AMENDED AND RESTATED
EXPENSE DEFERRAL AGREEMENT
THIS AMENDED AND RESTATED AGREEMENT dated as of ____________, 1999 by
and between UNDISCOVERED MANAGERS FUNDS, a Massachusetts business trust (the
"Trust"), on behalf of its ______________________________ Fund series (the
"Series"), and UNDISCOVERED MANAGERS, LLC, a Delaware limited liability company
(the "Manager"), amends and restates the Expense Deferral Agreement dated
__________________ (the "Original Agreement") by and between the Trust and the
Manager.
WHEREAS, the Manager has been appointed the investment adviser of the
Series pursuant to a Management Agreement dated ______________________ between
the Trust and the Manager relating to the Series (the "Management Agreement");
and
WHEREAS, the Trust and the Manager desire to amend and restate the
arrangements described in the Original Agreement relating to certain expenses of
the Series;
NOW, THEREFORE, the Trust and the Manager hereby agree as follows:
1. The Manager agrees, subject to Section 2 hereof, to (i) reduce the
fees payable to it under the Management Agreement (but not below zero) and (ii)
pay any operating expenses of the Series, to the extent necessary to limit the
operating expenses of the Series (exclusive of brokerage costs, interest, taxes,
dividends payable with respect to securities sold short, if any, and
extraordinary expenses) to the annual rate (as a percentage of the average daily
net assets attributable to each class of shares of the Series) of _____ percent
for the Series' Institutional Class shares, _____ percent for the Series'
Investor Class shares and ___ percent for the Series' Class C shares.
2. The Series agrees to pay to the Manager (i) the amount of fees that,
but for Section 1 hereof, would have been payable by the Series to the Manager
pursuant to the Management Agreement and (ii) the amount of the operating
expenses of the Series that the Manager paid pursuant to Section 1 hereof
(collectively, "Deferred Fees and Expenses"), subject to the limitations
provided in this Section 2. Such repayment shall be made monthly, but only if
the operating expenses of the Series (exclusive of brokerage costs, interest,
taxes, dividends payable with respect to securities sold short, if any, and
extraordinary expenses), without regard to such repayment, are at an annual rate
(as a percentage of the average daily net assets attributable to each class of
shares of the Series) of less than ______ percent for the Series' Institutional
Class shares, ______ percent for the Series' Investor Class shares and ______
percent for the Series' Class C shares. Furthermore, the amount of Deferred Fees
and Expenses paid by the Series in any month with respect to a class of shares
shall be limited so that the sum of (a) the amount of such payment and (b) the
other operating expenses of the
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Series with respect to such class of shares (exclusive of brokerage costs,
interest, taxes, dividends payable with respect to securities sold short, if any
and extraordinary expenses) do not exceed the foregoing annual percentage rate
applicable to such class of shares.
Deferred Fees and Expenses with respect to the period from __________,
1999 through August 31, 2000 and with respect to any future fiscal year of the
Trust shall not be payable by the Series with respect to a class of shares to
the extent that the amounts payable by the Series with respect to such class of
shares pursuant to the immediately preceding two sentences during the period
ending three years after the end of the fiscal year in which such Deferred Fees
and Expenses are incurred are not sufficient to pay such Deferred Fees and
Expenses; and Deferred Fees and Expenses with respect to the Trust's fiscal
years ended August 31, 1998 and August 31, 1999 and any Deferred Fees and
Expenses with respect to the period from September 1, 1999 through ___________,
1999 shall not be payable by the Series with respect to a class of shares to the
extent that the amounts payable by the Series with respect to such class of
shares pursuant to the immediately preceding two sentences during the period
ending two years after the end of the fiscal year in which such Deferred Fees
and Expenses are incurred are not sufficient to pay such Deferred Fees and
Expenses. In no event will the Series be obligated to pay any fees waived or
deferred by the Manager with respect to any other series of the Trust.
3. The initial term of this Agreement (the "Initial Term") shall be for
a period commencing on the date first above written and ending on December 31,
2000. This Agreement shall be renewed automatically for successive periods of
one year after the Initial Term, unless written notice of termination is
provided by the Manager to the Trust not less than 10 days prior to the end of
the then-current term. No such termination by the Manager shall affect the
obligation (including the amount of the obligation) of the Series to repay
amounts of Deferred Fees and Expenses with respect to periods prior to the date
of such termination.
4. 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 Agreement is executed with respect to the
Series 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 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 Series.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
UNDISCOVERED MANAGERS FUNDS
By ____________________________
Xxxx X. Xxxxxx, President
UNDISCOVERED MANAGERS, LLC
By __________________________
Xxxx X. Xxxxxx, President and CEO
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