MONARCH FUNDS
SHAREHOLDER SERVICE AGREEMENT
SECTION 1. APPOINTMENT
In consideration of the services provided by Forum Administrative Services,
LLC ("Forum") to the Trust as described herein, Monarch Funds (the "Trust")
hereby appoints Forum as agent to perform the services for the period and on the
terms set forth in this Agreement. Forum accepts such appointment and agrees to
furnish the services described herein, in return for the compensation specified
in Section 3 of this Agreement. Forum agrees to comply with all relevant
provisions of the Investment Company Act of 1940, as amended (the "Act"), and
the Securities Exchange Act of 1934, as amended, and applicable rules and
regulations thereunder in performing the services described herein.
SECTION 2. SERVICE ACTIVITIES
Forum shall perform, or arrange for the performance of certain activities
relating to the servicing and maintenance of shareholder accounts not otherwise
provided by the Trust's transfer agent ("Shareholder Servicing Activities") of
each class of shares listed in Appendix A hereto (each, a Share Class") of the
various series of the trust (each, a "Fund"). Shareholder Servicing Activities
include (i) answering shareholder inquiries regarding the manner in which
purchases, exchanges and redemptions of shares of the Trust may be effected and
other matters pertaining to the Trust's services; (ii) providing necessary
personnel and facilities to establish and maintain shareholder accounts and
records; (iii) assisting shareholders in arranging for processing purchase,
exchange and redemption transactions; (iv) arranging for the wiring of funds;
(v) guaranteeing shareholder signatures in connection with redemption orders and
transfers and changes in shareholder-designated accounts; (vi) integrating
periodic statements with other shareholder transactions; and (vii) providing
such other related services as the shareholder may request.
SECTION 3. COMPENSATION
As compensation for Forum's Shareholder Servicing Activities, the Trust
shall pay Forum a fee at an annual rate of 0.20% of the average daily net assets
attributable to Institutional Shares, Institutional Service Shares, and Investor
Shares Class and a fee at an annual rate of 0.25% of the average daily net
assets attributable to B Shares and C Shares (the "Payments"). The Payments
shall be accrued daily and paid monthly or at such other interval as the Trust's
Board of Trustees ("Board") shall determine. A Share Class shall not directly or
indirectly pay any amounts, whether Payments or otherwise, that exceed any
applicable limits imposed by law or the National Association of Securities
Dealers, Inc. The Trust hereby grants and transfers to Forum a general lien and
security interest in any and all securities and other assets of a Fund now or
hereafter maintained in an account at the Fund's custodian on behalf of the
Fund, limited to the amount of any liability, to secure any amounts owed Forum
by the Fund under this Agreement.
SECTION 4. SERVICE AGREEMENTS
Forum is authorized to enter into shareholder service agreements
("Servicing Agreements") pursuant to which financial institutions or other
persons who service shareholder accounts ("Service Providers") would perform
Shareholder Servicing Activities, Forum may pay any or all amounts of the
Payments to the service providers for any service activity described in Section
2. To the extent practicable, each Agreement shall contain a representation by
the Service Provider that any compensation payable to the Service Provider in
connection with the investment in a Share Class of the assets of its customers
(i) will be disclosed by the Service Provider to its customers if required by
law, (ii) will be authorized by its customers if customer authorization is
required, and (iii) will not result in an excessive fee to the Service Provider.
SECTION 5. DURATION; TERMINATION AND AMENDMENT
With respect to each Share Class:
(a) This Agreement shall remain in effect for a period of one year from the
date of its effectiveness, unless earlier terminated in accordance with this
Section, and thereafter shall continue in effect for successive annual periods,
provided that such continuance is specifically approved at least annually by the
Board and a majority of the Trustees who are not interested persons of the Trust
(the "Disinterested Trustees").
(b) This Agreement may be terminated without penalty at any time (i) by a
vote of a majority of the Board and a majority of the Disinterested Trustees or
(ii) by Forum.
(c) Any amendment to this Agreement shall be effective only upon the
approval of the Board and a majority of the Disinterested Trustees.
SECTION 6. 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
the 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 7. MISCELLANEOUS
(a) No provisions of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by both
parties hereto and, if required by the Act, by a vote of a majority of the
outstanding voting securities of any Fund or Share Class thereby affected.
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(b) If any part, term or provision of this Agreement is held to be illegal,
in conflict with any law or otherwise invalid, the remaining portion or portions
shall be considered severable and not be affected, and the rights and
obligations of the parties shall be construed and enforced as if the Agreement
did not contain the particular part, term or provision held to be illegal or
invalid.
(c) Section headings in this Agreement are included for convenience only
and are not to be used to construe or interpret this Agreement.
(d) 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.
(e) This Agreement shall be governed by and shall be construed in
accordance with the laws of the State of Delaware.
(f) The term "interested person" shall have the meaning ascribed thereto in
the Act.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the __ day of September 2004.
MONARCH FUNDS
------------------------
Xxxxx X. Xxxxxxxxx
President
FORUM ADMINISTRATIVE SERVICES, LLC
------------------------
Xxxxxxx X. Xxxxxxx
Director
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MONARCH FUNDS
SHAREHOLDER SERVICE AGREEMENT
APPENDIX A
FUND SHARE CLASS
Daily Assets Treasury Fund Institutional Shares
Investor Shares
Daily Assets Government Fund Institutional Shares
Institutional Service Shares
Investor Shares
Daily Assets Cash Fund Institutional Shares
Institutional Service Shares
Investor Shares
B Shares
C Shares
A-1
