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Federal Register / Vol. 86, No. 24 / Monday, February 8, 2021 / Notices
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or indirect 22 financial benefit to the Advisers, any other Regulated Funds, the Affiliated Funds 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 14, B to the extent permitted by section 17e or 57k, as applicable, C indirectly, as a result of an interest in the securities issued by one of the parties to the CoInvestment Transaction, or D in the case of fees or other compensation described in Condition 2ciiiBz.
3. Right to Decline. Each Regulated Fund has the right to decline to participate in any Potential CoInvestment Transaction or to invest less than the amount proposed.
4. General Limitation. Except for Follow-On Investments made in accordance with Conditions 8 and 9
below,23 a Regulated Fund will not invest in reliance on the Order in any issuer in which a Related Party has an investment.24
5. Same Terms and Conditions. A
Regulated Fund will not participate in any Potential Co-Investment Transaction unless i the terms, conditions, price, class of securities to be purchased, date on which the commitment is entered into and registration rights if any will be the same for each participating Regulated Fund and Affiliated Fund and ii the earliest settlement date and the latest settlement date of any participating Regulated Fund or Affiliated Fund will occur as close in time as practicable and in no event more than ten business days apart. The grant to one or more Regulated Funds or Affiliated Funds, but not the respective Regulated Fund, of the right to nominate a director for election to a portfolio companys board 22 For example, procuring the Regulated Funds investment in a Potential Co-Investment Transaction to permit an affiliate to complete or obtain better terms in a separate transaction would constitute an indirect financial benefit.
23 This exception applies only to Follow-On Investments by a Regulated Fund in issuers in which that Regulated Fund already holds investments.
24 Related Party means i any Close Affiliate and ii in respect of matters as to which any Adviser has knowledge, any Remote Affiliate.
Close Affiliate means the Advisers, the Regulated Funds and the Affiliated Funds and any other person described in section 57b after giving effect to rule 57b1 in respect of any Regulated Fund treating any registered investment company or series thereof as a BDC for this purpose except for limited partners included solely by reason of the reference in section 57b to section 2a3D.
Remote Affiliate means any person described in section 57e in respect of any Regulated Fund treating any registered investment company or series thereof as a BDC for this purpose and any limited partner holding 5% or more of the relevant limited partner interests that would be a Close Affiliate but for the exclusion in that definition.

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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 5, if Condition 2ciiiB is met.
6. Standard Review Dispositions.
a General. If any Regulated Fund or Affiliated Fund elects to sell, exchange or otherwise dispose of an interest in a security and one or more Regulated Funds and/or Affiliated Funds have previously participated in a CoInvestment Transaction with respect to the issuer:
i The Adviser to such Regulated Fund or Affiliated Fund,25 as applicable, will notify each Regulated Fund that holds an investment in the issuer of the proposed Disposition at the earliest practical time; and ii the Adviser to each Regulated Fund that holds an investment in the issuer will formulate a recommendation as to participation by such Regulated Fund in the Disposition.
b Same Terms and Conditions. Each Regulated Fund 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 Affiliated Funds and any other Regulated Funds.
c No Board Approval Required. A
Regulated Fund may participate in such a Disposition without obtaining prior approval of the Required Majority if:
i A The participation of each Regulated Fund and Affiliated Fund in such Disposition is proportionate to its then-current holding of the security or securities of the issuer that is or are the subject of the Disposition; 26 B the Board of the Regulated Fund has approved as being in the best interests of the Regulated Fund the ability to participate in such Dispositions on a pro rata basis as described in greater detail in the application; and C the Board of the Regulated Fund is provided on a quarterly basis with a list of all Dispositions made in accordance with this Condition; or ii each security is a Tradable Security and A the Disposition is not to the issuer or any affiliated person of the issuer; and B the security is sold for cash in a transaction in which the 25 Any Muzinich Proprietary Account that is not advised by an Adviser is itself deemed to be an Adviser for purposes of Conditions 6ai, 7ai, 8ai and 9ai.
26 In the case of any Disposition, proportionality will be measured by each participating Regulated Funds and Affiliated Funds outstanding investment in the security in question immediately preceding the Disposition.

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only term negotiated by or on behalf of the participating Regulated Funds and Affiliated Funds is price.
d Standard Board Approval. In all other cases, the Adviser will provide its written recommendation as to the Regulated Funds participation to the Eligible Directors and the Regulated Fund will participate in such Disposition solely to the extent that a Required Majority determines that it is in the Regulated Funds best interests.
7. Enhanced Review Dispositions.
a General. If any Regulated Fund or Affiliated Fund elects to sell, exchange or otherwise dispose of a Pre-Boarding Investment in a Potential Co-Investment Transaction and the Regulated Funds and Affiliated Funds have not previously participated in a CoInvestment Transaction with respect to the issuer:
i The Adviser to such Regulated Fund or Affiliated Fund, as applicable, will notify each Regulated Fund that holds an investment in the issuer of the proposed Disposition at the earliest practical time;
ii the Adviser to each Regulated Fund that holds an investment in the issuer will formulate a recommendation as to participation by such Regulated Fund in the Disposition; and iii the Advisers will provide to the Board of each Regulated Fund that holds an investment in the issuer all information relating to the existing investments in the issuer of the Regulated Funds and Affiliated Funds, including the terms of such investments and how they were made, that is necessary for the Required Majority to make the findings required by this Condition.
b Enhanced Board Approval. The Adviser will provide its written recommendation as to the Regulated Funds participation to the Eligible Directors, and the Regulated Fund will participate in such Disposition solely to the extent that a Required Majority determines that:
i The Disposition complies with Condition 2ci, ii, iiiA, and iv;
and ii the making and holding of the PreBoarding Investments were not prohibited by section 57 or rule 17d1, as applicable, and records the basis for the finding in the Board minutes.
c Additional Requirements: The Disposition may only be completed in reliance on the Order if:
i Same Terms and Conditions. Each Regulated Fund has the right to participate in such Disposition on a proportionate basis, at the same price and on the same terms and Conditions
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