SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
( ) Preliminary Proxy Statement ( ) Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
(X) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
WestMed Venture Partners, L.P.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
(X) No fee required
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
( ) Fee paid previously with preliminary materials.
( ) Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule, or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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WESTMED VENTURE PARTNERS, L.P.
August 29, 1997
Dear Limited Partner:
We are pleased to send you the accompanying proxy statement relating to a
Special Meeting of Limited Partners (the "Meeting") of WestMed Venture Partners,
L.P. (the "Partnership") to be held on September 30, 1997. As you may know, CIBC
Wood Gundy Securities Corp. ("CIBC Wood Gundy"), Oppenheimer Group, Inc. and
Oppenheimer Equities, Inc. have entered into an agreement for CIBC Wood Gundy to
acquire (the "Acquisition") all of the stock of Oppenheimer Holdings, Inc.,
whose wholly-owned subsidiary, Medical Venture Holdings, Inc., is the general
partner of WestMed Venture Management, L.P. (the "Managing General Partner"),
the managing general partner of the Partnership. Upon consummation of the
Acquisition, the existing (i) management agreement between the Partnership and
the Managing General Partner and (ii) sub-management agreement between the
Managing General Partner and Alsacia Venture Management Inc. each will terminate
automatically as required by law. The Meeting is being held to permit Limited
Partners to consider proposals requesting the approval of new management and
sub-management agreements, each of which, if approved, will become effective
upon consummation of the Acquisition. The terms and conditions of the new
management and sub-management agreements are substantially identical to those
contained in the existing agreements.
It is important to keep in mind that CIBC Wood Gundy is acquiring, among
other things, an interest in the general partner of the Managing General
Partner, not the Partnership. Your interest in the Partnership and the
management fees charged to the Partnership will not change as a result of the
Acquisition. Moreover, CIBC Wood Gundy has advised the General Partners that it
expects the current senior management team of the Managing General Partner will
remain in place following the Acquisition.
The General Partners have unanimously approved the proposals as being in
the best interest of the Partnership and the Limited Partners. The General
Partners believe that the new management and sub-management agreements will
provide continuity in management with no adverse impact on the Partnership.
Whether or not you intend to attend the Meeting, you may vote by proxy by
signing and returning your proxy card in the enclosed postage-paid envelope. We
thought it would be helpful to provide the questions and answers regarding the
Acquisition and the related proposals on the reverse side of this page. They are
designed to answer questions you may have and help you cast your votes, and are
being provided as a supplement to, not a substitute for, the proxy statement,
which we urge you to carefully review. As always, we thank you for your
confidence and support.
Please feel free to call the proxy solicitor, D.F. King & Co., Inc., at
1-800-949-2583 to answer any questions you may have regarding the voting of your
interest in the Partnership.
Very truly yours,
The General Partners of WestMed Venture
Partners, L.P.
<PAGE>
QUESTIONS & ANSWERS
Q. WHO IS BEING ACQUIRED IN THE ACQUISITION?
A. CIBC Wood Gundy has agreed to acquire all of the
stock of Oppenheimer Holdings, Inc., whose
wholly-owned subsidiary is the general partner of the
Managing General Partner. The Partnership is not
being acquired.
Q. WHY AM I BEING ASKED TO VOTE ON THESE PROPOSALS?
A. Pursuant to the Investment Company Act of 1940, as
amended, consummation of the Acquisition will cause
the automatic termination of each of the existing
management and sub-management agreements. Therefore,
in order to ensure continuity of management, Limited
Partners are being asked to approve substantially
identical new management and sub-management
agreements.
Q. HOW WILL THE ACQUISITION AFFECT ME AS A LIMITED
PARTNER?
A. Your interest in the Partnership and the management
fees charged to the Partnership will not change as a
result of the Acquisition. Moreover, CIBC Wood Gundy
has advised the General Partners that it expects the
current senior management team of the Managing
General Partner will remain in place following the
Acquisition. Consequently, the General Partners
believe that the Acquisition will not adversely
affect the operations of the Partnership.
Q. HOW DO THE GENERAL PARTNERS RECOMMEND THAT I VOTE?
A. After careful consideration, the General Partners
recommend that Limited Partners vote "FOR" each of
the proposals on the enclosed proxy card.
Q. WHOM DO I CALL IF I HAVE QUESTIONS?
A. If you have any questions, please feel free to call
the proxy solicitor, D.F. King & Co., Inc., at
1-800-949-2583 to answer any questions you may have
regarding the voting of your interest in the
Partnership.
PLEASE VOTE.
YOUR VOTE IS IMPORTANT
NO MATTER HOW MANY UNITS OF
LIMITED PARTNERSHIP INTEREST YOU OWN.
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WESTMED VENTURE PARTNERS, L.P.
NOTICE OF SPECIAL MEETING OF LIMITED PARTNERS
SEPTEMBER 30, 1997
TO THE LIMITED PARTNERS OF
WESTMED VENTURE PARTNERS, L.P.:
Notice is hereby given that a Special Meeting of Limited Partners (the
"Meeting") of WestMed Venture Partners, L.P. (the "Partnership") will be held at
the offices of Oppenheimer & Co., Inc., on the 40th floor of Oppenheimer Tower,
World Financial Center, New York, New York on Tuesday, September 30, 1997 at
1:00 P.M. for the following purposes:
1. To approve or disapprove a new management agreement between WestMed
Venture Management, L.P. (the "Managing General Partner") and the
Partnership to replace the existing management agreement between the
Partnership and the Managing General Partner;
2. To approve or disapprove a new sub-management agreement between the
Managing General Partner and Alsacia Venture Management Inc. ("Alsacia")
to replace the existing sub-management agreement between the Managing
General Partner and Alsacia; and
3. To transact such other business as may properly come before the Meeting
or any adjournment thereof.
THE ATTACHED PROXY STATEMENT DESCRIBES EACH OF THE ABOVE PROPOSALS IN
DETAIL. THE GENERAL PARTNERS UNANIMOUSLY RECOMMEND THAT LIMITED PARTNERS VOTE
FOR THE FOREGOING PROPOSALS.
The General Partners of the Partnership have fixed the close of business on
Thursday, August 21, 1997 as the record date for the determination of Limited
Partners entitled to notice of and to vote at the Meeting or any adjournment
thereof.
A complete list of the Limited Partners entitled to vote at the Meeting
will be available and open to the examination of any Limited Partner for any
purpose germane to the Meeting during ordinary business hours from and after
September 9, 1997, at the office of the Partnership located on the 39th floor of
Oppenheimer Tower, World Financial Center, New York, New York.
You are cordially invited to attend the Meeting. Limited Partners are
requested to complete, date and sign the enclosed form of proxy and return it
promptly in the envelope provided for that purpose. Voting by mail will not
prevent you from attending the Meeting and voting in person if it is your
intention to do so. The enclosed proxy is being solicited by the General
Partners on behalf of the Partnership.
By Order of the General Partners
THOMAS E. WHITE
A GENERAL PARTNER
New York, New York
Dated: August 29, 1997
IMPORTANT
THE GENERAL PARTNERS URGE YOU TO MARK, SIGN AND RETURN THE ENCLOSED PROXY AS
SOON AS POSSIBLE. THE ENCLOSED ADDRESSED ENVELOPE REQUIRES NO POSTAGE AND IS
PROVIDED FOR YOUR CONVENIENCE.
<PAGE>
PROXY STATEMENT
WESTMED VENTURE PARTNERS, L.P.
OPPENHEIMER TOWER
WORLD FINANCIAL CENTER
NEW YORK, NEW YORK 10281
SPECIAL MEETING OF LIMITED PARTNERS
SEPTEMBER 30, 1997
This Proxy Statement is furnished to the limited partners ("Limited
Partners") of WestMed Venture Partners, L.P., a Delaware limited partnership
(the "Partnership"), in connection with the solicitation of proxies by the
general partners (the "General Partners") of the Partnership to be voted at the
Special Meeting of Limited Partners (the "Meeting"), to be held at the office of
Oppenheimer & Co., Inc. ("Opco") on the 40th floor of the Oppenheimer Tower,
World Financial Center, New York, New York on September 30, 1997 at 1:00 P.M.,
and at any adjournments thereof. The approximate mailing date of this Proxy
Statement is August 29, 1997.
All properly executed proxies received prior to the Meeting will be voted
at the Meeting in accordance with the instructions marked thereon or otherwise
as provided therein. Unless instructions to the contrary are marked, proxies
will be voted FOR the approval of the (i) new management agreement (the "New
Management Agreement") between WestMed Venture Management, L.P., a Delaware
limited partnership (the "Managing General Partner"), and the Partnership and
(ii) new sub-management agreement (the "New Sub-Management Agreement") between
the Managing General Partner and Alsacia Venture Management Inc., a Delaware
corporation ("Alsacia"). Any proxy may be revoked at any time prior to the
exercise thereof by giving written notice revoking the proxy to the Partnership
at its principal office, by executing a later dated proxy or by attending and
voting at the Meeting.
The General Partners have fixed the close of business on August 21, 1997 as
the record date for the determination of Limited Partners entitled to notice of
and to vote at the Meeting and at any adjournment thereof. Limited Partners on
the record date will be entitled to one vote for each interest held in the
Partnership represented by a $500 capital contribution to the Partnership (a
"Unit"). At August 29, 1997, the Partnership had outstanding 66,929 Units. To
the knowledge of management of the Partnership, no person owned beneficially
more than five percent (5%) of the outstanding Units at such date.
The General Partners know of no business other than that mentioned in
Proposals 1 and 2 of the Notice of Meeting which will be presented for
consideration at the Meeting. If any other matter is properly presented, it is
the intention of the persons named in the enclosed proxy to vote in accordance
with their best judgment. In the event that the applicable quorum (the presence
in person or by proxy of the holders of a majority of the Units outstanding and
entitled to vote) for the Meeting or to act on any matter has not been obtained,
the persons named as proxies may propose one or more adjournments of the Meeting
to permit further solicitation of proxies. Any such adjournment will require the
affirmative vote of the holders of a majority of the Units present in person or
by proxy at the Meeting (or any adjournment thereof). The persons named as
proxies will vote in favor of such adjournment those proxies which they are
entitled to vote in favor of Proposal 1 and will vote against any such
adjournment those proxies required to be voted against Proposal 1.
Proposals 1 and 2 relating to the approval of the New Management Agreement
and New Sub-Management Agreement, respectively, each requires the affirmative
vote of the holders of sixty-seven percent (67%) or more of the outstanding
Units present at the Meeting if the holders of more than fifty percent (50%) of
such Units are present in person or by proxy; or more than fifty percent (50%)
of the outstanding Units, whichever is less (a "1940 Act Majority"), in order to
become effective. Abstentions and "broker non-votes" (as defined) will be
counted as present for the purpose of determining a quorum and will have the
same effect as a vote against a proposal. "Broker non-votes" are Units held in
the name of a broker or nominee for which an executed proxy is received by the
Partnership, but are not voted on the proposal because voting instructions have
not been received from the beneficial owners or persons entitled to vote and the
broker or nominee does not have discretionary voting power.
THE PARTNERSHIP WILL PROMPTLY FURNISH, WITHOUT CHARGE, A COPY OF ITS MOST
RECENT ANNUAL REPORT TO ANY LIMITED PARTNER UPON REQUEST. REQUESTS SHOULD BE
DIRECTED TO PALMERI FUND ADMINISTRATORS, INC. AT 1-800-821-0905.
<PAGE>
INTRODUCTION
BACKGROUND
The Partnership, which has elected to be treated as a business development
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
is currently managed by three General Partners, consisting of two Individual
General Partners and the Managing General Partner. The two Individual General
Partners are Robert A. Elliott and Thomas E. White. The general partner of the
Managing General Partner is Medical Venture Holdings, Inc. ("MVH"), a Delaware
corporation affiliated with Opco. The limited partners of the Managing General
Partner are Oppenheimer Holdings, Inc. ("Oppenheimer Holdings"), a Delaware
corporation and the parent of Opco, MVP Holdings, Inc., a Delaware corporation
unaffiliated with Opco, and BSW, Inc., a Delaware corporation in which Philippe
L. Sommer owns one-third of the outstanding equity. Mr. Sommer is the sole
director, officer and stockholder of Alsacia.
At December 31, 1996, the Partnership had: (i) made venture capital
investments aggregating approximately $28.6 million, or approximately 95% of the
original net proceeds of approximately $30 million and (ii) net assets of
approximately $13 million. The term of the Partnership is scheduled to expire on
December 31, 1997. The proposals to be considered by Limited Partners at the
Meeting will not affect the expiration date of the Partnership's term.
THE INDIVIDUAL GENERAL PARTNERS
The Individual General Partners provide overall guidance and supervision
with respect to the operations of the Partnership and perform the various duties
imposed on the general partners of business development companies by the 1940
Act. In addition to general fiduciary duties, the Individual General Partners,
among other things, supervise the management arrangements of the Partnership,
the custody arrangement with respect to portfolio securities, the selection of
accountants, fidelity bonding and the activities of the Managing General Partner
and Alsacia. As required by the 1940 Act, a majority of the General Partners
must be individuals who are not "interested persons" of the Partnership, as
defined in the 1940 Act. In 1987, the Securities and Exchange Commission (the
"Commission") issued an order declaring that each of the Individual General
Partners is not an "interested person" of the Partnership as defined in the 1940
Act solely by reason of his being a general partner of the Partnership.
THE MANAGING GENERAL PARTNER AND ALSACIA
The Managing General Partner, subject to the supervision of the Individual
General Partners, has exclusive power and authority to manage and control the
Partnership's venture capital investments. Subject to the supervision of the
Individual General Partners, the Managing General Partner is authorized to make
all decisions regarding the Partnership's venture capital investment portfolio,
including, among other things, authority to find, evaluate, structure, monitor
and liquidate such investments and to provide, or arrange for the provision of,
managerial assistance to the portfolio companies in which the Partnership
invests. The Managing General Partner is further authorized to retain the
services of a sub-manager to assist in the provision of the management and
advisory services required to be provided by the Managing General Partner to the
Partnership. Effective as of July 1, 1996, the Managing General Partner retained
Alsacia to provide services to the Managing General Partner regarding the
Partnership's venture capital investments.
MEETING AGENDA SUMMARY
The items of business to be considered at the Meeting are the approval of
the (i) New Management Agreement between the Managing General Partner and the
Partnership and (ii) New Sub-Management Agreement between the Managing General
Partner and Alsacia. These Agreements, if approved, will become effective upon
consummation of the acquisition (the "Acquisition") contemplated by the Stock
Acquisition Agreement dated as of July 22, 1997 (the "Stock Acquisition
Agreement") by and among CIBC Wood Gundy Securities Corp. ("CIBC Wood Gundy")
and Oppenheimer Group, Inc. ("Oppenheimer Group") and its subsidiary,
Oppenheimer Equities, Inc. ("Oppenheimer Equities" and, collectively with
Oppenheimer Group, "Oppenheimer"). Pursuant to the Stock Acquisition Agreement,
CIBC Wood Gundy will acquire from Oppenheimer Equities all of the stock of
Oppenheimer Holdings, whose wholly-owned subsidiary, MVH, is the general partner
of the Managing General Partner. For further discussion of the Acquisition, see
"Proposals 1 and 2 -- The Acquisition" below.
Pursuant to the 1940 Act, consummation of the Acquisition will cause the
automatic termination of the (i) existing management agreement dated as of July
1, 1996 (the "Existing Management Agreement") between the Managing General
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Partner and the Partnership and (ii) existing sub-management agreement dated as
of July 1, 1996 (the "Existing Sub-Management Agreement") between the Managing
General Partner and Alsacia. Therefore, in order to ensure continuity in the
management of the Partnership, Limited Partners are being asked to approve the
New Management Agreement and the New Sub-Management Agreement.
As discussed below under "Proposals 1 and 2 -- Basis for Recommendation by
the Individual General Partners," the Individual General Partners, following
their review of the New Management Agreement, the New Sub-Management Agreement
and such other materials as they deemed appropriate, unanimously recommend that
the New Management Agreement and New Sub-Management Agreement be approved by
Limited Partners. The Individual General Partners believe that the New
Management Agreement and New Sub-Management Agreement will assure continuity in
management with no adverse impact on the Partnership.
PROPOSALS 1 AND 2
INTRODUCTION
As required by the 1940 Act, each of the Existing Management Agreement and
Existing Sub-Management Agreement provides for its automatic termination in the
event of its "assignment" (as defined in the 1940 Act). As discussed below,
consummation of the Acquisition will constitute an assignment of the Existing
Management Agreement and Existing Sub-Management Agreement. Therefore, in
anticipation of the Acquisition, the General Partners are proposing that Limited
Partners approve the New Management Agreement and New Sub-Management Agreement.
The terms and conditions of the New Management Agreement and New Sub-Management
Agreement are substantially identical to those contained in the Existing
Management Agreement and Existing Sub-Management Agreement, respectively.
Descriptions of the New Management Agreement, including the services to be
provided by the Managing General Partner thereunder, and New Sub-Management
Agreement, including the services to be provided by Alsacia thereunder, are set
forth below. The descriptions of the New Management Agreement and Sub-Management
Agreement are qualified in their entirety by reference to the forms of the New
Management Agreement and New Sub-Management Agreement attached hereto as Exhibit
A and Annex I, respectively.
THE ACQUISITION
On July 22, 1997, CIBC Wood Gundy and Oppenheimer entered into the Stock
Acquisition Agreement, pursuant to which CIBC Wood Gundy will acquire all of the
stock of Oppenheimer Holdings from Oppenheimer Equities. The aggregate purchase
price is $350 million in cash (the "Purchase Price"), of which amount $75
million will be retained by CIBC Wood Gundy to discharge certain indemnification
obligations of Oppenheimer Equities to CIBC Wood Gundy. In addition, the
Purchase Price is subject to certain post-closing adjustments based on the
change in shareholders' equity of Oppenheimer Holdings and its subsidiaries on a
consolidated basis from April 30, 1997 until the closing of the Acquisition. In
addition, a retention pool of up to $175 million will be paid out over a period
of up to three years.
The Acquisition is subject to various conditions being satisfied prior to
closing, including, among other things, the receipt of the consents of Limited
Partners hereunder and requisite regulatory approvals, including any approvals
required by the Federal Reserve Board and the expiration of the applicable
waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
If for any reason the Acquisition is not consummated, the Existing Management
Agreement and Existing Sub-Management Agreement will remain in effect in
accordance with their respective terms and conditions.
Upon consummation of the Acquisition, MVH, the general partner of the
Managing General Partner, will be an indirect, wholly-owned subsidiary of CIBC
Wood Gundy. Therefore, consummation of the Acquisition will involve a change in
control of the Managing General Partner, which will constitute an assignment
under the 1940 Act of, and thus cause the automatic termination of, the Existing
Management Agreement. In addition, since the Managing General Partner is a party
to the Existing Sub-Management Agreement, the Acquisition will constitute an
assignment under the 1940 Act of, and thus cause the automatic termination of,
the Existing Sub-Management Agreement. CIBC Wood Gundy has advised the General
Partners that it does not expect any changes, other than changes in the ordinary
course of business, in the senior management team of the Managing General
Partner, or in the manner in which the Managing General Partner renders services
to the Partnership.
INFORMATION CONCERNING CIBC WOODY GUNDY
CIBC Woody Gundy is the broker-dealer subsidiary of The Canadian Imperial
Bank of Commerce, North America's seventh largest and Canada's second largest
bank. CIBC Wood Gundy is a wholly-owned subsidiary of CIBC Wood Gundy
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Holdings, Inc., which in turn is owned 98% by CIBC Wood Gundy Securities Inc., a
Canadian investment dealer, and 2% by CIBC Wood Gundy Funding LLC. CIBC Wood
Gundy Funding LLC is owned 50% by CIBC Wood Gundy Securities Inc. and 50% by
Wood Gundy Mortgage Corp. CIBC Wood Gundy Securities Inc. is a wholly-owned
subsidiary of The CIBC Wood Gundy Corporation, a Canadian firm owned by The
Canadian Imperial Bank of Commerce. The principal business address of CIBC Wood
Gundy, CIBC Wood Gundy Holdings, Inc. and CIBC Wood Gundy Funding LLC is 425
Lexington Avenue, New York, New York 10017. The principal business address of
CIBC Wood Gundy Securities Inc., Wood Gundy Mortgage Corp. and The CIBC Wood
Gundy Corporation is B.C.E. Place, P.O. Box 500, 161 Bay Street, Toronto,
Ontario, Canada M5J 2S8. The principal business address of The Canadian Imperial
Bank of Commerce is Commerce Court, Toronto, Ontario, Canada M5L 1A2.
DESCRIPTION OF THE PROPOSED ARRANGEMENTS WITH THE MANAGING GENERAL PARTNER AND
ALSACIA
At their meeting on August 11, 1997, the Individual General Partners
approved the New Management Agreement, pursuant to which the Managing General
Partner would continue to provide, or arrange for the provision of, management,
administrative and investment advisory services to the Partnership. The New
Management Agreement, subject to Limited Partner approval, would replace the
Existing Management Agreement. The Existing Management Agreement was approved by
the Individual General Partners and Limited Partners on April 3, 1996 and June
21, 1996, respectively. The New Management Agreement recognizes that the
Managing General Partner will enter into the New Sub-Management Agreement,
pursuant to which Alsacia will provide certain management services to the
Managing General Partner with respect to the Partnership's venture capital
investments. If the New Management Agreement and New Sub-Management Agreement
are approved by Limited Partners at the Meeting, they will become effective upon
consummation of the Acquisition and will remain in effect, unless earlier
terminated, for an initial term of one year.
INFORMATION CONCERNING THE MANAGING GENERAL PARTNER. The Managing General
Partner is a Delaware limited partnership organized in January 1990. The
Managing General Partner maintains its principal office at Oppenheimer Tower,
World Financial Center, New York, New York 10281. The Managing General Partner
was formed for the principal purpose of providing certain management,
administrative and investment advisory services to the Partnership. The Managing
General Partner has served as the managing general partner of the Partnership
since June 27, 1990 and has engaged in no other activities. The Managing General
Partner is registered as an investment adviser under the Investment Advisers Act
of 1940, as amended.
The limited partners of the Managing General Partner are Oppenheimer
Holdings, MVP Holdings, Inc. and BSW, Inc. Oppenheimer Holdings is a
wholly-owned subsidiary of Oppenheimer Equities. Oppenheimer Equities is a
wholly-owned subsidiary of Oppenheimer Financial Corp., which in turn is a
wholly-owned subsidiary of Oppenheimer Group. Oppenheimer & Co., L.P. ("Opco
LP") owns approximately 71% of the common stock of Oppenheimer Group. The
general and limited partner interests in Opco LP are owned by officers and
employees of Opco and its affiliates. MVP Holdings, Inc. and BSW, Inc. were the
general partners of the managing general partner of each of the Partnership and
WestMed Venture Partners 2, L.P. ("WVP 2"), a Delaware limited partnership
affiliated with Opco which has elected to be treated as a business development
company under the 1940 Act, from the dates of their respective organization
until June 27, 1990.
The general partner of the Managing General Partner is MVH. MVH is a
wholly-owned sudsidiary of Oppenheimer Holdings, the parent of Opco. Opco, a
member of the New York Stock Exchange, Inc., the National Association of
Securities Dealers, Inc. and all principal United States securities exchanges,
is a diversified investment banking and securities firm, providing a broad range
of services to individual, corporate and institutional clients. Opco is
registered as a broker-dealer and investment adviser with the Commission, and
also is registered as a broker-dealer in all of the states of the United States
and with the Securities Association in the United Kingdom. Opco operates in the
capacity of broker and dealer for its customers, as well as trader for its own
account. The services provided by Opco and its subsidiaries, and the activities
in which they are engaged, include investment banking, securities brokerage,
securities research, customer financing, securities trading and arbitrage,
corporate finance, real estate financing and investment advisory services.
Opco's investment banking activities include an active engagement in the
healthcare area. Opco provides public equity and debt financing to clients in
the biotechnology, instrumentation and pharmaceutical products and services
sectors in the healthcare field. Opco also provides private financing and
merger, acquisition and divestiture assistance to healthcare companies. Opco's
Healthcare Investment Banking Group is supported by Opco's securities research
team which reports on public companies in the human healthcare sector.
MVH is also the general partner of the managing general partner of WVP 2.
At December 31, 1996, WVP 2 had: (i) made venture capital investments
aggregating approximately $15.4 million, or approximately 89% of the original
net proceeds of approximately $17.3 million and (ii) net assets of approximately
$8.3 million. The compensation arrangements
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between WVP 2 and its managing general partner are identical in all material
respects to those between the Partnership and the Managing General Partner. See
" -- Compensation Payable to the Managing General Partner" below.
The following table sets forth information at August 29, 1997 concerning
the directors and officers of MVH that are principally involved with the
operations of the Partnership. The address of each such person is Oppenheimer
Tower, World Financial Center, New York, New York 10281.
<TABLE>
<CAPTION>
OFFICER OR
DIRECTOR PRINCIPAL OCCUPATION DURING PAST
NAME AGE TITLE SINCE FIVE YEARS OR MORE
<S> <C> <C> <C> <C>
Ann O. Fusco............................ 43 Vice President June 1996 Ms. Fusco has been Vice President of
Oppenheimer Properties, Inc. since July
1986. Ms. Fusco first commenced
employment with Opco in April 1984.
Stephen M. McGrath, Sr.*................ 61 Vice President and June 1990 Mr. McGrath has been Executive Vice
Director President of Opco and director of its
Investment Banking Group since July
1985. He also served as President of
Oppenheimer Strategic Investments, Inc.
between May 1983 and April 1985. Mr.
McGrath was Senior Vice President of
Planning and Development at
Warner-Lambert until 1985 and has been a
director of Alliance Pharmaceutical
Corp. since June 1989. He also serves as
an executive officer and director of
certain current and/or former affiliates
of Opco.
Gerald A. Rothstein*.................... 55 Vice President April 1996 Mr. Rothstein has been a Managing
Director of Opco since 1983. He is
primarily responsible for the creation
of Opco's International research
department and focuses upon the emerging
markets of Latin America and India. Mr.
Rothstein has served on Opco's
Management Committee since 1983 and is
also a member of Opco's Commitment and
Due Diligence Committees.
</TABLE>
* Member of the Investment Committee. See " -- Terms of Proposed Contracts with
the Managing General Partner and Alsacia -- New Sub-Management Agreement" below.
CIBC Wood Gundy has advised the General Partners that it anticipates that
the foregoing persons will continue with MVH in their present or similar
capacities following the Acquisition.
COMPENSATION PAYABLE TO THE MANAGING GENERAL PARTNER. The compensation
payable to the Managing General Partner in connection with the operations of the
Partnership is comprised of the following amounts:
MANAGEMENT FEE. The Managing General Partner is entitled to a quarterly
management fee computed at the annual rate of two percent (2%) of the lesser of
(i) the capital originally contributed to the Partnership by the partners (net
of selling commissions and organizational expenses paid by the Partnership),
reduced by capital distributed to partners, or (ii) the Partnership's net asset
value. Further information concerning this fee is set forth below under
" -- Terms of Proposed Contracts with the Managing General Partner and
Alsacia -- New Management Agreement -- Management Fee."
VENTURE CAPITAL FEE. The Managing General Partner is entitled to a one-time
fee (the "Venture Capital Fee") equal to five percent (5%) of the gross proceeds
from the sale of Units. A pro rata portion of this fee becomes payable at the
time of each venture capital investment based upon the percentage of the
original net proceeds, available for investment, represented by such venture
capital investment. For the fiscal years ended December 31, 1996, 1995 and 1994,
the Venture Capital Fee incurred by the Partnership aggregated $12,000, $17,000
and $40,000, respectively.
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ANNUAL ALLOCATIONS. The profits and losses of the Partnership are
determined and allocated as of the end of, and within 75 days after the end of,
each fiscal year of the Partnership as follows:
The Partnership's net income and net realized gains from all sources,
including net income and gain, through the end of its most recent fiscal year is
allocated first to the Limited Partners (and to the Managing General Partner to
the extent of its capital contribution) until the partners have been allocated
an amount, which when added to amounts previously allocated to them from all
sources, equals a return of six percent (6%) per annum, simple interest, on
their total capital contributions reduced by previous distributions made to the
partners by the Partnership (the "Priority Return").
Net income and net realized gains derived from venture capital investments
and not allocated as part of the Priority Return is allocated to the Managing
General Partner until together with all such income and gains previously
allocated to the Managing General Partner (reduced by net realized losses of the
Partnership from its venture capital investments allocated to the Managing
General Partner, as described in the following paragraph) the Managing General
Partner has been allocated on a cumulative basis since inception of the
Partnership twenty percent (20%) of the Priority Return Excess (as defined
below) as of the end of the Partnership's most recent fiscal year (the "Venture
Capital Allocation"). The balance of such income and gain is allocated between
the Limited Partners and the Managing General Partner pro rata based upon their
respective capital contributions. The "Priority Return Excess" is equal at any
one time to the excess of (i) the net income and net gains derived from venture
capital investments realized by the Partnership on a cumulative basis since its
inception through the last day of the period for which the calculation is made
(reduced by net realized losses of the Partnership from its venture capital
investments) over (ii) an amount equal to the Priority Return as of such date
less the cumulative net income and gains of the Partnership through such date
from non-venture capital investments.
Net realized losses of the Partnership from its venture capital investments
are allocated first to the Managing General Partner until the cumulative amount
allocated to the Managing General Partner pursuant to the Venture Capital
Allocation over the life of the Partnership has been reduced to an amount equal
to twenty percent (20%) of the Priority Return Excess. Thereafter, such losses
are allocated between the Limited Partners and the Managing General Partner pro
rata in accordance with their respective capital contributions.
Net income and net realized gains or net realized losses for the year from
non-venture capital investments are allocated between the Limited Partners and
the Managing General Partner pro rata in accordance with their respective
capital contributions.
For the fiscal years ended December 31, 1996 and 1995, the Managing General
Partner was allocated $16,700 and $13,200, respectively, of the Partnership's
net increase in net assets from operations. For the fiscal year ended December
31, 1994, the Managing General Partner was allocated $38,700 of the
Partnership's net decrease in net assets from operations.
DISTRIBUTIONS. Other than distributions of cash (to the extent available)
to enable the Managing General Partner to discharge is estimated federal income
tax liabilities, no distributions may be made to the Managing General Partner
until the partners have received cash distributions equal to their respective
Priority Returns. After distributions to the partners equal such amount, the
Managing General Partner may be paid amounts allocated to it pursuant to the
Venture Capital Allocation in any particular year. Such payment, however, may
only be made to the extent that the cumulative amounts allocated to the Managing
General Partner through the end of the Partnership's most recent fiscal year
pursuant to the Venture Capital Allocation (reduced by previous payments) are in
excess of twenty percent (20%) of the net unrealized losses (I.E., the excess of
any unrealized losses over unrealized gain from all sources) of the Partnership
for the most recent fiscal year.
The Partnership did not make any cash distributions to the Managing General
Partner during the fiscal years ended December 31, 1996, 1995 and 1994. On
January 30, 1997, the Partnership made a cash distribution of $45,295 to the
Managing General Partner.
INFORMATION CONCERNING ALSACIA. Alsacia, a Delaware corporation, is
wholly-owned by Mr. Sommer. Alsacia maintains its principal office at 170 East
87th Street, Suite E-12-F, New York, New York 10128. Alsacia was formed for the
principal purpose of providing certain investment advisory services to the
Managing General Partner and the managing general partner of WVP 2. Alsacia has
served as sub-manager to the Managing General Partner and the managing general
partner of WVP 2 since July 1, 1996 and has engaged in no other activities. The
compensation arrangements between Alsacia and the managing general partner of
WVP 2 are identical in all material respects to those between Alsacia and the
Managing General Partner. See " -- Terms of Proposed Contracts with the Managing
General Partner and Alsacia -- New Sub-Management Agreement" below. Alsacia is
registered as an investment adviser under the Investment Advisers Act of 1940,
as amended.
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Mr. Sommer is the sole director, officer and stockholder of Alsacia. Mr.
Sommer's address is c/o Alsacia, 170 East 87th Street, Suite E-12-F, New York,
New York 10128. At August 29, 1997, Mr. Sommer was 45 years old. In addition to
his positions with Alsacia, Mr. Sommer is a Managing Director of BSW, Inc. and a
member of the Board of Directors of BSW, Inc. and two portfolio companies of WVP
2. Mr. Sommer has been involved in health care industry management for the past
18 years. From June 1990 until July 1996, Mr. Sommer served as an Executive Vice
President and a Managing Director of MVH. Mr. Sommer was a Managing Director of
MVP Holdings, Inc. from April 1987 to June 1990. From January 1982 to September
1986, Mr. Sommer was a Director of Business Development for Pfizer Hospital
Products Group ("HPG") and in such capacity was responsible for directing HPG's
merger and acquisition activities for medium to larger acquisitions, and for the
financial evaluation and valuation of all of HPG's acquisition, venture and
licensing projects.
TERMS OF PROPOSED CONTRACTS WITH THE MANAGING GENERAL PARTNER AND ALSACIA
NEW MANAGEMENT AGREEMENT. Under the New Management Agreement, subject to
the supervision of the Individual General Partners, the Managing General Partner
would continue to perform, or arrange for the performance of, the administrative
services necessary for the operation of the Partnership. The Managing General
Partner has arranged for Palmeri Fund Administrators, Inc. ("PFA") to provide
certain administrative services to the Partnership. PFA, which is compensated by
the Managing General Partner, assists the Managing General Partner in the
provision of, among other things, accounting, financial reporting and
maintenance of the accounts and data files of the Limited Partners. The address
of PFA is 700 Godwin Avenue, Suite 110, Midland Park, New Jersey 07432. The
Managing General Partner would also, subject to the overall supervision of the
Individual General Partners, continue to provide, or arrange for the provision
of, management and investment advisory services in connection with the
Partnership's venture capital investments and money market securities portfolio.
Furthermore, the Managing General Partner would continue to provide the
Partnership with office space, equipment and facilities and such other services
as the Managing General Partner, subject to review by the Individual General
Partners, from time to time determines to be necessary or useful to perform its
obligations under the New Management Agreement.
MANAGEMENT FEE. Pursuant to the New Management Agreement, the Partnership
would pay the Managing General Partner a management fee, payable quarterly,
calculated at the annual rate of two percent (2%) of the lesser of (i) the
capital originally contributed to the Partnership by the partners (net of
selling commissions and organizational expenses paid by the Partnership),
reduced by capital distributed to partners, or (ii) the Partnership's net asset
value. For purposes of calculating the management fee pursuant to clause (i) of
the immediately preceding sentence, the phrase "capital distributed to partners"
relates solely to distributions of capital originally contributed to the
Partnership by its partners and not to distributions of capital allocated to
partners as a function of the distribution of the profits and losses of the
Partnership. To the extent not paid in cash when due, the management fee would
accrue and interest thereon at the annual rate of ten percent (10%) would be
assessed. THE FEE PAYABLE BY THE PARTNERSHIP TO THE MANAGING GENERAL PARTNER
UNDER THE NEW MANAGEMENT AGREEMENT IS IDENTICAL TO THAT PAID BY THE PARTNERSHIP
TO THE MANAGING GENERAL PARTNER UNDER THE EXISTING MANAGEMENT AGREEMENT. As
described below, it is understood that the Managing General Partner proposes to
enter into the New Sub-Management Agreement, pursuant to which the Managing
General Partner would compensate Alsacia for certain management services out of,
among other things, the compensation that the Managing General Partner receives
under the New Management Agreement. For the fiscal years ended December 31,
1996, 1995 and 1994, the management fees payable by the Partnership to the
Managing General Partner aggregated $315,000, $268,000 and $361,000,
respectively.
PAYMENT OF EXPENSES. The New Management Agreement obligates the Managing
General Partner to continue to provide, or arrange for the provision of,
management and investment advisory services, to furnish the Partnership with
office space, equipment and facilities, and to pay the compensation of all
General Partners who are affiliated persons of the Managing General Partner. The
Managing General Partner would also continue to bear the administrative and
service expenses associated with managing the Partnership's assets, including
the expenses incurred in the management of the investments of the Partnership.
As is the case under the Existing Management Agreement, the New Management
Agreement generally provides for the payment by the Partnership of all other
expenses incurred in the operation of the Partnership, including, among other
things, expenses of portfolio transactions, valuation costs (including the
quarterly calculation of net asset value), expenses of printing certain reports
and other documents distributed to Limited Partners, Commission fees, interest,
taxes, fees and actual out-of-pocket expenses of General Partners who are not
affiliated persons of the Managing General Partner, fees for certain legal,
auditing and consulting services, litigation expenses, costs of printing proxies
and other expenses related to certain meetings of Limited Partners, and other
expenses properly payable by the Partnership.
NEW SUB-MANAGEMENT AGREEMENT. Under the New Sub-Management Agreement,
subject to the supervision and control of the Managing General Partner and
oversight of the Individual General Partners, Alsacia would continue to make
recommendations regarding the Partnership's venture capital investments and,
among other things, continue to assist the Managing
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General Partner in finding, evaluating, structuring, monitoring and liquidating
such investments. Alsacia would also continue to provide managerial assistance
to the Partnership's portfolio companies as requested by the Managing General
Partner. All recommendations made by Alsacia, including, without limitation,
those relating to portfolio company acquisitions and dispositions, would
continue to be subject to prior approval by the Managing General Partner's
Investment Committee, which is comprised of two officers of MVH. The Managing
General Partner would continue to have the sole authority to make decisions
concerning the Partnership's venture capital investments. The Managing General
Partner would also continue to have the sole authority for the management of the
Partnership's short-term investments.
For the services rendered under the New Sub-Management Agreement, the
Managing General Partner would pay to Alsacia a fee (the "Sub-Manager Management
Fee") equal to sixty-seven percent (67%) of the compensation (the "Managing
General Partner Fee") received by the Managing General Partner under the New
Management Agreement. Notwithstanding the foregoing, in no event would the
aggregate amount of the Sub-Manager Management Fee and the fee payable to the
Sub-Manager pursuant to its sub-management agreement (the "Other Agreement")
with the managing general partner of WVP 2 on account of any calendar quarter be
less than the lesser of (i) $37,500 or (ii) the aggregate amount of the Managing
General Partner Fee and the management fee payable to the managing general
partner of WVP 2 for such quarter. The Sub-Manager Management Fee would be paid
to Alsacia quarterly within five days after the payment by the Partnership of
the Managing General Partner Fee to the Managing General Partner. THE
SUB-MANAGER MANAGEMENT FEE PAYABLE BY THE MANAGING GENERAL PARTNER TO ALSACIA
UNDER THE NEW SUB-MANAGEMENT AGREEMENT IS IDENTICAL TO THAT PAID BY THE MANAGING
GENERAL PARTNER TO ALSACIA UNDER THE EXISTING SUB-MANAGEMENT AGREEMENT.
The Managing General Partner would also pay to Alsacia for services
rendered under the New Sub-Management Agreement a fee (the "Sub-Manager Venture
Capital Fee") equal to sixty-seven percent (67%) of the Venture Capital Fee
received from time to time by the Managing General Partner. The Sub-Manager
Venture Capital Fee would be paid to Alsacia within five days after the payment
by the Partnership of the Venture Capital Fee to the Managing General Partner.
THE SUB-MANAGER VENTURE CAPITAL FEE PAYABLE BY THE MANAGING GENERAL PARTNER TO
ALSACIA FOR SERVICES RENDERED UNDER THE NEW SUB-MANAGEMENT AGREEMENT IS
IDENTICAL TO THAT PAID BY THE MANAGING GENERAL PARTNER TO ALSACIA FOR SERVICES
RENDERED UNDER THE EXISTING SUB-MANAGEMENT AGREEMENT. Further information
concerning the Venture Capital Fee is set forth above under "Description of the
Proposed Arrangements with the Managing General Partner and
Alsacia -- Compensation Payable to the Managing General Partner."
DURATION AND TERMINATION OF THE NEW MANAGEMENT AGREEMENT AND NEW
SUB-MANAGEMENT AGREEMENT. If approved by Limited Partners at the Meeting, each
of the New Management Agreement and New Sub-Management Agreement would become
effective upon consummation of the Acquisition for an initial term of one year.
Each of the New Management Agreement and New Sub-Management Agreement would
continue in effect from year to year thereafter, provided that continuance is
approved at least annually by a 1940 Act Majority of Limited Partners or by the
General Partners, and that it is also approved, in either event, by a vote of a
majority of the Individual General Partners who are not "interested persons" (as
such term is defined in the 1940 Act) of the Partnership, cast in person at a
meeting called for the purpose of voting on the matter. The term provisions
contained in each of the New Management Agreement and New Sub-Management
Agreement will not affect the term of the Partnership which is scheduled to
expire on December 31, 1997. The agreements are not assignable and may be
terminated without penalty on 60 days' written notice at the option of either
party thereto or by the Individual General Partners or the vote of the holders
of a majority of Units.
BASIS FOR RECOMMENDATION BY THE INDIVIDUAL GENERAL PARTNERS
At a meeting held on August 11, 1997, the Individual General Partners
approved the terms and conditions of each of the New Management Agreement and
New Sub-Management Agreement and recommended that Limited Partners approve such
agreements. In approving the New Management Agreement and New Sub-Management
Agreement, the Individual General Partners reviewed, with the assistance of
legal counsel, the provisions of the 1940 Act relating to the approval of such
agreements and materials furnished by Opco and CIBC Wood Gundy. These materials
included information regarding CIBC Wood Gundy and its personnel, operations and
financial condition. Such information enabled the Individual General Partners to
evaluate such factors as CIBC Wood Gundy's experience in providing various
financial services to individuals and businesses, as well as its reputation,
integrity and financial responsibility and stability. The Individual General
Partners also reviewed, with the assistance of legal counsel, and discussed the
terms and conditions of each of the New Management Agreement and New
Sub-Management Agreement.
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The Individual General Partners gave primary consideration to three factors
which led them to believe that the management arrangements contemplated by
Proposals 1 and 2 are in the best interest of the Limited Partners and the
Partnership. Set forth below is a discussion of such factors.
CONTINUITY OF MANAGEMENT ARRANGEMENTS. The Individual General Partners
considered the fact that the New Management Agreement and New Sub-Management
Agreement would ensure continuity in the management services provided to the
Partnership. The Individual General Partners concluded that the needs of the
Partnership in connection with the expiration of its term on December 31, 1997
and subsequent dissolution would be best served through the provision of
management services by entities which have familiarity with the Partnership's
portfolio of venture capital investments. In reaching their conclusion, the
Individual General Partners were advised by CIBC Wood Gundy that it anticipates
maintaining the services currently provided by MVH to the Managing General
Partner.
EXPENSES PAYABLE BY THE PARTNERSHIP. The Individual General Partners
considered the fact that there would be no change in the rate of fees charged to
the Partnership for management, investment advisory and administrative services.
COMBINED RESOURCES AND CAPABILITIES. The Individual General Partners
considered that fact that, following the Acquisition, the Partnership would have
access to the combined resources and capabilities of CIBC Wood Gundy, Opco and
their respective affiliates.
THE GENERAL PARTNERS UNANIMOUSLY RECOMMEND THAT LIMITED PARTNERS VOTE TO APPROVE
THE NEW MANAGEMENT AGREEMENT AND NEW SUB-MANAGEMENT AGREEMENT.
ADDITIONAL INFORMATION
The expenses of the Meeting will be borne by CIBC Wood Gundy if the closing
of the Acquisition occurs, and otherwise by Opco or its affiliates.
Proxies may be solicited personally by officers and employees of Opco or
its affiliates, or by telephone or telegraph, in addition to the use of mails.
Brokerage houses, banks and other fiduciaries may be requested to forward proxy
solicitation material to their principals to obtain authorization for the
execution of proxies, and they will be reimbursed for such out-of-pocket
expenses. In addition, the Partnership has retained D.F. King & Co., Inc., a
proxy solicitation firm, to assist in the solicitation of the proxy vote. It is
anticipated that D.F. King & Co., Inc. will be paid for such solicitation
services in an amount not to exceed $4,500 plus reasonable out-of-pocket
expenses. Therefore, expenses of the Meeting will include costs of (i)
preparing, assembling and mailing material in connection with the solicitation;
(ii) soliciting proxies by officers or employees, personally or by telephone or
telegraph; (iii) reimbursing brokerage houses, banks and other fiduciaries and
(iv) compensating the proxy solicitor.
D.F. King & Co., Inc. may call Limited Partners to ask if they would be
willing to have their votes recorded by telephone. The telephone voting
procedure is designed to authenticate Limited Partners' identities, to allow
Limited Partners to authorize the voting of their Units in accordance with their
instructions and to confirm that their instructions have been recorded properly.
The Partnership has been advised by counsel that these procedures are consistent
with the requirements of applicable law. A Limited Partner voting by telephone
would be asked for his or her social security number or other identifying
information and would be given an opportunity to authorize proxies to vote his
or her Units in accordance with his or her instructions. To insure that the
Limited Partners' instructions have been recorded correctly, he or she will
receive a confirmation of such instruction in the mail. The confirmation is a
replica of the proxy card but with marks indicating how the Limited Partner
voted along with a special toll-free number which will be available in the event
the Limited Partner wishes to change or revoke the vote. Although a Limited
Partner's vote may be taken by telephone, each Limited Partner will receive a
copy of this proxy statement and may vote by mail using the enclosed proxy card.
If you have any questions or need assistance in voting, please contact D.F. King
& Co., Inc. at their toll-free number, 1-800-949-2583.
The Individual General Partners and the directors, officers and employees
of MVH do not beneficially own any Units. Mr. Sommer beneficially owns less than
one-tenth of one percent of the total Units outstanding.
The Partnership is not required to hold annual meetings and the General
Partners do not expect to call or to hold such meetings. Proposals which Limited
Partners wish to present for possible inclusion in a proxy statement and form of
proxy for consideration at the next meeting of Limited Partners, when and if
such meeting is called, must be received by the Partnership at its principal
executive offices in New York, New York within a reasonable time prior to the
giving of notice of such meeting.
By Order of the General Partners
THOMAS E. WHITE
A GENERAL PARTNER
Dated: August 29, 1997
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EXHIBIT A
MANAGEMENT AGREEMENT
Management Agreement ("Agreement") made as of , 1997 by and
between WESTMED VENTURE PARTNERS, L.P., a Delaware limited partnership (the
"Partnership"), and WESTMED VENTURE MANAGEMENT, L.P., a Delaware limited
partnership (the "Managing General Partner").
WITNESSETH:
WHEREAS, the Partnership is a limited partnership organized on February 5,
1987 under the Delaware Revised Uniform Limited Partnership Act pursuant to a
Certificate of Limited Partnership and is engaged in business as a business
development company under the Investment Company Act of 1940, as amended (the
"Investment Company Act");
WHEREAS, the Managing General Partner is the managing general partner of
the Partnership and is engaged principally in rendering management,
administrative and investment advisory services and is registered as an
investment adviser under the Investment Advisers Act of 1940, as amended;
WHEREAS, the Partnership desires to retain the Managing General Partner to
render management, administrative and investment advisory services to the
Partnership in the manner and on the terms hereinafter set forth; and
WHEREAS, the Managing General Partner is willing to provide management,
administrative and investment advisory services to the Partnership on the terms
and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Partnership and the Managing General Partner hereby
agree as follows:
ARTICLE I
DUTIES OF THE MANAGING GENERAL PARTNER
The Partnership hereby employs the Managing General Partner to act as the
managing general partner for the Partnership and to furnish, or arrange for the
furnishing of, the management, administrative and investment advisory services
described below, subject to the supervision of the individual general partners
of the Partnership (the "Individual General Partners"), for the period and on
the terms and conditions set forth in this Agreement. The Managing General
Partner hereby accepts such employment and agrees during such period, at its own
expense except as otherwise specifically provided in Article II(b) herein, to
render, or arrange for the rendering of, such services and to assume the
obligations herein set forth for the compensation provided for herein.
(A) GENERAL MANAGEMENT SERVICES. The Managing General Partner shall
perform, or arrange for the performance of, the management and administrative
services necessary for the operation of the Partnership. The Managing General
Partner shall also perform, or arrange for the provision of, services related to
administering limited partners' accounts and handling relations with limited
partners. The Managing General Partner shall provide the Partnership with office
space, equipment and facilities and such other services as the Managing General
Partner, subject to review by the Individual General Partners, shall from time
to time determine to be necessary or useful to perform its obligations under
this Agreement. The Managing General Partner shall also, on behalf of the
Partnership, conduct relations with custodians, depositories, transfer agents,
other shareholder service agents, accountants, attorneys, underwriters, brokers
and dealers, corporate fiduciaries, insurers, banks and such other persons in
any such other capacity deemed by it to be necessary or desirable. The Managing
General Partner shall make reports to the Individual General Partners of its
performance of obligations hereunder and shall furnish advice and
recommendations with respect to such other aspects of the business and affairs
of the Partnership as it shall determine to be desirable.
(B) INVESTMENT ADVISORY SERVICES WITH RESPECT TO VENTURE CAPITAL
INVESTMENTS. Pursuant to the Amended and Restated Agreement of Limited
Partnership of the Partnership dated as of July 2, 1987, as amended from time to
time (the "Partnership Agreement"), the Managing General Partner is responsible
for providing, or arranging for the provision of, investment advisory services
in connection with the Partnership's venture capital investments (the "Venture
Capital Investments"). The Managing General Partner will provide, or will
arrange for the provision of, management services pursuant to this Article I(b)
subject always to any restrictions of the Partnership Agreement, the provisions
of the Investment Company Act and the
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statements relating to the Partnership's investment objectives, investment
policies and investment restrictions as the same are set forth in the reports
filed by the Partnership under the Securities Exchange Act of 1934, as amended.
(C) INVESTMENT ADVISORY SERVICES WITH RESPECT TO OTHER INVESTMENTS. The
Managing General Partner shall provide, or arrange for the provision of,
investment advisory services in connection with the money market securities or
other non-venture capital investments held by the Partnership (the "Other
Investments"). The Managing General Partner shall provide the Partnership with
such investment research, advice and supervision as the latter may from time to
time consider necessary for the proper supervision of the Other Investments, and
shall furnish continuously an investment program for the Other Investments and
shall determine from time to time which securities shall be purchased, sold or
exchanged and what portion of the assets shall be held in the various money
market securities or cash, subject always to any restrictions of the Partnership
Agreement, the provisions of the Investment Company Act and the statements
relating to the Partnership's investment objectives, investment policies and
investment restrictions as the same are set forth in the reports filed by the
Partnership under the Securities Exchange Act of 1934, as amended. The Managing
General Partner shall also make determinations with respect to the manner in
which voting rights, rights to consent to corporate action and any other rights
pertaining to the Partnership's Other Investments shall be exercised. Should the
Individual General Partners at any time, however, make any determinations with
respect to a fixed investment policy and notify the Managing General Partner
thereof in writing, the Managing General Partner shall be bound by such
determination for the period, if any, specified in such notice or until
similarly notified that such determination has been revoked. The Managing
General Partner shall take, on behalf of the Partnership, all actions which it
deems necessary to implement the investment policies determined as provided
above, and in particular to place all orders for the purchase or sale of
portfolio securities with respect to the Other Investments for the Partnership's
account with brokers or dealers selected by it, and to that end, the Managing
General Partner is authorized as the agent of the Partnership to give
instructions to the custodian of the Partnership as to deliveries of securities
and payments of cash for the account of the Partnership. In connection with the
selection of such brokers or dealers and the placing of such orders with respect
to the Other Investments of the Partnership, the Managing General Partner is
directed at all times to seek to obtain execution and price within the policy
guidelines determined by the Individual General Partners. Subject to this
requirement and the provisions of the Investment Company Act, the Securities
Exchange Act of 1934, as amended, and other applicable provisions of law, the
Managing General Partner may select brokers or dealers with which it or the
Partnership is affiliated.
ARTICLE II
ALLOCATION OF CHARGES AND EXPENSES
(A) THE MANAGING GENERAL PARTNER. The Managing General Partner assumes and
shall pay for maintaining the staff and personnel necessary to perform its
obligations under this Agreement, and shall, at its own expense, provide the
Partnership with office space, facilities, equipment and personnel necessary to
carry out its obligations hereunder. The Managing General Partner will bear the
administrative and service expenses associated with the management of the
investments of the Partnership, which the Managing General Partner pursuant to
the terms of this Agreement is obligated to provide. The Managing General
Partner shall pay all compensation of general partners of the Partnership who
are affiliated persons of the Managing General Partner.
(B) THE PARTNERSHIP. The Partnership assumes and shall pay or cause to be
paid all other expenses of the Partnership not expressly assumed by the Managing
General Partner including, without limitation: expenses of portfolio
transactions, valuation costs (including the quarterly calculation of net asset
value), expenses of printing reports and other documents distributed to limited
partners, Securities and Exchange Commission fees, interest, taxes, fees and
actual out-of-pocket expenses of general partners of the Partnership who are not
affiliated persons of the Managing General Partner, fees for legal, auditing and
consulting services, litigation expenses, costs of printing proxies and other
expenses related to meetings of limited partners, and other expenses properly
payable by the Partnership.
ARTICLE III
COMPENSATION OF THE MANAGING GENERAL PARTNER
(A) MANAGEMENT FEE. For the services rendered, the facilities furnished and
the expenses assumed by the Managing General Partner, the Partnership shall pay
to the Managing General Partner compensation at the annual rate of two percent
(2%) of the lesser of (i) an amount equal to the aggregate of the capital
originally contributed to the Partnership by the partners (net of selling
commissions and organizational expenses which were paid by the Partnership),
reduced by distributions of such original capital to the partners, or (ii) the
net asset value of the Partnership determined in the manner as set forth
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in the prospectus for the Partnership. Such fee is payable quarterly. If the
Managing General Partner shall serve for less than the whole of any period
specified in this Article, the compensation paid to the Managing General Partner
shall be prorated. To the extent that the Partnership does not have cash or
readily marketable securities in an amount sufficient to pay the management fee,
the Partnership will accrue such fee as a liability and pay the accrued fee at
such time as it has sufficient cash available to it. Interest on the amount of
the accrued fee will be assessed at the annual rate of ten percent (10%).
(B) EXPENSE LIMITATIONS. In the event the operating expenses of the
Partnership, including amounts payable to the Managing General Partner pursuant
to Article III(a) hereof, for any fiscal year ending on a date on which this
Agreement is in effect exceed any expense limitations applicable to the
Partnership imposed by applicable state securities laws or regulations
thereunder, as such limitations may be raised or lowered from time to time, the
Managing General Partner shall reduce its management fee by the extent of such
excess and, if required pursuant to any such laws or regulations, will reimburse
the Partnership in the amount of such excess; PROVIDED, HOWEVER to the extent
permitted by law, there shall be excluded from such expenses the amount of any
interest, taxes, portfolio transaction costs and extraordinary expenses
(including, but not limited to, legal claims and liabilities and litigation
costs and any indemnification related thereto) paid or payable by the
Partnership. Whenever the expenses of the Partnership exceed a PRO RATA portion
of the applicable annual expense limitations, the estimated amount of
reimbursement under such limitations shall be applicable as an offset against
the quarterly payment of the fee due to the Managing General Partner. Should two
or more such expense limitations be applicable as at the end of the last
business day of the quarter, that expense limitation which results in the
largest reduction in the Managing General Partner's fee shall be applicable.
ARTICLE IV
SUB-MANAGEMENT AGREEMENT
It is understood that the Managing General Partner may enter into a
separate sub-management agreement, substantially in the form attached hereto as
Annex I (the "Sub-Management Agreement"), with Alsacia Venture Management Inc.,
a Delaware corporation ("Alsacia"), pursuant to which Alsacia will render
certain management services to the Managing General Partner in connection with
the Managing General Partner's duties and obligations hereunder regarding
Venture Capital Investments and receive from the Managing General Partner
compensation for its services out of, among other things, the compensation
received hereunder by the Managing General Partner pursuant to Article III.
ARTICLE V
LIMITATION OF LIABILITY OF THE MANAGING GENERAL PARTNER
As more fully described in paragraph 5.7 of the Partnership Agreement,
neither the Managing General Partner nor any of its Affiliates (as such term is
defined in the Partnership Agreement) shall be liable, responsible or
accountable in damages or otherwise for any loss or damage incurred by reason of
any act or omission performed or omitted by the Managing General Partner or such
Affiliate in good faith either on behalf of the Partnership or in furtherance of
the interests of the Partnership and in a manner reasonably believed by it to be
within the scope of authority granted to it by or pursuant to this Agreement, or
by the law or by the Consent (as such term is defined in the Partnership
Agreement) of the limited partners, provided that the Managing General Partner
or such Affiliate was not guilty of negligence, misconduct or any other breach
of fiduciary duty with respect to such acts or omissions.
ARTICLE VI
ACTIVITIES OF THE MANAGING GENERAL PARTNER
The services of the Managing General Partner are not deemed to be
exclusive, the Managing General Partner being free to render services to others.
It is understood that general partners and limited partners of the Partnership
are or may become interested in the Managing General Partner, as partners or
employees thereof or as directors, officers, employees or shareholders of any
partner of the Managing General Partner and that partners or employees of or
directors, officers, employees or shareholders of any partner of the Managing
General Partner are or may become interested in the Partnership as partners.
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ARTICLE VII
DURATION AND TERMINATION OF THIS CONTRACT
This Agreement shall become effective as of the date first above written
and shall remain in force for one year from the date hereof, and thereafter for
successive one year periods, but only so long as each such continuance is
specifically approved at least annually by (i) the Individual General Partners
of the Partnership, or by the vote of a majority of the outstanding voting
securities of the Partnership, and (ii) a majority of those General Partners who
are not parties to this Agreement or interested persons of any such party cast
in person at a meeting called for the purpose of voting on such approval.
This Agreement may be terminated at any time, without the payment of any
penalty, by the Individual General Partners or by vote of a majority of the
outstanding voting securities of the Partnership, or by the Managing General
Partner, in each case on sixty days' written notice to the non-terminating party
or parties to this Agreement. This Agreement shall automatically terminate in
the event of its assignment.
ARTICLE VIII
AMENDMENTS OF THIS AGREEMENT
This Agreement may be amended by the parties only if such amendment is
specifically approved in accordance with the provisions of the Investment
Company Act.
ARTICLE IX
DEFINITIONS OF CERTAIN TERMS
The terms "vote of a majority of the outstanding voting securities",
"assignment", "affiliated person" and "interested person", when used in this
Agreement, shall have the respective meanings specified in the Investment
Company Act.
ARTICLE X
GOVERNING LAW
This Agreement shall be construed in accordance with the laws of the State
of New York and the applicable provisions of the Investment Company Act. To the
extent that the applicable laws of the State of New York, or any of the
provisions herein, conflict with the applicable provisions of the Investment
Company Act, the latter shall control.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
WESTMED VENTURE PARTNERS, L.P.
By: WestMed Venture Management, L.P.
General Partner
By: Medical Venture Holdings, Inc.
General Partner
By:
Stephen M. McGrath
Vice President
WESTMED VENTURE MANAGEMENT, L.P.
By: Medical Venture Holdings, Inc.
General Partner
By:
Stephen M. McGrath
Vice President
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ANNEX I
SUB-MANAGEMENT AGREEMENT
Sub-Management Agreement ("Agreement") made as of , 1997 by and
between WestMed Venture Management, L.P., a Delaware limited partnership (the
"Managing General Partner") and Alsacia Venture Management Inc., a Delaware
corporation (the "Sub-Manager"). Capitalized terms used herein which are not
otherwise defined shall have the meaning ascribed to them in the Partnership
Agreement (as hereinafter defined).
WITNESSETH:
WHEREAS, WestMed Venture Partners, L.P., a Delaware limited partnership
(the "Partnership"), is a limited partnership organized on February 5, 1987
under the Delaware Revised Uniform Limited Partnership Act pursuant to a
Certificate of Limited Partnership and is engaged in business as a business
development company under the Investment Company Act of 1940, as amended (the
"Investment Company Act");
WHEREAS, the Managing General Partner is the managing general partner of
the Partnership and is responsible for providing, or for arranging for the
provision of, certain management services to the Partnership under an Amended
and Restated Agreement of Limited Partnership of the Partnership dated as of
July 2, 1987, as amended from time to time (the "Partnership Agreement");
WHEREAS, the Managing General Partner has entered into a Management
Agreement dated as of , 1997 (the "Management Agreement") with the
Partnership pursuant to which the Managing General Partner provides management
services to the Partnership;
WHEREAS, the Sub-Manager has been formed to engage principally in rendering
management services in the venture capital area and is registered as an
investment adviser under the Investment Advisers Act of 1940, as amended;
WHEREAS, the Managing General Partner desires to retain the Sub-Manager to
render certain management services to the Managing General Partner in connection
with the Managing General Partner's duties and obligations under the Management
Agreement regarding venture capital investments in the manner and on the terms
hereinafter set forth;
WHEREAS, in connection with the retention of the Sub-Manager by the
Managing General Partner to render the aforesaid management services, the
Managing General Partner will maintain its existing venture capital investment
committee (the "Investment Committee"); and
WHEREAS, the Sub-Manager is willing to provide such management services on
the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Managing General Partner and the Sub-Manager hereby
agree as follows:
ARTICLE I
DUTIES OF THE SUB-MANAGER
(A) GENERAL. The Managing General Partner hereby engages the Sub-Manager to
furnish the management services described below, subject to the supervision and
control of the Managing General Partner and oversight of the Individual General
Partners, for the period and on the terms and conditions set forth in this
Agreement. The Sub-Manager hereby accepts such engagement and agrees during such
period, at its own expense, except as provided in Article II of the Management
Agreement, to render such services and to assume the obligations herein set
forth for the compensation provided for herein. The Sub-Manager will deliver to
the Managing General Partner sufficient activity reports and other information
to enable the Managing General Partner and the Individual General Partners to
assess the adequacy of the management services provided by the Sub-Manager. The
Sub-Manager shall for all purposes herein be deemed to be an independent
contractor and shall, unless otherwise expressly provided or authorized, have no
authority to act for or represent the Individual General Partners, the Managing
General Partner or the Partnership in any way or otherwise be deemed an agent of
the Individual General Partners, the Managing General Partner or the
Partnership.
(B) MANAGEMENT SERVICES WITH RESPECT TO VENTURE CAPITAL INVESTMENTS.
Subject to the supervision and control of the Managing General Partner and
oversight of the Individual General Partners, the Sub-Manager will provide
management
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services in connection with the Partnership's venture capital investments (such
investments, which consist of all investments other than "Other Investments" as
defined in the Management Agreement, being referred to herein as the "Venture
Capital Investments"). In providing such services, the Sub-Manager shall make
recommendations regarding Venture Capital Investments and, among other things,
assist the Managing General Partner in finding, evaluating, structuring,
monitoring and liquidating such investments. The Sub-Manager shall also provide
managerial assistance to Venture Capital Investments as requested by the
Managing General Partner. The Sub-Manager shall have no authority to implement
any recommendation regarding Venture Capital Investments, including, without
limitation, those relating to the acquisition or disposition thereof, unless
such recommendation shall have been approved by the Investment Committee. The
Managing General Partner shall at all times have the sole authority to make
decisions concerning Venture Capital Investments. In addition to the foregoing
restrictions on its authority, the Sub-Manager will provide management services
pursuant to this Agreement subject always to any restrictions of the Partnership
Agreement, the provisions of the Investment Company Act and the statements
relating to the Partnership's investment objectives, investment policies and
investment restrictions as the same are set forth in the reports filed by the
Partnership under the Securities Exchange Act of 1934, as amended.
It is understood that the Managing General Partner performs, or arranges
for the provision of, certain administrative services to the Partnership. The
Sub-Manager shall use its best efforts to deliver to the Managing General
Partner, on a timely basis, all information necessary to enable the Managing
General Partner to provide, or arrange for the provision of, such administrative
services on a timely and efficient basis.
ARTICLE II
ALLOCATION OF CHARGES AND EXPENSES
The Sub-Manager assumes and shall pay for maintaining the staff, personnel,
office space, equipment and facilities and statistical and research services
necessary to perform, and assumes and shall pay all travel and entertainment
expenses incurred in connection with the performance of, its obligations under
this Agreement. The Sub-Manager shall not be required to incur any fees or
expenses relating to the retention of consultants and related persons for the
purpose of evaluating products or technology (including, without limitation,
patents and patentability issues) of any portfolio company or prospective
portfolio company of the Partnership. All such consulting fees and expenses
shall be payable by the Partnership or the Managing General Partner in a manner
consistent with prior practice.
ARTICLE III
COMPENSATION OF THE SUB-MANAGER
(A) SUB-MANAGER MANAGEMENT FEE. For the services rendered under this
Agreement, the Managing General Partner shall pay to the Sub-Manager a fee (the
"Sub-Manager Management Fee") equal to 67% of the compensation (the "WVM 1 Fee")
received by the Managing General Partner pursuant to Article III of the
Management Agreement. Notwithstanding the foregoing, in no event shall the
aggregate amount of the Sub-Manager Management Fee and the fee payable to the
Sub-Manager pursuant to Article III(a) of that certain sub-management agreement
of even date herewith (the "Other Agreement") by and between WestMed Venture
Management 2, L.P. and the Sub-Manager on account of any calendar quarter be
less than the lesser of (i) $37,500 or (ii) the aggregate amount of the (A) WVM
1 Fee payable for such quarter and (B) WVM 2 Fee (as such term is defined in the
Other Agreement) payable for such quarter. The Sub-Manager Management Fee is
payable quarterly to the Sub-Manager within five days after the payment by the
Partnership of the WVM 1 Fee to the Managing General Partner. If the Sub-Manager
shall serve for less than the whole of any period specified in this Article, the
Sub-Manager Management Fee shall be prorated.
(B) SUB-MANAGER VENTURE CAPITAL FEE. For the services rendered under this
Agreement, the Managing General Partner, in addition to the Sub-Manager
Management Fee, shall pay to the Sub-Manager a fee (the "Sub-Manager Venture
Capital Fee") equal to 67% of the compensation (the "Venture Capital Fee")
received by the Managing General Partner pursuant to paragraph 5.6.1 of the
Partnership Agreement. The Sub-Manager Venture Capital Fee is payable to the
Sub-Manager within five days after the payment by the Partnership of the Venture
Capital Fee to the Managing General Partner.
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<PAGE>
ARTICLE IV
LIMITATION OF LIABILITY OF THE SUB-MANAGER;
INDEMNIFICATION OF THE SUB-MANAGER
(A) LIMITATION OF LIABILITY. The Sub-Manager shall not be liable,
responsible or accountable in damages or otherwise for any loss or damage
incurred by reason of any act or omission performed or omitted by the
Sub-Manager in good faith either on behalf of the Partnership or in furtherance
of the interests of the Partnership and in a manner reasonably believed by it to
be within the scope of authority granted to it by this Agreement or by the law
or by the Consent of the Limited Partners, provided that the Sub-Manager was not
guilty of negligence, misconduct or any other breach of fiduciary duty with
respect to such acts or omissions. As used in this Article IV, the term
"Sub-Manager" shall include the Sub-Manager and directors, officers and
employees of the Sub-Manager.
(B) INDEMNIFICATION OF THE SUB-MANAGER BY THE PARTNERSHIP. The Partnership,
out of its assets, and not out of the assets of the General Partners, shall to
the fullest extent permitted by applicable law indemnify and hold harmless the
Sub-Manager in the event that the Sub-Manager was or is a party or is threatened
to be made a party to any threatened, pending or completed action, suit or
proceeding whether civil, criminal, administrative or investigative (including
any action by or in the right of the Partnership), by reason of any acts or
omissions or alleged acts or omissions arising out of the Sub-Manager's
activities as the Sub-Manager, if such activities were performed in good faith
on behalf of the General Partners and in furtherance of the interests of the
Partnership, and in a manner reasonably believed by the Sub-Manager to be within
the scope of the authority conferred by this Agreement or by law or by the
Consent of the Limited Partners, against losses, damages or expenses for which
the Sub-Manager has not otherwise been reimbursed (including attorneys' fees,
judgments, fines and amounts paid in settlement) actually and reasonably
incurred by the Sub-Manager in connection with such action, suit or proceeding,
so long as the Sub-Manager was not guilty of negligence, misconduct or any other
breach of fiduciary duty with respect to such acts or omissions and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
its conduct was unlawful, and provided that the satisfaction of any
indemnification and any holding harmless shall be from and limited to
Partnership assets and no Limited Partner shall have any personal liability on
account thereof. Notwithstanding the foregoing, absent a court determination
that the Sub-Manager was not liable on the merits or guilty of disabling conduct
within the meaning of Section 17(h) of the Investment Company Act, the decision
by the Partnership to indemnify the Sub-Manager must be based upon the
reasonable determination of independent counsel or non-party Independent General
Partners, after review of the facts, that such disabling conduct did not occur.
Expenses incurred in connection with the preparation and presentation of a
defense to any claim, action, suit, or proceeding of the character described
above shall be paid by the Partnership from time to time in advance prior to
final disposition thereof upon receipt of an undertaking by or on behalf of the
Sub-Manager that such amount will be paid over by it to the Partnership if it is
ultimately determined that the Sub-Manager is not entitled to indemnification
under this Article IV(b); PROVIDED, HOWEVER, that (i) the Sub-Manager provides
appropriate security for such undertaking, (ii) the Sub-Manager is insured
against losses arising out of any such advance payments, or (iii) either a
majority of the General Partners who are neither interested persons of the
Partnership nor parties to the matter, or independent legal counsel in a written
opinion, determine, based upon a review of readily available facts (as opposed
to a full trial-type inquiry), that there is reason to believe that the
Sub-Manager will be found entitled to indemnification under this Article IV(b).
ARTICLE V
ACTIVITIES OF THE SUB-MANAGER
The services of the Sub-Manager are not to be deemed to be exclusive, the
Sub-Manager and its directors, officers and employees each being free to render
services to others (including, without limitation, to one or more portfolio
companies of the Partnership) subject to the limitations contained in Article
I(a) hereof. Notwithstanding the foregoing, the Sub-Manager shall not provide
services to any portfolio company of the Partnership unless the Sub-Manager's
arrangements with such portfolio company are on terms and conditions
satisfactory to the Managing General Partner, in its sole and absolute
discretion, so as to ensure that, among other things, (i) the compensation
payable by such portfolio company to the Sub-Manager is for services separate
and apart from those provided by the Sub-Manager hereunder and (ii) such
portfolio company understands and agrees that the Sub-Manager in providing such
services is acting independently and not as an agent for the Partnership or the
Managing General Partner). The parties hereto hereby acknowledge that an
individual serving as an officer and director of one of the limited partners of
the Managing General Partner is interested in the Sub-Manager as a director,
officer, employee and shareholder.
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<PAGE>
ARTICLE VI
DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement shall become effective as of the date first above written
and shall remain in force for one year from the date hereof, and thereafter for
successive one year periods, but only so long as each such continuance is
specifically approved at least annually by (i) the Individual General Partners
of the Partnership, or by the vote of a majority of the outstanding voting
securities of the Partnership, and (ii) a majority of those General Partners who
are not parties to this Agreement or interested persons of any such party cast
in person at a meeting called for the purpose of voting on such approval.
This Agreement may be terminated at any time, without the payment of any
penalty, by the Individual General Partners or by vote of a majority of the
outstanding voting securities of the Partnership, or by the Sub-Manager, in each
case on sixty days' written notice to non-terminating parties to this Agreement.
This Agreement shall automatically terminate in the event of its assignment.
ARTICLE VII
AMENDMENTS OF THIS AGREEMENT
This Agreement may be amended by the parties only if such amendment is
specifically approved in accordance with the provisions of the Investment
Company Act.
ARTICLE VIII
DEFINITIONS OF CERTAIN TERMS
The terms "vote of a majority of the outstanding voting securities",
"assignment" and "interested person", when used in this Agreement, shall have
the respective meanings specified in the Investment Company Act.
ARTICLE IX
GOVERNING LAW
This Agreement shall be construed in accordance with the laws of the State
of New York and the applicable provisions of the Investment Company Act. To the
extent that the applicable laws of the State of New York, or any of the
provisions herein, conflict with the applicable provisions of the Investment
Company Act, the latter shall control.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
WESTMED VENTURE MANAGEMENT, L.P.
By: Medical Venture Holdings, Inc.
General Partner
By:
Name: Stephen M. McGrath
Title: Vice President
ALSACIA VENTURE MANAGEMENT INC.
By:
Name: Philippe L. Sommer
Title: President
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<PAGE>
The Partnership hereby agrees to be
bound by all of the terms and
conditions relating to and obligations
imposed upon the Partnership under
Articles II and IV of this Agreement as
if the Partnership were a named party
hereto.
WESTMED VENTURE PARTNERS, L.P.
By: WestMed Venture Management, L.P.
Managing General Partner
By: Medical Venture Holdings, Inc.
General Partner
By:
Name: Stephen M. McGrath
Title: Vice President
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<PAGE>
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WESTMED VENTURE PARTNERS, L.P.
SPECIAL MEETING OF LIMITED PARTNERS -- SEPTEMBER 30, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE GENERAL PARTNERS
The undersigned hereby appoints Thomas E. White, Robert A. Blum, Philippe L.
Sommer and Daniel A. Etna, and each of them, attorneys and proxies for the
undersigned, with full power of substitution and revocation, to represent the
undersigned at the Special Meeting of Limited Partners of WestMed Venture
Partners, L.P. to be held at Oppenheimer Tower, 200 Liberty Street, One World
Financial Center, New York, New York on the 40th Floor on Tuesday, September 30,
1997, at 1:00 p.m., New York time, and at any adjournments thereof, upon the
matters set forth in the Notice of Meeting and Proxy Statement dated August ,
1997, and upon all other matters properly coming before said Meeting.
Please indicate your vote by an "X" in the appropriate boxes below. This
proxy, if properly executed, will be voted in the manner directed by the Limited
Partner. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND
2. Please refer to the Proxy Statement for a discussion of the Proposals.
HAS YOUR ADDRESS CHANGED?
THE GENERAL PARTNERS RECOMMEND A VOTE "FOR" PROPOSALS 1 AND 2.
1. THE APPROVAL OF A NEW MANAGEMENT AGREEMENT BETWEEN WESTMED VENTURE
MANAGEMENT, L.P. AND WESTMED VENTURE PARTNERS, L.P.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued, and to be signed and dated, on the reverse side)
<PAGE>
2. THE APPROVAL OF A NEW SUB-MANAGEMENT AGREEMENT BETWEEN WESTMED VENTURE
MANAGEMENT, L.P. AND ALSACIA VENTURE MANAGEMENT INC.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. THE PROXIES ARE AUTHORIZED TO VOTE IN THEIR DISCRETION ON ANY OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT
THEREOF.
I WILL ATTEND THE MEETING. [ ] CHANGE OF ADDRESS MARK HERE [ ]
Note: Please sign exactly as name
appears on this Proxy. Joint owners
should each sign personally. When
signing as attorney, executor,
administrator, trustee, guardian or
corporate officer, please give your
full title.
Signature
Signature
Date: , 1997
VOTES MUST BE INDICATED (X) IN BLACK
OR BLUE INK. [x]
PLEASE SIGN, DATE AND RETURN THE PROXY PROMPTLY USING THE ENCLOSED ENVELOPE.
<PAGE>
