INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT, dated as of May 1, 1990, as amended and
restated as of October 4, 1996, by and between the DOMINI SOCIAL INDEX
PORTFOLIO, a New York trust (the "Portfolio"), and Kinder, Lydenberg, Domini &
Co., Inc., a Massachusetts corporation ("KLD" or the "Adviser").
WITNESSETH:
WHEREAS, the Portfolio is engaged in business as an open-end investment
company registered under the Investment Company Act of 1940 (collectively with
the rules and regulations promulgated thereunder, the "1940 Act"); and
WHEREAS, the Portfolio wishes to engage the Adviser to provide certain
investment advisory services, and the Adviser is willing to provide such
investment advisory services to the Portfolio on the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and agreements of
the parties hereto as herein set forth, the parties covenant and agree as
follows:
1. DUTIES OF THE ADVISER. KLD shall act as the Adviser to the Portfolio and
as such shall furnish continuously an investment program by determining the
stocks to be included in the Domini Social Index (the "Index") and evaluating,
in accordance with the Adviser's social criteria, debt securities which may be
purchased by the Portfolio, subject always to the restrictions of the
Portfolio's Declaration of Trust, dated June 7, 1989, and By-laws, as each may
be amended from time to time (respectively, the "Declaration" and the
"By-Laws"), to the provisions of the 1940 Act and to the Portfolio's
then-current Registration Statement under the 0000 Xxx. The Adviser shall also
make recommendations as to the manner in which voting rights, rights to consent
to corporate action and any other rights pertaining to the securities held by
the Portfolio shall be exercised. Should the Board of Trustees of the Portfolio
at any time, however, make any definite determination as to policy concerning
the exercise of voting rights, rights to consent to corporate action or other
rights pertaining to the securities held by the Portfolio, and notify the
Adviser thereof in writing, the Adviser shall be bound by such determination for
the period, if any, specified in such notice or until similarly notified that
such determination has been revoked. The Adviser shall not be required not to do
any act or thing on behalf of the Portfolio not specifically described above,
including without limitation those actions to be taken by the Portfolio's
investment manager pursuant to the Investment Management Agreement as may be
amended from time to time without limiting the foregoing, it is understood that
the Adviser shall not be required to provide advice as to the investment merits
of particular securities or as to the purchase or sale of securities.
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2. ALLOCATION OF CHARGES AND EXPENSES. The Adviser shall furnish at its own
expense all necessary services, facilities and personnel in connection with its
responsibilities under Section 1 above. It is understood that the Portfolio will
pay all of its own expenses including, without limitation, compensation of
Trustees not "affiliated" with the Adviser; governmental fees; interest charges;
taxes; membership dues in the Investment Company Institute allocable to the
Portfolio; fees and expenses of independent auditors, of legal counsel and of
any transfer agent, administrator, registrar or dividend disbursing agent of the
Portfolio; fees of the Manager; expenses of preparing, printing and mailing
reports, notices, proxy statements and reports to governmental officers and
commissions and to investors in the Portfolio; expenses connected with the
execution, recording and settlement of security transactions; insurance
premiums; fees and expenses of the custodian for all services to the Portfolio,
including safekeeping of funds and securities and maintaining required books and
accounts; expenses of calculating the net asset value of the Portfolio; and
expenses of meetings of the Portfolio's investors.
3. COMPENSATION OF THE ADVISER. For the services to be rendered, the
Portfolio shall pay to the Adviser an investment advisory fee computed and paid
monthly at an annual rate equal to 0.025% of the Portfolio's average daily net
assets for its then-current fiscal year. If KLD serves as Adviser for less than
the whole of any period specified in this Section 3, the compensation to KLD, as
Adviser, shall be prorated.
4. COVENANTS OF THE ADVISER. The Adviser agrees that it will comply with
all applicable provisions of the Portfolio's Declaration and By-Laws and the
then-current Registration Statement of the Portfolio under the 1940 Act relative
to the Adviser and its Directors and officers.
5. LIMITATION OF LIABILITY OF THE ADVISER. The Adviser shall not be liable
for any error of judgment or mistake of law or for any loss arising out of any
act or omission in the performance of its duties hereunder, except for wilful
misfeasance, bad faith or gross negligence in the performance of its duties, or
by reason of reckless disregard of its obligations and duties hereunder. As used
in this Section 5, the term "Adviser" shall include Directors, officers and
employees of the Adviser as well as the corporation itself.
6. ACTIVITIES OF THE ADVISER. The services of the Adviser to the Portfolio
are not to be deemed to be exclusive, KLD being free to render investment
advisory and/or other services to others. It is understood that Trustees and
officers of, and investors in the Portfolio are or may be or may become
interested in the Adviser, as Directors, officers, employees, or otherwise and
that Directors, officers and employees of the Adviser are or may become
similarly interested in the Portfolio and that the Adviser may be or may become
interested in the Portfolio as an investor or otherwise.
7. DURATION, TERMINATION AND AMENDMENTS OF THIS AGREEMENT. This
Agreement shall become effective as of the day and year first above written and
shall govern the relations between the parties hereto thereafter, and shall
remain in force until September 30,1991 on
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which date it will terminate unless its continuance after September 30, 1991 is
"specifically approved at least annually" (a) by the vote of a majority of the
Trustees of the Portfolio who are not "interested persons" of the Portfolio or
of the Adviser at a meeting specifically called for the purpose of voting on
such approval, and (b) by the Board of Trustees of the Portfolio or by "vote of
a majority of the outstanding voting securities" of the Portfolio.
This Agreement may be terminated at any time without the payment of any
penalty by the Trustees or by the "vote of a majority of the outstanding voting
securities" of the Portfolio, or by the Adviser, in each case on not more than
60 days' nor less than 30 days' written notice to the other party. This
Agreement shall automatically terminate in the event of its "assignment".
This Agreement may be amended only it such amendment is approved by the
"vote of a majority of the outstanding voting securities" of the Portfolio.
The terms "specifically approved at least annually", "vote of a majority of
the outstanding voting securities", "assignment", "affiliated person", and
"interested persons", when used in this Agreement, shall have the respective
meanings specified in, and shall be construed in a manner consistent with, the
1940 Act, subject, however, to such exemptions as may be granted by the
Securities and Exchange Commission under said Act.
IN WITNESS WHEREOF, the parties thereto have caused this Agreement to be
executed and delivered in their names and on their behalf by the undersigned,
thereunto duly authorized, all as of the day and year first above written.
DOMINI SOCIAL INDEX PORTFOLIO
Xxx X. Xxxxxx
President
KINDER, LYDENBERG, DOMINI & CO., INC.
By:
Title:
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