TECHNOLOGY FUNDING MEDICAL PARTNERS I, L.P.
2000 Alameda de las Pulgas, Suite 250
San Mateo, California 94403
NOTICE OF MEETING OF LIMITED PARTNERS
To the Limited Partners of TECHNOLOGY FUNDING MEDICAL PARTNERS I, L.P.:
Notice is hereby given that the Special Meeting of Limited Partners of
Technology Funding Medical Partners I, L.P., (the "Partnership") will be
held at 10:00 a.m., local time, on Friday, October 6, 2000, at the
Partnership's offices at 2000 Alameda de las Pulgas, Suite 250, San Mateo,
California, to consider and vote upon:
1. The election of three Individual General Partners;
2. The election of two Managing General Partners;
3. Ratification of the Individual General Partners' selection of KPMG LLP
as independent certified public accountants of the Partnership;
4. The amendment of Article 2, Section (m) of the Partnership Agreement to
delete references to "Controlling Person" in the definition of "General
Partner Overhead;"
5. The amendment of Article 4.01(c) of the Partnership Agreement to remove
the limit on reimbursement of operational costs to the Managing General
Partners or their affiliates;
6. The amendment of Article 1.03 of the Partnership Agreement to clarify
the Partnership's investment objective;
7. Such other matters as may properly come before the Meeting or any
adjournment thereof.
This notice and the enclosed proxy statement and form of proxy are first
being mailed to Limited Partners on or about August 28, 2000.
You are cordially invited to attend this Meeting. WHETHER OR NOT YOU PLAN
TO ATTEND THIS MEETING, PLEASE COMPLETE, SIGN, AND DATE THE ACCOMPANYING
PROXY AND RETURN IT AS PROMPTLY AS POSSIBLE IN THE ENCLOSED POSTAGE-PAID
ENVELOPE. THE ENCLOSED PROXY IS BEING SOLICITED BY THE INDIVIDUAL GENERAL
PARTNERS.
By order of the Individual General Partners,
Charles R. Kokesh
Chief Executive Officer
Technology Funding Inc.
San Mateo, California
Dated: August 28, 2000
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TECHNOLOGY FUNDING MEDICAL PARTNERS I, L.P.
2000 Alameda de las Pulgas, Suite 250
San Mateo, California 94403
PROXY STATEMENT
August 28, 2000
GENERAL INFORMATION
Technology Funding Medical Partners I, L.P., (the "Partnership") is a
limited partnership that was organized under the laws of the State of
Delaware on September 3, 1992. The Partnership commenced selling units of
limited partnership interests ("Units") in May 1993. On October 8, 1993,
the minimum number of Units required to commence Partnership operations
(12,000) was sold to persons who became limited partners of the Partnership
("Limited Partners"). The Partnership completed an offering on May 3, 1995,
raising a total of $7,929,844 from the sale of 79,716 Units.
The Partnership is managed and administered by three Individual General
Partners. The Individual General Partners have exclusive control of the
management of the Partnership, provide overall guidance and supervision of
the Partnership's operations, and perform the various duties imposed on the
boards of directors of business development companies by the Investment
Company Act of 1940, as amended (the "Act"). In addition to having 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 Partners. Subject to the supervision of
the Individual General Partners, the Managing General Partners are
responsible for (i) management of the Partnership; (ii) making all
decisions regarding the Partnership's venture capital investment portfolio;
(iii) negotiation and structuring of investments in portfolio companies;
(iv) oversight of the portfolio companies including providing, or arranging
for the provision of, managerial assistance to portfolio companies; and (v)
day-to-day administration of Partnership affairs.
The Partnership Agreement provides that the Partnership will continue until
December 31, 2002, unless further extended for up to two additional two-
year periods from such date if the Individual General Partners so determine
or unless sooner dissolved.
The Partnership's principal investment objectives are long-term capital
appreciation from venture capital investments in new and developing
companies and preservation of Limited Partner capital through risk
management and active involvement with portfolio companies. The Partnership
elected to be a business development company under the Act, and operates as
a nondiversified investment company as that term is defined in the Act.
SOLICITATION OF PROXIES
The accompanying proxy is solicited on behalf of the Individual General
Partners for use at the Special Meeting of Limited Partners of the
Partnership to be held at 10:00 a.m., local time, on October 6, 2000, (the
"Meeting") at the Partnership's offices located at 2000 Alameda de las
Pulgas, Suite 250, San Mateo, California, and any adjournment thereof. The
individual general partners of TFL, a Managing General Partner of the
Partnership, have been designated by the Individual General Partners to
serve as proxies.
The expenses of soliciting proxies will be paid by the Partnership.
Following the original mailing of the proxies, representatives of the
Partnership may request brokers, custodians, nominees, and other record
holders to forward copies of the proxy to persons for whom they hold Units
and to request authority for the exercise of proxies. In such case, the
Partnership, upon the request of the record holders, will reimburse such
holders for their reasonable expenses. Excluding the costs of printing the
proxies, ballots, and return envelopes and postage, the expected cost of
this proxy solicitation will be approximately $5,000 to $10,000 including
the allocable costs of personnel of the Managing General Partners engaged
in preparing the proxy statement, supervising the costs of printing and
mailing, tabulating the ballots, and responding to inquiries from Limited
Partners.
RECORD DATE
By order of the Individual General Partners, only Limited Partners of
record at the close of business on July 31, 2000, are entitled to notice of
and will be entitled to vote at the Meeting and any adjournment thereof.
VOTING RIGHTS AND PROCEDURES
Only Limited Partners of record on July 31, 2000, will be entitled to vote
at the Meeting. At the close of business on that date, the Partnership had
79,716 Units outstanding and entitled to vote. Limited Partners are
entitled to one vote for each Unit held.
Limited Partners may vote in person or by proxy at the Meeting. The
enclosed form of proxy, if returned properly executed and not subsequently
revoked, will be voted in accordance with the choices made by the Limited
Partner with respect to each proposal listed on the form of proxy. If a
Limited Partner does not specify on the form of proxy how the Limited
Partner's Units are to be voted, or if a Limited Partner fails to return a
proxy, the Limited Partner, pursuant to Article 14.04 of the Partnership
Agreement, shall be deemed to have granted to the Individual General
Partners a proxy solely for those matters noted on the form of proxy and
the Individual General Partners will vote all such proxies "FOR" each
proposal noted on the enclosed form of proxy. Abstentions so marked on any
proposal will be recorded as neither a vote for or against any proposal so
marked.
If any other matters should be properly presented at the Meeting, the
persons designated to serve as proxies will vote on such matters in
accordance with a determination by a majority of the members of the
Membership Committee, including a majority of the Independent General
Partners (as defined below).
REVOCATION AND DISSENTER'S RIGHTS
Any person signing a proxy in the form accompanying this proxy statement
has the power to revoke it prior to the vote pursuant to the proxy. A proxy
may be revoked by (i) submitting before or at the Meeting a written
revocation of the proxy with the Partnership; (ii) submitting to the
Partnership before or at the Meeting a subsequent proxy that is signed by
the person who signed the earlier proxy; or (iii) attending the Meeting and
casting a contrary vote.
The Partnership is a closed-end, non-trading entity that has elected to
operate as a business development company under the Investment Company Act
of 1940, as amended. Limited Partners do not have any "dissenter's rights."
OWNERSHIP OF PARTNERSHIP UNITS
To the knowledge of management of the Partnership, as of July 31, 2000, no
person owned beneficially more than 5% of the outstanding Units. Except as
noted below regarding the direct ownership of 20 Units each by the three
Independent General Partners, the General Partners do not own any
securities of the Partnership, whether voting or non-voting.
ANNUAL REPORTS
The Partnership's Annual Report on Form 10-K for the year ended December
31, 2000, ("Annual Report") was mailed to all Limited Partners of record as
of April 1, 2000, on or about July 3, 2000. The Partnership will provide
without charge to each Limited Partner a copy of the Annual Report upon
request. Address your request to Client Services by calling toll-free 1-
800-821-5323, or by writing Client Services, Annual Reports Section, Attn:
Darrin Abby, at Technology Funding, 460 St. Michael's Drive, Suite 1000,
Santa Fe, New Mexico 87505.
PROPOSAL 1 - ELECTION OF INDIVIDUAL GENERAL PARTNERS
All General Partners of the Partnership are elected by the Limited
Partners. The three Individual General Partners are Messrs. Ginsberg,
Marcum, and Schroeder. The Managing General Partners are Technology Funding
Inc. ("TFI") and Technology Funding Ltd. ("TFL"). Generally, the
representative for TFL is Mr. Kokesh, and the representative for TFI is Mr.
George. As required by the Investment Company Act, a majority of the
General Partners must be individuals who are not "interested persons" of
the Partnership as defined in the Act. The Securities and Exchange
Commission ("SEC") has issued an order declaring that persons serving as
Individual General Partners of the Partnership will not be deemed to be
"interested persons" of the Partnership, as defined in Section 2(a)(19) of
the Act, solely by reason of their being partners of the Partnership and
co-partners of one another. Presently, none of the Individual General
Partners is an "interested person" of the Partnership. Therefore, the
Individual General Partners constitute the Partnership's Independent
General Partners. None of the nominees for Individual General Partners have
provided in the past five years or provide any services to or receive
compensation in any form from the Partnership except as disclosed below,
nor have they received any compensation from any other partnerships managed
by the Managing General Partners or from the Managing General Partners.
At the Meeting, the Limited Partners will elect three Individual General
Partners, each to hold office until the next meeting and until his or her
successor is elected and qualified or until his or her earlier resignation
or removal. Each nominee is presently an Individual General Partner of the
Partnership. Each nominee listed below has consented to continue to serve
as an Individual General Partner. There are no arrangements or
understandings related to the nomination of any of the Individual General
Partners except as provided in the Partnership Agreement. If any nominee is
not available for election, which is not anticipated, the proxies received
will be voted for such substitute nominee as the Individual General
Partners may recommend.
Certain information about each nominee is set forth below:
Partnership Units Percentage ownership
Nominee Age beneficially owned of outstanding Units
Harold M. Ginsberg 44 20 *
Richard A. Marcum 52 20 *
Carroll J. Schroeder 53 20 *
*Denotes beneficial ownership of less than 1% of outstanding Units.
Harold M. Ginsberg, M.D., has been an Individual General Partner since 1993
when the Partnership was formed. Dr. Ginsberg has been a consulting
psychiatrist for the San Francisco Department of Public Health at Laguna
Honda Hospital since 1998 and in private practice since 1996. In addition,
Dr. Ginsberg is a General Partner of real estate investment groups in New
York and California and a venture investor in retail sales, specialty food
manufacture, and medical equipment development.
Richard A. Marcum has been an Individual General Partner since his
appointment in April 1999. Since 1999, Mr. Marcum has been a real estate
consultant and government lobbyist based in Dallas, Texas. From 1998 to
1999, Mr. Marcum was Executive Director of the Regional Development
Corporation in Santa Fe, New Mexico. Prior to that, he held the same
position with Santa Fe Economic Development, Inc., from 1996 to 1998. From
1993 to 1996, Mr. Marcum was Executive Director of the Santa Rosa County
Economic Development Corporation in Milton, Florida.
Carroll J. Schroeder, M.S., has been an Individual General Partner since
1993 when the Partnership was formed. Since February 1995, Mr. Schroeder
has been the Executive Director of the Stanford Home for Children, a
century-old agency in Sacramento, California, providing services to
children and families with complex needs. Mr. Schroeder is also the Chief
Executive Officer of Family Alliance, a subsidiary corporation of the
Stanford Home and three partner agencies which provides permanency-focused
treatment and foster care. Previously, he was Director of Programs at
Families First in Davis, California, from October 1976 to February 1995.
This year, Mr. Schroeder serves as the President of the Board of Directors
of the California Alliance of Child and Family Services, which represents
and accredits over 200 agencies serving children and families in
California.
Compensation
Under Article 4.02 of the Partnership Agreement, the Partnership will pay
each Individual General Partner compensation for services rendered as
follows:
(a) The sum of $6,000 annually in quarterly installments beginning on the
commencement date;
(b) The sum of $1,000 for each meeting of the Individual General Partners
attended by such Individual General Partner to an annual limit of $8,000;
(c) If a committee is appointed by the Individual General Partners, the sum
of $1,000 for each such committee meeting attended; provided, however,
that, if such committee meeting is held on the same day as a meeting of the
Individual General Partners, the sum paid for attendance at such committee
meeting shall be $500 and provided further that the total amount paid in
any one year for attendance at committee meetings does not exceed $5,000;
and
(d) all out-of-pocket expenses relating to attendance at the meetings,
committee or otherwise, of the Individual General Partners.
Under Article 4.02, neither the Managing General Partners nor any of their
affiliates shall receive any compensation from the Partnership. Although
the Partnership Agreement provides a mechanism by which the Individual
General Partners, with the approval of a majority in interest of the
Limited Partners, may increase or decrease compensation payable to the
Individual General Partners, there have been no changes to the compensation
arrangements set forth above. Payment of compensation to an Individual
General Partner is not considered a distribution and will not effect his or
her right to receive a distribution to which he or she may be entitled as a
Limited Partner.
Individual General Partner Compensation for Fiscal Year 1999
Aggregate Pension or Estimated Total
Individual Compensation Retirement Annual Bene- Compensation
General from the Benefits fits upon from
Partner Partnership Accrued Retirement Partnership
Harold M. Ginsberg $10,294.00 N/A N/A $10,294.00
Richard A. Marcum $0.00 N/A N/A $0.00
Carroll J. Schroeder $10,328,33. N/A N/A $10,328,33
Pursuant to Article 7.01(b) of the Partnership Agreement, each Individual
General Partner made a capital contribution of $2,000 in cash at the time
of his admission to the Partnership, for which that Individual General
Partner received an interest in the Partnership of 20 Units. For calendar
year 1999, Messrs. Ginsberg, Marcum, and Schroeder were allocated losses
attributable to their Unit holdings of $113, $76, and $113, respectively.
Individual General Partners Meeting and Committees
During 1999, the Partnership's Individual General Partners held a total of
four meetings. The Partnership does not have a separate audit committee,
compensation committee, nominating committee, or any committee performing
similar functions since these functions are served by the Individual
General Partners as a whole. There were no committee meetings or other
special meetings other than the regularly scheduled quarterly Individual
General Partner meetings in the last fiscal year.
PROPOSAL 2 - ELECTION OF MANAGING GENERAL PARTNERS
At the Meeting, two Managing General Partners will be elected, each to
serve until the next required meeting of Limited Partners and until its
successor is elected and qualified or until its earlier resignation or
removal. The nominees discussed below have consented to continue to serve
as Managing General Partners.
Technology Funding Inc. ("TFI") is a California corporation formed in 1979
to act as a general partner in limited partnerships providing funding to
high technology companies. Its address is 2000 Alameda de las Pulgas, Suite
250, San Mateo, California 94403. In conjunction with TFL, TFI has
organized and managed 20 limited partnerships in addition to the
Partnership. TFI is a registered investment adviser under the Investment
Advisers Act of 1940. Mr. Kokesh is the sole director of TFI, and all of
the shares of stock of TFI are owned by TFL. TFI and its wholly owned
subsidiary, Technology Funding Capital Corp., currently employ
approximately 30 persons. The backgrounds and experience of certain senior
officers of TFI are outlined in "Key Personnel of the Managing General
Partners" below. TFI has been a Managing General Partner of the Partnership
since 1993.
Technology Funding Ltd. ("TFL") is a California limited partnership formed
in 1980 that serves as co-general partner with TFI in the Technology
Funding partnerships. TFL is a registered investment adviser under the
Investment Advisers Act of 1940. TFL is the sole shareholder of TFI. TFL
has two general partners, Mr. Kokesh and Mr. George, one venture partner,
Mr. Bernardoni, and seven limited partners. Mr. Kokesh is the managing
general partner of TFL. TFL has been a Managing General Partner of the
Partnership since 1993.
Voting Interest in the Managing General Partners
The following table sets forth the voting interests of the general partners
of TFL as of July 31, 2000. TFL is the sole shareholder of TFI. Mr. Kokesh
may be deemed to be a control person of TFL.
TFL (1)
Charles R. Kokesh 6 votes
Gregory T. George 2 votes
(1) Under the TFL partnership agreement, all material decisions require
the vote of at least 75% of the voting interests. The General Partners'
capital, profit, and loss interests are flexible and may vary from the
voting percentages set forth above. Limited Partners of TFL have very
limited voting rights.
Key Personnel of the Managing General Partners
Charles R. Kokesh, 52, is President, Chief Executive Officer of TFI, and
Managing General Partner of TFL. Prior to forming Technology Funding in
1979, Mr. Kokesh was a Vice President of Bank of America where he was
responsible for Global Treasury Management Services. Had Proposal 4 been
approved and in effect during the years ended December 31, 1999, and
December 31, 1998, additional expenses to the Partnership related to the
compensation of Mr. Kokesh would have been $13,092 and $23,536,
respectively.
Gregory T. George, 52, is a Group Vice President of TFI and a General
Partner of TFL. Prior to joining Technology Funding in June 1986, Mr.
George was an independent management consultant specializing in the
technical and strategic analysis of venture-backed software companies.
Peter F. Bernardoni, 41, is a Vice President of TFI and a Partner of TFL.
Prior to joining Technology Funding in February 1988, Mr. Bernardoni served
in several capacities with IBM, including design engineer and sales and
marketing manager.
Compensation
Over and above their distributive share of Partnership profits, losses, and
distributions, the Managing General Partners receive from the Partnership
(i) a management fee equal to 2% of total Limited Partner capital
contributions for each year of Partnership operations through the sixth
year after the closing date and thereafter declining by 10% per year; and
(ii) reimbursement of operational costs of the Partnership incurred by the
Managing General Partners or their affiliates in connection with the
business of the Partnership.
Managing General Partner Compensation for Fiscal Year 1999
Aggregate Pension or Estimated Total
Managing Compensation Retirement Annual Bene- Compensation
General from the Benefits fits upon from
Partner Partnership Accrued Retirement Partnership
TFI $158,597(2) N/A N/A $158,597(2)
TFL $0 N/A N/A $0
(2) Compensation from the Partnership to the Managing General Partners is
equivalent to the management fees paid in the year ended December 31, 1999.
For fiscal years 1999 and 1998, management fees were $158,597 and $158,597,
respectively, and reimbursement of operational costs was $204,785 and
$342,062, respectively.
Removal of the Managing General Partners
The Managing General Partners, together, may be removed from the
Partnership either (i) by a majority of the Independent General Partners of
the Partnership; (ii) by failure to be reelected by the Limited Partners;
or (iii) with the consent of a majority in interest of the Limited
Partners.
In the event of the removal of the Managing General Partners and the
continuation of the Partnership, the Partnership Agreement provides that
the venture capital investments held by the Partnership at the time of
removal will be valued in a procedure set forth in the Partnership
Agreement. With respect to their Partnership interests, the removed
Managing General Partners will receive a final allocation of net profit or
net loss equal to the net profit or net loss that they would have been
allocated pursuant to the Partnership Agreement if all unrealized capital
gains and losses of the Partnership were deemed realized and an allocation
of net profit or net loss were made at such time.
If the capital accounts of the removed Managing General Partners have a
positive balance after the final allocation, the Partnership will deliver a
promissory note to the removed Managing General Partners, with a principal
amount equal to the amount, if any, by which the positive amount of the
removed Managing General Partners' capital accounts exceeds the amount of
their capital contributions, bearing interest at the prime rate in effect
at the time of removal, with interest payable annually and principal
payable, if at all, only from 20% of any available cash before any
distributions thereof are made to the Partners. If the capital accounts of
the removed Managing General Partners have a negative balance after such
allocation, the Managing General Partners will contribute cash to the
Partnership equal to that negative balance. The Partnership interests of
the removed Managing General Partners will convert to those of Limited
Partners and the removed Managing General Partners will continue to
receive, as Limited Partners, allocations of net profits and net losses
pursuant to the Partnership Agreement and related distributions as provided
in the Partnership Agreement.
PROPOSAL 3 - SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
At its meeting held on September 10, 1999, the Individual General Partners
of the Partnership selected the firm of KPMG LLP ("KPMG"), independent
public accountants, to examine the financial statements of the Partnership.
The Partnership knows of no direct or indirect financial interest of KPMG
in the Partnership. This appointment is subject to ratification or
rejection by the Limited Partners of the Partnership. Unless a contrary
specification is made, the accompanying proxy will be voted in favor of
ratifying the selection of KPMG.
KPMG also acts as independent public accountants for the Managing General
Partners and substantially all of the other Technology Funding partnerships
and other Technology Funding entities. The fees received by KPMG from these
other entities are substantially greater, in the aggregate, than the total
fees received by it from the Partnership. The Individual General Partners
considered the fact that KPMG has been retained as the independent
accountants for the Managing General Partners and the other entities
described above in their evaluation of the independence of KPMG with
respect to the Partnership.
Representatives of KPMG are not expected to be present at the Meeting and
therefore will not have the opportunity to respond to questions from
Limited Partners or to make a statement.
PROPOSAL 4 - CONTROLLING PERSON
The Partnership Agreement defines the terms "Controlling Person" and
"General Partner Overhead." The term Controlling Person currently means any
person, whatever his or her title, who performs functions for the Managing
General Partners or their affiliates similar to those of the chairman or
member of the board of directors; is a member of executive management, such
as the president, executive vice president or senior vice president,
corporate secretary, or treasurer; or holds a 5% or more equity interest in
the Managing General Partners or their affiliates or a person having the
power to direct or cause the direction of the Managing General Partners or
their affiliates, whether through the ownership of voting securities, by
contract, or any other means. Pursuant to that definition, Charles R.
Kokesh, as the Managing General Partner of TFL and President of TFI,
currently is a Controlling Person and would have been a Controlling Person
for each of the Partnership's fiscal years ended December 31, 1999, and
December 31, 1998. No other person was a Controlling Person during those
years or is now a Controlling Person.
The term Controlling Person is relevant to the definition of General
Partner Overhead which generally means expenses incurred by the General
Partners while performing their obligations to the Partnership, such as
those expenses customarily incurred by the General Partners for their own
accounts and not attributable to the Partnership, and expressly includes
the salary and fringe benefits of a Controlling Person.
In his respective roles at TFL and TFI, Mr. Kokesh is responsible for
managing those two entities as well as the activities and investments of
the Partnership. While his time and salary are tracked and allocated to his
respective tasks, the Partnership has not reimbursed TFL or TFI for the
portion of Mr. Kokesh's time specifically related to Partnership business.
The Partnership receives a significant and material benefit from Mr.
Kokesh's expertise and time. Under the definition of those expenses
incurred on behalf of the Partnership for which reimbursement is allowable,
the Partnership does not pay for this expertise and time since General
Partner Overhead is not reimbursable and a Controlling Person's salary and
fringe benefits are included in General Partner Overhead.
The Individual General Partners propose to amend the definition of General
Partner Overhead to delete references to "Controlling Person" so that the
Partnership is permitted to pay for the expertise, time, and management
services provided to it by a Controlling Person. If the Limited Partners
approve this proposed amendment, the Partnership will incur the expenses
related to the management of the activities and investments of the
Partnership by Mr. Kokesh and any other Controlling Person. If the proposed
change had been effective during the Partnership's past two completed
fiscal years, the Partnership would have paid approximately $13,092 in 1999
and $23,536 in 1998 to TFI and TFL for management services provided by Mr.
Kokesh to the Partnership.
If this proposal is approved, the Partnership will incur expenses that
otherwise would be paid by TFI and TFL. If the proposal is approved,
additional expenses to the Partnership for the year ended December 31,
2000, are estimated at approximately $15,000.
PROPOSAL 5 - LIMIT ON OPERATIONAL COSTS
Under Article 4.01(c) of the Partnership Agreement, the Partnership shall
reimburse the Managing General Partners for operational costs related to
the Fund's investments, subject to a limit of 3% of total Limited Partner
capital contributions in any year through the first five years of
Partnership operations after the closing date and 1.5% of the Limited
Partner capital contributions thereafter. However, the number and
complexity of the investments made by the Partnership may require
additional time and effort on behalf of the Managing General Partners in
order to maximize investment returns to the Limited Partners. The Managing
General Partners may incur expenses higher than the current allowable
limit.
The Individual General Partners propose to amend Article 4.01(c) to remove
the limit on reimbursement of operational costs. If the Limited Partners
approve this proposed amendment, the Partnership may incur additional
expenses related to operational costs, including but not limited to: (i)
the costs of operations; (ii) partnership accounting; (iii) investor
communications; (iv) investor documentation; (v) legal and tax services;
and (vi) any other related operational or administrative expenses necessary
for the operation of the Partnership.
If the proposed change had been effective during the Partnership's past two
completed fiscal years, the Partnership would have incurred no additional
expenses in 1999 and 1998. If the proposal is approved, there will be no
additional expense to the Partnership for the year ended December 31,
2000.
PROPOSAL 6 - INVESTMENT OBJECTIVE
According to Article 1.03 of the Partnership Agreement, the Partnership's
principal investment objective is "to provide the Partners with long-term
capital appreciation on their investment." In order to clarify the
Partnership's goals and remove any ambiguity, the Managing General Partners
would amend this section to state:
"The Partnership's principal investment objective is to maximize long-term
capital appreciation for the Limited Partners until the date the
Partnership is dissolved."
This change makes it clear that the Managing General Partners are focused
on maximizing returns to Limited Partners up to and including the final day
of the Partnership's active operation.
OTHER MATTERS
The Individual General Partners do not presently intend to bring any other
business before the Meeting and, so far as it is known to the Individual
General Partners, no matters are to be brought before the Meeting except as
specified in the notice of the Meeting. As to any business that may
properly come before the Meeting, however, it is intended that proxies, in
the form enclosed, will be voted in the respect thereof in accordance with
the judgment of the persons voting such proxies.
ADDITIONAL INFORMATION
Limited Partner Status
The Partnership Agreement provides that the Limited Partners of the
Partnership are prohibited from exercising certain rights of limited
partners, including the right to elect General Partners, to approve certain
Partnership matters, and to amend the Partnership Agreement, unless prior
to the exercise of such rights, counsel for the Partnership has delivered
to the Partnership an opinion to the effect that neither the existence of
such rights nor the exercise thereof will violate the provisions of the
Revised Uniform Limited Partnership Act of the State of Delaware, as
amended, or the applicable laws of the other jurisdictions in which the
Partnership is then formed or qualified, or will adversely affect the
classification of the Partnership as a partnership for federal income tax
purposes. Prior to the Meeting, counsel to the Partnership will have
delivered a favorable opinion to the Partnership with respect to the
foregoing. In rendering such opinion, counsel for the Partnership expects
to rely as to matters of Delaware law upon the opinion of special Delaware
counsel to the Partnership.
LIMITED PARTNER PROPOSALS
Any Limited Partner proposal submitted to the Partnership for inclusion in
the Partnership's proxy statement and form of proxy relating to the
Partnership's next special meeting of the Limited Partners, pursuant to
Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), must be received by the Partnership at the Partnership's
principal executive offices 120 days or a reasonable length of time prior
to the date the Partnership mails proxy materials for the meeting in order
for the proposal to be considered at that meeting. Any such proposal must
comply in all respects with the applicable rules and regulations under the
Exchange Act.
In order for proposals made outside Rule 14a-8 of the Exchange Act to be
considered "timely" within the meaning of Rule 14a-4(c) under the Exchange
Act, such proposals must be received by the Partnership at the
Partnership's principal executive offices a reasonable length of time prior
to the date the Partnership mails the proxy materials for the meeting for
consideration at that meeting.
The proxies solicited by the Partnership will confer general discretionary
authority with regard to such matters for which the Partnership did not
receive notice within a reasonable time period. The Partnership will more
specifically advise the Limited Partners when to submit proposals for the
next meeting in future reports filed under the Exchange Act.
WHERE YOU CAN FIND MORE INFORMATION
The Partnership files annual and quarterly reports, proxy statements, and
other information with the U.S. Securities and Exchange Commission. The
Partnership's filings with the SEC are available to the public through the
SEC's Electronic Data Gathering, Analysis and Retrieval system ("EDGAR")
accessible through the SEC's web site at: http://www.sec.gov. Limited
Partners also may read and copy any report, statement, or other information
that the Partnership has filed with the SEC at the SEC's public reference
rooms at the following locations:
Public Reference Room
450 Fifth Street, N.W.
Washington, D.C. 20549
New York Regional Office
7 World Trade Center
Suite 1300
New York, NY 10048
Chicago Regional Office
500 West Madison Street
Suite 1400
Chicago, IL 60661-2511
Call the SEC at 1-800-SEC-0330 for more information on obtaining
information from the SEC's public reference rooms.
The SEC allows the Partnership to incorporate by reference information into
this proxy statement, meaning the Partnership can disclose important
information by referring Limited Partners and others who read this proxy
statement to other documents that the Partnership has filed with the SEC.
The Partnership incorporates by reference the document listed below:
The Partnership's annual report on Form 10-K, filed on March 30, 2000, file
number 814-00124.
ALL LIMITED PARTNERS ARE URGED TO COMPLETE, SIGN, AND DATE THE ACCOMPANYING
PROXY AND RETURN IT IN THE ENCLOSED POSTAGE-PAID ENVELOPE. YOUR PROMPT
ATTENTION TO THIS MATTER WILL AVOID COSTLY FOLLOW-UP CORRESPONDENCE. THANK
YOU FOR YOUR ASSISTANCE.
<PAGE>
ANNEX A
Article 2, Section (m) of the Partnership Agreement currently reads as
follows:
(m) "General Partner Overhead" means those customary and routine expenses
incurred by the Managing General Partners (excluding all Organizational and
Offering Expenses) in performing their obligations to the Partnership,
including: (i) rent or depreciation, utilities, property taxes, and the
cost of capital equipment unless acquired primarily for the benefit of the
Partnership; (ii) expenses of a general and administrative nature that are
customarily incurred by the General Partners for their own accounts and are
not attributable to the Partnership; and (iii) salaries and fringe benefits
incurred by or allocated to any Controlling Person of the General Partners
or their Affiliates. For purposes of this subsection, "Controlling Person"
is any Person, whatever his or her title, who performs functions for the
Managing General Partners or their Affiliates similar to those of the
chairman or member of the board of directors; executive management, such as
the president, executive vice president or senior vice president, corporate
secretary, or treasurer; or who holds a 5% or more equity interest in the
Managing General Partners or their Affiliates or a Person having the power
to direct or cause the direction of the Managing General Partners or their
Affiliates, whether through the ownership of voting securities, by
contract, or otherwise.
As amended by Proposal 4, Article 2, Section (m) would read as follows:
(m) "General Partner Overhead" means those customary and routine expenses
incurred by the Managing General Partners (excluding all Organizational and
Offering Expenses) in performing their obligations to the Partnership,
including: (i) rent or depreciation, utilities, property taxes, and the
cost of capital equipment unless acquired primarily for the benefit of the
Partnership; and (ii) expenses of a general and administrative nature that
are customarily incurred by the General Partners for their own accounts and
are not attributable to the Partnership.
ANNEX B
Article 4.01(c) of the Partnership Agreement currently reads as follows:
(c) Reimbursement of Operational Costs. The Partnership shall reimburse the
Managing General Partners or their Affiliates for Operational Costs
incurred by the Managing General Partners or their Affiliates in connection
with the business of the Partnership, including without limitation expenses
related to the selection of Portfolio Companies or to proposed investments,
even if the proposed investments ultimately are not undertaken by the
Partnership. The Management Fee compensates the Managing General Partners
solely for General Partner Overhead and is in addition to the reimbursement
of actual Operational Costs. The Partnership may not pay or reimburse the
General Partners for Operational Costs that aggregate more than 3.0% of
total Limited Partner Capital Contributions in any year through the first
five years of Partnership operations after the Closing Date or more than
1.5% of Limited Partner Capital Contributions in any year of Partnership
operations thereafter. The Managing General Partners will pay all General
Partner Overhead and Organizational and Offering Expenses (exclusive of
amounts due to the Dealer-Manager under Section 4.03 and subject to the
Partnership's reimbursement of such expenses pursuant to 4.01(a) above).
As amended by Proposal 5, Article 4.01(c) would read as follows:
(c) Reimbursement of Operational Costs. The Partnership shall reimburse the
Managing General Partners or their Affiliates for Operational Costs
incurred by the Managing General Partners or their Affiliates in connection
with the business of the Partnership, including without limitation expenses
related to the selection of Portfolio Companies or to proposed investments,
even if the proposed investments ultimately are not undertaken by the
Partnership. The Management Fee compensates the Managing General Partners
solely for General Partner Overhead and is in addition to the reimbursement
of actual Operational Costs. The Managing General Partners will pay all
General Partner Overhead and Organizational and Offering Expenses
(exclusive of amounts due to the Dealer-Manager under Section 4.03 and
subject to the Partnership's reimbursement of such expenses pursuant to
4.01(a) above).
ANNEX C
Article 1.03 of the Partnership Agreement currently reads as follows:
1.03 Purpose. The Partnership is authorized and empowered to elect to
operate, and to operate, as a business development company under the
Investment Company Act of 1940, as amended. The Partnership's principal
investment objective is to provide the Partners with long-term capital
appreciation on their investment. The Partnership will seek to accomplish
this objective by making venture capital investments in new and developing
companies that the "Managing General Partners," as hereinafter defined,
believe offer significant long-term growth possibilities and by providing
those companies with active management assistance where warranted. The
Partnership will also seek to achieve this objective by investing in
established companies that the Managing General Partners believe offer
special opportunities for growth. The Partnership will also seek to
preserve Limited Partner capital through risk management and active
participation with Portfolio Companies. Generation of current income or tax
benefits will not be primary factors in the selection of investments.
As amended by Proposal 6, Article 1.03 would read as follows:
1.03 Purpose. The Partnership is authorized and empowered to elect to
operate, and to operate, as a business development company under the
Investment Company Act of 1940, as amended. The Partnership's principal
investment objective is to maximize long-term capital appreciation for the
Limited Partners until the date the Partnership is dissolved. The
Partnership will seek to accomplish this objective by making venture
capital investments in new and developing companies that the "Managing
General Partners," as hereinafter defined, believe offer significant long-
term growth possibilities and by providing those companies with active
management assistance where warranted. The Partnership will also seek to
achieve this objective by investing in established companies that the
Managing General Partners believe offer special opportunities for growth.
The Partnership will also seek to preserve Limited Partner capital through
risk management and active participation with Portfolio Companies.
Generation of current income or tax benefits will not be primary factors in
the selection of investments.
<PAGE>
TECHNOLOGY FUNDING MEDICAL PARTNERS I, L.P.
PROXY FOR MEETING OF LIMITED PARTNERS October 6, 2000
PROXY SOLICITED BY THE MANAGEMENT COMMITTEE OF THE PARTNERSHIP
The undersigned hereby appoints Charles R. Kokesh and Gregory T. George or
either of them, each with power of substitution, as proxies to represent
the undersigned at the Special Meeting of the Limited Partners of Technology
Funding Medical Partners I, L.P., (the "Partnership") to be held at the
Partnership's offices at 2000 Alameda de las Pulgas, Suite 250, San Mateo,
California at 10:00 a.m. local time, on October 6, 2000, and any adjournment
thereof, and to vote the number of Units of limited partnership interest in
the Partnership the undersigned would be entitled to vote if personally
present in the following matters:
1. ELECTION OF INDIVIDUAL GENERAL PARTNERS.
FOR all nominees listed below
(except as marked to the contrary below): [ ]
WITHHOLD AUTHORITY to vote for all nominees listed below: [ ]
Nominees: Harold M. Ginsberg, M.D., Richard A. Marcum,
Carroll J. Schroeder, M.S.
(INSTRUCTION: To withhold authority to vote for any individual nominee
write that nominee's name(s) below.)
_____________________________________
2. ELECTION OF MANAGING GENERAL PARTNERS.
FOR all nominees listed below
(except as marked to the contrary below): [ ]
WITHHOLD AUTHORITY to vote for all nominees listed below: [ ]
Nominees: Technology Funding Inc., Technology Funding Ltd.
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name(s) below.)
_____________________________________
3. RATIFICATION OF THE SELECTION OF KMPG LLP as independent certified
public accountants of the Partnership.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. AMEND SECTION 2(m) OF THE PARTNERSHIP AGREEMENT to delete references to
"Controlling Person" in the definition of "General Partner Overhead."
FOR [ ] AGAINST [ ] ABSTAIN [ ]
5. AMEND SECTION 4.01 (c) OF THE PARTNERSHIP AGREEMENT to remove the limit
on reimbursement of operational costs to the Managing General Partners or
their affiliates.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
6. AMEND SECTION 1.03 OF THE PARTNERSHIP AGREEMENT to clarify the
Partnership's investment objective.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
7. In their discretion, upon such other business as may properly come before
the meeting or any adjournment thereof.
The Management Committee recommends a vote FOR all Proposals 1, 2, 3, 4,
5, and 6 above. This proxy will be voted as directed. If a Limited Partner
does not specify on the form of proxy how the Limited Partner's Units are
to be voted, or if a Limited Partner fails to return a proxy, the Limited
Partner, pursuant to Section 14.04 of the Partnership Agreement, shall be
deemed to have granted to the Management Committee a proxy solely for those
matters noted on the form of proxy and the Management Committee will vote
all such proxies "FOR" each proposal noted on the enclosed form of proxy.
Abstentions so marked on any proposal will be recorded as neither a vote
for or against any proposal so marked.
PROXY INSTRUCTIONS
1. Please sign exactly as the name or names appear hereon.
2. If Units of limited partnership interest are held jointly by two or
more persons, each joint holder should sign the proxy.
3. A proxy executed by a corporation should be signed in its name by an
authorized officer.
4. Person signing as executors, administrators, trustees and partners
should so indicate when signing.
Dated:__________________, 2000
By signing below, the undersigned hereby acknowledges receipt of the Proxy
Statement and the 1999 Annual Report.
Signature(s)_____________________________________
_____________________________________
If the information on the mailing label is not correct, please make changes
below:
Social Security #: ______ - _____ - ____________
Address: ___________________________
____________________________
PLEASE MARK, DATE, AND SIGN THIS PROXY AND RETURN IT IN THE ENVELOPE PROVIDED,
WHICH REQUIRES NO POSTAGE IF MAILED WITHIN THE UNITED STATES.
YOUR VOTE MUST BE RECEIVED PRIOR TO THE INITIAL MEETING OF LIMITED PARTNERS
TO BE HELD ON OCTOBER 6, 2000.
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