INVESTMENT ADVISORY AGREEMENT
[SUB-ADVISER-VALUE EQUITY FUND]
AGREEMENT made as of December 5, 1989 between CORESTATES INVESTMENT
ADVISERS, INC., a Pennsylvania corporation (hereinafter the "Investment
Adviser"), and XXXXXXX, XXXXXXX AND ASSOCIATES (hereinafter the "Sub-Adviser").
WHEREAS, CoreFunds, Inc., a Maryland corporation (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 Investment Adviser is a party to an Investment Advisory
Agreement, dated as of December 5, 1989, with the Fund, pursuant to which the
Investment Adviser provides investment advisory services to the Fund and certain
of its portfolios; and
WHEREAS, the Investment Adviser wishes to have the Sub-Adviser act as
the sub-investment adviser and as such to provide the Investment Adviser with
investment advisory services, including investment management, investment
research and investment recommendations, and the Sub-Adviser is willing to
provide 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 Investment Adviser hereby appoints the Sub-Adviser
to act as sub-investment adviser to the Fund for the period and on the terms set
forth in this Agreement. The Sub-Adviser accepts such appointment and agrees to
furnish the services herein set forth for the compensation herein provided.
2. Delivery of Documents. The Fund or the Investment Adviser has
furnished the Sub-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 approvinq 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 or the Investment Adviser will furnish the Sub-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 and the Investment Adviser, the Sub-Adviser will provide a continuous
investment program for certain portfolios of the Fund, including investment
research and management with respect to all securities and investments and cash
equivalents held by the Value Equity Portfolio of the 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
Sub-Adviser will determine from time to time what securities and other
investments will be purchased, retained, or sold by the Fund. The Sub-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. The Sub-Adviser acknowledges and
agrees that the Fund shall have no responsibility to pay the Sub-Adviser, and
that any compensation to be paid to the Sub-Adviser shall be paid by the
Investment Adviser pursuant to Section 7 of this Agreement.
The Sub-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
Fund shares or make loans to the Fund;
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(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 Sub-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 Sub-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
Sub-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 Sub-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 Sub-Adviser hereunder are not to be deemed exclusive, and the Sub-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 Sub-Adviser
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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 Sub-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-l under the 1940 Act.
6. Expenses. During the term of this Agreement, the Sub-Adviser will pay
all expenses incurred by it in connection with its activities under this
Agreement 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
Investment Adviser will pay the Sub-Adviser and the Sub-Adviser will accept as
full compensation therefor a fee, computed daily and paid monthly, at an annual
rate of .50% of the Portfolios' average daily net assets. The Sub-Adviser may
from time to time and at its discretion voluntarily waive all or a portion of
its sub-advisory fees in order to assist the Fund in maintaining a competitive
expense ratio.
8. Limitation of Liability. The Sub-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 Sub-Adviser in the performance of its duties or
from reckless disregard by it of its obligations and duties under this
Agreement.
9. 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), by the
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Investment Adviser or by the Sub-Advisor. This Agreement wi11 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.)
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, waive,
discharge or termination is sought. No amendment of this Agreement shall be
effective until approved by vote of a majortiy of the Fund's outstanding voting
securities.
11. 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.
CORESTATES INVESTMENT ADVISERS, INC.
By: /s/ Xxxx Xxxxxxxx
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Name:
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Title:
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XXXXXXX, XXXXXXX AND ASSOCIATES
By: /s/ Xxxxxx Xxxxxxx
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Name:
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Title: Partner
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