FIRSTHAND FUNDS
FORM OF INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
This Investment Advisory and Management Agreement ("Agreement"), is made
and entered into as of September 9, 1999 by and between FIRSTHAND FUNDS, a
Delaware business trust (the "Trust") and FIRSTHAND CAPITAL MANAGEMENT, INC.,
(the "Adviser") each having its principal place of business at 000 Xxxxx Xxxxxx,
Xxxxx 0000, Xxx Xxxx, Xxxxxxxxxx 00000.
WHEREAS, the Fund, an open-end, non-diversified investment company
registered under the Investment Company Act of 1940, as amended, (the "1940
Act"), wishes to retain the Adviser to provide investment advisory and
management services to TECHNOLOGY VALUE FUND (the "Fund"); and
WHEREAS, the Adviser is willing to furnish such services on the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed as follows:
1. The Trust hereby appoints the Adviser to manage the investment and
reinvestment of assets of the Fund for the period and on the terms set
forth in this Agreement. The Adviser accepts such appointment and agrees to
render the services herein set forth, for the compensation herein provided.
2. The Fund shall at all times inform the Adviser as to the securities owned
by it, the funds available or to become available for investment by it, and
generally as to the condition of its affairs. It shall furnish the Adviser
with such other documents and information with regard to its affairs as the
Adviser may from time to time reasonably request.
3. Subject to the direction and control of the Fund's Board of Trustees, the
Adviser shall regularly provide the Fund with investment research, advice,
management and supervision and shall furnish a continuous investment
program for the Fund's portfolio of securities consistent with the Fund's
investment objective, policies, and limitations as stated in the Fund's
current Prospectus and Statement of Additional Information. The Adviser
shall determine from time to time what securities will be purchased,
retained or sold by the Fund, and shall implement those decisions, all
subject to the provisions of the Fund's Declaration of Trust, the 1940 Act,
the applicable rules and regulations of the Securities and Exchange
Commission, and other applicable federal and state laws, as well as the
investment objectives, policies, and limitations of the Fund. In placing
orders for the Fund with brokers and dealers with respect to the execution
of the Fund's securities transactions, the Adviser shall attempt to obtain
the best net results. In doing so, the Adviser may consider such factors
which it deems relevant to the Fund's best interest, such as price, the
size of the transaction, the nature of the market for the security, the
amount of the commission, the timing of the transaction, the reputation,
experience and financial stability of the broker-dealer involved and the
quality of service rendered by the broker-dealer in other transactions. The
Adviser shall have the discretionary authority to utilize certain
broker-dealers even though it may result in the payment by the Fund of an
amount of commission for effecting a securities transaction in excess of
the amount of commission another broker-dealer would have charged for
effecting that transaction, providing, however, that the Adviser had
determined that such amount of commission was reasonable in relation to the
value of the brokerage and research services provided by the broker-dealer
effecting the transaction. In no instance will portfolio securities be
purchased from or sold to the Adviser or any affiliated person thereof
except in accordance with the rules and regulations promulgated by the
Securities and Exchange Commission pursuant to the 0000 Xxx. The Adviser
shall also provide advice and recommendations with respect to other aspects
of the business and affairs of the Fund and shall perform such other
functions of management and supervision as may be directed by the Board of
Trustees of the Fund, provided that in no event shall the Adviser be
responsible for any expense occasioned by the performance of such
functions.
4. The Adviser is responsible for (1) compensation of any of the Fund's
trustees, officers and employees who are interested persons of the Adviser
and (2) compensation of the Adviser's personnel and other expenses incurred
in connection with the provisions of portfolio management services under
this Agreement. Other than as herein specifically indicated, the Adviser
shall not be responsible for the Fund's expenses. Specifically, the Adviser
will not be responsible, except to the extent of the reasonable
compensation of employees of the Fund whose services may be used by the
Adviser hereunder, for any of the following expenses of the Fund, which
expenses shall be borne by the Fund: legal and audit expenses, organization
expenses; interest; taxes; governmental fees; fees, voluntary assessments
and other expenses incurred in connection with membership in investment
company organizations; the cost (including brokerage commissions or
charges, if any) of securities purchased or sold by the Fund and any losses
incurred in connection therewith; fees of custodian, transfer agents,
registrars or other agents; distribution fees; expenses of preparing share
certificates; expenses relating to the redemption or purchase of the Fund's
shares; expenses of registering and qualifying Fund shares for sale under
applicable federal and state law and maintaining such registrations and
qualification; expenses of preparing, setting in print, printing and
distributing prospectuses, proxy statements, reports, notices and dividends
to Fund shareholders; cost of stationery; costs of shareholders and other
meetings of the Fund; compensation and expenses of the independent trustees
of the Fund; and the Fund's pro rata portion of premiums of any fidelity
bond and other insurance covering the Fund and its officers and trustees.
5. No trustee, officer or employee of the Fund shall receive from the Fund any
salary or other compensation as such trustee, officer or employee while he
is at the same time a director, officer or employee of the Adviser or any
affiliated company of the Adviser. This paragraph shall not apply to
trustees, executive committee members, consultants and other persons who
are not regular members of the Adviser's or any affiliated company's staff.
6. As compensation for the services performed by the Adviser, the Fund shall
pay the Adviser, as promptly as possible after the last day of each month,
a fee, accrued each calendar day (including weekends and holidays) at the
rate of 1.5% per annum of the daily net assets of the Fund. The Adviser
shall reduce such fee or, if necessary, make expense reimbursements to the
Fund to the extent required to limit the total annual operating expenses of
the Fund (net of Rule 12b-1 and shareholder servicing fees) to
1.95% of its average daily net assets up to $200 million; 1.90% of such
assets from $200 million to $500 million; 1.85% of such assets from $500
million to $1 billion; and 1.80% of such assets in excess of $1 billion.
The daily net assets of the Funds shall be computed as of the time of the
regular close of business of the New York Stock Exchange or such other time
as may be determined by the Board of Trustees of the Fund. Any of such
payments as to which the Adviser may so request shall be accompanied by a
report of the Fund prepared either by the Fund or by a reputable firm of
independent accountants which shall show the amount properly payable to the
Adviser under this Agreement and the detailed computation thereof.
7. The Adviser assumes no responsibility under this Agreement other than to
render the services called for hereunder in good faith, and shall not be
responsible for any action of the Board of Trustees of the Fund in the
following or declining to follow any advice or recommendation of the
Adviser; provided that nothing in this Agreement shall protect the Adviser
against any liability to the Fund or its stockholders to which it would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties hereunder.
8. The Adviser shall be an independent contractor and shall have no authority
to act for or represent the Fund in its investment commitments unless
otherwise provided. No agreement, bid, offer, commitment, contract or other
engagement entered into by the Adviser whether on behalf of the Adviser or
whether purporting to have been entered unto on behalf of the Fund shall be
finding upon the Fund, and all acts authorized to be done by the Adviser
under this Agreement shall be done by it as an independent contractor and
not as an agent.
9. Nothing in this Agreement shall limit or restrict the right of any
director, officer, or employee of the Adviser who may also be a trustee,
officer, or employee of the Fund, to engage in any other business or to
devote his time and attention in part to the management or other aspects of
any other business, whether of a similar nature or a dissimilar nature, nor
to limit or restrict the right of the Adviser to engage in any other
business or to render services of any kind, including investment advisory
and management services, to any other corporation, firm, individual or
association.
10. As used in this Agreement, the terms "assignment," "interested person," and
"majority of the outstanding voting securities" shall have the meanings
given to them by Section 2(a) of the 1940 Act, subject to such exemptions
as may be granted by the Securities and Exchange Commission by any rule,
regulation or order.
11. This Agreement shall terminate automatically in the event of its assignment
by the Adviser and shall not be assignable by the Fund without the consent
of the Adviser. This Agreement may also be terminated at any time, without
the payment of penalty, by the Fund or by the Adviser on sixty (60) days'
written notice addressed to the other party at its principal place of
business.
12. This Agreement shall become effective on the date hereof and shall continue
in effect for two years and from year to year thereafter only so long as
specifically approved annually, (1) by vote of a majority of the trustees
of the Fund who are not parties to this Agreement
or interested persons of such parties, cast in person at a meeting called
for that purpose, and, (2) either by vote of the holders of a majority of
the outstanding voting securities of the Fund or by a majority vote of the
Fund's Board of Trustees.
13. No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination
is sought, and no materials amendment of this Agreement shall be effective
until approved by vote of the holders of a majority of the Fund's
outstanding voting securities.
14. If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall
not be affected thereby. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and sealed by their officers thereunto duly authorized on the day and year first
above written.
FIRSTHAND FUNDS
By___________________________
its President
FIRSTHAND CAPITAL MANAGEMENT, INC.
By___________________________
its President
