Document:

firsthand_ex4a-0408.htm

    Appendix
B

    

    AGREEMENT
AND PLAN OF REORGANIZATION

    

    This
AGREEMENT AND PLAN OF REORGANIZATION (“Agreement”) is made as of this 11 day of
February, 2008 by and between Firsthand Technology Value Fund (the “Acquiring
Fund”) and Firsthand Technology Innovators Fund (the “Acquired Fund”), each of
which is a series of Firsthand Funds, a Delaware statutory trust (the
“Trust”).

    

    WHEREAS,
the Trust is an open-end management investment company registered with the
Securities and Exchange Commission (the “SEC”) under the Investment Company Act
of 1940, as amended (the “1940 Act”);

    

    WHEREAS,
the parties desire that the Fund Assets and Liabilities (as defined below) of
the Acquired Fund be conveyed to and acquired and assumed by the Acquiring Fund
in exchange for shares of equal U.S. dollar value of the Acquiring Fund which
shall thereafter promptly be distributed to the shareholders of the Acquired
Fund in connection with its liquidation as described in this Agreement (such
acquisition and assumption of the Acquired Fund’s Fund Assets and Liabilities by
the Acquiring Fund shall be referred to as the  “TIF Reorganization”);
and

    

    WHEREAS,
the parties intend that the TIF Reorganization qualify as a “reorganization,”
within the meaning of Section 368(a) of the Internal Revenue Code of 1986,
as amended (the “Code”), and that the Acquiring Fund and the Acquired Fund will
each be a “party to a reorganization,” within the meaning of Section 368(b)
of the Code, with respect to the TIF Reorganization.

    

    NOW,
THEREFORE, in accordance with the terms and conditions described herein, the
Acquired Fund and Acquiring Fund shall be consolidated as follows:

    

    1.     Conveyance of Fund Assets
and Liabilities of the Acquired Fund.

    

    
      	
               
      

            	
              (a)

            	
              Except
      as provided below, at the Effective Time of the Reorganization (as defined
      in Section 8) all assets of every kind, and all interests, rights,
      privileges and powers of the Acquired Fund (the “Fund Assets”), subject to
      all liabilities of the Acquired Fund existing as of the Effective Time of
      the Reorganization (the “Liabilities”), shall be transferred by the
      Acquired Fund to the Acquiring Fund and shall be accepted and assumed by
      the Acquiring Fund, as more particularly set forth in this Agreement, such
      that at and after the Effective Time of the Reorganization:  (i)
      all Fund Assets of the Acquired Fund shall become the assets of the
      Acquiring Fund; and (ii) all Liabilities of the Acquired Fund shall attach
      to the Acquiring Fund, enforceable against the Acquiring Fund to the same
      extent as if originally incurred by the Acquiring
  Fund.

            

    

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (b)

            	
              It
      is understood and agreed that the Fund Assets shall include all property
      and assets of any nature whatsoever, including, without limitation, all
      cash, cash equivalents, securities, claims (whether absolute or
      contingent, known or unknown, accrued or unaccrued) and receivables
      (including dividend and interest receivables) owned or exercisable by the
      Acquired Fund, and any deferred or prepaid expenses shown as an asset on
      the Acquired Fund’s books and that the Liabilities of the Acquired Fund
      shall include all liabilities, whether known or unknown, accrued or
      unaccrued, absolute or contingent, in all cases, existing at the Effective
      Time of the Reorganization.

            

    

    

    
      	
               
      

            	
              (c)

            	
              It
      is understood and agreed that the Acquired Fund may sell any of the
      securities or other assets it holds prior to the Effective Time of the
      Reorganization but will not, without the prior approval of the Acquiring
      Fund, acquire any additional securities other than securities that the
      Acquiring Fund is permitted to purchase in accordance with its stated
      investment objective and policies.  At least ten (10) business
      days prior to the Closing Date (as defined in Section 8), the Acquiring
      Fund will advise the Acquired Fund of any investments held by the Acquired
      Fund that the Acquiring Fund would not be permitted to hold, pursuant to
      its stated investment objective and policies or otherwise.  The
      Acquired Fund, if requested by the Acquiring Fund, will dispose of any
      such securities prior to the Closing Date to the extent practicable and
      consistent with applicable legal requirements.  In addition, if
      it is determined that the investment portfolios of the Acquired Fund and
      the Acquiring Fund, when aggregated, would contain investments exceeding
      certain percentage limitations applicable to the Acquiring Fund, then the
      Acquired Fund, if requested by the Acquiring Fund, will dispose of a
      sufficient amount of such investments as may be necessary to avoid
      violating such limitations as of the Effective Time of the
      Reorganization.  The Acquired Fund will endeavor to discharge
      all of its known liabilities and obligations prior to the Closing
      Date.

            

    

    

    
      	
               
      

            	
              (d)

            	
              The
      Fund Assets shall be transferred and conveyed to the Acquiring Fund on the
      following basis:

            

    

    

    
      	
               
      

            	
              (1)

            	
              In
      exchange for the transfer of the Fund Assets, the Acquiring Fund shall
      simultaneously issue to the Acquired Fund at the Effective Time of the
      Reorganization full and fractional shares of the Acquiring Fund having an
      aggregate net asset value equal to the net value of the Fund Assets minus
      Liabilities so conveyed and assumed, all determined in accordance with
      this Agreement.  In this regard, the number of full and
      fractional shares of the Acquiring Fund delivered to the Acquired Fund
      shall be determined by dividing the value of the Fund Assets minus
      Liabilities, computed in the manner and as of the time and date set forth
      in this Agreement, by the net asset value of one Acquiring Fund share of
      computed in the manner and as of the time and date set forth in this
      Agreement.

            

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (2)

            	
              The
      net asset value of shares to be delivered by the Acquiring Fund, and the
      net value of the Fund Assets minus Liabilities to be conveyed by the
      Acquired Fund and assumed by the Acquiring Fund, shall, in each case, be
      determined as of the Valuation Time as defined in Section
      3.  The net asset value of shares of the Acquiring Fund shall be
      computed in accordance with its then current valuation
      procedures.  In determining the value of the Fund Assets, each
      security to be included in the Fund Assets shall be priced in accordance
      with the Acquiring Fund’s then current valuation
    procedures.

            

    

    

    
      	
               
      

            	
              2.

            	
              Liquidation of the
      Acquired Fund.  At the Effective Time of the
      Reorganization, the Acquired Fund shall make a liquidating distribution to
      its shareholders as follows:  Shareholders of record of the
      Acquired Fund shall be credited with full and fractional shares of the
      shares that are issued by the Acquiring Fund in connection with the TIF
      Reorganization corresponding to the Acquired Fund shares that are held of
      record by the shareholder at the Effective Time of the
      Reorganization.  Each such shareholder also shall have the right
      to receive any unpaid dividends or other distributions which were declared
      before the Effective Time of the Reorganization with respect to the
      Acquired Fund shares that are held of record by the shareholder at the
      Effective Time of the Reorganization, and the Trust shall record on its
      books the ownership of the Acquiring Fund shares by such shareholders (the
      “Transferor Record Holders”).  All of the issued and outstanding
      shares of the Acquired Fund at the Effective Time of the Reorganization
      shall be redeemed and canceled on the books of the Trust at such
      time.  As soon as reasonably possible after the Effective Time
      of the Reorganization, the Trust shall wind up the affairs of the Acquired
      Fund and shall file any final regulatory reports, including but not
      limited to any Form N-SAR and Rule 24f-2 filings, with respect to the
      Acquired Fund, and also shall take all other steps as are necessary and
      proper to effect the termination or declassification of the Acquired Fund
      in accordance with all applicable laws.  Subject to the
      provisions of this Agreement at an appropriate time as determined by the
      officers of the Trust, upon the advice of counsel, the Acquired Fund will
      be dissolved and unwound under the laws of the State of
      Delaware.

            

    

    

    
      	
               
      

            	
              3.

            	
              Valuation
      Time.  The “Valuation Time” shall be the time as of which
      the net asset value of shares of the Acquired Fund and the Acquiring Fund
      are determined pursuant to their respective valuation procedures on the
      Closing Date or such earlier or later time as may be mutually agreed to in
      writing by the parties hereto.

            

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              4.

            	
              Certain
      Representations, Warranties and Agreements of the Trust on behalf of the
      Acquired Fund.  The Trust, on behalf of itself and, where
      appropriate, on behalf of the Acquired Fund, represents and warrants as
      follows:

            

    

    

    
      	
               
      

            	
              (a)

            	
              The
      Acquired Fund is duly organized as a series of the Trust, which is a
      business trust duly formed, validly existing and in good standing under
      the laws of the State of Delaware.  The Trust is registered with
      the SEC as an open-end management investment company under the 1940 Act,
      and such registration is in full force and
  effect.

            

    

    

    
      	
               
      

            	
              (b)

            	
              The
      Trust has the power to own all of the Acquired Fund’s properties and
      assets and to consummate the transactions contemplated herein, on behalf
      of the Acquired Fund and has or will have at the Effective Time of the
      Reorganization all necessary federal, state and local authorizations to
      carry on its business as now being conducted and to consummate the
      transactions contemplated by this
Agreement.

            

    

    

    
      	
               
      

            	
              (c)

            	
              This
      Agreement has been duly authorized by the Board of Trustees of the Trust
      on behalf of the Acquired Fund, and has been executed and delivered by
      duly authorized officers of the Trust, and represents a valid and binding
      contract, enforceable in accordance with its terms, subject as to
      enforcement to bankruptcy, insolvency, reorganization, arrangement,
      moratorium, and other similar laws of general applicability relating to or
      affecting creditors’ rights and to general equity
      principles.  The execution and delivery of this Agreement does
      not, and, subject to the approval of shareholders referred to in Section
      7, the consummation of the transactions contemplated by this Agreement
      will not, violate the Amended and Restated Declaration of Trust or the
      By-Laws of the Trust, or any material agreement or arrangement to which
      the Trust is a party or by which it is
bound.

            

    

    

    
      	
               
      

            	
              (d)

            	
              The
      Acquired Fund has elected to qualify and has qualified as a regulated
      investment company under Part I of Subchapter M of Subtitle A, Chapter 1,
      of the Code, as of and since its formulation; and it qualifies and shall
      continue to qualify as a regulated investment company for its taxable year
      ending upon its liquidation.

            

    

    

    
      	
               
      

            	
              (e)

            	
              The
      Trust has valued, and will continue to value, the portfolio securities and
      other assets of the Acquired Fund in accordance with applicable legal
      requirements.

            

    

    

    
      	
               
      

            	
              (f)

            	
              The
      combined proxy statement/prospectus and form of proxy included within the
      Trust’s registration statement on Form N-14 (the “N-14 Registration
      Statement”) from its effective date with the SEC through the time of the
      shareholder meeting referred to in Section 7 and the Effective Time of the
      Reorganization, insofar as they relate to the Trust or the Acquired Fund
      (i) shall comply in all material respects with the provisions of the
      Securities Act of 1933, as amended (the “1933 Act”), the Securities
      Exchange Act of 1934, as amended (the “1934 Act”) and the 1940 Act, the
      rules and regulations thereunder, and applicable state securities laws,
      and (ii) shall not contain any untrue statement of a material fact or omit
      to state a material fact required to be stated therein or necessary to
      make the statements made therein not
misleading.

            

    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (g)

            	
              All
      of the issued and outstanding shares of the Acquired Fund have been
      validly issued and are fully paid and non-assessable, and were offered for
      sale and sold in conformity with the registration requirements of all
      applicable federal and state securities
laws.

            

    

    

    
      	
               
      

            	
              (h)

            	
              The
      Trust shall operate the business of the Acquired Fund in the ordinary
      course between the date hereof and the Effective Time of the
      Reorganization, except that the Trust shall complete all measures in
      respect of the Acquired Fund prior to the Effective Time of the
      Reorganization to ensure that the TIF Reorganization qualifies as a
      “reorganization” within the meaning of Section 368(a) of the Code,
      regardless of whether such measures are in the ordinary
      course.  It is understood that such ordinary course of business
      will include the declaration and payment of customary dividends and
      distributions and any other dividends and distributions deemed advisable
      in anticipation of the TIF Reorganization.  Notwithstanding
      anything herein to the contrary, the Trust shall take all appropriate
      action necessary in order for the Trust to receive the opinion(s) provided
      for in Sections 9(f) and 10(d).

            

    

    

    
      	
               
      

            	
              (i)

            	
              At
      the Effective Time of the Reorganization, the Acquired Fund will have good
      and marketable title to the Fund Assets and full right, power and
      authority to assign, deliver and otherwise transfer such
      assets.

            

    

    

    
      	
            	
              (j)  

            	
              At
      the Effective Time of the Reorganization, all federal and other tax
      returns and reports of the Acquired Fund required by law to have been
      filed by such time shall have been filed, and all federal and other taxes
      shall have been paid so far as due, or provision shall have been made for
      the payment thereof and, to the best knowledge of management of the Trust,
      no such return or report shall be currently under audit and no assessment
      shall have been asserted with respect to such returns or
      reports.

            

    

     

    
      	
            	
              (k)  

            	
              Except
      as otherwise disclosed in writing to and accepted by the Trust, on behalf
      of the Acquiring Fund, no litigation or administrative proceeding or
      investigation of or before any court or governmental body is presently
      pending or, to its knowledge, threatened against the Acquired Fund or any
      of its properties or assets that, if adversely determined, would
      materially and adversely affect its financial condition or the conduct of
      its business.  The Trust, on behalf of the Acquired Fund, knows
      of no facts which might form the basis for the institution of such
      proceedings and is not a party to or subject to the provisions of any
      order, decree or judgment of any court or governmental body which
      materially and adversely affects its business or its ability to consummate
      the transactions herein contemplated;
and

            

    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (l)

            	
              Since
      December 31, 2007, there has not been any material adverse change in the
      Acquired Fund’s financial condition, assets, liabilities or business,
      other than changes occurring in the ordinary course of business, or any
      incurrence by the Acquired Fund of indebtedness maturing more than one
      year from the date such indebtedness was incurred, except as otherwise
      disclosed to and accepted by the Acquiring Fund.  For the
      purposes of this subparagraph (l), a decline in net asset value per share
      of Acquired Fund shares due to declines in market values of securities
      held by the Acquired Fund, the discharge of Acquired Fund liabilities, or
      the redemption of Acquired Fund shares by shareholders of the Acquired
      Fund shall not constitute a material adverse
  change.

            

    

     

    
      	
               
      

            	
              5.

            	
              Certain
      Representations, Warranties and Agreements of the Trust on Behalf of the
      Acquiring Fund.  The Trust, on behalf of itself and where
      appropriate, on behalf of the Acquiring Fund, represents and warrants as
      follows:

            

    

    

    
      	
               
      

            	
              (a)

            	
              The
      Acquiring Fund is duly organized as a series of the Trust which is a
      business trust duly formed, validly existing and in good standing under
      the laws of the State of Delaware and is registered with the SEC as an
      open-end management investment company under the 1940 Act and such
      registration is in full force and
effect.

            

    

    

    
      	
               
      

            	
              (b)

            	
              The
      Trust has the power to own all of its properties and assets and to
      consummate the transactions contemplated herein, and has or will have at
      the Effective Time of the Reorganization all necessary federal, state and
      local authorizations to carry on its business as now being conducted and
      to consummate the transactions contemplated by this
    Agreement.

            

    

    

    
      	
               
      

            	
              (c)

            	
              This
      Agreement has been duly authorized by the Board of Trustees of the Trust
      on behalf of the Acquiring Fund, and executed and delivered by duly
      authorized officers of the Trust, and represents a valid and binding
      contract, enforceable in accordance with its terms, subject as to
      enforcement to bankruptcy, insolvency, reorganization, arrangement,
      moratorium and other similar laws of general applicability relating to or
      affecting creditors’ rights and to general equity
      principles.  The execution and delivery of this Agreement does
      not, and the consummation of the transactions contemplated by this
      Agreement will not, violate the Amended and Restated Declaration of Trust
      of the Trust or any material agreement or arrangement to which it is a
      party or by which it is bound.

            

    

    

    
      	
               
      

            	
              (d)

            	
              The
      Acquiring Fund has elected to qualify and has qualified as a regulated
      investment company under Part I of Subchapter M of Subtitle A, Chapter 1,
      of the Code, as of and since its formation; and it qualifies and shall
      continue to qualify as a regulated investment company for its current
      taxable year.

            

    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (e)

            	
              The
      Trust has valued, and will continue to value, the portfolio securities and
      other assets of the Acquiring Fund in accordance with applicable legal
      requirements.

            

    

    

    
      	
               
      

            	
              (f)

            	
              The
      N-14 Registration Statement from its effective date with the SEC through
      the time of the shareholder meeting referred to in Section 7 and at the
      Effective Time of the Reorganization, insofar as it relates to the Trust
      or the Acquiring Fund (i) shall comply in all material respects with
      the provisions of the 1933 Act, the 1934 Act and the 1940 Act, the rules
      and regulations thereunder, and state securities laws, and (ii) shall not
      contain any untrue statement of a material fact or omit to state a
      material fact required to be stated therein or necessary to make the
      statements made therein not
misleading.

            

    

    

    
      	
               
      

            	
              (g)

            	
              The
      shares of the Acquiring Fund to be issued and delivered to the Acquired
      Fund for the account of the shareholders of the Acquired Fund, pursuant to
      the terms hereof, shall have been duly authorized as of the Effective Time
      of the Reorganization and, when so issued and delivered, shall be duly and
      validly issued, fully paid and non-assessable, and no shareholder of the
      Acquiring Fund shall have any preemptive right of subscription or purchase
      in respect thereto.

            

    

    

    
      	
               
      

            	
              (h)

            	
              All
      of the issued and outstanding shares of the Acquiring Fund have been
      validly issued and are fully paid and non-assessable, and were offered for
      sale and sold in conformity with the registration requirements of all
      applicable federal and state securities
laws.

            

    

    

    
      	
            	
              (i)

            	
              The
      Trust shall operate the business of the Acquiring Fund in the ordinary
      course between the date hereof and the Effective Time of the
      Reorganization, it being understood that such ordinary course of business
      will include the declaration and payment of customary dividends and
      distributions and any other dividends and distributions deemed advisable
      in anticipation of the TIF Reorganization.  Notwithstanding
      anything herein to the contrary, the Trust shall take all appropriate
      action necessary in order for the Trust to receive the opinion(s) provided
      for in Sections 9(f) and 10(d).

            

    

     

    
      	
               
      

            	
              (j)

            	
              At
      the Effective Time of the Reorganization, all federal and other tax
      returns and reports of the Acquiring Fund required by law to have been
      filed by such time shall have been filed, and all federal and other taxes
      shall have been paid so far as due, or provision shall have been made for
      the payment thereof and, to the best knowledge of management of the Trust,
      no such return or report shall be currently under audit and no assessment
      shall have been asserted with respect to such returns or
      reports.

            

    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (k)

            	
              Except
      as otherwise disclosed in writing to and accepted by the Trust on behalf
      of the Acquired Fund, no litigation or administrative proceeding or
      investigation of or before any court or governmental body is presently
      pending or to the Acquiring Fund’s knowledge, threatened against the
      Trust, on behalf of the Acquiring Fund, or any of the Acquiring Fund’s
      properties or assets that, if adversely determined, would materially and
      adversely affect the Acquiring Fund’s financial condition or the conduct
      of its business.  The Trust, on behalf of the Acquiring Fund,
      knows of no facts which might form the basis for the institution of such
      proceedings and is not a party to or subject to the provisions of any
      order, decree or judgment of any court or governmental body which
      materially and adversely affects the Acquiring Fund’s business or its
      ability to consummate the transactions herein
  contemplated.

            

    

    

    
      	
               
      

            	
              (l)

            	
              Since
      December 31, 2007, there has not been any material adverse change in the
      Acquiring Fund’s financial condition, assets, liabilities or business,
      other than changes occurring in the ordinary course of business, or any
      incurrence by the Acquiring Fund of indebtedness maturing more than one
      year from the date such indebtedness was incurred, except as otherwise
      disclosed to an accepted by the Acquired Fund.  For purposes of
      this subparagraph (l), a decline in net asset value per share of the
      Acquiring Fund shares due to declines in market values of securities held
      by the Acquiring Fund, the discharge of Acquiring Fund liabilities, or the
      redemption of Acquiring Fund shares by shareholders of the Acquiring Fund,
      shall not constitute a material adverse
change.

            

    

    

    
      	
               
      

            	
              6.

            	
              Regulatory
      Filings.  The Trust will file the N-14 Registration
      Statement with the SEC.

            

    

    

    
      	
               
      

            	
              7.

            	
              Shareholder
      Action.  After the effective date of the N-14
      Registration Statement, the Trust shall hold a meeting of the shareholders
      of the Acquired Fund for the purpose of considering and voting
      upon:

            

    

    

    
      	
               
      

            	
              (a)

            	
              approval
      of this Agreement and the TIF Reorganization contemplated hereby;
      and

            

    

    

    
      	
              (b)

            	
              such
      other matters as may be determined by the Board of Trustees of
      the

            	
              Trust.

            

    

    

    
      	
               
      

            	
              8.

            	
              Closing Date,
      Effective Time of the Reorganization.  The “Closing Date”
      shall be May __, 2008, or such earlier or later dates as the parties shall
      agree.  Delivery of the Fund Assets and the shares of the
      Acquiring Fund to be issued pursuant to Section 1 and the liquidation of
      the Acquired Fund pursuant to Section 2 shall occur on the day following
      the Closing Date, whether or not such day is a business day, or on such
      other date, and at such place and time, as may be mutually agreed, by the
      parties hereto.  The date and time at which such actions are
      taken are referred to herein as the “Effective Time of the
      Reorganization.”  To the extent any Fund Assets are, for any
      reason, not transferred at the Effective Time of the Reorganization, the
      Trust shall cause such Fund Assets to be transferred in accordance with
      this Agreement at the earliest practicable date
  thereafter.

            

    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              9.

            	
              Conditions to the
      Trust’s Obligations on Behalf of the Acquiring Fund.  The
      obligations of the Trust, on behalf of the Acquiring Fund, hereunder shall
      be subject to the following conditions
  precedent:

            

    

    

    
      	
               
      

            	
              (a)

            	
              This
      Agreement and the TIF Reorganization shall have been approved by the Board
      of Trustees of the Trust and by a requisite vote of the shareholders of
      the Acquired Fund in the manner required by the Trust’s Amended and
      Restated Declaration of Trust, By-Laws, applicable law and this
      Agreement.

            

    

    

    
      	
               
      

            	
              (b)

            	
              All
      representations and warranties of the Trust made in this Agreement shall
      be true and correct in all material respects as if made at and as of the
      Valuation Time and the Effective Time of the
    Reorganization.

            

    

    

    
      	
               
      

            	
              (c)

            	
              The
      Trust shall have delivered to the Trust a statement of assets and
      liabilities of the Acquired Fund, showing the tax basis of such assets for
      federal income tax purposes by lot and the holding periods of such assets,
      as of the Valuation Time.

            

    

    

    
      	
               
      

            	
              (d)

            	
              The
      Trust shall have duly executed and delivered to the Trust such bills of
      sale, assignments, certificates and other instruments of transfer
      (“Transfer Documents”) as the Trust may deem necessary or desirable to
      transfer all of the Acquired Fund’s rights, title and interest in and to
      the Fund Assets.

            

    

    

    
      	
               
      

            	
              (e)

            	
              The
      Trust shall have delivered a certificate executed in its name by an
      appropriate officer, dated as of the Closing Date, to the effect that the
      representations and warranties of the Trust on behalf of the Acquired Fund
      made in this Agreement are true and correct at and as of the Valuation
      Time and that, to the best of its knowledge, the Fund Assets include only
      assets which the Acquiring Fund may properly acquire under its investment
      objective, policies and limitations and may otherwise be lawfully acquired
      by the Acquiring Fund.

            

    

    

    
      	
               
      

            	
              (f)

            	
              The
      Trust shall have received an opinion of Paul, Hastings, Janofsky &
      Walker LLP, upon which the Acquiring Fund and its shareholders may rely,
      in form and substance reasonably satisfactory to the Trust based upon
      representations made in certificates provided by the Trust, and/or its
      affiliates and/or principal shareholders of the Acquiring Fund and/or the
      Acquired Fund to Paul, Hastings, Janofsky & Walker LLP and dated as of
      the Closing Date, substantially to the effect that the TIF Reorganization
      will qualify as a “reorganization” within the meaning of Section 368(a) of
      the Code, and the Acquiring Fund and the Acquired Fund will each be a
      “party to a reorganization”, within the meaning of Section 368(b) of the
      Code, with respect to the TIF
Reorganization.

            

    

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (g)

            	
              The
      N-14 Registration Statement shall have become effective and no stop order
      suspending the effectiveness shall have been instituted, or to the
      knowledge of the Trust, contemplated by the
SEC.

            

    

    

    
      	
               
      

            	
              (h)

            	
              No
      action, suit or other proceeding shall be threatened or pending before any
      court or governmental agency in which it is sought to restrain or
      prohibit, or obtain damages or other relief in connection with, this
      Agreement or the transactions contemplated
  herein.

            

    

    

    
      	
               
      

            	
              (i)

            	
              The
      SEC shall not have issued any unfavorable advisory report under Section
      25(b) of the 1940 Act nor instituted any proceeding seeking to enjoin
      consummation of the transactions contemplated by this Agreement under
      Section 25(c) of the 1940 Act.

            

    

    

    
      	
               
      

            	
              (j)

            	
              The
      Trust on behalf of the Acquired Fund shall have performed and complied in
      all material respects with each of its agreements and covenants required
      by this Agreement to be performed or complied with by it prior to or at
      the Valuation Time and the Effective Time of the
      Reorganization.

            

    

    

    
      	
               
      

            	
              (k)

            	
              The
      Trust shall have received a duly executed instrument whereby the Acquiring
      Fund assumes all of the liabilities of the Acquired
  Fund.

            

    

    

    
      	
               
      

            	
              (l)

            	
              Except
      to the extent prohibited by Rule 19b-1 under the 1940 Act, prior to the
      Valuation Time, the Acquired Fund shall have declared a dividend or
      dividends, with a record date and ex-dividend date prior to the Valuation
      Time, which, together with all previous dividends, shall have the effect
      of distributing to its shareholders all of its previously undistributed
      (i) “investment company taxable income” within the meaning of Section
      852(b) of the Code (determined without regarding Section 852(b)(2)(D) of
      the Code), (ii) excess of (A) the amount specified in Section
      852(a)(1)(B)(i) of the Code over (B) the amount specified in Section
      852(a)(1)(B)(ii) of the Code, and (iii) “net capital gain” (within the
      meaning of Section 1222(11) of the Code), if any, realized in taxable
      periods or years ending on or before Effective
  Time.

            

    

    

    
      	
               
      

            	
              10.

            	
              Conditions to the
      Trust’s Obligations on Behalf of the Acquired Fund.  The
      obligations of the Trust, on behalf of the Acquired Fund, hereunder shall
      be subject to the following conditions
  precedent:

            

    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (a)

            	
              This
      Agreement and the TIF Reorganization shall have been approved by the Board
      of Trustees of the Trust on behalf of the Acquiring
  Fund.

            

    

    

    
      	
               
      

            	
              (b)

            	
              All
      representations and warranties of the Trust made in this Agreement shall
      be true and correct in all material respects as if made at and as of the
      Valuation Time and the Effective Time of the
    Reorganization.

            

    

    

    
      	
               
      

            	
              (c)

            	
              The
      Trust shall have delivered a certificate executed in its name by an
      appropriate officer, dated as of the Closing Date, to the effect that the
      representations and warranties of the Acquiring Fund made in this
      Agreement are true and correct at and as of the Valuation
      Time.

            

    

    

    
      	
               
      

            	
              (d)

            	
              The
      Trust shall have received an opinion of Paul, Hastings, Janofsky &
      Walker LLP, upon which the Acquired Fund and its shareholders may rely, in
      form and substance reasonably satisfactory to the Trust, based upon
      representations made in certificates provided by the Trust, and/or its
      affiliates and/or principal shareholders of the Acquiring Fund and/or the
      Acquired Fund to Paul, Hastings, Janofsky & Walker LLP, and dated as
      of the Closing Date, substantially to the effect that, for federal income
      tax purposes, the TIF Reorganization will qualify as a “reorganization”
      within the meaning of Section 368(a) of the Code, and the Acquiring Fund
      and the Acquired Fund will each be a “party to a reorganization,” within
      the meaning of Section 368(b) of the Code, with respect to the TIF
      Reorganization.

            

    

    

    
      	
               
      

            	
              (e)

            	
              The
      N-14 Registration Statement shall have become effective and no stop order
      suspending such effectiveness shall have been instituted or, to the
      knowledge of the Trust, contemplated by the
SEC.

            

    

    

    
      	
               
      

            	
              (f)

            	
              No
      action, suit or other proceeding shall be threatened or pending before any
      court or governmental agency in which it is sought to restrain or prohibit
      or obtain damages or other relief in connection with this Agreement or the
      transactions contemplated herein.

            

    

    

    
      	
               
      

            	
              (g)

            	
              The
      SEC shall not have issued any unfavorable advisory report under Section
      25(b) of the 1940 Act nor instituted any proceeding seeking to enjoin
      consummation of the transactions contemplated by this Agreement under
      Section 25(c) of the 1940 Act.

            

    

    

    
      	
               
      

            	
              (h)

            	
              The
      Trust on behalf of the Acquiring Fund shall have performed and complied in
      all material respects with each of its agreements and covenants required
      by this Agreement to be performed or complied with by it prior to or at
      the Valuation Time and the Effective Time of the
      Reorganization.

            

    

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              11.

            	
              Tax
      Matters

            

    

    

    
      	
               
      

            	
              (a)

            	
              The
      Trust hereby represents and warrants on behalf of the Acquiring Fund and
      the Acquired Fund that each shall use its best efforts to cause the TIF
      Reorganization to qualify, and will not (whether before or after
      consummation of the TIF Reorganization) take any actions that could
      prevent the TIF Reorganization from qualifying, as a “reorganization”
      under the provisions of Section 368 of the
Code.

            

    

    

    
      	
               
      

            	
              (b)

            	
              Except
      where otherwise required by law, the parties shall not take a position on
      any tax returns inconsistent with the treatment of the TIF Reorganization
      for tax purposes as a “reorganization,” within the meaning of Section
      368(a) of the Code and the Acquiring Fund and the Acquired Fund will
      comply with the record keeping and information filing requirements of
      Section 1.368-3 of the Treasury Regulation in accordance
      therewith.

            

    

    

    
      	
               
      

            	
              12.

            	
              Survival of
      Representations and Warranties.  The representations and
      warranties of the Trust on behalf of the Acquiring Fund and the Trust on
      behalf of the Acquired Fund set forth in this Agreement shall survive the
      delivery of the Fund Assets to the Acquiring Fund and the issuance of the
      shares of the Acquiring Fund at the Effective Time of the Reorganization
      to the Acquired Fund’s
shareholders.

            

    

    

    
      	
               
      

            	
              13.

            	
              Termination of
      Agreement.  This Agreement may be terminated by a party
      at or, in the case of Subsection 13(c), below, at any time prior to, the
      Effective Time of the Reorganization by a vote of a majority of its Board
      members as provided below:

            

    

    

    
      	
               
      

            	
              (a)

            	
              By
      the Trust on behalf of the Acquiring Fund if the conditions set forth in
      Section 9 are not satisfied as specified in said
  Section;

            

    

    

    
      	
               
      

            	
              (b)

            	
              By
      the Trust on behalf of the Acquired Fund if the conditions set forth in
      Section 10 are not satisfied as specified in said Section;
    and

            

    

    

    
      	
               
      

            	
              (c)

            	
              By
      resolution of the Trust’s Board of Trustees if circumstances should
      develop that, in its opinion, make proceeding with the agreement
      inadvisable.

            

    

    

    
      	
               
      

            	
              14.

            	
              Governing
      Law.  This Agreement and the transactions contemplated
      hereby shall be governed, construed and enforced in accordance with the
      laws of the State of Delaware, except to the extent preempted by federal
      law.

            

    

    

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
              15.

            	
              Brokerage Fees and
      Expenses.

            

    

    

    
      	
               
      

            	
              (a)

            	
              The
      Trust represents and warrants that there are no brokers or finders
      entitled to receive any payments in connection with the transactions
      provided for herein.

            

    

    

    
      	
               
      

            	
              (b)

            	
              Firsthand
      Capital Management, Inc. will be responsible for the expenses related to
      entering into and carrying out the provisions of this Agreement, whether
      or not the transactions contemplated hereby are
    consummated.

            

    

    

    
      	
               
      

            	
              16.

            	
              Amendments.  This
      Agreement may be amended, modified or supplemented in such manner as may
      be mutually agreed upon in writing by the authorized officers of the
      Trust; provided, however, that following the meeting of the shareholders
      of the Acquired Fund, no such amendment may have the effect of changing
      the provisions for determining the number of shares of the Acquiring Fund
      to be issued to the Transferor Record Holders under this Agreement to the
      detriment of such Transferor Record Holders, or otherwise materially and
      adversely affecting the Acquired Fund, without the Acquired Fund obtaining
      its shareholders’ further approval.

            

    

     

    IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by
their duly authorized officers designated below as of the date first written
above.

    

    

    
      	 
      	
              FIRSTHAND
      FUNDS

              On
      behalf of Firsthand Technology Innovators Fund

               

            
	 	 By:
      /s/ Kevin Landis
	 	 Name:  Kevin
      Landis
	 	 Title:  President
	 	 
	 
      	
              FIRSTHAND
      FUNDS

              On
      behalf of Firsthand Technology Value Fund

               

            
	 	 By:
      /s/ Kevin Landis
	 	 Name:  Kevin
      Landis
	 	 Title:  President

    

     

    13firsthand_ex4b-0408.htm

    Appendix
C

    

    AGREEMENT
AND PLAN OF REORGANIZATION

    

    This
AGREEMENT AND PLAN OF REORGANIZATION (“Agreement”) is made as of this 11 day of
February, 2008 by and between Firsthand Technology Value Fund (the “Acquiring
Fund”) and Firsthand Global Technology Fund (the “Acquired Fund”), each of which
is a series of Firsthand Funds, a Delaware statutory trust (the
“Trust”).

    

    WHEREAS,
the Trust is an open-end management investment company registered with the
Securities and Exchange Commission (the “SEC”) under the Investment Company Act
of 1940, as amended (the “1940 Act”);

    

    WHEREAS,
the parties desire that the Fund Assets and Liabilities (as defined below) of
the Acquired Fund be conveyed to and acquired and assumed by the Acquiring Fund
in exchange for shares of equal U.S. dollar value of the Acquiring Fund which
shall thereafter promptly be distributed to the shareholders of the Acquired
Fund in connection with its liquidation as described in this Agreement (such
acquisition and assumption of the Acquired Fund’s Fund Assets and Liabilities by
the Acquiring Fund shall be referred to as the  “GTF Reorganization”);
and

    

    WHEREAS,
the parties intend that the GTF Reorganization qualify as a “reorganization,”
within the meaning of Section 368(a) of the Internal Revenue Code of 1986,
as amended (the “Code”), and that the Acquiring Fund and the Acquired Fund will
each be a “party to a reorganization,” within the meaning of Section 368(b)
of the Code, with respect to the GTF Reorganization.

    

    NOW,
THEREFORE, in accordance with the terms and conditions described herein, the
Acquired Fund and Acquiring Fund shall be consolidated as follows:

    

    1.         Conveyance of Fund Assets
and Liabilities of the Acquired Fund.

    

    
      	
               
      

            	
              (a)

            	
              Except
      as provided below, at the Effective Time of the Reorganization (as defined
      in Section 8) all assets of every kind, and all interests, rights,
      privileges and powers of the Acquired Fund (the “Fund Assets”), subject to
      all liabilities of the Acquired Fund existing as of the Effective Time of
      the Reorganization (the “Liabilities”), shall be transferred by the
      Acquired Fund to the Acquiring Fund and shall be accepted and assumed by
      the Acquiring Fund, as more particularly set forth in this Agreement, such
      that at and after the Effective Time of the Reorganization:  (i)
      all Fund Assets of the Acquired Fund shall become the assets of the
      Acquiring Fund; and (ii) all Liabilities of the Acquired Fund shall attach
      to the Acquiring Fund, enforceable against the Acquiring Fund to the same
      extent as if originally incurred by the Acquiring
  Fund.

            

    

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (b)

            	
              It
      is understood and agreed that the Fund Assets shall include all property
      and assets of any nature whatsoever, including, without limitation, all
      cash, cash equivalents, securities, claims (whether absolute or
      contingent, known or unknown, accrued or unaccrued) and receivables
      (including dividend and interest receivables) owned or exercisable by the
      Acquired Fund, and any deferred or prepaid expenses shown as an asset on
      the Acquired Fund’s books and that the Liabilities of the Acquired Fund
      shall include all liabilities, whether known or unknown, accrued or
      unaccrued, absolute or contingent, in all cases, existing at the Effective
      Time of the Reorganization.

            

    

    

    
      	
               
      

            	
              (c)

            	
              It
      is understood and agreed that the Acquired Fund may sell any of the
      securities or other assets it holds prior to the Effective Time of the
      Reorganization but will not, without the prior approval of the Acquiring
      Fund, acquire any additional securities other than securities that the
      Acquiring Fund is permitted to purchase in accordance with its stated
      investment objective and policies.  At least ten (10) business
      days prior to the Closing Date (as defined in Section 8), the Acquiring
      Fund will advise the Acquired Fund of any investments held by the Acquired
      Fund that the Acquiring Fund would not be permitted to hold, pursuant to
      its stated investment objective and policies or otherwise.  The
      Acquired Fund, if requested by the Acquiring Fund, will dispose of any
      such securities prior to the Closing Date to the extent practicable and
      consistent with applicable legal requirements.  In addition, if
      it is determined that the investment portfolios of the Acquired Fund and
      the Acquiring Fund, when aggregated, would contain investments exceeding
      certain percentage limitations applicable to the Acquiring Fund, then the
      Acquired Fund, if requested by the Acquiring Fund, will dispose of a
      sufficient amount of such investments as may be necessary to avoid
      violating such limitations as of the Effective Time of the
      Reorganization.  The Acquired Fund will endeavor to discharge
      all of its known liabilities and obligations prior to the Closing
      Date.

            

    

    

    
      	
               
      

            	
              (d)

            	
              The
      Fund Assets shall be transferred and conveyed to the Acquiring Fund on the
      following basis:

            

    

    

    
      	
               
      

            	
              (1)

            	
              In
      exchange for the transfer of the Fund Assets, the Acquiring Fund shall
      simultaneously issue to the Acquired Fund at the Effective Time of the
      Reorganization full and fractional shares of the Acquiring Fund having an
      aggregate net asset value equal to the net value of the Fund Assets minus
      Liabilities so conveyed and assumed, all determined in accordance with
      this Agreement.  In this regard, the number of full and
      fractional shares of the Acquiring Fund delivered to the Acquired Fund
      shall be determined by dividing the value of the Fund Assets minus
      Liabilities, computed in the manner and as of the time and date set forth
      in this Agreement, by the net asset value of one Acquiring Fund share of
      computed in the manner and as of the time and date set forth in this
      Agreement.

            

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (2)

            	
              The
      net asset value of shares to be delivered by the Acquiring Fund, and the
      net value of the Fund Assets minus Liabilities to be conveyed by the
      Acquired Fund and assumed by the Acquiring Fund, shall, in each case, be
      determined as of the Valuation Time as defined in Section
      3.  The net asset value of shares of the Acquiring Fund shall be
      computed in accordance with its then current valuation
      procedures.  In determining the value of the Fund Assets, each
      security to be included in the Fund Assets shall be priced in accordance
      with the Acquiring Fund’s then current valuation
    procedures.

            

    

    

    
      	
               
      

            	
              2.

            	
              Liquidation of the
      Acquired Fund.  At the Effective Time of the
      Reorganization, the Acquired Fund shall make a liquidating distribution to
      its shareholders as follows:  Shareholders of record of the
      Acquired Fund shall be credited with full and fractional shares of the
      shares that are issued by the Acquiring Fund in connection with the GTF
      Reorganization corresponding to the Acquired Fund shares that are held of
      record by the shareholder at the Effective Time of the
      Reorganization.  Each such shareholder also shall have the right
      to receive any unpaid dividends or other distributions which were declared
      before the Effective Time of the Reorganization with respect to the
      Acquired Fund shares that are held of record by the shareholder at the
      Effective Time of the Reorganization, and the Trust shall record on its
      books the ownership of the Acquiring Fund shares by such shareholders (the
      “Transferor Record Holders”).  All of the issued and outstanding
      shares of the Acquired Fund at the Effective Time of the Reorganization
      shall be redeemed and canceled on the books of the Trust at such
      time.  As soon as reasonably possible after the Effective Time
      of the Reorganization, the Trust shall wind up the affairs of the Acquired
      Fund and shall file any final regulatory reports, including but not
      limited to any Form N-SAR and Rule 24f-2 filings, with respect to the
      Acquired Fund, and also shall take all other steps as are necessary and
      proper to effect the termination or declassification of the Acquired Fund
      in accordance with all applicable laws.  Subject to the
      provisions of this Agreement at an appropriate time as determined by the
      officers of the Trust, upon the advice of counsel, the Acquired Fund will
      be dissolved and unwound under the laws of the State of
      Delaware.

            

    

    

    
      	
               
      

            	
              3.

            	
              Valuation
      Time.  The “Valuation Time” shall be the time as of which
      the net asset value of shares of the Acquired Fund and the Acquiring Fund
      are determined pursuant to their respective valuation procedures on the
      Closing Date or such earlier or later time as may be mutually agreed to in
      writing by the parties hereto.

            

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              4.

            	
              Certain
      Representations, Warranties and Agreements of the Trust on behalf of the
      Acquired Fund.  The Trust, on behalf of itself and, where
      appropriate, on behalf of the Acquired Fund, represents and warrants as
      follows:

            

    

    

    
      	
               
      

            	
              (a)

            	
              The
      Acquired Fund is duly organized as a series of the Trust, which is a
      business trust duly formed, validly existing and in good standing under
      the laws of the State of Delaware.  The Trust is registered with
      the SEC as an open-end management investment company under the 1940 Act,
      and such registration is in full force and
  effect.

            

    

    

    
      	
               
      

            	
              (b)

            	
              The
      Trust has the power to own all of the Acquired Fund’s properties and
      assets and to consummate the transactions contemplated herein, on behalf
      of the Acquired Fund and has or will have at the Effective Time of the
      Reorganization all necessary federal, state and local authorizations to
      carry on its business as now being conducted and to consummate the
      transactions contemplated by this
Agreement.

            

    

    

    
      	
               
      

            	
              (c)

            	
              This
      Agreement has been duly authorized by the Board of Trustees of the Trust
      on behalf of the Acquired Fund, and has been executed and delivered by
      duly authorized officers of the Trust, and represents a valid and binding
      contract, enforceable in accordance with its terms, subject as to
      enforcement to bankruptcy, insolvency, reorganization, arrangement,
      moratorium, and other similar laws of general applicability relating to or
      affecting creditors’ rights and to general equity
      principles.  The execution and delivery of this Agreement does
      not, and, subject to the approval of shareholders referred to in Section
      7, the consummation of the transactions contemplated by this Agreement
      will not, violate the Amended and Restated Declaration of Trust or the
      By-Laws of the Trust, or any material agreement or arrangement to which
      the Trust is a party or by which it is
bound.

            

    

    

    
      	
               
      

            	
              (d)

            	
              The
      Acquired Fund has elected to qualify and has qualified as a regulated
      investment company under Part I of Subchapter M of Subtitle A, Chapter 1,
      of the Code, as of and since its formulation; and it qualifies and shall
      continue to qualify as a regulated investment company for its taxable year
      ending upon its liquidation.

            

    

    

    
      	
               
      

            	
              (e)

            	
              The
      Trust has valued, and will continue to value, the portfolio securities and
      other assets of the Acquired Fund in accordance with applicable legal
      requirements.

            

    

    

    
      	
               
      

            	
              (f)

            	
              The
      combined proxy statement/prospectus and form of proxy included within the
      Trust’s registration statement on Form N-14 (the “N-14 Registration
      Statement”) from its effective date with the SEC through the time of the
      shareholder meeting referred to in Section 7 and the Effective Time of the
      Reorganization, insofar as they relate to the Trust or the Acquired Fund
      (i) shall comply in all material respects with the provisions of the
      Securities Act of 1933, as amended (the “1933 Act”), the Securities
      Exchange Act of 1934, as amended (the “1934 Act”) and the 1940 Act, the
      rules and regulations thereunder, and applicable state securities laws,
      and (ii) shall not contain any untrue statement of a material fact or omit
      to state a material fact required to be stated therein or necessary to
      make the statements made therein not
misleading.

            

    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (g)

            	
              All
      of the issued and outstanding shares of the Acquired Fund have been
      validly issued and are fully paid and non-assessable, and were offered for
      sale and sold in conformity with the registration requirements of all
      applicable federal and state securities
laws.

            

    

    

    
      	
               
      

            	
              (h)

            	
              The
      Trust shall operate the business of the Acquired Fund in the ordinary
      course between the date hereof and the Effective Time of the
      Reorganization, except that the Trust shall complete all measures in
      respect of the Acquired Fund prior to the Effective Time of the
      Reorganization to ensure that the GTF Reorganization qualifies as a
      “reorganization” within the meaning of Section 368(a) of the Code,
      regardless of whether such measures are in the ordinary
      course.  It is understood that such ordinary course of business
      will include the declaration and payment of customary dividends and
      distributions and any other dividends and distributions deemed advisable
      in anticipation of the GTF Reorganization.  Notwithstanding
      anything herein to the contrary, the Trust shall take all appropriate
      action necessary in order for the Trust to receive the opinion(s) provided
      for in Sections 9(f) and 10(d).

            

    

    

    
      	
               
      

            	
              (i)

            	
              At
      the Effective Time of the Reorganization, the Acquired Fund will have good
      and marketable title to the Fund Assets and full right, power and
      authority to assign, deliver and otherwise transfer such
      assets.

            

    

    

    
      	
            	
              (j)  

            	
              At
      the Effective Time of the Reorganization, all federal and other tax
      returns and reports of the Acquired Fund required by law to have been
      filed by such time shall have been filed, and all federal and other taxes
      shall have been paid so far as due, or provision shall have been made for
      the payment thereof and, to the best knowledge of management of the Trust,
      no such return or report shall be currently under audit and no assessment
      shall have been asserted with respect to such returns or
      reports.

            

    

     

    
      	
            	
              (k)  

            	
              Except
      as otherwise disclosed in writing to and accepted by the Trust, on behalf
      of the Acquiring Fund, no litigation or administrative proceeding or
      investigation of or before any court or governmental body is presently
      pending or, to its knowledge, threatened against the Acquired Fund or any
      of its properties or assets that, if adversely determined, would
      materially and adversely affect its financial condition or the conduct of
      its business.  The Trust, on behalf of the Acquired Fund, knows
      of no facts which might form the basis for the institution of such
      proceedings and is not a party to or subject to the provisions of any
      order, decree or judgment of any court or governmental body which
      materially and adversely affects its business or its ability to consummate
      the transactions herein contemplated;
and

            

    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (l)

            	
              Since
      December 31, 2007, there has not been any material adverse change in the
      Acquired Fund’s financial condition, assets, liabilities or business,
      other than changes occurring in the ordinary course of business, or any
      incurrence by the Acquired Fund of indebtedness maturing more than one
      year from the date such indebtedness was incurred, except as otherwise
      disclosed to and accepted by the Acquiring Fund.  For the
      purposes of this subparagraph (l), a decline in net asset value per share
      of Acquired Fund shares due to declines in market values of securities
      held by the Acquired Fund, the discharge of Acquired Fund liabilities, or
      the redemption of Acquired Fund shares by shareholders of the Acquired
      Fund shall not constitute a material adverse
  change.

            

    

     

    
      	
               
      

            	
              5.

            	
              Certain
      Representations, Warranties and Agreements of the Trust on Behalf of the
      Acquiring Fund.  The Trust, on behalf of itself and where
      appropriate, on behalf of the Acquiring Fund, represents and warrants as
      follows:

            

    

    

    
      	
               
      

            	
              (a)

            	
              The
      Acquiring Fund is duly organized as a series of the Trust which is a
      business trust duly formed, validly existing and in good standing under
      the laws of the State of Delaware and is registered with the SEC as an
      open-end management investment company under the 1940 Act and such
      registration is in full force and
effect.

            

    

    

    
      	
               
      

            	
              (b)

            	
              The
      Trust has the power to own all of its properties and assets and to
      consummate the transactions contemplated herein, and has or will have at
      the Effective Time of the Reorganization all necessary federal, state and
      local authorizations to carry on its business as now being conducted and
      to consummate the transactions contemplated by this
    Agreement.

            

    

    

    
      	
               
      

            	
              (c)

            	
              This
      Agreement has been duly authorized by the Board of Trustees of the Trust
      on behalf of the Acquiring Fund, and executed and delivered by duly
      authorized officers of the Trust, and represents a valid and binding
      contract, enforceable in accordance with its terms, subject as to
      enforcement to bankruptcy, insolvency, reorganization, arrangement,
      moratorium and other similar laws of general applicability relating to or
      affecting creditors’ rights and to general equity
      principles.  The execution and delivery of this Agreement does
      not, and the consummation of the transactions contemplated by this
      Agreement will not, violate the Amended and Restated Declaration of Trust
      of the Trust or any material agreement or arrangement to which it is a
      party or by which it is bound.

            

    

    

    
      	
               
      

            	
              (d)

            	
              The
      Acquiring Fund has elected to qualify and has qualified as a regulated
      investment company under Part I of Subchapter M of Subtitle A, Chapter 1,
      of the Code, as of and since its formation; and it qualifies and shall
      continue to qualify as a regulated investment company for its current
      taxable year.

            

    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (e)

            	
              The
      Trust has valued, and will continue to value, the portfolio securities and
      other assets of the Acquiring Fund in accordance with applicable legal
      requirements.

            

    

    

    
      	
               
      

            	
              (f)

            	
              The
      N-14 Registration Statement from its effective date with the SEC through
      the time of the shareholder meeting referred to in Section 7 and at the
      Effective Time of the Reorganization, insofar as it relates to the Trust
      or the Acquiring Fund (i) shall comply in all material respects with
      the provisions of the 1933 Act, the 1934 Act and the 1940 Act, the rules
      and regulations thereunder, and state securities laws, and (ii) shall not
      contain any untrue statement of a material fact or omit to state a
      material fact required to be stated therein or necessary to make the
      statements made therein not
misleading.

            

    

    

    
      	
               
      

            	
              (g)

            	
              The
      shares of the Acquiring Fund to be issued and delivered to the Acquired
      Fund for the account of the shareholders of the Acquired Fund, pursuant to
      the terms hereof, shall have been duly authorized as of the Effective Time
      of the Reorganization and, when so issued and delivered, shall be duly and
      validly issued, fully paid and non-assessable, and no shareholder of the
      Acquiring Fund shall have any preemptive right of subscription or purchase
      in respect thereto.

            

    

    

    
      	
               
      

            	
              (h)

            	
              All
      of the issued and outstanding shares of the Acquiring Fund have been
      validly issued and are fully paid and non-assessable, and were offered for
      sale and sold in conformity with the registration requirements of all
      applicable federal and state securities
laws.

            

    

    

    
      	
            	
              (i)  

            	
              The
      Trust shall operate the business of the Acquiring Fund in the ordinary
      course between the date hereof and the Effective Time of the
      Reorganization, it being understood that such ordinary course of business
      will include the declaration and payment of customary dividends and
      distributions and any other dividends and distributions deemed advisable
      in anticipation of the GTF Reorganization.  Notwithstanding
      anything herein to the contrary, the Trust shall take all appropriate
      action necessary in order for the Trust to receive the opinion(s) provided
      for in Sections 9(f) and 10(d).

            

    

     

    
      	
               
      

            	
              (j)

            	
              At
      the Effective Time of the Reorganization, all federal and other tax
      returns and reports of the Acquiring Fund required by law to have been
      filed by such time shall have been filed, and all federal and other taxes
      shall have been paid so far as due, or provision shall have been made for
      the payment thereof and, to the best knowledge of management of the Trust,
      no such return or report shall be currently under audit and no assessment
      shall have been asserted with respect to such returns or
      reports.

            

    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (k)

            	
              Except
      as otherwise disclosed in writing to and accepted by the Trust on behalf
      of the Acquired Fund, no litigation or administrative proceeding or
      investigation of or before any court or governmental body is presently
      pending or to the Acquiring Fund’s knowledge, threatened against the
      Trust, on behalf of the Acquiring Fund, or any of the Acquiring Fund’s
      properties or assets that, if adversely determined, would materially and
      adversely affect the Acquiring Fund’s financial condition or the conduct
      of its business.  The Trust, on behalf of the Acquiring Fund,
      knows of no facts which might form the basis for the institution of such
      proceedings and is not a party to or subject to the provisions of any
      order, decree or judgment of any court or governmental body which
      materially and adversely affects the Acquiring Fund’s business or its
      ability to consummate the transactions herein
  contemplated.

            

    

    

    
      	
               
      

            	
              (l)

            	
              Since
      December 31, 2007, there has not been any material adverse change in the
      Acquiring Fund’s financial condition, assets, liabilities or business,
      other than changes occurring in the ordinary course of business, or any
      incurrence by the Acquiring Fund of indebtedness maturing more than one
      year from the date such indebtedness was incurred, except as otherwise
      disclosed to an accepted by the Acquired Fund.  For purposes of
      this subparagraph (l), a decline in net asset value per share of the
      Acquiring Fund shares due to declines in market values of securities held
      by the Acquiring Fund, the discharge of Acquiring Fund liabilities, or the
      redemption of Acquiring Fund shares by shareholders of the Acquiring Fund,
      shall not constitute a material adverse
change.

            

    

    

    
      	
               
      

            	
              6.

            	
              Regulatory
      Filings.  The Trust will file the N-14 Registration
      Statement with the SEC.

            

    

    

    
      	
               
      

            	
              7.

            	
              Shareholder
      Action.  After the effective date of the N-14
      Registration Statement, the Trust shall hold a meeting of the shareholders
      of the Acquired Fund for the purpose of considering and voting
      upon:

            

    

    

    
      	
               
      

            	
              (a)

            	
              approval
      of this Agreement and the GTF Reorganization contemplated hereby;
      and

            

    

     

    
      
        	
                 
      

              	
                (b)

              	
                
                  such
      other matters as may be determined by the Board of Trustees of the
      Trust.

                

              

      

    

    

    
      	
               
      

            	
              8.

            	
              Closing Date,
      Effective Time of the Reorganization.  The “Closing Date”
      shall be May __, 2008, or such earlier or later dates as the parties shall
      agree.  Delivery of the Fund Assets and the shares of the
      Acquiring Fund to be issued pursuant to Section 1 and the liquidation of
      the Acquired Fund pursuant to Section 2 shall occur on the day following
      the Closing Date, whether or not such day is a business day, or on such
      other date, and at such place and time, as may be mutually agreed, by the
      parties hereto.  The date and time at which such actions are
      taken are referred to herein as the “Effective Time of the
      Reorganization.”  To the extent any Fund Assets are, for any
      reason, not transferred at the Effective Time of the Reorganization, the
      Trust shall cause such Fund Assets to be transferred in accordance with
      this Agreement at the earliest practicable date
  thereafter.

            

    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              9.

            	
              Conditions to the
      Trust’s Obligations on Behalf of the Acquiring Fund.  The
      obligations of the Trust, on behalf of the Acquiring Fund, hereunder shall
      be subject to the following conditions
  precedent:

            

    

    

    
      	
               
      

            	
              (a)

            	
              This
      Agreement and the GTF Reorganization shall have been approved by the Board
      of Trustees of the Trust and by a requisite vote of the shareholders of
      the Acquired Fund in the manner required by the Trust’s Amended and
      Restated Declaration of Trust, By-Laws, applicable law and this
      Agreement.

            

    

    

    
      	
               
      

            	
              (b)

            	
              All
      representations and warranties of the Trust made in this Agreement shall
      be true and correct in all material respects as if made at and as of the
      Valuation Time and the Effective Time of the
    Reorganization.

            

    

    

    
      	
               
      

            	
              (c)

            	
              The
      Trust shall have delivered to the Trust a statement of assets and
      liabilities of the Acquired Fund, showing the tax basis of such assets for
      federal income tax purposes by lot and the holding periods of such assets,
      as of the Valuation Time.

            

    

    

    
      	
               
      

            	
              (d)

            	
              The
      Trust shall have duly executed and delivered to the Trust such bills of
      sale, assignments, certificates and other instruments of transfer
      (“Transfer Documents”) as the Trust may deem necessary or desirable to
      transfer all of the Acquired Fund’s rights, title and interest in and to
      the Fund Assets.

            

    

    

    
      	
               
      

            	
              (e)

            	
              The
      Trust shall have delivered a certificate executed in its name by an
      appropriate officer, dated as of the Closing Date, to the effect that the
      representations and warranties of the Trust on behalf of the Acquired Fund
      made in this Agreement are true and correct at and as of the Valuation
      Time and that, to the best of its knowledge, the Fund Assets include only
      assets which the Acquiring Fund may properly acquire under its investment
      objective, policies and limitations and may otherwise be lawfully acquired
      by the Acquiring Fund.

            

    

    

    
      	
               
      

            	
              (f)

            	
              The
      Trust shall have received an opinion of Paul, Hastings, Janofsky &
      Walker LLP, upon which the Acquiring Fund and its shareholders may rely,
      in form and substance reasonably satisfactory to the Trust based upon
      representations made in certificates provided by the Trust, and/or its
      affiliates and/or principal shareholders of the Acquiring Fund and/or the
      Acquired Fund to Paul, Hastings, Janofsky & Walker LLP and dated as of
      the Closing Date, substantially to the effect that the GTF Reorganization
      will qualify as a “reorganization” within the meaning of Section 368(a) of
      the Code, and the Acquiring Fund and the Acquired Fund will each be a
      “party to a reorganization”, within the meaning of Section 368(b) of the
      Code, with respect to the GTF
Reorganization.

            

    

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (g)

            	
              The
      N-14 Registration Statement shall have become effective and no stop order
      suspending the effectiveness shall have been instituted, or to the
      knowledge of the Trust, contemplated by the
SEC.

            

    

    

    
      	
               
      

            	
              (h)

            	
              No
      action, suit or other proceeding shall be threatened or pending before any
      court or governmental agency in which it is sought to restrain or
      prohibit, or obtain damages or other relief in connection with, this
      Agreement or the transactions contemplated
  herein.

            

    

    

    
      	
               
      

            	
              (i)

            	
              The
      SEC shall not have issued any unfavorable advisory report under Section
      25(b) of the 1940 Act nor instituted any proceeding seeking to enjoin
      consummation of the transactions contemplated by this Agreement under
      Section 25(c) of the 1940 Act.

            

    

    

    
      	
               
      

            	
              (j)

            	
              The
      Trust on behalf of the Acquired Fund shall have performed and complied in
      all material respects with each of its agreements and covenants required
      by this Agreement to be performed or complied with by it prior to or at
      the Valuation Time and the Effective Time of the
      Reorganization.

            

    

    

    
      	
               
      

            	
              (k)

            	
              The
      Trust shall have received a duly executed instrument whereby the Acquiring
      Fund assumes all of the liabilities of the Acquired
  Fund.

            

    

    

    
      	
               
      

            	
              (l)

            	
              Except
      to the extent prohibited by Rule 19b-1 under the 1940 Act, prior to the
      Valuation Time, the Acquired Fund shall have declared a dividend or
      dividends, with a record date and ex-dividend date prior to the Valuation
      Time, which, together with all previous dividends, shall have the effect
      of distributing to its shareholders all of its previously undistributed
      (i) “investment company taxable income” within the meaning of Section
      852(b) of the Code (determined without regarding Section 852(b)(2)(D) of
      the Code), (ii) excess of (A) the amount specified in Section
      852(a)(1)(B)(i) of the Code over (B) the amount specified in Section
      852(a)(1)(B)(ii) of the Code, and (iii) “net capital gain” (within the
      meaning of Section 1222(11) of the Code), if any, realized in taxable
      periods or years ending on or before Effective
  Time.

            

    

    

    
      	
               
      

            	
              10.

            	
              Conditions to the
      Trust’s Obligations on Behalf of the Acquired Fund.  The
      obligations of the Trust, on behalf of the Acquired Fund, hereunder shall
      be subject to the following conditions
  precedent:

            

    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (a)

            	
              This
      Agreement and the GTF Reorganization shall have been approved by the Board
      of Trustees of the Trust on behalf of the Acquiring
  Fund.

            

    

    

    
      	
               
      

            	
              (b)

            	
              All
      representations and warranties of the Trust made in this Agreement shall
      be true and correct in all material respects as if made at and as of the
      Valuation Time and the Effective Time of the
    Reorganization.

            

    

    

    
      	
               
      

            	
              (c)

            	
              The
      Trust shall have delivered a certificate executed in its name by an
      appropriate officer, dated as of the Closing Date, to the effect that the
      representations and warranties of the Acquiring Fund made in this
      Agreement are true and correct at and as of the Valuation
      Time.

            

    

    

    
      	
               
      

            	
              (d)

            	
              The
      Trust shall have received an opinion of Paul, Hastings, Janofsky &
      Walker LLP, upon which the Acquired Fund and its shareholders may rely, in
      form and substance reasonably satisfactory to the Trust, based upon
      representations made in certificates provided by the Trust, and/or its
      affiliates and/or principal shareholders of the Acquiring Fund and/or the
      Acquired Fund to Paul, Hastings, Janofsky & Walker LLP, and dated as
      of the Closing Date, substantially to the effect that, for federal income
      tax purposes, the GTF Reorganization will qualify as a “reorganization”
      within the meaning of Section 368(a) of the Code, and the Acquiring Fund
      and the Acquired Fund will each be a “party to a reorganization,” within
      the meaning of Section 368(b) of the Code, with respect to the GTF
      Reorganization.

            

    

    

    
      	
               
      

            	
              (e)

            	
              The
      N-14 Registration Statement shall have become effective and no stop order
      suspending such effectiveness shall have been instituted or, to the
      knowledge of the Trust, contemplated by the
SEC.

            

    

    

    
      	
               
      

            	
              (f)

            	
              No
      action, suit or other proceeding shall be threatened or pending before any
      court or governmental agency in which it is sought to restrain or prohibit
      or obtain damages or other relief in connection with this Agreement or the
      transactions contemplated herein.

            

    

    

    
      	
               
      

            	
              (g)

            	
              The
      SEC shall not have issued any unfavorable advisory report under Section
      25(b) of the 1940 Act nor instituted any proceeding seeking to enjoin
      consummation of the transactions contemplated by this Agreement under
      Section 25(c) of the 1940 Act.

            

    

    

    
      	
               
      

            	
              (h)

            	
              The
      Trust on behalf of the Acquiring Fund shall have performed and complied in
      all material respects with each of its agreements and covenants required
      by this Agreement to be performed or complied with by it prior to or at
      the Valuation Time and the Effective Time of the
      Reorganization.

            

    

    

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
              11.

            	
              Tax
      Matters

            

    

    

    
      	
               
      

            	
              (a)

            	
              The
      Trust hereby represents and warrants on behalf of the Acquiring Fund and
      the Acquired Fund that each shall use its best efforts to cause the GTF
      Reorganization to qualify, and will not (whether before or after
      consummation of the GTF Reorganization) take any actions that could
      prevent the GTF Reorganization from qualifying, as a “reorganization”
      under the provisions of Section 368 of the
Code.

            

    

    

    
      	
               
      

            	
              (b)

            	
              Except
      where otherwise required by law, the parties shall not take a position on
      any tax returns inconsistent with the treatment of the GTF Reorganization
      for tax purposes as a “reorganization,” within the meaning of Section
      368(a) of the Code and the Acquiring Fund and the Acquired Fund will
      comply with the record keeping and information filing requirements of
      Section 1.368-3 of the Treasury Regulation in accordance
      therewith.

            

    

    

    
      	
               
      

            	
              12.

            	
              Survival of
      Representations and Warranties.  The representations and
      warranties of the Trust on behalf of the Acquiring Fund and the Trust on
      behalf of the Acquired Fund set forth in this Agreement shall survive the
      delivery of the Fund Assets to the Acquiring Fund and the issuance of the
      shares of the Acquiring Fund at the Effective Time of the Reorganization
      to the Acquired Fund’s
shareholders.

            

    

    

    
      	
               
      

            	
              13.

            	
              Termination of
      Agreement.  This Agreement may be terminated by a party
      at or, in the case of Subsection 13(c), below, at any time prior to, the
      Effective Time of the Reorganization by a vote of a majority of its Board
      members as provided below:

            

    

    

    
      	
               
      

            	
              (a)

            	
              By
      the Trust on behalf of the Acquiring Fund if the conditions set forth in
      Section 9 are not satisfied as specified in said
  Section;

            

    

    

    
      	
               
      

            	
              (b)

            	
              By
      the Trust on behalf of the Acquired Fund if the conditions set forth in
      Section 10 are not satisfied as specified in said Section;
    and

            

    

    

    
      	
               
      

            	
              (c)

            	
              By
      resolution of the Trust’s Board of Trustees if circumstances should
      develop that, in its opinion, make proceeding with the agreement
      inadvisable.

            

    

    

    
      	
               
      

            	
              14.

            	
              Governing
      Law.  This Agreement and the transactions contemplated
      hereby shall be governed, construed and enforced in accordance with the
      laws of the State of Delaware, except to the extent preempted by federal
      law.

            

    

    

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
              15.

            	
              Brokerage Fees and
      Expenses.

            

    

    

    
      	
               
      

            	
              (a)

            	
              The
      Trust represents and warrants that there are no brokers or finders
      entitled to receive any payments in connection with the transactions
      provided for herein.

            

    

    

    
      	
               
      

            	
              (b)

            	
              Firsthand
      Capital Management, Inc. will be responsible for the expenses related to
      entering into and carrying out the provisions of this Agreement, whether
      or not the transactions contemplated hereby are
    consummated.

            

    

    

    
      	
               
      

            	
              16.

            	
              Amendments.  This
      Agreement may be amended, modified or supplemented in such manner as may
      be mutually agreed upon in writing by the authorized officers of the
      Trust; provided, however, that following the meeting of the shareholders
      of the Acquired Fund, no such amendment may have the effect of changing
      the provisions for determining the number of shares of the Acquiring Fund
      to be issued to the Transferor Record Holders under this Agreement to the
      detriment of such Transferor Record Holders, or otherwise materially and
      adversely affecting the Acquired Fund, without the Acquired Fund obtaining
      its shareholders’ further approval.

            

    

     

    IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by
their duly authorized officers designated below as of the date first written
above.

     

     

    
      
        	 
      	
                FIRSTHAND
      FUNDS

                On
      behalf of Firsthand Technology Innovators Fund

                 

              
	 	 By:
      /s/ Kevin Landis
	 	 Name:  Kevin
      Landis
	 	 Title:  President
	 	 
	 
      	
                FIRSTHAND
      FUNDS

                On
      behalf of Firsthand Technology Value Fund

                 

              
	 	 By:
      /s/ Kevin Landis
	 	 Name:  Kevin
      Landis
	 	 Title:  President

      

       

      13

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