(the "Agreement"), dated as of November 6, 1996,
by and between Domini Social Index Portfolio, a New York trust (the "Trust"),
and Kinder, Lydenberg, Domini & Co., Inc., a Massachusetts corporation ("KLD" or
the "Sponsor").
W I T N E S S E T H:
WHEREAS, the Trust 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 Trust wishes to engage KLD to provide certain oversight,
administrative, expense payment and management services, and KLD is willing to
provide such oversight, administrative, expense payment and management services
to the Trust, 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 SPONSOR. Subject to the direction and control of the
Board of Trustees of the Trust, the Sponsor shall perform such oversight,
administrative, expense payment and management services as may from time to time
be reasonably requested by the Trust, which shall include without limitation:
(a) providing office space, equipment and clerical personnel necessary for
maintaining the organization of the Trust and for performing the oversight,
administrative, expense payment and management functions herein set forth; (b)
arranging, if desired by the Trust, for Directors, officers or employees of the
Sponsor to serve as Trustees, officers or agents of the Trust if duly elected or
appointed to such positions and subject to their individual consent and to any
limitations imposed by law; (c) supervising the overall administration of the
Trust, including the updating of corporate organizational documents, and the
negotiation of contracts and fees with and the monitoring and coordinating of
performance and xxxxxxxx of the Trust's transfer agent, custodian, administrator
and expense payment agent and other independent contractors or agents; (d)
preparing and, if applicable, filing all documents required for compliance by
the Trust with applicable laws and regulations, including registration
statements on Form N-1A or similar forms, as applicable, and semi-annual and
annual reports to the Trust's investors, proxy statements and reviewing
(including coordinating the preparing of, but not preparing) tax returns; (e)
preparation of agendas and supporting documents for and minutes of meetings of
Trustees, committees of Trustees and preparation of notices, proxy statements
and minutes of meeting's of investors; (f) arranging for maintenance of books
and records of the Trust; (g) maintaining telephone coverage to respond to
investor inquiries regarding matters to which this Agreement pertains to which
the transfer agent is unable to respond; (h) providing reports and assistance
regarding the Trust's compliance with securities and tax laws and each series
investment objectives and restrictions; (i) arranging for dissemination of yield
and other performance information to newspapers and tracking services; (j)
arranging for and preparing annual renewals for fidelity bond and errors and
omissions insurance coverage; (k) developing a budget for the Trust,
establishing the rate of expense accruals and arranging for the payment of all
fixed and management expenses; (l) paying all the expenses of the Trust
described in Part A or Part B of the Trust's then-current Registration
Statement on Form N-1A file with the Securities and Exchange Commission (the
"Registration Statement") as further described in Section 2 below; and (m)
answering questions from the general public, the media and investors in the
Trust regarding (i) the securities holdings of the Trust; (ii) any limits in
which the Trust invests; (iii) the social investment philosophy of the Trust;
and (iv) the proxy voting philosophy and shareholder activism philosophy of the
Trust. Notwithstanding the foregoing, the Sponsor shall not be deemed to have
assumed, pursuant to this Agreement, any duties with respect to, and shall not
be responsible for, the management of the Trust's assets or the rendering of
investment advice and supervision with respect thereto or the distribution of
interests ("Shares") of the Trust, nor shall the Sponsor be deemed to have
assumed or have any responsibility with respect to functions specifically
assumed by any transfer agent or custodian of the Trust.
2. ALLOCATION OF CHARGES AND EXPENSES. (a) KLD shall pay the entire
salaries and wages of all of the Trust's Trustees, officers and agents who
devote part or all of their time to the affairs of KLD and Signature
Broker-Dealer Services, Inc. or its affiliates, and the wages and salaries of
such persons shall not be deemed to be expenses incurred by the Trust for
purposes of this Section 2. (b) The Sponsor shall pay all of the Trust's
operating expenses including, without limitation, compensation of Trustees not
affiliated with the Sponsor; governmental fees; membership dues in the
Investment Company Institute allocable to the Trust; fees and expenses of the
Trust's independent auditors, of legal counsel and of any investment adviser or
manager, administrator, transfer agent, distributor, registrar or dividend
disbursing agent of the Trust; expenses of preparing, printing and mailing
reports, notices, proxy statements and reports to the Trust's investors and
governmental officers and commissions; expenses connected with the execution,
recording and settlement of portfolio security transactions; insurance premiums;
fees and expenses of the Trust's custodian for all services to the Trust,
including safekeeping of funds and securities and maintaining required books and
accounts; expenses of calculating the net asset value of shares of the Trust;
expenses of meetings of investors; and expenses relating to the issuance,
registration and qualification of Shares of the Trust but excluding (y) the fees
payable by the Trust to the Sponsor pursuant to Section 3 of this Agreement and
(z) brokerage fees and commissions, interest charges, taxes and extraordinary
expenses.
3. COMPENSATION OF THE SPONSOR. For the services to be rendered and the
facilities to be provided by the Sponsor hereunder, the Trust shall pay to the
Sponsor a fee computed and paid monthly at an annual rate of 0.20% of the
Trust's average daily net assets for its then-current fiscal year. If KLD serves
as the Sponsor for less than the whole of any period specified in this Section
3, the compensation to KLD, as Sponsor, shall be prorated. For purposes of
computing the fees payable to the Sponsor hereunder, the value of the Trust's
net assets shall be computed in the manner specified in the Trust's then-current
Registration Statement. Notwithstanding the foregoing, in the event of the
termination, pursuant to Section 6 hereof, of the rights and obligations of the
parties under the "expense payment provisions" (as defined in Section 6), the
amount payable to KLD by the Trust under this Section 3 shall thereafter be
reduced to an annual rate of 0.025% of the Trust's average daily net assets and
in the event of the termination, pursuant to Section 6 hereof, of the rights and
obligations of the parties under the "non-expense payment provisions" as defined
in Section 6), the amount payable to KLD by the Trust under this Section 3 shall
thereafter be reduced to an annual rate equal to 0.175% of the Trust's average
daily net assets plus any fee payable to the Trust's administrator, but not
exceeding, in the aggregate, an annual rate of 0.20% of the Trust's average
daily net assets.
DOM07H
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4. LIMITATION OF LIABILITY OF THE SPONSOR. The Sponsor shall not be
liable for any error of judgment or mistake of law or for any act or omission in
the oversight, administration, expense payment or management of the Trust or the
performance of its duties hereunder, except for willful misfeasance, bad faith
or gross negligence in the performance of its duties, or by reason of the
reckless disregard of its obligations and duties hereunder. As used in this
Section 4, the term "Sponsor" shall include KLD and/or any of its affiliates and
the Directors, officers and employees of KLD and/or any of its affiliates.
5. ACTIVITIES OF THE SPONSOR. The services of the Sponsor to the Trust
are not to be deemed to be exclusive, KLD being free to render oversight,
administrative, expense payment and/or other services to other parties. It is
understood that Trustees, officers, and investors of the Trust are or may become
interested in the Sponsor and/or any of its affiliates, as Directors, officers,
employees, or otherwise, and that Directors, officers and employees of the
Sponsor and/or any of its affiliates are or may become similarly interested in
the Trust and that the Sponsor and/or any of its affiliates may be or become
interested in the Trust as an investor or otherwise.
6. 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, unless
terminated as set forth in this Section 6.
This Agreement may not be altered or amended, except by an instrument
in writing, and executed by both parties. The rights and obligations of the
parties hereto under subsection (l) of Section 1 and subsection (b) of Section 2
of this Agreement (the "expense payment provisions") will terminate on December
31, 1999 unless sooner terminated by the mutual agreement of the parties or
pursuant to the following sentence. In the event the Letter Agreement between
KLD and Signature Broker-Dealer Services, Inc. dated November 6, 1996, relating
to expense payment arrangements, shall cease to be in full force and effect, KLD
may, at its option, terminate such rights and obligations under those
subsections of this Agreement, without the consent of the Trust. The rights and
obligations of the parties under Sections 1 and 2 of this Agreement other than
the expense payment provisions (the "non-expense payment provisions"), may be
terminated at any time, without the payment of any penalty, with respect to the
Trust, by the Board of the Trust, or by the Sponsor, in each case on not less
than 60 days written notice to the other party, and upon the termination of all
of the rights and obligations of the parties under Sections 1 and 2 hereof in
accordance with this Section, this Agreement shall terminate.
7. SUBCONTRACTING BY KLD. KLD may subcontract for the performance of
some or all of KLD's obligations hereunder with any one or more persons;
PROVIDED, HOWEVER, that KLD shall not enter into any such subcontract unless the
Trustees of the Trust shall have found the subcontracting party to be qualified
to perform the obligations sought to be subcontracted; and PROVIDED, FURTHER,
that, unless the Trust otherwise expressly agrees in writing, KLD shall be as
fully responsible to the Trust for the acts and omissions of any subcontractor
as it would be for its own acts or omissions.
DOM07H
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8. SEVERABILITY. If any provision of this Agreement shall become or
shall be found to be invalid by a court decision, statute, rule or otherwise,
the remainder of this Agreement shall not be affected thereby.
9. NOTICE. Any notices under this Agreement shall be in writing
addressed and delivered personally (or by telecopy) or mailed postage-paid, to
the other party at such address as such other party may designate in accordance
with this paragraph for the receipt of such notice. Until further notice to the
other party, it is agreed that the address of the Trust shall be 0 Xx. Xxxxx
Xxxxxx, 0xx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, and the address of KLD shall be
000 Xx Xxxxxx Xxxxxx, Xxxxxxxxx, XX 00000.
10. MISCELLANEOUS. Each party agrees to perform such further actions
and execute such further documents as are necessary to effectuate the purposes
hereof. This Agreement shall be construed and enforced and interpreted in
accordance with and governed by the laws of the Commonwealth of Massachusetts
without reference to principles of conflicts of law. The captions in this
Agreement are included for convenience only and in no way define or delimit any
of the provisions hereof or otherwise affect their construction or effect. This
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original, but such counterparts shall, together, constitute only
one instrument.
IN WITNESS WHEREOF, the parties hereto 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. The
undersigned Trustee of the Trust has executed this Agreement not individually,
but as a Trustee under the Trust's Declaration of Trust, dated June 7, 1989, as
amended, and the obligations of this Agreement are not binding upon any of the
Trustees or investors of the Trust individually, but bind only the Trust estate.
DOMINI SOCIAL INDEX PORTFOLIO
By
Xxx X. Xxxxxx
President
KINDER, LYDENBERG, DOMINI & CO., INC.
By
Xxx X. Xxxxxx
DOM07H
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