Form of Fee Waiver and Expense Reimbursement Agreement January 31, 2004 Undiscovered Managers Funds (the "Trust"), on behalf of its UM Small Cap Growth Fund series (the "Fund") Dear Sirs: JPMorgan Chase Bank hereby agrees to pay any operating expenses...

                                                             Exhibit 99(h)(iii)

                                     Form of
                 Fee Waiver and Expense Reimbursement Agreement



January 31, 2004


Undiscovered Managers Funds (the "Trust"), on behalf of its
UM Small Cap Growth Fund series (the "Fund")


Dear Sirs:

         JPMorgan Chase Bank hereby agrees to pay any operating expenses of the
Fund to the extent necessary to limit the operating expenses of the Fund
(exclusive of interest, taxes and extraordinary expenses) to the annual rate (as
a percentage of the average daily net assets attributable to the Institutional
Class shares of the Fund) of 1.20 percent.

         JPMorgan Chase Bank understands and intends that the Trust will rely on
this letter agreement in preparing and filing its registration statements on
Form N-1A and in accruing the Fund's expenses for purposes of calculating net
asset value and for other purposes, and expressly permits the Trust to do so.

         The initial term of this letter agreement (the "Initial Term") shall be
for a period commencing on the date first above written and ending on January
30, 2006. This letter agreement shall be renewed automatically for successive
periods of one year after the Initial Term, unless written notice of termination
is provided by JPMorgan Chase Bank to the Trust not less than 10 days prior to
the end of the then-current term.

         Please acknowledge acceptance on the enclosed copy of this letter.


                               Very truly yours,

                               JPMORGAN CHASE BANK


                               By: ________________________________
                               Name:
                               Title:








Accepted and agreed by:

UNDISCOVERED MANAGERS FUNDS
on behalf of its UM Small Cap Growth Fund series


By: ________________________________
Name:
Title:


                                     NOTICE

A copy of the Agreement and Declaration of Trust establishing the Trust is on
file with the Secretary of The Commonwealth of Massachusetts, and notice is
hereby given that this letter agreement is executed with respect to the Fund on
behalf of the Trust by an officer of the Trust as an officer and not
individually and that the obligations of or arising out of this letter agreement
are not binding upon any of the trustees, officers or shareholders individually
but are binding only upon the assets and property belonging to the Fund.