DRAFT DATED DECEMBER 8, 1999
INVESTMENT ADVISORY AGREEMENT
THIS INVESTMENT ADVISORY AGREEMENT (this "Agreement") is entered
into and made effective as of the ___ day of _____________, 1999 by and
between meVC XXXXXX XXXXXX JURVETSON FUND I, INC., a Delaware corporation
(the "Fund"), and meVC ADVISERS, INC., a Delaware corporation ("Adviser").
W I T N E S S E T H:
WHEREAS, the Fund is a non-diversified closed-end management
investment company that has elected to be regulated as a business development
company pursuant to the provisions of the Investment Company Act of 1940, as
amended, and the rules and regulations promulgated thereunder (the
"Investment Company Act"); and
WHEREAS, Adviser is a registered investment adviser pursuant to the
Investment Advisers Act of 1940, as amended, and the rules and regulations
promulgated thereunder (the "Advisers Act"); and
WHEREAS, Adviser desires to serve as the Fund's investment adviser
and, in connection therewith, to perform certain services for the Fund with
respect to the administration of the Fund and its investment activities, in
all cases under the supervision and control of the Fund's Board of Directors
and on the terms and subject to the conditions set forth herein; and
WHEREAS, the Fund desires to retain Adviser to serve as its
investment adviser and, in connection therewith, to perform certain
administrative and investment advisory services under the supervision of the
Fund's Board of Directors and on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements of the parties hereto as herein set forth, the parties covenant
and agree as follows:
1. APPOINTMENT OF ADVISER; DUTIES OF ADVISER.
(a) The Fund hereby retains Adviser to serve as its investment
adviser for the period and on the terms and subject to the conditions as set
forth in this Agreement.
(b) Subject to the supervision and control by the Fund's Board of
Directors, Adviser shall:
(i) manage the Fund's day-to-day operations and
administration, record keeping and regulatory compliance functions.
Without limiting the generality of the foregoing, Adviser shall
specifically be responsible for (A) preparing periodic financial
statements; (B) preparing financial and accounting reports for
presentation to the Fund's Board of Directors and shareholders and
governmental agencies; (C) calculating and publishing the Fund's net
asset value per share; (D) overseeing the preparation and filing of the
Fund's tax returns; (E) preparing and providing such reports to the
Fund's Board of Directors and shareholders as may from time to time be
considered necessary or appropriate by the Fund's Board of Directors or
by Adviser; (F) overseeing the payment of the Fund's expenses and the
performance of administrative and professional services rendered to the
Fund by others; (G) preparing an annual proxy statement and conducting
the annual meeting of stockholders of the Fund; and (H) managing such
other operational, administrative and regulatory compliance duties as
shall from time to time arise as a result of the Fund's operations and
investing activities; and
(ii) (A) manage the investment and reinvestment of the Fund's
assets; (B) continuously review, supervise and administer the Fund's
investment program to determine in its discretion the securities to be
purchased or sold and the portion of the Fund's assets to be held
uninvested; (C) provide the Fund with all required records concerning
Adviser's efforts on behalf of the Fund; and (D) provide regular
reports to the Fund's Board of Directors concerning Adviser's
activities on behalf of the Fund.
2. ACCEPTANCE BY ADVISER. Adviser hereby accepts appointment as
investment adviser to the Fund on the terms and conditions set forth on this
Agreement, and agrees to discharge the foregoing responsibilities in compliance
with the investment objectives, policies and limitations set forth in the Fund's
prospectus (as it may be amended or supplemented from time to time, the
"Prospectus") and applicable laws and regulations, and under the supervision and
control of the Fund's Board of Directors.
3. CONTRACTING FOR SUB-ADVISORY SERVICES.
(a) Adviser may, subject to compliance with the provisions of the
Investment Company Act, contract with an investment sub-adviser to assist
Adviser in the performance of its duties under this Agreement.
(b) In the event Adviser elects to retain an investment sub-adviser
pursuant to this Section 3, Adviser specifically acknowledges and agrees as
follows:
(i) compensation for services provided and reimbursement of
the expenses of any such investment sub-advisor shall be the sole
responsibility and obligation of Adviser;
(ii) any contract or other agreement, whether oral or written,
entered into between Adviser and any such sub-adviser shall be between
those parties solely and shall not operate to relieve Adviser of any of
its obligations to the Fund or any liability it might otherwise have
under or pursuant to this Agreement, all of which shall remain the sole
responsibility and obligation of Adviser; and
(iii) in the event a contract or agreement between Adviser and
any such sub-adviser includes one or more provisions for the benefit of
the Fund as a third-party beneficiary, Adviser shall enforce such
provisions on behalf of the Fund to the same degree as it would enforce
any other provision of such agreement on its own behalf.
4. COMPENSATION.
(a) In compensation for Adviser's services as set forth in this
Agreement, the Fund shall pay to Adviser an annual management fee equal to 2.5%
of the Fund's net assets (the "Management Fee"). The Management Fee shall be
computed on the basis of the Fund's average weekly net assets and shall be paid
to Adviser in twelve equal installments on the last business day of each
calendar month.
(b) As further compensation for Adviser's services, the Fund shall pay
to Adviser annual incentive compensation (the "Incentive Fee") in an amount
equal to twenty percent (20%) of the Fund's annual realized capital gains on its
investments, net of realized losses and unrealized capital depreciation. The
Incentive Fee shall be paid to Adviser from time to time as determined by the
Board of Directors of the Fund.
(c) In the event this Agreement is terminated, any compensation to
which Adviser may be entitled to receive pursuant to this Section 4 shall be
computed as of the period ending on the last business day on which this
Agreement is in effect, subject to pro rata adjustment based on the number of
days elapsed in the current month as a percentage of the total number of days in
such month.
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5. EXPENSES. Adviser shall pay all of its own costs and expenses,
including such costs and expenses as Adviser may incur in the performance of its
duties pursuant to this Agreement.
6. LIMITATION OF LIABILITY. In the absence of: (i) willful misfeasance,
bad faith or gross negligence on the part of Adviser in the performance of its
obligations and duties hereunder; (ii) reckless disregard by Adviser of its
obligations and duties hereunder; or (iii) a loss resulting from a breach of
fiduciary duty with respect to the receipt of compensation for services (in
which case any award of damages shall be limited to the period and the amount
set forth in Section 36(b)(3) of the Investment Company Act), Adviser shall not
be subject to liability to the Fund or any of its stockholders for any error of
judgment, mistake of law or any other act or omission in the course of, or
connected with, its rendering of services hereunder including, without
limitation, for any losses that may be sustained in connection with the
purchase, holding, redemption or sale of any security by Adviser on behalf of
the Fund.
7. EXCLUSIVITY. The services provided by Adviser hereunder are not
exclusive and Adviser shall therefore remain free to render such services to
others.
8. RECORDS. Adviser agrees to preserve the records required by Rule
204-2 promulgated under the Advisers Act for the period specified therein.
9. WRITTEN DISCLOSURE STATEMENT. Adviser has previously delivered to
the Fund a written disclosure statement as required by Section 204-3(a) of the
Advisers Act in the form of either a copy of Part II of Adviser's Form ADV which
complies with Section 204-1(b) of the Advisers Act or a written document
containing at least the information required by Part II of Form ADV. Such
written disclosure statement was delivered by Adviser to the Fund within the
time period specified by Section 204-1(b) of the Advisers Act.
10. DURATION. This Agreement shall be effective beginning on the date
set forth in the preamble hereof, and shall remain in force for an initial
period of two (2) years. Upon expiration of the initial term, the term of this
Agreement shall be automatically extended for successive one (1) year periods,
PROVIDED, that each such one (1) year extension is approved by the Fund's Board
of Directors or by the holders of at least a majority of the Fund's outstanding
voting securities.
11. TERMINATION.
(a) This Agreement may be terminated by (i) the Fund's Board of
Directors or (ii) the holders of a majority of the Fund's outstanding voting
securities at any time and without penalty, upon delivery of written notice of
such termination at least sixty (60) days prior to the termination date.
(b) This Agreement may be terminated by Adviser at any time and without
penalty, upon delivery of written notice of such termination at least sixty (60)
days prior to the termination date.
(c) This Agreement shall immediately and automatically terminate in the
event of its assignment without the written consent of the Fund.
12. AMENDMENTS. This Agreement may be amended with the mutual consent
of the parties; PROVIDED, HOWEVER, that the Fund shall not consent to any such
amendment unless such amendment shall be approved by (i) a majority of the
Fund's directors, (ii) a majority the Fund's disinterested directors and (iii)
the holders of a majority of the Fund's outstanding voting securities.
13. AGENCY RELATIONSHIP. Nothing herein shall be construed so as to
constitute Adviser as an agent of the Fund.
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14. SEVERABILITY. If any term or condition of this Agreement shall be
found to be invalid or unenforceable to any extent or in any application, the
remainder of this Agreement, including such term or condition, except to the
extent or in such application such term or condition is held invalid or
unenforceable, shall not be affected thereby, and each and every term and
condition of this Agreement shall be valid and enforceable to the fullest extent
and in the broadest application permitted by law.
15. CAPTIONS. The captions of this Agreement are included for
convenience only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect.
16. DEFINITIONS. For purposes of this Agreement, "majority of the
outstanding voting securities," "assignment" and "interested person" shall have
the respective meanings assigned to them in the Investment Company Act, subject,
however, to such exemptions as may be granted by the Securities and Exchange
Commission pursuant to its rule-making authority as set forth in the Investment
Company Act or the Advisers Act, as the case may be.
17. NOTICES. All notices required or permitted to be delivered under or
pursuant to this Agreement shall be so delivered by certified mail, postage
prepaid, as follows:
If to Adviser: meVC Advisers, Inc.
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Attn: Secretary
If to the Fund: meVC Xxxxxx Xxxxxx Jurvetson Fund I, Inc.
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Attn: Secretary
with a copy to: Pillsbury Madison & Sutro LLP
00 Xxxxxxx Xx., 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxx, Esq.
Any notice delivered pursuant to this Section 17 shall be deemed
delivered on the third day following its deposit in the United States mail or
the date such notice is actually received by the addressee, whichever shall
occur first.
18. ENTIRE AGREEMENT. This Agreement contains the entire agreement of
the parties with respect to the matters referred to herein and supersedes all
prior agreements, negotiations, commitments or understandings.
19. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be taken to be
an original and together shall constitute one and the same document.
20. GOVERNING LAW. This Agreement shall be construed in accordance with
the laws of the State of Delaware and the applicable provisions of the
Investment Company Act and the Investment Advisers Act.
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IN WITNESS WHEREOF, the undersigned have executed and delivered this
Agreement as of the date first above written.
MEVC XXXXXX XXXXXX JURVETSON
FUND I, INC.
By_______________________________________
Xxxxxx X. Xxxxxx
President
MEVC ADVISERS, INC.
By_______________________________________
Xxxxx X. Xxxxxxxxxxx
Chairman of the Board
and President
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