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As filed with the Securities and Exchange Commission on September 30, 1996
File No. 811-8858
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER
THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 5
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CORE TRUST (DELAWARE)
(Exact Name of Registrant as Specified in its Charter)
Two Portland Square, Portland, Maine 04101
(Address of Principal Executive Office)
Registrant's Telephone Number, including Area Code: 207-879-1900
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David I. Goldstein, Esq.
Forum Financial Services, Inc.
Two Portland Square
Portland, Maine 04101
(Name and Address of Agent for Service)
Copies to:
R. Darrell Mounts, Esq.
Kirkpatrick & Lockhart
South Lobby- 9th Floor
1800 M Street, N.W.
Washington, D.C. 20036-5891
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EXPLANATORY NOTE
This Registration Statement is being filed by Registrant pursuant to Section
8(b) of the Investment Company Act of 1940, as amended. Beneficial interests in
the series of Registrant are not being registered under the Securities Act of
1933, as amended, because such interests will be issued solely in private
placement transactions that do not involve any "public offering" within the
meaning of Section 4(2) of that act. Investments in Registrant's series may
only be made by certain institutional investors, whether organized within or
without the United States (excluding individuals, S corporations, partnerships,
and grantor trusts beneficially owned by any individuals, S corporations, or
partnerships). This Registration Statement does not constitute an offer to
sell, or the solicitation of an offer to buy, any beneficial interests in any
series of Registrant.
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CROSS REFERENCE SHEET
(AS REQUIRED BY RULE 404(c))
PART A
Private Placement Memorandum relating to beneficial interest in the Index
Portfolio, Small Company Portfolio, International Portfolio and International
Portfolio II of Core Trust (Delaware), a registered open-end management
investment company.
Form N-1A
Item No. (Caption) Location in Prospectus (Caption)
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Item 1. Cover Page Not applicable
Item 2. Synopsis Not applicable
Item 3. Condensed Financial
Information Not applicable
Item 4. General Description of
Registrant General Description of Registrant;
Investment Objectives, Investment Programs;
Other Investment Policies and Limitations
Item 5. Management of the Fund Management of the Portfolios
Item 5A. Management's Discussion
of Fund Performance Not Applicable
Item 6. Capital Stock and
Other Securities Capital Stock and Other Securities
Item 7. Purchase of Securities
Being Offered Purchase of Securities
Item 8. Redemption or Repurchase Redemption or Repurchase
Item 9. Pending Legal
Proceedings Pending Legal Proceedings
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CROSS REFERENCE SHEET
(AS REQUIRED BY RULE 404(c))
PART B
Statement of Additional Information relating to beneficial interest in the Index
Portfolio, Small Company Portfolio, International Portfolio and International
Portfolio II of Core Trust (Delaware), a registered open-end management
investment company.
Form N-1A Location in Statement of
Item No (Caption) Additional Information (Caption)
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Item 10. Cover Page Cover Page
Item 11. Table of Contents Cover Page
Item 12. General Information and
History Part A: Private Placement Memorandum
Item 13. Investment Objectives
and Policies Investment Objectives and Policies;
Investment Limitations
Item 14. Management of the Fund Management of the Trust
Item 15. Control Persons and
Principal Holders of
Securities Control Persons and Principal
Holders of Securities
Item 16. Investment Advisory and
Other Services Investment Advisory and Other Services
Item 17. Brokerage Allocation and
Other Practices Brokerage Allocation and Other Practices
Item 18. Capital Stock and Other
Securities Capital Stock and Other Securities
Item 19. Purchase, Redemption and
Pricing of Securities
Being Offered Purchase, Redemption and Pricing of
Securities Being Offered
Item 20. Tax Status Tax Status
Item 21. Underwriters Underwriters
Item 22. Calculation of
Performance Data Calculation of Performance Data
Item 23 Financial Statements Financial Statements
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PART A
CORE TRUST (DELAWARE)
INDEX PORTFOLIO
SMALL COMPANY PORTFOLIO
INTERNATIONAL PORTFOLIO
INTERNATIONAL PORTFOLIO II
Part A of this Registration Statement on Form N-1A, as amended through the date
hereof, relating to the Index Portfolio, Small Company Portfolio, International
Portfolio and International Portfolio II, of Core Trust (Delaware), consists of
the following Private Placement Memorandum. Responses to Items 1, 2, 3 and 5A
of Form N-1A have been omitted pursuant to paragraph 4 of Instruction F of the
General Instructions to Form N-1A.
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PART A
PRIVATE PLACEMENT MEMORANDUM
INDEX PORTFOLIO
SMALL COMPANY PORTFOLIO
INTERNATIONAL PORTFOLIO
INTERNATIONAL PORTFOLIO II
October 1, 1996
This Private Placement Memorandum relates to beneficial interests in the Index
Portfolio, Small Company Portfolio, International Portfolio and International
Portfolio II, (each a "Portfolio" and collectively the "Portfolios") of Core
Trust (Delaware) (the "Trust"), a registered, open-end management investment
company.
Investments in the Portfolios may only be made by certain institutional
investors, whether organized within or outside the United States (excluding
individuals, S corporations, partnerships, and grantor trusts beneficially owned
by any individuals, S corporations, or partnerships). An investor in a
Portfolio must also be an "accredited investor," as that term is defined under
Rule 501(a) of Regulation D under the Securities Act of 1933, as amended.
This Private Placement Memorandum does not constitute an offer to sell, or the
solicitation of an offer to buy, beneficial interests in the Portfolio. An
investor may subscribe for a beneficial interest in a Portfolio by contacting
Forum Financial Services, Inc., the Trust's placement agent (the "Placement
Agent"), at Two Portland Square, Portland, Maine 04101, (207) 879-1900, for a
complete subscription package, including a subscription agreement. The Trust
and the Placement Agent reserve the right to refuse to accept any subscription
for any reason.
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TABLE OF CONTENTS
Page
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General Description of Registrant. . . . . . . . . . . . . . 8
Management of the Portfolios . . . . . . . . . . . . . . . . 19
Capital Stock and Other Securities . . . . . . . . . . . . . 22
Purchase of Securities . . . . . . . . . . . . . . . . . . . 23
Redemption or Repurchase . . . . . . . . . . . . . . . . . . 25
Pending Legal Proceedings. . . . . . . . . . . . . . . . . . 25
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THE SECURITIES OF THE TRUST DESCRIBED IN THIS PRIVATE PLACEMENT MEMORANDUM HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ARE
SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED
OR RESOLD EXCEPT AS PERMITTED UNDER (1) THE TERMS OF THE TRUST INSTRUMENT OF THE
TRUST AND (2) THE SECURITIES ACT OF 1933, AS AMENDED, AND THE
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APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM.
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PART A
PRIVATE PLACEMENT MEMORANDUM
SMALL COMPANY PORTFOLIO
INTERNATIONAL PORTFOLIO
INTERNATIONAL PORTFOLIO II
INDEX PORTFOLIO
October 1, 1996
Responses to Items 1, 2, 3 and 5A have been omitted pursuant to paragraph 4 of
Instruction F of the General Instructions to Form N-1A.
GENERAL DESCRIPTION OF REGISTRANT (ITEM 4 OF FORM N-1A)
Core Trust (Delaware) (the "Trust") is a no-load, open-end management investment
company which was organized as a business trust under the laws of the State of
Delaware pursuant to a Trust Instrument dated September 1, 1994, as amended and
restated November 1, 1994.
Beneficial interests in the Trust are divided into eight separate diversified
subtrusts or "series," each having a distinct investment objective and distinct
investment policies. Four of these series -- Index Portfolio, Small Company
Portfolio, International Portfolio and International Portfolio II (each a
"Portfolio") -- commenced operations on November 10, 1994. The assets of each
Portfolio belong only to that Portfolio, and the assets belonging to a Portfolio
shall be charged with the liabilities of that Portfolio and all expenses, costs,
charges and reserves attributable to that Portfolio. The Trust is empowered to
establish, without investor approval, additional portfolios which may have
different investment objectives and policies.
Beneficial interests in the Portfolios are offered solely in private placement
transactions which do not involve any "public offering" within the meaning of
Section 4(2) of the Securities Act of 1933, as amended (the "1933 Act").
Investments in International Portfolio may only be made by certain institutional
investors, whether organized within or outside the United States (excluding
individuals, S corporations, partnerships, and grantor trusts beneficially owned
by any individuals, S corporations, or partnerships). Investments in Index
Portfolio, Small Company Portfolio and International Portfolio II may only be
made by open-end management investment companies or their separate series for
which Norwest Bank Minnesota, N.A. ("Norwest") (or any person controlled by,
controlling or under common control with Norwest) acts as investment adviser
(collectively, "Norwest Gateways"). This registration statement does not
constitute an offer to sell, or the solicitation of an offer to buy, any
"security" within the meaning of the 1933 Act.
Norwest Investment Management ("NIM"), a part of Norwest, serves as the
investment adviser of Index Portfolio and Small Company Portfolio. Schroder
Capital Management International Inc. ("Schroder") serves as the investment
adviser of International Portfolio and International Portfolio II.
INVESTMENT OBJECTIVES
Index Portfolio's investment objective is to duplicate the return of the
Standard & Poor's 500 Composite Stock Price Index.
Small Company Portfolio's investment objective is to provide long-term capital
appreciation by investing primarily in small and medium-sized U.S.-based
companies ("domestic companies") that are either growing rapidly or completing a
period of significant change.
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International Portfolio's and International Portfolio II's investment objective
is to provide long-term capital appreciation by investing directly or indirectly
in high quality companies based outside the United States ("foreign companies").
The investment objective of each Portfolio is fundamental and may not be changed
without investor approval. There can be no assurance that any Portfolio will
achieve its investment objective.
INVESTMENT PROGRAMS
To achieve its respective investment objective, each of Index Portfolio and
Small Company Portfolio invests primarily in common stocks and other equity
securities of domestic companies, and each of International Portfolio and
International Portfolio II invests primarily in common stocks and other equity
securities of foreign companies. Under normal circumstances, each Portfolio
will invest at least 65% of its net assets in equity securities. The domestic
securities in which a Portfolio invests are generally listed on a securities
exchange or included in the National Association of Securities Dealers Automated
Quotation ("NASDAQ") National Market System. In the case of smaller companies,
these securities may be traded in the over-the-counter securities market.
Additional investment techniques, features and restrictions concerning the
Portfolios' investment programs are described in Part B.
INDEX PORTFOLIO
Index Portfolio is designed to duplicate the return of the Standard & Poor's 500
Composite Stock Price Index with minimum tracking error, while also minimizing
transaction costs. Under normal circumstances, the Portfolio will hold stocks
representing 96% or more of the capitalization-weighted market values of the
Index. Portfolio transactions for the Portfolio generally are executed only to
duplicate the composition of the Index, to invest cash received from portfolio
security dividends or interestholder investments in the Portfolio, and to raise
cash to fund redemptions of beneficial interests. The Portfolio may hold cash
or cash equivalents for the purpose of facilitating payment of the Portfolio's
expenses or redemptions of beneficial interests. For these and other reasons,
the Portfolio's performance can be expected to approximate, but not be equal to,
that of the Index.
In addition, the Portfolio may utilize index futures contracts to a limited
extent. Index futures contracts are bilateral agreements whereby two parties
agree to take or make delivery of an amount of cash equal to a specified dollar
amount times the difference between the index value at the close of trading of
the contract and the price at which the futures contract is originally struck.
As no physical delivery of securities comprising the index is made, a purchaser
of index futures contracts may participate in the performance of the securities
contained in the index without the required capital commitment.
Index futures contracts may be used for several reasons: to simulate full
investment in the underlying index while retaining a cash balance for fund
management purposes, to facilitate trading or to reduce transactions costs. For
a description of futures contracts and their risks see "Appendix A: Investments,
Investment Strategies and Risk Considerations - Futures Contracts and Options."
The Index tracks the total return performance of 500 common stocks which are
chosen for inclusion by Standard & Poor's Corporation ("S&P") on a statistical
basis. The inclusion of a stock in the Index in no way implies that S&P
believes the stock to be an attractive investment. The 500 securities, most of
which trade on the New York Stock Exchange, represent approximately 70% of the
total market value of all U.S. common stocks. Each stock in the Index is
weighted by its market value. Because of the market-value weighing, the 50
largest companies in the Index currently account for approximately 47% of its
value. The Index emphasizes large-capitalizations and, typically, companies
included in the Index are the largest and most dominant firms in their
respective industries.
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The Portfolio is not sponsored, endorsed, sold or promoted by S&P, nor does S&P
make any representation or warranty, implied or express, to the purchasers of
the Portfolio or any member of the public regarding the advisability of
investing in index funds or the ability of the Index to track general stock
market performance. S&P does not guarantee the accuracy and/or the completeness
of the Index or any data included therein.
S&P makes no warranty, express or implied, as to the results to be obtained by
the Portfolio, owners of the Portfolio, any person or any entity from the use of
the Index or any data included therein. S&P makes no express or implied
warranties and expressly disclaims all such warranties of merchantability or
fitness for a particular purpose for use with respect to the Index or any data
included therein.
SMALL COMPANY PORTFOLIO
Small Company Portfolio invests primarily in the common stock of small and
medium size domestic companies (I.E., those whose market capitalizations are
less than $750 million at the time of the Portfolio's purchase). Companies of
this market capitalization level are well below that of the average company in
the Standard & Poor's 500 Composite Stock Price Index (the "Index"). Market
capitalization refers to the total market value of a company's outstanding
shares of common stock.
Under normal circumstances, the Portfolio will not invest more than 10% of its
total assets in the securities of a single issuer. The Portfolio does not
currently invest in preferred stock or securities convertible into common stock
but reserves the right to do so in the future.
In selecting securities for the Portfolio, NIM uses the Small Company Growth
investment style, Small Company Stock style and the Small Company Value style.
Assets are invested 1/3 in the Small Company Growth style, 1/3 in the Small
Company Stock style and 1/3 in the Small Company Value style. Prior to December
11, 1995 the Portfolio did not allocate any assets to the Small Company Value
style. The allocation of 1/3 of assets invested in the Portfolio to Small
Company Value style was completed in June 1996. The Portfolio may in the future
allocate its assets to additional investment styles.
In selecting securities in the SMALL COMPANY GROWTH STYLE, NIM seeks to identify
companies that are rapidly growing (usually with relatively short operating
histories) or that are emerging from a period of investor neglect by undergoing
a dramatic change. These changes may involve a sharp increase in earnings, the
hiring of new management or measures taken to close the gap between its share
price and takeover/asset value. NIM may invest up to 10% of assets in foreign
securities and in American Depository Receipts, European Depository Receipts and
other similar securities of foreign issuers. See "Investment Programs -
International Portfolio and International Portfolio II - Foreign Investment
Risks and Considerations." In investing in accordance with this investment
style, the Portfolio may not invest more than 10% of its total assets in the
securities of a single issuer. In addition, in investing in accordance with this
style, the Portfolio does not currently invest in preferred stock and securities
convertible into common stock but reserves the right to do so in the future.
In selecting securities in the SMALL COMPANY STOCK STYLE, NIM seeks securities
with significant price appreciation potential and attempts to identify companies
that show above average growth, as compared to long term overall market growth.
In investing assets allocated to this investment style, NIM may invest in
preferred stock and securities convertible into common stock and may invest up
to 20% of total assets allocated to this style in foreign securities and in
American Depository Receipts, European Depository Receipts and other similar
securities of foreign issuers.
In selecting securities in the SMALL COMPANY VALUE STYLE, NIM seeks securities
that are conservatively valued in the marketplace relative to their underlying
fundamentals. Value investing provides investors with a less aggressive way to
take advantage of growth opportunities of small companies. In investing in
accordance with this style, NIM will seek to invest in stocks priced low,
relative to the stock of comparable companies, determined by price/earnings
ratios, cash flows or other measures. Value investing therefore may reduce
downside risk while offering potential for capital appreciation as a stock gains
favor among other investors and its stock price rises.
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SMALL COMPANY INVESTMENT RISKS AND CONSIDERATIONS. Investments in smaller
companies generally involve greater risks than investments in larger companies
due to the small size of the issuer and the fact that the issuer may have
limited product lines, less access to financial markets and less management
depth. In addition, many of the securities of these firms trade less frequently
and in lower volumes than securities issued by larger firms. The result is that
the short-term volatility of those small company securities is greater than the
price volatility of the securities of larger, more established companies that
are widely held. The securities of small companies may also be more sensitive
to market changes generally than the securities of large companies.
The companies in which the Portfolio invests may be in a relatively early stage
of development or may produce goods and services which have favorable prospects
for growth due to increasing demand or developing markets. Frequently, such
companies have a small management group and single product or product line
expertise. These characteristics may result in an enhanced entrepreneurial
spirit and greater focus which may make such firms successful. NIM believes
that such companies may develop into significant business enterprises and that
an investment in such companies offers a greater opportunity for capital
appreciation than an investment in larger, more established entities. Small
companies frequently retain a large part of their earnings for research,
development and investment in capital assets, however, so that the prospects for
immediate dividend income are limited.
While securities issued by smaller capitalization companies historically have
experienced greater market appreciation than the securities of larger issuers,
there is no assurance that they will continue to do so or that the Portfolio
will be successful in identifying companies whose securities will appreciate.
INTERNATIONAL PORTFOLIO AND INTERNATIONAL PORTFOLIO II
International Portfolio and International Portfolio II are designed for
investors who desire to achieve international diversification of their
investments by participating in foreign securities markets. The Portfolios
should be considered only as a vehicle for international diversification and not
as a complete investment program.
International Portfolio and International Portfolio II will normally each invest
substantially all of its total assets in equity securities of foreign companies.
The Portfolios may also invest in the securities of closed-end investment
companies investing primarily in foreign securities and may invest in debt
obligations of foreign governments or their political subdivisions, agencies or
instrumentalities, of supranational organizations and of foreign corporations.
Investment will be diversified among securities of issuers in foreign countries
including, but not limited to, Japan, Germany, the United Kingdom, France, the
Netherlands, Hong Kong, Singapore and Australia. In general, the Portfolios
will invest only in securities of companies and governments in countries that
Schroder, in its judgment, considers both politically and economically stable.
The Portfolios have no limit on the amount of their foreign assets which may be
invested in any one type of foreign instrument or in any foreign country. To
the extent a Portfolio concentrates its assets in a foreign country, the
Portfolio will incur greater risks.
International Portfolio and International Portfolio II may purchase preferred
stock and convertible debt securities, including convertible stock, and may
purchase American Depository Receipts, European Depository Receipts or other
similar securities of foreign issuers. The Portfolios may also enter into
foreign exchange contracts, including forward contracts to purchase or sell
foreign currencies, in anticipation of its currency requirements and to protect
against possible adverse movements in foreign exchange rates. Although such
contracts may reduce the risk of loss to a Portfolio from adverse movements in
currency values, the contracts also limit possible gains from favorable
movements.
FOREIGN INVESTMENT RISKS AND CONSIDERATIONS. All investments, domestic and
foreign, involve certain risks. Investments in the securities of foreign
issuers may involve risks in addition to those normally associated with
investments in the securities of U.S. issuers. All foreign investments are
subject to risks of foreign political and economic instability, adverse
movements in foreign exchange rates, the imposition or tightening of exchange
controls or other limitations on repatriation of foreign capital, and changes in
foreign governmental attitudes towards private investment, possibly leading to
nationalization, increased taxation or confiscation of foreign investors'
assets.
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Moreover, dividends payable on foreign securities may be subject to foreign
withholding taxes, thereby reducing the income available for distribution to
International Portfolio's and International Portfolio II's investors; commission
rates payable on foreign transactions are generally higher than in the United
States; foreign accounting, auditing and financial reporting standards differ
from those in the United States and, accordingly, less information may be
available about foreign companies than is available about issuers of comparable
securities in the United States; and foreign securities may trade less
frequently and with lower volume and may exhibit greater price volatility than
United States securities.
Changes in foreign exchange rates will also affect the value in U.S. dollars of
all foreign currency-denominated securities held by the Portfolios. Exchange
rates are influenced generally by the forces of supply and demand in the foreign
currency markets and by numerous other political and economic events occurring
outside the United States, many of which may be difficult, if not impossible, to
predict.
Income from foreign securities will be received and realized in foreign
currencies, and each Portfolio is required to compute and distribute its income
in U.S. dollars. Accordingly, a decline in the value of a particular foreign
currency against the U.S. dollar occurring after a Portfolio's income has been
earned and computed in U.S. dollars may require the Portfolio to liquidate
portfolio securities to acquire sufficient U.S. dollars to make a distribution.
Similarly, if the exchange rate declines between the time a Portfolio incurs
expenses in U.S. dollars and the time such expenses are paid, the Portfolio may
be required to liquidate additional foreign securities to purchase the U.S.
dollars required to meet such expenses.
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OTHER INVESTMENT POLICIES AND LIMITATIONS
All investment policies and limitations of a Portfolio that are designated as
fundamental, and each Portfolio's investment objective, may not be changed
without approval of the holders of a majority of the outstanding voting
interests (defined in the same manner as the phrase "vote of a majority of the
outstanding voting securities" is defined in the Investment Company Act of 1940
("1940 Act")) of the Portfolio. All other investment policies and limitations
of the Portfolios are not fundamental and may be changed by the Trust's Board of
Trustees without investor approval.
The portfolio turnover rates for each of the Portfolios for the periods ending
May 31, 1996 and October 31, 1995, respectively, were as follows: Index Fund,
7.21% and 7.73%; Small Company Portfolio, 84.00% and 126.01%; International
Portfolio, 14.12% and 29.41%; and International Portfolio II, 17.58% and
28.19%. An annual portfolio turnover rate of 100% would occur if all of the
securities in a Portfolio were replaced once in a period of one year. Higher
portfolio turnover rates may result in increased brokerage costs to the
Portfolio and a possible increase in short-term capital gains (or losses).
Additional investment techniques, features and restrictions concerning the
Portfolios' investment programs are described in Part B.
INVESTMENT LIMITATIONS (ALL PORTFOLIOS)
The Portfolios have adopted the investment limitations listed below, each of
which is a nonfundamental policy except as noted. Other investment limitations,
including additional provisions with respect to the limitations listed below,
are described in Part B.
DIVERSIFICATION. Each Portfolio is a "diversified" portfolio as defined in the
1940 Act. As a fundamental policy, with respect to 75% of its assets, each
Portfolio may not purchase a security (other than a U.S. Government Security, as
defined below) if, as a result, (i) more than 5% of the Portfolio's total assets
would be invested in the securities of a single issuer or (ii) the Portfolio
would own more than 10% of the outstanding voting securities of any single
issuer.
CONCENTRATION. Each Portfolio is prohibited from concentrating its assets in
the securities of issuers in any industry. As a fundamental policy, each
Portfolio may not purchase securities if, immediately after the purchase, more
than 25% of the value of the Portfolio's total assets would be invested in the
securities of issuers conducting their principal business activities in the same
industry. This limit does not apply to investments in U.S. Government
Securities, repurchase agreements covering U.S. Government Securities or
investment company securities.
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MARGIN AND SHORT SALES. No Portfolio may purchase securities on margin or make
short sales of securities, except short sales against the box. These
prohibitions do not restrict the Portfolios' ability to use short-term credits
necessary for the clearance of portfolio transactions and to make margin
deposits in connection with permitted transactions in options and futures
contracts.
COMMON STOCK AND PREFERRED STOCK
Each Portfolio may invest in common and preferred stock. Common stockholders
are the owners of the company issuing the stock and, accordingly, vote on
various corporate governance matters such as mergers. They are not creditors of
the company, but rather, upon liquidation of the company, are entitled to their
pro rata share of the company's assets after creditors (including fixed income
security holders) and, if applicable, preferred stockholders are paid.
Preferred stock is a class of stock having a preference over common stock as to
dividends and, in the alternative, as to the recovery of investment. A
preferred stockholder is a shareholder in the company and not a creditor of the
company as is a holder of the company's fixed income securities. Dividends paid
to common and preferred stockholders are distributions of the earnings of the
company and not interest payments, which are expenses of the company. Equity
securities owned by a Portfolio may be traded in the over-the-counter market or
on a regional securities exchange and may not be traded every day or in the
volume typical of securities traded on a national securities exchange. As a
result, disposition by a Portfolio of a portfolio security to meet redemptions
by interestholders or otherwise may require the Portfolio to sell these
securities at a discount from market prices, to sell during periods when
disposition is not desirable, or to make many small sales over a lengthy period
of time. The market value of all securities, including equity securities, is
based upon the market's perception of value and not necessarily the book value
of an issuer or other objective measure of a company's worth.
CONVERTIBLE SECURITIES
Each Portfolio may invest in convertible securities, including convertible debt
and convertible preferred stock, which are fixed income securities which may be
converted at a stated price within a specific amount of time into a specified
number of shares of common stock. These securities are usually senior to common
stock in a corporation's capital structure but usually are subordinated to
non-convertible debt securities. In general, the value of a convertible
security is the higher of its investment value (its value as a fixed income
security) and its conversion value (the value of the underlying shares of common
stock if the security is converted). As a fixed income security, the value of a
convertible security generally increases when interest rates decline and
generally decreases when interest rates rise. The value of a convertible
security is, however, also influenced by the value of the underlying common
stock. The Portfolios may only invest in investment grade convertible debt.
WARRANTS
Each Portfolio may invest in warrants, which are options to purchase an equity
security at a specified price (usually representing a premium over the
applicable market value of the underlying equity security at the time of the
warrant's issuance) and usually during a specified period of time. Unlike
convertible securities and preferred stocks, warrants do not pay a fixed
dividend. Investments in warrants involve certain risks, including the possible
lack of a liquid market for the resale of the warrants, potential price
fluctuations as a result of speculation or other factors and failure of the
price of the underlying security to reach a level at which the warrant can be
prudently exercised (in which case the warrant may expire without being
exercised, resulting in the loss of the Portfolio's entire investment therein).
AMERICAN DEPOSITORY RECEIPTS; EUROPEAN DEPOSITORY RECEIPTS
Small Company Portfolio, International Portfolio and International Portfolio II
may each invest in sponsored and unsponsored American Depository Receipts
("ADRs"), which are receipts issued by an American bank or trust company
evidencing ownership of underlying securities issued by a foreign issuer. ADRs,
in registered form, are designed for use in U.S. securities markets.
Unsponsored ADRs may be created without the
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participation of the foreign issuer. Holders of these ADRs generally bear all
the costs of the ADR facility, whereas foreign issuers typically bear certain
costs in a sponsored ADR. The bank or trust company depository of an
unsponsored ADR may be under no obligation to distribute shareholder
communications received from the foreign issuer or to pass through voting
rights. Small Company Portfolio, International Portfolio and International
Portfolio II may also invest in European Depository Receipts ("EDRs"), receipts
issued by a European financial institution evidencing an arrangement similar to
that of ADRs, and in other similar instruments representing securities of
foreign companies. EDRs, in bearer form, are designed for use in European
securities markets.
FOREIGN EXCHANGE CONTRACTS
Changes in foreign currency exchange rates will affect the U.S. dollar values of
securities denominated in currencies other than the U.S. dollar. The rate of
exchange between the U.S. dollar and other currencies fluctuates in response to
forces of supply and demand in the foreign exchange markets. These forces are
affected by the international balance of payments and other economic and
financial conditions, government intervention, speculation and other factors.
When investing in foreign securities a Portfolio usually effects currency
exchange transactions on a spot (i.e., cash) basis at the spot rate prevailing
in the foreign exchange market. A Portfolio incurs foreign exchange expenses in
converting assets from one currency to another.
International Portfolio and International Portfolio II may each enter into
foreign currency forward contracts or currency futures or options contracts for
the purchase or sale of foreign currency to "lock in" the U.S. dollar price of
the securities denominated in a foreign currency or the U.S. dollar value of
interest and dividends to be paid on such securities, or to hedge against the
possibility that the currency of a foreign country in which a Portfolio has
investments may suffer a decline against the U.S. dollar. A forward currency
contract is an obligation to purchase or sell a specific currency at a future
date, which may be any fixed number of days from the date of the contract agreed
upon by the parties, at a price set at the time of the contract. This method of
attempting to hedge the value of a Portfolio's portfolio securities against a
decline in the value of a currency does not eliminate fluctuations in the
underlying prices of the securities. Although the strategy of engaging in
foreign currency transactions could reduce the risk of loss due to a decline in
the value of the hedged currency, it could also limit the potential gain from an
increase in the value of the currency. The Portfolios do not intend to maintain
a net exposure to such contracts where the fulfillment of the Portfolios'
obligations under such contracts would obligate the Portfolio to deliver an
amount of foreign currency in excess of the value of the Portfolios' portfolio
securities or other assets denominated in the currency. A Portfolio will not
enter into these contracts for speculative purposes and will not enter into non-
hedging currency contracts. These contracts involve a risk of loss if Schroder
fails to predict currency values correctly. The Portfolios have no present
intention to enter into currency futures or options contracts but may do so in
the future.
ILLIQUID SECURITIES
Each Portfolio may invest up to 15% of its net assets in illiquid securities.
The term "illiquid securities" for this purpose means securities that cannot be
disposed of within seven days in the ordinary course of business at
approximately the amount at which the Portfolio has valued the securities and
includes, among other things, repurchase agreements maturing in more than seven
days and restricted securities other than those the Portfolio's adviser has
determined to be liquid pursuant to guidelines established by the Trust's Board
of Trustees. Limitations on resale may have an adverse effect on the
marketability of portfolio securities, and the Portfolios might also have to
register restricted securities in order to dispose of them, resulting in expense
and delay. A Portfolio might not be able to dispose of restricted or other
securities promptly or at reasonable prices and might thereby experience
difficulty satisfying redemptions. There can be no assurance that a liquid
market will exist for any security at any particular time.
An institutional market has developed for certain securities that are not
registered under the 1933 Act, including repurchase agreements, commercial
paper, foreign securities and corporate bonds and notes. Institutional
investors depend on an efficient institutional market in which the unregistered
security can be readily resold or on the issuer's ability to honor a demand for
repayment of the unregistered security. A security's contractual or legal
restrictions on resale to the general public or to certain institutions may not
be indicative of the liquidity of the security. If such securities are eligible
for purchase by institutional buyers in accordance with Rule 144A under the 1933
Act, the Portfolio's investment adviser may determine that such securities are
not illiquid securities under guidelines adopted by
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the Board. These guidelines take into account trading activity in the
securities and the availability of reliable pricing information, among other
factors. If there is a lack of trading interest in a particular Rule 144A
security, a Portfolio's holdings of that security may be illiquid.
BORROWING AND LEVERAGING
As a fundamental policy, each Portfolio may borrow money from a bank for
temporary or emergency purposes, including the meeting of redemption requests,
in amounts up to 33 1/3% of the Portfolio's total assets. Borrowing involves
special risk considerations. Interest costs on borrowings may fluctuate with
changing market rates of interest and may partially offset or exceed the return
earned on borrowed funds (or on the assets that were retained rather than sold
to meet the needs for which funds were borrowed). Under adverse market
conditions, a Portfolio might have to sell portfolio securities to meet interest
or principal payments at a time when investment considerations would not favor
such sales. No Portfolio may purchase securities for investment while any
borrowing equal to 5% or more of the Portfolio's total assets is outstanding or
borrow for purposes other than meeting redemptions in an amount exceeding 5% of
the value of the Portfolio's total assets. A Portfolio's use of borrowed
proceeds to make investments would subject the Portfolio to the risks of
leveraging.
SECURITIES LENDING
Each Portfolio may from time to time lend securities from its portfolio to
brokers, dealers and other financial institutions. Securities loans must be
continuously secured by cash or U.S. Government Securities with a market value,
determined daily, at least equal to the value of a Portfolio's securities
loaned, including accrued interest. A Portfolio receives interest in respect of
securities loans from the borrower or from investing cash collateral. A
Portfolio may pay fees to arrange the loans. No Portfolio will lend portfolio
securities in excess of 33 1/3% of the value of the Portfolio's total assets.
U.S. GOVERNMENT SECURITIES
Each Portfolio may invest in U.S. Government Securities. As used in Part A, the
term U.S Government Securities means obligations issued or guaranteed as to
principal and interest by the U.S. Government, its agencies or
instrumentalities. The U.S. Government Securities in which a Portfolio may
invest include U.S. Treasury securities and obligations issued or guaranteed by
U.S. Government agencies and instrumentalities and backed by the full faith and
credit of the U.S. Government, such as those guaranteed by the Small Business
Administration or issued by the Government National Mortgage Association. In
addition, the U.S. Government Securities in which the Portfolios may invest
include securities supported primarily or solely by the creditworthiness of the
issuer, such as securities of the Federal National Mortgage Association, the
Federal Home Loan Mortgage Corporation and the Tennessee Valley Authority.
There is no guarantee that the U.S. Government will support securities not
backed by its full faith and credit. Accordingly, although these securities have
historically involved little risk of loss of principal if held to maturity, they
may involve more risk than securities backed by the U.S. Government's full faith
and credit.
REPURCHASE AGREEMENTS
Each Portfolio may from time to time enter into repurchase agreements,
transactions in which the Portfolio purchases a security and simultaneously
commits to resell that security to the seller at an agreed-upon price on an
agreed-upon future date, normally one to seven days later. The resale price of
a repurchase agreement reflects a market rate of interest that is not related to
the coupon rate or maturity of the purchased security. The Portfolio's
custodian maintains possession of the collateral underlying a repurchase
agreement, which has a market value, determined daily, at least equal to the
repurchase price, and which consists of the types of securities in which a
Portfolio may invest directly. International Portfolio and International
Portfolio II may enter into repurchase agreements with foreign entities.
COMMERCIAL PAPER
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Each Portfolio may invest in commercial paper. Commercial paper (short-term
promissory notes) is issued by companies to finance their or their affiliates'
current obligations.
TEMPORARY DEFENSIVE POSITION
When business or financial conditions warrant, each Portfolio may assume a
temporary defensive position and invest all or any portion of its assets in cash
or in cash equivalents, including (i) short-term U.S. Government Securities,
(ii) prime quality short-term instruments of commercial banks, (iii) prime
quality commercial paper, (iv) repurchase agreements with banks and broker-
dealers covering any of the securities in which the Portfolio may invest
directly and (v) to the extent permitted by the 1940 Act, shares of money market
mutual funds. During periods when and to the extent that a Portfolio has
assumed a temporary defensive position, it may not be pursuing its investment
objective. International Portfolio and International Portfolio II may hold cash
and bank instruments denominated in any major foreign currency.
MANAGEMENT OF THE PORTFOLIOS (ITEM 5 OF FORM N-1A)
TRUSTEES AND OFFICERS
The business of the Trust is managed under the direction of the Board of
Trustees. Forum Financial Services, Inc. ("Forum") provides persons
satisfactory to the Board to serve as officers of the Trust. Part B contains
general background information about each Trustee and officer of the Trust.
INVESTMENT ADVISERS
NIM serves as investment adviser of Small Company Portfolio and Index Portfolio
pursuant to investment advisory agreements between Norwest and the Trust.
Norwest is a subsidiary of Norwest Corporation, a multi-bank holding company
with operations in 15 states and $50.3 billion in total assets incorporated
under the laws of Delaware in 1929. As of June 30, 1996, Norwest Corporation was
the 12th largest bank holding company in the United States in terms of assets.
Norwest became a subsidiary of Norwest Corporation in 1929 and, as of December
31, 1995, NIM managed or provided investment advice with respect to assets
totaling approximately $22 billion.
Schroder acts as investment adviser to the International Portfolio and
International Portfolio II pursuant to advisory agreements with the Trust.
Schroder, whose principal business address is 787 Seventh Avenue, New York, New
York 10019, is a wholly owned U.S. subsidiary of Schroders Incorporated, the
wholly owned U.S. holding company subsidiary of Schroders plc. Schroders plc is
the holding company parent of a large worldwide group of banks and financial
services companies (referred to as the "Schroder Group"), with associated
companies and branch and representative offices located in 18 countries
worldwide. The Schroder Group specializes in providing investment management
services and had assets under management in excess of $100 billion as of October
1, 1996.
NIM and Schroder are required to furnish at their expense all services,
facilities and personnel necessary in connection with managing their respective
Portfolio's investments and effecting portfolio transactions for those
Portfolios. The full advisory staff of each of NIM and Schroder contribute to
the investment advisory services provided to the Portfolios. The following
persons are primarily responsible for the day to day management of the
Portfolios' investment portfolios and have been since inception of the
Portfolios:
INDEX PORTFOLIO -David D. Sylvester and Laurie R. White. Mr. Sylvester has
been associated with Norwest for 15 years, the last 7 years as a Vice
President and Senior Portfolio Manager. He has over 20 years' experience in
managing securities portfolios. Ms. White has been a Vice President and
Senior Portfolio Manger of Norwest since 1991; from 1989 to 1991, she was a
Portfolio Manager at Richfield Bank and Trust. Mr. Sylvester and Ms. White
have served as portfolio managers of the Portfolio since January 1996.
SMALL COMPANY PORTFOLIO - Robert B. Mersky, Kirk McCown and Thomas H.
Forester. Mr. Mersky, Senior Portfolio Manager and an Officer of Norwest
and President of Peregrine Capital Management Inc., has held various
investment management positions with Norwest or its affiliates, including
Peregrine, since
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1977. From 1980 to 1984 he was head of investments for Norwest. Mr.
McCown is founder, President and a Director of Crestone Capital Management,
Inc., an investment adviser subsidiary of Norwest. Prior thereto, Mr.
McCown was Senior Vice President of Reich & Tang, L.P. Mr. Forester is an
officer of Norwest and Senior Vice President of Peregrine Capital
Management, Inc. Mr. Forester joined Peregrine in 1995. From 1992 to 1995
he was Vice President of Lord Asset Management, an investment adviser. Mr.
McCown commenced serving as a portfolio manager of the Portfolio in June
1995. Mr. Forester commenced serving as a portfolio manager of the
Portfolio in December 1995.
INTERNATIONAL PORTFOLIO AND INTERNATIONAL PORTFOLIO II - Laura Luckyn-
Malone, a Managing Director of Schroder since October 1995 and a Senior
Vice President and Director of Schroder since 1990, is primarily
responsible for managing the day-to-day operations of International
Portfolio and International Portfolio II. Prior to joining the Schroder
Group, Ms. Luckyn-Malone was a Principal of Scudder, Stevens & Clark, Inc.
Ms. Luckyn-Malone has served as portfolio manager of the Portfolios since
February 1995.
The investment advisory agreement for Small Company Portfolio and Index
Portfolio provides for advisory fees payable to Norwest of 0.90% and 0.15% of
the applicable Portfolio's average annual daily net assets.
The investment advisory agreement for International Portfolio and International
Portfolio II provides for an advisory fee payable to Schroder of 0.45% of each
Portfolio's average annual daily net assets.
NIM and Schroder place orders for the purchase and sale of assets they manage
with brokers and dealers selected by and in the discretion of the respective
adviser. NIM and Schroder seek "best execution" for all portfolio transactions,
but a Portfolio may pay higher than the lowest available commission rates when
an adviser believes it is reasonable to do so in light of the value of the
brokerage and research services provided by the broker effecting the
transaction.
Commission rates for brokerage transactions are fixed on many foreign securities
exchanges, and this may cause higher brokerage expenses to accrue to
International Portfolio and International Portfolio II than would be the case
for comparable transactions effected on U. S. securities exchanges.
Subject to a Portfolio's policy of obtaining the best price consistent with
quality of execution of transactions, NIM and Schroder, may employ Norwest
Investment Services, Inc., Schroder Securities Limited and other broker-dealer
affiliates of NIM or Schroder (collectively "Affiliated Brokers") to effect
brokerage transactions for the Portfolio. A Portfolio's payment of commissions
to Affiliated Brokers is subject to procedures adopted by the Board to provide
that the commissions will not exceed the usual and customary broker's
commissions charged by unaffiliated brokers. No specific portion of a
Portfolio's brokerage will be directed to Affiliated Brokers, and in no event
will a broker affiliated with an adviser directing the transaction receive
brokerage transactions in recognition of research services provided to the
adviser.
CUSTODIAN
Norwest serves as the custodian for Index Portfolio and Small Company
Portfolio and may appoint certain subcustodians to custody Small Company
Portfolio's foreign securities and other assets held in foreign countries.
Norwest receives no compensation for its custodial services. The Chase
Manhattan Bank, N.A. ("Chase") serves as the custodian for International
Portfolio and International Portfolio II and employs foreign subcustodians to
maintain those Portfolios' foreign assets outside the United States. For its
custodial services, Chase is compensated at an annual rate of 0.075% of each
of International Portfolio's and International Portfolio II's average daily
net assets.
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ADMINISTRATOR, TRANSFER AGENT AND FUND ACCOUNTANT
Forum supervises the overall management of the Trust, including the Trust's
receipt of services for which the Trust is obligated to pay, and provides the
Trust with general office facilities pursuant to an Administration Agreement
with the Trust. As of October 1, 1996, Forum acted as manager and distributor
of registered investment companies with assets of approximately $16.0 billion.
Forum, whose principal business address is Two Portland Square, Portland, Maine
04101, is a registered broker-dealer and investment adviser and is a member of
the National Association of Securities Dealers, Inc.
For its administrative services and facilities, Forum receives a fee at an
annual rate of 0.10% of the average daily net assets of each of Small Company
Portfolio, Index Portfolio and International Portfolio II. For International
Portfolio, Forum receives a fee at the annual rate of 0.15% of the Portfolio's
average daily net assets. Forum's fees are accrued daily and paid monthly.
Forum Financial Corp. ("FFC"), Two Portland Square, Portland, Maine 04101, is
the Trust's transfer agent and fund accountant. FFC is an affiliate of Forum.
For its transfer agent services, FFC receives a fee of $12,000 per year for each
Portfolio. For fund accounting services, FFC receives a base fee of $36,000 per
year ($60,000 in the case of International Portfolio and International Portfolio
II) plus additional amounts depending on the assets of the Portfolio, the number
and type of securities held by the Portfolio and the portfolio turnover rate of
the Portfolio.
EXPENSES
Each Portfolio is obligated to pay for all of its expenses. These expenses
include: governmental fees; interest charges; taxes; brokerage fees and
commissions; insurance premiums; investment advisory, custodial,
administrative and transfer agency and fund accounting fees, as described
above; compensation of certain of the Trust's Trustees; costs of membership
trade associations; fees and expenses of independent auditors and legal
counsel to the Trust; and expenses of calculating the net asset value of and
the net income of the Portfolios. Each Portfolio's expenses comprise Trust
expenses attributable to the Portfolio, which are allocated to the Portfolio,
and expenses not attributable to the Portfolio, which are allocated among the
Portfolios in proportion to their average net assets or as otherwise
determined by the Board.
The Trust was granted an exemptive order by the Securities and Exchange
Commission ("Commission"), which allowed each Norwest Gateway to invest less
than all of its assets, but more than the statutorily permitted limits, in
Index Portfolio, Small Company Portfolio and International Portfolio II (for
these purposes, the "Norwest Cores"). The original exemptive order was
amended effective August 6, 1996, to permit any series of Norwest Advantage
Funds, a registered open-end investment company for which NIM acts as
investment adviser or Schroder acts as investment subadviser, to invest all or
a portion of its assets in a Core Trust portfolio, irrespective of investment
style. Currently, Diversified Equity Fund, Growth Equity Fund, Conservative
Balanced Fund, Moderate Balanced Fund and Growth Balanced Fund, each a series
of Norwest Advantage Funds, invest a portion of their assets in the Norwest
Cores.
Norwest is required to waive its investment advisory fee for serving as
investment adviser to Small Company Portfolio and Index Portfolio and will
reimburse International Portfolio II for all investment advisory fees
International Portfolio II pays to Schroder. In addition, Forum is required to
waive the amount of any fee that it would otherwise be entitled to receive from
each Norwest Gateway for that portion of the assets of the Norwest Gateway
invested in a Norwest Core.
These provisions are different than the structure employed by International
Portfolio wherein no registered open-end investment company or separate series
thereof that invests in International Portfolio incurs investment advisory fees
other than that which it incurs indirectly by investing in International
Portfolio.
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CAPITAL STOCK AND OTHER SECURITIES (ITEM 6 OF FORM N-1A)
The Trust was organized as a business trust under the laws of the State of
Delaware. Under the Trust Instrument, the Trustees are authorized to issue
beneficial interests in separate subtrusts or "series" of the Trust. The Trust
currently has eight series, the Portfolios, Cash Portfolio, Government Cash
Portfolio, Treasury Cash Portfolio and Treasury Portfolio; the Trust reserves
the right to create and issue additional series.
Each investor in a Portfolio is entitled to participate equally in the
Portfolio's earnings and assets and to a vote in proportion to the amount of its
investment in the Portfolio. Investments in a Portfolio may not be transferred,
but an investor may withdraw all or any portion of its investment at any time at
net asset value ("NAV").
Investments in a Portfolio have no preemptive or conversion rights and are fully
paid and non-assessable, except as set forth below. The Trust is not required
and has no current intention to hold annual meetings of investors, but the Trust
will hold special meetings of investors when in the Trustees' judgment it is
necessary or desirable to submit matters to an investor vote. Generally,
interests will be voted in the aggregate without reference to a particular
Portfolio, except if the matter affects only one Portfolio or Portfolio voting
is required, in which case interests will be voted separately by Portfolio.
Investors have the right to remove one or more Trustees without a meeting by a
declaration in writing by a specified number of investors. Upon liquidation of
a Portfolio, investors will be entitled to share pro rata in the Portfolio's net
assets available for distribution to investors.
A Portfolio's net income consists of (1) all dividends, accrued interest
(including earned discount, both original issue and market discount), and other
income, including any net realized gains on the Portfolio's assets, less (2) all
actual and accrued expenses of the Portfolio, amortization of any premium, and
net realized losses on the Portfolio's assets, all as determined in accordance
with generally accepted accounting principles. All of a Portfolio's net income
is allocated pro rata among the investors in the Portfolio. A Portfolio's net
income generally is not distributed to the investors in the Portfolio, except as
determined by the Trustees from time to time, but instead is included in the NAV
of the investors' respective beneficial interests in the Portfolio.
Under the Portfolios' method of operations, they are not be subject to any
income tax. However, each investor in a Portfolio will be taxable on its
proportionate share (as determined in accordance with the Trust's Trust
Instrument and the Internal Revenue Code of 1986, as amended (the "Code"), and
the regulations promulgated thereunder) of the Portfolio's ordinary income and
capital gain. It is intended that each Portfolio's assets and income will be
managed in such a way that an investor in the Portfolio will be able to
satisfy the requirements of Subchapter M of the Code, assuming that the
investor invested all of its assets in the Portfolio.
Investor inquiries may be directed to Forum Financial Services, Inc.
PURCHASE OF SECURITIES (ITEM 7 OF FORM N-1A)
Beneficial interests in the Portfolios are issued solely in private placement
transactions that do not involve any "public offering" within the meaning of
Section 4(2) of the 1933 Act. See "General Description of Registrant" above.
All investments in the Portfolios are made without a sales load, at the NAV next
determined after an order is received by the Portfolio.
The NAV of each Portfolio is determined as of 4:00 P.M., Eastern Time
("Valuation Time"), on all weekdays, except New Year's Day, Martin Luther King,
Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Columbus Day, Veterans' Day, Thanksgiving Day and Christmas Day ("Business
Day").
Each investor in a Portfolio may add to or reduce its investment in the
Portfolio. At the Valuation Time on each Business Day, the value of each
investor's beneficial interest in a Portfolio will be determined by multiplying
the Portfolio's NAV by the percentage, effective for that day, that represents
that investor's share of the aggregate beneficial interests in the Portfolio.
Any additions to or withdrawals of those interests which are to be effected on
that day will then be effected. Each investor's share of the aggregate
beneficial interests in the Portfolio then will be recomputed using the
percentage equal to the fraction (1) the numerator of which is the value of the
investor's investment in the Portfolio as of the Valuation Time on that day plus
or minus, as the case may be, the amount of any
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additions to or withdrawals from such investment effected on that day and
(2) the denominator of which is the Portfolio's aggregate NAV as of the
Valuation Time on that day plus or minus, as the case may be, the amount of the
net additions to or withdrawals from the aggregate investments in the Portfolio
by all investors. The percentages so determined then will be applied to
determine the value of each investor's respective interest in the Portfolio as
of the Valuation Time on the following Business Day.
Securities owned by a Portfolio for which market quotations are readily
available are valued at current market value or, in their absence, at fair value
as determined by the Board.
Trading in securities on European, Far Eastern and other international
securities exchanges and over-the-counter markets is normally completed well
before the close of business of each Business Day. In addition, trading in
foreign securities generally or in a particular country or countries may not
take place on all Business Days or may take place on days other than Business
Days. Trading does take place in various foreign markets, however, on days on
which the Portfolio's NAV is not calculated. Calculation of the NAV per
beneficial interest may not occur contemporaneously with the determination of
the prices of the foreign securities used in the calculation. Events affecting
the values of foreign securities that occur after the time their prices are
determined and before a Portfolio's determination of NAV will not be reflected
in the Portfolio's calculation of NAV unless NIM or Schroder determines that the
particular event would materially affect NAV, in which case an adjustment would
be made.
All assets and liabilities of a Portfolio denominated in foreign currencies are
converted into U.S. dollars at the mean of the bid and asked prices of such
currencies against the U.S. dollar last quoted by a major bank prior to the time
of conversion.
There is no minimum initial or subsequent investment in a Portfolio. However,
since each Portfolio intends to be as fully invested at all times as is
reasonably practicable in order to enhance the return on its assets, investments
must be made in federal funds (i.e., monies credited to the account of the
Trust's custodian by a Federal Reserve Bank).
The Trust reserves the right to cease accepting investments in a Portfolio at
any time or to reject any investment order.
The exclusive placement agent for the Trust is Forum. The principal business
address of Forum is Two Portland Square, Portland, Maine 04101. Forum receives
no compensation for serving as the exclusive placement agent for the Trust.
REDEMPTION OR REPURCHASE (ITEM 8 OF FORM N-1A)
An investor in a Portfolio may withdraw all or any portion of its investment in
the Portfolio at the NAV next determined after a withdrawal request in proper
form is furnished by the investor to the Trust. The proceeds of a withdrawal
will be paid by the Portfolio in federal funds normally on the business day
after the withdrawal is effected, but in any event within seven days.
Investments in a Portfolio may not be transferred. The right of redemption may
not be suspended nor the payment dates postponed for more than seven days except
when the New York Stock Exchange is closed (or when trading thereon is
restricted) for any reason other than its customary weekend or holiday closings
or under any emergency or other circumstances as determined by the Commission.
Redemptions from a Portfolio may be made wholly or partially in portfolio
securities if the Board determines that payment in cash would be detrimental to
the best interests of the Portfolio. The Trust has filed an election with the
Commission pursuant to which each Portfolio will only consider effecting a
redemption in portfolio securities if the particular interestholder is redeeming
more than $250,000 or 1% of the Portfolio's NAV , whichever is less, during any
90-day period.
PENDING LEGAL PROCEEDINGS (ITEM 9 OF FORM N-1A)
Not applicable.
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PART B
CORE TRUST (DELAWARE)
INDEX PORTFOLIO
SMALL COMPANY PORTFOLIO
INTERNATIONAL PORTFOLIO
INTERNATIONAL PORTFOLIO II
Part B of this Registration Statement on Form N-1A, as amended through the date
hereof, relating to the Small Company Portfolio, International Portfolio,
International Portfolio II, and Index Portfolio of Core Trust (Delaware),
consists of the following Statement of Additional Information.
<PAGE>
PART B
STATEMENT OF ADDITIONAL INFORMATION
INDEX PORTFOLIO
SMALL COMPANY PORTFOLIO
INTERNATIONAL PORTFOLIO
INTERNATIONAL PORTFOLIO II
October 1, 1996
This Statement of Additional Information ("SAI") relates to beneficial interests
in the Index Portfolio, Small Company Portfolio, International Portfolio and
International Portfolio II (each a "Portfolioi" and collectively, the
"Portfolios") of Core Trust (Delaware) (the "Trust"), a registered, open-end
management investment company, and supplements the Private Placement Memorandum
(the "Memorandum") relating to the Portfolios.
Investments in the Portfolios may only be made by certain institutional
investors, whether organized within or outside the United States (excluding
individuals, S corporations, partnerships, and grantor trusts beneficially owned
by any individuals, S corporations, or partnerships). An investor in a
Portfolio must also be an "accredited investor," as that term is defined under
Rule 501(a) of Regulation D under the Securities Act of 1933, as amended.
This Statement of Additional Information does not constitute an offer to sell,
or the solicitation of an offer to buy, beneficial interests in the Portfolio.
An investor may subscribe for a beneficial interest in the Portfolio by
contacting Forum Financial Services, Inc., the Trust's placement agent (the
"Placement Agent"), at Two Portland Square, Portland, Maine 04101, (207) 879-
1900, for a complete subscription package, including the Memorandum and a
subscription agreement. The Trust and the Placement Agent reserve the right to
refuses to accept any subscription for any reason.
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TABLE OF CONTENTS
Page
----
General Information and History. . . . . . . . . . . . . . . 28
Investment Objectives and Policies . . . . . . . . . . . . . 28
Management of the Trust. . . . . . . . . . . . . . . . . . . 40
Control Persons and Principal Holders of Securities. . . . . 42
Investment Advisory and Other Services . . . . . . . . . . . 42
Brokerage Allocation and Other Practices . . . . . . . . . . 44
Capital Stock and Other Securities . . . . . . . . . . . . . 46
Purchase, Redemption and Pricing of Securities . . . . . . . 46
Tax Status . . . . . . . . . . . . . . . . . . . . . . . . . 47
Underwriters . . . . . . . . . . . . . . . . . . . . . . . . 48
Calculation of Performance Data. . . . . . . . . . . . . . . 48
Financial Statements . . . . . . . . . . . . . . . . . . . . 48
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THE SECURITIES OF THE TRUST DESCRIBED IN THIS PRIVATE PLACEMENT MEMORANDUM HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ARE
SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED
OR RESOLD EXCEPT AS PERMITTED UNDER (1) THE TERMS OF THE TRUST
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INSTRUMENT OF THE TRUST AND (2) THE SECURITIES ACT OF 1933, AS AMENDED, AND THE
APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM.
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GENERAL INFORMATION AND HISTORY (ITEM 12 OF FORM N-1A)
Not applicable.
INVESTMENT OBJECTIVES AND POLICIES (ITEM 13 OF FORM N-1A)
INVESTMENT POLICIES
Part A contains information about the investment objectives, policies and
restrictions of International Portfolio, International Portfolio II, Index
Portfolio and Small Company Portfolio (each a "Portfolio" and collectively the
"Portfolios") of Core Trust (Delaware) (the "Trust"). The following discussion
is intended to supplement the disclosure in Part A concerning the Portfolios'
investments, investment techniques and strategies and the risks associated
therewith. No Portfolio may make any investment or employ any investment
technique or strategy not referenced in Part A as it relates to that Portfolio.
This Part B should be read only in conjunction with Part A.
DEFINITIONS
As used in Part B, the following terms shall have the meanings listed:
"Board" shall mean the Board of Trustees of the Trust.
"NRSRO" shall mean a nationally recognized statistical rating organization.
"U.S. Government Securities" shall mean obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities.
"1940 Act" shall mean the Investment Company Act of 1940, as amended.
"Commission" shall mean the U.S. Securities and Exchange Commission.
CONVERTIBLE SECURITIES
Each Portfolio may invest in convertible securities. A convertible security is a
bond, debenture, note, preferred stock or other security that may be converted
into or exchanged for a prescribed amount of common stock of the same or a
different issuer within a particular period of time at a specified price or
formula. A convertible security entitles the holder to receive interest paid or
accrued on debt or the dividend paid on preferred stock until the convertible
security matures or is redeemed, converted or exchanged. Before conversion,
convertible securities have characteristics similar to non-convertible debt
securities in that they ordinarily provide a stable stream of income with
generally higher yields than those of common stocks of the same or similar
issuers. Convertible securities rank senior to common stock in a corporation's
capital structure but are usually subordinated to comparable non-convertible
securities. Although no securities investment is without some risk, investment
in convertible securities generally entails less risk than in the issuer's
common stock. However, the extent to which such risk is reduced depends in large
measure upon the degree to which the convertible security sells above its value
as a fixed income security. Convertible securities have unique investment
characteristics in that they generally (l) have higher yields than common stock,
but lower yields than comparable non-convertible securities, (2) are less
subject to fluctuation in value than the underlying stocks since they have fixed
income characteristics and (3) provide the potential for capital appreciation if
the market price of the underlying common stock increases.
The value of a convertible security is a function of its "investment value"
(determined by a comparison of its yield with the yields of other securities of
comparable maturity and quality that do not have a conversion privilege) and its
"conversion value" (the security's worth, at market value, if converted into the
underlying common stock). The investment value of a convertible security is
influenced by changes in interest rates, with investment value declining as
interest rates increase and increasing as interest rates decline. The credit
standing of the issuer and other factors also may have an effect on the
convertible security's investment value. The conversion value of a convertible
security is
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determined by the market price of the underlying common stock. If the conversion
value is low relative to the investment value, the price of the convertible
security is governed principally by its investment value and generally the
conversion value decreases as the convertible security approaches maturity. To
the extent the market price of the underlying common stock approaches or exceeds
the conversion price, the price of the convertible security will be increasingly
influenced by its conversion value. In addition, a convertible security
generally will sell at a premium over its conversion value determined by the
extent to which investors place value on the right to acquire the underlying
common stock while holding a fixed income security.
A convertible security may be subject to redemption at the option of the issuer
at a price established in the convertible security's governing instrument. If a
convertible security held by a Portfolio is called for redemption, the Portfolio
will be required to permit the issuer to redeem the security, convert it into
the underlying common stock or sell it to a third party.
FOREIGN CURRENCY TRANSACTIONS
Investments by International Portfolio and International Portfolio II in
securities of foreign companies will usually involve the currencies of foreign
countries. In addition, these Portfolios may temporarily hold funds in bank
deposits in foreign currencies pending the completion of certain investment
programs. Accordingly, the value of the assets of a Portfolio, as measured in
U.S. dollars, may be affected by changes in foreign currency exchange rates and
exchange control regulations. In addition, a Portfolio may incur costs in
connection with conversions between various currencies. A Portfolio may conduct
foreign currency exchange transactions either on a spot (i.e., cash) basis at
the spot rate prevailing in the foreign currency exchange market or by entering
into foreign currency forward contracts ("forward contracts") to purchase or
sell foreign currencies. A forward contract involves an obligation to purchase
or sell a specific currency at a future date, which may be any fixed number of
days (usually less than one year) from the date of the contract agreed upon by
the parties, at a price set at the time of the contract. Forward contracts in
the principal foreign currencies are traded in the interbank market conducted
directly between currency traders (usually large commercial banks) and their
customers and involve the risk that the other party to the contract may fail to
deliver currency when due, which could result in losses to a Portfolio. A
forward contract generally has no deposit requirement, and no commissions are
charged at any stage for trades. Foreign exchange dealers realize a profit based
on the difference between the price at which they buy and sell various
currencies.
A Portfolio may enter into forward contracts under two circumstances. First,
with respect to specific transactions, when a Portfolio enters into a contract
for the purchase or sale of a security denominated in a foreign currency, it may
desire to "lock in" the U.S. dollar price of the security. By entering into a
forward contract for the purchase or sale, for a fixed amount of dollars, of the
amount of foreign currency involved in the underlying security transactions, the
Portfolio may be able to protect itself against a possible loss resulting from
an adverse change in the relationship between the U.S. dollar and the subject
foreign currency during the period between the date the security is purchased or
sold and the date on which payment is made or received.
Second, a Portfolio may enter into forward contracts in connection with existing
portfolio positions. For example, when the investment adviser of these
Portfolios, Schroder Capital Management International Inc. ("Schroder"),
believes that the currency of a particular foreign country may suffer a
substantial decline against the U.S. dollar, a Portfolio may enter into a
forward contract to sell, for a fixed amount of dollars, the amount of foreign
currency approximating the value of some or all of the Portfolio's investment
securities denominated in such foreign currency.
The precise matching of the forward contract amounts and the value of the
securities involved will not generally be possible since the future value of
such securities in foreign currencies will change as a consequence of market
movements in the value of those securities between the date the forward contract
is entered into and the date it matures. The projection of short-term currency
market movement is extremely difficult, and the successful execution of a short-
term hedging strategy is highly uncertain. Forward contracts involve the risk of
inaccurate predictions of currency price movements, which may cause a Portfolio
to incur losses on these contracts and transaction costs. Schroder does not
intend to enter into forward contracts on a regular or continuous basis and will
not do so if, as a result, a Portfolio will have more than 25 % of the value of
its total assets committed to such contracts or the contracts would obligate a
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Portfolio to deliver an amount of foreign currency in excess of the value of the
Portfolio's investment securities or other assets denominated in that currency.
At or before the settlement of a forward currency contract, a Portfolio may
either make delivery of the foreign currency or terminate its contractual
obligation to deliver the foreign currency by purchasing an offsetting contract.
If a Portfolio chooses to make delivery of the foreign currency, it may be
required to obtain the currency through the conversion of assets of the
Portfolio into the currency. A Portfolio may close out a forward contract
obligating it to purchase a foreign currency by selling an offsetting contract.
If a Portfolio engages in an offsetting transaction, it will realize a gain or a
loss to the extent that there has been a change in forward contract prices.
Additionally, although forward contracts may tend to minimize the risk of loss
due to a decline in the value of the hedged currency, at the same time they tend
to limit any potential gain which might result should the value of such currency
increase.
There is no systematic reporting of last sale information for foreign
currencies, and there is no regulatory requirement that quotations available
through dealers or other market sources be firm or revised on a timely basis.
Quotation information available is generally representative of very large
transactions in the interbank market. The interbank market in foreign currencies
is a global around-the-clock market.
When required by applicable regulatory guidelines, a Portfolio will set aside
cash, U.S. Government Securities or other liquid, high-grade debt securities in
a segregated account with its custodian in the prescribed amount.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES
The Portfolios may purchase securities on a when-issued or delayed delivery
basis. In those cases, the purchase price and the interest rate payable on the
securities are fixed on the transaction date and delivery and payment may take
place a month or more after the date of the transaction. At the time a Portfolio
makes the commitment to purchase securities on a when-issued or delayed delivery
basis, it will record the transaction as a purchase and thereafter reflect the
value each day of such securities in determining its net asset value.
A Portfolio will make commitments for such when-issued transactions only when it
has the intention of actually acquiring the securities. To facilitate such
acquisitions, a Portfolio will maintain with its custodian a separate account
with portfolio securities in an amount at least equal to such commitments. On
delivery dates for such transactions, the Portfolio will meet its obligations
from maturities, sales of the securities held in the separate account or from
other available sources of cash. If a Portfolio chooses to dispose of the right
to acquire a when-issued security prior to its acquisition, it could, as with
the disposition of any other portfolio obligation, realize a gain or loss due to
market fluctuation.
DOMESTIC AND FOREIGN BANK OBLIGATIONS
Each Portfolio may invest in obligations of financial institutions, including
negotiable certificates of deposit, bankers' acceptances and time deposits of
U.S. banks (including savings banks and savings associations), foreign branches
of U.S. banks, foreign banks and their non-U.S. branches (Eurodollars), U.S.
branches and agencies of foreign banks (Yankee dollars), and wholly-owned
banking-related subsidiaries of foreign banks.
Certificates of deposit represent an institution's obligation to repay funds
deposited with it that earn a specified interest rate over a given period.
Bankers' acceptances are negotiable obligations of a bank to pay a draft which
has been drawn by a customer and are usually backed by goods in international
trade. Time deposits are non-negotiable deposits with a banking institution
that earn a specified interest rate over a given period. Certificates of
deposit and fixed time deposits, which are payable at the stated maturity date
and bear a fixed rate of interest, generally may be withdrawn on demand but may
be subject to early withdrawal penalties which could reduce a Portfolio's yield.
Deposits subject to early withdrawal penalties or that mature in more than seven
days are treated as illiquid securities if there is no readily available market
for the securities. A Portfolio's investments in the obligations of foreign
banks and their branches, agencies or subsidiaries may be obligations of the
parent, of the issuing branch, agency or subsidiary, or both. Investments in
foreign bank obligations are limited to banks and branches located in countries
which a Portfolio's investment adviser believes do not present undue risk.
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Each Portfolio may invest in fixed-time deposits, which are payable at their
stated maturity date and bear a fixed rate of interest, and which generally may
be withdrawn on demand by the Portfolio but may be subject to early withdrawal
penalties which vary depending upon market conditions and the remaining maturity
of the obligation and could reduce the Portfolio's yield. Although fixed-time
deposits do not in all cases have a secondary market, there are no contractual
restrictions on a Portfolio's right to transfer a beneficial interest in the
deposits to third parties.
Investments that a Portfolio may make in securities of foreign branches of
domestic banks and domestic and foreign branches of foreign banks may involve
certain risks, including future political and economic developments, the
possible imposition of foreign withholding taxes on interest income payable on
such securities, the possible seizure or nationalization of foreign deposits,
differences from domestic banks in applicable accounting, auditing and financial
reporting standards, and the possible establishment of exchange controls or
other foreign governmental laws or restrictions applicable to the payment of
certificates of deposit or time deposits which might affect adversely the
payment of principal and interest on such securities held by the Portfolio.
ILLIQUID SECURITIES
Each Portfolio may invest up to 15% of its net assets in illiquid securities.
The term "illiquid securities" for this purpose means securities that cannot be
disposed of within seven days in the ordinary course of business at
approximately the amount at which a Portfolio has valued the securities and
includes, among other things, repurchase agreements maturing in more than seven
days and restricted securities other than those the Portfolio's investment
adviser has determined to be liquid pursuant to guidelines established by the
Board.
The Board has the ultimate responsibility for determining whether specific
securities are liquid or illiquid. The Board has delegated the function of
making day-to-day determinations of liquidity to the investment adviser of each
Portfolio, pursuant to guidelines approved by the Board. The investment adviser
takes into account a number of factors in reaching liquidity decisions,
including but not limited to: (1) the frequency of trades and quotations for the
security; (2) the number of dealers willing to purchase or sell the security and
the number of other potential buyers; (3) the willingness of dealers to
undertake to make a market in the security; and (4) the nature of the
marketplace trades, including the time needed to dispose of the security, the
method of soliciting offers and the mechanics of the transfer. The investment
adviser monitors the liquidity of the securities held by each Portfolio and
reports periodically on such decisions to the Board.
FIXED INCOME SECURITIES AND THEIR CHARACTERISTICS
Although each Portfolio only invests in investment grade fixed income
securities, including money market instruments, an investment in a Portfolio is
subject to risk even if all fixed income securities in the Portfolio are paid in
full at maturity. All fixed income securities, including U.S. Government
Securities, can change in value when there is a change in interest rates or the
issuer's actual or perceived creditworthiness or ability to meet its
obligations.
The market value of the interest-bearing debt securities held by the Portfolios
will be affected by changes in interest rates. There is normally an inverse
relationship between the market value of securities sensitive to prevailing
interest rates and actual changes in interest rates. In other words, an
increase in interest rates produces a decrease in market value. Moreover, the
longer the remaining maturity of a security, the greater will be the effect of
interest rate changes on the market value of that security. Changes in the
ability of an issuer to make payments of interest and principal and in the
market's perception of an issuer's creditworthiness will also affect the market
value of the debt securities of that issuer. The possibility exists, therefore,
that, the ability of any issuer to pay, when due, the principal of and interest
on its debt securities may become impaired.
RATING MATTERS. A Portfolio may purchase unrated securities if the Portfolio's
investment adviser determines the security to be of comparable quality to a
rated security that the Portfolio may purchase. Unrated securities may not be
as actively traded as rated securities. A Portfolio may retain securities whose
rating has been lowered below the lowest permissible rating category (or that
are unrated and determined by the Portfolio's investment adviser to be of
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comparable quality to securities whose rating has been lowered below the lowest
permissible rating category) if the investment adviser determines that retaining
such security is in the best interests of the Portfolio.
To limit credit risks, the Portfolios may only invest in securities that are
investment grade - i.e., rated in the top four long-term investment grades by an
NRSRO or in the top two short-term investment grades by an NRSRO. Accordingly,
the lowest permissible long-term investment grades for corporate bonds,
including convertible bonds, are Baa in the case of Moody's Investors Service,
Inc. ("Moody's") and BBB in the case of Standard & Poor's Ratings Group ("S&P")
and Fitch Investors Service, Inc. ("Fitch"); the lowest permissible long-term
investment grades for preferred stock are baa in the case of Moody's and BBB in
the case of S&P and Fitch; and the lowest permissible short-term investment
grades for short-term debt, including commercial paper, are Prime-2 (P-2) in the
case of Moody's, A-2 in the case of S&P and F-2 in the case of Fitch. All these
ratings are generally considered to be investment grade ratings, although
Moody's indicates that securities with long-term ratings of Baa have speculative
characteristics.
VARIABLE AND FLOATING RATE SECURITIES. The securities in which the Portfolios
invest may have variable or floating rates of interest and, under certain
limited circumstances, may have varying principal amounts. These securities pay
interest at rates that are adjusted periodically accordingly to a specified
formula, usually with reference to one or more interest rate indices or market
interest rates. Similar to fixed rate debt instruments, variable and floating
rate instruments are subject to changes in value based on changes in market
interest rates or changes in the issuer's creditworthiness. There may not be an
active secondary market for any particular floating or variable rate instrument;
this could make it difficult for a Portfolio to dispose of the instrument if the
issuer defaulted on its repayment obligation at a time when the Portfolio was
not entitled to exercise any demand rights it might have. A Portfolio could,
for this or other reasons, suffer a loss with respect to the instrument. Each
Portfolio's investment adviser monitors the liquidity of the Portfolio's
investment in variable and floating rate instruments, but there can be no
guarantee that an active secondary market will exist.
Certain securities may have an initial principal amount that varies over time
based on an interest rate index, and, accordingly, a Portfolio might be entitled
to less than the initial principal amount of the security upon the security's
maturity. Each Portfolio intends to purchase such securities only when the
Portfolio's investment adviser believes the interest income from the instrument
justifies any principal risks associated with the instrument. A Portfolio's
investment adviser may attempt to limit any potential loss of principal by
purchasing similar instruments that are intended to provide an offsetting
increase in principal. There can be no assurance that the investment adviser
will be able to limit principal fluctuations and, accordingly, a Portfolio may
incur losses on those securities even if held to maturity without issuer
default.
FOREIGN AND MUNICIPAL GOVERNMENT DEBT SECURITIES. The fixed income securities
in which International Portfolio and International Portfolio II may invest
include those issued by the governments of foreign countries or by those
countries' political subdivisions, agencies or instrumentalities, as well as by
supranational organizations such as the International Bank for Reconstruction
and Development. To the extent otherwise permitted, a Portfolio may invest in
these securities if Schroder believes that the securities do not present undue
risk.
INVESTMENT LIMITATIONS
Except as required by the 1940 Act, if any percentage restriction on investment
or utilization of assets is adhered to at the time an investment is made, a
later change in percentage resulting from a change in the market values of a
Portfolio's assets or purchases and redemptions of interests will not be
considered a violation of the limitation.
FUNDAMENTAL LIMITATIONS
Each Portfolio has adopted the following investment limitations which are
fundamental policies of the Portfolio and cannot be changed without the
affirmative vote of the lesser of (a) more than 50% of the outstanding interests
of the Portfolio or (b) 67% or more of the interests present at an
interestholders' meeting if more than 50% of the outstanding shares are
represented at the meeting in person or by proxy.
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(1) DIVERSIFICATION: With respect to 75% of its assets, the Portfolio may not
purchase a security other than a U.S. Government Security if, as a result,
more than 5% of the Portfolio's total assets would be invested in the
securities of a single issuer or the Portfolio would own more than 10% of
the outstanding voting securities of any single issuer.
(2) CONCENTRATION: The Portfolio may not purchase securities if, immediately
after the purchase, more than 25% of the value of the Portfolio's total
assets would be invested in the securities of issuers conducting their
principal business activities in the same industry; provided, however that
there is no limit on investments in U.S. Government Securities, repurchase
agreements covering U.S. Government Securities, and issuers domiciled in a
single country; that financial service companies are classified according
to the end users of their services (for example, automobile finance, bank
finance and diversified finance); and that utility companies are classified
according to their services (for example, gas, gas transmission, electric
and gas, electric and telephone).
(3) BORROWING: The Portfolio may borrow money from a bank for temporary or
emergency purposes, including the meeting of redemption requests, but not
in excess of 33 1/3% of the value of the Portfolio's total assets (as
computed immediately after the borrowing).
(4) ISSUANCE OF SENIOR SECURITIES: The Portfolio may not issue senior
securities except to the extent permitted by the 1940 Act.
(5) UNDERWRITING ACTIVITIES: The Portfolio may not underwrite securities of
other issuers, except to the extent that the Portfolio may be considered to
be acting as an underwriter in connection with the disposition of portfolio
securities.
(6) MAKING LOANS: The Portfolio may not make loans, except the Portfolio may
enter into repurchase agreements, purchase debt securities that are
otherwise permitted investments and lend portfolio securities.
(7) PURCHASES AND SALES OF REAL ESTATE: The Portfolio may not purchase or sell
real estate, any interest therein or real estate limited partnership
interests, except that the Portfolio may invest in debt obligations secured
by real estate or interests therein or securities issued by companies that
invest in real estate or interests therein.
(8) PURCHASES AND SALES OF COMMODITIES: The Portfolio may not purchase or sell
physical commodities or contracts, options or options on contracts to
purchase or sell physical commodities, provided that currencies and
currency-related contracts and contracts on indices are not deemed to be
physical commodities.
NONFUNDAMENTAL LIMITATIONS
Each Portfolio has adopted the following investment limitations which are not
fundamental policies of the Portfolio and may be changed by the Board.
(1) BORROWING: Borrowing for other than temporary or emergency purposes or
meeting redemption requests is limited to 5% of the value of the
Portfolio's total assets. Where the Portfolio establishes a segregated
account to limit the amount of leveraging of the Portfolio with respect to
certain investment techniques, the Portfolio does not treat those
techniques as involving borrowings for purposes of this limitation.
(2) ILLIQUID SECURITIES: The Portfolio may not invest more than (i) 15% of its
net assets in illiquid securities, a term that means securities that cannot
be disposed of within seven days in the ordinary course of business and
includes, among other things, repurchase agreements maturing in more than
seven days, or (ii) 10% of its total assets in securities subject to
contractual restrictions on resale.
(3) OTHER INVESTMENT COMPANIES: The Portfolio may not invest in securities of
another investment company, except to the extent permitted by the 1940 Act.
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(4) MARGIN AND SHORT SALES: The Portfolio may not purchase securities on
margin or make short sales of securities (except short sales against the
box) except for the use of short-term credit necessary for the clearance of
purchases and sales of portfolio securities. The Portfolio may make margin
deposits in connection with permitted transactions in options and futures
contracts.
(5) UNSEASONED ISSUERS: The Portfolio may not invest in securities (other than
fully-collateralized debt obligations) issued by companies that have
conducted continuous operations for less than three years, including the
operations of predecessors, unless guaranteed as to principal and interest
by an issuer in whose securities the Portfolio could invest, if, as a
result, more than 5% of the value of the Portfolio's total assets would be
so invested.
(6) PLEDGING: The Portfolio may not pledge, mortgage, hypothecate or encumber
any of its assets except to secure permitted borrowings.
(7) INVESTMENTS BY OFFICERS AND TRUSTEES: The Portfolio may not invest in or
hold securities of any issuer if, to the Trust's knowledge, officers and
trustees of the Trust or an investment adviser to the Portfolio,
individually owning beneficially more than one-half of one percent of the
securities of the issuer, in the aggregate own more than 5% of the issuer's
securities.
(8) OIL, GAS AND MINERAL INVESTMENTS: The Portfolio may not invest in interests
in oil and gas or interests in other mineral exploration or development
programs, including oil, gas and other mineral leases and the Portfolio may
not invest in real estate limited partnerships.
RATINGS
Moody's, S&P, Fitch and other NRSROs are private services that provide ratings
of the credit quality of debt obligations, including convertible securities. A
description of certain ratings assigned to various types of bonds and other
securities by those NRSROs is set forth below. The Portfolios may use these
ratings to determine whether to purchase, sell or hold a security. However,
ratings are general and are not absolute standards of quality. Consequently,
securities with the same maturity, interest rate and rating may have different
market prices. If an issue of securities ceases to be rated or if its rating is
reduced after it is purchased by a Portfolio, the investment adviser of the
Portfolio will determine whether the Portfolio should continue to hold the
obligation. Credit ratings attempt to evaluate the safety of principal and
interest payments and do not evaluate the risks of fluctuations in market value.
Also, rating agencies may fail to make timely changes in credit ratings. An
issuer's current financial condition may be better or worse than a rating
indicates.
CORPORATE BONDS
MOODY'S INVESTORS SERVICE, INC. ("MOODY'S"). Moody's rates corporate bond
issues, including convertible debt issues, as follows:
Bonds which are rated Aaa are judged by Moody's to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edged." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group, they comprise what are generally known as high-
grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long term risks appear somewhat larger than in Aaa securities.
Bonds which are rated A possess many favorable investment attributes and are to
be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment some time in the future.
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Bonds which are rated Baa are considered as medium grade obligations, i.e., they
are neither highly protected nor poorly secured. Interest payments and principal
security appear adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.
Note: Moody's applies numerical modifiers, 1, 2 and 3 in each generic rating
classification from Aa to Baa. The modifier 1 indicates that the company ranks
in the higher end of its generic rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates that the company ranks in the
lower end of its generic rating category.
STANDARD AND POOR'S RATINGS GROUP ("S&P"). S&P rates corporate bond issues,
including convertible debt issues, as follows:
Bonds rated AAA have the highest rating assigned by S&P. Capacity to pay
interest and repay principal is extremely strong.
Bonds rated AA have a very strong capacity to pay interest and repay principal
and differ from the highest rated issues only in small degree.
Bonds rated A have a strong capacity to pay interest and repay principal,
although they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt rated in higher rated
categories.
Bonds rated BBB are regarded as having an adequate capacity to pay interest and
repay principal. Whereas they normally exhibit adequate protection parameters,
adverse economic conditions or changing circumstances are more likely to lead to
weakened capacity to pay interest and repay principal for debt in this category
than in higher rated categories.
Note: The ratings may be modified by the addition of a plus (+) or minus (-)
sign to show the relative standing within the major categories.
FITCH INVESTORS SERVICE, INC. ("FITCH"). Fitch rates corporate bond issues,
including convertible debt issues, as follows:
AAA Bonds are considered to be investment grade and of the highest credit
quality. The obligor has an exceptionally strong ability to pay interest and
repay principal, which is unlikely to be affected by reasonably foreseeable
events.
AA Bonds are considered to be investment grade and of very high credit quality.
The obligor's ability to pay interest and repay principal is very strong,
although not quite as strong as bonds rated AAA. Because bonds rated in the AAA
and AA categories are not significantly vulnerable to foreseeable future
developments, shorter-term debt of these issuers is generally rate F-1+.
A Bonds are considered to be investment grade and of high credit quality. The
obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.
BBB Bonds are considered to be investment grade and of satisfactory credit
quality. The obligor's ability to pay interest and repay principal is considered
to be adequate. Adverse changes in economic conditions and circumstances,
however, are more likely to have adverse impact on these bonds, and therefore
impair timely payment. The likelihood that the ratings of these bonds will fall
below investment grade is higher than for bonds with higher ratings.
Plus (+) and minus (-) signs are used with a rating symbol to indicate the
relative position of a credit within the rating category. Plus and minus signs,
however, are not used in the AAA category.
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PREFERRED STOCK
MOODY'S INVESTORS SERVICE, INC. Moody's rates preferred stock as follows:
An issue rated aaa is considered to be a top-quality preferred stock. This
rating indicates good asset protection and the least risk of dividend impairment
within the universe of preferred stocks.
An issue rated aa is considered a high-grade preferred stock. This rating
indicates that there is a reasonable assurance that earnings and asset
protection will retain relatively well maintained in the foreseeable future.
An issue rated a is considered to be an upper-medium grade preferred stock.
While risks are judged to be somewhat greater than in the aaa and aa
classification, earnings and asset protection are, nevertheless, expected to be
maintained at adequate levels.
An issue rated baa is considered to be a medium-grade preferred stock, neither
highly protected nor poorly secured. Earnings and asset protection appear
adequate at present but may be questionable over any great length of time.
Note: Moody's applies numerical modifiers 1, 2 and 3 in each rating
classification; the modifier 1 indicates that the security ranks in the higher
end of its generic rating category; the modifier 2 indicates a mid-range
ranking; and the modifier 3 indicates that the issue ranks in the lower end of
its generic rating category.
STANDARD & POOR'S RATINGS GROUP. S&P rates preferred stock as follows:
AAA is the highest rating that is assigned by S&P to a preferred stock issue and
indicates an extremely strong capacity to pay the preferred stock obligations.
A preferred stock issue rated AA also qualifies as a high-quality fixed income
security. The capacity to pay preferred stock obligations is very strong,
although not as overwhelming as for issues rated AAA.
An issue rated A is backed by a strong capacity to pay the preferred stock
obligations, although it is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions.
An issue rated BBB is regarded as backed by an adequate capacity to pay the
preferred stock obligations. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to make payments for a preferred stock
obligation in this category than for issues in the A category.
To provide more detailed indications of preferred stock quality, the ratings
from AA to BBB may be modified by the addition of a plus (+) or minus (-) sign
to show relative standing within the major rating categories.
COMMERCIAL PAPER
MOODY'S INVESTORS SERVICE, INC. Moody's two highest ratings for short-term
debt, including commercial paper, are Prime-1 and Prime-2. Both are judged
investment grade, to indicate the relative repayment ability of rated issuers.
Issuers rated Prime-1 (or related supporting institutions) have a superior
capacity for repayment of short-term promissory obligations. Prime-1 repayment
capacity will normally be evidenced by the following characteristics:
Leading market positions in well-established industries, high rates of return on
funds employed, conservative capitalization structures with moderate reliance on
debt and ample asset protection, broad margins in earning coverage of fixed
financial charges and high internal cash generation, well-established access to
a range of financial markets and assured sources of alternate liquidity.
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Issuers rated Prime-2 (or related supporting institutions) by Moody's have a
strong capacity for repayment of short-term promissory obligations. This will
normally be evidenced by many of the characteristics of issuers rated Prime-1
but to a lesser degree. Earnings trends and coverage ratios, while sound, will
be more subject to variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained.
STANDARD AND POOR'S RATINGS GROUP. S&P's two highest commercial paper ratings
are A and B. Issues assigned an A rating are regarded as having the greatest
capacity for timely payment. Issues in this category are delineated with the
numbers 1, 2 and 3 to indicate the relative degree of safety. An A-l designation
indicates that the degree of safety regarding timely payment is strong. Those
issues determined to possess extremely strong safety characteristics are denoted
with a plus (+) sign designation. The capacity for timely payment on issues with
an A-2 designation is satisfactory. However, the relative degree of safety is
not as high as for issues designated A-1. A-3 issues have adequate capacity for
timely payment. They are, however, more vulnerable to the adverse effects of
changes in circumstances than obligations carrying the higher designations.
Issues rated B are regarded as having only speculative capacity for timely
payment.
FITCH INVESTORS SERVICE, INC. Fitch's short-term ratings apply to debt
obligations that are payable on demand or have original maturities of generally
up to three years, including commercial paper, certificates of deposit, medium-
term notes, and municipal and investment notes.
F-1+. Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.
F-1. Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated F-1+.
F-2. Good Credit Quality. Issues assigned this rating have a satisfactory
degree of assurance for timely payment, but the margin of safety is not as great
as for issues assigned F-1+ or F-1 rating.
F-3. Fair Credit Quality. Issues assigned this rating have characteristics
suggesting that the degree of assurance for timely payment is adequate, however,
near-term adverse changes could cause these securities to be rated below
investment grade.
HEDGING AND OPTION INCOME STRATEGIES
Although the Portfolios have no current intention of doing so, each Portfolio
may engage in certain options and futures strategies to attempt to hedge the
Portfolio's investments. The instruments in which the Portfolios may invest
include (i) options on foreign currencies, (ii) index and foreign currency
futures contracts ("futures contracts"), and (iii) options on futures contracts.
Use of these instruments is subject to regulation by the Commission, the several
options and futures exchanges upon which options and futures are traded, and the
Commodities Futures Trading Commission.
The various strategies referred to herein and in Part A are intended to
illustrate the type of strategies that are available to, and may be used by, an
investment adviser in managing a Portfolio's investments. No assurance can be
given, however, that any strategies will succeed.
The Portfolios will not use leverage in their hedging strategies. In the case of
transactions entered into as a hedge, a Portfolio will hold securities,
currencies or other options or futures positions whose values are expected to
offset ("cover") its obligations thereunder. A Portfolio will not enter into a
hedging strategy that exposes the Portfolio to an obligation to another party
unless it owns either (1) an offsetting ("covered") position or (2) cash, U.S.
Government Securities or other liquid, high-grade debt securities with a value
sufficient at all times to cover its potential obligations. When required by
applicable regulatory guidelines, a Portfolio will set aside cash, U.S.
Government Securities or other liquid, high-grade debt securities in a
segregated account with its custodian in the prescribed amount. Any assets used
for cover or held in a segregated account cannot be sold or closed out while the
hedging strategy is outstanding, unless they are replaced with similar assets.
As a result, there is a possibility that the use of cover or segregation
involving a
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large percentage of a Portfolio's assets could impede portfolio management or
the Portfolio's ability to meet redemption requests or other current
obligations.
OPTIONS STRATEGIES
A Portfolio may purchase put and call options written by others and write (sell)
put and call options covering currencies. A put option (sometimes called a
"standby commitment") gives the buyer of the option, upon payment of a premium,
the right to deliver a specified amount of currency to the writer of the option
on or before a fixed date at a predetermined price. A call option (sometimes
called a "reverse standby commitment") gives the purchaser of the option, upon
payment of a premium, the right to call upon the writer to deliver a specified
amount of currency on or before a fixed date, at a predetermined price. The
predetermined prices may be higher or lower than the market value of the
underlying currency. A Portfolio may buy or sell both exchange-traded and over-
the-counter ("OTC") options. A Portfolio will purchase or write an option only
if that option is traded on a recognized U.S. options exchange or if its
investment adviser believes that a liquid secondary market for the option
exists. When a Portfolio purchases an OTC option, it relies on the dealer from
which it has purchased the OTC option to make or take delivery of the currency
underlying the option. Failure by the dealer to do so would result in the loss
of the premium paid by the Portfolio as well as the loss of the expected benefit
of the transaction.
Upon selling an option, a Portfolio receives a premium from the purchaser of the
option. Upon purchasing an option the Portfolio pays a premium to the seller of
the option. The amount of premium received or paid by the Portfolio is based
upon certain factors, including the relationship of the exercise price to the
market price, the option period, and supply and demand.
FOREIGN CURRENCY OPTIONS AND RELATED RISKS
A Portfolio may take positions in options on foreign currencies in order to
hedge against the risk of foreign exchange fluctuation on foreign securities the
Portfolio holds in its portfolio or which it intends to purchase. Options on
foreign currencies are affected by the factors discussed in "Options Strategies"
and "Foreign Currency Forward Transactions" above which influence foreign
exchange sales and investments generally.
The value of foreign currency options is dependent upon the value of the foreign
currency relative to the U.S. dollar and has no relationship to the investment
merits of a foreign security. Because foreign currency transactions occurring in
the interbank market involve substantially larger amounts than those that may be
involved in the use of foreign currency options, a Portfolio may be
disadvantaged by having to deal in an odd lot market (generally consisting of
transactions of less than $1 million) for the underlying foreign currencies at
prices that are less favorable than for round lots.
To the extent that the U.S. options markets are closed while the market for the
underlying currencies remains open, significant price and rate movements may
take place in the underlying markets that cannot be reflected in the options
markets.
SPECIAL CHARACTERISTICS AND RISKS OF OPTIONS TRADING
A Portfolio may effectively terminate its right or obligation under an option
contract by entering into a closing transaction. For instance, if the Portfolio
wished to terminate its potential obligation to sell currencies under a call
option it had written, a call option of the same type would be purchased by the
Portfolio. Closing transactions essentially permit the Portfolio to realize
profits or limit losses on its options positions prior to the exercise or
expiration of the option. In addition:
(1) The successful use of options depends upon the investment adviser's ability
to forecast the direction of price fluctuations in the currency markets.
(2) Options normally have expiration dates of up to nine months. Options that
expire unexercised have no value. Unless an option purchased by a Portfolio is
exercised or unless a closing transaction is effected with respect to that
position, a loss will be realized in the amount of the premium paid.
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(3) A position in an exchange-listed option may be closed out only on an
exchange which provides a market for identical options. Exchange markets for
options on foreign currencies are relatively new, and the ability to establish
and close out positions on the exchanges is subject to the maintenance of a
liquid secondary market. Closing transactions may be effected with respect to
options traded in the OTC markets (currently the primary markets for options on
foreign currencies) only by negotiating directly with the other party to the
option contract or in a secondary market for the option if such market exists.
There is no assurance that a liquid secondary market will exist for any
particular option at any specific time. If it is not possible to effect a
closing transaction, a Portfolio would have to exercise the option which it
purchased in order to realize any profit. The inability to effect a closing
transaction on an option written by a Portfolio may result in material losses to
the Portfolio.
(4) A Portfolio's activities in the options markets may result in a higher
portfolio turnover rate and additional brokerage costs.
FUTURES STRATEGIES
A futures contract is a bilateral agreement wherein one party agrees to accept,
and the other party agrees to make, delivery of cash, an underlying debt
security or the currency as called for in the contract at a specified future
date and at a specified price. For futures contracts with respect to an index,
delivery is of an amount of cash equal to a specified dollar amount times the
difference between the index value at the time of the contract and the close of
trading of the contract.
A Portfolio may purchase index futures contracts for several reasons: to
simulate full investment in the underlying index while retaining a cash balance
for fund management purposes, to facilitate trading, to reduce transactions
costs, or to seek higher investment returns when a futures contract is priced
more attractively than securities in the index.
A Portfolio may sell foreign currency futures contracts to hedge against
possible variations in the exchange rate of the foreign currency in relation to
the U.S. dollar. In addition, a Portfolio may sell foreign currency futures
contracts when its investment adviser anticipates a general weakening of foreign
currency exchange rates that could adversely affect the market values of the
Portfolio's foreign securities holdings. A Portfolio may purchase a foreign
currency futures contract to hedge against an anticipated foreign exchange rate
increase pending completion of anticipated transactions. Such a purchase would
serve as a temporary measure to protect the Portfolio against such increase. A
Portfolio may also purchase call or put options on foreign currency futures
contracts to obtain a fixed foreign exchange rate at limited risk. A Portfolio
may write call options on foreign currency futures contracts as a partial hedge
against the effects of declining foreign exchange rates on the value of foreign
securities.
SPECIAL CHARACTERISTICS AND RISKS OF FUTURES AND RELATED OPTIONS TRADING
No price is paid upon entering into futures contracts; rather, a Portfolio is
required to deposit with its custodian in a segregated account in the name of
the futures broker an amount of cash or U.S. Government Securities generally
equal to 5% or less of the contract value. This amount is known as initial
margin. Subsequent payments, called variation margin, to and from the broker,
would be made on a daily basis as the value of the futures position varies. When
writing a call on a futures contract, variation margin must be deposited in
accordance with applicable exchange rules. The initial margin in futures
transactions is in the nature of a performance bond or good-faith deposit on the
contract that is returned to the Portfolio upon termination of the contract,
assuming all contractual obligations have been satisfied.
Holders and writers of futures and options on futures contracts can enter into
offsetting closing transactions, similar to closing transactions on options, by
selling or purchasing, respectively, a futures contract or related option with
the same terms as the position held or written. Positions in futures contracts
may be closed only on an exchange or board of trade providing a secondary market
for such futures contracts.
Under certain circumstances, futures exchanges may establish daily limits in the
amount that the price of a futures contract or related option may vary either up
or down from the previous day's settlement price. Once the daily limit has
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<PAGE>
been reached in a particular contract, no trades may be made that day at a price
beyond that limit. Prices could move to the daily limit for several consecutive
trading days with little or no trading and thereby prevent prompt liquidation of
positions. In such event, it may not be possible for a Portfolio to close a
position, and in the event of adverse price movements, the Portfolio would have
to make daily cash payments of variation margin. In addition:
(1) Successful use by a Portfolio of futures contracts and related options will
depend upon its investment adviser's ability to predict movements in the
direction of the overall currency markets, which requires different skills and
techniques than predicting changes in the prices of individual securities.
Moreover, futures contracts relate not to the current level of the underlying
currency but to the anticipated levels at some point in the future.
(2) The price of futures contracts may not correlate perfectly with movement in
the price of the hedged currencies due to price distortions in the futures
market or otherwise. There may be several reasons unrelated to the value of the
underlying currencies which causes this situation to occur. As a result, a
correct forecast of general market trends may still not result in successful
hedging through the use of futures contracts over the short term.
(3) There is no assurance that a liquid secondary market will exist for any
particular contract at any particular time. In such event, it may not be
possible to close a position, and in the event of adverse price movements, a
Portfolio would continue to be required to make daily cash payments of variation
margin.
(4) Like other options, options on futures contracts have a limited life. A
Portfolio will not trade options on futures contracts on any exchange or board
of trade unless and until, in its investment adviser's opinion, the market for
such options has developed sufficiently that the risks in connection with
options on futures transactions are not greater than the risks in connection
with futures transactions.
(5) Purchasers of options on futures contracts pay a premium in cash at the
time of purchase. This amount and the transaction costs is all that is at risk.
Sellers of options on futures contracts, however, must post an initial margin
and are subject to additional margin calls which could be substantial in the
event of adverse price movements.
(6) A Portfolio's activities in the futures markets may result in a higher
portfolio turnover rate and additional transaction costs in the form of added
brokerage commissions.
(7) Buyers and sellers of foreign currency futures contracts are subject to the
same risks that apply to the buying and selling of futures generally. In
addition, there are risks associated with foreign currency futures contracts and
their use as a hedging device similar to those associated with options on
foreign currencies described above. In addition, settlement of foreign currency
futures contracts must occur within the country issuing that currency. Thus, a
Portfolio must accept or make delivery of the underlying foreign currency in
accordance with any U.S. or foreign restrictions or regulations regarding the
maintenance of foreign banking arrangements by U.S. residents, and the Portfolio
may be required to pay any fees, taxes or charges associated with such delivery
which are assessed in the issuing country.
MANAGEMENT OF THE TRUST (ITEM 14 OF FORM N-1A)
The Trustees and officers of the Trust and their principal occupations during
the past five years are set forth below. Each Trustee who is an "interested
person" (as defined by the 1940 Act) of the Trust is indicated by an asterisk.
John Y. Keffer and David R. Keffer are brothers.
John Y. Keffer*, Chairman and President.
President and Director, Forum Financial Services, Inc. (a registered
broker-dealer), Forum Financial Corp. (a registered transfer agent) and
Forum Advisors, Inc. (a registered investment adviser). Mr. Keffer is a
Trustee/Director and/or officer of various registered investment companies
for which Forum Financial Services, Inc. serves as manager, administrator
and/or distributor. His address is Two Portland Square, Portland, Maine
04101.
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Costas Azariadis, Trustee.
Professor of Economics, University of California, Los Angeles, since July
1992. Prior thereto, Dr. Azariadis was Professor of Economics at the
University of Pennsylvania. His address is Department of Economics,
University of California, Los Angeles, 405 Hilgard Avenue, Los Angeles,
California 90024.
James C. Cheng, Trustee.
Founder and President, Technology Marketing Associates (a marketing company
for small and medium size businesses in New England) since 1991. During
November 1991 to September 1994, Mr. Cheng provided marketing and sales
support to Forum. Mr. Cheng was President of Network Dynamics, Inc. (a
software development company). Prior thereto His address is 27 Temple
Street, Belmont, MA 02718.
J. Michael Parish, Trustee.
Partner at the law firm of Reid & Priest. Prior to 1995, Mr. Parish was a
partner at Winthrop Stimson Putnam & Roberts since 1989. His address is 40
West 57th Street, New York, New York.
Sara M. Clark, Vice President, Assistant Secretary and Assistant Treasurer.
Managing Director, Forum Financial Services, Inc., with which she has been
associated since 1994. Prior thereto, from 1991 to 1994 Ms. Clark was
Controller of Wright Express Corporation (a national credit card company)
and for six years prior thereto was employed at Deloitte & Touche LLP as an
accountant. Ms. Clark is also an officer of various registered investment
companies for which Forum Financial Services, Inc. serves as manager,
administrator and/or distributor. Her address is Two Portland Square,
Portland, Maine 04101.
Thomas G. Sheehan, Vice President and Assistant Secretary.
Counsel, Forum Financial Services, Inc. since October, 1993. Prior
thereto, Mr. Sheehan was a Special Counsel in the Division of Investment
Management of the U.S. Securities and Exchange Commission in Washington,
D.C. His address is Two Portland Square, Portland, Maine 04101.
Michael D. Martins, Treasurer
Fund Accounting Manager, Forum Financial Corp., with which he has been
associated since 1995. Prior thereto, Mr. Martins was at the audit firm of
Deloitte & Touche LLP. Mr. Martins is also an officer of various
registered investment companies for which Forum Financial Services, Inc.
serves as manager, administrator and/or distributor. His address is Two
Portland Square, Portland, Maine 04101.
David I. Goldstein, Secretary.
Counsel, Forum Financial Services, Inc., with which he has been associated
since 1991. Prior thereto, Mr. Goldstein was associated with the law firm
of Kirkpatrick & Lockhart. Mr. Goldstein is also an officer of various
registered investment companies for which Forum Financial Services, Inc.
serves as manager, administrator and/or distributor. His address is Two
Portland Square, Portland, Maine 04101.
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Renee A. Walker, Assistant Secretary.
Fund Administrator, Forum Financial Services, Inc., with which she has been
associated since 1994. Prior thereto, Ms. Walker was an administrator at
Longwood Partners (the manager of a hedge fund partnership) for a year.
After graduating from college, from 1991 to 1993, Ms. Walker was a sales
representative assistant at PaineWebber Incorporated (a broker-dealer).
Her address is Two Portland Square, Portland, Maine 04101.
Each Trustee of the Trust (other than persons who are interested persons of the
Trust) is paid $1,000 for each Board meeting attended (whether in person or by
electronic communication) plus $100 per active portfolio of the Trust and is
paid $1,000 for each Committee meeting attended on a date when a Board meeting
is not held. To the extent a meeting relates to only certain portfolios of the
Trust, Trustees are paid the $100 fee only with respect to those portfolios.
Trustees are also reimbursed for travel and related expenses incurred in
attending meetings of the Board. No officer of the Trust is compensated by the
Trust.
The following table provides the aggregate compensation paid to the Trustees of
the Trust by the Trust and by the "Fund Complex," as defined in Item 22 of
Schedule 14A under the Securities Exchange Act of 1934, comprised of the Trust
and Forum Funds, a Delaware business trust registered with the SEC as an open-
end management investment company. Information is presented for the year ended
May 31, 1996, the Portfolios' fiscal year end.
Total Compensation Total Compensation
from the Trust from the Fund Complex
Costas Azariadis $3,500 $5,500
James C. Cheng $3,500 $5,500
J. Michael Parish $3,500 $5,500
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES (ITEM 15 OF FORM N-1A)
With respect to International Portfolio, International Fund, a series of Norwest
Advantage Funds, a Delaware business trust registered with the SEC as an open-
end management investment company, has invested all of its investable assets in
the Portfolio. As of September 1, 1996, International Fund the Portfolio's only
interestholder and thus controls the Portfolio. With respect to Index
Portfolio, Small Company Portfolio and International Portfolio II, series of
Norwest Advantage Funds have invested a portion of their investable assets in
the Portfolios pursuant to the terms of an exemptive order granted the Trust by
the Commission. As of September 1, 1996, these series control International
Portfolio II, Index Portfolio and Small Company Portfolio. See Part A and
"Purchase, Redemption and Pricing of Securities" below for a description of the
exemptive order.
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Norwest Advantage Funds has informed the Trust that whenever International Fund
is requested to vote on matters pertaining to International Portfolio,
International Fund will hold a meeting of its shareholders and will cast its
vote as instructed by its shareholders. This only applies to matters for which
International Fund would be required to have a shareholder meeting if it
directly held investment securities rather than invested in International
Portfolio. It is anticipated that any other registered investment company (or
series thereof) that may in the future invest in International Portfolio will
follow the same or a similar practice.
INVESTMENT ADVISORY AND OTHER SERVICES (ITEM 16 OF FORM N-1A)
INVESTMENT ADVISORY SERVICES
Norwest Investment Management, a part of Norwest Bank Minnesota, N.A.
("Norwest"), acts as investment adviser to Small Company Portfolio and Index
Portfolio and is required to furnish at its expense all services, facilities and
personnel necessary in connection with managing the investments of, and
effecting portfolio transactions for, those Portfolios.
Schroder acts as investment adviser to International Portfolio and International
Portfolio II and is required to furnish at its expense all services, facilities
and personnel necessary in connection with managing the investments of, and
effecting portfolio transactions for, those Portfolios.
The investment advisory agreement for each Portfolio will continue in effect
only if such continuance is specifically approved at least annually by the Board
or by vote of the interestholders of the Portfolio, and, in either case, by a
majority of the Trustees who are not parties to the Advisory Agreement or
interested persons of any such party, at a meeting called for the purpose of
voting on the Advisory Agreement.
The Advisory Agreement with respect to a Portfolio is terminable without the
payment of penalty, (i) by the Board or by a vote of a majority of the
Portfolio's outstanding voting securities (as defined in the 1940 Act) on 60
days' written notice to Norwest or Schroder, as applicable, or (ii) by Norwest
or Schroder on 60 days' written notice to the Trust. Each Advisory Agreement
terminates automatically upon its assignment.
The advisory fees, as described in Part A, are accrued daily and paid monthly.
Either adviser in its sole discretion, may waive all or any portion of its
advisory fee with respect to each Portfolio. As described in Part A, Norwest is
obligated to reimburse all investment advisory fees of International Portfolio
II, Small Company Portfolio and Index Portfolio. Each Advisory Agreement
provides that the adviser may render service to others.
The following table shows the dollar amount of fees payable under the Investment
Advisory Agreement between Norwest and the Trust with respect to each Portfolio,
the amount of fee that was waived by Norwest, if any, and the actual fee
received by Norwest. The data is for the past fiscal year, November 1, 1995
through May 31, 1996.
Fee Fee Fee
Payable Waived Retained
------- ------ --------
Index Portfolio 281,183 281,183 0
Small Company Portfolio 1,844,601 1,844,601 0
International Portfolio 316,701 0 316,701
International Portfolio II 1,005,925 0 1,005,925
ADMINISTRATIVE SERVICES
Pursuant to an administration agreement with the Trust, Forum supervises the
overall administration of the Trust which includes, among other
responsibilities, overseeing the performance of administrative and professional
services rendered to the Trust by others, including its custodian, transfer
agent and fund accountant as well as legal and auditing services; preparing and
printing the periodic updating of the Trust's registration statement, tax
returns, and reports to
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interestholders and the SEC; preparing, filing and maintaining the Trust's
governing documents; preparing and disseminating materials for meetings of the
Board; and providing the Trust with general office facilities.
The Administration Agreement between Forum and the Trust will continue in effect
with respect to a Portfolio only if such continuance is specifically approved at
least annually by the Board or by the interestholders of that portfolio and, in
either case, by a majority of the Trustees who are not parties to the Management
Agreement or interested persons of any such party.
The administration agreement with respect to each Portfolio may be terminated
without the payment of any penalty, (i) by the Board or by vote of a majority of
the Portfolio's outstanding voting securities (as defined in the 1940) Act on 60
days' written notice to Forum or (ii) by Forum on 60 days' written notice to the
Trust.
The following table shows the dollar amount of fees payable under the
Administration Agreement between Forum and the Trust with respect to each
Portfolio, the amount of fee that was waived by Forum, if any, and the actual
fee received by Forum. The data is for the past fiscal year.
Fee Fee Fee
Payable Waived Retained
------- ------ --------
Index Portfolio $187,455 7,045 180,410
Small Company Portfolio 204,956 1,250 203,706
International Portfolio 105,567 11,873 93,694
International Portfolio II 223,539 0 223,539
CUSTODIAN
Norwest, 733 Marquette Avenue, Minneapolis, Minnesota 55479-0040, is the
custodian of Small Company Portfolio's and Index Portfolio's assets. The Chase
Manhattan Bank, N.A., through its Global Custody Division located in London,
England, acts as custodian of International Portfolio's and International
Portfolio II's assets, but plays no role in making decisions as to the purchase
or sale of portfolio securities for the Portfolios. Pursuant to rules adopted
under the 1940 Act, each Portfolio may maintain its foreign securities and cash
in the custody of certain eligible foreign banks and securities depositories.
Selection of these foreign custodial institutions is made by the Board following
a consideration of a number of factors, including the reliability and financial
stability of the institution, the ability of the institution to perform capably
custodial services for the Portfolio, the reputation of the institution in its
national market, the political and economic stability of the country in which
the institution is located, and further risks of potential nationalization or
expropriation of Portfolio assets. The custodian employs qualified foreign
subcustodians to provide custody of the Portfolios' foreign assets in accordance
with applicable regulations.
INDEPENDENT AUDITORS
Coopers & Lybrand L.L.P., One Post Office Square, Boston, Massachusetts 02109,
serves as independent auditors for the Trust.
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BROKERAGE ALLOCATION AND OTHER PRACTICES (ITEM 17 OF FORM N-1A)
Investment decisions for the Portfolios will be made independently from those
for any other client account or investment company that is or may in the future
become managed by either Norwest or Schroder, as applicable, or its affiliates.
Investment decisions are the product of many factors including basic suitability
for the particular client involved. Thus, a particular security may be bought or
sold for certain clients even though it could have been bought or sold for other
clients at the same time. Likewise, a particular security may be bought for one
or more clients when one or more clients are selling the security. In some
instances, one client may sell a particular security to another client. It also
sometimes happens that two or more clients simultaneously purchase or sell the
same security, in which event each day's transactions in such security are,
insofar as is possible, averaged as to price and allocated between such clients
in a manner which, in Norwest's or Schroder's, as applicable, opinion, is
equitable to each and in accordance with the amount being purchased or sold by
each. There may be circumstances when purchases or sales of portfolio securities
for one or more clients will have an adverse effect on other clients. In
addition, when purchases or sales of the same security for the Portfolio and
other client accounts managed by Norwest or Schroder occur contemporaneously,
the purchase or sale orders may be aggregated in order to obtain any price
advantages available to large denomination purchases or sales.
Purchases and sales of fixed income portfolio securities are generally effected
as principal transactions. These securities are normally purchased directly
from the issuer or from an underwriter or market maker for the securities.
There usually are no brokerage commissions paid for such purchases. Purchases
from underwriters of portfolio securities include a commission or concession
paid by the issuer to the underwriter, and purchases from dealers serving as
market makers include the spread between the bid and ask prices In the case of
securities traded in the foreign and domestic over-the-counter markets, there is
generally no stated commission, but the price usually includes an undisclosed
commission or markup In underwritten offerings, the price includes a disclosed
fixed commission or discount.
Purchases and sales of equity securities on exchanges are generally effected
through brokers who charge commissions except in the over-the-counter markets.
Allocations of transactions to brokers and dealers and the frequency of
transactions are determined by Norwest or Schroder, as applicable, in its best
judgment and in a manner deemed to be in the best interest of holders of
beneficial interests of the Portfolios rather than by any formula. The primary
consideration is prompt execution of orders in an effective manner and at the
most favorable price available to the Portfolio. In transactions on stock
exchanges in the United States, these commissions are negotiated, whereas on
foreign stock exchanges these commissions are generally fixed. Where
transactions are executed in the over-the-counter market, the Portfolio will
seek to deal with the primary market makers; but where necessary in order to
obtain best execution, it will utilize the services of others. In all cases the
Portfolio will attempt to negotiate best execution.
A Portfolio may not always pay the lowest commission or spread available.
Rather, in determining the amount of commission, including certain dealer
spreads, paid in connection with securities transactions, Norwest and Schroder
take into account such factors as size of the order, difficulty of execution,
efficiency of the executing broker's facilities (including the services
described below) and any risk assumed by the executing broker. Norwest and
Schroder may also take into account payments made by brokers effecting
transactions for a Portfolio (i) to the Portfolio or (ii) to other persons on
behalf of the Portfolio for services provided to it for which it would be
obligated to pay.
In addition, Norwest and Schroder may give consideration to research services
furnished by brokers for their use and may cause the Portfolio to pay these
brokers a higher amount of commission than may be charged by other brokers. Such
research and analysis may be used by Norwest and Schroder in connection with
services to clients other than the Portfolios, and advisory fees are not reduced
by reason of their receipt of the research services.
Subject to the general policies regarding allocation of portfolio brokerage as
set forth above, the Board has authorized Norwest and Schroder to employ their
respective affiliates to effect securities transactions of the Portfolios,
provided certain other conditions are satisfied. Payment of brokerage
commissions to an affiliate of Norwest or Schroder, as applicable, for effecting
such transactions is subject to Section 17(e) of the 1940 Act, which requires,
among other things, that commissions for transactions on securities exchanges
paid by a registered investment company to a broker
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which is an affiliated person of such investment company, or an affiliated
person of another person so affiliated, not exceed the usual and customary
brokers' commissions for such transactions. It is the Portfolios' policy that
commissions paid to Schroder Securities Limited ("Schroder Limited"), Norwest
Investment Services, Inc. ("Norwest Services") and other affiliates of either
Norwest or Schroder will, in the judgment of the adviser responsible for making
portfolio decisions and selecting brokers, be (i) at least as favorable as
commissions contemporaneously charged by the affiliate on comparable
transactions for its most favored unaffiliated customers and (ii) at least as
favorable as those which would be charged on comparable transactions by other
qualified brokers having comparable execution capability. The Board, including a
majority of the non-interested Trustees, has adopted procedures to ensure that
commissions paid to affiliates of Norwest or Schroder by the Portfolios satisfy
the foregoing standards.
The Trust has no understanding or arrangement to direct any specific portion of
its brokerage to Schroder Securities or Norwest Services, and will not direct
brokerage to Schroder Securities or Norwest Services in recognition of research
services.
Transactions in futures contracts are executed through futures commission
merchants ("FCMs"), who receive brokerage commissions for their services. The
Trust's procedures in selecting FCMs to execute the Trust's transactions in
futures contracts, including procedures permitting the use of affiliates of
Norwest or Schroder, are similar to those in effect with respect to brokerage
transactions in securities.
The Trust will not purchase securities that are offered in underwritings in
which any affiliate of Norwest or Schroder is a member of the underwriting or
selling group, except pursuant to procedures adopted by the Board pursuant to
Rule 10f-3 under the 1940 Act. Among other things, these procedures require
that the spread or commission paid in connection with such a purchase be
reasonable and fair, the purchase be at not more than the public offering price
prior to the end of the first business day after the date of the public offering
and that Norwest, Schroder or any affiliates thereof not participate in or
benefit from the sale to the Trust.
CAPITAL STOCK AND OTHER SECURITIES (ITEM 18 OF FORM N-1A)
Under the Trust Instrument, the Trustees are authorized to issue beneficial
interest in one or more separate and distinct series. Investments in each
Portfolio have no preference, preemptive, conversion or similar rights and are
fully paid and nonassessable, except as set forth below. Each investor in a
Portfolio is entitled to a vote in proportion to the amount of its investment
therein. Investors in the Portfolios will all vote together in certain
circumstances (e.g., election of the Trustees and ratification of auditors, as
required by the 1940 Act and the rules thereunder). One or more Portfolios
could control the outcome of these votes. Investors do not have cumulative
voting rights, and investors holding more than 50% of the aggregate interests in
the Trust or in a Portfolio, as the case may be, may control the outcome of
votes. The Trust is not required and has no current intention to hold annual
meetings of investors, but the Trust will hold special meetings of investors
when (1) a majority of the Trustees determines to do so or (2) investors holding
at least 10% of the interests in the Trust (or a Portfolio) request in writing
a meeting of investors in the Trust (or Portfolio). Except for certain matters
specifically described in the Trust Instrument, the Trustees may amend the
Trust's Trust Instrument without the vote of investors.
The Trust, with respect to a Portfolio, may enter into a merger or
consolidation, or sell all or substantially all of its assets, if approved by
the Trust's Board. A Portfolio may be terminated (1) upon liquidation and
distribution of its assets, if approved by the vote of a majority of the
Portfolio's outstanding voting securities (as defined in the 1940 Act) or (2) by
the Trustees on written notice to the Portfolio's investors. Upon liquidation
or dissolution of any Portfolio, the investors therein would be entitled to
share pro rate in its net assets available for distribution to investors.
The Trust is organized as a business trust under the laws of the State of
Delaware. The Trust's interestholders are not personally liable for the
obligations of the Trust under Delaware law. The Delaware Business Trust Act
provides that an interestholder of a Delaware business trust shall be entitled
to the same limitation of liability extended to shareholders of private
corporations for profit. However, no similar statutory or other authority
limiting business trust interestholder liability exists in many other states,
including Texas. As a result, to the extent that the Trust or an interestholder
is subject to the jurisdiction of courts in those states, the courts may not
apply Delaware law, and may thereby subject the Trust to liability. To guard
against this risk, the Trust Instrument of the Trust disclaims liability for
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acts or obligations of the Trust and requires that notice of such disclaimer be
given in each agreement, obligation and instrument entered into by the Trust or
its Trustees, and provides for indemnification out of Trust property of any
interestholder held personally liable for the obligations of the Trust. Thus,
the risk of an interestholder incurring financial loss beyond his investment
because of shareholder liability is limited to circumstances in which (1) a
court refuses to apply Delaware law, (2) no contractual limitation of liability
is in effect, and (3) the Trust itself is unable to meet its obligations. In
light of Delaware law, the nature of the Trust's business, and the nature of its
assets, the Board believes that the risk of personal liability to a Trust
interestholder is extremely remote.
PURCHASE, REDEMPTION AND PRICING OF SECURITIES (ITEM 19 OF FORM N-1A)
Interests in the Portfolios are issued solely in private placement transactions
that do not involve any "public offering" within the meaning of section 4(2) of
the 1933 Act. See "General Description of Registrant," "Purchase of
Securities," and "Redemption or Repurchase" in Part A.
The Trust was granted an exemptive order by the Commission which allows only
open-end management investment companies or their separate series for which
Norwest (or any person controlled by, controlling or under common control with
Norwest) acts as investment adviser (collectively, "Norwest Gateways") to invest
in Index Portfolio, Small Company Portfolio and International Portfolio II. The
origianl exemptive order which imposed several substantive conditions upon the
Trust and Norwest Advantage Funds was superceded by an exemptive order dated
August 6, 1996, permitting any Norwest Advantage Fund to invest all or a portion
of its assets in a Core Trust portfolio, irrespective of investment style, and
which removed certain restrictions imposed on the Trust thereby permitting the
Trust to accept investments from persons other than Norwest Advantage Funds.
TAX STATUS (ITEM 20 OF FORM N-1A)
Each Portfolio will be classified for federal income tax purposes as a separate
partnership that will not be a "publicly traded partnership." As a result, no
Portfolio will be subject to federal income tax; instead, each investor in a
Portfolio will be required to take into account in determining its federal
income tax liability its share of the Portfolio's income, gains, losses,
deductions, and credits, without regard to whether it has received any cash
distributions from the Portfolio. Each Portfolio also will not be subject to
Delaware income or franchise tax.
Each investor in a Portfolio will be deemed to own a proportionate share of the
Portfolio's assets, and to earn a proportionate share of the Portfolio's income,
for, among other things, purposes of determining whether the investor satisfies
the requirements to qualify as a regulated investment company ("RIC").
Accordingly, each Portfolio intends to conduct its operations so that its
investors that intend to qualify as RICs ("RIC investors") will be able to
satisfy all those requirements.
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Distributions to an investor from a Portfolio (whether pursuant to a partial or
complete withdrawal or otherwise) will not result in the investor's recognition
of any gain or loss for federal income tax purposes, except that (1) gain will
be recognized to the extent any cash that is distributed exceeds the investor's
basis for its interest in the Portfolio before the distribution, (2) income or
gain will be recognized if the distribution is in liquidation of the investor's
entire interest in the Portfolio and includes a disproportionate share of any
unrealized receivables held by the Portfolio, (3) loss will be recognized if a
liquidation distribution consists solely of cash and/or unrealized receivables,
and (4) gain or loss may be recognized on a distribution to an investor that
contributed property to the Portfolio. An investor's basis for its interest in
a Portfolio generally will equal the amount of cash and the basis of any
property it invests in the Portfolio, increased by the investor's share of the
Portfolio's net income and gains and decreased by (a) the amount of cash and the
basis of any property the Portfolio distributes to the investor and (b) the
investor's share of the Portfolio's losses.
Dividends and interest received by a Portfolio may be subject to income,
withholding, or other taxes imposed by foreign countries and; U.S. possessions
that would reduce the yield on its securities. Tax conventions between certain
countries and the United States may reduce or eliminate these foreign taxes,
however, and many foreign countries do not impose taxes on capital gains in
respect of investments by foreign investors.
Each Portfolio (except Index Portfolio) may invest in the stock of "passive
foreign investment companies" ("PFICs"). A PFIC is a foreign corporation that,
in general, meets either of the following tests: (1) at least 75% of its gross
income is passive or (2) an average of at least 50% of its assets produce, or
are held for the production of, passive income. Under certain circumstances, a
RIC that holds stock of a PFIC (including a RIC investor's indirect holding
thereof through its interest in a Portfolio) will be subject to federal income
tax on a portion of any "excess distribution" received on the stock or of any
gain on disposition of the stock (collectively "PFIC income"), plus interest
thereon, even if the RIC distributes the PFIC income as a taxable dividend to
its shareholders. The balance of the PFIC income will be included in the RIC's
investment company taxable income and, accordingly, will not be taxable to it to
the extent that income is distributed to its shareholders.
If a Portfolio invests in a PFIC and elects to treat the PFIC as a "qualified
electing fund," then in lieu of the foregoing tax and interest obligation, the
Portfolio would be required to include in income each year its pro rata share of
the qualified electing fund's annual ordinary earnings and net capital gain (the
excess of net long-term capital gain over net short-term capital loss) -- which
most likely would have to be distributed by the Portfolio's RIC investors to
satisfy the distribution requirements applicable to them -- even if those
earnings and gain were not received by it. In most instances it will be very
difficult, if not impossible, to make this election because of certain
requirements thereof.
Proposed regulations have been published pursuant to which certain RICs would be
entitled to elect to "mark to market" their stock in certain PFICs. "Marking to
market," in this context, means recognizing as gain for each taxable year the
excess, as of the end of that year, of the fair market value of each such PFIC's
stock over the adjusted basis in that stock (including mark-to-market gain for
each prior year for which an election was in effect).
The Portfolio's use of hedging strategies, such as writing (selling) and
purchasing options and futures and entering into forward contracts, involves
complex rules that will determine for income tax purposes the character and
timing of recognition of the gains and losses the Portfolios realize in
connection therewith. For each Portfolio, income from foreign currencies
(except certain gains therefrom that may be excluded by future regulations), and
income from transactions in hedging instruments derived by it with respect to
its business of investing in securities or foreign currencies, will qualify as
permissible income for its RIC investors under the requirement that at least 90%
of a RIC's gross income each taxable year consist of specified types of income.
However, income from the disposition by a Portfolio of hedging instruments
(other than those on foreign currencies) held for less than three months will be
subject to the requirement applicable to its RIC investors that less than 30% of
a RIC's gross income each taxable year consist of certain short-term gains
("Short-Short Limitation"). Income from the disposition of foreign currencies,
and hedging instruments on foreign currencies, that are not directly related to
a Portfolio's principal business of investing in securities (or options and
futures with respect thereto) also will be subject to the Short-Short Limitation
for its RIC investors if they are held for less than three months.
If a Portfolio satisfies certain requirements, any increase in value of a
position that is part of a "designated hedge" will be offset by any decrease in
value (whether realized or not) of the offsetting hedging position during the
period of the
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hedge for purposes of determining whether its RIC investors satisfy the Short-
Short Limitation. Thus, only the net gain (if any) from the designated hedge
will be included in gross income for purposes of that limitation. Each
Portfolio will consider whether it should seek to qualify for this treatment for
its hedging transactions. To the extent a Portfolio does not so qualify, it may
be forced to defer the closing out of certain hedging instruments beyond the
time when it otherwise would be advantageous to do so, in order for its RIC
investors to qualify or continue to qualify as RICs.
UNDERWRITERS (ITEM 21 OF FORM N-1A)
Forum Financial Services, Inc., Two Portland Square, Portland, Maine 04101, the
Portfolios' administrator, will serve as the Trust's placement agent. Forum
will receive no compensation for such placement agent services.
CALCULATION OF PERFORMANCE DATA (ITEM 22 OF FORM N-1A)
Not applicable.
FINANCIAL STATEMENTS (ITEM 23 OF FORM N-1A)
The statement of assets and liabilities for each Portfolio and the notes thereto
for the fiscal year ended May 31, 1996, and the report of the independent
accountants, Coopers & Lybrand L.L.P., thereon (included in the Annual Report of
the Trust), which are delivered along with this SAI, are incorporated herein by
reference.
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PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS.
(a) FINANCIAL STATEMENTS.
INCLUDED IN PART A
Not Applicable.
INCLUDED IN PART B
For Index Portfolio Small Company Portfolio, International Portfolio and
International Portfolio II (each a "Portfolio" and collectively the
"Portfolios"):
Audited financial statements for the fiscal year ended May 31, 1996,
including: statements of assets and liabilities, statements of operations,
statements of changes in net assets, notes to financial statements,
schedules of investments and independent auditor's report thereon. (the
Core Trust (Delaware) Annual Report with respect to the Portfolios as filed
with the Securities and Exchange Commission on August 6, 1996 as part of
the Annual Report of certain series of Norwest Advantage Funds that invest
in the Portfolios pursuant to Rule 30b2-1 under the Investment Company Act
of 1940, as amended) are incorporated herein by reference.
(b) EXHIBITS:
(1) Copy of Trust Instrument (See Note A)
(2) Not Applicable.
(3) Not Applicable.
(4) Not Applicable.
(5) (a) Investment Advisory Agreement between Registrant and Norwest Bank
Minnesota, N.A ("Norwest") (See Note B).
(b) Investment Advisory Agreement between Registrant and Schroder
Capital Management International Inc. (See Note B).
(c) Investment Advisory Agreement between Registrant and Linden Asset
Management, Inc. (See Note B).
<PAGE>
(d) Investment Advisory Agreement among Registrant, Linden Asset
Management, Inc. and Forum Advisors, Inc. (See Note B).
(e) Investment Advisory Agreement between Registrant and Forum
Advisors, Inc. (See Note B).
(f) Investment Advisory Agreement among Registrant, Forum Advisors,
Inc., and Linden Asset Management, Inc. relating to the Treasury
Portfolio of Registrant (See Note B).
(g) Investment Advisory Agreement between Registrant and Linden Asset
Management, Inc. relating to the Treasury Portfolio of
Registrant. (See Note B)
(6) Not required.
(7) Not Applicable.
(8) (a) Custodian Agreement between Registrant and Norwest (See Note B).
(b) Custodian Agreement between Registrant and The Chase Manhattan
Bank, N.A. ("Chase") (See Note B).
(c) Foreign Subcustody Agreement between Chase and various foreign
subcustodians (See Note A).
(d) Custodian Agreement between Registrant and Imperial Trust Company
(See Note B).
(e) Custodian Agreement between Registrant and First National Bank of
Boston, N.A. (See Note B).
(9) (a) Administration Agreement between Registrant and Forum Financial
Services, Inc. (See Note B).
(b) Fund Accounting Agreement between Registrant and Forum Financial
Corp. (See Note B).
(c) Placement Agent Agreement between Registrant and Forum. (See Note
B).
(d) Administration Agreement between Registrant and Forum with
respect to Treasury Cash Portfolio, Government Cash Portfolio,
Cash Portfolio and Treasury Portfolio. (See Note B).
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(e) Fund Accounting Agreement between Registrant and Forum Financial
Corp. with respect to Treasury Cash Portfolio, Government Cash
Portfolio, Cash Portfolio and Treasury Portfolio. (See Note B).
(f) Placement Agent Agreement between Registrant and Forum with
respect to Treasury Cash Portfolio, Government Cash Portfolio,
Cash Portfolio and Treasury Portfolio. (See Note B).
(10) Not required.
(11) Not required.
(12) Not required.
(13) Not Applicable.
(14) Not Applicable.
(15) Not Applicable.
(16) Not Applicable.
Note A: Filed in Registrant's Registration Statement on November 10, 1994.
Note B. Filed herewith.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
As of September 30, 1996 substantially all of Registrant's securities were owned
by various series of Norwest Advantage Funds, a registered open-end management
investment company.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES AS OF FEBRUARY 19, 1996
Title of Class of Shares
of Beneficial Interest Number of Holders
------------------------ -----------------
International Portfolio 2
International Portfolio II 6
Small Company Portfolio 6
Index Portfolio 5
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Treasury Cash Portfolio 2
Government Cash Portfolio 2
Cash Portfolio 2
Treasury Portfolio 2
ITEM 27. INDEMNIFICATION.
The Trust currently holds a directors' and officers' errors and omissions
insurance policy jointly with Forum Funds, the terms of which are consistent
with industry standards. The policy provides generally for the indemnification
against loss by the insured in connection with a judgment of liability in
certain litigation arising from the insured's wrongful act or an error, act or
omission by a person for whom the insured becomes legally responsible. The
policy provides coverage in the amount of $6,000,000. The policy premiums are
allocated between the Trust and Forum Funds based upon the pro rata share of
assets of each insured. The Trust's trustees and officers also are insured
under the Trust's fidelity bond purchased pursuant to Rule 17j-1 under the
Investment Company Act of 1940, as amended (the "Act").
The general effect of Article 5 of Registrant's Trust Instrument is to
indemnify existing or former trustees and officers of the Trust to the fullest
extent permitted by law against liability and expenses. There is no
indemnification if, among other things, any such person is adjudicated liable to
the Registrant or its shareholders by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
his office. This description is modified in its entirety by the provisions of
Article 5 of Registrant's Trust Instrument contained in this Registration
Statement as Exhibit 1 and incorporated herein by reference.
Provisions of each of Registrant's investment advisory agreements provide
that the respective investment adviser shall not be liable for any mistake of
judgment or in any event whatsoever, except for lack of good faith, provided
that nothing shall be deemed to protect, or purport to protect, the investment
adviser against any liability to Registrant or to Registrant's interestholders
to which the investment adviser would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of the investment
adviser's duties, or by reason of the investment adviser's reckless disregard of
its obligations and duties hereunder. This description is modified in its
entirety by the provisions of Registrant's Investment Advisory Agreements
contained in this Registration Statement as Exhibit 5 and incorporated herein by
reference.
As custodian to certain portfolios of the Trust, under Section 18 of its
custodian agreement Norwest is not liable for any action taken in good faith
reliance upon the advice or statements of certain experts. Under that
agreement, the Trust has agreed to indemnify and hold Norwest harmless for any
loss, claim, damage or expense arising out of the custodian relationship;
provided such loss, claim, damage or expense is not the direct result of the
Custodian's negligence or willful misconduct. This description is modified in
its entirety by the provisions of Registrant's Custodian Agreement contained in
this Registration Statement as Exhibit 8(a) and incorporated herein by
reference.
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The indemnification provisions set forth under Section 1 paragraphs (f) and
(g) of the Placement Agent Agreement between FFSI (defined as "Forum" under the
agreement) and the Trust, specifically provide as follows:
(f) The Trust agrees to indemnify, defend and hold Forum, its several
officers and directors, and any person who controls Forum within the
meaning of Section 15 of the 1933 Act or Section 20 of the Securities
Exchange Act of 1934 (the "1934 Act") (for purposes of this Section 1(f),
collectively, "Covered Persons") free and harmless from and against any and
all claims, demands, liabilities and any counsel fees incurred in
connection therewith) which any Covered Person may incur under the 1933
Act, the 1934 Act, common law or otherwise, arising out of or based on any
untrue statement of a material fact contained in any registration
statement, private placement memorandum or other offering material
("Offering Material") or arising out of or based on any omission to state a
material fact required to be stated in any Offering Material or necessary
to make the statements in any Offering Material not misleading, provided,
however, that the Trust's agreement to indemnify Covered Persons shall not
be deemed to cover any claims, demands, liabilities or expenses arising out
of any financial and other statements as are furnished in writing to the
Trust by Forum in its capacity as Placement Agent for use in the answers to
any items of any registration statement or in any statements made in any
Offering Material, or arising out of or based on any omission or alleged
omission to state a material fact in connection with the giving of such
information required to be stated in such answers or necessary to make the
answers not misleading; and further provided that the Trust's agreement to
Section 1(e)shall not be deemed to cover any liability to the Trust or its
investors to which a Covered Person would otherwise be subject by reason or
willful misfeasance, bad faith or gross negligence in the performance of
its duties, or by reason of a Covered Person's reckless disregard of its
obligations and duties under this Agreement. The Trust shall be notified
of any action brought against a Covered Person, such notification to be
given by letter or by telegram addressed to the Secretary of the Trust,
promptly after the summons or other first legal process shall have been
duly and completely served upon such Covered Person. The failure to notify
the Trust of any such action shall not relieve the Trust from any liability
except to the extent that the Trust shall have been prejudiced by such
failure, or from any liability that the Trust may have to the Covered
Person against whom such action is brought by reason of any such untrue
statement or omission, otherwise than on account of the Trust's indemnity
agreement contained in this Section 1(f). The Trust will be entitled to
assume the defense of any suit brought to enforce any such claim, demand or
liability, but in such case such defense shall be conducted by counsel
chosen by the Trust and approved by Forum, the defendant or defendants in
such suit shall bear the fees and expenses of any additional counsel
retained by any of them; but in case the Trust does not elect to assume the
defense of any such suit, or in case Forum reasonably does not approve of
counsel chosen by the Trust, the Trust will reimburse the Covered Person
named as defendant in such suit, for the fees and expenses of any
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counsel retained by Forum or such Covered Person. The Trust's
indemnification agreement contained in this Section (f) and the Trust's
representations and warranties in this Agreement shall remain operative and
in full force and effect regardless of any investigation made by or on
behalf of Covered Persons, and shall survive the delivery of any Interests.
This agreement of indemnity will inure exclusively to Covered Persons and
their successors. The Trust agrees to notify Forum promptly of the
commencement of any litigation or proceedings against the Trust or any of
its officers or Trustees in connection with the issue and sale of any
Interests.
(g) Forum agrees to indemnify, defend and hold the Trust, its several
officers and trustees, and any person who controls the Trust within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act (for
purposes of this Section 1(g) collectively, "Covered Persons") free and
harmless from and against any and all claims, demands, liabilities and
expenses (including the costs of investigating or defending such claims,
demands, liabilities and any counsel fees incurred in connection therewith)
that Covered Persons may incur under the 1933 Act, the 1934 Act, or common
law or otherwise, but only to the extent that such liability or expense
incurred by a Covered Person resulting from such claims or demands shall
arise out of or be based on any untrue statement of a material fact
contained in information furnished in writing by Forum in its capacity as
Placement Agent to the Trust for use in the answers to any of the items of
any registration statement or in any statements in any Offering Material or
shall arise out of or be based on any omission to state a material fact in
connection with such information furnished in writing by Forum to the Trust
required to be stated in such answers or necessary to make such information
not misleading. Forum shall be notified of any action brought against a
Covered Person, such notification to be given by letter or telegram
addressed to Forum, Attention: Legal Department, promptly after the summons
or other first legal process shall have been duly and completely served
upon such Covered Person. Forum shall have the right of first control of
the defense of the action with counsel of its own choosing satisfactory to
the Trust if such action is based solely on such alleged misstatement or
omission on Forum's part, and in any other event each Covered Person shall
have the right to participate in the defense or preparation of the defense
of any such action. The failure to so notify Forum of any such action
shall not relieve Forum from any liability except to the extent that Forum
shall have been prejudiced by such failure, or from any liability that
Forum may have to Covered Persons by reason of any such untrue or alleged
untrue statement, or omission or alleged omission, otherwise than on
account of Forum's indemnity agreement contained in this Section 1(g).
Insofar as indemnification for liability arising under the Securities Act
of 1933 may be permitted to trustees, officers and controlling persons of the
Trust pursuant to the foregoing provisions, or otherwise, the Trust has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities
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(other than the payment by the Trust of expenses incurred or paid by a trustee,
officer or controlling person of the Trust in the successful defense of any
action, suit or proceeding) is asserted by such trustee, officer or controlling
person in connection with the securities being registered, the Trust will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISERS.
NORWEST BANK MINNESOTA, N.A.
The description of Norwest Bank Minnesota, N.A. in Parts A and B of this
Registration Statement are incorporated by reference herein.
The following are the directors and principal executive officers of Norwest Bank
Minnesota, N.A., including their business connections which are of a substantial
nature. The address of Norwest Corporation, the parent of Norwest Bank
Minnesota, N.A., is Norwest Center, Sixth Street and Marquette Avenue,
Minneapolis, MN 55479. Unless otherwise indicated below, the principal business
address of any company with which the directors and principal executive officers
are connected is also Sixth Street and Marquette Avenue, Minneapolis, MN 55479.
James R. Campbell, Director, President and Chief Executive Officer, has
held this position for the last two years. Mr. Campbell is also Executive
Vice President of Norwest Corporation, Director and Chairman of Norwest
Investment Advisors, Inc., and a Director of Flore Properties, Inc.,
Centennial Investment Corporation and Peregrine Capital Management, Inc.,
which is located at LaSalle Plaza, 800 LaSalle Avenue, Suite 1850,
Minneapolis, Minnesota 55402-2056. Mr. Campbell is also a Director of a
number of non-profit organizations located in Minneapolis, Minnesota.
Within the last two years Mr. Campbell was a Director of Norwest Insurance,
Inc. and Norwest Equipment Finance, Inc.
Michael A. Graf, Controller and Cashier, also serves as Senior Vice
President and Controller of Norwest Corporation.
A. Rodney Boren, Jr., Executive Vice President, has served in various
capacities as an employee of Norwest Bank Minnesota, N.A. and/or its
affiliates during the last two years. Mr. Boren is also a Director of
Norwest Trust Company, New York, New York and Norwest Foundation.
P. Jay Kiedrowski, Executive Vice President, has served in various
capacities as an employee of Norwest Bank Minnesota, N.A. and/or its
affiliates since August 1987. Mr. Kiedrowski is also a Director and
Chairman of the Board of Norwest Investment Management, Inc. and President
of Norwest Investment Management, a part of Norwest.
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Scott A. Kisting, Director and Executive Vice President, is also a Director
of Norwest Insurance, Inc., IntraWest Insurance Company and Fidelity
National Life Insurance Company.
Edgar M. Morsman, Jr., Executive Vice President and Chief Lending Officer,
has served in various capacities as an employee of Norwest Bank Minnesota,
N.A. and/or its affiliates during the last two years. Mr. Morsman is also
a Director of Centennial Investment Corporation, First Interstate Equipment
Finance, Inc., Flore Properties, Inc., Norwest Credit, Inc., Norwest
Business Credit, Inc., R.D. Leasing, Inc. and Norwest Equipment Finance,
Inc., which is located at 733 Marquette Avenue, Suite 300, Minneapolis, MN
55479-2048.
Dharani P. Narayana, Executive Vice President, has served in various
capacities as an employee of Norwest Bank Minnesota, N.A. and/or its
affiliates during the last two years. Mr. Narayana is also a Director and
Chairman of Norwest Bank International, Director and Secretary of Norwest
Investments Limited, a Director of Norwest Bank International, Colorado, a
Director and Vice President of Norwest Bank International, Iowa, and a
Director of Norwest Bank International, Wisconsin. Mr. Narayana is also a
Director and Secretary of Minnetonka Overseas Investments Limited, and a
Director of Minnetonka Representaocoes Commerciais Ltda. and Nortico
Investments Ltd. all of which are located at Grand Cayman, Cayman Islands,
British West Indies.
William H. Queenan, Director, is also Executive Vice President of Norwest
Corporation.
John T. Thornton, Director, is also Executive Vice President and Chief
Financial Officer of Norwest Corporation. Mr. Thornton is also a Director
of Northern Prairie Indemnity, Limited, Grand Cayman, Cayman Islands,
British West Indies, a Director of Norwest Capital Markets, Inc. Mr.
Thornton is also a Director of Norwest Growth Fund, Inc., Norwest Venture
Capital Management, Inc. and Norwest Equity Capital, Inc., and Director,
President and Treasurer of Norwest Investors, Inc., and Director, President
and CEO of Norwest Limited, Inc., all located at 2800 Piper Jaffray Tower,
222 South Ninth Street, Minneapolis, MN 54402. Mr. Thornton is also
Director and President of Superior Guaranty Insurance Company and Norwest
Holding Company, and a Director of Bettendorf Asset Management, Inc. Mr.
Thornton is also a Director of Eau Claire Asset Management, Inc., Green Bay
Asset Management, Inc., Iowa Asset Management, Inc., LaCrosse Asset
Management, Inc., South Bend Asset Management, Inc., South Dakota Asset
Management, Inc., Waupun Asset Management, Inc., all located at 100 West
Commons Blvd., Suite 303, New Castle, DE 19720.
Richard C. Westergaard, Executive Vice President, has served in various
capacities as an employee of Norwest Bank Minnesota, N.A. and/or its
affiliates during the last two years. Mr.Westergaard is also a Director of
Norwest Business Credit, Inc., Norwest Credit, Inc., First Interstate
Equipment Finance, Inc. and R.D. Leasing, Inc. and a Director of Norwest
Equipment Finance, Inc. and Commonwealth Leasing Corporation, located at
Investors Building, 733 Marquette, Suite 300, Minneapolis, MN 55479-2048.
- C8 -
<PAGE>
Charles D. White, Senior Vice President, has served in various capacities
as an employee of Norwest Bank Minnesota, N.A. and/or its affiliates during
the last two years. Mr. White is also Treasurer and Chief Financial
Officer of Norwest Limited, Inc. Mr. White is also a Director of
Bettendorf Asset Management, Inc., Eau Claire Asset Management, Inc., Green
Bay Asset Management, Inc., IntraWest Asset Management, Inc., Iowa Asset
Management, Inc., LaCrosse Asset Management, Inc., South Bend Asset
Management, Inc., South Dakota Asset Management, Inc., and Waupun Asset
Management, Inc., located at 100 West Commons Boulevard, Suite 303, New
Castle, DE 19720.
SCHRODER CAPITAL MANAGEMENT INTERNATIONAL, INC.
The description of Schroder Capital Management International, Inc. ("Schroder")
in Parts A and B of the Registration Statement are incorporated by reference
herein.
The following are the directors and principal officers of Schroder, including
their business connections which are of a substantial nature. The address of
each company listed, unless otherwise noted, is 33 Gutter Lane, London EC2V 8AS,
United Kingdom. Schroder Capital Management International Limited ("Schroder
Ltd.") is a United Kingdom affiliate of Schroder which provides investment
management services international clients located principally in the United
States.
I. Peter Sedgwick, Chairman. Mr. Sedgwick is also Group Managing Director
- Investment Management of Schroders PLC, 120 Cheapside, London EC2V 6DS,
United Kingdom, the holding company of the various Schroder companies,
Chairman and Director of Schroder Ltd., Director and Chief Executive
Officer of Schroder Investment Management Limited, an investment management
company, Director of Schroder Investment Management (UK) Limited, Schroder
Personal Financial Management Limited, Schroder Investment Management
(Europe) Limited, Schroder Investment Trust Management Limited and Church,
Charity & Local Authorities Fund Managers Limited, 2 Fore Street, London
EC2Y 5AQ, United Kingdom, each an investment management company, and
Director, The Equitable Life Assurance Company, Walton Street, Aylesbury,
Bucks, United Kingdom, a life assurance company. Mr. Sedgwick is also a
director of various nominee companies and of various unit trust companies,
investment trusts and closed end investment companies for which Schroder
and/or its affiliates provide investment services.
David M. Salisbury, Chief Executive Officer. Mr. Salisbury is also the
Chief Executive Officer of Schroder Ltd. and Director of Dimensional Fund
Advisors Inc., 1299 Ocean Avenue, Santa Monica, California, an investment
advisory company and DFA Securities Inc., a broker dealer subsidiary of
Dimensional Fund Advisors Inc. located at the same address. Until October
1992 Mr. Salisbury was Chairman of Schroder Capital Distributors Inc.
("Schroder Distributors"), 787 Seventh Avenue, New York, New York, a broker
dealer. Mr. Salisbury is a director or former director of various
investment trust
- C9 -
<PAGE>
companies and closed end investment companies for which Schroder and/or its
affiliates provide investment services.
John S. Ager, Director. Mr. Ager is also a Director of Schroder Ltd.
Richard R. Foulkes, Deputy Chairman and Director. Mr. Foulkes is also a
Director of Schroder Ltd. and Schroder Distributors.
Laura E. Luckyn-Malone, Managing Director. Ms. Luckyn-Malone is also a
Director of Schroder Wertheim Investment Services, Inc. and Schroder Ltd.
and President and Director of a closed-end investment company for which
Schroder and/or its affiliates provide investment services. Director and
President of Schroder Advisors.
David J. Mumford, Director. Mr. Mumford is also a Director of Schroder
Ltd. and Schroder Investment Management Limited and is Chairman of
Schroders Guernsey Limited, St. Julian's Avenue, St. Peter Port, Guernsey
C.J., a Guernsey based bank, and Director of J. Henry Schroder Wagg &
Company Limited, 120 Cheapside London EC2V 6DS, United Kingdom, a United
Kingdom based bank.
Gavin D.L. Ralston, Director. Mr. Ralston is also a Director of Schroder
Ltd.
Mark J. Smith, Director. Mr. Smith is also Director, Schroder Ltd. and
Schroder Investment Management (Guernsey) Limited, an investment management
company, and Director and Vice President of Schroder Distributors and
Director and Vice President of Schroder Advisors. Mr. Smith is also a
director of various investment trusts and open end investment companies for
which Schroder and/or its affiliates provide investment services.
Ton F. Tija, Director. Mr. Tija is also a Director of Schroder Ltd.
John A. Trioano, Managing Director. Mr. Trioano is also a Director of
Schroder Ltd. and Schroder Advisors, Chairman of Schroder Distributors and
President and Director open end investment companies for which Schroder
and/or its affiliates provide investment services.
Jane P. Lucas, Director. Ms. Lucas is also a Director of Schroder Wertheim
Investment Services, Inc. and Assistant Director of Schroder Investment
Management, Ltd.
Kathleen Adams, Vice President. Ms. Adams is also Vice President of
Schroder Distributors.
Mark J. Astley, Vice President.
Andrew R. Barker, First Vice President. Mr. Barker is also First Vice
President of Schroder Ltd.
- C10 -
<PAGE>
David A.W. Butler, First Vice President. Mr. Butler is also First Vice
President and Treasurer of Schroder Ltd. and an officer of open end
investment companies for which Schroder and/or its affiliates provide
investment services.
Richard J. Conyers, Vice President. Mr. Conyers is also Vice President of
Schroder Ltd. and Manger of Schroder Investment Management Limited.
Heather F. Crighton, Fund Manger. Ms. Crighton is also Fund Manager of
Schroder Ltd.
Louise Crouset, First Vice President. Mr. Crouset is also First Vice
President of Schroder Ltd. and, until October 1993, was Vice President of
Wellington Management, an investment adviser.
Robert C. Davy, Director. Mr. Davy is also a Director of Schroder Ltd. and
an officer of open end investment companies for which Schroder and/or its
affiliates provide investment services.
Margaret H. Douglas-Hamilton, Secretary. Ms. Douglas-Hamilton is also
First Vice President and General Counsel of Schroders Incorporated
("Schroders Inc."), 787 Seventh Avenue, New York, New York, the holding
company for various United States based Schroder affiliates. Ms. Douglas-
Hamilton is also Secretary to various Schroder affiliates, including
Schroder Distributors.
Lyn M. Fox, Vice President.
Stephen M. Futrell, Comptroller. Mr. Futrell is Treasurer of Schroders
Inc., President, Treasurer and Director of Schroder Distributors and an
officer of various open end investment companies for which Schroder and/or
its affiliates provide investment services.
David Gibson, First Vice President. Mr. Gibson is also First Vice
President of Schroder Ltd. and Assistant Director of Schroder Investment
Management Limited.
Simon C. Hallett, Fund Manager. Mr. Hallett is also Fund Manager of
Schroder Ltd.
Nicholas J. A. Melhuish, Fund Manager. Mr. Melhuish is also Fund Manager of
Schroder Ltd.
Laurette J. Oat, First Vice President. Within the last two years, Ms. Oat
was a Senior Vice President of NatWest Investment Bank, 65 East 55th
Street, New York, New York 10002.
John Stainsby, First Vice President. Mr. Stainsby is also First Vice
President of Schroder Ltd.
- C11 -
<PAGE>
Fariba Talebi, First Vice President. Mr. Talebi is also an officer of
various open end investment companies for which Schroder and/or its
affiliates provide investment services.
Jan Kees van Heusde, First Vice President. Mr. van Heusde is also First
Vice President of Schroder Ltd.
Patrick Vermeulen, Vice First President. Mr. Vermeulen is also Vice First
President of Schroder Ltd.
Susan M. Belson, Vice President.
Alan Gilston, Vice President.
Abdallah Nauphal, First Vice President.
Ellen B. Sullivan, First Vice President.
Ira L. Unschuld, Vice President.
Catherine A. Mazza, Vice President. Ms. Mazza is also Senior Vice President
of Schroder Advisors.
Robert Jackowitz, Vice President. Mr. Jackowitz is also Vice President and
Treasurer of Schroder Wertheim Investment Services, Inc., Treasurer of
Schroder Advisors and Assistant Treasurer of Schroders Incorporated.
FORUM ADVISORS, INC.
The description of Forum Advisors, Inc. ("Forum Advisors") in Parts A and B of
the Registration Statement are incorporated by reference herein.
The following are the directors and principal officers of Forum Advisors, Two
Portland Square, Portland, Maine 04101, including their business connections
which are of a substantial nature..
John Y. Keffer, Director, President and Secretary.
Chairman and President of the Registrant; President and Secretary of
Forum Financial Services, Inc. and of Forum Financial Corp. Mr.
Keffer is a director and/or officer of various registered investment
companies for which Forum Financial Services, Inc. serves as manager,
administrator and/or distributor.
- C12 -
<PAGE>
David R. Keffer, Vice President and Treasurer.
Vice President, Assistant Secretary and Assistant Treasurer of the
Registrant; Vice President and Treasurer of Forum Financial Services,
Inc. and of Forum Financial Corp. Mr. Keffer is an officer of various
registered investment companies for which Forum Financial Services,
Inc. serves as manager, administrator and/or distributor.
LINDEN ASSET MANAGEMENT, INC.
The description of Linden Asset Management, Inc. ("Linden") in Parts A and B of
the Registration Statement are incorporated by reference herein.
The following are the directors and principal officers of Linden, 812 N. Linden
Street, Beverly Hills, California 90212, including their business connections
which are of a substantial nature..
Anthony R. Fischer, Jr., Director, President and Secretary.
President and Secretary of Linden Asset Management, Inc. since its
incorporation. Since September 1989 Mr. Fischer has managed his own
personal investments and performed independent research. Prior
thereto, he was Senior Vice President and Treasurer of United
California Savings Bank, Santa Ana, California.
ITEM 29. PRINCIPAL UNDERWRITERS.
(a) Not applicable.
(b) Not applicable.
(c) Not Applicable.
ITEM 30. LOCATION OF BOOKS AND RECORDS.
The majority of the accounts, books and other documents required to be
maintained by Section 31(a) of the Act and the Rules thereunder are maintained
at the offices of Forum Financial Services, Inc. and Forum Financial Corp., Two
Portland Square, Portland, Maine 04104. The records required to be maintained
under Rule 31a-1(b)(1) with respect to journals of receipts and deliveries of
securities and receipts and disbursements of cash are maintained at the offices
of the Registrant's custodians, as listed under "Custodian" in Part B to this
Registration Statement. The records required to be maintained under Rule 31a-
1(b)(5), (6) and (9) are maintained at the offices of Registrant's investment
advisers, as listed in Item 28 hereof.
ITEM 31. MANAGEMENT SERVICES.
Not Applicable.
- C13 -
<PAGE>
ITEM 32. UNDERTAKINGS.
Registrant undertakes to contain in its Trust Instrument provisions for
assisting shareholder communications and for the removal of trustees
substantially similar to those provided for in Section 16(c) of the Act, except
to the extent such provisions are mandatory or prohibited under applicable
Delaware law.
- C14 -
<PAGE>
SIGNATURE
Pursuant to the requirements of the Investment Company Act of 1940,
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereto duly authorized, in the City of Portland and
State of Maine on the 1st day of October, 1996.
CORE TRUST (DELAWARE)
By: /s/ Thomas G. Sheehan
--------------------------
Thomas G. Sheehan
Vice President
<PAGE>
INDEX TO EXHIBITS
Sequential
Exhibit Page Number
- ------- -----------
(5)(a) Investment Advisory Agreement to be between Registrant
and Norwest Bank Minnesota, N.A ("Norwest") . . . . . . . . .
(5)(b) Investment Advisory Agreement to be between Registrant
and Schroder Capital Management International Inc. . . . . .
(5)(c) Investment Advisory Agreement to be between Registrant
and Linden Asset Management, Inc. . . . . . . . . . . . . . .
(5)(d) Investment Advisory Agreement to be among Registrant,
Linden Asset Management, Inc. and Forum Advisors, Inc. . . .
(5)(e) Investment Advisory Agreement to be between Registrant
and Forum Advisors, Inc. . . . . . . . . . . . . . . . . . .
(5)(f) Investment Advisory Agreement to be among Registrant,
Forum Advisors, Inc., and Linden Asset Management, Inc.
relating to the Treasury Portfolio of Registrant. . . . . . .
(8)(a) Custodian Agreement to be between Registrant and Norwest.
Bank Minnesota, N.A. . . . . . . . . . . . . . . . . . . . .
(8)(b) Custodian Agreement to be between Registrant and The
Chase Manhattan Bank, N.A. . . . . . . . . . . . . . . . . .
(8)(d) Custodian Agreement to be between Registrant and Imperial
Trust Company. . . . . . . . . . . . . . . . . . . . . . . .
(8)(e) Custodian Agreement to be between Registrant and First
National Bank of Boston, N.A. . . . . . . . . . . . . . . . .
(9)(a) Administration Agreement to be between Registrant and
Forum Financial Services, Inc. . . . . . . . . . . . . . . .
(9)(b) Fund Accounting Agreement to be between Registrant and
Forum Financial Corp. . . . . . . . . . . . . . . . . . . . .
(9)(c) Placement Agent Agreement to be between Registrant and
Forum . . . . . . . . . . . . . . . . . . . . . . . . . . . .
<PAGE>
(9)(d) Administration Agreement to be between Registrant and
Forum with respect to Treasury Cash Portfolio,
Government Cash Portfolio, Cash Portfolio and
Treasury Portfolio. . . . . . . . . . . . . . . . . . . . . .
(9)(e) Fund Accounting Agreement to be between Registrant and
Forum Financial Corp. with respect to Treasury Cash
Portfolio, Government Cash Portfolio, Cash Portfolio and
Treasury Portfolio. . . . . . . . . . . . . . . . . . . . . .
(9)(f) Placement Agent Agreement to be between Registrant and
Forum with respect to Treasury Cash Portfolio, Government
Cash Portfolio, Cash Portfolio and Treasury Portfolio. . . .
<PAGE>
EXHIBIT (5)(a)
<PAGE>
EXHIBIT (5)(a)
CORE TRUST (DELAWARE)
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 9th day of November, 1994, between Core Trust
(Delaware) (the "Trust"), a business trust organized under the laws of the State
of Delaware with its principal place of business at Two Portland Square,
Portland, Maine 04101, and Norwest Bank Minnesota, N.A. (the "Adviser"), a
corporation organized under the laws of State of Delaware with its principal
place of business at 733 Marquette Avenue, Minneapolis, Minnesota 55479.
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended, (the "Act") as an open-end management investment company and is
authorized to issue interests (as defined in the Trust's Trust Instrument) in
separate series; and
WHEREAS, the Trust desires that the Adviser perform investment advisory
services for Index Portfolio and Small Company Portfolio (each a "Portfolio,"
and collectively the "Portfolios"), and the Adviser is willing to provide those
services on the terms and conditions set forth in this Agreement; and
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
SECTION 1. THE TRUST; DELIVERY OF DOCUMENTS
The Trust is engaged in the business of investing and reinvesting its
assets in securities of the type and in accordance with the limitations
specified in its Trust Instrument and Registration Statement filed with the
Securities and Exchange Commission (the "Commission") under the Act, as may be
supplemented from time to time, all in such manner and to such extent as may
from time to time be authorized by the Trust's Board of Trustees (the "Board").
The Trust is currently authorized to issue four series of interests and the
Board is authorized to issue interests in any number of additional series. The
Trust has delivered to the Adviser copies of the Trust's Trust Instrument and
Registration Statement and will from time to time furnish Adviser with any
amendments thereof.
SECTION 2. INVESTMENT ADVISER; APPOINTMENT
The Trust hereby employs Adviser, subject to the direction and control of
the Board, to manage the investment and reinvestment of the assets in each
Portfolio and, without limiting the generality of the foregoing, to provide
other services specified in Section 3 hereof.
<PAGE>
SECTION 3. DUTIES OF THE ADVISER
(a) The Adviser shall make decisions with respect to all purchases and
sales of securities and other investment assets in each Portfolio. To carry out
such decisions, the Adviser is hereby authorized, as agent and attorney-in-fact
for the Trust, for the account of, at the risk of and in the name of the Trust,
to place orders and issue instructions with respect to those transactions of the
Portfolios. In all purchases, sales and other transactions in securities for
the Portfolios, the Adviser is authorized to exercise full discretion and act
for the Trust in the same manner and with the same force and effect as the Trust
might or could do with respect to such purchases, sales or other transactions,
as well as with respect to all other things necessary or incidental to the
furtherance or conduct of such purchases, sales or other transactions.
(b) The Adviser will report to the Board at each meeting thereof all
changes in each Portfolio since the prior report, and will also keep the Board
informed of important developments affecting the Trust, the Portfolios and the
Adviser, and on its own initiative, will furnish the Board from time to time
with such information as the Adviser may believe appropriate for this purpose,
whether concerning the individual companies whose securities are included in the
Portfolios' holdings, the industries in which they engage, or the economic,
social or political conditions prevailing in each country in which the
Portfolios' maintain investments. The Adviser will also furnish the Board with
such statistical and analytical information with respect to securities in the
Portfolios as the Adviser may believe appropriate or as the Board reasonably may
request. In making purchases and sales of securities for the Portfolios, the
Adviser will bear in mind the policies set from time to time by the Board as
well as the limitations imposed by the Trust's Trust Instrument and Registration
Statement under the Act, the limitations in the Act and in the Internal Revenue
Code of 1986, as amended, in respect of regulated investment companies and the
investment objectives, policies and restrictions of the Portfolios.
(c) The Adviser will from time to time employ or associate with such
persons as the Adviser believes to be particularly fitted to assist in the
execution of the Adviser's duties hereunder, the cost of performance of such
duties to be borne and paid by the Adviser. No obligation may be incurred on
the Trust's behalf in any such respect.
(d) The Adviser shall maintain records relating to portfolio transactions
and the placing and allocation of brokerage orders as are required to be
maintained by the Trust under the Act. The Adviser shall prepare and maintain,
or cause to be prepared and maintained, in such form, for such periods and in
such locations as may be required by applicable law, all documents and records
relating to the services provided by the Adviser pursuant to this Agreement
required to be prepared and maintained by the Trust pursuant to the rules and
regulations of any national, state, or local government entity with jurisdiction
over the Trust, including the Commission and the Internal Revenue Service. The
books and records pertaining to the Trust which are in possession of the Adviser
shall be the property of the Trust. The Trust, or the Trust's authorized
representatives, shall have access to such books and records at all times during
the Adviser's normal business hours. Upon the reasonable request of the Trust,
copies of any such books and records shall be provided promptly by the Adviser
to the Trust or the Trust's authorized representatives.
<PAGE>
SECTION 4. EXPENSES
The Trust hereby confirms that the Trust shall be responsible and shall
assume the obligation for payment of all the Trust's expenses, including:
interest charges, taxes, brokerage fees and commissions; certain insurance
premiums; fees, interest charges and expenses of the Trust's custodian and
transfer agent; telecommunications expenses; auditing, legal and compliance
expenses; costs of the Trust's formation and maintaining its existence; costs of
preparing the Trust's registration statement, account application forms and
interestholder reports and delivering them to existing and prospective
interestholders; costs of maintaining books of original entry for portfolio and
fund accounting and other required books and accounts and of calculating the net
asset value of interests in the Trust; costs of reproduction, stationery and
supplies; compensation of the Trust's trustees, officers and employees and the
costs of other personnel performing services for the Trust who are not officers
of the Adviser or of Forum Financial Services, Inc. or affiliated persons of
either; costs of Trust meetings; registration fees and related expenses for
registration with the Commission and the securities regulatory authorities of
other countries in which the Trust's interests are sold; state securities law
registration fees and related expenses; and fees and out-of-pocket expenses
payable to Forum Financial Services, Inc. under any placement agent, management
or similar agreement.
SECTION 5. STANDARD OF CARE
The Trust shall expect of the Adviser, and the Adviser will give the Trust
the benefit of, the Adviser's best judgment and efforts in rendering its
services to the Trust, and as an inducement to the Adviser's undertaking these
services the Adviser shall not be liable hereunder for any mistake of judgment
or in any event whatsoever, except for lack of good faith, provided that nothing
herein shall be deemed to protect, or purport to protect, the Adviser against
any liability to the Trust or to the Trust's interestholders to which the
Adviser would otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence in the performance of the Adviser's duties hereunder, or by
reason of the Adviser's reckless disregard of its obligations and duties
hereunder. As used in this Section 5, the term "Adviser" shall include any
affiliates of the Adviser performing services for the Portfolios contemplated
hereby and directors, officers and employees of the Adviser as well as the
Adviser itself.
SECTION 6. COMPENSATION
In consideration of the foregoing, the Trust shall pay the Adviser, with
respect to each of the Portfolios, a fee at an annual rate as listed in Appendix
A hereto. Such fees shall be accrued by the Trust daily and shall be payable
monthly in arrears on the first day of each calendar month for services
performed hereunder during the prior calendar month.
SECTION 7. EFFECTIVENESS, DURATION AND TERMINATION
(a) This Agreement shall become effective with respect to a Portfolio
immediately upon approval by a majority of the outstanding voting interests of
that Portfolio.
<PAGE>
(b) This Agreement shall remain in effect with respect to a Portfolio for
a period of two years from the date of its effectiveness and shall continue in
effect for successive twelve-month periods (computed from each anniversary date
of the approval) with respect to the Portfolio; provided that such continuance
is specifically approved at least annually (i) by the Board or by the vote of a
majority of the outstanding voting interests of the Portfolio, and, in either
case, (ii) by a majority of the Trust's trustees who are not parties to this
Agreement or interested persons of any such party (other than as trustees of the
Trust); provided further, however, that if this Agreement or the continuation of
this Agreement is not approved as to a Portfolio, the Adviser may continue to
render to that Portfolio the services described herein in the manner and to the
extent permitted by the Act and the rules and regulations thereunder.
(c) This Agreement may be terminated with respect to a Portfolio at any
time, without the payment of any penalty, (i) by the Board or by a vote of a
majority of the outstanding voting securities of the Portfolio on 60 days'
written notice to the Adviser or (ii) by the Adviser on 60 days' written notice
to the Trust. This agreement shall terminate upon assignment.
SECTION 8. ACTIVITIES OF THE ADVISER
Except to the extent necessary to perform its obligations hereunder,
nothing herein shall be deemed to limit or restrict the Adviser's right, or the
right of any of the Adviser's officers, directors or employees who may also be a
trustee, officer or employee of the Trust, or persons otherwise affiliated
persons of the Trust to engage in any other business or to devote time and
attention to the management or other aspects of any other business, whether of a
similar or dissimilar nature, or to render services of any kind to any other
corporation, trust, firm, individual or association.
SECTION 9. LIMITATION OF INTERESTHOLDER AND TRUSTEE LIABILITY
The Trustees of the Trust and the interestholders of each Portfolio shall
not be liable for any obligations of the Trust or of the Portfolios under this
Agreement, and the Adviser agrees that, in asserting any rights or claims under
this Agreement, it shall look only to the assets and property of the Trust or
the Portfolio to which the Adviser's rights or claims relate in settlement of
such rights or claims, and not to the Trustees of the Trust or the
interestholders of the Portfolios.
SECTION 10. MISCELLANEOUS
(a) No provisions of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by both
parties hereto and, if required by the Act, by a vote of a majority of the
outstanding voting interests of the Portfolios thereby affected. No amendment
to this Agreement or the termination of this Agreement with respect to a
Portfolio shall effect this Agreement as it pertains to any other Portfolio.
<PAGE>
(b) If any part, term or provision of this Agreement is held to be
illegal, in conflict with any law or otherwise invalid, the remaining portion or
portions shall be considered severable and not be affected, and the rights and
obligations of the parties shall be construed and enforced as if the Agreement
did not contain the particular part, term or provision held to be illegal or
invalid.
(c) This Agreement may be executed by the parties hereto on any number of
counterparts, and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
(d) Section headings in this Agreement are included for convenience only
and are not to be used to construe or interpret this Agreement.
(e) This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the State of Delaware.
(f) The terms "vote of a majority of the outstanding voting interests,"
"interested person," "affiliated person" and "assignment" shall have the
meanings ascribed thereto in the Act to the terms "vote of a majority of the
outstanding voting securities," "interested person," "affiliated person" and
"assignment," respectively.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
CORE TRUST (DELAWARE)
------------------------------
John Y. Keffer
President
NORWEST BANK MINNESOTA, N.A.
------------------------------
P. Jay Kiedrowski
Executive Vice President
<PAGE>
CORE TRUST (DELAWARE)
INVESTMENT ADVISORY AGREEMENT
APPENDIX A
ANNUAL FEE AS A % OF
THE AVERAGE DAILY
PORTFOLIOS OF THE TRUST NET ASSETS OF THE PORTFOLIO
Index Portfolio 0.15%
Small Company Portfolio 0.90%
<PAGE>
EXHIBIT (5)(b)
<PAGE>
EXHIBIT (5)(b)
CORE TRUST (DELAWARE)
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 9th day of November, 1994, between Core Trust
(Delaware) (the "Trust"), a business trust organized under the laws of the State
of Delaware with its principal place of business at Two Portland Square,
Portland, Maine 04101, and Schroder Capital Management International Inc. (the
"Adviser"), a corporation organized under the laws of the State of New York with
its principal place of business at One State Street, New York, New York.
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended, (the "Act") as an open-end management investment company and is
authorized to issue interests (as defined in the Trust's Trust Instrument) in
separate series;
WHEREAS, the Adviser provides investment advice and is registered with the
Securities and Exchange Commission (the "SEC") as an investment adviser under
the Investment Advisers Act of 1940, as amended (the "Advisers Act"), and is
registered with the United Kingdom Investment Management Regulatory Organization
("IMRO");
WHEREAS, the Trust desires that the Adviser perform investment advisory
services for International Portfolio and International Portfolio II (each a
"Portfolio," and collectively the "Portfolios"), and the Adviser is willing to
provide those services on the terms and conditions set forth in this Agreement;
and
WHEREAS, the Adviser is willing to render such investment advisory services
to the Portfolios;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
SECTION 1. THE TRUST; DELIVERY OF DOCUMENTS
The Trust is engaged in the business of investing and reinvesting its
assets in securities of the type and in accordance with the limitations
specified in its Trust Instrument and Registration Statement filed with the
Securities and Exchange Commission (the "Commission") under the Act, as may be
supplemented from time to time, all in such manner and to such extent as may
from time to time be authorized by the Trust's Board of Trustees (the "Board").
The Trust is currently authorized to issue four series of interests and the
Board is authorized to issue interests in any number of additional series. The
Trust has delivered to the Adviser copies of the Trust's Trust Instrument and
Registration Statement and will from time to time furnish Adviser with any
amendments thereof.
<PAGE>
SECTION 2. INVESTMENT ADVISER; APPOINTMENT
The Trust hereby employs Adviser, subject to the direction and control of
the Board, to manage the investment and reinvestment of the assets in each
Portfolio and, without limiting the generality of the foregoing, to provide
other services specified in Section 3 hereof.
SECTION 3. DUTIES OF THE ADVISER
(a) The Adviser shall make decisions with respect to all purchases and
sales of securities and other investment assets in the Portfolios. To carry out
such decisions, the Adviser is hereby authorized, as agent and attorney-in-fact
for the Trust, for the account of, at the risk of and in the name of the Trust,
to place orders and issue instructions with respect to those transactions of the
Portfolios. In all purchases, sales and other transactions in securities for
the Portfolios, the Adviser is authorized to exercise full discretion and act
for the Trust in the same manner and with the same force and effect as the Trust
might or could do with respect to such purchases, sales or other transactions,
as well as with respect to all other things necessary or incidental to the
furtherance or conduct of such purchases, sales or other transactions.
(b) The Adviser will report to the Board at each meeting thereof all
changes in the Portfolios since the prior report, and will also keep the Board
informed of important developments affecting the Trust, the Portfolios and the
Adviser, and on its own initiative, will furnish the Board from time to time
with such information as the Adviser may believe appropriate for this purpose,
whether concerning the individual companies whose securities are included in a
Portfolio's holdings, the industries in which they engage, or the economic,
social or political conditions prevailing in each country in which the Portfolio
maintains investments. The Adviser will also furnish the Board with such
statistical and analytical information with respect to securities in the
Portfolios as the Adviser may believe appropriate or as the Board reasonably may
request. In making purchases and sales of securities for a Portfolio, the
Adviser will bear in mind the policies set from time to time by the Board as
well as the limitations imposed by the Trust's Trust Instrument and Registration
Statement under the Act, the limitations in the Act and in the Internal Revenue
Code of 1986, as amended, in respect of regulated investment companies and the
investment objectives, policies and restrictions of the Portfolios.
(c) The Adviser will from time to time employ or associate with such
persons as the Adviser believes to be particularly fitted to assist in the
execution of the Adviser's duties hereunder, the cost of performance of such
duties to be borne and paid by the Adviser. No obligation may be incurred on
the Trust's behalf in any such respect.
(d) The Adviser shall maintain records for each Portfolio relating to
portfolio transactions and the placing and allocation of brokerage orders as are
required to be maintained by the Trust under the Act. The Adviser shall prepare
and maintain, or cause to be prepared and maintained, in such form, for such
periods and in such locations as may be required by applicable law, all
documents and records relating to the services provided by the Adviser pursuant
to this Agreement required to be prepared and maintained by the Trust pursuant
to the rules and regulations of any national, state, or local government entity
with jurisdiction over the Trust,
<PAGE>
including the Commission and the Internal Revenue Service. The books and
records pertaining to the Trust which are in possession of the Adviser shall be
the property of the Trust. The Trust, or the Trust's authorized
representatives, shall have access to such books and records at all times during
the Adviser's normal business hours. Upon the reasonable request of the Trust,
copies of any such books and records shall be provided promptly by the Adviser
to the Trust or the Trust's authorized representatives.
SECTION 4. EXPENSES
The Trust hereby confirms that the Trust shall be responsible and shall
assume the obligation for payment of all the Trust's expenses, including:
interest charges, taxes, brokerage fees and commissions; certain insurance
premiums; fees, interest charges and expenses of the Trust's custodian and
transfer agent; telecommunications expenses; auditing, legal and compliance
expenses; costs of the Trust's formation and maintaining its existence; costs of
preparing the Trust's registration statement, account application forms and
interestholder reports and delivering them to existing and prospective
interestholders; costs of maintaining books of original entry for portfolio and
fund accounting and other required books and accounts and of calculating the net
asset value of interests in the Trust; costs of reproduction, stationery and
supplies; compensation of the Trust's trustees, officers and employees and costs
of other personnel performing services for the Trust who are not officers of the
Adviser or of Forum Financial Services, Inc. or affiliated persons of either;
costs of Trust meetings; registration fees and related expenses for registration
with the Commission and the securities regulatory authorities of other countries
in which the Trust's interests are sold; state securities law registration fees
and related expenses; and fees and out-of-pocket expenses payable to Forum
Financial Services, Inc. under any placement agent, management or similar
agreement.
SECTION 5. STANDARD OF CARE
(a) The Trust shall expect of the Adviser, and the Adviser will give the
Trust the benefit of, the Adviser's best judgment and efforts in rendering its
services to the Trust, and as an inducement to the Adviser's undertaking these
services the Adviser shall not be liable hereunder for any mistake of judgment
or in any event whatsoever, except for lack of good faith, provided that nothing
herein shall be deemed to protect, or purport to protect, the Adviser against
any liability to the Trust or to the Trust's interestholders to which the
Adviser would otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence in the performance of the Adviser's duties hereunder, or by
reason of the Adviser's reckless disregard of its obligations and duties
hereunder. As used in this Section 5, the term "Adviser" shall include any
affiliates of the Adviser performing services for the Portfolios contemplated
hereby and directors, officers and employees of the Adviser as well as the
Adviser itself.
(b) The Adviser shall not be liable for any losses caused by disturbances
of its operations by virtue of force majeure, war, riot, or damage caused by
nature or due to other events for which the Adviser is not responsible (e.g.,
strike, lock-out or losses caused by the imposition of foreign exchange
controls, expropriation of assets or other acts of domestic or foreign
authorities) except under the circumstances provided for in Section 5(a).
<PAGE>
The presence of exculpatory language in this Agreement shall not be deemed
by the Trust, the Portfolios, the Adviser, or any other party appointed pursuant
to this Agreement, including without limitation any custodian, as in any way
limiting causes of action and remedies which may, notwithstanding such language,
be available to the Portfolios either under common law or statutory law
principles applicable to fiduciary relationships or under the Federal securities
laws.
SECTION 6. COMPENSATION
In consideration of the foregoing, the Trust shall pay the Adviser, with
respect to each of the Portfolios, a fee at an annual rate as listed in Appendix
A hereto. Such fees shall be accrued by the Trust daily and shall be payable
monthly in arrears on the first day of each calendar month for services
performed hereunder during the prior calendar month.
SECTION 7. EFFECTIVENESS, DURATION, AND TERMINATION
(a) This Agreement shall become effective with respect to a Portfolio
immediately upon approval by a majority of the outstanding voting interests of
that Portfolio.
(b) This Agreement shall remain in effect with respect to a Portfolio for
a period of two years from the date of its effectiveness and shall continue in
effect for successive twelve-month periods (computed from each anniversary date
of the approval) with respect to the Portfolio; provided that such continuance
is specifically approved at least annually (i) by the Board or by the vote of a
majority of the outstanding voting interests of the Portfolio, and, in either
case, (ii) by a majority of the Trust's trustees who are not parties to this
Agreement or interested persons of any such party (other than as trustees of the
Trust); provided further, however, that if this Agreement or the continuation of
this Agreement is not approved as to a Portfolio, the Adviser may continue to
render to that Portfolio the services described herein in the manner and to the
extent permitted by the Act and the rules and regulations thereunder.
(c) This Agreement may be terminated with respect to a Portfolio at any
time, without the payment of any penalty, (i) by the Board or by a vote of a
majority of the outstanding voting interests of a Portfolio on 60 days' written
notice to the Adviser or (ii) by the Adviser on 60 days' written notice to the
Trust. This agreement shall terminate upon assignment.
SECTION 8. ACTIVITIES OF THE ADVISER
Except to the extent necessary to perform its obligations hereunder,
nothing herein shall be deemed to limit or restrict the Adviser's right, or the
right of any of the Adviser's officers, directors or employees who may also be a
trustee, officer or employee of the Trust, or persons otherwise affiliated
persons of the Trust to engage in any other business or to devote time and
attention to the management or other aspects of any other business, whether of a
similar or dissimilar nature, or to render services of any kind to any other
corporation, trust, firm, individual or association. It is specifically
understood that officers, directors and employees of
<PAGE>
the Adviser and its affiliates may continue to engage in providing portfolio
management services and advice to other investment companies, whether or not
registered, and to other investment advisory clients. When other clients of the
Adviser desire to purchase or sell a security at the same time such security is
purchased or sold for the Portfolios, such purchases and sales will, to the
extent feasible, be allocated among the Portfolios and such clients in a manner
believed by the Adviser to be equitable to the Portfolios and such clients.
SECTION 9. LIMITATION OF INTERESTHOLDER AND TRUSTEE LIABILITY
The Trustees of the Trust and the interestholders of the Portfolios shall
not be liable for any obligations of the Trust or of the Portfolios under this
Agreement, and the Adviser agrees that, in asserting any rights or claims under
this Agreement, it shall look only to the assets and property of the Trust or
the Portfolios to which the Adviser's rights or claims relate in settlement of
such rights or claims, and not to the Trustees of the Trust or the
interestholders of the Portfolios.
SECTION 10. NOTICE
Any notice or other communication required to be given pursuant to this
Agreement shall be in writing or by telex and shall be effective upon receipt.
Notices and communications shall be given, if to the Trust, at:
Two Portland Square
Portland, Maine 04101
Attention: Secretary
and if to the Adviser, at:
Schroder Capital Management International Inc.
787 Seventh Avenue, 29th Floor
New York, New York 10019
Attention: Mark J. Smith
SECTION 11. MISCELLANEOUS
(a) No provisions of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by both
parties hereto and, if required by the Act, by a vote of a majority of the
outstanding voting interests of the Portfolios thereby affected. No amendment
to this Agreement or the termination of this Agreement with respect to a
Portfolio shall effect this Agreement as it pertains to any other Portfolio.
(b) If any part, term or provision of this Agreement is held to be
illegal, in conflict with any law or otherwise invalid, the remaining portion or
portions shall be considered severable and
<PAGE>
not be affected, and the rights and obligations of the parties shall be
construed and enforced as if the Agreement did not contain the particular part,
term or provision held to be illegal or invalid.
(c) This Agreement may be executed by the parties hereto on any number of
counterparts, and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
(d) Section headings in this Agreement are included for convenience only
and are not to be used to construe or interpret this Agreement.
(e) This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the State of Delaware.
(f) The Adviser confirms that each Portfolio is a "business customer" as
defined by IMRO.
(g) The terms "vote of a majority of the outstanding voting interests,"
"interested person," "affiliated person" and "assignment" shall have the
meanings ascribed thereto in the Act to the terms "vote of a majority of the
outstanding voting securities," "interested person," "affiliated person" and
"assignment," respectively.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
CORE TRUST (DELAWARE)
------------------------------
John Y. Keffer
President
SCHRODER CAPITAL MANAGEMENT
INTERNATIONAL INC.
------------------------------
Mark J. Smith
Director
<PAGE>
CORE TRUST (DELAWARE)
INVESTMENT ADVISORY AGREEMENT
Appendix A
Annual Fee as a % of
the Average Daily
Portfolios of the Trust Net Assets of the Portfolio
- ----------------------- ---------------------------
International Portfolio 0.45%
International Portfolio II 0.45%
<PAGE>
EXHIBIT (5)(c)
<PAGE>
EXHIBIT (5)(c)
CORE TRUST (DELAWARE)
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 1st day of September, 1995, between Core Trust
(Delaware) (the "Trust"), a business trust organized under the laws of the State
of Delaware with its principal place of business at Two Portland Square,
Portland, Maine 04101, and Linden Asset Management, Inc. (the "Adviser"), a
corporation organized under the laws of State of California with its principal
place of business at 812 North Linden Drive, Beverly Hills, California 90210.
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended, (the "Act") as an open-end management investment company and is
authorized to issue interests (as defined in the Trust's Trust Instrument) in
separate series; and
WHEREAS, the Trust desires that the Adviser perform investment advisory
services for Treasury Cash Portfolio, Government Cash Portfolio and Cash
Portfolio (each a "Portfolio," and collectively the "Portfolios"), and the
Adviser is willing to provide those services on the terms and conditions set
forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
SECTION 1. THE TRUST; DELIVERY OF DOCUMENTS
The Trust is engaged in the business of investing and reinvesting its
assets in securities of the type and in accordance with the limitations
specified in its Trust Instrument and Registration Statement filed with the
Securities and Exchange Commission (the "Commission") under the Act, as may be
supplemented from time to time, all in such manner and to such extent as may
from time to time be authorized by the Trust's Board of Trustees (the "Board").
The Trust is currently authorized to issue eight series of interests and the
Board is authorized to issue interests in any number of additional series. The
Trust has delivered to the Adviser copies of the Trust's Trust Instrument and
Registration Statement and will from time to time furnish the Adviser with any
amendments thereof.
SECTION 2. INVESTMENT ADVISER; APPOINTMENT
The Trust hereby employs the Adviser, subject to the direction and
supervision of the Board, to manage the investment and reinvestment of the
assets in each Portfolio and, without limiting the generality of the foregoing,
to provide other services specified in Section 3 hereof.
<PAGE>
SECTION 3. DUTIES OF THE ADVISER
(a) The Adviser shall make decisions with respect to all purchases and
sales of securities and other investment assets in each Portfolio. To carry out
such decisions, the Adviser is hereby authorized, as agent and attorney-in-fact
for the Trust, for the account of, at the risk of and in the name of the Trust,
to place orders and issue instructions with respect to those transactions of the
Portfolios. In all purchases, sales and other transactions in securities for
the Portfolios, the Adviser is authorized to exercise full discretion and act
for the Trust in the same manner and with the same force and effect as the Trust
might or could do with respect to such purchases, sales or other transactions,
as well as with respect to all other things necessary or incidental to the
furtherance or conduct of such purchases, sales or other transactions.
(b) The Adviser will report to the Board at each meeting thereof all
changes in each Portfolio since the prior report, and will also keep the Board
informed of important developments affecting the Trust, the Portfolios and the
Adviser, and on its own initiative, will furnish the Board from time to time
with such information as the Adviser may believe appropriate for this purpose,
whether concerning the individual companies whose securities are included in the
Portfolios' holdings, the industries in which they engage, or the economic,
social or political conditions prevailing in each country in which the
Portfolios' maintain investments. The Adviser will also furnish the Board with
such statistical and analytical information with respect to securities in the
Portfolios as the Adviser may believe appropriate or as the Board reasonably may
request.
(c) In making purchases and sales of securities for the Portfolios, the
Adviser will follow and comply with the policies set from time to time by the
Board as well as the limitations imposed by the Trust's Trust Instrument and
Registration Statement under the Act, the limitations in the Act and in the
Internal Revenue Code of 1986, as amended, in respect of regulated investment
companies and the investment objectives, policies and restrictions of the
Portfolios.
(d) The Adviser will from time to time employ or associate with such
persons as the Adviser believes to be particularly qualified to assist in the
execution of the Adviser's duties hereunder, the cost of performance of such
duties to be borne and paid by the Adviser. No obligation may be incurred on
the Trust's behalf in any such respect.
(e) The Adviser shall either monitor the performance of brokers, dealers
and other persons who introduce or execute purchases, sales and other
transactions of securities and other investment assets of the Portfolios or
select an introducing broker who shall, as part of its transaction charges,
monitor such performance. Such persons may be affiliated with the Adviser, any
investment subadviser or other affiliates of the Trust to the extent permitted
by the Act.
(f) The Adviser shall maintain records relating to portfolio transactions
and the placing and allocation of brokerage orders as are required to be
maintained by the Trust under the Act. The Adviser shall prepare and maintain,
or cause to be prepared and maintained, in such form, for such periods and in
such locations as may be required by applicable law, all documents
<PAGE>
and records relating to the services provided by the Adviser pursuant to this
Agreement required to be prepared and maintained by the Trust pursuant to the
rules and regulations of any national, state, or local government entity with
jurisdiction over the Trust, including the Commission and the Internal Revenue
Service. The books and records pertaining to the Trust which are in possession
of the Adviser shall be the property of the Trust. The Trust, or the Trust's
authorized representatives, shall have access to such books and records at all
times during the Adviser's normal business hours. Upon the reasonable request
of the Trust, copies of any such books and records shall be provided promptly by
the Adviser to the Trust or the Trust's authorized representatives.
SECTION 4. SUBADVISERS
The Adviser may carry out any of its obligations under this Agreement by
employing, subject to the Board's supervision, one or more persons who are
registered as investment advisers pursuant to the Investment Advisers Act of
1940, as amended, (the "Advisers Act") or who are exempt from registration
thereunder ("SubAdvisers"). Each SubAdviser's employment will be evidenced by a
separate written agreement approved by the Trustees of the Trust and the
interestholders of the applicable Portfolios. The Adviser shall not be liable
for any act or omission of any SubAdviser except with respect to matters as to
which the Adviser specifically assumes responsibility in writing.
SECTION 5. EXPENSES
The Trust hereby confirms that the Trust shall be responsible and shall
assume the obligation for payment of all the Trust's expenses, including:
interest charges, taxes, brokerage fees and commissions; certain insurance
premiums; fees, interest charges and expenses of the Trust's custodian and
transfer agent; telecommunications expenses; auditing, legal and compliance
expenses; costs of the Trust's formation and maintaining its existence; costs of
preparing the Trust's registration statement, account application forms and
interestholder reports and delivering them to existing and prospective
interestholders; costs of maintaining books of original entry for portfolio and
fund accounting and other required books and accounts and of calculating the net
asset value of interests in the Trust; costs of reproduction, stationery and
supplies; compensation of the Trust's trustees, officers and employees and the
costs of other personnel performing services for the Trust; costs of Trust
meetings; registration fees and related expenses for registration with the
Commission and the securities regulatory authorities of other countries in which
the Trust's interests are sold; state securities law registration fees and
related expenses; and fees and out-of-pocket expenses payable to Forum Financial
Services, Inc. under any placement agent, management or similar agreement.
SECTION 6. STANDARD OF CARE
(a) The Adviser shall give the Trust the benefit of its best judgment and
efforts in rendering its services to the Trust and shall not be liable for error
of judgment or mistake of law, for any loss arising out of any investment, or in
any event whatsoever, provided that nothing herein shall be deemed to protect,
or purport to protect, the Adviser against any liability to the
<PAGE>
Trust or to the security holders of the Trust to which it would otherwise be
subject by reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties hereunder, or by reason of reckless disregard of its
obligations and duties hereunder. No provision of this Agreement shall be
construed to protect any Trustee or officer of the Trust, or the Adviser, from
liability in violation of Sections 17(h), 17(i) or 36(b) of the Act.
(b) The Adviser shall not be held responsible for any loss incurred by
reason of any act or omission of any dealer, broker or custodian; provided that
such loss in not the result of the Adviser's willful misfeasance, bad faith or
gross negligence in the performance of its duties hereunder, or the result of
the Adviser's reckless disregard of its obligations and duties hereunder.
(c) This Section shall survive the termination of this Agreement and shall
be binding upon the Trust's and the Adviser's successors and personal
representatives.
SECTION 7. COMPENSATION
For the services provided by the Adviser pursuant to this Agreement, the
Trust shall pay the Adviser, with respect to each of the Portfolios, a fee based
upon the total average daily net assets of the Portfolios ("Total Portfolio
Assets"). The Trust shall pay the Adviser a total fee of 0.05% for the first
$200 million of Total Portfolio Assets, 0.03% of the next $300 million of Total
Portfolio Assets, and 0.02% of the remaining Total Portfolio Assets. Such fees
shall be accrued by the Trust daily with respect to each Portfolio in the
proportion that Portfolio's average daily net assets bear to Total Portfolio
Assets and shall be payable monthly in arrears on the first day of each calendar
month. Upon the termination of this Agreement, the Trust shall pay to the
Adviser such compensation as shall be payable prior to the effective date of
such termination. The Adviser shall be paid a minimum annual fee of $50,000 for
its services to the Trust with respect to the Portfolios. To the extent the
Adviser has delegated its responsibilities with respect to a Portfolio to a
SubAdviser, the Adviser shall pay the advisory fee to that SubAdviser.
SECTION 8. EFFECTIVENESS, DURATION AND TERMINATION
(a) This Agreement shall become effective with respect to a Portfolio
immediately upon approval by a majority of the outstanding voting interests of
that Portfolio.
(b) This Agreement shall remain in effect with respect to a Portfolio for
a period of two years from the date of its effectiveness and shall continue in
effect for successive twelve-month periods (computed from each anniversary date
of the approval) with respect to the Portfolio; provided that such continuance
is specifically approved at least annually (i) by the Board or by the vote of a
majority of the outstanding voting interests of the Portfolio, and, in either
case, (ii) by a majority of the Trust's trustees who are not parties to this
Agreement or interested persons of any such party (other than as trustees of the
Trust); provided further, however, that if this Agreement or the continuation of
this Agreement is not approved as to a
<PAGE>
Portfolio, the Adviser may continue to render to that Portfolio the services
described herein in the manner and to the extent permitted by the Act and the
rules and regulations thereunder.
(c) This Agreement may be terminated with respect to a Portfolio at any
time, without the payment of any penalty, (i) by the Board or by a vote of a
majority of the outstanding voting securities of the Portfolio on 60 days'
written notice to the Adviser or (ii) by the Adviser on 60 days' written notice
to the Trust. This agreement shall terminate upon assignment.
SECTION 9. ACTIVITIES OF THE ADVISER
(a) Except to the extent necessary to perform its obligations hereunder,
nothing herein shall be deemed to limit or restrict the Adviser's right, or the
right of any of the Adviser's officers, directors or employees who may also be a
trustee, officer or employee of the Trust, or persons otherwise affiliated
persons of the Trust to engage in any other business or to devote time and
attention to the management or other aspects of any other business, whether of a
similar or dissimilar nature, or to render services of any kind to any other
corporation, trust, firm, individual or association.
(b) The Adviser represents that it is currently registered, and will
during the entire period this Agreement is in effect be registered, as an
investment adviser under the Advisers Act.
SECTION 10. LIMITATION OF INTERESTHOLDER AND TRUSTEE LIABILITY
The Trustees of the Trust and the interestholders of each Portfolio shall
not be liable for any obligations of the Trust or of the Portfolios under this
Agreement, and the Adviser agrees that, in asserting any rights or claims under
this Agreement, it shall look only to the assets and property of the Trust or
the Portfolio to which the Adviser's rights or claims relate in settlement of
such rights or claims, and not to the Trustees of the Trust or the
interestholders of the Portfolios.
SECTION 11. NOTICE
Any notice or other communication required to be given pursuant to this
Agreement shall be in writing or by telex and shall be effective upon receipt.
Notices and communications shall be given, if to the Trust, at:
Two Portland Square
Portland, Maine 04101
Attention: Secretary
and if to the Adviser at:
812 North Linden Drive
Beverly Hills, California 90210
<PAGE>
Attention: President
SECTION 12. MISCELLANEOUS
(a) No provisions of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by both
parties hereto and, if required by the Act, by a vote of a majority of the
outstanding voting interests of the Portfolios thereby affected. No amendment
to this Agreement or the termination of this Agreement with respect to a
Portfolio shall effect this Agreement as it pertains to any other Portfolio.
(b) If any part, term or provision of this Agreement is held to be
illegal, in conflict with any law or otherwise invalid, the remaining portion or
portions shall be considered severable and not be affected, and the rights and
obligations of the parties shall be construed and enforced as if the Agreement
did not contain the particular part, term or provision held to be illegal or
invalid.
(c) This Agreement may be executed by the parties hereto on any number of
counterparts, and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
(d) Section headings in this Agreement are included for convenience only
and are not to be used to construe or interpret this Agreement.
(e) This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the State of Delaware.
(f) The terms "vote of a majority of the outstanding voting interests,"
"interested person," "affiliated person" and "assignment" shall have the
meanings ascribed thereto in the Act to the terms "vote of a majority of the
outstanding voting securities," "interested person," "affiliated person" and
"assignment," respectively.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
CORE TRUST (DELAWARE)
------------------------------
John Y. Keffer
President
LINDEN ASSET MANAGEMENT, INC.
------------------------------
Anthony R. Fischer, Jr.
President
<PAGE>
EXHIBIT (5)(d)
<PAGE>
EXHIBIT (5)(d)
CORE TRUST (DELAWARE)
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 1st day of September, 1995, between Core Trust
(Delaware) (the "Trust"), a business trust organized under the laws of the State
of Delaware with its principal place of business at 61 Broadway, New York, New
York 10006, Linden Asset Management, Inc. (the "Adviser"), a corporation
organized under the laws of the State of California with its principal place of
business at 812 North Linden Drive, Beverly Hills, California 90210 and Forum
Advisors, Inc. ("Forum Advisors"), a corporation organized under the laws of the
State of Delaware with its principal place of business at Two Portland Square,
Portland, Maine 04101.
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended, (the "Act") as an open-end management investment company and is
authorized to issue interests (as defined in the Trust's Trust Instrument) in
separate series;
WHEREAS, pursuant to an investment advisory agreement between the Trust and
the Adviser, the Adviser provides investment advisory services to Cash
Portfolio, Government Cash Portfolio and Treasury Cash Portfolio, three separate
investment portfolios of the Trust (each a "Portfolio" and, collectively, the
"Portfolios");
WHEREAS, Forum Advisors provides investment advice and is registered with
the Securities and Exchange Commission (the "SEC") as an investment adviser
under the Investment Advisers Act of 1940, as amended (the "Advisers Act"); and
WHEREAS, the Adviser and the Trust desire that Forum Advisors perform
investment advisory services for each Portfolio, and Forum Advisors is willing
to provide those services on the terms and conditions set forth in this
Agreement;
NOW THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
SECTION 1. THE TRUST; DELIVERY OF DOCUMENTS
The Trust is engaged in the business of investing and reinvesting its
assets in securities of the type and in accordance with the limitations
specified in its Trust Instrument and Registration Statement filed with the
Securities and Exchange Commission (the "Commission") under the Act, as may be
supplemented from time to time, all in such manner and to such extent as may
from time to time be authorized by the Trust's Board of Trustees (the "Board").
The Trust is currently authorized to issue eight series of interests and the
Board is authorized to issue interests in any number of additional series. The
Trust has delivered to Forum Advisors copies of the Trust's Trust Instrument and
Registration Statement and will from time to time furnish Adviser with any
amendments thereof.
<PAGE>
SECTION 2. DUTIES OF THE ADVISER; APPOINTMENT
(a) Subject to the direction and supervision of the Board, the Adviser
manages the investment and reinvestment of the assets of the Portfolios, and
provides for certain management and services as specified in an Investment
Advisory Agreement between the Trust and the Adviser.
(b) The Trust hereby appoints Forum Advisors, and Forum Advisors hereby
agrees, to act as investment subadviser to each Portfolio for the period and on
the terms set forth in this Agreement. Subject to the direction and supervision
of the Board, Forum Advisors shall manage the investment and reinvestment of the
assets of the Portfolios, and, without limiting the generality of the foregoing,
shall provide the management and other services as specified below, all in such
manner and to such extent as may be directed from time to time by the Adviser.
SECTION 3. DUTIES OF FORUM ADVISORS
(a) Forum Advisors shall make decisions with respect to all purchases and
sales of securities and other investment assets in each Portfolio. To carry out
such decisions, Forum Advisors is hereby authorized, as agent and attorney-in-
fact for the Trust, for the account of, at the risk of and in the name of the
Trust, to place orders and issue instructions with respect to those transactions
of the Portfolios. In all purchases, sales and other transactions in securities
for the Portfolios, Forum Advisors is authorized to exercise full discretion and
act for the Trust in the same manner and with the same force and effect as the
Trust might or could do with respect to such purchases, sales or other
transactions, as well as with respect to all other things necessary or
incidental to the furtherance or conduct of such purchases, sales or other
transactions.
(b) Forum Advisors will report to the Board at each meeting thereof all
changes in each Portfolio since the prior report, and will also keep the Board
informed of important developments affecting the Trust, the Portfolios and Forum
Advisors, and on its own initiative, will furnish the Board from time to time
with such information as Forum Advisors may believe appropriate for this
purpose, whether concerning the individual companies whose securities are
included in the Portfolios' holdings, the industries in which they engage, or
the economic, social or political conditions prevailing in each country in which
the Portfolios' maintain investments. Forum Advisors will also furnish the
Board with such statistical and analytical information with respect to
securities in the Portfolios as Forum Advisors may believe appropriate or as the
Board reasonably may request.
(c) In making purchases and sales of securities for the Portfolios, Forum
Advisors will follow and comply with the policies set from time to time by the
Board as well as the limitations imposed by the Trust's Trust Instrument and
Registration Statement under the Act, the limitations in the Act and in the
Internal Revenue Code of 1986, as amended, in respect of regulated investment
companies and the investment objectives, policies and restrictions of the
Portfolios.
<PAGE>
(d) Forum Advisors will from time to time employ or associate with such
persons as Forum Advisors believes to be particularly qualified to assist in the
execution of Forum Advisors' duties hereunder, the cost of performance of such
duties to be borne and paid by Forum Advisors. No obligation may be incurred on
the Trust's behalf in any such respect.
(e) Forum Advisors shall either monitor the performance of brokers,
dealers and other persons who introduce or execute purchases, sales and other
transactions of securities and other investment assets of the Portfolios or
select an introducing broker who shall, as part of its transaction charges,
monitor such performance. Such persons may be affiliated with the Adviser,
Forum Advisors or other affiliates of the Trust to the extent permitted by the
Act.
(f) Forum Advisors shall maintain records relating to portfolio
transactions and the placing and allocation of brokerage orders as are required
to be maintained by the Trust under the Act. Forum Advisors shall prepare and
maintain, or cause to be prepared and maintained, in such form, for such periods
and in such locations as may be required by applicable law, all documents and
records relating to the services provided by Forum Advisors pursuant to this
Agreement required to be prepared and maintained by the Trust pursuant to the
rules and regulations of any national, state, or local government entity with
jurisdiction over the Trust, including the Commission and the Internal Revenue
Service. The books and records pertaining to the Trust which are in possession
of Forum Advisors shall be the property of the Trust. The Trust, or the Trust's
authorized representatives, shall have access to such books and records at all
times during Forum Advisors' normal business hours. Upon the reasonable request
of the Trust, copies of any such books and records shall be provided promptly by
Forum Advisors to the Trust or the Trust's authorized representatives.
SECTION 4. EXPENSES
The Trust hereby confirms that the Trust shall be responsible and shall
assume the obligation for payment of all the Trust's expenses, including:
interest charges, taxes, brokerage fees and commissions; certain insurance
premiums; fees, interest charges and expenses of the Trust's custodian and
transfer agent; telecommunications expenses; auditing, legal and compliance
expenses; costs of the Trust's formation and maintaining its existence; costs of
preparing the Trust's registration statement, account application forms and
interestholder reports and delivering them to existing and prospective
interestholders; costs of maintaining books of original entry for portfolio and
fund accounting and other required books and accounts and of calculating the net
asset value of interests in the Trust; costs of reproduction, stationery and
supplies; compensation of the Trust's trustees, officers and employees and costs
of other personnel performing services for the Trust; costs of Trust meetings;
registration fees and related expenses for registration with the Commission and
the securities regulatory authorities of other countries in which the Trust's
interests are sold; state securities law registration fees and related expenses;
and fees and out-of-pocket expenses payable to Forum Financial Services, Inc.
under any placement agent, management or similar agreement.
<PAGE>
SECTION 5. STANDARD OF CARE
(a) Forum Advisors shall give the Trust the benefit of its best judgment
and efforts in rendering its services to the Trust and shall not be liable for
error of judgment or mistake of law, for any loss arising out of any investment,
or in any event whatsoever, provided that nothing herein shall be deemed to
protect, or purport to protect, Forum Advisors against any liability to the
Trust or to the security holders of the Trust to which it would otherwise be
subject by reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties hereunder, or by reason of reckless disregard of its
obligations and duties hereunder. No provision of this Agreement shall be
construed to protect any Trustee or officer of the Trust, or Forum Advisors,
from liability in violation of Sections 17(h), 17(i), or 36(b) of the Act.
(b) Forum Advisors shall not be held responsible for any loss incurred by
reason of any act or omission of any dealer, broker or custodian; provided that
such loss is not the result of Forum Advisors' will full misfeasance, bad faith
or gross negligence in the performance of its duties hereunder, or the result of
Forum Advisors' reckless disregard of its obligations and duties hereunder.
(c) This Section shall survive the termination of this Agreement and shall
be binding upon the Trust's, the Adviser's, and Forum Advisors' successors and
personal representatives.
SECTION 6. COMPENSATION
(b) To the extent (and for each Portfolio business day as defined in the
Trust's Registration Statement) that the Adviser has delegated its duties to
Forum Advisors as contemplated by Section 2 hereof, Forum Advisors shall receive
from the Adviser a fee at an annual rate equal to the fee paid by the Trust to
the Adviser with respect to the applicable Portfolio. Such fees shall be
payable monthly in arrears on the first day of each calendar month for services
performed under this Agreement during the prior calendar month. Upon the
termination of this Agreement, the Adviser shall pay to Forum Advisors such
compensation as shall be payable prior to the effective date of such
termination. In no event, however, shall the Adviser be required to pay Forum
Advisors unless the Adviser shall have received payment from the Trust.
SECTION 7. EFFECTIVENESS, DURATION, AND TERMINATION
(a) This Agreement shall become effective with respect to a Portfolio
immediately upon approval by a majority of the outstanding voting interests of
that Portfolio.
(b) This Agreement shall remain in effect with respect to a Portfolio for
a period of two years from the date of its effectiveness and shall continue in
effect for successive twelve-month periods (computed from each anniversary date
of the approval) with respect to the Portfolio; provided that such continuance
is specifically approved at least annually (i) by the Board or by the vote of a
majority of the outstanding voting interests of the Portfolio, and, in either
case, (ii) by a majority of the Trust's trustees who are not parties to this
Agreement or
<PAGE>
interested persons of any such party (other than as trustees of the Trust);
provided further, however, that if this Agreement or the continuation of this
Agreement is not approved as to a Portfolio, Forum Advisors may continue to
render to that Portfolio the services described herein in the manner and to the
extent permitted by the Act and the rules and regulations thereunder.
(c) This Agreement may be terminated with respect to a Portfolio at any
time, without the payment of any penalty, (i) by the Board or by a vote of a
majority of the outstanding voting interests of a Portfolio on 60 days' written
notice to Forum Advisors or (ii) by Forum Advisors on 60 days' written notice to
the Trust. This agreement shall terminate upon assignment.
SECTION 8. ACTIVITIES OF FORUM ADVISORS
(a) Except to the extent necessary to perform its obligations hereunder,
nothing herein shall be deemed to limit or restrict Forum Advisors' right, or
the right of any of Forum Advisors' officers, directors or employees who may
also be a trustee, officer or employee of the Trust, or persons otherwise
affiliated persons of the Trust to engage in any other business or to devote
time and attention to the management or other aspects of any other business,
whether of a similar or dissimilar nature, or to render services of any kind to
any other corporation, trust, firm, individual or association.
(b) Forum Advisors represents that it is currently registered, and will
during the entire period this Agreement is in effect be registered, as an
investment adviser under the Advisers Act.
SECTION 9. LIMITATION OF INTERESTHOLDER AND TRUSTEE LIABILITY
The Trustees of the Trust and the interestholders of the Portfolios shall
not be liable for any obligations of the Trust or of the Portfolios under this
Agreement, and Forum Advisors agrees that, in asserting any rights or claims
under this Agreement, it shall look only to the assets and property of the Trust
or the Portfolios to which Forum Advisors' rights or claims relate in settlement
of such rights or claims, and not to the Trustees of the Trust or the
interestholders of the Portfolios.
SECTION 10. NOTICE
Any notice or other communication required to be given pursuant to this
Agreement shall be in writing or by telex and shall be effective upon receipt.
Notices and communications shall be given, if to the Trust, at:
Two Portland Square
Portland, Maine 04101
Attention: Secretary
<PAGE>
if to the Adviser at:
812 North Linden Drive
Beverly Hills, California 90210
Attention: President
and if to Forum Advisors, at:
Two Portland Square
Portland, Maine 04101
Attention: Secretary
SECTION 11. MISCELLANEOUS
(a) No provisions of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by both
parties hereto and, if required by the Act, by a vote of a majority of the
outstanding voting interests of the Portfolios thereby affected. No amendment
to this Agreement or the termination of this Agreement with respect to a
Portfolio shall effect this Agreement as it pertains to any other Portfolio.
(b) If any part, term or provision of this Agreement is held to be
illegal, in conflict with any law or otherwise invalid, the remaining portion or
portions shall be considered severable and not be affected, and the rights and
obligations of the parties shall be construed and enforced as if the Agreement
did not contain the particular part, term or provision held to be illegal or
invalid.
(c) This Agreement may be executed by the parties hereto on any number of
counterparts, and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
(d) Section headings in this Agreement are included for convenience only
and are not to be used to construe or interpret this Agreement.
(e) This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the State of Delaware.
(f) The terms "vote of a majority of the outstanding voting interests,"
"interested person," "affiliated person" and "assignment" shall have the
meanings ascribed thereto in the Act to the terms "vote of a majority of the
outstanding voting securities," "interested person," "affiliated person" and
"assignment," respectively.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
CORE TRUST (DELAWARE)
---------------------------
John Y. Keffer
President
LINDEN ASSET MANAGEMENT, INC.
---------------------------
Anthony R. Fischer, Jr.
President
FORUM ADVISORS, INC.
---------------------------
David R. Keffer
Vice President
<PAGE>
EXHIBIT (5)(e)
<PAGE>
EXHIBIT (5)(e)
CORE TRUST (DELAWARE)
INVESTMENT ADVISORY AGREEMENT
February 12, 1996
Forum Advisors, Inc.
Two Portland Square
Portland, ME 04101
Dear Sirs:
We, the undersigned Core Trust (Delaware), herewith confirm our agreement
with you as follows:
1. We propose to engage in the business of investing and reinvesting our
assets in securities of the type and in accordance with the limitations
specified in Trust Instrument, By-Laws and registration statement filed with the
Securities and Exchange Commission under the Investment Company Act of 1940 (the
"Investment Company Act") and the Securities Act of 1933 (the "Securities Act"),
including any representations made in our prospectus and statement of additional
information, all in such manner and to such extent as may from time to time be
authorized by our Board of Trustees. We enclose copies of the documents listed
above and will from time to time furnish you with any amendments thereof.
2. We hereby employ you, subject to the direction and control of our
Board of Trustees, to manage the investment and reinvestment of the assets with
respect to a series of our beneficial interests as listed in Appendix A hereto
(the "Portfolio"), and, without limiting the generality of the foregoing, to
provide management and other services specified below.
(a) You will make decisions with respect to all purchases and sales of
securities in the Portfolio. To carry out such decisions, you are hereby
authorized, as our agent and attorney-in-fact, for our account and at our risk
and in our name, to place orders for the investment and reinvestment of the
assets of the Portfolio. In all purchases, sales and other transactions in
securities in the Portfolio, you are authorized to exercise full discretion and
act for us in the same manner and with the same force and effect as we might or
could do with respect to such purchases, sales or other transactions, as well as
with respect to all other things necessary or incidental to the furtherance or
conduct of such purchases, sales or other transactions.
(b) You will report to our Board of Trustees at each meeting thereof all
changes in the Portfolio since the prior report, and will also keep us in touch
with important developments affecting the Portfolio and on your own initiative
will furnish us from time to time with such information as you may believe
appropriate for this purpose, whether concerning the individual
<PAGE>
companies whose securities are included in the Portfolio, the industries in
which they engage, or the conditions prevailing in the economy generally. You
will also furnish us with such statistical and analytical information with
respect to securities in the Portfolio as you may believe appropriate or as we
reasonably may request. In making such purchases and sales of securities in the
Funds, you will bear in mind the policies set from time to time by our Board of
Trustees as well as the limitations imposed by our Trust Instrument and in our
Registration Statements under the Investment Company Act and the Securities Act
the limitations in the Investment Company Act and of the Internal Revenue Code
in respect of regulated investment companies and the investment objective,
policies and restrictions for the Portfolio.
(c) It is understood that you will from time to time employ or associate
with yourselves such persons as you believe to be particularly fitted to assist
you in the execution of your duties hereunder, the cost of performance of such
duties to be borne and paid by you. No obligation may be incurred on our behalf
in any such respect.
3. It is further agreed that you shall be responsible for the portion of
the net expenses that relate to the Portfolio (except interest, taxes, brokerage
fees and other expenses paid by us in accordance with an effective plan pursuant
to Rule 12b-1 under the Investment Company Act and organization expenses, all to
the extent such exclusions are permitted by applicable state law and regulation)
incurred by us during each of our fiscal years or portion thereof that this
agreement is in effect between us which, as to the Portfolio, in any such year
exceeds the limits applicable to the Portfolio under the laws or regulations of
any state in which our shares are qualified for sale (reduced pro rata for any
portion of less than a year). We hereby confirm that, subject to the foregoing,
we shall be responsible and hereby assume the obligation for payment of all our
other expenses, including: (a) payment of the fee payable to you under
paragraph 5 hereof and the fee payable to Forum Financial Services, Inc.
pursuant to the Administration Agreement between Forum Financial Services, Inc.
and us; (b) taxes, brokerage fees and commissions; (c) certain insurance
premiums; (d) fees, interest charges and expenses of our custodian, transfer
agent and dividend disbursing agent; (e) telecommunications expenses; (f)
auditing, legal and compliance expenses; (g) costs of forming the corporation
and maintaining corporate existence; (h) costs of preparing and printing our
Private Offering Memoranda, Statements of Additional Information, subscription
application forms and shareholder reports and their delivery to existing and
prospective shareholders; (i) costs of maintaining books of original entry for
portfolio and fund accounting and other required books and accounts and of
calculating the net asset value of our shares; (j) costs of reproduction,
stationery and supplies; (k) compensation of our trustees, officers and
employees and costs of other personnel performing services for us who are not
your officers or officers of Forum Financial Services, Inc., or your and its
respective affiliates; (l) costs of corporate meetings; (m) Securities and
Exchange Commission registration fees and related expenses; (n) state securities
laws registration fees and related expenses and (o) all fees and expenses paid
by us in accordance with any distribution plan adopted by us pursuant to Rule
12b-1 under the Investment Company Act.
4. We shall expect of you, and you will give us the benefit of, your best
judgment and efforts in rendering these services to us, and we agree as an
inducement to your undertaking these services that you shall not be liable
hereunder for any mistake of judgment or in any event
<PAGE>
whatsoever, except for lack of good faith, provided that nothing herein shall be
deemed to protect, or purport to protect, you against any liability to us or and
to our security holders to which you would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance of your
duties hereunder, or by reason of your reckless disregard of your obligations
and duties hereunder.
5. In consideration of the foregoing we will pay you, with respect to the
Portfolio, a fee as described in Appendix A hereto. Such fees shall be accrued
by us daily and shall be payable monthly in arrears on the first day of each
calendar month for services performed hereunder during the prior calendar month.
Your reimbursement, if any, of our expenses as provided in paragraph 3 hereof,
shall be estimated and paid to us monthly in arrears, at the same time as our
payment to you for such month. Payment of the advisory fees will be reduced or
postponed, if necessary, with any adjustments made after the end of the year.
6. This agreement shall become effective as to the Portfolio immediately
upon approval by a majority of the outstanding voting securities (as defined in
the Investment Company Act) of the Portfolio and shall remain in effect for a
period of one year from the date it first becomes effective and shall continue
in effect thereafter for successive twelve-month periods (computed from each
anniversary date of the effective date) with respect to the Portfolio, provided
that such continuance is specifically approved at least annually by our Board of
Trustees or by majority vote of the holders of the outstanding voting securities
(as defined) of the Portfolio, and, in either case, by a majority of our
trustees who are not parties to this agreement or interested persons, as defined
in the Investment Company Act, of any such party (other than as our trustees),
provided further, however, that if the continuation of this agreement is not
approved as to the Portfolio, you may continue to render to such portfolio the
services described herein in the manner and to the extent permitted by the Act
and the rules and regulations thereunder. Upon the effectiveness of this
agreement, it shall supersede all previous agreements between us covering the
subject matter hereof. This agreement may be terminated with respect to the
Portfolio at any time, without the payment of any penalty, by vote of a majority
of the outstanding voting securities (as so defined) of the Portfolio, or by a
vote of a majority of our entire Board of Trustees on 60 days' written notice to
you, or by you with respect to the Portfolio on not more than 60 days' nor less
than 30 days' written notice to us.
7. This agreement may not be transferred, assigned, sold or in any manner
hypothecated or pledged by you and this agreement shall terminate automatically
in the event of any such transfer, assignment, sale, hypothecation or pledge by
you. The terms "transfer," "assignment" and "sale" as used in this paragraph
shall have the meanings ascribed thereto by governing law and any interpretation
thereof contained in rules or regulations promulgated by the Securities and
Exchange Commission thereunder.
8. Except to the extent necessary to perform your obligations hereunder,
nothing herein shall be deemed to limit or restrict your right, or the right of
any of your officers, trustees or employees who may also be a trustee, officer
or employee of ours, or persons otherwise affiliated with us (within the meaning
of the Investment Company Act) to engage in any other business or to devote time
and attention to the management or other aspects of any other business, whether
<PAGE>
of a similar or dissimilar nature, or to render services of any kind to any
other corporation, trust, firm, individual or association.
If the foregoing is in accordance with your understanding, will you kindly
so indicate by signing and returning to us the enclosed copy hereof.
Very truly yours,
CORE TRUST (DELAWARE)
By /s/ John Y. Keffer
----------------------------
John Y. Keffer
President
FORUM ADVISORS, INC.
By /s/ David R. Keffer
----------------------------
David R. Keffer
Vice President
<PAGE>
CORE TRUST (DELAWARE)
INVESTMENT ADVISORY AGREEMENT
APPENDIX A
ADVISORY FEE AS A % OF
THE ANNUAL AVERAGE DAILY
PORTFOLIO NET ASSETS OF THE PORTFOLIO
Treasury Portfolio 0.05%
<PAGE>
EXHIBIT (5)(f)
<PAGE>
EXHIBIT (5)(f)
CORE TRUST (DELAWARE)
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 20th day of February, 1996, between Core Trust
(Delaware) (the "Trust"), a business trust organized under the laws of the State
of Delaware with its principal place of business at Two Portland Square,
Portland, maine 04101, Forum Advisors, Inc. ("Forum Advisors"), a corporation
organized under the laws of the State of Delaware with its principal place of
business at Two Portland Square, Portland, Maine 04101, and Linden Asset
Management, Inc. ("Linden"), a corporation organized under the laws of the State
of California with its principal place of business at 812 North Linden Drive,
Beverly Hills, California 90210.
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended, (the "Act") as an open-end management investment company and is
authorized to issue interests (as defined in the Trust's Trust Instrument) in
separate series;
WHEREAS, pursuant to an investment advisory agreement between the Trust and
the Forum Advisors, Forum Advisors provides investment advisory services to
Treasury Portfolio, a separate investment portfolios of the Trust (the
"Portfolio");
WHEREAS, Linden provides investment advice and is registered with the
Securities and Exchange Commission (the "SEC") as an investment adviser under
the Investment Advisers Act of 1940, as amended (the "Advisers Act"); and
WHEREAS, Forum Advisors and the Trust desire that Linden perform investment
advisory services for the Portfolio, and Linden is willing to provide those
services on the terms and conditions set forth in this Agreement;
NOW THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
SECTION 1. THE TRUST; DELIVERY OF DOCUMENTS
The Trust is engaged in the business of investing and reinvesting its
assets in securities of the type and in accordance with the limitations
specified in its Trust Instrument and Registration Statement filed with the
Securities and Exchange Commission (the "Commission") under the Act, as may be
supplemented from time to time, all in such manner and to such extent as may
from time to time be authorized by the Trust's Board of Trustees (the "Board").
The Trust is currently authorized to issue eight series of interests and the
Board is authorized to issue interests in any number of additional series. The
Trust has delivered to Forum Advisors and Linden copies of the Trust's Trust
Instrument and Registration Statement and will from time to time furnish Forum
Advisors and Linden with any amendments thereof.
<PAGE>
SECTION 2. DUTIES OF LINDEN; APPOINTMENT
(a) Subject to the direction and supervision of the Board, Forum Advisors
manages the investment and reinvestment of the assets of the Portfolios, and
provides for certain management and services as specified in an Investment
Advisory Agreement between the Trust and the Adviser.
(b) The Trust hereby appoints Linden, and Linden hereby agrees, to act as
investment subadviser to each Portfolio for the period and on the terms set
forth in this Agreement. Subject to the direction and supervision of the Board,
Linden shall manage the investment and reinvestment of the assets of the
Portfolios, and, without limiting the generality of the foregoing, shall provide
the management and other services as specified below, all in such manner and to
such extent as may be directed from time to time by the Forum Advisors.
SECTION 3. DUTIES OF FORUM ADVISORS
(a) Linden shall make decisions with respect to all purchases and sales of
securities and other investment assets in each Portfolio. To carry out such
decisions, Linden is hereby authorized, as agent and attorney-in-fact for the
Trust, for the account of, at the risk of and in the name of the Trust, to place
orders and issue instructions with respect to those transactions of the
Portfolios. In all purchases, sales and other transactions in securities for
the Portfolios, Linden is authorized to exercise full discretion and act for the
Trust in the same manner and with the same force and effect as the Trust might
or could do with respect to such purchases, sales or other transactions, as well
as with respect to all other things necessary or incidental to the furtherance
or conduct of such purchases, sales or other transactions.
(b) Linden will report to the Board at each meeting thereof all changes in
each Portfolio since the prior report, and will also keep the Board informed of
important developments affecting the Trust, the Portfolios and Linden, and on
its own initiative, will furnish the Board from time to time with such
information as Linden may believe appropriate for this purpose, whether
concerning the individual companies whose securities are included in the
Portfolios' holdings, the industries in which they engage, or the economic,
social or political conditions prevailing in each country in which the
Portfolios' maintain investments. Linden will also furnish the Board with such
statistical and analytical information with respect to securities in the
Portfolios as Linden may believe appropriate or as the Board reasonably may
request.
(c) In making purchases and sales of securities for the Portfolios, Linden
will follow and comply with the policies set from time to time by the Board as
well as the limitations imposed by the Trust's Trust Instrument and Registration
Statement under the Act, the limitations in the Act and in the Internal Revenue
Code of 1986, as amended, in respect of regulated investment companies and the
investment objectives, policies and restrictions of the Portfolios.
(d) Linden will from time to time employ or associate with such persons as
Linden believes to be particularly qualified to assist in the execution of
Linden's duties hereunder, the
<PAGE>
cost of performance of such duties to be borne and paid by Linden. No
obligation may be incurred on the Trust's behalf in any such respect.
(e) Linden shall either monitor the performance of brokers, dealers and
other persons who introduce or execute purchases, sales and other transactions
of securities and other investment assets of the Portfolios or select an
introducing broker who shall, as part of its transaction charges, monitor such
performance. Such persons may be affiliated with the Adviser, Linden or other
affiliates of the Trust to the extent permitted by the Act.
(f) Linden shall maintain records relating to portfolio transactions and
the placing and allocation of brokerage orders as are required to be maintained
by the Trust under the Act. Linden shall prepare and maintain, or cause to be
prepared and maintained, in such form, for such periods and in such locations as
may be required by applicable law, all documents and records relating to the
services provided by Linden pursuant to this Agreement required to be prepared
and maintained by the Trust pursuant to the rules and regulations of any
national, state, or local government entity with jurisdiction over the Trust,
including the Commission and the Internal Revenue Service. The books and
records pertaining to the Trust which are in possession of Linden shall be the
property of the Trust. The Trust, or the Trust's authorized representatives,
shall have access to such books and records at all times during Linden's normal
business hours. Upon the reasonable request of the Trust, copies of any such
books and records shall be provided promptly by Linden to the Trust or the
Trust's authorized representatives.
SECTION 4. EXPENSES
The Trust hereby confirms that the Trust shall be responsible and shall
assume the obligation for payment of all the Trust's expenses, including:
interest charges, taxes, brokerage fees and commissions; certain insurance
premiums; fees, interest charges and expenses of the Trust's custodian and
transfer agent; telecommunications expenses; auditing, legal and compliance
expenses; costs of the Trust's formation and maintaining its existence; costs of
preparing the Trust's registration statement, account application forms and
interestholder reports and delivering them to existing and prospective
interestholders; costs of maintaining books of original entry for portfolio and
fund accounting and other required books and accounts and of calculating the net
asset value of interests in the Trust; costs of reproduction, stationery and
supplies; compensation of the Trust's trustees, officers and employees and costs
of other personnel performing services for the Trust; costs of Trust meetings;
registration fees and related expenses for registration with the Commission and
the securities regulatory authorities of other countries in which the Trust's
interests are sold; state securities law registration fees and related expenses;
and fees and out-of-pocket expenses payable to Forum Financial Services, Inc.
under any placement agent, management or similar agreement.
SECTION 5. STANDARD OF CARE
(a) Linden shall give the Trust the benefit of its best judgment and
efforts in rendering its services to the Trust and shall not be liable for error
of judgment or mistake of law, for any loss arising out of any investment, or in
any event whatsoever, provided that nothing
<PAGE>
herein shall be deemed to protect, or purport to protect, Linden against any
liability to the Trust or to the security holders of the Trust to which it would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties hereunder, or by reason of reckless
disregard of its obligations and duties hereunder. No provision of this
Agreement shall be construed to protect any Trustee or officer of the Trust, or
Linden, from liability in violation of Sections 17(h), 17(i), or 36(b) of the
Act.
(b) Linden shall not be held responsible for any loss incurred by reason
of any act or omission of any dealer, broker or custodian; provided that such
loss is not the result of Linden's will full misfeasance, bad faith or gross
negligence in the performance of its duties hereunder, or the result of Linden's
reckless disregard of its obligations and duties hereunder.
(c) This Section shall survive the termination of this Agreement and shall
be binding upon the Trust's, Forum Advisors', and Linden's successors and
personal representatives.
SECTION 6. COMPENSATION
(b) To the extent (and for each Portfolio business day as defined in the
Trust's Registration Statement) that Forum Advisors has delegated its duties to
Linden as contemplated by Section 2 hereof, Linden shall receive from Forum
Advisors a fee at an annual rate to be separately agreed with respect to the
Portfolio. Such fees shall be payable monthly in arrears on the first day of
each calendar month for services performed under this Agreement during the prior
calendar month. Upon the termination of this Agreement, Forum Advisors shall
pay to Linden such compensation as shall be payable prior to the effective date
of such termination. In no event, however, shall Forum Advisors be required to
pay Linden unless Forum Advisors shall have received payment from the Trust.
SECTION 7. EFFECTIVENESS, DURATION, AND TERMINATION
(a) This Agreement shall become effective with respect to a Portfolio
immediately upon approval by a majority of the outstanding voting interests of
that Portfolio.
(b) This Agreement shall remain in effect with respect to a Portfolio for
a period of two years from the date of its effectiveness and shall continue in
effect for successive twelve-month periods (computed from each anniversary date
of the approval) with respect to the Portfolio; provided that such continuance
is specifically approved at least annually (i) by the Board or by the vote of a
majority of the outstanding voting interests of the Portfolio, and, in either
case, (ii) by a majority of the Trust's trustees who are not parties to this
Agreement or interested persons of any such party (other than as trustees of the
Trust); provided further, however, that if this Agreement or the continuation of
this Agreement is not approved as to a Portfolio, Linden may continue to render
to that Portfolio the services described herein in the manner and to the extent
permitted by the Act and the rules and regulations thereunder.
(c) This Agreement may be terminated with respect to a Portfolio at any
time, without the payment of any penalty, (i) by the Board or by a vote of a
majority of the outstanding
<PAGE>
voting interests of a Portfolio on 60 days' written notice to Linden or (ii) by
Linden on 60 days' written notice to the Trust. This agreement shall terminate
upon assignment.
SECTION 8. ACTIVITIES OF LINDEN
(a) Except to the extent necessary to perform its obligations hereunder,
nothing herein shall be deemed to limit or restrict Linden's right, or the right
of any of Linden's officers, directors or employees who may also be a trustee,
officer or employee of the Trust, or persons otherwise affiliated persons of the
Trust to engage in any other business or to devote time and attention to the
management or other aspects of any other business, whether of a similar or
dissimilar nature, or to render services of any kind to any other corporation,
trust, firm, individual or association.
(b) Linden represents that it is currently registered, and will during the
entire period this Agreement is in effect be registered, as an investment
adviser under the Advisers Act.
SECTION 9. LIMITATION OF INTERESTHOLDER AND TRUSTEE LIABILITY
The Trustees of the Trust and the interestholders of the Portfolios shall
not be liable for any obligations of the Trust or of the Portfolios under this
Agreement, and Linden agrees that, in asserting any rights or claims under this
Agreement, it shall look only to the assets and property of the Trust or the
Portfolios to which Linden's rights or claims relate in settlement of such
rights or claims, and not to the Trustees of the Trust or the interestholders of
the Portfolios.
SECTION 10. NOTICE
Any notice or other communication required to be given pursuant to this
Agreement shall be in writing or by telex and shall be effective upon receipt.
Notices and communications shall be given, if to the Trust, at:
Two Portland Square
Portland, Maine 04101
Attention: Secretary
if to Linden at:
812 North Linden Drive
Beverly Hills, California 90210
Attention: President
and if to Forum Advisors, at:
Two Portland Square
Portland, Maine 04101
<PAGE>
Attention: Secretary
SECTION 11. MISCELLANEOUS
(a) No provisions of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by both
parties hereto and, if required by the Act, by a vote of a majority of the
outstanding voting interests of the Portfolios thereby affected. No amendment
to this Agreement or the termination of this Agreement with respect to a
Portfolio shall effect this Agreement as it pertains to any other Portfolio.
(b) If any part, term or provision of this Agreement is held to be
illegal, in conflict with any law or otherwise invalid, the remaining portion or
portions shall be considered severable and not be affected, and the rights and
obligations of the parties shall be construed and enforced as if the Agreement
did not contain the particular part, term or provision held to be illegal or
invalid.
(c) This Agreement may be executed by the parties hereto on any number of
counterparts, and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
(d) Section headings in this Agreement are included for convenience only
and are not to be used to construe or interpret this Agreement.
(e) This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the State of Delaware.
(f) The terms "vote of a majority of the outstanding voting interests,"
"interested person," "affiliated person" and "assignment" shall have the
meanings ascribed thereto in the Act to the terms "vote of a majority of the
outstanding voting securities," "interested person," "affiliated person" and
"assignment," respectively.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
CORE TRUST (DELAWARE)
------------------------------
John Y. Keffer
President
LINDEN ASSET MANAGEMENT, INC.
________________________
Anthony R. Fischer, Jr.
President
FORUM ADVISORS, INC.
------------------------------
David R. Keffer
Vice President
<PAGE>
EXHIBIT (5)(g)
<PAGE>
EXHIBIT (5)(g)
CORE TRUST (DELAWARE)
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 1st day of September, 1995, between Core Trust
(Delaware) (the "Trust"), a business trust organized under the laws of the State
of Delaware with its principal place of business at Two Portland Square,
Portland, Maine 04101, and Linden Asset Management, Inc. (the "Adviser"), a
corporation organized under the laws of State of California with its principal
place of business at 812 North Linden Drive, Beverly Hills, California 90210.
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended, (the "Act") as an open-end management investment company and is
authorized to issue interests (as defined in the Trust's Trust Instrument) in
separate series; and
WHEREAS, the Trust desires that the Adviser perform investment advisory
services for Daily Assets Treasury Fund, Treasury Portfolio (the"Portfolio"),
and the Adviser is willing to provide those services on the terms and conditions
set forth in this Agreement; and
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
SECTION 1. THE TRUST; DELIVERY OF DOCUMENTS
The Trust is engaged in the business of investing and reinvesting its
assets in securities of the type and in accordance with the limitations
specified in its Trust Instrument and Registration Statement filed with the
Securities and Exchange Commission (the "Commission") under the Act, as may be
supplemented from time to time, all in such manner and to such extent as may
from time to time be authorized by the Trust's Board of Trustees (the "Board").
The Trust is currently authorized to issue four series of interests and the
Board is authorized to issue interests in any number of additional series. The
Trust has delivered to the Adviser copies of the Trust's Trust Instrument and
Registration Statement and will from time to time furnish the Adviser with any
amendments thereof.
SECTION 2. INVESTMENT ADVISER; APPOINTMENT
The Trust hereby employs the Adviser, subject to the direction and control
of the Board, to manage the investment and reinvestment of the assets in the
Portfolio and, without limiting the generality of the foregoing, to provide
other services specified in Section 3 hereof.
<PAGE>
SECTION 3. DUTIES OF THE ADVISER
(a) The Adviser shall make decisions with respect to all purchases and
sales of securities and other investment assets in the Portfolio. To carry out
such decisions, the Adviser is hereby authorized, as agent and attorney-in-fact
for the Trust, for the account of, at the risk of and in the name of the Trust,
to place orders and issue instructions with respect to those transactions of the
Portfolio. In all purchases, sales and other transactions in securities for the
Portfolio, the Adviser is authorized to exercise full discretion and act for the
Trust in the same manner and with the same force and effect as the Trust might
or could do with respect to such purchases, sales or other transactions, as well
as with respect to all other things necessary or incidental to the furtherance
or conduct of such purchases, sales or other transactions.
(b) The Adviser will report to the Board at each meeting thereof all
changes in the Portfolio since the prior report, and will also keep the Board
informed of important developments affecting the Trust, the Portfolio and the
Adviser, and on its own initiative, will furnish the Board from time to time
with such information as the Adviser may believe appropriate for this purpose,
whether concerning the individual companies whose securities are included in the
Portfolio's holdings, the industries in which they engage, or the economic,
social or political conditions prevailing in each country in which the
Portfolio's maintain investments. The Adviser will also furnish the Board with
such statistical and analytical information with respect to securities in the
Portfolio as the Adviser may believe appropriate or as the Board reasonably may
request. In making purchases and sales of securities for the Portfolio, the
Adviser will bear in mind the policies set from time to time by the Board as
well as the limitations imposed by the Trust's Trust Instrument and Registration
Statement under the Act, the limitations in the Act and in the Internal Revenue
Code of 1986, as amended, in respect of regulated investment companies and the
investment objectives, policies and restrictions of the Portfolio.
(c) The Adviser will from time to time employ or associate with such
persons as the Adviser believes to be particularly fitted to assist in the
execution of the Adviser's duties hereunder, the cost of performance of such
duties to be borne and paid by the Adviser. No obligation may be incurred on
the Trust's behalf in any such respect.
(d) The Adviser shall maintain records relating to portfolio transactions
and the placing and allocation of brokerage orders as are required to be
maintained by the Trust under the Act. The Adviser shall prepare and maintain,
or cause to be prepared and maintained, in such form, for such periods and in
such locations as may be required by applicable law, all documents and records
relating to the services provided by the Adviser pursuant to this Agreement
required to be prepared and maintained by the Trust pursuant to the rules and
regulations of any national, state, or local government entity with jurisdiction
over the Trust, including the Commission and the Internal Revenue Service. The
books and records pertaining to the Trust which are in possession of the Adviser
shall be the property of the Trust. The Trust, or the Trust's authorized
representatives, shall have access to such books and records at all times during
the Adviser's normal business hours. Upon the reasonable request of the Trust,
copies of any such books and records shall be provided promptly by the Adviser
to the Trust or the Trust's authorized representatives.
<PAGE>
SECTION 4. EXPENSES
The Trust hereby confirms that the Trust shall be responsible and shall
assume the obligation for payment of all the Trust's expenses, including:
interest charges, taxes, brokerage fees and commissions; certain insurance
premiums; fees, interest charges and expenses of the Trust's custodian and
transfer agent; telecommunications expenses; auditing, legal and compliance
expenses; costs of the Trust's formation and maintaining its existence; costs of
preparing the Trust's registration statement, account application forms and
interestholder reports and delivering them to existing and prospective
interestholders; costs of maintaining books of original entry for portfolio and
fund accounting and other required books and accounts and of calculating the net
asset value of interests in the Trust; costs of reproduction, stationery and
supplies; compensation of the Trust's trustees, officers and employees and the
costs of other personnel performing services for the Trust who are not officers
of the Adviser or of Forum Financial Services, Inc. or affiliated persons of
either; costs of Trust meetings; registration fees and related expenses for
registration with the Commission and the securities regulatory authorities of
other countries in which the Trust's interests are sold; state securities law
registration fees and related expenses; and fees and out-of-pocket expenses
payable to Forum Financial Services, Inc. under any placement agent, management
or similar agreement.
SECTION 5. STANDARD OF CARE
The Trust shall expect of the Adviser, and the Adviser will give the Trust
the benefit of, the Adviser's best judgment and efforts in rendering its
services to the Trust, and as an inducement to the Adviser's undertaking these
services the Adviser shall not be liable hereunder for any mistake of judgment
or in any event whatsoever, except for lack of good faith, provided that nothing
herein shall be deemed to protect, or purport to protect, the Adviser against
any liability to the Trust or to the Trust's interestholders to which the
Adviser would otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence in the performance of the Adviser's duties hereunder, or by
reason of the Adviser's reckless disregard of its obligations and duties
hereunder. As used in this Section 5, the term "Adviser" shall include any
affiliates of the Adviser performing services for the Portfolio contemplated
hereby and directors, officers and employees of the Adviser as well as the
Adviser itself.
SECTION 6. COMPENSATION
In consideration of the foregoing, the Trust shall pay the Adviser a fee as
shall be determined form time to time in writhing between the Adviser and the
Trust; provided, that no fee shall be paid to the Adviser by the Trust from the
date thereof until the date on which shareholders of the Fund approve this
Agreement.
SECTION 7. EFFECTIVENESS, DURATION AND TERMINATION
(a) This Agreement shall become effective with respect to the Portfolio
immediately upon approval by a majority of the outstanding voting interests of
the Portfolio.
<PAGE>
(b) This Agreement shall remain in effect with respect to the Portfolio
for a period of two years from the date of its effectiveness and shall continue
in effect for successive twelve-month periods (computed from each anniversary
date of the approval) with respect to the Portfolio; provided that such
continuance is specifically approved at least annually (i) by the Board or by
the vote of a majority of the outstanding voting interests of the Portfolio,
and, in either case, (ii) by a majority of the Trust's trustees who are not
parties to this Agreement or interested persons of any such party (other than as
trustees of the Trust); provided further, however, that if this Agreement or the
continuation of this Agreement is not approved as to the Portfolio, the Adviser
may continue to render to the Portfolio the services described herein in the
manner and to the extent permitted by the Act and the rules and regulations
thereunder.
(c) This Agreement may be terminated with respect to the Portfolio at any
time, without the payment of any penalty, (i) by the Board or by a vote of a
majority of the outstanding voting securities of the Portfolio on 60 days'
written notice to the Adviser or (ii) by the Adviser on 60 days' written notice
to the Trust. This agreement shall terminate upon assignment.
SECTION 8. ACTIVITIES OF THE ADVISER
Except to the extent necessary to perform its obligations hereunder,
nothing herein shall be deemed to limit or restrict the Adviser's right, or the
right of any of the Adviser's officers, directors or employees who may also be a
trustee, officer or employee of the Trust, or persons otherwise affiliated
persons of the Trust to engage in any other business or to devote time and
attention to the management or other aspects of any other business, whether of a
similar or dissimilar nature, or to render services of any kind to any other
corporation, trust, firm, individual or association.
SECTION 9. LIMITATION OF INTERESTHOLDER AND TRUSTEE LIABILITY
The Trustees of the Trust and the interestholders of the Portfolio shall
not be liable for any obligations of the Trust or of the Portfolio under this
Agreement, and the Adviser agrees that, in asserting any rights or claims under
this Agreement, it shall look only to the assets and property of the Trust or
the Portfolio to which the Adviser's rights or claims relate in settlement of
such rights or claims, and not to the Trustees of the Trust or the
interestholders of the Portfolio.
SECTION 10. MISCELLANEOUS
(a) No provisions of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by both
parties hereto and, if required by the Act, by a vote of a majority of the
outstanding voting interests of the Portfolio thereby affected. No amendment to
this Agreement or the termination of this Agreement with respect to the
Portfolio shall effect this Agreement as it pertains to any other Portfolio.
<PAGE>
(b) If any part, term or provision of this Agreement is held to be
illegal, in conflict with any law or otherwise invalid, the remaining portion or
portions shall be considered severable and not be affected, and the rights and
obligations of the parties shall be construed and enforced as if the Agreement
did not contain the particular part, term or provision held to be illegal or
invalid.
(c) This Agreement may be executed by the parties hereto on any number of
counterparts, and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
(d) Section headings in this Agreement are included for convenience only
and are not to be used to construe or interpret this Agreement.
(e) This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the State of Delaware.
(f) The terms "vote of a majority of the outstanding voting interests,"
"interested person," "affiliated person" and "assignment" shall have the
meanings ascribed thereto in the Act to the terms "vote of a majority of the
outstanding voting securities," "interested person," "affiliated person" and
"assignment," respectively.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
CORE TRUST (DELAWARE)
------------------------------
John Y. Keffer
President
LINDEN ASSET MANAGEMENT, INC.
------------------------------
Anthony R. Fischer, Jr.
President
<PAGE>
EXHIBIT (8)(a)
<PAGE>
EXHIBIT (8)(a)
CORE TRUST (DELAWARE)
CUSTODIAN AGREEMENT
AGREEMENT, dated as of November 9, 1994 between Core Trust(Delaware) (the
"Trust"), a business trust organized under the laws of the State of Delaware
with its principal place of business at Two Portland Square, Portland, Maine
04101 and Norwest Bank Minnesota, N.A. (the "Custodian"), a banking association
organized under the laws of the United States of America with its principal
place of business at 733 Marquette Avenue, Minneapolis, Minnesota 55479.
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended (the "Act"), as an open-end management investment company and is
authorized to issue its interests, no par value, in separate series;
WHEREAS, the Trust desires to appoint Norwest Bank Minnesota, N.A.,
custodian of its securities and cash and Norwest Bank Minnesota, N.A. is willing
to act in such capacity upon the terms and conditions set forth below; and
WHEREAS, pursuant to a separate agreement between the Trust and Forum
Financial Corp. (the "Transfer Agency Agreement"), Forum Financial Corp. will
perform the duties of transfer agent of the Trust
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, the parties do hereby agree as follows:
SECTION 1. DEFINITIONS. Whenever used in this Agreement, the following
terms shall have the meanings specified, insofar as the context will allow.
(a) Act: The term Act shall mean the Investment Company Act of 1940, as
amended from time to time.
(b) Board: The term Board shall mean the Board of Trustees of the Trust.
(c) Book-Entry Account: The term Book-Entry Account shall mean an account
maintained by a Federal Reserve Bank in which Book-Entry Securities are held.
(d) Book-Entry Securities: The term Book-Entry Securities shall mean
securities issued by the United States Treasury and United States Federal
agencies and instrumentalities that are maintained in the book-entry system
maintained by a Federal Reserve Bank.
(e) Custodian: The term Custodian shall mean Norwest Bank, Minnesota,
N.A., in its capacity as custodian under this Agreement.
<PAGE>
(f) Foreign Securities: The term Foreign Securities shall mean "Foreign
Securities" as that term is defined in Rule 17f-5 under the Act.
(g) Foreign Sub-Custodian: The term Foreign Sub-Custodian shall mean
"Eligible Foreign Sub-Custodian" as that term is defined in Rule 17f-5 under the
Act.
(h) Fund Business Day: The term Fund Business Day shall mean a day that
is a business day for a Series as defined in the Series' prospectus.
(i) Oral Instructions: The term Oral Instructions shall mean an
authorization, instruction, approval, item or set of data, or information of any
kind transmitted to the Custodian in person or by telephone, vocal telegram or
other electronic means, by a person or persons reasonably believed in good faith
by the Custodian to be a person or persons authorized by a resolution of the
Board to give Oral Instructions on behalf of the Trust. Each Oral Instruction
shall specify whether it is applicable to the entire Trust or a specific Series
of the Trust.
(j) Securities: The term Securities shall mean bonds, debentures, notes,
stocks, Interests, evidences of indebtedness, and other securities and
investments from time to time owned by the Trust.
(k) Securities Depository: The term Securities Depository shall mean a
system, domestic or foreign, for the central handling of securities in which all
securities of any particular class or series of any issuer deposited within the
system are treated as fungible and may be transferred or pledged by bookkeeping
entry without physical delivery of the securities and shall include any system
for the issuance of Book-Entry Securities.
(l) Series: The term Series shall mean the Series listed in Appendix A or
any series that the Trust and Custodian may in the future agree are subject to
this Agreement.
(m) Interestholders: The term Interestholders shall mean the registered
owners from time to time of the Interests, as reflected on the interest registry
records of the Trust.
(n) Interests: The term Interests shall mean the issued and outstanding
Interests of beneficial interest, no par value, of the Trust, including any
fractions thereof.
(o) Sub-Custodian: The term Sub-Custodian shall mean any person selected
by the Custodian under Section 20 hereof and in accordance with the requirements
of the Act to custody any or all of the Securities and cash of the Trust, and
shall include Foreign Sub-Custodians.
(p) Trust: The term Trust shall mean Norwest Funds.
(q) Written Instructions: The term Written Instructions shall mean an
authorization, instruction, approval, item or set of data, or information of any
kind transmitted to the Custodian in original writing containing original
signatures, or a copy of such document transmitted by
<PAGE>
telecopy, including transmission of such signature, or other mechanical or
documentary means, at the request of a person or persons reasonably believed in
good faith by the Custodian to be a person or persons authorized by a resolution
of the Board to give Written Instructions on behalf of the Trust. Each Written
Instruction shall specify whether it is applicable to the entire Trust or a
specific Series of the Trust.
(r) 1934 Act: The term 1934 Act shall mean the Securities Exchange Act of
1934, as amended from time to time.
SECTION 2. APPOINTMENT. The Trust hereby appoints the Custodian as
custodian of the Securities and cash of each Series from time to time on deposit
hereunder. The Securities and cash of the Trust shall be and remain the sole
property of the Trust and the Custodian shall have only custody thereof. The
Custodian shall hold, earmark and physically segregate for the appropriate
Series account of the Trust all non-cash property, including all Securities that
are not maintained pursuant to Section 6 in a Securities Depository or Book-
Entry Account. The Custodian will collect from time to time the dividends and
interest of the Securities held by the Custodian.
The Custodian shall open and maintain a separate bank or trust account or
accounts in the name of the Trust, subject only to draft or order by the
Custodian acting pursuant to the terms of this Agreement, and shall hold in such
account or accounts, subject to the provisions hereof, all cash received by it
from or for the account of the Trust. Notwithstanding the foregoing, a separate
bank account may be established by the Trust to be used as a petty cash account
in accordance with Rule 17f-3 under the Act and the Custodian shall have not
duty or liability with regard to such account.
Upon receipt of Written Instructions, funds held by the Custodian for the
Trust may be deposited by the Custodian to its credit in the banking department
of the Custodian or in such other banks or trust companies as it may in its
discretion deem necessary or desirable. Such funds shall be deposited by the
Custodian in its capacity as Custodian and shall be withdrawable by the
Custodian only in that capacity.
SECTION 3. DELIVERY OF BOARD RESOLUTIONS. The Trust shall, as necessary,
file with the Custodian a certified copy of the operative resolution of the
Board authorizing execution of Written Instructions and the number of
signatories required and setting forth authentic signatures of all signatories
authorized to sign on behalf of the Trust or any Series thereof. Such
resolution shall constitute conclusive evidence of the authority of all
signatories designated therein to act and shall be considered in full force and
effect, with the Custodian fully protected in acting in reliance thereon, until
the Custodian receives a certified copy of a replacement resolution adding or
deleting a person or persons authorized to give written Instructions.
The Trust shall, as necessary, file with the Custodian a certified copy of
the operative resolution of the Board authorizing the transmittal of Oral
Instructions and specifying the person or persons authorized to give Oral
Instructions on behalf of the Trust or any Series. Such resolution shall
constitute conclusive evidence of the authority of the person or persons
<PAGE>
designated therein to act and shall be considered in full force and effect, with
the Custodian fully protected in acting in reliance therein, until the Custodian
actually receives a certified copy of a replacement resolution adding or
deleting a person or persons authorized to give Oral Instructions. If the
officer certifying the resolution is authorized to give Oral Instructions, the
certification shall also be signed by a second officer of the Trust.
SECTION 4. INSTRUCTIONS. For all purposes under this Agreement, the
Custodian is authorized to act upon receipt of the first of any Written or Oral
Instruction it receives. If the first Instruction is an Oral Instruction, the
Trust shall deliver or have delivered to the Custodian a confirmatory Written
Instruction; and if the Custodian receives an Instruction, whether Written or
Oral, with respect to a Securities transaction, the Trust shall cause the broker
or dealer to send a written confirmation of the transaction to the Custodian.
The Custodian shall be entitled to rely on the first Instruction received and,
for any act or omission undertaken in compliance therewith, shall be free of
liability and fully indemnified and held harmless by the Trust. The sole
obligation of the Custodian with respect to any confirmatory Written Instruction
or broker or dealer written confirmation shall be to make reasonable efforts to
detect any discrepancy between the original Instruction and such confirmation
and to report such discrepancy to the Trust. The Trust shall be responsible, at
the Trust's expense, for taking any action, including any reprocessing,
necessary to correct any discrepancy or error, and to the extent such action
requires the Custodian to act, the Trust shall give the Custodian specific
Written Instructions as to the action required.
SECTION 5. DEPOSIT OF TRUST ASSETS. The Trust will initially transfer and
deposit or cause to be transferred and deposited with the Custodian all of the
Securities, other property and cash owned by the Trust at the time this
Agreement becomes effective, provided that the Custodian shall have the right,
in its sole discretion, to refuse to accept any securities or other property
that are not in proper form for deposit or any reason. Such transfer and
deposit shall be evidenced by appropriate schedules duly executed by the Trust.
The Trust may deposit with the Custodian additional Securities of the Trust and
dividends or interest collected on such Securities as the same are acquired from
time to time.
The Trust will cause to be deposited with the Custodian from time to time
(i) the net proceeds of Securities sold, (ii) the applicable net asset value of
Interests sold, whether representing initial issue or any other securities and
(iii) cash as may be acquired. Deposits with respect to sales of Interests
shall be accompanied by Written or Oral Instructions stating the amount to be
deposited with the Custodian and registration instructions.
SECTION 6. DEPOSIT OF TRUST ASSETS WITH THIRD PARTIES. The Trust hereby
authorizes the Custodian to deposit assets of the Trust as follows:
(a) With the Custodian or any other bank licensed and regularly examined
by the United States or any state thereof assets held in the Option Account
created pursuant to Section 13(b).
<PAGE>
(b) In the Custodian's or Sub-Custodian's account(s) with any Securities
Depository as the Trust shall permit by Written or Oral Instruction.
(c) Book-Entry Securities belonging to the Trust in a Book-Entry Account
maintained for the Custodian.
So long as any deposit referred to in (b) or (c) above is maintained for
the Trust, the Custodian shall: (i) deposit the Securities in an account that
includes only assets held by the Custodian for customers; (ii) send the Trust a
confirmation (i.e., an advice of notice of transaction) of any transfers of the
Trust to or from the account; (iii) with respect to Securities of the Trust
transferred to the account, identify as belonging to the Trust a quantity of
securities in a fungible bulk of securities that are registered in the name of
the Custodian or its nominee, or credited to the Custodian's account on the
books of a Securities Depository or the Custodian's agent; (iv) promptly send to
the Trust all reports it receives from the appropriate Federal Reserve Bank or
Securities Depository on its respective system of internal accounting control;
and (v) send to the Trust such reports of the systems of internal accounting
control of the Custodian and its agents through which Securities are deposited
as are available and as the Trust may reasonably request from time to time.
The Custodian shall be liable to the Trust for any loss or damage to the
Trust resulting from the negligence (including failure to act), fault or willful
misconduct of the Custodian, its agents or employees in selecting a Securities
Depository or Book-Entry Account. The Custodian shall not waive any rights it
may have against a Securities Depository or Federal Reserve Bank. The Trust may
elect to be subrogated to the rights of the Custodian against the Securities
Depository or Federal Reserve Bank or any other person with respect to any claim
that the Custodian may have as a consequence of any such loss or damage, if and
to the extent that the Trust has not been made whole for any such loss or
damage.
SECTION 7. REGISTRATION OF SECURITIES. The Securities held by the
Custodian, unless payable to bearer or maintained in a Securities Depository or
Book-Entry Account pursuant to Section 6, shall be registered in the name of the
Custodian or in the name of its nominee, or if directed by Written Instructions,
in the name of the Trust or its nominee. In the event that any Securities are
registered in the name of the Trust or its nominee, the Trust will endorse, or
cause to be endorsed, to the Custodian dividend and interest checks, or will
issue appropriate orders to the issuers of the Securities to pay dividends and
interest to the Custodian. Securities, excepting bearer securities, delivered
from time to time to the Custodian shall, in all cases, be in due form for
transfer, or registered as above provided.
SECTION 8. DISBURSEMENTS OF CASH. The Custodian is hereby authorized and
directed to disburse cash to or from the Trust from time to time as follows:
(a) For the purchase of Securities by the Trust, upon receipt by the
Custodian of (i) Written or Oral Instructions specifying the Securities and
stating the purchase price and the name of the broker, investment banker or
other party to or upon whose order the purchase price is to be paid and (ii)
either the Securities so purchased, in due form for transfer or already
registered as
<PAGE>
provided in Section 7, or notification by a Securities Depository or a Federal
Reserve Bank that the Securities have been credited to the Custodian's account
with the Securities Depository or Federal Reserve Bank.
(b) For transferring funds, including mark-to-the-market payments, in
connection with a repurchase agreement covering Securities that have been
received by the Custodian as provided in subsection (a) above, upon receipt by
the Custodian of (i) Written or Oral Instruction specifying the Securities, the
purchase price and the party to whom the purchase price is to be paid and (ii)
written agreement to repurchase the Securities from the Trust.
(c) For transferring funds to a duly-designated redemption paying agent to
redeem or repurchase Interests, upon receipt of Written or Oral Instructions
stating the applicable redemption price.
(d) For exercising warrants and rights received upon the Securities, upon
timely receipt of Written or Oral Instructions authorizing the exercise of such
warrants and rights and stating the consideration to be paid.
(e) For repaying, in whole or in part, any loan of the Trust, or returning
cash collateral for Securities loaned by the Trust, upon receipt of Written or
Oral Instructions directing payment and stating the Securities, if any, to be
received against payment.
(f) For paying over to a duly-designated dividend disbursing agent such
amounts as may be stated in Written or Oral Instructions as the Trust deems
appropriate to include in dividends or distributions declared on the Interests.
(g) For paying or reimbursing the Trust for other corporate expenditures,
upon receipt of Written or Oral Instructions stating that such expenditures are
or were authorized by resolution of the Board and specifying the amount of
payment, the purposes for which such payment is to be made, and the person or
persons to whom payment is to be made.
(h) For transferring funds to any Sub-Custodian, upon receipt of Written
or Oral Instructions and upon agreement by the Custodian.
(i) To advance or pay out accrued interest on bonds purchased, dividends
on stocks sold and similar items.
(j) To pay proper compensation and expenses of the Custodian.
(k) To pay, or provide the Trust with money to pay, taxes, upon receipt of
appropriate Written or Oral Instructions.
(l) To transfer funds to a separate checking account maintained by the
Trust.
<PAGE>
(m) To pay interest, management or supervisory fees, administration,
dividend and transfer agency fees and costs, compensation of personnel and
operating expenses, including but not limited to fees for legal, accounting and
auditing services.
Before making any payments or disbursements, however, the Custodian shall
receive, and may conclusively rely upon, Written or Oral Instructions requesting
such payment or disbursement and stating that it is for one or more or the
purposes enumerated above. Notwithstanding the foregoing, the Custodian may
disburse cash for other corporate purposes; provided, however, that such
disbursement maybe made only upon receipt of Written or Oral Instructions
stating that such disbursement was authorized by resolution of the Board.
SECTION 9. DELIVERY OF SECURITIES. The Custodian is hereby authorized and
directed to deliver Securities of the Trust from time to time as follows:
(a) For completing sales of Securities sold by the Trust, upon receipt of
(i) Written or Oral Instructions specifying the Securities sold, the amount to
be received and the broker, investment banker or other party to or upon whose
order the Securities are to be delivered and (ii) the net proceeds of sale;
provided, however, that the Custodian may accept payment in connection with the
sale of Book-Entry Securities and Securities on deposit with a Securities
Depository by means of a credit in the appropriate amount to the account
described in Section 6(b) or (c) above.
(b) For exchanging Securities for other Securities (and cash, if
applicable), upon timely receipt of (i) Written or Oral Instructions stating the
Securities to be exchanged, cash to be received and the manner in which the
exchange is to be made and (ii) the other Securities (and cash, if applicable)
as specified in the Written or Oral Instructions.
(c) For exchanging or converting Securities pursuant to their terms or
pursuant to any plan of conversion, consolidation, recapitalization,
reorganization, re-adjustment or otherwise, upon timely receipt of (i) Written
or Oral Instructions authorizing such exchange or conversion and stating the
manner in which such exchange or conversion is to be made and (ii) the
Securities, certificates of deposit, interim receipts, and/or cash to be
received as specified in the Written or Oral Instructions.
(d) For presenting for payment Securities that have matured or have been
called for redemption;
(e) For delivering Securities upon redemption of Interests in kind, upon
receipt of appropriate Written or Oral Instructions.
(f) For depositing with the lender Securities to be held as collateral for
a loan to the Trust or depositing with a borrower Securities to be loaned by the
Trust, (i) upon receipt of Written or Oral Instructions directing delivery to
the lender or borrower and suitable collateral, if Securities are loaned or (ii)
pursuant to the terms of a separate securities lending agreement.
<PAGE>
(g) For complying with a repurchase agreement, upon receipt of Written or
Oral Instructions stating (i) the securities to be delivered and the payment to
be received and (ii) payment.
(h) For depositing with a depository agent in connection with a tender or
other similar offer to purchase Securities of the Trust, upon receipt of Written
or Oral Instructions.
(i) For depositing Securities with the issuer thereof, or its agents, for
the purpose of transferring such Securities into the name of the Trust, the
Custodian or any nominee of either in accordance with Section 7.
(j) For other proper corporate purposes; provided, that the Custodian
shall receive Written or Oral Instructions requesting such delivery.
(k) Notwithstanding the foregoing, the Custodian may, without Written or
Oral Instructions, surrender and exchange Securities for other Securities in
connection with any reorganization, recapitalization, or similar transaction in
which the owner of the Securities is not given an option; provided, however,
that the Custodian has no responsibility to effect any such exchange unless it
has received actual notice of the event permitting or requiring such exchange.
To facilitate any such exchange, the Custodian is authorized to surrender
against payment maturing obligations and obligations called for redemption and
to effectuate the exchange in accordance with customary practices and procedures
established in the market for exchanges.
SECTION 10. BORROWINGS. The Trust will cause any person (including the
Custodian) from which it borrows money using Securities as collateral to deliver
to the Custodian a notice of undertaking in the form currently employed by the
lender setting forth the amount that the lender will loan to the Trust against
delivery of a stated amount of collateral. The Trust shall promptly deliver to
the Custodian Written or Oral Instructions for each loan, stating (i) the name
of the lender, (ii) the amount and terms of the loan, which terms may be
specified by incorporating by reference an attached promissory note or loan
agreement duly endorsed by the Trust, (iii) the time and date, if known, on
which the loan will be consummated (the "borrowing date"), (iv) the date on
which the loan becomes due and payable, (v) the total amount payable to the
Trust on the borrowing date, (vi) the market value of Securities to be delivered
as collateral for such loan and (vii) the name of the issuer, the title and the
number of Interests or principal amount of the Securities to be delivered as
collateral. The Custodian shall deliver on the borrowing date such specified
collateral and the executed promissory note, if any, and receive from the lender
the total amount of the loan proceeds; provided, however, that no delivery of
Securities shall occur if the amount of loan proceeds does not conform to the
amount set forth in the Written or Oral Instructions, or if such Instruction do
not contain the requirements of (vii) above. The Custodian may, at the option
of the lender, keep such collateral in its possession; provided such collateral
is subject to all rights given the lender by any promissory note or loan
agreement executed by the Trust.
The Custodian shall deliver, from time to time, any Securities required as
additional collateral for any transaction described in this Section, upon
receipt of Written or Oral
<PAGE>
Instructions. The Trust shall cause all Securities released from collateral
status to be returned directly to the Custodian.
SECTION 11. INDEBTEDNESS TO CUSTODIAN. If, in its sole discretion, the
Custodian advances funds to the Trust to pay for the purchase of Securities, to
cover an overdraft of the Trust's account with the Custodian, or to pay any
other indebtedness to the Custodian, the Trust's indebtedness shall be deemed to
be a loan by the Custodian to the Trust, payable on demand and bearing interest
at the rate then charged by the Custodian for such loans; provided, however,
that the Custodian shall give the Trust notice of any such advance that exceeds
five percent of the value of the Securities and cash held by the Custodian at
the time of the advance. The Trust hereby agrees that the Custodian shall have
a continuing lien and security interest, to the extent of any such overdraft or
indebtedness, in any property then held by the Custodian or its agents for the
benefit of the Trust, or in which the Trust may have an interest. The Trust
authorizes the Custodian, in its sole discretion at any time, to charge any such
overdraft or indebtedness, together with interest due thereon, against any
balance then credited to the Trust on the Custodian's books.
SECTION 12. SECURITIES LOANS. The Custodian may from time to time lend
securities of the Trust in accordance with and pursuant to a separate securities
lending agreement.
SECTION 13. OPTION CONTRACTS. The Custodian's responsibilities regarding
option contracts will be governed by the following sub-paragraphs:
(a) Unless more particularly described below, Written or Oral Instructions
regarding option contracts purchased or sold by any Series shall state (i) the
price at which the underlying Security may be bought or sold, (ii) the issuer,
the title and number of the Interests or principal amount of such Security,
(iii) the premium to be paid, (iv) the expiration date of the option contract,
(v) if the transaction is a "closing sale transaction," whether the sale
requires delivery of a certificate of ownership to the broker through whom the
sale is made and (vi) if the transaction is a purchase of an option contract,
the requirement that payment of the premium be made only upon receipt of a
certificate of ownership executed by the broker through whom the purchase is
made.
(b) Whenever a Series sells an option contract, Written or Oral
Instructions to the Custodian must state (ii) the issuer, the title and number
of Interests or principal amount of the Security subject to the option contract,
(ii) the exercise price of the option contract, (iii) the expiration date of the
option contract, (iv) the premium to be received by the Series, (v) the name of
the broker from whom the premium is to be received and (vi) if the option is a
call, whether it is covered.
If the option contract sold is a put, the Written or Oral Instructions
shall also state (i) the amount and kind of collateral required by the broker or
(ii) the amount and kind of assets of the Series, if any, that shall be
segregated from the general assets of the Series and held by the Custodian in a
segregated option account (the "Option Account"). If collateral is required,
the Custodian shall deliver the collateral directly to the broker through whom
such option was
<PAGE>
written and receive in return a receipt and a confirmation of the option
transaction, in accordance with the customs prevailing among brokers in such
securities. If an Option Account is established, the Custodian shall maintain
it as specified in Written or Oral Instructions.
(c) If the Custodian (i) acts as escrow agent with respect to a covered
call option contract, (ii) maintains securities underlying a covered call option
contract with a Securities Depository or (iii) holds assets in the Option
Account in connection with a put option contract, the Custodian shall deliver,
or cause to be delivered, all receipts required by the customs prevailing among
dealers in such securities.
(d) If an option contract purchased or sold by any Series expires, the
Trust will deliver to the Custodian Written or Oral Instructions containing the
information specified in paragraph (b) above and instructing the Custodian to
(i) delete such option contract from the list of holdings that the Custodian
maintains for that Series and (ii) either remove from the Option Account
specified assets held with respect to such option or remove the restriction on
any securities underlying a covered call option contract, as the case may be.
Upon the return and/or cancellation or expiration of any receipts issued
pursuant to paragraph (c) above, the Custodian shall remove such restriction,
delete the option from the list of holdings maintained by the Custodian and
transfer the assets to the general account maintained by the Custodian for the
benefit of the Series. Collateral delivered by a broker with whom it was
previously deposited pursuant to paragraph (b) above shall, if identical with
the collateral specified in the receipt previously issued by such broker, be
accepted by the Custodian and held in the general account maintained by the
Custodian for the benefit of the Series. The Custodian shall accept delivery of
collateral not specified in such a receipt only upon receipt of Written or Oral
Instructions.
(e) If a covered call option sold by a Series is exercised, the Trust
shall promptly furnish the Custodian with Written or Oral Instructions stating
(i) the issuer, the title and number of Interests or principal amount of the
Security subject to the option contract, (ii) the person to whom the underlying
Securities are to be delivered, (iii) the amount to be received and held by the
Custodian upon delivery and (iv) the assets, if any, to be removed from the
Option Account or the collateral, if any, to be returned by a broker with whom
it was deposited under paragraph (b) above.
(f) If a put option contract sold by a Series is exercised, the Trust
shall promptly furnish the Custodian with Written or Oral Instructions stating
(i) the issuer, the title and number of Interests or principal amount of the
Security subject to the option contract, (ii) the name of the person whom the
Custodian will pay for Securities subject to the put, in return for receipt of
such Securities, (iii) the amount of such payment and (iv) the assets, if any,
to be removed from the Option Account or the collateral, if any, to be returned
by a broker with whom it was deposited under paragraph (b) above.
(g) In the event a Series purchases, in a "closing purchase transaction,"
an option contract identical to a previously sold option contract in order to
liquidate its position as a seller of a call option contract, the Trust will
deliver to the Custodian Written or Oral Instructions stating (i) the issuer,
the title and number of Interests or principal amount of the Security subject
<PAGE>
to the option contract, (ii) the exercise price of the option contract, (iii)
the premium to be paid, (iv) the expiration date of the option contract and (v)
the name of the person to whom the premium is to be paid. Upon the Custodian's
payment of the premium and the return and/or cancellation of any receipts issued
pursuant to paragraph (c) above, the Custodian shall (i) either remove from the
Option Account the assets held therein or remove the previously-composed
restrictions on the Securities underlying the option that is liquidated by
reason of the Closing Purchase Transaction, (ii) delete such option from the
list of holdings maintained by that Series and (iii) transfer such Securities or
assets to the general account maintained by the Custodian for the benefit of the
Series. Collateral delivered by a broker with whom it was previously deposited
pursuant to paragraph (b) above shall, if identical with the collateral
specified in the receipt previously issued by such broker, be accepted by the
Custodian and transferred to the general account maintained by the Custodian for
the benefit of the Series. The Custodian shall accept delivery of collateral
not specified in such a receipt only upon receipt of Written or Oral
Instructions.
(h) If a Series exercises an option contract held by the Custodian, the
Trust shall deliver to the Custodian, at least 24 hours before the last business
day on which such option contract may be exercised, Written or Oral Instructions
containing the information required under paragraph (a) above and instructing
the Custodian (i) in the case of a put option contract, to deliver the
securities subject the put to the broker specified in the Written or Oral
Instructions, in return for receipt of the exercise price or (ii) in the case of
a covered call option contract, to pay the exercise price of the option contract
to the broker specified in the Written or Oral Instructions, in return for
receipt of the Securities subject to the call.
(i) The Custodian shall have no duty or obligation to see that a Series
has deposited or is maintaining adequate margin, if required, with any broker in
connection with an option contract. The Custodian shall have no duty or
obligation to present such option contract to the broker unless it receives
Written or Oral Instructions from the Trust. The Custodian shall have no
responsibility for (i) the legality of any option contract purchased or sold on
behalf of a Series, (ii) the propriety of any such purchase or sale and (iii)
the adequacy of any collateral delivered to a broker in connection with an
option or held in the Option Account.
SECTION 14. EXERCISE OF POWERS WITH RESPECT TO SECURITIES. The Custodian
assumes no duty, obligation or responsibility whatsoever to exercise any voting
or consent powers with respect to the Securities held by it from time to time
hereunder. The Trust or such persons as it may designate shall have the right
to vote, consent or otherwise act with respect to Securities. The Custodian
will exercise its best efforts (as defined in Section 16) to furnish to the
Trust in a timely manner all proxies or other appropriate authorizations with
respect to Securities registered in the name of the Custodian or its nominee, so
that the Trust or its designee may vote, consent or otherwise act.
SECTION 15. COMPENSATION.
(a) The Custodian shall receive no compensation for its services
hereunder.
<PAGE>
(b) The Trust shall pay all fees and expenses of any Sub-Custodian
approved by the Trust.
SECTION 16. CORPORATE ACTIVITY. The Custodian will exercise its best
efforts to forward to the Trust in a timely manner all notices of interestholder
meetings, proxy statements, annual reports, conversion notices, call notices, or
other notices or written materials of any kind (excluding dividend, principal
and interest payments) sent to the Custodian as registered owner of Securities.
Best efforts as used in this Agreement shall mean the efforts reasonably
believed in good faith by the Custodian to be adequate in the circumstances.
Upon receipt of warrants or rights issued in connection with the assets of
the Trust, the Custodian shall enter into its ledgers appropriate notations
indicating such receipt and shall notify the Trust of such receipt. However,
the Custodian shall have no obligation to take any other action with respect to
such warrants or rights, except as directed in Written or Oral Instructions.
Custodian shall take all reasonable actions, as agreed to by the Trust and
the Custodian, to assist the Trust in obtaining from year to year favorable
opinions from the Trust's independent auditors with respect to the Custodian's
activities hereunder.
SECTION 17. RECORDS. The Custodian acknowledges and agrees that all books
and records maintained for the Trust in any capacity under this Agreement are
the property of the Trust and may be inspected by the Trust or any authorized
regulatory agency at any reasonable time. Upon request all such books and
records will be surrendered promptly to the Trust. The Custodian agrees to make
available upon request and to preserve for the periods prescribed in Rule 31a-2
of the Act any records related to services provided under this Agreement and
required to be maintained by Rule 31a-1 under the Act.
SECTION 18. LIABILITY. The Custodian assumes only the usual duties and
obligations normally performed by custodians of open-end investment companies.
The Custodian specifically assumes no responsibility for the management,
investment or reinvestment of the Securities from time to time owned by the
Trust, whether or not on deposit hereunder. The Custodian assumes no duty,
obligation or responsibility whatsoever with respect to Securities not deposited
with the Custodian.
The Custodian may rely upon the advice of counsel, who may be counsel for
the Trust or for the Custodian, and upon statements of accountants, brokers or
other persons believed by the Custodian in good faith to be expert in the
matters upon which they are consulted. The Custodian shall not be liable for
any action taken in good faith reliance upon such advice or statements. The
Custodian shall not be liable for action taken in good faith in accordance with
any Written or Oral Instructions, request or advice of the Trust or its
officers, or information furnished by the Trust or its officers. The Custodian
shall not be liable for any non-negligent action taken in good faith and
reasonably believed by it to be within the powers conferred upon it by this
Agreement.
<PAGE>
No liability of any kind, other than to the Trust, shall attach to the
Custodian by reason of its custody of the Securities and cash held by the
Custodian hereunder or otherwise as a result of its custodianship. In the event
that any claim shall be made against the Custodian, it shall have the right to
pay the claim and reimburse itself from the assets of the Trust; provided,
however, that no such reimbursement shall occur unless the Trust is notified of
the claim and is afforded an opportunity to contest or defend the claim, if it
so elects. The Trust agrees to indemnify and hold the Custodian harmless for
any loss, claim, damage or expense arising out of the custodian relationship
under this Agreement; provided such loss, claim, damage or expense is not the
direct result of the Custodian's negligence or willful misconduct.
SECTION 19. TAXES. The Custodian shall not be liable for any taxes,
assessments or governmental charges that may be levied or assessed upon the
Securities held by it hereunder, or upon the income therefrom. Upon Written or
Oral Instruction, the Custodian may pay any such tax, assessment or charge and
reimburse itself out of the monies of the Trust or the Securities held
hereunder.
SECTION 20. SUB-CUSTODIANS.
(a) The Custodian may from time to time request appointment of one or more
Sub-Custodians. Upon receipt of Written or Oral Instructions authorizing the
use of a Sub-Custodian, the Custodian shall appoint one or more Sub-Custodians
or Foreign Sub-Custodians of Securities and cash owned by the Trust from time to
time.
(b) Custodian shall cause Foreign Securities and amounts of cash
reasonably required to effect Trust's Foreign Securities transactions in the
Custodian Account to be held in such countries or other jurisdictions as Trust
shall direct in Written or Oral Instructions.
Custodian may hold Foreign Securities and cash in sub-custody accounts,
which shall be deemed part of the Custodian Account and which have been
established by Custodian or by a Sub-Custodian with those Foreign Sub-Custodians
as Trust shall approve in Written or Oral Instructions.
Each Foreign Sub-Custodian is authorized to hold Foreign Securities in an
account with any foreign Securities Depository as Trust shall approve in Written
or Oral Instructions.
The contractual agreement between the Custodian and any Foreign Sub-
Custodian must provide at a minimum that the Foreign Sub-Custodian shall
provide, obtain or use its best efforts to assist the Trust in obtaining
information responsive to the "notes" to Rule 17f-5 under the Act with respect
to (i) each country or jurisdiction where the Trust's assets are proposed to be
maintained, are maintained or in the future may be maintained and (ii) each
Foreign Sub-Custodian which is proposed to hold, holds or in the future may hold
Foreign Securities or cash of the Trust. Notwithstanding any other provisions
of this Agreement, each Foreign Sub-Custodian's undertaking to assist Trust in
obtaining such information shall neither increase the Foreign Sub-Custodian's
duty of care nor reduce Trust's responsibility to determine for itself the
<PAGE>
prudence of entrusting its assets to any particular Foreign Sub-Custodian or
foreign Securities Depository.
The Custodian shall deposit Foreign Securities and cash of the Trust with a
Foreign Sub-Custodian only in an account of the Foreign Sub-Custodian which
holds only assets held by Custodian as custodian for its customers. In the
event that a Foreign Sub-Custodian is authorized to hold any of the Foreign
Securities placed in its care in a foreign Securities Depository, Custodian will
direct the Foreign Sub-Custodian to identify the Foreign Securities on the books
of the foreign Securities Depository as being held for the account of Custodian
as custodian for its customers.
(c) The Custodian shall have no liability to the Trust by reason of any
act or omission of any Sub-Custodian approved by the Trust, and the Trust shall
indemnify the Custodian and hold it harmless from and against any and all
actions, suits, claims, losses, damages, costs, charges, counsel fees, payments,
expenses and liabilities arising directly or indirectly out of or in connection
with the performance of any Sub-Custodian approved by the Trust. The Custodian
assigns to the Trust any and all claims for any losses, costs, expenses, or
damages that may be incurred by the Trust by reason of the negligence, gross
negligence or misconduct of any Sub-Custodian approved by the Trust, or by
reason of the failure of a Sub-Custodian approved by the Trust to perform in
accordance with any applicable agreement, including instructions of the
Custodian. The Custodian shall be under no obligation to prosecute or to defend
any action, suit or claim arising out of, or in connection with, the performance
of any Sub-Custodian approved by the Trust, if, in the opinion of the
Custodian's counsel, such action will involve expense or liability to the
Custodian. The Trust shall, upon request, furnish the Custodian with
satisfactory indemnity against such expense or liability, and upon request of
the Custodian, the Trust shall assume the entire defense of any action, suit, or
claim subject to the foregoing indemnity.
With respect to each Sub-Custodian not approved by the Trust, which may not
be a Foreign Sub-Custodian, the Custodian shall be liable to the Trust for any
loss which shall occur as a result of the failure of the Sub-Custodian to
exercise reasonable care with respect to the safekeeping of assets to the same
extent that the Custodian would be liable to the Trust if the Custodian were
holding such assets in its own premises. The Custodian shall be liable to the
Trust under this paragraph only to the extent of the Trust's direct damages, to
be determined based on the market value of the assets which are subject to loss
and without reference to any special conditions or circumstances.
SECTION 21. EFFECTIVENESS, DURATION AND TERMINATION.
(a) This Agreement may be executed in more than one counterpart, each of
which shall be deemed to be an original, and shall become effective on the date
hereof. This Agreement shall remain in effect for a period of one year from the
date of its effectiveness and shall continue in effect for successive twelve-
month periods; provided that such continuance is specifically approved at least
annually by the Board and by a majority of the Trustees who are not parties to
this Agreement or interested persons of any such party.
<PAGE>
(b) This Agreement may be terminated by either party upon notice to the
other. The termination shall become effective at the time specified in the
notice but no earlier than sixty (60) days after the date of the notice. Upon
notice of termination, the Trust shall use its best efforts to obtain a
successor custodian. If a successor custodian is not appointed within ninety
(90) days after the date of the notice of termination, the Board shall, by
resolution, designate the Trust as its own custodian. Each successor custodian
shall be a person qualified to serve under the Act. Promptly following receipt
of written notice from the Trust of the appointment of a successor custodian and
receipt of Written or Oral Instructions, the Custodian shall deliver all
Securities and cash it then holds directly to the successor custodian and shall,
upon request of the Trust and the successor custodian and upon payment of the
Custodian's reasonable charges and disbursements, (i) execute and deliver to the
successor custodian an instrument approved by the successor custodian's counsel
transferring to the successor custodian all the rights, duties and obligations
of the Custodian, (ii) transfer to the successor custodian the originals or
copies of all books and records maintained by the Custodian hereunder and (iii)
cooperate with, and provide reasonable assistance to, the successor custodian in
the establishment of the books and records necessary to carry out the successor
custodian's responsibilities hereunder. Upon delivery of the Securities and
other assets of the Trust and compliance with the other requirements of this
Section 21, the Custodian shall have no further duty or liability hereunder.
Every successor custodian appointed hereunder shall execute and deliver an
appropriate written acceptance of its appointment and shall thereupon become
vested with the rights, duties and obligations of the predecessor custodian.
SECTION 22. REQUIRED PERFORMANCE ON FUND BUSINESS DAYS. Nothing contained
in this Agreement is intended to or shall require the Custodian, in any capacity
hereunder, to perform any functions or duties on any day other than a Fund
Business Day. Functions or duties normally scheduled to be performed on any day
which is not a Fund Business Day shall be performed on, and as of, the next Fund
Business Day unless otherwise required by law.
SECTION 23. MISCELLANEOUS.
(a) This Agreement shall extend to and bind the parties hereto and their
respective successors and assigns; provided, however, that this Agreement shall
not be assignable by the Trust without the written consent of the Custodian, or
by the Custodian without the written consent of the Trust. Notwithstanding the
foregoing, either party may assign this Agreement without the consent of the
other party so long as the assignee is an affiliate, parent or subsidiary of the
assigning party and the assignee of the Custodian is qualified to serve as
custodian under the Act.
(b) This Agreement shall be governed by and construed in accordance with
the laws of the State of Minnesota.
(c) The captions inserted herein are for convenience of reference and
shall not affect, in any way, the meaning or interpretation of this Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
NORWEST FUNDS
------------------------------
John Y. Keffer
President
NORWEST BANK MINNESOTA, N.A.
------------------------------
Jay Kiedrowski
Executive Vice President
<PAGE>
CORE TRUST (DELAWARE)
CUSTODIAN AGREEMENT
APPENDIX A
SERIES OF THE TRUST
International Portfolio
International Portfolio II
Small Company Portfolio
Index Portfolio
<PAGE>
EXHIBIT (8)(b)
<PAGE>
EXHIBIT (8)(b)
CORE TRUST (DELAWARE)
GLOBAL CUSTODY AGREEMENT
AGREEMENT, dated as of November 9, 1994 between The Chase Manhattan Bank,
N.A. (the "Bank") and Core Trust (Delaware) (the "Customer") on behalf of each
series of the Customer listed in Schedule A hereto (each series, a "Fund").
SECTION 1. CUSTOMER ACCOUNTS
The Bank agrees to establish and maintain the following accounts
("Accounts"):
(a) A custody account in the name of the Customer ("Custody Account") for
any and all stocks, shares, bonds, debentures, notes, mortgages or
other obligations for the payment of money, bullion, coin and any
certificates, receipts, warrants or other instruments representing
rights to receive, purchase or subscribe for the same or evidencing or
representing any other rights or interests therein and other similar
property whether certificated or uncertificated as may be received by
the Bank or its Subcustodian (as defined in Section 3) for the account
of the Customer ("Securities"); and
(b) A deposit account in the name of the Customer ("Deposit Account") for
any and all cash in any currency received by the Bank or its
Subcustodian for the account of the Customer, which cash shall not be
subject to withdrawal by draft or check.
The Customer warrants its authority to: 1) deposit the cash and Securities
("Assets") received in the Accounts and 2) give Instructions (as defined in
Section 11) concerning the Accounts. The Bank may deliver securities of the
same class in place of those deposited in the Custody Account.
Upon written agreement between the Bank and the Customer, additional
Accounts may be established and separately accounted for as additional Accounts
under the terms of this Agreement.
SECTION 2. MAINTENANCE OF SECURITIES AND CASH AT BANK AND SUBCUSTODIAN
LOCATIONS
Unless Instructions specifically require another location acceptable to the
Bank:
(a) Securities will be held in the country or other jurisdiction in which
the principal trading market for such Securities is located, where
such Securities are to be presented for payment or where such
Securities are acquired; and
<PAGE>
(b) Cash will be credited to an account in a country or other jurisdiction
in which such cash may be legally deposited or is the legal currency
for the payment of public or private debts.
Cash may be held pursuant to Instructions in either interest or non-
interest bearing accounts as may be available for the particular currency. To
the extent Instructions are issued and the Bank can comply with such
Instructions, the Bank is authorized to maintain cash balances on deposit for
the Customer with itself or one of its affiliates at such reasonable rates of
interest as may from time to time be paid on such accounts, or in non-interest
bearing accounts as the Customer may direct, if acceptable to the Bank.
If the Customer wishes to have any of its Assets held in the custody of an
institution other than the established Subcustodians as defined in Section 3 (or
their securities depositories), such arrangement must be authorized by a written
agreement, signed by the Bank and the Customer.
SECTION 3. SUBCUSTODIANS AND SECURITIES DEPOSITORIES
The Bank may act under this Agreement through the Subcustodians listed in
Schedule B of this Agreement with which the Bank has entered into subcustodial
agreements (Subcustodians"). The Customer authorizes the Bank to hold Assets in
the Accounts in accounts which the Bank has established with one or more of its
branches or Subcustodians. The Bank and Subcustodians are authorized to hold
any of the Securities in their account with any securities depository in which
they participate.
The Bank reserves the right to add new, replace or remove Subcustodians.
The Customer will be given reasonable notice by the Bank of any amendment to
Schedule B. Upon request by the Customer, the Bank will identify the name,
address and principal place of business of any Subcustodian of the Customer's
Assets and the name and address of the governmental agency or other regulatory
authority that supervises or regulates such Subcustodian.
SECTION 4. USE OF SUBCUSTODIAN
(a) The Bank will identify such Assets on its books as belonging to the
Customer.
(b) A Subcustodian will hold such Assets together with assets belonging to
other customers of the Bank in accounts identified on such
Subcustodian's books as special custody accounts for the exclusive
benefit of customers of the Bank.
(c) Any Assets in the Accounts held by a Subcustodian will be subject only
to the instructions of the Bank or its agent. Any Securities held in
a securities depository for the account of a Subcustodian will be
subject only to the instructions of such Subcustodian.
(d) Any agreement the Bank enters into with a Subcustodian for holding its
customer's assets shall provide that such assets will not be subject
to any right,
<PAGE>
charge, security interest, lien or claim of any kind in favor of such
Subcustodian except for safe custody or administration, and that the
beneficial ownership of such assets will be freely transferable
without the payment of money or value other than for safe custody or
administration. The foregoing shall not apply to the extent of any
special agreement or arrangement made by the Customer with any
particular Subcustodian.
SECTION 5. DEPOSIT ACCOUNT TRANSACTIONS
(a) The Bank or its Subcustodians will make payments from a Deposit
Account upon receipt of Instructions which include all information
required by the Bank.
(b) In the event that any payment to be made under this Section 5 exceeds
the funds available in a Deposit Account, the Bank, in its discretion,
may advance the Customer such excess amount which shall be deemed a
loan payable on demand, bearing interest at the rate customarily
charged by the Bank on similar loans.
(c) If the Bank credits a Deposit Account on a payable date, or at any
time prior to actual collection and reconciliation to that Deposit
Account, with interest, dividends, redemptions or any other amount
due, the Customer will promptly return any such amount upon oral or
written notification: (i) that such amount has not been received in
the ordinary course of business or (ii) that such amount was
incorrectly credited. If the Customer does not promptly return any
amount upon such notification, the Bank shall be entitled, upon oral
or written notification to the Customer, to reverse such credit by
debiting the Deposit Account for the amount previously credited. The
Bank or its Subcustodian shall have no duty or obligation to institute
legal proceedings, file a claim or a proof of claim in any insolvency
proceeding or take any other action with respect to the collection of
such amount, but may act for the Customer upon Instructions after
consultation with the Customer.
SECTION 6. CUSTODY ACCOUNT TRANSACTIONS
(a) Securities will be transferred, exchanged or delivered by the Bank or
its Subcustodian upon receipt by the Bank of Instructions which
include all information required by the Bank. Settlement and payment
for Securities received for, and delivery of Securities out of, a
Custody Account may be made in accordance with the customary or
established securities trading or securities processing practices and
procedures in the jurisdiction or market in which the transaction
occurs, including, without limitation, delivery of Securities to a
purchaser, dealer or their agents against a receipt with the
expectation of receiving later payment and free delivery. Delivery of
Securities out of a Custody Account may also be made in any manner
specifically required by Instructions acceptable to the Bank.
<PAGE>
(b) The Bank, in its discretion, may credit or debit an Account on a
contractual settlement date with cash or Securities with respect to
any sale, exchange or purchase of Securities. Otherwise, such
transactions will be credited or debited to the Account on the date
cash or Securities are actually received by the Bank and reconciled to
the Account.
(i) The Bank may reverse credits or debits made to an Account in its
discretion if the related transaction fails to settle within a
reasonable period, determined by the Bank in its discretion,
after the contractual settlement date for the related
transaction.
(ii) If any Securities delivered pursuant to this Section 6 are
returned by the recipient thereof, the Bank may reverse the
credits and debits of the particular transaction at any time.
SECTION 7. ACTIONS OF THE BANK
The Bank shall follow Instructions received regarding assets held in the
Accounts. However, until it receives Instructions to the contrary, the Bank
will:
(a) Present for payment any Securities which are called, redeemed or
retired or otherwise become payable and all coupons and other income
items which call for payment upon presentation, to the extent that the
Bank or Subcustodian is actually aware of such opportunities.
(b) Execute in the name of the Customer such ownership and other
certificates as may be required to obtain payments in respect of
Securities.
(c) Exchange interim receipts or temporary Securities for definitive
Securities.
(d) Appoint brokers and agents for any transaction involving the
Securities, including, without limitation, affiliates of the Bank or
any Subcustodian.
(e) Issue statements to the Customer, at times mutually agreed upon,
identifying the Assets in the Accounts.
The Bank will send the Customer an advice or notification of any transfers
of Assets to or from the Accounts. Such statements, advices or notifications
shall indicate the identity of the entity having custody of the Assets. Unless
the Customer sends the Bank a written exception or objection to any Bank
statement within sixty (60) days of receipt, the Customer shall be deemed to
have approved such statement. In such event, or where the Customer has
otherwise approved any such statement, the Bank shall, to the extent permitted
by law, be released, relieved and discharged with respect to all matters set
forth in such statement or reasonably implied therefrom as though it had been
settled by the decree of a court of competent jurisdiction in an action where
<PAGE>
the Customer and all persons having or claiming an interest in the Customer or
the Customer's Accounts were parties.
All collections of funds or other property paid or distributed in respect
of Securities in the Custody Account shall be made at the risk of the Customer.
The Bank shall have no liability for any loss occasioned by delay in the actual
receipt of notice by the Bank or by its Subcustodians of any payment, redemption
or other transaction regarding Securities in the Custody Account in respect of
which the Bank has agreed to take any action under this Agreement.
SECTION 8. CORPORATE ACTIONS; PROXIES
Whenever the Bank receives information concerning the Securities which
requires discretionary action by the beneficial owner of the Securities (other
than a proxy), such as subscription rights, bonus issues, stock repurchase plans
and rights offerings, or legal notices or other material intended to be
transmitted to securities holders ("Corporate Actions"), the Bank will give the
Customer notice of such Corporate Actions to the extent that the Bank's central
corporate actions department has actual knowledge of a Corporate Action in time
to notify its customers.
When a rights entitlement or a fractional interest resulting from a rights
issue, stock dividend, stock split or similar Corporate Action is received which
bears an expiration date, the Bank will endeavor to obtain Instructions from the
Customer or its Authorized Person as defined in Section 10, but if Instructions
are not received in time for the Bank to take timely actions, or actual notice
of such Corporate Action was received too late to seek Instructions, the Bank is
authorized to sell such rights entitlement or fractional interest and to credit
the Deposit Account with the proceeds or take any other action it deems, in good
faith, to be appropriate in which case it shall be held harmless for any such
action.
The Bank will deliver proxies to the Customer or its designated agent
pursuant to special arrangements which may have been agreed to in writing. Such
proxies shall be executed in the appropriate nominee name relating to Securities
in the Custody Account registered in the name of such nominee but without
indicating the manner in which such proxies are to be voted; and where bearer
Securities are involved, proxies will be delivered in accordance with
Instructions.
SECTION 9. NOMINEES
Securities which are ordinarily held in registered form may be registered
in a nominee name of the Bank, Subcustodian or securities depository, as the
case may be. The Bank may without notice to the Customer cause any such
Securities to cease to be registered in the name of any such nominee and to be
registered in the name of the Customer. In the event that any Securities
registered in a nominee name are called for partial redemption by the issuer,
the Bank may allot the called portion to the respective beneficial holders of
such class of security in any manner the Bank deems to be fair and equitable.
The Customer agrees to hold the Bank, Subcustodians, and their respective
nominees harmless from any liability arising directly or indirectly from their
status as a mere record holder of Securities in the Custody Account.
<PAGE>
SECTION 10. AUTHORIZED PERSONS.
As used in this Agreement, the term "Authorized Person" means employees or
agents including investment managers as have been designated by written notice
from the Customer or its designated agent to act on behalf of the Customer under
this Agreement. Such persons shall continue to be Authorized Persons until such
time as the Bank receives Instructions from the Customer or its designated agent
that any such employee or agent is no longer an Authorized Person.
SECTION 11. INSTRUCTIONS.
The term "Instructions" means instructions of any Authorized Person
received by the Bank, via telephone, telex, TWX, facsimile transmission, bank
wire or other teleprocess or electronic instruction or trade information system
acceptable to the Bank which the Bank believes in good faith to have been given
by Authorized Persons or which are transmitted with proper testing or
authentication pursuant to terms and conditions which the Bank may specify.
Unless otherwise expressly provided, all Instructions shall continue in full
force and effect until canceled or superseded.
Any Instructions delivered to the Bank by telephone shall promptly
thereafter be confirmed in writing by an Authorized Person (which confirmation
may bear the facsimile signature of such Person), but the Customer will hold the
Bank harmless for the failure of an Authorized Person to send such confirmation
in writing, the failure of such confirmation to conform to the telephone
instructions received or the Bank's failure to produce such confirmation at any
subsequent time. The Bank may electronically record any Instructions given by
telephone, and any other telephone discussions with respect to the Custody
Account. The Customer shall be responsible for safeguarding any testkeys,
identification codes or other security devices which the Bank shall make
available to the Customer or its Authorized Persons.
SECTION 12. STANDARD OF CARE; LIABILITIES
(a) The Bank shall be responsible for the performance of only such duties
as are set forth in this Agreement or expressly contained in
Instructions which are consistent with the provisions of this
Agreement as follows:
(i) The Bank will use reasonable care with respect to its
obligations under this Agreement and the safekeeping
of Assets. The Bank shall be liable to the Customer
for any loss which shall occur as the result of the
failure of a Subcustodian to exercise reasonable care
with respect to the safekeeping of such Assets to the
same extent that the Bank would be liable to the
Customer if the Bank were holding such Assets in New
York. In the event of any loss to the Customer by
reason of the failure of the Bank or its
<PAGE>
Subcustodian to utilize reasonable care, the Bank shall be
liable to the customer only to the extent of the Customer's
direct damages, to be determined based on the market value of
the property which is the subject of the loss at the date of
discovery of such loss and without reference to any special
conditions or circumstances.
(ii) The Bank will not be responsible for any act,
omission, default or for the solvency of any broker
or agent which it or a Subcustodian appoints unless
such appointment was made negligently or in bad
faith.
(iii) The Bank shall be indemnified by, and without
liability to the Customer for any actions taken or
omitted by the Bank whether pursuant to Instructions
or otherwise within the scope of this Agreement if
such act or omission was in good faith, without
negligence. In performing its obligations under this
Agreement, the Bank may rely on the genuineness of
any document which it believes in good faith to have
been validly executed.
(iv) The Customer agrees to pay for and hold the Bank
harmless from any liability or loss resulting from
the imposition or assessment of any taxes or other
governmental charges, and any related expenses with
respect to income from or Assets in the Accounts.
(v) The Bank shall be entitled to rely, and may act, upon
the advice of counsel (who may be counsel for the
Customer) on all matters and shall be without
liability for any action reasonably taken or omitted
pursuant to such advice.
(vi) The Bank need not maintain any insurance for the
benefit of the Customer.
(vii) Without limiting the foregoing, the Bank shall not be
liable for any loss which results from: 1) the
general risk of investing, or 2) investing or holding
Assets in a particular country including, but not
limited to, losses resulting from nationalization,
expropriation or other governmental actions;
regulation of the banking or securities industry;
currency restrictions, devaluations or fluctuations;
and market conditions which prevent the orderly
execution of securities transactions or affect the
value of Assets.
<PAGE>
(viii) Neither party shall be liable to the other for any loss
due to forces beyond their control including, but not
limited to strikes or work stoppages, acts of war or
terrorism, revolution, nuclear fusion, fission or
radiation, or acts of God.
(b) Consistent with and without limiting the first paragraph of this
Section 12, it is specifically acknowledged that the Bank shall have
no duty or responsibility to:
(i) question Instructions or make any suggestions to the
Customer or an Authorized Person regarding such
Instructions;
(ii) supervise or make recommendations with respect to
investments or the retention of Securities;
(iii) advise the Customer or an Authorized Person regarding
any default in the payment of principal or income of
any security other than as provided in Section 5(c)
of this Agreement;
(iv) evaluate or report to the Customer or an Authorized
Person regarding the financial condition of any
broker, agent or other party to which Securities are
delivered or payments are made pursuant to this
Agreement; or
(v) review or reconcile trade confirmations received from
brokers. The Customer or its Authorized Persons (as
defined in Section 10) issuing Instructions shall
bear any responsibility to review such confirmations
against Instructions issued to and statements issued
by the Bank.
(c) The Customer authorizes the Bank to act under this Agreement
notwithstanding that the Bank or any of its divisions or affiliates
may have a material interest in a transaction, or circumstances are
such that the Bank may have a potential conflict of duty or interest
including the fact that the Bank or any of its affiliates may provide
brokerage services to other customers, act as financial advisor to the
issuer of Securities, act as a lender to the issuer of Securities, act
in the same transaction as agent for more than one customer, have a
material interest in the issue of Securities, or earn profits from any
of the activities listed herein.
SECTION 13. FEES AND EXPENSES
The Customer agrees to pay the Bank for its services under this Agreement
such amount as may be agreed upon in writing, together with the Bank's
reasonable out-of-pocket or
<PAGE>
incidental expenses, including, but not limited to, legal fees. The Bank shall
have a lien on and is authorized to charge any Accounts of the Customer for any
amount owing to the Bank under any provision of this Agreement.
SECTION 14. MISCELLANEOUS
(a) FOREIGN EXCHANGE TRANSACTIONS. To facilitate the administration of
the Customer's trading and investment activity, the Bank is authorized
to enter into spot or forward foreign exchange contracts with the
Customer or an Authorized Person for the Customer and may also provide
foreign exchange through its subsidiaries, affiliates or
Subcustodians. Instructions, including standing instructions, may be
issued with respect to such contracts, but the Bank may establish
rules or limitations concerning any foreign exchange facility made
available. In all cases where the Bank, its subsidiaries, affiliates
or Subcustodians enter into a foreign exchange contract related to an
Account, the terms and conditions of the then current foreign exchange
contract of the Bank, its subsidiary, affiliate or Subcustodian and,
to the extent not inconsistent, this Agreement shall apply to such
transaction.
(b) CERTIFICATION OF RESIDENCY, ETC. The Customer certifies that it is a
resident of the United States and agrees to notify the Bank of any
changes in residency. The Bank may rely upon this certification or
the certification of such other facts as may be required to administer
the Bank's obligations under this Agreement. The Customer will
indemnify the Bank against all losses, liability, claims or demands
arising directly or indirectly from any such certifications.
(c) ACCESS TO RECORDS. The Bank shall allow the Customer's independent
public accountant reasonable access to the records of the Bank
relating to the Assets as is required in connection with their
examination of books and records pertaining to the customer's affairs.
Subject to restrictions under applicable law, the Bank shall also
obtain an undertaking to permit the Customer's independent public
accountants reasonable access to the records of any Subcustodian which
has physical possession of any Assets as may be required in connection
with the examination of the Customer's books and records.
(d) GOVERNING LAW; SUCCESSORS AND ASSIGNS. This Agreement shall be
governed by the laws of the State of New York and shall not be
assignable by either party, but shall bind the successors in interest
of the Customer and the Bank.
(e) ENTIRE AGREEMENT; APPLICABLE RIDERS. Customer represents that the
Assets deposited in the Accounts are (Check one):
___ Employee Benefit Plan or other assets subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA");
<PAGE>
X Mutual Fund assets subject to certain Securities and Exchange
--- Commission ("SEC")rules and regulations;
___ Neither of the above.
This Agreement consists exclusively of this document together with Schedule A,
Schedule B, Exhibits I-___ and the following Rider(s) [Check applicable
rider(s)]:
___ ERISA
X MUTUAL FUND
---
X SPECIAL TERMS AND CONDITIONS
---
There are no other provisions of this Agreement and this Agreement
supersedes any other agreements, whether written or oral, between the parties.
Any amendment to this Agreement must be in writing, executed by both parties.
(f) SEVERABILITY. In the event that one or more provisions of this
Agreement are held invalid, illegal or enforceable in any respect on
the basis of any particular circumstances or in any jurisdiction, the
validity, legality and enforceability of such provision or provisions
under other circumstances or in other jurisdictions and of the
remaining provisions will not in any way be affected or impaired.
(g) WAIVER. Except as otherwise provided in this Agreement, no failure or
delay on the part of either party in exercising any power or right
under this Agreement operates as a waiver, nor does any single or
partial exercise of any power or right preclude any other or further
exercise, or the exercise of any other power or right. No waiver by a
party or any provision of this Agreement, or waiver of any breach or
default, is effective unless in writing and signed by the party
against whom the waiver is to be enforced.
(h) NOTICES. All notices under this Agreement shall be effective when
actually received. Any notices or other communications which may be
required under this Agreement are to be sent to the parties at the
following addresses or such other addresses as may subsequently be
given to the other party in writing:
Bank: The Chase Manhattan Bank, N.A.
Attention: Global Custody Division
Woolgate House, Coleman Street
London, EC2P 2HD, United Kingdom
or telex:
<PAGE>
Customer: Core Trust (Delaware)
c/o Forum Financial Services, Inc., Legal Dept.
Two Portland Square
Portland, Maine 04101
or telex: (207) 879-6050
(i) TERMINATION. This Agreement may be terminated by the Customer or the
Bank by giving sixty (60) days written notice to the other, provided
that such notice to the Bank shall specify the names of the persons to
whom the Bank shall deliver the assets in the Accounts. If notice of
termination is given by the Bank, the Customer shall, within sixty
(60) days following receipt of the notice, deliver to the Bank
Instructions specifying the names of the persons to whom the Bank
shall deliver the Assets. In either case, the Bank will deliver the
Assets to the persons so specified, after deducting any amounts which
the Bank determines in good faith to be owed to it under Section 13.
If within sixty (60) days following receipt of a notice of termination
by the Bank, the Bank does not receive Instructions from the Customer
specifying the names of the persons to whom the Bank shall deliver the
Assets, the Bank, at its election, may deliver the Assets to a bank or
trust company doing business in the State of New York to be held and
disposed of pursuant to the provisions of this Agreement, or to
Authorized Persons, or may continue to hold the Assets until
Instructions are provided to the Bank.
CORE TRUST (DELAWARE)
On behalf of each fund listed in Schedule A.
By:
------------------------------------------
John Y. Keffer, President
THE CHASE MANHATTAN BANK, N.A.
By:
------------------------------------------
Name:
Title:
<PAGE>
CORE TRUST
GLOBAL CUSTODY AGREEMENT
SCHEDULE A
(as of November 9, 1994)
International Portfolio
International Portfolio II
<PAGE>
CORE TRUST
GLOBAL CUSTODY AGREEMENT
SCHEDULE B
(List of authorized Subcustodians)
<PAGE>
MUTUAL FUND RIDER TO GLOBAL CUSTODY AGREEMENT
BETWEEN THE CHASE MANHATTAN BANK, N.A. AND
CORE TRUST (DELAWARE), EFFECTIVE OCTOBER 31, 1994
Customer represents that the Assets being placed in the Bank's custody are
subject to the Investment Company Act of 1940 (the "Act"), as the same may be
amended from time to time.
Except to the extent that the Bank has specifically agreed to comply with a
condition of a rule, regulation, interpretation promulgated by or under the
authority of the SEC or the Exemptive Order applicable to accounts of this
nature issued to the Bank (Investment Company Act of 1940, Release No. 12053,
November 20, 1981), as amended, or unless the Bank has otherwise specifically
agreed, the Customer shall be solely responsible to assure that the maintenance
of Assets under this Agreement complies with such rules, regulations,
interpretations or exemptive order promulgated by or under the authority of the
securities Exchange Commission.
The following modifications are made to the Agreement:
SECTION 3. SUBCUSTODIANS AND SECURITIES DEPOSITORIES
Add the following language to the end of Section 3:
The terms Subcustodian and securities depositories as used in this
Agreement shall mean a branch of a qualified U.S. bank, an eligible foreign
custodian or an eligible foreign securities depository, which are further
defined as follows:
(a) "qualified U.S. Bank" shall mean a qualified U.S. bank as defined in
Rule 17f-5 under the Act;
(b) "eligible foreign custodian" shall mean (i) a banking institution or
trust company incorporated or organized under the laws of a country
other than the United States that is regulated as such by that
country's government or an agency thereof and that has shareholders'
equity in excess of $200 million in U.S. currency (or a foreign
currency equivalent thereof), (ii) a majority owned direct or indirect
subsidiary of a qualified U.S. bank or bank holding company that is
incorporated or organized under the laws of a country other than the
United States and that has shareholders' equity in excess of $100
million in U.S. currency (or a foreign currency equivalent thereof)
(iii) a banking institution or trust company incorporated or organized
under the laws of a country other than the United States or a majority
owned direct or indirect subsidiary of a qualified U.S. bank or bank
holding company that is incorporated or organized under the laws of a
country other than the United States which has such other
qualifications as shall be specified in Instructions and approved by
the Bank; or (iv) any other entity that
<PAGE>
shall have been so qualified by exemptive order, rule or other
appropriate action of the SEC; and
(c) "eligible foreign securities depository" shall mean a securities
depository or clearing agency, incorporated or organized under the
laws of a country other than the United States, which operates (i) the
central system for handling securities or equivalent book-entries in
that country, or (ii) a transnational system for the central handling
of securities or equivalent book-entries.
The Customer represents that its Board of Directors has approved each of
the Subcustodians listed in Schedule B to this Agreement and the terms of the
subcustody agreements between the Bank and each Subcustodian, which are attached
as Exhibits I through ___ of Schedule B, and further represents that its Board
has determined that the use of each Subcustodian and the terms of each
subcustody agreement are consistent with the best interests of the Fund(s) and
its (their) shareholders. The Bank will supply the Customer with any amendment
to Schedule B for approval. The Customer has supplied or will supply the Bank
with certified copies of its Board of Directors resolutions(s) with respect to
the foregoing prior to placing Assets with any Subcustodian so approved.
SECTION 11. INSTRUCTIONS.
Add the following language to the end of Section 11:
Deposit Account Payments and Custody Account Transactions made pursuant to
Section 5 and 6 of this Agreement may be made only for the purposes listed
below. Instructions must specify the purpose for which any transaction is to be
made and Customer shall be solely responsible to assure that Instructions are in
accord with any limitations or restrictions applicable to the Customer by law or
as may be set forth in its prospectus.
(a) In connection with the purchase or sale of Securities at prices as
confirmed by Instructions;
(b) When Securities are called, redeemed or retired, or otherwise become
payable;
(c) In exchange for or upon conversion into other securities alone or
other securities and cash pursuant to any plan or merger,
consolidation, reorganization, recapitalization or readjustment;
(d) Upon conversion of Securities pursuant to their terms into other
securities;
(e) Upon exercise of subscription, purchase or other similar rights
represented by Securities;
(f) For the payment of interest, taxes, management or supervisory fees,
distributions or operating expenses;
<PAGE>
(g) In connection with any borrowings by the Customer requiring a pledge
of Securities, but only against receipt of amounts borrowed;
(h) In connection with any loans, but only against receipt of adequate
collateral as specified in Instructions which shall reflect any
restrictions applicable to the Customer;
(i) For the purpose of redeeming shares of the capital stock of the
Customer and the delivery to, or the crediting to the account of, the
Bank, its Subcustodian or the Customer's transfer agent, such shares
to be purchased or redeemed;
(j) For the purpose of redeeming in kind shares of the Customer against
delivery to the Bank, its Subcustodian or the Customer's transfer
agent of such shares to be so redeemed;
(k) For delivery in accordance with the provisions of any agreement among
the Customer, the Bank and a broker-dealer registered under the
Securities Exchange Act of 1934 (the "Exchange Act") and a member of
The National Association of Securities Dealers, Inc. ("NASD"),
relating to compliance with the rules of The Options Clearing
Corporation and of any registered national securities exchange, or of
any similar organization or organizations, regarding escrow or other
arrangements in connection with transactions by the Customer;
(l) For release of Securities to designated brokers under covered call
options, provided, however, that such Securities shall be released
only upon payment to the Bank of monies for the premium due and a
receipt for the Securities which are to be held in escrow. Upon
exercise of the option, or at expiration, the Bank will receive from
brokers the Securities previously deposited. The Bank will act
strictly in accordance with Instructions in the delivery of Securities
to be held in escrow and will have no responsibility or liability for
any such Securities which are not returned promptly when due other
than to make proper request for such return;
(m) For spot or forward foreign exchange transactions to facilitate
security trading, receipt of income from Securities or related
transactions;
(n) For other proper purposes as may be specified in Instructions issued
by an officer of the Customer which shall include a statement of the
purpose for which the delivery or payment is to be made, the amount of
the payment or specific Securities to be delivered, the name of the
person or persons to whom delivery or payment is to be made, and a
certification that the purpose is a proper purpose under the
instruments governing the Customer; and
(o) Upon the termination of this Agreement as set forth in Section 14(i).
<PAGE>
SECTION 12. STANDARD OF CARE; LIABILITIES
Add the following subsection (d) to Section 12:
(d) The Bank hereby warrants to the Customer that in its opinion, after
due inquiry, the established procedures to be followed by each of its
branches, each branch of a qualified U.S. bank, each eligible foreign
custodian and each eligible foreign securities depository holding the
Customer's Securities pursuant to this Agreement afford protection for
such Securities at least equal to that afforded by the Bank's
established procedures with respect to similar securities held by the
Bank and its securities depositories in New York.
SECTION 14. ACCESS TO RECORDS
Add the following language to the end of Section 14(c):
Upon reasonable request from the Customer, the Bank shall furnish the Customer
such reports (or portions thereof) of the Bank's system of internal accounting
controls applicable to the Bank's duties under this Agreement. The Bank shall
endeavor to obtain and furnish the Customer with such similar reports as it may
reasonably request with respect to each Subcustodian and securities depository
holding the Customer's assets.
<PAGE>
SPECIAL TERMS AND CONDITIONS
These Special Terms and Conditions amend and supplement the Agreement by
and between The Chase Manhattan Bank, N.A. (the "Bank") and Core Trust
(Delaware) (the "Customer") effective October 31, 1994 as amended by the
Mutual Fund Rider (the "Agreement"). To the extent that any term or
provision of the Agreement is inconsistent with these Special Terms and
Conditions, the Special Terms and Conditions shall control.
1. In order to properly allocate the responsibilities of the parties, the term
"Customer" shall have the meanings designated below.
a) In the following sections of the Agreement, the term "Customer" shall
mean "each Fund":
-- Section 1(a) & (b)
-- Section 2
-- Section 4
-- Section 13, and
-- Section 14(c)
b) In the following sections of the Agreement the term "Customer" shall
refer to the Customer on behalf of a Fund.
-- Section 1; the last paragraphs
-- Section 3
-- Section 4
-- Section 5(c)
-- Section 7(b) & (e)
-- Section 7; the last paragraph
-- Section 8
-- Section 10
-- Section 11, and
-- Section 14(a) & (i)
c) In sections 9 and 12 of the Agreement, the term "Customer" shall mean
the Customer or the Fund.
2. SECTION 9. NOMINEES:
In the last sentence of this section, eliminate the words "directly or
indirectly".
<PAGE>
3. SECTION 12 (b) (iv):
Following the words "agent or other party" insert the phrase: "(except for
brokers, agents other than subcustodians or depositories or other parties
selected by the Bank, except in markets where there is only one registered
or otherwise qualified broker, agent or other party)".
4. SECTION 13. FEES AND EXPENSES:
Add the following phrase to the end of this section: ", so long as such
lien does not contravene the provisions of S.E.C. Release #40-12053, as
amended from time to time".
5. SECTION 14 (j) DELAWARE BUSINESS TRUST:
The following additional provision is added: A copy of the Trust
Instrument of the Core Trust (Delaware) is on file with the Secretary of
the State of Delaware and notice is hereby given that the Agreement is not
binding upon any of the trustees, officers, or shareholders of the Customer
individually, but are binding only upon the assets and property of the
applicable Fund. The Bank agrees that no shareholder, trustee, or officer
of the Customer or any Fund may be held personally liable or responsible
for any obligations of any fund arising out of the Agreement. With respect
to the obligations of a Fund arising out of the Agreement, the Bank shall
look for payment or satisfaction of any claim solely to the assets and
property of that Fund, and not to the assets of any other series of the
Trust.
<PAGE>
EXHIBIT (8)(d)
<PAGE>
EXHIBIT (8)(d)
CORE TRUST (DELAWARE)
CUSTODIAN CONTRACT
Contract made this 1st day of September, 1995, between Core Trust
(Delaware) (the "Trust"), a business trust organized under the laws of the State
of Delaware, having its principal place of business at 61 Broadway, New York,
N.Y. 10006, and Imperial Trust Company (the "Custodian"), a California trust
company, having its principal place of business at 201 N. Figueroa Street, Suite
610, Los Angeles, California 90012.
WHEREAS, the Trust is authorized to issue interests in separate series,
with each such series representing interests in a separate portfolio of
securities and other assets; and
WHEREAS, the Trust intends to initially offer interests in three series:
the Treasury Cash Portfolio, Government Cash Portfolio, and Cash Portfolio,
(each a "Portfolio," and collectively the "Portfolios"), (such series together
with all other series subsequently established by the Trust and made subject to
this Contract in accordance with Section 12);
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
SECTION 1. EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE HELD BY IT
The Trust hereby employs the Custodian as the custodian of the assets of
the Portfolios pursuant to the provisions of the Trust Instrument. The Trust on
behalf of the Portfolios agrees to deliver to the Custodian all securities and
cash of the Portfolios, and all payments of income, payments of principal or
capital distributions received by it with respect to all securities owned by the
Portfolios from time to time, and the cash consideration received by it for such
shares of beneficial interest of the Trust representing interests in the
Portfolios ("Interests") as may be issued or sold from time to time. The
Custodian shall not be responsible for any property of a Portfolio held or
received by the Portfolio and not delivered to the Custodian.
The Trust hereby authorizes the Custodian to use Imperial Bank and The
Bank of New York as subcustodians, the use of Imperial Bank being limited to
custodianship of cash. In addition, the Custodian may, at any time and from
time to time, appoint any other bank as defined in Section 2(a)(5) of the
Investment Company Act of 1940 ("1940 Act") meeting the requirements of a
custodian under Section 17(f) of the 1940 Act and the rules and regulations
thereunder, to act on behalf of one or more Portfolios as a subcustodian for the
purposes of holding cash, securities and other assets of the Portfolios and
performing other functions of the Custodian; provided that the Custodian sends
written notification to the Trust on or before the day upon which such other
subcustodian is first employed. The Custodian shall be liable for the
actions or omissions of any subcustodian to the same extent as if such action
or omission were performed by the Custodian itself.
<PAGE>
SECTION 2. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE TRUST HELD
BY TO CUSTODIAN
2.1 HOLDING SECURITIES. The Custodian shall hold and physically segregate for
the account of each Portfolio all non-cash property, including all
securities owned by such Portfolio, other than securities which are
maintained pursuant to Section 2.12 in a clearing agency which acts as a
securities depository or in a book-entry system authorized by the U.S.
Department of the Treasury, collectively referred to herein as "Securities
Systems."
2.2 DELIVERY OF SECURITIES. The Custodian shall release and deliver
securities owned by a Portfolio held by the Custodian or in a Securities
System account of the Custodian only upon receipt of Proper Instructions
from the Trust on behalf of the applicable Portfolio, which may be
continuing instructions when deemed appropriate by the parties, and only
in the following cases:
1) Upon sale of such securities for the account of the Portfolio and
receipt of payment therefor;
2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by the Portfolio;
3) In the case of a sale effected through a Securities System, in
accordance with the provisions of Section 2.12 hereof;
4) To the depository agent in connection with tender or other similar
offers for securities of the Portfolio;
5) To the issuer thereof or its agent when such securities are called,
redeemed, retired or otherwise become payable; provided that, in any
such case, the cash or other consideration is to be delivered to the
Custodian;
6) To the issuer thereof, or its agent, for transfer into the name of
the Portfolio or into the name of any nominee or nominees of the
Custodian or into the name or nominee name of any agent appointed
pursuant to Section 2.11 or into the name or nominee name of any
subcustodian appointed pursuant to Section l; or for exchange for a
different number of bonds, certificates or other evidence
representing the same aggregate face amount or number of units;
provided that, in any such day upon which such other subcustodian is
first employed. The Custodian shall be liable for the actions or
omissions of any subcustodian to the same extent as if such action or
omission were performed by the Custodian itself.
7) Upon the sale of such securities for the account of the Portfolio, to
the broker or its clearing agent, against a receipt, for examination
in accordance with "street delivery" custom;
<PAGE>
8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment of
the securities of the issuer of such securities, or pursuant to
provisions for conversion contained in such securities, or pursuant
to any deposit agreement; provided that, in any such case, the new
securities and cash, if any, are to be delivered to the Custodian;
9) In the case of warrants, rights or similar securities, the surrender
thereof in the exercise of such warrants, rights or similar
securities or the surrender of interim receipts or temporary
securities for definitive securities; provided that, in any such
case, the new securities and cash, if any, are to be delivered to the
Custodian;
10) For delivery in connection with any loans of securities made by the
Portfolio, but only against receipt of adequate collateral as agreed
upon from time to time by the Custodian and the Trust on behalf of
the Portfolio, which may be in the form of cash or obligations issued
by the United States Government, its agencies or instrumentalities,
except that in connection with any loans for which collateral is to
be credited to the Custodian's account in the book-entry system
authorized by the U.S. Department of the Treasury, the Custodian will
not be held liable or responsible for the delivery of securities
owned by the Portfolio prior to the receipt of such collateral;
11) For delivery as security in connection with any borrowings by the
Trust on behalf of the Portfolio requiring a pledge of assets by the
Trust on behalf of the Portfolio, but only against receipt of amounts
borrowed;
12) Upon receipt of instructions from the transfer agent ("Transfer
Agent") for the Trust, for delivery to such Transfer Agent or to the
holders of interests in connection with distributions in kind, as may
be described from time to time in the currently effective Part A and
Part B of the registration statement of the Trust related to the
Portfolios ("Prospectus"), in satisfaction of requests by holders of
Interests for repurchase or redemption; and
13) For any other proper corporate purpose, but only upon receipt of, in
addition to Proper Instructions from the Trust on behalf of the
applicable Portfolio, a writing signed by an officer of the Trust and
certified by the Secretary or an Assistant Secretary, specifying the
securities of the Portfolio to be delivered, setting forth the
purpose for which such delivery is to be made, declaring such purpose
to be a proper corporate purpose, and naming the person or persons to
whom delivery of such securities shall be made.
2.3 REGISTRATION OF SECURITIES. Securities held by the Custodian (other than
bearer securities) shall be registered in the name of the Portfolio or in
the name of any nominee of the Trust on behalf of the Portfolio or of any
nominee of the Custodian, or in the name or nominee name of any agent
appointed pursuant to Section 2.11 or in the name or
<PAGE>
nominee name of any subcustodian appointed pursuant to Section 1, unless
specifically directed by Proper Instructions to hold such registered
securities in so-called street name; provided that, in any event, all such
securities and other assets shall be held in an account of the Custodian
containing only assets of a Portfolio, or only assets held by a Custodian
as a fiduciary or custodian for customers, and provided further, that the
records of the Custodian shall indicate at all times the Portfolio or
other customer for which such securities and other assets are held in such
account and their respective interests therein.
2.4 BANK ACCOUNTS. The Custodian shall open and maintain a separate bank
account or other accounts in the name of Custodian, as custodian of each
Portfolio, subject only to draft or order by the Custodian acting pursuant
to the terms of this Contract, and shall hold in such account or accounts,
subject to the provisions hereof, all cash received by it from or for the
account of the Portfolio, other than cash maintained by the Portfolio in a
bank account established and used in accordance with Rule 17f-3 under the
1940 Act. Cash held hereunder shall be deemed to be a special deposit.
Funds held by the Custodian for a Portfolio may be deposited by it to its
credit as Custodian in the Banking Department of the Custodian or in such
other banks or trust companies as it may in its discretion deem necessary
or desirable; provided, however, that every such bank or trust company
shall be appointed in accordance with and subject to the terms of Section
1 hereof.
2.5 PAYMENTS FOR INTERESTS. The Custodian shall receive from the placement
agent for the Interests or from the Transfer Agent of the Trust and
deposit into the account of the appropriate Portfolio such payments as are
received for Interests of that Portfolio issued or sold form time to time
by the Trust. The Custodian will provide timely notification to the Trust
on behalf of each such Portfolio and the Transfer Agent of any receipt by
it of payments for Interests of such Portfolio.
2.6 AVAILABILITY OF FEDERAL FUNDS. Upon mutual agreement between the Trust on
behalf of each applicable Portfolio and the Custodian, the Custodian
shall, upon the receipt of Proper Instructions from the Trust on behalf of
a Portfolio, make federal funds available to such Portfolio as of
specified times agreed upon from time to time by the Trust and the
Custodian in the amount of checks received in payment for Interests of
such Portfolio which are deposited into the Portfolio's account.
2.7 COLLECTION OF INCOME. The Custodian shall collect on a timely basis all
income and other payments with respect to registered securities held
hereunder to which each Portfolio shall be entitled either by law or
pursuant to custom in the securities business, and shall collect on a
timely basis all income and other payments with respect to bearer
securities if, on the date of payment by the issuer, such securities are
held by the Custodian or its agent thereof and shall credit such income,
as collected, to such Portfolio's custodian account. Without limiting the
generality of the foregoing, the Custodian shall detach and present for
payment all coupons and other income items requiring presentation as and
when they become due and shall collect interest when due on securities
held hereunder. Income due each Portfolio on securities loaned pursuant
to the provisions of Section 2.2
<PAGE>
10) shall be the responsibility of the Trust. The Custodian will have no
duty or responsibility in connection therewith, other than to provide the
Trust with such information or data as may be necessary to assist the
Trust in arranging for the timely delivery to the Custodian of the income
to which the Portfolio is properly entitled.
2.8 PAYMENT OF MONIES. Upon receipt of Proper Instructions from the Trust on
behalf of the applicable Portfolio, which may be continuing instructions
when deemed appropriate by the parties, the Custodian shall pay out monies
of a Portfolio in the following cases only:
1) Upon the purchase of securities, for the account of the Portfolio but
only (a) against the delivery of such securities to the Custodian (or
any bank, banking firm or trust company doing business in the United
States which is qualified under the 1940 Act to act as a custodian
and has been designed by the Custodian as its agent for this purpose)
registered in the name of the Portfolio or in the name of a nominee
of the Custodian referred to in Section 2.3 hereof or in proper form
for transfer; (b) in the case of a purchase effected through a
Securities System, in accordance with the conditions set forth in
Section 2.12 hereof; (c) in the case of repurchase agreements entered
into between the Trust on behalf of the Portfolio and the Custodian,
or another bank, or a broker-dealer which is a member of the NASD,
(i) against delivery of the securities either in certificate form or
through an entry crediting the Custodian's account at the Federal
Reserve Bank with such securities or (ii) against delivery of the
receipt evidencing purchase by the Portfolio of securities owned by
the Custodian along with written evidence of the agreement by the
Custodian to repurchase such securities from the Portfolio or (d) for
transfer to a time deposit account of the Trust in any domestic bank;
such transfer may be effected prior to receipt of a confirmation from
a broker and/or the applicable bank pursuant to Proper Instructions
from the Trust as defined in Section 2.17;
2) In connection with conversion, exchange or surrender of securities
owned by the Portfolio as set forth in Section 2.2 hereof;
3) For the redemption or repurchase of Interests issued by the Portfolio
as set forth in Section 2.10 hereof;
4) For the payment of any expense or liability incurred by the
Portfolio, including but not limited to the following payments for
the account of the Portfolio: interest, taxes, management,
accounting, transfer agent and legal fees, and operating expenses of
the Trust whether or not such expenses are to be in whole or part
capitalized or treated as deferred expenses;
5) For the payment of any distributions on Interests of the Portfolio
declared pursuant to the governing documents of the Trust;
<PAGE>
6) For payment of the amount of dividends received in respect of
securities sold short;
7) For any other proper purpose, but only upon receipt of, in addition
to Proper Instructions from the Trust on behalf of the Portfolio, a
writing signed by an officer of the Trust and certified by its
Secretary or an Assistant Secretary, specifying the amount of such
payment, setting forth the purpose for which such payment is to be
made, declaring such purpose to be a proper purpose, and naming the
person or persons to whom such payment is to be made.
2.9 LIABILITY FOR PAYMENT IN ADVANCE OF RECEIPT OF SECURITIES PURCHASED.
Except as specifically stated otherwise in this Contract, in any and every
case where payment for purchase of securities for the account of a
Portfolio is made by the Custodian in advance of receipt of the securities
purchased in the absence of specific written instructions from the Trust
on behalf of such Portfolio to so pay in advance, the Custodian shall be
absolutely liable to the Trust for such securities to the same extent as
if the securities had been received by the Custodian.
2.10 PAYMENTS FOR REPURCHASES OR REDEMPTIONS OF INTERESTS OF THE TRUST. From
such funds as may be available for the purpose but subject to the
limitations of the Trust Instrument and any applicable votes of the Board
of Trustees of the Trust (the "Board") pursuant thereto, the Custodian
shall, upon receipt of instructions from the Transfer Agent, make funds
available for payment to holders of Interests who have delivered to the
Transfer Agent a request for redemption or repurchase of their Interests.
In connection with the redemption or repurchase of Interests of a
Portfolio, the Custodian is authorized upon receipt of instructions from
the Transfer Agent to wire funds to or through a commercial bank
designated by the redeeming shareholders. In connection with the
redemption or repurchase of Interests of the Trust, the Custodian shall
honor checks drawn on the Custodian by a holder of Interests, which checks
have been furnished by the Trust to the holder of Interests, when
presented to the Custodian in accordance with such procedures and controls
as are mutually agreed upon from time to time between the Trust and the
Custodian.
2.11 APPOINTMENT OF AGENTS. The Custodian may at any time or times in its
discretion appoint (and may at any time remove) any other bank or trust
company which is itself qualified under the 1940 Act to act as a
custodian, as its agent to carry out such of the provisions of this
Section 2 as the Custodian may from time to time direct; provided,
however, that the appointment of any agent shall not relieve the Custodian
of its responsibilities or liabilities hereunder.
2.12 DEPOSIT OF TRUST ASSETS IN SECURITIES SYSTEMS. Upon receipt of Proper
Instructions, the Custodian may deposit and/or maintain securities owned
by a Portfolio in a clearing agency registered with the Securities and
Exchange Commission under Section 17A of the Securities Exchange Act of
1934, which acts as a securities depository, or in the book-entry system
authorized by the U.S. Department of the Treasury and certain federal
<PAGE>
agencies, collectively referred to herein as "Securities Systems" in
accordance with applicable Federal Reserve Board and Securities and
Exchange Commission rules and regulations, if any, and subject to the
following provisions:
1) The Custodian may keep securities of the Portfolio in a Securities
System provided that such securities are represented in an account
("Account") of the Custodian in the Securities System which shall not
include any assets of the Custodian other than assets held as a
fiduciary, custodian or otherwise for customers;
2) The records of the Custodian with respect to securities of the
Portfolio which are maintained in a Securities System shall identify
by book-entry those securities belonging to the Portfolio;
3) The Custodian shall pay for securities purchased for the account of
the Portfolio upon (i) receipt of advice from the Securities System
that such securities have been transferred to the Account, and (ii)
the making of an entry on the records of the Custodian to reflect
such payment and transfer for the account of the Portfolio. The
Custodian shall transfer securities sold for the account of the
Portfolio upon (i) receipt of advice from the Securities System that
payment for such securities has been transferred to the Account, and
(ii) the making of an entry on the records of the Custodian to
reflect such transfer and payment for the account of the Portfolio.
Copies of all advices from the Securities System of transfers of
securities for the account of the Portfolio shall identify the
Portfolio, be maintained for the Portfolio by the Custodian and be
provided to the Trust at its request. Upon request, the Custodian
shall furnish the Trust on behalf of the Portfolio confirmation of
each transfer to or from the account of the Portfolio in the form of
a written advice or notice and shall furnish to the Trust on behalf
of the Portfolio copies of daily transaction sheets reflecting each
days transactions in the Securities System for the account of the
Portfolio.
4) The Custodian shall provide the Trust for the Portfolio with any
report obtained by the Custodian on the Securities Systems accounting
system, internal accounting control and procedures for safeguarding
securities deposited in the Securities System;
5) Anything to the contrary in this Contract notwithstanding, the
Custodian shall be liable to the Trust for the benefit of the
Portfolio for any loss or damage to the Portfolio resulting from use
of the Securities System by reason of any negligence, misfeasance or
misconduct of the Custodian or any of its agents or of any of its or
their employees or from failure of the Custodian or any such agent to
enforce effectively such rights as it may have against the Securities
System; at the election of the Trust, it shall be entitled to be
subrogated to the rights of the Custodian with respect to any claim
against the Securities System or any other person which
<PAGE>
the Custodian may have as a consequence of any such loss or damage if
and to the extent that the Portfolio has not been made whole for any
such loss or damage.
2.13 SEGREGATED ACCOUNT. The Custodian shall upon receipt of Proper
Instructions from the Trust on behalf of each applicable Portfolio
establish and maintain a segregated account or accounts for an on behalf
of each such Portfolio, into which account or accounts may be transferred
cash and/or securities, including securities maintained in an account by
the Custodian pursuant to Section 2.12 hereof, (i) for the purposes of
compliance by the Portfolio with the procedures required by Investment
Company Act Release No. 10666, or any subsequent release or releases of
the Securities and Exchange Commission relating to the maintenance of
segregated accounts by registered investment companies and (ii) for other
proper corporate purposes, but only, in the case of clause (ii), upon
receipt of, in addition to Proper Instructions from the Trust on behalf of
the applicable Portfolio, a writing signed by an officer of the Trust and
certified by the Secretary or an Assistant Secretary, setting forth the
purpose or purposes of such segregated account and declaring such purposes
to be proper corporate purposes.
2.14 OWNERSHIP CERTIFICATES FOR TAX PURPOSES. The Custodian shall execute
ownership and other certificates and affidavits for all federal and state
tax purposes in connection with receipt of income or other payments with
respect to securities of each Portfolio held by it and in connection with
transfers of securities.
2.15 PROXIES. The Custodian shall, with respect to the securities held
hereunder, cause to be promptly executed by the registered holder of such
securities, if the securities are registered otherwise than in the name of
the Portfolio or a nominee of the Portfolio, all proxies are to be voted,
and shall promptly deliver to the Portfolio such proxies, all proxy
soliciting materials and all notices relating to such securities.
2.16 COMMUNICATIONS RELATING TO PORTFOLIO SECURITIES. The Custodian shall
transmit promptly to the Trust for each Portfolio all written information
(including, without limitation, pendency of calls and maturities of
securities and expirations of rights in connection therewith) received by
the Custodian from issuers of the securities being held for the Portfolio.
With respect to tender or exchange offers, the Custodian shall transmit
promptly to the Portfolio all written information received by the
Custodian from issuers of the securities whose tender or exchange is
sought and from the party (or his agents) making the tender or exchange
offer.
2.17 PROPER INSTRUCTIONS. Proper Instructions as used throughout this Section
2 means a writing signed or initialed by one or more person or persons as
the Board shall have from time to time authorized. Each such writing
shall set forth the specific transaction or type of transaction involved,
including a specific statement of the purpose for which such action is
requested. Oral instructions will be considered Proper Instructions if
the Custodian reasonably believes them to have been given by a person
authorized to give such instructions with respect to the transaction
involved. The Trust shall cause all oral instructions to be confirmed in
writing. Upon receipt of a certificate of the Secretary or
<PAGE>
an Assistant Secretary as to the authorization by the Board, Proper
Instructions may include communications effected directly between electro-
mechanical or electronic devices provided that the Board and the Custodian
are satisfied that such procedures afford adequate safeguards for the
Portfolios' assets. For purposes of this Section, Proper Instructions
shall include instructions received by the Custodian pursuant to any
three-party agreement which requires a segregated asset account in
accordance with Section 2.13. Notwithstanding anything to the contrary
contained in the Contract, no person authorized by the Board as described
in the preceding paragraph, Trustee, officer, employee or agent of the
Trust shall have physical access to the assets of any Portfolio held by the
Custodian nor shall the Custodian deliver any assets of a Portfolio for
delivery to an account of such person; provided, however, that nothing in
this Section 2.17 shall prohibit the Trust's independent certified public
accountants from examining or reviewing the assets of the Portfolio's held
by the Custodian.
2.18 ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY. The Custodian may in its
discretion, without express authority from the Trust on behalf of each
applicable Portfolio:
1) make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under this
Contract, provided that all such payments shall be accounted for to
the Trust on behalf of the Portfolio;
2) surrender securities in temporary form for securities in definitive
form;
3) endorse for collection, in the name of the Portfolio, checks, drafts
and other negotiable instruments; and
4) in general, attend to all non-discretionary details in connection
with the sale, exchange, substitution, purchase, transfer and other
dealings with the securities and property of the Portfolio except as
otherwise directed by the Board.
2.19 EVIDENCE OF AUTHORITY. The Custodian shall be protected in acting upon
any instructions, notice, request, consent, certificate or other
instrument or paper reasonably believed by it to be genuine and to have
been properly executed by or on behalf of the Trust. The Custodian may
receive and accept a certified copy of a vote of the Board as conclusive
evidence (a) of the authority of any person to act in accordance with such
vote or (b) of any determination or of any action by the Board pursuant to
the Trust Instrument as described in such vote, and such vote may be
considered as in full force and effect until receipt by the Custodian of
written notice to the contrary.
SECTION 3. DUTIES OF CUSTODIAN WITH RESPECT TO THE BOOKS OF
ACCOUNT
The Custodian shall cooperate with and supply necessary information to the
entity or entities appointed by the Board who keep the books of account of each
Portfolio.
<PAGE>
SECTION 4. RECORDS
The Custodian shall with respect to each Portfolio create and maintain all
records relating to its activities and obligations under this Contract in such
manner as will meet the obligations of the Trust under the 1940 Act with
particular attention to Section 31 thereof and Rules 3la-1 and 3la-2 thereunder.
All such records shall be the property of the Trust and shall at all times
during the regular business hours of the Custodian be open for inspection by
duly authorized officers, employees and agents of the Trust and employees and
agents of the Securities and Exchange Commission. The Custodian shall, at the
Trust's request, supply the Trust with a tabulation of securities owned by each
Portfolio and held by the Custodian and shall, when requested to do so by the
Trust and for such compensation as shall be agreed upon between the Trust and
the Custodian, include certificate numbers in such tabulations.
SECTION 5. OPINION OF TRUST'S INDEPENDENT ACCOUNTANT
The Custodian shall take all reasonable action, as the Trust on behalf of
each applicable Portfolio may from time to time request, to obtain from year to
year favorable opinions from the Trust's independent accountants with respect to
its activities hereunder in connection with the preparation of the Trust's Form
N-lA, and Form N-SAR or other annual reports to the Securities and Exchange
Commission and with respect to any other requirements of such Commission.
SECTION 6. REPORTS TO TRUST BY INDEPENDENT PUBLIC ACCOUNTANTS
The Custodian shall provide the Trust, on behalf of each of the Portfolios
at such times as the Trust may reasonably require, with reports by independent
public accountants on the accounting system, internal accounting control and
procedures for safeguarding securities, including securities deposited and/or
maintained in a Securities System, relating to the services provided by the
Custodian under this Contract; such reports, shall be of sufficient scope and in
sufficient detail, as may reasonably be required by the Trust to provide
reasonable assurance that any material inadequacies would be disclosed by such
examination, and, if there are no such inadequacies, the reports shall so state.
SECTION 7. COMPENSATION OF CUSTODIAN
The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian, as agreed upon from time to time between the
Trust on behalf of each applicable Portfolio and the Custodian.
SECTION 8. RESPONSIBILITY OF CUSTODIAN
So long as and to the extent that it is in the exercise of reasonable
care, the Custodian shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Contract and shall be held harmless in acting
upon any notice, request, consent, certificate or other instrument reasonably
believed by it to be genuine and to be signed by the proper party or parties.
The Custodian shall be held to the
<PAGE>
exercise of reasonable care in carrying out the provisions of this Contract, but
shall be kept indemnified by and shall be without liability to the Trust for any
action taken or omitted by it in good faith without negligence. It shall be
entitled to rely on and may act upon advice of counsel (who may be counsel for
the Trust) on all matters, and shall be without liability for any action
reasonably taken or omitted pursuant to such advice.
If the Trust on behalf of a Portfolio requires the Custodian to take any
action with respect to securities, which action involves the payment of money or
which action may, in the opinion of the Custodian, result in the Custodian or
its nominee assigned to the Trust or the Portfolio being liable for the payment
of money or incurring liability of some other form, the Trust on behalf of the
Portfolio, as a prerequisite to requiring the Custodian to take such action,
shall provide indemnity to the Custodian in an amount and form satisfactory to
it.
If the Trust requires the Custodian to advance cash or securities for any
purpose for the benefit of a Portfolio or in the event that the Custodian or its
nominee shall incur or be assessed any taxes, charges, expenses, assessments,
claims or liabilities in connection with the performance of this Contract,
except such as may arise from its or its nominees own negligent action,
negligent failure to act or willful misconduct, the Custodian promptly shall
notify the Trust of the existence of any such advances, their amount and the
Portfolio to which the advance applies. Such advances shall be payable on
demand, on the first business day following the Trust's receipt of notice of
such demand.
SECTION 9. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT
This Contract shall become effective as of its execution, shall continue
in full force and effect until terminated as hereinafter provided, may be
amended at any time by mutual agreement of the parties hereto and may be
terminated by either party by an instrument in writing delivered or mailed,
postage prepaid to the other party, such termination to take effect not sooner
than sixty (60) days after the date of such delivery or mailing; provided, that
the Trust on behalf of one or more of the Portfolios may at time by action of
its Board (i) substitute another bank or trust company for the Custodian by
giving notice as described above to the Custodian, or (ii) terminate this
Contract immediately or at such later time as the Trust may designate in the
event the Trust determines that there is a reasonable basis to conclude that the
Custodian is insolvent or that the financial condition of the Custodian is
deteriorating in any material respect.
Upon termination of the Contract, the Trust on behalf of each applicable
Portfolio shall pay to the Custodian such compensation as may be due as of the
date of such termination and shall likewise reimburse the Custodian for its
costs, expenses and disbursements.
SECTION 10. SUCCESSOR CUSTODIAN
If a successor custodian for the Trust or of one or more of the Portfolios
shall be appointed by the Board, the Custodian shall, upon termination, deliver
to such successor custodian at the office of the Custodian all property of the
Trust then held by it hereunder and, in the case of securities, duly endorsed
and in the form for transfer, all securities of each applicable
<PAGE>
Portfolio then held by it hereunder and shall transfer to an account of the
successor custodian all of the securities of each such Portfolio held in a
Securities System. The Custodian shall take all reasonable steps to assist in
the transfer of the assets of the applicable Portfolios to the successor
custodian.
If no such successor custodian shall be appointed, the Custodian shall, in
like manner, upon receipt of a certified copy of a vote of the Board, deliver at
the office of the Custodian and transfer such securities, funds and other
properties in accordance with such vote. In the event that no written order
designating a successor custodian or certified copy of a vote of the Board shall
have been delivered to the Custodian on or before the date when such termination
shall become effective, then the Custodian shall have the right to deliver to a
bank or trust company, which is a "bank" as defined in the 1940 Act, doing
business in New York City, of its own selection, having an aggregate capital,
surplus, and undivided profits, as shown by its last published report, of not
less than $25,000,000, all securities, funds and other properties held by the
Custodian on behalf of each applicable Portfolio and all instruments held by the
Custodian relative thereto and all other property held by it under this Contract
on behalf of each applicable Portfolio and to transfer to an account of such
successor custodian all the securities of each such Portfolio held in any
Securities System. Thereafter, such bank or trust company shall be the
successor of the Custodian under this Contract.
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Trust to procure the certified copy of the vote referred to or of
the Board to appoint a successor custodian, the Custodian shall be entitled to
fair compensation for its services during such period as the Custodian retains
possession of such securities, funds and other properties and the provisions of
this Contract relating to the duties and obligations of the Custodian shall
remain in full force and effect.
SECTION 11. INTERPRETIVE AND ADDITIONAL PROVISIONS
In connection with the operation of this Contract, the Custodian and the
Trust on behalf of each of the Portfolios, may from time to time agree on such
provisions interpretive of or in addition to the provisions of this Contract as
may in their joint opinion be consistent with the general tenor of this
Contract. Any such interpretive or additional provisions shall be in a writing
signed by both parties and shall be annexed hereto, provided that no such
interpretive or additional provisions shall contravene any applicable federal or
state regulations or any provision of the Trust Instrument of the Trust. No
interpretive or additional provisions made as provided in the preceding sentence
shall be deemed to be an amendment of this Contract.
SECTION 12. ADDITIONAL PORTFOLIOS
In the event that the Trust establishes one or more series of Interests in
addition to the Portfolios with respect to which it desires to have the
Custodian render services as custodian under the terms hereof, it shall so
notify the Custodian in writing, and if the Custodian agrees in writing to
provide such services, such series of Interests shall become a Portfolio
hereunder.
<PAGE>
SECTION 13. CALIFORNIA LAW TO APPLY
This Contract shall be construed and the provisions thereof interpreted
under and in accordance with laws of State of California.
SECTION 14. PRIOR CONTRACTS
This Contract supersedes and terminates, as of the date hereof, all prior
contracts between the Trust on behalf of each of the Portfolios and the
Custodian relating to the custody of the Trust's assets.
SECTION 15. MISCELLANEOUS
15.1 The Custodian agrees to treat all records and other information relative
to the Trust and its prior, present or potential Shareholders
confidentially and the Custodian on behalf of itself and its employees
agrees to keep confidential all such information, except after prior
notification to and approval in writing by the Trust, which approval shall
not be unreasonably withheld. The preceding notwithstanding, in the event
legal process is served upon the Custodian requiring certain disclosure,
the Custodian may divulge such information. In such event, the Custodian
shall, if legally permissible, advise the Trust of its receipt of such
legal process.
15.2 Notwithstanding any other provision of this Contract, the parties agree
that the assets and liabilities of each Portfolio of the Trust are
separate and distinct from the assets and liabilities of each other
Portfolio and that no Portfolio shall be liable or shall be charged for
any debt, obligation or liability or any other Portfolio, whether arising
under the Contract or otherwise.
15.3 The provisions of this Section 15, Sections 7, 8, 13 and 16, and Section
2.19, and any other rights or obligations incurred or accrued by any party
hereto prior to termination of this Contract shall survive any termination
of this Contract.
SECTION 16. LIMITATIONS OF LIABILITY OF THE TRUSTEES AND
SHAREHOLDERS OFFICERS, EMPLOYEES AND AGENT
A copy of the Trust Instrument of the Trust is on file with the Secretary
of the Trust. The parties agree that neither the Shareholders, Trustees,
officers, employees nor any agent of the Trust shall be liable hereunder and
that the parties to this Contract other than the Trust shall look solely to the
Trust property for the performance of this Contract or payment of any claim
under this Contract.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Contract to be
duly executed all as of the day and year first above written.
ATTEST CORE TRUST (DELAWARE)
____________________ By__________________
David I. Goldstein John Y. Keffer
Secretary President
ATTEST IMPERIAL TRUST COMPANY
____________________ By__________________
Jai Sondhi Michael Vaughan
Senior Vice President President
<PAGE>
CORE TRUST (DELAWARE)
CUSTODIAN CONTRACT FEE ARRANGEMENT
September 1, 1995
WHEREAS, Core Trust (Delaware), a business trust organized under the laws
of the State of Delaware, having its principal place of business at 61 Broadway,
New York, N.Y. 10006 (the "Trust") and Imperial Trust Company, a California
trust company, having its principal place of business at 201 N. Figueroa Street,
Suite 610, Los Angeles, California 90012 (the "Custodian") have entered into a
Custodian Contract on the 1st day of September, 1995 (the "Contract"); and
WHEREAS, Section 7 of the Contract provides that the Custodian shall be
entitled to reasonable compensation for its services and expenses as Custodian,
as agreed upon from time to time between the Trust on behalf of each portfolio
of the Trust and the Custodian;
NOW THEREFORE, in consideration of the services to be provided by the
Custodian under the Contract, the Trust and the Custodian agree that the Trust
shall pay the Custodian, with respect to Treasury Cash Portfolio, Government
Cash Portfolio, and Cash Portfolio, (each a "Portfolio"), a fee of 0.025% of the
average annual daily net assets of each Portfolio. Such fees shall be accrued
by the Trust daily and payable monthly in arrears on the first day of the next
month.
ATTEST CORE TRUST (DELAWARE)
____________________ By__________________
David I. Goldstein John Y. Keffer
Secretary President
ATTEST IMPERIAL TRUST COMPANY
____________________ By__________________
Jai Sondhi Michael Vaughan
Senior Vice President President
<PAGE>
EXHIBIT (8)(e)
<PAGE>
EXHIBIT (8)(e)
CORE TRUST (DELAWARE)
CUSTODIAN AGREEMENT
AGREEMENT, dated as of February 20, 1996, between CORE TRUST (DELAWARE)
(the "Trust"), a corporation operating as an open-end investment company under
the Investment Company Act of 1940, duly organized and existing under the laws
of the State of Delaware, and The First National Bank of Boston (the
"Custodian"), a banking institution organized under the laws of the United
States, provides as follows:
WHEREAS, the Trust has eight separate series, including the Treasury
Portfolio (the "Portfolio");
WHEREAS, the Trust desires to appoint the Custodian as custodian of the
Portfolio's securities and cash and the Custodian is willing to act in such
capacity upon the terms and conditions set forth below;
WHEREAS, the Custodian in its capacity as custodian will also collect and
apply the dividends and interest on securities in the manner and to the extent
set forth below;
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, the parties do hereby agree as follows:
SECTION 1. The terms, as defined in this Section, whenever used in this
Agreement or in any amendment or supplement hereto shall have the meanings
specified below, insofar as the context will allow.
(a) The Trust: The term Trust shall mean Core Trust (Delaware) as defined
in the preamble of this Agreement.
(b) Custodian: The term Custodian shall mean The First National Bank of
Boston, in its capacity as custodian under this Agreement.
(c) Portfolio: The term Portfolio shall mean the Treasury Portfolio, or
any portfolio that the Trust shall subsequently establish and appoint the
Custodian as custodian thereof and the Custodian shall accept.
(d) Securities: The term Securities shall mean bonds, debentures, notes,
stocks, shares, evidences of indebtedness, and other securities and investments
from time to time owned by the Trust.
<PAGE>
(e) Shares: The term Shares shall mean the issued and outstanding shares
of common stock of a Portfolio of the Trust.
(f) Share Certificates: The term Share Certificates shall mean the stock
certificates for the Shares.
(g) Shareholders: The term Shareholders shall mean the registered owners
from time to time of the Shares, as reflected on the stock registry records of
the Trust.
(h) Oral Instructions: The term Oral Instructions shall mean an
authorization, instruction, approval, item or set of data, or information of any
kind transmitted to the Custodian in person or by telephone, vocal telegram or
other electronic means, by a person or persons reasonably believed in good faith
by the Custodian to be a person or persons authorized by a resolution of the
Board of Trustees of the Trust to give Oral Instructions on behalf of the Trust.
Each Oral Instruction shall specify whether it is applicable to the entire Trust
or a specific Portfolio of the Trust.
(i) Written Instructions: The term Written Instruction shall mean an
authorization, instruction, approval, item or set of data, or information of any
kind transmitted to the Custodian in original writing containing original
signatures, or a copy of such document transmitted by telecopy, including
transmission of such signature, or other mechanical or documentary means, at the
request of a person or persons reasonably believed in good faith by the
Custodian to be a person or persons authorized by a resolution of the Board of
Trustees of the Trust to give Written Instructions on behalf of the Trust. Each
Written Instruction shall specify whether it is applicable to the Shares of the
Trust or of the Portfolio.
(j) Securities Depository: The term Securities Depository shall mean a
clearing corporation registered under Section 17A of the Securities Exchange Act
of 1934 which maintains a system for the central handling of securities in which
all securities of any particular class or series of any issuer deposited within
the system are treated as fungible and may be transferred or pledged by
bookkeeping entry without physical delivery of the securities.
(k) Book-Entry Securities: The term Book-Entry Securities shall mean
securities issued by the Treasury of the United States of America and Federal
agencies of the United States of America that are maintained in the book-entry
system as provided in Subpart O of Treasury Circular No. 300, 31 C.F.R. 306,
Subpart B of 31 C.F.R. 350 and the book-entry regulations of federal agencies
substantially in the form of Subpart O, or in such successor regulations as may
be adopted from time to time.
(l) Book-Entry Account: The term Book-Entry Account shall mean as account
maintained by a Federal Reserve Bank in accordance with the previously described
Circular and regulations.
<PAGE>
(m) Sub-Custodian: The term Sub-Custodian shall mean a Sub-Custodian
approved by the Trust as provided in SECTION 18 of this Agreement.
SECTION 2. The Trust shall, as necessary, file with the Custodian a
certified copy of the operative resolution of the Trust's Board of Trustees
authorizing execution of Written Instructions and the number of signatories
required and setting forth authentic signatures of all signatories authorized to
sign on behalf of the Trust or the Portfolio. Such resolution shall constitute
conclusive evidence of the authority of all signatories designated therein to
act and shall be considered in full force and effect, with the Custodian fully
protected in acting in reliance thereon, until the Custodian receives a
certified copy of a replacement resolution adding or deleting a person or
persons authorized to give Written Instructions.
The Trust shall, as necessary, file with the Custodian a certified copy of
the operative resolution of the Trust's Board of Trustees authorizing the
transmittal of Oral Instructions and specifying the person or persons authorized
to give Oral Instructions on behalf of the Trust or the Portfolio. This
resolution shall constitute conclusive evidence of the authority of the person
or persons designated therein to act and shall be considered in full force and
effect, with the Custodian fully protected in acting in reliance therein, until
the Custodian actually receives a certified copy of a replacement resolution
adding or deleting a person or persons authorized to give Oral Instructions. If
the officer certifying the resolution is authorized to give Oral Instructions,
the certification shall also be signed by a second officer of the Trust
authorized to give Written Instructions.
SECTION 3. For all purposes under this Agreement, the Custodian is
authorized to act upon receipt of the first of any Written or Oral Instruction
it receives. If the first Instruction is an Oral Instruction, the Trust shall
be responsible for delivering, or having delivered to the Custodian, a
confirmatory Written Instruction; and in cases where the Custodian receives an
Instruction, whether Written or Oral, with respect to a portfolio transaction,
the Trust shall cause the broker or dealer to send a written confirmation of the
transaction to the Custodian. The Custodian shall be entitled to rely on the
first Instruction received and, for any act or omission undertaken in compliance
therewith, shall be free of liability and fully indemnified and held harmless by
the Trust. The sole obligation of the Custodian with respect to any
confirmatory Written Instruction or broker or dealer written confirmation shall
be to make reasonable efforts to detect any discrepancy between the original
Instruction and such confirmation and to report such discrepancy to the Trust.
The Trust shall be responsible, at the Trust's expense, for taking any action,
including any reprocessing, necessary to correct any discrepancy or error, and
to the extent such action requires the Custodian to act, the Trust shall give
the Custodian specific Written Instructions as to the action required.
SECTION 4. The Trust hereby appoints the Custodian as custodian of the
Securities and cash (collectively, "assets") of the Portfolio from time to time
on deposit hereunder. The Securities held by the Custodian, unless payable to
bearer or maintained in a Securities Depository or Book-Entry Account pursuant
to SECTION 5, shall be registered in the name of the Custodian or in the name of
its nominee, or if directed by Written Instructions, in the name of
<PAGE>
the Trust or its nominee. Securities, excepting bearer securities, delivered
from time to time to the Custodian in certificated form shall, in all cases, be
in due form for transfer, or registered as above provided. Such Securities and
cash of the Trust shall be and remain the sole property of the Trust and the
Custodian shall have only custody thereof.
The Custodian shall hold, earmark and physically segregate for the
Portfolio account of the Trust all non-cash property, including all Securities
that are not maintained pursuant to SECTION 5 in a Securities Depository or
Book-Entry Account.
The Custodian shall open and maintain a separate bank account or accounts
in the name of the Trust, subject only to draft or order by the Custodian acting
pursuant to the terms of this Agreement, and shall hold in such account or
accounts, subject to the provisions hereof, all cash received by it from or for
the account of the Trust. Notwithstanding the foregoing, a separate bank
account may be established by the Trust to be used as a petty cash account in
accordance with Rule 17f-3 of the Investment Company Act of 1940 and the
Custodian shall have no duty or liability with regard to such account.
Upon receipt of Written Instructions, cash held by the Custodian for the
Trust shall be deposited by the Custodian to the Custodian's credit in the
banking department of the Custodian or in such other banks or trust companies as
it may in its discretion deem necessary or desirable. Such funds shall be
deposited by the Custodian in its capacity as Custodian and shall be
withdrawable by the Custodian only in that capacity.
SECTION 5. The Trust hereby authorizes the Custodian to deposit assets of
the Portfolio as follows:
(a) deposit with the Custodian or any other bank licensed and examined by
the United States or any state thereof assets held in the Option Account created
pursuant to SECTION 13(b);
(b) deposit in the Custodian's account(s) with any Securities Depository
all or any part of the Securities as may from time to time be held for the
Trust; and
(c) deposit Book-Entry Securities belonging to the Trust in a Book-Entry
Account maintained for the Custodian by a Federal Reserve Bank.
So long as any deposit referred to in (b) or (c) above is maintained for
the Trust, the Custodian shall
(i) deposit the Securities in an account that includes only assets held by
it for customers;
(ii) send the Trust a confirmation (i.e., an advice of notice of
transaction) of any transfers of the Trust to or from the account;
<PAGE>
(iii) with respect to Securities of the Trust transferred to the account,
identify as belonging to the Trust a quantity of securities in a fungible bulk
of securities that are registered in the name of the Custodian or its nominee,
or shown on the Custodian's account on the books of the Securities Depository,
the Book-Entry System, or the Custodian's agent;
(iv) promptly send to the Trust all reports it receives from the
appropriate Federal Reserve Bank or Securities Depository on its respective
system of internal accounting control; and
(v) send to the Trust such reports of the systems of internal accounting
control of the Custodian and its agents through which such Securities are
deposited as are available and as the Trust may reasonably request from time to
time.
The Trust warrants that its Board of Trustees has approved the arrangement
for the deposit of Securities in a Securities Depository and Book-Entry System.
The Custodian shall not waive any rights it may have against a Securities
Depository or Federal Reserve Bank. The Trust may elect to be subrogated to the
rights of the Custodian against the Securities Depository or Federal Reserve
Bank or any other person with respect to any claim that the Custodian may have
as a consequence of any loss or damage suffered by the Trust as a result of the
Custodian's use of a Securities Depository or Book Entry Account if and to the
extent that the Trust has not been made whole for any such loss or damage.
SECTION 6. The Trust will initially transfer and deposit or cause to be
transferred and deposited with the Custodian all of the Securities and cash
owned by the Portfolio at the time this Agreement becomes effective. Such
transfer and deposit shall be evidenced by appropriate schedules duly executed
by the Trust. The Trust will deposit with the Custodian additional Securities
of the Trust and dividends or interest collected on such Securities as the same
are acquired from time to time.
The Trust will cause to be deposited with the Custodian from time to time
(i) the net proceeds of Securities sold, (ii) the applicable net asset value of
Shares sold, whether representing initial issue or any other securities and
(iii) cash as may be acquired.
SECTION 7. The Custodian is hereby authorized and directed to disburse
cash from time to time as follows:
(a) for the purchase of Securities by the Trust, upon receipt by the
Custodian of (i) Written or Oral Instructions specifying the Securities and
stating the purchase price and the name of the broker, investment banker or
other party to or upon whose order the purchase price is to be paid and (ii)
either the Securities so purchased, in due form for transfer or already
registered as provided in SECTION 4, or notification by a Securities Depository
or a Federal Reserve Bank
<PAGE>
that the Securities have been credited to the Custodian's account with the
Securities Depository or Federal Reserve Bank;
(b) for transferring funds, including mark-to-the-market payments, as
directed by the Trust in connection with a repurchase agreement covering
Securities that have been received by the Custodian as provided in subsection
(a) above, upon receipt by the Custodian of Written or Oral Instructions
specifying the Securities, the purchase price and the party to whom the purchase
price is to be paid;
(c) to advance or pay out accrued interest on bonds purchased, cash
dividends on stocks sold and similar items. In the event that any Securities
are registered in the name of the Trust or its nominee, the Trust will endorse,
or cause to be endorsed, to the Custodian dividend and interest checks, or will
issue appropriate orders to the issuers of the Securities to pay dividends and
interest to the Custodian;
(d) for transferring funds as directed by the Trust to its redemption
paying agent;
(e) for exercising warrants and rights received upon the Securities, upon
timely receipt of Written or Oral Instructions authorizing the exercise of such
warrants and rights and stating the consideration to be paid;
(f) for repaying, in whole or in part, any loan of the Trust, upon receipt
of Written or Oral Instructions directing payment;
(g) for transferring funds to any Sub-Custodian, upon receipt of Written or
Oral Instructions and upon agreement by the Custodian; and
(h) to disburse money to or upon the order of the Trust, as it may from
time to time direct for the following purposes;
(i) to pay proper compensation and expenses of the Custodian;
(ii) to transfer funds to the Trust's dividends disbursing agent;
(iii) to pay, or provide the Trust with money to pay, taxes, upon receipt
of appropriate Written or Oral Instructions;
(iv) to transfer funds to a separate checking account maintained by the
Trust pursuant to Section 17f of the Investment Company Act of 1940, as amended
from time to time; and
(v) to pay interest, management or supervisory fees, administration,
dividend and transfer agency fees and costs, compensation of personnel and
operating expenses, including but not limited to fees for legal, accounting and
auditing services. Before making any such payment or disbursement, however, the
Custodian shall receive, and may conclusively rely upon, Written or
<PAGE>
Oral Instructions requesting such payment or disbursement and stating that it
is for one or more or the purposes enumerated above. Notwithstanding the
foregoing, the Custodian may disburse cash for other corporate purposes;
provided, however, that such disbursement may be made only upon receipt of
Written or Oral Instructions stating that such disbursement was authorized by
resolution of the Board of Trustees of the Trust as a proper corporate
purpose.
The determination of the Board of Trustees of the Trust as to what shall
constitute income derived from the Securities, as distinguished from principal
or capital, shall be final and conclusive upon the Trust, the Custodian and the
Shareholders.
SECTION 8. The Custodian is hereby authorized and directed to deliver
Securities of the Trust from time to time as follows:
(a) for completing sales of Securities sold by the Trust, upon receipt of
(i) Written or Oral Instructions specifying the Securities sold, the amount to
be received and the broker, investment banker or other party to or upon whose
order the Securities are to be delivered and (ii) the net proceeds of sale;
provided, however, that the Custodian may accept payment in connection with the
sale of Book-Entry Securities and Securities on deposit with a Securities
Depository by means of a credit in the appropriate amount to the account
described in SECTION 5(b) or (c) above; and provided further, that the Custodian
may advance the proceeds of sale to the Trust pending the completion of the sale
or the return to the Trust of the Securities in the event the sale fails to be
completed. Any such advance shall be at the Custodian's risk and the Custodian
shall be subrogated to the Trust's rights against any other person in the event
the sale is not completed and the Trust's Securities are not returned;
(b) for exchanging Securities for other Securities (and cash, if
applicable), upon timely receipt of (i) Written or Oral Instructions stating the
Securities to be exchanged, cash to be received and the manner in which the
exchange is to be made and (ii) the other Securities (and cash, if applicable)
as specified in the Written or Oral Instructions;
(c) for exchanging or converting Securities pursuant to their terms or
pursuant to any plan of conversion, consolidation, recapitalization,
reorganization, readjustment or otherwise, upon timely receipt of (i) Written or
Oral Instructions authorizing such exchange or conversion and stating the manner
in which such exchange or conversion is to be made and (ii) the Securities,
certificates of deposit, interim receipts, and/or cash to be received as
specified in the Written or Oral Instructions;
(d) for presenting for payment Securities that have matured or have been
called for redemption;
(e) for depositing with the lender Securities to be held as collateral for
a loan to the Trust, upon receipt of Written or Oral Instructions directing
delivery to the lender;
<PAGE>
(f) in connection with a repurchase agreement, upon receipt of Written or
Oral Instructions stating (i) the Securities to be delivered and the payment to
be received and (ii) payment;
(g) for depositing with a depository agent in connection with a tender or
other similar offer to purchase portfolio Securities of the Trust, upon receipt
of Written or Oral Instructions;
(h) for depositing Securities with the issuer thereof, or its agents, for
the purpose of transferring such Securities into the name of the Trust, the
Custodian or any nominee of either in accordance with SECTION 4; and
(i) for other proper corporate purposes; provided, that the Custodian shall
receive Written or Oral Instructions requesting such delivery.
SECTION 9. The Trust will cause any bank (including the Custodian) from
which it borrows money using Securities as collateral to deliver to the
Custodian a notice of undertaking in the form then currently employed by the
lender setting forth the amount that the lender will loan to the Trust against
delivery of a stated amount of collateral. The Trust shall promptly deliver to
the Custodian Written or Oral Instructions for each loan, stating (i) the name
of the lender and the amount of loan; and (ii) the name of the issuer, the title
and the number of shares or principal amount of the Securities to be delivered
as collateral. The Custodian shall deliver as directed by the Trust such
specified collateral, if any, and receive from the lender the total amount of
the loan proceeds; provided, however, that no delivery of Securities shall occur
if the amount of loan proceeds does not conform to the amount set forth in the
Written or Oral Instructions, or if such Instructions do not contain the
requirements of (ii) above.
The Custodian shall deliver, from time to time, any Securities required as
additional collateral for any transaction described in this Section, upon
receipt of Written or Oral Instructions. The Trust shall cause all Securities
released from collateral status to be returned directly to the Custodian.
SECTION 10. If, in its sole discretion, the Custodian advances funds to
the Trust to pay for the purchase of Securities, to cover an overdraft of the
Trust's account with the Custodian, or to pay any other indebtedness to the
Custodian, the Trust's indebtedness shall be deemed to be a loan by the
Custodian to the Trust, payable on demand and bearing interest at the rate then
charged by the Custodian for such loans; provided, however, that the Custodian
shall obtain the Trust's prior approval for any advance of funds other than for
the purpose of settling a Securities trade. The Trust hereby agrees that the
Custodian shall have a continuing lien and security interest, to the extent of
any such overdraft or indebtedness, and to the extent required by Regulation U
of the Board of Governors of the Federal Reserve System in the event any
security interest is taken in "margin stock" as therein defined, in any property
then held by the Custodian or its agents for the benefit of the Trust, or in
which the Trust may have an interest. The Trust authorizes the Custodian, in
its sole discretion at any time, to charge any such overdraft or
<PAGE>
indebtedness, together with interest due thereon, against any balance then
credited to the Trust on the Custodian's books.
SECTION 11. The Custodian's responsibilities regarding put and call option
contracts will be governed by the following subsections:
(a) With respect to puts and calls traded on securities exchanges:
(1) The Custodian shall take action as to put options ("puts") and
call options ("calls") purchased or sold (written) by the Trust regarding escrow
or other arrangements (i) in accordance with the provisions of any agreement
between the Custodian, any broker-dealer registered under the Securities
Exchange Act of 1934, as amended ("Exchange Act"), and a member of the National
Association of Securities Dealers, Inc. and, if necessary, the Trust relating to
compliance with the rules of the Options Clearing Corporation ("OCC") and of any
registered national securities exchange, or of any similar organization or
organizations, or (ii) alternatively, in accordance with subsection (d) as to
covered call options written by the Trust.
(2) The Custodian shall be under no duty or obligation to see that
the Trust has deposited or is maintaining adequate margin, if required, with any
broker in connection with any option, nor shall the Custodian be under any duty
or obligation to present such option to the broker for exercise unless it
receives proper Instructions from the Trust. The Custodian shall have no
responsibility for the legality of any put or call purchased or sold on behalf
of the Trust, the propriety of any such purchase or sale, or the adequacy of any
collateral delivered to a broker in connection with an option or deposited to or
withdrawn from a Segregated Account as described in subsection (c) of this
SECTION 11. The Custodian specifically, but not by way of limitation, shall not
be under any duty or obligation to: (i) periodically check or notify the Trust
that the amount of collateral held by a broker or held in a Segregated Account
as described in subsection (c) of this SECTION 11 is sufficient to protect the
broker against any loss; (ii) effect the return of any collateral delivered to a
broker; or (iii) advise the Trust that any option it holds has or is about to
expire. Such duties or obligations shall be the sole responsibility of the
Trust.
(b) With respect to puts, calls and futures traded on commodities
exchanges:
(1) The Custodian shall take action as to puts, calls and futures
contracts ("futures") purchased or sold by the Trust in accordance with the
provisions of any agreement among the Trust, the Custodian and a futures
commission merchant registered under the Commodity Exchange Act, as amended,
relating to compliance with the rules of the Commodity Futures Trading
Commission and/or any contract market, or any similar organization or
organizations, regarding account deposits in connection with transactions by the
Trust.
(2) The responsibilities and liabilities of the Custodian as to
futures, puts and calls traded on commodities exchanges, any futures commission
merchant account and the Segregated Account shall be limited as set forth in
subsection (a) (2) of this SECTION 11 as if such
<PAGE>
subsection referred to futures commission merchants rather than brokers, and
futures and puts and calls thereon instead of options.
(c) The Custodian shall upon receipt of Oral or Written Instructions
establish and maintain a Segregated Account or Accounts for and on behalf of
the Trust, into which Account or Accounts may be transferred cash and
Securities (i) in accordance with the provisions of any agreement among the
Trust, the Custodian and a broker-dealer registered under the Exchange Act
and a member of the National Association of Securities Dealers, Inc. or any
futures commission merchant registered under the Commodity Exchange Act,
relating to compliance with the rules of OCC and of any registered national
securities exchange or the Commodity Futures Trading Commission or any
registered contract market, or of any similar organization or organizations
regarding escrow or other arrangements in connection with transactions by the
Trust, and (ii) for the purpose of segregating cash or Securities in
connection with options written by the Trust, and (iii) for the purposes of
compliance by the Trust with the procedures required by Investment Company
Act Release No. 10666, or any subsequent release or releases of the
Securities and Exchange Commission relating to the maintenance of Segregated
Accounts by registered investment companies and (iv) for other proper
corporate purposes, but only, in the case of clause (iv), upon receipt of, in
addition to Written or Oral Instructions, a certified copy of a resolution of
the Board of Trustees of the Trust signed by an officer of the Trust and
certified by the Secretary or an Assistant Secretary, setting forth the
purpose or purposes of such Segregated Account and declaring such purposes to
be proper corporate purposes.
(d) Upon receipt of Written or Oral Instructions, the Custodian will
execute, or cause a Sub-Custodian or depository to execute, an escrow receipt
relating to a call option written by the Trust and will deliver such escrow
receipt against receipt of payment of the premium therefor or, in the case of
call option contracts issued by OCC, an escrow deposit form of OCC pursuant to
the Escrow Deposit Agreement in effect from time to time between the Custodian
and OCC. The Instruction shall contain all information necessary for the
issuance of such receipt or deposit form and will authorize the deposit of the
securities specified therein into an escrow account which will be held by the
Custodian or a depository subject to the terms of such escrow receipt or deposit
form. However, the Custodian agrees that it will not deliver or cause a
depository to deliver any securities deposited in an escrow account pursuant to
an exercise notice unless the Custodian has received Oral or Written Instruction
to do so or (i) the Custodian has duly requested the issuance of such
Instruction; (ii) at least two business days have elapsed since the receipt of
such request to the Trust; and (iii) the Trust has not advised the Custodian
that it has purchased Securities that are to be delivered pursuant to the
exercise notice. The Trust shall be subrogated to the rights of the Custodian
against any party for any claim the Custodian may have as a result of the
Custodian's delivery or directing delivery of Securities deposited in an escrow
account other than pursuant to an Instruction by the Trust. The Trust agrees
that it will not issue an Instruction which shall conflict with the terms of any
escrow receipt executed by the Custodian or any depository in relation to the
Trust which is then in effect. The Custodian need not maintain any written
evidence of any call written by the Trust as part of its duties under this
Agreement. The Trust may write calls on securities ("underlying securities")
which are not owned by the Trust and may issue an Instruction to the Custodian
to execute, or cause a
<PAGE>
depository to execute, an escrow receipt or deposit form on securities
("convertible securities") which are, or are to be, owned by the Trust and are
convertible into the underlying securities. In such event, any Instruction as
to the execution of the escrow receipt or deposit form will relate only to such
convertible securities but any instruction as to the delivery of such securities
may direct the Custodian to convert the same.
SECTION 12. The Custodian assumes no duty, obligation or responsibility
whatsoever to exercise any voting or consent powers with respect to the
Securities held by it from time to time hereunder. The Trust or such person or
persons as it may designate shall have the right to vote, consent or otherwise
act with respect to such Securities. The Custodian will exercise its best
efforts (as defined in SECTION 14) to furnish to the Trust in a timely manner
all proxies or other appropriate authorizations with respect to Securities
registered in the name of the Custodian or its nominee, so that the Trust or its
designee may vote, consent or otherwise act.
SECTION 13. The Trust agrees to pay to the Custodian compensation for its
services as set forth in Schedule A hereto attached, or as shall be set forth in
written amendments to such Schedule approved by the Trust and the Custodian from
time to time.
SECTION 14. The Custodian will exercise its best efforts to forward to the
Trust in a timely manner all notices of stockholder meetings, proxy statements,
annual reports, conversion notices, call notices, or other notices or written
materials of any kind (excluding stock certificates and dividend and interest
payments) received by the Custodian as registered owner of Securities ("notices
and materials"). The Trust and its investment adviser have primary
responsibility for taking action on such notices and materials. Best efforts as
used in this Agreement shall mean the efforts reasonably believed in good faith
by the Custodian to be adequate in the circumstances.
Upon receipt of warrants or rights issued in connection with the assets of
the Trust, the Custodian shall enter into its ledgers appropriate notations
indicating such receipt and shall notify the Trust of such receipt. However,
the Custodian shall have no obligation to take any other action with respect to
such warrants or rights, except as directed in Written or Oral Instructions.
SECTION 15. The Custodian assumes no duty, obligation or responsibility
whatsoever with respect to Securities not deposited with the Custodian.
SECTION 16. The Custodian acknowledges and agrees that all books and
records maintained for the Trust in any capacity under this Agreement are the
property of the Trust and may be inspected by the Trust or any authorized
regulatory agency at any reasonable time. Upon request all such books and
records will be surrendered promptly to the Trust. The Custodian agrees to make
available upon request and to preserve for the periods prescribed in Rule 31a-2
of the Investment Company Act of 1940 any records related to services provided
under this Agreement and required to be maintained by Rule 31a-1 of such Act.
<PAGE>
SECTION 17. The Custodian assumes only the duties and obligations
specifically set forth herein, and duties incidental thereto normally performed
by custodians of mutual funds. It specifically assumes no responsibility for
the management, investment or reinvestment of the Securities from time to time
owned by the Trust, whether or not on deposit hereunder. The responsibility for
the proper and timely management, investment and reinvestment of such Securities
shall be that of the Trust and its investment advisor.
The Custodian shall not be liable for any taxes, assessments or
governmental charges that may be levied or assessed upon the Securities held by
it hereunder, or upon the income therefrom. Upon Written or Oral Instructions,
the Custodian may pay any such tax, assessment or charge and reimburse itself
out of the monies of the Trust or the Securities held hereunder.
The Custodian may rely upon the advice of counsel, who may be counsel for
the Trust or for the Custodian, and upon statements of accountants, brokers or
other persons believed by it in good faith to be expert in the matters upon
which they are consulted. The Custodian shall not be liable for any action
taken in good faith reliance upon such advice or statements. The Custodian
shall not be liable for action taken in good faith in accordance with any
Written or Oral Instructions, request or advice of the Trust or its officers, or
information furnished by the Trust or its officers. The Custodian shall not be
liable for any non-negligent action taken in good faith and reasonably believed
by it to be within the powers conferred upon it by this Agreement.
No liability of any kind, other than to the Trust, shall attach to the
Custodian by reason of its custody of the Securities and cash of the Trust under
this Agreement or otherwise as a result of its custodianship. In the event that
any claim shall be made against the Custodian, it shall have the right to pay
the claim and reimburse itself from the assets of the Trust in its hands;
provided, however, that no such reimbursement shall occur unless the Trust is
notified of the claim and is afforded an opportunity to defend the claim, if it
so elects. Except as otherwise provided herein, the Trust shall further agree
to indemnify and hold the Custodian harmless for any loss, claim, damage,
expense or liability arising out of the custodian relationship under this
Agreement; provided such loss, claim, damage, expense or liability is not the
direct result of the Custodian's negligence or willful misconduct.
SECTION 18. Upon receipt of Written or Oral Instructions to appoint a Sub-
Custodian, which shall be deemed a Trust approval of the appointment, the
Custodian shall appoint one or more banking institutions licensed and examined
by the United States or any state thereof as Sub-Custodian of Securities and
cash of the Trust from time to time; provided, however, that the Custodian shall
have requested appointment of a Sub-Custodian.
The Custodian shall have no liability to the Trust or any other person by
reason of any act or omission of any Sub-Custodian, and the Trust shall
indemnify the Custodian and hold it harmless from and against any and all
actions, suits and claims, whether groundless or otherwise, and from and against
any and all losses, damages, costs, charges, counsel fees, payments, expenses
and liabilities arising directly of indirectly out of or in connection with
the performance of any Sub-Custodian; provided, however, that the Custodian
shall, and hereby does, assign
to
<PAGE>
the Trust any and all claims for any losses, costs, expenses, or damages that
may be incurred by the Trust by reason of the negligence, gross negligence or
misconduct of any Sub-Custodian, or by reason of the failure of a Sub-Custodian
to perform in accordance with any applicable agreement, including instructions
of the Custodian of the Trust. The Custodian shall be under no obligation to
prosecute or to defend any action, suit or claim arising out of, or in
connection with, the performance of any Sub-Custodian, if, in the opinion of the
Custodian's counsel, such action will involve the Custodian in expense or
liability. The Trust shall, upon request, furnish the Custodian with
satisfactory indemnity against such expense or liability, and upon request of
the Custodian, the Trust shall assume the entire defense of any action, suit, or
claim subject to the foregoing indemnity.
The Trust shall pay all fees and expenses of any Sub-Custodian.
SECTION 19. This Agreement may be amended from time to time without notice
to or approval of the Shareholders by a written supplemental agreement executed
by the Trust and the Custodian.
SECTION 20. This Agreement may be terminated by either party upon notice
to the other. The termination shall become effective at the time specified in
the notice but no earlier than sixty (60) days after the date of the notice.
Upon notice of termination, the Trust shall use its best efforts to obtain a
successor custodian. If a successor custodian is not appointed within sixty
(60) days after the date of the notice of termination, the Board of Trustees of
the Trust shall, by resolution, designate the Trust as its own custodian. Each
successor custodian shall be a person qualified to serve under the Investment
Company Act of 1940, as amended from time to time. Promptly following receipt
of written notice from the Trust of the appointment of a successor custodian and
receipt of Written or Oral Instructions, the Custodian shall deliver upon
payment of the Custodian's reasonable charges and disbursements and any other
amounts due all Securities and cash it then holds directly to the successor
custodian and shall, upon request of the Trust and the successor custodian,
execute and deliver to the successor custodian an instrument approved by its
counsel transferring to the successor custodian all the rights, duties and
obligations of the Custodian, transfer to the successor custodian the originals
or copies of all books and records maintained by the Custodian hereunder and
cooperate with, and provide reasonable assistance to, the successor custodian in
the establishment of the books and records necessary to carry out its
responsibilities hereunder. If the Trust's Board of Trustees fails to designate
a successor custodian or to designate the Trust as its own custodian within
sixty (60) days after the date of the notice of termination, the Custodian may,
at the expense of the Trust, apply to the Federal District Court for the
Commonwealth of Massachusetts for further direction as to the disposition of the
Trust's assets. Notwithstanding the termination of this Agreement, the
Custodian shall be obligated to safeguard the assets of the Trust and may change
reasonable and customary fees for doing so pending receipt by the court or the
Trust of instructions for delivery of all securities and cash held, but the
Custodian shall have no obligation to process any other transactions or perform
any other custodial functions following termination of this Agreement. Upon
delivery of the Securities and other assets of the Trust and compliance with the
other requirements of this SECTION 20, the Custodian shall have no further duty
or liability
<PAGE>
hereunder. Every successor custodian appointed hereunder shall execute and
deliver an appropriate written acceptance of its appointment and shall thereupon
become vested with the rights, powers, obligations and custody of the
predecessor custodian.
SECTION 21. Nothing contained in this Agreement is intended to or shall
require the Custodian in any capacity hereunder to perform any functions or
duties on any holiday, weekend or weekday on which the Custodian or the New York
Stock Exchange is closed or permitted by law to be closed. Functions or duties
normally scheduled to be performed on such days shall be performed on, and as
of, the next business day on which both the New York Stock Exchange and the
Custodian are open, unless otherwise required by law.
SECTION 22. Unless otherwise agreed upon by the parties, this Agreement
shall become effective as of the date set forth on the first page hereof.
SECTION 23. This Agreement may be executed in more than one counterpart,
each of which shall be deemed to be an original, and all of which together shall
constitute one and the same instrument.
SECTION 24. This Agreement shall extend to and bind the parties hereto and
their respective successors and assigns; provided, however, that this Agreement
shall not be assignable by the Trust without the written consent of the
Custodian, or by the Custodian without the written consent of the Trust,
authorized or approved by a resolution of the Trust's Board of Trustees.
Notwithstanding the foregoing, either party may assign this Agreement without
the consent of the other party so long as the assignee is an affiliate, parent
or subsidiary of the assigning party and the assignee of the Custodian is
qualified to serve as custodian under the Investment Company Act of 1940, as
amended from time to time.
SECTION 25. This Agreement shall be governed by the laws of the
Commonwealth of Massachusetts.
WITNESS the following signatures:
CORE TRUST (DELAWARE)
BY:
-------------------------
John Y. Keffer
TITLE: President
---------------------
FIRST NATIONAL BANK OF BOSTON
BY:
-------------------------
TITLE:
----------------------
<PAGE>
SCHEDULE A
BASE FEE
ADMINISTRATIVE FEE -
TRANSACTION FEES
MINIMUM FEE
<PAGE>
EXHIBIT (9)(a)
<PAGE>
EXHIBIT (9)(a)
CORE TRUST (DELAWARE)
ADMINISTRATION AGREEMENT
AGREEMENT made this 9th day of November, 1994, between Core Trust
(Delaware) (the "Trust"), a business trust organized under the laws of the State
of Delaware with its principal place of business at Two Portland Square,
Portland, Maine 04101, and Forum Financial Services, Inc. ("Forum"), a
corporation organized under the laws of State of Delaware with its principal
place of business at 61 Broadway, New York, New York 10006.
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended, (the "Act") as an open-end management investment company and is
authorized to issue interests (as defined in the Trust's Trust Instrument) in
separate series; and
WHEREAS, the Trust desires that Forum perform administrative services for
each of the portfolios of the Trust as listed in Appendix A hereto (each a
"Portfolio," and collectively the "Portfolios") and Forum is willing to provide
those services on the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
SECTION 1. THE TRUST; DELIVERY OF DOCUMENTS
The Trust is engaged in the business of investing and reinvesting its
assets in securities of the type and in accordance with the limitations
specified in its Trust Instrument and Registration Statement filed with the
Securities and Exchange Commission (the "Commission") under the Act, as may be
supplemented from time to time, all in such manner and to such extent as may
from time to time be authorized by the Trust's Board of Trustees (the "Board").
The Trust is currently authorized to issue four series of interests and the
Board is authorized to issue interests in any number of additional series. The
Trust has delivered to Forum copies of the Trust's Trust Instrument and
Registration Statement and will from time to time furnish Forum with any
amendments thereof.
SECTION 2. APPOINTMENT
The Trust hereby employs Forum, subject to the direction and control of the
Board, to manage all aspects of the Trust's operations with respect to each
Portfolio except those which are the responsibility of Norwest Bank Minnesota,
N.A. or Schroder Capital Management International Inc. (the "Advisers"), the
Trust's investment advisers.
SECTION 3. ADMINISTRATIVE DUTIES
<PAGE>
(a) With respect to the Trust or each Portfolio, as applicable, Forum
shall:
(i) oversee (A) the preparation and maintenance by the Advisers and the
Trust's custodian, transfer agent and fund accountant (or if appropriate,
prepare and maintain) in such form, for such periods and in such locations
as may be required by applicable law, of all documents and records relating
to the operation of the Trust required to be prepared or maintained by the
Trust or its agents pursuant to applicable law; (B) the reconciliation of
account information and balances among the Advisers and the Trust's
custodian, transfer agent and fund accountant; (C) the transmission of
purchase and redemption orders for interests in the Portfolios; (D) the
notification to the Advisers of available funds for investment; and (E) the
performance of fund accounting, including the calculation of the net asset
value of the Trust's interests;
(ii) oversee the performance of administrative and professional services
rendered to the Trust by others, including its custodian, transfer agent
and fund accountant as well as legal, auditing and interestholder servicing
and other services performed for the Portfolios;
(iii) be responsible for the preparation and the printing of the periodic
updating of the Registration Statement, tax returns, and reports to
interestholders and the Commission;
(iv) be responsible for the preparation of proxy and information
statements and any other communications to interestholders;
(v) at the request of the Board, provide the Trust with adequate general
office space and facilities and provide persons suitable to the Board to
serve as officers of the Trust;
(vi) provide the Trust, at the Trust's expense, with the services of
persons, who may be officers of the Trust, competent to perform such
supervisory, administrative and clerical functions as are necessary to
provide effective operations of the Trust;
(vii) prepare, file and maintain the Trust's governing documents,
including the Trust Instrument and minutes of meetings of Trustees and
interestholders;
(viii) with the approval of the Trust's counsel and cooperation from the
Advisers and other relevant parties, prepare and disseminate materials for
meetings of the Board;
(ix) oversee the calculation of performance data for dissemination to
information services covering the investment company industry, for sales
literature of the Trust or its interestholders and other appropriate
purposes;
(x) oversee the determination of the amount of and supervise
distributions to interestholders as necessary to, among other things,
maintain the qualification of each interestholder that may be a regulated
investment company under the Internal Revenue Code of 1986, as amended; and
<PAGE>
(xi) advise the Trust and the Board on matters concerning the Trust and
its affairs.
(b) The books and records pertaining to the Trust which are in
possession of Forum shall be the property of the Trust. The Trust, or the
Trust's authorized representatives, shall have access to such books and records
at all times during Forum's normal business hours. Upon the reasonable request
of the Trust, copies of any such books and records shall be provided promptly by
Forum to the Trust or the Trust's authorized representatives. In the event the
Trust designates a successor to any of Forum's obligations hereunder, Forum
shall, at the expense and direction of the Trust, transfer to such successor all
relevant books, records and other data established or maintained by Forum under
this Agreement.
SECTION 4. STANDARD OF CARE
The Trust shall expect of Forum, and Forum will give the Trust the benefit
of, Forum's best judgment and efforts in rendering these services to the Trust,
and the Trust agrees as an inducement to Forum's undertaking these services that
Forum shall not be liable hereunder for any mistake of judgment or in any event
whatsoever, except for lack of good faith, provided that nothing herein shall be
deemed to protect, or purport to protect, Forum against any liability to the
Trust or to its interestholders to which Forum would otherwise be subject by
reason of willful misfeasance, bad faith or gross negligence in the performance
of Forum's duties hereunder, or by reason of Forum's reckless disregard of its
obligations and duties hereunder. As used in this Section 4, the term "Forum"
shall include any affiliates of Forum performing services for the Portfolios
contemplated hereby and directors, officers and employees of Forum as well as
Forum itself.
SECTION 5. COMPENSATION; EXPENSES
(a) In consideration of the administrative services performed by Forum
as described herein, the Trust will pay Forum, with respect to each Portfolio a
fee at the annual rate as listed in Appendix A hereto. Such fee shall be
accrued by the Trust daily and shall be payable monthly in arrears on the first
day of each calendar month for services performed hereunder during the prior
calendar month.
(b) The Trust hereby confirms that the Trust shall be responsible and
shall assume the obligation for payment of all the Trust's expenses, including:
interest charges, taxes, brokerage fees and commissions; certain insurance
premiums; fees, interest charges and expenses of the Trust's custodian and
transfer agent; telecommunications expenses; auditing, legal and compliance
expenses; costs of the Trust's formation and maintaining its existence; costs of
preparing the Trust's registration statement, account application forms and
interestholder reports and delivering them to existing and prospective
interestholders; costs of maintaining books of original entry for portfolio and
fund accounting and other required books and accounts and of calculating the net
asset value of interests in the Trust; costs of reproduction, stationery and
supplies; compensation of the Trust's trustees, officers and employees and the
costs of other personnel performing services for the Trust who are not officers
of the Advisers or of Forum
<PAGE>
Financial Services, Inc. or affiliated persons of either; costs of Trust
meetings; registration fees and related expenses for registration with the
Commission and the securities regulatory authorities of other countries in which
the Trust's interests are sold; state securities law registration fees and
related expenses; and fees and out-of-pocket expenses payable to each investment
adviser under any investment advisory or similar agreement.
SECTION 6. EFFECTIVENESS, DURATION AND TERMINATION
(a) This Agreement shall become effective with respect to each Portfolio
on the date hereof and with respect to each future portfolio of the Trust on the
date this Agreement or Appendix A hereto is amended. Upon effectiveness of this
Agreement, it shall supersede all previous agreements between the parties hereto
covering the subject matter hereof insofar as such Agreement may have been
deemed to relate to the Portfolios.
(b) This Agreement shall continue in effect with respect to a Portfolio
for a period of one year from its effectiveness and shall continue in effect for
successive twelve-month periods; provided, however, that continuance is
specifically approved at least annually (i) by the Board or by a vote of a
majority of the outstanding voting interests of the Portfolio and (ii) by a vote
of a majority of Trustees of the Trust who are not parties to this agreement or
interested persons of any such party (other than as Trustees of the Trust);
provided further, however, that if the continuation of this agreement is not
approved as to a Portfolio, Forum may continue to render to the Portfolio the
services described herein in the manner and to the extent permitted by the Act
and the rules and regulations thereunder.
(c) This Agreement may be terminated with respect to a Portfolio at any
time, without the payment of any penalty, (i) by the Board on 60 days' written
notice to Forum or (ii) by Forum on 60 days' written notice to the Trust. This
agreement shall terminate upon assignment.
SECTION 7. ACTIVITIES OF FORUM
Except to the extent necessary to perform Forum's obligations hereunder,
nothing herein shall be deemed to limit or restrict Forum's right, or the right
of any of Forum's officers, directors or employees who may also be a trustee,
officer or employee of the Trust, or persons otherwise affiliated persons of the
Trust to engage in any other business or to devote time and attention to the
management or other aspects of any other business, whether of a similar or
dissimilar nature, or to render services of any kind to any other corporation,
trust, firm, individual or association.
SECTION 8. LIMITATION OF INTERESTHOLDER AND TRUSTEE LIABILITY
The Trustees of the Trust and the interestholders of each Portfolio shall
not be liable for any obligations of the Trust or of the Portfolios under this
Agreement, and Forum agrees that, in asserting any rights or claims under this
Agreement, it shall look only to the assets and property
<PAGE>
of the Trust or the Portfolio to which Forum's rights or claims relate in
settlement of such rights or claims, and not to the Trustees of the Trust or the
interestholders of the Portfolios.
SECTION 9. MISCELLANEOUS
(a) No provisions of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by both
parties hereto.
(b) If any part, term or provision of this Agreement is held to be
illegal, in conflict with any law or otherwise invalid, the remaining portion or
portions shall be considered severable and not be affected, and the rights and
obligations of the parties shall be construed and enforced as if the Agreement
did not contain the particular part, term or provision held to be illegal or
invalid.
(c) This Agreement may be executed by the parties hereto on any number
of counterparts, and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
(d) Section headings in this Agreement are included for convenience only
and are not to be used to construe or interpret this Agreement.
(e) This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the New York.
(f) The terms "vote of a majority of the outstanding voting interests,"
"interested person," "affiliated person" and "assignment" shall have the
meanings ascribed thereto in the Act to the terms "vote of a majority of the
outstanding voting securities," "interested person," "affiliated person" and
"assignment," respectively.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
CORE TRUST (DELAWARE)
------------------------------
John Y. Keffer
President
FORUM FINANCIAL SERVICES, INC.
------------------------------
David R. Keffer
Vice President
<PAGE>
CORE TRUST (DELAWARE)
ADMINISTRATION AGREEMENT
APPENDIX A
Annual Fee as a % of
the Average Daily
Portfolios of the Trust Net Assets of the Portfolio
- ----------------------- ---------------------------
International Portfolio 0.15%
International Portfolio II 0.10%
Index Portfolio 0.10%
Small Company Portfolio 0.10%
<PAGE>
EXHIBIT (9)(b)
<PAGE>
EXHIBIT (9)(b)
CORE TRUST (DELAWARE)
FUND ACCOUNTING AGREEMENT
AGREEMENT made this 9th day of November, 1994, between Core Trust
(Delaware) (the "Trust"), a business trust organized under the laws of the State
of Delaware with its principal place of business at Two Portland Square,
Portland, Maine 04101, and Forum Financial Corp., a corporation organized under
the laws of the State of Delaware, having its principal place of business at Two
Portland Square, Portland, Maine 04101 ("Forum").
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as an open-end management investment company and is
authorized to issue interests (as defined in the Trust's Trust Instrument) in
separate series;
WHEREAS, the Trust desires that Forum perform interestholder and fund
accounting services for each of the portfolios of the Trust as listed in
Appendix A hereto (each a "Portfolio," and collectively the "Portfolios") and
Forum is willing to provide those services on the terms and conditions set forth
in this Agreement; and
WHEREAS, the Trust on behalf of each Portfolio desires to appoint Forum as
its transfer agent and fund accountant, and Forum desires to accept such
appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
SECTION 1. TERMS OF APPOINTMENT; DUTIES OF FORUM
(a) Subject to the terms and conditions set forth in this Agreement, the
Trust, on behalf of each Portfolio, hereby employs and appoints Forum to act as,
and Forum agrees to act as, its transfer agent and fund accountant for the
authorized and issued interests of the Trust representing interests in each of
the respective Portfolios ("Interests").
(b) Forum shall be responsible for performing as agent, as of the date of
this Agreement, the services described in Appendix B attached hereto and made a
part hereof, as said appendix may be amended from time to time:
(c) Forum shall provide additional services to the Trust on behalf of the
Portfolios which may be agreed upon in writing between the Trust and Forum.
SECTION 2. FEES AND EXPENSES
<PAGE>
(a) For its services hereunder Forum shall receive from the Trust, with
respect to each Portfolio, such transfer agency and fund accounting fees as are
listed in Appendix C attached hereto, as amended from time to time.
(b) Each Portfolio shall reimburse Forum for its ancillary costs (or
appropriate share of the costs) incurred in providing to that Portfolio any
transfer agency and fund accounting services hereunder, including but not
limited to (i) any and all forms and stationery used or specially prepared for
the purpose, (ii) postage, (iii) telephone services, (iv) bank fees, and (v)
electronic or facsimile transmission. Each Portfolio shall reimburse Forum for
all expenses and employee time attributable to any review of the Portfolio's
accounts and records by the Trust's independent public accountants or any
regulatory body outside of routine and normal periodic reviews and for all
expenses for services in connection with Forum's activities in effecting any
termination of this Agreement (except the termination of Forum for cause),
including expenses incurred by Forum to deliver the property of the Portfolio in
the possession of Forum to the Trust or other persons.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF FORUM
Forum represents and warrants to the Trust that:
(a) It is a corporation duly organized and existing and in good standing
under the laws of the State of Delaware.
(b) It is registered as a transfer agent under the Securities Exchange Act
of 1934, as amended ("1934 Act") and it is empowered under applicable laws and
by its Articles of Incorporation and By-Laws to enter into and perform this
Agreement.
(c) All requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement.
(d) It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under this
Agreement.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE TRUST
The Trust represents and warrants to Forum that:
(a) It is a business trust duly organized and existing and in good
standing under the laws of the State of Delaware.
(b) It is empowered under applicable laws and by its Trust Instrument to
enter into and perform this Agreement.
(c) All proceedings required by said Trust Instrument have been taken to
authorize it to enter into and perform this Agreement.
<PAGE>
(d) It is an investment company registered under the 1940 Act.
(e) All interests of the Portfolios, when issued, shall be validly issued,
fully paid and non-assessable.
SECTION 5. RECORDKEEPING; INSPECTION OF RECORDS
(a) Forum shall prepare and maintain in such form and in such locations as
may be required by applicable regulation all records and documents relating to
the services provided to the Trust pursuant to this Agreement required to be
prepared and maintained by Forum or the Trust pursuant to the 1940 Act, the 1934
Act and the rules and regulations of the Securities and Exchange Commission and
the Internal Revenue Service.
(b) Forum shall notify the Trust of any request or demand for the
inspection of the Trust's interestholder records. Forum shall abide by the
Trust's instructions for granting or denying the inspection; provided, however,
Forum may grant the inspection without such instructions if it is advised by its
counsel that failure to do so will result in liability to Forum.
(c) Forum shall keep records relating to the services to be performed
hereunder, in the form and manner as it may deem advisable. The Trust, or the
Trust's authorized representatives, shall have access to such books and records
at all times during Forum's normal business hours. Upon the reasonable request
of the Trust, copies of any such books and records shall be provided promptly by
Forum to the Trust or the Trust's authorized representatives. In the event the
Trust designates a successor to any of Forum's obligations hereunder, Forum
shall, at the expense and direction of the Trust, transfer to such successor all
relevant books, records and other data established or maintained by Forum under
this Agreement. To the extent required by Section 31 of the 1940 Act and the
Rules thereunder, Forum agrees that all such records prepared or maintained by
Forum relating to the services to be performed by Forum hereunder are the
property of the Trust and will be preserved, maintained and made available in
accordance with such Section and Rules, and will be surrendered promptly to the
Trust on and in accordance with its request.
SECTION 6. INDEMNIFICATION
(a) The Trust shall, on behalf of the applicable Portfolio, indemnify and
hold Forum harmless against any losses, claims, damages, liabilities or expenses
(including reasonable counsel fees and expenses) resulting from:
(i) any claim, demand, action or suit brought by any person other than
the Trust, including by an interestholder, which names Forum and/or the
Trust as a party and is not based on and does not result from Forum's
willful misfeasance, bad faith or negligence or reckless disregard of
duties, and arises out of or in connection with Forum's performance
hereunder; or
(ii) any claim, demand, action or suit (except to the extent contributed
to by Forum's willful misfeasance, bad faith or negligence or reckless
disregard of duties) which results
<PAGE>
from the negligence of the Trust, or from Forum's acting upon any
instruction(s) reasonably believed by it to have been executed or
communicated by any person duly authorized by the Trust, or as a result of
Forum's acting in reliance upon advice reasonably believed by Forum to have
been given by counsel for the Trust, or as a result of Forum's acting in
reliance upon any instrument reasonably believed by it to have been genuine
and signed, countersigned or executed by the proper person.
(b) Forum shall indemnify and hold the Trust harmless against any
losses, claims, damages, liabilities or expenses (including reasonable counsel
fees and expenses) resulting from any claim, demand, action or suit brought by
any person other than Forum, which names the Trust and/or Forum as a party and
is based upon and arises out of Forum's willful misfeasance, bad faith or
negligence or reckless disregard of duties in connection with its performance
hereunder.
(c) In the event that either party requests the other to indemnify or
hold it harmless hereunder, the party requesting indemnification (the
Indemnified Party) shall inform the other party (the Indemnifying Party) of the
relevant facts known to Indemnified Party concerning the matter in question.
The Indemnified Party shall use reasonable care to identify and promptly to
notify the Indemnifying Party concerning any matter which presents, or appears
likely to present, a claim for indemnification. The Indemnifying Party shall
have the election of defending the Indemnified Party against any claim which may
be the subject of indemnification or of holding the Indemnified Party harmless
hereunder. In the event the Indemnifying Party so elects, it will so notify the
Indemnified Party and thereupon the Indemnifying Party shall take over defense
of the claim and, if so requested by the Indemnifying Party, the Indemnified
Party shall incur no further legal or other expenses related thereto for which
it shall be entitled to indemnity or to being held harmless hereunder; provided,
however, that nothing herein shall prevent the Indemnified Party from retaining
counsel at its own expense to defend any claim. Except with the Indemnifying
Party's prior written consent, the Indemnified Party shall in no event confess
any claim or make any compromise in any matter in which the Indemnifying Party
will be asked to indemnify or hold Indemnified Party harmless hereunder.
SECTION 7. STANDARD OF CARE; LIMITATION OF LIABILITY
(a) Forum shall not be liable for any action taken or not taken in good
faith and reasonably believed by Forum to be within the powers conferred upon it
under this Agreement; provided that nothing herein shall be deemed to protect,
or purport to protect, Forum against any liability to the Trust or to the
interestholders of the Trust to which it would otherwise be subject by reason of
willful misfeasance, bad faith or negligence in the performance of its duties
hereunder or by reason of Forum's reckless disregard of its obligations and
duties hereunder.
(b) In the event of equipment failures beyond Forum's control, Forum
shall, at no additional expense to the Trust, take reasonable steps to minimize
service interruptions, but shall have no liability with respect thereto. Forum
shall enter into and shall maintain in effect with appropriate parties one or
more agreements making reasonable provision for emergency use of electronic data
processing equipment to the extent appropriate equipment is available or shall
maintain a secondary site with processing capability.
<PAGE>
(c) Subject to Section 7(b), Forum shall not be liable for delays or
errors occurring by reason of circumstances beyond its control, including but
not limited to acts of civil or military authority, national emergencies, work
stoppages, fire, flood, catastrophe, acts of God, insurrection, war, riot, or
failure of communication equipment of common carriers or power supply.
SECTION 8. COVENANTS OF THE TRUST AND FORUM
(a) The Trust, on behalf of Portfolio, promptly shall furnish to Forum
the following:
(i) A certified copy of the resolution of the Trustees of the Trust
authorizing the appointment of Forum and the execution and delivery of this
Agreement.
(ii) A copy of the Trust Instrument of the Trust and all amendments
thereto.
(b) Forum hereby agrees to establish and maintain facilities and
procedures reasonably acceptable to the Trust for safekeeping of stock
certificates, check forms and facsimile signature imprinting devices, if any;
and for the preparation or use, and for keeping account of, such certificates,
forms and devices.
(c) Forum and the Trust agree that all books, records, information and
data pertaining to the business of the other party which are exchanged or
received pursuant to the negotiation or the carrying out of this Agreement shall
remain confidential, and shall not be voluntarily disclosed to any other person,
except as may be required by law.
(d) In case of any requests or demands for the inspection of the
interestholder records of the Trust, Forum will endeavor to notify the Trust and
to secure instructions from an authorized officer of the Trust as to such
inspection. Forum reserves the right, however, to exhibit the interestholder
records to any person whenever it is advised by its counsel that it may be held
liable for the failure to exhibit the interestholder records to such person.
SECTION 9. EFFECTIVENESS, DURATION AND TERMINATION
(a) This Agreement shall become effective with respect to each Portfolio
on the date hereof and with respect to each future portfolio of the Trust on the
date this Agreement or Appendix A hereto is amended. Upon effectiveness of this
Agreement, it shall supersede all previous agreements between the parties hereto
covering the subject matter hereof insofar as such Agreement may have been
deemed to relate to the Portfolios.
(b) This Agreement shall continue in effect with respect to a Portfolio
for a period of one year from its effectiveness and shall continue in effect for
successive twelve-month periods; provided, however, that continuance is
specifically approved at least annually (i) by the Board or by a vote of a
majority of the outstanding voting interests of the Portfolio and (ii) by a vote
of a majority of Trustees of the Trust who are not parties to this agreement or
interested persons of any such party (other than as Trustees of the Trust);
provided further, however, that if the
<PAGE>
continuation of this agreement is not approved as to a Portfolio, Forum may
continue to render to the Portfolio the services described herein in the manner
and to the extent permitted by the Act and the rules and regulations thereunder.
(c) This Agreement may be terminated with respect to a Portfolio at any
time, without the payment of any penalty, (i) by the Board on 60 days' written
notice to Forum or (ii) by Forum on 60 days' written notice to the Trust.
SECTION 10. ASSIGNMENT; DELEGATION
(a) This Agreement shall extend to and shall bind the parties hereto and
their respective successors and assigns; provided, however, that this Agreement
shall not be assignable by the Trust without the written consent of Forum or by
Forum without the written consent of the Trust, authorized or approved by a
resolution of the Board. Notwithstanding the foregoing, either party may assign
this Agreement without the consent of the other party so long as the assignee is
an affiliate, parent or subsidiary of the assigning party and is qualified to
act under applicable law.
(b) Forum may contract with other qualified service providers to perform
any of the services contemplated by this Agreement; provided, that Forum shall
not thereby be relieved of any of its obligations hereunder. Forum may
subcontract any or all of its functions to one or more qualified sub-transfer
agents or processing agents. Forum may pay those agents for their service, but
not such payment will increase Forum's compensation from the Trust.
SECTION 11. NOTICES
Any notice or other communication required by or permitted to be given in
connection with this Agreement shall be in writing, and shall be delivered in
person, sent by first-class mail, postage prepaid, or sent by overnight
delivery, postage prepaid, to the respective parties at the following addresses
or such other address as the parties may designate in writing by the same
methods:
If to the Trust:
Core Trust (Delaware)
Two Portland Square
Portland, Maine 04101
Attn: Secretary
If to Forum:
Forum Financial Corp.
Two Portland Square
Portland, Maine 04101
Attn: Forum
<PAGE>
SECTION 12. LIMITATION OF LIABILITY OF THE TRUSTEES AND INTERESTHOLDERS
The Trustees of the Trust and the interestholders of the Portfolios shall
not be liable for any obligations of the Trust or of the Portfolios under this
Agreement, and Forum agrees that, in asserting any rights or claims under this
Agreement, it shall look only to the assets and property of the Trust or the
Portfolio to which Forum's rights or claims relate in settlement of such rights
or claims, and not to the Trustees of the Trust or the interestholders of the
Portfolios.
SECTION 13. MISCELLANEOUS
(a) No provisions of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by both
parties hereto.
(b) If any part, term or provision of this Agreement is held to be
illegal, in conflict with any law or otherwise invalid, the remaining portion or
portions shall be considered severable and not be affected, and the rights and
obligations of the parties shall be construed and enforced as if the Agreement
did not contain the particular part, term or provision held to be illegal or
invalid.
(c) This Agreement may be executed by the parties hereto on any number
of counterparts, and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
(d) Section headings in this Agreement are included for convenience only
and are not to be used to construe or interpret this Agreement.
(e) This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the State of Delaware.
(f) Neither party to this Agreement shall be liable to the other party
for consequential damages under any provision of this Agreement or for any
consequential damages arising out of any act or failure to act hereunder.
(g) The terms "vote of a majority of the outstanding voting interests,"
"interested person," "affiliated person" and "assignment" shall have the
meanings ascribed thereto in the Act to the terms "vote of a majority of the
outstanding voting securities," "interested person," "affiliated person" and
"assignment," respectively.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
CORE TRUST (DELAWARE)
------------------------------
John Y. Keffer
President
FORUM FINANCIAL CORP.
------------------------------
David R. Keffer
Vice President
<PAGE>
CORE TRUST (DELAWARE)
FUND ACCOUNTING AGREEMENT
APPENDIX A
PORTFOLIOS
International Portfolio
International Portfolio II
Small Company Portfolio
Index Portfolio
<PAGE>
CORE TRUST (DELAWARE)
FUND ACCOUNTING AGREEMENT
APPENDIX B
SERVICES
A. Forum shall prepare and maintain, on behalf of the Trust, the following
books and records of each Portfolio pursuant to Rule 31a-1 under the Act (the
"Rule"):
(i) Journals containing an itemized daily record in detail of all
purchases and sales of securities, all receipts and disbursements of cash
and all other debits and credits, as required by sub-section (b)(1) of the
Rule;
(ii) Journals and auxiliary ledgers reflecting all asset, liability,
reserve, capital, income and expense accounts, as required by subsection
(b)(2) of the Rule;
(iii) A record of each brokerage order given by or on behalf of the Trust
for, or in connection with, the purchase or sale of securities, and all
other portfolio purchases or sales, as required by sub-sections (b)(5) and
(b)(6) of the Rule;
(iv) A record of all options, if any, in which the Trust has any direct
or indirect interest or which the Trust has granted or guaranteed and a
record of any contractual commitments to purchase, sell, receive or deliver
any property as required by subsection (b)(7) of the Rule;
(v) A monthly trial balance of all ledger accounts (except shareholder
accounts) as required by sub-section (b)(8) of the Rule; and
(vi) Other records required by the Rule or any successor rule or pursuant
to interpretations thereof to be kept by open-end management investment
companies, but limited to these provisions of the Rule applicable to
portfolio and interestholder transactions and as agreed upon between the
parties hereto.
B. Forum shall perform the following accounting services:
(i) Calculate the net asset value of each Portfolio and each
interestholder thereof with the frequency prescribed in each Portfolio's
then-current Prospectus;
(ii) Calculate and track each item of income, gain, loss, deduction and
credit, if any, and apply such items to each interestholder as required by
applicable accounting rules;
(iii) Maintain such accounts and perform such allocations as is required
by each Portfolio's Capital Account Establishment and Maintenance Policies;
<PAGE>
(iv) Calculate the yield, effective yield, tax equivalent yield and total
return for each Portfolio, as applicable, and such other measure of
performance as may be agreed upon between the parties hereto;
(v) Provide the Trust and such other persons as the Trust's
administrator may direct with the following reports: (a) a current security
position report, (b) a summary report of transactions and pending
maturities (including the principal, cost, and accrued interest on each
portfolio security in maturity date order), and (c) a current cash position
and projection report;
(vi) Prepare and record, as of each time when the net asset value of a
Portfolio is calculated or as otherwise directed by the Trust's
administrator, either: (a) a valuation of the assets in the Portfolio
(based upon the use of outside services normally used and contracted for
this purpose by Forum in the case of securities for which information and
market price or yield quotations are readily available and based upon
evaluations conducted in accordance with the Trust's or the Trust's
administrator's instructions in the case of all other assets) or (b) a
calculation confirming that the market value of the Portfolio's assets does
not deviate from the amortized cost value of those assets by more than a
specified percentage agreed to from time to time by Forum and the Trust;
(vii) Obtain necessary information from the Trust and the Trust's
administrator in order to prepare, and prepare, the Trust's Form N-SAR;
(viii) Assist in the preparation of support schedules necessary for the
completion of Federal and State income tax returns of the Portfolios;
(ix) Monitor each Portfolio's status as if it were a regulated investment
company under Subchapter M of the Internal Revenue Code of 1986, as
amended;
(x) Assist the Trust's independent accountants and, upon approval of the
Trust or the Trust's administrator, any regulatory body in any requested
review of the Trust's books and records maintained by Forum;
(xi) Prepare semi-annual financial statements of each Portfolio; and
(xii) Prepare other periodic reports to shareholders and the Securities
and Exchange Commission and such other reports as may be agreed to from
time to time and provide information typically supplied in the investment
company industry to companies that track or report the price, performance
or other information with respect to investment companies.
<PAGE>
CORE TRUST (DELAWARE)
FUND ACCOUNTING AGREEMENT
APPENDIX C
COMPENSATION
TRANSFER AGENCY SERVICES
For its transfer agency services, Forum shall receive a fee of $12,000 per year
with respect to each Portfolio, such amounts to be computed and paid monthly in
advance by the Trust.
FUND ACCOUNTING SERVICES
For its fund accounting services, Forum shall receive fees calculated as
follows:
Standard Fee per Portfolio with one investor $36,000/year
Plus additional surcharges for each of:
(1) International or Global funds $24,000/year
(2) Tax Free Money Market Portfolios $12,000/year
(3) Portfolios with more than 25% of net assets
invested in asset backed securities $12,000/year
(4) Portfolios with more than 50% of net assets
invested in asset backed securities $12,000/year
(5) Portfolios with more than 100 security positions:
For each 100 positions above 100 $12,000/year
(6) Portfolios with a monthly portfolio turnover
rate of 10% or greater $12,000/year
(7) Portfolios with asset levels exceeding:
$100 million $6,000/year
$250 million $6,000/year
$500 million $6,000/year
$1 billion $6,000/year
(8) Portfolios holding futures, options or forward
currency contracts $12,000/year
(9) Portfolios (other than those subject to
(1) above) with more than 30 international
positions $12,000/year
International Portfolio II, Small Company Portfolio and Index Portfolio are not
subject to items (7), (8) and (9). All fees are to be paid and computed monthly
in arrears by the Trust and are determined based upon the total assets or
security positions as of the end of the prior month and on the portfolio
turnover rate for the prior month. Portfolio turnover rate shall have the
meaning ascribed thereto in Securities and Exchange Commission Form N-1A.
GENERAL
The rates set forth above shall remain fixed through December 31, 1995. On
January 1, 1996, and on each successive January 1, the rates shall be adjusted
to reflect changes in the Consumer Price Index for the preceding calendar year,
as published by the U.S. Department of Labor, Bureau of Labor Statistics.
<PAGE>
EXHIBIT (9)(c)
<PAGE>
EXHIBIT (9)(c)
CORE TRUST (DELAWARE)
PLACEMENT AGENT AGREEMENT
AGREEMENT made this 9th day of November, 1994, between Core Trust
(Delaware) (the "Trust"), a business trust organized under the laws of the State
of Delaware with its principal place of business at Two Portland Square,
Portland, Maine 04101, and Forum Financial Services, Inc. ("Forum"), a
corporation organized under the laws of State of Delaware with its principal
place of business at 61 Broadway, New York, New York 10006.
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended, (the "Act") as an open-end management investment company and is
authorized to issue interests (as defined in the Trust's Trust Instrument) in
separate series; and
WHEREAS, the Trust desires that Forum perform placement agent services for
each of the portfolios of the Trust as listed in Appendix A hereto (each a
"Portfolio," and collectively the "Portfolios") and Forum is willing to provide
those services on the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
SECTION 1. SERVICES AS PLACEMENT AGENT
(a) Forum will act as Placement Agent of the Interests covered by the
Trust's registration statement then in effect under the 1940 Act. As Placement
Agent, Forum shall have the right to sell Interests of the Portfolios upon the
terms set forth in the Trust's registration statement, as such registration
statement is amended and in effect from time to time. In acting as Placement
Agent under the Placement Agency Agreement, neither Forum nor its employees nor
any agents thereof shall make any offer or sale of Interests in a manner which
would require the Interests to be registered under the Securities Act of 1933,
as amended (the "1933 Act"). As used in this Agreement the term "registration
statement" shall mean any registration statement filed with the Securities and
Exchange Commission (the "Commission") as modified by any amendments thereto
that at any time shall have been filed with the Commission by or on behalf of
the Trust.
(b) All activities by Forum and its agents and employees as Placement
Agent of Interests shall comply with all applicable laws, rules and regulations,
including without limitation, all rules and regulations adopted pursuant to the
1940 Act by the Commission.
(c) Nothing herein shall be construed to require the Trust to accept any
offer to purchase any Interests, all of which shall be subject to approval by
the Trust's Board of Trustees.
<PAGE>
(d) The Trust shall furnish from time to time for use in connection with
the sale of Interests such information with respect to the Trust and Interests
as Forum may reasonably request. The Trust shall also furnish Forum upon
request with: (a) audited annual and unaudited semiannual statements of the
Trust's books and accounts prepared by the Trust, and (b) from time to time such
additional information regarding the Trust's financial or regulatory condition
as Forum may reasonably request.
(e) The Trust represents to Forum that all registration statements filed
by the Trust with the Commission under the 1940 Act with respect to Interests
have been prepared in conformity with the requirements of such statute and rules
and regulations of the Commission thereunder. The Trust represents and warrants
to Forum that any registration statement will contain all statements required to
be stated herein in conformity with both such statute and the rules and
regulations of the Commission; that all statements of fact contained in any
registration statement will be true and correct in all material respects at the
time of filing of such registration statements or amendments thereto; and that
no registration statement will include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading to a purchaser of Interests. The Trust
may but shall not be obligated to, propose from time to time such amendment to
any registration statement as in the light of future developments may, in the
opinion of the Trust's counsel, be necessary or advisable. If the Trust shall
not propose such amendment and/or supplement within fifteen days after receipt
by the Trust of a written request from Forum to do so, Forum may, at its option,
terminate this Agreement. The Trust shall not file any amendment to any
registration statement without giving Forum reasonable notice thereof in
advance; provided, however, that nothing contained in this Agreement shall in
any way limit the Trust's right to file at any time such amendment to any
registration statement as the Trust may deem advisable, such right being in all
respects absolute and unconditional.
(f) The Trust agrees to indemnify, defend and hold Forum, its several
officers and directors, and any person who controls Forum within the meaning of
Section 15 of the 1933 Act or Section 20 of the Securities Exchange Act of 1934
(the "1934 Act") (for purposes of this Section 1(f), collectively, "Covered
Persons") free and harmless from and against any and all claims, demands,
liabilities and any counsel fees incurred in connection therewith) which any
Covered Person may incur under the 1933 Act, the 1934 Act, common law or
otherwise, arising out of or based on any untrue statement of a material fact
contained in any registration statement, private placement memorandum or other
offering material ("Offering Material") or arising out of or based on any
omission to state a material fact required to be stated in any Offering Material
or necessary to make the statements in any Offering Material not misleading,
provided, however, that the Trust's agreement to indemnify Covered Persons shall
not be deemed to cover any claims, demands, liabilities or expenses arising out
of any financial and other statements as are furnished in writing to the Trust
by Forum in its capacity as Placement Agent for use in the answers to any items
of any registration statement or in any statements made in any Offering
Material, or arising out of or based on any omission or alleged omission to
state a material fact in connection with the giving of such information required
to be stated in such answers or necessary to make the answers not misleading;
and further provided that the Trust's agreement to Section 1(e) shall not be
deemed to cover any liability to the Trust or its investors to which a Covered
Person would otherwise be subject by reason or willful misfeasance, bad faith or
gross negligence in the performance of its duties, or by
<PAGE>
reason of a Covered Person's reckless disregard of its obligations and duties
under this Agreement. The Trust shall be notified of any action brought against
a Covered Person, such notification to be given by letter or by telegram
addressed to the Secretary of the Trust, promptly after the summons or other
first legal process shall have been duly and completely served upon such Covered
Person. The failure to notify the Trust of any such action shall not relieve
the Trust from any liability except to the extent that the Trust shall have been
prejudiced by such failure, or from any liability that the Trust may have to the
Covered Person against whom such action is brought by reason of any such untrue
statement or omission, otherwise than on account of the Trust's indemnity
agreement contained in this Section 1(f). The Trust will be entitled to assume
the defense of any suit brought to enforce any such claim, demand or liability,
but in such case such defense shall be conducted by counsel chosen by the Trust
and approved by Forum, the defendant or defendants in such suit shall bear the
fees and expenses of any additional counsel retained by any of them; but in case
the Trust does not elect to assume the defense of any such suit, or in case
Forum reasonably does not approve of counsel chosen by the Trust, the Trust will
reimburse the Covered Person named as defendant in such suit, for the fees and
expenses of any counsel retained by Forum or such Covered Person. The Trust's
indemnification agreement contained in this Section (f) and the Trust's
representations and warranties in this Agreement shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
Covered Persons, and shall survive the delivery of any Interests. This
agreement of indemnity will inure exclusively to Covered Persons and their
successors. The Trust agrees to notify Forum promptly of the commencement of
any litigation or proceedings against the Trust or any of its officers or
Trustees in connection with the issue and sale of any Interests.
(g) Forum agrees to indemnify, defend and hold the Trust, its several
officers and trustees, and any person who controls the Trust within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act (for purposes of
this Section 1(g) collectively, "Covered Persons") free and harmless from and
against any and all claims, demands, liabilities and expenses (including the
costs of investigating or defending such claims, demands, liabilities and any
counsel fees incurred in connection therewith) that Covered Persons may incur
under the 1933 Act, the 1934 Act, or common law or otherwise, but only to the
extent that such liability or expense incurred by a Covered Person resulting
from such claims or demands shall arise out of or be based on any untrue
statement of a material fact contained in information furnished in writing by
Forum in its capacity as Placement Agent to the Trust for use in the answers to
any of the items of any registration statement or in any statements in any
Offering Material or shall arise out of or be based on any omission to state a
material fact in connection with such information furnished in writing by Forum
to the Trust required to be stated in such answers or necessary to make such
information not misleading. Forum shall be notified of any action brought
against a Covered Person, such notification to be given by letter or telegram
addressed to Forum, Attention: Legal Department, promptly after the summons or
other first legal process shall have been duly and completely served upon such
Covered Person. Forum shall have the right of first control of the defense of
the action with counsel of its own choosing satisfactory to the Trust if such
action is based solely on such alleged misstatement or omission on Forum's part,
and in any other event each Covered Person shall have the right to participate
in the defense or preparation of the defense of any such action. The failure to
so notify Forum of any such action shall not relieve Forum from any liability
except to the extent that Forum shall have been prejudiced by such failure, or
from any liability that Forum
<PAGE>
may have to Covered Persons by reason of any such untrue or alleged untrue
statement, or omission or alleged omission, otherwise than on account of Forum's
indemnity agreement contained in this Section 1(g).
(h) No Interests shall be offered by either Forum or the Trust under any
of the provisions of this Agreement and no orders for the purchase or sale of
Interests hereunder shall be accepted by the Trust if and so long as the
effectiveness of the registration statement or any necessary amendments thereto
shall be suspended under any of the provisions of the 1940 Act; provided,
however, that nothing contained in this Section 1(h) shall in any way restrict
or have an application to or bearing on the Trust's obligation to redeem
Interests from any investor in accordance with the provisions of the Trust's
registration statement or Trust Instrument, as amended from time to time.
(i) The Trust agrees to advise Forum as soon as reasonably practical by a
notice in writing delivered to Forum or its counsel:
(i) of any request by the Commission for amendment to the registration
statement then in effect or for additional information;
(ii) in the event of the issuance by the Commission of any stop order
suspending the effectiveness of the registration statement then in effect
or the initiation by service of process on the Trust of any proceeding for
that purpose;
(iii) of the happening of any event that makes untrue any statement of a
material fact made in the registration statement then in effect or that
requires the making of a change in such registration statement in order to
make the statements therein not misleading; and
(iv) of all action of the Commission with respect to any amendment to any
registration statement that may from time to time be filed with the
Commission.
For purposes of this Section 1(i), informal requests by or acts of the
Staff of the Commission shall not be deemed actions or requests by the
Commission.
(j) Forum agrees on behalf of itself and its employees to treat
confidentially and as proprietary information of the Trust all records and other
information not otherwise publicly available relative to the Trust and its
prior, present or potential investors and not to 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 Trust, which approval shall not be unreasonably withheld and may not be
withheld where Forum 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 Trust.
(k) In addition to Forum's duties as Placement Agent, the Trust
understands that Forum may, in its discretion, perform additional functions in
connection with transactions in Interests.
<PAGE>
(l) Forum shall receive no fee for its services hereunder.
(m) The processing of Interest transactions may include, but is not
limited to, compilation of all transactions; creation of a transaction tape and
timely delivery of it to the Trust's transfer agent for processing;
reconciliation of all transactions delivered to the Trust's transfer agent; and
the recording and reporting of these transactions executed by the Trust's
transfer agent in customer statements; and rendering of periodic customer
statements.
(n) Forum may also provide other investor services, such as communicating
with Trust investors and other functions in administering customer accounts for
Trust investors.
(o) Nothing herein is intended, nor shall be construed, as requiring Forum
to perform any of the foregoing functions.
SECTION 2. EFFECTIVENESS, DURATION AND TERMINATION
(a) This Agreement shall become effective with respect to each Portfolio
on the date hereof and with respect to each future portfolio of the Trust on the
date this Agreement or Appendix A hereto is amended. Upon effectiveness of this
Agreement, it shall supersede all previous agreements between the parties hereto
covering the subject matter hereof insofar as such Agreement may have been
deemed to relate to the Portfolios.
(b) This Agreement shall continue in effect with respect to a Portfolio
for a period of one year from its effectiveness and shall continue in effect for
successive twelve-month periods; provided, however, that continuance is
specifically approved at least annually (i) by the Board or by a vote of a
majority of the outstanding voting interests of the Portfolio and (ii) by a vote
of a majority of Trustees of the Trust who are not parties to this agreement or
interested persons of any such party (other than as Trustees of the Trust);
provided further, however, that if the continuation of this agreement is not
approved as to a Portfolio, Forum may continue to render to the Portfolio the
services described herein in the manner and to the extent permitted by the Act
and the rules and regulations thereunder.
(c) This Agreement may be terminated with respect to a Portfolio at any
time, without the payment of any penalty, (i) by the Board on 60 days' written
notice to Forum or (ii) by Forum on 60 days' written notice to the Trust. This
agreement shall terminate upon assignment.
SECTION 3. REPRESENTATIONS AND WARRANTIES
Forum and the Trust each hereby represents and warrants to the other that
it has all requisite authority to enter into, execute, deliver and perform its
obligations under this Agreement and that, with respect to it, this Agreement is
legal, valid and binding, and enforceable in accordance with its terms.
SECTION 4. ACTIVITIES OF FORUM
<PAGE>
Except to the extent necessary to perform Forum's obligations hereunder,
nothing herein shall be deemed to limit or restrict Forum's right, or the right
of any of Forum's officers, directors or employees who may also be a trustee,
officer or employee of the Trust, or persons otherwise affiliated persons of the
Trust to engage in any other business or to devote time and attention to the
management or other aspects of any other business, whether of a similar or
dissimilar nature, or to render services of any kind to any other corporation,
trust, firm, individual or association.
SECTION 5. LIMITATION OF INTEREST HOLDER AND TRUSTEE LIABILITY
The Trustees of the Trust and the interestholders of each Portfolio shall
not be liable for any obligations of the Trust or of the Portfolios under this
Agreement, and Forum agrees that, in asserting any rights or claims under this
Agreement, it shall look only to the assets and property of the Trust or the
Portfolio to which Forum's rights or claims relate in settlement of such rights
or claims, and not to the Trustees of the Trust or the interestholders of the
Portfolios.
SECTION 6. MISCELLANEOUS
(a) No provisions of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by both
parties hereto.
(b) If any part, term or provision of this Agreement is held to be
illegal, in conflict with any law or otherwise invalid, the remaining portion or
portions shall be considered severable and not be affected, and the rights and
obligations of the parties shall be construed and enforced as if the Agreement
did not contain the particular part, term or provision held to be illegal or
invalid.
(c) This Agreement may be executed by the parties hereto on any number of
counterparts, and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
(d) Section headings in this Agreement are included for convenience only
and are not to be used to construe or interpret this Agreement.
(e) This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the State of New York.
(f) Neither party to this Agreement shall be liable to the other party for
consequential damages under any provision of this Agreement or for any
consequential damages arising out of any act or failure to act hereunder.
(g) The terms "vote of a majority of the outstanding voting interests,"
"interested person," "affiliated person" and "assignment" shall have the
meanings ascribed thereto in the Act to the terms "vote of a majority of the
outstanding voting securities," "interested person," "affiliated person" and
"assignment," respectively.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
CORE TRUST (DELAWARE)
__________________________
John Y. Keffer
President
FORUM FINANCIAL SERVICES, INC.
________________________
David R. Keffer
Vice President
<PAGE>
CORE TRUST (DELAWARE)
PLACEMENT AGENT AGREEMENT
APPENDIX A
International Portfolio
International Portfolio II
Small Company Portfolio
Index Portfolio
<PAGE>
EXHIBIT (9)(d)
<PAGE>
EXHIBIT (9)(d)
CORE TRUST (DELAWARE)
ADMINISTRATION AGREEMENT
AGREEMENT made this 1st day of September, 1995, between Core Trust
(Delaware) (the "Trust"), a business trust organized under the laws of the State
of Delaware with its principal place of business at Two Portland Square,
Portland, Maine 04101, and Forum Financial Services, Inc. ("Forum"), a
corporation organized under the laws of State of Delaware with its principal
place of business at 61 Broadway, New York, New York 10006.
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended, (the "Act") as an open-end management investment company and is
authorized to issue interests (as defined in the Trust's Trust Instrument) in
separate series; and
WHEREAS, the Trust desires that Forum perform administrative services for
each of the portfolios of the Trust as listed in Appendix A hereto (each a
"Portfolio," and collectively the "Portfolios") and Forum is willing to provide
those services on the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
SECTION 1. THE TRUST; DELIVERY OF DOCUMENTS
The Trust is engaged in the business of investing and reinvesting its
assets in securities of the type and in accordance with the limitations
specified in its Trust Instrument and Registration Statement filed with the
Securities and Exchange Commission (the "Commission") under the Act, as may be
supplemented from time to time, all in such manner and to such extent as may
from time to time be authorized by the Trust's Board of Trustees (the "Board").
The Trust is currently authorized to issue eight series of interests and the
Board is authorized to issue interests in any number of additional series. The
Trust has delivered to Forum copies of the Trust's Trust Instrument and
Registration Statement and will from time to time furnish Forum with any
amendments thereof.
SECTION 2. APPOINTMENT
The Trust hereby employs Forum, subject to the direction and control of the
Board, to manage all aspects of the Trust's operations with respect to each
Portfolio except those which are the responsibility of Linden Asset Management,
Inc. or Forum Advisors, Inc. (the "Advisers"), the Portfolios' investment
advisers.
<PAGE>
SECTION 3. ADMINISTRATIVE DUTIES
(a) With respect to the Trust or each Portfolio, as applicable, Forum
shall:
(i) oversee (A) the preparation and maintenance by the Advisers and the
Trust's custodian, transfer agent and fund accountant (or if appropriate,
prepare and maintain) in such form, for such periods and in such locations
as may be required by applicable law, of all documents and records relating
to the operation of the Trust required to be prepared or maintained by the
Trust or its agents pursuant to applicable law; (B) the reconciliation of
account information and balances among the Advisers and the Trust's
custodian, transfer agent and fund accountant; (C) the transmission of
purchase and redemption orders for interests in the Portfolios; (D) the
notification to the Advisers of available funds for investment; and (E) the
performance of fund accounting, including the calculation of the net asset
value of the Trust's interests;
(ii) oversee the performance of administrative and professional services
rendered to the Trust by others, including its custodian, transfer agent
and fund accountant as well as legal, auditing and interestholder servicing
and other services performed for the Portfolios;
(iii) be responsible for the preparation and the printing of the periodic
updating of the Registration Statement, tax returns, and reports to
interestholders and the Commission;
(iv) be responsible for the preparation of proxy and information
statements and any other communications to interestholders;
(v) at the request of the Board, provide the Trust with adequate general
office space and facilities and provide persons suitable to the Board to
serve as officers of the Trust;
(vi) provide the Trust, at the Trust's expense, with the services of
persons, who may be officers of the Trust, competent to perform such
supervisory, administrative and clerical functions as are necessary to
provide effective operations of the Trust;
(vii) prepare, file and maintain the Trust's governing documents,
including the Trust Instrument and minutes of meetings of Trustees and
interestholders;
(viii) with the advice of the Trust's counsel and cooperation from the
Advisers and other relevant parties, prepare and disseminate materials for
meetings of the Board;
(ix) oversee the calculation of performance data for dissemination to
information services covering the investment company industry, for sales
literature of the Trust or its interestholders and other appropriate
purposes;
(x) oversee the determination of the amount of and supervise
distributions to interestholders as necessary to, among other things,
maintain the qualification of each
<PAGE>
interestholder that may be a regulated investment company under the
Internal Revenue Code of 1986, as amended; and
(xi) advise the Trust and the Board on matters concerning the Trust and
its affairs.
(b) The books and records pertaining to the Trust which are in possession
of Forum shall be the property of the Trust. The Trust, or the Trust's
authorized representatives, shall have access to such books and records at all
times during Forum's normal business hours. Upon the reasonable request of the
Trust, copies of any such books and records shall be provided promptly by Forum
to the Trust or the Trust's authorized representatives. In the event the Trust
designates a successor to any of Forum's obligations hereunder, Forum shall, at
the expense and direction of the Trust, transfer to such successor all relevant
books, records and other data established or maintained by Forum under this
Agreement.
SECTION 4. STANDARD OF CARE
The Trust shall expect of Forum, and Forum will give the Trust the benefit
of, Forum's best judgment and efforts in rendering these services to the Trust,
and the Trust agrees as an inducement to Forum's undertaking these services that
Forum shall not be liable hereunder for any mistake of judgment or in any event
whatsoever, except for lack of good faith, provided that nothing herein shall be
deemed to protect, or purport to protect, Forum against any liability to the
Trust or to its interestholders to which Forum would otherwise be subject by
reason of willful misfeasance, bad faith or gross negligence in the performance
of Forum's duties hereunder, or by reason of Forum's reckless disregard of its
obligations and duties hereunder. As used in this Section 4, the term "Forum"
shall include any affiliates of Forum performing services for the Portfolios
contemplated hereby and directors, officers and employees of Forum as well as
Forum itself.
SECTION 5. COMPENSATION; EXPENSES
(a) In consideration of the administrative services performed by Forum as
described herein, the Trust will pay Forum, with respect to each Portfolio a fee
at the annual rate as listed in Appendix A hereto. Such fee shall be accrued by
the Trust daily and shall be payable monthly in arrears on the first day of each
calendar month for services performed hereunder during the prior calendar month.
(b) The Trust hereby confirms that the Trust shall be responsible and
shall assume the obligation for payment of all the Trust's expenses, including:
interest charges, taxes, brokerage fees and commissions; certain insurance
premiums; fees, interest charges and expenses of the Trust's custodian and
transfer agent; telecommunications expenses; auditing, legal and compliance
expenses; costs of the Trust's formation and maintaining its existence; costs of
preparing the Trust's registration statement, account application forms and
interestholder reports and delivering them to existing and prospective
interestholders; costs of maintaining books of original entry for portfolio and
fund accounting and other required books and accounts and of calculating the net
asset value of interests in the Trust; costs of reproduction, stationery and
<PAGE>
supplies; compensation of the Trust's trustees, officers and employees and the
costs of other personnel performing services for the Trust who are not officers
of the Advisers or of Forum Financial Services, Inc. or affiliated persons of
either; costs of Trust meetings; registration fees and related expenses for
registration with the Commission and the securities regulatory authorities of
other countries in which the Trust's interests are sold; state securities law
registration fees and related expenses; and fees and out-of-pocket expenses
payable to each investment adviser under any investment advisory or similar
agreement.
SECTION 6. EFFECTIVENESS, DURATION AND TERMINATION
(a) This Agreement shall become effective with respect to each Portfolio
on the date hereof and with respect to each future portfolio of the Trust on the
date this Agreement or Appendix A hereto is amended. Upon effectiveness of this
Agreement, it shall supersede all previous agreements between the parties hereto
covering the subject matter hereof insofar as such Agreement may have been
deemed to relate to the Portfolios.
(b) This Agreement shall continue in effect with respect to a Portfolio
for a period of one year from its effectiveness and shall continue in effect for
successive twelve-month periods; provided, however, that continuance is
specifically approved at least annually (i) by the Board or by a vote of a
majority of the outstanding voting interests of the Portfolio and (ii) by a vote
of a majority of Trustees of the Trust who are not parties to this agreement or
interested persons of any such party (other than as Trustees of the Trust);
provided further, however, that if the continuation of this agreement is not
approved as to a Portfolio, Forum may continue to render to the Portfolio the
services described herein in the manner and to the extent permitted by the Act
and the rules and regulations thereunder.
(c) This Agreement may be terminated with respect to a Portfolio at any
time, without the payment of any penalty, (i) by the Board on 60 days' written
notice to Forum or (ii) by Forum on 60 days' written notice to the Trust. This
agreement shall terminate upon assignment.
SECTION 7. ACTIVITIES OF FORUM
Except to the extent necessary to perform Forum's obligations hereunder,
nothing herein shall be deemed to limit or restrict Forum's right, or the right
of any of Forum's officers, directors or employees who may also be a trustee,
officer or employee of the Trust, or persons otherwise affiliated persons of the
Trust to engage in any other business or to devote time and attention to the
management or other aspects of any other business, whether of a similar or
dissimilar nature, or to render services of any kind to any other corporation,
trust, firm, individual or association.
<PAGE>
SECTION 8. LIMITATION OF INTERESTHOLDER AND TRUSTEE LIABILITY
The Trustees of the Trust and the interestholders of each Portfolio shall
not be liable for any obligations of the Trust or of the Portfolios under this
Agreement, and Forum agrees that, in asserting any rights or claims under this
Agreement, it shall look only to the assets and property of the Trust or the
Portfolio to which Forum's rights or claims relate in settlement of such rights
or claims, and not to the Trustees of the Trust or the interestholders of the
Portfolios.
SECTION 9. MISCELLANEOUS
(a) No provisions of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by both
parties hereto.
(b) If any part, term or provision of this Agreement is held to be
illegal, in conflict with any law or otherwise invalid, the remaining portion or
portions shall be considered severable and not be affected, and the rights and
obligations of the parties shall be construed and enforced as if the Agreement
did not contain the particular part, term or provision held to be illegal or
invalid.
(c) This Agreement may be executed by the parties hereto on any number of
counterparts, and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
(d) Section headings in this Agreement are included for convenience only
and are not to be used to construe or interpret this Agreement.
(e) This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the New York.
(f) The terms "vote of a majority of the outstanding voting interests,"
"interested person," "affiliated person" and "assignment" shall have the
meanings ascribed thereto in the Act to the terms "vote of a majority of the
outstanding voting securities," "interested person," "affiliated person" and
"assignment," respectively.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
CORE TRUST (DELAWARE)
__________________________
John Y. Keffer
President
FORUM FINANCIAL SERVICES, INC.
________________________
David R. Keffer
Vice President
<PAGE>
CORE TRUST (DELAWARE)
ADMINISTRATION AGREEMENT
APPENDIX A
Annual Fee as a % of
the Average Daily
Portfolios of the Trust Net Assets of the Portfolio
- ----------------------- ---------------------------
Treasury Cash Portfolio 0.05%
Government Cash Portfolio 0.05%
Cash Portfolio 0.05%
Treasury Portfolio 0.10%
<PAGE>
EXHIBIT (9)(e)
<PAGE>
EXHIBIT (9)(e)
CORE TRUST (DELAWARE)
FUND ACCOUNTING AGREEMENT
AGREEMENT made this 1st day of September, 1995 and amended this 20th day of
March, 1996 between Core Trust (Delaware) (the "Trust"), a business trust
organized under the laws of the State of Delaware with its principal place of
business at Two Portland Square, Portland, Maine 04101, and Forum Financial
Corp., a corporation organized under the laws of the State of Delaware, having
its principal place of business at Two Portland Square, Portland, Maine 04101
("Forum").
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as an open-end management investment company and is
authorized to issue interests (as defined in the Trust's Trust Instrument) in
separate series; and
WHEREAS, the Trust desires that Forum perform interestholder and fund
accounting services for each of the portfolios of the Trust as listed in
Appendix A hereto (each a "Portfolio," and collectively the "Portfolios") and
Forum is willing to provide those services on the terms and conditions set forth
in this Agreement; and
WHEREAS, the Trust on behalf of each Portfolio desires to appoint Forum as
its fund accountant, and Forum desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
SECTION 1. TERMS OF APPOINTMENT; DUTIES OF FORUM
(a) Subject to the terms and conditions set forth in this Agreement, the
Trust, on behalf of each Portfolio, hereby employs and appoints Forum to act as,
and Forum agrees to act as, its fund accountant for the authorized and issued
interests of the Trust representing interests in each of the respective
Portfolios ("Interests").
(b) Forum shall be responsible for performing as agent, as of the date of
this Agreement, the services described in Appendix B attached hereto and made a
part hereof, as said appendix may be amended from time to time.
(c) Forum shall provide additional services to the Trust on behalf of the
Portfolios which may be agreed upon in writing between the Trust and Forum.
<PAGE>
SECTION 2. FEES AND EXPENSES
(a) For its services hereunder Forum shall receive from the Trust, with
respect to each Portfolio, such fund accounting fees as are listed in Appendix C
attached hereto, as amended from time to time.
(b) Each Portfolio shall reimburse Forum for its ancillary costs (or
appropriate share of the costs) incurred in providing to that Portfolio any fund
accounting services hereunder, including but not limited to (i) any and all
forms and stationery used or specially prepared for the purpose, (ii) postage,
(iii) telephone services, (iv) bank fees, and (v) electronic or facsimile
transmission. Each Portfolio shall reimburse Forum for all expenses and
employee time attributable to any review of the Portfolio's accounts and records
by the Trust's independent public accountants or any regulatory body outside of
routine and normal periodic reviews and for all expenses for services in
connection with Forum's activities in effecting any termination of this
Agreement (except the termination of Forum for cause), including expenses
incurred by Forum to deliver the property of the Portfolio in the possession of
Forum to the Trust or other persons.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF FORUM
Forum represents and warrants to the Trust that:
(a) It is a corporation duly organized and existing and in good standing
under the laws of the State of Delaware.
(b) All requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement.
(c) It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under this
Agreement.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE TRUST
The Trust represents and warrants to Forum that:
(a) It is a business trust duly organized and existing and in good
standing under the laws of the State of Delaware.
(b) It is empowered under applicable laws and by its Trust Instrument to
enter into and perform this Agreement.
(c) All proceedings required by said Trust Instrument have been taken to
authorize it to enter into and perform this Agreement.
(d) It is an investment company registered under the 1940 Act.
<PAGE>
(e) All interests of the Portfolios, when issued, shall be validly issued,
fully paid and non-assessable.
SECTION 5. RECORDKEEPING; INSPECTION OF RECORDS
(a) Forum shall prepare and maintain in such form and in such locations as
may be required by applicable regulation all records and documents relating to
the services provided to the Trust pursuant to this Agreement required to be
prepared and maintained by Forum or the Trust pursuant to the 1940 Act, the
Securities Exchange Act of 1934 and the rules and regulations of the Securities
and Exchange Commission and the Internal Revenue Service.
(b) Forum shall notify the Trust of any request or demand for the
inspection of the Trust's interestholder records. Forum shall abide by the
Trust's instructions for granting or denying the inspection; provided, however,
Forum may grant the inspection without such instructions if it is advised by its
counsel that failure to do so will result in liability to Forum.
(c) Forum shall keep records relating to the services to be performed
hereunder, in the form and manner as it may deem advisable. The Trust, or the
Trust's authorized representatives, shall have access to such books and records
at all times during Forum's normal business hours. Upon the reasonable request
of the Trust, copies of any such books and records shall be provided promptly by
Forum to the Trust or the Trust's authorized representatives. In the event the
Trust designates a successor to any of Forum's obligations hereunder, Forum
shall, at the expense and direction of the Trust, transfer to such successor all
relevant books, records and other data established or maintained by Forum under
this Agreement. To the extent required by Section 31 of the 1940 Act and the
Rules thereunder, Forum agrees that all such records prepared or maintained by
Forum relating to the services to be performed by Forum hereunder are the
property of the Trust and will be preserved, maintained and made available in
accordance with such Section and Rules, and will be surrendered promptly to the
Trust on and in accordance with its request.
SECTION 6. INDEMNIFICATION
(a) The Trust shall, on behalf of the applicable Portfolio, indemnify and
hold Forum harmless against any losses, claims, damages, liabilities or expenses
(including reasonable counsel fees and expenses) resulting from:
(i) any claim, demand, action or suit brought by any person other than
the Trust, including by an interestholder, which names Forum and/or the
Trust as a party and is not based on and does not result from Forum's
willful misfeasance, bad faith or negligence or reckless disregard of
duties, and arises out of or in connection with Forum's performance
hereunder; or
(ii) any claim, demand, action or suit (except to the extent contributed
to by Forum's willful misfeasance, bad faith or negligence or reckless
disregard of duties) which results from the negligence of the Trust, or
from Forum's acting upon any instruction(s) reasonably believed by it to
have been executed or communicated by any person duly authorized by the
<PAGE>
Trust, or as a result of Forum's acting in reliance upon advice reasonably
believed by Forum to have been given by counsel for the Trust, or as a
result of Forum's acting in reliance upon any instrument reasonably
believed by it to have been genuine and signed, countersigned or executed
by the proper person.
(b) Forum shall indemnify and hold the Trust harmless against any losses,
claims, damages, liabilities or expenses (including reasonable counsel fees and
expenses) resulting from any claim, demand, action or suit brought by any person
other than Forum, which names the Trust and/or Forum as a party and is based
upon and arises out of Forum's willful misfeasance, bad faith or negligence or
reckless disregard of duties in connection with its performance hereunder.
(c) In the event that either party requests the other to indemnify or hold
it harmless hereunder, the party requesting indemnification (the Indemnified
Party) shall inform the other party (the Indemnifying Party) of the relevant
facts known to Indemnified Party concerning the matter in question. The
Indemnified Party shall use reasonable care to identify and promptly to notify
the Indemnifying Party concerning any matter which presents, or appears likely
to present, a claim for indemnification. The Indemnifying Party shall have the
election of defending the Indemnified Party against any claim which may be the
subject of indemnification or of holding the Indemnified Party harmless
hereunder. In the event the Indemnifying Party so elects, it will so notify the
Indemnified Party and thereupon the Indemnifying Party shall take over defense
of the claim and, if so requested by the Indemnifying Party, the Indemnified
Party shall incur no further legal or other expenses related thereto for which
it shall be entitled to indemnity or to being held harmless hereunder; provided,
however, that nothing herein shall prevent the Indemnified Party from retaining
counsel at its own expense to defend any claim. Except with the Indemnifying
Party's prior written consent, the Indemnified Party shall in no event confess
any claim or make any compromise in any matter in which the Indemnifying Party
will be asked to indemnify or hold Indemnified Party harmless hereunder.
SECTION 7. STANDARD OF CARE; LIMITATION OF LIABILITY
(a) Forum shall not be liable for any action taken or not taken in good
faith and reasonably believed by Forum to be within the powers conferred upon it
under this Agreement; provided that nothing herein shall be deemed to protect,
or purport to protect, Forum against any liability to the Trust or to the
interestholders of the Trust to which it would otherwise be subject by reason of
willful misfeasance, bad faith or negligence in the performance of its duties
hereunder or by reason of Forum's reckless disregard of its obligations and
duties hereunder.
(b) In the event of equipment failures beyond Forum's control, Forum
shall, at no additional expense to the Trust, take reasonable steps to minimize
service interruptions, but shall have no liability with respect thereto. Forum
shall enter into and shall maintain in effect with appropriate parties one or
more agreements making reasonable provision for emergency use of electronic data
processing equipment to the extent appropriate equipment is available or shall
maintain a secondary site with processing capability.
<PAGE>
(c) Subject to Section 7(b), Forum shall not be liable for delays or
errors occurring by reason of circumstances beyond its control, including but
not limited to acts of civil or military authority, national emergencies, work
stoppages, fire, flood, catastrophe, acts of God, insurrection, war, riot, or
failure of communication equipment of common carriers or power supply.
SECTION 8. COVENANTS OF THE TRUST AND FORUM
(a) The Trust, on behalf of the Portfolios, promptly shall furnish to
Forum the following:
(i) A certified copy of the resolution of the Trustees of the Trust
authorizing the appointment of Forum and the execution and delivery of this
Agreement.
(ii) A copy of the Trust Instrument of the Trust and all amendments
thereto.
(b) Forum hereby agrees to establish and maintain facilities and
procedures reasonably acceptable to the Trust for safekeeping of stock
certificates, check forms and facsimile signature imprinting devices, if any;
and for the preparation or use, and for keeping account of, such certificates,
forms and devices.
(c) Forum and the Trust agree that all books, records, information and
data pertaining to the business of the other party which are exchanged or
received pursuant to the negotiation or the carrying out of this Agreement shall
remain confidential, and shall not be voluntarily disclosed to any other person,
except as may be required by law.
(d) In case of any requests or demands for the inspection of the
interestholder records of the Trust, Forum will endeavor to notify the Trust and
to secure instructions from an authorized officer of the Trust as to such
inspection. Forum reserves the right, however, to exhibit the interestholder
records to any person whenever it is advised by its counsel that it may be held
liable for the failure to exhibit the interestholder records to such person.
SECTION 9. EFFECTIVENESS, DURATION AND TERMINATION
(a) This Agreement shall become effective with respect to each Portfolio
on the date hereof and with respect to each future portfolio of the Trust on the
date this Agreement or Appendix A hereto is amended. Upon effectiveness of this
Agreement, it shall supersede all previous agreements between the parties hereto
covering the subject matter hereof insofar as such Agreement may have been
deemed to relate to the Portfolios.
(b) This Agreement shall continue in effect with respect to a Portfolio
for a period of one year from its effectiveness and shall continue in effect for
successive twelve-month periods; provided, however, that continuance is
specifically approved at least annually (i) by the Board or by a vote of a
majority of the outstanding voting interests of the Portfolio and (ii) by a vote
of a majority of Trustees of the Trust who are not parties to this agreement or
interested persons of any such party (other than as Trustees of the Trust);
provided further, however, that if the
<PAGE>
continuation of this agreement is not approved as to a Portfolio, Forum may
continue to render to the Portfolio the services described herein in the manner
and to the extent permitted by the 1940 Act and the rules and regulations
thereunder.
(c) This Agreement may be terminated with respect to a Portfolio at any
time, without the payment of any penalty, (i) by the Board on 60 days' written
notice to Forum or (ii) by Forum on 60 days' written notice to the Trust.
SECTION 10. ASSIGNMENT; DELEGATION
(a) This Agreement shall extend to and shall bind the parties hereto and
their respective successors and assigns; provided, however, that this Agreement
shall not be assignable by the Trust without the written consent of Forum or by
Forum without the written consent of the Trust, authorized or approved by a
resolution of the Board. Notwithstanding the foregoing, either party may assign
this Agreement without the consent of the other party so long as the assignee is
an affiliate, parent or subsidiary of the assigning party and is qualified to
act under applicable law.
(b) Forum may contract with other qualified service providers to perform
any of the services contemplated by this Agreement; provided, that Forum shall
not thereby be relieved of any of its obligations hereunder.
SECTION 11. NOTICES
Any notice or other communication required by or permitted to be given in
connection with this Agreement shall be in writing, and shall be delivered in
person, sent by first-class mail, postage prepaid, or sent by overnight
delivery, postage prepaid, to the respective parties at the following addresses
or such other address as the parties may designate in writing by the same
methods:
If to the Trust:
Core Trust (Delaware)
Two Portland Square
Portland, Maine 04101
Attn: Secretary
If to Forum:
Forum Financial Corp.
Two Portland Square
Portland, Maine 04101
Attn: Secretary
<PAGE>
SECTION 12. LIMITATION OF LIABILITY OF THE TRUSTEES AND INTERESTHOLDERS
The Trustees of the Trust and the interestholders of the Portfolios shall
not be liable for any obligations of the Trust or of the Portfolios under this
Agreement, and Forum agrees that, in asserting any rights or claims under this
Agreement, it shall look only to the assets and property of the Trust or the
Portfolio to which Forum's rights or claims relate in settlement of such rights
or claims, and not to the Trustees of the Trust or the interestholders of the
Portfolios.
SECTION 13. MISCELLANEOUS
(a) No provisions of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by both
parties hereto.
(b) If any part, term or provision of this Agreement is held to be
illegal, in conflict with any law or otherwise invalid, the remaining portion or
portions shall be considered severable and not be affected, and the rights and
obligations of the parties shall be construed and enforced as if the Agreement
did not contain the particular part, term or provision held to be illegal or
invalid.
(c) This Agreement may be executed by the parties hereto on any number of
counterparts, and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
(d) Section headings in this Agreement are included for convenience only
and are not to be used to construe or interpret this Agreement.
(e) This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the State of Delaware.
(f) Neither party to this Agreement shall be liable to the other party for
consequential damages under any provision of this Agreement or for any
consequential damages arising out of any act or failure to act hereunder.
(g) The terms "vote of a majority of the outstanding voting interests,"
"interested person," "affiliated person" and "assignment" shall have the
meanings ascribed thereto in the Act to the terms "vote of a majority of the
outstanding voting securities," "interested person," "affiliated person" and
"assignment," respectively.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
CORE TRUST (DELAWARE)
__________________________
John Y. Keffer
President
FORUM FINANCIAL CORP.
________________________
David R. Keffer
Vice President
<PAGE>
CORE TRUST (DELAWARE)
FUND ACCOUNTING AGREEMENT
APPENDIX A
PORTFOLIOS
Cash Portfolio
Government Cash Portfolio
Treasury Cash Portfolio
Treasury Portfolio
<PAGE>
CORE TRUST (DELAWARE)
FUND ACCOUNTING AGREEMENT
APPENDIX B
SERVICES
A. Forum shall prepare and maintain, on behalf of the Trust, the following
books and records of each Portfolio pursuant to Rule 31a-1 under the Act (the
"Rule"):
(i) Journals containing an itemized daily record in detail of all
purchases and sales of securities, all receipts and disbursements of cash
and all other debits and credits, as required by sub-section (b)(1) of the
Rule;
(ii) Journals and auxiliary ledgers reflecting all asset, liability,
reserve, capital, income and expense accounts, as required by subsection
(b)(2) of the Rule;
(iii) A record of each brokerage order given by or on behalf of the Trust
for, or in connection with, the purchase or sale of securities, and all
other portfolio purchases or sales, as required by sub-sections (b)(5) and
(b)(6) of the Rule;
(iv) A record of all options, if any, in which the Trust has any direct
or indirect interest or which the Trust has granted or guaranteed and a
record of any contractual commitments to purchase, sell, receive or deliver
any property as required by subsection (b)(7) of the Rule;
(v) A monthly trial balance of all ledger accounts (except shareholder
accounts) as required by sub-section (b)(8) of the Rule; and
(vi) Other records required by the Rule or any successor rule or pursuant
to interpretations thereof to be kept by open-end management investment
companies, but limited to these provisions of the Rule applicable to
portfolio and interestholder transactions and as agreed upon between the
parties hereto.
B. Forum shall perform the following accounting services:
(i) Calculate the net asset value of each Portfolio and each
interestholder thereof with the frequency prescribed in each Portfolio's
then-current Prospectus;
(ii) Calculate and track each item of income, gain, loss, deduction and
credit, if any, and apply such items to each interestholder as required by
applicable accounting rules;
(iii) Maintain such accounts and perform such allocations as is required
by each Portfolio's Capital Account Establishment and Maintenance Policies;
<PAGE>
(iv) Calculate the yield, effective yield, tax equivalent yield and total
return for each Portfolio, as applicable, and such other measure of
performance as may be agreed upon between the parties hereto;
(v) Provide the Trust and such other persons as the Trust's
administrator may direct with the following reports: (a) a current security
position report, (b) a summary report of transactions and pending
maturities (including the principal, cost, and accrued interest on each
portfolio security in maturity date order), and (c) a current cash position
and projection report;
(vi) Prepare and record, as of each time when the net asset value of a
Portfolio is calculated or as otherwise directed by the Trust's
administrator, either: (a) a valuation of the assets in the Portfolio
(based upon the use of outside services normally used and contracted for
this purpose by Forum in the case of securities for which information and
market price or yield quotations are readily available and based upon
evaluations conducted in accordance with the Trust's or the Trust's
administrator's instructions in the case of all other assets) or (b) a
calculation confirming that the market value of the Portfolio's assets does
not deviate from the amortized cost value of those assets by more than a
specified percentage agreed to from time to time by Forum and the Trust;
(vii) Obtain necessary information from the Trust and the Trust's
administrator in order to prepare, and prepare, the Trust's Form N-SAR;
(viii) Assist in the preparation of support schedules necessary for the
completion of Federal and State income tax returns of the Portfolios;
(ix) Monitor each Portfolio's status as if it were a regulated investment
company under Subchapter M of the Internal Revenue Code of 1986, as
amended;
(x) Assist the Trust's independent accountants and, upon approval of the
Trust or the Trust's administrator, any regulatory body in any requested
review of the Trust's books and records maintained by Forum;
(xi) Prepare semi-annual financial statements of each Portfolio; and
(xii) Prepare other periodic reports to shareholders and the Securities
and Exchange Commission and such other reports as may be agreed to from
time to time and provide information typically supplied in the investment
company industry to companies that track or report the price, performance
or other information with respect to investment companies.
<PAGE>
CORE TRUST (DELAWARE)
FUND ACCOUNTING AGREEMENT
APPENDIX C
COMPENSATION
<TABLE>
<CAPTION>
For its services, Forum shall receive fees calculated as follows:
Standard Fee per Portfolio with one interestholder the lesser of
$48,000/year or
5bp/year
<S> <C>
Standard Fee per "Treasury Portfolio" with one interestholder $48,000/year
Fee for each additional interestholder (other than nominal
interests of any initial interestholders) $ 6,000/year
Plus Additional Surcharges for each of:
(1) Tax-Free Money Market Portfolios $ 12,000/year
(2) Global or International Portfolios $ 12,000/year
(3) Portfolios with more than 25% of their total assets
invested in asset backed securities $ 1,000/month
(4) Portfolios with more than 50% of their total assets
invested in asset backed securities $ 1,000/month
(5) Portfolios with more than 100 security positions
For each 100 positions (or portion thereof) above 100 $ 1,000/month
(6) Portfolios with a monthly portfolio
turnover rate of 10% or greater $ 1,000/month
(7) Portfolios holding futures, options or
forward currency contracts $ 1,000/month
(8) Portfolios (other than those subject to (1) above)
with more than 30 international positions $ 1,000/month
</TABLE>
All fees are to be paid and computed monthly in arrears by the Trust and are
determined based upon the total assets or security positions as of the end of
the prior month and on the portfolio turnover rate for the prior month.
Portfolio turnover rate shall have the meaning ascribed thereto in Securities
and Exchange Commission Form N-1A.
<PAGE>
EXHIBIT (9)(f)
<PAGE>
EXHIBIT (9)(f)
CORE TRUST (DELAWARE)
PLACEMENT AGENT AGREEMENT
AGREEMENT made this 1st day of September, 1995, between Core Trust
(Delaware) (the "Trust"), a business trust organized under the laws of the State
of Delaware with its principal place of business at Two Portland Square,
Portland, Maine 04101, and Forum Financial Services, Inc. ("Forum"), a
corporation organized under the laws of State of Delaware with its principal
place of business at 61 Broadway, New York, New York 10006.
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended, (the "Act") as an open-end management investment company and is
authorized to issue Interests (as defined in the Trust's Trust Instrument) in
separate series; and
WHEREAS, the Trust desires that Forum perform placement agent services for
each of the portfolios of the Trust as listed in Appendix A hereto (each a
"Portfolio," and collectively the "Portfolios") and Forum is willing to provide
those services on the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
SECTION 1. SERVICES AS PLACEMENT AGENT
(a) Forum will act as Placement Agent of the Interests of the Portfolios.
As Placement Agent, Forum shall have the right to sell Interests of the
Portfolios upon the terms set forth in the Trust's registration statement, as
such registration statement is amended and in effect from time to time. In
acting as Placement Agent, neither Forum nor its employees nor any agents
thereof shall make any offer or sale of Interests in a manner which would
require the Interests to be registered under the Securities Act of 1933, as
amended (the "1933 Act"). As used in this Agreement the term "registration
statement" shall mean any registration statement filed with the Securities and
Exchange Commission (the "Commission") as modified by any amendments thereto
that at any time shall have been filed with the Commission by or on behalf of
the Trust.
(b) All activities by Forum and its agents and employees as Placement
Agent of Interests shall comply with all applicable laws, rules and regulations,
including without limitation, all rules and regulations adopted pursuant to the
1940 Act by the Commission.
(c) Nothing herein shall be construed to require the Trust to accept any
offer to purchase any Interests, all of which shall be subject to approval by
the Trust's Board of Trustees.
<PAGE>
(d) The Trust shall furnish from time to time for use in connection with
the sale of Interests such information with respect to the Trust and Interests
as Forum may reasonably request. The Trust shall also furnish Forum upon request
with: (a) audited annual and unaudited semiannual statements of the Trust's
books and accounts prepared by the Trust, and (b) from time to time such
additional information regarding the Trust's financial or regulatory condition
as Forum may reasonably request.
(e) The Trust represents to Forum that all registration statements filed
by the Trust with the Commission under the 1940 Act with respect to Interests
have been prepared in conformity with the requirements of such statute and rules
and regulations of the Commission thereunder. The Trust represents and warrants
to Forum that any registration statement will contain all statements required to
be stated herein in conformity with both such statute and the rules and
regulations of the Commission; that all statements of fact contained in any
registration statement will be true and correct in all material respects at the
time of filing of such registration statements or amendments thereto; and that
no registration statement will include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading to a purchaser of Interests. The Trust
may but shall not be obligated to, propose from time to time such amendment to
any registration statement as in the light of future developments may, in the
opinion of the Trust's counsel, be necessary or advisable. If the Trust shall
not propose such amendment and/or supplement within fifteen days after receipt
by the Trust of a written request from Forum to do so, Forum may, at its option,
terminate this Agreement. The Trust shall not file any amendment to any
registration statement without giving Forum reasonable notice thereof in
advance; provided, however, that nothing contained in this Agreement shall in
any way limit the Trust's right to file at any time such amendment to any
registration statement as the Trust may deem advisable, such right being in all
respects absolute and unconditional.
(f) The Trust agrees to indemnify, defend and hold Forum, its several
officers and directors, and any person who controls Forum within the meaning of
Section 15 of the 1933 Act or Section 20 of the Securities Exchange Act of 1934
(the "1934 Act") (for purposes of this Section 1(f), collectively, "Covered
Persons") free and harmless from and against any and all claims, demands,
liabilities and any counsel fees incurred in connection therewith) which any
Covered Person may incur under the 1933 Act, the 1934 Act, common law or
otherwise, arising out of or based on any untrue statement of a material fact
contained in any registration statement, private placement memorandum or other
offering material ("Offering Material") or arising out of or based on any
omission to state a material fact required to be stated in any Offering Material
or necessary to make the statements in any Offering Material not misleading,
provided, however, that the Trust's agreement to indemnify Covered Persons shall
not be deemed to cover any claims, demands, liabilities or expenses arising out
of any financial and other statements as are furnished in writing to the Trust
by Forum in its capacity as Placement Agent for use in the answers to any items
of any registration statement or in any statements made in any Offering
Material, or arising out of or based on any omission or alleged omission to
state a material fact in connection with the giving of such information required
to be stated in such answers or necessary to make the answers not misleading;
and further provided that the Trust's indemnification shall not be deemed to
cover any liability to the Trust or its investors to which a Covered Person
would otherwise be subject by reason or willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of a
<PAGE>
Covered Person's reckless disregard of its obligations and duties under this
Agreement. The Trust shall be notified of any action brought against a Covered
Person, such notification to be given by letter or by telegram addressed to the
Secretary of the Trust, promptly after the summons or other first legal process
shall have been duly and completely served upon such Covered Person. The
failure to notify the Trust of any such action shall not relieve the Trust from
any liability except to the extent that the Trust shall have been prejudiced by
such failure, or from any liability that the Trust may have to the Covered
Person against whom such action is brought by reason of any such untrue
statement or omission, otherwise than on account of the Trust's indemnity
agreement contained in this Section 1(f). The Trust will be entitled to assume
the defense of any suit brought to enforce any such claim, demand or liability,
but in such case such defense shall be conducted by counsel chosen by the Trust
and approved by Forum, the defendant or defendants in such suit shall bear the
fees and expenses of any additional counsel retained by any of them; but in case
the Trust does not elect to assume the defense of any such suit, or in case
Forum reasonably does not approve of counsel chosen by the Trust, the Trust will
reimburse the Covered Person named as defendant in such suit, for the fees and
expenses of any counsel retained by Forum or such Covered Person. The Trust's
indemnification agreement contained in this Section 1(f) and the Trust's
representations and warranties in this Agreement shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
Covered Persons, and shall survive the delivery of any Interests. This
agreement of indemnity will inure exclusively to Covered Persons and their
successors. The Trust agrees to notify Forum promptly of the commencement of
any litigation or proceedings against the Trust or any of its officers or
Trustees in connection with the issue and sale of any Interests.
(g) Forum agrees to indemnify, defend and hold the Trust, its several
officers and trustees, and any person who controls the Trust within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act (for purposes of
this Section 1(g) collectively, "Covered Persons") free and harmless from and
against any and all claims, demands, liabilities and expenses (including the
costs of investigating or defending such claims, demands, liabilities and any
counsel fees incurred in connection therewith) that Covered Persons may incur
under the 1933 Act, the 1934 Act, or common law or otherwise, but only to the
extent that such liability or expense incurred by a Covered Person resulting
from such claims or demands shall arise out of or be based on any untrue
statement of a material fact contained in information furnished in writing by
Forum in its capacity as Placement Agent to the Trust for use in the answers to
any of the items of any registration statement or in any statements in any
Offering Material or shall arise out of or be based on any omission to state a
material fact in connection with such information furnished in writing by Forum
to the Trust required to be stated in such answers or necessary to make such
information not misleading. Forum shall be notified of any action brought
against a Covered Person, such notification to be given by letter or telegram
addressed to Forum, Attention: Legal Department, promptly after the summons or
other first legal process shall have been duly and completely served upon such
Covered Person. Forum shall have the right of first control of the defense of
the action with counsel of its own choosing satisfactory to the Trust if such
action is based solely on such alleged misstatement or omission on Forum's part,
and in any other event each Covered Person shall have the right to participate
in the defense or preparation of the defense of any such action. The failure to
so notify Forum of any such action shall not relieve Forum from any liability
except to the extent that Forum shall have been prejudiced by such failure, or
from any liability that Forum
<PAGE>
may have to Covered Persons by reason of any such untrue or alleged untrue
statement, or omission or alleged omission, otherwise than on account of Forum's
indemnity agreement contained in this Section 1(g).
(h) No Interests shall be offered by either Forum or the Trust under any
of the provisions of this Agreement and no orders for the purchase or sale of
Interests hereunder shall be accepted by the Trust if and so long as the
effectiveness of the registration statement or any necessary amendments thereto
shall be suspended under any of the provisions of the 1940 Act; provided,
however, that nothing contained in this Section 1(h) shall in any way restrict
or have an application to or bearing on the Trust's obligation to redeem
Interests from any investor in accordance with the provisions of the Trust's
registration statement or Trust Instrument, as amended from time to time.
(i) The Trust agrees to advise Forum as soon as reasonably practical by
a notice in writing delivered to Forum or its counsel:
(i) of any request by the Commission for amendment to the registration
statement then in effect or for additional information;
(ii) in the event of the issuance by the Commission of any stop order
suspending the effectiveness of the registration statement then in effect
or the initiation by service of process on the Trust of any proceeding for
that purpose;
(iii) of the happening of any event that makes untrue any statement of a
material fact made in the registration statement then in effect or that
requires the making of a change in such registration statement in order to
make the statements therein not misleading; and
(iv) of all action of the Commission with respect to any amendment to any
registration statement that may from time to time be filed with the
Commission.
For purposes of this Section 1(i), informal requests by or acts of the
Staff of the Commission shall not be deemed actions or requests by the
Commission.
(j) Forum agrees on behalf of itself and its employees to treat
confidentially and as proprietary information of the Trust all records and other
information not otherwise publicly available relative to the Trust and its
prior, present or potential investors and not to 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 Trust, which approval shall not be unreasonably withheld and may not be
withheld where Forum 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 Trust.
(k) In addition to Forum's duties as Placement Agent, the Trust
understands that Forum may, in its discretion, perform additional functions in
connection with transactions in Interests.
<PAGE>
(l) Forum shall receive no fee for its services hereunder.
(m) The processing of Interest transactions may include, but is not
limited to, compilation of all transactions; creation of a transaction tape and
timely delivery of it to the Trust's transfer agent for processing;
reconciliation of all transactions delivered to the Trust's transfer agent; and
the recording and reporting of these transactions executed by the Trust's
transfer agent in customer statements; and rendering of periodic customer
statements.
(n) Forum may also provide other investor services, such as
communicating with Trust investors and other functions in administering customer
accounts for Trust investors.
(o) Nothing herein is intended, nor shall be construed, as requiring
Forum to perform any of the foregoing functions.
SECTION 2. EFFECTIVENESS, DURATION AND TERMINATION
(a) This Agreement shall become effective with respect to each Portfolio
on the date hereof and with respect to each future portfolio of the Trust on the
date this Agreement or Appendix A hereto is amended. Upon effectiveness of this
Agreement, it shall supersede all previous agreements between the parties hereto
covering the subject matter hereof insofar as such Agreement may have been
deemed to relate to the Portfolios.
(b) This Agreement shall continue in effect with respect to a Portfolio
for a period of one year from its effectiveness and shall continue in effect for
successive twelve-month periods; provided, however, that continuance is
specifically approved at least annually (i) by the Board or by a vote of a
majority of the outstanding voting interests of the Portfolio and (ii) by a vote
of a majority of Trustees of the Trust who are not parties to this agreement or
interested persons of any such party (other than as Trustees of the Trust);
provided further, however, that if the continuation of this agreement is not
approved as to a Portfolio, Forum may continue to render to the Portfolio the
services described herein in the manner and to the extent permitted by the Act
and the rules and regulations thereunder.
(c) This Agreement may be terminated with respect to a Portfolio at any
time, without the payment of any penalty, (i) by the Board on 60 days' written
notice to Forum or (ii) by Forum on 60 days' written notice to the Trust. This
agreement shall terminate upon assignment.
SECTION 3. REPRESENTATIONS AND WARRANTIES
Forum and the Trust each hereby represents and warrants to the other that
it has all requisite authority to enter into, execute, deliver and perform its
obligations under this Agreement and that, with respect to it, this Agreement is
legal, valid and binding, and enforceable in accordance with its terms.
<PAGE>
SECTION 4. ACTIVITIES OF FORUM
Except to the extent necessary to perform Forum's obligations hereunder,
nothing herein shall be deemed to limit or restrict Forum's right, or the right
of any of Forum's officers, directors or employees who may also be a trustee,
officer or employee of the Trust, or persons otherwise affiliated persons of the
Trust to engage in any other business or to devote time and attention to the
management or other aspects of any other business, whether of a similar or
dissimilar nature, or to render services of any kind to any other corporation,
trust, firm, individual or association.
SECTION 5. LIMITATION OF INTERESTHOLDER AND TRUSTEE LIABILITY
The Trustees of the Trust and the interestholders of each Portfolio shall
not be liable for any obligations of the Trust or of the Portfolios under this
Agreement, and Forum agrees that, in asserting any rights or claims under this
Agreement, it shall look only to the assets and property of the Trust or the
Portfolio to which Forum's rights or claims relate in settlement of such rights
or claims, and not to the Trustees of the Trust or the interestholders of the
Portfolios.
SECTION 6. MISCELLANEOUS
(a) No provisions of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by both
parties hereto.
(b) If any part, term or provision of this Agreement is held to be
illegal, in conflict with any law or otherwise invalid, the remaining portion or
portions shall be considered severable and not be affected, and the rights and
obligations of the parties shall be construed and enforced as if the Agreement
did not contain the particular part, term or provision held to be illegal or
invalid.
(c) This Agreement may be executed by the parties hereto on any number
of counterparts, and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
(d) Section headings in this Agreement are included for convenience only
and are not to be used to construe or interpret this Agreement.
(e) This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the State of New York.
(f) Neither party to this Agreement shall be liable to the other party
for consequential damages under any provision of this Agreement or for any
consequential damages arising out of any act or failure to act hereunder.
(g) The terms "vote of a majority of the outstanding voting interests,"
"interested person," "affiliated person" and "assignment" shall have the
meanings ascribed thereto in the Act
<PAGE>
to the terms "vote of a majority of the outstanding voting securities,"
"interested person," "affiliated person" and "assignment," respectively.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
CORE TRUST (DELAWARE)
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John Y. Keffer
President
FORUM FINANCIAL SERVICES, INC.
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David R. Keffer
Vice President
<PAGE>
CORE TRUST (DELAWARE)
PLACEMENT AGENT AGREEMENT
APPENDIX A
Treasury Cash Portfolio
Government Cash Portfolio
Cash Portfolio
Treasury Portfolio
