Exhibit 23 (D)(2)
INVESTMENT ADVISORY AGREEMENT
FOR AVALON TRUST COMPANY
This Agreement is made and entered into as of the 15TH day of October,
1999, by and between Declaration Fund, an unincorporated Pennsylvania business
trust (the "Fund"), and Avalon Trust Company, a regulated trust company
operating under the laws of the State of New Mexico ("Adviser").
WHEREAS, Fund is registered as an open-end management investment to time,
and with all applicable laws and regulations. All Services to be furnished by
Adviser under this Agreement may be furnished through the medium of any
directors, officers or employees of Adviser or through such other parties as
Adviser may determine from time to time.
Adviser agrees, at its own expense or at the expense of one or more of its
affiliates, to render the Services and to provide the office space, furnishings,
equipment and personnel as may be reasonably required to perform the Services on
the terms and for the compensation provided herein. Adviser shall authorize and
permit any of its officers, directors and employees, who may be elected as
trustees or officers of Fund, to serve in the capacities in which they are
elected.
Except to the extent expressly assumed by Adviser herein and except to the
extent required by law to be paid by Adviser, Fund shall pay all costs and
expenses in connection with its operations and organization.
(b) Books and Records. All books and records prepared and maintained by
Adviser for Fund under this Agreement shall be the property of Fund and, upon
request therefor, Adviser shall surrender to Fund such of the books and records
so requested.
2. Portfolio Transactions. Adviser is authorized to select the brokers or
dealers that will execute the purchases and sales of portfolio securities for
the Portfolio and is directed to use its best efforts to obtain the best net
results as described in the Portfolio's then current prospectus and statement of
additional information. Adviser may, in its discretion, purchase and sell
portfolio securities from and to brokers and dealers who provide the Portfolio
with research, analysis, advice and similar services, and Adviser may pay to
these brokers and dealers, in return for research and analysis, a higher
commission or spread than may be charged by other brokers and dealers, provided
that Adviser determines in good faith that such commission is reasonable in
terms either of that particular transaction or of the overall responsibility of
Adviser to the Portfolio and Adviser's other clients and that the total
commission paid by the Portfolio will be reasonable in relation to the benefits
to the Portfolio over the long-term. Adviser will promptly communicate to the
officers and the trustees of Fund such information relating to portfolio
transactions as they may reasonably request.
3. Compensation of Adviser. Fund will pay to Adviser on the last day of
each month a fee at an annual rate equal to 1.00% of the daily average net asset
value of the Portfolio, such fee to be computed daily based upon the net asset
value of the Portfolio as determined by a valuation made in accordance with the
Fund's procedure for calculating Portfolio net asset value as described in the
Portfolio's then current Prospectus and/or Statement of Additional Information.
During any period when the determination of the Portfolio's net asset value is
suspended by the trustees of Fund, the net asset value of a share of the
Portfolio as of the last business day prior to such suspension shall, for the
purpose of this Paragraph 3, be deemed to be net asset value at the close of
each succeeding business day until it is again determined.
4. Status of Investment Adviser. The services of Adviser to Fund are not to
be deemed exclusive, and Adviser shall be free to render similar services to
others so long as its services to the Portfolio are not impaired thereby.
Adviser shall be deemed to be an independent contractor and shall, except as
expressly set forth in this Agreement, have no authority to act for or represent
Fund in any way or otherwise be deemed an agent of Fund. Nothing in this
Agreement shall limit or restrict the right of any director, officer or employee
of Adviser, who may also be a director, officer, or employee of Fund, to engage
in any other business or to devote his or her time and attention in part to the
management or other aspects of any other business, whether of a similar nature
or a dissimilar nature.
5. Permissible Interests. Trustees, agents, and stockholders of Fund may be
affiliated with or have an interest in Adviser (or any successor thereof) as
directors, partners, officers, or stockholders, or otherwise, and directors,
partners, officers, agents, and stockholders of Adviser may be affiliated with
or have an interest in Fund as directors, stockholders or otherwise; and Adviser
(or any successor) may be affiliated with or have an interest in Fund as a
stockholder or otherwise.
6. Liability of Investment Adviser. Adviser assumes no responsibility under
this Agreement other than to render the Services called for hereunder in good
faith. Adviser shall not be liable for any error of judgment or for any loss
suffered by Fund or the Portfolio in connection with any matter to which this
Agreement relates, except;
(a) a loss resulting from a breach of fiduciary duty with respect to
receipt of compensation for services (in which case any award of damages shall
be limited to the period and the amount set forth in Section 36(b)(3) of the
Act); or
(b) a loss resulting from the reckless disregard, willful misfeasance, bad
faith or gross negligence by the Adviser in the performance of its obligations
and duties under this Agreement.
7. Term. This Agreement shall remain in effect until October 15, 2001, and
from year to year thereafter provided such continuance is approved at least
annually by (1) the vote of a majority of the Board of Trustees of Fund or (2) a
vote of a "majority" (as that term is defined in the Act) of the Portfolio's
outstanding securities, provided that in either event such continuance is also
approved by vote of a majority of the trustees of Fund who are not parties to
this Agreement or "interested persons" (as defined in the Act) of any such
party, which vote must be cast in person at meeting called for the purpose of
voting on such approval; provided, however, that;
(a) Fund may, at any time and without the payment of any penalty, terminate
this Agreement upon 60 days written notice to Adviser;
(b) the Agreement shall immediately terminate in the event of its
assignment (within the meaning of the Act and the Rules thereunder); and
(c) Adviser may terminate this Agreement at any time and without the
payment of any penalty on 60 days written notice to Fund; and
(d) the terms of paragraph 6 of this Agreement shall survive the
termination of this Agreement.
8. Notices. Except as otherwise provided in this Agreement, any notice or
other communication required by or permitted to be given in connection with this
Agreement will be in writing and will be delivered in person or sent by first
class mail, postage prepaid or by prepaid overnight delivery xxxxxx above.
DECLARATION FUND AVALON TRUST COMPANY
_______________________________ ______________________________
By: Xxxxxxx X. Xxxxx By: Xxxxx Xxxxxx
President President & Chief Executive Officer
ATTEST: ATTEST:
_______________________________ ______________________________
By: ___________________________ By: __________________________
Secretary Secretary
[Corporate Seal] [Corporate Seal]
