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EXHIBIT 5(g)
ASSUMPTION AGREEMENT
AGREEMENT made as of , 1998 between THE NORTHERN
TRUST COMPANY, an Illinois state bank ("Northern"), and NORTHERN TRUST
QUANTITATIVE ADVISORS, INC. ("NTQA"), a wholly-owned, indirect subsidiary of THE
NORTHERN TRUST CORPORATION.
WHEREAS, Northern Funds is registered as an open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act");
WHEREAS, Northern has been previously appointed as investment
adviser to the Small Cap, Small Cap Index and Stock Index Funds (the "Funds") of
Northern Funds pursuant to an Investment Advisory and Ancillary Services
Agreement between Northern and Northern Funds dated April 1, 1994 (as
subsequently amended) (the "Investment Advisory Agreement"); and
WHEREAS, Northern and NTQA desire to have NTQA be the investment
adviser with respect to each Fund pursuant to the Investment Advisory Agreement.
NOW, THEREFORE, the parties hereto, intending to be legally bound,
agree as follows:
1. NTQA hereby assumes all rights and obligations of Northern
under the Investment Advisory Agreement with respect to the Funds.
2. Northern hereby represents that (i) the management personnel of
Northern responsible for providing investment advisory services to the Funds
under the Investment Advisory Agreement, including the portfolio managers and
the supervisory personnel, are employees of NTQA where they will continue to
provide such services for the Funds, and (ii) both Northern and NTQA remain
wholly-owned subsidiaries of The Northern Trust Corporation. Consequently,
Northern believes that the proposed assumption does not involve a change in
actual control or actual management with respect to the investment adviser or
the Funds.
3. Both parties hereby agree that this Assumption Agreement shall
be attached to and made a part of the Investment Advisory Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be executed by their officers designated below as of the day and year first
above written.
Attest: THE NORTHERN TRUST COMPANY
____________________________ By ________________________________
(Authorized Officer)
Attest: NORTHERN TRUST QUANTITATIVE ADVISORS, INC.
____________________________ By ________________________________
(Authorized Officer)
