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EXHIBIT 5(h)
NORTHERN FUND
ADDENDUM NO. 7 TO THE INVESTMENT ADVISORY AGREEMENT
This Addendum, dated as of the _____ day of September, 1998,
is entered into between NORTHERN FUNDS (the "Trust"), a Massachusetts business
trust, and THE NORTHERN TRUST COMPANY (the "Investment Adviser"), an Illinois
state bank.
WHEREAS, the Trust and the Investment Adviser have entered
into an Investment Advisory and Ancillary Services Agreement dated as of April
1, 1994 as amended by Addendum No. 1 dated November 29, 1994, by Addendum No. 2
dated March 29, 1996, by Addendum No. 3 dated August 7, 1996, by Addendum No. 4
dated March 24, 1997, by Addendum No. 5 dated February 12, 1997 and by Addendum
No. 6 dated November 18, 1997 (the "Advisory Agreement") pursuant to which the
Trust has appointed the Investment Adviser to act as investment adviser to the
Trust for the Money Market Fund, U.S. Government Money Market Fund, Municipal
Money Market Fund, U.S. Government Select Money Market Fund, California
Municipal Money Market Fund, U.S. Government Fund, Fixed Income Fund,
Intermediate Tax-Exempt Fund, Tax-Exempt Fund, International Fixed Income Fund,
Income Equity Fund, Growth Equity Fund, Select Equity Fund, Small Cap Fund,
International Growth Equity Fund, International Select Equity Fund, Technology
Fund, Stock Index Fund, Short-Intermediate U.S. Government Fund, California
Intermediate Tax-Exempt Fund, Arizona Tax-Exempt Fund, California Tax-Exempt
Fund, Florida Intermediate Tax-Exempt Fund, Small Cap Index Fund and the Mid Cap
Growth Fund; and
WHEREAS, Section 1(b) of the Advisory Agreement provides that
in the event the Trust establishes one or more additional investment portfolios
with respect to which it desires to retain the Investment Adviser to act as
investment adviser under the Advisory Agreement, the Trust shall so notify the
Investment Adviser in writing and if the Investment Adviser is willing to render
such services it shall notify the Trust in writing, and the compensation to be
paid to the Investment Adviser shall be that which is agreed to in writing by
the Trust and the Investment Adviser; and
WHEREAS, pursuant to Section 1(b) of the Advisory Agreement,
the Trust has notified the Investment Adviser that it is establishing the High
Yield Tax-Exempt and the High Yield Fixed Income Funds (the "Funds"), and that
it desires to retain the Investment Adviser to act as the investment adviser for
the Funds, and the Investment Adviser has notified the Trust that it is willing
to serve as investment adviser for the Funds;
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NOW THEREFORE, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. Appointment. The Trust hereby appoints the Investment
Adviser to act as investment adviser to the Trust for the Funds in accordance
with the terms set forth in the Advisory Agreement. The Investment Adviser
hereby accepts such appointment and agrees to render the services set forth in
the Advisory Agreement for the compensation herein provided.
2. Compensation. For the services provided and the expenses
assumed pursuant to the Advisory Agreement regarding each Fund, the Trust will
pay the Investment Adviser, and the Investment Adviser will accept as full
compensation therefor from the Trust, a fee at the annual rate of 0.75% of each
Fund's average net assets.
3. Capitalized Terms. From and after the date hereof, the term
"Current Funds" as used in the Advisory Agreement shall be deemed to include the
Funds. Capitalized terms used herein and not otherwise defined shall have the
meanings ascribed to them in the Advisory Agreement.
4. Miscellaneous. The initial term of the Advisory Agreement
with respect to the Funds shall continue, unless sooner terminated in accordance
with the Advisory Agreement, until March 31, 1999. Except to the extent
supplemented hereby, the Advisory Agreement shall remain unchanged and in full
force and effect, and is hereby ratified and confirmed in all respects as
supplemented hereby.
All signatures need not appear on the same copy of this
Addendum.
IN WITNESS WHEREOF, the undersigned have executed this
Addendum as of the date and year first above written.
NORTHERN FUNDS
Attest:____________________ By:________________________________
Title:_____________________________
THE NORTHERN TRUST COMPANY
Attest:____________________ By:________________________________
Title: ____________________________