INVESTMENT ADVISORY AGREEMENT
[VALUE EQUITY FUND]
AGREEMENT made as of December 5, 1989 between COREFUNDS, INC., a
Maryland corporation (hereinafter the "Fund"), and CORESTATES INVESTMENT
ADVISERS, INC., a Pennsylvania corporation (hereinafter the "Investment
Adviser").
WHEREAS, the Fund is registered as an open-end, diversified, management
investment company under the Investment Company Act of 1940, as amended ("1940
Act"); and
WHEREAS, the Fund is authorized to issue shares of Common Stock in
separate series representing shares in a separate portfolio of securities and
other assets; and
WHEREAS, the Fund desires to retain the Investment Adviser to furnish
investment advisory services to the Fund and certain of its portfolios, and the
Investment Adviser is willing to so 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 Fund hereby appoints the Investment Adviser to act
as investment adviser to the Fund for the period and on the terms set forth in
this Agreement. The Investment Adviser accepts such appointment and agrees to
furnish the services herein set forth for the compensation herein provided.
2. Delivery of Documents. The Fund has furnished the Investment Adviser
with copies properly certified or authenticated of each of the following:
(a) the Fund's Articles of Incorporation, as filed with the Secretary of
State of Maryland on September 11, 1984, and all amendments thereto (such
Articles, as presently in effect and as they shall from time to time be amended
or supplemented, are herein called the "Articles of Incorporation");
(b) the Fund's By-Laws and amendments thereto (such By-Laws, as
presently in effect and as they shall from time to time be amended, are herein
called the "By-Laws");
(c) resolutions of the Fund's Board of Directors authorizing the
appointment of the Investment Adviser and approving this Agreement;
(d) the Fund's Notification of Registration on Form N-8A under the 1940
Act as filed with the Securities and Exchange Commission on September 11, 1984
and all amendments thereto;
(e) the Fund's Registration Statement on Form N-1A under the Securities
Act of 1933, as amended ("1933 Act") (File No. 2-93214) and under the 1940 Act
as filed with the Securities and Exchange Commission and all amendments thereto;
and
(f) the Fund's most recent Prospectus and Statement of Additional
Information (such Prospectus and Statement of Additional Information, as
presently in effect and all amendments and supplements thereto, are herein
called the "Prospectus").
The Fund will furnish the Investment Adviser from time to time with
copies of all amendments of or supplements to the foregoing.
3. Management. Subject to the supervision of the Fund's Board of
Directors, the Investment Adviser will provide a continuous investment program
for certain portfolios of the Fund, including investment guidelines and
management with respect to all securities and investments and cash equivalents
held by the Value Equity Fund and such other portfolios (hereinafter
collectively, the "Portfolios") offered by the Fund and identified by the Fund
as appropriate to use a sub-investment adviser. The Investment Adviser will
determine from time to time what securities and other investments will be
purchased, retained, or sold by the Fund. The Investment Adviser will provide
the services under this Agreement in accordance with the Fund's investment
objective, policies, and restrictions as stated in the Prospectus and
resolutions of the Fund's Board of Directors. Notwithstanding the foregoing, the
Investment Adviser may from time to time, subject to the approval and
supervision of the Fund's Board of Directors, retain a person or persons
satisfactory to the Fund ("Sub-Adviser") to provide sub-investment advisory
services in accordance with the Fund's investment objective, policies and
restrictions as stated in the Fund's Prospectus and resolutions of the Fund's
Board of Directors. The Sub-Adviser shall agree to comply with all provisions
applicable to the Investment Adviser hereunder. If the Investment Adviser
retains a Sub-Adviser, the Fund shall have no responsibility to pay the
Sub-Adviser, any such compensation to be paid by the Investment Adviser from the
amount paid to it pursuant to Section 7 of this Agreement.
The Investment Adviser further agrees that it:
(a) will conform with all applicable Rules and Regulations of the
Securities and Exchange Commission and will in addition conduct its activities
under this Agreement in accordance with any regulations of the Comptroller of
the Currency pertaining to the investment advisory activities of national banks;
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(b) will not make loans to any person to purchase or carry the Fund
shares or make loans to the Fund;
(c) will place orders pursuant to its investment determinations for the
Fund either directly with the issuer or with any broker or dealer. In placing
orders with brokers and dealers the primary consideration of the Investment
Adviser will be the prompt execution of orders in an effective manner at the
most favorable price. Subject to this consideration, brokers or dealers who
provide supplemental research to the Investment Adviser may receive orders for
transactions with the Fund. In no instance will portfolio securities be
purchased from or sold to Fairfield Group, Inc., CoreStates Financial Corp, or
any affiliated person of either the Fund, Fairfield Group, Inc., or CoreStates
Financial Corp;
(d) will maintain all books and records with respect to the Fund's
portfolio securities transactions and will furnish the Fund's Board of
Directors such periodic and special reports as the Board may request;
(e) will treat confidentially and as proprietary information of the Fund
all records and other information relative to the Fund and prior, present, or
potential shareholders, and will not use such records and information for any
purpose other than performance of its responsibilities and duties hereunder,
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
Investment Adviser 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;
(f) will provide to the Fund and the Fund's other service providers, at
such intervals as may be reasonably requested by the Fund, information relating
to (i) the performance of services by the Investment Adviser hereunder, and
(ii) market quotations of portfolio securities held by the Fund;
(g) will direct and use its best efforts to cause the broker or dealer
involved in any portfolio transaction with the Fund to send a written
confirmation of such transaction to the Fund's Custodian and Transfer Agent; and
(h) will not purchase shares of the Fund for itself or for accounts with
respect to which it is exercising sole investment discretion in connection with
such transactions.
4. Services Not Exclusive. The investment management services furnished
by the Investment Adviser hereunder are not to be deemed exclusive, and the
Investment Adviser shall be free to furnish similar services to others so long
as its services under this Agreement are not impaired thereby.
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5. Books and Records. In compliance with the requirements of Rule 3la-3
under the 1940 Act, the Investment Adviser hereby agrees that all records which
it maintains for the Fund are the property of the Fund and further agrees to
surrender promptly to the Fund any of such records upon the Fund's request. The
Investment Adviser further agrees to preserve for the periods prescribed by Rule
3la-2 under the 1940 Act the records required to be maintained by Rule 3la-1
under the 1940 Act.
6. Expenses. During the term of this Agreement, the Investment Adviser
will pay all expenses incurred by it in connection with its activities under
this Agreement (including the fees of the Sub-Adviser, if any) other than the
cost of securities (including brokerage commissions, if any) purchased for the
Fund and the cost of obtaining market quotations of portfolio securities held by
the Fund.
7. Compensation. For the services provided and the expenses assumed
pursuant to this Agreement, effective as of the date of this Agreement, the Fund
will pay the Investment Adviser and the Investment Adviser will accept as full
compensation therefor a fee, computed daily and paid monthly, at an annual rate
of .75% of the Portfolios' average daily net assets; provided, however, that if
the total expenses borne by the Fund in any fiscal year of the Fund exceed any
expense limitations imposed by applicable state securities laws or regulations,
the Investment Adviser will reimburse the Fund for a portion of such excess
equal to the amount of such excess times the ratio of the fees otherwise payable
to the Investment Adviser hereunder to the aggregate fees otherwise payable to
the Investment Adviser hereunder and Fairfield Group, Inc. pursuant to an
Administration Agreement between it and the Fund. The Investment Adviser's
obligation to reimburse the Fund hereunder is limited in any fiscal year of the
Fund to the amount of the Investment Adviser's fee hereunder for such fiscal
year; provided, however, that notwithstanding the foregoing, the Investment
Adviser shall reimburse the Fund for such excess regardless of the fees paid to
it to the extent that the securities laws or regulations of any state having
jurisdiction over the Fund so require. Any such expense reimbursements will be
estimated daily and reconciled and paid on a monthly basis.
8. Use of Investment Adviser's Name and Logo. The Fund agrees that it
shall furnish to the Investment Adviser, prior to any use or distribution
thereof, copies of all prospectuses, statements of additional information, proxy
statements, reports to shareholders, sales literature, advertisements, and other
material prepared for distribution to shareholders of the Fund or to the public,
which in any way refer to or describe the Investment Adviser or which include
any trade names, trademarks, or logos of the Investment Adviser or any affiliate
of the Investment Adviser. The Fund further agrees that it shall not use
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or distribute any such material if the Investment Adviser reasonably objects in
writing to such use or distribution within ten business days after the date such
material is furnished to the Investment Adviser. The provisions of this section
shall survive the termination of this Agreement.
9. Limitation of Liability. The Investment Adviser shall not be liable
for any error of judgment or mistake of law or for any loss suffered by the Fund
in connection with the performance of this Agreement, except a loss resulting
from a breach of fiduciary duty with respect to the receipt of compensation for
services or a loss resulting from willful misfeasance, bad faith, or gross
negligence on the part of the Investment Adviser in the performance of its
duties or from reckless disregard by it of its obligations and duties under this
Agreement.
10. Duration and Termination. This Agreement will become effective as of
the date first above written, provided that it shall have been approved by the
Fund's shareholders in accordance with the requirements under the 1940 Act, and,
unless sooner terminated as provided herein, shall continue in effect until June
23, 1991. Thereafter, if not terminated, this Agreement shall continue in effect
for successive periods of twelve months, each ending on June 23 each year,
provided such continuance is specifically approved at least annually (a) by the
vote of a majority of those members of the Fund's Board of Directors who are not
parties to this Agreement or interested persons of any party to this Agreement,
cast in person at a meeting called for the purpose of voting on such approval,
and (b) by the Fund's Board of Directors or by vote of a majority of the Fund's
outstanding voting securities. Notwithstanding the foregoing, this Agreement may
be terminated at any time on sixty days' written notice, without the payment of
any penalty, by the Fund (by vote of the Fund's Board of Directors or by vote of
a majority of the Fund's outstanding voting securities) or by the Investment
Adviser. This Agreement will immediately terminate in the event of its
assignment. (As used in this Agreement, the terms "majority of the outstanding
voting securities," "interested persons" and "assignment" shall have the same
meaning of such terms in the 1940 Act.)
11. Name Protection After Termination. In the event this Agreement is
terminated by either party or upon written notice from the Investment Adviser at
any time, the Fund hereby agrees that it will eliminate from its corporate name
any references to the name "CoreFunds." The Fund shall have the nonexclusive use
of the name "CoreFunds" in whole or in part so long as this Agreement is
effective or until such notice is given.
12. 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
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against which enforcement of the change, waiver, discharge or termination is
sought. No amendment of this Agreement shall be effective until approved by vote
of a majority of the Fund's outstanding voting securities.
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. 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 and shall be
governed by Pennsylvania law.
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.
COREFUNDS, INC.
By /s/ XXXXXXX X. XXXXXX
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Name:
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Title:
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CORESTATES INVESTMENT ADVISERS, INC.
By /s/ XXXX XXXXXXXX
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Name:
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Title:
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