EXHIBIT INDEX
EXHIBIT A:
Attachment to item 77O:
Transactions effected pursuant to Rule 10f-3
EXHIBIT B:
Attachment to item 77Q1:
1) Investment advisory and administration agreement
2) Investment sub-advisory agreement
- - - - - - - - - - - - - - - - - - - - - - - - - - - - -
EXHIBIT A:
RULE 10F-3 CHECK LIST
*INFORMATION WILL BE DISPLAYED IN THE FOLLOWING FORMAT:
DATE
COMPANY
UNDERWRITER
IPO / SECONDARY
SHARES
PRICE
COMMISSION
COMMISSION %
ALLOCATION % LIMIT?
H&Q BENEFICIAL HOLDING?
10/28/99
Triton PCS
Morgan Stanley
IPO
10,000
18.000
1.260
7.0%
no
no
10/29/99
Akamai Technologies
Morgan Stanley
IPO
5,000
26.000
1.820
7.0%
no
no
11/04/99
Cobalt
Goldman Sachs
IPO
2,000
22.000
1.540
7.0%
no
no
11/10/99
ASD Systems
Bear Stearns
IPO
40,000
8.000
0.560
7.0%
no
no
11/10/99
SonicWall
Bear Stearns
IPO
10,000
14.000
0.980
7.0%
no
no
11/17/99
Metasolv Software
Morgan Stanley
IPO
2,000
19.000
1.330
7.0%
no
no
11/17/99
Agilent Technology
Morgan Stanley
IPO
2,000
30.000
1.275
4.3%
no
no
11/17/99
Young & Rubicam
Bear Stearns
Sec
10,000
48.125
1.560
3.2%
no
no
11/18/99
Cacheflo Inc.
Morgan Stanley
IPO
2,000
24.000
1.680
7.0%
no
no
12/01/99
McAfee
Morgan Stanley
IPO
2,000
12.000
0.840
7.0%
no
no
12/08/99
Agency.com Inc
Goldman Sachs
IPO
1,500
26.000
1.820
7.0%
no
no
12/15/99
eCollege.com
Banc of America
IPO
60,000
11.00
0.770
7.0%
no
no
12/16/99
Maxygen
Goldman Sachs
IPO
500
16.00
1.120
7.0%
no
no
01/27/00
Extensity
Deutche Bank
IPO
500
20.00
1.400
7.00
no
no
01/28/00
Caminez
Deutche Bank
IPO
1,000
16.00
1.120
7.00
no
no
02/03/00
Centra Software
Robertson Stephens
IPO
10,000
14.00
0.980
7.00
no
no
02/11/00
Digex
Bear Stearns
Sec
10,000
90.000
4.050
4.50
no
no
02/11/00
Web Methods
Friedman Billings & Ramsey
IPO
100
35.000
2.450
7.00
no
no
02/11/00
Web Methods
Morgan Stanley
IPO
1,000
35.000
2.450
7.00
no
no
02/14/00
Diversa
Bear Stearns
IPO
10,000
24.000
1.000
4.17
no
no
02/15/00
Broadbase Software
Goldman Sachs
Sec
10,000
95.000
4.750
5.00
no
no
02/15/00
Savvis Communications
Morgan Stanley
IPO
1,000
24.000
1.440
6.00
no
no
02/25/00
Hotel Reservations
Donaldson Lufkin Jenrette
IPO
15,000
16.000
1.120
7.00
no
no
03/01/00
American Superconductor
Banc of America
Sec
2,500
62.500
2.160
3.46
no
no
03/01/00
Palm
Goldman Sachs
IPO
2,000
38.000
1.995
5.25
no
no
03/09/00
OraPharma, Inc
Robertson Stephens
IPO
20,000
18.000
1.260
7.00
no
no
03/14/00
FairMarket
Deutche Bank
IPO
1,000
17.000
0.710
4.18
no
no
03/17/00
Integrated Silicon Solutions
Robertson Stephens
IPO
50,000
15.000
1.050
7.00
no
no
UNDERWRITING
*INFORMATION WILL BE DISPLAYED IN THE FOLLOWING FORMAT:
TRADE DATE
ISSUER
LEAD/CO-MGR
UNDERWRITER
OFF PRICE
SHARES OFFERED (MM)
TOTAL AMT OFFERED (MM)
IPO (Y/N)
10/27/99
Triton PCS Holdings, Inc.
MS, LEHMAN, SSB, FUSEC, JPMORG
Abn Amro Incorporated, Bear, Stearns & Co., CIBC World
Markets, Credit Lyonnais Securities, Chase H&Q, Hoak
Breedlove Wesneski & Co., Janney Montgomery Scott LLC,
Edward D. Jones & Co., L.P., Merrill Lynch & Co., Scott &
Stringfellow, Inc., Wit SoundView
18
10
180
Y
10/28/99
Akamai Technologies, Inc.
MS, DLJ, SSB, WEISEL
Adams, Harkness & Hill Inc., Credit Suisse First Boston,
Dain Rauscher Wessels, First Union Securities, Inc., Chase
H&Q, Edward D. Jones & Co., L.P., Charles Schwab & Co.,
Inc., Wit SoundView
26
9
234
Y
10/28/99
Allied Riser Communications
GS, ML, DLJ, WEISEL
Banc of America Securities, Bear, Stearns & Co., Deutsche
Banc Alex. Brown, Chase H&Q, Edward D. Jones & Co., L.P.,
J.C. Bradford & Co., Dain Rauscher Wessels, Doley
Securities, Inc., Stephens Inc., Stifel, Nicolaus &
Company, WIT Capital Corporation
18
15.75
283.5
Y
11/04/99
Cobalt Networks, Inc.
GS, ML, RS, SOUNDV
A.G. Edwards & Sons, Inc., Bear, Stearns & Co., Edward D.
Jones & Co., L.P., First Union Securities, Inc., Chase H&Q,
Wasserstein Perella Securities, Inc., Dain Rauscher
Wessels, Nesbitt Burns Securities Inc., Raymond James &
Associates, Inc., Stifel, Nic
22
5
110
Y
11/10/99
ASD Systems, Inc.
BEAR, PS, FRDMAN, EOFF
Banc of America Securities, Donaldson, Lufkin & Jenrette,
Chase H&Q, Lehman Brothers, Wit SoundView, Axiom Partners
Inc., Joseph Charles & Associates, First Southwest Company,
Gaines, Berland Inc., Harris Webb & Garrison, Hoak
Breedlove Wesneski & Co., Jo
8
5
40
Y
11/10/99
SonicWALL, Inc.
BEAR, HQ, WEISEL
Banc of America Securities, Robertson Stephens, CIBC World
Markets, Credit Suisse First Boston, A.G. Edwards & Sons,
Inc., SG Cowen Securities Corporation, Wit SoundView,
Cantor, Weiss & Friedner, Inc., FAC/Equities, Gerard Klauer
Mattison & Co.,Inc., Jef
14.00
4
56.00
Y
11/17/99
Agilent Technologies, Inc.
MS, GS, CSFB, ML, SSB, BEAR, JPMORG, LEHMAN, COWEN
Abn Amro Incorporated, Robertson Stephens, The Buckingham
Research Group Incorporated, Deutsche Banc Alex. Brown,
Chase H&Q, Williams Capital Group, L.P. (The)
30
72
2,160.00
Y
11/17/99
MetaSolv Software
MS, RS, JEFFER
Dain Rauscher Wessels, Donaldson, Lufkin & Jenrette, First
Union Securities, Inc., Chase H&Q, Edward D. Jones & Co.,
L.P., Wit SoundView
19
5
95
Y
11/18/99
CacheFlow Inc
MS, CSFB, DAIN
Robertson Stephens, William Blair & Company, Chase H&Q,
Edward D. Jones & Co., L.P., Brad Peery Inc., Salomon Smith
Barney Inc., SG Cowen Securities Corporation, Volpe Brown
Whelan & Company, LLC, Warburg Dillon Read, Thomas Weisel
Partners L.L.C.
24
5
120
Y
12/01/99
McAfee.com
MS, HQ, RS
Dain Rauscher Wessels, First Union Securities, Inc., Edward
D. Jones & Co., L.P., Needham & Company, Inc., Brad Peery
Inc., SG Cowen Securities Corporation, Thomas Weisel
Partners L.L.C.
12.00
6.25
75.00
Y
12/08/99
Agency.com
GS, SSB, HQ
Edward D. Jones & Co., L.P., Prudential Securities, SG
Cowen Securities Corporation, Robert W. Baird & Co.
Incorporated, Chapman Co., Dain Rauscher Wessels, Freidman,
Billings, Ramsey, Legg Mason Wood Walker Incorporated,
McDonald Investments, Inc., Sands
26.00
5.9
153.40
Y
12/14/99
Ecollege.com
MONTG, BLAIR, PS
Bear, Stearns & Co., Donaldson, Lufkin & Jenrette, Chase
H&Q, Barrington Research Associates, Inc., Cruttenden Roth
Incorporated, Hanifen, Imhoff Inc., John G. Kinnard and
Company, Incorporated, McDonald Investments, Inc., Pacific
Crest Securities Inc, Sa
11
5
55
Y
12/15/99
Maxygen Inc
GS, RS, INVEMD
Dain Rauscher Wessels, First Security/Van Kasper & Company,
Chase H&Q, Edward D. Jones & Co., L.P., Merrill Lynch &
Co., Pacific Growth Equities, Prudential Securities, Punk,
Ziegel & Co., Salomon Smith Barney Inc., Warburg Dillon
Read, WIT Capital Corpor
16
6
96
Y
12/15/99
Z-Tel Technologies Inc
WEISEL, CSFB, JCBRAD, STEPHE
Bear, Stearns & Co., Deutsche Banc Alex. Brown, First Union
Securities, Inc., Chase H&Q, Merrill Lynch & Co., Salomon
Smith Barney Inc., Dain Rauscher Wessels, Gerard Klauer
Mattison & Co.,Inc., Legg Mason Wood Walker Incorporated,
U.S. Bancorp Piper Jaff
17
6
102
Y
01/27/00
Extensity Inc
ALEX, BEAR, HQ
Banc of America Securities, Donaldson, Lufkin & Jenrette,
Robertson Stephens, Goldman, Sachs & Co., Prudential
Securities, Wit SoundView, Adams, Harkness & Hill Inc.,
FAC/Equities, Josephthal & Company Inc., Legg Mason Wood
Walker Incorporated, Edgar M. N
20.00
4
80.00
Y
01/28/00
Caminus Corp
ALEX, BEAR, OPP
Banc of America Securities, Chase H&Q, Donaldson, Lufkin &
Jenrette, Robertson Stephens, Morgan Stanley Dean Witter,
Salomon Smith Barney Inc., SG Cowen Securities Corporation,
Wit SoundView, Adams, Harkness & Hill Inc., Jefferies &
Company, Inc., Josepht
16
4.372
69.952
Y
02/03/00
Centra Software Inc
RS, HQ, DAIN
Adams, Harkness & Hill Inc., E*OFFERING, Fidelity Capital
Markets Company, Freidman, Billings, Ramsey, Suntrust
Equitable Securities, Tucker Anthony Cleary Gull, H.C.
Wainwright Co., Inc.
14.00
5
70.00
Y
02/10/00
webMethods Inc
MS, ML, DAIN, FRDMAN
Chase H&Q, First Union Securities, Inc., Edward D. Jones &
Co., L.P., Legg Mason Wood Walker Incorporated, McDonald
Investments, Inc., Wit SoundView
35
4.1
143.5
Y
02/11/00
Digex Incorporated (New)
BEAR, SSB, CSFB, DLJ, MS, LEGG, PW
Banc of America Securities, Chase H&Q, CIBC World Markets,
Deutsche Banc Alex. Brown, First Union Securities, Inc.,
Robertson Stephens, Lehman Brothers, Merrill Lynch & Co.,
J.P. Morgan Securities, Wasserstein Perella Securities,
Inc., Thomas Weisel Partn
90
11
990
N
02/14/00
Diversa Corp
BEAR, HQ, ALEX
Donaldson, Lufkin & Jenrette, ING Barings, Merrill Lynch &
Co., Morgan Stanley Dean Witter, Robertson Stephens,
Salomon Smith Barney Inc., SG Cowen Securities Corporation,
Warburg Dillon Read, Aegis Capital Corp., Dain Rauscher
Wessels, Gerard Klauer Matt
24.00
7.25
174.00
Y
02/14/00
Savvis Communications Corp.
ML, MS, BEAR, MONTG, OPP
Chase H&Q, Donaldson, Lufkin & Jenrette, ING Barings,
Edward D. Jones & Co., L.P., Lazard Freres & Co. LLC,
Wasserstein Perella Securities, Inc., Robert W. Baird & Co.
Incorporated, Ferris, Baker Watts Incorporated, Janney
Montgomery Scott LLC, Josephthal
24
17
408
Y
02/15/00
Broadbase Software, Inc.
GS, ALEX, DAIN, WEISEL
Robertson Stephens, Chase H&Q, Merrill Lynch & Co.,
Prudential Securities, The Seidler Companies, Sutro & Co.
Incorporated, Tucker Anthony Cleary Gull, U.S. Bancorp
Piper Jaffray Inc., Wit SoundView
95
3
285
N
02/25/00
Hotel Reservations Network Inc
DLJ, ALLEN, BEAR, WEISEL, DLJDIR
Chase H&Q, Credit Suisse First Boston, A.G. Edwards & Sons,
Inc., Goldman, Sachs & Co., ING Barings, Lazard Freres &
Co. LLC, Merrill Lynch & Co., PaineWebber Incorporated,
Prudential Securities, Salomon Smith Barney Inc., SG Cowen
Securities Corporation,
16
5.4
86.4
Y
02/29/00
American Superconductor Corp.
MONTG, OPP, RS
Chase H&Q, Merrill Lynch & Co., Morgan Stanley Dean Witter,
Adams, Harkness & Hill Inc., FAC/Equities, H.C. Wainwright
Co., Inc., Josephthal & Company Inc.
62.5
3.5
218.75
N
EXCEPTIONS
*INFORMATION WILL BE DISPLAYED IN THE FOLLOWING FORMAT:
DATE
COMPANY
UNDERWRITER
IPO / SECONDARY
SHARES
PRICE
COMMISSION
COMMISSION %
ALLOCATION % LIMIT?
H&Q BENEFICIAL HOLDING?
10/28/99
Triton PCS
Morgan Stanley
IPO
10,000
18.000
1.260
7.0%
no
no
12/15/99
Z Tel Technology
Thomas Weisel
IPO
5,000
17.000
1.190
7.0%
no
no
10/29/99
Allied Riser
Goldman Sachs
IPO
3,000
18.000
1.080
6.0%
no
no
03/17/00
Netpliance
Donaldson Lufkin Jenrette
IPO
5,000
18.000
1.260
7.00
no
EXHIBIT B:
INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENT
AGREEMENT made as of December 8, 1999 between
HAMBRECHT & QUIST FUND TRUST, a Delaware business trust
(herein called the "Trust"), and HAMBRECHT & QUIST FUND
MANAGEMENT, LLC, a California limited liability company and
registered investment adviser ("HQFM").
WHEREAS, the Trust is registered as an open-end,
management investment company under the Investment Company
Act of 1940, as amended (1940 Act"); and
WHEREAS, the Trust desires to retain HQFM to furnish
investment advisory and administrative services to the H&Q
IPO & Emerging Company Fund, a series of the Trust (the
"Fund");
NOW, THEREFORE, in consideration of the premises and
mutual covenants herein contained, it is agreed between the
parties hereto as follows:
1. Appointment. The Trust hereby appoints HQFM to
act as investment adviser and administrator to the Fund for
the period and on the terms set forth in this Agreement.
HQFM accepts such appointment and agrees to furnish the
services herein set forth for the compensation herein
provided.
2. Delivery of Documents. The Trust has furnished
HQFM with copies properly certified or authenticated of each
of the following:
(a) the Trust's Agreement and Declaration of
Trust, as filed with the Secretary of State of the State of
Delaware on June 7, 1999, and all amendments thereto or
restatements thereof (such Agreement and Declaration of
Trust, as presently in effect and as it shall from time to
time be amended or restated, herein called the "Declaration
of Trust");
(b) the Trust's By-Laws and amendments thereto
(the "By-Laws");
(c) resolutions of the Trust's Trustees (the
"Trustees") authorizing the appointment of HQFM and
approving this Agreement;
(d) the Trust's Notification of Registration on
Form N-8A under the 1940 Act, as filed with the Securities
and Exchange Commission ("SEC") on June 11, 1999, and all
amendments thereto;
(e) the Trust's Registration Statement on Form
N-1A under the Securities Act of 1933, as amended ("1933
Act") (File No. 333-80473), and under the 1940 Act (File
No. 811-09383), as filed with the SEC on June 11, 1999, and
all amendments thereto insofar as such Registration
Statement and amendments relate to the Fund; and
(f) the Trust's most recent prospectuses and
statement of additional information for the Fund (such
prospectuses and statement of additional information, as
presently in effect, and all amendments and supplements
thereto, herein collectively called the "Prospectus").
The Trust will furnish HQFM from time to time with
copies of all amendments of or supplements to the foregoing.
3. Services. Subject to the supervision of the
Trustees, HQFM will monitor or perform for the Fund all
aspects of the operations of the Fund, except for those
performed by the distributor for the Fund. More
particularly, HQFM will furnish an investment program in
respect of the Fund, determine what securities and other
investments will be purchased, retained or sold by the Fund
and place orders for the purchase and sale of these
investments; maintain office facilities for the Fund;
furnish statistical and research data, clerical services and
stationery and office supplies; help prepare filings and
reports for the Fund; and generally assist the Fund's other
service providers in all aspects of the administration of
the Fund.
Subject to the provisions of the Declaration of
Trust and the 1940 Act, HQFM, at its expense, may select and
contract with one or more investment sub-advisers (the
"Sub-Advisers") for the Fund. HQFM may also delegate or
subcontract some or all of HQFM's other duties under this
Agreement.
HQFM further agrees that it:
(a) will monitor the Fund's investments and will
comply with the provisions of the Declaration of Trust, the
By-Laws and the Fund's stated investment objectives,
policies and restrictions, as they may be amended from time
to time;
(b) will comply with all applicable federal and
state statutes, rules and regulations pertaining to its
services under this Agreement;
(c) will place orders pursuant to its investment
determinations for the Fund either directly with the issuer
or with an underwriter, market maker, or broker or dealer.
In placing orders with brokers and dealers, HQFM will
attempt to obtain prompt execution of orders in an effective
manner at the most favorable price. Consistent with this
obligation, when the execution and price offered by two or
more brokers are comparable, HQFM may, in its discretion,
purchase or sell portfolio securities through brokers who
provide HQFM with research advice and other services. In no
instance will portfolio securities be purchased or sold
through, from or to HQFM or any Sub-Adviser, or any
affiliated person of the Trust, HQFM, or any Sub-Adviser,
except as may be permitted under the 1940 Act;
(d) will treat confidentially and as proprietary
information of the Trust all records and other information
relative to the Trust, and will not use such records and
information for any purpose other than performance of its
responsibilities and duties hereunder, except after prior
notification to and approval in writing by the Trust, which
approval shall not be unreasonably withheld and may not be
withheld where HQFM (i) may be exposed to civil or criminal
contempt proceedings for failure to comply, (ii) is
requested to divulge such information by duly constituted
authorities or (iii) is so requested by the Trust;
(e) will not make loans to any person to
purchase or carry units of beneficial interest in the Trust
or make loans to the Trust;
(f) will direct its personnel, when making
investment recommendations for the Trust, not to inquire or
take into consideration whether the issuers of securities
proposed for purchase or sale for the Trust's accounts are
customers of HQFM, any Sub-Adviser or their affiliates. In
dealing with such customers, HQFM and its affiliates will
not inquire or take into consideration whether securities of
those customers are held by the Trust;
(g) will provide regular written reports to the
Trustees (including, without limitation, reports on the
general investment strategy of the Fund, the performance of
the Fund in relation to standard industry indices and
general conditions affecting the equity markets), will make
appropriate persons available for the purpose of reviewing
such reports with the Trustees on a regular basis at
reasonable times, and will provide various other written and
oral reports from time to time as requested by the Trustees;
and
(h) will vote proxies received by it in
connection with securities held by the Fund consistent with
its fiduciary duties hereunder.
4. Books and Records. HQFM hereby agrees to
maintain and preserve all accounts, books and records
required under the 1940 Act and the Investment Advisers Act
of 1940 and rules thereunder with respect to HQFM's duties
hereunder. HQFM understands and agrees that all records it
maintains for the Trust are the property of the Trust and
further agrees to surrender promptly to the Trust any of
such records upon the Trust's request.
5. Expenses. During the term of this Agreement,
HQFM will pay all expenses incurred by it in connection with
its activities under this Agreement, including, without
limitation, all compensation of any Sub-Adviser and any
person employed by or associated with HQFM to assist in the
performance of HQFM's obligations under this Agreement,
whether or not such person is also an officer or employee of
the Trust. Other expenses incurred in the operation of the
Fund, including, without limitation, taxes, interest,
brokerage fees and commissions, fees of Trustees who are not
officers, directors, shareholders, members or employees of
HQFM or any Sub-Adviser or any affiliate thereof, SEC and
state "blue sky" fees, costs of pricing portfolio
securities, fees of the Fund's investment adviser,
distributor, administrator, accounting agent, transfer and
dividend disbursing agent, custodian and other service
providers, insurance premiums, outside auditing and legal
expenses, costs of maintaining the Trust's existence as a
Delaware business trust, typesetting and printing
prospectuses for regulatory purposes and for distribution to
current shareholders of the Fund, costs of shareholders' and
Trustees' reports and meetings and any extraordinary
expenses, will be borne by the Fund.
6. Compensation. For the services provided and the
expenses assumed pursuant to this Agreement, the Trust will
pay HQFM, and HQFM will accept as full compensation
therefor, an advisory fee, accrued daily and payable monthly
in arrears, of sixty-five one hundredths of one percent
(0.65%) of the Fund's average daily net assets. From time
to time, HQFM may agree to waive or reduce some or all of
the compensation to which it is entitled under this
Agreement. Through December 31, 2000, HQFM will waive its
advisory fee and reimburse expenses so that the total annual
operating expenses of the Class A shares of the Fund will
not exceed 1.60%, the total annual operating expenses of the
Class B shares of the Fund will not exceed 2.30% and the
total annual operating expense of the Common Class shares of
the Fund will not exceed 1.60%, of such class's average
daily net assets.
7. Services to Others. The Trust understands that
HQFM may in the future act as an investment adviser, sub-
investment adviser, and/or administrator to other accounts,
including other investment companies. The Trust has no
objection to HQFM's acting in such capacities, provided that
whenever the Fund and one or more other investment accounts
advised by HQFM have available funds for investment,
investments suitable and appropriate for each will be
allocated in a manner believed by HQFM to be equitable to
each account. The Trust recognizes that in some cases this
procedure may adversely affect the size of the position that
the Fund may obtain in a particular security. In addition,
the Trust understands that the persons employed by HQFM to
assist in HQFM's duties under this Agreement will not devote
their full time to such service and nothing contained in
this Agreement will be deemed to limit or restrict the right
of HQFM or any of its affiliates to engage in and devote
time and attention to other businesses or to render services
of whatever kind or nature.
8. Year 2000 Compliance. HQFM, or its affiliates
on behalf of HQFM, have (i) initiated a review and
assessment of all areas within HQFM's business and
operations (including those affected by its suppliers and
vendors) that could be adversely affected by the "Year 2000
Problem" (that is, the risk that computer applications used
by HQFM (or its suppliers, vendors and customers) may be
unable to recognize and perform properly date-sensitive
functions involving certain dates prior to and any date
after December 31, 1999), (ii) developed a plan and timeline
for addressing the Year 2000 Problem on a timely basis, and
(iii) to date, implemented that plan substantially in
accordance with that timetable. Based on the foregoing,
HQFM believes that all computer applications (including
those of its suppliers and vendors) that are material to its
business and operations applicable to this Agreement will on
a timely basis be able to perform properly date-sensitive
functions for all dates before and after January 1, 2000
(that is, be "Year 2000 compliant"). HQFM shall obtain a
similar representation from any investment sub-adviser or
service provider to whom it delegates any duties under this
Agreement.
9. Limitation of Liability. HQFM will not be
liable for any error of judgment or mistake of law or for
any loss suffered by the Trust in connection with the
performance of this Agreement, except a loss resulting from
a breach of fiduciary duty with respect to the receipt of
compensation for services or a loss resulting from willful
misfeasance, bad faith or gross negligence on the part of
HQFM in the performance of its duties or from reckless
disregard by it of its obligations and duties under this
Agreement. Notwithstanding the foregoing, the Trust does
not waive any right it may have at common law or under the
federal or state securities laws.
10. Duration and Termination. This Agreement will
become effective as of the date first set forth above.
This Agreement will remain in effect for two years
and thereafter continue for successive one year periods,
provided such continuance is specifically approved at least
annually (a) by the vote of a majority of those Trustees who
are not parties to this Agreement or interested persons of
such parties, cast in person at a meeting called for the
purpose of voting on such approval, and (b) by the vote of
the Trustees or by the vote of a majority of the outstanding
voting securities of the Fund. Notwithstanding the
foregoing, this Agreement may be terminated at any time,
without the payment of any penalty, on sixty days' written
notice by the Trust (by vote of the Trustees or by vote of a
majority of the outstanding voting securities of the Fund)
or by HQFM. This Agreement will immediately terminate in
the event of its assignment. (As used in this Agreement,
the terms "majority of the outstanding voting securities,"
"interested persons" and "assignment" shall have the same
meaning as such terms in the 1940 Act.)
11. Amendment of this Agreement. No provision of
this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change,
waiver, discharge or termination is sought.
12. Miscellaneous. The captions in this Agreement
are included for convenience of reference only and in no way
define or delimit any of the provisions hereof or otherwise
affect their construction or effect. If any provision of
this Agreement is held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby. This Agreement shall be
binding upon and shall inure to the benefit of the parties
hereto and their respective successors and shall be governed
by the laws of the State of California.
The names "Hambrecht & Quist Fund Trust" and
"Trustees of Hambrecht & Quist Fund Trust" refer
respectively to the Trust created and the Trustees, as
trustees but not individually or personally, acting from
time to time under the Declaration of Trust, to which
reference is hereby made. The obligations of the Trust
entered into in the name or on behalf thereof by any of its
Trustees, officers, representatives or agents are made not
individually, but in such capacities, and are not binding
upon any of the Trustees, officers, representatives, agents
or shareholders of the Trust personally, but bind only the
assets of the Trust, and all persons dealing with any series
of shares of the Trust must look solely to the assets of the
Trust belonging to such series for the enforcement of any
claims against the Trust.
IN WITNESS WHEREOF, the parties hereto have caused
this instrument to be executed by their officers designated
below as of the day and year first above written.
HAMBRECHT & QUIST FUND TRUST
By:______________________________
Name: David R. Krimm
Title: President
HAMBRECHT & QUIST FUND
MANAGEMENT, LLC
By:______________________________
Name: David R. Krimm
Title: President
INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT made as of December 8, 1999 between
HAMBRECHT & QUIST FUND MANAGEMENT, LLC, a California limited
liability company and registered investment adviser
("HQFM"), and SYMPHONY ASSET MANAGEMENT, LLC, a California
limited liability company and registered investment adviser
("Symphony").
WHEREAS, HQFM is the investment adviser for
Hambrecht & Quist Fund Trust (the "Trust"), an open-end
management investment company registered under the
Investment Company Act of 1940, as amended, (the "1940
Act"); and
WHEREAS, HQFM desires to retain Symphony as HQFM's
agent to furnish investment sub-advisory services to the H&Q
IPO & Emerging Company Fund, a series of the Trust (the
"Fund");
NOW, THEREFORE, in consideration of the premises and
mutual covenants herein contained, the parties hereto agree
as follows:
1. Appointment. HQFM hereby appoints Symphony to
provide investment sub-advisory services to the Fund for the
period and on the terms set forth in this Agreement.
Symphony accepts such appointment and agrees to furnish the
services herein set forth for the compensation herein
provided.
2. Delivery of Documents. HQFM has furnished
Symphony with copies properly certified or authenticated of
each of the following:
a. the Trust's Agreement and Declaration of
Trust, as filed with the Secretary of State of the State of
Delaware on June 7, 1999, and all amendments thereto or
restatements thereof (such Agreement and Declaration of
Trust, as presently in effect and as it shall from time to
time be amended or restated, herein called the "Declaration
of Trust");
b. the Trust's By-Laws and amendments thereto
(the "By-Laws");
c. resolutions of the Trust's Trustees (the
"Trustees") authorizing the appointment of Symphony and
approving this Agreement;
d. the Trust's Notification of Registration on
Form N-8A under the 1940 Act as filed with the Securities
and Exchange Commission (the "SEC") on June 11, 1999, and
all amendments thereto;
e. the Trust's Registration Statement on Form
N-1A under the Securities Act of 1933, as amended ("1933
Act") (File No. 333-80473) and under the 1940 Act (File No.
811-09383), as filed with the SEC on June 11, 1999 and all
amendments thereto insofar as such Registration Statement
and such amendments relate to the Fund; and
f. the Trust's most recent prospectuses and
statement of additional information for the Fund (such
prospectuses and statement of additional information, as
presently in effect, and all amendments and supplements
thereto, herein collectively called the "Prospectus").
HQFM will furnish Symphony from time to time with
copies of all amendments of or supplements to the foregoing.
3. Services. Subject to the supervision of the
Trustees and HQFM, Symphony will furnish an investment
program in respect of the Fund, determine what securities
and other investments will be purchased, retained or sold by
the Fund, and place orders for the purchase and sale of
these investments; furnish statistical and research data;
help prepare filings and reports for the Fund; and generally
assist HQFM and the Fund's other service providers in all
aspects of the administration of the Fund.
Symphony will utilize quantitative techniques,
proprietary software models and real-time databases
(collectively, "quantitative models") in the performance
of the services to be provided under this Agreement.
Symphony represents and warrants that it maintains the full
right and authority to use these quantitative models in
connection with the investment management of the Fund.
Symphony further covenants that it will not take any action,
or fail to take any action, including entering into any
third party arrangement, that would restrict its use of the
quantitative models in connection with the investment
management of the Fund. Notwithstanding the provisions of
Sections 9 and 10 hereto, Symphony agrees to indemnify and
hold HQFM and its affiliates and the Trust harmless from any
and all damages, liabilities, costs and expenses, including
attorneys' fees, resulting from a breach of the above
representation, warranty and covenant.
Symphony further agrees that it:
a. will monitor the Fund's investments and
comply with the provisions of the Declaration of Trust, the
By-Laws and the Fund's stated investment objectives,
policies and restrictions, as they may be amended from time
to time;
b. will comply with all applicable federal and
state statutes, rules and regulations pertaining to its
services under this Agreement;
c. will place orders pursuant to its investment
determinations for the Fund either directly with the issuer
or with an underwriter, market maker, or broker or dealer.
In placing orders with brokers and dealers, Symphony will
attempt to obtain prompt execution of orders in an effective
manner at the most favorable price. Consistent with this
obligation, when the execution and price ordered by two or
more brokers are comparable, Symphony may, in its
discretion, purchase or sell portfolio securities through
brokers who provide Symphony with research advice and other
services. In no instance will portfolio securities be
purchased or sold through, from or to HQFM or Symphony, or
any affiliated person of the Trust, HQFM or Symphony, except
as may be permitted under the 1940 Act;
d. will treat confidentially and as proprietary
information of the Trust and HQFM and its affiliates all
records and other information relative to the Trust and HQFM
and its affiliates, as applicable, and will not use such
records and information for any purpose other than
performance of its responsibilities and duties hereunder,
except after prior notification to and approval in writing
by the Trust, or HQFM and its affiliates, as applicable,
which approval shall not be unreasonably withheld and may
not be withheld where Symphony (i) may be exposed to civil
or criminal contempt proceedings for failure to comply, (ii)
is requested to divulge such information by duly constituted
authorities, or (iii) is so requested by the Trust, or HQFM
and affiliates, as applicable;
e. will not make loans to any person to
purchase or carry units of beneficial interest in the Trust
or make loans to the Trust;
f. will direct its personnel, when making
investment recommendations for the Trust, not to inquire or
take into consideration whether the issuers of securities
proposed for purchase or sale for the Trust's accounts are
customers of HQFM, Symphony or their affiliates. In dealing
with such customers, Symphony and its affiliates will not
inquire or take into consideration whether securities of
those customers are held by the Trust;
g. will provide regular written reports to HQFM
and to the Trustees (including, without limitation, reports
on the general investment strategy of the Fund, the
performance of the Fund in relation to standard industry
indices and general conditions affecting the equity
markets), will make appropriate persons available for the
purpose of reviewing such reports with representatives of
HQFM and the Trustees on a regular basis at reasonable
times, and will provide various other written and oral
reports from time to time as requested by HQFM or the
Trustees;
h. will vote proxies received by it in
connection with securities held by the Fund consistent with
its fiduciary duties hereunder;
i. will act upon instructions from HQFM not
inconsistent with its fiduciary duties hereunder, provided
that HQFM shall have no authority to direct the manner in
which the Fund's assets are invested;
j. will not use the name of the Trust, the
Fund, HQFM or their affiliates in any prospectus,
advertisement, sales literature or other communication to
the public, except (i) in a general listing of its clients,
(ii) as may be required by law or (iii) as may be agreed to
in writing by HQFM, which agreement shall not be
unreasonably withheld;
k. will promptly notify HQFM in writing of the
occurrence of any event which could have a material impact
on the performance of Symphony's obligations hereunder,
including without limitation:
(1) an event which could disqualify it from
serving as an investment adviser of a registered
investment company;
(2) a change in control, as defined in the
1940 Act;
(3) a change in the portfolio manager of the
Fund; or
(4) any pending or threatened audit,
investigation, complaint, examination or other inquiry
relating to the Fund conducted by any state or federal
regulatory authority;
l. will maintain, with an insurer reasonably
acceptable to HQFM, professional liability insurance in
amounts reasonably acceptable to HQFM; and
m. will adopt and maintain a written code of
ethics complying with the requirements of Rule 17j-1 under
the 1940 Act.
4. Books and Records. Symphony agrees to maintain
and preserve all accounts, books and records required under
the 1940 Act and the Investment Advisers Act of 1940 and
rules thereunder with respect to Symphony's duties
hereunder. Symphony understands and agrees that all records
it maintains for the Trust are the property of the Trust and
further agrees to surrender promptly to the Trust any of
such records upon the Trust's request.
5. Expenses. During the term of this Agreement,
Symphony will pay all expenses incurred by it in connection
with its activities under this Agreement, including, without
limitation, the cost of the quantitative models and all
compensation of any person employed by or associated with
Symphony to assist in the performance of Symphony's duties
under this Agreement, whether or not such person is also an
officer or employee of the Trust.
6. Compensation. For the services provided and the
expenses assumed pursuant to this Agreement, HQFM will pay
Symphony, and Symphony will accept as full compensation
therefor, a sub-advisory fee, accrued daily and payable
monthly in arrears, of thirty-five one hundredths of one
percent (0.35%) of the Fund's average daily net assets not
in excess of $100 million, and three hundred seventy-five
thousandths of one percent (0.375%) of the Fund's average
daily net assets thereafter. From time to time, Symphony
may agree to waive or reduce some or all of the compensation
to which it is entitled under this Agreement. In the event
that HQFM waives any portion of its advisory fee to satisfy
any expense guarantee (as set forth in the Fund's then
current registration statement), Symphony shall waive a pro
rata portion of its advisory fee from HQFM, subject to
receiving a minimum fee of twenty one hundredths of one
percent (0.20%) of the Fund's average daily net assets.
7. Services to Others. HQFM understands that
Symphony may act as an investment adviser, sub-investment
adviser, and/or administrator to other accounts, including
other investment companies. HQFM has no objection to
Symphony's acting in such capacities, provided that whenever
the Trust and one or more other investment accounts advised
by Symphony have available funds for investment, investments
suitable and appropriate for each will be allocated in a
manner believed by Symphony to be equitable to each account.
HQFM recognizes that in some cases this procedure may
adversely affect the size of the position that the Fund may
obtain in a particular security. In addition, HQFM
understands that persons employed by Symphony to assist in
Symphony's duties under this Agreement will not devote their
full time to such service and nothing contained in this
Agreement will be deemed to limit or restrict the right of
Symphony or any of its affiliates to engage in and devote
time and attention to other businesses or to render services
of whatever kind or nature.
8. Year 2000 Compliance. Symphony has
(i) initiated a review and assessment of all areas within
its business and operations (including those affected by its
suppliers, vendors and customers) that could be adversely
affected by the "Year 2000 Problem" (that is, the risk
that computer applications used by Symphony (or its
suppliers, vendors and customers) may be unable to recognize
and perform properly date-sensitive functions involving
certain dates prior to and any date after December 31,
1999), (ii) developed a plan and timeline for addressing the
Year 2000 problem on a timely basis, and (iii) to date,
implemented that plan in accordance with that timetable.
Based on the foregoing, Symphony represents that, to the
best of its knowledge, all computer applications (including
those of its suppliers, vendors and customers) that are
material to its business and operations will on a timely
basis be able to perform properly date-sensitive functions
for all dates before and after January 1, 2000 (that is, be
"Year 2000 compliant").
9. Limitation of Liability. Except as provided in
Section 3, Symphony will not be liable for any error of
judgment or mistake of law or for any loss suffered by HQFM
or the Trust in connection with the performance of this
Agreement, except a loss resulting from a breach of
fiduciary duty with respect to the receipt of compensation
for services or a loss resulting from willful misfeasance,
bad faith, or gross negligence on the part of Symphony in
the performance of its duties or from reckless disregard by
it of its obligations and duties under this Agreement.
Notwithstanding the foregoing, neither HQFM nor the Trust
waives any right it may have at common law or under the
federal or state securities laws.
10. Indemnification. HQFM and Symphony each agree
to indemnify the other and their respective affiliates
against any claim against or loss or liability to such other
party (including reasonable attorneys' fees) arising out of
any action on the part of the indemnifying party which
constitutes willful misfeasance, bad faith, gross negligence
or reckless disregard.
11. Duration and Termination. This Agreement will
become effective as of the date first set forth above.
This Agreement will remain in effect for two years
and thereafter continue for successive one year periods,
provided such continuation is specifically approved at least
annually (a) by the vote of a majority of those Trustees who
are not parties to this Agreement or interested persons of
such parties, cast in person at a meeting called for the
purpose of voting on such approval, and (b) by the vote of
the Trustees or by the vote of a majority of the outstanding
voting securities of the Fund. Notwithstanding the
foregoing, this Agreement may be terminated at any time,
without the payment of any penalty, on sixty days' written
notice by the Trust (by vote of the Trustees or by vote of a
majority of the outstanding voting securities of the Fund),
by HQFM or by Symphony. This Agreement will immediately
terminate in the event of its assignment, except as
permitted under the 1940 Act. (As used in this Agreement,
the terms "majority of the outstanding voting securities,"
"interested persons" and "assignment" have the same
meaning as such terms in the 1940 Act.)
12. Amendment of this Agreement. No provision of
this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change,
waiver, discharge or termination is sought.
13. Notices. Any notice, demand, request or other
communication which is required, called for or contemplated
to be given or made hereunder shall be deemed to have been
duly given or made for all purposes if (a) in writing and
sent by (i) messenger or a recognized national overnight
courier service for next day delivery with receipt therefor,
or (ii) certified or registered mail, postage paid, return
receipt requested, or (b) sent by facsimile transmission
with a written copy thereof sent on the same day by postage
paid first-class mail or (c) by personal delivery at the
following address:
To: HQFM
One Bush Street
San Francisco, CA 94115
Attention: Steven N. Machtinger, Esq.
Facsimile No.: (415) 439-3638
To: Symphony
555 California Street
San Francisco, CA 94104
Attention: Neil L. Rudolph
Facsimile No.: (415) 676-2480
14. Miscellaneous. The captions in this Agreement
are included for convenience of reference only and in no way
define or delimit any of the provisions hereof or otherwise
affect their construction or effect. If any provision of
this Agreement is held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby. This Agreement will be
binding upon and shall inure to the benefit of the parties
hereto and their respective successors and shall be governed
by the laws of the State of California.
The name "Hambrecht & Quist Fund Trust" and the
"Trustees of Hambrecht & Quist Fund Trust" refer
respectively to the Trust created, and the Trustees, as
trustees but not individually or personally, acting from
time to time under the Declaration of Trust, to which
reference is hereby made. The obligations of the Trust
entered into in the name or on behalf thereof by any of its
Trustees, officers, representatives or agents are made not
individually, but only in such capacities, and are not
binding upon any of the Trustees, officers, representatives,
agents or shareholders of the Trust personally, but bind
only the assets of the Trust, and persons dealing with any
series of shares of the Trust must look solely to the assets
of the Trust belonging to such series for the enforcement of
any claims against the Trust.
IN WITNESS WHEREOF, the parties hereto have caused
this instrument to be executed by their officers designated
below as of the day and year first above written.
HAMBRECHT & QUIST FUND
MANAGEMENT, LLC
By:________________________________
Name: David R. Krimm
Title: President
SYMPHONY ASSET MANAGEMENT, LLC
By:________________________________
Name: Neil L. Rudolph
Title: Chief Operating Officer
