SPECIAL SERVICING AGREEMENT
THIS SPECIAL SERVICING AGREEMENT ("Agreement"), made as of the 1st day of
January, 1998, by and between X. XXXX PRICE SPECTRUM FUND, INC., on behalf of
two of its separate series, X. XXXX PRICE SPECTRUM INCOME FUND and X. XXXX PRICE
SPECTRUM GROWTH FUND (collectively hereafter referred to as the "Spectrum
Funds"), EACH FUND LISTED ON APPENDIX A attached hereto (as such Appendix A may
be amended from time to time) and which evidences its agreement to be bound
separately and individually hereby by executing a copy of this Agreement (such
funds hereinafter called the "Underlying Funds"), and X. XXXX PRICE ASSOCIATES,
INC. ("Price Associates").
W I T N E S S E T H:
WHEREAS, the Spectrum Funds and each of the Underlying Funds are registered
as open-end, management investment companies under the Investment Company Act of
1940, as amended ("the Act").
WHEREAS, the Spectrum Funds, the Underlying Funds, and certain other funds
(the "Other Funds") sponsored and advised by Price Associates or Xxxx
Xxxxx-Xxxxxxx ("Price Xxxxxxx") have entered into an agreement ("Transfer Agency
Agreement") dated January 1, 1998, with X. Xxxx Price Services, Inc. ("Price
Services") for the provision of various transfer agency services in return for
such compensation as is set forth therein;
WHEREAS, the Spectrum Funds, the Underlying Funds, and the Other Funds have
entered into an agreement ("RPS Agreement") dated January 1, 1998, with X. Xxxx
Price Retirement Plan Services, Inc. ("Retirement Plan Services"), under which
Retirement Plan Services is to furnish or contract to furnish to the Spectrum
Funds, the Underlying Funds, and the Other Funds various participant account,
recordkeeping, and services for retirement plans in return for such compensation
as is set forth therein;
WHEREAS, the Spectrum Funds, the Underlying Funds, and the Other Funds have
entered into an agreement ("Fund Accounting Agreement") dated January 1, 1998,
with Price Associates for the provision of various accounting services in return
for such compensation as is set forth therein;
WHEREAS, the Spectrum Funds, the Underlying Funds, and the Other Funds have
entered into an agreement ("Custodian Agreement") dated September 28, 1987, as
amended, with State Street Bank and Trust Company ("State Street") under which
State Street is to furnish to the Spectrum Funds, the Underlying Funds
and the Other Funds various custodial services in return for such compensation
as is set forth in the Custodian Agreement;
WHEREAS, the Spectrum Funds have entered into an Investment Management
Agreement with Price Associates dated June 12, 1990, for the provision of
investment management services, and under such Agreement, Price Associates will
be responsible for the payment of various the Spectrum Funds expenses, including
expenses of the Spectrum Funds' organization, operations, and business not paid
for by the Underlying Funds pursuant to this Agreement;
WHEREAS, the Spectrum Funds will provide a means by which the Underlying
Funds can consolidate shareholder accounts in the Underlying Funds;
WHEREAS, such shareholder account consolidation can reduce the fees of the
Underlying Funds due Price Services and Retirement Plan Services under the
Transfer Agency Agreement and RPS Agreement, respectively (such reduction in
expenses hereinafter referred to as "Savings");
WHEREAS, the Spectrum Funds will invest their assets exclusively in the
Underlying Funds, except for cash needed for expenses, redemptions, or temporary
defensive purposes; and
WHEREAS, the Board of Directors/Trustees of each of the Underlying Funds
has determined it is reasonable to expect the aggregate expenses as described
below of the Spectrum Funds to be less than the estimated Savings to each of the
Underlying Funds from the operation of the Spectrum Funds; and such
determination by the Board of Directors/Trustees is reviewed annually prior to
renewing this Agreement.
NOW, THEREFORE, in consideration of the promises and mutual covenants
spelled out herein, it is agreed between and among the parties hereto as
follows:
1. SPECTRUM FUND EXPENSES
In accordance with the Fund Accounting Agreement, Price Associates will
calculate the amounts of the Spectrum Funds expenses, as set forth in the
Spectrum Funds' Investment Management Agreement ("Expenses"), due itself, State
Street, and other persons under the Transfer Agency, RPS, Fund Accounting,
Custodian, and Investment Management Agreements referred to above, as well as
any other amounts due other persons as a result of the Spectrum Funds
operations. However, under unusual circumstances, the parties may agree to
exclude certain amounts from Expenses.
2. UNDERLYING FUNDS' PAYMENT OF EXPENSES
Subject to Paragraph 3, each of the Underlying Funds will bear such Expenses in
proportion to the average daily value of its shares owned by the Spectrum Funds,
provided further that
no Underlying Fund will bear such Expenses in excess of the estimated Savings to
it ("Excess Expense").
3. PAYMENT BY PRICE ASSOCIATES
In accordance with the Spectrum Funds' Investment Management Agreement, Price
Associates agrees that it will bear any Excess Expense described in Paragraph 2.
Payment by Price Associates of any such Excess Expense will be made to the
appropriate Underlying Fund no later than 30 days after the close of the
Underlying Fund's fiscal year.
4. USE OF PRICE NAME
The Spectrum Funds may utilize the "X. Xxxx Price" name so long as this
Agreement remains in effect and the assets of the Spectrum Funds are invested
solely in shares of the Underlying Funds (except for such cash or cash items as
may be maintained from time to time to meet current expenses and redemptions).
5. SPECTRUM FUNDS' INVESTMENT IN UNDERLYING FUNDS
The Spectrum Funds will utilize assets deposited with the custodian of the
Spectrum Funds, State Street, from the sale of the Spectrum Funds' shares, to
promptly purchase shares of the Underlying Funds, and will undertake redemption
or exchange of such shares of the Underlying Funds in the manner provided by the
objectives and policies of the Spectrum Funds.
6. OPINION OF COUNSEL
At any time any of the parties hereto may consult legal counsel in respect of
any matter arising in connection with this Agreement, and no such party shall be
liable for any action taken or omitted by it in good faith in accordance with
such instructions or with the advice or opinion of such legal counsel.
7. LIABILITIES
No party hereto shall be liable to any other party hereto for any action taken
or thing done by it or its agents or contractors in carrying out the terms and
provisions of this Agreement provided such party has acted in good faith and
without negligence or willful misconduct and selected its agents and contractors
with reasonable care.
8. TERM OF AGREEMENT; AMENDMENT; RENEWAL
The term of this Agreement shall begin on January 1, 1998, and unless sooner
terminated as herein provided, the Agreement shall remain in effect through
December 31, 1998. Thereafter, this Agreement shall continue from year to year
if such continuation is specifically approved at least annually by the Board of
Directors/Trustees of each Underlying Fund and the Spectrum Funds, including a
majority of the independent Directors/ Trustees of each such Fund. In
determining whether to renew this Agreement, the Directors/Trustees of the
Underlying Funds may request, and Price Associates will furnish, such
information relevant to determining the past and future relationship between the
Savings and Expenses. The Agreement may be modified or amended
from time to time by mutual agreement between the parties hereto. Upon
termination hereof, each party hereto will make appropriate arrangements to
satisfy its obligations hereunder. This Agreement may be amended in the future
to include as additional Fund parties to the Agreement other investment
companies for which Xxxxx-Xxxxxxx or Price Associates serves as investment
manager.
9. ASSIGNMENT
This Agreement shall not be assigned or transferred, either voluntarily or
involuntarily, by operation of law or otherwise, without the prior written
consent of the Underlying Funds and the Spectrum Funds. The Agreement shall
automatically and immediately terminate in the event of its assignment without
the prior written consent of such Funds.
10. NOTICE
Any notice under this Agreement shall be in writing, addressed and delivered or
sent by registered or certified mail, postage prepaid, to the other party at
such address as such other party may designate for the receipt of such notices.
Until further notice to the other parties, it is agreed that for this purpose
the address of all parties to this Agreement is 000 Xxxx Xxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxx 00000, Attention: Secretary.
11. INTERPRETATIVE PROVISIONS
In connection with the operation of this Agreement, the parties may agree from
time to time on such provisions interpretative of or in addition to the
provisions of this Agreement as may in their joint opinion be consistent with
the general tenor of this Agreement. Any such interpretative or additional
provisions are to be signed by all parties and annexed hereto, but no such
provisions shall contravene any applicable Federal or state law or regulation
and no such interpretative or additional provision shall be deemed to be an
amendment of the Agreement.
12. STATE LAW
This Agreement shall be construed and enforced in accordance with and governed
by the laws of the State of Maryland.
13. CAPTIONS
The captions in the Agreement are included for convenience of reference only and
in no way define or limit any of the provisions hereof or otherwise affect their
construction or effect.
14. UNDERLYING FUNDS
Each of the Funds listed in Appendix A agree to be bound, separately and
individually, to the terms and conditions of this Agreement. Under no
circumstances will any Underlying Fund be liable for any obligation of any other
Underlying Fund.
IN WITNESS WHEREOF, the parties have caused the Agreement to be executed as
of the day and year first above written.
ATTEST:
X. XXXX PRICE SPECTRUM FUND, INC.,
on behalf of X. XXXX PRICE SPECTRUM INCOME FUND
and X. XXXX PRICE SPECTRUM GROWTH FUND
/s/Xxxxxxxx X. Xxxxxxx By: /s/Xxxxx Xxx Xxxx
Xxxxxxxx X. Xxxxxxx, Xxxxx Xxx Xxxx, President
Assistant Secretary
X. XXXX PRICE ASSOCIATES, INC.
/s/Xxxxxxx X. Xxx Xxxx By: /s/Xxxxx X. Xxxxxxx
Xxxxxxx X. Xxx Xxxx, Xxxxx X. Xxxxxxx, Managing Director
Assistant Secretary
EACH OF THE FUNDS LISTED IN APPENDIX A HERETO,
SEPARATELY AND INDIVIDUALLY
/s/Xxxxxxxx X. Xxxxxxx By: /s/Xxxxx X. Xxxxxxx
Xxxxxxxx X. Xxxxxxx, Xxxxx X. Xxxxxxx, Vice President
Assistant Secretary
APPENDIX A
X. Xxxx Price Blue Chip Growth Fund, Inc.
X. Xxxx Price Equity Income Fund
X. Xxxx Price GNMA Fund
X. Xxxx Price Growth & Income Fund, Inc.
X. Xxxx Price Growth Stock Fund, Inc.
X. Xxxx Price High Yield Fund, Inc.
X. Xxxx Price International Funds, Inc., on behalf of the
X. Xxxx Price Emerging Markets Bond Fund
X. Xxxx Price International Bond Fund and
X. Xxxx Price International Stock Fund
X. Xxxx Price Mid-Cap Value Fund, Inc.
X. Xxxx Price New Era Fund, Inc.
X. Xxxx Price New Horizons Fund, Inc.
X. Xxxx Price New Income Fund, Inc.
X. Xxxx Price Short-Term Bond Fund, Inc.
X. Xxxx Price Summit Funds, Inc., on behalf of the
X. Xxxx Price Summit Cash Reserves Fund
X. Xxxx Price U.S. Treasury Funds, Inc., on behalf of the
X. Xxxx Price U.S. Treasury Long-Term Fund
