EXHIBIT (5)(b)
ADDENDUM NO. 1 TO ADVISORY AGREEMENT
This Addendum, dated as of the 27th day of June 1997, is
entered into between PEGASUS FUNDS (the "Trust"), a Massachusetts business
trust, and FIRST CHICAGO NBD INVESTMENT MANAGEMENT COMPANY ("FCNIMCO"), a
registered investment adviser.
WHEREAS, the Trust, and FCNIMCO have entered into an Advisory
Agreement dated April 12, 1996 ("Advisory Agreement"), pursuant to which the
Trust appointed FCNIMCO to act as investment adviser ("Adviser") to the
Trust's Money Market, Treasury Money Market, Municipal Money Market, Michigan
Municipal Money Market, Cash Management, U.S. Government Securities Cash
Management, Treasury Prime Cash Management, Growth, International Equity,
Equity Index, Growth and Value, Intrinsic Value, Mid-Cap Opportunity, Equity
Income, Small-Cap Opportunity, Bond, Short Bond, Michigan Municipal Bond,
Intermediate Municipal Bond, Municipal Bond, Income, Intermediate Bond,
International Bond, Managed Assets Balanced, Managed Assets Conservative and
Managed Assets Growth Funds (each a "Fund");
WHEREAS, Article 1(b) of the Advisory Agreement provides that
in the event the Trust establishes one or more additional portfolios with
respect to which it desires to retain FCNIMCO to act as the Adviser under the
Advisory Agreement, the Trust shall so notify FCNIMCO in writing and if
FCNIMCO is willing to render such services it shall notify the Trust in
writing, and the compensation to be paid to FCNIMCO pursuant to Article 5 of
the Advisory Agreement;
WHEREAS, pursuant to Article 1(b) of the Advisory Agreement,
the Trust has notified FCNIMCO that it has established the Treasury Cash
Management and High Yield Bond Funds and that it desires to retain FCNIMCO to
act as the Adviser therefor, and FCNIMCO has notified the Trust that it is
willing to serve as Adviser for such Funds.
NOW THEREFORE, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. Appointment. The Trust hereby appoints FCNIMCO to act as
Adviser to the Trust for the Treasury Cash Management Fund and High Yield
Bond Fund for the period and on the terms set forth in the Advisory
Agreement. FCNIMCO 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, the Trust will pay the Adviser,
and the Adviser will accept as full compensation therefor, a fee, computed
daily and payable monthly, at the annual rate of .20% and .70% of the
Treasury Cash Management and High Yield Bond Funds' average daily net assets,
respectively.
3. Capitalized Terms. From and after the date hereof, the term
"Fund" as used in the Advisory Agreement shall be deemed to include the
Treasury Cash Management Fund and High Yield Bond Fund. Capitalized terms
used herein and not otherwise defined shall have the meanings ascribed to
them in the Advisory Agreement.
4. Miscellaneous. 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.
IN WITNESS WHEREOF, the undersigned have executed this
Addendum as of the date and year first above written.
PEGASUS FUNDS
By: /s/ XXXXXX X. XXXXXXXXXX
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Xxxxxx X. Xxxxxxxxxx
President and Trustee
FIRST CHICAGO NBD INVESTMENT
MANAGEMENT COMPANY
By: /s/ XXXXX XXXXX
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Xxxxx Xxxxx
Managing Director
