Exhibit - 10 ii
Reimbursement Agreements
The Xxxxx Xxxxx Fund will reimburse officers and directors not affiliated with
the Investment Adviser to compensate for travel expenses associated with
performance of their duties. As the Fund grows in total assets, the Board of
Directors may place them on salaries commensurate with their duties.
The Fund has no plans to compensate officers, employees and directors who are
affiliated with the Investment Adviser except indirectly through payment of the
management fee.
Exhibit - 10 iii
Custodian Agreement
Safekeeping Agreement (Pursuant to Rule 17F-2)
Gentlemen:
This letter will confirm our agreement with respect to our designation of
First Virginia Bank as the safekeeping agent for the securities and similar
investments of The Xxxxx Xxxxx Fund, Inc.
The Bank has been duly designated and appointed by the Board of Directors
of the Corporation as the safekeeping agent for the Corporation's securities
and similar investments pursuant to the Investment Company Act of 1940 and the
rules and regulations of the Securities and Exchange Commission thereunder.
The securities and similar investments of the Corporation shall be
deposited in the safekeeping of, or in a vault or other depository maintained
by, the Bank, and the securities and similar investments so deposited shall be
physically segregated at all times from those of any other persons, firms, or
corporations.
Any two of the following directors, to-wit, Xxxxx X. Xxxxx and Zhifeng
Sun of the Corporation are authorized and permitted to have access to the
securities and similar investments so deposited, and such access to such
securities and similar investments so deposited shall be had only by two or
more of such persons jointly.
Access to such securities and similar investments shall be permitted to
the properly authorized officers and employees of the Bank. Access to such
securities and similar investments shall be permitted, jointly with any two
of the above designated directors of the Corporation or with any officer or
employee of the Bank, to an independent public accountant for the purpose of
the examination of the Corporation's securities and similar investments
required by the rules and regulations of the Securities and Exchange Commission.
Such securities and similar investments shall at all times be subject to
inspection by the Securities and Exchange Commission through its authorized
employees or agents, accompanied, unless otherwise directed by order of the
Commission, by one or more of the designated officers of the Corporation, or
one or more of the officers or employees of the Bank.
Each person when depositing such securities or similar investments in, or
withdrawing them from, the Bank, or when ordering their withdrawal or delivery
from the safekeeping of the Bank, shall sign a notation in duplicate in respect
to such deposit, withdrawal or order which shall show (1) the date and time of
deposit, withdrawal or order, (2) the title and amount of the similar securities
or similar investments deposited, withdrawn or ordered to be withdrawn, and an
identification thereof by a certificate number or otherwise, (3) the manner
of acquisition of the securities or similar investments deposited, or the
purpose for which they have been withdrawn or ordered to be withdrawn and
(4) if withdrawn and delivered to any other person, the name of such person.
A copy of such notation shall be transmitted promptly by the Bank to Xxxxxxx
Xx, a Non-Interested Director of the Corporation. Such notation shall be on
serially-numbered forms and shall be preserved for at least one year.
Such securities and similar investments shall be verified by complete
examination of an independent public accountant to be retained by the
Corporation at least three times during each fiscal year, at least two of
which times shall be chosen by the said accountant without prior notice
to the Corporation.
The Secretary and the President of this Corporation, and each of them,
have been authorized and directed to certify to the Bank that resolutions
incorporating the terms of this agreement, copies of which are attached, have
been duly adopted, and do further certify the names and specimen signatures,
copies of which are attached, of the directors of the Corporation designated
above.
The Corporation undertakes to notify the Bank of any changes in the names
and signatures of the officers of the Corporation designated above.
If the above correctly states our understanding and agreement, would you
kindly indicate your acceptance thereof by signing the name of the Bank, by
its duly authorized officer, in the space provided below, and return a copy
of this agreement to the Corporation.
Very truly yours,
By: /s/Xxxxx X. Xxxxx
First Virginia Bank
By: /s/ Xxxxxxxxx Xxxx Xxxx
Exhibit - 11 i
Legal Opinion
Xxxxxxxx & Associates, P.C.
Attorneys at Law
0000 Xxxxxxxxxx Xxxxx, Xxxxx #000
Xxxxxxx, XX 00000
June 21, 2000
Board of Directors
The Xxxxx Xxxxx Fund, Inc.
0000 Xxxxxxxxx Xxxxxxxxx
Xxxxx Xxxxxx, XX 00000
Re: Opinion letter for The Xxxxx Xxxxx Fund, Inc. and 25,000.00 Shares of
Common Stock with .004 par value per share.
Gentlemen:
In our capacity as Counsel to The Xxxxx Xxxxx Fund, Inc. the undersigned has
examined and herein relies on copies of the following:
1. The Articles of Incorporation filed with the State Corporation Commission
for the Commonwealth of Virginia;
2. The By-Laws of The Xxxxx Xxxxx Fund, Inc.
3. The Shareholder Records of The Xxxxx Xxxxx Fund, Inc.
4. Certificate of the Commonwealth of Virginia, dated June 16, 2000, issued
by the State Corporation Commission certifying that the Certificate of
Incorporation is issued to The Xxxxx Xxxxx Fund, Inc.
I have also examined other such documents, records and matters of law as we
have deemed necessary for purposes of furnishing this opinion.
It should be noted that in rendering this opinion (i) the undersigned is unaware
of the untruth/omission or invalidity of any representation called for in any
of the above documents. In rendering his opinion, the undersigned has
examined the following Virginia Code statute as it pertains to the corporation.
1. Section 13.1-643 of the Virginia Code.
Based upon such examinations and investigations, and such other investigations
and examinations, that the undersigned has deemed necessary for the purposes
of the opinions expressed herein and subject to the foregoing examination
limitations and qualifications expressed herein the undersigned opines as
follows:
1. Company is duly incorporated and organized, validly existing and in good
standing under the laws of the Commonwealth of Virginia.
2. The Open Shares per The Xxxxx Xxxxx Fund, Inc. Shareholder Records to be
sold by the Company are duly authorized and when issued and delivered to
investors under the terms of the Prospectus and Statement of Additional
Information against payment of the appropriate consideration will be duly
and validly issued, full paid and non-assessable.
The opinions expressed in this letter are qualified to the following extent:
A. The undersigned is a memeber of the bar of the Commonwealth of Virginia,
and the opinions expressed in this letter (except where otherwise expressly
stated) are limmited to the laws of the Commonwealth of Virginia.
B. The services of the undersigned have been limited to rendering the foregoing
opinion based upon his review of such documents as he deemed necessary to make
the the statement contained herein.
C. This opinion does not extend beyond the documents or to any information
and/or the the validity, and/or to any representation contained in, and/or
whether or not The Xxxxx Xxxxx Fund, Inc., has or has not complied with any
law and/or regulation concerning the Prospectus and Statement of Additional
Information by The Xxxxx Xxxxx Fund, Inc. for the Sale of Securities.
D. The business or financial resources of The Xxxxx Xxxxx Fund, Inc. have not
been reviewed by the undersigned and therefore, expresses no opinion as to the
accuracy or completeness of any information that may have been relied upon by
anyone in making its decision to either approve the Prospectus and Statement of
Additional Information or by anyone offering to purchase share(s) of stock in
The Xxxxx Xxxxx Fund, Inc.
E. The law firm of Xxxxxxxx & Associates, P.C., has provided this legal opinion
as to certain matters relating to the corporation pursuant to the laws of the
Commonwealth of Virginia. The Prospectus and Statement of Additional
Information has been prepared by the Corporation's management and its advisors.
Therefore, no opinion in respect to the Prospectus and Statement of Additional
Information orthe information contained therein has been provided by the
undersigned and his law firm.
This opinion is given as the date of this correspondence only and is limited
to the specific issues discussed herein, and is issued to and for the sole
benefit of The Xxxxx Xxxxx Fund, Inc.
Pursuant to the request of the Board of Directors, the undersigned hereby
consents to the inclusions of this opinion as an exhibit to the Securities Act
Registration Statement of the Fund in the N1-A Filing, and to the reference
in the Fund's Prospectus and/or Statement of Additional Information.
XXXXXXXX & ASSOCIATES, P.C.
/s/ Xxxx X. Xxxxxxxx
MSA/LC
GLM/gm
Exhibit 11 ii
CONSENT OF INDEPENDENT AUDITORS:
We consent to the inclusion by reference to the initial Registration
Statement on Form N-1A/A of The Xxxxx Xxxxx Fund, Inc. of our report
dated May 31, 2000 for our audit of the Statement of Assets and Liabilities
of the Fund. We also consent to the reference to our firm in the Fund's
Initial Registration Statement and the sections titled Statement of Additional
Information and Other Information.
/s/ Xxxxx X. Xxxxx
XXXXX & ASSOCIATES, CPAs
New Carrollton, MD
August 28, 2000
Exhibit 11 iii
INITIAL CAPITAL AGREEMENT
The initial capital deposited into The Xxxxx Xxxxx Fund, Inc., is for investment
purposes only and the initial capital is not for re-selling or redeeming.
/s/Xxxxx X. Xxxxx
Exhibit 12 i
Code Of Ethics
I. General Principles
The personal investment activites of any officer, director, trustee or employee
of The Xxxxx Xxxxx Fund, Inc. will be governed by the following principles:
(A) Covered Persons have a duty at all times to place first the interests of
Fund Shareholders (B) All securities transactions by Covered Persons shall
be consistent with this Code and in such a manner as to avoid any actual or
potential conflict of interest or any abuse of an individual's position of
trust and responsibility; and (C) Covered Persons should not take
inappropriate advantage of their positions with The Xxxxx Xxxxx Fund.
II. A) Specific Prohibitions
No person covered by this Code, shall purchase or sell a security, except an
Excepted Security, if there has been a determination to purchase or sell such
security for the Fund or if such a purchase or sale is under consideration for
the Fund, nor may such a person have any dealings in a security that he may not
purchase or sell for any other account in which he has Beneficial Ownership,
or disclose the information to anyone, until such purchase, sale or contemplated
action has either been completed or abandoned.
B) Fund Rules Enforcer: To ensure compliance with this code required documents
must be submitted according to procedures set forth below to the Fund
Rules Enforcer. The Fund Rules Enforcer at a minimum will be Series 7
Registered with the Securities and Exchange Commission, and selection of this
Person must be approved by the Board of Directors. This position will not be
occupied by Xxxxx X. Xxxxx.
III. Obtaining Advance Approval
Except as provided in Sections V and VI of this Code, all proposed transactions
in securities (privately or publicly owned) by Covered Persons, except
transactions in Excepted Securities, should be
approved consistent with the provisions of this Code in advance by
the Fund Rules Enforcer. This request should
be submitted by e-mail to xxxxxxxxxxxxxxxxx@xxxxxxxxxxxxxxx.xxx,
and requests will be answered within 7 days.
IV. Reporting and Certification Requirements; Brokerage Confirmations
(1) Except as provided in Sections V and VI of this code, within 10 days
following the end of each calendar quarter each Covered Person must file
with the Fund Rules Enforcer a signed Security Transaction
Reporting Form. The form
must be signed and filed whether or not any security transaction has been
effected. If any transaction has been effected during the quarter for the
Covered Person's account or for any account in which he has a direct or
indirect Beneficial Ownership, it must be reported. Excepted from this
reporting requirement are transactions effected in any accounts over which
the Covered Person has no direct or indirect influence or control and
transactions in Excepted Securities. The Fund Rules Enforcer is
responsible for reviewing these transactions promptly and
must address any apparent violation promptly.
(2) Each employee of the Fund will upon commencement of employment and
annually thereafter disclose all personal securities holdings and annually
certify that: (i) they have read and understand this Code and recognize they
are subject hereto; and (ii) they have complied with the requirements of this
Code and disclosed or reported all securities transactions required to be
disclosed or reported pursuant to the requirements of this Code.
(3) Each employee of the Fund will direct his brokerage firm to send copies of
all confirmations and all monthly statements directly to the Fund Rules
Enforcer.
(4) Each employee of the Fund who has a Fully-Discretionary Account (as
defined in Section VI) shall disclose all pertinent facts regarding such
Account to the Fund Rules Enforcer upon commencement of employment.
Each such employee
or partner shall thereafter annually certify on the prescribed form that he
or she has not and will not exercise any direct or indirect influence or control
over such Account, and has not discussed any potential investment decisions with
such independent fiduciary in advance of any such transactions.
V. Special Provisions Applicable to Outside Directors and Trustees of the Funds
The primary function of the Outside Directors and Trustees of the Funds is to
set policy and monitor the management performance of the Funds' officers and
employees involved in the management of the Fund. Although they receive
complete information as to actual portfolio transactions, Outside Directors and
Trustees are not given advance information as to the Funds' contemplated
investment transactions.
An Outside Director or Trustee wishing to purchase or sell any security will
therefore generally not be required to obtain advance approval of his security
transactions. If, however, during discussions at Board meetings or otherwise
an Outside Director or Trustee should learn in advance of the Funds' current or
contemplated investment transactions, then advance approval of transactions in
the securities of such company(ies) shall be required for a period of 30 days
from the date of such Board meeting. In addition, an Outside Director or
Trustee can voluntarily obtain advance approval of any security transaction or
transactions at any time.
No report described in Section IV(1) will be required of an Outside Director
or Trustee unless he knew, or in the ordinary course of fulfilling his official
duties as a director or trustee should have known, at the time of his
transaction, that during the 15-day period immediately before or after the date
of the transaction (i.e., a total of 30 days) by the Outside Director or Trustee
such security was or was to be purchased or sold by the Fund or such a purchase
or sale was or was to be considered by the Fund. If he makes any
transaction requiring such a report, he must report all securities transactions
effected during the quarter for his account or for any account in which he has a
direct or indirect Beneficial Ownership interest and over which he has any
direct or indirect influence or control. Each Outside Director and Trustee will
direct his brokerage firm to send copies of all confirmations of securities
transactions to the Fund Rules Enforcer, and annually make the
certification required under Section IV(2)(i) and (ii). Outside Directors' and
Trustees' transactions in Excepted Securities are excepted from the
provisions of this Code.
It shall be prohibited for an Outside Director or Trustee to trade on
material non-public information. Prior to accepting an appointment as a
director of any company, an Outside Director or Trustee will advise and
discuss with the Board whether accepting
such appointment creates any conflict of interest or other issues.
VI. Additional Requirement relating to Employees of the Fund
It shall be prohibited for any employee of the Fund:
(1) to obtain or accept favors or preferential treatment of any kind or gift or
other thing having a value of more than $100 from any person or entity that
does business with or on behalf of the investment company.
(2) to trade on material non-public information or otherwise fail to comply
with the Fund's Statement of Policy and Procedures on Receipt and Use of
Inside Information adopted pursuant to Section 15(f) of the Securities
Exchange Act of 1934 and Section 204A of the Investment Advisers Act of
1940;
(3) to become a director of any company without the Firm's prior consent and
implementation of appropriate safeguards against conflicts of interest.
In connection with any request for approval, pursuant to Section III of
this Code, of an acquisition by employees of the Fund of any securities
in a private placement, prior approval will take into account, among
other factors, whether the investment opportunity should be reserved for any of
the Funds and their shareholders (or other clients of the Fund) and whether
the opportunity is being offered to the individual by virtue of the individual's
position with the Fund. An individual's investment in privately-placed
securities will be disclosed to the Fund Rules Enforcer if such an individual is
involved in consideration of an investment by the Fund in the issuer of such
securities. In such circumstances, the Fund's (or other client's) decision
to purchase securities of the issuer will be subject to independent review by
personnel with no personal interest in the issuer.
If a spouse of an employee of the Fund who is a director or an employee of,
or a consultant to, a company, receives a grant of options to purchase
securities in that company (or an affiliate), neither the receipt nor
the exercise of those options requires advance approval from the Fund or
reporting. Any subsequent sale of the security acquired by the option exercise
by that spouse would require advance approval and is a reportable transaction.
Advance approval is not required for transactions in any account of a
Covered person if the Covered Person had no direct or indirect influence or
control (a "Fully-Discretionary Account"). A Covered person will be deemed to
have "no direct or indirect influence or control" over an account only if:
(i) investment discretion for the account has been delegated to an independent
fiduciary and such investment discretion is not shared with the employee,
(ii) the Covered Person certifies in writing that he or she has not and will not
discuss any potential investment decisions with such independent fiduciary
before any transaction the Fund Rules Enforcer has determined that the account
satisfies these requirements. Transaction in Fully-Discretionary Accounts by
an employee of the Fund are subject to the post-trade reporting requirements
of this Code.
VII. Enforcement
The Fund Rules Enforcer for The Xxxxx Xxxxx Fund, Inc. is charged with
the responsibility of enforcing this code, and may appoint one or more employees
to aid in carrying out these enforcement responsibilities. The Fund Rules
Enforcer shall implement a procedure to monitor compliance with this Code
through a periodic review of
personal trading records provided under this Code against transactions in the
Fund. The Fund Rules Enforcer shall bring to the attention of the Funds' Audit
Committee any apparent violations of this Code, and the Audit Committee shall
determine what action shall be taken as a result of such violation.
The record of any violation of this Code and any action taken as a result
thereof, which may include suspension or removal of the violator from his or
her position, shall be made a part of the permanent record of the Fund. An
annual report will be prepared for the directors or trustees of the Fund that
summarizes the Funds' procedures concerning personal investing, including the
procedures followed to determine whether to grant approvals under Section III
and the procedures followed by the Fund Rules Enforcer in determining
pursuant to Section IV whether the Fund has determined to purchase or sell a
security or are considering such a purchase or sale,
and any changes in those procedures during
the past year, and (b) identifies any recommended changes in the restrictions
imposed by this Code or in such procedures with respect to the Code and any
changes to the Code based upon experience with the Code, evolving industry
practices or developments in the regulatory environment.
VII. Definitions
"Covered Person" means any officer, director, trustee, director or trustee
emeritus or employee of the Fund. (See also definition of "Beneficial
Ownership.")
"Excepted Securities" are shares of the Funds, banker's acceptances, bank
certificates of deposit, commercial paper, shares of registered open-end
investment companies and U.S. Government securities.
"Outside Directors and Trustees" are directors and trustees who are not
"interested persons" as defined by the Investment Company Act of 1940.
"Security" means any stock, bond, debenture or in general any instrument
commonly known as a security and includes a warrant or right to subscribe to or
purchase any of the foregoing and also includes the writing of an option on
any of the foregoing.
"Beneficial Ownership" is interpreted in the same manner as it would be under
Section 16 of the Securities Exchange Act of 1934 and Rule 16a-1 thereunder.
Accordingly, a "beneficial owner" includes any Covered Person who, directly
or indirectly, though any contract, arrangement, understanding, relationship
or otherwise, has or shares a direct or indirect pecuniary interest (i.e. the
ability to share in profits derived from such security) in any equity security
including:
(i) securities held by a person's immediate family sharing the same house
(with certain exceptions);
(ii) a general partner's interest in portfolio securities held by a general
or limited partnership;
(iii) a person's interest in securities held in trust as trustee, beneficiary
or settlor, as provided in Rule 16a-8(b); and
(iv) a person's right to acquire securities through options, rights or other
derivatives securities.
"Gender/Number" whenever the masculine gender is used herein, it includes
the feminine gender as well, and the singular includes the plural and the
plural includes the singular, unless in each case the contest clearly
indicates otherwise.
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