INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of April 12, 1996 between COREFUNDS, INC.,
a Maryland corporation (hereinafter the "Company"), and CORESTATES INVESTMENT
ADVISERS, INC., a Pennsylvania corporation (hereinafter the "Investment
Adviser").
WHEREAS, the Company is registered as an open-end,
diversified, management investment company under the Investment Company Act of
1940, as amended ("1940 Act"); and
WHEREAS, the Company is authorized to issue shares of Common
Stock in separate classes representing shares in separate portfolios of
securities and other assets; and
WHEREAS, the Company desires to retain the Investment Adviser
to furnish investment advisory services to the Company and 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 Company hereby appoints the Investment
Adviser to act as investment adviser to the portfolios of the Company 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 Company'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 Company's By-Laws and amendments thereto (such
ByLaws, as presently in effect and as they shall from time to time be amended,
are herein called the "By-Laws");
(c) resolutions of the Company's Board of Directors
authorizing the appointment of the Investment Adviser and approving this
Agreement;
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(d) the Company'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 Company'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 Company's most recent Prospectuses and Statement of
Additional Information (such Prospectuses and Statement of Additional
Information, as presently in effect and all amendments and supplements thereto,
are herein called the "Prospectuses").
The Company 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 Company's
Board of Directors, the Investment Adviser will provide a continuous investment
program for each portfolio of the Company, including investment guidelines and
management with respect to all securities and investments and cash equivalents
held by the existing portfolios and such other portfolios (hereinafter
collectively, the "Portfolios") offered by the Company and identified by the
Company as appropriate. The Investment Adviser will determine from time to time
what securities and other investments will be purchased, retained, or sold by
the Company. The Investment Adviser will provide the services under this
Agreement in accordance with the Company's investment objective, policies, and
restrictions as stated in the Prospectuses and resolutions of the Company's
Board of Directors.
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;
(b) will not make loans to any person to purchase or carry
the Company's shares or make loans to the Company;
(c) will place orders pursuant to its investment
determinations for the Company on behalf of its portfolios 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 Company. In
no instance
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will portfolio securities be purchased from or sold to CoreStates Financial Corp
or any affiliated person of either the Fund or CoreStates Financial Corp.
(d) will maintain all books and records with respect to the
Company's portfolio securities transactions and will furnish the Company's Board
of Directors such periodic and special reports as the Board may request;
(e) will treat confidentially and as proprietary
information of the Company all records and other information relative to the
Company 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 Company, 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 Company;
(f) will provide to the Company and the Company's other
service providers, at such intervals as may be reasonably requested by the
Company, information relating to (i) the performance of services by the
Investment Adviser hereunder, and (ii) market quotations of portfolio securities
held by the Company on behalf of its Portfolios;
(g) will direct and use its best efforts to cause the
broker or dealer involved in any portfolio transaction with the Company to send
a written confirmation of such transaction to the Company's Custodian and
Transfer Agent; and
(h) will not purchase shares of the Company 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.
5. Books and Records. In compliance with the requirements of
Rule 31a-3 under the 1940 Act, the Investment Adviser hereby agrees that all
records which it maintains for the Company are the property of the Company and
further agrees to surrender promptly to the Company any of such records upon the
Company's request. The Investment Adviser 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 Investment
Adviser will pay all expenses incurred by it in connection with its activities
under this Agreement other
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than the cost of securities (including brokerage commissions, if any) purchased
for the Company and the cost of obtaining market quotations of portfolio
securities held by the Company.
7. Compensation. For the services provided and the expenses
assumed pursuant to this Agreement, effective as of the date of this Agreement,
the Company will pay the Investment Adviser and the Investment Adviser will
accept as full compensation for services rendered to the Portfolios therefor,
the fees detailed in Appendix A attached to this Agreement; provided, however,
that if the total expenses borne by any Portfolio of the Company in any fiscal
year of the Company exceeds any expense limitations imposed by applicable state
securities laws or regulations, the Investment Adviser will reimburse the
Portfolio 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 SEI
Financial Management Corporation pursuant to an Administration Agreement between
it and the Company. The Investment Adviser's obligation to reimburse the Company
on behalf of its Portfolios hereunder is limited in any fiscal year of the
Company 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 Company 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 Company 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 Company
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 Portfolios of the Company 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
Company further agrees that it shall not use 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 Company 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.
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10. Duration and Termination. This Agreement will become
effective as of the date first above written, provided that it shall have been
approved by shareholders of the respective Portfolios of the Company in
accordance with the requirements under the 1940 Act, and, unless sooner
terminated as provided herein, shall continue in effect until April 15, 1998.
Thereafter, If not terminated, this Agreement shall continue in effect for
successive periods of twelve months, each ending on [June 30] each year,
provided such continuance is specifically approved at least annually (a) by the
vote of a majority of those members of the Portfolio'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 Portfolio's Board of Directors or by vote of a majority
of the Portfolio'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 Company (by vote of the Board of
Directors or by vote of a majority of the Portfolio'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 Company hereby agrees that it will eliminate
from its corporate name any references to the name "CoreFunds." The Company
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 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
Portfolio'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.
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COREFUNDS, INC.
/s/ Xxxxxxx X. Xxxxx
--------------------------------
Xxxxxxx X. Xxxxx
Vice President
CORESTATES INVESTMENT ADVISERS, INC.
/s/ Xxxx Xxxxxxxxxx
--------------------------------
Xxxx Xxxxxxxxxx
President
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APPENDIX A
Advisory Fee as a Percentage
Portfolio of average daily net assets
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Growth Equity Fund .75%
Equity Fund .74%
Special Equity Fund 1.50%
Equity Index Fund .40%
International Growth Fund .80%
Balanced Fund .70%
Short-Intermediate Bond Fund .50%
Bond Fund .74%
Short Term Income Fund .74%
Government Income Fund .50%
Intermediate Municipal Bond Fund .50%
Pennsylvania Municipal Bond Fund .50%
New Jersey Municipal Bond Fund .50%
Global Bond Fund .60%
Cash Reserve .40%
Treasury Reserve .40%
Tax-Free Reserve .40%
Fiduciary Reserve .50%
Fiduciary Treasury Reserve .20%
Fiduciary Tax-Free Reserve .20%
Elite Cash Reserve .20%
Elite Government Reserve .20%
Elite Treasury Reserve .20%
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