HandQ LIFE SCIENCES INVESTORS
INVESTMENT ADVISORY AGREEMENT
THIS INVESTMENT ADVISORY AGREEMENT, dated as of July 1, 2009 between
HandQ LIFE SCIENCES INVESTORS, a Massachusetts business trust (the
Fund), and XXXXXXXXX and XXXXX CAPITAL MANAGEMENT LLC, a Delaware
limited liability company (the Investment Adviser),
W I T N E S S E T H:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. Services To Be Rendered by the Investment Adviser to the Fund.
Subject to the supervision and direction of the Board of Trustees of
the Fund, the Investment Adviser will:
a. act in strict conformity with the Funds Declaration of Trust, the
Investment Company Act of 0000 (xxx 0000 Xxx) and the Investment
Advisers Act of 1940, as the same may from time to time be amended;
b. manage the portfolio in accordance with the Funds investment
objective and policies as stated in the Funds Prospectus;
c. make investment decisions for the Fund;
d. place purchase and sale orders for portfolio transactions for the
Fund;
e. supply the Fund with office facilities (which may be in the
Investment Advisers own offices), statistical and research data, data
processing services, clerical, internal executive and administrative
services, and stationery and office supplies;
f. supply or direct and supervise a third party administrator or
custodian in the provision to the Fund of accounting and bookkeeping
services, the calculation of the net asset value of shares of the Fund,
internal auditing services, and other clerical services in connection
therewith; and
g. prepare or supervise and direct a third party administrator or
custodian in the preparation of reports to shareholders of the Fund,
tax returns and reports to and filings with the Securities and Exchange
Commission (SEC) and state Blue Sky authorities.
In providing these services, the Investment Adviser will provide
investment research and supervision of the Funds investments and
conduct a continual program of investment, evaluation and, if
appropriate, sale and reinvestment of the Funds assets. In addition,
the Investment Adviser will furnish the Fund with whatever statistical
information the Fund may reasonably request with respect to the
securities that the Fund may hold or contemplate purchasing.
2. Brokerage.
In executing transactions for the Fund and selecting brokers or dealers
(which brokers or dealers may include any affiliate of the Investment
Adviser to the extent permitted by the 0000 Xxx) the Investment Adviser
will use its best efforts to obtain the best price and execution for
the Fund. In assessing the best price and execution available for any
portfolio transaction, the Investment Adviser will consider all factors
it deems relevant including, but not limited to, price (including any
applicable brokerage commission or dealer spread), size of order,
difficulty of execution, and operational facilities of the firm
involved and the firms risk in positioning a block of securities. In
selecting brokers or dealers to execute a particular transaction and in
evaluating the best price and execution available, the Investment
Adviser may consider the brokerage and research services (as those
terms are defined in Section 28(e) of the Securities Exchange Act of
1934 (the Exchange Act)) provided to the Fund and/or other accounts
over which the Investment Adviser exercises investment discretion. It
is understood that such services may be useful to the Investment
Adviser in connection with its services to other clients.
On occasions when the Investment Adviser deems the purchase or sale of
a security to be in the best interest of the Fund as well as other
clients, the Investment Adviser, to the extent permitted by applicable
laws and regulations, may, but shall be under no obligation to,
aggregate the securities to be sold or purchased in order to obtain the
most favorable price or lower brokerage commissions and efficient
execution. In such event, allocation of the securities so purchased or
sold, as well as the expenses incurred in the transaction, will be made
by the Investment Adviser in the manner it considers to be the most
equitable and consistent with its fiduciary obligations to the Fund and
to such other clients.
3. Other Agreements; Use of Name, Etc.
It is understood that any of the shareholders, Trustees, officers,
agents and employees of the Fund may be a shareholder, director,
officer, agent or employee of or be otherwise interested in the
Investment Adviser and in any affiliate thereof with the Investment
Adviser and that the Investment Adviser and any affiliate thereof with
the Investment Adviser may have an interest in the Fund. It is also
understood that the Investment Adviser and persons affiliated with the
Investment Adviser have and may have advisory, management, service or
other contracts with other organizations and persons, and may have
other interests and businesses and that the Fund shall have no interest
in the profits or opportunities derived from the same, that the
Investment Adviser may give advice and take action in the performance
of its duties with respect to such other clients that may differ from
advice given on the timing or nature of action taken with respect to
the Fund. Nothing in this Agreement shall be deemed to confer upon the
Investment Adviser any obligation to acquire for the account of the
Fund a position in any security that the Investment Adviser or any
affiliate thereof may acquire for its own account or for the account of
any other client, if in the sole and absolute discretion of the
Investment Adviser it is not for any reason practical or desirable to
acquire a position in such security for the Funds account.
The Investment Adviser shall authorize and permit any of its officers,
directors and employees who may be elected as Trustees or officers of
the Fund to serve in the capacities in which they are elected.
Services to be furnished by the Investment Adviser under this Agreement
may be furnished through the medium of any of such officers, directors
or employees.
The Fund acknowledges that the Investment Advisers use of the term
HandQ is pursuant to a written license agreement (the License
Agreement), a copy of which the Investment Adviser has provided to the
Fund. The Fund further acknowledges that under the License Agreement
the Investment Adviser may sublicense the term HandQ to a fund for
which it serves as investment adviser, for use as part of the funds
name, pursuant to a written sublicense agreement that (a) is at least
as protective of the rights of the licensor under the License Agreement
as the License Agreement and (b) does not permit the fund to sub-
sublicense the term HandQ. The Fund agrees that its right to use the
term HandQ is subject in all respects to the terms of the License
Agreement. The Fund further agrees that if the License Agreement
terminates for any reason, or if the Investment Adviser ceases to act
as investment adviser to the Fund, the Funds sublicense to use the term
HandQ as part of its name will terminate, at which time the Fund will
take all necessary action to change its name to a name not including
such term.
4. Compensation.
The Fund will pay to the Investment Adviser as compensation for the
Investment Advisers services rendered a fee, computed monthly, equal
when annualized to (1) 2.5% of the average net assets for such month of
its venture capital and other restricted securities constituting up to
25% of net assets and (2) the percentage that corresponds to the fee
table below of the average net assets for such month of all other
assets (Other Assets); provided that in no event shall such monthly fee
when annualized exceed 1.36% of the average net assets of the Fund for
such month.
Annualized
Value of Other Assets Fee Rate
$250,000,000 or less 0.98%
$250,000,001 to $500,000,000 0.88%
$500,000,001 to $1,000,000,000 0.80%
In excess of $1,000,000,000 0.7%
For purposes of this section, average net assets for any month shall be
equal to the average of the net asset value of the appropriate assets
at the last business day of such month and the net asset value of the
appropriate assets at the last business day of the prior month. In
determining average net assets for purposes of clauses (1) and (2)
above, liabilities and expenses of the Fund shall be allocated pro rata
based on the ratio that the assets referred to in each clause bear to
the total assets of the Fund. Such fee shall be payable for each month
within five business days after the end of such month.
For purposes of this Section 4, venture capital and other restricted
securities shall be securities of issuers for which no market
quotations are readily available and securities of companies for which
market quotations are readily available but which are subject to legal
or contractual restrictions on resale. Securities of companies for
which public information is available but as to sale of which the safe
harbor provided by Rule 144(k) is not available shall be considered to
be subject to legal or contractual restrictions on resale.
In the event that expenses of the Fund for any fiscal year should
exceed the expense limitation on investment company expenses imposed by
any statute or regulatory authority of any jurisdiction in which shares
of the Fund are qualified for offer and sale, the compensation due the
Investment Adviser for such fiscal year shall be reduced by the amount
of such excess by a reduction or refund thereof. In the event that the
expenses of the Fund exceed any expense limitation which the Investment
Adviser may, by written notice to the Fund, voluntarily declare to be
effective subject to such terms and conditions as the Investment
Adviser may prescribe in such notice, the compensation due the
Investment Adviser shall be reduced and if necessary the Investment
Adviser shall assume expenses of the Fund, to the extent required by
such expense limitation. In no event shall the provisions of this
Section 4 require the Investment Adviser to reduce its fee if not so
required by an applicable statute or regulatory authority.
If the Investment Adviser shall serve for less than the whole of a
month, the foregoing compensation shall be pro rated.
5. Expenses.
The Investment Adviser will bear all expenses in connection with the
performance of its services under this Agreement, including
compensation of and office space for officers and employees of the Fund
connected with investment and economic research, trading and investment
management of the Fund, as well as the fees of all Trustees of the Fund
who are affiliated persons of the Investment Adviser, as that term is
defined in the 1940 Act, or any of its affiliated persons.
The Fund shall pay (or, in the event that such expenses are paid by the
Investment Adviser, shall reimburse the Investment Adviser for) all
other expenses incurred in the organization and operation of the Fund
including, among other things, expenses for legal and auditing
services, costs of printing proxy statements, prospectuses, stock
certificates and shareholder reports, charges of the custodian, any
sub-custodian and transfer agent, expenses in connection with the
Dividend Reinvestment and Cash Purchase Plan, SEC and National
Association of Securities Dealers, Inc. fees, fees and expenses of the
Trustees who are not affiliated persons of the Investment Adviser or
any of its affiliated persons, accounting and valuation costs,
administrators fees, membership fees in trade associations, fidelity
bond coverage for the Funds officers and employees, errors and
omissions insurance coverage for Trustees and officers, interest,
brokerage costs, taxes, stock exchange listing fees and expenses,
expenses of qualifying the Funds shares for sale in various states,
expenses associated with personnel performing exclusively shareholder
servicing functions, certain other organization expenses, litigation
and other extraordinary or non-recurring expenses, and other expenses
properly payable by the Fund.
6. Assignment Terminates This Agreement; Amendments of This
Agreement.
This Agreement shall automatically terminate, without the payment of
any penalty in the event of its assignment, and this Agreement shall
not be amended unless such amendment is approved at a meeting by the
affirmative vote of a majority of the outstanding shares of the Fund,
and by vote cast in person at a meeting called for the purpose of
voting on such approval, of a majority of the Trustees of the Fund who
are not interested persons of the Fund or of the Investment Adviser.
7. Effective Period and Termination of This Agreement.
This Agreement shall become effective upon its execution, and shall
remain in full force and effect continuously thereafter (unless
terminated automatically as set forth in Section 6) until terminated as
follows:
a. Either party hereto may at any time terminate this Agreement by
not less than thirty (30) days nor more than sixty (60) days written
notice delivered or mailed by registered mail, postage prepaid, to the
other party;
b. If (i) the Trustees of the Fund or the shareholders by the
affirmative vote of a majority of the outstanding shares of the Fund
and (ii) a majority of the Trustees of the Fund who are not interested
persons of the Fund or of the Investment Adviser, by vote cast in
person at a meeting called for the purpose of voting on such approval,
do not specifically approve at least annually the continuance of this
Agreement, then this Agreement shall automatically terminate at the
close of business on June 30, 2010 or the expiration of one year from
the effective date of the last such continuance, whichever is later; or
Action by the Fund under (a) above may be taken either by (i) vote of a
majority of its Trustees, or (ii) by the affirmative vote of a majority
of the outstanding shares of the Fund.
Termination of this Agreement pursuant to this Section 7 shall be
without the payment of any penalty.
8. Certain Definitions.
For the purposes of this Agreement, the affirmative vote of a majority
of outstanding shares of the Fund means the affirmative vote, at a duly
called and held meeting of shareholders of the Fund, (a) of the holders
of 67% or more of the shares of the Fund present (in person or by
proxy) and entitled to vote at such meeting, if the holders of more
than 50% of the outstanding shares of the Fund entitled to vote at such
meeting are present in person or by proxy, or (b) of the holders of
more than 50% of the outstanding shares of the Fund entitled to vote at
such meeting, whichever is less.
For the purposes of this Agreement, the terms affiliated person,
control, interested person and assignment shall have their respective
meanings as defined in the 1940 Act and the Rules and Regulations
thereunder, subject, however to such exemptions as may be granted by
the SEC under said Act; the term specifically approve at least annually
shall be construed in a manner consistent with the 1940 Act and the
Rules and Regulations thereunder; and the term brokerage and research
services shall have the meaning given in the Exchange Act and the Rules
and Regulations thereunder.
9. Non-liability of the Investment Adviser.
The Investment Adviser shall not be held responsible for any loss
incurred by any act or omission of any broker. The Investment Adviser
also shall not be liable to the Fund or to any shareholder of the Fund
for any error or judgment or for any loss suffered by the Fund in
connection with rendering services hereunder except (a) a loss
resulting from a breach of fiduciary duty with respect to the receipt
of compensation for services (in which case any award of damages shall
be limited to the period and the amount set forth in Section 36(b)(3)
of the 0000 Xxx) or (b) a loss resulting from willful misfeasance, bad
faith or gross negligence on the part of the Investment Adviser, or
reckless disregard of its obligations and duties hereunder. Subject to
the foregoing, the Fund also shall indemnify the Investment Adviser,
and any officer, director and employee thereof to the maximum extent
permitted by Article V of the Funds Declaration of Trust.
10. Limitation of Liability of the Trustees and Shareholders.
A copy of the Declaration of Trust of the Fund is on file with the
Secretary of the Commonwealth of Massachusetts, and notice is hereby
given that this instrument is executed on behalf of the Trustees of the
Fund as Trustees and not individually and that the obligations of this
instrument are not binding upon any of the Trustees or shareholders
individually but are binding only upon the assets and property of the
Fund.
11. Furnishing of Materials.
During the term of this Agreement, the Fund agrees to furnish the
Investment Adviser at its principal executive office all prospectuses,
proxy statements, report to shareholders, sales literature, or other
material prepared for distribution to shareholders of the Fund or the
public, which refer to the Investment Adviser in any way, prior to use
thereof and not to use such material if the Investment Adviser
reasonably objects in writing within five business days (or such other
time as may be mutually agreed) after receipt thereof. In the event of
termination of this Agreement, the Fund will continue to furnish to the
Investment Adviser copies of any of the above-mentioned materials which
refer in any way to the Investment Adviser. The Fund shall furnish or
otherwise make available to the Investment Adviser such other
information relating to the business affairs of the Fund as the
Investment Adviser at any time, or from time to time, reasonably
requests in order to discharge its obligations hereunder.
12. Governing Law.
This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, HandQ Life Sciences Investors and the Investment
Adviser have each caused this instrument to be signed in duplicate on
its behalf by its President or other officer thereunto duly authorized,
all as of the date first hereinabove written.
HandQ LIFE SCIENCES INVESTORS
By: /s/ Xxxxxx X. Xxxxxxx
Title: President, HandQ Life Sciences Investors
XXXXXXXXX and XXXXX CAPITAL MANAGEMENT LLC
By: /s/ Xxxxxx X. Xxxxxxx
Title: President, Xxxxxxxxx and Xxxxx Capital Management LLC
