EXPENSE LIMITATION AGREEMENT
This Agreement is made by and between Dividend Growth Trust, a Delaware
statutory trust (the "Trust"), on behalf of each of its series listed on the
attached Schedule A (the "Funds"), and Dividend Growth Advisors, LLC, a South
Carolina limited liability company ("Advisor").
R E C I T A LS
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940 (the "1940 Act"); and
WHEREAS, the Trust has established the Funds; and
WHEREAS, the Trust, on behalf of each of the Funds, and Advisor have
entered into an Investment Advisory Agreement dated October 19, 2005 (the
"Advisory Agreement"), pursuant to which Advisor provides services to the Trust
for compensation based on the value of the average daily net assets of the
Funds; and
WHEREAS, the Trust and Advisor have determined that it is appropriate
and in the best interests of each Fund and its shareholders to maintain the
expenses of the Fund at a level below the level to which the Fund may otherwise
be subject.
NOW THEREFORE, in consideration of the mutual covenants contained in
this Agreement, the parties agree as follows:
1. Expense Limitation.
1.1 Fund Operating Expenses; Excess Amount. To the extent that the
"Annual Fund Operating Expenses" (within the meaning contained in Form N-1A)
incurred by a Fund in any fiscal year, but excluding brokerage and other
investment-related costs, interest, taxes, dues, fees and other charges of
governments and their agencies including the cost of qualifying the Fund's
shares for sale in any jurisdiction, extraordinary expenses such as litigation
(including legal and audit fees and other costs in contemplation of or incident
thereto) and indemnification and other expenses not incurred in the ordinary
course of the Fund's business ("Fund Operating Expenses"), exceed the Operating
Expense Limit (as defined in Section 1.2 below), Advisor shall be obligated to
reimburse the Fund for such excess amount (the "Excess Amount").
1.2. Operating Expense Limit. The Operating Expense Limit in any fiscal
year with respect to each Fund shall be the amount, expressed as a percentage of
the average daily net assets of the Fund, set forth in Schedule A.
1.3. Method of Computation. To determine Advisor's obligation with
respect to the Excess Amount, each day the Fund Operating Expenses for each Fund
shall be annualized. If the annualized Fund Operating Expenses for any day of a
Fund exceed the Operating Expense Limit for the Fund, Advisor shall remit to the
Fund an amount that, together with any offset of waived or reduced advisory
fees, is sufficient to pay that day's Excess Amount. A Fund may offset amounts
owed to the Fund pursuant to this Agreement against the fees payable to Advisor
pursuant to the Advisory Agreement. Such reimbursement of the Fund by the
Advisor shall be done on a monthly basis.
1.4. Year-End Adjustment. If necessary, on or before the last day of
the first month of each fiscal year, an adjustment payment shall be made by the
appropriate party in order that the amount of the advisory fees waived or
reduced and other payments remitted by Advisor to each Fund with respect to the
previous fiscal year shall equal the Excess Amount.
2. Recoupment of Fee Waivers and Expense Reimbursements.
2.1. Recoupment. If on any day during which this Agreement is in
effect, the estimated annualized Fund Operating Expenses of a Fund for that day
are less than the Operating Expense Limit, Advisor shall be entitled to recoup
from the Fund the advisory fees waived or reduced and other payments remitted by
Advisor to the Fund pursuant to Section 1 of this Agreement (the "Recoupment
Amount") during any of the previous thirty-six (36) months, to the extent that
the Fund's annualized Fund Operating Expenses plus the amount so recouped
equals, for such day, the Operating Expense Limit provided in Schedule A,
provided that such amount paid to Advisor will in no event exceed the total
Recoupment Amount and will not include any amounts previously recouped.
2.2. Year-End Adjustment. If necessary, on or before the last day of
the first month of each fiscal year, an adjustment payment shall be made by the
appropriate party in order that the actual Fund Operating Expenses of each Fund
for the prior fiscal year (including any recoupment payments with respect to
such fiscal year) do not exceed the Operating Expense Limit.
3. Term and Termination of Agreement. This Agreement shall become effective on
October 19, 2005. This Agreement may be terminated by the Trust with respect to
any Fund at any time, without the payment of any penalty, or by Advisor with
respect to any Fund upon 60 days' prior written notice to the Trust. In
addition, this Agreement shall automatically terminate upon the termination of
the Advisory Agreement, unless such termination of the Advisory Agreement occurs
in connection with a transfer of the advisory relationship to an affiliate of
Advisor.
4. Notice. Any notice under this Agreement shall be in writing, addressed,
delivered or mailed, postage prepaid, to the other party at such address as such
other party may designate in writing for receipt of such notice.
5. Interpretation; Governing Law. This Agreement shall be subject to and
interpreted in accordance with all applicable provisions of law including, but
not limited to, the 1940 Act, and the rules and regulations promulgated under
the 1940 Act. To the extent that the provisions of this Agreement conflict with
any such applicable provisions of law, the latter shall control. The laws of the
State of Delaware shall otherwise govern the construction, validity and effect
of this Agreement.
6. Amendments. This Agreement may be amended only by a written agreement signed
by each of the parties.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers as of _____________________, 2005.
DIVIDEND GROWTH TRUST
By: _________________________________
Name:
Title:
DIVIDEND GROWTH ADVISORS, LLC
By: _________________________________
Name:
Title:
Schedule A
Fund Operating Expense Limit
Capital Appreciation Fund
Class A Shares 1.65%
Class C Shares 2.40%
Rising Dividend Growth Fund
Class A Shares 1.65%
Class C Shares 2.25%
