Garrison Capital, Inc., et al.; Notice of Application, 75846-75850 [2014-29697]
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75846
Federal Register / Vol. 79, No. 244 / Friday, December 19, 2014 / Notices
submissions to remove identifying or
contact information.
If you are requesting or aggregating
comments from other persons for
submission to the NRC, then you should
inform those persons not to include
identifying or contact information in
their comment submissions that they
do not want to be publicly disclosed.
Your request should state that the NRC
will not edit comment submissions to
remove such information before making
the comment submissions available to
the public or entering the comment
submissions into ADAMS.
II. Background
The NRC is requesting comment on
these draft EPFAQs. This process is
intended to describe the manner in
which the NRC may provide interested
outside parties an opportunity to share
their individual views with NRC staff
regarding the appropriate response to
questions raised on the interpretation or
applicability of EP guidance issued or
endorsed by the NRC, before the NRC
issues an official response to such
questions.
Dated at Rockville, Maryland on December
9, 2014.
For the U.S. Nuclear Regulatory
Commission.
James Andersen,
Deputy Director, Division of Preparedness and
Response, Office of Nuclear Security and
Incident Response.
[FR Doc. 2014–29749 Filed 12–18–14; 8:45 am]
BILLING CODE 7590–01–P
POSTAL REGULATORY COMMISSION
[Docket Nos. MC2015–19 and CP2015–23;
Order No. 2289]
New Postal Product
Postal Regulatory Commission.
Notice.
AGENCY:
ACTION:
The Commission is noticing a
recent Postal Service filing concerning
the addition of Priority Mail Contract
104 negotiated service agreement to the
competitive product list. This notice
informs the public of the filing, invites
public comment, and takes other
administrative steps.
DATES: Comments are due: December
22, 2014.
ADDRESSES: Submit comments
electronically via the Commission’s
Filing Online system at https://
www.prc.gov. Those who cannot submit
comments electronically should contact
the person identified in the FOR FURTHER
INFORMATION CONTACT section by
telephone for advice on filing
alternatives.
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SUMMARY:
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FOR FURTHER INFORMATION CONTACT:
David A. Trissell, General Counsel, at
202–789–6820.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Introduction
II. Notice of Commission Action
III. Ordering Paragraphs
I. Introduction
In accordance with 39 U.S.C. 3642
and 39 CFR 3020.30 et seq., the Postal
Service filed a formal request and
associated supporting information to
add Priority Mail Contract 104 to the
competitive product list.1
The Postal Service
contemporaneously filed a redacted
contract related to the proposed new
product under 39 U.S.C. 3632(b)(3) and
39 CFR 3015.5. Id. Attachment B.
To support its Request, the Postal
Service filed a copy of the contract, a
copy of the Governors’ Decision
authorizing the product, proposed
changes to the Mail Classification
Schedule, a Statement of Supporting
Justification, a certification of
compliance with 39 U.S.C. 3633(a), and
an application for non-public treatment
of certain materials. It also filed
supporting financial workpapers.
II. Notice of Commission Action
The Commission establishes Docket
Nos. MC2015–19 and CP2015–23 to
consider the Request pertaining to the
proposed Priority Mail Contract 104
product and the related contract,
respectively.
The Commission invites comments on
whether the Postal Service’s filings in
the captioned dockets are consistent
with the policies of 39 U.S.C. 3632,
3633, or 3642, 39 CFR part 3015, and 39
CFR part 3020, subpart B. Comments are
due no later than December 22, 2014.
The public portions of these filings can
be accessed via the Commission’s Web
site (https://www.prc.gov).
The Commission appoints Kenneth R.
Moeller to serve as Public
Representative in these dockets.
III. Ordering Paragraphs
It is ordered:
1. The Commission establishes Docket
Nos. MC2015–19 and CP2015–23 to
consider the matters raised in each
docket.
2. Pursuant to 39 U.S.C. 505, Kenneth
R. Moeller is appointed to serve as an
officer of the Commission to represent
1 Request of the United States Postal Service to
Add Priority Mail Contract 104 to Competitive
Product List and Notice of Filing (Under Seal) of
Unredacted Governors’ Decision, Contract, and
Supporting Data, December 11, 2014 (Request).
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the interests of the general public in
these proceedings (Public
Representative).
3. Comments are due no later than
December 22, 2014.
4. The Secretary shall arrange for
publication of this order in the Federal
Register.
By the Commission.
Shoshana M. Grove,
Secretary.
[FR Doc. 2014–29695 Filed 12–18–14; 8:45 am]
BILLING CODE 7710–FW–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. IC–31373; File No. 812–14097]
Garrison Capital, Inc., et al.; Notice of
Application
December 15, 2014.
Securities and Exchange
Commission (‘‘Commission’’).
ACTION: Notice of application for an
order under sections 57(a)(4) and 57(i)
of the Investment Company Act of 1940
(the ‘‘Act’’) and rule 17d–1 under the
Act to permit certain joint transactions
otherwise prohibited by section 57(a)(4)
of the Act and rule 17d–1 under the Act.
AGENCY:
Summary of Application:
Applicants request an order to permit
Garrison Capital Inc. to co-invest in
portfolio companies with certain
affiliated investment funds.
APPLICANTS: Garrison Capital Inc. (the
‘‘Company’’), Garrison Funding 2013–2
Ltd. (‘‘GF 2013–2’’), Garrison Capital
SBIC LP (‘‘Garrison SBIC’’), Garrison
Capital SBIC Holdco Inc., Garrison
Capital SBIC General Partner LLC,
Garrison Middle Market Funding LP,
Garrison Middle Market Funding A LP,
Garrison Opportunity Fund III B L.P.,
Garrison Opportunity Fund IV A LLC
and Garrison Opportunity Fund IV B
L.P. (collectively with Garrison Middle
Market Funding LP, Garrison Middle
Market Fund A LP, Garrison
Opportunity Fund III B L.P. and
Garrison Opportunity Fund IV A LLC,
the ‘‘Existing Funds’’), Garrison Capital
Advisers LLC (the ‘‘Company Adviser’’),
Garrison Investment Management LLC
(the ‘‘Fund Adviser’’) and Garrison
Investment Group LP (collectively, the
‘‘Applicants’’).
SUMMARY:
Filing Dates: The application was
filed on November 21, 2012, and
amended on February 25, 2013, August
12, 2013, January 16, 2014, May 21,
2014, August 26, 2014 and December
11, 2014.
DATES:
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Federal Register / Vol. 79, No. 244 / Friday, December 19, 2014 / Notices
An
order granting the requested relief will
be issued unless the Commission orders
a hearing. Interested persons may
request a hearing by writing to the
Commission’s Secretary and serving
applicants with a copy of the request,
personally or by mail. Hearing requests
should be received by the Commission
by 5:30 p.m. on January 9, 2015, and
should be accompanied by proof of
service on applicants, in the form of an
affidavit or, for lawyers, a certificate of
service. Pursuant to rule 0–5 under the
Act, hearing requests should state the
nature of the writer’s interest, any facts
bearing upon the desirability of a
hearing on the matter, the reason for the
request, and the issues contested.
Persons who wish to be notified of a
hearing may request notification by
writing to the Commission’s Secretary.
ADDRESSES: Secretary, U.S. Securities
and Exchange Commission, 100 F St.
NE., Washington, DC 20549–1090.
Applicants: Garrison Investment Group
LP, 1290 Avenue of the Americas, Suite
914, New York, NY 10104.
FOR FURTHER INFORMATION CONTACT:
Barbara T. Heussler, Senior Counsel, at
(202) 551–6813 or Mary Kay Frech,
Branch Chief, at (202) 551–6821 (Chief
Counsel’s Office, Division of Investment
Management).
SUPPLEMENTARY INFORMATION: The
following is a summary of the
application. The complete application
may be obtained via the Commission’s
Web site by searching for the file
number, or for an applicant using the
Company name box, at https://
www.sec.gov/search/search.htm or by
calling (202) 551–8090.
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HEARING OR NOTIFICATION OF HEARING:
Applicants’ Representations
1. The Company is a closed-end
management investment company that
has elected to be regulated as a business
development company (‘‘BDC’’) under
the Act. A majority of the directors of
the Company are persons who are not
‘‘interested persons’’ as defined in
section 2(a)(19) of the Act
(‘‘Independent Directors’’). The
Company Adviser is registered as an
investment adviser under the
Investment Advisers Act of 1940 (the
‘‘Advisers Act’’) and serves as the
investment adviser to the Company
pursuant to an investment advisory
agreement (the ‘‘Company Advisory
Agreement’’).
2. The Company’s Objectives and
Strategies 1 are to generate current
1 ‘‘Objectives and Strategies’’ means the
investment objectives and strategies of the
Company, as described in the Company’s
registration statement on Form N–2, other filings
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income and capital appreciation by
making investments generally in the
range of $5 million to $25 million
primarily in debt securities of U.S.based middle-market companies, which
the Company defines as those having
annual earnings before interest, taxes
and depreciation of between $5 million
and $30 million.
3. Garrison Middle Market Funding
LP and Garrison Middle Market
Funding A LP are Delaware limited
partnerships and are excluded from the
definition of investment company by
section 3(c)(7) of the Act. Garrison
Opportunity Fund III B L.P. and
Garrison Opportunity Fund IV B L.P. are
Cayman Islands limited partnerships
and are excluded from the definition of
investment company by section 3(c)(7)
of the Act. Garrison Opportunity Fund
IV A LLC is a Delaware limited liability
company and is excluded from the
definition of investment company by
section 3(c)(7) of the Act. The Existing
Funds seek to invest primarily in
middle-market companies and
institutions. Each of the Funds 2 has or
will have investment objectives and
strategies that are similar to or overlap
with the Objectives and Strategies of the
Company. To the extent there is an
investment opportunity that falls within
the Objectives and Strategies of the
Company and the investment objectives
and strategies of one or more of the
Funds, the Advisers would expect the
Company and such Funds to co-invest
with each other, with certain exceptions
based on available capital or
diversification. The Company, however,
will not be obligated to invest, or coinvest, when investment opportunities
are referred to it.
4. The Fund Adviser, a registered
investment adviser under the Advisers
Act, manages the investment activities
of the Existing Funds pursuant to
investment advisory agreement (together
with the Company Advisory Agreement,
the ‘‘Advisory Agreements’’). The Fund
Adviser and the Company Adviser are
indirectly controlled by Garrison
Investment Group LP, a registered
investment adviser under the Advisers
the Company has made with the Commission under
the Securities Act of 1933 (‘‘1933 Act’’), or under
the Securities Exchange Act of 1934, or in reports
to its shareholders.
2 ‘‘Fund’’ means any (i) Existing Fund or (ii)
Future Fund. ‘‘Future Fund’’ means an entity (i)
whose investment adviser is an Adviser, and (ii)
that would be an investment company but for
sections 3(c)(1) or 3(c)(7) of the Act. The term
‘‘Adviser’’ means the Company Adviser, the Fund
Adviser and any future investment adviser
controlling, controlled by or under common control
with the Company Adviser that is registered as an
investment adviser under the Advisers Act.
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75847
Act, which is controlled by Steven
Stuart and Joseph Tansey.
5. Applicants seek an order (‘‘Order’’)
under sections 57(a)(4) and 57(i) of the
Act and rule 17d–1 under the Act to
permit the Company, on the one hand,
and one or more Funds, on the other
hand, to participate in the same
investment opportunities through a
proposed co-investment program where
such participation would otherwise be
prohibited by section 57(a)(4) of the Act
and rule 17d–1 under the Act.3 ‘‘CoInvestment Transaction’’ means any
transaction in which the Company (or a
Wholly-Owned Investment Subsidiary,
as defined below) participated together
with one or more Funds in reliance on
the requested Order. ‘‘Potential CoInvestment Transaction’’ means any
investment opportunity in which the
Company (or a Wholly-Owned
Investment Subsidiary) could not
participate together with one or more
Funds without obtaining and relying on
the Order.
6. The Company may, from time to
time, form a special purpose subsidiary
(a ‘‘Wholly-Owned Investment
Subsidiary’’).4 A Fund would be
prohibited from investing in a CoInvestment Transaction with any
Wholly-Owned Investment Subsidiary
because the Wholly-Owned Investment
Subsidiary would be a company
controlled by the Company for purposes
of section 57(a)(4) of the Act and rule
17d–1 under the Act. Applicants request
that a Wholly-Owned Investment
Subsidiary be permitted to participate in
Co-Investment Transactions in lieu of
the Company and that the WhollyOwned Investment Subsidiary’s
participation in any such transaction be
treated, for purposes of the order, as
3 All existing entities that currently intend to rely
upon the Order have been named as applicants and
any entity that may rely on the Order in the future
will comply with the terms and conditions of the
application.
4 The term ‘‘Wholly-Owned Investment
Subsidiary’’ means an entity (a) whose sole
business purposes are to hold one or more
investments and issue debt on behalf of the
Company (and, in the case of an SBIC Subsidiary,
maintain a license under the Small Business
Investment Act of 1958, as amended (the ‘‘SBA
Act’’) and issue debentures guaranteed by the Small
Business Administration (the ‘‘SBA’’)); (b) that is
wholly-owned by the Company (with the Company
at all times beneficially holding, directly or
indirectly, 100% of the voting and economic
interests); (c) with respect to which the Company’s
board of directors (‘‘Board’’) has the sole authority
to make all determinations with respect to the
Wholly-Owned Investment Subsidiary’s
participation under the conditions to the
application; and (d) that is an entity that would be
an investment company but for sections 3(c)(1) or
3(c)(7) of the Act. ‘‘SBIC Subsidiary’’ means a
Wholly-Owned Investment Subsidiary that is
licensed by the SBA to operate under the SBA Act
as a small business investment company.
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though the Company were participating
directly. Applicants represent that this
treatment is justified because a WhollyOwned Investment Subsidiary would
have no purpose other than serving as
a holding vehicle for the Company’s
investments and issuing debt on behalf
of the Company and, therefore, no
conflicts of interest could arise between
the Company and the Wholly-Owned
Investment Subsidiary. The Board
would make all relevant determinations
under the conditions with regard to a
Wholly-Owned Investment Subsidiary’s
participation in a Co-Investment
Transaction, and the Board would be
informed of, and take into
consideration, any proposed use of a
Wholly-Owned Investment Subsidiary
in the Company’s place. If the Company
proposes to participate in the same CoInvestment Transaction with any of its
Wholly-Owned Investment Subsidiaries,
the Board will also be informed of, and
take into consideration, the relative
participation of the Company and the
Wholly-Owned Investment Subsidiary.
GF 2013–2 satisfies the definition of
Wholly-Owned Investment Subsidiary
and Garrison SBIC satisfies the
definition of an SBIC Subsidiary.
7. Upon issuance of the Order
investment opportunities that are
presented to the Company are expected
to be referred to the Funds, and vice
versa, and such investment
opportunities may result in a CoInvestment Transaction. For each such
referral, the Company Adviser will
consider only the Objectives and
Strategies, investment restrictions,
regulatory and tax requirements, capital
available for investment (‘‘Available
Capital’’) in the asset class being
allocated, and other pertinent factors
applicable to the Company. Available
Capital consists solely of liquid assets
not held for permanent investment,
including cash, amounts that can
currently be drawn down from lines of
credit, and marketable securities held
for short-term purposes. In addition,
Available Capital would include bona
fide uncalled capital commitments that
can be called by the settlement date of
the Co-Investment Transaction. Except
as described below, each Potential CoInvestment Transaction and the
proposed allocation of such Potential
Co-Investment Transaction would be
approved prior to the actual investment
by the Required Majority.5
8. With respect to the pro rata
dispositions and Follow-On
5 ‘‘Required Majority’’ has the meaning provided
in section 57(o) of the Act. ‘‘Eligible Directors’’
means the directors who are eligible to vote under
section 57(o).
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Investments6 provided in conditions 7
and 8, the Company may participate in
a pro rata disposition or Follow-On
Investment without obtaining prior
approval of the Required Majority if,
among other things: (i) The proposed
participation of each Fund and the
Company in such disposition or FollowOn Investment is proportionate to its
outstanding investments in the issuer
immediately preceding the disposition
or Follow-On Investment, as the case
may be; and (ii) the Board has approved
the Company’s participation in pro rata
dispositions and Follow-On Investments
as being in the best interests of the
Company. If the Board does not so
approve, any such disposition or
Follow-On Investment will be submitted
to the Company’s Eligible Directors. The
Board may at any time rescind, suspend
or qualify its approval of pro rata
dispositions and Follow-On Investments
with the result that all dispositions and/
or Follow-On Investments must be
submitted to the Eligible Directors.
9. Applicants state that no
Independent Director will have a
financial interest in any Co-Investment
Transaction or any interest in any issuer
of securities, other than through an
interest (if any) in the securities of the
Company.
Applicants’ Legal Analysis
1. Section 57(a)(4) of the Act prohibits
any person who is related to a BDC in
the manner described in section 57(b)
from participating in joint transactions
with the BDC in contravention of rules
as prescribed by the Commission. Under
section 57(b)(2) of the Act, any person
who is directly or indirectly controlling,
controlled by, or under common control
with a BDC is subject to section 57(a)(4).
Under section 57(b)(1) of the Act, any
person who is controlling, controlled
by, or under common control with, a
director, officer, employee, or member
of an advisory board of a BDC is subject
to section 57(a)(4). Applicants submit
that each of the Existing Funds and any
Future Funds could be deemed to be a
person related to the Company in a
manner described by section 57(b)(2) by
virtue of being under common control
with the Company. Section 57(i) of the
Act provides that, until the Commission
prescribes rules under section 57(a)(4),
the Commission’s rules under section
17(d) of the Act applicable to registered
closed-end investment companies will
be deemed to apply to transactions
6 ‘‘Follow-On Investment’’ means any additional
investment in an existing portfolio company,
including through the exercise of warrants,
conversion privileges or other similar rights to
acquire additional securities of the portfolio
company.
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subject to section 57(a)(4). Because the
Commission has not adopted any rules
under section 57(a)(4), rule 17d–1 also
applies to joint transactions with BDCs.
2. Rule 17d–1 under the Act prohibits
affiliated persons of a registered
investment company from participating
in joint transactions with the company
unless the Commission has granted an
order permitting such transactions. In
passing upon applications under rule
17d–1, the Commission considers
whether the company’s participation in
the joint transaction is consistent with
the provisions, policies, and purposes of
the Act and the extent to which such
participation is on a basis different from
or less advantageous than that of other
participants.
3. Applicants state that in the absence
of the requested relief, the Company
would be, in some circumstances,
limited in its ability to participate in
attractive and appropriate investment
opportunities. Applicants believe that
the proposed terms and conditions will
ensure that the Co-Investment
Transactions are consistent with the
protection of the Company’s
shareholders and with the purposes
intended by the policies and provisions
of the Act. Applicants state that the
Company’s participation in the CoInvestment Transactions will be
consistent with the provisions, policies,
and purposes of the Act and on a basis
that is not different from or less
advantageous than that of other
participants.
Applicants’ Conditions
Applicants agree that the Order will
be subject to the following conditions:
1. Each time an Adviser considers a
Potential Co-Investment Transaction for
a Fund that falls within the Company’s
then-current Objectives and Strategies,
the Company Adviser will make an
independent determination of the
appropriateness of the investment for
the Company in light of the Company’s
then-current circumstances.
2. (a) If the Company Adviser deems
the Company’s participation in any
Potential Co-Investment Transaction to
be appropriate for the Company, it will
then determine an appropriate level of
investment for the Company;
(b) If the aggregate amount
recommended by the Company Adviser
to be invested in the Potential CoInvestment Transaction by the Company
and the Funds, collectively, in the same
transaction, exceeds the amount of the
investment opportunity, the amount
proposed to be invested by each party
will be allocated among them pro rata
based on each party’s Available Capital
in the asset class being allocated, up to
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the amount proposed to be invested by
each party. The Company Adviser will
provide the Eligible Directors with
information concerning each
participating party’s Available Capital to
assist the Eligible Directors with their
review of the Company’s investments
for compliance with these allocation
procedures; and
(c) After making the determinations
required in conditions 1 and 2(a), the
Company Adviser will distribute
written information concerning the
Potential Co-Investment Transaction,
including the amount proposed to be
invested by the Company and each
participating Fund, to the Eligible
Directors for their consideration. The
Company will co-invest with the Funds
only if, prior to participating in the
Potential Co-Investment Transaction, a
Required Majority concludes that:
(i) The terms of the Potential CoInvestment Transaction, including the
consideration to be paid, are reasonable
and fair to the Company and its
stockholders and do not involve
overreaching in respect of the Company
or its stockholders on the part of any
person concerned;
(ii) The Potential Co-Investment
Transaction is consistent with:
(A) The interests of the stockholders
of the Company; and
(B) The Company’s then-current
Objectives and Strategies;
(iii) The investment by the Funds
would not disadvantage the Company,
and participation by the Company
would not be on a basis different from
or less advantageous than that of the
Funds; provided, that if any Fund, but
not the Company, gains the right to
nominate a director for election to a
portfolio company’s board of directors
or the right to have a board observer or
any similar right to participate in the
governance or management of the
portfolio company, such event will not
be interpreted to prohibit the Required
Majority from reaching the conclusions
required by this condition (2)(c)(iii), if
(A) The Eligible Directors will have
the right to ratify the selection of such
director or board observer, if any;
(B) The applicable Adviser agrees to,
and does, provide periodic reports to
the Company’s Board with respect to the
actions of the director or the
information received by the board
observer or obtained through the
exercise of any similar right to
participate in the governance or
management of the portfolio company;
and
(C) Any fees or other compensation
that the Funds or any affiliated person
of the Funds receive in connection with
the right of the Funds to nominate a
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director or appoint a board observer or
otherwise to participate in the
governance or management of the
portfolio company will be shared
proportionately among the participating
Funds (which may, in turn, share their
portion with their affiliated persons)
and the Company in accordance with
the amount of each party’s investment;
and
(iv) The proposed investment by the
Company will not benefit the Advisers,
any Fund or any affiliated person of any
of them (other than the parties to the CoInvestment Transaction), except (a) to
the extent permitted by condition 13; (b)
to the extent permitted by section 57(k)
of the Act; (c) indirectly, as a result of
an interest in securities issued by one of
the parties to the Co-Investment
Transaction; or (d) in the case of fees or
other compensation described in
condition 2(c)(iii)(C).
3. The Company has the right to
decline to participate in any Potential
Co-Investment Transaction or to invest
less than the amount proposed.
4. The Company Adviser will present
to the Board, on a quarterly basis, a
record of all investments in Potential
Co-Investment Transactions made by
any of the Funds during the preceding
quarter that fell within the Company’s
then-current Objectives and Strategies
that were not made available to the
Company and an explanation of why the
investment opportunities were not
offered to the Company. All information
presented to the Board pursuant to this
condition will be kept for the life of the
Company and at least two years
thereafter, and will be subject to
examination by the Commission and its
staff.
5. Except for Follow-On Investments
made in accordance with condition 8,
the Company will not invest in reliance
on the Order in any issuer in which any
Fund or any affiliated person thereof is
an existing investor.
6. The Company will not participate
in any Potential Co-Investment
Transaction unless the terms,
conditions, price, class of securities to
be purchased, settlement date and
registration rights will be the same for
the Company and each participating
Fund. The grant to a Fund, but not the
Company, of the right to nominate a
director for election to a portfolio
company’s board of directors, the right
to have an observer on the board of
directors or similar rights to participate
in the governance or management of the
portfolio company will not be
interpreted so as to violate this
condition 6, if conditions 2(c)(iii)(A), (B)
and (C) are met.
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75849
7. (a) If any Fund elects to sell,
exchange or otherwise dispose of an
interest in a security that was acquired
by the Company in a Co-Investment
Transaction, the applicable Adviser
will:
(i) notify the Company of the
proposed disposition at the earliest
practical time; and
(ii) the Company Adviser will
formulate a recommendation as to
participation by the Company in the
disposition.
(b) The Company will have the right
to participate in such disposition on a
proportionate basis, at the same price
and on the same terms and conditions
as those applicable to the participating
Funds.
(c) The Company may participate in
such disposition without obtaining prior
approval of the Required Majority if: (i)
The proposed participation of the
Company and each Fund in such
disposition is proportionate to its
outstanding investments in the issuer
immediately preceding the disposition;
(ii) the Board has approved as being in
the best interests of the Company the
ability to participate in such
dispositions on a pro rata basis (as
described in greater detail in the
application); and (iii) the Board is
provided on a quarterly basis with a list
of all dispositions made in accordance
with this condition. In all other cases,
the Company Adviser shall provide its
written recommendation as to the
Company’s participation to the Eligible
Directors, and the Company will
participate in such disposition solely to
the extent that a Required Majority
determines that it is in the Company’s
best interests.
(d) The Company and each Fund will
bear their own expenses in connection
with any such disposition.
8. (a) If a Fund desires to make a
Follow-On Investment in a portfolio
company whose securities were
acquired in a Co-Investment
Transaction, the applicable Adviser
will:
(i) Notify the Company of the
proposed Follow-On Investment at the
earliest practical time; and
(ii) the Company Adviser will
formulate a recommendation as to the
proposed participation, including the
amount of the proposed Follow-On
Investment, by the Company.
(b) The Company may participate in
such Follow-On Investment without
obtaining prior approval of the Required
Majority if: (i) The proposed
participation of the Company and each
Fund in such investment is
proportionate to its outstanding
investments in the portfolio company
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75850
Federal Register / Vol. 79, No. 244 / Friday, December 19, 2014 / Notices
immediately preceding the Follow-On
Investment; and (ii) the Board has
approved as being in the best interests
of the Company the ability to participate
in Follow-On Investments on a pro rata
basis (as described in greater detail in
the application). In all other cases, the
Company Adviser will provide its
written recommendation as to the
Company’s participation to the Eligible
Directors, and the Company will
participate in such Follow-On
Investment solely to the extent that a
Required Majority determines that it is
in the Company’s best interests.
(c) If, with respect to any Follow-On
Investment:
(i) The amount of the opportunity is
not based on the Company’s and the
Funds’ outstanding investments
immediately preceding the Follow-On
Investment; and
(ii) The aggregate amount
recommended by the Company Adviser
to be invested by the Company in the
Follow-On Investment, together with
the amount proposed to be invested by
the Funds in the same transaction,
exceeds the amount of the opportunity,
then the amount invested by each such
party will be allocated among them pro
rata based on each party’s Available
Capital in the asset class being
allocated, up to the amount proposed to
be invested by each.
(d) The acquisition of Follow-On
Investments as permitted by this
condition will be considered a CoInvestment Transaction for all purposes
and subject to the other conditions set
forth in the application.
9. The Independent Directors will be
provided quarterly for review all
information concerning Potential CoInvestment Transactions and CoInvestment Transactions, including
investments made by the Funds that the
Company considered but declined to
participate in, so that the Independent
Directors may determine whether all
investments made during the preceding
quarter, including those investments
that the Company considered but
declined to participate in, comply with
the conditions of the Order. In addition,
the Independent Directors will consider
at least annually the continued
appropriateness for the Company of
participating in new and existing CoInvestment Transactions.
10. The Company will maintain the
records required by section 57(f)(3) of
the Act as if each of the investments
permitted under these conditions were
approved by the Required Majority
under section 57(f).
11. No Independent Director will also
be a director, general partner, managing
member or principal, or otherwise an
VerDate Sep<11>2014
19:37 Dec 18, 2014
Jkt 235001
‘‘affiliated person’’ (as defined in the
Act), of any Fund.
12. The expenses, if any, associated
with acquiring, holding or disposing of
any securities acquired in a CoInvestment Transaction (including,
without limitation, the expenses of the
distribution of any such securities
registered for sale under the 1933 Act)
will, to the extent not payable by an
Adviser under any agreement with the
Company or the Funds, be shared by the
Company and the Funds in proportion
to the relative amounts of the securities
held or being acquired or disposed of,
as the case may be.
13. Any transaction fee 7 (including
break-up or commitment fees but
excluding broker’s fees contemplated by
section 57(k) of the Act) received in
connection with a Co-Investment
Transaction will be distributed to the
Company and the participating Funds
on a pro rata basis, based on the
amounts they invested or committed, as
the case may be, in such Co-Investment
Transaction. If any transaction fee is to
be held by an Adviser pending
consummation of the Co-Investment
Transaction, the fee will be deposited
into an account maintained by such
Adviser at a bank or banks having the
qualifications prescribed in section
26(a)(1) of the Act, and the account will
earn a competitive rate of interest that
will also be divided pro rata among the
Company and the participating Funds
based on the amounts they invest in
such Co-Investment Transaction. None
of the Funds, the Advisers or any
affiliated person of the Company or of
the Funds will receive additional
compensation or remuneration of any
kind as a result of or in connection with
a Co-Investment Transaction (other than
(i) in the case of the Company and the
Funds, the pro rata transaction fees
described above and fees or other
compensation described in condition
2(c)(iii)(C) and (ii) in the case of the
Advisers, investment advisory fees paid
in accordance with the Advisory
Agreements with the Company and the
Funds).
For the Commission, by the Division of
Investment Management, under delegated
authority.
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–29697 Filed 12–18–14; 8:45 am]
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–73837; File No. SR–CBOE–
2014–091]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change to Extend the Credit
Option Margin Pilot Program Through
January 15, 2016
December 15, 2014.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b-4 thereunder,2
notice is hereby given that on December
2, 2014, Chicago Board Options
Exchange, Incorporated (the ‘‘Exchange’’
or ‘‘CBOE’’) filed with the Securities
and Exchange Commission (the
‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
prepared by the Exchange. The
Exchange filed the proposal as a ‘‘noncontroversial’’ proposed rule change
pursuant to Section 19(b)(3)(A)(iii) of
the Act 3 and Rule 19b-4(f)(6)
thereunder.4 The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
CBOE proposes to amend Rule 12.3 by
extending the Credit Option Margin
Pilot Program through January 15, 2016.
The text of the proposed rule change
is available on the Exchange’s Web site
(https://www.cboe.com/AboutCBOE/
CBOELegalRegulatoryHome.aspx), at
the Exchange’s Office of the Secretary,
and at the Commission’s Public
Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
BILLING CODE 8011–01–P
1 15
7 Applicants
are not requesting and the staff is not
providing any relief for transaction fees received in
connection with any Co-Investment Transaction.
PO 00000
Frm 00067
Fmt 4703
Sfmt 4703
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b–4(f)(6).
2 17
E:\FR\FM\19DEN1.SGM
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]]>Agencies
[Federal Register Volume 79, Number 244 (Friday, December 19, 2014)]
[Notices]
[Pages 75846-75850]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-29697]
=======================================================================
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SECURITIES AND EXCHANGE COMMISSION
[Release No. IC-31373; File No. 812-14097]
Garrison Capital, Inc., et al.; Notice of Application
December 15, 2014.
AGENCY: Securities and Exchange Commission (``Commission'').
ACTION: Notice of application for an order under sections 57(a)(4) and
57(i) of the Investment Company Act of 1940 (the ``Act'') and rule 17d-
1 under the Act to permit certain joint transactions otherwise
prohibited by section 57(a)(4) of the Act and rule 17d-1 under the Act.
-----------------------------------------------------------------------
SUMMARY: Summary of Application: Applicants request an order to permit
Garrison Capital Inc. to co-invest in portfolio companies with certain
affiliated investment funds.
Applicants: Garrison Capital Inc. (the ``Company''), Garrison Funding
2013-2 Ltd. (``GF 2013-2''), Garrison Capital SBIC LP (``Garrison
SBIC''), Garrison Capital SBIC Holdco Inc., Garrison Capital SBIC
General Partner LLC, Garrison Middle Market Funding LP, Garrison Middle
Market Funding A LP, Garrison Opportunity Fund III B L.P., Garrison
Opportunity Fund IV A LLC and Garrison Opportunity Fund IV B L.P.
(collectively with Garrison Middle Market Funding LP, Garrison Middle
Market Fund A LP, Garrison Opportunity Fund III B L.P. and Garrison
Opportunity Fund IV A LLC, the ``Existing Funds''), Garrison Capital
Advisers LLC (the ``Company Adviser''), Garrison Investment Management
LLC (the ``Fund Adviser'') and Garrison Investment Group LP
(collectively, the ``Applicants'').
DATES: Filing Dates: The application was filed on November 21, 2012,
and amended on February 25, 2013, August 12, 2013, January 16, 2014,
May 21, 2014, August 26, 2014 and December 11, 2014.
[[Page 75847]]
Hearing or Notification of Hearing: An order granting the requested
relief will be issued unless the Commission orders a hearing.
Interested persons may request a hearing by writing to the Commission's
Secretary and serving applicants with a copy of the request, personally
or by mail. Hearing requests should be received by the Commission by
5:30 p.m. on January 9, 2015, and should be accompanied by proof of
service on applicants, in the form of an affidavit or, for lawyers, a
certificate of service. Pursuant to rule 0-5 under the Act, hearing
requests should state the nature of the writer's interest, any facts
bearing upon the desirability of a hearing on the matter, the reason
for the request, and the issues contested. Persons who wish to be
notified of a hearing may request notification by writing to the
Commission's Secretary.
ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F
St. NE., Washington, DC 20549-1090. Applicants: Garrison Investment
Group LP, 1290 Avenue of the Americas, Suite 914, New York, NY 10104.
FOR FURTHER INFORMATION CONTACT: Barbara T. Heussler, Senior Counsel,
at (202) 551-6813 or Mary Kay Frech, Branch Chief, at (202) 551-6821
(Chief Counsel's Office, Division of Investment Management).
SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained via the
Commission's Web site by searching for the file number, or for an
applicant using the Company name box, at https://www.sec.gov/search/search.htm or by calling (202) 551-8090.
Applicants' Representations
1. The Company is a closed-end management investment company that
has elected to be regulated as a business development company (``BDC'')
under the Act. A majority of the directors of the Company are persons
who are not ``interested persons'' as defined in section 2(a)(19) of
the Act (``Independent Directors''). The Company Adviser is registered
as an investment adviser under the Investment Advisers Act of 1940 (the
``Advisers Act'') and serves as the investment adviser to the Company
pursuant to an investment advisory agreement (the ``Company Advisory
Agreement'').
2. The Company's Objectives and Strategies \1\ are to generate
current income and capital appreciation by making investments generally
in the range of $5 million to $25 million primarily in debt securities
of U.S.-based middle-market companies, which the Company defines as
those having annual earnings before interest, taxes and depreciation of
between $5 million and $30 million.
---------------------------------------------------------------------------
\1\ ``Objectives and Strategies'' means the investment
objectives and strategies of the Company, as described in the
Company's registration statement on Form N-2, other filings the
Company has made with the Commission under the Securities Act of
1933 (``1933 Act''), or under the Securities Exchange Act of 1934,
or in reports to its shareholders.
---------------------------------------------------------------------------
3. Garrison Middle Market Funding LP and Garrison Middle Market
Funding A LP are Delaware limited partnerships and are excluded from
the definition of investment company by section 3(c)(7) of the Act.
Garrison Opportunity Fund III B L.P. and Garrison Opportunity Fund IV B
L.P. are Cayman Islands limited partnerships and are excluded from the
definition of investment company by section 3(c)(7) of the Act.
Garrison Opportunity Fund IV A LLC is a Delaware limited liability
company and is excluded from the definition of investment company by
section 3(c)(7) of the Act. The Existing Funds seek to invest primarily
in middle-market companies and institutions. Each of the Funds \2\ has
or will have investment objectives and strategies that are similar to
or overlap with the Objectives and Strategies of the Company. To the
extent there is an investment opportunity that falls within the
Objectives and Strategies of the Company and the investment objectives
and strategies of one or more of the Funds, the Advisers would expect
the Company and such Funds to co-invest with each other, with certain
exceptions based on available capital or diversification. The Company,
however, will not be obligated to invest, or co-invest, when investment
opportunities are referred to it.
---------------------------------------------------------------------------
\2\ ``Fund'' means any (i) Existing Fund or (ii) Future Fund.
``Future Fund'' means an entity (i) whose investment adviser is an
Adviser, and (ii) that would be an investment company but for
sections 3(c)(1) or 3(c)(7) of the Act. The term ``Adviser'' means
the Company Adviser, the Fund Adviser and any future investment
adviser controlling, controlled by or under common control with the
Company Adviser that is registered as an investment adviser under
the Advisers Act.
---------------------------------------------------------------------------
4. The Fund Adviser, a registered investment adviser under the
Advisers Act, manages the investment activities of the Existing Funds
pursuant to investment advisory agreement (together with the Company
Advisory Agreement, the ``Advisory Agreements''). The Fund Adviser and
the Company Adviser are indirectly controlled by Garrison Investment
Group LP, a registered investment adviser under the Advisers Act, which
is controlled by Steven Stuart and Joseph Tansey.
5. Applicants seek an order (``Order'') under sections 57(a)(4) and
57(i) of the Act and rule 17d-1 under the Act to permit the Company, on
the one hand, and one or more Funds, on the other hand, to participate
in the same investment opportunities through a proposed co-investment
program where such participation would otherwise be prohibited by
section 57(a)(4) of the Act and rule 17d-1 under the Act.\3\ ``Co-
Investment Transaction'' means any transaction in which the Company (or
a Wholly-Owned Investment Subsidiary, as defined below) participated
together with one or more Funds in reliance on the requested Order.
``Potential Co-Investment Transaction'' means any investment
opportunity in which the Company (or a Wholly-Owned Investment
Subsidiary) could not participate together with one or more Funds
without obtaining and relying on the Order.
---------------------------------------------------------------------------
\3\ All existing entities that currently intend to rely upon the
Order have been named as applicants and any entity that may rely on
the Order in the future will comply with the terms and conditions of
the application.
---------------------------------------------------------------------------
6. The Company may, from time to time, form a special purpose
subsidiary (a ``Wholly-Owned Investment Subsidiary'').\4\ A Fund would
be prohibited from investing in a Co-Investment Transaction with any
Wholly-Owned Investment Subsidiary because the Wholly-Owned Investment
Subsidiary would be a company controlled by the Company for purposes of
section 57(a)(4) of the Act and rule 17d-1 under the Act. Applicants
request that a Wholly-Owned Investment Subsidiary be permitted to
participate in Co-Investment Transactions in lieu of the Company and
that the Wholly-Owned Investment Subsidiary's participation in any such
transaction be treated, for purposes of the order, as
[[Page 75848]]
though the Company were participating directly. Applicants represent
that this treatment is justified because a Wholly-Owned Investment
Subsidiary would have no purpose other than serving as a holding
vehicle for the Company's investments and issuing debt on behalf of the
Company and, therefore, no conflicts of interest could arise between
the Company and the Wholly-Owned Investment Subsidiary. The Board would
make all relevant determinations under the conditions with regard to a
Wholly-Owned Investment Subsidiary's participation in a Co-Investment
Transaction, and the Board would be informed of, and take into
consideration, any proposed use of a Wholly-Owned Investment Subsidiary
in the Company's place. If the Company proposes to participate in the
same Co-Investment Transaction with any of its Wholly-Owned Investment
Subsidiaries, the Board will also be informed of, and take into
consideration, the relative participation of the Company and the
Wholly-Owned Investment Subsidiary. GF 2013-2 satisfies the definition
of Wholly-Owned Investment Subsidiary and Garrison SBIC satisfies the
definition of an SBIC Subsidiary.
---------------------------------------------------------------------------
\4\ The term ``Wholly-Owned Investment Subsidiary'' means an
entity (a) whose sole business purposes are to hold one or more
investments and issue debt on behalf of the Company (and, in the
case of an SBIC Subsidiary, maintain a license under the Small
Business Investment Act of 1958, as amended (the ``SBA Act'') and
issue debentures guaranteed by the Small Business Administration
(the ``SBA'')); (b) that is wholly-owned by the Company (with the
Company at all times beneficially holding, directly or indirectly,
100% of the voting and economic interests); (c) with respect to
which the Company's board of directors (``Board'') has the sole
authority to make all determinations with respect to the Wholly-
Owned Investment Subsidiary's participation under the conditions to
the application; and (d) that is an entity that would be an
investment company but for sections 3(c)(1) or 3(c)(7) of the Act.
``SBIC Subsidiary'' means a Wholly-Owned Investment Subsidiary that
is licensed by the SBA to operate under the SBA Act as a small
business investment company.
---------------------------------------------------------------------------
7. Upon issuance of the Order investment opportunities that are
presented to the Company are expected to be referred to the Funds, and
vice versa, and such investment opportunities may result in a Co-
Investment Transaction. For each such referral, the Company Adviser
will consider only the Objectives and Strategies, investment
restrictions, regulatory and tax requirements, capital available for
investment (``Available Capital'') in the asset class being allocated,
and other pertinent factors applicable to the Company. Available
Capital consists solely of liquid assets not held for permanent
investment, including cash, amounts that can currently be drawn down
from lines of credit, and marketable securities held for short-term
purposes. In addition, Available Capital would include bona fide
uncalled capital commitments that can be called by the settlement date
of the Co-Investment Transaction. Except as described below, each
Potential Co-Investment Transaction and the proposed allocation of such
Potential Co-Investment Transaction would be approved prior to the
actual investment by the Required Majority.\5\
---------------------------------------------------------------------------
\5\ ``Required Majority'' has the meaning provided in section
57(o) of the Act. ``Eligible Directors'' means the directors who are
eligible to vote under section 57(o).
---------------------------------------------------------------------------
8. With respect to the pro rata dispositions and Follow-On
Investments\6\ provided in conditions 7 and 8, the Company may
participate in a pro rata disposition or Follow-On Investment without
obtaining prior approval of the Required Majority if, among other
things: (i) The proposed participation of each Fund and the Company in
such disposition or Follow-On Investment is proportionate to its
outstanding investments in the issuer immediately preceding the
disposition or Follow-On Investment, as the case may be; and (ii) the
Board has approved the Company's participation in pro rata dispositions
and Follow-On Investments as being in the best interests of the
Company. If the Board does not so approve, any such disposition or
Follow-On Investment will be submitted to the Company's Eligible
Directors. The Board may at any time rescind, suspend or qualify its
approval of pro rata dispositions and Follow-On Investments with the
result that all dispositions and/or Follow-On Investments must be
submitted to the Eligible Directors.
---------------------------------------------------------------------------
\6\ ``Follow-On Investment'' means any additional investment in
an existing portfolio company, including through the exercise of
warrants, conversion privileges or other similar rights to acquire
additional securities of the portfolio company.
---------------------------------------------------------------------------
9. Applicants state that no Independent Director will have a
financial interest in any Co-Investment Transaction or any interest in
any issuer of securities, other than through an interest (if any) in
the securities of the Company.
Applicants' Legal Analysis
1. Section 57(a)(4) of the Act prohibits any person who is related
to a BDC in the manner described in section 57(b) from participating in
joint transactions with the BDC in contravention of rules as prescribed
by the Commission. Under section 57(b)(2) of the Act, any person who is
directly or indirectly controlling, controlled by, or under common
control with a BDC is subject to section 57(a)(4). Under section
57(b)(1) of the Act, any person who is controlling, controlled by, or
under common control with, a director, officer, employee, or member of
an advisory board of a BDC is subject to section 57(a)(4). Applicants
submit that each of the Existing Funds and any Future Funds could be
deemed to be a person related to the Company in a manner described by
section 57(b)(2) by virtue of being under common control with the
Company. Section 57(i) of the Act provides that, until the Commission
prescribes rules under section 57(a)(4), the Commission's rules under
section 17(d) of the Act applicable to registered closed-end investment
companies will be deemed to apply to transactions subject to section
57(a)(4). Because the Commission has not adopted any rules under
section 57(a)(4), rule 17d-1 also applies to joint transactions with
BDCs.
2. Rule 17d-1 under the Act prohibits affiliated persons of a
registered investment company from participating in joint transactions
with the company unless the Commission has granted an order permitting
such transactions. In passing upon applications under rule 17d-1, the
Commission considers whether the company's participation in the joint
transaction is consistent with the provisions, policies, and purposes
of the Act and the extent to which such participation is on a basis
different from or less advantageous than that of other participants.
3. Applicants state that in the absence of the requested relief,
the Company would be, in some circumstances, limited in its ability to
participate in attractive and appropriate investment opportunities.
Applicants believe that the proposed terms and conditions will ensure
that the Co-Investment Transactions are consistent with the protection
of the Company's shareholders and with the purposes intended by the
policies and provisions of the Act. Applicants state that the Company's
participation in the Co-Investment Transactions will be consistent with
the provisions, policies, and purposes of the Act and on a basis that
is not different from or less advantageous than that of other
participants.
Applicants' Conditions
Applicants agree that the Order will be subject to the following
conditions:
1. Each time an Adviser considers a Potential Co-Investment
Transaction for a Fund that falls within the Company's then-current
Objectives and Strategies, the Company Adviser will make an independent
determination of the appropriateness of the investment for the Company
in light of the Company's then-current circumstances.
2. (a) If the Company Adviser deems the Company's participation in
any Potential Co-Investment Transaction to be appropriate for the
Company, it will then determine an appropriate level of investment for
the Company;
(b) If the aggregate amount recommended by the Company Adviser to
be invested in the Potential Co-Investment Transaction by the Company
and the Funds, collectively, in the same transaction, exceeds the
amount of the investment opportunity, the amount proposed to be
invested by each party will be allocated among them pro rata based on
each party's Available Capital in the asset class being allocated, up
to
[[Page 75849]]
the amount proposed to be invested by each party. The Company Adviser
will provide the Eligible Directors with information concerning each
participating party's Available Capital to assist the Eligible
Directors with their review of the Company's investments for compliance
with these allocation procedures; and
(c) After making the determinations required in conditions 1 and
2(a), the Company Adviser will distribute written information
concerning the Potential Co-Investment Transaction, including the
amount proposed to be invested by the Company and each participating
Fund, to the Eligible Directors for their consideration. The Company
will co-invest with the Funds only if, prior to participating in the
Potential Co-Investment Transaction, a Required Majority concludes
that:
(i) The terms of the Potential Co-Investment Transaction, including
the consideration to be paid, are reasonable and fair to the Company
and its stockholders and do not involve overreaching in respect of the
Company or its stockholders on the part of any person concerned;
(ii) The Potential Co-Investment Transaction is consistent with:
(A) The interests of the stockholders of the Company; and
(B) The Company's then-current Objectives and Strategies;
(iii) The investment by the Funds would not disadvantage the
Company, and participation by the Company would not be on a basis
different from or less advantageous than that of the Funds; provided,
that if any Fund, but not the Company, gains the right to nominate a
director for election to a portfolio company's board of directors or
the right to have a board observer or any similar right to participate
in the governance or management of the portfolio company, such event
will not be interpreted to prohibit the Required Majority from reaching
the conclusions required by this condition (2)(c)(iii), if
(A) The Eligible Directors will have the right to ratify the
selection of such director or board observer, if any;
(B) The applicable Adviser agrees to, and does, provide periodic
reports to the Company's Board with respect to the actions of the
director or the information received by the board observer or obtained
through the exercise of any similar right to participate in the
governance or management of the portfolio company; and
(C) Any fees or other compensation that the Funds or any affiliated
person of the Funds receive in connection with the right of the Funds
to nominate a director or appoint a board observer or otherwise to
participate in the governance or management of the portfolio company
will be shared proportionately among the participating Funds (which
may, in turn, share their portion with their affiliated persons) and
the Company in accordance with the amount of each party's investment;
and
(iv) The proposed investment by the Company will not benefit the
Advisers, any Fund or any affiliated person of any of them (other than
the parties to the Co-Investment Transaction), except (a) to the extent
permitted by condition 13; (b) to the extent permitted by section 57(k)
of the Act; (c) indirectly, as a result of an interest in securities
issued by one of the parties to the Co-Investment Transaction; or (d)
in the case of fees or other compensation described in condition
2(c)(iii)(C).
3. The Company has the right to decline to participate in any
Potential Co-Investment Transaction or to invest less than the amount
proposed.
4. The Company Adviser will present to the Board, on a quarterly
basis, a record of all investments in Potential Co-Investment
Transactions made by any of the Funds during the preceding quarter that
fell within the Company's then-current Objectives and Strategies that
were not made available to the Company and an explanation of why the
investment opportunities were not offered to the Company. All
information presented to the Board pursuant to this condition will be
kept for the life of the Company and at least two years thereafter, and
will be subject to examination by the Commission and its staff.
5. Except for Follow-On Investments made in accordance with
condition 8, the Company will not invest in reliance on the Order in
any issuer in which any Fund or any affiliated person thereof is an
existing investor.
6. The Company will not participate in any Potential Co-Investment
Transaction unless the terms, conditions, price, class of securities to
be purchased, settlement date and registration rights will be the same
for the Company and each participating Fund. The grant to a Fund, but
not the Company, of the right to nominate a director for election to a
portfolio company's board of directors, the right to have an observer
on the board of directors or similar rights to participate in the
governance or management of the portfolio company will not be
interpreted so as to violate this condition 6, if conditions
2(c)(iii)(A), (B) and (C) are met.
7. (a) If any Fund elects to sell, exchange or otherwise dispose of
an interest in a security that was acquired by the Company in a Co-
Investment Transaction, the applicable Adviser will:
(i) notify the Company of the proposed disposition at the earliest
practical time; and
(ii) the Company Adviser will formulate a recommendation as to
participation by the Company in the disposition.
(b) The Company will have the right to participate in such
disposition on a proportionate basis, at the same price and on the same
terms and conditions as those applicable to the participating Funds.
(c) The Company may participate in such disposition without
obtaining prior approval of the Required Majority if: (i) The proposed
participation of the Company and each Fund in such disposition is
proportionate to its outstanding investments in the issuer immediately
preceding the disposition; (ii) the Board has approved as being in the
best interests of the Company the ability to participate in such
dispositions on a pro rata basis (as described in greater detail in the
application); and (iii) the Board is provided on a quarterly basis with
a list of all dispositions made in accordance with this condition. In
all other cases, the Company Adviser shall provide its written
recommendation as to the Company's participation to the Eligible
Directors, and the Company will participate in such disposition solely
to the extent that a Required Majority determines that it is in the
Company's best interests.
(d) The Company and each Fund will bear their own expenses in
connection with any such disposition.
8. (a) If a Fund desires to make a Follow-On Investment in a
portfolio company whose securities were acquired in a Co-Investment
Transaction, the applicable Adviser will:
(i) Notify the Company of the proposed Follow-On Investment at the
earliest practical time; and
(ii) the Company Adviser will formulate a recommendation as to the
proposed participation, including the amount of the proposed Follow-On
Investment, by the Company.
(b) The Company may participate in such Follow-On Investment
without obtaining prior approval of the Required Majority if: (i) The
proposed participation of the Company and each Fund in such investment
is proportionate to its outstanding investments in the portfolio
company
[[Page 75850]]
immediately preceding the Follow-On Investment; and (ii) the Board has
approved as being in the best interests of the Company the ability to
participate in Follow-On Investments on a pro rata basis (as described
in greater detail in the application). In all other cases, the Company
Adviser will provide its written recommendation as to the Company's
participation to the Eligible Directors, and the Company will
participate in such Follow-On Investment solely to the extent that a
Required Majority determines that it is in the Company's best
interests.
(c) If, with respect to any Follow-On Investment:
(i) The amount of the opportunity is not based on the Company's and
the Funds' outstanding investments immediately preceding the Follow-On
Investment; and
(ii) The aggregate amount recommended by the Company Adviser to be
invested by the Company in the Follow-On Investment, together with the
amount proposed to be invested by the Funds in the same transaction,
exceeds the amount of the opportunity, then the amount invested by each
such party will be allocated among them pro rata based on each party's
Available Capital in the asset class being allocated, up to the amount
proposed to be invested by each.
(d) The acquisition of Follow-On Investments as permitted by this
condition will be considered a Co-Investment Transaction for all
purposes and subject to the other conditions set forth in the
application.
9. The Independent Directors will be provided quarterly for review
all information concerning Potential Co-Investment Transactions and Co-
Investment Transactions, including investments made by the Funds that
the Company considered but declined to participate in, so that the
Independent Directors may determine whether all investments made during
the preceding quarter, including those investments that the Company
considered but declined to participate in, comply with the conditions
of the Order. In addition, the Independent Directors will consider at
least annually the continued appropriateness for the Company of
participating in new and existing Co-Investment Transactions.
10. The Company will maintain the records required by section
57(f)(3) of the Act as if each of the investments permitted under these
conditions were approved by the Required Majority under section 57(f).
11. No Independent Director will also be a director, general
partner, managing member or principal, or otherwise an ``affiliated
person'' (as defined in the Act), of any Fund.
12. The expenses, if any, associated with acquiring, holding or
disposing of any securities acquired in a Co-Investment Transaction
(including, without limitation, the expenses of the distribution of any
such securities registered for sale under the 1933 Act) will, to the
extent not payable by an Adviser under any agreement with the Company
or the Funds, be shared by the Company and the Funds in proportion to
the relative amounts of the securities held or being acquired or
disposed of, as the case may be.
13. Any transaction fee \7\ (including break-up or commitment fees
but excluding broker's fees contemplated by section 57(k) of the Act)
received in connection with a Co-Investment Transaction will be
distributed to the Company and the participating Funds on a pro rata
basis, based on the amounts they invested or committed, as the case may
be, in such Co-Investment Transaction. If any transaction fee is to be
held by an Adviser pending consummation of the Co-Investment
Transaction, the fee will be deposited into an account maintained by
such Adviser at a bank or banks having the qualifications prescribed in
section 26(a)(1) of the Act, and the account will earn a competitive
rate of interest that will also be divided pro rata among the Company
and the participating Funds based on the amounts they invest in such
Co-Investment Transaction. None of the Funds, the Advisers or any
affiliated person of the Company or of the Funds will receive
additional compensation or remuneration of any kind as a result of or
in connection with a Co-Investment Transaction (other than (i) in the
case of the Company and the Funds, the pro rata transaction fees
described above and fees or other compensation described in condition
2(c)(iii)(C) and (ii) in the case of the Advisers, investment advisory
fees paid in accordance with the Advisory Agreements with the Company
and the Funds).
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\7\ Applicants are not requesting and the staff is not providing
any relief for transaction fees received in connection with any Co-
Investment Transaction.
For the Commission, by the Division of Investment Management,
under delegated authority.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-29697 Filed 12-18-14; 8:45 am]
BILLING CODE 8011-01-P
