity Exchange Act; any other applicable provisions of state and
federal laws, rules and regulations; and the provisions of each Fund's
current prospectus, Declaration of Trust and By-Laws, all as amended from
time to time.
11. FEES AND EXPENSES.
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(a) As compensation for the accounting services rendered by
Heritage during the terms of this Agreement, each Fund will pay Heritage a
fee equal to 110% of Heritage's cost in complying with the terms of this
Agreement including, but not limited to, Heritage's cash disbursements,
expenses and charges in connection with the Agreement (excluding salaries
and usual overhead expenses).
(b) Heritage will, on a timely basis, xxxx the Funds for any
and all amounts due it under this Agreement. The Fund will promptly pay
to Heritage the amount of such billing.
(c) Heritage in its sole discretion may from time to time
employ or associate with itself such person or persons as Heritage may
believe to be particularly suited to assist it in performing services
under this Agreement. Such person or persons may be officers and
employees who are employed by both the Fund and Heritage. The
compensation of such person or persons shall be paid by Heritage and no
obligation shall be incurred on behalf of the Fund.
12. RESPONSIBILITY OF HERITAGE. Heritage shall be under no duty to
take any action on behalf of the Funds except as specifically set forth
herein or as may be specifically agreed to by Heritage in writing.
Heritage shall not be liable for any error in judgment or mistake at law
for any loss suffered by a Fund in connection with any matters to which
this Agreement relates, but nothing herein contained shall be construed to
protect Heritage against any liability by reason of willful misfeasance,
willful misconduct, or gross negligence in the performance of its duties
or by reason of its reckless disregard of its obligations and duties under
this Agreement. Without limiting the generality of the foregoing or of
any other provision of this Agreement, Heritage in connection with its
duties under this Agreement shall not be under any duty or obligation to
inquire into and shall not be liable for or in respect of:
(a) the validity or invalidity or authority or lack thereof
of any Proper Instruction, notice or other instrument which conforms to
the applicable requirements of this Agreement, and which Heritage
reasonably believes to be genuine.
(b) delays, errors or loss of data occurring by reason of
circumstances beyond Heritage's control, including, without limitation,
acts of civil or military authority, national emergencies, labor
difficulties, fire, mechanical breakdowns, flood or catastrophe, acts of
God, insurrection, war, riots or failure of the mails, transportation,
communication or power supply; or
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(c) the accuracy of security market quotations provided to
Heritage by independent pricing services or such other service or source
designated by the Fund's investment adviser, except when a Fund or the
investment adviser has given or caused Heritage to be given instructions
to utilize a different market value.
In addition, nothing herein shall require Heritage to perform any duties
under this Agreement on any day on which Heritage or the New York Stock
Exchange, Inc. is closed for business.
13. STANDARD OF CARE; INDEMNIFICATION.
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(a) STANDARD OF CARE. Heritage shall be held to a standard
of reasonable care in carrying out the provisions of this Agreement;
provided, however, that Heritage shall be held to any higher standard of
care that would be imposed upon Heritage by any applicable law, rule or
regulation even though such standard of care was not part of the
Agreement.
(b) INDEMNIFICATION BY THE FUND. Each Fund agrees to
indemnify and hold harmless Heritage and its nominees from all losses,
damages, costs, charges, payments, expenses (including reasonable counsel
fees), and liabilities arising directly or indirectly from any action that
Heritage takes or does or omits to take to do (i) at the request or on the
direction of or in reasonable reliance on the written advice of the
applicable Fund or (ii) upon Proper Instructions, provided, that neither
Heritage nor any of its nominees shall be indemnified against any
liability to a Fund or to its Shareholders (or any expenses incident to
such liability) arising out of Heritage's own willful misfeasance, willful
misconduct, gross negligence or reckless disregard of its duties and
obligations specifically described in this Agreement or its failure to
meet the standard of care set forth in Paragraph 14(a).
(c) INDEMNIFICATION BY HERITAGE. Heritage agrees to
indemnify and hold harmless each Fund and its nominees from all losses,
damages, costs, charges, payments, expenses (including reasonable counsel
fees), and liabilities arising out of or attributed to any action or
failure or omission to act by Heritage as a result of Heritage's own
willful misfeasance, willful misconduct, gross negligence or reckless
disregard of its duties and obligations specifically described in this
Agreement.
14. INSURANCE. Heritage will at all times maintain in effect
insurance coverage , including, without limitation, Fidelity Bond and
Electronic Data coverage, at levels of coverage consistent with those
customarily maintained by other high quality investor servicing agents for
registered investment companies and with such policies as the Board of
Trustees of the Funds may from time to time adopt.
15. DURATION AND TERMINATION. This Agreement shall continue until
termination by either Heritage or any Fund on sixty days' written notice.
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In the event that in connection with any such termination a successor to
any of Heritage's duties or responsibilities hereunder is designated by a
Fund by written notice to Heritage, Heritage will cooperate fully in the
transfer of such duties and obligations, including provision for
assistance by Heritage's personnel in the establishment of books, records
and other data by such successor. The applicable Fund will reimburse
Heritage for all reasonable expenses incurred by Heritage in connection
with such transfer. The termination of this Agreement with respect to a
Fund will not cause the termination of this Agreement on behalf of the
other Funds that are a party hereto.
16. NOTICES. All notices and other communications, including Proper
Instructions (collectively referred to as "Notices" in this paragraph),
hereunder shall be in writing or by confirming telegram, cable, telex or
facsimile sending device. Notices to Heritage shall be addressed to
Heritage at X.X. Xxx 00000, Xx. Xxxxxxxxxx, Xxxxxxx 00000. Notices to a
Fund shall also be addressed to the applicable Fund at X.X. Xxx 00000, Xx.
Xxxxxxxxxx, Xxxxxxx 00000. All postage, cable, telex, or facsimile
sending device charges arising from the sending of a Notice hereunder
shall be paid by the sender.
17. FURTHER ACTIONS. Each party agrees to perform such further acts
and execute such further documents as are necessary to effectuate the
purposes hereof.
18. AMENDMENT; MODIFICATION; WAIVER. This Agreement or any part
hereof may be amended, modified or waived only by an instrument in writing
signed by both parties hereto.
19. ASSIGNMENT. Neither this Agreement nor any rights or obligations
hereunder may be assigned by either party without the written consent of
the other party.
20. COUNTERPARTS. This Agreement may be executed in two
counterparts, each of which shall be deemed an original. The Agreement
shall become effective when one or two counterparts have been signed and
delivered by each of the parties.
21. MISCELLANEOUS. This Agreement embodies the entire agreement and
understanding between the parties thereto, and supersedes all prior
agreements and understandings, relating to the subject matter hereof,
provided that the parties hereto may embody in one or more separate
documents their agreement, if any, with respect to Proper Instructions.
The captions in this Agreement are included for convenience of reference
only and in no way define or delimit any of the provissions hereof or
otherwise affect their construction or effect. This Agreement shall be
deemed to be a contract made in Florida and governed by Florida law. If
any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule regulation or otherwise, the remainder of this
Agreement shall not be affected thereby. This Agreement shall be binding
and shall inure to the benefits of the parties hereto and their respective
successors.
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22. MASSACHUSETTS BUSINESS TRUST. Notice is hereby given that
Heritage shall have no right to seek to proceed against or enforce this
Agreement against the individual shareholders of any Fund or against the
Trustees or officers of any Fund. Rather, Heritage can seek to enforce
this Agreement only against the applicable Fund itself.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their officers designated below on this day and year
first above written.
HERITAGE MUTUAL FUNDS
(as listed in Schedule A hereto)
By: /s/ Xxxxxxx X. Xxxx
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Xxxxxxx X. Xxxx
President
HERITAGE ASSET MANAGEMENT, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
Treasurer
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Schedule A
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Heritage Cash Trust (effective as of March 1, 1994):
Money Market Fund
Municipal Money Market Fund
Heritage Capital Appreciation Trust (effective as of March 1, 1994)
Heritage Income-Growth Trust (effective as of April 1, 1994)
Heritage Income Trust (effective as of April 1, 1994):
Diversified Portfolio
Institutional Government Portfolio
Limited Maturity Government Portfolio
Heritage Series Trust (effective as of May 1, 1994):
Small Cap Stock Fund
Value Equity Fund
Eagle International Equity Portfolio
Heritage Series Trust (effective as of November 16, 1995):
Growth Equity Fund
March 1, 1994, as amended on November 16, 1995
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