Page:United States Statutes at Large Volume 81.djvu/304

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Bank (ownership of stock. 72 Stat. 692; 75 Stat. 752.

Purchase of debentures. 78 Stat. 146. 15 USC 683.

Term; interest rate.

Restrictions.

PUBLIC LAW 90-104-OCT. 11, 1967

[81 STAT.

(c) The description of section 302 in the table of contents of such Act is amended to read as follows: "Sec. 302. Capital requirements." SEC. 204. Section 302(b) of the Small Business Investment Act of 1958 is amended by striking "except that in no event shall any such bank hold shares in small business investment companies in an amount aggregating more than 2 percent of its capital and surplus." and inserting "except that in no event may any such bank acquire shares in any small business investment company if, upon the making of that acquisition, "(1) the aggregate amount of shares in small business investment companies then held by the bank would exceed 5 percent of its capital and surplus, or "(2) the bank would hold 50 percent or more of any class of equity securities issued by that investment company and having actual or potential voting rights." SEC. 205. Section 303(b) of the Small Business Investment Act of 1958 is amended to read as follows: "(b) To encourage the formation and growth of small business investment companies the Administration is authorized (but only to the extent that the necessary funds are not available to the company involved from private sources on reasonable terms) to purchase, either directly or in cooperation with banks or other lending institutions through agreements to participate on; an immediate basis, the debentures of any such company. Debentures purchased by the Administration under this subsection shall be subordinate to any other debenture bonds, promissory notes, or other debts and obligations of such companies, unless the Administration in its exercise of reasonable investment prudence and in considering the financial soundness of such company determines otherwise. Such debentures may be issued for a term of not to exceed fifteen years and shall bear interest at a rate not less than a rate determined by the Secretary of the Treasury taking into consideration the current average market yield on outstanding marketable obligations of the United States with remaining periods to maturity comparable to the average maturities on such debentures, adjusted to the nearest one-eighth of 1 per centum, plus such additional charge, if any, toward covering other costs of the program as the Administration may determine to be consistent with its purposes. The debentures shall also contain such other terms as the Administration may fix, and shall be subject to the following restrictions and limitations: " (1) The total amount of debentures purchased and outstanding at any one time from a company which does not qualify under the terms of paragraph (2) of this subsection, shall not exceed 200 percent of the combined paid-in capital and paid-in surplus of such company. I n no event shall the debentures of any such company purchased and outstanding under this paragraph exceed $7,500,000. "(2) The total amount of debentures which may be purchased and outstanding at any one time from a company which (A) has a combined paid-in capital and paid-in surplus of $1,000,000 or more and (B) has investments or legally binding commitments of 65 percent or more of its total funds available for investment in small business concerns invested or committed in venture capital, shall not exceed $2,000,000 plus 300 percent of that portion of the company's paid-in capital and paid-in surplus which exceeds $1,000,000. I n no event shall the debentures of any such company purchased and outstanding under this paragraph exceed $10,000,000. Such additional purchases which the Administration -'> makes under this paragraph shall contain conditions to insure

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