
[Federal Register: December 15, 2008 (Volume 73, Number 241)]
[Notices]               
[Page 76070-76075]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15de08-103]                         

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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 28528; 813-332]

 
TWB Investment Partnership, L.P., et al.; Notice of Application

Date: December 9, 2008.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of application for an order under sections 6(b) and 6(e) 
of the Investment Company Act of 1940 (the ``Act'') exempting 
applicants from all provisions of the Act, except section 9 and 
sections 36 through 53, and the rules and regulations under the Act. 
With respect to sections 17 and 30 of the Act, and the rules and 
regulations thereunder, and rule 38a-1 under the Act, the exemption is 
limited as set forth in the application.

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Summary of Application: Applicants request an order to exempt certain 
investment vehicles formed for the benefit of partners and key eligible 
current and former employees of Perkins Coie LLP (``Perkins'') and 
certain of its affiliates from certain provisions of the Act. Each such 
entity will be an ``employees' securities company'' within the meaning 
of section 2(a)(13) of the Act.

Applicants: TWB Investment Partnership, L.P. and TWB Investment 
Partnership II, L.P. (collectively, the ``Investment Funds''), and 
Perkins.

Filing Dates: The application was filed on April 3, 2001, and amended 
on February 6, 2004 and November 26, 2008.

Hearing or Notification of Hearing: An order granting the application 
will be issued unless the Commission orders a hearing. Interested 
persons may request a hearing by writing to the Commission's Secretary 
and serving applicants with a copy of the request, personally or by 
mail. Hearing requests should be received by the Commission by 5:30 
p.m. on January 5, 2009 and should be accompanied by proof of service 
on applicants, in the form of an affidavit or, for lawyers, a 
certificate of service. Hearing requests should state the nature of the 
writer's interest, the reason for the request, and the issues 
contested. Persons who wish to be notified of a hearing may request

[[Page 76071]]

notification by writing to the Commission's Secretary.

ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F 
Street, NE., Washington, DC 20549-1090. Applicants, c/o Martin E. 
Lybecker, Esq., Wilmer Cutler Pickering Hale and Dorr LLP, 1875 
Pennsylvania Avenue, NW., Washington, DC 20006.

FOR FURTHER INFORMATION CONTACT: Courtney S. Thornton, Senior Counsel, 
at 202-551-6812, or Mary Kay Frech, Branch Chief, at 202-551-6821 
(Division of Investment Management, Office of Investment Company 
Regulation).

SUPPLEMENTARY INFORMATION: The following is a summary of the 
application. The complete application may be obtained for a fee at the 
Commission's Public Reference Branch, 100 F Street, NE., Washington, DC 
20549-1520 (tel. 202-551-5850).
    Applicants' Representations:
    1. Perkins is a law firm organized as a Washington limited 
liability partnership that is owned exclusively by individuals or 
professional service corporations engaged in the practice of law. These 
individuals and the shareholders of the professional service 
corporations are referred to as ``Partners''.
    2. The Investment Funds are Delaware limited partnerships. 
Subsequent pooled investment vehicles identical in all material 
respects to the Investment Funds (other than investment objectives and 
strategies) that may be offered in the future to the same classes of 
investors as those investing in the Investment Funds (the ``Subsequent 
Funds'') (collectively with the Investment Funds, the ``Funds''), if 
any, will also be structured as limited partnerships, although a 
Subsequent Fund could be structured as a domestic partnership, limited 
liability company, corporation, trust, or other entity. The Investment 
Funds have been, and each Subsequent Fund will be, established to 
enable the Eligible Investors (as defined below) to participate in 
certain investment opportunities that come to the attention of Perkins. 
Perkins expects to form new pools several times a year, with each pool 
represented by a separate series of interests in the Funds (``Series'') 
offered at a specific time or over a specified period of time (the 
``Investment Period''). Each Series will be an ``employees' securities 
company'' within the meaning of section 2(a)(13) of the Act. 
Participation as investors in a Fund will allow Eligible Investors to 
diversify their investments and to have the opportunity to participate 
in investments that might not otherwise be available to them or that 
might be beyond their individual means.
    3. The Funds will operate as non-diversified, closed-end management 
investment companies. Perkins or a wholly-owned subsidiary of Perkins 
will serve as the general partner (``General Partner'') of each Fund. 
The General Partner will appoint one or more investment committees for 
each Fund (each, an ``Investment Committee''). Each member of the 
Investment Committees will be a current or former Partner and may be, 
but is not required to be, an investor in the Fund (a ``Fund 
Investor''). The General Partner and the Investment Committees will be 
registered as investment advisers if required under the Investment 
Advisers Act of 1940.
    4. Interests in the Series (``Interests'') will be offered without 
registration in reliance on section 4(2) of the Securities Act of 1933 
(the ``Securities Act'') or Regulation D thereunder. Interests will be 
offered only to Eligible Investors who at the time of the offer consist 
of ``Eligible Employees,'' ``Qualified Investment Vehicles,'' 
``Immediate Family Members'' (each as defined below), and Perkins. 
Prior to offering a subscription agreement to an individual, the 
General Partner must reasonably believe that the individual is a 
sophisticated investor capable of understanding and evaluating the 
risks of participating in the Fund without the benefit of regulatory 
safeguards.
    5. An ``Eligible Employee'' is a person who is, at the time of 
investment, a current or former Partner or an employee of Perkins who 
(a) meets the standards of an ``accredited investor'' set forth in Rule 
501(a)(5) or Rule 501(a)(6) of Regulation D under the Securities Act 
(``Category 1 investor''), or (b) is one of 35 or fewer Partners or 
employees of Perkins who meets the following salary and other 
requirements (``Category 2 investor'').\1\ Each Category 2 investor 
will be a Partner or employee of Perkins who meets the sophistication 
requirements set forth in Rule 506(b)(2)(ii) of Regulation D under the 
Securities Act and who (a) has a graduate degree, has a minimum of 3 
years of business and/or professional experience, has had compensation 
of at least $150,000 in the preceding 12 month period, and has a 
reasonable expectation of compensation of at least $150,000 in each of 
the two immediately succeeding 12 month periods, or (b) is a 
``knowledgeable employee,'' as defined in rule 3c-5 under the Act, of 
the Fund (with the Fund treated as though it were a ``Covered Company'' 
for purposes of the rule). In addition, a Category 2 investor 
qualifying under (a) above will not be permitted to invest in any 
calendar or fiscal year (as determined by Perkins) more than 10% of his 
or her income from all sources for the immediately preceding calendar 
or fiscal year in one or more Funds.\2\ If a Category 1 investor ceases 
to be accredited, the investor will retain the investments made while 
the investor was accredited, but will not be able to participate in 
current investments unless the investor meets the requirements for a 
Category 2 investor and the General Partner, in its discretion, allows 
the investor to participate as a Category 2 investor.
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    \1\ Any former Partner of Perkins will maintain a sufficiently 
close nexus with Perkins so as to preserve the community of interest 
between such Eligible Employee and Perkins.
    \2\ Participation in the Funds is mandatory for all Partners who 
are required to contribute capital to Perkins (as determined by 
Perkins based on the amount of each individual's income) (``Capital 
Partners'') and who are accredited investors, but only with respect 
to small investments (usually less than $500 total per investment) 
in stock generally referred to as ``founder's stock'' and with 
respect to 20% of the first $50,000 invested in each other 
investment the Investment Committees decide a Fund should make. 
Participation in the Funds is voluntary for Eligible Investors who 
are not Capital Partners.
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    6. A ``Qualified Investment Vehicle'' is a trust or other entity 
the sole beneficiaries of which are Eligible Employees or their 
``Immediate Family Members'' (defined as any parent, child, spouse of a 
child, spouse, brother or sister and includes any step or adoptive 
relationship) or the settlors and trustees of which consist of Eligible 
Employees or Eligible Employees together with Immediate Family Members. 
A Qualified Investment Vehicle must be either (a) an accredited 
investor as defined in Rule 501(a) of Regulation D or (b) an entity for 
which an Eligible Employee is a settler and principal investment 
decision-maker and which is counted toward the 35 non-accredited Fund 
Investors in a Fund. An Immediate Family Member who purchases Interests 
must be an accredited investor as defined in Rule 501(a)(5) or Rule 
501(a)(6) of Regulation D.
    7. Each Eligible Investor participating in a Fund will receive a 
private offering memorandum and the Fund's partnership agreement and 
any other organizational documents (``Offering Documents'') prior to 
his or her investment in the Fund. Each Fund will send its Fund 
Investors annual reports containing audited financial statements with 
respect to those Series in which the Fund Investor has Interests, as 
soon as practicable after the end of each fiscal

[[Page 76072]]

year, unless the value of the assets of the particular Series at the 
end of the fiscal year is $3 million or less, in which case the 
financial statements may be unaudited. In addition, as soon as 
practicable after the end of each tax year, each Fund will transmit a 
report to each Fund Investor setting out information with respect to 
that Fund Investor's distributive share of income, gains, losses, 
credits, and other items for federal and state income tax purposes.
    8. Fund Investors will be permitted to transfer their Interests 
only upon their bankruptcy or death. If a Fund Investor becomes 
bankrupt, the receiver or trustee will have the right to settle or 
manage the bankrupt estate. The death of a Fund Investor will be deemed 
a withdrawal of the deceased Fund Investor unless the deceased Fund 
Investor's estate is permitted to continue as a Fund Investor by mutual 
agreement of the General Partner and the personal representative of the 
deceased Fund Investor. If the estate does not continue as a Fund 
Investor, it will be treated as a withdrawn Fund Investor.
    9. Generally, a withdrawn Fund Investor will retain his or her 
Interests in investments made by the Fund before the Fund Investor's 
withdrawal until the investments are liquidated or written-off, except 
that unvested investments are treated differently, as described below. 
The Interests will not include any repurchase rights, and the Funds 
will not repurchase Interests from Fund Investors unless the shares are 
unvested or the parties otherwise agree. A Capital Partner who ceases 
to be a Partner will be required to withdraw from the Fund as to the 
mandatory portion of future Interests, unless the General Partner and 
Capital Partner otherwise agree, and will not be eligible to 
participate in the mandatory portion of any investments the Fund makes 
after the date of the Capital Partner's withdrawal.\3\ With the General 
Partner's consent, only a retired Partner may continue to participate 
in discretionary investments. Other Fund Investors will not be 
permitted to continue to participate in discretionary investments after 
withdrawal from the Fund. If a Partner leaves employment with Perkins 
other than due to retirement, he or she will be unable to participate 
in discretionary investments, the Fund will release the Partner from 
any capital commitment that the Fund had not yet spent, and the Fund 
will return any capital inadvertently collected from the Partner in 
excess of the cost of the Fund's investments.
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    \3\ See supra note 2.
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    10. Perkins reserves the right to impose vesting provisions on a 
Fund Investor's investments in a Fund. If a Fund Investor leaves 
employment with or retires or resigns from Perkins during the 
Investment Period, unvested investments will be allocated to other Fund 
Investors, and to the extent that the Fund Investor has paid for the 
investment, the Fund Investor will be repaid his or her actual cost, 
unless the investment has already been written off. If a Fund Investor 
retires from Perkins during the Investment Period but continues as 
senior counsel to Perkins, investments that are subject to a vesting 
schedule may continue to vest during the Investment Period.
    11. The Funds may reimburse Perkins for reasonable out-of-pocket 
expenses specifically attributable to the organization and operation of 
the Funds or any Series of the Funds. There will be no allocation of 
any of Perkins' operating expenses to the Funds. No separate management 
fee will be charged to a Fund by the General Partner, and no 
compensation will be paid by a Fund or by Fund Investors to the General 
Partner for its services.
    12. The Funds may borrow from Perkins, a Partner, or a bank or 
other financial institution, provided that a Fund will not borrow from 
any person if the borrowing would cause any person not named in section 
2(a)(13) of the Act to own outstanding securities of the Fund (other 
than short-term paper). Any borrowings by a Fund will be non-recourse 
to Fund Investors. If Perkins or a Partner makes a loan to the Funds, 
the interest rate on the loan will be no less favorable to the Funds 
than the rate that could be obtained on an arm's length basis.
    13. No Fund will acquire any security issued by a registered 
investment company if immediately after the acquisition the Fund would 
own more than 3% of the outstanding voting stock of the registered 
investment company.
    Applicants' Legal Analysis:
    1. Section 6(b) of the Act provides, in part, that the Commission 
will exempt employees' securities companies from the provisions of the 
Act to the extent that the exemption is consistent with the protection 
of investors. Section 6(b) provides that the Commission will consider, 
in determining the provisions of the Act from which the company should 
be exempt, the company's form of organization and capital structure, 
the persons owning and controlling its securities, the price of the 
company's securities and the amount of any sales load, how the 
company's funds are invested, and the relationship between the company 
and the issuers of the securities in which it invests. Section 2(a)(13) 
defines an employees' securities company as any investment company all 
of whose securities (other than short-term paper) are beneficially 
owned (a) by current or former employees, or persons on retainer, of 
one or more affiliated employers, (b) by immediate family members of 
such persons, or (c) by such employer or employers, together with any 
of the persons in (a) or (b).
    2. Section 7 of the Act generally prohibits investment companies 
that are not registered under section 8 of the Act from selling or 
redeeming their securities. Section 6(e) provides that, in connection 
with any order exempting an investment company from any provision of 
section 7, certain provisions of the Act, as specified by the 
Commission, will be applicable to the company and other persons dealing 
with the company as though the company were registered under the Act. 
Applicants request an order under sections 6(b) and 6(e) of the Act 
exempting the Funds from all provisions of the Act, except section 9 
and sections 36 through 53, and the rules and regulations under the 
Act. With respect to sections 17 and 30 of the Act, and the rules and 
regulations thereunder, and rule 38a-1 under the Act, the exemption is 
limited as set forth in the application.
    3. Section 17(a) of the Act generally prohibits any affiliated 
person of a registered investment company, or any affiliated person of 
an affiliated person, acting as principal, from knowingly selling or 
purchasing any security or other property to or from the company. 
Applicants request an exemption from section 17(a) and the rules and 
regulations thereunder to permit a Fund to: (a) Purchase or otherwise 
acquire, from Perkins or an affiliated person thereof, securities or 
interests in properties previously acquired for the account of Perkins, 
another Fund, or an affiliated person thereof, (b) sell or otherwise 
transfer, to Perkins or an affiliated person thereof, securities or 
interests in properties previously acquired by the Funds, (c) invest in 
companies, partnerships or other investment vehicles offered, 
sponsored, or managed by Perkins or an affiliated person thereof, (d) 
invest in securities of issuers for which Perkins or an affiliated 
person thereof has performed services and from which they may have 
received fees, (e) purchase or otherwise acquire interests in a company 
or other investment vehicle (i) in which Perkins or its Partners or 
employees own 5% or more of the voting securities, or (ii) that 
otherwise is an affiliated person of the Fund (or an affiliated person 
of such affiliated person) or an affiliated person of Perkins, and (f) 
participate as a

[[Page 76073]]

selling security-holder in a public offering in which Perkins or any 
affiliated person thereof acts as or represents a member of the selling 
group.
    4. Applicants state that the exemptions sought from section 17(a) 
are consistent with the purposes of the Act and the protection of 
investors. Fund Investors will be informed in the Offering Documents 
and the Fund's communications relating to a particular investment 
opportunity of the extent of the Fund's dealings with Perkins or any 
affiliated person thereof, and Eligible Investors, as financially 
sophisticated professionals and investors, will be able to evaluate the 
risks associated with those dealings. Applicants assert that the 
community of interest among Fund Investors and Perkins will serve to 
reduce the risk of abuse in transactions involving a Fund and Perkins 
or an affiliated person of Perkins.
    5. Section 17(d) of the Act and rule 17d-1 under the Act prohibit 
any affiliated person of a registered investment company, or any 
affiliated person of an affiliated person, acting as principal, from 
participating in any joint arrangement with the investment company 
unless authorized by the Commission. Applicants request relief to 
permit affiliated persons of a Fund, or affiliated persons of an 
affiliated person, to participate in joint transactions with the Fund. 
Joint transactions in which a Fund could participate include the 
following: (a) An investment by one or more Funds in a security: (i) In 
which Perkins, an affiliated person thereof (including Partners of 
Perkins), or another Fund, who agree to be bound by the terms of the 
conditions for the application, is a participant or plans to become a 
participant, or (ii) with respect to which Perkins or any affiliated 
person thereof is entitled to receive fees of any kind, including, but 
not limited to legal fees, placement fees, investment banking fees or 
brokerage commissions, or other economic benefits or interests; (b) an 
investment by one or more Funds in an investment vehicle sponsored, 
offered, or managed by Perkins or any affiliated person thereof; and 
(c) an investment by one or more Funds in a security in which an 
affiliated person of the Fund or Perkins, or an affiliated person of 
such a person, is a participant or plans to become a participant, 
including situations in which that person has a partnership or other 
interest in, or compensation arrangement with, the issuer, sponsor, or 
offeror of the security.
    6. Applicants state that compliance with section 17(d) would cause 
the Funds to forego investment opportunities simply because a Fund 
Investor, Perkins, or other affiliated persons of the Fund also had 
made or contemplated making a similar investment. In addition, because 
attractive investment opportunities of the types considered by the 
Funds often require that each participant make available funds in an 
amount that may be substantially greater than that available to the 
investor alone, there may be certain attractive opportunities of which 
a Fund may be unable to take advantage except as a co-participant with 
other persons, including affiliates. Applicants note that, in light of 
Perkins' purpose of establishing the Funds so as to reward Eligible 
Investors and to attract highly qualified personnel to Perkins, the 
possibility is minimal that an affiliated person will enter into a 
transaction with a Fund with the intent of disadvantaging the Fund. 
Applicants assert that the flexibility to structure co-investments and 
joint investments in the manner described above will not involve abuses 
of the type section 17(d) and rule 17d-1 were designed to prevent.
    7. Section 17(f) of the Act requires investment companies to place 
their securities in the custody of certain custodians. Rule 17f-2 under 
the Act requires investment companies that maintain custody of their 
own securities to deposit the securities with a bank or other entity 
supervised by federal or state authorities. Applicants request an 
exemption from section 17(f) and rule 17f-2 to permit the following 
exceptions from the requirements of rule 17f-2: (a) Compliance with 
paragraph (b) of the rule may be achieved through safekeeping in the 
locked files of Perkins or of a Partner; (b) for purposes of paragraph 
(d) of the rule, (i) employees of Perkins will be deemed employees of 
the Funds, (ii) officers and the General Partner of a Fund will be 
deemed to be officers of the Fund, and (iii) the General Partner of a 
Fund will be deemed to be the board of directors of the Fund; and (c) 
instead of the verification procedure under paragraph (f) of the rule, 
verification will be effected quarterly by two employees of Perkins. 
Applicants assert that the securities held by the Funds are most 
suitably kept in Perkins' files, where they can be referred to as 
necessary.
    8. Section 17(g) of the Act requires that certain officers or 
employees of an investment company who have access to the company's 
securities or funds be bonded by a fidelity insurance company against 
larceny and embezzlement in the amounts prescribed in rule 17g-1. Rule 
17g-1 requires that a majority of directors who are not interested 
persons (``disinterested directors'') take certain actions and give 
certain approvals relating to fidelity bonding. Paragraph (g) of rule 
17g-1 sets forth certain materials relating to the fidelity bond that 
must be filed with the Commission and certain notices relating to the 
fidelity bond that must be given to each member of the investment 
company's board of directors. Paragraph (h) of rule 17g-1 provides that 
an investment company must designate one of its officers to make the 
filings and give the notices required by paragraph (g). Paragraph (j) 
of rule 17g-1 exempts a joint insured bond provided and maintained by 
an investment company and one or more other parties from section 17(d) 
of the Act and the rules under the Act. Rule 17g-1(j)(3) requires that 
the board of directors of an investment company satisfy the fund 
governance standards defined in rule 0-1(a)(7).
    9. Applicants request an exemption from section 17(g) and rule 17g-
1 to the extent necessary to permit the General Partner of each Fund to 
take the action and make the approvals set forth in the rule, 
regardless of whether it is deemed to be an interested person of the 
Funds. Because the General Partner would be considered an interested 
person of the Funds, the Funds would not be able to comply with rule 
17g-1 without the requested relief. Applicants also request an 
exemption from the requirements of paragraphs (g) and (h) of rule 17g-1 
relating to the filing of copies of fidelity bonds and related 
information with the Commission and the provision of notices to the 
board of directors. Applicants believe that the filing requirements are 
burdensome and unnecessary as applied to the Funds and that the notices 
otherwise required to be given to the board of directors would be 
unnecessary, as the Funds will not have boards of directors. Applicants 
also request an exemption from the requirements of paragraph (j)(3) of 
rule 17g-1 that the Funds comply with the fund governance standards 
defined in rule 0-1(a)(7). Each Fund will comply with all other 
requirements of rule 17g-1.
    10. Section 17(j) of the Act and rule 17j-1 thereunder make it 
unlawful for certain enumerated persons to engage in fraudulent or 
deceptive practices in connection with the purchase or sale of a 
security held or to be acquired by a registered investment company. 
Rule 17j-1 also requires every registered investment company to adopt a 
written code of ethics and every access person of a registered 
investment company to report personal securities transactions.

[[Page 76074]]

Applicants request an exemption from the requirements of rule 17j-1, 
with the exception of the anti-fraud provisions of paragraph (b), 
because they would be time-consuming and expensive and would serve 
little purpose in light of the community of interests among the Fund 
Investors by virtue of their common association with Perkins. 
Applicants assert that the requested exemption is consistent with the 
purposes of the Act because the dangers against which section 17(j) and 
rule 17j-1 are intended to guard are not present in the case of the 
Funds.
    11. Applicants request exemption from the requirements contained in 
sections 30(a), 30(b), 30(e), and the rules and regulations thereunder, 
that registered investment companies file with the Commission and mail 
to their shareholders certain periodic reports and financial 
statements. Applicants state that the forms prescribed by the 
Commission for periodic reports have little relevance to the Funds and 
would entail administrative and legal costs that outweigh any benefit 
to the Fund Investors. Exemptive relief is requested to the extent 
necessary to permit each Fund to report annually to its Fund Investors 
in the manner prescribed for each Fund by its limited partnership 
agreement. Applicants also request an exemption from section 30(h) to 
the extent necessary to exempt the General Partner and any other 
persons who may be deemed to be members of an advisory board of a Fund 
from filing Forms 3, 4, and 5 under section 16 of the Securities 
Exchange Act of 1934 (``Exchange Act'') with respect to their ownership 
of Interests in the Funds. Applicants assert that, because there is no 
trading market for Interests and transfers of Interests are severely 
restricted, these filings are unnecessary for the protection of 
investors and would be burdensome to those who would be required to 
file them.
    12. Rule 38a-1 requires investment companies to adopt, implement, 
and periodically review written policies and procedures reasonably 
designed to prevent violation of the federal securities laws and to 
appoint a chief compliance officer. Each Fund will comply with rule 
38a-1(a), (c), and (d), except that (a) since the Fund does not have a 
board of directors, the management committee of the General Partner 
will fulfill the responsibilities assigned to the Fund's board of 
directors under the rule, and (b) since the management committee of the 
General Partner does not have any disinterested members, approval by a 
majority of the disinterested board members required by rule 38a-1 will 
not be obtained.
    Applicants' Conditions:
    Applicants agree that any order granting the requested relief will 
be subject to the following conditions:
    1. Each proposed transaction to which a Fund is a party otherwise 
prohibited by section 17(a) or section 17(d) and rule 17d-1 (each a 
``Section 17 Transaction'') will be effected only if the General 
Partner determines that: (a) The terms of the Section 17 Transaction, 
including the consideration to be paid or received, are fair and 
reasonable to Fund Investors of the participating Fund and do not 
involve overreaching of the Fund or its Fund Investors on the part of 
any person concerned; and (b) the Section 17 Transaction is consistent 
with the interests of the Fund Investors of the participating Fund, the 
Fund's organizational documents, and the Fund's reports to its Fund 
Investors.
    In addition, the General Partner will record and preserve a 
description of such Section 17 Transaction, its findings, the 
information or materials upon which its findings are based, and the 
basis therefore. All such records will be maintained for the life of a 
Fund and at least six years thereafter, and will be subject to 
examination by the Commission and its staff. All such records will be 
maintained in an easily accessible place for at least the first two 
years.
    2. If purchases or sales are made by a Fund from or to an entity 
affiliated with the Fund by reason of a Partner or employee of Perkins 
(a) serving as an officer, director, general partner or investment 
adviser of the entity, or (b) having a 5% or more investment in the 
entity, such individual will not participate in the Fund's 
determination of whether or not to effect the purchase or sale.
    3. The General Partner will adopt, and periodically review and 
update, procedures designed to ensure that reasonable inquiry is made, 
prior to the consummation of any Section 17 Transaction, with respect 
to the possible involvement in the transaction of any affiliated person 
or promoter of or principal underwriter for the Funds, or any 
affiliated person of such a person, promoter, or principal underwriter.
    4. The General Partner will not make on behalf of a Fund any 
investment in which a Co-Investor, as defined below, has or proposes to 
acquire the same class of securities of the same issuer, where the 
investment involves a joint enterprise or other joint arrangement 
within the meaning of rule 17d-1 in which the Fund and the Co-Investor 
are participants, unless any such Co-Investor, prior to disposing of 
all or part of its investment: (a) gives the participating Fund holding 
each investment sufficient, but not less than one day's, notice of its 
intent to dispose of its investment; and (b) refrains from disposing of 
its investment unless the participating Fund holding such investment 
has the opportunity to dispose of its investment prior to or 
concurrently with, on the same terms as, and on a pro rata basis with 
the Co-Investor. The term ``Co-Investor'' means any person who is: (a) 
an affiliated person of the Fund (as defined in section 2(a)(3) of the 
Act); (b) Perkins and any Perkins entities; (c) a Partner or employee 
of Perkins or any affiliate of Perkins, as defined in rule 12b-2 under 
the Exchange Act (a ``Perkins entity''); (d) an investment vehicle 
offered, sponsored, or managed by Perkins or a Perkins entity; or (e) a 
company in which a Perkins entity acts as an officer, director, or 
general partner, or has a similar capacity to control the sale or 
disposition of the company's securities.
    The restrictions contained in this condition, however, shall not be 
deemed to limit or prevent the disposition of an investment by a Co-
Investor: (a) To its direct or indirect wholly-owned subsidiary, to any 
company (a ``parent'') of which the Co-Investor is a direct or indirect 
wholly-owned subsidiary, or to a direct or indirect wholly-owned 
subsidiary of its parent; (b) to Immediate Family Members of the Co-
Investor or a trust established for any such Immediate Family Member; 
(c) when the investment is comprised of securities that are listed on a 
national securities exchange registered under section 6 of the Exchange 
Act; or (d) when the investment is comprised of securities that are NMS 
securities pursuant to section 11A(a)(2) of the Exchange Act and rule 
600(a) of Regulation NMS thereunder.
    5. Each Fund will send to each person who was a Fund Investor in 
such Fund at any time during the fiscal year then ended financial 
statements audited by independent public accountants with respect to 
those Series in which the Fund Investor held Interests, unless the 
value of the assets of the particular Series at the end of the fiscal 
year is $3 million or less, in which case the financial statements as 
to such Series may be unaudited. At the end of each fiscal year, the 
General Partner will make a valuation or have a valuation made of all 
the assets of the Fund as of the fiscal year end in a manner consistent 
with customary practice with respect to the valuation of assets of the 
kind held by the Fund. In addition, as soon as practicable after the 
end of each fiscal year of each Fund, the General

[[Page 76075]]

Partner will send a report to each person who was a Fund Investor at 
any time during the fiscal year then ended, setting forth such tax 
information as shall be necessary for the preparation by the Fund 
Investor of his federal and state income tax returns and a report of 
the investment activities of the Fund during such year.
    6. Each Fund will maintain and preserve, for the life of each such 
Fund and at least six years thereafter, such accounts, books, and other 
documents as constitute the record forming the basis for the financial 
statements and annual reports of such Fund to be provided to its Fund 
Investors, and agree that all such records will be subject to 
examination by the Commission and its staff. All such records will be 
maintained in an easily accessible place for at least the first two 
years.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-29560 Filed 12-12-08; 8:45 am]

BILLING CODE 8011-01-P
