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SPECIAL SERVICING AGREEMENT
THIS SPECIAL SERVICING AGREEMENT ("Agreement"), made as of
this 12th day of November, 1996, by and between X. XXXX PRICE
SPECTRUM FUND, INC. ("Spectrum Fund"), on behalf of its separate
series, X. XXXX PRICE SPECTRUM INTERNATIONAL FUND ("Spectrum
International"), EACH FUND LISTED ON APPENDIX A attached hereto
(as such Appendix A may be amended from time to time) and which
evidences their agreement to be bound separately and individually
hereby by executing a copy of this Agreement (such funds
hereinafter called the "Underlying Funds"), X. XXXX PRICE
ASSOCIATES, INC. ("Price Associates") and XXXX XXXXX-XXXXXXX
INTERNATIONAL, INC. ("Xxxxx-Xxxxxxx").
W I T N E S S E T H:
WHEREAS, Spectrum International 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, Spectrum International, the Underlying Funds, and
certain other funds (the "Other Funds") sponsored and advised by
Xxxxx-Xxxxxxx or Price Associates have entered into an agreement
("Transfer Agency Agreement") dated January 1, 1996, as amended,
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, Spectrum International, the Underlying Funds, and
the Other Funds have entered into an agreement ("RPS Agreement")
dated January 1, 1996, as amended, with X. Xxxx Price Retirement
Plan Services, Inc. ("Retirement Plan Services") under which
Retirement Plan Services is to furnish or contract to furnish to
Spectrum International, the Underlying Funds, and the Other Funds
various participant account, record keeping, and services for
retirement plans in return for such compensation as is set forth
therein;
WHEREAS, Spectrum International, the Underlying Funds, and
the Other Funds have entered into an agreement ("Fund Accounting
Agreement") dated January 1, 1996, as amended, with Price
Associates for the provision of various accounting services in
return for such compensation as is set forth therein;
WHEREAS, Spectrum International, 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
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Trust Company ("State Street") under which State Street is to
furnish to Spectrum International, the Underlying Funds and the
Other Funds various custodial services in return for such
compensation as is set forth in the Custodian Agreement;
WHEREAS, Spectrum International has entered into an
Investment Management Agreement with Xxxxx-Xxxxxxx dated November
12, 1996 for the provision of investment management services, and
under such Agreement, Xxxxx-Xxxxxxx will be responsible for the
payment of various Spectrum International expenses, including
expenses of Spectrum International's organization, operations,
and business not paid for by the Underlying Funds pursuant to
this Agreement;
WHEREAS, Spectrum International 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, Spectrum International will invest its assets
exclusively in the Underlying Funds, except for cash needed for
expenses, redemptions, or temporary defensive purposes; and
WHEREAS, the Board of Directors of each of the Underlying
Funds has determined it is reasonable to expect the aggregate
expenses as described below of Spectrum International to be less
than the estimated Savings to each of the Underlying Funds from
the operation of Spectrum International; and such determination
by the Board of Directors is based on the following factors,
among others as they apply to each Underlying Fund:
a. The amount of assets invested in each
Underlying Fund by Spectrum
International;
b. The average and median account sizes for
the Underlying Funds and Spectrum
International;
c. The rate at which Variable Expenses
(i.e., expenses for transfer agency
services, prospectuses, shareholder
reports and proxies) and Fixed Expenses
(i.e., expenses for accounting,
custodial, auditing and legal services,
state registration, filing, and directors
fees and organization and various
miscellaneous
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expenses) are incurred by Spectrum
International and the Underlying Funds;
d. The relationship between Variable and
Fixed Expenses in the Underlying Funds
and Spectrum International;
e. The source of monies flowing to Spectrum
International, and in particular:
(i) The extent to which investors
in Spectrum International
would have purchased one or
more of the Underlying Funds;
(ii) The extent to which an
investment in Spectrum
International represents a
consolidation of or reduction
in the rate of increase in
the number of accounts in the
Underlying Funds; and
(iii) The extent to which accounts
in Spectrum International
represent exchanges from the
Underlying Funds or new
investments.
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 INTERNATIONAL EXPENSES
In accordance with the Fund Accounting Agreement, Price
Associates will calculate the amounts of Spectrum
International expenses, as set forth in Spectrum
International's 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 Spectrum International 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 xxxx
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bear such Expenses in proportion to the average daily
value of its shares owned by each Portfolio of Spectrum
International, provided further that no Underlying Fund
will bear such Expenses in excess of the estimated
Savings to it ("Excess Expense").
3. PAYMENT BY XXXXX-XXXXXXX
In accordance with Spectrum International's Investment
Management Agreement, Xxxxx-Xxxxxxx agrees that it will
bear any Excess Expense described in Paragraph 2. Payment
by Xxxxx-Xxxxxxx 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
Spectrum International may utilize the "X. Xxxx Price"
name so long as this Agreement remains in effect and the
assets of Spectrum International 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 INTERNATIONAL INVESTMENT IN UNDERLYING FUNDS
Spectrum International will utilize assets deposited with
the custodian of Spectrum International, State Street,
from the sale of Spectrum International 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 Spectrum International.
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 November 12,
1996, and unless sooner terminated as herein provided,
the Agreement shall remain in effect through April 30,
1998.
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Thereafter, this Agreement shall continue from year to
year if such continuation is specifically approved at
least annually by the Board of Directors of each
Underlying Fund
and Spectrum International, including a majority of the
independent Directors of each such Fund. In determining
whether to renew this Agreement, the Directors 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 Spectrum International. 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
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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 ASSOCIATES, INC.
/S/XXXXXXX XXX XXXX By:/S/XXXXX X. XXXXXXX
Xxxxxxx 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
X. XXXX PRICE SPECTRUM FUND, INC.
on behalf of X. XXXX PRICE SPECTRUM
INTERNATIONAL FUND
/S/XXXXXXXX X. XXXXXXX By:/S/XXXXX X. XXXXX
Xxxxxxxx X. Xxxxxxx, Xxxxx X. Xxxxx, Chairman of the
Assistant Secretary Board
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XXXX XXXXX-XXXXXXX
INTERNATIONAL, INC.
/S/XXXXXXX XXX XXXX By:/S/M.XXXXX XXXXX
Xxxxxxx Xxx Xxxx, M. Xxxxx Xxxxx, Chairman of the
Assistant Secretary Board
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APPENDIX A
X. XXXX PRICE INTERNATIONAL FUNDS, INC. on behalf
of the
X. Xxxx Price International Discovery Fund
X. Xxxx Price International Stock Fund
X. Xxxx Price European Stock Fund
X. Xxxx Price New Asia Fund
X. Xxxx Price Japan Fund
X. Xxxx Price Latin America Fund
X. Xxxx Price Emerging Markets Stock Fund
X. Xxxx Price International Bond Fund
X. Xxxx Price Emerging Markets Bond Fund
and
X. XXXX PRICE PRIME RESERVE FUND, INC.
