Exhibit 99.23(d)(vi)
HERITAGE SERIES TRUST
VALUE EQUITY FUND
SUBADVISORY AGREEMENT
This Subadvisory Agreement is made as of May 17, 1999, between Heritage
Asset Management, Inc., a Florida corporation (the "Manager"), and Osprey
Partners Investment Management, LLC, a New Jersey limited liability company (the
"Subadviser").
WHEREAS, the Manager has by separate contract agreed to serve as the
investment adviser to the Value Equity Fund ("Fund"), an investment portfolio of
Heritage Series Trust ("Trust"), a Massachusetts business trust registered under
the Investment Company Act of 1940, as amended ("1940 Act"), as an open-end
diversified management investment company consisting of one or more investment
series of shares, each having its own assets and investment policies;
WHEREAS, the Manager's contract with the Trust allows it to delegate
certain investment advisory services to other parties; and
WHEREAS, the Manager desires to retain the Subadviser to perform certain
investment subadvisory services for the Trust with respect to the Fund, and the
Subadviser is willing to perform such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. SERVICES TO BE RENDERED BY THE SUBADVISER TO THE TRUST.
(a) INVESTMENT PROGRAM. Subject to the control and supervision of the
Board of Trustees of the Trust and the Manager, the Subadviser shall, at
its expense, continuously furnish to the Fund an investment program for
such portion, if any, of Fund assets that is allocated to it by the Manager
from time to time. With respect to such assets, the Subadviser will make
investment decisions and will place all brokerage orders for the purchase
and sale of portfolio securities. In the performance of its duties, the
Subadviser will act in the best interests of the Fund and will comply with
(i) applicable laws and regulations, including, but not limited to, the
1940 Act, (ii) the terms of this Agreement, (iii) the stated investment
objective, policies and restrictions of the Fund, as stated in the
then-current Registration Statement of the Trust, and (iv) such other
guidelines as the Trustees or Manager may establish. The Manager shall be
responsible for providing the Subadviser with the Trust's Declaration of
Trust, as filed with the Secretary of State of Massachusetts on November 2,
1992, and all amendments thereto or restatements thereof, the Trust's
By-Laws and amendments thereto, resolutions of the Trust's Board of
Trustees authorizing the appointment of Subadviser and approving this
Agreement and current copies of the materials specified in Subsections
(a)(iii) and (iv) of this Section 1. At such times as may be reasonably
requested by the Board or the Manager, the Subadviser will provide them
with economic and investment analysis and reports, and make available to
the Board any economical, statistical, or investment services normally
available to similar investment company clients of the Subadviser.
(b) AVAILABILITY OF PERSONNEL. The Subadviser, at its expense, will
make available to the Trustees and the Manager at reasonable times its
portfolio managers and other appropriate personnel in order to review
investment policies of the Fund and to consult with the Trustees and the
Manager regarding the investment affairs of the Fund, including economic,
statistical and investment matters relevant to the Subadviser's duties
hereunder, and will provide periodic reports to the Manager relating to the
portfolio strategies it employs.
(c) SALARIES AND FACILITIES. The Subadviser, at its expense, will pay
for all salaries of personnel and facilities required for it to execute its
duties under this Agreement.
(d) COMPLIANCE REPORTS. The Subadviser, at its expense, will provide
the Manager with such compliance reports relating to its duties under this
Agreement as may be agreed upon by such parties from time to time.
(e) VALUATION. The Subadviser, at its expense, will provide the
Trust's custodian with market price information relating to the assets of
the Fund at such times as the parties hereto may agree upon from time to
time.
(f) EXECUTING PORTFOLIO TRANSACTIONS. The Subadviser will place all
orders pursuant to its investment determinations for the Fund either
directly with the issuer or through broker-dealers selected by Subadviser.
In the selection of broker-dealers and the placement of orders for the
purchase and sale of portfolio investments for the Fund, the Subadviser
shall use its best efforts to obtain for the Fund 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 Fund'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 and
dealer's spread or xxxx-up, the timing of the transaction taking into
account market prices and trends, the reputation, experience and financial
stability of the broker-dealer involved, the general execution and
operational facilities of the broker-dealer and the quality of service
rendered by the broker-dealer in other transactions. Subject to such
policies as the Board of Trustees 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 Fund
to pay a broker-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-dealer
would have charged for effecting that transaction if the Subadviser
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-dealer, viewed in terms of either that particular transaction
or the Subadviser's overall responsibilities with respect to the Trust and
to other clients of the Subadviser as to which the Subadviser exercises
investment discretion. The Trust agrees that any entity or person
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associated with the Manager or the Subadviser 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, as amended, and the Trust
consents to the retention of compensation for such transactions.
(g) EXPENSES. The Subadviser shall not be obligated to pay any
expenses of or for the Trust or the Fund not expressly assumed by the
Subadviser pursuant to this Agreement.
2. BOOKS AND RECORDS. Pursuant to Rule 31a-3 under the 1940 Act, the
Subadviser agrees that: (a) all records it maintains for the Trust are the
property of the Trust; (b) it will surrender promptly to the Trust or the
Manager any such records upon the Trust's or Manager's request; (c) it will
maintain for the Trust the records that the Trust is required to maintain
pursuant to Rule 31a-1 insofar as such records relate to the investment affairs
of the Fund; and (d) it will preserve for the periods prescribed by Rule 31a-2
under the 1940 Act the records it maintains for the Trust. Notwithstanding
subsection (b) above, the Subadvisor may maintain copies of such records to
comply with its recordkeeping obligations.
3. OTHER AGREEMENTS. The Subadviser and persons controlled by or under
common control with the Subadviser have and may have advisory, management
service or other agreements with other organizations and persons, and may have
other interests and businesses. Nothing in this Agreement is intended to
preclude such other business relationships.
4. COMPENSATION. The Manager will pay to the Subadviser as compensation for
the Subadviser's services rendered pursuant to this Agreement a subadvisory fee
as set forth in Schedule A, which schedule can be modified from time to time,
subject to the appropriate approvals required by the 1940 Act. Such fees shall
be paid by the Manager (and not by the Trust). Such fees shall be payable for
each month within 15 business days after the end of such month. If the
Subadviser shall serve for less than the whole of a month, the compensation as
specified shall be prorated.
5. AMENDMENT OF AGREEMENT. This Agreement shall not be materially amended
unless such amendment is approved by the vote, cast in person at a meeting
called for the purpose of voting on such approval, of a majority of the members
of the Board of Trustees who are not interested persons of the Trust, the
Manager or the Subadviser (the "Independent Trustees") and, to the extent
required by the 1940 Act, by the affirmative vote of a majority of the
outstanding shares of the Fund. The Subadviser agrees to notify the Manager of
any anticipated change in control of the Subadviser as soon as such change is
reasonably anticipated and, in any event, prior to such change.
6. DURATION AND TERMINATION OF THE AGREEMENT. This Agreement shall become
effective upon its execution; provided, however, that this Agreement shall not
become effective unless it has first been approved (a) by a vote of the
Independent Trustees, cast in person at a meeting called for the purpose of
voting on such approval, and (b) by an affirmative vote of a majority of the
outstanding voting shares of the Fund. This Agreement shall remain in full force
and effect continuously thereafter, except as follows:
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(a) By vote of a majority of the (i) Independent Trustees, or (ii)
outstanding voting shares of the Fund, the Trust may at any time terminate
this Agreement, without the payment of any penalty, by providing not more
than 60 days' written notice delivered or mailed by registered mail,
postage prepaid, to the Manager and the Subadviser.
(b) This Agreement will terminate automatically, without the payment
of any penalty, unless within two years after its initial effectiveness and
at least annually thereafter, the continuance of the Agreement is
specifically approved by (i) the Board of Trustees or the shareholders of
the Fund by the affirmative vote of a majority of the outstanding shares of
the Fund, and (ii) a majority of the Independent Trustees, by vote cast in
person at a meeting called for the purpose of voting on such approval. If
the continuance of this Agreement is submitted to the shareholders of the
Fund for their approval and such shareholders fail to approve such
continuance as provided herein, the Subadviser may continue to serve
hereunder in a manner consistent with the 1940 Act and the rules
thereunder.
(c) The Manager may at any time terminate this Agreement, without the
payment of any penalty, 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, without the payment of any penalty, terminate
this Agreement by not less than 90 days' written notice delivered or mailed
by registered mail, postage prepaid, to the Manager.
(d) This Agreement automatically and immediately shall terminate,
without the payment of any penalty, in the event of its assignment or if
the Investment Advisory Agreement between the Manager and the Trust shall
terminate for any reason.
(e) Any notice of termination served on the Subadviser by the Manager
shall be without prejudice to the obligation of the Subadviser to complete
transactions already initiated or acted upon with respect to the Fund. Upon
termination without reasonable notice by the Manager, the Subadviser will
be paid certain previously agreed upon expenses the Subadviser necessarily
incurs in terminating the Agreement.
Upon termination of this Agreement, the duties of the Manager delegated to
the Subadviser under this Agreement automatically shall revert to the Manager.
7. NOTIFICATION OF THE MANAGER. The Subadviser promptly shall 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 Investment Advisers Act of 1940, as amended,;
(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 or the Fund; or
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(c) any other occurrence that reasonably could have a material adverse
impact on the ability of the Subadviser to provide the services provided
for under this Agreement.
8. DEFINITIONS. For the purposes of this Agreement, the terms "vote of a
majority of the outstanding shares," "affiliated person," "control," "interested
person" and "assignment" shall have their respective meanings as defined in the
1940 Act and the rules thereunder subject, however, to such exemptions as may be
granted by the Securities and Exchange Commission ("SEC") under said Act; and
references to annual approvals by the Board of Trustees shall be construed in a
manner consistent with the 1940 Act and the rules thereunder.
9. LIABILITY OF THE SUBADVISER. In the absence of its bad faith, negligence
or disregard of its obligations and duties hereunder, the Subadviser shall not
be subject to any liability to the Manager, the Trust or their directors,
Trustees, officers or shareholders, for any act or omission in the course of, or
connected with, rendering services hereunder. However, the Subadviser shall
indemnify and hold harmless such parties from any and all claims, losses,
expenses, obligations and liabilities (including reasonable attorneys fees)
which arise or result from the Subadviser's bad faith, negligence or disregard
of its duties hereunder.
10. LIABILITY OF TRUSTEES AND SHAREHOLDERS. Any obligations of the Trust
under this Agreement are not binding upon the Trustees or the Shareholders
individually but are binding only upon the assets and property of the Fund.
11. 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. To the extent that the
applicable laws of the State of Florida conflict with the applicable provisions
of the 1940 Act, the latter shall control.
12 SEVERABILITY. 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.
13. 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. Where the
effect of a requirement of the 1940 Act reflected in any provision of this
Agreement is made less restrictive by a rule, or order of the SEC, whether of
special or general application, such provision shall be deemed to incorporate
the effect of such rule, or order.
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IN WITNESS WHEREOF, Heritage Asset Management, Inc. and Osprey Partners
Investment Management, LLC 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.
Attest: HERITAGE ASSET MANAGEMENT, INC.
By: By:
------------------------------ -------------------------------------
Name: Xxxxxxx X. Xxxx
Title: President
Attest: OSPREY PARTNERS INVESTMENT
MANAGEMENT, LLC
By: By:
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Name: Xxxxxxx X. Xxxxxxxx
Title: Managing Partner
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SCHEDULE A
TO THE
HERITAGE SERIES TRUST - VALUE EQUITY FUND
SUBADVISORY AGREEMENT
BETWEEN
HERITAGE ASSET MANAGEMENT, INC.
AND
OSPREY PARTNERS INVESTMENT MANAGEMENT, LLC
As compensation pursuant to section 4 of the Subadvisory Agreement between
Heritage Asset Management, Inc. (the "Manager") and Osprey Partners Investment
Management, LLC (the "Subadviser"), the Manager shall pay the Subadviser a
subadvisory fee, computed and paid monthly, at the following percentage rate of
the average daily net assets under management by the Subadviser:
For the Heritage Series Trust -
Value Equity Fund: .32% for the first $50 million
.30% for amounts over $50 million
Dated: May 17, 1999
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