AGREEMENT BETWEEN
XXXXX BROTHERS XXXXXXXX & CO.
AND
ALLIANCE ALL-ASIA INVESTMENT FUND, INC.
CUSTODIAN AGREEMENT
AGREEMENT made this 21st day of October, 1994
between ALLIANCE ALL-ASIA INVESTMENT FUND, INC. (the "Fund")
and Xxxxx Brothers Xxxxxxxx & Co. (the "Custodian").
WITNESSETH: That in consideration of the mutual
covenants and agreements herein contained, the parties
hereto agree as follows:
1. The Fund hereby employs and appoints the
Custodian as a custodian for the term and subject to the
provisions of this Agreement. The Custodian shall not be
under any duty or obligation to require the Fund to deliver
to it any securities or funds owned by the Fund and shall
have no responsibility or liability for or on account of
securities or funds not so delivered. The Fund will deposit
with the Custodian copies of the Articles of Incorporation
and By-Laws (or comparable documents) of the Fund and all
amendments thereto, and copies of such votes and other
proceedings of the Fund as may be necessary for or
convenient to the Custodian in the performance of its
duties.
2. Except for securities and funds held by
subcustodians appointed pursuant to the provisions of
Section 3 hereof, the Custodian shall have and perform the
following powers and duties:
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A. Safekeeping - To keep safely the securities of
the Fund that have been delivered to the Custodian and from
time to time to receive delivery of securities for
safekeeping.
B. Manner of Holding Securities - To hold
securities of the Fund (1) by physical possession of the
share certificates or other instruments representing such
securities in registered or bearer form, or (2) in book-
entry form by a Securities System (as said term is defined
in Section 2U).
C. Registered Name; Nominee - To hold registered
securities of the Fund (1) in the name or any nominee name
of the Custodian or the Fund, or in the name or any nominee
name of any agent appointed pursuant to Section 6E, or
(2) in street certificate form, so-called, and in any case
with or without any indication of fiduciary capacity.
D. Purchases - Upon receipt of Proper
Instructions, as defined in Section Y on Page 16, insofar as
funds are available for the purpose, to pay for and receive
securities purchased for the account of the Fund, payment
being made only upon receipt of the securities (1) by the
Custodian, or (2) by a clearing corporation of a national
securities exchange of which the Custodian is a member, or
(3) by a Securities System. However, (i) in the case of
repurchase agreements entered into by the Fund, the
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Custodian (as well as an Agent) may release funds to a
Securities System or to a Subcustodian prior to the receipt
of advice from the Securities System or Subcustodian that
the securities underlying such repurchase agreement have
been transferred by book entry into the Account (as defined
in Section 2U) of the Custodian (or such Agent) maintained
with such Securities System or Subcustodian, so long as such
payment instructions to the Securities System or
Subcustodian include a requirement that delivery is only
against payment for securities, (ii) in the case of foreign
exchange contracts, options, time deposits, call account
deposits, currency deposits, and other deposits, contracts
or options pursuant to Sections 2J, 2L, 2M and 2N, the
Custodian may make payment therefor without receiving an
instrument evidencing said deposit, contract or option so
long as such payment instructions detail specific securities
to be acquired, and (iii) in the case of securities in which
payment for the security and receipt of the instrument
evidencing the security are under generally accepted trade
practice or the terms of the instrument representing the
security expected to take place in different locations or
through separate parties, such as commercial paper which is
indexed to foreign currency exchange rates, derivatives and
similar securities, the Custodian may make payment for such
securities prior to delivery thereof in accordance with such
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generally accepted trade practice or the terms of the
instrument representing such security.
E. Exchanges - Upon receipt of proper
instructions, to exchange securities held by it for the
account of the Fund for other securities in connection with
any reorganization, recapitalization, split-up of shares,
change of par value, conversion or other event, and to
deposit any such securities in accordance with the terms of
any reorganization or protective plan. Without such
instructions, the Custodian may surrender securities in
temporary form for definitive securities, may surrender
securities for transfer into a name or nominee name as
permitted in Section 2C, and may surrender securities for a
different number of certificates or instruments representing
the same number of shares or same principal amount of
indebtedness, provided the securities to be issued are to be
delivered to the Custodian and further provided custodian
shall at the time of surrendering securities or instruments
receive a receipt or other evidence of ownership thereof.
F. Sales of Securities - Upon receipt of proper
instructions, to make delivery of securities which have been
sold for the account of the Fund, but only against payment
therefor (1) in cash, by a certified check, bank cashier's
check, bank credit, or bank wire transfer, or (2) by credit
to the account of the Custodian with a clearing corporation
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of a national securities exchange of which the Custodian is
a member, or (3) by credit to the account of the Custodian
or an Agent of the Custodian with a Securities System;
provided, however, that (i) in the case of delivery of
physical certificates or instruments representing
securities, the Custodian may make delivery to the broker
buying the securities, against receipt therefor, for
examination in accordance with "street delivery" custom,
provided that the payment therefor is to be made to the
Custodian (which payment may be made by a broker's check) or
that such securities are to be returned to the Custodian,
and (ii) in the case of securities referred to in clause
(iii) of the last sentence of Section 2D, the Custodian may
make settlement, including with respect to the form of
payment, in accordance with generally accepted trade
practice relating to such securities or the terms of the
instrument representing said security.
G. Depositary Receipts - Upon receipt of proper
instructions, to instruct a subcustodian appointed pursuant
to Section 3 hereof (a "Subcustodian") or an agent of the
Custodian appointed pursuant to Section 6E hereof (an
"Agent") to surrender securities to the depositary used by
an issuer of American Depositary Receipts or International
Depositary Receipts (hereinafter collectively referred to as
"ADRs") for such securities against a written receipt
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therefor adequately describing such securities and written
evidence satisfactory to the Subcustodian or Agent that the
depositary has acknowledged receipt of instructions to issue
with respect to such securities ADRs in the name of the
Custodian, or a nominee of the Custodian, for delivery to
the Custodian in Boston, Massachusetts, or at such other
place as the Custodian may from time to time designate.
Upon receipt of proper instructions, to surrender
ADRs to the issuer thereof against a written receipt
therefor adequately describing the ADRs surrendered and
written evidence satisfactory to the Custodian that the
issuer of the ADRs has acknowledged receipt of instructions
to cause its depositary to deliver the securities underlying
such ADRs to a Subcustodian or an Agent.
H. Exercise of Rights; Tender Offers - Upon
timely receipt of proper thereof, or to the agent of either,
warrants, puts, calls, rights or similar securities for the
purpose of being exercised or sold, provided that the new
securities and cash, if any, acquired by such action are to
be delivered to the Custodian, and, upon receipt of proper
invitations for tenders of securities, provided that the
consideration is to be paid or delivered or the tendered
securities are to be returned to the Custodian.
I. Stock Dividends, Rights, Etc. - To receive and
collect all stock dividends, rights and other items of like
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nature; and to deal with the same pursuant to proper
instructions relative thereto.
J. Options - Upon receipt of proper instructions,
to receive and retain confirmations or other documents
evidencing the purchase of writing of an option on a
security or securities index by the Fund; to deposit and
maintain in a segregated account, either physically or by
book-entry in a Securities System, securities subject to a
covered call option written by the Fund; and to release
and/or transfer such securities or other assets only in
accordance with a notice or other communication evidencing
the expiration, termination or exercise of such covered
option furnished by The Options Clearing Corporation, the
securities or options exchange on which such covered option
is traded or such other organization as may be responsible
for handling such options transactions.
K. Borrowings - Upon receipt of proper
instructions, to deliver securities of the Fund to lenders
or their agents as collateral for borrowings effected by the
Fund, provided that such borrowed money is payable to or
upon the Custodian's order as Custodian for the Fund.
L. Demand Deposit Bank Accounts - To open and
operate an account or accounts in the name of the Fund on
the Custodian's books subject only to draft or order by the
Custodian. All funds received by the Custodian from or for
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the account of the Fund shall be deposited in said
account(s). The responsibilities of the Custodian to the
Fund for deposits accepted on the Custodian's books shall be
that of a U.S. bank for a similar deposit.
If and when authorized by proper instructions, the
Custodian may open and operate an additional account(s) in
such other banks or trust companies as may be designated by
the Fund in such instructions (any such bank or trust
company so designated by the Fund being referred to
hereafter as a "Banking Institution"), provided that such
account(s) shall be in the name of the Custodian for account
of the Fund and subject only to the Custodian's draft or
order. Such accounts may be opened with Banking
Institutions in the United States and in other countries and
may be denominated in either U.S. Dollars or other
currencies as the Fund may determine. All such deposits
shall be deemed to be portfolio securities of the Fund and
accordingly the responsibility of the Custodian therefore
shall be the same as and no greater than the Custodian's
responsibility in respect of other portfolio securities of
the Fund.
M. Interest Bearing Call or Time Deposits - To
place interest bearing fixed term and call deposits with
such banks and in such amounts as the Fund may authorize
pursuant to proper instructions. Such deposits may be
9
placed with the Custodian or with Subcustodians or other
Banking Institutions as the Fund may determine. Deposits
may be denominated in U.S. Dollars or other currencies and
need not be evidenced by the issuance or delivery of a
certificate to the Custodian, provided that the Custodian
shall include in its records with respect to the assets of
the Fund, appropriate notation as to the amount and currency
of each such deposit, the accepting Banking Institution, and
other appropriate details. Such deposits, other than those
placed with the Custodian, shall be deemed portfolio
securities of the Fund and the responsibilities of the
Custodian therefor shall be the same as those for demand
deposit bank accounts placed with other banks, as described
in Section L of this agreement. The responsibility of the
Custodian for such deposits accepted on the Custodian's
books shall be that of a U.S. bank for a similar deposit.
N. Foreign Exchange Transactions and Futures
Contracts - Pursuant to proper instructions, to enter into
foreign exchange contracts or options to purchase and sell
foreign currencies for spot and future delivery on behalf
and for the account of the Fund. Such transactions may be
undertaken by the Custodian with such Banking Institutions,
including the Custodian and Subcustodian(s) as principals,
as approved and authorized by the Fund. Foreign exchange
contracts and options other than those executed with the
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Custodian, shall be deemed to be portfolio securities of the
Fund and the responsibilities of the Custodian therefor
shall be the same as those for demand deposit bank accounts
placed with other banks as described in Section 2-L of this
agreement. Upon receipt of proper instructions, to receive
and retain confirmations evidencing the purchase or sale of
a futures contract or an option on a futures contract by the
Fund; to deposit and maintain in a segregated account, for
the benefit of any futures commission merchant or to pay to
such futures commission merchant, assets designated by the
fund as initial, maintenance or variation "margin" deposits
intended to secure the Fund's performance of its obligations
under any futures contracts purchased or sold or any options
on futures contracts written by the Fund, in accordance with
the provisions of any agreement or agreements among any of
the Fund, the Custodian and such futures commission
merchant, designated to comply with the rules of the
Commodity Futures Trading Commission and/or any contract
market, similar organization or organizations, regarding
such deposits; and to release and/or transfer assets in such
margin accounts only in accordance with any such agreements
or rules.
0. Stock Loans - Upon receipt of proper
instructions, to deliver securities of the Fund, in
connection with loans of securities by the Fund, to the
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borrower thereof upon the receipt of the cash collateral, if
any, for such borrowing. In the event U.S. Government
securities are to be used as collateral, the Custodian will
not release the securities to be loaned until it has
received confirmation that such collateral has been
delivered to the Custodian. The Custodian and Fund
understand that the timing of receipt of such confirmation
will normally require that the delivery of securities to be
loaned will be made one day after receipt of the U.S.
Government collateral.
P. Collections - To collect, receive and deposit
in said account or accounts all income, payments of
principal and other payments with respect to the securities
held hereunder, and in connection therewith to deliver the
certificates or other instruments representing the
securities to the issuer thereof or its agent when
securities are called, redeemed, retired or otherwise become
payable; provided, that the payment is to be made in such
form and manner and at such time, which may be after
delivery by the Custodian of the instrument representing the
security, as is in accordance with the terms of the
instrument representing the security, or such proper
instructions as the Custodian may receive, or governmental
regulations, the rules of Securities Systems or other U.S.
securities depositories and clearing agencies or, with
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respect to securities referred to in clause (iii) of the
last sentence of Section 2D, in accordance with generally
accepted trade practice; (ii) to execute ownership and other
certificates and affidavits for all federal and state tax
purposes in connection with receipt of income or other
payments with respect to securities of the Fund or in
connection with transfer of securities, and (iii) pursuant
to proper instructions to take such other actions with
respect to collection or receipt of funds or transfer of
securities which involve an investment decision.
Q. Dividends, Distributions and Redemptions -
Upon receipt of proper instructions from the Fund, or upon
receipt of instructions from the Fund's shareholder
servicing agent or agent with comparable duties (the
"Shareholder Servicing Agent") (given by such person or
persons and in such manner on behalf of the Shareholder
Servicing Agent as the Fund shall have authorized), the
Custodian shall release funds or securities to the
Shareholder Servicing Agent or otherwise apply funds or
securities, insofar as available, for the payment of
dividends or other distributions to Fund shareholders. Upon
receipt of proper instructions from the Fund, or upon
receipt of instructions from the Shareholder Servicing Agent
(given by such person or persons and in such manner on
behalf of the Shareholder Servicing Agent as the Fund shall
13
have authorized), the Custodian shall release funds or
securities, insofar as available, to the Shareholder
Servicing Agent or as such Agent shall otherwise instruct
for payment to Fund shareholders who have delivered to such
Agent a request for repurchase or redemption of their shares
of capital stock of the Fund.
R. Proxies, Notices, Etc. - Promptly to deliver
or mail to the Fund all forms of proxies and all notices of
meetings and any other notices or announcements affecting or
relating to securities owned by the Fund that are received
by the Custodian, and upon receipt of proper instructions,
to execute and deliver or cause its nominee to execute and
deliver such proxies or other authorizations as may be
required. Neither the Custodian nor its nominee shall vote
upon any of such securities or execute any proxy to vote
thereon or give any consent or take any other action with
respect thereto (except as otherwise herein provided) unless
ordered to do so by proper instructions.
S. Nondiscretionary Details - Without the
necessity of express authorization from the Fund, (1) to
attend to all nondiscretionary details in connection with
the sale, exchange, substitution, purchase, transfer or
other dealings with securities, funds or other property of
the Portfolio held by the Custodian except as otherwise
directed from time to time by the Directors of the Fund, and
14
(2) to make payments to itself or others for minor expenses
of handling securities or other similar items relating to
the Custodian's duties under this Agreement, provided that
all such payments shall be accounted for to the Fund.
T. Bills - Upon receipt of proper instructions,
to pay or cause to be paid, insofar as funds are available
for the purpose, bills, statements, or other obligations of
the Fund.
U. Deposit of Fund Assets in Securities Systems -
The Custodian may deposit and/or maintain securities owned
by the Fund in (i) The Depository Trust Company, (ii) any
book-entry system as provided in Subpart 0 of Treasury
Circular Xx. 000, 00 XXX 000, Xxxxxxx X of 31 CFR Part 350,
or the book-entry regulations of federal agencies
substantially in the form of Subpart 0, or (iii) any other
domestic clearing agency registered with the Securities and
Exchange Commission under Section 17A of the Securities
Exchange Act of 1934 which acts as a securities depository
and whose use the Fund has previously approved in writing
(each of the foregoing being referred to in this Agreement
as a "Securities System"). Utilization of a Securities
System shall be in accordance with applicable Federal
Reserve Board and Securities and Exchange Commission rules
and regulations, if any, and subject to the following
provisions:
15
1) The Custodian may deposit and/or maintain Fund
securities, either directly or through one or more Agents
appointed by the Custodian (provided that any such agent
shall be qualified to act as a custodian of the Fund
pursuant to the Investment Company Act of 1940 and the rules
and regulations thereunder), in a Securities System provided
that such securities are represented in an account
("Account") of the Custodian or such Agent in the Securities
System which shall not include any assets of the Custodian
or Agent other than assets held as a fiduciary, custodian,
or otherwise for customers;
2) The records of the Custodian with respect to
securities of the Fund which are maintained in a Securities
System shall identify by book-entry those securities
belonging to the Fund;
3) The Custodian shall pay for securities
purchased for the account of the Fund upon (i) receipt of
advice from the Securities System that such securities have
been transferred to the Account, and (ii) the making of an
entry on the records of the Custodian to reflect such
payment and transfer for the account of the Fund. The
Custodian shall Transfer securities sold for the account of
the Fund upon (i) receipt of advice from the Securities
System that payment for such securities has been transferred
to the Account, and (ii) the making of an entry on the
16
records of the Custodian to reflect such transfer and
payment for the account of the Fund. Copies of all advices
from the Securities System of transfers of securities for
the account of the Fund shall identify the Fund, be
maintained for the Fund by the Custodian or an Agent as
referred to above, and be provided to the Fund at its
request. The Custodian shall furnish the Fund confirmation
of each transfer to or from the account of the Fund in the
form of a written advice or notice and shall furnish to the
Fund copies of daily transaction sheets reflecting each
day's transactions in the Securities System for the account
of the Fund on the next business day;
4) The Custodian shall provide the Fund with any
report obtained by the Custodian or any Agent as referred to
above on the Securities System's accounting system, internal
accounting control and procedures for safeguarding
securities deposited in the Securities System; and the
Custodian and such Agents shall send to the Fund such
reports on their own systems of internal accounting control
as the Fund may reasonably request from time to time.
5) At the written request of the Fund, the
Custodian will terminate the use of any such Securities
System on behalf of Fund as promptly as practicable.
V. Other Transfers - Upon receipt of Proper
Instructions, to deliver securities, funds and other
17
property of the Fund to a Subcustodian or another custodian
of the Fund; and, upon receipt of proper instructions, to
make such other disposition of securities, funds or other
property of the Fund in a manner other than or for purposes
other than as enumerated elsewhere in this Agreement,
provided that the instructions relating to such disposition
shall include a statement of the purpose for which the
delivery is to be made, the amount of securities to be
delivered and the name of the person or persons to whom
delivery is to be made.
W. Investment Limitations - In performing its
duties generally, and more particularly in connection with
the purchase, sale and exchange of securities made by or for
the Fund, the Custodian may assume unless and until notified
in writing contrary that conflict with proper instructions
received by it are not in or in any way contrary to any
provisions of the Fund's Articles of Incorporation or
By-Laws (or comparable documents) or votes or proceedings of
the shareholders or Directors of the Fund. The Custodian
shall to the Fund and shall be indemnified by the in no
event be liable Fund for any violation which occurs in the
course of carrying out instructions given by the Fund of any
investment limitations to which the Fund is subject or other
limitations with respect to the Fund's powers to make
18
expenditures, encumber securities, borrow or take similar
actions affecting its portfolio.
X. Restricted Securities - Notwithstanding any
other provision of this Agreement, the Custodian shall not
be liable for failure to take any action in respect of a
"restricted security" (as hereafter defined) if the
Custodian has not received Proper Instructions to take such
action (including but not limited to the failure to exercise
in a timely manner any right in respect of any restricted
security) unless the Custodian's responsibility to take such
action is set forth in a writing, agreed upon by the
Custodian and the Fund or the investment adviser of the
Fund, which specifies particular actions the Custodian is to
take without Proper Instructions in respect of specified
rights and obligations pertaining to a particular restricted
security. Further, the Custodian shall not be responsible
for transmitting to the Fund information concerning a
restricted security, such as with respect to exercise
periods and expiration dates for rights relating to the
restricted security, except such information which the
Custodian actually receives or which is published in a
source which is publicly distributed and generally
recognized as a major source of information with respect to
corporate actions of securities similar to the particular
restricted security. As used herein, the term "restricted
19
securities" shall mean securities which are subject to
restrictions on transfer, whether by reason of contractual
restrictions or federal, state or foreign securities or
similar laws, or securities which have special rights or
contractual features which do not apply to publicly-traded
shares of, or comparable interests representing, such
security.
Y. Proper Instructions - Proper instructions
shall mean a tested telex from the Fund or a written
request, direction, instruction or certification signed or
initialed on behalf of the Fund by one or more person or
persons as the Board of Directors of the Fund shall have
from time to time authorized, provided, however, that no
such instructions directing the delivery of securities or
the payment of funds to an authorized signatory of the Fund
shall be signed by such person. Those persons authorized to
give proper instructions may be identified by the Board of
Directors by name, title or position and will include at
least one officer empowered by the Board to name other
individuals who are authorized to give proper instructions
on behalf of the Fund. Telephonic or other oral
instructions given by any one of the above persons will be
considered proper instructions if the Custodian reasonably
believes them to have been given by a person authorized to
give such instructions with respect to the transaction
20
involved. Oral instructions will be confirmed by tested
telex or in writing in the manner set forth above but the
lack of such confirmation shall in no way affect any action
taken by the Custodian in reliance upon such oral
instructions. The Fund authorizes the Custodian to tape
record any and all telephonic or other oral instructions
given to the Custodian by or on behalf of the Fund
(including any of its officers, Directors, employees or
agents) and will deliver to the Custodian a similar
authorization from any investment manager or adviser or
person or entity with similar responsibilities which is
authorized to give proper instructions on behalf of the Fund
to the Custodian. Proper instructions may relate to
specific transactions or to types or classes of
transactions, and may be in the form of standing
instructions.
Proper instructions may include communications
effected directly between electro-mechanical or electronic
devices or systems, in addition to tested telex, provided
that the Fund and the Custodian agree to the use of such
device or system.
3. Securities, funds and other property of the
Fund may be held by subcustodians appointed pursuant to the
provisions of this Section 3 (a "Subcustodian"). The
Custodian may, at any time and from time to time, appoint
21
any bank or trust company (meeting the requirements of a
custodian or a foreign custodian under the Investment
Company Act of 1940 and the rules and regulations
thereunder) to act as a Subcustodian for the Fund, provided
that the Fund shall have approved in writing (1) any such
bank or trust company and the subcustodian agreement to be
entered into between such bank or trust company and the
Custodian, and (2) if the subcustodian is a bank organized
under the laws of a country other than the United States,
the holding of securities, cash and other property of the
Fund in the country in which it is proposed to utilize the
services of such subcustodian. Upon such approval by the
Fund, the Custodian is authorized on behalf of the Fund to
notify each Subcustodian of its appointment as such. The
Custodian may, at any time in its discretion, remove any
bank or trust company that has been appointed as a
Subcustodian but will promptly notify the Fund of any such
action.
Those Subcustodians, their offices or branches
which the Fund has approved to date are set forth on
Appendix A hereto. Such Appendix shall be amended from time
to time as Subcustodians, branches or offices are changed,
added or deleted. The Fund shall be responsible for
informing the Custodian sufficiently in advance of a
proposed investment which is to be held at a location not
22
listed on Appendix A, in order that there shall be
sufficient time for the Fund to give the approval required
by the preceding paragraph and for the Custodian to put the
appropriate arrangements in place with such Subcustodian
pursuant to such subcustodian agreement.
Although the Fund does not intend to invest in a
country before the foregoing procedures have been completed,
in the event that an investment is made prior to approval,
if practical, such security shall be removed to an approved
location or if not practical such security shall be held by
such agent as the Custodian may appoint. In such event, the
Custodian shall be liable to the Fund for the actions of
such agent if and only to the extent the Custodian shall
have recovered from such agent for any damages caused the
Fund by such agent and provided that the Custodian shall
pursue its rights against such agent.
With respect to the securities and funds held by a
Subcustodian, either directly or indirectly, including
demand and interest bearing deposits, currencies or other
deposits and foreign exchange contracts as referred to in
Sections 2K, 2L or 2M, the Custodian shall be liable to the
Fund if and only to the extent that such Subcustodian is
liable to the Custodian; provided, however, that the
Custodian shall be liable to the Fund for losses resulting
from the bankruptcy or insolvency of a Subcustodian if and
23
only to the extent that such Subcustodian is liable to the
Custodian and the Custodian recovers from such Subcustodian
under the applicable subcustodian agreement. The Custodian
shall nevertheless be liable to the Fund for its own
negligence in transmitting any instructions received by it
from the Fund and for its own negligence in connection with
the delivery of any securities or funds held by it to any
such Subcustodian.
In the event that any Subcustodian appointed
pursuant to the provisions of this Section 3 fails to
perform any of its obligations under the terms and
conditions of the applicable subcustodian agreement, the
Custodian shall use its best efforts to cause such
Subcustodian to perform such obligations. In the event that
the Custodian is unable to cause such Subcustodian to
perform fully its obligations thereunder, the Custodian
shall forthwith upon the Fund's request terminate such
Subcustodian and, if necessary or desirable, appoint another
subcustodian in accordance with the provisions of this
Section 3. At the election of the Fund, it shall have the
right to enforce, to the extent permitted by the
subcustodian agreement and applicable law, the Custodian's
rights against any such Subcustodian for loss or damage
caused the Fund by such Subcustodian.
24
At the written request of the Fund, the Custodian
will terminate any subcustodian appointed pursuant to the
provisions of this Section 3 in accordance with the
termination provisions under the applicable subcustodian
agreement. The Custodian will not amend any subcustodian
agreement or agree to change or permit any changes
thereunder except upon the prior written approval of the
Fund.
In the event the Custodian receives a claim from a
Subcustodian under the indemnification provisions of any
subcustodian agreement, the Custodian shall promptly give
written notice to the Fund of such claim. No more than
thirty days after written notice to the Fund of the
Custodian's intention to make such payment, the Fund will
reimburse the Custodian the amount of such payment except in
respect of any negligence or misconduct of the Custodian.
4. The Custodian may assist generally in the
preparation of reports to Fund shareholders and others,
audits of accounts, and other ministerial matters of like
nature.
5. The Fund hereby also appoints the Custodian as
its financial agent. With respect to the appointment as
financial agent, the Custodian shall have and perform the
following powers and duties:
25
A. Records - To create, maintain and retain such
records relating to its activities and obligations under
this Agreement as are required under the Investment Company
Act of 1940 and the rules and regulations thereunder
(including Section 31 thereof and Rules 31a-1 and 31a-2
thereunder) and under applicable Federal and State tax laws.
All such records will be the property of the Fund and in the
event of termination of this Agreement shall be delivered to
the successor custodian, and the Custodian agrees to
cooperate with the Fund in execution of documents and other
action necessary or desirable in order to substitute the
successor custodian for the custodian under their agreement.
B. Accounts - To keep books of account and render
statements, including interim monthly and complete quarterly
financial statements, or copies thereof, from time to time
as reasonably requested by proper instructions.
C. Access to Records - Subject to security
requirements of the Custodian applicable to its own
employees having access to similar records within the
Custodian and such regulations as may be reasonably imposed
by the Custodian, the books and records maintained by the
Custodian pursuant to Sections 5A and 5B shall be open to
inspection and audit at reasonable times by officers of,
attorneys for, and auditors employed by, the Fund.
26
D. Calculation of Net Asset Value - To compute
and determine the net asset value per share of capital stock
of the Fund as of the close of business on the New York
Stock Exchange on each day on which such Exchange is open,
unless otherwise directed by proper instructions. Such
computation and determination shall be made in accordance
with (1) the provisions of the Fund's Articles of
Incorporation or By-Laws of the Fund, as they may from time
to time be amended and delivered to the Custodian, (2) the
votes of the Board of Directors of the Fund at the time in
force and applicable, as they may from time to time be
delivered to the Custodian, and (3) proper instructions from
such officers of the Fund or other persons as are from time
to time authorized by the Board of Directors of the Fund to
give instructions with respect to computation and
determination of the net asset value. On each day that the
Custodian shall compute the net asset value per share of the
Fund, the Custodian shall provide the Fund with written
reports which permit the Fund to verify that portfolio
transactions have been recorded in accordance with the
Fund's instructions.
In computing the net asset value, the Custodian may
rely upon any information furnished by proper instructions,
including without limitation any information (1) as to
accrual of liabilities of the Fund and as to liabilities of
27
the Fund not appearing on the books of account kept by the
custodian, (2) as to the existence, status and proper
treatment of reserves, if any, authorized by the fund,
(3) as to the sources of quotations to be used in computing
the net asset value, including those listed in Appendix B,
(4) as to the fair value to be assigned to any securities or
other property for which price quotations are not readily
available, and (5) as to the sources of information with
respect to "corporate actions" affecting portfolio
securities of the fund, including those listed in
Appendix B. (Information as to "corporate actions" shall
include information as to dividends, distributions, stock
splits, stock dividends, rights offerings, conversions,
exchanges, recapitalizations, mergers, redemptions, calls,
maturity dates and similar transactions, including the ex-
and record dates and the amounts or other terms thereof.)
In like manner, the Custodian shall compute and
determine the net asset value as of such other times as the
Board of Directors of the Fund from time to time may
reasonably request.
Notwithstanding any other provisions of this
Agreement, including Section 6C, the following provisions
shall apply with respect to the Custodian's foregoing
responsibilities in this Section 5D: The Custodian shall be
held to the exercise of reasonable care in computing and
28
determining net asset value as provided in this Section 5D,
but shall not be held accountable or liable for any losses,
damages or shareholder or former shareholder arising from or
based upon errors expenses the Fund or any of the Fund may
suffer or incur or delays in the determination of such net
asset value unless such error or delay was due to the
Custodian's negligence, gross negligence or reckless or
willful misconduct in determination of such net asset value.
(The parties hereto acknowledge, however, that the
Custodian's causing an error or delay in the determination
of net asset value may, but does not in and of itself,
constitute negligence, gross negligence or reckless or
willful misconduct.) In no event shall the Custodian be
liable or responsible to the Fund, any present or former
shareholder of the fund or any other party for any error or
delay which continued or was undetected after the date of an
audit performed by the certified public accountants employed
by the Fund if, in the exercise of reasonable care in
accordance with generally accepted accounting standards,
such accountants should have become aware of such error or
delay in the course of performing such audit. The
Custodian's liability for any such negligence, gross
negligence or reckless or willful misconduct which results
in an error in determination of such net asset value shall
be limited to the direct, out-of-pocket loss the Fund,
29
shareholder or former shareholder shall actually incur,
measured by the difference between the actual and the
erroneously computed net asset value, and any expenses the
fund shall incur in connection with correcting the records
of the Fund affected by such error (including charges made
by the Fund's registrar and transfer agent for making such
corrections) or communicating with shareholders or former
shareholders of the Fund affected by such error.
Without limiting the foregoing, the Custodian shall
not be held accountable or liable to the Fund, any
shareholder or former shareholder thereof or any other
person for any delays or losses, damages or expenses any of
them may suffer or incur resulting from (1) the Custodian's
failure to receive timely and suitable notification
concerning quotations or corporate actions relating to or
affecting portfolio securities of the fund or (2) any errors
in the computation of the net asset value based any upon or
arising out of quotations or information as to corporate
actions if received by the Custodian either (i) from a
source which the Custodian was authorized pursuant to the
second paragraph of this Section 5D to rely upon, or
(ii) from a source which in the Custodian's reasonable
judgment was as reliable a source for such quotations or
information as the sources authorized pursuant to that
paragraph. Nevertheless, the Custodian will use its best
30
judgment in determining whether to verify through other
sources any information it has received as to quotations or
corporate actions if the Custodian has reason to believe
that any such information might be incorrect.
In the event of any error or delay in the
determination of such net asset value for which the
Custodian may be liable, the Fund and the Custodian will
consult and make good faith efforts to reach agreement on
what actions should be taken in order to mitigate any loss
suffered by the Fund or its present or former shareholders,
in order that the custodian's exposure to liability shall be
reduced to the extent possible after taking into account all
relevant factors and alternatives. Such actions might
include the Fund or the custodian taking reasonable steps to
collect from any shareholder or former shareholder who has
received any overpayment upon redemption of shares such
overpaid amount or to collect from any shareholder who has
underpaid upon a purchase of shares the amount of such
underpayment or to reduce the number of shares issued to
such shareholder. It is understood that in attempting to
reach agreement on the actions to be taken or the amount of
the loss which should appropriately be borne by the
Custodian, the Fund and the Custodian will consider such
relevant factors as the amount of the loss involved, the
Fund's desire to avoid loss of shareholder good will, the
31
fact that other persons or entitles could have been
reasonably expected to have detected the error sooner than
the time it was actually discovered, the appropriateness of
limiting or eliminating the benefit which shareholders or
former shareholders might have obtained by reason of the
error, and the possibility that other parties providing
services to the fund might be induced to absorb a portion of
the loss incurred.
E. Disbursements - Upon receipt of proper
instructions, to pay or cause to be paid, insofar as funds
are available for the purpose, bills, statements and other
obligations of the Fund (including but not limited to
interest charges, taxes, management fees, compensation to
Fund officers and employees, and other operating expenses of
the Fund).
6. A. The Custodian shall not be liable for any
action taken or omitted in reliance upon proper instructions
believed by it to be genuine or upon any other written
notice, request, direction, instruction, certificate or
other instrument believed by it to be genuine and signed by
the proper party or parties.
The Secretary or Assistant Secretary of the Fund
shall certify to the Custodian the names, signatures and
scope of authority of all persons authorized to give proper
instructions or any other such notice, request, direction,
32
instruction, certificate or instrument on behalf of the
Fund, the names and signatures of the officers of the Fund,
the name and address of the Shareholder Servicing Agent, and
any resolutions, votes, instructions or directions of the
Fund's Board of Directors or shareholders. Such certificate
may be accepted and relied upon by the Custodian as
conclusive evidence of the facts set forth therein and may
be considered in full force and effect until receipt of a
similar certificate to the contrary.
So long as and to the extent that it is in the
exercise of reasonable care, the Custodian shall not be
responsible for the title, validity or genuineness of any
property or evidence of title thereto received by it or
delivered by it pursuant to this Agreement.
The Custodian shall be entitled, at the expense of
the Fund, to receive and act upon advice of counsel (who may
be counsel for the Fund) on all matters, and the Custodian
shall be without liability for any action reasonably taken
or omitted pursuant to such advice.
B. With respect to the portfolio securities, cash
and other property of the Fund held by a Securities System,
the Custodian shall be liable to the Fund only for any loss
or damage to the Fund resulting from use of the Securities
System if caused by any negligence, misfeasance or
misconduct of the Custodian or any of its agents or of any
33
of its or their employees or from any failure of the
Custodian or any such agent to enforce effectively such
rights as it may have against the Securities System.
C. Except as may otherwise be set forth in this
Agreement with respect to particular matters, the Custodian
shall be held only to the exercise of reasonable care and
diligence in carrying out the provisions of this Agreement,
provided that the Custodian shall not thereby be required to
take any action which is in contravention of any applicable
law. However, nothing herein shall exempt the Custodian
from liability due to its own negligence or willful
misconduct. The Fund agrees to indemnify and hold harmless
the Custodian and its nominees from all claims and
liabilities (including counsel fees) incurred or assessed
against it or its nominees in connection with the
performance of this Agreement, except such as may arise from
its or its nominee's breach of the relevant standard of
conduct set forth in this Agreement. Without limiting the
foregoing indemnification obligation of the Fund, the Fund
agrees to indemnify the Custodian and its nominees against
any liability the Custodian or such nominee may incur by
reason of taxes assessed to the Custodian or such nominee or
other costs, liability or expense incurred by the Custodian
or such nominee resulting directly or indirectly from the
34
fact that portfolio securities or other property of the Fund
is registered in the name of the Custodian or such nominee.
In order that the indemnification provisions
contained in this Paragraph 6-C shall apply, however, it is
understood that if in any case the Fund may be asked to
indemnify or hold the Custodian harmless, the Fund shall be
fully and promptly advised of all pertinent facts concerning
the situation in question, and it is further understood that
the Custodian will use all reasonable care to identify and
notify the Fund promptly concerning any situation which
presents or appears likely to present the probability of
such a claim for indemnification against the Fund. The Fund
shall have the option to defend Custodian against any claim
which may be the subject of this indemnification, and in the
event that the Fund so elects it will so notify the
Custodian, and thereupon the Fund shall take over complete
defense of the claim, and the Custodian shall in such
situation initiate no further legal or other expenses for
which it shall seek indemnification under this Paragraph
6-C. The Custodian shall in no case confess any claim or
make any compromise in any case in which the Fund will be
asked to indemnify the Custodian except with the Fund's
prior written consent.
It is also understood that the Custodian shall not
be liable for any loss involving any securities, currencies,
35
deposits or other property of the Fund, whether maintained
by it, a Subcustodian, an agent of the Custodian or a
Subcustodian, a Securities System, or a Banking Institution,
or a loss arising from a foreign currency transaction or
contract, resulting from a Sovereign Risk. A "Sovereign
Risk" shall mean nationalizaton, expropriation, devaluation,
revaluation, confiscation, seizure, cancellation,
destruction or similar action by any governmental authority,
de facto or de jure; or enactment, promulgation, imposition
or enforcement by any such governmental authority of
currency restrictions, exchange controls, taxes, levies or
other charges affecting the Fund's property; or acts of war,
terrorism, insurrection or revolution; or any other similar
act or event beyond the Custodian's control.
D. The Custodian shall be entitled to receive
reimbursement from the Fund on demand, in the manner
provided in Section 7, for its cash disbursements, expenses
and charges (including the fees and expenses of any
Subcustodian or any Agent) in connection with this
Agreement, but excluding salaries and usual overhead
expenses.
E. The Custodian may at any time or times in its
discretion appoint (and may at any time remove) any other
bank or trust company as its agent (an "Agent") to carry out
such of the provisions of this Agreement as the Custodian
36
may from time to time direct, provided, however, that the
appointment of such Agent (other than an Agent appointed
pursuant to the third paragraph of Section 3) shall not
relieve the Custodian of any of its responsibilities under
this agreement.
F. Upon request, the Fund shall deliver to the
Custodian such proxies, powers of attorney or other
instruments as may be reasonable and necessary or desirable
in connection with the performance by the Custodian or any
Subcustodian of their respective obligations under this
Agreement or any subcustodian agreement.
7. The Fund shall pay the Custodian a custody fee
based on such fee schedule as may from time to time be
agreed upon in writing by the Custodian and the Fund. Such
fee, together with all amounts for which the Custodian is to
be reimbursed in accordance with Section 6D, shall be billed
to the Fund in such a manner as to permit payment by a
direct cash payment to the Custodian.
8. This Agreement shall continue in full force
and effect until terminated by either party by an instrument
in writing delivered or mailed, postage prepaid, to the
other party, such termination to take effect not sooner than
seventy five (75) days after the date of such delivery or
mailing. In the event of termination the Custodian shall be
entitled to receive prior to delivery of the securities,
37
funds and other property held by it all accrued fees and
unreimbursed expenses the payment of which is contemplated
by Sections 6D and 7, upon receipt by the Fund of a
statement setting forth such fees and expenses.
In the event of the appointment of a successor
custodian, it is agreed that the funds and securities owned
by the Fund and held by the Custodian or any Subcustodian
shall be delivered to the successor custodian, and the
Custodian agrees to cooperate with the Fund in execution of
documents and performance of other actions necessary or
desirable in order to substitute the successor custodian for
the Custodian under this Agreement.
9. This Agreement constitutes the entire
understanding and agreement of the parties hereto with
respect to the subject matter hereof. No provision of this
Agreement may be amended or terminated except by a statement
in writing signed by the party against which enforcement of
the amendment or termination is sought.
In connection with the operation of this Agreement,
the Custodian and the Fund may agree in writing 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. No interpretative or additional provisions made
38
as provided in the preceding sentence shall be deemed to be
an amendment of this Agreement.
10. This instrument is executed and delivered in
The Commonwealth of Massachusetts and shall be governed by
and construed according to the laws of said Commonwealth.
11. Notices and other writings delivered or mailed
postage prepaid to the Fund addressed to the Fund at
000 Xxxxx Xxxxx 0xx Xxxxx, Xxxxxxxx, XX 00000 or to such
other address as the Fund may have designated to the
Custodian in writing, or to the Custodian at 00 Xxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Manager,
Securities Department, or to such other address as the
Custodian may have designated to the Fund in writing, shall
be deemed to have been properly delivered or hereunder to
the respective addressee.
12. This Agreement shall be binding on and shall
inure to the benefit of the Fund and the Custodian and their
respective successors and assigns, provided that neither
party hereto may assign this Agreement or any of its rights
or obligations hereunder without the prior written consent
of the other party.
13. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original.
This Agreement shall become effective when one or more
39
counterparts have been signed and delivered by each of the
parties.
IN WITNESS WHEREOF, each of the parties has caused
this Agreement to be executed in its name and behalf on the
day and year first above written.
ALLIANCE ALL-ASIA INVESTMENT XXXXX BROTHERS XXXXXXXX &
FUND, INC. CO.
By /s/ Xxxx X. Xxxxxxx per pro /s/ X. X. Xxxxxx
_________________________ ________________________
40
00250203.AQ1
APPENDIX B
ALLIANCE ALL-ASIA INVESTMENT FUND INC
THE FOLLOWING AUTHORIZED SOURCES ARE TO BE USED FOR PRICING
AND FOREIGN EXCHANGE QUOTATIONS, CORPORATE ACTIONS,
DIVIDENDS AND RIGHTS OFFERINGS:
AUTHORIZED SOURCES
QUOTRON
REUTERS
INTERACTIVE DATA CORPORATION
VALORINFORM (GENEVA)
TELEKURS
SUBSCRIPTION BANKS
FUND MANAGERS
EXTEL (LONDON)
REPUTABLE FOREIGN BROKERS
APPROVED: _____________________
DATE
