FORM OF SUB-INVESTMENT ADVISORY AGREEMENT
COREFUNDS INTERNATIONAL GROWTH FUND
AGREEMENT made as of December 15, 1997 between CORESTATES INVESTMENT
ADVISERS, INC., a Pennsylvania corporation (hereinafter the "Investment
Adviser"), and ABERDEEN FUND MANAGERS, INC. a Delaware corporation (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 April 12, 1996 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 a
sub-investment adviser for a portion of the assets of the Fund's International
Growth Portfolio 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
a 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 affect 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 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 a portion of the assets of the International Growth Portfolio of the
Fund, as determined by the Investment Adviser, including investment research and
management with respect to that portion of securities and investments and cash
equivalents managed by the Sub-Adviser for the International Growth 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;
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 SEI
Investments Distribution Company, CoreStates Financial Corp, or any
affiliated person of either the Fund, SEI Investments Distribution
Company, 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 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-1 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 .375% of the portion of the Portfolio's average daily net assets allocated to
such Sub-Adviser. 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 July 1,
1999. Thereafter, if not terminated, this Agreement shall continue in effect for
successive periods of twelve months, each ending on July 1 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 anytime 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 Investment
Advisor or by the Sub-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.)
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, 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.
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: ______________________________________
Name: ____________________________________
Title: ___________________________________
ABERDEEN FUND MANAGERS, INC.
By: ______________________________________
Name: ____________________________________
Title: ___________________________________
