INVESTMENT ADVISORY AGREEMENT
FIRSTHAND FUNDS
INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
This Investment Advisory and Management Agreement (Agreement), is made
and entered into as of _______________________, 2000 , 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 ______________________ (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 Funds 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 Funds portfolio of securities consistent
with the Funds investment objective, policies, and limitations as
stated in the Funds 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 Funds
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 Funds 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 Funds 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 Funds
trustees, officers and employees who are interested persons of the
Adviser and (2) compensation of the Advisers 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
Funds 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 Funds 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 Funds 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 Advisers or any
affiliated companys 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 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 Funds 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 Funds 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
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