EXHIBIT (k)(2)
SUB-ADMINISTRATION AGREEMENT
Agreement dated as of , 2000 by and between State Street Bank and
Trust Company, a Massachusetts trust company (the "Sub-Administrator"), and meVC
Advisers, Inc. (the "Adviser") on behalf of meVC Delta Life Sciences Fund I,
Inc. (the "Company").
WHEREAS, the Company is registered as an closed-end, management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Company has retained the Adviser to furnish advisory and
administrative services to the Company; and
WHEREAS, the Adviser desires to retain the Sub-Administrator to furnish
certain administrative services to the Company, and the Sub-Administrator is
willing to furnish such services, on the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained, the parties hereto agree as follows:
1. APPOINTMENT OF ADMINISTRATOR
The Adviser hereby appoints the Sub-Administrator to act as
sub-administrator with respect to the Company for purposes of providing certain
sub-administrative services for the period and on the terms set forth in this
Agreement. The Sub-Administrator accepts such appointment and agrees to render
the services stated herein.
The Company will initially consist of the portfolio(s) and/or class(es) of
shares (each an "Investment Fund") listed in Schedule A to this Agreement. In
the event that the Company establishes one or more additional Investment Funds
with respect to which the Adviser wishes to retain the Sub-Administrator to act
as sub-administrator hereunder, the Adviser shall notify the Sub-Administrator
in writing. Upon written acceptance by the Administrator, such Investment Fund
shall become subject to the provisions of this Agreement to the same extent as
the existing Investment Funds, except to the extent that such provisions
(including those relating to the compensation and expenses payable by the
Adviser) may be modified with respect to each additional Investment Fund in
writing by the Adviser and the Sub-Administrator at the time of the addition of
the Investment Fund.
2. DELIVERY OF DOCUMENTS
The Adviser will promptly deliver to the Sub-Administrator copies of each of
the following documents and all future amendments and supplements, if any:
a. The Company's Articles of Incorporation and by-laws;
b. The Company's currently effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and the Company's
Prospectus(es) and Statement(s) of Additional Information relating to all
Investment Funds and all amendments and supplements thereto as in effect from
time to time;
c. Certified copies of the resolutions of the Board of Directors of the
Adviser (the "Board") authorizing (1) the Adviser to enter into this Agreement
and (2) certain individuals on behalf of the Company to (a) give instructions to
the Sub-Administrator pursuant to this Agreement and (b) sign checks and pay
expenses;
d. A copy of the investment advisory agreement between the Adviser and the
Company authorizing the Adviser to enter this Agreement; and
e. Such other certificates, documents or opinions which the
Sub-Administrator may, in its reasonable discretion, deem necessary or
appropriate in the proper performance of its duties.
3. REPRESENTATIONS AND WARRANTIES OF THE SUB-ADMINISTRATOR
The Sub-Administrator represents and warrants to the Adviser that:
a. It is a Massachusetts trust company, duly organized and existing under
the laws of The Commonwealth of Massachusetts;
b. It has the corporate power and authority to carry on its business in The
Commonwealth of Massachusetts;
c. All requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement;
d. No legal or administrative proceedings have been instituted or
threatened which would impair the Sub-Administrator's ability to perform its
duties and obligations under this Agreement; and
e. Its entrance into this Agreement shall not cause a material breach or be
in material conflict with any other agreement or obligation of the
Sub-Administrator or any law or regulation applicable to it.
4. REPRESENTATIONS AND WARRANTIES OF THE ADVISER
The Adviser represents and warrants to the Administrator that:
a. It is a corporation, duly organized, existing and in good standing under
the Laws of the State of Delaware;
b. The Company is a business development company, duly organized, existing
and in good standing under the laws of the State of Maryland;
c. It has the corporate power and authority under applicable laws and by
its charter and by-laws to enter into and perform this Agreement;
d. All requisite proceedings have been taken to authorize it to enter into
and perform this Agreement;
e. The Company is an investment company that has properly elected business
development company status under the 1940 Act;
f. A registration statement under the 1933 Act has been filed by the
Company and will be effective and remain effective during the term of this
Agreement. The Adviser also warrants to the Administrator that as of the
effective date of this Agreement, all necessary filings under the securities
laws of the states in which the Company offers or sells its shares have been
made;
g. No legal or administrative proceedings have been instituted or
threatened which would impair the Adviser's ability to perform its duties and
obligations under this Agreement;
h. Its entrance into this Agreement will not cause a material breach or be
in material conflict with any other agreement or obligation of the Adviser or
any law or regulation applicable to it; and
i. As of the close of business on the date of this Agreement, the Company
is authorized to issue shares of capital stock, and it will initially offer
shares, in the authorized amounts as set forth in Schedule A to this Agreement.
5. SUB-ADMINISTRATION SERVICES
The Sub-Administrator shall provide the following services, in each case,
subject to the control, supervision and direction of the Adviser and the Company
and the review and comment by the Company's auditors and legal counsel and in
accordance with procedures which may be established from time to time between
the Adviser and the Sub-Administrator:
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a. Oversee the determination and publication of the Company's net asset
value in accordance with the Company's policy as adopted from time to time by
the Board;
b. Oversee the maintenance by the Company's custodian of certain books and
records of the Company as required under Rule 31a-1(b) of the 1940 Act;
c. Prepare the Company's federal, state and local income tax returns for
review by the Company's independent accountants and filing by the Company's
treasurer;
d. Review calculation, submit for approval by officers of the Company and
arrange for payment of the Company's expenses;
e. Prepare for review and approval by officers of the Company financial
information for the Company's semi-annual and annual reports, proxy statements
and other communications required or otherwise to be sent to Company
shareholders, and arrange for the printing and dissemination of such reports and
communications to shareholders;
f. Prepare for review by an officer of and legal counsel for the Company
the Company's periodic financial reports required to be filed with the
Securities and Exchange Commission ("SEC") as parts of Form 10K and 10Q. Other
than the financial statements, the Adviser is responsible for preparing Forms
10K and 10Q.
g. Prepare reports relating to the business and affairs of the Company as
may be mutually agreed upon and not otherwise prepared by the Company's
investment adviser, custodian, legal counsel or independent accountants;
h. Make such reports and recommendations to the Board concerning the
performance of the independent accountants as the Board may reasonably request;
i. Make such reports and recommendations to the Board concerning the
performance and fees of the Company's custodian and transfer and dividend
disbursing agent ("Transfer Agent") as the Board may reasonably request or deems
appropriate;
j. Oversee and review calculations of fees paid to the Company's investment
adviser, custodian and Transfer Agent;
k. Consult with the Company's officers, independent accountants, legal
counsel, custodian and Transfer Agent in establishing the accounting policies of
the Company;
l. Respond to, or refer to the Company's officers or Transfer Agent,
shareholder inquiries relating to the Company;
m. Provide periodic testing of portfolios to assist the Company's investment
adviser in complying with Internal Revenue Code mandatory qualification
requirements, the requirements of the 1940 Act and Company prospectus
limitations as may be mutually agreed upon;
n. Review and provide assistance on shareholder communications;
o. Maintain general corporate calendar;
p. Maintain copies of the Company's charter and by-laws;
q. File annual and semi-annual shareholder reports with the appropriate
regulatory agencies; review text of "President's letters" to shareholders and
"Management's Discussion of Company Performance" (which shall also be subject to
review by the Company's legal counsel);
r. Organize, attend and prepare minutes of shareholder meetings;
s. Provide consultation on regulatory matters relating to portfolio
management, Company operations and any potential changes in the Company's
investment policies, operations or structure; act as
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liaison to legal counsel to the Company and, where applicable, to legal counsel
to the Company's independent Board members;
t. Maintain continuing awareness of significant emerging regulatory and
legislative developments which may affect the Company, update the Board and the
investment adviser on those developments and provide related planning assistance
where requested or appropriate;
u. Develop or assist in developing guidelines and procedures to improve
overall compliance by the Company and its various agents;
v. Counsel and assist the Company in the handling of routine regulatory
examinations and work closely with the Company's legal counsel in response to
any non-routine regulatory matters;
w. Review implementation of any dividend reinvestment program authorized by
the Board;
Subject to review and comment by the Company's legal counsel:
x. Prepare and file with the SEC amendments to the Company's registration
statement, including updating the Prospectus and Statement of Additional
Information, where applicable;
y. Prepare and file with the SEC proxy statements; provide consultation on
proxy solicitation matters;
z. Prepare agenda and background materials for Board meetings, make
presentations where appropriate, prepare minutes and follow-up on matters raised
at Board meetings; and
aa. Prepare and file with the SEC Rule 24f-2 notices.
The Sub-Administrator shall provide the office facilities and the personnel
required by it to perform the services contemplated herein.
6. FEES; EXPENSES; EXPENSE REIMBURSEMENT
The Sub-Administrator shall receive from the Adviser such compensation for
the Sub-Administrator's services provided pursuant to this Agreement as may be
agreed to from time to time in a written fee schedule approved by the parties
and initially set forth in the Fee Schedule to this Agreement. The fees are
accrued daily and billed monthly and shall be due and payable upon receipt of
the invoice. Upon the termination of this Agreement before the end of any month,
the fee for the part of the month before such termination shall be prorated
according to the proportion which such part bears to the full monthly period and
shall be payable upon the date of termination of this Agreement. In addition,
the Adviser shall reimburse the Sub-Administrator for its out-of-pocket costs
incurred in connection with this Agreement.
The Adviser agrees promptly to reimburse the Sub-Administrator for any
equipment and supplies specially ordered by or for the Company through the
Sub-Administrator and for any other expenses not contemplated by this Agreement
that the Sub-Administrator may incur on the Company's behalf at the Company's
request or with the Company's consent.
In connection herewith, the Company hereby guaranties full payment and
punctual performance and fulfillment to the Sub-Administrator of all
liabilities, obligations and undertakings of the Adviser to the
Sub-Administrator, whether direct or indirect, absolute or contingent, due or to
become due, now existing of hereafter arising or acquired, under any fee
schedule regarding any service provided by the Sub-Administrator for the benefit
of the Company or any cost, expense disbursement relative thereto, and all
present or future agreements arising from, or relative to, the subject matter
thereof. The guaranty contained herein shall survive the termination of this
Agreement.
The Company or the Adviser will bear all expenses that are incurred in its
operation and not specifically assumed by the Sub-Administrator. Expenses to be
borne by the Company or the Adviser,
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include, but are not limited to: organizational expenses; cost of services of
independent accountants and outside legal and tax counsel (including such
counsel's review of the Company's registration statement, proxy materials,
federal and state tax qualification as a regulated investment company and other
reports and materials prepared by the Administrator under this Agreement); cost
of any services contracted for by the Company directly from parties other than
the Administrator; cost of trading operations and brokerage fees, commissions
and transfer taxes in connection with the purchase and sale of securities for
the Company; investment advisory fees; taxes, insurance premiums and other fees
and expenses applicable to its operation; costs incidental to any meetings of
shareholders including, but not limited to, legal and accounting fees, proxy
filing fees and the costs of preparation, printing and mailing of any proxy
materials; costs incidental to Board meetings, including fees and expenses of
Board members; the salary and expenses of any officer, director/trustee or
employee of the Company; costs incidental to the preparation, printing and
distribution of the Company's registration statements and any amendments thereto
and shareholder reports; cost of typesetting and printing of prospectuses; cost
of preparation and filing of the Company's tax returns, Form N-2 and Form N-SAR,
and all notices, registrations and amendments associated with applicable federal
and state tax and securities laws; all applicable registration fees and filing
fees required under federal and state securities laws; fidelity bond and
directors' and officers' liability insurance; and cost of independent pricing
services used in computing the Company's net asset value.
The Sub-Administrator is authorized to and may employ or associate with such
person or persons as the Sub-Administrator may deem desirable to assist it in
performing its duties under this Agreement; provided, however, that the
compensation of such person or persons shall be paid by the Sub-Administrator
and that the Sub-Administrator shall be as fully responsible to the Adviser for
the acts and omissions of any such person or persons as it is for its own acts
and omissions.
7. INSTRUCTIONS AND ADVICE
At any time, the Sub-Administrator may apply to any officer of the Company
for instructions and may consult with its own legal counsel or outside counsel
for the Company or the independent accountants for the Company at the expense of
the Adviser, with respect to any matter arising in connection with the services
to be performed by the Sub-Administrator under this Agreement. The
Sub-Administrator shall not be liable, and shall be indemnified by the Adviser,
for any action taken or omitted by it in good faith in reliance upon any such
instructions or advice or upon any paper or document believed by it to be
genuine and to have been signed by the proper person or persons. The
Sub-Administrator shall not be held to have notice of any change of authority of
any person until receipt of written notice thereof from the Adviser. Nothing in
this paragraph shall be construed as imposing upon the Sub-Administrator any
obligation to seek such instructions or advice, or to act in accordance with
such advice when received.
8. LIMITATION OF LIABILITY AND INDEMNIFICATION
The Sub-Administrator shall be responsible for the performance of only such
duties as are set forth in this Agreement and, except as otherwise provided
under Section 6, shall have no responsibility for the actions or activities of
any other party, including other service providers. The Sub-Administrator shall
have no liability for any error of judgment or mistake of law or for any loss or
damage resulting from the performance or nonperformance of its duties hereunder
unless solely caused by or resulting from the gross negligence or willful
misconduct of the Sub-Administrator, its officers or employees. The
Sub-Administrator shall not be liable for any special, indirect, incidental, or
consequential damages of any kind whatsoever (including, without limitation,
attorneys' fees) under any provision of this Agreement or for any such damages
arising out of any act or failure to act hereunder. In any event, the Sub-
Administrator's liability under this Agreement shall be limited to its total
annual compensation earned and fees paid hereunder during the preceding twelve
months for any liability or loss suffered by the Company including, but not
limited to, any liability relating to qualification of the Company as a
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regulated investment company or any liability relating to the Company's
compliance with any federal or state tax or securities statute, regulation or
ruling.
The Sub-Administrator shall not be responsible or liable for any failure or
delay in performance of its obligations under this Agreement arising out of or
caused, directly or indirectly, by circumstances beyond its control, including
without limitation, work stoppage, power or other mechanical failure, computer
virus, natural disaster, governmental action or communication disruption.
The Adviser and the Company shall indemnify and hold the Sub-Administrator
harmless from all loss, cost, damage and expense, including reasonable fees and
expenses for counsel, incurred by the Sub-Administrator resulting from any
claim, demand, action or suit in connection with the Sub-Administrator's
acceptance of this Agreement, any action or omission by it in the performance of
its duties hereunder, or as a result of acting upon any instructions reasonably
believed by it to have been duly authorized by the Company, provided that this
indemnification shall not apply to actions or omissions of the
Sub-Administrator, its officers or employees in cases of its or their own gross
negligence or willful misconduct.
The indemnification contained herein shall survive the termination of this
Agreement.
9. CONFIDENTIALITY
The Sub-Administrator agrees that, except as otherwise required by law or in
connection with any required disclosure to a banking or other regulatory
authority, it will keep confidential all records and information in its
possession relating to the Company or its shareholders or shareholder accounts
and will not disclose the same to any person except at the request or with the
written consent of the Company.
10. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS; RECORDS
The Company assumes full responsibility for complying with all securities,
tax, commodities and other laws, rules and regulations applicable to it.
In compliance with the requirements of Rule 31a-3 under the 1940 Act, the
Sub-Administrator agrees that all records which it maintains for the Company
shall at all times remain the property of the Company, shall be readily
accessible during normal business hours, and shall be promptly surrendered upon
the termination of the Agreement or otherwise on written request. The
Sub-Administrator further agrees that all records which it maintains for the
Company pursuant to Rule 31a-1 under the 1940 Act will be preserved for the
periods prescribed by Rule 31a-2 under the 1940 Act unless any such records are
earlier surrendered as provided above. Records shall be surrendered in usable
machine-readable form.
11. SERVICES NOT EXCLUSIVE
The services of the Sub-Administrator to the Company are not to be deemed
exclusive, and the Sub-Administrator shall be free to render similar services to
others. The Sub-Administrator shall be deemed to be an independent contractor
and shall, unless otherwise expressly provided herein or authorized by the
Company from time to time, have no authority to act or represent the Company in
any way or otherwise be deemed an agent of the Company.
12. TERM, TERMINATION AND AMENDMENT
This Agreement shall become effective on the date of its execution and shall
remain in full force and effect for a period of two years from the effective
date and shall automatically continue in full force and effect after such
initial term unless either party terminates this Agreement by written notice to
the other party at least sixty (60) days prior to the expiration of the initial
term. Either party may terminate this Agreement at any time after the initial
term upon at least sixty (60) days' prior written notice to the other party.
Termination of this Agreement with respect to any given Investment Fund
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shall in no way affect the continued validity of this Agreement with respect to
any other Investment Fund. Upon termination of this Agreement, the Adviser shall
pay to the Sub-Administrator such compensation and any reimbursable expenses as
may be due under the terms hereof as of the date of such termination, including
reasonable out-of-pocket expenses associated with such termination. This
Agreement may be modified or amended from time to time by mutual written
agreement of the parties hereto.
13. NOTICES
Any notice or other communication authorized or required by this Agreement
to be given to either party shall be in writing and deemed to have been given
when delivered in person or by confirmed facsimile, or posted by certified mail,
return receipt requested, to the following address (or such other address as a
party may specify by written notice to the other): if to the Company: meVC Delta
Life Sciences Fund I, Inc., 000 Xxxxxx Xx., Xxx Xxxxxxxxx, XX 00000;
Attn: , fax: ; if to the Adviser: meVC Advisers, Inc.,
Attn: , fax: ; if to the Administrator: State Street
Bank and Trust Company, 0 Xxxxxx xx Xxxxxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000,
Attn: Fund Administration Legal Department, fax: 000-000-0000.
14. NON-ASSIGNABILITY
This Agreement shall not be assigned by either party hereto without the
prior consent in writing of the other party, except that the Sub-Administrator
may assign this Agreement to a successor of all or a substantial portion of its
business, or to a party controlling, controlled by or under common control with
the Sub-Administrator.
15. SUCCESSORS
This Agreement shall be binding on and shall inure to the benefit of the
Company and the Sub-Administrator and their respective successors and permitted
assigns.
16. ENTIRE AGREEMENT
This Agreement contains the entire understanding between the parties hereto
with respect to the subject matter hereof and supersedes all previous
representations, warranties or commitments regarding the services to be
performed hereunder whether oral or in writing.
17. WAIVER
The failure of a party to insist upon strict adherence to any term of this
Agreement on any occasion shall not be considered a waiver nor shall it deprive
such party of the right thereafter to insist upon strict adherence to that term
or any term of this Agreement. Any waiver must be in writing signed by the
waiving party.
18. SEVERABILITY
If any provision of this Agreement is invalid or unenforceable, the balance
of the Agreement shall remain in effect, and if any provision is inapplicable to
any person or circumstance it shall nevertheless remain applicable to all other
persons and circumstances.
19. GOVERNING LAW
This Agreement shall be construed and the provisions thereof interpreted
under and in accordance with the laws of The Commonwealth of Massachusetts.
20. REPRODUCTION OF DOCUMENTS
This Agreement and all schedules, exhibits, attachments and amendments
hereto may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties hereto
all/each agree that any such reproduction shall be admissible in evidence as
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the original itself in any judicial or administrative proceeding, whether or not
the original is in existence and whether or not such reproduction was made by a
party in the regular course of business, and that any enlargement, facsimile or
further reproduction of such reproduction shall likewise be admissible in
evidence.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the date first written above.
meVC ADVISERS, INC.
By:
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Name:
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Title:
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meVC DELTA LIFE SCIENCES FUND I, INC.
By:
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Name:
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Title:
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STATE STREET BANK AND TRUST COMPANY
By:
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Name: Xxxxxxxx X. Xxxxxxx
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Title: Senior Vice President
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SCHEDULE A
LISTING OF INVESTMENT FUNDS AND AUTHORIZED SHARES
INVESTMENT FUND AUTHORIZED SHARES
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