SUPPLEMENTARY EXPENSE UNDERTAKING
UNDERTAKING made as of the 25th day of August, 2004 by ADELANTE CAPITAL
MANAGEMENT LLC, a Delaware limited liability company ("ACM").
WHEREAS, Lend Lease Funds (the "Trust") is a Delaware business trust, and
is registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end management company of the series type, and Lend Lease U.S.
Real Estate Securities Fund (the "Fund") is a series of the Trust;
WHEREAS, the Trust and ACM have entered into an Advisory Agreement dated
as of August 25, 2004 (the "Management Agreement"), pursuant to which ACM
provides investment management services to the Fund for compensation based on
the value of the average daily net assets of the Fund;
WHEREAS, ACM has made an Expense Undertaking dated as of August 25, 2004,
(the "Expense Undertaking"), pursuant to which it has agreed to limit the Fund's
total operating expenses;
WHEREAS, the Trust and ACM have determined that it is appropriate and in
the best interest of the Fund and its shareholders to maintain the expenses of
the Fund at a level lower than that which the Fund might be subject should the
Expense Undertaking not be renewed; and
WHEREAS, Class A shares of the Fund are not currently offered;
NOW THEREFORE, ACM hereby undertakes as follows:
1. EXPENSE LIMITATION.
(a) To the extent that the ordinary operating expenses incurred by a class
of the Fund in any fiscal year, including but not limited to investment
management fees of ACM, but excluding interest, taxes, brokerage commissions,
other investment-related costs, extraordinary expenses such as litigation, other
expenses not incurred in the ordinary course of such Fund's business, and
expenses of any counsel or other persons or services retained by the Trust's
trustees who are not "interested persons," as that term is defined in the 1940
Act, of ACM ("Fund Operating Expenses"), exceed the Operating Expense Limit, as
defined below, such excess amount (the "Excess Amount") shall be the liability
of ACM. The "Operating Expense Limit" in any fiscal year with respect to Class K
and Class Y of the Fund shall be as follows (based on a percentage of the
average daily net assets of such class of the Fund):
Class Operating Expense Limit (in basis points)
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Class K Shares 225
Class Y Shares 225
(b) To determine ACM's obligation with respect to the Excess Amount, each
day the Fund
Operating Expenses for Class K and Class Y of the Fund shall be annualized. If
the annualized Fund Operating Expenses for any day of any such class of the Fund
exceed the Operating Expense Limit of for that class of the Fund, ACM shall
remit to the appropriate class of the Fund an amount that, together with the
waived or reduced investment management fee, is sufficient to pay that day's
Excess Amount. The Trust may offset amounts owed to the Fund pursuant to this
Undertaking against the advisory fee payable to ACM.
2. TERM OF UNDERTAKING. This Undertaking shall be effective from the date hereof
through January 31, 2011; provided, however, that this Undertaking shall
terminate automatically upon termination of the Management Agreement.
3. MISCELLANEOUS.
(a) Notices. All notices or other communications given under this
Undertaking shall be made by guaranteed overnight delivery, telecopy or
certified mail; notice is effective when received. Notice shall be given to the
parties at the following addresses:
ACM: Adelante Capital Management LLC
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Attention: President
Trust: Lend Lease Funds
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Attention: President
(b) Severability. If any provision of this Undertaking shall be held
or made invalid by a court decision, statute, rule or otherwise, the remainder
shall not be thereby affected.
(c) Applicable Law. This Undertaking shall be construed in
accordance with and governed by the laws of the State of Delaware.
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IN WITNESS WHEREOF, the parties hereto have caused this Undertaking to be
executed by their duly authorized officers as of the date first set forth above.
ADELANTE CAPITAL MANAGEMENT LLC
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Chief Operating Officer
Acknowledged:
LEND LEASE FUNDS, on behalf of its series
LEND LEASE U.S. REAL ESTATE SECURITIES FUND
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President