SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
Westford Technology Ventures, L.P.
(Name of Registrant as Specified in Its Charter)
Westford Technology Ventures, L.P.
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(j)(2) or Item
22(a)(2) of Schedule 14A. [ ] $500 per each party to the controversy pursuant to
Exchange Act Rule 14a-6(i)(3). [ ] 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: not
applicable
(2) Aggregate number of securities to which transactions applies: not
applicable
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: not applicable
(4) Proposed maximum aggregate value of transaction: not applicable
[ ] 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: not applicable
(2) Form, Schedule or Registration Statement No.: not applicable
(3) Filing party: not applicable
(4) Date filed: not applicable
Dear Limited Partner:
You are asked to consider and act on a proposal with respect to the
requirement to hold annual meetings of Limited Partners.
The Partnership Agreement presently requires the Partnership to hold
annual meetings of Limited Partners for the purpose of voting upon the election
of General Partners, as well as any other matters requiring the consent of all
or any of the Limited Partners. It is proposed that the Partnership Agreement be
amended to eliminate the requirement to hold annual meetings of Limited
Partners.
Attendance by Limited Partners at the annual meetings has been minimal.
Only one Limited Partner has ever attended any of the past six annual meetings
of Limited Partners. In addition, the Individual General Partners believe that,
in light of the stage of the Partnership's operations, the costs which would be
incurred in connection with future annual meetings of Limited Partners may
outweigh the benefits thereof.
The proposed amendment does not affect the right of the Individual
General Partners or the Limited Partners to call special meetings of Limited
Partners in accordance with the terms of the Partnership Agreement. Following
approval of this change, you will continue to receive annual and quarterly
reports on the status of the Partnership.
This letter is not intended to replace the enclosed Proxy Statement,
which should be read in its entirety.
Your vote is very important, and we ask that you promptly return the
proxy card in the enclosed envelope.
Jeffrey T. Hamilton
General Partner
WESTFORD TECHNOLOGY VENTURES, L.P.
17 Academy Street, 5th Floor, Newark, New Jersey 07102
Notice of 1995 Annual Meeting of Limited Partners
June 16, 1995
The Annual Meeting of Limited Partners of Westford Technology Ventures, L.P.
(the "Partnership") will be held at the offices of Testa, Hurwitz & Thibeault,
53 State Street, Boston, Massachusetts on Friday, June 16, 1995, at 10:00 a.m.
for the following purposes:
ITEM 1. To elect four Individual General Partners to serve for the
ensuing year.
ITEM 2. To elect one Managing General Partner to serve for the ensuing
year.
ITEM 3. To approve the terms and continuance of the Management
Agreement, dated February 28, 1991, by and between the Partnership and Hamilton
Capital Management Inc., as amended by Amendment No. 1 dated March 30, 1993.
ITEM 4. To ratify the selection of BDO Seidman as the independent
public accountants to be employed by the Partnership for the year ending
December 31, 1995, as set forth in the accompanying Proxy Statement.
ITEM 5. To consider and act on a proposal to amend Paragraph 11.4.1 of
the Amended and Restated Agreement of Limited Partnership (the "Partnership
Agreement") with respect to the requirement to hold annual meetings of Limited
Partners.
ITEM 6. To transact such other business as may properly come before the
meeting and any adjournments thereof.
The General Partners recommend that you
vote in favor of all items.
Only Limited Partners of record on April 18, 1995 will be entitled to
vote at the Annual Meeting or any adjournment thereof.
By Order of the Individual General Partners
JEFFREY T. HAMILTON
Individual General Partner
Newark, New Jersey
Dated: April 20, 1995
YOUR VOTE IS IMPORTANT. We would appreciate your promptly voting, signing and
returning the enclosed proxy, which will help in avoiding the additional expense
of a second solicitation. The enclosed addressed envelope requires no postage
and is intended for your convenience.
<PAGE>
PROXY STATEMENT
WESTFORD TECHNOLOGY VENTURES, L.P.
17 Academy Street, 5th Floor, Newark, New Jersey 07102
1995 Annual Meeting of Limited Partners
June 16, 1995
INTRODUCTION
Westford Technology Ventures, L.P. (the "Partnership") is a limited
partnership organized under Delaware law on September 3, 1987. The Partnership,
a business development company under the Investment Company Act of 1940 (the
"1940 Act"), commenced operations on November 30, 1988 following the initial
closing of its public offering of units of limited partnership interest
("Units"). The initial closing was for 10,013 Units aggregating $10,013,000. A
subsequent closing on subscriptions received by the Partnership on or before
December 31, 1988 was held on January 17, 1989 for an additional 1,204 Units.
The Partnership is managed by five General Partners, consisting of four
Individual General Partners and the Managing General Partner.
This Proxy Statement is furnished in connection with the solicitation
of proxies by and on behalf of the General Partners of the Partnership to be
used at the Annual Meeting of Limited Partners (the "Annual Meeting") to be held
at the offices of Testa, Hurwitz & Thibeault, 53 State Street, Boston,
Massachusetts, on June 16, 1995, for the purposes set forth in the accompanying
Notice. If the enclosed form of proxy is executed and returned, it may
nevertheless be revoked prior to its exercise by a signed writing filed with
Hamilton Capital Management Inc., 17 Academy Street, 5th Floor, Newark, New
Jersey 07102, or delivered at the Annual Meeting. On April 18, 1995, there were
outstanding 11,217 Units of the Partnership. To the knowledge of the
Partnership, no person owned beneficially more than 5% of its outstanding Units
at such date. Limited Partners of record at the close of business on April 18,
1995 will be entitled to one vote for each Unit held.
The mailing address of the Partnership is 17 Academy Street, 5th Floor,
Newark, New Jersey 07102. Solicitation of proxies is being made by the mailing
of this Notice and Proxy Statement with its enclosures on or about April 20,
1995.
<PAGE>
The representation in person or by proxy of at least a majority of the
outstanding Units entitled to vote at the Annual Meeting is necessary to
establish a quorum for the transaction of business. Votes withheld from any
nominee, abstentions and broker non-votes are counted as present or represented
for purposes of determining the presence or absence of a quorum. The Individual
General Partners and Managing General Partner are elected by plurality of the
votes cast by Limited Partners entitled to vote at the Meeting. Units
represented by proxies which are marked "withhold authority" will have no effect
on the outcome of the vote for election of Individual General Partners and the
Managing General Partner. Approval of other matters requires the affirmative
vote of the majority of Units present in person or represented by proxy at the
Annual Meeting. Only Units that are voted in favor of a particular proposal will
be counted toward achievement of a majority.
Abstentions have the same effect as votes against the proposal.
The Individual General Partners of the Partnership know of no business
other than that mentioned in Items 1 through 5 of the Notice of Annual Meeting
that will be presented for consideration at the Annual 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.
Election of General Partners. The five General Partners of the
Partnership, who are elected annually by the Limited Partners, are responsible
for the management and administration of the Partnership. The General Partners
consist of four Individual General Partners and the Managing General Partner. 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 1988, the Securities and Exchange Commission issued an order declaring that
three of the Individual General Partners of the Partnership are not "interested
persons" of the Partnership as defined in the 1940 Act solely by reason of their
being general partners of the Partnership.
The Individual General Partners have full authority over the management
of the Partnership and provide overall guidance and supervision with respect to
the operations of the Partnership and perform the various duties imposed on the
directors 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 and supervise the
activities of the Managing General Partner.
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
investments 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.
<PAGE>
Item 1 - Election of Individual General Partners
At the Annual Meeting, four Individual General Partners will be elected
to serve until the next Annual Meeting of Limited Partners and until their
successors are duly elected and qualified. It is intended that proxies not
limited to the contrary will be voted in favor of the following nominees, each
of whom became a General Partner prior to the date of effectiveness of the
Partnership's registration statement on May 12, 1988: Robert S. Ames, Alfred M.
Bertocchi, Jeffrey T. Hamilton and George M. Weimer.
Each nominee has consented to serve as an Individual General Partner.
The Individual General Partners of the Partnership know of no reason why any of
these nominees will be unable to serve, but in the event of any such
unavailability, the proxies received will be voted for such substitute nominees
as the Individual General Partners may recommend.
The following table presents certain information regarding the
aforementioned nominees, including their principal occupations during the past
five years. An asterisk beside a General Partner's name indicates that he is an
"interested person," as defined in the 1940 Act, of both the Partnership and the
Partnership's investment adviser.
<TABLE>
Name, Age, Position with Partnership, Units of Partnership Owned
Principal Occupation and Other First Became a Beneficially as of March 31,
Directorships(1) General Partner 1995(2) Percent of Class(3)
<S> <C> <C> <C> <C>
JEFFREY T. HAMILTON, *57, General 1988 0 0
Partner, Hamilton Capital Management
Inc., President and Director since
August 1987; Euclid Partners, General
Partner, September 1983-August 1987
ROBERT S. AMES, 76, General Partner; 1988 10 Less than 1%
Executive Vice-President for Aerospace
(Retired), Textron, Inc.
ALFRED M. BERTOCCHI, 67, General 1988 0 0
Partner; Senior Vice-President, Finance
and Administration (Retired), Digital
Equipment Corporation; Adaptive
Software, Director
GEORGE M. WEIMER, 76, General Partner; 1988 0 0
Senior Vice-President of Administration
(Retired), Merck Sharp & Dohme
International; Unigene Laboratories,
Inc., Director
All Individual General Partners as a 10 Less than 1%
Group
</TABLE>
- ----------
(1) Directorships include all directorships of companies required to report
to the Securities and Exchange Commission (i.e., "public companies") or
registered investment companies other than those administered or advised
by the Partnership's investment adviser.
(2) Numbers include, where applicable, Units owned by a nominee's spouse or
minor children or Units which were otherwise reported by the nominee as
"beneficially owned" in the light of pertinent Securities and Exchange
Commission rules.
(3) Percentage of Units outstanding on March 31, 1995. All Units are held
with sole voting and investment power, except to the extent that such
powers may be shared by a family member or a Trustee of a family trust.
The Partnership pays each non-interested Individual General Partner an
annual fee of $10,000 in quarterly installments plus $1,000 per meeting of the
Individual General Partners attended and pays all non-interested Individual
General Partners actual out-of-pocket expenses relating to attendance at
meetings. For the period from January 1, 1994 to December 31, 1994, the
non-interested Individual General Partners of the Partnership as a group
received compensation in the amount of $42,000. Mr. Hamilton receives no
compensation in his capacity as an Individual General Partner of the
Partnership.
The Individual General Partners of the Partnership met five times
during its last fiscal year. Each Individual General Partner nominated for
election attended all of the meetings. The General Partners have not created a
Nominating Committee, a Compensation Committee or an Audit Committee.
The Partnership considers one of its Individual General Partners, Mr.
Hamilton, to be an "interested person" of the Partnership and the Partnership's
investment adviser within the meaning of Section 2(a)(19) of the 1940 Act.
Section 2(a)(19) of the 1940 Act provides that a person is an "interested
person" of an investment company or an investment adviser if that person is an
"affiliated person" of such entity. Section 2(a)(3) of the 1940 Act provides
that a person is an affiliated person of an entity if such person is an officer,
director or partner of such entity. Accordingly, Mr. Hamilton is deemed to be an
"interested person" of the Partnership by virtue of his status as a general
partner of the Partnership and of the Management Company by virtue of his status
as president and a director of the Management Company.
The Partnership's Amended and Restated Agreement of Limited Partnership
(the "Partnership Agreement") provides that the Partnership will, out of its own
assets and without any individual liability of its Limited Partners, indemnify
its General Partners to the fullest extent permitted by law against liabilities
and expenses incurred in connection with litigation in which they may be
involved because of their offices with the Partnership if their actions were
performed in good faith in the best interests of the Partnership and were within
the scope of authority conferred by the Partnership Agreement and, with respect
to criminal proceedings, they had no reasonable cause to believe their conduct
was unlawful, unless their actions constitute bad faith, misfeasance,
negligence, misconduct or any other breach of fiduciary duty. In the case of a
settlement, such indemnification will not be provided unless it has been
determined by a majority of non-party Independent General Partners, based on the
determination of independent counsel in a written opinion and after a review of
the facts, that bad faith, misfeasance, negligence, misconduct or any other
breach of fiduciary duty did not occur.
The Partnership Agreement further provides that neither the Managing
General Partner, any controlling person of the Managing General Partner or any
of its affiliates nor any person acting as a broker-dealer in connection with
the offering of Units shall be indemnified by the Partnership for any losses,
liabilities or expenses arising from or out of an alleged violation of federal
or state securities laws unless (a) both (i)(A) there has been a successful
adjudication on the merits of each count involving alleged securities violations
as to a particular indemnity or (B) such claims have been dismissed with
prejudice on the merits by a court of competent jurisdiction as to a particular
indemnity and (ii) a court shall have approved indemnification of the litigation
costs or (b) a court of competent jurisdiction approves the settlement of the
claims against a particular indemnity and finds that indemnification of the
settlement and related costs should be made.
The Individual General Partners unanimously recommend a vote in favor of all
nominees listed above.
Item 2 - Election of Managing General Partner
At the Annual Meeting, a Managing General Partner will be elected to
serve until the next Annual Meeting of Limited Partners and until its successor
is elected and qualified. It is intended that proxies not limited to the
contrary will be voted in favor of the election of WTVI Co., L.P., the Managing
General Partner, which is discussed below. The nominee discussed below has
consented to serve as Managing General Partner.
The Managing General Partner is a limited partnership organized on
September 3, 1987 under the laws of the State of Delaware. The Managing General
Partner maintains its principal office at 17 Academy Street, 5th Floor, Newark,
New Jersey 07102. The Managing General Partner has acted as the managing general
partner of the Partnership since September 3, 1987. The Managing General Partner
is engaged in no other activities as of the date of this proxy statement.
The general partner of the Managing General Partner is the Management Company,
and the limited partners of the Managing General Partner include Jeffrey T.
Hamilton and Susan J. Trammell. Carl H. Janzen and Frederick H. Fruitman are
retired limited partners of the Managing General Partner. Information concerning
the Management Company and Ms. Trammell is set forth below under "Approval or
Disapproval of the Management Agreement." Information concerning Mr. Hamilton is
set forth above under "Individual General Partners."
The Partnership Agreement provides that 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. The Managing General Partner is authorized to make all decisions
regarding the Partnership's venture capital investment portfolio and, among
other things, to find, evaluate, structure, monitor and liquidate such
investments and provide, or arrange for the provision of, managerial assistance
to the portfolio companies in which the Partnership invests.
The Partnership Agreement obligates the Managing General Partner to
contribute cash to the capital of the Partnership so that the Managing General
Partner's capital contribution at all times will be equal to one percent (1%) of
the aggregate capital contributions of all partners of the Partnership. The
Managing General Partner has contributed $112,170 to the capital of the
Partnership.
The profits and losses of the Partnership are determined and allocated
as of the end of and within sixty days after the end of each fiscal year. The
Managing General Partner is allocated, on a cumulative basis (i.e., the
aggregate amounts of all gains and losses and not each gain or loss from each
individual investment) over the life of the Partnership (10 years plus up to two
extensions of two years each), an amount equal to 20% of the excess of the
Partnership's income and gains from venture capital investments ("Portfolio
Profits") over the Partnership's losses on such investments ("Portfolio
Losses"). The balance of the Portfolio Profits and Portfolio Losses of the
Partnership, and all other Partnership income, gains and losses ("Non-Portfolio
Income and Losses") generally will be allocated to all of the partners of the
Partnership (the "Partners") (including the Managing General Partner) in
proportion to their capital contributions. The allocation of 20% of gains to the
Managing General Partner applies only to Portfolio Gains because the Managing
General Partner is only responsible for managing and controlling the venture
capital investments of the Partnership and is not responsible for the money
market investments. (As used in the description of the allocation and
distribution provisions of the Partnership Agreement, a limited partner's
capital contribution with respect to a Unit is equal to the contribution of the
original purchaser of such Unit, regardless of whether such limited partner is
the original purchaser.) Since the Managing General Partner will have
contributed 1% of Partnership capital, its share of Non-Portfolio Income and
Losses, and its share of the ongoing administrative expenses of the Partnership,
which, over time, could represent a significant cost to the Partnership, is
limited to 1%. The Managing General Partner's share of Portfolio Losses, to the
extent they exceed Portfolio Gains, is also limited to 1%.
The 1940 Act requires that compensation based on the performance of
investments must take into account the unrealized capital depreciation of the
investments on which such compensation is based. The Managing General Partner's
distribution formula takes into account unrealized depreciation in the
Partnership's assets by (1) providing that the Managing General Partner may not
receive any distributions with respect to its 20% "carried interest" in the
excess of the Partnership's Portfolio Profits over Portfolio Losses until it is
certain that the Partnership will have cumulative Net Portfolio Profits (which
will be the case only at such time as each Partner has received aggregate
distributions equal in amount to his capital contribution), and (2) ensuring,
through the allocation and distribution provisions of the Partnership Agreement,
that on liquidation of the Partnership: (a) any unrealized gains and losses of
the Partnership will be treated as having been realized and will be allocated to
the capital accounts of the Partners; (b) the Managing General Partner will have
a deficit in its capital account equal to the amount, if any, by which the
aggregate distributions received by the Managing General Partner from the
Partnership exceed the sum of its 1% share of Partnership distributions
attributable to the Managing General Partner's contributed capital and 20% of
the cumulative Portfolio Profits of the Partnership over the term of the
Partnership reduced by 20% of the cumulative Portfolio Losses of the Partnership
over that period; and (c) the Managing General Partner is required to contribute
additional capital to the Partnership in an amount equal to any deficit in the
Managing General Partner's capital account at that time.
It should be noted that the foregoing allocation of Portfolio Profits
to the Managing General Partner has been included in the Partnership Agreement
exclusively on the basis of an opinion of legal counsel to the Partnership that
such allocation would not violate the provisions of Section 205 of the
Investment Advisers Act of 1940 (the "Advisers Act"). The Partnership has not
requested that the Securities and Exchange Commission review or approve such
opinion letter and the Commission expresses no opinion as to counsel's
interpretation that Section 205 of the Advisers Act permits the aforementioned
allocation.
Distributions made prior to the termination of the Partnership will be
made solely in proportion to capital contributions until distributions in cash
or securities (valued at the date of distribution) equal to $1,000 per Unit have
been made. Thereafter, distributions will be made to the Partners in proportion
to the positive balances in their capital accounts. Pursuant to these
provisions, the Managing General Partner may receive distributions during the
life of the Partnership, even if the Partnership terminates with a net loss.
However, if the Partnership terminates with a net loss, it will not have
sufficient funds available to distribute to each partner an amount equal to his
capital contribution. Therefore, if the Partnership incurs a net loss on a
cumulative basis over its term, the Managing General Partner will be entitled to
receive distributions only on the same terms as the Limited Partners (i.e.,
based on its contribution of 1% of the capital of the Partnership).
The Managing General Partner may be removed from the Partnership by (i)
a majority of the Individual General Partners of the Partnership, (ii) failure
to be re-elected by the Limited Partners (at the conclusion of the Managing
General Partner's term) or (iii) the consent of a majority in interest of the
Limited Partners (at any time during the Managing General Partner's term). The
Partnership Agreement provides that, subject to the receipt of an exemptive
order from the Securities and Exchange Commission, the Managing General Partner
would receive a final allocation of profits and losses of the Partnership under
the terms and conditions set forth therein in the event of removal from the
Partnership. The Advisers Act prohibits compensation based on the performance of
investments, such as a percentage of the increase in value of such investments,
if that compensation is based on unrealized gains. The purpose of the exemptive
order regarding final allocations and distributions to removed Managing General
Partners would be to allow unrealized gains to be included in such final
allocation and distribution in recognition of the efforts made by the removed
Managing General Partner in selecting investments which have appreciated in
value. The Partnership has not sought and is not currently seeking such an
order, and there is no guarantee that, if the Partnership requested such an
order, that such an order would be granted by the Commission.
The Partnership Agreement provides that if the exemptive order were
granted, in the event of the removal of the Managing General Partner and the
continuation of the Partnership, the venture capital investments of the
Partnership at the time of removal will be appraised by two independent
appraisers, one selected by the removed Managing General Partner and one
selected by the non-interested General Partners. The cost of the appraisal
conducted by the appraiser selected by the removed Managing General Partner will
be borne by the removed Managing General Partner and the cost of the appraisal
conducted by the appraiser selected by the non-interested General Partners will
be borne by the Partnership. In the event such two appraisers are unable to
agree on the value of the Partnership's venture capital investment portfolio,
they shall jointly appoint a third independent appraiser whose determinations
shall be final and binding. The cost of the appraisal conducted by the third
appraiser should one be selected shall be divided equally between the
Partnership and the removed Managing General Partner. All unrealized gains and
losses of the Partnership are deemed realized at that time for purposes of
making a final allocation to the Managing General Partner. The removed Managing
General Partner shall receive an allocation of capital gains and losses equal to
the profits and losses that it would have been allocated pursuant to the
Partnership Agreement if all unrealized capital gains and losses were deemed
realized, an allocation of profits and losses were made at such time, and such
time were deemed to be the end of a fiscal year. If the capital account of the
removed Managing General Partner has a positive capital balance after such final
allocation, the Partnership will deliver a promissory note of the Partnership to
the removed Managing General Partner, the principal amount of which shall be
equal to the amount, if any, by which the positive balance in the removed
Managing General Partner's capital account exceeds its capital contribution to
the Partnership, and which bears a rate per annum equal to 100% of the prime
rate in effect at Citibank, N.A. at the time of removal, with interest payable
annually and principal payable, if at all, from 20% of any available cash before
any distributions thereof are made to the partners. If the capital account of
the removed Managing General Partner has a negative balance after such final
allocation, the Managing General Partner shall contribute cash to the capital of
the Partnership in an amount equal to the negative balance in its capital
account. The interest of the removed Managing General Partner shall then convert
to that of a limited partner.
In the event that such exemptive order is not granted in the form
applied for by the Partnership, the removed Managing General Partner shall not
receive a final allocation of profits and losses, its interest shall convert to
that of a limited partner, and the removed Managing General Partner shall
continue to receive allocations of profits and losses as a limited partner,
based on its contribution of 1% of the capital of the Partnership.
The Individual General Partners unanimously recommend a vote in favor of the
election of WTVI Co., L.P. as Managing General Partner.
Item 3 - Approval or Disapproval of the Management Agreement
It is intended that proxies not limited to the contrary will be voted
in favor of approving the terms and continuance of the Management Agreement
dated February 28, 1991, as amended by Amendment No. 1 dated March 30, 1993, by
and between the Partnership and Hamilton Capital Management Inc. (the
"Management Company"), a copy of which is attached as Exhibit A to this Proxy
Statement. The Management Company is a Delaware corporation with offices at 17
Academy Street, 5th Floor, Newark, New Jersey 07102 and is wholly owned by
Jeffrey T. Hamilton, one of the Individual General Partners. The balance sheet
of the Management Company as of December 31, 1994 is attached as Exhibit B to
this Proxy Statement. The Management Company has served as the management
company for the Partnership since the Partnership's registration statement
became effective on May 12, 1988.
At their meeting held on December 4, 1990, the Individual General
Partners of the Partnership, including the Individual General Partners who are
not interested persons of the Partnership, approved the Management Agreement. In
their consideration of this matter, the Individual General Partners received
information relating to, among other things, alternatives to the Management
Company arrangements, the nature, quality, and extent of the management and
administrative services offered to the Partnership by the Management Company and
its affiliates, the projected profitability of the Management Company for
providing such services, the percentage of time to be devoted by employees of
the Management Company to Partnership matters and comprehensive data with
respect to the management fees paid by other venture capital partnerships. The
Individual General Partners were not represented by separate counsel in
connection with their review of the management arrangements of the Partnership.
At their meeting held on March 29, 1995, the Individual General
Partners of the Partnership, including the Individual General Partners who are
not interested persons of the Partnership, approved the continuance of the
Management Agreement, as amended. In approving the Management Agreement, the
Individual General Partners considered the above-cited factors in light of the
performance of the Management Company since the Partnership commenced
operations. The Individual General Partners were not represented by separate
counsel in connection with their review of the management arrangements of the
Partnership for the purpose of voting on the approval of the Amendment and the
continuance of the Management Agreement.
The following table sets forth information concerning the directors of
the Management Company and the officers of the Management Company involved in
the Partnership. Information regarding Jeffrey T. Hamilton, the President,
Secretary, sole stockholder and a director of the Management Company, is set
forth under "Election of Individual General Partners."
<PAGE>
<TABLE>
Name, Age, Position with First Became an Units of Partnership Owned
Management, Principal Occupation and Officer or Beneficially as of March 31,
Other Directorships(1) Director 1995(2) Percent of Class(3)
<S> <C> <C> <C> <C>
L. LOUISE HAMILTON, 54, Director; 1991 0 0
Travel Consultant (April
1984-Present)(2)
SUSAN J. TRAMMELL, 39, Treasurer and 1991 3 Less than 1%
Director; Associate, Westford
Technology Ventures, L.P.; Research
Assistant, Adler & Company (May
1984-February 1989)
</TABLE>
(1) Directorships including directorships of companies required to report to
the Securities and Exchange Commission (i.e., "public companies") or
registered investment companies other than those administered or advised
by the Partnership's investment adviser.
(2) Ms. Hamilton is married to Mr. Hamilton.
The Management Company performs management and administrative services
for the Partnership pursuant to the Management Agreement. Subject to the
supervision of the Individual General Partners, the Management Company performs,
or arranges for others to perform, the management and administrative services
necessary for the operation of the Partnership, with the exception of the
management of the venture capital investments which is the responsibility of the
Managing General Partner. The Management Company is responsible for the
management of the Partnership's money market securities portfolio. The
Management Company also provides the Partnership, at the Management Company's
expense, with office space, facilities, equipment and personnel necessary to
carry out the Management Company's obligations under such agreement and such
other services as the Management Company, subject to supervision by the
Individual General Partners, deems to be appropriate.
For the services provided by the Management Company under the
Management Agreement, the Partnership pays the Management Company a fee computed
quarterly and paid monthly in an annual amount equal to 2.5% of capital
contributions to the Partnership, net of selling commissions and organizational
expenses paid by the Partnership and reduced by capital distributions and
realized losses. The minimum fee is $200,000 per year. For the period from
January 1, 1994 to December 31, 1994, the Partnership had investment income of
$95,000 and paid the Management Company advisory fees in the amount of $226,000.
This advisory fee constituted 2.5% of the aggregate capital contributions of
$10,150,471 (net of selling commissions and organizational expenses) which the
Partnership received on November 30, 1988 and January 17, 1989.
The Management Company pays the compensation of Mr. Hamilton, the
General Partner who is affiliated with the Management Company. The Management
Company also furnishes at its own expense all necessary administrative services
including office space, equipment, clerical personnel, investment advisory
facilities and all executive and supervisory personnel necessary for managing
the Partnership's investments, effecting the Partnership's portfolio
transactions and, in general, administering its affairs.
The Partnership pays the compensation of the three General Partners who
are not affiliated with the Management Company and all the Partnership's
expenses (other than those assumed by the Management Company), including
governmental fees, interest charges, taxes, fees and expenses of independent
auditors or legal counsel, and of any transfer agent, registrar or distribution
disbursing agent of the Partnership, expenses of servicing Limited Partner
accounts, expenses of preparing, printing and mailing certificates, Limited
Partner reports, notices, proxy statements and reports to governmental officers
and commissions, brokerage and other expenses connected with the execution,
recording and settlement of portfolio security transactions, insurance premiums,
fees and expenses of the Partnership's custodian for all services to the
Partnership, including safekeeping of funds and securities and maintaining
required books and accounts, expenses of calculating the net asset value of the
Partnership's interests, expenses of Limited Partner meetings, and Securities
and Exchange Commission registration fees.
The Management Agreement provides that neither the Management Company
nor its personnel shall be liable for any error of judgment or mistake of law or
for any loss arising out of any investment or for any act or omission in the
management of the Partnership, except for negligence or misconduct in the
performance of its or their duties or by reason of reckless disregard of its or
their obligations and duties under the Management Agreement.
If approved by vote of a majority of the Partnership's outstanding
Units, the Management Agreement will remain in effect until December 31, 1996,
and will continue in effect thereafter only if such continuance is specifically
approved at least annually by the General Partners or by vote of a majority of
the Partnership's outstanding Units and, in either case, by a majority of the
General Partners who are not parties to the Management Agreement or interested
persons of any such party. The Management Agreement terminates automatically if
it is assigned and may be terminated without penalty by vote of a majority of
the Partnership's outstanding voting securities or by either party on 60 days'
written notice.
The General Partners Unanimously Recommend that the Limited Partners
Approve the Terms and Continuance of the Management Agreement, as amended. In so
doing, the Individual General Partners who are not "interested persons" (as that
term is defined in the 1940 Act) have acted in what they believe to be the best
interests of the Limited Partners of the Partnership.
As provided under the 1940 Act, approval of the Management Agreement by
the Limited Partners will require the vote of a majority of the outstanding
Units of the Partnership. Under Section 2(a)(42) of the 1940 Act, the "vote of a
majority of the outstanding Units of the Partnership" means the vote, at a
meeting of the Limited Partners of the Partnership duly called, of 67 percent or
more of the Units present at such meeting, if the holders of more than 50
percent of the outstanding Units of the Partnership are present or represented
by proxy, or of more than 50 percent of the outstanding Units of the
Partnership, whichever is less.
Item 4 - Ratification or Rejection of Selection of Accountants
It is intended that proxies not limited to the contrary will be voted
in favor of ratifying the selection, by a majority of the General Partners who
are not "interested persons" (as that term is defined in the 1940 Act) of the
Partnership, of BDO Seidman under Section 32(a) of the 1940 Act as independent
public accountants to certify every financial statement of the Partnership
required by any law or regulation to be certified by independent public
accountants and filed with the Securities and Exchange Commission in respect of
all or any part of the fiscal year ending December 31, 1995. BDO Seidman has no
direct or indirect interest in the Partnership.
On September 12, 1994, the Partnership received a letter from Deloitte & Touche
LLP confirming that the client-auditor relationship between them had ceased. The
principal reason for terminating the relationship was that the relatively small
size of the Partnership had made it increasingly difficult for Deloitte & Touche
LLP to serve as auditor on a cost-effective basis. The Deloitte & Touche LLP
reports on the financial statements of the Partnership for the years ended
December 31, 1993 and 1992 did not contain an adverse opinion or a disclaimer of
opinion, nor were such reports qualified or modified as to uncertainty, audit
scope, or accounting principles.
During the two years ended December 31, 1993 and through September 12, 1994, the
date the relationship ceased, there were no "disagreements" between the
Partnership and Deloitte & Touche LLP or "reportable events" as defined in Item
304 of Regulation S-K.
On December 1, 1994, the Partnership appointed BDO Seidman as independent
accountants of the Partnership, commencing with the year ending December 31,
1994. A representative of BDO Seidman is not expected to be available at the
Annual Meeting.
Item 5 - To consider and act on a proposal to amend Paragraph 11.4.1 of the
Amended and Restated Agreement of Limited Partnership (the "Partnership
Agreement") with respect to the requirement to hold annual meetings of Limited
Partners.
The Individual General Partners recommend the approval by the Limited Partners
of the proposed amendment to the Partnership Agreement described below.
Paragraph 11.4.1 of the Partnership Agreement presently requires the Partnership
to hold annual meetings of Limited Partners for the purpose of voting upon the
election of General Partners, as well as any other matters requiring the consent
of all or any of the Limited Partners. The Partnership has held such annual
meetings each year since the Partnership commenced operations in 1988. However,
since the Partnership is now in its later years of operations, as described
further below, the Individual General Partners believe that the costs expected
to be incurred in connection with future annual meetings of Limited Partners
outweighs the benefits thereof. Thus, Paragraph 11.4.1 is proposed to be amended
in order to eliminate the requirement to hold annual meetings of Limited
Partners unless such meetings are otherwise required by the 1940 Act, or any
rule, regulation or order thereunder or other applicable law. The proposed
amendment does not affect the right of the Individual General Partners or the
Limited Partners to call special meetings of Limited Partners in accordance with
the terms of the Partnership Agreement.
The Partnership is entering the eighth year of its expected ten year term. From
the commencement of operations to December 31, 1994, the Partnership invested an
aggregate of approximately $9.2 million in eight venture capital investments.
The term of the Partnership may be extended for up to two additional two year
periods, if such extensions are determined by the Individual General Partners to
be in the Partnership's best interest.
Costs incurred in connection with annual meetings of Limited Partners include
printing expenses, legal fees and postage. It is estimated that the elimination
of the annual meeting of Limited Partners will save the Partnership more than
$5,000 per year. In addition, although the number of Limited Partners that
returned proxies was sufficient to hold valid meetings for each of the past
annual meetings, attendance by Limited Partners at the meetings has been
minimal. Only one Limited Partner (other than Individual General Partners and
affiliates of the Management Company who own Units) has ever attended any of the
past five annual meetings of Limited Partners.
If the proposal to amend the Partnership Agreement as provided herein is
approved, certain matters which have been submitted for a vote of Limited
Partners in connection with annual meetings of Limited Partners will no longer
be subject to the approval of Limited Partners. In the event future annual
meetings of Limited Partners are not held, the Managing General Partner and each
of the Individual General Partners will serve until such General Partner
withdraws or resigns, or is removed or incapacitated. In addition, to the extent
future meetings of Limited Partners are not held, the Individual General
Partners, including a majority of the Independent General Partners, will approve
the continuance of the Management Agreement and the appointment of the
independent public accountants for the Partnership without the approval of the
Limited Partners.
If approved by the Limited Partners, revised Paragraph 11.4.1 will provide as
follows (with changes in italics):
"11.4.1. Action by the General Partners and Limited Partners may be
taken at a meeting of the General Partners or Limited Partners. To the extent
required by the 1940 Act, or any rule, regulation or order thereunder or other
applicable law, the Individual General Partners shall call annual meetings of
Limited Partners for the purpose of voting upon the election of General
Partners, at which meetings any other matter requiring the Consent of all or any
of the Limited Partners pursuant to this Agreement may be acted upon.
Notification of such a meeting of the Partners shall be given by the Individual
General Partners at least 30 days before such meeting. Any such notice shall
state briefly the purpose, time and place of the meeting. All such meetings
shall be held within or outside the State of Delaware at such reasonable place
as the Individual General Partners shall designate and during normal business
hours. In the event the Individual General Partners are not required by the 1940
Act or other applicable law to call any future annual meetings of Limited
Partners, notwithstanding any provisions herein to the contrary, each of the
General Partners will serve until the incapacity of such General Partner or
until such General Partner withdraws, retires or is removed. In addition,
notwithstanding any provisions herein to the contrary, in the event the
Individual General Partners are not required by the 1940 Act or other applicable
law to call any future annual meetings of Limited Partners, (i) the continuance
of a management agreement with the Management Company for the management of the
business and operation of the Partnership and (ii) the appointment of the
independent certified public accountants for the Partnership, by the Individual
General Partners, including a majority of the Independent General Partners, in
the name of and on behalf of the Partnership, shall not be subject to the
approval of the Limited Partners."
As provided in Paragraphs 10.2.1 and 11.4.3 of the Partnership Agreement,
approval of the proposal to amend Paragraph 11.4.1 of the Partnership Agreement
at the Annual Meeting will require the vote of the lesser of (i) 67% of the
outstanding Units of the Partnership represented at the Annual Meeting, if more
than 50% of the outstanding Units of the Partnership are represented at the
Annual Meeting, or (ii) over 50% of the outstanding Units of the Partnership.
Portfolio Transactions
Subject to policy established by the Individual General Partners, the
Managing General Partner is responsible for the management of the Partnership's
venture capital investments. The investments which the Partnership holds have
typically been acquired in private transactions negotiated directly with the
portfolio company or an affiliate thereof. The Managing General Partner was
responsible for conducting the negotiations with respect thereto on behalf of
the Partnership.
In executing transactions in publicly-traded securities held by the
Partnership, the Managing General Partner seeks to obtain the best results for
the Partnership, taking into account such factors as price (including the
applicable brokerage commission or dealer spread), size of order, difficulty of
execution and operational facilities of the firm involved and the firm's risk in
positioning a block of securities. While the Partnership generally seeks
reasonably competitive commission rates, the Partnership does not necessarily
pay the lowest commission or spread available.
The Partnership has no obligation to deal with any broker in the
execution of transactions relating to its portfolio securities. For the year
ended December 31, 1994, the Partnership paid no brokerage commissions. Brokers
and dealers who provide supplemental investment research to the Managing General
Partner may receive orders for transactions by the Partnership.
The Management Company is responsible for the management of the
Partnership's short-term investments. In placing orders for money market
securities, it is the policy of the Management Company to obtain the best net
result taking into account such factors as price (including the applicable
dealer spread), the size, type and difficulty of the transaction involved, the
firm's general execution and operational facilities, and the firm's risk in
positioning the securities. While the Management Company generally seeks
reasonably competitive spreads or commissions, the Partnership will not
necessarily be paying the lowest spread or commission available. Affiliates of
the Partnership may not serve as the Partnership's dealer in connection with
such transactions.
Manner of Voting Proxies
All proxies received by the General Partners will be voted on all
matters presented at the Annual Meeting, and if not limited to the contrary,
will be voted for the named nominees (if still available for election) and for
Items 3, 4 and 5.
The General Partners know of no other matters to be brought before the
Annual Meeting. If, however, because of any unexpected occurrence, any nominee
is not available for election or if any other matters properly come before the
Annual Meeting, it is the intention of the General Partners that proxies not
limited to the contrary will be voted in accordance with the judgment of persons
named in the enclosed form of proxy.
Proposals of Limited Partners
If the proposal to amend the Partnership Agreement to eliminate the
requirement to hold annual meetings of Limited Partners is not approved,
proposals of Limited Partners intended to be presented at the next annual
meeting of Limited Partners of the Partnership, if any, must be received by the
Partnership for inclusion in its proxy statement and form of proxy relating to
that meeting by January 8, 1996. If the proposal to amend the Partnership
Agreement to eliminate the requirement to hold annual meetings of Limited
Partners is approved, it is expected that there will be no subsequent annual
meeting of Limited Partners. However, the proposed amendment will not affect the
right of Limited Partners to call special meetings of Limited Partners in
accordance with the terms of the Partnership Agreement.
Additional Information
To obtain the necessary representation at the Annual Meeting,
supplementary solicitations may be made by mail, telephone, or interview by
General Partners of the Partnership and employees of the Management Company. It
is anticipated that the total cost of any such supplementary solicitations,
would be nominal.
The expense of supplementary solicitations as well as the preparation,
printing and mailing of the enclosed form of proxy, and this Notice and Proxy
Statement, will be borne by the Partnership.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY
April 18, 1995
<PAGE>
EXHIBIT A
MANAGEMENT AGREEMENT
AGREEMENT made this 28th day of February, 1991 by and between WESTFORD
TECHNOLOGY VENTURES, L.P. a Delaware limited partnership (hereinafter referred
to as the "Partnership"), and HAMILTON CAPITAL MANAGEMENT INC., a Delaware
corporation (hereinafter referred to as the "Management Company").
W I T N E S S E T H:
WHEREAS, the Partnership is a limited partnership organized on
September 3, 1987 under The Delaware Revised Uniform Limited Partnership Act
pursuant to an Amended and Restated Certificate of Limited Partnership with WTVI
Co., L.P., a Delaware limited partnership, acting as Managing General Partner
(the "Managing General Partner"), and is engaged in business as a business
development company under the Investment Company Act of 1940, as amended
(hereinafter referred to as the "Investment Company Act"); and
WHEREAS, the Management Company is engaged principally in rendering
management, administrative and investment advisory services in the venture
capital area and is registered as an investment adviser under the Investment
Advisers Act of 1940; and
WHEREAS, the Partnership desires to retain the Management Company to
render management, administrative and certain investment advisory services to
the Partnership in the manner and on the terms hereinafter set forth; and
WHEREAS, the Management Company 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 Management Company hereby agree
as follows:
ARTICLE I
Duties of the Management Company
The Partnership hereby employs the Management Company to act as the
Management Company for the Partnership and to furnish, or arrange for affiliates
to furnish, the management, administrative and investment advisory services
described below, subject to the supervision of the Individual General Partners
of the Partnership, for the period and on the terms and conditions set forth in
this Agreement. The Management Company hereby accepts such employment and agrees
during such period, at its own expense, to render, or arrange for the rendering
of, such services and to assume the obligations herein set forth for the
compensation provided for herein. The Management Company and its affiliates
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 Partnership in any way or otherwise be deemed an agent
of the Partnership.
(a) Management Services. The Management Company shall perform (or
arrange for the performance of) the management and administrative services
necessary for the operation of the Partnership, including providing managerial
assistance to portfolio companies of the Partnership and such other services
related to venture capital investments as shall be requested by the Managing
General Partner. The Management Company shall also perform services related to
administering limited partners' accounts and handling relations with limited
partners. The Management Company shall provide the Partnership with office
space, equipment and facilities and such other services as the Management
Company, 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 Management Company 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 to be necessary or desirable. The Management Company
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. Pursuant to the Amended and Restated
Agreement of Limited Partnership of the Partnership (the "Partnership
Agreement"), the Managing General Partner is responsible for providing
investment advisory services in connection with the Partnership's venture
capital investments. The Management Company shall be responsible for providing
investment advisory services in connection with the money market securities held
by the Partnership (such investments being referred to herein as the "Other
Investments"). The Management Company 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 as amended from time to time, 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 Management Company 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
Management Company thereof in writing, the Management Company 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 Management
Company 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 Management Company
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 Management Company 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 Management Company may select
brokers or dealers with which it or the Partnership is affiliated.
<PAGE>
ARTICLE II
Allocation of Charges and Expenses
(a) The Management Company. The Management Company assumes and shall
pay for maintaining the staff and personnel necessary to perform its obligations
under this Agreement and the obligations of the Managing General Partner under
the Partnership 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 Management Company will 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, which the Management Company is obligated to provide under Article
I hereof and which the Managing General Partner is obligated to provide under
Article Five of the Partnership Agreement. The Management Company shall pay all
compensation of General Partners of the Partnership who are affiliated persons
of the Management Company. To the extent that the Partnership provides its own
office space, the expenses associated therewith shall be offset against the
management fee payable to the Management Company pursuant to Article III hereof.
(b) The Partnership. The Partnership assumes and shall pay or cause to
be paid all other expenses of the Partnership including, without limitation:
expenses of portfolio transactions, expenses of registering shares under Federal
and state securities laws, 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 who
are not affiliated persons of the Management Company, 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 Management Company
(a) Management Fee. For the services rendered, the facilities furnished
and the expenses assumed by the Management Company, the Partnership shall pay to
the Management Company a fee at the annual rate of 2.5% of the amount of the
Partners' capital contributions (net of selling commissions and organizational
expenses paid by the Partnership), reduced by capital distributed to the
Partners and realized capital losses; provided, however, that there shall be a
minimum fee of $200,000 for any calendar year in which this Agreement is in
effect. Such quarterly fee is payable to the Management Company as promptly as
possible after completion of the calculation of the adjustments described in the
preceding sentence and the computations contemplated by subsection (b) hereof.
Subject to subsection (b), if the fee otherwise payable with respect to any
calendar year is less than $200,000, the difference between the fee calculated
on the basis of capital contributions and $200,000 shall be promptly paid to the
Management Company after the end of such year.
(b) Expense Limitations. In the event the operating expenses of the
Partnership, including amounts payable to the Management Company pursuant to
subsection (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
Management Company 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 Management Company. 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
Management Company's fee shall be applicable.
ARTICLE IV
Limitation of Liability of the Management Company
The Management Company shall not be liable for any error of judgment or
mistake of law or for any loss arising out of any investment or for any act or
omission in the management of the Partnership, except for negligence or
misconduct in the performance of its duties, or by reason of reckless disregard
of its obligations and duties hereunder. As used in this Article IV, the term
"Management Company" shall include any affiliates of the Management Company
performing services for the Partnership contemplated hereby and directors,
officers and employees of any such affiliates.
ARTICLE V
Activities of the Management Company
The services of the Management Company of the Partnership are not to be
deemed to be exclusive, the Management Company 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 Management Company, as
directors, officers, employees and shareholders or otherwise and that directors,
officers, employees and shareholders of the Management Company are or may become
interested in the Partnership as general partners, limited partners or
otherwise, and that the Management Company and its directors, officers,
employees and shareholders may become interested in the Partnership as general
partners, limited partners or otherwise.
ARTICLE VI
Duration and Termination of this Contract
This Agreement shall become effective as of the date first above
written and shall remain in force until December 31, 1991 and thereafter, but
only so long as 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 of the Partnership or by vote of
a majority of the outstanding voting securities of the Partnership, or by the
Management Company, on sixty days' written notice to the other party. 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 by (i) the Individual General Partners of the Partnership,
or by the vote of a majority of 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.
ARTICLE VIII
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 IX
Governing Law
This Agreement shall be construed in accordance with 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.
WESTFORD TECHNOLOGY VENTURES, L.P.
By: _____________________________
Individual General Partner
HAMILTON CAPITAL MANAGEMENT INC.
By: _____________________________
President
<PAGE>
AMENDMENT NO. 1 TO MANAGEMENT AGREEMENT
Amendment No. 1 dated as of this 30th day of March, 1993 by and between WESTFORD
TECHNOLOGY VENTURES, L.P. a Delaware limited partnership (hereinafter referred
to as the "Partnership"), and HAMILTON CAPITAL MANAGEMENT INC., a Delaware
corporation (hereinafter referred to as the "Management Company").
W I T N E S S E T H:
WHEREAS, the Partnership and the Management Company are parties to a
Management Agreement dated as of February 28, 1991 (the "Management Agreement");
and
WHEREAS, the parties desire to amend Article III(a) of the Management
Agreement;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Partnership and Management Company hereby agree as
follows:
1. Article III (a) of the Management Agreement is hereby amended and restated
so that as amended and restated it reads as follows:
(a) Management Fee. For the services rendered, the facilities furnished
and the expenses assumed by the Management Company, the Partnership shall pay to
the Management Company a fee at the annual rate of 2.5% of the amount of the
Partners' capital contributions (net of selling commissions and organizational
expenses paid by the Partnership), reduced by capital distributed to the
partners and realized capital losses; provided, however, that there shall be a
minimum fee of $200,000 for any calendar year in which this Agreement is in
effect. Such fee is calculated quarterly. Payment of the fee is made to the
Management Company monthly in arrears.
2. Except as amended hereby, the Management Agreement remains in full force
and effect.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
WESTFORD TECHNOLOGY VENTURES, L.P.
By:
Individual General Partner
HAMILTON CAPITAL MANAGEMENT INC.
By:
President
<PAGE>
EXHIBIT B
HAMILTON CAPITAL MANAGEMENT INC.
BALANCE SHEETS
(unaudited)
<TABLE>
ASSETS DECEMBER 31,
1994 1993
-------------- --------------
<S> <C> <C>
Cash and cash equivalents $ 576,669 $ 595,215
Due From Affiliates:
WTVI Co., L.P. 250 250
Westford Technology Ventures, L.P. - 8,500
Other receivables 4,354 922
Prepaid expenses 2,551 2,551
Investment in WTVI Co., L.P. 101,517 112,986
Property and equipment, at cost, net of $320 of
accumulated depreciation 1,269 1,269
----- -----
TOTAL ASSETS $ 686,610 $ 721,693
= ======= = =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 80,000 $ 70,103
Due To Affiliates:
WTVI Co., L.P. 6,250 6,250
Common stock, $.01 par value,
1,000 shares authorized,
issued and outstanding 10 10
Additional paid-in-capital 971,347 971,347
Accumulated deficit (370,997) (326,017)
-------- --------
600,360 645,340
------- -------
TOTAL LIABILITIES AND
STOCKHOLDERS EQUITY $ 686,610 $ 721,693
= ======= = =======
</TABLE>
<PAGE>
HAMILTON CAPITAL MANAGEMENT INC.
NOTES TO FINANCIAL STATEMENT
December 31, 1994
NOTE A - NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
Hamilton Capital Management Inc. (herein referred to as the "Management
Company") is the general partner and a limited partner in WTVI Co., L.P. (herein
referred to as the "Managing General Partner").
The Managing General Partner has a 1% general partnership interest in Westford
Technology Ventures, L.P. (the "Partnership"). The Partnership seeks long-term
capital investments in new and developing companies and other special
investments.
The Management Company acts as management for the Partnership and provides
administrative and investment advisory services, subject to the supervision of
the Individual General Partners of the Partnership. This involves providing the
Partnership with office space, equipment and facilities, as well as conducting
relations with third parties such as accountants, attorneys and investors.
Investment in Partnership Interests of WTVI Co., L.P.
The Management Company is accounting for its 55% general partnership interest
and 7.5% limited partnership interest in WTVI Co., L.P., its owned affiliate, by
the equity method of accounting under which the net income or loss of the
affiliate is added to or deducted from the investment account and distributions
received from the affiliate are treated as reductions of the investment
accounts. The financial statement presentation of accounting for this investment
by the equity method is not materially different than if consolidated financial
statements of the Management Company and its affiliate had been presented.
Cash and Cash Equivalents
Cash and cash equivalents includes all checking and money market fund accounts.
Income Taxes
The Management Company has elected under the Internal Revenue Code to be treated
as an S-Corporation. S-Corporations are generally not subject to corporate
income taxes as the shareholders recognize the tax effects of the Company's
operations on their individual returns. Accordingly, no liability for income
taxes has been included in the balance sheet at December 31, 1994.
<PAGE>
Related Party Agreement
The Management Company provides the management and administrative services
necessary for the operation of the Partnership and receives an annual fee of
2.5% of the amount of the Partners' capital contributions (net of selling
commissions and organizational expenses paid by the Partnership) reduced by
capital distributed and realized capital losses. Such fee is payable monthly and
shall be a minimum of $200,000 per annum. There are no unpaid management fees at
December 31, 1994.
NOTE B - INVESTMENT IN WTVI CO., L.P.
WTVI Co., L.P. accounts for its 1% managing general partnership interest in
Westford Technology Ventures, L.P. by the equity method.
The Partnership Agreement of Westford Technology Ventures, L.P. provides that
the Managing General Partner will be allocated, on a cumulative basis over the
life of the Partnership, 20% of the aggregate of the Partnership's net
investment income and net realized gains from venture capital investments,
provided that such amount is positive. All other income, gains and losses of the
Partnership are allocated among all the Partners in proportion to their
respective capital contributions to the Partnership.
WESTFORD TECHNOLOGY VENTURES, L.P.
17 Academy Street
5th Floor
Newark, NJ 07102
THIS PROXY IS SOLICITED ON BEHALF OF THE
INDIVIDUAL GENERAL PARTNERS
The undersigned hereby appoints Jeffrey T. Hamilton and Susan J. Trammell as
Proxies, each with the power to appoint his or her substitute, and hereby
authorizes them to represent and to vote, as designated herein, all Units of
limited partnership interest of WESTFORD TECHNOLOGY VENTURES, L.P. (the
"Partnership") held of record by the undersigned on April 18, 1995 at the annual
meeting of the limited partners of the Partnership to be held on June 16, 1995
or any adjournment thereof.
This Proxy when properly executed will be voted in the manner directed herein by
the undersigned limited partner. If no direction is made, this Proxy will be
voted for Proposals 1, 2, 3, 4 and 5.
The representation in person or by proxy of at least a majority of the
outstanding Units entitled to vote at the Annual Meeting is necessary to
establish a quorum for the transaction of business. Votes withheld from any
nominee, abstentions and broker non-votes are counted as present or represented
for purposes of determining the presence or absence of a quorum. The Individual
General Partners and Managing General Partner are elected by plurality of the
votes cast by Limited Partners entitled to vote at the Meeting. Units
represented by proxies which are marked "withhold authority" will have no effect
on the outcome of the vote for election of Individual General Partners and the
Managing General partner. Approval of the proposed amendment to the Partnership
Agreement requires the vote of the lesser of (i) 67% of the outstanding Units of
the Partnership represented at the Annual Meeting, if more than 50% of the
outstanding Units of the Partnership are represented at the Annual Meeting, or
(ii) over 50% of the outstanding Units of the Partnership. Approval of other
matters requires the affirmative vote of the majority of Units present in person
or represented by proxy at the Annual Meeting. Only Units that are voted in
favor of a particular proposal will be counted toward achievement of a majority.
Abstentions have the same effect as votes against the proposal.
<TABLE>
<S> <C> <C> <C>
1. ELECTION OF INDIVIDUAL _ FOR the nominees _ WITHHOLD
GENERAL PARTNERS \_\ listed below. \_\ vote for the nominees
listed below.
Nominees: Jeffrey T. Hamilton, Robert S. Ames, Alfred M. Bertocchi, George M. Weimer
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, write that nominee's name in the space provided
below.)
------------------------------------------------------------
2. ELECTION OF MANAGING _ FOR the nominee _ WITHHOLD
GENERAL PARTNER \_\ listed below. \_\ vote for the nominee
listed below
</TABLE>
Nominee: WTVI Co., L.P.
3. Proposal to approve the Terms and continuance of the Management
Agreement, dated February 28, 1991, by and between the Partnership and
Hamilton Capital Management Inc., as amended by Amendment No. 1 dated
March 30, 1993, as set forth in the accompanying Proxy Statement.
- - -
\_\ FOR \_\ AGAINST \_\ ABSTAIN
4. Proposal to ratify the selection of BDO Seidman as independent auditors of
the Partnership for the year ending December 31, 1995.
- - -
\_\ FOR \_\ AGAINST \_\ ABSTAIN
5. Proposal to amend Paragraph 11.4.1 of the Amended and Restated Agreement of
Limited Partnership so as to eliminate its requirement to hold annual
meetings of Limited Partners and approve certain matters at such meetings.
- - -
\_\ FOR \_\ AGAINST \_\ ABSTAIN
6. In the discretion of such proxies, upon such other business as may properly
come before the meeting or any adjournment thereof.
Please sign exactly as name appears hereon. When Units of Limited Partnership
interest are held by joint tenants, both should sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full title. If a
corporation, please sign in full corporate name by president or other authorized
officer. If a partnership, please sign in partnership name by authorized person.
Signature(s) Date
Signature(s) Date
Please Sign, Date and Return the Proxy Card Promptly Using the Enclosed
Envelope. - Please mark boxes \X\
