PRELIMINARY COPY
ADELANTE U.S. REAL ESTATE SECURITIES FUND
A Series of
ADELANTE FUNDS
803 West Michigan Street, Suite A
Milwaukee, WI 53233-2301
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NOTICE OF SPECIAL MEETING
OF SHAREHOLDERS
To Be Held on January 11, 2005
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A Special Meeting of Shareholders (the "Special Meeting") of Adelante U.S. Real
Estate Securities Fund (the "Fund") (formerly, Lend Lease U.S. Real Estate
Securities Fund), a series of Adelante Funds (the "Trust") (formerly Lend Lease
Funds), will be held at the office of Adelante Capital Management LLC (formerly
Lend Lease Rosen Real Estate Securities LLC) located at 1995 University Ave.,
Suite 225, Berkeley, CA 94704 on January 11, 2005, at 9:00 a.m. local time for
the purpose of considering a new investment advisory agreement between the Trust
and Adelante Capital Management LLC with respect to the Fund.
The Board of Trustees of the Trust has fixed the close of business on November
12, 2004 as the record date for the determination of shareholders entitled to
notice of, and to vote at, the Special Meeting and any adjournments thereof.
By Order of the Board of Trustees
Michael A. Torres, President
Berkeley, CA
YOUR VOTE IS IMPORTANT
You can help the Fund avoid the necessity and expense of sending follow-up
letters by promptly returning the enclosed proxy. If you are unable to be
present in person, please mark, date, sign and return the enclosed proxy. The
enclosed envelope requires no postage if mailed in the United States.
ADELANTE U.S. REAL ESTATE SECURITIES FUND
A Series Of
ADELANTE FUNDS
803 West Michigan Street, Suite A
Milwaukee, WI 53233-2301
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PROXY STATEMENT
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This Proxy Statement is furnished in connection with the solicitation of proxies
by the Board of Trustees of Adelante Funds (the "Trust") (formerly, Lend Lease
Funds) to be used at a Special Meeting of Shareholders (the "Special Meeting")
of Adelante U.S. Real Estate Securities Fund (the "Fund") (formerly Lend Lease
U.S. Real Estate Securities Fund) to be held at the office of Adelante Capital
Management LLC ("Adelante") (formerly Lend Lease Rosen Real Estate Securities
LLC) located at 1995 University Ave., Suite 225, Berkeley, California 94704 on
January 11, 2005, at 9:00 a.m. local time for the purpose of approving a new
investment advisory agreement between the Trust and Adelante with respect to the
Fund (the "Proposal"), and at any adjournments of the Special Meeting.
QUORUM AND VOTING
Shareholders of record at the close of business on November 12, 2004 (the
"Record Date") are entitled to notice of, and to vote at, the Special Meeting
and all adjournments thereof. As of that date, there were a total of
2,362,528.327 shares of the Fund issued and outstanding. Each shareholder is
entitled to the same number of votes as the number of full and fractional shares
held by such shareholder. This Proxy Statement and the accompanying Notice of
Special Meeting of Shareholders and proxy are first being mailed on or about
December 8, 2004, to shareholders as of the record date.
You may vote in person at the Special Meeting or by mail using the enclosed
proxy card. To vote by mail, date and sign the enclosed proxy card, and return
it in the enclosed postage-paid envelope.
Any shareholder giving a proxy may revoke it at any time prior to its use. A
shareholder may change a proxy by (a) written notice of revocation received by
the Trust, (b) returning to the Trust a properly executed later dated proxy or
(c) attending the Special Meeting and voting in person. If the enclosed proxy is
properly executed and returned in time to be voted at the Special Meeting, the
shares represented by the proxy will be voted in accordance with the
instructions on the proxy. Unless instructions to the contrary are marked on the
proxy, the shares represented by the proxy will be voted FOR the Proposal. The
proxy grants discretion to the persons named thereon, as proxies, to take such
further action as they may determine appropriate in connection with any other
matter that may properly come before the Special Meeting or any adjournments.
The Board of Trustees does not currently know of any matter to be considered at
the Special Meeting other than the Proposal.
Votes to ABSTAIN and broker non-votes (i.e., proxies sent in by brokers and
other nominees which cannot be voted on the Proposal because the beneficial
owners have not given instructions) will be counted towards establishing a
quorum, but will have the effect of a vote against the Proposal. If a quorum is
not present at the Special Meeting, or if a quorum is present at the Special
Meeting but sufficient votes to approve the Proposal are not received, or if
other matters arise requiring shareholder attention, the persons named as proxy
agents may propose one or more adjournments of the Special Meeting to permit
further solicitation of proxies. Any such adjournment will require the
affirmative vote of a majority of those shares present at the Special Meeting or
represented by proxy. When voting on a proposed adjournment, the persons named
as proxy agents will vote FOR the proposed adjournment all shares that they are
entitled to vote with respect to each item, unless directed to vote AGAINST the
item, in which case such shares will be voted AGAINST the proposed adjournment
with respect to that item. A shareholder vote may be taken on one or more
matters that come before the Special Meeting if sufficient votes have been
received and it is otherwise appropriate.
HOW IS THIS PROXY STATEMENT BEING SOLICITED?
The Board of Trustees expects to make this solicitation primarily by mail. In
addition to the solicitation of proxies by mail, Adelante personnel and other
representatives of the Fund may also solicit proxies by telephone, e-mail or in
person. The Fund may also retain a proxy solicitation firm to assist in the
solicitation of proxies. The costs of retaining such a firm, which the Fund does
not anticipate would exceed $10,000, would depend upon the amount and type of
services rendered. This cost, other solicitation costs and the expenses incurred
in connection with preparing this Proxy Statement will be borne by Adelante, the
Fund's investment adviser.
ADDITIONAL INFORMATION ABOUT THE FUND
The financial statements of the Fund for the fiscal year ended January 31, 2004
are included in the Trust's annual report for the year ended January 31, 2004,
which has been previously sent to shareholders. The financial statements for the
Fund for the six months ended July 31, 2004 are included in the Trust's
semi-annual report for the six months ended July 31, 2004, which has been
previously sent to shareholders. THE TRUST WILL FURNISH UPON REQUEST AND WITHOUT
CHARGE TO ANY SHAREHOLDER A COPY OF SUCH REPORTS. A SHAREHOLDER MAY OBTAIN A
COPY OF SUCH REPORTS BY WRITING TO ADELANTE FUNDS, 803 W. MICHIGAN ST., STE. A,
MILWAUKEE, WISCONSIN, 53233 OR BY CALLING TOLL FREE (877) 563-5327.
SECURITY OWNERSHIP OF MANAGEMENT
The following table shows the beneficial ownership of the Fund shares by the
Fund's Trustees and chief executive officer as of November 12, 2004. All
individuals listed in the table have sole voting and investment power over the
shares shown.
PERCENT OF SHARES OF
SHARES OF COMMON STOCK COMMON STOCK
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED BENEFICIALLY OWNED
------------------------ ------------------ ------------------
William J. Klipp 901.923 *
Scott A. MacKillop 2,200.654 *
Kevin Malone 374.383 *
Michael A. Torres+ 5,971.910 *
All Trustees as a group 9,448.870 *
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* Less than 1%
+ Mr. Torres is both a Trustee and chief executive officer of the Trust.
The following table shows persons or entities known to the Fund to be the
beneficial owners of 5% or more of the outstanding shares of a class of the
Fund:
% of Nature of
Number of Outstanding Beneficial
Shareholder Shares Owned Shares Ownership
Lend Lease
International
Property, Ltd.
1995 University Avenue Sole voting power
Suite 225 and sole
Berkeley, CA 94704 655,712.828 27.75%(1) investment power
Arrow & Co. Sole voting power
P.O. Box 30010 M02-1 and sole
Durham, NC 27702 122,015.545 5.16% investment power
(1) It is anticipated that Lend Lease International Property, Ltd., an
affiliate of Lend Lease Real Estate Investments, Inc., the Fund's former
adviser, will vote its shares in favor of the proposal.
PROPOSAL TO APPROVE NEW INVESTMENT ADVISORY AGREEMENT BETWEEN THE TRUST AND
ADELANTE WITH RESPECT TO THE FUND. Shareholders of the Fund are being asked to
approve a new investment advisory agreement between the Trust and Adelante (the
"New Advisory Agreement"). Adelante currently serves as interim investment
adviser to the Fund. The address of Adelante is 1995 University Ave., Suite 225,
Berkeley, CA 94704.
WHY ARE SHAREHOLDERS BEING ASKED TO APPROVE A NEW INVESTMENT ADVISORY AGREEMENT?
On August 25, 2004, Lend Lease Real Estate Investments, Inc. ("LLREI"), which
has served as the investment adviser to the Fund since the Fund's inception,
sold its 100% ownership interest in Lend Lease Rosen Real Estate Securities LLC
("Lend Lease Rosen"), the Fund's sub-adviser since inception, to ACM Acquisition
LLC ("Holdings"), an entity wholly owned by Michael A. Torres, the CEO of Lend
Lease Rosen, a Trustee of the Trust and the Fund's portfolio manager, and his
wife Nancy Torres. (This sale is referred to as the "Transaction.") Holdings
acquired Lend Lease Rosen for a purchase price of $25 million consisting of a
combination of cash and financing provided by the seller.
Under the terms of the Fund's sub-advisory agreement with Lend Lease Rosen and
the Investment Company Act of 1940, as amended, (the "1940 Act"), the
Transaction effected a change of control of Lend Lease Rosen that caused an
assignment of the sub-advisory agreement between LLREI and Lend Lease Rosen with
respect to the Fund resulting in its automatic termination. In conjunction with
the Transaction, the advisory agreement between LLREI and the Fund was
terminated as well.
To avoid disruption of the Fund's investment program upon termination of the
advisory and sub-advisory agreements, on August 25, 2004 the Trust's Board of
Trustees approved an interim advisory agreement on behalf of the Fund with
Adelante (as Lend Lease Rosen was renamed following its acquisition by Holdings
and the conclusion of its relationship with Ken Rosen) under which Adelante
provides the same services called for under the outgoing agreements with Lend
Lease Rosen and LLREI on substantially the same terms as the outgoing
agreements. Under the terms of the interim agreement and in accordance with Rule
15a-4 under the 1940 Act, Fund shareholders must approve a new advisory
agreement, i.e., the New Advisory Agreement, before January 22, 2005 for
Adelante to serve as the Fund's investment manager beyond that date. Under the
interim agreement, investment management fees due Adelante are held in an
interest-bearing escrow account. If the New Advisory Agreement is approved by
shareholders, the escrowed funds, including interest, will be paid to Adelante.
If the New Advisory Agreement is not approved, Adelante will be entitled to an
amount equal to the lesser of (a) its costs of performing its services during
the interim period plus interest and (b) the amount in the escrow account plus
interest.
Under the terms of the agreement relating to the sale of Lend Lease Rosen,
Holdings has agreed to use all reasonable efforts to enable the following to be
true regarding Section 15(f) of the 1940 Act: (a) for a period of not less than
three (3) years after the date on which the sale of Lend Lease Rosen occurred,
no more than 25% of Trustees of the Trust shall be "interested persons" (as
defined in the 1940 Act) of any of the Fund, Adelante, Holdings or any person
they control, are controlled by or are under common control with and (b) for a
period of not less than two (2) years after the date on which the sale of Lend
Lease Rosen
occurred, neither Holdings nor any person it controls, is controlled by or is
under common control with, shall impose an unfair burden on the Fund as a result
of the sale of Lend Lease Rosen or any express or implied terms, conditions or
understandings applicable to the sale of Lend Lease Rosen.
The agreement in Appendix 1 reflects the terms of the interim agreement, which
apply during the period prior to shareholder approval of a new advisory
agreement, and the terms of the New Advisory Agreement, which will apply if
shareholders approve the Proposal.
HOW DOES THE NEW ADVISORY AGREEMENT DIFFER FROM THE PRIOR ADVISORY AND
SUBADVISORY AGREEMENTS?
The New Advisory Agreement represents a consolidation of the terms of the prior
advisory agreement and the prior sub-advisory agreement, except for elimination
of provisions addressing aspects of the relationship between LLREI as adviser
and Lend Lease Rosen as sub-adviser. There are no changes in the scope of
services being provided to the Fund. The fees payable to Adelante under the New
Advisory Agreement are the same as the fees payable to LLREI under the prior
advisory agreement. Under the New Advisory Agreement, Adelante provides the same
portfolio management services as under the prior sub-advisory agreement. The
portfolio management personnel who performed those services under the prior
sub-advisory agreement in their various capacities with Lend Lease Rosen now
perform the same services under the New Advisory Agreement in corresponding
capacities with Adelante. The New Advisory Agreement provides for performance of
the same services for the Fund as the prior advisory agreement. In addition, in
connection with the Transaction, Adelante retained the personnel previously
responsible for performing LLREI's duties under the prior advisory agreement.
WHAT MATTERS WERE CONSIDERED BY THE BOARD IN RECOMMENDING THE NEW ADVISORY
AGREEMENT?
At a special meeting held on August 25, 2004, the Board of Trustees, including a
majority of the Trustees that are not "interested persons" of the Trust (the
"Independent Trustees"), approved the New Advisory Agreement between Adelante
and the Fund. The New Advisory Agreement was also the subject of a special
meeting of the Board held on August 18, 2004 and separate meetings of the
Independent Trustees who were represented by their own counsel in connection
with their deliberations. In considering the New Advisory Agreement, the
Trustees requested and reviewed a variety of materials relating to the
Transaction, Adelante and the Fund, including financial projections for Adelante
and the Fund following the Transaction, information about the anticipated impact
of the Transaction on Adelante's organization and personnel and the advisory
fees, total expenses and performance of the Fund relative to other similar
mutual funds. The Trustees also considered information concerning Adelante and
the Fund, addressing matters such as personnel, compliance, investment
techniques, Fund and market performance and brokerage practices such as soft
dollars and best execution, relied on in connection with the Board's March 18,
2004 approval of the Fund's former advisory arrangements with LLREI and Lend
Lease Rosen (the "Former Advisory Arrangements"), as updated and supplemented in
connection with the aforementioned meetings, and other materials and information
provided to them in the interim
with respect to the Fund and Adelante, e.g., in connection with the Board's
regular quarterly meeting in June 2004.
At the August 18 and August 25, 2004 Board meetings, Mr. Torres and other
representatives of Adelante outlined the Transaction and discussed how the
Transaction would affect various aspects of Adelante's organization and the
Fund. The Trustees received a presentation from Adelante regarding the Fund's
advisory fee and total expenses and performance as compared to other similar
funds, indicating that as of the most recent month end, the Fund's total expense
ratio (after taking into account the effect of the expense limitation) and
advisory fee rate were at approximately the average for this peer group, and the
Fund was in approximately the fiftieth percentile for three year performance for
this peer group. The Trustees noted that the Fund's performance continued to be
consistent with their expectations given the Fund's size and relative risk
profile. The Trustees also considered information relating to the fees paid by
other clients of Adelante whose portfolios are managed in a manner similar to
the Fund's and concluded that, given the services other than portfolio
management provided to the Fund under the New Advisory Agreement, the fee rate
under the New Advisory Agreement was appropriate in relation to those charged
Adelante's other clients whose assets are managed using the same general
investment strategy as the Fund's.
The Trustees noted that the New Advisory Agreement represented a consolidation
of the functions performed under the existing advisory and subadvisory
agreements on essentially the same terms as those agreements, including the fee
rate paid by the Fund, and that the LLREI employee responsible for the principal
functions performed by LLREI under the former advisory agreement was expected to
become an employee of Adelante in connection with the Transaction for the
purpose of performing those and other functions under the New Advisory
Agreement. The Trustees also noted Adelante's plans to replace elements of its
operations that were directly or indirectly provided by, or relied to some
extent on, LLREI. The Trustees considered Mr. Torres' representations that he
expected Adelante to retain the personnel critical to the management of the
Fund's investment portfolio following the Transaction.
The Trustees also examined how the change in Adelante's financial condition
following the Transaction could affect Adelante's ability to provide the
services required under the New Advisory Agreement. In this regard, the Trustees
reviewed a variety of matters including the impact that withdrawal of LLREI's
support would have on Adelante, financing for the Transaction, profitability
projections for Adelante following the Transaction, projections for the Fund
following the Transaction, and various potential impacts of the Transaction on
other aspects of Adelante's business. After consideration of the foregoing
factors, the Trustees concluded that (a) if Adelante could provide substantially
the same quantity and quality of services to the Fund following the Transaction
as were provided under the Fund's Former Advisory Arrangements, Adelante would
be qualified to serve as the Fund's investment adviser and (b) there was a more
than reasonable likelihood that Adelante will be able to provide services
meeting that standard.
The Trustees considered (a) the Fund's advisory agreement expenses and total
expenses relative to funds with similar investment objectives, (b) the fact that
Adelante had agreed to pay Fund expenses arising out of the Transaction, such as
the expenses of a shareholder
meeting to approve the New Advisory Agreement and (c) Adelante's agreement to
maintain existing expense limitations for a period of 2 years after the
Transaction. On this basis, the Trustees concluded that the expenses of the New
Advisory Agreement were reasonable in relation to the services provided and the
advisory expenses of other similar funds. The Trustees did not consider the
costs of services to be provided to the Fund under the New Advisory Agreement,
or profits to be realized by Adelante from its relationship with the Fund to be
material to their deliberations, given the extent to which Adelante can be
expected to waive its fees and reimburse Fund expenses under its contractual
obligations to limit Fund expenses. Similarly, the Trustees did not consider the
extent to which economies of scale would be realized as the Fund grows, and
whether advisory fee levels reflect these economies of scale for the benefit of
Fund investors, on the grounds that these issues were not relevant given the
Fund's current asset level or the asset levels reasonably foreseeable during the
period prior to the next review of the New Advisory Agreement, which would be
prior to the first anniversary of the Transaction. In this regard, the Trustees
did, however, reiterate their intention expressed in connection with past
contract renewals to monitor these issues on an ongoing basis and address them
as appropriate when circumstances change.
On the basis of the foregoing, the Trustees, including a majority of the
independent Trustees, concluded that approval of the New Advisory Agreement
would be in the interests of the Fund and its shareholders and determined to
recommend that Fund shareholders approve the New Advisory Agreement.
WHEN DID THE TRUSTEES APPROVE THE ADVISORY AGREEMENT?
The New Advisory Agreement was approved by the Board of Trustees, including a
majority of the Independent Trustees, on August 25, 2004. If approved by
shareholders, by its terms, the New Advisory Agreement will continue in effect
until August 25, 2005 and thereafter from year to year as long as it is approved
annually by the Board (at a meeting called for that purpose) or by vote of a
majority of the Fund's outstanding shares. In either case, renewal of the New
Advisory Agreement must be approved by a majority of the Trust's Independent
Trustees. The New Advisory Agreement is subject to termination without penalty
on 60 days' written notice by either party to the other and will terminate
automatically in the event of assignment. The prior advisory agreement was
approved by the initial shareholder at the time of the Fund's inception. The
prior sub-advisory agreement was approved by shareholders on December 12, 2002.
The prior advisory and sub-advisory agreements were last approved by the
Trustees on March 18, 2004.
WHAT ARE THE FUND'S INVESTMENT ADVISORY FEES AND THE INVESTMENT SUB-ADVISORY
FEES?
The interim agreement and the New Advisory Agreement each provide that the Fund
will pay Adelante a fee equal to 0.80% of average daily net assets, which is the
same fee payable by the Fund to LLREI under the prior advisory agreement. (Under
the prior sub-advisory agreement, LLREI (and not the Fund) paid Lend Lease Rosen
a sub-advisory fee equal to 0.40% of the Fund's average daily net assets). As
noted above, any fees payable under the interim agreement for the period prior
to shareholder approval of the Advisory Agreement will be held in escrow pending
approval of the Advisory Agreement. During the fiscal year ended January 31,
2004, the fee payable to LLREI under the prior advisory agreement and to Lend
Lease Rosen under the prior sub-advisory agreement were $287,392 and $143,696,
respectively. In accordance with the terms of a contractual arrangement to limit
the Fund's expenses, LLREI and Lend Lease Rosen each waived their respective
fees during fiscal year 2004. Adelante has contractually agreed to limit total
annual Fund operating expenses (excluding interest, taxes, brokerage
commissions, other investment-related costs, extraordinary expenses such as
litigation, other expenses not incurred in the ordinary course of the Fund's
business, and expenses of any counsel or other persons or services retained by
the Independent Trustees) of Class A, Class K and Class Y shares of the Fund to
1.50%, 1.25%, and 0.97%, respectively, through August 25, 2006, subject to
renewal for one year periods thereafter provided certain conditions are met and,
subject to later reimbursement by Adelante in certain circumstances. Adelante
has also contractually agreed to limit annual total operating expenses of each
of the Fund's Class K and Class Y shares (excluding interest, taxes, brokerage
commissions, other investment-related costs, extraordinary expenses such as
litigation, other expenses not incurred in the ordinary course of the Fund's
business, and expenses of any counsel or other persons or services retained by
the Independent Trustees) to 2.25% through January 31, 2011. Each of the
foregoing contractual expense limitations represents a continuation of
contractual expense limitations maintained by LLREI and Lend Lease Rosen prior
to the Transaction.
WHAT SERVICES DID LLREI AND LEND LEASE ROSEN PROVIDE UNDER THE PRIOR AGREEMENTS
AND WHAT SERVICES WILL ADELANTE PROVIDE UNDER THE NEW ADVISORY AGREEMENT?
Under the prior advisory agreement, LLREI was responsible for overall
administration of the Fund's affairs including matters such as regulatory
compliance and the Fund's relationships with other service providers. Under the
prior subadvisory agreement, Lend Lease Rosen provided an investment program for
the Fund, made investment decisions for the Fund and placed all orders for the
purchase and sale of portfolio securities and all other instruments. Under the
New Advisory Agreement, which consolidates the terms of the prior agreements,
Adelante will provide both the services rendered by LLREI under the prior
advisory agreement, and the services rendered by Lend Lease Rosen under the
prior sub-advisory agreement.
OTHER FUNDS ADVISED BY ADELANTE
Shown below is information regarding registered investment companies with
investment objectives similar to the Fund's for which Adelante provides
investment advisory services (in each case pursuant to a sub-advisory
agreement).
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Fund Average Net Assets under Ratio of Net Advisory Fees
management for the Fund's Paid to Lend Lease Rosen to
fiscal year ended Average Net Assets under
September 30, 2004 management (a)
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AssetMark Real $64,480,018 0.40%
Estate Securities
Fund
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(a) Adelante has not waived, reduced or otherwise agreed to reduce its
compensation under this sub-advisory agreement.
ADELANTE
Adelante is wholly owned by Holdings. Michael A. Torres, who is President and a
Trustee of the Trust, the portfolio manager of the Fund and CEO of Adelante, and
his wife Nancy Torres, each currently own 42.5% of the interests in Holdings.
The remaining 15% of the interests in Holdings are currently held by Adelante
employees, none of whom owns 10% or more of the interests in Holdings.
Adelante's and Mr. and Mrs. Torres' address is 1995 University Ave., Suite 225,
Berkeley, California 94704. Mark A. Hoopes and Mark J. Nuti, who are the Chief
Compliance Officer and Chief Operating Officer, respectively, of Adelante, serve
as the Vice President and Treasurer of the Trust and Secretary of the Trust,
respectively.
WHO ARE THE FUND'S ADMINISTRATOR AND UNDERWRITER?
UMB Fund Services, Inc. acts as administrator. UMB Distribution Services,
LLC acts as principal underwriter and distributor. Both entities are located
at 803 West Michigan Street, Suite A, Milwaukee, Wisconsin 53233-2301.
WHAT IS THE VOTING REQUIREMENT TO APPROVE THE NEW ADVISORY AGREEMENT?
Approval of the Proposal requires the affirmative vote of the holders of a
"majority of the outstanding voting securities" of the Fund, as such term is
defined in the 1940 Act. For that purpose, a vote of the holders of a "majority
of the outstanding voting securities" of the Fund means (a) the vote of 67% or
more of the shares of the Fund present at the Special Meeting if the holders of
more than 50% of the outstanding Fund shares are present or represented by
proxy, or (b) the vote of the holders of more than 50% of the outstanding shares
of the Fund, which ever is less. Votes to abstain and broker non-votes will have
the same effect as votes cast against the proposal.
RECOMMENDED SHAREHOLDER ACTION
The Board of Trustees, including the Independent Trustees, unanimously
recommends that shareholders vote FOR approval of the New Advisory Agreement.
OTHER MATTERS TO COME BEFORE THE SPECIAL MEETING
The Board of Trustees does not know of any other matters to be considered at the
Special Meeting other than those referred to above. If any other matters are
properly brought before the Special Meeting, it is the intention of proxy
holders to vote such proxies on such matters in accordance with their best
judgment.
SHAREHOLDER PROPOSALS
The Fund does not hold annual meetings of shareholders. Shareholders wishing to
submit proposals for inclusion in a proxy statement for a subsequent shareholder
meeting should send their written proposals to the Secretary of the Trust, at
Adelante Funds, 803 West Michigan Street, Suite A, Milwaukee, WI 53233-2301.
WHETHER OR NOT YOU PLAN TO ATTEND THIS SPECIAL MEETING, PLEASE FILL IN, DATE AND
SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. NO
POSTAGE IS NECESSARY IF IT IS MAILED IN THE UNITED STATES.
December 6, 2004
APPENDIX 1
ADVISORY AGREEMENT
AGREEMENT made as of the 25th day of August 2004, between Adelante Capital
Management LLC, a Delaware limited liability company (the "Adviser"), and Lend
Lease Funds, a Delaware business trust (the "Trust").
WHEREAS, the Adviser is engaged principally in the business of rendering
investment management services and is registered as an investment adviser under
the Investment Advisers Act of 1940, as amended (the "Advisers Act"); and
WHEREAS, the Trust is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Trust is authorized to issue shares of beneficial interest in
separate series with each such series representing interests in a separate
portfolio of securities and other assets, and in multiple classes of such
series; and
WHEREAS, the Trust has retained UMB Fund Services, Inc. (together with any
new administrator engaged by the Trust, the "Administrator") to provide
administration and fund accounting services with respect to the Trust's
operations, subject to the control of the Board of Trustees; and
WHEREAS, the Trust offers shares in multiple classes of shares of one
series, the Lend Lease U.S. Real Estate Securities Fund, such series (the
"Initial Fund"), together with all other series subsequently established by the
Trust with respect to which the Adviser renders management and investment
advisory services pursuant to the terms of this Agreement, being herein
collectively referred to as the "Funds" and individually as a "Fund"; and
WHEREAS, the Adviser has served as sub-adviser with respect to the Initial
Fund since its inception, most recently pursuant to an agreement dated as of
October 15, 2002, which terminates in accordance with its terms effective as of
the date hereof as a result of an assignment in connection with a change in
control of the Adviser;
WHEREAS, Lend Lease Real Estate Investments, Inc. ("LLREI") has served as
adviser with respect to the Initial Fund since its inception pursuant to an
agreement dated as of February 1, 2000, and such agreement shall terminate
effective as of the date hereof;
WHEREAS, the Adviser and the Trust desire that the function of the adviser
and sub-adviser with respect to the Initial Series be consolidated and be
performed by the Adviser.
NOW THEREFORE, WITNESSETH: That it is hereby agreed between the parties
hereto as follows:
1. APPOINTMENT OF ADVISER.
(a) Initial Fund. The Trust hereby appoints the Adviser to act as
manager and investment adviser to the Initial Fund for the period and on the
terms herein set forth. The Adviser accepts such appointment and agrees to
render the services herein set forth, for the compensation herein provided.
(b) Additional Funds. In the event that the Trust establishes one or
more series of shares other than the Initial Fund with respect to which it
desires to retain the Adviser to render management and investment advisory
services hereunder, it shall so notify the Adviser in writing, indicating the
advisory fee to be payable with respect to the additional series of shares. If
the Adviser is willing to render such services on the terms provided for herein,
it shall so notify the Trust in writing, whereupon such series of shares shall
become a Fund hereunder.
2. DUTIES OF ADVISER. The Adviser, at its own expense, shall subject to
the stated investment objective and policies of the Funds as set forth in the
Trust's current Registration Statement and subject to the supervision of the
Board of Trustees of the Trust, (a) develop and furnish continuously an
investment program and strategy for each Fund in compliance with that Fund's
investment objective and policies as set forth in the Trust's current
Registration Statement, (b) provide research and analysis relative to the
investment program and investments of each Fund, (c) determine (subject to the
overall supervision of the Board of Trustees of the Trust) what investments
shall be purchased, held, sold or exchanged by each Fund and what portion, if
any, of the assets of each Fund shall be held in cash or cash equivalents, and
(d) make changes on behalf of the Trust in the investments of each Fund. In
connection therewith:
(i) In accordance with paragraph 2(ii), the Adviser shall arrange
for the placing of all orders for the purchase and sale of securities and
other investments for each Fund's account and will exercise full
discretion and act for the Trust in the same manner and with the same
force and effect as the Trust might or could do with respect to such
purchases, sales or other transactions, as well as with respect to all
other things necessary or incidental to the furtherance or conduct of such
purchases, sales or transactions.
(ii) In connection with the management of the investment and
reinvestment of each Fund, the Adviser, acting by its own officers,
directors or employees or by a duly authorized subcontractor, is
authorized to select the broker or dealers that will execute purchase and
sale transactions for the Trust. In executing portfolio transactions and
selecting brokers or dealers, if any, the Adviser will use its best
efforts to seek on behalf of a Fund the best overall terms available. In
assessing the best overall terms available for any transaction, the
Adviser shall consider all factors it deems relevant, including the
breadth of the market in and the price of the security, the financial
condition and execution capability of the broker or dealer, and the
reasonableness of the commission, if any, with respect to the specific
transaction and on a continuing basis. In evaluating the best overall
terms available, and in selecting
the broker or dealer, if any, to execute a particular transaction, the
Adviser may also consider the brokerage and research services (as those
terms are defined in Section 28(e) of the Securities Exchange Act of 1934)
provided to the Adviser with respect to the Fund and/or other accounts
over which the Adviser exercises investment discretion. The Adviser may
pay to a broker or dealer who provides such brokerage and research
services a commission for executing a portfolio transaction which is in
excess of the amount of commission another broker or dealer would have
charged for effecting that transaction if, but only if, the Adviser
determines in good faith that such commission was reasonable in relation
to the value of the brokerage and research services provided.
(iii) The Adviser may buy securities for a Fund at the same time it
is selling such securities for another client account and may sell
securities for a Fund at the time it is buying such securities for another
client account. In such cases, subject to applicable legal and regulatory
requirements, and in compliance with such procedures of the Trust as may
be in effect from time to time, the Adviser may effectuate cross
transactions between a Fund and such other account if it deems this to be
advantageous. The Adviser also may cause a Fund to enter into other types
of investment transactions (e.g., a long position on a particular
securities index) at the same time it is causing other client accounts to
take opposite economic positions (e.g., a short position on the same
index).
(iv) On occasions when the Adviser deems the purchase or sale of a
security to be in the best interest of a Fund as well as other clients,
the Adviser, to the extent permitted by applicable laws and regulations,
and in compliance with such procedures of the Trust as may be in effect
from time to time, may aggregate the securities to be sold or purchased in
order to obtain the best execution and lower brokerage commissions, if
any. In such event, allocation of the securities so purchased or sold, as
well as the expenses incurred in the transaction, will be made by the
Adviser in the manner it considers to be the most equitable and consistent
with its fiduciary obligations to the subject Fund and to such clients.
(v) The Adviser will advise the Funds' custodian or such depository
or agents as may be designated by the custodian promptly of each purchase
and sale of a portfolio security, specifying the name of the issuer, the
description and amount or number of shares of the security purchased, the
market price, the commission and gross or net price, the trade date and
settlement date and the identity of the effecting broker or dealer. The
Adviser shall not have possession or custody of any Fund investments. The
Trust shall be responsible for all custodial agreements and the payment of
all custodial charges and fees and, upon the Adviser giving proper
instructions to the custodian, the Adviser shall have no responsibility or
liability for the acts, omissions or other conduct of the custodian.
(vi) The Adviser shall, upon due notice from the Adviser, provide
such periodic and special reports as the Board of Trustees may request
(including but not limited to reports describing any such research, advice
or other services received and the incremental commissions, net price or
other consideration to which they relate).
(vii) The Adviser shall also oversee the activities of the
Administrator, subject always to the control of the Board of Trustees of
the Trust and to the provisions of the Trust's Master Trust Agreement and
By-laws, as amended, and the 1940 Act. The Adviser is authorized to engage
one or more sub-advisers in connection with the Adviser's duties under
this Agreement, which sub-advisers may be affiliates of the Adviser. In
connection therewith, the Adviser shall:
(A) furnish to the Trust necessary assistance in the
preparation all reports, prospectuses, registration statements and
amendments thereto now or hereafter required by federal or other
laws or by the rules or regulations of any duly authorized
commission or administrative body;
(B) furnish to the Trust office space in the offices of the
Adviser, or in such other place or places as may be agreed upon from
time to time, and all necessary office facilities, simple business
equipment, supplies, utilities and telephone service.
(C) furnish to the Trust executive and administrative
personnel to provide management of the affairs of the Trust,
including personnel to perform clerical, bookkeeping, accounting and
other office functions, which services are exclusive of the
necessary records or services, including shareholder services and
fund accounting services, of the Administrator and any dividend
disbursing agent, transfer agent, registrar or custodian, provided
that the Adviser shall compensate all personnel, officers, and
directors of the Trust if such persons are also employees of the
Adviser or its affiliates; and
(D) arrange for providing and maintaining a bond issued by a
reputable insurance company authorized to do business in the place
where the bond is issued against larceny and embezzlement covering
each officer and employee of the Trust, the Adviser and/or any
sub-adviser who may singly or jointly with others have access to
funds or securities of the Trust, with direct or indirect authority
to draw upon such funds or to direct generally the disposition of
such funds, which bond shall be in such reasonable amount as a
majority of the Trustees who are not "interested persons" of the
Trust, as defined in the 1940 Act, shall determine, with due
consideration to the aggregate assets of the Trust to which any such
officer or employee may have access, provided that the premium, or
portion thereof pursuant to an agreement among the insured parties
in the case of a joint insured bond, for the bond shall be payable
by the Trust in accordance with paragraph 3(q).
3. ALLOCATION OF EXPENSES.
The Trust assumes and shall pay all expenses for all other Trust
operations and activities and shall reimburse the Adviser for any such expense
incurred by the Adviser (it being understood that the Trust shall allocate such
expenses between or among the Funds to the extent contemplated by its Master
Trust Agreement). The expenses to be borne by the Trust shall include, without
limitation:
(a) all expenses of organizing the Trust or forming any series
thereof, to the extent now or hereafter permitted under generally accepted
accounting principles applicable to registered investment companies;
(b) all expenses (including information, materials and services
other than services of the Adviser) of preparing, printing and mailing all
annual, semiannual and periodic reports, proxy materials and other
communications (including registration statements, prospectuses and amendments
and revisions thereto) furnished to existing shareholders of the Trust and/or
regulatory authorities;
(c) fees involved in registering and maintaining registration of the
Trust and its shares with the Securities and Exchange Commission and state
regulatory authorities;
(d) any other registration, filing or other fees in connection with
requirements of regulatory authorities;
(e) expenses, including the cost of printing of certificates
relating to the issuance of shares of the Trust;
(f) to the extent not paid by the Trust's distributor, the expenses
of maintaining a shareholder account and furnishing, or causing to be furnished,
to each shareholder a statement of his account, including the expense of
mailing;
(g) taxes and fees payable by the Trust to federal, state or other
governmental agencies;
(h) expenses related to the redemption of its shares, including
expenses attributable to any program of periodic redemption;
(i) all issue and transfer taxes, brokers' commissions, margin
costs, interest on borrowings and other costs chargeable to the Trust in
connection with securities transactions to which the Trust is a party, including
any portion of such commissions attributable to research and brokerage services
as defined by Section 28(e) of the Securities Exchange Act of 1934, as amended;
(j) the charges and expenses of the custodian appointed by the
Trust, or any depository utilized by such custodian, for the safekeeping of its
property;
(k) charges and expenses of the Administrator and any shareholder
servicing agents, transfer agents and registrars appointed by the Trust,
including costs of servicing shareholder investment accounts;
(l) charges and expenses of independent accountants retained by the
Trust (including but not limited to charges and expenses relating to tax
compliance and the preparation and review of tax returns and related tax
matters);
(m) fees and expenses for legal services in connection with the
affairs of the Trust, including reasonable fees charged (including internal
charges and allocations) and expenses incurred by the Adviser, if any, for
performing such legal services for the Trust;
(n) compensation and expenses of Trustees of the Trust who are not
"interested persons" of the Trust (as defined in the 1940 Act);
(o) expenses of shareholders' and Trustees' meetings;
(p) membership dues in, and assessments of, the Investment Company
Institute or similar organizations;
(q) insurance premiums on fidelity, errors and omissions and other
coverages;
(r) expenses incurred in connection with any distribution plan
adopted by the Trust in compliance with Rule 12b-1 of the 1940 Act;
(s) such other non-recurring expenses of the Trust as may arise,
including expenses of actions, suits, or proceedings to which the Trust is a
party and the legal obligation which the Trust may have to indemnify its
Trustees, officers or shareholders with respect thereto;
(t) fees and expenses incurred in connection with registering and
qualifying the Trust's shares with federal and state regulatory authorities,
including reasonable fees charged (including internal charges and allocations)
and expenses incurred by the Administrator or the Adviser, if any, for
performing such services for the Trust; and
(u) fees and expenses for fund accounting services, including
reasonable fees charged (including internal charges and allocations) and
expenses incurred by the Administrator or the Adviser, if any, for performing
such fund accounting services for the Trust.
4. ADVISORY FEE.
For the services and facilities to be provided by the Adviser as provided
in Sections 1 and 2 of this Agreement, the Trust shall pay to the Adviser on a
monthly basis compensation based on an annual percentage rate applied to the
Fund's average daily net assets as specified in the Schedule(s) which are
attached hereto and made a part of this Agreement. Such compensation shall be
paid to the Adviser as soon as practicable after the last calendar day of each
month.
All rights of compensation under this Agreement for services performed as
of the termination date shall survive the termination of this Agreement.
In the case of commencement or termination of this Agreement with respect
to any Fund during any calendar month, the fee with respect to such Fund for
that month shall be reduced proportionately based upon the number of calendar
days during which it is in effect, and the fee shall be computed upon the
average daily net assets of such Fund for the days during which it is in effect.
The Adviser may from time to time and for such periods as it deems
appropriate reduce its compensation hereunder to the extent the Adviser may, by
notice to the Trust, voluntarily declare.
5. EXPENSE LIMITATION.
The Adviser agrees that if the total expenses of any Fund (exclusive of
interest, taxes, brokerage expenses, distribution expenses, extraordinary items
and any other items allowed to be excluded by applicable state law) for any
fiscal year of the Trust exceed the lowest expense limitation imposed in any
jurisdiction in which that Fund is then making sales of its shares or in which
its shares are then qualified for sale, the Adviser will pay or reimburse such
Fund for that excess up to the amount of its advisory fee payable with respect
to that Fund during that fiscal year. The amount of the monthly advisory fee
payable under Paragraph 4 hereof shall be reduced to the extent that the monthly
expenses of that Fund, on an annualized basis, would exceed the foregoing
limitation. At the end of each fiscal year of the Trust, if the aggregate annual
expenses chargeable to any Fund for that year exceed the foregoing limitation
based upon the average of the monthly average net asset value of that Fund for
the year, the Adviser will promptly reimburse that Fund for the amount of such
excess to the extent not already reimbursed by reduction of the monthly advisory
fee. In the event that such expenses are within the foregoing limitation, the
Trust shall be obligated to pay the Adviser excess amounts previously withheld
from the advisory fee during that fiscal year, provided that the amount of such
payment would not exceed the foregoing limitation.
In the event that this Agreement (i) is terminated with respect to any one
or more Funds as of a date other than the last day of the fiscal year of the
Trust or (ii) commences with respect to one or more Funds as of a date other
than the first day of the fiscal year of the Trust, then the expenses of such
Fund or Funds shall be annualized and the Adviser shall pay to, or receive from,
the applicable Fund or Funds a pro rata portion of the amount that the
Adviser would have been required to pay or would have received, if any, had this
Agreement remained in effect with respect to such Fund or Funds for the full
fiscal year.
6. RELATIONS WITH TRUST.
Subject to and in accordance with the Master Trust Agreement and By-Laws
of the Trust and the organizational or governing documents of the Adviser, it is
understood that Trustees, officers, agents and shareholders of the Trust are or
may be interested in the Adviser and its affiliates (or any successor thereof)
as directors, officers, or otherwise, that directors, officers, agents and
shareholders of the Adviser and its affiliates (or any successor) are or may be
interested in the Trust as Trustees, officers, shareholders or otherwise, that
the Adviser (or any such successor thereof) is or may be interested in the Trust
as a shareholder or otherwise and that the effect of any such adverse interests
shall be governed by said Master Trust Agreement, By-Laws and organization or
governing documents. In addition, brokerage transactions for the Trust may be
effected through affiliates of the Adviser if approved by the Board of Trustees,
subject to the rules and regulations of the Securities and Exchange Commission.
7. COMPLIANCE WITH APPLICABLE REGULATIONS.
In performing its duties hereunder, the Adviser
(a) shall establish compliance procedures reasonably calculated to ensure
compliance at all times with: all applicable provisions of the 1940 Act and the
Advisers Act, and any rules and regulations adopted thereunder; Subchapter M of
the Internal Revenue Code of 1986, as amended; the provisions of the
Registration Statement; the provisions of the Declaration and the By-Laws of the
Trust, as the same may be amended from time to time; and any other applicable
provisions of state, federal or foreign law.
(b) acknowledges that the Trust has adopted a written code of ethics
complying with the requirements of Rule 17j-1 under the Act and that the Adviser
and certain of its employees, officers and directors may be subject to reporting
requirements thereunder and, accordingly, agrees that it shall, on a timely
basis, furnish, and shall cause its employees, officers and directors to
furnish, to the Trust, all reports and information required to be provided under
such code of ethics with respect to such persons.
(c) agrees that it will maintain for the Trust all and only such records
as required under Rules 31a-1 and 31a-2 under the 1940 Act in respect to its
services hereunder and that such records are the property of the Trust and
further agrees to surrender promptly to the Trust any such records upon the
Trust's request all in accordance with Rule 31a-3 under the 1940 Act.
8. LIABILITY OF ADVISER.
Neither the Adviser nor its officers, directors, members, managers,
employees, agents or controlling persons or their respective affiliates or
assigns (collectively, "Related Persons") shall be liable for any error of
judgment or mistake of law or for any loss suffered by the Trust or its
shareholders in connection with the matters to which this Agreement relates;
provided that no provision of this Agreement shall be deemed to protect the
Adviser or any Related Person against any liability to the Trust or its
shareholders to which it might otherwise be subject by reason of any willful
misfeasance, bad faith or negligence in the performance of its duties or the
reckless disregard of its obligations and duties under this Agreement. Nor shall
any provision hereof be deemed to protect any Trustee or officer of the Trust
against any such liability to which he might otherwise be subject by reason of
any willful misfeasance, bad faith or negligence in the performance of his
duties or the reckless disregard of his obligations and duties.
9. DURATION AND TERMINATION OF THIS AGREEMENT.
(a) Duration. This Agreement shall become effective with respect to
the Initial Fund on the date hereof and, with respect to any additional Fund, on
the date of receipt by the Trust of notice from the Adviser in accordance with
paragraph 1(b) hereof that the Adviser is willing to serve as Adviser with
respect to such Fund. Unless terminated as herein provided, this Agreement shall
remain in full force and effect until August 25, 2005 with respect to the
Initial Fund and, with respect to each additional Fund, for two years from the
date on which such Fund becomes a Fund hereunder. Subsequent to such initial
periods of effectiveness, this Agreement shall continue in full force and effect
for periods of one year thereafter with respect to each Fund so long as such
continuance with respect to such Fund is approved at least annually (a) by
either the Trustees of the Trust or by vote of a majority of the outstanding
voting securities (as defined in the 1940 Act) of such Fund, and (b), in either
event, by the vote of a majority of the Trustees of the Trust who are not
parties to this Agreement or "interested persons" (as defined in the 1940 Act)
of any such party, cast in person at a meeting called for the purpose of voting
on such approval. Notwithstanding the foregoing provisions of this Section 8(a),
the continuance of this Agreement with respect to the Initial Fund or any
additional Fund is subject to the approval of this Agreement by a majority of
the outstanding voting securities of that Fund at the first meeting of
shareholders after this Agreement becomes effective with respect to that Fund.
(b) Amendment. Any amendment to this Agreement shall become
effective with respect to a Fund upon approval of the Adviser, the Fund and if
required by applicable law, a majority of the outstanding voting securities (as
defined in the 1940 Act) of that Fund.
(c) Termination. This Agreement may be terminated with respect to
any Fund at any time, without payment of any penalty, by vote of the Trustees or
by vote of a majority of the outstanding voting securities (as defined in the
1940 Act) of that Fund, or by the Adviser, in each case on sixty (60) days'
prior written notice to the other party.
(d) Automatic Termination. This Agreement shall automatically and
immediately terminate in the event of its assignment (as defined in the 1940
Act).
(e) Approval, Amendment or Termination by Individual Fund. Any
approval, amendment or termination of this Agreement by the holders of a
majority of the outstanding voting securities (as defined in the 1940 Act) of
any Fund shall be effective to continue, amend or terminate this Agreement with
respect to any such Fund notwithstanding (i) that such action has not been
approved by the holders of a majority of the outstanding voting securities of
any other Fund affected thereby, and (ii) that such action has not been approved
by the vote of a majority of the outstanding voting securities of the Trust,
unless such action shall be required by any applicable law or otherwise.
10. SERVICES NOT EXCLUSIVE.
The services of the Adviser to the Trust hereunder are not to be deemed
exclusive, and the Adviser and its affiliates shall be free to render similar
services to others so long as the Adviser's services hereunder are not impaired
thereby. It is understood that the persons employed by the Adviser to assist in
the performance of its duties hereunder will not devote their full time to such
services and nothing hereunder contained shall be deemed to limit or restrict
the right of the Adviser to engage in or devote time and attention to other
businesses or to render services of whatever kind or nature.
11. SUBCONTRACTORS.
The Trust hereby agrees that the Adviser may subcontract for the
performance of any of the services contemplated to be rendered by the Adviser to
any Fund hereunder, which subcontractors may be affiliates of the Adviser.
12. INTERIM CONTRACT PROVISIONS.
Notwithstanding any other provision of this Agreement:
(a) Prior to this Agreement being approved by a vote of a majority
of the Initial Fund's outstanding voting securities in accordance with the 1940
Act: (i) in no event shall compensation paid to the Adviser with respect to the
Fund's hereunder exceed the amount permitted by Rule 15a-4 under the 1940 Act;
(ii) all fees payable to the Adviser with respect to the Initial Fund hereunder
shall be held in an interest-bearing escrow account with the Fund's custodian or
a bank (the "Escrow Account"); and (iii) this Agreement may be terminated at any
time without the payment of any penalty, by vote of the Trustees of the Trust or
by a vote of a majority of the outstanding voting securities of the Initial Fund
on 10 days' prior written notice to the Adviser. Funds held in the Escrow
Account, including interest earned, shall be paid to the Adviser promptly after
approval of this Agreement by the vote of a majority of the Initial Fund's
outstanding voting securities in accordance with the 1940 Act, provided that
such approval is obtained no later than 150 days after the date of this
Agreement.
(b) If this Agreement is not approved by a vote of a majority of the
Initial Fund's outstanding voting securities within the time period stated above
in (a), (i) this Agreement shall immediately terminate; and (ii) the Adviser
shall receive from the Escrow Account the lesser of: (a) the sum of the amount
of any costs incurred by the Adviser in performing its duties with respect to
the Initial Fund under this Agreement prior to such termination plus any
interest earned on that amount, and (b) the sum of the amount deposited in the
Escrow Account plus any interest earned on that amount.
13. LIMITATION OF LIABILITY.
The term "Lend Lease Funds" means and refers to the Trustees from time to
time serving under the Master Trust Agreement of the Trust dated October 28,
1999 as the same may subsequently thereto have been, or subsequently hereto may
be, amended. It is expressly agreed that the obligations of the Trust hereunder
shall not be binding upon any of the Trustees, shareholders, nominees, officers,
agents or employees of the Trust personally, but shall bind only the trust
property of the Trust, as provided in the Master Trust Agreement. The execution
and delivery of this Agreement have been authorized by the Trustees and signed
by the President of the Trust, acting as such, and neither such authorization by
such Trustees nor such execution and delivery by such officer shall be deemed to
have been made by any of them individually or to impose any liability on any of
them personally, but shall bind only the trust property of the Trust as provided
in its Master Trust Agreement.
14. RESERVATION OF NAME.
The parties hereby acknowledge that the Adviser has reserved the right to
grant the non-exclusive use of the name "Adelante" or any derivative thereof to
any other investment company, investment adviser, distributor or other business
enterprise, and to withdraw from the Trust the use of the name "Adelante." The
name "Adelante" will continue to be used by the Trust so long as such use is
mutually agreeable to the Adviser and the Trust.
15. MISCELLANEOUS.
(a) Notice. Any notice under this Agreement shall be in writing,
addressed and delivered or mailed, postage prepaid, to the other party at such
address as such other party may designate in writing for the receipt of such
notices.
(b) Severability. If any provision of this Agreement 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 Agreement shall be construed in accordance
with and governed by the laws of the State of Delaware without regard to
principles of conflict of laws.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first set forth above.
[Signature lines omitted]
Schedule A
to the
Advisory Agreement
between Lend Lease Funds
and
Adelante Capital Management LLC
The Trust shall pay the Adviser compensation at an annual rate multiplied
by the average daily net asset value of each Fund as follows:
Fund Fee (in basis points)
---- ---------------------
Lend Lease U.S. Real Estate Securities Fund 80
Such fee shall be accrued daily and paid as soon as practical after the last day
of each calendar month.
From time to time, the Adviser may voluntarily waive all or a portion of
the advisory fee payable with respect to a Fund and/or, on a class-by-class
basis, pay or reimburse the Trust for a Fund's expenses. In addition to any
amounts otherwise payable to the Adviser as an advisory fee for current services
under the Investment Management Agreement, the Trust shall be obligated to pay
the Adviser all amounts previously waived, paid or reimbursed by the Adviser
with respect to a Fund, provided that the amount of such additional payment in
any year, together with all other expenses of the Fund (excluding portfolio
transaction costs such as brokerage charges, interest on borrowings, margin
expenses and similar expenses), in the aggregate, would not cause the Fund's
expense ratio for each class of shares in such year to exceed the following
annual rate multiplied by the average daily net asset value of the respective
class of such Fund, and provided further that no additional payments shall be
made with respect to amounts waived, paid or reimbursed more than three (3)
years prior to the date the Fund accrues a liability with respect to such
additional payment:
Lend Lease U.S. Real Estate Securities Fund
Class Maximum Expense Ratio (in basis points)
- ----- ---------------------------------------
Class A Shares 150
Class K Shares 125
Class Y Shares 97
As adopted with respect to Lend Lease U.S. Real Estate Securities Fund on
August 25, 2004.