EXHIBIT (H)(6)
EXPENSE LIMITATION AGREEMENT
DEVCAP TRUST
EXPENSE LIMITATION AGREEMENT, effective as of November 20, 2000, between
DEVCAP Trust (the "Trust"), on behalf of the DEVCAP Shared Return Fund (the
"Fund"), a separate, diversified portfolio of the Trust and Development Capital
Fund ("Devcap Non-Profit").
WHEREAS, the Trust is a business trust organized under the laws of the
Commonwealth of Massachusetts and is registered under the Investment Company Act
of 1940, as amended (the "1940 Act"), as an open-end management investment
company of the series type, and the Fund is a series of the Trust which includes
the Fund as a separate non-diversified portfolio of the Trust; and
WHEREAS, the Trust, on behalf of the Portfolio and Devcap Non-Profit have
determined that it is appropriate and in the best interests of the Trust and its
shareholders to maintain the expenses of the Fund, and, therefore, have entered
into this Expense Limitation Agreement (the "Agreement") in order to maintain
the expense ratio for the Shares of the Fund at the level specified in Section
1.2 below; and
NOW, THEREFORE, the parties agree that the Agreement provides as follows:
1. Expense Limitation.
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1.1 Applicable Expense Limit. To the extent that the aggregate expenses
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incurred by the Fund during its fiscal year, (but excluding interest, taxes,
brokerage commissions, other expenditures which are capitalized in accordance
with generally accepted accounting principles, other extraordinary expenses not
incurred in the ordinary course of such Fund's business, and amounts, if any,
payable pursuant to a plan adopted in accordance with Rule 12b-1 under the 1940
Act), exceed the Operating Expense Limit, as defined in Section 1.2 below, such
excess amount shall be reimbursed to the Fund by the Devcap Non-Profit. In
return, Devcap Non-Profit receives the proceeds from the charitable contribution
program of the Fund for its microenterprise activities.
1.2 Operating Expense Limit. Devcap Non-Profit reimburses the Fund for
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all expenses in excess of 1.75% of the average daily net assets of the Shares.
Therefore, the maximum Operating Expense Limit in any year with respect to the
Shares of the Fund shall be 1.75% of the average daily net assets of the Shares
of the Fund.
2. Term and Termination of Agreement.
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2.1 This Agreement with respect to the Shares of the Fund shall continue
in effect until November 29, 2001. Devcap Non-Profit will review its
undertaking annually, however there is no assurance that Devcap Non-Profit will
continue this reimbursement beyond the specified period.
3. Miscellaneous.
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3.1 Captions. The captions in this Agreement are included for convenience
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of reference only and in no other way define or delineate any of the provisions
hereof or otherwise affect their construction or effect.
3.2 Interpretation. Nothing herein contained shall be deemed to require
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the Trust or the Fund to take any action contrary to the Trust's Trust
Instrument or By-Laws, or any applicable statutory or regulatory requirement to
which it is subject or by which it is bound, or to relieve or deprive the
Trust's Board of Trustees of its responsibility for and control of the conduct
of the affairs of the Trust or the Fund.
3.3 Definitions. Any question of interpretation of any term or provision
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of this Agreement, including but not limited to the computations of net asset
values, and the allocation of expenses, having a counterpart in or otherwise
derived from the terms and provisions of the 1940 Act, shall have the same
meaning as and be resolved by reference to the 1940 Act.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their respective officers thereunto duly authorized and their respective
corporate seals to be hereunto affixed, as of the day and year first above
written.
DEVELOPMENT CAPITAL FUND DEVCAP TRUST
By: By:
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Name: Name:
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Title: Title:
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APPROVAL OF EXPENSE LIMITATION AGREEMENT
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REQUESTED ACTION.
You are being asked to consider and approve an Expense Limitation Agreement
(the "Agreement") for the Devcap Trust (the "Trust").
BACKGROUND.
The Expense Limitation Agreement will formalize the fee caps for the
existing shares of the Devcap Trust (the "Fund"), a series of the Trust. The
existing shares shall be designated Shares for purposes of this action. The
Agreement provides that the Fund will cap expenses at the level of 1.75% of the
average daily net assets of the Shares, through November 29, 2001.
The reason for formalizing the cap pursuant to the Agreement is that the
staff of the Securities and Exchange Commission has taken the position that a
fund may not disclose net fees (fees paid by shareholders after waivers and
reimbursements) unless there is an agreement in writing to reimburse the fees
for a period of at least one year. Accordingly, in order to allow the Fund to
continue to disclose net fees, as opposed to gross fees, in its Prospectus,
Devcap Non-Profit proposes to enter into the Agreement with the Fund, pursuant
to which the Devcap Non-Profit will agree to cap expenses at the level of 1.75%
through November 29, 2001.
CONCLUSION.
Management recommends that the Board of Trustees approve the Expense
Limitation Agreement.
AGENDA ITEM. -- APPROVAL OF EXPENSE LIMITATION AGREEMENT
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WHEREAS, Devcap Non-Profit has agreed to cap the expenses of the existing
shares of the Fund, designated as Shares for purposes of this Reolution, at a
level of 1.75% of the average daily net assets of the Shares of the Fund through
and including November 29, 2001;
WHEREAS, Devcap Non-Profit believes it is appropriate to memorialize this
agreement in an Expense Limitation Agreement,
NOW, THEREFORE, IT IS
RESOLVED, that the Expense Limitation Agreement between Devcap Non-Profit
and the Trust, with respect to the Shares of the Fund, be and hereby is,
approved in substantially the form presented at the meeting.
