EXHIBIT A
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT dated as of October 6, 1992, between CANANDAIGUA NATIONAL
COLLECTIVE INVESTMENT FUND FOR QUALIFIED TRUSTS (the "Trust") and THE
CANANDAIGUA NATIONAL BANK AND TRUST COMPANY, as trustee of the Trust
("Canandaigua National" or the "Trustee").
WHEREAS, the Trust has been established to provide a satisfactory
diversification of investments for various Qualified Trusts established
under trust instruments with Canandaigua National as trustee and maintained
in conformity with Section 401(a) or 408(a) of the Internal Revenue Code;
WHEREAS, the Trust will be registered with the Securities and Exchange
Commission as an open-end diversified investment company under the
Investment Company Act;
WHEREAS, the Supervisory Committee of the Trust desires Canandaigua
National as Trustee of the Trust, to manage the investment of the assets of
the Trust, to make available to certain Qualified Trusts the Units of the
Trust, and to render all other fiduciary services to the Trust, and the
Trustee is willing to render such services; and
WHEREAS, the Trustee of the Trust, in order to comply with the
requirements of the Investment Company act, has assigned responsibility for
these fiduciary services among its divisions and is entering into this
Agreement, subject to the approval of the Supervisory Committee and the
Participating Trusts, to provide for these services;
NOW THEREFORE, in consideration of the mutual covenants and agreements
herein, the parties hereto hereby agree as follows:
SECTION 1
DEFINITIONS
Unless otherwise defined in this Agreement, capitalized terms used in
this Agreement will have the meanings attributed to them in the Declaration
of Trust, dated September 9, 1992, establishing the Trust (the "Declaration
of Trust").
SECTION 2
INVESTMENT ADVISORY SERVICES
(a) AGREEMENT TO ACT AS INVESTMENT ADVISOR. Subject to the direction
of the Supervisory Committee, the Trustee will manage the investment and
reinvestment of the assets of the Trust as follows:
(i) The Trustee will maintain a continuous investment program
for the Trust, not inconsistent with the investment objectives and policies
of the Trust as set forth in the Registration Statement of the Trust on
Form N-1A filed with the Securities and Exchange Commission relating to the
Units, as from time to time amended (the "Registration Statement").
(ii) The Trustee, in the performance of its duties and
obligations under this Section 2, will act in conformity with the
Declaration of Trust, with the policies of the Trust as set forth in the
Registration Statement and with the instructions and directions of the
Supervisory Committee and will comply with the requirements of the federal
and state laws including, without limitation, the applicable regulations
and rulings of the United States Comptroller of the Currency relating to
fiduciary powers of national banks.
(iii) The Trustee will determine the securities to be purchased
or sold by the Trust and will place orders pursuant to its determinations
either directly with the issuer or with any broker or dealer who deals in
the securities in which the Trust is active. In placing orders with
brokers or dealers the Trustee will have the objective of obtaining a
combination of the most favorable commission and the best price obtainable
on each transaction, taking into consideration the quality of execution.
The Trustee will also consider in the allocation of investment transactions
the research and investment information provided by brokers and dealers.
The Trustee will determine what portion of each Investment Fund should be
invested in securities described by the policies of such Investment Fund
and what portion, if any, should be held uninvested.
On occasions when the Trustee deems the purchase or sale of a security
to be in the best interest of the Trust as well as other customers, the
Trustee, to the extent permitted by applicable law, may aggregate the
securities to be so sold or purchased in order to obtain the best execution
or lower brokerage commissions, if any. In such event, allocation of the
securities so purchased or sold, as well as the expenses incurred in the
transaction, will be made by the Trustee in the manner it considers to be
the most equitable and consistent with its fiduciary obligations to the
Trust and to such other customers.
(iv) The Trustee will maintain books and records with respect
to the Trust's securities transactions and will render to the Supervisory
Committee such periodic and special reports as the Supervisory Committee
may reasonably request.
(v) The investment management services of the Trustee to the
Trust under this Agreement are not to be deemed exclusive, and the Trustee
will be free to render similar services to others.
(vi) The Trustee may have deposit, loan and other commercial
banking relationships with issuers of securities purchased by the Trust,
including outstanding loans to such issuers which may be repaid in whole or
in part with proceeds of securities purchased by the Trust. However, the
Trustee will not purchase securities in registered or unregistered
offerings where the Trustee knows, or should know, that the proceeds of the
offering will be used to repay loans from the Trustee.
(vii) The Trust will have the benefit of the investment
analysis and research, the review of current economic conditions and trends
and the consideration of long-range investment policy now generally
available to investment advisory customers of the Trustee. It is
understood that the Trustee will not use any inside information pertinent
to investment decisions undertaken in connection with this Agreement that
may be in its possession or in the possession of any of its affiliates, nor
will the Trustee seek to obtain any such information.
(b) AVOIDANCE OF INCONSISTENT POSITIONS. In connection with
purchases or sales of securities for the Trust, neither the Trustee nor any
of its directors, officers or employees will act as a principal or agent or
receive any commissions. If the Trustee is called upon to give advice to a
customer concerning the Trust, it may act as investment adviser for such
customer, provided that it discloses its position with respect to the Trust
to such customer.
(c) STANDARD OF CARE
(i) The Trustee shall invest the assets of the Trust in the
manner provided herein and shall have no duty or responsibility with
respect to the diversification of the assets of the Trust, except with
respect to the diversification of the assets of the Trust as contemplated
by the Registration Statement.
(ii) The Trustee will be under no liability or obligation to
anyone with respect to any failure on the part of the Supervisory Committee
to perform any of its obligations under the Declaration of Trust or any
agreement affecting the Trust or under the terms of this Agreement or for
any error or omission whatsoever on the part of the Supervisory Committee.
SECTION 3
AVAILABILITY OF UNITS
(a) AGREEMENT TO MAKE UNITS AVAILABLE. The Trustee agrees to inform
persons or entities who may establish Qualified Trusts with it of the
availability of the Units as an investment option for funds deposited in
Qualified Trusts. The Units will be made available upon the terms and at
the current offering prices described in the Registration Statement.
(b) COMPLIANCE WITH LAWS. In performing its duties under this
Section 3, the Trustee will act in conformity with the Declaration of
Trust, with the policies of the Trust as set forth in the Registration
Statement and with the instructions and directions of the Supervisory
Committee and will comply with the requirements of the Investment Company
Act and all other applicable federal and state laws and regulations.
SECTION 4
OTHER SERVICES
(a) BOOKS, RECORDS AND ACCOUNTS. The Trustee will maintain proper
books of account and complete records of all transactions of each
Investment Fund of the trust in accordance with the Investment Company Act
and with generally accepted accounting principles and will render
statements or copies thereof from time to time as requested by the
Supervisory Committee or as may otherwise be required by law. The Trustee
will calculate the net asset value of the Investment Funds in accordance
with the terms of the Declaration of Trust and the methods and policies
adopted by the Supervisory Committee and will assist in the preparation and
distribution of communications to the Participating Trusts and in all
audits of the Trust.
(b) OFFICE FACILITIES, PERSONNEL, SERVICES, ETC. The Trustee at its
own expense, will furnish to the Trust such personnel, office space and
facilities as may be necessary in the conduct of its business, including
light, heat, telephone service, office equipment and stenographic services
in connection with the operation of such office, and shall make available
and shall provide personnel to the Trust to serve without compensation as
officers of the Trust and as members of the Supervisory Committee.
SECTION 5
EXPENSES
(a) INVESTMENT ADVISORY EXPENSES. During the term of this Agreement,
the Trustee will pay all expenses incurred by it in connection with its
activities under Section 2 of this Agreement other than the cost of, and
taxes and brokerage commissions with respect to, securities purchased for
the Trust.
(b) OTHER EXPENSES. Except for expenses to be paid by the Trustee as
set forth in Sections 4(b) and 5(a), the Trustee shall be reimbursed by the
Trust for all expenses incurred by it pursuant to Sections 2 and 4 of this
Agreement on behalf of the Trust, including, but not limited to, fees and
expenses of members of the Supervisory Committee who are not affiliated
with Canandaigua National; interest charges; taxes; brokerage commissions;
expenses of valuing assets; expenses of issue, withdrawal and exchange of
the Units; fees and disbursements of independent accountants and legal
counsel; expenses of preparing, printing and mailing prospectuses, reports,
proxies, notices and statements sent to Participating Trusts; expenses of
meetings of Participating Trusts; association membership dues; and
insurance premiums. The Trust shall also be liable for nonrecurring
expenses, including litigation to which the Trust is a party.
SECTION 6
COMPENSATION OF THE TRUSTEE
(a) COMPENSATION FOR SERVICES. For all services to be rendered by
the Trustee pursuant to Sections 2 and 4 of this Agreement, the Trust
shall, with respect to each Investment Fund of the Trust, pay to the
Trustee as full compensation the fee set forth in the schedule attached
hereto relating to such Investment Fund.
(b) REIMBURSEMENT OBLIGATION. The Trustee shall reimburse the Trust
out of the compensation received pursuant to Section 6(a) hereof for the
amount, if any, by which the expenses of the Trust, including payments made
to the Trustee hereunder, exceed the lower of (i) 1.5% of the average daily
value of the Trust's net assets during such year and (ii) the most
restrictive expense limitation applicable to the Trust imposed by any
jurisdiction in which Units are offered for sale. Such reimbursement shall
be made by the Trustee promptly upon demand by the Trust.
SECTION 7
MISCELLANEOUS
(a) DURATION AND TERMINATION. This Agreement shall become effective
as to each Investment Fund immediately upon (i) approval by a Majority of
the outstanding Units of such Investment Fund and by a majority of the
members of the Supervisory Committee who are not parties to this Agreement
or "interested persons" of any such party as that term is used in the
Investment Company Act, cast in person at a meeting of the Supervisory
Committee called for the purpose of voting on this Agreement, and (ii) the
subsequent execution by both Canandaigua National and the Trust. This
Agreement shall remain in effect for two (2) years after the date it
becomes effective, and from year to year thereafter, but only so long as
such continuance is approved at least annually either by the vote of a
majority of the members of the Supervisory Committee, including specific
approval by a majority of such persons who are not parties to this
Agreement or "interested persons" of any such party as that term is used in
the Investment Company Act, or by the vote of a Majority of the outstanding
Units of each Investment Fund. This Agreement may be terminated on 60
days' prior written notice, as to any Investment Fund at any time without
the payment of any penalty, by the vote of a majority of the members of the
Supervisory Committee, by the vote of a Majority of the outstanding Units
of such Investment Fund, or by the Trustee. This Agreement shall
automatically and immediately terminate in the event of the assignment of
the Agreement, or of only Section 2 hereof, within the meaning of Section
15(a)(4) of the Investment Company Act.
(b) AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may
be changed, waived, discharged or terminated as to any Investment Fund
orally, but only by an instrument in writing signed by the Trust and
Canandaigua National, and no amendment of this Agreement shall be effective
until approved by the vote of a majority of the members of the Supervisory
Committee who are not parties to this Agreement or "interested persons" of
any such party as that term is used in the Investment Company Act, cast in
person at a meeting called for the purpose of voting on such amendment,
and, if required by the Investment Company Act, the vote of a Majority of
the outstanding Units of each Investment Fund.
(c) QUARTERLY REPORTS. The Trustee will prepare and furnish to the
Supervisory Committee, at least quarterly, written reports setting forth
(i) the amounts paid by the Trust and on behalf of the Trust at the Trust's
expense pursuant to this Agreement or any agreement related to this
Agreement, and (ii) the purposes for which such expenditures were made.
(d) GOVERNING LAW. This Agreement shall be governed by, and
construed by, and construed in accordance with, the laws of the State of
New York.
IN WITNESS WHEREOF, Canandaigua National and the Trust have caused
this Agreement to be executed as of the day and year first above written.
THE CANANDAIGUA NATIONAL BANK
BANK AND TRUST COMPANY
By:_____________________________________
Name: Xxxxxx X. Xxxxxx, XX
Title: President, Chief Executive Officer
and Trust Officer
CANANDAIGUA NATIONAL COLLECTIVE
INVESTMENT FUND FOR QUALIFIED
TRUSTS
By: The Canandaigua National Bank and
Trust Company, Trustee
By:_____________________________________
Name: Xxxxxx X. Xxxxxx
Title: Chairman, Supervisory Committee
NOTE: THIS AGREEMENT HAS BEEN ENTERED INTO BY THE CANANDAIGUA
NATIONAL BANK AND TRUST COMPANY ON BEHALF OF THE CANANDAIGUA NATIONAL
COLLECTIVE INVESTMENT FUND FOR QUALIFIED TRUSTS. AS PROVIDED FOR IN
THE DECLARATION OF TRUST CREATING SUCH TRUST, ANY OBLIGATIONS OR
LIABILITIES CREATED UNDER THIS AGREEMENT BIND ONLY THE TRUST ESTATE.
NONE OF THE OBLIGATIONS CREATED HEREUNDER ARE PERSONALLY BINDING
UPON, NOR SHALL RESORT BE HAD TO, NOR RECOURSE OR SATISFACTION SOUGHT
FROM, THE PROPERTY OF ANY OF THE TRUSTEE, THE UNITHOLDERS OR THE
EMPLOYEES OR AGENTS OF THE TRUSTEE, WHETHER THE CLAIM GIVING RISE TO
A CLAIM AGAINST THE PROPERTY OF ANY OF THE TRUSTEE, THE UNITHOLDERS,
OR THE EMPLOYEES OR AGENTS OF THE TRUSTEE IS BASED ON CONTRACT, TORT
OR OTHERWISE.
COMPENSATION SCHEDULE
CANANDAIGUA NATIONAL COLLECTIVE INVESTMENT FUND
FOR QUALIFIED TRUST
Investment Funds: Bond Portfolio; Stock Portfolio
Compensation terms expressed as annual rate:
1.00% on the average daily total net assets of the Investment
Fund;
Total net assets shall be determined as of the close of business on each
day that total net assets are determined pursuant to the Declaration of
Trust and on any day for which total net assets are not determined, the
most recent preceding total net asset valuation available shall be used.
Payment shall be made to the Trustee on the last day of each month on which
the Trustee is open for business.
