<DOCUMENT>
<TYPE>EX-99.(D)(III)
<SEQUENCE>4
<FILENAME>a2136845zex-99_diii.txt
<DESCRIPTION>EXHIBIT 99(D)(III)
<TEXT>
<Page>


                                                             Exhibit 99(d)(iii)


Control No.                       Maximum Primary Subscription Shares Available


       THE OFFER EXPIRES AT 5:00 P.M., EASTERN TIME, ON JUNE 18, 2004*

                            H&Q HEALTHCARE INVESTORS
                 NON-TRANSFERABLE RIGHTS TO SUBSCRIBE FOR SHARES

                                  EXERCISE FORM

Dear Shareholder:

You are entitled to exercise the Rights issued to you as of May 26, 2004, the
Record Date for the Trust's rights offering, to subscribe for the number of
shares of beneficial interest ("Shares") of H&Q Healthcare Investors ("Trust")
shown on this Exercise Form pursuant to the Primary Subscription upon the terms
and conditions specified in the Trust's prospectus dated May 26, 2004
("Prospectus"). The terms and conditions of the rights offering ("Offer") set
forth in the Prospectus are incorporated herein by reference. Capitalized terms
not defined herein have the meanings attributed to them in the Prospectus. As a
holder of Rights, you are entitled to purchase one Share for each three Rights
you exercise. In accordance with the Over-Subscription Privilege, as a holder of
Rights, you are also entitled to subscribe for additional Shares, if Shares
remaining after exercise of Rights pursuant to the Primary Subscription are
available and you have fully exercised all Rights issued to you. If sufficient
Shares remain after completion of the Primary Subscription, all
over-subscriptions will be honored in full. If sufficient Shares are not
available after completion of the Primary Subscription to honor all
over-subscriptions, the Trust may, at the discretion of the Board of Trustees,
issue up to an additional 1,259,036 Shares in order to cover such
over-subscription requests. To the extent the Trust determines not to issue
additional Shares to honor all over-subscriptions, the available Shares will be
allocated among those who over-subscribe based on the number of Rights
originally issued to them by the Trust, so that the number of Shares issued to
shareholders who subscribe pursuant to the Over-Subscription Privilege will
generally be in proportion to the number of Shares owned by them on the Record
Date. The Trust will not offer or sell any Shares which are not subscribed for
pursuant to the Primary Subscription or the Over-Subscription Privilege.

                               SAMPLE CALCULATION

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                   PRIMARY SUBSCRIPTION ENTITLEMENT (1-FOR-3)

                  NUMBER OF SHARES OWNED ON THE RECORD DATE   100

                NUMBER OF RIGHTS ISSUED*   102 [DIVIDED BY] 3 = 34 NEW SHARES

           * AUTOMATICALLY ROUNDED UP TO THE NEAREST NUMBER OF RIGHTS
                           EVENLY DIVISIBLE BY THREE.

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                               SUBSCRIPTION PRICE

The Subscription Price will be 95% of the lower of (i) the volume weighted
average share price of a Share on the New York Stock Exchange on June 21, 2004
("Pricing Date") and the four preceding business days, or (ii) the net asset
value per Share on the Pricing Date.

                          METHOD OF EXERCISE OF RIGHTS

IN ORDER TO EXERCISE YOUR RIGHTS, YOU MUST EITHER (I) COMPLETE AND SIGN THIS
EXERCISE FORM ON THE BACK AND RETURN IT TOGETHER WITH PAYMENT AT THE ESTIMATED
SUBSCRIPTION PRICE FOR THE SHARES, OR (II) PRESENT A PROPERLY COMPLETED NOTICE
OF GUARANTEED DELIVERY, IN EITHER CASE TO THE SUBSCRIPTION AGENT, EQUISERVE
TRUST COMPANY, BEFORE 5:00 P.M., EASTERN TIME, ON JUNE 18, 2004 ( "EXPIRATION
DATE").*

Full payment of the Estimated Subscription Price per share for all Shares
subscribed for pursuant to both the Primary Subscription and Over-Subscription
Privilege must accompany this Exercise Form and must be made payable in United
States dollars by money order or check drawn on a bank located in the United
States payable to H&Q Healthcare Investors. Alternatively, if a Notice of
Guaranteed Delivery is used, a properly completed and executed Exercise Form,
and full payment, as described in such notice, must be received by the
Subscription Agent no later than the close of business on the third business day
after the Expiration Date. For additional information, see the Prospectus.

                 THESE SUBSCRIPTION RIGHTS ARE NON-TRANSFERABLE

                                  Account #:

                                  Maximum Primary Shares Available:

                                  Number of Rights Issued:


                                                             (continued on back)

<Page>


Stock certificates for the shares acquired pursuant to the Primary Subscription
will be mailed promptly after the expiration of the Offer and after full payment
for the Shares subscribed for has been received and cleared. Certificates
representing Shares acquired pursuant to the Over-Subscription Privilege will be
mailed as soon as practicable after full payment has been received and cleared
and all allocations have been effected. Any excess payment to be refunded by the
Trust to a shareholder will be mailed by the Subscription Agent to such
shareholder as promptly as possible.


<Table>
<Caption>
BY FIRST CLASS MAIL:             BY EXPRESS MAIL OR              BY HAND:
                                 OVERNIGHT COURIER:
<S>                              <C>                             <C>
EquiServe Trust Company          EquiServe Trust Company         EquiServe Trust Company
Corporate Reorganization         Corporate Reorganization        c/o Securities Transfer & Reporting
P.O. Box 859208                  161 Baystate Drive              100 William Street, 3rd Floor
Braintree, MA  02185             Braintree, MA  02184            New York, NY  10038
</Table>

          Delivery to an address other than one of the addresses listed
                   above will not constitute valid delivery.

                PLEASE PRINT ALL INFORMATION CLEARLY AND LEGIBLY

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<Table>
<S>                                            <C>               <C>

SECTION 1: OFFERING INSTRUCTIONS (CHECK THE APPROPRIATE BOXES)

IF YOU WISH TO SUBSCRIBE FOR YOUR FULL ENTITLEMENT:

[ ] I apply for ALL of my entitlement of new Shares pursuant to the
Primary Subscription _____________________  x $_____[DAGGER] =  $ __________
                      (no. of new Shares)

[ ] I apply for new Shares pursuant to the Over-Subscription
Privilege** _______________________________ x  $_____[DAGGER] = $ ___________
               (no. of additional Shares)

IF YOU DO NOT WISH TO APPLY FOR YOUR FULL ENTITLEMENT:

[ ] I apply for ___________________________ x  $_____[DAGGER] = $ ___________
                   (no. of new Shares)

                                                AMOUNT ENCLOSED $ ___________

</Table>
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SECTION 2:  SUBSCRIPTION AUTHORIZATION

I acknowledge that I have received the Prospectus for this Offer and I hereby
irrevocably subscribe for the number of new Shares indicated above on the terms
and conditions set in the Prospectus. I understand and agree that I will be
obligated to pay any additional amount to the Trust if the Subscription Price as
determined on the Pricing Date is in excess of the $____ Estimated Subscription
Price per Share.

I hereby agree that if I fail to pay in full for the Shares for which I have
subscribed, the Trust may exercise any of the remedies provided for in the
Prospectus.

Signature of subscriber(s)    --------------------------------------------------

                              --------------------------------------------------

                              --------------------------------------------------

Telephone number (including area code) (    )  ---------------------------------

If you wish to have your Shares and refund check (if any) delivered to an
address other than that listed on this Exercise Form you must have your
signature guaranteed by a member of the New York Stock Exchange or a bank or
trust company. Please provide the delivery address above and note if it is a
permanent change.
--------------------------------------------------------------------------------

----------------------------

*         Unless the Offer is extended by the Trust.

**        You can only over-subscribe if you have fully exercised your Primary
          Subscription Rights.

[DAGGER]  NOTE:  $____ per share is an estimated  price only. The Subscription
          Price will be  determined  on June 21, 2004, the Pricing Date
          (which is the first business day after the Expiration Date, unless
          extended), and could be higher or lower depending on the changes in
          the net asset value and market price of a Share.

   ANY QUESTIONS REGARDING THIS EXERCISE FORM AND THE OFFER MAY BE DIRECTED TO
   THE INFORMATION AGENT, THE ALTMAN GROUP, INC., TOLL-FREE AT (800) 870-0126.

</TEXT>
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