HERITAGE CAPITAL APPRECIATION TRUST, 485BPOS, 1995-12-28

HERITAGE CAPITAL APPRECIATION TRUST
485BPOS, 1995-12-28

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<PAGE>

As filed with the Securities and Exchange Commission on December 27, 1995
Registration No. 2-98634
--------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]

Pre-Effective Amendment No. [ ]
----
Post-Effective Amendment No. 12 [ X ]
----
and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]

Amendment No. 13 [ X ]
----
(Check appropriate box or boxes.)

HERITAGE CAPITAL APPRECIATION TRUST
(Exact name of Registrant as specified in charter)

880 Carillon Parkway
St. Petersburg, FL 33716
(Address of Principal Executive Office) (Zip Code)

Registrant's Telephone Number, including Area Code: (813) 573-3800

STEPHEN G. HILL, PRESIDENT
880 Carillon Parkway
St. Petersburg, FL 33716
(Name and Address of Agent for Service)

Copy to:
CLIFFORD J. ALEXANDER, ESQ.
Kirkpatrick & Lockhart LLP
1800 M Street, N.W.
Washington, D.C. 20036

It is proposed that this filing will become effective on January 2, 1996
pursuant to paragraph (b) of Rule 485.

Registrant has filed a declaration pursuant to Rule 24f-2 under the
Investment Company Act of 1940, as amended, on or about October 27, 1995.

Page 1 of Pages
---
Exhibit Index Appears on Page
---
<PAGE>

HERITAGE CAPITAL APPRECIATION TRUST

CONTENTS OF REGISTRATION STATEMENT

This registration document is comprised of the following:

Cover Sheet

Contents of Registration Statement

Cross Reference Sheet

Prospectus

Statement of Additional Information

Part C of Form N-1A

Signature Page

Exhibits
<PAGE>

HERITAGE CAPITAL APPRECIATION TRUST

FORM N-1A CROSS-REFERENCE SHEET

PART A ITEM NO. PROSPECTUS CAPTION
---------------- ------------------

1. Cover Page Cover Page

2. Synopsis Total Trust Expenses

3. Condensed Financial Financial Highlights;
Information Performance Information

4. General Description of Cover Page; About the Trust;
Registrant Investment Objective, Policies
and Risk Factors

5. Management of the Fund Management of the Trust

5A. Management's Discussion Inapplicable
of Fund Performance

6. Capital Stock and Other Cover Page; About the Trust;
Securities Differences Between A Shares and
C Shares; Management of the
Trust; Dividends and Other
Distributions; Taxes;
Shareholder Information

7. Purchase of Securities Net Asset Value; How to Buy
Being Offered Shares; Minimum Investment
Required/Accounts with Low
Balances; Investment Programs;
Alternative Purchase Plans; What
Class A Shares Will Cost, What
Class C Shares Will Cost;
Distribution Plans

8. Redemption or Repurchase Minimum Investment Required/
Accounts With Low Balances; How
to Redeem Shares; Receiving
Payment; Exchange Privilege

9. Pending Legal Inapplicable
Proceedings
<PAGE>

STATEMENT OF ADDITIONAL
PART B ITEM NO. INFORMATION CAPTION
--------------- ------------------------

10. Cover Page Cover Page

11. Table of Contents Table of Contents

12. General Information and General Information
History

13. Investment Objectives Investment Information -
and Policies Investment Objective and
Investment Policies; Investment
Limitations

14. Management of the Fund Management of the Trust

15. Control Persons and Inapplicable
Principal Holders of
Securities

16. Investment Advisory and Management of the Trust,
Other Services Investment Adviser and
Administrator; Subadviser;
Distribution of Shares;
Administration of the Trust

17. Brokerage Allocation Brokerage Practices

18. Capital Stock and Other General Information; Trust
Securities Information; Potential Liability

19. Purchase, Redemption and Net Asset Value; Investing in
Pricing of Securities the Trust; Redeeming Shares;
Being Offered Exchange Privilege

20. Tax Status Taxes

21. Underwriters Trust Information - Distribution
of Shares

22. Calculation of Performance Information
Performance Data

23. Financial Statements Financial Statements
<PAGE>

PART C
------

Information required to be included in Part C is set forth under
the appropriate item, so numbered in Part C of this Registration
Statement.
<PAGE>

<PAGE> 1

[HERITAGE LOGO]

Heritage Capital Appreciation Trust (the "Trust") is a mutual fund seeking
long-term capital appreciation. The Trust invests principally in those equity
securities that the Trust's portfolio manager believes are undervalued and
therefore offer above-average potential for long-term appreciation. The Trust
offers two classes of shares, Class A shares (sold subject to a front-end sales
load) and Class C shares (sold subject to a contingent deferred sales load).

This Prospectus contains information that should be read before investing
in the Trust and should be kept for future reference. A Statement of Additional
Information dated January 2, 1996 relating to the Trust has been filed with the
Securities and Exchange Commission and is incorporated by reference in this
Prospectus. A copy of the Statement of Additional Information is available free
of charge and shareholder inquiries can be made by writing to Heritage Asset
Management, Inc. or by calling (800) 421-4184.

TRUST SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY,
THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY
OTHER AGENCY.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR BY ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

[HERITAGE LOGO]
Registered Investment Advisor--SEC

880 Carillon Parkway
St. Petersburg, Florida 33716
(800) 421-4184

Prospectus Dated January 2, 1996
<PAGE> 2

TABLE OF CONTENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
GENERAL INFORMATION................................................. 1
About the Trust................................................... 1
Total Trust Expenses.............................................. 1
Financial Highlights.............................................. 3
Differences Between A Shares and C Shares......................... 4
Investment Objective, Policies and Risk Factors................... 4
Net Asset Value................................................... 5
Performance Information........................................... 6
INVESTING IN THE TRUST.............................................. 6
How to Buy Shares................................................. 6
Minimum Investment Required/Accounts With Low Balances............ 7
Investment Programs............................................... 8
Alternative Purchase Plans........................................ 9
What Class A Shares Will Cost..................................... 10
What Class C Shares Will Cost..................................... 12
How to Redeem Shares.............................................. 13
Receiving Payment................................................. 14
Exchange Privilege................................................ 15
MANAGEMENT OF THE TRUST............................................. 16
SHAREHOLDER AND ACCOUNT POLICIES.................................... 17
Dividends and Other Distributions................................. 17
Distribution Plans................................................ 18
Taxes............................................................. 18
Shareholder Information........................................... 19
</TABLE>
<PAGE> 3

GENERAL INFORMATION

ABOUT THE TRUST
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- --------------------------------------------------------------------------------

Heritage Capital Appreciation Trust (the "Trust") was established as a
Massachusetts business trust under a Declaration of Trust dated June 21, 1985.
The Trust is an open-end diversified management investment company designed for
individuals, institutions and fiduciaries whose investment objective is long-
term capital appreciation. Any dividend income will be incidental to this
objective. The Trust offers two classes of shares, Class A shares ("A shares")
and Class C shares ("C shares"). The Trust requires a minimum initial investment
of $1,000, except for certain retirement accounts and investment plans for which
lower limits may apply. See "Investing in the Trust."

TOTAL TRUST EXPENSES
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- --------------------------------------------------------------------------------

Shown below are all Class A expenses incurred by the Trust during its 1995
fiscal year. Class A annual operating expenses are shown as an annualized
percentage of fiscal 1995 average daily net assets. Because C shares were not
offered for sale prior to April 3, 1995, Class C annual operating expenses are
based on estimated expenses. Shareholder transaction expenses for both classes
are expressed as a percentage of maximum public offering price, cost per
transaction or as otherwise noted.

<TABLE>
<CAPTION>
CLASS A CLASS C
------- -------
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Sales load "charge" on purchases................. 4.75% None
Contingent deferred sales load (as a percentage
of original purchase price or redemption (declining to 0% after
proceeds, as applicable)....................... None 1.00% the first year)
Wire redemption fee.............................. $5.00 $5.00
ANNUAL TRUST OPERATING EXPENSES
Management fee (after fee waiver)................ 0.75% 0.75%
12b-1 Distribution fee........................... 0.50% 1.00%
Other expenses................................... 0.30% 0.30%
------- -------
Total Trust operating expenses (after fee
waiver)........................................ 1.55% 2.05%
====== ======
</TABLE>

The Trust's manager, Heritage Asset Management, Inc. (the "Manager"),
voluntarily will waive its fees and, if necessary, reimburse the Trust to the
extent that Class A annual operating expenses exceed 2.00% of the average daily
net assets and to the extent that Class C annual operating expenses exceed 2.50%
of the average daily net assets attributable to that class for the fiscal year
ending August 31, 1996. The Manager also has voluntarily agreed to waive 25% of
its fee on the first $100 million of average daily net assets. Absent such fee
waiver, the management fee would have been 1.00% for each class. To the extent
that the Manager waives or reimburses fees with respect to one class, it will do
so with respect to the other class on a proportionate basis. Due to the
imposition of Rule 12b-1 distribution fees, it is possible that long-term
shareholders of the Trust may pay more in total sales charges than the economic
equivalent of the maximum front-end sales load permitted by the rules of the
National Association of Securities Dealers, Inc.

1
<PAGE> 4

The impact of Trust operating expenses on earnings is illustrated in the
example below assuming a hypothetical $1,000 investment, a 5% annual rate of
return, and a redemption at the end of each period shown.

<TABLE>
<CAPTION>
1 3 5 10
YEAR YEARS YEARS YEARS
----- ------ ------ -------
<S> <C> <C> <C> <C>
Total Operating Expenses -- A shares.......... $63 $ 94 $128 $ 223
Total Operating Expenses -- C shares.......... $30 $ 62 $106 $ 232
</TABLE>

The impact of Trust operating expenses on earnings is illustrated in the
example below assuming a hypothetical $1,000 investment, a 5% annual rate of
return, and no redemption at the end of each period shown.

This is an illustration only and should not be considered a representation
of future expenses. Actual expenses and performance may be greater or less than
that shown above. The purpose of the above tables is to assist investors in
understanding the various costs and expenses that will be borne directly or
indirectly by shareholders. For a further discussion of these costs and
expenses, see "Management of the Trust" and "Distribution Plans."

2
<PAGE> 5

FINANCIAL HIGHLIGHTS
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- -------------------------------------------------------------------------------

The following table shows important financial information for an A share
and a C share of the Trust outstanding for the periods indicated, including net
investment income, net realized and unrealized gain on investments, and certain
other information. It has been derived from financial statements that have been
audited by Coopers & Lybrand L.L.P., independent accountants, whose report
thereon is included in the Statement of Additional Information ("SAI"), which
may be obtained by calling the Trust at the telephone number on the front page
of this prospectus.

<TABLE>
<CAPTION>
CLASS A
----------------------------------------------------------------------------------------------------------
FOR THE YEARS ENDED AUGUST 31, CLASS C
----------------------------------------------------------------------------------------------------------
1995* 1994 1993 1992 1991 1990 1989 1988 1987 1986+ 1995++
------ ------ ------ ------ ------ ------- ------ ------ ------ ------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET
ASSET
VALUE,
BEGINNING
OF
PERIOD... $15.30 $15.62 $13.64 $12.55 $10.62 $14.48 $10.74 $13.31 $11.52 $ 9.70 $14.18
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
INCOME
FROM
INVESTMENT
OPERATIONS:
Net
investment
income... 0.08(a) 0.02(a) 0.03(a) 0.15(a) 0.28(a) 0.29(b) 0.14(b) 0.08(a) 0.08(b) 0.07(a) (0.01)(a)
Net
realized
and
unrealized
gain
(loss)
on
investments... 1.37 1.05 3.29 1.19 1.97 (2.82) 3.77 (1.39) 1.80 1.75 1.33
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total
from
Investment
Operations... 1.45 1.07 3.32 1.34 2.25 (2.53) 3.91 (1.31) 1.88 1.82 1.32
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
LESS
DISTRIBUTIONS:
Dividends
from
net
investment
income... (0.06) (0.03) (0.07) (0.25) (0.32) (0.19) (0.06) (0.11) (0.05) -- --
Distributions
from net
realized
gains... (1.16) (1.36) (1.27) -- -- (1.14) (0.11) (1.15) (0.04) -- --
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total
Distributions... (1.22) (1.39) (1.34) (0.25) (0.32) (1.33) (0.17) (1.26) (0.09) -- --
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
NET
ASSET
VALUE,
END OF
PERIOD... $15.53 $15.30 $15.62 $13.64 $12.55 $10.62 $14.48 $10.74 $13.31 $11.52 $15.50
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
TOTAL
RETURN(%)(E)... $10.85 7.07 25.72 10.78 21.73 (18.73) 36.88 (8.75) 16.49 18.76(d) $ 9.31(d)
RATIOS(%)/SUPPLEMENTAL
DATA:
Operating
expenses
net, to
average
daily
net
assets.. 1.62(a) 1.55(a) 1.56(a) 1.66(a) 1.86(a) 1.96(b) 2.00(b) 2.00(a) 2.00(b) 2.00(a)(c) 2.17(a)(c)
Net
investment
income
to
average
daily
net
assets.. .49 .15 .24 1.09 2.38 2.54 1.19 0.62 0.74 1.40(c) (0.33)(c)
Portfolio
turnover
rate... 66 65 55 57 80 45 60 103 48 21(c) 66
Net
assets,
end
of
period
(millions)
($):... 73 74 75 65 63 58 62 43 55 40 .4
</TABLE>

- ---------------
* Liberty Investment Management was retained as an additional investment
subadviser to the Fund on February 27, 1995.
+ For the period December 12, 1985 (commencement of operations) to August 31,
1986.
++ For the period April 3, 1995 (commencement of C shares) to August 31, 1995.
(a) Excludes management fees waived by the Manager in the amount of less than
$0.04, $0.04, $0.04, $0.03, $0.01, $0.01 and of $0.02 per A share,
respectively. The operating expense ratios including such items would be
1.87%, 1.80%, 1.81%, 1.84%, 1.87%, 2.06% and 2.31% (annualized) for A share,
respectively. Excludes management fees waived by the Manager in the amount
of less than $0.04 per C share. The operating expense ratio including such
items would be 2.42% (annualized) for C shares.
(b) Includes management fees previously waived by the Manager and recovered
during the year of less than $0.01 per share.
(c) Annualized.
(d) Not annualized.
(e) Does not reflect the imposition of a sales charge.

3
<PAGE> 6

DIFFERENCES BETWEEN A SHARES AND C SHARES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

The primary difference between the A shares and the C shares lies in their
initial sales load and contingent deferred sales load ("CDSL") structures and in
their ongoing expenses, including asset-based sales charges in the form of
distribution fees. These differences are summarized below. In addition, each
class may bear differing amounts of certain class-specific expenses, such as
transfer agent fees, Securities and Exchange Commission ("SEC") registration
fees, state registration fees and expenses of administrative personnel and
services. Each class has distinct advantages and disadvantages for different
investors, and investors may choose the class that best suits their
circumstances and objectives. See "How to Buy Shares," "Alternative Purchase
Plans," "What Class A Shares Will Cost" and "What Class C Shares Will Cost."

<TABLE>
<CAPTION>
ANNUAL RULE 12B-1 FEES AS
A % OF
SALES LOAD AVERAGE DAILY NET ASSETS OTHER INFORMATION
-------------------------- -------------------------- --------------------------
<S> <C> <C> <C>
A SHARES Maximum initial sales load Service fee of 0.25%; Initial sales load waived
of 4.75% distribution fee of up to or reduced for certain
0.25% purchases
C SHARES Maximum CDSL of 1% of Service fee of 0.25%; CDSL wavied for certain
redemption proceeds; distribution fee of up to types of redemptions
declining to zero after 1 0.75%
year
</TABLE>

INVESTMENT OBJECTIVE, POLICIES AND RISK FACTORS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

The Trust's investment objective is long-term capital appreciation. The
Trust believes that this objective can best be achieved through the purchase of
equity securities that, in the opinion of Liberty Investment Management (the
"Subadviser"), represent companies with the potential for attractive long-term
growth in earnings, cash flow and total worth of the business enterprise. The
Trust prefers to purchase such securities at a price that represents a discount
to the real worth of the company's businesses or, in other words, the securities
that appear, in the opinion of the Subadviser, to be undervalued in relation to
the company's long-term growth fundamentals. Securities may be undervalued
because of many factors, including: the market does not recognize the growth
potential of the company; a stock market decline; poor economic conditions;
tax-loss selling or actual or anticipated unfavorable developments affecting the
issuer of the security. Any or all of these factors may provide buying
opportunities at attractive prices relative to a company's long-term growth
prospects. However, there can be no assurance that the Trust's investment
objective will be achieved. Trust shares will fluctuate in value as a result of
changes in the value of portfolio investments.

The Trust invests primarily in common stocks, but also may invest in
preferred stocks and securities convertible into common stock. Securities rated
in the lowest category of investment grade securities are considered to have
speculative characteristics. The Trust may purchase securities traded on
recognized securities exchanges and in the over-the-counter market. The Trust
normally will invest at least 65% of its total assets in securities that the
Subadviser believes have the potential to achieve capital appreciation. The
Trust may invest its remaining assets in foreign securities and American
Depository Receipts ("ADRs"), U.S. Government securities, repurchase agreements
or other short-term money market instruments. The Trust also may invest up to
10% of its net assets in illiquid securities and may invest in restricted
securities eligible for resale pursuant to Rule 144A under the Securities Act of
1933, as amended (the "1933 Act"). The Trust may purchase and sell a security
without regard to the length of time it will be or has been held.

4
<PAGE> 7

Repurchase agreements are transactions in which the Trust purchases
securities and simultaneously commits to resell the securities to the original
seller (a member bank of the Federal Reserve System or securities dealers who
are members of a national securities exchange or are market makers in U.S.
Government securities) at an agreed upon date and price reflecting a market rate
of interest unrelated to the coupon rate or the maturity of the purchased
securities. Although repurchase agreements carry certain risks not associated
with direct investments in securities, including possible decline in the market
value of the underlying securities and delays and costs to the Trust if the
other party to the repurchase agreement becomes bankrupt, the Trust intends to
enter into repurchase agreements only with banks and dealers in transactions
believed by the Subadviser to present minimal credit risks in accordance with
guidelines established by the Trust's Board of Trustees (the "Board of Trustees"
or the "Board").

For temporary defensive purposes during anticipated periods of general
market decline, the Trust may invest up to 100% of its assets in money market
instruments, including securities issued or guaranteed by the U.S. Government,
its agencies or instrumentalities and repurchase agreements secured thereby, as
well as bank certificates of deposit and banker's acceptances issued by banks
having net assets of a least $1 billion as of the end of their most recent
fiscal year, high grade commercial paper, and other long- and short-term debt
instruments that are rated A or higher by Standard & Poor's or Moody's Investors
Service, Inc. See Appendix A to the SAI for a description of the ratings of
money market instruments.

While the Trust may invest in foreign securities and ADRs, such investments
may not exceed 10% of the Trust's portfolio. These investments may involve
greater risks than normally are present in domestic investments. There generally
is less publicly available information about foreign companies and there may be
less governmental regulation and supervision of foreign stock exchanges, brokers
and listed companies. In addition, such companies may use different accounting
and financial standards (and certain currencies may become unavailable for
transfer from a foreign country, resulting in the Trust's possible inability to
convert proceeds realized upon the sale of portfolio securities of the affected
foreign companies immediately into U.S. currency). Before investing in foreign
securities, the Trust will consider possible political and financial instability
abroad, as well as the liquidity and volatility of foreign investments.
Fluctuations in monetary exchange rates will affect the dollar value of foreign
investments. Solely to protect against such uncertainty, the Trust may enter
into forward contracts to purchase or sell foreign currencies at a future date.

The Trust's investment objective is fundamental and may not be changed
without the vote of a majority of the outstanding voting securities of the
Trust, as defined in the Investment Company Act of 1940, as amended (the "1940
Act"). All policies of the Trust described in this prospectus may be changed by
the Board of Trustees without shareholder approval. The SAI contains more
detailed information about the Trust's investment policies and risks.

NET ASSET VALUE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

The net asset values of A shares and C shares are calculated by dividing
the value of the total assets of the Trust attributable to that class, less
liabilities attributable to that class, by the number of shares outstanding of
that class. Shares are valued as of the close of regular trading on the New York
Stock Exchange ("Exchange") each day it is open. Trust securities are stated at
market value based on the last sales price as reported by the principal
securities exchange on which the security is traded. If no sale is reported,
market value is based on the most recent quoted bid price. In the absence of a
readily available market quote, or if the Manager or the Subadviser has reason
to question the validity of market quotations it receives, securities and other
assets are valued using such methods as the Board of Trustees believe would
reflect fair value. Short-

5
<PAGE> 8

term investments that will mature in 60 days or less are valued at amortized
cost, which approximates market value. Securities that are quoted in a foreign
currency will be valued daily in U.S. dollars at the foreign currency exchange
rates prevailing at the time the Trust calculates its net asset value per share.
The per share net asset value of A shares and C shares may differ as a result of
the different daily expense accruals applicable to each class. For more
information on the calculation of net asset value, see "Net Asset Value" in the
SAI.

PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Total return data of the A shares and C shares from time to time may be
included in advertisements about the Trust. Performance information is computed
separately for A shares and C shares in accordance with the methods described
below. Because C shares bear the expense of a higher distribution fee
attributable to the deferred sales load alternative, the performance of C shares
likely will be lower than that of A shares.

Total return with respect to a class for the one-, five- and ten-year
periods or, if such periods have not elapsed, the period since the establishment
of that class through the most recent calendar quarter represents the average
annual compounded rate of return on an investment of $1,000 in that class at the
public offering price (in the case of A shares, giving effect to the maximum
initial sales load of 4.75% and, in the case of C shares, giving effect to the
deduction of any CDSL that would be payable). In addition, the Trust also may
advertise the total return in the same manner, but without taking into account,
the initial sales load or CDSL. The Trust also may advertise total return
calculated without annualizing the return and total return, may be presented for
other periods. By not annualizing the returns, the total return calculated in
this manner simply will reflect the increase in net asset value per A share and
C share over a period of time, adjusted for dividends and other distributions. A
share and C share performance may be compared with various indices.

All data is based on the Trust's past investment results and does not
predict future performance. Investment performance, which will vary, is based on
many factors, including market conditions, the composition of the Trust's
investment portfolio and the Trust's operating expenses. Investment performance
also often reflects the risks associated with the Trust's investment objective
and policies. These factors should be considered when comparing the Trust's
investment results to those of other mutual funds and other investment vehicles.
For more information on investment performance, see the SAI.

INVESTING IN THE TRUST

HOW TO BUY SHARES
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- --------------------------------------------------------------------------------

Shares of the Trust are offered continuously through the Trust's principal
underwriter, Raymond James & Associates, Inc. (the "Distributor"), and through
other participating dealers or banks that have dealer agreements with the
Distributor. The Distributor receives commissions consisting of that portion of
the sales load remaining after the dealer concession is paid to Representatives.
Such dealers may be deemed to be underwriters pursuant to the 1933 Act.

Shares of the Trust may be purchased through a registered representative of
the Distributor, a participating dealer or a participating bank
("Representative") by placing an order for Trust shares with your
Representative, completing and signing the Account Application found in the back
of this prospectus, and mailing it, along with your payment, within three
business days.

6
<PAGE> 9

The Trust offers and sells two classes of shares, A shares and C shares. A
shares may be purchased at a price equal to their net asset value per share next
determined after receipt of an order, plus a sales load imposed at the time of
purchase. C shares may be purchased at a price equal to their net asset value
per share next determined after receipt of an order. A CDSL of 1% is imposed on
C shares if you redeem those shares within one year of purchase. When you place
an order for Trust shares, you must specify which class of shares you wish to
purchase. See "Alternative Purchase Plans."

All purchase orders received by the Distributor prior to the close of
regular trading on the Exchange -- generally 4:00 p.m., Eastern time -- will be
executed at that day's offering price. Purchase orders received by your
Representative prior to the close of regular trading on the Exchange and
transmitted to the Distributor before 5:00 p.m. Eastern time on that day also
will receive that day's offering price. Otherwise, all purchase orders accepted
after the offering price is determined will be executed at the offering price
determined as of the close of regular trading on the Exchange on the next
trading day. See "What Class A Shares Will Cost" and "What Class C Shares Will
Cost."

You also may purchase shares of the Trust directly by completing and
signing the Account Application found in the back of this prospectus and mailing
it, along with your payment, to Heritage Capital Appreciation Trust, c/o
Shareholder Services, Heritage Asset Management, Inc., P.O. Box 33022, St.
Petersburg, FL 33733.

Shares may be purchased with Federal funds (a commercial bank's deposit
with the Federal Reserve Bank that can be transferred to another member bank on
the same day) sent by Federal Reserve or bank wire to State Street Bank and
Trust Company, Boston, Massachusetts, ABA #011-000-028, Account #3196-769-8.
Wire instructions should include (1) the name of the Trust, (2) the class of
shares to be purchased, (3) your account number assigned by the Trust, and (4)
your name. To open a new account with Federal funds or by wire, you must contact
the Manager or your Representative to obtain a Heritage Mutual Fund account
number. Commercial banks may elect to charge a fee for wiring funds to State
Street Bank and Trust Company. For more information on "How to Buy Shares," see
"Investing in the Trust" in the SAI.

MINIMUM INVESTMENT REQUIRED/ACCOUNTS WITH LOW BALANCES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Except as provided under "Investment Programs", the minimum initial
investment in the Trust is $1,000, and a minimum account balance of $500 must be
maintained. These minimum requirements may be waived at the discretion of the
Manager. In addition, initial investments in Individual Retirement Accounts
("IRAs") may be reduced or waived under certain circumstances. Contact the
Manager or your Representative for further information.

Due to the high cost of maintaining accounts with low balances, it is
currently the Trust's policy to redeem Trust shares in any account if the
account balance falls below the required minimum value of $500, except for
retirement accounts. The shareholder will be given 30 days' notice to bring the
account balance to the minimum required or the Trust may redeem shares in the
account and pay the proceeds to the shareholder. The Trust does not apply this
minimum account balance requirement to accounts that fall below the minimum due
to market fluctuation.

7
<PAGE> 10

INVESTMENT PROGRAMS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

A variety of automated investment options are available for the purchase of
Trust shares. These plans provide for automatic monthly investments of $50 or
more through various methods described below. You may change the amount to be
automatically invested or may discontinue this service at any time without
penalty. If you discontinue this service before reaching the required account
minimum, the account must be brought up to the minimum in order to remain open.
Shareholders desiring this service should complete the appropriate application
available from the Manager. You will receive a periodic confirmation of all
activity for your account.

AUTOMATIC INVESTMENT OPTIONS:
- ---------------------------------

1. Bank Draft Investing -- You may authorize the Manager to process a monthly
draft from your personal checking account for investment into the Trust. The
draft is returned by your bank the same way a canceled check is returned.

2. Payroll Direct Deposit -- If your employer participates in a direct deposit
program (also known as ACH Deposits) you may have all or a portion of your
payroll directed to the Trust. This will generate a purchase transaction each
time you are paid by your employer. Your employer will report to you the
amount sent from each paycheck.

3. Government Direct Deposit -- If you receive a qualifying periodic payment
from the U.S. Government or other agency that participates in Direct Deposit,
you may have all or a part of each check directed to purchase shares of the
Trust. The U.S. Government or agency will report to you all payments made.

4. Automatic Exchange -- If you own shares of another Heritage mutual fund
advised or administered by the Manager ("Heritage Mutual Fund"), you may
elect to have a preset amount redeemed from that fund and exchanged into the
corresponding class of shares of the Trust. You will receive a statement from
the other Heritage Mutual Fund confirming the redemption.

You may change or terminate any of the above options at any time.

RETIREMENT PLANS:
- -------------------

Shares of the Trust may be purchased as an investment for Heritage IRA
plans. In addition, shares may be purchased as an investment for self-directed
IRAs, defined contribution plans, Simplified Employee Pension Plans ("SEPs") and
other retirement plans.

HERITAGE IRA. Individuals who earn compensation and who have not reached
age 70 1/2 before the close of the year generally may establish a Heritage IRA.
You may make limited contributions to a Heritage IRA through the purchase of
shares of the Trust and/or other Heritage Mutual Funds. The Internal Revenue
Code of 1986, as amended (the "Code"), limits the deductibility of IRA
contributions to taxpayers who are not active participants (and whose spouses
are not active participants) in employer-provided retirement plans or who have
adjusted gross income below certain levels. Nevertheless, the Code permits other
individuals to make nondeductible IRA contributions up to $2,000 per year (or
$2,250, if such contributions also are made for a nonworking spouse and a joint
return is filed). A Heritage IRA also may be used for certain "rollovers" from
qualified benefit plans and from Section 403(b) annuity plans. For more detailed
information on the Heritage IRA, please contact the Manager.

8
<PAGE> 11

Trust shares may be used as the investment medium for qualified retirement
plans (defined benefit or defined contribution plans established by
corporations, partnerships or sole proprietorships). Contributions to qualified
plans may be made (within certain limits) on behalf of the employees, including
owner-employees, of the sponsoring entity.

OTHER RETIREMENT PLANS. Multiple participant payroll deduction retirement
plans also may purchase A shares of any Heritage Mutual Fund at a reduced sales
charge on a monthly basis during the 13-month period following such a plan's
initial purchase. The sales load applicable to such initial purchase of A shares
will be that normally applicable under the schedule of sales loads set forth in
this prospectus to an investment 13 times larger than such initial purchase. The
sales load applicable to each succeeding monthly purchase of A shares will be
that normally applicable, under such schedule, to an investment equal to the sum
of (1) the total purchase previously made during the 13-month period and (2) the
current month's purchase multiplied by the number of months (including the
current month) remaining in the 13-month period. Sales loads previously paid
during such period will not be adjusted retroactively on the basis of later
purchases. Multiple participant payroll deduction retirement plans may purchase
C shares at any time.

ALTERNATIVE PURCHASE PLANS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

The alternative purchase plans offered by the Trust enable you to choose
the class of shares that you believe will be most beneficial given the amount of
your intended purchase, the length of time you expect to hold the shares and
other circumstances. You should consider whether, during the anticipated length
of your intended investment in the Trust, the accumulated continuing
distribution and service fees plus the CDSL on C shares would exceed the initial
sales load plus accumulated service fees on A shares purchased at the same time.
Another factor to consider is whether the potentially higher yield of A shares
due to lower ongoing charges will offset the initial sales load paid on such
shares. Representatives may receive different compensation for sales of A shares
than sales of C shares.

If you purchase sufficient shares to qualify for a reduced sales load, you
may prefer to purchase A shares because similar reductions are not available on
the C shares. For example, if you intend to invest more than $1,000,000 in
shares of the Trust, you should purchase A shares. Moreover, all A shares are
subject to a lower 12b-1 fee and, accordingly, are expected to pay
correspondingly higher dividends on a per share basis. If your purchase will not
qualify for a reduced sales load, you still may wish to purchase A shares if you
expect to hold your shares for an extended period of time because, depending on
the number of years you hold the investment, the continuing distribution and
service fees on C shares eventually would exceed the initial sales load plus the
continuing service fee on A shares during the life of your investment. However,
because initial sales loads are deducted at the time of purchase, not all of the
purchase payment for A shares is invested initially.

You might determine that it would be more advantageous to purchase C shares
in order to have all of your purchase payment invested initially. However, your
investment would remain subject to continuing distribution and service fees and,
for a one year period, be subject to a CDSL. For example, based on current fees
and expenses for the Trust and the maximum A sales load, you would have to hold
A shares approximately eight years before the accumulated distribution and
service fees on the C shares would exceed the initial sales load plus the
accumulated service fees on the A shares.

9
<PAGE> 12

WHAT CLASS A SHARES WILL COST
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

A shares are sold on each day on which the Exchange is open. A shares are
sold at their next determined net asset value plus a sales load as described
below.

<TABLE>
<CAPTION>
SALES LOAD AS A DEALER
PERCENTAGE OF CONCESSION
------------------------------ AS PERCENTAGE
NET AMOUNT OF
AMOUNT OF OFFERING INVESTED OFFERING
PURCHASE PRICE (NET ASSET VALUE) PRICE(1)
------------------------------- -------- ----------------- ---------------
<S> <C> <C> <C>
Less than $25,000.............. 4.75% 4.99% 4.25%
$25,000-$49,999................ 4.25% 4.44% 3.75%
$50,000-$99,999................ 3.75% 3.90% 3.25%
$100,000-$249,999.............. 3.25% 3.36% 2.75%
$250,000-$499,999.............. 2.50% 2.56% 2.00%
$500,000-$999,999.............. 1.75% 1.78% 1.25%
$1,000,000 and over............ 1.00% 1.01% 0.75%
</TABLE>

(1) During certain periods, the Distributor may pay 100% of the sales load to
participating dealers. Otherwise, it will pay the Dealer Concession shown
above.

A shares may be sold at net asset value without any sales load to the
Manager and the Subadviser, current and retired officers and Trustees of the
Trust; directors, officers and full-time employees of the Manager, Subadviser of
any Heritage Mutual Fund, Distributor and their affiliates; registered
representatives of broker-dealers that are parties to dealer agreements with the
Distributor (or financial institutions that have arrangements with such
broker-dealers); directors, officers and full-time employees of banks that are
parties to agency agreements with the Distributor; and all such persons'
immediate relatives and their beneficial accounts. In addition, the American
Psychiatric Association (the "APA Group") has entered into an agreement with the
Distributor that allows its members to purchase A shares at a sales load equal
to two-thirds of the percentages in the above table. The Dealer Concession also
will be adjusted in a like manner. Members of the APA Group also are eligible to
purchase A shares at net asset value in amounts equal to the value of shares
redeemed from other mutual funds that were purchased under reduced sales load
programs available to their organization. A shares also may be purchased without
sales loads by investors who participate in certain broker-dealer wrap fee
investment programs.

A shares also may be purchased at net asset value by trust companies and
bank trust departments for funds over which they exercise exclusive
discretionary authority and are held in a fiduciary, agency, advisory, custodial
or similar capacity. Such purchases are subject to minimum requirements with
respect to amount of purchase. Currently, the minimum purchase required is
$1,000,000, which may be invested over a period of 13 months. The minimum may be
changed from time to time by the Distributor. The minimum may be aggregated
between A shares of the Trust and A shares of any other Heritage Mutual Fund
that would be subject to a sales load. Cities, counties, states or
instrumentalities, and their departments, authorities or agencies, are able to
purchase A shares of the Trust at net asset value as long as certain conditions
are met.

HERITAGE NET ASSET VALUE ("NAV") TRANSFER PROGRAM
- -----------------------------------------------------------

A shares of the Trust may be sold at net asset value without any sales load
under the Manager's NAV Transfer Program. To qualify for the NAV Transfer
Program, you must provide adequate proof that you recently redeemed shares from
a load or no-load mutual fund other than a Heritage Mutual Fund. To provide
adequate proof you must complete a qualification form and provide a statement
showing the value liquidated

10
<PAGE> 13

from the other mutual fund within time parameters set by the Manager. In
addition, shares of the other fund must have been liquidated no more than 90
days prior to the beginning of the promotion period and not after the period
ends. The Manager may pay Representatives a one-time fee of up to 0.25% for all
trades meeting these requirements. The Manager reserves the right to recover
these fees if A shares are redeemed within 90 days of purchase.

COMBINED PURCHASE PRIVILEGE (RIGHT OF ACCUMULATION)
- -----------------------------------------------------------

You may qualify for the sales load reductions indicated in the above sales
load schedule by combining purchases of A shares into a single "purchase" if the
resulting "purchase" totals at least $25,000. The term "purchase" refers to a
single purchase by an individual, or to concurrent purchases that, in the
aggregate, are at least equal to the prescribed amounts, by an individual, his
spouse and their children under the age of 21 years purchasing A shares for his
or their own account; a single purchase by a trustee or other fiduciary
purchasing A shares for a single trust, estate or single fiduciary account
although more than one beneficiary is involved; or a single purchase for the
employee benefit plans of a single employer. A "purchase" also may include A
shares purchased at the same time through a single selected dealer of any other
Heritage Mutual Fund that distributes its shares subject to a sales load. To
qualify for the Combined Purchase Privilege on a purchase through a selected
dealer, the investor or selected dealer must provide the Distributor with
sufficient information to verify that each purchase qualifies for the privilege
or discount.

STATEMENT OF INTENTION

You also may obtain the reduced sales loads shown under "What Class A
Shares Will Cost" by means of a written Statement of Intention, which expresses
your intention to invest not less than $25,000 within a period of 13 months in A
shares of the Trust or A shares of any other Heritage Mutual Fund subject to a
sales load ("Statement of Intention").

Investors qualifying for the Combined Purchase Privilege described above
may purchase A shares of the Heritage Mutual Funds under a single Statement of
Intention. For example, if, at the time an investor signs a Statement of
Intention to invest at least $25,000 in A shares of the Trust, the investor and
the investor's spouse each purchase A shares worth $5,000 (for a total of
$10,000), then it will be necessary only to invest a total of $15,000 during the
following 13 months in A shares of the Trust or any other Heritage Mutual Fund
subject to a sales load to qualify for the reduced sales loads on the total
amount being invested.

The Statement of Intention is not a binding obligation upon the investor to
purchase the full amount indicated. The minimum initial investment under a
Statement of Intention is 5% of such amount. If you would like to enter into a
Statement of Intention in conjunction with your initial investment in A shares
of the Trust, please complete the appropriate portion of the Account Application
at the back of this prospectus. Current Trust shareholders desiring to do so can
obtain a Statement of Intention by contacting the Manager or the Distributor at
the address or telephone number listed on the cover of this prospectus, or from
their Representative.

REINSTATEMENT PRIVILEGE
- -------------------------

A shareholder who has redeemed any or all of his A shares of the Trust may
reinvest all or any portion of the redemption proceeds in A shares at net asset
value without any sales load, provided that such reinvestment is made within 90
calendar days after the redemption date. A shareholder who has redeemed any or
all of his

11
<PAGE> 14

C shares of the Trust and has paid a CDSL on those shares or has held those
shares long enough so that the CDSL no longer applies, may reinvest all or any
portion of the redemption proceeds in C shares at net asset value without paying
a CDSL on future redemptions of those shares, provided that such reinvestment is
made within 90 calendar days after the redemption date. A reinstatement pursuant
to this privilege will not cancel the redemption transaction; therefore, (1) any
gain realized on the transaction will be recognized for Federal income tax
purposes, while (2) any loss realized will not be recognized for those purposes
to the extent that the redemption proceeds are reinvested in shares of the
Trust. See "Taxes." The reinstatement privilege may be utilized by a shareholder
only once, irrespective of the number of shares redeemed, except that the
privilege may be utilized without limitation in connection with transactions
whose sole purpose is to transfer a shareholder's interest in the Trust to his
defined contribution plan, IRA or SEP. Investors must notify the Fund if they
intend to exercise the reinstatement privilege.

For more information on "What Class A Shares Will Cost" and a further
explanation of instances in which the sales load will be waived or reduced, see
"Investing in the Trust" in the SAI.

WHAT CLASS C SHARES WILL COST
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

A CDSL of 1% is imposed on C shares if, within one year of purchase, you
redeem an amount that causes the current value of your account to fall below the
total dollar amount of C shares purchased subject to the CDSL. The CDSL will not
be imposed on the redemption of C shares acquired as dividends or other
distributions, or on any increase in the net asset value of the redeemed C
shares above the original purchase price. Thus, the CDSL will be imposed on the
lower of net asset value or purchase price.

Redemptions will be processed in a manner intended to minimize the amount
of redemption that will be subject to the CDSL. When calculating the CDSL, it
will be assumed that the redemption is made first of C shares acquired as
dividends, second of C shares that have been held for over one year, and finally
of C shares held for less than one year on a first-in first-out basis.

For example, assume you purchase 100 C shares at $10 per share (for a total
cost of $1,000) and, during the year you purchase such shares, the net asset
value increases to $12 per share and you acquire 10 additional shares as
dividends. If you redeem 50 shares (or $600) within the first year of purchase,
10 shares would not be subject to the CDSL because redemptions are made first of
shares acquired as dividends. With respect to the remaining shares, the CDSL is
applied only to the original cost of $10 per share and not to the higher net
asset value of $12 per share. Therefore, only 40 of the 50 shares (or $400)
being redeemed would be subject to a CDSL at a rate of 1%.

WAIVER OF THE CONTINGENT DEFERRED SALES LOAD. The CDSL currently is waived
for (1) any partial or complete redemption in connection with a distribution
without penalty under Section 72(t) of the Code from a qualified retirement
plan, including a Keogh or IRA upon attaining age 70 1/2; (2) any redemption
resulting from a tax-free return of an excess contribution to a qualified
employer retirement plan or an IRA; (3) any partial or complete redemption
following death or disability (as defined in Section 72(m)(7) of the Code) of a
shareholder (including one who owns the shares as joint tenant with his spouse)
from an account in which the deceased or disabled is named, provided the
redemption is requested within one year of the death or initial determination of
disability; (4) certain periodic redemptions under the Systematic Withdrawal
Plan from an account meeting certain minimum balance requirements, in amounts
representing certain maximums established from time to time by the Distributor
(currently a maximum of 12% annually of the account balance at the beginning of
the Systematic Withdrawal Plan); or (5) involuntary redemptions by the Trust of

12
<PAGE> 15

C shares in shareholder accounts that do not comply with the minimum balance
requirements. The Distributor may require proof of documentation prior to waiver
of the CDSL described in sections (1) through (4) above, including distribution
letters, certification by plan administrators, applicable tax forms or death or
physicians certificates.

For more information about C shares, see "Reinstatement Privilege" and
"Exchange Privilege."

HOW TO REDEEM SHARES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Redemptions of Trust shares can be made by:

CONTACTING YOUR REPRESENTATIVE. Your Representative will transmit an order
to the Trust for redemption and may charge you a fee for this service.

TELEPHONE REQUEST. You may redeem shares by placing a telephone request to
the Trust (800-421-4184) prior to the close of regular trading on the Exchange.
If you do not wish to have telephone exchange/redemption privileges, you should
so elect by completing the appropriate section of the Account Application. The
Trust, Manager, Distributor and their Trustees, directors, officers and
employees are not liable for any loss arising out of telephone instructions they
reasonably believe are authentic. These parties will employ reasonable
procedures to confirm that telephone instructions are authentic. To the extent
that the Trust, Manager, Distributor and their Trustees, directors, officers and
employees do not follow reasonable procedures, some or all of them may be liable
for losses due to unauthorized or fraudulent transactions. For more information
on these procedures, see "Redeeming Shares - Telephone Transactions" in the SAI.
You may elect to have the funds wired to the bank account specified on the
Account Application. Funds normally will be sent the next business day, and you
will be charged a wire fee by the Manager (currently $5.00). For redemptions of
less than $25,000, you may request that the check be mailed to your address of
record, providing that such address has not been changed in the past 60 days.
For your protection, all other redemption checks will be transferred to the bank
account specified on the Account Application.

WRITTEN REQUEST. Trust shares may be redeemed by sending a written request
for redemption to "Heritage Capital Appreciation Trust, c/o Shareholder
Services, Heritage Asset Management, Inc., P.O. Box 33022, St. Petersburg, FL
33733". Signature guarantees will be required on the following types of
requests: redemptions from any account that has had an address change in the
past 60 days, redemptions greater than $25,000, redemptions that are sent to an
address other than the address of record and exchanges or transfers into other
Heritage accounts that have different titles. The Manager will transmit an order
to the Trust for redemption.

SYSTEMATIC WITHDRAWAL PLAN. Withdrawal plans are available that provide
for regular periodic withdrawals of $50 or more on a monthly, quarterly,
semiannual or annual basis. Under these plans, sufficient shares of the Trust
are redeemed to provide the amount of the periodic withdrawal payment. The
purchase of A shares while participating in the Systematic Withdrawal Plan
ordinarily will be disadvantageous to you because you will be paying a sales
load on the purchase of those shares at the same time that you are redeeming A
shares upon which you may already have paid a sales load. Therefore, the Trust
will not knowingly permit the purchase of A shares through an Automatic
Investment Plan if you are at the same time making systematic withdrawals of A
shares. The Manager reserves the right to cancel systematic withdrawals if
insufficient shares are available for two or more consecutive months.

13
<PAGE> 16

Please contact the Manager or your Representative for further information
or see "Redeeming Shares" in the SAI.

RECEIVING PAYMENT
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

If a request for redemption is received by the Trust in good order (as
described below) before the close of regular trading on the Exchange, the shares
will be redeemed at the net asset value per share determined at the close of
regular trading on the Exchange on that day, less any applicable CDSL for C
shares. Requests for redemption received by the Trust after the close of regular
trading on the Exchange will be executed at the net asset value determined at
the close of regular trading on the Exchange on the next trading day, less any
applicable CDSL for C shares.

Payment for shares redeemed by the Trust normally will be made on the
business day after redemption was made. If the shares to be redeemed recently
have been purchased by personal check, the Trust may delay mailing a redemption
check until the purchase check has cleared, which may take up to seven days.
This delay can be avoided by wiring funds for purchases. The proceeds of a
redemption may be more or less than the original cost of Trust shares.

A redemption request will be considered to be received in "good order" if:

- the number or amount of shares and the class of shares to be redeemed
and shareholder account number have been indicated;

- any written request is signed by the shareholder and by all co-owners
of the account with exactly the same name or names used in establishing
the account;

- any written request is accompanied by certificates representing the
shares that have been issued, if any, and the certificates have been
endorsed for transfer exactly as the name or names appear on the
certificates or an accompanying stock power has been attached; and

- the signatures on any written redemption request of $25,000 or more and
on any certificates for shares (or an accompanying stock power) have
been guaranteed by a national bank, a state bank that is insured by the
Federal Deposit Insurance Corporation, a trust company, or by any
member firm of the New York, American, Boston, Chicago, Pacific or
Philadelphia Stock Exchanges. Signature guarantees also will be
accepted from savings banks and certain other financial institutions
that are deemed acceptable by the Manager, as transfer agent, under its
current signature guarantee program.

The Trust has the right to suspend redemption or postpone payment at times
when the Exchange is closed (other than customary weekend or holiday closings)
or during periods of emergency or other periods as permitted by the SEC. In the
case of any such suspension you may either withdraw your request for redemption
or receive payment based upon the net asset value next determined after the
suspension is lifted. If a redemption check remains outstanding after six
months, the Manager reserves the right to redeposit those funds into your
account. For more information on receiving payment, see "Redeeming
Shares - Receiving Payment" in the SAI.

14
<PAGE> 17

EXCHANGE PRIVILEGE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

If you have held A shares or C shares for at least 30 days, you may
exchange some or all of your shares for shares of the same class of any other
Heritage Mutual Fund. All exchanges will be based on the respective net asset
values of the Heritage Mutual Funds involved. All exchanges are subject to the
minimum investment requirements and any other applicable terms set forth in the
prospectus for the Heritage Mutual Fund whose shares are being acquired.
Exchanges involving the redemption of shares recently purchased by check will be
permitted only after the Heritage Mutual Fund whose shares have been tendered
for exchange is reasonably assured that the check has cleared, normally seven
calendar days following the purchase date. Exchanges of shares of Heritage
Mutual Funds generally will result in the realization of a taxable gain or loss
for Federal income tax purposes.

For purposes of calculating the commencement of the one-year CDSL holding
period for shares exchanged from the Fund to the C shares of any other Heritage
Mutual Fund, except Heritage Cash Trust-Money Market Fund ("Money Market Fund"),
the original purchase date of those shares exchanged will be used. Any time
period that the exchanged shares were held in the Money Market Fund will not be
included in this calculation.

If you exchange A shares or C shares for corresponding shares of the Money
Market Fund, you may, at any time thereafter, exchange such shares for the
corresponding class of shares of any other Heritage Mutual Fund. Because the
Money Market Fund is a no-load mutual fund, if you exchange shares of that fund
acquired by purchase (rather than exchange) for shares of another Heritage
Mutual Fund, you will be subject to the sales load, if any, that would be
applicable to a purchase of that Heritage Mutual Fund. In addition, if you
exchange C shares of the Trust for corresponding shares of the Money Market
Fund, the period during which an investment is held in shares of the Money
Market Fund will not count for purposes of calculating the one-year CDSL holding
period for such shares. As a result, if you redeem C shares of the Money Market
Fund before the expiration of the one-year CDSL holding period, you will be
subject to the applicable CDSL. A shares of the Trust may be exchanged for A
shares of the Heritage Cash Trust -- Municipal Money Market Fund, which is the
only class of shares offered by that fund. Because the Heritage Cash
Trust -- Municipal Money Market Fund is a no-load fund, if you exchange shares
of that fund acquired by purchase (rather than exchange) for shares of another
Heritage Mutual Fund, you also will be subject to the sales load, if any, that
would be applicable to a purchase of that Heritage Mutual Fund. C shares are not
eligible for exchange into the Heritage Cash Trust -- Municipal Money Market
Fund.

Shares acquired pursuant to a telephone request for exchange will be held
under the same account registration as the shares redeemed through such an
exchange. For a discussion of limitation of liability of certain entities, see
"How to Redeem Shares -- Telephone Request."

Telephone exchanges can be effected by calling the Manager at 800-421-4184
or by calling your Representative. In the event that you or your Representative
are unable to reach the Manager by telephone, an exchange can be effected by
sending a telegram to Heritage Asset Management, Inc., attention: Shareholder
Services. Due to the volume of calls or other unusual circumstances, telephone
exchanges may be difficult to implement during certain time periods.

The exchange privilege is available only in states where shares of the
Heritage Mutual Fund being acquired may be legally sold. Each Heritage Mutual
Fund reserves the right to reject any order to acquire its shares through
exchange or otherwise to restrict or terminate the exchange privilege at any
time. In addition, each Heritage Mutual Fund may terminate this exchange
privilege upon 60 days' notice. For further

15
<PAGE> 18

information on this exchange privilege, contact the Manager or your
Representative and see "Exchange Privilege" in the SAI.

MANAGEMENT OF THE TRUST

BOARD OF TRUSTEES

The business and affairs of the Trust are managed by or under the direction
of its Board of Trustees. The Trustees are responsible for managing the Trust's
business affairs and for exercising all the Trust's powers except those reserved
to the shareholders. A Trustee may be removed by the other Trustees or by a
two-thirds vote of the outstanding Trust shares.

INVESTMENT ADVISER, FUND ACCOUNTANT, ADMINISTRATOR AND TRANSFER AGENT

Heritage Asset Management, Inc. is the Trust's investment adviser, fund
accountant, administrator and transfer agent. The Manager is responsible for
reviewing and establishing investment policies for the Trust and determining the
allocation of assets to the subadvisers as well as administering the Trust's
noninvestment affairs. The Manager is a wholly-owned subsidiary of Raymond James
Financial, Inc., which, together with its subsidiaries, provides a wide range of
financial services to retail and institutional clients. The Manager manages,
supervises and conducts the business and administrative affairs of the Trust and
the other Heritage Mutual Funds with net assets totaling approximately $2.0
billion as of October 31, 1995. The Manager's annual investment advisory and
administration fee paid monthly by the Trust to the Manager is based on the
Trust's average daily net assets shown on the chart below. The Trust pays the
Manager directly for fund accounting and transfer agent services.

<TABLE>
<CAPTION>
ADVISORY FEE
AS % OF AVERAGE
AVERAGE DAILY DAILY NET
NET ASSETS ASSETS
- ------------------ ---------------
<S> <C>
First $100 million......................... 1.00%
Over $100 million.......................... .75%
</TABLE>

This fee is higher than that charged for most other mutual funds with a
similar investment objective. The Manager has voluntarily agreed to waive 25% of
its fee on the first $100 million of the Trust's average daily net assets. The
advisory fee may be further reduced pursuant to regulations in various states
where Trust shares are qualified for sale which impose limitations on the annual
expense ratio of the Trust. The Manager reserves the right to discontinue any
voluntary waiver of its fees or reimbursements to the Trust in the future. The
Manager also may recover advisory fees waived in the two previous years if the
recovery does not cause the Trust to exceed applicable state expense
limitations. It currently is not anticipated that the Manager will recover these
fees.

SUBADVISERS

The Manager has entered into an agreement with Liberty Investment
Management, 2502 Rocky Point Drive, Tampa, Florida 33607, to provide investment
advice and portfolio management services, including placement of brokerage
orders, on behalf of the Trust. For these services, the Manager pays the
Subadviser an annual fee of .25% of the Trust's average daily net assets,
without regard to any reduction in fees actually paid to the Manager as a result
of state expense limitations or other voluntary fee waivers by the Manager. The
Subadviser provides investment advisory services to institutional clients,
including employee benefit plans,

16
<PAGE> 19

endowments, foundations, other tax-exemption organizations and registered
investment companies; the net assets for these institutional clients totaled
approximately $ billion as of , 1995. The Subadviser may use the
Distributor as broker for agency transactions in listed and over-the-counter
securities at commission rates and under circumstances consistent with the
policy of best price and execution. See "Brokerage Transactions" in the SAI.

The Manager also has entered into a subadvisory agreement with Eagle Asset
Management, Inc. ("Eagle"). However, the Manager has chosen not to allocate
assets to Eagle at this time.

PORTFOLIO MANAGEMENT

Herbert E. Ehlers serves as portfolio manager of the Trust. Mr. Ehlers has
been responsible for the day-to-day management of the Trust's investment
portfolio, subject to the general oversight of the Manager and the Board, since
the Trust's inception in December 1985. Mr. Ehlers has been the Chief Executive
Officer and Chief Investment Officer of the Subadviser since January 1, 1995
(commencement of operations). From 1984 to December 31, 1994, Mr. Ehlers was
President, Chief Investment Officer and a director of Eagle.

SHAREHOLDER AND ACCOUNT POLICIES

DIVIDENDS AND OTHER DISTRIBUTIONS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Dividends from net investment income are declared and paid annually. The
Trust distributes to shareholders along with its annual dividend substantially
all net realized capital gains on portfolio securities and net realized gains
from foreign currency transactions, if any, after the end of the year in which
the gains are realized. Dividends and other distributions on shares held in
retirement plans and by shareholders maintaining a Systematic Withdrawal Plan
generally are declared and paid in additional Trust shares. Other shareholders
may elect to:

- receive both dividends and other distributions in additional Trust
shares;

- receive dividends in cash and other distributions in additional Trust
shares;

- receive both dividends and other distributions in cash; or

- receive both dividends and other distributions in cash for investment in
another Heritage Mutual Fund.

If you select none of these options, the first option will apply. In any
case when you receive a dividend or a other distribution in additional Trust
shares, your account will be credited with shares valued at the net asset value
of the shares determined at the close of regular trading on the Exchange on the
day following the record date for the dividend or capital gain distribution.
Distribution options can be changed at any time by notifying the Manager in
writing.

Dividends paid by the Trust with respect to its A shares and C shares are
calculated in the same manner and at the same time and will be in the same
amount relative to the aggregate net asset value of the shares in each class,
except that dividends on C shares may be lower than dividends on A shares
primarily as a result of the higher distribution fee and class-specific expenses
applicable to C shares.

17
<PAGE> 20

DISTRIBUTION PLANS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

As compensation for services rendered and expenses borne by the Distributor
in connection with the distribution of A shares and in connection with personal
services rendered to Class A shareholders and the maintenance of Class A
accounts, the Trust may pay the Distributor a service fee of up to 0.25% and a
distribution fee of up to 0.25% of the Trust's average daily net assets
attributable to A shares. The Trust currently pays the Distributor a service fee
of up to 0.25% on A shares purchased prior to April 3, 1995. This fee represents
compensation for the maintenance of Class A accounts. This fee is computed daily
and paid monthly.

As compensation for services rendered and expenses borne by the Distributor
in connection with the distribution of C shares and in connection with personal
services rendered to Class C shareholders and the maintenance of Class C
accounts, the Trust pays the Distributor a service fee of up to 0.25% and a
distribution fee of up to 0.75% of the Trust's average daily net assets
attributable to C shares. This fee is computed daily and paid monthly.

The above-referenced fees paid to the Distributor are made under
Distribution Plans adopted pursuant to Rule 12b-1 under the 1940 Act. These
Plans authorize the Distributor to spend such fees on any activities or expenses
intended to result in the sale of A shares and C shares, including, but not
limited to, compensation (in addition to the sales load) paid to
Representatives; advertising, salaries and other expenses of the Distributor
relating to selling or servicing efforts; expenses of organizing and conducting
sales seminars; printing of prospectuses, statements of additional information
and reports for other than existing shareholders; and preparation and
distribution of advertising material and sales literature and other sales
promotion expenses. The Distributor has entered into dealer agreements with
participating dealers who also will distribute shares of the Trust.

If the Plan is terminated, the obligation of the Trust to make payments to
the Distributor pursuant to the Plan will cease and the Trust will not be
required to make any payment past the date the Plan terminates.

TAXES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

The Trust intends to qualify for treatment as a regulated investment
company under the Code for its current taxable year. By doing so, the Trust (but
not its shareholders) will be relieved of Federal income tax on that part of its
investment company taxable income (generally consisting of net investment
income, net short-term capital gain and net gains from certain foreign currency
transactions) and net capital gain (the excess of net long-term capital gain
over net short-term capital loss) that is distributed to its shareholders.
Dividends from the Trust's investment company taxable income are taxable to
shareholders as ordinary income, to the extent of the Trust's earnings and
profits, whether received in cash or in additional Trust shares. Distributions
of the Trust's net capital gain, when designated as such, are taxable to
shareholders as long-term capital gains, whether received in cash or in
additional Trust shares and regardless of the length of time the shares have
been held. A portion of the dividends paid by the Trust, whether received in
cash or in additional Trust shares, may be eligible for the dividends-received
deduction allowed to corporations. The eligible portion may not exceed the
aggregate dividends received by the Trust from U.S. corporations. However,
dividends received by a corporate shareholder and deducted by it pursuant to the
dividends-received deduction are subject indirectly to the alternative minimum
tax.

18
<PAGE> 21

Dividends and other distributions declared by the Trust in October,
November or December of any calendar year and payable to shareholders of record
on a date in any of these months will be deemed to have been paid by the Trust
and received by the shareholders on December 31 of that year if they are paid by
the Trust during the following January. Shareholders receive Federal income tax
information regarding dividends and other distributions after the end of each
year. The Trust is required to withhold 31% of all dividends, capital gain
distributions, and redemption proceeds payable to individuals and certain other
non-corporate shareholders who do not provide the Trust with a correct taxpayer
identification number. Withholding at that rate also is required from dividends
and capital gain distributions payable to such shareholders who otherwise are
subject to backup withholding.

The foregoing is only a summary of some of the important Federal income tax
considerations generally affecting the Trust and its shareholders. See the SAI
for a further discussion. There may be other Federal, state or local tax
considerations applicable to a particular investor. You are therefore urged to
consult your tax adviser.

SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Each share of the Trust gives the shareholder one vote in matters submitted
to shareholders for a vote. A shares and C shares of the Trust have equal voting
rights, except that, in matters affecting only a particular class, only shares
of that class are entitled to vote. As a Massachusetts business trust, the Trust
is not required to hold annual shareholder meetings. Shareholder approval will
be sought only for certain changes in the Trust's operation and for the election
of Trustees under certain circumstances. Trustees may be removed by the Trustees
or shareholders at a special meeting. A special meeting of shareholders shall be
called by the Trustees upon the written request of shareholders owning at least
10% of the Trust's outstanding shares.

19
<PAGE> 22

No dealer, salesman, or other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus in connection with the offer contained in this Prospectus, and, if
given or made, such other information or representations must not be relied upon
as having been authorized by the Trust or the Distributor. This Prospectus does
not constitute an offering in any state in which such offering may not lawfully
be made.
<PAGE> 23

<TABLE>
<S> <C>
Heritage Capital Appreciation Trust -----------------
P.O. Box 33022
St. Petersburg, FL 33733
- --------------------------------------- BULK RATE
U.S. POSTAGE
Address Change Requested PAID
MODERN MAILING
Prospectus -----------------
INVESTMENT ADVISER/
SHAREHOLDER SERVICING AGENT
Heritage Asset Management, Inc.
P.O. Box 33022
St. Petersburg, FL 33733
(800) 421-4184
DISTRIBUTOR
Raymond James & Associates, Inc.
P.O. Box 12749
St. Petersburg, FL 33733
(813) 573-3800
LEGAL COUNSEL
Kirkpatrick & Lockhart LLP
8M HAM017
</TABLE>
<PAGE> 24

LOGO

Prospectus

January 2, 1996

<PAGE>

STATEMENT OF ADDITIONAL INFORMATION

HERITAGE CAPITAL APPRECIATION TRUST

This Statement of Additional Information ("SAI") dated January 2,
1996 should be read with the Prospectus of the Heritage Capital
Appreciation Trust dated January 2, 1996. This SAI is not a prospectus
itself. To receive a copy of the Prospectus, write to Heritage Asset
Management, Inc. at the address below or call (800) 421-4184.

Heritage Asset Management, Inc.
880 Carillon Parkway
St. Petersburg, Florida 33716

TABLE OF CONTENTS
Page
----

GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . 1
INVESTMENT INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . 1
Investment Objective . . . . . . . . . . . . . . . . . . . . . 1
Investment Policies . . . . . . . . . . . . . . . . . . . . . 1
Industry Classifications . . . . . . . . . . . . . . . . . . . 6
INVESTMENT LIMITATIONS . . . . . . . . . . . . . . . . . . . . . . . . 7
NET ASSET VALUE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
PERFORMANCE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . 10
INVESTING IN THE TRUST . . . . . . . . . . . . . . . . . . . . . . . . 11
Alternative Purchase Plans . . . . . . . . . . . . . . . . . . 11
Class A Purchases at Net Asset Value . . . . . . . . . . . . . 12
Class A Combined Purchase Privilege (Right of
Accumulation) . . . . . . . . . . . . . . . . 12
Class A Statement of Intention . . . . . . . . . . . . . . . . 13
REDEEMING SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Systematic Withdrawal Plan . . . . . . . . . . . . . . . . . . 14
Telephone Transactions . . . . . . . . . . . . . . . . . . . . 15
Redemption in Kind . . . . . . . . . . . . . . . . . . . . . . 15
Receiving Payment . . . . . . . . . . . . . . . . . . . . . . 15
EXCHANGE PRIVILEGE . . . . . . . . . . . . . . . . . . . . . . . . . . 16
TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
TRUST INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Management of the Trust . . . . . . . . . . . . . . . . . . . 20
Investment Adviser and Administrator; Subadvisers. . . . . . . 23
Brokerage Practices . . . . . . . . . . . . . . . . . . . . . 26
Distribution of Shares . . . . . . . . . . . . . . . . . . . . 27
Administration of the Trust . . . . . . . . . . . . . . . . . 29
Potential Liability . . . . . . . . . . . . . . . . . . . . . 30
APPENDIX A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
REPORT OF INDEPENDENT ACCOUNTANTS . . . . . . . . . . . . . . . . . . A-2
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . A-3
<PAGE>

GENERAL INFORMATION
-------------------

Heritage Capital Appreciation Trust (the "Trust") was established
as a Massachusetts business trust under a Declaration of Trust dated June
21, 1985. The Trust offers two classes of shares, Class A shares sold
subject to a front-end sales load ("A shares") and Class C shares sold
subject to a contingent deferred sales load ("CDSL") ("C shares").

INVESTMENT INFORMATION
----------------------

Investment Objective
--------------------

The Trust's investment objective, as described in the prospectus,
is long-term capital appreciation.

Investment Policies
-------------------

American Depository Receipts. The Trust may invest in sponsored
American Depository Receipts ("ADRs"). ADRs are receipts typically issued
by a U.S. bank or trust company evidencing ownership of the underlying
securities of foreign issuers and other forms of depository receipts for
securities of foreign issuers. Generally, ADRs, in registered form, are
denominated in U.S. dollars and are designed for use in the U.S.
securities markets. Thus, these securities are not denominated in the
same currency as the securities into which they may be converted. ADRs
are considered to be foreign securities by the Trust for purposes of
certain investment limitation calculations.

Convertible Securities. The Trust may invest in convertible
securities. While no securities investment is without some risk,
investments in convertible securities generally entail less risk than the
issuer's common stock, although the extent to which such risk is reduced
depends in large measure upon the degree to which the convertible security
sells above its value as a fixed income security. The Trust's investment
subadvisers, Liberty Investment Management ("Liberty") and Eagle Asset
Management, Inc. ("Eagle") (collectively, the "Subadvisers"), will decide
whether to invest in convertible securities based upon a fundamental
analysis of the long-term attractiveness of the issuer and the underlying
common stock, the evaluation of the relative attractiveness of the current
price of the underlying common stock, and the judgment of the value of the
convertible security relative to the common stock at current prices.
Convertible securities in which the Trust may invest include corporate
bonds, notes and preferred stock that can be converted into common stock.
Convertible securities combine the fixed-income characteristics of bonds
and preferred stock with the potential for capital appreciation. As with
all debt securities, the market value of convertible securities tends to
decline as interest rates increase and, conversely, to increase as
interest rates decline. While convertible securities generally offer
lower interest or dividend yields than nonconvertible debt securities of
<PAGE>

similar quality, they do enable the investor to benefit from increases in
the market price of the underlying common stock.

Forward Currency Contracts. Because investments in foreign
companies usually will involve currencies of foreign countries, and
because the Trust temporarily may hold funds in bank deposits in foreign
currencies during the completion of investment programs, the value of
Trust assets as measured in U.S. dollars may be affected favorably or
unfavorably by changes in foreign currency exchange rates and exchange
control regulations, and the Trust may incur costs in connection with
conversions between various currencies. The Trust will conduct its
foreign currency exchange transactions on a spot (i.e., cash) basis at the
spot rate prevailing in the foreign currency exchange market. In
addition, in order to protect against uncertainty in the level of future
exchange rates, the Trust may enter into contracts to purchase or sell
foreign currencies at a future date (i.e., a "forward currency contract"
or "forward contract") that is not more than 30 days from the date of the
contract.

The Trust may enter into forward contracts to purchase or sell
foreign currencies for a fixed amount of U.S. dollars or another foreign
currency or basket of foreign currencies. Such transactions may serve as
long hedges -- for example, the Trust may purchase a forward contract to
lock in the U.S. dollar price of a security denominated in a foreign
currency that the Trust intends to acquire. Forward contract transactions
also may serve as short hedges -- for example, the Trust may sell a
forward contract to lock in the U.S. dollar equivalent of the proceeds
from the anticipated sale of a security, or from a dividend or interest
payment on a security, denominated in a foreign currency.

As noted above, the Trust may seek to hedge against changes in
the value of a particular currency by using forward contracts on another
foreign currency or a basket of currencies, the value of which the
Subadvisers believe will have a positive correlation to the values of the
currency being hedged. Use of a different foreign currency magnifies the
risk that movements in the price of the forward contract will not
correlate or will correlate unfavorably with the foreign currency being
hedged.

The cost to the Trust of engaging in forward contracts varies
with factors such as the currency involved, the length of the contract
period and the market conditions then prevailing. Because forward
contracts usually are entered into on a principal basis, no fees or
commissions are involved. When the Trust enters into a forward contract,
it relies on its counterparty to make or take delivery of the underlying
currency at the maturity of the contract. Failure by the counterparty to
do so would result in the loss of any expected benefit of the transaction.

Sellers or purchasers of forward contracts can enter into
offsetting closing transactions by purchasing or selling, respectively, an
instrument identical to the instrument bought or sold. Secondary markets
generally do not exist for forward contracts, with the result that closing

- 2 -
<PAGE>

transactions generally can be made for forward contracts only by
negotiating directly with the counterparty. Thus, there can be no
assurance that the Trust will in fact be able to close out a forward
contract at a favorable price prior to maturity. In addition, in the
event of insolvency of the counterparty, the Trust might be unable to
close out a forward contract at any time prior to maturity. In either
event, the Trust would continue to be subject to market risk with respect
to the position, and would continue to be required to maintain a position
in the securities or currencies that are the subject of the hedge or to
maintain cash or securities in a segregated account.

The precise matching of forward contract amounts and the value of
the securities involved generally will not be possible because the value
of such securities, measured in the foreign currency, will change after
the foreign contract has been established. Thus, the Trust might need to
purchase or sell foreign currencies in the spot (cash) market to the
extent such foreign currencies are not covered by forward contracts. The
projection of short-term currency market movements is extremely difficult,
and the successful execution of a short-term hedging strategy is highly
uncertain.

Foreign Currency Strategies - Special Considerations. The value
of forward contracts depends on the value of the underlying currency
relative to the U.S. dollar. Because foreign currency transactions
occurring in the interbank market might involve substantially larger
amounts than those involved in the use of forward contracts, the Trust
could be disadvantaged by having to deal in the odd-lot market (generally
consisting of transactions of less than $1 million) for the underlying
foreign currencies at prices that are less favorable than for round lots.

There is no systematic reporting of last sale information for
foreign currencies or any regulatory requirement that quotations available
through dealers or other market sources be firm or revised on a timely
basis. Quotation information generally is representative of very large
transactions in the interbank market and thus might not reflect odd-lot
transactions where rates might be less favorable. The interbank market in
foreign currencies is a global, round-the-clock market.

Settlement of transactions involving foreign currencies might be
required to take place within the country issuing the underlying currency.
Thus, the Trust might be required to accept or make delivery of the
underlying foreign currency in accordance with any U.S. or foreign
regulations regarding the maintenance of foreign banking arrangements by
U.S. residents and might be required to pay any fees, taxes and charges
associated with such delivery assessed in the issuing country.

Limitations on the Use of Forward Currency Contracts. The Trust
may enter into forward currency contracts or maintain a net exposure to
such contracts only if (1) the consummation of the contracts would not
obligate the Trust to deliver an amount of foreign currency in excess of
the value of the position being hedged by such contracts or (2) the Trust
maintains cash, U.S. Government securities or liquid, high-grade debt

- 3 -
<PAGE>

securities in a segregated account in an amount not less than the value of
its total assets committed to the consummation of the contract and not
covered as provided in (1) above, as marked to market daily.

Foreign Securities. The Trust may invest in foreign securities;
however, such investment may not exceed 10% of the Trust's investment
portfolio. Investing in securities issued by companies whose principal
business activities are outside the United States may involve significant
risks not present in domestic investments. For example, there generally
is less publicly available information about foreign companies,
particularly those not subject to the disclosure and reporting
requirements of U.S. securities laws. Foreign issuers generally are not
bound by uniform accounting, auditing and financial reporting requirements
comparable to those applicable to domestic issuers. Investments in
foreign securities also involve the risk of possible adverse changes in
investment or exchange control regulations, expropriation or confiscatory
taxation, limitation on the removal of funds or other assets of the Trust,
political or financial instability or diplomatic and other developments
that could affect such investments. Further, the economies of some
countries may differ favorably or unfavorably from the economy of the
United States.

It is anticipated that in most cases the best available market
for foreign securities will be on exchanges or in over-the-counter markets
located outside the United States. Foreign stock markets, while growing
in volume and sophistication, generally are not as well developed as those
in the United States, and securities of some foreign issuers (particularly
those located in developing countries) may be less liquid and more
volatile than securities of comparable U.S. companies. In addition,
foreign brokerage commissions generally are higher than commissions on
securities traded in the United States. In general, there is less overall
governmental supervision and regulation of securities exchanges, brokers
and listed companies than in the United States.

It is the Trust's policy not to invest in foreign securities when
there are currency or trading restrictions in force or when, in the
judgment of the Subadvisers, such restrictions are likely to be imposed.
However, certain currencies may become blocked (i.e., not freely available
for transfer from a foreign country), resulting in the possible inability
of the Trust to convert proceeds realized upon the sale of portfolio
securities of the affected foreign companies into U.S. currency.

Illiquid Securities. As stated in the prospectus, the Trust will
not purchase or otherwise acquire any security if, as a result, more than
10% of its net assets (taken at current value) would be invested in
securities that are illiquid by virtue of the absence of a readily
available market or legal or contractual restrictions on resale. This
policy includes repurchase agreements maturing in more than seven days.
This policy does not include restricted securities eligible for resale
pursuant to Rule 144A under the Securities Act of 1933, as amended (the
"1933 Act"), which the Trust's Board of Trustees (the "Board of Trustees"
or the "Board"), or the Manager or the Subadvisers, as applicable, has

- 4 -
<PAGE>

determined under Board-approved guidelines are liquid. However, the Trust
currently has no plans of investing more than 5% of its assets in
securities eligible for resale pursuant to Rule 144A.

Restricted securities that are illiquid may be sold only in
privately negotiated transactions or in public offerings with respect to
which a registration statement is in effect under the 1933 Act. Where
registration is required, the Trust may be obligated to pay all or part of
the registration expenses and a considerable period may elapse between the
time of the decision to sell and the time the Trust may be permitted to
sell a security under an effective registration statement. If, during
such a period, adverse market conditions were to develop, the Trust might
obtain a less favorable price than prevailed when it decided to sell.

In recent years, a large institutional market has developed for
certain securities that are not registered under the 1933 Act, including
private placements, repurchase agreements, commercial paper, foreign
securities, and corporate bonds and notes. These instruments often are
restricted securities because the securities are either themselves exempt
from registration or sold in transactions not requiring registration.
Institutional investors generally will not seek to sell these instruments
to the general public, but instead will often depend either on an
efficient institutional market in which such unregistered securities can
be readily resold or on an issuer's ability to honor a demand for
repayment. Therefore, the fact that there are contractual or legal
restrictions on resale to the general public or certain institutions is
not dispositive of the liquidity of such investments.

Rule 144A under the 1933 Act establishes a "safe harbor" from the
registration requirements of the 1933 Act for resales of certain
securities to qualified institutional buyers. Institutional markets for
restricted securities that might develop as a result of Rule 144A could
provide both readily ascertainable values for restricted securities and
the ability to liquidate an investment to satisfy share redemption orders.
An insufficient number of qualified institutional buyers interested in
purchasing Rule 144A-eligible securities held by the Trust, however, could
affect adversely the marketability of such portfolio securities and the
Trust might be unable to dispose of such securities promptly or at
reasonable prices.

Preferred Stock. A preferred stock is a blend of the
characteristics of a bond and common stock. It can offer the higher yield
of a bond and has priority over common stock in equity ownership but does
not have the seniority of a bond and its participation in the issuer's
growth may be limited. Preferred stock has a preference over common stock
in the receipt of dividends and in any residual assets after payment to
creditors should the issuer be dissolved. Although the dividend is set at
a fixed annual rate, in some circumstances it can be changed or omitted by
the issuer.

U.S. Government Securities. The Trust may invest in U.S.
Government securities, including a variety of securities that are issued

- 5 -
<PAGE>

or guaranteed by the U.S. Government, its agencies or instrumentalities
and repurchase agreements secured thereby. These securities include
securities issued and guaranteed by the U.S. Government, such as Treasury
bills, Treasury notes, and Treasury bonds; obligations backed by the "full
faith and credit" of the United States, such as Government National
Mortgage Association securities; obligations supported by the right of the
issuer to borrow from the U.S. Treasury, such as those of the Federal Home
Loan Banks; and obligations supported only by the credit of the issuer,
such as those of the Federal Intermediate Credit Banks.

Warrants. The Trust may purchase warrants, which are instruments
that permit the Trust to acquire, by subscription, the capital stock of a
corporation at a set price, regardless of the market price for such stock.
Warrants may be either perpetual or of limited duration. There is a
greater risk that warrants might drop in value at a faster rate than the
underlying stock. The Trust's investment in warrants is limited to 5% of
its total assets, of which no more than 2% may not be listed on the New
York or American Stock Exchange.

Industry Classifications
------------------------

For purposes of determining industry classifications, the Trust
relies upon classifications established by the Manager that are based upon
classifications contained in the Directory of Companies Filing Annual
Reports with the Securities and Exchange Commission ("SEC") and in the
Standard & Poor's Corporation Industry Classifications.

INVESTMENT LIMITATIONS
----------------------

In addition to the limits disclosed in "Investment Policies"
above and the investment limitations described in the prospectus, the
Trust is subject to the following investment limitations that are
fundamental policies of the Trust and may not be changed without the vote
of a majority of the outstanding voting securities of the Trust. Under
the Investment Company Act of 1940, as amended (the "1940 Act"), a "vote
of a majority of the outstanding voting securities" of the Trust means the
affirmative vote of the lesser of (1) more than 50% of the outstanding
shares of the Trust or (2) 67% or more of the shares present at a
shareholders meeting if more than 50% of the outstanding shares are
represented at the meeting in person or by proxy.

Investing in Commodities, Minerals or Real Estate. The Trust may
not invest in commodities, commodity contracts, oil, gas or other mineral
programs, or real estate, except that it may purchase securities issued by
companies that invest in or sponsor such interests.

Underwriting. The Trust may not underwrite the securities of
other issuers, except that the Trust may invest in securities that are not
readily marketable without registration under the 1933 Act (restricted
securities), if immediately after the making of such investment not more

- 6 -
<PAGE>

than 5% of the value of the Trust's total assets (taken at cost) would be
so invested.

Loans. The Trust may not make loans, except to the extent that
the purchase of a portion of an issue of publicly distributed notes, bonds
or other evidences of indebtedness or deposits with banks and other
financial institutions may be considered loans. The Trust also may enter
into repurchase agreements as permitted under its investment policies.

Concentration of Investments. The Trust may not purchase
securities if as a result of such purchase more than 25% of the value of
its total assets would be invested in any one industry.

Issuing Senior Securities. The Trust may not issue senior
securities, except as permitted by its investment objective and policies
and investment limitations.

The Trust has adopted the following additional restrictions that,
together with certain limits described in the Trust's prospectus, are
nonfundamental policies and may be changed by the Board of Trustees
without shareholder approval in compliance with applicable law, regulation
or regulatory policy.

Investing in Illiquid Securities. The Trust may not purchase any
securities subject to restrictions on resale or purchase securities that
are not readily marketable if, as a result thereof, more than 10% of the
net assets of the Trust would be invested in such illiquid investments and
in repurchase agreements maturing in more than seven days.

Selling Short and Buying on Margin. The Trust may not sell any
securities short or purchase any securities on margin but may obtain such
short-term credits as may be necessary for clearance of purchases and
sales of securities.

Investing in Other Investment Companies. The Trust may not
invest in securities issued by other investment companies, except in
connection with a merger, consolidation, acquisition or reorganization or
by purchase in the open market of securities of closed-end investment
companies where no underwriter or dealer commission or profit, other than
a customary brokerage commission, is involved and only if immediately
thereafter not more than 5% of the Trust's total assets (taken at market
value) would be invested in such securities.

Investing in Issuers Whose Securities Are Owned by Officers of
the Trust. The Trust may not purchase or retain the securities of any
issuer if the officers and Trustees of the Trust or the Manager or
Subadvisers who own individually more than 1/2 of 1% of the issuer's
securities together own more than 5% of the issuer's securities.

Option Writing. The Trust may not write put or call options.

- 7 -
<PAGE>

Pledging. The Trust may not pledge any securities except that it
may pledge assets having a value of not more than 10% of its total assets
to secure permitted borrowing from banks.

Unseasoned Issuers. The Trust may not invest more than 5% of the
value of its total assets in securities of companies that, with their
predecessors, have been in continuous operations for less than three
years.

Except with respect to borrowing money, if a percentage
limitation is adhered to at the time of the investment, a later increase
or decrease in the percentage resulting from any change in value of net
assets will not result in a violation of such restriction.

NET ASSET VALUE
---------------

The net asset values of the A shares and C shares are determined
daily Monday through Friday, except for New Year's Day, Presidents' Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day
and Christmas Day, as of the close of regular trading on the New York
Stock Exchange (the "Exchange"). Net asset value for each class is
calculated by dividing the value of the total assets of the Trust
attributable to that class, less all liabilities (including accrued
expenses) attributable to that class, by the number of class shares
outstanding, the result being adjusted to the nearest whole cent. A
security listed or traded on the Exchange, or other domestic or foreign
stock exchanges, is valued at its last sales price on the principal
exchange on which it is traded prior to the time when assets are valued.
If no sale is reported at that time or the security is traded in the
over-the-counter market, the most recent bid price is used. Securities
and other assets for which market quotations are not readily available, or
for which market quotes are not deemed to be reliable, are valued at fair
value as determined in good faith by the Board of Trustees. Securities in
a foreign currency will be valued daily in U.S. dollars at the foreign
currency exchange rates prevailing at the time the Trust calculates the
daily net asset value of each class. Short-term investments having a
maturity of 60 days or less are valued at cost with accrued interest or
discount earned included in interest receivable.

The Trust is open for business on days on which the Exchange is
open (each a "Business Day"). Trading in securities on European and Far
Eastern securities exchanges and over-the-counter markets normally is
completed well before the Trust's close of business on each Business Day.
In addition, European or Far Eastern securities trading may not take place
on all Business Days. Furthermore, trading takes place in various foreign
capital markets on days that are not Business Days and on which the
Trust's net asset value is not calculated. Calculation of A shares and C
shares does not take place contemporaneously with the determination of the
prices of the majority of the portfolio securities used in such
calculation. The Trust calculates net asset value per share, and
therefore effects sales and redemptions, as of the close of trading on the

- 8 -
<PAGE>

Exchange each Business Day. If events materially affecting the value of
such securities occur between the time when their prices are determined
and the time when the Trust's net asset value is calculated, such
securities will be valued at fair value by methods as determined in good
faith by or under the direction of the Board of Trustees.

The Board of Trustees may suspend the right of redemption or
postpone payment for more than seven days at times (1) during which the
Exchange is closed other than for the customary weekend and holiday
closings, (2) during which trading on the Exchange is restricted as
determined by the SEC, (3) during which an emergency exists as a result of
which disposal by the Trust of securities owned by it is not reasonably
practicable or it is not reasonably practical for the Trust fairly to
determine the value of its net assets, or (4) for such other periods as
the SEC may by order permit for the protection of the holders of A shares
and C shares.

PERFORMANCE INFORMATION
-----------------------

The performance data for each class of the Trust quoted in
advertising and other promotional materials represents past performance
and is not intended to indicate future performance. The investment return
and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Average
annual total return quotes for each class used in the Trust's advertising
and promotional materials are calculated according to the following
formula:

P(1+T)n = ERV

where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypo-
thetical $1,000 payment made at the
beginning of the period at the end of
that period

In calculating the ending redeemable value for A shares, the
current maximum sales load of 4.75% is deducted from the initial $1,000
payment and all dividends and other distributions by the Trust are assumed
to have been reinvested at net asset value on the reinvestment dates
during the period. Based on this formula, the total return, or "T" in the
formula above, is computed by finding the average annual compounded rates
of return over the period that would equate the initial amount invested to
the ending redeemable value. The average annualized total returns for A
shares using this formula for the fiscal year ended August 31, 1995, the
five years ended August 31, 1995 and for the period December 12, 1985
(commencement of operations) through August 31, 1995 were 5.58%, 13.89%
and 10.72%, respectively. The actual total return would be higher for
shareholders who paid a sales load of less than 4.75%. The average

- 9 -
<PAGE>

annualized total return for C shares using this formula for the period
April 3, 1995 (commencement of operations for C shares) to August 31, 1995
was 21.47%.

In connection with communicating its total return to current or
prospective shareholders, the Trust also may compare these figures to the
performance of other mutual funds tracked by mutual fund rating services
or to other unmanaged indexes that may assume reinvestment of dividends
but generally do not reflect deductions for administrative and management
costs. In addition, the Trust may from time to time include in
advertising and promotional materials total return figures that are not
calculated according to the formula set forth above for each class of
shares. For example, in comparing the Trust's aggregate total return with
data published by Lipper Analytical Services, Inc., CDA Investment
Technologies, Inc. or with such market indices as the Dow Jones Industrial
Average and the Standard & Poor's 500 Composite Stock Price Index, the
Trust calculates its cumulative total return for each class for the
specified periods of time by assuming an investment of $10,000 in shares
of that class and assuming the reinvestment of each dividend or other
distribution at net asset value on the reinvestment date. Percentage
increases are determined by subtracting the initial value of the
investment from the ending value and by dividing the remainder by the
beginning value. The Trust does not, for these purposes, deduct from the
initial value invested any amount representing front-end sales loads
charged on A shares or CDSLs charged on C shares.

The A shares cumulative returns using this formula for the one
year and five years ended August 31, 1995, and for the period December 12,
1985 (commencement of operations) to August 31, 1995 were 10.85%, 101.23%
and 182.58%, respectively. The C shares cumulative returns using this
formula for the period April 3, 1995 (commencement of operations for C
shares) to August 31, 1995 was 9.31%. By not annualizing the performance
and excluding the effect of the front-end sales load on A shares and the
CDSL on C shares, total return calculated in this manner simply will
reflect the increase in net asset value per share over a period of time,
adjusted for dividends and other distributions. Calculating total return
without taking into account the front-end sales load or CDSL results in a
higher rate of return than calculating total return net of the sales load.

INVESTING IN THE TRUST
----------------------

A shares and C shares are sold at their next determined net asset
value on Business Days. The procedures for purchasing shares of the Trust
are explained in the Trust's prospectus under "Investing in the Trust."

Alternative Purchase Plans
--------------------------

A shares are sold at their next determined net asset value plus a
front-end sales load on days the Exchange is open for business. C shares
are sold at their next determined net asset value on days the Exchange is

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<PAGE>

open for business, subject to a 1% CDSL if the investor redeems such
shares within one year. The Manager, as the Trust's transfer agent, will
establish an account with the Trust and will transfer funds to State
Street Bank and Trust Company (the "Custodian"). Normally, orders will be
accepted upon receipt of funds and will be executed at the net asset value
determined as of the close of regular trading on the Exchange on that day
plus any applicable sales load. See "Alternative Purchase Plans" in the
prospectus. The Trust reserves the right to reject any order for Trust
shares. The Trust's distributor, Raymond James & Associates, Inc. ("RJA"
or the "Distributor"), has agreed that it will hold the Trust harmless in
the event of loss as a result of cancellation of trades in Trust shares by
the Distributor, its affiliates or its customers.

Class A Purchases at Net Asset Value
------------------------------------

Cities, counties, states or instrumentalities and their
departments, authorities or agencies are able to purchase A shares at net
asset value as long as certain conditions are met: the governmental
entity is prohibited by applicable investment laws, codes or regulations
from paying a sales load in connection with the purchase of shares of a
registered investment company; the governmental entity has determined that
such A shares are a legally permissible investment; and any relevant
minimum purchase amounts are met.

In the instance of discretionary fiduciary assets or trusts, or
Class A purchases by a governmental entity through a registered broker-
dealer with which the Distributor has a dealer agreement, the Manager may
make a payment out of its own resources to the Distributor, who may
reallow the payment to the selling broker-dealer. However, the
Distributor and the selling broker-dealer may be required to reimburse the
Manager for these payments if investors redeem A shares within specified
periods.

Class A Combined Purchase Privilege (Right of Accumulation)
-----------------------------------------------------------

Certain investors may qualify for the Class A sales load
reductions indicated in the sales load schedule in the prospectus by
combining purchases of A shares into a single "purchase," if the resulting
purchase totals at least $25,000. The term "purchase" refers to a single
purchase by an individual, or to concurrent purchases that, in the
aggregate, are at least equal to the prescribed amounts, by an individual,
his spouse and their children under the age of 21 years purchasing A
shares for his or their own account; a single purchase by a trustee or
other fiduciary purchasing A shares for a single trust, estate or single
fiduciary account although more than one beneficiary is involved; or a
single purchase for the employee benefit plans of a single employer. The
term "purchase" also includes purchases by a "company," as the term is
defined in the 1940 Act, but does not include purchases by any such
company that has not been in existence for at least six months or that has

- 11 -
<PAGE>

no purpose other than the purchase of A shares or shares of other
registered investment companies at a discount; provided, however, that it
shall not include purchases by any group of individuals whose sole
organizational nexus is that the participants therein are credit card
holders of a company, policy holders of an insurance company, customers of
either a bank or broker-dealer, or clients of an investment adviser.

The applicable A sales load will be based on the total of:

(i) the investor's current purchase;

(ii) the net asset value (at the close of business on
the previous day) of (a) all A shares held by the investor and
(b) all A shares of any other Heritage mutual fund advised by the
Manager ("Heritage Mutual Fund") held by the investor and
purchased at a time when A shares of such other fund were
distributed subject to a sales load (including Heritage Cash
Trust shares acquired by exchange); and

(iii) the net asset value of all A shares described in
paragraph (ii) owned by another shareholder eligible to combine
his purchase with that of the investor into a single "purchase."

A shares of Heritage Income Trust-Intermediate Government Fund
purchased from February 1, 1992 through July 31, 1992, without payment of
a sales load will be deemed to fall under the provisions of paragraph (ii)
as if they had been distributed without being subject to a sales load,
unless those shares were acquired through an exchange of other shares that
were subject to a sales load.

Class A Statement of Intention
------------------------------

Investors also may obtain the reduced sales loads shown in the
Trust's prospectus by means of a written Statement of Intention, which
expresses the investor's intention to invest not less than $25,000 within
a period of 13 months in A shares of the Trust or any other Heritage
Mutual Fund. Each purchase of A shares under a Statement of Intention
will be made at the public offering price or prices applicable at the time
of such purchase to a single transaction of the dollar amount indicated in
the Statement. At the investor's option, a Statement of Intention may
include purchases of A shares of the Trust or any other Heritage Mutual
Fund made not more than 90 days prior to the date that the investor signs
a Statement of Intention. However, the 13-month period during which the
Statement is in effect will begin on the date of the earliest purchase to
be included.

The Statement of Intention is not a binding obligation upon the
investor to purchase the full amount indicated. The minimum initial
investment under a Statement of Intention is 5% of such amount. A shares
purchased with the first 5% of such amount will be held in escrow (while
remaining registered in the name of the investor) to secure payment of the

- 12 -
<PAGE>

higher sales load applicable to the shares actually purchased if the full
amount indicated is not purchased, and such escrowed A shares will be
involuntarily redeemed to pay the additional sales load, if necessary.
When the full amount indicated has been purchased, the escrow will be
released. To the extent an investor purchases more than the dollar amount
indicated on the Statement of Intention and qualifies for a further
reduced sales load, the sales load will be adjusted for the entire amount
purchased at the end of the 13-month period. The difference in sales load
will be used to purchase additional A shares of the Trust, subject to the
rate of sales load applicable to the actual amount of the aggregate
purchases. An investor may amend his/her Statement of Intention to
increase the indicated dollar amount and begin a new 13-month period. In
that case, all investments subsequent to the amendment will be made at the
sales load in effect for the higher amount. The escrow procedures
discussed above will apply.

REDEEMING SHARES
----------------

The methods of redemption are described in the section of the
prospectus entitled "How to Redeem Shares."

Systematic Withdrawal Plan
--------------------------

Shareholders may elect to make systematic withdrawals from a
Trust account of a minimum of $50 on a periodic basis. The amounts paid
each period are obtained by redeeming sufficient shares from an account to
provide the withdrawal amount specified. The Systematic Withdrawal Plan
currently is not available for shares held in an Individual Retirement
Account, Section 403(b) annuity plan, defined contribution plan,
Simplified Employee Pension Plan or other retirement plans, unless the
shareholder establishes to the Manager's satisfaction that withdrawals
from such an account may be made without imposition of a penalty.
Shareholders may change the amount to be paid without charge not more than
once a year by written notice to the Distributor or the Manager.

Redemptions will be made at net asset value determined as of the
close of regular trading on the Exchange on the 10th day of each month or
the 10th day of the last month of each period, whichever is applicable.
Systematic withdrawals of C shares, if made within one year of the date of
purchase, will be charged a CDSL of 1%. If the Exchange is not open for
business on that day, the shares will be redeemed at net asset value
determined as of the close of regular trading on the Exchange on the
preceding Business Day, minus any applicable CDSL for C shares. The check
for the withdrawal payment usually will be mailed on the next business day
following redemption. If a shareholder elects to participate in the
Systematic Withdrawal Plan, dividends and other distributions on all
shares in the account must be reinvested automatically in Trust shares. A
shareholder may terminate the Systematic Withdrawal Plan at any time
without charge or penalty by giving written notice to the Manager or the
Distributor. The Trust and its transfer agent and Distributor also

- 13 -
<PAGE>

reserve the right to modify or terminate the Systematic Withdrawal Plan at
any time.

Withdrawal payments are treated as a sale of shares rather than
as a dividend or a capital gain distribution. These payments are taxable
to the extent that the total amount of the payments exceeds the tax basis
of the shares sold. If the periodic withdrawals exceed reinvested
dividends and other distributions, the amount of the original investment
may be correspondingly reduced.

Ordinarily, a shareholder should not purchase additional A shares
if maintaining a Systematic Withdrawal Plan of A shares because the
shareholder may incur tax liabilities in connection with such purchases
and withdrawals. The Trust will not knowingly accept purchase orders from
shareholders for additional A shares if they maintain a Systematic
Withdrawal Plan unless the purchase is equal to at least one year's
scheduled withdrawals. In addition, a shareholder who maintains such a
Plan may not make periodic investments under the Trust's Automatic Invest-
ment Plan.

Telephone Transactions
----------------------

Shareholders may redeem shares by placing a telephone request to
the Trust. The Trust, Manager, Distributor and their Trustees, directors,
officers and employees are not liable for any loss arising out of
telephone instructions they reasonably believe are authentic. In acting
upon telephone instructions, these parties use procedures that are
reasonably designed to ensure that such instructions are genuine, such as
(1) obtaining some or all of the following information: account number,
name(s) and social security number registered to the account, and personal
identification; (2) recording all telephone transactions; and (3) sending
written confirmation of each transaction to the registered owner. If the
Trust, Manager, Distributor and their Trustees, directors, officers and
employees do not follow reasonable procedures, some or all of them may be
liable for any such losses.

Redemptions in Kind
-------------------

The Trust is obligated to redeem shares for any shareholder for
cash during any 90-day period up to $250,000 or 1% of the Trust's net
asset value, whichever is less. Any redemption beyond this amount also
will be in cash unless the Board of Trustees determine that further cash
payments will have a material adverse effect on remaining shareholders.
In such a case, the Trust will pay all or a portion of the remainder of
the redemption in portfolio instruments, valued in the same way as the
Trust determines net asset value. The portfolio instruments will be
selected in a manner that the Board of Trustees deem fair and equitable.
A redemption in kind is not as liquid as a cash redemption. If a
redemption is made in kind, a shareholder receiving portfolio instruments

- 14 -
<PAGE>

could receive less than the redemption value thereof and could incur
certain transaction costs.

Receiving Payment
-----------------

If a request for redemption is received by the Trust in good
order (as described in the prospectus) before the close of regular trading
on the Exchange, the shares will be redeemed at the net asset value per
share determined at such close, minus any applicable CDSL for C shares.
Requests for redemption received by the Trust after the close of regular
trading on the Exchange will be executed at the net asset value determined
as of such close on the next trading day, minus any applicable CDSL for C
shares.

If shares of the Trust are redeemed by a shareholder through the
Distributor or a participating dealer, the redemption is settled with the
shareholder as an ordinary transaction. If a request for redemption is
received before the close of regular trading on the Exchange, shares will
be redeemed at the net asset value per share determined on that day, minus
any applicable CDSL for C shares. Requests for redemption received after
the close of regular trading on the Exchange will be executed on the next
trading day. Payment for shares redeemed normally will be made by the
Trust to the Distributor or a participating dealer by the third business
day after the day the redemption request was made, provided that
certificates for shares have been delivered in proper form for transfer to
the Trust or, if no certificates have been issued, a written request
signed by the shareholder has been provided to the Distributor or a
participating dealer prior to settlement date.

Other supporting legal documents may be required from
corporations or other organizations, fiduciaries or persons other than the
shareholder of record making the request for redemption. Questions
concerning the redemption of Trust shares can be directed to registered
representatives of the Distributor or a participating dealer, or to the
Manager.

EXCHANGE PRIVILEGE
------------------

Shareholders who have held Trust shares for at least 30 days may
exchange some or all of their A shares or C shares for corresponding
classes of shares of any other Heritage Mutual Fund. All exchanges will
be based on the respective net asset values of the Heritage Mutual Funds
involved. An exchange is effected through the redemption of the shares
tendered for exchange and the purchase of shares being acquired at their
respective net asset values as next determined following receipt by the
Heritage Mutual Fund whose shares are being exchanged of (1) proper
instructions and all necessary supporting documents as described in such
fund's prospectus, or (2) a telephone request for such exchange in
accordance with the procedures set forth in the Trust's prospectus and
below.

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<PAGE>

A shares of Heritage Income Trust-Limited Maturity Government
Fund ("Limited Maturity Government") purchased from February 1, 1992
through July 31, 1992, without payment of an initial sales load may be
exchanged into A shares of the Trust without payment of any sales load.
Effective February 1, 1996, Limited Maturity Government will change its
name to Intermediate Government. A shares of Limited Maturity Government
purchased after July 31, 1992 without an initial sales load will be
subject to a sales load when exchanged into A shares of the Trust, unless
those shares were acquired through an exchange of other shares that were
subject to an initial sales load.

Shares acquired pursuant to a telephone request for exchange will
be held under the same account registration as the shares redeemed through
such exchange. For a discussion of limitation of liability of certain
entities, see "Telephone Transactions" above.

Telephone exchanges can be effected by calling the Manager at
800-421-4184 or by calling a registered representative of the Distributor,
a participating dealer or participating bank ("Representative"). In the
event that a shareholder or his Representative is unable to reach the
Manager by telephone, a telephone exchange can be effected by sending a
telegram to Heritage Asset Management, Inc., attention: Shareholder
Services. Telephone or telegram requests for an exchange received by the
Trust before the close of regular trading on the Exchange will be effected
at the close of regular trading on that day. Requests for an exchange
received after the close of regular trading will be effected on the
Exchange's next trading day. Due to the volume of calls or other unusual
circumstances, telephone exchanges may be difficult to implement during
certain time periods.

TAXES
-----

In order to qualify for the favorable tax treatment as a
regulated investment company ("RIC") under the Internal Revenue Code of
1986, as amended, the Trust must distribute annually to its shareholders
at least 90% of its investment company taxable income (generally
consisting of net investment income, net short-term capital gain and net
gains from certain foreign currency transactions) ("Distribution
Requirement") and must meet several additional requirements. These
requirements include the following: (1) the Trust must derive at least 90%
of its gross income each taxable year from dividends, interest, payments
with respect to securities loans and gains from the sale or other
disposition of securities or foreign currencies, or other income
(including gains from forward contracts) derived with respect to its
business of investing in securities or those currencies ("Income
Requirement"); (2) the Trust must derive less than 30% of its gross income
each taxable year from the sale or other disposition of securities, or
foreign currencies or forward contracts thereon that are not directly
related to the Trust's principal business of investing in securities, that
are held for less than three months ("Short-Short Limitation"); (3) at the
close of each quarter of the Trust's taxable year, at least 50% of the

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<PAGE>

value of its total assets must be represented by cash and cash items, U.S.
Government securities, securities of other RICs, and other securities,
with those other securities limited, in respect of any one issuer, to an
amount that does not exceed 5% of the value of the Trust's total assets
and that does not represent more than 10% of the issuer's outstanding
voting securities; and (4) at the close of each quarter of the Trust's
taxable year, not more than 25% of the value of its total assets may be
invested in securities (other than U.S. Government securities or the
securities of other RICs) of any one issuer.

The Trust will be subject to a nondeductible 4% excise tax
("Excise Tax") to the extent it fails to distribute by the end of any
calendar year substantially all of its ordinary income for that year and
its capital gain net income for the one-year period ending on October 31
of that year, plus certain other amounts.

A redemption of Trust shares will result in a taxable gain or
loss to the redeeming shareholder, depending on whether the redemption
proceeds are more or less than the shareholder's adjusted basis for the
redeemed shares (which normally includes any sales load paid on A shares).
An exchange of Trust shares for shares of another Heritage Mutual Fund
generally will have similar tax consequences. However, special rules
apply when a shareholder disposes of Trust shares through a redemption or
exchange within 90 days after purchase thereof and subsequently reacquires
shares of the Trust or acquires shares of another Heritage Mutual Fund
without paying a sales load due to the 30-day reinstatement or exchange
privilege. In these cases, any gain on the disposition of the original
Trust shares will be increased, or loss decreased, by the amount of the
sales load paid when those shares were acquired, and that amount will
increase the adjusted basis of the shares subsequently acquired. In
addition, if Trust shares are purchased (whether pursuant to the
reinstatement privilege or otherwise) within 30 days before or after
redeeming a portion of that loss will not be deductible and will increase
the basis of the newly purchased shares.

If Trust shares are sold at a loss after being held for six
months or less, the loss will be treated as long-term, instead of
short-term, capital loss to the extent of any capital gain distributions
received on those shares. Investors also should be aware that if shares
are purchased shortly before the record date for a dividend or other
distribution, the shareholder will pay full price for the shares and
receive some portion of the price back as a taxable distribution.

Dividends and interest received by the Trust may be subject to
income, withholding or other taxes imposed by foreign countries and U.S.
possessions that would reduce the yield on its securities. Tax
conventions between certain countries and the United States may reduce or
eliminate these foreign taxes, however, and many foreign countries do not
impose taxes on capital gains in respect of investments by foreign
investors.

- 17 -
<PAGE>

The Trust may invest in the stock of "passive foreign investment
companies" ("PFICs"). A PFIC is a foreign corporation that, in general,
meets either of the following tests: (1) at least 75% of its gross income
is passive or (2) an average of at least 50% of its assets produce, or are
held for the production of, passive income. Under certain circumstances,
the Trust will be subject to Federal income tax on a portion of any
"excess distribution" received on stock it holds in a PFIC or of any gain
on disposition of the stock (collectively "PFIC income"), plus interest
thereon, even if the Trust distributes the PFIC income as a taxable
dividend to its shareholders. The balance of the PFIC income will be
included in the Trust's investment company taxable income and,
accordingly, will not be taxable to it to the extent that income is
distributed to its shareholders.

If the Trust invests in a PFIC and elects to treat the PFIC as a
"qualified electing fund," then in lieu of the foregoing tax and interest
obligation, the Trust would be required to include in income each year its
pro rata share of the qualified electing fund's annual ordinary earnings
and net capital gain (the excess of net long-term capital gain over net
short-term capital loss) -- which most likely would have to be distributed
to satisfy the Distribution Requirement and avoid imposition of the Excise
Tax -- even if those earnings and gain were not received by the Trust. In
most instances it will be very difficult, if not impossible, to make this
election because of certain requirements thereof.

Pursuant to proposed regulations, open-end RICs, such as the
Trust, would be entitled to elect to "mark-to-market" their stock in
certain PFICs. "Marking-to-market," in this context, means recognizing as
gain for each taxable year the excess, as of the end of that year, of the
fair market value of a PFIC's stock over the adjusted basis in that stock
(including mark-to-market gain for each prior year for which an election
was in effect).

The use of hedging strategies, such as purchasing and selling
futures contracts and entering into forward contracts, involves complex
rules that will determine for income tax purposes the character and timing
of recognition of the gains and losses the Trust realizes in connection
therewith. Gains from the disposition of foreign currencies (except
certain gains therefrom that may be excluded by future regulations), and
gains from forward contracts derived by the Trust with respect to its
business of investing in securities or foreign currencies, will qualify as
permissible income under the Income Requirement. However, income from the
disposition of foreign currencies, and forward contracts thereon, that are
not directly related to the Trust's principal business of investing in
securities will be subject to the Short-Short Limitation if they are held
for less than three months.

Investors are advised to consult their own tax advisers regarding
the status of an investment in the Trust under state and local tax laws.

- 18 -
<PAGE>

TRUST INFORMATION
-----------------

Management of the Trust
-----------------------

Trustees and Officers. Trustees and officers are listed below
with their addresses, principal occupations and present positions,
including any affiliation with Raymond James Financial, Inc. ("RJF"), RJA,
the Manager (also referred to herein as "Heritage"), and Eagle.

<TABLE>
<CAPTION>
Position with Principal Occupation
Name the Trust During Past Five Years
---- ------------- ----------------------

Thomas A. James* Trustee Chairman of the Board since 1986 and Chief
880 Carillon Parkway Executive Officer since 1969 of RJF; Chairman
St. Petersburg, FL of the Board of RJA since 1986; Chairman of
33716 the Board of Eagle Asset Management, Inc.
("Eagle") since 1984 and Chief Executive
Officer of Eagle since July 1994.

Richard K. Riess* Trustee President of Eagle, January 1995 to present,
880 Carillon Parkway Chief Operating Officer, July 1988 to present,
St. Petersburg, FL Executive Vice President, July 1988-December
33716 1993; President of Heritage Mutual Funds, June
1985-November 1991.

Donald W. Burton Trustee President of South Atlantic Capital
614 W. Bay Street Corporation (venture capital) since October
Suite 200 1981.
Tampa, FL 33606

C. Andrew Graham Trustee Vice President of Financial Designs Ltd. since
Financial Designs, 1992; Executive Vice President of the Madison
Ltd. Group, Inc., October 1991-1992; Principal of
1775 Sherman Street First Denver Financial Corporation (investment
Suite 1900 banking) since 1987.
Denver, CO 80203

David M. Phillips Trustee Chairman and Chief Executive Officer of CCC
World Trade Center Information Services, Inc. since 1994 and of
Chicago InfoVest Corporation (information services to
444 Merchandise Mart the insurance and auto industries and consumer
Chicago, IL 60654 households) since October 1982.

- 19 -
<PAGE>

Position with Principal Occupation
Name the Trust During Past Five Years
---- ------------- ----------------------

Eric Stattin Trustee Litigation Consultant/Expert Witness and
2587 Fairway Village private investor since February 1988.
Drive
Park City, UT
84060

James L. Pappas Trustee Dean of College of Business Administration
University of South since August 1987 and Lykes Professor of
Florida Banking and Finance since August 1986 at
College of Business University of South Florida.
Administration
Tampa, FL 33620

Stephen G. Hill President Chief Executive Officer and President of the
880 Carillon Parkway Manager since April 1989 and Director since
St. Petersburg, FL December 31, 1994.
33716

Donald H. Glassman Treasurer Treasurer of the Manager since May 1989;
880 Carillon Parkway Treasurer of Heritage Mutual Funds since May
St. Petersburg, FL 1989.
33716

Clifford J. Secretary Partner, Kirkpatrick & Lockhart LLP (law
Alexander firm).
1800 Massachusetts
Ave., N.W.
Washington, DC
20036

Patricia Schneider Assistant Compliance Administrator of the Manager.
880 Carillon Parkway Secretary
St. Petersburg, FL
33716

Robert J. Zutz Assistant Partner, Kirkpatrick & Lockhart LLP (law
1800 Massachusetts Secretary firm).
Ave., N.W.
Washington, DC
20036

* These Trustees are "interested persons" as defined in section 2(a)(19) of the 1940 Act.

</TABLE>

- 20 -
<PAGE>

The Trustees and officers of the Trust, as a group, own less than
1% of the Trust's shares outstanding. The Trust's Declaration of Trust
provides that the Trustees will not be liable for errors of judgment or
mistakes of fact or law. However, they are not protected against any
liability to which they would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of their office.

The Trust currently pays Trustees who are not "interested
persons" of the Trust $1,333.33 annually and $333.33 per meeting of the
Board of Trustees. Trustees also are reimbursed for any expenses incurred
in attending meetings. Because the Manager performs substantially all of
the services necessary for the operation of the Trust, the Trust requires
no employees. No officer, director or employee of the Manager receives
any compensation from the Trust for acting as a director or officer. The
following table shows the compensation earned by each Trustee for the
fiscal year ended August 31, 1995.

- 21 -
<PAGE>

<TABLE>
<CAPTION>
Compensation Table
Total
Compensation
Pension or From the Trust
Aggregate Retirement and the Heritage
Compensation Benefits Accrued Estimated Family of Funds
Name of Person, From the as Part of the Annual Benefits Paid
Position Trust Trust's Expenses Upon Retirement to Trustees
--------------- ------------ ---------------- --------------- ----------------

<S> <C> <C> <C> <C>
Donald W. Burton, Trustee $1,554 $0 $0 $14,000

C. Andrew Graham, Trustee $1,776 $0 $0 $16,000

David M. Phillips, Trustee $1,554 $0 $0 $14,000
Eric Stattin, $1,776 $0 $0 $16,000
Trustee

James L. Pappas, $1,776 $0 $0 $16,000
Trustee
Richard K. Riess, $0 $0 $0 $0
Trustee

Thomas A. James, $0 $0 $0 $0
Trustee
</TABLE>

- 22 -
<PAGE>

Investment Adviser and Administrator; Subadvisers
-------------------------------------------------

The Trust's investment adviser and administrator, Heritage
Asset Management, Inc., was organized as a Florida corporation in 1985.
All the capital stock of the Manager is owned by RJF. RJF is a holding
company that, through its subsidiaries, is engaged primarily in providing
customers with a wide variety of financial services in connection with
securities, limited partnerships, options, investment banking and related
fields.

Under an Investment Advisory and Administration Agreement
("Advisory Agreement") dated November 13, 1985, between the Trust and the
Manager and subject to the control and direction of the Board of Trustees,
the Manager is responsible for reviewing and establishing investment
policies for the Trust as well as administering the Trust's noninvestment
affairs. Under separate Subadvisory Agreements, Eagle Asset Management,
Inc. ("Eagle") and Liberty Asset Management, subject to direction by the
Manager and Board of Trustees, may provide investment advice and portfolio
management services to the Trust for a fee payable by the Manager. The
Manager has chosen not to allocate assets to Eagle at this time.

The Manager also is obligated to furnish the Trust with office
space, administrative, and certain other services as well as executive and
other personnel necessary for the operation of the Trust. The Manager and
its affiliates also pay all the compensation of Trustees of the Trust who
are employees of the Manager and its affiliates. The Trust pays all its
other expenses that are not assumed by the Manager. The Trust also is
liable for such nonrecurring expenses as may arise, including litigation
to which the Trust may be a party. The Trust also may have an obligation
to indemnify its Trustees and officers with respect to any such
litigation.

The Advisory Agreement and the Subadvisory Agreements each
were approved by the Board of Trustees of the Trust (including all of the
Trustees who are not "interested persons" of the Manager or Subadvisers,
as defined under the 1940 Act) and by the shareholders of the Trust in
compliance with the 1940 Act. Each Agreement will continue in force for a
period of two years unless its continuance is approved at least annually
thereafter by (1) a vote, cast in person at a meeting called for that
purpose, of a majority of those Trustees who are not "interested persons"
of the Manager, Subadvisers or the Trust, and by (2) the majority vote of
either the full Board of Trustees or the vote of a majority of the
outstanding shares of the Trust. The Advisory and Subadvisory Agreements
each automatically terminates on assignment, and each is terminable on not
more than 60 days' written notice by the Trust to either party. In
addition, the Advisory Agreement may be terminated on not less than 60
days' written notice by the Manager to the Trust and the Subadvisory
Agreement may be terminated on not less than 60 days' written notice by
the Manager or 90 days' written notice by the Subadvisers. Under the
terms of the Advisory Agreement, the Manager automatically becomes
responsible for the obligations of the Subadvisers upon termination of the

- 23 -
<PAGE>

Subadvisory Agreement. In the event the Manager ceases to be the manager
of the Trust or the Distributor ceases to be principal distributor of
Trust shares, the right of the Trust to use the identifying name of
"Heritage" may be withdrawn.

The Manager and the Subadvisers shall not be liable to the
Trust or any shareholder for anything done or omitted by them, except acts
or omissions involving willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties imposed upon them by their agreements
with the Trust or for any losses that may be sustained in the purchase,
holding or sale of any security.

All of the officers of the Trust except for Messrs. Alexander
and Zutz are officers or directors of the Manager. These relationships
are described under "Management of the Trust."

Advisory and Administration Fee. The annual investment
advisory fee paid monthly by the Trust to the Manager is based on the
Trust's average daily net assets as listed in the prospectus.

The Manager has voluntarily agreed to waive management fees to
the extent that total annual operating expenses attributable to A shares
exceed 2.0% of the average daily net assets or to the extent that total
annual operating expenses attributable to C shares exceed 2.5%. To the
extent that the Manager waives its fees for one class, it will waive its
fees for the other class on a proportionate basis. The Manager has
entered into an agreement with the Subadvisers to provide investment
advice and portfolio management services to the Trust for an annual fee
paid by the Manager equal to 50% of the fees payable to the Manager by the
Trust, without regard to any reduction in fees actually paid to the
Manager as a result of expense limitations. For the three fiscal years
ended August 31, 1993, 1994 and 1995, the Manager earned $698,597,
$748,946 and $711,510 (of which $174,649, $187,791 and $177,878 was
waived), respectively, and paid the Subadvisers $261,979, $280,978 and
$221,041, respectively.

Class-Specific Expenses. The Trust may determine to allocate
certain of its expenses (in addition to distribution fees) to the specific
classes of the Trust's shares to which those expenses are attributable.

State Expense Limitations. Certain states have established
expense limitations for investment companies whose shares are registered
for sale in that state. If the Trust's operating expenses (including the
investment advisory fee, but not including distribution fees, brokerage
commissions, interest, taxes and extraordinary expenses) exceed state
expense limits, the Manager will reimburse the Trust for its expenses over
the limitation. If the Trust's monthly projected operating expenses
exceed applicable state expense limitations, the investment advisory fee
paid will be reduced on a monthly basis by the amount of the excess,
unless waivers of the expense limitations are obtained by the Trust. If
applicable state expense limitations are exceeded, the amount to be
reimbursed by the Manager will be limited to the amount of the investment

- 24 -
<PAGE>

advisory fee and the Trust may have to cease offering its shares for sale
in such states until the expense ratio declines. Any fees waived by the
Manager can be recovered by it from the Trust when such recovery would not
cause the Trust to exceed its expense limits. The most restrictive
current state expense limit is 2.5% of the Trust's first $30 million in
average net assets, 2.0% of the next $70 million in average net assets and
1.5% of all excess average net assets.

Brokerage Practices
-------------------

While the Trust generally purchases securities for long-term
capital gains, it may engage in short-term transactions under various
market conditions to a greater extent than certain other mutual funds with
similar investment objectives. Thus, the turnover rate may vary greatly
from year to year or during periods within a year. The portfolio turnover
rate is computed by dividing the lesser of purchases or sales of
securities for the period by the average value of portfolio securities for
that period. The Trust's annualized portfolio turnover rate was 65% and
66% for the fiscal years ended August 31, 1994 and 1995, respectively.

The Subadvisers are responsible for the execution of the
Trust's portfolio transactions and must seek the most favorable price and
execution for such transactions. Best execution, however, does not mean
that the Trust necessarily will be paying the lowest commission or spread
available. Rather, the Trust also will take into account such factors as
size of the order, difficulty of execution, efficiency of the executing
broker's facilities, and any risk assumed by the executing broker.

It is a common practice in the investment advisory business
for advisers of investment companies and other intitutional investors to
receive research, statistical and quotation services from broker-dealers
who execute portfolio transactions for the clients of such advisers.
Consistent with the policy of most favorable price and execution, the
Subadvisers may give consideration to research, statistical and other
services furnished by brokers or dealers. In addition, the Subadvisers
may place orders with brokers who provide supplemental investment and
market research and securities and economic analysis and may pay to these
brokers a higher brokerage commission or spread than may be charged by
other brokers, provided that the Subadvisers determine in good faith that
such commission is reasonable in relation to the value of brokerage and
research services provided. Such research and analysis may be useful to
the Subadvisers in connection with services to clients other than the
Trust.

The Trust may use the Trust's Distributor as broker for agency
transactions in listed and over-the-counter securities at commission rates
and under circumstances consistent with the policy of best execution.
Commissions paid to the Distributor will not exceed "usual and customary
brokerage commissions." Rule l7e-1 under the 1940 Act defines "usual and
customary" commissions to include amounts that are "reasonable and fair
compared to the commission, fee or other remuneration received or to be

- 25 -
<PAGE>

received by other brokers in connection with comparable transactions
involving similar securities being purchased or sold on a securities
exchange during a comparable period of time."

The Subadvisers also may select other brokers to execute
portfolio transactions. In the over-the-counter market, the Trust
generally deals with primary market-makers unless a more favorable
execution can otherwise be obtained.

Aggregate brokerage commissions paid by the Trust for the
three fiscal years ended August 31, 1993, 1994 and 1995 amounted to
$120,084, $108,520 and $125,563, respectively. Those commissions were
paid on brokerage transactions worth $76,663,761, $69,736,476 and
$84,219,558, respectively. Aggregate brokerage commissions paid by the
Trust to the Distributor, an affiliated broker-dealer, amounted to
$38,345, $0 and $3,090, respectively, for the fiscal years ended August
31, 1993, 1994 and 1995 or 31.9%, 0% and 2.5%, respectively, of the
aggregate commissions paid. These commissions were paid on aggregate
brokerage transactions of $19,969,221 (or 26.0%), $0 (or 0%) and
$1,911,784 (or 2.3%), respectively, of the total aggregate brokerage
transactions.

The Trust may not buy securities from, or sell securities to,
the Distributor as principal. However, the Board of Trustees has adopted
procedures in conformity with Rule l0f-3 under the 1940 Act whereby the
Trust may purchase securities that are offered in underwritings in which
the Distributor is a participant. The Board of Trustees will consider the
possibilities of seeking to recapture for the benefit of the Trust
expenses of certain portfolio transactions, such as underwriting
commissions and tender offer solicitation fees, by conducting such
portfolio transactions through affiliated entities, including the
Distributor, but only to the extent such recapture would be permissible
under applicable regulations, including the rules of the National
Association of Securities Dealers, Inc. and other self-regulatory
organizations.

Pursuant to Section 11(a) of the Securities Exchange Act of
1934, as amended, the Trust expressly consented to the Distributor
executing transactions on an exchange on the Trust's behalf.

Distribution of Shares
----------------------

The Distributor and Representatives with whom the Distributor
has entered into dealer agreements offer shares of the Trust as agents on
a best efforts basis and are not obligated to sell any specific amount of
shares. Pursuant to its Distribution Agreement with the Trust with
respect to A shares and C shares, the Distributor bears the cost of making
information about the Trust available through advertising, sales
literature and other means, the cost of printing and mailing prospectuses
to persons other than shareholders, and salaries and other expenses
relating to selling efforts. The Distributor also pays service fees to

- 26 -
<PAGE>

dealers for providing personal services to Class A and C shareholders and
for maintaining shareholder accounts. The Trust pays the cost of
registering and qualifying its shares under state and federal securities
laws and typesetting of its prospectuses and printing and distributing
prospectuses to existing shareholders.

As compensation for the services provided and expenses borne
by the Distributor pursuant to the Distribution Agreement with respect to
A shares, the Trust pays the Distributor the sales load described in the
prospectus and a 12b-1 fee in accordance with the Class A Plan described
below. The distribution fee is accrued daily and paid monthly, and the
Trust may pay an amount up to .50% of the average daily net assets
attributable to A shares. The Trust currently pays the Distributor a fee
of up to 0.25% on A shares purchased prior to April 3, 1995. For the
fiscal year ended August 31, 1995, these fees amounted to $354,505, all of
which was paid to the Distributor.

As compensation for the services provided and expenses borne
by the Distributor pursuant to the Distribution Agreement with respect to
C shares, the Trust pays the Distributor a 12b-1 fee in accordance with
the Class C Plan described below. The fee is accrued daily and paid
monthly, and currently is equal on an annual basis of an amount up to .75%
of average daily net assets. The service fee is accrued daily and paid
monthly, and currently is equal on an annual basis of an amount up to .25%
of average daily net assets. For the fiscal period April 3, 1995
(commencement of offering of C shares) to August 31, 1995, these fees
amount to $981, all of which was paid to the Distributor.

In reporting amounts expended under the Plans to the Board of
Trustees, the Distributor will allocate expenses attributable to the sale
of A shares and C shares to the applicable class based on the ratio of
sales of shares of that class to the sales of all Trust shares. The fees
paid by one class of shares will not be used to subsidize the sale of any
other class of shares.

The Trust has adopted a Class A Distribution Plan (the "Class
A Plan") which, among other things, permits it to pay the Distributor the
above-described fee out of its net assets to finance activity that is
intended to result in the sale and retention of A shares. As required by
Rule 12b-1 under the 1940 act, the Class A Plan was approved by the
shareholders of the Trust and the Board of Trustees, including a majority
of the Trustees who are not interested persons of the Trust (as defined in
the 1940 Act) and who have no direct or indirect financial interest in the
operation of the Plan or the Distribution Agreement (the "Independent
Trustees") after determining that there is a reasonable likelihood that
the Trust and its Class A shareholders will benefit from the Class A Plan.

The Trust also has adopted a Class C Distribution Plan (the
"Class C Plan") which, among other things, permits it to pay the
Distributor the above-described fee out of its net assets to finance
activity that is intended to result in the sale and retention of C shares.
The Class C Plan was approved by the Board of Trustees, including a

- 27 -
<PAGE>

majority of the Independent Trustees after determining that there is a
reasonable likelihood that the Trust and its Class C shareholders will
benefit from the Class C Plan.

The Class A Plan and the Class C Plan each may be terminated
by vote of a majority of the Independent Trustees or by vote of a majority
of the outstanding voting securities of the Trust. The Board of Trustees
review quarterly a written report of Plan costs and the purposes for which
such costs have been incurred. A Plan may be amended by vote of the Board
of Trustees, including a majority of the Independent Trustees cast in
person at a meeting called for such purpose. Any change in a Plan that
would materially increase the distribution cost to a class requires the
approval of that class of shareholders.

The Distribution Agreement may be terminated at any time on 60
days' written notice without payment of any penalty by either party. The
Trust may effect such termination by vote of a majority of the outstanding
voting securities of the Trust or by vote of a majority of the Independent
Trustees. For so long as either the Class A Plan or the Class C Plan is
in effect, selection and nomination of the Independent Trustees shall be
committed to the discretion of such disinterested persons.

The Distribution Agreement and each of the above-referenced
Plans will continue in effect for successive one-year periods, provided
that each such continuance is specifically approved (1) by the vote of a
majority of the Independent Trustees and (2) by the vote of a majority of
the entire Board of Trustees cast in person at a meeting called for that
purpose.

For the fiscal years ended August 31, 1993, 1994 and 1995, the
Distributor received $154,821, $157,275 and $82,837, respectively, as
compensation for the sale of A shares, of which it retained $21,500,
$27,316 and $11,855, respectively.

Administration of the Trust
---------------------------

Administrative, Fund Accounting and Transfer Agent Services.
The Manager, subject to the control of the Board of Trustees, will manage,
supervise and conduct the administrative and business affairs of the
Trust; furnish office space and equipment; oversee the activities of the
Subadvisers and Custodian; and pay all salaries, fees and expenses of
officers and Trustees of the Trust who are affiliated with the Manager.
The Manager also will provide certain shareholder servicing activities for
customers of the Trust.

The Manager also is the fund accountant and transfer and
dividend disbursing agent for the Trust. The Trust pays the Manager the
Manager's cost plus ten percent for its services as fund accountant and
transfer and dividend disbursing agent. For the three fiscal years ended
August 31, 1993, 1994 and 1995, the Manager earned $41,886, $57,272 and
$59,519, respectively, from the Trust for its services as transfer agent.

- 28 -
<PAGE>

For the period March 1, 1994 (commencement of Manager's engagement as fund
accountant) to August 31, 1994 and the fiscal year ended August 31, 1995,
the Manager earned $13,511 and $32,742, respectively, from the Trust for
its services as fund accountant.

Custodian. State Street Bank and Trust Company, P.O. Box
1912, Boston, Massachusetts 02105, serves as custodian of the Trust's
assets and provides portfolio accounting and certain other services.

Legal Counsel. Kirkpatrick & Lockhart LLP of 1800
Massachusetts Avenue, N.W., Washington, D.C. 20036, serves as counsel to
the Trust. Schifino & Fleischer, P.A. of 1 Tampa City Center, Suite 2700,
Tampa, Florida 33602, serves as counsel to the Distributor and the
Manager.

Independent Accountants. Coopers & Lybrand L.L.P., One Post
Office Square, Boston, Massachusetts 02109, is the independent accountant
for the Trust. The Financial Statements and Financial Highlights of the
Trust which appear in this Statement of Additional Information have been
audited by Coopers & Lybrand L.L.P. and included herein in reliance upon
the report of said firm of accountants, which is given upon its authority
as an expert in accounting and auditing.

Potential Liability
-------------------

Under certain circumstances, shareholders may be held
personally liable as partners under Massachusetts law for obligations of
the Trust. To protect its shareholders, the Trust has filed legal
documents with Massachusetts that expressly disclaim the liability of its
shareholders for acts or obligations of the Trust. These documents
require notice of this disclaimer to be given in each agreement,
obligation or instrument the Trust or its Trustees enter into or sign. In
the unlikely event a shareholder is held personally liable for the Trust's
obligations, the Trust is required to use its property to protect or
compensate the shareholder. On request, the Trust will defend any claim
made and pay any judgment against a shareholder for any act or obligation
of the Trust. Therefore, financial loss resulting from liability as a
shareholder will occur only if the Trust itself cannot meet its
obligations to indemnify shareholders and pay judgments against them.

- 29 -
<PAGE>

APPENDIX A
----------

COMMERCIAL PAPER RATINGS

The rating services' descriptions of commercial paper ratings in which the
Trust may invest are:

Description of Moody's Investors Service, Inc. Commercial Paper Ratings
-----------------------------------------------------------------------

Prime-1. Issuers (or supporting institutions) rated Prime-1 (P-1) have a
superior ability for repayment of senior short-term debt obligations. P-1
repayment ability will often be evidenced by many of the following
characteristics: leading market positions in well-established industries;
high rates of return on funds employed; conservative capitalization
structure with moderate reliance on debt and ample asset protection; broad
margins in earnings coverage of fixed financial charges and high internal
cash generation; well established access to a range of financial markets
and assured sources of alternate liquidity.

Prime-2. Issuers (or supporting institutions) rated Prime-2 (P-2) have a
strong ability for repayment of senior short-term debt obligations. This
will normally be evidenced by many of the characteristics cited above, but
to a lesser degree. Earnings trends and coverage ratios, while sound, may
be more subject to variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained.

Description of Standard & Poor's Commercial Paper Ratings
---------------------------------------------------------

A-1. This designation indicates that the degree of safety regarding
timely payment is very strong. Those issues determined to possess
extremely strong characteristics are denoted with a plus sign (+)
designation.

A-2. Capacity for timely payment of issues with this designation is
satisfactory. However, the relative degree of safety is not as high as
for issues designated "A-1."

A-1
<PAGE>

<PAGE> 1

- --------------------------------------------------------------------------------

REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------

To the Shareholders and Board of Trustees of
Heritage Capital Appreciation Trust:

We have audited the accompanying statement of assets and liabilities of
Heritage Capital Appreciation Trust, including the investment portfolio, as of
August 31, 1995, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the periods
indicated therein. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
August 31, 1995 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Heritage Capital Appreciation Trust as of August 31, 1995, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the periods indicated therein, in conformity with generally accepted accounting
principles.

/s/ Coopers & Lybrand

Boston, Massachusetts
October 12, 1995

15
<PAGE> 2

- --------------------------------------------------------------------------------
HERITAGE CAPITAL APPRECIATION TRUST
INVESTMENT PORTFOLIO
AUGUST 31, 1995
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
MARKET
VALUE
-----------
<S> <C>
REPURCHASE AGREEMENT--8.1%
- -------------------------
Repurchase Agreement with State Street Bank and Trust Company, dated August 31, 1995, @ 5.75%, to be
repurchased at $5,940,949 on September 1, 1995, (collateralized by $4,915,000 United States Treasury
Notes, 8.875%, due August 15, 2017, with a market value of $6,100,927, including interest)(cost
$5,940,000)........................................................................................... $ 5,940,000
-----------
</TABLE>

<TABLE>
<CAPTION>
SHARES
- -------------
<C> <S> <C>
COMMON STOCK--86.7%
- --------------------
BANKING--1.8%
- -------------
6,000 Crestar Financial Corporation....................................................... 338,250
5,000 Integra Financial Corporation....................................................... 280,625
20,000 MBNA Corporation.................................................................... 710,000
-----------
1,328,875
-----------
BROADCASTING--11.9%
- ------------------
80,000 Bell Cablemedia PLC, ADR*........................................................... 1,520,000
13,500 Capital Cities/ABC, Inc. ........................................................... 1,552,500
50,000 Comcast UK Cable Partners, Class "A"*............................................... 784,375
84,000 Gaylord Entertainment Company, Class "A"............................................ 2,331,000
25,000 Liberty Media Group, Class "A"*..................................................... 664,063
100,000 Tele-Communications, Inc., Class "A"*............................................... 1,850,000
-----------
8,701,938
-----------
CONGLOMERATES/DIVERSIFIED--1.9%
- ----------------------------
42,000 Corning, Inc. ...................................................................... 1,370,250
-----------
COSMETICS--1.3%
- --------------
14,000 Avon Products, Inc. ................................................................ 988,750
-----------
ELECTRONICS--4.9%
- ---------------
25,000 AVX Corporation*.................................................................... 793,750
27,500 Duracell International, Inc. ....................................................... 1,227,187
30,000 Reuters Holdings PLC, ADR........................................................... 1,571,250
-----------
3,592,187
-----------
FILMED ENTERTAINMENT--2.2%
- ------------------------
38,000 Time Warner, Inc. .................................................................. 1,600,750
-----------
FINANCE--12.8%
- -------------
41,500 AMBAC, Inc. ........................................................................ 1,753,375
45,000 Federal Home Loan Mortgage Corporation.............................................. 2,891,250
30,000 Federal National Mortgage Association............................................... 2,861,250
15,000 First Data Corporation.............................................................. 875,625
19,000 Student Loan Marketing Association.................................................. 1,028,375
-----------
9,409,875
-----------
FOOD SERVING--1.9%
- -----------------
45,000 IHOP Corporation*................................................................... 1,153,125
50,000 TPI Enterprises, Inc.*.............................................................. 225,000
-----------
1,378,125
-----------
GLASS PRODUCTS--2.5%
- -------------------
80,000 Libbey, Inc. ....................................................................... 1,820,000
-----------
</TABLE>

The accompanying notes are an integral part of the financial statements.

7
<PAGE> 3

- --------------------------------------------------------------------------------
HERITAGE CAPITAL APPRECIATION TRUST
INVESTMENT PORTFOLIO
AUGUST 31, 1995
(CONTINUED)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
MARKET
SHARES VALUE
- ------------- -----------
<C> <S> <C>
HEALTH CARE CENTERS--1.8%
- -----------------------
40,000 Beverly Enterprises, Inc.*.......................................................... $ 530,000
50,000 Tenet Healthcare Corporation*....................................................... 793,750
-----------
1,323,750
-----------
HOTELS/MOTELS--1.7%
- ------------------
35,000 Marriott International, Inc. ....................................................... 1,242,500
-----------
INSURANCE--0.9%
- -------------
50,000 Western National Corporation........................................................ 625,000
-----------
LAND DEVELOPMENT--1.4%
- ----------------------
50,000 Rouse Company*...................................................................... 1,056,250
-----------
LEISURE/AMUSEMENT--5.1%
- -----------------------
32,000 Circus Circus Enterprises, Inc.*.................................................... 1,048,000
40,000 Harrah's Entertainment, Inc.*....................................................... 1,275,000
10,000 Hasbro, Inc. ....................................................................... 323,750
32,500 Mirage Resorts, Inc.*............................................................... 1,117,188
-----------
3,763,938
-----------
MEDICAL EQUIPMENT/SUPPLY--2.7%
- -----------------------------
110,000 Amsco International, Inc.*.......................................................... 1,966,250
-----------
PHARMACEUTICALS--0.6%
- -------------------
6,000 Pharmacia Aktiebolag, ADR........................................................... 165,750
7,000 Upjohn Company...................................................................... 296,625
-----------
462,375
-----------
POLLUTION CONTROL--2.0%
- ---------------------
45,000 Wheelabrator Technologies, Inc. .................................................... 703,125
25,000 WMX Technologies, Inc. ............................................................. 734,375
-----------
1,437,500
-----------
PUBLISHING--8.7%
- ---------------
18,000 A.H. Belo Corporation, Class "A".................................................... 632,250
30,000 Gannett Company..................................................................... 1,605,000
48,000 The E.W. Scripps Company, Class "A"................................................. 1,614,000
20,000 Tribune Company..................................................................... 1,340,000
80,000 Valassis Communications, Inc.*...................................................... 1,190,000
-----------
6,381,250
-----------
REAL ESTATE INVESTMENT TRUST--0.7%
- ------------------------------
30,000 Manufactured Home Communities, Inc.................................................. 487,500
-----------
SERVICES--2.6%
- ------------
55,000 Service Corporation International................................................... 1,925,000
-----------
TELECOMMUNICATIONS--12.2%
- ------------------------
50,000 AT&T Corporation.................................................................... 2,825,000
80,000 Airtouch Communications, Inc.*...................................................... 2,600,000
50,000 Telephone & Data Systems, Inc. ..................................................... 2,050,000
35,000 Vodafone Group PLC, Sponsored ADR................................................... 1,465,625
-----------
8,940,625
-----------
TOBACCO--2.3%
- -------------
60,000 RJR Nabisco Holdings Corporation.................................................... 1,710,000
-----------
</TABLE>

The accompanying notes are an integral part of the financial statements.

8
<PAGE> 4

<TABLE>
<CAPTION>
MARKET
SHARES VALUE
- ------------- -----------
<C> <S> <C>
UTILITIES--2.8%
- ------------
70,000 AES Corporation*.................................................................... $ 1,295,000
35,000 Sithe Energies, Inc.*............................................................... 315,000
20,000 UGI Corporation..................................................................... 427,500
-----------
2,037,500
-----------
Total common stocks (cost $49,029,500)............................................................. 63,550,188
-----------
CONVERTIBLE PREFERRED STOCK--3.7%
- -----------------------------
CELLULAR COMMUNICATIONS
- ---------------------
50,000 Cellular Communications, Inc., Class "A"*........................................... 2,725,000
-----------
Total convertible preferred stock (cost $1,563,283)................................................ 2,725,000
-----------
DEBT EXCHANGEABLE FOR COMMON STOCK (DECS)--1.4%
- ------------------------------------------------
DATA PROCESSING
- --------------
20,000 American Express Company, 6.25%, maturing 10/15/96.................................. 987,500
-----------
Total DECS (cost $735,000)......................................................................... 987,500
-----------
TOTAL INVESTMENT PORTFOLIO (cost $57,267,783)(b), 99.9%(a)......................................... 73,202,688
OTHER ASSETS AND LIABILITIES, NET, 0.1%(a)......................................................... 77,636
-----------
NET ASSETS 100.0%.................................................................................. $73,280,324
==========
</TABLE>

- ------------------

* Not an income-producing security.
(a) Percentages indicated are based on net assets.
(b) The aggregate identified cost for federal income tax purposes is
$57,276,021. Market value includes net unrealized appreciation of
$15,926,667, which consists of aggregate gross unrealized appreciation for
all securities in which there is an excess of market value over tax cost of
$16,613,493 and aggregate gross unrealized depreciation for all securities
in which there is an excess of tax cost over market value of $686,826.
ADR--American Depository Receipt

The accompanying notes are an integral part of the financial statements.

9
<PAGE> 5

- --------------------------------------------------------------------------------
HERITAGE CAPITAL APPRECIATION TRUST
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, 1995
- --------------------------------------------------------------------------------

<TABLE>
<S> <C> <C>
Assets
Investments, at market value (identified cost $51,327,783) (Note 1)......................... $67,262,688
Repurchase agreement (identified cost $5,940,000) (Note 1).................................. 5,940,000
Cash........................................................................................ 1,778
Receivables:
Investments sold.......................................................................... 112,228
Fund shares sold.......................................................................... 59,381
Dividends and interest.................................................................... 78,403
Deferred state registration expenses (Note 1)............................................... 14,543
Prepaid insurance........................................................................... 4,319
-----------
Total assets........................................................................ 73,473,340
Liabilities
Payables (Note 4):
Investments purchased..................................................................... $30,870
Fund shares redeemed...................................................................... 24,093
Accrued management fee.................................................................... 44,428
Accrued distribution fee.................................................................. 30,971
Accrued professional fees................................................................. 26,903
Other accrued expenses.................................................................... 35,751
-------
Total liabilities................................................................... 193,016
-----------
Net assets, at market value................................................................. $73,280,324
===========
Net Assets
Net assets consist of:
Undistributed net investment income....................................................... $ 202,995
Net unrealized appreciation on investments................................................ 15,934,905
Accumulated net realized gain............................................................. 5,514,345
Paid-in capital........................................................................... 51,628,079
-----------
Net assets, at market value................................................................. $73,280,324
===========
Class A Shares
Net asset value and redemption price per share ($72,837,320 divided by 4,690,175 shares of
beneficial interest outstanding, no par value) (Note 2)................................... $15.53
===========
Maximum offering price per share (100/95.25 of $15.53)...................................... $16.30
===========
Class C Shares
Net asset value, offering price and redemption price per share ($443,004 divided by 28,578
shares of beneficial interest outstanding, no par value) (Notes 1 and 2).................. $15.50
===========
</TABLE>

The accompanying notes are an integral part of the financial statements.

10
<PAGE> 6

- --------------------------------------------------------------------------------
HERITAGE CAPITAL APPRECIATION TRUST
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED AUGUST 31, 1995
- --------------------------------------------------------------------------------

<TABLE>
<S> <C> <C>
Investment Income
Income:
Dividends.............................................................................. $ 900,342
Interest............................................................................... 597,661
-----------
Total income..................................................................... 1,498,003
Expenses (Notes 1 and 4):
Management fee......................................................................... $ 711,510
Distribution fee....................................................................... 355,486
Professional fees...................................................................... 83,632
Shareholder servicing.................................................................. 59,519
Custodian/Fund accounting fees......................................................... 50,331
Amortization of state registration expenses............................................ 33,606
Reports to shareholders................................................................ 16,583
Trustees' fees and expenses............................................................ 9,223
Insurance.............................................................................. 7,600
Other.................................................................................. 2,155
----------
Total expenses before waiver..................................................... 1,329,645
Fees waived by Manager (Note 4)........................................................ (177,878) 1,151,767
---------- -----------
Net investment income.................................................................... 346,236
-----------
Realized and Unrealized Gain on Investments
Net realized gain from investment transactions........................................... 6,822,883
Net increase in unrealized appreciation of investments during the year................... 127,074
-----------
Net gain on investments.......................................................... 6,949,957
-----------
Net increase in net assets resulting from operations..................................... $ 7,296,193
===========
</TABLE>

- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
FOR THE YEARS ENDED
-----------------------------------
AUGUST 31, 1995 AUGUST 31, 1994
--------------- ---------------
<S> <C> <C>
Decrease in net assets:
Operations:
Net investment income........................................................ $ 346,236 $ 115,326
Net realized gain from investment transactions............................... 6,822,883 6,641,529
Net increase (decrease) in unrealized appreciation of investments during the
year....................................................................... 127,074 (1,517,671)
------------- -------------
Net increase in net assets resulting from operations......................... 7,296,193 5,239,184
Distributions to shareholders from:
Net investment income, Class A Shares, ($.06 and $.03 per share,
respectively).............................................................. (258,567) (158,881)
Net realized gains, Class A Shares, ($1.16 and $1.36 per share,
respectively).............................................................. (5,533,950) (6,632,397)
Increase (decrease) in net assets from Fund share transactions (Note 2)........ (2,600,669) 648,126
------------- -------------
Decrease in net assets......................................................... (1,096,993) (903,968)
Net assets, beginning of year.................................................. 74,377,317 75,281,285
------------- -------------
Net assets, end of year (including undistributed net investment income of
$202,995 and $115,326, respectively)......................................... $73,280,324 $74,377,317
============= =============
</TABLE>

The accompanying notes are an integral part of the financial statements.

11
<PAGE> 7

- --------------------------------------------------------------------------------
HERITAGE CAPITAL APPRECIATION TRUST
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------

The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the financial
statements.
<TABLE>
<CAPTION>
CLASS A SHARES
FOR THE YEARS ENDED AUGUST 31,
--------------------------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989 1988
-------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD........................ $ 15.30 $ 15.62 $ 13.64 $ 12.55 $ 10.62 $ 14.48 $ 10.74 $ 13.31
-------- -------- -------- -------- -------- -------- -------- --------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss)...................... 0.08(a) 0.02(a) 0.03(a) 0.15(a) 0.28(a) 0.29(b) 0.14(b) 0.08(a)
Net realized and unrealized
gain (loss) on
investments................. 1.37 1.05 3.29 1.19 1.97 (2.82) 3.77 (1.39)
-------- -------- -------- -------- -------- -------- -------- --------
Total from Investment
Operations.................. 1.45 1.07 3.32 1.34 2.25 (2.53) 3.91 (1.31)
-------- -------- -------- -------- -------- -------- -------- --------
LESS DISTRIBUTIONS:
Dividends from net investment
income...................... (0.06) (0.03) (0.07) (0.25) (0.32) (0.19) (0.06) (0.11)
Distributions from net
realized gains.............. (1.16) (1.36) (1.27) -- -- (1.14) (0.11) (1.15)
-------- -------- -------- -------- -------- -------- -------- --------
Total Distributions........... (1.22) (1.39) (1.34) (0.25) (0.32) (1.33) (0.17) (1.26)
-------- -------- -------- -------- -------- -------- -------- --------
NET ASSET VALUE, END OF
PERIOD........................ $ 15.53 $ 15.30 $ 15.62 $ 13.64 $ 12.55 $ 10.62 $ 14.48 $ 10.74
======== ======== ======== ======== ======== ======== ======== ========
TOTAL RETURN(%)(E)............. 10.85 7.07 25.72 10.78 21.73 (18.73) 36.88 (8.75)
RATIOS (%)/SUPPLEMENTAL DATA:
Operating expenses, net, to
average daily net assets.... 1.62(a) 1.55(a) 1.56(a) 1.66(a) 1.86(a) 1.96(b) 2.00(b) 2.00(a)
Net investment income (loss)
to average daily net
assets...................... .49 .15 .24 1.09 2.38 2.54 1.19 .62
Portfolio turnover rate....... 66 65 55 57 80 45 60 103
Net assets, end of period ($
millions)................... 73 74 75 65 63 58 62 43

<CAPTION>
CLASS C
SHARES
-----------
1987 1986+ 1995++
-------- -------- -----------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD........................ $ 11.52 $ 9.70 $ 14.18
-------- -------- -----------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss)...................... 0.08(b) 0.07(a) (0.01)(a)
Net realized and unrealized
gain (loss) on
investments................. 1.80 1.75 1.33
-------- -------- -----------
Total from Investment
Operations.................. 1.88 1.82 1.32
-------- -------- -----------
LESS DISTRIBUTIONS:
Dividends from net investment
income...................... (0.05) -- --
Distributions from net
realized gains.............. (0.04) -- --
-------- -------- -----------
Total Distributions........... (0.09) -- --
-------- -------- -----------
NET ASSET VALUE, END OF
PERIOD........................ $ 13.31 $ 11.52 $ 15.50
======== ======== ===========
TOTAL RETURN(%)(E)............. 16.49 18.76(d) 9.31(d)
RATIOS (%)/SUPPLEMENTAL DATA:
Operating expenses, net, to
average daily net assets.... 2.00(b) 2.00(a)(c) 2.17(a)(c)
Net investment income (loss)
to average daily net
assets...................... .74 1.40(c) (0.33)(c)
Portfolio turnover rate....... 48 21(c) 66
Net assets, end of period ($
millions)................... 55 40 .4
</TABLE>

- ---------------

+ For the period December 12, 1985 (commencement of operations) to August 31,
1986.
++ For the period April 3, 1995 (commencement of Class C Shares) to August 31,
1995.
(a) Excludes management fees waived by the Manager in the amount of less than
$0.04, $0.04, $0.04, $0.03, $0.01, $0.01 and $0.02 per Class A Share,
respectively. The operating expense ratios including such items would be
1.87%, 1.81%, 1.81%, 1.84%, 1.87%, 2.06% and 2.31% (annualized) for Class A
Shares, respectively. Excludes management fees waived by the Manager in the
amount of less than $0.04 per Class C Share. The operating expense ratio
including such items would be 2.42% (annualized) for Class C Shares.
(b) Includes management fees previously waived by the Manager and recovered
during the year of less than $0.01 per share.
(c) Annualized.
(d) Not annualized.
(e) Does not reflect the imposition of a sales charge.

12
<PAGE> 8

- --------------------------------------------------------------------------------
HERITAGE CAPITAL APPRECIATION TRUST
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

Note 1: SIGNIFICANT ACCOUNTING POLICIES. Heritage Capital Appreciation Trust
(the "Fund") is organized as a Massachusetts business trust and is
registered under the Investment Company Act of 1940, as amended, as a
diversified, open-end management investment company. The Fund currently
issues Class A and Class C Shares. Class A Shares are sold subject to a
maximum sales charge of 4.75% of the amount invested payable at the time
of purchase. Class C Shares which were offered to shareholders beginning
April 3, 1995 are sold subject to a contingent deferred sales charge of
1% of the lower of net asset value or purchase price payable upon any
redemptions within one year after purchase. The policies described below
are followed consistently by the Fund in the preparation of its
financial statements in conformity with generally accepted accounting
principles.

Security Valuation: The Fund values investment securities at market
value based on the last quoted sales price as reported by the principal
securities exchange on which the security is traded. If no sale is
reported, market value is based on the most recent quoted bid price and
in the absence of a market quote, securities are valued using such
methods as the Board of Trustees believes would reflect fair market
value. Short term investments having a maturity of 60 days or less are
valued at cost which, when combined with accrued interest included in
interest receivable or discount earned, approximates market.

Repurchase Agreements: The Fund enters into repurchase agreements
whereby the Fund, through its custodian, receives delivery of the
underlying securities, the market value of which at the time of purchase
is required to be an amount equal to at least 100% of the resale price.

Federal Income Taxes: The Fund's policy is to comply with the
requirements of the Internal Revenue Code of 1986, as amended, which are
applicable to regulated investment companies and to distribute
substantially all of its taxable income to its shareholders.
Accordingly, no provision has been made for federal income and excise
taxes.

Distribution of Income and Gains: Distributions of net investment income
are made annually. Net realized gains from investment transactions
during any particular year in excess of available capital loss
carryforwards, which, if not distributed, would be taxable to the Fund,
will be distributed to shareholders in the following fiscal year. The
Fund uses the identified cost method for determining realized gain or
loss on investments for both financial and federal income tax reporting
purposes. Of the $6,641,529 of realized gains for the year ended August
31, 1994 the Fund has designated $2,726,444 as net long-term capital
gains on a tax basis paid in 1995.

State Registration Expenses: State registration fees are amortized based
either on the time period covered by the registration or as related
shares are sold, whichever is appropriate for each state.

Capital Accounts: The Fund reports the undistributed net investment
income and accumulated net realized gain (loss) accounts on a basis
approximating amounts available for future tax distributions (or to
offset future taxable realized gains when a capital loss carryforward is
available). Accordingly, the Fund may periodically make
reclassifications among certain capital accounts without impacting the
net asset value of the Fund.

Other: Investment security transactions are accounted for on a trade
date plus one basis. Dividend income and distributions to shareholders
are recorded on the ex-dividend date. Interest income is recorded on the
accrual basis. Expenses of the Fund are allocated to each class of
shares based upon their relative percentage of current net assets of
dividend eligible shares. All expenses that are directly attributable to
a specific class of shares, such as distribution fees, are allocated to
that class.

Note 2: FUND SHARES. At August 31, 1995, there was an unlimited number of shares
of beneficial interest of no par value authorized.

Transactions in Class A Shares of the Fund during the years ended August
31, 1995 and 1994, were as follows:

<TABLE>
<CAPTION>
FOR THE YEARS ENDED
-------------------------------------------------------------
AUGUST 31, 1995 AUGUST 31, 1994
--------------------------- ---------------------------
CLASS A SHARES SHARES AMOUNT SHARES AMOUNT
--------------------------------------------------- ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Shares sold........................................ 315,129 $ 4,487,563 2,079,461 $ 32,311,244
Shares issued on reinvestment of distributions..... 428,528 5,682,169 448,374 6,680,774
Shares redeemed.................................... (913,985) (13,189,775) (2,487,289) (38,343,892)
---------- ------------ ---------- ------------
Net increase (decrease)............................ (170,328) $ (3,020,043) 40,546 $ 648,126
=========== ===========
Shares outstanding:
Beginning of year................................ 4,860,503 4,819,957
---------- ----------
End of year...................................... 4,690,175 4,860,503
========= =========
</TABLE>

13
<PAGE> 9

- --------------------------------------------------------------------------------
HERITAGE CAPITAL APPRECIATION TRUST
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
- --------------------------------------------------------------------------------

Transactions for Class C Shares of the Fund from April 3, 1995
(commencement of Class C Shares) to August 31, 1995 were as follows:

<TABLE>
<CAPTION>
CLASS C SHARES SHARES AMOUNT
---------------------------------------------------------------------------------------- ------ --------
<S> <C> <C>
Shares sold............................................................................. 29,005 $425,638
Shares redeemed......................................................................... (427) (6,264)
------ --------
Net increase............................................................................ 28,578 $419,374
========
Shares outstanding:
Beginning of period................................................................... --
------
End of period......................................................................... 28,578
======
</TABLE>

Note 3: PURCHASES AND SALES OF SECURITIES. For the year ended August 31, 1995,
purchases and sales of investment securities (excluding repurchase
agreements and short-term obligations) aggregated $39,863,365 and
$44,356,193, respectively.

Note 4: MANAGEMENT, SUBADVISORY, DISTRIBUTION, SHAREHOLDER SERVICING AGENT AND
TRUSTEES' FEES. Under the Fund's Investment Advisory and Administration
Agreement with Heritage Asset Management, Inc. (the "Manager"), the Fund
agrees to pay to the Manager a fee equal to an annualized rate of 1.00%
of the first $100,000,000 of the Fund's average daily net assets, and
0.75% of any excess over $100,000,000 of such net assets, computed daily
and payable monthly. Since January 2, 1992, the Manager has voluntarily
agreed to waive .25% of its fee on the first $100 million of average net
assets. Fees waived by the Manager for the year ended August 31, 1995
amounted to $177,878 ($.03770 per share).

Effective February 27, 1995, the Manager entered into an agreement with
Liberty Investment Management (the "Subadviser") to provide to the Fund
investment advice, portfolio management services (including the
placement of brokerage orders) and certain compliance and other services
for a fee payable, by the Manager, equal to an annualized rate of .25%
of average daily net assets, computed daily and paid monthly. From
December 1985 (commencement of operations) through February 26, 1995,
Eagle Asset Management, Inc., a wholly-owned subsidiary of Raymond James
Financial, Inc., was subadviser to the Fund. Although, Eagle remains a
subadviser to the Fund, there are no assets currently allocated to
Eagle.

The Manager is also the Dividend Paying and Shareholder Servicing Agent
for the Fund. The amount payable to the Manager for such expenses as of
August 31, 1995 was $9,000. In addition, the Manager performs Fund
Accounting services and charged $32,742 during the current year of which
$5,400 was payable as of August 31, 1995.

Pursuant to the Class A Distribution Plan adopted in accordance with
Rule 12b-1 of the Investment Company Act of 1940, as amended, the Fund
is authorized to pay Raymond James & Associates, Inc. (the
"Distributor") a service fee of up to .50% of the average daily net
assets for Class A Shares purchased on or before March 31, 1995. The
Fund may pay the Distributor .25% for Class A Shares purchased after
March 31, 1995. The Class C Distribution Plan provides for payments at
an annual rate of up to 1.00% of the average daily net assets. The
Distributor, on Class C Shares, may retain the first 12 months
distribution fee for reimbursement of amounts paid to the broker/dealer
at the time of purchase. Such fees are accrued daily and payable
monthly. During the period $354,505 and $981 were paid for distribution
fees for Class A Shares and Class C Shares, respectively. The Manager,
Distributor, Fund Accountant and Shareholder Servicing Agent are all
wholly-owned subsidiaries of Raymond James Financial, Inc.

Trustees of the Fund also serve as Trustees for Heritage Cash Trust,
Heritage Income-Growth Trust, Heritage Income Trust, Heritage Series
Trust and Heritage U.S. Government Income Fund, Mutual Funds that are
also advised by the Manager (collectively referred to as the Heritage
Mutual Funds). Each Trustee of the Heritage Mutual Funds who is not an
interested person of the Manager receives an annual fee of $8,000 and an
additional fee of $2,000 for each combined quarterly meeting of the
Heritage Mutual Funds attended. Trustees' fees and expenses are shared
equally by each of the Heritage Mutual Funds.

<PAGE>

HERITAGE CAPITAL APPRECIATION TRUST
-----------------------------------

PART C. OTHER INFORMATION
--------------------------

Item 24. Financial Statements and Exhibits
---------------------------------

(a) Financial Statements:

Included in Part A of the Registration Statement:

Financial Highlights - Class A shares for
the fiscal period December 12, 1985
(commencement of operations) to August
31, 1986 and each of the nine years ended
August 31, 1995; Class C shares for the
fiscal period April 3, 1995 (commencement
of operations) to August 31, 1995.

Included in Part B of the Registration Statement:

Investment Portfolio - August 31, 1995
Statement of Assets and Liabilities - August 31,
1995
Statement of Operations - for the year ended
August 31, 1995
Statement of Changes in Net Assets for the years
ended August 31, 1995 and August 31, 1994
Notes to Financial Statements
Report of Coopers & Lybrand L.L.P., Independent
Accountants, dated October 12, 1995

(b) Exhibits:

(1) Declaration of Trust (filed herewith)

(2) (a) Bylaws (filed herewith)

(b) Amended and Restated Bylaws (filed
herewith)

(3) Voting trust agreement -- none

(4) (a) Specimen security for Class A Shares**

(b) Specimen security for Class C Shares**

(5) (a) Investment Advisory and Administration
Agreement (filed herewith)

(b)(i) Subadvisory Agreement between
Heritage Asset Management, Inc. and
<PAGE>

Eagle Asset Management, Inc. (filed
herewith)

(b)(ii) Subadvisory Agreement between
Heritage Asset Management, Inc. and
Liberty Investment Management,
Inc., d/b/a Liberty Investment
Management (filed herewith)

(6) Distribution Agreement (filed herewith)

(7) Bonus, profit sharing or pension plans -- none

(8) Custodian Agreement (filed herewith)

(9) (a) Transfer Agency and Service Agreement
(filed herewith)

(b) Fund Accounting and Pricing Service
Agreement (filed herewith)

(10) Opinion and consent of counsel*

(11) Accountants' consent (filed herewith)

(12) Financial statements omitted from prospectus --
none

(13) Letter of investment intent (filed herewith)

(14) Prototype retirement plan**

(15) (a) Class A Plan pursuant to Rule 12b-1 (filed
herewith)

(b) Class C Plan pursuant to Rule 12b-1 (filed
herewith)

(16) Performance Computation Schedule (filed
herewith)

(17) (a) Financial Data Schedule Relating to
Class A (filed herewith)

(b) Financial Data Schedule Relating to
Class C (filed herewith)

(18) Plan pursuant to Rule 18f-3 -- none

------------------------

C-2
<PAGE>

* Incorporated by reference to the Trust's Rule 24f-2 Notice,
filed previously on October 27, 1995.

** To be filed by subsequent amendment.

Item 25. Persons Controlled by or under
Common Control with Registrant
------------------------------

None.

Item 26. Number of Holders of Securities
-------------------------------
Number of Record Holders
Title of Class November 30, 1995
-------------- -------------------------

Shares of Beneficial Interest
Class A Shares 5,027
Class C Shares 52

Item 27. Indemnification
---------------

Article XI, Section 2 of the Trust's Declaration of Trust provides
that:

(a) Subject to the exceptions and limitations contained in
Section (b) below:

(i) every person who is, or has been, a Trustee or officer
of the Trust (hereinafter referred to as "Covered Person") shall be
indemnified by the Trust to the fullest extent permitted by law against
liability and against all expenses reasonably incurred or paid by him in
connection with any claim, action, suit or proceeding in which he becomes
involved as a party or otherwise by virtue of his being or having been a
Trustee or officer and against amounts paid or incurred by him in the
settlement thereof;

(ii) the words "claim," "action," "suit," or "proceeding"
shall apply to all claims, actions, suits or proceedings (civil, criminal
or other, including appeals), actual or threatened while in office or
thereafter, and the words "liability" and "expenses" shall include,
without limitation, attorneys' fees, costs, judgments, amounts paid in
settlement, fines, penalties and other liabilities.

(b) No indemnification shall be provided hereunder to a Covered
Person:

(i) who shall have been adjudicated by a court or body
before which the proceeding was brought (A) to be liable to the Trust or
its Shareholders by reason of willful misfeasance, bad faith, gross

C-3
<PAGE>

negligence or reckless disregard of the duties involved in the conduct of
his office or (B) not to have acted in good faith in the reasonable belief
that his action was in the best interest of the Trust; or

(ii) in the event of a settlement, unless there has been a
determination that such Trustee or officer did not engage in willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office (A) by the court or other
body approving the settlement; (B) by at least a majority of those
Trustees who are neither interested persons of the Trust nor are parties
to the matter based upon a review of readily available facts (as opposed
to a full trial-type inquiry); or (C) by written opinion of independent
legal counsel based upon a review of readily available facts (as opposed
to a full trial-type inquiry); provided, however, that any Shareholder
may, by appropriate legal proceedings, challenge any such determination by
the Trustees, or by independent counsel.

(c) The rights of indemnification herein provided may be insured
against by policies maintained by the Trust, shall be severable, shall not
be exclusive of or affect any other rights to which any Covered Person may
now or hereafter be entitled, shall continue as to a person who has ceased
to be such Trustee or officer and shall inure to the benefit of the heirs,
executors and administrators of such a person. Nothing contained herein
shall affect any rights to indemnification to which Trust personnel, other
than Trustees and officers, and other persons may be entitled by contract
or otherwise under law.

(d) Expenses in connection with the preparation and presentation
of a defense to any claim, action, suit, or proceeding of the character
described in paragraph (a) of this Section 2 may be paid by the Trust from
time to time prior to final disposition thereof upon receipt of an
undertaking by or on behalf of such Covered Person that such amount will
be paid over by him to the Trust if it is ultimately determined that he is
not entitled to indemnification under this Section 2; provided, however,
that:

(i) such Covered Person shall have provided appropriate
security for such undertaking,

(ii) the Trust is insured against losses arising out of any
such advance payments or

(iii) either a majority of the Trustees who are neither
interested persons of the Trust nor parties to the matter, or independent
legal counsel in a written opinion, shall have determined, based upon a
review of readily available facts (as opposed to a trial-type inquiry or
full investigation), that there is reason to believe that such Covered
Person will be found entitled to indemnification under this Section 2.

Paragraph 8 of the Investment Advisory and Administration Agreement
("Advisory Agreement") between the Trust and Heritage Asset Management
Inc. ("Heritage") provides that, Heritage shall not be liable for any

C-4
<PAGE>

error of judgment or mistake of law or for any loss suffered by the Trust
in connection with the matters to which this Advisory 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 Advisory
Agreement. Any person, even though also an officer, partner, employee, or
agent of Heritage, 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 Heritage even though
paid by it.

Paragraph 9 of the Subadvisory Agreements ("Subadvisory
Agreements") between Heritage and Eagle Asset Management, Inc. ("Eagle")
and Heritage and Liberty Investment Management, Inc. ("Liberty")
("Subadvisers") provides that, in the absence of willful misfeasance, bad
faith or gross negligence on the part of the Subadvisers, or reckless
disregard of its obligations and duties thereunder, the Subadvisers 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 thereunder.

Paragraph 7 of the Distribution Agreement ("Distribution
Agreement") between the Trust and Raymond James and Associates, Inc.
("Raymond James") provides as follows, that the Trust agrees to indemnify,
defend and hold harmless Raymond James, its several officers and
directors, and any person who controls Raymond James within the meaning of
Section 15 of the 1933 Act from and against any and all claims, demands,
liabilities and expenses (including the cost of investigating or defending
such claims, demands or liabilities and any counsel fees incurred in
connection therewith) which Raymond James, its officers or Trustees, or
any such controlling person may incur under the 1933 Act or under common
law or otherwise arising out of or based upon any alleged untrue statement
of a material fact contained in the Registration Statement, Prospectus or
Statement of Additional Information or arising out of or based upon any
alleged omission to state a material fact required to be stated in either
thereof or necessary to make the statements in either thereof not
misleading, provided that in no event shall anything contained in this
Distribution Agreement be construed so as to protect Raymond James against
any liability to the Trust or its shareholders to which Raymond James
would otherwise be subject by reason of willful misfeasance, bad faith, or
gross negligence in the performance of its duties, or by reason of its
reckless disregard of its obligations and duties under this Distribution
Agreement.

Item 28. I. Business and Other Connections
of Investment Adviser
------------------------------

Heritage is a Florida corporation that offers investment management
services and is a registered investment adviser. Information as to the

C-5
<PAGE>

officers and directors of Heritage is included in its current Form ADV
filed with the Securities and Exchange Commission ("SEC") and is
incorporated by reference herein.

II. Business and Other Connections of Subadvisers
---------------------------------------------
Eagle, a Florida corporation, is a registered investment adviser.
All of its stock is owned by Raymond James Financial, Inc. ("RJF"). Eagle
is engaged primarily in the investment advisory business. Information as
to the officers and directors of Eagle is included in its current Form ADV
filed with the SEC and is incorporated by reference herein.

Liberty, a Florida corporation, is a registered investment adviser.
Information as to the officers and directors of Liberty is included in its
current Form ADV filed with the SEC and is incorporated by reference
herein.

Item 29. Principal Underwriter
---------------------
(a) Raymond James is the principal underwriter for each of the
following investment companies: Heritage Cash Trust, Heritage Capital
Appreciation Trust, Heritage Income-Growth Trust and Heritage Income
Trust.

(b) The directors and officers of the Registrant's principal
underwriter are:

Positions & Offices Position
Name with Underwriter with Registrant
---- ------------------- ---------------

Thomas A. James Chief Executive Officer, Trustee
Director

Robert F. Shuck Executive Vice President, None
Director

Thomas S. Franke President, Chief Operating None
Officer, Director

Lynn Pippenger Secretary/Treasurer, Chief None
Financial Officer,
Director

Dennis Zank Executive Vice President None
of Operations and
Administration, Director

C-6

<PAGE>
Item 30. Location of Accounts and Records
--------------------------------
The books and other documents required by Rule 31a-1 under the
Investment Company Act of 1940 are maintained in the physical possession
of the Trust's Custodian through February 28, 1994, except that: Heritage
maintains some or all of the records required by Rule 31a-1(b)(1), (2) and
(8); and the Subadviser will maintain some or all of the records required
by Rule 31a-1(b)(2), (5), (6), (9), (10) and (11). Since March 1, 1994,
all required records are maintained by Heritage.

Item 31. Management Services
-------------------
Not applicable.

Item 32. Undertakings
------------
The Trust hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of its latest annual report(s) to
Shareholders, upon request and without charge.

C-7
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as
amended, and the Investment Company Act of 1940, as amended, the
Registrant certifies that it meets all of the requirements for
effectiveness of this amendment to its Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this
Post-Effective Amendment No. 12 to its Registration Statement on Form N-1A
to be signed on its behalf by the undersigned, thereunto duly authorized,
in the City of St. Petersburg and the State of Florida, on the 27th day of
December, 1995. No other material event requiring prospectus disclosure
has occurred since the latest of the three dates specified in Rule
485(b)(2).

HERITAGE CAPITAL APPRECIATION TRUST

By: /s/ Stephen G. Hill
--------------------------
Stephen G. Hill, President
Attest:

/s/ Donald H. Glassman
-----------------------------
Donald H. Glassman, Treasurer

Pursuant to the requirements of the Securities Act of 1933, as
amended, this Post-Effective Amendment No. 12 to the Registration
Statement has been signed below by the following persons in the capacities
and on the dates indicated.

Signature Title Date
--------- ----- ----

/s/ Stephen G. Hill President December 27, 1995
----------------------
Stephen G. Hill

/s/Richard K. Riess* Trustee December 27, 1995
----------------------
Richard K. Riess

/s/Thomas A. James* Trustee December 27, 1995
----------------------
Thomas A. James

/s/C. Andrew Graham* Trustee December 27, 1995
----------------------
C. Andrew Graham

/s/David M. Phillips* Trustee December 27, 1995
----------------------
David M. Phillips
<PAGE>

/s/James L. Pappas* Trustee December 27, 1995
----------------------
James L. Pappas

/s/Donald W. Burton* Trustee December 27, 1995
----------------------
Donald W. Burton

/s/Eric Stattin* Trustee December 27, 1995
----------------------
Eric Stattin

/s/ Donald H. Glassman Treasurer December 27, 1995
----------------------
Donald H. Glassman

*By /s/ Donald H. Glassman
-----------------------
Donald H. Glassman, Attorney-In-Fact
<PAGE>

INDEX TO EXHIBITS

Exhibit
Number Description Page
------- ----------- ----

1 Declaration of Trust (filed herewith)

2 (a) Bylaws (filed herewith)

(b) Amended and Restated Bylaws (filed
herewith)

3 Voting trust agreement -- none

4 (a) Specimen security for Class A Shares**

(b) Specimen security Class C Shares**

5 (a) Investment Advisory and Administration
Agreement (filed herewith)

(b)(i) Subadvisory Agreement between
Heritage Asset Management, Inc. and
Eagle Asset Management, Inc. (filed
herewith)

(b)(ii) Subadvisory Agreement between Heritage
Asset Management, Inc. and Liberty
Investment Management, Inc., d/b/a Liberty
Investment Management (filed herewith)

6 Distribution Agreement (filed herewith)

7 Bonus, profit sharing or pension plans --
none

8 Custodian Agreement (filed herewith)

9 (a) Transfer Agency and Service Agreement
(filed herewith)

(b) Fund Accounting and Pricing Service
Agreement (filed herewith)

10 Opinion and consent of counsel*

11 Accountants' consent (filed herewith)

12 Financial statements omitted from prospectus --
none

13 Letter of investment intent (filed
herewith)
<PAGE>

14 Prototype retirement plan**

15 (a) Class A Plan pursuant to Rule 12b-1
(filed herewith)

(b) Class C Plan pursuant to Rule 12b-1
(filed herewith)

16 Performance Computation Schedule (filed
herewith)

17 (a) Financial Data Schedule Relating to Class A
(filed herewith)

(b) Financial Data Schedule Relating to Class C (filed
herewith)

18 Plan pursuant to Rule 18f-3 -- none

--------------------------

* Incorporated by reference to the Trust's Rule 24f-2 Notice,
filed previously on October 27, 1995.

** To be filed by subsequent amendment.

- 2 -
<PAGE>

<PAGE>

DECLARATION OF TRUST
--------------------

DATED June 21, 1985

DECLARATION OF TRUST, made June 21, 1985 by Thomas A. James and
Richard K. Riess (the "Trustees").

NOW, THEREFORE, the Trustees declare that all money and property
contributed to the trust fund hereunder shall be held and managed in Trust
under this Declaration of Trust as herein set forth below.

ARTICLE I
---------

NAME AND DEFINITIONS
--------------------
NAME
----
Section 1. This Trust shall be known as "Heritage Capital
Appreciation Trust."

DEFINITIONS
-----------

Section 2. Wherever used herein, unless otherwise required by
the context or specifically provided:

(a) The terms "Affiliated Person," "Assignment,"
"Commission," "Interested Person," "Majority Shareholder Vote"
(the 67% or 50% requirement of the third sentence of Section
2(a)(42) of the 1940 Act, whichever may be applicable) and
"Principal Underwriter" shall have the meanings given them in the
1940 Act, as amended from time to time;

(b) The "Trust" refers to Heritage Capital Apprecia-
tion Trust;

(d) "Shareholder" means a record owner of Shares of
the Trust;

(e) The "Trustees" refers to the individual trustees
in their capacity as trustees hereunder of the Trust and their
successor or successors for the time being in office as such
trustee or trustees;

(f) "Shares" means the equal proportionate transfer-
able units of interest into which the beneficial interest of the
Trust shall be divided from time to time, and includes fractions
<PAGE>

of shares as well as whole shares consistent with the
requirements of federal and/or other securities laws; and

(g) The "1940 Act" refers to the Investment Company
Act of 1940, as amended from time to time.

ARTICLE II
----------

PURPOSE OF TRUST
----------------

The purpose of this Trust is to provide investors a continuous
source of managed investment in securities.

ARTICLE III
-----------

BENEFICIAL INTEREST
-------------------

SHARES OF BENEFICIAL INTEREST
-----------------------------

Section 1. The beneficial interest in the Trust shall be divided
into such transferable Shares as the Trustees shall from time to time
create and establish. The number of Shares is unlimited and each Share
shall be without par value and shall be fully paid and nonassessable. The
Trustees shall have full power and authority, in their sole discretion and
without obtaining any prior authorization or vote of the Shareholders of
the Trust to create and establish (and to change in any manner) Shares
with such preferences, voting powers, rights and privileges as the
Trustees may from time to time determine, to divide or combine the Shares
into a greater or lesser number, and to take such other action with
respect to the Shares as the Trustees may deem desirable.

OWNERSHIP OF SHARES
-------------------

Section 2. The ownership of Shares shall be recorded in the
books of the Trust. The Trustees may make such rules as they consider
appropriate for the transfer of Shares and similar matters. The record
books of the Trust shall be conclusive as to who are the holders of Shares
and as to the number of Shares held from time to time by each Shareholder.

INVESTMENT IN THE TRUST
-----------------------

Section 3. The Trustees shall accept investments in the Trust
from such persons and on such terms as they may from time to time

- 2 -
<PAGE>

authorize. Such investments may be in the form of cash or securities in
which the Trust is authorized to invest, valued as provided in Article X,
Section 3. After the date of the initial contribution of capital, the
number of Shares to represent the initial contribution may in the
Trustees' discretion be considered as outstanding and the amount received
by the Trustees on account of the contribution shall be treated as an
asset of the Trust. Subsequent investments in the Trust shall be credited
to each Shareholder's account in the form of full Shares at the Net Asset
Value per Share next determined after the investment is received,
provided, however, that the Trustees may, in their sole discretion: (a)
impose a sales charge upon investments in the Trust and (b) issue
fractional Shares.

ASSETS AND LIABILITIES OF THE TRUST
-----------------------------------

Section 4. All consideration received by the Trust for the issue
or sale of Shares, together with all assets in which such consideration is
invested or reinvested, all income, earnings, profits, and proceeds
thereof, including any proceeds derived from the sale, exchange or
liquidation of such assets, and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may be, shall be
referred to as "assets belonging to" the Trust and shall be held by the
Trustees in Trust for the benefit of Shareholders. The Trust's assets
shall be charged with its liabilities. Any creditor of the Trust may look
only to the assets of the Trust to satisfy such creditor's debt.

NO PREEMPTIVE RIGHTS
--------------------

Section 5. Shareholders shall have no preemptive or other right
to subscribe to any additional Shares or other securities issued by the
Trust or the Trustees.

LIMITATION ON PERSONAL LIABILITY
--------------------------------

Section 6. The Trustees shall have no power to bind any
Shareholder personally or to call upon any Shareholder for the payment of
any sum of money or assessment whatsoever other than such as the
Shareholder may at any time personally agree to pay by way of subscription
for any Shares or otherwise. Every note, bond, contract or other
undertaking issued by or on behalf of the Trust or the Trustees relating
to the Trust shall include a recitation limiting the obligation
represented thereby to the Trust and its assets (but the omission of such
a recitation shall not operate to bind any Shareholder).

- 3 -
<PAGE>

ARTICLE IV
----------

THE TRUSTEES
------------

MANAGEMENT OF THE TRUST
-----------------------

Section 1. The business and affairs of the Trust shall be
managed by the Trustees, and they shall have all powers necessary and
desirable to carry out that responsibility.

ELECTION: INITIAL TRUSTEES
--------------------------

Section 2. On a date fixed by the Trustees, the Shareholders
shall elect not less than three Trustees. A Trustee shall not be required
to be a Shareholder of the Trust. The initial Trustees shall be Thomas A.
James and Richard K. Riess and such other individuals as the Board of
Trustees shall appoint pursuant to Section 4 of Article IV.

TERM OF OFFICE OF TRUSTEES
--------------------------

Section 3. The Trustees shall hold office during the lifetime of
this Trust, and until its termination as hereinafter provided, except: (a)
that any Trustee may resign his trust by written instrument signed by him
and delivered to the other Trustees, which shall take effect upon such
delivery or upon such later date as is specified therein; (b) that any
Trustee may be removed at any time by written instrument, signed by at
least two-thirds of the number of Trustees prior to such removal,
specifying the date when such removal shall become effective; (c) that any
Trustee who requests in writing to be retired or who has become
incapacitated by illness or injury may be retired by written instrument
signed by a majority of the other Trustees, specifying the date of his
retirement; and (d) a Trustee may be removed at any Special Meeting of the
Trust by a vote of two-thirds of the outstanding Shares.

RESIGNATION AND APPOINTMENT OF TRUSTEES
---------------------------------------

Section 4. In case of the declination, death, resignation,
retirement, removal, incapacity, or inability of any of the Trustees, or
in case a vacancy shall, by reason of an increase in number, or for any
other reason, exist, the remaining Trustees shall fill such vacancy by
appointing such other person as they in their discretion shall see fit
consistent with the limitations under the 1940 Act. Such appointment
shall be evidenced by a written instrument signed by a majority of the
Trustees in office or by recording in the records of the Trust, whereupon
the appointment shall take effect. Within three months of such
appointment the Trustees shall cause notice of such appointment to be

- 4 -
<PAGE>

mailed to each Shareholder at his address as recorded on the books of the
Trust. An appointment of a Trustee may be made by the Trustees then in
office and notice thereof mailed to Shareholders as aforesaid in
anticipation of a vacancy to occur by reason of retirement, resignation or
increase in number of Trustees effective at a later date, provided that
said appointment shall become effective only at or after the effective
date of said retirement, resignation or increase in number of Trustees.
As soon as any Trustee so appointed shall have accepted this trust, the
trust estate shall vest in the new Trustee or Trustees, together with the
continuing Trustees, without any further act or conveyance, and he shall
be deemed a Trustee hereunder. The power of appointment is subject to the
provisions of Section 16(a) of the 1940 Act.

TEMPORARY ABSENCE OF TRUSTEE
----------------------------

Section 5. Any Trustee may, by power of attorney, delegate his
power for a period not exceeding six months at any one time to any other
Trustee or Trustees, provided that in no case shall less than two Trustees
personally exercise the other powers hereunder except as herein otherwise
expressly provided.

NUMBER OF TRUSTEES
------------------

Section 6. The number of Trustees, not less than three (3) nor
more than twelve (12), serving hereunder at any time shall be determined
by the Trustees themselves.

Whenever a vacancy in the Board of Trustees shall occur, until
such vacancy is filled, or while any Trustee is absent from the
Commonwealth of Massachusetts or, if not a domiciliary of Massachusetts,
is absent from his state of domicile, or is physically or mentally
incapacitated by reason of disease or otherwise, the other Trustees shall
have all the powers hereunder and the certificate of the other Trustees of
such vacancy, absence or incapacity, shall be conclusive, provided,
however, that no vacancy shall remain unfilled for a period longer than
six calendar months.

EFFECT OF DEATH, RESIGNATION, ETC. OF A TRUSTEE
-----------------------------------------------

Section 7. The death, declination, resignation, retirement,
removal, incapacity, or inability of the Trustees, or any one of them,
shall not operate to annul the Trust or to revoke any existing agency
created pursuant to the terms of this Declaration of Trust.

OWNERSHIP OF TRUST ASSETS
-------------------------

Section 8. The assets of the Trust shall be held separate and
apart from any assets now or hereafter held in any capacity other than as

- 5 -
<PAGE>

Trustee hereunder by the Trustees or any successor Trustees. All of the
assets of the Trust shall at all times be considered as vested in the
Trustees. No Shareholder shall be deemed to have a severable ownership in
any individual asset of the Trust or any right of partition or possession
thereof, but each Shareholder shall have a proportionate undivided
beneficial interest in the Trust.

ARTICLE V
---------

POWERS OF THE TRUSTEES
----------------------

POWERS
------

Section 1. The Trustees in all instances shall act as
principals, and are and shall be free from the control of the
Shareholders. The Trustees shall have full power and authority to do any
and all acts and to make and execute any and all contracts and instruments
that they may consider necessary or appropriate in connection with the
management of the Trust. The Trustees shall not in any way be bound or
limited by present or future laws or customs in regard to trust
investments, but shall have full authority and power to make any and all
investments which they, in their uncontrolled discretion, shall deem
proper to accomplish the purpose of this Trust. Subject to any applicable
limitation in the Declaration of Trust or the Bylaws of the Trust, the
Trustees shall have power and authority:

(a) To invest and reinvest cash and other property,
and to hold cash or other property uninvested, without in any
event being bound or limited by any present or future law or
custom in regard to investments by Trustees, and to sell,
exchange, lend, pledge, mortgage, hypothecate, write options on
and lease any or all of the assets of the Trust.

(b) To adopt Bylaws not inconsistent with this Dec-
laration of Trust providing for the conduct of the business of
the Trust and to amend and repeal them to the extent that the
rights of amendment and repeal are not reserved to Shareholders.

(d) To employ a bank or trust company as custodian of
any assets of the Trust subject to any conditions set forth in
this Declaration of Trust or in the Bylaws, if any.

(e) To retain a transfer agent and Shareholder
servicing agent, or both.

- 6 -
<PAGE>

(f) To provide for the distribution of interests of
the Trust either through a principal underwriter in the manner
hereinafter provided for or by the Trust itself, or both.

(g) To set record dates in the manner hereinafter
provided for.

(h) To delegate such authority as they consider de-
sirable to any officers of the Trust and to any agent, custodian
or underwriter.

(i) To sell or exchange any or all of the assets of
the Trust, subject to the provisions of Article XII, Section 4(b)
hereof.

(j) To vote or give assent, or exercise any rights of
ownership, with respect to stock or other securities or property;
and to execute and deliver powers of attorney to such person or
persons as the Trustees shall deem proper, granting to such
person or persons such power and discretion with relation to
securities or property as the Trustees shall deem proper.

(k) To exercise powers and rights of subscription or
otherwise which in any manner arise out of ownership of
securities.

(l) To hold any security or property in a form not
indicating any trust, whether in bearer, unregistered or other
negotiable form; or in its own name or in the name of a custodian
or a nominee or nominees, subject in whichever case to proper
safeguards according to the usual practice of Massachusetts trust
companies or investment companies.

(m) To consent to or participate in any plan for the
reorganization, consolidation or merger of any corporation or
concern, any security of which is held in the Trust; to consent
to any contract, lease, mortgage, purchase, or sale of property
by such corporation or concern, and to pay calls or subscriptions
with respect to any security held in the Trust.

(n) To compromise, arbitrate, or otherwise adjust
claims in favor of or against the Trust or any matter in
controversy including, but not limited to, claims for taxes.

(o) To make distributions of income and of capital
gains to Shareholders in the manner hereinafter provided for.

(p) To borrow money from a bank for temporary or
emergency purposes and not for investment purposes. The Trustees
shall not pledge, mortgage or hypothecate the assets of the Trust
except that, to secure borrowings, the Trustees may pledge
securities.

- 7 -
<PAGE>

(q) To establish, from time to time, a minimum total
investment for Shareholders, and to require redemption of the
Shares of any Shareholders whose investment is less than such
minimum upon giving notice to such Shareholder.

No one dealing with the Trustees shall be under any obligation to
make any inquiry concerning the authority of the Trustees, or to see to
the application of any payments made or property transferred to the
Trustees or upon their order.

TRUSTEES AND OFFICERS AS SHAREHOLDERS
-------------------------------------

Section 2. Subject only to the general limitations herein
contained as to the sale and purchase of Trust Shares and any restrictions
that may be contained in the Bylaws:

(a) Any Trustee, officer or other agent of the Trust
may acquire, own and dispose of Shares to the same extent as if
he were not a Trustee, officer or agent;

(b) The Trustees may issue and sell or cause to be
issued and sold Shares to (and buy such Shares from) any such
person or firm or company in which such person is interested.

ACTION BY THE TRUSTEES
----------------------

Section 3. The Trustees shall act by majority vote at a meeting
duly called or by unanimous written consent without a meeting or by
telephone consent provided a quorum of Trustees participate in any such
telephonic meeting, unless the 1940 Act requires that a particular action
be taken only at a meeting of the Trustees. At any meeting of the
Trustees, a majority of the Trustees shall constitute a quorum. Meetings
of the Trustees may be called orally or in writing by the Chairman of the
Trustees or by any two other Trustees. Notice of the time, date and place
of all meetings of the Trustees shall be given to each Trustee as provided
in the Bylaws.

Notice need not be given to any Trustee who attends the meeting
without objecting to the lack of notice or who executes a written waiver
of notice with respect to the meeting. Subject to the requirements of the
1940 Act, the Trustees by majority vote may delegate to any one of their
number the authority to approve particular matters or take particular
actions on behalf of the Trust.

- 8 -
<PAGE>

CHAIRMAN OF THE TRUSTEES
------------------------

Section 4. The Trustees may appoint one of their number to be
Chairman of the Board of Trustees and to perform such duties as the
Trustee may designate.

ARTICLE VI
----------

EXPENSES OF THE TRUST
---------------------

TRUSTEE REIMBURSEMENT
---------------------

Section 1. Subject to the provisions of Article III, Section 4,
the Trustees shall be reimbursed from the Trust estate or the assets
belonging to the Trust for their expenses and disbursements, including,
without limitation, fees and expenses of Trustees who are not Interested
Persons of the Trust, interest expenses, taxes, fees and commissions of
every kind, expenses of pricing Trust portfolio securities, expenses of
issue, repurchase and redemption of Shares including expenses attributable
to a program of periodic repurchases or redemptions, expenses of
registering and qualifying the Trust and its Shares under federal and
state laws and regulations, charges of custodians, transfer agents, and
registrars, expenses of preparing and setting up in type Prospectuses and
Statements of Additional Information, expenses of printing and
distributing prospectuses sent to existing Shareholders, auditing and
legal expenses, reports to Shareholders, expenses of meetings of
Shareholders and proxy solicitations therefor, insurance expense,
association membership dues and for such non-recurring items as may arise,
including litigation to which the Trust is a party, and for all losses and
liabilities by them incurred in administering the Trust, and for the
payment of such expenses, disbursements, losses and liabilities the
Trustees shall have a lien on the assets belonging to the Trust prior to
any rights or interests of the Shareholders thereto. This section shall
not preclude the Trust from directly paying any of the aforementioned fees
and expenses.

- 9 -
<PAGE>

ARTICLE VII
-----------

INVESTMENT ADVISER, PRINCIPAL
UNDERWRITER AND TRANSFER AGENT
-------------------------------

INVESTMENT ADVISER
------------------

Section 1. Subject to a Majority Shareholder Vote, the Trustees
may in their discretion from time to time enter into an investment
advisory or management agreement(s) with respect to the Trust whereby the
other party(ies) to such agreement(s) shall undertake to furnish the
Trustees such management, investment advisory, statistical and research
facilities and services and such other facilities and services, if any,
and all upon such terms and conditions as the Trustees may in their
discretion determine. Notwithstanding any provisions of this Declaration
of Trust, the Trustees may authorize the investment adviser(s) (subject to
such general or specific instructions as the Trustees may from time to
time adopt) to effect purchases, sales or exchanges of portfolio
securities and other investment instruments of the Trust on behalf of the
Trustees or may authorize any officer, agent, or Trustee to effect such
purchases, sales or exchanges pursuant to recommendations of the
investment adviser (and all without further action by the Trustees). Any
such purchases, sales and exchanges shall be deemed to have been
authorized by all of the Trustees.

The Trustees may, subject to applicable requirements of the 1940
Act, including those relating to Shareholder approval, authorize the
investment adviser to employ one or more subadvisers from time to time to
perform such of the acts and services of the investment adviser, and upon
such terms and conditions, as may be agreed upon between the investment
adviser and subadviser.

PRINCIPAL UNDERWRITER
----------------------

Section 2. The Trustees may in their discretion from time to
time enter into an agreement(s) providing for the sale of the Shares,
whereby the Trust may either agree to sell the Shares to the other party
to the agreement or appoint such other party its sales agent for such
Shares. In either case, the agreement shall be on such terms and
conditions as may be prescribed in the Bylaws, if any, and such further
terms and conditions as the Trustees may in their discretion determine to
be not inconsistent with the provisions of this Article VII, or of the
Bylaws, if any; and such agreement may also provide for the repurchase or
sale of Shares by such other party as principal or as agent of the Trust.

- 10 -
<PAGE>

TRANSFER AGENT
--------------

Section 3. The Trustees may in their discretion from time to
time enter into a transfer agency and Shareholder service agreement
whereby the other party shall undertake to furnish the Trustees with
transfer agency and Shareholder services. The agreement shall be on such
terms and conditions as the Trustees may in their discretion determine are
not inconsistent with the provisions of this Declaration of Trust or of
the Bylaws, if any. Such services may be provided by one or more
entities.

PARTIES TO CONTRACT
-------------------

Section 4. Any agreement of the character described in Sections
1, 2 and 3 of this Article VII or in Article IX hereof may be entered into
with any corporation, firm, partnership, trust or association, although
one or more of the Trustees or officers of the Trust may be an officer,
director, trustee, shareholder, or member of such other party to the
agreement, and no such agreement shall be invalidated or rendered voidable
by reason of the existence of any relationship, nor shall any person
holding such relationship be liable merely by reason of such relationship
for any loss or expense to the Trust under or by reason of said agreement
or accountable for any profit realized directly or indirectly therefrom,
provided that the agreement when entered into was reasonable and fair and
not inconsistent with the provisions of this Article VII or the Bylaws, if
any. The same person (including a firm, corporation, partnership, trust,
or association) may be the other party to agreements entered into pursuant
to Sections 1, 2 and 3 above or Article IX, and any individual may be
financially interested or otherwise affiliated with persons who are
parties to any or all of the agreements mentioned in this Section 4.

PROVISIONS AND AMENDMENTS
-------------------------

Section 5. Any contract entered into pursuant to Sections 1 and
2 of this Article VII shall be consistent with and subject to the
requirements of Section 15 of the 1940 Act (including any amendments
thereof or other applicable Act of Congress hereafter enacted) with
respect to its continuance in effect, its termination, and the method of
authorization and approval of such agreement or renewal thereof, and no
amendment to any agreement, entered into pursuant to Section 1 shall be
effective unless assented to by a Majority Shareholder Vote.

- 11 -
<PAGE>

ARTICLE VIII
------------

SHAREHOLDERS' VOTING POWERS AND MEETINGS
----------------------------------------

VOTING POWERS
-------------

Section 1. The Shareholders shall have power to vote: (i) for
the election of Trustees as provided in Article IV, Section 2, (ii) for
the removal of Trustees as provided in Article IV, Section 3(d), (iii)
with respect to any investment advisory or management contract as provided
in Article VII, Section 1, (iv) with respect to the amendment of this
Declaration of Trust as provided in Article XII, Section 7, (v) to the
same extent as the shareholders of a Massachusetts business corporation,
as to whether or not a court action, proceeding or claim should be brought
or maintained derivatively or as a class action on behalf of the Trust or
the Shareholders, and (vi) with respect to such additional matters
relating to the Trust as may be required or authorized by law, by this
Declaration of Trust, or the Bylaws of the Trust, if any, or any
registration of the Trust with the Securities and Exchange Commission (the
"Commission") or any state, as the Trustees may consider desirable. On
any matter submitted to a vote of the Shareholders, each whole Share shall
be entitled to one vote as to any matter on which it is entitled to vote,
and each fractional Share shall be entitled to a proportionate fractional
vote. There shall be no cumulative voting in the election of Trustees.
Shares may be voted in person or by proxy. Until Shares are issued, the
Trustees may exercise all rights of Shareholders and may take any action
required or permitted by law, this Declaration of Trust or any Bylaws of
the Trust to be taken by Shareholders.

MEETINGS
--------

Section 2. The first Shareholders' meeting shall be held at the
principal office of the Trust or such other place as the Trustees may
designate. Special meetings of the Shareholders may be called by the
Trustees. Special meetings also shall be called by the Trustees for the
purpose of removing one or more Trustees upon the written request for such
a meeting by Shareholders owning at least one-tenth of the outstanding
Shares entitled to vote. Whenever ten or more Shareholders meeting the
qualifications set forth in Section 16(c) of the 1940 Act, as the same may
be amended from time to time, seek the opportunity of furnishing materials
to the other Shareholders with a view to obtaining signatures on such a
request for a meeting, the Trustees shall comply with the provisions of
said Section 16(c) with respect to providing such Shareholders access to
the list of the Shareholders of record of the Trust or the mailing of such
materials to such Shareholders of record. Shareholders shall be entitled
to at least 15 days' notice of any meeting.

- 12 -
<PAGE>

QUORUM AND REQUIRED VOTE
------------------------

Section 3. A majority of Shares entitled to vote in person or by
proxy shall constitute a quorum for the transaction of business at a
Shareholders' meeting. Any lesser number shall be sufficient for
adjournments. Any adjourned session or sessions may be held, within a
reasonable time after the date set for the original meeting, without the
necessity of further notice. Except when a larger vote is required by any
provision of this Declaration of Trust, the Bylaws or law, a majority of
the Shares voted in person or by proxy shall decide any questions and a
plurality shall elect a Trustee.

ARTICLE IX
----------

CUSTODIAN
---------

APPOINTMENT AND DUTIES
----------------------

Section 1. The Trustees shall at all times employ a bank or
trust company having capital, surplus and undivided profits of at least
two million dollars ($2,000,000) as Custodian on such basis of
compensation as may be agreed upon between the Trustees and the Custodian.
The Custodian shall have authority as agent for the Trust, but subject to
such restrictions, limitations and other requirements, if any, as may be
contained in the Bylaws of the Trust:

(a) to hold the securities owned by the Trust and
deliver the same upon written order;

(b) to receive and receipt for any moneys due to the
Trust and deposit the same in its own banking department or
elsewhere as the Trustees may direct; and

(c) to disburse such funds upon orders or vouchers.
Section 2. In addition, the Trust may also employ such Custodian
as its agent:

(a) to keep the books and accounts of the Trust and
furnish clerical and accounting services; and

(b) to compute, if authorized to do so by the Trustees,
the Trust's Net Asset Value in accordance with the
provisions hereof.

All of the Custodian's duties shall be for such compensation as may be
agreed upon between the Trustees and the Custodian.

- 13 -
<PAGE>

If so directed by a Majority Shareholder Vote, the Custodian
shall deliver and pay over all property of the Trust held by it as
specified in such vote.

EMPLOYMENT OF SUB-CUSTODIAN
---------------------------

Section 3. The Trustees may also authorize the Custodian to
employ one or more sub-custodians from time to time to perform such of the
acts and services of the custodian, and upon such terms and conditions, as
may be agreed upon between the Custodian and such sub-custodian and
approved by the Trustees, provided that in every case such sub-custodian
shall be a bank or trust company organized under the laws of the United
States or one of the states thereof and having capital, surplus and
undivided profits of at least two million dollars ($2,000,000) or such
other person as may be permitted by the Commission, or otherwise in
accordance with the 1940 Act as from time to time amended.

CENTRAL CERTIFICATE SYSTEM
--------------------------

Section 4. Subject to such rules, regulations and orders as the
Commission may adopt, the Trustees may direct the Custodian to deposit all
or any part of the securities owned by the Trust in a system for the
central handling of securities established by a national securities
exchange or a national securities association registered with the
Commission under the Securities Exchange Act of 1934, as amended, or such
other person as may be permitted by the Commission, or otherwise in ac-
cordance with the 1940 Act as from time to time amended, pursuant to which
system all securities of any particular class of any issuer deposited
within the system are treated as fungible and may be transferred or
pledged by bookkeeping entry without physical delivery of such securities,
provided that all such deposits shall be subject to withdrawal only upon
the order of the Trust.

ARTICLE X
---------

DISTRIBUTIONS AND REDEMPTIONS
-----------------------------

DISTRIBUTIONS
-------------

Section 1.

(a) The Trustees may from time to time declare and pay
dividends. The amount of such dividends and the payment of them
shall be wholly in the discretion of the Trustees.

- 14 -
<PAGE>

(b) The Trustees shall have power, to the fullest extent
permitted by the laws of Massachusetts, at any time to declare
and cause to be paid dividends on Shares from Trust assets, which
dividends, at the election of the Trustees, may be paid daily or
otherwise pursuant to a standing resolution or resolutions
adopted only once or with such frequency as the Trustees may
determine, and may be payable in Shares at the election of each
Shareholder.

(c) Anything in this instrument to the contrary not-
withstanding, the Trustees may at any time declare and distribute
pro rata among the Shareholders a "stock dividend."

REDEMPTIONS
-----------

Section 2. In case any Shareholder of record desires to dispose
of his Shares, he may deposit at the office of the transfer agent or other
authorized agent of the Trust a written request or such other form of
request as the Trustees may from time to time authorize, requesting that
the Trust purchase the Shares in accordance with this Section 2; and the
Shareholder so requesting shall be entitled to require the Trust to pur-
chase, and the Trust or the principal underwriter of the Trust shall
purchase, his said Shares, but only at the Net Asset Value thereof (as
described in Section 3 hereof). The Trust shall make payment for any such
Shares to be redeemed, as aforesaid, in cash to the extent required by
federal law and securities from Trust assets and payment for such Shares
shall be made by the Trust or the principal underwriter to the Shareholder
of record within seven (7) days after the date upon which the request is
effective.

DETERMINATION OF NET ASSET VALUE AND VALUATION OF PORTFOLIO ASSETS
------------------------------------------------------------------

Section 3. The term "Net Asset Value" shall mean that amount by
which the assets of the Trust exceed its liabilities, all as determined by
or under the direction of the Trustees. Such value shall be determined on
such days and at such times as the Trustees may determine. Such
determination shall be made with respect to securities for which market
quotations are readily available, at the market value of such securities;
and with respect to other securities and assets, at the fair value as
determined in good faith by the Trustees, provided, however, that the
Trustees, without Shareholder approval, may alter the method of appraising
portfolio securities insofar as permitted under the 1940 Act and the
rules, regulations and interpretations thereof promulgated or issued by
the Commission or insofar as permitted by any Order of the Commission.
The Trustees may delegate any powers and duties under this Section 3 with
respect to appraisal of assets and liabilities. At any time the Trustees
may cause the value per Share last determined to be determined again in
similar manner and may fix the time when such redetermined value shall
become effective.

- 15 -
<PAGE>

SUSPENSION OF THE RIGHT OF REDEMPTION
-------------------------------------

Section 4. The Trustees may declare a suspension of the right of
redemption or postpone the date of payment as permitted under the 1940
Act. Such suspension shall take effect at such time as the Trustees shall
specify but not later than the close of business on the business day next
following the declaration of suspension, and thereafter there shall be no
right of redemption or payment until the Trustees shall declare the
suspension at an end. In the case of a suspension of the right of
redemption, a Shareholder may either withdraw his request for redemption
or receive payment based on the Net Asset Value per Share existing after
the termination of the suspension.

ARTICLE XI
----------

LIMITATION OF LIABILITY AND INDEMNIFICATION
-------------------------------------------

LIMITATION OF LIABILITY
-----------------------

Section 1. Provided they have exercised reasonable care and have
acted under the reasonable belief that their actions are in the best
interest of the Trust, the Trustees shall not be responsible for or liable
in any event for neglect or wrongdoing of them or any officer, agent,
employee or investment adviser of the Trust, but nothing contained herein
shall protect any Trustee against any liability to which he would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of
his office.

INDEMNIFICATION
---------------

Section 2.

(a) Subject to the exceptions and limitations contained
in Section (b) below:

(i) every person who is, or has been, a Trustee
or officer of the Trust (hereinafter referred to as
"Covered Person") shall be indemnified by the Trust to
the fullest extent permitted by law against liability and
against all expenses reasonably incurred or paid by him
in connection with any claim, action, suit or proceeding
in which he becomes involved as a party or otherwise by
virtue of his being or having been a Trustee or officer
and against amounts paid or incurred by him in the
settlement thereof;

- 16 -
<PAGE>

(ii) the words "claim," "action," "suit," or
"proceeding" shall apply to all claims, actions, suits or
proceedings (civil, criminal or other, including
appeals), actual or threatened while in office or
thereafter, and the words "liability" and "expenses"
shall include, without limitation, attorneys' fees,
costs, judgments, amounts paid in settlement, fines,
penalties and other liabilities.

(b) No indemnification shall be provided hereunder to a
Covered Person:

(i) who shall have been adjudicated by a court
or body before which the proceeding was brought (A) to be
liable to the Trust or its Shareholders by reason of
willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct
of his office or (B) not to have acted in good faith in
the reasonable belief that his action was in the best
interest of the Trust; or

(ii) in the event of a settlement, unless there
has been a determination that such Trustee or officer did
not engage in willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved
in the conduct of his office (A) by the court or other
body approving the settlement; (B) by at least a
majority of those Trustees who are neither interested
persons of the Trust nor are parties to the matter based
upon a review of readily available facts (as opposed to a
full trial-type inquiry); or (C) by written opinion of
independent legal counsel based upon a review of readily
available facts (as opposed to a full trial-type
inquiry);

provided, however, that any Shareholder may, by ap-
propriate legal proceedings, challenge any such de-
termination by the Trustees, or by independent counsel.

(c) The rights of indemnification herein provided may be
insured against by policies maintained by the Trust, shall be
severable, shall not be exclusive of or affect any other rights
to which any Covered Person may now or hereafter be entitled,
shall continue as to a person who has ceased to be such Trustee
or officer and shall inure to the benefit of the heirs, executors
and administrators of such a person. Nothing contained herein
shall affect any rights to indemnification to which Trust per-
sonnel, other than Trustees and officers, and other persons may
be entitled by contract or otherwise under law.

(d) Expenses in connection with the preparation and
presentation of a defense to any claim, action, suit or

- 17 -
<PAGE>

proceeding of the character described in paragraph (a) of this
Section 2 may be paid by the Trust from time to time prior to
final disposition thereof upon receipt of an undertaking by or on
behalf of such Covered Person that such amount will be paid over
by him to the Trust if it is ultimately determined that he is not
entitled to indemnification under this Section 2, provided,
however, that:

(i) such Covered Person shall have provided appropriate
security for such undertaking,

(ii) the Trust is insured against losses arising out of
any such advance payments or

(iii) either a majority of the Trustees who are neither
interested persons of the Trust nor parties to the
matter, or independent legal counsel in a written
opinion, shall have determined, based upon a review of
readily available facts (as opposed to a trial-type
inquiry or full investigation), that there is reason to
believe that such Covered Person will be found entitled
to indemnification under this Section 2.

SHAREHOLDERS
------------

Section 3. In case any Shareholder or former Shareholder of the
Trust shall be held to be personally liable solely by reason of his being
or having been a Shareholder and not because of his acts or omissions or
for some other reason, the Shareholder or former Shareholder (or his
heirs, executors, administrators or other legal representatives or in the
case of a corporation or other entity, its corporate or other general
successor) shall be entitled out of the Trust assets to be held harmless
from and indemnified against all loss and expense arising from such
liability. The Trust shall, upon request by the Shareholder, assume the
defense of any claim made against the Shareholder for any act or
obligation of the Trust and satisfy any judgment thereon.

ARTICLE XII
-----------

MISCELLANEOUS
-------------

TRUST NOT A PARTNERSHIP
-----------------------

Section 1. It is hereby expressly declared that a trust and not
a partnership is created hereby. No Trustee hereunder shall have any
power to bind personally either the Trust's officers or any Shareholder.
All persons extending credit to, contracting with or having any claim

- 18 -
<PAGE>

against the Trust or the Trustees shall look only to the assets of the
Trust for payment under such credit, contract or claim; and neither the
Shareholders nor the Trustees, nor any of their agents, whether past,
present or future, shall be personally liable therefor. Nothing in this
Declaration of Trust shall protect a Trustee against any liability to
which the Trustee would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of the office of Trustee hereunder.

TRUSTEE'S GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR SURETY
-------------------------------------------------------------

Section 2. The exercise by the Trustees of their powers and
discretion hereunder in good faith and with reasonable care under the
circumstances then prevailing, shall be binding upon everyone interested.
Subject to the provisions of Section 1 of this Article XII and to Article
XI, the Trustees shall not be liable for errors of judgment or mistakes of
fact or law. The Trustees may take advice of counsel or other experts
with respect to the meaning and operation of this Declaration of Trust,
and subject to the provisions of Section 1 of this Article XII and to
Article XI, shall be under no liability for any act or omission in
accordance with such advice or for failing to follow such advice. The
Trustees shall not be required to give any bond as such, nor any surety if
a bond is obtained.

ESTABLISHMENT OF RECORD DATES
-----------------------------

Section 3. The Trustees may close the stock transfer books of
the Trust for a period not exceeding 60 days preceding the date of any
meeting of Shareholders, or the date for the payment of any dividends, or
the date for the allotment of rights, or the date when any change or
conversion or exchange of Shares shall go into effect; or in lieu of
closing the stock transfer books as aforesaid, the Trustees may fix in
advance a date, not exceeding 60 days preceding the date of any meeting of
Shareholders, or the date for payment of any dividend, or the date for the
allotment of rights, or the date when any change or conversion or exchange
of Shares shall go into effect, as a record date for the determination of
the Shareholders entitled to notice of, and to vote at, any such meeting,
or entitled to receive payment of any such dividend, or to any such
allotment of rights, or to exercise the rights in respect of any such
change, conversion or exchange of Shares, and in such case such
Shareholders and only such Shareholders as shall be Shareholders of record
on the date so fixed shall be entitled to such notice of, and to vote at,
such meeting, or to receive payment of such dividend, or to receive such
allotment or rights, or to exercise such rights, as the case may be, not-
withstanding any transfer of any Shares on the books of the Trust after
any such record date fixed as aforesaid.

- 19 -
<PAGE>

TERMINATION OF TRUST
--------------------

Section 4.

(a) This Trust shall continue without limitation of time
but subject to the provisions of sub-section (b) of this
Section 4.

(b) Subject to a Majority Shareholder Vote, the
Trustees may:

(i) sell and convey the assets of the Trust to
another trust, partnership, association or corporation
organized under the laws of any state which is a
diversified open-end management investment company as
defined in the 1940 Act, for adequate consideration which
may include the assumption of all outstanding
obligations, taxes and other liabilities, accrued or
contingent, of the Trust and which may include shares of
beneficial interest or stock of such trust, partnership,
association or corporation, or

(ii) at any time sell and convert into money all of
the assets of the Trust.

Upon making provision for the payment of all such liabilities in
either (i) or (ii), by such assumption or otherwise, the Trustees
shall distribute the remaining proceeds or assets (as the case
may be) ratably among the Shareholders.

(c) Upon completion of the distribution of the remaining
assets as provided in subsection (b), the Trust shall terminate
and the Trustees shall be discharged of any and all further
liabilities and duties hereunder and the right, title and
interest of all parties shall be cancelled and discharged.

FILING OF COPIES, REFERENCES, HEADINGS
--------------------------------------

Section 5. The original or a copy of this instrument and of each
declaration of trust supplemental hereto shall be kept at the office of
the Trust where it may be inspected by any Shareholder. A copy of this
instrument and of each supplemental declaration of trust shall be filed by
the Trustees with the Secretary of the Commonwealth of Massachusetts and
the Boston City Clerk, as well as any other governmental office where such
filing may from time to time be required. Anyone dealing with the Trust
may rely on a certificate by an officer or Trustee of the Trust as to
whether or not any such supplemental declarations of trust have been made
and as to any matters in connection with the Trust hereunder, and with the
same effect as if it were the original, may rely on a copy certified by an
officer or Trustee of the Trust to be a copy of this instrument or of any

- 20 -
<PAGE>

such supplemental declaration of trust. In this instrument or in any such
supplemental declaration of trust, references to this instrument, and the
expressions "herein," "hereof" and "hereunder," shall be deemed to refer
to this instrument as amended or affected by any such supplemental
declaration of trust. Headings are placed herein for convenience of
reference only and in case of any conflict, the text of this instrument,
rather than the headings, shall control. This instrument may be executed
in any number of counterparts each of which shall be deemed an original.

APPLICABLE LAW
--------------

Section 6. The trust set forth in this instrument is made in the
Commonwealth of Massachusetts, and it is created under and is to be
governed by and construed and administered according to the laws of said
Commonwealth. The Trust shall be of the type commonly called a
Massachusetts business trust, and without limiting the provisions hereof,
the Trust may exercise all powers which are ordinarily exercised by such a
Trust.

AMENDMENTS
----------

Section 7. If authorized by votes of the Trustees and a Majority
Shareholder Vote, or by any larger vote which may be required by
applicable law or this Declaration of Trust in any particular case, the
Trustees shall amend or otherwise supplement this instrument, by making a
declaration of trust supplemental hereto, which thereafter shall form a
part hereof. Amendments having the purpose of changing the name of the
Trust or of supplying any omission, curing any ambiguity or curing,
correcting or supplementing any defective or inconsistent provision
contained herein shall not require authorization by Shareholder vote.
Copies of the supplemental declaration of trust shall be filed as
specified in Section 5 of this Article XII.

FISCAL YEAR
-----------

Section 8. The fiscal year of the Trust shall end on a specified
date as set forth in the Bylaws, provided, however, that the Trustees may,
without Shareholder approval, change the fiscal year of the Trust.

USE OF THE WORD "HERITAGE"
--------------------------

Section 9. Raymond, James & Associates, Inc. ("Raymond, James")
has consented to the use by the Trust of the identifying word "Heritage".
Such consent is conditioned upon the employment of RJ Fund Management,
Inc. as investment adviser. As between the Trust and itself, Raymond,
James controls the use of the name of the Trust insofar as such name
contains the identifying word "Heritage." Raymond, James may from time to
time use the identifying word "Heritage" in other connections and for

- 21 -
<PAGE>

other purposes, including, without limitation, in the names of other
investment companies, corporations or businesses which it may manage,
advise, sponsor or own or in which it may have a financial interest.
Raymond, James may require the Trust to cease using the identifying word
"Heritage" in the name of the Trust if the Trust ceases to employ RJ Fund
Management, Inc. or another subsidiary or affiliate of Raymond, James as
investment adviser.

IN WITNESS WHEREOF, the undersigned, being all of the initial
Trustees of the Trust, have executed this instrument this 20th day of
June, 1985.

STATE OF FLORIDA
COUNTY OF PINELLAS

I, the undersigned authority, /s/ Thomas A. James
hereby certify that the foregoing ---------------------
is a true and correct copy of the Thomas A. James
instrument presented to me by 1400 66th Street North
Thomas A. James as the original of St. Petersburg, FL 33710
such instrument.

WITNESS my hand and official seal,
this 20th day of June A.D., 1985.

/s/ Sharry L. Mauney
-------------------------

STATE OF FLORIDA
COUNTY OF PINELLAS

I, the undersigned authority,
hereby certify that the foregoing /s/ Richard K. Riess
is a true and correct copy of the -------------------------
instrument presented to me by Richard K. Riess
Richard K. Riess as the original 1400 66th Street North
of such instrument. St. Petersburg, FL 33710

WITNESS my hand and official seal,
this 20th day of June A.D., 1985.

/s/ Sharry L. Mauney
-------------------------

- 22 -
<PAGE>

Resident Agent:
James E. Howard, Esquire
Kirkpatrick & Lockhart
One Boston Place - Suite 3210
Boston, MA 02108
(617) 973-5400

- 23 -
<PAGE>

<PAGE>

BYLAWS
of
HERITAGE CAPITAL APPRECIATION TRUST

ARTICLE I
---------
OFFICERS AND THEIR ELECTION
---------------------------

OFFICERS
--------

Section 1. The officers of the Trust shall be a President, a
Treasurer, a Secretary, and such other officers as the Trustees may from
time to time elect. It shall not be necessary for any Trustee or other
officer to be a holder of shares in the Trust.

ELECTION OF OFFICERS
--------------------

Section 2. The Treasurer and Secretary shall be chosen annually
by the Trustees. The President shall be chosen annually by and from the
Trustees.

Two or more offices may be held by a single person except the
offices of President and Secretary. The officers shall hold office until
their successors are chosen and qualified.

RESIGNATIONS AND REMOVALS
-------------------------

Section 3. Any officer of the Trust may resign by filing a written
resignation with the President or with the Trustees or with the Secretary,
which shall take effect on being so filed at such time as may be therein
specified. The Trustees may at any meeting remove any officer.

ARTICLE II
----------

POWERS AND DUTIES OF OFFICERS AND TRUSTEES
------------------------------------------

Section 1. The business and affairs of the Trust shall be
managed by the Trustees, and they shall have all powers necessary and
desirable to carry out their responsibilities, so far as such powers are
not inconsistent with the laws of the Commonwealth of Massachusetts, the
Declaration of Trust, or with these Bylaws.

EXECUTIVE AND OTHER COMMITTEES
------------------------------

Section 2. The Trustees may elect from their own number an
executive committee to consist of not less than three nor more than five
<PAGE>

members, which shall have the power and duty to conduct the current and
ordinary business of the Trust, including the purchase and sale of
securities, while the Trustees are not in session, and such other powers
and duties as the Trustees may from time to time delegate to such
committee. The Trustees may also elect from their own number other
committees from time to time. The number composing such committees and
the powers conferred upon the same are to be determined by vote of the
Trustees.

CHAIRMAN OF THE TRUSTEES
------------------------

Section 3. The Trustees may, but need not, appoint from among
their number a Chairman. He shall perform such duties as the Trustees may
from time to time designate.

PRESIDENT
---------

Section 4. The President shall be the chief executive officer of
the Trust and, subject to the Trustees, shall have general supervision
over the business and policies of the Trust. When present, he shall
preside at all meetings of the Shareholders and the Trustees, and he may,
subject to the approval of the Trustees, appoint a Trustee to preside at
such meetings in his absence. The President shall perform such duties
additional to all of the foregoing as the Trustees may from time to time
designate.

TREASURER
---------

Section 5. The Treasurer shall be the principal financial and
accounting officer of the Trust. He or she shall deliver all funds and
securities of the Trust which may come into his or her hands to such bank
or trust company as the Trustees shall employ as Custodian in accordance
with Article IX of the Declaration of Trust. He or she shall have the
custody of the seal of the Trust. He or she shall make annual reports
regarding the business and condition of the Trust, which reports shall be
preserved in Trust records, and he or she shall furnish such other reports
regarding the business and condition of the Trust as the Trustees may from
time to time require. The Treasurer shall perform such additional duties
as the Trustees may from time to time designate.

SECRETARY
---------

Section 6. The Secretary shall record in books kept for the
purpose all votes and proceedings of the Trustees and the Shareholders at
their respective meetings. The Secretary shall perform such additional
duties as the Trustees may from time to time designate.

- 2 -
<PAGE>

VICE PRESIDENT
--------------

Section 7. Any Vice President of the Trust shall perform such
duties as the Trustees may from time to time designate.

ASSISTANT TREASURER
-------------------

Section 8. The Assistant Treasurer of the Trust shall perform
such duties as the Trustees may from time to time designate.

ARTICLE III
-----------
SHAREHOLDERS' MEETINGS
----------------------

SPECIAL MEETINGS
----------------

Section 1. A special meeting of the Shareholders shall be called
by the Secretary whenever (i) ordered by the Trustees or (ii) requested,
for the purpose of removing a Trustee from office, in writing by the
holder or holders of at least 10% of the outstanding Shares entitled to
vote. If the Secretary, when so ordered or requested, refuses or neglects
for more than two days to call such special meeting, the Trustees or the
Shareholders so requesting may, in the name of the Secretary, call the
meeting by giving notice thereof in the manner required when notice is
given by the Secretary.

NOTICES
-------

Section 2. Except as above provided, notices of any special
meeting of the Shareholders shall be given by the Secretary by delivering
or mailing, postage prepaid, to each Shareholder entitled to vote at said
meeting, a written or printed notification of such meeting, at least 15
days before the meeting, to such address as may be registered with the
Trust by the Shareholder.

PLACE OF MEETING
----------------

Section 3. All special meetings of the Shareholders shall be
held at the principal place of business of the Trust in St. Petersburg,
Florida or at such other place in the United States as the Trustees may
designate.

- 3 -
<PAGE>

ARTICLE IV
----------
TRUSTEES' MEETINGS
------------------
SPECIAL MEETINGS
----------------

Section 1. Special meetings of the Trustees shall be called by
the Secretary at the written request of the President, the Treasurer, or
any two Trustees and if the Secretary, when so requested, refuses or fails
for more than 24 hours to call such meeting, the President, the Treasurer,
or such two Trustees may, in the name of the Secretary, call such meeting
by giving due notice in the manner required when notice is given by the
Secretary.

REGULAR MEETINGS
----------------

Section 2. Regular meetings of the Trustees may be held without
call or notice at such places and at such times as the Trustees may from
time to time determine, provided that any
Trustee who is absent when such determination is made shall be given
notice of the determination.

QUORUM
------

Section 3. A majority of the Trustees shall constitute a quorum
for the transaction of business.

NOTICE
------

Section 4. Except as otherwise provided, notice of any special
meeting of the Trustees shall be given by the Secretary to each Trustee
orally or by mail, hand delivery or telegram. A notice may be mailed,
postage prepaid, addressed to him at his address as registered on the
books of the Trust or, if not so registered, at his last known address at
least three days before the meeting or delivered to him at least two days
before the meeting, provided orally by telephone at least 24 hours before
the meeting or sent to him at least 24 hours before the meeting, by
prepaid telegram addressed to him at his said registered address, if any,
or if he has no such registered address, at his last known address.

PLACE OF MEETING
----------------

Section 5. All special meetings of the Trustees shall be held at
the principal place of business of the Trustees in St. Petersburg,
Florida, or such other place in the United States as the person or persons

- 4 -
<PAGE>

requesting said meeting to be called may designate, but any meeting may
adjourn to any other place.

SPECIAL ACTION
--------------

Section 6. When all the Trustees shall be present at any
meeting, however called or wherever held, or shall assent to the holding
of the meeting without notice, or after the meeting shall sign a written
assent thereto on the record of such meeting, the acts of such meeting
shall be valid as if such meeting had been regularly held.

ACTION BY CONSENT
-----------------

Section 7. Any action by the Trustees may be taken without a
meeting if a written consent thereto is signed by all the Trustees and
filed with the records of the Trustees' meeting, or by telephone consent
provided a quorum of Trustees participate in any such telephone meeting.
Such consent shall be treated as a vote of the Trustees for all purposes.

ARTICLE V
---------
SHARES OF BENEFICIAL INTEREST
-----------------------------
BENEFICIAL INTEREST
-------------------

Section 1. The beneficial interest in the Trust shall at all
times be divided into an unlimited number of transferable Shares without
par value, each of which shall represent an equal proportionate interest
in the class with each other Share of the class outstanding, none having
priority or preference over another.

TRANSFER OF SHARES
------------------

Section 2. The Shares of the Trust shall be transferable, so as
to affect the rights of the Trust, only by transfer recorded on the books
of the Trust, in person or by attorney.

EQUITABLE INTEREST NOT RECOGNIZED
---------------------------------

Section 3. The Trust shall be entitled to treat the holder of
record of any Share or Shares of stock as the holder in fact thereof, and
shall not be bound to recognize any equitable or other claim or interest
in such Share or Shares on the part of any other person except as may be
otherwise expressly provided by law.

- 5 -
<PAGE>

ARTICLE VI
----------
INSPECTION OF BOOKS
-------------------
The Trustees shall from time to time determine whether and to
what extent, and at what times and places, and under what conditions and
regulations the accounts and books of the Trust or any of them shall be
open to the inspection of the Shareholders; and no Shareholder shall have
any right to inspect any account or book or document of the Trust except
as conferred by law or otherwise by the Trustees or by resolution of the
Shareholders.

ARTICLE VII
-----------
CUSTODIAN
---------
The Custodian employed by the Trust pursuant to Article IX of the
Declaration of Trust shall be required to enter into an agreement with the
Trust which shall contain in substance the following provisions:

(a) The Trust will cause all securities and funds owned by
the Trust to be delivered or paid to the Custodian.

(b) The Custodian will receive and receipt for any moneys due
to the Trust and deposit the same in its own banking department and in
such other banking institutions, if any, as the Custodian and Trustees may
approve. The Custodian shall have the sole power to draw upon any such
account.
(c) The Custodian shall release and deliver securities owned
by the Trust in the following cases only:

(i) Upon the sale of such securities for the account of
the Trust and receipt of payment therefor,

(ii) To the issuer thereof or its agent when such
securities are called, redeemed, retired or otherwise become
payable; provided that in any such case, the cash is to be
delivered to the Custodian;

(iii) To the issuer thereof or its agency for transfer
into the name of the Trust, the Custodian or a nominee of either,
or for exchange for a different number of bonds or certificates
representing the same aggregate face amount or number of units;
provided that in any such case the new securities are to be
delivered to the Custodian;

(iv) To the broker selling the same for examination, in
accord with the "street delivery" custom;

- 6 -
<PAGE>

(v) For exchange or conversion pursuant to any plan of
merger, consolidation, recapitalization, reorganization or
readjustment of the securities or the issuer of such securities
or pursuant to provisions of any deposit agreement; provided
that, in any such case, the new securities and cash, if any, are
to be delivered to the Custodian;

(vi) In the case of warrants, rights, or similar
securities, the surrender thereof in the exercise of such
warrants, rights or similar securities or the surrender of
interim receipts or temporary securities for definitive
securities;

(vii) To any pledgee by way of pledge or hypothecation
to secure any loan, but only within the limits permitted to the
Trust by Article V, Section l(p) of the Declaration of Trust.

(viii) For deposit in a system for the central handling
of securities.

(d) The Custodian shall pay out moneys of the Trust only upon
the purchase of securities for the account of the Trust and the delivery
in due course of such securities to the Custodian, or in connection with
the conversion, exchange or surrender of securities owned by the Trust as
set forth in (c), or for the repurchase of Shares issued by the Trust or
for the making of any disbursements authorized by the Trustees pursuant to
the Declaration of Trust or these Bylaws, or for the payment of any
expense or liability incurred by the Trust; provided that, in every case
where payment is made by the Custodian in advance of receipt of the
securities purchased, the Custodian shall be absolutely liable to the
Trust for such securities to the same extent as if the securities had been
received by the Custodian.

(e) The Custodian shall make deliveries of securities and
payments of cash upon written instructions signed or initialed by such
officer or officers or other agent or agents of the Trust as may be
authorized to sign or initial such instructions by resolution of the
Trustees; it being understood that the Trustees may from time to time
authorize a different person or persons to sign or initial instructions
for different purposes.

The agreement between the Trust and the Custodian may contain any
such other provisions not inconsistent with the provisions of Article IX
of the Declaration of Trust or with these Bylaws as the Trustees may
approve.

Such agreement shall be terminable by either party upon written
notice to the other within such time not exceeding 60 days as may be
specified in the agreement: provided, however, that upon termination of
the agreement or inability of the Custodian to continue to serve, the
Custodian shall, upon written notice of appointment of another bank or

- 7 -
<PAGE>

trust company as custodian, deliver and pay over to such successor
custodian all securities and money held by it for account of the Trust.
In such case, the Trustees shall promptly appoint a successor custodian,
but in the event that no successor custodian can be found having the
required qualifications and willing to serve, it shall be the duty of the
Trustees to call as promptly as possible a special meeting of the
Shareholders to determine whether the Trust shall function without a
custodian or shall be liquidated. If so directed by vote of the holders
of a majority of the outstanding shares, the Custodian shall deliver and
pay over all property of the Trust held by it as specified in such vote.

Such agreement shall also provide that, pending appointment of a
successor custodian or a vote of the Shareholders specifying some other
disposition of the funds and property, the Custodian shall not deliver
funds and property of the Trust to the Trust, but may deliver them to a
bank or trust company doing business in St. Petersburg, Florida, of its
own selection have an aggregate capital, surplus and undivided profits, as
shown by its last published report, of not less than $2,000,000 as the
property of the Trust to be held under terms similar to those on which
they were held by the retiring custodian.

Any sub-custodian employed by the Custodian pursuant to
authorization to do so granted by the Trust pursuant to Article IX of the
Declaration of Trust shall be required to enter into an agreement with the
Custodian containing in substance the same provisions as those described
in paragraphs (a) through (e) above, except that any agreement with a
sub-custodian performing its duties outside the United States and its
territories and possessions may omit or limit any of such conditions,
provided that any such omission or limitation shall be expressly approved
by a majority of the Trustees of the Trust.

ARTICLE VIII
------------
SEAL
----
The seal of the Trust shall be circular in form bearing the
inscription:

"HERITAGE CAPITAL APPRECIATION TRUST -- 1985"

ARTICLE IX
----------
FISCAL YEAR
-----------

The fiscal year of the Trust shall be the period of twelve months
ending on the ____ day of __________ in each calendar year.

- 8 -
<PAGE>

ARTICLE X
---------

AMENDMENTS
----------
These Bylaws may be amended at any meeting of the Trustees of the
Trust by a majority vote; provided, however, that any amendment which
changes or affects the provisions of Article VII, Article X, or Article
XII shall be approved by vote of a majority of the outstanding shares of
the Trust entitled to vote.

ARTICLE XI
----------
DISTRIBUTION ARRANGEMENTS
-------------------------

Any agreement entered into for the sale of Shares of the Trust
pursuant to Article VII, Section 2 of the Declaration of Trust shall
require the other party thereto (the "Distributor"), whether acting as
principal or as agent, to use all reasonable efforts consistent with the
other business of the Distributor to secure purchasers for the Shares.
Such agreement shall require the Distributor to bear all expenses (a) of
printing and distributing any Prospectus, Statement of Additional
Information or reports prepared for its use in connection with the
offering of Shares for sale to the public, other than the expenses of
preparing, setting up in type, printing and distributing (i) Prospectuses
and Statements of Additional Information used in connection with the
registration and qualification of Shares under the Securities Act of 1933
or various state laws, (ii) any report or other communication to
shareholders of the Trust in their capacity as such and (iii) Prospectuses
and Statements of Additional Information sent to existing Shareholders,
and (b) any other literature used by it in connection with such offering,
and (c) advertising in connection with such offering.

ARTICLE XII
-----------
REPORTS TO SHAREHOLDERS
-----------------------

The Trustees shall at least semi-annually submit to the
Shareholders a written financial report of the transactions of the Trust
including financial statements which shall be certified at least annually
by independent public accountants.

- 9 -
<PAGE>

<PAGE>

AMENDED BY-LAWS
of
HERITAGE CAPITAL APPRECIATION TRUST

TABLE OF CONTENTS

Page
----

ARTICLE I . . . . . . . . . . . . . . . . . . . . . . 1
Officers and Their Election . . . . . . . . . . . . . . 1
Section 1: Officers . . . . . . . . . . . . . . . . . 1
Section 2: Election of Officers . . . . . . . . . . . 1
Section 3: Resignations and Removals . . . . . . . . . 1

ARTICLE II . . . . . . . . . . . . . . . . . . . . . . 1
Powers and Duties of Officers and Trustees . . . . . . . 1
Section 1: Trustees . . . . . . . . . . . . . . . . . 1
Section 2: Executive and Other Committees. . . . . . . 1
Section 3: Chairman of The Trustees. . . . . . . . . . 2
Section 4: President . . . . . . . . . . . . . . . . . 2
Section 5: Treasurer . . . . . . . . . . . . . . . . . 2
Section 6: Secretary . . . . . . . . . . . . . . . . . 2
Section 7: Vice President. . . . . . . . . . . . . . . 2
Section 8: Assistant Treasurer . . . . . . . . . . . . 3

ARTICLE III . . . . . . . . . . . . . . . . . . . . . . . . 3
Shareholders' Meetings. . . . . . . . . . . . . . . . . . 3
Section 1: Special Meetings. . . . . . . . . . . . . . 3
Section 2: Notice of Meeting . . . . . . . . . . . . . 3
Section 3: Place of Meeting. . . . . . . . . . . . . . 3

ARTICLE IV . . . . . . . . . . . . . . . . . . . . . . . . 3
Trustees' Meetings . . . . . . . . . . . . . . . . . . . 3
Section 1: Special Meetings. . . . . . . . . . . . . . 3
Section 2: Regular Meetings. . . . . . . . . . . . . . 4
Section 3: Quorum . . . . . . . . . . . . . . . . . . 4
Section 4: Notices of Meeting. . . . . . . . . . . . . 4
Section 5: Place of Meeting. . . . . . . . . . . . . . 4
Section 6: Special Action . . . . . . . . . . . . . . 4
Section 7: Action by Consent . . . . . . . . . . . . . 4

ARTICLE V . . . . . . . . . . . . . . . . . . . . . . . . . 5
Shares of Beneficial Interest . . . . . . . . . . . . . . 5
Section 1: Beneficial Interest . . . . . . . . . . . . 5
Section 2: Transfer of Shares . . . . . . . . . . . . 5
Section 3: Equitable Interest Not Recognized . . . . 5

- i -
<PAGE>

Page
----

ARTICLE VI . . . . . . . . . . . . . . . . . . . . . . . . 5
Inspection of Books . . . . . . . . . . . . . . . . . . . 5

ARTICLE VII . . . . . . . . . . . . . . . . . . . . . . . . 5
Custodian . . . . . . . . . . . . . . . . . . . . . . . . 5

ARTICLE VIII . . . . . . . . . . . . . . . . . . . . . . . 8
Seal . . . . . . . . . . . . . . . . . . . . . . . . . . 8

ARTICLE IX . . . . . . . . . . . . . . . . . . . . . . . . 8
Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . 8

ARTICLE X . . . . . . . . . . . . . . . . . . . . . . . . . 8
Amendments . . . . . . . . . . . . . . . . . . . . . . . 8

ARTICLE XI . . . . . . . . . . . . . . . . . . . . . . . . 8
Distribution Arrangements . . . . . . . . . . . . . . . 8

ARTICLE XII . . . . . . . . . . . . . . . . . . . . . . . . 9
Reports to Shareholders . . . . . . . . . . . . . . . . . 9

- ii -
<PAGE>

AMENDED BY-LAWS
of
HERITAGE CAPITAL APPRECIATION TRUST

ARTICLE I
---------
OFFICERS AND THEIR ELECTION
---------------------------

OFFICERS
--------

SECTION 1. The officers of the Trust shall be a President, a
Treasurer, a Secretary, and such other officers as the Trustees may from
time to time in their discretion appoint or elect. It shall not be
necessary for any Trustee or other officer to be a holder of shares in the
Trust.

ELECTION OF OFFICERS
--------------------

SECTION 2. The President, Treasurer and Secretary shall be
chosen annually by the Trustees. Two or more offices may be held by a
single person except the offices of President and Secretary. The officers
shall hold office until their successors are chosen and qualified.

RESIGNATIONS AND REMOVALS
-------------------------

SECTION 3. Any officer of the Trust may resign by filing a
written resignation with the President, the Trustees or the Secretary,
which resignation shall take effect on being so filed at such time as may
be therein specified. The Trustees may at any meeting remove any officer
by a majority vote of the voting Trustees.

ARTICLE II
----------
POWERS AND DUTIES OF OFFICERS AND TRUSTEES
------------------------------------------

TRUSTEES
--------

SECTION 1. The business and affairs of the Trust shall be
managed by the Trustees, and they shall have all powers necessary and
desirable to carry out their responsibilities, so far as such powers are
not inconsistent with the laws of the Commonwealth of Massachusetts, the
Declaration of Trust, or with these By-laws.
<PAGE>

EXECUTIVE AND OTHER COMMITTEES
------------------------------

SECTION 2. The Trustees may elect from their own number an
executive committee to consist of not less than three nor more than five
members, which shall have the power and duty to conduct the current and
ordinary business of the Trust, including the purchase and sale of
securities, while the Trustees are not in session, and such other powers
and duties as the Trustees may from time to time delegate to such
committee. The Trustees may also elect from their own number other
committees from time to time. The number composing such committees and
the powers conferred upon the same are to be determined by vote of the
Trustees.

CHAIRMAN OF THE TRUSTEES
------------------------

SECTION 3. The Trustees may, but need not, appoint from among
their number a Chairman. He shall perform such duties as the Trustees may
from time to time designate.

PRESIDENT
---------

SECTION 4. The President shall be the chief executive officer of
the Trust and, subject to the Trustees, shall have general supervision
over the business and policies of the Trust. When present, he shall
preside at all meetings of the Shareholders and the Trustees, and he may,
subject to the approval of the Trustees, appoint a Trustee to preside at
such meetings in his absence. The President shall perform such duties
additional to all of the foregoing as the Trustees may from time to time
designate.

TREASURER
---------

SECTION 5. The Treasurer shall be the principal financial and
accounting officer of the Trust. He or she shall deliver all funds and
securities of the Trust which may come into his or her hands to such bank
or trust company as the Trustees shall employ as Custodian in accordance
with Article IX of the Declaration of Trust. He or she shall have the
custody of the seal of the Trust. He or she shall make annual reports
regarding the business and condition of the Trust, which reports shall be
preserved in Trust records, and he or she shall furnish such other reports
regarding the business and condition of the Trust as the Trustees may from
time to time require. The Treasurer shall perform such additional duties
as the Trustees may from time to time designate.

- 2 -
<PAGE>

SECRETARY
---------

SECTION 6. The Secretary shall record in books kept for the
purpose all votes and proceedings of the Trustees and the Shareholders at
their respective meetings. The Secretary shall perform such additional
duties as the Trustees may from time to time designate.

VICE PRESIDENT
--------------

SECTION 7. Any Vice President of the Trust shall perform such
duties as the Trustees may from time to time designate.

ASSISTANT TREASURER
-------------------

SECTION 8. Any Assistant Treasurer of the Trust shall perform
such duties as the Trustees may from time to time designate.

ARTICLE III
-----------
SHAREHOLDERS' MEETINGS
----------------------

SPECIAL MEETINGS
----------------

SECTION 1. A special meeting of the Shareholders of the Trust
shall be called by the Secretary whenever (i) ordered by the Trustees or
(ii) requested, for the purpose of removing a Trustee from office, in
writing by the holder or holders of at least 10% of the outstanding Shares
of the Trust entitled to vote. If the Secretary, when so ordered or
requested, refuses or neglects for more than 30 days to call such special
meeting, the Trustees or the Shareholders so requesting may, in the name
of the Secretary, call the meeting by giving notice thereof in the manner
required when notice is given by the Secretary.

NOTICE OF MEETING
-----------------

SECTION 2. Except as above provided, notice of any special
meeting of the Shareholders shall be given by the notification of such
meeting at least 15 days before the meeting to such address as may be
registered with the Trust by the Shareholder.

PLACE OF MEETING
----------------

SECTION 3. All special meetings of the Shareholders shall be
held at the principal place of business of the Trust in St. Petersburg,

- 3 -
<PAGE>

Florida, or at such other place in the United States as the Trustees may
designate.

ARTICLE IV
----------
TRUSTEES' MEETINGS
------------------

SPECIAL MEETINGS
----------------

SECTION 1. Special meetings of the Trustees shall be called by
the Secretary at the written request of the President, the Treasurer, or
any two Trustees, and if the Secretary, when so requested, refuses or
fails for more than 24 hours to call such meeting, the President, the
Treasurer, or such two Trustees may, in the name of the Secretary, call
such meeting by giving due notice in the manner required when notice is to
be given by the Secretary.

REGULAR MEETINGS
----------------

SECTION 2. Regular meetings of the Trustees may be held without
call or notice at such places and at such times as the Trustees may from
time to time determine, provided that any Trustee who is absent when such
determination is made shall be given notice of the determination.

QUORUM
------

SECTION 3. A majority of the Trustees shall constitute a quorum
for the transaction of business.

NOTICES OF MEETING
------------------

SECTION 4. Except as otherwise provided, notice of any special
meeting of the Trustees shall be given by the Secretary to each Trustee
orally or by mail, hand delivery or telegram. Such notice may be mailed,
postage prepaid, addressed to him at his address as registered on the
books of the Trust or, if not so registered, at his last known address at
least three days before the meeting or delivered to him at least two days
before the meeting, provided orally by telephone at least 24 hours before
the meeting or sent to him at least 24 hours before the meeting, by
prepaid telegram addressed to him at said registered address, if any, or
if he has no such registered address, at his last known address.

- 4 -
<PAGE>

PLACE OF MEETING
----------------

SECTION 5. All special meetings of the Trustees shall be held at
the principal place of business of the Trustees in St. Petersburg, Florida
or such other place in the United States as the person or persons
requesting said meeting to be called may designate, but any meeting may
adjourn to any other place.

SPECIAL ACTION
--------------

SECTION 6. When all the Trustees shall be present at any
meeting, however called or wherever held, or shall assent to the holding
of the meeting without notice, or after the meeting shall sign a written
assent thereto on the record of such meeting, the acts of such meeting
shall be valid as if such meeting had been regularly held.

ACTION BY CONSENT
-----------------

SECTION 7. Any action by the Trustees may be taken without a
meeting if a written consent thereto is signed by all the Trustees and
filed with the records of the Trustees' meeting, or by telephone consent
provided a quorum of Trustees participate in any such telephone meeting.
Such consent shall be treated as a vote of the Trustees for all purposes.

ARTICLE V
---------
SHARES OF BENEFICIAL INTEREST
-----------------------------

BENEFICIAL INTEREST
-------------------

SECTION 1. The beneficial interest in the Trust shall at all
times be divided into an unlimited number of transferable Shares without
par value, each of which shall represent an equal proportionate interest
in the class with each other Share of the class outstanding, none having
priority or preference over another.

TRANSFER OF SHARES
------------------

SECTION 2. The Shares of the Trust shall be transferable, so as
to affect the rights of the Trust, only by transfer recorded on the books
of the Trust, in person or by attorney.

- 5 -
<PAGE>

EQUITABLE INTEREST NOT RECOGNIZED
---------------------------------

SECTION 3. The Trust shall be entitled to treat the holder of
record of any Share or Shares of stock as the holder in fact thereof, and
shall not be bound to recognize any equitable or other claim or interest
in such Share or Shares on the part of any other person except as may be
otherwise expressly provided by law.

ARTICLE VI
----------
INSPECTION OF BOOKS
-------------------

The Trustees shall from time to time determine whether and to
what extent, and at what times and places, and under what conditions and
regulations the accounts and books of the Trust or any of them shall be
open to the inspection of the Shareholders; and no Shareholder shall have
any right to inspect any account or book or document of the Trust except
as conferred by law or otherwise by the Trustees or by resolution of the
Shareholders.

ARTICLE VII
-----------
CUSTODIAN
---------

The Custodian employed by the Trust pursuant to Article IX of the
Declaration of Trust shall be required to enter into an agreement with the
Trust which shall contain in substance the following provisions:

(a) The Trust will cause all securities and funds owned by the
Trust to be delivered or paid to the Custodian.

(b) The Custodian will receive and receipt for any moneys due to
the Trust and deposit the same in its own banking department and in such
other banking institutions, if any, as the Custodian and Trustees may
approve. The Custodian shall have the sole power to draw upon any such
account.

(i) Upon the sale of such securities for the account of
the Trust and receipt of payment therefor;

(ii) To the issuer thereof or its agent when such
securities are called, redeemed, retired or otherwise
become payable; provided that in any such case, the cash
is to be delivered to the Custodian;

- 6 -
<PAGE>

(iii) To the issuer thereof or its agency for transfer
into the name of the Trust, the Custodian or a nominee of
either, or for exchange for a different number of bonds
or certificates representing the same aggregate face
amount or number or units; provided that in any such case
the new securities are to be delivered to the Custodian;

(iv) To the broker selling the same for examination,
in accord with the "street delivery" custom;

(v) For exchange or conversion pursuant to any plan of
merger, consolidation, recapitalization, reorganization
or readjustment of the securities or the issuer of such
securities or pursuant to provisions of any deposit
agreement; provided that, in any such case, the new
securities and cash, if any, are to be delivered to the
Custodian;

(vi) In the case of warrants, rights, or similar
securities, the surrender thereof in the exercise of such
warrants, rights or similar securities or the surrender
of interim receipts or temporary securities for
definitive securities;

(vii) To any pledgee by way of pledge or hypothecation
to secure any loan, but only within the limits permitted
to the Trust by Article V, Section 1(p) of the
Declaration of Trust; and

(viii) For deposit in a system for the central handling
of securities.

(d) The Custodian shall pay out moneys of the Trust only upon
the purchase of securities for the account of the Trust and the delivery
in due course of such securities to the Custodian, or in connection with
the conversion, exchange or surrender of securities owned by the Trust as
set forth in (c), or for the repurchase of Shares issued by the Trust or
for the making of any disbursements authorized by the Trustees pursuant to
the Declaration of T rust or the By-Laws, or for the payment of any
expense or liability incurred by the Trust; provided that, in every case
where payment is made by the Custodian in advance of receipt of the
securities purchased, the Custodian shall be absolutely labile to the
Trust for such securities to the same extent as if the securities had been
received by the Custodian.

(e) The Custodian shall make deliveries of securities and
payments of cash only upon written instructions signed or initialed by
such officer or officers or other agent or agents of the Trust as may be
authorized to sign or initial such instructions by resolution of the
Trustees; it being understood that the Trustees may from time to time
authorize a different person or persons to sign or initial instructions
for different purposes.

- 7 -
<PAGE>

The agreement between the Trust and the Custodian may contain any
such other provisions not inconsistent with the provisions of Article XI
or the Declaration of Trust or with these By-Laws as the Trustees may
approve.

Such agreement shall be terminable by either party upon written
notice to the other within such time not exceeding 60 days as may be
specified in the agreement; provided, however, that upon termination of
the agreement or inability of the Custodian to continue to serve, the
Custodian shall, upon written notice of appointment of another bank or
trust company as custodian, deliver and pay over to such successor
custodian all securities and money held by it for account of the Trust.
In such case, the Trustees shall promptly appoint a successor custodian,
but in the event that no successor custodian can be found having the
required qualifications and willing to serve, it shall be the duty of the
Trustees to call as promptly as possible a special meeting of the
Shareholders to determine whether the Trust shall functions without a
custodian or shall be liquidated. If so directed by vote of the holders
of a majority of the outstanding shares, the Custodian shall deliver and
pay over all property of the Trust held by it as specified in such vote.

Such agreement shall also provide that, pending appointment of a
successor custodian or a vote of the Shareholders specifying some other
disposition of the funds and property, the Custodian shall not deliver
funds and property of the Trust to the Trust, but may deliver them to a
bank or trust company doing business in St. Petersburg, Florida of its own
selection having an aggregate capital, surplus and undivided profits, as
shown by its last published report, of not less than $2,000,000 as the
property of the Trust to be held under terms similar to those on which
they were held by the retiring custodian.

Any sub-custodian employed by the Custodian pursuant to
authorization to do so granted by the Trust pursuant to Article IX of the
Declaration of Trust shall be required to enter into an agreement with the
Custodian containing in substance the same provision as those described in
paragraphs (a) through (e) above, except that any agreement with a sub-
custodian performing its duties outside the United States and its
territories and possessions may omit or limit any of such conditions,
provided that any such omission or limitation shall be expressly approved
by a majority of the Trustees of the Trust.

ARTICLE VIII
------------
SEAL
----

The seal of the Trust shall be circular in form bearing the
inscription:

"HERITAGE CAPITAL APPRECIATION TRUST -- 1985"

- 8 -
<PAGE>

ARTICLE IX
----------
FISCAL YEAR
-----------

The fiscal year of the Trust shall be the period of twelve months
ending on the ____ day of______________________ in each calendar year.

ARTICLE X
---------
AMENDMENTS
----------

These By-Laws may be amended at any meeting of the Trustees of
the Trust by a majority vote, provided, however, that any amendment which
changes or affects the provisions of Article VII, Article X, or Article
XII shall be approved by a vote of a majority of the outstanding shares of
the Trust entitled to vote.

ARTICLE XI
----------
DISTRIBUTION ARRANGEMENTS
-------------------------

Any agreement entered into for the sale of Shares of the Trust
pursuant to Article VII, Section 2 of the Declaration of Trust shall
require the other party thereto (the "Distributor"), whether acting as
principal or as agent, to use all reasonable efforts consistent with the
other business of the Distributor to secure purchasers for the Shares.
Such agreement shall require the Distributor to bear all expenses (a) of
printing and distributing any Prospectus, Statement of Additional
Information or reports prepared for its use in connection with the
offering of Shares for sale to the public, other than the expenses of
preparing, setting up in type, printing and distributing (i) Prospectuses
and Statements of Additional Information used in connection with the
registration and qualification of Shares under the Securities Act of 1933
or various state laws, (ii) any report or other communication to
shareholders of the Trust in their capacity as such and (iii) Prospectuses
and Statements of Additional Information sent to existing Shareholders and
(b) any other literature used by it in connection with such offering and
(c) advertising in connection with such offering.

ARTICLE XII
-----------
REPORTS TO SHAREHOLDERS
-----------------------

The Trustees shall at least semi-annually submit to the
Shareholders a written financial report of the transactions of the Trust

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<PAGE>

including financial statements which shall be certified at least annually
by independent public accountants.

Dated: June 21, 1985, as amended and restated on
May 18, 1993

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<PAGE>

<PAGE>

INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENT

Agreement made as of November 22, 1985 between Heritage Capital
Appreciation 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 Man-
agement, 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 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
<PAGE>

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 de-
termines 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 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
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).

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.

- 2 -
<PAGE>

(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 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 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 1940 Act) of any

- 3 -
<PAGE>

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
------------------------ -----------------

First $100 million . . . . . . . . . 1.00%

Over $100 million . . . . . . . . . .75%

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,

- 4 -
<PAGE>

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.)

- 5 -
<PAGE>

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,
Raymond, James & 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 CAPITAL APPRECIATION TRUST

By: /s/ Marilyn G. Rast By: /s/ Richard K. Riess
--------------------- ------------------------
Marilyn G. Rast Richard K. Riess

Attest: RJ FUND MANAGEMENT, INC.

By: /s/ Jennifer A. Tash By: /s/ Jeffrey P. Julien
--------------------- ------------------------

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<PAGE>

<PAGE>

SUBADVISORY AGREEMENT

Subadvisory Agreement executed as of November 22, 1985 between RJ
Fund Management, Inc., a Florida corporation (the "Manager"), and Eagle
Asset Management, Inc., a Florida 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 Capital Appreciation 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.

(b) The Subadviser, at its expense, will make available its
officers and advisory and other personnel, particularly portfolio managers
and research analysts to the Trustees and Manager 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 and will provide periodic reports to the Manager relating to the
portfolio strategies it employs.

(c) The Subadviser, at its expense, will furnish all salaries of
personnel and facilities to provide for the efficient conduct of the
investment affairs of the Trust, such affairs to include the monitoring of
the portfolio accounting services provided by the Trust's custodian.

(d) The Subadviser, at its expense, also will provide the
Manager with compliance reports relating to the Trust's investment
operations, including regular, periodic reports which monitor investment
restrictions and other guidelines of the Trust's prospectus and statement
of additional information, and such other compliance reports as may be
agreed upon from time to time.

(e) The Subadviser, at its expense, also will provide the
Trust's custodian bank with market price information relating to portfolio
instruments on a daily basis.
<PAGE>

(f) 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 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 particu-
lar 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. 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).

(g) 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 Section 2 hereafter, other than as provided in Section 4.

2. BOOKS AND RECORDS

In compliance with the requirements of Rule 31a-3 under the
Investment Company Act of 1940 (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) insofar as such records relate to the
investment affairs of the Trust. 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.

- 2 -
<PAGE>

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 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 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 Sections 1 and 2, a fee, computed and paid monthly
at an annual rate equal to 50% of fees payable by the Trust to the
Manager. 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 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.

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:

- 3 -
<PAGE>

(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.

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.

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

- 4 -
<PAGE>

investigation, at law or in equity, before or by any court,
public board or body, involving the affairs of the Trust;

(d) the President of the Subadviser or the portfolio
manager responsible for 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
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.

- 5 -
<PAGE>

IN WITNESS WHEREOF, RJ Fund Management, Inc. and Eagle Asset
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 22, 1985

Attest: RJ Fund Management, Inc.

By: /s/ Jennifer A. Tash By: /s/ Richard K. Riess
------------------------ -------------------------------

Attest: EAGLE ASSET MANAGEMENT COMPANY, INC.

By: /s/ Marilyn G. Ract By: /s/ Officer
------------------------ ---------------------------------

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<PAGE>

<PAGE>

HERITAGE CAPITAL APPRECIATION TRUST
SUBADVISORY AGREEMENT

This Subadvisory Agreement is made as of February 27, 1995,
between Heritage Asset Management, Inc., a Florida corporation (the
"Manager"), and Liberty Investment Management, Inc. d/b/a Liberty
Investment Management, a Florida corporation (the "Subadviser").

WHEREAS, the Manager has by separate contract agreed to serve as
the investment adviser and administrator to Heritage Capital Appreciation
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 portfolios, each having its own assets and investment policies;

WHEREAS, the Manager's contract with the Trust allows it to
delegate certain investment advisory services for the Trust to other
parties; and

WHEREAS, the Manager desires to retain the Subadviser to perform
certain investment advisory services for the Trust with respect to its
existing portfolio and such other portfolios as the Trust and the Manager
shall agree upon and so specify from time to time in one or more Schedules
attached hereto (collectively, the "Portfolios"), 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 Portfolios an investment program for such portion,
if any, of Portfolio assets which 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
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 Portfolios 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
Portfolios, 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 current copies of the materials
specified in Subsections (a)(iii) and (iv) of this Section 1.

At such time as will be reasonably requested by the Board
or the Manager, the Subadviser will provide them with economic
<PAGE>

and investment analysis and reports, and make available to the
Board any economical, statistical of 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
Portfolios and to consult with the Trustees and the Manager
regarding the investment affairs of the Portfolios, 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
itsexpense, 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 fund accountant or custodian, as the case may
be, with market price information relating to the assets of the
Portfolios for which the Subadviser has responsibility at such
times as the parties hereto may agree upon from time to time.

(f) EXECUTING PORTFOLIO TRANSACTIONS. The Subadviser
will place orders pursuant to its investment determinations for
each Portfolio either directly with the issuer or through other
brokers. In the selection of brokers and the placement of orders
for the purchase and sale of portfolio investments for the
Portfolios, the Subadviser shall use its best efforts to obtain
for the Portfolios 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
involved and the quality of service rendered by the broker 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
a Portfolio to pay a broker that provides brokerage and research
services to the Subadviser an amount of commission for effecting
<PAGE>

a portfolio investment transaction in excess of the amount of
commission another broker 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,
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. In no instance will portfolio
securities of any Portfolio be purchased from or sold to the
Subadviser or any affiliated person of the Subadviser. The Trust
agrees that any entity or person associated with the Manager or
the Subadviser 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, 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 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 Portfolios for which the Subadviser has
responsibility under this Agreement; and (d) it will preserve for the
periods prescribed by Rule 31a-2 under the 1940 Act the records it
maintains for the Trust.

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 to reflect changes in annual rates or the
addition or deletion of a Portfolio from this Agreement, subject to
appropriate approvals required by the 1940 Act. Such fees shall be paid
by the Manager (and not by the Trust) without regard to any reduction in
the fees paid to the Manager as a result of any statutory or regulatory
limitation on investment company expenses. 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.
<PAGE>

5. ASSIGNMENT AND AMENDMENT OF AGREEMENT. This Agreement
automatically shall terminate without the payment of any penalty in the
event of its assignment or if the Investment Advisory and Administration
Agreement between the Manager and the Trust shall terminate for any
reason. This Agreement shall not be materially amended unless such
amendment is approved by the affirmative vote of a majority of the
outstanding shares of each applicable Portfolio, and 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"). The Subadviser agrees to notify the Manager of any change in
control of the Subadviser before 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 with respect to any
Portfolio now existing or hereafter created 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 that
Portfolio. This Agreement shall remain in full force and effect
continuously thereafter without the payment of any penalty as follows:

(a) By vote of a majority of the (i) Independent
Trustees, or (ii) outstanding voting shares of the applicable
Portfolios, the Trust may at any time terminate this Agreement
with respect to any or all Portfolios by providing not less 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 with
respect to a Portfolio unless, within two years after its initial
effectiveness with respect to such Portfolio and at least
annually thereafter, the continuance of the Agreement is
specifically approved by (i) the Board of Trustees or the
shareholders of such Portfolio by the affirmative vote of a
majority of the outstanding shares of such Portfolio, 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 any Portfolio 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 and regulations
thereunder.

(c) The Manager may at any time terminate this
Agreement with respect to any or all Portfolios 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 with respect to any or all
Portfolios by not less than 90 days' written notice delivered or
mailed by registered mail, postage prepaid, to the Manager.
<PAGE>

(d) This Agreement automatically and immediately will
terminate in the event of its assignment.

Upon termination of this Agreement with respect to any Portfolio,
the duties of the Manager delegated to the Subadviser under this Agreement
with respect to such Portfolio 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, 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 or any
Portfolio; or

(c) any other occurrence that might affect 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 and
regulations thereunder subject, however, to such exemptions as may be
granted by the Securities and Exchange Commission 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 and regulations
thereunder.

9. LIABILITY OF THE SUBADVISER. In the absence of its
willful misfeasance, bad faith, gross negligence or reckless 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 Subadviser's willful
misfeasance, bad faith, gross negligence or reckless disregard of its
duties hereunder.

10. 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
<PAGE>

conflict with the applicable provisions of the 1940 Act, the latter shall
control.

11. MASSACHUSETTS BUSINESS TRUST. Subadviser hereby
acknowledges that, although this Agreement is executed by an officer
and/or trustee of the Trust, the obligations of this Agreement are not
binding upon any of them individually or upon the Trust's shareholders
individually; rather, these obligations are binding only upon the assets
and property of the Trust.

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, regulation
or order of the Securities & Exchange Commission, whether special or
general application, such provision shall be deemed to incorporate the
effect of such rule regulation or order.

IN WITNESS WHEREOF, Heritage Asset Management, Inc. and Liberty
Investment Management, Inc. d/b/a Liberty Investment Management 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:
--------------------- -----------------------------

LIBERTY INVESTMENT MANAGEMENT, INC.
Attest: d/b/a LIBERTY INVESTMENT MANAGEMENT

By: By:
--------------------- -----------------------------
<PAGE>

SCHEDULE A
TO THE
HERITAGE CAPITAL APPRECIATION TRUST
SUBADVISORY AGREEMENT
BETWEEN
HERITAGE ASSET MANAGEMENT, INC.
AND
LIBERTY INVESTMENT MANAGEMENT

As compensation pursuant to section 4 of the Subadvisory
Agreement between Heritage Asset Management, Inc. (the "Manager") and
Liberty Investment Management, Inc. d/b/a Liberty Investment Management
(the "Subadviser"), the Manager shall pay the Subadviser a subadvisory
fee, computed and paid monthly, at the following percentage rates of the
Trust's average daily net assets under management by the Subadviser:

(1) For the Heritage Capital Appreciation Trust: 0.25%

Dated: February 27, 1995
<PAGE>

<PAGE>

DISTRIBUTION AGREEMENT

This Distribution Agreement is made this 22nd day of November
1985, by and between Heritage Capital Appreciation Trust, a Massachusetts
business trust (the "Trust"), and Raymond, James & Associates, Inc.
("Raymond, James").

WHEREAS, the Trust is registered as an open-end, diversified
investment company under the Investment Company Act of 1940, as amended
(the "1940 Act"), and has registered its shares of beneficial interest
(the "Shares") for sale to the public under the Securities Act of 1933, as
amended (the "1933 Act"), and various state securities laws; and

WHEREAS, the Trust wishes to retain Raymond, James as the Trust's
Distributor in connection with the offering and sale of the Shares and to
furnish certain other services to the Trust as specified in this
Agreement, and

WHEREAS, this Agreement has been approved by a vote of the
Trust's Board of Trustees and certain disinterested Trustees in conformity
with Paragraph (b)(2) of Rule 12b-1 under the 1940 Act; and

WHEREAS, Raymond, James is willing to act as Distributor and to
furnish such services on the terms and conditions hereinafter set forth,

NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, it is agreed between the parties hereto as
follows:

1. The Trust hereby appoints Raymond, James as Distributor
in connection with the offering and sale of the Shares. The Trust
authorizes Raymond, James, as exclusive agent for the Trust, subject to
applicable federal and state law and the Declaration of Trust, Bylaws and
current Prospectus and Statement of Additional Information of the Trust:
(a) to promote the Trust, (b) to solicit orders for the purchase of the
Shares subject to such terms and conditions as the Trust may specify; and
(c) to accept orders for the purchase of the Shares on behalf of the
Trust. Raymond, James shall offer the Shares on an agency or "best
efforts" basis under which the Trust shall only issue such Shares as are
actually sold.

2. The public offering price of the Shares shall be the net
asset value per share (as determined by the Trust) of the outstanding
Shares of the Trust plus a sales charge as set forth in the Trust's
current Prospectus. The Trust shall make available to Raymond, James a
statement of each computation of net asset value and of the details
entering into such computation.

3. As compensation for the services performed and the ex-
penses assumed by Raymond, James under this Agreement including, but not
limited to, any commissions paid for sales of Shares, the Trust shall pay
Raymond, James, as promptly as possible after the last day of each month,
a fee, accrued daily, of .50% per annum of the Trust's average daily net
assets. The first payment of the fee shall be made as promptly as
<PAGE>

possible at the end of the month in which the Trust commences operations
and shall constitute a full payment of the fee due Raymond, James for all
services prior to that date. If this Agreement is terminated as of any
date not the last day of a month, such fee shall be paid as promptly as
possible after such date of termination, shall be based on the average
daily net assets of the Trust in that period from the beginning of such
month to such date of termination, and shall be that proportion of such
average daily net assets as the number of days in such period bears to the
number of days in such month. Each such payment shall be accompanied by a
report of the Trust prepared either by the Trust or by State Street Bank
and Trust Company that shall show the amount properly payable to Raymond,
James under this Agreement and the detailed computation thereof. Raymond,
James shall also receive the sales load set forth in the Trust's current
prospectus.

4. As used in this Agreement, the term "Registration
Statement" shall mean the Registration Statement most recently filed by
the Trust with the Securities and Exchange Commission and effective under
the 1933 Act, as such Registration Statement is amended by any amendments
thereto at the time in effect, and the terms "Prospectus" and "Statement
of Additional Information" shall mean the form of Prospectus and Statement
of Additional Information filed by the Trust as part of the Registration
Statement.

5. Raymond, James shall finance activity which is intended
to result in the sale and retention of Trust shares including, but not
limited to, advertising, salaries and other expenses of the Distributor
relating to selling or servicing efforts, expenses of organizing and
conducting sales seminars, printing of Prospectuses and reports for other
than existing shareholders, preparation and distribution of advertising
material and sales literature and payments to dealers whose customers
purchase Trust shares. In connection with such sales and offers of sale,
the Trust shall not be responsible in any way for any other information,
statements or representations given or made by Raymond, James or its
representatives or agents, except such information and make only such
statements or representations as are contained in the Prospectus or in
information furnished in writing to Raymond, James by the Trust. Except
as specifically provided in this Agreement, the Trust shall bear none of
the expenses of Raymond, James in connection with its offer and sale of
the Shares.

6. The Trust agrees, at its own expense, to register the
Shares with the Securities and Exchange Commission, state and other
regulatory bodies, and to prepare and file from time to time such
Prospectuses, amendments, reports and other documents as may be necessary
to maintain the Registration Statement. The Trust shall bear all expenses
related to preparing and typesetting such Prospectuses, Statements of
Additional Information and other materials required by law and such other
expenses, including printing and mailing expenses, related to the Trust's
communications with persons who are shareholders of the Trust.

- 2 -
<PAGE>

7. The Trust agrees to indemnify, defend and hold harmless
Raymond, James, its several officers and directors, and any person who
controls Raymond, James within the meaning of Section 15 of the 1933 Act
from and against any and all claims, demands, liabilities and expenses
(including the cost of investigating or defending such claims, demands or
liabilities and any counsel fees incurred in connection therewith) which
Raymond, James, its officers or Trustees, or any such controlling person
may incur under the 1933 Act or under common law or otherwise arising out
of or based upon any alleged untrue statement of a material fact contained
in the Registration Statement, Prospectus or Statement of Additional
Information or arising out of or based upon any alleged omission to state
a material fact required to be stated in either thereof or necessary to
make the statements in either thereof not misleading, provided that in no
event shall anything contained in this Agreement be construed so as to
protect Raymond, James against any liability to the Trust or its
shareholders to which Raymond, James would otherwise be subject by reason
of willful misfeasance, bad faith, or gross negligence in the performance
of its duties, or by reason of its reckless disregard of its obligations
and duties under this Agreement.

8. Raymond, James agrees to indemnify, defend and hold
harmless the Trust, its several officers and directors, and any person who
controls the Trust within the meaning of Section 15 of the 1933 Act from
and against any and all claims, demands, liabilities and expenses
(including the cost of investigating or defending such claims, demands or
liabilities and any counsel fees incurred in connection therewith) which
the Trust, its officers or Trustees, or any such controlling person may
incur under the 1933 Act or under common law or otherwise arising out of
or based upon any alleged untrue statement of a material fact contained in
information furnished in writing by Raymond, James to the Trust for use in
the Registration Statement, Prospectus or Statement of Additional
Information or arising out of or based upon any alleged omission to state
a material fact in connection with such information required to be stated
in the Registration Statement or Prospectus or necessary to make such
information not misleading.

9. The Trust reserves the right at any time to withdraw all
offerings of the Shares by written notice to the Distributor at its
principal office.

10. The Trust shall not issue certificates representing
Shares unless requested by a shareholder. If such request is transmitted
through Raymond, James, the Trust will cause certificates evidencing the
Shares owned to be issued in such names and denominations as Raymond,
James shall from time to time direct.

11. Raymond, James at its sole discretion may repurchase
Shares offered for sale by the shareholders. Repurchase of Shares by
Raymond, James shall be at the net asset value next determined after a
repurchase order has been received. On each business day, Raymond, James
shall notify by telex or in writing the Trust and State Street Bank and
Trust Company, the Trust's transfer agent, of the orders for repurchase of

- 3 -
<PAGE>

shares received by Raymond, James since the last such report, the amount
to be paid for such Shares, and the identity of the shareholders offering
Shares for repurchase. Upon such notice, the Trust shall pay Raymond,
James such amounts as are required by Raymond, James for the repurchase of
such Shares cash or in the form of a credit against moneys due the Trust
from Raymond, James as proceeds from the sale of Shares. Raymond, James
will receive no commission or other remuneration for repurchasing Shares
other than the compensation set forth in paragraph 3 hereof. The Trust
reserves the right to suspend such repurchases upon written notice to
Raymond, James. Raymond, James further agrees to act as agent for the
Trust to receive and transmit promptly to the Trust's transfer agent
shareholder requests for redemption of Shares.

12. Raymond, James is an independent contractor and shall be
agent for the Trust only with respect to the sale and repurchase of the
Shares.

13. The services of Raymond, James to the Trust under this
Agreement are not to be deemed exclusive, and the Distributor shall be
free to render similar services or other services to others so long as its
services hereunder are not impaired thereby.

14. Raymond, James shall prepare reports for the Board of
Trustees of the Trust upon request showing information concerning
expenditures related to this Agreement.

15. As used in this Agreement, the term "net asset value
shall have the meaning ascribed to it in the Trust's Declaration of Trust;
and the terms "assignment," "interested person," and "majority of the
outstanding voting securities" shall have the meanings given to them by
Section 2(a) of the 1940 Act, subject to such exemptions as may be granted
by the Securities and Exchange Commission by any rule, regulation or
order.

16. Subject to the provisions of paragraphs 17 and 18 below,
this Agreement will remain in effect for one year from the date of its
execution and from year to year thereafter, provided that Raymond, James
does not notify the Trust in writing at least 60 days prior to the
expiration date in any year that it does not wish continuance of the
Agreement for an additional year.

17. This Agreement shall automatically terminate in the event
of its assignment and may be terminated at any time without the payment of
any penalty by the Trust or by the Distributor on 60 days' written notice
to the other party. The Trust may effect such termination by a vote of
(i) a majority of the Trust's Board of Trustees, (ii) a majority of the
Trustees who are not interested persons of the Trust and who have no
direct or indirect financial interest in the operation of the Trust's
Distribution Plan pursuant to Rule 12b-1 under the 1940 Act in this
Agreement or in any agreement related to the Trust's Distribution Plan
(the "Rule 12b-1 Trustees"), or (iii) a majority of the outstanding voting
securities of the Trust.

- 4 -
<PAGE>

18. This Agreement shall be submitted for approval to the
Board of Trustees of the Trust annually and shall continue in effect only
so long as specifically approved annually (i) by a majority vote of the
Trust's Board of Trustees, and (ii) by the vote of a majority of the Rule
12b-1 Trustees of the Trust, cast in person at a meeting called for the
purpose of voting on such approval.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their officers thereunto duly authorized.

Dated: November 22, 1985

Attest: HERITAGE CAPITAL APPRECIATION TRUST

By: /s/ Jennifer A. Tash By: /s/ Richard K. Riess
----------------------- ------------------------------

Attest: RAYMOND, JAMES & ASSOCIATES, INC.

By: /s/ Martha E. Dunbar By: /s/ Thomas A. James
------------------------ ------------------------------

- 5 -
<PAGE>

<PAGE>

CUSTODIAN CONTRACT
Between
HERITAGE CAPITAL APPRECIATION TRUST
and
STATE STREET BANK AND TRUST COMPANY
<PAGE>

TABLE OF CONTENTS
Page
----

1. Employment of Custodian and Property to be Held by It . . . 1

2. Duties of the Custodian with Respect to Property of the
Fund Held By the Custodian . . . . . . . . . . . . . . . . . 2
2.1 Holding Securities . . . . . . . . . . . . . . . . . 2
2.2 Delivery of Securities . . . . . . . . . . . . . . . 2
2.3 Registration of Securities . . . . . . . . . . . . . 7
2.4 Bank Accounts . . . . . . . . . . . . . . . . . . . 8
2.5 Payments for Shares . . . . . . . . . . . . . . . . 9
2.6 Investment and Availability of Federal Funds . . . . 9
2.7 Collection of Income . . . . . . . . . . . . . . . . 10
2.8 Payment of Fund Moneys . . . . . . . . . . . . . . . 11
2.9 Liability for Payment in Advance of Receipt of
Securities Purchased . . . . . . . . . . . . . . . . 13
2.10 Payments for Repurchases or Redemptions of Shares
of the Fund . . . . . . . . . . . . . . . . . . . . 14
2.11 Appointment of Agents . . . . . . . . . . . . . . . 15
2.12 Deposit of Trust Assets in Securities Systems . . . 15
2.13 Segregated Account . . . . . . . . . . . . . . . . . 18
2.14 Ownership Certificates for Tax Purposes . . . . . . 20
2.15 Proxies . . . . . . . . . . . . . . . . . . . . . . 20
2.16 Communications Relating to Fund Portfolio
Securities . . . . . . . . . . . . . . . . . . . . . 20
2.17 Proper Instructions . . . . . . . . . . . . . . . . 21
2.18 Actions Permitted without Express Authority . . . . 22
2.19 Evidence of Authority . . . . . . . . . . . . . . . 23

3. Duties of Custodian with Respect to the Books of Account
and Calculation of Net Asset Value and Net Income . . . . . 23

4. Records . . . . . . . . . . . . . . . . . . . . . . . . . . 24

5. Opinion of Fund's Independent Certified Public
Accountants . . . . . . . . . . . . . . . . . . . . . . . . 25

6. Reports to Fund by Independent Certified Public
Accountants . . . . . . . . . . . . . . . . . . . . . . . . 25

7. Compensation of Custodian . . . . . . . . . . . . . . . . . 25

8. Responsibility of Custodian . . . . . . . . . . . . . . . . 26

9. Effective Period, Termination and Amendment . . . . . . . . 27

10. Successor Custodian . . . . . . . . . . . . . . . . . . . . 29

11. Interpretive and Additional Provisions . . . . . . . . . . . 30

12. Additional Funds . . . . . . . . . . . . . . . . . . . . . . 31
<PAGE>

13. Massachusetts Law to Apply . . . . . . . . . . . . . . . . . 31

14. Prior Contracts . . . . . . . . . . . . . . . . . . . . . . 31

15. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . 31

16. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 32
<PAGE>

CUSTODIAN CONTRACT

This Contract between Heritage Capital Appreciation Trust, a
business trust organized and existing under the laws of Massachusetts,
having its principal place of business at 1400-66th Street North, St.
Petersburg, Florida 33710 hereinafter called the "Fund", and State Street
Bank and Trust Company, a Massachusetts corporation, having its principal
place of business at 225 Franklin Street, Boston, Massachusetts 02110,
hereinafter called the "Custodian",

WITNESSETH: That in consideration of the mutual covenants and
agreements hereinafter contained, the parties hereto agree as follows:

1. EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE HELD BY IT
-----------------------------------------------------
The Fund hereby employs the Custodian as the custodian of its
assets pursuant to the provisions of the Fund's Declaration of Trust and
the terms and conditions hereof. The Fund agrees to deliver to the
Custodian all securities and cash owned by the Fund, and all payments of
income, principal and capital distributions received by the Fund with
respect to all securities its owns from time to time, and the cash
consideration received by the Fund for such new or treasury shares of
beneficial interest, without par value ("Shares") of the Fund as may be
issued or sold from time to time. The Custodian shall not be responsible
for any property of the Fund held or received by the Fund and not
delivered to the Custodian.

Upon receipt of "Proper Instructions" (within the meaning of
Section 2.17), the Custodian may from time to time employ one or more
sub-custodians, but only after the prior express written consent of the
Fund in accordance with an applicable vote by its Board of Trustees, and
provided that the Custodian shall have no more or less responsibility or
liability to the Fund on account of any actions or omissions of any
sub-custodian 50 employed than any such sub-custodian has to the
Custodian.

2. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE FUND HELD
BY THE CUSTODIAN
-----------------------------------------------------------------
2.1 HOLDING SECURITIES. The Custodian shall hold and
physically segregate for the account of the Fund all
non-cash property, including all securities owned by the
Fund, other than securities which are maintained pursuant
to Section 2.11 in a clearing agency which acts as a
securities depository or in a book-entry system
authorized by the U.S. Department of the Treasury,
collectively referred to herein as "Securities System".

2.2 DELIVERY OF SECURITIES. The Custodian shall release and
deliver securities owned by the Fund held by the
Custodian or in a Securities System account of the
Custodian only upon receipt of Proper Instructions, which
<PAGE>

may be continuing instructions when deemed appropriate by
the parties, and only in the following cases:\

1) Upon sale of such securities for the account of
the Fund and receipt by the Custodian of payment
therefor;

2) Upon the receipt of payment in connection with
any repurchase agreement related to such
securities entered into by the Fund;

3) In the case of a sale effected through a
Securities System, in accordance with the
provisions of Section 2.12 hereof;

4) To the depository agent in connection with tender
or other similar offers for portfolio securities
of the Fund;

5) To the issuer thereof or its agent when such
securities are called, redeemed, retired or
otherwise become payable; provided that, in any
such case, the cash or other consideration is to
be delivered to the Custodian;

6) To the issuer thereof, or its agent, for transfer
into the name of the Fund or into the name of any
nominee or nominees of the Custodian or into the
name or nominee name of any agent appointed
pursuant to Section 2.11 or into the name or
nominee name of any sub-custodian appointed
pursuant to Article 1 hereof; or for exchange for
a different number of bonds, certificates or
other evidence representing the same aggregate
face amount or number of units; PROVIDED that, in
any such case, the new securities are to be
delivered to the Custodian;

7) To the broker selling the same for examination in
accordance with the "street delivery" custom;

8) For exchange or conversion pursuant to any plan
of merger, consolidation, recapitalization,
reorganization or readjustment of the securities
of the issuer of such securities, or pursuant to
provisions for conversion contained in such
securities, or pursuant to any deposit agreement;
provided that, in any such case the new
securities and cash, if any, are to be delivered
to the Custodian;

- 2 -
<PAGE>

9) In the case of warrants options, rights or
similar securities, the surrender thereof in the
exercise of such warrants, options, rights or
similar securities or the surrender of interim
receipts or temporary securities for definitive
securities; provided that, in any such case, the
new securities and cash, if any, are to be
delivered to the Custodian;

10) For delivery in connection with any loans of
securities made by the Fund, BUT ONLY against
receipt of adequate collateral as agreed upon
from time to time by the Custodian and the Fund,
which may be in the form of cash or other
securities including obligations issued by the
United States government, its agencies or
instrumentalities, except that in connection with
any loans for which collateral is to be credited
to the Custodian's account in the book-entry
system authorized by the U.S. Department of the
Treasury, the Custodian will not be held liable
or responsible for the delivery of securities
owned by the Fund prior to the receipt of such
collateral;

11) For delivery as security in connection with any
borrowings by the Fund requiring a pledge of
assets by the Fund, BUT ONLY against receipt of
amounts borrowed;

12) For delivery in accordance with the provisions of
any agreement among the Fund, the Custodian and a
broker-dealer registered under the Securities
Exchange Act of 1934 (the "Exchange Act") and a
member of The National Association of Securities
Dealers, Inc. ("NASD"), relating to compliance
with the rules of The Options Clearing
Corporation and of any registered national
securities exchange, or of any similar
organization or organizations, regarding escrow
or other arrangements in connection with
transactions by the Fund;

13) Upon receipt of instructions from the Fund's
transfer agent ("Transfer Agent"), for delivery
to the Transfer Agent or to the holders of Shares
in connection with distributions in kind, as may
be described from time to time in the Fund's
currently effective Prospectus and Statement of
Additional Information, in satisfaction of
requests by holders of Shares for repurchase or
redemption; and

- 3 -
<PAGE>

14) For release of securities to designated brokers
under covered call options; provided however,
that such securities shall be released only upon
payment to the Custodian of monies for the
premium due and a receipt for the securities
which are to be held in escrow. Upon exercise of
the option, or at expiration, the Custodian will
receive from brokers the securities previously
deposited. The Custodian will act strictly in
accordance with Proper Instructions in the
delivery of securities to be held in escrow and
will have no responsibility or liability for any
such securities which are not returned promptly
when due other than to make proper request for
such return;

15) For any other proper corporate purpose, BUT ONLY
upon receipt of, in addition to Proper
Instructions, a certified copy of a resolution of
the Board of Trustees or of the Executive
Committee signed by an officer of the Fund and
certified by its Secretary or an Assistant
Secretary, specifying the securities to be
delivered, setting forth the purpose for which
such delivery is to be made, declaring such
purposes to be proper corporate purposes, and
naming the person or persons to whom delivery of
such securities shall be made.

2.3 REGISTRATION OF SECURITIES. Securities held by the
Custodian (other than bearer securities) shall be
registered in the name of the Fund or in the name of any
nominee of the Fund or of any nominee of the Custodian
(which nominee shall be assigned exclusively to the
Fund), UNLESS the Fund has authorized in writing the
appointment of a nominee to be used in common with other
registered investment companies having the same
investment adviser as the Fund, or in the name or nominee
name of any agent appointed pursuant to Section 2.11 or
in the name or nominee name of any sub-custodian
appointed pursuant to Article 1 hereof. All securities
accepted by the Custodian on behalf of the Fund under the
terms of this Contract shall be in "street name" or other
good delivery form.

2.4 BANK ACCOUNTS. The Custodian shall open and maintain a
separate bank account or accounts in the name of the
Fund, subject only to draft or order by the Custodian
acting pursuant to the terms of this Contract, and shall
hold in such account or accounts, subject to the
provisions hereof, all cash received by it from or for
the account of the Fund, other than cash maintained by

- 4 -
<PAGE>

the Fund in a bank account established and used in
accordance with Rule 17f-3 under the Investment Company
Act of 1940 ("1940 Act"). Funds held by the Custodian for
the Fund may be deposited by it to its credit as
Custodian in the Banking Department of the Custodian or
in such other banks or trust companies as it may in its
discretion deem necessary or desirable; PROVIDED,
however, that every such bank or trust company shall be
qualified to act as a custodian under the 1940 Act and
that each such bank or trust company and the funds to be
deposited with each such bank or trust company shall be
approved by vote of a majority of the Board of Trustees
of the Fund. Such funds shall be deposited by the
Custodian in its capacity as Custodian and shall be
withdrawable by the Custodian only in that capacity.

2.5 PAYMENTS FOR SHARES. The Custodian shall receive from the
distributor for the Fund's Shares or from the Transfer
Agent of the Fund and deposit into the Fund's account
such payments as are received for Shares of the Fund
issued or sold from time to time by the Fund. The
Custodian will provide timely notification to the Fund
and the Transfer Agent of any receipt by it of payments
for Shares of the Fund.

2.6 INVESTMENT AND AVAILABILITY OF FEDERAL FUNDS. Upon
mutual agreement between the Fund and the Custodian, the
Custodian shall, upon the receipt of Proper Instructions,

1) invest in such instruments as may be set forth in
such instructions on the same day as received all
federal funds received after a time agreed upon
between the Custodian and the Fund; and

2) make federal funds available to the Fund as of
specified times agreed upon from time to time by
the Fund and the Custodian in the amount of
checks received in payment for Shares of the Fund
which are deposited into the Fund's account.

2.7 COLLECTION OF INCOME. The Custodian shall collect on a
timely basis all income dividends and other payments with
respect to registered securities held hereunder to which
the Fund shall be entitled either by law or pursuant to
custom in the securities business, and shall collect on a
timely basis all income dividends and other payments with
respect to bearer securities if, on the date of payment
by the issuer, such securities are held by the Custodian
or agent thereof and shall credit such income dividends
and other payments, as collected, to the Fund's custodian
account. Without limiting the generality of the
foregoing, the Custodian shall detach and present for

- 5 -
<PAGE>

payment all coupons and other income items requiring
presentation as and when they become due and shall
collect interest when due on securities held hereunder.
Income due the Fund on securities loaned pursuant to the
provisions of Section 2.2 (10) shall be the
responsibility of the Fund. The Custodian will have no
duty or responsibility in connection therewith, other
than to provide the Fund with such information or data as
may be necessary to assist the Fund in arranging for the
timely delivery to the Custodian of the income to which
the Fund is properly entitled.

2.8 PAYMENT OF FUND MONEYS. Upon receipt of Proper
Instructions, which may be continuing instructions when
deemed appropriate by the parties, the Custodian shall
pay out moneys of the Fund in the following cases only:

1) Upon the purchase of securities, for the account
of the Fund but only (a) against the delivery of
such securities, to the Custodian (or any bank,
banking firm or trust company doing business in
the United States or abroad which is qualified
under the 1940 Act, as amended, to act as a
custodian and which has been designated by the
Custodian as its agent for this purpose)
registered in the name of the Fund or in the name
of a nominee of the Custodian referred to in
Section 2.3 hereof or in proper form for
transfer; (b) in the case of a purchase effected
through a Securities System, in accordance with
the conditions set forth in Section 2.11 hereof
or (c) in the case of repurchase agreements
entered into between the Fund and the Custodian,
or another bank, or a broker-dealer which is a
member of NASD, (i) against delivery of the
securities either in certificate form or through
an entry crediting the Custodian's account at the
Federal Reserve Bank with such securities
(notwithstanding that the written agreement to
repurchase will be received subsequently) or (ii)
if the agreement is with the Custodian against
delivery of the receipt evidencing purchase by
the Fund of securities owned by the Custodian
along with written evidence of the agreement by
the Custodian to repurchase such securities from
the Fund;

2) In connection with conversion, exchange or
surrender of securities owned by the Fund as set
forth in Section 2.2 hereof;

- 6 -
<PAGE>

3) For the redemption or repurchase of Shares issued
by the Fund as set forth in Section 2.10 hereof;

4) For the payment of any expense or liability
incurred by the Fund, including but not limited
to the following payments for the account of the
Fund: interest, taxes, management, distribution,
advisory, accounting, transfer agent and legal
fees, and operating expenses of the Fund whether
or not such expenses are to be in whole or part
capitalized or treated as deferred expenses;

5) For the payment of any dividends declared
pursuant to the governing documents of the Fund;

6) For payment of the amount of dividends received
in respect of securities sold short;

7) For any other proper purpose, BUT ONLY upon
receipt of, in addition to Proper Instructions, a
certified copy of a resolution of the Board of
Trustees or of the Executive Committee of the
Fund signed by an officer of the Fund and
certified by its Secretary or an Assistant
Secretary, specifying the amount of such payment,
setting forth the purpose for which such payment
is to be made, declaring such purpose to be a
proper purpose, and naming the person or persons
to whom such payment is to be made.

2.9 LIABILITY FOR PAYMENT IN ADVANCE OF RECEIPT OF SECURITIES
PURCHASED. In any and every case where payment for
purchase of securities for the account of the Fund is
made by the Custodian in advance of receipt of the
securities purchased, in the absence of specific written
instructions from the Fund to so pay in advance, the
Custodian shall be absolutely liable to the Fund for such
securities to the same extent as if the securities had
been received by the Custodian, EXCEPT that in the case
of repurchase agreements entered into by the Fund with a
bank which is a member of the Federal Reserve System, the
Custodian may transfer funds to the account of such
bank prior to the receipt of written evidence that the
securities subject to such repurchase agreement have been
transferred by book-entry into a segregated
non-proprietary account of the Custodian maintained with
the Federal Reserve Bank of Boston or of the safe-keeping
receipt, provided that such securities have in fact been
so transferred by book-entry.

2.10 PAYMENTS FOR REPURCHASES OR REDEMPTIONS OF SHARES OF THE
FUND. From such funds as may be available for the purpose

- 7 -
<PAGE>

but subject to the limitations of the Declaration of
Trust and By-Laws and any applicable resolution of the
Fund's Board of Trustees pursuant thereto, the Custodian
shall, upon receipt of instructions from the Transfer
Agent, make funds available for payment to holders of
Shares of their authorized agents who have delivered to
the Transfer Agent a request for redemption or repurchase
of their Shares and for payment to the distributor of the
Fund's Shares for its repurchase of Shares as agent for
the Fund. In connection with the redemption or repurchase
of Shares of the Fund, the Custodian is authorized upon
receipt of instructions from the Transfer Agent to wire
funds to or through a commercial bank designated by the
redeeming shareholders or the distributor of the Fund's
shares. In connection with the redemption or repurchase
of Shares of the Fund, the Custodian shall honor checks
drawn on the Custodian by a holder of Shares, which
checks have been furnished by the Fund to the holder of
Shares, when presented to the Custodian in accordance
with such procedures and controls as are mutually agreed
upon from time to time between the Fund and the
Custodian.

2.11 APPOINTMENT OF AGENTS. The Custodian may at any time or
times in its discretion appoint (and may at any time
remove) any other bank or trust company which is itself
qualified under the 1940 Act, as amended, to act as a
custodian, as its agent to carry out such of the
provisions of this Article 2 as the Custodian may from
time to time direct; PROVIDED, however, that the
appointment of an agent shall not relieve the Custodian
of its responsibilities or liabilities hereunder.

2.12 DEPOSIT OF TRUST ASSETS IN SECURITIES SYSTEMS. The
Custodian may deposit and/or maintain securities owned by
the Fund in a clearing agency registered with the
Securities and Exchange Commission under Section 17A of
the Securities Exchange Act of 1934, which acts as a
securities depository, or in the book-entry system
authorized by the U.S. Department of the Treasury and
certain federal agencies, (collectively referred to
herein as "Securities System") in accordance with
applicable Federal Reserve Board and Securities and
Exchange Commission rules and regulations, if any, and
subject to the following provisions:

1) The Custodian may keep securities of the Fund in
a Securities System provided that such securities
are represented in an account ("Account") of the
Custodian in the Securities System which shall
not include any assets of the Custodian other

- 8 -
<PAGE>

than assets held as a fiduciary, custodian or
otherwise for customers;

2) The records of the Custodian with respect to
securities of the Fund which are maintained in a
Securities System shall identify by book-entry
those securities belonging to the Fund;

3) The Custodian shall pay for securities purchased
for the account of the Fund upon (i) receipt of
advice from the Securities System that such
securities have been transferred to the Account,
and (ii) the making of an entry on the records of
the Custodian to reflect such payment and
transfer for the account of the Fund. The
Custodian shall transfer securities sold for the
account of the Fund upon (i) receipt of advice
from the Securities System that payment for such
securities has been transferred to the Account,
and (ii) the making of an entry on the records of
the Custodian to reflect such transfer and
payment for the account of the Fund. Copies of
all advices from the Securities System of
transfers of securities for the account of the
Fund shall identify the Fund, be maintained for
the Fund by the Custodian and be provided to the
Fund at its request. Upon request, the Custodian
shall furnish the Fund confirmation of each
transfer to or from the account of the Fund in
the form of a written advice or notice and shall
furnish to the Fund copies of daily transaction
sheets reflecting each day's transactions in the
Securities System for the account of the Fund, on
the next business day.

4) The Custodian shall provide the Fund with any
report obtained by the Custodian on the
Securities System's accounting system, internal
accounting control and procedures for
safeguarding securities deposited in the
Securities System;

5) The Custodian shall have received the initial or
annual certificate, as the case may be, required
by Article 9 hereof;

6) Anything to the contrary in this Contract
notwithstanding, the Custodian shall be liable to
the Fund for any loss or damage to the Fund
resulting from use of the Securities System by
reason of any negligence, misfeasance or
misconduct of the Custodian or any of its agents

- 9 -
<PAGE>

or of any of its or their employees or from
failure of the Custodian or any such agent to
enforce effectively such rights as it may have
against the Securities System; at the election of
the Fund, it shall be entitled to be subrogated
to the rights of the Custodian with respect to
any claim against the Securities System or any
other person which the Custodian may have as a
consequence of any such loss or damage if and to
the extent that the Fund has not been made whole
for any such loss or damage.

2.13 SEGREGATED ACCOUNT. The Custodian shall upon receipt of
Proper Instructions establish and maintain a segregated
account for and on behalf of the Fund, into which account
or accounts may be transferred cash and/or securities,
including securities maintained in an account by the
Custodian pursuant to Section 2.12 hereof, (i) in
accordance with the provisions of any agreement among the
Fund, the Custodian and a broker-dealer registered under
the Exchange Act and a member of the NASD, relating to
compliance with the rules of The Options Clearing
Corporation and of any registered national securities
exchange, or of any similar organization or
organizations, regarding escrow or other arrangements in
connection with transactions by the Fund, (ii) for
purposes of segregating cash or government securities in
connection with options purchased, sold or written by the
Fund, (iii) for the purposes of compliance by the Fund
with the procedures required by Investment Company Act
Release No. 10666, or any subsequent release or releases
of the Securities and Exchange Commission relating to the
maintenance of segregated accounts by registered
investment companies and (iv) for other proper corporate
purposes, BUT ONLY, in the case of clause (iv), upon
receipt of, in addition to Proper Instructions, a
certified copy of a resolution of the Board of Trustees
or of the Executive Committee signed by an officer of the
Fund and certified by the Secretary or an Assistant
Secretary, setting forth the purpose or purposes of such
segregated account and declaring such purposes to be
proper corporate purposes.

2.14 OWNERSHIP CERTIFICATES FOR TAX PURPOSES. The Custodian
shall execute ownership and other certificates and
affidavits for all federal and state tax purposes in
connection with receipt of income or other payments with
respect to securities of the Fund held by it and in
connection with transfers of securities.

2.15 PROXIES. The Custodian shall, with respect to the
securities held hereunder, cause to be promptly executed

- 10 -
<PAGE>

by the registered holder of such securities, if the
securities are registered otherwise than in the name of
the Fund or a nominee of the Fund, all proxies, without
indication of the manner in which such proxies are to be
voted, and shall promptly deliver to the Fund such
proxies, all proxy soliciting materials and all notices
relating to such securities.

2.16 COMMUNICATIONS RELATING TO FUND PORTFOLIO SECURITIES. The
Custodian shall transmit promptly to the Fund all written
information (including, without limitation, pendency of
calls and maturities of securities and expirations of
rights in connection therewith and notices of exercise of
call and put options written by the Fund) received by the
Custodian from issuers of the securities being held for
the Fund. With respect to tender or exchange offers, the
Custodian shall transmit promptly to the Fund all written
information received by the Custodian from issuers of the
securities whose tender or exchange is sought and from
the party (or his agents) making the tender or exchange
offer. If the Fund desires to take action with respect to
any tender offer, exchange offer or any other similar
transaction, the Fund shall notify the Custodian at least
three business days prior to the date on which the
Custodian is to take such action.

2.17 PROPER INSTRUCTIONS. Proper Instructions as used
throughout this Article 2 means a writing signed or
initialled by one or more person or persons as the Fund's
Board of Trustees shall have from time to time
authorized. Each such writing shall set forth the
specific transaction or type of transaction involved,
including a specific statement of the purpose for which
such action is requested. Oral instructions will be
considered Proper Instructions if the Custodian
reasonably believes them to have been given by a person
authorized in writing to give oral instructions with
respect to the transaction involved. The Fund shall cause
all oral instructions to be confirmed in writing. Upon
receipt of a certificate of the Secretary or an Assistant
Secretary of the Fund as to the authorization by the
Board of Trustees of the Fund accompanied by a detailed
description of procedures approved by the Board of
Trustees, Proper Instructions may include communications
effected directly between electro-mechanical or
electronic devices provided that the Board of Trustees
and the Custodian are satisfied that such procedures
afford adequate safeguards for the Fund's assets.

2.18 ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY. The
Custodian may in its discretion, without express
authority from the Fund:

- 11 -
<PAGE>

1) make payments to itself or others for minor
expenses of handling securities or other similar
items relating to its duties under this Contract,
PROVIDED that all such payments shall be
accounted for to the Fund;

2) surrender securities in temporary form for
securities in definitive form;

3) endorse for collection, in the name of the Fund,
checks, drafts and other negotiable instruments;
and

4) in general, attend to all non-discretionary
details in connection with the sale, exchange,
substitution, purchase, transfer and other
dealings with the securities and property of the
Fund except as otherwise directed by the Board of
Trustees of the Fund.

2.19 EVIDENCE OF AUTHORITY. The Custodian shall be protected
in acting upon any instructions, notice, request,
consent, certificate or other instrument or paper
believed by it to be genuine and to have been properly
executed by or on behalf of the Fund. The Custodian may
receive and accept a certified copy of a vote or
resolution of the Board of Trustees of the Fund as
conclusive evidence (a) of the authority of any person to
act in accordance with such vote or resolution or (b) of
any determination or of any action by the Fund's Board of
Trustees pursuant to the Declaration of Trust as
described in such vote or resolution, and such vote or
resolution may be considered as in full force and effect
until receipt by the Custodian of written notice to the
contrary.

3. DUTIES OF CUSTODIAN WITH RESPECT TO THE BOOKS OF ACCOUNT AND
CALCULATION OF NET ASSET VALUE AND NET INCOME.
------------------------------------------------------------
The Custodian shall cooperate with and supply necessary
information to the entity or entities appointed by the Board of Trustees
of the Fund to keep the books of account of the Fund and/or compute the
net asset value per share of the outstanding shares of the Fund or, if
directed in writing to do so by the Fund, shall itself keep such books of
account and/or compute such net asset value per share. If so directed, the
Custodian shall also calculate daily the net income of the Fund including
the calculation of distribution and advisory fees, all as described in the
Fund's currently effective Prospectus and Statement of Additional
Information and shall advise the Fund and the Transfer Agent daily of the
total amounts of such fees and net income and, if instructed in writing by
an officer of the Fund to do so, shall advise the Transfer Agent
periodically of the division of such net income among its various

- 12 -
<PAGE>

components. The calculations of the net asset value per share and the
daily income of the Fund shall be made at the time or times described from
time to time in the Fund's currently effective Prospectus and Statement of
Additional Information and in accordance with the requirements of the 1940
Act and the rules thereunder.

4. RECORDS
-------
The Custodian shall create and maintain all records relating to
its activities and obligations under this Contract in such manner as will
meet the obligations of the Fund under the 1940 Act, with particular
attention to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder,
applicable federal and state tax laws and any other law or administrative
rules or procedures which may be applicable to the Fund. All such records
shall be the property of the Fund and shall at all times during the
regular business hours of the Custodian be open for inspection by duly
authorized officers, employees or agents of the Fund and employees and
agents of the Securities and Exchange Commission. The Custodian shall, at
the Fund's request, supply the Fund with a tabulation of securities owned
by the Fund and held by the Custodian and shall, when requested to do so
by the Fund and for such compensation as shall be agreed upon between the
Fund and the Custodian, include certificate numbers in such tabulations.

5. OPINION OF FUND'S INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
----------------------------------------------------------
The Custodian shall take all reasonable action, as the Fund may
from time to time request, to obtain from year to year favorable opinions
from the Fund's independent certified public accountants with respect to
its activities hereunder in connection with the preparation of the Fund's
Form N-1A, and Form N-SAR or other reports to the Securities and Exchange
Commission and with respect to any other requirements of such Commission.

6. REPORTS TO FUND BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
-----------------------------------------------------------
The Custodian shall provide the Fund, at such times as the Fund
may reasonably require, with reports by independent certified public
accountants on the accounting system, internal accounting control and
procedures for safeguarding securities, including securities deposited
and/or maintained in a Securities System, relating to the services
provided by the Custodian under this Contract; such reports, shall be of
sufficient scope and in sufficient detail, as may reasonably be required
by the Fund, and shall provide reasonable assurance that any material
inadequacies would be disclosed by such examination, and, if there are no
such inadequacies, shall so state.

7. COMPENSATION OF CUSTODIAN
-------------------------
The Custodian shall be entitled to reasonable compensation for
its services and expenses as Custodian, as agreed upon from time to time
between the Fund and the Custodian.

- 13 -
<PAGE>

8. RESPONSIBILITY OF CUSTODIAN
---------------------------
So long as and to the extent that it is in the exercise of
reasonable care, the Custodian shall not be responsible for the title,
validity or genuineness of any property or evidence of title thereto
received by it or delivered by it pursuant to this Contract and shall be
held harmless in acting upon any notice, request, consent, certificate or
other instrument reasonably believed by it to be genuine and to be signed
by the proper party or parties. The Custodian shall be held to the
exercise of reasonable care in carrying out the provisions of this
Contract, but shall be kept indemnified by and shall be without liability
to the Fund for any action taken or omitted by it in good faith without
negligence. It shall be entitled to rely on and may act upon the
reasonable advice of counsel (who may be counsel for the Fund) on all
matters, and shall be without liability for any action reasonably taken or
omitted pursuant to such advice. Notwithstanding the foregoing, the
responsibility of the Custodian with respect to redemptions effected by
check shall be in accordance with a separate Agreement entered into
between the Custodian and the Fund.

If the Fund requires the Custodian to take any action with
respect to securities, which action involves the payment of money or which
action may, in the opinion of the Custodian, result in the Custodian or
its nominee assigned to the Fund being liable for the payment of money or
incurring liability of some other form, the Fund, as a prerequisite to
requiring the Custodian to take such action, shall provide indemnity to
the Custodian in an amount and form satisfactory to it.

If the Fund requires the Custodian to advance cash or securities
for any purpose or in the event that the Custodian or its nominee shall
incur or be assessed any taxes, charges, expenses, assessments, claims or
liabilities in connection with the performance of this Contract, except
such as may arise or involve its or its nominee's own negligent action,
negligent failure to act or willful misconduct, it shall be reimbursed by
the Fund for such advances or other costs within a reasonable time after
the receipt of written notice requesting reimbursement and any property at
any time held for the account of the Fund shall be security therefor and
should the Fund fail to repay the Custodian within a reasonable time after
receipt of written notice, the Custodian shall be entitled to utilize
available cash and to dispose of Fund assets to the extent necessary to
obtain reimbursement.

9. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT
-------------------------------------------
This Contract shall become effective as of its execution, shall
continue in full force and effect until terminated as hereinafter
provided, may be amended at any time by mutual agreement of the parties
hereto and may be terminated by either party by an instrument in writing
delivered or mailed, postage prepaid to the other party, such termination
to take effect not sooner than sixty (60) days after the date of such
delivery or mailing; PROVIDED, however that the Custodian shall not act
under Section 2.12 hereof in the absence of receipt of an initial

- 14 -
<PAGE>

certificate of the Secretary or an Assistant Secretary of the Fund that
the Board of Trustees of the Fund has approved the initial use of a
particular Securities System and the receipt of an annual certificate of
such Secretary or an Assistant Secretary that the Fund's Board of Trustees
has reviewed the use by the Fund of such Securities System, as required in
each case by Rule 17f-4 under the 1940 Act, as amended; PROVIDED FURTHER,
however, that the Fund shall not amend or terminate this Contract in
contravention of any applicable federal or state regulations, or any
provision of its Declaration of Trust or By-Laws, and further provided,
that the Fund may at any time by action of its Board of Trustees (i)
substitute another bank or trust company for the Custodian by giving
notice as described above to the Custodian, or (ii) immediately terminate
this Contract in the event of the appointment of a conservator or receiver
for the Custodian by the Comptroller of the Currency or upon the happening
of a like event at the direction of an appropriate regulatory agency or
court of competent jurisdiction. Upon termination of the Contract, the
Fund shall pay to the Custodian such compensation as may be due hereunder
as of the date of such termination and shall also reimburse the Custodian
for its costs, expenses and disbursements as contemplated by this
Contract.

10. SUCCESSOR CUSTODIAN
-------------------
If a successor custodian shall be appointed by the Board of
Trustees of the Fund, the Custodian shall, upon termination, deliver to
such successor custodian at the office of the Custodian, all securities
duly endorsed and in the form for transfer, and all other property of the
Fund then held by it hereunder and shall transfer to an account of the
successor custodian all of the Fund's securities held in a Securities
System.

If this Contract is terminated and no such successor custodian
shall be appointed, the Custodian shall, in like manner, as directed by
vote of the holders of a majority of the outstanding shares of the stock
of the Fund or upon receipt of a certified copy of a vote or resolution of
the Board of Trustees of the Fund, deliver at the office of the Custodian
and transfer such securities, funds and other properties of the Fund then
held by it hereunder as specified and in accordance with such vote or
resolution.

In the event that no written order designating a successor
custodian or certified copy of a vote or resolution of the Fund's Board of
Trustees shall have been delivered to the Custodian on or before the date
when the termination of this Contract shall become effective, then the
Custodian shall have the right to deliver to a bank or trust company,
which is a "bank" as defined in the 1940 Act, doing business in Boston,
Massachusetts, of its own selection, having an aggregate capital surplus,
and undivided profits, as shown by its last published report, of not less
than $25,000,000, all securities, funds and other properties then held by
the Custodian hereunder and all instruments held by the Custodian relative
hereto and all other property held by it under this Contract and to
transfer to an account of such successor custodian all of the Fund's

- 15 -
<PAGE>

securities held in any Securities System. Thereafter, such bank or trust
company shall be the successor of the Custodian under this Contract.

In the event that securities, funds and other properties of the
Fund remain in the possession of the Custodian after the date of
termination hereof owing to failure of the Fund to deliver to the
Custodian the written order or certified copy referred to above, or of the
Fund's Board of Trustees to appoint a successor custodian, the Custodian
shall be entitled to fair compensation for its services during such period
as the Custodian retains possession of such securities, funds and other
properties and the provisions of this Contract relating to the duties and
obligations of the Custodian shall remain in full force and effect.

11. INTERPRETIVE AND ADDITIONAL PROVISIONS
--------------------------------------
In connection with the operation of this Contract, the Custodian
and the Fund may from time to time agree on such provisions interpretive
of or in addition to the provisions of this Contract as may in their joint
opinion be consistent with the general tenor of this Contract. Any such
interpretive or additional provisions shall be in a writing signed by both
parties and shall be annexed hereto, PROVIDED that no such interpretive or
additional provisions shall contravene any applicable federal or state
regulations or any provision of the Declaration of Trust of the Fund. No
interpretive or additional provisions made as provided in the preceding
sentence shall be deemed to be an amendment of this Contract.

12. ADDITIONAL FUNDS
----------------
In the event that the Fund establishes an additional series of
capital stock other than the Shares with respect to which it desires to
have the Custodian render services as custodian under the terms hereof, it
shall so notify the Custodian in writing, and if the Custodian agrees in
writing to provide such services, such additional series of shares shall
become a Fund hereunder.

13. MASSACHUSETTS LAW TO APPLY
--------------------------
This Contract shall be construed and the provisions thereof
interpreted under and in accordance with laws of The Commonwealth of
Massachusetts.

14. PRIOR CONTRACTS
---------------
This Contract supersedes and terminates, as of the date hereof,
all prior contracts between the Fund and the Custodian relating to the
custody of the Fund's assets. This Contract may not be assigned by the
Custodian, except as expressly provided in Section 10, hereof without the
prior written consent of the Fund.

- 16 -
<PAGE>

15. HEADINGS
--------
The headings of the sections of this Contract are inserted for
reference and convenience only, and shall not affect the construction of
this Contract.

16. NOTICES
-------
Any notice shall be sufficiently given when sent by overnight,
registered or certified mail to the other party at the address of such
party set forth above or at such other address as such party may from time
to time specify in writing to the other party.

IN WITNESS WHEREOF, each of the parties has caused this
instrument to be executed in its name and behalf by its duly authorized
representative and its seal to be hereunder affixed as of the 31st day of
December, 1985.

ATTEST HERITAGE CAPITAL APPRECIATION TRUST

By: /s/ Jennifer A. Tash By: /s/ Richard K. Riess
------------------------ -----------------------------

ATTEST STATE STREET BANK AND TRUST COMPANY

By: /s/ Officer By: /s/ E.D. Hawkes,Jr.
------------------------ -------------------------------
Assistant Secretary Vice President

- 17 -
<PAGE>

HERITAGE CAPITAL APPRECIATION TRUST

CUSTODIAN CONTRACT

APPENDIX A

The Custodian agrees that any claims by it against the Fund under
this Contract may be satisfied only from the assets of the Fund; that the
person executing this Contract has executed it on behalf of the Fund and
not individually, and that the obligations of the Fund arising out of this
Contract are not binding upon such person or the Fund's shareholders
individually but are binding only upon the assets and property of the
Fund; and that no shareholders, trustees or officers of the Fund may be
held personally liable or responsible for any obligations of the Fund
arising out of this Contract.

ATTEST HERITAGE CAPITAL APPRECIATION TRUST

By: /s/ Linda Champagne By: /s/ Richard K. Riess
---------------------- -------------------------

ATTEST STATE STREET BANK AND TRUST COMPANY

By: /s/ Officer By: /s/ Officer
------------------------ -------------------------
<PAGE>

<PAGE>

TRANSFER AGENCY AND SERVICE AGREEMENT

between

HERITAGE CAPITAL APPRECIATION TRUST

and

STATE STREET BANK AND TRUST COMPANY
<PAGE>

TABLE OF CONTENTS
-----------------

Page
----
Article 1 Terms of Appointment; Duties of the Bank . . . . . . 1
Article 2 Fees and Expenses . . . . . . . . . . . . . . . . . 5
Article 3 Representations and Warranties of the Bank . . . . . 6
Article 4 Representations and Warranties of the Fund . . . . . 7
Article 5 Indemnification . . . . . . . . . . . . . . . . . . 7
Article 6 Covenants of the Fund and the Bank . . . . . . . . . 11
Article 7 Termination of Agreement . . . . . . . . . . . . . . 13
Article 8 Assignment . . . . . . . . . . . . . . . . . . . . . 14
Article 9 Amendment . . . . . . . . . . . . . . . . . . . . . 14
Article 10 Merger of Agreement . . . . . . . . . . . . . . . . 15
Article 11 Miscellaneous . . . . . . . . . . . . . . . . . . . 15
Article 12 Massachusetts Law to Apply . . . . . . . . . . . . . 16
<PAGE>

TRANSFER AGENCY AND SERVICE AGREEMENT
-------------------------------------

AGREEMENT made as of the 13th day of November, 1985, by and
between HERITAGE CAPITAL APPRECIATION TRUST, a Massachusetts business
trust, having its principal office and place of business at 1400-66th
Street North, St. Petersburg, Florida 33710 (the "Fund"), and STATE STREET
BANK AND TRUST COMPANY, a Massachusetts corporation having its principal
office and place of business at 225 Franklin Street, Boston, Massachusetts
02110 (the "Bank").

WHEREAS, the Fund desires to appoint the Bank as its transfer
agent, dividend disbursing agent and agent in connection with certain
other activities, and the Bank desires to accept such appointment;

WHEREAS, the Fund is authorized to issue Shares of beneficial
interest, without par value ("Shares");

WHEREAS, Raymond James & Associates, Inc. may provide certain
shareholder services in connection with the Fund and the Fund shall not
hold the Bank responsible for such services;

NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:

Article 1 Terms of Appointment; Duties of the Bank
----------------------------------------

1.01 Subject to the terms and conditions set forth in
this Agreement, the Fund hereby employs and appoints the Bank to act as,
and the Bank agrees to act as its transfer agent for the Fund's authorized
and issued Shares; its dividend disbursing agent and its agent in
connection with any accumulation, open-account or similar plans provided
to the Shareholders of the Fund ("Shareholders") and set out in the
current effective Prospectus and Statement of Additional Information of
the Fund, including without limitation any periodic investment plan or
periodic withdrawal program.

1.02 The Bank agrees that it will perform the following
services:

(a) In accordance with the Fund's then current
Prospectus and Statement of Additional Information and procedures
established from time to time by agreement between the Fund and the Bank,
the Bank shall:

(i) receive for acceptance, orders for the purchase
of Shares, and promptly deliver payment and
appropriate documentation therefor to the
Custodian of the Fund (the "Custodian");

(ii) pursuant to purchase orders, issue the
appropriate number of Shares and hold such Shares
in the appropriate account of the Shareholder;
<PAGE>

(iii) receive for acceptance, redemption requests and
redemption directions and deliver the appropriate
documentation therefor to the Custodian;

(iv) at the appropriate time as and when the Bank
receives monies paid to it by the Custodian with
respect to any redemption, pay over or cause to
be paid over in the appropriate manner such
monies as instructed by the redeeming
Shareholder;

(v) effect transfers of Shares by the Shareholders
thereof upon receipt of appropriate instructions;

(vi) prepare and transmit payments for dividends and
distributions declared by the Fund;

(vii) maintain records of account for and advise the
Fund and its Shareholders as to the foregoing;
and

(viii) record the issuance of shares of the Fund and
maintain pursuant to Rule 17Ad-10(e) under the
Securities Exchange Act of 1934 a record of the
total number of shares of the Fund which are
authorized, based upon data provided to it by the
Fund, and issued and outstanding. Bank shall
also provide the Fund on a regular basis with the
total number of shares which are authorized and
issued and outstanding and shall have no
obligation, when recording the issuance of
shares, to monitor the issuance of such shares or
to take cognizance of any laws relating to the
issue or sale of such shares, which functions
shall be the sole responsibility of the Fund.

(b) In addition to and not in lieu of the services set
forth in the above paragraph (a), the Bank shall: (i) perform all of the
customary services of a transfer agent, dividend disbursing agent and, as
relevant, agent in connection with accumulation, open-account or similar
plans (including without limitation any periodic investment plan or
periodic withdrawal program), including but not limited to: maintaining
all Shareholder accounts, preparing Shareholder meeting lists, mailing
proxies, receiving and tabulating proxies, mailing Shareholder reports
and prospectuses to current Shareholders, withholding taxes on
non-resident alien accounts, preparing and filing U.S. Treasury Department
Forms 1099 and other appropriate forms required with respect to dividends
and distributions by federal authorities for all Shareholders, preparing
and mailing confirmation forms and statements of account to Shareholders
for all purchases and redemptions of Shares and other confirmable
transactions in Shareholder accounts, (which shall also indicate
redemptions by check if the Shareholder has elected the checkwriting

- 2 -
<PAGE>

privilege), preparing and mailing activity statements for Shareholders,
and providing Shareholder account information and (ii) provide a system
which will enable the Fund to monitor the total number of Shares sold in
each State. The Fund shall (i) identify to the Bank in writing those
transactions and assets to be treated as exempt from blue sky reporting
for each State and (ii) verify the establishment of transactions for each
State on the system prior to activation and thereafter monitor the daily
activity for each State. The responsibility of the Bank for the Fund's
blue sky State registration status is solely limited to the initial
establishment of transactions subject to blue sky compliance by the Fund
and the reporting of such transactions to the Fund as provided above.

Procedures applicable to certain of these services
described in paragraphs (a) and (b) may be established from time to time
by agreement between the Fund and the Bank and shall be subject to the
review and approval of the Fund. The failure of the Fund to establish
such procedures with respect to any service
shall not in any way diminish the duty and obligation of the Bank to
perform such service hereunder.

(c) In regard to the services set forth above, the
Bank may not provide certain shareholder services which may be provided by
Raymond James & Associates, Inc. The services to be provided shall be as
mutually agreed upon from time to time between the Fund, the Bank and
Raymond James & Associates, Inc. and as set forth in writing attached
hereto as Appendix B.

Article 2 Fees and Expenses
-----------------

2.01 For the duties and obligations to be performed by
the Bank pursuant to this Agreement, the Fund agrees to pay the Bank an
annual maintenance fee for each Shareholder account as set out in the fee
schedule attached hereto. Such fees and out-of-pocket expenses and
advances identified under Section 2.02 below may be changed from time to
time subject to mutual written agreement between the Fund and the Bank.

2.02 In addition to the fee paid under Section 2.01
above, the Fund agrees to promptly reimburse the Bank for reasonable
out-of-pocket expenses or advances incurred by the Bank for the items set
out in the fee schedule attached hereto. In addition, any other expenses
incurred by the Bank at the request or with the consent of the Fund which
are not properly borne by the Bank as part of its duties and obligations
under this Agreement will be promptly reimbursed by the Fund. Postage for
mailing of dividends, proxies, Fund reports and other mailings to all
Shareholder accounts shall be advanced to the Bank by the Fund at least
seven (7) days prior to the mailing date of such materials.

Article 3 Representations and Warranties of the Bank
------------------------------------------

The Bank represents and warrants to the Fund that:

- 3 -
<PAGE>

3.01 It is a corporation duly organized and existing and
in good standing under the laws of The Commonwealth of Massachusetts.

3.02 It is duly qualified to carry on its business in
The Commonwealth of Massachusetts.

3.03 It is empowered under applicable laws and by its
charter and by-laws to enter into and perform this Agreement.

3.04 All requisite corporate proceedings have been taken
to authorize it to enter into and perform this Agreement.

3.05 It has and will continue to have access to the
necessary facilities, equipment and personnel to perform its duties and
obligations under this Agreement in accordance with procedures established
from time to time by mutual agreement between the Fund and the Bank.

Article 4 Representations and Warranties of the Fund
------------------------------------------

The Fund represents and warrants to the Bank that;

4.01 It is a business trust duly organized and existing
and in good standing under the laws of Massachusetts.

4.02 It is empowered under applicable laws and by its
Declaration of Trust and By-Laws to enter into and perform this Agreement.

4.03 All corporate proceedings required by said
Declaration of Trust and By-Laws have been taken to authorize it to enter
into and perform this Agreement.

4.04 It is an open-end management investment company
registered under the Investment Company Act of 1940.

4.05 A Registration Statement containing a Prospectus
and Statement of Additional Information under the Securities Act of 1933
is currently effective or will become effective before any public offering
commences, and appropriate state securities law filings have been made or
will be made before any public offering in such state commences, with
respect to all Shares of the Fund being offered for sale.

Article 5 Indemnification
---------------

5.01 The Bank shall not be responsible for, and the Fund
shall indemnify and hold the Bank harmless from and against, any and all
losses, damages, and any and all reasonable costs, charges, counsel fees,
payments, expenses and liability arising out of or attributable to:

(a) All actions of the Bank or its agents or
subcontractors required to be taken by the Bank pursuant to this

- 4 -
<PAGE>

Agreement, provided the Bank and its agents or sub-contractors have acted
in good faith and without negligence or willful misconduct.

(b) The Fund's refusal or failure to comply with the
terms of this Agreement, or the Fund's lack of good faith, negligence or
willful misconduct or the breach of any representation or warranty of the
Fund hereunder.

(c) The reliance on, or use by, the Bank, its agents or
subcontractors of information, records and documents which (i) are
received by the Bank or its agents or subcontractors and furnished to it
by or on behalf of the Fund, and (ii) have been prepared and/or maintained
by the Fund or any other person or firm on behalf of the Fund.

(d) The reliance on or the carrying out by the Bank or
its agents or subcontractors of any written instructions of the Fund.
"Written Instructions" means written instructions delivered by mail,
tested telegram cable, telex or facsimile sending device and received by
the Bank, or its agents or subcontractors, signed by authorized persons.

(e) The offer or sale of Shares in violation of any
requirement under the federal securities laws or regulations or the
securities laws or regulations of any state that such Shares be registered
in such state or in violation of any stop order or other determination or
ruling by any federal agency or any state with respect to the offer or
sale of such Shares in such state.

5.02 The Fund shall not be responsible for and the Bank
shall indemnify and hold the Fund harmless from and against any and all
losses, damages, and any and all reasonable costs, charges, counsel fees,
payments, expenses and liability arising out of or attributable to the
Bank's failure to comply with the terms of this Agreement or any action or
failure or omission to act by the Bank as a result of the lack of good
faith, negligence or willful misconduct of the Bank or any of its agents
or subcontractors referred to in Section 8.03 (i) and (ii) or which arise
out of the breach of any representation or warranty of the Bank hereunder.

5.03 At any time the Bank may apply to any authorized
officer of the Fund for instructions, and may consult with experienced
securities counsel with respect to any matter arising in connection with
the services to be performed by the Bank under this Agreement, and the
Bank and its agents and subcontractors shall not be liable and shall be
indemnified by the Fund for any action taken or omitted by them in good
faith in reliance upon such instructions or upon the opinion of such
counsel that such actions or omissions comply with the terms of this
Agreement and with all applicable laws. The Bank, its agents and
subcontractors shall be protected and indemnified in acting upon any paper
or document furnished by or on behalf of the Fund, reasonably believed by
the Bank to be genuine and to have been signed by the proper person or
persons, or upon any instruction, information, data, records or documents
provided the Bank or its agents or subcontractors by machine readable
input, telex, CRT data entry or other similar means authorized by the

- 5 -
<PAGE>

Fund, and shall not be held to have notice of any change of authority of
any person, until receipt of written notice thereof from the Fund. The
Bank, its agents and subcontractors shall also be protected and
indemnified in recognizing stock certificates which are reasonably
believed to bear the proper manual or facsimile signatures of the officers
of the Fund, and the proper countersignature of any former transfer agent
or registrar or of a co-transfer agent or co-registrar.

5.04 In the event either party is unable, to perform its
obligations under the terms of this Agreement because of acts
of God, strikes, equipment or transmission failure or damage, or other
causes reasonably beyond its control, such party shall not be liable for
damages to the other party resulting from such failure to perform or
otherwise from such causes. In addition, the Bank shall enter into and
shall maintain in effect with appropriate parties one or more agreements
making reasonable provision for emergency use of electronic data
processing equipment to the extent appropriate equipment is available and
the Bank shall further use reasonable care to minimize the likelihood of
such damage, loss of data, delays and/or errors and should such damage,
loss of data, delays and/or errors occur, the Bank shall use its best
efforts to mitigate the effects of such occurrence.

5.05 Neither party to this Agreement shall be liable to
the other party for consequential damages under any provision of this
Agreement or for any act or failure to act hereunder.

5.06 In order that the indemnification provisions
contained in this Article 5 shall apply, upon the assertion of a claim or
the institution of any agency action or investigation for which either
party may be required to indemnify the other, the party seeking
indemnification shall promptly notify the other party of such assertion,
and shall keep the other party advised with respect to all developments
concerning same. The party who may be required to indemnify shall have
the option to participate with the party seeking indemnification in the
defense of same. The party seeking indemnification shall in no case
confess any claim or make any compromise in any case in which the other
party may be required to indemnify it except with the other party prior
written consent.

Article 6 Covenants of the Fund and the Bank
----------------------------------

6.01 The Fund shall promptly furnish to the Bank the
following:

(a) A certified copy of the resolution of the Board of
Trustees of the Fund authorizing the appointment of the Bank and the
execution and delivery of this Agreement.

(b) A copy of the Declaration of Trust and By-Laws of
the Fund and all amendments thereto.

- 6 -
<PAGE>

6.02 The Bank represents and warrants that to the best
of its knowledge, the various procedures and systems which the Bank has
implemented with regard to safeguarding from loss or damage the stock
certificates, check forms, facsimile signature imprinting devices, and
other property used in the performance of its obligations hereunder are
adequate and will enable the Bank to perform satisfactorily its
obligations hereunder and that the Bank will make such changes therein
from time to time as in its judgment are required for the secure
performance of its obligations hereunder.

6.03 The Bank shall keep all records relating to the
services to be performed hereunder, in the form and manner it may deem
advisable. To the extent required by Section 31 of the Investment Company
Act of 1940, as amended, and the Rules thereunder, the Bank agrees that
all such records prepared or maintained by the Bank relating to the
services to be performed by the Bank hereunder are the property of the
Fund and will be preserved, maintained and made available in accordance
with such Section and Rules, and will be surrendered promptly to the Fund
on and in accordance with its request.

6.04 The Bank and the Fund agree that all books,
records, information and data pertaining to the business of the other
party which are exchanged or received pursuant to the negotiation or the
carrying out of this Agreement shall remain confidential, and shall not be
voluntarily disclosed to any other person, except as may be required by
law.

6.05 In case of any requests or demands for the
inspection of the Shareholder records of the Fund, the Bank will endeavor
to notify the Fund and to secure instructions from an authorized officer
of the Fund as to such inspection. The Bank reserves the right, however,
to exhibit the Shareholder records to any person whenever it is advised by
its counsel that it may be held liable for the failure to exhibit the
Shareholder records to such person.

Article 7 Termination of Agreement
------------------------

7.01 This Agreement may be terminated by either party
upon sixty (60) days written notice to the other. Any such termination
shall not effect the rights and obligations of the parties under Article 5
hereof. Should the Fund exercise its right to terminate, all
out-of-pocket expenses associated with the movement of records and
material will be borne by the Fund. Additionally, the Bank reserves the
right to charge for any other reasonable expenses associated with such
termination. In the event that the Fund designates a successor to any of
the Bank's obligations hereunder, the Bank shall, at the expense and
direction of the Fund, transfer to such successor a certified list of the
Shareholders of the Fund, a complete record of the account of each
Shareholder, and all other relevant books, records and other data
established or maintained by the Bank hereunder.

- 7 -
<PAGE>

Article 8 Assignment
----------

8.01 Except as provided in Section 8.03 below, neither
this Agreement nor any rights or obligations hereunder may be assigned by
the Bank without the written consent of the Fund.

8.02 This Agreement shall inure to the benefit of and be
binding upon the parties and their respective permitted successors and
assigns.

8.03 The Bank may, without further consent on the part
of the Fund, subcontract for the performance hereof with (i) Boston
Financial Data Services, Inc., a Massachusetts corporation ("BFDS") which
is duly registered as a transfer agent pursuant to Section 17A(c)(1) of
the Securities Exchange Act of 1934 ("Section 17A(c)(1)"), (ii) a BFDS
subsidiary duly registered as a transfer agent pursuant to Section
17A(c)(1), or (iii) Raymond, James & Associates, Inc. for the performance
of certain duties in connection with the Bank's performance of this
Agreement; provided, however, that the Bank shall be as fully responsible
to the Fund for the acts and omissions of any subcontractor referred to in
(i) and (ii) above as it is for its own acts and omissions and further
provided, the Fund shall hold the Bank harmless for the acts and omissions
of Raymond James & Associates, Inc. referred to in (iii).

Article 9 Amendment
---------

9.01 This Agreement may be amended or modified only by a
written agreement executed by both parties and authorized or approved by a
regulation of the Board of Trustees of the Fund.

9.02 In the event the Fund issues additional series of
shares in addition to the Shares with respect to which it desires to have
the Bank render services as transfer agent, dividend disbursing agent and
agent under the terms hereof, it shall so notify the Bank in writing, and
if the Bank agrees, in writing to provide such services, such additional
series of Shares shall become a Fund hereunder.

Article 10 Merger of Agreement
-------------------

10.01 This Agreement constitutes the entire agreement
between the parties hereto and supersedes any prior agreement with respect
to the subject matter hereof whether oral or written.

Article 11 Miscellaneous
-------------

11.01 The Fund authorizes the Bank to provide Raymond,
James & Associates, Inc. any information it provides or makes available to
the Fund in connection with this Agreement.

- 8 -
<PAGE>

11.02 The Bank agrees to treat all records and other
information relative to the Fund and its prior, present or potential
Shareholders confidentially and the Bank on behalf of itself and its
employees agrees to keep confidential all such information, except after
prior notification to and approval in writing by the Fund, which approval
shall not be unreasonably withheld and may not be withheld where the Bank
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.

Article 12 Massachusetts Law to Apply

12.01 This Agreement shall be construed and the
provisions thereof interpreted under and in accordance with the laws of
The Commonwealth of Massachusetts.

IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed in their names and on their behalf under their
seals by and through their duly authorized officers, as of the day and
year first above written.

HERITAGE CAPITAL APPRECIATION TRUST

By: /s/ Richard K. Riess
--------------------------------

ATTEST:

/s/ Linda Champagne
-------------------------

STATE STREET BANK AND TRUST COMPANY

By: /s/ Officer
--------------------------------
Vice President

ATTEST:

By: /s/ Officer
-------------------------
Assistant Secretary

- 9 -
<PAGE>

HERITAGE ASSET MANAGEMENT

Fee Information for Services as
Plan, Transfer and Dividend Disbursing Agent
Original contract dated January 26, 1990:

ORIGINAL FEE SCHEDULE DATED JANUARY 26, 1990
AND AMENDED ON NOVEMBER 15, 1993

HERITAGE CAPITAL APPRECIATION TRUST

General - Fees are based on actual cost of services provided PLUS 10% with
a per account annual limit, plus out-of-pocket expenses. Specific charges
are listed below.

Account Charges - Heritage Asset Management will charge Heritage Capital
Appreciation Trust the actual cost of servicing accounts, not to exceed a
charge of $8.00 per account per year. The fee is billable on a monthly
basis. The billing rate shall be the lesser of actual expenses (which may
include startup costs amortized over three years) or 1/12 of the $8.00 per
account per year maximum annual fee.

Out-of-Pocket Expenses - Out-of-pocket expenses include but are not
limited to: postage, forms, telephone, microfilm, microfiche, statement
preparation and other expenses incurred at the specific direction of the
fund. Postage for mass mailings is due seven days in advance of the
mailing date.

Payment - The above fees will be due and payable five days after
notification is received at the fund's offices.

HERITAGE CAPITAL APPRECIATION TRUST HERITAGE ASSET MANAGEMENT

BY: /s/ Donald H. Glassman /s/ Stephen G. Hill
----------------------------- -------------------------

Title Treasurer President
------------------------------ -------------------------

11/15/93 11/15/93
Date ------------------------------ -------------------------
<PAGE>

<PAGE>

HERITAGE FUNDS ACCOUNTING AND PRICING SERVICES AGREEMENT
--------------------------------------------------------

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;

(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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<PAGE>

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.
-------------------

(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.
------------------------

(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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<PAGE>

(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

- 3 -
<PAGE>

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

- 4 -
<PAGE>

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.
-----------------------

(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

- 5 -
<PAGE>

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.
-----------------

(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, bill 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

- 6 -
<PAGE>

(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.
---------------------------------

(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.

- 7 -
<PAGE>

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 P.O. Box 33022, St. Petersburg, Florida 33733. Notices to a
Fund shall also be addressed to the applicable Fund at P.O. Box 33022, St.
Petersburg, Florida 33733. 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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<PAGE>

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/ Stephen G. Hill
----------------------------
Stephen G. Hill
President

HERITAGE ASSET MANAGEMENT, INC.

By: /s/ Donald H. Glassman
-----------------------------
Donald H. Glassman
Treasurer

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<PAGE>

Schedule A
----------

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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<PAGE>

<PAGE>

CONSENT OF INDEPENDENT ACCOUNTANTS

To the Trustees of Heritage
Capital Appreciation Trust:

We consent to the inclusion in Post-Effective Amendment No. 12 to
the Registration Statement of Heritage Capital Appreciation Trust on Form
N-1A of our report dated October 12, 1995 on our audit of the financial
statements and financial highlights of the Trust, which are also included
in the Registration Statement. We also consent to the reference to our
Firm under the captions "Financial Highlights" in the Prospectus and
"Independent Accountants" in the Registration Statement.

/s/ Coopers & Lybrand L.L.P.
----------------------------
COOPERS & LYBRAND L.L.P.

Boston, Massachusetts
December 26, 1995
<PAGE>

<PAGE>

November 5, 1985

Heritage Capital Appreciation Trust
1400 66th Street North
St. Petersburg, Florida 33710

Dear Sirs:

Please be advised that the 10,000 shares of beneficial interest
of Heritage Capital Appreciation Trust that we purchased on October 31,
1985 from you were purchased as an investment with no present intention of
redeeming or reselling such shares and that we do not now have any
intention of redeeming or reselling such shares.

Very truly yours,

RJ FUND MANAGEMENT, INC.

By: /s/ Richard K. Riess
-----------------------
Richard K. Riess
President

========================
RJ FUND MANAGEMENT, INC.
========================

The Raymond, James Center 1400 66th Street North
P.O. Box 12749 St. Petersburg, Florida 33733-2749 (813) 344-8143
<PAGE>

<PAGE>

HERITAGE CAPITAL APPRECIATION TRUST
CLASS A
DISTRIBUTION PLAN

WHEREAS, Heritage Capital Appreciation Trust (the "Trust") is
engaged in business as an open-end management investment company and is
registered as such under the Investment Company Act of 1940, as amended
(the "1940 Act"); and

WHEREAS, the Trust, on behalf of its one or more designated
series presently existing or hereafter established, desires to adopt a
Class A ("Class") Distribution Plan pursuant to Rule l2b-1 under the 1940
Act and the Board of Trustees of the Trust (the "Board of Trustees" or the
"Board") has determined that there is a reasonable likelihood that
adoption of this Distribution Plan will benefit the Trust and the Class A
shareholders; and

WHEREAS, the Trust intends to employ a registered broker-dealer
as Distributor of the securities of which it is the issuer;

NOW, THEREFORE, the Trust, with respect to its Class A shares,
hereby adopts this Distribution Plan (the "Plan") in accordance with Rule
l2b-1 under the 1940 Act on the following terms and conditions:

1. PAYMENT OF FEES. The Trust is authorized to pay
distribution fees for the Class A shares of up to .50% of the Trust's
average daily net assets. Such fees shall be calculated and accrued daily
and paid monthly or at such other intervals as shall be determined by the
Board in the manner provided for approval of this Plan in Paragraph 5.
The distribution and service fees shall be payable by the Trust on behalf
of the Class A shares regardless of whether those fees exceed or are less
than the actual expenses, described in Paragraph 2 below, incurred by the
Distributor with respect to such Class in a particular year.

2. DISTRIBUTION EXPENSES. The fee authorized by Paragraph 1
of this Plan shall be paid pursuant to an appropriate Distribution
Agreement in payment for any activities or expenses intended to result in
the sale and retention of Trust shares, including, but not limited to,
compensation paid to registered representatives of the Distributor and to
participating dealers who have entered into sales agreements with the
Distributor, advertising, salaries and other expenses of the Distributor
relating to selling or servicing efforts, expenses of organizing and
conducting sales seminars, printing of prospectuses, statements of
additional information and reports for other than existing shareholders,
preparation and distribution of advertising material and sales literature
and other sales promotion expenses, for providing ongoing services to
Class A shareholders.

3. ADDITIONAL COMPENSATION. This Plan shall not be
construed to prohibit or limit additional compensation derived from sales
charges or other sources that may be paid to the Distributor pursuant to
the aforementioned Distribution Agreement.

4. SHAREHOLDER APPROVAL. This Plan shall not take effect
with respect to the Class A shares until it has been approved by a vote of
at least a majority of such Class' outstanding voting securities, as
<PAGE>

defined in the 1940 Act, voting separately from any other Class of the
Trust.

5. BOARD APPROVAL. This Plan shall not take effect with
respect to any Class until it has been approved, together with any related
agreements, by vote of a majority of both (a) the Board of Trustees and
(b) those members of the Board who are not "interested persons" of the
Trust, as defined in the 1940 Act, and have no direct or indirect
financial interest in the operation of this Plan or any agreements related
to it (the "Independent Trustees"), cast in person at a meeting or
meetings called for the purpose of voting on this Plan and such related
agreements.

6. RENEWAL OF PLAN. This Plan shall continue in full force
and effect with respect to the Class A shares for successive periods of
one year from its approval as set forth in Paragraphs 4 and 5 for so long
as such continuance is specifically approved at least annually in the
manner provided for approval of this Plan in Paragraph 5.

7. REPORTS. Any Distribution Agreement entered into
pursuant to this Plan shall provide that the Distributor shall provide to
the Board of Trustees and the Board shall review, at least quarterly, or
at such other intervals as reasonably requested by the Board, a written
report of the amounts so expended and the purposes for which such
expenditures were made.

8. TERMINATION. This Plan may be terminated with respect to
the Class A shares at any time by vote of a majority of the Independent
Trustees or by a vote of a majority of the outstanding voting securities
of such Class, voting separately from any other Class of the Trust.

9. AMENDMENTS. Any change to the Plan that would materially
increase the distribution costs to the Class A shares may not be
instituted unless such amendment is approved in the manner provided for
initial approval in Paragraphs 4 and 5 hereof. Any other material change
to the Plan may not be instituted unless such change is approved in the
manner provided for initial approval in Paragraph 5 hereof.

10. NOMINATION OF TRUSTEES. While this Plan is in effect,
the selection and nomination of Independent Trustees of the Trust shall be
committed to the discretion of the Independent Trustees then in office.

11. RECORDS. The Trust shall preserve copies of this Plan
and any related agreements and all reports made pursuant to Paragraph 7
hereof for a period of not less than six years from the date of execution
of this Plan, or of the agreements or of such reports, as the case may be,
the first two years in an easily accessible place.

Date: December 12, 1985, as restated on April 3, 1995

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<PAGE>

<PAGE>

HERITAGE CAPITAL APPRECIATION TRUST
CLASS C
DISTRIBUTION PLAN

WHEREAS, the Trust, on behalf of its one or more designated
series presently existing or hereafter established, desires to adopt a
Class C ("Class") Distribution Plan pursuant to Rule l2b-1 under the 1940
Act and the Board of Trustees of the Trust (the "Board of Trustees" or the
"Board) has determined that there is a reasonable likelihood that adoption
of this Distribution Plan will benefit the Trust and the Class C
shareholders; and

WHEREAS, the Trust intends to employ a registered broker-dealer
as Distributor of the securities of which it is the issuer;

NOW, THEREFORE, the Trust, with respect to its Class C shares,
hereby adopts this Distribution Plan (the "Plan") in accordance with Rule
l2b-1 under the 1940 Act on the following terms and conditions:

1. PAYMENT OF FEES. The Trust is authorized to pay
distribution fees for the Class C shares of up to 1.00% of the Trust's
average daily net assets. Such fees shall be calculated and accrued daily
and paid monthly or at such other intervals as shall be determined by the
Board in the manner provided for approval of this Plan in Paragraph 5.
The distribution and service fees shall be payable by the Trust on behalf
of the Class C shares regardless of whether those fees exceed or are less
than the actual expenses, described in Paragraph 2 below, incurred by the
Distributor with respect to such Class in a particular year.

2. DISTRIBUTION EXPENSES. The fee authorized by Paragraph 1
of this Plan shall be paid pursuant to an appropriate Distribution
Agreement in payment for any activities or expenses intended to result in
the sale and retention of Trust shares, including, but not limited to,
compensation paid to registered representatives of the Distributor and to
participating dealers who have entered into sales agreements with the
Distributor, advertising, salaries and other expenses of the Distributor
relating to selling or servicing efforts, expenses of organizing and
conducting sales seminars, printing of prospectuses, statements of
additional information and reports for other than existing shareholders,
preparation and distribution of advertising material and sales literature
and other sales promotion expenses, or for providing ongoing services to
Class C shareholders.

4. SHAREHOLDER APPROVAL. This Plan shall not take effect
with respect to the Class C shares until it has been approved by a vote of
at least a majority of such Class' outstanding voting securities, as
<PAGE>

defined in the 1940 Act, voting separately from any other Class of the
Trust.

6. RENEWAL OF PLAN. This Plan shall continue in full force
and effect with respect to the Class C shares for successive periods of
one year from its approval as set forth in Paragraphs 4 and 5 for so long
as such continuance is specifically approved at least annually in the
manner provided for approval of this Plan in Paragraph 5.

8. TERMINATION. This Plan may be terminated with respect to
the Class C shares at any time by vote of a majority of the Independent
Trustees or by a vote of a majority of the outstanding voting securities
of such Class, voting separately from any other Class of the Trust.

9. AMENDMENTS. Any change to the Plan that would materially
increase the distribution costs to the Class C shares may not be
instituted unless such amendment is approved in the manner provided for
initial approval in Paragraphs 4 and 5 hereof. Any other material change
to the Plan may not be instituted unless such change is approved in the
manner provided for initial approval in Paragraph 5 hereof.

Date: April 3, 1995

- 2 -
<PAGE>

<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF RETURN

Return Since One-Year Five-Year
Inception Return Return
<S> <C> <C> <C> <C>
Ending Date 8/31/93 8/31/93 8/31/93
Inception Date 12/11/85 8/31/92 8/31/88
-------- ------- -------
Days Since Inception 2820 365 1826
======= ====== =======

Years Since Inception 7.73 1.00 5.00

Beginning Offering Price 10.10 14.21 11.19

Ending Net Asset Value 15.62 15.62 15.62
Dividend Factor 1.478456 1.097860 1.296669
-------- -------- --------
Ending Net Asset Value 23.0935 17.1486 20.2540
Adjusted for Dividend -------- -------- --------
Reinvestments

Annualized Return 11.30% 20.68% 12.59%

Formula for Since Inception (((23.09)/(10.10))^(1/7.73))-1

Formula for One Year (((17.15)/(14.21))^(1))-1

Formula for Five Years (((20.25)/11.19))^(1/5))-1

Beginning NAV 9.70 13.64 10.74

Cumulative Total Return 138.08% 25.72% 88.58%

Formula for since inception (23.09-9.70)/9.70

Formula for One Year (17.15-13.64)/13.64

Formula for Five Years (20.25-10.74)/10.74

</TABLE>
<PAGE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER>
<NAME> HERITAGE CAPITAL APPRECIATION TRUST - CLASS A

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-START> SEP-01-1994
<PERIOD-END> AUG-31-1995
<INVESTMENTS-AT-COST> $57,267,783
<INVESTMENTS-AT-VALUE> $73,202,688
<RECEIVABLES> $250,012
<ASSETS-OTHER> $73,223,328
<OTHER-ITEMS-ASSETS> $0
<TOTAL-ASSETS> $73,473,340
<PAYABLE-FOR-SECURITIES> $30,870
<SENIOR-LONG-TERM-DEBT> $0
<OTHER-ITEMS-LIABILITIES> $162,146
<TOTAL-LIABILITIES> $193,016
<SENIOR-EQUITY> $0
<PAID-IN-CAPITAL-COMMON> $51,628,079
<SHARES-COMMON-STOCK> 4,718,753
<SHARES-COMMON-PRIOR> 4,860,503
<ACCUMULATED-NII-CURRENT> $202,995
<OVERDISTRIBUTION-NII> $0
<ACCUMULATED-NET-GAINS> $5,514,345
<OVERDISTRIBUTION-GAINS> $0
<ACCUM-APPREC-OR-DEPREC> $15,934,905
<NET-ASSETS> $73,280,324
<DIVIDEND-INCOME> $900,342
<INTEREST-INCOME> $597,661
<OTHER-INCOME> $0
<EXPENSES-NET> $1,151,767
<NET-INVESTMENT-INCOME> $346,236
<REALIZED-GAINS-CURRENT> $6,822,883
<APPREC-INCREASE-CURRENT> $127,074
<NET-CHANGE-FROM-OPS> $7,296,193
<EQUALIZATION> $0
<DISTRIBUTIONS-OF-INCOME> $258,567
<DISTRIBUTIONS-OF-GAINS> $5,533,950
<DISTRIBUTIONS-OTHER> $0
<NUMBER-OF-SHARES-SOLD> 344,134
<NUMBER-OF-SHARES-REDEEMED> 914,412
<SHARES-REINVESTED> 428,528
<NET-CHANGE-IN-ASSETS> $1,096,993
<ACCUMULATED-NII-PRIOR> $115,326
<ACCUMULATED-GAINS-PRIOR> $6,641,529
<OVERDISTRIB-NII-PRIOR> $0
<OVERDIST-NET-GAINS-PRIOR> $0
<GROSS-ADVISORY-FEES> $533,632
<INTEREST-EXPENSE> $0
<GROSS-EXPENSE> $1,151,767
<AVERAGE-NET-ASSETS> $71,150,933
<PER-SHARE-NAV-BEGIN> $15.30
<PER-SHARE-NII> $0.08
<PER-SHARE-GAIN-APPREC> $1.37
<PER-SHARE-DIVIDEND> $0.06
<PER-SHARE-DISTRIBUTIONS> $1.16
<RETURNS-OF-CAPITAL> $0.00
<PER-SHARE-NAV-END> $15.53
<EXPENSE-RATIO> 1.62
<AVG-DEBT-OUTSTANDING> $0
<AVG-DEBT-PER-SHARE> $0

</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER>
<NAME> HERITAGE CAPITAL APPRECIATION TRUST - CLASS C

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-START> SEP-01-1994
<PERIOD-END> AUG-31-1995
<INVESTMENTS-AT-COST> $57,267,783
<INVESTMENTS-AT-VALUE> $73,202,688
<RECEIVABLES> $250,012
<ASSETS-OTHER> $73,223,328
<OTHER-ITEMS-ASSETS> $0
<TOTAL-ASSETS> $73,473,340
<PAYABLE-FOR-SECURITIES> $30,870
<SENIOR-LONG-TERM-DEBT> $0
<OTHER-ITEMS-LIABILITIES> $162,146
<TOTAL-LIABILITIES> $193,016
<SENIOR-EQUITY> $0
<PAID-IN-CAPITAL-COMMON> $51,628,079
<SHARES-COMMON-STOCK> 4,718,753
<SHARES-COMMON-PRIOR> 4,860,503
<ACCUMULATED-NII-CURRENT> $202,995
<OVERDISTRIBUTION-NII> $0
<ACCUMULATED-NET-GAINS> $5,514,345
<OVERDISTRIBUTION-GAINS> $0
<ACCUM-APPREC-OR-DEPREC> $15,934,905
<NET-ASSETS> $73,280,324
<DIVIDEND-INCOME> $900,342
<INTEREST-INCOME> $597,661
<OTHER-INCOME> $0
<EXPENSES-NET> $1,151,767
<NET-INVESTMENT-INCOME> $346,236
<REALIZED-GAINS-CURRENT> $6,822,883
<APPREC-INCREASE-CURRENT> $127,074
<NET-CHANGE-FROM-OPS> $7,296,193
<EQUALIZATION> $0
<DISTRIBUTIONS-OF-INCOME> $258,567
<DISTRIBUTIONS-OF-GAINS> $5,533,950
<DISTRIBUTIONS-OTHER> $0
<NUMBER-OF-SHARES-SOLD> 344,134
<NUMBER-OF-SHARES-REDEEMED> 914,412
<SHARES-REINVESTED> 428,528
<NET-CHANGE-IN-ASSETS> $1,096,993
<ACCUMULATED-NII-PRIOR> $115,326
<ACCUMULATED-GAINS-PRIOR> $6,641,529
<OVERDISTRIB-NII-PRIOR> $0
<OVERDIST-NET-GAINS-PRIOR> $0
<GROSS-ADVISORY-FEES> $533,632
<INTEREST-EXPENSE> $0
<GROSS-EXPENSE> $1,151,767
<AVERAGE-NET-ASSETS> $71,150,933
<PER-SHARE-NAV-BEGIN> $14.18
<PER-SHARE-NII> ($0.01)
<PER-SHARE-GAIN-APPREC> $1.33
<PER-SHARE-DIVIDEND> $0.00
<PER-SHARE-DISTRIBUTIONS> $0.00
<RETURNS-OF-CAPITAL> $0.00
<PER-SHARE-NAV-END> $15.50
<EXPENSE-RATIO> 2.17
<AVG-DEBT-OUTSTANDING> $0
<AVG-DEBT-PER-SHARE> $0

</TABLE>