File No. 812-14909
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
THIRD AMENDED AND RESTATED
APPLICATION FOR AN ORDER PURSUANT TO SECTIONS 17(d) AND 57(i) OF THE INVESTMENT COMPANY ACT OF 1940 AND RULE 17d-1 UNDER THE ACT
TO PERMIT CERTAIN JOINT TRANSACTIONS OTHERWISE PROHIBITED BY SECTIONS 17(d) AND 57(a)(4) OF THE ACT AND RULE 17d-l UNDER THE ACT
OFS CAPITAL CORPORATION, OFS SBIC I,
LP, HANCOCK PARK CORPORATE INCOME, INC., OFS CREDIT COMPANY, INC., OFS CAPITAL MANAGEMENT, LLC, OFS CLO MANAGEMENT, LLC, OFSI FUND V, LTD., OFSI FUND VI, LTD., OFSI FUND VII, LTD., OFSI bsl VIII,
LTD., OFSI BSL IX, LTD., LFTW-OFS, Inc., MAC-OFS Holdings, LLC, Convene Holdings LLC, DRS-OFSCC, INC., PB-OFSC, INC., OFSCC-CR,
LLC, OFSCC-FS Holdings, LLC, OFSCC-FS, LLC, OFSCC-MB, Inc., OFSCC-TTG, LLC, OFSCC-TS, LLC, LFTW-HPCI, Inc., DRS-HPCI, INC.,
HPCI-CR, LLC, HPCI-MB, Inc., HPCI-TTG, LLC, OFS Funding I, LLC,
oRCHARD FIRST SOURCE ASSET MANAGEMENT, LLC
10 S. Wacker Drive, Suite 2500
Chicago, Illinois 60606
CIM INCOME NAV, INC., CIM REAL ESTATE
FINANCE TRUST, INC., COLE CREDIT PROPERTY TRUST V, INC., COLE OFFICE & INDUSTRIAL REIT (CCIT II), INC., COLE OFFICE & INDUSTRIAL
REIT (CCIT III), INC., CIM INCOME NAV MANAGEMENT, LLC, CIM REAL ESTATE FINANCE MANAGEMENT, LLC, COLE REIT MANAGEMENT V, LLC, COLE
CORPORATE INCOME MANAGEMENT II, LLC, COLE CORPORATE INCOME MANAGEMENT III, LLC
2398 East Camelback Road, 4th
Floor
Phoenix, Arizona 85016
CIM URBAN REAL ESTATE FUND, L.P., CIM
URBAN REIT, LLC, CIM FUND III, L.P., CIM INFRASTUCTURE FUND, L.P., CIM VI (URBAN REIT), LLC, CIM FUND VIII, L.P., CIM INFRASTUCTURE
FUND II, L.P., CIM URBAN INCOME INVESTMENTS, L.P., CMMT PARTNERS, L.P., CIM FUND IX, L.P., CIM REAL ASSETS & CREDIT FUND, CIM
CAPITAL, LLC, cim Capital IC Management, LLC,
CIM CAPITAL SA MANAGEMENT, LLC
4700 Wilshire Boulevard
Los Angeles, California 90010
All Communications, Notices and Orders
to:
Jeffrey A. Cerny
Tod K. Reichert
OFS Capital Management, LLC
10 S. Wacker Drive, Suite 2500
Chicago, Illinois 60606
(847) 734-2000
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Nathan D. DeBacker
CIM Group, LLC
2398 East Camelback Road, 4th
Floor
Phoenix, Arizona 85016
(602) 778-8700
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Mukya Porter
CIM Group, LLC
4700 Wilshire Boulevard
Los Angeles, California 90010
(323) 860-7421
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Copies to:
Steven B.
Boehm, Esq.
Cynthia M. Krus, Esq.
Anne G. Oberndorf,
Esq.
Eversheds Sutherland
(US) LLP
700 Sixth Street, NW,
Suite 700
Washington, DC 20001-3980
Tel: (202) 383-0100
Fax: (202) 637-3593
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Lauren Burnham Prevost, Esq.
Seth K. Weiner, Esq.
Morris, Manning & Martin, LLP
1600 Atlanta Financial Center
3343 Peachtree Road, N.E.
Atlanta, Georgia 30326-1044
Tel: (404) 233-7000
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April 3, 2020
This Application (including exhibits) contains
63 pages.
INTRODUCTION
OFS Capital Corporation and its related
entities identified in section I.B. below, hereby request an order (the “Order”) pursuant to Sections
17(d) and 57(i) of the Investment Company Act of 1940, as amended (the “Act”)1
and Rule 17d-1 thereunder2 authorizing
certain joint transactions that otherwise would be prohibited by either or both of Sections 17(d) and 57(a)(4) as modified by the
exemptive rules adopted by the U.S. Securities and Exchange Commission (the “Commission”) under the Act.
In particular, the relief requested in this
application (the “Application”) would allow one or more Regulated Funds and/or one or more Affiliated
Funds (each defined below) to participate in the same investment opportunities where such participation would otherwise be prohibited
under Section 17(d) or 57(a)(4) and the rules under the Act. All existing entities that currently intend to rely on the Order have
been named as Applicants and any existing or future entities that may rely on the Order in the future will comply with its terms
and Conditions (defined below) set forth in this Application.
The Order sought by this Application would
supersede the order, dated October 12, 2016, issued by the Commission to OFS Capital Corporation and certain of its affiliates
under Sections 17(d) and 57(i) and Rule 17d-1 permitting certain joint transactions otherwise prohibited by
Sections 17(d) and 57(a)(4) and Rule 17d-1 (the “Prior Order”),3 with
the result that no person will continue to rely on the Prior Order if the Order is granted.
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B.
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Applicants Seeking Relief:
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OFS Capital Corporation (“OFS BDC”), a closed-end non-diversified management investment company that
has elected to be regulated as a BDC (defined below) under the Act;
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Hancock Park Corporate Income, Inc. (“Hancock BDC”), a closed-end non-diversified management investment
company that has elected to be regulated as a BDC under the Act;
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OFS Credit Company, Inc. (“OFS Credit”), a registered closed-end company under the Act;
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1
Unless otherwise indicated, all section references herein are to the Act.
2
Unless otherwise indicated, all rule references herein are to rules under the Act.
3
OFS Capital Corporation, et al. (File No. 812-14602), Release
No. IC-32312 (Oct.12, 2016) (order), Release No. IC-32259 (Sept. 13, 2016) (notice).
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CIM Real Assets & Credit Fund (“CIM RACR”, and together with OFS BDC, Hancock BDC, and OFS Credit,
the “Existing Regulated Funds”), a registered closed-end company that will operate as an interval fund
under Rule 23c-3 of the Act;
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LFTW-OFS, Inc., MAC-OFS Holdings, LLC, Convene Holdings LLC, DRS-OFSCC, Inc., PB-OFSC, Inc., OFSCC-CR, LLC, OFSCC-FS Holdings,
LLC, OFSCC-FS, LLC, OFSCC-MB, Inc., OFSCC-TTG, LLC, OFSCC-TS, LLC and OFS SBIC I LP (the “Existing SBIC Subsidiary,”
and collectively, the “Existing OFS BDC Subsidiaries”), each of which is a Wholly-Owned Investment Sub
(as defined below) of OFS BDC;
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LFTW-HPCI, Inc., DRS-HPCI, Inc., HPCI-CR, LLC, HPCI-MB, Inc. and HPCI-TTG, LLC (the “Hancock BDC Subsidiaries”),
each of which is a Wholly-Owned Investment Sub of Hancock BDC (the Hancock BDC Subsidiaries, together with the Existing OFS BDC
Subsidiaries, the “Existing Wholly-Owned Subsidiaries”);
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OFS Capital Management, LLC (“OFS Adviser”) on behalf of itself and its successors;4
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OFS CLO Management, LLC (“OFS CLO Adviser”);
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The investment vehicles identified in Appendix A (each an “Existing OFS Affiliated Fund” and collectively,
the “Existing OFS Affiliated Funds”), each of which is managed by OFS Adviser or OFS CLO Adviser and
is a separate and distinct legal entity and would be an investment company but for Section 3(c)(1) or 3(c)(7);
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Orchard First Source Asset Management, LLC (“OFSAM”), the parent company of OFS Adviser and OFS CLO
Adviser, and its direct, wholly-owned subsidiary, OFS Funding I, LLC (together, the “OFS Companies”).
The OFS Companies, from time to time, may hold various financial assets in a principal capacity (together, in such capacity, “Existing
OFS Proprietary Accounts” and together with any Future OFS Proprietary Account (as defined below), the “OFS
Proprietary Accounts”);
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CIM Capital, LLC (“CIM Capital Advisor”);
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CIM Capital IC Management, LLC, on behalf of itself and its successors (“CIM IC Advisor”);
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CIM Capital SA Management, LLC (“CIMSA”, and together with OFS Adviser, OFS CLO Adviser, CIM Capital
Advisor and CIM IC Advisor, the “Existing Advisers”);
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The investment vehicles identified in Appendix B, each of which is a separate and distinct legal entity and would be an
investment company but for Section 3(c)(1), 3(c)(5)(C), or 3(c)(7), or does not meet the definition of investment company under the Act and qualifies as a REIT within the meaning
of Section 856 of the Code because substantially all of its assets would consist of real properties (the “Existing
CIM Funds”);
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4
The term “successor,” as applied to each Adviser, means an entity that results
from a reorganization into another jurisdiction or change in the type of business organization.
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The investment advisers to the Existing Cole Funds (defined below) that are identified in Appendix C (the “Existing
Cole Advisers”), each on behalf of itself and its successors5,
and
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The investment vehicles identified in Appendix C, each of which is a separate and distinct legal entity is primarily engaged
in the business of buying real assets and is not an investment company as defined in Section 3(a)(1)(A) or 3(a)(1)(C), or otherwise
would be an investment company but for Section 3(c)(1), 3(c)(5)(C), or 3(c)(7) (the “Existing Cole Funds,”
and, together with the Existing OFS Affiliated Funds, the Existing CIM Funds, and the Existing OFS Proprietary Accounts, the “Existing
Affiliated Funds”); and together with the Existing Regulated Funds, the Existing Wholly-Owned Subsidiaries, the Existing
Advisers and the Existing Cole Advisers, the “Applicants”).
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“Adviser” means
any Existing Adviser and any Future Adviser (defined below).
“Affiliated Fund”
means any Existing OFS Affiliated Fund, any Existing CIM Fund, any Existing Cole Fund, the Existing OFS Proprietary Accounts, any
Future Affiliated Funds (as defined below), or any Future OFS Proprietary Accounts.
“BDC” means a
business development company under the Act.6
“Board” means
the board of directors (or the equivalent) of the applicable Regulated Fund.
5
The Existing Cole Advisers make real assets investments on behalf of their clients. Each Existing Cole Adviser (i) is not registered
as an investment adviser under the Investment Advisers Act of 1940, as amended (the “Advisers Act”) and
(ii) will not advise the Existing Cole Funds under the Order, or any other client participating in the program of co-investment
described in this application, with respect to securities (other than cash-like instruments, including U.S. government securities)
unless it registers as an investment adviser under the Advisers Act. Each Existing Cole Adviser will not source Potential Co-Investment
Transactions under the required Order and is only deemed to be an Adviser for purposes of Conditions 2(c)(iv), 13 and 14. Because
the Existing Cole Advisers are not Advisers, each Existing Cole Fund will engage an Adviser to serve as investment adviser and/or
sub-adviser with respect to any securities that would be subject to the Order.
6
Section 2(a)(48) defines a BDC to be any closed-end investment company that operates for the purpose of making investments in securities
described in Section 55(a)(1) through 55(a)(3) and makes available significant managerial assistance with respect to the issuers
of such securities.
“Board-Established Criteria” means
criteria that the Board of a Regulated Fund may establish from time to time to describe the characteristics of Potential Co-Investment
Transactions regarding which the Adviser to such Regulated Fund should be notified under Condition 1. The Board-Established Criteria
will be consistent with the Regulated Fund’s Objectives and Strategies (defined below). If no Board-Established Criteria
are in effect, then the applicable Regulated Fund’s Adviser(s) will be notified of all Potential Co-Investment Transactions
that fall within the Regulated Fund’s then-current Objectives and Strategies. Board-Established Criteria will be objective
and testable, meaning that they will be based on observable information, such as industry/sector of the issuer, minimum EBITDA
of the issuer, asset class of the investment opportunity or required commitment size, and not on characteristics that involve
a discretionary assessment. The Adviser(s) to the Regulated Fund may from time to time recommend criteria for the Board’s
consideration, but Board-Established Criteria will only become effective if approved by a majority of the Independent Directors
(defined below). The Independent Directors of a Regulated Fund may at any time rescind, suspend or qualify its approval of any
Board-Established Criteria, though the Applicants anticipate that, under normal circumstances, the Board would not modify these
criteria more often than quarterly.
“Close Affiliate”
means the Advisers, the Regulated Funds, the Affiliated Funds and any other person described in Section 57(b) (after giving effect
to Rule 57b-1) 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 57(b) to Section 2(a)(3)(D).
“Co-Investment Transaction”
means any transaction in which one or more Regulated Funds (or its Wholly-Owned Investment Sub (defined below)) participated together
with one or more Affiliated Funds and/or one or more other Regulated Funds in reliance on the Order.
“Disposition”
means the sale, exchange or other disposition of an interest in a security of an issuer.
“Eligible Directors”
means, with respect to a Regulated Fund and a Potential Co-Investment Transaction, the members of the Regulated Fund’s Board
eligible to vote on that Potential Co-Investment Transaction under Section 57(o) of the Act.
“Follow-On Investment”
means an additional investment in the same issuer, including, but not limited to, through the exercise of warrants, conversion
privileges or other rights to purchase securities of the issuer.
“Future Adviser”
means any investment adviser that in the future (i) controls, is controlled by or is under common control with OFSAM, CIM Capital
Advisor, CIM IC Advisor or CIMSA, (ii) (a) is registered as an investment adviser under the Advisers Act or (b) is a
relying adviser of an investment adviser that is registered under the Advisers Act and that controls, is controlled by, or is under
common control with OFSAM, CIM Capital Advisor, CIM IC Advisor or CIMSA, and (iii) is not a Regulated Fund or a subsidiary
of a Regulated Fund.
“Future
Affiliated Fund” means any OFS Proprietary Accounts and an entity (a) whose investment adviser (and sub-adviser(s),
if any) is an Adviser, (b)(i)(x) that relies on Section 3(c)(1), 3(c)(3), 3(c)(5)(C) or 3(c)(7) of the Act or (y) relies on Rule
3a-7 under the Act, or (ii) that does not meet the definition of investment company under the Act and qualifies as a real estate
investment trust (“REIT”) within the meaning of Section 856 of the Internal Revenue Code (“Code”) because substantially
all of its assets would consist of real properties, and (c) that intends to participate in the program of co-investment described
in the Application.
“Future OFS Proprietary Accounts”
means any direct or indirect, wholly- or majority-owned subsidiary of OFSAM that is formed in the future that, from time to time,
may hold various financial assets in a principal capacity and intends to participate in the program of co-investment described
in the Application.
“Future Regulated Fund”
means a closed-end management investment company (a) that is registered under the Act or has elected to be regulated as a BDC,
(b) whose investment adviser (and sub-adviser(s), if any) is an Adviser, and (c) that intends to participate in the program of
co-investment described in the Application.
“Independent Director”
means a member of the Board of any Regulated Fund who is not an “interested person” as defined in Section 2(a)(19)
of the Act. No Independent Director of a Regulated Fund will have a financial interest in any Co-Investment Transaction, other
than indirectly through share ownership in one of the Regulated Funds.
“JT No-Action Letters”
means SMC Capital, Inc., SEC No-Action Letter (pub. avail. Sept. 5, 1995) and Massachusetts Mutual Life Insurance Company,
SEC No-Action Letter (pub. avail. June 7, 2000).
“Objectives and Strategies”
means a Regulated Fund’s investment objectives and strategies, as described in its most current registration statement on
Form N-2, other current filings with the Commission under the Securities Act of 1933 (the “Securities Act”) or under
the Securities Exchange Act of 1934, as amended, and its most current report to stockholders.
“Potential Co-Investment Transaction”
means any investment opportunity in which a Regulated Fund (or its Wholly-Owned Investment Sub) could not participate together
with one or more Affiliated Funds and/or one or more other Regulated Funds without obtaining and relying on the Order.
“Pre-Boarding Investments”
are investments in an issuer held by a Regulated Fund as well as one or more Affiliated Funds and/or one or more other Regulated
Funds that were acquired prior to participating in any Co-Investment Transaction:
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i.)
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in transactions in which the only term negotiated by or on behalf of such funds was price in reliance on one of the JT No-Action
Letters; or
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ii.)
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in transactions occurring at least 90 days apart and without coordination between the Regulated Fund and any Affiliated Fund
or other Regulated Fund.
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“Regulated Funds”
means the Existing Regulated Funds and any Future Regulated Funds.
“Related Party”
means (i) any Close Affiliate and (ii) in respect of matters as to which any Adviser has knowledge, any Remote Affiliate.
“Remote Affiliate”
means any person described in Section 57(e) 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.
“Required Majority”
means a required majority, as defined in Section 57(o) of the Act.7
“Tradable Security”
means a security that meets the following criteria at the time of Disposition:
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(i)
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it trades on a national securities exchange or designated offshore securities market as defined in rule 902(b) under the Securities
Act;
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(ii)
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it is not subject to restrictive agreements with the issuer or other security holders; and
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(iii)
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it trades with sufficient volume and liquidity (findings as to which are documented by the Advisers to any Regulated Funds,
holding investments in the issuer and retained for the life of the Regulated Fund) to allow each Regulated Fund to dispose of its
entire position remaining after the proposed Disposition within a short period of time not exceeding 30 days at approximately the
value (as defined by Section 2(a)(41) of the Act) at which the Regulated Fund has valued the investment.
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“Wholly-Owned Investment Sub”
means an entity (i) that is wholly-owned8
by a Regulated Fund (with such Regulated Fund at all times holding, beneficially and of record, directly or indirectly, 95% or
more of the voting and economic interests); (ii) whose sole business purpose is to hold one or more investments on behalf of such
Regulated Fund (and, in the case of a SBIC Subsidiary (defined below), maintain a license under the SBA Act (defined below) and
issue debentures guaranteed by the SBA (defined below)); (iii) with respect to which such Regulated Fund’s Board has the
sole authority to make all determinations with respect to the entity’s participation under the Conditions to this Application;
and that (iv) (A) would be an investment company but for Section 3(c)(1), 3(c)(5)(C),
or 3(c)(7) of the Act, (B) relies on Rule 3a-7 under the Act, or (C) qualifies as a REIT within the meaning of Section 856
of the Code because substantially all of its assets would consist of real properties. The term “SBIC Subsidiary”
means a Wholly-Owned Investment Sub that is licensed by the Small Business Administration (the “SBA”)
to operate under the Small Business Investment Act of 1958, as amended, (the “SBA Act”) as a small business
investment company.
Applicants below may be deemed to be directly
or indirectly controlled by Orchard Investments III, LLC (“OI3”). OI3 is organized as a Delaware limited
liability company and is a holding company that does not currently offer investment advisory
services to any person and is not expected to do so in the future. Accordingly, OI3 has not been included as an Applicant.
7
In the case of a Regulated Fund that is a registered closed-end fund, the Board members that make up the Required Majority will
be determined as if the Regulated Fund were a BDC subject to Section 57(o).
8 A “wholly-owned
subsidiary” of a person is as defined in Section 2(a)(43) of the Act and means a company 95% or more of the outstanding
voting securities of which are owned by such person.
OFS BDC is a Delaware corporation organized
as a closed-end management investment company that has elected to be regulated as a BDC under Section 54(a) of the 1940
Act. On November 7, 2012, OFS Capital, LLC, a Delaware limited liability company and the predecessor to OFS BDC, converted
into a Delaware corporation, OFS BDC, and the outstanding limited liability company interests in OFS Capital, LLC were converted
into 2,912,024 shares of common stock in OFS BDC. The common stock of OFS BDC trades on the Nasdaq Global Select Market under the
symbol “OFS.” As of September 30, 2019, OFS BDC had net assets of approximately $170.4 million. OFS BDC’s
Objectives and Strategies are to generate both current income and capital appreciation primarily through debt investments
and, to a lesser extent, equity investments. OFS BDC’s investment strategy, which includes the Existing SBIC Subsidiary,
focuses primarily on investments in middle-market companies in the United States, including senior secured loans, which includes
first-lien, second-lien and unitranche loans as well as subordinated loans and, to a lesser extent, warrants and other minority
equity securities.
The Board of OFS BDC is comprised of five
directors, three of whom are Independent Directors. OFS
BDC's Board has delegated daily management and investment authority to OFS Adviser pursuant to an investment advisory agreement.
In addition, for income tax purposes, OFS
BDC, other than any tax blocker entity it may form, has elected to be treated as a regulated investment company (“RIC”)
under Subchapter M of the Code.
Hancock BDC was organized as a corporation
under the General Corporate Laws of the State of Maryland on December 8, 2015 for the purpose of operating as an externally managed,
non-diversified, closed-end management investment company that has elected to be regulated as a BDC under Section 2(a)(48) of
the 1940 Act. Structured as a private BDC, Hancock BDC is offering shares of its common stock on a best efforts, continuous
basis. As of September 30, 2019, Hancock BDC had net assets of approximately $28.9 million. Hancock BDC’s Objectives and
Strategies are to provide its shareholders with both current income and capital appreciation primarily through debt investments
and, to a lesser extent, equity investments. Hancock BDC’s investment strategy focuses primarily on investments in middle-market
companies in the United States, including senior secured loans, which includes first-lien, second-lien and unitranche loans as
well as subordinated loans and, to a lesser extent, warrants and other equity securities.
The Board of Hancock BDC is comprised of
three directors, two of whom are Independent Directors. Hancock
BDC's Board has delegated daily management and investment authority to OFS Adviser pursuant to an investment advisory agreement.
Hancock BDC has
made an election to be treated for tax purposes as a RIC under the Code and intends to continue to make such election in the future.
OFS Credit was organized as a Delaware corporation
on September 1, 2017 for the purpose of operating as a non-diversified, externally managed closed-end management investment company
that has registered as an investment company under the Act. OFS Credit completed the initial public offering of shares
of its common stock in October 2018 and its shares are listed on the Nasdaq Capital Market. As of October 31, 2019, OFS Credit
had net assets of approximately $45.8 million. OFS Credit’s primary investment objective is to generate current income, with
a secondary objective to generate capital appreciation. Under normal market conditions, OFS Credit invests at least 80% of its
total assets, or net assets plus borrowings, in floating rate credit-based instruments and other structured credit investments
including (i) collateralized loan obligation (“CLO”) debt and subordinated (i.e., residual or equity) securities;
(ii) traditional corporate credit investments, including leveraged loans and high yield bonds; (iii) opportunistic credit
investments, including stressed and distressed credit situations and long/short credit investments; and (iv) other credit-related
instruments.
The Board of OFS Credit is comprised of
five directors, three of whom are Independent Directors. OFS
Credit's Board has delegated daily management and investment authority to OFS Adviser pursuant to an investment advisory agreement.
OFS Credit has
made an election to be treated for tax purposes as a RIC under the Code and intends to continue to make such election in the future.
CIM RACR was organized as a Delaware statutory
trust on February 4, 2019 and is registered as an investment company under the Act. CIM RACR will be a continuously offered, non-diversified,
closed-end management investment company that will be operated as an interval fund pursuant to Rule 23c-3 under the Act. CIM RACR’s
investment objective is to generate current income through cash distributions and preserve and protect shareholders’ capital
across various market cycles, with a secondary objective of capital appreciation. CIM RACR will seek to achieve its investment
objective by investing, under normal circumstances, at least 80% of its net assets (plus any borrowings for investment purposes)
in “real assets” and “credit and credit-related investments”.
CIM IC Advisor serves as CIM RACR’s
investment adviser pursuant to an investment advisory agreement by and between CIM IC Advisor and CIM RACR (the “CIM
IC Advisory Agreement”). Each of OFS Adviser and CIMSA serve as investment sub-advisers to CIM RACR pursuant to their
respective sub-advisory agreements with CIM IC Advisor.
CIM RACR’s business and affairs are
managed under the direction of a Board. The Board of CIM RACR is comprised of five trustees, three of whom are Independent Directors.
CIM RACR intends to file an election to be treated as a RIC under Subchapter M of the Code, and intends to continue to make such
election in the future.
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E.
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Existing OFS BDC Subsidiaries
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OFS BDC’s investment strategy includes
the Existing SBIC Subsidiary, which is a Wholly-Owned Investment Sub of OFS BDC. The Existing SBIC Subsidiary is a Delaware limited
partnership and received an SBIC license from the SBA in May 2012. The SBIC license allows the Existing SBIC Subsidiary to receive
SBA-guaranteed debenture funding, subject to the issuance of a leverage commitment by the SBA and other customary procedures. SBA
leverage funding is subject to the Existing SBIC Subsidiary’s payment of certain fees to the SBA, and the ability of the
Existing SBIC Subsidiary to draw on the leverage commitment is subject to its compliance with SBA regulations and policies, including
an audit by the SBA.
On November 26, 2013, OFS BDC obtained an
exemptive order9 from the SEC to
permit OFS BDC to exclude the debt of the Existing SBIC Subsidiary guaranteed by the SBA from the definition of senior securities
in the statutory 200% asset coverage ratio under the 1940 Act, allowing for greater capital deployment.
The other Existing OFS BDC Subsidiaries
are each a Wholly-Owned Investment Sub of OFS BDC formed specifically for the purpose of procuring financing or otherwise holding
investments. Pursuant to the documents governing each of the Existing OFS BDC Subsidiaries, OFS Adviser, as investment adviser
to OFS BDC, oversees the management of the assets of each of the Existing OFS BDC Subsidiaries.
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F.
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Hancock BDC Subsidiaries
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The Hancock BDC Subsidiaries are each a
Wholly-Owned Investment Sub of Hancock BDC formed specifically for the purpose of procuring financing or otherwise holding investments.
Pursuant to the documents governing the Hancock BDC Subsidiaries, OFS Adviser, as investment adviser to Hancock BDC, oversees the
management of the assets of the Hancock BDC Subsidiaries.
OFS Adviser is a Delaware limited liability
company and an investment adviser registered with the Commission under the Advisers Act. OFS Adviser is a direct subsidiary of
OFSAM.
OFS Adviser serves as investment adviser
to OFS BDC, Hancock BDC and OFS Credit and manages the respective portfolios of each of OFS BDC, Hancock BDC and OFS Credit in
accordance with their respective Objectives and Strategies. The investment professionals of OFS Adviser are responsible for determining
the composition of the portfolios OFS BDC, Hancock BDC and OFS Credit, the nature and timing of the changes to their respective
portfolio and the manner of implementing such changes; assisting each of OFS BDC, Hancock BDC and OFS Credit in determining what
securities it should purchase, retain or sell; identifying, evaluating, and negotiating the structure of the investments that each
of OFS BDC, Hancock BDC and OFS Credit makes (including performing due diligence on prospective
portfolio companies); and executing, closing, servicing and monitoring the investments that each of OFS BDC, Hancock BDC and OFS
Credit makes.
9
OFS Capital Corporation, et al. (File No. 812-14185) Investment Company Act Rel. Nos. 30771 (October 30, 2013) (notice)
and 30812 (November 26, 2013) (order).
OFS Adviser also will serve as sub-adviser
to CIM RACR pursuant to an investment sub-advisory agreement between CIM IC Advisor and OFS Adviser (the “OFS Sub-Advisory
Agreement”). OFS Adviser will be responsible for identifying and sourcing credit and credit-related investment opportunities,
including, but not limited to, investments in middle-market companies, broadly syndicated loans, investments in the debt and equity
tranches of CLOs, opportunistic credit investments (including stressed and distressed credit situations) and other credit-related
instruments. OFS Adviser will also be responsible for identifying and sourcing investments in collateralized mortgage-backed securities.
Together with CIMSA, OFS Adviser will provide
investment advisory and management services to CIM RACR. Under the terms of the OFS Sub-Advisory Agreement, OFS Adviser will, with
respect to the assets of CIM RACR over which it has discretionary authority: (i) identify, evaluate and negotiate the structure
of investments (including performing due diligence on prospective portfolio companies); (ii) close and monitor investments;
and (iii) determine the securities and other assets to be purchased, retained or sold. CIM IC Advisor and OFS Adviser will
enter into the OFS Sub-Advisory Agreement, the terms of which the parties expect will provide OFS Adviser with broad delegated
authority to oversee its applicable portion of CIM RACR’s portfolio.
As noted above, CIM IC Advisor will delegate
substantially all of its portfolio-management obligations as set forth in the CIM IC Advisory Agreement to OFS Adviser and CIMSA
pursuant to the OFS Sub-Advisory Agreement and the CIMSA Sub-Advisory Agreement (as defined below), respectively. CIM IC Adviser
will have general oversight over the investment process on behalf of CIM RACR. CIM IC Advisor will also have ultimate responsibility
for CIM RACR’s performance under the terms of the OFS Sub-Advisory Agreement.
OFS CLO Adviser is a Delaware limited liability
company and an investment adviser registered with the Commission under the Advisers Act. OFS CLO Adviser is a direct subsidiary
of OFS Funding I, LLC, which is wholly-owned by OFSAM.
OFS CLO Adviser serves as investment adviser
to the OFS Affiliated Funds that it manages. OFS CLO Adviser provides investment advisory services that include sourcing and/or
originating potential investments, conducting research and due diligence on potential investments and equity sponsors, analyzing
investment opportunities, holding risk retention interests, and monitoring investments and portfolio companies. OFS CLO Adviser
focuses primarily on investments in broadly syndicated U.S. loans; however, OFS CLO Management may provide investment advice regarding
a variety of investments, including other types of debt and equity as well as broadly syndicated loans in non-U.S. (i.e., European)
jurisdictions. OFS CLO Adviser does not currently advise any entities that rely on Rule 3a-7, but may do so in the future.
Either OFS CLO Adviser or OFS Adviser serves
as the investment adviser to each Existing OFS Affiliated Fund, as noted on Appendix A, and manages their respective portfolios.
CIM Capital Advisor
is a Delaware limited liability company and is an investment adviser registered with the Commission under the Advisers Act. CIM
Capital Advisor is under common control with OFSAM and CIMSA. CIM Capital Advisor currently serves as the investment adviser to
the Existing CIM Funds, listed on Appendix B, and manages their respective portfolios.
CIM IC Advisor is a Delaware limited liability
company and is an investment adviser registered with the Commission under the Advisers Act. CIM IC Advisor is under common control
with CIMSA, CIM Capital Advisor and OFSAM. CIM IC Advisor serves as CIM RACR’s investment adviser pursuant to an investment
advisory agreement by and between CIM IC Advisor and CIM RACR. CIM IC Advisor engages affiliated sub-advisers who provide discretionary
portfolio management services with respect to the assets allocated to each sub-adviser.
CIM IC Advisor will be responsible for the
overall management of the CIM RACR’s activities pursuant to the CIM IC Advisory Agreement. CIM IC Advisor will engage CIMSA
and OFS Adviser to serve as investment sub-advisers to the CIM RACR, as discussed below.
CIM IC Advisor will delegate substantially
all of its portfolio-management obligations as set forth in the CIM IC Advisory Agreement to CIMSA and OFS Adviser pursuant to
investment sub-advisory agreements, as discussed below. CIM IC Advisor will have general oversight over the investment process
on behalf of CIM RACR. CIM IC Advisor will also have ultimate responsibility for CIM RACR’s performance under the terms of
the respective investment sub-advisory agreements.
CIM IC Advisor will not source any Potential
Co-Investment Transactions under the requested Order.
CIMSA will serve as an investment sub-adviser
to CIM RACR pursuant to an investment sub-advisory agreement between CIM IC Advisor and CIMSA (the “CIMSA Sub-Advisory
Agreement” and, together with the CIM IC Advisory Agreement and the OFS Sub-Advisory Agreement, the “CIM
RACR Advisory Agreements”). CIMSA will be responsible for making investment decisions with respect to real assets-related
investments held by CIM RACR, either through a REIT subsidiary (which would be a Wholly-Owned Investment Sub) or directly.
Together with OFS Adviser, CIMSA will provide investment advisory
and management services to CIM RACR. Under the terms of the CIMSA Sub-Advisory Agreement, CIMSA will, with respect to the assets
of CIM RACR over which it has discretionary authority: (i) identify,evaluate and negotiate the structure of investments (including
performing due diligence on prospective portfolio companies); (ii) close and monitor investments; and (iii) determine
the securities and other assets to be purchased, retained or sold. CIM IC Advisor and CIMSA will enter into the CIMSA Sub-Advisory
Agreement, the terms of which the parties expect will provide CIMSA with broad delegated authority to oversee its applicable portion
of CIM RACR’s portfolio.
As noted above, CIM IC Advisor will delegate
substantially all of its portfolio-management obligations as set forth in the CIM IC Advisory Agreement to OFS Adviser and CIMSA
pursuant to the OFS Sub-Advisory Agreement and the CIMSA Sub-Advisory Agreement, respectively. CIM IC Advisor will have general
oversight over the investment process on behalf of CIM RACR. CIM IC Advisor will also have ultimate responsibility for CIM RACR’s
performance under the terms of the CIMSA Sub-Advisory Agreement.
|
L.
|
Existing Cole Advisers
|
The Existing Cole Advisers make real assets
investments on behalf of their clients. Each Existing Cole Adviser (i) is not registered as an investment adviser under the Advisers
Act, and (ii) will not advise the Existing Cole Funds under the Order, or any other client participating in the program of co-investment
described in the Application, with respect to securities unless it registers as an investment adviser under the Advisers Act. Each
Existing Cole Adviser will not source Potential Co-Investment Transactions under the required Order and is only deemed to be an
Adviser for purposes of Conditions 2(c)(iv), 13 and 14. Because the Existing Cole Advisers are not Advisers, each Existing Cole
Fund will engage an Adviser to serve as investment adviser and/or sub-adviser with respect to any securities that would be subject
to the Order.
|
M.
|
The Existing OFS Proprietary Accounts - OFSAM and OFS Funding I, LLC
|
OFS Funding I, LLC is controlled by OFSAM,
which also controls OFS Adviser and OFS CLO Adviser. The OFS Proprietary Accounts hold various financial assets in a principal
capacity. OFSAM has various business lines that it operates through its wholly- or majority-owned subsidiaries, and the subsidiary
that exists and currently intends to participate in the program of co-investment described in the Application (i.e., OFS Funding
I, LLC) has been included as an Applicant herein.
|
N.
|
Existing OFS Affiliated Funds, Existing CIM Funds, and Existing Cole Funds
|
Each of the Existing Affiliated Funds is
a separate and distinct legal entity that either (i) would be an investment company but for
Section 3(c)(1), 3(c)(5)(C) or 3(c)(7) of the Act; (ii) relies on Rule 3a-7 under the Act; (iii) does not meet the definition
of investment company under the Act and qualifies as a REIT within the meaning of Section 856 of the Code because substantially
all of its assets would consist of real properties.
Each of the Existing OFS Affiliated Funds
is listed in Appendix A. Each of the Existing OFS Affiliated Funds’ investment adviser is OFS Adviser or OFS CLO Adviser.
Each of the Existing CIM Funds is listed
in Appendix B. As discussed above, the investment adviser to each Existing CIM Fund is CIM Capital Advisor.
Each of the Existing Cole Funds is listed
in Appendix C. Because the Existing Cole Advisers are not Advisers, each Existing Cole Fund will engage an Adviser to serve as
investment adviser and/or sub-adviser with respect to any securities that would be subject to the Order.
The
Applicants respectfully request an Order of the Commission under Sections 17(d) and 57(i) and Rule 17d-1 thereunder to permit,
subject to the terms and conditions set forth below in this Application (the “Conditions”), a Regulated
Fund and one or more other Regulated Funds and/or one or more Affiliated Funds to enter into Co-Investment Transactions with each
other.
The
Regulated Funds and the Affiliated Funds seek relief to enter into Co-Investment Transactions because such Co-Investment Transactions
would otherwise be prohibited by either or both of Section 17(d) or Section 57(a)(4) and the Rules under the Act. This
Application seeks relief in order to (i) enable the Regulated Funds and Affiliated Funds to avoid, among other things, the practical
commercial and/or economic difficulties of trying to structure, negotiate and persuade counterparties to enter into transactions
while awaiting the granting of the relief requested in individual applications with respect to each Co-Investment Transaction that
arises in the future and (ii) enable the Regulated Funds and the Affiliated Funds to avoid the significant legal and other expenses
that would be incurred in preparing such individual applications.
Similar to many precedents, the Applicants
seek relief that would permit Co-Investment Transactions in the form of initial investments, Follow-On Investments and Dispositions
in an issuer. In these cases, the terms and Conditions of this Application would govern the entire lifecycle of an investment with
respect to a particular issuer, including both the initial investment and any subsequent transactions. Further, in line with recent
precedents,10 the Applicants also
seek the ability to make Follow-On Investments and Dispositions in issuers where the Regulated Funds and Affiliated Funds did not
make their initial investments in reliance on the Order. The Applicants seek this flexibility because the Regulated Funds and Affiliated
Funds may, at times, invest in the same issuer without engaging in a prohibited joint transaction but then find that subsequent
transactions with that issuer would be prohibited under the Act. Through the proposed “onboarding process,” discussed
below, the Applicants would, under certain circumstances, be permitted to rely on the Order to complete
subsequent Co-Investment Transactions. In Section A.1. below, the Applicants first discuss the overall investment process that
would apply to initial investments under the Order as well as subsequent transactions with issuers. In Sections A.3. and A.4. below,
the Applicants discuss additional procedures that apply to Follow-On Investments and Dispositions, including the onboarding process
that applies when initial investments were made without relying on the Order.
10
See Nuveen Churchill BDC LLC, et al. (File No. 812-14898) Release No. IC-33503 (June 7, 2019) (order), Release No. IC-33475
(May 15, 2019) (notice); TCG BDC, Inc., et al. (File No. 812-14798) Release No. IC-32969 (January 17, 2018) (order), Release
No. IC-32945 (December 20, 2017) (notice); Oaktree Strategic Income, LLC, et al. (File No. 812-14758) Release No. IC-32862
(October 18, 2017) (order), Release No. IC-32831 (September 22, 2017) (notice); Ares Capital Corporation, et al. (File No. 812-13603)
Release No. IC-32427 (January 18, 2017) (order), Release No. IC-32399 (December 21, 2016) (notice); and Apollo Investment Corporation,
et al. (File No. 812-13754) Release No. IC-32057 (March 29, 2016) (order), Release No. IC-32019 (March 2, 2016) (notice).
Applicants
include multiple Advisers that are under common control. The Advisers manage numerous credit and real assets funds and separate
accounts with a wide variety of mandates. These clients currently include registered investment companies and BDCs that are
regulated under the Act.
Each
Adviser manages the assets entrusted to it by its clients in accordance with its fiduciary duty to those clients and, in the case
of the BDCs and any registered investment companies, the Act.
The Advisers are presented with thousands
of investment opportunities each year on behalf of their clients and the Advisers must determine how to allocate those opportunities
in a manner that, over time, is fair and equitable to all of their clients, and without violating the prohibitions on joint transactions
included in Section 17(d), Rule 17d-1 and Section 57(a)(4) of the Act. Such investment opportunities may be joint transactions
such that the Advisers may not include a Regulated Fund in the allocation if another Regulated Fund and/or any Affiliated Fund
is participating. Once invested in a security, the Regulated Funds and Affiliated Funds may have the opportunity to either complete
an additional investment in the same issuer or exit the investment in a transaction that may be a joint transaction. Currently,
if a Regulated Fund and one or more Affiliated Funds have invested in an issuer without relying on the Prior Order, such funds
may not participate in a negotiated Follow-On Investment or Disposition.
As a result, the Regulated Funds and Affiliated
Funds are limited in the types of transactions in which they can participate with each other, and the Regulated Funds are required
to forego potential transactions that would be beneficial to investors in the Regulated Funds. Thus, Applicants are seeking the
relief requested by the Application for certain initial investments, Follow-On Investments, and Dispositions as described below.
The Applicants discuss the need for the
requested relief in greater detail in Section III.C. below.
The
Existing Advisers have established, and each of the Future Advisers will establish, rigorous processes for ensuring compliance
with the Prior Order and for allocating initial investment opportunities, opportunities for subsequent investments in an issuer
and dispositions of securities holdings reasonably designed to treat all clients fairly and equitably. As discussed below, these
processes will be extended and modified in a manner reasonably designed to ensure that the additional transactions permitted under
the Order will both (i) be fair and equitable to the Regulated Funds and the Affiliated Funds and (ii) comply with
the Conditions contained in the Order.
1.
The Investment Process
The investment process under the Order will
consist of three stages: (i) the identification and consideration of investment opportunities (including follow-on investment
opportunities); (ii) order placement and allocation; and (iii) consideration by each applicable Regulated Fund’s
Board when a Potential Co-Investment Transaction is being considered by one or more Regulated Funds, as provided by the Order.
|
(a)
|
Identification and Consideration of Investment Opportunities
|
The Advisers are organized and managed such
that the individual portfolio managers and investment teams responsible for identifying and evaluating investment opportunities
and making investment decisions on behalf of clients are promptly notified of the opportunities.
Opportunities for Potential Co-Investment
Transactions may arise when investment advisory personnel of an Adviser become aware of investment opportunities that may be appropriate
for a Regulated Fund and one or more other Regulated Funds and/or one or more Affiliated Funds. If the requested Order is granted,
the Advisers will establish, maintain and implement policies and procedures reasonably designed to ensure that, when such opportunities
arise, the Advisers to the relevant Regulated Funds are promptly notified and receive the same information about the opportunity
as any other Advisers considering the opportunity for their clients. In particular, consistent with Condition 1, if a Potential
Co-Investment Transaction falls within the then-current Objectives and Strategies and any Board-Established Criteria of a Regulated
Fund, the policies and procedures will require that the relevant portfolio managers, investment teams and/or investment committees
responsible for that Regulated Fund receive sufficient information to allow the Regulated Fund’s Adviser to make its independent
determination and recommendations under Conditions 1, 2(a), 6, 7, 8 and 9 (as applicable).11
In addition, the policies and procedures will specify the individuals or roles responsible for carrying out the policies and procedures,
including ensuring that the Advisers receive such information. After receiving notification of a Potential Co-Investment Transaction
under Condition 1(a), the Adviser to each applicable Regulated Fund, working through the applicable portfolio manager, or in conjunction
with any applicable investment team or investment committee, will then make an independent determination of the appropriateness
of the investment for the Regulated Fund in light of the Regulated Fund’s then-current circumstances.
11
Representatives from each Adviser to a Regulated Fund are members of each investment team or investment committee, or are otherwise
entitled to participate in each meeting of any investment team or investment committee, that is expected to approve or reject recommended
investment opportunities falling within its Regulated Funds’ Objectives and Strategies and Board-Established Criteria. Accordingly,
the policies and procedures may provide, for example, that the Adviser will receive the information required under Condition 1
in conjunction with its representatives’ participation in the relevant investment team or investment committee. The investment
committees will keep a record of their meetings, and at those meetings, the investment teams will recommend investments to the
committees. Such record will include reference to the specific investment opportunities considered at the meeting, including those
recommended by the investment teams.
The Applicants acknowledge that some of
the Affiliated Funds may not be funds advised by Advisers because they are OFS Proprietary Accounts (i.e., the OFS Companies investing
in a principal capacity). The Applicants do not believe that the participation of OFS Proprietary Accounts in the program of co-investment
described in the Application would raise any regulatory or mechanical concerns different from those discussed with respect to the
Affiliated Funds that are advised by Advisers. In accordance with the allocation policies and procedures, Potential Co-Investment
Transactions will be offered to, and allocated among, the Affiliated Funds (including the OFS Proprietary Accounts) and Regulated
Funds based on each client’s particular Objectives and Strategies and in accordance with the Conditions.
Applicants represent that, if the requested
Order is granted, the investment advisory personnel of the Advisers to the Regulated Funds will be charged with making sure they
identify, and participate in this process with respect to, each investment opportunity that falls within the Objectives and Strategies
and Board-Established Criteria of each Regulated Fund. Applicants assert that the Advisers’ allocation policies and procedures
will be structured so that the relevant investment advisory personnel for each Regulated Fund will be promptly notified of all
Potential Co-Investment Transactions that fall within the then-current Objectives and Strategies and Board-Established Criteria
of such Regulated Fund and that the Advisers will undertake to perform these duties regardless of whether the Advisers serve as
investment adviser or sub-adviser to the Regulated Fund or Affiliated Funds.
|
(b)
|
Order Placement and Allocation
|
General. If the applicable Adviser
to a Regulated Fund deems the Regulated Fund’s participation in any Potential Co-Investment Transaction to be appropriate,
it will, working through the applicable portfolio manager or in conjunction with any applicable investment team or investment committee,
formulate a recommendation regarding the proposed order amount for the Regulated Fund. In doing so, the Adviser and any applicable
investment team or investment committee may consider such factors, among others, as available capital; investment objectives or
current investment strategies; risk profiles; regulatory issues, restrictions, concentrations and diversity limits; industry restrictions;
potential conflicts of interest; the effects of current and anticipated market and general economic conditions as they relate to
the Regulated Fund; existing and prior positions in an issuer or security; and such other matters as may be reasonably taken into
account by the Adviser.
Allocation Procedure. For each Regulated
Fund and Affiliated Fund whose Adviser recommends participating in a Potential Co-Investment Transaction, the Adviser will submit
a proposed order amount to an allocation committee on which senior management and legal or compliance personnel participate. These
allocation committees are structured with overlapping membership to ensure consistency of approach. At this stage, each proposed
order amount may be reviewed and adjusted, in accordance with the Advisers’ written allocation policies and procedures.
[12] The order of a Regulated Fund or Affiliated
Fund resulting from this process is referred to as its “Internal Order”. The Internal Order of participating
Regulated Funds will be submitted for approval by the Required Majority of any participating Regulated Funds in accordance with
the Conditions and as discussed in Section III.A.1.c. below.
12
The reason for any such adjustment to a proposed order amount will be documented in writing and preserved in the records of the
Advisers.
If the aggregate Internal Orders for a Potential
Co-Investment Transaction do not exceed the size of the investment opportunity immediately prior to the submission of the orders
to the underwriter, broker, dealer or issuer, as applicable (the “External Submission”), then each Internal
Order will be placed with the expectation that it will be fulfilled as placed. If, on the other hand, the aggregate Internal Orders
for a Potential Co-Investment Transaction exceed the size of the investment opportunity immediately prior to the External Submission,
then the allocation of the opportunity will be made pro rata on the basis of the size of the Internal Orders.13
If, subsequent to such External Submission, the size of the opportunity is increased or decreased, or if the terms of such opportunity,
or the facts and circumstances applicable to the Regulated Funds’ or the Affiliated Funds’ consideration of the opportunity,
change, the participants will be permitted to submit revised Internal Orders in accordance with written allocation policies and
procedures that the Advisers will establish, implement and maintain. The Board of the Regulated Fund will then either approve or
disapprove of the investment opportunity in accordance with Condition 2, 6, 7, 8 or 9, as applicable.
Compliance. The Applicants represent
that the Advisers’ allocation review process is a robust process designed as part of their overall compliance policies and
procedures to ensure that every client is treated fairly and that the Advisers are following their allocation policies. The entire
allocation process is monitored and reviewed by the compliance team, led by the chief compliance officer of the applicable Adviser,
and approved by the Board of each Regulated Fund as it applies to such Regulated Fund.
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(c)
|
Approval of Potential Co-Investment Transactions
|
A
Regulated Fund will enter into a Potential Co-Investment Transaction with one or more other Regulated Funds and/or Affiliated Funds
only if, prior to the Regulated Fund’s participation in the Potential Co-Investment Transaction, the Required Majority approves
it in accordance with the Conditions of this Order.
A Regulated Fund may participate in Pro
Rata Dispositions (defined below) and Pro Rata Follow-On Investments (defined below) without obtaining prior approval of the Required
Majority in accordance with Conditions 6(c)(i) and 8(b)(i).
All Regulated Funds and Affiliated Funds
participating in a Co-Investment Transaction will invest at the same time, for the same price and with the same terms, conditions,
class, registration rights and any other rights, so that none of them receives terms more favorable than any other. However, the
settlement date for an Affiliated Fund in a Co-Investment Transaction may occur up to ten business days after the settlement date
for the Regulated Fund, and vice versa. Nevertheless, in all cases, (i) the date on
which the commitment of the Affiliated Funds and Regulated Funds is made will
be the same even where the settlement date is not, and (ii) the earliest settlement date and the latest settlement date of any
Affiliated Fund or Regulated Fund participating in the transaction will occur within ten business days of each other.
13
The Advisers will maintain records of all proposed order amounts, Internal Orders and External Submissions in conjunction with
Potential Co-Investment Transactions. Each applicable Adviser will provide the Eligible Directors with information concerning the
Affiliated Funds’ and Regulated Funds’ order sizes to assist the Eligible Directors with their review of the applicable
Regulated Fund’s investments for compliance with the Conditions.
|
3.
|
Permitted Follow-On Investments and Approval of Follow-On Investments
|
From time to time the Regulated Funds and
Affiliated Funds may have opportunities to make Follow-On Investments in an issuer in which a Regulated Fund and one or more other
Regulated Funds and/or Affiliated Funds previously have invested and continue to hold an investment. If the Order is granted, Follow-On
Investments will be made in a manner that, over time, is fair and equitable to all of the Regulated Funds and Affiliated Funds
and in accordance with the proposed procedures discussed above and with the Conditions of the Order.
The Order would divide Follow-On Investments
into two categories depending on whether the Regulated Funds and Affiliated Funds holding investments in the issuer previously
participated in a Co-Investment Transaction with respect to the issuer and continue to hold any securities acquired in a Co-Investment
Transaction for that issuer. If such Regulated Funds and Affiliated Funds have previously participated in a Co-Investment Transaction
with respect to the issuer, then the terms and approval of the Follow-On Investment would be subject to the process discussed in
Section III.A.3.a. below and governed by Condition 8. These Follow-On Investments are referred to as “Standard Review Follow-Ons.”
If such Regulated Funds and Affiliated Funds have not previously participated in a Co-Investment Transaction with respect to the
issuer, then the terms and approval of the Follow-On Investment would be subject to the “onboarding process” discussed
in Section III.A.3.b. below and governed by Condition 9. These Follow-On Investments are referred to as “Enhanced Review
Follow-Ons.”
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(a)
|
Standard Review Follow-Ons
|
A Regulated Fund may invest in Standard
Review Follow-Ons either with the approval of the Required Majority using the procedures required under Condition 8(c) or, where
certain additional requirements are met, without Board approval under Condition 8(b).
A Regulated Fund may participate in a Standard
Review Follow-On without obtaining the prior approval of the Required Majority if it is (i) a Pro Rata Follow-On Investment or
(ii) a Non-Negotiated Follow-On Investment.
A “Pro Rata Follow-On Investment”
is a Follow-On Investment (i) in which the participation of each Affiliated Fund and each Regulated Fund is proportionate to its
outstanding investments in the issuer or security, as appropriate,14
immediately preceding the Follow-On Investment, and (ii) in the case of a Regulated Fund, a majority of the Board has approved
the Regulated Fund’s participation in the pro rata Follow-On Investments as being in the best interests of the Regulated
Fund. The Regulated Fund’s Board may refuse to approve, or at any time rescind, suspend or qualify, their approval of Pro
Rata Follow-On Investments, in which case all subsequent Follow-On Investments will be submitted
to the Regulated Fund’s Eligible Directors in accordance with Condition 8(c).
14
See footnote 36 below.
A “Non-Negotiated Follow-On
Investment” is a Follow-On Investment in which a Regulated Fund participates together with one or more Affiliated
Funds and/or one or more other Regulated Funds (i) in which the only term negotiated by or on behalf of the funds is price and
(ii) with respect to which, if the transaction were considered on its own, the funds would be entitled to rely on one of the JT
No-Action Letters.
Applicants believe that these Pro Rata and
Non-Negotiated Follow-On Investments do not present a significant opportunity for overreaching on the part of any Adviser and thus
do not warrant the time or the attention of the Board.
Pro Rata Follow-On Investments and Non-Negotiated
Follow-On Investments remain subject to the Board’s periodic review in accordance with Condition 10.
|
(b)
|
Enhanced Review Follow-Ons
|
One or more Regulated Funds and/or one or
more Affiliated Funds holding Pre-Boarding Investments may have the opportunity to make a Follow-On Investment that is a Potential
Co-Investment Transaction in an issuer with respect to which they have not previously participated in a Co-Investment Transaction.
In these cases, the Regulated Funds and Affiliated Funds may rely on the Order to make such Follow-On Investment subject to the
requirements of Condition 9. These enhanced review requirements constitute an “onboarding process” whereby Regulated
Funds and Affiliated Funds may utilize the Order to participate in Co-Investment Transactions even though they already hold Pre-Boarding
Investments. For a given issuer, the participating Regulated Funds and Affiliated Funds need to comply with these requirements
only for the first Co-Investment Transaction. Subsequent Co-Investment Transactions with respect to the issuer will be governed
by Condition 8 under the standard review process.
The Regulated Funds and Affiliated Funds
may be presented with opportunities to sell, exchange or otherwise dispose of securities in a transaction that would be prohibited
by Rule 17d-1 or Section 57(a)(4), as applicable. If the Order is granted, such Dispositions will be made in a manner that, over
time, is fair and equitable to all of the Regulated and Affiliated Funds and in accordance with procedures set forth in the proposed
Conditions to the Order and discussed below.
The Order would divide these Dispositions
into two categories: (i) if the Regulated Funds and Affiliated Funds holding investments in the issuer have previously participated
in a Co-Investment Transaction with respect to the issuer and continue to hold any securities acquired in a Co-Investment Transaction
for such issuer, then the terms and approval of the Disposition (hereinafter referred to as “Standard Review Dispositions”)
would be subject to the process discussed in Section III.A.4.a. below and governed by Condition 6; and (ii) if the Regulated Funds
and Affiliated Funds have not previously participated in a Co-Investment Transaction with respect to the issuer, then the terms
and approval of the Disposition (hereinafter referred to as “Enhanced Review Dispositions”) would be subject
to the same “onboarding process” discussed in Section III.A.3.b. above and governed by Condition 7.
|
(a)
|
Standard Review Dispositions
|
A Regulated Fund may participate in a Standard
Review Disposition either with the approval of the Required Majority using the standard procedures required under Condition 6(d)
or, where certain additional requirements are met, without Board approval under Condition 6(c).
A Regulated Fund may participate in a Standard
Review Disposition without obtaining the prior approval of the Required Majority if (i) the Disposition is a Pro Rata Disposition
or (ii) the securities are Tradable Securities and the Disposition meets the other requirements of Condition 6(c)(ii).
A “Pro Rata Disposition”
is a Disposition (i) in which the participation of each Affiliated Fund and each Regulated Fund is proportionate to its outstanding
investment in the security subject to Disposition immediately preceding the Disposition;15
and (ii) in the case of a Regulated Fund, a majority of the Board has approved the Regulated Fund’s participation in pro
rata Dispositions as being in the best interests of the Regulated Fund. The Regulated Fund’s Board may refuse to approve,
or at any time rescind, suspend or qualify, their approval of Pro Rata Dispositions, in which case all subsequent Dispositions
will be submitted to the Regulated Fund’s Eligible Directors.
In the case of a Tradable Security, approval
of the Required Majority is not required for the Disposition if: (x) the Disposition is not to the issuer or any affiliated person
of the issuer;16 and (y) the security
is sold for cash in a transaction in which the only term negotiated by or on behalf of the participating Regulated Funds and Affiliated
Funds is price. Pro Rata Dispositions and Dispositions of a Tradable Security remain subject to the Board’s periodic review
in accordance with Condition 10.
|
(b)
|
Enhanced Review Dispositions
|
One or more Regulated Funds and one or more
Affiliated Funds that have not previously participated in a Co-Investment Transaction with respect to an issuer may have the opportunity
to make a Disposition of Pre-Boarding Investments in a Potential Co-Investment Transaction. In these cases, the Regulated Funds
and Affiliated Funds may rely on the Order to make such Disposition subject to the requirements of Condition 7. As discussed above,
with respect to investment in a given issuer, the participating Regulated Funds and Affiliated Funds need only complete the onboarding
process for the first Co-Investment Transaction, which may be an Enhanced Review Follow-On or an Enhanced Review Disposition.17
Subsequent Co-Investment Transactions with respect to the issuer will be governed by
Condition 6 or 8 under the standard review process.
15
See note 34, infra.
16
In the case of a Tradable Security, Dispositions to the issuer or an affiliated person
of the issuer are not permitted so that funds participating in the Disposition do not benefit to the detriment of Regulated Funds
that remain invested in the issuer. For example, if a Disposition of a Tradable Security were permitted to be made to the issuer,
the issuer may be reducing its short term assets (i.e., cash) to pay down long term liabilities.
17
However, with respect to an issuer, if a Regulated Fund’s first Co-Investment Transaction is an Enhanced Review Disposition,
and the Regulated Fund does not dispose of its entire position in the Enhanced Review Disposition, then before such Regulated Fund
may complete its first Standard Review Follow-On in such issuer, the Eligible Directors must review the proposed Follow-On Investment
not only on a stand-alone basis but also in relation to the total economic exposure in such issuer (i.e., in combination with the
portion of the Pre-Boarding Investment not disposed of in the Enhanced Review Disposition), and the other terms of the investments.
This additional review is required because such findings were not required in connection with the prior Enhanced Review Disposition,
but they would have been required had the first Co-Investment Transaction been an Enhanced Review Follow-On.
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5.
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Use of Wholly-Owned Investment Subs
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A Regulated Fund may, from time to time,
form one or more Wholly-Owned Investment Subs. Such a subsidiary may be prohibited from investing in a Co-Investment Transaction
with a Regulated Fund (other than its parent) or any Affiliated Fund because it would be a company controlled by its parent Regulated
Fund for purposes of Section 57(a)(4) and Rule 17d-1. Applicants request that each Wholly-Owned Investment Sub be permitted to
participate in Co-Investment Transactions in lieu of the applicable parent Regulated Fund that owns it and that the Wholly-Owned
Investment Sub’s participation in any such transaction be treated, for purposes of the Order, as though the parent Regulated
Fund were participating directly.
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1.
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Section 17(d) and Section 57(a)(4)
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Section 17(d) of the Act generally prohibits
an affiliated person (as defined in Section 2(a)(3) of the Act), or an affiliated person of such affiliated person, of a registered
investment company acting as principal, from effecting any transaction in which the registered investment company is a joint or
a joint and several participant, in contravention of such rules as the Commission may prescribe for the purpose of limiting or
preventing participation by the registered investment company on a basis different from or less advantageous than that of such
other participant.
Similarly, with regard to BDCs, Section 57(a)(4)
prohibits certain persons specified in Section 57(b) from participating in a joint transaction with the BDC, or a company
controlled by the BDC, in contravention of rules as prescribed by the Commission. In particular, Section 57(a)(4) applies
to:
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•
|
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Any director, officer, employee, or member of an advisory board of a BDC or any person (other than the BDC itself) who is an affiliated person of the forgoing pursuant to Section 2(a)(3)(C); or
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|
•
|
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Any investment adviser or promoter of, general partner in, principal underwriter for, or person directly or indirectly either controlling, controlled by, or under common control with, a BDC (except the BDC itself and any person who, if it were not directly or indirectly controlled by the BDC, would not be directly or indirectly under the control of a person who controls the BDC),18 or any person who is an affiliated person of any of the forgoing within the meaning of Section 2(a)(3)(C) or (D).
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Section 2(a)(3)(C) defines an “affiliated
person” of another person to include any person directly or indirectly controlling, controlled by, or under common control
with, such other person. Section 2(a)(3)(D) defines “any officer, director, partner, copartner, or employee” of
an affiliated person as an affiliated person. Section 2(a)(9) defines “control” as the power to exercise a controlling
influence over the management or policies of a company, unless such power is solely the result of an official position with that
company. Under Section 2(a)(9) a person who beneficially owns, either directly or through one or more controlled companies, more
than 25% of the voting securities of a company is presumed to control such company. The Commission and its staff have indicated
on a number of occasions their belief that an investment adviser that provides discretionary investment management services to
a fund and that sponsored, selected the initial directors, and provides administrative or other non-advisory services to the fund,
controls such fund, absent compelling evidence to the contrary.19
Rule 17d-1 generally prohibits an affiliated
person (as defined in Section 2(a)(3)), or an affiliated person of such affiliated person, of a registered investment company
acting as principal, from effecting any transaction in which the registered investment company, or a company controlled by such
registered company, is a joint or a joint and several participant, in contravention of such rules as the Commission may prescribe
for the purpose of limiting or preventing participation by the registered investment company on a basis different from or less
advantageous than that of such first or second tier affiliate. Rule 17d-1 generally prohibits participation by a registered investment
company and an affiliated person (as defined in Section 2(a)(3)) or principal underwriter for that investment company, or
an affiliated person of such affiliated person or principal underwriter, in any “joint enterprise or other joint arrangement
or profit-sharing plan,” as defined in the rule, without prior approval by the Commission by order upon application.
18
Also excluded from this category by Rule 57b-1 is any person who would otherwise be included (a) solely because that person
is directly or indirectly controlled by a business development company, or (b) solely because that person is, within the meaning
of Section 2(a)(3)(C) or (D), an affiliated person of a person described in (a) above.
19
See, e.g., SEC Rel. No. IC-4697 (Sept. 8, 1966)
(“For purposes of Section 2(a)(3)(C), affiliation based upon control would depend on the facts of the given situation, including
such factors as extensive interlocks of officers, directors or key personnel, common investment advisers or underwriters, etc.”);
Lazard Freres Asset Management, SEC No-Action Letter (pub. avail Jan. 10, 1997) (“While, in some circumstances, the nature
of an advisory relationship may give an adviser control over its client’s management or policies, whether an investment company
and another entity are under common control is a factual question...”)
Rule 17d-1 was promulgated by the Commission pursuant to Section 17(d)
and made applicable to persons subject to Sections 57(a) and (d) by Section 57(i) to the extent specified therein. Section 57(i)
provides that, until the Commission prescribes rules under Sections 57(a) and (d), the Commission’s rules under Section 17(d)
applicable to registered closed-end investment companies will be deemed to apply to persons subject to the prohibitions of Section 57(a)
or (d). Because the Commission has not adopted any rules under Section 57(a) or (d), Rule 17d-1 applies to persons subject
to the prohibitions of Section 57(a) or (d).
Applicants seek relief pursuant to Rule
17d-1, which permits the Commission to authorize joint transactions upon application. In passing upon applications filed pursuant
to Rule 17d-1, the Commission is directed by Rule 17d-1(b) to consider whether the participation of a registered investment company
or controlled company thereof in the joint enterprise or joint arrangement under scrutiny is consistent with 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.
The Commission has stated that Section 17(d),
upon which Rule 17d-1 is based, and upon which Section 57(a)(4) was modeled, was designed to protect investment companies
from self-dealing and overreaching by insiders. The Commission has also taken notice that there may be transactions subject to
these prohibitions that do not present the dangers of overreaching.20
The Court of Appeals for the Second Circuit has enunciated a like rationale for the purpose behind Section 17(d): “The
objective of [Section] 17(d)…is to prevent…injuring the interest of stockholders of registered investment companies
by causing the company to participate on a basis different from or less advantageous than that of such other participants.”21
Furthermore, Congress acknowledged that the protective system established by the enactment of Section 57 is “similar
to that applicable to registered investment companies under Section 17, and rules thereunder, but is modified to address concerns
relating to unique characteristics presented by business development companies.”22
Applicants believe that the Conditions would
ensure that the conflicts of interest that Section 17(d) and Section 57(a)(4) were designed to prevent would be addressed
and the standards for an order under Rule 17d-1 and Section 57(i) would be met.
Co-Investment Transactions are prohibited
by either or both of Rule 17d-1 and Section 57(a)(4) without a prior exemptive order of the Commission to the extent that
the Affiliated Funds and the Regulated Funds participating in such transactions fall within the category of persons described by
Rule 17d-1 and/or Section 57(b), as modified by Rule 57b-1 thereunder, as applicable, vis-à-vis each participating
Regulated Fund.
20
See Protecting Investors: A Half-Century of Investment Company Regulation, 1504 Fed. Sec. L. Rep., Extra Edition (May 29,
1992) at 488 et seq.
21
Securities and Exchange Commission v. Talley Industries, Inc., 399 F.2d 396, 405 (2d Cir. 1968), cert. denied, 393
U.S. 1015 (1969).
22
H.Rep. No. 96-1341, 96th Cong., 2d Sess. 45 (1980) reprinted in 1980 U.S.C.C.A.N. 4827.
Each of the participating Regulated Funds and Affiliated
Funds may be deemed to be affiliated persons vis-à-vis a Regulated Fund within the meaning of Section 2(a)(3) by reason
of common control because (i) OFS Adviser serves as the Adviser to and may be deemed to control each of OFS BDC, Hancock BDC,
and OFS Credit; (ii) CIM IC Advisor may be deemed to control CIM RACR because it will serve as the Adviser to CIM RACR; (iii)
each of OFS Adviser and CIMSA may be deemed to control CIM RACR because they will serve as sub-advisers to CIM RACR; (iii) OFS
Adviser manages and may be deemed to control the Affiliated Funds for which it currently serves as investment adviser; (iv) OFS
CLO Adviser manages and may be deemed to control the Affiliated Funds that it manages; (v) CIM Capital Advisor manages and may
be deemed to control the Affiliated Funds for which it serves as investment adviser; (vi) an Adviser will serve as investment
adviser (and sub-adviser, if any) to, and will be deemed to control, any Cole Fund that relies on the Order; (vii) an Adviser
will serve as investment adviser (and sub-adviser, if any) to, and will be deemed to control, any Future Regulated Fund or Future
Affiliated Fund; and (viii) the Existing Advisers are all under common control, any Future Advisers will be under common control
with the Existing Advisers and CIM IC Advisor is under common control with the Advisers. Thus, each Regulated Fund and each Affiliated
Fund may be deemed to be a person related to a Regulated Fund in a manner described by Section 57(b) and Rule 17d-1, as applicable,
and therefore the prohibitions of Section 57(a)(4) and Rule 17d-1 would apply respectively to prohibit the Regulated Funds and
Affiliated Funds from participating in Co-Investment Transactions with the Regulated Funds.
Further, because the Wholly-Owned Investment
Subs are controlled by the Regulated Funds, the Wholly-Owned Investment Subs are subject to Section 57(a)(4) (or Section 17(d)
in the case of Wholly-Owned Investment Subs controlled by Regulated Funds that are registered under the Act), and thus also subject
to the provisions of Rule 17d-1, and therefore would be prohibited from participating in Co-Investment Transactions
without the Order.
In addition, because the OFS Proprietary
Accounts are controlled by OFSAM, which is the parent company of OFS Adviser and OFS CLO Adviser and, therefore, are under common
control with the Regulated Funds, the OFS Proprietary Accounts could be deemed to be persons related to the Regulated Funds (or
a company controlled by the Regulated Funds) in a manner described by Section 57(b) and also prohibited from participating in the
program of co-investment described in the Application.
The Commission has issued numerous exemptive
orders under the Act permitting registered investment companies and BDCs to co-invest with affiliated persons.23
Applicants submit that the allocation procedures set forth in the Conditions for relief are consistent with the range
of investor protections found in the orders we cite. We note, in particular, that the co-investment protocol to be followed by
the Applicants here is substantially similar to the protocol followed by (i) Apollo Investment Corporation and its affiliates,
for which an order was issued on March 29, 2016 (the “Apollo Order”),24
(ii) Ares Capital Corporation and its affiliates, for which an order was issued on January 18, 2017 (the
“Ares Order”),25
(iii) Oaktree Strategic Income, LLC and its affiliates, for which an order was issued on October 18, 2017 (the “Oaktree
Order”),26 (iv) Barings
Corporate Investors and its affiliates, for which an order was issued on October 19, 2017 (the “Barings Order”),27
(v) TCG BDC, Inc. and its affiliates, for which an order was issued on January 17, 2018 (the “TCG Order”),28
and (vi) Nuveen Churchill BDC LLC and its affiliates, for which an order was issued on June 7, 2019 (the “Churchill
Order”).29
23
See, e.g., Oaktree Strategic Income, LLC, et al., supra note 8; Barings Corporate Investors, et al. (File
No. 812-14689) Release No. IC-32864 (October 19, 2017) (order), Release No. IC-32822 (September 20, 2017) (notice); Golub Capital
BDC, Inc., et al. (File No. 812-13764) Release No. IC-32509 (February 27, 2017) (order), Release No. IC-32461 (January
31, 2017) (notice); Ares Capital Corporation, et al., supra note 10; Goldman Sachs BDC, Inc., et al. (File No. 812-14219)
Release No. IC-32409 (January 4, 2017) (order), Release No. IC-32382 (December 7, 2016) (notice); Apollo Investment Corporation,
et al., supra note 10.
24
Apollo Investment Corporation, et al., supra note 10.
25
Ares Capital Corporation, et al., supra note 10.
26
Oaktree Strategic Income, LLC, et al., supra note 10.
27
Barings Corporate Investors, et al., supra note 23.
28
TCG BDC, Inc., et al., supra note 10.
29
Nuveen Churchill BDC LLC, et al., supra note 10.
While Applicants have sought to conform
substantial portions of this Application and the Conditions herein to recent precedent, most of the recent orders involving joint
transactions, apart from the Churchill Order, Apollo Order, the Ares Order, the Barings Order, the Oaktree Order and the TCG Order,
have involved one or two managers that advise a small number of BDCs or regulated funds, on the one hand, and a small number of
private funds, on the other hand. As discussed above, Applicants have numerous private funds, which have similar, but not identical
investment objectives and policies. Due to the size and complexity of Applicants’ operations, Applicants believe that an
order based on existing precedents, other than the Churchill Order, Apollo Order, the Ares Order, the Barings Order, the Oaktree
Order and the TCG Order, would not provide sufficient flexibility for the Regulated Funds to participate in attractive and appropriate
investment opportunities that would be beneficial to their shareholders. Thus, for example, Applicants propose to limit the Potential
Co-Investment Transactions of which each Adviser would be notified of to those investments that would be consistent with each fund’s
then-current Objectives and Strategies and Board-Established Criteria, thus reducing unnecessary burdens that would otherwise be
imposed on Applicants.
Applicants believe that the relief requested
herein is consistent with the policy underlying the Churchill Order, Apollo Order, Ares Order, Barings Order, Oaktree Order and
TCG Order, as well as co-investment relief granted by the Commission to other BDCs and to registered closed-end funds.
The
Commission also has issued orders extending co-investment relief to proprietary accounts.30
IV.
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STATEMENT IN SUPPORT OF RELIEF REQUESTED
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In accordance with Rule 17d-1 (made applicable
to transactions subject to Section 57(a) by Section 57(i)), the Commission may grant the requested relief as to any particular
joint transaction if it finds that the participation of the Regulated Funds in the joint transaction is consistent with the provisions,
policies and purposes of the Act and is not on a basis different from or less advantageous than that of other participants. Applicants
submit that allowing the Co-Investment Transactions described in this Application is justified on the basis of (i) the potential
benefits to the Regulated Funds and the shareholders thereof and (ii) the protections found in the Conditions.
30
See, e.g., Prospect Capital Corporation, et al.
(File No. 812-14977) Investment Company Act Rel. Nos. 33716 (December 16, 2019) (notice) and 33745 (January 13, 2020) (order);
New Mountain Finance Corporation, et al. (File No. 812-15030) Investment Company Act Rel. Nos. 33624 (September 12, 2019)
(notice) and 33656 (October 8, 2019) (order); John Hancock GA Mortgage Trust, et al. (File No. 812-14917) Investment Company
Act Rel. Nos. 33493 (May 28, 2019) (notice) and 33518 (June 25, 2019) (order), Stellus
Capital Investment Corporation, et al. (File No. 812-14855) Investment Company Act Rel. Nos. 33289 (November 6,
2018) (notice) and 33316 (December 4, 2018) (order); THL Credit, Inc., et al. (File Nos. 812-14807)
Investment Company Act Rel. Nos. 33213 (August 24, 2018) (notice) and 33239 (September 19, 2018) (order); Blackstone
/ GSO Floating Rate Enhanced Income Fund, et al. (File No. 812-14835) Investment Company Act Rel. Nos.
33149 (July 6, 2018) (notice) and 33186 (July 31,2018); Benefit Street Partners BDC, Inc., et al. (File No. 812-14601) Investment
Company Act Rel. Nos. 33068 (April 6, 2018) (notice) and 33090 (May 1, 2018) (order), all of which included relief for proprietary
accounts.
As required by Rule 17d-1(b), the Conditions
ensure that the terms on which Co-Investment Transactions may be made will be consistent with the participation of the Regulated
Funds being on a basis that it is neither different from nor less advantageous than other participants, thus protecting the equity
holders of any participant from being disadvantaged. The Conditions ensure that all Co-Investment Transactions are reasonable and
fair to the Regulated Funds and their shareholders and do not involve overreaching by any person concerned, including the Advisers.
In the absence of the relief sought hereby,
in many circumstances the Regulated Funds would be limited in their ability to participate in attractive and appropriate investment
opportunities. Section 17(d), Section 57(a)(4) and Rule 17d-1 should not prevent BDCs and registered closed-end investment
companies from making investments that are in the best interests of their shareholders.
Each Regulated Fund and its shareholders
will benefit from the ability to participate in Co-Investment Transactions. The Board, including the Required Majority, of each
Regulated Fund will determine that it is in the best interests of the Regulated Fund to participate in Co-Investment Transactions
because, among other matters, (i) the Regulated Fund should be able to participate in a larger number and greater variety
of transactions; (ii) the Regulated Fund should be able to participate in larger transactions; (iii) the Regulated Fund
should be able to participate in all opportunities approved by a Required Majority or otherwise permissible under the Order rather
than risk underperformance through rotational allocation of opportunities among the Regulated Funds; (iv) the Regulated Fund
and any other Regulated Funds participating in the proposed investment should have greater bargaining power, more control over
the investment and less need to bring in other external investors or structure investments to satisfy the different needs of external
investors; (v) the Regulated Fund should be able to obtain greater attention and better deal flow from investment bankers
and others who act as sources of investments; and (vi) the Conditions are fair to the Regulated Funds and their shareholders.
B.
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Protective Representations and Conditions
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The Conditions ensure that the proposed
Co-Investment Transactions are consistent with the protection of each Regulated Fund’s shareholders and with the purposes
intended by the policies and provisions of the Act. Specifically, the Conditions incorporate the following critical protections:
(i) all Regulated Funds participating in the Co-Investment Transactions will invest
at the same time (except that, subject to the limitations in the Conditions, the settlement date for an Affiliated Fund in a Co-Investment
Transaction may occur up to ten business days after the settlement date for the Regulated Fund, and vice versa), for the same price
and with the same terms, conditions, class, registration rights and any other rights, so that none of them receives terms more
favorable than any other; (ii) a Required Majority of each Regulated Fund must approve various investment decisions
(not including transactions completed on a pro rata basis pursuant to Conditions 6(c)(i) and 8(b)(i) or otherwise not requiring
Board approval) with respect to such Regulated Fund in accordance with the Conditions; and (iii) the Regulated Funds are required
to retain and maintain certain records.
Applicants believe that participation by
the Regulated Funds in Pro Rata Follow-On Investments and Pro Rata Dispositions, as provided in Conditions 6(c)(i) and 8(b)(i),
is consistent with the provisions, policies and purposes of the Act and will not be made on a basis different from or less advantageous
than that of other participants. A formulaic approach, such as pro rata investment or disposition eliminates the possibility for
overreaching and unnecessary prior review by the Board. Applicants note that the Commission has adopted a similar pro rata approach
in the context of Rule 23c-2, which relates to the redemption by a closed-end investment company of less than all of a class of
its securities, indicating the general fairness and lack of overreaching that such approach provides.
Applicants also believe that the participation
by the Regulated Funds in Non-Negotiated Follow-On Investments and in Dispositions of Tradable Securities without the approval
of a Required Majority is consistent with the provisions, policies and purposes of the Act as there is no opportunity for overreaching
by affiliates.
If an Adviser, its principals, or any person
controlling, controlled by, or under common control with the Adviser or its principals, and the Affiliated Funds (collectively,
the “Holders”) own in the aggregate more than 25 percent of the outstanding voting shares of a Regulated
Fund (the “Shares”), then the Holders will vote such Shares as required under Condition 15. Applicants
believe that this condition will ensure that the Independent Directors will act independently in evaluating Co-Investment Transactions,
because the ability of the Adviser or its principals to influence the Independent Directors by a suggestion, explicit or implied,
that the Independent Directors can be removed if desired by the Holders will be limited significantly. The Independent Directors
shall evaluate and approve any independent party, taking into account its qualifications, reputation for independence, cost to
the shareholders, and other factors that they deem relevant.
In sum, the Applicants believe that the
Conditions would ensure that each Regulated Fund that participates in any type of Co-Investment Transaction does not participate
on a basis different from, or less advantageous than, that of such other participants for purposes of Section 17(d) or Section 57(a)(4)
and the Rules under the Act. As a result, Applicants believe that the participation of the Regulated Funds in Co-Investment Transactions
in accordance with the Conditions would be consistent with the provisions, policies, and purposes of the Act, and would be done
in a manner that was not different from, or less advantageous than, the other participants.
Applicants agree that any Order granting
the requested relief shall be subject to the following Conditions:
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1.
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Identification and Referral of Potential Co-Investment Transactions
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(a) The Advisers will establish, maintain
and implement policies and procedures reasonably designed to ensure that each Adviser is promptly notified of all Potential Co-Investment
Transactions that fall within the then-current Objectives and Strategies and Board-Established Criteria of any Regulated Fund
such Adviser manages.
(b) When an Adviser to a Regulated
Fund is notified of a Potential Co-Investment Transaction under Condition 1(a), it will make an independent determination of the
appropriateness of the investment for the Regulated Fund in light of the Regulated Fund’s then-current circumstances.
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2.
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Board Approvals of Co-Investment Transactions
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(a) If the Adviser deems a Regulated
Fund’s participation in any Potential Co-Investment Transaction to be appropriate for the Regulated Fund, it will then determine
an appropriate level of investment for the Regulated Fund.
(b) If the aggregate amount recommended
by the Advisers to be invested in the Potential Co-Investment Transaction by the participating Regulated Funds and any participating
Affiliated Funds, collectively, exceeds the amount of the investment opportunity, the investment opportunity will be allocated
among them pro rata based on the size of the Internal Orders, as described in Section III.A.1.b. above. Each Adviser to a participating
Regulated Fund will promptly notify and provide the Eligible Directors with information concerning the Affiliated Funds’
and Regulated Funds’ order sizes to assist the Eligible Directors with their review of the applicable Regulated Fund’s
investments for compliance with these Conditions.
(c) After making the determinations
required in Condition 1(b) above, each Adviser to a participating Regulated Fund will distribute written information concerning
the Potential Co-Investment Transaction (including the amount proposed to be invested by each participating Regulated Fund and
each participating Affiliated Fund) to the Eligible Directors of its participating Regulated Fund(s) for their consideration. A
Regulated Fund will enter into a Co-Investment Transaction with one or more other Regulated Funds or Affiliated Funds only if,
prior to the Regulated Fund’s participation in the Potential Co-Investment Transaction, a Required Majority concludes that:
(i) the terms of the transaction,
including the consideration to be paid, are reasonable and fair to the Regulated Fund and its equity holders and do not involve
overreaching in respect of the Regulated Fund or its equity holders on the part of any person concerned;
(ii) the transaction is consistent
with:
(A) the interests of the Regulated
Fund’s equity holders; and
(B) the Regulated Fund’s
then-current Objectives and Strategies;
(iii) the investment by any
other Regulated Fund(s) or Affiliated Fund(s) would not disadvantage the Regulated Fund, and participation by the Regulated Fund
would not be on a basis different from, or less advantageous than, that of any other Regulated Fund(s) or Affiliated Fund(s) participating
in the transaction; provided that the Required Majority shall not be prohibited from reaching the conclusions required by
this Condition 2(c)(iii) if:
(A) the settlement date for
another Regulated Fund or an Affiliated Fund in a Co-Investment Transaction is later than the settlement date for the Regulated
Fund by no more than ten business days or earlier than the settlement date for the Regulated Fund by no more than ten business
days, in either case, so long as: (x) the date on which the commitment of the Affiliated Funds and Regulated Funds is made
is the same; and (y) the earliest settlement date and the latest settlement date of any Affiliated Fund or Regulated Fund
participating in the transaction will occur within ten business days of each other; or
(B) any other Regulated Fund
or Affiliated Fund, but not the Regulated Fund itself, gains the right to nominate a director for election to a portfolio company’s
board of directors, the right to have a board observer or any similar right to participate in the governance or management of the
portfolio company so long as: (x) the Eligible Directors will have the right to ratify the selection of such director or board
observer, if any; (y) the Adviser agrees to, and does, provide periodic reports to the Regulated Fund’s Board with respect
to the actions of such director or the information received by such board observer or obtained through the exercise of any similar
right to participate in the governance or management of the portfolio company; and (z) any fees or other compensation that
any other Regulated Fund or Affiliated Fund or any affiliated person of any other Regulated Fund or Affiliated Fund receives in
connection with the right of one or more Regulated Funds or Affiliated 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 any participating
Affiliated Funds (who may, in turn, share their portion with their affiliated persons) and any participating Regulated Fund(s)
in accordance with the amount of each such party’s investment; and
(iv) the proposed investment
by the Regulated Fund will not involve compensation, remuneration or a direct or indirect31
financial benefit to the Advisers, any other Regulated Fund, 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 17(e) or 57(k), as applicable, (C) indirectly, as a result of an interest in the 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)(B)(z).
3. Right to Decline. Each Regulated Fund has the
right to decline to participate in any Potential Co-Investment 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,32
a Regulated Fund will not invest in reliance on the Order in any issuer in which a Related Party has an investment.
31
For example, procuring the Regulated Fund’s 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.
32
This exception applies only to Follow-On Investments by a Regulated Fund in issuers in which that Regulated Fund already holds
investments.
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 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 5, if Condition 2(c)(iii)(B) is met.
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6.
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Standard Review Dispositions.
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(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 Affiliated Funds have previously participated in a Co-Investment Transaction with respect to the issuer, then:
(i) the Adviser to such Regulated
Fund or Affiliated Fund33 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 Fund.
(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;34
(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 only term negotiated by or on behalf
of the participating Regulated Funds and Affiliated Funds is price.
33
Any OFS Proprietary Account that is not advised by an Adviser is itself deemed to be an Adviser for purposes of Condition 6(a)(i),
7(a)(i), 8(a)(i) and 9(a)(i),
34
In the case of any Disposition, proportionality will be measured by each participating Regulated Fund’s and Affiliated Fund’s
outstanding investment in the security in question immediately preceding the Disposition.
(d) Standard Board Approval.
In all other cases, the Adviser will provide its written recommendation as to the Regulated Fund’s 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 Fund’s best interests.
|
7.
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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 Co-Investment Transaction with respect
to the issuer:
(i) the Adviser to such Regulated
Fund or Affiliated Fund 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 Fund’s 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 2(c)(i), (ii), (iii)(A), and (iv); and
(ii) the making and holding
of the Pre-Boarding Investments were not prohibited by Section 57 or Rule 17d-1, 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 as those applicable to the Affiliated Funds and any other Regulated Fund;
(ii) Original Investments.
All of the Affiliated Funds’ and Regulated Funds’ investments in the issuer are Pre-Boarding Investments;
(iii) Advice of counsel.
Independent counsel to the Board advises that the making and holding of the investments in the Pre-Boarding Investments were not
prohibited by Section 57 (as modified by Rule 57b-1) or Rule 17d-1, as applicable;
(iv) Multiple Classes
of Securities. All Regulated Funds and Affiliated Funds that hold Pre-Boarding Investments in the issuer immediately before
the time of completion of the Co-Investment Transaction hold the same security or securities of the issuer. For the purpose of
determining whether the Regulated Funds and Affiliated Funds hold the same security or securities, they may disregard any security
held by some but not all of them if, prior to relying on the Order, the Required Majority is presented with all information necessary
to make a finding, and finds, that: (x) any Regulated Fund’s or Affiliated Fund’s holding of a different class
of securities (including for this purpose a security with a different maturity date) is immaterial35
in amount, including immaterial relative to the size of the issuer; and (y) the Board records the basis for any such finding
in its minutes. In addition, securities that differ only in respect of issuance date, currency, or denominations may be treated
as the same security; and
(v) No control. The
Affiliated Funds, the other Regulated Funds and their affiliated persons (within the meaning of Section 2(a)(3)(C) of the
Act), individually or in the aggregate, do not control the issuer of the securities (within the meaning of Section 2(a)(9)
of the Act).
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8.
|
Standard Review Follow-Ons.
|
(a) General. If any Regulated
Fund or Affiliated Fund desires to make a Follow-On Investment in an issuer and the Regulated Funds and Affiliated Funds holding
investments in the issuer previously participated in a Co-Investment Transaction with respect to the issuer:
(i) the Adviser to each such
Regulated Fund or Affiliated Fund will notify each Regulated Fund that holds securities of the portfolio company of the proposed
transaction 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 the proposed participation, including
the amount of the proposed investment, by such Regulated Fund.
(b) No Board Approval Required.
A Regulated Fund may participate in the Follow-On Investment without obtaining prior approval of the Required Majority if:
(i) (A) the proposed participation
of each Regulated Fund and each Affiliated Fund in such investment is proportionate to its outstanding investments in the issuer
or the security at issue, as appropriate,36
immediately preceding the Follow-On Investment; and (B) the Board of the Regulated Fund has approved as being in the best
interests of the Regulated Fund the ability to participate in Follow-On
Investments on a pro rata basis (as described in greater detail in this Application); or
35
In determining whether a holding is “immaterial” for purposes of the Order, the Required Majority will consider whether
the nature and extent of the interest in the transaction or arrangement is sufficiently small that a reasonable person would not
believe that the interest affected the determination of whether to enter into the transaction or arrangement or the terms of the
transaction or arrangement.
36
To the extent that a Follow-On Investment opportunity is in a security or arises in respect of a security held by the participating
Regulated Funds and Affiliated Funds, proportionality will be measured by each participating Regulated Fund’s and Affiliated
Fund’s outstanding investment in the security in question immediately preceding the Follow-On Investment using the most recent
available valuation thereof. To the extent that a Follow-On Investment opportunity relates to an opportunity to invest in a security
that is not in respect of any security held by any of the participating Regulated Funds or Affiliated Funds, proportionality will
be measured by each participating Regulated Fund’s and Affiliated Fund’s outstanding investment in the issuer immediately
preceding the Follow-On Investment using the most recent available valuation thereof.
(ii) it is a Non-Negotiated
Follow-On Investment.
(c) Standard Board Approval.
In all other cases, the Adviser will provide its written recommendation as to the Regulated Fund’s participation to the Eligible
Directors and the Regulated Fund will participate in such Follow-On Investment solely to the extent that a Required Majority makes
the determinations set forth in Condition 2(c). If the only previous Co-Investment Transaction with respect to the issuer was an
Enhanced Review Disposition the Eligible Directors must complete this review of the proposed Follow-On Investment both on a stand-alone
basis and together with the Pre-Boarding Investments in relation to the total economic exposure and other terms of the investment.
(d) Allocation. If, with respect
to any such Follow-On Investment:
(i) the amount of the opportunity
proposed to be made available to any Regulated Fund is not based on the Regulated Funds’ and the Affiliated Funds’
outstanding investments in the issuer or the security at issue, as appropriate, immediately preceding the Follow-On Investment;
and
(ii) the aggregate amount
recommended by the Advisers to be invested in the Follow-On Investment by the participating Regulated Funds and any participating
Affiliated Funds, collectively, exceeds the amount of the investment opportunity, then the Follow-On Investment opportunity will
be allocated among them pro rata based on the size of the Internal Orders, as described in Section III.A.1.b. above.
(e) Other Conditions. 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 this Application.
|
9.
|
Enhanced Review Follow-Ons.
|
(a) General. If any Regulated
Fund or Affiliated Fund desires to make a Follow-On Investment in an issuer that is a Potential Co-Investment Transaction and the
Regulated Funds and Affiliated Funds holding investments in the issuer have not previously participated in a Co-Investment Transaction
with respect to the issuer:
(i) the Adviser to each such
Regulated Fund or Affiliated Fund will notify each Regulated Fund that holds securities of the portfolio company of the proposed
transaction 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 the proposed participation, including
the amount of the proposed investment, by such Regulated Fund; 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 Fund’s participation to the Eligible Directors,
and the Regulated Fund will participate in such Follow-On Investment solely to the extent that a Required Majority reviews the
proposed Follow-On Investment both on a stand-alone basis and together with the Pre-Boarding Investments in relation to the total
economic exposure and other terms and makes the determinations set forth in Condition 2(c). In addition, the Follow-On Investment
may only be completed in reliance on the Order if the Required Majority of each participating Regulated Fund determines that the
making and holding of the Pre-Boarding Investments were not prohibited by Section 57 (as modified by Rule 57b-1) or Rule
17d-1, as applicable. The basis for the Board’s findings will be recorded in its minutes.
(c) Additional Requirements.
The Follow-On Investment may only be completed in reliance on the Order if:
(i) Original Investments.
All of the Affiliated Funds’ and Regulated Funds’ investments in the issuer are Pre-Boarding Investments;
(ii) Advice of counsel.
Independent counsel to the Board advises that the making and holding of the investments in the Pre-Boarding Investments were not
prohibited by Section 57 (as modified by Rule 57b-1) or Rule 17d-1, as applicable;
(iii) Multiple Classes
of Securities. All Regulated Funds and Affiliated Funds that hold Pre-Boarding Investments in the issuer immediately before
the time of completion of the Co-Investment Transaction hold the same security or securities of the issuer. For the purpose of
determining whether the Regulated Funds and Affiliated Funds hold the same security or securities, they may disregard any security
held by some but not all of them if, prior to relying on the Order, the Required Majority is presented with all information necessary
to make a finding, and finds, that: (x) any Regulated Fund’s or Affiliated Fund’s holding of a different class
of securities (including for this purpose a security with a different maturity date) is immaterial in amount, including immaterial
relative to the size of the issuer; and (y) the Board records the basis for any such finding in its minutes. In addition,
securities that differ only in respect of issuance date, currency, or denominations may be treated as the same security; and
(iv) No control. The
Affiliated Funds, the other Regulated Funds and their affiliated persons (within the meaning of Section 2(a)(3)(C) of the
Act), individually or in the aggregate, do not control the issuer of the securities (within the meaning of Section 2(a)(9)
of the Act).
(d) Allocation. If, with respect
to any such Follow-On Investment:
(i) the amount of the opportunity
proposed to be made available to any Regulated Fund is not based on the Regulated Funds’ and the Affiliated Funds’
outstanding investments in the issuer or the security at issue, as appropriate, immediately preceding the Follow-On Investment;
and
(ii) the aggregate amount
recommended by the Advisers to be invested in the Follow-On Investment by the participating Regulated Funds and any participating
Affiliated Funds, collectively, exceeds the amount of the investment opportunity, then the Follow-On Investment opportunity will
be allocated among them pro rata based on the size of the Internal Orders, as described in Section III.A.1.b. above.
(e) Other Conditions. 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 this Application.
|
10.
|
Board Reporting, Compliance and Annual Re-Approval.
|
(a) Each Adviser to a Regulated Fund
will present to the Board of each Regulated Fund, on a quarterly basis, and at such other times as the Board may request, (i) a
record of all investments in Potential Co-Investment Transactions made by any of the other Regulated Funds or any of the Affiliated
Funds during the preceding quarter that fell within the Regulated Fund’s then-current Objectives and Strategies and Board-Established
Criteria that were not made available to the Regulated Fund, and an explanation of why such investment opportunities were not made
available to the Regulated Fund; (ii) a record of all Follow-On Investments in and Dispositions of investments in any issuer
in which the Regulated Fund holds any investments by any Affiliated Fund or other Regulated Fund during the prior quarter; and
(iii) all information concerning Potential Co-Investment Transactions and Co-Investment Transactions, including investments
made by other Regulated Funds or Affiliated Funds that the Regulated Fund considered but declined to participate in, so that the
Independent Directors, may determine whether all Potential Co-Investment Transactions and Co-Investment Transactions during the
preceding quarter, including those investments that the Regulated Fund considered but declined to participate in, comply with the
Conditions.
(b) All information presented to the
Regulated Fund’s Board pursuant to this Condition will be kept for the life of the Regulated Fund and at least two years
thereafter, and will be subject to examination by the Commission and its staff.
(c) Each Regulated
Fund’s chief compliance officer, as defined in rule 38a-1(a)(4), will prepare an annual report for its Board each
year that evaluates (and documents the basis of that evaluation) the Regulated Fund’s compliance with the terms and Conditions
of the Application and the procedures established to achieve such compliance.
(d) The Independent
Directors will consider at least annually whether continued participation in new and existing Co-Investment Transactions is in
the Regulated Fund’s best interests.
11. Record Keeping. Each Regulated Fund will maintain
the records required by Section 57(f)(3) of the Act as if each of the Regulated Funds were a BDC and each of the investments
permitted under these Conditions were approved by the Required Majority under Section 57(f).
12. Director Independence. No Independent Director
of a Regulated Fund will also be a director, general partner, managing member or principal, or otherwise be an “affiliated
person” (as defined in the Act) of any Affiliated Fund.
13. Expenses. 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 Securities Act) will, to the extent not payable by the Advisers under their respective advisory
agreements with the Regulated Funds and the Affiliated Funds, be shared by the Regulated Funds and the participating Affiliated
Funds in proportion to the relative amounts of the securities held or being acquired or disposed of, as the case may be.
14. Transaction Fees.37
Any transaction fee (including break-up, structuring, monitoring or commitment fees but excluding brokerage or underwriting compensation
permitted by Section 17(e) or 57(k)) received in connection with any Co-Investment Transaction will be distributed to the
participants 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 transaction, the fee will be deposited into an account
maintained by the Adviser at a bank or banks having the qualifications prescribed in Section 26(a)(1), and the account will
earn a competitive rate of interest that will also be divided pro rata among the participants. None of the Advisers, the Affiliated
Funds, the other Regulated Funds or any affiliated person of the Affiliated Funds or the Regulated Funds will receive any 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 Regulated Funds and the Affiliated Funds, the pro rata transaction fees described above and fees or other compensation
described in Condition 2(c)(iii)(B)(z), (ii) brokerage or underwriting compensation permitted by Section 17(e) or 57(k)
or (iii) in the case of the Advisers, investment advisory compensation paid in accordance with investment advisory agreements
between the applicable Regulated Fund(s) or Affiliated Fund(s) and its Adviser.
15. Independence. If the Holders own in the aggregate
more than 25 percent of the Shares of a Regulated Fund, then the Holders will vote such Shares as directed by an independent
third party when voting on (1) the election of directors; (2) the removal of one or more directors; or (3) any other
matter under either the Act or applicable State law affecting the Board’s composition, size or manner of election.
Please address all communications concerning
this Application and the Notice and Order to:
Jeffrey A. Cerny
Tod K. Reichert
OFS Capital Management, LLC
10 S. Wacker Drive, Suite 2500
Chicago, Illinois 60606
(847) 734-2000
37
Applicants are not requesting and the Commission is not providing any relief for transaction fees received in connection with any
Co-Investment Transaction.
Nathan D. DeBacker
CIM Group, LLC
2398 East Camelback Road, 4th
Floor
Phoenix, Arizona 85016
Tel: (602) 778-8700
Mukya Porter
CIM Group, LLC
4700 Wilshire Boulevard
Los Angeles, California 90010
Tel: (323) 860-7421
Please address any questions, and a copy
of any communications, concerning this Application, the Notice and Order to:
Steven B. Boehm, Esq.
Cynthia M. Krus, Esq.
Anne G. Oberndorf,
Esq.
Eversheds Sutherland
(US) LLP
700 Sixth Street, NW,
Suite 700
Washington, DC 20001-3980
Tel: (202) 383-0100
Fax: (202) 637-3593
Lauren Burnham Prevost,
Esq.
Seth K. Weiner, Esq.
Morris, Manning &
Martin, LLP
1600 Atlanta Financial
Center
3343 Peachtree Road,
N.E.
Atlanta, Georgia 30326-1044
Tel: (404) 233-7000
Applicants desire that the Commission issue
the requested order pursuant to Rule 0-5 under the Act without conducting a hearing.
Pursuant to Rule 0-2, each person
executing the Application on behalf of an Applicant says that he or she has duly executed the Application for and on behalf of
such Applicant; that he or she is authorized to execute the Application pursuant to the terms of an operating agreement, management
agreement or otherwise; and that all actions by members, directors or other bodies necessary to authorize each deponent to execute
and file the Application have been taken.
The verifications required by Rule 0-2(d) and
the authorizations required by Rule 0-2(c) are attached hereto as Exhibit A and Exhibits B,
C, D and E.
Applicants request that any questions regarding
this Application be directed to the persons listed on the facing page of this Application.
All requirements for the execution and filing
of this Application, including the filing of any amendments thereto, in the name and on behalf of each Applicant by the undersigned
have been complied with and the undersigned is fully authorized to do so and has duly executed this Application as of this
3rd day of April, 2020.
OFS CAPITAL CORPORATION
|
|
By: /s/ Bilal Rashid
|
Name: Bilal Rashid
|
Title: Chief Executive Officer
|
|
OFS SBIC I, LP
|
|
By: OFS SBIC I GP, LLC
Its: General Partner
|
|
By: /s/ Bilal Rashid
|
Name: Bilal Rashid
|
Title: Manager
|
|
HANCOCK PARK CORPORATE INCOME, INC.
|
|
By: /s/ Bilal Rashid
|
Name: Bilal Rashid
|
Title: Chief Executive Officer
|
|
OFS CREDIT COMPANY, INC.
|
|
By: /s/ Bilal Rashid
|
Name: Bilal Rashid
|
Title: Chief Executive Officer
|
|
OFS CAPITAL MANAGEMENT, LLC
|
|
By: /s/ Bilal Rashid
|
Name: Bilal Rashid
|
Title: President
|
|
OFS CLO MANAGEMENT, LLC
|
|
By: /s/ Bilal Rashid
|
Name: Bilal Rashid
|
Title: President
|
|
OFSI FUND V, LTD.
|
|
By: OFS CAPITAL MANAGEMENT, LLC
|
Its: Collateral Manager
|
|
By: /s/ Bilal Rashid
|
Name: Bilal Rashid
|
Title: President
|
|
OFSI FUND VI, LTD.
|
|
By: OFS CAPITAL MANAGEMENT, LLC
|
Its: Collateral Manager
|
|
By: /s/ Bilal Rashid
|
Name: Bilal Rashid
|
Title: President
|
|
OFSI FUND VII, LTD.
|
|
By: OFS CAPITAL MANAGEMENT, LLC
|
Its: Collateral Manager
|
|
By: /s/ Bilal Rashid
|
Name: Bilal Rashid
|
Title: President
|
OFSI BSL VIII, LTD.
By: OFS CLO MANAGEMENT, LLC
Its: Collateral Manager
By: /s/ Bilal Rashid
Name: Bilal Rashid
Title: President
OFSI BSL IX, LTD.
By: OFS CLO MANAGEMENT, LLC
Its: Collateral Manager
By: /s/ Bilal Rashid
Name: Bilal Rashid
Title: President
LFTW-OFS, INC.,
By: /s/ Tod K. Reichert
Name: Tod K. Reichert
Title: Vice President
MAC-OFS HOLDINGS, LLC
By: /s/ Tod K. Reichert
Name: Tod K. Reichert
Title: Managing Director
CONVENE HOLDINGS LLC
By: /s/ Tod K. Reichert
Name: Tod K. Reichert
Title: Managing Director
DRS-OFSCC, INC.
By: /s/ Tod K. Reichert
Name: Tod K. Reichert
Title: Vice President
PB -OFSC, INC.
By: /s/ Tod K. Reichert
Name: Tod K. Reichert
Title: Vice President
|
OFSCC-CR, LLC
By: /s/ Tod K. Reichert
Name: Tod K. Reichert
Title: Managing Director
OFSCC-FS HOLDINGS, LLC.
By: /s/ Tod K. Reichert
Name: Tod K. Reichert
Title: Managing Director
OFSCC-FS, LLC
By: /s/ Tod K. Reichert
Name: Tod K. Reichert
Title: Managing Director
OFSCC-MB, INC.
By: /s/ Tod K. Reichert
Name: Tod K. Reichert
Title: Vice President
OFSCC-TTG, LLC
By: /s/ Tod K. Reichert
Name: Tod K. Reichert
Title: Managing Director
OFSCC-TS, LLC
By: /s/ Tod K. Reichert
Name: Tod K. Reichert
Title: Managing Director
LFTW-HPCI, INC.
By: /s/ Tod K. Reichert
Name: Tod K. Reichert
Title: Vice President
DRS-HPCI, INC.
By: /s/ Tod K. Reichert
Name: Tod K. Reichert
Title: Vice President
|
HPCI-CR, LLC
By: /s/ Tod K. Reichert
Name: Tod K. Reichert
Title: Managing Director
HPCI-MB, INC.
By: /s/ Tod K. Reichert
Name: Tod K. Reichert
Title: Vice President
HPCI-TTG, LLC
By: /s/ Tod K. Reichert
Name: Tod K. Reichert
Title: Managing Director
OFS FUNDING I, LLC
|
By: /s/ Bilal Rashid
Name: Bilal Rashid
Title: President
ORCHARD FIRST SOURCE ASSET
MANAGEMENT, LLC
By: /s/ Bilal Rashid
Name: Bilal Rashid
Title: President
|
CIM INCOME NAV, INC.
|
|
By: /s/ Nathan D. DeBacker
|
Name: Nathan D. DeBacker
|
Title: Chief Financial Officer and Treasurer
|
|
CIM REAL ESTATE FINANCE TRUST, INC.
|
|
By: /s/ Nathan D. DeBacker
|
Name: Nathan D. DeBacker
|
Title: Chief Financial Officer and Treasurer
|
COLE CREDIT PROPERTY TRUST V, INC.
|
|
By: /s/ Nathan D. DeBacker
|
Name: Nathan D. DeBacker
|
Title: Chief Financial Officer and Treasurer
|
COLE OFFICE & INDUSTRIAL REIT (CCIT II), INC.
|
|
By: /s/ Nathan D. DeBacker
|
Name: Nathan D. DeBacker
|
Title: Chief Financial Officer and Treasurer
|
COLE OFFICE & INDUSTRIAL REIT (CCIT III), INC.
|
|
By: /s/ Nathan D. DeBacker
|
Name: Nathan D. DeBacker
|
Title: Chief Financial Officer and Treasurer
|
CIM INCOME NAV MANAGEMENT, LLC
|
|
By: /s/ Jordan Dembo
|
Name: Jordan Dembo
|
Title: Vice President
|
CIM REAL ESTATE FINANCE MANAGEMENT, LLC
|
|
By: /s/ Jordan Dembo
|
Name: Jordan Dembo
|
Title: Vice President
|
COLE REIT MANAGEMENT V, LLC
|
|
By: /s/ Jordan Dembo
|
Name: Jordan Dembo
|
Title: Vice President
|
COLE CORPORATE INCOME MANAGEMENT II, LLC
|
|
By: /s/ Jordan Dembo
|
Name: Jordan Dembo
|
Title: Vice President
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|
COLE CORPORATE INCOME MANAGEMENT III, LLC
|
|
By: /s/ Jordan Dembo
|
Name: Jordan Dembo
|
Title: Vice President
|
CIM URBAN REAL ESTATE FUND, L.P.
|
|
By: /s/ Nicholas V. Morosoff
|
Name: Nicholas V. Morosoff
|
Title: Vice President of General Partner
|
|
CIM URBAN REIT, LLC
|
|
By: /s/ Nicholas V. Morosoff
|
Name: Nicholas V. Morosoff
|
Title: Vice President
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|
CIM FUND III, L.P.
|
|
By: /s/ Nicholas V. Morosoff
|
Name: Nicholas V. Morosoff
|
Title: Vice President of General Partner
|
|
CIM INFRASTRUCTURE FUND, L.P.
|
|
By: /s/ Nicholas V. Morosoff
|
Name: Nicholas V. Morosoff
|
Title: Vice President of General Partner
|
|
CIM VI (URBAN REIT), LLC
|
|
By: /s/ Nicholas V. Morosoff
|
Name: Nicholas V. Morosoff
|
Title: Vice President
|
|
CIM FUND VIII, L.P.
|
|
By: /s/ Nicholas V. Morosoff
|
Name: Nicholas V. Morosoff
|
Title: Vice President of General Partner
|
|
CIM INFRASTRUCTURE FUND II, L.P.
|
|
By: /s/ Nicholas V. Morosoff
|
Name: Nicholas V. Morosoff
|
Title: Vice President of General Partner
|
CIM URBAN INCOME INVESTMENTS, L.P.
|
|
By: /s/ Nicholas V. Morosoff
|
Name: Nicholas V. Morosoff
|
Title: Vice President of General Partner
CMMT PARTNERS, L.P.
|
By: /s/ Nicholas V. Morosoff
Name: Nicholas V. Morosoff
Title: Vice President of General Partner
CIM FUND IX, L.P.
By: /s/ Nicholas V. Morosoff
Name: Nicholas V. Morosoff
Title: Vice President of General Partner
CIM REAL ASSETS & CREDIT FUND
By: /s/ David Thompson
Name: David Thompson
Title: Chief Executive Officer
CIM CAPITAL, LLC
By: /s/ Mukya Porter
Name: Mukya Porter
Title: Vice President
CIM CAPITAL IC MANAGEMENT, LLC
By: /s/ David Thompson
Name: David Thompson
Title: Vice President
CIM CAPITAL SA MANAGEMENT, LLC
By: /s/ Barry Berlin
Name: Barry Berlin
Title: Vice President and Chief Financial
Officer
|
Exhibit A
Verification of Statement of Facts and Application
Pursuant to Rule 17d-1 Under the
Investment Company Act of 1940
for an Order of the Commission
The undersigned states that he has duly
executed the attached Application for an order under Sections 17(d) and 57(i) of the Investment Company Act of 1940 and
Rule 17d-1 under the Investment Company Act of 1940, dated April 3, 2020 for and on behalf of the Applicants, as the case
may be, that he holds the office with such entity as indicated below and that all actions by the stockholders, directors, and other
bodies necessary to authorize the undersigned to execute and file such Application have been taken. The undersigned further says
that he is familiar with the instrument and the contents thereof, and that the facts set forth therein are true to the best of
his knowledge, information, and belief.
OFS CAPITAL CORPORATION
|
|
By: /s/ Bilal Rashid
|
Name: Bilal Rashid
|
Title: Chief Executive Officer
|
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OFS SBIC I, LP
|
|
By: OFS SBIC I GP, LLC
Its: General Partner
|
|
By: /s/ Bilal Rashid
|
Name: Bilal Rashid
|
Title: Manager
|
|
HANCOCK PARK CORPORATE INCOME, INC.
|
|
By: /s/ Bilal Rashid
|
Name: Bilal Rashid
|
Title: Chief Executive Officer
|
|
OFS CREDIT COMPANY, INC.
|
|
By: /s/ Bilal Rashid
|
Name: Bilal Rashid
|
Title: Chief Executive Officer
|
|
OFS CAPITAL MANAGEMENT, LLC
|
|
By: /s/ Bilal Rashid
|
Name: Bilal Rashid
|
Title: President
|
|
OFS CLO MANAGEMENT, LLC
|
|
By: /s/ Bilal Rashid
|
Name: Bilal Rashid
|
Title: President
|
|
OFSI FUND V, LTD.
|
|
By: OFS CAPITAL MANAGEMENT, LLC
|
Its: Collateral Manager
|
|
By: /s/ Bilal Rashid
|
Name: Bilal Rashid
|
Title: President
|
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OFSI FUND VI, LTD.
|
|
By: OFS CAPITAL MANAGEMENT, LLC
|
Its: Collateral Manager
|
|
By: /s/ Bilal Rashid
|
Name: Bilal Rashid
|
Title: President
|
|
OFSI FUND VII, LTD.
|
|
By: OFS CAPITAL MANAGEMENT, LLC
|
Its: Collateral Manager
|
|
By: /s/ Bilal Rashid
|
Name: Bilal Rashid
|
Title: President
|
OFSI BSL VIII, LTD.
By: OFS CLO MANAGEMENT, LLC
Its: Collateral Manager
By: /s/ Bilal Rashid
Name: Bilal Rashid
Title: President
OFSI BSL IX, LTD.
By: OFS CLO MANAGEMENT, LLC
Its: Collateral Manager
By: /s/ Bilal Rashid
Name: Bilal Rashid
Title: President
LFTW-OFS, INC.,
By: /s/ Tod K. Reichert
Name: Tod K. Reichert
Title: Vice President
MAC-OFS HOLDINGS, LLC
By: /s/ Tod K. Reichert
Name: Tod K. Reichert
Title: Managing Director
CONVENE HOLDINGS LLC
By: /s/ Tod K. Reichert
Name: Tod K. Reichert
Title: Managing Director
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DRS-OFSCC, INC.
By: /s/ Tod K. Reichert
Name: Tod K. Reichert
Title: Vice President
PB -OFSC, INC.
By: /s/ Tod K. Reichert
Name: Tod K. Reichert
Title: Vice President
OFSCC-CR, LLC
By: /s/ Tod K. Reichert
Name: Tod K. Reichert
Title: Managing Director
OFSCC-FS HOLDINGS, LLC.
By: /s/ Tod K. Reichert
Name: Tod K. Reichert
Title: Managing Director
OFSCC-FS, LLC
By: /s/ Tod K. Reichert
Name: Tod K. Reichert
Title: Managing Director
OFSCC-MB, INC.
By: /s/ Tod K. Reichert
Name: Tod K. Reichert
Title: Vice President
OFSCC-TTG, LLC
By: /s/ Tod K. Reichert
Name: Tod K. Reichert
Title: Managing Director
|
OFSCC-TS, LLC
By: /s/ Tod K. Reichert
Name: Tod K. Reichert
Title: Managing Director
LFTW-HPCI, INC.
By: /s/ Tod K. Reichert
Name: Tod K. Reichert
Title: Vice President
DRS-HPCI, INC.
By: /s/ Tod K. Reichert
Name: Tod K. Reichert
Title: Vice President
HPCI-CR, LLC
By: /s/ Tod K. Reichert
Name: Tod K. Reichert
Title: Managing Director
HPCI-MB, INC.
By: /s/ Tod K. Reichert
Name: Tod K. Reichert
Title: Vice President
HPCI-TTG, LLC
By: /s/ Tod K. Reichert
Name: Tod K. Reichert
Title: Managing Director
OFS FUNDING I, LLC
By: /s/ Bilal Rashid
Name: Bilal Rashid
Title: President
|
ORCHARD FIRST SOURCE ASSET
MANAGEMENT, LLC
By: /s/ Bilal Rashid
Name: Bilal Rashid
Title: President
|
CIM INCOME NAV, INC.
|
|
By: /s/ Nathan D. DeBacker
|
Name: Nathan D. DeBacker
|
Title: Chief Financial Officer and Treasurer
|
CIM REAL ESTATE FINANCE TRUST, INC.
|
|
By: /s/ Nathan D. DeBacker
|
Name: Nathan D. DeBacker
|
Title: Chief Financial Officer and Treasurer
|
COLE CREDIT PROPERTY TRUST V, INC.
|
|
By: /s/ Nathan D. DeBacker
|
Name: Nathan D. DeBacker
|
Title: Chief Financial Officer and Treasurer
|
COLE OFFICE & INDUSTRIAL REIT (CCIT II), INC.
|
|
By: /s/ Nathan D. DeBacker
|
Name: Nathan D. DeBacker
|
Title: Chief Financial Officer and Treasurer
|
COLE OFFICE & INDUSTRIAL REIT (CCIT III), INC.
|
|
By: /s/ Nathan D. DeBacker
|
Name: Nathan D. DeBacker
|
Title: Chief Financial Officer and Treasurer
|
|
CIM INCOME NAV MANAGEMENT, LLC
|
|
By: /s/ Jordan Dembo
|
Name: Jordan Dembo
|
Title: Vice President
|
CIM REAL ESTATE FINANCE MANAGEMENT, LLC
|
|
By: /s/ Jordan Dembo
|
Name: Jordan Dembo
|
Title: Vice President
|
COLE REIT MANAGEMENT V, LLC
|
|
By: /s/ Jordan Dembo
|
Name: Jordan Dembo
|
Title: Vice President
|
COLE CORPORATE INCOME MANAGEMENT II, LLC
|
|
By: /s/ Jordan Dembo
|
Name: Jordan Dembo
|
Title: Vice President
|
COLE CORPORATE INCOME MANAGEMENT III, LLC
|
|
By: /s/ Jordan Dembo
|
Name: Jordan Dembo
|
Title: Vice President
|
CIM URBAN REAL ESTATE FUND, L.P.
|
|
By: /s/ Nicholas V. Morosoff
|
Name: Nicholas V. Morosoff
|
Title: Vice President of General Partner
|
|
CIM URBAN REIT, LLC
|
|
By: /s/ Nicholas V. Morosoff
|
Name: Nicholas V. Morosoff
|
Title: Vice President
|
CIM FUND III, L.P.
|
|
By: /s/ Nicholas V. Morosoff
|
Name: Nicholas V. Morosoff
|
Title: Vice President of General Partner
|
|
CIM INFRASTRUCTURE FUND, L.P.
|
|
By: /s/ Nicholas V. Morosoff
|
Name: Nicholas V. Morosoff
|
Title: Vice President of General Partner
|
|
CIM VI (URBAN REIT), LLC
|
|
By: /s/ Nicholas V. Morosoff
|
Name: Nicholas V. Morosoff
|
Title: Vice President
|
|
CIM FUND VIII, L.P.
|
|
By: /s/ Nicholas V. Morosoff
|
Name: Nicholas V. Morosoff
|
Title: Vice President of General Partner
|
|
CIM INFRASTRUCTURE FUND II, L.P.
|
|
By: /s/ Nicholas V. Morosoff
|
Name: Nicholas V. Morosoff
|
Title: Vice President of General Partner
|
|
CIM URBAN INCOME INVESTMENTS, L.P.
|
|
By: /s/ Nicholas V. Morosoff
|
Name: Nicholas V. Morosoff
|
Title: Vice President of General Partner
|
CMMT PARTNERS, L.P.
|
By: /s/ _ Nicholas V. Morosoff
Name: Nicholas V. Morosoff
Title: Vice President of General Partner
CIM FUND IX, L.P.
By: /s/ Nicholas V. Morosoff
Name: Nicholas V. Morosoff
Title: Vice President of General Partner
CIM REAL ASSETS & CREDIT FUND
By: /s/ David Thompson
Name: David Thompson
Title: Chief Executive Officer
CIM CAPITAL, LLC
By: /s/ Mukya Porter
Name: Mukya Porter
Title: Vice President
|
CIM CAPITAL IC MANAGEMENT, LLC
By: /s/ David Thompson
Name: David Thompson
Title: Vice President
CIM CAPITAL SA MANAGEMENT, LLC
By: /s/ Barry Berlin
Name: Barry Berlin
Title: Vice President and Chief Financial Officer
|
EXHIBIT B
Resolutions of the Board of Directors
of
OFS Capital Corporation
WHEREAS,
the Board believes it is in the best interests of the Company to file an amended, expanded application with the SEC for an order
pursuant to Sections 17(d) and 57(i) of the 1940 Act and Rule 17d-l promulgated under the 1940 Act (the “Amended Application”),
to authorize the entering into of certain joint transactions and co-investments by the Company with certain entities which may
be deemed to be “affiliates” of the Company pursuant to the provisions of the 1940 Act, which such joint transactions
and co-investments would otherwise be prohibited by Sections 17(d) and 57(a)(4) of the 1940 Act; and
WHEREAS,
management has discussed with the Board the proposed terms of the Amended Application.
NOW, THEREFORE,
BE IT RESOLVED, that the Authorized Officers be, and they hereby are, authorized, empowered and directed, in the name and on
behalf of the Company, to cause to be prepared, executed, delivered and filed with the SEC the Amended Application, and to do such
other acts or things and execute such other documents, including amendments to the Amended Application, as they deem necessary
or desirable to cause the Amended Application to conform to comments received from the Staff of the SEC and otherwise to comply
with the 1940 Act and the rules and regulations promulgated thereunder, in such form and accompanied by such exhibits and other
documents, as the Authorized Officers preparing the same shall approve, such approval to be conclusively evidenced by the filing
of the Amended Application; and it is further
RESOLVED,
that the Authorized Officers be, and each of them hereby is, authorized, empowered and directed, in the name and on behalf of Company,
to perform all of the agreements and obligations of the Company in connection with the foregoing resolutions, to take or cause
to be taken any and all further actions, to execute and deliver, or cause to be executed and delivered, all other documents, instruments,
agreements, undertakings, and certificates of any kind and nature whatsoever, to incur and pay all fees and expenses and to engage
such persons as the Authorized Officers may determine to be necessary, advisable or appropriate to effectuate or carry out the
purposes and intent of the foregoing resolutions, and the execution by the Authorized Officers of any such documents, instruments,
agreements, undertakings and certificates, the payment of any fees and expenses or the engagement of such persons or the taking
by them of any action in connection with the foregoing matters shall conclusively establish the Authorized Officers’ authority
therefore and the authorization, acceptance, adoption, ratification, approval and confirmation by the Company thereof.
(Approved at a meeting of the Board of Directors
on February 27, 2018)
EXHIBIT C
Resolutions of the Board of Directors
of
Hancock Park Corporate Income, Inc.
WHEREAS,
the Board believes it is in the best interests of the Company to file an amended, expanded application with the SEC for an order
pursuant to Sections 17(d) and 57(i) of the 1940 Act and Rule 17d-l promulgated under the 1940 Act (the “Amended Application”),
to authorize certain joint transactions and co-investments by the Company with certain entities that may be deemed to be “affiliates”
of the Company pursuant to the provisions of the 1940 Act, which such joint transactions and co-investments would otherwise be
prohibited by Sections 17(d) and 57(a)(4) of the 1940 Act; and
WHEREAS,
management has discussed with the Board the proposed terms of the Amended Application.
NOW, THEREFORE,
BE IT RESOLVED, that the Authorized Officers be, and they hereby are, authorized, empowered and directed, in the name and on
behalf of the Company, to cause to be prepared, executed, delivered and filed with the SEC the Amended Application, and to do such
other acts or things and execute such other documents, including amendments to the Amended Application, as they deem necessary
or desirable to cause the Amended Application to conform to comments received from the Staff of the SEC and otherwise to comply
with the 1940 Act and the rules and regulations promulgated thereunder, in such form and accompanied by such exhibits and other
documents, as the Authorized Officers preparing the same shall approve, such approval to be conclusively evidenced by the filing
of the Amended Application; and it is further
RESOLVED,
that the Authorized Officers be, and each of them hereby is, authorized, empowered and directed, in the name and on behalf of Company,
to perform all of the agreements and obligations of the Company in connection with the foregoing resolutions, to take or cause
to be taken any and all further actions, to execute and deliver, or cause to be executed and delivered, all other documents, instruments,
agreements, undertakings, and certificates of any kind and nature whatsoever, to incur and pay all fees and expenses and to engage
such persons as the Authorized Officers may determine to be necessary, advisable or appropriate to effectuate or carry out the
purposes and intent of the foregoing resolutions, and the execution by the Authorized Officers of any such documents, instruments,
agreements, undertakings and certificates, the payment of any fees and expenses or the engagement of such persons or the taking
by them of any action in connection with the foregoing matters shall conclusively establish the Authorized Officers’ authority
therefore and the authorization, acceptance, adoption, ratification, approval and confirmation by the Company thereof.
(Approved at a meeting of the Board of Directors
on February 27, 2018)
EXHIBIT D
Resolutions of the Board of Directors
of
OFS Credit Company, Inc.
WHEREAS,
the Board believes it is in the best interests of the Company to file an application with the SEC for an order pursuant to Sections
17(d) and 57(i) of the 1940 Act and Rule 17d-l promulgated under the 1940 Act (the “Amended Application”), to authorize
certain joint transactions and co-investments by the Company with certain entities that may be deemed to be “affiliates”
of the Company pursuant to the provisions of the 1940 Act, which such joint transactions and co-investments would otherwise be
prohibited by Sections 17(d) and 57(a)(4) of the 1940 Act; and
WHEREAS,
management has discussed with the Board the proposed terms of the Amended Application.
NOW, THEREFORE,
BE IT RESOLVED, that the Authorized Officers be, and they hereby are, authorized, empowered and directed, in the name and on
behalf of the Company, to cause to be prepared, executed, delivered and filed with the SEC the Amended Application, and to do such
other acts or things and execute such other documents, including amendments to the Amended Application, as they deem necessary
or desirable to cause the Amended Application to conform to comments received from the Staff of the SEC and otherwise to comply
with the 1940 Act and the rules and regulations promulgated thereunder, in such form and accompanied by such exhibits and other
documents, as the Authorized Officers preparing the same shall approve, such approval to be conclusively evidenced by the filing
of the Amended Application; and it is further
RESOLVED,
that the Authorized Officers be, and each of them hereby is, authorized, empowered and directed, in the name and on behalf of Company,
to perform all of the agreements and obligations of the Company in connection with the foregoing resolutions, to take or cause
to be taken any and all further actions, to execute and deliver, or cause to be executed and delivered, all other documents, instruments,
agreements, undertakings, and certificates of any kind and nature whatsoever, to incur and pay all fees and expenses and to engage
such persons as the Authorized Officers may determine to be necessary, advisable or appropriate to effectuate or carry out the
purposes and intent of the foregoing resolutions, and the execution by the Authorized Officers of any such documents, instruments,
agreements, undertakings and certificates, the payment of any fees and expenses or the engagement of such persons or the taking
by them of any action in connection with the foregoing matters shall conclusively establish the Authorized Officers’ authority
therefore and the authorization, acceptance, adoption, ratification, approval and confirmation by the Company thereof.
(Approved by unanimous written consent on
April 19, 2018)
EXHIBIT E
Resolutions of the Sole Trustee of
CIM Real Assets & Credit Fund.
WHEREAS,
the Sole Trustee believes it is in the best interests of the Company to file an application with the SEC for an order pursuant
to Sections 17(d) and 57(i) of the 1940 Act and Rule 17d-l promulgated under the 1940 Act (the “Amended Application”),
to authorize certain joint transactions and co-investments by the Company with certain entities that may be deemed to be “affiliates”
of the Company pursuant to the provisions of the 1940 Act, which such joint transactions and co-investments would otherwise be
prohibited by Sections 17(d) and 57(a)(4) of the 1940 Act; and
WHEREAS,
management has discussed with the Sole Trustee the proposed terms of the Amended Application.
NOW, THEREFORE,
BE IT RESOLVED, that the Authorized Officers be, and they hereby are, authorized, empowered and directed, in the name and on
behalf of the Company, to cause to be prepared, executed, delivered and filed with the SEC the Amended Application, and to do such
other acts or things and execute such other documents, including amendments to the Amended Application, as they deem necessary
or desirable to cause the Amended Application to conform to comments received from the Staff of the SEC and otherwise to comply
with the 1940 Act and the rules and regulations promulgated thereunder, in such form and accompanied by such exhibits and other
documents, as the Authorized Officers preparing the same shall approve, such approval to be conclusively evidenced by the filing
of the Amended Application; and it is further
RESOLVED,
that the Authorized Officers be, and each of them hereby is, authorized, empowered and directed, in the name and on behalf of Company,
to perform all of the agreements and obligations of the Company in connection with the foregoing resolutions, to take or cause
to be taken any and all further actions, to execute and deliver, or cause to be executed and delivered, all other documents, instruments,
agreements, undertakings, and certificates of any kind and nature whatsoever, to incur and pay all fees and expenses and to engage
such persons as the Authorized Officers may determine to be necessary, advisable or appropriate to effectuate or carry out the
purposes and intent of the foregoing resolutions, and the execution by the Authorized Officers of any such documents, instruments,
agreements, undertakings and certificates, the payment of any fees and expenses or the engagement of such persons or the taking
by them of any action in connection with the foregoing matters shall conclusively establish the Authorized Officers’ authority
therefore and the authorization, acceptance, adoption, ratification, approval and confirmation by the Company thereof.
(Approved by written consent on August 28,
2019)
APPENDIX
A
The Existing OFS Funds and investment advisers
A. Investment adviser is OFS Capital Management, LLC
1. OFSI Fund V, LTD.
2. OFSI Fund VI, LTD.
3. OFSI Fund VII, LTD.
B. Investment adviser is OFS CLO Management, LLC
1. OFSI BSL VIII, LTD.
2. OFSI BSL IX, LTD.
Appendix
B
The Existing CIM Funds:
CIM Urban Real Estate Fund, L.P.
CIM Urban REIT, LLC
CIM Fund III, L.P.
CIM Infrastructure Fund, L.P.
CIM VI (Urban REIT), LLC
CIM Fund VIII, L.P.
CIM Infrastructure Fund II, L.P.
CIM Urban Income Investments, L.P.
CMMT Partners, L.P.
CIM Fund IX, L.P.
Appendix
C
The Existing Cole Advisers:
CIM Income NAV Management, LLC
CIM Real Estate Finance Management, LLC
Cole REIT Management V, LLC
Cole Corporate Income Management II, LLC
Cole Corporate Income Management III, LLC
The Existing Cole Funds:
CIM Income NAV, Inc.
CIM Real Estate Finance Trust, Inc.
Cole Credit Property Trust V, Inc.
Cole Office & Industrial REIT (CCIT II), Inc.
Cole Office & Industrial REIT (CCIT III), Inc.
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