PUBLIC LAW 96-477—OCT. 21, 1980
94 STAT. 2287
upon application, on the basis that the terms of the proposal are fair and reasonable and do not involve overreaching of such company or its shareholders or partners; "(ii) such securities are not transferable except for disposition by gift, will, or intestacy; "(iii) no investment adviser of such business development company receives any compensation described in paragraph (1) of section 205 of title II of this Act, except 15 USC 80b-5. to the extent permitted by clause (A) or (B) of that section; and "(iv) such business development company does not have a profit-sharing plan described in section 57(n). Notwithstanding this paragraph, the amount of voting securities that would result from the exercise of all outstanding warrants, options, and rights at the time of issuance shall not exceed 25 per centum of the outstanding voting securities of the business development company, except that if the amount of voting securities that would result from the exercise of all outstanding warrants, options, and rights issued to such company's directors, officers, employees, and general partners pursuant to any executive compensation plan meeting the requirements of subparagraph (B) of this paragraph would exceed 15 per centum of the outstanding voting securities of such company, then the total amount of voting securities that would result from the exercise of all outstanding warrants, options, and rights at the time of issuance shall not exceed 20 per centum of the outstanding voting securities of such company. "(4) For purposes of measuring the asset coverage requirements of section 18(a), a senior security created by the guarantee 15 USC 80a-l8. by a business development company of indebtedness issued by another company shall be the amount of the maximum potential liability less the fair market value of the net unencumbered assets (plus the indebtedness which has been guaranteed) available in the borrowing company whose debts have been guaranteed, except that a guarantee issued by a business development company of indebtedness issued by a company which is a whollyowned subsidiary of the business development company and is licensed as a small business investment company under the Small Business Investment Act of 1958 shall not be deemed to be 15 USC 661 note. a senior security of such business development company for purposes of section 18(a) if the amount of the indebtedness at the time of its issuance by the borrowing company is itself taken fully into account as a liability by such business development company, as if it were issued by such business development company, in determining whether such business development company, at that time, satisfies the asset coverage requirements of section 18(a). "(b) A business development company shall comply with the provisions of this section at the time it becomes subject to sections 55 through 65, as if it were issuing a security of each class which it has outstanding at such time. "LOANS
"SEC. 62. Notwithstanding the exemption set forth in section 6(f), 15 USC 80a-6i. section 21 shall apply to a business development company to the same dSf? o^ ^ol^' ^^ U b e oUa—21.
79-194 O—81—pt. 2
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