Page:United States Statutes at Large Volume 94 Part 2.djvu/1001

 PUBLIC LAW 96-477—OCT. 21, 1980

94 STAT. 2279

section 7 of the Securities Exchange Act of 1934, or from any is use 78g. person who is an officer or employee of such issuer, if— "(i) at the time of the purchase, the business development company owns at least 50 per centum of— "(I) the greatest number of equity securities of such issuer and securities convertible into or exchangeable for such securities; and "(II) the greatest amount of debt securities of such issuer, held by such business development company at any point in time during the period when such issuer was an eligible portfolio company, except that options, warrants, and similar securities which have by their terms expired and debt securities which have been converted, or repaid or prepaid in the ordinary course of business or incident to a public offering of securities of such issuer, shall not be considered to have been held by such business development company for purposes of this requirement; and (ii) the business development company is one of the 20 largest holders of record of such issuer's outstanding voting securities; "(2) securities of any eligible portfolio company with respect to which the business development company satisfies the requirements of section 2(a)(46)(C)(ii); Ante, p. 2275. "(3) securities purchased in transactions not involving any public offering from an issuer described in sections 2(a)(46)(A) and (B) or from a person who is, or who within the preceding thirteen months has been, an affiliated person of such issuer, or from any person in transactions incident thereto, if such securities were— "(A) issued by an issuer that is, or was immediately prior to the purchase of its securities by the business development company, in bankruptcy proceedings, subject to reorganization under the supervision of a court of competent jurisdiction, or subject to a plan or arrangement resulting from such bankruptcy proceedings or reorganization; "(B) issued by an issuer pursuant to or in consummation of such a plan or arrangement; or "(C) issued by an issuer that, immediately prior to the purchase of such issuer's securities by the business development company, was not in bankruptcy proceedings but was unable to meet its obligations as they came due without material assistance other than conventional lending or financing arrangements; "(4) securities of eligible portfolio companies purchased from any person in transactions not involving any public offering, if there is no ready market for such securities and if immediately prior to such purchase the business development company owns at least 60 per centum of the outstanding equity securities of such issuer (giving effect to all securities presently convertible into or exchangeable for equity securities of such issuer as if such securities were so converted or exchanged); "(5) securities received in exchange for or distributed on or with respect to securities described in paragraphs (1) through (4) of this subsection, or pursuant to the exercise of options, warrants, or rights relating to securities described in such paragraphs;

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