MONARCH FUNDS
FUND ACCOUNTING AGREEMENT
AGREEMENT made as of the 11th day of February, 2003, by and between Monarch
Funds, a Massachusetts business trust, with its principal office and place of
business at Two Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxx 00000 (the "Trust"), and Forum
Accounting Services, LLC, a Delaware limited liability company with its
principal office and place of business at Xxx Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxx
00000 ("Forum").
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as an open-end management investment company and
may issue its shares of beneficial interest, no par value (the "Shares"), in
separate series and classes; and
WHEREAS, the Trust offers shares in various series as listed in Appendix A
hereto (each such series, together with all other series subsequently
established by the Trust and made subject to this Agreement in accordance with
Section 6, being herein referred to as a "Fund," and collectively as the
"Funds") and the Trust offers shares of various classes of each Fund as listed
in Appendix A hereto (each such class together with all other classes
subsequently established by the Trust in a Fund being herein referred to as a
"Class," and collectively as the "Classes"); and
WHEREAS, the Trust desires that Forum perform certain fund accounting
services for each Fund and Class thereof and Forum is willing to provide those
services on the terms and conditions set forth in this Agreement;
NOW THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, the Trust and Forum hereby agree as follows:
SECTION 1. APPOINTMENT; DELIVERY OF DOCUMENTS
(a) The Trust hereby appoints Forum, and Forum hereby agrees, to act as
fund accountant of the Trust for the period and on the terms set forth in this
Agreement.
(b) In connection therewith, the Trust has delivered to Forum copies of (i)
the Trust's Trust Instrument and Bylaws (collectively, as amended from time to
time, "Organic Documents"), (ii) the Trust's Registration Statement and all
amendments thereto filed with the U.S. Securities and Exchange Commission
("SEC") pursuant to the Securities Act of 1933, as amended (the "Securities
Act"), or the 1940 Act (the "Registration Statement"), (iii) the Trust's current
Prospectus and Statement of Additional Information of each Fund (collectively,
as currently in effect and as amended or supplemented, the "Prospectus") and
(iv) all procedures adopted by the Trust with respect to the Funds (i.e.,
repurchase agreement procedures), and shall promptly furnish Forum with all
amendments of or supplements to the foregoing. The Trust shall deliver to Forum
a certified copy of the resolution of the Board of Trustees of the Trust (the
"Board") appointing Forum and authorizing the execution and delivery of this
Agreement.
SECTION 2. DUTIES OF FORUM
(a) Forum and the Trust's administrator, Forum Administrative Services,
Limited Liability Company (the "Administrator"), may from time to time adopt
such procedures as they agree upon to implement the terms of this Section. With
respect to each Fund, Forum will perform the following services under this
Agreement:
(i) calculate the net asset value per share with the frequency prescribed
in each Fund's then current Prospectus;
(ii) calculate each item of income, expense, deduction, credit, gain and
loss, if any, as required by the Trust and in conformance with generally
accepted accounting principles ("GAAP"), the SEC's Regulation S-X (or any
successor regulation) and the Internal Revenue Code of 1986, as amended (or
any successor laws)(the "Code");
(iii) maintain each Fund's general ledger and record all income, expenses,
capital share activity and security transactions of each Fund;
(iv) calculate the yield, effective yield, tax equivalent yield and total
return for each Fund, and each Class thereof, as applicable, and such other
measure of performance as may be agreed upon between the parties hereto;
(v) provide the Trust and such other persons as the Administrator may
direct with the following reports (A) a current security position report,
(B) a summary report of transactions and pending maturities (including the
principal, cost, and accrued interest on each portfolio security in
maturity date order), and (C) a current cash position and projection
report;
(vi) prepare and record, as of each time when the net asset value of a Fund
is calculated or as otherwise directed by the Trust, either (A) a valuation
of the assets of the Fund (in accordance with the Trust's valuation
procedures) or (B) a calculation confirming that the market value of the
Fund's assets does not deviate from the amortized cost value of those
assets by more than a specified percentage;
(vii) make such adjustments over such periods as Forum deems necessary to
reflect over-accruals or under-accruals of estimated expenses or income;
(viii) request any necessary information from the Administrator and the
Trust's transfer agent and distributor in order to prepare, and prepare,
the Trust's Form N-SAR;
(ix) provide appropriate records to assist the Trust's independent
accountants and, upon approval of the Trust or the Administrator, any
regulatory body in any requested review of the Trust's books and records
maintained by Forum;
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(x) prepare semi-annual financial statements and oversee the production of
the semi-annual financial statements and any related report to the Trust's
shareholders prepared by the Trust or its investment advisers, as
applicable;
(xi) file the Funds' semi-annual financial statements with the SEC or
ensure that the Funds' semi-annual financial statements are filed with the
SEC;
(xii) provide information typically supplied in the investment company
industry to companies that track or report price, performance or other
information with respect to investment companies;
(xiii) provide the Trust or the Administrator with the data requested by
the Administrator that is required to update the Registration Statement;
(xiv) provide the Trust or independent accountants with all information
requested with respect to the preparation of the Trust's income, excise and
other tax returns;
(xv) prepare or prepare, execute and file all Federal income and excise tax
returns and state income and other tax returns, including any extensions or
amendments, each as agreed between the Trust and Forum;
(xvi) produce quarterly compliance reports for investment advisers, as
applicable, to the Trust and the Board and provide information to the
Administrator, investment advisers to the Trust and other appropriate
persons with respect to questions of Fund compliance;
(xvii) determine the amount of distributions to shareholders as necessary
to, among other things, maintain the qualification of each Fund as a
regulated investment company under the Code, and prepare and distribute to
appropriate parties notices announcing the declaration of dividends and
other distributions to shareholders;
(xviii) transmit to and receive from each Fund's transfer agent appropriate
data to on a daily basis and daily reconcile Shares outstanding and other
data with the transfer agent;
(xix) periodically reconcile all appropriate data with each Fund's
custodian;
(xx) verify investment trade tickets when received from an investment
adviser and maintain individual ledgers and historical tax lots for each
security; and
(xxi) perform such other recordkeeping, reporting and other tasks as may be
specified from time to time in the procedures adopted by the Board;
provided, that Forum need not begin performing any such task except upon 65
days' notice and pursuant to mutually acceptable compensation agreements.
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(b) Forum shall prepare and maintain on behalf of the Trust the following
books and records of each Fund, and each Class thereof, as applicable, pursuant
to Rule 31a-1 under the 1940 Act (the "Rule"):
(i) Journals containing an itemized daily record in detail of all purchases
and sales of securities, all receipts and disbursements of cash and all
other debits and credits, as required by subsection (b)(1) of the Rule;
(ii) Journals and auxiliary ledgers reflecting all asset, liability,
reserve, capital, income and expense accounts, as required by subsection
(b)(2) of the Rule (but not including the ledgers required by subsection
(b)(2)(iv);
(iii) A record of each brokerage order given by or on behalf of the Trust
for, or in connection with, the purchase or sale of securities, and all
other portfolio purchases or sales, as required by subsections (b)(5) and
(b)(6) of the Rule;
(iv) A record of all options, if any, in which the Trust has any direct or
indirect interest or which the Trust has granted or guaranteed and a record
of any contractual commitments to purchase, sell, receive or deliver any
property as required by subsection (b)(7) of the Rule;
(v) A monthly trial balance of all ledger accounts (except shareholder
accounts) as required by subsection (b)(8) of the Rule; and
(vi) Other records required by the Rule or any successor rule or pursuant
to interpretations thereof to be kept by open-end management investment
companies, but limited to those provisions of the Rule applicable to
portfolio transactions and as agreed upon between the parties hereto.
(c) The books and records maintained pursuant to Section 2(b) shall be
prepared and maintained in such form, for such periods and in such locations as
may be required by the 1940 Act. The books and records pertaining to the Trust
that are in possession of Forum shall be the property of the Trust. The Trust,
or the Trust's authorized representatives, shall have access to such books and
records at all times during Forum's normal business hours. Upon the reasonable
request of the Trust or the Administrator, copies of any such books and records
shall be provided promptly by Forum to the Trust or the Trust's authorized
representatives at the Trust's expense. In the event the Trust designates a
successor that shall assume any of Forum's obligations hereunder, Forum shall,
at the expense and direction of the Trust, transfer to such successor all
relevant books, records and other data established or maintained by Forum under
this Agreement.
(d) In case of any requests or demands for the inspection of the records of
the Trust maintained by Forum, Forum will endeavor to notify the Trust and to
secure instructions from an authorized officer of the Trust as to such
inspection. Forum shall abide by the Trust's instructions for granting or
denying the inspection; provided, however, that Forum may grant the
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inspection without instructions if Forum is advised by counsel to Forum that
failure to do so will result in liability to Forum.
SECTION 3. STANDARD OF CARE; RELIANCE
(a) Forum shall be under no duty to take any action except as specifically
set forth herein or as may be specifically agreed to by Forum in writing. Forum
shall use its best judgment and efforts in rendering the services described in
this Agreement. Forum shall not be liable to the Trust or any of the Trust's
shareholders for any action or inaction of Forum relating to any event
whatsoever in the absence of bad faith, willful misfeasance or gross negligence
in the performance of Forum's duties or obligations under this Agreement or by
reason of Forum's reckless disregard of its duties and obligations under this
Agreement.
(b) The Trust agrees to indemnify and hold harmless Forum, its employees,
agents, directors, officers and managers and any person who controls Forum
within the meaning of section 15 of the Securities Act or section 20 of the
Securities Exchange Act of 1934, as amended, ("Forum Indemnitees") against and
from any and all claims, demands, actions, suits, judgments, liabilities,
losses, damages, costs, charges, reasonable counsel fees and other expenses of
every nature and character arising out of or in any way related to Forum's
actions taken or failures to act with respect to a Fund that are consistent with
the standard of care set forth in Section 3(a) or based, if applicable, on good
faith reliance upon an item described in Section 3(d) (a "Claim"). The Trust
shall not be required to indemnify any Forum Indemnitee if, prior to confessing
any Claim against the Forum Indemnitee, Forum or the Forum Indemnitee does not
give the Trust written notice of and reasonable opportunity to defend against
the claim in its own name or in the name of the Forum Indemnitee.
(c) Forum agrees to indemnify and hold harmless the Trust, its employees,
agents, trustees and officers against and from any and all claims, demands,
actions, suits, judgments, liabilities, losses, damages, costs, charges,
reasonable counsel fees and other expenses of every nature and character arising
out of Forum's actions taken or failures to act with respect to a Fund that are
not consistent with the standard of care set forth in Section 3(a). Forum shall
not be required to indemnify the Trust if, prior to confessing any Claim against
the Trust, the Trust does not give Forum written notice of and reasonable
opportunity to defend against the claim in its own name or in the name of the
Trust.
(d) A Forum Indemnitee shall not be liable for any action taken or failure
to act in good faith reliance upon:
(i) the advice of the Trust or of counsel, who may be counsel to the Trust
or counsel to Forum;
(ii) any oral instruction which it receives and which it reasonably
believes in good faith was transmitted by the person or persons authorized
by the Board to give such oral instruction (Forum shall have no duty or
obligation to make any inquiry or effort of certification of such oral
instruction.);
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(iii) any written instruction or certified copy of any resolution of the
Board, and Forum may rely upon the genuineness of any such document or copy
thereof reasonably believed in good faith by Forum to have been validly
executed; or
(iv) any signature, instruction, request, letter of transmittal,
certificate, opinion of counsel, statement, instrument, report, notice,
consent, order, or other document reasonably believed in good faith by
Forum to be genuine and to have been signed or presented by the Trust or
other proper party or parties;
and no Forum Indemnitee shall be under any duty or obligation to inquire into
the validity or invalidity or authority or lack thereof of any statement, oral
or written instruction, resolution, signature, request, letter of transmittal,
certificate, opinion of counsel, instrument, report, notice, consent, order, or
any other document or instrument which Forum reasonably believes in good faith
to be genuine.
(e) Except to the extent it has breached the provisions of this Agreement,
Forum shall not be liable for the errors of other service providers to the
Trust, including the errors of pricing services (other than to pursue all
reasonable claims against the pricing service based on the pricing services'
standard contracts entered into by Forum) and errors in information provided by
an investment adviser (including prices and pricing formulas and the untimely
transmission of trade information), custodian or transfer agent to the Trust.
(f) With respect to Funds which do not value their assets in accordance
with Rule 2a-7 under the 1940 Act, notwithstanding anything to the contrary in
this Agreement, Forum shall not be liable to the Trust or any shareholder of the
Trust for (i) any loss to the Trust if an NAV Difference for which Forum would
otherwise be liable under this Agreement is less than or equal to 0.001 (1/10 of
1%) or (ii) any loss to a shareholder of the Trust if the NAV Difference for
which Forum would otherwise be liable under this Agreement is less than or equal
to 0.005 (1/2 of 1%) or if the loss in the shareholder's account with the Trust
is less than or equal to $10. Any loss for which Forum is determined to be
liable hereunder shall be reduced by the amount of gain which inures to
shareholders, whether to be collected by the Trust or not.
(g) For purposes of this Agreement, (i) the NAV Difference shall mean the
difference between the NAV at which a shareholder purchase or redemption should
have been effected ("Recalculated NAV") and the NAV at which the purchase or
redemption is effected, divided by the Recalculated NAV, (ii) NAV Differences
and any Forum liability therefrom are to be calculated each time a Fund's (or
class's) NAV is calculated, (iii) in calculating any NAV Difference for which
Forum would otherwise be liable under this Agreement for a particular NAV error,
Fund losses and gains shall be netted and (iv) in calculating any NAV Difference
for which Forum would otherwise be liable under this Agreement for a particular
NAV error that continues for a period covering more than one NAV determination,
Fund losses and gains for the period shall be netted.
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(h) Nothing contained herein shall be construed to require Forum to perform
any service that could cause Forum to be deemed an investment adviser for
purposes of the 1940 Act or the Investment Advisers Act of 1940, as amended, or
that could cause a Fund to act in contravention of a Portfolio's Prospectus or
any provision of the 1940 Act. Except with respect to Forum's duties as set
forth in Section 2 of this Agreement and except as otherwise specifically
provided herein, the Trust assumes all responsibility for ensuring that the
Trust complies with all applicable requirements of the Securities Act, the 1940
Act and any laws, rules and regulations of governmental authorities with
jurisdiction over the Trust. All references to any law in this Agreement shall
be deemed to include reference to the applicable rules and regulations
promulgated under authority of the law and all official interpretations of such
law or rules or regulations.
SECTION 4. COMPENSATION AND EXPENSES
(a) In consideration of the services provided by Forum pursuant to this
Agreement, the Trust shall pay Forum, with respect to each Fund, the fees set
forth in Clause (i) of Appendix B hereto. In consideration of the services
provided by Forum pursuant to Clause (iii) of Appendix B hereof, the Trust shall
pay Forum, with respect to each Fund, the fees set forth in Clause (ii) of
Appendix B hereto. In consideration of services provided by Forum to perform
certain functions, the Trust shall pay Forum, with respect to each Fund the fees
set forth in Clause (iii) of Appendix B hereto. Nothing in this Agreement shall
require Forum to perform any of the services listed in Section 2(a)(xiv) and
Clause (iii) of Appendix B hereto, as such services may be performed by the
Fund's independent accountant if appropriate.
All fees payable hereunder shall be accrued daily by the Trust. The fees
payable for the services listed in Clauses (i) and (iii) of Appendix B hereto
shall be payable monthly in advance on the first day of each calendar month for
services to be performed during the following calendar month. The fees payable
for the services listed in Clause (ii) and for all reimbursements as described
in Section 4(b) shall be payable monthly in arrears on the first day of each
calendar month (the first day of the calendar month after the Fund commences
operations in the case of the fees listed in Clause (ii) of Appendix B hereto)
for services performed during the prior calendar month. If fees payable for the
services listed in Clause (i) begin to accrue in the middle of a month or if
this Agreement terminates before the end of any month, all fees for the period
from that date to the end of that month or from the beginning of that month to
the date of termination, as the case may be, shall be prorated according to the
proportion that the period bears to the full month in which the effectiveness or
termination occurs. Upon the termination of this Agreement with respect to a
Fund, the Trust shall pay to Forum such compensation as shall be payable prior
to the effective date of termination.
(b) In connection with the services provided by Forum pursuant to this
Agreement, the Trust, on behalf of each Fund, agrees to reimburse Forum for the
expenses set forth in Clause (iv) of Appendix B hereto. In addition, the Trust,
on behalf of the applicable Fund, shall reimburse Forum for all expenses and
employee time (at 150% of salary) attributable to any review of the Trust's
accounts and records by the Trust's independent accountants or any regulatory
body outside of routine and normal periodic reviews. Should the Trust exercise
its
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right to terminate this Agreement, the Trust, on behalf of the applicable Fund,
shall reimburse Forum for all out-of-pocket expenses and employee time (at 150%
of salary) associated with the copying and movement of records and material to
any successor person and providing assistance to any successor person in the
establishment of the accounts and records necessary to carry out the successor's
responsibilities.
(d) Forum may, with respect to questions of law relating to its services
hereunder, apply to and obtain the advice and opinion of counsel to the Trust or
counsel to Forum. The costs of any such advice or opinion shall be borne by the
Trust.
SECTION 5. EFFECTIVENESS, DURATION, TERMINATION AND ASSIGNMENT
(a) This Agreement shall become effective with respect to each Fund or
Class on December 1, 1997. Upon effectiveness of this Agreement, it shall
supersede all previous agreements between the parties hereto covering the
subject matter hereof insofar as such Agreement may have been deemed to relate
to the Funds.
(b) This Agreement shall continue in effect with respect to a Fund until
terminated; provided, that continuance is specifically approved at least
annually (i) by the Board or by a vote of a majority of the outstanding voting
securities of the Fund and (ii) by a vote of a majority of Trustees of the Trust
who are not parties to this Agreement or interested persons of any such party
(other than as Trustees of the Trust).
(c) This Agreement may be terminated with respect to a Fund at any time,
without the payment of any penalty (i) by the Board on 60 days' written notice
to Forum or (ii) by Forum on 60 days' written notice to the Trust. The
obligations of Sections 3 and 4 shall survive any termination of this Agreement.
(d) This Agreement and the rights and duties under this Agreement otherwise
shall not be assignable by either Forum or the Trust except by the specific
written consent of the other party. All terms and provisions of this Agreement
shall be binding upon, inure to the benefit of and be enforceable by the
respective successors and assigns of the parties hereto.
SECTION 6. ADDITIONAL FUNDS AND CLASSES
In the event that the Trust establishes one or more series of Shares or one
or more classes of Shares after the effectiveness of this Agreement, such series
of Shares or classes of Shares, as the case may be, shall become Funds and
Classes under this Agreement. Forum or the Trust may elect not to make any such
series or classes subject to this Agreement.
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SECTION 7. CONFIDENTIALITY
Forum agrees to treat all records and other information related to the
Trust as proprietary information of the Trust and, on behalf of itself and its
employees, to keep confidential all such information, except that Forum may;
(a) prepare or assist in the preparation of periodic reports to
shareholders and regulatory bodies such as the SEC;
(b) provide information typically supplied in the investment company
industry to companies that track or report price, performance or other
information regarding investment companies; and
(c) release such other information as approved in writing by the Trust,
which approval shall not be unreasonably withheld and may not be withheld where
Forum may be exposed to civil or criminal contempt proceedings for failure to
release the information, when requested to divulge such information by duly
constituted authorities or when so requested by the Trust.
SECTION 8. FORCE MAJEURE
Forum shall not be responsible or liable for any failure or delay in
performance of its obligations under this Agreement arising out of or caused,
directly or indirectly, by circumstances beyond its reasonable control
including, without limitation, acts of civil or military authority, national
emergencies, labor difficulties, fire, mechanical breakdowns, flood or
catastrophe, acts of God, insurrection, war, riots or failure of the mails,
transportation, communication or power supply.
SECTION 9. ACTIVITIES OF FORUM
(a) Except to the extent necessary to perform Forum's obligations under
this Agreement, nothing herein shall be deemed to limit or restrict Forum's
right, or the right of any of Forum's managers, officers or employees who also
may be a trustee, officer or employee of the Trust, or persons who are otherwise
affiliated persons of the Trust to engage in any other business or to devote
time and attention to the management or other aspects of any other business,
whether of a similar or dissimilar nature, or to render services of any kind to
any other corporation, trust, firm, individual or association.
(b) Forum may subcontract any or all of its responsibilities pursuant to
this Agreement to one or more corporations, trusts, firms, individuals or
associations, which may be affiliated persons of Forum, who agree to comply with
the terms of this Agreement; provided, that any such subcontracting shall not
relieve Forum of its responsibilities hereunder. Forum may pay those persons for
their services, but no such payment will increase Forum's compensation from the
Trust.
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SECTION 10. COOPERATION WITH INDEPENDENT ACCOUNTANTS
Forum shall cooperate, if applicable, with each Fund's independent public
accountants and shall take reasonable action to make all necessary information
available to the accountants for the performance of the accountants' duties.
SECTION 11. SERVICE DAYS
Nothing contained in this Agreement is intended to or shall require Forum,
in any capacity under this Agreement, to perform any functions or duties on any
day other than a business day of the Trust or of a Fund. Functions or duties
normally scheduled to be performed on any day which is not a business day of the
Trust or of a Fund shall be performed on, and as of, the next business day,
unless otherwise required by law.
SECTION 12. LIMITATION OF SHAREHOLDER AND TRUSTEE LIABILITY
The trustees of the Trust and the shareholders of each Fund shall not be
liable for any obligations of the Trust or of the Funds under this Agreement,
and Forum agrees that, in asserting any rights or claims under this Agreement,
it shall look only to the assets and property of the Trust or the Fund to which
Forum's rights or claims relate in settlement of such rights or claims, and not
to the trustees of the Trust or the shareholders of the Funds.
SECTION 13. MISCELLANEOUS
(a) Neither party to this Agreement shall be liable to the other party for
consequential damages under any provision of this Agreement.
(b) Except for Appendix A to add new Funds and Classes in accordance with
Section 6, no provisions of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by both
parties hereto.
(c) This Agreement shall be governed by, and the provisions of this
Agreement shall be construed and interpreted under and in accordance with, the
laws of the State of Delaware.
(d) This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject matter
hereof, whether oral or written.
(e) This Agreement may be executed by the parties hereto on any number of
counterparts, and all of the counterparts taken together shall be deemed to
constitute one and the same instrument.
(f) If any part, term or provision of this Agreement is held to be illegal,
in conflict with any law or otherwise invalid, the remaining portion or portions
shall be considered severable and not be affected, and the rights and
obligations of the parties shall be construed and
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enforced as if the Agreement did not contain the particular part, term or
provision held to be illegal or invalid.
(g) Section headings in this Agreement are included for convenience only
and are not to be used to construe or interpret this Agreement.
(h) Notices, requests, instructions and communications received by the
parties at their respective principal places of business, or at such other
address as a party may have designated in writing, shall be deemed to have been
properly given.
(i) Notwithstanding any other provision of this Agreement, the parties
agree that the assets and liabilities of each Fund of the Trust are separate and
distinct from the assets and liabilities of each other Fund and that no Fund
shall be liable or shall be charged for any debt, obligation or liability of any
other Fund, whether arising under this Agreement or otherwise.
(j) No affiliated person, employee, agent, director, officer or manager of
Forum shall be liable at law or in equity for Forum's obligations under this
Agreement.
(k) Each of the undersigned warrants and represents that they have full
power and authority to sign this Agreement on behalf of the party indicated and
that their signature will bind the party indicated to the terms hereof and each
party hereto warrants and represents that this Agreement, when executed and
delivered, will constitute a legal, valid and binding obligation of the party,
enforceable against the party in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting the rights and remedies of creditors and secured parties.
(l) The terms "vote of a majority of the outstanding voting securities,"
"interested person" and "affiliated person" shall have the meanings ascribed
thereto in the 1940 Act.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf by and through their duly authorized
persons, as of the day and year first above written.
MONARCH FUNDS
By: /s/ XXXX X. XXXXXX
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Xxxx X. Xxxxxx
Chairman
FORUM ACCOUNTING SERVICES, LLC
By: /s/ XXXXXX X. XXXX
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Xxxxxx X. Xxxx
Director
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MONARCH FUNDS
FUND ACCOUNTING AGREEMENT
APPENDIX A
FUNDS AND CLASSES OF THE TRUST
AS OF FEBRUARY 11, 2003
DAILY ASSETS TREASURY CASH FUND
Preferred Shares
Universal Shares
Institutional Service Shares
Investor Shares
DAILY ASSETS GOVERNMENT CASH FUND
Preferred Shares
Universal Shares
Institutional Shares
Institutional Service Shares
Investor Shares
DAILY ASSETS GOVERNMENT FUND
Universal Shares
DAILY ASSETS CASH FUND
Preferred Shares
Universal Shares
Institutional Shares
Institutional Service Shares
Investor Shares
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MONARCH FUNDS
FUND ACCOUNTING AGREEMENT
APPENDIX B
FEES AND EXPENSES
AS OF FEBRUARY 11, 2003
(I) BASE FEE
A. Standard Fee
Fee per Fund................................................................... $3,000/month
Fee for each additional Class of the Fund above one............................ $1,000/month
B. Plus additional surcharges for each of:
(i) Portfolios with asset levels exceeding $100 million................... $500/month
Portfolios with asset levels exceeding $250 million................... $1000/month
Portfolios with asset levels exceeding $500 million................... $1,500/month
Portfolios with asset levels exceeding $1,000 million................. $2,000/month
(ii) Portfolios requiring international custody............................ $1,000/month
(iii) Portfolios with more than 30 international positions ................. $1,000/month
(iv) Tax free money market Funds........................................... $1,000/month
(v) Portfolios with more than 25% of net assets invested in
asset backed securities............................................... $1,000/month
Portfolios with more than 50% of net assets invested in
asset backed securities............................................... $2,000/month
(vii) Portfolios with more than 100 security positions...................... $1,000/month
(viii) Portfolios with a monthly portfolio turnover rate of 10%
or greater............................................................ $1,000/month
C. Standard Fee per Gateway Fund (a Fund operating pursuant to Section
12(d)(1)(E) of the 0000 Xxx)
Standard Fee per Fund.......................................................... $1,000/month
Standard Fee per Fund that invests in one or more instruments
in addition to the fund in which it invests.................................... $2,000/month
Fee for each additional Class of a Fund above one.............................. $1,000/month
Additional surcharges listed above do not apply
D. Standard Fee per Gateway Fund (a Fund operating pursuant to Section
12(d)(1)(G) of the 1940 Act or in a similar structure)
Standard Fee per Fund.......................................................... $1,000/month
Fee for each additional Class of a Fund above one.............................. $1,000/month
Plus additional surcharges listed above if the Fund invests
in securities other than investment companies (calculated as if the
securities were the Fund's only assets)
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Note 1: Surcharges are determined based upon the total assets, security
positions or other factors as of the end of the prior month and on the
portfolio turnover rate for the prior month. Portfolio turnover rate
shall have the meaning ascribed thereto in SEC Form N-1A.
Note 2: The rates set forth above shall remain fixed through December
31, 2003. On January 1, 2004, and on each successive January 1, the
rates may be adjusted automatically by Forum without action of the
Trust to reflect changes in the Consumer Price Index for the preceding
calendar year, as published by the U.S. Department of Labor, Bureau of
Labor Statistics. Forum shall notify the Trust each year of the new
rates, if applicable.
(II) START-UP FEE
Fund Start-Up Fee ......................................................................$2,000
(III) OTHER SERVICES (payable in equal installments monthly)
TAX SERVICES. Preparation of Federal income and excise tax
returns and preparation, execution and filing of state income
tax returns, including any extensions or amendments
Standard Fee.................................................. $3,000/fiscal period
Fee per Gateway Fund (a Fund described
in (i)(C) or (D) above)....................................... $1,500/fiscal period
Fee per Gateway Fund (a Fund described
in (i)(C) or (D) above) that invests in more than
one instrument in addition to the fund(s) in which
it invests.................................................... $3,000/fiscal period
(IV) OUT-OF-POCKET AND RELATED EXPENSES
The Trust, on behalf of the applicable Fund, shall reimburse Forum for
all out-of-pocket and ancillary expenses in providing the services
described in this Agreement, including but not limited to the cost of
(or appropriate share of the cost of): (i) pricing, paydown, corporate
action, credit and other reporting services, (ii) taxes, (iii) postage
and delivery services, (iv) telephone services, (v) electronic or
facsimile transmission services, (vi) reproduction, (vii) printing and
distributing financial statements, (xiii) microfilm and microfiche and
(ix) Trust record storage and retention fees. In addition, any other
expenses incurred by Forum at the request or with the consent of the
Trust, will be reimbursed by the Trust on behalf of the applicable
Fund.
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