February 28, 2005


Board of Trustees
Forum Funds
Two Portland Square
Portland, Maine 04101

         RE:      Contractual Waivers and Reimbursements

Dear Sirs:

         King  Investment  Advisors,  Inc. (the  "Adviser")  agrees to waive its
investment advisory fee and reimburse expenses as necessary to ensure that total
annual operating  expenses  (excluding taxes,  interest,  portfolio  transaction
expenses and  extraordinary  expenses)  for  Fountainhead  Special Value Fund, a
series of the Forum Funds (the "Trust"), does not exceed 1.50%.

         This  agreement  can only be terminated or amended upon the approval of
the Trust's Board of Trustees and is automatically  terminated if the Adviser is
no  longer  a  service  provider  to  the  Fund.  Unless  otherwise  amended  or
terminated, this agreement will terminate as of February 28, 2006.


Very truly yours,


By:      /s/ Roger King
         ---------------------
         Roger King, President