EXHIBIT (4)
AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") is made as of this
10th day of August, 2002 by and between Firsthand Technology Value Fund (the
"Acquiring Fund") and Firsthand Communications Fund (the "Acquired Fund"), each
of which is a series of Firsthand Funds, a Delaware business 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 "Reorganization"); and
WHEREAS, the parties intend that the 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 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.
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(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
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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) 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 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.
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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
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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.
(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 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
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
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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
(l) Since June 30, 2002, 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
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continue to qualify as a regulated investment company for its
current taxable year.
(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
Reorganizations. 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.
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(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 June 30, 2002, 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 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 October 17, 2002, 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,
8
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.
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 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 Xxxxxxxx & Xxxxxxxx
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
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the Acquired Fund to Xxxxxxxx & Xxxxxxxx LLP and dated as of the
Closing Date, substantially to the effect that the 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 Reorganization.
(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:
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(a) This Agreement and the 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 Xxxxxxxx & Xxxxxxxx
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 Xxxxxxxx & Xxxxxxxx
LLP, and dated as of the Closing Date, substantially to the
effect that, for federal income tax purposes, the 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 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.
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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 Reorganization to qualify, and will not
(whether before or after consummation of the Reorganization) take
any actions that could prevent the 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 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.
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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 Communications
Fund
By: /s/ Xxxxx Xxxxxx
----------------
Name: Xxxxx Xxxxxx
Title: President
FIRSTHAND FUNDS
On behalf of Firsthand Technology Value
Fund
By: /s/ Xxxxx Xxxxxx
----------------
Name: Xxxxx Xxxxxx
Title: President
13
