CORE TRUST /DE, POS AMI, 2000-12-29

CORE TRUST /DE
POS AMI, 2000-12-29

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As filed with the Securities and Exchange Commission on December 29, 2000

File No. 811-8858

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940

Amendment No. 20

CORE TRUST (DELAWARE)

Two Portland Square
Portland, Maine 04101
207-879-1900

Leslie K. Klenk, Esq.
Forum Administrative Services, LLC
Two Portland Square
Portland, Maine 04101

Copies to:

Robert J. Zutz, Esq.
Kirkpatrick & Lockhart LLP
1800 Massachusetts Avenue NW 2nd Floor
Washington, DC 20036-1800

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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.

<PAGE>

PART A

Treasury Cash Portfolio, Government Portfolio, Government Cash Portfolio, Cash
Portfolio and Municipal Cash Portfolio.

<PAGE>

PART B

Treasury Cash Portfolio, Government Portfolio, Government Cash Portfolio, Cash
Portfolio and Municipal Cash Portfolio.

<PAGE>

PART A

CORE TRUST (DELAWARE)

PRIVATE PLACEMENT MEMORANDUM

JANUARY 1, 2001

This Private Placement Memorandum relates to beneficial interests ("Interests")
in Treasury Cash Portfolio, Government Portfolio, Government Cash Portfolio,
Cash Portfolio and Municipal Cash Portfolio (each a "Portfolio" and collectively
the "Portfolios"), diversified portfolios of Core Trust (Delaware) (the
"Trust"), a registered, open-end management investment company.

Investments in a Portfolio may only be made by certain institutional
interestholders, 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 ("1933 Act").

The Trust has filed with the Securities and Exchange Commission ("SEC") a Part B
to this Private Placement Memorandum (the "Statement of Additional Information"
or "SAI") for the Portfolios dated the same date as this Private Placement
Memorandum. The SAI may be amended from time to time and contains additional
information about the Trust and each Portfolio and is incorporated into this
Private Placement Memorandum by reference. You may obtain a copy of the SAI
without charge by contacting Forum Fund Services, LLC ("FFS"), the Trust's
placement agent (the "Placement Agent") at Two Portland Square, Portland, Maine
04101, or by calling (207) 879-1900.

This Private Placement Memorandum does not constitute an offer to sell or the
solicitation of an offer to buy Interests in any Portfolio. You may subscribe
for Interests in a Portfolio and you may obtain a complete subscription package,
including a subscription agreement, by contacting the Placement Agent at Two
Portland Square, Portland, Maine 04101, (207) 879-1900. 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
Glossary.......................................................................2
Investment Objectives..........................................................3
Principal Investment Strategies................................................4
Risk Considerations............................................................5
Management of The Portfolios...................................................6
Description of Beneficial Interests............................................7
Purchase of Interests..........................................................8
Redemption or Repurchase of Interests..........................................9
Information Regarding Net Income and Taxes.....................................9
Pending Legal Proceedings......................................................9

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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 APPLICABLE STATE
SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.

<PAGE>

GLOSSARY

This Glossary of frequently used terms will help in understanding the discussion
of the Portfolios' objectives, policies, risks and operations. Defined terms are
capitalized when used in this Part A.

TERM DEFINITION

Adviser Forum Investment Advisors, LLC.

Board The Board of Trustees of Core Trust (Delaware).

Code The Internal Revenue Code of 1986, as amended.

Forum Forum Financial Group, LLC. Subsidiaries of Forum
provide administrative, placement agency and
unitholder, and portfolio accounting services to each
Portfolio.

Government Security A security that is issued or guaranteed by the U.S.
Government, its agencies or instrumentalities.

Interest Beneficial interest in a Portfolio.

Money Market Security A high credit quality, short-term, U.S. dollar
denominated debt security.

Municipal Security A security the interest on which is exempt from Federal
income tax.

NRSRO A nationally recognized statistical rating organization,
such as S&P, that rates fixed-income securities and
preferred stock by relative credit risk. NRSROs also
rate money market mutual funds.

Portfolio Each of Treasury Cash Portfolio, Government Portfolio,
Government Cash Portfolio, Cash Portfolio and Municipal
Cash Portfolio.

Repurchase Agreement A transaction in which securities are purchased and
simultaneously committed to be resold to another party at
an agreed-upon date and at a price reflecting a market
rate of interest.

S&P Standard & Poor's Ratings Group.

SAI Statement of Additional Information.

SEC The U.S. Securities and Exchange Commission.

Treasury Security A security that is issued or guaranteed by the U.S.
Treasury.

Trust Core Trust (Delaware)

1933 Act The Securities Act of 1933, as amended.

2
<PAGE>

INVESTMENT OBJECTIVES

The investment objective of each Portfolio is fundamental and may not be changed
without investor approval.

TREASURY CASH PORTFOLIO. The investment objective of Treasury Cash Portfolio is
to provide high current income to the extent consistent with the preservation of
capital and the maintenance of liquidity.

GOVERNMENT PORTFOLIO. The investment objective of Government Portfolio is to
provide high current income to the extent consistent with the preservation of
capital and the maintenance of liquidity.

GOVERNMENT CASH PORTFOLIO. The investment objective Government Cash Portfolio is
to provide high current income to the extent consistent with the preservation of
capital and the maintenance of liquidity.

CASH PORTFOLIO. The investment objective of Cash Portfolio is to provide high
current income to the extent consistent with the preservation of capital and the
maintenance of liquidity.

MUNICIPAL CASH PORTFOLIO. The investment objective of Municipal Cash Portfolio
is to provide high current income, which is exempt from federal income taxes to
the extent consistent with the preservation of capital and the maintenance of
liquidity. Under normal market conditions, the Portfolio will have at least 80%
of its net assets invested in federally tax-exempt instruments.

3
<PAGE>

PRINCIPAL INVESTMENT STRATEGIES

Each Portfolio invests in a diversified portfolio of Money Market Securities,
seeks to maintain a stable net asset value of $1.00 per share, invests in
securities with remaining maturities of 397 days or less and maintains a dollar
weighted average maturity of its investments of 90 days or less

Each Portfolio invests only in Money Market Securities that are rated in one of
the two highest short-term ratings categories (by companies such as S&P) or
unrated and determined by the Adviser to be of comparable quality.

The Portfolios operate in accordance with "Rule 2a-7" under the Investment
Company Act of 1940. All restrictions relating to maturity, credit and
diversification are interpreted in accordance with that rule.

A Portfolio may from time to time take temporary defensive positions in response
to adverse market, economic, political or other conditions. For instance, the
Portfolios may hold cash in any amount. Each Portfolio may invest in other money
market mutual funds that have substantially similar policies.

Securities in which the Portfolios invest may have variable or floating rates of
interest. These securities pay interest at rates that are adjusted periodically
according to a specified formula, usually with reference to some interest rate
index or market interest rate. The Portfolios limit these securities to those
with an interest rate that is adjusted based solely on a single short-term rate
or index, such as the Prime Rate.

The Portfolios' primary investments are:

TREASURY CASH PORTFOLIO At least 65% of total assets in Treasury Securities and
repurchase agreements backed by Treasury Securities.

GOVERNMENT PORTFOLIO Treasury Securities and Government Securities that are
exempt from state and local income taxes.

GOVERNMENT CASH PORTFOLIO At least 65% of total assets in Treasury Securities
and Government Securities and in repurchase agreements backed by these
securities.

CASH PORTFOLIO A broad spectrum of Money Market Securities including: (i)
securities issued by financial institutions, such as certificates of deposits
bankers' acceptances and time deposits, (ii) securities issued by domestic
companies, such as commercial paper, (iii) Government Securities and (iv)
Repurchase Agreements

MUNICIPAL CASH PORTFOLIO Municipal Securities. The Portfolio may invest up to
20% of its total assets in Municipal Securities or other Money Market Securities
whose interest is subject to Federal income tax. The Portfolio may invest up to
35% of its total assets in Municipal Securities the issuers of which are located
in one state or territory.

Municipal Securities are issued by or on behalf of the states, territories and
possessions of the U.S. and their local governments and public financing
authorities. The Portfolio invests a significant portion of its assets in
Municipal Securities supported by credit and liquidity enhancements. These
investments are often comprised of long term Municipal Securities structured to
allow the Portfolio the option to sell the security back to the issuer. Many of
these investments have interest rates that are reset periodically. There are
many different structures, which Municipal Securities may take. The Adviser
reviews and considers a security's structure and will only purchase a Municipal
Security if it believes that third party credit and liquidity supporters possess
minimal credit risk.

Pending investments, the Portfolios may hold cash in any amount. Each Portfolio
may also invest in other money market mutual funds that have substantially
similar policies.

4
<PAGE>

RISK CONSIDERATIONS

GENERAL

An investment in a Portfolio is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. Although each Portfolio seeks to preserve the value of your investment
at $1.00 per share, it is possible to lose money by investing in a Portfolio.

There is no assurance that any Portfolio will achieve its investment objective.
An investment in a Portfolio is not by itself a complete or balanced investment
program. The principal risks of investing in a Portfolio are described below.
These risks can result in a decrease in the value of a security or all the
securities owned by a Portfolio and, therefore, a change in the Portfolio's
$1.00 per share value. These risks also can result in lower investment
performance.

INTEREST RATE RISK

Interest rates affect the value of the Portfolios' investments. Increases in
interest rates may cause a decline in value. In addition, those increases may
cause the Portfolio's investment performance to underperform currently available
investments.

CREDIT RISK

The value of a security held by a Portfolio may decline if the security's credit
rating is downgraded or its credit quality otherwise falls. In the worst case,
an issuer of a security or a Repurchase Agreement counterparty may default or
otherwise be unable to make timely payments of interest or principal. Not all
Government Securities are supported by the full faith and credit of the U.S.
Government.

LOCAL ECONOMIC/POLITICAL RISK

Changes in state or regional economies or politics can adversely affect the
value of the Municipal Securities issued in that location.

MANAGEMENT RISK

As with all mutual funds, the Adviser may make poor investment decisions.

5
<PAGE>

MANAGEMENT OF THE PORTFOLIOS

TRUSTEES AND OFFICERS

The business of the Trust and of each Portfolio is managed under the direction
of the Board. The Board formulates the general policies of each Portfolio and
meets periodically to review each Portfolio's performance, monitor investment
activities and practices and discuss other matters affecting each Portfolio.
Additional information about the Board and the Trust's executive officers is in
the SAI.

INVESTMENT ADVISER

Each Portfolio's investment adviser is Forum Investment Advisors, LLC, Two
Portland Square, Portland, Maine 04101. The Adviser is a privately owned company
controlled by John Y. Keffer. The Adviser makes investment decisions for each
Portfolio. In addition to the Portfolios, the Adviser manages two other money
market funds and two taxable and three tax-free bond funds.

PORTFOLIO MANAGER

Since their inception (except Government Portfolio), Anthony R. Fischer, Jr.,
has been the portfolio manager responsible for the day to day management of the
Portfolios. Mr. Fischer has over 25 years of experience in the money market
industry.

ADVISORY FEES

The Adviser makes investment decisions for the Portfolios. During the
Portfolios' last fiscal year, the Adviser received advisory fees at the
following annual rates as a percentage of average net assets:

PORTFOLIO ADVISORY FEE
Treasury Cash Portfolio 0.030%
Government Portfolio 0.050%
Government Cash Portfolio 0.030%
Cash Portfolio 0.030%
Municipal Cash Portfolio 0.050%

OTHER SERVICE PROVIDERS

Forum provides various services to each Portfolio. As of October 31, 2000, Forum
provided administration and distribution services to investment companies and
collective investment funds with assets of approximately $123 billion.

Forum Fund Services, LLC ("FFS"), a registered broker-dealer and member of the
National Association of Securities Dealers, Inc., is the placement agent of each
Portfolio's Interests. The placement agent sells interests of each Portfolio on
behalf of the Trust.

Forum Administrative Services, LLC provides administrative services to each
Portfolio and Forum Accounting Services, LLC is each Portfolio's unitholder and
portfolio accountant.

EXPENSES

Each Portfolio pays for all of its expenses. Each Portfolio's expenses include
its own expenses as well as Trust expenses that are allocated among the
Portfolios in proportion to their average net assets or as otherwise determined
by the Board. The Adviser or other service providers may voluntarily waive all
or any portion of their fees and/or reimburse certain expenses of a Portfolio.
Any fee waiver or expense reimbursement increases a Portfolio's performance for
the period during which the waiver or reimbursement is in effect.

6
<PAGE>

DESCRIPTION OF BENEFICIAL INTERESTS

The Trust is an open-end, management investment company that was organized as a
business trust under the laws of the State of Delaware. The Trust offers units
of Interest without any sales charge and units may be redeemed without charge.

The Portfolios currently comprise all the series of the Trust. The Trust is
empowered to establish, without investor approval, additional series that may
have different investment objectives and policies.

Interests in a Portfolio are offered solely in private placement transactions
which do not involve any "public offering" within the meaning of Section 4(2) of
the 1933 Act. Investments in a Portfolio may only be made by certain
institutional interestholders, 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). This
registration statement does not constitute an offer to sell, or the solicitation
of an offer to buy, any "security" as that term is defined in the 1933 Act.

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. Interests in a Portfolio may not be transferred,
but you may withdraw all or any portion of your investment at any time at net
asset value ("NAV"). In determining the outcome of interestholder votes, the
Trust normally counts votes on an Interest by Interest basis. This means that
interestholders of a Portfolio with a comparatively high net asset values will
have a comparatively smaller impact on the outcome of votes by all of the
Portfolios than do interestholders of a Portfolio with a comparatively low net
asset value.

From time to time, an investor may own a large percentage of Interests of a
Portfolio and accordingly, may be able to greatly affect (if not determine) the
outcome of an interestholder vote.

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 to
hold and has no current intention of holding annual meetings of interestholders,
but the Trust will hold special meetings of interestholders 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. Interestholders have the right to remove one or more Trustees
without a meeting by a declaration in writing by a specified number of
interestholders. Upon liquidation of a Portfolio, interestholders will be
entitled to share pro rata in the Portfolio's net assets available for
distribution to interestholders.

7
<PAGE>

PURCHASE OF INTERESTS

Interests in a Portfolio 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. All investments in a Portfolio are made without a sales load, at
the NAV next determined after an order is received by the Portfolio. A Portfolio
can not accept orders that request a particular day or price for the transaction
or any other special condition.

The Portfolios do not issue certificates of interest.

The NAV of each Portfolio is determined as of 4:00 p.m., Eastern time
("Valuation Time"), on each weekday except on Federal holidays and other days
that the Federal Reserve Bank of New York is closed ("Business Day"). The time
at which NAV is calculated may change in case of an emergency. A Portfolio's NAV
per Interest is calculated by taking the market value of all securities owned by
the Portfolio (plus all other assets such as cash), subtracting the liabilities,
and dividing the results (net assets ) by the number of Interests outstanding.

Each investor in a Portfolio may add to or reduce its investment in a Portfolio
on any Business Day. Investments must be made by 2:00 p.m. Eastern time (12:00
p.m. in the case of Government Portfolio) in order to receive an allocation of
the days' income.

At the Valuation Time on each Business Day, the value of each interestholders
Interests in a Portfolio is determined by multiplying the Portfolio's NAV by the
percentage, effective for that day, that represents that interestholder's share
of the aggregate 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 interestholder's share of the aggregate Interests in the Portfolio then
will be recomputed using the percentage equal to the fraction: (i) the numerator
of which is the value of the interestholder'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 additions to or withdrawals from such Investment effected on that day and
(ii) 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 interestholders. The percentages so determined then will be applied to
determine the value of each interestholder's respective interest in the
Portfolio as of the Valuation Time on the following Business Day.

In order to more easily maintain a stable net asset value per share, each
Portfolio's portfolio securities are valued at their amortized cost (acquisition
cost adjusted for amortization of premium or accretion of discount) in
accordance with Rule 2a-7. The Portfolios will only value their portfolio
securities using this method if the Board believes that it fairly reflects the
market-based net asset value per share. The Portfolios' other assets, if any,
are valued at fair value by or under the direction of the Board.

There is no minimum initial or subsequent investment in a Portfolio. Because
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 Portfolios'
custodian by a Federal Reserve Bank) and in U.S. dollars.

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 Portfolios is FFS. FFS receives no
compensation for serving as the exclusive placement agent for the Trust.
Interestholder inquiries may be directed to FFS.

8
<PAGE>

REDEMPTION OR REPURCHASE OF INTERESTS

You may withdraw all or any portion of your investment in the Portfolio at the
NAV next calculation after a withdrawal request in proper form is received by a
Portfolio. Normally, a Portfolio will send proceeds of a withdrawal in federal
funds on the business day after the withdrawal is effected, but in any event
within one week. Delays may occur in case of a very large redemption, excessive
trading or during unusual market conditions.

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 SEC.

Each Portfolio reserves the right to pay redemption proceeds in portfolio
securities rather than cash. These redemptions "in kind" normally occur if the
amount to be redeemed is large enough to affect a Portfolio's operations (for
example, if it represents more than 1% of the Portfolio's assets).

INFORMATION REGARDING NET INCOME AND TAXES

A Portfolio's net income consists of all dividends and other income, including
any net realized gains on the Portfolio's assets, less all actual and accrued
expenses of the Portfolio 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 interestholders in
the Portfolio. A Portfolio's net income generally is not distributed to the
interestholders in the Portfolio, except as determined by the Trustees from time
to time, but instead is included in the NAV of the interestholders' respective
Interests in the Portfolio.

Each Portfolio operates so that it should not be subject to any income tax.
However, each interestholder in a Portfolio will be taxed on its proportionate
share (as determined in accordance with the Trust's Trust Instrument and the
Code, and the regulations promulgated thereunder) of the Portfolio's ordinary
income and capital gain. Your share of a Portfolio's distribution of capital
gain is taxable to you as long-term capital gain regardless of how long you have
held your Portfolio Interests. It is intended that each Portfolio's assets and
income will be managed in such a way that an interestholder 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.

The sale of Portfolio Interests is a taxable investment for Federal income tax
purposes.

Interestholder inquiries may be directed to FFS.

PENDING LEGAL PROCEEDINGS

None.

9
<PAGE>

PART B

CORE TRUST (DELAWARE)

PRIVATE PLACEMENT MEMORANDUM

STATEMENT OF ADDITIONAL INFORMATION

JANUARY 1, 2001

This Part B to the Private Placement Memorandum (the "Statement of Additional
Information" or "SAI") relates to beneficial interests in TREASURY CASH
PORTFOLIO, GOVERNMENT PORTFOLIO, GOVERNMENT CASH PORTFOLIO, CASH PORTFOLIO AND
MUNICIPAL CASH PORTFOLIO (each a "Portfolio" and collectively, the "Portfolios")
of Core Trust (Delaware) (the "Trust"), a registered, open-end, management
investment company. This SAI supplements Part A of the Private Placement
Memorandum ("Part A") dated January 1, 2001, relating to the Portfolios.

This SAI does not constitute an offer to sell or the solicitation of an offer to
buy beneficial interests in the Portfolios. An investor may subscribe for a
beneficial interest in a Portfolio by contacting Forum Fund Services, LLC
("FFS"), the Trust's Placement Agent (the "Placement Agent"), at Two Portland
Square, Portland, Maine 04101, (207) 879-1900, for a complete subscription
package, including Part A and 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

1. Introduction...............................................................1
2. Investment Policies and Risks..............................................2
3. Investment Limitations.....................................................8
4. Management of The Trust...................................................13
5. Control Persons and Principal Holders of Securities.......................14
6. Investment Advisory and Other Services....................................15
7. Brokerage Allocation and Other Practices..................................17
8. Purchase, Redemption and Pricing of Securities............................18
9. Tax Status................................................................18
10. Placement Agent..........................................................19
11. Financial Statements.....................................................19
Appendix A - Description of Securities Ratings...............................A-1
Appendix B - Miscellaneous Tables............................................B-1

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<PAGE>

1. INTRODUCTION

THE PORTFOLIOS

Government Portfolio commenced operations on February 21, 1996. Treasury
Portfolio was renamed Government Portfolio on May 25, 1998. Treasury Cash
Portfolio, Government Cash Portfolio and Cash Portfolio each commenced
operations on September 1, 1995. Municipal Cash Portfolio commenced operations
on June 25, 1998.

DEFINITIONS:

"Adviser" means Forum Investment Advisors, LLC.

"Board" means the Board of Trustees of the Trust.

"Code" means the Internal Revenue Code of 1986, as amended.

"Custodian" means the custodian of each Portfolio's assets.

"FAdS" means Forum Administrative Services, LLC, administrator of each
Portfolio.

"FAcS" means Forum Accounting Services, LLC, the fund accountant of
each Portfolio.

"FFS" means Forum Fund Services, LLC, placement agent for each
Portfolio.

"Fitch" means Fitch IBCA, Inc.

"Government Securities" means securities issued or guaranteed by the
U.S. Government, its agencies or instrumentalities.

"Money Market Securities" means high quality, short-term U.S. dollar
denominated debt securities

"Moody's" means Moody's Investors Service.

"NAV" means per share net asset value per share.

"NRSRO" means a nationally recognized statistical rating organization.

"Portfolio" means each of Treasury Cash Portfolio, Government
Portfolio, Government Cash Portfolio, Cash Portfolio and Municipal
Cash Portfolio, each a series of Core Trust.

"SEC" means the U.S. Securities and Exchange Commission.

"S&P" means Standard & Poor's Corporation, a Division of McGraw Hill
Companies.

"Treasury Securities" means securities issued or guaranteed by the U.S.
Treasury.

"Trust" means Core Trust (Delaware).

"1933 Act" means the Securities Act of 1933, as amended.

"1940 Act" means the Investment Company Act of 1940, as amended.

1
<PAGE>

2. INVESTMENT POLICIES AND RISKS

The following discussion supplements the disclosure in Part A about each
Portfolio's investment techniques, strategies and risks.

A. SEC RULE 2A-7

Under Rule 2a-7 of the 1940 Act, each Portfolio normally must invest at least
95% of its total assets in securities that are rated (by NRSROs such as S&P) in
the highest short-term rating category for debt obligations, or are unrated and
determined to be of comparable quality. Each Portfolio will maintain a
dollar-weighted average portfolio maturity of 90 days or less, will not purchase
any instrument with a remaining maturity greater than 397 days or subject to a
Repurchase Agreement having a duration of greater than 397 days, will limit
portfolio investments, including Repurchase Agreements, to those U.S.
dollar-denominated instruments that the Core Trust Board has determined present
minimal credit risks and will comply with certain reporting and record keeping
procedures. Core Trust has also established procedures to ensure that portfolio
securities meet a Portfolio's high quality criteria.

Pursuant to Rule 2a-7, the Core Trust Board and the Board have established
procedures to stabilize a Portfolio's and a Fund's net asset value,
respectively, at $1.00 per share. These procedures include a review of the
extent of any deviation of net asset value per share as a result of fluctuating
interest rates, based on available market rates, from a Portfolio's or Fund's
$1.00 amortized cost price per share. Should that deviation exceed 1/2 of 1%,
the respective board of trustees of a Portfolio and a Fund will consider whether
any action should be initiated to eliminate or reduce material dilution or other
unfair results to shareholders. Such action may include redemption of shares in
kind, selling portfolio securities prior to maturity, reducing or withholding
distributions and utilizing a net asset value per share as determined by using
available market quotations.

B. SECURITY RATINGS INFORMATION

Moody's, S&P and other NRSROs are private services that provide ratings of the
credit quality of debt obligations, including convertible securities. A
description of the range of ratings assigned to various types of securities by
several NRSROs is included in Appendix A. The Portfolios may use these ratings
to determine whether to purchase, sell or hold a security. Ratings are general
and are not absolute standards of quality. 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 Adviser will determine whether the Portfolio should continue
to hold the security. Because a downgrade often results in a reduction in the
market price of the security, sale of a downgraded security may result in a
loss. To the extent that the ratings given by a NRSRO may change as a result of
changes in such organizations or their rating systems, the Adviser will attempt
to substitute comparable ratings. 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. Unrated securities may not be as actively
traded as rated securities.

C. FIXED INCOME SECURITIES

1. VARIABLE AND FLOATING RATE SECURITIES

Each Portfolio may invest in fixed income securities with variable or floating
rates. The yield of variable and floating rate securities varies in relation to
changes in specific money market rates, such as the Prime Rate. A "variable"
interest rate adjusts at predetermined intervals (for example, daily, weekly or
monthly), while a "floating" interest rate adjusts whenever a specified
benchmark rate (such as the bank prime-lending rate) changes. These changes are
reflected in adjustments to the yields of the variable and floating rate
securities, and different securities may have different adjustment rates.
Accordingly, as interest rates increase or decrease, the appreciation or
depreciation may be less on these obligations than for fixed rate obligations.
To the extent that a Portfolio invests in long-term variable or floating rate
securities, the Adviser believes that the Portfolio may be able to take
advantage of the higher yield that is usually paid on long-term securities.

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Each Portfolio will only purchase variable or floating rate securities, whose
interest rate is adjusted based on a single short-term rate or index such as the
Prime Rate. Under Rule 2a-7 of the 1940 Act, a Portfolio may only purchase
securities with maturities of greater than 397 days if they have demand features
that meet certain requirements or they are certain long-term Government
Securities.

Cash Portfolio may purchase variable and floating rate corporate master notes.
Master notes with variable or floating interest rates are unsecured obligations
that are redeemable upon notice. You may invest fluctuating amounts in these
instruments at varying rates of interest under a direct arrangement with the
issuer. These obligations include master demand notes. The issuer of these
obligations often has the right, after a given period, to prepay its outstanding
principal obligations upon a specified number of days' notice. These obligations
generally are not traded and there is generally no established secondary market
for these obligations. To the extent a demand note does not have a seven day or
shorter demand feature and there is no readily available market for the
obligation, it is treated as an illiquid security.

2. ASSET BACKED SECURITIES

Each Portfolio may purchase adjustable rate mortgage backed or other asset
backed securities (such as Small Business Association securities) that are
Government Securities. Treasury Cash Portfolio may only purchase mortgage backed
or asset backed securities that are Treasury Securities. These securities
directly or indirectly represent a participation in, or are secured by and
payable from, adjustable rate mortgages or other loans that may be secured by
real estate or other assets. Most mortgage-backed securities are pass-through
securities, which means that investors receive payments consisting of a pro-rata
share of both principal and interest (less servicing and other fees), as well as
unscheduled prepayments, as loans in the underlying mortgage pool are paid off
by the borrowers. Additional prepayments to holders of these securities are
caused by prepayments resulting from the sale or foreclosure of the underlying
property or refinancing of the underlying loans. Prepayments of the principal of
underlying loans may shorten the effective maturities of these securities.

ADJUSTABLE RATE MORTGAGE BACKED SECURITIES Adjustable rate mortgage securities
("ARMs") are pass-through securities representing interests in pools of mortgage
loans with adjustable interest rates that are reset at periodic intervals,
usually by reference to some interest rate index or market interest rate, and
that may be subject to certain limits. Although the rate adjustment feature may
reduce sharp changes in the value of adjustable rate securities, these
securities can change in value based on changes in market interest rates or
changes in the issuer's creditworthiness. Changes in the interest rates on ARMs
may lag behind changes in prevailing market interest rates. This may result in a
slightly lower net value until the interest rate resets to market rates. Thus, a
Portfolio could suffer some principal loss if the Portfolio sold the securities
before the interest rates on the underlying mortgages were adjusted to reflect
current market rates. Some ARMs (or the underlying mortgages) are subject to
caps or floors that limit the maximum change in interest rates during a
specified period or over the life of the security.

SMALL BUSINESS ADMINISTRATION SECURITIES Small Business Administration ("SBA")
securities are variable rate securities that are backed by the full faith and
credit of the United States Government, and generally have an interest rate that
resets monthly or quarterly based on a spread to the Prime Rate. SBA securities
generally have maturities at issue of up to 40 years. No Portfolio may purchase
an SBA security, if immediately after the purchase, (1) the Portfolio would have
more than 15% of its net assets invested in SBA securities or (2) the total
unamortized premium (or the total unaccreted discount) on SBA securities would
exceed 0.25% of the Portfolio's net assets.

COLLATERALIZED MORTGAGE OBLIGATIONS Each Portfolio may purchase collateralized
mortgage obligations ("CMOs"), which are collateralized by ARMs or by pools of
conventional mortgages. CMOs typically have a number of classes or series with
different maturities and are generally retired in sequence. Each class of bonds
receives periodic interest payments according to the coupon rate on the bonds.
However, all monthly principal payments and any prepayments from the collateral
pool are paid first to the "Class 1" bondholders. The principal payments are
such that the Class 1 bonds will be completely repaid no later than, for
example, five years after the offering date. Thereafter, all payments of
principal are allocated to the next most senior class of bonds until that class
of bonds has been fully repaid. Although full payoff of each class of bonds is
contractually required by a certain date, any or all

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classes of bonds may be paid off sooner than expected because of an acceleration
in prepayments of the obligations comprising the collateral pool.

3. MUNICIPAL SECURITIES

Municipal Cash Portfolio may invest in municipal securities. Municipal
securities are issued by the states, territories and possessions of the United
States, their political subdivisions (such as cities, counties and towns) and
various authorities (such as public housing or redevelopment authorities),
instrumentalities, public corporations and their special districts (such as
water, sewer or sanitary districts). In addition, municipal securities include
securities issued by or on behalf of public authorities to finance various
privately operated facilities, such as industrial development bonds, that are
backed only by the assets and revenues of the non-governmental user (such as
hospitals and airports).

BONDS AND NOTES Municipal securities are issued to obtain funds for a variety of
public purposes, including general financing for state and local governments, or
financing for specific projects or public facilities. Municipal securities are
classified as general obligation bonds, revenue bonds and notes. General
obligation securities are secured by the issuer's pledge of its full faith,
credit and taxing power for the payment of principal and interest. Revenue
securities are payable from revenue derived from a particular facility, class of
facilities or the proceeds of a special excise tax or other specific revenue
source but not from the issuer's general taxing power. Private activity bonds
and industrial revenue bonds do not carry the pledge of the credit of the
issuing municipality, but generally, are guaranteed by the corporate entity on
whose behalf they are issued.

LEASES State and local governments and authorities enter into municipal leases
to acquire equipment and facilities such as fire and sanitation vehicles,
telecommunications equipment and other assets. Municipal leases permit
governmental issuers to acquire property and equipment without meeting
constitutional and statutory requirements for the issuance of debt. The
debt-issuance limitations of many state constitutions and statutes do not apply
to municipal leases that do not require the governmental issuer to satisfy
underlying obligations unless money is appropriated for that purpose by the
state legislature on a yearly or periodic basis.

PUTS AND STANDBY COMMITMENTS ON MUNICIPAL SECURITIES The Portfolio may acquire
"puts" on municipal securities. A put gives the Portfolio the right to sell the
municipal security at a specified price at any time on or before a specified
date. The Portfolio may sell, transfer or assign a put only with the sale,
transfer or assignment of the underlying security or securities. The amount
payable to the Portfolio upon its exercise of a "put" is normally: (1) the
Portfolio's acquisition cost of the municipal securities (excluding any accrued
interest which the Portfolio paid on their acquisition), less any amortized
market premium or plus any amortized market or original issue discount during
the period the Portfolio owned the securities, plus (2) all interest accrued on
the securities since the last interest payment date during that period.

Puts may be acquired by the Portfolio to facilitate the liquidity of its
portfolio assets. Puts may also be used to facilitate the reinvestment of the
Portfolio's assets at a rate of return more favorable than that of the
underlying security. Puts may, under certain circumstances, also be used to
shorten the maturity of underlying variable rate or floating rate securities for
purposes of calculating the remaining maturity of those securities and the
dollar-weighted average portfolio maturity of the Portfolio's assets. The
Portfolio intends to enter into puts only with dealers, banks and broker-dealers
that, in the Adviser's opinion, present minimal credit risks.

The Portfolio may purchase municipal securities together with the right to
resell them to the seller or a third party at an agreed-upon price or yield
within specified periods prior to their maturity dates. Such a right to resell
is commonly known as a "stand-by commitment," and the aggregate price which the
Portfolio pays for securities with a stand-by commitment may be higher than the
price which otherwise would be paid. The primary purpose of this practice is to
permit the Portfolio to be as fully invested as practicable in municipal
securities while preserving the necessary flexibility and liquidity to meet
unanticipated redemptions. In this regard, the Portfolio acquires stand-by
commitments solely to facilitate portfolio liquidity and does not exercise its
rights thereunder for trading purposes. Stand-by commitments involve certain
expenses and risks, including the inability of the issuer of the commitment to
pay for the securities at the time the commitment is exercised,
non-marketability of the commitment, and differences between the maturity of the
underlying security and the maturity of the commitment. The Portfolio's policy
is to

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enter into stand-by commitment transactions only with municipal securities
dealers, which are determined to present minimal credit risks.

The acquisition of a stand-by commitment does not affect the valuation or
maturity of the underlying municipal securities, which continue to be valued in
accordance with the amortized cost method. Stand-by commitments acquired by the
Portfolio are valued at zero in determining net asset value. When the Portfolio
pays directly or indirectly for a stand-by commitment, its cost is reflected as
unrealized depreciation for the period during which the commitment is held.
Stand-by commitments do not affect the average weighted maturity of the
Portfolio's portfolio of securities.

OTHER MUNICIPAL OBLIGATIONS Variable Rate Demand Notes are municipal bonds with
maturities of up to 40 years. These instruments have a demand feature that
permits the holder to sell the instruments back to the issuer. A holder of these
instruments may exercise the demand feature at predetermined intervals, usually
daily or weekly. The interest rate on these securities mirrors prevailing
interest rates. Tender option bonds have relatively long maturities and fixed
rates of interest. Under an agreement with a third party financial institution,
a holder of these bonds may tender them to the institution and receive the face
value of the bonds. A holder may exercise this option at periodic intervals,
usually six months to a year.

ALTERNATIVE MINIMUM TAX Municipal securities are also categorized according to
(1) whether the interest is or is not included in the calculation of alternative
minimum taxes for individuals and corporations, (2) whether the costs of
acquiring or carrying the bonds are or are not deductible in part by banks and
other financial institutions, and (3) other criteria relevant for Federal income
tax purposes. Due to the increasing complexity of the Code and related
requirements governing the issuance of tax-exempt bonds, industry practice has
uniformly required as a condition to the issuance of such bonds, but
particularly for revenue bonds, an opinion of nationally recognized bond counsel
as to the tax-exempt status of interest on the bonds.

4. ZERO COUPON SECURITIES

Government Portfolio may invest in zero-coupon securities such as Treasury bills
and separately traded principal and interest components of Treasury Securities
issued or guaranteed under the U.S. Treasury's Separate Trading of Registered
Interest and Principal of Securities ("STRIPS") program. These securities are
sold at original issue discount and pay no interest to holders prior to
maturity. Because of this, zero-coupon securities may be subject to greater
fluctuation of market value than the other securities in which the Portfolios
may invest. All zero-coupon securities in which the Portfolio invests will have
a maturity of less than 13 months.

The Portfolio must include a portion of the original issue discount of
zero-coupon securities, if any, as income even though these securities do not
pay any interest until maturity. Because the Portfolio distributes all of its
net investment income, the Portfolio may have to sell portfolio securities to
distribute imputed income, which may occur at a time when the Adviser would not
have chosen to sell such securities and which may result in a taxable gain or
loss.

5. FEDERAL HOME LOAN MORTGAGE CORPORATION SECURITIES

Each Portfolio is currently prohibited from purchasing any security issued by
the Federal Home Loan Mortgage Corporation. This does not prohibit the
Portfolios from entering into repurchase agreements collateralized with
securities issued by the Federal Home Loan Mortgage Corporation.

6. INVESTMENT COMPANY SECURITIES

In connection with managing their cash positions, the Portfolios may invest in
the securities of other investment companies that are money market funds within
the limits proscribed by the 1940 Act. Under normal circumstances, each
Portfolio may invest up to 15% of its assets in money market funds. Each
Portfolio only invests in money market funds when it has excess cash and the
Adviser believes that the investment is in the best interest of the Portfolio.
In addition to a Portfolio's expenses (including the various fees), as a
shareholder in another investment company, a Portfolio bears its pro-rata
portion of the other investment company's expenses (including fees). Those

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expenses are not part of the Portfolio's expense ratio, but rather are reflected
in the yield of the investment in the money market fund.

7. GENERAL RISKS

INTEREST RATE RISK Changes in interest rates affect the market value of the
interest-bearing fixed income securities held by a Portfolio. There is normally
an inverse relationship between the market value of securities sensitive to
prevailing interest rates and actual changes in interest rates. The longer the
remaining maturity (and duration) of a security, the more sensitive the security
is to changes in interest rates. All fixed income securities, including
Government Securities, can change in value when there is a change in interest
rates.

CREDIT RISK A Portfolio's investment in fixed income securities is subject to
credit risk relating to the financial condition of the issuers of the securities
that each Portfolio holds. Credit risk is the risk that a counterparty to a
transaction will be unable to honor its financial obligation. To limit credit
risk, each Portfolio only invests in securities rated in the highest rating
category of an NRSRO or those that are unrated and deemed to be of comparable
credit quality by the Adviser.

ASSET BACKED SECURITIES The value of asset backed securities may be
significantly affected by changes in interest rates, the markets' perception of
issuers, the structure of the securities and the creditworthiness of the parties
involved. The ability of a Portfolio to successfully utilize asset backed
securities depends, in part, upon the ability of the Adviser to forecast
interest rates and other economic factors correctly. Some asset backed
securities have structures that make their reaction to interest rate changes and
other factors difficult to predict.

Prepayments of principal of asset backed securities by borrowers or foreclosures
on the borrowers affect the average life of the asset-backed securities.
Prepayments may be triggered by various factors, including the level of interest
rates, general economic conditions, the location and age of assets underlying
the security and other social and demographic conditions. In periods of rising
interest rates, the prepayment rate tends to decrease, lengthening the average
life of a pool of the asset backed securities. In periods of falling interest
rates, the prepayment rate tends to increase, shortening the average life of a
pool of asset-backed securities. The volume of prepayments of principal in the
assets underlying a particular asset backed security will influence the yield of
that security and a Portfolio's yield. To the extent that a Portfolio purchases
asset backed securities at a premium, unscheduled prepayments, which are made at
par, result in a loss equal to any unamortized premium.

D. REPURCHASE AGREEMENTS

1. GENERAL

Each Portfolio may enter into repurchase agreements. Repurchase agreements are
transactions in which a Portfolio purchases securities from a bank or securities
dealer and simultaneously commits to resell the securities to the bank or dealer
at an agreed-upon date and at a price reflecting a market rate of interest
unrelated to the purchased security. During the term of a repurchase agreement,
the Portfolio's custodian, subcustodian or tri-party custodian maintains
possession of the purchased securities and any underlying collateral, which is
maintained at not less than 100% of the repurchase price. Repurchase agreements
allow a Portfolio to earn income for periods as short as overnight, while
retaining the flexibility to pursue longer-term investments.

2. RISKS

Repurchase agreements involve credit risk. In the event that bankruptcy,
insolvency or similar proceedings are commenced against a counterparty, a
Portfolio may have difficulties in exercising its rights to the underlying
securities. A Portfolio may incur costs and expensive time delays in disposing
of the underlying securities and it may suffer a loss. Failure by the other
party to deliver a security or currency purchased by or lent by a Portfolio may
result in a missed opportunity to make an alternative investment. Favorable
insolvency laws that allow a Portfolio, among other things, to liquidate the
collateral held in the event of the bankruptcy of the counterparty reduce
counterparty insolvency risk with respect to repurchase agreements. A Portfolio
will only enter a repurchase agreement with a seller that the Adviser believes
presents minimal credit risk.

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E. BORROWING

1. GENERAL

Each Portfolio may borrow money from banks for temporary or emergency purposes
in an amount up to 33 1/3% of a Portfolio's total assets. Each Portfolio may
borrow money for other purposes so long as such borrowings do not exceed 5% of a
Portfolio's total assets. The purchase of securities is prohibited if a
Portfolio's borrowing exceeds 5% or more of a Portfolio's total assets.

2. RISKS

The volume of prepayments of principal in the assets underlying a particular
asset backed security will influence the yield of that security and a
Portfolio's yield. To the extent that a Portfolio purchases asset backed
securities at a premium, unscheduled prepayments, which are made at par, result
in a loss equal to any unamortized premium.

F. WHEN-ISSUED SECURITIES

1. GENERAL

Each Portfolio may purchase securities offered on a when-issued or
delayed-delivery basis. When these transactions are negotiated, the price, which
is generally expressed in yield terms, is fixed at the time the commitment is
made, but delivery and payment for the securities take place at a later date.
Normally, the settlement date occurs within a certain period of time after the
transaction, but delayed settlements beyond that period may be negotiated.
During the period between a commitment and settlement, no payment is made for
the securities purchased by the purchaser and thus, no interest accrues to the
purchaser from the transaction. At the time a Portfolio makes the commitment to
purchase securities on a when-issued or delayed-delivery basis, the Portfolio
will record the transaction as a purchase and thereafter reflect the value each
day of such securities in determining its net asset value.

2. RISKS

At the time a Portfolio makes a commitment to purchase securities in this
manner, the Portfolio immediately assumes the risk of ownership, including the
risk that the value of the security may decline. The use of when-issued
transactions enables a Portfolio to protect against anticipated changes in
interest rates and prices, but may also increase the volatility of the
Portfolio's asset value per unit. Failure by a counterparty to deliver a
security purchased by a Portfolio on a when-issued or delayed-delivery basis may
result in a loss to the Portfolio or a missed opportunity to make an alternative
investment.

G. ILLIQUID SECURITIES

1. GENERAL

Each Portfolio may invest up to 10% of its net assets in illiquid securities.
The term "illiquid securities" means repurchase agreements not entitling the
holder to payment of principal within seven days and securities that are
illiquid by virtue of legal or contractual restrictions on resale or the absence
of a readily available market.

Certificates of deposit and other fixed time deposits that carry an early
withdrawal penalty or mature in greater than seven days are treated as illiquid
securities if there is no readily available market for the instrument.

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2. RISKS

Limitations on resale may have an adverse effect on the marketability of a
security and a Portfolio might also have to register a restricted security in
order to dispose of it, resulting in expense and delay. A Portfolio might not be
able to dispose of restricted or illiquid 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. Any security, including securities determined by the Adviser to
be liquid, can become illiquid.

3. DETERMINATION OF LIQUIDITY

The Core Trust Board has delegated the function of making determinations of
liquidity to the Adviser, pursuant to guidelines approved by the Board. The
Adviser determines and monitors the liquidity of the portfolio securities and
reports periodically on its decisions to the Board. The 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 for the security,
including the time needed to dispose of the security, the method of soliciting
offers, and the mechanics of the transfer.

An institutional market has developed for certain restricted securities.
Accordingly, contractual or legal restrictions on the resale of a security 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 or other exemptions, the Adviser may determine that the securities
are not illiquid.

3. INVESTMENT LIMITATIONS

Each Portfolio has adopted the following fundamental and nonfundamental
investment limitations. The investment objective of a Portfolio is fundamental.
Each Portfolio has also adopted a fundamental policy which provides that,
notwithstanding any other investment policy or restriction (whether fundamental
or not), the Portfolio may invest all of its assets in the securities of a
single pooled investment fund having substantially the same investment
objectives, policies and restrictions as the Portfolio, as applicable.

A fundamental policy of a Portfolio cannot be changed without the affirmative
vote of the lesser of: (1) 50% of the outstanding interests of a Portfolio; or
(2) 67% of the interests of a Portfolio present or represented at an
interestholders meeting at which the holders of more than 50% of the outstanding
interests in a Portfolio are present or represented. The Board may change a
nonfundamental policy of a Portfolio without interestholder approval.

For purposes of all investment policies of a Portfolio: (1) the term 1940 Act
includes the rules thereunder, SEC interpretations and any exemptive order upon
which the Portfolio may rely; and (2) the term Code includes the rules
thereunder, IRS interpretations and any private letter ruling or similar
authority upon which the Portfolio may rely.

Except as required by the 1940 Act or the Code, 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 shares will not be
considered a violation of the limitation.

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A. FUNDAMENTAL LIMITATIONS

GOVERNMENT PORTFOLIO

The Portfolio may not:

DIVERSIFICATION. With respect to 75% of its assets, purchase securities, other
than Government Securities, of any one issuer if more than 5% of the value of
the Portfolio's total assets would at the time of purchase be invested in any
one issuer.

CONCENTRATION. Purchase securities, other than Government Securities, if more
than 25% of the value of the Portfolio's total assets would be invested in
securities of issuers conducting their principal business activity in the same
industry, provided that consumer finance companies and industrial finance
companies are considered to be separate industries and that there is no limit on
the purchase of the securities of domestic commercial banks.

For purposes of concentration: (i) loan participations are considered to be
issued by both the issuing bank and the underlying corporate borrower; (ii)
utility companies are divided according to their services (for example, gas, gas
transmission, electric and telephone will each be considered a separate
industry); and (iii) financial service companies will be classified according to
the end users of their services, for example, automobile finance, bank finance
and diversified finance will each be considered a separate industry.

UNDERWRITING. Act as an underwriter of securities of other issuers, except to
the extent that, in connection with the disposition of portfolio securities, the
Portfolio may be deemed to be an underwriter for purposes of the Securities Act
of 1933.

REAL ESTATE. Purchase or sell real estate or any interest therein (including
limited partnership interests), except that the Portfolio may invest in debt
obligations secured by real estate or interests therein or issued by companies
that invest in real estate or interests therein.

COMMODITIES. Purchase or sell physical commodities or contracts relating to
physical commodities, provided that currencies and currency-related contracts
will not be deemed to be physical commodities.

BORROWING. Borrow money, except for temporary or emergency purposes (including
the meeting of redemption requests). Total borrowings may not exceed 33 1/3% of
the Portfolio's total assets and borrowing for purposes other than meeting
redemptions may not exceed 5% of the value of the Portfolio's total assets.
Outstanding borrowings in excess of 5% of the value of the Portfolio's total
assets must be repaid before any subsequent investments are made by the
Portfolio.

SENIOR SECURITIES. Issue senior securities except pursuant to Section 18 of the
1940 Act and except that the Portfolio may borrow money subject to investment
limitations specified in the Portfolio's Prospectus.

LENDING. Make loans, except that the Portfolio may: (i) purchase debt securities
which are otherwise permissible investments, (ii) enter into repurchase
agreements and (iii) lend portfolio securities, but not in an amount greater
than 33 1/3% of the value of the Portfolio's total assets.

PLEDGING. Pledge, mortgage or hypothecate its assets, except to secure permitted
indebtedness. Collateralized loans of securities are not deemed to be pledges or
hypothecations for this purpose.

OPTIONS. Write put and call options.

INVESTING FOR CONTROL. Invest for the purpose of exercising control over any

person.

RESTRICTED SECURITIES. Purchase restricted securities.

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TREASURY CASH PORTFOLIO, GOVERNMENT CASH PORTFOLIO, CASH PORTFOLIO AND MUNICIPAL
CASH PORTFOLIO

Each Portfolio may not:

DIVERSIFICATION. With respect to 75% of its assets, purchase a security other
than a 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.

CONCENTRATION. 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 having their principal business activities in the same
industry; provided, however, that there is no limit on investments in Government
Securities.

UNDERWRITING. 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.

REAL ESTATE. Purchase or sell real estate or any interest therein, except that
the Portfolio may invest in debt obligations secured by real estate or interests
therein or issued by companies that invest in real estate or interests therein.

BORROWING. Borrow money, except for temporary or emergency purposes (including
the meeting of redemption requests) and for entering into reverse repurchase
agreements, provided that borrowings do not exceed 33 1/3% of the value of the
Portfolio's total assets.

SENIOR SECURITIES. Issue senior securities except as appropriate to evidence
indebtedness that the Portfolio is permitted to incur, and provided that the
Portfolio may issue shares of additional series or classes that the Trustees may
establish.

LENDING. Make loans, except for loans of portfolio securities, through the use
of repurchase agreements, and through the purchase of debt securities that are
otherwise permitted investments.

THRIFT INVESTOR LIMITATIONS. With respect to Government Cash Portfolio, purchase
or hold any security that: (i) a Federally chartered savings association may not
invest in, sell, redeem, hold or otherwise deal pursuant to law or regulation,
without limit as to percentage of the association's assets; and (ii) pursuant to
12 C.F.R. Section 566.1 would cause shares of the Portfolio not to be deemed to
be short term liquid assets when owned by Federally chartered savings
associations.

B. NONFUNDAMENTAL LIMITATIONS

GOVERNMENT PORTFOLIO

The Portfolio may not:

DIVERSIFICATION. With respect to 100% of its assets, purchase a security other
than a 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, unless the
investment is permitted by Rule 2a-7 under the 1940 Act.

SECURITIES WITH VOTING RIGHTS. Purchase securities having voting rights, except
the Portfolio may invest in securities of other investment companies to the
extent permitted by the 1940 Act.

MARGIN; SHORT SALES. Purchase securities on margin, or make short sales of
securities, except for the use of short-term credit necessary for the clearance
of purchases and sales of portfolio securities.

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LIQUIDITY. Acquire securities or invest in repurchase agreements with respect to
any securities if, as a result, more than 10% of the Portfolio's net assets
(taken at current value) would be invested in repurchase agreements not
entitling the holder to payment of principal within seven days and in securities
that are illiquid by virtue of legal or contractual restrictions on resale or
the absence of a readily available market.

TREASURY CASH PORTFOLIO, GOVERNMENT CASH PORTFOLIO, CASH PORTFOLIO AND MUNICIPAL
CASH PORTFOLIO

Each Portfolio may not:

BORROWING. Purchase securities for investment while any borrowing equaling 5% or
more of the Portfolio's total assets is outstanding; and if at any time the
Portfolio's borrowings exceed the Portfolio's investment limitations due to a
decline in net assets, such borrowings will be promptly (within three days)
reduced to the extent necessary to comply with the limitations. Borrowing for
purposes other than meeting redemption requests will not exceed 5% of the value
of the Portfolio's total assets.

SECURITIES WITH VOTING RIGHTS. Purchase securities that have voting rights,
except the Portfolio may invest in securities of other investment companies to
the extent permitted by the 1940 Act.

C. INVESTMENTS BY FINANCIAL INSTITUTIONS

1. INVESTMENT BY INTERESTHOLDERS THAT ARE BANKS - GOVERNMENT CASH PORTFOLIO

Government Cash Portfolio invests only in instruments which, if held directly by
a bank or bank holding company organized under the laws of the United States or
any state thereof, would be assigned to a risk-weight category of no more than
20% under the current risk based capital guidelines adopted by the Federal bank
regulators (the "Guidelines"). In the event that the Guidelines are revised, the
Portfolio's investment portfolio will be modified accordingly, including by
disposing of portfolio securities or other instruments that no longer qualify
under the Guidelines. In addition, the Portfolio does not intend to hold any
securities or instruments that would be subject to restriction as to amount held
by a National bank under Title 12, Section 24 (Seventh) of the United States
Code. If the Portfolio includes any instruments that would be subject to a
restriction as to amount held by a National bank, investment in the Portfolio
may be limited.

The Guidelines provide that shares of an investment fund are generally assigned
to the risk-weight category applicable to the highest risk-weighted security or
instrument that the fund is permitted to hold. Accordingly, Portfolio interests
should qualify for a 20% risk-weighting under the Guidelines. The Guidelines
also provide that, in the case of an investment fund whose shares should qualify
for a risk-weighting below 100% due to limitations on the assets which it is
permitted to hold, bank examiners may review the treatment of the shares to
ensure that they

11
<PAGE>

have been assigned an appropriate risk-weight. In this connection, the
Guidelines provide that, regardless of the composition of an investment fund's
assets, shares of a fund may be assigned to the 100% risk-weight category if it
is determined that the Portfolio engages in activities that appear to be
speculative in nature or has any other characteristics that are inconsistent
with a lower risk-weighting. The Adviser has no reason to believe that such a
determination would be made with respect to the Portfolio. There are various
subjective criteria for making this determination and, therefore, it is not
possible to provide any assurance as to how Portfolio interests will be
evaluated by bank examiners.

Before acquiring an interest (directly or indirectly), prospective investors
that are banks or bank holding companies, particularly those that are organized
under the laws of any country other than the United States or of any state,
territory or other political subdivision of the United States, and prospective
investors that are U.S. branches and agencies of foreign banks or Edge
Corporations, should consult all applicable laws, regulations and policies, as
well as appropriate regulatory bodies, to confirm that an investment in
Portfolio interests is permissible and in compliance with any applicable
investment or other limits.

Interests held by national banks are generally required to be revalued
periodically and reported at the lower of cost or market value. Such shares may
also be subject to special regulatory reporting, accounting and tax treatment.
In addition, a bank may be required to obtain specific approval from its board
of directors before acquiring an interest (either directly or indirectly), and
thereafter may be required to review its investment for the purpose of verifying
compliance with applicable Federal banking laws, regulations and policies.

National banks generally must review their investment holdings at least
quarterly to ensure compliance with established bank policies and legal
requirements. Upon request, the Portfolios will make available to
interestholders information relating to the size and composition of their
portfolios.

2. INVESTMENTS BY INTERESTHOLDERS THAT ARE CREDIT UNIONS - GOVERNMENT
CASH PORTFOLIO AND TREASURY CASH PORTFOLIO

Government Cash Portfolio and Treasury Cash Portfolio limit their investments to
investments that are legally permissible for Federally chartered credit unions
under applicable provisions of the Federal Credit Union Act (including 12 U.S.C.
Section 1757(7), (8) and (15)) and the applicable rules and regulations of the
National Credit Union Administration (including 12 C.F.R. Part 703, Investment
and Deposit Activities), as such statutes and rules and regulations may be
amended. The Portfolios limit their investments to Government Securities
(including Treasury STRIPS) and repurchase agreements fully collateralized by
Government Securities. Certain Government Securities owned by a Portfolio may be
mortgage or asset backed, but no such security will be: (i) a stripped mortgage
backed security ("SMBS"); (ii) CMO or real estate mortgage investment conduit
("REMIC") that does not meet all of the tests outlined in 12 C.F.R. Section
703.100(e); or (iii) a residual interest in a CMO or REMIC. Each Portfolio may
also invest in reverse repurchase agreements in accordance with 12 C.F.R.
703.100(j) to the extent otherwise permitted herein and in the Part A.

3. INVESTMENTS BY INTERESTHOLDERS THAT ARE SAVINGS ASSOCIATIONS -
GOVERNMENT CASH PORTFOLIO

Government Cash Portfolio limits its investments to those legally permissible
for Federally chartered savings associations without limit as to percentage
under applicable provisions of the Home Owners' Loan Act (including 12 U.S.C.
Section 1464) and the applicable rules and regulations of the Office of Thrift
Supervision, as such statutes and rules and regulations may be amended. In
addition, the Portfolio limits its investments to those that are permissible for
an open-end investment company to hold and would permit shares of the investment
company to qualify as liquid assets under 12 C.F.R. Section 566.1(g) and as
short-term liquid assets under 12 C.F.R. Section 566.1(h).

12
<PAGE>

4. MANAGEMENT OF THE TRUST

A. TRUSTEES AND OFFICERS OF THE TRUST

The names of the Trustees and officers of the Trust, their position with the
Trust, address, date of birth and 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 (*). The Board
supervises each Portfolio's activities, monitors its contractual arrangements
with various service providers and decides upon matters of general policy.
<TABLE>
<S> <C>

NAME, POSITION WITH THE TRUST, PRINCIPAL OCCUPATION(S) DURING
AGE AND ADDRESS PAST 5 YEARS
........................................................... .........................................................
........................................................... .........................................................

John Y. Keffer,* Chairman & President Member and Director, Forum Financial Group, LLC (a
Born: July 15, 1942 mutual fund services holding company)
Two Portland Square Director, Forum Fund Services, LLC (Trust's underwriter)
Portland, ME 04101 Officer of six other investment companies for which
Forum Financial Group, LLC provides services

Costas Azariadis, Trustee Professor of Economics, University of California-Los
Born: February 15, 1943 Angeles
Department of Economics Visiting Professor of Economics, Athens University of
University of California Economics and Business 1998-1999
Los Angeles, CA 90024 Trustee of one other investment company for which Forum
Financial Group, LLC provides services

........................................................... .........................................................
........................................................... .........................................................
James C. Cheng, Trustee President, Technology Marketing Associates
Born: July 26, 1942 (marketing company for small and medium size businesses
27 Temple Street in New England)

Belmont, MA 02718 Trustee of one other investment company for which Forum
Financial Group, LLC provides services

J. Michael Parish, Trustee Partner, Thelen Reid & Preist LLP (law firm) since 1995
Born: November 9, 1943 Trustee, of one other investment company for which
40 West 57th Street Forum Financial Group, LLC provides services
New York, NY 10019
........................................................... .........................................................
........................................................... .........................................................
Anthony R. Fischer, Jr., Vice President Portfolio Manager, Forum Investment Advisors, LLC since
Born: April 15, 1948 1998
Two Portland Square President, Linden Asset Management, Inc. prior to 1998
Portland, ME 04101
........................................................... .........................................................
........................................................... .........................................................
David I. Goldstein, Vice President Director, Forum Administrative Services, LLC and
Born: August 3, 1961 Secretary, Forum Financial Group, LLC
Two Portland Square Managing Director and General Counsel, Forum Financial
Portland, ME 04101 Group, LLC 1991 to 2000
........................................................... .........................................................
........................................................... .........................................................
Ronald H. Hirsch, Treasurer Managing Director, Operations/Finance and
Born: October 14, 1943 Operations/Sales, Forum Financial Group, LLC since 1999
Two Portland Square Member of the Board - Citibank Germany 1991 - 1998
Portland, ME 04101 Officer of six other investment companies for which
Forum Financial Group, LLC provides services

Leslie K. Klenk, Secretary Counsel, Forum Financial Group, LLC since 1998
Born: August 24, 1964 Associate General Counsel, Smith Barney Inc. (brokerage
Two Portland Square firm) 1993 - 1998
Portland, ME 04101 Officer of two other investment companies for which
Forum Financial Group, LLC provides services

</TABLE>
13
<PAGE>

B. COMPENSATION OF TRUSTEES AND OFFICERS

Effective February 7, 2000, each Trustee of the Trust is paid a quarterly
retainer of $1,500 for his service to the Trust. In addition, each Trustee is
paid a fee of $750 for each Board meeting attended (whether in person or by
electronic communication). Trustees are also reimbursed for travel and related
expenses incurred in attending Board meetings. Mr. Keffer receives no
compensation (other than reimbursement for travel and related expenses) for his
service as Trustee of the Trust. No officer of the Trust is compensated by the
Trust, but officers are reimbursed for travel and related expenses incurred in
attending Board meetings held outside of Portland, Maine.

The following table sets forth the fees paid to each Trustee by the Portfolios
and the Fund Complex, which includes all series of Forum Funds and another
investment company for which Forum Financial Group, LLC provides services, for
the fiscal year ended August 31, 2000.

COMPENSATION TOTAL COMPENSATION FROM

TRUSTEE FROM TRUST TRUST AND FUND COMPLEX
.......................................... ........................................ ........................................
.......................................... ........................................ ........................................
Costas Azariadis $7,500 $17,800
.......................................... ........................................ ........................................
.......................................... ........................................ ........................................
J. Michael Parish $7,500 $17,800
.......................................... ........................................ ........................................
.......................................... ........................................ ........................................
James C. Cheng $7,500 $17,800
.......................................... ........................................ ........................................
.......................................... ........................................ ........................................
John Y Keffer None None

</TABLE>

5. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES

Treasury Cash Fund, Government Cash Fund and Cash Fund, separate series of
Monarch Funds, a Delaware business trust registered with the SEC as an open-end,
management investment company, invest all of their investable assets in Treasury
Cash Portfolio, Government Cash Portfolio and Cash Portfolio, respectively, and,
as of December 1, 2000, may be deemed to control those Portfolios. Treasury
Cash, Government Cash and Cash Fund each owned 66.09%, 89.20%, and 95.88% of the
interests in those respective Portfolios.

Daily Assets Government Fund, Daily Assets Treasury Obligations Fund, and Daily
Assets Municipal Fund, separate series of Forum Funds, a Delaware business trust
registered with the SEC as an open-end, management investment company, invest
all of their investable assets in Government Portfolio, Treasury Cash Portfolio,
and Municipal Cash Portfolio and, as of December 1, 2000, may be deemed to
control those Portfolios. Daily Assets Government Fund, Daily Assets Treasury
Obligations Fund, and Daily Assets Municipal Fund each owned 100%, 33.91%, and
100% of the interests in those respective Portfolios. As of the same date, Daily
Assets Cash Fund and Daily Assets Government Obligations Fund, separate series
of Forum Fund invested all of their investable assets in Cash Portfolio and
Government Cash Portfolio. Daily Assets Cash Fund and Daily Assets Government
Obligations Fund each owned 4.12% and 10.80% of the interests in those
respective Portfolios.

Monarch Funds and Forum Funds are located at Two Portland Square, Portland,
Maine 04101.

Each investment company that is registered under the 1940 Act and that invests
in a Portfolio has informed the Trust that whenever it or its separate series is
requested to vote on matters pertaining to a Portfolio, it will hold a meeting
of its shareholders and will cast its vote as instructed by its shareholders in
accordance with applicable law. This only applies to matters for which the
investment company would be required to have a shareholder meeting if it
directly held investment securities rather than invested in a Portfolio. It is
anticipated that any other similarly registered investment company (or series
thereof) that may in the future invest in a Portfolio will follow the same or a
similar practice.

As of December 1, 2000, the officers and trustees of the Trust as a group owned
less than 1% of the outstanding interests of each Portfolio.

14
<PAGE>

6. INVESTMENT ADVISORY AND OTHER SERVICES

A. INVESTMENT ADVISORY SERVICES

Forum Investment Advisors, LLC serves as investment adviser to each Portfolio
pursuant to an investment advisory agreement with the Trust. The Adviser 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, the 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 agreement or interested
persons of any such party, at a meeting called for the purpose of voting on the
agreement.

The investment advisory agreement provides that the Adviser shall not be liable
for any error of judgment or mistake of law in connection with its services,
except for willful misfeasance, bad faith or gross negligence in the performance
of the Adviser's duties or by reason of reckless disregard of the Adviser's
obligations and duties under the agreement.

The investment advisory agreement with respect to a Portfolio is terminable
without the payment of penalty, (1) 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 the Adviser; or (2) by the Adviser on 60 days' written
notice to the Trust. With respect to each Portfolio, the investment advisory
agreement terminates automatically upon its assignment.

The Adviser was established in 1987 and is indirectly wholly owned and
controlled by John Y. Keffer. In connection with the January 2, 1998 acquisition
of Linden Asset Management, Inc. ("Linden"), the former investment adviser of
each Portfolio (except Municipal Cash Portfolio which commenced operations in
June 1998 and Government Portfolio (formerly Treasury Portfolio) that was
managed by Les Berthy), the Adviser has entered into a consulting agreement with
a new company solely owned by Anthony R. Fischer, Jr., former owner, president
and sole director of Linden, under which Mr. Fischer continues to provide
portfolio management services to the Portfolios under the supervision of the
Adviser. Mr. Fischer has over 25 years experience in managing pools of assets.
He has managed the Portfolios' (and prior to September 1995, the Portfolios'
predecessor mutual funds') assets since October 1992. Prior thereto, he was a
Senior Vice President and Treasurer of United California Savings Bank, Santa
Ana, California from 1984 to 1989 and, immediately prior thereto, a Manager for
five years at PaineWebber Jackson & Curtis, New York, New York.

Table 1 in Appendix B shows for the past three fiscal years the dollar amount of
investment advisory fees payable by each Portfolio to the Adviser, the amount of
fees waived by the Adviser, and the actual fee paid by each Portfolio.

B. ADMINISTRATOR

Pursuant to an administration agreement with the Trust, FAdS 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 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 FAdS 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 a majority of voting securities of that
portfolio and, in either case, by a majority of the Trustees who are not parties
to the 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, (1) by the Board or by vote of a majority of
the Portfolio's outstanding voting securities (as defined in the 1940 Act)

15
<PAGE>

on 60 days' written notice to FAdS; or (2) by FAdS on 60 days' written notice to
the Trust. The administration agreement is not assignable by either party
without the written consent of the other party.

The administration agreement provides that FAdS shall not be liable for any
action or inaction in the administration of the Trust, except for willful
misfeasance, bad faith or gross negligence in the performance of FAdS' duties or
by reason of reckless disregard of FAdS' obligations and duties under the
agreement.

At the request of the Board, FAdS provides persons satisfactory to the Board to
serve as officers of the Trust. Those officers, as well as certain other
employees and Trustees of the Trust, may be directors, officers or employees of
FAdS, the Adviser, FFS or their affiliates.

Table 2 in Appendix B shows for the past three fiscal years the dollar amount of
administration fees payable by each Portfolio to FAdS, the amount of fees waived
by FAdS, and the actual fee paid by each Portfolio.

C. FUND ACCOUNTANT AND INTERESTHOLDER RECORDKEEPER

Pursuant to a portfolio and unitholder accounting agreement, FAcS acts as
interestholder recordkeeper and fund accountant for the Portfolios. This
agreement will continue in effect with respect to a Portfolio until terminated;
provided, that the continuance is specifically approved at least annually by the
Board. The agreement may be terminated with respect to a Portfolio at any time,
without the payment of any penalty by the Board or FAcS on 60 days' written
notice. The agreement may not be assigned by either party except with the
written consent of the other party.

Under its agreement, FAcS prepares and maintains books and records of each
Portfolio on behalf of the Trust that are required to be maintained under the
1940 Act, calculates the net asset value per share of each Portfolio (and each
investor therein) and prepares periodic reports to interestholders of the
Portfolios and the SEC. For services rendered to Treasury Cash Portfolio,
Government Cash Portfolio, and Cash Portfolio, FAcS receives a fee at an annual
rate of the lesser of 0.05% of the average daily net assets of each Portfolio or
$48,000. For services rendered to Government Portfolio and Municipal Cash
Portfolio, FAcS receives a fee of $48,000 per portfolio. Should a Portfolio have
greater than five interestholders, FAcS will receive an annual fee of $6,000 per
every five additional interestholders. In addition, FAcS is paid an additional
$1,000 per month with respect to tax-free money market portfolios such as
Municipal Cash Portfolio, Portfolios with more than 25% of their total assets
invested in asset backed securities, Portfolios that have more than 100 security
positions and Portfolios that have a monthly portfolio turnover rate of 10% or
greater.

FAcS is required to use its best judgment and efforts in rendering its services
and is not liable to the Trust for any action or inaction in the absence of bad
faith, willful misconduct, gross negligence or reckless disregard of its duties
and obligations under the agreement. FAcS is not responsible or liable for any
failure or delay in performance of its fund accounting obligations arising out
of or caused, directly or indirectly, by circumstances beyond its reasonable
control and the Trust has agreed to indemnify and hold harmless FAcS, its
employees, agents, officers and directors against and from any and all claims,
demands, actions, suits, judgments, liabilities, losses, damages, costs,
charges, counsel fees and other expenses of every nature and character arising
out of or in any way related to FAcS' actions taken or failures to act with
respect to a Portfolio or based, if applicable, upon information, instructions
or requests with respect to a Portfolio given or made to FAcS by an officer of
the Trust duly authorized. This indemnification does not apply to FAcS actions
taken or failures to act in cases of FAcS' own bad faith, willful misconduct or
gross negligence.

Table 3 in Appendix B shows for the part three fiscal years the dollar amount of
accounting fees payable by each Portfolio to FAcS, the amount of fees waived by
FAcS, and the actual fee paid by each Portfolio.

16
<PAGE>

D. CUSTODIAN

As custodian, pursuant to an agreement with Core Trust, Forum Trust, LLC
("Custodian") safeguards and controls each Portfolio's cash and securities,
determines income and collects interest on Portfolio investments. The Custodian
may employ subcustodians to provide custody of a Portfolio's domestic and
foreign assets. The Custodian is located at Two Portland Square, Portland, ME
04101.

For its services, the Custodian receives an annualized percentage of the average
daily net assets of the Portfolios. Each Portfolio also pays an annual domestic
custody fee as well as certain other transaction fees. The fees are accrued
daily by the Portfolios and are paid monthly based on average net assets and
transactions for the previous month.

E. SUBCUSTODIAN

Union Bank of California, N.A. serves as subcustodian of the Portfolio. The
Subcustodian is located at 445 South Figueroa Street, 5th Floor, Los Angeles, CA
90071.

F. INDEPENDENT AUDITORS

KPMG LLP, 99 High Street, Boston, MA 02110, serves as independent auditor for
the Portfolios and has so served since the Portfolios commenced operations. The
auditors audit the annual financial statements of the Portfolios. The auditors
also review certain regulatory filings of the Portfolios and the Portfolios' tax
returns.

F. EXPENSES

The Trust pays all of its expenses, including: interest charges, taxes,
brokerage fees and commissions; expenses of issue, repurchase and redemption of
shares; premiums of insurance for the Trust, its Trustees and officers and
fidelity bond premiums; applicable fees, interest charges and expenses of third
parties, including the Trust's administrators, investment advisers, custodians,
interestholder recordkeepers and fund accountant; fees of pricing, interest,
distribution, credit and other reporting services; costs of membership in trade
associations; telecommunications expenses; funds transmission expenses;
auditing, legal and compliance expenses; costs of forming the Trust and
maintaining its existence; costs of preparing and printing the Trust's offering
memoranda and interestholder reports and delivering them to interestholders;
expenses of meetings of interestholders and any proxy solicitations therefore;
costs of maintaining books and accounts and preparing tax returns; costs of
reproduction, stationery and supplies; fees and expenses of the Trust's
Trustees; compensation of the Trust's officers and employees and costs of other
personnel (who may be employees of the Adviser, FAdS or their respective
affiliates) performing services for the Trust; costs of Trustee meetings; SEC
registration fees and related expenses (if any); and state or foreign securities
laws registration fees and related expenses (if any).

7. BROKERAGE ALLOCATION AND OTHER PRACTICES

Purchases and sales of portfolio securities for each Portfolio usually are
principal transactions. Portfolio securities are normally purchased directly
from the issuer or from an underwriter or market maker for the securities.
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 asked price.
There are usually no brokerage commissions paid for any purchases. Core Trust
does not anticipate that the Portfolios will pay any amounts of brokerage
commissions. However, in the event a Portfolio pays brokerage commissions or
other transaction-related compensation, the payments may be made to
broker-dealers who pay expenses of the Portfolio that the Portfolio would
otherwise be obligated to pay itself. Any transaction for which a Portfolio pays
transaction-related compensation will be effected at the best price and
execution available, taking into account the amount of any payments made on
behalf of the Portfolio by the broker-dealer effecting the transaction.

Allocations of transactions to dealers and the frequency of transactions are
determined for each Portfolio by the Adviser in its best judgment and in a
manner deemed to be in the best interest of interestholders of that Portfolio

17
<PAGE>

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. The Adviser monitors the creditworthiness of counterparties to a
Portfolio's transactions and intends to enter into a transaction only when it
believes that the counterparty presents minimal and appropriate credit risks. No
portfolio transactions are executed with the Adviser or any of its affiliates.

Table 4 of Appendix B provides details of a Portfolio's investment in dealers
(or their parent companies) used to effect Portfolio transactions as of August
31, 2000.

No Portfolio paid brokerage commissions during fiscal years ended August 31,
1998, 1999 and 2000.

8. PURCHASE, REDEMPTION AND PRICING OF SECURITIES

Each Portfolio does not determine net asset value on the following holidays in
the United States: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day,
Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans' Day,
Thanksgiving Day and Christmas Day.

Pursuant to Rule 2a-7 under the 1940 Act, the Board has established procedures
to stabilize each Portfolio's net asset value at $1.00 per unit. These
procedures include a review of the extent of any deviation of net asset value
per share as a result of fluctuating interest rates, based on available market
rates, from each Portfolio's $1.00 amortized cost price per unit. Should that
deviation exceed 1/2 of 1%, the Board will consider whether any action should be
initiated to eliminate or reduce material dilution or other unfair results to
interestholders. Such action may include redemption of units in kind, selling
portfolio securities prior to maturity, reducing or withholding distributions
and utilizing a net asset value per unit as determined by using available market
quotations.

In determining the appropriate market value of portfolio investments, the
Portfolios may employ outside organizations, which may use a matrix or formula
method that takes into consideration market indices, matrices, yield curves and
other specific adjustments. This may result in the securities being valued at a
price different from the price that would have been determined had the matrix or
formula method not been used. All cash, receivables and current payables are
carried at their face value.

9. TAX STATUS

Each Portfolio is 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.
Each Portfolio intends to conduct its operations so that interestholders that
intend to qualify as regulated investment companies under the Code will be able
to satisfy all those requirements (assuming that the interestholder invests all
of its assets in a Portfolio).

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.

18
<PAGE>

10. PLACEMENT AGENT

Forum Fund Services, LLC, Two Portland Square, Portland, Maine 04101, serves as
the Trust's placement agent. FFS does not receive compensation for such
placement agent services.

11. FINANCIAL STATEMENTS

The financial statements of the Portfolios for the year ended August 31, 2000,
which are included in the Portfolios' annual report, are incorporated herein by
reference. These financial statements include the schedule of investments,
statements of assets and liabilities, statements of operations, statements of
changes in net assets, financial highlights, notes and independent auditors'
reports.

19
<PAGE>

A-3
PART B

CORE TRUST (DELAWARE)

PRIVATE PLACEMENT MEMORANDUM

STATEMENT OF ADDITIONAL INFORMATION

APPENDIX A - DESCRIPTION OF SECURITIES RATINGS

A. CORPORATE BONDS

1. MOODY'S

AAA Bonds that are rated Aaa are judged 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.

AA Bonds that 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 that make
the long-term risk appear somewhat larger than the Aaa securities.

NOTE Moody's applies numerical modifiers 1, 2, and 3 in each generic
rating classification from Aa through Caa. The modifier 1 indicates
that the obligation ranks in the higher end of its generic rating
category; the modifier 2 indicates a mid-range ranking; and the
modifier 3 indicates a ranking in the lower end of that generic
rating category.

2. S&P

AAA An obligation rated AAA has the highest rating assigned by Standard
& Poor's. The obligor's capacity to meet its financial commitment
on the obligation is extremely strong.

AA An obligation rated AA differs from the highest-rated obligations
only in small degree. The obligor's capacity to meet its financial
commitment on the obligation is very strong.

NOTE Plus (+) or minus (-). The ratings from AA to CCC may be modified
by the addition of a plus or minus sign to show relative standing
within the major rating categories.

The `r' symbol is attached to the ratings of instruments with
significant noncredit risks. It highlights risks to principal or
volatility of expected returns that are not addressed in the credit
rating. Examples include: obligations linked or indexed to
equities, currencies, or commodities; obligations exposed to severe
prepayment risk such as interest-only or principal-only mortgage
securities; and obligations with unusually risky interest terms,
such as inverse floaters.

A-1
<PAGE>

3. FITCH

AAA Highest credit quality. `AAA' ratings denote the lowest expectation
of credit risk. They are assigned only in case of exceptionally
strong capacity for timely payment of financial commitments. This
capacity is highly unlikely to be adversely affected by foreseeable
events.

AA Very high credit quality. `AA' ratings denote a very low expectation
of credit risk. They indicate very strong capacity for timely payment
of financial commitments. This capacity is not significantly
vulnerable to foreseeable events.

B. SHORT TERM RATINGS

1. MOODY'S

Moody's employs the following three designations, all judged to be investment
grade, to indicate the relative repayment ability of rated issuers:

PRIME-1 Issuers rated Prime-1 (or supporting institutions) have a
superior ability for repayment of senior short-term debt
obligations. Prime-1 repayment ability will often be evidenced
by many of the following characteristics:
o Leading market positions in well-established industries.
o High rates of return on funds employed.
o Conservative capitalization structure with moderate
reliance on debt and ample asset protection.
o Broad margins in earnings coverage of fixed financial
charges and high internal cash generation.
o Well-established access to a range of financial markets and
assured sources of alternate liquidity.

PRIME-2 Issuers rated Prime-2 (or supporting institutions) have a
strong ability for repayment of senior short-term debt
obligations. This will normally be evidenced by many of the
characteristics cited above but to a lesser degree. Earnings
trends and coverage ratios, while sound, may be more subject to
variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample
alternate liquidity is maintained.

NOT PRIME Issuers rated Not Prime do not fall within any of
the Prime rating categories.

2. S&P

A-1 A short-term obligation rated A-1 is rated in the highest
category by S&P. The obligor's capacity to meet its financial
commitment on the obligation is strong. Within this category,
certain obligations are designated with a plus sign (+). This
indicates that the obligor's capacity to meet its financial
commitment on these obligations is extremely strong.

A-2 A short-term obligation rated A-2 is somewhat more susceptible
to the adverse effects of changes in circumstances and economic
conditions than obligations in higher rating categories.
However, the obligor's capacity to meet its financial
commitment on the obligation is satisfactory.

A-2
<PAGE>

3. FITCH

F1 Obligations assigned this rating have the highest capacity for
timely repayment under Fitch's national rating scale for that
country, relative to other obligations in the same country. This
rating is automatically assigned to all obligations issued or
guaranteed by the sovereign state. Where issues possess a
particularly strong credit feature, a "+" is added to the
assigned rating.

F2 Obligations supported by a strong capacity for timely repayment
relative to other obligors in the same country. However, the
relative degree of risk is slightly higher than for issues
classified as `A1' and capacity for timely repayment may be
susceptible to adverse changes in business, economic, or
financial conditions.

A-3
<PAGE>

PART B

CORE TRUST (DELAWARE)

PRIVATE PLACEMENT MEMORANDUM

STATEMENT OF ADDITIONAL INFORMATION

APPENDIX B - MISCELLANEOUS TABLES

TABLE 1 - INVESTMENT ADVISORY FEES

GROSS FEE FEE WAIVED NET FEE PAID
TREASURY CASH PORTFOLIO

Year ended August 31, 2000 $140,443 0 $140,443
Year ended August 31, 1999 105,930 0 105,930
Year ended August 31, 1998 55,735 0 55,735

GOVERNMENT PORTFOLIO

Year ended August 31, 2000 16,754 16,754 0
Year ended August 31, 1999 20,197 0 20,197
Year ended August 31, 1998 23,813 0 23,813

GOVERNMENT CASH PORTFOLIO

Year ended August 31, 2000 288,058 0 288,058
Year ended August 31, 1999 303,532 0 303,532
Year ended August 31, 1998 238,861 0 238,861

CASH PORTFOLIO

Year ended August 31, 2000 565,516 0 565,516
Year ended August 31, 1999 266,660 0 266,660
Year ended August 31, 1998 158,715 0 158,715

MUNICIPAL CASH PORTFOLIO

Year ended August 31, 2000 10,882 10,882 0
Year ended August 31, 1999 14,330 0 14,330
Year ended August 31, 1998 1,937 0 1,937

</TABLE>

- B-1 -
<PAGE>

TABLE 2 - ADMINISTRATION FEES
<TABLE>
<S> <C> <C> <C>

GROSS FEE FEE WAIVED NET FEE PAID
TREASURY CASH PORTFOLIO

Year ended August 31, 2000 $212,726 $0 $212,726
Year ended August 31, 1999 153,011 0 153,011
Year ended August 31, 1998 74,964 29,678 45,286

GOVERNMENT PORTFOLIO

Year ended August 31, 2000 16,754 16,754 0
Year ended August 31, 1999 20,197 20,197 0
Year ended August 31, 1998 28,796 28,796 0

GOVERNMENT CASH PORTFOLIO

Year ended August 31, 2000 436,043 0 436,043
Year ended August 31, 1999 438,060 0 438,060
Year ended August 31, 1998 317,754 0 317,754

CASH PORTFOLIO

Year ended August 31, 2000 857,926 0 857,926
Year ended August 31, 1999 385,799 0 385,799
Year ended August 31, 1998 212,800 0 212,800

MUNICIPAL CASH PORTFOLIO

Year ended August 31, 2000 10,882 10,882 0
Year ended August 31, 1999 14,330 14,330 0
Year ended August 31, 1998 1,937 1,937 0
</TABLE>

<TABLE>

TABLE 3 - FUND ACCOUNTING FEES

<S> <C> <C> <C>
GROSS FEE FEE WAIVED NET FEE PAID
TREASURY CASH PORTFOLIO

Year ended August 31, 2000 $49,500 $0 $49,500
Year ended August 31, 1999 49,500 0 49,500
Year ended August 31, 1998 48,000 0 48,000

GOVERNMENT PORTFOLIO

Year ended August 31, 2000 49,500 16,000 33,500
Year ended August 31, 1999 49,500 39,899 9,601
Year ended August 31, 1998 48,000 37,946 10,054

GOVERNMENT CASH PORTFOLIO

Year ended August 31, 2000 49,500 0 49,500
Year ended August 31, 1999 49,500 0 49,500
Year ended August 31, 1998 48,000 0 48,000

CASH PORTFOLIO

Year ended August 31, 2000 49,500 0 49,500
Year ended August 31, 1999 49,500 0 49,500
Year ended August 31, 1998 48,000 0 48,000

MUNICIPAL CASH PORTFOLIO

Year ended August 31, 2000 61,500 61,500 0
Year ended August 31, 1999 49,500 46,497 3,003
Year ended August 31, 1998 8,800 8,800 0
</TABLE>

TABLE 4 - PORTFOLIO HOLDINGS IN BROKER/DEALERS

CASH PORTFOLIO VALUE
Bank of America $95,000,000
Bear Stearns $75,000,000

- B-2 -

<PAGE>
PART C
OTHER INFORMATION

ITEM 23. EXHIBITS

(a) Trust Instrument of Registrant dated November 1, 1994 as amended and
restated November 1, 1999 (Exhibit incorporated by reference as filed
in Amendment No. 19 via EDGAR on December 29, 1999 accession number
0001004402-99-000483).

(b) Not applicable.

(d) Investment Advisory Agreement between Registrant and Forum Investment
Advisors, LLC relating to Treasury Cash Portfolio, Government
Portfolio, Government Cash Portfolio, Cash Portfolio and Municipal Cash
Portfolio dated December 30, 1997 (Exhibit incorporated by reference as
filed in Amendment No. 18 via EDGAR on September 30, 1999, accession
number 0001004402-99-000394).

(e) Not required.

(f) Not applicable.

(g) (1) Custodial Services Agreement between Registrant and Forum Trust,
LLC dated as of the 1st day of July, 2000 (filed herewith).

(2) Subcustodian Agreement between Union Bank of California, N.A. and
Forum Trust, LLC dated as of the 1st day of July, 2000 (filed
herewith).

(h) (1) Administration Agreement between Registrant and Forum
Administrative Services, LLC relating to Treasury Cash Portfolio,
Government Portfolio, Government Cash Portfolio, Cash Portfolio and
Municipal Cash Portfolio dated December 1, 1997 (Exhibit incorporated
by reference as filed in Amendment No. 18 via EDGAR on September 30,
1999, accession number 0001004402-99-000394).

(2) Fund Portfolio and Unitholder Accounting Agreement between Registrant
and Forum Accounting Services, LLC relating Treasury Cash Portfolio,
Government Portfolio, Government Cash Portfolio, Cash Portfolio and
Municipal Cash Portfolio dated as of June 1, 1997 and amended February
11, 1999 (Exhibit incorporated by reference as filed in Amendment No.
17 via EDGAR on February 12, 1999 accession number
0001004402-99-000129).

(3) Placement Agent Agreement between Registrant and Forum Fund Services,
LLC relating to Treasury Cash Portfolio, Government Portfolio,
Government Cash Portfolio, Cash Portfolio and Municipal Cash Portfolio
dated as of February 28, 1999 (Exhibit incorporated by reference as
filed in Amendment No. 19 via EDGAR on December 29, 1999 accession
number 0001004402-99-000483).

(i) Not required.

(j) Independent Auditors' Report of KPMG LLP, Schedule of Investments,
Notes to Schedule of Investments, Statements of Assets and Liabilities,
Statements of Operations, Statements of Changes in Net Assets, and
Notes to Financial Statements for Treasury Cash Portfolio, Government
Portfolio, Government Cash Portfolio, Cash Portfolio and Municipal Cash
Portfolio dated August 31, 1999 (Exhibit incorporated by referenced as
filed in Annual Report of Forum Funds via EDGAR on November 5, 1999
accession number 0001004402-99-000432).

(k) Not required.

(l) Not applicable.

(m) Not applicable.

(n) Not applicable.

(p) Not required.

---------------
<PAGE>
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT

None.

ITEM 25. 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 agreement
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
agreement contained in this Registration Statement as Exhibit 5 and incorporated
herein by reference.

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 Securities Act of 1933 ("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,

2
<PAGE>

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 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 1933 Act 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 (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 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER

Forum Investment Advisors, LLC

The description of Forum Investment Advisors, LLC in Parts A and B of
this registration statement is incorporated by reference herein.

The following are the members of Forum Investment Advisors, LLC, Two
Portland Square, Portland, Maine 04101, including their business
connections, which are of a substantial nature.

Forum Trust, LLC, Member.

3
<PAGE>

Forum Trust is controlled indirectly by John Y. Keffer, Chairman and
President of the Registrant. Mr. Keffer is President of Forum Trust.
Mr. Keffer is also a director and/or officer of various registered
investment companies for which the various Forum Financial Group's
operating subsidiaries provide services.

The following are the officers of Forum Investment Advisors, LLC,
including their business connections that are of a substantial nature.
Each officer may serve as an officer of various registered investment
companies for which the Forum Financial Group provides services.
<TABLE>
<S> <C> <C>

Name Title Business Connection
.................................... ................................... ..................................
David I. Goldstein Directory and Secretary Forum Investment Advisors, LLC
................................... ..................................
................................... ..................................
Secretary Forum Financial Group, LLC
................................... ..................................
................................... ..................................
Officer Other Forum affiliated companies
.................................... ................................... ..................................
.................................... ................................... ..................................
Marc D. Keffer Assistant Secretary Forum Investment Advisors, LLC
................................... ..................................
................................... ..................................
Corporate Counsel Forum Financial Group, LLC
................................... ..................................
................................... ..................................
Officer Other Forum affiliated companies
</TABLE>

ITEM 27. PRINCIPAL UNDERWRITERS

(a) Forum Fund Services, LLC is the Registrant's placement agent.
Registrant has no underwriters.

(b) Not applicable.

ITEM 28. LOCATION OF ACCOUNTS 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., Forum Financial Corp. and
Forum Accounting Services, LLC, Two Portland Square, Portland, Maine 04101. 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 custodian, 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 26 hereof.

ITEM 29. MANAGEMENT SERVICES

Not applicable.

ITEM 30. UNDERTAKINGS

None.

4
<PAGE>

SIGNATURES

Pursuant to the requirements of the Investment Company Act of 1940, as amended,
the Registrant has duly caused this amendment to its registration statement to
be signed on its behalf by the undersigned, duly authorized, in the City of
Portland and the State of Maine on December 29, 2000.

CORE TRUST (DELAWARE)

By: /s/ John Y. Keffer
John Y. Keffer
President

5
<PAGE>

INDEX TO EXHIBITS

(g)(1) Custodial Services Agreement between Registrant and Forum Trust, LLC.

(g)(2) Subcustodian Agreement between Union Bank of California, N.A and Forum
Trust, LLC.

6
<PAGE>