INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENT
Agreement made as of November 22, 1985 between Heritage Cash
Trust, a Massachusetts business trust ("Trust"), and RJ Fund 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 RJ Fund Management,
Inc. as investment adviser and administrator of the Trust for the period
and on the terms set forth in this Agreement. RJ Fund 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
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 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 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 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 per-
son of the Manager. 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 ll(a) of the Securities Exchange
Act of 1934 and Rule lla2-2(T) thereunder, and the Trust has consented to
the retention of compensation for such transactions in accordance with
Rule lla2-2(T)(a)(2)(iv).
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 specified in this Paragraph 2 may
be delegated by the Manager, at the Manager's expense, to the Xxxxxx
Management Company, 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 these 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.
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(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,
including the Trust's custodian, transfer agent, dividend
disbursing agent, accountant and attorney.
(c) The Manager will provide the Trust with such ad-
ministrative 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
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
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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 a fee, computed daily and paid
monthly, at the following annual rates as percentages of the Trust's
average daily net assets:
Advisory Fee as %
of Average Daily
Average Daily Net Assets Net Assets
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First $500 million . . . . . . . . . . . .500%
Second $500 million . . . . . . . . . . .475%
Third $500 million . . . . . . . . . . . .450%
Fourth $500 million .425%
Over $2 billion . . . . . . . . . . . . .400%
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 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
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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 otherwise 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 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
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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 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 will (to the extent that it lawfully can) cease to use
any name derived from Heritage Cash Trust, Xxxxxxx, Xxxxx & Associates,
Inc. or RJ Fund 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
Attest: HERITAGE CASH TRUST
By: /s/ Xxxxxxx X. Ract By: /s/ Xxxxxxx X. Xxxxx
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Attest: RJ FUND MANAGEMENT, INC.
By: /s/ Xxxxxxxx X. Xxxx By: /s/ Xxxxxxx X. Xxxxxx
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